Supplemental Information

3rd Quarter 2020

Table of Contents

COVID-19 Financial Impact

4

Overview

5

Segment Overview

8

Senior Housing

9

Health Care Services

14

G&A Expense

15

Capital Expenditures

16

Cash Facility Lease Payments

17

Capital Structure

18

Definitions

19

Appendices:

Pro-Forma Financial Information

22

2019 Lease Accounting Standard (ASC 842) Impact

26

Non-GAAP Financial Measures

27

2

SAFE HARBOR

Certain statements in this Supplemental Information may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties and include all statements regarding the Company's intent, expectations and assumptions related to the various pending and expected transactions outlined herein and any other statements that are not historical statements of fact. 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," "believe," "project," "predict," "continue," "plan," "target," or other similar words or expressions. These forward-looking statements are based on certain assumptions and expectations, and the Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Although the Company believes that expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its assumptions or expectations will be attained, and actual results and performance could differ materially from those projected. Factors which could cause events or circumstances to differ from the forward-looking statements include, but are not limited to: the impacts of the COVID-19 pandemic, including the response efforts of federal, state, and local government authorities, businesses, individuals and the Company, on the Company's business, results of operations, cash flow, and liquidity, and strategic initiatives; the Company's ability to complete pending or expected disposition, acquisition or other 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 closing, and the Company's ability to identify and pursue any such opportunities in the future; delays in obtaining regulatory approvals; terminations, early or otherwise, or non-renewal of management agreements; regulatory changes in geographic areas where the Company is concentrated; disruptions in the financial markets, including those related to the pandemic, that affect the Company's ability to obtain financing or extend or refinance debt as it matures and the Company's financing costs; a decrease in the overall demand for senior housing, which may be adversely impacted by the pandemic; environmental contamination at any of the Company's communities; failure to comply with existing environmental laws; unanticipated costs to comply with legislative or regulatory developments; as well as other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission (SEC), including those contained in the Company's 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 management's views as of the date of this Supplemental Information. The Company cannot guarantee future results, levels of activity, performance or achievements, and, except as required by law, it expressly disclaims any obligation to release publicly any updates or revisions to any of these forward-looking statements to reflect any change in its expectations with regard thereto or change in events, conditions or circumstances on which any statement is based. This Supplemental Information should be read in conjunction with the Company's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other information filed with the SEC.

3

COVID-19 Financial Impact

The COVID-19 pandemic adversely impacted the Company's occupancy and resident fee revenue during 2020 and resulted in incremental direct costs to prepare for and respond to the pandemic, including costs for: acquisition of additional personal protective equipment ("PPE"), medical equipment, and cleaning and disposable food service supplies, enhanced cleaning and environmental sanitation, increased labor, increased workers compensation and health plan expense, consulting and professional services, and COVID-19 testing of residents and associates where not otherwise covered by government payor or third-party insurance sources.

During the second quarter and third quarter of 2020, the Company accepted $33.5 million and $2.6 million, respectively, of cash for grants pursuant to the Public Health and Social Services Emergency Fund (the "Provider Relief Fund"), which was expanded by the Coronavirus Aid, Relief, and Economic Security Act of 2020 ("CARES Act"). Grants are subject to the terms and conditions of the program, including that such funds may only be used to prevent, prepare for, and respond to COVID-19 and will reimburse only for healthcare related expenses or lost revenues that are attributable to COVID-19. The Company recognized $35.0 million of the Provider Relief Fund grants and $2.5 million of other government grants in other operating income during the first three quarters of 2020 based upon the Company's estimates of its satisfaction of the conditions of the grants during such period.

The Company's net cash provided by operating activities and Adjusted Free Cash Flow for 2020 also include the benefit of temporary liquidity relief provided pursuant to the CARES Act, including the following items.

  • The Company received $85.0 million and $2.5 million during the second quarter and third quarter of 2020, respectively, under the Medicare accelerated and advance payment program. Under current legislation, recoupment of accelerated/advanced payments will begin one year after payments were issued, and payments will be recouped at a rate of 25% of Medicare payments for the first eleven months following the anniversary of issuance and at a rate of 50% of Medicare payments for the next six months. Any outstanding balance of accelerated/advanced payments will be due following such recoupment period.
  • The Company elected to defer payment of the employer portion of social security payroll taxes incurred from March 27, 2020 to December 31, 2020. One-half of such deferral amount will become due on each of December 31, 2021 and December 31, 2022. The Company utilized this deferral program to delay payment of approximately $26.5 million and $23.6 million of the employer portion of payroll taxes during the second quarter and third quarter of 2020, respectively.

The following tables present the known or estimated impacts related to the COVID-19 pandemic to the Company's consolidated and Senior Housing Same Community quarterly and year-to-date 2020 results. The tables exclude the impact of any rate adjustments under government reimbursement programs. Presentations of these impacts are intended to aid investors in better understanding the factors and trends affecting the Company's performance and liquidity.

Estimated Impact on Consolidated Portfolio

3Q

2020

Assisted Living

Independent

and Memory

Health Care

($ in 000s)

1Q 2020

2Q 2020

Living

Care

CCRCs

Services

3Q 2020

YTD 2020

Estimatedlost resident fee revenue (1)

$

5,800

$

63,600

$

12,600

$

49,200

$

14,700

$

15,100

$

91,600

$

161,000

Other operating income

-

26,693

96

1,936

2,841

5,892

10,765

37,458

Facility operating expense

10,000

60,594

2,208

15,493

4,386

2,392

24,479

95,073

Working capital benefit

-

118,671

20,151

138,822

Estimated Impact on Senior Housing: Same Community

3Q 2020

Assisted Living

1Q 2020 Same

2Q 2020 Same

Independent

and Memory

3Q 2020

YTD 2020

($ in 000s)

Community

Community

Living

Care

CCRCs

Same Community

Same Community

Estimatedlost resident fee revenue (1)

$

2,400

$

42,600

$

11,600

$

47,500

$

11,700

$

70,800

$

115,800

Other operating income

-

6,445

96

1,937

1,677

3,710

10,155

Facility operating expense

8,899

52,322

1,868

15,454

3,096

20,418

81,639

(1) Estimated lost resident fee revenue represents the difference between the actual resident fee revenue for the period and the Company's pre-COVID-19 expectations.

4

Overview

3Q20 vs.

YTD 3Q20 vs.

2019

2020

3Q19

YTD 3Q19

Better (B)/

($ in 000s)

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

(Worse) (W)

B/(W)

Resident fee revenue (1)

$

809,479

$

801,863

$

801,237

$

797,352

$

3,209,931

$

782,707

$

731,629

$

700,771

(12.5)%

(8.2)%

Management fee revenue

$

15,743

$

15,449

$

13,564

$

12,352

$

57,108

$

108,715

$

6,076

$

5,669

(58.2)%

169.1%

Other operating income

$

-

$

-

$

-

$

-

$

-

$

-

$

26,693

$

10,765

NM

NM

Net income (loss) (1)

$

(42,606)

$

(56,055)

$

(78,508)

$

(91,323)

$

(268,492)

$

369,497

$

(118,420)

$

(124,993)

(59.2)%

NM

Net cash provided by (used in) operating activities

$

(5,009)

$

64,128

$

69,211

$

88,082

$

216,412

$

57,479

$

151,840

$

(77,169)

NM

3.0%

Adjusted EBITDA(1) (2)

$

116,583

$

104,036

$

80,447

$

100,103

$

401,169

$

185,069

$

44,733

$

(64,019)

NM

(44.9)%

Adjusted EBITDA, excluding $100.0 million

management termination fee and $119.2 million

one-time cash lease payment

$

116,583

$

104,036

$

80,447

$

100,103

$

401,169

$

85,069

$

44,733

$

55,161

(31.4)%

(38.6)%

Adjusted Free Cash Flow

$

(46,971)

$

(16,369)

$

(13,575)

$

511

$

(76,404)

$

5,182

$

113,451

$

(114,327)

NM

NM

Period end consolidated number of units

55,948

55,209

55,262

54,181

54,181

54,037

54,019

53,110

(3.9)%

(3.9)%

Consolidated:

As of September 30, 2020

Consolidated:

3Q 2020 weighted average occupancy

(consolidated communities)

652

53,110

Community

% of Period End

Occupancy Band

Count

Communities

Greater than 95%

43

7%

Leased

90% > 95%

64

10%

85% > 90%

76

12%

Leased

21,286

Owned

726

80% > 85%

69

11%

302

Owned

63,090

350

communities

75% > 80%

95

15%

31,824

units

70% > 75%

90

14%

Less than 70%

215

31%

Total

652

100%

Managed

Managed

Consolidated Portfolio Average

9,980

~ 23 years

74

Asset Age

  1. The 2019 periods presented include the non-recurring,non-cash revenue and expense associated with the Company's adoption of the lease accounting standard effective January 1, 2019. See page 26 for additional information.
  2. Adjusted EBITDA for the first quarter and year-to-date of 2020 includes the $100.0 million management agreement termination fee payment received from Healthpeak Properties Inc. ("Healthpeak") related to the sale of Brookdale's interest in the entry fee CCRC venture, which closed on January 31, 2020. Adjusted EBITDA for the second quarter, third quarter, and year-to-date of 2020 includes $26.7 million, $10.8 million, and $37.5 million of government grants recognized in other operating income during the respective period. Adjusted EBITDA for the third quarter and year-to-date of 2020 includes the $119.2 million one-time cash lease payment made to Ventas, Inc. ("Ventas") in connection with the Company's lease restructuring transaction effective July 26, 2020 ("one-time cash lease payment").

Important Note Regarding Non-GAAP Financial Measures

• Adjusted EBITDA and Adjusted Free Cash Flow are financial measures that are not calculated in accordance with GAAP. See "Definitions" and "Non-GAAP Financial Measures" for the 5 definitions of such measures and other important information regarding such measures, including reconciliations to the most comparable GAAP measures.

Adjusted EBITDA and Adjusted Free

Cash Flow

3Q20 vs.

YTD 3Q20 vs.

2019

2020

3Q19

YTD 3Q19

($ in 000s)

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

B(W)

B(W)

Resident fee revenue

$

809,479

$

801,863

$

801,237

$

797,352

$

3,209,931

$

782,707

$

731,629

$

700,771

(12.5)%

(8.2)%

Management fee revenue

15,743

15,449

13,564

12,352

57,108

108,715

6,076

5,669

(58.2)%

169.1%

Other operating income

-

-

-

-

-

-

26,693

10,765

NM

NM

Facility operating expense

(586,094)

(590,246)

(615,717)

(598,438)

(2,390,495)

(588,482)

(606,034)

(570,530)

7.3%

1.5%

Combined Segment Operating Income

239,128

227,066

199,084

211,266

876,544

302,940

158,364

146,675

(26.3)%

(8.6)%

General and administrative expense (1)

(49,494)

(50,912)

(46,570)

(39,280)

(186,256)

(46,657)

(43,031)

(41,752)

10.3%

10.6%

Cash facility operating lease payments (see

page 17)

(73,051)

(72,118)

(72,067)

(71,883)

(289,119)

(71,214)

(70,600)

(168,942)

(134.4)%

(43.0)%

Adjusted EBITDA (2)

116,583

104,036

80,447

100,103

401,169

185,069

44,733

(64,019)

NM

(44.9)%

$100.0 million management termination fee

-

-

-

-

-

(100,000)

-

-

NM

NM

$119.2 million one-time cash lease payment

-

-

-

-

-

-

-

119,180

NM

NM

Adjusted EBITDA, excluding management

termination fee and one-time cash lease

payment

116,583

104,036

80,447

100,103

401,169

85,069

44,733

55,161

(31.4)%

(38.6)%

$100.0 million management termination fee

-

-

-

-

-

100,000

-

-

NM

NM

$119.2 million one-time cash lease payment

-

-

-

-

-

-

-

(119,180)

NM

NM

Transaction and Organizational Restructuring

Costs

(461)

(634)

(3,910)

(5,002)

(10,007)

(1,981)

(3,368)

(6,250)

(59.8)%

(131.7)%

Interest expense, net (see page 17)

(59,302)

(59,029)

(58,749)

(57,132)

(234,212)

(53,590)

(48,623)

(48,209)

17.9%

15.1%

Payment of financing lease obligations

(5,453)

(5,500)

(5,549)

(5,740)

(22,242)

(5,087)

(4,677)

(4,548)

18.0%

13.3%

Changes in working capital (3)

(43,405)

9,620

31,439

20,410

18,064

(53,902)

149,055

33,794

7.5%

NM

Other (4)

(331)

1,602

1,868

3,482

6,621

(4,771)

(2,148)

(2,223)

NM

NM

Non-Development Capital Expenditures, net

(see page 16)

(54,602)

(66,464)

(59,121)

(55,610)

(235,797)

(60,556)

(21,521)

(22,872)

61.3%

41.8%

Adjusted Free Cash Flow

$

(46,971)

$

(16,369)

$

(13,575)

$

511

$

(76,404)

$

5,182

$

113,451

$

(114,327)

NM

NM

(1)

Excluding non-cashstock-based compensation expense and Transaction and Organizational Restructuring Costs, see page 15.

(2)

Adjusted EBITDA for the first quarter and year-to-date of 2020 includes the $100.0 million management agreement termination fee payment received from Healthpeak related to

the sale of Brookdale's interest in the entry fee CCRC venture, which closed on January 31, 2020. Adjusted EBITDA for the second quarter, third quarter, and year-to-date 2020

includes $26.7 million, $10.8 million, and $37.5 million, respectively, of government grants recognized in other operating income. Adjusted EBITDA for the third quarter and year-

to-date of 2020 includes the $119.2 million one-time cash lease payment.

(3)

Excludes changes in prepaid insurance premiums financed with notes payable, changes in operating lease liability for lease termination and modification, and lessor capital

expenditure reimbursements under operating leases and includes $118.7 million and $20.2 million impact related to CARES Act programs for the second quarter and third quarter

of 2020, respectively.

6

(4)

Primarily consists of proceeds from property insurance and cash paid for state income taxes.

Adjusted EBITDA and Adjusted Free

Cash Flow Distribution

3Q 2020

Senior

Senior

Housing

Housing

Owned

Leased

Health Care

Management

Other (1)

($ in 000s)

Total

Portfolio

Portfolio

Services

Services

Resident fee revenue

$

700,771

$

356,105

$

254,763

$

89,903

$

-

$

-

Management fee revenue

5,669

-

-

-

5,669

-

Other operating income

10,765

3,317

1,556

5,892

-

-

Facility operating expense

(570,530)

(284,780)

(191,417)

(94,333)

-

-

Combined Segment Operating Income

146,675

74,642

64,902

1,462

5,669

-

General and administrative expense (excluding non-cashstock-based

compensation expense and transaction costs)

(41,752)

(17,804)

(12,738)

(5,158)

(6,052)

-

Cash facility operating lease payments (2)

(168,942)

-

(167,393)

-

-

(1,549)

Adjusted EBITDA (3)

(64,019)

56,838

(115,229)

(3,696)

(383)

(1,549)

$119.2 million one-time cash lease payment

119,180

-

119,180

-

-

-

Adjusted EBITDA, excluding one-time cash lease payment

55,161

56,838

3,951

(3,696)

(383)

(1,549)

$119.2 million one-time cash lease payment

(119,180)

-

(119,180)

-

-

-

Transaction and Organizational Restructuring Costs

(6,250)

-

-

-

-

(6,250)

Interest expense, net

(48,209)

(36,908)

(11,908)

-

-

607

Payment of financing lease obligations

(4,548)

(4,413)

-

-

(135)

Changes in working capital (4)

33,794

-

-

-

-

33,794

Other

(2,223)

(648)

-

-

-

(1,575)

Non-Development Capital Expenditures, net

(22,872)

(12,236)

(5,808)

-

-

(4,828)

Adjusted Free Cash Flow

$

(114,327)

$

7,046

$

(137,358)

$

(3,696)

$

(383)

$

20,064

(1) Primarily consists of changes in working capital, Transaction and Organizational Restructuring Costs, corporate capital expenditures, lease payments for corporate offices and information technology systems and equipment, cash paid for state income taxes, and interest income.

(2) The Senior Housing Leased Portfolio amount includes the $119.2 million one-time cash lease payment.

(3) Adjusted EBITDA for the third quarter of 2020 includes $10.8 million of government grants recognized in other operating income and the one-time cash lease payment.

(4) Excludes changes in prepaid insurance premiums financed with notes payable and lessor capital expenditure reimbursements under operating leases and includes $20.2 million impact related to CARES Act programs for the third quarter of 2020.

7

Segment Overview

3Q20 vs.

YTD 3Q20 vs.

2019

2020

3Q19

YTD 3Q19

($ in 000s, except RevPAR and RevPOR)

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

B(W)

B(W)

Total Senior Housing, Health Care Services, and Management Services

Revenue (1)

$

825,222

$

817,312

$

814,801

$

809,704

$

3,267,039

$

891,422

$

737,705

$

706,440

(13.3)%

(5.0)%

Other operating income

$

-

$

-

$

-

$

-

$

-

$

-

$

26,693

$

10,765

NM

NM

Combined Segment Operating Income

$

239,128

$

227,066

$

199,084

$

211,266

$

876,544

$

302,940

$

158,364

$

146,675

(26.3)%

(8.6)%

Combined Segment Operating Margin (2)

29.0%

27.8%

24.4%

26.1%

26.8%

34.0%

20.7%

20.5%

(390) bps

(150) bps

Senior Housing (see page 9)

Revenue

$

697,947

$

687,429

$

689,452

$

687,843

$

2,762,671

$

687,888

$

641,459

$

610,868

(11.4)%

(6.5)%

Other operating income

$

-

$

-

$

-

$

-

$

-

$

-

$

9,698

$

4,873

NM

NM

Senior Housing Operating Income

$

215,212

$

202,450

$

180,742

$

196,045

$

794,449

$

203,346

$

142,596

$

139,544

(22.8)%

(18.9)%

Senior Housing Operating Margin (2)

30.8%

29.5%

26.2%

28.5%

28.8%

29.6%

21.9%

22.7%

(350) bps

(400) bps

Number of communities (period end)

680

671

671

663

663

661

660

652

(2.8)%

(2.8)%

Period end number of units

55,948

55,209

55,262

54,181

54,181

54,037

54,019

53,110

(3.9)%

(3.9)%

Total Average Units

56,460

55,465

55,258

54,821

55,501

54,184

54,040

53,440

(3.3)%

(3.3)%

RevPAR

$

4,102

$

4,097

$

4,109

$

4,116

$

4,106

$

4,229

$

3,954

$

3,806

(7.4)%

(2.6)%

Weighted average unit occupancy

83.6%

83.5%

84.2%

84.5%

83.9%

83.2%

78.7%

75.3%

(890) bps

(460) bps

RevPOR

$

4,909

$

4,909

$

4,880

$

4,871

$

4,893

$

5,085

$

5,022

$

5,056

3.6%

3.1%

Health Care Services Segment (see page 14)

Revenue

$

111,532

$

114,434

$

111,785

$

109,509

$

447,260

$

94,819

$

90,170

$

89,903

(19.6)%

(18.6)%

Other operating income

$

-

$

-

$

-

$

-

$

-

$

-

$

16,995

$

5,892

NM

NM

Segment Operating Income

$

8,173

$

9,167

$

4,778

$

2,869

$

24,987

$

(9,121)

$

9,692

$

1,462

(69.4)%

(90.8)%

Segment Operating Margin (2)

7.3%

8.0%

4.3%

2.6%

5.6%

(9.6)%

9.0%

1.5%

(280) bps

(580) bps

Management Services Segment

Segment Operating Income (comprised

solely of management fees)

$

15,743

$

15,449

$

13,564

$

12,352

$

57,108

$

108,715

$

6,076

$

5,669

(58.2)%

169.1%

Resident fee revenue under management (3)

$

321,952

$

294,114

$

275,796

$

259,437

$

1,151,299

$

184,145

$

131,558

$

116,576

(57.7)%

(51.5)%

Number of communities (period end) (3)

164

138

123

100

100

80

77

74

(39.8)%

(39.8)%

Period end number of units (3)

23,742

21,451

20,168

18,086

18,086

11,033

10,694

9,980

(50.5)%

(50.5)%

Total Average Units (3)

25,047

22,464

20,730

18,836

21,769

13,325

10,905

10,446

(49.6)%

(49.2)%

Weighted average unit occupancy (3)

82.9%

82.8%

83.4%

84.6%

83.3%

84.0%

78.0%

74.6%

(880) bps

(370) bps

  1. Excludes reimbursed costs on behalf of managed communities.
  2. For the second quarter of 2020, segment operating margin excluding other operating income was 17.8% for Total Senior Housing, Health Care Services and Management Services; 20.7%

for Senior Housing; and (8.1)% for Health Care Services. For the third quarter of 2020, segment operating margin excluding other operating income was 19.2% for Total Senior Housing,

Health Care Services, and Management Services; 22.0% for Senior Housing; and (4.9)% for Health Care Services.

8

(3) Not included in consolidated reported amounts.

Senior Housing Segments

3Q20 vs.

YTD 3Q20 vs.

2019

2020

3Q19

YTD 3Q19

($ in 000s, except RevPAR and RevPOR)

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

B(W)

B(W)

Independent Living

Revenue

$

135,694

$

135,951

$

136,874

$

136,039

$

544,558

$

135,862

$

130,278

$

125,762

(8.1)%

(4.1)%

Other operating income

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

96

NM

NM

Segment Operating Income

$

52,876

$

51,459

$

49,414

$

49,992

$

203,741

$

51,414

$

41,038

$

42,438

(14.1)%

(12.3)%

Segment Operating Margin (1)

39.0%

37.9%

36.1%

36.7%

37.4%

37.8%

31.5%

33.7%

(240) bps

(320) bps

Number of communities (period end)

68

68

68

68

68

68

68

68

-%

-%

Period end number of units

12,430

12,460

12,511

12,514

12,514

12,537

12,534

12,534

0.2%

0.2%

Total Average Units

12,430

12,440

12,511

12,514

12,474

12,529

12,534

12,534

0.2%

0.6%

RevPAR

$

3,602

$

3,592

$

3,581

$

3,545

$

3,580

$

3,615

$

3,465

$

3,345

(6.6)%

(3.3)%

Weighted average unit occupancy

89.8%

89.1%

89.1%

88.7%

89.2%

87.1%

83.5%

80.0%

(910) bps

(580) bps

RevPOR

$

4,012

$

4,033

$

4,018

$

3,994

$

4,014

$

4,151

$

4,147

$

4,182

4.1%

3.5%

Assisted Living and Memory Care

Revenue

$

458,526

$

450,225

$

452,474

$

454,713

$

1,815,938

$

457,479

$

432,156

$

408,695

(9.7)%

(4.6)%

Other operating income

$

-

$

-

$

-

$

-

$

-

$

-

$

152

$

1,936

NM

NM

Segment Operating Income

$

140,699

$

133,144

$

116,856

$

127,937

$

518,636

$

132,001

$

87,708

$

87,152

(25.4)%

(21.5)%

Segment Operating Margin (1)

30.7%

29.6%

25.8%

28.1%

28.6%

28.9%

20.3%

21.2%

(460) bps

(510) bps

Number of communities (period end)

586

577

577

573

573

571

570

563

(2.4)%

(2.4)%

Period end number of units

36,944

36,175

36,177

35,956

35,956

35,789

35,744

35,124

(2.9)%

(2.9)%

Total Average Units

37,477

36,451

36,173

36,140

36,560

35,944

35,785

35,268

(2.5)%

(2.8)%

RevPAR

$

4,070

$

4,092

$

4,127

$

4,135

$

4,106

$

4,242

$

4,025

$

3,863

(6.4)%

(1.2)%

Weighted average unit occupancy

81.6%

82.1%

83.2%

83.6%

82.6%

81.9%

77.8%

74.4%

(880) bps

(420) bps

RevPOR

$

4,988

$

4,987

$

4,962

$

4,948

$

4,971

$

5,178

$

5,172

$

5,193

4.7%

4.1%

CCRCs

Revenue

$

103,727

$

101,253

$

100,104

$

97,091

$

402,175

$

94,547

$

79,025

$

76,411

(23.7)%

(18.1)%

Other operating income

$

-

$

-

$

-

$

-

$

-

$

-

$

9,546

$

2,841

NM

NM

Segment Operating Income

$

21,637

$

17,847

$

14,472

$

18,116

$

72,072

$

19,931

$

13,850

$

9,954

(31.2)%

(18.9)%

Segment Operating Margin (1)

20.9%

17.6%

14.5%

18.7%

17.9%

21.1%

15.6%

12.6%

(190) bps

(100) bps

Number of communities (period end)

26

26

26

22

22

22

22

21

(19.2)%

(19.2)%

Period end number of units

6,574

6,574

6,574

5,711

5,711

5,711

5,741

5,452

(17.1)%

(17.1)%

Total Average Units

6,553

6,574

6,574

6,167

6,467

5,711

5,721

5,638

(14.2)%

(13.4)%

RevPAR

$

5,232

$

5,081

$

5,012

$

5,168

$

5,123

$

5,496

$

4,572

$

4,477

(10.7)%

(5.1)%

Weighted average unit occupancy

82.9%

80.6%

80.4%

81.5%

81.3%

82.4%

74.0%

70.7%

(970) bps

(560) bps

RevPOR

$

6,312

$

6,305

$

6,234

$

6,341

$

6,298

$

6,669

$

6,181

$

6,332

1.6%

1.9%

(1) For the second and third quarter of 2020, segment operating margin excluding other operating income was 31.5% and 33.7%, respectively, for Independent Living; 20.3% and 20.9%

9

respectively, for Assisted Living and Memory Care; and 5.4% and 9.3%, respectively, for CCRCs.

Senior Housing: Same Community(1)

3Q20 vs.

YTD 3Q20 vs.

2019

2020

3Q19

YTD 3Q19

($ in 000s, except RevPAR and RevPOR)

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

B(W)

B(W)

Revenue

$

616,142

$

611,202

$ 613,260

$ 613,935

$ 2,454,539

$ 628,468

$

589,207

$

565,881

(7.7)%

(3.1)%

Other operating income

-

-

-

-

-

-

6,445

3,710

NM

NM

Revenue and other operating income

$

616,142

$

611,202

$ 613,260

$ 613,935

$ 2,454,539

$ 628,468

$

595,652

$

569,591

(7.1)%

(2.5)%

Community Labor Expenses

(269,018)

(271,848)

(285,268)

(284,007)

(1,110,141)

(284,382)

(290,247)

(284,830)

0.2%

(4.0)%

Other facility operating expenses

(141,734)

(143,522)

(148,704)

(139,444)

(573,404)

(155,576)

(171,771)

(150,228)

(1.0)%

(10.1)%

Facility operating expenses (2)

(410,752)

(415,370)

(433,972)

(423,451)

(1,683,545)

(439,958)

(462,018)

(435,058)

(0.3)%

(6.1)%

Same Community Operating

Income

$205,390

$195,832

$179,288

$190,484

$ 770,994

$188,510

$133,634

$134,533

(25.0)%

(21.3)%

Same Community Operating Margin (3)

33.3%

32.0%

29.2%

31.0%

31.4%

30.0%

22.4%

23.6%

(560) bps

(600) bps

Total Average Units

49,348

49,357

49,368

49,371

49,361

49,371

49,364

49,363

-%

-%

RevPAR

$

4,162

$

4,128

$

4,141

$

4,145

$

4,144

$

4,243

$

3,979

$

3,821

(7.7)%

(3.1)%

Weighted average unit occupancy

84.4%

84.0%

84.8%

85.0%

84.6%

83.5%

79.1%

75.6%

(920) bps

(500) bps

RevPOR

$

4,932

$

4,914

$

4,885

$

4,875

$

4,902

$

5,083

$

5,028

$

5,057

3.5%

3.0%

Same Community Operating Income / Weighted Average

Same Community RevPAR

Occupancy

(2)

84.4%

84.0%

84.8%

85.0%

83.5%

$205,390

79.1%

$195,832

$179,288

$190,484

$188,510

75.6%

$133,634

$134,533

1Q 2019

2Q 2019

3Q 2019

4Q 2019

1Q 2020

2Q 2020

3Q 2020

$4,243

$4,162

$4,128

$4,141

$4,145

$3,979

$3,821

1Q 2019

2Q 2019

3Q 2019

4Q 2019

1Q 2020

2Q 2020

3Q 2020

  1. Same Community portfolio reflects 631 communities.
  2. Excludes hurricane and other natural disaster expense of $1.0 million and $1.2 million for the full year 2019 and year to date 2020, respectively.
  3. For the second and third quarter of 2020, same community operating margin excluding other operating income was 21.6% and 23.1%, respectively, for the same community portfolio.

10

Senior Housing Segments: Same Community(1)

3Q20 vs.

YTD 3Q20 vs.

2019

2020

3Q19

YTD 3Q19

($ in 000s, except RevPAR and RevPOR)

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

B(W)

B(W)

Independent Living

Revenue

$ 126,822

$ 126,563

$ 126,823

$ 125,521

$

505,729

$ 127,944

$ 122,716

$ 118,384

(6.7)%

(2.9)%

Other operating income

-

-

-

-

-

-

-

96

NM

NM

Community Labor Expense

(44,502)

(45,748)

(46,498)

(46,552)

(183,300)

(46,297)

(47,588)

(46,094)

0.9%

(2.4)%

Other facility operating expense

(30,823)

(31,048)

(31,947)

(30,672)

(124,490)

(32,867)

(35,904)

(31,293)

2.0%

(6.7)%

Facility operating expense

(75,325)

(76,796)

(78,445)

(77,224)

(307,790)

(79,164)

(83,492)

(77,387)

1.3%

(4.1)%

Same Community Operating Income

$

51,497

$

49,767

$

48,378

$

48,297

$

197,939

$

48,780

$

39,224

$

41,093

(15.1)%

(13.7)%

Same Community Operating Margin

40.6%

39.3%

38.1%

38.5%

39.1%

38.1%

32.0%

34.7%

(340) bps

(440) bps

Total Average Units

11,680

11,690

11,703

11,706

11,695

11,706

11,703

11,703

-%

0.1%

RevPAR

$

3,619

$

3,609

$

3,612

$

3,574

$

3,604

$

3,643

$

3,495

$

3,372

(6.6)%

(3.0)%

Weighted average unit occupancy

89.5%

88.8%

89.4%

88.9%

89.2%

87.3%

83.8%

80.3%

(910) bps

(540) bps

RevPOR

$

4,043

$

4,063

$

4,043

$

4,020

$

4,042

$

4,174

$

4,169

$

4,201

3.9%

3.2%

Assisted Living and Memory Care

Revenue

$ 427,610

$ 425,128

$ 427,413

$ 428,523

$ 1,708,674

$ 439,021

$ 415,718

$ 397,126

(7.1) %

(2.2) %

Other operating income

-

-

-

-

-

-

151

1,937

NM

NM

Community Labor Expense

(193,064)

(194,589)

(206,944)

(205,956)

(800,553)

(205,978)

(210,747)

(207,891)

(0.5) %

(5.0) %

Other facility operating expense

(95,826)

(97,559)

(101,441)

(93,743)

(388,569)

(106,960)

(119,643)

(104,376)

(2.9) %

(12.3) %

Facility operating expense

(288,890)

(292,148)

(308,385)

(299,699)

(1,189,122)

(312,938)

(330,390)

(312,267)

(1.3) %

(7.4) %

Same Community Operating Income

$ 138,720

$ 132,980

$ 119,028

$ 128,824

$

519,552

$ 126,083

$

85,479

$

86,796

(27.1) %

(23.6) %

Same Community Operating Margin

32.4%

31.3%

27.8%

30.1%

30.4%

28.7%

20.6%

21.7%

(610) bps

(670) bps

Total Average Units

34,056

34,055

34,053

34,053

34,054

34,053

34,049

34,048

-%

-%

RevPAR

$

4,185

$

4,161

$

4,184

$

4,195

$

4,181

$

4,297

$

4,070

$

3,888

(7.1)%

(2.2)%

Weighted average unit occupancy

82.6%

82.6%

83.5%

84.0%

83.2%

82.3%

78.2%

74.5%

(900) bps

(460) bps

RevPOR

$

5,065

$

5,040

$

5,010

$

4,996

$

5,028

$

5,220

$

5,207

$

5,216

4.1%

3.5%

CCRCs

Revenue

$

61,710

$

59,511

$

59,024

$

59,891

$

240,136

$

61,503

$

50,773

$

50,371

(14.7) %

(9.8) %

Other operating income

-

-

-

-

-

-

6,294

1,677

NM

NM

Community Labor Expense

(31,452)

(31,511)

(31,826)

(31,499)

(126,288)

(32,107)

(31,912)

(30,845)

3.1 %

(0.1) %

Other facility operating expense

(15,085)

(14,915)

(15,316)

(15,029)

(60,345)

(15,749)

(16,224)

(14,559)

4.9 %

(2.7) %

Facility operating expense

(46,537)

(46,426)

(47,142)

(46,528)

(186,633)

(47,856)

(48,136)

(45,404)

3.7 %

(0.9) %

Same Community Operating Income

$

15,173

$

13,085

$

11,882

$

13,363

$

53,503

$

13,647

$

8,931

$

6,644

(44.1) %

(27.2) %

Same Community Operating Margin

24.6%

22.0%

20.1%

22.3%

22.3%

22.2%

15.7%

12.8%

(730) bps

(520) bps

Total Average Units

3,612

3,612

3,612

3,612

3,612

3,612

3,612

3,612

-%

-%

RevPAR

$

5,695

$

5,492

$

5,447

$

5,527

$

5,540

$

5,676

$

4,686

$

4,648

(14.7) %

(9.8) %

Weighted average unit occupancy

84.4%

82.0%

81.8%

82.4%

82.7%

82.1%

72.9%

70.0%

(1180) bps

(770) bps

RevPOR

$

6,749

$

6,701

$

6,659

$

6,707

$

6,704

$

6,913

$

6,430

$

6,645

(0.2)%

(0.6)%

  1. Same Community portfolio reflects 64 Independent Living communities, 553 Assisted Living and Memory Care communities, and 14 CCRC communities.
  2. For the second and third quarter of 2020, same community operating margin excluding other operating income was 32.0% and 34.6%, respectively, for Independent Living; 20.5% and 21.4%, respectively, for Assisted Living and Memory Care; and 5.2% and 9.9%, respectively, for CCRCs.

11

Senior Housing Owned Portfolio(1)

3Q20 vs.

YTD 3Q20 vs.

2019

2020

3Q19

YTD 3Q19

($ in 000s, except RevPAR and RevPOR)

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

B(W)

B(W)

Revenue

$ 380,691

$ 375,900

$ 377,451

$ 373,793

$ 1,507,835

$ 402,397

$ 376,140

$ 356,105

(5.7)%

0.1%

Other operating income

-

-

-

-

-

-

7,156

3,317

NM

NM

Facility operating expense

(269,078)

(271,222)

(285,422)

(273,557)

(1,099,279)

(290,116)

(301,459)

(284,780)

0.2%

(6.1)%

Owned Portfolio Operating Income

$111,613

$104,678

$

92,029

$100,236

$

408,556

$112,281

$

81,837

$ 74,642

(18.9)%

(12.8)%

Additional Information

Interest expense: property level and

corporate debt

$ (45,643)

$ (45,193)

$ (44,344)

$ (42,538)

$ (177,718)

$ (41,763)

$ (38,974)

$ (36,908)

16.8%

13.0%

Community level capital expenditures,

net (see page 16)

$ (24,967)

$ (33,828)

$ (33,144)

$ (32,055)

$ (123,994)

$ (36,735)

$ (12,011)

$ (12,236)

63.1%

33.7%

Number of communities (period end)

338

336

336

330

330

355

355

350

4.2%

4.2%

Period end number of units

31,397

31,165

31,226

30,160

30,160

32,455

32,481

31,824

1.9%

1.9%

Total Average Units

31,840

31,262

31,222

30,784

31,277

32,513

32,461

32,137

2.9%

3.0%

RevPAR

$

3,969

$

3,976

$

3,982

$

3,984

$

3,978

$

4,125

$

3,862

$

3,694

(7.2)%

(2.3)%

Weighted average occupancy

82.4%

82.6%

83.2%

83.6%

83.0%

82.6%

78.0%

74.2%

(900) bps

(450) bps

RevPOR

$

4,815

$

4,812

$

4,783

$

4,764

$

4,794

$

4,997

$

4,944

$

4,978

4.1%

3.5%

Interest Coverage as of September 30, 2020(2)

1.8x

Net Debt as of September 30, 2020 (see page 18)

$3,420,142

  1. The Company acquired 26 communities that were previously leased during the first quarter of 2020. The results of operations of the previously leased communities are included within the Senior Housing Owned Portfolio beginning in the first quarter of 2020. Prior quarters have not been recast.
  2. As of September 30, 2020, the interest coverage ratio excluding other operating income was 1.8x.

12

Senior Housing Leased Portfolio(1)

3Q20 vs.

YTD 3Q20 vs.

2019

2020

3Q19

YTD 3Q19

($ in 000s, except RevPAR and RevPOR)

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

B(W)

B(W)

Revenue

$ 317,256

$

311,529

$

312,001

$

314,050

$1,254,836

$

285,491

$

265,319

$

254,763

(18.3)%

(14.4)%

Other operating income

-

-

-

-

-

-

2,542

1,556

NM

NM

Facility operating expense

(213,657)

(213,757)

(223,288)

(218,241)

(868,943)

(194,426)

(207,102)

(191,417)

14.3%

8.9%

Leased Portfolio Operating Income

$103,599

$

97,772

$

88,713

$

95,809

$

385,893

$

91,065

$

60,759

$

64,902

(26.8)%

(25.3)%

Additional Information

One-time cash lease payment

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

(119,180)

NM

NM

Other cash facility lease payments on leased

portfolio (see page 17)

$ (93,129)

$

(92,337)

$

(92,337)

$

(92,810)

$ (370,613)

$

(88,503)

$

(85,623)

$

(64,534)

30.1%

14.1%

Community level capital expenditures, net

(see page 16)

$ (18,419)

$

(25,934)

$

(22,162)

$

(13,347)

$

(79,862)

$

(18,413)

$

(1,727)

$

(5,808)

73.8%

61.0%

Number of communities (period end)

342

335

335

333

333

306

305

302

(9.9)%

(9.9)%

Period end number of units

24,551

24,044

24,036

24,021

24,021

21,582

21,538

21,286

(11.4)%

(11.4)%

Total Average Units

24,620

24,203

24,036

24,037

24,224

21,671

21,579

21,303

(11.4)%

(11.4)%

RevPAR

$

4,274

$

4,254

$

4,273

$

4,286

$

4,271

$

4,384

$

4,091

$

3,977

(6.9)%

(2.7)%

Weighted average unit occupancy

85.0%

84.5%

85.4%

85.6%

85.1%

84.1%

79.7%

76.9%

(850) bps

(480) bps

RevPOR

$

5,028

$

5,032

$

5,004

$

5,005

$

5,017

$

5,215

$

5,136

$

5,166

3.2%

3.0%

Lease Coverage as of September 30, 2020, excluding the one-time cash lease payment (2)

0.78x

Pro-forma Lease Coverage (see page 25 for pro forma results)

0.97x

Total operating and financing lease obligations as of September 30, 2020 (see page 30) (3)

$

1,525,535

(A)

Total operating and financing lease obligations divided by pro-forma total cash facility lease payments for the

(A/B)

trailing twelve months ended September 30, 2020

6.1

Pro-forma trailing twelve months ended

Facility Lease Maturity Information as of September 30, 2020

September 30, 2020 (see page 25)

Initial lease maturities

Community count

Total units

Total cash facility lease payments

2021

37

1,637

$

15,192

2022

4

386

3,679

2023

-

-

-

2024

7

904

13,865

2025

121

10,290

101,556

Thereafter

133

8,069

117,199

Total

302

21,286

$

251,491 (B)

  1. The Company acquired 26 communities that were previously leased during the first quarter of 2020. The results of operations of the previously leased communities are included within the Senior Housing Owned Portfolio beginning in the first quarter of 2020. Prior quarters have not been recast.
  2. As of September 30, 2020, the lease coverage ratio, excluding both the one-time cash lease payment and other operating income was 0.76x and was 0.56x including both the one-time cash lease

payment and other operating income.

13

(3) Amount recognized on consolidated balance sheet reflects the discounted future minimum lease payments and the residual value for financing lease obligations.

Health Care Services

3Q20 vs.

YTD 3Q20 vs.

2019

2020

3Q19

YTD 3Q19

($ in 000s)

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

B(W)

B(W)

Revenue

Home health

$

84,185

$

85,233

$

80,632

$

77,440

$

327,490

$

65,948

$

60,935

$

61,586

(23.6)%

(24.6)%

Hospice

21,722

23,184

25,258

26,062

96,226

23,182

23,849

22,997

(9.0)%

(0.2)%

Outpatient Therapy

5,625

6,017

5,895

6,007

23,544

5,689

5,386

5,320

(9.8)%

(6.5)%

Segment revenue

111,532

114,434

111,785

109,509

447,260

94,819

90,170

89,903

(19.6)%

(18.6)%

Other operating income

-

-

-

-

-

-

16,995

5,892

NM

NM

Revenue and other operating income

111,532

114,434

111,785

109,509

447,260

94,819

107,165

95,795

(14.3)%

(11.8)%

Facility operating expense

(103,359)

(105,267)

(107,007)

(106,640)

(422,273)

(103,940)

(97,473)

(94,333)

11.8%

6.3%

Segment Operating Income (Loss)

$

8,173

$

9,167

$

4,778

$

2,869

$

24,987

$

(9,121)

$

9,692

$

1,462

(69.4)%

(90.8)%

Segment Operating Margin(1)

7.3%

8.0%

4.3%

2.6%

5.6%

(9.6)%

9.0%

1.5%

(280) bps

(580) bps

Additional Information

Home health average daily census

15,904

15,966

15,357

14,618

15,457

14,020

12,980

13,146

(14.4)%

(15.0)%

Hospice average daily census

1,428

1,540

1,642

1,704

1,580

1,698

1,646

1,666

1.5%

8.6%

(1) For the second and third quarter of 2020, segment operating margin excluding other operating income was (8.1)% and (4.9)%, respectively.

14

G&A Expense

3Q20 vs.

YTD 3Q20 vs.

Consolidated, unless otherwise noted

2019

2020

3Q19

YTD 3Q19

($ in 000s)

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

B(W)

B(W)

G&A expense allocations (1)

Senior Housing Owned Portfolio allocation

$

15,693

$ 16,875

$

15,759

$

13,553

$ 61,880

$

18,635

$

18,336

$

17,804

(13.0)%

(13.3)%

Senior Housing Leased Portfolio allocation

13,078

13,986

13,027

11,387

51,478

13,221

12,933

12,738

2.2%

3.0%

Health Care Services allocation

7,077

6,730

6,385

5,439

25,631

6,953

5,355

5,158

19.2%

13.5%

Management Services allocation

13,646

13,321

11,399

8,901

47,267

7,848

6,407

6,052

46.9%

47.1%

Subtotal G&A expense allocations

49,494

50,912

46,570

39,280

186,256

46,657

43,031

41,752

10.3%

10.6%

Non-cashstock-based compensation expense

6,356

6,030

5,929

4,711

23,026

5,957

6,119

6,136

(3.5%)

0.6%

Transaction and Organizational Restructuring

Costs

461

634

3,910

5,002

10,007

1,981

3,368

6,250

(59.8%)

(131.7%)

General and administrative expense

$

56,311

$ 57,576

$

56,409

$

48,993

$ 219,289

$

54,595

$

52,518

$

54,138

4.0%

5.3%

3Q20 vs.

YTD 3Q20 vs.

2019

2020

3Q19

YTD 3Q19

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

B(W)

B(W)

Resident fee revenue

$

809,479

$ 801,863

$

801,237

$

797,352

$3,209,931

$

782,707

$

731,629

$

700,771

(12.5)%

(8.2)%

Other operating income

-

-

-

-

-

-

26,693

10,765

NM

NM

Resident fee revenue under management (2)

321,952

294,114

275,796

259,437

1,151,299

184,145

131,558

$

116,576

(57.7)%

(51.5)%

Other operating income under management (2)

-

-

-

-

-

-

8,066

1,497

NM

NM

Total (consolidated and under management)

$1,131,431

$1,095,977

$1,077,033

$1,056,789

$4,361,230

$

966,852

$

897,946

$

829,609

(23.0)%

(18.5)%

Allocated G&A Expense as a Percentage of Resident Fee Revenue and Other Operating Income

(Consolidated and Under Management)

G&A expense (excluding non-cash stock-

based compensation expense and

Transaction and Organizational

Restructuring Costs) (3)

4.4%

4.6%

4.3%

3.7%

4.3%

4.8%

4.8%

5.1%

(80) bps

(60) bps

Non-cashstock-based compensation expense

0.6%

0.6%

0.6%

0.4%

0.5%

0.6%

0.7%

0.7%

(10) bps

(20) bps

G&A expense (excluding Transaction and

Organizational Restructuring Costs)

5.0%

5.2%

4.9%

4.1%

4.8%

5.5%

5.5%

5.8%

(90) bps

(80) bps

Transaction and Organizational Restructuring

Costs

-%

0.1%

0.4%

0.5%

0.2%

0.2%

0.4%

0.7%

(30) bps

(20) bps

G&A expense (including non-cashstock-based

compensation expense and Transaction and

Organizational Restructuring Costs) (3)

5.0%

5.3%

5.2%

4.6%

5.0%

5.6%

5.9%

6.5%

(130) bps

(100) bps

(1) G&A allocations are calculated using a methodology which the Company believes matches the type of general and administrative cost with the community, segment, or portfolio. Some of the allocations are based on direct utilization and some are based on formulas such as unit proportion. G&A allocations presented herein exclude non-cashstock-based compensation expense and Transaction and Organizational Restructuring Costs.

(2) Not included in consolidated reported amounts.

(3) Excluding other operating income and other operating income under management: For the second and third quarters of 2020, G&A expense (excluding non-cashstock-based compensation expense and Transaction and Organizational Restructuring Costs) as a percentage of resident fee revenue (consolidated and under management) was 5.0% and 5.1%, respectively. For the second and third quarters of 2020, G&A expense (including

non-cashstock-based compensation expense and Transaction and Organizational Restructuring Costs) as a percentage of resident fee revenue (consolidated and under management) was 6.1% and 6.6%, respectively.

15

Capital Expenditures

3Q20 vs.

YTD 3Q20 vs.

($ in 000s, except for community level capital

2019

2020

3Q19

YTD 3Q19

expenditures, net, per weighted average unit)

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

B(W)

B(W)

Community level capital expenditures,

including allocations

Senior Housing Owned Portfolio

$

24,967

$

33,828

$

33,144

$

32,055

$

123,994

$

36,735

$

12,011

$

12,236

63.1%

33.7%

Senior Housing Leased Portfolio

18,419

25,934

22,162

13,347

79,862

18,413

1,727

5,808

73.8%

61.0%

Community level capital expenditures, net

(A)

43,386

59,762

55,306

45,402

203,856

55,148

13,738

18,044

67.4%

45.1%

Corporate capital expenditures (includes Health

11,216

6,702

3,815

10,208

31,941

5,408

7,783

4,828

(26.6)%

17.1%

Care Services)

Non-Development Capital Expenditures, net

54,602

66,464

59,121

55,610

235,797

60,556

21,521

22,872

61.3%

41.8%

Development Capital Expenditures, net

5,269

5,354

8,054

5,918

24,595

3,900

2,923

3,090

61.6%

46.9%

Total capital expenditures, net

$

59,871

$

71,818

$

67,175

$

61,528

$

260,392

$

64,456

$

24,444

$

25,962

61.4%

42.2%

Lessor reimbursements: non-development

-

1,000

11,043

22,766

34,809

5,827

8,096

4,056

capital expenditures

Change in related payables

184

(10,576)

5,870

13,413

8,891

(898)

10,938

(2,191)

Total cash paid for capital expenditures

$

60,055

$

62,242

$

84,088

$

97,707

$

304,092

$

69,385

$

43,478

$

27,827

66.9%

31.8%

Senior Housing Total Average Units

(B)

56,460

55,465

55,258

54,821

55,501

54,184

54,040

53,440

(3.3)%

(3.3)%

Community level capital expenditures, net,

per weighted average unit

(A/B) $

768

$

1,077

$

1,001

$

828

$

3,673

$

1,018

$

254

$

338

66.2 %

43.3 %

16

Cash Facility Lease Payments

3Q20 vs.

YTD 3Q20 vs.

2019

2020

3Q19

YTD 3Q19

($ in 000s)

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

B(W)

B(W)

Operating Lease Obligations

Facility lease expense

$

68,668

$

67,689

$

67,253

$

66,056

$

269,666

$

64,481

$

62,379

$

51,620

Operating lease expense adjustment

4,383

4,429

4,814

5,827

19,453

6,733

8,221

117,322

Cash facility operating lease payments

$

73,051

$

72,118

$

72,067

$

71,883

$

289,119

$

71,214

70,600

168,942

(134.4)%

(43.0)%

Financing Lease Obligations

Interest expense: financing lease obligations

$

16,743

$

16,649

$

16,567

$

16,394

$

66,353

$

13,282

$

11,892

$

11,908

Payment of financing lease obligations

5,453

5,500

5,549

5,740

22,242

5,087

4,677

4,548

Cash financing lease payments

$

22,196

$

22,149

$

22,116

$

22,134

$

88,595

$

18,369

$

16,569

16,456

25.6%

22.7%

Total cash facility lease payments (1)

$

95,247

$

94,267

$

94,183

$

94,017

$

377,714

$

89,583

$

87,169

$

185,398

(96.8)%

(27.7)%

One-time cash lease payment

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

(119,180)

Total cash facility lease payments,

excluding the one-time cash lease

payment

$

95,247

$

94,267

$

94,183

$

94,017

$

377,714

$

89,583

$

87,169

$

66,218

29.7%

14.4%

Interest Expense Reconciliation to Income Statement

Interest expense: financing lease obligations

$

16,743

$

16,649

$

16,567

$

16,394

$

66,353

$

13,282

$

11,892

$

11,908

28.1%

25.8%

Interest income

(3,084)

(2,813)

(2,162)

(1,800)

(9,859)

(1,455)

(2,243)

(607)

(71.9)%

(46.6)%

Interest expense: debt

$

45,643

$

45,193

$

44,344

$

42,538

$

177,718

$

41,763

$

38,974

$

36,908

16.8%

13.0%

Interest expense, net

$

59,302

$

59,029

$

58,749

$

57,132

$

234,212

$

53,590

$

48,623

$

48,209

17.9%

15.1%

Amortization of deferred financing costs and

debt premium (discount)

979

986

1,167

1,138

4,270

1,315

1,556

1,730

Interest income

3,084

2,813

2,162

1,800

9,859

1,455

2,243

607

Interest expense per income statement

$

63,365

$

62,828

$

62,078

$

60,070

$

248,341

$

56,360

$

52,422

$

50,546

18.6%

15.4%

(1) Includes cash lease payments for leases of corporate offices and information technology systems and equipment.

17

Capital Structure

Total Liquidity ($ in millions)

$600

$600

$536

$455

$481

$491

(Millions)

$400

$309

$562

$291

$501

$

$491

$200

$164

$172

$

35

$

38

$

-

09/30/2019

12/31/2019

03/31/2020

06/30/2020

09/30/2020

Line of credit available to draw (line terminated 3Q20)

Cash and cash equivalents and marketable securities

Debt Structure(1) ($ in millions)

Variable rate

debt with

interest rate caps

Fixed rate

debt

$1,394

$2,405

36%

61%

$131

3%

Variable rate

debt - unhedged

As of September 30, 2020

Weighted Rate

Fixed rate debt

4.28 %

Variable rate debt (2)

2.50 %

Total debt

3.59 %

Debt (1)(2)

($ in millions)

Maturity

Weighted Rate

2020

$

15

3.94

%

2021

68

4.26

%

2022

348

3.58

%

2023

231

3.52

%

2024

301

4.30

%

Thereafter

2,967

3.51

%

Total

$

3,930

3.59 %

(1)

Includes the carrying value of mortgage debt and

other notes payable of which 98.2%, or $3.9 billion,

represented non-recourseproperty-level mortgage

financings.

(2)

Reflects market rates as of September 30, 2020 and

applicable cap rates for hedged debt.

(3)

Leverage ratios include results of operations of

communities disposed of through the disposition

date.

(4)

Excludes $4.2 million of the non-recurring, non-

Leverage Ratios (3) ($ in 000s)

Annualized

Trailing Twelve Months Ended September 30, 2020

Leverage

Adjusted EBITDAR (4)

(A)

$

652,675

Cash facility operating lease payments (see page 17)

(382,639)

Adjusted EBITDA (4) (5)

270,036

Cash financing lease payments (see page 17)

(73,528)

Adjusted EBITDA after cash financing lease payments (4) (5)

(B)

$

196,508

As of September 30, 2020

Debt

$

3,930,165

Cash and cash equivalents

(354,621)

Marketable securities

(136,136)

Restricted cash held as collateral against existing debt

(19,266)

Net Debt

(C)

3,420,142

17.4 x (C/B)

Operating and financing lease obligations (6)

1,542,781

Adjusted Net Debt

(D)

$

4,962,923

7.6 x (D/A)

cash impact of ASC 842 for 2019 periods (see page

26), and includes the $100.0 million management

agreement termination fee.

(5)

Includes the one-time cash lease payment.

(6)

Excludes operating lease obligations related to

certain non-facility leases for which the related

lease expense is included in Adjusted EBITDAR.

Important Note Regarding Non-GAAP Financial Measures. Adjusted EBITDAR, Adjusted EBITDA, Adjusted EBITDA after cash financing lease payments, Net Debt, and Adjusted Net Debt are financial measures that are not calculated in accordance with GAAP. See "Definitions" and "Non-GAAP Financial Measures" for the definitions of such measures and other important information regarding such measures, including reconciliations to the most comparable GAAP measures.

18

Definitions

Adjusted EBITDA is a non-GAAP performance measure that the Company defines as net income (loss) excluding: benefit/provision for income taxes, non-operating income/ expense items, and depreciation and amortization; and further adjusted to exclude income/expense associated with non-cash,non-operational, transactional, cost reduction or organizational restructuring items that management does not consider as part of the Company's underlying core operating performance and that management believes impact the comparability of performance between periods. For the periods presented herein, such other items include non-cash impairment charges, gain/loss on facility lease termination and modification, operating lease expense adjustment, amortization of deferred gain, change in future service obligation, non-cash stock- based compensation expense, and Transaction and Organizational Restructuring Costs.

Adjusted EBITDAR is a non-GAAP financial measure that the Company defines as Adjusted EBITDA before cash facility operating lease payments.

Adjusted Free Cash Flow is a non-GAAP liquidity measure that the Company defines as net cash provided by (used in) operating activities before: distributions from unconsolidated ventures from cumulative share of net earnings, changes in prepaid insurance premiums financed with notes payable, changes in operating lease liability for lease termination, cash paid/received for gain/loss on facility lease termination and modification, and lessor capital expenditure reimbursements under operating leases; plus: property insurance proceeds and proceeds from refundable entrance fees, net of refunds; less: Non-Development Capital Expenditures and payment of financing lease obligations.

Adjusted Net Debt is a non-GAAP financial measure that the Company defines as Net Debt, plus operating and financing lease obligations. Operating and financing lease obligations exclude operating lease obligations related to certain non-facility leases for which the related lease expense is included in Adjusted EBITDAR.

Combined Segment Operating Income is defined by the Company as resident fee and management fee revenue and other operating income of the Company, less facility operating expense. Combined Segment Operating Income does not include general and administrative expense or depreciation and amortization.

Community Labor Expense is a component of facility operating expense that includes regular and overtime salaries and wages, bonuses, paid-time-off and holiday wages, payroll taxes, contract labor, employee benefits, and workers compensation.

Development Capital Expenditures means capital expenditures for community expansions, major community redevelopment and repositioning projects, and the development of new communities. Amounts of Development Capital Expenditures are presented net of lessor reimbursements.

Interest Coverage is calculated based on the trailing-twelve months Owned Portfolio Operating Income adjusted for an implied 5% management fee and capital expenditures at $350/unit, divided by the trailing-twelve months property level and corporate debt interest expense. For any trailing-twelve month period that includes one or more periods from 2019, an adjustment was made to exclude the 2019 impact of applying the lease accounting standard under ASC 842 for residency agreements.

Lease Coverage is calculated based on the trailing-twelve months Leased Portfolio Operating Income, excluding resident fee revenue, other operating income, and facility operating expense of communities disposed during such period adjusted for an implied 5% management fee and capital expenditures at $350/unit, divided by the trailing-twelve months cash facility lease payments for both operating leases and financing leases, excluding cash lease payments for leases of communities disposed during such period and the one-time cash lease payment to Ventas, corporate offices, and information technology systems and equipment, vehicles and other equipment. For any trailing-twelve month period that includes one or more periods from 2019, an adjustment was made to exclude the 2019 impact of applying the lease accounting standard under ASC 842 for residency agreements.

Leased Portfolio Operating Income is defined by the Company as resident fee revenue and other operating income (excluding Health Care Services segment revenue), less facility operating expense for the Company's Senior Housing Leased Portfolio. Leased Portfolio Operating Income does not include general and administrative expense (unless otherwise noted) or depreciation and amortization.

Net Debt is a non-GAAP financial measure that the Company defines as the total of its debt (mortgage debt and other notes payable) and the outstanding balance on the line of credit, less unrestricted cash, marketable securities, and cash held as collateral against existing debt.

NM means not meaningful.

Non-Development Capital Expenditures is comprised of corporate and community- level capital expenditures, including those related to maintenance, renovations, upgrades, and other major building infrastructure projects for the Company's communities. Non-Development Capital Expenditures does not include capital expenditures for community expansions, major community redevelopment and repositioning projects, and the development of new communities (i.e., Development Capital Expenditures). Amounts of Non-Development Capital Expenditures are presented net of lessor reimbursements.

Owned Portfolio Operating Income is defined by the Company as resident fee revenue and other operating income (excluding Health Care Services segment revenue), less facility operating expense for the Company's Senior Housing Owned Portfolio. Owned Portfolio Operating Income does not include general and administrative expense or depreciation and amortization.

RevPAR, or average monthly senior housing resident fee revenue per available unit, is defined by the Company as resident fee revenue for the corresponding portfolio for the period (excluding Health Care Services segment revenue and entrance fee amortization, and, for the 2019 periods, the additional resident fee revenue recognized as a result of the application of the lease accounting standard under ASC 842), divided by the weighted average number of available units in the corresponding portfolio for the period, divided by the number of months in the period.

19

Definitions

RevPOR, or average monthly senior housing resident fee revenue per occupied unit, is defined by the Company as resident fee revenue for the corresponding portfolio for the period (excluding Health Care Services segment revenue and entrance fee amortization, and, for the 2019 periods, the additional resident fee revenue recognized as a result of the application of the lease accounting standard under ASC 842), divided by the weighted average number of occupied units in the corresponding portfolio for the period, divided by the number of months in the period.

Same Community information reflects operating results and data of a consistent population of communities by excluding the impact of changes in the composition of our portfolio of communities. The operating results exclude hurricane and natural disaster expense and related insurance recoveries, and for the 2019 periods, exclude the additional resident fee revenue and facility operating expense recognized as a result of the application of the lease accounting standard ASC 842. We define our same community portfolio as communities consolidated and operational for the full period in both comparison years. Consolidated communities excluded from the same community portfolio include communities acquired or disposed of since the beginning of the prior year, communities classified as assets held for sale, certain communities planned for disposition, certain communities that have undergone or are undergoing expansion, redevelopment, and repositioning projects, certain communities that have expansion, redevelopment, and repositioning projects that are anticipated to be under construction in the current year, and certain communities that have experienced a casualty event that significantly impacts their operations.

Same Community Operating Income is defined by the Company as resident fee revenue and other operating income (excluding Health Care Services segment revenue and, for the 2019 periods, the additional resident fee revenue recognized as a result of application of the lease accounting standard under ASC 842), less facility operating expense (excluding hurricane and natural disaster expense and related insurance recoveries, and for the 2019 periods, the additional facility operating expense recognized as a result of application of the lease accounting standard under ASC 842) for the Company's Same Community portfolio. Same Community Operating Income does not include general and administrative expense or depreciation and amortization.

Segment Operating Income (Loss) is defined by the Company as segment revenue and other operating income less segment facility operating expense. Segment Operating Income (Loss) does not include general and administrative expense or depreciation and amortization. Management Services Segment Operating Income excludes revenue for reimbursements for which the Company is the primary obligor of costs incurred on behalf of managed communities, and there is no facility operating expense associated with the Management Services segment. See the Segment Information note to the Company's consolidated financial statements for more information regarding the Company's segments.

Senior Housing Leased Portfolio represents Brookdale leased communities and does not include owned or managed communities.

Senior Housing Operating Income is defined by the Company as segment revenue and other operating income less segment facility operating expense for the Company's Independent Living, Assisted Living and Memory Care, and CCRCs segments on an aggregate basis. Senior Housing Operating Income does not include general and administrative expense or depreciation and amortization.

Senior Housing Owned Portfolio represents Brookdale owned communities and does not include leased or managed communities.

Total Average Units represents the average number of units operated during the period.

Transaction and Organizational Restructuring Costs are general and administrative expenses. Transaction costs include those directly related to acquisition, disposition, financing, and leasing activity, the Company's assessment of options and alternatives to enhance stockholder value, and stockholder relations advisory matters, and are primarily comprised of legal, finance, consulting, professional fees, and other third party costs. Organizational restructuring costs include those related to the Company's efforts to reduce general and administrative expense and its senior leadership changes, including severance and retention costs.

20

Appendices

Pro-Forma Financial Information

22

2019 Lease Accounting Standard (ASC 842) Impact

26

Non-GAAP Financial Measures

27

21

Pro-Forma Financial Information

During the period of October 1, 2019 to September 30, 2020, the Company:

  • acquired 27 formerly leased communities and financed the acquisitions with $263.0 million of non-recourse mortgage debt.
  • modified the terms of the amended and restated master lease with Healthpeak.
  • sold its equity interest in the unconsolidated entrance fee CCRC Venture.
  • modified the terms of the master lease with Ventas and paid the one-time cash lease payment.
  • disposed of an aggregate of 13 owned communities, including five communities conveyed to Ventas and eight communities sold.
  • terminated triple-net lease obligations on an aggregate of six communities.
  • transitioned management agreements on 49 net communities.

During the next approximately 12 months, the Company additionally expects:

  • to close on the disposition of one owned community classified as held for sale as of September 30, 2020.
  • termination of its triple-net lease obligation on one community.
  • termination of certain of its management arrangements with third parties as the Company transitions to new operators its management on certain communities.

The pro-forma results on the following pages summarize the Company's actual consolidated results excluding the impact of the lease standard adopted in 2019 and the impact of transactions as follows:

  • The pro-forma table for the third quarter of 2020 table on page 23 reflects the Company's actual consolidated results excluding the impact on those results assuming that the foregoing completed and expected transactions had closed on June 30, 2020.
  • The pro-forma table for the 2020 year to date table on page 24 reflects the Company's actual consolidated results excluding the impact on those results assuming that the foregoing completed and expected transactions had closed on December 31, 2019.
  • The pro-forma table for the twelve months ended September 30, 2020 on page 25 reflects the Company's actual consolidated results excluding the non-recurring,non-cash impact of the lease standard adopted in 2019 for the three months ended December 31, 2019 and the impact on those results assuming that the foregoing completed and expected transactions had closed on September 30, 2019.

The closings of the various pending and expected transactions described above are, or will be, subject to the satisfaction of various conditions, including (where applicable) the receipt of regulatory approvals; however, there can be no assurance that the transactions will close or, if they do, when the actual closings will occur.

22

Pro-Forma Third Quarter 2020

Amounts

Attributable to

Transactions

Actual Results

Amounts

Actual Results

Completed or

Net of Amounts

Attributable to

Net of Amounts

Expected to be

Attributable to

Transactions

Attributable to

Completed after

Completed and

3Q20 Actual

Completed

Completed

September 30,

Pending

Consolidated

Results

during 3Q20

Transactions

2020

Transactions

($ in 000s)

(A)

(B)

(A+B)

(C)

(A+B+C)

Senior Housing weighted average units operated

53,440

(342)

53,098

(279)

52,819

Senior Housing resident fee revenue

$

610,868

$

(3,437)

$

607,431

$

(4,405)

$

603,026

Health Care Services resident fee revenue

89,903

-

89,903

-

89,903

Management fee revenue

5,669

(317)

5,352

(988)

4,364

Other operating income

10,765

-

10,765

-

10,765

Resident and management fee revenue and other

operating income

717,205

(3,754)

713,451

(5,393)

708,058

Facility operating expense

(570,530)

3,272

(567,258)

5,233

(562,025)

General and administrative expense (1)

(41,752)

-

(41,752)

-

(41,752)

Cash facility operating lease payments

(168,942)

119,180

(49,762)

980

(48,782)

Adjusted EBITDA(2)

(64,019)

118,698

54,679

820

55,499

$119.2 million one-time cash lease payment

119,180

(119,180)

-

-

-

Adjusted EBITDA, excluding $119.2 million one-

time cash lease payment

55,161

(482)

54,679

820

55,499

$119.2 million one-time cash lease payment

(119,180)

119,180

-

-

-

Transaction and Organizational Restructuring Costs

(6,250)

-

(6,250)

-

(6,250)

Interest expense, net

(48,209)

801

(47,408)

-

(47,408)

Payment of financing lease obligations

(4,547)

-

(4,547)

-

(4,547)

Changes in working capital (3)

33,794

-

33,794

-

33,794

Other

(2,224)

-

(2,224)

-

(2,224)

Non-Development Capital Expenditures, net

(22,872)

113

(22,759)

21

(22,738)

Adjusted Free Cash Flow

$

(114,327)

$

119,612

$

5,285

$

841

$

6,126

  1. Excludes non-cashstock-based compensation expense and Transaction and Organizational Restructuring Costs. Brookdale scales general and administrative expense following disposal of communities. This is reflected in actual results as they occur.
  2. Adjusted EBITDA includes $10.8 million of government grants recognized into other operating income during the third quarter of 2020 and the one-time cash lease payment.
  3. The pro-forma adjustments do not include assumptions on the impact to changes in working capital.

23

Pro-Forma Third Quarter 2020 YTD

Amounts

Attributable to

Amounts

Transactions

Actual Results

Attributable to

Actual Results

Completed or

Net of Amounts

Transactions

Net of Amounts

Expected to be

Attributable to

Completed on

Attributable to

Completed after

Completed and

YTD 3Q20 Actual

during YTD

Completed

September 30,

Pending

Consolidated

Results

3Q20

Transactions

2020

Transactions

($ in 000s)

(A)

(B)

(A+B)

(C)

(A+B+C)

Senior Housing weighted average units operated

53,888

(803)

53,085

(279)

52,806

Senior Housing resident fee revenue

$

1,940,215

$

(23,935)

$

1,916,280

$

(15,979)

$

1,900,301

Health Care Services resident fee revenue

274,892

-

274,892

-

274,892

Management fee revenue

120,460

(103,393)

17,067

(2,966)

14,101

Other operating income

37,458

-

37,458

-

37,458

Resident and management fee revenue and other

operating income

2,373,025

(127,328)

2,245,697

(18,945)

2,226,752

Facility operating expense

(1,765,046)

22,672

(1,742,374)

16,711

(1,725,663)

General and administrative expense (1)

(131,440)

-

(131,440)

-

(131,440)

Cash facility operating lease payments

(310,756)

162,840

(147,916)

2,614

(145,302)

Adjusted EBITDA (2)

165,783

58,184

223,967

380

224,347

$100.0 million management termination fee

(100,000)

100,000

-

-

-

$119.2 million one-time cash lease payment

119,180

(119,180)

-

-

-

Adjusted EBITDA, excluding $100.0 million

management termination fee and $119.2

184,963

39,004

223,967

380

224,347

million one-time cash lease payment

$100.0 million management termination fee

100,000

(100,000)

-

-

-

$119.2 million one-time cash lease payment

(119,180)

119,180

-

-

-

Transaction and Organizational Restructuring Costs

(11,599)

-

(11,599)

-

(11,599)

Interest expense, net

(150,422)

3,280

(147,142)

190

(146,952)

Payment of financing lease obligations

(14,311)

812

(13,499)

112

(13,387)

Changes in working capital (3)

128,947

-

128,947

-

128,947

Other

(9,143)

-

(9,143)

-

(9,143)

Non-Development Capital Expenditures, net

(104,949)

1,685

(103,264)

238

(103,026)

Adjusted Free Cash Flow

$

4,306

$

63,961

$

68,267

$

920

$

69,187

  1. Excludes non-cashstock-based compensation expense and Transaction and Organizational Restructuring Costs. Brookdale scales general and administrative expense following disposal of communities. This is reflected in actual results as they occur.
  2. Adjusted EBITDA for year-to-date 2020 includes the $100.0 million management agreement termination fee payment received from Healthpeak related to the sale of Brookdale's interest in the entry fee CCRC venture, which closed on January 31, 2020, $37.5 million of government grants recognized into other operating income, and the one-time cash lease payment

(3) The pro-forma adjustments do not include assumptions on the impact to changes in working capital.

24

Pro-Forma Trailing Twelve Months

Amounts

Amounts Attributable

Less: Impact of

Actual Results

Attributable to

Actual Results

to Transactions

Lease Standard

Net of Amounts

Trailing Twelve

Transactions

Net of Amounts

Completed or

Adopted on

Attributable to the

Months Ended

Completed on

Attributable to

Expected to be

January 1, 2019

Lease Standard and

September 30, 2020

or before

Completed

Completed after

on Actual

Completed and

Consolidated

Actual Results

September 30, 2020

Transactions

September 30, 2020

Results(1)

Pending Transactions

($ in 000s)

(A)

(B)

(A+B)

(C)

(D)

(A+B+C+D=E)

Senior Housing weighted average units operated

54,121

(1,038)

53,083

(279)

-

52,804

Senior Housing resident fee revenue

$

2,628,058

$

(43,029)

$

2,585,029

$

(22,365)

$

(10,383)

$

2,552,281

Health Care Services resident fee revenue

384,401

-

384,401

-

-

384,401

Management fee revenue

132,812

(109,631)

23,181

(4,009)

-

19,172

Other operating income

37,458

-

37,458

-

-

37,458

Resident and management fee revenue and other operating

income

3,182,729

(152,660)

3,030,069

(26,374)

(10,383)

2,993,312

Facility operating expense

(2,363,484)

39,636

(2,323,848)

22,821

14,533

(2,286,494)

General and administrative expense (2)

(170,720)

1,250

(169,470)

-

-

(169,470)

Cash facility operating lease payments

(382,639)

186,607

(196,032)

2,614

-

(193,418)

Adjusted EBITDA (3)

265,886

74,833

340,719

(939)

4,150

343,930

$100.0 million management termination fee

(100,000)

100,000

-

-

$119.2 million one-time cash lease payment

119,180

(119,180)

-

-

-

-

Adjusted EBITDA, excluding $100.0 million

management termination fee and $119.2 million one-

time cash lease payment

285,066

55,653

340,719

(939)

4,150

343,930

$100.0 million management termination fee

100,000

(100,000)

-

-

-

-

$119.2 million one-time cash lease payment

(119,180)

119,180

-

-

-

-

Transaction and Organizational Restructuring Costs

(16,601)

-

(16,601)

-

-

(16,601)

Interest expense, net

(207,554)

6,638

(200,916)

828

-

(200,088)

Payment of financing lease obligations

(20,052)

1,976

(18,076)

420

-

(17,656)

Changes in working capital (4)

149,357

-

149,357

-

(16,674)

132,683

Other

(5,660)

-

(5,660)

-

-

(5,660)

Non-Development Capital Expenditures, net

(160,559)

5,216

(155,343)

961

-

(154,382)

Adjusted Free Cash Flow

$

4,817

$

88,663

$

93,480

$

1,270

$

(12,524)

$

82,226

Cash facility operating and financing lease payments

$

456,167

$

(195,253)

$

260,914

$

(3,896)

$

-

$

257,018

  1. See page 26 for more information on the non-recurring,non-cash impact of the lease standard adopted on January 1, 2019. Actual results include the impact of the lease accounting standard effective January 1, 2019.
  2. Excludes non-cashstock-based compensation expense and Transaction and Organizational Restructuring Costs. Brookdale scales general and administrative expense following disposal of communities. This is reflected in actual results as they occur, with the exception of an estimate of the scaling as a result of the transactions with Healthpeak which is included in column B.
  3. Adjusted EBITDA for 2020 includes the $100.0 million management agreement termination fee payment received from Healthpeak related to the sale of Brookdale's interest in the entry fee CCRC venture, which closed on January 31, 2020, and $37.5 million of government grants recognized into other operating income during the second and third quarter of 2020. Adjusted EBITDA for the third quarter and year-to-date of 2020 includes the one-time cash lease payment
  4. The pro-forma adjustments do not include assumptions on the impact to changes in working capital.

Actual Results Less Amounts

Pro-forma (from column E above)

Senior Housing Owned

Senior Housing Leased

Health Care Services

Attributable to Completed and Pending Transactions

Owned and Leased Specifically Identifiable Information, and Other

Portfolio

Portfolio

and Other

(from column E above)

Weighted average units operated

31,674

21,130

-

52,804

Senior Housing and Health Care Services revenue

$

1,490,822

$

1,061,459

$

384,401

$

2,936,682

Facility operating expense

$

(1,123,824)

$

(760,284)

$

(402,386)

$

(2,286,494)

Total cash facility lease payments and interest expense, net

$

(160,215)

$

(251,491)

$

544

$

(411,162)

25

Non-Development Capital Expenditures, net

$

(95,296)

$

(30,860)

$

(28,226)

$

(154,382)

2019 Lease Accounting Standard (ASC 842) Impact

The Company's adoption of the lease accounting standard, effective January 1, 2019, impacted the timing of the revenue and cost recognition associated with its residency agreements. For the full year 2019, the impact of the adoption and application to its residency agreements had a negative, non-recurring net impact of $23.1 million to net income (loss) and Adjusted EBITDA, with no impact to net cash provided by (used in) operating activities or Adjusted Free Cash Flow.

To aid in comparability between periods, the following presentations in this Supplement exclude the negative, non-recurring net impact of adoption of the lease accounting standard:

  1. the Company's results on a Same Community basis, (ii) RevPAR and RevPOR (other than as noted on this page), (iii) Interest Coverage, (iv) lease coverage, and (v) annualized leverage. All other presentations of the Company's 2019 results in this Supplement include the impact of the lease accounting standard effective January 1, 2019.

The following table presents the impact of adoption of the lease accounting standard to the Company's quarterly and full year 2019 results from its application to the Company's residency agreements and costs related thereto for the senior housing portfolio. For the quarterly impact of the adoption for each senior housing segment, see the supplemental information furnished as Exhibit 99.2 to the Current Reports on Form 8-K filed with the SEC on May 6, 2019, August 5, 2019, November 5, 2019, and February 18, 2020.

1Q 2019

2Q 2019

Q3 2019

4Q 2019

Full Year 2019

Assisted

Total Senior

Total Senior

Total Senior

Total Senior

Total Senior

Independent

Living and

($ in 000s, except RevPAR and RevPOR)

Housing

Housing

Housing

Housing

Housing

Living

Memory Care

CCRCs

Resident fee revenue

$

2,780

$

5,299

$

7,958

$

10,383

$

26,420

$

8,725

$

14,686

$

3,009

Facility operating expense

9,210

11,826

13,955

14,533

49,524

12,661

31,560

5,303

Net income (loss) and Adjusted EBITDA

(6,430)

(6,527)

(5,997)

(4,150)

(23,104)

(3,936)

(16,874)

(2,294)

Foregoing impact is offset within working capital

6,430

6,527

5,997

4,150

23,104

3,936

16,874

2,294

Adjusted Free Cash Flow

$

-

$

-

$

-

$

-

$

-

$

- $

- $

-

RevPAR - Including impact of ASC 842

$

4,118

$

4,129

$

4,157

$

4,180

$

4,146

$

3,638

$

4,139

$

5,161

RevPAR - Excluding impact of ASC 842

4,102

4,097

4,109

4,116

4,106

3,580

4,106

5,123

RevPOR - Including impact of ASC 842

$

4,929

$

4,948

$

4,937

$

4,946

$

4,940

$

4,080

$

5,012

$

6,346

RevPOR - Excluding impact of ASC 842

4,909

4,909

4,880

4,871

4,893

4,014

4,971

6,298

26

Non-GAAP Financial Measures

This Supplemental Information contains the financial measures Adjusted EBITDA, Adjusted EBITDAR, Adjusted EBITDA after cash financing lease payments, Adjusted Free Cash Flow, Net Debt, and Adjusted Net Debt (each as defined in the "Definitions" section), which are not calculated in accordance with U.S. GAAP ("GAAP"). Presentations of these non-GAAP financial measures are intended to aid investors in better understanding the factors and trends affecting the Company's performance and liquidity. However, investors should not consider these non-GAAP financial measures as a substitute for financial measures determined in accordance with GAAP, including net income (loss), income (loss) from operations, net cash provided by (used in) operating activities, short-term debt, long-term debt less current portion, or current portion of long-term debt. Investors are cautioned that amounts presented in accordance with the Company's definitions of these non-GAAP financial measures may not be comparable to similar measures disclosed by other companies because not all companies calculate non-GAAP measures in the same manner. Investors are urged to review the reconciliations set forth in this Appendix of these non-GAAP financial measures from the most comparable financial measures determined in accordance with GAAP and to review the information under "Reconciliations of Non-GAAP Financial Measures" in the Company's earnings release dated November 4, 2020 for additional information regarding the Company's use and the limitations of such non-GAAP financial measures.

27

Non-GAAP Financial Measures (continued)

Adjusted EBITDA Reconciliation

2019

2020

Trailing Twelve

Months Ended

($ in 000s)

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

YTD

September 30, 2020

Net income (loss)

$

(42,606)

$

(56,055)

$

(78,508)

$

(91,323)

$

(268,492)

$

369,497

$

(118,420)

$

(124,993)

$

126,084

$

34,761

Provision (benefit) for income taxes

679

633

(1,800)

(1,781)

(2,269)

(15,828)

8,504

14,884

7,560

5,779

Equity in (earnings) loss of unconsolidated

ventures

526

991

2,057

970

4,544

1,008

(438)

293

863

1,833

Loss (gain) on debt modification and

extinguishment, net

67

2,672

2,455

53

5,247

(19,181)

157

7,917

(11,107)

(11,054)

Loss (gain) on sale of assets, net

702

(2,846)

(579)

(4,522)

(7,245)

(372,839)

1,029

(2,209)

(374,019)

(378,541)

Other non-operating (income) loss

(2,988)

(3,199)

(3,763)

(4,815)

(14,765)

(2,662)

(988)

(948)

(4,598)

(9,413)

Interest expense

63,365

62,828

62,078

60,070

248,341

56,360

52,422

50,546

159,328

219,398

Interest income

(3,084)

(2,813)

(2,162)

(1,800)

(9,859)

(1,455)

(2,243)

(607)

(4,305)

(6,105)

Income (loss) from operations

16,661

2,211

(20,222)

(43,148)

(44,498)

14,900

(59,977)

(55,117)

(100,194)

(143,342)

Depreciation and amortization

96,888

94,024

93,550

94,971

379,433

90,738

93,154

87,821

271,713

366,684

Asset impairment

391

3,769

2,094

43,012

49,266

78,226

10,290

8,213

96,729

139,741

Loss (gain) on facility lease termination and

modification, net

209

1,797

-

1,382

3,388

-

-

-

-

1,382

Operating lease expense adjustment

(4,383)

(4,429)

(4,814)

(5,827)

(19,453)

(6,733)

(8,221)

(117,322)

(132,276)

(138,103)

Non-cashstock-based compensation expense

6,356

6,030

5,929

4,711

23,026

5,957

6,119

6,136

18,212

22,923

Transaction and Organizational Restructuring

Costs

461

634

3,910

5,002

10,007

1,981

3,368

6,250

11,599

16,601

Adjusted EBITDA (1) (2)

$

116,583

$

104,036

$

80,447

$

100,103

$

401,169

$

185,069

$

44,733

$

(64,019)

$

165,783

$

265,886

$100.0 million management termination fee

-

-

-

-

-

(100,000)

-

-

(100,000)

(100,000)

$119.2 million one-time cash lease payment

-

-

-

-

-

-

-

119,180

119,180

119,180

Adjusted EBITDA, excluding $100.0

million management termination fee

and $119.2 million cash lease payment

$

116,583

$

104,036

$

80,447

$

100,103

$

401,169

$

85,069

$

44,733

$

55,161

$

184,963

$

285,066

  1. The 2019 periods presented include the non-recurring,non-cash impact associated with the Company's adoption of the lease accounting standard effective January 1, 2019. See page 26 for additional information.
  2. Adjusted EBITDA for the first quarter and year-to-date of 2020 includes the $100.0 million management agreement termination fee payment received from Healthpeak related to the sale of Brookdale's interest in the entry fee CCRC venture, which closed on January 31, 2020. Adjusted EBITDA for the second quarter, third quarter, and year-to-date of 2020 includes $26.7 million. $10.8 million, and $37.5 million of government grants recognized in other operating income during the respective period, and for the third quarter and year-to-date

2020 includes the one-time cash lease payment.

28

Non-GAAP Financial Measures (continued)

Adjusted EBITDAR; Adjusted EBITDA; and Adjusted EBITDA after Cash Financing Lease Payments Reconciliations(1)

Trailing Twelve

Months Ended

($ in 000s)

September 30, 2020

Net income (loss)

$

34,761

Provision (benefit) for income taxes

5,779

Equity in (earnings) loss of unconsolidated ventures

1,833

Loss (gain) on debt modification and extinguishment, net

(11,054)

Loss (gain) on sale of assets, net

(378,541)

Other non-operating (income) loss

(9,413)

Interest expense

219,398

Interest income

(6,105)

Income (loss) from operations

(143,342)

Depreciation and amortization

366,684

Asset impairment

139,741

Loss (gain) on facility lease termination and modification, net

1,382

Facility lease expense

244,536

Non-cashstock-based compensation expense

22,923

Transaction and Organizational Restructuring Costs

16,601

Impact from lease standard

4,150

Adjusted EBITDAR (excluding the lease standard impact)

$

652,675

Facility lease expense

(244,536)

Operating lease expense adjustment

(138,103)

Adjusted EBITDA (excluding the lease standard impact)

$

270,036

Interest expense: financing lease obligations

(53,476)

Payment of financing lease obligations

(20,052)

Adjusted EBITDA after cash financing lease payments (excluding the lease

standard impact)

$

196,508

  1. Excludes $4.2 million of the non-cash,non-recurring impact of the adoption of the lease accounting standard effective January 1, 2019 for the period from October 1, 2019 through December 31, 2019. See page 26 for additional information. Includes the $100.0 million management agreement termination fee payment received from Healthpeak and the $119.2 million one-time cash lease payment.

29

Non-GAAP Financial Measures (continued)

Net Debt and Adjusted Net Debt Reconciliations

($ in 000s)

As of September 30, 2020

Long-term debt (including current portion)

$

3,930,165

Cash and cash equivalents

(354,621)

Marketable securities

(136,136)

Cash held as collateral against existing debt

(19,266)

Net Debt

3,420,142

Operating and financing lease obligations

1,587,606

Operating lease obligations related to certain non-facility leases for

which the related lease expense is included in Adjusted EBITDAR

(44,825)

Adjusted Net Debt

$

4,962,923

Adjusted Net Debt to Adjusted EBITDAR

7.6 x

Net Debt to Adjusted EBITDA after cash financing lease payments

17.4 x

Operating and financing lease obligations

$

1,587,606

Operating lease obligations related to certain non-facility leases for

which the related lease expense is included in Adjusted EBITDAR

(44,825)

Operating lease obligations related to corporate office and

information technology leases

$

(17,246)

Operating and financing lease obligations for Senior Housing

Leased Portfolio

$

1,525,535

30

Non-GAAP Financial Measures (continued)

Adjusted Free Cash Flow Reconciliation

2019

2020

Trailing Twelve

Months Ended

($ in 000s)

1Q

2Q

3Q

4Q

Full Year

1Q

2Q

3Q

YTD

September 30, 2020

Net cash provided by (used in) operating activities

$

(5,009)

$

64,128

$

69,211

$

88,082

$

216,412

$

57,479

$

151,840

$

(77,169)

$

132,150

$

220,232

Net cash provided by (used in) investing activities

(100,073)

19,774

(70,056)

(75,184)

(225,539)

(247,927)

(47,483)

(48,554)

(343,964)

(419,148)

Net cash provided by (used in) financing activities

(16,636)

(87,443)

(8,755)

(26,560)

(139,394)

347,250

(40,726)

96,668

403,192

376,632

Net increase (decrease) in cash, cash equivalents

and restricted cash

$

(121,718)

$

(3,541)

$

(9,600)

$

(13,662)

$

(148,521)

$

156,802

$

63,631

$

(29,055)

$

191,378

$

177,716

Net cash provided by (used in) operating activities

$

(5,009)

$

64,128

$

69,211

$

88,082

$

216,412

$

57,479

$

151,840

$

(77,169)

$

132,150

$

220,232

Distributions from unconsolidated ventures from

cumulative share of net earnings

(749)

(781)

(858)

(1,084)

(3,472)

-

-

(766)

(766)

(1,850)

Changes in prepaid insurance premiums financed

with notes payable

18,842

(6,752)

(6,215)

(5,875)

-

17,434

(5,770)

(5,841)

5,823

(52)

Changes in liabilities for lessor capital expenditure

reimbursements under operating leases

-

(1,000)

(11,043)

(19,262)

(31,305)

(4,088)

(6,421)

(3,131)

(13,640)

(32,902)

Non-development capital expenditures, net

(54,602)

(66,464)

(59,121)

(55,610)

(235,797)

(60,556)

(21,521)

(22,872)

(104,949)

(160,559)

Payment of financing lease obligations

(5,453)

(5,500)

(5,549)

(5,740)

(22,242)

(5,087)

(4,677)

(4,548)

(14,312)

(20,052)

Adjusted Free Cash Flow (1)

$

(46,971)

$

(16,369)

$

(13,575)

$

511

$

(76,404)

$

5,182

$

113,451

$

(114,327)

$

4,306

$

4,817

  1. The first quarter of 2020 includes the $100.0 million management agreement termination fee payment received from Healthpeak related to the sale of Brookdale's interest in the entry fee CCRC venture, which closed on January 31, 2020. The second quarter of 2020 includes $85.0 million of accelerated/advanced Medicare payments received, $34.2 million of Provider Relief Funds and other government grants accepted, and $26.5 million of the employer portion of payroll taxes deferred in the second quarter of 2020. The third quarter of 2020 includes the one-time cash lease payment of $119.2 million, and includes $2.5 million of accelerated/advanced Medicare payments received, $4.4 million of Provider Relief Funds and other government grants accepted, and $23.6 million of employer portion of payroll taxes deferred in the third quarter of 2020.

Brookdale Senior Living Inc.

111 Westwood Place, Suite 400

Brentwood, TN 37027

(615) 221-2250

www.brookdale.com

31

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Brookdale Senior Living Inc. published this content on 04 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 November 2020 22:00:05 UTC