Five Star Quality Care, Inc. (AMEX: FVE) today announced
that it has reached an agreement with Sunrise Senior Living Services,
Inc. (NYSE: SRZ) to accelerate the termination of 12 long term
management agreements to November 1, 2005 from the previously
announced date of December 29, 2005.
As part of the termination, Five Star will pay Sunrise approximately $82.0 million in termination fees and management fees which would otherwise have been due Sunrise through December 29, 2005. Five Star will record these payments as expenses in its income statement for the quarter ending September 30, 2005. Five Star will fund these payments with cash on hand and with the proceeds of a $58 million sale leaseback transaction with Senior Housing Properties Trust.
Five Star Quality Care, Inc. owns, leases, manages and operates senior living communities which offer independent living apartments, assisted living accommodations and skilled nursing services in 155 senior living communities with over 17,000 living units, located in 28 states. Five Star also owns and operates four institutional pharmacies. Five Star is headquartered in Newton, Massachusetts.
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND FEDERAL SECURITIES LAWS. THESE STATEMENTS REFLECT FIVE STAR'S INTENT, BELIEF OR EXPECTATION, OR THE INTENT, BELIEFS OR EXPECTATIONS OF ITS DIRECTORS AND OFFICERS, BUT THEY ARE NOT GUARANTEED TO OCCUR. FOR EXAMPLE, THE TERMINATION OF THE 12 MANAGEMENT AGREEMENTS WITH SUNRISE MAY IMPLY THAT FIVE STAR'S FINANCIAL RESULTS WILL IMPROVE IN THE FUTURE. THE TERMINATION OF THE 12 MANAGEMENT AGREEMENTS MAY NOT IMPROVE FIVE STAR'S FINANCIAL RESULTS OR MAY CAUSE IT TO EXPERIENCE OPERATING LOSSES. ALTHOUGH ITS EXPECTATION IS OTHERWISE, FIVE STAR MAY BE UNABLE TO OPERATE THESE COMMUNITIES FOR ITS OWN ACCOUNT IN A MANNER WHICH IS AS PROFITABLE AS, OR MORE PROFITABLE THAN, THEY HAVE BEEN OPERATED BY SUNRISE. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON FIVE STAR'S PRESENT EXPECTATIONS, BUT THESE STATEMENTS AND THE IMPLICATIONS OF THESE STATEMENTS MAY NOT OCCUR. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON ANY FORWARD LOOKING STATEMENTS.
As part of the termination, Five Star will pay Sunrise approximately $82.0 million in termination fees and management fees which would otherwise have been due Sunrise through December 29, 2005. Five Star will record these payments as expenses in its income statement for the quarter ending September 30, 2005. Five Star will fund these payments with cash on hand and with the proceeds of a $58 million sale leaseback transaction with Senior Housing Properties Trust.
Five Star Quality Care, Inc. owns, leases, manages and operates senior living communities which offer independent living apartments, assisted living accommodations and skilled nursing services in 155 senior living communities with over 17,000 living units, located in 28 states. Five Star also owns and operates four institutional pharmacies. Five Star is headquartered in Newton, Massachusetts.
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND FEDERAL SECURITIES LAWS. THESE STATEMENTS REFLECT FIVE STAR'S INTENT, BELIEF OR EXPECTATION, OR THE INTENT, BELIEFS OR EXPECTATIONS OF ITS DIRECTORS AND OFFICERS, BUT THEY ARE NOT GUARANTEED TO OCCUR. FOR EXAMPLE, THE TERMINATION OF THE 12 MANAGEMENT AGREEMENTS WITH SUNRISE MAY IMPLY THAT FIVE STAR'S FINANCIAL RESULTS WILL IMPROVE IN THE FUTURE. THE TERMINATION OF THE 12 MANAGEMENT AGREEMENTS MAY NOT IMPROVE FIVE STAR'S FINANCIAL RESULTS OR MAY CAUSE IT TO EXPERIENCE OPERATING LOSSES. ALTHOUGH ITS EXPECTATION IS OTHERWISE, FIVE STAR MAY BE UNABLE TO OPERATE THESE COMMUNITIES FOR ITS OWN ACCOUNT IN A MANNER WHICH IS AS PROFITABLE AS, OR MORE PROFITABLE THAN, THEY HAVE BEEN OPERATED BY SUNRISE. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON FIVE STAR'S PRESENT EXPECTATIONS, BUT THESE STATEMENTS AND THE IMPLICATIONS OF THESE STATEMENTS MAY NOT OCCUR. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON ANY FORWARD LOOKING STATEMENTS.
© 2005 Business Wire
