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):
November 9, 2005 (November 3, 2005)
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 November 3, 2005, a joint venture entity owned 20% by us and 80% by
Denver Lowry Senior Housing, LLC, an affiliate of CNL Capital Corp., entered
into a $25.5 million construction loan with GMAC Commercial Mortgage Bank in
order to finance the development of a rental continuing care retirement
community in Denver, Colorado. The total development cost of the project is
estimated to be approximately $38.0 million. The remainder of the development
cost will be funded by proportional capital contributions to the joint venture
entity from us and the CNL affiliate. We will act as the developer of the
project and will manage the community pursuant to a long-term management
agreement. We also agreed to provide an operating deficits guaranty for the
benefit of GMAC, under which we may be required to fund certain of the joint
venture's operating deficits. In the event that we are required to fund any such
operating deficits, the amounts so funded will be treated as advances by us to
the joint venture and will be required to be repaid prior to any other
distributions being made to the members of the joint venture.
The loan from GMAC to the joint venture is evidenced by a loan agreement
and a promissory note, and is secured by a first mortgage lien. The loan matures
on December 1, 2008, and the joint venture has two one-year extension options.
The outstanding principal balance of the loan will bear interest at a variable
rate equal to LIBOR plus 2.75%. The joint venture will be required to make
monthly payments of interest only through the scheduled maturity date. If the
joint venture exercises its extension options, it will also be required to make
monthly principal payments (based upon a 25 year amortization schedule) during
the extension period(s).
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
development of the project and the project's 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 complete the development of the project and integrate the community
into our operations, (ii) the risk that the joint venture entity will incur
operating deficits which we will be required to fund, (iii) the risk that we
will be unable to improve our results of operations, increase cash flow and
reduce expenses, (iv) the risks associated with adverse market conditions of the
senior housing industry and the United States economy in general, (v) the risk
associated with our significant debt and lease obligations, and (vi) the risk
factors described in our Annual Report on Form 10-K/A for the year ended
December 31, 2004 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 November 9, 2005, 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 November 9, 2005
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: November 9, 2005
EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press Release dated November 9, 2005