Capital Senior Living Corporation Reports 25 Percent Increase in Third Quarter 1999 Earnings.

DALLAS--(BUSINESS WIRE)--Oct. 27, 1999--

Capital Senior Living Corporation (NYSE:CSU), one of the country's largest developers and operators of residential communities for senior adults, announced today that its financial results for third quarter 1999 reflect an increase in net income of 25 percent from the same period last year.

"We at Capital Senior Living Corporation are extremely pleased to continue meeting or exceeding expectations," James A. Stroud, Chairman of the Company, said. "Other companies in our peer group concentrate primarily on stand-alone assisted living and other specialty care. However, at Capital Senior Living Corporation, we provide a continuum of care with 82 percent of current operations and 92 percent of all new development focusing on the independent senior living market. We build and operate high-quality communities that are affordable for middle-income senior adults."

OPERATING AND FINANCIAL RESULTS

The Company completed its thirty-first consecutive profitable quarter Sept. 30, 1999, with revenues of $16.6 million and net income of $4.4 million, or 22 cents per share. This compares to revenues of $10.6 million and net income of $3.5 million, or 18 cents per share, for the same period in 1998.

For the nine months ended Sept. 30, 1999, the Company reported revenues of $48.0 million and net income of $12.2 million, or 62 cents per share on 19.7 million weighted-average shares outstanding. This compares to revenues of $28.1 million and net income of $7.9 million, or 40 cents per share, for the comparable period in 1998.

As of Sept. 30, 1999, the Company had $39.9 million in working capital, $21.9 million in cash and cash equivalents, and $116.7 million in shareholders' equity.

"We are very pleased with our financial results for the third quarter," Lawrence A. Cohen, the Company's Chief Executive Officer, said. "In addition to the 25 percent increase in net income for the quarter over the same quarter in 1998, we achieved a 57 percent increase in EBITDA for third quarter 1999 to $8.6 million from $5.5 million for the same period in 1998. Our strong financial performance results from a focused strategy that continues to be executed by our highly experienced management team."

HIGHLIGHTS FOR THE QUARTER

Company highlights for third quarter 1999 include:

-- Thirty-first consecutive quarter of profitability;

-- Net income of $4.4 million and net income per share of 22 cents;

-- Average occupancy rates on stabilized communities of 95 percent,

with average occupancy on all communities (including those in

lease up) of 90 percent;

-- Same community revenue increase of 7 percent over same period in

prior year and an increase of 9 percent on same community

operating income versus the same period in 1998;

-- Independent and assisted living community operating margins

averaged 43 percent;

-- Construction financing for new Waterford communities totaling $27

million with provisions allowing a multi-bank increase to $54

million through Bank of America;

-- Permanent financing totaling $46 million in fixed-rate, 10-year

mortgage loans to refinance five properties in California,

Florida, Michigan and Missouri through Lehman Brothers; and

-- The Waterford at Mesquite community opened in Texas with 33

additional Waterford communities under development or

construction.

ABOUT THE COMPANY

Capital Senior Living Corporation is one of the nation's largest developers and operators of residential communities for senior adults. The Company's operating philosophy emphasizes a continuum of care, which integrates independent living, assisted living and home care services, to provide residents the opportunity to age in place.

The Company currently owns and/or operates 37 communities in 18 states with a total capacity of approximately 6,000 residents. In the communities operated by the Company, 82 percent of residents live independently and 18 percent of residents require assistance with activities of daily living. The Company's stabilized occupancy rate is 95 percent and the average resident age is 84.

At third quarter's end, 39 communities were under construction or development, including 33 new Waterford communities, which will have a total capacity of approximately 5,600 residents. In addition, 10 existing communities were being expanded to accommodate approximately 600 residents. Upon completion of these developments and expansions, the Company is expected to increase its total capacity to approximately 12,200 residents.

The forward-looking statements in this release are subject to certain risks and uncertainties that could cause results to differ materially, including, but not without limitation to, the Company's ability to find suitable acquisition properties at favorable terms, financing, licensing, business conditions, risks of downturns in economic condition generally, and satisfaction of closing conditions such as those pertaining to licensure. These and other risks are detailed in the Company's reports filed with the Securities and Exchange Commission.

For more information, contact Investor Relations Manager Veronica B. Marks at 972/770-5600. -0-

                   Capital Senior Living Corporation
                         Statements of Income


                      Three-Months Ended          Nine-Months Ended
                      ------------------          -----------------
                     Sept. 30,      Sept. 30,   Sept. 30,   Sept. 30,
                       1999          1998         1999        1998
                    (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)
                    -----------  -----------  -----------  -----------
Revenues:
Resident and
 Healthcare Revenue $10,304,371   $5,443,695 $ 30,815,664 $ 15,942,900
Rental and Lease
 Income                 992,832    1,073,421    3,187,874    3,204,391
Unaffiliated Management
 Services Revenue       640,789      604,333    1,983,042    1,812,136
Affiliated  Management
 Services Revenue       113,661      374,698      340,926    1,191,782
Unaffiliated
 Development Fees       354,604      153,529    1,202,103      931,800
Affiliated
 Development Fees     4,154,094    2,906,262   10,455,429    5,061,244
                      ---------    ---------    ---------    ---------
 Total Revenues      16,560,351   10,555,938   47,985,038   28,144,253

Expenses:
Operating Expenses    6,270,523    3,644,611   18,261,530   10,957,025
General and
 Administrative
 Expenses             2,130,434    1,433,166    6,486,385    4,858,546
Depreciation and
 Amortization         1,142,619      571,996    3,396,820    1,695,494
                      ---------    ---------    ---------    ---------
 Total Expenses       9,543,576    5,649,773   28,144,735   17,511,065
                      ---------    ---------    ---------    ---------

Income From
 Operations           7,016,775    4,906,165   19,840,303   10,633,188

Other Income (Expense):
Gain on Sale of
 Property               759,869           --      759,869          ---
Interest Income       1,797,880    1,207,146    5,190,252    3,403,035
Interest Expense     (1,898,749)    (187,836)  (4,867,279)    (547,724)
                      ---------    ---------    ---------    ---------
Income Before Income
 Taxes and Minority
 Interest in
 Consolidated
 Partnership          7,675,775    5,925,475   20,923,145   13,488,499
Provision for
 Income Taxes        (2,792,573)  (2,289,103)  (7,781,066)  (5,185,848)
                      ---------    ---------    ---------    ---------
Income Before Minority
 Interest in
 Consolidated
 Partnership          4,883,202    3,636,372   13,142,079    8,302,651
Minority Interest in
 Consolidated
 Partnership           (496,926)    (130,380)    (920,404)    (359,912)
                      ---------    ---------    ---------    ---------
Net Income           $4,386,276   $3,505,992 $ 12,221,675   $7,942,739
                      ---------    ---------    ---------    ---------
                      ---------    ---------    ---------    ---------

Net Income Per Share:
 Basic and Diluted     $   0.22     $   0.18      $  0.62         0.40
                      ---------    ---------    ---------    ---------
Weighted-Average
 Shares Outstanding  19,717,347   19,717,347   19,717,347   19,717,347
                      ---------    ---------    ---------    ---------
                      ---------    ---------    ---------    ---------