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Brookdale Senior Living Inc. Reports Operating Results (10-K)

February 28, 2012 | About:
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10qk

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Brookdale Senior Living Inc. (BKD) filed Annual Report for the period ended 2011-12-31.

Brookdale Senr has a market cap of $2.29 billion; its shares were traded at around $18.79 with and P/S ratio of 0.9. Brookdale Senr had an annual average earning growth of 12.3% over the past 5 years.

Highlight of Business Operations:

Our revenues for the year ended December 31, 2011 increased to approximately $2.5 billion, an increase of $177.4 million, or 7.8%, over our revenues for the year ended December 31, 2010. The increase in revenues in the current year was primarily a result of an increase in the average monthly revenue per unit compared to the prior year, including growing revenues from our ancillary services programs and the inclusion of revenue from recent acquisitions. Our weighted average occupancy for the year ended December 31, 2011 and 2010 was 87.3% and 87.1%, respectively. Beginning with the first quarter of 2010, occupancy rates and average monthly revenue per unit are being reported using the average unit methodology. Occupancy rates and average monthly revenue per unit for all prior periods have been recast to conform to the current presentation.

Refundable entrance fee sales for the years ended December 31, 2011 and 2010 include amounts received from residents participating in the MyChoice program, which allows new and existing residents the option to pay additional refundable entrance fee amounts in return for a reduced monthly service fee. MyChoice amounts received from residents totaled $1.1 million, $1.6 million, $2.3 million and $4.0 million in the first, second, third and fourth quarters of 2011, respectively, and $0.1 million, $0.2 million, $6.5 million and $3.8 million in the first, second, third and fourth quarters of 2010, respectively.

General and administrative expense increased $16.6 million, or 12.6%, primarily as a result of increased salaries and wages, payroll taxes, employee benefits, travel expenses and integration and transaction-related costs, partially offset by a decrease in corporate expense allocations. General and administrative expense as a percentage of total revenue, including revenue generated by the communities we manage and excluding non-cash stock-based compensation expense and integration and transaction-related costs, was 4.4% and 4.7% for the years ended December 31, 2011 and 2010, respectively, calculated as follows (dollars in thousands):

Refundable entrance fee sales for the years ended December 31, 2010 and 2009 include amounts received from residents participating in the MyChoice program, which allows new and existing residents the option to pay additional refundable entrance fee amounts in return for a reduced monthly service fee. MyChoice amounts received from residents totaled $0.1 million, $0.2 million, $6.5 million and $3.8 million in the first, second, third and fourth quarters of 2010, respectively, and $0.6 million, $0.1 million and $0.4 million in the first, third and fourth quarters of 2009, respectively. My Choice amounts for the second quarter of 2009 were not material.

At December 31, 2011, we had $340.1 million of negative working capital, which includes the classification of $242.6 million of refundable entrance fees and $7.7 million in tenant deposits as current liabilities. Based upon our historical operating experience, we anticipate that only 9.0% to 12.0% of those entrance fee liabilities will actually come due, and be required to be settled in cash, during the next 12 months. We expect that any entrance fee liabilities due within the next 12 months will be fully offset by the proceeds generated by subsequent entrance fee sales. Entrance fee sales, net of refunds paid, provided $42.2 million of cash for the year ended December 31, 2011. This includes $12.6 million of first generation entrance fee receipts which represent initial entrance fees received from the sale of units at a recently opened entrance fee CCRC.

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