Dividend investment with potential capital appreciation

1. Seamus Sullivan
(BKD)

2. The Company
Recommendation: Buy
Price Target - $53.00
Current Price
$35.40
52-week range
$35.54 – $24.42
Shares outstanding
125MM
Market Cap
$4,428MM
P/E (2015)
42.0x
EV/EBITDA (2015)
12.8x

3. •Company overview
•Investment thesis & Drivers
•Catalysts
•Risks
•Price Target and range
•Summary
•Appendix
–IS, BS, CFS, WACC
Presentation Overview

4. Company Profile
•Founded 1978
•Headquarters: Union, New Jersey
•CEO: Steven H. Temares
•Operates 1,496 stores in all 50 states
•58,000 employees
•Sector: Retail Home & Other
Brookdale Senior Living communities have provided exceptional senior living since 1978. Today, Brookdale Senior Living Inc. is the nation’s largest owner and operator of senior living communities throughout the United States and a leading national provider of senior-related services. It owns and operates senior living communities in the United States and operates in six segments:
•Retirement Centers
•Assisted Living
•CCRC – Rental
•CCRCs – Fee
•Ancillary Services
The Retirement Centers segment owns or leases communities comprising independent living and assisted living units in a single community that are primarily designed for middle to upper income senior citizens. The Assisted Living segment owns or leases communities consisting of freestanding, multi-story communities, and freestanding single story communities, which offer housing and 24-hour assistance with activities of daily life to mid-acuity frail and elderly residents. This segment also operates memory care communities for residents with Alzheimer's disease and other dementias. The CCRCs-Rental segment owns or leases communities that offer various living arrangements and services to accommodate various levels of physical ability and health. The CCRCs-Entry Fee segment allows residents in the independent living apartment units to pay a one-time upfront entrance fee to use certain amenities and services. The Brookdale Ancillary Services segment provides outpatient therapy, home health, and hospice services to residents of its communities, as well as to other senior living communities. The Management Services segment operates communities under the management agreements.

5. Investment Thesis
•Merger Synergies
–Cost savings
–Revenue growth
•Industry Leader
•Strong Sustained Growth in Customer Demographic
•Differentiator – Continuum of Care
•Durable Competitive Advantage
•Occupancy Growth
–Program Max 2.0
•Moderate Capacity Growth
•Resilient Pricing Power
•Some of the Parts (SOTP)

6. Merger Synergies
•Overhead cuts
•Operating leverage G&A consolidation
–Reduction in operating expenses by $45MM annually
•Greater purchasing power
Cost Savings
•Expanding BKDs ancillary services
•REIT HCP purchase options
–$160 (~$.90 per share of incremental EV) if exercised
•EF CCRC new revenue drivers
•Program Max 2.0
–Every $100MM CapEx spent on ESC facilities should yield $.04 to $.05 of incremental CFFO
Revenue
Management guided CFFO per share accretion of $.50 by year three

7. Merger Synergies

8. Industry Leader
Source: ALFA and Senior Living Executive – March/April 2014
BKD Business Mix by Property Type
ESC Business Mix by Property Type
BKD-ESC Combined Portfolio – Units by Type

9. Strong Sustained Customer Growth
•Seniors are living longer and need care for longer periods of time
•Children & grandchildren are increasingly unable to provide necessary care do to two-worker households
•75+ of age is the fastest growing demographic
•Little to no exposure to Medicaid cuts
•Seniors are highly exposed to interest rate income
Secular tail-winds in a favorable pricing power environment

10. Differentiator – Continuum of Care
BKD is the only national player in the Sector

11. Durable Competitive Advantage
•Nonresidential construction costs have been increasing
•With the combination of BKD and ESC scale, it will be hard for builders to come into the market and match price as well as services
–“the costs or the rent that the new developer needs to charge to justify the development risk that he or she has undertaken, generally speaking, is going to he higher than our rent, which ultimately gives us an opportunity to updraft our rent”1
•Time to get something out of the ground for new competitions, get it entitled, licensed, and opened takes at least 2 years and for larger communities three plus years
•Establishment of a strong brand name in senior care living will also grow the moat
1: 2014-06-05 BKD Jefferies Global Health Care Conference

12. Occupancy Growth
Stabilized Occupancy: Based on Top 31 MSAs (“Primary Markets”)
Model Occupancy Assumptions
Retirement CentersFY 2009FY 2010FY 2011FY 2012FY 2013FY 2014EFY 2015EFY 2016EFY 2017EOccupancy rate (weighted average)87.2%87.2%88.0%89.1%89.8%90.1%90.9%91.3%91.8% Average monthly revenue per unit$3,358$3,445$3,163$3,263$3,381$3,523$3,629$3,747$3,869YoY % change in average monthly rev per unit4.0%2.6%N/A3.2%3.6%4.2%3.0%3.3%3.3% Assisted LivingOccupancy rate (weighted average)86.8%88.4%88.2%88.9%89.7%90.2%90.9%91.3%91.8% Average monthly revenue per unit$4,401$4,573$4,275$4,390$4,510$4,625$4,763$4,918$5,078YoY % change in average monthly rev per unit17.7%3.9%N/A2.7%2.7%2.5%3.0%3.3%3.2% CCRCs - CombinedOccupancy rate (weighted average)85.1%84.3%84.8%85.1%85.6%86.0%86.2%86.4%86.6% Average monthly revenue per unit$5,168$5,517$5,838$5,323$5,411$5,514$5,620$5,760$5,904YoY % change in average monthly rev per unit8.6%6.8%N/A-8.8%1.7%1.9%1.9%2.5%2.5% Management ServicesOccupancy rate (weighted average)84.2%83.8%84.5%84.5%85.4%86.7%87.2%87.6%88.3% Average monthly revenue per unit$3,577$3,663$3,611$3,382$3,512$3,667$3,770$3,883$4,000YoY % change in average monthly rev per unit3.6%2.4%-1.4%-6.3%3.9%4.4%2.8%3.0%3.0%

13. Moderate Capacity Growth
Annual Inventory and Absorption Growth: Based on Top 31 MSAs
Not all new inventory is directly competing with BKD existing and new locations
Source: NIC MAP® Data and Analysis Service

14. Resilient Pricing Power
Annual Rent Growth: Based on Top 31 MSAs (“Primary Markets”)
•BKD has had average rate growth in the low to mid 3%. However, as their marketing/branding campaign begins to take affect I believe rate growth could increase further
Source: NIC MAP® Data and Analysis Service

15. SOTP Proforma 2015 Analysis
HI (marketed sale of company) Mid (REIT/opco split) Low (interest / cap rates rise)
Net SOTP per share, ex corporate G&A $44 $33 $24
Value of Owned Properties
Owned Lease Revs, does not include
bargin purchase options 1,871,888 1,871,888 1,871,888
Entry Fee Amortization (1,971) (1,971) (1,971)
Expenses 1,272,884 1,272,884 1,272,884
Facility Operating Margin 32.0% 32.0% 32.0%
Gross Property NOI 597,033 597,033 597,033
Subtract 1st Generation EF 0 0 0
Less imputed revenue mgmt fee -93,594 -93,594 -93,594
Net Property NOI, pre-capex 503,439 503,439 503,439
Capitalization Rate 5.50% 6.25% 7.00%
Gross Real Estate bf entrance fee value 9,153,432 8,055,020 7,191,982
Net Entrance Fees 7,400 7,400 7,400
Cap Rate 8.00% 9.50% 11.00%
Gross Value EF Cash Flows 92,500 77,895 67,273
Gross Value of Real Estate incl EF Value 9,245,932 8,132,915 7,259,255
Gross Value Per Share $53.46 $47.03 $41.97
Owned units 34,545 34,545 34,545
Estimated Value Per Unit 267,649 235,430 210,139
Net R/E Per Share 31.72 25.28 20.23
Valued of Leased Property Cash Flow
Lease revs, incl bargain purchase options 2,650,501 2,650,501 2,650,501
Expenses 1,802,341 1,802,341 1,802,341
Op Margin 32.0% 32.0% 32.0%
NOI leased assets 848,160 848,160 848,160
Less Cash Lease Rents, does not incl
rents on cap leases (400,292) (400,292) (400,292)
Less G&A allocation (132,525) (132,525) (132,525)
GAAP EF amortization - - -
Net Cash EF - - -
EBITDA 315,343 315,343 315,343
EBITDA Multiple 11.0 9.50 8.0
Value Per Share $20.06 $17.32 $14.59
PV of bargin purchase options $160,000 $150,000 $140,000
PV/sh of bargain purchase options $0.93 $0.87 $0.81
PV/sh (at beg of 2015) of rent reduction
in 2016 and 2017 $0.50 $0.32 $0.24
Ancillary Business Value
NOI 82,090 82,090 82,090
Multiple 9.0 7.5 6
Value Per Share 4.27 3.56 2.85
Management Business
(assumes real estate / opco split)
Management Fee Revenue 161,853 161,853 161,853
Estimated Operating Margin, incl. G&A 35.0% 30.0% 25.0%
Net Management Income 56,649 48,556 40,463
Assumed Multiple 7.0 6.0 5.0
Value Per Share 2.29 1.68 1.17
Construction in Progress
Assumed Value $0 $0 $0
Value Per Share $0.00 $0.00 $0.00
Tangible Assets
Cash - -
Current Assets, incl cash 525,667 525,667 525,667
Investments in Unconsolidated JV 326,991 326,991 326,991
Other tangible assets 293,354 293,354 293,354
Subtotal Assets $1,146,012 $1,146,012 $1,146,012
Liabilities
Mortgage Debt 3,760,391 3,760,391 3,760,391
Capital lease obligations 2,567,316 2,567,316 2,567,316
Credit Line draws 90,550 90,550 90,550
Current Liabilities, excluding debt 398,367 398,367 398,367
Deferred Lease Liability
Other tangible liabilities 849,206 849,206 849,206
Subtotal Adjusted Liabilities $7,665,830 $7,665,830 $7,665,830
NAV Balance Sheet ($37.70) ($37.70) ($37.70)
Average Diluted Shares Outstanding 172,945
HI (marketed sale of company) Mid (REIT/opco split) Low (interest / cap rates rise)
Net SOTP per share, ex corporate G&A $44 $33 $24
Value of Owned Properties
Owned Lease Revs, does not include
bargin purchase options 1,871,888 1,871,888 1,871,888
Entry Fee Amortization (1,971) (1,971) (1,971)
Expenses 1,272,884 1,272,884 1,272,884
Facility Operating Margin 32.0% 32.0% 32.0%
Gross Property NOI 597,033 597,033 597,033
Subtract 1st Generation EF 0 0 0
Less imputed revenue mgmt fee -93,594 -93,594 -93,594
Net Property NOI, pre-capex 503,439 503,439 503,439
Capitalization Rate 5.50% 6.25% 7.00%
Gross Real Estate bf entrance fee value 9,153,432 8,055,020 7,191,982
Net Entrance Fees 7,400 7,400 7,400
Cap Rate 8.00% 9.50% 11.00%
Gross Value EF Cash Flows 92,500 77,895 67,273
Gross Value of Real Estate incl EF Value 9,245,932 8,132,915 7,259,255
Gross Value Per Share $53.46 $47.03 $41.97
Owned units 34,545 34,545 34,545
Estimated Value Per Unit 267,649 235,430 210,139
Net R/E Per Share 31.72 25.28 20.23
$38.46 $28.91 $20.98
Discounted back 1.75yrs, 8%

16. SOTP Proforma 2016 Analysis
HI (marketed sale of company) Mid (REIT/opco split) Low (interest / cap rates rise)
Net SOTP per share, ex corporate G&A $56 $44 $34
Value of Owned Properties
Owned Lease Revs, does not include bargin
purchase options 1,962,791 1,962,791 1,962,791
Entry Fee Amortization (2,192) (2,192) (2,192)
Expenses 1,315,070 1,315,070 1,315,070
Facility Operating Margin 33.0% 33.0% 33.0%
Gross Property NOI 645,529 645,529 645,529
Subtract 1st Generation EF 0 0 0
Less imputed revenue mgmt fee -98,140 -98,140 -98,140
Net Property NOI, pre-capex 547,389 547,389 547,389
Capitalization Rate 5.50% 6.25% 7.00%
Gross Real Estate bf entrance fee value 9,952,531 8,758,227 7,819,846
Net Entrance Fees 7,400 7,400 7,400
Cap Rate 8.00% 9.50% 11.00%
Gross Value EF Cash Flows 92,500 77,895 67,273
Gross Value of Real Estate incl EF Value 10,045,031 8,836,122 7,887,118
Gross Value Per Share $57.50 $50.58 $45.15
Owned units 34,545 34,545 34,545
Estimated Value Per Unit 290,781 255,786 228,314
Net R/E Per Share 37.85 30.93 25.50
Valued of Leased Property Cash Flow
Lease revs, incl bargain purchase options 2,779,214 2,779,214 2,779,214
Expenses 1,862,073 1,862,073 1,862,073
Op Margin 33.0% 33.0% 33.0%
NOI leased assets 917,141 917,141 917,141
Less Cash Lease Rents, does not incl rents on
cap leases (404,902) (404,902) (404,902)
Less G&A allocation (138,961) (138,961) (138,961)
GAAP EF amortization - - -
Net Cash EF - - -
EBITDA 373,277 373,277 373,277
EBITDA Multiple 11.0 9.50 8.0
Value Per Share $23.51 $20.30 $17.09
PV of bargin purchase options $160,000 $150,000 $140,000
PV/sh of bargain purchase options $0.92 $0.86 $0.80
PV/sh of rent reduction in 2016 and 2017
(calculation below) $0.56 $0.34 $0.25
Ancillary Business Value
NOI 89,540 89,540 89,540
Multiple 9.0 7.5 6
Value Per Share 4.61 3.84 3.08
Management Business
(assumes real estate / opco split)
Management Fee Revenue 166,398 166,398 166,398
Estimated Operating Margin, incl. G&A 35.0% 30.0% 25.0%
Net Management Income 58,239 49,920 41,600
Assumed Multiple 7.0 6.0 5.0
Value Per Share 2.33 1.71 1.19
Construction in Progress
Assumed Value $0 $0 $0
Value Per Share $0.00 $0.00 $0.00
Tangible Assets
Cash - - -
Current Assets, incl cash 881,550 881,550 881,550
Investments in Unconsolidated JV 326,991 326,991 326,991
Other tangible assets 293,354 293,354 293,354
Subtotal Assets $1,501,895 $1,501,895 $1,501,895
Liabilities
Mortgage Debt, assumes 2016 cash flow
repays debt 3,432,394 3,432,394 3,432,394
Capital lease obligations 2,567,316 2,567,316 2,567,316
Credit Line draws 90,550 90,550 90,550
Current Liabilities, excluding debt 398,367 398,367 398,367
Deferred Lease Liability
Other tangible liabilities 849,206 849,206 849,206
Subtotal Adjusted Liabilities $7,337,833 $7,337,833 $7,337,833
NAV Balance Sheet ($33.41) ($33.41) ($33.41)
Average Diluted Shares Outstanding 174,685
HI (marketed sale of company) Mid (REIT/opco split) Low (interest / cap rates rise)
Net SOTP per share, ex corporate G&A $56 $44 $34
Value of Owned Properties
Owned Lease Revs, does not include bargin
purchase options 1,962,791 1,962,791 1,962,791
Entry Fee Amortization (2,192) (2,192) (2,192)
Expenses 1,315,070 1,315,070 1,315,070
Facility Operating Margin 33.0% 33.0% 33.0%
Gross Property NOI 645,529 645,529 645,529
Subtract 1st Generation EF 0 0 0
Less imputed revenue mgmt fee -98,140 -98,140 -98,140
Net Property NOI, pre-capex 547,389 547,389 547,389
Capitalization Rate 5.50% 6.25% 7.00%
Gross Real Estate bf entrance fee value 9,952,531 8,758,227 7,819,846
Net Entrance Fees 7,400 7,400 7,400
Cap Rate 8.00% 9.50% 11.00%
Gross Value EF Cash Flows 92,500 77,895 67,273
Gross Value of Real Estate incl EF Value 10,045,031 8,836,122 7,887,118
Gross Value Per Share $57.50 $50.58 $45.15
Owned units 34,545 34,545 34,545
Estimated Value Per Unit 290,781 255,786 228,314
Net R/E Per Share 37.85 30.93 25.50
$45.32 $35.61 $27.51
Discounted back 2.75yrs, 8%

17. SOTP Proforma 2017 Analysis
HI (marketed sale of company) Mid (REIT/opco split) Low (interest / cap rates rise)
Net SOTP per share, ex corporate G&A $69 $49 $38
Value of Owned Properties
Owned Lease Revs, does not include bargin
purchase options 2,062,651 2,062,651 2,062,651
Entry Fee Amortization (2,413) (2,413) (2,413)
Expenses 1,361,349 1,361,349 1,361,349
Facility Operating Margin 34.0% 34.0% 34.0%
Gross Property NOI 698,888 698,888 698,888
Subtract 1st Generation EF 0 0 0
Less imputed revenue mgmt fee -103,133 -103,133 -103,133
Net Property NOI, pre-capex 595,755 595,755 595,755
Capitalization Rate 5.50% 6.25% 7.00%
Gross Real Estate bf entrance fee value 10,831,918 9,532,087 8,510,792
Net Entrance Fees 7,400 7,400 7,400
Cap Rate 8.00% 9.50% 11.00%
Gross Value EF Cash Flows 92,500 77,895 67,273
Gross Value of Real Estate incl EF Value 10,924,418 9,609,982 8,578,065
Gross Value Per Share $61.92 $54.47 $48.62
Owned units 34,545 34,545 34,545
Estimated Value Per Unit 316,237 278,187 248,316
Net R/E Per Share 44.37 36.92 31.07
Valued of Leased Property Cash Flow
Lease revs, incl bargain purchase options 2,920,611 2,920,611 2,920,611
Expenses 1,927,603 1,927,603 1,927,603
Op Margin 34.0% 34.0% 34.0%
NOI leased assets 993,008 993,008 993,008
Less Cash Lease Rents, does not incl rents
on cap leases (407,318) (407,318) (407,318)
Less G&A allocation (146,031) (146,031) (146,031)
GAAP EF amortization - - -
Net Cash EF - - -
EBITDA 439,659 439,659 439,659
EBITDA Multiple 11.0 9.50 8.0
Value Per Share $27.41 $23.67 $19.94
PV of bargin purchase options $160,000 $150,000 $140,000
PV/sh of bargain purchase options $0.91 $0.85 $0.79
PV/sh of rent reduction in 2016 and 2017
(calculation below) $0.00 $0.00 $0.00
Ancillary Business Value
NOI 95,693 95,693 95,693
Multiple 9.0 7.5 6
Value Per Share 4.88 4.07 3.25
Management Business
(assumes real estate / opco split)
Management Fee Revenue 175,207 175,207 175,207
Estimated Operating Margin, incl. G&A 35.0% 30.0% 25.0%
Net Management Income 61,323 52,562 43,802
Assumed Multiple 7.0 6.0 5.0
Value Per Share 2.43 1.79 1.24
Construction in Progress
Assumed Value $0 $0 $0
Value Per Share $0.00 $0.00 $0.00
Tangible Assets
Cash - - -
Current Assets, incl cash 1,270,998 882 882
Investments in Unconsolidated JV 326,991 326,991 326,991
Other tangible assets 293,354 293,354 293,354
Subtotal Assets $1,891,343 $621,227 $621,227
Liabilities
Mortgage Debt, assumes 2016 and 2017
cash flow repay debt 3,095,721 3,095,721 3,095,721
Capital lease obligations 2,567,316 2,567,316 2,567,316
Credit Line draws 90,550 90,550 90,550
Current Liabilities, excluding debt 398,367 398,367 398,367
Deferred Lease Liability
Other tangible liabilities 849,206 849,206 849,206
Subtotal Adjusted Liabilities $7,001,160 $7,001,160 $7,001,160
NAV Balance Sheet ($28.96) ($36.16) ($36.16)
Average Diluted Shares Outstanding 176,425
HI (marketed sale of company) Mid (REIT/opco split) Low (interest / cap rates rise)
Net SOTP per share, ex corporate G&A $69 $49 $38
Value of Owned Properties
Owned Lease Revs, does not include bargin
purchase options 2,062,651 2,062,651 2,062,651
Entry Fee Amortization (2,413) (2,413) (2,413)
Expenses 1,361,349 1,361,349 1,361,349
Facility Operating Margin 34.0% 34.0% 34.0%
Gross Property NOI 698,888 698,888 698,888
Subtract 1st Generation EF 0 0 0
Less imputed revenue mgmt fee -103,133 -103,133 -103,133
Net Property NOI, pre-capex 595,755 595,755 595,755
Capitalization Rate 5.50% 6.25% 7.00%
Gross Real Estate bf entrance fee value 10,831,918 9,532,087 8,510,792
Net Entrance Fees 7,400 7,400 7,400
Cap Rate 8.00% 9.50% 11.00%
Gross Value EF Cash Flows 92,500 77,895 67,273
Gross Value of Real Estate incl EF Value 10,924,418 9,609,982 8,578,065
Gross Value Per Share $61.92 $54.47 $48.62
Owned units 34,545 34,545 34,545
Estimated Value Per Unit 316,237 278,187 248,316
Net R/E Per Share 44.37 36.92 31.07
$51.40 $36.48 $28.24
Discounted back 3.75yrs, 8%

18. SOTP Proforma 2018 Analysis
Discounted back 4.75yrs, 8%
Net SOTP per share, ex corporate G&A $72 $52 $40
Value of Owned Properties $53.92 $38.69 $30.20
Owned Lease Revs, does not include bargin
purchase options 2,172,583 2,172,583 2,172,583
Entry Fee Amortization (2,413) (2,413) (2,413)
Expenses 1,433,905 1,433,905 1,433,905
Facility Operating Margin 34.0% 34.0% 34.0%
Gross Property NOI 736,265 736,265 736,265
Subtract 1st Generation EF 0 0 0
Less imputed revenue mgmt fee -108,629 -108,629 -108,629
Net Property NOI, pre-capex 627,636 627,636 627,636
Capitalization Rate 5.50% 6.25% 7.00%
Gross Real Estate bf entrance fee value 11,411,562 10,042,175 8,966,228
Net Entrance Fees 7,400 7,400 7,400
Cap Rate 8.00% 9.50% 11.00%
Gross Value EF Cash Flows 92,500 77,895 67,273
Gross Value of Real Estate incl EF Value 11,504,062 10,120,070 9,033,500
Gross Value Per Share $65.21 $57.36 $51.20
Owned units 34,545 34,545 34,545
Estimated Value Per Unit 333,017 292,953 261,500
Net R/E Per Share 47.66 39.81 33.66
$53.92 $38.69 $30.20

19. •Several bidders tends to result in a “winners curse” scenario
Timeline of BKD-ESC deal
Source: BKD-ESC S-4 filing
BKD Paid Up For ESC

20. BofA ESC BKD CSU FVE Avg. Low High Low High
2014E EV/EBITDA 11.8x 12.3x 15.2x NA 13.7x $14.75 $31.50 $24.50 $32.75
2014E Price/adjusted CFFO 8.5x 10.9x 14.0x NA 12.4x $20.75 $27.00 $25.50 $33.00
2014E Adj EV/GAAP EBITDAR 11.3x 11.6x 12.9x NA 12.2x $18.50 $41.75 $26.25 $38.25
Cash EBITDA CAGR (2013E-2015) 17.9% 10.6% 21.1% NA 15.8%
CSCA ESC BKD CSU FVE Avg. Low High Low High
2014E EV/cash EBITDA 10.1x 13.1x 15.2x NA 13.0x
9.5x 10.9x 14.0x NA 11.5x
Average $22.21 $31.53 $22.05 $33.01
BKD per share range
ESC per share range BKD per share range
ESC per share range
Wells Fargo
Avg.
(ESC, BKD,
CSU, FVE)
Avg.
(ESC selected
comp only)
Avg.
(BKD selected
comp only) Low High Low High
2014E EV/EBITDAR 11.5x 11.6x 11.3x
2014E EV/EBITDAR 11.8x 11.7x 11.4x
2014E EV/cash EBITDA 10.7x 11.0x 10.1x
2014E Price/CFFO 11.4x 12.6x 11.6x
2015E EV/EBITDAR 10.9x 10.7x 10.9x
2015E EV/EBITDAR 10.6x 10.2x 10.0x
2015E EV/cash EBITDA 9.6x 9.7x 8.9x
2015E Price/CFFO 10.2x 11.2x 10.2x
Average $19.50 $27.00 $24.00 $28.75
ESC per share range BKD per share range
Moelis Low High Low High
2013A EV adj EBITDA $21.80 $29.33 $26.97 $30.59
2013A adj EV/adj EBITDAR $19.84 $30.17 $22.34 $27.71
2013A Price/adj CFFO $20.94 $24.60 $26.57 $31.40
2014A EV adj EBITDA $16.89 $25.11 $26.63 $30.70
2014A adj EV/adj EBITDAR $16.43 $28.25 $21.92 $27.78
2014A Price/adj CFFO 9.0x to 11.0x $20.20 $24.51 $24.27 $29.66
13.0x to 14.0x
12.0x to 13.0x
11.0x to 13.0x
11.5x to 12.5x
11.0x to 12.0x
ESC per share range BKD per share range
Avg.
(ESC, BKD, CSU, FVE)
BKD Paid Up For ESC

21. Balance Sheet
Brookdale - Debt Schedule - assumes debt maturity extensions, includes capital leases
Per 1Q14 Supplement
Mortgage Debt + Line Rate % debt Capital Lease Rate Total Debt Rate % debt
2014 24,630 3.85% 1.1% 24,906 7.99% 49,536 5.9% 1.9%
2015 28,176 4.09% 1.2% 34,491 8.08% 62,667 6.3% 2.4%
2016 60,124 4.60% 2.6% 29,861 8.32% 89,985 5.8% 3.4%
2017 359,729 5.30% 15.5% 61,256 8.15% 420,985 5.7% 16.1%
2018 785,062 3.41% 33.9% 24,172 8.48% 809,234 3.6% 31.0%
Thereafter 1,058,659 3.95% 45.7% 118,341 7.98% 1,177,000 4.4% 45.1%
2,316,380 3.99% 100.0% 293,027 8.10% 2,609,407 4.5% 100.0%
• ~40% of BKD debt is floating rate
– Most is capped, some swapped
Interest Coverage
Memo Items: Interest expense $159.6 $149.9 $134.5 $209.2 $409.3 $409.3 $409.3 $409.3
Capital expenditures 160.1 208.4 257.5 243.6 344.8 361.1 378.9 398.3
EBIT / Interest expense 0.7x 0.7x 1.1x 1.1x 1.4x 1.6x 1.7x 1.7x
EBITDA / Interest expense 2.3x 2.3x 3.1x 2.7x 2.4x 2.7x 2.9x 3.0x
EBITDA - Capital expenditures / Interest expense 1.3x 1.0x 1.2x 1.5x 1.6x 1.8x 2.0x 2.0x
Capitalization*
Total debt $2,536.1 $2,758.4 $2,723.4 $6,674.1 $6,655.1 $6,655.1 $6,655.1 $6,655.1
Total stockholders' equity 1,040.2 1,002.7 1,040.0 2,638.5 2,850.1 3,114.0 3,391.8 3,650.8
Total capitalization 3,576.3 3,761.1 3,763.4 9,312.6 9,505.3 9,769.2 10,046.9 10,306.0
Return on Invested Capital 3.0% 2.7% 3.9% 2.4% 6.0% 6.3% 6.3% 5.9%
Brookdale – Debt Schedule – includes capital leases
Leverage*
Total debt / Total capitalization 0.7x 0.7x 0.7x 0.7x 0.7x 0.7x 0.7x 0.6x
Total debt / EBITDA 6.8x 7.8x 6.6x 12.0x 6.7x 6.0x 5.6x 5.5x
*all recorded at book value

22. •Management synergy targets are on the conservative side and could exceed the guided $.50
•Program Max 2.0
–Longer time horizon but may produce better CFFO results than forecasted
•Demand continues to outstrip supply
•Brand awareness campaign yields better than expected results
•Any hint that management may return to paying a dividend in the future
Catalysts Adjusted EBITDA557.9991.71,101.01,186.31,208.9Less: Recurring capital expenditures, net(45.4)(72.0)(76.0)(80.0)(84.0) Less: Interest expense, net(209.2)(409.3)(409.3)(409.3)(409.3) Less: Lease financing debt amortization with fair market value or no purchase options(15.8)(15.8)(15.8)(15.8)(15.8) Less: Distributions from unconsolidated ventures from cumulative share of net earnings0.00.00.00.00.0Add: Cash from Facility Operations from unconsolidated ventures9.010.014.018.020.0Less: Other0.50.50.50.50.5Less taxes(2.4)8.9(28.6)(78.6)(96.5) Reported CFFO294.5514.0585.8621.1623.9Add: integration and transaction-related costs24.013.013.013.013.0Adjusted CFFO318.5527.0598.8634.1636.9Adjusted CFFO/share$2.33$3.05$3.43$3.63$3.65

23. • Integration of ESC
– Potential cultural fit for the new ESC
employees
– Largest integration BKD has
undertaken
– ESC DOJ investigation
Risks
• Reduction in occupancy
– Low in 2009 was 86.2% for BKD
• Significant increase in new
construction/capacity
• Increased competition and
reduction in pricing power
• Significant rise in interest rates
Supply-Demand in Top 10 Majority Assisted Living Markets
vs. Senior Living Operators’ Share

24. 0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
7/22/2010
7/22/2011
7/22/2012
7/22/2013
7/22/2014
7/22/2015
Stock Price
BKD Risk Reward
Close
Price Target
$65.00 (+86%)
$25.00 (-28.0%)
$53.00 (+51.4%)

25. Summary
•Merger Synergies
–Cost savings
–Revenue growth
•Industry Leader
•Strong Sustained Growth in Customer Demographic
•Differentiator – Continuum of Care
•Durable Competitive Advantage
•Occupancy Growth
–Program Max 2.0
•Moderate Capacity Growth
•Resilient Pricing Power
•Some of the Parts (SOTP)

26. Appendix

27. Income Statement Income Statement for Brookdale Senior Living IncDollars in millions, except per share2013 - 2018Historical Year Ending December 31,Projected Year Ending December 31,CAGR20112012201320142015201620172018Sales Retirement Centers$473.8$503.9$526.3$542.1$569.2$597.6$627.5$658.9 Assisted Living964.61,013.31,051.91,451.62,903.23,019.33,146.13,284.5 CCRCs -rental (combined with enry fee before Q1'2011)364.1385.5397.0416.8479.3498.5518.5539.2 CCRCs - entry fee283.5287.0297.8303.760.765.674.187.5 ISC and other Ancillary services205.8224.5242.2314.8510.0561.0617.1678.8Resident Fees2,291.82,414.32,515.03,029.04,522.44,742.04,983.35,248.915.9% Management Fees13.631.331.139.864.567.169.872.6Reimbursed Costs incured on behalf of managed communities152.6325.0345.8442.6717.1745.8775.6806.618.5% Total Revenue$2,457.9$2,770.6$2,892.0$3,511.5$5,304.0$5,554.9$5,828.6$6,128.116.2% Cost of sales Retirement centers275.4298.3304.0309.0313.0328.1338.9355.1 Assisted Living624.7652.2662.2914.51,727.41,781.41,840.51,970.7 CCRCs - rental (combined with entry fee before Q1'2011)247.2279.4287.9302.2335.5344.0352.6361.3 CCRCs - entry fee213.5224.3221.4228.743.146.652.662.1 ISC & other ancillary services147.8176.7196.4258.1397.8415.1456.6502.3Facility operating expense1,508.61,630.91,671.92,012.52,816.92,915.13,041.13,251.5General & administrative expense148.3178.8184.5214.2291.7300.0308.9318.7Facility lease expense/Rent274.9284.0276.7305.5403.1422.2443.0465.7Depreciation & Amortization268.5252.3268.8328.8434.4454.9477.4501.9Asset Impairment16.927.712.90.00.00.00.00.0Loss (gain) on acquisition(2.0)0.60.00.00.00.00.00.0Costs incurred on behalf of managed communities152.6325.0345.8421.4800.6816.6849.3883.312.0% Facility Lease termination expense0.0(11.6)0.00.00.00.00.00.0Other expenses0.00.00.00.00.00.00.00.0Total operating expenses$2,367.7$2,687.8$2,760.7$3,282.4$4,746.7$4,908.9$5,119.7$5,421.114.4% Income from Operations90.282.8131.3229.1557.3646.0709.0707.0General & administrative expense148.3178.8184.5214.2291.7300.0308.9318.7Costs incurred on behalf of managed communities152.6325.0345.8421.4800.6816.6849.3883.3EBITDAR648.5635.8689.7863.41,394.81,523.11,629.31,674.6Facility lease expense/Rent274.9284.0276.7305.5403.1422.2443.0465.7EBITDA373.6351.8412.9557.9991.71,101.01,186.31,208.924.0% Depreciation & Amortization268.5252.3268.8328.8434.4454.9477.4501.9EBIT 105.199.5144.2229.1557.3646.0709.0707.037.4% Interest expense (5)159.6149.9134.5209.2409.3409.3409.3409.3Interest (income)(3.5)(4.0)(1.3)(0.3)(0.7)(1.8)(2.7)(3.8) Pretax Income(65.8)(63.1)(1.8)20.2148.7238.5302.4301.5Income taxes (1) (2) (3) (4) (5) (6)(2.3)(2.0)(1.8)2.4(8.9)28.678.696.5Net Income($68.1)($65.2)($3.6)$17.8$157.6$209.9$223.8$205.0Diluted weighted average shares (in millions)121.160121.991123.671136.945172.945174.685174.685174.6857.2% Earnings Per Share($0.56)($0.53)($0.03)$0.13$0.91$1.20$1.28$1.172014 Consensus EPS $.17

28. Income Statement Assumptions Ratios & AssumptionsSales growth rate12.7%4.4%21.4%51.0%4.7%4.9%5.1% Gross margin61.4%58.9%57.8%57.3%53.1%52.5%52.2%53.1% SG&A expenses (as a % of sales)6.0%6.5%6.4%6.0%6.0%6.0%6.0%6.0% Other operating (income) / expense (amount)$648.5$635.8$689.7$863.4$1,394.8$1,523.1$1,629.3$1,674.6Effective tax rate3.5%3.2%96.1%12.0%(6.0%)12.0%26.0%32.0% Income statement ratios (as a % of reveune) Retirement Centers (as a % of retirement center revenue)58.1%59.2%57.8%57.0%55.0%54.9%54.0%53.9% Assisted Living (as a % of assisted living revenue)64.8%64.4%63.0%63.0%59.5%59.0%58.5%60.0% CCRCs - rental (as a % of CCRCs-rental revenue)67.9%72.5%72.5%72.5%70.0%69.0%68.0%67.0% CCRCs - entry fee (as a % of CCRCs-entyr fee revnue)75.3%78.1%74.3%75.3%71.0%71.0%71.0%71.0% ISC and other ancillary services (as a % of ISC - revenue)71.8%78.7%81.1%82.0%78.0%74.0%74.0%74.0% Facility operating expense (as % of revenue)61.4%58.9%57.8%57.3%53.1%52.5%52.2%53.1% General and admisistrative expense (as a % of revenue)6.0%6.5%6.4%6.1%5.5%5.4%5.3%5.2% Facility lease expense (as a % of revenue)11.2%10.3%9.6%8.7%7.6%7.6%7.6%7.6% Depreciation and amortization ( as % of reveune)10.9%9.1%9.3%9.4%8.2%8.2%8.2%8.2% (Provision) benefit for income taxes3.5%3.2%96.1%7.5%7.5%7.5%7.5%7.5% Ratios (as a % of sales) Retirement Centers19.3%18.2%18.2%15.4%10.7%10.8%10.8%10.8% YOY Growth3.0%5.0%5.0%5.0%5.0% Assisted Living39.2%36.6%36.4%41.3%54.7%54.4%54.0%53.6% YOY Growth38.0%100.0%4.0%4.2%4.4% CCRCs -rental (combined with enry fee before Q1'2011)14.8%13.9%13.7%11.9%9.0%9.0%8.9%8.8% YOY Growth5.0%15.0%4.0%4.0%4.0% CCRCs - entry fee11.5%10.4%10.3%8.6%1.1%1.2%1.3%1.4% YOY Growth2.0%(80.0%)8.0%13.0%18.0% ISC and other Ancillary services8.4%8.1%8.4%9.0%9.6%10.1%10.6%11.1% YOY Growth30.0%62.0%10.0%10.0%10.0% Resident Fees93.2%87.1%87.0%86.3%85.3%85.4%85.5%85.7% YOY Growth28.0%62.0%4.0%4.0%4.0% Management Fees0.6%1.1%1.1%1.1%1.2%1.2%1.2%1.2% YOY Growth28.0%62.0%4.0%4.0%4.0% Reimbursed Costs incured on behalf of managed communities6.2%11.7%12.0%12.6%13.5%13.4%13.3%13.2% YOY Growth28.0%62.0%4.0%4.0%4.0%

29. Balance Sheet Balance Sheet for Brookdale Senior Living IncDollars in millions, except per shareHistorical Year Ending December 31,Projected Year Ending December 31,20112012201320142015201620172018Cash$76.7$112.3$96.7$50.0$518.1$896.5$1,302.3$1,724.3Accounts receivables, net98.7100.4104.3136.6206.3216.0226.7238.3Inventories0.00.00.00.00.00.00.00.0Other current assets105.496.393.987.8132.6138.9145.7153.2Total Current Assets:280.9309.0294.9274.3856.91,251.41,674.72,115.8PP&E, net3,694.13,880.03,895.59,309.69,220.09,126.19,027.68,924.0Ristricted cash & investments84.762.857.657.657.657.657.657.6Indefinite life intangibles0.00.00.08.524.630.331.614.9Goodwill263.7269.5268.3442.0442.0442.0442.0442.0Other long-term assets142.7144.7221.5221.5221.5221.5221.5221.5Total Assets:$4,466.1$4,666.0$4,737.8$10,313.6$10,822.6$11,128.8$11,455.0$11,775.9Accounts payable$54.1$43.2$65.8$67.1$93.9$97.2$101.4$108.4Accrued liabilities183.6200.9209.5221.4309.9320.7334.5357.7Other current liabilities7.76.55.20.0201.1229.4259.7291.4Refund. Entry Fees & Deferred Rev.327.8361.4388.4407.4407.4407.4407.4407.4Total Current Liabilities:573.3612.0668.9695.91,012.31,054.61,103.01,164.9Long-term debt deferred entry fee revenue72.579.086.919.00.00.00.00.0Long-term debt 2,463.62,679.42,636.66,655.16,655.16,655.16,655.16,655.1Other long-term liabilities316.4292.9305.5305.0305.0305.0305.0305.0Total Liabilities:3,425.93,663.33,697.87,675.07,972.58,014.88,063.28,125.0Total equity1,040.21,002.71,040.02,638.52,850.13,114.03,391.83,650.8Total Liabilities and Equity:$4,466.1$4,666.0$4,737.8$10,313.6$10,822.6$11,128.8$11,455.0$11,775.9Parity check (A = L+E)0.0000.0000.0000.0000.0000.0000.0000.000

30. Cash Flow Projected Cash Flow Statement for Brookdale Senior Living IncDollars in millions, except per shareProjected Year Ending December 31,20142015201620172018Operating ActivitiesNet Income$17.8$157.6$209.9$223.8$205.0Stock-based compensation expense36.154.054.054.054.0Depreciation328.8434.4454.9477.4501.9Amortization0.00.00.00.00.0(Increase)/decrease in working capital56.3185.820.729.559.4(Increase)/decrease in other long-term assets and liabilities(174.1)0.00.00.00.0Cash Flow from Operating Activities:264.9831.8739.5784.7820.3Investing ActivitiesCapital expenditures(243.6)(344.8)(361.1)(378.9)(398.3) Acquisition(4,018.6)0.00.00.00.0Cash Flow from Investing Activities:(4,262.2)(344.8)(361.1)(378.9)(398.3) CASH FLOW AVAILABLE FOR FINANCING ACTIVITIES(3,997.4)487.0378.4405.8422.0Financing ActivitiesIssuance / (repayment) of revolver(67.9)(19.0)0.00.00.0Issuance of long-term debt4,018.60.00.00.00.0(Repayment) of long-term debt0.00.00.00.00.0Repurchase of equity0.00.00.00.00.0Dividends0.00.00.00.00.0Option proceeds0.00.00.00.00.0Cash Flow from Financing Activities:3,950.7(19.0)0.00.00.0Net Change in Cash(46.7)468.1378.4405.8422.0Beginning cash balance96.750.0518.1896.51,302.3Ending cash balance$50.0$518.1$896.5$1,302.3$1,724.3

31. NWC Working Capital Schedule for Brookdale Senior Living IncDollars in millions, except per shareHistorical Year Ending December 31,Projected Year Ending December 31,20112012201320142015201620172018Sales$2,457.9$2,770.6$2,892.0$3,511.5$5,304.0$5,554.9$5,828.6$6,128.1Cost of sales 1,508.61,630.91,671.92,012.52,816.92,915.13,041.13,251.5Working Capital BalancesAccounts receivables, net$98.7$100.4$104.3$136.6$206.3$216.0$226.7$238.3Inventories0.00.00.00.00.00.00.00.0Other current assets105.496.393.987.8132.6138.9145.7153.2Total Non-Cash Current Assets:$204.1$196.7$198.2$224.3$338.9$354.9$372.4$391.5Accounts payable$54.1$43.2$65.8$67.1$93.9$97.2$101.4$108.4Accrued liabilities183.6200.9209.5221.4309.9320.7334.5357.7Other current liabilities335.5367.9393.6462.9647.9670.5699.5747.8Total Non-Debt Current Liabilities:$573.3$612.0$668.9$751.3$1,051.6$1,088.3$1,135.4$1,213.9NET WORKING CAPITAL / (DEFICIT)($369.2)($415.3)($470.7)($527.0)($712.8)($733.4)($763.0)($822.4) (Increase)/Decrease in Working Capital$46.1$55.5$56.3$185.8$20.7$29.5$59.4Ratios and AssumptionsNumbers of days in the period360 cell is named "Days" Accounts receivables, net (collection period in days)14.513.013.014.014.014.014.014.0Inventories (days outstanding)0.00.00.00.00.00.00.00.0Other current assets (as % of sales)4.3%3.5%3.2%2.5%2.5%2.5%2.5%2.5% Accounts payable (days outstanding)12.99.514.212.012.012.012.012.0Accrued liabilities (as % of cost of sales)12.2%12.3%12.5%11.0%11.0%11.0%11.0%11.0% Other current liabilities (as % of cost of sales)22.2%22.6%23.5%23.0%23.0%23.0%23.0%23.0%

32. Brookdale Senior Living Inc
Dollars in millions, except per share
Historical Year Ending December 31, Projected Year Ending December 31, 2013 - 2018
2011 2012 2013 2014 2015 2016 2017 2018 CAGR
Profitability Ratios
Sales $2,457.9 $2,770.6 $2,892.0 $3,511.5 $5,304.0 $5,554.9 $5,828.6 $6,128.1 16.2%
% growth 12.7% 4.4% 21.4% 51.0% 4.7% 4.9% 5.1%
Gross profit $949.3 $1,139.6 $1,220.0 $1,499.0 $2,487.1 $2,639.7 $2,787.5 $2,876.5 18.7%
% margin 38.6% 41.1% 42.2% 42.7% 46.9% 47.5% 47.8% 46.9%
EBITDA $373.6 $351.8 $412.9 $557.9 $991.7 $1,101.0 $1,186.3 $1,208.9 24.0%
% margin 15.2% 12.7% 14.3% 15.9% 18.7% 19.8% 20.4% 19.7%
% growth (5.8%) 17.4% 35.1% 77.8% 11.0% 7.8% 1.9%
EBIT $105.1 $99.5 $144.2 $229.1 $557.3 $646.0 $709.0 $707.0 37.4%
% margin 4.3% 3.6% 5.0% 6.5% 10.5% 11.6% 12.2% 11.5%
% growth (5.3%) 44.9% 58.9% 143.3% 15.9% 9.7% (0.3%)
Net income ($68.1) ($65.2) ($3.6) $17.8 $157.6 $209.9 $223.8 $205.0 #NUM!
% margin (2.8%) (2.4%) (0.1%) 0.5% 3.0% 3.8% 3.8% 3.3%
% growth (4.4%) (94.5%) (596.4%) 785.9% 33.2% 6.6% (8.4%)
Interest Coverage
Memo Items: Interest expense $159.6 $149.9 $134.5 $209.2 $409.3 $409.3 $409.3 $409.3
Capital expenditures 160.1 208.4 257.5 243.6 344.8 361.1 378.9 398.3
EBIT / Interest expense 0.7x 0.7x 1.1x 1.1x 1.4x 1.6x 1.7x 1.7x
EBITDA / Interest expense 2.3x 2.3x 3.1x 2.7x 2.4x 2.7x 2.9x 3.0x
EBITDA - Capital expenditures / Interest expense 1.3x 1.0x 1.2x 1.5x 1.6x 1.8x 2.0x 2.0x
Capitalization*
Total debt $2,536.1 $2,758.4 $2,723.4 $6,674.1 $6,655.1 $6,655.1 $6,655.1 $6,655.1
Total stockholders' equity 1,040.2 1,002.7 1,040.0 2,638.5 2,850.1 3,114.0 3,391.8 3,650.8
Total capitalization 3,576.3 3,761.1 3,763.4 9,312.6 9,505.3 9,769.2 10,046.9 10,306.0
Return on Invested Capital 3.0% 2.7% 3.9% 2.4% 6.0% 6.3% 6.3% 5.9%
Profitability Ratio & Interest Coverage

33. Liquidity & DuPont Analysis
LiquidityMemo Items:Cash$76.7$112.3$96.7$50.0$518.1$896.5$1,302.3$1,724.3Accounts receivable98.7100.4104.3136.6206.3216.0226.7238.3Quick assets175.4212.7201.0186.6724.31,112.51,529.01,962.6Inventory$0.0$0.0$0.0$0.0$0.0$0.0$0.0$0.0Current assets280.9309.0294.9274.3856.91,251.41,674.72,115.8PP&E, net$3,694.1$3,880.0$3,895.5$9,309.6$9,220.0$9,126.1$9,027.6$8,924.0Total assets4,466.14,666.04,737.810,313.610,822.611,128.811,455.011,775.9Accounts payable$54.1$43.2$65.8$67.1$93.9$97.2$101.4$108.4Current liabilities573.3612.0668.9695.91,012.31,054.61,103.01,164.9Working capital($292.4)($302.9)($374.0)($421.6)($155.4)$196.7$571.7$951.0Current ratio0.5x0.5x0.4x0.4x0.8x1.2x1.5x1.8xQuick ratio0.3x0.3x0.3x0.3x0.7x1.1x1.4x1.7xActivityAccounts receivable (collection period)14.513.013.014.014.014.014.014.0Inventories (days outstanding)0.00.00.00.00.00.00.00.0Accounts payable (days outstanding)12.99.514.212.012.012.012.012.0Net fixed asset turnover0.7x0.7x0.7x0.4x0.6x0.6x0.6x0.7xAsset turnover0.6x0.6x0.6x0.3x0.5x0.5x0.5x0.5xDuPont AnalysisReturn on sales(2.8%)(2.4%)(0.1%)0.5%3.0%3.8%3.8%3.3% Asset turnover0.6x0.6x0.6x0.3x0.5x0.5x0.5x0.5xAsset leverage4.3x4.7x4.6x3.9x3.8x3.6x3.4x3.2xReturn on equity(6.6%)(6.5%)(0.3%)0.7%5.5%6.7%6.6%5.6%