##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    December 31,
    2009oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file
    number: 1-13445
      Capital Senior Living
    Corporation
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

75-2678809(I.R.S. Employer
    Identification No.)14160 Dallas Parkway, Suite 300
    Dallas, Texas(Address of principal
    executive offices)

75254(Zip
    Code)   Registrants telephone number, including area code:
 (972) 770-5600
      Securities registered pursuant to Section 12(b) of the
    Act:
  Title of each Class

Name of each Exchange on Which RegisteredCommon Stock, $.01 par value

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE




---



##### 





CAPITAL
    SENIOR LIVING CORPORATION
  TABLE OF
    CONTENTS
   
 PageNumberPART IItem 1.


Business


2Item 1A.


Risk Factors


17Item 1B.


Unresolved Staff Comments


24Item 2.


Properties


24Item 3.


Legal Proceedings


24Item 4.


Submission of Matters to a Vote of Security
    Holders


24PART IIItem 5.


Market for Registrants Common Equity;
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


25Item 6.


Selected Financial Data


28Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


28Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


48Item 8.


Financial Statements and Supplementary Data


48Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


48Item 9A.


Controls and Procedures


48Item 9B.


Other Information


49PART IIIItem 10.


Directors and Executive Officers of the
    Registrant


49Item 11.


Executive Compensation


49Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


49Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


49Item 14.


Principal Accountant Fees and Services


49PART IVItem 15.


Exhibits, Financial Statement Schedules


50Signatures


51Index to Financial Statements


F-1Index to ExhibitsEX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   1




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##### Table of Contents



PART I  ITEM 1.
    BUSINESS.  Overview
      Website
  www.capitalsenior.com Form 10-K, Form 10-Q, Form 8-K,
  Industry
    Background
    24-hour
     2




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##### Table of Contents



Consumer
    Preference
      Demographics
    Senior
    Affluence
    Reduced
    Reliance on Family Care
   3




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Restricted
    Supply of Nursing Beds
  start-up
  Cost-Containment
    Pressures
    Operating
    Strategy
    Provide
    a Broad Range of Quality Personalized Care
    Offer
    Services Across a Range of Pricing Options
   4




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Improve
    Occupancy Rates
  on-site
  Improve
    Operating Efficiencies
    Emphasize
    Employee Training and Retention
  on-site
  Senior
    Living Services
     5




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Independent
    Living Services
    24-hour
  Assisted
    Living Services
      Personal Care Services.
  Support Services.
  Supplemental Services.
   6




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##### Table of Contents



Continuing
    Care Retirement Community Services
  24-hour-per-day
  Home
    Care Services
    Operating
    Communities
    Resident Capacity(1)





CommencementCommunity



Units


IL


AL


CCRC


Total


Ownership(2)


of Operations(3)Owned:Canton Regency

Canton, OH


291











357



357



100
%


03/91Gramercy Hill

Lincoln, NE


148



62



103







165



100
%


10/98Heatherwood

Detroit, MI


158



185











185



100
%


01/92Independence Village

East Lansing, MI


151



161











161



100
%


08/00Independence Village

Peoria, IL


158



166











166



100
%


08/00Independence Village

Raleigh, NC


165



177











177



100
%


08/00Independence Village

Winston-Salem, NC


156



161











161



100
%


08/00Sedgwick Plaza

Wichita, KS


144



134



35







169



100
%


08/00Waterford at Columbia

Columbia, SC


120



141











141



100
%


11/00Waterford at Deer Park

Deer Park, TX


120



144











144



100
%


11/00Waterford at Edison Lakes

South Bend, IN


120



141











141



100
%


12/00Waterford at Fairfield

Fairfield, OH


120



140











140



100
%


11/00Waterford at Fort Worth

Fort Worth, TX


151



176











176



100
%


06/00 7




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##### Table of Contents



Resident Capacity(1)





CommencementCommunity



Units


IL


AL


CCRC


Total


Ownership(2)


of Operations(3)Waterford at Highland Colony

Jackson, MS


120



143











143



100
%


11/00Waterford at Huebner

San Antonio, TX


120



135











135



100
%


04/99Waterford at Ironbridge

Springfield, MO


119



142











142



100
%


06/01Waterford at Mansfield

Mansfield, OH


119



142











142



100
%


10/00Waterford at Mesquite

Mesquite, TX


154



176











176



100
%


09/99Waterford at Pantego

Pantego, TX


120



143











143



100
%


12/00Waterford at Plano

Plano, TX


136



109



60







169



100
%


12/00Waterford at Shreveport

Shreveport, LA


117



136











136



100
%


03/99Waterford at Thousand Oaks

San Antonio, TX


120



135











135



100
%


05/00Wellington at Arapaho

Richardson, TX


137



112



60







172



100
%


05/02Wellington at North Richland Hills, TX

North Richland Hills, TX


119



139











139



100
%


01/02Wellington at Oklahoma City

Oklahoma City, OK


120



143











143



100
%


11/003,503



3,443



258



357



4,058Leased:Ventas:Amberleigh

Buffalo, NY


267



387











387



N/A



01/92Cottonwood Village

Cottonwood, AZ


163



131



58







189



N/A



03/91Crown Pointe

Omaha, NE


132



162











162



N/A



08/00Georgetowne Place

Fort Wayne, IN


162



242











242



N/A



10/05Harrison at Eagle
    Valley4

Indianapolis, IN


124



138











138



N/A



03/91Rose Arbor

Maple Grove, MN


137



92



84







176



N/A



06/06Towne Centre

Merrillville, IN


327











358



358



N/A



03/91Villa Santa Barbara

Santa Barbara, CA


125



64



61







125



N/A



08/00West Shores

Hot Springs, AR


137



131



42







173



N/A



08/00Whitley Place

Keller, TX


47







65







65



N/A



02/08HCP:Atrium of Carmichael

Sacramento, CA


152



155











155



N/A



01/92Covenant Place of Abilene

Abilene, TX


50







55







55



N/A



08/04Covenant Place of Burleson

Burleson, TX


74







80







80



N/A



08/04Covenant Place of Waxahachie

Waxahachie, TX


50







55







55



N/A



08/04Crescent Place

Cedar Hill, TX


80







85







85



N/A



11/05Crescent Point

Cedar Hill, TX


112



134











134



N/A



08/04Crosswood Oaks

Sacramento, CA


121



127











127



N/A



01/92Good Place

North Richland Hills, TX


72







80







80



N/A



08/04Meadow Lakes

North Richland Hills, TX


120



145











145



N/A



08/04Tesson Heights

St. Louis, MO


184



134



72







206



N/A



10/98Veranda Club

Boca Raton, FL


141



182











182



N/A



01/92Charlotte Square

Charlotte, NC


73







125







125



N/A



12/06Chesapeake Place

Chesapeake, VA


87







153







153



N/A



12/06Greenville Place

Greenville, SC


87







153







153



N/A



12/06Myrtle Beach Estates

Myrtle Beach, SC


80







142







142



N/A



12/063,104



2,224



1,310



358



3,892 8




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##### Table of Contents



Resident Capacity(1)





CommencementCommunity



Units


IL


AL


CCRC


Total


Ownership(2)


of Operations(3)Affiliates:SHPII/CSL:Libertyville

Libertyville, IL


197



191



55







246



5
%


03/01Naperville

Naperville, IL


193



188



48







236



5
%


01/01Summit

Summit, NJ


88







98







98



5
%


11/00Trumbull

Trumbull, CT


150



136



42







178



5
%


09/00SHPIII/CSL:Levis Commons

Toledo, OH


146



151



45







196



10
%


04/09Miami

Miamisburg, OH


146



151



45







196



10
%


08/08Richmond Heights

Richmond Heights, OH


141



152



45







197



10
%


04/09Midwest I:The Waterford at Ames

Ames, IA


59







122







122



11
%


02/06The Waterford at Miracle Hills

Omaha, NE


64







70







70



11
%


03/06The Waterford at Roxbury Park

Omaha, NE


62







70







70



11
%


02/06The Waterford at Van Dorn

Lincoln, NE


68







84







84



11
%


02/06The Waterford at Woodbridge

Plattsmouth, NE


40







45







45



11
%


02/06Midwest II:Keepsake Village of Columbus

Columbus, IN


42







48







48



15
%


08/06The Hearth at Prestwick

Avon, IN


132







150







150



15
%


08/06The Hearth at Windermere

Fishers, IN


126







150







150



15
%


08/061,654



969



1,117







2,086Managed:Harding Place

Searcy, AR


115



148











148



N/A



08/048,376



6,784



2,685



715



10,184     (1)
    
    Independent living (IL) residences, assisted living (AL)
    residences and continuing care retirement community (CCRC) beds.(2)
    
    Those communities shown as 5% owned consist of the
    Companys ownership of 5% of the member interests in
    SHPII/CSL (as defined below). Those communities shown as 10%
    owned consist of the Companys ownership of 10% of the
    member interests in SHPIII/CSL (as defined below). Those
    communities shown as 11% owned consist of the Companys
    ownership of approximately 11% of the member interests in
    Midwest I (as defined below). Those communities shown as 15%
    owned consist of the Companys ownership of 15% of the
    member interests in Midwest II (as defined below).(3)
    
    Indicates the date on which the Company acquired or commenced
    operating the community. The Company operated certain of its
    communities pursuant to management agreements prior to acquiring
    interests in or leasing the communities.(4)
    
    The Companys home care agency is
    on-site at
    The Harrison at Eagle Valley community.  Management
    Contracts
   9




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Development
    Agreements
     10




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##### Table of Contents



Growth
    Strategies
      Organic
    Growth
  lease-up on-site
  Expansion
    and Conversion of Existing Communities
  and/or
  Pursue
    Strategic Acquisitions
    Pursue
    Management Agreements
   11




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Expand
    Referral Networks
    Operations
  Centralized
    Management
      Regional
    Management
      Community-Based
    Management
  day-to-day
  and/or
 12




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Quality
    Assurance
    Resident and Residents Family Input. day-to-day On-site on-site on-site,
  Regular Community Inspections. and/or
  Independent Service Evaluations. on-site
  Marketing
  on-site on-site On-site on-site
 13




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on-site
  on-site
  on-site
  Government
    Regulation
           14




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Competition
   15




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Employees
    Executive
    Officers of the Registrant
    Name

Age

Position(s) with the CompanyLawrence A. Cohen


56


Chief Executive Officer and Interim Chairman of the BoardKeith N. Johannessen


53


President and Chief Operating OfficerRalph A. Beattie


60


Executive Vice President and Chief Financial OfficerRob L. Goodpaster


56


Vice President  National MarketingDavid W. Beathard, Sr.


62


Vice President  OperationsDavid R. Brickman


51


Vice President, Secretary and General CounselGlen H. Campbell


65


Vice President  DevelopmentGloria Holland


42


Vice President  FinanceRobert F. Hollister


54


Property Controller   Lawrence A. Cohen
  Keith N. Johannessen
  Ralph A. Beattie
  Rob L. Goodpaster
 16




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##### Table of Contents



David W. Beathard, Sr.
  David R. Brickman
  Glen H. Campbell
  Gloria M. Holland
  Robert F. Hollister,
  Subsidiaries
  Form 10-K
  ITEM 1A.
    RISK
    FACTORS.  and/or
  We
    have significant debt and our failure to generate cash flow
    sufficient to cover required interest and principal payments
    could result in defaults of the related debt.
   17




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We
    have significant operating lease obligations and our failure to
    generate cash flows sufficient to cover these lease obligations
    could result in defaults under the lease
    agreements.
    Our
    failure to comply with financial covenants and other
    restrictions contained in debt instruments and lease agreements
    could result in the acceleration of the related debt or lease or
    in the exercise of other remedies.
      
    require us to meet specified financial tests at the subsidiary
    company level, which include, but are not limited to, tangible
    net worth requirements;
    require us to meet specified financial tests at the community
    level, which include, but are not limited to, occupancy
    requirements and lease coverage tests; and
    require consent for changes in control of us.    We
    will require additional financing and/or refinancings in the
    future and may issue equity securities.
  and/or
 18




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##### Table of Contents



Any
    future floating rate debt and lease obligations could expose us
    to rising interest rates.
    We
    cannot assure that we will be able to effectively manage our
    growth.
  and/or
  We
    cannot assure that we will attempt to, or be able to, acquire
    additional senior living communities, expand existing senior
    living communities, or develop new senior living
    communities.
      Termination
    of resident agreements and resident attrition could affect
    adversely our revenues and earnings.
   19




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We
    largely rely on private pay residents and circumstances that
    adversely affect the ability of the elderly to pay for our
    services could have a material adverse effect on
    us.
    We are
    subject to risks related to third-party management
    agreements.
  start-up
  Failure
    to perform our obligations under our joint venture arrangements
    could have a material adverse effect on us.
     20




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##### Table of Contents



The
    senior living services industry is very competitive and some
    competitors may have substantially greater financial resources
    than us.
  not-for-profit
  We
    rely on the services of key executive officers and the loss of
    these officers or their services could have a material adverse
    effect on us.
    A
    significant increase in our labor costs could have a material
    adverse effect on us.
  day-to-day
  There
    is an inherent risk of liability in the provision of personal
    and health care services, not all of which may be covered by
    insurance.
   21




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We are
    subject to government regulations and compliance, some of which
    are burdensome and some of which may change to our detriment in
    the future.
         22




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We may
    be subject to liability for environmental damages.
  clean-up
  Anti-takeover
    provisions in our governing documents, governing law, material
    agreements and our shareholder rights plan may discourage, delay
    or prevent a merger or acquisition that our stockholders may
    consider favorable or prevent the removal of our current board
    of directors and management.
   23




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##### Table of Contents



ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS.    ITEM 2.
    PROPERTIES.    and/or
  ITEM 3.
    LEGAL
    PROCEEDINGS.    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS.   24




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##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES.  (a)
    Market
    Price of and Dividends on the Registrants Common Equity
    and Related Stockholder Matters.  Market
    Information and Holders
    2009


2008Year

High


Low


High


LowFirst Quarter

$
3.42


$
2.10


$
9.97


$
6.32Second Quarter


4.86



2.36



8.95



7.36Third Quarter


6.49



3.95



8.78



6.41Fourth Quarter


6.39



4.26



7.59



1.94   Dividends
    Securities
    Authorized for Issuance under Equity Compensation
    Plans
    Number of SecuritiesNumber of Securities to


Weighted-Average


Remaining Available forbe Issued Upon


Exercise Price of the


Future Issuance UnderExercise of Outstanding


Outstanding


Equity Compensation PlansOptions, Warrants and


Options, Warrants


(Excluding SecuritiesPlan Category

Rights


and Rights


Reflected in First Column )Equity compensation plans approved by security holders


642,120


$
4.34



1,869,375Equity compensation plans not approved by security holders










Total


642,120


$
4.34



1,869,375  25




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##### Table of Contents



Performance
    Graph
    COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
    Among Capital Senior Living Corporation, The S&P 500
    Index,
    And A Peer Group
  
  *
    $100 invested on 12/31/04 in stock or index, including
    reinvestment of dividends.
    Fiscal year ending December 31.  ©
   Cumulative Total Returns12/04

12/05

12/06

12/07

12/08

12/09Capital Senior Living Corporation


100.00



182.69



187.99



175.44



52.65



88.69S & P 500


100.00



104.91



121.48



128.16



80.74



102.11Peer Group


100.00



144.19



191.19



139.31



30.85



73.63     (b)
    Recent
    Sales of Unregistered Securities; Use of Proceeds from
    Registered Securities.   26




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##### Table of Contents



(c)
    Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers.  Regulation S-K.
  Total Number of


Approximate DollarShares Purchased as


Value of SharesAverage


Part of Publicly


that May Yet BeTotal Number of


Price Paid


Announced Plans or


Purchased Under thePeriod

Shares Purchased


per Share


Programs


Plans or ProgramsJanuary 1  September 30, 2009


349,800


$
2.67



349,800


$
9,065,571October 1  October 31, 2009














November 1  November 30, 2009














December 1  December 31, 2009














January 1  December 31, 2009 Total


349,800


$
2.67



349,800


$
9,065,571    27




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA.    At and for The Year Ended December 31,2009


2008


2007


2006


2005(In thousands, except per share data)Statements of Operations Data:Total revenues(1)

$
191,991


$
193,274


$
189,052


$
159,070


$
126,404Income from operations(2)


16,612



17,015



20,006



14,068



11,066Net income (loss)


2,759



3,724



4,360



(2,600
)


(5,354
)Net income (loss) per share:Basic income (loss) per share


0.10



0.14



0.17



(0.10
)


(0.21
)Diluted income (loss) per share

$
0.10


$
0.14


$
0.16


$
(0.10
)

$
(0.21
)Balance Sheet Data:Cash and cash equivalents

$
28,972


$
25,880


$
23,359


$
25,569


$
21,831Working capital(3)


18,796



13,799



12,919



15,331



10,860Total assets


380,503



388,120



390,053



394,488



434,051Long-term debt, excluding current portion


173,822



177,541



185,733



196,647



252,733Stockholders equity

$
158,130


$
155,149


$
150,157


$
144,084


$
145,415Other Data:Communities (at end of period)Owned or leased


50



50



49



48



36Joint ventures & managed


16



14



15



16



19Total


66



64



64



64



55Resident capacity:Owned or leased


7,950



7,701



7,636



7,551



6,247Joint ventures & managed


2,234



1,750



1,908



1,993



2,668Total


10,184



9,451



9,544



9,544



8,915     (1)
    
    Total revenues for 2005 were revised to include community
    reimbursement revenue. The amounts included as community
    reimbursement revenue were $21,174 for fiscal 2005, which had no
    impact on income from operations.(2)
    
    Income from operations for fiscal 2007, 2006 and 2005 was
    revised to reduce facility lease costs to include amortization
    of deferred gains on sales of assets of $3,243, $2,401, and $104
    respectively, which had no impact on net income.(3)
    
    Working capital for fiscal 2007 and 2006 was revised to
    reclassify capital replacement reserves and certain escrow
    deposits of $220 and $76, respectively, from current assets to
    other assets, which had no impact on total assets.  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS.  Certain information contained in this report constitutes
    Forward-Looking Statements within the meaning of
    Section 27A of the Securities Act of 1933, as amended, and
    Section 21E of the Securities Exchange Act of 1934, as
    amended, which can be identified by the use of forward-looking
    terminology such as may, will,
    would, intend, could,
    believe, expect, anticipate,
    estimate or continue or the negative
    thereof or other variations thereon or comparable terminology.
    The Company cautions readers that forward-looking statements,
 28




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##### Table of Contents



including, without limitation, those relating to the
    Companys future business prospects, revenues, working
    capital, liquidity, capital needs, interest costs, and income,
    are subject to certain risks and uncertainties that could cause
    actual results to differ materially from those indicated in the
    forward-looking statements, due to several important factors
    herein identified. These factors include the Companys
    ability to find suitable acquisition properties at favorable
    terms, financing, licensing, business conditions, risks of
    downturn in economic conditions generally, satisfaction of
    closing conditions such as those pertaining to licensure,
    availability of insurance at commercially reasonable rates, and
    changes in accounting principles and interpretations, among
    others, and other risks and factors identified from time to time
    in the Companys reports filed with the SEC.
  Overview
        Significant
    Financial and Operational Highlights
           29




---



##### Table of Contents



Management
    Agreements
        Lease
    Transactions
  10-20 years
     30




---



##### Table of Contents



Initial


Lease


DeferredNumber of


Value of




Lease


Acquisition


Gains / LeaseLandlord

Date of Lease

Communities


Transaction


Term

Rate(1)


Costs(2)


Concessions(3)Ventas

September 30, 2005


6


$
84.6


10 years
    (Two five-year renewals)


8
%

$
1.3


$
4.6Ventas

October 18, 2005


1



19.5


10 years
    (Two five-year renewals)


8
%


0.2



Ventas

March 31,2006


1



29.0


10 years
    (Two five-year renewals)


8
%


0.1



14.3Ventas

June 8, 2006


1



19.1


9.5 years
    (Two five-year renewals)


8
%


0.4



Ventas

January 31, 2008


1



5.0


10 years
    (Two five-year renewals)


7.75
%


0.2



HCP

May 1, 2006


3



54.0


10 years
    (Two ten-year renewals)


8
%


0.2



12.8HCP

May 31, 2006


6



43.0


10 years
    (Two ten-year renewals)


8
%


0.2



0.6HCP

December 1, 2006


4



51.0


10 years
    (Two ten-year renewals)


8
%


0.7



HCP

December 14, 2006


1



18.0


10 years
    (Two ten-year renewals)


7.75
%


0.3



HCP

April 11, 2007


1



8.0


10 years
    (Two ten-year renewals)


7.25
%


0.1



Subtotal






3.7



32.3Accumulated amortization






(1.3
)


Accumulated deferred gain recognized










(12.5
)Net lease acquisition costs/deferred gains/lease concessions as
    of December 31, 2009





$
2.4


$
19.8     (1)
    
    Initial lease rates are subject to conditional lease escalation
    provisions as forth in each lease agreement.(2)
    
    Lease acquisition costs are being amortized over the
    leases initial term.(3)
    
    Deferred gains of $31.7 million and lease concessions of
    $0.6 million are being recognized in the Companys
    statement of income as a reduction in facility rent expense over
    the leases initial term. Lease concessions relate to the
    HCP transaction on May 31, 2006.  Joint
    Venture Transactions
  Midwest I
    Transaction
    Midwest II
    Transaction
   31




---



##### Table of Contents



SHPII/CSL
    Transactions
    SHPIII/CSL
    Transactions
        CGIM
    Transaction
   32




---



##### Table of Contents



BRE/CSL
    Transactions
  10-year
  Community
    Refinancings and Other Debt Transactions
  10-month
  10-month
  10-month
    30-year
  25-year
 33




---



##### Table of Contents



25-year
  Recent
    Events
          Critical
    Accounting Policies
    Revenue
    Recognition
   34




---



##### Table of Contents



Investments
    in Joint Ventures
    Development
    Guarantees
    Assets
    Held for Sale
   35




---



##### Table of Contents



Lease
    Accounting
        Long-Lived
    Assets
      Income
    Taxes
     36




---



##### Table of Contents



Recently
    Issued Accounting Guidance
  105-10
  810-10
  860-10 ,
  855-10
  820-10
  805-10
 37




---



##### Table of Contents



260-10 03-6-1, 260-10.
  Results
    of Operations
    Year Ended December 31,2009


2008


2007$


%


$


%


$


%Revenues:Resident and healthcare revenue

$
171,194



89.2
%

$
172,025



89.0
%

$
167,563



88.6
%Unaffiliated management services revenue


72



0.0
%


194



0.1
%


1,591



0.8
%Affiliated management services revenue


2,698



1.4
%


4,882



2.5
%


3,117



1.7
%Community reimbursement income


18,027



9.4
%


16,173



8.4
%


16,781



8.9
%Total revenues


191,991



100.0
%


193,274



100.0
%


189,052



100.0
%Expenses:Operating expenses (exclusive of facility lease expense and
    depreciation and amortization shown below)


104,790



54.6
%


107,315



55.5
%


103,804



54.9
%General and administrative expenses


11,883



6.2
%


13,654



7.1
%


12,046



6.4
%Facility lease expense


25,872



13.4
%


25,057



13.0
%


23,811



12.6
%Provision for bad debts


344



0.2
%


556



0.3
%


330



0.2
%Stock-based compensation


1,201



0.6
%


1,036



0.5
%


979



0.5
%Depreciation and amortization


13,262



6.9
%


12,468



6.5
%


11,295



6.0
%Community reimbursement expense


18,027



9.4
%


16,173



8.4
%


16,781



8.9
%Total expenses


175,379



91.3
%


176,259



91.2
%


169,046



89.4
%Income from operations


16,612



8.7
%


17,015



8.8
%


20,006



10.6
%Other income (expense):Interest income


67



0.0
%


422



0.2
%


674



0.4
%Interest expense


(11,819
)


(6.2
)%


(12,217
)


(6.3
)%


(12,763
)


(6.8
)%Gain on sale of properties







%


681



0.4
%


108



0.1
%Write-down of assets held for sale







%


(134
)


(0.1
)%







%Write-off of deferred loan costs







%







%


(538
)


(0.3
)%Other income


107



0.1
%


270



0.1
%


(37
)


0.0
%Income before income taxes


4,967



2.6
%


6,037



3.1
%


7,450



3.9
%Provision for income taxes


(2,208
)


(1.2
)%


(2,313
)


(1.2
)%


(3,090
)


(1.6
)%Net income

$
2,759



1.4
%

$
3,724



1.9
%

$
4,360



2.3
%  38




---



##### Table of Contents



Year
    Ended December 31, 2009 Compared to the Year Ended
    December 31, 2008
  Revenues
    
    Resident and healthcare revenue decreased $0.8 million or
    0.5% primarily due to a decrease in average occupancy of 1.4%
    partially offset by an increase in average revenue collected of
    2.2% at the Companys consolidated communities.
    The decrease in affiliated management services revenue of
    $2.2 million or 44.7% primarily resulted from the Company
    no longer earning development and marketing fees from three
    joint venture communities that were under development during
    fiscal 2008.
    The decrease in unaffiliated management services revenue of
    $0.1 million primarily resulted from the management of one
    community owned by a third party during fiscal 2009 compared to
    two communities owned by third parties during fiscal 2008.
    Community reimbursement revenue is comprised of reimbursable
    expenses from non-consolidated communities that the Company
    operates under long-term management agreements.  Expenses
    
    Operating expenses decreased $2.5 million or 2.4% primarily
    due to a reduction of $2.1 million in independent living
    expenses, a reduction of $0.3 million in assisted living
    expenses, and a reduction of $0.3 million in insurance
    expense offset by an increase in healthcare expenses of
    $0.1 million. Decreases in independent living expenses
    primarily consisted of a decrease in labor and benefit costs of
    $0.7 million, a decrease in food costs of
    $0.5 million, a decrease in utilities costs of
    $0.2 million, and a net decrease of $0.7 million in
    other general independent living operating costs. Assisted
    living expenses decreased primarily due to a decrease in
    employee benefit costs. Insurance expense decreased due to an
    improved claims history which allowed for lower negotiated
    premium renewals during fiscal 2009. Healthcare expenses
    increased due to a net increase in other general healthcare
    operating costs.
    General and administrative expenses decreased $1.8 million
    or 13% primarily due to the write-off of accumulated due
    diligence costs of $0.6 million during fiscal 2008 related
    to a potential acquisition that the Company terminated and a
    reduction in corporate compensation of $1.2 million due to
    the reduction of corporate employees.
    Depreciation and amortization expense increased
    $0.8 million primarily as a result of an increase in
    depreciable assets at the Companys consolidated
    communities and leasehold improvements.
    Facility lease costs increased $0.8 million primarily due
    to contingent annual rental rate escalations for existing leases.
    Stock-based compensation increased $0.1 million during
    fiscal 2009 compared to fiscal 2008 primarily due to the award
    of additional restricted shares of common stock to certain
    employees of the Company.
    Community reimbursement expense represents payroll and
    administrative costs paid by the Company for the benefit of
    non-consolidated communities and joint ventures. 39




---



##### Table of Contents



Other
    income and expense
  
    Interest income reflects interest earned on the investment of
    cash balances and interest earned on escrowed funds. Interest
    income decreased $0.4 million primarily due to lower
    interest rates in fiscal 2009 compared to fiscal 2008.
    Interest expense decreased $0.4 million to
    $11.8 million in fiscal 2009 compared to $12.2 million
    in fiscal 2008. This decrease in interest expense primarily
    resulted from less debt outstanding during fiscal 2009 compared
    to fiscal 2008.
    Gain on sale of assets in fiscal 2008 represented gains
    associated with the sale of two parcels of land of
    $0.7 million and the amortization of a deferred gain on the
    sale of the Richmond Heights land in fiscal 2007 to a joint
    venture in which the Company has an equity interest, offset by a
    $0.1 million impairment adjustment on a parcel of land,
    located in Fort Wayne, Indiana, which is classified as held
    for sale.
    Other income (expense) in fiscal 2009 and 2008 relates to the
    Companys equity in the earnings/losses of unconsolidated
    affiliates, which represents the Companys share of the
    earnings or losses on its investments in joint ventures.  Provision
    for income taxes
    Net
    income
    Year
    Ended December 31, 2008 Compared to the Year Ended
    December 31, 2007
  Revenues
    
    Resident and healthcare revenue increased $4.4 million or
    2.7% from the addition of the Whitley Place community which was
    leased from HCP on January 31, 2008, combined with an
    increase in the average monthly rent of 4.0% at the
    Companys consolidated communities offset by a decrease in
    occupancy at the Companys consolidated communities of
    3.4%. The Company consolidated 50 communities in fiscal 2008
    compared to 49 communities in fiscal 2007. 40




---



##### Table of Contents




    Affiliated management services revenue increased
    $1.8 million due to an increase in development and
    pre-marketing fees. The Company earned development and
    pre-marketing fees on three communities under development of
    $2.5 million in fiscal 2008 compared to $0.9 in fiscal 2007.
    Unaffiliated management services revenue decreased
    $1.4 million due to the recovery of management fees of
    $0.4 million from Covenant, the reduction of a contingent
    note payable to Covenant of $0.9 million under the
    provisions of the CGIM purchase and sale agreement, and
    additional management fees of $0.1 million in fiscal 2007.
    The Company managed two communities owned by third parties
    throughout most of fiscal 2008 compared to three communities
    managed in fiscal 2007.
    Community reimbursement revenue is comprised of reimbursable
    expenses from non-consolidated communities that the Company
    operates under long-term management agreements.  Expenses
    
    Operating expenses increased $3.5 million or 3.4% due to an
    increase of $0.8 million from the addition of the Whitley
    Place community along with an increase in operating expenses at
    the Companys other communities of $2.7 million. The
    primary increases in operating expenses at the Companys
    other communities included an increase in labor and benefit
    costs of $1.9 million, an increase in utility costs of
    $0.5 million, an increase in provision for doubtful
    accounts of $0.2 million, along with an increase of
    $0.3 million in taxes.
    General and administrative expenses increased $1.6 million
    primarily due to $0.6 million in costs incurred for the
    retirement of the Chairman of the Company and separation of
    development department employees, write-offs of accumulated due
    diligence and expansion costs of $0.6 million related to
    potential acquisitions and developments that the Company
    terminated, along with an increase in other general and
    administrative costs of $0.4 million.
    Facility lease expenses increased $1.2 million primarily
    due to the Company leasing 25 senior living communities in
    fiscal 2008 compared to 24 senior living communities in fiscal
    2007 along with increases in contingent rent on certain leases.
    As of December 31, 2008, the Company had net deferred gains
    on sale/leaseback transactions of $23.2 million that are
    being recognized into income over their respective initial lease
    terms. Facility lease expenses incurred by the Company in fiscal
    2008 were offset by the recognition of deferred gains of
    $3.3 million.
    Stock-based compensation increased $0.1 million in fiscal
    2008 compared to fiscal 2007 primarily due to the award of
    additional restricted shares to certain employees and directors
    of the Company.
    Depreciation and amortization expense increased
    $1.2 million primarily as an increase in depreciation
    expense at the Companys 50 consolidated communities of
    $0.8 million along with depreciation expense of
    $0.4 million primarily related to leasehold improvements at
    the Companys corporate offices and new information systems
    which were put into service on January 1, 2008.
    Community reimbursement expense represents payroll and
    administrative costs paid by the Company for the benefit of
    non-consolidated communities and joint ventures.  Other
    income and expense
  
    Interest income results from interest earned on investment of
    cash balances and interest earned on escrowed funds. Interest
    income decreased $0.3 million primarily due to lower
    interest rates in the current fiscal year. 41




---



##### Table of Contents




    Interest expense decreased $0.6 million to
    $12.2 million in fiscal 2008 compared to $12.8 million
    in fiscal 2007. This decrease in interest expense primarily
    results from slightly lower debt outstanding during fiscal 2008
    compared to fiscal 2007 along with a lower average interest rate
    in the current fiscal year compared to the prior year.
    Gain on sale of assets in fiscal 2008 represented gains
    associated with the sale of two parcels of land of
    $0.7 million. Gain on sale of assets in fiscal 2007
    represents the recognition of a gain of $0.1 million
    related to the sale of a parcel of land located in Baton Rouge,
    Louisiana and a gain on the sale of a treasury rate lock
    agreement.
    Write-down of assets held for sale represented an impairment
    adjustment on a parcel of land, located in Fort Wayne,
    Indiana, of approximately $0.1 million recorded by the
    Company during the first quarter of fiscal 2008.
    Other expense/income in fiscal 2008 and 2007 related to the
    Companys equity in the earnings/losses of unconsolidated
    affiliates, which represents the Companys share of the
    earnings/losses on its investments in SHPII/CSL, Midwest I and
    Midwest II.  Provision
    for income taxes
    Net
    income
    Quarterly
    Results
    2009 Calendar QuartersFirst

Second

Third

Fourth(In thousands, except per share amounts)Total revenues

$
47,975


$
47,205


$
48,114


$
48,697Income from operations


4,286



3,759



4,219



4,348Net income


820



429



750



760Net income per share, basic

$
0.03


$
0.02


$
0.03


$
0.03Net income per share, diluted

$
0.03


$
0.02


$
0.03


$
0.03Weighted average shares outstanding, basic


26,346



26,187



26,222



26,275Weighted average shares outstanding, fully diluted


26,395



26,272



26,351



26,395   42




---



##### Table of Contents



2008 Calendar QuartersFirst

Second

Third

Fourth(In thousands, except per share amounts)Total revenues

$
48,517


$
49,032


$
47,717


$
48,008Income from operations


4,697



4,869



4,807



2,642Net income (loss)


1,490



1,246



1,202



(214
)Net income (loss) per share, basic

$
0.06


$
0.05


$
0.05


$
(0.01
)Net income (loss) per share, diluted

$
0.06


$
0.05


$
0.05


$
(0.01
)Weighted average shares outstanding, basic


26,341



26,349



26,396



26,423Weighted average shares outstanding, fully diluted


26,623



26,670



26,705



26,423   Liquidity
    and Capital Resources
    and/or and/or
    Year EndedDecember 31,2009

2008

2007Net cash provided by operating activities

$
19,635


$
15,012


$
12,453Net cash used in investing activities


(7,304
)


(7,372
)


(7,332
)Net cash used in financing activities


(9,239
)


(5,119
)


(7,331
)Net increase (decrease) in cash and cash equivalents

$
3,092


$
2,521


$
(2,210
)   Operating
    Activities
   43




---



##### Table of Contents



Investing
    Activities
    Financing
    Activities
    Community
    Refinancings and Other Debt Transactions
  10-month
  10-month
  10-month
   44




---



##### Table of Contents



30-year
  25-year
    25-year
  Lease
    Transactions
  10-20 years
     45




---



##### Table of Contents



Joint
    Ventures
  Midwest I
    Transactions
    Midwest II
    Transactions
    SHPII/CSL
    Transactions
    SHPIII/CSL
    Transactions
   46




---



##### Table of Contents



Disclosures
    About Contractual Obligations
    Less Than


One to


Four to


More ThanOne Year


Three Years


Five Years


Five Years


TotalLong-term debt, including interest expense

$
20,112


$
29,213


$
29,213


$
165,162


$
243,700Operating leases


29,570



59,044



58,026



34,709



181,349Total contractual cash obligations

$
49,682


$
88,257


$
87,239


$
199,871


$
425,049     Impact of
    Inflation
   47




---



##### Table of Contents



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.          Fair2010


2011


2012


2013


2014


Thereafter


Total


ValueLong-term debt:Fixed rate debt

$
9,347


$
4,090


$
4,317


$
4,618


$
4,908


$
155,889


$
183,169


$
170,393Average interest rate


6.0
%


6.0
%


6.0
%


6.0
%


6.0
%


6.0
%   ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA.  Form 10-K.
  ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURES.    ITEM 9A.
    CONTROLS
    AND PROCEDURES.  Effectiveness
    of Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
   48




---



##### Table of Contents



Rules 13a-15(f) 15d-15(f)
  Internal
    Controls Over Financial Reporting
  Managements
    Report On Internal Control Over Financial Reporting
  Rules 13a-15(f)
    Internal Control  Integrated Framework
  Form 10-K, Form 10-K. page F-29
  ITEM 9B.
    OTHER
    INFORMATION.   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERANCE.*  ITEM 11.
    EXECUTIVE
    COMPENSATION.*  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS.*  ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE.*  ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES.*    Form 10-K Form 10-K.
 49




---



##### Table of Contents



PART IV  ITEM 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES.    Financial Statements:
  page F-1.
  Financial Statement Schedules:
    Exhibits:
  page E-1
 50




---



##### Table of Contents



SIGNATURES      By:
    /s/  LAWRENCE
    A. COHEN        Signature

Title

Date/s/  LAWRENCE
    A. COHENLawrence
    A. Cohen

Chief Executive Officer and Vice Chairman of the Board
    (Principal Executive Officer)

March 11, 2010/s/  KEITH
    N. JOHANNESSENKeith
    N. Johannessen

President and Chief Operating Officer and Director

March 11, 2010/s/  RALPH
    A. BEATTIERalph
    A. Beattie

Executive Vice President and Chief Financial Officer (Principal
    Financial and Accounting Officer)

March 11, 2010/s/  HARVEY
    I. HANERFELDHarvey
    I. Hanerfeld

Director

March 11, 2010/s/  CRAIG
    F. HARTBERGCraig
    F. Hartberg

Director

March 11, 2010/s/  JILL
    M. KRUEGERJill
    M. Krueger

Director

March 11, 2010/s/  PETER
    L. MARTINPeter
    L. Martin

Director

March 11, 2010/s/  JAMES
    A. MOOREJames
    A. Moore

Director

March 11, 2010/s/  VICTOR
    W. NEEDr. Victor
    W. Nee

Director

March 11, 2010/s/  MICHAEL
    W. REIDMichael
    W. Reid

Director

March 11, 2010  51




---



##### Table of Contents



INDEX TO
    FINANCIAL STATEMENTS  PageConsolidated Financial Statements of Capital Senior Living
    CorporationReport of Independent Registered Public
    Accounting Firm, Ernst & Young LLP


F-2Consolidated Balance Sheets 
    December 31, 2009 and 2008


F-3Consolidated Statements of Income  For
    the years ended December 31, 2009, 2008 and 2007


F-4Consolidated Statements of Stockholders
    Equity  For the years ended December 31, 2009,
    2008 and 2007


F-5Consolidated Statements of Cash Flows 
    For the years ended December 31, 2009, 2008 and 2007


F-6Notes to Consolidated Financial Statements


F-7Report of Independent Registered Public
    Accounting Firm on Internal Control over Financial Reporting,
    Ernst & Young LLP


F-29  F-1




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm             
    F-2




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2009


2008(In thousands)ASSETSCurrent assets:Cash and cash equivalents

$
28,972


$
25,880Restricted cash


2,167



Accounts receivable, net


3,340



3,809Accounts receivable from affiliates


424



1,152Federal and state income taxes receivable


1,493



2,364Deferred taxes


1,208



1,052Assets held for sale


354



354Property tax and insurance deposits


8,632



8,632Prepaid expenses and other


4,010



5,930Total current assets


50,600



49,173Property and equipment, net


300,678



305,881Deferred taxes


7,781



11,062Investments in joint ventures


6,536



7,173Other assets, net


14,908



14,831Total assets

$
380,503


$
388,120LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
2,037


$
1,920Accrued expenses


12,287



13,661Current portion of notes payable


9,347



12,026Current portion of deferred income


6,838



6,174Customer deposits


1,295



1,593Total current liabilities


31,804



35,374Deferred income


16,747



20,056Notes payable, net of current portion


173,822



177,541Commitments and contingenciesShareholders equity:Preferred stock, $.01 par value:Authorized shares  15,000; no shares issued or
    outstanding






Common stock, $.01 par value:Authorized shares  65,000; issued and outstanding
    shares 26,945 and 26,679 in 2009 and 2008, respectively


273



267Additional paid-in capital


131,576



130,426Retained earnings


27,215



24,456Treasury stock, at cost  350 shares in 2009


(934
)


Total shareholders equity


158,130



155,149Total liabilities and shareholders equity

$
380,503


$
388,120    F-3




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  CONSOLIDATED
    STATEMENTS OF INCOME
  Year Ended December 31,2009


2008


2007(In thousands, except per share data)Revenues:Resident and health care revenue

$
171,194


$
172,025


$
167,563Unaffiliated management services revenue


72



194



1,591Affiliated management services revenue


2,698



4,882



3,117Community reimbursement revenue


18,027



16,173



16,781Total revenues


191,991



193,274



189,052Expenses:Operating expenses (exclusive of facility lease expense and
    depreciation and amortization expense shown below)


104,790



107,315



103,804General and administrative expenses


11,883



13,654



12,046Facility lease expense


25,872



25,057



23,811Provision for bad debts


344



556



330Stock-based compensation expense


1,201



1,036



979Depreciation and amortization


13,262



12,468



11,295Community reimbursement expense


18,027



16,173



16,781Total expenses


175,379



176,259



169,046Income from operations


16,612



17,015



20,006Other income (expense):Interest income


67



422



674Interest expense


(11,819
)


(12,217
)


(12,763
)Gain on sale of properties






681



108Write-down of assets held for sale






(134
)


Write-off of deferred loan costs










(538
)Other income (expense)


107



270



(37
)Income before provision for income taxes


4,967



6,037



7,450Provision for income taxes


(2,208
)


(2,313
)


(3,090
)Net income

$
2,759


$
3,724


$
4,360Per share data:Basic income per share

$
0.10


$
0.14


$
0.17Diluted income per share

$
0.10


$
0.14


$
0.16Weighted average shares outstanding  basic


26,257



26,377



26,205Weighted average shares outstanding  diluted


26,356



26,620



26,637    F-4




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY
  AdditionalCommon Stock


Paid-In


Retained


TreasuryShares


Amount


Capital


Earnings


Stock


Total(In thousands)Balance at January 1, 2007


26,424


$
264


$
127,448


$
16,372


$



$
144,084Exercise of stock options


81



1



501











502Restricted stock awards


91



1















1Stock-based compensation










979











979Excess tax benefits










231











231Net income














4,360







4,360Balance at December 31, 2007


26,596



266



129,159



20,732







150,157Exercise of stock options


38







258











258Restricted stock awards


45



1















1Stock-based compensation










1,036











1,036Excess tax benefits










(27
)










(27
)Net income














3,724







3,724Balance at December 31, 2008


26,679



267



130,426



24,456







155,149Exercise of stock options


59







254











254Restricted stock awards


557



6















6Stock-based compensation










1,201











1,201Excess tax benefits










(305
)










(305
)Treasury stock


(350
)














(934
)


(934
)Net income














2,759







2,759Balance at December 31, 2009


26,945


$
273


$
131,576


$
27,215


$
(934
)

$
158,130    F-5




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended December 31,2009


2008


2007(In thousands)Operating ActivitiesNet income

$
2,759


$
3,724


$
4,360Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation


13,251



12,432



11,218Amortization


11



36



77Amortization of deferred financing charges


335



338



386Amortization of deferred lease costs


371



367



350Amortization of debt discount






177



184Deferred income


(2,645
)


(2,112
)


(2,676
)Deferred income taxes


3,125



1,706



2,300Equity in the (earnings) losses of unconsolidated joint ventures


(107
)


(270
)


37Gain on sale of properties






(680
)


(108
)Provision for bad debts


344



556



330Write-off of deferred loan costs










538Write-down of assets held for sale






134



Reduction of contingent note payable










(921
)Stock compensation expense


1,201



1,036



979Changes in operating assets and liabilities:Accounts receivable


125



(1,133
)


276Accounts receivable from affiliates


728



(306
)


(62
)Property tax and insurance deposits






(772
)


(1,428
)Prepaid expenses and other


1,920



(1,404
)


(1,081
)Other assets


(794
)


1,102



19Accounts payable


117



719



(1,389
)Accrued expenses


(1,374
)


100



1,361Federal and state income taxes receivable/payable


566



(307
)


(1,843
)Customer deposits


(298
)


(431
)


(454
)Net cash provided by operating activities


19,635



15,012



12,453Investing ActivitiesCapital expenditures


(8,049
)


(8,065
)


(8,637
)Proceeds from sale of assets


1



1,397



2,319Investments in joint ventures


744



(704
)


(1,014
)Net cash used in investing activities


(7,304
)


(7,372
)


(7,332
)Financing ActivitiesProceeds from notes payable


1,926



4,645



44,617Repayments of notes payable


(8,324
)


(10,023
)


(51,869
)Increase in restricted cash


(2,167
)






Cash proceeds from the issuance of common stock


223



232



503Excess tax benefits on stock options exercised


37



27



231Purchases of treasury stock


(934
)






Cash paid to settle interest rate lock agreement










60Deferred financing charges paid










(873
)Net cash used in financing activities


(9,239
)


(5,119
)


(7,331
)Increase (decrease) in cash and cash equivalents


3,092



2,521



(2,210
)Cash and cash equivalents at beginning of year


25,880



23,359



25,569Cash and cash equivalents at end of year

$
28,972


$
25,880


$
23,359Supplemental DisclosuresCash paid during the year for:Interest

$
11,464


$
11,668


$
12,178Income taxes

$
530


$
2,179


$
2,532    F-6




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 December 31, 2009
  1.
    Organization    2.
    Summary
    of Significant Accounting Policies  Cash
    and Cash Equivalents and Restricted Cash
    Long-Lived
    Assets
    Assets
    Held for Sale
   F-7




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Investments
    in Joint Ventures
    Development
    Guarantees
    Income
    Taxes
   F-8




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Revenue
    Recognition
              Lease
    Accounting
   F-9




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Financial
    Instruments
    Credit
    Risk
    Advertising
    Net
    Income Per Share
   F-10




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2009


2008


2007Net income

$
2,759


$
3,724


$
4,360Net income allocated to unvested restricted shares


(67
)


(36
)


(51
)Undistributed net income allocated to common shares

$
2,692


$
3,688


$
4,309Weighted average shares outstanding  basic


26,257



26,377



26,205Effects of dilutive securities:Employee equity compensation plans


99



243



432Weighted average shares outstanding  diluted


26,356



26,620



26,637Basic income per share

$
0.10


$
0.14


$
0.17Diluted income per share

$
0.10


$
0.14


$
0.16       Treasury
    Stock
    Stock-Based
    Compensation
      Recently
    Issued Accounting Guidance
  105-10
 F-11




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    810-10
  860-10 ,
  855-10
  820-10
  805-10
  260-10 03-6-1,
 F-12




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  260-10.
  Segment
    Information
  property-by-property
  Use of
    Estimates and Critical Accounting Policies
    3.
    Transactions
    with Affiliates  Midwest
    I
    Midwest
    II
   F-13




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    SHPII/CSL
    SHPIII/CSL
    Miami
    SHPIII/CSL
    Richmond Heights
   F-14




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  SHPIII/CSL
    Levis Commons
    BRE/CSL
  10-year
  4.
    Facility
    Lease Transactions  10-20 years
 F-15




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Initial


Lease


DeferredDate of

Number of


Value of




Lease


Acquisition


Gains/LeaseLandlord

Lease

Communities


Transaction


Term

Rate(1)


Costs(2)


Concessions(3)Ventas

September 30, 2005


6


$
84.6


10 years
    (Two five-year renewals)


8
%

$
1.3


$
4.6Ventas

October 18, 2005


1



19.5


10 years
    (Two five-year renewals)


8
%


0.2



Ventas

March 31,2006


1



29.0


10 years
    (Two five-year renewals)


8
%


0.1



14.3Ventas

June 8, 2006


1



19.1


9.5 years
    (Two five-year renewals)


8
%


0.4



Ventas

January 31, 2008


1



5.0


10 years
    (Two five-year renewals)


7.75
%


0.2



HCP

May 1, 2006


3



54.0


10 years
    (Two ten-year renewals)


8
%


0.2



12.8HCP

May 31, 2006


6



43.0


10 years
    (Two ten-year renewals)


8
%


0.2



0.6HCP

December 1, 2006


4



51.0


10 years
    (Two ten-year renewals)


8
%


0.7



HCP

December 14, 2006


1



18.0


10 years
    (Two ten-year renewals)


7.75
%


0.3



HCP

April 11, 2007


1



8.0


10 years
    (Two ten-year renewals)


7.25
%


0.1



Subtotal


















3.7



32.3Accumulated amortization


(1.3
)


Accumulated deferred gain recognized






(12.5
)Net lease acquisition costs/deferred gains/lease concessions as
    of December 31, 2009

$
2.4


$
19.8     (1)
    
    Initial lease rates are subject to conditional lease escalation
    provisions as forth in each lease agreement.(2)
    
    Lease acquisition costs are being amortized over the
    leases initial term.(3)
    
    Deferred gains of $31.7 million and lease concessions of
    $0.6 million are being recognized in the Companys
    statement of income as a reduction in facility rent expense over
    the leases initial term. Lease concessions relate to the
    HCP transaction on May 31, 2006.     F-16




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   5.
    Property
    and Equipment    December 31,Asset Lives

2009


2008Land



$
17,787


$
17,787Land improvements

5 to 20 years


1,203



1,158Buildings and building improvements

10 to 40 years


329,451



326,654Furniture and equipment

5 to 10 years


15,126



14,683Automobiles

5 to 7 years


971



833Leasehold improvements

(1)


16,227



11,456Construction in progress

(2)


182



330380,947



372,901Less accumulated depreciation and amortization




80,269



67,020Property and equipment, net



$
300,678


$
305,881     (1)
    
    Leasehold improvements are amortized over the shorter of the
    useful life of the asset or the remaining lease term.(2)
    
    Construction in progress at December 31, 2009, includes
    $0.1 million of capitalized computer software development
    costs.    6.
    Other
    Assets    December 31,2009


2008Deferred loan costs, net

$
2,126


$
2,462Deferred lease costs, net


2,587



2,684Security and other deposits


10,195



9,674Other






11$
14,908


$
14,831  F-17




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   7.
    Accrued
    Expenses    December 31,2009


2008Accrued salaries, bonuses and related expenses

$
3,282


$
3,719Accrued property taxes


5,167



5,957Accrued interest


958



988Accrued health claims and workers comp


1,342



1,327Accrued professional fees


559



421Other


979



1,249$
12,287


$
13,661   8.
    Notes
    Payable    Average










Notes PayableMonthly


Net Book Value


Interest


Maturity

December 31,Lender

Payment


Of Collateral(1)


Rate


Date

2009


2008Freddie Mac

$
737


$
132,854



6.29
%

July 2015

$
103,475


$
105,545Capmark


242



43,592



5.46


August 2015


35,707



36,578Fannie Mae


178



33,746



5.91


May 2017


29,098



29,479Freddie Mac


60



7,961



5.75


March 2017


9,390



9,500Lehman


44



6,781



8.20


September 2009


4,643



4,745Insurance Financing




















2,688Insurance Financing


165







3.66


March 2010


491



595Insurance Financing


53







3.66


July 2010


365



437$
1,479



6.08
%(2)








183,169



189,567Less current portion
















9,347



12,026$
173,822


$
177,541     (1)
    
    The 25 facilities owned by the Company and encumbered by
    mortgage debt are provided as collateral under their respective
    loan agreements.(2)
    
    Weighted average interest rate on current debt outstanding.    2010


9,3472011


4,0902012


4,3172013


4,6182014


4,908Thereafter


155,889$
183,169  F-18




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  10-month
  10-month
  10-month
    30-year
  25-year
    25-year
 F-19




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            9.
    Equity  Preferred
    Stock
    Share
    Repurchases
   F-20




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    10.
    Stock-Based
    Compensation  Stock
    Options
      Outstanding atBeginning of











Outstanding


OptionsDecember 31, 2009

Year


Granted


Exercised


Forfeited


End of Year


ExercisableShares


895,334







59,245



193,969



642,120



642,120Weighted average price

$
4.83


$



$
3.67


$
6.81


$
4.34


$
4.34December 31, 2008Shares


937,334







38,000



4,000



895,334



895,334Weighted average price

$
4.87


$



$
6.06


$
3.69


$
4.83


$
4.83December 31, 2007Shares


1,026,682







81,348



8,000



937,334



932,334Weighted average price

$
4.80


$



$
4.07


$
3.40


$
4.87


$
4.87    F-21




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Options Outstanding


Options ExercisableWeightedAverageNumber


Remaining





Number


WeightedOutstanding


Contractual Life


Weighted Average


Exercisable


AverageRange of Exercise Prices

at 12/31/09


(Years)


Exercise Price


at 12/31/09


Exercise Price$1.80 to $1.80


209,224



1.71


$
1.80



209,224


$
1.80$2.00 to $3.37


12,000



2.80


$
2.83



12,000


$
2.83$3.63 to $3.63


107,976



0.13


$
3.63



107,976


$
3.63$3.69 to $4.50


13,600



3.17


$
3.93



13,600


$
3.93$4.85 to $4.85


7,000



4.38


$
4.85



7,000


$
4.85$5.30 to $5.30


1,500



4.83


$
5.30



1,500


$
5.30$5.90 to $5.90


9,000



5.36


$
5.90



9,000


$
5.90$6.30 to $6.30


263,820



3.92


$
6.30



263,820


$
6.30$6.63 to $6.63


6,000



4.08


$
6.63



6,000


$
6.63$10.97 to $10.97


12,000



6.35


$
10.97



12,000


$
10.97$1.80 to $10.97


642,120



2.60


$
4.34



642,120


$
4.34   Restricted
    Stock
      Outstanding atBeginning of











OutstandingYear


Issued


Vested


Forfeited


End of YearDecember 31, 2009Shares


251,632



561,625



159,050



5,000



649,207December 31, 2008Shares


256,858



66,000



50,586



20,640



251,632December 31, 2007Shares


283,445



113,000



117,857



21,730



256,858       Stock
    Based Compensation
   F-22




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      11.
    Income
    Taxes    Year Ended December 31,2009


2008


2007Current:Federal

$
(1,125
)

$
109


$
(81
)State


477



498



871Deferred:Federal


2,263



1,502



3,351State


593



204



(1,051
)$
2,208


$
2,313


$
3,090     Year Ended December 31,2009


2008


2007Tax provision (benefit) at federal statutory rates

$
1,689


$
2,053


$
2,533State income tax (benefit) expense, net of federal effects


706



463



(119
)Federal and state income tax return true up


(196
)


(222
)


667State effective rate changes






5



Other


9



14



9$
2,208


$
2,313


$
3,090  F-23




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2009


2008Deferred tax assets:Deferred gain on sale/leaseback transaction

$
8,092


$
9,143Depreciation and amortization


1,830



1,610Net operating loss carryforward (expiring up to 2027)


1,621



1,482Compensation costs


1,750



1,614Investment in partnerships


2,644



2,489Other


1,179



1,099Total deferred tax assets


17,116



17,437Deferred tax liabilities:Triad partnership interest


8,127



5,319Other






4Total deferred tax liabilities


8,127



5,323Total deferred tax assets, net

$
8,989


$
12,114Current deferred tax assets, net

$
1,208


$
1,052Long-term deferred tax assets, net


7,781



11,062Total deferred tax assets, net

$
8,989


$
12,114         12.
    Employee
    Benefit Plans   F-24




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   13.
    Contingencies    14.
    Fair
    Value of Financial Instruments    2009


2008Carrying





CarryingAmount


Fair Value


Amount


Fair ValueCash and cash equivalents

$
28,972


$
28,972


$
25,880


$
25,880Restricted cash


2,167



2,167







Notes payable


183,169



170,393



189,567



182,378     Cash and cash equivalents and Restricted
    cash:
  Notes payable:
    15.
    Investments
    in Joint Ventures    December 31,2009


2008Midwest I member interest

$
2,506


$
2,597Midwest II member interest


1,116



1,131SHPII/CSL member interests


1,141



1,177SHPIII/CSL Miami member interest


486



680SHPIII/CSL Richmond Heights member interest


646



777SHPIII/CSL Levis Commons member interest


641



811$
6,536


$
7,173   Midwest I:
 F-25




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Midwest II:
  SHPII/CSL:
  SHPIII/CSL Miami:
  SHPIII/CSL Richmond Heights:
 F-26




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    SHPIII/CSL Levis Commons:
  16.
    Allowance
    for Doubtful Accounts    December 31,2009


2008


2007Balance at beginning of year

$
1,541


$
1,043


$
807Provision for bad debts, net of recoveries


344



556



330Write-offs and other


(312
)


(58
)


(94
)Balance at end of year

$
1,573


$
1,541


$
1,043   17.
    Leases  10-20 years
     F-27




---



##### Table of Contents



CAPITAL
    SENIOR LIVING CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          2010

$
29,5702011


29,5352012


29,5092013


29,1412014


28,885Thereafter


34,709$
181,349   18.
    Subsequent
    Events           F-28




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm                 
    F-29




---



##### Table of Contents



INDEX TO
    EXHIBITS



The following documents are filed as a part of this report.
    Those exhibits previously filed and incorporated herein by
    reference are identified below. Exhibits not required for this
    report have been omitted. ExhibitNumber



Description3
.1



Amended and Restated Certificate of Incorporation of the
    Registrant (Incorporated by reference to Exhibit 3.1 to the
    Registration Statement
    No. 333-33379
    on
    Form S-1/A
    filed by the Company with the Securities and Exchange Commission
    on September 8, 1997.)3
.1.1



Amendment to Amended and Restated Certificate of Incorporation
    of the Registrant (Incorporated by reference to Exhibit 3.1
    to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 1999, filed by
    the Company with the Securities and Exchange Commission.)3
.2



Bylaws of the Registrant (Incorporated by reference to
    Exhibit 3.2 to the Registration Statement
    No. 333-33379
    on
    Form S-1/A
    filed by the Company with the Securities and Exchange Commission
    on September 8, 1997.)3
.2.1



Amended and Restated Bylaws of the Registrant (Incorporated by
    reference to Exhibit 3.2 to the Companys Quarterly
    Report on
    Form 10-Q
    for the quarterly period ended September 30, 1999, filed by
    the Company with the Securities and Exchange Commission.)3
.2.2



Amendment No. 2 to Amended and Restated Bylaws of the
    Registrant (Incorporated by reference to Exhibit 3.2.2 to
    the Companys Annual Report on
    Form 10-K
    for the year period ended December 31, 2002, filed by the
    Company with the Securities and Exchange Commission.)4
.1



Rights Agreement, dated as of March 9, 2000, between
    Capital Senior Living Corporation and ChaseMellon Shareholder
    Services, L.L.C., which includes the form of Certificate of
    Designation of Series A Junior Participating Preferred
    Stock, $.01 par value, as Exhibit A, the form of Right
    Certificate as Exhibit B, and the Summary of Rights as
    Exhibit C (Incorporated by reference to Exhibit 4.1 to
    the Companys Current Report on
    Form 8-K,
    dated March 9, 2000, filed by the Company with the
    Securities and Exchange Commission.)4
.2



Form of Certificate of Designation of Series A Junior
    Participating Preferred Stock, $.01 par value (included as
    Exhibit A to the Rights Agreement, which is
    Exhibit 4.1 hereto)4
.3



Form of Right Certificate (included as Exhibit B to the
    Rights Agreement, which is Exhibit 4.1 hereto)4
.4



Form of Summary of Rights (included as Exhibit C to the
    Rights Agreement, which is Exhibit 4.1 hereto)4
.5



Specimen of legend to be placed, pursuant to Section 3(c)
    of the Rights Agreement, on all new Common Stock certificates
    issued after March 20, 2000 and prior to the Distribution
    Date upon transfer, exchange or new issuance (included in
    Section 3(c) of the Rights Agreement, which is
    Exhibit 4.1 hereto)4
.6



1997 Omnibus Stock and Incentive Plan for Capital Senior Living
    Corporation, as amended (Incorporated by reference to
    Exhibit 4.1 to the Companys Registration Statement on
    Form S-8,
    filed on December 3, 1999, by the Company with Securities
    and Exchange Commission.)4
.7



2007 Omnibus Stock and Incentive Plan for Capital Senior Living
    Corporation. (Incorporated by reference to Exhibit 4.6 to
    the Companys Current Report on
    Form 8-K
    filed by the Company with the Securities and Exchange Commission
    on May 31, 2007.)4
.8



First Amendment to 2007 Omnibus Stock and Incentive Plan for
    Capital Senior Living Corporation. (Incorporated by reference to
    Exhibit 4.7 to the Companys Current Report on
    Form 8-K
    filed by the Company with the Securities and Exchange Commission
    on May 31, 2007.)4
.9.



Rights Agreement, dated as of February 25, 2010, by and
    between Capital Senior Living Corporation and Mellon Investor
    Services LLC, including all exhibits thereto (Incorporated by
    reference to Exhibit 4.1 to the Companys Current
    Report on
    Form 8-K
    on February 25, 2010).4
.10



Form of Certificate of Designation of Series A Junior
    Participating Preferred Stock, par value $0.01 per share
    (Incorporated by reference to Exhibit 4.2 to the
    Companys Current Report on
    Form 8-K
    on February 25, 2010).4
.11



Form of Right Certificate (included as Exhibit B to the
    Rights Agreement, which is Exhibit 4.9 hereto).




---



##### Table of Contents



ExhibitNumber



Description4
.12



Form of Summary of Rights (included as Exhibit C to the
    Rights Agreement, which is Exhibit 4.9 hereto).10
.1



1997 Omnibus Stock and Incentive Plan for Capital Senior Living
    Corporation, as amended (Incorporated by reference to
    Exhibit 4.1 to the Companys Registration Statement on
    Form S-8,
    filed on December 3, 1999, by the Company with Securities
    and Exchange Commission.)10
.1.1



Form of Stock Option Agreement (Incorporated by reference to
    Exhibit 4.2 to the Companys Registration Statement on
    Form S-8,
    filed on December 3, 1999, by the Company with Securities
    and Exchange Commission.)10
.3



Employment Agreement, dated as of November 1, 1996, by and
    between Capital Senior Living Corporation and Lawrence A. Cohen
    (Incorporated by reference to Exhibit 10.11 from the
    Registration Statement
    No. 333-33379
    on
    Form S-1
    filed by the Company with the Securities and Exchange
    Commission.)10
.4



Employment Agreement, dated as of November 26, 1996, by and
    between Capital Senior Living, Inc. and David R. Brickman
    (Incorporated by reference to Exhibit 10.12 to the
    Registration Statement
    No. 333-33379
    on
    Form S-1
    filed by the Company with the Securities and Exchange
    Commission.)10
.5



Employment Agreement, dated as of November 26, 1996, by and
    between Capital Senior Living, Inc. and Keith N. Johannessen
    (Incorporated by reference to Exhibit 10.13 from the
    Registration Statement
    No. 333-33379
    on
    Form S-1
    filed by the Company with the Securities and Exchange Commission.10
.6



Employment Agreement, dated as of December 10, 1996, by and
    between Capital Senior Living, Inc. and Rob L. Goodpaster
    (Incorporated by reference to Exhibit 10.50 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 1998, filed by the Company
    with the Securities and Exchange Commission.)10
.7



Agreement of Limited Partnership of Triad Senior Living II, L.P.
    dated September 23, 1998 (Incorporated by reference to
    Exhibit 10.57 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 1998, filed by the Company
    with the Securities and Exchange Commission.)10
.8



Agreement of Limited Partnership of Triad Senior Living III,
    L.P. dated November 10, 1998 (Incorporated by reference to
    Exhibit 10.58 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 1998, filed by the Company
    with the Securities and Exchange Commission.)10
.9



First Amendment to Amended and Restated Employment Agreement of
    James A. Stroud, dated March 22, 1999, by and between James
    A. Stroud and Capital Senior Living Corporation (Incorporated by
    reference to the Exhibit 10.2 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 1999, filed by
    the Company with the Securities and Exchange Commission.)10
.10



Second Amendment to Amended and Restated Employment Agreement of
    James A. Stroud, dated May 31, 1999, by and between James
    A. Stroud and Capital Senior Living Corporation (Incorporated by
    reference to the Exhibit 10.3 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 1999, filed by
    the Company with the Securities and Exchange Commission.)10
.11



Agreement of Limited Partnership of Triad Senior Living IV, L.P.
    dated December 22, 1998 (Incorporated by reference to
    Exhibit 10.59 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 1998, filed by the Company
    with the Securities and Exchange Commission.)10
.12



Employment Agreement, dated May 26, 1999, by and between
    Lawrence A. Cohen and Capital Senior Living Corporation
    (Incorporated by reference to the Exhibit 10.4 to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 1999, filed by
    the Company with the Securities and Exchange Commission.)10
.13



Employment Agreement, dated May 25, 1999, by and between
    Ralph A. Beattie and Capital Senior Living Corporation
    (Incorporated by reference to the Exhibit 10.76 to the
    Companys Annual Report on
    Form 10-K,
    dated March 30, 2000, filed by the Company with the
    Securities and Exchange Commission.)




---



##### Table of Contents



ExhibitNumber



Description10
.14



Second Amended and Restated Agreement of Limited Partnership of
    Triad Senior Living I, L.P. (Incorporated by reference to
    the Exhibit 10.78 to the Companys Annual Report on
    Form 10-K,
    dated March 30, 2000, filed by the Company with the
    Securities and Exchange Commission.)10
.14.1



Amendment No. 1 to Second Amended and Restated Agreement of
    Limited Partnership of Triad Senior Living I, LP.
    (Incorporated by reference to the Exhibit 10.10.5 to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2002, filed by
    the Company with the Securities and Exchange Commission.)10
.15



First Amendment to Triad II Partnership Agreement
    (Incorporated by reference to Exhibit 10.26 to the
    Companys Current Report on
    Form 8-K,
    dated August 15, 2000, filed by the Company with the
    Securities and Exchange Commission.)10
.16



Third Amendment to Amended and Restated Employment Agreement of
    James A. Stroud, dated November 8, 2000, by and between
    James A. Stroud and Capital Senior Living Corporation
    (Incorporated by reference to Exhibit 10.96 to the
    Companys Annual Report on
    Form 10-K,
    dated March 26, 2002, filed by the Company with the
    Securities and Exchange Commission.)10
.17



Support Agreement dated as of September 11, 2002 by and
    between Capital Senior Living, Inc., Triad I, Triad II,
    Triad III, Triad IV and Triad V. (Incorporated by reference
    to Exhibit 10.102 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2002, filed by
    the Company with the Securities and Exchange Commission.)10
.18



Fourth Amendment to Amended and Restated Employment Agreement of
    James A. Stroud, dated January 16, 2003 by and between
    James A. Stroud and Capital Senior Living Corporation
    (Incorporated by reference to Exhibit 10.105 to the
    Companys Annual Report on
    Form 10-K,
    dated March 26, 2003, filed by the Company with the
    Securities and Exchange Commission.)10
.19



Second Amendment to the Employment Agreement of Lawrence A.
    Cohen, dated January 27, 2003 by and between Lawrence A.
    Cohen and Capital Senior Living Corporation (Incorporated by
    reference to Exhibit 10.106 to the Companys Annual
    Report on
    Form 10-K,
    dated March 26, 2003, filed by the Company with the
    Securities and Exchange Commission.)10
.20



First Amendment to the Employment Agreement of Keith N.
    Johannessen, dated January 17, 2003 by and between Keith N.
    Johannessen and Capital Senior Living Corporation (Incorporated
    by reference to Exhibit 10.107 to the Companys Annual
    Report on
    Form 10-K,
    dated March 26, 2003, filed by the Company with the
    Securities and Exchange Commission.)10
.21



First Amendment to the Employment Agreement of Ralph A. Beattie,
    dated January 21, 2003 by and between Ralph A. Beattie and
    Capital Senior Living Corporation (Incorporated by reference to
    Exhibit 10.108 to the Companys Annual Report on
    Form 10-K,
    dated March 26, 2003, filed by the Company with the
    Securities and Exchange Commission.)10
.22



Second Amendment to the Employment Agreement of David R.
    Brickman, dated January 27, 2003 by and between David R.
    Brickman and Capital Senior Living Corporation (Incorporated by
    reference to Exhibit 10.109 to the Companys Annual
    Report on
    Form 10-K,
    dated March 26, 2003, filed by the Company with the
    Securities and Exchange Commission.)10
.23



Amended and Restated Draw Promissory Note, dated
    February 1, 2003, of Triad Senior Living I, L.P. in
    favor of Capital Senior Living Properties, Inc. (Incorporated by
    reference to Exhibit 10.110 to the Companys Annual
    Report on
    Form 10-K,
    dated March 26, 2003, filed by the Company with the
    Securities and Exchange Commission.)10
.23.1



Amended and Restated Draw Promissory Note (Fairfield), dated
    February 1, 2003, of Triad Senior Living II, L.P. in favor
    of Capital Senior Living Properties, Inc. (Incorporated by
    reference to Exhibit 10.111.1 to the Companys Annual
    Report on
    Form 10-K,
    dated March 26, 2003, filed by the Company with the
    Securities and Exchange Commission.)10
.23.2



Amended and Restated Draw Promissory Note (Oklahoma City), dated
    February 1, 2003, of Triad Senior Living II, L.P. in favor
    of Capital Senior Living Properties, Inc. (Incorporated by
    reference to Exhibit 10.111.2 to the Companys Annual
    Report on
    Form 10-K,
    dated March 26, 2003, filed by the Company with the
    Securities and Exchange Commission.)10
.23.3



Amended and Restated Draw Promissory Note (Plano), dated
    February 1, 2003, of Triad Senior Living II, L.P. in favor
    of Capital Senior Living Properties, Inc. (Incorporated by
    reference to Exhibit 10.111.3 to the Companys Annual
    Report on
    Form 10-K,
    dated March 26, 2003, filed by the Company with the
    Securities and Exchange Commission.)




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##### Table of Contents



ExhibitNumber



Description10
.24



Amended and Restated Draw Promissory Note, dated
    February 1, 2003, of Triad Senior Living III, L.P. in favor
    of Capital Senior Living Properties, Inc. (Incorporated by
    reference to Exhibit 10.112 to the Companys Annual
    Report on
    Form 10-K,
    dated March 26, 2003, filed by the Company with the
    Securities and Exchange Commission.)10
.25



Amended and Restated Draw Promissory Note, dated
    February 1, 2003, of Triad Senior Living IV, L.P. in favor
    of Capital Senior Living Properties, Inc. (Incorporated by
    reference to Exhibit 10.113 to the Companys Annual
    Report on
    Form 10-K,
    dated March 26, 2003, filed by the Company with the
    Securities and Exchange Commission.)10
.26



Amended and Restated Draw Promissory Note, dated
    February 1, 2003, of Triad Senior Living V, L.P. in
    favor of Capital Senior Living Properties, Inc. (Incorporated by
    reference to Exhibit 10.114 to the Companys Annual
    Report on
    Form 10-K,
    dated March 26, 2003, filed by the Company with the
    Securities and Exchange Commission.)10
.28



Form of Restricted Stock Award Under the 1997 Omnibus Stock and
    Incentive Plan for Capital Senior Living Corporation
    (Incorporated by reference to Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K,
    dated February 10, 2005, filed by the Company with the
    Securities and Exchange Commission.)10
.29



Master Lease Agreement, dated June 30, 2005, between Ventas
    Amberleigh, LLC and Capital Senior Management 2, Inc.
    (Incorporated by reference to Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K/A,
    dated June 30, 2005, filed by the Company with the
    Securities and Exchange Commission on July 11, 2005.)10
.30



Schedule identifying substantially identical agreements to
    Exhibit 10.63 (Incorporated by reference to
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K/A,
    dated June 30, 2005, filed by the Company with the
    Securities and Exchange Commission on July 11, 2005.)10
.31



Loan Agreement, dated July 18, 2005, by Capital Senior
    Living Peoria, LLC and GMAC Commercial Mortgage Bank
    (Incorporated by reference to the Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K,
    dated July 18, 2005, filed by the Company with the
    Securities and Exchange Commission.)10
.32



Schedule identifying substantially identical agreements to
    Exhibit 10.65 (Incorporated by reference to the
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K,
    dated July 18, 2005, filed by the Company with the
    Securities and Exchange Commission.)10
.33



Master Lease Agreement, dated October 18, 2005, between
    Ventas Georgetowne, LLC and Capital Senior Management 2, Inc.
    (Incorporated by reference to Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K,
    dated October 18, 2005, filed by the Company with the
    Securities and Exchange Commission.)10
.34



Contract of Acquisition, dated as of March 7, 2006, between
    Health Care Property Investors, Inc. and Capital Senior Living
    Properties 2  Crosswood Oaks, Inc., Capital Senior
    Living Properties 2  Tesson Heights, Inc. and Capital
    Senior Living Properties 2  Veranda Club, Inc.
    (Incorporated by reference to Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K,
    dated March 7, 2006, filed by the Company with the
    Securities and Exchange Commission.)10
.35



Contract of Acquisition, dated as of March 7, 2006, between
    Texas HCP Holding, L.P. and Capital Senior Living Acquisition,
    LLC (Incorporated by reference to Exhibit 10.2 to the
    Companys Current Report on
    Form 8-K,
    dated March 7, 2006, filed by the Company with the
    Securities and Exchange Commission.)10
.36



Agreement of Purchase and Sale of Real Property, dated
    March 10, 2006, by and between Covenant Place of Abilene,
    Inc. and Capital Senior Living Acquisition, LLC (Incorporated by
    reference to Exhibit 10.3 to the Companys Current
    Report on
    Form 8-K,
    dated March 7, 2006, filed by the Company with the
    Securities and Exchange Commission.)10
.37



Schedule identifying substantially identical agreements to
    Exhibit 10.70 (Incorporated by reference to
    Exhibit 10.4 to the Companys Current Report on
    Form 8-K,
    dated March 7, 2006, filed by the Company with the
    Securities and Exchange Commission.)10
.38



Master Lease Agreement, dated May 31, 2006, between
    subsidiaries of the Company and HCP (Incorporated by reference
    to Exhibit 10.1 to the Companys Current Report on
    Form 8-K,
    dated May 31, 2006, filed by the Company with the
    Securities and Exchange Commission.)




---



##### Table of Contents



ExhibitNumber



Description10
.39



Lease, dated May 31, 2006, between subsidiaries of the
    Company and HCP regarding the Crosswood Oaks Facility in Citrus
    Heights, California (Incorporated by reference to
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K,
    dated May 31, 2006, filed by the Company with the
    Securities and Exchange Commission.)10
.40



Schedule identifying substantially identical agreements to
    Exhibit 10.73 (Incorporated by reference to
    Exhibit 10.3 to the Companys Current Report on
    Form 8-K,
    dated May 31, 2006, filed by the Company with the
    Securities and Exchange Commission.)10
.41



Multifamily Note, dated June 9, 2006, executed by Triad
    Senior Living II, L.P. in favor of Capmark. (Incorporated by
    reference to Exhibit 10.1 to the Companys Current
    Report on
    Form 8-K,
    dated June 9, 2006, filed by the Company with the
    Securities and Exchange Commission.)10
.42



Schedule identifying substantially identical agreements to
    Exhibit 10.75 (Incorporated by reference to
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K,
    dated June 9, 2006, filed by the Company with the
    Securities and Exchange Commission.)10
.43



Multifamily Deed of Trust, Assignment of Rents and Security
    Agreement and Fixture Filing, dated June 9, 2006, by Triad
    Senior Living II, L.P. to Ed Stout, as trustee, for the benefit
    of Capmark. (Incorporated by reference to Exhibit 10.3 to
    the Companys Current Report on
    Form 8-K,
    dated June 9, 2006, filed by the Company with the
    Securities and Exchange Commission.)10
.45



Loan Agreement, dated June 20, 2006, by and between Triad
    Senior Living III, L.P. and Capmark Bank. (Incorporated by
    reference to Exhibit 10.1 to the Companys Current
    Report on
    Form 8-K,
    dated June 20, 2006, filed by the Company with the
    Securities and Exchange Commission.)10
.46



2007 Omnibus Stock and Incentive Plan for Capital Senior Living
    Corporation (Incorporated by reference to Exhibit 4.6 to
    the Registration Statement on
    Form S-8,
    dated May 31, 2007, filed by the Company with the
    Securities and Exchange Commission.)10
.47



First Amendment to 2007 Omnibus Stock and Incentive Plan for
    Capital Senior Living Corporation (Incorporated by reference to
    Exhibit 4.7 to the Registration Statement on
    Form S-8,
    dated May 31, 2007, filed by the Company with the
    Securities and Exchange Commission.)10
.48



Multifamily Note dated May 3, 2007 executed by Triad Senior
    Living III, L.P. in favor of Capmark Bank (Incorporated by
    reference to Exhibit 10.1 to the Companys Current
    Report on
    Form 8-K,
    dated March 3, 2007, filed by the Company with the
    Securities and Exchange Commission.)10
.49



Schedule identifying substantially identical agreements to
    Exhibit 10.3 (Incorporated by reference to
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K,
    dated March 3, 2007, filed by the Company with the
    Securities and Exchange Commission.)10
.50



Multifamily Deed of Trust, Assignment of Rents and Security
    Agreement and Fixture Filing dated May 3, 2007 by Triad
    Senior Living III, L.P. in favor of Chicago Title Insurance
    Company, as trustee for the benefit of Capmark Bank.
    (Incorporated by reference to Exhibit 10.3 to the
    Companys Current Report on
    Form 8-K,
    dated March 3, 2007, filed by the Company with the
    Securities and Exchange Commission.)10
.51



Schedule identifying substantially identical agreements to
    Exhibit 10.5. (Incorporated by reference to
    Exhibit 10.4 to the Companys Current Report on
    Form 8-K,
    dated March 3, 2007, filed by the Company with the
    Securities and Exchange Commission.)10
.52



Asset Purchase Agreement, dated December 21, 2007, by and
    among the sellers identified therein, Capital Senior Living
    Acquisition, LLC and Hearthstone Senior Services, L.P.
    (Incorporated by reference to the Exhibit 2.1 to the
    Companys Current Report on
    Form 8-K,
    dated December 28, 2007, filed by the Company with the
    Securities and Exchange Commission.)10
.53



Settlement Agreement, dated March 19, 2008, by and among
    Capital Senior Living Corporation, West Creek Capital LLC,
    Harvey Hanerfeld and Roger Feldman. (Incorporated by reference
    to the Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    filed by the Company with the Securities and Exchange Commission
    on March 26, 2008.)10
.54



Settlement Agreement, dated March 19, 2008, by and among
    Capital Senior Living Corporation, Boston Avenue Capital, LLC,
    York town Avenue Capital, LLC, Stephen J. Heyman, and James F.
    Adelson (Incorporated by reference to the Exhibit 10.1 to
    the Companys Current Report on
    Form 8-K
    filed by the Company with the Securities and Exchange Commission
    on March 26, 2008.)




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##### Table of Contents



ExhibitNumber



Description10
.55



Severance Agreement, dated December 12, 2008, by and among
    Capital Senior Living Corporation and James A. Stroud.
    (Incorporated by reference to the Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    filed by the Company with the Securities and Exchange Commission
    on December 16, 2008.)*21
.1



Subsidiaries of the Company*23
.1



Consent of Ernst & Young LLP*31
.1



Certification of Chief Executive Officer required by
    Rule 13a-14(a)
    or
    Rule 15d-14(a)*31
.2



Certification of Chief Financial Officer required by
    Rule 13a-14(a)
    or
    Rule 15d-14(a)*32
.1



Certification of Lawrence A. Cohen pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.*32
.2



Certification of Ralph A. Beattie pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.     *
    
    Filed herewith.