2014 Was a Transformational Year for Brookdale That Will Unlock
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2 0 1 4 A NNU A L R EPO R T Brookdale Senior Living 111 Westwood Place, Suite 400 Brentwood, TN 37027 615.221.2250 brookdale.com 2014 Annual Report Letter to shareholders 2014 was a transformational year for Brookdale that will unlock tremendous value for shareholders and benefit our residents and their families in new and profound ways. Our merger with Emeritus effectively doubled our size, creating the only coast-to-coast, full-spectrum senior living solutions company in America. Brookdale is now the largest senior living solutions provider in the country operating the only nationwide network of senior living communities with fully integrated ancillary services across the continuum of care. However, let me be clear: our goal is not to be the biggest, but to be the best. ( continued on page 1 ) Brookdale 2014AR Design2 covers .25" spine.indd 1 5/10/15 1:24 PM Board of Directors ABOUT BROOKDALE SENIOR LIVING Brookdale Senior Living Inc. is the leading Jeffrey R. Leeds, Chairman 1, 2, 4 Granger Cobb, Director James R. Seward, Director 1, 3 operator of senior living communities Former Chief Financial Officer, Former Chief Executive Officer, Private Investor throughout the United States. The company is GreenPoint Financial Corporation Emeritus Corporation T. Andrew Smith, Director committed to providing senior living solutions Frank M. Bumstead, Director 2, 4 Mark J. Parrell, Director 3 Chief Executive Officer, primarily within properties that are designed, Chairman and Principal Shareholder, Executive Vice President and Brookdale Senior Living Inc. Flood, Bumstead, McCready & Chief Financial Officer, purpose-built and operated to provide 3 McCarthy, Inc. Equity Residential Lee S. Wielansky, Director the highest-quality service, care and living 1,150 Chairman and CEO, COMMUNITIES 3 accommodations for residents. Currently, The Honorable Jackie M. Clegg, William G. Petty, Jr., Director Midland Development Group, Inc. Director 1, 2, 4 Partner, Brookdale operates independent living, Managing Partner, Beecken Petty O’Keefe & Company (1) Audit Committee assisted living, and dementia-care communities Clegg International Consultants, LLC (2) Compensation Committee (3) Investment Committee and continuing care retirement centers, with (4) Nominating and Corporate Governance Committee approximately 1,150 communities in 47 states and the ability to serve approximately 111,000 residents. Through its ancillary services program, the company also offers a range of Executive Officers outpatient therapy, home health, personalized living and hospice services. T. Andrew Smith Bryan D. Richardson Kristin A. Ferge Chief Executive Officer Executive Vice President & Chief Executive Vice President, Chief Administrative Officer Accounting Officer and Treasurer Mark W. Ohlendorf President & Chief Financial Officer Glenn O. Maul George T. Hicks Executive Vice President Executive Vice President – Finance Gregory B. Richard & Chief People Officer Executive Vice President & Chief H. Todd Kaestner 47STATES Operating Officer Tricia A. Conahan Executive Vice President – Executive Vice President Corporate Development 111,000 & Chief Marketing Officer RESIDENTS Corporate Data Corporate Office Stock Listing 2015 Annual Meeting 111 Westwood Place, Suite 400 NYSE: BKD June 30, 2015 • 10:00 a.m. CDT Brentwood, TN 37027 Investor Relations Contact Brookdale Senior Living 615.221.2250 Ross Roadman 111 Westwood Place www.brookdale.com Brookdale Senior Living Brentwood, TN 37027 111 Westwood Place, Suite 400 615.221.2250 Transfer Agent Brentwood, TN 37027 American Stock Transfer & 615.564.8104 Governance Trust Company Brookdale’s corporate governance 59 Maiden Lane, Plaza Level Independent Auditors guidelines, code of business conduct New York, NY 10038 Ernst & Young LLP and ethics, the charters of the principal 82,000 800.937.5449 155 N. Wacker Drive board committees and other governance ASSOCIATES Chicago, IL 60606 information can be accessed through the Investor Relations portion of our website, www.brookdale.com. Brookdale 2014AR Design2 covers .25" spine.indd 2 5/10/15 1:24 PM ( continued from cover ) Brookdale is in the business of helping people age well. Our mission remains constant – Enriching the lives of those we serve with compassion, respect, excellence and integrity – and we strive every day to provide the highest level of quality service. That focus on serving our residents and their families is always at the core of what we do, and it underscores every decision we make. By definition we meet our residents at a extended family. Each and every day is an transitional time in their lives. The decisions we opportunity for our associates to connect with help them make about aging are often wrapped our residents and their families in a profound up in emotion and almost always involve family and personal way. Serving our residents and members, who are dealing with their own their families is our number one priority. emotions. That’s why Brookdale views both residents and their family members as our customers. Photo by Paige Jackson Brookdale helps people make good choices by offering residents and their families the largest range of senior care solutions with the largest network of senior living communities to meet their ever-changing needs. Our help is based on our knowledge and concern for the people we serve. Our business is all about people. We put our residents first because Brookdale is literally Brookdale Chief Executive Officer T. Andrew Smith visits residents their new home, and we become a part of their at Brookdale Green Hills Cumberland in Nashville, Tennessee. 1 % of our Residents are 53 in Assisted Living 2 We serve the nation’s aging population against Three strategic pillars set the backdrop of a rapidly growing market Brookdale apart: driven by the inevitability of demographic change. The senior population is growing three Leveraging the Advantages of Scale – times faster than the general population in We believe the advantages of scale will America. By 2030, the number of seniors is increasingly differentiate Brookdale and support projected to increase from six percent to nine our growth. Through the merger with Emeritus, percent of the population and it is anticipated we added more than 500 new communities to approximately 70% of those seniors will need our network and expanded our operations to an average of three years of some form of senior encompass 330 markets in 47 states. More than care. At the same time, the number of potential 10 million Americans over the age of 75 live family caregivers is dropping rapidly as a result within ten miles of a Brookdale community. of long-term trends in family size, work patterns Just as significant, over half of their adult and geographic dispersion. children also live within that same ten-mile radius. Leveraging the benefits of our expanded These demographic trends signal large and coverage and density, we are continuing our sustained growth in the size of the senior living initiatives to create the only national senior market in America, which is already $55 billion living brand, with the goal of making Brookdale annually. Yet, this is a highly fragmented synonymous with high quality, safe and trusted industry. Brookdale is the largest provider by senior living. several multiples, but we represent only 10% of the market. As such, we are well positioned to maintain and expand our share of the market as it continues to grow at an accelerating rate. 3xBrookdale is three times the size of the next largest senior housing operator Congratulations to 21 Brookdale skilled nursing communities that received the highest possible overall rating of five stars from U.S. News & World Report in its seventh annual Best Nursing Homes review. U.S. News awarded communities that received the highest rating in Feb. 2015 from Centers for Medicare and Medicaid Services (CMS). US News and World Report and the Best Rankings design and logo are trademarks or registered trademarks of US News & World Report LP in the United States and other countries. 3 By 2050, there could be 88.5 million Americans age 65+. That’s more than twice as many as in 2010. We are getting ready for more residents. Our merger with Emeritus also accelerates Within our resident population alone, the expansion of our unique ancillary services we estimate there is an aggregate annual platform. We expect to initiate much of expenditure on healthcare services of more than the rollout of our home health, outpatient $4.5 billion. While we earn a small portion of therapy and hospice services within Emeritus these expenditures through our current ancillary communities during 2015. The addition of services platform, we are well positioned to Nurse on Call to Brookdale Healthcare Services develop innovative new products and services also immediately increased our presence beyond to address our residents’ healthcare and other the walls of our communities and creates a needs. For example, we see opportunities to longer-term opportunity for us to expand our add vision, audiology, pharmacy, dentistry and brand into the general community in markets durable medical equipment services to our where we have concentration. ancillary platform. We are actively exploring and piloting differentiated Medicare Advantage Putting Our Knowledge and Experience to plans to serve our customers. Outside of Work Creating New Innovations in Care – healthcare, we see meaningful opportunities to As a result of our size and scale, we have more create partnerships to provide needed financial talent under one brand than any other provider. services to our customers, such as insurance, This gives Brookdale a unique opportunity to banking and wealth management. transform the senior living industry through innovation to the services we deliver and where Also, in order to leverage our geographical we deliver them. scale, we intend to package many of these 4 By 2050, there could be 88.5 million Americans age 65+. That’s more than twice as many as in 2010. We are getting ready for more residents. services in offerings outside our campuses and While there is much still to be done, we made into local communities similar to our existing significant progress in 2014.