EX-99.2 3 a4905889ex992.txt EXHIBIT 99.2 - SUPPLEMENTAL INFORMATION Exhibit 99.2 AMERICAN RETIREMENT CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RETIREMENT CENTER COMMUNITIES - FIRST QUARTER 2005 ($'s in thousands) RETIREMENT CENTER COMMUNITIES: TOTAL ------------------------------------- Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 -------- -------- -------- -------- -------- Resident and healthcare revenue $85,288 $85,578 $86,526 $89,787 $91,482 Community operating expense 56,791 56,546 58,168 59,085 60,890 ------- ------- ------- ------- ------- Community operating contribution 28,497 29,032 28,358 30,702 30,592 Community operating margin 33.4% 33.9% 32.8% 34.2% 33.4% Community operating contribution excluding Amortization of Deferred Entrance Fee Revenue 25,832 26,592 26,249 27,553 28,357 Ending Occupancy 8,374 8,424 8,436 8,482 8,585 Ending Occupancy % 94.4% 95.0% 95.1% 95.7% 94.6% Average Monthly Occupancy 8,376 8,382 8,408 8,438 8,532 Monthly Revenue per unit $ 3,394 $ 3,403 $ 3,430 $ 3,547 $ 3,574 Year to Year % Change 8.0% 6.3% 5.0% 9.8% 5.3% Monthly Operating Contribution per unit 1,134 1,155 1,124 1,213 1,195 Year to Year % Change 13.0% 12.4% 14.2% 16.2% 5.4% RETIREMENT CENTER COMMUNITIES: RENTAL COMMUNITIES -------------------------------------------------- Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 -------- -------- -------- -------- -------- Resident and healthcare revenue $55,007 $55,249 $56,306 $57,387 $58,493 Community operating expense 34,326 33,983 35,422 35,932 36,739 ------- ------- ------- ------- ------- Community operating contribution 20,681 21,266 20,884 21,455 21,754 Community operating margin 37.6% 38.5% 37.1% 37.4% 37.2% Ending Occupancy 5,576 5,595 5,581 5,623 5,586 Ending Occupancy % 95.2% 95.5% 95.2% 96.0% 95.4% Average Monthly Occupancy 5,582 5,576 5,580 5,594 5,602 Monthly Revenue per unit $ 3,285 $ 3,303 $ 3,364 $ 3,420 $ 3,480 Year to Year % Change 7.5% 6.5% 4.5% 9.0% 5.9% Monthly Operating Contribution per unit 1,235 1,271 1,248 1,278 1,294 Year to Year % Change 11.2% 11.8% 10.3% 7.4% 4.8% RETIREMENT CENTER COMMUNITIES: ENTRANCE FEE CCRCs -------------------------------------------------- Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 -------- -------- -------- -------- -------- Resident and healthcare revenue $30,281 $30,329 $30,220 $32,400 $32,989 Community operating expense 22,465 22,563 22,746 23,153 24,151 ------- ------- ------- ------- ------- Community operating contribution 7,816 7,766 7,474 9,247 8,838 Community operating margin 25.8% 25.6% 24.7% 28.5% 26.8% Ending Occupancy 2,798 2,829 2,855 2,859 2,999 Ending Occupancy % 93.0% 94.0% 94.8% 95.0% 93.3% Average Monthly Occupancy 2,795 2,806 2,828 2,844 2,930 Monthly Revenue per unit $ 3,612 $ 3,603 $ 3,562 $ 3,797 $ 3,753 Year to Year % Change 9.2% 6.1% 5.9% 11.0% 3.9% Monthly Operating Contribution per unit 932 923 881 1,084 1,005 Year to Year % Change 17.3% 13.0% 25.4% 45.0% 7.9% Net Cash Flow per unit (includes Net Resale Cash Flow) 1,326 1,503 1,442 1,323 1,399 Entrance Fee Sales: Total Entrance Fee (Independent Living) Units 2,066 2,066 2,066 2,064 2,217 Ending Occupancy % 95.4% 96.3% 97.1% 97.2% 95.8% Entrance Fee Sales (in units) 69 84 79 68 70 Entrance Fee Sales $10,257 $11,976 $11,931 $ 9,224 $11,589 Refunds paid on Entrance Fee Terminations 2,433 2,868 3,181 3,192 4,137 Net Resale Cash Flow 7,824 9,108 8,750 6,032 7,452 NOTE: Galleria Woods, a 207 unit Entrance Fee CCRC community, was acquired in February 2005. The sales proceeds at entrance fee CCRCs provide a source of financing to the community, thereby reducing the financing costs (interest or lease expense) that it would otherwise incur. As a result of the residents paying an up-front entrance fee, they pay a lower monthly service fee than they would pay at a similar rental community without entrance fees. As a result, entrance fee communities have lower operating margins (but lower non-operating financing costs) than similar rental communities. AMERICAN RETIREMENT CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION FREE-STANDING ASSISTED LIVING COMMUNITIES - FIRST QUARTER 2005 ($'s in thousands) FREE-STANDING ASSISTED LIVING COMMUNITIES ----------------------------------------- Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 -------- -------- -------- -------- -------- Resident and healthcare revenue $22,663 $23,532 $24,563 $25,506 $26,207 Community operating expense 17,061 17,519 17,657 17,970 18,447 ------- ------- ------- ------- ------- Community operating contribution 5,602 6,013 6,906 7,536 7,760 Community operating margin 24.7% 25.6% 28.1% 29.5% 29.6% Ending Occupancy 2,394 2,456 2,504 2,533 2,562 Ending Occupancy % 84.3% 86.5% 88.3% 89.3% 90.1% Average Monthly Occupancy 2,384 2,430 2,478 2,521 2,537 Monthly Revenue per unit $ 3,169 $ 3,228 $ 3,304 $ 3,372 $ 3,443 Year to Year % Change 8.7% 7.5% 8.2% 9.9% 8.7% Monthly Operating Contribution per unit 783 825 929 996 1,020 Year to Year % Change 78.5% 46.3% 39.2% 37.3% 30.2% NOTE: Excludes two non-consolidated joint ventures. AMERICAN RETIREMENT CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION FREE CASH FLOW ($'s in thousands) Three months ended March 31, 2005 -------------- Net income (loss) $ 2,625 Adjustments to reconcile net income to cash and cash equivalents provided by operating activities: Depreciation and amortization 10,066 Amortization of deferred entrance fee revenue (4,064) Proceeds from entrance fee sales - deferred income 7,805 Deferred income tax benefit (765) Amortization of deferred gain on sale-leaseback transactions (2,956) Amortization of deferred compensation 218 Minority interest in earnings of consolidated subsidiaries 71 Tax benefit from exercise of stock options 395 (Gains) losses from unconsolidated joint ventures (66) Loss (gain) on sale of assets 12 -------------- Net cash and cash equivalents provided by operating activities (before changes in assets and liabilities, exclusive of acquisitions and sale leaseback transactions) 13,341 Adjustments for lease escalators and other accruals 1,277 Additions to land, building and equipment (19,629) Plus: Development expenditures (funded separately) 693 Proceeds from entrance fee sales - refundable portion, net of refunds paid (1,521) Distributions to minority interest holders (984) Principal reductions in master trust liability (285) Other adjustments for transactions / refinancings 14,742 -------------- Free cash flow before principal payments 7,634 Principal payments on long-term debt (4,897) -------------- Free cash flow $ 2,737 ============== AMERICAN RETIREMENT CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION SAME COMMUNITY RESULTS - FIRST QUARTER 2005 ($'s in thousands) INCLUDING ENTRANCE FEE COMMUNITIES: ------------------------------------ Three months ended March 31, $ % ------------------- 2005 2004 Change Change -------- -------- ------- ------ Resident & Healthcare revenue $116,903 $107,951 $8,952 8.3% Community operating expense 78,542 73,852 4,690 6.4% -------- -------- ------ ------ Community operating contribution $ 38,361 $ 34,099 4,262 12.5% Community operating margin 32.8% 31.6% # Locations 59 59 Avg. Occupancy 93.9% 91.9% Avg. Occupied Units 10,989 10,761 228 2.1% Avg. Mo. Revenue/unit $ 3,546 $ 3,344 $ 202 6.0% Avg. Mo. Operating Contribution/unit 1,164 1,056 107 10.2% EXCLUDING ENTRANCE FEE COMMUNITIES: ----------------------------------- Three months ended March 31, $ % ------------------- 2005 2004 Change Change -------- -------- ------- ------ Resident & Healthcare revenue $ 84,700 77,670 $7,030 9.1% Community operating expense 55,186 51,387 3,799 7.4% -------- -------- ------ ------ Community operating contribution $ 29,514 $ 26,283 3,231 12.3% Community operating margin 34.8% 33.8% # Locations 53 53 Avg. Occupancy 93.6% 91.6% Avg. Occupied Units 8,139 7,966 173 2.2% Avg. Mo. Revenue/unit $ 3,469 $ 3,250 $ 219 6.7% Avg. Mo. Operating Contribution/unit 1,209 1,100 109 9.9% This table sets forth certain selected financial and operating data on a Same Community basis. "Same Community basis" refers to communities that were owned and/or leased by the company throughout each of the periods being compared. AMERICAN RETIREMENT CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION REVENUE - FIRST QUARTER 2005 ($'s in thousands) Three months Three months ended March 31, ended March 31, --------------------------------- 2005 % 2004 % -------- ------ -------- ------ COMPOSITION ----------- Revenues: Retirement Centers Independent living $ 38,234 32.1% $ 35,682 32.7% Assisted living 15,010 12.6% 14,175 13.0% Skilled Nursing 20,396 17.1% 19,633 18.0% Ancillary services, including Innovative Senior Care (therapy and wellness programs) 15,607 13.1% 13,133 12.0% Amortization of Deferred Entrance Fee Revenue 2,235 1.9% 2,665 2.4% -------- ------ -------- ------ 91,482 76.9% 85,288 78.1% Free-Standing Assisted Living Assisted living 23,169 19.5% 20,392 18.7% Ancillary services, including Innovative Senior Care (therapy and wellness programs) 3,038 2.5% 2,271 2.1% -------- ------ -------- ------ 26,207 22.0% 22,663 20.8% Total Resident and Healthcare Revenue 117,689 98.9% 107,951 98.9% Management and Contract Services 500 0.5% 424 0.4% Reimbursed Expenses 802 0.6% 768 0.7% -------- ------ -------- ------ 1,302 1.1% 1,192 1.1% -------- ------ -------- ------ Total Revenues $118,991 100.0% $109,143 100.0% BY PAYOR -------- Private Pay $ 99,761 83.8% $ 93,181 85.4% Medicare 16,747 14.1% 13,354 12.2% Medicaid 2,483 2.1% 2,608 2.4% -------- ------ -------- ------ Total $118,991 100.0% $109,143 100.0% AMERICAN RETIREMENT CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION OTHER STATISTICS - FIRST QUARTER 2005 UNIT CAPACITY BY COMMUNITY TYPE ------------------------------- At March 31, 2005 ------------------ Locations Capacity --------- -------- Rental Retirement Centers: Owned-100% 2 272 Leased 20 5,584 Managed - other 3 713 --------- -------- 25 6,569 Entrance Fee Retirement Centers: Owned-100% 1 207 Owned- 90% 2 712 Leased 3 1,562 Managed-Freedom Square 1 735 Managed-other 2 474 --------- -------- 9 3,690 Free-Standing AL's: Owned-100% 10 969 Owned-Joint Venture 2 164 Leased 20 1,783 Leased-Joint Venture 1 91 --------- -------- 33 3,007 All Communities: Owned-100% 13 1,448 Owned- 90% 2 712 Owned-Joint Venture 2 164 Leased 43 8,929 Leased-Joint Venture 1 91 Managed-Freedom Square 1 735 Managed-other 5 1,187 --------- -------- 67 13,266 Note: Leased communities include both operating and capital leases. The two Owned-Joint Ventures are managed and are not consolidated. Freedom Square is consolidated due to the variable interest entity rules set forth in FIN 46.