Sunrise Receives Over $80 Million in Buyout Fees for 12 Management Contracts

Monday, October 31, 2005 8:08 am EST



Public Company Information:


Sunrise Senior Living, Inc. (NYSE: SRZ), announced that it has reached an agreement with Five Star Quality Care, Inc. ("Five Star") to accelerate the previously announced cancellation of 12 management contracts with Five Star from December 29, 2005 to November 1, 2005. In connection with the cancellation of these management contracts, Sunrise received approximately $80.2 million in buyout fees from Five Star and an additional $1.3 million from Five Star for management fees, which would otherwise have been paid under the management contracts from November 1, 2005 through December 29, 2005. Sunrise acquired these 12 management contracts as part of its acquisition of Marriott Senior Living Services in 2003 and allocated approximately $15 million of the purchase price to these contracts at the time of purchase. Five Star's decision to terminate these contracts was not related to Sunrise's performance at any of these communities.

Sunrise expects to redeploy the cash received into various investment alternatives, which potentially include the acquisition of management contracts and/or other senior housing operators, expanded development activities, repayment of outstanding debt, share repurchases and other potential investments. Sunrise expects to update its 2005 and 2006 annual earnings per share guidance upon the release of its third quarter 2005 financial results, which is scheduled for November 8, 2005.

Sunrise Senior Living is the nation's largest provider of senior living services. The McLean, Va.-based Company employs more than 38,000 people. As of August 31, 2005, Sunrise operated 424 communities in the United States, Canada, Germany and the United Kingdom with a combined capacity for approximately 53,000 residents. Sunrise also had 36 communities under construction in these countries with a combined capacity for over 3,700 residents. Sunrise offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing and rehabilitative care. Sunrise's senior living services are delivered by staff trained to encourage the independence, preserve the dignity, enable freedom of choice and protect the privacy of residents. To learn more about Sunrise please visit

Certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Sunrise believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurances that its expectations will be realized. Sunrise's actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, our ability to integrate The Fountains and Greystone acquisitions into our operations, development and construction risks, acquisition risks, licensing risks, business conditions, competition, changes in interest rates, our ability to manage our expenses, market factors that could affect the value of our properties, the risks of downturns in general economic conditions, satisfaction of closing conditions and availability of financing for development and acquisitions. These and other risks are detailed in the Company's annual report on Form 10-K filed with the Securities and Exchange Commission. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

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Kenneth J. Abod
Senior Vice President and Treasurer of Sunrise Senior Living, Inc.

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