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Sunrise Reports Financial Results for Third Quarter 2008
Date:11/7/2008

MCLEAN, Va., Nov. 7 /PRNewswire-FirstCall/ -- Sunrise Senior Living, Inc. (NYSE: SRZ) today reported financial results and operating data for third quarter 2008. Sunrise will host a conference call and webcast Friday, November 7, 2008 at 9:00 a.m. ET.

"This quarter was very difficult as we incurred a significant net loss," said Mark Ordan, Sunrise's chief executive officer. "Our team has been fully committed to grinding down cash outflows by reducing overhead, slashing development-related spending and selling or repositioning assets unsuited to the combination of today's capital market environment and our financial condition. We do not expect these efforts to distract us from our role as managers of senior living's leading brand portfolio and organization and we fully intend to become a leaner, stronger, growing company."

Financial Results for Third Quarter 2008

The Company reported revenues of $436.0 million for the third quarter of 2008 as compared to $429.5 million for the third quarter of 2007. Net loss for the third quarter 2008 was $68.7 million, or ($1.36) per fully diluted share, as compared to net income of $38.2 million, or $0.74 per fully diluted share, for the third quarter of 2007. The loss before income taxes and extraordinary loss for the third quarter was $90.1 million as compared to income before income taxes for the third quarter of 2007 of $55.9 million. Included in the (loss) income before income taxes and extraordinary loss for the three months ended September 30, 2008 and 2007 are the following large and/or unusual items:

Three Months Ended

September 30,

(In millions) 2008 2007

Severance costs $ (7.2) $ -

Accounting Restatement, Special Independent

Committee inquiry, SEC investigation and

pending stockholder litigation (5.1) (12.0)

Impairment of long-lived assets - (3.6)

Write-off of abandoned development projects (47.5) (15.6)

Gain on sale and development of real estate and

equity interests 4.7 52.7

Gain on sale of seven communities within one

UK venture - 82.9

Impairment loss on four communities in a

Fountains venture (7.4) -

Recapitalizations 0.2 -

-------- --------

$ (62.3) $ 104.4

For additional information regarding the Company's results of operations for the third quarter, please refer to the Company's third quarter 2008 10-Q filed today with the SEC.

Operating Data for Third-Quarter 2008

-- Revenue under management for the third quarter 2008 increased 5.0 percent to $639.2 million as compared to $608.8 million for the prior-year third quarter. The measure "revenue under management" is derived by combining the revenues of Sunrise's consolidated communities, communities owned in unconsolidated ventures and communities owned by third parties that are managed by Sunrise (excluding communities managed by Greystone, the Company's developer and professional services provider for non-profit continuing care retirement communities). This increase relates to increased occupancy for communities in lease-up as well as average daily rate growth for stabilized communities.

-- Same-community revenues for the third quarter 2008 increased 4.9 percent to $350.3 million as compared to $333.8 million for the prior-year third quarter. The increase relates to growth in occupancy and average daily rates. Sunrise's same-community portfolio consists of communities in which Sunrise has an ownership interest (i.e., consolidated communities and unconsolidated venture communities) that were stabilized in both the third quarter of 2008 and 2007, which Sunrise defines as being open for 12 months or having achieved 95 percent occupancy, whichever occurs first.

-- Average daily rate for the same-community portfolio for the third quarter 2008 increased 3.8 percent to $165.21 as compared to $159.10 for the prior-year third quarter. The Company's average daily rate includes room rates, extended care fees and community fees. Rate growth was largely due to room rate increases for new and existing residents as well as increases in extended care rate and utilization.

-- During the third quarter of 2008, Sunrise opened three new communities and began construction on one new community. As of September 30, 2008, the Company had 34 communities under construction, with capacity for an additional 4,300 residents. Five of these communities under construction are projects being developed by Greystone.

-- As of September 30, 2008, Sunrise operated 448 communities located in the United States, Canada, the United Kingdom and Germany, with resident capacity for approximately 55,000 residents.

-- The same-community average occupancy rate for the third quarter of 2008 was 89.9 percent as compared to 89.1 percent for the prior-year third quarter. Growth in occupancy was driven by both the consolidated and venture portfolios. Across both portfolios, assisted living and memory care occupancy increased, offset in part by a decline in independent living. During the third quarter of 2008, seven European communities with lower than average occupancy were included in the same-community pool for the first time. U.S.-only occupancy for the same store portfolio was 90.9 percent, up from 90.6 percent in the prior-year third quarter.

-- Same-community operating expenses for the third quarter of 2008 increased 3.1 percent to $231.6 million, as compared to $224.6 million for the prior-year third quarter. Included in the expense are credits due to favorable loss experience related to the Company's insurance programs of $10.2 million and $3.6 million for the third quarter 2008 and 2007, respectively. Same-community operating expenses exclude management fees paid to Sunrise with respect to same-community ventures in order to make comparisons between consolidated communities and unconsolidated venture communities consistent. Labor costs increased, largely due to the higher level of extended care services, which require additional labor hours. Same-community operating expense also included increases for repairs and maintenance and utilities.

Sunrise's management believes that total revenue under management and total same-community revenues, average daily rate, average occupancy rate and total same-community expenses are useful indicators of trends in Sunrise's management business. For such data broken down by consolidated communities and communities in unconsolidated ventures (and also broken down by communities managed for third-party owners, in the case of revenues under management), please refer to the Supplemental Information attached.

Cash and Liquidity Update

As of September 30, 2008 there were $95 million in borrowings and $21.7 million in letters of credit outstanding under the Company's amended Bank Credit Facility. The Company had borrowing availability of approximately $43.3 million under the amended Bank Credit Facility. As of September 30, 2008, the Company had approximately $52.8 million in unrestricted cash and cash equivalents and was in compliance with the minimum liquidity covenant of $50 million.

The Company's amended Bank Credit Facility contains various financial covenants and restrictions, including provisions that require the Company to meet certain financial tests. As part of a November 6, 2008 amendment to the Bank Credit Facility, the lenders waived compliance by the Company as of September 30, 2008 with the net worth test under the Bank Credit Facility (which requires the Company's consolidated adjusted net worth to be at least $450 million). In July 2008, the lenders have also waived compliance by the Company for the quarter ended September 30, 2008 with the following financial test: (1) the leverage ratio provision of the Bank Credit Facility, which requires the Company's leverage ratio not to exceed 4.25 to 1.0 and (2) the fixed charge provision, which requires the Company's fixed charge coverage ratio not to be less than 1.75 to 1.0. The Company does not expect to be able to satisfy these financial covenants at the end of the fourth quarter of 2008. Accordingly, the Company expects that, on January 1, 2009, it may no longer be able to borrow under the amended Bank Credit Facility, unless it receives an additional waiver from the lenders.

In the November 6, 2008 amendment, the Company and the lenders acknowledged that it was their intention to revise and restructure the Bank Credit Facility by January 31, 2009 on terms acceptable to the Company and the lenders, including the granting by the Company of such tangible collateral to secure its obligations as is acceptable to the lenders. As part of the November 6, 2008 amendment, the Company also paid fees of $0.2 million to the lenders and the borrowing cost under the line was increased to LIBOR plus 3.75 percent, with a minimum rate of 5 percent.

In the event that the Company is unable to revise and restructure its Bank Credit Facility by January 31, 2009, or in the event that the Company fails to comply with the new liquidity covenants included in the July 2008 amendment for any calendar month (minimum liquidity of not less than $50 million, composed of availability under the amended Bank Credit Facility plus up to not more than $50 million in unrestricted cash and cash equivalents), the lenders under the amended Bank Credit Facility could, among other things, exercise their rights to accelerate the payment of all amounts then outstanding under the amended Bank Credit Facility, exercise remedies against the collateral securing the amended Bank Credit Facility, require the Company to replace or provide cash collateral for the outstanding letters of credit or pursue further modification with respect to the amended Bank Credit Facility. The Company is also seeking to refinance its Bank Credit Facility through new lenders and is discussing other potential sources of capital with other third parties.

The Company believes current availability under the Bank Credit Facility and unrestricted cash balances of approximately $52.8 million at September 30, 2008 will be sufficient to support its operations through January 31, 2009.

Additional financing resources will be required to refinance existing indebtedness that comes due within the next 12 months. The Company's debt maturities for 2009 of $213.5 million are as follows:

-- $95 million for draws on the amended Bank Credit Facility, which are classified as short-term debt in the Company's consolidated financial statements;

-- $34.3 million in land loans due in the third and fourth quarters of 2009, related to properties the Company intends to sell;

-- $20 million margin loan collateralized by auction rate securities with a book value of $36 million;

-- $48 million related to two consolidated communities (one loan for $40 million and one for $8 million), due in the third quarter 2009. The Company is currently working with its lenders to refinance these loans, but estimates that a partial paydown of up to $10 million may be required; and

-- principal payments of $12.5 million related to the debt of the German venture as described below.

In addition, the Company will be required to repay or refinance any letters of credit that are outstanding under the Bank Credit Facility upon maturity on the Facility.

During October and November, the Company received income tax refunds of $30.1 million. Additional tax refunds of up to $27 million are anticipated to be received by mid-2009, subject to the filing of the Company's tax returns for 2008.

The Company is currently pursuing the following additional sources of cash:

-- potential refinancings related to the Company's ventures resulting in estimated net proceeds of $8 million projected to occur in the fourth quarter of 2008;

-- sale of 15 land parcels related to abandoned development project with a book value of $74 million and related debt of $31 million projected to occur throughout 2009;

-- sales of properties that are currently wholly-owned to a venture with net proceeds of approximately $10 million projected during 2009; and

-- successful completion of bond financing for non-profit development projects being developed by the Company's subsidiary Greystone, of which at least two are forecasted to close in late 2008 or early 2009, generating anticipated net proceeds of $11 million.

No assurance can be given that these additional potential sources of cash will be realized.

Corporate Expenses and Operating Cost Structure

As previously announced, in light of the difficult financial environment, the Company has initiated a plan to reduce its general and administrative headcount and certain non-payroll costs with the expectation of reducing the Company's general and administrative spending level by at least $20.0 million. To date, Sunrise has identified approximately 160 non-care related positions in overhead and development that will be eliminated in 2008 and 2009. These reductions are anticipated to generate annual savings of approximately $17 million. The Company does not expect its cost reduction initiative to result in any reduction to the level of service it provides to residents. With its now smaller workforce, Sunrise has engaged an outside real estate firm to sublet portions of its McLean, Virginia office.

In addition to the $7.2 million of severance expense recorded in the third quarter of 2008, the Company expects to record $7.5 million and $2.0 million in the fourth quarter of 2008 and the first and second quarters of 2009, respectively, based on actions taken to date.

Development Pipeline Update

The Company's previously disclosed development plan for 2008 included a development pipeline of 1,200 to 1,400 units. As of September 30, 2008, due to continued lack of financing availability and market conditions, the Company does not expect any construction starts in the fourth quarter of 2008 and accordingly the Company now expects its 2008 construction starts to be five new communities consisting of 530 units, which were begun in the first three quarters of 2008. The Company abandoned 54 projects in the quarter ended September 30, 2008 and has taken a charge of $47.5 million related to these projects. Additional charges could be incurred as the Company continues to assess the Company's development pipeline in light of capital market conditions and the Company's underwriting requirements.

The Company has determined that there are a number of land parcels which it will not develop in the future due to the Company's more stringent underwriting criteria. The Company intends to sell 15 land parcels which have a carrying value of $74 million and related debt of $31 million.

As of September 30, 2008, the Company had contracts to purchase or lease 15 development sites which it intends to develop in the future, subject to credit market conditions, for a total contracted purchase price of approximately $60 million. Generally, the Company's land purchase commitments are terminable by Sunrise and the $13.1 million in land deposits (included in other assets on the Company's consolidated balance sheet) are refundable.

The Company has not yet determined its development goals for 2009. The Company does not intend to begin construction on new projects without committed construction debt financing. Based on current credit market conditions, the Company anticipates only limited construction starts in 2009. The Company plans to continue future development once market conditions improve and the cost of capital for development projects is reduced for current expectations in the market.

Germany Venture Update

As previously disclosed, on September 1, 2008, the Company paid Euro 3.0 million ($4.4 million) to the majority partner in its Germany venture for an option to purchase its entire equity interest in the venture through a two-step transaction in 2009. The Company expects to exercise its option in January 2009. Also on September 1, the Company entered into an agreement with its partner that gives the Company permission to immediately pursue potential restructuring of loans with venture lenders, pursue potential sales of some or all of the nine communities in the venture and to merge certain subsidiaries of the venture to improve operational efficiencies and reduce VAT taxes paid. The Company's decision to purchase this option was based on the fact that it had 100% of the risk for the Germany venture but did not have control and had only 20% of the equity ownership. Neither the purchase of the option nor the exercise of the option planned for January 2009 alters the Company's obligation under any financial guarantees for which it is responsible or alters any of the recourse/non-recourse provisions in any of the loans. The purchase of the equity interest in the Germany venture will enable the Company's shareholders to benefit from 100% of any appreciation of the communities as they become stabilized. Previously, while the Company was responsible for funding 100% of the losses under the operating deficit guarantees, it had limited benefit from any future appreciation of the assets. This is a significant non-cash transaction affecting the Company's balance sheet but has no effect on its statement of cash flows.

As of September 1, 2008, the venture was consolidated, resulting in a non-cash after-tax extraordinary loss of $13.3 million. The assets for the venture are recorded at $168.5 million and the debt is recorded at $216.7 million. Of this debt, $191.2 million is non-recourse to Sunrise and $25.5 million is guaranteed by the Company. In addition, to the extent that four properties that collateralize the loan are sold for less than the specified release price, approximately Euro 50 million for four properties, the Company could be required to make additional payments to cover any shortfall in the release price. The current estimated fair value of the four properties approximates the release price.

Sunrise expects to close or sell two communities within the next several months. It is possible that a loss in excess of the estimated fair value could occur and that the Company may be required to fund a loss greater than the difference between the fair value and release price disclosed above. For the remaining communities in Germany, based on continuing realized occupancy growth, the Company believes that the operations can achieve stabilization and eventually be profitable.

Upon consolidation, the Company's existing receivables from the venture and guarantee liabilities are eliminated for financial reporting purposes. Guarantee liabilities are considered in the valuation of the debt and accordingly, are also eliminated for financial reporting purposes. The Company is still responsible for guarantee liabilities to the lenders.

Future fundings to Sunrise's German operations for operating losses and interest payments excluding principal payments prior to the closure or sale of any communities are estimated to be as follows (in thousands):

Q 4 2008 Euro 5,025 $ 7,260

2009 10,471 15,129

2010 5,482 7,920

2011 1,781 2,574

2012 - -

Euro 22,759 $ 32,883

Trinity Subsidiary

In October 2008, the Company determined not to provide any additional funding for ongoing operations to our Trinity subsidiary due to the continued losses experienced by that subsidiary. As a result, the Company expects to write-off the remaining goodwill and other intangible assets related to Trinity of approximately $9.8 million in the fourth quarter of 2008. As a result of this decision to cease funding by the Company, Trinity's board of directors has decided it will discontinue operations by the end of the year.

Greystone Subsidiary

The Company has determined not to fund new development capital projects of its Greystone subsidiary until the bond financing markets open up again.

Conference Call and Webcast

Sunrise will host a conference call and webcast to discuss the third quarter 2008 financial results and selected financial and operating data, and the other matters discussed in this press release at 9:00 a.m. ET on Friday, November 7, 2008. The call-in number for the conference call is 1-888-726-2470 or (913) 312-1390 (no password required). Those interested may also go to the Investor Relations section of the Company's Web site (http://www.sunriseseniorliving.com) to listen to the earnings call. A telephone replay of the call will be available until November 21, 2008, by dialing 1-888-203-1112 or (719) 457-0820 (passcode 7482660); a replay will also be available on Sunrise's Web site until December 7, 2008.

About Sunrise Senior Living

Sunrise Senior Living, a McLean, Va.-based company, employs approximately 40,000 people. As of September 30, 2008, Sunrise operated 448 communities in the United States, Canada, Germany and the United Kingdom, with a combined capacity for approximately 55,000 residents. At quarter end, Sunrise also had 34 communities under construction in these countries with a combined capacity for 4,277 additional residents. Sunrise offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing, rehabilitative and hospice care. Sunrise's senior living services are delivered by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents. To learn more about Sunrise, please visit http://www.sunriseseniorliving.com.

Forward-Looking Statements

Certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Sunrise believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurances that its expectations will be realized. Sunrise's actual results could differ materially from those anticipated in these forward- looking statements as a result of various factors, including, but not limited to, the Company's ability to obtain a covenant waiver or further modification of its Bank Credit Facility; the Company's ability to refinance its Bank Credit Facility and other debt due in 2009 and/or raise funds from other capital sources; the Company's ability to achieve the anticipated savings from the Company's cost-savings program; the outcome of the SEC's investigation; the outcomes of pending putative class action and derivative litigation; the outcome of the Trinity OIG investigation and qui tam proceeding; the outcome of the IRS audit of the Company's tax return for the tax year ended December 31, 2006 and employment tax returns for 2004, 2005 and 2006; the status of the exploration of strategic alternatives; the Company's ability to continue to recognize income from refinancings and sales of communities by ventures; risk of changes in the Company's critical accounting estimates; risk of further write-downs or impairments of the Company's assets; risk of future fundings of guarantees and other support arrangements to some of the Company's ventures, lenders to the ventures or third party owners; risk of declining occupancies in existing communities or slower than expected leasing of new communities; risk resulting from any international expansion; risk associated with any new service offerings; development and construction risks; risks associated with past or any future acquisition; compliance with government regulations; risk of new legislation or regulatory developments; business conditions; competition; changes in interest rates; unanticipated expenses; market factors that could affect the value of the Company's properties; the risks of further downturns in general economic conditions; availability of financing for development; and other risks detailed in the Company's amended 2007 Annual Report on Form 10-K filed with the SEC, as may be amended or supplemented in the Company's Form 10-Q filings. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

Financial information provided in this press release for periods subsequent to September 30, 2008 is preliminary and remains subject to review by Ernst & Young LLP. As such, this information is not final or complete, and remains subject to change, possibly materially.

SUNRISE SENIOR LIVING, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share and September 30, December 31,

share amounts) 2008 2007

(Unaudited)

ASSETS

Current Assets:

Cash and cash equivalents $52,837 $138,212

Accounts receivable, net 76,007 76,909

Income taxes receivable 64,093 63,624

Notes receivable 5,444 -

Due from unconsolidated communities, net 86,933 61,854

Deferred income taxes, net 33,567 33,567

Restricted cash 38,915 61,999

Assets held for sale 17,836 12,716

Prepaid insurance 4,710 23,720

Prepaid expenses and other current assets 39,549 57,363

Total current assets 419,891 529,964

Property and equipment, net 764,201 656,211

Property and equipment subject to financing,

net 17,232 58,871

Investments in marketable securities 36,000 -

Notes receivable - 9,429

Due from unconsolidated communities 45,123 19,555

Intangible assets, net 74,114 83,769

Goodwill 169,736 169,736

Investments in unconsolidated communities 86,310 97,173

Investment accounted for under the

profit-sharing method 1,965 -

Restricted cash 113,071 165,386

Other assets, net 11,503 8,503

Total assets $1,739,146 $1,798,597

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Current maturities of long-term debt $143,907 $122,541

Outstanding draws on bank credit

facility 95,000 100,000

Accounts payable and accrued expenses 212,358 275,362

Due to unconsolidated communities 28,243 37,344

Deferred revenue 7,628 9,285

Entrance fees 34,671 34,512

Self-insurance liabilities 43,368 52,267

Total current liabilities 565,175 631,311

Long-term debt, less current maturities 398,215 31,347

Liabilities related to properties accounted

for under the financing method 16,290 54,317

Investment accounted for under the

profit-sharing method - 51,377

Guarantee liabilities 12,633 80,814

Self-insurance liabilities 68,212 74,971

Deferred gains on the sale of real estate

and deferred revenues 86,335 74,367

Deferred income tax liabilities 6,991 82,605

Other long-term liabilities, net 127,444 133,717

Total liabilities 1,281,295 1,214,826

Minority interests 10,794 10,208

Stockholders' Equity:

Preferred stock, $0.01 par value,

10,000,000 shares authorized, no shares

issued and outstanding - -

Common stock, $0.01 par value,

120,000,000 shares authorized,

50,962,783 and 50,556,925 shares issued

and outstanding, net of 252,453 and

103,696 treasury shares, at September 30,

2008 and December 31, 2007, respectively 510 506

Additional paid-in capital 459,291 452,640

Retained (deficit) earnings (21,444) 112,123

Accumulated other comprehensive income 8,700 8,294

Total stockholders' equity 447,057 573,563

Commitments and contingencies

Total liabilities and stockholders'

equity $1,739,146 $1,798,597

SUNRISE SENIOR LIVING, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended Nine Months Ended

(In thousands, except per share September 30, September 30,

amounts) 2008 2007 2008 2007

(Unaudited) (Unaudited)

Operating revenue:

Management and buyout fees $37,693 $33,420 $105,595 $93,948

Professional fees from

development, marketing and

other 16,122 15,783 45,541 25,182

Resident fees for consolidated

communities 108,995 99,405 320,706 298,394

Hospice services 10,404 17,195 35,155 51,625

Ancillary services 16,298 13,427 45,000 45,589

Reimbursed contract services 246,460 250,282 751,158 718,679

Total operating revenues 435,972 429,512 1,303,155 1,233,417

Operating expenses:

Development and venture

expense 16,952 18,898 66,028 55,472

Community expense for

consolidated communities 84,310 71,963 240,379 215,624

Hospice services 16,271 18,367 53,309 51,951

Ancillary services 17,601 14,900 50,368 52,939

Community lease expense 15,184 15,792 44,916 45,985

General and administrative 40,356 70,152 115,683 134,614

Severance costs 7,219 - 7,219 -

Accounting Restatement,

Special Independent Committee

inquiry, SEC investigation and

pending stockholder litigation 5,072 11,957 26,436 32,052

Loss on financial guarantees

and other contracts 975 4,996 1,702 5,331

Provision for doubtful accounts 2,564 1,707 6,977 3,996

Depreciation and amortization 13,212 13,205 38,144 42,363

Impairment of long-lived assets - 3,607 2,349 3,607

Write-off of abandoned

development projects 47,512 15,574 84,209 24,547

Reimbursable contract services 246,076 250,282 749,384 718,679

Total operating expenses 513,304 511,400 1,487,103 1,387,160

Loss from operations (77,332) (81,888) (183,948) (153,743)

Other non-operating income

(expense):

Interest income 1,194 2,413 4,239 7,251

Interest expense (6,563) (1,041) (10,576) (6,167)

Unrealized gain (loss) on

trading securities 720 - (4,000) -

Other income (expense) 229 2,624 (5,377) (1,457)

Total other non-operating

(expense) income (4,420) 3,996 (15,714) (373)

Gain on the sale and development

of real estate and equity

interests 4,717 52,753 19,029 99,404

Sunrise's share of (losses)

earnings and return on investment

in unconsolidated communities (15,549) 79,774 (7,207) 136,288

Gain (loss) from investments

accounted for under the profit-

sharing method 594 48 95 (171)

Minority interests 1,841 1,232 6,122 3,391

(Loss) income before benefit

from (provision for) income

taxes and extraordinary loss (90,149) 55,915 (181,623) 84,796

Benefit from (provision for)

income taxes 34,738 (17,685) 61,311 (31,094)

Net (loss) income before

extraordinary loss (55,411) 38,230 (120,312) 53,702

Extraordinary loss, net of tax

benefit (13,255) - (13,255) -

Net (loss) income $(68,666) $38,230 $(133,567) $53,702

Earnings per share data:

Basic net (loss) income per

common share

(Loss) income before

extraordinary loss $(1.10) $0.77 $(2.39) $1.08

Extraordinary loss (0.26) - (0.26) -

Net (loss) income $(1.36) $0.77 $(2.65) $1.08

Diluted net (loss) income

per common share

(Loss) income before

extraordinary loss $(1.10) $0.74 $(2.39) $1.04

Extraordinary loss (0.26) - (0.26) -

Net (loss) income $(1.36) $0.74 $(2.65) $1.04

Sunrise Senior Living, Inc.

Supplemental Information

As of September 30, 2008

($ in thousands except average daily rate)

Resident

Communities Unit Capacity Capacity

Q3 08 Q3 07 Q3 08 Q3 07 Q3 08 Q3 07

Community Data (1)

Communities managed for

third-party owners

(excluding Greystone) 152 161 15,509 16,572 16,966 18,099

Communities in ventures 208 195 20,692 19,349 23,337 21,878

Communities consolidated 66 63 8,637 8,530 9,035 8,829

Greystone-managed communities 22 17 5,898 4,631 5,898 4,631

Total communities operated 448 436 50,736 49,082 55,236 53,437

Percentage of Total

Operating Portfolio

Assisted Living 73% 73%

Independent Living 22% 22%

Skilled Nursing 5% 5%

Total 100% 100%

Selected Operating Results

Same-Community Owned Portfolio

Operating Results (2,3,4) Q3 08 Q3 07 % change

Total Same-Community Portfolio

Number of Communities 220 220

Unit Capacity 23,234 23,234

Resident Capacity 25,643 25,643

Community Revenues $350,265 $333,751 4.9%

Community Operating Expenses $231,599 $224,635 3.1%

Average Daily Rate $165.21 $159.10 3.8%

Average Occupancy Rate 89.9% 89.1% 0.9%

Communities in ventures

Number of Communities 162 162

Unit Capacity 15,165 15,165

Resident Capacity 17,195 17,195

Community Revenues $243,882 $233,935 4.3%

Facility operating expenses $156,840 $151,115 3.8%

Average Daily Rate $172.82 $167.35 3.3%

Average Occupancy Rate 89.2% 88.6% 0.7%

Communities consolidated

Number of Communities 58 58

Unit Capacity 8,069 8,069

Resident Capacity 8,448 8,448

Community Revenues $106,383 $99,816 6.6%

Facility operating expenses $74,759 $73,520 1.7%

Average Daily Rate $150.06 $142.62 5.2%

Average Occupancy Rate 91.2% 90.0% 1.3%

Supplemental Information (continued)

As of September 30, 2008

($ in thousands except average daily rate)

Total Portfolio Revenues under

Management Q3 08 Q3 07

Communities in ventures $298.7 $269.9 10.7%

Communities consolidated 113.6 106.6 6.6%

Communities managed

(excluding Greystone) 226.9 232.3 (2.3%)

Total revenue of communities

under management $639.2 $608.8 5.0%

Development Communities to

be Opened (# Communities)

Q4 08 Q1 09 Q2 09 Q3 09 Total

Consolidated communities - 1 - - 1

Venture communities 5 9 3 4 21

Greystone communities 1 1 1 - 3

6 11 4 4 25

Development Communities to

be Opened (# Residents)

Q4 08 Q1 09 Q2 09 Q3 09 Total

Consolidated communities - 115 - - 115

Venture communities 826 821 296 380 2,323

Greystone communities 344 222 309 - 875

1,170 1,158 605 380 3,313

Notes

(1) During the third quarter of 2008, Sunrise opened three communities. (2) Same-community portfolio consists of all communities in which Sunrise has an ownership interest in and that were open for at least 12 months or had achieved 95% occupancy (whichever was sooner) as of the third quarter of 2008. This includes consolidated communities and communities in ventures.

(3) Community operating expense excludes management fees paid to Sunrise with respect to same-community ventures in order to make comparisons between consolidated and venture communities consistent.

(4) Average daily rate includes resident room fees, extended care fees and community fees. Average daily rate was adjusted retroactively to include community fees, which are amortized over a one-year period.


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SOURCE Sunrise Senior Living, Inc.
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6. Sunrise Senior Living Founder and CEO to Become Chairman
7. Sunrise to Present at Jefferies 2nd Annual Healthcare Conference
8. Sunrise to Present at Bank of America Healthcare Conference
9. Hawks Cay Hosts Redbone Sunrise/Sunset Tarpon Tournament
10. Sunrise Files 2006 Form 10-K
11. Sunrise Senior Living Names Mark Ordan Chief Investment and Administrative Officer
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