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) August 1, 2017
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
(Registrants 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)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 | Results of Operations and Financial Condition. |
On August 1, 2017, Capital Senior Living Corporation (the Company) announced its financial results for the second quarter ended June 30, 2017 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 Companys management utilizes Adjusted EBITDAR as a financial valuation measure and Adjusted Net Income and Adjusted CFFO as financial performance measures 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 costs associated with the Companys 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. Adjusted EBITDAR is a valuation measure commonly used by the Companys management, research analysts and investors to value companies in the senior living industry. Because Adjusted EBITDAR excludes interest expense and rent expense, it allows the Companys management, research analysts and investors to compare the enterprise values of different companies without regard to differences in capital structures and leasing arrangements. The Company believes that Adjusted Net Income and Adjusted CFFO are useful as performance measures in identifying trends in day-to-day operations because they exclude the costs associated with acquisitions and conversions and other items that do not ordinarily reflect the ongoing operating results of the Companys primary business. Adjusted Net Income and Adjusted CFFO provide indicators to management of progress in achieving both consolidated and individual business unit operating performance and are used by research analysts and investors to evaluate the performance of companies in the senior living industry. The Company strongly urges investors to review on the last page of the press release the reconciliation of net loss to Adjusted EBITDAR and the reconciliation of net (loss) income to Adjusted Net (Loss) Income and Adjusted CFFO, along with the Companys consolidated balance sheets, statements of operations, and statements of cash flows.
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 9.01 | Financial Statements and Exhibits. |
(a) | Not applicable. |
(b) | Not applicable. |
(c) | Not applicable. |
(d) | Exhibits. |
*99.1 | Press Release dated August 1, 2017. | |
*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: August 1, 2017 | 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 August 1, 2017. | |
*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. |
Exhibit 99.1
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PRESS CONTACT: Carey Hendrickson, Chief Financial Officer Phone: 1-972-770-5600 |
FOR IMMEDIATE RELEASE
CAPITAL SENIOR LIVING CORPORATION
REPORTS SECOND QUARTER 2017 RESULTS
DALLAS (GLOBE NEWSWIRE) August 1, 2017 Capital Senior Living Corporation (the Company) (NYSE:CSU), one of the nations largest operators of senior housing communities, today announced operating and financial results for the second quarter 2017. Company highlights for the second quarter include:
Operating and Financial Summary (all amounts in this operating and financial summary exclude three communities that are undergoing repositioning, lease-up or significant renovation and conversion, unless otherwise noted; also, see Non-GAAP Financial Measures below and reconciliation of Non-GAAP measures to the most directly comparable GAAP measure on the final page of this release.)
| Revenue in the second quarter of 2017, including all communities, was $116.7 million, a $5.7 million, or 5.1%, increase from the second quarter of 2016. |
| Revenue for consolidated communities, which excludes the three communities undergoing repositioning, lease-up or significant renovation and conversion, was $112.0 million in the second quarter of 2017, an increase of 5.0% as compared to the second quarter of 2016. |
| Occupancy for the Companys consolidated communities was 86.8% in the second quarter of 2017, a decrease of 90 basis points from the first quarter of 2017 and a decrease of 160 basis points from the second quarter of 2016. Same-community occupancy was 86.8% in the second quarter of 2017, an 80 basis point decrease from the first quarter of 2017 and a 160 basis point decrease from the second quarter of 2016. |
| Average monthly rent for the Companys consolidated communities in the second quarter of 2017 was $3,584, an increase of $111 per occupied unit, or 3.2%, as compared to the second quarter of 2016. Same-community average monthly rent was $3,563, an increase of $88 per occupied unit, or 2.5%, from the second quarter of 2016. |
| Income from operations, including all communities, was $4.7 million in the second quarter of 2017, which includes the non-cash amortization of resident leases of $2.1 million associated with communities acquired by the Company in the previous 12 months. |
CAPITAL/Page 2
| The Companys Net Loss for the second quarter of 2017, including all communities, was $7.8 million, which includes the non-cash amortization of resident leases of $2.1 million associated with communities acquired by the Company in the previous 12 months. |
| Excluding items noted and reconciled on the final page of this release, the Companys adjusted net loss was $2.3 million in the second quarter of 2017. |
| Adjusted EBITDAR was $38.3 million in the second quarter of 2017 compared to $39.0 million in the second quarter of 2016. Adjusted EBITDAR is a financial valuation measure, rather than a financial performance measure, used by management and others to evaluate the value of companies in the senior living industry. The three communities undergoing repositioning, lease-up or significant renovation and conversion, not included in Adjusted EBITDAR, generated an additional $1.1 million of EBITDAR in the second quarter of 2017. |
| Adjusted Cash From Facility Operations (CFFO) was $11.5 million in the second quarter of 2017 compared to $12.9 million in the second quarter of 2016. |
Our occupancy improved in the second quarter following the heavy and prolonged flu season earlier this year and our average monthly rent increased a robust 2.1% in the first six months of the year, said Lawrence A. Cohen, Chief Executive Officer of the Company. In addition, same-community deposits increased 6.2% and same-community move-ins improved 3.6% compared to the second quarter of 2016. These strong demand metrics give us excellent momentum for occupancy growth and rate growth going forward.
We continued to make steady progress on the lease-up of units previously out of service in the second quarter. Importantly, we completed the final phase of renovation and conversion of units at one of our repositioned communities in April. The community has 249 total units and is expected to make a significant contribution to revenue, EBITDAR and CFFO when occupancy stabilizes and its results are added back to our non-GAAP results.
We expect the execution of our strategic business plan to produce outstanding growth in all of our key metrics going forward. In addition to core growth in our operations, our growth will be enhanced by the significant renovations we have made across our portfolio and even greater by the return of a significant number of units currently not included in our results due to conversions and repositionings. And, we have a robust acquisition pipeline that will allow us to continue to increase our ownership of high-quality senior housing communities in geographically concentrated regions. As such, we believe that we are well positioned to create long-term shareholder value as a larger company with scale, competitive advantages and a substantially all private-pay business model in a highly-fragmented industry that benefits from long-term demographics, need-driven demand, limited competitive new supply in our local markets, a strong housing market and a growing economy.
CAPITAL/Page 3
Recent Investment Activity
| The Company announced today that it has agreed to purchase a community for a total purchase price of approximately $20.0 million, subject to due diligence and customary closing conditions. The acquisition, which is expected to close in mid-October, would expand the Companys operations in New York. |
Highlights of the transaction include:
| Adds 100 independent living units with average monthly rent of approximately $3,150. |
| Increases annual revenue by approximately $3.6 million. |
| Increases annual Adjusted EBITDAR by approximately $1.6 million. |
| Increases annual Adjusted CFFO by approximately $0.7 million. |
| The Company has a strong pipeline of near- to medium-term targets and is conducting due diligence on additional acquisitions of high-quality senior housing communities in states with existing operations. With a strong reputation among sellers, the Company sources the majority of its acquisitions off-market and at attractive terms. |
Financial Results - Second Quarter
For the second quarter of 2017, the Company reported revenue of $116.7 million, compared to revenue of $111.0 million in the second quarter of 2016, an increase of 5.1%. The increase was mostly due to the acquisition of three communities since the second quarter of 2016, not including the acquisition of the four previously-leased communities in the first quarter of 2017 which increased Adjusted CFFO but did not result in increases to the Companys revenue or expense. Revenue for consolidated communities excluding the three communities undergoing repositioning, lease-up or significant renovation and conversion increased 5.0% in the second quarter of 2017 as compared to the second quarter of 2016.
Operating expenses for the second quarter of 2017 were $73.3 million, an increase of $6.1 million from the second quarter of 2016. The increase was primarily due to the acquisitions of senior housing communities made during or since the second quarter of 2016 and increased contract labor costs for additional staffing required for newly licensed memory care and assisted living units, which the Company expects to diminish as permanent staff is hired.
General and administrative expenses for the second quarter of 2017 were $6.1 million. This compares to general and administrative expenses of $5.0 million in the second
CAPITAL/Page 4
quarter of 2016. Excluding transaction and conversion costs in both periods, general and administrative expenses increased $1.1 million in the second quarter of 2017 as compared to the second quarter of 2016, primarily due to a $1.4 million increase in net healthcare expense year over year. May claims expense was unusually high as covered employees accelerated healthcare services before higher out of pocket expenses associated with changes to the Companys healthcare plans took effect in June. Structural changes in the new program resulted in significantly lower claims expense in June and July as expected. As a percentage of revenues under management, general and administrative expenses, excluding transaction and conversion costs, were 4.8% in the second quarter of 2017 compared to 4.1% in the second quarter of 2016.
Income from operations for the second quarter of 2017 was $4.7 million. The Company recorded a net loss on a GAAP basis of $7.8 million in the second quarter of 2017. Excluding items noted and reconciled on the final page of this release, the Companys adjusted net loss was $2.3 million in the second quarter of 2017.
The Companys Non-GAAP financial measures exclude three communities that are undergoing repositioning, lease-up of higher-licensed units or significant renovation and conversion (see Non-GAAP Financial Measures below).
Adjusted EBITDAR for the second quarter of 2017 was $38.3 million as compared to $39.0 million in the second quarter of 2016. The three communities undergoing repositioning, lease-up or significant renovation and conversion, not included in Adjusted EBITDAR, generated an additional $1.1 million of EBITDAR.
Adjusted CFFO was $11.5 million in the second quarter of 2017, as compared to $12.9 million in the second quarter of 2016. The three communities undergoing repositioning, lease-up or significant renovation and conversion, not included in Adjusted CFFO, generated an additional $0.3 million of CFFO.
Operating Activities
Same-community results exclude the three 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 second quarter of 2017 increased 0.8% versus the second quarter of 2016.
Same-community operating expenses increased 3.4% from the second quarter of the prior year, excluding conversion costs in both periods. On the same basis, labor costs, including benefits, increased 2.6%, food costs increased 0.2% and utilities increased 2.3%, all as compared to the second quarter of 2016. At communities that have not converted units to higher levels of care in the last year, labor costs increased 2.2%. The most significant expense increase was in contract labor costs, mostly related to additional staffing required for newly licensed memory care and assisted living units. Contract labor is expected to decrease in the third and fourth quarters of 2017 as permanent staff are hired. Same-community net operating income decreased 2.9% in the second quarter of 2017 as compared to the second quarter of 2016.
CAPITAL/Page 5
Capital expenditures for the second quarter of 2017 were $9.2 million, representing approximately $7.7 million of investment spending and approximately $1.5 million of recurring capital expenditures.
Balance Sheet
The Company ended the quarter with $29.6 million of cash and cash equivalents, including restricted cash. During the second quarter of 2017, the Company spent $9.2 million on capital improvements. The Company received reimbursements from one of its REIT partners totaling $1.4 million in the second quarter for capital improvements at certain leased communities and expects to receive additional reimbursements as the remaining projects at leased communities are completed.
As of June 30, 2017, the Company financed its owned communities with mortgages totaling $964.1 million at interest rates averaging 4.6%. All of the Companys debt is at fixed interest rates, except for two bridge loans totaling approximately $76.6 million at June 30, 2017, one of which matures in the third quarter of 2018 and the other in the second quarter of 2020. The earliest maturity date for the Companys fixed-rate debt is in 2021.
The Companys 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 Companys acquisition, conversion and renovation programs.
Q2 2017 Conference Call Information
The Company will host a conference call with senior management to discuss the Companys second quarter 2017 financial results. The call will be held on Tuesday, August 1, 2017, at 5:00 p.m. Eastern Time. The call-in number is 323-701-0230, confirmation code 1577957. 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 Companys shareholders and the public, the conference call will be recorded and available for replay starting August 1, 2017 at 8:00 p.m. Eastern Time, until August 9, 2017 at 8:00 p.m. Eastern Time. To access the conference call replay, call 719-457-0820, confirmation code 1577957. The conference call will also be made available for playback via the Companys corporate website, www.capitalsenior.com.
Non-GAAP Financial Measures of Operating Performance
Adjusted EBITDAR is a financial valuation measure and Adjusted Net Income and Adjusted CFFO are financial performance measures that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). Non-GAAP
CAPITAL/Page 6
financial measures may have material limitations in that they do not reflect all of the costs 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.
Adjusted EBITDAR is a valuation measure commonly used by our management, research analysts and investors to value companies in the senior living industry. Because Adjusted EBITDAR excludes interest expense and rent expense, it allows our management, research analysts and investors to compare the enterprise values of different companies without regard to differences in capital structures and leasing arrangements.
The Company believes that Adjusted Net Income and Adjusted CFFO are useful as performance measures in identifying trends in day-to-day operations because they exclude the costs associated with acquisitions and conversions and other items that do not ordinarily reflect the ongoing operating results of our primary business. Adjusted Net Income and Adjusted CFFO provide indicators to management of progress in achieving both consolidated and individual business unit operating performance and are used by research analysts and investors to evaluate the performance of companies in the senior living industry.
The Company strongly urges you to review on the last page of this release the reconciliation of net loss to Adjusted EBITDAR and the reconciliation of net (loss) income to Adjusted Net (Loss) Income and Adjusted CFFO, along with the Companys consolidated balance sheets, statements of operations, and statements of cash flows.
About the Company
Capital Senior Living Corporation is one of the nations largest operators of residential communities for senior adults. The Companys operating strategy is to provide value to residents by providing quality senior housing services at reasonable prices. The Companys 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 129 senior housing communities in geographically concentrated regions with an aggregate capacity of approximately 16,500 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 Companys 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.
CAPITAL/Page 7
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
(unaudited, in thousands, except per share data)
June 30, 2017 |
December 31 2016 , |
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ASSETS | ||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 16,218 | $ | 34,026 | ||||
Restricted cash |
13,367 | 13,297 | ||||||
Accounts receivable, net |
10,488 | 13,675 | ||||||
Federal and state income taxes receivable |
17 | | ||||||
Property tax and insurance deposits |
11,079 | 14,665 | ||||||
Prepaid expenses and other |
4,391 | 6,365 | ||||||
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Total current assets |
55,560 | 82,028 | ||||||
Property and equipment, net |
1,111,903 | 1,032,430 | ||||||
Other assets, net |
20,337 | 31,323 | ||||||
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Total assets |
$ | 1,187,800 | $ | 1,145,781 | ||||
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LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||
Current liabilities: |
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Accounts payable |
$ | 7,995 | $ | 5,051 | ||||
Accrued expenses |
36,157 | 39,064 | ||||||
Current portion of notes payable, net of deferred loan costs |
17,371 | 17,889 | ||||||
Current portion of deferred income |
15,174 | 16,284 | ||||||
Current portion of capital lease and financing obligations |
2,885 | 1,339 | ||||||
Federal and state income taxes payable |
| 218 | ||||||
Customer deposits |
1,480 | 1,545 | ||||||
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Total current liabilities |
81,062 | 81,390 | ||||||
Deferred income |
10,975 | 12,205 | ||||||
Capital lease and financing obligations, net of current portion |
50,734 | 37,439 | ||||||
Other long-term liabilities |
14,727 | 15,325 | ||||||
Notes payable, net of deferred loan costs and current portion |
939,187 | 882,504 | ||||||
Commitments and contingencies |
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Shareholders equity: |
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Preferred stock, $.01 par value: |
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Authorized shares 15,000; no shares issued or outstanding |
| | ||||||
Common stock, $.01 par value: |
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Authorized shares 65,000; issued and outstanding |
308 | 305 | ||||||
Additional paid-in capital |
175,652 | 171,599 | ||||||
Retained deficit |
(81,415 | ) | (51,556 | ) | ||||
Treasury stock, at cost 494 shares in 2017 and 2016 |
(3,430 | ) | (3,430 | ) | ||||
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Total shareholders equity |
91,115 | 116,918 | ||||||
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Total liabilities and shareholders equity |
$ | 1,187,800 | $ | 1,145,781 | ||||
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CAPITAL/Page 9
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited, in thousands, except per share data)
Three Months Ended June 30, |
Six Months Ended June 30, |
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2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenues: |
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Resident revenue |
$ | 116,718 | $ | 111,034 | $ | 232,708 | $ | 220,207 | ||||||||
Expenses: |
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Operating expenses (exclusive of facility lease expense and depreciation and amortization expense shown below) |
73,289 | 67,162 | 146,067 | 133,685 | ||||||||||||
General and administrative expenses |
6,083 | 4,972 | 12,317 | 11,220 | ||||||||||||
Facility lease expense |
13,968 | 15,445 | 28,555 | 30,650 | ||||||||||||
Loss on facility lease termination |
| | 12,858 | | ||||||||||||
Stock-based compensation expense |
1,941 | 2,490 | 3,871 | 5,003 | ||||||||||||
Depreciation and amortization expense |
16,746 | 15,172 | 33,959 | 29,703 | ||||||||||||
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Total expenses |
112,027 | 105,241 | 237,627 | 210,261 | ||||||||||||
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Income (Loss) from operations |
4,691 | 5,793 | (4,919 | ) | 9,946 | |||||||||||
Other income (expense): |
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Interest income |
14 | 19 | 32 | 35 | ||||||||||||
Interest expense |
(12,404 | ) | (10,345 | ) | (24,409 | ) | (20,330 | ) | ||||||||
Loss on disposition of assets, net |
| (6 | ) | (125 | ) | (37 | ) | |||||||||
Other income |
2 | 233 | 5 | 233 | ||||||||||||
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Loss before provision for income taxes |
(7,697 | ) | (4,306 | ) | (29,416 | ) | (10,153 | ) | ||||||||
Provision for income taxes |
(138 | ) | (140 | ) | (261 | ) | (277 | ) | ||||||||
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Net loss |
$ | (7,835 | ) | $ | (4,446 | ) | $ | (29,677 | ) | $ | (10,430 | ) | ||||
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Per share data: |
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Basic net loss per share |
$ | (0.27 | ) | $ | (0.15 | ) | $ | (1.01 | ) | $ | (0.36 | ) | ||||
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Diluted net loss per share |
$ | (0.27 | ) | $ | (0.15 | ) | $ | (1.01 | ) | $ | (0.36 | ) | ||||
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Weighted average shares outstanding basic |
29,478 | 28,926 | 29,384 | 28,838 | ||||||||||||
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Weighted average shares outstanding diluted |
29,478 | 28,926 | 29,384 | 28,838 | ||||||||||||
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Comprehensive loss |
$ | (7,835 | ) | $ | (4,446 | ) | $ | (29,677 | ) | $ | (10,430 | ) | ||||
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CAPITAL/Page 10
CAPITAL SENIOR LIVING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
Six Months Ended June 30, |
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2017 | 2016 | |||||||
Operating Activities |
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Net loss |
$ | (29,677 | ) | $ | (10,430 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: |
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Depreciation and amortization |
33,959 | 29,703 | ||||||
Amortization of deferred financing charges |
800 | 567 | ||||||
Amortization of deferred lease costs and lease intangibles |
435 | 191 | ||||||
Amortization of lease incentives |
(597 | ) | (375 | ) | ||||
Deferred income |
(502 | ) | 44 | |||||
Lease incentives |
3,655 | 3,890 | ||||||
Loss on facility lease termination |
12,858 | | ||||||
Loss on disposition of assets, net |
125 | 37 | ||||||
Provision for bad debts |
975 | 809 | ||||||
Stock-based compensation expense |
3,871 | 5,003 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
(3,828 | ) | (5,872 | ) | ||||
Property tax and insurance deposits |
3,586 | 2,926 | ||||||
Prepaid expenses and other |
1,974 | (1,016 | ) | |||||
Other assets |
5,380 | (566 | ) | |||||
Accounts payable |
2,944 | (2,214 | ) | |||||
Accrued expenses |
(2,907 | ) | (1,704 | ) | ||||
Other liabilities |
2,750 | 5,778 | ||||||
Federal and state income taxes receivable/payable |
(235 | ) | (206 | ) | ||||
Deferred resident revenue |
(517 | ) | (1,136 | ) | ||||
Customer deposits |
(65 | ) | (121 | ) | ||||
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Net cash provided by operating activities |
34,984 | 25,308 | ||||||
Investing Activities |
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Capital expenditures |
(21,942 | ) | (29,747 | ) | ||||
Cash paid for acquisitions |
(85,000 | ) | (64,750 | ) | ||||
Proceeds from disposition of assets |
13 | | ||||||
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Net cash used in investing activities |
(106,929 | ) | (94,497 | ) | ||||
Financing Activities |
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Proceeds from notes payable |
66,584 | 69,892 | ||||||
Repayments of notes payable |
(10,302 | ) | (8,183 | ) | ||||
Increase in restricted cash |
(70 | ) | (8 | ) | ||||
Cash payments for capital lease and financing obligations |
(1,161 | ) | (583 | ) | ||||
Cash proceeds from the issuance of common stock |
3 | 66 | ||||||
Excess tax benefits on stock options exercised |
| (27 | ) | |||||
Purchases of treasury stock |
| (2,496 | ) | |||||
Deferred financing charges paid |
(917 | ) | (1,073 | ) | ||||
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Net cash provided by financing activities |
54,137 | 57,588 | ||||||
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|
|||||
Decrease in cash and cash equivalents |
(17,808 | ) | (11,601 | ) | ||||
Cash and cash equivalents at beginning of period |
34,026 | 56,087 | ||||||
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|
|
|||||
Cash and cash equivalents at end of period |
$ | 16,218 | $ | 44,486 | ||||
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|
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Supplemental Disclosures |
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Cash paid during the period for: |
||||||||
Interest |
$ | 23,265 | $ | 19,627 | ||||
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|
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Income taxes |
$ | 529 | $ | 546 | ||||
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CAPITAL/Page 11
Capital Senior Living Corporation
Supplemental Information
Communities | Average Resident Capacity |
Average Units | ||||||||||||||||||||||
Q2 17 | Q2 16 | Q2 17 | Q2 16 | Q2 17 | Q2 16 | |||||||||||||||||||
Portfolio Data |
||||||||||||||||||||||||
I. Community Ownership / Management |
||||||||||||||||||||||||
Consolidated communities |
||||||||||||||||||||||||
Owned |
83 | 76 | 10,767 | 9,436 | 8,179 | 7,251 | ||||||||||||||||||
Leased |
46 | 50 | 5,756 | 6,333 | 4,409 | 4,918 | ||||||||||||||||||
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|
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Total |
129 | 126 | 16,523 | 15,769 | 12,588 | 12,169 | ||||||||||||||||||
Independent living |
6,879 | 6,792 | 5,245 | 5,294 | ||||||||||||||||||||
Assisted living |
9,644 | 8,977 | 7,343 | 6,875 | ||||||||||||||||||||
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|
|
|
|
|
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Total |
16,523 | 15,769 | 12,588 | 12,169 | ||||||||||||||||||||
II. Percentage of Operating Portfolio |
||||||||||||||||||||||||
Consolidated communities |
||||||||||||||||||||||||
Owned |
64.3 | % | 60.3 | % | 65.2 | % | 59.8 | % | 65.0 | % | 59.6 | % | ||||||||||||
Leased |
35.7 | % | 39.7 | % | 34.8 | % | 40.2 | % | 35.0 | % | 40.4 | % | ||||||||||||
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Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||
Independent living |
41.6 | % | 43.1 | % | 41.7 | % | 43.5 | % | ||||||||||||||||
Assisted living |
58.4 | % | 56.9 | % | 58.3 | % | 56.5 | % | ||||||||||||||||
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|
|
|
|||||||||||||||||
Total |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
CAPITAL/Page 12
Capital Senior Living Corporation
Supplemental Information (excludes communities being repositioned/leased up)
Selected Operating Results
Q2 17 | Q2 16 | |||||||
I. Owned communities |
||||||||
Number of communities |
81 | 74 | ||||||
Resident capacity |
10,222 | 8,891 | ||||||
Unit capacity (1) |
7,775 | 6,845 | ||||||
Financial occupancy (2) |
88.2 | % | 89.2 | % | ||||
Revenue (in millions) |
71.8 | 62.2 | ||||||
Operating expenses (in millions) (3) |
44.9 | 38.3 | ||||||
Operating margin (3) |
37 | % | 38 | % | ||||
Average monthly rent |
3,489 | 3,397 | ||||||
II. Leased communities |
||||||||
Number of communities |
45 | 49 | ||||||
Resident capacity |
5,530 | 6,107 | ||||||
Unit capacity (1) |
4,223 | 4,731 | ||||||
Financial occupancy (2) |
84.1 | % | 87.3 | % | ||||
Revenue (in millions) |
40.1 | 44.4 | ||||||
Operating expenses (in millions) (3) |
23.1 | 24.5 | ||||||
Operating margin (3) |
42 | % | 45 | % | ||||
Average monthly rent |
3,768 | 3,584 | ||||||
III. Consolidated communities |
||||||||
Number of communities |
126 | 123 | ||||||
Resident capacity |
15,752 | 14,998 | ||||||
Unit capacity (1) |
11,998 | 11,576 | ||||||
Financial occupancy (2) |
86.8 | % | 88.4 | % | ||||
Revenue (in millions) |
112.0 | 106.6 | ||||||
Operating expenses (in millions) (3) |
68.0 | 62.9 | ||||||
Operating margin (3) |
39 | % | 41 | % | ||||
Average monthly rent |
3,584 | 3,473 | ||||||
IV. Communities under management |
||||||||
Number of communities |
126 | 123 | ||||||
Resident capacity |
15,752 | 14,998 | ||||||
Unit capacity (1) |
11,998 | 11,576 | ||||||
Financial occupancy (2) |
86.8 | % | 88.4 | % | ||||
Revenue (in millions) |
112.0 | 106.6 | ||||||
Operating expenses (in millions) (3) |
68.0 | 62.9 | ||||||
Operating margin (3) |
39 | % | 41 | % | ||||
Average monthly rent |
3,584 | 3,473 | ||||||
V. Same communities under management |
||||||||
Number of communities |
122 | 122 | ||||||
Resident capacity |
15,132 | 14,934 | ||||||
Unit capacity (1) |
11,547 | 11,527 | ||||||
Financial occupancy (2) |
86.8 | % | 88.4 | % | ||||
Revenue (in millions) |
107.1 | 106.3 | ||||||
Operating expenses (in millions) (3) |
64.6 | 62.5 | ||||||
Operating margin (3) |
40 | % | 41 | % | ||||
Average monthly rent |
3,563 | 3,475 | ||||||
VI. General and Administrative expenses as a percent of Total Revenues under Management |
||||||||
Second quarter (4) |
4.8 | % | 4.1 | % | ||||
Year to date (4) |
4.8 | % | 4.5 | % | ||||
VII. Consolidated Mortgage Debt Information (in thousands, except interest rates) |
||||||||
(excludes insurance premium and auto financing) |
||||||||
Total fixed rate mortgage debt |
887,477 | 822,615 | ||||||
Total variable rate mortgage debt |
76,624 | 11,800 | ||||||
Weighted average interest rate |
4.6 | % | 4.6 | % |
(1) | Due to conversion and refurbishment projects currently in progress at certain communities, unit capacity is lower in Q2 17 than Q2 16 for same communities under management, which affects all groupings of communities. |
(2) | Financial occupancy represents actual days occupied divided by total number of available days during the month of the quarter. |
(3) | Excludes management fees, provision for bad debts and transaction and conversion costs. |
(4) | Excludes transaction and conversion costs. |
CAPITAL/Page 13
CAPITAL SENIOR LIVING CORPORATION
NON-GAAP RECONCILIATIONS
(In thousands, except per share data)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Adjusted EBITDAR |
||||||||||||||||
Net loss |
$ | (7,835 | ) | $ | (4,446 | ) | $ | (29,677 | ) | $ | (10,430 | ) | ||||
Depreciation and amortization expense |
16,746 | 15,172 | 33,959 | 29,703 | ||||||||||||
Stock-based compensation expense |
1,941 | 2,490 | 3,871 | 5,003 | ||||||||||||
Facility lease expense |
13,968 | 15,445 | 28,555 | 30,650 | ||||||||||||
Loss on facility lease termination |
| | 12,858 | | ||||||||||||
Provision for bad debts |
532 | 322 | 975 | 809 | ||||||||||||
Interest income |
(14 | ) | (19 | ) | (32 | ) | (35 | ) | ||||||||
Interest expense |
12,404 | 10,345 | 24,409 | 20,330 | ||||||||||||
Loss (Gain) on disposition of assets, net |
| 6 | 125 | 37 | ||||||||||||
Other income |
(2 | ) | (233 | ) | (5 | ) | (233 | ) | ||||||||
Provision for income taxes |
138 | 140 | 261 | 277 | ||||||||||||
Casualty losses |
712 | 170 | 1,023 | 435 | ||||||||||||
Transaction and conversion costs |
838 | 416 | 1,552 | 1,400 | ||||||||||||
Communities excluded due to repositioning/lease-up |
(1,112 | ) | (831 | ) | (1,813 | ) | (1,655 | ) | ||||||||
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Adjusted EBITDAR |
$ | 38,316 | $ | 38,977 | $ | 76,061 | $ | 76,291 | ||||||||
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Adjusted Revenues |
||||||||||||||||
Total revenues |
$ | 116,718 | $ | 111,034 | $ | 232,708 | $ | 220,207 | ||||||||
Communities excluded due to repositioning/lease-up |
(4,700 | ) | (4,350 | ) | (9,341 | ) | (8,799 | ) | ||||||||
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|
|
|
|
|||||||||
Adjusted revenues |
$ | 112,018 | $ | 106,684 | $ | 223,367 | $ | 211,408 | ||||||||
|
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|
|
|
|
|
|||||||||
Adjusted net loss and Adjusted net loss per share |
||||||||||||||||
Net loss |
$ | (7,835 | ) | $ | (4,446 | ) | $ | (29,677 | ) | $ | (10,430 | ) | ||||
Casualty losses |
712 | 170 | 1,023 | 435 | ||||||||||||
Transaction and conversion costs |
933 | 184 | 2,036 | 1,168 | ||||||||||||
Resident lease amortization |
2,085 | 3,500 | 5,323 | 7,009 | ||||||||||||
Loss on facility lease termination |
| | 12,859 | | ||||||||||||
Loss (Gain) on disposition of assets |
| 6 | 125 | 37 | ||||||||||||
Tax impact of Non-GAAP adjustments (37%) |
(1,380 | ) | (1,428 | ) | (7,905 | ) | (3,200 | ) | ||||||||
Deferred tax asset valuation allowance |
2,768 | 1,532 | 10,933 | 3,423 | ||||||||||||
Communities excluded due to repositioning/lease-up |
453 | 369 | 1,038 | 659 | ||||||||||||
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|
|
|
|
|
|
|
|||||||||
Adjusted net loss |
$ | (2,264 | ) | $ | (113 | ) | $ | (4,245 | ) | $ | (899 | ) | ||||
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|
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|||||||||
Diluted shares outstanding |
29,478 | 28,926 | 29,384 | 28,838 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted net loss per share |
$ | (0.08 | ) | $ | (0.00 | ) | $ | (0.14 | ) | $ | (0.03 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted CFFO |
||||||||||||||||
Net loss |
$ | (7,835 | ) | $ | (4,446 | ) | $ | (29,677 | ) | $ | (10,430 | ) | ||||
Non-cash charges, net |
20,535 | 21,304 | 55,579 | 39,869 | ||||||||||||
Lease incentives |
(1,397 | ) | (3,022 | ) | (3,655 | ) | (3,890 | ) | ||||||||
Recurring capital expenditures |
(1,186 | ) | (1,155 | ) | (2,373 | ) | (2,295 | ) | ||||||||
Casualty losses |
712 | 170 | 1,023 | 435 | ||||||||||||
Transaction and conversion costs |
933 | 184 | 1,812 | 1,168 | ||||||||||||
Tax impact of Spring Meadows Transaction |
| (106 | ) | | (212 | ) | ||||||||||
Communities excluded due to repositioning/lease-up |
(311 | ) | (49 | ) | (233 | ) | (91 | ) | ||||||||
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|
|
|
|
|
|
|
|||||||||
Adjusted CFFO |
$ | 11,451 | $ | 12,880 | $ | 22,476 | $ | 24,554 | ||||||||
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***
Capital Senior Living A Leading Pure-Play Senior Housing Owner-Operator Exhibit 99.2
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.
Non-GAAP Financial Measures Adjusted EBITDAR is a financial valuation measure and Adjusted Net Income and Adjusted CFFO are financial performance measures 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 costs 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. Adjusted EBITDAR is a valuation measure commonly used by our management, research analysts and investors to value companies in the senior living industry. Because Adjusted EBITDAR excludes interest expense and rent expense, it allows our management, research analysts and investors to compare the enterprise values of different companies without regard to differences in capital structures and leasing arrangements. The Company believes that Adjusted Net Income and Adjusted CFFO are useful as performance measures in identifying trends in day-to-day operations because they exclude the costs associated with acquisitions and conversions and other items that do not ordinarily reflect the ongoing operating results of our primary business. Adjusted Net Income and Adjusted CFFO provide indicators to management of progress in achieving both consolidated and individual business unit operating performance and are used by research analysts and investors to evaluate the performance of companies in the senior living industry. The Company strongly urges you to review on the last page of this release the reconciliation of net loss to Adjusted EBITDAR and the reconciliation of net (loss) income to Adjusted Net (Loss) Income and Adjusted CFFO, along with the Company’s consolidated balance sheets, statements of operations, and statements of cash flows.
Capital Senior Living Investment Rationale Attractively Positioned in the Highly Fragmented Senior Housing Market Executing a Long-Term, Sustainable Growth Strategy with a Focus on Real Estate Ownership Capital Plan Supports Long-Term Growth Initiatives Track Record of Strong Growth and Uniquely Positioned for Continued Success CSU has a clear and differentiated real-estate strategy to drive industry-leading growth and superior shareholder value 1 4 2 3
Attractively Positioned in the Highly Fragmented Senior Housing Market 1
Top-10 Operator and Pure-Play Senior Housing Company Portfolio Mix (Average Units) As of June 30, 2017 AR. 173 AZ. 189 CT. 238 FL. 429 IA. 122 IL. 762 IN. 2,440 MI. 173 MN. 173 MO. 662 MS. 143 NC. 457 SC. 683 NE. 650 NJ. 98 NY. 603 OH. 2,372 TX. 3,990 VA. 455 CA. 408 CA. 408 AZ. 189 Resident Capacity By State Capital Senior Living operates 129 communities in geographically concentrated regions with the capacity to serve 16,500 residents WI. 741 GA. 168 MA. 323 Number of residents by State Greater than 2,000 500 - 2,000 Less than 500 Assisted Living
One of the Largest Senior Housing Owners by Percentage of Ownership Ownership Evolution Advantages to Real Estate Ownership Ownership of 10 Largest US Senior Housing Operators Maximizes cash flow and real estate value by providing valuation support Stronger margin profile Eliminates lease escalators, driving sustainable cash flows Optimizes asset management and financial flexibility Ability to reposition communities Ability to increase loans based on the appreciated value to re-deploy the capital into growth initiatives Owned % 129 Total Properties 77 Total Properties 32.5% 64.3% 2016 Properties Owned 179 161 83 9 407 86 37 26 0 0 2016 Properties Operated 179 213 129 18 1,114 308 140 276 252 156 Source: ASHA 2016 Top 50, company filings and investor presentations. Note: Five Star Senior Living pro forma for property acquisitions and divestitures. (1) Primarily minority interest in joint ventures. NM NM
CSU’s Pure-Play Private-Pay Senior Housing Model has Many Similarities to the Multi-Family and Lodging Sectors, While Historically Providing Investors with Higher Returns Key Housing Sector Drivers Benchmarking the Housing Sector Senior Housing Yields Consistent High Investment Returns NCREIF Annualized Total Investment Returns (1,3,5, 10-Year Periods, as of 12/31/16) Momentum: ’17/’18 vs. ’15/’16 ’17/’18 Average M-RevPAF (1) Expected Actual & Momentum Source: Green Street Advisors and NIC MAP Data Service as of 12/31/16. (1)M-RevPAF is Market Revenue per Available Foot and represents the combined changes in occupancy (demand) and rents (pricing). Strongest Weakest Waning Waxing
The Senior Living Market Offers Attractive Long Term Fundamentals... U.S. population 75+ years old is expected to increase from ~6% of total current population to 12% by 2030 Current penetration rate implies demand growth of ~40K units per annum 75% of the Independent Living market and 63% of the Assisted Living market is comprised of small players operating at a cost structure disadvantage (Population in thousands) 75% Expected Growth from 2014 to 2030 Top 10 Remaining Market Top 25 Clear opportunity for scale players to capture a disproportionate share of growth through organic initiatives and accretive acquisitions Source: 2010 Consensus Summary File 1, U.S. Census Bureau, Population Division, IBISWorld and Wall Street Research. U.S. Seniors Population Trends (75+ years old) Independent Living Companies Assisted Living Companies
...and a Highly Constructive Current Operating Environment Source: NIC MAP Data Service as of 06/30/17. Occupancy Stabilizing Across the Country Senior Housing Rent is Seeing Growth After Recent Declines Average Stabilized Occupancy YoY Rent Growth Senior Housing IL AL Industry Supply is Stabilizing in IL and Senior Housing Construction as % of Inventory Since 2Q 2016, overall industry supply has flat lined across Senior Housing as a whole AL experienced a decline in supply in 2Q 2017 after an uptick in 1Q 2017 Senior Housing IL AL
CSU Has Limited Exposure to the Top 10 MSAs with the Highest Levels of Construction Source: NIC MAP Data Service data as of 06/30/2017. Senior Housing Construction vs. Inventory Across the U.S. Top 10 Highest Construction in MSAs Total CSU units in top 10 highest construction MSAs (~2% of total CSU units) Over ~98% of CSU units are located outside of the top 10 highest construction MSAs Capital Senior Living Community 0 – 2% Construction vs. Inventory > 24% Metro Construction vs Inventory CSU Units CSU Occupancy Trenton, NJ 25.7% - - Fort Myers, FL 24.6% - - Charleston, SC 24.3% - - Austin, TX 18.4% - - Colorado Springs, CO 17.4% - - Baton Rouge, LA 16.9% - - Columbus, OH 16.7% 111 97% Columbia, SC 14.6% 118 89% Atlanta, GA 13.3% - - Orlando, FL 12.5% - - 229
Executing a Long-Term, Sustainable Growth Strategy with a Focus on Real Estate Ownership 2
Executing a Long-Term, Sustainable Growth Strategy with a Focus on Real Estate Ownership Conversions Accretive Acquisitions Core Organic Growth Increasing Real Estate Ownership
Core Organic Growth Driven by Occupancy, Pricing Improvements and Cost Containment Occupancy improvement where opportunity exists Increasing average rents through increasing market and in-house rents and level of care charges Proactive expense management Cash flow enhancing renovations and refurbishments Core Organic Growth Increasing Occupancy and Average Monthly Rent Trends Average Rent Occupancy %
Strategic Accretive Acquisitions have Achieved 16% Average Cash-On-Cash Returns Year 1 Cash-On-Cash Returns With a strong reputation among sellers, CSU sources the majority of acquisitions off market and at attractive terms, and maintains a robust pipeline of near-to medium-term targets Pipeline allows for ~$150mm of highly accretive acquisitions annually over the near-to medium term Acquisitions financed with attractive fixed rate non-recourse mortgage loans Weighted average interest rate has decreased 140bps since 2010 Total Purchase Price ($mm) $ 83.4M $ 181.3 $ 150.4 $ 160.2 $ 162.5 $ 138.4 $ 85.0 Communities 7 17 11 8 9 8 4 Units 551 1,367 881 819 791 723 547 Average Borrowing Rate 5.1% 4.5% 5.4% 4.5% 4.3% 4.3% 4.8%* 10-Year Treasury Range 1.7% - 3.2% 1.4% - 2.4% 1.7% - 3.0% 2.1% - 3.0% 1.7% - 2.5% 1.4% - 2.5% 2.2% - 2.6% * Variable Rate
Increasing Owned Portfolio Provides Increased Financial Flexibility CSU has achieved on average a 42.0% increase in property value over a 3 year period at communities on which it has executed supplemental loans in 2015 and 2016, which has provided financial flexibility through $66.3mm of proceeds for re-deployment to growth initiatives $140.9 $296.0 Appreciated Value of Supplemental Loan Properties 32.5% 38.1% 47.5% 52.7% 58.7% 57.3% Capital Senior Living’s Ownership History Owned % 61.2% 64.3%
Conversions Drive Significant Improvements in Key Financial Metrics Revenue and NOI Growth – 2Q17 vs. 2Q14 (Period prior to Conversions)(1) Expected Completion of Units Out of Service (2) 776 total units were out of service at the beginning of 2017; when stabilized, the total 776 units are expected to contribute approximately $32.0mm of Revenue, $11.0mm of EBITDAR and $7.5mm of CFFO on an annual basis Three communities being repositioned or under significant renovation; all units are out of CSU non-GAAP statistical and financial measures and will be added back when the communities reach stabilization Units Represents the 400 units with conversions completed as of 2Q15. Represents when the units are completed. Actual contributions of Revenue, EBITDAR and CFFO will depend on timing of lease-up. 519 233 249 2
Capital Plan Supports Long-Term Growth Initiatives 3
Transaction Overview Overview of the Transaction CSU purchased four previously leased properties in January 2017 Purchase Price: $85mm CFFO accretion of $3.0mm in Year 1 Percentage of Owned Real Estate Owned % 129 Total Properties 129 Total Properties 61.2% 64.3% Benefits of the Transaction Maximizes cash flow and real estate value by providing valuation support Stronger margin profile Eliminates lease escalators, driving sustainable cash flows Optimizes asset management and financial flexibility Ability to reposition communities Ability to increase loans based on the appreciated value to re-deploy the capital into growth initiatives Increased owned portfolio from 61.2% to 64.3%
Track Record of Strong Growth and Uniquely Positioned for Continued Success 4
Strategy and Execution Have Delivered Strong Growth Revenue (1) Adjusted EBITDAR Adjusted CFFO (2) Note: $ in millions. Excludes community reimbursement revenue and management services revenue. (2)Excludes prepaid resident rent and tax savings related to cost segregation studies in 2012 and 2013. ($ In Millions) ($ In Millions) 18.9% CAGR 14.7% CAGR 14.2% CAGR ($ In Millions)
Healthy Balance Sheet to Support Future Initiatives Assets Cash and Securities $ 29.6 Other Current Assets 26.0 Total Current Assets 55.6 Fixed Assets 1,111.9 Other Assets 20.3 Total Assets $ 1,187.8 Liabilities & Equity Current Liabilities $ 81.1 Long-Term Debt 939.2 Other Liabilities 76.4 Total Liabilities 1,096.7 Stockholders’ Equity 91.1 Total Liabilities & Equity $ 1,187.8 As of June 30, 2017 (in millions)
Debt Maturities CSU has ample financial capacity to pursue all initiatives contemplated under its growth strategy No near term debt maturities Acquisitions financed with attractive fixed rate non-recourse mortgage loans Average duration of debt is 6.8 years, with approximately 93% of all debt maturing in 2021 and after (In thousands) Ample Financial Capacity to Pursue Growth Initiatives
Capital Senior Living Investment Rationale Attractively Positioned in the Highly Fragmented Senior Housing Market Executing a Long-Term, Sustainable Growth Strategy with a Focus on Real Estate Ownership Capital Plan Supports Long-Term Growth Initiatives Track Record of Strong Growth and Uniquely Positioned for Continued Success CSU has a clear and differentiated real-estate strategy to drive industry-leading growth and superior shareholder value 1 4 2 3 Conversions Accretive Acquisitions Core Organic Growth Increasing Real Estate Ownership