UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
March 6, 2006 (February 28, 2006)
AMERICAN RETIREMENT CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Tennessee 01-13031 62-1674303
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
111 Westwood Place, Suite 200
Brentwood, Tennessee 37027
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(Address of Principal Executive Offices) (Zip Code)
(615) 221-2250
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off- Balance Sheet Arrangement of a Registrant
On February 28, 2006, we completed the acquisition, through two
newly-formed joint ventures, of four senior living communities from affiliates
of Cypress Senior Living, Inc. for an aggregate purchase price of $146,286,500
(subject to customary closing adjustments), plus transaction expenses. The
communities are located in Arlington, Dallas and Ft. Worth, Texas and Leawood,
Kansas.
In order to consummate the acquisition, we assigned our rights in the
purchase agreement to two joint venture entities owned 20% by us and 80% by
affiliates of CNL Capital Investments Corp. Merrill Lynch Capital, a division of
Merrill Lynch Business Financial Services Inc., provided the joint ventures with
approximately $95.5 million of first mortgage financing for the acquisition,
which is evidenced by two credit and security agreements. The debt has a three
year term with two twelve month extension options and requires the payment of
interest only at a floating rate based upon one month LIBOR plus 2.10%. The
remainder of the purchase price was funded by proportional capital contributions
by the joint venturers.
At closing, we also entered into long-term management agreements pursuant
to which we agreed to manage the communities.
We will consolidate the operating results of the joint ventures during an
interim period until our venture partner completes its syndication of its equity
investment. Upon completion of the syndication, we expect to account for our
interest in the joint ventures under the equity method of accounting.
Risks Associated with Forward-Looking Statements
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This Current Report on Form 8-K contains certain forward-looking statements
within the meaning of the federal securities laws, which are intended to be
covered by the safe harbors created thereby. Those forward-looking statements
include all statements that are not historical statements of fact and those
regarding the intent, belief or expectations of us or our management, including,
but not limited to, all statements regarding our expectations concerning the
future financial performance or accounting treatment of the acquired communities
and their effect on our financial performance. All forward-looking statements
may be affected by certain risks and uncertainties, including without limitation
the following: (i) our ability to successfully integrate the Cypress portfolio
into our operations, (ii) the risk that we will be unable to improve our results
of operations, increase cash flow and reduce expenses, (iii) the risks
associated with adverse market conditions of the senior housing industry and the
United States economy in general, (iv) the risks associated with our debt and
lease obligations, and (v) the risk factors described in our Annual Report on
Form 10-K for the year ended December 31, 2005 under the caption "Risk Factors"
and in our other filings with the SEC.
Should one or more of those risks materialize, actual results could differ
materially from those forecasted or expected. Although we believe that the
assumptions underlying the forward-looking statements contained herein are
reasonable, any of these assumptions could prove to be inaccurate, and
therefore, there can be no assurance that the forward-looking statements
included in this Form 8-K will prove to be accurate. In light of the significant
uncertainties inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a representation by us
or any other person that our forecasts, expectations, objectives or plans will
be achieved. We undertake no obligation to publicly release any revisions to any
forward-looking statements contained herein to reflect events and circumstances
occurring after the date hereof or to reflect the occurrence of unanticipated
events.
Item 7.01. Regulation FD Disclosure
On March 6, 2006, we issued a press release describing the foregoing
transaction. A copy of the press release is furnished herewith as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
99.1 Press Release dated March 6, 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
AMERICAN RETIREMENT CORPORATION
By: /s/ Bryan D. Richardson
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Bryan D. Richardson
Executive Vice President - Finance
and Chief Financial Officer
Date: March 6, 2006
EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press Release dated March 6, 2006