Emeritus Corporation (NYSE: ESC), a national provider of assisted living
and Alzheimer’s and related dementia care services to senior citizens,
today announced its second quarter 2009 results.
Second Quarter 2009 Operating Highlights
-
Same store occupancy increased 120 basis points from the second
quarter 2008, and increased 50 basis points sequentially;
-
Total revenues increased 18.5% to $219.1 million from the second
quarter 2008;
-
Operating margins improved to 36.4% from 35.8% in the second quarter
2008;
-
Operating income from continuing operations improved by $16.4 million
from the second quarter 2008, and
-
Cash flow from operations (CFFO) per share increased 100.0% to $0.34
from the second quarter 2008.
Our net loss for the second quarter was $7.1 million compared to a net
loss of $25.2 million in the prior year quarter, an improvement of $18.1
million.
Total revenue for the second quarter of 2009 increased 18.5% to $219.1
million compared to $184.9 million in the prior year quarter. The
average revenue per occupied unit on a total consolidated basis was
approximately $3,650 for the second quarter of 2009, compared to $3,382
in the prior year quarter. Total occupancy increased to 86.6% compared
to 86.2% in the first quarter of 2009 and 86.5% in the prior year second
quarter. Month-end occupancy on June 30, 2009 was 88.2%, compared to
87.8% on March 31, 2009.
Same Store total revenue for the second quarter of 2009 increased 4.7%
to $189.4 million from $180.8 million in the prior year second quarter.
Same Store average revenue per occupied unit increased approximately
3.4% to $3,512 from $3,398 in the second quarter of 2008. The second
quarter 2009 Same Store average occupancy increased to 87.7% compared to
87.2% in the first quarter of 2009 and 86.5% in the prior year second
quarter.
Operating income (community revenue less community operating expenses)
increased 20.2% to $79.1 million for the second quarter of 2009 from
$65.8 million in the prior year second quarter. The operating margin
expanded 60 basis points to 36.4% for the second quarter of 2009
compared to 35.8% in the prior year second quarter.
The weighted average loss per common share outstanding was $(0.18) and
$(0.65) for the three months ended June 30, 2009 and 2008, respectively.
CFFO per weighted average common share outstanding was $0.34 and $0.17
for the three months ended June 30, 2009 and 2008, respectively.
Mr. Granger Cobb, President and Co-CEO of Emeritus stated, “We were able
to generate solid occupancy momentum as we focus on gaining market
share. Importantly, we achieved this year-over-year growth while
increasing our average rate and controlling costs. The consistent
strength of our key operating metrics is further evidence of the
need-driven demand for our services and our ability to meet that need in
a cost effective manner.”
During the second quarter of 2009, the Company acquired an 85-unit
assisted living community formerly managed by the Company. The total
consolidated operating portfolio, excluding discontinued operations, now
consists of 265 communities with approximately 22,981 operating units as
of June 30, 2009. The Same Store portfolio consists of 241 of the 265
consolidated communities.
Balance Sheet
As of June 30, 2009, the Company had approximately $41.5 million of cash
and cash equivalents, and had no outstanding borrowings under its $25.0
million line of credit. On June 30, 2009, total assets were $2.1
billion, including $1.7 billion of net investments in properties, total
debt was $1.6 billion, including capital lease obligations, and
shareholders’ equity was $346.5 million.
The current portion of long-term debt of $43.6 million as of June 30,
2009 includes $34.4 million of debt that matures in 2012 and relates to
five communities held for sale. This debt is classified as current
because the related assets are expected to be sold and the debt paid off
from the proceeds of the sale within the next year. The remaining $9.2
million of current portion of debt relates to routine debt amortization
over the next 12 months.
Conference Call:
The Company will host a conference call on Thursday, August 6, 2009, at
5:00 P.M. Eastern Time to discuss its financial results for the second
quarter ended June 30, 2009. Hosting the call will be Mr. Daniel Baty,
Chairman and Co-Chief Executive Officer, Mr. Granger Cobb, President and
Co-Chief Executive Officer, and Mr. Raymond Brandstrom, Chief Financial
Officer.
The conference call will be webcast live over the internet from the
Company’s web site at www.emeritus.com
under the “investors” section. The conference call can also be accessed
by dialing (888) 388-8975, or for international participants (913)
312-1454. A replay of the conference call will be available after 8:00
P.M. Eastern Time on Thursday, August 6, 2009, until midnight Eastern
Time on Thursday, August 13, 2009, and can be accessed by dialing (888)
203-1112, or for international participants (719) 457-0820 and entering
the passcode 2647058.
Non-GAAP Financial Measures
Adjusted EBITDA/EBITDAR and Cash From Facility Operations (CFFO) are
financial measures of operating performance that are not calculated in
accordance with U.S. generally accepted accounting principles (GAAP). We
believe these non-GAAP measures are useful in identifying trends in our
day-to-day performance because they exclude items that are of little or
no significance to operations and provide indicators to management of
progress in achieving optimal operating performance. In addition, these
measures are used by many research analysts and investors to evaluate
the performance and the value of companies in our industry. We strongly
urge you to review the reconciliation of net loss to Adjusted
EBITDA/EBITDAR and CFFO provided below, along with our consolidated
balance sheets, statements of operations, and cash flows. We define
Adjusted EBITDA/EBITDAR and CFFO and provide other information about
these non-GAAP measures in our annual report on Form 10-K.
The table below shows the reconciliation of net loss to Adjusted EBITDAR
for the three and six month periods ended June 30, 2009 and 2008 (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
2009
|
|
2008
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(7,304
|
)
|
|
$
|
(25,234
|
)
|
|
$
|
(22,399
|
)
|
|
$
|
(51,202
|
)
|
|
Provision for income taxes
|
|
|
270
|
|
|
|
270
|
|
|
|
540
|
|
|
|
480
|
|
|
Equity losses (gains) in unconsolidated joint ventures
|
|
|
(560
|
)
|
|
|
(665
|
)
|
|
|
(1,184
|
)
|
|
|
857
|
|
|
Depreciation and amortization
|
|
|
17,960
|
|
|
|
29,181
|
|
|
|
39,388
|
|
|
|
59,816
|
|
|
Amortization of deferred gains
|
|
|
(74
|
)
|
|
|
(502
|
)
|
|
|
(148
|
)
|
|
|
(1,004
|
)
|
|
Non-cash stock option compensation expenses
|
|
|
1,116
|
|
|
|
1,436
|
|
|
|
2,063
|
|
|
|
2,818
|
|
|
Interest expense
|
|
|
25,846
|
|
|
|
22,430
|
|
|
|
51,479
|
|
|
|
43,156
|
|
|
Straight-line rent expense
|
|
|
4,954
|
|
|
|
2,354
|
|
|
|
9,949
|
|
|
|
4,792
|
|
|
Above/below market rent amortization
|
|
|
2,457
|
|
|
|
2,524
|
|
|
|
4,973
|
|
|
|
5,048
|
|
|
Development and transaction costs written off
|
|
|
351
|
|
|
|
-
|
|
|
|
464
|
|
|
|
-
|
|
|
Deferred revenues
|
|
|
(57
|
)
|
|
|
660
|
|
|
|
15
|
|
|
|
2,256
|
|
|
Change in fair value of interest rate swaps
|
|
|
(752
|
)
|
|
|
(972
|
)
|
|
|
(842
|
)
|
|
|
(135
|
)
|
|
Interest income
|
|
|
(189
|
)
|
|
|
(581
|
)
|
|
|
(327
|
)
|
|
|
(1,433
|
)
|
|
Discontinued operations
|
|
|
(316
|
)
|
|
|
4,987
|
|
|
|
727
|
|
|
|
5,734
|
|
|
Professional and workers' compensation liability
|
|
|
(1,726
|
)
|
|
|
(1,854
|
)
|
|
|
(1,726
|
)
|
|
|
(1,854
|
)
|
|
Adjusted EBITDA
|
|
|
41,976
|
|
|
|
34,034
|
|
|
|
82,972
|
|
|
|
69,329
|
|
|
Facility lease expense
|
|
|
22,062
|
|
|
|
17,435
|
|
|
|
43,747
|
|
|
|
34,789
|
|
|
Adjusted EBITDAR
|
|
$
|
64,038
|
|
|
$
|
51,469
|
|
|
$
|
126,719
|
|
|
$
|
104,118
|
|
The following table shows CFFO for the three and six month periods ended
June 30, 2009 and 2008 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
2009
|
|
2008
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
12,159
|
|
|
$
|
19,008
|
|
|
$
|
33,349
|
|
|
$
|
39,262
|
|
|
Adjust for changes in operating assets and liabilities
|
|
|
7,613
|
|
|
|
(4,529
|
)
|
|
|
3,410
|
|
|
|
(8,676
|
)
|
|
Recurring capital expenditures, net
|
|
|
(4,236
|
)
|
|
|
(3,995
|
)
|
|
|
(8,246
|
)
|
|
|
(7,464
|
)
|
|
Repayment of capital lease and financing obligations
|
|
|
(2,274
|
)
|
|
|
(3,688
|
)
|
|
|
(4,508
|
)
|
|
|
(9,378
|
)
|
|
Cash From Facility Operations
|
|
$
|
13,262
|
|
|
$
|
6,796
|
|
|
$
|
24,005
|
|
|
$
|
13,744
|
|
CFFO per weighted average common shares outstanding was $0.34 and $0.17
for the three months ended June 30, 2009 and 2008, respectively.
For a more detailed understanding of Emeritus, please refer to the
Company’s annual report on Form 10-K filed with the Securities and
Exchange Commission on March 16, 2009, or visit the Company’s Internet
site at www.emeritus.com to obtain
a copy.
ABOUT THE COMPANY
Emeritus Corporation is a national provider of assisted living and
Alzheimer’s and related dementia care services to seniors. Emeritus is
one of the largest and most experienced operators of freestanding
assisted living communities located throughout the United States. These
communities provide a residential housing alternative for senior
citizens who need assistance with the activities of daily living, with
an emphasis on personal care services, which provides support to the
residents in the aging process. Emeritus currently operates 309
communities in 36 states representing capacity for approximately 27,200
units and approximately 32,400 residents. Our common stock is traded on
the New York Stock Exchange under the symbol ESC, and our home page can
be found on the Internet at www.emeritus.com.
“Safe Harbor” Statement under the Private Securities Litigation
Reform Act of 1995: A number of the matters and subject areas
discussed in this report that are not historical or current facts deal
with potential future circumstances, operations, and prospects. The
discussion of such matters and subject areas is qualified by the
inherent risks and uncertainties surrounding future expectations
generally, and also may materially differ from our actual future
experience as a result of such factors as: the effects of competition
and economic conditions on the occupancy levels in our communities; our
ability under current market conditions to maintain and increase our
resident charges in accordance with our rate enhancement programs
without adversely affecting occupancy levels; increases in interest
costs as a result of re-financings; our ability to control community
operation expenses, including insurance and utility costs, without
adversely affecting the level of occupancy and the level of resident
charges; our ability to generate cash flow sufficient to service our
debt and other fixed payment requirements; our ability to find sources
of financing and capital on satisfactory terms to meet our cash
requirements to the extent that they are not met by operations, and
uncertainties related to professional liability claims. We have
attempted to identify, in context, certain of the factors that we
currently believe may cause actual future experience and results to
differ from our current expectations regarding the relevant matter or
subject area. These and other risks and uncertainties are
detailed in our reports filed with the Securities and Exchange
Commission, including “Item 1A. Risk Factors” in our Annual Report on
Form 10-K for the year ended December 31, 2008.
|
|
|
EMERITUS CORPORATION
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(In thousands, except share data)
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
June 30,
|
|
|
|
|
|
2009
|
|
December 31,
|
|
Current Assets:
|
|
(unaudited)
|
|
2008
|
|
Cash and cash equivalents
|
|
$
|
41,487
|
|
|
$
|
27,254
|
|
|
Short-term investments
|
|
|
1,794
|
|
|
|
1,802
|
|
|
Trade accounts receivable, net of allowance of $961 and $549
|
|
|
10,832
|
|
|
|
11,596
|
|
|
Other receivables
|
|
|
5,183
|
|
|
|
5,556
|
|
|
Tax, insurance, and maintenance escrows
|
|
|
23,708
|
|
|
|
21,762
|
|
|
Prepaid workers' compensation
|
|
|
20,375
|
|
|
|
19,288
|
|
|
Other prepaid expenses and current assets
|
|
|
23,782
|
|
|
|
23,720
|
|
|
Property held for sale
|
|
|
37,987
|
|
|
|
13,712
|
|
|
Total current assets
|
|
|
165,148
|
|
|
|
124,690
|
|
|
Long-term investments
|
|
|
4,979
|
|
|
|
4,192
|
|
|
Property and equipment, net of accumulated depreciation of $182,179
and $144,441
|
|
|
1,688,262
|
|
|
|
1,725,558
|
|
|
Restricted deposits
|
|
|
12,790
|
|
|
|
12,337
|
|
|
Lease acquisition costs, net of accumulated amortization of $1,672
and $1,877
|
|
|
3,827
|
|
|
|
3,867
|
|
|
Goodwill
|
|
|
74,197
|
|
|
|
73,704
|
|
|
Other intangible assets, net of accumulated amortization of $22,702
and $76,368
|
|
|
123,082
|
|
|
|
131,994
|
|
|
Other assets, net
|
|
|
17,550
|
|
|
|
18,851
|
|
|
Total assets
|
|
$
|
2,089,835
|
|
|
$
|
2,095,193
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
43,616
|
|
|
$
|
18,267
|
|
|
Current portion of capital lease and financing obligations
|
|
|
10,583
|
|
|
|
9,172
|
|
|
Trade accounts payable
|
|
|
6,950
|
|
|
|
7,474
|
|
|
Accrued employee compensation and benefits
|
|
|
34,942
|
|
|
|
32,778
|
|
|
Accrued interest
|
|
|
7,463
|
|
|
|
7,012
|
|
|
Accrued real estate taxes
|
|
|
9,537
|
|
|
|
9,791
|
|
|
Accrued professional and general liability
|
|
|
9,131
|
|
|
|
10,842
|
|
|
Accrued income taxes
|
|
|
1,857
|
|
|
|
3,715
|
|
|
Other accrued expenses
|
|
|
12,830
|
|
|
|
12,284
|
|
|
Deferred revenue
|
|
|
12,478
|
|
|
|
12,463
|
|
|
Unearned rental income
|
|
|
16,940
|
|
|
|
16,101
|
|
|
Total current liabilities
|
|
|
166,327
|
|
|
|
139,899
|
|
|
Long-term debt, less current portion
|
|
|
1,337,928
|
|
|
|
1,355,149
|
|
|
Capital lease and financing obligations, less current portion
|
|
|
170,944
|
|
|
|
180,684
|
|
|
Deferred gain on sale of communities
|
|
|
7,732
|
|
|
|
2,667
|
|
|
Deferred rent
|
|
|
23,971
|
|
|
|
14,022
|
|
|
Other long-term liabilities
|
|
|
36,391
|
|
|
|
36,744
|
|
|
Total liabilities
|
|
|
1,743,293
|
|
|
|
1,729,165
|
|
|
Commitments and contingencies
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
|
Preferred stock, $.0001 par value. Authorized 20,000,000 shares,
none issued
|
|
|
–
|
|
|
|
–
|
|
|
Common stock, $.0001 par value. Authorized 100,000,000 shares;
issued and outstanding
|
|
|
|
|
|
39,158,419 and 39,091,648 shares at June 30, 2009, and December 31,
2008, respectively
|
|
|
4
|
|
|
|
4
|
|
|
Additional paid-in capital
|
|
|
722,195
|
|
|
|
719,903
|
|
|
Accumulated other comprehensive income
|
|
|
621
|
|
|
|
–
|
|
|
Accumulated deficit
|
|
|
(382,462
|
)
|
|
|
(360,506
|
)
|
|
Total Emeritus Corporation shareholders' equity
|
|
|
340,358
|
|
|
|
359,401
|
|
|
Noncontrolling interest–related party
|
|
|
6,184
|
|
|
|
6,627
|
|
|
Total shareholders' equity
|
|
|
346,542
|
|
|
|
366,028
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
2,089,835
|
|
|
$
|
2,095,193
|
|
|
|
|
EMERITUS CORPORATION
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(unaudited)
|
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2009
|
|
2008
|
|
2009
|
|
2008
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Community revenue
|
|
$
|
217,631
|
|
|
$
|
183,677
|
|
|
$
|
434,149
|
|
|
$
|
366,287
|
|
|
Management fees
|
|
|
1,453
|
|
|
|
1,223
|
|
|
|
2,920
|
|
|
|
2,382
|
|
|
Total operating revenues
|
|
|
219,084
|
|
|
|
184,900
|
|
|
|
437,069
|
|
|
|
368,669
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Community operations (exclusive of depreciation and amortization
|
|
|
|
|
|
|
|
|
|
and facility lease expense shown separately below)
|
|
|
138,487
|
|
|
|
117,860
|
|
|
|
279,915
|
|
|
|
237,249
|
|
|
General and administrative
|
|
|
15,987
|
|
|
|
14,731
|
|
|
|
30,967
|
|
|
|
29,342
|
|
|
Depreciation and amortization
|
|
|
17,960
|
|
|
|
29,181
|
|
|
|
39,388
|
|
|
|
59,816
|
|
|
Facility lease expense
|
|
|
29,473
|
|
|
|
22,313
|
|
|
|
58,669
|
|
|
|
44,629
|
|
|
Total operating expenses
|
|
|
201,907
|
|
|
|
184,085
|
|
|
|
408,939
|
|
|
|
371,036
|
|
|
Operating income (loss) from continuing operations
|
|
|
17,177
|
|
|
|
815
|
|
|
|
28,130
|
|
|
|
(2,367
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
189
|
|
|
|
581
|
|
|
|
327
|
|
|
|
1,433
|
|
|
Interest expense
|
|
|
(25,846
|
)
|
|
|
(22,430
|
)
|
|
|
(51,479
|
)
|
|
|
(43,156
|
)
|
|
Change in fair value of interest rate swaps
|
|
|
752
|
|
|
|
972
|
|
|
|
842
|
|
|
|
135
|
|
|
Equity gains (losses) in unconsolidated joint ventures
|
|
|
560
|
|
|
|
665
|
|
|
|
1,184
|
|
|
|
(857
|
)
|
|
Other, net
|
|
|
(182
|
)
|
|
|
(580
|
)
|
|
|
(136
|
)
|
|
|
(176
|
)
|
|
Net other expense
|
|
|
(24,527
|
)
|
|
|
(20,792
|
)
|
|
|
(49,262
|
)
|
|
|
(42,621
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before income taxes
|
|
|
(7,350
|
)
|
|
|
(19,977
|
)
|
|
|
(21,132
|
)
|
|
|
(44,988
|
)
|
|
Provision for income taxes
|
|
|
(270
|
)
|
|
|
(270
|
)
|
|
|
(540
|
)
|
|
|
(480
|
)
|
|
Loss from continuing operations
|
|
|
(7,620
|
)
|
|
|
(20,247
|
)
|
|
|
(21,672
|
)
|
|
|
(45,468
|
)
|
|
Income (loss) from discontinued operations
|
|
|
316
|
|
|
|
(4,987
|
)
|
|
|
(727
|
)
|
|
|
(5,734
|
)
|
|
Net loss
|
|
|
(7,304
|
)
|
|
|
(25,234
|
)
|
|
|
(22,399
|
)
|
|
|
(51,202
|
)
|
|
Less net loss attributable to the noncontrolling interest
|
|
|
229
|
|
|
|
–
|
|
|
|
443
|
|
|
|
–
|
|
|
Net loss attributable to Emeritus Corporation common shareholders
|
|
$
|
(7,075
|
)
|
|
$
|
(25,234
|
)
|
|
$
|
(21,956
|
)
|
|
$
|
(51,202
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per common share attributable to
|
|
|
|
|
|
|
|
|
|
Emeritus Corporation common shareholders:
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.19
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(0.54
|
)
|
|
$
|
(1.16
|
)
|
|
Discontinued operations
|
|
|
0.01
|
|
|
|
(0.13
|
)
|
|
|
(0.02
|
)
|
|
|
(0.15
|
)
|
|
|
|
$
|
(0.18
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
(0.56
|
)
|
|
$
|
(1.31
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding-basic and diluted
|
|
|
39,147
|
|
|
|
39,059
|
|
|
|
39,132
|
|
|
|
39,048
|
|
|
|
|
EMERITUS CORPORATION
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(unaudited)
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2009
|
|
2008
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net loss
|
|
$
|
(22,399
|
)
|
|
$
|
(51,202
|
)
|
|
Adjustments to reconcile net loss to net cash provided by
|
|
|
|
|
|
operating activities
|
|
|
|
|
|
Depreciation and amortization
|
|
|
39,388
|
|
|
|
59,816
|
|
|
Amortization of above/below market rents
|
|
|
4,973
|
|
|
|
5,048
|
|
|
Amortization of deferred gain
|
|
|
(148
|
)
|
|
|
(1,004
|
)
|
|
Impairment of long-lived assets and investments
|
|
|
1,132
|
|
|
|
4,277
|
|
|
Amortization of loan fees
|
|
|
1,527
|
|
|
|
1,110
|
|
|
Allowance for doubtful receivables
|
|
|
1,676
|
|
|
|
801
|
|
|
Equity investment (gains) losses and distributions
|
|
|
(1,184
|
)
|
|
|
857
|
|
|
Stock based compensation
|
|
|
2,063
|
|
|
|
2,818
|
|
|
Change in fair value of interest rate swaps
|
|
|
(842
|
)
|
|
|
(135
|
)
|
|
Other
|
|
|
609
|
|
|
|
1,152
|
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
Deferred rent
|
|
|
9,949
|
|
|
|
4,792
|
|
|
Deferred revenue
|
|
|
15
|
|
|
|
2,256
|
|
|
Change in operating assets and liabilities - other
|
|
|
(3,410
|
)
|
|
|
8,676
|
|
|
Net cash provided by operating activities
|
|
|
33,349
|
|
|
|
39,262
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Acquisition of property and equipment
|
|
|
(16,108
|
)
|
|
|
(557,155
|
)
|
|
Community acquisition
|
|
|
(10,579
|
)
|
|
|
(6,935
|
)
|
|
Acquisition deposits
|
|
|
-
|
|
|
|
(2,995
|
)
|
|
Sale of property and equipment
|
|
|
2,677
|
|
|
|
6,754
|
|
|
Lease and contract acquisition costs
|
|
|
(170
|
)
|
|
|
(686
|
)
|
|
Payments from affiliates and other managed communities, net
|
|
|
699
|
|
|
|
175
|
|
|
Distributions from (investment in) unconsolidated joint
ventures/other
|
|
|
1,018
|
|
|
|
(2,974
|
)
|
|
Net cash used in investing activities
|
|
|
(22,463
|
)
|
|
|
(563,816
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Proceeds from sale of stock
|
|
|
257
|
|
|
|
517
|
|
|
Cash escrow for redemption of convertible debentures
|
|
|
-
|
|
|
|
(10,782
|
)
|
|
(Increase) decrease in restricted deposits
|
|
|
(256
|
)
|
|
|
1,708
|
|
|
Debt issuance and other financing costs
|
|
|
(274
|
)
|
|
|
(9,529
|
)
|
|
Proceeds from long-term borrowings and financings
|
|
|
10,864
|
|
|
|
661,544
|
|
|
Repayment of long-term borrowings and financings
|
|
|
(2,736
|
)
|
|
|
(140,031
|
)
|
|
Repayment of capital lease and financing obligations
|
|
|
(4,508
|
)
|
|
|
(9,378
|
)
|
|
Net cash provided by financing activities
|
|
|
3,347
|
|
|
|
494,049
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
14,233
|
|
|
|
(30,505
|
)
|
|
Cash and cash equivalents at the beginning of the period
|
|
|
27,254
|
|
|
|
67,710
|
|
|
Cash and cash equivalents at the end of the period
|
|
$
|
41,487
|
|
|
$
|
37,205
|
|
|
|
|
EMERITUS CORPORATION
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(unaudited)
|
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
June 30, 2009
|
|
March 31, 2009
|
|
Revenues:
|
|
|
|
|
|
Community revenue
|
|
$
|
217,631
|
|
|
$
|
216,518
|
|
|
Management fees
|
|
|
1,453
|
|
|
|
1,467
|
|
|
Total operating revenues
|
|
|
219,084
|
|
|
|
217,985
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Community operations (exclusive of depreciation and amortization
|
|
|
|
|
|
and facility lease expense shown separately below)
|
|
|
138,487
|
|
|
|
141,428
|
|
|
General and administrative
|
|
|
15,987
|
|
|
|
14,980
|
|
|
Depreciation and amortization
|
|
|
17,960
|
|
|
|
21,428
|
|
|
Facility lease expense
|
|
|
29,473
|
|
|
|
29,196
|
|
|
Total operating expenses
|
|
|
201,907
|
|
|
|
207,032
|
|
|
Operating income from continuing operations
|
|
|
17,177
|
|
|
|
10,953
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
Interest income
|
|
|
189
|
|
|
|
138
|
|
|
Interest expense
|
|
|
(25,846
|
)
|
|
|
(25,633
|
)
|
|
Change in fair value of interest rate swaps
|
|
|
752
|
|
|
|
90
|
|
|
Equity earnings (losses) in unconsolidated joint ventures
|
|
|
560
|
|
|
|
624
|
|
|
Other, net
|
|
|
(182
|
)
|
|
|
46
|
|
|
Net other expense
|
|
|
(24,527
|
)
|
|
|
(24,735
|
)
|
|
|
|
|
|
|
|
Loss from continuing operations before income taxes
|
|
|
(7,350
|
)
|
|
|
(13,782
|
)
|
|
Provision for income taxes
|
|
|
(270
|
)
|
|
|
(270
|
)
|
|
Loss from continuing operations
|
|
|
(7,620
|
)
|
|
|
(14,052
|
)
|
|
Income (loss) from discontinued operations
|
|
|
316
|
|
|
|
(1,043
|
)
|
|
Net loss
|
|
|
(7,304
|
)
|
|
|
(15,095
|
)
|
|
Less net loss attributable to the non-controlling interest
|
|
|
229
|
|
|
|
214
|
|
|
Net loss attributable to Emeritus Corporation common shareholders
|
|
$
|
(7,075
|
)
|
|
$
|
(14,881
|
)
|
|
|
|
|
|
|
|
Basic and diluted loss per common share attributable to
|
|
|
|
|
|
Emeritus Corporation common shareholders:
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.19
|
)
|
|
$
|
(0.35
|
)
|
|
Discontinued operations
|
|
|
0.01
|
|
|
|
(0.03
|
)
|
|
|
|
$
|
(0.18
|
)
|
|
$
|
(0.38
|
)
|
|
|
|
|
|
|
|
Weighted average common shares outstanding-basic and diluted
|
|
|
39,147
|
|
|
|
39,117
|
|
|
|
|
Emeritus Corporation
|
|
Cash lease and interest expense
|
|
Three Months Ended
|
|
(unaudited)
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Projected
|
|
|
|
Actual
|
|
Range
|
|
|
|
June 30, 2009
|
|
September 30, 2009
|
|
Facility lease expense - GAAP
|
|
$ 29,473
|
|
$29,500 - $29,800
|
|
Less:
|
|
|
|
|
|
Straight-line rents
|
|
(4,954)
|
|
(4,900) - (5,000)
|
|
Above/below market rents
|
|
(2,457)
|
|
(2,500) - (2,600)
|
|
Plus:
|
|
|
|
|
|
Capital lease interest
|
|
3,610
|
|
3,600 - 3,700
|
|
Capital lease principal
|
|
2,120
|
|
2,100 - 2,200
|
|
Facility lease expense - CASH
|
|
$ 27,792
|
|
$27,800 - $28,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense - GAAP
|
|
$ 25,846
|
|
$26,270 - $26,750
|
|
Less:
|
|
|
|
|
|
Straight-line interest
|
|
(34)
|
|
(40) - (50)
|
|
Capital lease interest
|
|
(3,610)
|
|
(3,600) - (3,700)
|
|
Capitalized interest
|
|
30
|
|
20 - 50
|
|
Loan fee amortization
|
|
(772)
|
|
(800) - (900)
|
|
Interest expense - CASH
|
|
$ 21,460
|
|
$21,850 - $22,150
|
|
|
|
|
|
|
|
Depreciation – owned assets
|
|
$ 14,242
|
|
$14,330 – 14,400
|
|
Depreciation – capital and financing leases
|
|
3,224
|
|
3,300 – 3,400
|
|
Amortization – intangible assets
|
|
494
|
|
670 - 700
|
|
Total depreciation and amortization
|
|
$ 17,960
|
|
$18,300 - $18,500
|
Emeritus Corporation
Investor Relations
206-298-2909
