400 Centre Street, Newton, MA 02458-2076 | | tel: (617) 796-8350 fax: (617) 796-8385 |
EXHIBIT 99.1
| FOR IMMEDIATE RELEASE | Contact: Timothy A. Bonang, Director of Investor Relations, or |
| | Katherine L. Johnston, Manager of Investor Relations |
| | (617) 796-8245 |
| | www.fivestarqualitycare.com |
Five Star Quality Care, Inc. Reports Fourth Quarter 2008 Results
____________________________________
Newton, MA (February 25, 2009). Five Star Quality Care, Inc. (NYSE Alternext US: FVE) today announced its financial results for the quarter and year ended December 31, 2008.
Fourth Quarter 2008 Financial Highlights:
| § | Total revenues for the fourth quarter of 2008 increased 16.3% to $292.2 million from $251.2 million for the same period last year. |
| | |
| § | Net loss for the fourth quarter of 2008 was $7.4 million compared to net income of $6.7 million for the same period last year. |
| | |
| § | Net loss per share from continuing operations for the fourth quarter of 2008 was $0.21, basic and diluted, compared to net income per share from continuing operations of $0.22 and $0.20, basic and diluted, respectively, for the same period last year. |
| | |
| § | Net loss from continuing operations for the fourth quarter of 2008 included several items that, in aggregate, resulted in a negative impact of $7.9 million, or $0.25 per basic and diluted share. These items included a $5.9 million unrealized loss on our holdings of auction rate securities; a $5.9 million loss due to impairment of goodwill; a $5.4 million loss due to the impairment of our investments in certain marketable securities held by our captive insurance companies; a $1.8 million loss due to impairment of long lived assets; and an $11.1 million gain resulting from UBS AG’s agreement to repurchase our auction rate securities at par at our election between June 2010 and July 2012. |
Fourth Quarter 2008 Operating Highlights (Senior Living Communities):
| § | Senior living occupancy for the fourth quarter of 2008 was 87.6% compared with 90.3% for the same period last year. |
| | |
| § | Senior living average daily rate for the fourth quarter of 2008 increased by 2.0% to $143.10 from $140.23 in the same period last year. |
| | |
| § | The percentage of senior living revenue derived from residents’ private resources for the fourth quarter of 2008 increased to 69.4% from 65.6% for the same period last year. |
| | |
| § | Wages and benefits as a percentage of senior living revenues were 50.4% and 49.8% for the fourth quarters of 2008 and 2007, respectively. |
| § | For those senior living communities that we have operated continuously since October 1, 2007 (comparable communities), occupancy for the fourth quarter of 2008 was 88.0% compared with 90.3% for the same period last year. |
| | |
| § | The average daily rate at comparable communities for the fourth quarter of 2008 increased by 4.0%, to $145.78, from $140.23 in the same period last year. |
| | |
| § | In the fourth quarter of 2008, we acquired seven senior living communities with 628 units and leased one senior living community with 252 units. Six of these communities provide assisted living, one is an independent living community and one is a continuing care retirement community. |
Financial Highlights for the year ended December 31, 2008:
| § | Total revenues for the year ended December 31, 2008 increased 13.5% to $1.10 billion from $972.9 million for the same period last year. |
| | |
| § | Net loss for the year ended December 31, 2008 was $4.5 million compared to net income of $23.3 million for the same period last year. |
| | |
| § | Net income per share from continuing operations for the year ended December 31, 2008 was $0.01, basic and diluted, compared to $0.82 and $0.75, basic and diluted, respectively, for the same period last year. |
| | |
| § | Net income from continuing operations for the year ended December 31, 2008 included several items that, in aggregate, resulted in a negative impact of $16.3 million, or $0.51 per basic and diluted share. These items included a $12.0 million unrealized loss on our holdings of auction rate securities; an $8.4 million loss due to the impairment of our investments in certain marketable securities held by our captive insurance companies; a $5.9 million loss due to impairment of goodwill; a $1.8 million loss due to impairment of long lived assets; an $11.1 million gain resulting from UBS AG’s agreement to repurchase our auction rate securities at par at our election between June 2010 and July 2012; and a $743,000 gain recognized on the early extinguishment of debt. |
| | |
| § | Net income from continuing operations for the year ended December 31, 2007 included a gain from extinguishment of debt of $4.5 million. |
Recent Transaction – Purchase of Convertible Senior Notes:
| § | In January 2009, we repurchased and retired $46.5 million, or 37%, of our Convertible Senior Notes at an average cost of 43% of par value totaling $20 million, including transaction costs, but excluding accrued interest. We financed this repurchase by drawing on our secured credit facilities. We expect to record a $25.1 million gain, net of unamortized deferred financing costs, on the early extinguishment of this debt in the first quarter of 2009. |
Conference Call:
On February 25, 2009 at 5:00 p.m. Eastern Standard Time, Bruce J. Mackey Jr., President and Chief Executive Officer, and Francis R. Murphy, III, Chief Financial Officer, will host a conference call to discuss the fourth quarter and year end 2008 financial results. Following the company’s remarks, there will be a question and answer period.
The conference call telephone number is (888) 599-4860. Participants calling from outside the United States and Canada should dial (913) 312-6667. 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 8:00 p.m. Eastern Standard Time Wednesday, March 4th. To hear the replay, dial (719) 457-0820. The replay pass code is 6417813.
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 senior living and healthcare services company. Five Star owns or leases and operates 210 senior living communities with 22,264 living units located in 30 states. These communities include independent living, assisted living and skilled nursing communities. Five Star also operates five institutional pharmacies and two rehabilitation hospitals. Five Star is headquartered in Newton, Massachusetts.
Supplemental Information, page 1 of 6
FIVE STAR QUALITY CARE, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
| | | Three months ended December 31, | | | Year ended December 31, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| Revenues: | | | | | | | | | | | | |
| Senior living revenue | | $ | 248,834 | | | $ | 208,615 | | | $ | 935,393 | | | $ | 809,934 | |
| Hospital revenue | | | 25,325 | | | | 25,294 | | | | 98,428 | | | | 102,005 | |
| Pharmacy revenue | | | 18,078 | | | | 17,251 | | | | 70,379 | | | | 60,985 | |
| Total revenues | | | 292,237 | | | | 251,160 | | | | 1,104,200 | | | | 972,924 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Senior living wages and benefits | | | 125,475 | | | | 103,950 | | | | 467,068 | | | | 410,447 | |
| Other senior living operating | | | 62,286 | | | | 52,795 | | | | 235,603 | | | | 202,194 | |
| Hospital expenses | | | 23,646 | | | | 22,864 | | | | 91,185 | | | | 92,449 | |
| Pharmacy expenses | | | 18,617 | | | | 16,171 | | | | 69,535 | | | | 58,012 | |
| Rent expense | | | 43,243 | | | | 32,453 | | | | 159,707 | | | | 129,190 | |
| General and administrative expenses | | | 13,026 | | | | 11,670 | | | | 47,829 | | | | 43,373 | |
| Depreciation and amortization | | | 3,746 | | | | 3,654 | | | | 14,719 | | | | 13,595 | |
| Total operating expenses | | | 290,039 | | | | 243,557 | | | | 1,085,646 | | | | 949,260 | |
| | | | | | | | | | | | | | | | | |
| Operating income | | | 2,198 | | | | 7,603 | | | | 18,554 | | | | 23,664 | |
| | | | | | | | | | | | | | | | | |
| Interest and other income | | | 1,049 | | | | 1,809 | | | | 5,915 | | | | 6,152 | |
| Interest and other expense | | | (1,447 | ) | | | (1,883 | ) | | | (6,337 | ) | | | (6,802 | ) |
| Unrealized loss on investments in trading securities | | | (5,869 | ) | | | - | | | | (11,967 | ) | | | - | |
| Impairment of investments in available for sale securities | | | (5,385 | ) | | | - | | | | (8,404 | ) | | | - | |
| Unrealized gain on receipt of UBS put right | | | 11,081 | | | | - | | | | 11,081 | | | | - | |
| Impairment of goodwill | | | (5,930 | ) | | | - | | | | (5,930 | ) | | | - | |
| Impairment of long lived assets | | | (1,837 | ) | | | - | | | | (1,837 | ) | | | - | |
| Gain on early extinguishment of debt | | | - | | | | - | | | | 743 | | | | 4,491 | |
| | | | | | | | | | | | | | | | | |
| Income (loss) from continuing operations before income taxes | | | (6,140 | ) | | | 7,529 | | | | 1,818 | | | | 27,505 | |
| Provision for income taxes | | | (472 | ) | | | (650 | ) | | | (1,392 | ) | | | (1,410 | ) |
| Income (loss) from continuing operations | | | (6,612 | ) | | | 6,879 | | | | 426 | | | | 26,095 | |
| Loss from discontinued operations | | | (740 | ) | | | (157 | ) | | | (4,922 | ) | | | (2,769 | ) |
| | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | (7,352 | ) | | $ | 6,722 | | | $ | (4,496 | ) | | $ | 23,326 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding - basic | | | 31,991 | | | | 31,758 | | | | 31,872 | | | | 31,710 | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding - diluted | | | 31,991 | | | | 41,489 | | | | 31,872 | | | | 41,441 | |
| | | | | | | | | | | | | | | | | |
| Basic income (loss) per share from: | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | (0.21 | ) | | $ | 0.22 | | | $ | 0.01 | | | $ | 0.82 | |
| Discontinued operations | | | (0.02 | ) | | | (0.01 | ) | | | (0.15 | ) | | | (0.08 | ) |
| Net income (loss) per share | | $ | (0.23 | ) | | $ | 0.21 | | | $ | (0.14 | ) | | $ | 0.74 | |
| | | | | | | | | | | | | | | | | |
| Diluted income (loss) per share from: | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | (0.21 | ) | | $ | 0.20 | | | $ | 0.01 | | | $ | 0.75 | |
| Discontinued operations | | | (0.02 | ) | | | (0.01 | ) | | | (0.15 | ) | | | (0.07 | ) |
| Net income (loss) per share | | $ | (0.23 | ) | | $ | 0.19 | | | $ | (0.14 | ) | | $ | 0.68 | |
| | | | | | | | | | | | | | | | | |
Supplemental Information, page 2 of 6
FIVE STAR QUALITY CARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(in thousands, except share data)
| | | December 31, | |
| | | 2008 | | | 2007 | |
| Assets | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 16,138 | | | $ | 30,999 | |
| Accounts receivable, net of allowance | | | 66,023 | | | | 58,803 | |
| Prepaid expenses and other current assets | | | 15,965 | | | | 16,181 | |
| Investment securities | | | 7,232 | | | | 69,255 | |
| Restricted cash and investments | | | 7,518 | | | | 7,601 | |
| Assets of discontinued operations | | | 1,385 | | | | 3,178 | |
| Total current assets | | | 114,261 | | | | 186,017 | |
| | | | | | | | | |
| Long term assets: | | | | | | | | |
| Property and equipment, net | | | 190,627 | | | | 131,705 | |
| Investments in trading securities | | | 62,866 | | | | - | |
| UBS put right | | | 11,081 | | | | - | |
| Restricted cash and investments | | | 13,368 | | | | 12,943 | |
| Other long term assets | | | 20,435 | | | | 29,789 | |
| Total assets | | $ | 412,638 | | | $ | 360,454 | |
| | | | | | | | | |
| Liabilities and Shareholders’ Equity | | | | | | | | |
| Current liabilities | | $ | 129,139 | | | $ | 104,063 | |
| Long term liabilities | | | 37,344 | | | | 27,259 | |
| Secured revolving credit facility | | | 21,875 | | | | - | |
| Mortgage notes payable, long term | | | 12,441 | | | | 15,810 | |
| Convertible senior notes | | | 126,500 | | | | 126,500 | |
Shareholders’ equity (32,205,604 and 31,818,144 shares issued and outstanding at December 31, 2008 and December 31, 2007, respectively) | | | 85,339 | | | | 86,822 | |
| Total liabilities and shareholders’ equity | | $ | 412,638 | | | $ | 360,454 | |
Supplemental Information, page 3 of 6
FIVE STAR QUALITY CARE, INC.
SENIOR LIVING COMMUNITY OPERATING DATA (1)
(dollars in thousands, except average daily rate)
| | | Three months ended December 31, | | | Year ended December 31, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| | | | | | | | | | | | | |
| Number of communities (end of period) | | | 210 | | | | 163 | | | | 210 | | | | 163 | |
| Number of living units (end of period) | | | 22,264 | | | | 18,079 | | | | 22,264 | | | | 18,079 | |
| | | | | | | | | | | | | | | | | |
| Occupancy | | | 87.6 | % | | | 90.3 | % | | | 88.4 | % | | | 90.3 | % |
| Average daily rate (ADR) | | $ | 143.10 | | | $ | 140.23 | | | $ | 143.08 | | | $ | 137.23 | |
| ADR % growth | | | 2.0 | % | | | - | | | | 4.3 | % | | | - | |
| | | | | | | | | | | | | | | | | |
| Percent breakdown of net senior living revenues: | | | | | | | | | | | | | | | | |
| Medicare | | | 14.3 | % | | | 15.7 | % | | | 14.8 | % | | | 15.5 | % |
| Medicaid | | | 16.3 | % | | | 18.7 | % | | | 16.9 | % | | | 18.3 | % |
| Private | | | 69.4 | % | | | 65.6 | % | | | 68.3 | % | | | 66.2 | % |
| Total | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % |
| | | | | | | | | | | | | | | | | |
| Senior living revenues | | $ | 248,834 | | | $ | 208,615 | | | $ | 935,393 | | | $ | 809,934 | |
| Senior living revenues % growth | | | 19.3 | % | | | - | | | | 15.5 | % | | | - | |
| | | | | | | | | | | | | | | | | |
| Senior living wages and benefits | | $ | 125,475 | | | $ | 103,950 | | | $ | 467,068 | | | $ | 410,447 | |
| Senior living wages and benefits as a % of senior living revenues | | | 50.4 | % | | | 49.8 | % | | | 49.9 | % | | | 50.7 | % |
| Other senior living operating expenses | | $ | 62,286 | | | $ | 52,795 | | | $ | 235,603 | | | $ | 202,194 | |
| Other senior living operating expenses as a % of senior living revenues | | | 25.0 | % | | | 25.3 | % | | | 25.2 | % | | | 25.0 | % |
Community expenses (2) % growth | | | 19.8 | % | | | - | | | | 14.7 | % | | | - | |
| Excludes data for pharmacy and hospital operations and discontinued senior living operations (except for the number of communities and living units). |
| Community expenses equal senior living wages and benefits and other senior living operating expenses as shown on our consolidated statement of operations. |
Supplemental Information, page 4 of 6
FIVE STAR QUALITY CARE, INC.
COMPARABLE SENIOR LIVING COMMUNITY OPERATING DATA (1)
(dollars in thousands, except average daily rate)
| | | Three months ended December 31, (2) | | | Year ended December 31, (3) | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| | | | | | | | | | | | | |
| Number of communities (end of period) | | | 163 | | | | 163 | | | | 162 | | | | 162 | |
| Number of living units (end of period) | | | 18,085 | | | | 18,079 | | | | 18,029 | | | | 18,023 | |
| | | | | | | | | | | | | | | | | |
| Occupancy | | | 88.0 | % | | | 90.3 | % | | | 88.6 | % | | | 90.4 | % |
| Average daily rate (ADR) | | $ | 145.78 | | | $ | 140.23 | | | $ | 144.45 | | | $ | 137.34 | |
| ADR % growth | | | 4.0 | % | | | - | | | | 5.2 | % | | | - | |
| | | | | | | | | | | | | | | | | |
| Percent breakdown of net senior living revenues: | | | | | | | | | | | | | | | | |
| Medicare | | | 16.2 | % | | | 15.7 | % | | | 16.1 | % | | | 15.5 | % |
| Medicaid | | | 18.3 | % | | | 18.7 | % | | | 18.1 | % | | | 18.3 | % |
| Private | | | 65.5 | % | | | 65.6 | % | | | 65.8 | % | | | 66.2 | % |
| Total | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % |
| | | | | | | | | | | | | | | | | |
| Senior living revenues | | $ | 211,401 | | | $ | 208,615 | | | $ | 836,690 | | | $ | 808,880 | |
| Senior living revenues % growth | | | 1.3 | % | | | - | | | | 3.4 | % | | | - | |
| | | | | | | | | | | | | | | | | |
| Senior living wages and benefits | | $ | 107,879 | | | $ | 103,950 | | | $ | 420,414 | | | $ | 410,056 | |
| Senior living wages and benefits as a % of senior living revenues | | | 51.0 | % | | | 49.8 | % | | | 50.2 | % | | | 50.7 | % |
| Other senior living operating expenses | | $ | 52,845 | | | $ | 52,795 | | | $ | 212,810 | | | $ | 202,023 | |
| Other senior living operating expenses as a % of senior living revenues | | | 25.0 | % | | | 25.3 | % | | | 25.4 | % | | | 25.0 | % |
Community expenses (4) % growth | | | 2.5 | % | | | - | | | | 3.5 | % | | | - | |
| Excludes data for pharmacy and hospital operations and discontinued senior living discontinued operations (except for the number of communities and living units). |
| Communities that we have operated continuously since October 1, 2007. |
| Communities that we have operated continuously since January 1, 2007. |
| Community expenses equal senior living wages and benefits and other senior living operating expenses as shown on our consolidated statement of operations. |
Supplemental Information, page 5 of 6
FIVE STAR QUALITY CARE, INC.
OTHER OPERATING DATA (1)
(dollars in thousands, except average daily rate)
| | | Three months ended December 31, | | | Year ended December 31, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
Number of senior living communities (2) (end of period): | | | | | | | | | | | | |
| Assisted and independent living communities, owned | | | 23 | | | | 13 | | | | 23 | | | | 13 | |
| Assisted and independent living communities, leased | | | 138 | | | | 101 | | | | 138 | | | | 101 | |
| Total number of assisted and independent living communities | | | 161 | | | | 114 | | | | 161 | | | | 114 | |
| | | | | | | | | | | | | | | | | |
| Skilled nursing communities, owned | | | 2 | | | | 2 | | | | 2 | | | | 2 | |
| Skilled nursing communities, leased | | | 47 | | | | 47 | | | | 47 | | | | 47 | |
| Total number of skilled nursing communities | | | 49 | | | | 49 | | | | 49 | | | | 49 | |
| | | | | | | | | | | | | | | | | |
| Total number of senior living communities | | | 210 | | | | 163 | | | | 210 | | | | 163 | |
| | | | | | | | | | | | | | | | | |
| Number of senior living units (end of period): | | | | | | | | | | | | | | | | |
| Assisted and independent living communities, owned | | | 1,975 | | | | 1,068 | | | | 1,975 | | | | 1,068 | |
Assisted and independent living communities, leased (3) | | | 15,879 | | | | 12,607 | | | | 15,879 | | | | 12,607 | |
| Total number of assisted and independent living units | | | 17,854 | | | | 13,675 | | | | 17,854 | | | | 13,675 | |
| | | | | | | | | | | | | | | | | |
| Skilled nursing communities, owned | | | 271 | | | | 271 | | | | 271 | | | | 271 | |
Skilled nursing communities, leased (4) | | | 4,139 | | | | 4,133 | | | | 4,139 | | | | 4,133 | |
| Total number of skilled nursing units | | | 4,410 | | | | 4,404 | | | | 4,410 | | | | 4,404 | |
| | | | | | | | | | | | | | | | | |
| Total number of senior living units | | | 22,264 | | | | 18,079 | | | | 22,264 | | | | 18,079 | |
| | | | | | | | | | | | | | | | | |
| Senior living revenues: | | | | | | | | | | | | | | | | |
| Assisted and independent living communities | | $ | 179,998 | | | $ | 140,773 | | | $ | 663,744 | | | $ | 549,622 | |
| Skilled nursing communities | | | 66,841 | | | | 66,203 | | | | 263,909 | | | | 254,756 | |
Other (5) | | | 1,995 | | | | 1,679 | | | | 7,740 | | | | 5,556 | |
| Total senior living revenues | | $ | 248,834 | | | $ | 208,615 | | | $ | 935,393 | | | $ | 809,934 | |
| | | | | | | | | | | | | | | | | |
| Assisted and independent living communities occupancy | | | 88.1 | % | | | 91.1 | % | | | 88.6 | % | | | 91.1 | % |
| Assisted and independent living communities ADR | | $ | 129.41 | | | $ | 124.34 | | | $ | 129.06 | | | $ | 122.40 | |
| Assisted and independent living communities ADR % growth | | | 4.1 | % | | | - | | | | 5.4 | % | | | - | |
| | | | | | | | | | | | | | | | | |
| Skilled nursing communities occupancy | | | 85.7 | % | | | 87.8 | % | | | 86.4 | % | | | 87.8 | % |
| Skilled nursing communities ADR | | $ | 192.85 | | | $ | 186.10 | | | $ | 189.41 | | | $ | 180.51 | |
| Skilled nursing communities ADR % growth | | | 3.6 | % | | | - | | | | 4.9 | % | | | - | |
| | | | | | | | | | | | | | | | | |
| Hospital data: | | | | | | | | | | | | | | | | |
| Rehabilitation hospital units | | | 321 | | | | 321 | | | | 321 | | | | 321 | |
| | | | | | | | | | | | | | | | | |
| Rehabilitation hospital occupancy | | | 62.3 | % | | | 62.1 | % | | | 62.9 | % | | | 63.5 | % |
(1) | Excludes data for pharmacy operations and discontinued senior living operations (except for the number of communities and living units). |
(2) | Communities are categorized by the type of living units which constitute a majority of the total living units at the community. |
(3) | Includes 1,934 and 1,718 skilled nursing units in communities where assisted living and independent living services are the predominant services provided for the three months and year ended December 31, 2008 and 2007, respectively. |
(4) | Includes 66 assisted living and independent living units in communities where skilled nursing services are the predominant services provided for the three months and year ended December 31, 2008 and 2007, respectively. |
(5) | Other senior living revenues relates primarily to rehabilitation and other specialty service revenues provided at residential facilities and does not include revenues from pharmacy or hospital operations. |
Supplemental Information, page 6 of 6
FIVE STAR QUALITY CARE, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
Reconciliation of income (loss) from continuing operations to earnings (losses) before interest, taxes, depreciation and amortization, or EBITDA, for the three months and year ended December 31, 2008 and 2007:
| | For the three months ended December 31, | | For the year ended December 31, |
| | 2008 | 2007 | | 2008 | 2007 |
| Income (loss) from continuing operations | $ (6,612) | $ 6,879 | | $ 426 | $ 26,095 |
| Add: income taxes | 472 | 650 | | 1,392 | 1,410 |
| Add: depreciation and amortization | 3,746 | 3,654 | | 14,719 | 13,595 |
| Add: interest and other expense | 1,447 | 1,883 | | 6,337 | 6,802 |
| Less: interest and other income | (1,049) | (1,809) | | (5,915) | (6,152) |
EBITDA (1) | $ (1,996) | $ 11,257 | | $ 16,959 | $ 41,750 |
| (1) | We consider earnings (losses) before interest, taxes, depreciation and amortization, or EBITDA, to be a meaningful disclosure because we believe that the inclusion of this non-GAAP financial measure helps investors to gain a better understanding of growth in our core operating results, and can also help investors who wish to make comparisons between us and other companies on both a GAAP and a non-GAAP basis. EBITDA as presented may not, however, always be comparable to amounts calculated by other companies. This non-GAAP financial measure is used by management to evaluate financial performance and resource allocation for our communities and for us as a whole, and for comparing such performance to that of prior periods and to the performance of our competitors. This measure also is used by management to aid in our financial and operating decision making. We have not made any adjustments to reported EBITDA for the three months and year ended December 31, 2008 and 2007, respectively, relating to the unrealized loss as a result of our holdings of auction rate securities; the impairment of certain investments in marketable securities; the gain on our receipt of UBS put rights; the impairment of goodwill and long lived assets; or the gain on early extinguishment of debt. |
