Sunrise Senior Living, Incorporated (SRZ)

[Slojab]

Sunrise Reports Financial Results for First Quarter of 2012

MCLEAN, VA – Sunrise Senior Living, Inc. (NYSE: SRZ) today reported financial results and operating data for the first quarter of 2012. Sunrise will host a conference call and webcast on Wednesday, May 2, 2012, at 9:00 a.m. ET, to discuss the financial results.

Mark Ordan, Sunrise’s chief executive officer, commented on the quarter, “We are very pleased by our strong quarter and by the progress we are making to keep Sunrise at the forefront of caring for seniors, for years to come.”

2012 First Quarter Results

In the first quarter of 2012, Sunrise reported net income of $2.0 million or $0.03 per fully diluted share, as compared to a net loss of $(17.7) million, or $(0.32) per fully diluted share, for the first quarter of 2011.

Adjusted EBITDAR for the first quarter of 2012 was $43.8 million as compared to $28.3 million for the first quarter of 2011. This measure is used by management to focus on income generated from the ongoing operations of the Company. Adjusted EBITDAR is a measure of operating performance that is not calculated in accordance with U.S. GAAP and should not be considered as a substitute for income/(loss) from operations or net income/(loss). For a reconciliation of this measure, please refer to the attached table “Reconciliation for EBITDA, Adjusted EBITDA and Adjusted EBITDAR.”

Cash and Liquidity Update

Sunrise had $47.2 million of unrestricted cash at March 31, 2012. As of March 31, 2012, the principal amount of Sunrise’s consolidated debt was $751.5 million, as compared to $607.4 million at December 31, 2011, an increase of $144.1 million. The increase in consolidated debt primarily relates to the Santa Monica purchase totaling $21.1 million and the two debt pools on communities acquired from two of Sunrise’s existing joint ventures totaling $62.5 million and $57.2 million respectively.

As of March 31, 2012, there were $39.0 million of draws against the Credit Facility and $10.2 million in letters of credit outstanding. On April 27, 2012, the Company paid down by $10.0 million the outstanding draws against the Credit Facility. The outstanding balance of the Credit Facility after the payment was $29.0 million.

Asset Purchases and Transfers

Santa Monica Purchase

On February 28, 2012, Sunrise closed on a purchase and sale agreement with a venture partner who owned 85 percent of the membership interests (the “Partner Interest”) in Santa Monica AL, LLC (“Santa Monica”). Sunrise owned the remaining 15 percent membership interest. Pursuant to the purchase and sale agreement, Sunrise purchased the Partner Interest for an aggregate purchase price of $16.2 million. Santa Monica indirectly owns one senior living facility located in Santa Monica, California. As a result of the transaction, effective February 28, 2012, the assets, liabilities and operating results of Santa Monica are consolidated.



--------------------------------------------------------------------------------

Simultaneously, with the closing of the transaction, Sunrise entered into a new loan with Prudential Insurance Company of America to pool Santa Monica with Connecticut Avenue, and senior debt financed the two assets.

Facilities Transfer from Existing Joint Ventures

On March 20, 2012, two of Sunrise’s existing joint ventures transferred their ownership interest in two venture subsidiaries to Sunrise for no cash consideration. The transferred venture subsidiaries indirectly own five senior living facilities and one land parcel (the “Facilities”). Prior to the transfer, Sunrise had a 20 percent indirect ownership interest in the Facilities. As a result of the transfer, the Facilities are now 100 percent indirectly owned by Sunrise and are consolidated in Sunrise’s financial results commencing March 20, 2012.

General and Administrative Expenses

Sunrise’s general and administrative expense included $3.0 million in litigation contingent loss for the quarter ended March 31, 2012.

Subsequent Event – Sale of Venture Interest in 16 Communities

On May 1, 2012, the subsidiaries of ventures between an institutional investor and Sunrise sold 16 communities to Ventas Inc. for a purchase price of approximately $362 million. Sunrise received approximately $28 million of cash at closing. Sunrise will remain the manager of the 16 communities under the pre-existing terms relating to management fees and contract length, which range from 18 to 27 years.

Operating Data for First Quarter 2012



• Average unit occupancy for stabilized properties for the first quarter of 2012 was 88.2 percent, which was up 60 basis points from 87.6 percent for the first quarter of 2011 and unchanged sequentially compared to the fourth quarter of 2011.




• Average daily revenue per occupied unit for stabilized properties increased 2.9 percent from $214.63 for the first quarter of 2011 to $220.86 for the first quarter of 2012.




• Stabilized property net operating income increased 8.0 percent from $136.1 million for the first quarter of 2011 to $147.0 million for the first quarter of 2012. Overall, net operating income including lease up properties increased 10.1 percent from the first quarter of 2011 to the first quarter of 2012.


Stabilized properties are single properties or pools of properties owned or leased by Sunrise or owned by a joint venture where the single property or all of the communities in the pool have been open and operating for more than 36 months as of March 31, 2012. All managed communities are stabilized properties.

Supplemental Information

For additional details on Sunrise’s stabilized and lease up properties, please refer to the Supplemental Information attached. Also, additional supplemental information has been furnished to the Securities and Exchange Commission in a Form 8-K, and can also be found on the Supplemental Data link on the Investor Relations section of the Company’s Web site at http://suppdata.sunriseseniorliving.com/

Conference Call and Webcast

Sunrise will host a conference call and webcast at 9:00 a.m. ET on Wednesday, May 2, 2012, to discuss the financial results for the first quarter of 2012 and the other matters discussed in this press release. The call-in number for the conference call is 888-726-2470 or 913-312-1458 (from outside the U.S.). Callers should reference the “Sunrise Senior Living Q1 Earnings Call” or the participant passcode: 4979099. Those interested may also go to the Investor Relations section of the Company’s website ( http://www.sunriseseniorliving.com ) to listen to the earnings call. A telephone replay of the call will be available until May 16, 2012 at 1 p.m. ET, by dialing 888-203-1112 or 719-457-0820 (from outside the U.S.) and referencing replay passcode: 4979099; a replay will also be available on Sunrise’s website during that period.