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.