bkd-20221107
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM8-K
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
 
 
Date of Report (Date of earliest event reported)November 7, 2022
Brookdale Senior Living Inc.
(Exact name of registrant as specified in its charter)
Delaware001-3264120-3068069
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
111 Westwood Place,Suite 400,Brentwood,Tennessee37027
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code (615)221-2250
 
 
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
  
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 Par Value Per ShareBKDNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Section 2 - Financial Information

Item 2.02 Results of Operations and Financial Condition.

On November 7, 2022, Brookdale Senior Living Inc. (the "Company") issued a press release announcing its third quarter 2022 financial results and announcing a conference call to review these results. A copy of the press release is furnished herewith as Exhibit 99.1.

Supplemental information related to the Company's third quarter 2022 results is furnished herewith as Exhibit 99.2.

The information furnished pursuant to this Current Report on Form 8-K (including the exhibits hereto) shall not be considered "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filing by the Company under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, unless the Company expressly sets forth by specific reference in such filing that such information is to be considered "filed" or incorporated by reference therein.

Section 7 - Regulation FD

Item 7.01 Regulation FD Disclosure.

The information set forth in Item 2.02 of this report is incorporated herein by reference.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d)    Exhibits

99.1     Press Release dated November 7, 2022

99.2     Supplemental Information

104     Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BROOKDALE SENIOR LIVING INC.
Date:November 7, 2022By:/s/ Chad C. White
Name:Chad C. White
Title:Executive Vice President, General Counsel and Secretary




Exhibit 99.1

Brookdale Announces Third Quarter 2022 Results

Nashville, Tenn., November 7, 2022 - Brookdale Senior Living Inc. (NYSE: BKD) ("Brookdale" or the "Company") announced results for the quarter ended September 30, 2022.

HIGHLIGHTS

•Third quarter consolidated revenue per available unit (RevPAR) increased 9.7% year-over-year.
•Third quarter consolidated weighted average occupancy increased 390 basis points year-over-year.
•In October 2022, the Company completed a $220.0 million debt refinancing.

“I am pleased with the acceleration of this year’s occupancy growth to 180 basis points in the third quarter,” said Lucinda (“Cindy”) Baier, Brookdale’s President and CEO. “Our weighted average occupancy grew 750 basis points since the start of the positive turn in March 2021, which demonstrates the strength of our recovery. While the labor market continues to be challenging, we sequentially reduced contract labor for the third quarter by over 40% and achieved our 11th consecutive month of positive net hires in September. I am especially grateful to our many, dedicated associates who cared passionately for our residents during and after Hurricane Ian.”

SUMMARY OF THIRD QUARTER RESULTS

Same Community Senior Housing (Independent Living (IL), Assisted Living and Memory Care (AL/MC), and CCRCs)

The table below presents a summary of operating results and metrics of the Company's same community senior housing portfolio.(1)
Year-Over-Year
Increase / (Decrease)		Sequential Increase / (Decrease)
($ in millions, except RevPAR and RevPOR)3Q 20223Q 2021AmountPercent2Q 2022AmountPercent
Resident fee revenue$629.5$573.0$56.59.9%$617.1$12.42.0%
Facility operating expense$505.1$454.8$50.311.1%$492.4$12.72.6%
RevPAR$4,151$3,778$3739.9%$4,068$832.0%
Weighted average occupancy76.5%72.5%400 bpsn/a74.6%190 bpsn/a
RevPOR$5,429$5,211$2184.2%$5,453$(24)(0.4)%

(1)    The same community senior housing 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.
•3Q 2022 vs 3Q 2021:     
◦Same community resident fees increased due to the increases in occupancy and RevPOR.
◦The increase in occupancy primarily reflects the impact of the Company's execution on key initiatives to rebuild occupancy lost due to the COVID-19 pandemic.
◦The increase in RevPOR was primarily the result of in-place rate increases, partially offset by lower care revenue as new resident acuity returned to pre-pandemic levels.
•3Q 2022 vs 2Q 2022:
◦Same community resident fees increased due to the increase in occupancy, partially offset by lower RevPOR due to discounting and changes in resident acuity.

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•Facility operating expense.
•3Q 2022 vs 3Q 2021:
◦The increase was primarily due to higher labor expense primarily resulting from merit and market wage rate adjustments, an increase in hours worked due to increased occupancy during the period, and an increase in the use of overtime, partially offset by a decrease in the use of contract labor.
◦Additionally, broad inflationary pressure, higher repairs and maintenance volume, and an increase in food costs due to increased occupancy during the period contributed to the increase in same community facility operating expense.
•3Q 2022 vs 2Q 2022:
◦The increase in same community facility operating expense was primarily due to broad inflationary pressure, a seasonal increase in utility costs, higher repairs and maintenance volume, and an additional day during the third quarter of 2022.
◦Same community labor expense increased 1.1% sequentially primarily due to an increase in hours worked by associates and an additional day, which was a holiday, during the third quarter of 2022, partially offset by decreased use of contract labor.
•The Company's same community senior housing portfolio incurred $3.5 million, $1.9 million, and $6.5 million of incremental direct costs during the third quarter of 2022, second quarter of 2022, and third quarter of 2021, respectively, to respond to the COVID-19 pandemic.

Consolidated

The table below presents a summary of consolidated operating results.
Year-Over-Year
Increase / (Decrease)		Sequential
Increase / (Decrease)
($ in millions, except RevPAR and RevPOR)3Q 20223Q 2021AmountPercent2Q 2022AmountPercent
Resident fee revenue$650.2$600.1$50.18.3%$640.4$9.81.5%
Management fee revenue3.03.6(0.6)(16.7)%3.3(0.3)(9.1)%
Other operating income66.80.166.7NM8.458.4NM
Facility operating expense525.5480.445.19.4%513.711.82.3%
General and administrative expense41.343.8(2.5)(5.7)%41.8(0.5)(1.2)%
Net income (loss)(28.4)174.3(202.7)NM(84.3)(55.9)(66.3)%
Adjusted EBITDA (2)
106.934.672.3NM50.756.2110.8%
RevPAR$4,150$3,784$3669.7%$4,071$791.9%
Weighted average occupancy76.4%72.5%390 bpsn/a74.6%180 bpsn/a
RevPOR$5,432$5,219$2134.1%$5,459$(27)(0.5)%

(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.

•Resident fee revenue.
•The changes in resident fee revenue were primarily due to the same community operating results discussed above.
•The disposition of seven communities through sales of owned communities and lease terminations since the beginning of the third quarter of 2021 resulted in $7.2 million less in resident fees during the third quarter of 2022 compared to the third quarter of 2021.
•The disposition of four communities since the beginning of the second quarter of 2022 resulted in $2.2 million less in resident fees during the third quarter of 2022 compared to the second quarter of 2022.

The table below sets forth the Company's recent consolidated occupancy trend.

2021JanFebMarAprMayJunJulAugSepOctNovDec
Weighted average70.0 %69.4 %69.4 %69.9 %70.5 %71.2 %72.0 %72.5 %73.0 %73.3 %73.5 %73.6 %
Month end70.4 %70.1 %70.6 %71.1 %71.6 %72.6 %73.3 %73.7 %74.2 %74.5 %74.3 %74.5 %
2022JanFebMarAprMayJunJulAugSepOct
Weighted average73.4 %73.3 %73.6 %73.9 %74.6 %75.2 %75.9 %76.4 %76.9 %77.2 %
Month end74.2 %74.4 %75.0 %75.3 %76.2 %76.6 %77.1 %77.9 %78.4 %78.2 %

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•Other operating income. During the third quarter of 2022, the Company accepted $61.1 million of Phase 4 grants from the general distribution of the Public Health and Social Services Emergency Fund ("Provider Relief Fund") administered by the U.S. Department of Health and Human Services, under which grants have been made available to eligible healthcare providers for healthcare related expenses or lost revenues attributable to COVID-19. The Company recognized the Phase 4 grants, $4.7 million of employee retention credits, and $1.0 million of other government grants as other operating income during the third quarter of 2022.

•Facility operating expense.
•The changes in facility operating expense were primarily due to the same community operating results discussed above.
•The disposition of seven communities resulted in $6.6 million less in facility operating expenses during the third quarter of 2022 compared to the third quarter of 2021.
•The disposition of four communities resulted in $1.6 million less in facility operating expenses during the third quarter of 2022 compared to the second quarter of 2022.

•Net income (loss).
•3Q 2022 vs 3Q 2021: The change in net income (loss) was primarily attributable to the net gain on sale of assets of $288.2 million recognized in the third quarter of 2021 for the sale of 80% of the Company's equity in its Health Care Services segment. This change was partially offset by the net impact of the other operating income, revenue, and facility operating expense factors previously discussed.
•3Q 2022 vs 2Q 2022: The decrease in net loss was primarily attributable to the impact of other operating income previously discussed, offset by the net impact of the revenue and facility operating expense factors also previously discussed.

•Adjusted EBITDA.
•3Q 2022 vs 3Q 2021: The increase in Adjusted EBITDA was primarily attributable to the increase in other operating income and the net impact of the revenue and facility operating expense factors previously discussed.
•3Q 2022 vs 2Q 2022: The increase in Adjusted EBITDA was primarily attributable to the increases in other operating income and resident fee revenue, partially offset by the increase in facility operating expense.

LIQUIDITY

The table below presents a summary of the Company’s net cash provided by (used in) operating activities, non-development capital expenditures, net, and Adjusted Free Cash Flow.
Year-Over-Year
Increase / (Decrease)
Sequential
Increase / (Decrease)
($ in millions)3Q 20223Q 2021Amount2Q 2022Amount
Net cash provided by (used in) operating activities$63.5 $7.2 $56.3 $11.6 $51.9 
Non-development capital expenditures, net43.8 28.2 15.6 45.7 (1.9)
Adjusted Free Cash Flow (3)
4.1 (42.6)46.7 (48.5)52.6 

(3)    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.
•3Q 2022 vs 3Q 2021: The increase in net cash provided by operating activities was primarily attributable to a $61.7 million increase in Provider Relief Funds and other government grants and credits received and an increase in same community revenue. These changes were partially offset by an increase in same community facility operating expense and a decrease in lessor reimbursements for capital expenditures for operating leases.
•3Q 2022 vs 2Q 2022: The increase in net cash provided by operating activities was primarily attributable to a $58.2 million increase in Provider Relief Funds and other government grants and credits received and an increase in same community revenue. These changes were partially offset by increases in same community facility operating expense and debt interest expense.

•Non-development capital expenditures, net. The increase in non-development capital expenditures, net for the third quarter of 2022 compared to the third quarter of 2021 was primarily attributable to an $8.6 million decrease in lessor reimbursements for capital expenditures. Additionally, higher investment in the Company's communities due to unit upgrades as the Company increases move-ins and routine maintenance contributed to the increase.
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•Adjusted Free Cash Flow.
•3Q 2022 vs 3Q 2021: The $46.7 million change in Adjusted Free Cash Flow was primarily attributable to the increase in net cash provided by operating activities, excluding a $7.2 million decrease in lessor reimbursements for capital expenditures for operating leases. The change was partially offset by the increase in non-development capital expenditures, net.
•3Q 2022 vs 2Q 2022: The $52.6 million change in Adjusted Free Cash Flow was attributable to the increase in net cash provided by operating activities, primarily reflecting the $61.1 million of Phase 4 grants from the Provider Relief Fund accepted during the third quarter of 2022.

•Total Liquidity. Total liquidity of $395.6 million as of September 30, 2022 included $299.2 million of unrestricted cash and cash equivalents, $89.5 million of marketable securities, and $6.9 million of availability on the Company's secured credit facility. Total liquidity as of September 30, 2022 decreased $16.1 million from June 30, 2022, primarily attributable to $9.1 million of payments of mortgage debt.

FINANCING UPDATE

On October 13, 2022, the Company obtained $220.0 million of debt secured by first priority mortgages on 24 communities. The loan bears interest at a variable rate equal to the one-month Secured Overnight Financing Rate ("SOFR") plus a margin of 245 basis points, and is interest only for the first three years. The debt matures in October 2025 with two one-year renewal options, exercisable subject to certain performance criteria. The proceeds from the financing were primarily utilized to repay $199.6 million of outstanding mortgage debt maturing in 2023 and to purchase a SOFR interest rate swap instrument for $6.1 million. The interest rate swap instrument has a $220.0 million notional amount, a fixed interest rate of 3.0%, and a term of eighteen months.

IMPACTS OF HURRICANE IAN

On September 28, 2022, Hurricane Ian made landfall in Florida. The Company operates 77 communities that were within the path of the storm. Under its emergency evacuation plans, the Company evacuated nine communities prior to landfall. All of the impacted communities returned to operation. Several communities will experience some continuing disruption as storm damage is remediated. During the three months ended September 30, 2022, the Company incurred $0.3 million of facility operating expenses related to hurricane response and evacuation. In addition, during the three months ended September 30, 2022, the Company recognized $3.8 million of impairment expense for property, plant, and equipment casualty losses sustained at communities as a result of Hurricane Ian.

Based on management's preliminary assessments, the Company expects additional facility operating expense related to the hurricane response and remediation of storm damage of approximately $8.0 million, net of expected reimbursement from its property and casualty and business interruption insurance policies, for the three months ended December 31, 2022. The Company estimates that it will incur an additional approximately $10.0 million of capital expenditures for property remediation, primarily during the three months ended December 31, 2022, for which it expects approximately $3.0 million of reimbursement from its property and casualty insurance policies subsequent to 2022. The foregoing estimates are preliminary estimates derived by management from the information available at this time. The actual amounts and timing of amounts may differ.

2022 OUTLOOK

The Company updated its full year 2022 RevPAR growth and Adjusted EBITDA guidance to incorporate year-to-date results and revised expectations for the remainder of 2022.

Full Year 2022 Guidance
RevPAR growth
~10%
Adjusted EBITDA
$250 million - $260 million

This guidance excludes the potential impact of any future acquisition or disposition activity. 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 third quarter 2022 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.

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EARNINGS CONFERENCE CALL

Brookdale's management will conduct a conference call to discuss the financial results for the third quarter 2022 on November 8, 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 "873703".

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 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 November 15, 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 "090493".

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 672 communities in 41 states as of September 30, 2022, 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 at facebook.com/brookdaleseniorliving or Twitter at twitter.com/brookdaleliving.

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
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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, 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 putative class action 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.

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Condensed Consolidated Statements of Operations
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands, except per share data)2022202120222021
Revenue
Resident fees$650,248 $600,095 $1,927,610 $1,938,423 
Management fees2,967 3,621 9,625 17,185 
Reimbursed costs incurred on behalf of managed communities37,484 37,849 112,013 146,651 
Other operating income66,759 89 75,546 12,132 
Total revenue and other operating income 757,458 641,654 2,124,794 2,114,391 
Expense
Facility operating expense (excluding facility depreciation and amortization of $81,405, $78,756, $242,281, and $233,951 respectively)
525,510 480,423 1,551,938 1,587,581 
General and administrative expense (including non-cash stock-based compensation expense of $3,403, $3,568, $10,907, and $12,878 respectively)
41,331 43,812 128,209 146,155 
Facility operating lease expense41,317 43,226 124,419 131,508 
Depreciation and amortization86,922 84,560 259,229 252,042 
Asset impairment5,688 639 17,362 13,394 
Costs incurred on behalf of managed communities37,484 37,849 112,013 146,651 
Total operating expense738,252 690,509 2,193,170 2,277,331 
Income (loss) from operations19,206 (48,855)(68,376)(162,940)
Interest income2,192 286 3,065 1,048 
Interest expense:
Debt(41,330)(35,708)(110,180)(106,484)
Financing lease obligations(11,916)(11,674)(35,968)(34,549)
Amortization of deferred financing costs(1,528)(1,884)(4,590)(5,706)
Change in fair value of derivatives4,901 (95)9,277 (286)
Equity in earnings (loss) of unconsolidated ventures(2,020)(1,474)(9,353)11,941 
Gain (loss) on sale of assets, net(56)288,375 611 289,408 
Other non-operating income (loss)1,877 571 1,739 5,163 
Income (loss) before income taxes(28,674)189,542 (213,775)(2,405)
Benefit (provision) for income taxes300 (15,279)1,086 (15,239)
Net income (loss)(28,374)174,263 (212,689)(17,644)
Net (income) loss attributable to noncontrolling interest15 19 (101)56 
Net income (loss) attributable to Brookdale Senior Living Inc.
  common stockholders		$(28,359)$174,282 $(212,790)$(17,588)
Net income (loss) per share attributable to Brookdale Senior
   Living Inc. common stockholders:
Basic$(0.15)$0.94 $(1.14)$(0.10)
Diluted$(0.15)$0.89 $(1.14)$(0.10)
Weighted average common shares outstanding:
Basic186,790 185,317 186,493 184,841 
Diluted186,790 196,230 186,493 184,841 
Page 7


Condensed Consolidated Balance Sheets
(in thousands)September 30, 2022December 31, 2021
Cash and cash equivalents$299,201 $347,031 
Marketable securities89,504 182,393 
Restricted cash37,258 26,845 
Accounts receivable, net51,548 51,137 
Assets held for sale— 3,642 
Prepaid expenses and other current assets, net103,923 87,946 
Total current assets581,434 698,994 
Property, plant and equipment and leasehold intangibles, net4,801,988 4,904,292 
Operating lease right-of-use assets539,166 630,423 
Other assets, net171,365 176,758 
Total assets$6,093,953 $6,410,467 
Current portion of long-term debt$61,000 $63,125 
Current portion of financing lease obligations23,620 22,151 
Current portion of operating lease obligations158,645 148,642 
Other current liabilities413,738 398,036 
Total current liabilities657,003 631,954 
Long-term debt, less current portion3,758,929 3,778,087 
Financing lease obligations, less current portion522,924 532,136 
Operating lease obligations, less current portion580,213 681,876 
Other liabilities82,085 86,791 
Total liabilities5,601,154 5,710,844 
Total Brookdale Senior Living Inc. stockholders' equity491,237 697,402 
Noncontrolling interest1,562 2,221 
Total equity492,799 699,623 
Total liabilities and equity$6,093,953 $6,410,467 
Page 8


Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30,
(in thousands)20222021
Cash Flows from Operating Activities
Net income (loss)$(212,689)$(17,644)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization, net263,819 257,748 
Asset impairment17,362 13,394 
Equity in (earnings) loss of unconsolidated ventures9,353 (11,941)
Distributions from unconsolidated ventures from cumulative share of net earnings561 6,191 
Amortization of entrance fees(1,816)(1,320)
Proceeds from deferred entrance fee revenue2,360 2,981 
Deferred income tax (benefit) provision(2,068)8,512 
Operating lease expense adjustment(25,329)(16,263)
Change in fair value of derivatives(9,277)286 
Loss (gain) on sale of assets, net(611)(289,408)
Non-cash stock-based compensation expense10,907 12,878 
Other(996)(4,399)
Changes in operating assets and liabilities:
Accounts receivable, net(411)(584)
Prepaid expenses and other assets, net(11,807)(7,487)
Prepaid insurance premiums financed with notes payable(5,552)(4,634)
Trade accounts payable and accrued expenses1,548 21,878 
Refundable fees and deferred revenue7,265 (10,492)
Operating lease assets and liabilities for lessor capital expenditure
   reimbursements
9,224 27,057 
Net cash provided by (used in) operating activities51,843 (13,247)
Cash Flows from Investing Activities
Change in lease security deposits and lease acquisition deposits, net317 19 
Purchase of marketable securities(230,106)(247,847)
Sale and maturities of marketable securities323,765 262,995 
Capital expenditures, net of related payables(150,572)(125,817)
Acquisition of assets(6,004)— 
Investment in unconsolidated ventures(192)(5,359)
Distributions received from unconsolidated ventures— 2,155 
Proceeds from sale of assets, net5,844 315,583 
Other(545)— 
Net cash provided by (used in) investing activities(57,493)201,729 
Cash Flows from Financing Activities
Proceeds from debt32,031 25,158 
Repayment of debt and financing lease obligations(64,190)(96,065)
Payment of financing costs, net of related payables(646)(196)
Payments of employee taxes for withheld shares(4,282)(4,772)
Other(760)144 
Net cash provided by (used in) financing activities(37,847)(75,731)
Net increase (decrease) in cash, cash equivalents, and restricted cash(43,497)112,751 
Cash, cash equivalents, and restricted cash at beginning of period438,314 465,148 
Cash, cash equivalents, and restricted cash at end of period$394,817 $577,899 
Page 9


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 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.

Page 10


The table below reconciles the Company's Adjusted EBITDA from net income (loss).
Three Months EndedNine Months Ended
(in thousands)September 30, 2022June 30, 2022September 30, 2021September 30, 2022
Net income (loss)$(28,374)$(84,283)$174,263 $(212,689)
Provision (benefit) for income taxes(300)1,190 15,279 (1,086)
Equity in (earnings) loss of unconsolidated ventures2,020 2,439 1,474 9,353 
Loss (gain) on sale of assets, net56 (961)(288,375)(611)
Other non-operating (income) loss(1,877)111 (571)(1,739)
Interest expense49,873 48,234 49,361 141,461 
Interest income(2,192)(778)(286)(3,065)
Income (loss) from operations19,206 (34,048)(48,855)(68,376)
Depreciation and amortization86,922 86,623 84,560 259,229 
Asset impairment5,688 2,599 639 17,362 
Operating lease expense adjustment(8,714)(8,308)(6,273)(25,329)
Non-cash stock-based compensation expense3,403 3,619 3,568 10,907 
Transaction and organizational restructuring costs346 229 943 948 
Adjusted EBITDA(4)
$106,851 $50,714 $34,582 $194,741 

(4)    Adjusted EBITDA includes a $66.8 million, $8.4 million, $0.1 million, and $75.5 million benefit for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, and nine months ended September 30, 2022, respectively, of government grants and credits recognized in other operating income.

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. Additionally, Adjusted Free Cash Flow excludes certain other investing and financing activities, such as cash used to purchase interest rate cap instruments and cash provided by settlements of interest rate cap instruments.

Page 11


The table below reconciles Adjusted Free Cash Flow from net cash provided by (used in) operating activities.
Three Months Ended
(in thousands)September 30, 2022June 30, 2022September 30, 2021
Net cash provided by (used in) operating activities$63,521 $11,577 $7,200 
Net cash provided by (used in) investing activities22,508 (43,838)203,974 
Net cash provided by (used in) financing activities(19,754)(17,690)(19,177)
Net increase (decrease) in cash, cash equivalents,
    and restricted cash		$66,275 $(49,951)$191,997 
Net cash provided by (used in) operating activities$63,521 $11,577 $7,200 
Distributions from unconsolidated ventures from cumulative share of net earnings— — (836)
Changes in prepaid insurance premiums financed with notes payable(5,700)(5,377)(4,151)
Changes in assets and liabilities for lessor capital expenditure reimbursements under operating leases(4,367)(3,367)(11,551)
Non-development capital expenditures, net(43,819)(45,686)(28,193)
Payment of financing lease obligations(5,506)(5,610)(5,039)
Adjusted Free Cash Flow (5)
$4,129 $(48,463)$(42,570)

(5)     Adjusted Free Cash Flow includes:
•$62.8 million, $4.6 million, and $1.1 million benefit for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively, from government grants and credits received.
•$1.2 million and $3.5 million recoupment of accelerated/advanced Medicare payments for the three months ended June 30, 2022 and September 30, 2021, respectively.
•$0.3 million, $0.2 million, and $0.9 million for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively, for transaction and organizational costs.



Contact:
Kathy MacDonald
SVP Investor Relations
(615) 505-1968
[email protected]
Page 12

Supplemental Information 3rd Quarter 2022 Exhibit 99.2

 
2 Overview 3 Segment Overview 6 Senior Housing 7 General and Administrative ("G&A") Expense 12 Capital Expenditures 13 Cash Facility Lease Payments 14 Capital Structure 15 Definitions 16 Appendices: Summary Financial Impact: COVID-19 19 Non-GAAP Financial Measures 21 Table of Contents

 
3 Managed 4,605 Owned 31,588 Leased 20,570 Managed 31 Owned 346 Leased 295 672 communities 56,763 units (1) The Company sold 80% of its equity in its Health Care Services segment on July 1, 2021 (the "HCS Sale") and recognized a $286.5 million gain on the sale. For periods beginning July 1, 2021, the results and financial position of the Health Care Services segment are deconsolidated from the Company's consolidated financial statements and its 20% equity interest in the Health Care Services Venture (the "HCS Venture") is accounted for under the equity method of accounting. Important Note Regarding Non-GAAP Financial Measures • Adjusted EBITDA and Adjusted Free Cash Flow are financial measures that are not calculated in accordance with GAAP. See "Definitions" and "Non-GAAP Financial Measures" for the definitions of such measures and other important information regarding such measures, including reconciliations to the most comparable GAAP measures. 2021 2022 3Q22 vs 3Q21 YTD 3Q22 vs YTD 3Q21 ($ in 000s, except RevPAR ) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q Better B/ (Worse) (W) B/(W) Resident fee revenue $ 664,350 $ 673,978 $ 600,095 $ 605,425 $ 2,543,848 $ 636,974 $ 640,388 $ 650,248 $ 1,927,610 8.4% (0.6) % Senior Housing resident fee revenue $ 577,499 $ 586,665 $ 600,095 $ 605,425 $ 2,369,684 $ 636,974 $ 640,388 $ 650,248 8.4 % 9.3 % Health Care Services resident fee revenue (1) $ 86,851 $ 87,313 $ — $ — $ 174,164 $ — $ — $ — N/A N/A Management fee revenue $ 8,566 $ 4,998 $ 3,621 $ 3,413 $ 20,598 $ 3,329 $ 3,329 $ 2,967 (18.1) % (44.0) % Other operating income $ 10,735 $ 1,308 $ 89 $ 236 $ 12,368 $ 376 $ 8,411 $ 66,759 NM NM Net income (loss) (1) $ (108,303) $ (83,604) $ 174,263 $ (81,720) $ (99,364) $ (100,032) $ (84,283) $ (28,374) NM NM Net cash provided by (used in) operating activities $ (23,857) $ 3,410 $ 7,200 $ (81,387) $ (94,634) $ (23,255) $ 11,577 $ 63,521 NM NM Adjusted EBITDA $ 34,981 $ 33,064 $ 34,582 $ 35,849 $ 138,476 $ 37,176 $ 50,714 $ 106,851 NM 89.8 % Adjusted Free Cash Flow $ (50,674) $ (54,747) $ (42,570) $ (138,703) $ (286,694) $ (53,493) $ (48,463) $ 4,129 NM 33.9 % RevPAR $ 3,631 $ 3,692 $ 3,784 $ 3,828 $ 3,734 $ 4,032 $ 4,071 $ 4,150 9.7 % 10.3 % Weighted average occupancy 69.6% 70.5% 72.5% 73.5% 71.5% 73.4% 74.6% 76.4% 390 bps 390 bps 3Q 2022 weighted average occupancy (consolidated communities) Occupancy Band Community Count % of Period End Communities Greater than 95% 87 14% 90% > 95% 72 11% 85% > 90% 62 10% 80% > 85% 68 11% 75% > 80% 73 11% 70% > 75% 73 11% Less than 70% 206 32% Total 641 100% Overview As of September 30, 2022 Consolidated: 52,158 Consolidated: 641

 
4 2021 2022 3Q22 vs 3Q21 YTD 3Q22 vs YTD 3Q21 ($ in 000s) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Senior Housing resident fee revenue $ 577,499 $ 586,665 $ 600,095 $ 605,425 $ 2,369,684 $ 636,974 $ 640,388 $ 650,248 8.4 % 9.3 % Health Care Services resident fee revenue 86,851 87,313 — — 174,164 — — — N/A N/A Management fee revenue 8,566 4,998 3,621 3,413 20,598 3,329 3,329 2,967 (18.1) % (44.0) % Other operating income 10,735 1,308 89 236 12,368 376 8,411 66,759 NM NM Senior Housing facility operating expense (469,281) (466,424) (480,423) (488,282) (1,904,410) (512,764) (513,664) (525,510) (9.4) % (9.6) % Health Care Services facility operating expense (87,031) (84,422) — — (171,453) — — — N/A N/A Combined Segment Operating Income 127,339 129,438 123,382 120,792 500,951 127,915 138,464 194,464 57.6 % 21.2 % General and administrative expense (1) (43,276) (47,184) (39,301) (35,076) (164,837) (40,868) (37,904) (37,582) 4.4 % 10.3 % Cash facility operating lease payments (see page 14) (49,082) (49,190) (49,499) (49,867) (197,638) (49,871) (49,846) (50,031) (1.1) % (1.3) % Adjusted EBITDA (2) 34,981 33,064 34,582 35,849 138,476 37,176 50,714 106,851 NM 89.8 % Transaction and Organizational Restructuring Costs (1,884) (689) (943) (293) (3,809) (373) (229) (346) 63.3 % 73.0 % Interest expense, net (see page 14) (46,313) (46,576) (47,096) (46,357) (186,342) (45,120) (46,909) (51,054) (8.4) % (2.2) % Payment of financing lease obligations (4,789) (4,864) (5,039) (5,182) (19,874) (5,490) (5,610) (5,506) (9.3) % (13.0) % Changes in working capital (3) (5,320) (1,129) 9,764 (82,394) (79,079) (272) (552) (2,581) NM NM Non-Development Capital Expenditures, net (see page 13) (27,450) (35,795) (28,193) (45,972) (137,410) (39,326) (45,686) (43,819) (55.4) % (40.9) % Other (4) 101 1,242 (5,645) 5,646 1,344 - 8 (88) (191) 584 NM NM Adjusted Free Cash Flow (5) $ (50,674) $ (54,747) $ (42,570) $ (138,703) $ (286,694) $ (53,493) $ (48,463) $ 4,129 NM 33.9 % Adjusted EBITDA and Adjusted Free Cash Flow (1) Excluding non-cash stock-based compensation expense and Transaction and Organizational Restructuring Costs, see page 12. (2) Adjusted EBITDA includes government grants and credits recognized during the respective periods as presented in other operating income. (3) Excludes changes in prepaid insurance premiums financed with notes payable, lessor capital expenditure reimbursements under operating leases, and changes in operating lease assets and liabilities for lease termination. (4) Primarily consists of proceeds from business interruption insurance and state income tax (provision) benefit. (5) The Company’s Adjusted Free Cash Flow includes the impacts of financial relief and repayment of temporary liquidity relief pursuant to the Coronavirus Aid, Relief, and Economic Security Act of 2020 (“CARES Act”). Refer to page 20 for additional details.

 
5 (1) Resident fee revenue excluded from definitions of RevPAR and RevPOR is $914 thousand. (2) All Other primarily includes communities operated by the Company pursuant to management agreements. (3) Adjusted EBITDA for the third quarter of 2022 includes $66.8 million of government grants and credits recognized in other operating income. (4) Excludes changes in prepaid insurance premiums financed with notes payable and lessor capital expenditure reimbursements under operating leases. 3Q 2022 ($ in 000s) Total Senior Housing Owned Portfolio Senior Housing Leased Portfolio Corporate All Other (2) Resident fee revenue (1) $ 650,248 $ 379,913 $ 270,335 $ — $ — Management fee revenue 2,967 — — — 2,967 Other operating income 66,759 38,372 28,387 — — Facility operating expense (525,510) (314,480) (211,030) — — Combined Segment Operating Income 194,464 103,805 87,692 — 2,967 General and administrative expense (excluding non-cash stock-based compensation expense and transaction costs) (see page 12) (37,582) (20,311) (14,453) — (2,818) Cash facility operating lease payments (50,031) — (48,726) (1,305) — Adjusted EBITDA (3) 106,851 83,494 24,513 (1,305) 149 Transaction and Organizational Restructuring Costs (346) — — (346) — Interest expense, net (51,054) (41,330) (11,577) 1,853 — Payment of financing lease obligations (5,506) — (5,329) (177) — Changes in working capital (4) (2,581) — — (2,581) — Non-Development Capital Expenditures, net (43,819) (24,568) (13,128) (6,123) — Other 584 (148) — 732 — Adjusted Free Cash Flow $ 4,129 $ 17,448 $ (5,521) $ (7,947) $ 149 Adjusted EBITDA and Adjusted Free Cash Flow Distribution

 
6 2021 2022 3Q22 vs 3Q21 YTD 3Q22 vs YTD 3Q21 ($ in 000s, except RevPAR and RevPOR) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Total Senior Housing, Health Care Services, and All Other Revenue (1) $ 672,916 $ 678,976 $ 603,716 $ 608,838 $ 2,564,446 $ 640,303 $ 643,717 $ 653,215 8.2 % (0.9) % Other operating income $ 10,735 $ 1,308 $ 89 $ 236 $ 12,368 $ 376 $ 8,411 $ 66,759 NM NM Combined Segment Operating Income $ 127,339 $ 129,438 $ 123,382 $ 120,792 $ 500,951 $ 127,915 $ 138,464 $ 194,464 57.6 % 21.2 % Combined segment operating margin 18.6 % 19.0 % 20.4 % 19.8 % 19.4 % 20.0 % 21.2 % 27.0 % 660 bps 360 bps Combined segment adjusted operating margin (2) 17.3 % 18.9 % 20.4 % 19.8 % 19.1 % 19.9 % 20.2 % 19.6 % (80) bps 110 bps Senior Housing Segments (see page 7) Revenue $ 577,499 $ 586,665 $ 600,095 $ 605,425 $ 2,369,684 $ 636,974 $ 640,388 $ 650,248 8.4 % 9.3 % Other operating income $ 8,152 $ 786 $ 89 $ 236 $ 9,263 $ 376 $ 8,411 $ 66,759 NM NM Senior Housing Operating Income $ 116,370 $ 121,027 $ 119,761 $ 117,379 $ 474,537 $ 124,586 $ 135,135 $ 191,497 59.9 % 26.3 % Senior Housing operating margin 19.9 % 20.6 % 20.0 % 19.4 % 19.9 % 19.5 % 20.8 % 26.7 % 670 bps 240 bps Senior Housing adjusted operating margin (2) 18.7 % 20.5 % 19.9 % 19.3 % 19.6 % 19.5 % 19.8 % 19.2 % (70) bps (20) bps Number of communities (period end) 650 648 648 646 646 645 641 641 (1.1) % (1.1) % Total Average Units 52,971 52,911 52,811 52,665 52,840 52,586 52,368 52,158 (1.2) % (1.0) % RevPAR $ 3,631 $ 3,692 $ 3,784 $ 3,828 $ 3,734 $ 4,032 $ 4,071 $ 4,150 9.7 % 10.3 % Weighted average occupancy 69.6 % 70.5 % 72.5 % 73.5 % 71.5 % 73.4 % 74.6 % 76.4 % 390 bps 390 bps RevPOR $ 5,219 $ 5,237 $ 5,219 $ 5,210 $ 5,221 $ 5,493 $ 5,459 $ 5,432 4.1 % 4.5 % Health Care Services Segment (3) Revenue $ 86,851 $ 87,313 $ — $ — $ 174,164 $ — $ — $ — N/A N/A Other operating income $ 2,583 $ 522 $ — $ — $ 3,105 $ — $ — $ — N/A N/A Segment Operating Income $ 2,403 $ 3,413 $ — $ — $ 5,816 $ — $ — $ — N/A N/A All Other All Other Segment Operating Income (comprised solely of management fees) $ 8,566 $ 4,998 $ 3,621 $ 3,413 $ 20,598 $ 3,329 $ 3,329 $ 2,967 (18.1) % (44.0) % Resident fee revenue under management (4) $ 82,468 $ 64,410 $ 55,156 $ 51,409 $ 253,443 $ 52,898 $ 54,284 $ 52,712 (4.4) % (20.9) % Segment Overview (1) Excludes reimbursed costs on behalf of managed communities. (2) Excludes other operating income. (3) 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 and its 20% equity interest in the HCS Venture is accounted for under the equity method of accounting. (4) Not included in consolidated reported amounts.

 
7 2021 2022 3Q22 vs 3Q21 YTD 3Q22 vs YTD 3Q21 ($ in 000s, except RevPAR and RevPOR) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Independent Living Revenue $ 118,782 $ 118,005 $ 119,584 $ 119,167 $ 475,538 $ 124,404 $ 125,578 $ 128,106 7.1 % 6.1 % Other operating income $ 1,364 $ 111 $ 9 $ 28 $ 1,512 $ 2 $ 1,159 $ 9,520 NM NM Segment Operating Income $ 37,329 $ 35,292 $ 36,733 $ 36,754 $ 146,108 $ 37,684 $ 38,709 $ 46,395 26.3 % 12.3 % Segment operating margin 31.1 % 29.9 % 30.7 % 30.8 % 30.6 % 30.3 % 30.5 % 33.7 % 300 bps 100 bps Segment adjusted operating margin (1) 30.3 % 29.8 % 30.7 % 30.8 % 30.4 % 30.3 % 29.9 % 28.8 % (190) bps (60) bps Number of communities (period end) 68 68 68 68 68 68 68 68 — % — % Total Average Units 12,539 12,552 12,567 12,567 12,556 12,568 12,569 12,569 — % 0.1 % RevPAR $ 3,158 $ 3,134 $ 3,172 $ 3,161 $ 3,156 $ 3,299 $ 3,330 $ 3,397 7.1 % 6.0 % Weighted average occupancy 73.6 % 73.5 % 74.7 % 75.1 % 74.2 % 74.6 % 76.0 % 78.3 % 360 bps 240 bps RevPOR $ 4,290 $ 4,266 $ 4,244 $ 4,208 $ 4,252 $ 4,423 $ 4,380 $ 4,337 2.2 % 2.6 % Assisted Living and Memory Care Revenue $ 386,938 $ 391,718 $ 402,621 $ 408,444 $ 1,589,721 $ 432,132 $ 434,454 $ 442,097 9.8 % 10.8 % Other operating income $ 5,104 $ 629 $ 75 $ 155 $ 5,963 $ 356 $ 6,412 $ 49,721 NM NM Segment Operating Income $ 71,433 $ 77,062 $ 75,324 $ 70,501 $ 294,320 $ 76,863 $ 87,588 $ 130,039 72.6 % 31.6 % Segment operating margin 18.2 % 19.6 % 18.7 % 17.3 % 18.4 % 17.8 % 19.9 % 26.4 % 770 bps 270 bps Segment adjusted operating margin (1) 17.1 % 19.5 % 18.7 % 17.2 % 18.1 % 17.7 % 18.7 % 18.2 % (50) bps (30) bps Number of communities (period end) 562 560 560 559 559 558 554 554 (1.1) % (1.1) % Total Average Units 35,110 35,018 34,893 34,883 34,977 34,817 34,598 34,398 (1.4) % (1.2) % RevPAR $ 3,673 $ 3,728 $ 3,845 $ 3,902 $ 3,787 $ 4,136 $ 4,183 $ 4,281 11.3 % 12.1 % Weighted average occupancy 68.3 % 69.5 % 71.9 % 73.1 % 70.7 % 73.0 % 74.2 % 76.2 % 430 bps 460 bps RevPOR $ 5,376 $ 5,365 $ 5,347 $ 5,341 $ 5,357 $ 5,665 $ 5,636 $ 5,621 5.1 % 5.2 % CCRCs Revenue $ 71,779 $ 76,942 $ 77,890 $ 77,814 $ 304,425 $ 80,438 $ 80,356 $ 80,045 2.8 % 6.3 % Other operating income $ 1,684 $ 46 $ 5 $ 53 $ 1,788 $ 18 $ 840 $ 7,518 NM NM Segment Operating Income $ 7,608 $ 8,673 $ 7,704 $ 10,124 $ 34,109 $ 10,039 $ 8,838 $ 15,063 95.5 % 41.5 % Segment operating margin 10.4 % 11.3 % 9.9 % 13.0 % 11.1 % 12.5 % 10.9 % 17.2 % 730 bps 310 bps Segment adjusted operating margin (1) 8.3 % 11.2 % 9.9 % 12.9 % 10.6 % 12.5 % 10.0 % 9.4 % (50) bps 80 bps Number of communities (period end) 20 20 20 19 19 19 19 19 (5.0) % (5.0) % Total Average Units 5,322 5,341 5,351 5,215 5,307 5,201 5,201 5,191 (3.0) % (2.6) % RevPAR $ 4,473 $ 4,770 $ 4,824 $ 4,946 $ 4,753 $ 5,109 $ 5,115 $ 5,105 5.8 % 9.0 % Weighted average occupancy 68.5 % 70.2 % 71.2 % 72.5 % 70.6 % 73.2 % 73.4 % 73.3 % 210 bps 330 bps RevPOR $ 6,534 $ 6,790 $ 6,777 $ 6,825 $ 6,733 $ 6,976 $ 6,970 $ 6,966 2.8 % 4.0 % Senior Housing Segments (1) Excludes other operating income.

 
8 2021 2022 3Q22 vs 3Q21 YTD 3Q22 vs YTD 3Q21 ($ in 000s, except RevPAR and RevPOR) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Revenue $ 551,591 $ 559,084 $ 573,015 $ 580,306 $ 2,263,996 $ 611,894 $ 617,055 $ 629,491 9.9 % 10.4 % Other operating income 7,336 763 88 236 8,423 359 8,011 64,522 NM NM Revenue and other operating income 558,927 559,847 573,103 580,542 2,272,419 612,253 625,066 694,013 21.1 % 14.2 % Community Labor Expenses (291,980) (290,753) (301,690) (316,863) (1,201,286) (330,632) (331,295) (334,873) (11.0) % (12.7) % Other facility operating expenses (151,227) (149,675) (153,123) (148,580) (602,605) (160,169) (161,120) (170,270) (11.2) % (8.3) % Facility operating expenses(2) (443,207) (440,428) (454,813) (465,443) (1,803,891) (490,801) (492,415) (505,143) (11.1) % (11.2) % Same Community Operating Income $ 115,720 $ 119,419 $ 118,290 $ 115,099 $ 468,528 $ 121,452 $ 132,651 $ 188,870 59.7 % 25.3 % Same Community adjusted operating income(3) $ 108,384 $ 118,656 $ 118,202 $ 114,863 $ 460,105 $ 121,093 $ 124,640 $ 124,348 5.2 % 7.2 % Same Community operating margin 20.7 % 21.3 % 20.6 % 19.8 % 20.6 % 19.8 % 21.2 % 27.2 % 660 bps 200 bps Same Community adjusted operating margin(3) 19.6 % 21.2 % 20.6 % 19.8 % 20.3 % 19.8 % 20.2 % 19.8 % (80) bps (60) bps Total Average Units 50,554 50,554 50,554 50,556 50,555 50,557 50,559 50,547 — % — % RevPAR $ 3,637 $ 3,686 $ 3,778 $ 3,826 $ 3,732 $ 4,034 $ 4,068 $ 4,151 9.9 % 10.4 % Weighted average occupancy 69.5 % 70.4 % 72.5 % 73.5 % 71.5 % 73.4 % 74.6 % 76.5 % 400 bps 400 bps RevPOR $ 5,230 $ 5,234 $ 5,211 $ 5,205 $ 5,220 $ 5,496 $ 5,453 $ 5,429 4.2 % 4.5 % Same Community Operating Income / Adjusted Operating Income ($ in millions) $115.7 $119.4 $118.3 $115.1 $121.5 $132.7 $188.9 Same Community Other Operating Income Same Community Adjusted Operating Income 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 3Q 2022 Same Community RevPAR / Weighted Average Occupancy $3,637 $3,686 $3,778 $3,826 $4,034 $4,068 $4,151 69.5% 70.4% 72.5% 73.5% 73.4% 74.6% 76.5% RevPAR Weighted Average Occupancy 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 3Q 2022 Senior Housing: Same Community (1) (1) Same Community portfolio reflects 632 communities. (2) Excludes natural disaster expense of $1.6 million for the full year 2021. (3) Excludes other operating income. (2) (3)

 
9 2021 2022 3Q22 vs 3Q21 YTD 3Q22 vs YTD 3Q21 ($ in 000s, except RevPAR and RevPOR) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Independent Living Revenue $ 117,572 $ 116,715 $ 118,100 $ 117,685 $ 470,072 $ 122,846 $ 123,890 $ 126,389 7.0 % 5.9 % Other operating income 1,345 111 8 28 1,492 2 1,146 9,276 NM NM Community Labor Expense (49,028) (49,617) (48,360) (48,848) (195,853) (51,053) (52,449) (53,077) (9.8) % (6.5) % Other facility operating expense (32,839) (32,156) (33,316) (32,531) (130,842) (34,632) (34,430) (36,871) (10.7) % (7.8) % Facility operating expense (81,867) (81,773) (81,676) (81,379) (326,695) (85,685) (86,879) (89,948) (10.1) % (7.0) % Same Community Operating Income $ 37,050 $ 35,053 $ 36,432 $ 36,334 $ 144,869 $ 37,163 $ 38,157 $ 45,717 25.5 % 11.5 % Same Community operating margin 31.2 % 30.0 % 30.8 % 30.9 % 30.7 % 30.3 % 30.5 % 33.7 % 290 bps 90 bps Same Community adjusted operating margin (2) 30.4 % 29.9 % 30.8 % 30.9 % 30.5 % 30.3 % 29.9 % 28.8 % (200) bps (80) bps Total Average Units 12,373 12,376 12,377 12,377 12,376 12,378 12,379 12,379 — % — % RevPAR $ 3,167 $ 3,144 $ 3,181 $ 3,169 $ 3,165 $ 3,308 $ 3,336 $ 3,403 7.0 % 5.8 % Weighted average occupancy 73.5 % 73.4 % 74.7 % 75.1 % 74.2 % 74.6 % 75.9 % 78.2 % 350 bps 250 bps RevPOR $ 4,310 $ 4,285 $ 4,259 $ 4,221 $ 4,269 $ 4,435 $ 4,393 $ 4,352 2.2 % 2.5 % Assisted Living and Memory Care Revenue $ 378,446 $ 383,821 $ 395,339 $ 401,113 $ 1,558,719 $ 425,186 $ 429,295 $ 439,395 11.1 % 11.8 % Other operating income 4,911 609 76 155 5,751 357 6,287 49,465 NM NM Community Labor Expense (209,079) (206,265) (217,667) (231,130) (864,141) (241,048) (239,688) (242,683) (11.5) % (14.3) % Other facility operating expense (102,189) (101,390) (103,321) (100,331) (407,231) (108,807) (109,211) (115,893) (12.2) % (8.8) % Facility operating expense (311,268) (307,655) (320,988) (331,461) (1,271,372) (349,855) (348,899) (358,576) (11.7) % (12.5) % Same Community Operating Income $ 72,089 $ 76,775 $ 74,427 $ 69,807 $ 293,098 $ 75,688 $ 86,683 $ 130,284 75.0 % 31.1 % Same Community operating margin 18.8 % 20.0 % 18.8 % 17.4 % 18.7 % 17.8 % 19.9 % 26.7 % 790 bps 250 bps Same Community adjusted operating margin (2) 17.8 % 19.8 % 18.8 % 17.4 % 18.4 % 17.7 % 18.7 % 18.4 % (40) bps (50) bps Total Average Units 34,206 34,203 34,202 34,203 34,204 34,204 34,205 34,203 — % — % RevPAR $ 3,688 $ 3,741 $ 3,853 $ 3,909 $ 3,798 $ 4,144 $ 4,184 $ 4,282 11.1 % 11.8 % Weighted average occupancy 68.3 % 69.4 % 71.9 % 73.0 % 70.7 % 72.9 % 74.2 % 76.1 % 420 bps 450 bps RevPOR $ 5,402 $ 5,387 $ 5,362 $ 5,354 $ 5,376 $ 5,681 $ 5,639 $ 5,624 4.9 % 4.9 % CCRCs Revenue $ 55,573 $ 58,548 $ 59,576 $ 61,508 $ 235,205 $ 63,862 $ 63,870 $ 63,707 6.9 % 10.2 % Other operating income 1,080 43 4 53 1,180 — 578 5,781 NM NM Community Labor Expense (33,873) (34,871) (35,663) (36,885) (141,292) (38,531) (39,158) (39,113) (9.7) % (11.9) % Other facility operating expense (16,199) (16,129) (16,486) (15,718) (64,532) (16,730) (17,479) (17,506) (6.2) % (5.9) % Facility operating expense (50,072) (51,000) (52,149) (52,603) (205,824) (55,261) (56,637) (56,619) (8.6) % (10.0) % Same Community Operating Income $ 6,581 $ 7,591 $ 7,431 $ 8,958 $ 30,561 $ 8,601 $ 7,811 $ 12,869 73.2 % 35.5 % Same Community operating margin 11.6 % 13.0 % 12.5 % 14.6 % 12.9 % 13.5 % 12.1 % 18.5 % 600 bps 240 bps Same Community adjusted operating margin (2) 9.9 % 12.9 % 12.5 % 14.5 % 12.5 % 13.5 % 11.3 % 11.1 % (140) bps 20 bps Total Average Units 3,975 3,975 3,975 3,976 3,975 3,975 3,975 3,965 (0.3) % (0.1) % RevPAR $ 4,660 $ 4,910 $ 4,996 $ 5,157 $ 4,931 $ 5,355 $ 5,356 $ 5,356 7.2 % 10.3 % Weighted average occupancy 68.2 % 69.9 % 71.3 % 72.8 % 70.6 % 73.7 % 73.9 % 73.9 % 260 bps 400 bps RevPOR $ 6,833 $ 7,028 $ 7,005 $ 7,083 $ 6,987 $ 7,267 $ 7,246 $ 7,252 3.5 % 4.3 % Senior Housing Segments: Same Community (1) (1) Same Community portfolio reflects 67 Independent Living communities, 550 Assisted Living and Memory Care communities, and 15 CCRC communities. (2) Excludes other operating income.

 
10 2021 2022 3Q22 vs 3Q21 YTD 3Q22 vs YTD 3Q21 ($ in 000s, except RevPAR and RevPOR) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Revenue $ 336,160 $ 342,355 $ 350,664 $ 352,894 $ 1,382,073 $ 370,337 $ 374,231 $ 379,913 8.3 % 9.3 % Other operating income 5,098 552 77 196 5,923 300 5,240 38,372 NM NM Facility operating expense (280,235) (280,169) (287,180) (290,347) (1,137,931) (304,715) (307,694) (314,480) (9.5) % (9.4) % Owned Portfolio Operating Income $ 61,023 $ 62,738 $ 63,561 $ 62,743 $ 250,065 $ 65,922 $ 71,777 $ 103,805 63.3 % 28.9 % Owned Portfolio operating margin 17.9 % 18.3 % 18.1 % 17.8 % 18.0 % 17.8 % 18.9 % 24.8 % 670 bps 260 bps Owned Portfolio adjusted operating margin (1) 16.6 % 18.2 % 18.1 % 17.7 % 17.7 % 17.7 % 17.8 % 17.2 % (90) bps 0 bps Additional Information Interest expense: property level and corporate debt $ (35,351) $ (35,425) $ (35,708) $ (34,925) $ (141,409) $ (33,157) $ (35,693) $ (41,330) (15.7) % (3.5) % Community level capital expenditures, net (see page 13) $ (14,286) $ (16,973) $ (17,237) $ (25,203) $ (73,699) $ (20,907) $ (25,934) $ (24,568) (42.5) % (47.2) % Number of communities (period end) 349 348 348 347 347 347 346 346 (0.6) % (0.6) % Total Average Units 31,844 31,785 31,783 31,648 31,766 31,635 31,694 31,588 (0.6) % (0.5) % RevPAR $ 3,514 $ 3,584 $ 3,672 $ 3,711 $ 3,620 $ 3,893 $ 3,928 $ 3,999 8.9 % 9.7 % Weighted average occupancy 68.4 % 69.6 % 71.7 % 72.7 % 70.6 % 72.5 % 73.6 % 75.4 % 370 bps 400 bps RevPOR $ 5,135 $ 5,151 $ 5,121 $ 5,108 $ 5,128 $ 5,370 $ 5,333 $ 5,301 3.5 % 3.9 % Senior Housing Owned Portfolio Interest Coverage as of September 30, 2022 1.5x Interest Coverage as of September 30, 2022 (excluding other operating income) 1.2x Net Debt as of September 30, 2022 (see page 15) $3,417,092 (1) Excludes other operating income.

 
11 2021 2022 3Q22 vs 3Q21 YTD 3Q22 vs YTD 3Q21 ($ in 000s, except RevPAR and RevPOR) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Revenue $ 241,339 $ 244,310 $ 249,431 $ 252,531 $ 987,611 $ 266,637 $ 266,157 $ 270,335 8.4 % 9.3 % Other operating income 3,054 234 12 40 3,340 76 3,171 28,387 NM NM Facility operating expense (189,046) (186,255) (193,243) (197,935) (766,479) (208,049) (205,970) (211,030) (9.2) % (9.9) % Leased Portfolio Operating Income $ 55,347 $ 58,289 $ 56,200 $ 54,636 $ 224,472 $ 58,664 $ 63,358 $ 87,692 56.0 % 23.5 % Leased Portfolio operating margin 22.6 % 23.8 % 22.5 % 21.6 % 22.7 % 22.0 % 23.5 % 29.4 % 690 bps 210 bps Leased Portfolio adjusted operating margin (1) 21.7 % 23.8 % 22.5 % 21.6 % 22.4 % 22.0 % 22.6 % 21.9 % (60) bps (50) bps Additional Information Cash facility lease payments on leased portfolio (see page 14) $ (63,762) $ (64,008) $ (64,423) $ (64,979) $ (257,172) $ (65,509) $ (65,582) $ (65,632) (1.9) % (2.4) % Community level capital expenditures, net (see page 13) $ (7,550) $ (14,444) $ (3,340) $ (10,713) $ (36,047) $ (12,572) $ (12,503) $ (13,128) NM (50.8) % Number of communities (period end) 301 300 300 299 299 298 295 295 (1.7) % (1.7) % Total Average Units 21,127 21,126 21,028 21,017 21,074 20,951 20,674 20,570 (2.2) % (1.7) % RevPAR $ 3,808 $ 3,855 $ 3,954 $ 4,005 $ 3,905 $ 4,242 $ 4,291 $ 4,381 10.8 % 11.2 % Weighted average occupancy 71.3 % 71.9 % 73.7 % 74.7 % 72.9 % 74.8 % 76.0 % 77.9 % 420 bps 390 bps RevPOR $ 5,340 $ 5,361 $ 5,362 $ 5,359 $ 5,356 $ 5,672 $ 5,646 $ 5,626 4.9 % 5.5 % Lease Coverage as of September 30, 2022 0.79x Lease Coverage as of September 30, 2022 (excluding other operating income) 0.66x Operating and financing lease obligations as of September 30, 2022 (see page 24)(2) $ 1,244,257 Facility Lease Maturity Information (Leased Portfolio as of September 30, 2022) Initial Lease Maturities Community Count Total Units Cash Facility Lease Payments (3) 2023 35 1,468 $ 14,719 2024 7 904 14,817 2025 121 10,289 104,704 2026 41 1,994 33,261 Thereafter 91 5,915 91,619 Total 295 20,570 $ 259,120 Senior Housing Leased Portfolio (1) Excludes other operating income. (2) Amount recognized on consolidated balance sheet reflects the discounted future minimum lease payments and the residual value for financing lease obligations. (3) Cash facility lease payments for the twelve months ended September 30, 2022.

 
12 (1) For 2022 periods, G&A allocations are calculated based on the proportional amount of resident fee revenue (consolidated and under management) attributable to the segment or portfolio. For 2021 periods, G&A allocations are calculated using a methodology which the Company believed matched the type of general and administrative cost with the community, segment, or portfolio. Some of the allocations are based on direct utilization and some are based on formulas such as unit proportion. G&A allocations presented herein exclude non-cash stock-based compensation expense and Transaction and Organizational Restructuring Costs. (2) Not included in consolidated reported amounts. Consolidated, unless otherwise noted 2021 2022 3Q22 vs 3Q21 YTD 3Q22 vs YTD 3Q21 ($ in 000s) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) G&A expense allocations (1) Senior Housing Owned Portfolio allocation $ 19,358 $ 22,010 $ 21,004 $ 18,871 $ 81,243 $ 21,938 $ 20,419 $ 20,311 3.3 % (0.5) % Senior Housing Leased Portfolio allocation 13,898 15,706 14,941 13,504 58,049 15,795 14,523 14,453 3.3 % (0.5) % All Other allocation 4,994 4,257 3,356 2,701 15,308 3,135 2,962 2,818 16.0 % 29.3 % Health Care Services allocation 5,026 5,211 — — 10,237 — — — N/A N/A Subtotal G&A expense allocations 43,276 47,184 39,301 35,076 164,837 40,868 37,904 37,582 4.4 % 10.3 % Non-cash stock-based compensation expense 4,783 4,527 3,568 3,392 16,270 3,885 3,619 3,403 4.6% 15.3% Transaction and Organizational Restructuring Costs 1,884 689 943 293 3,809 373 229 346 63.3% 73.0% General and administrative expense $ 49,943 $ 52,400 $ 43,812 $ 38,761 $ 184,916 $ 45,126 $ 41,752 $ 41,331 5.7 % 12.3 % 2021 2022 3Q22 vs 3Q21 YTD 3Q22 vs YTD 3Q21 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Resident fee revenue $ 664,350 $ 673,978 $ 600,095 $ 605,425 $ 2,543,848 $ 636,974 $ 640,388 $ 650,248 8.4 % (0.6) % Resident fee revenue under management (2) 82,468 64,410 55,156 51,409 253,443 52,898 54,284 52,712 (4.4) % (20.9) % Total (consolidated and under management(2)) $ 746,818 $ 738,388 $ 655,251 $ 656,834 $ 2,797,291 $ 689,872 $ 694,672 $ 702,960 7.3 % (2.5) % G&A Expense as a Percentage of Resident Fee Revenue (Consolidated and Under Management) G&A expense (excluding non-cash stock-based compensation expense and Transaction and Organizational Restructuring Costs) 5.8% 6.4% 6.0% 5.3% 5.9% 5.9% 5.5% 5.3% 70 bps 50 bps G&A expense (including non-cash stock-based compensation expense and Transaction and Organizational Restructuring Costs) 6.7% 7.1% 6.7% 5.9% 6.6% 6.5% 6.0% 5.9% 80 bps 70 bps G&A Expense

 
13 ($ in 000s, except for community level capital expenditures, net, per average unit) 2021 2022 3Q22 vs 3Q21 YTD 3Q22 vs YTD 3Q21 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Community level capital expenditures, including allocations Senior Housing Owned Portfolio $ 14,286 $ 16,973 $ 17,237 $ 25,203 $ 73,699 $ 20,907 $ 25,934 $ 24,568 (42.5) % (47.2) % Senior Housing Leased Portfolio 7,550 14,444 3,340 10,713 36,047 12,572 12,503 13,128 NM (50.8) % Community level capital expenditures, net (A) 21,836 31,417 20,577 35,916 109,746 33,479 38,437 37,696 (83.2) % (48.5) % Corporate capital expenditures 5,614 4,378 7,616 10,056 27,664 5,847 7,249 6,123 19.6 % (9.1) % Non-Development Capital Expenditures, net 27,450 35,795 28,193 45,972 137,410 39,326 45,686 43,819 (55.4) % (40.9) % Development Capital Expenditures, net 1,521 597 608 482 3,208 861 1,829 1,667 (174.2) % (59.8) % Total capital expenditures, net $ 28,971 $ 36,392 $ 28,801 $ 46,454 $ 140,618 $ 40,187 $ 47,515 $ 45,486 (57.9) % (41.4) % Lessor reimbursements: non-development capital expenditures 8,951 10,001 15,688 7,460 42,100 4,697 7,136 7,094 Change in related payables 2,439 (7,216) 1,790 (3,074) (6,061) (4,928) 2,244 1,141 Total cash paid for capital expenditures $ 40,361 $ 39,177 $ 46,279 $ 50,840 $ 176,657 $ 39,956 $ 56,895 $ 53,721 (16.1) % (19.7) % Senior Housing Total Average Units (B) 52,971 52,911 52,811 52,665 52,840 52,586 52,368 52,158 (1.2) % (1.0) % Community level capital expenditures, net, per average unit (A/B) $ 412 $ 594 $ 390 $ 682 $ 2,077 $ 637 $ 734 $ 723 (85.4) % (49.9%) Capital Expenditures

 
14 (1) Includes cash lease payments for leases of corporate offices and information technology systems and equipment. 2021 2022 3Q22 vs 3Q21 YTD 3Q22 vs YTD 3Q21 ($ in 000s) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q B(W) B(W) Operating Lease Obligations Facility operating lease expense $ 44,418 $ 43,864 $ 43,226 $ 42,850 $ 174,358 $ 41,564 $ 41,538 $ 41,317 Operating lease expense adjustment 4,664 5,326 6,273 7,017 23,280 8,307 8,308 8,714 Cash facility operating lease payments 49,082 49,190 49,499 49,867 197,638 49,871 49,846 50,031 (1.1) % (1.3) % Financing Lease Obligations Interest expense: financing lease obligations 11,383 11,492 11,674 11,733 46,282 12,058 11,994 11,916 Payment of financing lease obligations 4,789 4,864 5,039 5,182 19,874 5,490 5,610 5,506 Cash financing lease payments 16,172 16,356 16,713 16,915 66,156 17,548 17,604 17,422 (4.2) % (6.8) % Total cash facility lease payments (1) $ 65,254 $ 65,546 $ 66,212 $ 66,782 $ 263,794 $ 67,419 $ 67,450 $ 67,453 (1.9) % (2.7) % Interest Expense Reconciliation to Income Statement Interest expense: financing lease obligations $ 11,383 $ 11,492 $ 11,674 $ 11,733 $ 46,282 $ 12,058 $ 11,994 $ 11,916 (2.1) % (4.1) % Interest income (421) (341) (286) (301) (1,349) (95) (778) (2,192) NM 192.5 % Interest expense: debt 35,351 35,425 35,708 34,925 141,409 33,157 35,693 41,330 (15.7) % (3.5) % Interest expense, net 46,313 46,576 47,096 46,357 186,342 45,120 46,909 51,054 (8.4) % (2.2) % Amortization of deferred financing costs 1,915 1,907 1,884 1,591 7,297 1,542 1,520 1,528 Change in fair value of derivatives (42) 233 95 (134) 152 (3,403) (973) (4,901) Interest income 421 341 286 301 1,349 95 778 2,192 Interest expense per income statement $ 48,607 $ 49,057 $ 49,361 $ 48,115 $ 195,140 $ 43,354 $ 48,234 $ 49,873 (1.0) % 3.8 % Cash Facility Lease Payments

 
15 $646 $537 $476 $412 $396 $636 $529 $469 $405 $389 $9 $8 $7 $7 $7 09/30/2021 12/31/2021 03/31/2022 06/30/2022 09/30/2022 Total Liquidity ($ in millions) (1) Includes the carrying amount of debt of which 93.9%, or $3.6 billion, represented non-recourse property-level mortgage financings. (2) The weighted average fixed cap rate is 4.39%. (3) Amount includes maturities and recurring principal payments and excludes $26 million in deferred financing costs, net. (4) Reflects rates as of September 30, 2022. (5) Excludes convertible senior notes. (6) Amounts presented are as of September 30, 2022. In October 2022, the Company obtained $220.0 million of mortgage debt due in 2025. The proceeds from the financing were primarily utilized to repay $199.6 million of outstanding mortgage debt maturing in 2023. (7) Excludes operating lease obligations related to certain non-facility leases for which the related lease expense is included in Adjusted EBITDAR. Important Note Regarding Non-GAAP Financial Measures. Adjusted EBITDAR, Adjusted EBITDA, Adjusted EBITDA after cash financing lease payments, Net Debt, and Adjusted Net Debt are financial measures that are not calculated in accordance with GAAP. See "Definitions" and "Non-GAAP Financial Measures" for the definitions of such measures and other important information regarding such measures, including reconciliations to the most comparable GAAP measures. Leverage Ratios ($ in 000s) Twelve Months Ended September 30, 2022 Annualized Leverage Adjusted EBITDAR (A) $ 430,205 Cash facility operating lease payments (see page 14) (199,615) Adjusted EBITDA 230,590 Cash financing lease payments (see page 14) (69,489) Adjusted EBITDA after cash financing lease payments (B) $ 161,101 As of September 30, 2022 Debt $ 3,819,929 Cash and cash equivalents (299,201) Marketable securities (89,504) Restricted cash held as collateral against existing debt (14,132) Net Debt (C) 3,417,092 21.2 x (C/B) Operating and financing lease obligations (see page 24) (7) 1,256,669 Adjusted Net Debt (D) $ 4,673,761 10.9 x (D/A) Debt ($ in millions) Principal Payments (3) Weighted Rate (4) 2022 $ 13 4.30 % 2023 (6) 264 5.17 % 2024 303 4.48 % 2025 (6) 346 4.95 % 2026 306 2.58 % Thereafter 2,614 4.59 % Total $ 3,846 4.49 % Capital Structure $225 $2,140 $1,326 $129 Debt Structure (1) ($ in millions) As of September 30, 2022 Weighted Rate Fixed rate debt (5) 4.14 % Variable rate debt 5.40 % Fixed rate convertible senior notes 2.00 % Total debt 4.49 % 56% 35% Fixed rate debt (5) Variable rate debt with interest rate caps (2) Variable rate debt - unhedged 3% Line of credit available to draw Cash and cash equivalents and marketable securities 6% Fixed rate convertible senior notes

 
16 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. Adjusted EBITDAR is a non-GAAP financial measure that the Company defines as Adjusted EBITDA before cash facility operating lease payments. Adjusted Free Cash Flow is a non-GAAP liquidity measure that the Company defines as net cash provided by (used in) operating activities before: distributions from unconsolidated ventures from cumulative share of net earnings, changes in prepaid insurance premiums financed with notes payable, changes in operating lease 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. Adjusted Net Debt is a non-GAAP financial measure that the Company defines as Net Debt, plus operating and financing lease obligations. Operating and financing lease obligations exclude operating lease obligations related to certain non-facility leases for which the related lease expense is included in Adjusted EBITDAR. Combined Segment Operating Income is defined by the Company as resident fee and management fee revenue and other operating income of the Company, less facility operating expense. Combined Segment Operating Income does not include general and administrative expense or depreciation and amortization. Community Labor Expense is a component of facility operating expense that includes regular and overtime salaries and wages, bonuses, paid-time-off and holiday wages, payroll taxes, contract labor, employee benefits, and workers' compensation. Development Capital Expenditures means capital expenditures for community expansions, major community redevelopment and repositioning projects, and the development of new communities. Amounts of Development Capital Expenditures are presented net of lessor reimbursements. Interest Coverage is calculated based on the trailing-twelve months Owned Portfolio Operating Income adjusted for an implied 5% management fee and capital expenditures at $350/unit, divided by the trailing-twelve months property level and corporate debt interest expense. Lease Coverage is calculated based on the trailing-twelve months Leased Portfolio Operating Income, excluding resident fee revenue, other operating income, and facility operating expense of communities disposed during such period adjusted for an implied 5% management fee and capital expenditures at $350/unit, divided by the trailing-twelve months cash facility lease payments for both operating leases and financing leases, excluding cash lease payments for leases of communities disposed during such period, corporate offices, information technology systems and equipment, vehicles, and other equipment. Leased Portfolio Operating Income is defined by the Company as resident fee revenue and other operating income (excluding amounts from the former Health Care Services segment), less facility operating expense for the Company’s Senior Housing Leased Portfolio. Leased Portfolio Operating Income does not include general and administrative expense or depreciation and amortization. Net Debt is a non-GAAP financial measure that the Company defines as the total of its debt (mortgage debt and other notes payable) and the outstanding balance on the line of credit, less unrestricted cash, marketable securities, and cash held as collateral against existing debt. NM means not meaningful. Non-Development Capital Expenditures is comprised of corporate and community- level capital expenditures, including those related to maintenance, renovations, upgrades, and other major building infrastructure projects for the Company’s communities. Non-Development Capital Expenditures does not include capital expenditures for community expansions, major community redevelopment and repositioning projects, and the development of new communities (i.e. Development Capital Expenditures). Amounts of Non-Development Capital Expenditures are presented net of lessor reimbursements. Owned Portfolio Operating Income is defined by the Company as resident fee revenue and other operating income (excluding amounts from the former Health Care Services segment), less facility operating expense for the Company’s Senior Housing Owned Portfolio. Owned Portfolio Operating Income does not include general and administrative expense or depreciation and amortization. RevPAR, or average monthly senior housing resident fee revenue per available unit, is defined by the Company as resident fee revenue for the corresponding portfolio for the period (excluding 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. Definitions

 
17 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. Same Community information reflects operating results and data  of a consistent population of communities by excluding the impact of changes in the composition of the Company's portfolio of communities. The operating results exclude natural disaster expense and related insurance recoveries. The Company defines its same community portfolio as communities consolidated and operational for the full period in both comparison years. Consolidated communities excluded from the same community portfolio include communities acquired or disposed of since the beginning of the prior year, communities classified as assets held for sale, certain communities planned for disposition, certain communities that have undergone or are undergoing expansion, redevelopment, and repositioning projects, and certain communities that have experienced a casualty event that significantly impacts their operations. Same Community Operating Income is defined by the Company as resident fee revenue and other operating income (excluding amounts from the former Health Care Services segment), less facility operating expense (excluding natural disaster expense and related insurance recoveries) for the Company's Same Community portfolio. Same Community Operating Income does not include general and administrative expense or depreciation and amortization. Segment Operating Income (Loss) is defined by the Company as segment revenue and other operating income less segment facility operating expense. Segment Operating Income (Loss) does not include general and administrative expense or depreciation and amortization. All Other Segment Operating Income consists primarily of the previously reported Management Services segment and excludes revenue for reimbursements for which the Company is the primary obligor of costs incurred on behalf of managed communities, and there is no facility operating expense associated with the All Other category. See the Segment Information note to the Company’s consolidated financial statements for more information regarding the Company’s segments. Senior Housing Leased Portfolio represents Brookdale leased communities and does not include owned or managed communities. Senior Housing Operating Income is defined by the Company as segment revenue and other operating income less segment facility operating expense for the Company’s Independent Living, Assisted Living and Memory Care, and CCRCs segments on an aggregate basis. Senior Housing Operating Income does not include general and administrative expense or depreciation and amortization. Senior Housing Owned Portfolio represents Brookdale owned communities and does not include leased or managed communities. Total Average Units represents the average number of units operated during the period. Transaction and Organizational Restructuring Costs are general and administrative expenses. Transaction costs include those directly related to acquisition, disposition, financing, and leasing activity, 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. Definitions

 
18 Appendices Summary Financial Impact: COVID-19 19 Non-GAAP Financial Measures 21

 
19 Summary Financial Impact: COVID-19 2020 2021 2022 ($ in 000s) Full Year 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q YTD 2022 Cumulative Independent Living Other operating income $ 11,823 $ 1,364 $ 111 $ 9 $ 28 $ 1,512 $ 2 $ 1,159 $ 9,520 $ 10,681 $ 24,016 Facility operating expense $ 16,089 $ 3,047 $ 1,449 $ 938 $ 430 $ 5,864 $ 1,335 $ 274 $ 429 $ 2,038 $ 23,991 Assisted Living and Memory Care Other operating income $ 62,585 $ 5,104 $ 629 $ 75 $ 155 $ 5,963 $ 356 $ 6,412 $ 49,721 $ 56,489 $ 125,037 Facility operating expense $ 82,483 $ 18,902 $ 6,058 $ 4,798 $ 2,494 $ 32,252 $ 7,588 $ 1,313 $ 2,497 $ 11,398 $ 126,133 CCRCs Other operating income $ 18,454 $ 1,684 $ 46 $ 5 $ 53 $ 1,788 $ 18 $ 840 $ 7,518 $ 8,376 $ 28,618 Facility operating expense $ 18,750 $ 3,985 $ 1,442 $ 1,498 $ 467 $ 7,392 $ 1,440 $ 364 $ 698 $ 2,502 $ 28,644 Senior Housing Total Estimated lost revenue (1) $ 228,500 $ 94,200 $ 81,800 $ 76,400 $ 75,600 $ 328,000 $ 97,000 $ 95,000 $ 97,000 $ 289,000 $ 845,500 Other operating income $ 92,862 $ 8,152 $ 786 $ 89 $ 236 $ 9,263 $ 376 $ 8,411 $ 66,759 $ 75,546 $ 177,671 Facility operating expense $ 117,322 $ 25,934 $ 8,949 $ 7,234 $ 3,391 $ 45,508 $ 10,363 $ 1,951 $ 3,624 $ 15,938 $ 178,768 The COVID-19 pandemic has adversely impacted the Company's occupancy and resident fee revenue beginning in March 2020 and resulted in incremental direct costs to respond to the pandemic. In the aggregate, since the period beginning January 1, 2020, the Company has incurred $189.2 million (consisting of $178.8 million for the consolidated Senior Housing segments and $10.4 million for the former Health Care Services segment) of pandemic-related expenses, of which 43% related to employee-related costs, 35% related to personal protective equipment and medical supplies, and 22% related to cleaning and other costs. The following table presents the known or estimated impacts related to the COVID-19 pandemic (incremental direct costs to respond to the COVID-19 pandemic, other operating income from government financial relief, and estimated lost revenue) for the Company's consolidated Senior Housing results. Presentations of these amounts are intended to aid investors in better understanding the factors and trends affecting the Company’s performance and liquidity. Consolidated Occupancy Trend 2021 January February March April May June July August September October November December 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% 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% 2022 January February March April May June July August September October Weighted average 73.4% 73.3% 73.6% 73.9% 74.6% 75.2% 75.9% 76.4% 76.9% 77.2% Month end 74.2% 74.4% 75.0% 75.3% 76.2% 76.6% 77.1% 77.9% 78.4% 78.2% The following table sets forth the Company's recent consolidated occupancy trend. (1) Estimated lost revenue for the 2022 periods represents the difference between the actual resident fee revenue for the period and the estimated resident fee revenue for the period based upon the Company's pre-pandemic expectations for 2022. The estimated lost revenue for the 2020 and 2021 periods represents the difference between the actual resident fee revenue for the period and the Company's pre-pandemic expectations for the 2020 period.

 
20 Summary Financial Impact: COVID-19 2021 2022 ($ in 000s) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q YTD 2022 Independent Living Other operating income $ 1,345 $ 111 $ 8 $ 28 $ 1,492 $ 2 $ 1,146 $ 9,276 $ 10,424 Facility operating expense $ 2,983 $ 1,364 $ 908 $ 431 $ 5,686 $ 1,310 $ 318 $ 424 $ 2,052 Assisted Living and Memory Care Other operating income $ 4,911 $ 609 $ 76 $ 155 $ 5,751 $ 357 $ 6,287 $ 49,465 $ 56,109 Facility operating expense $ 18,099 $ 5,853 $ 4,739 $ 2,409 $ 31,100 $ 7,449 $ 1,323 $ 2,620 $ 11,392 CCRCs Other operating income $ 1,080 $ 43 $ 4 $ 53 $ 1,180 $ — $ 578 $ 5,781 $ 6,359 Facility operating expense $ 3,193 $ 1,036 $ 842 $ 321 $ 5,392 $ 1,154 $ 290 $ 446 $ 1,890 Total Same Community Other operating income $ 7,336 $ 763 $ 88 $ 236 $ 8,423 $ 359 $ 8,011 $ 64,522 $ 72,892 Facility operating expense $ 24,275 $ 8,253 $ 6,489 $ 3,161 $ 42,178 $ 9,913 $ 1,931 $ 3,490 $ 15,334 The following table presents the incremental direct costs to respond to the COVID-19 pandemic and other operating income from government financial relief for the Company's same community results. Certain cash flow impacts from the CARES Act and government grants and credits are shown below: 2020 2021 2022 ($ in 000s) Full Year 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q YTD 2022 Cash received (recouped) - Medicare advances (1) $ 87,542 $ — $ (14,258) $ (3,527) $ (3,057) $ (20,842) $ (1,848) $ (1,240) $ — $ (3,088) Deferred payroll taxes (2) 72,674 — — — (31,553) (31,553) — — — — Cash received - government grants 115,748 1,700 405 89 251 2,445 376 4,574 62,750 67,700 Cash received - employee retention credit (3) — — — 1,055 350 1,405 406 19 — 425 Operating cash flow impacts (4) 275,964 1,700 (13,853) (2,383) (34,009) (48,545) (1,066) 3,353 62,750 65,037 Less: Other operating income (115,749) (10,735) (1,308) (89) (236) (12,368) (376) (8,411) (66,759) (75,546) Changes in working capital $ 160,215 $ (9,035) $ (15,161) $ (2,472) $ (34,245) $ (60,913) $ (1,442) $ (5,058) $ (4,009) $ (10,509) Liabilities retained by the Company as of September 30, 2022, due December 2022 $ 31,553 Government Relief (including consolidated Senior Housing segments and the former Health Care Services segment) (1) During the full year 2020, the Company received $87.5 million under the Medicare Accelerated and Advance Payment Program, of which obligations for $9.6 million were retained by the Company following the HCS Sale. The amount began to be recouped in the full year 2021 and the remaining amount was fully recouped in the six months ended June 30, 2022. (2) During the full year 2020, the Company deferred $72.7 million of the employer portion of social security taxes, of which obligations for $63.1 million were retained by the Company following the HCS Sale. One half was repaid during the full year 2021 and the $31.6 million remaining obligation is due December 31, 2022. (3) During the full year 2021, the Company recognized $9.9 million of employee retention credits on wages paid from March 12, 2020 to December 31, 2020 within other operating income. During the nine months ended September 30, 2022, the Company recognized $9.4 million of employee retention credits on wages paid in 2021 within other operating income. As of September 30, 2022, the Company has received $1.8 million increasing the Company's net cash provided by (used in) operating activities and has $14.7 million of receivables related to employee retention credits. (4) Impacts included in Adjusted Free Cash Flow.

 
21 Non-GAAP Financial Measures This Supplemental Information contains the financial measures Adjusted EBITDA, Adjusted EBITDAR, Adjusted EBITDA after cash financing lease payments, Adjusted Free Cash Flow, Net Debt, and Adjusted Net Debt (each as defined in the "Definitions" section), which are not calculated in accordance with U.S. 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, net cash provided by (used in) operating activities, short-term debt, long-term debt less current portion, or current portion of long-term debt. Investors are cautioned that amounts presented in accordance with the Company’s definitions of these non-GAAP financial measures may not be comparable to similar measures disclosed by other companies because not all companies calculate non-GAAP measures in the same manner. Investors are urged to review the reconciliations set forth in this Appendix of these non-GAAP financial measures from the most comparable financial measures determined in accordance with GAAP and to review the information under "Reconciliations of Non-GAAP Financial Measures" in the Company’s earnings release dated November 7, 2022 for additional information regarding the Company’s use and the limitations of such non-GAAP financial measures.

 
22 2021 2022 ($ in 000s) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q Net income (loss) $ (108,303) $ (83,604) $ 174,263 $ (81,720) $ (99,364) $ (100,032) $ (84,283) $ (28,374) Provision (benefit) for income taxes 752 (792) 15,279 (23,402) (8,163) (1,976) 1,190 (300) Equity in (earnings) loss of unconsolidated ventures 531 (13,946) 1,474 1,547 (10,394) 4,894 2,439 2,020 Loss (gain) on debt modification and extinguishment, net — — — 1,932 1,932 — — — Loss (gain) on sale of assets, net (1,112) 79 (288,375) 573 (288,835) 294 (961) 56 Other non-operating (income) loss (1,644) (2,948) (571) (740) (5,903) 27 111 (1,877) Interest expense 48,607 49,057 49,361 48,115 195,140 43,354 48,234 49,873 Interest income (421) (341) (286) (301) (1,349) (95) (778) (2,192) Income (loss) from operations (61,590) (52,495) (48,855) (53,996) (216,936) (53,534) (34,048) 19,206 Depreciation and amortization 83,891 83,591 84,560 85,571 337,613 85,684 86,623 86,922 Asset impairment 10,677 2,078 639 9,609 23,003 9,075 2,599 5,688 Loss (gain) on facility operating lease termination, net — — — (2,003) (2,003) — — — Operating lease expense adjustment (4,664) (5,326) (6,273) (7,017) (23,280) (8,307) (8,308) (8,714) Non-cash stock-based compensation expense 4,783 4,527 3,568 3,392 16,270 3,885 3,619 3,403 Transaction and Organizational Restructuring Costs 1,884 689 943 293 3,809 373 229 346 Adjusted EBITDA (1) $ 34,981 $ 33,064 $ 34,582 $ 35,849 $ 138,476 $ 37,176 $ 50,714 $ 106,851 Other operating income $ 10,735 $ 1,308 $ 89 $ 236 $ 12,368 $ 376 $ 8,411 $ 66,759 Adjusted EBITDA Reconciliation Non-GAAP Financial Measures (continued) (1) Adjusted EBITDA includes government grants and credits recognized in other operating income.

 
23 Adjusted EBITDAR; Adjusted EBITDA; and Adjusted EBITDA after Cash Financing Lease Payments Reconciliations Twelve Months Ended September 30, 2022($ in 000s) Net income (loss) $ (294,409) Provision (benefit) for income taxes (24,488) Equity in (earnings) loss of unconsolidated ventures 10,900 Loss (gain) on debt modification and extinguishment, net 1,932 Loss (gain) on sale of assets, net (38) Other non-operating (income) loss (2,479) Interest expense 189,576 Interest income (3,366) Income (loss) from operations (122,372) Depreciation and amortization 344,800 Asset impairment 26,971 Loss (gain) on facility operating lease termination, net (2,003) Facility operating lease expense 167,269 Non-cash stock-based compensation expense 14,299 Transaction and Organizational Restructuring Costs 1,241 Adjusted EBITDAR $ 430,205 Facility operating lease expense (167,269) Operating lease expense adjustment (32,346) Adjusted EBITDA $ 230,590 Interest expense: financing lease obligations (47,701) Payment of financing lease obligations (21,788) Adjusted EBITDA after cash financing lease payments $ 161,101 Non-GAAP Financial Measures (continued)

 
24 Net Debt and Adjusted Net Debt Reconciliations ($ in 000s) As of September 30, 2022 Long-term debt (including current portion) $ 3,819,929 Cash and cash equivalents (299,201) Marketable securities (89,504) Cash held as collateral against existing debt (14,132) Net Debt 3,417,092 Operating and financing lease obligations 1,285,402 Operating lease obligations related to certain non-facility leases for which the related lease expense is included in Adjusted EBITDAR (28,733) Adjusted Net Debt $ 4,673,761 Operating and financing lease obligations $ 1,285,402 Operating lease obligations related to certain non-facility leases for which the related lease expense is included in Adjusted EBITDAR (28,733) Adjusted operating and financing lease obligations 1,256,669 Operating and financing lease obligations related to corporate office and information technology leases (12,412) Operating and financing lease obligations for Senior Housing Leased Portfolio $ 1,244,257 Non-GAAP Financial Measures (continued)

 
25 2021 2022 ($ in 000s) 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q Net cash provided by (used in) operating activities $ (23,857) $ 3,410 $ 7,200 $ (81,387) $ (94,634) $ (23,255) $ 11,577 $ 63,521 Net cash provided by (used in) investing activities (3,806) 1,561 203,974 (20,272) 181,457 (36,163) (43,838) 22,508 Net cash provided by (used in) financing activities (35,562) (20,992) (19,177) (37,926) (113,657) (403) (17,690) (19,754) Net increase (decrease) in cash, cash equivalents and restricted cash $ (63,225) $ (16,021) $ 191,997 $ (139,585) $ (26,834) $ (59,821) $ (49,951) $ 66,275 Net cash provided by (used in) operating activities $ (23,857) $ 3,410 $ 7,200 $ (81,387) $ (94,634) $ (23,255) $ 11,577 $ 63,521 Distributions from unconsolidated ventures from cumulative share of net earnings — (5,355) (836) — (6,191) (561) — — Changes in prepaid insurance premiums financed with notes payable 12,985 (4,200) (4,151) (4,634) — 16,629 (5,377) (5,700) Changes in operating lease assets and liabilities for lease termination — — — 2,380 2,380 — — — Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements (7,563) (7,943) (11,551) (3,908) (30,965) (1,490) (3,367) (4,367) Non-development capital expenditures, net (27,450) (35,795) (28,193) (45,972) (137,410) (39,326) (45,686) (43,819) Payment of financing lease obligations (4,789) (4,864) (5,039) (5,182) (19,874) (5,490) (5,610) (5,506) Adjusted Free Cash Flow (1) $ (50,674) $ (54,747) $ (42,570) $ (138,703) $ (286,694) $ (53,493) $ (48,463) $ 4,129 (1) Adjusted Free Cash Flow includes: Cash received - government grants and credits $ 1,700 $ 405 $ 1,144 $ 601 $ 3,850 $ 782 $ 4,593 $ 62,750 Cash payments - deferred payroll taxes $ — $ — $ — $ (31,553) $ (31,553) $ — $ — $ — Cash recouped - Medicare advances $ — $ (14,258) $ (3,527) $ (3,057) $ (20,842) $ (1,848) $ (1,240) $ — Adjusted Free Cash Flow Reconciliation Non-GAAP Financial Measures (continued) Brookdale Senior Living Inc. 111 Westwood Place Brentwood, TN 37027 (615) 221-2250 www.brookdale.com