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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended March 31, 2005

OR

o
TRANSITION REPORT PURSUANT TO SECTION 13 O 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
  
to
  

Commission file number
000-32607

CNL RETIREMENT PROPERTIES, INC.
(Exact name of registrant as specified in its charter)

Maryland
59-3491443
(State of other jurisdiction
of incorporation or organization)
(I.R.S. Employer
Identification No.)

450 South Orange Avenue Orlando, Florida 32801
(Address of principal executive offices and zip code)

(407) 650-1000
Registrant's telephone number (including area code)



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ  No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes þ No o

The number of shares of common stock outstanding as of May 5, 2005, was 248,762,194.




CONTENTS


Part I - Financial Information
  
 
Page
Item 1. Financial Statements:
  
   
1
   
2
   
3
   
4
   
5-17
   
18-32
   
32
   
33
   
   
Part II - Other Information
  
   
33
   
33
   
34
   
34
   
34
   
Item 6. Exhibits
34-37
   
38
   
Exhibits
  



CNL RETIREMENT PROPERTIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

   
March 31,
2005
  
December 31,
2004
  
Assets
  
(Unaudited)
      
Real estate investment properties:
              
Accounted for using the operating method, net
 
$
2,808,043
  
$
2,595,513
  
Accounted for using the direct financing method
    
482,429
    
480,051
  
Intangible lease costs, net
    
104,081
    
98,781
  
     
3,394,553
    
3,174,345
  
               
Cash and cash equivalents
    
101,710
    
51,781
  
Restricted cash
    
21,606
    
34,430
  
Accounts and other receivables, net
    
20,405
    
20,545
  
Deferred costs, net
    
18,517
    
17,469
  
Accrued rental income
    
64,469
    
52,290
  
Other assets
    
17,910
    
11,412
  
Real estate held for sale
    
4,820
    
1,578
  
Goodwill
    
5,791
    
5,791
  
   
$
3,649,781
  
$
3,369,641
  
               
Liabilities and stockholders’ equity
              
Liabilities:
              
Mortgages payable
  
$
1,196,804
  
$
937,589
  
Bonds payable
    
94,419
    
94,451
  
Construction loans payable
    
98,193
    
81,508
  
Line of credit
    
20,000
    
20,000
  
Term loan
    
—
    
60,000
  
Due to related parties
    
5,560
    
1,632
  
Accounts payable and other liabilities
    
28,657
    
33,937
  
Intangible lease liability, net
    
3,859
    
3,742
  
Deferred income
    
5,114
    
4,811
  
Security deposits
    
29,125
    
26,253
  
Total liabilities
    
1,481,731
    
1,263,923
  
               
Commitments and contingencies
              
               
Minority interests
    
3,360
    
2,361
  
               
Stockholders’ equity:
              
Preferred stock, without par value
Authorized and unissued 3,000 shares
    
—
    
—
  
Excess shares, $.01 par value per share
Authorized and unissued 103,000 shares
    
—
    
—
  
Common stock, $.01 par value per share
Authorized one billion shares,
issued 247,300 and 238,485 shares, respectively,
outstanding 245,589 and 237,547 shares, respectively
    
2,456
    
2,376
  
Capital in excess of par value
    
2,206,709
    
2,135,498
  
Accumulated distributions in excess of net income
    
(44,475
)
  
(34,517
)
Total stockholders’ equity
   
2,164,690
    
2,103,357
  
   
$
3,649,781
  
$
3,369,641
  



See accompanying notes to condensed consolidated financial statements.

1

CNL RETIREMENT PROPERTIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except per share data)

   
Quarter Ended March 31,
  
   
2005
  
2004
  
Revenues:
          
Seniors’ Housing:
              
Rental income from operating leases
  
$
56,000
  
$
36,590
  
Earned income from direct financing leases
    
15,312
    
12,642
  
FF&E reserve income
    
1,599
    
1,437
  
Contingent rent
    
1,721
    
49
  
Medical Office Buildings:
              
Rental income from operating leases
    
13,136
    
—
  
Tenant expense reimbursements
    
2,710
    
—
  
Property management and development fees
    
1,215
    
—
  
     
91,693
    
50,718
  
Expenses:
              
Seniors’ Housing property expenses
    
259
    
321
  
Medical Office Buildings operating expenses
    
5,486
    
—
  
General and administrative
    
4,029
    
2,280
  
Asset management fees to related party
    
4,347
    
2,259
  
Provision for doubtful accounts
    
750
    
1,250
  
Impairment of long-lived assets
    
6,197
    
—
  
Depreciation and amortization
    
22,857
    
9,533
  
     
43,925
    
15,643
  
               
Operating income
    
47,768
    
35,075
  
               
Interest and other income
    
706
    
602
  
Interest and loan cost amortization expense
    
(15,539
)
  
(7,969
)
               
Income before equity in earnings of unconsolidated entity,
minority interests in income of consolidated subsidiaries and discontinued operations
    
32,935
    
27,708
  
               
Equity in earnings of uncon