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T
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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£
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-3068069
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer Identification No.)
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111 Westwood Place, Suite 400, Brentwood, Tennessee
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37027
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
£
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Accelerated filer
T
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Non-accelerated filer
£
(Do not check if a smaller reporting company)
|
Smaller reporting company
£
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PAGE
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||
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|
June 30,
2010
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December 31,
2009
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|||||||
Assets
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(Unaudited)
|
|||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 51,345 | $ | 66,370 | ||||
Cash and escrow deposits — restricted
|
129,827 | 109,977 | ||||||
Accounts receivable, net
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79,824 | 75,816 | ||||||
Deferred tax asset
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7,688 | 7,688 | ||||||
Prepaid expenses and other current assets, net
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53,173 | 50,350 | ||||||
Total current assets
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321,857 | 310,201 | ||||||
Property, plant and equipment and leasehold intangibles, net
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3,794,212 | 3,857,774 | ||||||
Cash and escrow deposits — restricted
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90,063 | 73,090 | ||||||
Investment in unconsolidated ventures
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20,930 | 20,512 | ||||||
Goodwill
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109,730 | 109,835 | ||||||
Other intangible assets, net
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182,729 | 198,043 | ||||||
Other assets, net
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78,523 | 76,056 | ||||||
Total assets
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$ | 4,598,044 | $ | 4,645,511 | ||||
Liabilities and Stockholders’ Equity
|
||||||||
Current liabilities
|
||||||||
Current portion of long-term debt
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$ | 277,610 | $ | 166,185 | ||||
Trade accounts payable
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40,432 | 51,612 | ||||||
Accrued expenses
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171,142 | 169,612 | ||||||
Refundable entrance fees and deferred revenue
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299,961 | 290,673 | ||||||
Tenant security deposits
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10,972 | 13,515 | ||||||
Total current liabilities
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800,117 | 691,597 | ||||||
Long-term debt, less current portion
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2,323,064 | 2,459,341 | ||||||
Deferred entrance fee revenue
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73,087 | 69,306 | ||||||
Deferred liabilities
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151,816 | 148,690 | ||||||
Deferred tax liability
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126,547 | 140,313 | ||||||
Other liabilities
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49,936 | 49,682 | ||||||
Total liabilities
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3,524,567 | 3,558,929 | ||||||
Stockholders’ Equity
|
||||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized at June 30, 2010 and December 31, 2009; no shares issued and outstanding
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— | — | ||||||
Common stock, $0.01 par value, 200,000,000 shares authorized at June 30, 2010 and December 31, 2009; 125,484,654 and 124,417,940 shares issued and 124,273,353 and 123,206,639 shares outstanding (including 4,017,583 and 3,915,330 unvested restricted shares), respectively
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1,243 | 1,232 | ||||||
Additional paid-in-capital
|
1,892,836 | 1,882,377 | ||||||
Treasury stock, at cost; 1,211,301 shares at June 30, 2010 and December 31, 2009
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(29,187 | ) | (29,187 | ) | ||||
Accumulated deficit
|
(790,827 | ) | (766,975 | ) | ||||
Accumulated other comprehensive loss
|
(588 | ) | (865 | ) | ||||
Total stockholders’ equity
|
1,073,477 | 1,086,582 | ||||||
Total liabilities and stockholders’ equity
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$ | 4,598,044 | $ | 4,645,511 |
Three Months Ended June 30,
|
Six Months Ended June 30,
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|||||||||||||||
2010
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2009
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2010
|
2009
|
|||||||||||||
Revenue
|
||||||||||||||||
Resident fees
|
$ | 547,560 | $ | 499,459 | $ | 1,090,589 | $ | 995,688 | ||||||||
Management fees
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1,412 | 1,298 | 2,807 | 3,015 | ||||||||||||
Total revenue
|
548,972 | 500,757 | 1,093,396 | 998,703 | ||||||||||||
Expense
|
||||||||||||||||
Facility operating expense (excluding depreciation and amortization of $52,174, $45,558, $104,207 and $91,251, respectively)
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353,051 | 316,586 | 708,375 | 634,698 | ||||||||||||
General and administrative expense (including non-cash stock-based compensation expense of $5,105, $6,871, $9,976 and $13,680, respectively)
|
31,834 | 31,721 | 63,786 | 65,428 | ||||||||||||
Facility lease expense
|
67,175 | 68,434 | 135,424 | 136,175 | ||||||||||||
Depreciation and amortization
|
73,168 | 67,262 | 146,229 | 135,395 | ||||||||||||
Total operating expense
|
525,228 | 484,003 | 1,053,814 | 971,696 | ||||||||||||
Income from operations
|
23,744 | 16,754 | 39,582 | 27,007 | ||||||||||||
Interest income
|
453 | 328 | 1,080 | 1,148 | ||||||||||||
Interest expense:
|
||||||||||||||||
Debt
|
(33,903 | ) | (33,450 | ) | (67,183 | ) | (66,271 | ) | ||||||||
Amortization of deferred financing costs and debt discount
|
(2,410 | ) | (3,390 | ) | (5,006 | ) | (4,932 | ) | ||||||||
Change in fair value of derivatives and amortization
|
(2,207 | ) | 7,900 | (4,847 | ) | 3,615 | ||||||||||
Loss on extinguishment of debt, net
|
(682 | ) | (1,740 | ) | (701 | ) | (1,740 | ) | ||||||||
Equity in earnings of unconsolidated ventures
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119 | 581 | 516 | 1,176 | ||||||||||||
Other non-operating (expense) income
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— | (8 | ) | — | 4,224 | |||||||||||
Loss before income taxes
|
(14,886 | ) | (13,025 | ) | (36,559 | ) | (35,773 | ) | ||||||||
Benefit for income taxes
|
5,329 | 2,495 | 12,707 | 11,607 | ||||||||||||
Net loss
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$ | (9,557 | ) | $ | (10,530 | ) | $ | (23,852 | ) | $ | (24,166 | ) | ||||
Basic and diluted loss per share
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$ | (0.08 | ) | $ | (0.10 | ) | $ | (0.20 | ) | $ | (0.23 | ) | ||||
Weighted average shares used in computing basic and diluted loss per share
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119,721 | 106,042 | 119,519 | 103,902 |
Common Stock | ||||||||||||||||||||||||||||
Shares | Amount |
Additional
Paid-In-
Capital
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Treasury
Stock
|
Accumulated Deficit
|
Accumulated
Other
Comprehensive
Loss
|
Total | ||||||||||||||||||||||
Balances at January 1, 2010
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123,206 | $ | 1,232 | $ | 1,882,377 | $ | (29,187 | ) | $ | (766,975 | ) | $ | (865 | ) | $ | 1,086,582 | ||||||||||||
Compensation expense related to restricted stock and restricted stock unit grants
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― | ― | 9,976 | ― | ― | ― | 9,976 | |||||||||||||||||||||
Net loss
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― | ― | ― | ― | (23,852 | ) | ― | (23,852 | ) | |||||||||||||||||||
Issuance of common stock under Associate Stock Purchase Plan
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31 | ― | 494 | ― | ― | ― | 494 | |||||||||||||||||||||
Restricted stock, net
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1,036 | 11 | (11 | ) | ― | ― | ― | ― | ||||||||||||||||||||
Reclassification of net loss on derivatives into earnings
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― | ― | ― | ― | ― | 267 | 267 | |||||||||||||||||||||
Amortization of payments from settlement of forward interest rate swaps
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― | ― | ― | ― | ― | 188 | 188 | |||||||||||||||||||||
Other
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― | ― | ― | ― | ― | (178 | ) | (178 | ) | |||||||||||||||||||
Balances at June 30, 2010
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124,273 | $ | 1,243 | $ | 1,892,836 | $ | (29,187 | ) | $ | (790,827 | ) | $ | (588 | ) | $ | 1,073,477 |
Six Months Ended
June 30,
|
||||||||
2010
|
2009
|
|||||||
Cash Flows from Operating Activities
|
||||||||
Net loss
|
$ | (23,852 | ) | $ | (24,166 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities:
|
||||||||
Loss on extinguishment of debt, net
|
701 | 1,740 | ||||||
Depreciation and amortization
|
151,235 | 140,327 | ||||||
Equity in earnings of unconsolidated ventures
|
(516 | ) | (1,176 | ) | ||||
Distributions from unconsolidated ventures from cumulative share of net earnings
|
375 | 11 | ||||||
Amortization of deferred gain
|
(2,172 | ) | (2,171 | ) | ||||
Amortization of entrance fees
|
(11,526 | ) | (10,342 | ) | ||||
Proceeds from deferred entrance fee revenue
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17,904 | 10,590 | ||||||
Deferred income tax benefit
|
(13,943 | ) | (11,517 | ) | ||||
Change in deferred lease liability
|
5,297 | 8,280 | ||||||
Change in fair value of derivatives and amortization
|
4,847 | (3,615 | ) | |||||
Loss (gain) on sale of assets
|
144 | (4,352 | ) | |||||
Change in future service obligation
|
(1,064 | ) | — | |||||
Non-cash stock-based compensation
|
9,976 | 13,680 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
(2,706 | ) | (1,613 | ) | ||||
Prepaid expenses and other assets, net
|
(1,870 | ) | (4,484 | ) | ||||
Accounts payable and accrued expenses
|
(9,790 | ) | 11,813 | |||||
Tenant refundable fees and security deposits
|
(2,269 | ) | (12,076 | ) | ||||
Deferred revenue
|
4,630 | 8,310 | ||||||
Other
|
(10,630 | ) | (6,167 | ) | ||||
Net cash provided by operating activities
|
114,771 | 113,072 | ||||||
Cash Flows from Investing Activities
|
||||||||
Decrease in lease security deposits and lease acquisition deposits, net
|
801 | 1,480 | ||||||
Increase in cash and escrow deposits — restricted
|
(36,360 | ) | (53,867 | ) | ||||
Net proceeds from the sale of property, plant and equipment
|
— | 210 | ||||||
Additions to property, plant and equipment and leasehold intangibles, net of related payables
|
(45,510 | ) | (62,934 | ) | ||||
Acquisition of assets, net of related payables and cash received
|
(21,809 | ) | (190 | ) | ||||
Payment on (issuance of) notes receivable, net
|
169 | (795 | ) | |||||
Investment in unconsolidated ventures
|
(1,053 | ) | (1,106 | ) | ||||
Distributions received from unconsolidated ventures
|
47 | 790 | ||||||
Proceeds from sale of assets
|
1,487 | ― | ||||||
Proceeds from sale leaseback transaction
|
― | 9,166 | ||||||
Proceeds from sale of unconsolidated venture
|
― | 8,831 | ||||||
Other
|
(316 | ) | ― | |||||
Net cash used in investing activities
|
(102,544 | ) | (98,415 | ) | ||||
Cash Flows from Financing Activities
|
||||||||
Proceeds from debt
|
168,684 | 50,519 | ||||||
Repayment of debt and capital lease obligation
|
(192,954 | ) | (15,733 | ) | ||||
Proceeds from line of credit
|
60,000 | 60,446 | ||||||
Repayment of line of credit
|
(60,000 | ) | (219,899 | ) | ||||
Payment of financing costs, net of related payables
|
(6,044 | ) | (7,327 | ) | ||||
Proceeds from public equity offering, net
|
— | 163,908 | ||||||
Other
|
(44 | ) | (476 | ) | ||||
Refundable entrance fees:
|
||||||||
Proceeds from refundable entrance fees
|
15,061 | 7,736 | ||||||
Refunds of entrance fees
|
(11,122 | ) | (12,193 | ) | ||||
Cash portion of loss on extinguishment of debt
|
(179 | ) | — | |||||
Recouponing and payment of swap termination
|
(654 | ) | — | |||||
Net cash (used in) provided by financing activities
|
(27,252 | ) | 26,981 | |||||
Net (decrease) increase in cash and cash equivalents
|
(15,025 | ) | 41,638 | |||||
Cash and cash equivalents at beginning of period
|
66,370 | 53,973 | ||||||
Cash and cash equivalents at end of period
|
$ | 51,345 | $ | 95,611 |
Shares Granted
|
Value Per Share
|
Total Value
|
||||||||||
Three months ended March 31, 2010
|
64 | $17.95 – $18.19 | $ | 1,151 | ||||||||
Three months ended June 30, 2010
|
1,146 | $16.85 – $21.36 | $ | 19,312 |
Retirement
Centers
|
Assisted
Living
|
Total
|
||||||||||
Balance at December 31, 2009
|
$ | 7,155 | $ | 102,680 | $ | 109,835 | ||||||
Adjustments
|
— | (105 | ) | (105 | ) | |||||||
Balance at June 30, 2010
|
$ | 7,155 | $ | 102,575 | $ | 109,730 |
June 30, 2010
|
December 31, 2009
|
|||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
|
|||||||||||||||||||
Community purchase options
|
$ | 147,782 | $ | (12,018 | ) | $ | 135,764 | $ | 147,682 | $ | (10,169 | ) | $ | 137,513 | ||||||||||
Management contracts and other
|
158,041 | (124,892 | ) | 33,149 | 158,041 | (109,323 | ) | 48,718 | ||||||||||||||||
Home health licenses
|
13,816 | — | 13,816 | 11,812 | — | 11,812 | ||||||||||||||||||
Total
|
$ | 319,639 | $ | (136,910 | ) | $ | 182,729 | $ | 317,535 | $ | (119,492 | ) | $ | 198,043 |
June 30,
2010
|
December 31,
2009
|
|||||||
Land
|
$ | 272,136 | $ | 272,737 | ||||
Buildings and improvements
|
3,009,315 | 2,968,659 | ||||||
Furniture and equipment
|
357,085 | 334,553 | ||||||
Resident and operating lease intangibles
|
603,276 | 599,618 | ||||||
Construction in progress
|
15,603 | 17,702 |
Assets under capital and financing leases
|
605,787 | 606,224 | ||||||
4,863,202 | 4,799,493 | |||||||
Accumulated depreciation and amortization
|
(1,068,990 | ) | (941,719 | ) | ||||
Property, plant and equipment and leasehold intangibles, net
|
$ | 3,794,212 | $ | 3,857,774 |
June 30,
2010
|
December 31,
2009
|
|||||||
Mortgage notes payable due 2010 through 2020; weighted average interest rate of 4.99% for the six months ended June 30, 2010 (weighted average interest rate of 4.70% in 2009)
|
$ | 1,401,522 | $ | 1,416,732 | ||||
$150,000 Series A notes payable, secured by five communities and by a $3.0 million letter of credit, bearing interest at LIBOR plus 0.88%, payable in monthly installments of interest only until August 2011 and payable in monthly installments of principal and interest through maturity in August 2013
|
150,000 | 150,000 | ||||||
Mortgages payable due 2012; weighted average interest rate of 5.64% for the six months ended June 20, 2010 (weighted average interest rate of 5.64% in 2009), payable interest only through July 2010 and payable in monthly installments of principal and interest through maturity in July 2012, secured by the underlying assets of the portfolio
|
212,407 | 212,407 | ||||||
Discount mortgage note payable due 2013, weighted average interest rate of 2.50% for the six months ended June 30, 2010 (weighted average interest rate of 2.45% in 2009), net of debt discount of $5.8 million as of June 30, 2010
|
78,954 | 78,631 | ||||||
Variable rate tax-exempt bonds credit-enhanced by Fannie Mae; weighted average interest rate of 1.75% for the six months ended June 30, 2010 (weighted average interest rate of 1.84% in 2009), due 2032, payable interest only until maturity, secured by the underlying assets of the portfolio
|
100,841 | 100,841 | ||||||
Capital and financing lease obligations payable through 2023; weighted average interest rate of 8.76% for the six months ended June 30, 2010 (weighted average interest rate of 8.74% in 2009)
|
341,770 | 351,735 | ||||||
Mortgage note, bearing interest at a variable rate of LIBOR plus 0.70%, payable interest only through maturity in August 2012. The note is secured by 15 of the Company’s communities and an $11.5 million guaranty by the Company
|
315,180 | 315,180 | ||||||
Total debt
|
2,600,674 | 2,625,526 | ||||||
Less current portion
|
(277,610 | ) | (166,185 | ) | ||||
Total long-term debt
|
$ | 2,323,064 | $ | 2,459,341 |
Current notional balance
|
$ | 351,840 | ||
Highest possible notional
|
$ | 351,840 | ||
Lowest interest rate
|
3.24 | % | ||
Highest interest rate
|
4.47 | % | ||
Average fixed rate
|
3.74 | % | ||
Earliest maturity date
|
2011 | |||
Latest maturity date
|
2014 | |||
Weighted average original maturity
|
4.7 years
|
|||
Estimated liability fair value (included in other liabilities at June 30, 2010)
|
$ | (20,035 | ) | |
Estimated asset fair value (included in other assets, net at June 30, 2010)
|
$ | — |
Current notional balance
|
$ | 925,865 | ||
Highest possible notional
|
$ | 925,865 | ||
Lowest interest rate
|
4.96 | % | ||
Highest interest rate
|
6.50 | % | ||
Average fixed rate
|
5.82 | % | ||
Earliest maturity date
|
2011 | |||
Latest maturity date
|
2012 | |||
Weighted average original maturity
|
3.2 years
|
|||
Estimated liability fair value (included in other liabilities at June 30, 2010)
|
$ | — | ||
Estimated asset fair value (included in other assets, net at June 30, 2010)
|
$ | 123 |
Six Months Ended June 30,
|
||||||||
2010
|
2009
|
|||||||
Supplemental Disclosure of Cash Flow Information:
|
||||||||
Interest paid
|
$ | 67,219 | $ | 67,850 | ||||
Income taxes paid
|
$ | 1,413 | $ | 1,419 | ||||
Write-off of deferred costs
|
$ | 2,022 | $ | 1,740 | ||||
Supplemental Schedule of Non-cash Operating, Investing and Financing Activities:
|
||||||||
Capital leases:
|
||||||||
Property, plant and equipment and leasehold intangibles, net
|
$ | — | $ | 18,236 | ||||
Long-term debt
|
— | (18,236 | ) | |||||
Net
|
$ | — | $ | — | ||||
Acquisition of assets, net of related payables and cash received:
|
||||||||
Property, plant and equipment and leasehold intangibles, net
|
$ | 19,900 | $ | — | ||||
Other intangible assets, net
|
2,004 | 190 | ||||||
Accrued expenses
|
(95 | ) | — | |||||
Net
|
$ | 21,809 | $ | 190 | ||||
Reclassification of other intangibles, net
|
$ | — | $ | 146 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Cash basis payment
|
$ | 66,100 | $ | 65,487 | $ | 132,299 | $ | 130,066 | ||||||||
Straight-line expense
|
2,161 | 4,032 | 5,297 | 8,280 | ||||||||||||
Amortization of deferred gain
|
(1,086 | ) | (1,085 | ) | (2,172 | ) | (2,171 | ) | ||||||||
Facility lease expense
|
$ | 67,175 | $ | 68,434 | $ | 135,424 | $ | 136,175 |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net loss
|
$ | (9,557 | ) | $ | (10,530 | ) | $ | (23,852 | ) | $ | (24,166 | ) | ||||
Reclassification of net loss on derivatives out of earnings
|
143 | 123 | 267 | 246 | ||||||||||||
Amortization of payments from settlement of forward interest rate swaps
|
94 | 94 | 188 | 188 | ||||||||||||
Other
|
(93 | ) | (254 | ) | (178 | ) | (169 | ) | ||||||||
Total comprehensive loss
|
$ | (9,413 | ) | $ | (10,567 | ) | $ | (23,575 | ) | $ | (23,901 | ) |
Total Carrying
Value at
June 30, 2010
|
Quoted prices
in active
markets
(Level 1)
|
Significant
other
observable
inputs
(Level 2)
|
Significant unobservable
inputs
(Level 3)
|
|||||||||||||
Derivative assets
|
$ | 123 | $ | — | $ | 123 | $ | — | ||||||||
Derivative liabilities
|
(20,035 | ) | — | (20,035 | ) | — | ||||||||||
$ | (19,912 | ) | $ | — | $ | (19,912 | ) | $ | — |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Revenue
(1)
|
||||||||||||||||
Retirement Centers
|
$ | 132,209 | $ | 123,915 | $ | 263,792 | $ | 247,158 | ||||||||
Assisted Living
|
254,748 | 228,819 | 506,244 | 457,894 | ||||||||||||
CCRCs
|
160,603 | 146,725 | 320,553 | 290,636 | ||||||||||||
Management Services
|
1,412 | 1,298 | 2,807 | 3,015 | ||||||||||||
$ | 548,972 | $ | 500,757 | $ | 1,093,396 | $ | 998,703 | |||||||||
Segment operating income
(2)
|
||||||||||||||||
Retirement Centers
|
$ | 54,963 | $ | 53,916 | $ | 108,148 | $ | 106,052 | ||||||||
Assisted Living
|
91,813 | 83,959 | 180,599 | 167,254 | ||||||||||||
CCRCs
|
47,733 | 44,998 | 93,467 | 87,684 | ||||||||||||
Management Services
|
988 | 909 | 1,965 | 2,110 | ||||||||||||
$ | 195,497 | $ | 183,782 | $ | 384,179 | $ | 363,100 | |||||||||
General and administrative (including non-cash stock-based compensation expense)
(3)
|
$ | 31,410 | $ | 31,332 | $ | 62,944 | $ | 64,523 | ||||||||
Facility lease expense
|
67,175 | 68,434 | 135,424 | 136,175 | ||||||||||||
Deprecation and amortization
|
73,168 | 67,262 | 146,229 | 135,395 | ||||||||||||
Income from operations
|
$ | 23,744 | $ | 16,754 | $ | 39,582 | $ | 27,007 | ||||||||
As of
|
||||||||||||||||
June 30,
2010
|
December 31,
2009
|
|||||||||||||||
Total assets
|
||||||||||||||||
Retirement Centers
|
$ | 1,113,900 | $ | 1,109,794 | ||||||||||||
Assisted Living
|
1,480,311 | 1,519,693 | ||||||||||||||
CCRCs
|
1,656,727 | 1,685,832 | ||||||||||||||
Corporate and Management Services
|
347,106 | 330,192 | ||||||||||||||
Total assets
|
$ | 4,598,044 | $ | 4,645,511 |
(1)
|
All revenue is earned from external third parties in the United States.
|
(2)
|
Segment operating income is defined as segment revenues less segment operating expenses (excluding depreciation and amortization).
|
(3)
|
Net of general and administrative costs allocated to management services reporting segment.
|
Three Months Ended
June 30,
|
Increase
(Decrease)
|
|||||||||||||||
2010
|
2009
|
Amount
|
Percent
|
|||||||||||||
Total revenues
|
$ | 549.0 | $ | 500.8 | $ | 48.2 | 9.6 | % | ||||||||
Net loss
|
$ | (9.6 | ) | $ | (10.5 | ) | $ | (0.9 | ) | (8.6 | %) | |||||
Adjusted EBITDA
|
$ | 100.3 | $ | 92.1 | $ | 8.2 | 8.9 | % | ||||||||
Cash From Facility Operations
|
$ | 57.0 | $ | 52.5 | $ | 4.5 | 8.6 | % | ||||||||
Facility Operating Income
|
$ | 187.7 | $ | 177.6 | $ | 10.1 | 5.7 | % |
Six Months Ended
June 30,
|
Increase
(Decrease)
|
|||||||||||||||
2010
|
2009
|
Amount
|
Percent
|
|||||||||||||
Total revenues
|
$ | 1,093.4 | $ | 998.7 | $ | 94.7 | 9.5 | % | ||||||||
Net loss
|
$ | (23.9 | ) | $ | (24.2 | ) | $ | (0.3 | ) | (1.2 | %) | |||||
Adjusted EBITDA
|
$ | 196.6 | $ | 178.0 | $ | 18.6 | 10.4 | % | ||||||||
Cash From Facility Operations
|
$ | 111.4 | $ | 102.7 | $ | 8.7 | 8.5 | % | ||||||||
Facility Operating Income
|
$ | 369.6 | $ | 350.6 | $ | 19.0 | 5.4 | % |
Three Months Ended
June 30,
|
||||||||||||||||
2010
|
2009
|
Increase
(Decrease)
|
% Increase
(Decrease)
|
|||||||||||||
Statement of Operations Data:
|
||||||||||||||||
Revenue
|
||||||||||||||||
Resident fees
|
||||||||||||||||
Retirement Centers
|
$ | 132,209 | $ | 123,915 | $ | 8,294 | 6.7 | % | ||||||||
Assisted Living
|
254,748 | 228,819 | 25,929 | 11.3 | % | |||||||||||
CCRCs
|
160,603 | 146,725 | 13,878 | 9.5 | % | |||||||||||
Total resident fees
|
547,560 | 499,459 | 48,101 | 9.6 | % | |||||||||||
Management fees
|
1,412 | 1,298 | 114 | 8.8 | % | |||||||||||
Total revenue
|
548,972 | 500,757 | 48,215 | 9.6 | % | |||||||||||
Expense
|
||||||||||||||||
Facility operating expense
|
||||||||||||||||
Retirement Centers
|
77,246 | 69,999 | 7,247 | 10.4 | % | |||||||||||
Assisted Living
|
162,935 | 144,860 | 18,075 | 12.5 | % | |||||||||||
CCRCs
|
112,870 | 101,727 | 11,143 | 11.0 | % | |||||||||||
Total facility operating expense
|
353,051 | 316,586 | 36,465 | 11.5 | % | |||||||||||
General and administrative expense
|
31,834 | 31,721 | 113 | 0.4 | % | |||||||||||
Facility lease expense
|
67,175 | 68,434 | (1,259 | ) | (1.8 | %) | ||||||||||
Depreciation and amortization
|
73,168 | 67,262 | 5,906 | 8.8 | % | |||||||||||
Total operating expense
|
525,228 | 484,003 | 41,225 | 8.5 | % | |||||||||||
Income from operations
|
23,744 | 16,754 | 6,990 | 41.7 | % | |||||||||||
Interest income
|
453 | 328 | 125 | 38.1 | % | |||||||||||
Interest expense
|
||||||||||||||||
Debt
|
(33,903 | ) | (33,450 | ) | 453 | 1.4 | % | |||||||||
Amortization of deferred financing costs and debt discount
|
(2,410 | ) | (3,390 | ) | (980 | ) | (28.9 | %) | ||||||||
Change in fair value of derivatives and amortization
|
(2,207 | ) | 7,900 | (10,107 | ) | (127.9 | %) | |||||||||
Equity in earnings of unconsolidated ventures
|
119 | 581 | (462 | ) | (79.5 | %) | ||||||||||
Loss on extinguishment of debt, net
|
(682 | ) | (1,740 | ) | (1,058 | ) | (60.8 | %) | ||||||||
Other non-operating loss
|
— | (8 | ) | (8 | ) | (100.0 | %) | |||||||||
Loss before income taxes
|
(14,886 | ) | (13,025 | ) | 1,861 | 14.3 | % | |||||||||
Benefit for income taxes
|
5,329 | 2,495 | 2,834 | 113.6 | % | |||||||||||
Net loss
|
$ | (9,557 | ) | $ | (10,530 | ) | $ | (973 | ) | (9.2 | %) | |||||
Selected Operating and Other Data:
|
||||||||||||||||
Total number of communities (at end of period)
|
564 | 546 | 18 | 3.3 | % | |||||||||||
Total units operated
(1)
|
50,810 | 49,183 | 1,627 | 3.3 | % | |||||||||||
Owned/leased communities units
|
47,128 | 44,865 | 2,263 | 5.0 | % | |||||||||||
Owned/leased communities occupancy rate (weighted average)
(2)
|
86.8 | % | 86.2 | % | 0.6 | % | 0.7 | % | ||||||||
Average monthly revenue per unit
(3)
|
$ | 4,415 | $ | 4,258 | $ | 157 | 3.7 | % |
(1)
|
Total units operated represent the average units operated during the period, excluding equity homes.
|
(2)
|
Excluding the impact of current quarter expansion openings, for the three months ended June 30, 2010, owned/leased communities occupancy rate was 87.0% and CCRCs occupancy rate was 84.9%.
|
(3)
|
Average monthly revenue per unit represents the average of the total monthly revenues, excluding amortization of entrance fees, divided by average occupied units.
|
(4)
|
Includes $5.6 million of first generation entrance fee receipts (which represent initial entrance fees received from the sale of units at a newly opened entrance fee CCRC) during the three months ended June 30, 2010.
|
Three Months Ended June 30,
|
||||||||||||||||
2010
|
2009
|
|||||||||||||||
Resident fee revenues
|
$ | 547,560 | 94.1 | % | $ | 499,459 | 92.7 | % | ||||||||
Resident fee revenues under management
|
34,282 | 5.9 | % | 39,247 | 7.3 | % | ||||||||||
Total
|
$ | 581,842 | 100.0 | % | $ | 538,706 | 100.0 | % | ||||||||
General and administrative expenses (excluding non-cash compensation expense)
|
$ | 26,729 | 4.6 | % | $ | 24,850 | 4.6 | % | ||||||||
Non-cash compensation expense
|
5,105 | 0.9 | % | 6,871 | 1.3 | % | ||||||||||
General and administrative expenses (including non-cash compensation expense)
|
$ | 31,834 | 5.5 | % | $ | 31,721 | 5.9 | % |
Six Months Ended
June 30,
|
||||||||||||||||
2010
|
2009
|
Increase
(Decrease)
|
% Increase
(Decrease)
|
|||||||||||||
Statement of Operations Data:
|
||||||||||||||||
Revenue
|
||||||||||||||||
Resident fees
|
||||||||||||||||
Retirement Centers
|
$ | 263,792 | $ | 247,158 | $ | 16,634 | 6.7 | % | ||||||||
Assisted Living
|
506,244 | 457,894 | 48,350 | 10.6 | % | |||||||||||
CCRCs
|
320,553 | 290,636 | 29,917 | 10.3 | % | |||||||||||
Total resident fees
|
1,090,589 | 995,688 | 94,901 | 9.5 | % | |||||||||||
Management fees
|
2,807 | 3,015 | (208 | ) | (6.9 | %) | ||||||||||
Total revenue
|
1,093,396 | 998,703 | 94,693 | 9.5 | % | |||||||||||
Expense
|
||||||||||||||||
Facility operating expense
|
||||||||||||||||
Retirement Centers
|
155,644 | 141,106 | 14,538 | 10.3 | % | |||||||||||
Assisted Living
|
325,645 | 290,640 | 35,005 | 12.0 | % | |||||||||||
CCRCs
|
227,086 | 202,952 | 24,134 | 11.9 | % | |||||||||||
Total facility operating expense
|
708,375 | 634,698 | 73,677 | 11.6 | % | |||||||||||
General and administrative expense
|
63,786 | 65,428 | (1,642 | ) | (2.5 | %) | ||||||||||
Facility lease expense
|
135,424 | 136,175 | (751 | ) | (0.6 | %) | ||||||||||
Depreciation and amortization
|
146,229 | 135,395 | 10,834 | 8.0 | % | |||||||||||
Total operating expense
|
1,053,814 | 971,696 | 82,118 | 8.5 | % | |||||||||||
Income from operations
|
39,582 | 27,007 | 12,575 | 46.6 | % | |||||||||||
Interest income
|
1,080 | 1,148 | (68 | ) | (5.9 | %) | ||||||||||
Interest expense
|
||||||||||||||||
Debt
|
(67,183 | ) | (66,271 | ) | 912 | 1.4 | % | |||||||||
Amortization of deferred financing costs and debt discount
|
(5,006 | ) | (4,932 | ) | 74 | 1.5 | % | |||||||||
Change in fair value of derivatives and amortization
|
(4,847 | ) | 3,615 | (8,462 | ) | (234.1 | %) | |||||||||
Equity in earnings of unconsolidated ventures
|
516 | 1,176 | (660 | ) | (56.1 | %) | ||||||||||
Loss on extinguishment of debt, net
|
(701 | ) | (1,740 | ) | (1,039 | ) | (59.7 | %) | ||||||||
Other non-operating income
|
— | 4,224 | (4,224 | ) | (100.0 | %) | ||||||||||
Loss before income taxes
|
(36,559 | ) | (35,773 | ) | 786 | 2.2 | % | |||||||||
Benefit for income taxes
|
12,707 | 11,607 | 1,100 | 9.5 | % | |||||||||||
Net loss
|
$ | (23,852 | ) | $ | (24,166 | ) | $ | (314 | ) | (1.3 | %) | |||||
Selected Operating and Other Data:
|
||||||||||||||||
Total number of communities (at end of period)
|
564 | 546 | 18 | 3.3 | % | |||||||||||
Total units operated
(1)
|
50,887 | 49,137 | 1,750 | 3.6 | % | |||||||||||
Owned/leased communities units
|
47,152 | 44,841 | 2,311 | 5.2 | % | |||||||||||
Owned/leased communities occupancy rate (weighted average)
(2)
|
86.7 | % | 86.4 | % | 0.3 | % | 0.3 | % | ||||||||
Average monthly revenue per unit
(3)
|
$ | 4,401 | $ | 4,237 | $ | 164 | 3.9 | % |
(1)
|
Total units operated represent the average units operated during the period, excluding equity homes.
|
(2)
|
Excluding the impact of current quarter expansion openings, for the six months ended June 30, 2010, owned/leased communities occupancy rate was 86.9% and CCRCs occupancy rate was 85.0%.
|
(3)
|
Average monthly revenue per unit represents the average of the total monthly revenues, excluding amortization of entrance fees, divided by average occupied units.
|
(4)
|
Includes $11.6 million of first generation entrance fee receipts (which represent initial entrance fees received from the sale of units at a newly opened entrance fee CCRC) during the six months ended June 30, 2010.
|
Six Months Ended June 30,
|
||||||||||||||||
2010
|
2009
|
|||||||||||||||
Resident fee revenues
|
$ | 1,090,589 | 94.1 | % | $ | 995,688 | 92.6 | % | ||||||||
Resident fee revenues under management
|
68,696 | 5.9 | % | 78,997 | 7.4 | % | ||||||||||
Total
|
$ | 1,159,285 | 100.0 | % | $ | 1,074,685 | 100.0 | % | ||||||||
General and administrative expenses (excluding non-cash compensation, integration and transaction-related costs)
|
$ | 53,810 | 4.6 | % | $ | 51,249 | 4.8 | % | ||||||||
Non-cash compensation expense
|
9,976 | 0.9 | % | 13,680 | 1.3 | % | ||||||||||
Integration and transaction-related costs
|
― | — | 499 | — | ||||||||||||
General and administrative expenses (including non-cash compensation, integration and transaction-related costs)
|
$ | 63,786 | 5.5 | % | $ | 65,428 | 6.1 | % |
Six Months Ended
June 30,
|
||||||||
2010
|
2009
|
|||||||
Cash provided by operating activities
|
$ | 114,771 | $ | 113,072 | ||||
Cash used in investing activities
|
(102,544 | ) | (98,415 | ) | ||||
Cash (used in) provided by financing activities
|
(27,252 | ) | 26,981 | |||||
Net (decrease) increase in cash and cash equivalents
|
(15,025 | ) | 41,638 | |||||
Cash and cash equivalents at beginning of period
|
66,370 | 53,973 | ||||||
Cash and cash equivalents at end of period
|
$ | 51,345 | $ | 95,611 |
|
·
|
cash balances on hand;
|
|
·
|
cash flows from operations;
|
|
·
|
proceeds from our credit facilities;
|
|
·
|
proceeds from mortgage financing or refinancing of various assets;
|
|
·
|
funds generated through joint venture arrangements or sale-leaseback transactions; and
|
|
·
|
with somewhat lesser frequency, funds raised in the debt or equity markets and proceeds from the selective disposition of underperforming assets.
|
|
·
|
working capital;
|
|
·
|
operating costs such as employee compensation and related benefits, general and administrative expense and supply costs;
|
|
·
|
debt service and lease payments;
|
|
·
|
acquisition consideration and transaction costs;
|
|
·
|
cash collateral required to be posted in connection with our interest rate swaps and related financial instruments;
|
|
·
|
capital expenditures and improvements, including the expansion of our current communities and the development of new communities;
|
|
·
|
dividend payments;
|
|
·
|
purchases of common stock under our previous share repurchase authorization; and
|
|
·
|
other corporate initiatives (including integration and branding).
|
|
·
|
working capital;
|
|
·
|
operating costs such as employee compensation and related benefits, general and administrative expense and supply costs;
|
|
·
|
debt service and lease payments;
|
|
·
|
capital expenditures and improvements, including the expansion or redevelopment of select communities;
|
|
·
|
other corporate initiatives (including information systems);
|
|
·
|
acquisition consideration and transaction costs; and
|
|
·
|
to a lesser extent, cash collateral required to be posted in connection with our interest rate swaps and related financial instruments.
|
|
·
|
provision (benefit) for income taxes;
|
|
·
|
non-operating (income) expense items;
|
|
·
|
loss on sale of communities;
|
|
·
|
depreciation and amortization (including non-cash impairment charges);
|
|
·
|
straight-line rent expense (income);
|
|
·
|
amortization of deferred gain;
|
|
·
|
amortization of deferred entrance fees;
|
|
·
|
non-cash compensation expense; and
|
|
·
|
change in future service obligation;
|
|
·
|
entrance fee receipts and refunds (excluding first generation entrance fee receipts on a newly opened entrance fee CCRC).
|
|
·
|
the cash portion of interest expense, income tax (benefit) provision and non-recurring charges related to gain (loss) on sale of communities and extinguishment of debt activities generally represent charges (gains), which may significantly affect our financial results; and
|
|
·
|
depreciation and amortization, though not directly affecting our current cash position, represent the wear and tear and/or reduction in value of our communities, which affects the services we provide to our residents and may be indicative of future needs for capital expenditures.
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net loss
|
$ | (9,557 | ) | $ | (10,530 | ) | $ | (23,852 | ) | $ | (24,166 | ) | ||||
Benefit for income taxes
|
(5,329 | ) | (2,495 | ) | (12,707 | ) | (11,607 | ) | ||||||||
Equity in earnings of unconsolidated ventures
|
(119 | ) | (581 | ) | (516 | ) | (1,176 | ) | ||||||||
Loss on extinguishment of debt
|
682 | 1,740 | 701 | 1,740 | ||||||||||||
Other non-operating expense (income)
|
— | 8 | — | (4,224 | ) | |||||||||||
Interest expense:
|
||||||||||||||||
Debt
|
26,335 | 26,068 | 51,969 | 51,795 | ||||||||||||
Capitalized lease obligation
|
7,568 | 7,382 | 15,214 | 14,476 | ||||||||||||
Amortization of deferred financing costs
|
2,410 | 3,390 | 5,006 | 4,932 | ||||||||||||
Change in fair value of derivatives and amortization
|
2,207 | (7,900 | ) | 4,847 | (3,615 | ) | ||||||||||
Interest income
|
(453 | ) | (328 | ) | (1,080 | ) | (1,148 | ) | ||||||||
Income from operations
|
23,744 | 16,754 | 39,582 | 27,007 | ||||||||||||
Depreciation and amortization
|
73,168 | 67,262 | 146,229 | 135,395 | ||||||||||||
Straight-line lease expense
|
2,161 | 4,032 | 5,297 | 8,280 | ||||||||||||
Amortization of deferred gain
|
(1,086 | ) | (1,085 | ) | (2,172 | ) | (2,171 | ) | ||||||||
Amortization of entrance fees
|
(5,787 | ) | (5,232 | ) | (11,526 | ) | (10,342 | ) | ||||||||
Non-cash compensation expense
|
5,105 | 6,871 | 9,976 | 13,680 | ||||||||||||
Change in future service obligation
|
(1,064 | ) | — | (1,064 | ) | — | ||||||||||
Entrance fee receipts
(1)
|
14,973 | 9,816 | 32,965 | 18,326 | ||||||||||||
First generation entrance fees received
(2)
|
(5,596 | ) | ― | (11,567 | ) | ― | ||||||||||
Entrance fee disbursements
|
(5,360 | ) | (6,357 | ) | (11,122 | ) | (12,193 | ) | ||||||||
Adjusted EBITDA
|
$ | 100,258 | $ | 92,061 | $ | 196,598 | $ | 177,982 |
|
(1)
|
Includes the receipt of refundable and nonrefundable entrance fees.
|
|
(2)
|
First generation entrance fees received represents initial entrance fees received from the sale of units at a newly opened entrance fee CCRC where the Company is required to apply such entrance fee proceeds to satisfy debt.
|
|
·
|
changes in operating assets and liabilities;
|
|
·
|
deferred interest and fees added to principal;
|
|
·
|
refundable entrance fees received;
|
·
|
first generation entrance fee receipts on a newly opened entrance fee CCRC;
|
|
·
|
entrance fee refunds disbursed;
|
|
·
|
lease financing debt amortization with fair market value or no purchase options;
|
|
·
|
other; and
|
|
·
|
recurring capital expenditures.
|
|
·
|
the cash portion of interest expense, income tax (benefit) provision and non-recurring charges related to gain (loss) on sale of communities and extinguishment of debt activities generally represent charges (gains), which may significantly affect our financial results; and
|
|
·
|
depreciation and amortization, though not directly affecting our current cash position, represent the wear and tear and/or reduction in value of our communities, which affects the services we provide to our residents and may be indicative of future needs for capital expenditures.
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net cash provided by operating activities
|
$ | 67,642 | $ | 44,315 | $ | 114,771 | $ | 113,072 | ||||||||
Changes in operating assets and liabilities
|
3,464 | 16,150 | 22,635 | 4,217 | ||||||||||||
Refundable entrance fees received
(1)(2)
|
6,619 | 4,098 | 15,061 | 7,736 | ||||||||||||
First generation entrance fees received
(3)
|
(5,596 | ) | ― | (11,567 | ) | ― | ||||||||||
Entrance fee refunds disbursed
|
(5,360 | ) | (6,357 | ) | (11,122 | ) | (12,193 | ) | ||||||||
Recurring capital expenditures, net
|
(7,570 | ) | (3,888 | ) | (14,011 | ) | (6,543 | ) | ||||||||
Lease financing debt amortization with fair market value or no purchase options
|
(2,221 | ) | (1,798 | ) | (4,392 | ) | (3,578 | ) | ||||||||
Cash From Facility Operations
|
$ | 56,978 | $ | 52,520 | $ | 111,375 | $ | 102,711 |
|
(1)
|
Entrance fee receipts include promissory notes issued to the Company by the resident in lieu of a portion of the entrance fees due. Notes issued (net of collections) for the three months ended June 30, 2010 and 2009 were ($0.3) million and $1.7 million, respectively, and for the six months ended June 30, 2010 and 2009 were $3.4 million and $3.6 million, respectively.
|
|
(2)
|
Total entrance fee receipts for the three months ended June 30, 2010 and 2009 were $15.0 million and $9.8 million, respectively, including $8.4 million and $5.7 million, respectively, of nonrefundable entrance fee receipts included in net cash provided by operating activities. Total entrance fee receipts for the six months ended June 30, 2010 and 2009 were $33.0 million and $18.3 million, respectively, including $17.9 million and $10.6 million, respectively, of nonrefundable entrance fee receipts included in net cash provided by operating activities.
|
(3)
|
First generation entrance fees received represents initial entrance fees received from the sale of units at a newly opened entrance fee CCRC where the Company is required to apply such entrance fee proceeds to satisfy debt.
|
|
·
|
provision (benefit) for income taxes;
|
|
·
|
non-operating (income) expense items;
|
|
·
|
loss on sale of communities;
|
|
·
|
depreciation and amortization (including non-cash impairment charges);
|
|
·
|
facility lease expense;
|
|
·
|
general and administrative expense, including non-cash stock compensation expense;
|
|
·
|
change in future service obligation;
|
|
·
|
amortization of deferred entrance fee revenue; and
|
|
·
|
management fees.
|
|
·
|
interest expense, income tax (benefit) provision and non-recurring charges related to gain (loss) on sale of communities and extinguishment of debt activities generally represent charges (gains), which may significantly affect our financial results; and
|
|
·
|
depreciation and amortization, though not directly affecting our current cash position, represent the wear and tear and/or reduction in value of our communities, which affects the services we provide to our residents and may be indicative of future needs for capital expenditures.
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net loss
|
$ | (9,557 | ) | $ | (10,530 | ) | $ | (23,852 | ) | $ | (24,166 | ) | ||||
Benefit for income taxes
|
(5,329 | ) | (2,495 | ) | (12,707 | ) | (11,607 | ) | ||||||||
Equity in earnings of unconsolidated ventures
|
(119 | ) | (581 | ) | (516 | ) | (1,176 | ) | ||||||||
Loss on extinguishment of debt
|
682 | 1,740 | 701 | 1,740 | ||||||||||||
Other non-operating expense (income)
|
— | 8 | — | (4,224 | ) | |||||||||||
Interest expense:
|
||||||||||||||||
Debt
|
26,335 | 26,068 | 51,969 | 51,795 | ||||||||||||
Capitalized lease obligation
|
7,568 | 7,382 | 15,214 | 14,476 | ||||||||||||
Amortization of deferred financing costs
|
2,410 | 3,390 | 5,006 | 4,932 | ||||||||||||
Change in fair value of derivatives and amortization
|
2,207 | (7,900 | ) | 4,847 | (3,615 | ) | ||||||||||
Interest income
|
(453 | ) | (328 | ) | (1,080 | ) | (1,148 | ) | ||||||||
Income from operations
|
23,744 | 16,754 | 39,582 | 27,007 | ||||||||||||
Depreciation and amortization
|
73,168 | 67,262 | 146,229 | 135,395 | ||||||||||||
Change in future service obligation
|
(1,064 | ) | — | (1,064 | ) | — | ||||||||||
Facility lease expense
|
67,175 | 68,434 | 135,424 | 136,175 | ||||||||||||
General and administrative (including non-cash
stock compensation expense)
|
31,834 | 31,721 | 63,786 | 65,428 | ||||||||||||
Amortization of entrance fees
|
(5,787 | ) | (5,232 | ) | (11,526 | ) | (10,342 | ) | ||||||||
Management fees
|
(1,412 | ) | (1,298 | ) | (2,807 | ) | (3,015 | ) | ||||||||
Facility Operating Income
|
$ | 187,658 | $ | 177,641 | $ | 369,624 | $ | 350,648 |
BROOKDALE SENIOR LIVING INC.
|
||||||
(Registrant)
|
||||||
By:
|
/s/ Mark W. Ohlendorf
|
|||||
Name:
|
Mark W. Ohlendorf
|
|||||
Title:
|
Co-President and Chief Financial Officer
|
|||||
(Principal Financial and Accounting Officer)
|
||||||
Date:
|
August 6, 2010
|
|||||
Exhibit No.
|
Description
|
|
3.1
|
Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed on February 26, 2010).
|
|
3.2
|
Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on January 19, 2010).
|
|
4.1
|
Form of Certificate for common stock (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (Amendment No. 3) (No. 333-127372) filed on November 7, 2005).
|
|
4.2
|
Stockholders Agreement, dated as of November 28, 2005, by and among Brookdale Senior Living Inc., FIT-ALT Investor LLC, Fortress Brookdale Acquisition LLC, Fortress Investment Trust II and Health Partners (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K filed on March 31, 2006).
|
|
4.3
|
Amendment No. 1 to Stockholders Agreement, dated as of July 26, 2006, by and among Brookdale Senior Living Inc., FIT-ALT Investor LLC, Fortress Registered Investment Trust, Fortress Brookdale Investment Fund LLC, FRIT Holdings LLC, and FIT Holdings LLC (incorporated by reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2006).
|
|
4.4
|
Amendment Number Two to Stockholders Agreement, dated as of November 4, 2009 (incorporated by reference to Exhibit 4.4 to the Company’s Quarterly Report on Form 10-Q filed on November 4, 2009).
|
|
10.1
|
First Amendment, dated as of May 5, 2010, to the Credit Agreement, dated as of February 23, 2010, among certain subsidiaries of Brookdale Senior Living Inc., General Electric Capital Corporation, as administrative agent and lender, and the other lenders from time to time parties thereto.
|
|
10.2
|
Form of Severance Letter and Brookdale Senior Living Inc. Severance Pay Policy, Tier I.
|
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
XBRL Instance Document.*
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.*
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.*
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.*
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.*
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.*
|
ADMINISTRATIVE AGENT:
|
GENERAL ELECTRIC CAPITAL
|
|||||
CORPORATION
, as Administrative Agent
|
||||||
By:
|
/s/ Adam Zeiger
|
|||||
Name:
|
Adam Zeiger
|
|||||
Title:
|
Authorized Signatory
|
BORROWERS:
|
BLC ATRIUM-JACKSONVILLE SNF,
|
|||||||
LLC
, a Delaware limited liability
|
||||||||
company
|
||||||||
BLC WESTWOOD, LLC
, a Delaware
|
||||||||
limited liability company
|
||||||||
BLC JACKSON OAKS, LLC
, a Delaware
|
||||||||
limited liability company
|
||||||||
CAROLINA HOUSE OF BLUFFTON,
|
||||||||
LLC
, a North Carolina limited liability
|
||||||||
company
|
||||||||
CAROLINA HOUSE OF HILTON
|
||||||||
HEAD, LLC
, a North Carolina limited
|
||||||||
liability company
|
||||||||
ARC HDV, LLC
, a Tennessee limited
|
||||||||
liability company
|
||||||||
FIT RAMSEY, LLC
, a Delaware limited
|
||||||||
liability company
|
||||||||
AHC STERLING HOUSE OF
|
||||||||
HARBISON, LLC
, a Delaware limited
|
||||||||
liability company
|
||||||||
AHC PROPERTIES, INC.
, a Delaware
|
||||||||
corporation
|
||||||||
BROOKDALE PLACE OF BATH, LLC
,
|
||||||||
a Delaware limited liability company
|
||||||||
BKD KANSAS PROPERTIES, LLC
,
|
||||||||
a Delaware limited liability company
|
By:
|
/s/ George T. Hicks
|
|||||
Name:
|
George T. Hicks
|
|||||
Title:
|
Executive Vice President
|
LENDERS:
|
GENERAL ELECTRIC CAPITAL
|
|||||
CORPORATION
|
||||||
By:
|
/s/ Adam Zeiger
|
|||||
Name:
|
Adam Zeiger
|
|||||
Title:
|
Authorized Signatory
|
BANK OF AMERICA, N.A.
|
||||||
By:
|
/s/ Zubin R. Shroff
|
|||||
Name:
|
Zubin R. Shroff
|
|||||
Title:
|
Vice President
|
FIFTEENTH INVESTMENT HFS LIMITED
|
||||||
By:
|
/s/ Steve Ruth
|
|||||
Name:
|
Steve Ruth
|
|||||
Title:
|
Authorized Signatory Chief Investment Officer
|
BROOKDALE SENIOR LIVING INC.
|
|||
|
By: | ||
|
Title: |
Accepted and Agreed:
|
|
Executive
|
|
Date
|
Section 1.
|
Purpose of the Policy
|
1
|
Section 2.
|
Eligible Employees
|
1
|
Section 3.
|
Definitions
|
1
|
Section 4.
|
Severance Pay and Severance Benefits.
|
5
|
Section 5.
|
Payment of Severance Pay and Severance Benefits.
|
7
|
Section 6.
|
Section 409A
|
7
|
Section 7.
|
Waiver and Release
|
8
|
Section 8.
|
Restrictive Covenants
|
8
|
Section 9.
|
Policy Administration
|
9
|
Section 10.
|
Claims Procedure
|
9
|
Section 11.
|
Equity Awards
|
10
|
Section 12.
|
280G
|
10
|
Section 13.
|
No Assignment
|
11
|
Section 14.
|
No Employment Rights
|
11
|
Section 15.
|
Policy Funding
|
12
|
Section 16.
|
Survival of Policy Upon a Change in Control
|
12
|
Section 17.
|
Applicable Law
|
12
|
Section 18.
|
Severability
|
13
|
Section 19.
|
Policy Year
|
13
|
Section 20.
|
Amendment/Termination of Policy
|
13
|
Section 21.
|
Recovery of Payments Made by Mistake
|
13
|
Section 22.
|
Representations Contrary to the Policy
|
14
|
Section 23.
|
ERISA
|
14
|
Section 24.
|
Cooperation
|
14
|
Section 25.
|
Miscellaneous Provisions
|
14
|
BROOKDALE SENIOR LIVING INC.
|
By: | /s/ W.E. Sheriff | ||
|
Title: | Chief Executive Officer |
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Brookdale Senior Living Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 6, 2010
|
/s/ W.E. Sheriff
|
|
W.E. Sheriff
|
||
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Brookdale Senior Living Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 6, 2010
|
/s/ Mark W. Ohlendorf
|
|
Mark W. Ohlendorf
|
||
Chief Financial Officer
|
/s/ W.E. Sheriff
|
||
Name:
|
W.E. Sheriff
|
|
Title:
|
Chief Executive Officer
|
|
Date:
|
August 6, 2010
|
/s/ Mark W. Ohlendorf
|
||
Name:
|
Mark W. Ohlendorf
|
|
Title:
|
Chief Financial Officer
|
|
Date:
|
August 6, 2010
|