Brookdale Senior Living (BKD) 8-K Brookdale Announces Second Quarter 2010 Results and Record CFFO of $57.0 Million

Brookdale Senior Living Inc.

Corporate Overview - selected financial information

As of June 30, 2010

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 564 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	Percentage of Q2 2010 Revenues	Percentage of Q2 2010 Facility Operating Income	Percentage of YTD 2010 Revenues	Percentage of YTD 2010 Facility Operating Income
Owned	190	20,638	43.5%	42.6%	43.4%	42.1%
Leased	355	27,432	56.2%	56.7%	56.3%	57.2%
Managed	19	3,788	0.3%	0.7%	0.3%	0.7%
Total	564	51,858	100.0%	100.0%	100.0%	100.0%
Operating Type
Retirement Centers	80	14,832	24.1%	28.1%	24.1%	28.1%
Assisted Living	429	21,158	46.3%	46.9%	46.3%	46.9%
CCRCs	36	12,080	29.3%	24.3%	29.3%	24.3%
Managed	19	3,788	0.3%	0.7%	0.3%	0.7%
Total	564	51,858	100.0%	100.0%	100.0%	100.0%

CFFO Per Share ($)
($ except where indicated)	FY 2009										FY 2010
		Q1		Q2		Q3		Q4	Full Year(1)			Q1		Q2
Reported CFFO	$	0.49	$	0.50	$	0.41	$	0.39	$	1.79	$	0.46	$	0.48
Add: integration and transaction-related costs		-		-		0.02		0.03		0.05		-		-
Adjusted CFFO	$	0.49	$	0.50	$	0.43	$	0.42	$	1.84	$	0.46	$	0.48
Weighted Average Shares		101,738		106,042		118,455		118,653				119,315		119,721
(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 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.

Operating Segment Information

As of June 30, 2010

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.

	FY 2009															FY 2010
		Q1			Q2			Q3			Q4		Full Year				Q1			Q2
Retirement Centers
Number of communities (period end)		77			77			77			80			80			80			80
Total average units(1)		14,116			14,117			14,114			14,203			14,137			14,737			14,737
Weighted average unit occupancy		87.4	%		86.9	%		87.3	%		87.2	%		87.2	%		87.0	%		87.1	%
Average monthly revenue per unit(2)	$	3,331		$	3,366		$	3,361		$	3,373		$	3,358		$	3,419		$	3,434
Assisted Living
Number of communities (period end)		414			413			413			430			430			429			429
Total average units(1)		20,084			20,073			20,062			20,600			20,205			21,152			21,115
Weighted average unit occupancy		86.2	%		86.0	%		87.0	%		87.9	%		86.8	%		87.6	%		88.0	%
Average monthly revenue per unit(2)	$	4,412		$	4,417		$	4,376		$	4,390		$	4,398		$	4,526		$	4,571
CCRCs
Number of communities (period end)		35			35			35			36			36			36			36
Total average units(1)		10,632			10,675			10,816			11,162			10,821			11,287			11,276
Weighted average unit occupancy		86.5	%		85.7	%		85.1	%		83.7	%		85.2	%		84.0	%		84.2	%
Average monthly revenue per unit(2)	$	5,030		$	5,153		$	5,239		$	5,249		$	5,168		$	5,421		$	5,437

Consolidated Totals
Number of communities (period end)		526			525			525			546			546			545			545
Total average units(1)		44,832			44,865			44,992			45,965			45,163			47,176			47,128
Weighted average unit occupancy		86.6	%		86.2	%		86.7	%		86.7	%		86.6	%		86.6	%		86.8	%
Average monthly revenue per unit(2)	$	4,215		$	4,258		$	4,259		$	4,275		$	4,252		$	4,386		$	4,415

Management Services
Number of communities (period end)	22		21		22		19		19		19		19
Total average units(1)	4,348		4,309		4,432		3,788		3,788		3,788		3,682
Weighted average occupancy	86.3	%	84.6	%	83.9	%	84.4	%	84.8	%	83.4	%	83.4	%

(1)	Total average units operated represent the average units operated during the period, excluding equity homes.
(2)	Average monthly revenue per unit represents the average of the total monthly revenues, excluding amortization of entrance fees, divided by average occupied units.

Brookdale Senior Living Inc.

Same Community, Capital Expenditure and ISC Information

As of June 30, 2010

Same Community Information

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

	Three Months Ended June 30,									Twelve Months Ended June 30,
	2010			2009			% Change			2010			2009			% Change
Revenue	$	488,725		$	475,050			2.9	%	$	1,929,641		$	1,868,893			3.3	%
Operating Expense		313,222			300,596			4.2	%		1,249,343			1,218,658			2.5	%
Facility Operating Income	$	175,503		$	174,454			0.6	%	$	680,298		$	650,235			4.6	%
Facility Operating Margin		35.9	%		36.7	%		-0.8	%		35.3	%		34.8	%		0.5	%
# Communities		514			514						514			514
Avg. Period Occupancy		87.3	%		86.7	%		0.6	%		87.3	%		87.5	%		-0.2	%
Avg. Mo. Revenue/unit	$	4,332		$	4,237			2.2	%	$	4,273		$	4,130			3.5	%

Schedule of Capital Expenditures
($ in 000s)
	Three Months Ended June 30,
	2010			2009
Type
Recurring	$	8,241		$	4,559
Reimbursements		(671	)		(671	)
Net Recurring		7,570			3,888
Corporate (1)		3,528			(466	)
EBITDA-enhancing (2)		7,770			2,532
Development (3)		2,869			22,818
Reimbursements (4)		(2,600	)		(25,756	)
Net Development		269			(2,938	)
Net Total Capital Expenditures (5)	$	19,137		$	3,016
(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
(5) Approximately $7.6 million and $7.5 million of expense was recognized during the three months ended June 30, 2010 and 2009, respectively, for normal repairs and maintenance and capital spend under $1,500 per invoice, except for unit turnovers.

Information on Ancillary Services
	Three Months Ended June 30,
	2010		2009
Brookdale Units Served:
Therapy
Legacy ARC		12,306		12,588
Total		37,838		35,397
Home Health
Legacy ARC		9,106		8,796
Total		24,011		17,119
Avg. Mo. NOI/Occupied Unit
Legacy ARC	$	319	$	278
Total	$	268	$	200

Brookdale Senior Living Inc.

Capital Structure - selected financial information

As of June 30, 2010

($ 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	$	4,123		6.61	%	$	-		$	4,123		6.61	%	$	10,574		8.34	%	$	14,697
2011		257,631		5.50	%		-			257,631		5.50	%		23,629		8.35	%		281,260
2012		884,929		3.47	%		-			884,929		3.47	%		25,945		8.36	%		910,874
2013		642,298		4.70	%		-			642,298		4.70	%		25,596		8.46	%		667,894
2014		144,014		5.86	%		-			144,014		5.86	%		29,079		8.47	%		173,093
Thereafter		325,909		4.76	%		-			325,909		4.76	%		226,947		8.93	%		552,856
Total	$	2,258,904		4.39	%	$	-		$	2,258,904		4.39	%	$	341,770		8.76	%	$	2,600,674
	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	$	4,123		6.61	%	$	-		$	4,123		6.61	%	$	10,574		8.34	%	$	14,697
2011		133,774		2.37	%		-			133,774		2.37	%		23,629		8.35	%		157,403
2012		886,680		3.48	%		-			886,680		3.48	%		24,477		8.41	%		911,157
2013		639,054		5.36	%		-			639,054		5.36	%		25,596		8.46	%		664,650
2014		4,014		6.58	%		-			4,014		6.58	%		29,079		8.47	%		33,093
Thereafter		591,259		5.15	%		-			591,259		5.15	%		228,415		8.92	%		819,674
Total	$	2,258,904		4.39	%	$	-		$	2,258,904		4.39	%	$	341,770		8.76	%	$	2,600,674

Coverage Ratios

	Six months ended June 30, 2010
				Interest/Cash Lease
	Facilities	FOI	Adj. FOI **	Payments	Coverage
Owned Communities	190	162,140	134,807	51,969	2.6x
Leased Communities *	355	220,116	184,505	147,512	1.3x

*  The leased communities include the capital leases.

**  Adjusted for 5% management fee and annual capital expenditures @ $350/unit.

Debt Amortization

		Six months ended June 30,
		2010	2009
Scheduled Debt Amortization	$	3,442	$                            1,897
Lease Financing Debt Amortization - FMV or no Purchase Option (4)		4,392	3,578
Lease Financing Debt Amortization - Bargain Purchase Option		5,585	5,258
Total Debt Amortization	$	13,419	$                         10,733

Line Availability

($000s)	Jun-09	Sep-09	Dec-09	Mar-10	Jun-10
Revolver Balance	$                 -	$              -	$                                     -	$                         15,000	$                  -
Letters of Credit Outstanding (7)	23,562	23,657	17,347	-	-
Ending Line Balance	$        23,562	$    23,657	$                            17,347	$                         15,000	$                  -
Cash and cash equivalents	95,611	159,313	66,370	65,613	51,345
Total Line Capacity	75,000	75,000	75,000	91,910	120,000
Total Liquidity (Line Availability + Cash)	$      147,049	$  210,656	$                          124,023	$                       142,523	$       171,345
Letters of credit outstanding on line (7)	$        23,562	$    23,657	$                            17,347	$                                  -	$                  -
Other letters of credit	48,475	48,475	48,770	66,874	69,222
Total letters of credit outstanding(7)	$        72,037	$     72,132	$                             66,117	$                        66,874	$        69,222

Leverage Ratios
				Annualized
	Balance			Leverage
Mortgage Debt (1)	$	2,258,904
Capital Leases		341,770
Total Property-Level Debt	$	2,600,674			6.6	x
Plus: Line of Credit (cash borrowings)		-
Less: Unrestricted Cash		(51,345	)
Less: Cash held as collateral against existing debt		(60,647	)
Total Debt	$	2,488,682			6.3	x
2010 YTD annualized Adjusted EBITDA	$	393,196
Annualized Cash Lease Expense multiplied by 8		2,116,774
Total Adjusted Debt	$	4,605,456			7.0	x
2010 YTD annualized Adjusted EBITDAR	$	657,793
Debt Structure
				weighted
	Balance			rate (2)
Fixed Rate Mortgage Debt	$	1,155,250			6.03	%
Variable Rate Mortgage Debt (1)		1,103,655			2.67	%
Capital Leases		341,770			8.76	%
Line of Credit (cash borrowings)		-			0.00	%
Total Debt	$	2,600,674
	Balance			% of total
Variable Rate debt with Interest Rate Swaps (5)	$	351,840			31.9	%
Variable Rate debt with Interest Rate Caps (1) (6)		751,815			68.1	%
Variable Rate debt - Unhedged		-			0.0	%
Total Variable Rate Mortgage Debt	$	1,103,655			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 5.97% is materially above current market rates, therefore caps have no impact on consolidated interest expense for given period.

(7) Bank of America Line of Credit was paid off 02/23/10; the retired Line provided $25 million Letter of Credit capacity.

Brookdale Senior Living Inc.

CFFO Reconciliation

As of June 30, 2010

($ in 000s)

CFFO Calculation

	Three Months Ended June 30,
	2010			2009
Net cash provided by operating activities (includes non-refundable entrance fees)	$	67,642		$	44,315
Add: Changes in operating assets and liabilities (eliminates cash flow effect)		3,464			16,150
Add: Refundable entrance fees received		6,619			4,098
Less: Entrance fee refunds disbursed		(5,360	)		(6,357	)
Less: First generation entrance fees		(5,596	)		-
Less: Recurring capital expenditures, net		(7,570	)		(3,888	)
Less: Lease financing debt amortization with fair market value or no purchase options		(2,221	)		(1,798	)
Cash From Facility Operations	$	56,978		$	52,520

Revenue Reconciliation

	FY 2009															FY 2010
		Q1			Q2			Q3			Q4		Full Year				Q1			Q2
Revenue reconciliation excl. entrance fee amortization
Average monthly revenue per quarter		4,215			4,258			4,259			4,275			4,252			4,386			4,415
Average monthly units (excluding equity homes) available		44,849			44,884			44,966			45,977			45,142			47,179			47,119
Average occupancy for the quarter		86.6	%		86.2	%		86.7	%		86.7	%		86.6	%		86.6	%		86.8	%
Resident fee revenue	$	491,119		$	494,227		$	498,114		$	511,228		$	1,994,688		$	537,290		$	541,773
Add:  management fee revenue		1,717			1,298			1,987			1,717			6,719			1,395			1,412
Total revenues excluding entrance fee amortization	$	492,836		$	495,525		$	500,101		$	512,945		$	2,001,407		$	538,685		$	543,185

CFFO Reconciliation to the Income Statement
Resident fee revenue	$	497,946		$	500,757		$	505,843		$	518,522		$	2,023,068		$	544,424		$	548,972
Less:  Entrance fee amortization		(5,110	)		(5,232	)		(5,742	)		(5,577	)		(21,661	)		(5,739	)		(5,787	)
Adjusted revenues		492,836			495,525			500,101			512,945			2,001,407			538,685			543,185
Less:  Facility operating expenses		(318,112	)		(316,586	)		(328,939	)		(340,683	)		(1,304,320	)		(355,324	)		(353,051	)
Add: Loss on sale of communites, net		-			-			-			2,043			2,043			-			-
Add: Change in future service obligation		-			-			-			(2,342	)		(2,342	)		-			(1,064	)
		(318,112	)		(316,586	)		(328,939	)		(340,982	)		(1,304,619	)		(355,324	)		(354,115	)
Less:  G&A including non-cash stock expense		(33,707	)		(31,721	)		(34,720	)		(34,716	)		(134,864	)		(31,952	)		(31,834	)
Add:  G&A non-cash stock expense		6,809			6,871			7,869			5,386			26,935			4,871			5,105
Net G&A		(26,898	)		(24,850	)		(26,851	)		(29,330	)		(107,929	)		(27,081	)		(26,729	)
Less:  Facility lease expense		(67,741	)		(68,434	)		(68,036	)		(67,885	)		(272,096	)		(68,249	)		(67,175	)
Add:  Straight-line lease expense		4,248			4,032			3,793			3,778			15,851			3,136			2,161
Less:  Amortization of deferred gain		(1,086	)		(1,085	)		(1,088	)		(1,086	)		(4,345	)		(1,086	)		(1,086	)
Net lease expense		(64,579	)		(65,487	)		(65,331	)		(65,193	)		(260,590	)		(66,199	)		(66,100	)
Entrance fee receipts		8,510			9,816			11,305			13,571			43,202			12,021			9,377
Entrance fee disbursements		(5,836	)		(6,357	)		(4,649	)		(6,074	)		(22,916	)		(5,762	)		(5,360	)
Net entrance fees		2,674			3,459			6,656			7,497			20,286			6,259			4,017
Adjusted EBITDA		85,921			92,061			85,636			84,937			348,555			96,340			100,258
Less:  Recurring capital expenditures, net		(2,655	)		(3,888	)		(5,495	)		(7,484	)		(19,522	)		(6,441	)		(7,570	)
Less:  Interest expense, net		(32,001	)		(33,122	)		(29,951	)		(31,441	)		(126,515	)		(32,653	)		(33,450	)
Less:  Lease financing debt amortization with fair market value or no purchase options		(1,780	)		(1,798	)		(1,793	)		(1,824	)		(7,195	)		(2,171	)		(2,221	)
Less:  Other		706			(733	)		(202	)		1,738			1,509			(678	)		(39	)
Reported CFFO	$	50,191		$	52,520		$	48,195		$	45,926		$	196,832		$	54,397		$	56,978

Add:  integration and transaction-related costs		-		-		2,200		3,554		5,754		-		-
Adjusted CFFO	$	50,191	$	52,520	$	50,395	$	49,480	$	202,586	$	54,397	$	56,978

CFFO Per Share ($)
($ except where indicated)	FY 2009										FY 2010
		Q1		Q2		Q3		Q4	Full Year(1)			Q1		Q2
Reported CFFO	$	0.49	$	0.50	$	0.41	$	0.39	$	1.79	$	0.46	$	0.48
Add:  integration and transaction-related costs		-		-		0.02		0.03		0.05		-		-
Adjusted CFFO	$	0.49	$	0.50	$	0.43	$	0.42	$	1.84	$	0.46	$	0.48
Shares used in calculation of CFFO (000's)		101,738		106,042		118,455		118,653				119,315		119,721
(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 June 30, 2010

	Q1 09		Q2 09		Q3 09		Q4 09		Q1 10		Q2 10
Ending # EF Vacant Units	475		474		536		548		547		569
# Closings	48		62		70		80		67		59
# of Refunds	67		86		67		84		77		67
Cash Basis ($000's)
Resale Receipts:
Proceeds from non-refundable entrance fees (1)(2)	4,872		5,718		8,429		8,648		6,883		5,566
Proceeds from refundable entrance fees (2)(3)	3,638		4,098		2,876		4,923		5,138		3,811
Total Cash Proceeds	8,510		9,816		11,305		13,571		12,021		9,377
Refunds of entrance fees (4)	(5,836	)	(6,357	)	(4,649	)	(6,074	)	(5,762	)	(5,360	)
Net Resale Cash Flow	2,674		3,459		6,656		7,497		6,259		4,017
Average Resale $ (excluding My Choice proceeds)	165,042		158,065		159,786		165,138		177,448		155,441
Average Refund $ (excluding My Choice refunds)	(87,104	)	(68,930	)	(68,851	)	(66,881	)	(71,039	)	(78,209	)
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 $170,000 (2)											96,730
Refund Attachments											(10,503	)
Net Cash Value											86,227
Income Statement Impact ($ 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 09		Q2 09		Q3 09		Q4 09		Q1 10		Q2 10
Amortization of entrance fees (incl. gains on terminations) (5)	(5,110	)	(5,232	)	(5,692	)	(5,361	)	(5,426	)	(5,404	)
(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 June 30, 2010

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 commu nities 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 09			Q2 09			Q3 09			Q4 09			Q1 10			Q2 10
Original ARC
Occupancy		88	%		87	%		86	%		86	%		86	%		84	%
Ending # EF Vacant Units		271			259			328			348			353			384
# EF Closings		29			33			37			61			45			36
# of EF Refunds		41			70			38			60			60			45
EF Resale Receipts		5,344			5,579			6,051			11,051			8,172			6,108
EF Refunds Paid		(3,855	)		(5,190	)		(2,838	)		(4,265	)		(4,813	)		(3,789	)
Net Resale Cash Flow		1,489			389			3,213			6,786			3,359			2,319
Average EF Resale $ (excluding My Choice proceeds)	$	166		$	169		$	164		$	177		$	179		$	169
Average EF Refund $ (excluding My Choice refunds)	$	(94	)	$	(71	)	$	(74	)	$	(63	)	$	(75	)	$	(82	)

Total NBA Communities
Occupancy		76	%		76	%		77	%		76	%		77	%		77	%
Ending # EF Vacant Units		204			215			208			200			194			185
# EF Closings		19			29			33			19			22			23
# of EF Refunds (1)		26			16			29			24			17			22
EF Resale Receipts		3,166			4,237			5,254			2,520			3,849			3,269
EF Refunds Paid (1)		(1,981	)		(1,167	)		(1,811	)		(1,809	)		(949	)		(1,571	)
Net Resale Cash Flow		1,185			3,070			3,443			711			2,900			1,698
Average EF Resale $ (excluding My Choice proceeds)	$	163		$	146		$	156		$	126		$	175		$	134
Average EF Refund $ (excluding My Choice refunds)	$	(76	)	$	(61	)	$	(62	)	$	(75	)	$	(56	)	$	(71	)

Total Consolidated EF Communities (2)
Occupancy	85	%	84	%	84	%	83	%	84	%	83	%
Ending # EF Vacant Units	475		474		536		548		547		569
# EF Closings	48		62		70		80		67		59
# of EF Refunds	67		86		67		84		77		67
EF Resale Receipts	8,510		9,816		11,305		13,571		12,021		9,377
EF Refunds Paid	(5,836	)	(6,357	)	(4,649	)	(6,074	)	(5,762	)	(5,360	)
Net Resale Cash Flow	2,674		3,459		6,656		7,497		6,259		4,017

Average EF Resale $ (excluding My Choice proceeds)	$	165		$	158		$	160		$	165		$	177		$	155
Average EF Refund $ (excluding My Choice refunds)	$	(87	)	$	(69	)	$	(69	)	$	(67	)	$	(71	)	$	(78	)
(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 June 30, 2010

($ in 000s)

Cash Flow Statements

		Q1 2009			Q2 2009			Q3 2009			Q4 2009		FY 2009				Q1 2010			Q2 2010
Cash Flows from Operating Activities
Net loss	$	(13,636	)	$	(10,530	)	$	(21,290	)	$	(20,799	)	$	(66,255	)	$	(14,295	)	$	(9,557	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Non-cash portion of loss on extinguishment of debt		-			1,740			1,178			(1,626	)		1,292			19			682
Depreciation and amortization		69,675			70,652			69,150			71,963			281,440			75,657			75,578
Goodwill and asset impairment		-			-			-			10,073			10,073			-			-
(Gain) loss on sale of assets		(4,455	)		103			-			2,111			(2,241	)		144			-
Equity in (earnings) loss of unconsolidated ventures		(595	)		(581	)		(42	)		778			(440	)		(397	)		(119	)
Distributions from unconsolidated ventures from cumulative share of net earnings		11			-			444			(50	)		405			-			375
Amortization of deferred gain		(1,086	)		(1,085	)		(1,088	)		(1,086	)		(4,345	)		(1,086	)		(1,086	)
Amortization of entrance fees		(5,110	)		(5,232	)		(5,742	)		(5,577	)		(21,661	)		(5,739	)		(5,787	)
Proceeds from deferred entrance fee revenue		4,872			5,718			12,635			15,264			38,489			9,550			8,354
Deferred income tax benefit		(8,194	)		(3,323	)		(7,923	)		(12,244	)		(31,684	)		(8,200	)		(5,743	)
Change in deferred lease liability		4,248			4,032			3,793			3,778			15,851			3,136			2,161
Change in fair value of derivatives and amortization		4,285			(7,900	)		2,478			(2,628	)		(3,765	)		2,640			2,207
Change in future service obligation		-			-			-			(2,342	)		(2,342	)		-			(1,064	)
Non-cash stock-based compensation		6,809			6,871			7,869			5,386			26,935			4,871			5,105
Changes in operating assets and liabilities:
Accounts receivable, net		(2,409	)		797			15,138			2,986			16,512			(5,242	)		4,367
Prepaid expenses and other assets, net		(5,311	)		(5,341	)		(12,724	)		(9,778	)		(33,154	)		(9,171	)		(5,160	)
Accounts payable and accrued expenses		4,966			6,847			17,744			(8,270	)		21,287			(11,825	)		2,035
Tenant refundable fees and security deposits		(370	)		(11,706	)		(2,221	)		(2,473	)		(16,770	)		(1,298	)		(971	)
Deferred revenue		15,057			(6,747	)		(6,499	)		5,782			7,593			8,365			(3,735	)
Net cash provided by operating activities		68,757			44,315			72,900			51,248			237,220			47,129			67,642
Cash Flows from Investing Activities
Decrease in lease security deposits and lease acquisition deposits, net		1,480			-			591			370			2,441			801			-
Increase in cash and escrow deposits — restricted		(57,897	)		4,030			(827	)		(9,846	)		(64,540	)		(30,556	)		(5,804	)
Net proceeds from sale of assets		-			210			-			14,731			14,941			1,487			-
Distributions received from unconsolidated ventures		525			265			179			92			1,061			47			-
Additions to property, plant, and equipment and leasehold intangibles, net of related payables		(33,491	)		(29,443	)		(24,573	)		(29,946	)		(117,453	)		(23,102	)		(22,408	)
Acquisition of assets, net of related payables and cash received		-			(190	)		(1,037	)		(202,910	)		(204,137	)		-			(21,809	)
Payment on (issuance of) notes receivable, net		(36	)		(759	)		205			82			(508	)		512			(343	)
Investment in unconsolidated ventures		(1,106	)		-			(140	)		-			(1,246	)		(848	)		(205	)
Proceeds from sale leaseback transaction		9,166			-			-			-			9,166			-			-
Proceeds from sale of unconsolidated venture		8,843			(12	)		-			12			8,843			-			-
Other		-			-			-			-			-			(316	)		-
Net cash (used in) provided by investing activities		(72,516	)		(25,899	)		(25,602	)		(227,415	)		(351,432	)		(51,975	)		(50,569	)
Cash Flows from Financing Activities
Proceeds from debt		26,521			23,998			17,467			89,053			157,039			49,108			119,576
Repayment of debt and capital lease obligations		(10,403	)		(5,330	)		(5,461	)		(11,393	)		(32,587	)		(58,923	)		(134,031	)
Proceeds from line of credit		60,446			-			-			-			60,446			45,000			15,000
Repayment of line of credit		(64,899	)		(155,000	)		-			-			(219,899	)		(30,000	)		(30,000	)
Payment of financing costs, net of related payables		(6,895	)		(432	)		69			(1,442	)		(8,700	)		(2,776	)		(3,268	)
Proceeds from public equity offering, net		-			163,908			(81	)		(56	)		163,771			-			-
Cash portion of loss on extinguishment of debt		-			-			-			-			-			(179	)		-
Other		(279	)		(197	)		(237	)		(218	)		(931	)		(181	)		137
Refundable entrance fees:
Proceeds from refundable entrance fees		3,638			4,098			9,296			13,354			30,386			8,442			6,619
Refunds of entrance fees		(5,836	)		(6,357	)		(4,649	)		(6,074	)		(22,916	)		(5,762	)		(5,360	)
Recouponing and payment of swap termination		-			-			-			-			-			(640	)		(14	)
Net cash provided by (used in) financing activities		2,293			24,688			16,404			83,224			126,609			4,089			(31,341	)
Net increase (decrease) in cash and cash equivalents		(1,466	)		43,104			63,702			(92,943	)		12,397			(757	)		(14,268	)
Cash and cash equivalents at beginning of period		53,973			52,507			95,611			159,313			53,973			66,370			65,613
Cash and cash equivalents at end of period	$	52,507		$	95,611		$	159,313		$	66,370		$	66,370		$	65,613		$	51,345