Brookdale Senior Living Inc. · NYSE:BKD
Brookdale Senior Living — Q3 2019 Earnings Presentation
38 slides from Brookdale Senior Living's earnings presentation, Nov 4, 2019
Slide 1: Supplemental Information 3rd Quarter 2019
Exhibit 99.2 Supplemental Information 3rd Quarter 2019
Slide 2: Table of Contents
Table of Contents Lease Accounting Standard (ASC 842) Impact 4 Overview 5 Segment Overview 8 Senior Housing 9 Health Care Services 15 G&A Expense 16 Capital Expenditures 17 Cash Facility Lease Payments 18 Unconsolidated Ventures 19 The Company reports information on five segments. Three segments Cap
Slide 3: Safe Harbor
SAFE HARBOR Certain statements in this Supplemental Information may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties and include all statements regarding t
Slide 4: Lease Accounting Standard (ASC 842) Impact
Lease Accounting Standard (ASC 842) Impact The Company’s adoption of the new lease accounting standard, effective January 1, 2019, impacted the timing of the revenue and cost recognition associated with its residency agreements. For the full year 2019, the Company expects the adoption and applicatio
Slide 5: Overview
Overview 3Q19 vs. YTD 3Q19 vs. 2018 2019 3Q18 YTD 3Q18 Consolidated, unless otherwise noted Better (B)/ ($ in 000s) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q (Worse) (W) B/(W) Resident fee and management fee revenue (1) $ 924,947 $ 913,040 $ 858,707 $ 824,503 $ 3,521,197 $ 825,222 $ 817,312 $ 814,801 (5.1)% (8
Slide 6: Adjusted EBITDA and Adjusted Free Cash Flow
Adjusted EBITDA and Adjusted Free Cash Flow 3Q19 vs. YTD 3Q19 vs. Consolidated, unless otherwise noted 2018 2019 3Q18 YTD 3Q18 ($ in 000s) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Resident fee and management fee revenue $ 924,947 $ 913,040 $ 858,707 $ 824,503 $ 3,521,197 $ 825,222 $ 817,312 $ 814,80
Slide 7: Adjusted EBITDA and Adjusted Free Cash Flow Distribution
Adjusted EBITDA and Adjusted Free Cash Flow Distribution Consolidated 3Q 2019 Senior Senior Housing Housing Consolidated, unless otherwise noted Owned Leased Health Care Management ($ in 000s) Total Portfolio Portfolio Services Services Other (2) Resident fee and management fee revenue $ 814,801 $ 3
Slide 8: Segment Overview
Segment Overview 3Q19 vs. YTD 3Q19 vs. Consolidated, unless otherwise noted 2018 2019 3Q18 YTD 3Q18 ($ in 000s, except RevPAR and RevPOR) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Total Senior Housing, Health Care Services and Management Services Revenue (1) $ 924,947 $ 913,040 $ 858,707 $ 824,503 $3
Slide 9: Senior Housing Segments
Senior Housing Segments Consolidated 3Q19 vs. YTD 3Q19 vs. ($ in 000s, except RevPAR and RevPOR) 2018 2019 3Q18 YTD 3Q18 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Independent Living Revenue $ 158,397 $ 159,293 $ 144,631 $ 137,656 $ 599,977 $ 135,694 $ 135,951 $ 136,874 (5.4)% (11.6)% Segment Operatin
Slide 10: Senior Housing: Same Community
Senior Housing: Same Community (1) 3Q19 vs. YTD 3Q19 vs. Consolidated 2018 2019 3Q18 YTD 3Q18 ($ in 000s, except RevPAR and RevPOR) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Revenue $ 622,845 $ 615,620 $ 618,129 $ 618,061 $2,474,655 $ 633,249 $ 627,663 $ 629,159 1.8 % 1.8 % Community Labor Expense (2
Slide 11: Senior Housing Segments: Same Community
Senior Housing Segments: Same Community (1) 3Q19 vs. YTD 3Q19 vs. Consolidated 2018 2019 3Q18 YTD 3Q18 ($ in 000s, except RevPAR and RevPOR) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Independent Living Revenue $ 115,124 $ 115,228 $ 115,887 $ 116,678 $ 462,917 $ 119,042 $ 118,701 $118,981 2.7 % 3.0 %
Slide 12: Senior Housing Owned Portfolio
Senior Housing Owned Portfolio 3Q19 vs. YTD 3Q19 vs. Consolidated 2018 2019 3Q18 YTD 3Q18 ($ in 000s, except RevPAR and RevPOR) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Resident fee revenue $ 383,910 $ 388,108 $ 387,585 $ 382,533 $1,542,136 $ 380,691 $ 375,900 $ 377,451 (2.6)% (2.2)% Facility operat
Slide 13: Senior Housing Leased Portfolio
Senior Housing Leased Portfolio 3Q19 vs. YTD 3Q19 vs. Consolidated 2018 2019 3Q18 YTD 3Q18 ($ in 000s, except RevPAR and RevPOR) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Resident fee revenue $ 411,836 $ 398,008 $ 344,318 $ 315,938 $1,470,100 $ 317,256 $ 311,529 $ 312,001 (9.4)% (18.5)% Facility oper
Slide 14: New Supply: Brookdale's Largest Markets - Competitive Summary
New Supply Brookdale's Largest 20 Markets - Competitive Summary 3Q 2019 Weighted Average Occupancy Quadrant with highest demographic60 growth% & lowest new openings 91.3% Portland ) 87.6% 2 ( 55% 86.7% 83.4% Charlotte h t Seattle Jacksonville 84.2% w 78.4% o Denver r Colorado Springs 82.6% G 85.5% A
Slide 15: Health Care Services
Health Care Services Consolidated 3Q19 vs. YTD 3Q19 vs. ($ in 000s) 2018 2019 3Q18 YTD 3Q18 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Resident fee revenue Home health $ 85,490 $ 83,818 $ 81,722 $ 81,033 $ 332,063 $ 84,185 $ 85,233 $ 80,632 (1.3)% (0.4)% Hospice 19,327 19,676 20,574 21,257 80,834 21,7
Slide 16: G&A Expense
G&A Expense Consolidated, unless otherwise noted 3Q19 vs. YTD 3Q19 vs. ($ in 000s) 2018 2019 3Q18 YTD 3Q18 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) G&A expense allocations (1) Senior Housing Owned Portfolio allocation $ 16,616 $ 14,924 $ 15,061 $ 14,641 $ 61,242 $ 15,693 $ 16,875 $ 15,759 (4.6)% (3.
Slide 17: Capital Expenditures
Capital Expenditures Consolidated 3Q19 vs. YTD 3Q19 vs. ($ in 000s, except for community level capital 2018 2019 3Q18 YTD 3Q18 expenditures, net, per weighted average unit) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Community level capital expenditures, including allocations (1) Senior Housing Owned P
Slide 18: Cash Facility Lease Payments
Cash Facility Lease Payments 3Q19 vs. YTD 3Q19 vs. Consolidated 2018 2019 3Q18 YTD 3Q18 ($ in 000s) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Operating Lease Obligations Facility lease expense $ 80,400 $ 81,960 $ 70,392 $ 70,542 $ 303,294 $ 68,668 $ 67,689 $ 67,253 Operating lease expense adjustment
Slide 19: Unconsolidated Ventures
Unconsolidated Ventures Trailing 12 Months Ended 3Q 2019 September 30, 2019 ($ in 000s) Total CCRC Venture (1) Other Ventures Total Resident fee revenue $ 108,164 $ 107,492 $ 672 $ 434,579 Facility operating expense (83,419) (82,815) (604) (328,388) General and administrative expense including manag
Slide 20: Capital Structure (consolidated)
Capital Structure (consolidated) Total Liquidity Debt Structure (1) Debt ($ in millions) ($ in millions) ($ in millions) Maturity Weighted Rate Variable rate debt with 2019 (3) $ 77 4.93% interest rate caps $592 2020 281 5.43% $600 $530 Fixed rate 2021 333 5.96% $479 $459 $455 debt 2022 321 4.44% )
Slide 21: Pro-Forma Net Asset Value Elements
Pro-Forma Net Asset Value Elements Consolidated ($ in millions and are for the trailing twelve months ended September 30, 2019 unless otherwise noted) Pro-Forma Senior Housing Owned Portfolio (1) Owned Portfolio Operating Income (Loss) (Including G&A assumption) (2) $ 386.0 Net Debt as of September
Slide 22: Definitions
Definitions Adjusted EBITDA is a non-GAAP performance measure that the Company defines as net Brookdale’s Proportionate Share of Adjusted EBITDA of Unconsolidated Ventures income (loss) excluding: benefit/provision for income taxes, non-operating income/ is calculated based on the Company’s equity o
Slide 23: Definitions
Definitions Leased Portfolio Operating Income is defined by the Company as resident fee revenue Same Community information reflects historical results from senior housing operations (excluding Health Care Services segment revenue), less facility operating expense for the for same store communities (
Slide 24: Appendices
Appendices Pro-Forma Financial Information 25 Definitive Agreements with HCP 29 Non-GAAP Financial Measures 31 24
Slide 25: Pro-Forma Financial Information
Pro-Forma Financial Information During the period of October 1, 2018 to September 30, 2019, the Company disposed of an aggregate of 27 owned communities, its triple-net lease obligations on an aggregate of 31 communities were terminated, and management arrangements on 109 net communities were termin
Slide 26: Pro-Forma Trailing Twelve Months
Pro-Forma Trailing Twelve Months Amounts Amounts Attributable to Attributable to Actual Results Amounts the October 1, Other Net of Amounts Attributable to 2019 Announced Transactions Attributable to Trailing Twelve Transactions Actual Results Transactions with Completed or Less: Impact the New Leas
Slide 27: Pro-Forma Third Quarter 2019 YTD
Pro-Forma Third Quarter 2019 YTD Amounts Attributable to Amounts Actual Results the October 1, Attributable to Net of Amounts Amounts 2019 Announced Transactions Attributable to Attributable to Actual Results Transactions with Completed or Less: Impact the New Lease Transactions Net of Amounts HCP E
Slide 28: Pro-Forma Third Quarter 2019
Pro-Forma Third Quarter 2019 Amounts Attributable to Amounts Actual Results the October 1, Attributable to Net of Amounts Amounts 2019 Announced Transactions Attributable to Attributable to Actual Results Transactions with Completed or Less: Impact the New Lease Transactions Net of Amounts HCP Expec
Slide 29: Definitive Agreements with HCP
Definitive Agreements with HCP On October 1, 2019, the Company and HCP entered into several definitive agreements providing for multiple transactions, including a Master Transactions and Cooperation Agreement and Equity Interest Purchase Agreement. The parties subsequently amended the agreements to
Slide 30: Definitive Agreements with HCP Impact
Definitive Agreements with HCP Impact Sale of Interest in Sale of Interest in A&R Master Unconsolidated Termination of Unconsolidated Lease and Total, Estimated Total, Communities to Management Communities to Acquisition Before One- One-Time Including One- ($ in millions) HCP Agreements Third Partie
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures This Supplemental Information contains the financial measures Adjusted EBITDA, Adjusted EBITDAR, Adjusted EBITDA after cash financing lease payments, Adjusted Free Cash Flow, Net Debt, and Adjusted Net Debt (each as defined in the “Definitions” section), which are not cal
Slide 32: Adjusted EBITDA Reconciliation
Non-GAAP Financial Measures (Continued) Adjusted EBITDA Reconciliation Consolidated Trailing Twelve ($ in 000s) 2018 2019 Months Ended September 30, 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q YTD 2019 Net income (loss) $(457,234) $(165,509) $ (37,140) $ 131,531 $ (528,352) $ (42,606) $ (56,055) $ (78,508) $(177
Slide 33: Adjusted EBITDAR and Adjusted EBITDA Reconciliations
Non-GAAP Financial Measures (Continued) Adjusted EBITDAR; Adjusted EBITDA; and Adjusted EBITDA after Cash Financing Lease Payments Reconciliations (excluding the new lease standard impact) Consolidated Trailing Twelve Months Ended ($ in 000s) September 30, 2019 Net income (loss) $ (45,638) Provision
Slide 34: Net Debt and Adjusted Net Debt Reconciliations
Non-GAAP Financial Measures (Continued) Net Debt and Adjusted Net Debt Reconciliations Pro - Forma Amounts Attributable to the October 1, 2019 Amounts Attributable to Announced Transactions Other Transactions Actual Amounts Net of with HCP Expected to be Completed or Expected to Amounts Attributable
Slide 35: Adjusted Free Cash Flow Reconciliation
Non-GAAP Financial Measures (Continued) Adjusted Free Cash Flow Reconciliation Trailing Twelve Months Ended Consolidated 2018 2019 September 30, ($ in 000s) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q YTD 2019 Net cash provided by (used in) operating activities $ 37,964 $ 60,620 $ 71,924 $ 33,453 $ 203,961 $ (5,
Slide 36: Proportionate Share of Adjusted EBITDA of Unconsolidated Ventures
Non-GAAP Financial Measures (Continued) Brookdale's Proportionate Share of Adjusted EBITDA of Unconsolidated Ventures (1) For purposes of this presentation, amounts for each line item represent the aggregate amounts of such line items for all the Company's unconsolidated ventures. Trailing Twelve ($
Slide 37: Proportionate Share of Adjusted Free Cash Flow of Unconsolidated Ventures
Non-GAAP Financial Measures (Continued) Brookdale's Proportionate Share of Adjusted Free Cash Flow of Unconsolidated Ventures (1) For purposes of this presentation, amounts for each line item represent the aggregate amounts of such line items for all the Company's unconsolidated ventures. Trailing T
Slide 38: Brookdale Senior Living Inc.
Brookdale Senior Living Inc. 111 Westwood Place, Suite 400 Brentwood, TN 37027 (615) 221-2250 www.brookdale.com
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