Emeritus Corporation (AMEX: ESC), a national provider of assisted living and Alzheimer’s and related dementia care services to senior citizens, today announced its second quarter 2008 results.

Second Quarter 2008 Operating Highlights

• Quarter end occupancy of 87.8% versus 87.9% at March 31, 2008
• Average monthly revenue per unit increased to $3,372, or 5.4% annualized
• Operating income from continuing operations improved by $3.9 million

Granger Cobb, President and Co-Chief Executive Officer, stated, "We are very pleased with our second quarter results. After an initial dip during the quarter, our quarter-end occupancy was flat sequentially and our rate growth and expense management were solid. We have made significant progress on our business plan over the last few quarters and we remain confident that our systems implementation and oversight initiatives will result in improved occupancy and rate performance as we move forward over the next few quarters.”

Summary of 2008 Second Quarter Results

Total community revenues for the second quarter ended June 30, 2008, increased to $185.7 million from $184.7 million in the first quarter of 2008. Of the $1.0 million increase, approximately $2.5 million was due to an increase in the average monthly revenue per occupied unit. Average revenue per occupied unit increased to $3,372 from $3,327 in the first quarter of 2008, or an annualized increase of 5.4%. The impact from increased rates was offset by a decrease in revenue of approximately $1.5 million from a decline in occupancy. Average occupancy during the quarter was 86.4% versus 87.2% in the first quarter of 2008. The average number of move-ins remained stable throughout the quarter, but we experienced a higher than average number of move-outs during the beginning of the quarter. Occupancy rebounded by June 30, 2008 to 87.8%, essentially the same as March 31, 2008, occupancy of 87.9%.

Community operating expenses were $119.5 million in the second quarter of 2008, compared to $121.1 million in the first quarter of 2008. This decrease was primarily the result of a favorable professional liability insurance adjustment of $1.9 million in the second quarter of 2008.

General and administrative expenses were $14.7 million for the second quarter of 2008, and $14.6 million for the first quarter of 2008. General and administrative expenses as a percent of total operated community revenues (including revenues of managed communities) was 6.9% in the second quarter of 2008.

Operating income (loss) from continuing operations improved by $3.9 million from the first quarter of 2008 driven by revenue gains of $1.0 million, the favorable professional liability insurance adjustment of $1.9 million, and a reduction in depreciation expense of $1.2 million, primarily due to the buyout of capital leases during the quarter.

For the quarter ended June 30, 2008, Adjusted EBITDA was $29.4 million compared to $29.1 million for the first quarter of 2008, with the improvement primarily driven by the $1.0 million increase in revenues, offset by debt refinancing fees of $1.1 million in the second quarter, included in the “Other, net” line item in the consolidated statements of operations.

As of June 30, 2008, the Company had approximately $37.2 million of cash and cash equivalents, and had no outstanding borrowings under the Company’s $25.0 million line-of-credit facility. The Company retired its convertible debentures in the amount of $10.5 million, plus accrued interest of $327,000, on July 1, 2008, using funds classified as “restricted cash in escrow” on the balance sheet as of June 30, 2008. On June 30, 2008, total assets were $2.1 billion, including $1.6 billion of net investments in properties, total long-term debt was $1.5 billion, including capital lease obligations, and shareholders’ equity was $410.7 million.

Conference Call:

The Company will host a conference call on August 7, 2008, at 5:00 P.M. Eastern Time to discuss its financial results for the second quarter ended June 30, 2008. Hosting the call will be Mr. Daniel Baty, Chairman and Co-Chief Executive Officer, Mr. Granger Cobb, President and Co-Chief Executive Officer, and Mr. Raymond Brandstrom, Chief Financial Officer. The conference call will be webcast live over the internet from the Company’s web site at www.emeritus.com under the investors section.

The conference call can also be accessed by dialing (888) 819-8012 or for international participants (913) 312-0668. A replay of the conference call will be available after 8:00 P.M. Eastern Time on August 7, 2008, until midnight Eastern Time, August 14, 2008, and can be accessed by dialing (888) 203-1112 or for international participants (719) 457-0820 and entering the passcode 4449688.

Non-GAAP Financial Measure

Adjusted EBITDA/EBITDAR are financial measures of operating performance that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). We believe these non-GAAP measure are useful in identifying trends in our day-to-day performance because they exclude items that are of little or no significance to operations and provide indicators to management of progress in achieving optimal operating performance. In addition, these measures are used by many research analysts and investors to evaluate the performance and the value of companies in our industry. We strongly urge you to review the reconciliation of net loss to Adjusted EBITDA/EBITDAR provided below, along with our consolidated balance sheets, statements of operations, and cash flows. We define Adjusted EBITDA/EBITDAR and provide other information about these non-GAAP measures in our quarterly report on Form 10-Q.

The table below shows the reconciliation of net loss to Adjusted EBITDAR for the three and six months ended June 30, 2008 and 2007:

For a more detailed understanding of Emeritus, please refer to the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission on March 17, 2008, or visit the Company’s Internet site at www.emeritus.com to obtain a copy.

ABOUT THE COMPANY

Emeritus Corporation is a national provider of assisted living and Alzheimer’s and related dementia care services to seniors. Emeritus is one of the largest and most experienced operators of freestanding assisted living communities located throughout the United States. These communities provide a residential housing alternative for senior citizens who need help with the activities of daily living with an emphasis on assistance with personal care services to provide residents with an opportunity for support in the aging process. Emeritus operated, or had an interest in, 289 communities representing capacity for 24,809 units and approximately 29,600 residents in 36 states at June 30, 2008. Our common stock is traded on the American Stock Exchange under the symbol ESC, and its home page can be found on the Internet at www.emeritus.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: A number of the matters and subject areas discussed in this report that are not historical or current facts deal with potential future circumstances, operations, and prospects. The discussion of such matters and subject areas is qualified by the inherent risks and uncertainties surrounding future expectations generally, and also may materially differ from our actual future experience as a result of such factors as: the effects of competition and economic conditions on the occupancy levels in our communities; our ability under current market conditions to maintain and increase our resident charges in accordance with our rate enhancement programs without adversely affecting occupancy levels; increases in interest costs as a result of re-financings; our ability to control community operation expenses, including insurance and utility costs, without adversely affecting the level of occupancy and the level of resident charges; our ability to generate cash flow sufficient to service our debt and other fixed payment requirements; our ability to find sources of financing and capital on satisfactory terms to meet our cash requirements to the extent that they are not met by operations, uncertainties related to professional liability claims; and uncertainties about our ability to successfully integrate our company after the merger with Summerville Senior Living, Inc. We have attempted to identify, in context, certain of the factors that we currently believe may cause actual future experience and results to differ from our current expectations regarding the relevant matter or subject area. These and other risks and uncertainties are detailed in our reports filed with the Securities and Exchange Commission (SEC), including “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2007.