Brookdale Senior Living 8K Brookdale Announces Record Second Quarter 2009 Results; CFFO of $0.50 per Share | BKD 3 Aug 09

Brookdale Senior Living (BKD) 8-KBrookdale Announces Record Second Quarter 2009 Results; CFFO of $0.50 per Share

Brookdale Senior Living Inc.
Corporate Overview - selected financial information
As of June 30, 2009

Corporate Overview
Brookdale Senior Living Inc. ("BKD") 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. Currently the Company owns and operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 546 communities in 35 states and the ability to serve approximately 52,000 residents.

Stock Listing
Common Stock
NYSE: BKD

Community Information

Ownership Type	Number of Facilities		Number of Units/Beds		Percentage of Q2 2009 Revenues			Percentage of Q2 2009 Facility Operating Income			Percentage of YTD 2009 Revenues			Percentage of YTD 2009 Facility Operating Income
Owned		167		18,534		39.4	%		38.5	%		39.5	%		38.0	%
Leased		358		29,001		60.3	%		60.8	%		60.2	%		61.2	%
Managed		21		4,309		0.3	%		0.7	%		0.3	%		0.8	%
Total		546		51,844		100.0	%		100.0	%		100.0	%		100.0	%

Operating Type
Retirement Centers		85		15,258		27.0	%		31.8	%		27.0	%		31.7	%
Assisted Living		405		20,807		43.4	%		43.1	%		43.6	%		43.4	%
CCRCs		35		11,470		29.3	%		24.4	%		29.1	%		24.1	%
Managed		21		4,309		0.3	%		0.7	%		0.3	%		0.8	%
Total		546		51,844		100.0	%		100.0	%		100.0	%		100.0	%

CFFO Per Share ($)

($ except where indicated)	FY 2008										FY 2009
		Q1		Q2		Q3		Q4	Full Year			Q1		Q2
Reported CFFO	$	0.38	$	0.36	$	0.22	$	0.32	$	1.28	$	0.49	$	0.50
Add: hurricane costs		-		-		0.04		0.01		0.05		-		-
Add: non-recurring, integration and system costs		0.03		0.10		0.04		0.02		0.19		-		-
Adjusted CFFO	$	0.41	$	0.46	$	0.30	$	0.35	$	1.52	$	0.49	$	0.50

Weighted Average Shares		101,995		101,856		101,398		101,424		101,667		101,738		106,042

Investor Relations

Ross Roadman
SVP, Investor Relations
Brookdale Senior Living
111 Westwood Place, Suite 200
Brentwood, TN 37027
Phone (615) 376-2412
rroadman@brookdaleliving.com

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

Brookdale Senior Living Inc.
Operating Segment Info
As of June 30, 2009

Selected Segment Operating and Other Data as Reported in the 10Q

	FY 2008															FY 2009
		Q1			Q2			Q3			Q4		Full Year				Q1			Q2

Retirement Centers
Number of communities (period end)		87			87			87			85			85			85			85
Total units/beds		15,747			15,693			15,710			15,251			15,251			15,258			15,258
Total units/beds excluding equity homes		15,652			15,598			15,615			15,156			15,156			15,163			15,163
Weighted average occupancy		90.5	%		89.6	%		90.6	%		90.2	%		90.3	%		88.9	%		88.7	%
Average monthly revenue per unit/bed	$	3,191		$	3,225		$	3,232		$	3,276		$	3,229		$	3,329		$	3,355

Assisted Living
Number of communities (period end)		409			410			410			409			409			406			405
Total units/beds		20,906			21,020			21,059			21,021			21,021			20,808			20,807
Weighted average occupancy		89.8	%		88.9	%		90.2	%		90.6	%		89.9	%		89.6	%		89.6	%
Average monthly revenue per unit/bed	$	3,740		$	3,751		$	3,723		$	3,737		$	3,738		$	3,895		$	3,887

CCRCs
Number of communities (period end)		32			32			32			32			32			35			35
Total units/beds		10,798			10,838			10,871			11,183			11,183			11,474			11,470
Total units/beds excluding equity homes		9,998			10,038			10,076			10,392			10,392			10,679			10,675
Weighted average occupancy		89.4	%		88.1	%		87.4	%		87.2	%		87.9	%		86.7	%		86.2	%
Average monthly revenue per unit/bed	$	4,699		$	4,767		$	4,810		$	4,864		$	4,759		$	5,017		$	5,128

Consolidated Totals
Number of communities (period end)		528			529			529			526			526			526			525
Total units/beds		47,451			47,551			47,640			47,455			47,455			47,540			47,535
Total units/beds excluding equity homes		46,556			46,656			46,750			46,569			46,569			46,650			46,645
Weighted average occupancy		90.0	%		88.9	%		89.7	%		89.7	%		89.6	%		88.7	%		88.5	%
Average monthly revenue per unit/bed	$	3,759		$	3,791		$	3,786		$	3,830		$	3,791		$	3,961		$	3,990

Management Services
Number of communities (period end)	22		21		21		22		22		22		21
Total units/beds	4,406		4,296		4,293		4,349		4,349		4,348		4,309
Weighted average occupancy	83.4	%	83.7	%	85.3	%	87.4	%	84.9	%	86.3	%	84.6	%

Average Occupancy and Rates based on Average Occupied Units in the Period

The table below represents occupancy based on a consistent treatment of units across all product lines. The table above is a combination of both units and beds.

	FY 2008															FY 2009
		Q1			Q2			Q3			Q4		Full Year				Q1			Q2

Retirement Centers
Number of communities (period end)		87			87			87			85			85			85			85
Total average units		15,623			15,569			15,586			15,127			15,127			15,139			15,139
Weighted average unit occupancy		89.3	%		88.4	%		88.9	%		89.0	%		88.9	%		87.5	%		87.0	%
Average monthly revenue per unit	$	3,241		$	3,274		$	3,302		$	3,328		$	3,286		$	3,387		$	3,426

Assisted Living
Number of communities (period end)		409			410			410			409			409			406			405
Total average units		19,164			19,169			19,298			19,277			19,277			19,064			19,051
Weighted average unit occupancy		86.5	%		85.6	%		86.6	%		87.2	%		86.5	%		86.1	%		86.0	%
Average monthly revenue per unit	$	4,235		$	4,251		$	4,228		$	4,234		$	4,237		$	4,427		$	4,426

CCRCs
Number of communities (period end)		32			32			32			32			32			35			35
Total average units		9,998			10,038			10,076			10,392			10,392			10,679			10,675
Weighted average unit occupancy		89.4	%		87.9	%		87.1	%		86.8	%		87.8	%		86.5	%		85.7	%
Average monthly revenue per unit	$	4,701		$	4,779		$	4,829		$	4,887		$	4,799		$	5,030		$	5,155

Consolidated Totals
Number of communities (period end)		528			529			529			526			526			526			525
Total average units		44,785			44,776			44,960			44,796			44,796			44,882			44,865
Weighted average unit occupancy		88.1	%		87.1	%		87.5	%		87.7	%		87.6	%		86.6	%		86.2	%
Average monthly revenue per unit	$	3,989		$	4,026		$	4,036		$	4,073		$	4,031		$	4,215		$	4,258

Brookdale Senior Living Inc.
Same Community, Capital Expenditure and ISC Information
As of June 30, 2009

Same Community Information

($ in 000s, except Avg. Mo. Revenue/unit)

	Three Months Ended June 30,									Twelve Months Ended June 30,
	2009			2008			% Change			2009(1)			2008(2)			% Change
Revenue	$	473,600		$	451,736			4.8	%	$	1,863,235		$	1,789,578			4.1	%
Operating Expense		299,368			292,231			2.4	%		1,213,629			1,158,112			4.8	%
Facility Operating Income	$	174,232		$	159,505			9.2	%	$	649,606		$	631,466			2.9	%
Facility Operating Margin		36.8	%		35.3	%		1.5	%		34.9	%		35.3	%		-0.4	%

# Communities		518			518						517			517
Avg. Period Occupancy		88.7	%		89.0	%		-0.3	%		89.4	%		90.3	%		-0.9	%
Avg. Mo. Revenue/unit	$	3,966		$	3,767			5.3	%	$	3,870		$	3,679			5.2	%

Excluding the $7.0 million of charges relating to integration-related accounting items in the fourth quarter of 2007, the same community data is as follows:

	Three Months Ended June 30,									Twelve Months Ended June 30,
	2009			2008			% Change			2009(1)			2008			% Change
Revenue	$	473,600		$	451,736			4.8	%	$	1,863,235		$	1,789,578			4.1	%
Operating Expense		299,368			292,231			2.4	%		1,213,629			1,151,067			5.4	%
Facility Operating Income	$	174,232		$	159,505			9.2	%	$	649,606		$	638,511			1.7	%
Facility Operating Margin		36.8	%		35.3	%		1.5	%		34.9	%		35.7	%		-0.8	%

(1) Excludes $1.2 million of expenses related to hurricane and named-tropical storms for the twelve months ended June 30, 2009.

(2) Includes $7.0 million of charges to facility operating expenses in the quarter ended December 31, 2007 which related to the Company's desire to conform its policies across all of its platforms including $5.9 million of estimated uncollectible accounts and $1.1 million of accounting conformity adjustments pertaining to expensing inventory and certain accrual policies.

Schedule of Capital Expenditures

($ in 000s)

	Three Months Ended June 30,
	2009			2008
Type
Recurring	$	4,559		$	7,495
Reimbursements		(671	)		(881	)
Net Recurring		3,888			6,614
Corporate (1)		(598	)		3,425
EBITDA-enhancing (2)		2,664			11,089

Development (3)		22,818			19,446
Reimbursements (4)		(25,756	)		(5,208	)
Net Development		(2,938	)		14,238
Net Total Capital Expenditures	$	3,016		$	35,366

(1) Corporate primarily includes capital expenditures for information technology systems and equipment
(2) EBITDA-enhancing capital expenditures generally represent unusual or non-recurring capital items and/or major renovations
(3) Development capital expenditures primarily relate to the facilty expansion and de novo development program
(4) Development reimbursements are typically received after expenditures are actually made. Only includes cash reimbursements received during the period

Information on Ancillary Services

	Three Months Ended June 30,
	2009		2008
Brookdale Units Served:
Therapy
Legacy ARC		12,588		12,536
Total		35,397		30,492

Home Health
Legacy ARC		8,803		4,637
Total		17,126		7,227

Avg. Mo. NOI/Occupied Unit
Legacy ARC	$	278	$	198
Total	$	200	$	138

Brookdale Senior Living Inc.
Capital Structure - selected financial information
As of June 30, 2009
($ in 000s)

Debt Maturities and Scheduled Principal Repayments

	Initial Maturities
	Mortgage		weighted			Line of		weighted	Mort. Debt		weighted			Capital		weighted			Total
	Debt (1)		rate (2)			Credit		rate (2)	& Line		rate (2)			Leases		rate (2)			Debt

2009		2,212		7.14	%		-			2,212		7.14	%		8,891		8.31	%		11,103
2010		137,195		2.35	%		-			137,195		2.35	%		20,669		8.34	%		157,864
2011		323,458		6.76	%		-			323,458		6.76	%		23,624		8.35	%		347,082
2012		880,052		3.52	%		-			880,052		3.52	%		24,479		8.41	%		904,531
2013		505,741		4.93	%		-			505,741		4.93	%		25,596		8.46	%		531,337
Thereafter		270,530		4.66	%		-			270,530		4.66	%		224,593		9.00	%		495,123
Total		2,119,188		4.42	%		-			2,119,188		4.42	%		327,852		8.81	%		2,447,040

	Final Maturities (3)
	Mortgage		weighted			Line of		weighted	Mort. Debt		weighted			Capital		weighted			Total
	Debt (1)		rate (2)			Credit		rate (2)	& Line		rate (2)			Leases		rate (2)			Debt

2009		2,212		7.14	%		-			2,212		7.14	%		8,891		8.31	%		11,103
2010		6,195		6.77	%		-			6,195		6.77	%		20,669		8.34	%		26,864
2011		295,718		4.00	%		-			295,718		4.00	%		23,624		8.35	%		319,342
2012		878,584		3.52	%		-			878,584		3.52	%		24,479		8.41	%		903,063
2013		539,131		5.75	%		-			539,131		5.75	%		25,596		8.46	%		564,727
Thereafter		397,348		4.90	%		-			397,348		4.90	%		224,593		9.00	%		621,941
Total		2,119,188		4.42	%		-			2,119,188		4.42	%		327,852		8.81	%		2,447,040

Coverage Ratios

	Six months ended June 30, 2009
							Interest/Cash Lease
	Units		FOI		Adj. FOI **		Payments		Coverage
Owned Communities		18,534		138,144		111,958		51,795		2.2	x
Leased Communities *		29,001		222,846		182,610		144,542		1.3	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,
	2008	2009
Scheduled Debt Amortization	783	1,897
Lease Financing Debt Amortization - FMV or no Purchase Option (4)	3,287	3,578
Lease Financing Debt Amortization - Bargain Purchase Option	4,732	5,258
Total Debt Amortization	8,802	10,733

Line Availability

($000s)	Dec-08		Mar-09		Jun-09


Revolver Balance		159,453		155,000		-
Letters of Credit Outstanding (7)		107,261		20,759		23,562
Ending Line Balance		266,714		175,759		23,562

Cash and cash equivalents		53,973		52,507		95,611

Total Line Capacity				220,000		75,000
Total Liquidity (Line Availability + Cash)				96,748		147,049

Leverage Ratios

				Annualized
	Balance			Leverage
Mortgage Debt (1)		2,119,188
Capital Leases		327,852
Total Property-Level Debt		2,447,040			6.9	x

Plus: Line of Credit (cash borrowings)		-
Less: Unrestricted Cash		(78,122	)
Less: Unrestricted Investments (8)		(17,489	)
Less: Cash held as collateral against existing debt		(30,003	)
Total Debt		2,321,426			6.5	x

2009 YTD annualized Adjusted EBITDA		355,964

Annualized Cash Lease Expense multiplied by 8		2,312,672
Total Adjusted Debt		4,634,098			7.2	x

2009 YTD annualized Adjusted EBITDAR		645,048

Debt Structure

			weighted
	Balance		rate (2)
Fixed Rate Mortgage Debt (1)		951,604		6.06	%
Variable Rate Mortgage Debt (1)		1,167,584		3.09	%
Capital Leases		327,852		8.81	%
Line of Credit (cash borrowings)		-
Total Debt		2,447,040

	Balance		% of total
Variable Rate debt with Interest Rate Swaps (5)		351,840		30.1	%
Variable Rate debt with Interest Rate Caps (1), (6)		734,621		62.9	%
Variable Rate debt - Unhedged		81,123		7.0	%
Total Variable Rate Mortgage Debt		1,167,584		100.0	%

(1) Also includes both bond and construction financing.

(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) Assumes extension options are exercised. These options are mainly at the company's sole discretion.

(4) Payments are included in CFFO.

(5) Weighted swap rate for stated reporting period is 3.74%.

(6) Weighted cap rate for stated reporting period of 5.97% is materially above current market rates, therefore caps have no impact on consolidated interest expense for given period.

(7) December includes $32.2 million of duplicative letters of credit that were returned during the first quarter of 2009.

(8) Represents unrestricted cash that is currently used as collateral for letters of credit for pricing purposes.

Brookdale Senior Living Inc.
CFFO Reconciliation
As of June 30, 2009
($ in 000s)

CFFO Calculation

	Three Months Ended June 30,
	2009	2008

Net cash provided by operating activities (includes non-refundable entrance fees)	$ 44,315	$ 36,095
Less: Changes in operating assets and liabilities (eliminates cash flow effect)	16,150	6,546
Add: Refundable entrance fees received	4,098	7,420
Less: Entrance fee refunds disbursed	(6,357)	(4,843)
Less: Recurring capital expenditures, net	(3,888)	(6,614)
Less: Lease financing debt amortization with fair market value or no purchase options	(1,798)	(1,662)
Add: Reimbursement of operating expenses and other	-	(269)
Cash From Facility Operations	$ 52,520	$ 36,673

Revenue Reconciliation

		FY 2008					FY 2009
		Q1	Q2	Q3	Q4	Full Year	Q1	Q2
Revenue reconciliation excl. entrance fee amortization
Average monthly revenue per quarter		3,759	3,791	3,786	3,830	3,791	3,961	3,990
Average monthly units (excluding equity homes) available		46,520	46,566	46,725	46,576	46,603	46,595	46,654
Average occupancy for the quarter		90.0%	88.9%	89.7%	89.7%	89.6%	88.7%	88.5%
Resident fee revenue		$ 472,144	$ 470,808	$ 476,043	$ 480,040	$ 1,899,035	$ 491,119	$ 494,227

Add: management fee revenue		1,813	2,264	1,527	1,390	6,994	1,717	1,298
Total revenues excluding entrance fee amortization		$ 473,957	$ 473,072	$ 477,570	$ 481,430	$ 1,906,029	$ 492,836	$ 495,525

CFFO Reconciliation to the Income Statement

Resident fee revenue		$ 480,648	$ 478,201	$ 482,277	$ 486,928	$ 1,928,054	$ 497,946	$ 500,757
Less: Entrance fee amortization		(6,691)	(5,129)	(4,707)	(5,498)	(22,025)	(5,110)	(5,232)
	Adjusted revenues	473,957	473,072	477,570	481,430	1,906,029	492,836	495,525

Less: Facility operating expenses		(305,059)	(306,526)	(326,214)	(323,782)	(1,261,581)	(318,112)	(316,586)

Less: G&A excluding non-cash stock expense		(36,388)	(40,297)	(32,948)	(31,286)	(140,919)	(33,707)	(31,721)
Add: G&A non-cash stock expense		8,010	8,621	6,737	5,569	28,937	6,809	6,871
	Net G&A	(28,378)	(31,676)	(26,211)	(25,717)	(111,982)	(26,898)	(24,850)

Less: Facility lease expense		(67,812)	(67,199)	(67,017)	(67,441)	(269,469)	(67,741)	(68,434)
Add: Straight-line lease expense		5,751	5,215	4,709	4,910	20,585	4,248	4,032
Less: Amortization of deferred gain		(1,085)	(1,086)	(1,086)	(1,085)	(4,342)	(1,086)	(1,085)
	Net lease expense	(63,146)	(63,070)	(63,394)	(63,616)	(253,226)	(64,579)	(65,487)

Entrance fee receipts		6,272	12,597	11,526	12,077	42,472	8,510	9,816
Entrance fee disbursements		(3,632)	(4,843)	(5,856)	(4,819)	(19,150)	(5,836)	(6,357)
	Net entrance fees	2,640	7,754	5,670	7,258	23,322	2,674	3,459

Adjusted EBITDA		80,014	79,554	67,421	75,573	302,562	85,921	92,061

Less: Recurring capital expenditures, net		(6,037)	(6,614)	(6,965)	(7,696)	(27,312)	(2,655)	(3,888)
Less: Interest expense, net		(34,245)	(34,264)	(36,216)	(35,046)	(139,771)	(32,001)	(33,122)
Less: Lease financing debt amortization with fair market value or no purchase options		(1,625)	(1,662)	(1,688)	(1,716)	(6,691)	(1,780)	(1,798)
Less: Other		478	(341)	(96)	1,315	1,356	706	(733)

Reported CFFO		$ 38,585	$ 36,673	$ 22,456	$ 32,430	$ 130,144	$ 50,191	$ 52,520

Add: hurricane costs		-	-	3,613	1,187	4,800	-	-
Add: non-recurring, integration and system costs		2,880	10,447	3,902	2,282	19,511	-	-
Adjusted CFFO		$ 41,465	$ 47,120	$ 29,971	$ 35,899	$ 154,455	$ 50,191	$ 52,520

CFFO Per Share ($)

($ except where indicated)		FY 2008					FY 2009	FY 2009
		Q1	Q2	Q3	Q4	Full Year	Q1	Q2
Reported CFFO		$ 0.38	$ 0.36	$ 0.22	$ 0.32	$ 1.28	$ 0.49	$ 0.50
Add: hurricane costs		-	-	0.04	0.01	0.05	-	-
Add: non-recurring, integration and system costs		0.03	0.10	0.04	0.02	0.19	-	-
Adjusted CFFO		$ 0.41	$ 0.46	$ 0.30	$ 0.35	$ 1.52	$ 0.49	$ 0.50

Shares used in calculation of CFFO (000's)		101,995	101,856	101,398	101,424	101,667	101,738	106,042

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 condensed consolidated financial statements, included in the accompanying earnings release.

Brookdale Senior Living Inc.

Quarterly Entry Fee Information

As of June 30, 2009

	Q1 07		Q2 07		Q3 07		Q4 07		Q1 08		Q2 08		Q3 08		Q4 08		Q1 09		Q2 09
Ending # EF Vacant Units	372		406		379		429		434		416		448		447		475		474
# Closings	51		60		70		60		40		78		67		65		48		62
# of Refunds	88		65		75		83		47		69		95		67		69		86

Cash Basis ($000's)
Resale Receipts:
Proceeds from non-refundable entrance fees (1)	3,916		4,726		5,673		5,015		2,780		5,177		7,253		7,391		4,872		5,718
Proceeds from refundable entrance fees (2)	4,258		4,064		8,696		8,901		3,492		7,420		4,273		4,686		3,638		4,098
Total Cash Proceeds	8,174		8,790		14,369		13,916		6,272		12,597		11,526		12,077		8,510		9,816
Refunds of entrance fees (3)	(6,315	)	(4,089	)	(5,084	)	(4,069	)	(3,632	)	(4,843	)	(5,856	)	(4,819	)	(5,836	)	(6,357	)
Net Resale Cash Flow	1,859		4,701		9,285		9,847		2,640		7,754		5,670		7,258		2,674		3,459

Average Resale $ (excluding My Choice proceeds)	160,275		143,300		153,486		153,033		145,850		151,244		163,134		178,969		165,042		158,065
Average Refund $	(71,761	)	(62,908	)	(67,787	)	(49,024	)	(74,723	)	(67,754	)	(61,642	)	(71,925	)	(84,580	)	(69,027	)

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

Value of Unsold Inventory ($ in 000's)
Gross Value @ Average Resale Price of $170,000																			80,580
Refund Attachments																			(7,453	)
Net Cash Value																			73,127

Income Statement Impact ($ in 000's)
On BKD's income statement, in accordance with GAAP, 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:

	Q1 07		Q2 07		Q3 07		Q4 07		Q1 08		Q2 08		Q3 08		Q4 08		Q1 09		Q2 09
Amortization of entrance fees (incl. gains on terminations)	(4,259	)	(4,641	)	(5,322	)	(5,019	)	(6,691	)	(5,129	)	(4,707	)	(5,498	)	(5,110	)	(5,232	)

Principles of Entry Fee Accounting
Certain of BKD'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. BKD 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 generally refundable within a certain time period following contract termination or in certain agreements, upon the resale of a comparable unit or 12 months after the resident vacates the unit and is not amortized.

Quarterly Entrance Fee Amortization
($ in 000's)
		Q1 08			Q2 08			Q3 08			Q4 08			Q1 09			Q2 09
Original ARC Communities

Occupancy		91	%		89	%		88	%		89	%		88	%		87	%
Ending # EF Vacant Units		181			222			249			243			271			259
# EF Closings		29			46			52			48			29			33
# of EF Refunds		27			44			58			45			41			70

EF Resale Receipts		4,906			8,729			9,699			8,739			5,344			5,579
EF Refunds Paid		(1,823	)		(2,795	)		(4,320	)		(3,644	)		(3,855	)		(5,190	)
Net Resale Cash Flow		3,083			5,934			5,379			5,095			1,489			389

Average EF Resale $ (excluding My Choice proceeds)	$	154		$	177		$	175		$	175		$	166		$	169
Average EF Refund $ (excluding My Choice refunds)	$	(63	)	$	(62	)	$	(74	)	$	(81	)	$	(94	)	$	(71	)

Total NBA Communities

Occupancy		76	%		75	%		75	%		76	%		76	%		76	%
Ending # EF Vacant Units		207			194			199			204			204			215
# EF Closings		11			32			15			17			19			29
# of EF Refunds (1)		20			25			37			22			28			16

EF Resale Receipts		1,366			3,868			1,827			3,338			3,166			4,237
EF Refunds Paid (1)		(1,809	)		(2,048	)		(1,536	)		(1,175	)		(1,981	)		(1,167	)
Net Resale Cash Flow		(443	)		1,820			291			2,163			1,185			3,070

Average EF Resale $ (excluding My Choice proceeds)	$	124		$	114		$	122		$	189		$	163		$	146
Average EF Refund $ (excluding My Choice refunds)	$	(90	)	$	(77	)	$	(42	)	$	(53	)	$	(71	)	$	(86	)

Total Consolidated EF Communities

Occupancy		87	%		86	%		85	%		85	%		85	%		84	%
Ending # EF Vacant Units		388			416			448			447			475			474
# EF Closings		40			78			67			65			48			62
# of EF Refunds		47			69			95			67			69			86

EF Resale Receipts		6,272			12,597			11,526			12,077			8,510			9,816
EF Refunds Paid		(3,632	)		(4,843	)		(5,856	)		(4,819	)		(5,836	)		(6,357	)
Net Resale Cash Flow		2,640			7,754			5,670			7,258			2,674			3,459

Average EF Resale $ (excluding My Choice proceeds)	$	146		$	151		$	163		$	179		$	165		$	158
Average EF Refund $ (excluding My Choice refunds)	$	(75	)	$	(68	)	$	(62	)	$	(72	)	$	(85	)	$	(69	)

(1) Includes certain refunds accelerated for repositioning of the community

Brookdale Senior Living Inc.
Quarterly Cash Flow Statements
As of June 30, 2009
($ in 000s)

Cash Flow Statements

		Q1 2008			Q2 2008			Q3 2008			Q4 2008		Full Year				Q1 2009			Q2 2009		YTD 2009
Cash Flows from Operating Activities
Net loss	$	(55,093	)	$	(3,485	)	$	(35,877	)	$	(278,786	)	$	(373,241	)	$	(13,636	)	$	(10,530	)	$	(24,166	)
Adjustments to reconcile net loss to net cash provided by operating activities:														-
Non-cash portion of loss on extinguishment of debt		2,821			231			-			-			3,052			-			1,740			1,740
Depreciation and amortization		73,497			71,255			70,070			71,087			285,909			69,675			70,652			140,327
Goodwill and asset impairment		-			-			-			220,026			220,026			-			-			-
Gain on sale of assets		-			-			-			(2,131	)		(2,131	)		(4,455	)		103			(4,352	)
Equity in (earnings) loss of unconsolidated ventures		173			935			(358	)		111			861			(595	)		(581	)		(1,176	)
Distributions received from JVs		190			1,182			546			1,834			3,752			11			-			11
Amortization of deferred gain		(1,085	)		(1,086	)		(1,086	)		(1,085	)		(4,342	)		(1,086	)		(1,085	)		(2,171	)
Amortization of entrance fees		(6,691	)		(5,129	)		(4,707	)		(5,498	)		(22,025	)		(5,110	)		(5,232	)		(10,342	)
Proceeds from deferred entrance fee revenue		2,780			5,177			7,253			7,391			22,601			4,872			5,718			10,590
Deferred income tax benefit		(30,662	)		(3,532	)		(23,049	)		(32,255	)		(89,498	)		(8,194	)		(3,323	)		(11,517	)
Change in deferred lease liability		5,751			5,215			4,709			4,910			20,585			4,248			4,032			8,280
Change in fair value of derivatives and amortization		45,633			(36,743	)		8,454			50,802			68,146			4,285			(7,900	)		(3,615	)
Non-cash stock-based compensation		8,010			8,621			6,737			5,569			28,937			6,809			6,871			13,680
Changes in operating assets and liabilities:
Accounts receivable, net		(6,392	)		(2,067	)		(9,706	)		(6,985	)		(25,150	)		(3,118	)		79			(3,039	)
Prepaid expenses and other assets, net		2,515			12,164			(9,037	)		(18,306	)		(12,664	)		(4,602	)		(4,623	)		(9,225	)
Accounts payable and accrued expenses		(5,083	)		(11,080	)		19,214			12,377			15,428			4,966			6,847			11,813
Deferred revenue		3,081			(5,747	)		(726	)		1,206			(2,186	)		15,057			(6,747	)		8,310
Tenant refundable fees and security deposits		1,184			184			(1,807	)		(854	)		(1,293	)		(370	)		(11,706	)		(12,076	)
Net cash provided by operating activities		40,629			36,095			30,630			29,413			136,767			68,757			44,315			113,072
Cash Flows from Investing Activities
Decrease in lease security deposits and lease acquisition deposits, net		1,763			109			544			1,065			3,481			1,480			-			1,480
(Increase) decrease in cash and escrow deposits — restricted		(20,663	)		16,830			(3,962	)		(13,965	)		(21,760	)		(57,897	)		4,030			(53,867	)
Additions to property, plant, and equipment and leasehold intangibles,net of related payables		(46,213	)		(41,455	)		(46,511	)		(54,849	)		(189,028	)		(33,491	)		(29,443	)		(62,934	)
Acquisition of assets, net of related payables and cash received		(745	)		(462	)		(3,898	)		(1,626	)		(6,731	)		-			(190	)		(190	)
Payment on (issuance of) notes receivable, net		10,112			29,549			-			(299	)		39,362			(36	)		(759	)		(795	)
Investment in unconsolidated ventures		(356	)		(137	)		(670	)		(1,616	)		(2,779	)		(1,106	)					(1,106	)
Distributions received from unconsolidated ventures		-			154			146			3,616			3,916			525			265			790
Proceeds from sale of business		-			-			-			2,935			2,935			9,166			210			9,376
Proceeds from sale of unconsolidated venture		-			-			4,165			-			4,165			8,843			(12	)		8,831
Net cash (used in) provided by investing activities		(56,102	)		4,588			(50,186	)		(64,739	)		(166,439	)		(72,516	)		(25,899	)		(98,415	)
Cash Flows from Financing Activities
Proceeds from debt		288,479			155,868			23,422			43,575			511,344			26,521			23,998			50,519
Repayment of debt and capital lease obligations		(181,327	)		(42,865	)		(5,018	)		(26,279	)		(255,489	)		(10,403	)		(5,330	)		(15,733	)
Proceeds from line of credit		125,000			45,000			94,757			74,696			339,453			60,446			-			60,446
Repayment of line of credit		(120,000	)		(198,000	)		(60,000	)		-			(378,000	)		(64,899	)		(155,000	)		(219,899	)
Payment of dividends		(51,897	)		(25,955	)		(25,844	)		(25,759	)		(129,455	)		-			-			-
Purchase of treasury stock		-			(20,020	)		(9,167	)		-			(29,187	)		-			-			-
Payment of financing costs, net of related payables		(853	)		(12,571	)		(296	)		(572	)		(14,292	)		(6,895	)		(432	)		(7,327	)
Other		(403	)		(400	)		(1,075	)		(1,096	)		(2,974	)		(279	)		(197	)		(476	)
Refundable entrance fees:														-
Proceeds from refundable entrance fees		3,492			7,420			4,273			4,686			19,871			3,638			4,098			7,736
Refunds of entrance fees		(3,632	)		(4,843	)		(5,856	)		(4,819	)		(19,150	)		(5,836	)		(6,357	)		(12,193	)
Recouponing and payment of swap termination		(23,942	)		(3,180	)		-			(31,018	)		(58,140	)		-			-			-
Proceeds from public equity offering, net		-			-			-			-			-			-			163,908			163,908
Cash portion of loss on extinguishment of debt		(812	)		(231	)		(197	)		-			(1,240	)		-			-			-
Net cash (used in) provided by financing activities		34,105			(99,777	)		14,999			33,414			(17,259	)		2,293			24,688			26,981
Net increase (decrease) in cash and cash equivalents		18,632			(59,094	)		(4,557	)		(1,912	)		(46,931	)		(1,466	)		43,104			41,638
Cash and cash equivalents at beginning of period		100,904			119,536			60,442			55,885			100,904			53,973			52,507			53,973
Cash and cash equivalents at end of period	$	119,536		$	60,442		$	55,885		$	53,973		$	53,973		$	52,507		$	95,611		$	95,611

Brookdale Senior Living Inc.

Quarterly Entry Fee Information

As of June 30, 2009

American Retirement Corporation ("ARC"), acquired in 2006, was active in the entrance fee CCRC business for many years and operated seven such communities. Prior to the ARC acquisition, BKD acquired three entrance fee CCRC's from a non-profit, the National Benevolent Association, which were in bankruptcy. BKD has been repositioning those
communities by upgrading/renovating, expanding the campus or levels of care offered and changing the form of contract to include such items as life care and health benefits.