NEWTON, Mass.--(BUSINESS WIRE)-- Five Star Quality Care, Inc. (NYSE Amex: FVE) today announced its financial results for the quarter and nine months ended September 30, 2009.

Third Quarter 2009 Financial Highlights:

Third Quarter 2009 Operating Highlights (Senior Living Communities):

Year to Date Financial Highlights:

Other Highlights:

During the third quarter, we purchased and retired $15.6 million par value of our outstanding Notes for $12.1 million, plus accrued interest, and recorded a $3.0 million gain, net of related unamortized costs, on the early extinguishment of debt. In October 2009, we purchased and retired an additional $800,000 par value of the Notes for $638,000. We funded these purchases principally from cash received in connection with the lease realignment agreement we entered into with Senior Housing Properties Trust (Senior Housing) on August 4, 2009.

On October 1, 2009, we commenced leasing from Senior Housing a continuing care retirement community with a total of 259 independent, assisted living and skilled nursing units that Senior Housing purchased from an unrelated party.

Conference Call:

On November 2, 2009 at 5:00 p.m. Eastern Daylight Time, Bruce J. Mackey Jr., President and Chief Executive Officer, and Francis R. Murphy, III, Chief Financial Officer, will host a conference call to discuss the third quarter and nine month financial results. Following the Company's remarks, there will be a question and answer period.

The conference call telephone number is (866) 416-5346. Participants calling from outside the United States and Canada should dial (913) 981-5596. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through 8:00 p.m. Eastern Daylight Time Monday, November 9th. To hear the replay, dial (719) 457-0820. The replay pass code is 1239436.

A live audio webcast of the conference call will also be available in a listen only mode on the Company's web site at www.fivestarseniorliving.com. Participants wanting to access the webcast should visit the Company's web site about five minutes before the call. The archived webcast will be available for replay on the Company's web site for about one week after the call.

About Five Star Quality Care, Inc.:

Five Star Quality Care, Inc. is a senior living and healthcare services company. Five Star owns or leases and operates 206 senior living communities with 21,953 living units located in 30 states. These communities include independent living, assisted living and skilled nursing communities. Five Star also operates five institutional pharmacies and two rehabilitation hospitals. Five Star is headquartered in Newton, Massachusetts.

Interest and other expense

Unrealized gain (loss) on investments in trading securities

Unrealized gain (loss) on UBS put right related to auction rate securities

Equity in losses of Affiliates Insurance Company

Gain on early extinguishment of debt

Gain on sale of available for sale securities

Impairment of investments in available for sale securities

Income (loss) from continuing operations before income taxes

(Provision) benefit for income taxes

Income (loss) from continuing operations

Loss from discontinued operations

UBS secured revolving credit facility related to auction rate securities

UBS secured revolving credit facility related to auction rate securities

Convertible senior notes

Shareholders' equity (35,436,064 and 32,205,604 shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively)

Senior living wages and benefits as a % of senior living revenues

Other senior living operating expenses as a % of senior living revenues

(2) Community expenses equal senior living wages and benefits and other senior living operating expenses as shown on our consolidated statement of operations.

Senior living wages and benefits as a % of senior living revenues

Other senior living operating expenses as a % of senior living revenues

(4) Community expenses equal senior living wages and benefits and other senior living operating expenses as shown on our consolidated statement of operations.

(2) Communities are categorized by the type of living units which constitute a majority of the total living units at the community.

(3) Includes 1,908 and 1,867 skilled nursing units in communities where assisted living and independent living services are the predominant services provided for the three and nine months ended September 30, 2009 and 2008, respectively.

(4) Includes 88 and 66 assisted living and independent living units in communities where skilled nursing services are the predominant services provided for the three and nine months ended September 30, 2009 and 2008, respectively.

(5) Other senior living revenues relates primarily to rehabilitation and other specialty service revenues provided at residential facilities and does not include revenues from institutional pharmacy or rehabilitation hospital operations.

FIVE STAR QUALITY CARE, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

Earnings before interest, taxes, depreciation and amortization, or EBITDA, and EBITDA excluding certain items are not financial measures determined according to generally accepted accounting principles, or GAAP. We consider EBITDA and EBITDA excluding certain items to be a meaningful disclosure because we believe that the inclusion of these non-GAAP financial measures may help investors to gain a better understanding of changes in our core operating results, and can also help investors who wish to make comparisons between us and other companies on both a GAAP and a non-GAAP basis. EBITDA and EBITDA excluding certain items as presented may not, however, always be comparable to amounts calculated by other companies. These non-GAAP financial measures are used by management to evaluate financial performance and resource allocation for our communities and for us as a whole and for comparing such performance to that of prior periods and to the performance of our competitors. This information should not be considered as an alternative to net income or any other financial operating or performance measure established by GAAP. Reconciliation of income from continuing operations to EBITDA and EBITDA excluding certain items, for the three and nine months ended September 30, 2009 and 2008 is as follows:

securities

auction rate securities

securities

to auction rate securities

sale securities