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Amica Mature Lifestyles Announces Second Quarter Results for Fiscal 2011 and an Increase in Quarterly Dividend

Wednesday, January 12, 2011

Amica Mature Lifestyles Announces Second Quarter Results for Fiscal 2011 and an Increase in Quarterly Dividend08:30 EST Wednesday, January 12, 2011VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 12, 2011) - Amica Mature Lifestyles Inc. ("Amica" or the "Company") (TSX:ACC), a leader in the management, marketing, design, development and ownership of luxury housing and services for mature lifestyles, is pleased to announce the Company's operating and financial results for the three and six month periods ended November 30, 2010. FINANCIAL HIGHLIGHTS Three Months Ended November 30, 2010 A review of the financial results for the three month period ended November 30, 2010 ("Q2/11") compared to the three month period ended November 30, 2009 ("Q2/10"), reflects the following:consolidated revenues increased $3.4 million to $13.7 million; mature same community(1) MARPAS(2) increased by 3.1%; net income attributable to Amica shareholders increased by $0.6 million to $0.2 million; EBITDA(3) increased by $1.0 million to $3.5 million; basic and diluted net earnings per share attributable to Amica shareholders increased $0.03 to $0.01; Cash Flow From Operations(4) increased $0.2 million to $1.9 million with basic and fully diluted per share amounts unchanged at $0.10; FFO(5) increased by 37% to $2.3 million from $1.7 million resulting in a $0.02 increase in basic and fully diluted per share FFO to $0.12; and AFFO(5) increased by 36% to $2.1 million from $1.6 million resulting in a $0.01 increase in basic and fully diluted per share AFFO to $0.11. Not included in net earnings or Cash Flow From Operations for Q2/11 are $0.19 million (Q2/10 - $0.26 million) in management, design and marketing fees and $0.46 million (Q2/10 - $0.36 million) in interest and guarantee fees credited to the co-tenancy investments. Under equity accounting, these amounts are netted against the Company's co-tenancy investments and reported in cash flow from investing activities until the properties are considered to be income-producing.Six Months Ended November 30, 2010 A review of the financial results for the six month period ended November 30, 2010 ("YTD 2011") compared to the six month period ended November 30, 2009 ("YTD 2010") reflects the following:consolidated revenues increased $4.2 million to $24.8 million; mature same community MARPAS increased by 2.3%; net income attributable to Amica shareholders increased by $2.1 million to $1.7 million; EBITDA increased by $0.6 million to $5.4 million; basic and diluted net earnings per share attributable to Amica shareholders increased $0.11 to $0.09; Cash Flow From Operations increased $0.4 million to $3.1 million with a $0.01 decrease in basic and fully diluted per share amounts to $0.16; FFO increased by 3% to $3.2 million from $3.1 million; AFFO increased by 4% to $2.9 million from $2.8 million; and Basic and fully diluted FFO and AFFO per share both decreased by $0.02 per share to $0.17 and $0.15, respectively. Not included in net earnings or Cash Flow From Operations for YTD 2011 are $0.34 million (YTD 2010 - $0.62 million) in management, design and marketing and $1.0 million (YTD 2010 - $0.7 million) in interest and guarantee fees credited to the Company's co-tenancy investments. Mr. Colin Halliwell, Amica's Chief Operating Officer commented, "Despite a marketplace that continues to be challenging, I am very pleased with the progress we are making on the occupancy and MARPAS fronts. Through the hard work of our people, we have now seen monthly year-over-year MARPAS increases in our mature same communities for 11 consecutive months and quarterly occupancy levels in the 91% to 92% range. Our new communities also continue to make good progress, with Amica at Bayview Gardens, which opened in June 2010, already at 37% occupancy including pending move-ins. Without compromising the brand standards and service excellence to our residents, our communities have also continued to exercise good expense management which has further contributed to the improved Cash Flow From Operations during this quarter."Mr. Samir Manji, Amica's Chairman, President & CEO, commented, "We are pleased with the continued progress made on the execution of our shift in strategy whereby, while we continue to maintain our brand manager business model, we believe increasing our ownership position in some of our mature communities will enable us to strengthen our asset base and benefit from the revenues, operating results and cash flow generated by these communities. Our second quarter results for fiscal 2011 demonstrated this as we achieved good growth in our Cash Flow From Operations. We believe that fiscal 2011 has the potential to be a defining year for Amica and its shareholders based on this shift in strategy, combined with the improved conditions in most of the markets that we operate in that are translating into stronger occupancies and improved financial results. During the economic downturn in late 2008 and into 2009, we made some hard decisions related to maintaining our standards in the day-to-day operations of our communities. Those same decisions are proving to be instrumental in the turnaround we are seeing, combined with the fact that rent levels continue to strengthen in our most of our mature communities. All of our people are focused on ensuring we continue to execute on all fronts so that we can maintain the reputation we have established for our brand and to strengthen our financial results further in the second half of our fiscal year and beyond." DISCUSSION OF FINANCIAL RESULTS Three Months Ended November 30, 2010Earnings from Management Operations in Q2/11 decreased by $0.05 million to $0.4 million (Q2/10 – $0.45 million). Compared to Q2/10, Management Operation revenues remained unchanged at $1.6 million and general and administrative expenses increased by 5% to $1.2 million (Q2/10 – $1.1 million). Management Operation revenues for Q2/11 and Q2/10 are summarized as follows:(Expressed in thousands of Canadian dollars)Q2/11Q2/10Management fees from 100% owned communities481459Management fees from less than 100% owned properties1,013813Design and marketing fees114328Total Management Operations Revenues1,6081,600The 25% increase in management fees from less than 100% owned properties is attributable to increases in occupancy and MARPAS for mature communities, the opening of new communities (Amica at Whitby in November 2009, Amica at Bayview Gardens in June 2010 and Amica at Windsor in July 2010) and the increase in occupancy of communities in lease-up.Earnings from Ownership and Corporate Operations in Q2/11 increased by approximately $1.1 million to $3.1 million (Q2/10 – $2.0 million).Retirement communities operating revenues increased 40% to $12.9 million (Q2/10 - $9.2 million). The increase in Q2/11 retirement communities operating revenues is primarily attributable to the consolidation of the operating results of Amica at West Vancouver for the period August 1, 2010 to November 30, 2010 and Amica at City Centre for the period August 17, 2010 to November 30, 2010 – these revenues were $3.2 million in Q2/11 (Q2/10 - $nil). Mature same community MARPAS for Q2/11 increased 3.1% compared to Q2/10 due to higher occupancy levels and community focus on ancillary revenue opportunities. Overall occupancy in Amica's mature same communities at the end of Q2/11 was 92.5%, compared to 90.7% at the end of Q2/10. Retirement communities operating expenses increased by 35% to $8.3 million (Q2/10 - $6.2 million). The increase in Q2/11 retirement communities operating expenses is primarily attributable to the consolidation of the operating results of Amica at West Vancouver for the period August 1, 2010 to November 30, 2010 and Amica at City Centre for the period August 17, 2010 to November 30, 2010 – these expenses were $2.1 million in Q2/11 (Q2/10 - $nil). Corporate and ownership expenses increased by 39% to $0.66 million (Q2/10 - $0.47 million) principally due to: professional fees, including IFRS conversion costs ($127k increase Q2/11 vs Q2/10); increased stock-based compensation ($60k increase Q2/11 vs Q2/10); and investor relations ($21k increase Q2/11 vs Q2/10).Interest expense increased by 25% to $2.25 million (Q2/10 - $1.8 million), principally due to the inclusion of interest expense for Amica at City Centre and Amica at West Vancouver upon consolidation.Cash Flow From Operations for Q2/11 increased 11% to $1.9 million compared to $1.7 million for Q2/10. Other changes in non-cash operating working capital items provided $0.6 million in Q2/11 as compared to $2.2 million used in Q2/10. The primary sources of non-cash operating working capital items in Q2/11 were a $1.0 million decrease in accounts receivable, and a $0.2 million decrease in prepaid expenses, which were partially offset by a $0.3 million decrease in accounts payable and accrued liabilities and a $0.3 million increase in income taxes receivable. FFO for Q2/11 increased by 37% to $2.3 million compared to $1.7 million for Q2/10, principally due to increase in earnings from Ownership and Corporate Operations.AFFO for Q2/11 increased by 36% to $2.1 million compared to $1.6 million for Q2/10, principally due to the increase in Q2/11 FFO.Basic and fully diluted FFO and AFFO per share increased by $0.02 and $0.01 to $0.12 and $0.11, respectively.Six Months Ended November 30, 2010Earnings from Management Operations for YTD 2011 decreased by $0.3 million to $0.4 million (YTD 2010 – $0.7 million). Management Operation revenues decreased by 2% to $3.0 million for YTD 2011 (YTD 2010 - $3.1 million) and general and administrative expenses increased by 10% to $2.6 million (YTD 2010 – $2.35 million). Management Operation revenues for YTD 2011 and YTD 2010 are summarized as follows:(Expressed in thousands of Canadian dollars)YTD 2011YTD 2010Management fees from 100% owned communities951913Management fees from less than 100% owned properties1,9591,592Design and marketing fees114577Total Management Operations Revenues3,0243,082The decrease in Management Operation revenues is primarily due to lower design and marketing fees from new developments under construction in YTD 2011. This decrease was partially offset by an increase in management fees from less than 100% owned properties – this increase is attributable to increases in occupancy and MARPAS for mature communities, the opening of new communities (Amica at Whitby in November 2009, Amica at Bayview Gardens in June 2010 and Amica at Windsor in July 2010) and the increase in occupancy of communities in lease-up. Going forward, the Company will earn marketing bonuses on two projects that are currently in lease-up (Amica at Bayview Gardens and Amica at Windsor). Additionally, the Company can earn design and marketing fees on four projects currently in pre-development (Amica at Oakville, Amica at Richmond Hill, Amica at Aspen Woods and the Amica at Swan Lake expansion). The increase in general and administrative expenses for YTD 2011 compared to YTD 2010 was principally due to increased compensation including: annual bonuses ($61k increase), wage increases ($263k increase) and stock based compensation ($99k increase), which was partially offset by increased corporate recoveries from co-tenancies.Earnings from Ownership and Corporate Operations in YTD 2011 increased by approximately $0.9 million to $4.9 million (YTD 2010 – $4.0 million).Retirement communities operating revenues increased 25% to $23.1 million for YTD 2011 (YTD 2010 - $18.5 million). The increase in YTD 2011 retirement communities operating revenues is primarily attributable to the consolidation of the operating results of Amica at West Vancouver for the period August 1, 2010 to November 30, 2010 and Amica at City Centre for the period August 17, 2010 to November 30, 2010 – these revenues were $4.0 million in YTD 2011 (YTD 2010 - $nil). Also contributing to the increase in YTD 2011 retirement communities operating revenues was increases in occupancy and MARPAS for mature communities.Mature same community MARPAS for YTD 2011 increased 2.3% compared to YTD 2010 due to higher occupancy levels. Overall occupancy in Amica's mature same communities at the end of Q2/11 was 92.5% (Q2/10 – 90.7%), compared to 91.3% at the end of Q4/10 (Q4/09 – 90.8%).Retirement communities operating expenses increased by 26% to $15.3 million (YTD 2010 - $12.2 million). The increase in YTD 2011 retirement communities operating expenses is primarily attributable to the consolidation of the operating results of Amica at West Vancouver for the period August 1, 2010 to November 30, 2010 and Amica at City Centre for the period August 17, 2010 to November 30, 2010 – these expenses were $2.6 million in YTD 2011 (YTD 2010 - $nil). Also contributing to the increase in YTD 2011 retirement communities operating expenses were increases in same community expenses consisting primarily of compensation (wages, salaries and annual bonuses), increased corporate recoveries and food costs. Corporate and ownership expenses increased by 20% to $1.4 million (YTD 2010 - $1.2 million) principally due to: professional fees, including IFRS conversion costs ($127k increase), compensation including: salaries, wages and benefits ($111k increase), and stock based compensation ($59k increase). These increases were partially offset by decreases in other areas including lower capital taxes (ceased July 2010).Interest expense increased by 11% to $4.0 million (YTD 2010 - $3.6 million), principally due to the inclusion of interest expense for Amica at City Centre and Amica at West Vancouver upon consolidation. In YTD 2011 an unrealized loss of $0.3 million was incurred in respect of an interest rate swap on two floating rate mortgages on a 100% owned property compared to an unrealized loss of $0.1 million in YTD 2010. Assuming the Company holds these mortgages and the interest rate swaps for their full terms any unrealized losses/gains will reverse themselves and the Company will not incur any gain or loss in respect of the interest rate swaps.Interest and other income decreased by $0.3 million to $0.7 million (YTD 2010 - $1.0 million). The Amica at City Centre and Amica at West Vancouver business combinations were achieved in stages (i.e. the Company owned 34% and 45.19% equity interests respectively in these investments prior to the Q1/11 transactions), as such, the acquisition-date fair value of the Company's pre-acquisition equity interests in these entities was determined to be $4.2 million compared to their combined carrying value of $1.9 million under the equity method of accounting, resulting in a gain of $2.3 million. This gain was recognized in Q1/11. Cash Flow From Operations for YTD Fiscal 2011 increased 13% to $3.1 million compared to $2.75 million for YTD Fiscal 2010. Other changes in non-cash operating working capital items used $0.2 million in YTD Fiscal 2011 as compared to $3.0 million in YTD Fiscal 2010. The primary uses of other changes in non-cash operating working capital items in YTD Fiscal 2011 were a $1.1 million decrease in accounts payable and accrued liabilities, and a $0.6 million increase in current income taxes receivable, which were partially offset by a $1.6 million decrease in accounts receivable. FFO for YTD Fiscal 2011 increased by 3% to $3.2 million compared to $3.1 million for YTD Fiscal 2010, principally due to Q2/11 increase in earnings from Ownership and Corporate Operations.AFFO for YTD Fiscal 2011 increased by 4% to $2.9 million from $2.8 million. Basic and fully diluted FFO and AFFO per share both decreased $0.02 per share to $0.17 and 0.15, respectively, principally due to the shares issued in Q3/10 in an equity financing. COMMUNITY UPDATE Overall occupancy in the Company's mature communities at November 30, 2010 was 92.5%, an increase of 1.2% from 91.3% at May 31, 2010 and an increase of 1.8% from 90.7% at November 30, 2009. Mature same community MARPAS increased by 2.3% for the six month period ended November 30, 2010 compared to the same period the prior year and is up 1.2% compared to May 31, 2010. The following is an update on the lease-up in Amica's new communities: Amica at Westboro Park (opened September 2008) has 63.7% occupancy (May 31, 2010: 50.7%), which is anticipated to increase to 68.1% following 6 additional net pending move-ins. Net pending move-ins reflects suites that have been reserved with a deposit made for the reservation, less suites for which notice of termination has been received. Amica at Thornhill (opened November 2008) has 55.9% occupancy (May 31, 2010: 44.8%), which is anticipated to increase to 61.4% following an additional 8 net pending move-ins. Amica at London (opened March 2009) has 42.2% occupancy (May 31, 2010: 30.4%), which is anticipated to increase to 47.2% following an additional 8 net pending move-ins. Amica at Whitby (opened November 2009) has 35.0% occupancy (May 31, 2010: 20.4%), which is anticipated to increase to 43.1% following an additional 11 net pending move-ins. Amica at Bayview Gardens (opened June 2010) has 30.8% occupancy, which is anticipated to increase to 37.0% following an additional 9 net pending move-ins. Amica at Windsor (opened July 2010) has 17.9% occupancy, which is anticipated to increase to 20.1% following an additional 4 net pending move-ins. The Company also has a 4.4% ownership interest in the condominiums that form part of the Amica at Bayview Gardens development. Construction was completed on the 101 condominium units in the fourth quarter of Fiscal 2010 and as of November 30, 2010 approximately seventy-six per cent (76%) of the units have been sold and the sales closed. Of note is that 100% of the construction financing provided by HSBC for the condominium development has been retired, thereby de-risking this development. Additionally, there is now only $0.5 million in debt in priority to the Company's loan, bringing the Company closer to repayment of its loan and receiving distributions. Purchasers of the condominiums pay fees for the use of the services and amenities in the adjoining Amica at Bayview Gardens rental residence. The Company is evaluating the opportunity to commence construction in calendar 2011 for one or more of the developments currently in pre-development. The Company's business and growth strategy contemplates the development of further luxury senior residence properties. This relates to the Company's overall objective to generate stronger revenues in its ownership operations and Management Operations, which collectively contribute to the overall earnings and cash flow. The Company's current policy is to have committed construction financing in place before commencing construction of new luxury seniors residences.FINANCIAL POSITION The Company's consolidated cash and cash equivalents balance at November 30, 2010 was $2.1 million compared to $8.2 million at May 31, 2010. The $6.2 million decrease is primarily attributable to:$2.9 million cash provided by operations after changes in non-cash working capital items; $4.8 million cash used in investing activities, principally due to: $3.6 million used in the acquisition of additional ownership interests in Amica at West Vancouver and Amica at City Centre; and $1.1 million in net loan advances; and $4.2 million cash used in financing activities, principally due to: $8.3 million in mortgage principal payments including $6.8 million on repayment of the Amica at The Balmoral Club mortgage; $2.3 million in dividends paid; partially offset by $6.2 million in drawings on the demand operating loan. In August 2010, the Company obtained a $20 million demand operating loan facility secured by the Amica at Somerset House property, a 100% Company owned community. In March 2010, the Company had used $13.8 million of its cash and cash equivalents to pay out the maturing mortgage on Amica at Somerset House. As at November 30, 2010, the balance drawn on the loan is approximately $6.2 million; in Q2/11 the Company used the operating loan to repay the Amica at The Balmoral Club maturing mortgage. In November 2010 the Company entered into a commitment for $5.79 million in CMHC financing for this property with interest to be at 3.46% for a term of 5 years. Proceeds of this mortgage financing are intended to be used to pay down the demand operating loan.THIRD QUARTER DIVIDENDThe Company's Board of Directors has approved a quarterly dividend of $0.085 per share on all issued and outstanding common shares which will be payable on March 15, 2011, to shareholders of record on February 28, 2011. This represents a 21% increase to the quarterly dividend from $0.07 per share to $0.085 per share. RESULTS CONFERENCE CALL Amica has scheduled a conference call to discuss the results on Wednesday, January 12th, 2011 at 10:00 am Pacific Time (1:00 pm Eastern Time). To access the call, dial (647) 438-4398 (Local/International access) or 1-866-971-7629 (North American toll-free access). To access a replay of the call, which will be available until January 15th, 2011, dial (416) 915-1035 or toll-free 1-866-245-6755 (Passcode: 926336). A slide presentation to accompany management's comments during the conference call will be available. To view the slides, access Amica's website at www.amica.ca and click on "Investor Relations" – "Webcasts". Please log on at least 15 minutes before the call commences. The unaudited interim consolidated financial statements of the Company for the three and six month period ended November 30, 2010 and the management's discussion and analysis are available on SEDAR at www.sedar.com and available on the Company's website at www.amica.ca. FINANCIAL HIGHLIGHTSCONSOLIDATED BALANCE SHEET HIGHLIGHTSNovember 30, 2010May 31, 2010(Expressed in thousands of Canadian dollars)$$ASSETSProperties and co-tenancy investments211,077144,510Cash and cash equivalents2,0608,212Mortgages, loans, other receivables, and other assets30,18532,620Total assets243,322185,342LIABILITIESMortgages and other debt payable157,301103,714Payables and accrued liabilities7,9936,745Future income taxes6,1995,491Total liabilities171,493115,950EQUITYShare capital and contributed surplus78,91778,225Deficit(10,774)(9,994)Shareholders' equity68,14368,231Non-controlling interest3,6861,161Total equity71,82969,392OPERATING HIGHLIGHTS3 Months Ended November 30,6 Months Ended November 30,(Expressed in thousands of Canadian dollars, except per share amounts)2010200920102009$$$$CONSOLIDATED REVENUES13,70610,29724,77020,539MANAGEMENT OPERATIONS:Revenues1,6081,6003,0243,082General and administrative expenses(1,207)(1,148)(2,583)(2,351)401452441731OWNERSHIP AND CORPORATE OPERATIONS:Retirement communities operating revenues12,8669,22023,10518,499Loss from equity-accounted investments(15)(47)(90)(78)Distributions from cost-accounted investments397010714112,8909,24323,12218,562Expenses:Retirement communities operating(8,329)(6,179)(15,341)(12,218)Corporate and ownership(656)(472)(1,393)(1,162)Fees paid to and reported in management operations(807)(593)(1,466)(1,183)3,0981,9994,9223,999EARNINGS (LOSS):EBITDA3,4992,4515,3634,730Net earnings (loss) and comprehensive income (loss) attributable to:Non-controlling interests(60)(28)(111)(63)Amica shareholders240(353)1,721(366)Basic and diluted earnings (loss) per share attributable to Amica shareholders0.01(0.02)0.09(0.02)Weighted average basic number of shares19,23316,42219,21416,400Weighted average diluted number of shares19,42416,42219,34216,400CASH FLOW:Cash Flow From Operations1,9091,7193,1122,751Basic and diluted Cash Flow From Operations per share0.100.100.160.17Weighted average basic number of shares19,23316,42219,21416,400Weighted average diluted number of shares19,42416,47319,34216,426FUNDS FROM OPERATIONS and ADJUSTED FUNDS FROM OPERATIONSFunds From Operations2,3401,7083,2173,133Basic and diluted Funds From Operations per share0.120.100.170.19Adjusted Funds From Operations2,1481,5742,9352,813Basic and diluted Adjusted Funds From Operations per share0.110.100.150.17Weighted average basic number of shares19,23316,42219,21416,400Weighted average diluted number of shares19,42416,47319,34216,426ABOUT AMICA MATURE LIFESTYLES INC. Amica Mature Lifestyles Inc., a Vancouver based public company, is a leader in the management, marketing, design, development and ownership of luxury housing and services for mature lifestyles. There are 25 Amica Wellness & Vitality™ Residences, including three in pre-development. The common shares of Amica are traded on the Toronto Stock Exchange under the symbol "ACC". For more information, visit www.amica.ca. Forward-Looking InformationThis news release contains "forward-looking information" within the meaning of applicable securities laws ("forward-looking statements").These forward-looking statements are made as of the date of this MD&A and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as otherwise required by law. Users of forward-looking statements are cautioned that actual results may vary from forward-looking statements contained herein. Forward-looking statements include, but are not limited to, statements regarding the Company's growth prospects; the number of new developments it will undertake; the opportunity to acquire existing qualified residences; commencing construction on one or more new developments in calendar 2011; the number of suites/condominium units that will be available for lease/sale; future occupancy rates; the Company's business model and strategy going forward; anticipated future revenues and financial results; future growth and value for shareholders; MARPAS and operating income; expected future financing opportunities, the ability of the Company to refinance or extend mortgages on favorable terms; the Company's plan to utilize proceeds from a new Amica at The Balmoral Club mortgage to pay down the Company's demand operating loan; the holders of two mortgages not taking any action in respect of the mortgages not meeting their debt service covenants; the potential to earn future marketing bonuses and design and marketing fees; capital expenditures of $1.5 million for the remainder of Fiscal 2011; the Company's ability to fund operating and capital expenditures for at least 12 months; management of cash resources; the timing for payment of contractual obligations; dividends; the potential impact that International Financial Reporting Standards (IFRS) will have on the Company and the Company's plans for implementing IFRS and other similar statements concerning anticipated future events, conditions or results that are not historical facts. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".While the Company has based these forward-looking statements on its expectations about future events as at the date that such statements were prepared, the statements are not a guarantee of the Company's future performance and are subject to risks, uncertainties, assumptions and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such factors and assumptions include, amongst others, the effects of general economic and market conditions; actions by government authorities, including the granting of zoning and other approvals and permits; uncertainties associated with potential legal proceedings and negotiations, including negotiations with respect to construction financing and debt refinancing; and misjudgements in the course of preparing forward-looking statements. In addition, there are known and unknown risk factors which could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Known risk factors include, among others, risks related to dependence on the ability of Amica's co-tenancy participants to meet their obligations; interest rate volatility in the marketplace; job actions including strikes and labour stoppages; possible liability under environmental laws and regulations, relating to removal or remediation of hazardous or toxic substances on properties owned or operated by Amica; risks associated with new developments, including cost overruns and start-up losses; the ability of seniors to pay for Amica's services; regulatory changes; risks inherent in the ownership of real property; operational risks inherent in owning and operating residences; the risks associated with global events such as infectious diseases, extreme weather conditions and natural disasters; the availability of capital to finance growth or refinance debt as it comes due; Amica's ability to attract seniors with its services and keep pace with changing consumer preferences, as well as those factors discussed in the "Risks and Uncertainties" section of this MD&A and in Amica's Annual Information Form dated August 11, 2010, filed with the Canadian Securities Administrators and available at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements, or the material factors or assumptions used to develop such forward looking statements, will prove to be accurate. Accordingly, readers should not place undue reliance on forward-looking statements.1 Mature same communities: Effective June 1, 2009, mature same communities was defined to be mature communities that are classified as income-producing properties for thirteen months after the earlier of reaching 95% occupancy or 24 months of operation. 2 MARPAS is defined by the Company as Monthly Average Revenue Per Available Suite and includes non-consolidated communities and is equal to gross monthly revenues generated at the seniors residences divided by the number of suites available for rental. MARPAS is used by the Company to measure period-over-period performance of its properties.3 Earnings before interest, taxes, depreciation and amortization ("EBITDA") is equal to net earnings (loss) and comprehensive income (loss) before the following items: (i) interest expense; (ii) income tax expense (recovery); (iii) depreciation and amortization; (iv) interest and other income; (v) fees credited to investments; (vi) unrealized interest rate swap and foreign exchange gains/losses; (vii) write-down of deposits/investments; and (viii) gain on fair value adjustment of equity investments in business combinations. EBITDA is the same as earnings (loss) before other operating items as disclosed in the consolidated financial statements. EBITDA should not be considered as an alternative to net earnings (loss) or any other measure of performance prescribed by Canadian generally accepted accounting principles. EBITDA of Amica Mature Lifestyles Inc. may not be comparable to EBITDA used by other companies, which may be calculated differently. EBITDA is included because the Company's management believes it can be used to measure the Company's ability to service debt, fund capital expenditures and expand its business. See Note 1 to the Company's Management's Discussion and Analysis for the three and six months ended November 30, 2010 for a reconciliation of net earnings (loss) to EBITDA. 4 Cash Flow From Operations is a supplemental non-GAAP measure of operating performance and is equal to net earnings (loss) and comprehensive income (loss) adjusted for (i) stock-based compensation; (ii) depreciation and amortization; (iii) amortization of deferred financing charges and other; (iv) future income taxes (recovery); (v) cash distributions in excess of income (loss) from equity-accounted investments; (vi) accretion of discount on mortgage and loan receivable; (vii) unrealized interest rate swap and foreign exchange gains/losses; (viii) write-down of deposits/investments; and (ix) gain on fair value adjustment of equity investments in business combinations. Cash Flow From Operations may not be comparable to similar measures presented by other entities in the same industry. Management considers Cash flow From Operations to be a useful measure for reviewing the Company's operating and financial performance because, by excluding non-cash expenses and depreciation and amortization which can vary based on estimates of useful lives of real estate assets, Cash Flow From Operations can help to compare the operating performance of the Company between financial reporting periods and with other entities in the same industry. See Note 1 to the Company's Management's Discussion and Analysis for the three and six months ended November 30, 2010 for a reconciliation of net earnings (loss) to Cash Flow From Operations.5 Funds From Operations ("FFO") and Adjusted Funds From Operations ("AFFO") are supplementary financial measures widely used in the real estate industry and should not be considered as an alternative to net earnings (loss) and comprehensive income (loss) or any other measure prescribed under GAAP. While FFO and AFFO do not have any standardized meaning prescribed by GAAP, the Real Property Association of Canada ("REALpac") established a definition of FFO in its White Paper on funds from operations dated November 1, 2004 (as revised February 10. 2009), as follows: Funds From Operationsmeans net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of depreciable real estate and extraordinary items, plus depreciation and amortization, plus future income taxes and after adjustments for equity accounted for entities and non-controlling interests. Adjustments for equity accounted for entities and joint ventures and non-controlling interests are calculated to reflect funds from operations on the same basis as the consolidated properties.FFO is not intended by REALpac to be used as a measure of the cash generated by a reporting issuer nor of its dividend paying capacity.As applied by the Company, FFO is defined to be equal to the Company's net earnings (loss) and comprehensive income (loss) adjusted for (i) deprecation and amortization on real estate assets; (ii) future income taxes; (iii) adjustments for equity accounted for entities and non-controlling interests to reflect funds from operations on the same basis as consolidated properties; (iv) the write-down of deposits/investments; (vi) the gain on fair value adjustment of equity investments in business combinations; and (vii) fees and interest earned by the Company and credited to equity-accounted investments in respect of properties under development. REALpac has not established a definition of AFFO. As applied by the Company AFFO is defined as being FFO less maintenance capital expenditures. Maintenance capital expenditures are funded from operating cash flow and include expenditures that are not considered to add to productive capacity, and relate more to maintaining the existing earnings capacity of our property portfolio. In contrast, stabilizing and value enhancing capital expenditures are more discretionary in nature and more focused on increasing the productivity of the property, with the goal of increasing the FFO generated by our property portfolio.FFO and AFFO may not be comparable to similar measures presented by other entities in the same industry. Management considers FFO and AFFO to be useful measures for reviewing the Company's operating and financial performance because they can help to compare the operating performance of the Company between financial reporting periods and with other entities in the same industry. See Note 2 to the Company's Management's Discussion and Analysis for the three and six months ended November 30, 2010 for a reconciliation of net earnings (loss) to FFO and AFFO.FOR FURTHER INFORMATION PLEASE CONTACT: Mr. Art AyresAmica Mature Lifestyles Inc.Chief Financial Officer(604) 630-3473a.ayres@amica.caORMs. Alyssa WilliamsAmica Mature Lifestyles Inc.Manager, Investor Communications(604) 639-2171a.williams@amica.cawww.amica.ca