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And with that, I would like to turn the call over to Bruce Mackey.Bruce Mackey Thanks, Tim. And thanks, everyone, for joining us this afternoon. Just after market close, we reported net income from continuing operations of $0.23 per basic share and $0.22 per diluted share for the three months ended June 30, 2010. This compares to $0.29 per basic share and $0.26 per diluted share that we reported for the same period a year ago. However, second quarter of 2010 was a much stronger quarter for Five Star. Income from continuing operations for the second quarter of 2010 included several items that in aggregate resulted in a positive impact of $0.02 per basic share and $0.01 per diluted share respectively. Income from continuing operations for the second quarter of 2009 included several items that in aggregate resulted in a positive impact of $0.20 per basic share and $0.17 per diluted share respectively. Paul will review those one-time items that occurred during both periods in his prepared remarks. So excluding non-recurring items, second quarter 2010 income from continuing operations was $0.21 per basic and diluted share, which was a substantial increase over the second quarter of 2009 income from continuing operations of $0.12 per basic share and $0.09 per diluted share. As I will outline in a moment, I think we stand together with our peers in looking for an upturn in occupancy. It is clear that Five Star stands along among our peers when it comes to profitability. Of the four largest publicly traded senior living operators in the United States, based on units, Five Star alone has achieved profitability in each and every one of the past six quarters. We think this best-in-class operating performance in a challenging market environment underscores Five Star’s value, differentiates us from our peers, and shows that Five Star is proudly positioned to benefit from occupancy increases in the future.
I would now give you some highlights from what was a massive quarter. On June 16, we announced the outcome of discussions between the Senior Housing Properties Trust board of trustees and Five Star’s Board of Directors regarding long-term strategies.The boards discussed a range of topics, including but not limited to changing one or more of the existing leases between Senior Housing and Five Star to a management arrangement between a Senior Housing-owned taxable subsidiary or TRS and Five Star; the possibility of combining Five Star into a Senior Housing-owned TRS; taking other actions to change the contractual arrangements between Senior Housing and Five Star; and lastly, maintaining the status quo. It was a positive exercise, but at the end of the day, the gap between interests of both companies which should make the bridge. For example, Senior Housing placed little value on Five Star’s plus $100 million of net operating loss or NOL carry-forwards, because Senior Housing as a REIT does not pay taxes, and with the change of control, the value of these NOLs would be greatly reduced. In addition, Five Star’s Board places greater value on the non-core portion of the business, such as the pharmacy, and the Senior Housing. The ultimate outcome was that the Boards agreed to consider the TRS structure, the future acquisitions of senior living communities that the companies may acquire together. On June 25, we announced Five Star’s additions of broad market Russell 3000 Index following Russell’s reconstitution of a comprehensive set of the US and global equity entities. As many of you know, the Russell indices are widely used by investment managers and institutional investor for index funds and in benchmark, both passive and active investment strategies. Read the rest of this transcript for free on seekingalpha.com