Brookdale Senior Living (BKD) 8-K Results of Operations and Financial Condition

Brookdale Senior Living Inc.

Corporate Overview - selected financial information

As of December 31, 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 565 communities in 35 states and the ability to serve approximately 53,600 residents.

Stock Listing

Common Stock

NYSE: BKD

Community Information

Ownership Type	Number of Facilities		Number of Units/Beds		Percentage of Q4 2009 Revenues			Percentage of Q4 2009 Facility Operating Income			Percentage of YTD 2009 Revenues			Percentage of YTD 2009 Facility Operating Income
Owned		187		20,746		41.3	%		39.0	%		40.0	%		38.5	%
Leased		359		29,092		58.4	%		60.0	%		59.7	%		60.6	%
Managed		19		3,788		0.3	%		1.0	%		0.3	%		0.9	%
Total		565		53,626		100.0	%		100.0	%		100.0	%		100.0	%
Operating Type
Retirement Centers		80		14,867		24.2	%		29.8	%		24.6	%		29.7	%
Assisted Living		430		22,954		46.1	%		43.8	%		45.8	%		45.0	%
CCRCs		36		12,017		29.4	%		25.4	%		29.3	%		24.4	%
Managed		19		3,788		0.3	%		1.0	%		0.3	%		0.9	%
Total		565		53,626		100.0	%		100.0	%		100.0	%		100.0	%

CFFO Per Share ($)
($ except where indicated)	FY 2008										FY 2009
		Q1		Q2		Q3		Q4	Full Year(1)			Q1		Q2		Q3		Q4	Full Year(1)
Reported CFFO	$	0.38	$	0.36	$	0.22	$	0.32	$	1.28	$	0.49	$	0.50	$	0.41	$	0.39	$	1.79
Add:  hurricane costs		-		-		0.04		0.01		0.05		-		-		-		-		-
Add:  non-recurring, acquisition, integration and system costs		0.03		0.10		0.04		0.02		0.19		-		-		0.02		0.03		0.05
Adjusted CFFO	$	0.41	$	0.46	$	0.30	$	0.35	$	1.52	$	0.49	$	0.50	$	0.43	$	0.42	$	1.84
Weighted Average Shares		101,995		101,856		101,398		101,424				101,738		106,042		118,455		118,653
(1) Annual 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 200

Brentwood, TN 37027

Phone (615) 564-8104

rroadman@brookdaleliving.com

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

Brookdale Senior Living Inc.

Operating Segment Info

As of December 31, 2009

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

	FY 2008															FY 2009
		Q1			Q2			Q3			Q4		Full Year				Q1			Q2			Q3			Q4		Full Year
Retirement Centers
Number of communities (period end)		79			79			79			77			77			77			77			77			80			80
Total units/beds		14,746			14,692			14,688			14,229			14,229			14,236			14,236			14,233			14,867			14,867
Total units/beds excluding equity homes		14,651			14,597			14,593			14,134			14,134			14,141			14,141			14,138			14,772			14,772
Weighted average occupancy		90.5	%		89.5	%		90.5	%		90.1	%		90.3	%		88.8	%		88.6	%		89.0	%		88.8	%		88.8	%
Average monthly revenue per unit/bed	$	3,132		$	3,168		$	3,176		$	3,219		$	3,171		$	3,272		$	3,296		$	3,292		$	3,278		$	3,285
Assisted Living
Number of communities (period end)		417			418			418			417			417			414			413			413			430			430
Total units/beds		21,907			22,021			22,081			22,043			22,043			21,830			21,829			21,826			22,954			22,954
Total units/beds excluding equity homes		21,907			22,021			22,081			22,043			22,043			21,830			21,829			21,826			22,911			22,911
Weighted average occupancy		89.9	%		89.0	%		90.3	%		90.6	%		89.9	%		89.6	%		89.6	%		90.7	%		91.3	%		90.3	%
Average monthly revenue per unit/bed	$	3,754		$	3,765		$	3,737		$	3,752		$	3,752		$	3,905		$	3,900		$	3,861		$	3,895		$	3,890
CCRCs
Number of communities (period end)		32			32			32			32			32			35			35			35			36			36
Total units/beds		10,798			10,838			10,871			11,183			11,183			11,474			11,470			11,777			12,017			12,017
Total units/beds excluding equity homes		9,998			10,038			10,076			10,392			10,392			10,679			10,675			10,982			11,222			11,222
Weighted average occupancy		89.4	%		88.1	%		87.4	%		87.2	%		87.9	%		86.7	%		86.2	%		85.7	%		84.3	%		85.7	%
Average monthly revenue per unit/bed	$	4,699		$	4,767		$	4,810		$	4,864		$	4,759		$	5,017		$	5,128		$	5,200		$	5,210		$	5,139

Consolidated Totals
Number of communities (period end)		528			529			529			526			526			526			525			525			546			546
Total units/beds		47,451			47,551			47,640			47,455			47,455			47,540			47,535			47,836			49,838			49,838
Total units/beds excluding equity homes		46,556			46,656			46,750			46,569			46,569			46,650			46,645			46,946			48,905			48,905
Weighted average occupancy		90.0	%		88.9	%		89.7	%		89.7	%		89.6	%		88.7	%		88.5	%		89.0	%		88.9	%		88.8	%
Average monthly revenue per unit/bed	$	3,759		$	3,791		$	3,786		$	3,830		$	3,791		$	3,961		$	3,990		$	3,987		$	4,001		$	3,985

Management Services
Number of communities (period end)	22	��	21		21		22		22		22		21		22		19		19
Total units/beds	4,406		4,296		4,293		4,349		4,349		4,348		4,309		4,432		3,788		3,788
Weighted average occupancy	83.4	%	83.7	%	85.3	%	87.4	%	84.9	%	86.3	%	84.6	%	83.9	%	84.4	%	84.8	%

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			Q3			Q4		Full Year
Retirement Centers
Number of communities (period end)		79			79			79			77			77			77			77			77			80			80
Total average units		14,614			14,568			14,549			14,105			14,459			14,116			14,117			14,114			14,203			14,137
Weighted average unit occupancy		89.3	%		88.3	%		88.9	%		88.8	%		88.8	%		87.4	%		86.9	%		87.3	%		87.2	%		87.2	%
Average monthly revenue per unit	$	3,181		$	3,216		$	3,246		$	3,271		$	3,228		$	3,331		$	3,366		$	3,361		$	3,373		$	3,358
Assisted Living
Number of communities (period end)		417			418			418			417			417			414			413			413			430			430
Total average units		20,160			20,170			20,308			20,316			20,239			20,084			20,073			20,062			20,600			20,205
Weighted average unit occupancy		86.7	%		85.7	%		86.7	%		87.4	%		86.6	%		86.2	%		86.0	%		87.0	%		87.9	%		86.8	%
Average monthly revenue per unit	$	4,229		$	4,244		$	4,222		$	4,228		$	4,231		$	4,412		$	4,417		$	4,376		$	4,390		$	4,398
CCRCs
Number of communities (period end)		32			32			32			32			32			35			35			35			36			36
Total average units		9,989			10,038			10,076			10,372			10,119			10,632			10,675			10,816			11,162			10,821
Weighted average unit occupancy		89.4	%		87.9	%		87.1	%		86.8	%		87.8	%		86.5	%		85.7	%		85.1	%		83.7	%		85.2	%
Average monthly revenue per unit	$	4,701		$	4,779		$	4,829		$	4,887		$	4,799		$	5,030		$	5,153		$	5,239		$	5,249		$	5,168

Consolidated Totals
Number of communities (period end)		528			529			529			526			526			526			525			525			546			546
Total average units		44,763			44,776			44,933			44,793			44,817			44,832			44,865			44,992			45,965			45,163
Weighted average unit occupancy		88.1	%		87.1	%		87.5	%		87.7	%		87.6	%		86.6	%		86.2	%		86.7	%		86.7	%		86.6	%
Average monthly revenue per unit	$	3,989		$	4,026		$	4,036		$	4,073		$	4,031		$	4,215		$	4,258		$	4,259		$	4,275		$	4,252

Brookdale Senior Living Inc.
Same Community, Capital Expenditure and ISC Information
As of December 31, 2009
Same Community Information
($ in 000s, except Avg. Mo. Revenue/unit)
	Three Months Ended December 31,									Twelve Months Ended December 31,
	2009			2008 (1)			% Change			2009			2008 (1)			% Change
Revenue	$	474,918		$	460,789			3.1	%	$	1,892,290		$	1,817,984			4.1	%
Operating Expense		310,792			305,739			1.7	%		1,217,457			1,191,844			2.1	%
Facility Operating Income	$	164,126		$	155,050			5.9	%	$	674,833		$	626,140			7.8	%
Facility Operating Margin		34.6	%		33.6	%		0.9	%		35.7	%		34.4	%		1.2	%
# Communities		514			514						514			514
Avg. Period Occupancy		89.5	%		90.2	%		-0.7	%		89.3	%		89.9	%		-0.6	%
Avg. Mo. Revenue/unit	$	3,953		$	3,807			3.8	%	$	3,949		$	3,765			4.9	%
(1) Excludes $601 and $1,257 of expenses related to hurricane and named-tropical storms for the three months and twelve months ended December 31, 2008

Schedule of Capital Expenditures
($ in 000s)
	Three Months Ended December 31,
	2009			2008
Type
Recurring	$	8,155		$	7,984
Reimbursements		(671	)		(288	)
Net Recurring		7,484			7,696
Corporate (1)		2,106			1,227
EBITDA-enhancing (2)		8,126			10,032
Development (3)		11,559			35,606
Reimbursements (4)		(12,152	)		(38,794	)
Net Development		(593	)		(3,188	)
Net Total Capital Expenditures	$	17,123		$	15,767
(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 December 31,
	2009		2008
Brookdale Units Served:
Therapy
Legacy ARC		12,472		12,536
Total		35,690		33,456
Home Health
Legacy ARC		8,570		7,593
Total		20,159		14,028
Avg. Mo. NOI/Occupied Unit
Legacy ARC	$	295	$	222
Total	$	229	$	146

Brookdale Senior Living Inc.

Capital Structure - selected financial information

As of December 31, 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
2010		145,644		2.47	%		-			145,644		2.47	%		20,541		8.34	%		166,185
2011		285,131		6.97	%		-			285,131		6.97	%		23,636		8.35	%		308,767
2012		883,010		3.49	%		-			883,010		3.49	%		25,950		8.36	%		908,960
2013		641,387		4.70	%		-			641,387		4.70	%		25,596		8.46	%		666,983
2014		141,820		5.86	%		-			141,820		5.86	%		29,079		8.47	%		170,899
Thereafter		176,799		3.70	%		-			176,799		3.70	%		226,933		8.93	%		403,732
Total		2,273,791		4.37	%		-			2,273,791		4.37	%		351,735		8.74	%		2,625,526

	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
2010		19,644		5.32	%		-			19,644		5.32	%		20,541		8.34	%		40,185
2011		287,274		4.00	%		-			287,274		4.00	%		23,636		8.35	%		310,910
2012		884,761		3.50	%		-			884,761		3.50	%		24,482		8.41	%		909,243
2013		638,143		5.35	%		-			638,143		5.35	%		25,596		8.46	%		663,739
2014		1,820		7.19	%		-			1,820		7.19	%		29,079		8.47	%		30,899
Thereafter		442,149		4.86	%		-			442,149		4.86	%		228,401		8.92	%		670,550
Total		2,273,791		4.37	%		-			2,273,791		4.37	%		351,735		8.74	%		2,625,526

Coverage Ratios
	Twelve months ended December 31, 2009
							Interest/Cash Lease
	Units		FOI		Adj. FOI **		Payments		Coverage
Owned Communities		20,746		276,602		228,846		99,653		2.3	x
Leased Communities *		29,092		435,427		364,922		289,806		1.3	x
* The leased communities include the capital leases.
** Adjusted for 5% management fee and capital expenditures @ $350/unit.

Debt Amortization
	Twelve months ended December 31,
		2008	2009
Scheduled Debt Amortization		1,981	4,249
Lease Financing Debt Amortization - FMV or no Purchase Option (4)		6,691	7,195
Lease Financing Debt Amortization - Bargain Purchase Option		10,366	10,646
Total Debt Amortization		19,038	22,090

Line Availability
($000s)	Dec-08		Mar-09		Jun-09		Sep-09		Dec-09
Revolver Balance		159,453		155,000		-		-		-
Letters of Credit Outstanding (7)		107,261		20,759		23,562		23,657		17,347
Ending Line Balance		266,714		175,759		23,562		23,657		17,347
Cash and cash equivalents		53,973		52,507		95,611		159,313		66,370
Total Line Capacity				220,000		75,000		75,000		75,000
Total Liquidity (Line Availability + Cash)				96,748		147,049		210,656		124,023
Letters of credit outstanding on line (7)		107,261		20,759		23,562		23,657		17,347
Other letters of credit		42,475		48,475		48,475		48,475		48,770
Total letters of credit outstanding(7)		149,736		69,234		72,037		72,132		66,117

Leverage Ratios
		Annualized
	Balance	Leverage
Mortgage Debt (1)	2,273,791
Capital Leases	351,735
Total Property-Level Debt	2,625,526	7.0x
Plus: Line of Credit (cash borrowings)	-
Less: Unrestricted Cash	(66,370)
Less: Cash held as collateral against existing debt	(28,492)
Total Debt	2,530,664	6.7x
2009 Adjusted EBITDA	348,555
11 mos of acquisitions EBITDA (8)	27,125
Proforma 2009 Adjusted EBITDA	375,680
Annualized Cash Lease Expense multiplied by 8	2,084,720
Total Adjusted Debt	4,615,384	7.3x
2009 Adjusted EBITDAR	636,270

Debt Structure
		weighted
	Balance	rate (2)
Fixed Rate Mortgage Debt	999,539	6.03%
Variable Rate Mortgage Debt (1)	1,274,252	3.06%
Capital Leases	351,735	8.74%
Line of Credit (cash borrowings)	-
Total Debt	2,625,526
	Balance	% of total
Variable Rate debt with Interest Rate Swaps (5)	351,840	27.6%
Variable Rate debt with Interest Rate Caps (1) (6)	811,365	63.7%
Variable Rate debt - Unhedged	111,047	8.7%
Total Variable Rate Mortgage Debt	1,274,252	100.0%

(1) Also includes both bond and discount mortgage backed security 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.

(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 5.94% is materially above current market rates, therefore caps have no impact on consolidated interest expense for given period.

(7) December 2008 includes $32.2 million of duplicative letters of credit that were returned during the first quarter of 2009.

(8) Represents actual EBITDA on current year acquisitions from January 1, 2009 to the date of acquisition when actual results are consolidated.

Brookdale Senior Living Inc.

CFFO Reconciliation

As of December 31, 2009

($ in 000s)

CFFO Calculation
	Three Months Ended December 31,
	2009			2008
Net cash provided by operating activities (includes non-refundable entrance fees)	$	51,248		$	29,413
Less: Changes in operating assets and liabilities (eliminates cash flow effect)		11,753			12,562
Add: Refundable entrance fees received		13,354			4,686
Less: Entrance fee refunds disbursed		(6,074	)		(4,819	)
Less:  First generation entrance fees		(15,047	)		-
Less: Recurring capital expenditures, net		(7,484	)		(7,696	)
Less: Lease financing debt amortization with fair market value or no purchase options		(1,824	)		(1,716	)
Acquisition, transaction, integration, system and hurricane costs		3,554			3,469
Cash From Facility Operations	$	49,480		$	35,899

Revenue Reconciliation
	FY 2008															FY 2009
		Q1			Q2			Q3			Q4		Full Year				Q1			Q2			Q3			Q4		Full Year
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			3,987			4,001			3,985
Average monthly units (excluding equity homes) available		46,520			46,566			46,725			46,576			46,603			46,595			46,654			46,792			47,910			46,990
Average occupancy for the quarter		90.0	%		88.9	%		89.7	%		89.7	%		89.6	%		88.7	%		88.5	%		89.0	%		88.9	%		88.8	%
Resident fee revenue	$	472,144		$	470,808		$	476,043		$	480,040		$	1,899,035		$	491,119		$	494,227		$	498,114		$	511,228		$	1,994,688
Add:  management fee revenue		1,813			2,264			1,527			1,390			6,994			1,717			1,298			1,987			1,717			6,719
Total revenues excluding entrance fee amortization	$	473,957		$	473,072		$	477,570		$	481,430		$	1,906,029		$	492,836		$	495,525		$	500,101		$	512,945		$	2,001,407

CFFO Reconciliation to the Income Statement
Resident fee revenue	$	480,648		$	478,201		$	482,277		$	486,928		$	1,928,054		$	497,946		$	500,757		$	505,843		$	518,522		$	2,023,068
Less:  Entrance fee amortization		(6,691	)		(5,129	)		(4,707	)		(5,498	)		(22,025	)		(5,110	)		(5,232	)		(5,742	)		(5,577	)		(21,661	)
Adjusted revenues		473,957			473,072			477,570			481,430			1,906,029			492,836			495,525			500,101			512,945			2,001,407
Less:  Facility operating expenses		(305,059	)		(306,526	)		(326,214	)		(323,782	)		(1,261,581	)		(318,112	)		(316,586	)		(328,939	)		(340,683	)		(1,304,320	)
Add: Loss on sale of communites, net		-			-			-			-			-			-			-			-			2,043			2,043
Add: Change in future service obligation		-			-			-			-			-			-			-			-			(2,342	)		(2,342	)
		(305,059	)		(306,526	)		(326,214	)		(323,782	)		(1,261,581	)		(318,112	)		(316,586	)		(328,939	)		(340,982	)		(1,304,619	)
Less:  G&A excluding non-cash stock expense		(36,388	)		(40,297	)		(32,948	)		(31,286	)		(140,919	)		(33,707	)		(31,721	)		(34,720	)		(34,716	)		(134,864	)
Add:  G&A non-cash stock expense		8,010			8,621			6,737			5,569			28,937			6,809			6,871			7,869			5,386			26,935
Net G&A		(28,378	)		(31,676	)		(26,211	)		(25,717	)		(111,982	)		(26,898	)		(24,850	)		(26,851	)		(29,330	)		(107,929	)
Less:  Facility lease expense		(67,812	)		(67,199	)		(67,017	)		(67,441	)		(269,469	)		(67,741	)		(68,434	)		(68,036	)		(67,885	)		(272,096	)
Add:  Straight-line lease expense		5,751			5,215			4,709			4,910			20,585			4,248			4,032			3,793			3,778			15,851
Less:  Amortization of deferred gain		(1,085	)		(1,086	)		(1,086	)		(1,085	)		(4,342	)		(1,086	)		(1,085	)		(1,088	)		(1,086	)		(4,345	)
Net lease expense		(63,146	)		(63,070	)		(63,394	)		(63,616	)		(253,226	)		(64,579	)		(65,487	)		(65,331	)		(65,193	)		(260,590	)
Entrance fee receipts		6,272			12,597			11,526			12,077			42,472			8,510			9,816			11,305			13,571			43,202
Entrance fee disbursements		(3,632	)		(4,843	)		(5,856	)		(4,819	)		(19,150	)		(5,836	)		(6,357	)		(4,649	)		(6,074	)		(22,916	)
Net entrance fees		2,640			7,754			5,670			7,258			23,322			2,674			3,459			6,656			7,497			20,286

Adjusted EBITDA	80,014		79,554		67,421		75,573		302,562		85,921		92,061		85,636		84,937		348,555
Less:  Recurring capital expenditures, net	(6,037	)	(6,614	)	(6,965	)	(7,696	)	(27,312	)	(2,655	)	(3,888	)	(5,495	)	(7,484	)	(19,522	)
Less:  Interest expense, net	(34,245	)	(34,264	)	(36,216	)	(35,046	)	(139,771	)	(32,001	)	(33,122	)	(29,951	)	(31,441	)	(126,515	)
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	)	(1,793	)	(1,824	)	(7,195	)
Less:  Other	478		(341	)	(96	)	1,315		1,356		706		(733	)	(202	)	1,738		1,509

Reported CFFO	$	38,585	$	36,673	$	22,456	$	32,430	$	130,144	$	50,191	$	52,520	$	48,195	$	45,926	$	196,832
Add:  hurricane costs		-		-		3,613		1,187		4,800		-		-		-		-		-
Add:  non-recurring, acquisition, integration and system costs		2,880		10,447		3,902		2,282		19,511		-		-		2,200		3,554		5,754
Adjusted CFFO	$	41,465	$	47,120	$	29,971	$	35,899	$	154,455	$	50,191	$	52,520	$	50,395	$	49,480	$	202,586

CFFO Per Share ($)
($ except where indicated)	FY 2008															FY 2009
		Q1		Q2		Q3		Q4	Full Year(1)			Q1		Q2		Q3		Q4	Full Year(1)
Reported CFFO	$	0.38	$	0.36	$	0.22	$	0.32	$	1.28	$	0.49	$	0.50	$	0.41	$	0.39	$	1.79
Add:  hurricane costs		-		-		0.04		0.01		0.05		-		-		-		-		-
Add:  non-recurring, acquisition, integration and system costs		0.03		0.10		0.04		0.02		0.19		-		-		0.02		0.03		0.05
Adjusted CFFO	$	0.41	$	0.46	$	0.30	$	0.35	$	1.52	$	0.49	$	0.50	$	0.43	$	0.42	$	1.84
Shares used in calculation of CFFO (000's)		101,995		101,856		101,398		101,424				101,738		106,042		118,455		118,653
(1) Annual 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 condensed consolidated financial statements, included in the accompanying earnings release.

Brookdale Senior Living Inc.

Quarterly Entry Fee Information

As of December 31, 2009

	Q1 07	Q2 07	Q3 07	Q4 07	Q1 08	Q2 08	Q3 08	Q4 08	Q1 09	Q2 09	Q3 09	Q4 09
Ending # EF Vacant Units	372	406	379	429	434	416	448	447	475	474	536	548
# Closings	51	60	70	60	40	78	67	65	48	62	70	80
# of Refunds	88	65	75	83	47	69	95	67	67	86	67	84

Cash Basis ($000's)
Resale Receipts:
Proceeds from non-refundable entrance fees (1)(2)	3,916		4,726		5,673		5,015		2,780		5,177		7,253		7,391		4,872		5,718		8,429		8,648
Proceeds from refundable entrance fees (2)(3)	4,258		4,064		8,696		8,901		3,492		7,420		4,273		4,686		3,638		4,098		2,876		4,923
Total Cash Proceeds	8,174		8,790		14,369		13,916		6,272		12,597		11,526		12,077		8,510		9,816		11,305		13,571
Refunds of entrance fees (4)	(6,315	)	(4,089	)	(5,084	)	(4,069	)	(3,632	)	(4,843	)	(5,856	)	(4,819	)	(5,836	)	(6,357	)	(4,649	)	(6,074	)
Net Resale Cash Flow	1,859		4,701		9,285		9,847		2,640		7,754		5,670		7,258		2,674		3,459		6,656		7,497
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		159,786		165,138
Average Refund $ (excluding My Choice refunds)	(71,761	)	(62,908	)	(67,787	)	(49,024	)	(74,723	)	(67,754	)	(61,642	)	(71,925	)	(87,104	)	(68,930	)	(68,851	)	(66,881	)
Notes:
(1) From Statement of Cash Flows (Operating Activities section) with line description: Proceeds from deferred entrance fee revenue
(2) Excludes first generation entrance fees received
(3) From Statement of Cash Flows (Financing Activities section) with line description: Proceeds from refundable entrance fees (which includes My Choice proceeds)
(4) 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 (2)	93,160
Refund Attachments	(10,355	)
Net Cash Value	82,805

Income Statement Impact ($ in 000's)
On BKD'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:
	Q1 07		Q2 07		Q3 07		Q4 07		Q1 08		Q2 08		Q3 08		Q4 08		Q1 09		Q2 09		Q3 09		Q4 09
Amortization of entrance fees (incl. gains on terminations) (5)	(4,259	)	(4,641	)	(5,322	)	(5,019	)	(6,691	)	(5,129	)	(4,707	)	(5,498	)	(5,110	)	(5,232	)	(5,692	)	(5,361	)
(5) Excludes first generation entrance fee amortization

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.

Brookdale Senior Living Inc.

Quarterly Entry Fee Information

As of December 31, 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.

Quarterly Entrance Fee Amortization
($ in 000's)
		Q1 08			Q2 08			Q3 08			Q4 08			Q1 09			Q2 09			Q3 09			Q4 09
Original ARC
Occupancy		91	%		89	%		88	%		89	%		88	%		87	%		86	%		86	%
Ending # EF Vacant Units		181			222			249			243			271			259			328			348
# EF Closings		29			46			52			48			29			33			37			61
# of EF Refunds		27			44			58			45			41			70			38			60
EF Resale Receipts		4,906			8,729			9,699			8,739			5,344			5,579			6,051			11,051
EF Refunds Paid		(1,823	)		(2,795	)		(4,320	)		(3,644	)		(3,855	)		(5,190	)		(2,838	)		(4,265	)
Net Resale Cash Flow		3,083			5,934			5,379			5,095			1,489			389			3,213			6,786
Average EF Resale $ (excluding My Choice proceeds)	$	154		$	177		$	175		$	175		$	166		$	169		$	164		$	177
Average EF Refund $ (excluding My Choice refunds)	$	(63	)	$	(62	)	$	(74	)	$	(81	)	$	(94	)	$	(71	)	$	(74	)	$	(63	)

Total NBA Communities
Occupancy		76	%		75	%		75	%		76	%		76	%		76	%		77	%		76	%
Ending # EF Vacant Units		207			194			199			204			204			215			208			200
# EF Closings		11			32			15			17			19			29			33			19
# of EF Refunds (1)		20			25			37			22			26			16			29			24
EF Resale Receipts		1,366			3,868			1,827			3,338			3,166			4,237			5,254			2,520
EF Refunds Paid (1)		(1,809	)		(2,048	)		(1,536	)		(1,175	)		(1,981	)		(1,167	)		(1,811	)		(1,809	)
Net Resale Cash Flow		(443	)		1,820			291			2,163			1,185			3,070			3,443			711
Average EF Resale $ (excluding My Choice proceeds)	$	124		$	114		$	122		$	189		$	163		$	146		$	156		$	126
Average EF Refund $ (excluding My Choice refunds)	$	(90	)	$	(77	)	$	(42	)	$	(53	)	$	(76	)	$	(61	)	$	(62	)	$	(75	)

Total Consolidated EF Communities (2)
Occupancy		87	%		86	%		85	%		85	%		85	%		84	%		84	%		83	%
Ending # EF Vacant Units		388			416			448			447			475			474			536			548
# EF Closings		40			78			67			65			48			62			70			80
# of EF Refunds		47			69			95			67			67			86			67			84
EF Resale Receipts		6,272			12,597			11,526			12,077			8,510			9,816			11,305			13,571
EF Refunds Paid		(3,632	)		(4,843	)		(5,856	)		(4,819	)		(5,836	)		(6,357	)		(4,649	)		(6,074	)
Net Resale Cash Flow		2,640			7,754			5,670			7,258			2,674			3,459			6,656			7,497
Average EF Resale $ (excluding My Choice proceeds)	$	146		$	151		$	163		$	179		$	165		$	158		$	160		$	165
Average EF Refund $ (excluding My Choice refunds)	$	(75	)	$	(68	)	$	(62	)	$	(72	)	$	(87	)	$	(69	)	$	(69	)	$	(67	)
(1) Includes certain refunds accelerated for repositioning of the community
(2) Excludes all first generation entrance fee data and receipts.

Brookdale Senior Living Inc.

Quarterly Cash Flow Statements

As of December 31, 2009

($ in 000s)

Cash Flow Statements
	Q1 2008					Q2 2008			Q3 2008			Q4 2008		FY 2008				Q1 2009			Q2 2009			Q3 2009			Q4 2009		YTD 2009
Cash Flows from Operating Activities
Net loss		$	(55,093	)	$	(3,485	)	$	(35,877	)	$	(278,786	)	$	(373,241	)	$	(13,636	)	$	(10,530	)	$	(21,290	)	$	(20,799	)	$	(66,255	)
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			1,178			(1,626	)		1,292
Depreciation and amortization			73,497			71,255			70,070			71,087			285,909			69,675			70,652			69,150			71,963			281,440
Goodwill and asset impairment			-			-			-			220,026			220,026			-			-			-			10,073			10,073
Gain on sale of assets			-			-			-			(2,131	)		(2,131	)		(4,455	)		103			-			2,111			(2,241	)
Equity in (earnings) loss of unconsolidated ventures			173			935			(358	)		111			861			(595	)		(581	)		(42	)		778			(440	)
Distributions from unconsolidated ventures from cumulative share of net earnings			190			1,182			546			1,834			3,752			11			-			444			(50	)		405
Amortization of deferred gain			(1,085	)		(1,086	)		(1,086	)		(1,085	)		(4,342	)		(1,086	)		(1,085	)		(1,088	)		(1,086	)		(4,345	)
Amortization of entrance fees			(6,691	)		(5,129	)		(4,707	)		(5,498	)		(22,025	)		(5,110	)		(5,232	)		(5,742	)		(5,577	)		(21,661	)
Proceeds from deferred entrance fee revenue			2,780			5,177			7,253			7,391			22,601			4,872			5,718			12,635			15,264			38,489
Deferred income tax benefit			(30,662	)		(3,532	)		(23,049	)		(32,255	)		(89,498	)		(8,194	)		(3,323	)		(7,923	)		(12,244	)		(31,684	)
Change in deferred lease liability			5,751			5,215			4,709			4,910			20,585			4,248			4,032			3,793			3,778			15,851
Change in fair value of derivatives and amortization			45,633			(36,743	)		8,454			50,802			68,146			4,285			(7,900	)		2,478			(2,628	)		(3,765	)
Change in future service obligation			-			-			-			-			-			-			-			-			(2,342	)		(2,342	)
Non-cash stock-based compensation			8,010			8,621			6,737			5,569			28,937			6,809			6,871			7,869			5,386			26,935
Changes in operating assets and liabilities:
Accounts receivable, net			(6,392	)		(2,067	)		(9,706	)		(6,985	)		(25,150	)		(3,118	)		79			14,273			550			11,784
Prepaid expenses and other assets, net			2,515			12,164			(9,037	)		(18,306	)		(12,664	)		(4,602	)		(4,623	)		(11,859	)		(7,342	)		(28,426	)
Accounts payable and accrued expenses			(5,083	)		(11,080	)		19,214			12,377			15,428			4,966			6,847			17,744			(8,270	)		21,287
Tenant refundable fees and security deposits			1,184			184			(1,807	)		(854	)		(1,293	)		(370	)		(11,706	)		(2,221	)		(2,473	)		(16,770	)
Deferred revenue			3,081			(5,747	)		(726	)		1,206			(2,186	)		15,057			(6,747	)		(6,499	)		5,782			7,593
Net cash provided by operating activities			40,629			36,095			30,630			29,413			136,767			68,757			44,315			72,900			51,248			237,220
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			-			591			370			2,441
Increase in cash and escrow deposits — restricted			(20,663	)		16,830			(3,962	)		(13,965	)		(21,760	)		(57,897	)		4,030			(827	)		(9,846	)		(64,540	)
Net proceeds from sale of assets			-			-			-			2,935			2,935			-			210			-			14,731			14,941
Distributions received from unconsolidated ventures			-			154			146			3,616			3,916			525			265			179			92			1,061
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	)		(24,573	)		(29,946	)		(117,453	)
Acquisition of assets, net of related payables and cash received			(745	)		(462	)		(3,898	)		(1,626	)		(6,731	)		-			(190	)		(1,037	)		(202,910	)		(204,137	)
Payment on (issuance of) notes receivable, net			10,112			29,549			-			(299	)		39,362			(36	)		(759	)		205			82			(508	)
Investment in unconsolidated ventures			(356	)		(137	)		(670	)		(1,616	)		(2,779	)		(1,106	)		-			(140	)		-			(1,246	)
Proceeds from sale leaseback transaction			-			-			-			-			-			9,166			-			-			-			9,166
Proceeds from sale of unconsolidated venture			-			-			4,165			-			4,165			8,843			(12	)		-			12			8,843
Net cash (used in) provided by investing activities			(56,102	)		4,588			(50,186	)		(64,739	)		(166,439	)		(72,516	)		(25,899	)		(25,602	)		(227,415	)		(351,432	)
Cash Flows from Financing Activities
Proceeds from debt			288,479			155,868			23,422			43,575			511,344			26,521			23,998			17,467			89,053			157,039
Repayment of debt and capital lease obligations			(181,327	)		(42,865	)		(5,018	)		(26,279	)		(255,489	)		(10,403	)		(5,330	)		(5,461	)		(11,393	)		(32,587	)
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	)		-			-			-			-			-
Payment of financing costs, net of related payables			(853	)		(12,571	)		(296	)		(572	)		(14,292	)		(6,895	)		(432	)		69			(1,442	)		(8,700	)
Proceeds from public equity offering, net			-			-			-			-			-			-			163,908			(81	)		(56	)		163,771
Cash portion of loss on extinguishment of debt			(812	)		(231	)		(197	)		-			(1,240	)		-			-			-			-			-
Other			(403	)		(400	)		(1,075	)		(1,096	)		(2,974	)		(279	)		(197	)		(237	)		(218	)		(931	)
Refundable entrance fees:
Proceeds from refundable entrance fees			3,492			7,420			4,273			4,686			19,871			3,638			4,098			9,296			13,354			30,386
Refunds of entrance fees			(3,632	)		(4,843	)		(5,856	)		(4,819	)		(19,150	)		(5,836	)		(6,357	)		(4,649	)		(6,074	)		(22,916	)
Recouponing and payment of swap termination			(23,942	)		(3,180	)		-			(31,018	)		(58,140	)		-			-			-			-			-
Purchase of treasury stock			-			(20,020	)		(9,167	)		-			(29,187	)		-			-			-			-			-
Net cash provided by (used in) financing activities			34,105			(99,777	)		14,999			33,414			(17,259	)		2,293			24,688			16,404			83,224			126,609
Net increase (decrease) in cash and cash equivalents			18,632			(59,094	)		(4,557	)		(1,912	)		(46,931	)		(1,466	)		43,104			63,702			(92,943	)		12,397
Cash and cash equivalents at beginning of period			100,904			119,536			60,442			55,885			100,904			53,973			52,507			95,611			159,313			53,973
Cash and cash equivalents at end of period		$	119,536		$	60,442		$	55,885		$	53,973		$	53,973		$	52,507		$	95,611		$	159,313		$	66,370		$	66,370