Exhibit 99.2
Supplemental information relating to American Retirement Corporation's first
quarter 2006 results is furnished herewith as Exhibit 99.2.
AMERICAN RETIREMENT CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RETIREMENT CENTER COMMUNITIES - FIRST QUARTER 2006
($'s in thousands)
RETIREMENT CENTER COMMUNITIES: TOTAL
Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
------- ------- ------- ------- -------
Resident and healthcare revenue $91,046 $93,344 $94,781 $97,117 $98,606
Community operating expense 60,454 61,419 63,018 64,333 64,351
------- ------- ------- ------- -------
Community operating contribution 30,592 31,925 31,763 32,784 34,255
Community operating margin 33.6% 34.2% 33.5% 33.8% 34.7%
Community operating contribution excluding
Amortization of Deferred Entrance Fee Revenue 28,357 29,226 29,252 30,075 31,481
Ending Occupancy 8,585 8,567 8,635 8,655 8,578
Ending Occupancy % 94.6% 94.8% 95.3% 96.0% 95.2%
Average Monthly Occupancy 8,532 8,572 8,593 8,627 8,615
Monthly Revenue per unit $ 3,557 $ 3,630 $ 3,677 $ 3,752 $ 3,815
Year to Year % Change 4.8% 6.7% 7.2% 5.8% 7.3%
Monthly Operating Contribution per unit $ 1,195 $ 1,241 $ 1,232 $ 1,267 $ 1,325
Year to Year % Change 5.4% 7.5% 9.6% 4.4% 10.9%
RETIREMENT CENTER COMMUNITIES: RENTAL COMMUNITIES
Q1 05 Q2 05 Q3 05 Q4 05 Q1 05
------- ------- ------- ------- -------
Resident and healthcare revenue $58,493 $59,469 $60,923 $62,156 $63,117
Community operating expense 36,739 36,809 38,305 38,897 39,252
------- ------- ------- ------- -------
Community operating contribution 21,754 22,660 22,618 23,259 23,865
Community operating margin 37.2% 38.1% 37.1% 37.4% 37.8%
Ending Occupancy 5,586 5,597 5,648 5,690 5,614
Ending Occupancy % 95.4% 95.7% 96.5% 97.2% 95.9%
Average Monthly Occupancy 5,602 5,596 5,615 5,655 5,653
Monthly Revenue per unit $ 3,480 $ 3,542 $ 3,617 $ 3,664 $ 3,722
Year to Year % Change 6.0% 7.2% 7.5% 7.1% 6.9%
Monthly Operating Contribution per unit $ 1,294 $ 1,350 $ 1,343 $ 1,371 $ 1,407
Year to Year % Change -2.2% -3.4% -4.4% 1.1% 8.7%
RETIREMENT CENTER COMMUNITIES: ENTRANCE FEE CCRCs
Q1 05 Q2 05 Q3 05 Q4 05 Q1 05
------- ------- ------- ------- -------
Resident and healthcare revenue $32,989 $33,875 $33,858 $34,961 $35,489
Community operating expense 24,151 24,610 24,713 25,436 25,099
------- ------- ------- ------- -------
Community operating contribution 8,838 9,265 9,145 9,525 10,390
Community operating margin 26.8% 27.4% 27.0% 27.2% 29.3%
Ending Occupancy 2,999 2,970 2,987 2,965 2,964
Ending Occupancy % 93.3% 93.2% 93.8% 94.5% 94.5%
Average Monthly Occupancy 2,930 2,976 2,978 2,972 2,962
Monthly Revenue per unit $ 3,753 $ 3,794 $ 3,790 $ 3,921 $ 3,994
Year to Year % Change 3.9% 5.3% 6.4% 3.3% 6.4%
Monthly Operating Contribution per unit $ 1,005 $ 1,038 $ 1,024 $ 1,068 $ 1,169
Year to Year % Change 7.9% 12.5% 16.2% -1.4% 16.3%
Net Cash Flow per unit (includes Net Resale Cash Flow) 1,397 1,551 1,007 1,695 1,530
Entrance Fee Sales:
Total Entrance Fee (Independent Living) Units 2,217 2,213 2,214 2,214 2,214
Ending Occupancy % 95.8% 95.6% 95.7% 96.3% 95.9%
Entrance Fee Sales (in units) 70 81 61 80 67
Entrance Fee Sales $11,589 $14,271 $ 9,563 $14,680 $11,154
Refunds paid on Entrance Fee Terminations 4,137 5,293 5,437 4,484 3,386
Net Resale Cash Flow 7,452 8,978 4,126 10,196 7,768
NOTE: The sales proceeds at entrance fee CCRCs provide a source of financing to
the community, thereby reducing the financing costs (interest or lease expense)
that it would otherwise incur. As a result of the residents paying an up-front
entrance fee, they pay a lower monthly service fee than they would pay at a
similar rental community without entrance fees. As a result, entrance fee
communities have lower operating margins (but lower non-operating financing
costs) than similar rental communities.
AMERICAN RETIREMENT CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
FREE-STANDING ASSISTED LIVING COMMUNITIES - FIRST QUARTER 2006
($'s in thousands)
FREE-STANDING ASSISTED LIVING COMMUNITIES
Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
------- ------- ------- ------- -------
Resident and healthcare revenue $25,607 $26,267 $27,543 $28,478 $29,180
Community operating expense 17,847 17,447 18,823 18,963 19,103
------- ------- ------- ------- -------
Community operating contribution 7,760 8,820 8,720 9,515 10,077
Community operating margin 30.3% 33.6% 31.7% 33.4% 34.5%
Ending Occupancy 2,562 2,561 2,630 2,643 2,669
Ending Occupancy % 90.1% 89.9% 90.8% 91.2% 92.3%
Average Monthly Occupancy 2,537 2,557 2,592 2,630 2,653
Monthly Revenue per unit $ 3,364 $ 3,500 $ 3,626 $ 3,678 $ 3,666
Year to Year % Change 6.2% 8.4% 9.7% 9.1% 9.0%
Monthly Operating Contribution per unit $ 1,020 $ 1,150 $ 1,121 $ 1,206 $ 1,266
Year to Year % Change 30.2% 39.4% 20.7% 21.0% 24.2%
NOTE: Excludes two non-consolidated joint ventures from Q1 04 to Q2 05; one
non-consolidated joint venture during Q3 05 and nine non-consolidated joint
ventures during Q4 05 and Q1 06.
AMERICAN RETIREMENT CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
NONCONSOLIDATED COMMUNITIES - FIRST QUARTER 2006
($'s in thousands)
NONCONSOLIDATED COMMUNITIES
Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
------- ------- ------- ------- -------
Resident and healthcare revenue $ 1,245 $ 1,320 $ 873 $ 6,182 $10,722
Community operating expense 928 903 575 4,151 7,035
------- ------- ------- ------- -------
Community operating contribution 317 416 298 2,031 3,687
Community operating margin 25.4% 31.5% 34.2% 32.9% 34.4%
Ending Occupancy 132 144 106 850 1,649
Capacity 164 164 116 947 1,836
Ending Occupancy % 80.5% 87.8% 91.4% 89.8% 89.8%
Average Monthly Occupancy 131 141 103 603 1,123
Monthly Revenue per unit $ 3,159 $ 3,131 $ 2,832 $ 3,418 $ 3,184
Monthly Operating Contribution per unit $ 804 $ 987 $ 967 $ 1,123 $ 1,095
NOTE: Includes two communities for Q1 05 and Q2 05; one community in Q3 05; 9
communities during Q4 05 with 8 communities acquired in November 2005; and 13
nonconsolidated communities in Q1 2006 with 4 communities acquired in March
2006. These 13 communities are managed by the company with the company holding a
minority interest in each community.
AMERICAN RETIREMENT CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
INNOVATIVE SENIOR CARE / THERAPY
FOURTH QUARTER 2005
($'s in thousands)
Q1 05 Q2 05 Q3 05 Q4 05 Q1 06
------- ------- ------- ------- -------
Revenues $11,745 $12,504 $13,472 $14,452 $14,249
Therapy clinics 107 115 124 127 134
Outside clinics (included in above totals) 34 41 50 52 56
Therapy staff
Full time 369 432 482 509 532
Part time (PRN / On-call staff) 208 194 202 186 168
AMERICAN RETIREMENT CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
SAME COMMUNITY RESULTS - FIRST QUARTER 2006
($'s in thousands)
INCLUDING ENTRANCE FEE COMMUNITIES:
- ----------------------------------------------------
Three months ended March 31
-------------------------- $ %
2006 2005 Change Change
----------- ---------- --------- -------
Resident & Healthcare revenue $ 125,481 $ 115,866 $ 9,615 8.3%
Community operating expense 81,500 77,506 3,994 5.2%
----------- ---------- ---------
Community operating contribution $ 43,981 $ 38,360 5,621 14.7%
Community operating margin 35.0% 33.1%
# Locations 59 59
Avg. Occupancy 95.0% 93.9%
Avg. Occupied Units 11,065 10,989 76 0.7%
Avg. Mo. Revenue/unit $ 3,780 $ 3,515 $ 266 7.6%
Avg. Mo. Operating Contribution/unit 1,325 1,164 161 13.9%
EXCLUDING ENTRANCE FEE COMMUNITIES:
- ----------------------------------------------------
Three months end March 31
-------------------------- $ %
2006 2005 Change Change
----------- ---------- --------- -------
Resident & Healthcare revenue $ 91,678 83,664 $ 8,014 9.6%
Community operating expense 58,013 54,150 3,863 7.1%
----------- ---------- ---------
Community operating contribution $ 33,665 $ 29,514 4,151 14.1%
Community operating margin 36.7% 35.3%
# Locations 53 53
Avg. Occupancy 94.7% 93.6%
Avg. Occupied Units 8,258 8,139 119 1.5%
Avg. Mo. Revenue/unit $ 3,701 $ 3,426 $ 274 8.0%
Avg. Mo. Operating Contribution/unit 1,359 1,209 150 12.4%
* 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 2006
($'s in thousands)
Three months end Three months end
March 31, March 31,
--------------------- ---------------------
2006 % 2005 %
-------- ---- -------- ----
COMPOSITION
Revenues:
Retirement Centers
Independent living $ 41,026 31.2% $ 38,234 32.4%
Assisted living 15,412 11.8% 15,010 12.7%
Skilled Nursing 21,509 16.4% 20,396 17.3%
Ancillary services, including Innovative
Senior Care (therapy and wellness programs) 17,885 13.6% 15,171 12.9%
Amortization of Deferred Entrance Fee Revenue 2,774 2.1% 2,235 1.9%
-------- ---- -------- ----
98,606 75.2% 91,046 77.2%
Free-Standing Assisted Living
Assisted living 25,926 19.8% 23,169 19.6%
Ancillary services, including
Innovative Senior Care (therapy and wellness programs) 3,254 2.5% 2,438 2.0%
-------- ---- -------- ----
29,180 22.3% 25,607 21.7%
Total Resident and Healthcare Revenue 127,786 97.5% 116,653 98.9%
Management and Contract Services 1,224 1.0% 500 0.5%
Reimbursed Expenses 2,083 1.5% 802 0.6%
-------- ---- -------- ----
3,307 2.5% 1,302 1.1%
-------- ---- -------- ----
Total Revenues $131,093 100.0% $117,955 100.0%
BY PAYOR
Private Pay $109,101 83.2% $ 98,725 83.7%
Medicare 19,553 14.9% 16,747 14.2%
Medicaid 2,439 1.9% 2,483 2.1%
-------- ---- -------- ----
Total $131,093 100.0% $117,955 100.0%
AMERICAN RETIREMENT CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
OTHER STATISTICS - FIRST QUARTER 2006
UNIT CAPACITY BY COMMUNITY TYPE
At March 31, 2006
------------------------------------
Locations Capacity
-------------- ------------------
Rental Retirement Centers:
Owned-100% 3 445
Owned-Joint Venture 4 893
Leased 19 5,426
Managed - other 3 679
29 7,443
Entrance Fee Retirement Centers:
Owned-100% 3 919
Owned- 90% -- --
Leased 3 1,479
Managed-Freedom Square 1 739
Managed-other 3 737
10 3,874
Free-Standing AL's:
Owned-100% 11 973
Owned-Joint Venture 9 943
Leased 20 1,831
Leased-Joint Venture 1 89
41 3,836
All Communities:
Owned-100% 17 2,337
Owned- 90% -- --
Owned-Joint Venture 13 1,836
Leased 42 8,736
Leased-Joint Venture 1 89
Managed-Freedom Square 1 739
Managed-other 6 1,416
80 15,153
Note: Leased communities include both operating and capital leases.
The 13 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.