Brookdale Senior Living Inc. · NYSE:BKD
Brookdale Senior Living — Q3 2017 Earnings Presentation
32 slides from Brookdale Senior Living's earnings presentation, Nov 7, 2017
Slide 1: Supplemental Information 3rd Quarter 2017
Supplemental Information 3rd Quarter 2017 Exhibit 99.2
Slide 2: Table of Contents
2 Financial Overview 3 Segment Overview 7 Senior Housing 8 Ancillary Services 13 G&A Expense & Transaction Costs 14 Capital Expenditures 15 Cash Lease Payments 16 Unconsolidated Ventures 17 Debt & Liquidity 18 Net Asset Value Elements 20 Definitions 21 Appendix: Consolidated Statements of Cash Flows
Slide 3: Financial Overview
3 (1) Brookdale’s weighted average unit ownership percentage is 21.8%. Important Note Regarding Non-GAAP Financial Measures. Adjusted EBITDA, Adjusted Free Cash Flow, Brookdale's Proportionate Share of Adjusted EBITDA of Unconsolidated Ventures and Brookdale’s Proportionate Share of Adjusted Free Ca
Slide 4: Segment Overview
4 Segment Overview (1) Senior Housing Segments Re venue (2 ) Segme nt O pe ra ting In come (3 ) (1) Brookdale’s five segments are Retirement Centers, Assisted Living, CCRCs–Rental (which combined are referred to as Senior Housing), Brookdale Ancillary Services and Management Services. (2) Percentage
Slide 5: Consolidated Financial Overview
5 (1) Includes hurricane and natural disaster expense of $5.3 million in Q3 2017. (2) Primarily consists of proceeds from property insurance, cash paid for debt modification and extinguishment costs and cash paid for state income taxes. (All amounts in 000s) FY 2016 FY 2017 YoY Q3 Q4 Q1 Q2 Q3 Q3 Res
Slide 6: Q3 2017 Segment Overview
6 (1) Other is primarily comprised of corporate capital expenditures, unallocated G&A expense (primarily strategic project costs), non-cash stock-based compensation, transaction costs, and debt modification costs. ($ in 000s) Q3 2017 Total Senior Housing Owned Portfolio Senior Housing Leased Portfol
Slide 7: Senior Housing
7(1) Excludes reimbursed costs on behalf of managed communities of $187,763, $178,530, $183,945, $229,960 and $236,958 (in thousands), respectively. ($ in 000s, except RevPAR and RevPOR) FY 2016 FY 2017 YoY Q3 Q4 Q1 Q2 Q3 Q3 Total Senior Housing, Brookdale Ancillary and Management Services(1) Revenu
Slide 8: Senior Housing Segments
8 Retirement Centers Revenue $ 170,706 $ 169,381 $ 172,620 $ 162,248 $ 161,986 (5.1)% Segment Operating Income $ 73,112 $ 72,215 $ 74,002 $ 67,297 $ 65,907 (9.9)% Segment Operating Margin 42.8% 42.6% 42.9% 41.5% 40.7% -210 bps Number of communities (period end) 95 93 86 86 85 Period end number of un
Slide 9: Same Community Results
9 Revenue $ 795,568 $ 787,756 $ 808,173 $ 796,482 $ 792,449 (0.4)% Community Labor Expense (322,967) (327,879) (330,890) (337,920) (342,677) Other facility operating expense (182,193) (179,487) (176,638) (182,788) (185,774) Facility operating expense (1) (505,160) (507,366) (507,528) (520,708) (528,
Slide 10: Senior Housing Owned Portfolio
10 Resident fee revenue $ 403,655 $ 383,588 $ 388,310 $ 381,418 $ 376,896 Less: Facility operating expense (271,664) (259,430) (252,673) (257,991) (261,069) Owned Portfolio Operating Income 131,991 124,158 135,637 123,427 115,827 (12.2)% Less: G&A Portfolio Allocation (see page 14) (14,685) (16,163)
Slide 11: Senior Housing Leased Portfolio
11 Resident fee revenue $ 521,913 $ 512,444 $ 516,645 $ 442,462 $ 435,392 Less: Facility operating expense (329,918) (328,993) (325,526) (287,327) (288,804) Leased Portfolio Operating Income 191,995 183,451 191,119 155,135 146,588 (23.7 )% Less: G&A Portfolio Allocation (see page 14) (18,987) (21,59
Slide 12: Brookdale's Largest 20 Markets - Competitive Summary
12 (1) Data reflected is for the consolidated senior housing portfolio only. (2) NIC MAP Supply Set, Q3 2017 "New Construction" properties with projected open dates through Q3 2018. (3) Saturation is equal to units per population Age 75+ with income 50k+. (4) Percentage changes are based on data fro
Slide 13: Ancillary Services
13 Resident fee revenue Home Health $ 91,858 $ 91,199 $ 92,241 $ 88,561 $ 87,315 Outpatient Therapy 12,667 9,320 6,375 6,179 5,941 Hospice 11,766 12,531 13,346 15,441 17,328 Other ancillary services 972 992 10 9 20 Segment resident fee revenue 117,263 114,042 111,972 110,190 110,604 (5.7)% Segment O
Slide 14: G&A Expense & Transaction Costs
14 (1) G&A allocations are calculated using a methodology which the Company believes best matches the type of general and administrative cost with the community, segment, or portfolio. Some of the allocations are based on direct utilization and some are based on formulas such as unit proportion. G&A
Slide 15: Capital Expenditures
15 (1) Includes net recurring and EBITDA-enhancing projects which were formerly reported separately. (2) Formerly referred to by the Company as corporate, integration and other. Community level capital expenditures, including allocations(1) Senior Housing Owned Portfolio $ 19,983 $ 18,668 $ 13,909 $
Slide 16: Cash Lease Payments
16(1) Includes cash lease payments of $3,570, $3,566, $3,514, $3,491, and $3,466 (in thousands), respectively, for leases of corporate offices and information technology systems and equipment. Operating Leases Facility lease expense $ 92,519 $ 91,745 $ 88,807 $ 84,690 $ 84,437 Less: Straight-line (i
Slide 17: Unconsolidated Ventures
17 ($ in 000s) Q3 2017 Twelve Months Ended September 30, 2017 Total CCRC Venture Other Ventures Total Resident fee revenue $ 354,669 $ 101,124 $ 253,545 $ 1,296,157 Less: Facility operating expenses (254,586) (77,818) (176,768) (898,208) Less: G&A expenses including management fees (21,046) (5,236)
Slide 18: Debt & Liquidity
18 $2,565,368 $1,372,410 (1) Includes the carrying value of mortgage debt, convertible notes, line of credit and other notes payable, but excludes capital and financing lease obligations. (2) Pertaining to variable rate debt, reflects a) market rates as of September 30, 2017 and b) applicable cap ra
Slide 19: Debt Maturity Schedule
19 Debt Maturity Schedule(1) ($ in 000s) Debt $1,400,000 $700,000 $0 2017 2018 2019 2020 2021 Thereafter $53,181 $528,102 $325,808 $485,621 $335,877 $2,209,189 (1) Includes carrying value of $306.1 million of convertible notes. (2) Includes mortgage debt, convertible notes and other notes payable, b
Slide 20: Net Asset Value Elements
20 (1) Includes results of operations of communities disposed through sale or lease termination through the disposal date. (2) See page 14. G&A allocations presented on this page exclude non-cash stock-based compensation expense of $27,614 and integration, transaction, transaction-related and strate
Slide 21: Definitions
21 Adjusted EBITDA is a non-GAAP financial measure that the Company defines as net income (loss) before provision (benefit) for income taxes; non-operating (income) expense items; depreciation and amortization (including non-cash impairment charges); (gain) loss on sale or acquisition of communities
Slide 22: Definitions (continued)
22 Leased Portfolio Operating Income is defined by the Company as resident fee revenues (excluding Brookdale Ancillary Services segment revenue), less facility operating expenses for the Company’s Senior Housing Leased Portfolio. Leased Portfolio Operating Income does not include general and adminis
Slide 23: Appendix
23 Brookdale West Hartford West Hartford, CT Consolidated Statements of Cash Flows 24 Non-GAAP Financial Measures 25 Appendix
Slide 24: Consolidated Statements of Cash Flows
24 Cash Flows from Operating Activities Net income (loss) $ (51,728) $ (268,600) $ (126,361) $ (46,337) $ (413,929) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Loss on extinguishment of debt, net 236 876 54 42 573 Depreciation and amortization, net 133,16
Slide 25: Non-GAAP Financial Measures
25 This Supplemental Information contains financial measures utilized by management to evaluate the Company’s operating performance and liquidity that are not calculated in accordance with GAAP, including Adjusted EBITDA; the Company's Proportionate Share of Adjusted EBITDA of Unconsolidated Venture
Slide 26: Adjusted EBITDA Reconciliation
26 Net income (loss) $ (51,728) $ (268,600) $ (126,361) $ (46,337) $ (413,929) Provision (benefit) for income taxes 4,159 (569) 84,028 (2,735) (31,218) Equity in (earnings) loss of unconsolidated ventures 878 (1,182) (981) 4,570 6,722 Debt modification and extinguishment costs 1,944 5,930 61 693 11,
Slide 27: Adjusted EBITDAR and Adjusted EBITDA Reconciliations
27 Adjusted EBITDAR; Adjusted EBITDA; and Adjusted EBITDA after cash capital and financing lease payments Reconciliations (excluding integration, transaction, transaction-related and strategic-project costs) ($ in 000s) Twelve Months Ended September 30, 2016 2017 Net income (loss) $ (310,339) $ (855
Slide 28: Net Debt and Adjusted Net Debt Reconciliations
28 Net Debt and Adjusted Net Debt Reconciliations ($ in 000s) As of September 30, 2016 2017 Long-term debt (including current portion) $ 3,639,360 $ 3,937,778 Line of credit 100,000 — Less: cash and cash equivalents (74,184) (291,554) Less: marketable securities — (246,376) Less: cash held as collat
Slide 29: Adjusted Free Cash Flow Reconciliation
29 Net cash provided by operating activities $ 99,442 $ 88,451 $ 66,766 $ 133,108 $ 83,235 Net cash (used in) provided by investing activities 102,362 231,199 (200,372) (60,843) (268,503) Net cash (used in) provided by financing activities (166,673) (177,437) (23,554) 20,026 325,294 Net (decrease) i
Slide 30: Proportionate Share of Adjusted EBITDA of Unconsolidated Ventures
30 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) FY 2016 FY 2017 TTM Q3 Q4 Q1 Q2 Q3 Q3 2017 Net
Slide 31: Proportionate Share of Adjusted Free Cash Flow of Unconsolidated Ventures
31 Net cash provided by operating activities $ 47,095 $ 40,994 $ 59,924 $ 85,867 $ 62,054 $ 248,839 Net cash (used in) provided by investing activities (40,885) 5,556 (1,150,080) (68,585) (20,267) (1,233,376) Net cash (used in) provided by financing activities (12,073) (55,554) 1,145,059 (29,166) (3
Slide 32: Brookdale Senior Living Inc. contact details
Brookdale Senior Living Inc. 111 Westwood Place, Suite 400 Brentwood, TN 37027 (615) 221-2250 www.brookdale.com
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