Five Star 8K - November 9, 2006

Five Star 8K - November 9, 2006 - Exhibit 99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	Contact:	Timothy A. Bonang,
		Manager of Investor Relations
		(617) 796-8149
		www.fivestarqualitycare.com

Five Star

Results for the Periods Ended September 30, 2006

____________________________________

Newton, MA (November 9, 2006). Five Star Quality Care, Inc. (AMEX: FVE) today announced its financial results for the periods ended September 30, 2006.

Results for the quarter ended September 30, 2006:

Income from continuing operations was $5.8 million for the quarter ended September 30, 2006, compared to a loss from continuing operations of $(83.4) million for the same period in 2005. Income (loss) from continuing operations per share for the quarters ended September 30, 2006 and 2005 was $0.18 and $(5.58), respectively.

During the third quarter of 2005, Five Star terminated 12 management agreements with Sunrise Senior Living, Inc. (NYSE: SRZ) and recognized a related termination charge of $81.5 million. To fund a portion of this termination charge, Five Star entered a sale leaseback transaction for six assisted living communities. As a result of the sale leaseback transaction, Five Star recorded a $2.3 million asset impairment charge in the third quarter of 2005 primarily relating to transaction costs. Also, during the third quarter of 2005, Five Star’s former insurance providers notified it of approximately $2.1 million of insurance costs related to prior periods and Five Star recorded these costs as an expense. In the aggregate, these items totaled $85.9. Without these charges, Five Star would have reported income from continuing operations and income per share from continuing operations in the third quarter of 2005 of $2.5 million and $0.17, respectively. We believe these adjusted amounts are a meaningful disclosure that may help shareholders to compare better our results of operations for the third quarter of 2005 to the same period in 2006. (See page 6 of the Supplemental Information attached hereto for a reconciliation of these adjusted amounts.)

Results for the nine months ended September 30, 2006:

The loss from continuing operations was $77.5 million for the nine months ended September 30, 2006, compared to a loss from continuing operations of $79.0 million for the same period in 2005. Loss from continuing operations per share for the nine months ended September 30, 2006 and 2005 was $2.81 and $6.01, respectively. Without the charge related to the termination of the 10 Sunrise management agreements, Five Star would have reported income from continuing operations and income per share from continuing operations for the nine months ended September 30, 2006 of $12.4 million and $0.45, respectively. We believe these adjusted amounts are a meaningful disclosure that may help shareholders to understand better our results of operations for the nine months ended September 30, 2006. (See page 6 of the Supplemental Information attached hereto for a reconciliation of these adjusted amounts.)

Occupancy and Average Daily Rate:

Five Star’s total occupancy for the quarters ended September 30, 2006 and 2005 was 91%. Occupancy for communities that Five Star has operated continuously since July 1, 2005 was 91% for the quarters ended September 30, 2006 and 2005.

The average daily rate for the quarter ended September 30, 2006 was $127, compared to $126 for the same period in 2005. The average daily rate for communities that Five Star has operated continuously since July 1, 2005 was $132 for the quarter ended September 30, 2006, compared to $127 for the same period in 2005.

Conference Call:

On Thursday, November 9, 2006 at 4:30 p.m. Eastern Time, Evrett W. Benton, president and chief executive officer, and Bruce J. Mackey Jr., treasurer and chief financial officer, will host a conference call to discuss the financial results for the periods ended September 30, 2006. Following the Company’s remarks, there will be a question and answer period.

The conference call telephone number is (800) 310-1961. Participants calling from outside the United States and Canada should dial (719) 457-2692. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through Wednesday, November 15, 2006. To hear the replay, dial (719) 457-0820. The replay pass code is 8401961.

A live audio webcast of the conference call will also be available in a listen only mode on the Company’s web site at www.fivestarqualitycare.com. Participants wanting to access the webcast should visit the Company’s web site about five minutes before the call. The archived webcast will be available for replay on the Company’s web site for about one week after the call.

About Five Star Quality Care, Inc.:

Five Star Quality Care, Inc. is a healthcare services company which operates healthcare and senior living communities. Five Star owns, leases and operates 161 senior living communities with over 18,000 separate living units located in 29 states. These communities include independent living, assisted living and skilled nursing communities. Five Star operates five institutional pharmacies, one of which also provides mail order pharmaceuticals to the general public. Five Star commenced operations at two rehabilitation hospitals on October 1, 2006. Five Star is headquartered in Newton, Massachusetts.

Supplemental Information, page 1of 6

FIVE STAR QUALITY CARE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except per share data)

	Three months ended September 30,						Nine months ended September 30,
	2006			2005			2006			2005
Revenues:
Net revenues from residents	$	187,575		$	177,342		$	552,973		$	518,138
Pharmacy revenue		14,274			10,286			38,684			22,641
Total revenues		201,849			187,628			591,657			540,779

Operating expenses:
Wages and benefits		97,139			92,040			283,447			266,900
Other operating expenses		44,974			45,890			140,047			131,094
Pharmacy expenses		14,146			9,881			37,335			21,332
Management fee to Sunrise Senior Living, Inc. (“Sunrise”)		1,400			5,672			7,792			16,911
Termination expense for certain Sunrise management agreements		-			81,536			89,833			81,536
Rent expense		27,112			24,712			79,675			73,171
General and administrative		8,358			6,467			22,993			19,169
Depreciation and amortization		2,559			1,901			7,120			5,284
Impairment of assets		-			2,333			-			2,333
Total operating expenses		195,688			270,432			668,242			617,730

Operating income (loss)		6,161			(82,804	)		(76,585	)		(76,951	)
Interest and other income		413			451			1,553			1,017
Interest expense		(786	)		(1,164	)		(2,419	)		(3,024	)

Income (loss) income from continuing operations before income taxes		5,788			(83,517	)		(77,451	)		(78,958	)
Benefit for income taxes		-			(73	)		-			-
Income (loss) from continuing operations		5,788			(83,444	)		(77,451	)		(78,958	)
Loss from discontinued operations ₍₁₎		(2,592	)		(930	)		(4,884	)		(2,996	)

Net income (loss)	$	3,196		$	(84,374	)	$	(82,335	)	$	(81,954	)

Weighted average shares outstanding		31,585			14,949			27,584			13,143

Basic and diluted income (loss) per share from:
Continuing operations	$	0.18		$	(5.58	)	$	(2.81	)	$	(6.01	)
Discontinued operations⁽¹⁾		(0.08	)		(0.06	)		(0.18	)		(0.23	)
Net income (loss) per share	$	0.10		$	(5.64	)	$	(2.99	)	$	(6.24	)

EBITDA⁽²⁾:
Net income (loss)	$	3,196		$	(84,374	)	$	(82,335	)	$	(81,954	)
Add: income taxes		-			(73	)		-			-
Add: depreciation and amortization		2,559			1,901			7,120			5,284
Add: interest expense		786			1,164			2,419			3,024
Add: loss from discontinued operations		2,592			930			4,884			2,996
Less: interest and other income		(413	)		(451	)		(1,553	)		(1,017	)
EBITDA⁽²⁾	$	8,720		$	(80,903	)	$	(69,465	)	$	(71,667	)

(1)

For the three and nine months ended September 30, 2006, $2.5 million or $0.08 per share and $3.4 million or $0.12 per share, respectively, of these losses arose from two nursing homes which were sold on November 1, 2006. The remainder of these losses arose from another nursing home currently being offered for sale.

(2)

We consider earnings before interest, taxes, depreciation and amortization, or EBITDA, to be an indicative measure of our operating performance. EBITDA is also useful in measuring our ability to service debt, fund capital expenditures and expand our business. We believe that EBITDA is a meaningful disclosure that may help shareholders to understand better our financial performance, including comparing our performance to other companies. However, EBITDA as presented may not be comparable to amounts calculated by other companies. This information should not be considered as an alternative to net income, income from continuing operations, operating profit, cash flow from operations, or any other operating or liquidity performance measure prescribed by accounting principles generally accepted in the United States of America.

Supplemental Information, page 2 of 6

FIVE STAR QUALITY CARE, INC.

SELECTED BALANCE SHEET DATA

(dollars in thousands)

	At September 30,		At December 31,
	2006		2005
Assets
Current assets:
Cash and cash equivalents	$	23,250	$	16,729
Accounts receivable, net of reserve		50,374		46,124
Prepaid expenses and other current assets		45,496		32,027
Total current assets		119,120		94,880

Property and equipment, net		108,307		96,743
Other long term assets		38,123		37,317
Total assets	$	265,550	$	228,940

Liabilities and Shareholders’ Equity
Current liabilities	$	93,445	$	89,968
Long term liabilities		27,136		25,465
Mortgage notes payable, long term		44,285		44,703
Shareholders’ equity: 31,584,934 and 20,060,934 shares issued and outstanding at September 30, 2006 and December 31, 2005, respectively		100,684		68,804
Total liabilities and shareholders’ equity	$	265,550	$	228,940

Supplemental Information, page 3 of 6

FIVE STAR QUALITY CARE, INC.

COMMUNITY OPERATING DATA ⁽¹⁾

(dollars in thousands, except average daily rate)

	Three months ended September 30,						Nine months ended September 30,
	2006			2005			2006			2005

No. of communities (end of period)		156			151			156			151
No. of living units (end of period)		17,593			16,810			17,593			16,810

Occupancy		91	%		91	%		91	%		90	%
Average daily rate (ADR)	$	127		$	126		$	127		$	126
ADR % growth		1	%		--			1	%		--

Percent breakdown of net revenues from residents:
Medicare		15	%		14	%		16	%		16	%
Medicaid		19	%		19	%		19	%		19	%
Private		66	%		67	%		65	%		65	%
Total		100	%		100	%		100	%		100	%

Net revenues from residents	$	187,575		$	177,342		$	552,973		$	518,138
Net revenues from residents % growth		6	%		--			7	%		--

Community expenses ⁽²⁾	$	142,113		$	137,930		$	423,494		$	397,994
Community expenses ⁽²⁾ as a % of net revenues from residents		76	%		78	%		77	%		77	%
Community expenses ⁽²⁾ % growth		3	%		--			6	%		--

(1)	Excludes data for discontinued operations.

(2)	Community expenses equals wages and benefits and other operating expenses as

shown on our consolidated statement of income.

Supplemental Information, page 4 of 6

FIVE STAR QUALITY CARE, INC.

SAME STORE COMMUNITY OPERATING DATA ⁽¹⁾

(dollars in thousands, except average daily rate)

	Three months ended September 30, ⁽²⁾						Nine months ended September 30, ⁽³⁾
	2006			2005			2006			2005

No. of communities (end of period)		151			151			144			144
No. of living units (end of period)		16,810			16,810			16,128			16,128

Occupancy		91	%		91	%		91	%		91	%
Average daily rate (ADR)	$	132		$	127		$	134		$	128
ADR % growth		4	%		--			5	%		--

Percent breakdown of net revenues from residents:
Medicare		15	%		14	%		16	%		16	%
Medicaid		19	%		19	%		20	%		20	%
Private		66	%		67	%		64	%		64	%
Total		100	%		100	%		100	%		100	%

Net revenues from residents	$	185,953		$	177,342		$	536,927		$	510,922
Net revenues from residents % growth		5	%		--			5	%		--

Community expenses ⁽⁴⁾	$	141,135		$	137,930		$	410,204		$	392,623
Community expenses ⁽⁴⁾ as a % of net revenues from residents		76	%		78	%		76	%		77	%
Community expenses ⁽⁴⁾ % growth		2	%		--			4	%		--

(1)	Excludes data for discontinued operations.

(2)	Communities that we operated continuously since July 1, 2005.

(3)	Communities that we operated continuously since January 1, 2005.

(4)	Community expenses equals wages and benefits and other operating expenses.

Supplemental Information, page 5 of 6

FIVE STAR QUALITY CARE, INC.

OTHER OPERATING DATA ⁽¹⁾

(dollars in thousands)

	Three months ended September 30,				Nine months ended September 30,
	2006		2005		2006		2005
No. of Communities ⁽²⁾ (end of period):
Assisted living & independent living communities		107		102		107		102
Skilled nursing communities		49		49		49		49
Total no. of communities		156		151		156		151

No. of living units (end of period):
Assisted living & independent living units		11,691		10,968		11,691		10,968
Skilled nursing units ⁽³⁾		5,902		5,842		5,902		5,842
Total no. of living units		17,593		16,810		17,593		16,810

Net revenues from residents
Assisted living & independent living communities	$	125,487	$	118,631	$	371,010	$	343,954
Skilled nursing communities		61,281		58,676		180,395		173,585
Other ⁽⁴⁾		807		35		1,568		599
Total net revenues from residents	$	187,575	$	177,342	$	552,973	$	518,138

⁽¹⁾ Excludes data for discontinued operations.

⁽²⁾ Communities are categorized by the type of living units which constitute a majority (or plurality) of the total living units at the community.

⁽³⁾ Includes 1,630 skilled nursing units in communities where assisted living and independent living services are the predominant services provided.

⁽⁴⁾ Other net revenues from residents relates primarily to rehabilitation and other specialty service revenues.

Supplemental Information, page 6 of 6

Reconciliation of Income from Continuing Operations excluding Termination Charges, Asset Impairment and Certain Insurance Charges Related to Prior Periods to Loss from Continuing Operations for the three months ended September 30, 2005 (dollars in thousands, except per share data):

	Three months ended September 30, 2005
	Amount			Per Share
Income from continuing operations excluding termination charges, asset impairment and insurance charges related to prior periods ⁽¹⁾	$	2,545		$	0.17
Termination expense for certain Sunrise management agreements		(81,536	)
Impairment of assets		(2,333	)
Insurance charges related to prior periods		(2,120	)

Loss from continuing operations	$	(83,444	)	$	(5.58	)

(1)

We believe these adjusted amounts are a meaningful disclosure that may help shareholders to understand better our results of operations for the three months ended September 30, 2005. This information should not be considered as an alternative to income (loss) from continuing operations or income (loss) from continuing operations per share or any other operating or performance measure prescribed by accounting principles generally accepted in the United States of America.

_____________________________________________________________________________________________________

Reconciliation of Income from Continuing Operations excluding Termination Charges, Asset Impairment and Certain Insurance Charges Related to Prior Periods to Loss from Continuing Operations for the nine months ended September 30, 2006 and 2005 (dollars in thousands, except per share data):

	For the nine months ended September 30, 2006						For the nine months ended September 30, 2005
	Amount			Per Share ⁽³⁾			Amount			Per Share ⁽³⁾
Income from continuing operations excluding termination charges, asset impairment and insurance charges related to prior periods ⁽²⁾	$	12,382		$	0.45		$	7,031		$	0.53

Termination expense for certain Sunrise management agreements		(89,833	)					(81,536	)

Impairment of assets		-						(2,333	)

Insurance charges related to prior periods		-						(2,120	)

Loss from continuing operations	$	(77,451	)	$	(2.81	)	$	(78,958	)	$	(6.01	)

(2)

We believe these adjusted amounts are a meaningful disclosure that may help shareholders to understand better our results of operations for the nine months ended September 30, 2006 and 2005. This information should not be considered as an alternative to income (loss) from continuing operations or income (loss) from continuing operations per share or any other operating or performance measure prescribed by accounting principles generally accepted in the United States of America.

(3)	In April 2006, we issued 11,500,000 of our common shares in a public offering. The decrease in the per share amount is significantly impacted by the dilution resulting from such issuance.