Brookdale Senior Living Inc. · NYSE:BKD
Brookdale Senior Living — Q1 2018 Earnings Presentation
32 slides from Brookdale Senior Living's earnings presentation, May 7, 2018
Slide 1: Supplemental Information 1st Quarter 2018
Exhibit 99.2 Supplemental Information 1st Quarter 2018
Slide 2: Table of Contents
Table of Contents 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 Statemen
Slide 3: Overview
Overview ($ in 000s, except Total RevPAR) 2017 2018 YoY Q1 Q2 Q3 Q4 Q1 Q1 Resident fee and management fee revenue $ 1,032,821 $ 956,512 $ 941,030 $ 925,622 $ 924,947 (10.4)% Net income (loss) $ (126,361) $ (46,337) $ (413,929) $ 15,021 $ (457,234) 261.8 % Net cash provided by operating activities (2
Slide 4: Consolidated Portfolio Overview and Segment Overview
Consolidated Portfolio Overview Segment Overview (1) Senior Housing Segments Brookdale CCRCs - Rental Ancillary 13% Services 12% (2) Management Assisted Living Services 2% 67% Senior Housing Revenue Revenue 86% Retirement Centers 20% Brookdale (3) Ancillary Services 3% Management Services 6% CCRCs -
Slide 5: Adjusted EBITDA and Adjusted Free Cash Flow
Adjusted EBITDA and Adjusted Free Cash Flow (All amounts in 000s) 2017 2018 YoY Q1 Q2 Q3 Q4 Q1 Q1 Resident fee and management fee revenue 1,032,821 956,512 941,030 925,622 924,947 Less: Facility operating expense (1) (674,542) (642,405) (650,654) (634,554) (632,325) Combined Segment Operating Income
Slide 6: Adjusted EBITDA and Adjusted Free Cash Flow Distribution Q1 2018
Adjusted EBITDA and Adjusted Free Cash Flow Distribution ($ in 000s) Q1 2018 Senior Senior Housing Housing Owned Leased Ancillary Management Total Portfolio Portfolio Services Services Other (1) Resident fee and management fee revenue $ 924,947 $ 383,910 $ 411,836 $ 110,520 $ 18,681 $ — Less: Facili
Slide 7: Segment Overview
Segment Overview ($ in 000s, except RevPAR and RevPOR) 2017 2018 YoY Q1 Q2 Q3 Q4 Q1 Q1 Total Senior Housing, Brookdale Ancillary and Management Services(1) Revenue $ 1,032,821 $ 956,512 $ 941,030 $ 925,622 $ 924,947 (10.4)% Combined Segment Operating Income $ 358,279 $ 314,107 $ 290,376 $ 291,068 $
Slide 8: Senior Housing Segments
Senior Housing Segments ($ in 000s, except RevPAR and RevPOR) 2017 2018 YoY Retirement Centers Q1 Q2 Q3 Q4 Q1 Q1 Revenue $ 172,620 $ 162,248 $ 161,986 $ 157,342 $ 158,397 (8.2)% Segment Operating Income $ 74,002 $ 67,297 $ 65,907 $ 64,211 $ 64,422 (12.9)% Segment Operating Margin 42.9% 41.5% 40.7% 4
Slide 9: Senior Housing: Same Community
Senior Housing: Same Community ($ in 000s, except RevPAR and RevPOR) 2017 2018 YoY Q1 Q2 Q3 Q4 Q1 Q1 Revenue $ 764,130 $ 753,468 $ 749,104 $ 748,922 $ 759,361 (0.6)% Community Labor Expense (309,028) (315,861) (320,471) (324,537) (328,044) Other facility operating expense (164,964) (170,943) (173,82
Slide 10: Senior Housing: Owned Portfolio
Senior Housing: Owned Portfolio ($ in 000s, except RevPAR and RevPOR) 2017 2018 YoY Q1 Q2 Q3 Q4 Q1 Q1 Resident fee revenue $ 388,310 $ 381,418 $ 376,896 $ 377,586 $ 383,910 Less: Facility operating expense (252,673) (257,991) (261,069) (260,799) (260,673) Owned Portfolio Operating Income 135,637 123
Slide 11: Senior Housing: Leased Portfolio
Senior Housing: Leased Portfolio ($ in 000s, except RevPAR and RevPOR) 2017 2018 YoY Q1 Q2 Q3 Q4 Q1 Q1 Resident fee revenue $ 516,645 $ 442,462 $ 435,392 $ 415,169 $ 411,836 Less: Facility operating expense (325,526) (287,327) (288,804) (273,052) (269,450) Leased Portfolio Operating Income 191,119 1
Slide 12: New Supply and Brookdale's Largest Markets - Competitive Summary
New Supply (1) Brookdale's Largest 20 Markets - Competitive Summary Brookdale in NIC Markets Competition Within 20 Minute Drive Q1 2018 Total Weighted IL/AL/MC 5 Yr 5 Yr Projected Average Average New 1 Yr Projected Projected Age 75 + Pop Community Units Unit Q1 2018 New Const. Const. Unit Opens % Cu
Slide 13: Ancillary Services
Ancillary Services ($ in 000s) 2017 2018 YoY Q1 Q2 Q3 Q4 Q1 Q1 Resident fee revenue Home Health $ 92,241 $ 88,561 $ 87,315 $ 89,272 $ 85,490 Hospice 13,346 15,441 17,328 18,248 19,327 Outpatient Therapy 6,375 6,179 5,941 5,937 5,685 Other ancillary services 10 9 20 39 18 Segment resident fee revenue
Slide 14: G&A Expense & Transaction Costs
G&A Expense & Transaction Costs ($ in 000s) 2017 2018 YoY Q1 Q2 Q3 Q4 Q1 Q1 G&A Expense Allocations(1) Senior Housing Owned Portfolio allocation $ 16,808 $ 17,580 $ 16,326 $ 15,176 $ 16,616 Senior Housing Leased Portfolio allocation 22,362 20,394 18,860 16,686 17,824 Ancillary Services allocation 7,
Slide 15: Capital Expenditures
Capital Expenditures ($ in 000s, except for Community level capital expenditures per unit) 2017 2018 YoY Q1 Q2 Q3 Q4 Q1 Q1 Community level capital expenditures, including allocations Senior Housing Owned Portfolio $ 13,909 $ 16,733 $ 17,695 $ 29,356 $ 20,884 Senior Housing Leased Portfolio 14,801 14
Slide 16: Cash Lease Payments
Cash Lease Payments ($ in 000s) 2017 2018 YoY Q1 Q2 Q3 Q4 Q1 Q1 Operating Leases Facility lease expense $ 88,807 $ 84,690 $ 84,437 $ 81,787 $ 80,400 Less: Straight-line (income) expense, net 3,007 3,119 3,078 5,109 6,165 Less: Amortization of (above) below market lease, net 1,697 1,697 1,697 1,586 1
Slide 17: Unconsolidated Ventures
Unconsolidated Ventures Twelve Months Ended March 31, ($ in 000s) Q1 2018 2018 Total CCRC Venture Other Ventures Total Resident fee revenue $ 298,062 $ 104,226 $ 193,836 $ 1,356,539 Less: Facility operating expenses (214,316) (78,415) (135,901) (961,731) Less: G&A expenses including management fees
Slide 18: Debt & Liquidity
Debt & Liquidity Debt Structure(1) As of March 31, 2018 ($ in 000s) Weighted Rate Fixed rate debt 4.87% Variable rate debt (2) 4.20% Total debt and line of credit 4.64% $796,990 Balance(1) $2,549,570 $1,328,739 Total debt $ 3,878,310 $531,749 Fixed rate debt Total variable rate debt Variable rate de
Slide 19: Debt Maturity & Leverage
Debt Maturity & Leverage Weighted Rate (1) Debt Maturity Schedule Debt(2) ($ in 000s) 2018 3.41% $1,400,000 2019 6.36% 2020 5.34% 2021 5.86% $1,929,562 2022 4.28% $700,000 Thereafter 4.32% Total 4.64% Total Balance $459,710 $485,759 $325,763 $336,054 $341,461 Debt(2) $ 3,878,310 $0 2018 (1) 2019 202
Slide 20: Net Asset Value Elements
Net Asset Value Elements ($ in 000s and are for the trailing twelve months ending March 31, 2018 unless otherwise noted) Senior Housing: Owned Portfolio(1) Owned Portfolio Operating Income $ 479,278 Less: G&A Portfolio Allocation(2) (65,698) Owned Portfolio Operating Income (Adjusted to Include G&A
Slide 21: Definitions
Definitions Adjusted EBITDA is a non-GAAP financial measure that the Company defines as net Combined Segment Operating Income is defined by the Company as resident fee income (loss) before provision (benefit) for income taxes; non-operating (income) and management fee revenue of the Company, less fa
Slide 22: Definitions
Definitions Non-Development Capital Expenditures is comprised of corporate and Segment Operating Income is defined by the Company as segment revenues less community-level capital expenditures, including those related to maintenance, segment facility operating expenses. Segment Operating Income does
Slide 23: Appendix
Appendix Consolidated Statements of Cash Flows 24 Non-GAAP Financial Measures 25 Brookdale West Hartford West Hartford, CT 23
Slide 24: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows ($ in 000s) 2017 2018 Q1 Q2 Q3 Q4 Q1 Cash Flows from Operating Activities Net income (loss) $ (126,361) $ (46,337) $ (413,929) $ 15,021 $ (457,234) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Debt modification and ext
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures 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
Slide 26: Non-GAAP Financial Measures (Continued): Adjusted EBITDA Reconciliation
Non-GAAP Financial Measures (Continued) Adjusted EBITDA Reconciliation ($ in 000s) 2017 2018 Q1 Q2 Q3 Q4 Q1 Net income (loss) $ (126,361) $ (46,337) $ (413,929) $ 15,021 $ (457,234) Provision (benefit) for income taxes 84,028 (2,735) (31,218) (66,590) 15,585 Equity in (earnings) loss of unconsolidat
Slide 27: Adjusted EBITDAR; Adjusted EBITDA; and Adjusted EBITDA after cash capital and financing lease payments
Non-GAAP Financial Measures (Continued) Adjusted EBITDAR; Adjusted EBITDA; and Adjusted EBITDA after cash capital and financing lease payments Reconciliations (excluding transaction, organizational restructuring, and strategic project costs) ($ in 000s) Twelve Months Ended March 31, 2018 Net income
Slide 28: 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, 2018 Long-term debt (including current portion) $ 3,878,310 Line of credit — Less: cash and cash equivalents (335,412) Less: marketable securities (174,649) Less: cash held as collatera
Slide 29: Adjusted Free Cash Flow Reconciliation
Non-GAAP Financial Measures (Continued) Adjusted Free Cash Flow Reconciliation ($ in 000s) 2017 2018 Q1 Q2 Q3 Q4 Q1 Net cash provided by operating activities $ 66,773 $ 133,759 $ 93,791 $ 84,036 $ 37,964 Net cash (used in) provided by investing activities (199,743) (59,751) (263,884) (78,955) 91,155
Slide 30: 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) 2017 2018
Slide 31: 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 32: 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 2018 Earnings Presentation on 6ix