8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) February 24, 2015

Capital Senior Living Corporation

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

1-13445	75-2678809
(Commission File Number)	(IRS Employer Identification No.)

14160 Dallas Parkway Suite 300 Dallas, Texas	75254
(Address of principal executive offices)	(Zip Code)

(972) 770-5600

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On February 26, 2015, Capital Senior Living Corporation (the “Company”) announced its financial results for the fourth quarter and fiscal year ended December 31, 2014 by issuing a press release. The full text of the press release issued in connection with the announcement is attached hereto as Exhibit 99.1.

The information being furnished under Item 2.02, Item 7.01, Exhibit 99.1 and Exhibit 99.2 shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such a filing. The press release and the presentation referenced below contain, and may implicate, forward-looking statements regarding the Company and include cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated.

In the press release and the presentation referenced below, the Company’s management utilizes financial measures of operating performance, including adjusted EBITDAR, adjusted EBITDAR margin, adjusted net income and adjusted CFFO, that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures may have material limitations in that they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP. As a result, these non-GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with 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 income from operations to adjusted EBITDAR and adjusted EBITDAR margin and the reconciliation of net loss to adjusted net income and adjusted CFFO, each of which is included at the end of the Company’s press release, along with the Company’s consolidated balance sheets, statements of operations, and statements of cash flows.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.

(e) Adoption of Compensatory Plan.

On February 24, 2015, the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) approved the Company’s 2015 Incentive Compensation Plan (the “Plan”). The Plan provides performance bonus opportunities to the Company’s executive management, including certain eligible named executive officers (collectively, the “Participants”), based upon achievement of corporate and individual goals established by the Compensation Committee for the year ending December 31, 2015.

Pursuant to the Plan, the Company’s Chief Executive Officer, Chief Operating Officer and Chief Financial Officer are eligible to receive a target cash performance bonus equal to 75%, 53% and 45%, respectively, of their base salaries for 2015 based upon the Company’s achievement of three corporate goals for the year ending December 31, 2015.

• First, of that target cash bonus percentage attributable to the achievement of corporate goals, 34%, 26% and 23% for our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, respectively, is based on the Company’s achievement of a Cash Flow From Operations (“CFFO”) per outstanding share target for 2015. Achievement of 90% of the target level of CFFO per share will result in 90% of the portion of the award subject to such performance target being earned by the Participants. If this 90% threshold level of CFFO per share performance is attained, but the target level is not attained, the earned portion of the award subject to CFFO per share performance will be prorated between 90% and 100% based upon the actual CFFO per share results reported in 2015.

• Second, of that target cash bonus percentage attributable to the achievement of corporate goals, 28%, 18% and 15% for our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, respectively, is based on the Company’s achievement of an Adjusted EBITDAR target for 2015. Achievement of 90% of the target level of Adjusted EBITDAR will result in 90% of the portion of the award subject to such performance target being earned by the Participants. If this 90% threshold level of Adjusted EBITDAR performance is attained, but the target level is not attained, the earned portion of the award subject to Adjusted EBITDAR performance will be prorated between 90% and 100% based upon the actual Adjusted EBITDAR results reported in 2015.

• Third, of that target cash bonus percentage attributable to the achievement of corporate goals, 13%, 9% and 7% for our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, respectively, is based upon a target aggregate transaction value with respect to senior housing communities acquired by the Company during 2015. 33% of the portion of the award subject to the aggregate value of transactions performance target will be earned by the Participants upon the upon the Company’s acquisition of senior housing communities valued in the aggregate at 50% of the target amount, and 66% of the portion of the award subject to the aggregate value of transactions performance target will be earned by the Participants upon the upon the Company’s acquisition of senior housing communities valued in the aggregate at 75% of the target amount.

In addition, the Company’s Chief Executive Officer, Chief Operating Officer and Chief Financial Officer are eligible to receive a cash performance bonus of up to 25%, 17% and 15%, respectively, of their base salaries for 2015 based upon the achievement of certain objective individual goals for the year ending December 31, 2015, which are within such Participant’s sphere of influence.

Under the Plan, the Company’s Chief Executive Officer, Chief Operating Officer and Chief Financial Officer are also eligible to receive additional cash performance bonuses of up to 50%, 35%, and 30%, respectively, of their base salaries for 2015 if the CFFO per outstanding share target for the year ending December 31, 2015 is exceeded by between 5% and 25%.

Item 7.01 Regulation FD Disclosure.

Attached hereto as Exhibit 99.2 is an updated slideshow presentation of the Company.

By filing this Current Report on Form 8-K, the Company does not acknowledge that disclosure of this information is required by Regulation FD or that the information was material or non-public before the disclosure. The Company assumes no obligation to update or supplement forward-looking statements in this presentation that become untrue because of new information, subsequent events or otherwise.

Item 8.01 Other Events.

The 2015 annual meeting of stockholders of the Company (the “Annual Meeting”) has been scheduled for May 21, 2015. The record date for the Annual Meeting has been set as the close of business on March 25, 2015.

The Company will be filing a proxy statement and other documents regarding the Annual Meeting with the Securities and Exchange Commission (the “SEC”). The Company’s stockholders are urged to read the proxy statement and other relevant materials when they become available, because they will contain important information about the Company, the Annual Meeting and related matters. Stockholders may obtain a free copy of the Company’s proxy statement, when available, and other documents filed by the Company with the SEC at the SEC’s website (www.sec.gov) and in the investor relations section of the Company’s website (www.capitalsenior.com).

Item 9.01 Financial Statements and Exhibits.

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

(d) Exhibits.

*99.1 Press Release dated February 26, 2015.

*99.2 Capital Senior Living Corporation Updated Slideshow Presentation.

* These exhibits to this Current Report on Form 8-K are not being filed but are being furnished pursuant to Item 9.01.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 26, 2015	Capital Senior Living Corporation
	By:	/s/ Carey P. Hendrickson
	Name:	Carey P. Hendrickson
	Title:	Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

*99.1	Press Release dated February 26, 2015.
*99.2	Capital Senior Living Corporation Updated Slideshow Presentation.

* These exhibits to this Current Report on Form 8-K are not being filed but are being furnished pursuant to Item 9.01.

EX-99.1

Exhibit 99.1

PRESS CONTACT: Carey P. Hendrickson, Chief Financial Officer Phone: 1-972-770-5600

FOR IMMEDIATE RELEASE

CAPITAL SENIOR LIVING CORPORATION

REPORTS FOURTH QUARTER 2014 RESULTS

DALLAS – (BUSINESS WIRE) – February 26, 2015 – Capital Senior Living Corporation (the “Company”) (NYSE:CSU), one of the nation’s largest operators of senior living communities, today announced operating and financial results for the fourth quarter and full year 2014. Company highlights for the fourth quarter and full year include:

Operating and Financial Summary (see Non-GAAP Financial Measures below)

• Revenue in the fourth quarter of 2014 was $100.2 million, an $11.2 million, or 12.6%, increase from the fourth quarter of 2013. Revenue for full-year 2014 increased $33.6 million, or 9.6%, to $383.9 million.

• Occupancy for the Company’s consolidated communities, excluding four communities undergoing repositioning, lease-up or significant renovation and conversion, was 87.9% in the fourth quarter of 2014, an increase of 110 basis points from the fourth quarter of 2013. Same-community occupancy was 87.5% for the fourth quarter of 2014, a 20 basis point sequential improvement from the third quarter of 2014 and a 60 basis point improvement from the fourth quarter of 2013.

• Average monthly rent for the Company’s consolidated communities increased 3.0% to $3,229 in the fourth quarter of 2014, an increase of $94 per occupied unit as compared to the fourth quarter of 2013. Same-community average monthly rent was $3,179, a $34 per occupied unit increase from the fourth quarter of 2013, and a 30 basis point improvement from the third quarter of 2014.

• Adjusted EBITDAR increased 20.9% to $36.0 million in the fourth quarter of 2014. This does not include EBITDAR of $0.7 million related to four communities undergoing repositioning, lease-up or significant renovation and conversion. The Company is currently excluding the results of these four communities from its Non-GAAP financial measures, including Adjusted EBITDAR. The Company’s Adjusted EBITDAR margin was 37.5% for the fourth quarter of 2014, an increase of 290 basis points versus the fourth quarter of the prior year. Adjusted EBITDAR for full-year 2014 increased $13.0 million, or 10.9%, to $132.6 million.

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• Adjusted Cash From Facility Operations (“CFFO”) was $13.5 million, or $0.48 per share, in the fourth quarter of 2014, excluding the four communities previously noted, compared to $14.6 million, or $0.52 per share, in the fourth quarter of 2013. The fourth quarter of 2013 included tax savings from a cost segregation study of approximately $0.12 per share. On a comparable basis, Adjusted CFFO increased $0.08 per share, or 20.0%, in the fourth quarter of 2014 versus the fourth quarter of 2013. Adjusted CFFO for full-year 2014 was $1.51 compared to $1.54 in full-year 2013. Adjusted CFFO for full-year 2013 included tax savings from the previously noted cost segregation study of approximately $0.14 per share.

• The Company’s Net Loss for the fourth quarter of 2014 was $3.9 million, or $0.13 per share, due to non-cash amortization of resident leases of $4.8 million associated with communities acquired by the Company in the previous 12 months. Net Loss for full-year 2014 was $24.1 million, or $0.83 per share. Adjusted Net Income was $1.5 million, or $0.05 per share, for the fourth quarter of 2014, and $2.4 million, or $0.09 per share, for full-year 2014.

• As disclosed in its press release dated January 29, 2015, the Company acquired two senior living communities, one in mid-December and the other in mid-January, for a combined purchase price of approximately $32.8 million. These communities are expected to generate incremental annual CFFO of approximately $0.04 per share.

• Also as disclosed on January 29, 2015, the Company sold four non-core communities in January for $36.5 million. The Company received approximately $18.0 million in net proceeds after relieving the debt associated with the communities and paying customary transaction and closing costs.

“Our fourth quarter results reflect the continuing momentum in our operations. Our revenue increased at the highest rate of the year in the fourth quarter while our expenses declined, resulting in excellent growth in Adjusted EBITDAR and Adjusted CFFO. We also experienced continued solid increases in occupancy and average monthly rent,” said Lawrence A. Cohen, Chief Executive Officer of the Company. “Our same-community occupancy increased for the fifth consecutive quarter, gaining 20 basis points from the third quarter of 2014 to the fourth quarter of 2014. Our same-community average monthly rent increased by 30 basis points in the fourth quarter of 2014 as compared to the third quarter, building on the 70 basis point sequential increases in average monthly rent in the two previous quarters. We also continue to make steady progress on our work to convert approximately 360 vacant independent living units to assisted living and memory care units, with more than half of the conversions complete at the end of 2014.

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“Complementing this growth is a robust pipeline that allows us to continue our disciplined and strategic acquisition program that increases our ownership of high-quality senior living communities in geographically concentrated regions and generates meaningful increases in CFFO, earnings and real estate value. We closed on one such community in the fourth quarter and have subsequently closed on another community in the first quarter, and we continue to pursue additional opportunities.

“We are successfully executing on our strategic plan, and believe that we are well positioned to make meaningful gains in shareholder value as a substantially all private-pay business in an industry that benefits from need-driven demand, limited new supply, and an improving economy and housing market.”

Recent Investment Activity

• The Company is conducting due diligence on additional acquisitions of high-quality senior living communities in states with extensive existing operations totaling approximately $57 million. Subject to completion of customary closing conditions, at least one of the acquisitions, valued at approximately $30 million, is expected to close by the end of the first quarter of 2015. Another acquisition is expected to close late in the first quarter or early in the second quarter of 2015, with the remainder expected to close in the second quarter.

• The Company executed an early rate lock agreement on approximately $21 million of debt associated with the previously noted $30 million acquisition expected to close in the first quarter at a fixed interest rate of 3.55% with a 10-year maturity.

• As disclosed on January 29, 2015, the Company also executed early rate lock agreements on $45 million of mortgage debt for two communities at an average fixed interest rate of approximately 3.85% with a 10-year maturity. One of these transactions closed on February 17 and the net proceeds were used to pay off two short-term bridge loans totaling $14 million. The remaining transaction is expected to close by the end of the first quarter of 2015. After completion, the Company will have two remaining bridge loans totaling approximately $20 million.

• As disclosed on January 29, 2015, the Company closed a refinance of debt on a community in December 2014 that was originally set to mature in March 2017. The new mortgage is $18.9 million with a 4.46% fixed interest rate and matures in January 2025. The new mortgage replaced $8.4 million of fixed-rate debt with an interest rate of 5.75%. The refinance yielded $9.3 million in incremental cash proceeds for the Company after customary transaction and closing costs.

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Financial Results - Fourth Quarter

For the fourth quarter of 2014, the Company reported revenue of $100.2 million, compared to revenue of $88.9 million in the fourth quarter of 2013, an increase of 12.6%. Resident and healthcare revenue increased from the fourth quarter of the prior year by approximately $13.1 million, or 15.0%, mostly due to the acquisition of 14 communities during or after the fourth quarter of 2013. As expected, community reimbursement revenue and affiliated management revenue decreased approximately $1.9 million in the fourth quarter of 2014 as compared to the fourth quarter of 2013. The acquisition of three Ohio communities in which the Company previously held a 10% interest as a joint venture on June 30, 2014, resulted in the elimination of these two revenue items as well as community reimbursement expense.

Operating expenses for the fourth quarter of 2014 were $59.7 million, an increase of $5.9 million from the fourth quarter of 2013, primarily due to the acquisition of 14 communities during or after the fourth quarter of 2013.

General and administrative expenses for the fourth quarter of 2014 were $4.5 million, which includes $0.4 million of transaction and other one-time costs. Excluding transaction and other one-time costs, general and administrative expenses decreased $0.4 million in the fourth quarter of 2014 as compared to the fourth quarter of 2013. As a percentage of revenues under management, general and administrative expenses, excluding transaction and other one-time costs, were 4.1% in the fourth quarter of 2014 as compared to 5.2% in the fourth quarter of 2013.

The Company’s Non-GAAP financial measures exclude four communities that are undergoing repositioning, lease-up of higher-licensed units or significant renovation and conversion.

Adjusted EBITDAR for the fourth quarter of 2014 was approximately $36.0 million, an increase of $6.2 million, or 20.9%, from the fourth quarter of 2013. This does not include EBITDAR of $0.7 million related to four communities undergoing repositioning, lease-up or significant renovation and conversion. The Adjusted EBITDAR margin for the fourth quarter of 2014 was 37.5%, a record-high quarterly margin for the Company and an increase of 290 basis points from the fourth quarter 2013 of 34.6%.

The Company recorded a net loss of $3.9 million in the fourth quarter. Excluding non-recurring or non-economic items reconciled on the final page of this release, the Company earned adjusted net income of $1.5 million, or $0.05 per share, in the fourth quarter of 2014. Adjusted CFFO was $13.5 million, or $0.48 per share, in the fourth quarter of 2014 versus $0.52 in the fourth quarter of 2013. The fourth quarter of 2013 included tax savings from a cost segregation study of approximately $0.12 per share. On a comparable basis, Adjusted CFFO increased $0.08 per share, or 20.0%, in the fourth quarter of 2014 versus the fourth quarter of 2013.

CAPITAL/Page 5

Financial Results – Full Year

The Company reported 2014 revenue of $383.9 million compared to revenue of $350.4 million in 2013, an increase of $33.6 million, or 9.6%. Revenues in 2014 included a decrease of $3.4 million in community reimbursement revenue and affiliated management revenue related to the acquisition of three communities formerly held as a joint venture, as previously noted. Resident and healthcare revenue increased 10.7% versus the prior year. Operating expenses were $230.5 million in 2014, an increase of $22.8 million.

General and administrative expenses in 2014 were $19.6 million compared to $20.2 million in 2013. Excluding transaction and other one-time costs, general and administrative expenses as a percentage of revenues under management were approximately 4.7% in 2014 compared to 5.2% in 2013.

Adjusted EBITDAR increased 10.9% to $132.6 million in 2014, an increase of $13.0 million. The Company’s Adjusted EBITDAR margin was 35.9% in 2014, a 100 basis point improvement from 2013. Adjusted CFFO for 2014 was $42.8 million, or $1.51 per share, compared to $1.54 per share in 2013. Adjusted CFFO in 2013 included approximately $0.14 per share in tax savings from a cost segregation study. The Company’s net loss for 2014 was $24.1 million, or $0.83 per share. After adjusting for the non-recurring or non-economic items reconciled on the final page of this release, the Company earned adjusted net income of $2.4 million, or $0.09 per share.

Operating Activities

Same-community results exclude the four communities previously noted that are undergoing repositioning, lease-up or significant renovation and conversion, and transaction and other one-time costs.

Same-community revenue in the fourth quarter of 2014 increased 1.9% versus the fourth quarter of 2013. Same-community expenses decreased 0.9% from the fourth quarter of the prior year. Labor costs, including benefits, increased approximately 0.4%, food costs increased 1.4% and utilities were down 1.7% as compared to the fourth quarter of the prior year. Same-community net operating income increased 5.1% in the fourth quarter of 2014 as compared to the fourth quarter of 2013.

Same-community results continued to show significant sequential improvement in the fourth quarter of 2014. Same-community revenues were up sequentially over the third quarter by 0.6%, following sequential improvement over the previous quarter of 0.6% and 1.1% in the second and third quarters, respectively. Same-community occupancies increased 20 basis points from the third quarter to the fourth quarter and average rent increased 30 basis points from the third quarter to the fourth quarter.

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Same-community expenses were $0.3 million lower than the third quarter of 2014. Same-community net operating income was 2.0% higher than the third quarter of 2014.

Capital expenditures for the fourth quarter of 2014 were $5.3 million, representing approximately $3.8 million of investment spending and approximately $1.5 million of recurring capital expenditures. Spending in 2014 for recurring capital expenditures equaled $4.7 million, or approximately $400 per unit.

Balance Sheet

The Company ended the year with $51.5 million of cash and cash equivalents, including restricted cash. During the fourth quarter of 2014, the Company invested $4.1 million of cash as equity to complete the acquisitions of one community and spent $5.3 million on capital improvements. For the full year, the Company invested $40.5 million of cash to complete 8 acquisitions and spent $18.7 million on capital improvements.

As of December 31, 2014, the Company financed its 67 owned communities with mortgages totaling $642.5 million at interest rates averaging 4.7%. All of the Company’s debt is at fixed interest rates, except for six bridge loans totaling approximately $65.2 million at December 31, 2014, at variable rates averaging 3.9%. The Company has no mortgage maturities before the third quarter of 2015.

The Company’s cash on hand and cash flow from operations are expected to be sufficient for working capital, prudent reserves and the equity needed to fund the Company’s acquisition program.

Q4 2014 Conference Call Information

The Company will host a conference call with senior management to discuss the Company’s fourth quarter and full year financial results. The call will be held on Thursday, February 26, 2015, at 5:00 p.m. Eastern Time. The call-in number is 913-312-0850, confirmation code 3717091. A link to a simultaneous webcast of the teleconference will be available at www.capitalsenior.com through Windows Media Player or RealPlayer.

For the convenience of the Company’s shareholders and the public, the conference call will be recorded and available for replay starting Thursday, February 26, 2015, at 8:00 p.m. Eastern Time, until Saturday, March 7, 2015, at 8:00 p.m. Eastern Time. To access the conference call replay, call 719-457-0820, confirmation code 3717091. The conference call will also be made available for playback via the Company’s corporate website, www.capitalsenior.com, beginning February 27, 2015.

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Non-GAAP Financial Measures

Adjusted EBITDAR, Adjusted EBITDAR Margin, Adjusted Net Income and Adjusted CFFO are financial measures of operating performance that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures may have material limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. As a result, these non-GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with 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 income from operations to Adjusted EBITDAR and Adjusted EBITDAR Margin and the reconciliation of net loss to Adjusted Net Income and Adjusted CFFO, along with the Company’s consolidated balance sheets, statements of operations, and statements of cash flows.

About the Company

Capital Senior Living Corporation is one of the nation’s largest operators of residential communities for senior adults. The Company’s operating strategy is to provide value to residents by providing quality senior living services at reasonable prices. The Company’s communities emphasize a continuum of care, which integrates independent living, assisted living, and home care services, to provide residents the opportunity to age in place. The Company operates 114 senior living communities in geographically concentrated regions with an aggregate capacity of approximately 15,000 residents.

Safe Harbor

The forward-looking statements in this release are subject to certain risks and uncertainties that could cause results to differ materially, including, but not without limitation to, the Company’s ability to find suitable acquisition properties at favorable terms, financing, refinancing, community sales, licensing, business conditions, risks of downturns in economic conditions generally, satisfaction of closing conditions such as those pertaining to licensure, availability of insurance at commercially reasonable rates, and changes in accounting principles and interpretations among others, and other risks and factors identified from time to time in our reports filed with the Securities and Exchange Commission.

For information about Capital Senior Living, visit www.capitalsenior.com.

Contact Carey P. Hendrickson, Chief Financial Officer, at 972-770-5600 for more information.

CAPITAL/Page 8

CAPITAL SENIOR LIVING CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

	December 31,
	2014			2013
ASSETS
Current assets:
Cash and cash equivalents	$	39,209		$	13,611
Restricted cash		12,241			11,425
Accounts receivable, net		5,903			3,752
Accounts receivable from affiliates		5			416
Federal and state income taxes receivable		—			5,123
Deferred taxes		460			845
Assets held for sale		35,761			—
Property tax and insurance deposits		12,198			11,036
Prepaid expenses and other		6,797			6,605
Total current assets		112,574			52,813
Property and equipment, net		747,243			651,738
Investments in unconsolidated joint ventures		—			1,010
Other assets, net		37,884			39,988
Total assets	$	897,701		$	745,549
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,540		$	3,813
Accounts payable to affiliates		7			1
Accrued expenses		32,154			29,321
Notes payable of assets held for sale		15,076			—
Current portion of notes payable		33,664			11,918
Current portion of deferred income		14,603			11,215
Current portion of capital lease and financing obligations		1,054			948
Federal and state income taxes payable		219			—
Customer deposits		1,499			1,489
Total current liabilities		100,816			58,705
Deferred income		15,949			18,021
Capital lease and financing obligations, net of current portion		40,016			41,093
Deferred taxes		460			845
Other long-term liabilities		1,426			1,559
Notes payable, net of current portion		597,860			467,376
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $.01 par value:
Authorized shares — 15,000; no shares issued or outstanding		—			—
Common stock, $.01 par value:
Authorized shares — 65,000; issued and outstanding shares 29,097 and 28,845 in 2014 and 2013, respectively		294			292
Additional paid-in capital		151,069			143,721
Retained (deficit) earnings		(9,255	)		14,871
Treasury stock, at cost – 350 shares in 2014 and 2013		(934	)		(934	)
Total shareholders’ equity		141,174			157,950
Total liabilities and shareholders’ equity	$	897,701		$	745,549

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CAPITAL SENIOR LIVING CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share data)

	Three Months Ended December 31,						Year Ended December 31,
	2014			2013			2014			2013
Revenues:
Resident and health care revenue	$	100,160		$	87,069		$	380,400		$	343,478
Affiliated management services revenue		—			211			415			797
Community reimbursement revenue		—			1,655			3,110			6,087
Total revenues		100,160			88,935			383,925			350,362
Expenses:
Operating expenses (exclusive of facility lease expense and depreciation and amortization expense shown below)		59,744			53,888			230,495			207,744
General and administrative expenses		4,485			5,209			19,622			20,238
Facility lease expense		14,808			14,173			59,332			56,986
Provision for bad debts		200			167			717			497
Stock-based compensation expense		1,586			1,164			7,262			4,322
Depreciation and amortization		13,880			10,055			49,487			43,238
Community reimbursement expense		—			1,655			3,110			6,087
Total expenses		94,703			86,311			370,025			339,112
Income from operations		5,457			2,624			13,900			11,250
Other income (expense):
Interest income		12			13			52			151
Interest expense		(8,476	)		(6,446	)		(31,261	)		(23,767	)
Write-off of deferred loan costs and prepayment premiums		(989	)		—			(7,968	)		—
Joint venture equity investment valuation gain		—			—			1,519			—
Gain on disposition of assets, net		795			1,442			784			1,454
Equity in earnings of unconsolidated joint ventures, net		—			57			105			133
Write-down of assets held for sale		(561	)		—			(561	)		—
Other income		1			6			23			34
Loss before provision for income taxes		(3,761	)		(2,304	)		(23,407	)		(10,745	)
Provision for income taxes		(140	)		(91	)		(719	)		(5,759	)
Net loss	$	(3,901	)	$	(2,395	)	$	(24,126	)	$	(16,504	)
Per share data:
Basic net loss per share	$	(0.13	)	$	(0.08	)	$	(0.83	)	$	(0.58	)
Diluted net loss per share	$	(0.13	)	$	(0.08	)	$	(0.83	)	$	(0.58	)
Weighted average shares outstanding — basic		28,387			27,949			28,301			27,815
Weighted average shares outstanding — diluted		28,387			27,949			28,301			27,815
Comprehensive loss	$	(3,901	)	$	(2,395	)	$	(24,126	)	$	(16,504	)

CAPITAL/Page 10

CAPITAL SENIOR LIVING CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,
	2014			2013
Operating Activities
Net loss	$	(24,126	)	$	(16,504	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		49,487			43,238
Amortization of deferred financing charges		1,361			1,100
Amortization of deferred lease costs and lease intangibles		1,230			1,164
Deferred income		1,316			1,053
Deferred income taxes		—			10,793
Write-off of deferred loan costs and prepayment premiums		7,968			—
Joint venture equity investment valuation gain		(1,519	)		—
Gain on disposition of assets, net		(784	)		(1,454	)
Equity in earnings of unconsolidated joint ventures, net		(105	)		(133	)
Write-down of assets held for sale		561			—
Provision for bad debts		717			497
Stock-based compensation expense		7,262			4,322
Changes in operating assets and liabilities:
Accounts receivable		(2,868	)		980
Accounts receivable from affiliates		411			337
Property tax and insurance deposits		(1,162	)		406
Prepaid expenses and other		(192	)		(1,847	)
Other assets		(163	)		(1,745	)
Accounts payable		(1,267	)		(3,166	)
Accrued expenses		2,833			4,876
Federal and state income taxes receivable/payable		5,342			(1,222	)
Customer deposits		10			(51	)
Net cash provided by operating activities		46,312			42,644
Investing Activities
Capital expenditures		(18,742	)		(13,562	)
Cash paid for acquisitions		(160,105	)		(150,391	)
Proceeds from SHPIII/CSL Transaction		2,532			—
Proceeds from disposition of assets		796			1,460
Contributions to joint ventures		—			—
Distributions from joint ventures		102			197
Net cash used in investing activities		(175,417	)		(162,296	)
Financing Activities
Proceeds from notes payable		300,820			140,237
Repayments of notes payable		(140,950	)		(23,539	)
Cash payments for capital lease and financing obligations		(971	)		(871	)
Increase in restricted cash		(816	)		(1,246	)
Cash proceeds from the issuance of common stock		170			3,163
Excess tax benefits on stock options exercised		(82	)		(1,625	)
Deferred financing charges paid		(3,468	)		(1,593	)
Net cash provided by financing activities		154,703			114,526
Increase (Decrease) in cash and cash equivalents		25,598			(5,126	)
Cash and cash equivalents at beginning of year		13,611			18,737
Cash and cash equivalents at end of year	$	39,209		$	13,611
Supplemental Disclosures
Cash paid during the year for:
Interest	$	28,856		$	21,953
Income taxes	$	724		$	702

CAPITAL/Page 11

Capital Senior Living Corporation

Supplemental Information

							Average
	Communities						Resident Capacity						Average Units
	Q4 14			Q4 13			Q4 14			Q4 13			Q4 14			Q4 13
Portfolio Data
I. Community Ownership / Management
Consolidated communities
Owned		67			59			8,783			7,781			6,895			5,727
Leased		50			50			6,333			6,298			4,984			5,026
Joint Venture communities (equity method)		—			3			—			674			—			435
Total		117			112			15,116			14,753			11,879			11,188
Independent living								7,597			7,602			6,134			6,180
Assisted living								7,519			6,981			5,745			5,003
Skilled Nursing								—			170			—			5
Total								15,116			14,753			11,879			11,188
II. Percentage of Operating Portfolio
Consolidated communities
Owned		57.3	%		52.7	%		58.1	%		52.7	%		58.0	%		51.2	%
Leased		42.7	%		44.6	%		41.9	%		42.7	%		42.0	%		44.9	%
Joint venture communities (equity method)		—			2.7	%		—			4.6	%		—			3.9	%
Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Independent living								50.3	%		51.5	%		51.6	%		55.2	%
Assisted living								49.7	%		47.3	%		48.4	%		44.7	%
								—			1.2	%		—			0.0	%
Total								100.0	%		100.0	%		100.0	%		100.0	%

CAPITAL/Page 12

Capital Senior Living Corporation

Supplemental Information (excludes 4 communities being repositioned/leased up)

	Q4 14			Q4 13
Selected Operating Results
I. Owned communities
Number of communities		64			56
Resident capacity		8,174			7,002
Unit capacity		6,398			5,226
Financial occupancy (1)		89.1	%		87.3	%
Revenue (in millions)		51.8			38.9
Operating expenses (in millions) (2)		29.3			22.1
Operating margin		44	%		43	%
Average monthly rent		3,030			2,845
II. Leased communities
Number of communities		49			49
Resident capacity		6,107			6,072
Unit capacity		4,843			4,840
Financial occupancy (1)		86.5	%		86.3	%
Revenue (in millions)		44.0			43.3
Operating expenses (in millions) (2)		21.8			21.9
Operating margin		51	%		49	%
Average monthly rent		3,499			3,452
III. Consolidated communities
Number of communities		113			105
Resident capacity		14,281			13,074
Unit capacity		11,240			10,066
Financial occupancy (1)		87.9	%		86.8	%
Revenue (in millions)		95.8			82.2
Operating expenses (in millions) (2)		51.1			44.0
Operating margin		47	%		46	%
Average monthly rent		3,229			3,135
IV. Communities under management
Number of communities		113			108
Resident capacity		14,281			13,748
Unit capacity		11,240			10,500
Financial occupancy (1)		87.9	%		87.0	%
Revenue (in millions)		95.8			86.4
Operating expenses (in millions) (2)		51.0			46.3
Operating margin		47	%		46	%
Average monthly rent		3,229			3,155
V. Same communities under management
Number of communities		102			102
Resident capacity		13,086			13,056
Unit capacity		10,355			10,352
Financial occupancy (1)		87.5	%		86.9	%
Revenue (in millions)		86.4			84.8
Operating expenses (in millions) (2)		45.3			45.5
Operating margin		48	%		46	%
Average monthly rent		3,179			3,145
VI. General and Administrative expenses as a percent of Total Revenues under Management
Fourth Quarter (3)		4.1	%		5.2	%
Fiscal Year (3)		4.5	%		5.2	%
VII. Consolidated Mortgage Debt Information (in thousands, except for interest rates) (excludes insurance premium and auto financing)
Total fixed rate mortgage debt		577,310			453,641
Total variable rate mortgage debt		65,222			22,522
Weighted average interest rate		4.69	%		5.25	%

(1) Financial occupancy represents actual days occupied divided by total number of available days during the month of the quarter.

(2) Excludes management fees, insurance and property taxes.

(3) Excludes transaction and conversion costs incurred by the Company.

CAPITAL/Page 13

CAPITAL SENIOR LIVING CORPORATION

NON-GAAP RECONCILIATIONS

(In thousands, except per share data)

	Three Months Ended December 31,						Fiscal Year Ended December 31,
	2014			2013			2014			2013
Adjusted EBITDAR
Net income from operations	$	5,457		$	2,624		$	13,900		$	11,250
Depreciation and amortization expense		13,880			10,055			49,487			43,238
Stock-based compensation expense		1,586			1,164			7,262			4,322
Facility lease expense		14,808			14,173			59,332			56,986
Provision for bad debts		200			167			717			497
Casualty losses		166			161			748			543
Transaction and conversion costs		549			660			2,648			1,866
Communities being repositioned/leased up		(683	)		739			(1,494	)		859
Adjusted EBITDAR	$	35,963		$	29,743		$	132,600		$	119,561
Adjusted EBITDAR Margin
Adjusted EBITDAR	$	35,963		$	29,743		$	132,600		$	119,561
Total revenues	$	100,160		$	88,935		$	383,925		$	350,362
Communities being repositioned/leased up		(4,308	)		(2,987	)		(14,381	)		(7,847	)
Adjusted revenues	$	95,852		$	85,948		$	369,544		$	342,515
Adjusted EBITDAR margin		37.5	%		34.6	%		35.9	%		34.9	%
Adjusted net income and net income per share
Net loss	$	(3,901	)	$	(2,395	)	$	(24,126	)	$	(16,504	)
Casualty losses, net of tax		105			101			471			342
Transaction and conversion costs, net of tax		346			416			1,668			1,176
Resident lease amortization, net of tax		3,013			1,937			10,460			10,774
Write-off of deferred loan costs and prepayment premium, net of tax		623			—			5,020			—
Write-down of assets held for sale, net of tax		353			—			353			—
Joint venture equity investment valuation gain, net of tax		—			—			(957	)		—
Gain on disposition of assets, net of tax		(501	)		(908	)		(494	)		(916	)
Deferred tax asset valuation allowance		993			1,297			8,456			8,810
Communities being repositioned/leased up, net of tax		429			756			1,578			1,170
Adjusted net income	$	1,460		$	1,204		$	2,429		$	4,852
Adjusted net income per share	$	0.05		$	0.04		$	0.09		$	0.17
Diluted shares outstanding		28,390			27,966			28,305			27,871
Adjusted CFFO and Adjusted CFFO per share
Net loss	$	(3,901	)	$	(2,395	)	$	(24,126	)	$	(16,504	)
Non-cash charges, net		17,803			17,037			67,494			60,581
Recurring capital expenditures		(1,101	)		(991	)		(4,257	)		(3,866	)
Casualty losses		166			161			748			749
Transaction and conversion costs		549			660			2,648			1,866
Tax impact of Spring Meadows Transaction		(106	)		(106	)		(424	)		(424	)
Communities being repositioned/leased up, net of tax		138			237			746			631
Adjusted CFFO	$	13,548		$	14,603		$	42,829		$	43,033
Adjusted CFFO per share	$	0.48		$	0.52		$	1.51		$	1.54

***

EX-99.2

Capital Senior Living

Company Presentation

Exhibit 99.2

2

Forward-Looking Statements

•

The forward-looking statements in this presentation are subject to certain risks and uncertainties that

could cause results to differ materially, including, but not without limitation to, the Company’s ability to

complete the refinancing of certain of our wholly owned communities, realize the anticipated savings

related to such financing, find suitable acquisition properties at favorable terms, financing, licensing,

business conditions, risks of downturns in economic conditions generally, satisfaction of closing

conditions such as those pertaining to licensures, availability of insurance at commercially reasonable

rates and changes in accounting principles and interpretations among others, and other risks and factors

identified from time to time in our reports filed with the Securities and Exchange Commission

•

The Company assumes no obligation to update or supplement forward-looking statements in this

presentation that become untrue because of new information, subsequent events or otherwise.                           

3

Non-GAAP Financial Measures

•

Adjusted EBITDAR, Adjusted EBITDAR Margin, Adjusted Net Income and Adjusted CFFO are financial

measures of operating performance that are not calculated in accordance with U.S. generally accepted

accounting principles (“GAAP”).  Non-GAAP financial measures may have material limitations in that they

do

not

reflect

all

of

the

amounts

associated

with

our

results

of

operations

as

determined

in

accordance

with GAAP.  As a result, these non-GAAP financial measures should not be considered a substitute for,

nor superior to, financial results and measures determined or calculated in accordance with 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 income from operations to Adjusted EBITDAR and Adjusted EBITDAR Margin and the reconciliation of

net

loss

to

Adjusted

Net

Income

and

Adjusted

CFFO,

each

of

which

is

included

at

the

end

of

the

Company’s earnings releases, along with the Company’s consolidated balance sheets, statements of

operations, and statements of cash flows.

4

Company Highlights

Value leader in geographically concentrated regions providing quality

seniors housing and care at reasonable prices

Well positioned to make meaningful gains in shareholder value

Substantially all private pay with strong cash flow generation

Industry benefits from need-driven demand, limited new supply and an

improving housing market and economy

Larger company economies of scale and proprietary systems that

yield operating efficiencies in highly fragmented industry

Executing on disciplined accretive growth initiatives through

acquisitions, conversions to higher levels of care, renovations and

refurbishments

Solid balance sheet

5

AR. 

173

CT. 

178

FL.

226

IA. 

122

IL. 

650

IN. 

2,247

KS. 

165

LA. 

133

MI.

244

MN.

173

MO. 

662

MS.

143

NC.

432

SC.

669

NE. 

668

NJ. 

98

NY. 

387

OH. 

2,060

OK. 

143

TX. 

3,720

VA.

317

CA. 

408

Company Overview

Resident Capacity By State

AZ. 

189

GA. 

168

MA. 

68

WI. 

418

MA.

87

Number of residents by State

Greater than 2,000

500 -

2,000

Less than 500

•

Capital Senior Living operates 114 communities in geographically

concentrated regions with the capacity to serve 15,000 residents

6

Resident Demographics at CSU Communities

•

Average age of resident: 85 years

•

Average age of resident moving in: 82 years

•

Average

stay

period:

2-3

years

•

Percent of female residents: 80%

•

Resident turnover is primarily attributed to death or need for

higher care

7

The Capital Advantage: Senior Living Options

Independent

Living

–

48%

of

Resident

Capacity

•

Average 107 units per IL community with large common areas and

amenities

•

Supportive services, wellness programs, social, recreational

and

educational events

•

Average monthly rate of $2,487

•

100% private pay

•

Average length of resident stay is 31 months

8

The Capital Advantage: Senior Living Options

Assisted Living-

52% of Resident Capacity

•

Average 65 units per community

•

79% of communities offer AL

•

Assistance with activities of daily living including medication

reminders, bathing, dressing and grooming

•

Average monthly rate of $3,992

•

Substantially all private pay

•

Average length of resident stay is 24 months

9

The Capital Advantage: Need Driven Demand

U.S. population 75+ years old is estimated to be 12% of the population by

2030 compared to 6% in 2012

•

Only

1.3

million

units

serving

a

population

of

18.9

million

seniors

•

Current 6.9% penetration rate implies demand growth of 40,000 units per year

Source: 2010 Census Summary File 1 and U.S. Census Bureau, Population Division

U.S. Seniors Population Trends (75+ years old)

10

The Capital Advantage: Limited New Supply

Source: NIC MAP Trends All Markets Q4 14

11

The Capital Advantage: Senior Housing Occupancy Trends

Source: NIC MAP Trends All Markets Q4 14

12

The Capital Advantage: Competitive Strengths

•

Value leader in geographically concentrated regions

•

Experienced on-site, regional and corporate management

•

Larger company economies of scale and proprietary systems

that yield operating efficiencies in highly fragmented industry

•

Solid reputation in industry and 95% resident satisfaction

•

Employer of choice

•

Solid balance sheet

•

Strong Board of Directors

13

The Capital Advantage: Strategy

•

Focus on our core strengths

•

Capitalize on competitive strengths within each of our regions

to maximize the cash flow and value of our communities and

our operations

•

Capitalize on the fragmented nature of the senior living

industry to strategically aggregate local and regional operators

in geographically concentrated regions

•

Increase levels of care through conversions to Assisted Living

or Memory Care units

•

Attract and retain the best talent in the senior living industry

14

Focused on operations, marketing and growth to enhance

shareholder value through:

Organic growth, including the conversion of units to higher levels

of care and community renovations and refurbishment projects

Proactive expense management

Accretive acquisitions

Utilization of technology

2015 Business Plan

15

2015 Business Plan: Organic Growth

•

Increase average rents

•

Each 3% increase generates $11.8M of revenue

•

Improve occupancies

•

Each 1% generates $4.0M of revenue, $2.8M of EBITDAR and $0.06

per share of CFFO

•

Convert units to higher levels of care

•

Cash flow and value enhancing renovations and refurbishments

•

Continue to enhance sales and marketing initiatives

16

Solving to Achieve 90% Occupancy

Occupancy Prior to Conversions

(1)

IL

AL

Total

Total Units

6,192

5,434

11,626

Occupied Units

5,287

4,869

10,156

Occupancy %

85.4%

89.6%

87.4%

Planned IL to AL Conversions

IL

AL

Units

(360)

360

At 90% Stabilized

Occupancy

324

Note: Conversions are subject to customary approvals

Occupancy After Conversions

Stabilize

IL

AL

Total

Total Units

5,832

5,794

11,626

Occupied Units

5,287

5,193

10,480

Occupancy %

90.7%

89.6%

90.1%

(1)

As of June 30, 2014 -

excludes CCRC’s , Autumn Glen, and Veranda Club

17

Canton Regency Remodel Concepts

Existing Atrium

Concept Atrium

Concept Bistro

Concept Internet Cafe

18

Community Portfolio Growth: 2009 to Present

Owned %

37.9%

32.5%

38.1%

47.5%

52.7%

57.3%

56.1%

66

77

84

101

112

117

114

19

2015 Business Plan: External Growth

•

Strategic acquisitions of high quality senior living communities

to

enhance

geographic

concentrations

–

16.2%

cash

on

cash

returns

*Based on share count at time of transaction      (in millions except number of communities)

2011

2012

2013

2014

2015 YTD

Combined

Purchase Price

$83.4

$181.3

$150.4

$160.2

$18.3

$593.6

Communities

7

17

11

8

1

44

Units

551

1,367

881

819

78

3,696

Debt

$59.3

$129.5

$112.3

$119.7

$14.1

$434.9

Equity

$24.1

$51.8

$38.1

$40.5

$4.2

$158.7

First Year Revenue

$21.3

$49.1

$35.1

$36.4

$2.8

$144.7

First Year EBITDAR

$7.3

$19.1

$14.1

$15.0

$1.5

$57.0

First Year Cash Flow from

Operations (CFFO)

$3.4

$9.1

$5.8

$6.7

$0.7

$25.7

First Year CFFO per share*

$0.13

$0.34

$0.20

$0.23

$0.02

$0.92

20

Historical Key Metrics

($ In Millions)

($ In Millions)

Revenue *

Adjusted  EBITDAR

Adjusted EBITDAR Margin

* Excludes community reimbursement revenue and management services revenue

Adjusted CFFO per share

* Excludes tax savings related to cost

segregation studies of $0.25 in 2012

and $0.14 in 2013

21

Comparative Operating and Financial Metrics

Note: EBITDAR and CFFO are as adjusted in press releases.

Q4 14

Q4 13

% Increase

Total Revenues

$ 100.2

$ 88.9

12.6%

Adjusted EBITDAR

$ 36.0

$ 29.7

20.9%

% Margin

37.5%

34.6%

Adjusted CFFO

$ 13.5

$ 11.2*

20.5%

Adjusted CFFO Per Share

$ 0.48

$ 0.40*

20.0%

* Excludes $3.4 million, or $0.12 per share, from tax savings related to a cost

segregation study completed in 2013.

22

Balance Sheet

•

As of December 31, 2014 (in millions)

ASSETS

Cash and Securities

$ 51.5

Other Current Assets

61.1

Total Current Assets

112.6

Fixed Assets

747.2

Other Assets

37.9

TOTAL ASSETS

$ 897.7

LIABILITIES & EQUITY

Current Liabilities

$ 100.8

Long-Term Debt

597.9

Other Liabilities

57.8

Total Liabilities

756.5

Stockholders’

Equity

141.2

TOTAL LIABILITIES &

EQUITY

$ 897.7

23

Debt Overview : 100% Mortgage Debt

(In thousands)

Debt Maturities

Weighted Average Interest Rate

Average duration of debt is 8 years,

with approximately 92% of all debt

maturing in 2021 and after

Weighted Average Interest

Rate has decreased 133 bps

since 2010

24

Investment Highlights

•

Value

leader

in

geographically

concentrated

regions

•

Substantially all private pay

•

Need-driven

demand,

limited

new

supply

and

improving

housing

market

and

economy

•

Experienced

management

team

with

demonstrated

ability

to

operate, acquire and create shareholder value

•

Accretive

acquisitions

in

highly

fragmented

industry

•

Value-enhancing

conversions

to

higher

levels

of

care,

renovations

and refurbishments

•

Strong cash flow generation

•

Solid balance sheet

Capital Senior Living

Company Presentation