Brookdale Senior Living Inc. · NYSE:BKD
Brookdale Senior Living — Q2 2019 Earnings Presentation
35 slides from Brookdale Senior Living's earnings presentation, Aug 5, 2019
Slide 1: Supplemental Information 2nd Quarter 2019
Exhibit 99.2 Supplemental Information 2nd 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, 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 4: Overview
Overview 2Q19 vs. YTD 2Q19 vs. ($ in 000s) 2018 2019 2Q18 YTD 2Q18 Better (B)/ 1Q 2Q 3Q 4Q Full Year 1Q 2Q (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 (10.5)% (10.6)% Net income (loss) (1) $ (457,234) $ (165,50
Slide 5: Adjusted EBITDA and Adjusted Free Cash Flow
Adjusted EBITDA and Adjusted Free Cash Flow 2Q19 vs. YTD 2Q19 vs. ($ in 000s) 2018 2019 2Q18 YTD 2Q18 1Q 2Q 3Q 4Q Full Year 1Q 2Q 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 (10.5)% (10.6)% Facility operating expense (632,
Slide 6: Adjusted EBITDA and Adjusted Free Cash Flow Distribution
Adjusted EBITDA and Adjusted Free Cash Flow Distribution ($ in 000s) 2Q 2019 Senior Senior Housing Housing Owned Leased Health Care Management Total Portfolio Portfolio Services Services Other (2) Resident fee and management fee revenue $ 817,312 $ 375,900 $ 311,529 $ 114,434 $ 15,449 $ — Facility o
Slide 7: Segment Overview
Segment Overview 2Q19 vs. YTD 2Q19 vs. ($ in 000s, except RevPAR and RevPOR) 2018 2019 2Q18 YTD 2Q18 1Q 2Q 3Q 4Q Full Year 1Q 2Q B(W) 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 $ 817,312 (10.5)% (10
Slide 8: Senior Housing Segments
Senior Housing Segments 2Q19 vs. YTD 2Q19 vs. ($ in 000s, except RevPAR and RevPOR) 2018 2019 2Q18 YTD 2Q18 1Q 2Q 3Q 4Q Full Year 1Q 2Q B(W) B(W) Independent Living Revenue $ 158,397 $ 159,293 $ 144,631 $ 137,656 $ 599,977 $ 135,694 $ 135,951 (14.7)% (14.5)% Segment Operating Income $ 64,422 $ 65,13
Slide 9: Senior Housing: Same Community
Senior Housing: Same Community (1) 2Q19 vs. YTD 2Q19 vs. ($ in 000s, except RevPAR and RevPOR) 2018 2019 2Q18 YTD 2Q18 1Q 2Q 3Q 4Q Full Year 1Q 2Q B(W) B(W) Revenue $ 638,163 $ 631,016 $ 632,044 $ 632,379 $2,533,602 $ 648,192 $ 642,708 1.9 % 1.7 % Community Labor Expense (277,234) (278,058) (286,578
Slide 10: Senior Housing Segments: Same Community
Senior Housing Segments: Same Community (1) 2Q19 vs. YTD 2Q19 vs. ($ in 000s, except RevPAR and RevPOR) 2018 2019 2Q18 YTD 2Q18 1Q 2Q 3Q 4Q Full Year 1Q 2Q B(W) B(W) Independent Living Revenue $ 118,451 $ 118,595 $ 119,099 $ 119,988 $ 476,133 $ 122,457 $ 122,192 3.0 % 3.2 % Community Labor Expense (
Slide 11: Senior Housing Owned Portfolio
Senior Housing Owned Portfolio 2Q19 vs. YTD 2Q19 vs. ($ in 000s, except RevPAR and RevPOR) 2018 2019 2Q18 YTD 2Q18 1Q 2Q 3Q 4Q Full Year 1Q 2Q B(W) B(W) Resident fee revenue $ 383,910 $ 388,108 $ 387,585 $ 382,533 $1,542,136 $ 380,691 $ 375,900 (3.1)% (2.0)% Facility operating expense (260,673) (265
Slide 12: Senior Housing Leased Portfolio
Senior Housing Leased Portfolio 2Q19 vs. YTD 2Q19 vs. ($ in 000s, except RevPAR and RevPOR) 2018 2019 2Q18 YTD 2Q18 1Q 2Q 3Q 4Q Full Year 1Q 2Q B(W) B(W) Resident fee revenue $ 411,836 $ 398,008 $ 344,318 $ 315,938 $1,470,100 $ 317,256 $ 311,529 (21.7)% (22.4)% Facility operating expense (269,450) (
Slide 13: New Supply: Brookdale's Largest Markets - Competitive Summary
New Supply Brookdale's Largest 20 Markets - Competitive Summary 2Q 2019 Weighted Average Occupancy 60% Quadrant with highest demographic growth & ) 2 ( 55%lowest new openings h t w o r 81.9% G 76.4% 82.9% Jacksonville + 90.2% k 50% Colorado Springs Denver 82.2% 0 Orlando 5 87.9% Austin $ 85.5% Charl
Slide 14: Health Care Services
Health Care Services 2Q19 vs. YTD 2Q19 vs. ($ in 000s) 2018 2019 2Q18 YTD 2Q18 1Q 2Q 3Q 4Q Full Year 1Q 2Q B(W) B(W) Resident fee revenue Home health $ 85,490 $ 83,818 $ 81,722 $ 81,033 $ 332,063 $ 84,185 $ 85,233 1.7 % 0.1 % Hospice 19,327 19,676 20,574 21,257 80,834 21,722 23,184 17.8 % 15.1 % Out
Slide 15: G&A Expense
G&A Expense 2Q19 vs. YTD 2Q19 vs. ($ in 000s) 2018 2019 2Q18 YTD 2Q18 1Q 2Q 3Q 4Q Full Year 1Q 2Q 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 (13.1)% (3.3)% Senior Housing Leased Portfolio allocation 1
Slide 16: Capital Expenditures
Capital Expenditures ($ in 000s, except for community level capital 2Q19 vs. YTD 2Q19 vs. expenditures, net, per weighted average unit) 2018 2019 2Q18 YTD 2Q18 1Q 2Q 3Q 4Q Full Year 1Q 2Q B(W) B(W) Community level capital expenditures, including allocations (1) Senior Housing Owned Portfolio $ 19,47
Slide 17: Cash Facility Lease Payments
Cash Facility Lease Payments 2Q19 vs. YTD 2Q19 vs. ($ in 000s) 2018 2019 2Q18 YTD 2Q18 1Q 2Q 3Q 4Q Full Year 1Q 2Q B(W) B(W) Operating Lease Obligations Facility lease expense $ 80,400 $ 81,960 $ 70,392 $ 70,542 $ 303,294 $ 68,668 $ 67,689 17.4 % 16.0 % Operating lease expense adjustment 8,103 4,066
Slide 18: Unconsolidated Ventures
Unconsolidated Ventures Trailing 12 Months Ended ($ in 000s) 2Q 2019 June 30, 2019 Total CCRC Venture Other Ventures Total Resident fee revenue $ 109,409 $ 107,826 $ 1,583 $ 476,838 Facility operating expense (82,289) (81,148) (1,141) (360,587) General and administrative expense including management
Slide 19: Capital Structure
Capital Structure Total Liquidity Debt Structure (2) Debt ($ in millions) ($ in millions) ($ in millions) Maturity Weighted Rate Variable rate debt with 2019 (4) $ 86 4.79% interest rate caps $592 2020 388 5.54% $600 $530 Fixed rate $487 $496 2021 333 5.98% $459 debt 2022 321 4.65% ) $1,143 s $147 n
Slide 20: Net Asset Value Elements
Net Asset Value Elements ($ in 000s and are for the trailing twelve months ended June 30, 2019 unless otherwise noted) Senior Housing Owned Portfolio (1) Owned Portfolio Operating Income (Including G&A assumption) (2) $ 356,782 Net Debt as of June 30, 2019 (see page 19) $ 3,257,155 Total Average Uni
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 28 23
Slide 24: Pro-Forma Financial Information
Pro-Forma Financial Information During the period of July 1, 2018 to June 30, 2019, the Company disposed of an aggregate of 27 owned communities, its triple-net lease obligations on an aggregate of 50 communities were terminated and management arrangements on 102 net communities were terminated. Dur
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 Impact of Trailing Twelve Transactions Net of Amounts Completed or Attributable to New Lease Months Ended Completed on Attributable to Expected to be Completed a
Slide 26: Pro-Forma Second Quarter 2019 YTD
Pro-Forma Second Quarter 2019 YTD 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 YTD 2Q19 during Completed Co
Slide 27: Pro-Forma Second Quarter 2019
Pro-Forma Second 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 2Q19 Actual during Completed Com
Slide 28: 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 29: Adjusted EBITDA Reconciliation
Non-GAAP Financial Measures (Continued) Adjusted EBITDA Reconciliation Trailing Twelve ($ in 000s) 2018 2019 Months Ended 1Q 2Q 3Q 4Q Full Year 1Q 2Q YTD June 30, 2019 Net income (loss) $(457,234) $(165,509) $ (37,140) $ 131,531 $ (528,352) $ (42,606) $ (56,055) $ (98,661) $ (4,270) Provision (benef
Slide 30: 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 (excluding the new lease standard impact) ($ in 000s) Trailing Twelve Months Ended June 30, 2019 Net income (loss) $ (4,270) Benefit for income taxes (48
Slide 31: Net Debt and Adjusted Net Debt Reconciliations
Non-GAAP Financial Measures (Continued) Net Debt and Adjusted Net Debt Reconciliations ($ in 000s) As of June 30, 2019 Long-term debt (including current portion) $ 3,572,572 Line of credit — Cash and cash equivalents (255,999) Marketable securities (58,805) Cash held as collateral against existing d
Slide 32: 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 2Q YTD June 30, 2019 Net cash provided by (used in) operating activities $ 37,964 $ 60,620 $ 71,924 $ 33,453 $ 203,961 $ (5,009) $ 64,128 $ 59,11
Slide 33: 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 34: 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 35: 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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