Brookdale Senior Living Inc. - FORM 8-K - EX-99.2 - SUPPLEMENTAL INFORMATION

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Brookdale Senior Living Inc. Reports

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EX-99.1 - PRESS RELEASE - Brookdale Senior Living Inc.	exhibit99_1.htm
8-K - FORM 8-K - Brookdale Senior Living Inc.	form8-k.htm

Brookdale Senior Living Inc.

Corporate Overview - selected financial information

As of June 30, 2014

Corporate Overview

Brookdale Senior Living Inc. ("Brookdale") is a leading owner and operator of senior living communities throughout the United States. The Company is committed to providing an exceptional living experience through properties that are designed, purpose-built and operated to provide the highest-quality service, care and living accommodations for residents. As of June 30, 2014, the Company operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 647 communities in 36 states and the ability to serve approximately 66,000 residents. Through Brookdale Ancillary Services, the Company also offers a range of outpatient therapy, home health and hospice services, primarily to residents of its communities.

Stock Listing

Common Stock
NYSE: BKD

Community Information

Ownership Type	Number of Communities			Number of Units			Percentage of Q2 2014 Resident and Management Fees			Percentage of Q2 2014 Facility Operating Income			Percentage of YTD 2014 Resident and Management Fees			Percentage of YTD 2014 Facility Operating Income
Owned		226			23,501			42.0	%		41.2	%		42.1	%		41.4	%
Leased		329			25,842			47.0	%		49.8	%		47.0	%		49.6	%
Brookdale Ancillary Services		N/	A		N/	A		9.9	%		5.7	%		9.8	%		5.7	%
Managed		92			16,989			1.1	%		3.3	%		1.1	%		3.3	%
Total		647			66,332			100.0	%		100.0	%		100.0	%		100.0	%

Operating Type - By Segment
Retirement Centers		74			14,258			20.2	%		25.2	%		20.1	%		24.9	%
Assisted Living		440			22,501			41.9	%		46.2	%		42.1	%		46.1	%
CCRCs - Rental		26			6,526			14.9	%		11.4	%		14.9	%		11.6	%
CCRCs - Entry Fee		15			6,058			12.0	%		8.2	%		12.0	%		8.4	%
Brookdale Ancillary Services		N/	A		N/	A		9.9	%		5.7	%		9.8	%		5.7	%
Management Services		92			16,989			1.1	%		3.3	%		1.1	%		3.3	%
Total		647			66,332			100.0	%		100.0	%		100.0	%		100.0	%

CFFO Per Share

($ except where indicated)	FY 2013										FY 2014
		Q1		Q2		Q3		Q4	Full Year⁽¹⁾			Q1		Q2
Reported CFFO	$	0.55	$	0.58	$	0.57	$	0.68	$	2.38	$	0.54	$	0.61
Add: integration, transaction-related and EMR roll-out costs		0.02		0.03		0.04		0.03		0.12		0.10		0.10
Adjusted CFFO	$	0.57	$	0.61	$	0.61	$	0.71	$	2.50	$	0.64	$	0.71

Weighted average shares (000's)		122,823		123,405		124,128		124,308				124,478		125,058
Period end outstanding shares (excluding unvested restricted shares) (000's)		123,040		124,061		124,285		124,354				124,816		125,408

^{(1) Full year CFFO for all periods is calculated as the sum of the quarterly amounts for the year.}

Investor Relations

Ross Roadman
SVP, Investor Relations
Brookdale Senior Living Inc.
111 Westwood Place, Suite 400
Brentwood, TN 37027
Phone (615) 564-8104
rroadman@brookdaleliving.com

Note: See accompanying second quarter earnings release for non-GAAP financial measure definitions and reconciliations.

Brookdale Senior Living Inc.
Segment Operating Information
As of June 30, 2014

Senior Housing Operating Information

	FY 2013															FY 2014 (1)
		Q1			Q2			Q3			Q4		Full Year				Q1			Q2
Retirement Centers
Number of communities (period end)		76			76			76			76			76			74			74
Total average units(2)		14,429			14,429			14,444			14,454			14,439			14,161			14,162
Weighted average unit occupancy		89.5	%		89.4	%		90.2	%		90.1	%		89.8	%		89.3	%		88.9	%
Senior Housing average monthly revenue per unit(3)	$	3,328		$	3,362		$	3,408		$	3,426		$	3,381		$	3,490		$	3,532

Assisted Living
Number of communities (period end)		431			432			432			438			438			440			440
Total average units(2)		21,556			21,499			21,513			22,149			21,679			22,435			22,463
Weighted average unit occupancy		89.1	%		89.4	%		90.0	%		90.1	%		89.7	%		89.6	%		89.0	%
Senior Housing average monthly revenue per unit(3)	$	4,523		$	4,519		$	4,518		$	4,480		$	4,510		$	4,599		$	4,622

CCRCs - Rental
Number of communities (period end)		27			27			27			26			26			26			26
Total average units(2)		6,687			6,684			6,687			6,617			6,669			6,457			6,469
Weighted average unit occupancy		87.6	%		86.2	%		86.7	%		86.8	%		86.8	%		86.6	%		85.9	%
Senior Housing average monthly revenue per unit(3)	$	5,709		$	5,649		$	5,759		$	5,742		$	5,715		$	5,839		$	5,894

CCRCs - Entry Fee
Number of communities (period end)		14			14			14			14			14			15			15
Total average units(2)		5,281			5,295			5,308			5,329			5,303			5,527			5,534
Weighted average unit occupancy		84.6	%		83.8	%		84.1	%		84.3	%		84.2	%		84.7	%		84.7	%
Senior Housing average monthly revenue per unit(3)	$	5,011		$	5,025		$	4,994		$	5,023		$	5,013		$	5,124		$	5,091

Senior Housing Totals
Number of communities (period end)		548			549			549			554			554			555			555
Total average units(2)		47,953			47,907			47,952			48,549			48,090			48,580			48,628
Weighted average unit occupancy		88.5	%		88.3	%		89.0	%		89.0	%		88.7	%		88.6	%		88.1	%
Senior Housing average monthly revenue per unit(3)	$	4,375		$	4,373		$	4,397		$	4,387		$	4,383		$	4,491		$	4,518

Management Services
Number of communities (period end)		101			101			102			95			95			92			92
Total average units(2)		18,114			18,310			18,291			17,618			18,083			17,140			16,978
Weighted average occupancy		84.9	%		84.9	%		85.7	%		86.1	%		85.4	%		86.3	%		86.8	%
Average monthly revenue per unit(3)	$	3,460		$	3,505		$	3,499		$	3,588		$	3,512		$	3,706		$	3,701

Brookdale Ancillary Services Operating Information

	FY 2013				FY 2014
	Q1	Q2	Q3	Q4	Q1	Q2
Brookdale Ancillary Services
Brookdale units served:
Outpatient Therapy consolidated	38,017	38,075	38,253	38,308	37,974	38,328
Home Health consolidated	32,389	32,864	33,940	33,894	34,518	35,061
Outpatient Therapy non-consolidated	13,502	14,177	14,733	14,017	14,138	13,942
Home Health non-consolidated	13,326	13,232	13,601	12,884	12,819	12,336
Total Brookdale units served:
Outpatient Therapy	51,519	52,252	52,986	52,325	52,112	52,270
Home Health	45,715	46,096	47,541	46,778	47,337	47,397

Outpatient Therapy treatment codes	821,308	840,076	818,758	844,987	812,632	798,754
Home Health average census	4,289	4,366	4,574	4,762	5,084	5,257

⁽¹⁾	During the six months ended June 30, 2014, two communities moved between segments to more accurately reflect the underlying product offering of each segment. The movement did not change the Company's reportable segments, but it did impact the operating information reported within the Retirement Centers and Assisted Living segments. Prior quarters have not been recast.
⁽²⁾	Total average units operated represent the average units operated during the period, excluding equity homes.
⁽³⁾	Average monthly revenue per unit represents the average of the total monthly revenues, excluding amortization of entrance fees and Brookdale Ancillary Services segment revenue, divided by average occupied units.

Brookdale Senior Living Inc.
Senior Housing Data by Ownership Type
As of June 30, 2014

Senior Housing Operating Information


	FY 2013												FY 2014
		Q1			Q2			Q3 (1)			Q4			Q1			Q2

Owned Properties
Number of communities (period end)		219			220			220			225			226			226
Total average units(2)		22,243			22,153			22,190			22,754			22,775			22,799
Weighted average unit occupancy		88.8	%		88.7	%		89.1	%		89.2	%		88.5	%		88.0	%
Senior Housing average monthly revenue per unit(3)	$	4,416		$	4,416		$	4,438		$	4,402		$	4,516		$	4,532

Leased Properties with Bargain Purchase Options
Number of communities (period end)		9			9			9			9			9			9
Total average units(2)		2,949			2,945			2,944			2,943			2,929			2,929
Weighted average unit occupancy		88.2	%		88.0	%		88.6	%		88.5	%		89.0	%		88.3	%
Senior Housing average monthly revenue per unit(3)	$	3,891		$	3,896		$	3,929		$	4,001		$	4,072		$	4,051

Leased Properties with Fair Market Value Purchase Options
Number of communities (period end)		74			74			75			75			75			75
Total average units(2)		3,364			3,364			3,413			3,438			3,462			3,462
Weighted average unit occupancy		90.8	%		90.6	%		90.9	%		90.9	%		90.7	%		89.8	%
Senior Housing average monthly revenue per unit(3)	$	4,675		$	4,638		$	4,645		$	4,637		$	4,677		$	4,703

Leased Properties without Purchase Options
Number of communities (period end)		246			246			245			245			245			245
Total average units(2)		19,397			19,445			19,405			19,414			19,414			19,438
Weighted average unit occupancy		87.9	%		87.6	%		88.5	%		88.6	%		88.2	%		87.9	%
Senior Housing average monthly revenue per unit(3)	$	4,344		$	4,348		$	4,381		$	4,377		$	4,491		$	4,533

Senior Housing Totals
Number of communities (period end)		548			549			549			554			555			555
Total average units(2)		47,953			47,907			47,952			48,549			48,580			48,628
Weighted average unit occupancy		88.5	%		88.3	%		89.0	%		89.0	%		88.6	%		88.1	%
Senior Housing average monthly revenue per unit(3)	$	4,375		$	4,373		$	4,397		$	4,387		$	4,491		$	4,518

⁽¹⁾	During the three months ended September 30, 2013, the Company amended a lease agreement for one community and, in connection therewith, obtained a fair market value purchase option. The results of operations of the community are included within Leased Properties with Fair Market Value Purchase Options beginning in the third quarter of FY 2013. Prior quarters have not been recast.
⁽²⁾	Total average units operated represent the average units operated during the period, excluding equity homes.
⁽³⁾	Average monthly revenue per unit represents the average of the total monthly revenues, excluding amortization of entrance fees and Brookdale Ancillary Services segment revenue, divided by average occupied units.

Brookdale Senior Living Inc.

Segment Financial Data

As of June 30, 2014

Financial Data
($ in 000s)

Retirement Centers	FY 2013												FY 2014 (1)
		Q1		Q2		Q3		Q4		Full Year				Q1		Q2		YTD
Revenue		128,922		130,170		133,272		133,920			526,284			132,349		133,441			265,790
Expenses		75,588		75,993		76,452		75,969			304,002			76,119		76,550			152,669
Segment Operating Income		53,334		54,177		56,820		57,951			222,282			56,230		56,891			113,121
Segment Operating Margin		41.4	%	41.6	%	42.6	%	43.3	%		42.2	%		42.5	%	42.6	%		42.6	%

Assisted Living	FY 2013												FY 2014 (1)
		Q1		Q2		Q3		Q4		Full Year				Q1		Q2		YTD
Revenue		260,615		260,497		262,524		268,232			1,051,868			277,431		277,230			554,661
Expenses		164,330		164,316		165,774		167,770			662,190			172,439		172,984			345,423
Segment Operating Income		96,285		96,181		96,750		100,462			389,678			104,992		104,246			209,238
Segment Operating Margin		36.9	%	36.9	%	36.9	%	37.5	%		37.0	%		37.8	%	37.6	%		37.7	%

CCRCs - Rental	FY 2013												FY 2014
		Q1		Q2		Q3		Q4		Full Year				Q1		Q2		YTD
Revenue		100,327		97,562		100,076		99,010			396,975			97,944		98,212			196,156
Expenses		71,250		71,995		73,063		71,641			287,949			71,114		72,519			143,633
Segment Operating Income		29,077		25,567		27,013		27,369			109,026			26,830		25,693			52,523
Segment Operating Margin		29.0	%	26.2	%	27.0	%	27.6	%		27.5	%		27.4	%	26.2	%		26.8	%

CCRCs - Entry Fee	FY 2013												FY 2014
		Q1		Q2		Q3		Q4		Full Year				Q1		Q2		YTD
Revenue		74,308		74,016		74,110		75,322			297,756			79,169		79,100			158,269
Expenses		54,737		56,244		55,892		54,490			221,363			59,534		60,733			120,267
Segment Operating Income		19,571		17,772		18,218		20,832			76,393			19,635		18,367			38,002
Segment Operating Margin		26.3	%	24.0	%	24.6	%	27.7	%		25.7	%		24.8	%	23.2	%		24.0	%

Bridge to Cash Basis for CCRCs - Entry Fee segment
Revenue		74,308		74,016		74,110		75,322			297,756			79,169		79,100			158,269
Less: revenue amortization (non-cash)		(7,133	)	(7,032	)	(7,013	)	(7,831	)		(29,009	)		(7,202	)	(7,547	)		(14,749	)
Add: net entrance fees (cash)		7,553		16,422		11,370		21,661			57,006			6,513		16,711			23,224
Adjusted revenue		74,728		83,406		78,467		89,152			325,753			78,480		88,264			166,744
Expenses		54,737		56,244		55,892		54,490			221,363			59,534		60,733			120,267
Adjusted Segment Operating Income		19,991		27,162		22,575		34,662			104,390			18,946		27,531			46,477
Adjusted Segment Operating Margin		26.8	%	32.6	%	28.8	%	38.9	%		32.0	%		24.1	%	31.2	%		27.9	%

Total Senior Housing	FY 2013												FY 2014
(GAAP Basis)		Q1		Q2		Q3		Q4		Full Year				Q1		Q2		YTD
Revenue		564,172		562,245		569,982		576,484			2,272,883			586,893		587,983			1,174,876
Expenses		365,905		368,548		371,181		369,870			1,475,504			379,206		382,786			761,992
Operating Income		198,267		193,697		198,801		206,614			797,379			207,687		205,197			412,884
Operating Margin		35.1	%	34.5	%	34.9	%	35.8	%		35.1	%		35.4	%	34.9	%		35.1	%
G&A Allocation (2)		25,526		23,224		22,647		24,658			96,055			24,396		22,589			46,985
G&A Allocation as a % of revenue		4.5	%	4.1	%	4.0	%	4.3	%		4.2	%		4.2	%	3.8	%		4.0	%
Adjusted Operating Income		172,741		170,473		176,154		181,956			701,324			183,291		182,608			365,899
Adjusted Operating Margin		30.6	%	30.3	%	30.9	%	31.6	%		30.9	%		31.2	%	31.1	%		31.1	%

Brookdale Senior Living Inc.

Segment Financial Data

As of June 30, 2014

Financial Data (continued)

($ in 000s)

Brookdale Ancillary Services	FY 2013					FY 2014
	Q1	Q2	Q3	Q4	Full Year	Q1	Q2	YTD
Revenue	60,198	58,693	61,162	62,097	242,150	63,417	65,534	128,951
Expenses	47,098	47,479	49,398	52,466	196,441	50,664	52,629	103,293
Segment Operating Income	13,100	11,214	11,764	9,631	45,709	12,753	12,905	25,658
Segment Operating Margin	21.8%	19.1%	19.2%	15.5%	18.9%	20.1%	19.7%	19.9%
G&A Allocation (2)	6,055	6,005	5,516	5,806	23,382	5,642	5,908	11,550
G&A Allocation as a % of revenue	10.1%	10.2%	9.0%	9.3%	9.7%	8.9%	9.0%	9.0%
Adjusted Segment Operating Income	7,045	5,209	6,248	3,825	22,327	7,111	6,997	14,108
Adjusted Segment Operating Margin	11.7%	8.9%	10.2%	6.2%	9.2%	11.2%	10.7%	10.9%

Total Senior Housing and Brookdale Ancillary Services	FY 2013					FY 2014
(GAAP Basis)	Q1	Q2	Q3	Q4	Full Year	Q1	Q2	YTD
Revenue	624,370	620,938	631,144	638,581	2,515,033	650,310	653,517	1,303,827
Expenses	413,003	416,027	420,579	422,336	1,671,945	429,870	435,415	865,285
Operating Income	211,367	204,911	210,565	216,245	843,088	220,440	218,102	438,542
Operating Margin	33.9%	33.0%	33.4%	33.9%	33.5%	33.9%	33.4%	33.6%
G&A Allocation (2)	31,581	29,229	28,163	30,464	119,437	30,038	28,497	58,535
G&A Allocation as a % of revenue	5.1%	4.7%	4.5%	4.8%	4.7%	4.6%	4.4%	4.5%
Adjusted Operating Income	179,786	175,682	182,402	185,781	723,651	190,402	189,605	380,007
Adjusted Operating Margin	28.8%	28.3%	28.9%	29.1%	28.8%	29.3%	29.0%	29.1%

Management Services	FY 2013					FY 2014
	Q1	Q2	Q3	Q4	Full Year	Q1	Q2	YTD
Revenue (Management Fees)	7,609	7,744	7,622	8,150	31,125	7,402	7,489	14,891
Expenses (G&A Allocation) (2)	6,031	6,192	6,106	6,334	24,663	6,116	5,649	11,765
Segment Operating Income	1,578	1,552	1,516	1,816	6,462	1,286	1,840	3,126
Segment Operating Margin	20.7%	20.0%	19.9%	22.3%	20.8%	17.4%	24.6%	21.0%

Total Senior Housing, Brookdale Ancillary and Management Services	FY 2013					FY 2014
(GAAP Basis)	Q1	Q2	Q3	Q4	Full Year	Q1	Q2	YTD
Revenue	631,979	628,682	638,766	646,731	2,546,158	657,712	661,006	1,318,718
Expenses	413,003	416,027	420,579	422,336	1,671,945	429,870	435,415	865,285
Operating Income	218,976	212,655	218,187	224,395	874,213	227,842	225,591	453,433
Operating Margin	34.6%	33.8%	34.2%	34.7%	34.3%	34.6%	34.1%	34.4%
G&A Allocation (2)	37,612	35,421	34,269	36,798	144,100	36,154	34,146	70,300
G&A Allocation as a % of revenue	6.0%	5.6%	5.4%	5.7%	5.7%	5.5%	5.2%	5.3%
Adjusted Operating Income	181,364	177,234	183,918	187,597	730,113	191,688	191,445	383,133
Adjusted Operating Margin	28.7%	28.2%	28.8%	29.0%	28.7%	29.1%	29.0%	29.1%

(1) During the six months ended June 30, 2014, two communities moved between segments to more accurately reflect the underlying product offering of each segment. The movement did not change the Company's reportable segments, but it did impact the revenue and expenses reported within the Retirement Centers and Assisted Living segments. Prior quarters have not been recast.

(2) Excludes non-cash stock-based compensation expense and integration, transaction-related and EMR roll-out costs.

Brookdale Senior Living Inc.

Senior Housing Data by Ownership Type

As of June 30, 2014

Financial Data
($ in 000s)

Owned Properties	FY 2013					FY 2014
	Q1	Q2	Q3	Q4	Full Year	Q1	Q2	YTD
Revenue	266,322	265,139	267,922	273,439	1,072,822	277,700	277,748	555,448
Expenses	175,672	176,623	178,382	178,941	709,618	182,706	184,773	367,479
Segment Operating Income	90,650	88,516	89,540	94,498	363,204	94,994	92,975	187,969
Segment Operating Margin	34.0%	33.4%	33.4%	34.6%	33.9%	34.2%	33.5%	33.8%

Bridge to Cash Basis for CCRCs - Entry Fee
Revenue	266,322	265,139	267,922	273,439	1,072,822	277,700	277,748	555,448
Less: revenue amortization (non-cash)	(4,664)	(4,821)	(4,660)	(5,404)	(19,549)	(4,635)	(4,933)	(9,568)
Add: net entrance fees (cash)	5,449	10,936	8,014	13,694	38,093	4,079	11,710	15,789
Adjusted revenue	267,107	271,254	271,276	281,729	1,091,366	277,144	284,525	561,669
Expenses	175,672	176,623	178,382	178,941	709,618	182,706	184,773	367,479
Adjusted Segment Operating Income	91,435	94,631	92,894	102,788	381,748	94,438	99,752	194,190
Adjusted Segment Operating Margin	34.2%	34.9%	34.2%	36.5%	35.0%	34.1%	35.1%	34.6%

Leased Properties with Bargain Purchase Options	FY 2013					FY 2014
	Q1	Q2	Q3	Q4	Full Year	Q1	Q2	YTD
Revenue	32,254	32,096	32,667	33,177	130,194	33,805	33,554	67,359
Expenses	20,766	21,308	21,230	21,518	84,822	21,806	22,115	43,921
Segment Operating Income	11,488	10,788	11,437	11,659	45,372	11,999	11,439	23,438
Segment Operating Margin	35.6%	33.6%	35.0%	35.1%	34.8%	35.5%	34.1%	34.8%

Leased Properties with Fair Market Value Purchase Options	FY 2013					FY 2014
	Q1	Q2	Q3 (1)	Q4	Full Year	Q1	Q2	YTD
Revenue	42,842	42,408	43,235	43,474	171,959	44,058	43,864	87,922
Expenses	26,940	27,011	27,228	27,293	108,472	27,691	27,604	55,295
Segment Operating Income	15,902	15,397	16,007	16,181	63,487	16,367	16,260	32,627
Segment Operating Margin	37.1%	36.3%	37.0%	37.2%	36.9%	37.1%	37.1%	37.1%

Leased Properties without Purchase Options	FY 2013					FY 2014
	Q1	Q2	Q3 (1)	Q4	Full Year	Q1	Q2	YTD
Revenue	222,754	222,602	226,158	226,394	897,908	231,330	232,817	464,147
Expenses	142,527	143,606	144,341	142,118	572,592	147,003	148,294	295,297
Segment Operating Income	80,227	78,996	81,817	84,276	325,316	84,327	84,523	168,850
Segment Operating Margin	36.0%	35.5%	36.2%	37.2%	36.2%	36.5%	36.3%	36.4%

Total Senior Housing	FY 2013					FY 2014
(GAAP Basis)	Q1	Q2	Q3	Q4	Full Year	Q1	Q2	YTD
Revenue	564,172	562,245	569,982	576,484	2,272,883	586,893	587,983	1,174,876
Expenses	365,905	368,548	371,181	369,870	1,475,504	379,206	382,786	761,992
Operating Income	198,267	193,697	198,801	206,614	797,379	207,687	205,197	412,884
Operating Margin	35.1%	34.5%	34.9%	35.8%	35.1%	35.4%	34.9%	35.1%

(1) During the three months ended September 30, 2013, the Company amended a lease agreement for one community and, in connection therewith, obtained a fair market value purchase option. The results of operations of the community are included within Leased Properties with Fair Market Value Purchase Options beginning in the third quarter of FY 2013. Prior quarters have not been recast.

Brookdale Senior Living Inc.
Same Community and Capital Expenditure Information
As of June 30, 2014

Same Community Information

($ in 000s, except Avg. Mo. Revenue/Unit)	Senior Housing									Senior Housing
	Three Months Ended June 30,									Twelve Months Ended June 30,
	2014			2013			% Change			2014			2013			% Change
Revenue	$	535,361		$	518,513			3.2	%	$	2,120,501		$	2,055,514			3.2	%
Operating Expense		351,972			346,127			1.7	%		1,396,904			1,381,730			1.1	%
Facility Operating Income	$	183,389		$	172,386			6.4	%	$	723,597		$	673,784			7.4	%
Facility Operating Margin		34.3	%		33.2	%		1.1	%		34.1	%		32.8	%		1.3	%

# Communities		522			522						522			522
Avg. Period Occupancy		88.2	%		88.3	%		-0.1	%		88.7	%		88.3	%		0.4	%
Avg. Mo. Revenue/Unit	$	4,560		$	4,409			3.4	%	$	4,489		$	4,369			2.7	%


	Brookdale Ancillary Services									Brookdale Ancillary Services
	Three Months Ended June 30,									Twelve Months Ended June 30,
		2014			2013		% Change				2014			2013		% Change
Revenue	$	43,730		$	40,898			6.9	%	$	168,961		$	168,208			0.4	%
Operating Expense		34,564			32,396			6.7	%		134,188			131,154			2.3	%
Facility Operating Income	$	9,166		$	8,502			7.8	%	$	34,773		$	37,054			-6.2	%
Facility Operating Margin		21.0	%		20.8	%		0.2	%		20.6	%		22.0	%		-1.4	%

# Units served (1)		32,112			32,112						32,112			32,112

(1) Units are included in same store calculation where either the therapy or home health, whichever came later, has stabilized or produced revenue for twenty-four months.

Schedule of Capital Expenditures

($ in 000s)

	Three Months Ended June 30,
Type	2014		2013
Recurring	$	11,841	$	10,664
Corporate (2)		4,444		5,523
EBITDA-enhancing / Major Projects (3)		25,139		25,961
Program Max / Development, net (4)		24,254		8,839
Net Total Capital Expenditures (5)	$	65,678	$	50,987

Brookdale Senior Living Inc.

Capital Structure - selected financial information

As of June 30, 2014

($ in 000s)

Debt Maturities and Scheduled Principal Repayments

	Maturities
	Mortgage		weighted			Line of		weighted			Capital		weighted			Total
	Debt (1)		rate (2)			Credit		rate (2)			Leases		rate (2)			Debt

2014	$	16,584		3.83	%	$	-		-		$	16,317		7.96	%	$	32,901
2015		28,183		4.03	%		-		-			34,732		8.06	%		62,915
2016		60,136		4.56	%		-		-			30,109		8.30	%		90,245
2017		359,732		5.29	%		-		-			61,320		8.14	%		421,052
2018		794,571		3.38	%		12,000		3.75	%		24,233		8.49	%		830,804
Thereafter		1,064,107		3.82	%		-		-			145,467		7.89	%		1,209,574
Total	$	2,323,313		3.92	%	$	12,000		3.75	%	$	312,178		8.05	%	$	2,647,491

Coverage Ratios

	Six months ended June 30, 2014
							Interest/Cash Lease
	Units		FOI		Adj. FOI **		Payments		Coverage
Owned communities		23,501	$	197,693	$	163,351	$	47,446		3.4	x
Leased communities *		25,842	$	236,463	$	198,132	$	162,614		1.2	x

* The leased communities include the capital leases.
** Adjusted for 5% management fee and capital expenditures @ $350/unit.

Debt Amortization

	Six months ended June 30,
	2014		2013
Scheduled debt amortization	$	24,497	$	23,736
Lease financing debt amortization - FMV or no purchase option (3)		7,880		6,815
Lease financing debt amortization - bargain purchase option		9,435		8,133
Total debt amortization	$	41,812	$	38,684

Line Availability

($000s)	06/30/13		09/30/13		12/31/13		03/31/14		06/30/14

Total line commitment	$	250,000	$	250,000	$	250,000	$	250,000	$	250,000

Line availability (6)	$	225,331	$	238,565	$	250,000	$	250,000	$	250,000
Ending line balance		70,000		45,000		30,000		25,000		12,000
Available to draw	$	155,331	$	193,565	$	220,000	$	225,000	$	238,000
Cash and cash equivalents		30,946		42,690		58,511		45,701		50,934
Total liquidity (available to draw + cash)	$	186,277	$	236,255	$	278,511	$	270,701	$	288,934

Total letters of credit outstanding	$	75,031	$	71,762	$	72,464	$	71,675	$	71,650

Leverage Ratios

				Annualized
	Balance			Leverage
Debt (1)	$	2,323,313
Capital leases		312,178
Total Debt	$	2,635,491			5.8	x

Plus: Line of credit (cash borrowings)		12,000
Less: Unrestricted cash		(50,934	)
Subtotal	$	2,596,557			5.8	x

2014 YTD annualized Adjusted EBITDA	$	450,718

Annual cash lease expense multiplied by 8		2,280,400
Total adjusted debt	$	4,876,957			6.6	x

2014 YTD annualized Adjusted EBITDAR	$	735,768

Debt Structure

			Weighted
	Balance		rate (2)
Fixed rate debt (1)	$	1,366,841		4.72	%
Variable rate debt (1)		956,472		2.71	%
Capital leases		312,178		8.05	%
Line of credit (cash borrowings)		12,000		3.75	%
Total debt	$	2,647,491

	Balance		% of total
Variable rate debt with interest rate swaps (1) (4)	$	26,757		2.8	%
Variable rate debt with interest rate caps (1) (5)		689,277		72.1	%
Variable rate debt - unhedged (1)		240,438		25.1	%
Total variable rate debt (1)	$	956,472		100.0	%

(1) Includes mortgage debt and convertible notes, but excludes capital leases and line of credit.

(2) Pertaining to variable rate debt, reflects a) market rates for stated reporting period and b) applicable swap rates / cap rates for hedged debt.

(3) Payments are included in CFFO.

(4) Weighted swap rate for stated reporting period is 5.49%.

(5) Weighted cap rate for stated reporting period of 4.69% is materially above current market rates, therefore caps have no impact on consolidated interest expense for given period.

(6) The actual amount available to borrow under the line may vary from time to time as it is based on borrowing base calculations related to the value and performance of the communities securing the facility.

Brookdale Senior Living Inc.
CFFO Reconciliation
As of June 30, 2014

CFFO Calculation

($ in 000s)

	Three Months Ended June 30,
	2014			2013

Net cash provided by operating activities (includes non-refundable entrance fees)	$	91,518		$	80,343
Changes in operating assets and liabilities (eliminates cash flow effect)		(2,469	)		(707	)
Add: Refundable entrance fees received		11,018			11,754
Less: Entrance fee refunds disbursed		(9,213	)		(7,456	)
Less: Recurring capital expenditures, net		(11,841	)		(10,664	)
Less: Lease financing debt amortization with fair market value or no purchase options		(3,983	)		(3,444	)
Less: Distributions from unconsolidated ventures from cumulative share of net earnings		(370	)		(773	)
Add: CFFO from unconsolidated ventures		1,996			2,099
Cash From Facility Operations	$	76,656		$	71,152

Add: Integration, transaction-related and EMR roll-out costs		11,941			3,626
Adjusted Cash From Facility Operations	$	88,597		$	74,778

Revenue Reconciliation (1)
($ in 000s except average monthly revenue per quarter)
	FY 2013															FY 2014
		Q1			Q2			Q3			Q4		Full Year				Q1			Q2
Revenue reconciliation excl. entrance fee amortization
Average monthly revenue per quarter		4,375			4,373			4,397			4,387			4,383			4,491			4,518
Average monthly units (excluding equity homes) available		47,956			47,929			47,953			48,548			48,097			48,562			48,608
Average occupancy for the quarter		88.5	%		88.3	%		89.0	%		89.0	%		88.7	%		88.6	%		88.1	%
Senior Housing resident fee revenue	$	557,039		$	555,213		$	562,969		$	568,653		$	2,243,874		$	579,691		$	580,436

Add: Brookdale Ancillary Services segment revenue		60,198			58,693			61,162			62,097			242,150			63,417			65,534
Add: management fee revenue		7,609			7,744			7,622			8,150			31,125			7,402			7,489
Total revenues excluding entrance fee amortization	$	624,846		$	621,650		$	631,753		$	638,900		$	2,517,149		$	650,510		$	653,459

CFFO Reconciliation to the Income Statement

Resident and management fee revenue	$	631,979		$	628,682		$	638,766		$	646,731		$	2,546,158		$	657,712		$	661,006
Less: Entrance fee amortization		(7,133	)		(7,032	)		(7,013	)		(7,831	)		(29,009	)		(7,202	)		(7,547	)
Adjusted revenues		624,846			621,650			631,753			638,900			2,517,149			650,510			653,459

Less: Facility operating expenses		(413,003	)		(416,027	)		(420,579	)		(422,336	)		(1,671,945	)		(429,870	)		(435,415	)
Add: Change in future service obligation		-			-			-			(1,917	)		(1,917	)		-			-
Adjusted facility operating expenses		(413,003	)		(416,027	)		(420,579	)		(424,253	)		(1,673,862	)		(429,870	)		(435,415	)

Less: G&A including non-cash stock-based compensation expense		(46,611	)		(46,035	)		(45,824	)		(46,078	)		(184,548	)		(55,509	)		(53,816	)
Add: G&A non-cash stock-based compensation expense		6,894			6,988			6,894			5,202			25,978			7,572			7,729
Net G&A		(39,717	)		(39,047	)		(38,930	)		(40,876	)		(158,570	)		(47,937	)		(46,087	)

Less: Facility lease expense		(69,019	)		(68,777	)		(69,232	)		(69,701	)		(276,729	)		(69,869	)		(70,030	)
Add: Straight-line lease expense		748			684			818			347			2,597			(223	)		(217	)
Less: Amortization of deferred gain		(1,093	)		(1,093	)		(1,093	)		(1,093	)		(4,372	)		(1,093	)		(1,093	)
Net lease expense		(69,364	)		(69,186	)		(69,507	)		(70,447	)		(278,504	)		(71,185	)		(71,340	)

Add: Entrance fee receipts		16,873			23,878			19,098			32,482			92,331			14,959			25,924
Less: Entrance fee disbursements		(9,320	)		(7,456	)		(7,728	)		(10,821	)		(35,325	)		(8,446	)		(9,213	)
Net entrance fees		7,553			16,422			11,370			21,661			57,006			6,513			16,711

Adjusted EBITDA		110,315			113,812			114,107			124,985			463,219			108,031			117,328

Less: Recurring capital expenditures, net		(9,324	)		(10,664	)		(12,127	)		(10,786	)		(42,901	)		(9,369	)		(11,841	)
Less: Interest expense, net		(30,668	)		(29,591	)		(29,170	)		(30,557	)		(119,986	)		(29,677	)		(29,372	)
Less: Lease financing debt amortization with fair market value or no purchase options		(3,371	)		(3,444	)		(3,518	)		(3,594	)		(13,927	)		(3,897	)		(3,983	)
Add: CFFO from unconsolidated ventures		1,958			2,099			1,922			1,825			7,804			2,241			1,996
Less: Other		(1,068	)		(1,060	)		(655	)		2,597			(186	)		133			2,528

Reported CFFO	$	67,842		$	71,152		$	70,559		$	84,470		$	294,023		$	67,462		$	76,656

Add: integration, transaction-related and EMR roll-out costs		2,105			3,626			4,661			4,078			14,470			11,783			11,941
Adjusted CFFO	$	69,947		$	74,778		$	75,220		$	88,548		$	308,493		$	79,245		$	88,597

CFFO Per Share

($ except where indicated)	FY 2013															FY 2014
		Q1			Q2			Q3			Q4		Full Year(2)				Q1			Q2
Reported CFFO	$	0.55		$	0.58		$	0.57		$	0.68		$	2.38		$	0.54		$	0.61
Add: integration, transaction-related and EMR roll-out costs		0.02			0.03			0.04			0.03			0.12			0.10			0.10
Adjusted CFFO	$	0.57		$	0.61		$	0.61		$	0.71		$	2.50		$	0.64		$	0.71

Shares used in calculation of CFFO (000's)		122,823			123,405			124,128			124,308						124,478			125,058

(1) Revenue excludes reimbursed costs incurred on behalf of managed communities.

(2) Full year CFFO for all periods is calculated as the sum of the quarterly amounts for the year.

Note: CFFO is a measurement of liquidity that is not calculated in accordance with GAAP and should not be considered in isolation as a substitute for any GAAP financial measure. CFFO is not a measure of financial performance under GAAP. We strongly urge you to review the reconciliation of CFFO to GAAP net cash provided by operating activities, along with our consolidated financial statements, included in the accompanying earnings release.

Brookdale Senior Living Inc.

Quarterly Entry Fee Information

As of June 30, 2014

Cash Basis ($ in 000's except average resale and refund)
	FY 2013									FY 2014
		Q1		Q2		Q3		Q4			Q1		Q2
# Closings		91		128		100		130			95		146
# of Refunds		87		88		86		103			76		103

Resale Receipts:
Proceeds from non-refundable entrance fees (1)		9,237		12,124		9,223		13,607			9,035		14,906
Proceeds from refundable entrance fees (2)		7,636		11,754		9,875		18,875			5,924		11,018
Total Cash Proceeds		16,873		23,878		19,098		32,482			14,959		25,924
Refunds of entrance fees (3)		(9,320	)	(7,456	)	(7,728	)	(10,821	)		(8,446	)	(9,213	)
Net Resale Cash Flow		7,553		16,422		11,370		21,661			6,513		16,711

MyChoice proceeds included in refundable resale receipts above		1,768		4,041		3,205		10,008			282		1,711

Average Resale $ (excluding MyChoice proceeds)		165,989		154,977		158,930		172,877			154,495		165,842
Average Refund $ (excluding MyChoice refunds)		(98,540	)	(80,773	)	(86,372	)	(94,621	)		(99,816	)	(79,165	)

Value of Unsold Inventory ($ in 000's except average resale price)
Gross Value @ Average Resale Price of $155,000													85,715
Refund Attachments													(17,016	)
Net Cash Value													68,699

Income Statement Impact ($ in 000's)
On Brookdale's income statement, non-refundable entrance fees are amortized into revenue based on the unamortized balance per contract divided by the actuarial life of the resident. The following are the non-cash amortized non-refundable entrance fees for each quarter:
	FY 2013				FY 2014
	Q1	Q2	Q3	Q4	Q1	Q2
Amortization of entrance fees (incl. gains on terminations)	(7,133)	(7,032)	(7,013)	(7,831)	(7,202)	(7,547)

Principles of Entry Fee Accounting
Certain of Brookdale's communities have residency agreements which require the resident to pay an upfront fee prior to occupying the community and in return for a reduced monthly service fee and certain healthcare benefits. Brookdale has a number of options for residents that give a choice of the amount of refundability of the upfront fee, the amount of entry fee for the unit and the amount of health care benefit in the community's various levels of care. The non-refundable portion of the entrance fee is recorded as deferred revenue and amortized over the estimated stay of the resident based on an actuarial valuation. The refundable portion of a resident's entrance fee is not amortized and is generally refundable within a certain number of months or days following contract termination or upon the sale of the unit.

Notes:

(1) From Statement of Cash Flows (Operating Activities section) with line description: Proceeds from deferred entrance fee revenue.

(2) From Statement of Cash Flows (Financing Activities section) with line description: Proceeds from refundable entrance fees (which includes MyChoice proceeds).

(3) From Statement of Cash Flows (Financing Activities section) with line description: Refunds of entrance fees.

Brookdale Senior Living Inc.

Quarterly Cash Flow Statements

As of June 30, 2014

($ in 000s)

Cash Flow Statements

		Q1 2013			Q2 2013			Q3 2013			Q4 2013		FY 2013				Q1 2014			Q2 2014
Cash Flows from Operating Activities
Net income (loss)	$	3,558		$	(5,200	)	$	(967	)	$	(975	)	$	(3,584	)	$	(2,299	)	$	(3,295	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss on extinguishment of debt		-			893			53			319			1,265			-			3,197
Depreciation and amortization		69,228			71,602			72,744			72,237			285,811			74,334			75,166
Asset impairment		-			2,154			504			10,233			12,891			-			-
Equity in earnings of unconsolidated ventures		(115	)		(445	)		(431	)		(493	)		(1,484	)		(636	)		(1,523	)
Distributions from unconsolidated ventures from cumulative share of net earnings		668			773			648			602			2,691			245			370
Amortization of deferred gain		(1,093	)		(1,093	)		(1,093	)		(1,093	)		(4,372	)		(1,093	)		(1,093	)
Amortization of entrance fees		(7,133	)		(7,032	)		(7,013	)		(7,831	)		(29,009	)		(7,202	)		(7,547	)
Proceeds from deferred entrance fee revenue		9,237			12,124			9,223			13,607			44,191			9,035			14,906
Deferred income tax (benefit) provision		-			-			-			(183	)		(183	)		598			(5	)
Change in deferred lease liability		748			684			818			347			2,597			(223	)		(217	)
Change in fair value of derivatives		(135	)		(1,836	)		1,377			(386	)		(980	)		847			1,322
(Gain) loss on sale of assets		(926	)		24			26			(96	)		(972	)		76			39
Change in future service obligation		-			-			-			(1,917	)		(1,917	)		-			-
Non-cash stock-based compensation		6,894			6,988			6,894			5,202			25,978			7,572			7,729
Changes in operating assets and liabilities:
Accounts receivable, net		(9,064	)		1,736			(2,154	)		4,033			(5,449	)		(2,499	)		3,914
Prepaid expenses and other assets, net		9,140			(12,679	)		734			10,288			7,483			(5,816	)		(8,369	)
Accounts payable and accrued expenses		(10,871	)		12,926			18,540			13,242			33,837			(27,561	)		14,245
Tenant refundable fees and security deposits		(335	)		(258	)		(235	)		36			(792	)		(615	)		138
Deferred revenue		(5,316	)		(1,018	)		4,579			(126	)		(1,881	)		7,933			(7,459	)
Net cash provided by operating activities		64,485			80,343			104,247			117,046			366,121			52,696			91,518
Cash Flows from Investing Activities
(Increase) decrease in lease security deposits and lease acquisition deposits, net		(1,952	)		(1,066	)		972			(5	)		(2,051	)		7			(73	)
Decrease (increase) in cash and escrow deposits — restricted		826			2,195			(537	)		8,242			10,726			6,627			(6,039	)
Additions to property, plant and equipment and leasehold intangibles, net		(51,614	)		(48,677	)		(61,231	)		(96,005	)		(257,527	)		(59,717	)		(73,712	)
Acquisition of assets, net of related payables and cash received		(2	)		(4,833	)		(2,559	)		(27,292	)		(34,686	)		(515	)		-
(Issuance of) payment on notes receivable, net		(17	)		(47	)		159			73			168			76			2,564
Investment in unconsolidated ventures		(5,843	)		(2,149	)		(9,180	)		-			(17,172	)		-			-
Distributions received from unconsolidated ventures		-			-			100			1,500			1,600			-			2,643
Proceeds from sale of assets, net		440			7,114			-			26,582			34,136			-			-
Net cash used in investing activities		(58,162	)		(47,463	)		(72,276	)		(86,905	)		(264,806	)		(53,522	)		(74,617	)
Cash Flows from Financing Activities
Proceeds from debt		8,955			418,667			170,230			65,082			662,934			20,516			159,638
Repayment of debt and capital lease obligations		(17,707	)		(470,825	)		(163,209	)		(72,392	)		(724,133	)		(22,401	)		(159,412	)
Proceeds from line of credit		105,000			85,000			130,000			105,000			425,000			70,000			12,000
Repayment of line of credit		(140,000	)		(60,000	)		(155,000	)		(120,000	)		(475,000	)		(75,000	)		(25,000	)
Payment of financing costs, net of related payables		(2,200	)		(5,695	)		(3,299	)		(382	)		(11,576	)		(2,905	)		2,087
Refundable entrance fees:
Proceeds from refundable entrance fees		7,636			11,754			9,875			18,875			48,140			5,924			11,018
Refunds of entrance fees		(9,320	)		(7,456	)		(7,728	)		(10,821	)		(35,325	)		(8,446	)		(9,213	)
Cash portion of loss on extinguishment of debt		-			(453	)		(49	)		-			(502	)		-			(3,180	)
Purchase of derivatives		-			(1,489	)		(1,374	)		-			(2,863	)		-			-
Other		315			321			327			318			1,281			328			394
Net cash used in financing activities		(47,321	)		(30,176	)		(20,227	)		(14,320	)		(112,044	)		(11,984	)		(11,668	)
Net (decrease) increase in cash and cash equivalents		(40,998	)		2,704			11,744			15,821			(10,729	)		(12,810	)		5,233
Cash and cash equivalents at beginning of period		69,240			28,242			30,946			42,690			69,240			58,511			45,701
Cash and cash equivalents at end of period	$	28,242		$	30,946		$	42,690		$	58,511		$	58,511		$	45,701		$	50,934

(2) Corporate includes capital expenditures for information technology systems and equipment and expenditures supporting the expansion of our support platform and ancillary services programs.

(3) Includes EBITDA-enhancing projects (primarily community renovations and apartment upgrades) and other major building infrastructure projects.

(4) Includes community expansions and major repositioning or upgrade projects. Also includes de novo community developments. Amounts shown are amounts invested, net of third party lessor funding received of $8.0 million and $8.2 million for the three months ended June 30, 2014 and 2013, respectively.

(5) Approximately $10.0 million and $10.8 million of expense was recognized during the three months ended June 30, 2014 and 2013, respectively, for normal repairs and maintenance and capital spend under $1,500 per invoice, except for unit turnovers.