Sunrise Provides Status Report on Special Independent Committee Investigation; Provides Updates on Management's Internal Control Review Efforts and on Legal P...(kely to be material. The Company has ret...),Health

Date:9/28/2007

kely to be material. The Company has retained Navigant Consulting, Inc. to assist with stock compensation matters. Once the Company has quantified such amount and E&Y has reviewed the Company's calculation, the Company will promptly report such amount. The Company is also reviewing whether there are any tax impacts with respect to the accounting errors relating to stock options.

Review of Two Significant Categories of Real Estate -Related Accounting Errors. The Special Independent Committee also has concluded its fact finding on:

-- the accounting for the effect of certain Sunrise guarantees and

commitments on timing of sale accounting and recognition of income upon

sale of real estate; and

-- the accounting for allocation of profits and losses in those ventures

in which Sunrise's partners received a preference on cash flow.

Errors in the first category resulted from erroneous judgments made by the Company regarding the proper application of GAAP to account for sales of real estate where Sunrise had continuing involvement in the real estate in the form of guarantees and preferences to partners. The nature of certain guarantees and their duration and the recognition of the sales and/or income from the sales of the property were not concealed from review by the external auditors at the time the accounting judgments were made. Based on the totality of the evidence available to the Special Independent Committee, the Special Independent Committee concluded that this large group of errors did not result from an intention to reach an inappropriate accounting result and that the erroneous accounting judgments in this category were not known to be incorrect at the time they were made.

Errors in the second category resulted from failure by the Company to understand relevant accounting guidance regarding accounting for preferences in distributions of income to joint venture partners. The preferences were contained in wri
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SOURCE Sunrise Senior Living, Inc. Copyright©2007 PR Newswire. All rights reserved

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