Investor Presentation - February 22, 2018 - Brookdale Senior Living, Inc.
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Investor Presentation February 22, 2018
Forward-Looking Statements – Safe Harbor
Certain statements in this Investor Presentation 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 our intent, belief
or expectations, including, but not limited to, statements relating to our redefined strategy, including initiatives undertaken to execute on our strategic priorities and their intended
effect on our results; our operational, sales, marketing and branding initiatives; our expectations regarding the economy, the senior living industry, senior housing construction,
supply and competition, occupancy and pricing and the demand for senior housing; our expectations regarding our revenue, cash flow, operating income, expenses, capital
expenditures, including expected levels and reimbursements and the timing thereof, expansion, redevelopment and repositioning opportunities, including Program Max
opportunities, and their projected costs, cost savings and synergies, and our liquidity and leverage; our plans and expectations with respect to acquisition, disposition,
development, lease restructuring and termination, financing, re-financing and venture transactions and opportunities (including assets held for sale, the pending transactions with
HCP, Inc. and our plans to market in 2018 and sell approximately 30 owned communities), including the timing thereof and their effects on our results; our expectations regarding
taxes, capital deployment and returns on invested capital, Adjusted EBITDA and Adjusted Free Cash Flow (as those terms are defined herein); our expectations regarding
returns to stockholders, our share repurchase program and the payment of dividends; our ability to secure financing or repay, replace or extend existing debt at or prior to
maturity; our ability to remain in compliance with all of our debt and lease agreements (including the financial covenants contained therein); our expectations regarding changes
in government reimbursement programs and their effect on our results; our plans to expand our offering of ancillary services; and our ability to anticipate, manage and address
industry trends and their effect on our business. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should,"
"could," "would," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "overestimate," "underestimate," "believe," "project," "predict," "continue," "plan,"
"target" or other similar words or expressions. These forward looking statements are based on certain assumptions and expectations, and our ability to predict results or the
actual effect of future plans or strategies is inherently uncertain. Although we believe that expectations reflected in any forward-looking statements are based on reasonable
assumptions, we can give no assurance that our expectations will be attained and actual results and performance could differ materially from those projected. Factors which
could have a material adverse effect on our operations and future prospects or which could cause events or circumstances to differ from the forward-looking statements include,
but are not limited to, the risk associated with the current global economic situation and its impact upon capital markets and liquidity; changes in governmental reimbursement
programs; the risk of overbuilding, new supply and new competition; our inability to extend (or refinance) debt (including our credit and letter of credit facilities and our outstanding
convertible notes) as it matures; the risk that we may not be able to satisfy the conditions precedent to exercising the extension options associated with certain of our debt
agreements; events which adversely affect the ability of seniors to afford our resident fees or entrance fees; the conditions of housing markets in certain geographic areas; our
ability to generate sufficient cash flow to cover required interest and long-term lease payments and to fund our planned capital projects; risks related to the implementation of our
redefined strategy, including initiatives undertaken to execute on our strategic priorities and their effect on our results; the effect of our indebtedness and long-term leases on our
liquidity; the effect of our non-compliance with any of our debt or lease agreements (including the financial covenants contained therein) and the risk of lenders or lessors
declaring a cross default in the event of our non-compliance with any such agreements; the risk of loss of property pursuant to our mortgage debt and long-term lease obligations;
the possibilities that changes in the capital markets, including changes in interest rates and/or credit spreads, or other factors could make financing more expensive or
unavailable to us; our determination from time to time to purchase any shares under our share repurchase program; our ability to fund any repurchases; our ability to effectively
manage our growth; our ability to maintain consistent quality control; delays in obtaining regulatory approvals; the risk that we may not be able to expand, redevelop and
reposition our communities in accordance with our plans; our ability to complete acquisition, disposition, lease restructuring and termination, financing, re-financing and venture
transactions (including assets held for sale, the pending transactions with HCP, Inc. and our plans to market in 2018 and sell approximately 30 owned communities) 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 our ability to identify and pursue any such opportunities in the future; our ability to successfully integrate acquisitions; competition for
the acquisition of assets; our ability to obtain additional capital on terms acceptable to us; a decrease in the overall demand for senior housing; our vulnerability to economic
downturns; acts of nature in certain geographic areas; terminations of our resident agreements and vacancies in the living spaces we lease; early terminations or non-renewal of
management agreements; increased competition for skilled personnel; increased wage pressure and union activity; departure of our key officers and potential disruption caused
by changes in management; increases in market interest rates; environmental contamination at any of our communities; failure to comply with existing environmental laws; an
adverse determination or resolution of complaints filed against us; the cost and difficulty of complying with increasing and evolving regulation; unanticipated costs to comply with
legislative or regulatory developments, including requirements to obtain emergency power generators for our communities; as well as other risks detailed from time to time in our
filings with the Securities and Exchange Commission, including those set forth under "Item 1A. Risk Factors" contained in our Annual Report on Form 10-K and Quarterly Reports
on Form 10-Q. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in such SEC filings. Readers are
cautioned not to place undue reliance on any of these forward-looking statements, which reflect our management's views as of the date of this Investor Presentation. We cannot
guarantee future results, levels of activity, performance or achievements, and we expressly disclaim any obligation to release publicly any updates or revisions to any of these
forward-looking statements to reflect any change in our expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.
2
Key Topics
Strategy Competitive Top
Changes Environment Priorities
3
Strategy Competitive Top
Changes Environment Priorities
4
Enhanced Real Estate Strategy
From: Portfolio Optimization (2016-2017)
To: Portfolio Optimization (2018 Pruning)
+
Monetize Select High-Value Communities
In 2018 we expect to:
Optimize the Portfolio Monetize select assets
Prune additional communities Sell several high-performing
communities
Anticipate these new asset sales will exceed $250 million of
proceeds, net of associated debt and transaction costs
5
Focused Operational Strategy
Our Mission Our Strategy
Enriching the lives of those we serve with
compassion, respect, excellence and integrity Win Locally by providing choices for high
quality care & personalized service by caring
Our Vision associates while leveraging industry leading
To be the nation’s first choice in senior living scale and experience
Our Plan
Associates: Residents: Shareholders:
Attract, engage, develop, Earn resident and family Take action to provide
and retain the best trust and endorsements by attractive long-term returns
associates providing valued high to our shareholders
quality care and
personalized service
6
Brookdale is the Premier Senior Housing Provider
Most diversified service 54% of our target senior #1 Independent Living,
continuum and broad population lives within Assisted Living, and
geographic footprint 20 minutes of a Memory Care in
Brookdale community(1) 50% of top 50 markets(2)
High quality, 80+% private pay portfolio(3) Brookdale #1 in units operated(4)
Other
3% 100,000
Medicare
Medicaid
12%
3%
50,000
0
Private Pay Brookdale Holiday Life Care Sunrise Five Star
82% Retirement Services Senior Senior
Living Living
Sources:
(1) ESRI, Brookdale. Seniors population is defined as age 75+ with an annual income of $50,000 or greater and within the United States
(2) National Investment Center for Seniors Housing & Care (NIC) as of the fourth quarter 2017 and reported in January 2018
(3) Brookdale internal data based on resident and patient fees for the full year 2017
(4) For Brookdale, actual as of December 2017; for peers, as self-reported to ASHA, June 2017 7
Strategy Competitive Top
Changes Environment Priorities
8
Senior Housing Mix
By Service Type
Industry(1) Brookdale
SNF
SNF 5%
11% MC
13%
MC
12% IL
IL 33%
42%
AL AL
35% 49%
There are over 2,300 operators reported in NIC data
• 92% operate five or less communities
• 73% operate a single community
Source: NIC data for the fourth quarter 2017 and reported in January 2017, excluding nursing care sector.
(1) Industry chart excludes Brookdale data
9
Competitive Environment
Industry(1)
New Starts and Opens in a Quarter Total Construction Pipeline
Number of Communities 700
Number of Communities
120 Starts Opens
90 600
60
500
30
0 400
4Q 15 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 1Q 17 2Q 17 3Q 17 4Q 17
Potential Impact on Brookdale communities(2)
New Starts in Quarter Total Construction Pipeline
within 20 Minutes of Brookdale Communities within 20 Minutes of Brookdale Communities
Number of Communities 400 of Communities
Number
380
80 Starts 360
340
60
320
300
40 280
260
20 240
220
0 200
4Q 15 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 1Q 17 2Q 17 3Q 17 4Q 17
Sources:
(1) NIC
(2) NIC, Brookdale analysis based on current Brookdale communities 10Brookdale Investment Thesis
Demographic Aging population drives Long-term opportunities for
tailwind need for senior care services companies with skill & scale
Target seniors population within 20 Seniors with Alzheimer’s disease and Brookdale is the largest operator
minutes of Brookdale community(1) other dementias(2) of senior living communities
14
Population in Millions Population in Millions
12
9 Managed Owned
10 8
7 1,023
8 communities
6 in 46 states
6 5
4 8.4
Leased
4 3 5.8
2 4.7
2
1
0 0
2010 2017 2022 F 2010 2020 F 2030 F Supportive
Age 75+ Age 75+ Age 80+ ancillary services
Income $50k + • Home health
• Hospice
Average move-in age to BKD(3)
• Outpatient
• 82: IL Entry Fee
therapy
• 83: IL
• 85: AL
Sources:
(1) ESRI, Brookdale
(2) Alzheimer’s Association publication 2017 Alzheimer’s Disease Facts and Figures; in publication seniors are defined as age 65+
(3) Brookdale internal data based on resident fees for the full year 2017 11Strategy Competitive Top
Changes Environment Priorities
12Top Priorities
Our Mission Our Strategy
Enriching the lives of those we serve with Win Locally by providing choices for high
compassion, respect, excellence and integrity quality care & personalized service by caring
associates while leveraging industry leading
Our Vision
scale and experience
To be the nation’s first choice in senior living
Our Plan
Earn resident and family
Attract, engage, develop, trust and endorsements by Take action to provide
and retain the best providing valued high attractive long-term returns
associates quality care and to our shareholders
personalized service
Associates Residents Shareholders
13Our Associate Strategy
Associate Value Proposition Key Metrics
72%
• “My Deal”(1) Retention Rate(2)
• 2017: First step was to invest more in 69%
top community leaders and in wages
within key competitive markets 66%
• 2018: Expanding 2017 model deeper
into the community organizations 63%
4Q 16 1Q 17 2Q 17 3Q 17 4Q 17
• “My Leader”(3)
65 Days to Fill(4)
• Right leaders in the right roles
60
• Validate local decision rights and
create a unified operating model 55
50
• “My Career”
45
• Develop career pathways to extend 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17
associates’ tenure
Goal: To have a competitive associate value proposition so our
vibrant, engaged workforce drives positive resident experiences.
Source: Brookdale Internal Data,
(1) “My Deal” is the total rewards program for employees, including compensation and benefits
(2) Consolidated comparable retention rate of Executive Directors and Health & Wellness Directors based on rolling 12 months average
(3) “My Leader” includes performance management, training and development
(4) Days to fill for Executive Director and Health & Wellness Director positions 14Our Resident Strategy
Narrow focus and excel at providing quality care and
housing to seniors while improving same community
RevPAR and margin
Win locally and leverage scale effectively
Optimize our marketing spend through improved
coordination between local and national activity
Build relationships that create passionate advocates
and generate referrals
Key Metrics: Brookdale Same Community
88% RevPAR(2)
Occupancy(1)
86% 4Q 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017
$ 3,919 $ 4,023 $ 3,966 $ 3,945 $ 3,942
84%
4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 + $23
(1) Senior Housing weighted average unit occupancy
(2) RevPAR, or average monthly senior housing resident fee revenues per available unit, is defined by Brookdale as resident fee
revenues, excluding Brookdale Ancillary Services segment revenue and entrance fee amortization, for the corresponding portfolio for
the period, 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 15Long-Term Shareholder Value Creation
EBITDA Margin Accretion Improve
(through Revenue and G&A) Adj. Free Cash Flow
Shareholder
Value Creation
Monetize Return Value to
Select Assets Shareholders
16Focus on Maximizing RevPAR
Incremental growth from occupancy Incremental growth from rate
1% above
Historical High 89.6% +1.0% expense
89.6%
inflation
~$30M
Incremental
Operating
Margin
86.2% 86.2%
1% ~$25M Expense
Inflation
Incremental
Q4 2017 85.2% Operating 85.2%
Margin
Approximately 65% of revenue growth from Rate increases above expense inflation
occupancy falls to incremental operating income fall to incremental operating income
This slide represents illustrative scenarios based on full year 2017, rounded to the nearest $5 million.
The results of an actual 1% change may vary by quarter.
17Cost Savings Initiatives
Initiatives Examples of Actions Expected Results
• Eliminate
• Streamline
Productivity
• Standardize 2018
• Automate
~ $25 million
G&A savings(1)
Eliminate:
Cost Controls • Through attrition
• Positions from
streamlined operations
2019
Margin expansion
Following asset sales
Scaling reduce
(related to • G&A
community sales) • OpEx while driving positive
• CapEx
resident experiences
(1) G&A Savings of $25 million are prior to normal cost inflation and normalized bonus.
18Portfolio Optimization and New Real Estate Strategy
Goals:
• Create Value for Shareholders • Simplify our Business
2016
• 50 owned assets sold Cumulative Divestitures since 2016
• 7 communities’ leases terminated
Consolidated Units
2017
15,000
• 3 owned assets sold
• 43 communities’ leases terminated
• 25 HCP (announced in November 2016)
• 18 Other 10,000
• 62 communities’ leases terminated
(restructured into unconsolidated Blackstone venture)
Previously announced transactions expected in 2018
5,000
• 15 owned assets to be sold
• 33 communities’ leases to be terminated
• 37 joint venture communities’ management
agreements may be terminated by HCP
0
• 6 managed or leased communities to be acquired 1H 2016 2H 2016 1H 2017 2H 2017
Future transactions, announced today
• Approximately 30 owned assets to be sold
19Improving Balance Sheet Metrics
$1,000 $584.0 $426.7 $546.0 $899.4 $872.6
$ in millions
Liquidity $500 216.4 59.2 181.3
537.9 514.4
improving 367.6 367.5 364.7 361.5 358.2
$-
($ in millions) 12/31/2016 3/31/2017 6/30/2017 9/30/2017 12/31/2017
Cash, Cash Equivalents & Marketable Securities Line of Credit available to draw
$500,000
$ in thousands
Debt maturities(1):
$250,000
no year with more
than ~$500 million $-
until after 2022 2018 2019 2020 2021 2022
Mortgage Notes Payable Other Notes Payable Convertible Notes Payable
CapEx Dollars
per Unit (2)
Optimize 3,526 2,917
2,511 2,013 2,124
community level
capital expenditures 2013 2014 2015 2016 2017
(1) Debt maturities defined as cash carrying value of debt
(2) CapEx per unit represents community-level capital expenditures divided by the weighted average number of available
units for the consolidated portfolio for the period.
20Pro-forma 2017
The following table reflects (i) our actual consolidated results for the full year 2017, (ii) the impact on our consolidated results of dispositions of three owned communities and the 105 lease
terminations that occurred during 2017, assuming such transactions had closed on December 31, 2016; (iii) our consolidated results for the full year 2017 on a pro-forma basis assuming that such
transactions had closed on December 31, 2016; (iv) the impact on our consolidated results of planned dispositions of 15 assets held for sale as of December 31, 2017, the terminations of leases on 33
communities expected to occur in 2018, the terminations of management agreements on 37 communities and other interim management arrangements, and our acquisition of 6 leased or managed
communities expected to occur in 2018, assuming such transactions had closed on December 31, 2016; and (v) our consolidated results for the full year 2017 on a pro-forma basis assuming that such
transactions had closed on December 31, 2016. The table does not reflect the impact of our plans to market in 2018 and sell approximately 30 owned communities.
($ in 000s) Pro-Forma 2017
Amounts Actual Results Less Amounts Attributable to Actual Results Less
Attributable to Amounts Attributable Pending Transactions & Amounts Attributable
2017 Actual Completed to Completed Transactions Completed to Completed and
Results Dispositions Dispositions after 2017(1) Pending Transactions
Consolidated portfolio A B A+B C A+B+C
Weighted average units operated 71,365 (4,563) 66,802 (3,844) 62,958
Senior Housing revenue $ 3,333,878 $ (172,556) $ 3,161,322 $ (154,432) $ 3,006,890
Brookdale Ancillary Services revenue 446,262 - 446,262 - 446,262
Senior Housing and Brookdale Ancillary Services revenue 3,780,140 (172,556) 3,607,584 (154,432) 3,453,152
Add: Management fee revenue 75,845 (5,618) 70,227 (13,606) 56,621
Less: Facility operating expense (2,602,155) 135,037 (2,467,118) 116,793 (2,350,325)
Less: General and administrative expense (excluding transaction and strategic project costs) (252,633) - (252,633) - (252,633)
Add: Non-cash stock-based compensation expense 27,832 - 27,832 - 27,832
Less: Cash operating lease payments (365,077) 13,245 (351,832) 6,682 (345,150)
Adjusted EBITDA (excluding transaction and strategic project costs) 663,952 (29,892) 634,060 (44,563) 589,497
Less: Transaction and strategic project costs (25,386) - (25,386) - (25,386)
Adjusted EBITDA 638,566 (29,892) 608,674 (44,563) 564,111
Less: Interest expense, net (290,932) 22,298 (268,634) 32,361 (236,273)
Less: Lease financing debt amortization (64,906) 3,710 (61,196) 9,440 (51,756)
Add: Proceeds from entrance fees, net of refunds and amortization 632 577 1,209 205 1,414
Add/Less: Other 660 (759) (99) (131) (230)
Less: Non-development capex, net (186,467) 127 (186,340) 3,722 (182,618)
Adjusted Free Cash Flow $ 97,553 $ (3,939) $ 93,614 $ 1,034 $ 94,648
(1) Includes management fees received in 2017 related to interim management arrangements entered into in connection with terminations of leases, but excludes prospective management fees for
such arrangements. Includes approximately $1.6 million of estimated non-development capex, net, and estimated interest expense, net, associated with non-recourse mortgage financing for 6
communities that were acquired or are expected to be acquired during 2018. Assumes that HCP elects to terminate management agreements on 37 communities and other interim management
arrangements during 2018. The closings of the expected sales of assets are subject (where applicable) to our successful marketing of such assets on terms acceptable to us, and the closings of the
various pending transactions and expected sales of assets are, or will be, subject to the satisfaction of various closing conditions, including (where applicable) the receipt of regulatory approvals.
However, there can be no assurance that the transactions will close or, if they do, when the actual closings will occur.
Important Note Regarding Non-GAAP Financial Measures. Adjusted EBITDA and Adjusted Free Cash Flow are financial measures that are not
calculated in accordance with U.S. generally accepted accounting principles (GAAP). See the definitions of, and important information regarding,
such measures, including reconciliations to the most comparable GAAP financial measures, under “Non-GAAP Financial Measures” below.
21Summary
1. Strategy is focused
• Enhanced real estate strategy
• Targeted focus on improving operations and performance
Start: Investing deeper in the communities
Stop: Making local decisions nationally and
non-essential projects
Continue: Cost savings initiatives
2. Creating a stronger company, focused on winning locally
3. Commitment to shareholder value creation
22Non-GAAP Financial Measures
This Investor Presentation contains financial measures utilized by management to evaluate the Company’s operating
performance and liquidity that are not calculated in accordance with GAAP, including Adjusted EBITDA; Adjusted Free Cash
Flow; and the Company’s Proportionate Share of Adjusted Free Cash Flow of Unconsolidated Ventures. These non-GAAP
financial measures should not be considered in isolation from or as superior to or as a substitute for net income (loss),
income (loss) from operations, net cash provided by (used in) operating activities, or other financial measures determined in
accordance with GAAP. Management uses these non-GAAP financial measures to supplement the Company’s GAAP
results to provide a more complete understanding of the factors and trends affecting the business. Investors are urged to
review the definitions and reconciliations set forth in this section of such non-GAAP financial measures to their most
comparable GAAP financial measures and to review the information under “Reconciliation of Non-GAAP Financial
Measures” in the Company’s earnings release dated February 22, 2018 for additional information regarding the Company’s
use, and the limitations of, the Company’s non-GAAP financial measures. Investors are cautioned that amounts presented in
accordance with the Company’s definitions of these non-GAAP measures may not be comparable to similar measures
disclosed by other companies, because not all companies calculate such measures in the same manner.
Accounting Standards Update 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash
Payments ("ASU 2016-15") is effective for the Company on January 1, 2018 and will be applied retrospectively for all
periods presented. Among other things, ASU 2016-15 provides that debt prepayment and extinguishment costs will be
classified within financing activities. We have identified $11.7 million of cash paid for debt modification and extinguishment
costs for the year ended December 31, 2017, which we have determined will be retrospectively classified as cash flows from
financing activities and will result in an increase to the amount of net cash provided by operating activities for such years.
We do not anticipate changing our definition of Adjusted Free Cash Flow as a result of our adoption of ASU 2016-15. As a
result, we anticipate that in future presentations of Adjusted Free Cash Flow that accompany 2018 financial results, the
amount of Adjusted Free Cash Flow for the year ended December 31, 2017 will be increased by $11.7 million.
23Non-GAAP Financial Measures (Continued)
Adjusted EBITDA — Definition and Reconciliation
The Company defines Adjusted EBITDA as net income (loss) before: provision (benefit) for income taxes; non-operating (income) expense items;
depreciation and amortization (including non-cash impairment charges); (gain) loss on sale or acquisition of communities (including gain (loss) on
facility lease termination); straight-line lease expense (income), net of amortization of (above) below market rents; amortization of deferred gain;
non-cash stock-based compensation expense; and change in future service obligation.
The table below reconciles the Company’s Adjusted EBITDA from the Company’s net income (loss) for the year ended December 31, 2017
(in thousands):
Year Ended December 31, 2017
Net income (loss) $ (571,606)
Benefit for income taxes (16,515)
Equity in loss of unconsolidated ventures 14,827
Debt modification and extinguishment costs 12,409
Gain on sale of assets, net (19,273)
Other non-operating income (11,418)
Interest expense 326,154
Interest income (4,623)
Income (loss) from operations (270,045)
Depreciation and amortization 482,077
Goodwill and asset impairment 409,782
Loss on facility lease termination 14,276
Straight-line lease income (14,313)
Amortization of above market lease, net (6,677)
Amortization of deferred gain (4,366)
Non-cash stock-based compensation expense 27,832
Adjusted EBITDA $ 638,566
24Non-GAAP Financial Measures (Continued)
Adjusted Free Cash Flow — Definitions and Reconciliations
The Company defines Adjusted Free Cash Flow as net cash provided by (used in) operating activities before: changes in operating assets and
liabilities; gain (loss) on facility lease termination; and distributions from unconsolidated ventures from cumulative share of net earnings; plus:
proceeds from refundable entrance fees, net of refunds; and property insurance proceeds; less: lease financing debt amortization and Non-
Development Capital Expenditures. 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. Non-
Development Capital Expenditures do not include capital expenditures for community expansions and major community redevelopment and
repositioning projects, including the Company’s Program Max initiative, and the development of new communities (i.e., Development Capital
Expenditures). Amounts of Non-Development Capital Expenditures are presented net of lessor reimbursements received or anticipated to be
received in the calculation of Adjusted Free Cash Flow.
Brookdale’s proportionate share of Adjusted Free Cash Flow of unconsolidated ventures is calculated based on the Company’s equity ownership
percentage and in a manner consistent with the Company’s definition of Adjusted Free Cash Flow for its consolidated entities. The Company’s
investments in its unconsolidated ventures are accounted for under the equity method of accounting and, therefore, the Company’s proportionate
share of Adjusted Free Cash Flow of unconsolidated ventures does not represent cash available to the Company’s consolidated business except to
the extent it is distributed to the Company.
The table below reconciles the Company’s Adjusted Free Cash Flow from the Company’s net cash provided by (used in) operating activities for the
year ended December 31, 2017 (in thousands): Year Ended December 31, 2017
Net cash provided by operating activities $ 366,664
Net cash used in investing activities (601,307)
Net cash provided by financing activities 240,893
Net increase in cash and cash equivalents $ 6,250
Net cash provided by operating activities $ 366,664
Changes in operating assets and liabilities (15,851)
Proceeds from refundable entrance fees, net of refunds (2,179)
Lease financing debt amortization (64,906)
Distributions from unconsolidated ventures from cumulative share of net earnings (8,258)
Non-development capital expenditures, net (186,467)
Property insurance proceeds 8,550
Adjusted Free Cash Flow $ 97,553
25Non-GAAP Financial Measures (Continued)
The table below reconciles the Company’s proportionate share of Adjusted Free Cash Flow of unconsolidated ventures from net cash
provided by (used in) operating activities of such unconsolidated ventures for the year ended December 31, 2017 (in thousands). For purposes of
this presentation, amounts for each line item represent the aggregate amounts of such line items for all of the Company’s unconsolidated ventures.
Year Ended December 31, 2017
Net cash provided by operating activities $ 269,755
Net cash used in investing activities (1,267,525)
Net cash provided by financing activities 1,031,064
Net increase in cash and cash equivalents $ 33,294
Net cash provided by operating activities $ 269,755
Changes in operating assets and liabilities (13,184)
Proceeds from refundable entrance fees, net of refunds (17,366)
Non-development capital expenditures, net (100,621)
Property insurance proceeds 2,425
Adjusted Free Cash Flow of Unconsolidated Ventures $ 141,009
Brookdale's weighted average ownership percentage 25.1 %
Brookdale’s proportionate share of Adjusted Free Cash Flow of Unconsolidated Ventures $ 35,416
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