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"We are pleased to have filed our 10-Qs for the first and second quartersof 2008," said Paul Klaassen, founder and chief executive officer of Sunrise."While the results we are reporting reveal the challenges we face, we areconfident that we are squarely addressing these issues."
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The Company reported revenues of $434.1 million and $408.0 million for thesecond quarter 2008 and 2007, respectively. Net loss for the second quarter2008 was ($31.8) million, or ($0.63) per fully diluted share as compared tonet income of $8.0 million, or $0.15 per fully diluted share in the secondquarter 2007. Loss before benefit from income taxes was $(41.6) millionduring the three months ended June 30, 2008, as compared to $11.5 million ofincome for the three months ended June 30, 2007. The loss before benefit fromincome taxes for the three months ended June 30, 2008 compared to the year agoperiod was primarily due to a $51.2 million decrease in Sunrise's share ofearnings and return on investment in unconsolidated communities. There wereno recapitalizations during the second quarter of 2008 compared to therecapitalization of two ventures in the second quarter of 2007 which resultedin a return on investment of $54.3 million.
The Company reported revenues of $867.2 million and $803.9 million for thefirst six months of 2008 and 2007, respectively. Net loss for the first sixmonths of 2008 was ($64.9) million, or ($1.29) per fully diluted share ascompared to net income of $15.5 million, or $0.30 per fully diluted share inthe first six months of 2007. Loss before benefit from income taxes was$(91.5) million during the six months ended June 30, 2008, as compared to$28.9 million of income for the six months ended June 30, 2007. The lossbefore benefit from income taxes for the six months ended June 30, 2008compared to the year ago period was primarily due to an increased loss fromoperations of $34.8 million, a decrease in gains on the sale and developmentof real estate and equity interests of $32.3 million, and a decrease inSunrise's share of earnings and return on investment in unconsolidatedcommunities of $48.2 million. The increased loss from operations is primarilyrelated to an increased write-off of abandoned project costs of $27.7 millionand an increase in general and administrative costs of $8.8 million. Gains onthe sale of real estate decreased as Sunrise recognized $32.8 million in thesix months ended June 30, 2007 from a prior sale of real estate where the formof continuing involvement which had initially precluded sale accounting andgain recognition was terminated. Sunrise's share of earnings and return oninvestment in unconsolidated communities decreased as there were norecapitalizations during the second quarter of 2008 compared to therecapitalization of two ventures in the second quarter of 2007 which resultedin a return on investment of $54.3 million.
These items are described in greater detail in the Company's 10-Q filingsunder the section "Management's Discussion and Analysis of Financial Conditionand Results of Operations."
Other Updates
-- In the third quarter of 2008, Health Care REIT, Inc. announced anagreement to acquire the 90% ownership interest in a venture held by a thirdparty for $643.5 million. Sunrise will retain its 10% ownership interest inthe venture and will continue to manage the properties. The acquisition priceincludes the assumption of approximately $309.0 million of existing non-recourse mortgage debt. Sunrise expects to receive a ca
