Brookdale Senior Living Inc. · NYSE:BKD
Brookdale Senior Living — Q1 2019 Earnings Presentation
34 slides from Brookdale Senior Living's earnings presentation, May 6, 2019
Slide 1: Supplemental Information 1st Quarter 2019
Exhibit 99.2 Supplemental Information 1st Quarter 2019
Slide 2: Table of Contents
Table of Contents Lease Accounting Standard (ASC 842) Impact 3 Overview 4 Segment Overview 7 Senior Housing 8 Health Care Services 14 G&A Expense 15 Capital Expenditures 16 Cash Facility Lease Payments 17 Unconsolidated Ventures 18 The Company reports information on five segments. Three segments Cap
Slide 3: Lease Accounting Standard (ASC 842) Impact
Lease Accounting Standard (ASC 842) Impact The Company’s adoption of the new lease accounting standard under ASC 842 and application to its residency agreements and costs related thereto effective January 1, 2019 has resulted for the first quarter 2019, and will result for remaining 2019 periods, in
Slide 4: Overview
Overview 1Q19 vs. ($ in 000s) 2018 2019 1Q18 Better (B)/ 1Q 2Q 3Q 4Q Full Year 1Q (Worse (W)) Resident fee and management fee revenue (1) $ 924,947 $ 913,040 $ 858,707 $ 824,503 $ 3,521,197 $ 825,222 (10.8)% Net income (loss) (1) $ (457,234) $ (165,509) $ (37,140) $ 131,531 $ (528,352) $ (42,606) 90
Slide 5: Adjusted EBITDA and Adjusted Free Cash Flow
Adjusted EBITDA and Adjusted Free Cash Flow 1Q19 vs. ($ in 000s) 2018 2019 1Q18 1Q 2Q 3Q 4Q Full Year 1Q B(W) Resident fee and management fee revenue $ 924,947 $ 913,040 $ 858,707 $ 824,503 $ 3,521,197 $ 825,222 (10.8)% Facility operating expense (632,325) (627,076) (607,076) (586,851) (2,453,328) (
Slide 6: Adjusted EBITDA and Adjusted Free Cash Flow Distribution
Adjusted EBITDA and Adjusted Free Cash Flow Distribution ($ in 000s) 1Q 2019 Senior Senior Housing Housing Owned Leased Health Care Management Total Portfolio Portfolio Services Services Other (2) Resident fee and management fee revenue $ 825,222 $ 380,691 $ 317,256 $ 111,532 $ 15,743 $ — Facility o
Slide 7: Segment Overview
Segment Overview 1Q19 vs. ($ in 000s, except RevPAR and RevPOR) 2018 2019 1Q18 1Q 2Q 3Q 4Q Full Year 1Q B(W) Total Senior Housing, Health Care Services and Management Services Revenue (1) $ 924,947 $ 913,040 $ 858,707 $ 824,503 $3,521,197 $ 825,222 (10.8)% Combined Segment Operating Income $ 292,622
Slide 8: Senior Housing Segments
Senior Housing Segments 1Q19 vs. ($ in 000s, except RevPAR and RevPOR) 2018 2019 1Q18 1Q 2Q 3Q 4Q Full Year 1Q B(W) Independent Living Revenue $ 158,397 $ 159,293 $ 144,631 $ 137,656 $ 599,977 $ 135,694 (14.3)% Segment Operating Income $ 64,422 $ 65,134 $ 57,106 $ 53,947 $ 240,609 $ 52,876 (17.9)% S
Slide 9: Senior Housing: Same Community
Senior Housing: Same Community (1) 1Q19 vs. ($ in 000s, except RevPAR and RevPOR) 2018 2019 1Q18 1Q 2Q 3Q 4Q Full Year 1Q B(W) Revenue $ 643,884 $ 636,441 $ 637,312 $ 637,683 $2,555,320 $ 653,588 1.5 % Community Labor Expense (279,995) (281,165) (289,264) (288,993) (1,139,417) (291,549) (4.1)% Other
Slide 10: Senior Housing Segments: Same Community
Senior Housing Segments: Same Community (1) 1Q19 vs. ($ in 000s, except RevPAR and RevPOR) 2018 2019 1Q18 1Q 2Q 3Q 4Q Full Year 1Q B(W) Independent Living Revenue $ 118,451 $ 118,595 $ 119,098 $ 119,988 $ 476,132 $ 122,436 3.4 % Community labor expense (41,532) (42,236) (42,421) (42,749) (168,938) (
Slide 11: Senior Housing: Owned Portfolio
Senior Housing: Owned Portfolio 1Q19 vs. ($ in 000s, except RevPAR and RevPOR) 2018 2019 1Q18 1Q 2Q 3Q 4Q Full Year 1Q B(W) Resident fee revenue $ 383,910 $ 388,108 $ 387,585 $ 382,533 $1,542,136 $ 380,691 (0.8)% Facility operating expense (260,673) (265,066) (273,881) (270,659) (1,070,279) (269,078
Slide 12: Senior Housing: Leased Portfolio
Senior Housing: Leased Portfolio 1Q19 vs. ($ in 000s, except RevPAR and RevPOR) 2018 2019 1Q18 1Q 2Q 3Q 4Q Full Year 1Q B(W) Resident fee revenue $ 411,836 $ 398,008 $ 344,318 $ 315,938 $1,470,100 $ 317,256 (23.0)% Facility operating expense (269,450) (262,360) (234,406) (213,938) (980,154) (213,657
Slide 13: New Supply
New Supply (1) Brookdale proprietary data represents its consolidated senior housing portfolio (2) ESRI data 2018-2023; Brookdale (3) NIC MAP Supply Set, 1Q19 "New Construction" offering same-product with projected open dates through 1Q2020; one year same product projected openings as a percent of c
Slide 14: Health Care Services
Health Care Services 1Q19 vs. ($ in 000s) 2018 2019 1Q18 1Q 2Q 3Q 4Q Full Year 1Q B(W) Resident fee revenue Home Health $ 85,490 $ 83,818 $ 81,722 $ 81,033 $ 332,063 $ 84,185 (1.5)% Hospice 19,327 19,676 20,574 21,257 80,834 21,722 12.4 % Outpatient Therapy 5,685 6,359 5,980 6,036 24,060 5,625 (1.1)
Slide 15: G&A Expense
G&A Expense 1Q19 vs. ($ in 000s) 2018 2019 1Q18 1Q 2Q 3Q 4Q Full Year 1Q B(W) G&A expense allocations (1) Senior Housing Owned Portfolio allocation $ 16,616 $ 14,924 $ 15,061 $ 14,641 $ 61,242 $ 15,693 5.6 % Senior Housing Leased Portfolio allocation 17,824 16,015 13,380 12,092 59,311 13,078 26.6% H
Slide 16: Capital Expenditures
Capital Expenditures ($ in 000s, except for Community level capital 1Q19 vs. expenditures, net, per weighted average unit) 2018 2019 1Q18 1Q 2Q 3Q 4Q Full Year 1Q B(W) Community level capital expenditures, including allocations (1) Senior Housing Owned Portfolio $ 19,474 $ 18,295 $ 16,126 $ 18,972 $
Slide 17: Cash Facility Lease Payments
Cash Facility Lease Payments 1Q19 vs. ($ in 000s) 2018 2019 1Q18 1Q 2Q 3Q 4Q Full Year 1Q B(W) Operating Lease Obligations Facility lease expense $ 80,400 $ 81,960 $ 70,392 $ 70,542 $ 303,294 $ 68,668 14.6 % Operating lease expense adjustment 8,103 4,066 2,487 2,562 17,218 4,383 45.9 % Amortization
Slide 18: Unconsolidated Ventures
Unconsolidated Ventures Trailing 12 Months Ended ($ in 000s) 1Q 2019 March 31, 2019 Total CCRC Venture Other Ventures Total Resident fee revenue $ 108,591 $ 106,609 $ 1,982 $ 603,452 Facility operating expense (80,542) (79,121) (1,421) (457,794) General and administrative expense including managemen
Slide 19: Capital Structure
Capital Structure Total Liquidity (1) Debt Structure (2) ($ in millions) ($ in millions) Debt Weighted Rate Variable rate ($ in millions) Maturity Debt debt with 2019 (4) $ 290 5.19% $1,000 interest rate caps $868 2020 388 5.54% $800 Fixed rate debt $1,103 2021 333 5.98% 30% $592 2022 321 4.66% $600
Slide 20: Net Asset Value Elements
Net Asset Value Elements ($ in 000s and are for the trailing twelve months ended March 31, 2019 unless otherwise noted) Senior Housing: Owned Portfolio (1) Owned Portfolio Operating Income (Including G&A assumption) (2) $ 367,808 Net Debt as of March 31, 2019 (see page 19) $ 3,302,699 Total Average
Slide 21: 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 22: Definitions
Definitions Leased Portfolio Operating Income is defined by the Company as resident fee revenue Same Community Operating Income is defined by the Company as resident fee revenue (excluding Health Care Services segment revenue), less facility operating expense for the (excluding Health Care Services
Slide 23: Appendices
Appendices Pro-Forma Financial Information 24 Non-GAAP Financial Measures 27 23
Slide 24: Pro-Forma Financial Information
Pro-Forma Financial Information During the period of April 1, 2018 to March 31, 2019, the Company disposed of an aggregate of 25 owned communities, its triple-net lease obligations on an aggregate of 90 communities were terminated, and the Company acquired five communities that it previously leased
Slide 25: Pro-Forma Trailing Twelve Months
Pro-Forma Trailing Twelve Months Amounts Amounts Attributable to Actual Results Attributable to Actual Results Transactions Net of Amounts Trailing Twelve Transactions Net of Amounts Completed or Attributable to Months Ended Completed on Attributable to Expected to be Completed and March 31, 2019 or
Slide 26: Pro-Forma First Quarter 2019
Pro-Forma First Quarter 2019 Amounts Amounts Attributable to Actual Results Attributable to Actual Results Transactions Net of Amounts Transactions Net of Amounts Completed or Attributable to Impact of Completed Attributable to Expected to be Completed and New Lease 1Q19 Actual during Completed Comp
Slide 27: 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 28: Adjusted EBITDA Reconciliation
Non-GAAP Financial Measures (Continued) Adjusted EBITDA Reconciliation ($ in 000s) 2018 2019 1Q 2Q 3Q 4Q Full Year 1Q Net income (loss) $ (457,234) $ (165,509) $ (37,140) $ 131,531 $ (528,352) $ (42,606) Provision (benefit) for income taxes 15,585 (15,546) (17,763) (31,732) (49,456) 679 Equity in lo
Slide 29: Adjusted EBITDAR; Adjusted EBITDA; and Adjusted EBITDA after Cash Financing Lease Payments
Non-GAAP Financial Measures (Continued) Adjusted EBITDAR; Adjusted EBITDA; and Adjusted EBITDA after Cash Financing Lease Payments Reconciliations ($ in 000s) Trailing Twelve Months Ended March 31, 2019 Net income (loss) $ (113,724) Benefit for income taxes (64,362) Equity in loss of unconsolidated
Slide 30: Net Debt and Adjusted Net Debt Reconciliations
Non-GAAP Financial Measures (Continued) Net Debt and Adjusted Net Debt Reconciliations ($ in 000s) As of March 31, 2019 Long-term debt (including current portion) $ 3,642,997 Line of credit — Cash and cash equivalents (256,501) Marketable securities (83,517) Cash held as collateral against existing
Slide 31: Adjusted Free Cash Flow Reconciliation
Non-GAAP Financial Measures (Continued) Adjusted Free Cash Flow Reconciliation ($ in 000s) 2018 2019 Trailing Twelve Months Ended 1Q 2Q 3Q 4Q Full Year 1Q March 31, 2019 Net cash provided by (used in) operating activities $ 37,964 $ 60,620 $ 71,924 $ 33,453 $ 203,961 $ (5,009) $ 160,988 Net cash pro
Slide 32: Proportionate Share of Adjusted EBITDA of Unconsolidated Ventures
Non-GAAP Financial Measures (Continued) Brookdale's Proportionate Share of Adjusted EBITDA of Unconsolidated Ventures 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. ($ in 000s) 2018 2019
Slide 33: 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 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. ($ in 000s) 20
Slide 34: Brookdale Senior Living Inc.
Brookdale Senior Living Inc. 111 Westwood Place, Suite 400 Brentwood, TN 37027 (615) 221-2250 www.brookdale.com
Brookdale Senior Living — Q1 2019 Earnings Presentation on 6ix