should be recorded in 2006, instead of 2007 as previously disclosed.
No assurance can be given that additional pre-tax charges will not be
required in subsequent periods.
Other Anticipated Pre-Tax Charges and Impairments
-- Impairment of Long-Lived Assets. The Company expects to record an
impairment charge of $14.6 million in 2006 related to four small senior
living communities, two of which the Company acquired in 1996 and two
of which the Company acquired in 1999. The Company also expects to
record an impairment charge of approximately $4.0 million in 2007
related to another senior living community acquired in 1999.
-- Acquired Venture. As disclosed in the Company's press release dated
November 9, 2007, in the third quarter of 2005, Sunrise acquired a 20
percent interest in a venture and entered into management agreements
for the 16 communities owned by the venture. In conjunction with this
transaction, the Company guaranteed to fund shortfalls between actual
net operating income and a specified level of net operating income up
to $7 million per year through July 2010. The Company paid $12 million
to the venture to enter into the management agreements, which was
recorded as an intangible asset and is being amortized over the 30-year
life of the management agreements. The $12 million was placed into a
reserve account by the venture, and the first $12 million of shortfalls
were to be funded from that reserve account by the venture. The Company
determined that shortfalls will exceed the amount held in the reserve
account. As a result, the Company expected to record a pre-tax charge
of $21 million. The Company has now determined that the entire $21
million charge will be recorded in 2006.
-- Trinity Hospice Impairment. As
|SOURCE Sunrise Senior Living, Inc.|
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