Investor Presentation August 5, 2021 - Seeking Alpha
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Investor Presentation August 5, 2021
Forward-Looking Statements – Safe Harbor
Certain statements in this Investor Presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to various risks and uncertainties and include all statements that are not historical statements of fact and those regarding
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, 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 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 resident fees, including due to changes in unemployment rates, consumer
confidence, housing markets, and equity markets caused by COVID-19, changes in the acuity levels of the Company’s new residents, the disproportionate impact of
COVID-19 on seniors generally and those residing in the Company’s communities, the duration and costs of the Company’s response efforts, including increased
equipment, supplies, labor, litigation, testing, vaccination clinic, and other expenses, potentially greater associate attrition and use of contract labor due to the
Company's associate vaccine mandate, the impact of COVID-19 on the Company’s ability to complete financings, refinancings, or other transactions, or variants, or to
generate sufficient cash flow to cover required interest and lease payments and to satisfy financial and other covenants in its debt and lease documents, increased
regulatory requirements, including unfunded, mandatory testing, 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; the impact of ongoing healthcare reform efforts; 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; risks related to the implementation of the Company’s strategy, including
initiatives undertaken to execute on its strategic priorities and their effect on the Company’s results; 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 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 its liquidity;
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, 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; as well as other risks detailed from time to time in the Company’s filings with the Securities and
Exchange Commission, including those contained in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. When considering forward-
looking statements, you should keep in mind the risk factors and other cautionary statements in such SEC filings. Readers are cautioned not to place undue reliance on
any of these forward-looking statements, which reflect management's views as of the date of this Investor Presentation. 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 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.
2
Attractive and accelerating long-term
target demographics
Significant tailwind with dramatically
lower senior housing new supply
Higher acuity needs increasing, driving
growth for our Assisted Living and
Memory Care communities
Five consecutive months of occupancy
growth(1)
We are creating long-term value for
shareholders by helping our residents
live better and by providing compelling OUR CORNERSTONES
opportunities for associates are more important than ever
3
(1) Based on weighted average occupancy March to July 2021
at a Glance
Senior Living Industry Leader
685 COMMUNITIES IN 41 STATES
Leased
36%
Owned
54%
Units
Managed
States with Presence
Brookdale Community
10%
OUR OUR Over 60,000 ~ 35,000(1)
MISSION VISION RESIDENTS EMPLOYEES
ABILITY TO SERVE
Enriching the Lives of To be the nation’s
those we serve with First Choice
compassion, respect, in senior living
excellence and integrity
Brookdale statistics as of June 30, 2021, unless otherwise noted 4
(1) As of July 1, 2021, after the sale of 80% of our equity interest in our Health Care Services segmentof Care
BROOKDALE
SERVICES
THIRD-PARTY
SERVICES INDEPENDENT
LIVING
VENTURE PARTNER HOME ASSISTED
SERVICES HEALTH LIVING
HOSPICE MEMORY
CARE
OUTPATIENT SKILLED
THERAPY NURSING
TELEHEALTH
RESPITE
CARE
HEALTHCARE
PROFESSIONAL(2) PRIVATE DUTY
SERVICES
RESIDENT
ENGAGEMENT
(1) Services vary by community; some services require physician referral 5
(2) Healthcare professionals rounding in our communitiesSenior Housing Provider
#1
provider of Senior Housing
94% Private Pay(2)
64%
of our target senior population lives
in the U.S.(1) within 20 minutes of a Brookdale
community(3)
BROOKDALE #1 IN UNITS OPERATED(4) FAVORABLE OPERATIONAL TRENDS(5)
60,000
11%
Target population
living in senior
40,000
housing
12% 29%
20,000 of our residents Move-Ins under
are Baby Boomers age 80
0
Brookdale Atria Senior LCS Five Star Sunrise Senior
64%
Senior Living Living-Holiday Senior Living Living Executive Directors
Retirement with community
2+ years
(1) National Investment Center for Seniors Housing & Care (NIC) IL, AL, and MC units, NIC Supply Set 2Q 2021
(2) Brookdale’s Senior Housing segments’ resident fees for the trailing 12 months ending June 30, 2021
(3) ESRI, Brookdale. Seniors population defined as age 75+ with an annual income of $50,000 or greater and within the United States
(4) For Brookdale, actual units as of June 30, 2021; for peers, as self-reported in latest publication by Argentum, 2021, except Atria Senior
Living and Holiday Retirement, with units combined following announcement of Holiday Retirement acquisition by Atria Senior Living 6
(5) NIC for target population living in senior housing; Brookdale’s proprietary analysis for community statisticsis Recovering
Five consecutive months of occupancy growth(1)
CONSOLIDATED OCCUPANCY Weighted Avg.(2)
85% 3Q20 75.3%
4Q20 72.7%
1Q21 69.6%
2Q21 70.5%
80%
75% +260 bps
70%
65%
Mar20 Apr20 May20 Jun20 Jul20 Aug20 Sep20 Oct20 Nov20 Dec20 Jan21 Feb21 Mar21 Apr21 May21 Jun21 Jul21
Weighted average 82.7% 80.4% 78.4% 77.4% 76.4% 75.2% 74.3% 73.8% 72.8% 71.5% 70.0% 69.4% 69.4% 69.9% 70.5% 71.2% 72.0%
Month-end 82.2% 80.0% 78.5% 77.8% 76.6% 75.5% 75.0% 74.1% 73.1% 71.5% 70.4% 70.1% 70.6% 71.1% 71.6% 72.6% 73.3%
(1) Based on weighted average occupancy March to July 2021 7
(2) Weighted average is based on units occupiedFavorable, lower new supply trend
SENIOR HOUSING MIX NEW STARTS AND OPENS OPEN UNITS (2)
Number of Communities
(1) 150 250
Starts Opens Units ('000s)
125 200
100
150
AL
75
IL 100
37% 40% 50
25 50
SNF MC
0 -
10% 13%
Within 20 minutes of a Brookdale community 2Q 2021 Open Units(2)
100
Starts Opens
75 2Q21 is 85% 2Q21 is 51%
lower than lower than Industry
IL 50 peak peak 95%
27%
AL
53% 25
MC
17% Brookdale
0
SNF
5%
3%
Competitive landscape is highly fragmented with ~2,500 operators.
More than 90% operate five or fewer communities.
(1) NIC data, as noted in NIC presentation is subject to future revision; NIC Supply Set 2Q 2021; industry data does not include Brookdale 8
(2) Open Units: NIC reported markets; proprietary Brookdale analysisGrowing Demand for Senior Housing
Growing Population Higher Acuity Needs Risk of Social Isolation
US Target Population (1) Prevalence of chronic conditions 28% of those age 65+ live alone (6)
In millions in residential care (4)
5 +36% High Blood Pressure
Hypertension
or Hypertension
Alzheimer's
Alzheimer's or Over 1-in-4 at risk
other
or otherdementias
dementias
4
of social isolation
Heart
HeartDisease
Disease
3
4.9 Depression
Depression
3.6
2
Osteoporosis
Osteoporosis
2.9
1 Diabetes
Diabetes
COPD
COPD
0
2010 2020 2025F
0% 20% 40% 60%
Continued increase in life 75% of residents diagnosed with 50% increased risk of dementia,
expectancy is predicted between at least two chronic diseases (4) stroke (+32%), heart disease (+29%)
2017 and 2030 (2) associated with social isolation (7)
By 2034 adults age 65+ will 39% more people with Alzheimer’s 43% drop in ratio of unpaid
exceed number of children (3) dementia by 2030 (5) caregivers to seniors by 2030 (8)
(1) ESRI, Brookdale proprietary analysis; target population defined as age 75+ with $50,000+ income
(2) “Living Longer: Historical and Projected Life Expectancy in the United States, 1960 to 2060.” US Census Bureau. February 2020.
(3) “Demographic Turning Points for the US: Population Projections for 2020 to 2060.” US Census Bureau. February 2020.
(4) “National Study of Long-Term Care Providers.” National Center for Health Statistics. Centers for Disease Control and Prevention. 2017.
(5) “2021 Alzheimer’s Disease Facts and Figures.” Alzheimer’s Association. 2021. In publication seniors are defined as age 65 and older.
(6) ”2019 Older Americans Profile.” Administration for Community Living. May 2020.
(7) “Social isolation and loneliness among older adults in the context of COVID-19.” Global Health Research and Policy. June 2020. 9
(8) “The Aging of the Baby Boom and the Growing Care Gap.” AARP. 2013. In publication seniors defined as age 80+, decline 2010 to 2030.Signs of Progress
Top-Rated Brand Industry-Leading Healthcare Recent Positive Momentum
Brand Awareness: Unaided Mentions (1) Growth in occupancy
Brookdale percentage for five
consecutive months(4)
Competitor A ~2X
more
Competitor B mentions of Sequential move-in
Brookdale
than next
increase in six out of last
Competitor C
closest eight months(4)
operator
Competitor D
Strong rate discipline
Including Bone and Joint throughout pandemic
Health, Diabetes,
and Stroke
#1 in Customer Strengthening liquidity
Satisfaction in with sale of majority
Assisted Living /
The pandemic has heightened interest in Brookdale’s
Memory Care
by J.D. Power(2)
public awareness of Home Health, Hospice and
the role of senior living in Outpatient Therapy
the healthcare continuum business
(1) Online surveys sent to national survey panel participants in top 10 markets, including
senior living prospects and their influencers from May 22 to June 1, 2021
(2) 2020 J.D. Power U.S. Senior Living Satisfaction Study; tied in 2020
(3) Services vary by community 10
(4) Ending July 2021You can also read
