NASHVILLE, Tenn., Feb. 14, 2022 /PRNewswire/ -- Brookdale
Senior Living Inc. (NYSE: BKD) ("Brookdale" or the "Company")
announced results for the quarter and full year ended
December 31, 2021.
HIGHLIGHTS
- Fourth quarter revenue per available unit (RevPAR) increased
approximately 4% compared to the prior year quarter, including an
80 basis point increase in occupancy.
- Fourth quarter consolidated weighted average occupancy grew 100
basis points sequentially.
- Liquidity of $537 million
strengthened by two significant fourth quarter financing
transactions.
"In 2021, we proved that we could drive a strong recovery while
in the second year of the pandemic," said Lucinda ("Cindy") Baier,
Brookdale's President and CEO. "We delivered ten months of
sequential weighted average occupancy growth and maintained rate
growth and discipline. We executed several significant transactions
during the year to strengthen our liquidity position. Our top
priority continues to be the health and wellbeing of our residents
and associates. In the fourth quarter, we rapidly completed one or
more booster clinics for each of our communities, which can provide
our residents incremental protection. For 2022, we will build on
our strong foundation and are well positioned for accelerated
growth."
SUMMARY OF FOURTH QUARTER RESULTS
Consolidated
The table below presents a summary of consolidated operating
results.
|
|
Year-Over-Year Increase /
(Decrease)
|
|
|
Sequential Increase /
(Decrease)
|
($ in
millions)
|
4Q
2021
|
4Q
2020
|
Amount
|
Percent
|
|
3Q
2021
|
Amount
|
Percent
|
Senior housing
resident fee revenue
|
$
605.4
|
$
585.5
|
$
19.9
|
3.4%
|
|
$
600.1
|
$
5.3
|
0.9%
|
Health Care Services
resident fee revenue (1)
|
—
|
92.0
|
(92.0)
|
n/a
|
|
—
|
—
|
n/a
|
Total resident fee
revenue
|
605.4
|
677.5
|
(72.1)
|
(10.6)%
|
|
600.1
|
5.3
|
0.9%
|
Management fee
revenue
|
3.4
|
10.2
|
(6.8)
|
(66.7)%
|
|
3.6
|
(0.2)
|
(5.6)%
|
Other operating
income
|
0.2
|
78.3
|
(78.1)
|
(99.7)%
|
|
0.1
|
0.1
|
100.0%
|
Senior housing
facility operating expense
|
488.3
|
484.7
|
3.6
|
0.7%
|
|
480.4
|
7.9
|
1.6%
|
Health Care Services
facility operating
expense
(1)
|
—
|
92.1
|
(92.1)
|
n/a
|
|
—
|
—
|
n/a
|
Total facility
operating expense
|
488.3
|
576.8
|
(88.5)
|
(15.3)%
|
|
480.4
|
7.9
|
1.6%
|
General and
administrative expense
|
38.8
|
45.3
|
(6.5)
|
(14.3)%
|
|
43.8
|
(5.0)
|
(11.4)%
|
Net income (loss)
(1)
|
(81.7)
|
(44.1)
|
37.6
|
85.3%
|
|
174.3
|
(256.0)
|
NM
|
Adjusted EBITDA
(2)
|
35.8
|
98.6
|
(62.8)
|
(63.7)%
|
|
34.6
|
1.2
|
3.5%
|
|
|
(1)
|
The Company sold 80%
of its equity in its Health Care Services segment (the "HCS Sale")
on July 1, 2021. For periods beginning July 1, 2021, the results
and financial position of the Health Care Services segment were
deconsolidated from the Company's consolidated financial
statements. Net income for the third quarter of 2021 includes
a $288.2 million gain on the HCS Sale.
|
(2)
|
Adjusted EBITDA is a
financial measure that is not calculated in accordance with GAAP.
See "Reconciliations of Non-GAAP Financial Measures" for the
Company's definition of such measure, reconciliations to the most
comparable GAAP financial measure, and other important information
regarding the use of the Company's non-GAAP financial
measures.
|
- Senior housing resident fee revenue.
-
- The Company estimates that the COVID-19 pandemic resulted in
$75.6 million, $76.4 million, and $100.5
million of lost resident fee revenue in the consolidated
senior housing portfolio for the fourth quarter of 2021, third
quarter of 2021, and fourth quarter of 2020, respectively. The
estimated lost resident fee revenue represents the difference
between the actual resident fee revenue for the period and the
Company's pre-pandemic expectations for the 2020 period.
- 4Q 2021 vs 4Q 2020:
-
- Consolidated RevPAR increased $155, or 4.2%, to $3,828 as a result of an increase in consolidated
RevPOR of $158, or 3.1%, to
$5,210 and an increase in
consolidated weighted average occupancy of 80 basis points to
73.5%. The fourth quarter of 2021 was the first quarter with
year-over-year RevPAR growth since the first full quarter of the
COVID-19 pandemic. The increase in RevPOR was primarily the result
of in-place rent increases and an occupancy mix shift to more
memory care and skilled nursing services.
- The disposition of six communities through sales of owned
communities and lease terminations since the beginning of the
fourth quarter of 2020 resulted in $5.1
million less in resident fees during the fourth quarter of
2021 compared to the fourth quarter of 2020.
- 4Q 2021 vs 3Q 2021: Consolidated RevPAR increased
$44, or 1.2%, to $3,828 as a result of an increase in consolidated
weighted average occupancy of 100 basis points to 73.5%, partially
offset by a decrease in consolidated RevPOR of 0.2%, to
$5,210.
- Management fee revenue.
-
- Management fee revenue for the fourth quarter of 2021 was lower
sequentially and on a year over year basis primarily due to the
transition of management arrangements on certain former
unconsolidated ventures in which the Company sold its interest and
interim management agreements on formerly leased communities.
- Other operating income.
-
- The Company recognized $0.2
million of government grants as other operating income
during the fourth quarter of 2021, compared to $78.3 million of government grants during the
fourth quarter of 2020 and $0.1
million of government grants during the third quarter of
2021.
- Senior housing facility operating expense.
-
- 4Q 2021 vs 4Q 2020:
-
- Senior housing facility operating expense increased
$3.6 million, or 0.7%, primarily due
to an increase in labor expense resulting from the increased use of
contract labor and overtime to cover open positions, partially
offset by a decrease in incremental direct labor costs to respond
to the COVID-19 pandemic and decreases in employee benefits expense
and workers compensation expense.
- The disposition of communities resulted in $5.5 million less in facility operating expenses
during the fourth quarter of 2021 compared to the fourth quarter of
2020.
- 4Q 2021 vs 3Q 2021: Senior housing facility operating
expense increased $7.9 million, or
1.6%, primarily due to an increase in labor expense resulting from
the increased use of contract labor to cover open positions and
partially offset by a decrease in employee benefits expense.
- During the fourth quarter of 2021, third quarter of 2021, and
fourth quarter of 2020, in the consolidated senior housing
portfolio the Company incurred $3.4
million, $7.2 million, and
$28.1 million, respectively, of
incremental direct costs to respond to the COVID-19 pandemic,
including costs for: acquisition of personal protective equipment
("PPE"), medical equipment, and cleaning and disposable food
service supplies; enhanced cleaning and environmental sanitation;
increased employee-related costs, including labor, workers
compensation, and health plan expense; and COVID-19 testing of
residents and associates where not otherwise covered by government
payor or third-party insurance sources.
- General and administrative expense.
-
- 4Q 2021 vs 4Q 2020: The decrease in general and
administrative expense was primarily attributable to decreases in
compensation costs primarily as a result of reductions in the
Company's corporate headcount related to the HCS Sale, estimated
employee benefits expense, and transaction costs.
- 4Q 2021 vs 3Q 2021: The decrease in general and
administrative expense was primarily attributable to decreases in
estimated incentive compensation costs, estimated employee benefits
expense, and transaction costs.
- Net income (loss).
-
- 4Q 2021 vs 4Q 2020: The increase in net loss was
primarily attributable to the $78.1
million decrease in other operating income, partially offset
by a $21.2 million increase in
benefit for income taxes and the increase in senior housing
resident fee revenue.
- 4Q 2021 vs 3Q 2021: The change in net income (loss) was
primarily attributable to gain on sale of assets of $288.2 million recognized in the third quarter of
2021 for the HCS Sale, partially offset by a $38.7 million change in benefit (provision) for
income taxes.
- Adjusted EBITDA.
-
- 4Q 2021 vs 4Q 2020: The decrease in Adjusted EBITDA was
primarily attributable to the $78.1
million decrease in other operating income, partially offset
by the increase in senior housing resident fee revenue.
- 4Q 2021 vs 3Q 2021: The increase in Adjusted EBITDA was
primarily attributable to the increase in senior housing resident
fee revenue and the decrease in general and administrative expense
(excluding non-cash stock based compensation expense and
transaction and organizational restructuring costs), partially
offset by the increase in senior housing facility operating
expense.
- COVID-19 impact.
-
- Vaccine Update: As of January 31,
2022, the Company's resident vaccine acceptance rate was
above 95%. By November 2021, the U.S.
Centers for Disease Control and Prevention ("CDC") recommended that
all adults receive a vaccine booster dose. The Company has
completed at least one booster vaccine clinic for all of its
communities. In the second half of 2021, the Company adopted a
policy requiring its associates to be vaccinated against COVID-19,
subject to certain exceptions necessary to comply with applicable
federal, state, and local laws.
- Rebuilding Occupancy. The Company continues to execute
on key initiatives to rebuild occupancy lost due to the pandemic.
In 2021, the Company achieved ten consecutive months of weighted
average consolidated senior housing occupancy growth on a
sequential basis. According to data from the National Investment
Center for the Seniors Housing & Care Industry ("NIC"), senior
housing occupancy increased 70 basis points from the third quarter
to the fourth quarter of 2021 for stabilized portfolios. The
Company's weighted average consolidated senior housing occupancy
increased 100 basis points sequentially for the fourth quarter of
2021 compared to the third quarter of 2021. The Company began to
experience its typical seasonality pattern in January 2022. The table below sets forth the
Company's consolidated occupancy trend.
|
Jan
2021
|
Feb
2021
|
Mar
2021
|
Apr
2021
|
May
2021
|
Jun
2021
|
Jul
2021
|
Aug
2021
|
Sep
2021
|
Oct
2021
|
Nov
2021
|
Dec
2021
|
Jan
2022
|
Weighted
average
|
70.0%
|
69.4%
|
69.4%
|
69.9%
|
70.5%
|
71.2%
|
72.0%
|
72.5%
|
73.0%
|
73.3%
|
73.5%
|
73.6%
|
73.4%
|
Month end
|
70.4%
|
70.1%
|
70.6%
|
71.1%
|
71.6%
|
72.6%
|
73.3%
|
73.7%
|
74.2%
|
74.5%
|
74.3%
|
74.5%
|
74.2%
|
- Community Response. As of January
31, 2022, substantially all of the Company's communities
were open for new resident move-ins. The Company may revert to more
restrictive measures at its communities, including restrictions on
visitors and move-ins, if the pandemic worsens, as a result of
infections at a community, as necessary to comply with regulatory
requirements, or at the direction of authorities having
jurisdiction.
- Financial Relief. In September
2021, the U.S. Department of Health and Human Services
("HHS") announced that it has allocated $17.0 billion for a Phase 4 general distribution
from the Provider Relief Fund. During the fourth quarter of 2021,
the Company applied for the Phase 4 general distribution. The
Company expects to receive the Phase 4 general distribution during
the first half of 2022. The Company intends to pursue any
additional funding that may become available. There can be no
assurance that the Company will qualify for, or receive, such
future grants in the amount it expects, that additional
restrictions on the permissible uses or terms and conditions of the
grants will not be imposed by HHS, or that future funding programs
will be made available for which it qualifies.
Same Community Senior Housing (Independent Living (IL),
Assisted Living and Memory Care (AL/MC), and CCRCs)
The table below presents a summary of same community operating
results and metrics of the Company's consolidated senior housing
portfolio.(3)
|
|
|
Year-Over-Year
Increase /
(Decrease)
|
|
Sequential
Increase /
(Decrease)
|
($ in millions,
except RevPAR and RevPOR)
|
4Q
2021
|
4Q
2020
|
Amount
|
Percent
|
3Q
2021
|
Amount
|
Percent
|
RevPAR
|
$
3,827
|
$
3,685
|
$
142
|
3.9%
|
$
3,780
|
$
47
|
1.2%
|
Weighted average
occupancy
|
73.6%
|
72.8%
|
80
bps
|
n/a
|
72.5%
|
110 bps
|
n/a
|
RevPOR
|
$
5,204
|
$
5,064
|
$
140
|
2.8%
|
$
5,213
|
$
(9)
|
(0.2)%
|
Facility operating
expense
|
$
459.1
|
$
449.1
|
$
10.0
|
2.2%
|
$
448.3
|
$
10.8
|
2.4%
|
|
|
(3)
|
The same community
portfolio includes operating results and data for 632 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, and certain communities
that have experienced a casualty event that significantly impacts
their operations. To aid in comparability, same community operating
results exclude natural disaster expense.
|
- Resident fees.
-
- The Company estimates that the COVID-19 pandemic resulted in
$72.2 million, $73.7 million, and $94.9
million of lost resident fee revenue for the Company's same
community senior housing portfolio for the fourth quarter of 2021,
third quarter of 2021, and fourth quarter of 2020,
respectively.
- 4Q 2021 vs 4Q 2020: Same community resident fees
increased $21.2 million to
$570.2 million attributable to the
increase in RevPOR and the increase in occupancy. The increase in
RevPOR was primarily the result of in-place rent increases and an
occupancy mix shift to more memory care and skilled nursing
services.
- 4Q 2021 vs 3Q 2021: Same community resident fees
increased $7.0 million to
$570.2 million primarily attributable
to the increase in occupancy.
- Facility operating expense.
-
- 4Q 2021 vs 4Q 2020: The year-over-year increase was
primarily due to an increase in labor expense resulting from the
increased use of contract labor and overtime to cover open
positions, partially offset by a decrease in incremental direct
labor costs to respond to the COVID-19 pandemic and decreases in
employee benefits expense and workers compensation expense.
- 4Q 2021 vs 3Q 2021: The increase was primarily due to an
increase in labor expense resulting from the increased use of
contract labor and overtime to cover open positions, partially
offset by a decrease in employee benefits expense.
- The Company's same community senior housing portfolio incurred
$3.2 million, $6.4 million, and $26.1
million of incremental direct costs during the fourth
quarter of 2021, third quarter of 2021, and fourth quarter of 2020,
respectively, to respond to the COVID-19 pandemic.
LIQUIDITY
The table below presents a summary of the Company's net cash
provided by (used in) operating activities and Adjusted Free Cash
Flow.
|
|
Year-Over-
Year
Increase /
(Decrease)
|
|
Sequential Increase /
(Decrease)
|
($ in
millions)
|
4Q
2021
|
4Q
2020
|
3Q
2021
|
Net cash provided by
(used in) operating activities
|
$
(81.4)
|
$
73.5
|
$
(154.9)
|
$
7.2
|
$
(88.6)
|
Adjusted Free Cash
Flow (4)
|
(138.7)
|
19.9
|
(158.6)
|
(42.6)
|
(96.1)
|
|
|
(4)
|
Adjusted Free Cash
Flow is a financial measure that is not calculated in accordance
with GAAP. See "Reconciliations of Non-GAAP Financial Measures" for
the Company's definition of such measure, reconciliations to the
most comparable GAAP financial measure and other important
information regarding the use of the Company's non-GAAP financial
measures.
|
- Net cash provided by (used in) operating
activities.
-
- 4Q 2021 vs 4Q 2020: The change in net cash provided by
(used in) operating activities was primarily attributable to
$77.2 million of Provider Relief
Funds and other government grants received during the prior year
period, $22.5 million of the employer
portion of social security payroll taxes deferred during the prior
year period, and $31.6 million paid
during the current year period for previously deferred payroll
taxes. These changes were partially offset by an increase in same
community resident fee revenue compared to the prior year
period.
- 4Q 2021 vs 3Q 2021: The change in net cash provided by
(used in) operating activities was primarily attributable to
$31.6 million paid during the current
period for previously deferred payroll taxes and increases in cash
payments for employee compensation and real estate taxes compared
to the prior period.
- Adjusted Free Cash Flow.
-
- 4Q 2021 vs 4Q 2020: The $158.6
million change in Adjusted Free Cash Flow was primarily
attributable to the change in net cash provided by operating
activities and an increase in non-development capital expenditures,
net compared to the prior year period.
- 4Q 2021 vs 3Q 2021: The $96.1
million change in Adjusted Free Cash Flow was primarily
attributable to the change in net cash provided by operating
activities and an increase in non-development capital expenditures,
net compared to the prior period.
- Total Liquidity. Total liquidity of $536.8 million as of December 31, 2021 included $347.0 million of unrestricted cash and cash
equivalents, $182.4 million of
marketable securities, and $7.4
million of availability on the Company's secured credit
facility. Total liquidity as of December 31,
2021 decreased $108.9 million
from September 30, 2021, primarily
attributable to negative $138.7
million of Adjusted Free Cash Flow and net cash used in
financing activities, partially offset by $35.0 million of distributions from the Company's
unconsolidated Health Care Services venture.
TRANSACTION AND FINANCING UPDATE
- Convertible Debt Issuance: On October 1, 2021, the Company issued $230.0 million principal amount of 2.00%
convertible senior notes due 2026. The Company received net
proceeds of $224.3 million after the
deduction of the initial purchasers' discount. The Company used
$15.9 million of the net proceeds to
pay the Company's cost of capped call transactions entered into in
connection with the issuance, which are expected generally to
reduce or offset potential dilution to holders of the Company's
common stock.
- Mortgage Financing: On December
17, 2021, the Company obtained $100.0
million of debt secured by the non-recourse first mortgages
on 11 communities. The loan bears interest at a variable rate equal
to the 30-day Secured Overnight Financing Rate ("SOFR") plus a
margin of 215 basis points and matures in January 2025, with the option to extend for two
additional terms of one year each.
- Debt Repayment: During the fourth quarter of 2021, the
Company repaid a $45.0 million
high-interest-rate note payable and $284.4
million of mortgage debt, including $143.0 million of mortgage debt secured by the 11
communities for which $100.0 million
of debt was obtained. Such repayments represented substantially all
of the Company's remaining 2022 maturities.
- Health Care Services Venture: On November 1, 2021, the Company's unconsolidated
Health Care Services venture sold certain home health, hospice, and
outpatient therapy agencies in areas not served by affiliates of
HCA Healthcare, Inc. to LHC Group Inc. Upon the completion of the
sale, the Company received $35.0
million of cash distributions from the venture from the net
sale proceeds. The Company continues to own a 20% equity interest
in the remaining Health Care Services venture, which continues to
operate home health, hospice, and outpatient therapy agencies in
areas served by affiliates of HCA Healthcare, Inc.
FULL YEAR RESULTS
Consolidated
The table below presents a summary of consolidated operating
results.
|
|
Year-Over-Year
Increase /
(Decrease)
|
($ in
millions)
|
2021
|
2020
|
Amount
|
Percent
|
Senior housing
resident fee revenue
|
$ 2,369.6
|
$ 2,525.8
|
$ (156.2)
|
(6.2)%
|
Health Care Services
resident fee revenue (5)
|
174.2
|
366.8
|
(192.6)
|
(52.5)%
|
Total resident fee
revenue
|
2,543.8
|
2,892.6
|
(348.8)
|
(12.1)%
|
Management fee
revenue
|
20.6
|
130.7
|
(110.1)
|
(84.2)%
|
Other operating
income
|
12.4
|
115.7
|
(103.3)
|
(89.3)%
|
Senior housing
facility operating expense
|
1,904.4
|
1,954.1
|
(49.7)
|
(2.5)%
|
Health Care Services
facility operating expense (5)
|
171.5
|
387.8
|
(216.3)
|
(55.8)%
|
Total facility
operating expense
|
2,075.9
|
2,341.9
|
(266.0)
|
(11.4)%
|
General and
administrative expense
|
184.9
|
206.6
|
(21.7)
|
(10.5)%
|
Net income (loss)
(5)
|
(99.4)
|
81.9
|
(181.3)
|
NM
|
Adjusted EBITDA
(6)
|
138.5
|
264.4
|
(125.9)
|
(47.6)%
|
$100.0 million
management termination fee and one-time cash lease
payment
|
—
|
19.2
|
(19.2)
|
NM
|
Adjusted EBITDA,
excluding $100.0 million management termination fee and
one-
time cash
lease payment
|
138.5
|
283.6
|
(145.1)
|
(51.2)%
|
|
|
(5)
|
The Company sold 80%
of its equity in its Health Care Services segment on July 1, 2021
and recognized a $286.5 million gain on the sale. For periods
beginning July 1, 2021, the results and financial position of the
Health Care Services segment are deconsolidated from the Company's
consolidated financial statements.
|
(6)
|
Adjusted EBITDA is a
financial measure that is not calculated in accordance with GAAP.
See "Reconciliations of Non-GAAP Financial Measures" for the
Company's definition of such measure, reconciliations to the most
comparable GAAP financial measure, and other important information
regarding the use of the Company's non-GAAP financial measures.
Unless otherwise indicated, Adjusted EBITDA for 2020 includes the
$100.0 million management agreement termination fee payment
received from Healthpeak Properties, Inc. ("Healthpeak") in
connection with the sale of the Company's ownership interest in the
entry fee CCRC venture, which closed on January 31, 2020, and 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.
|
OUTLOOK
For the full year 2022, the Company is providing the following
guidance:
|
Full Year 2022
Guidance
|
RevPAR
growth
|
10% - 12%
|
Adjusted
EBITDA
|
$240 million - $260
million
|
This guidance excludes the potential impact of any additional
government financial relief including distributions from the
Provider Relief Fund, and future acquisition or disposition
activity other than the planned disposition of two communities
classified as held for sale and the termination of the Company's
lease obligations on two communities for which it has provided
notice of non-renewal. Reconciliation of the non-GAAP financial
measure included in the foregoing guidance to the most comparable
GAAP financial measure is not available without unreasonable effort
due to the inherent difficulty in forecasting the timing or amounts
of items required to reconcile Adjusted EBITDA from the Company's
net income (loss). Variability in the timing or amounts of items
required to reconcile the measure may have a significant impact on
the Company's future GAAP results.
SUPPLEMENTAL INFORMATION
The Company will post on its website at
www.brookdaleinvestors.com supplemental information relating to the
Company's fourth quarter and full year 2021 results, an updated
investor presentation, and a copy of this earnings release. The
supplemental information and a copy of this earnings release will
also be furnished in a Form 8-K to be filed with the SEC.
EARNINGS CONFERENCE CALL
Brookdale's management will conduct a conference call to discuss
the financial results for the fourth quarter and full year 2021 on
February 15, 2022 at 9:00 AM ET.
The conference call can be accessed by dialing (844) 200-6205 (from
within the U.S.) or (929) 526-1599 (from outside of the U.S.) ten
minutes prior to the scheduled start and referencing the access
code "868526".
A webcast of the conference call will be available to the public
on a listen-only basis at www.brookdaleinvestors.com. Please allow
extra time before to the call to download the necessary software
required to listen to the internet broadcast. A replay of the
webcast will be available through the website following the
call.
For those who cannot listen to the live call, a replay of the
webcast will be available until 11:59 PM
ET on February 22, 2022 by
dialing (866) 813-9403 (from within the U.S.) or +44 (204) 525-0658
(from outside of the U.S.) and referencing access code
"854859".
ABOUT BROOKDALE SENIOR LIVING
Brookdale Senior Living Inc. is the nation's premier operator of
senior living communities. The Company is committed to its mission
of enriching the lives of the people it serves with compassion,
respect, excellence, and integrity. The Company operates
independent living, assisted living, memory care, and continuing
care retirement communities. Through its comprehensive network,
Brookdale helps to provide seniors with care and services in an
environment that feels like home. The Company's expertise in
healthcare, hospitality, and real estate provides residents with
opportunities to improve wellness, pursue passions and stay
connected with friends and loved ones. Brookdale operates and
manages 679 communities in 41 states as of December 31, 2021,
with the ability to serve more than 60,000 residents. Brookdale's
stock trades on the New York Stock Exchange under the ticker symbol
BKD. For more information, visit brookdale.com or connect with
Brookdale on Facebook or Twitter.
DEFINITIONS OF RevPAR AND RevPOR
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
revenue from the former Health Care Services segment, revenue for
private duty services provided to seniors living outside of the
Company's communities, and entrance fee amortization), 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.
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
revenue from the former Health Care Services segment, revenue for
private duty services provided to seniors living outside of the
Company's communities, and entrance fee amortization), 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.
SAFE HARBOR
Certain statements in this press release and the associated
earnings call 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 that are not historical
statements of fact and those regarding the Company's intent, belief
or expectations. 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, it 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 have a material adverse effect on the Company's
operations and future prospects or which could cause events or
circumstances to differ from the forward-looking statements
include, but are not limited to, the 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, revenue, expenses, liquidity, and its strategic initiatives,
including plans for future growth, which will depend on many
factors, some of which cannot be foreseen, including the duration,
severity, and breadth of the pandemic and any resurgence or
variants of the disease, the impact of COVID-19 on the nation's
economy and debt and equity markets and the local economies in the
Company's markets, the development, availability, utilization, and
efficacy of COVID-19 testing, therapeutic agents, and vaccines and
the prioritization of such resources among businesses and
demographic groups, government financial and regulatory relief
efforts that may become available to business and individuals,
including the Company's ability to qualify for and satisfy the
terms and conditions of financial relief, perceptions regarding the
safety of senior living communities during and after the pandemic,
changes in demand for senior living communities and the Company's
ability to adapt its sales and marketing efforts to meet that
demand, the impact of COVID-19 on the Company's residents' and
their families' ability to afford its resident fees, including due
to changes in unemployment rates, consumer confidence, housing
markets, and equity markets caused by COVID-19, changes in the
acuity levels of the Company's new residents, the disproportionate
impact of COVID-19 on seniors generally and those residing in the
Company's communities, the duration and costs of the Company's
response efforts, including increased equipment, supplies, labor,
litigation, testing, vaccination clinic, health plan, and other
expenses, potentially greater use of contract labor and overtime
due to COVID-19 and general labor market conditions, the impact of
COVID-19 on the Company's ability to complete financings and
refinancings of various assets, or other transactions or to
generate sufficient cash flow to cover required debt, interest, and
lease payments and to satisfy financial and other covenants in its
debt and lease documents, increased regulatory requirements,
including the costs of unfunded, mandatory testing of residents and
associates and provision of test kits to the Company's health plan
participants, increased enforcement actions resulting from
COVID-19, government action that may limit the Company's collection
or discharge efforts for delinquent accounts, and the frequency and
magnitude of legal actions and liability claims that may arise due
to COVID-19 or the Company's response efforts; events which
adversely affect the ability of seniors to afford resident fees,
including downturns in the economy, housing market, consumer
confidence, or the equity markets and unemployment among resident
family members; changes in reimbursement rates, methods, or timing
under governmental reimbursement programs including the Medicare
and Medicaid programs; the effects of senior housing construction
and development, lower industry occupancy (including due to the
pandemic), and increased competition; conditions of housing
markets, regulatory changes, acts of nature, and the effects of
climate change in geographic areas where the Company is
concentrated; terminations of the Company's resident agreements and
vacancies in the living spaces it leases, including due to the
pandemic; failure to maintain the security and functionality of the
Company's information systems, to prevent a cybersecurity attack or
breach, or to comply with applicable privacy and consumer
protection laws, including HIPAA; the Company's ability to complete
its capital expenditures in accordance with its plans; the
Company's ability to identify and pursue development, investment,
and acquisition opportunities and its ability to successfully
integrate acquisitions; competition for the acquisition of assets;
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; risks related to the implementation of
the Company's strategy, including initiatives undertaken to execute
on the Company's strategic priorities and their effect on its
results; limits on the Company's ability to use net operating loss
carryovers to reduce future tax payments; delays in obtaining
regulatory approvals; disruptions in the financial markets or
decreases in the appraised values or performance of the Company's
communities that affect the Company's ability to obtain financing
or extend or refinance debt as it matures and the Company's
financing costs; the Company's ability to generate sufficient cash
flow to cover required interest, principal, and long-term lease
payments and to fund its planned capital projects; the effect of
the Company's non-compliance with any of its debt or lease
agreements (including the financial covenants contained therein),
including the risk of lenders or lessors declaring a cross default
in the event of the Company's non-compliance with any such
agreements and the risk of loss of the Company's property securing
leases and indebtedness due to any resulting lease terminations and
foreclosure actions; the effect of the Company's indebtedness and
long-term leases on the Company's liquidity and its ability to
operate its business; increases in market interest rates that
increase the costs of the Company's debt obligations; the Company's
ability to obtain additional capital on terms acceptable to it;
departures of key officers and potential disruption caused by
changes in management; increased competition for, or a shortage of,
associates (including due to the pandemic or general labor market
conditions), wage pressures resulting from increased competition,
low unemployment levels, minimum wage increases and changes in
overtime laws, and union activity; environmental contamination at
any of the Company's communities; failure to comply with existing
environmental laws; an adverse determination or resolution of
complaints filed against the Company, including class action and
stockholder derivative complaints; the cost and difficulty of
complying with increasing and evolving regulation; costs to respond
to, and adverse determinations resulting from, government reviews,
audits and investigations; changes in, or its failure to comply
with, employment-related laws and regulations; unanticipated costs
to comply with legislative or regulatory developments; the risks
associated with current global economic conditions and general
economic factors such as inflation, the consumer price index,
commodity costs, fuel and other energy costs, competition in the
labor market, costs of salaries, wages, benefits, and insurance,
interest rates, and tax rates; the impact of seasonal contagious
illness or an outbreak of COVID-19 or other contagious disease in
the markets in which the Company operates; actions of activist
stockholders, including a proxy contest; as well as other risks
detailed from time to time in the Company's filings with the
Securities and Exchange Commission, including those set forth 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 press release and/or
associated earnings call. 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 forward-looking
statements contained in this press release and/or associated
earnings call to reflect any change in the Company's expectations
with regard thereto or change in events, conditions, or
circumstances on which any statement is based.
Condensed
Consolidated Statements of Operations
|
|
|
Three Months
Ended
December
31,
|
|
Years
Ended
December
31,
|
(in thousands,
except per share data)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue
|
|
|
|
|
|
|
|
Resident
fees
|
$
605,425
|
|
$
677,460
|
|
$
2,543,848
|
|
$
2,892,567
|
Management
fees
|
3,413
|
|
10,230
|
|
20,598
|
|
130,690
|
Reimbursed costs
incurred on behalf of managed communities
|
34,794
|
|
86,186
|
|
181,445
|
|
401,189
|
Other operating
income
|
236
|
|
78,291
|
|
12,368
|
|
115,749
|
Total revenue and
other operating income
|
643,868
|
|
852,167
|
|
2,758,259
|
|
3,540,195
|
|
|
|
|
|
|
|
|
Expense
|
|
|
|
|
|
|
|
Facility operating
expense (excluding facility depreciation and amortization of
$79,879, $81,642, $313,830, and $334,768, respectively)
|
488,282
|
|
576,813
|
|
2,075,863
|
|
2,341,859
|
General and
administrative expense (including non-cash stock-based compensation
expense of $3,392, $2,535, $16,270, and $20,747,
respectively)
|
38,761
|
|
45,324
|
|
184,916
|
|
206,575
|
Facility operating
lease expense
|
42,850
|
|
45,553
|
|
174,358
|
|
224,033
|
Depreciation and
amortization
|
85,571
|
|
87,513
|
|
337,613
|
|
359,226
|
Asset
impairment
|
9,609
|
|
10,579
|
|
23,003
|
|
107,308
|
Loss (gain) on
facility operating lease termination, net
|
(2,003)
|
|
(2,303)
|
|
(2,003)
|
|
(2,303)
|
Costs incurred on
behalf of managed communities
|
34,794
|
|
86,186
|
|
181,445
|
|
401,189
|
Total operating
expense
|
697,864
|
|
849,665
|
|
2,975,195
|
|
3,637,887
|
Income (loss) from
operations
|
(53,996)
|
|
2,502
|
|
(216,936)
|
|
(97,692)
|
|
|
|
|
|
|
|
|
Interest
income
|
301
|
|
494
|
|
1,349
|
|
4,799
|
Interest
expense:
|
|
|
|
|
|
|
|
Debt
|
(34,925)
|
|
(36,172)
|
|
(141,409)
|
|
(153,817)
|
Financing lease
obligations
|
(11,733)
|
|
(11,452)
|
|
(46,282)
|
|
(48,534)
|
Amortization of
deferred financing costs
|
(1,457)
|
|
(1,827)
|
|
(7,449)
|
|
(6,428)
|
Gain (loss) on debt
modification and extinguishment, net
|
(1,932)
|
|
(211)
|
|
(1,932)
|
|
10,896
|
Equity in earnings
(loss) of unconsolidated ventures
|
(1,547)
|
|
(1,244)
|
|
10,394
|
|
(2,107)
|
Gain (loss) on sale
of assets, net
|
(573)
|
|
513
|
|
288,835
|
|
374,532
|
Other non-operating
income (loss)
|
740
|
|
1,050
|
|
5,903
|
|
5,648
|
Income (loss) before
income taxes
|
(105,122)
|
|
(46,347)
|
|
(107,527)
|
|
87,297
|
Benefit (provision)
for income taxes
|
23,402
|
|
2,208
|
|
8,163
|
|
(5,352)
|
Net income
(loss)
|
(81,720)
|
|
(44,139)
|
|
(99,364)
|
|
81,945
|
Net (income) loss
attributable to noncontrolling interest
|
18
|
|
19
|
|
74
|
|
74
|
Net income (loss)
attributable to Brookdale Senior Living Inc. common
stockholders
|
$
(81,702)
|
|
$
(44,120)
|
|
$
(99,290)
|
|
$
82,019
|
|
|
|
|
|
|
|
|
Net income (loss) per
share attributable to Brookdale Senior Living Inc. common
stockholders:
|
|
|
|
|
|
|
|
Basic
|
$
(0.44)
|
|
$
(0.24)
|
|
$
(0.54)
|
|
$
0.45
|
Diluted
|
$
(0.44)
|
|
$
(0.24)
|
|
$
(0.54)
|
|
$
0.44
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
185,370
|
|
183,389
|
|
184,975
|
|
183,498
|
Diluted
|
185,370
|
|
183,389
|
|
184,975
|
|
184,386
|
Condensed
Consolidated Balance Sheets
|
|
(in
thousands)
|
December 31,
2021
|
|
December 31,
2020
|
Cash and cash
equivalents
|
$
347,031
|
|
$
380,420
|
Marketable
securities
|
182,393
|
|
172,905
|
Restricted
cash
|
26,845
|
|
28,059
|
Accounts receivable,
net
|
51,137
|
|
109,221
|
Assets held for
sale
|
3,642
|
|
16,061
|
Prepaid expenses and
other current assets, net
|
87,946
|
|
66,937
|
Total current
assets
|
698,994
|
|
773,603
|
Property, plant and
equipment and leasehold intangibles, net
|
4,904,292
|
|
5,068,060
|
Operating lease
right-of-use assets
|
630,423
|
|
788,138
|
Other assets,
net
|
176,758
|
|
271,957
|
Total
assets
|
$
6,410,467
|
|
$
6,901,758
|
|
|
|
|
Current portion of
long-term debt
|
$
63,125
|
|
$
68,885
|
Current portion of
financing lease obligations
|
22,151
|
|
19,543
|
Current portion of
operating lease obligations
|
148,642
|
|
146,226
|
Other current
liabilities
|
398,036
|
|
456,079
|
Total current
liabilities
|
631,954
|
|
690,733
|
Long-term debt, less
current portion
|
3,778,087
|
|
3,847,103
|
Financing lease
obligations, less current portion
|
532,136
|
|
543,764
|
Operating lease
obligations, less current portion
|
681,876
|
|
819,429
|
Other
liabilities
|
86,791
|
|
198,000
|
Total
liabilities
|
5,710,844
|
|
6,099,029
|
Total Brookdale
Senior Living Inc. stockholders' equity
|
697,402
|
|
800,434
|
Noncontrolling
interest
|
2,221
|
|
2,295
|
Total
equity
|
699,623
|
|
802,729
|
Total liabilities and
equity
|
$
6,410,467
|
|
$
6,901,758
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
Years Ended
December 31,
|
(in
thousands)
|
2021
|
|
2020
|
Cash Flows from
Operating Activities
|
|
|
|
Net income
(loss)
|
$
(99,364)
|
|
$
81,945
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
Loss (gain) on debt
modification and extinguishment, net
|
1,932
|
|
(10,896)
|
Depreciation and
amortization, net
|
345,062
|
|
365,654
|
Asset
impairment
|
23,003
|
|
107,308
|
Equity in (earnings)
loss of unconsolidated ventures
|
(10,394)
|
|
2,107
|
Distributions from
unconsolidated ventures from cumulative share of net
earnings
|
6,191
|
|
766
|
Amortization of
entrance fees
|
(1,758)
|
|
(2,122)
|
Proceeds from deferred
entrance fee revenue
|
3,562
|
|
734
|
Deferred income tax
(benefit) provision
|
(9,837)
|
|
(5,840)
|
Operating lease
expense adjustment
|
(23,280)
|
|
(136,276)
|
Loss (gain) on sale of
assets, net
|
(288,835)
|
|
(374,532)
|
Loss (gain) on
facility operating lease termination, net
|
(2,003)
|
|
(2,303)
|
Non-cash stock-based
compensation expense
|
16,270
|
|
20,747
|
Other
|
(4,689)
|
|
(2,777)
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts receivable,
net
|
502
|
|
24,277
|
Prepaid expenses and
other assets, net
|
(15,483)
|
|
24,707
|
Trade accounts payable
and accrued expenses
|
(54,032)
|
|
27,294
|
Refundable fees and
deferred revenue
|
(10,066)
|
|
62,614
|
Operating lease assets
and liabilities for lessor capital expenditure
reimbursements
|
30,965
|
|
22,242
|
Operating lease assets
and liabilities for lease termination
|
(2,380)
|
|
—
|
Net cash provided by
(used in) operating activities
|
(94,634)
|
|
205,649
|
Cash Flows from
Investing Activities
|
|
|
|
Change in lease
security deposits and lease acquisition deposits, net
|
(100)
|
|
3,569
|
Purchase of marketable
securities
|
(362,257)
|
|
(378,269)
|
Sale and maturities of
marketable securities
|
352,988
|
|
275,000
|
Capital expenditures,
net of related payables
|
(176,657)
|
|
(185,871)
|
Acquisition of assets,
net of related payables and cash received
|
—
|
|
(472,193)
|
Investment in
unconsolidated ventures
|
(5,436)
|
|
(4,082)
|
Distributions received
from unconsolidated ventures
|
37,113
|
|
—
|
Proceeds from sale of
assets, net
|
334,006
|
|
331,316
|
Proceeds from notes
receivable
|
1,800
|
|
5,419
|
Net cash provided by
(used in) investing activities
|
181,457
|
|
(425,111)
|
Cash Flows from
Financing Activities
|
|
|
|
Proceeds from
debt
|
352,962
|
|
963,099
|
Repayment of debt and
financing lease obligations
|
(441,571)
|
|
(538,859)
|
Proceeds from line of
credit
|
—
|
|
166,381
|
Repayment of line of
credit
|
—
|
|
(166,381)
|
Purchase of treasury
stock, net of related payables
|
—
|
|
(18,123)
|
Purchase of capped
call transactions
|
(15,916)
|
|
—
|
Payment of financing
costs, net of related payables
|
(3,904)
|
|
(19,649)
|
Payments of employee
taxes for withheld shares
|
(4,820)
|
|
(4,037)
|
Other
|
(408)
|
|
482
|
Net cash provided by
(used in) financing activities
|
(113,657)
|
|
382,913
|
Net increase
(decrease) in cash, cash equivalents, and restricted
cash
|
(26,834)
|
|
163,451
|
Cash, cash
equivalents, and restricted cash at beginning of period
|
465,148
|
|
301,697
|
Cash, cash
equivalents, and restricted cash at end of period
|
$
438,314
|
|
$
465,148
|
Non-GAAP Financial Measures
This earnings release contains the financial measures Adjusted
EBITDA and Adjusted Free Cash Flow, which are not calculated in
accordance with U.S. generally accepted accounting principles
("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,
or net cash provided by (used in) operating activities. The Company
cautions investors 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. The Company urges investors to review the following
reconciliations of these non-GAAP financial measures from the most
comparable financial measures determined in accordance with
GAAP.
Adjusted EBITDA
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 operating lease
termination, operating lease expense adjustment, non-cash
stock-based compensation expense, and transaction and
organizational restructuring costs. Transaction costs include those
directly related to acquisition, disposition, financing and leasing
activity, 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.
The Company believes that presentation of Adjusted EBITDA as a
performance measure is useful to investors because (i) it is one of
the metrics used by the Company's management for budgeting and
other planning purposes, to review the Company's historic and
prospective core operating performance, and to make day-to-day
operating decisions; (ii) it provides an assessment of operational
factors that management can impact in the short-term, namely
revenues and the controllable cost structure of the organization,
by eliminating items related to the Company's financing and capital
structure and other 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; and (iii) the Company believes that this measure is used
by research analysts and investors to evaluate the Company's
operating results and to value companies in its industry.
Adjusted EBITDA has material limitations as a performance
measure, including: (i) excluded interest and income tax are
necessary to operate the Company's business under its current
financing and capital structure; (ii) excluded depreciation,
amortization and impairment charges may represent the wear and tear
and/or reduction in value of the Company's communities, goodwill,
and other assets and may be indicative of future needs for capital
expenditures; and (iii) the Company may incur income/expense
similar to those for which adjustments are made, such as gain/loss
on sale of assets, facility operating lease termination, or debt
modification and extinguishment, non-cash stock-based compensation
expense, and transaction and other costs, and such income/expense
may significantly affect the Company's operating results.
The tables below reconcile the Company's Adjusted EBITDA from
net income (loss).
|
Three Months
Ended
|
(in
thousands)
|
December 31,
2021
|
|
September 30,
2021
|
|
December 31,
2020
|
Net income
(loss)
|
$
(81,720)
|
|
$
174,263
|
|
$
(44,139)
|
Provision (benefit)
for income taxes
|
(23,402)
|
|
15,279
|
|
(2,208)
|
Equity in (earnings)
loss of unconsolidated ventures
|
1,547
|
|
1,474
|
|
1,244
|
Loss (gain) on debt
modification and extinguishment, net
|
1,932
|
|
—
|
|
211
|
Loss (gain) on sale
of assets, net
|
573
|
|
(288,375)
|
|
(513)
|
Other non-operating
(income) loss
|
(740)
|
|
(571)
|
|
(1,050)
|
Interest
expense
|
48,115
|
|
49,361
|
|
49,451
|
Interest
income
|
(301)
|
|
(286)
|
|
(494)
|
Income (loss) from
operations
|
(53,996)
|
|
(48,855)
|
|
2,502
|
Depreciation and
amortization
|
85,571
|
|
84,560
|
|
87,513
|
Asset
impairment
|
9,609
|
|
639
|
|
10,579
|
Loss (gain) on
facility operating lease termination, net
|
(2,003)
|
|
—
|
|
(2,303)
|
Operating lease
expense adjustment
|
(7,017)
|
|
(6,273)
|
|
(4,000)
|
Non-cash stock-based
compensation expense
|
3,392
|
|
3,568
|
|
2,535
|
Transaction and
organizational restructuring costs
|
293
|
|
943
|
|
1,778
|
Adjusted
EBITDA(7)
|
$
35,849
|
|
$
34,582
|
|
$
98,604
|
|
|
(7)
|
Adjusted EBITDA
includes $0.2 million, $0.1 million, and $78.3 million benefit for
the three months ended December 31, 2021, September 30, 2021,
and December 31, 2020, respectively, of Provider Relief Funds
and other government grants and credits recognized in other
operating income.
|
|
Years Ended
December 31,
|
(in
thousands)
|
2021
|
|
2020
|
Net income
(loss)
|
$
(99,364)
|
|
$
81,945
|
Provision (benefit)
for income taxes
|
(8,163)
|
|
5,352
|
Equity in (earnings)
loss of unconsolidated ventures
|
(10,394)
|
|
2,107
|
Loss (gain) on debt
modification and extinguishment, net
|
1,932
|
|
(10,896)
|
Loss (gain) on sale
of assets, net
|
(288,835)
|
|
(374,532)
|
Other non-operating
(income) loss
|
(5,903)
|
|
(5,648)
|
Interest
expense
|
195,140
|
|
208,779
|
Interest
income
|
(1,349)
|
|
(4,799)
|
Income (loss) from
operations
|
(216,936)
|
|
(97,692)
|
Depreciation and
amortization
|
337,613
|
|
359,226
|
Asset
impairment
|
23,003
|
|
107,308
|
Loss (gain) on
facility operating lease termination, net
|
(2,003)
|
|
(2,303)
|
Operating lease
expense adjustment
|
(23,280)
|
|
(136,276)
|
Non-cash stock-based
compensation expense
|
16,270
|
|
20,747
|
Transaction and
organizational restructuring costs
|
3,809
|
|
13,377
|
Adjusted
EBITDA(8)
|
$
138,476
|
|
$
264,387
|
$100.0 million
management termination fee
|
—
|
|
(100,000)
|
$119.2 million
one-time cash lease payment
|
—
|
|
119,180
|
Adjusted EBITDA,
excluding $100.0 million management termination fee and $119.2
million one-time cash lease payment
|
$
138,476
|
|
$
283,567
|
|
|
(8)
|
Adjusted EBITDA
includes:
|
|
•
|
$12.4 million and
$115.7 million benefit for the years ended December 31, 2021
and 2020, respectively, of Provider Relief Funds and other
government grants and credits recognized in other operating
income
|
|
•
|
$119.2 million for
the year ended December 31, 2020 for the one-time cash lease
payment made to Ventas in connection with the Company's lease
restructuring transaction effective July 26, 2020
|
|
•
|
$100.0 million
benefit for the year ended December 31, 2020 for the management
agreement termination fee payment received from Healthpeak in
connection with the sale of the Company's ownership interest in the
entry fee CCRC venture
|
Adjusted Free Cash Flow
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
assets and liabilities for lease termination, cash paid/received
for gain/loss on facility operating lease termination, 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.
Non-development capital expenditures are 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 and is
presented net of lessor reimbursements. Non-development capital
expenditures do not include capital expenditures for: community
expansions, major community redevelopment and repositioning
projects, and the development of new communities.
The Company believes that presentation of Adjusted Free Cash
Flow as a liquidity measure is useful to investors because (i) it
is one of the metrics used by the Company's management for
budgeting and other planning purposes, to review the Company's
historic and prospective sources of operating liquidity, and to
review the Company's ability to service its outstanding
indebtedness, pay dividends to stockholders, engage in share
repurchases, and make capital expenditures, including development
capital expenditures; and (ii) it provides an indicator to
management to determine if adjustments to current spending
decisions are needed.
Adjusted Free Cash Flow has material limitations as a liquidity
measure, including: (i) it does not represent cash available for
dividends, share repurchases, or discretionary expenditures since
certain non-discretionary expenditures, including mandatory debt
principal payments, are not reflected in this measure; (ii) the
cash portion of non-recurring charges related to gain/loss on
facility lease termination generally represent charges/gains that
may significantly affect the Company's liquidity; and (iii) the
impact of timing of cash expenditures, including the timing of
non-development capital expenditures, limits the usefulness of the
measure for short-term comparisons.
The tables below reconcile Adjusted Free Cash Flow from net cash
provided by (used in) operating activities.
|
Three Months
Ended
|
(in
thousands)
|
December 31,
2021
|
|
September 30,
2021
|
|
December 31,
2020
|
Net cash provided
by (used in) operating activities
|
$
(81,387)
|
|
$
7,200
|
|
$
73,499
|
Net cash provided by
(used in) investing activities
|
(20,272)
|
|
203,974
|
|
(81,147)
|
Net cash provided by
(used in) financing activities
|
(37,926)
|
|
(19,177)
|
|
(20,279)
|
Net increase
(decrease) in cash, cash equivalents, and restricted cash
|
$
(139,585)
|
|
$
191,997
|
|
$
(27,927)
|
|
|
|
|
|
|
Net cash provided
by (used in) operating activities
|
$
(81,387)
|
|
$
7,200
|
|
$
73,499
|
Distributions from
unconsolidated ventures from cumulative share of net
earnings
|
—
|
|
(836)
|
|
—
|
Changes in prepaid
insurance premiums financed with notes payable
|
(4,634)
|
|
(4,151)
|
|
(5,823)
|
Changes in operating
lease assets and liabilities for lease termination
|
2,380
|
|
—
|
|
—
|
Changes in assets and
liabilities for lessor capital expenditure reimbursements under
operating leases
|
(3,908)
|
|
(11,551)
|
|
(8,602)
|
Non-development
capital expenditures, net
|
(45,972)
|
|
(28,193)
|
|
(34,643)
|
Payment of financing
lease obligations
|
(5,182)
|
|
(5,039)
|
|
(4,556)
|
Adjusted Free Cash
Flow (9)
|
$
(138,703)
|
|
$
(42,570)
|
|
$
19,875
|
|
|
(9)
|
Adjusted Free Cash
Flow includes transaction and organizational restructuring costs of
$0.3 million, $0.9 million, and $1.8 million for the three months
ended December 31, 2021, September 30, 2021, and December 31,
2020, respectively. Additionally, Adjusted Free Cash Flow
includes:
|
|
•
|
$0.6 million, $1.1
million, and $77.2 million benefit for the three months ended
December 31, 2021, September 30, 2021, and December 31, 2020,
respectively, from Provider Relief Funds and other government
grants and credits received
|
|
•
|
$3.0 million and $3.5
million recoupment of accelerated/advanced Medicare payments for
the three months ended December 31, 2021 and September 30, 2021,
respectively
|
|
•
|
$31.6 million paid
during the three months ended December 31, 2021 for payroll taxes
deferred for the year ended December 31, 2020
|
|
•
|
$22.5 million benefit
from payroll taxes deferred for the three months ended December 31,
2020
|
|
Years Ended
December 31,
|
(in
thousands)
|
2021
|
|
2020
|
Net cash provided
by (used in) operating activities
|
$
(94,634)
|
|
$
205,649
|
Net cash provided by
(used in) investing activities
|
181,457
|
|
(425,111)
|
Net cash provided by
(used in) financing activities
|
(113,657)
|
|
382,913
|
Net increase
(decrease) in cash, cash equivalents, and restricted
cash
|
$
(26,834)
|
|
$
163,451
|
|
|
|
|
Net cash provided
by (used in) operating activities
|
$
(94,634)
|
|
$
205,649
|
Distributions from
unconsolidated ventures from cumulative share of net
earnings
|
(6,191)
|
|
(766)
|
Changes in operating
lease assets and liabilities for lease termination
|
2,380
|
|
—
|
Changes in assets and
liabilities for lessor capital expenditure reimbursements under
operating leases
|
(30,965)
|
|
(22,242)
|
Non-development
capital expenditures, net
|
(137,410)
|
|
(139,592)
|
Payment of financing
lease obligations
|
(19,874)
|
|
(18,868)
|
Adjusted Free Cash
Flow (10)
|
$
(286,694)
|
|
$
24,181
|
|
|
(10)
|
Adjusted Free Cash
Flow includes transaction and organizational restructuring costs of
$3.8 million and $13.4 million for the years ended December 31,
2021 and 2020, respectively. Additionally, Adjusted Free Cash Flow
includes:
|
|
•
|
$3.9 million and
$115.7 million benefit for the years ended December 31, 2021 and
2020, respectively, from Provider Relief Funds and other government
grants and credits received
|
|
•
|
$87.5 million benefit
from accelerated/advanced Medicare payments received for the year
ended December 31, 2020
|
|
•
|
$20.8 million
recoupment of accelerated/advanced Medicare payments for the year
ended December 31, 2021
|
|
•
|
$119.2 million
one-time cash lease payment made to Ventas in connection with the
Company's lease restructuring transaction effective July 26, 2020
for the year ended December 31, 2020
|
|
•
|
$100.0 million
benefit from the management agreement termination fee payment
received from Healthpeak for the year ended December 31,
2020
|
|
•
|
$72.7 million benefit
from payroll taxes deferred for the year ended December 31,
2020
|
|
•
|
$31.6 million paid
during the year ended December 31, 2021 for deferred payroll taxes
for the year ended December 31, 2020
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/brookdale-announces-fourth-quarter-and-full-year-2021-results-301481839.html
SOURCE Brookdale Senior Living Inc.