Sunrise Senior Living, McLean, Va., said it expects its financial restatement to reduce net income by an additional $10 million over a longer time period than the company reported previously. The post-acute provider said it expects its financial restatement to reduce net income by about $140 million for all periods between 1996 and 2005, an increase from the $130 million estimated reduction it announced in November for the all periods between 1999 to 2005.
This figure does not include the effect of stock-option adjustments and revenue related to the companys subsidiary Greystone Communities, a developer and manager of continuing-care retirement communities that it acquired in May 2005. Sunrise said it expects to reduce pretax income by about $14 million related to revenue from Greystone between May 2005 and December 2005 that was recognized as cash received under the contract, but that should have been recognized when the contract was completed.
Sunrise also expects to record a noncash compensation expense of about $44 million pretax$27 million after-taxrelated to stock-option adjustments announced in November 2007, according to a company news release. For the fourth quarter ended Dec. 31, 2007, the companys revenue rose 7% to $616.7 million from $576.1 million in the same period the previous year.
Although Sunrise said it continues to work toward meeting a March 17, 2008, filing deadline for its 2006 form 10-K, no assurance can be given that the company will be able to do so. If the company is unable to file by that date, the New York Stock Exchange is expected to initiate delisting of Sunrises common stock, Sunrise said. -- by Jessica Zigmond
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