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| 8-K - 8-K - EMERITUS CORP\WA\ | a8-kearningsrelease2013q3.htm |
NEWS RELEASE | |
For Immediate Release |
EMERITUS ANNOUNCES THIRD QUARTER 2013
OPERATING RESULTS
SEATTLE, WA, November 5, 2013 - Emeritus Corporation (NYSE: ESC), a national provider of senior living services, today announced its third quarter 2013 results.
Operating Summary for Third Quarter 2013 Compared to Third Quarter 2012
• | Community and management fee revenues increased 47.2% to $484.5 million |
• | Adjusted EBITDAR increased $40.2 million, or 43.6% to $132.4 million |
• | Adjusted CFFO per share grew 14.0% to $0.49 |
• | Total Portfolio Same Community (as defined below) average occupancy improved 30 basis points to 87.1% |
• | Total Portfolio Same Community average monthly revenue per occupied unit increased 1.8% to $4,036 |
Granger Cobb, President and Chief Executive Officer, commented, “Occupancy improved sequentially from the second quarter of this year, and our leading indicators are stable and improving. We continue to expect a roughly 20% improvement in cash from facility operations for the full year 2013. During the quarter we welcomed 39 new communities into the Emeritus family; we also continue to generate solid growth in home healthcare services, which we have expanded to now include Arizona and Texas. Our performance is a tribute to our 31,000 extremely dedicated Emeritus employees who remain resolutely focused on providing a fulfilling customer experience for our residents and peace of mind to their families.”
Third Quarter 2013 Consolidated Results
As of September 30, 2013, Emeritus operated 515 senior living communities:
• | 500 communities are in the consolidated portfolio (consisting of owned and leased communities); |
• | 470 communities have been continuously operated (owned, leased, and managed) since January 1, 2012 (“Total Portfolio Same Community”) (information for this portfolio is included for certain comparative purposes but is not a subset of the Company’s historical consolidated results); |
• | 320 consolidated communities have been continuously operated in our consolidated portfolio since January 1, 2012 (“Consolidated Same Community”); and |
• | 15 communities are managed. |
Community and management fee revenues increased $155.3 million, or 47.2% to $484.5 million in the third quarter of 2013, compared to $329.2 million in the third quarter of 2012. The increase in revenues resulted primarily from the Company’s lease and ownership acquisition of 142 communities in the fourth quarter of 2012 and first quarter of 2013 that the Company previously managed for a joint venture (the “Blackstone JV Transaction”). The increase in revenues was also attributable to the Company’s fourth quarter 2012 acquisition of Nurse on Call, Inc., the largest Medicare-licensed provider of home healthcare services in Florida. Total average monthly revenue per occupied unit for the consolidated portfolio was $4,008 in the third quarter of 2013 compared to $4,189 in the third quarter of 2012. The rate decrease was attributable to the acquisition of the Blackstone JV communities, which have lower average rates than the legacy Emeritus communities. In the third quarter of 2013, total average occupancy for the consolidated portfolio grew to 87.3%, compared to 87.1% in the third quarter of 2012.
Total Portfolio Same Community average monthly revenue per occupied unit increased 1.8% in the third quarter of 2013 compared to the third quarter of 2012, and average occupancy improved by 30 basis points when comparing the same periods.
Consolidated Same Community revenues increased $3.1 million in the third quarter of 2013, primarily as a result of improved rate per unit. Average monthly revenue for this portfolio increased 1.2% to $4,247 in the third quarter of 2013 compared to the third quarter of 2012, and occupancy decreased to 87.1% compared to 87.4% over the same period.
Community and ancillary services operating expenses were $329.6 million in the third quarter of 2013 compared to $216.9 million in the third quarter of 2012. The increase was due primarily to the acquisition of the Blackstone JV communities and Nurse on Call. Community operating expenses in the Consolidated Same Community portfolio increased $5.0 million, or 2.3%, due primarily
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to increases in salaries and benefits, professional liability insurance, marketing, and supplies, offset somewhat by lower health insurance expense, as well as lower bad debt expense.
Community and ancillary operating income grew $47.3 million, or 44.2%, to $154.2 million in the third quarter of 2013, compared to the third quarter of 2012, primarily as the result of acquisition-related activities. Community and ancillary operating income margin was 31.9% in the third quarter of 2013 compared to 33.0% in the 2012 period, and was likewise impacted by acquisition-related activities between the periods, in particular the acquisition of Nurse on Call (which operates at a lower margin percentage than the Company’s historical business). Consolidated Same Community operating income margin was 32.3% in the third quarter of 2013 compared to 33.2% in the 2012 period, and Total Portfolio Same Community operating margin was 32.6% in the third quarter of 2013 as compared to 32.8% in the prior-year quarter.
The consolidated increase in general and administrative expenses in the periods includes the effects of the Company’s acquisition of Nurse on Call, which operates at a higher level of such expenditures in relation to the corresponding revenues. Excluding Nurse on Call as well as consolidated non-cash stock-based compensation expenses, senior living general and administrative expenses as a percent of total operated senior living community revenue were 4.5% in the third quarter of 2013, compared to 4.7% in the third quarter of 2012.
For the third quarter of 2013, Adjusted EBITDAR increased $40.2 million, or 43.6%, to $132.4 million, with the increase primarily driven by the increase in community operating income. Adjusted CFFO per share increased 14.0% to $0.49 per share, compared to $0.43 per share in the third quarter of 2012.
Financing and Other Activities
In July 2013, the Company repaid a $15.2 million note payable bearing interest at 8.77%. Year-to-date through October 2013, the Company has repaid a total of $88.1 million of higher-rate notes payable.
In September 2013, the Company commenced the lease of 38 communities representing approximately 4,400 units that were formerly owned by a joint venture comprised of Health Care REIT, Inc. and Merrill Gardens. The communities are located in eight states, concentrated primarily in Washington and California, and offer independent living, assisted living and memory care services.
2013 Guidance Update
The Company provides guidance for the Company’s existing portfolio and excludes the impact from future acquisitions and dispositions. The Company’s guidance for 2013 is as follows:
• | Community, ancillary services and management fee revenue in the range of $1.90 billion to $1.95 billion |
• | Recurring capital expenditures in the range of $28.0 million to $30.0 million |
• | Senior living general and administrative expenses as a percent of total senior living operated revenue of approximately 4.8%, excluding non-cash stock-based compensation expenses |
• | Adjusted CFFO in the range of $1.95 to $2.05 per share |
Webcast and Conference Call
The Company will host a webcast and conference call on Tuesday, November 5, 2013, at 5:00 P.M. Eastern Time to discuss its financial results for the third quarter of 2013.
The conference call will be webcast live over the internet from the Company’s website at www.emeritus.com under the “Investors” section. The conference call can also be accessed by dialing (877) 705-6003 or, for international participants, (201) 493-6725. A replay of the conference call will be available after 8:00 P.M. Eastern Time on Tuesday, November 5, 2013, until midnight Eastern Time on Tuesday, November 12, 2013. The dial-in numbers for the replay are (877) 870-5176, or for international participants (858) 384-5517. To access the telephonic replay, enter the conference ID 10000443.
Non-GAAP Financial Measures
Adjusted EBITDA/EBITDAR and CFFO are financial measures of operating performance that are not calculated in accordance with U.S. generally accepted accounting principles (“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 loss to Adjusted EBITDA/
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EBITDAR and the reconciliation of net cash provided by operating activities to CFFO, provided below, along with the Company’s consolidated balance sheets, statements of operations, and statements of cash flows. The Company defines Adjusted EBITDA/EBITDAR and CFFO and provides other information about these non-GAAP measures in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, to be filed with the Securities and Exchange Commission.
The table below shows the reconciliation of net loss to Adjusted EBITDA/EBITDAR for the three months and nine months ended September 30, 2013 and 2012 (in thousands):
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net loss | $ | (27,913 | ) | $ | (16,402 | ) | $ | (103,911 | ) | $ | (57,550 | ) | ||||
Depreciation and amortization | 45,202 | 32,461 | 135,614 | 98,024 | ||||||||||||
Interest income | (118 | ) | (101 | ) | (346 | ) | (303 | ) | ||||||||
Interest expense | 71,441 | 38,451 | 215,730 | 116,083 | ||||||||||||
Net equity losses for unconsolidated joint ventures | 86 | 28 | 93 | 500 | ||||||||||||
Income tax (benefit) provision | (177 | ) | 324 | 2,119 | 920 | |||||||||||
(Income) loss from discontinued operations | (146 | ) | 2,698 | 5,222 | 7,705 | |||||||||||
Amortization of above/below market rents | 1,229 | 1,612 | 3,700 | 4,990 | ||||||||||||
Amortization of deferred gains | (237 | ) | (249 | ) | (727 | ) | (782 | ) | ||||||||
Loss (gain) on early extinguishment of debt | 476 | 188 | (3 | ) | 133 | |||||||||||
Stock-based compensation | 3,542 | 2,640 | 10,351 | 8,319 | ||||||||||||
Change in fair value of derivative financial | ||||||||||||||||
instruments | 100 | 174 | (77 | ) | 919 | |||||||||||
Deferred revenue | 299 | (305 | ) | 2,635 | (755 | ) | ||||||||||
Deferred straight-line rent | 1,075 | 923 | 1,369 | 3,221 | ||||||||||||
Impairment of long-lived assets | — | — | — | 2,135 | ||||||||||||
Loss on lease termination | — | — | 486 | — | ||||||||||||
Transaction and financing costs | 291 | 1,151 | 1,833 | 2,639 | ||||||||||||
Transition costs | 1,047 | — | 1,047 | — | ||||||||||||
Self-insurance reserve adjustments | 288 | 190 | 13,424 | 2,436 | ||||||||||||
Adjusted EBITDA | 96,485 | 63,783 | 288,559 | 188,634 | ||||||||||||
Lease expense | 35,903 | 28,425 | 97,341 | 84,936 | ||||||||||||
Adjusted EBITDAR | $ | 132,388 | $ | 92,208 | $ | 385,900 | $ | 273,570 | ||||||||
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The following table shows the reconciliation of net cash provided by operating activities to CFFO and Adjusted CFFO (in thousands):
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net cash provided by operating activities | $ | 37,752 | $ | 42,105 | $ | 93,841 | $ | 110,621 | ||||||||
Changes in operating assets and liabilities, net | (2,702 | ) | (14,467 | ) | (4,910 | ) | (31,740 | ) | ||||||||
Repayment of capital lease and financing obligations | (6,672 | ) | (4,373 | ) | (19,482 | ) | (12,450 | ) | ||||||||
Recurring capital expenditures | (7,262 | ) | (6,471 | ) | (18,693 | ) | (14,644 | ) | ||||||||
Distributions from unconsolidated joint ventures (a) | 43 | 929 | 471 | 1,016 | ||||||||||||
Cash From Facility Operations | 21,159 | 17,723 | 51,227 | 52,803 | ||||||||||||
Transaction costs | 291 | 1,292 | 1,833 | 2,480 | ||||||||||||
Transition costs | 1,047 | — | 1,047 | — | ||||||||||||
Self-insurance reserve adjustments, prior years | 288 | 190 | 13,424 | 2,436 | ||||||||||||
Adjusted Cash From Facility Operations | $ | 22,785 | $ | 19,205 | $ | 67,531 | $ | 57,719 | ||||||||
CFFO per share | $ | 0.45 | $ | 0.40 | $ | 1.10 | $ | 1.18 | ||||||||
Adjusted CFFO per share | $ | 0.49 | $ | 0.43 | $ | 1.46 | $ | 1.29 | ||||||||
(a) Excludes distributions resulting from the Blackstone JV Transaction, the sale of communities and refinancing of debt. | ||||||||||||||||
Recurring capital expenditures are actual costs incurred to maintain the Company’s communities for their intended business purpose and exclude expenditures for community acquisitions, expenditures incurred in the months immediately following acquisition (and specifically excludes the $30.0 million capital commitment under the lease for the former Blackstone JV communities), new construction and expansions, ROI-designated projects, computer hardware and software, and vehicles.
For a more detailed understanding of Emeritus, please refer to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, to be filed with the SEC, or visit the Company’s web site at www.emeritus.com to obtain copies.
About Emeritus
Emeritus Senior Living is the nation’s largest assisted living and memory care provider, with the ability to serve nearly 54,000 residents. Over 31,000 employees support more than 500 communities throughout 45 states coast to coast. Emeritus offers the spectrum of senior residential choices, care options and life enrichment programs that fulfill individual needs and promote purposeful living throughout the aging process. Its experts provide insights on senior living, care, wellness, brain health, caregiving and family topics at www.Emeritus.com, which also offers details on the organization’s services. Emeritus’ common stock is traded on the New York Stock Exchange under the symbol ESC.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: A number of the matters and subject areas discussed in this report that are not historical or current facts deal with potential future circumstances, operations, and prospects. The discussion of such matters and subject areas is qualified by the inherent risks and uncertainties surrounding future expectations generally, and also may materially differ from our actual future experience as a result of such factors as: the effects of competition and economic conditions on the occupancy levels in our communities; our ability under current market conditions to maintain and increase our resident charges without adversely affecting occupancy levels; successfully integrating home health agency services into our senior living communities; uncertainties regarding government-reimbursement programs for our services; increases in interest costs as a result of refinancings; our ability to control community operation expenses without adversely affecting the level of occupancy and the level of resident charges; our ability to generate cash flow sufficient to service our debt and other fixed payment requirements; our ability to find sources of financing and capital on satisfactory terms to meet our cash requirements to the extent that they are not met by operations, and uncertainties related to professional liability and workers’ compensation claims. We have attempted to identify, in context, certain of the factors that we currently believe may cause actual future experience and results to differ from our current expectations regarding the relevant matter or subject area. These and other risks and uncertainties are detailed in our reports filed with the Securities and Exchange Commission, including “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC. The Company undertakes no obligation to update the information provided herein.
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Contact:
Investor Relations
(206) 298-2909
Media Contacts:
Liz Brady
Liz.brady@icrinc.com
646-277-1226
Sari Martin
Sari.martin@icrinc.com
203-682-8345
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EMERITUS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except share data)
ASSETS | |||||||
September 30, | December 31, | ||||||
2013 | 2012 | ||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 109,630 | $ | 59,795 | |||
Short-term investments | 6,787 | 4,910 | |||||
Trade accounts receivable, net of allowance of $9,402 and $7,179 | 53,851 | 53,138 | |||||
Other receivables | 12,673 | 28,533 | |||||
Tax, insurance, and maintenance escrows | 30,142 | 23,813 | |||||
Prepaid insurance expense | 17,733 | 24,297 | |||||
Deferred tax asset | 32,657 | 33,781 | |||||
Other prepaid expenses and current assets | 11,656 | 12,185 | |||||
Property held for sale | 7,400 | — | |||||
Total current assets | 282,529 | 240,452 | |||||
Investments in unconsolidated joint ventures | 1,681 | 2,513 | |||||
Property and equipment, net of accumulated depreciation of $661,521 and $533,710 | 3,934,576 | 4,011,884 | |||||
Restricted deposits and escrows | 72,984 | 50,671 | |||||
Goodwill | 188,055 | 186,756 | |||||
Other intangible assets, net of accumulated amortization of $38,850 and $47,547 | 125,372 | 131,971 | |||||
Other assets, net | 38,397 | 36,503 | |||||
Total assets | $ | 4,643,594 | $ | 4,660,750 | |||
LIABILITIES, SHAREHOLDERS' EQUITY AND NONCONTROLLING INTEREST | |||||||
Current Liabilities: | |||||||
Current portion of long-term debt | $ | 122,894 | $ | 49,381 | |||
Current portion of capital lease and financing obligations | 31,577 | 25,736 | |||||
Trade accounts payable | 29,860 | 14,244 | |||||
Accrued employee compensation and benefits | 51,457 | 53,606 | |||||
Accrued interest | 7,451 | 8,467 | |||||
Accrued real estate taxes | 23,344 | 16,432 | |||||
Accrued insurance liabilities | 39,686 | 44,867 | |||||
Other accrued expenses | 36,958 | 30,291 | |||||
Deferred revenue | 25,375 | 22,417 | |||||
Unearned rental income | 29,429 | 30,552 | |||||
Total current liabilities | 398,031 | 295,993 | |||||
Long-term debt obligations, less current portion | 1,389,715 | 1,558,936 | |||||
Capital lease and financing obligations, less current portion | 2,482,061 | 2,384,857 | |||||
Deferred gain on sale of communities | 3,016 | 3,743 | |||||
Deferred straight-line rent | 70,901 | 63,920 | |||||
Other long-term liabilities | 130,640 | 128,472 | |||||
Total liabilities | 4,474,364 | 4,435,921 | |||||
Redeemable noncontrolling interest | 10,612 | 10,105 | |||||
Commitments and contingencies | |||||||
Shareholders' Equity and Noncontrolling Interest: | |||||||
Preferred stock, $0.0001 par value. Authorized 20,000,000 shares, none issued | — | — | |||||
Common stock, $0.0001 par value. Authorized 100,000,000 shares, issued and | |||||||
outstanding 47,735,709 and 45,814,988 shares | 5 | 5 | |||||
Additional paid-in capital | 887,644 | 839,511 | |||||
Accumulated deficit | (731,629 | ) | (628,093 | ) | |||
Total Emeritus Corporation shareholders' equity | 156,020 | 211,423 | |||||
Noncontrolling interest | 2,598 | 3,301 | |||||
Total shareholders' equity | 158,618 | 214,724 | |||||
Total liabilities, shareholders' equity, and noncontrolling interest | $ | 4,643,594 | $ | 4,660,750 | |||
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EMERITUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues: | |||||||||||||||
Community and ancillary services revenue | $ | 483,858 | $ | 323,874 | $ | 1,414,387 | $ | 960,425 | |||||||
Management fees | 630 | 5,293 | 2,010 | 15,490 | |||||||||||
Community, ancillary services and management fee revenue | 484,488 | 329,167 | 1,416,397 | 975,915 | |||||||||||
Reimbursed costs incurred on behalf of managed communities | 7,245 | 51,953 | 23,630 | 154,598 | |||||||||||
Total operating revenues | 491,733 | 381,120 | 1,440,027 | 1,130,513 | |||||||||||
Expenses: | |||||||||||||||
Community and ancillary services operations | 329,627 | 216,943 | 973,216 | 643,987 | |||||||||||
General and administrative | 28,130 | 23,082 | 86,461 | 69,492 | |||||||||||
Transaction costs | 291 | 1,292 | 1,833 | 2,480 | |||||||||||
Impairments of long-lived assets | — | — | — | 2,135 | |||||||||||
Depreciation and amortization | 45,202 | 32,461 | 135,614 | 98,024 | |||||||||||
Lease expense | 38,207 | 30,960 | 102,410 | 93,147 | |||||||||||
Costs incurred on behalf of managed communities | 7,245 | 51,953 | 23,630 | 154,598 | |||||||||||
Total operating expenses | 448,702 | 356,691 | 1,323,164 | 1,063,863 | |||||||||||
Operating income from continuing operations | 43,031 | 24,429 | 116,863 | 66,650 | |||||||||||
Other income (expense): | |||||||||||||||
Interest income | 118 | 101 | 346 | 303 | |||||||||||
Interest expense | (71,441 | ) | (38,451 | ) | (215,730 | ) | (116,083 | ) | |||||||
Change in fair value of derivative financial instruments | (100 | ) | (174 | ) | 77 | (919 | ) | ||||||||
Net equity losses for unconsolidated joint ventures | (86 | ) | (28 | ) | (93 | ) | (500 | ) | |||||||
Other, net | 242 | 743 | 1,967 | 1,624 | |||||||||||
Net other expense | (71,267 | ) | (37,809 | ) | (213,433 | ) | (115,575 | ) | |||||||
Loss from continuing operations before income taxes | (28,236 | ) | (13,380 | ) | (96,570 | ) | (48,925 | ) | |||||||
Benefit of (provision for) income taxes | 177 | (324 | ) | (2,119 | ) | (920 | ) | ||||||||
Loss from continuing operations | (28,059 | ) | (13,704 | ) | (98,689 | ) | (49,845 | ) | |||||||
Income (loss) from discontinued operations | 146 | (2,698 | ) | (5,222 | ) | (7,705 | ) | ||||||||
Net loss | (27,913 | ) | (16,402 | ) | (103,911 | ) | (57,550 | ) | |||||||
Net loss attributable to the noncontrolling interests | 90 | 150 | 375 | 198 | |||||||||||
Net loss attributable to Emeritus Corporation | |||||||||||||||
common shareholders | $ | (27,823 | ) | $ | (16,252 | ) | $ | (103,536 | ) | $ | (57,352 | ) | |||
Basic and diluted loss per common share attributable to | |||||||||||||||
Emeritus Corporation common shareholders: | |||||||||||||||
Continuing operations | $ | (0.59 | ) | $ | (0.30 | ) | $ | (2.12 | ) | $ | (1.12 | ) | |||
Discontinued operations | — | (0.06 | ) | (0.11 | ) | (0.17 | ) | ||||||||
$ | (0.59 | ) | $ | (0.36 | ) | $ | (2.23 | ) | $ | (1.29 | ) | ||||
Weighted average common shares outstanding: basic and diluted | 46,962 | 44,642 | 46,401 | 44,612 | |||||||||||
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EMERITUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
Nine Months Ended September 30, | |||||||
2013 | 2012 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (103,911 | ) | $ | (57,550 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 135,614 | 98,024 | |||||
Amortization of above/below market rents | 3,700 | 4,990 | |||||
Amortization of deferred gains | (727 | ) | (782 | ) | |||
Loss on lease termination | 505 | — | |||||
(Gain) loss on early extinguishment of debt | (3 | ) | 813 | ||||
Impairments of long-lived assets | 5,206 | 8,430 | |||||
Amortization of loan fees | 2,307 | 2,465 | |||||
Allowance for doubtful receivables | 6,620 | 7,883 | |||||
Net equity losses for unconsolidated joint ventures | 93 | 500 | |||||
Loss on sale of assets | 50 | 527 | |||||
Stock-based compensation | 10,351 | 8,319 | |||||
Change in fair value of derivative financial instruments | (77 | ) | 919 | ||||
Deferred straight-line rent | 1,369 | 3,221 | |||||
Deferred revenue | 2,635 | (755 | ) | ||||
Non-cash interest expense | 24,738 | 1,985 | |||||
Other | 461 | (108 | ) | ||||
Change in other operating assets and liabilities | 4,910 | 31,740 | |||||
Net cash provided by operating activities | 93,841 | 110,621 | |||||
Cash flows from investing activities: | |||||||
Purchase of property and equipment | (50,421 | ) | (21,621 | ) | |||
Acquisitions | (6,347 | ) | — | ||||
Proceeds from sale of assets | 34,275 | 15,565 | |||||
Advances from affiliates and other managed communities, net | 12,944 | 814 | |||||
Distributions from unconsolidated joint ventures, net | 49,921 | 173 | |||||
Other assets | (11,639 | ) | (376 | ) | |||
Net cash provided by (used in) investing activities | 28,733 | (5,445 | ) | ||||
Cash flows from financing activities: | |||||||
Sale of stock, net | 42,404 | 1,693 | |||||
Proceeds from lease extensions | 6,055 | — | |||||
Distributions to noncontrolling interests, net | (3,726 | ) | — | ||||
Increase in restricted deposits | (785 | ) | (2,066 | ) | |||
Debt issuance and other financing activities | (1,492 | ) | (1,252 | ) | |||
Proceeds from long-term borrowings and financings | 68,102 | 17,703 | |||||
Repayment of long-term borrowings and financings | (163,815 | ) | (55,121 | ) | |||
Repayment of capital lease and financing obligations | (19,482 | ) | (12,450 | ) | |||
Net cash used in financing activities | (72,739 | ) | (51,493 | ) | |||
Net increase in cash and cash equivalents | 49,835 | 53,683 | |||||
Cash and cash equivalents at the beginning of the period | 59,795 | 43,670 | |||||
Cash and cash equivalents at the end of the period | $ | 109,630 | $ | 97,353 | |||
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Emeritus Corporation | ||||||||||||
Cash Lease and Interest Expense | ||||||||||||
Three Months Ended September 30, 2013 | ||||||||||||
(In thousands) | ||||||||||||
Projected | ||||||||||||
Actual | Range | |||||||||||
Q3-13 | Q4-2013 | |||||||||||
Facility lease expense - GAAP | $ | 38,207 | $ | 49,000 | — | $ | 50,000 | |||||
Less: | ||||||||||||
Straight-line rents | (1,075 | ) | (3,600 | ) | — | (3,900 | ) | |||||
Above/below market rents | (1,229 | ) | (1,200 | ) | — | (1,300 | ) | |||||
Plus: | ||||||||||||
Capital lease interest | 47,652 | 47,000 | — | 48,000 | ||||||||
Capital lease interest - noncash | (8,459 | ) | (8,000 | ) | — | (9,000 | ) | |||||
Capital lease principal | 6,672 | 6,000 | — | 7,000 | ||||||||
Facility lease expense - CASH | $ | 81,768 | $ | 89,200 | — | $ | 90,800 | |||||
Interest expense - GAAP | $ | 71,441 | $ | 72,000 | — | $ | 74,000 | |||||
Less: | ||||||||||||
Capital lease interest | (47,652 | ) | (47,000 | ) | — | (48,000 | ) | |||||
Loan fee amortization and other | (789 | ) | (600 | ) | — | (700 | ) | |||||
Interest expense - CASH | $ | 23,000 | $ | 24,400 | — | $ | 25,300 | |||||
Depreciation - owned assets | $ | 20,513 | $ | 20,000 | — | $ | 21,000 | |||||
Depreciation - capital leases | 24,210 | 26,000 | — | 27,000 | ||||||||
Amortization - intangible assets | 479 | 1,400 | — | 2,000 | ||||||||
Total depreciation and amortization | $ | 45,202 | $ | 47,400 | — | $ | 50,000 | |||||
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EMERITUS CORPORATION | |||||||||||||||
Consolidated Supplemental Financial Information | |||||||||||||||
For the Quarters Ended | |||||||||||||||
(unaudited) | |||||||||||||||
(Dollars in thousands, except non-financial and per-unit data) | |||||||||||||||
Non-Financial Data: | Q3 2012 | Q4 2012 | Q1 2013 | Q2 2013 | Q3 2013 | ||||||||||
Average consolidated communities | 325 | 414 | 463 | 465 | 476 | ||||||||||
Average available units | 29,513 | 36,672 | 40,524 | 40,757 | 42,109 | ||||||||||
Average occupied units | 25,719 | 31,842 | 35,007 | 35,333 | 36,765 | ||||||||||
Average occupancy | 87.1 | % | 86.8 | % | 86.4 | % | 86.7 | % | 87.3 | % | |||||
Average monthly revenue per occupied unit | $ | 4,189 | $ | 4,077 | $ | 4,012 | $ | 4,014 | $ | 4,008 | |||||
Calendar days | 92 | 92 | 90 | 91 | 92 | ||||||||||
Community and Ancillary Services Revenues: | |||||||||||||||
Community revenues | $ | 318,915 | $ | 385,888 | $ | 417,581 | $ | 422,288 | $ | 438,732 | |||||
Move-in fees | 5,753 | 5,503 | 5,503 | 5,430 | 5,538 | ||||||||||
Move-in incentives | (1,434 | ) | (1,953 | ) | (1,722 | ) | (2,282 | ) | (2,186 | ) | |||||
Total community revenues | 323,234 | 389,438 | 421,362 | 425,436 | 442,084 | ||||||||||
Ancillary services revenues | 640 | 20,156 | 41,357 | 42,374 | 41,774 | ||||||||||
Total community and ancillary services revenues | 323,874 | 409,594 | 462,719 | 467,810 | 483,858 | ||||||||||
Community and Ancillary Services Operating Expenses: | |||||||||||||||
Salaries and wages - regular and overtime | 99,334 | 119,305 | 127,713 | 129,904 | 135,849 | ||||||||||
Average daily salary and wages | 1,080 | 1,297 | 1,419 | 1,428 | 1,477 | ||||||||||
Average daily wages per occupied unit | 42 | 41 | 41 | 40 | 40 | ||||||||||
Payroll taxes and employee benefits | 32,132 | 36,854 | 45,523 | 40,981 | 41,706 | ||||||||||
Percent of salaries and wages | 32.3 | % | 30.9 | % | 35.6 | % | 31.5 | % | 30.7 | % | |||||
Prior year self-insurance reserve adjustments | 190 | 3,560 | 7,482 | 5,654 | 288 | ||||||||||
Utilities | 14,805 | 15,328 | 18,595 | 16,963 | 21,090 | ||||||||||
Average monthly cost per occupied unit | 192 | 160 | 177 | 160 | 191 | ||||||||||
Facility maintenance and repairs | 8,643 | 9,787 | 11,830 | 11,674 | 12,783 | ||||||||||
Average monthly cost per occupied unit | 112 | 102 | 113 | 110 | 116 | ||||||||||
All other community operating expenses | 61,277 | 75,365 | 81,140 | 81,970 | 84,945 | ||||||||||
Average monthly cost per occupied unit | 794 | 789 | 773 | 773 | 770 | ||||||||||
Community operating expenses | 216,381 | 260,199 | 292,283 | 287,146 | 296,661 | ||||||||||
Ancillary services operating expenses | 562 | 15,449 | 31,458 | 32,702 | 32,966 | ||||||||||
Total community and ancillary services operating expenses | 216,943 | 275,648 | 323,741 | 319,848 | 329,627 | ||||||||||
Community operating income | $ | 106,853 | $ | 129,239 | $ | 129,079 | $ | 138,290 | $ | 145,423 | |||||
Consolidated operating income | $ | 106,931 | $ | 133,946 | $ | 138,978 | $ | 147,962 | $ | 154,231 | |||||
Operating income margin - Communities | 33.1 | % | 33.2 | % | 30.6 | % | 32.5 | % | 32.9 | % | |||||
Operating income margin - Consolidated | 33.0 | % | 32.7 | % | 30.0 | % | 31.6 | % | 31.9 | % | |||||
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EMERITUS CORPORATION | |||||||||||||||
Selected Consolidated and Same Community Information | |||||||||||||||
For the Quarters Ended | |||||||||||||||
(unaudited) | |||||||||||||||
(Community and ancillary revenue and operating expense in thousands) | |||||||||||||||
Q3 2012 | Q4 2012 | Q1 2013 | Q2 2013 | Q3 2013 | |||||||||||
Consolidated: | |||||||||||||||
Average consolidated communities | 325 | 414 | 463 | 465 | 476 | ||||||||||
Community and ancillary revenue | $ | 323,874 | $ | 409,594 | $ | 462,719 | $ | 467,810 | $ | 483,858 | |||||
Community and ancillary operating expense | 216,943 | 275,648 | 323,741 | 319,848 | 329,627 | ||||||||||
Average occupancy | 87.1 | % | 86.8 | % | 86.4 | % | 86.7 | % | 87.3 | % | |||||
Average monthly revenue per unit | $ | 4,189 | $ | 4,077 | $ | 4,012 | $ | 4,014 | $ | 4,008 | |||||
Operating income margin | 33.0 | % | 32.7 | % | 30.0 | % | 31.6 | % | 31.9 | % | |||||
Consolidated Same Community: | |||||||||||||||
Average consolidated communities | 320 | 320 | 320 | 320 | 320 | ||||||||||
Community revenue | $ | 319,896 | $ | 321,637 | $ | 320,996 | $ | 321,214 | $ | 323,015 | |||||
Community operating expense | 213,631 | 210,529 | 217,175 | 212,504 | 218,633 | ||||||||||
Average occupancy | 87.4 | % | 87.2 | % | 86.7 | % | 86.8 | % | 87.1 | % | |||||
Average monthly revenue per unit | $ | 4,196 | $ | 4,226 | $ | 4,244 | $ | 4,241 | $ | 4,247 | |||||
Operating income margin | 33.2 | % | 34.5 | % | 32.3 | % | 33.8 | % | 32.3 | % | |||||
Total Portfolio Same Community: | |||||||||||||||
Average consolidated communities | 470 | 470 | 470 | 470 | 470 | ||||||||||
Community revenue | $ | 426,315 | $ | 429,470 | $ | 430,114 | $ | 432,150 | $ | 435,336 | |||||
Community operating expense | 286,519 | 282,206 | 289,964 | 285,592 | 293,378 | ||||||||||
Management fees | 5,190 | 2,382 | 673 | 526 | 561 | ||||||||||
Average occupancy | 86.8 | % | 86.8 | % | 86.5 | % | 86.7 | % | 87.1 | % | |||||
Average monthly revenue per unit | $ | 3,964 | $ | 3,995 | $ | 4,015 | $ | 4,022 | $ | 4,036 | |||||
Operating income margin | 32.8 | % | 34.3 | % | 32.6 | % | 33.9 | % | 32.6 | % | |||||
11