EMERITUS CORP\WA\ - FORM 8-K - EX-99.1 - EARNINGS RELEASE 2011

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8-K - EARNINGS RELEASE 2011 8-K - EMERITUS CORP\WA\	earnrel20118k.htm

NEWS RELEASE

For Immediate Release

EMERITUS ANNOUNCES OPERATING RESULTS FOR

FOURTH QUARTER AND FULL YEAR 2011

SEATTLE, WA, March 6, 2012 - Emeritus Corporation (NYSE: ESC), a national provider of senior living services, today announced its fourth quarter and full year 2011 results.

Operating Summary for the Full Year 2011 Compared to the Full Year 2010

·	Total revenues increased $247.7 million, or 24.6%, to $1.255 billion

·	Adjusted EBITDAR increased $60.9 million, or 21.3%, to $346.4 million

·	CFFO, as adjusted, increased $10.4 million, or 19.4%, to $64.0 million

·	Same community average monthly revenue per occupied unit improved by 1.2% to $3,829

·	Same community average occupancy increased 10 basis points to 87.8%

·	Same community operating margin was 34.2% compared to 35.2%

Operating Summary for Fourth Quarter 2011 Compared to Fourth Quarter 2010

·	Total revenues increased $40.4 million, or 14.2%, to $324.1 million

·	Adjusted EBITDAR increased $7.7 million, or 9.5%, to $88.5 million

·	CFFO, as adjusted, was $15.1 million compared to $16.3 million in the prior year period

·	Same community average monthly revenue per occupied unit improved by 0.6% to $3,831

·	Same community average occupancy increased 30 basis points to 88.0%

·	Same community operating margin for Q4 2011 was 34.0% compared to 35.8%

Granger Cobb, President and Chief Executive Officer commented, “In 2011, we continued to increase our key cash flow metrics, despite persistent economic headwinds. We are well-positioned with our current cost structure and controls, as well as our nationwide footprint, to grow margin as we benefit from favorable supply/demand characteristics and a shift to increased utilization of post-acute services.”

2011 Annual Consolidated Results

Total operating revenues increased by $247.7 million, or 24.6%, to $1.255 billion for the year ended December 31, 2011, compared to $1.007 billion in 2010. The total revenue increase consisted primarily of $225.7 million from the acquisition of communities (net of dispositions), $12.0 million, or an increase of 1.3%, from the Company’s portfolio of 262 communities operated during both periods, and $9.2 million from an increase in management fees primarily from the addition of the Sunwest Joint Venture communities in August 2010.

Total average monthly revenue per occupied unit for the consolidated portfolio increased to $4,065 in 2011 from $3,817 in 2010, a 6.5% improvement. For the total consolidated portfolio, average occupancy in 2011 decreased 60 basis points to 86.3% compared to 86.9% in 2010. The increase in rate and decrease in occupancy were due, in large part, to acquired communities with higher rates and lower levels of occupancy than the Company’s same community portfolio.

Community operating expenses increased $185.0 million to $847.1 million in 2011 compared to $662.1 million in 2010. Approximately $157.6 million of the increase resulted from the acquisition of communities (net of dispositions), while $17.0 million, or an increase of 2.9%, was from the 262 same communities, and $10.4 million was from corporate expenses not allocated to communities, primarily related to changes in self-insurance reserves for claims attributable to prior years.

Community operating income (community revenues less community operating expenses) increased $53.5 million, or 16.1%, to $386.5 million in 2011 compared with $333.0 million in 2010.

General and administrative expenses increased $14.3 million to $88.8 million in 2011 compared to $74.5 million in 2010, with the increase resulting primarily from a labor and benefit expense increase of $11.2 million from additional staffing to support the increase in the Company’s operated portfolio during the latter part of 2010, as well as higher non-cash stock compensation expenses of $2.2 million. As a percent of total operated community revenues, which includes revenues of managed communities, general and administrative expenses, excluding stock compensation expenses, decreased to 4.8% in 2011 compared to 5.5% in 2010.

For the year ended December 31, 2011, adjusted earnings before interest, taxes, depreciation and amortization, and rents (“Adjusted EBITDAR”) increased 21.3% to $346.4 million from $285.6 million for 2010, with the increase primarily driven by the $53.5 million improvement in community operating income. For the same period, CFFO, as adjusted, increased $10.4 million, or 19.4%, to $64.0 million from $53.6 million for 2010.

2011 Fourth Quarter Consolidated Results

Total revenue in the fourth quarter of 2011 increased 14.2% to $324.1 million. The $40.4 million revenue increase consisted primarily of $2.2 million in the Company’s same community portfolio of 262 communities operated during both periods and $38.7 million from the acquisition of communities (net of dispositions).

Total average monthly revenue per occupied unit for the consolidated portfolio increased 2.0% to $4,080 in the fourth quarter of 2011 from $3,999 in the fourth quarter of 2010. This increase in rate was partially due to 27 consolidated communities added in November 2010 that had higher average rates.

In the fourth quarter of 2011, total average occupancy for the consolidated portfolio was 86.6% compared to 86.2% in the fourth quarter of 2010, a 40 basis point improvement.

Community operating expenses increased $34.0 million to $219.4 million in the fourth quarter of 2011. Approximately $26.8 million of the increase resulted from the acquisition of communities (net of dispositions), $5.4 million from same community operating expenses, and the remaining increase primarily from changes in professional liability and workers’ compensation self-insurance reserves.

Community operating income increased $6.5 million, or 6.9%, to $99.6 million in the fourth quarter of 2011 compared to $93.2 million in the fourth quarter of 2010.

Excluding non-cash stock-based compensation expenses, general and administrative expenses as a percent of total operated community revenue, which includes revenues of managed communities, decreased to 5.0% in the fourth quarter of 2011 from 5.2% in the prior year quarter. General and administrative expenses in the fourth quarter of 2011 were held essentially flat from the prior year quarter.

For the quarter ended December 31, 2011, Adjusted EBITDAR increased $7.7 million, or 9.5%, to $88.5 million, with the increase primarily driven by the $6.5 million increase in community operating income.

2011 Fourth Quarter Same Community Results

As of December 31, 2011, the consolidated Emeritus portfolio consisted of 328 communities, of which 262 communities are included in the Company’s definition of same communities. Total same community revenue increased $2.2 million to $232.5 million in the fourth quarter of 2011, with $1.4 million coming from rate increases and the balance from occupancy improvements. Average monthly revenue per occupied unit increased 0.6% to $3,831 in the fourth quarter of 2011 from $3,807 in the corresponding period in 2010. Average occupancy increased 30 basis points to 88.0% in the fourth quarter of 2011 from 87.7% in the comparative period last year.

The Company’s same community operating expenses increased $5.4 million to $153.4 million in the fourth quarter of 2011. Operating expenses reflected a $0.3 million, or 0.5%, increase in salary and wages as well as increases in health insurance, workers’ compensation insurance, professional liability insurance, and repairs and maintenance expenses, offset by reductions in certain other categories. On a per resident day basis, same community salaries and wages decreased by 0.1%.

Same community operating income decreased $3.3 million to $79.1 million with a 34.0% operating margin in the fourth quarter of 2011.

Fourth Quarter 2011 Transactions and Refinancings

Dispositions

In December 2011, the Company sold five communities and paid off the related mortgage debt totaling $19.6 million.

Debt Refinancings

In October 2011, the Company entered into a loan agreement with KeyBank in the amount of $112.0 million to refinance the existing mortgage debt on 16 communities. The loan agreement has a three-year term and interest accrues at a rate equal to the one-month LIBOR plus a margin, which ranges from 4.75% to 6.75%, depending upon the loan-to-value ratio of the communities each month. The Company is required to make monthly principal payments of $500,000, decreasing to $250,000 per month beginning December 1, 2012.

In December 2011, the Company entered into a loan agreement with Fannie Mae in the amount of $53.3 million to refinance seven of the 16 communities mentioned in the financing above. The Fannie Mae loan agreement has a ten-year term and interest accrues at a fixed rate of 4.93%. Monthly principal and interest payments are based on a 30-year amortization period, with the balance due in full on January 1, 2022.

In December 2011, the Company entered into a loan agreement with the Department of Housing and Urban Development (HUD) in the amount of $17.9 million to refinance debt on three communities. The HUD loan agreement has a 35-year term and interest accrues at a fixed rate of 3.70%. The balance is due in full on January 1, 2047.

2012 Guidance Update

The Company provides guidance in certain key categories. The guidance pertains to the Company’s existing portfolio and excludes future acquisitions.

The Company’s guidance for 2012 is as follows:

·	Consolidated revenue in the range of $1.3 billion to $1.325 billion.

·	Routine capital expenditures in the range of $24.0 million to $26.0 million.

·	General and administrative expenses as a percent of total operated revenue to be approximately 4.8%, excluding non-cash stock-based compensation expenses.

·	CFFO, as adjusted, in the range of $1.60 to $1.70 per share.

In addition to annual guidance, the Company expects CFFO, as adjusted, in the first quarter of 2012 to be in the range of $0.30 to $0.34 per share.

Webcast and Conference Call

The Company will host a webcast and conference call on Tuesday, March 6, 2012, at 5:00 P.M. Eastern Time to discuss its financial results for the fourth quarter and full year of 2011.

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 (877) 407-3982, or for international participants (201) 493-6780. A replay of the conference call will be available after 8:00 P.M. Eastern Time on Tuesday, March 6, 2012, until midnight Eastern Time on Tuesday, March 13, 2012. The dial in numbers for the replay are (877) 870-5176, or for international participants (858) 384-5517. To access the telephonic replay, enter the conference ID 388395.

Non-GAAP Financial Measures

Adjusted EBITDA/EBITDAR and CFFO are financial measures of operating performance that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). The Company believes that these non-GAAP measures are useful in identifying trends in 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 the senior living industry. The Company strongly urges you to review the reconciliation of net loss to Adjusted EBITDA/EBITDAR, and the reconciliation of net cash provided by operating activities to CFFO, provided below, along with the Company’s consolidated balance sheets, statements of operations, and cash flows. The Company defines Adjusted EBITDA/EBITDAR and CFFO and provides other information about these non-GAAP measures in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, to be filed with the Securities and Exchange Commission (the “SEC”).

The table below shows the reconciliation of net loss to Adjusted EBITDA/EBITDAR for the three months and years ended December 31, 2011 and 2010 (in thousands):

	Three Months Ended						Years Ended
	December 31,						December 31,
	2011			2010			2011			2010

Net loss	$	(27,976	)	$	(15,393	)	$	(72,263	)	$	(57,842	)
Depreciation and amortization		32,307			25,352			122,372			86,697
Interest income		(74	)		(128	)		(429	)		(494	)
Interest expense		41,418			33,599			157,262			114,952
Net equity losses for unconsolidated JVs		1,829			596			3,081			915
Provision for income taxes		362			(1,733	)		1,019			(762	)
Loss from discontinued operations		3,915			(384	)		21,570			1,345
Amortization of above/below market rents		1,754			2,104			7,532			8,635
Loss on lease termination		-			2,419			-			2,419
Amortization of deferred gains		(274	)		(293	)		(1,125	)		(1,197	)
Stock-based compensation		1,224			1,457			8,106			5,934
Change in value of interest rate swaps		(1,045	)		-			(3,081	)		182
Deferred revenue		316			(84	)		2,601			3,372
Deferred straight-line rent		1,663			3,404			8,792			14,635
Contract buyout costs		1,586			-			7,842			-
Impairment of long-lived assets		-			-			-			162
Loss (gain) on sale of assets		(73	)		-			(73	)		-
Gain on sale of investments		-			-			(1,569	)		-
Acquisition gain		-			-			(42,110	)		-
Acquisition, development and financing expenses		(895	)		1,212			2,403			2,325
Self-insurance reserve adjustments		4,133			2,668			15,911			5,263
Adjusted EBITDA	$	60,170			54,796			237,841			186,541
Operating lease expense, net		28,322			26,040			108,627			99,020
Adjusted EBITDAR	$	88,492		$	80,836		$	346,468		$	285,561

The following table shows the reconciliation of net cash provided by operating activities to CFFO and CFFO as adjusted for self-insurance reserves relating to prior years, for the three months and years ended December 31, 2011 and 2010 (in thousands):

	Three Months Ended						Years Ended
	December 31,						December 31,
	2011			2010			2011			2010

Net cash provided by operating activities	$	10,349		$	23,202		$	74,102		$	83,701
Changes in operating assets and liabilities, net		6,420			(480	)		(3,812	)		(9,097	)
Contract buyout costs		1,586			-			7,842			-
Repayment of capital lease and financing obligations		(3,793	)		(3,234	)		(14,249	)		(12,098	)
Recurring capital expenditures		(3,667	)		(4,389	)		(17,299	)		(14,092	)
Distributions from unconsolidated joint ventures, net (1)		55			594			1,519			1,975
Cash From Facility Operations		10,950			15,693			48,103			50,389
Self-insurance reserve adjustments		4,133			2,668			15,911			5,263
Unusual income tax benefits adjustment		-			(2,037	)		-			(2,037	)
Cash From Facility Operations, as adjusted	$	15,083		$	16,324		$	64,014		$	53,615

CFFO per share	$	0.25		$	0.38		$	1.09		$	1.26

CFFO per share, as adjusted	$	0.34		$	0.39		$	1.44		$	1.34

(1) Excludes a $1.2 million cash distribution of proceeds received in the third quarter of 2011 from the refinancing of debt.

We define recurring capital expenditures as actual costs incurred to maintain our communities for their intended business purpose and exclude expenditures for acquisitions, development, expansions and general corporate purposes.

For a more detailed understanding of Emeritus, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, to be filed with the SEC, or visit the Company’s Internet site at www.emeritus.com to obtain copies.

ABOUT THE COMPANY

Emeritus Corporation is a national provider of senior living services. 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 478 communities in 44 states representing capacity for approximately 42,600 units and approximately 49,700 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 refinancings; our ability to control community operation expenses 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 and workers’ compensation 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, 2011 to be filed with the SEC. The Company undertakes no obligation to update the information provided herein.

Contact:

Investor Relations

(206) 298-2909

Media Contacts:
Liz Brady		Sari Martin
Liz.brady@icrinc.com		Sari.martin@icrinc.com
646-277-1226		203-682-8345

EMERITUS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(In thousands, except share data)

ASSETS

	December 31,			December 31,
Current Assets:	2011			2010
Cash and cash equivalents	$	43,670		$	110,124
Short-term investments		3,585			2,874
Trade accounts receivable, net of allowance of $2,294 and $1,497		26,195			23,055
Other receivables		16,117			7,215
Tax, insurance, and maintenance escrows		20,501			22,271
Prepaid insurance expense		36,020			28,852
Deferred tax asset		19,934			15,841
Other prepaid expenses and current assets		8,140			6,417
Total current assets		174,162			216,649
Investments in unconsolidated joint ventures		15,428			19,394
Property and equipment, net of accumulated depreciation of $407,952 and $304,495		2,355,425			2,163,556
Restricted deposits		16,427			14,165
Goodwill		118,725			75,820
Other intangible assets, net of accumulated amortization of $48,722 and $36,109		100,873			100,239
Other assets, net		29,288			23,969
Total assets	$	2,810,328		$	2,613,792

LIABILITIES, SHAREHOLDERS' EQUITY AND NONCONTROLLING INTEREST

Current Liabilities:
Current portion of long-term debt	$	74,175		$	73,197
Current portion of capital lease and financing obligations		17,004			14,262
Trade accounts payable		7,959			7,840
Accrued employee compensation and benefits		70,936			53,663
Accrued interest		9,061			7,969
Accrued real estate taxes		11,791			12,306
Accrued professional and general liability		24,525			10,810
Other accrued expenses		19,477			18,759
Deferred revenue		16,348			13,757
Unearned rental income		22,965			21,814
Total current liabilities		274,241			234,377
Long-term debt obligations, less current portion		1,528,710			1,305,757
Capital lease and financing obligations, less current portion		619,088			629,797
Deferred gain on sale of communities		4,789			5,914
Deferred straight-line rent		61,481			50,142
Other long-term liabilities		39,283			36,299
Total liabilities		2,527,592			2,262,286

Commitments and contingencies
Shareholders' Equity and Noncontrolling Interest:
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
44,989,861 and 44,193,818 shares		4			4
Additional paid-in capital		822,345			814,209
Accumulated other comprehensive income		-			1,472
Accumulated deficit		(543,249	)		(471,340	)
Total Emeritus Corporation shareholders' equity		279,100			344,345
Noncontrolling interest – related party		3,636			7,161
Total shareholders’ equity		282,736			351,506
Total liabilities, shareholders' equity and noncontrolling interest	$	2,810,328		$	2,613,792

EMERITUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)

	Three Months Ended						Years Ended
	December 31,						December 31,
	2011			2010			2011			2010
Revenues:
Community revenue	$	318,986		$	278,489		$	1,233,665		$	995,179
Management fees		5,159			5,277			21,105			11,886
Total operating revenues		324,145			283,766			1,254,770			1,007,065

Expenses:
Community operations (exclusive of depreciation and amortization
and community lease expense shown separately below)		219,355			185,323			847,167			662,140
General and administrative		22,162			21,786			88,767			74,480
Transaction costs		741			944			9,826			1,842
Depreciation and amortization		32,307			25,352			122,372			86,697
Community leases		31,739			31,548			124,951			122,290
Total operating expenses		306,304			264,953			1,193,083			947,449
Operating income from continuing operations		17,841			18,813			61,687			59,616

Other income (expense):
Interest income		74			128			429			494
Interest expense		(41,418	)		(33,599	)		(157,262	)		(114,952	)
Change in fair value of interest rate swaps		1,045			-			3,081			(182	)
Net equity losses from unconsolidated joint ventures		(1,829	)		(596	)		(3,081	)		(915	)
Acquisition gain		-			-			42,110			-
Other, net		588			(2,256	)		3,362			(1,320	)
Net other expense		(41,540	)		(36,323	)		(111,361	)		(116,875	)

Loss from continuing operations before income taxes		(23,699	)		(17,510	)		(49,674	)		(57,259	)
Provision for income taxes		(362	)		1,733			(1,019	)		762
Loss from continuing operations		(24,061	)		(15,777	)		(50,693	)		(56,497	)
Loss from discontinued operations		(3,915	)		384			(21,570	)		(1,345	)
Net loss		(27,976	)		(15,393	)		(72,263	)		(57,842	)
Net loss attributable to the noncontrolling interest		39			237			354			883
Net loss attributable to Emeritus Corporation common shareholders	$	(27,937	)	$	(15,156	)	$	(71,909	)	$	(56,959	)

Basic and diluted loss per common share attributable to
Emeritus Corporation common shareholders:
Continuing operations	$	(0.54	)	$	(0.37	)	$	(1.14	)	$	(1.39	)
Discontinued operations		(0.09	)		0.01			(0.49	)		(0.03	)
	$	(0.63	)	$	(0.36	)	$	(1.63	)	$	(1.42	)

Weighted average common shares outstanding		44,437			41,816			44,312			39,974

EMERITUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
	Years Ended December 31,
	2011			2010
Cash flows from operating activities:
Net loss	$	(72,263	)	$	(57,842	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		122,372			86,697
Amortization of above/below market rents		7,532			8,635
Loss on lease termination		-			2,419
Amortization of deferred gains		(1,125	)		(1,197	)
Acquisition gain		(42,110	)		-
Net loss on sale of assets		902			795
Impairment of long-lived assets		17,947			722
Loss on early extinguishment of debt		1,978			-
Gain on sale of investments		(1,569	)		-
Amortization of loan fees		3,283			2,964
Allowance for doubtful receivables		8,090			5,418
Equity investment losses		3,081			915
Stock-based compensation		8,106			5,934
Change in fair value of interest rate swaps		(3,081	)		182
Deferred straight-line rent		8,792			14,635
Deferred revenue		2,601			3,372
Other		5,754			955
Changes in other operating assets and liabilities		3,812			9,097
Net cash provided by operating activities		74,102			83,701

Cash flows from investing activities:
Acquisition of property and equipment		(33,340	)		(23,593	)
Community acquisitions, net of cash acquired		(180,228	)		(33,015	)
Deposits		525			-
Proceeds from the sale of assets		40,947			5,262
Lease and contract acquisition costs		(368	)		(1,508	)
Advances (to) from affiliates and other managed communities, net		(2,224	)		(530	)
Distributions from (contributions to) unconsolidated joint ventures, net		2,028			(18,218	)
Net cash used in investing activities		(172,660	)		(71,602	)

Cash flows from financing activities:
Sale of stock, net		2,804			82,623
Contributions from (distributions to) from noncontrolling interest		(6,668	)		1,227
Decrease (increase) in restricted deposits		(2,092	)		437
Interest rate agreements on derivative instruments		(1,590	)		-
Debt issuance and other financing costs		(10,063	)		(2,776	)
Proceeds from long-term borrowings and financings		297,991			28,000
Repayment of long-term borrowings and financings		(234,029	)		(45,458	)
Repayment of capital lease and financing obligations		(14,249	)		(12,098	)
Net cash provided by (used in) financing activities		32,104			51,955

Net decrease in cash and cash equivalents		(66,454	)		64,054
Cash and cash equivalents at the beginning of the period		110,124			46,070
Cash and cash equivalents at the end of the period	$	43,670		$	110,124

EMERITUS CORPORATION
Lease, Interest and Depreciation Expense
For the Quarters Ended
(unaudited)
(In thousands)

				Projected
				Range
		Q4 2011			Q1 2012
Community leases expense - GAAP	$	31,739		$	31,500 - $31,600
Less:
Deferred straight-line rent		(1,663	)		(1,200) - (1,250	)
Above/below market rent		(1,754	)		(1,800) - (1,850	)
Plus:
Capital and financing lease interest		13,391			13,100 – 13,300
Capital lease principal		2,541			3,400 – 3,500
Community leases expense - CASH	$	44,254		$	45,000 - $45,300



Interest expense – GAAP	$	41,418		$	38,830 - $39,400
Less:
Capital and financing lease interest		(13,391	)		(13,100) - 13,300	)
Straight-line and equipment capital lease interest		(21	)		(30) - (50	)
Loan fee amortization		(1,003	)		(900) - (950	)
Interest expense - CASH	$	27,003		$	24,800 - $25,100

Depreciation – owned assets	$	18,241		$	18,600 – $18,700
Depreciation – capital and financing leases		11,326			11,300 – 11,400
Amortization – intangible assets		2,740			2,700 – 2,800
Total depreciation and amortization expense	$	32,307		$	32,600 - $32,900

EMERITUS CORPORATION

Consolidated Supplemental Financial Information

For the Quarters Ended

(unaudited)

(Dollars in thousands, except non-financial and per-unit data)

Non-Financial Data		Q4 2010			Q1 2011			Q2 2011			Q3 2011			Q4 2011
Average consolidated communities		296.7			306.7			316.0			333.3			332.8
Average available units		26,926			28,134			28,843			30,173			30,096
Average occupied units		23,212			24,205			24,793			26,095			26,059
Average occupancy		86.2	%		86.0	%		86.0	%		86.5	%		86.6	%
Average monthly revenue per occupied unit	$	3,999		$	4,059		$	4,057		$	4,065		$	4,080
Calendar days		92			90			91			92			92

Community revenues:
Community revenues	$	274,845		$	290,489		$	297,501		$	313,711		$	313,613
Move-in fees		4,856			4,960			5,135			5,456			5,751
Move-in incentives		(1,212	)		(729	)		(914	)		(930	)		(378	)
Total community revenues	$	278,489		$	294,720		$	301,722		$	318,237		$	318,986

Community operating expenses:
Salaries and wages - regular and overtime	$	88,031		$	91,549		$	94,607		$	100,223		$	100,884
Average daily salary and wages	$	957		$	1,017		$	1,040		$	1,089		$	1,097
Average daily wages per occupied unit	$	41.22		$	42.02		$	41.93		$	41.75		$	42.08

Payroll taxes and employee benefits	$	27,016		$	33,425		$	31,588		$	33,366		$	32,347
Percent of salaries and wages		30.7	%		36.5	%		33.4	%		33.3	%		32.1	%

Prior year self-insurance reserve adjustments	$	2,668		$	32		$	3,141		$	8,605		$	4,133

Utilities	$	11,453		$	13,492		$	12,073		$	15,351		$	12,586
Average monthly cost per occupied unit	$	164		$	186		$	162		$	196		$	161

Facility maintenance and repairs	$	6,023		$	7,420		$	7,687		$	8,498		$	8,178
Average monthly cost per occupied unit	$	86		$	102		$	103		$	109		$	105

All other community operating expenses	$	50,132		$	53,113		$	56,262		$	57,380		$	61,227
Average monthly cost per occupied unit	$	720		$	731		$	756		$	733		$	783

Total community operating expenses	$	185,323		$	199,031		$	205,358		$	223,423		$	219,355

Community operating income	$	93,166		$	95,689		$	96,364		$	94,814		$	99,631

Operating income margin		33.5	%		32.5	%		31.9	%		29.8	%		31.2	%

EMERITUS CORPORATION
Selected Consolidated and Same Community Information For the Quarters Ended
(unaudited) (Community revenue and operating expense in thousands)
		Q4 2010			Q1 2011			Q2 2011			Q3 2011			Q4 2011
Consolidated:
Average consolidated communities		296.7			306.7			316.0			333.3			332.8
Community revenue	$	278,489		$	294,720		$	301,722		$	318,237		$	318,986
Community operating expense	$	185,323		$	199,031		$	205,358		$	223,423		$	219,355
Average occupancy		86.2	%		86.0	%		86.0	%		86.5	%		86.6	%
Average monthly revenue per unit	$	3,999		$	4,059		$	4,057		$	4,065		$	4,080
Operating income margin		33.5	%		32.5	%		31.9	%		29.8	%		31.2	%

Same Community:
Average consolidated communities		262.0			262.0			262.0			262.0			262.0
Community revenue	$	230,371		$	231,510		$	230,870		$	233,266		$	232,526
Community operating expense	$	147,950		$	152,953		$	151,012		$	152,954		$	153,390
Average occupancy		87.7	%		87.8	%		87.5	%		88.1	%		88.0	%
Average monthly revenue per unit	$	3,807		$	3,823		$	3,825		$	3,837		$	3,831
Operating income margin		35.8	%		33.9	%		34.6	%		34.4	%		34.0	%

EMERITUS CORP\WA\ - FORM 8-K - EX-99.1 - EARNINGS RELEASE 2011 - March 6, 2012

Attached files

EMERITUS CORP\WA\ Reports