NASHVILLE, Tenn., Nov. 1, 2016 /PRNewswire/ -- Brookdale Senior
Living Inc. (NYSE: BKD) ("Brookdale" or the "Company") today
reported financial and operating results for the third quarter of
2016.
- Weighted average same-community senior housing occupancy
increased 40 basis points from the second quarter of 2016, and
senior housing same community average monthly revenue per occupied
unit increased 3.2% from the third quarter of 2015.
- Net cash provided by operating activities was $99.4 million for the third quarter of 2016, an
increase of 8.8% from the third quarter of 2015.
- The Company's CFFO(1) was $85.2 million in the third quarter of 2016, an
increase of 67.8% from the Company's CFFO of $50.8 million in the prior year period. The
Company's proportionate share of CFFO of unconsolidated
ventures(1) was $13.8
million for the third quarter of 2016, an increase of 5.7%
compared to $13.1 million for the
prior year period.
- The Company's CFFO less Non-Development CapEx(1) for
the third quarter of 2016 increased $60.0
million on a year-over-year basis and was $46.5 million for the third quarter of 2016
versus a negative $13.5 million for
the third quarter of 2015.
- Continuing its portfolio optimization initiative, the Company
completed the sale of 32 owned communities since the beginning of
the third quarter of 2016, and announced today its entry into
agreements to terminate triple-net leases with respect to 97
communities, 68 of which are expected to be contributed into
existing or newly formed unconsolidated ventures and managed by the
Company.
- The Company announces that its Board has authorized a
$100 million share repurchase program
and has appointed Dan Decker as
Executive Chairman.
- The Company revises its 2016 full-year guidance.
(1) Cash From Facility Operations
("CFFO") and CFFO less Non-Development CapEx are financial
measures not calculated in accordance with GAAP. The
Company has changed its definition and calculation of CFFO from
prior periods, which no longer will include the Company's
proportionate share of CFFO of unconsolidated ventures. Prior
period amounts of the Company's CFFO, Adjusted CFFO and CFFO less
Non-Development CapEx have been recast to reflect the Company's
CFFO, Adjusted CFFO and CFFO less Non-Development CapEx separate
from, and exclusive of, the Company's proportionate share of CFFO
of unconsolidated ventures. See "Reconciliation of Non-GAAP
Financial Measures" below for more information regarding this
change and other important information regarding the use of the
Company's non-GAAP financial measures.
Andy Smith, Brookdale's President
and CEO, said, "We are pleased with the improvement in our cash
flows during the third quarter. We also made significant progress
since the end of the prior quarter in our efforts to optimize our
portfolio in order to simplify and streamline our business, to
increase the quality and durability of our cash flow, to reduce our
debt and lease leverage and to improve our liquidity. We
continue to grow the cash flow of the Company – bolstered by a
planned reduction in capital expenditures, reduction of overhead
and same community operating income growth of 1.8%.
"We continue to make progress with our portfolio optimization
efforts and expect to continue to be aggressive at looking for
opportunities to dispose of assets or work with our REIT partners
to exit or restructure unfavorable leases. Given the
increased liquidity provided by our dispositions, we have paid down
significant debt, and the Board has authorized a $100 million share repurchase program.
"We grew average occupancy by 40 basis points
sequentially. However, during the quarter we saw an
unprecedented number of new competitive openings in our mid-sized
markets that caused us to fall short of our revenue
expectations. We are focused on regaining market share and
improved profitability through providing consistent quality
service, positioning our products properly and improving sales
execution."
Financial Results
Total revenue for the third quarter of 2016 was $1.25 billion compared to $1.24 billion for the prior-year period.
During the fifteen months ended September 30, 2016, the Company disposed of a
total of 57 communities, either through sales or lease
terminations. The revenue impact from disposing these
communities was $16.4 million in the
third quarter of 2016.
Resident fees were $1.0 billion
for the third quarter of 2016, an increase of 0.3% over the third
quarter of 2015. Average monthly revenue per occupied unit
for the consolidated senior housing portfolio was $4,465 in the third quarter of 2016, an increase
of 3.8% compared with the third quarter of 2015. Weighted
average occupancy for all consolidated communities during the third
quarter of 2016 was 86.2%, compared to 86.7% during the third
quarter of 2015.
Facility operating expenses for the third quarter of 2016 were
$704.2 million, an increase of 0.6%
from the third quarter of 2015. Consolidated operating margin
was 33.5% for the third quarter of 2016 versus 33.7% for the third
quarter of 2015. The expense impact from disposing of
the 57 communities was $13.8 million
in the third quarter of 2016.
Net loss for the third quarter of 2016 was $51.7 million, versus net loss of $68.3 million for the third quarter of 2015.
Net cash provided by operating activities for the third quarter
of 2016 was $99.4 million, an
increase of $8.1 million, or 8.8%,
compared with the third quarter of 2015.
Weighted average shares outstanding were 185.9 million for the
third quarter of 2016 compared to weighted average shares
outstanding of 184.6 million for the prior year quarter.
Non-GAAP Financial Measures
Adjusted EBITDA, CFFO, Adjusted CFFO, and CFFO less
Non-Development CapEx are financial measures that are not
calculated in accordance with GAAP. The Company strongly
urges you to review the information under "Reconciliation of
Non-GAAP Financial Measures" below for the Company's definitions of
each of these non-GAAP financial measures, a detailed description
of why the Company believes such measures are useful, the
limitations of each measure, and a reconciliation of Adjusted
EBITDA from the Company's net income (loss), a reconciliation of
the Company's CFFO, Adjusted CFFO, and CFFO less Non-Development
CapEx from the Company's net cash provided by (used in) operating
activities, and a reconciliation of the Company's proportionate
share of CFFO of unconsolidated ventures from such ventures' net
cash provided by (used in) operating activities.
The Company changed its definition and calculation of Adjusted
EBITDA when it reported results for the second quarter of
2016. Prior period amounts of Adjusted EBITDA presented
herein have been recast to conform to the new definition. See
"Reconciliation of Non-GAAP Financial Measures" below for a
description of such changes to the definition of Adjusted
EBITDA.
Following receipt of additional guidance from the SEC regarding
the Company's presentation of non-GAAP financial measures, the
Company has changed its definition and calculation of CFFO from
prior periods. The Company's definition and calculation of
CFFO no longer will include the Company's proportionate share of
CFFO of unconsolidated ventures. To conform to this new
definition, prior period amounts of the CFFO, Adjusted CFFO and
CFFO less Non-Development CapEx have been recast to reflect the
Company's CFFO, Adjusted CFFO and CFFO less Non-Development CapEx
separate from, and exclusive of, the Company's proportionate share
of CFFO of unconsolidated ventures.
Adjusted EBITDA was $202.3 million
in the third quarter of 2016, compared to $173.5 million for the third quarter of
2015. Adjusted EBITDA was $209.4
million in the third quarter of 2016 compared to
$209.3 million in the third quarter
of 2015, excluding integration, transaction, transaction-related
and strategic project costs of $7.1
million and $35.8 million,
respectively.
The Company's CFFO was $85.2
million in the third quarter of 2016, an increase of 67.8%
from the Company's CFFO of $50.8
million in the prior year period. The Company's
proportionate share of CFFO of unconsolidated ventures was
$13.8 million for the third quarter
of 2016, an increase of 5.7% compared to $13.1 million for the prior year
period.
The Company's Adjusted CFFO was $94.0
million for the third quarter of 2016, a decrease of
$0.7 million or 0.8%, compared with
the third quarter of 2015. The Company's Adjusted CFFO for
these periods represents the Company's CFFO excluding $8.8 million and $42.5
million for the third quarter of 2016 and 2015,
respectively, of integration, transaction, transaction-related and
strategic project costs.
The Company's CFFO less Non-Development CapEx for the third
quarter of 2016 increased $60.0
million on a year-over-year basis and was $46.5 million for the third quarter of 2016
versus a negative $13.5 million for
the third quarter of 2015.
Operating Activities
The Company reports information on five segments. Three
segments (Retirement Centers, Assisted Living and CCRCs – Rental)
constitute the Company's consolidated senior housing
portfolio. The Ancillary Services segment includes the
Company's outpatient therapy, home health and hospice
services. The Management Services segment includes the
services provided to unconsolidated communities that are operated
under management agreements.
Senior Housing
Revenue for the consolidated senior housing portfolio was
$925.6 million for the third quarter
of 2016, an increase of 0.3% from the third quarter of 2015.
During the fifteen months ended September
30, 2016, the Company disposed of a total of 57 communities,
either through sales or lease terminations. The revenue impact from
disposing of these communities was $16.4
million in the third quarter of 2016.
Same community revenue for the consolidated senior housing
portfolio for the three months ended September 30, 2016 increased 2.0% over the
corresponding period in 2015. Same community average monthly
revenue per occupied unit for senior housing increased 3.2% in the
third quarter of 2016 from the third quarter of 2015.
Facility operating expenses were $601.6
million for the third quarter of 2016, an increase of 0.4%
from the third quarter of 2015. Consolidated same community
operating expenses for the third quarter of 2016 increased by 2.1%
over the third quarter of 2015. Operating expenses increased over
the prior year period primarily due to increases in salaries and
wages from wage rate increases – partially offset by the impact of
disposition and lease termination activity since the beginning of
the prior year period – and a decrease in insurance expense.
Insurance expenses decreased by $13.9
million on a year over year basis due to changes in
estimates related to general liability and professional liability
and workers compensation expense, most of which related to the same
community portfolio.
Operating income for the senior housing portfolio increased by
0.3% from the third quarter of 2015, to $324.0 million for the third quarter of
2016. Same community operating income for the senior housing
portfolio for the third quarter of 2016 increased by 1.8% from the
third quarter of 2015, to $314.4
million.
Brookdale Ancillary Services
Revenue for the Company's ancillary services segment decreased
$0.4 million, or 0.4%, to
$117.3 million for the third quarter
of 2016 versus the prior year third quarter. The revenue
decrease was primarily due to lower therapy service volume,
partially offset by higher home health census. Ancillary
services operating expenses for the third quarter of 2016 increased
$2.4 million, or 2.4%, over the third
quarter of 2015, in connection with higher home health census and
increased salaries and wage expense. As a result, ancillary
services operating income for the third quarter of 2016 was
$14.6 million, a decrease of 16.1%
versus the third quarter of 2015, with operating margin at 12.5%
for the third quarter of 2016.
Liquidity
Total liquidity for the Company was $383.8 million at September 30, 2016, an increase of $77.5 million from June
30, 2016. Liquidity at September 30, 2016 included $74.2 million of unrestricted cash and cash
equivalents and $309.6 million of
availability on the Company's secured credit facility.
Portfolio Optimization Activities
The Company continues to actively explore opportunities to
optimize its portfolio through dispositions of owned and leased
communities in order to simplify and streamline its business, to
increase the quality and durability of cash flow, and to reduce
debt and lease leverage.
Dispositions of Owned Communities
The Company began the third quarter of 2016 with 60 communities
classified as assets held for sale with a carrying value totaling
$354.6 million, and $154.7 million of associated mortgage debt
was included in the current portion of the Company's long-term
debt. During the third quarter of 2016, the Company sold 32
of these communities (1,771 units) for an aggregate selling price
of $177.5 million. The proceeds
were primarily used to pay off the associated mortgage debt and to
pay down the Company's secured credit facility.
As of September 30, 2016, the
remaining 28 communities (2,248 units) were classified as held for
sale with a carrying value of $173.5
million, and $106.9 million of
associated mortgage debt was included in the current portion of
long-term debt. The closings of the sales of the 28 remaining
communities held for sale are subject to receipt of regulatory
approvals and satisfaction of other customary closing conditions,
and are expected to occur in the next 12 months; however, there can
be no assurance that the transactions will close or, if they do,
when the actual closings will occur.
Dispositions and Restructurings of Leased Communities
By separate press release issued today, the Company announced
that it has entered into a definitive agreement with affiliates of
Blackstone Real Estate Partners VIII L.P. (collectively
"Blackstone") to acquire a 15% ownership interest in a joint
venture that intends to acquire a portfolio of 64 communities
currently leased to the Company by HCP, Inc. ("HCP"). Upon
completion of the acquisition of the assets, the Company will
manage the communities on behalf of the joint venture.
Additionally, the Company announced that it has entered into a
definitive agreement with HCP for a multi-part transaction
involving, among other things, the termination of leases for 29
communities, the contribution of four communities currently leased
to the Company by HCP into an existing RIDEA joint venture with
HCP, and the financing of certain communities owned by the entry
fee CCRC venture between HCP and the Company. Please see the
separate press release issued today by the Company announcing such
transactions and the presentation placed on the Company's website,
www.brookdale.com, for more details.
Share Repurchase
The Company's Board of Directors has approved a share repurchase
program that authorizes the Company to purchase up to $100.0 million in the aggregate of the Company's
common stock, which replaces the prior repurchase authorization
approved by the Board in 2011.
The share repurchase program is intended to be implemented
through purchases made from time to time using a variety of
methods, which may include open market purchases, privately
negotiated transactions or block trades, or by any combination of
such methods, in accordance with applicable insider trading and
other securities laws and regulations.
The size, scope and timing of any purchases will be based on
business, market and other conditions and factors, including price,
regulatory and contractual requirements, and capital availability.
Repurchases of common stock may also be made under a Rule 10b5-1
plan, which would permit common stock to be repurchased when the
Company might otherwise be precluded from doing so under insider
trading laws or during periods when it would normally not be active
in the market due to its internal trading blackout period. The
repurchase program does not obligate the Company to acquire any
particular amount of common stock and the program may be suspended,
modified or discontinued at any time at the Company's discretion
without prior notice. Shares of stock repurchased under the program
will be held as treasury shares.
Executive Chairman
The Company also announced that its Non-Executive Chairman
Daniel A. Decker has been appointed
to serve as Brookdale's Executive Chairman. As Executive Chairman,
Mr. Decker will serve as a member of the Company's executive team
with a special focus on capital allocation, portfolio
rationalization, strategic growth and shareholder engagement, and
will provide counsel and advice to the Company's management team.
Mr. Decker will work closely with T. Andrew
Smith, the Company's President and Chief Executive Officer,
and the other members of the Company's executive leadership team to
assist in their efforts to create shareholder value. Mr. Decker has
served as the Company's Non-Executive Chairman since joining the
Company's Board of Directors in 2015.
"We have previously stated that 2016 was a turnaround year for
Brookdale. While we have made significant progress toward
optimizing our portfolio, significantly improving cash flow,
improving execution, and simplifying and streamlining our business,
the dynamics in the competitive marketplace are impacting our
ability to grow revenue as quickly as we expected. I look forward
to working closely with Andy and the rest of the management team
during this critical transition period to grow revenue and improve
our business," said Mr. Decker. "The other members of our Board and
I are confident that we have the right executive team in place and
that we are taking the actions necessary to improve the quality,
sustainability and durability of our cash flow. I want to assure
shareholders that our Board is active and engaged, and we are laser
focused on increasing the amount of our cash flow and building
value for our shareholders."
"On behalf of the Company's management team, we look forward to
the opportunity to work with Dan in this new capacity and to draw
on his valuable insight and experience in the senior living
industry as we build on the improvements we have made in our cash
flow," said Mr. Smith.
2016 Outlook
The Company is revising its 2016 full-year guidance for senior
housing and ancillary services revenue, Adjusted EBITDA (excluding
integration, transaction, transaction-related and strategic project
costs) and Adjusted CFFO to reflect the Company's expectations
based on year-to-date performance and changes in the competitive
environment. In addition, the Company is recasting its
Adjusted CFFO guidance range to reflect the Company's Adjusted CFFO
separate from, and exclusive of, the Company's proportionate share
of CFFO of unconsolidated ventures. The following table
reflects the Company's revised guidance compared to the Company's
guidance provided on August 8,
2016.
|
Guidance as
of
August 8,
2016
|
Revised
Guidance as
of
November 1,
2016
|
|
|
|
Senior housing and
ancillary services revenue
|
$4.2 to $4.3
billion
|
$4.15 to $4.20
billion
|
|
|
|
Adjusted EBITDA,
excluding integration, transaction,
transaction-related and strategic project
costs
|
$870 to $890
million
|
$818 to $828
million
|
|
|
|
Adjusted CFFO
(as previously defined)
|
$455 to $475
million
|
N/A
|
|
|
|
Adjusted
CFFO
(as newly defined)
|
N/A
|
$365 to $375
million
|
|
|
|
The Company's
proportionate share of CFFO of
unconsolidated ventures
|
N/A
|
$55 to $60
million
|
|
|
|
The Company is revising its full year capital expenditures
expectations (excluding recurring capital expenditures that are
included in CFFO) to be in a range of $200
million to $210 million. The foregoing guidance
excludes the potential impact of any acquisition or disposition
activity other than the planned or completed disposition of
communities classified as held for sale as of September 30, 2016. The transactions with HCP and
Blackstone separately announced today are not expected to
have an impact on the 2016 guidance.
Reconciliations of the foregoing guidance to the most comparable
GAAP financial measures are not available without unreasonable
effort due to the inherent difficulty in forecasting the timing or
amounts of items required to reconcile Adjusted EBITDA, CFFO,
Adjusted CFFO and the Company's proportionate share of CFFO of
unconsolidated ventures from the Company's net income (loss), the
Company's net cash provided by (used in) operating activities and
the unconsolidated ventures' net cash provided by (used in)
operating activities, as applicable. Variability in the
timing or amounts of items required to reconcile each measure may
have a significant impact on the Company's future GAAP results.
Supplemental Information
The Company will post on the Investor Relations section of the
Company's website at www.brookdale.com supplemental information
relating to the Company's third quarter 2016 results. This
information will also be furnished in a Form 8-K to be filed with
the SEC.
Earnings Conference Call
Brookdale's management will conduct a conference call to review
the financial results of its third quarter ended September 30, 2016 on Tuesday, November 1, 2016 at 10:00 AM ET. The conference call can be
accessed by dialing (866) 900-2996 (from within the U.S.) or (706)
643-2685 (from outside of the U.S.) ten minutes prior to the
scheduled start and referencing the "Brookdale Senior Living Third
Quarter Earnings Call."
A webcast of the conference call will be available to the public
on a listen-only basis at www.brookdale.com. Please allow
extra time prior to the call to visit the site and download the
necessary software required to listen to the internet
broadcast. A replay of the webcast will be available through
the website for three months following the call.
For those who cannot listen to the live call, a replay will be
available until 11:59 PM ET on
November 14, 2016 by dialing (855)
859-2056 (from within the U.S.) or (404) 537-3406 (from outside of
the U.S.) and referencing access code "98658246". A copy of
this earnings release is posted on the Investor Relations page of
the Brookdale website (www.brookdale.com).
About Brookdale Senior Living
Brookdale Senior Living Inc. is the leading operator of senior
living communities throughout the United States. The Company
is committed to providing senior living solutions primarily within
properties that are designed, purpose-built and operated to provide
the highest-quality service, care and living accommodations for
residents. Brookdale operates independent living, assisted
living, and dementia-care communities and continuing care
retirement centers, with approximately 1,077 communities in 47
states and the ability to serve approximately 105,000 residents as
of September 30, 2016. Through
its ancillary services program, the Company also offers a range of
outpatient therapy, home health, personalized living and hospice
services. Brookdale's stock is traded on the New York Stock
Exchange under the ticker symbol BKD.
Safe Harbor
Certain statements in this press release and the associated
earnings conference call may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Those forward-looking statements are subject to
various risks and uncertainties and include all statements that are
not historical statements of fact and those regarding our intent,
belief or expectations, including, but not limited to, statements
relating to our strategy, our operational, sales, marketing and
branding initiatives and our portfolio optimization initiative and
our expectations regarding their effect on our results; and our
expectations regarding the economy, the senior living industry,
occupancy, pricing, revenue, cash flow, operating income, expenses,
capital expenditures, Program Max opportunities, the integration of
Emeritus, cost savings and synergies, liquidity and leverage,
senior housing supply and competition, the demand for senior
housing, expansion, development and construction activity,
acquisition, disposition, financing and venture plans or
opportunities (including assets currently held for sale and the
transactions with HCP and Blackstone), the expansion of our
ancillary services offerings, innovation and revenue growth
opportunities, our share repurchase program, taxes, capital
deployment, returns on invested capital, and Adjusted EBITDA, the
Company's CFFO, Adjusted CFFO, CFFO less Non-Development CapEx and
the Company's proportionate share of CFFO of unconsolidated
ventures (as such terms are defined herein). Forward-looking
statements are generally identifiable by use of forward-looking
terminology such as "may," "will," "should," "could," "would,"
"potential," "intend," "expect," "endeavor," "seek," "anticipate,"
"estimate," "overestimate," "underestimate," "believe," "project,"
"predict," "continue," "plan," "target," or other similar words or
expressions. Although we believe that expectations reflected
in any forward-looking statements are based on reasonable
assumptions, we can give no assurance that our expectations will be
attained and actual results and performance could differ materially
from those projected. Factors which could have a material adverse
effect on our operations and future prospects or which could cause
events or circumstances to differ from the forward-looking
statements include, but are not limited to, the risk associated
with the current global economic situation and its impact upon
capital markets and liquidity; changes in governmental
reimbursement programs; our inability to extend (or refinance) debt
(including our credit and letter of credit facilities and our
outstanding convertible notes) as it matures; the risk that we may
not be able to satisfy the conditions precedent to exercising the
extension options associated with certain of our debt agreements;
events which adversely affect the ability of seniors to afford our
monthly resident fees or entrance fees; the conditions of housing
markets in certain geographic areas; our ability to generate
sufficient cash flow to cover required interest and long-term
operating lease payments; the effect of our indebtedness and
long-term operating leases on our liquidity; the risk of loss of
property pursuant to our mortgage debt and long-term lease
obligations; the possibilities that changes in the capital markets,
including changes in interest rates and/or credit spreads, or other
factors could make financing more expensive or unavailable to us;
our determination from time to time to purchase any shares under
the repurchase program; our ability to fund any repurchases; our
ability to effectively manage our growth; our ability to maintain
consistent quality control; delays in obtaining regulatory
approvals; the risk that we may not be able to expand, redevelop
and reposition our communities in accordance with our plans; our
ability to complete acquisition, disposition, financing and venture
transactions (including assets currently held for sale and the HCP
and Blackstone transactions) on agreed upon terms or at all,
including in respect of the satisfaction of closing conditions, the
risk that regulatory approvals are not obtained or are subject to
unanticipated conditions, and uncertainties as to the timing of the
closing; our ability to successfully integrate acquisitions,
including our acquisition of Emeritus; competition for the
acquisition of assets; our ability to obtain additional capital on
terms acceptable to us; a decrease in the overall demand for senior
housing; our vulnerability to economic downturns; acts of nature in
certain geographic areas; terminations of our resident agreements
and vacancies in the living spaces we lease; early terminations or
non-renewal of management agreements; increased competition for
skilled personnel; increased union activity; departure of our key
officers; increases in market interest rates; environmental
contamination at any of our communities; failure to comply with
existing environmental laws; an adverse determination or resolution
of complaints filed against us; the cost and difficulty of
complying with increasing and evolving regulation; and the
inability to obtain, or delays in obtaining, cost savings and
synergies from the Emeritus acquisition; as well as other risks
detailed from time to time in our filings with the Securities and
Exchange Commission, including our Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q. When considering
forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in such SEC filings.
Readers are cautioned not to place undue reliance on any of these
forward-looking statements, which reflect our management's views as
of the date of this press release and/or the associated earnings
conference call. We expressly disclaim any obligation to
release publicly any updates or revisions to any of these
forward-looking statements to reflect any change in our
expectations with regard thereto or change in events, conditions or
circumstances on which any statement is based.
Condensed
Consolidated Statements of Operations
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenue
|
|
|
|
|
|
|
|
|
Resident
fees
|
|
$
1,042,831
|
|
$
1,040,082
|
|
$
3,158,547
|
|
$
3,136,292
|
Management
fees
|
|
15,532
|
|
14,694
|
|
50,498
|
|
44,630
|
Reimbursed costs
incurred on behalf of managed communities
|
|
187,763
|
|
184,065
|
|
559,067
|
|
543,984
|
Total
revenue
|
|
1,246,126
|
|
1,238,841
|
|
3,768,112
|
|
3,724,906
|
|
|
|
|
|
|
|
|
|
Expense
|
|
|
|
|
|
|
|
|
Facility operating
expense (excluding depreciation and amortization of$118,756,
$148,120,
$351,667and $571,059, respectively)
|
|
704,221
|
|
699,720
|
|
2,113,226
|
|
2,091,600
|
General and
administrative expense (including non-cash stock-based compensation
expense of $8,455, $10,147, $27,218 and $25,871,
respectively)
|
|
63,425
|
|
99,534
|
|
246,741
|
|
278,609
|
Transaction
costs
|
|
659
|
|
-
|
|
1,950
|
|
7,163
|
Facility lease
expense
|
|
92,519
|
|
91,144
|
|
281,890
|
|
276,953
|
Depreciation and
amortization
|
|
130,783
|
|
160,715
|
|
391,314
|
|
606,787
|
Asset
impairment
|
|
19,111
|
|
-
|
|
26,638
|
|
-
|
Loss on facility
lease termination
|
|
-
|
|
-
|
|
-
|
|
76,143
|
Costs incurred on
behalf of managed communities
|
|
187,763
|
|
184,065
|
|
559,067
|
|
543,984
|
Total operating
expense
|
|
1,198,481
|
|
1,235,178
|
|
3,620,826
|
|
3,881,239
|
Income (loss) from
operations
|
|
47,645
|
|
3,663
|
|
147,286
|
|
(156,333)
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
809
|
|
399
|
|
2,239
|
|
1,208
|
Interest
expense:
|
|
|
|
|
|
|
|
|
Debt
|
|
(43,701)
|
|
(43,972)
|
|
(131,422)
|
|
(130,004)
|
Capital and financing
lease obligations
|
|
(50,401)
|
|
(53,217)
|
|
(151,561)
|
|
(159,463)
|
Amortization of
deferred financing costs and debt premium (discount)
|
|
(2,380)
|
|
(616)
|
|
(6,978)
|
|
(835)
|
Change in fair value
of derivatives
|
|
-
|
|
(164)
|
|
(28)
|
|
(790)
|
Debt modification and
extinguishment costs
|
|
(1,944)
|
|
(6,736)
|
|
(3,240)
|
|
(6,780)
|
Equity in (loss)
earnings of unconsolidated ventures
|
|
(878)
|
|
(1,578)
|
|
478
|
|
(766)
|
Other non-operating
income
|
|
3,281
|
|
3,089
|
|
13,137
|
|
8,234
|
Income (loss) before
income taxes
|
|
(47,569)
|
|
(99,132)
|
|
(130,089)
|
|
(445,529)
|
(Provision) benefit
for income taxes
|
|
(4,159)
|
|
30,796
|
|
(5,947)
|
|
161,677
|
Net income
(loss)
|
|
(51,728)
|
|
(68,336)
|
|
(136,036)
|
|
(283,852)
|
Net (income) loss
attributable to noncontrolling interest
|
|
43
|
|
116
|
|
126
|
|
634
|
Net income (loss)
attributable to Brookdale Senior Living Inc. common
stockholders
|
|
$
(51,685)
|
|
$
(68,220)
|
|
$
(135,910)
|
|
$
(283,218)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
income (loss) per share attributable to Brookdale Senior Living
Inc. common stockholders
|
|
$
(0.28)
|
|
$
(0.37)
|
|
$
(0.73)
|
|
$
(1.54)
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in computing basic and diluted net income (loss) per
share
|
|
185,946
|
|
184,570
|
|
185,641
|
|
184,175
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
|
|
|
|
|
|
|
September 30,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
74,184
|
|
$
88,029
|
Cash and escrow
deposits - restricted
|
|
38,225
|
|
32,570
|
Accounts receivable,
net
|
|
135,455
|
|
144,053
|
Assets held for
sale
|
|
173,481
|
|
110,620
|
Other current
assets
|
|
132,549
|
|
122,671
|
Total current
assets
|
|
553,894
|
|
497,943
|
Property, plant and
equipment and
|
|
|
|
|
leasehold intangibles,
net
|
|
7,621,903
|
|
8,031,376
|
Other assets,
net
|
|
1,456,486
|
|
1,519,245
|
Total
assets
|
|
$
9,632,283
|
|
$
10,048,564
|
|
|
|
|
|
Current
liabilities
|
|
$
800,166
|
|
$
840,148
|
Long-term debt, less
current portion
|
|
3,542,677
|
|
3,769,371
|
Capital and financing
lease obligations, less current portion
|
|
2,422,841
|
|
2,427,438
|
Other
liabilities
|
|
516,203
|
|
552,880
|
Total
liabilities
|
|
7,281,887
|
|
7,589,837
|
Total Brookdale
Senior Living Inc. stockholders' equity
|
|
2,350,683
|
|
2,458,888
|
Noncontrolling
interest
|
|
(287)
|
|
(161)
|
Total
equity
|
|
2,350,396
|
|
2,458,727
|
Total liabilities and
equity
|
|
$
9,632,283
|
|
$
10,048,564
|
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows
|
(in
thousands)
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2016
|
|
2015
|
Cash Flows from
Operating Activities
|
|
|
|
|
Net income
(loss)
|
|
$
(136,036)
|
|
$
(283,852)
|
Adjustments to
reconcile net income (loss) to net cash provided by
operating
|
|
|
|
|
activities:
|
|
|
|
|
Loss on
extinguishment of debt, net
|
|
375
|
|
44
|
Depreciation and
amortization, net
|
|
398,292
|
|
607,622
|
Asset
impairment
|
|
26,638
|
|
-
|
Equity in (loss)
earnings of unconsolidated ventures
|
|
(478)
|
|
766
|
Distributions from
unconsolidated ventures from cumulative share of net
|
|
6,400
|
|
7,825
|
earnings
|
|
|
|
|
Amortization of
deferred gain
|
|
(3,279)
|
|
(3,279)
|
Amortization of
entrance fee revenue
|
|
(3,111)
|
|
(2,316)
|
Proceeds from
deferred entrance fee revenue
|
|
11,327
|
|
8,887
|
Deferred income tax
provision (benefit)
|
|
3,804
|
|
(164,014)
|
Change in deferred
lease liability
|
|
2,553
|
|
6,451
|
Change in fair value
of derivatives
|
|
28
|
|
790
|
Gain on sale of
assets
|
|
(2,126)
|
|
(1,723)
|
Non-cash stock-based
compensation
|
|
27,218
|
|
25,871
|
Non-cash interest
expense on financing lease obligations
|
|
19,728
|
|
17,458
|
Amortization of
(above) below market lease, net
|
|
(5,165)
|
|
(5,425)
|
Other
|
|
(6,360)
|
|
(2,272)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts receivable,
net
|
|
8,183
|
|
(2,907)
|
Prepaid expenses and
other assets, net
|
|
(7,338)
|
|
39,897
|
Accounts payable and
accrued expenses
|
|
(73,892)
|
|
(23,192)
|
Tenant refundable
fees and security deposits
|
|
(693)
|
|
(738)
|
Deferred
revenue
|
|
11,213
|
|
(23,708)
|
Net cash provided by
operating activities
|
|
277,281
|
|
202,185
|
Cash Flows from
Investing Activities
|
|
|
|
|
(Increase) decrease
in lease security deposits and lease acquisition deposits,
net
|
|
(1,776)
|
|
12,541
|
(Increase) decrease
in cash and escrow deposits — restricted
|
|
(1,810)
|
|
6,822
|
Additions to
property, plant and equipment and leasehold intangibles,
net
|
|
(263,950)
|
|
(301,778)
|
Acquisition of
assets, net of related payables
|
|
(12,157)
|
|
(193,451)
|
Investment in
unconsolidated ventures
|
|
(6,071)
|
|
(40,709)
|
Distributions
received from unconsolidated ventures
|
|
4,836
|
|
7,038
|
Proceeds from sale of
assets, net
|
|
219,471
|
|
8,072
|
Other
|
|
7,083
|
|
3,163
|
Net cash used in
investing activities
|
|
(54,374)
|
|
(498,302)
|
Cash Flows from
Financing Activities
|
|
|
|
|
Proceeds from
debt
|
|
202,132
|
|
550,131
|
Repayment of debt and
capital and financing lease obligations
|
|
(217,696)
|
|
(453,389)
|
Proceeds from line of
credit
|
|
1,276,500
|
|
970,000
|
Repayment of line of
credit
|
|
(1,486,500)
|
|
(760,000)
|
Payment of financing
costs, net of related payables
|
|
(1,414)
|
|
(32,251)
|
Refundable entrance
fees:
|
|
|
|
|
Proceeds
from refundable entrance fees
|
|
1,986
|
|
1,510
|
Refunds
of entrance fees
|
|
(2,893)
|
|
(3,251)
|
Cash portion of loss
on extinguishment of debt
|
|
-
|
|
(44)
|
Payment on lease
termination
|
|
(9,250)
|
|
(12,375)
|
Other
|
|
383
|
|
2,094
|
Net cash
(used in) provided by financing activities
|
|
(236,752)
|
|
262,425
|
Net decrease in cash and cash equivalents
|
|
(13,845)
|
|
(33,692)
|
Cash and cash equivalents at beginning of period
|
|
88,029
|
|
104,083
|
Cash and cash equivalents at end of period
|
|
$
74,184
|
|
$
70,391
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial
Measures
This earnings release and the supplemental information referred
to in the earnings release contain financial measures utilized by
management to evaluate our operating performance and liquidity that
are not calculated in accordance with U.S. generally accepted
accounting principles ("GAAP"). Each of these measures,
Adjusted EBITDA, CFFO, Adjusted CFFO and CFFO less Non-Development
CapEx should not be considered in isolation from or as superior to
or as a substitute for net income (loss), income (loss) from
operations, net cash provided by (used in) operating activities, or
other financial measures determined in accordance with GAAP.
We use these non-GAAP financial measures to supplement our GAAP
results in order to provide a more complete understanding of the
factors and trends affecting our business. We strongly urge
you to review the reconciliations of Adjusted EBITDA from the
Company's net income (loss), the Company's CFFO, Adjusted CFFO and
CFFO less Non-Development CapEx from the Company's net cash
provided by (used in) operating activities, and the Company's
proportionate share of CFFO of unconsolidated ventures from such
ventures' net cash provided by (used in) operating activities along
with our consolidated financial statements included herein.
We also strongly urge you not to rely on any single financial
measure to evaluate our business. We caution investors that
amounts presented in accordance with our definitions of Adjusted
EBITDA, CFFO, Adjusted CFFO and CFFO less Non-Development CapEx may
not be comparable to similar measures disclosed by other companies,
because not all companies calculate these non-GAAP measures in the
same manner.
Our definitions and calculations of Adjusted EBITDA and CFFO
have changed from prior periods as follows.
- We changed our definition and calculation of Adjusted EBITDA
when we reported results for the second quarter of 2016.
Prior period amounts of Adjusted EBITDA presented herein have been
recast to conform to the new definition. The current
definition of Adjusted EBITDA reflects the removal of the following
adjustments to our net income (loss) that were used in the former
definition: the addition of our proportionate share of CFFO of
unconsolidated ventures and our entrance fee receipts, net of
refunds, and the subtraction of our amortization of entrance
fees. See our earnings release issued on August 8, 2016, for more information regarding
the changes made to the definition and calculation of Adjusted
EBITDA.
- In connection with our reporting results for the three months
ended September 30, 2016, we have
changed our definition and calculation of CFFO from prior
periods. Under this new definition of CFFO, we no longer will
include our proportionate share of CFFO of unconsolidated
ventures. To conform to this new definition, prior period
amounts of the Company's CFFO, Adjusted CFFO and CFFO less
Non-Development CapEx included herein have been recast to reflect
the Company's CFFO, Adjusted CFFO and CFFO less Non-Development
CapEx separate from, and exclusive of, the Company's proportionate
share of CFFO of unconsolidated ventures. Previously, in
connection with our reporting results for the second quarter of
2016, we began reporting CFFO as a measure of liquidity, and as
such we changed the definition of CFFO to reflect the
reconciliation of such measure from the Company's net cash provided
by (used in) operating activities. This previous change had no
effect on the amounts of CFFO presented herein for this period or
prior periods. We ceased presenting CFFO per share or
Adjusted CFFO per share in connection with our reporting results
for the second quarter of 2016.
Adjusted EBITDA
We define Adjusted EBITDA as follows:
Net income (loss) before:
- provision (benefit) for income taxes;
- non-operating (income) expense items;
- depreciation and amortization (including non-cash impairment
charges);
- (gain) loss on sale or acquisition of communities (including
gain (loss) on facility lease termination);
- straight-line lease expense (income), net of amortization of
(above) below market rents;
- amortization of deferred gain;
- non-cash stock-based compensation expense; and
- change in future service obligation.
We use Adjusted EBITDA to assess our overall operating
performance. We believe this non-GAAP measure, as we have defined
it, is helpful in identifying trends in our day-to-day performance
because the items excluded have little or no significance on our
day-to-day operations. This measure provides an assessment of
controllable expenses and affords management the ability to make
decisions which are expected to facilitate meeting current
operating goals as well as achieve optimal operating performance.
It provides an indicator for management to determine if adjustments
to current spending decisions are needed.
Adjusted EBITDA provides us with a measure of operating
performance, independent of items that are beyond the control of
management in the short-term, such as the change in the liability
for the obligation to provide future services under existing
lifecare contracts, depreciation and amortization (including
non-cash impairment charges), straight-line lease expense (income),
taxation and interest expense associated with our capital
structure. This metric measures our operating performance based on
operational factors that management can impact in the short-term,
namely revenues and the cost structure or expenses of the
organization. Adjusted EBITDA is one of the metrics used by senior
management and the board of directors to review the operating
performance of the business on a regular basis. We believe that
Adjusted EBITDA is also used by research analysts and investors to
evaluate the performance of and value companies in our
industry.
Adjusted EBITDA has limitations as an analytical tool. Material
limitations in making the adjustments to our net income (loss) to
calculate Adjusted EBITDA, and using this non-GAAP financial
measure as compared to GAAP net income (loss), include:
- the cash portion of interest expense, income tax (benefit)
provision and non-recurring charges related to gain (loss) on sale
of communities (or facility lease termination) and extinguishment
of debt activities generally represent charges (gains), which may
significantly affect our operating results; and
- depreciation and amortization and asset impairment represent
the wear and tear and/or reduction in value of our communities and
other assets, which affects the services we provide to residents
and may be indicative of future needs for capital
expenditures.
We believe Adjusted EBITDA is useful to investors in evaluating
our operating performance because it is helpful in identifying
trends in our day-to-day performance since the items excluded have
little or no significance to our day-to-day operations and it
provides an assessment of our revenue and expense management.
The table below reconciles Adjusted EBITDA from net income
(loss) for the three and nine months ended September 30, 2016 and September 30, 2015 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, (1)
|
|
Nine Months Ended
September 30, (1)
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net income
(loss)
|
|
$
(51,728)
|
|
$
(68,336)
|
|
$
(136,036)
|
|
$
(283,852)
|
Provision (benefit)
for income taxes
|
|
4,159
|
|
(30,796)
|
|
5,947
|
|
(161,677)
|
Equity in loss
(earnings) of unconsolidated ventures
|
|
878
|
|
1,578
|
|
(478)
|
|
766
|
Debt modification and
extinguishment costs
|
|
1,944
|
|
6,736
|
|
3,240
|
|
6,780
|
Other non-operating
income
|
|
(3,281)
|
|
(3,089)
|
|
(13,137)
|
|
(8,234)
|
Interest
expense
|
|
96,482
|
|
97,969
|
|
289,989
|
|
291,092
|
Interest
income
|
|
(809)
|
|
(399)
|
|
(2,239)
|
|
(1,208)
|
Income (loss) from
operations
|
|
47,645
|
|
3,663
|
|
147,286
|
|
(156,333)
|
Depreciation and
amortization
|
|
130,783
|
|
160,715
|
|
391,314
|
|
606,787
|
Asset
impairment
|
|
19,111
|
|
-
|
|
26,638
|
|
-
|
Loss on facility
lease termination
|
|
-
|
|
-
|
|
-
|
|
76,143
|
Straight-line lease
expense (income)
|
|
(859)
|
|
1,731
|
|
2,553
|
|
6,451
|
Amortization of
(above) below market lease, net
|
|
(1,699)
|
|
(1,626)
|
|
(5,165)
|
|
(5,425)
|
Amortization of
deferred gain
|
|
(1,093)
|
|
(1,093)
|
|
(3,279)
|
|
(3,279)
|
Non-cash stock-based
compensation expense
|
|
8,455
|
|
10,147
|
|
27,218
|
|
25,871
|
Adjusted
EBITDA
|
|
$
202,343
|
|
$
173,537
|
|
$
586,565
|
#
|
$
550,215
|
|
|
|
|
|
|
|
|
|
(1)
|
For the three and
nine months ended September 30, 2016, the calculation of Adjusted
EBITDA includes integration, transaction, transaction-related and
strategic project costs of $7.1 million and $44.2 million,
respectively. For the three and nine months ended September 30,
2015, the calculation of Adjusted EBITDA includes integration,
transaction, transaction-related and strategic project costs of
$35.8 million and $92.1 million, respectively. Integration costs
include transition costs associated with the Emeritus merger and
organizational restructuring (such as severance and retention
payments and recruiting expenses), third party consulting expenses
directly related to the integration of Emeritus (in areas such as
cost savings and synergy realization, branding and technology and
systems work), and internal costs such as training, travel and
labor, reflecting time spent by Company personnel on integration
activities and projects. Transaction and transaction-related costs
include third party costs directly related to the acquisition of
Emeritus, other acquisition and disposition activity, community
financing and leasing activity and corporate capital structure
assessment activities (including shareholder relations advisory
matters), and are primarily comprised of legal, finance,
consulting, professional fees and other third party
costs. Strategic project costs include costs associated with
certain strategic projects related to refining the Company's
strategy, building out enterprise-wide capabilities for the
post-merger platform (including the EMR roll-out project) and
reducing costs and achieving synergies by capitalizing on
scale.
|
CFFO and Adjusted CFFO
We define Cash From Facility Operations (CFFO) as follows:
Net cash provided by (used in) operating activities before
- changes in operating assets and liabilities;
- gain (loss) on facility lease termination;
- distributions from unconsolidated ventures from cumulative
share of net earnings;
and adjusted for:
- recurring capital expenditures, net;
- lease financing debt amortization with fair market value or no
purchase options;
- proceeds from refundable entrance fees;
- refunds of entrance fees; and
- other.
Recurring capital expenditures include routine expenditures
capitalized in accordance with GAAP that are funded from current
operations. Amounts excluded from recurring capital expenditures
consist primarily of capital expenditures related to community
expansions, renovations and major projects (including major
community redevelopment and repositioning projects), the
development of new communities and corporate capital expenditures
(including systems projects and integration capital expenditures)
that are funded using lease or financing proceeds, available cash
and/or proceeds from the sale of communities.
Adjusted CFFO represents the Company's CFFO, excluding
integration, transaction, transaction-related and strategic project
costs. Integration costs include transition costs associated
with the Emeritus merger and organizational restructuring (such as
severance and retention payments and recruiting expenses), third
party consulting expenses directly related to the integration of
Emeritus (in areas such as cost savings and synergy realization,
branding and technology and systems work), and internal costs such
as training, travel and labor, reflecting time spent by Company
personnel on integration activities and projects. Transaction and
transaction-related costs include third party costs directly
related to the acquisition of Emeritus, other acquisition and
disposition activity, community financing and leasing activity and
corporate capital structure assessment activities (including
shareholder relations advisory matters), and are primarily
comprised of legal, finance, consulting, professional fees and
other third party costs. Strategic project costs include costs
associated with certain strategic projects related to refining the
Company's strategy, building out enterprise-wide capabilities for
the post-merger platform (including the EMR roll-out project) and
reducing costs and achieving synergies by capitalizing on
scale.
CFFO less Non-Development CapEx represents the Company's CFFO
less corporate capital expenditures and capital expenditures
related to maintenance, renovations and upgrades to our communities
that are not Development CapEx. Development CapEx means capital
expenditures related to community expansions and major community
redevelopment and repositioning projects, including our Program Max
initiative, and the development of new communities. Non-Development
CapEx and Development CapEx are presented net of third-party
reimbursements received or anticipated to be received.
Our proportionate share of CFFO of unconsolidated ventures is
calculated based on our equity ownership percentage and in a manner
consistent with the definition of CFFO for our consolidated
entities. Our investments in our unconsolidated ventures are
accounted for under the equity method of accounting and, therefore,
our proportionate share of CFFO of unconsolidated ventures does not
represent cash available to our consolidated business except to the
extent it is distributed to us.
We use CFFO, Adjusted CFFO and CFFO less Non-Development CapEx
to assess our overall liquidity. These measures provide an
assessment of controllable expenses and afford management the
ability to make decisions which are expected to facilitate meeting
current financial and liquidity goals as well as to achieve optimal
financial performance. They provide an indicator for management to
determine if adjustments to current spending decisions are
needed.
These metrics measure our liquidity based on operational factors
that management can impact in the short-term, namely the cost
structure or expenses of the organization. CFFO, Adjusted CFFO and
CFFO less Non-Development CapEx are some of the metrics used by our
senior management and board of directors (i) to review our ability
to service our outstanding indebtedness, including our credit
facilities, (ii) to review our ability to pay dividends to
stockholders or engage in share repurchases, (iii) to review our
ability to make capital expenditures, (iv) for other corporate
planning purposes and/or (v) in making compensation determinations
for certain of our associates (including our named executive
officers).
Each of CFFO, Adjusted CFFO and CFFO less Non-Development CapEx
has limitations as an analytical tool. Material limitations in
making the adjustments to our net cash provided by (used in)
operating activities to calculate such measures, and using these
non-GAAP financial measures as compared to GAAP net cash provided
by (used in) operating activities, include:
- CFFO, Adjusted CFFO and CFFO less Non-Development CapEx do not
represent cash available for dividends or discretionary
expenditures, since we have mandatory debt service requirements and
other non-discretionary expenditures not reflected in these
measures;
- the cash portion of non-recurring charges related to gain
(loss) on lease termination and extinguishment of debt activities
generally represent charges (gains), which may significantly affect
our financial results; and
- our proportionate share of CFFO of unconsolidated ventures does
not represent cash available directly for use by our consolidated
business except to the extent actually distributed to us, and we do
not have control, or we share control in determining, the timing
and amount of distributions from our unconsolidated ventures and,
therefore, we may never receive such cash.
We believe each of CFFO, Adjusted CFFO and CFFO less
Non-Development CapEx is useful to investors because it assists
their ability to meaningfully evaluate (1) our ability to service
our outstanding indebtedness, including our credit facilities and
capital and financing leases, (2) our ability to pay dividends to
stockholders or engage in share repurchases, (3) our ability to
make capital expenditures, and (4) the underlying value of our
assets, including our interests in real estate.
We believe presentation of our proportionate share of CFFO of
unconsolidated ventures is useful to investors since such measure
reflects the cash generated by the operating activities of the
unconsolidated ventures for the reporting period and, to the extent
such cash is not distributed to us, it generally represents cash
used or to be used by the ventures for capital expenditures, the
repayment of debt, investing in expansions or acquisitions, reserve
requirements or other corporate uses by such ventures, and such
uses reduce our potential need to make capital contributions to the
ventures of our proportionate share of cash needed for such
items.
The table below reconciles the Company's CFFO, Adjusted CFFO and
CFFO less Non-Development CapEx from net cash provided by (used in)
operating activities for the three and nine months ended
September 30, 2016 and September 30, 2015 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, (1)
|
|
Nine Months Ended
September 30, (1)
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
99,442
|
|
$
91,361
|
|
$
277,281
|
|
$
202,185
|
Net cash provided by
(used in) investing activities
|
|
102,362
|
|
(121,805)
|
|
(54,374)
|
|
(498,302)
|
Net cash (used in)
provided by financing activities
|
|
(166,673)
|
|
22,339
|
|
(236,752)
|
|
262,425
|
Net increase
(decrease) in cash and cash equivalents
|
|
$
35,131
|
|
$
(8,105)
|
|
$
(13,845)
|
|
$
(33,692)
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
99,442
|
|
$
91,361
|
|
$
277,281
|
|
$
202,185
|
Changes in operating
assets and liabilities
|
|
23,967
|
|
(6,324)
|
|
62,527
|
|
10,648
|
Refundable entrance
fee received
|
|
840
|
|
924
|
|
1,986
|
|
1,510
|
Entrance fee refunds
disbursed
|
|
(1,148)
|
|
(1,434)
|
|
(2,893)
|
|
(3,251)
|
Recurring capital
expenditures, net
|
|
(16,890)
|
|
(14,531)
|
|
(43,839)
|
|
(46,959)
|
Lease financing debt
amortization with fair market value or no purchase
options
|
|
(14,599)
|
|
(12,852)
|
|
(42,525)
|
|
(38,047)
|
Loss on facility
lease termination
|
|
-
|
|
-
|
|
-
|
|
76,143
|
Distributions from
unconsolidated ventures from cumulative share of net
earnings
|
|
(6,400)
|
|
(6,375)
|
|
(6,400)
|
|
(7,825)
|
CFFO
|
|
$
85,212
|
|
$
50,769
|
|
$
246,137
|
|
$
194,404
|
|
|
|
|
|
|
|
|
|
Integration,
transaction, transaction-related and strategic project
costs
|
|
8,775
|
|
42,499
|
|
47,027
|
|
98,826
|
Adjusted
CFFO
|
|
$
93,987
|
|
$
93,268
|
|
$
293,164
|
|
$
293,230
|
|
|
|
|
|
|
|
|
|
CFFO
|
|
$
85,212
|
|
$
50,769
|
|
$
246,137
|
|
$
194,404
|
Plus: Recurring
capital expenditures, net
|
|
16,890
|
|
14,531
|
|
43,839
|
|
46,959
|
Less: Non-Development
CapEx
|
|
(55,611)
|
|
(78,829)
|
|
(171,404)
|
|
(215,651)
|
CFFO less
Non-Development CapEx
|
|
$
46,491
|
|
$
(13,529)
|
|
$
118,572
|
|
$
25,712
|
|
|
|
|
|
|
|
|
|
(1)
|
For the three and
nine months ended September 30, 2016, the calculation of CFFO
includes integration, transaction, transaction-related and
strategic project costs of $8.8 million and $47.0 million
(including $1.7 million and $2.9 million of debt modification costs
excluded from Adjusted EBITDA for the three and nine months ended
September 30, 2016, respectively). For the three and nine months
ended September 30, 2015, the calculation of CFFO includes
integration, transaction, transaction-related and strategic project
costs of $42.5 million and $98.8 million, respectively (including
$6.7 million of debt modification costs excluded from Adjusted
EBITDA in both periods). Integration costs include transition costs
associated with the Emeritus merger and organizational
restructuring (such as severance and retention payments and
recruiting expenses), third party consulting expenses directly
related to the integration of Emeritus (in areas such as cost
savings and synergy realization, branding and technology and
systems work), and internal costs such as training, travel and
labor, reflecting time spent by Company personnel on integration
activities and projects. Transaction and transaction-related costs
include third party costs directly related to the acquisition of
Emeritus, other acquisition and disposition activity, community
financing and leasing activity and corporate capital structure
assessment activities (including shareholder relations advisory
matters), and are primarily comprised of legal, finance,
consulting, professional fees and other third party costs.
Strategic project costs include costs associated with certain
strategic projects related to refining the Company's strategy,
building out enterprise-wide capabilities for the post-merger
platform (including the EMR roll-out project) and reducing costs
and achieving synergies by capitalizing on scale.
|
The table below reconciles our proportionate share of CFFO of
unconsolidated ventures from net cash provided by (used in)
operating activities of such unconsolidated ventures for the three
and nine months ended September 30,
2016 and September 30, 2015
(in thousands). For purposes of this presentation, amounts
for each line item represent the aggregate amounts of such line
items for all of our unconsolidated ventures.
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
47,095
|
|
$
57,202
|
|
$
157,530
|
|
$
112,427
|
Net cash used in
investing activities
|
|
(40,885)
|
|
(36,471)
|
|
(124,491)
|
|
(1,042,857)
|
Net cash (used in)
provided by financing activities
|
|
(12,073)
|
|
(25,021)
|
|
(32,708)
|
|
931,856
|
Net (decrease)
increase in cash and cash equivalents
|
|
$
(5,863)
|
|
$
(4,290)
|
|
$
331
|
|
$
1,426
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
47,095
|
|
$
57,202
|
|
$
157,530
|
|
$
112,427
|
Changes in operating
assets and liabilities
|
|
(3,600)
|
|
(11,936)
|
|
(11,125)
|
|
9,640
|
Refundable entrance
fee received
|
|
11,972
|
|
7,609
|
|
33,878
|
|
24,099
|
Entrance fee refunds
disbursed
|
|
(11,940)
|
|
(10,875)
|
|
(36,622)
|
|
(33,098)
|
Recurring capital
expenditures, net
|
|
(5,256)
|
|
(5,437)
|
|
(14,761)
|
|
(13,590)
|
CFFO of
unconsolidated ventures
|
|
$
38,271
|
|
$
36,563
|
|
$
128,900
|
|
$
99,478
|
|
|
|
|
|
|
|
|
|
Brookdale's Weighted
Average Ownership percentage
|
|
36.2%
|
|
35.8%
|
|
35.0%
|
|
38.7%
|
|
|
|
|
|
|
|
|
|
Brookdale's
proportionate share of CFFO of unconsolidated ventures
|
|
$
13,837
|
|
$
13,093
|
|
$
45,130
|
|
$
38,483
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/brookdale-announces-third-quarter-2016-results-300354575.html
SOURCE Brookdale Senior Living Inc.