Emeritus Corporation (NYSE: ESC), a national provider of senior living services, today announced its third quarter 2011 results.

Operating Summary for Third Quarter 2011 Compared to Third Quarter 2010
  • Total revenues increased $73.3 million, or 29.3%, to $323.2 million
  • Adjusted EBITDAR increased $20.5 million, or 29.4%, to $90.4 million
  • CFFO, as adjusted, increased $4.2 million, or 34.6%, to $16.4 million
  • Same community average monthly revenue per occupied unit improved by 0.6% to $3,833
  • Same community average occupancy increased 20 basis points to 87.9%
  • Same community operating margin for Q3 2011 was 34.3% compared to 34.4%

Granger Cobb, President and Chief Executive Officer stated, “Our results for the third quarter reflect steady demand as we posted a 50 basis point sequential quarter improvement in same community occupancy and a 20 basis point improvement from the third quarter of last year. As we move forward we will strive to achieve the optimal balance between rate and occupancy growth while maintaining our commitment to aligning operating cost increases with rate growth.”

2011 Third Quarter Consolidated Results

Total revenue in the third quarter of 2011 increased 29.3% to $323.2 million. The $73.3 million revenue increase consisted primarily of $1.7 million in the Company’s same community portfolio of 266 communities operated during both periods, $70.7 million from the acquisition of communities (net of dispositions), and $1.1million in management fees primarily from the August 2010 acquisition of communities through a joint venture structure.

Total average monthly revenue per occupied unit for the consolidated portfolio increased 6.2% to $4,065 in the third quarter of 2011 from $3,827 in the third quarter of 2010. This increase in rate was primarily due to the consolidated communities added in the fourth quarter of 2010 that had higher average rates.

In the third quarter of 2011, total average occupancy for the consolidated portfolio was 86.5% compared to 87.1% in the third quarter of 2010, primarily from the acquisition of communities with lower occupancy rates.

Community operating expenses increased $59.1 million to $223.4 million in the third quarter of 2011. Approximately $48.9 million of the increase resulted from the acquisition of communities (net of dispositions), $1.2 million from same community operating expenses, and the remaining increase primarily from an adjustment to professional liability self-insurance reserves of approximately $8.5 million.

Community operating income increased $13.1 million, or 16.1%, to $94.8 million in the third quarter of 2011 compared to $81.7 million in the third 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 4.6% in the third quarter of 2011 from 5.2% in the prior year quarter. General and administrative expenses increased $3.2 million to $21.7 million in the third quarter of 2011, with the increase resulting primarily from additional staffing to support the communities added to the Company’s operated portfolio since the third quarter of 2010, as well as an increase in non-cash stock-based compensation expenses.

For the quarter ended September 30, 2011, adjusted earnings before interest, taxes, depreciation and amortization, and rents (“Adjusted EBITDAR”) increased $20.5 million, or 29.4%, to $90.4 million, with the increase primarily driven by the $13.1 million improvement in community operating income. For the same period, adjusted cash from facility operations increased $4.2 million, or 34.6%, to $16.4 million.

2011 Third Quarter Same Community Results

As of September 30, 2011, the consolidated Emeritus portfolio consisted of 333 communities, of which 266 communities are included in our definition of same communities. Total same community revenue increased $1.7 million to $235.6 million in the third 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 $3,833 in the third quarter of 2011 from $3,811 in the corresponding period in 2010. Average occupancy increased 20 basis points to 87.9% in the third quarter of 2011 from 87.7% in the comparative period last year.

The Company’s same community operating expenses increased $1.2 million to $154.7 million in the third quarter of 2011. Operating expenses reflected a $0.6 million, or 0.9%, increase in salary and wages as well as increases in food, repairs and maintenance, and utilities, offset by reductions in property taxes and bad debts. On a per resident day basis, same community salaries and wages increased by 0.2%.

Same community operating income (community revenues less community operating expenses) increased $0.5 million to $80.8 million with a 34.3% operating margin in the third quarter of 2011.

Significant Third Quarter 2011 Transactions

Acquisitions, Dispositions and Financings

In July 2011, the Company completed the acquisition of two communities consisting of 135 assisted living units located in Texas for a total purchase price of $19.7 million. These acquisitions were financed with mortgage debt of approximately $14.7 million and cash of $5.0 million. The 10-year mortgage debt is due in August 2021 and bears interest at an annual fixed rate of 6.02%.

In July 2011, the Company purchased a 101-unit assisted living, independent living, and memory care community located in Vermont for $20.9 million. The purchase was financed with mortgage debt of $15.8 million and cash of $5.1 million. The 10-year mortgage debt is due in August 2021 and bears interest at an annual fixed rate of 6.06%.

In August 2011, the Company sold a 170-unit assisted living community located in Texas for $5.8 million. The proceeds were used primarily to pay off the related mortgage debt.

Debt Refinancings

In September 2011, the Company entered into a loan agreement to borrow up to $29.6 million, secured by four communities. At closing, the Company received $25.0 million in loan proceeds, of which $22.0 million was used to repay existing debt. The remaining $4.6 million available under the loan agreement is available to expand and update the communities. The loans bear interest at a rate equal to the one-month London Interbank Offered Rate (“LIBOR”) plus 3.75%, with a LIBOR floor of 2.0% (5.75% at closing) with a maturity date of October 2014.

In August 2011, the Company entered into a loan agreement to borrow $28.8 million, secured by three communities. The loan proceeds were used to repay existing debt of $24.4 million on these communities. The new loans are due in September 2021 and bear interest at an annual fixed rate of 5.29%.

Impairment Charges

During the third quarter of 2010, five communities were designated as held for sale and the property and equipment of these communities are classified as property held for sale on our balance sheet as of September 30, 2011. A non-cash impairment charge related to these communities in the aggregate amount of $17.5 million was recorded in the current quarter and was included in discontinued operations for the three months ended September 30, 2011.

Subsequent Events

In October 2011, we entered into a loan agreement with KeyBank in the amount of $112.0 million to refinance the existing mortgage debt on 16 of our 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. We are required to make monthly principal payments of $500,000 beginning December 1, 2011, decreasing to $250,000 per month beginning December 1, 2012. Additionally, we are required to reduce the overall principal balance to specified levels during the term of the loan agreement.

2011 Guidance Update

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

The Company has updated its guidance for 2011 as follows:
  • Consolidated revenue in the range of $1.23 billion to $1.28 billion.
  • Routine capital expenditures in the range of $18.0 million to $19.0 million, which equates to about $600 to $650 per consolidated unit.
  • General and administrative expenses as a percent of total operated revenue to be approximately 4.8%, excluding non-cash stock-based compensation expenses.

Conference Call

The Company will host a conference call on Thursday, November 3, 2011, at 5:00 P.M. Eastern Time to discuss its financial results for the third quarter 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 Thursday, November 3, 2011, until midnight Eastern Time, Thursday, November 10, 2011. 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 380633.

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 the reconciliation of net cash provided by operating activities to 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 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 and nine month periods ended September 30, 2011 and 2010 (in thousands):
  Three Months Ended   Nine Months Ended
September 30, September 30,
  2011     2010   2011     2010
 
Net loss $ (43,705) $ (13,904) $ (44,287) $ (42,449)
Depreciation and amortization 32,540 20,244 90,065 61,345
Interest income (121) (123) (355) (366)
Interest expense 41,605 27,101 115,844 81,353
Net equity losses for unconsolidated JVs 817 770 1,252 319
Provision for income taxes 82 326 657 971
Loss from discontinued operations 17,258 559 17,655 1,729
Amortization of above/below market rents 1,845 2,184 5,778 6,531
Amortization of deferred gains (279) (297) (851) (904)
Stock-based compensation 2,173 1,546 6,882 4,477
Change in value of interest rate swaps (1,527) 170 (2,036) 182
Deferred revenue 1,145 951 2,285 3,456
Deferred straight-line rent 2,197 4,160 7,129 11,231
Contract buyout costs - - 6,256 -
Impairment of long-lived assets - (158) - 162
Gain on sale of investments - - (1,569) -
Acquisition gain - - (42,110) -
Acquisition, development and financing expenses 828 601 3,298 1,113
Self-insurance reserve adjustments   8,605   134   11,778   2,595
Adjusted EBITDA $ 63,463 44,264 177,671 131,745
Operating lease expense, net   26,972   25,644   80,305   72,980
Adjusted EBITDAR $ 90,435 $ 69,908 $ 257,976 $ 204,725

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 and nine month periods ended September 30, 2011 and 2010 (in thousands):
  Three Months Ended   Nine Months Ended
September 30, September 30,
  2011     2010   2011     2010
 
Net cash provided by operating activities $ 46,283 $ 22,576 $ 63,753 $ 60,499
Changes in operating assets and liabilities, net (30,025) (4,159) (10,232) (8,617)
Contract buyout costs - - 6,256 -
Repayment of capital lease and financing obligations (3,558) (3,010) (10,456) (8,864)
Recurring capital expenditures (5,000) (3,856) (13,632) (9,703)
Distributions from unconsolidated joint ventures, net (1)   113   512   1,464     1,381
Cash From Facility Operations 7,813 12,063 37,153 34,696
Self-insurance reserve adjustments   8,605   134   11,778   2,595
Cash From Facility Operations, as adjusted $ 16,418 $ 12,197 $ 48,931 $ 37,291
 
CFFO per share $ 0.18 $ 0.31 $ 0.84 $ 0.88
 
CFFO per share, as adjusted $ 0.37 $ 0.31 $ 1.11 $ 0.95

(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, 2010, filed with the SEC and any subsequent Quarterly Reports on Form 10-Q, 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 483 communities in 44 states representing capacity for approximately 43,100 units and approximately 50,300 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, 2010 and any subsequent Quarterly Report on Form 10-Q. The Company undertakes no obligation to update the information provided herein.
EMERITUS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)
(In thousands, except share data)
   
ASSETS
 
September 30, December 31,
Current Assets:   2011   2010
Cash and cash equivalents $ 60,753 $ 110,124
Short-term investments 3,296 2,874
Trade accounts receivable, net of allowance of $2,419 and $1,497 29,196 23,055
Other receivables 11,292 7,215
Tax, insurance, and maintenance escrows 22,806 22,271
Prepaid insurance expense 30,370 28,852
Deferred tax asset 19,121 15,841
Other prepaid expenses and current assets 6,789 6,417
Property held for sale   26,082     -
Total current assets 209,705 216,649
Investments in unconsolidated joint ventures 16,579 19,394
Property and equipment, net of accumulated depreciation of $379,272 and $304,495 2,374,827 2,163,556
Restricted deposits 16,725 14,165
Goodwill 118,872 75,820
Other intangible assets, net of accumulated amortization of $44,644 and $36,109 104,931 100,239
Other assets, net   23,066   23,969
Total assets $ 2,864,705 $ 2,613,792
 
LIABILITIES, SHAREHOLDERS' EQUITY AND NONCONTROLLING INTEREST
 
Current Liabilities:
Current portion of long-term debt $ 127,152 $ 73,197
Current portion of capital lease and financing obligations 15,911 14,262
Trade accounts payable 6,974 7,840
Accrued employee compensation and benefits 66,294 53,663
Accrued interest 9,342 7,969
Accrued real estate taxes 17,039 12,306
Accrued professional and general liability 20,608 10,810
Other accrued expenses 18,939 18,759
Deferred revenue 15,988 13,757
Unearned rental income   24,934   21,814
Total current liabilities 323,181 234,377
Long-term debt obligations, less current portion 1,503,805 1,305,757
Capital lease and financing obligations, less current portion 622,993 629,797
Deferred gain on sale of communities 5,063 5,914
Deferred straight-line rent 58,213 50,142
Other long-term liabilities   41,101   36,299
Total liabilities   2,554,356   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 44,360,382 and 44,193,818 shares
4 4
Additional paid-in capital 820,906 814,209
Accumulated other comprehensive income - 1,472
Accumulated deficit   (515,312)     (471,340)
Total Emeritus Corporation shareholders' equity 305,598 344,345
Noncontrolling interest – related party   4,751     7,161
Total shareholders’ equity   310,349     351,506
Total liabilities, shareholders' equity and noncontrolling interest $ 2,864,705 $ 2,613,792

EMERITUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
       
Three Months Ended Nine Months Ended
September 30, September 30,
  2011   2010   2011   2010
Revenues:
Community revenue $ 318,237 $ 246,030 $ 914,679 $ 716,690
Management fees   5,000   3,934   15,946   6,609
Total operating revenues   323,237   249,964   930,625   723,299
 
Expenses:

Community operations (exclusive of depreciation and amortization and community lease expense shown separately below)
223,423 164,343 627,812 476,817
General and administrative 21,671 18,423 66,605 52,694
Transaction costs 492 547 9,085 898
Depreciation and amortization 32,540 20,244 90,065 61,345
Community leases   31,014   31,988   93,212   90,742
Total operating expenses   309,140   235,545   886,779   682,496
Operating income from continuing operations   14,097   14,419   43,846   40,803
 
Other income (expense):
Interest income 121 123 355 366
Interest expense (41,605) (27,101) (115,844) (81,353)
Change in fair value of interest rate swaps 1,527 (170) 2,036 (182)
Net equity losses from unconsolidated joint ventures (817) (770) (1,252) (319)
Acquisition gain - - 42,110 -
Other, net   312   480   2,774   936
Net other expense   (40,462)   (27,438)   (69,821)   (80,552)
 
Loss from continuing operations before income taxes (26,365) (13,019) (25,975) (39,749)
Provision for income taxes   (82)   (326)   (657)   (971)
Loss from continuing operations (26,447) (13,345) (26,632) (40,720)
Loss from discontinued operations   (17,258)   (559)   (17,655)   (1,729)
Net loss (43,705) (13,904) (44,287) (42,449)
Net loss attributable to the noncontrolling interest   97   229   315   646
Net loss attributable to Emeritus Corporation common shareholders $ (43,608) $ (13,675) $ (43,972) $ (41,803)
 
Basic and diluted loss per common share attributable to
Emeritus Corporation common shareholders:
Continuing operations $ (0.59) $ (0.34) $ (0.59) $ (1.02)
Discontinued operations   (0.39)   (0.01)   (0.40)   (0.04)
$ (0.98) $ (0.35) $ (0.99) $ (1.06)
 
Weighted average common shares outstanding   44,316   39,477   44,270   39,353
EMERITUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
  Nine Months Ended September 30,
  2011     2010
Cash flows from operating activities:
Net loss $ (44,287) $ (42,449)

Adjustments to reconcile net loss to net cash provided by operating activities:

 
Depreciation and amortization 90,065 61,345
Amortization of above/below market rents 5,778 6,531
Amortization of deferred gains (851) (904)
Acquisition gain (42,110) -
Net loss on sale of assets 119 1,179
Impairment of long-lived assets 17,497 721
Gain on sale of investments (1,569) -
Amortization of loan fees 2,280 2,251
Allowance for doubtful receivables 5,839 3,614
Equity investment losses 1,252 319
Stock-based compensation 6,882 4,477
Change in fair value of interest rate swaps (2,036) 182
Deferred straight-line rent 7,129 11,231
Deferred revenue 2,285 3,456
Other 5,248 (71)
Changes in other operating assets and liabilities   10,232     8,617
Net cash provided by operating activities   63,753   60,499
 
Cash flows from investing activities:
Acquisition of property and equipment (23,114) (15,427)
Community acquisitions, net of cash acquired (180,229) -
Deposits 522 -
Proceeds from the sale of assets 16,339 2,733
Lease and contract acquisition costs (309) (739)
Advances (to) from affiliates and other managed communities, net (1,697) 850
Distributions from (contributions to) unconsolidated joint ventures, net   2,680     (19,295)
Net cash used in investing activities   (185,808)   (31,878)
 
Cash flows from financing activities:
Sale of stock, net 1,756 1,402
(Distributions to) contributions from noncontrolling interest (4,073) 414
(Increase) decrease in restricted deposits (2,432) 297
Debt issuance and other financing costs (4,419) (1,978)
Proceeds from long-term borrowings and financings 168,300 -
Repayment of long-term borrowings and financings (75,992) (23,209)
Repayment of capital lease and financing obligations   (10,456)     (8,864)
Net cash provided by (used in) financing activities   72,684   (31,938)
 
Net decrease in cash and cash equivalents (49,371) (3,317)
Cash and cash equivalents at the beginning of the period   110,124   46,070
Cash and cash equivalents at the end of the period $ 60,753 $ 42,753
EMERITUS CORPORATION
Lease, Interest and Depreciation Expense
For the Quarters Ended
(unaudited)
(In thousands)
   
Projected
Range
Q3 2011   Q4 2011
Community leases expense - GAAP $ 31,014 $ 31,100 - $31,400
Less:
Deferred straight-line rent (2,197) (2,200) - (2,300)
Above/below market rent (1,845) (1,900) - (2,000)
Plus:
Capital and financing lease interest 13,367 13,400 – 13,500
Capital lease principal 1,773   1,800 – 1,900
Community leases expense - CASH $ 42,112   $42,200 - $42,500
 
Interest expense – GAAP $ 41,605 $41,620 - $42,130
Less:
Straight-line interest (10) (10) - (15)
Capital and financing lease interest (13,367) (13,400) - (13,500)
Equipment capital lease interest (12) (10) – (15)
Loan fee amortization (806)   (800) - (900)
Interest expense - CASH $ 27,410   $27,400 - $27,700

 
Depreciation – owned assets $ 18,465 $ 18,500 – $18,600
Depreciation – capital and financing leases 11,325 11,300 – 11,400
Amortization – intangible assets 2,750   2,800 – 2,900
Total depreciation and amortization expense $ 32,540   $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
Q3 2010   Q4 2010   Q1 2011   Q2 2011   Q3 2011
Average consolidated communities 277.3 296.7 306.7 316.0 333.3
Average available units 24,618 26,926 28,134 28,843 30,173
Average occupied units 21,432 23,212 24,205 24,793 26,095
Average occupancy 87.1% 86.2% 86.0% 86.0% 86.5%
Average monthly revenue per occupied unit $ 3,827 $ 3,999 $ 4,059 $ 4,057 $ 4,065
Calendar days 92 92 90 91 92
 

Community revenues:
Community revenues $ 242,034 $ 274,845 $ 290,489 $ 297,501 $ 313,711
Move-in fees 4,543 4,856 4,960 5,135 5,456
Move-in incentives   (547)     (1,212)     (729)     (914)     (930)
Total community revenues $ 246,030   $ 278,489   $ 294,720   $ 301,722   $ 318,237
 

Community operating expenses:
Salaries and wages - regular and overtime $ 75,726 $ 88,031 $ 91,549 $ 94,607 $ 100,223
Average daily salary and wages $ 823 $ 957 $ 1,017 $ 1,040 $ 1,089
Average daily wages per occupied unit $ 38.41 $ 41.22 $ 42.02 $ 41.93 $ 41.75
 
Payroll taxes and employee benefits $ 25,232 $ 27,016 $ 33,425 $ 31,588 $ 33,366
Percent of salaries and wages 33.3% 30.7% 36.5% 33.4% 33.3%
 
Prior year self-insurance reserve adjustments $ 134 $ 2,668 $ 32 $ 3,141 $ 8,605
 
Utilities $ 12,158 $ 11,453 $ 13,492 $ 12,073 $ 15,351
Average monthly cost per occupied unit $ 189 $ 164 $ 186 $ 162 $ 196
 
Facility maintenance and repairs $ 6,123 $ 6,023 $ 7,420 $ 7,687 $ 8,498
Average monthly cost per occupied unit $ 95 $ 86 $ 102 $ 103 $ 109
 
All other community operating expenses $ 44,970 $ 50,132 $ 53,113 $ 56,262 $ 57,380
Average monthly cost per occupied unit $ 699 $ 720 $ 731 $ 756 $ 733
                 
Total community operating expenses $ 164,343   $ 185,323   $ 199,031   $ 205,358   $ 223,423
 
Community operating income $ 81,687 $ 93,166 $ 95,689 $ 96,364 $ 94,814
 
Operating income margin   33.2%   33.5%   32.5%   31.9%   29.8%

EMERITUS CORPORATION
Selected Consolidated and Same Community Information
For the Quarters Ended
(unaudited)
(Community revenue and operating expense in thousands)
 

 
  Q3 2010     Q4 2010     Q1 2011     Q2 2011     Q3 2011

Consolidated:
               
Average consolidated communities 277.3 296.7 306.7 316.0 333.3
Community revenue $ 246,030 $ 278,489 $ 294,720 $ 301,722 $ 318,237
Community operating expense $ 164,343 $ 185,323 $ 199,031 $ 205,358 $ 223,423
Average occupancy 87.1% 86.2% 86.0% 86.0% 86.5%
Average monthly revenue per unit $ 3,827 $ 3,999 $ 4,059 $ 4,057 $ 4,065
Operating income margin 33.2% 33.5% 32.5% 31.9% 29.8%
 

Same Community:
Average consolidated communities 266.0 266.0 266.0 266.0 266.0
Community revenue $ 233,830 $ 232,853 $ 233,921 $ 233,233 $ 235,576
Community operating expense $ 153,509 $ 149,689 $ 154,678 $ 152,800 $ 154,736
Average occupancy 87.7% 87.6% 87.6% 87.4% 87.9%
Average monthly revenue per unit $ 3,811 $ 3,803 $ 3,817 $ 3,820 $ 3,833
Operating income margin 34.4% 35.7% 33.9% 34.5% 34.3%

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