Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 31, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | CSU | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Security Exchange Name | NYSE | |
Entity Registrant Name | Capital Senior Living Corporation | |
Entity Central Index Key | 0001043000 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,914,264 | |
Entity File Number | 1-13445 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-2678809 | |
Entity Address, Address Line One | 14160 Dallas Parkway | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75254 | |
City Area Code | 972 | |
Local Phone Number | 770-5600 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 14,293 | $ 23,975 |
Restricted cash | 3,982 | 13,088 |
Accounts receivable, net | 9,107 | 8,143 |
Federal and state income taxes receivable | 76 | 72 |
Property tax and insurance deposits | 8,863 | 12,627 |
Prepaid expenses and other | 4,764 | 5,308 |
Total current assets | 41,085 | 63,213 |
Property and equipment, net | 692,746 | 969,211 |
Operating lease right-of-use assets, net | 3,691 | 224,523 |
Deferred taxes, net | 76 | 76 |
Other assets, net | 2,863 | 10,673 |
Total assets | 740,461 | 1,267,696 |
Current liabilities: | ||
Accounts payable | 10,398 | 10,382 |
Accrued expenses | 56,474 | 46,227 |
Current portion of notes payable, net of deferred loan costs | 263,674 | 15,819 |
Current portion of deferred income | 5,885 | 7,201 |
Current portion of financing obligations | 1,741 | |
Current portion of lease liabilities | 8,971 | 45,988 |
Federal and state income taxes payable | 307 | 420 |
Customer deposits | 991 | 1,247 |
Total current liabilities | 346,700 | 129,025 |
Financing obligations, net of current portion | 9,688 | |
Lease liabilities, net of current portion | 590 | 208,967 |
Notes payable, net of deferred loan costs and current portion | 652,194 | 905,637 |
Commitments and contingencies | ||
Shareholders’ equity (deficit): | ||
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 - 31,429 and 31,463 in 2020 and 2019, respectively | 319 | 319 |
Additional paid-in capital | 191,882 | 190,386 |
Retained deficit | (447,794) | (172,896) |
Treasury stock, at cost – 494 shares in 2020 and 2019 | (3,430) | (3,430) |
Total shareholders’ equity (deficit) | (259,023) | 14,379 |
Total liabilities and shareholders’ equity (deficit) | $ 740,461 | $ 1,267,696 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 65,000,000 | 65,000,000 |
Common stock, shares issued | 31,429,000 | 31,441,000 |
Common stock, shares outstanding | 31,429,000 | 31,441,000 |
Treasury stock, shares | 494,000 | 494,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues: | ||||
Total revenues | $ 96,053 | $ 111,110 | $ 303,659 | $ 338,412 |
Expenses: | ||||
Operating expenses (exclusive of facility lease expense and depreciation and amortization expense shown below) | 65,165 | 80,394 | 211,874 | 230,229 |
General and administrative expenses | 8,128 | 7,554 | 21,036 | 21,766 |
Facility lease expense | 5,926 | 14,233 | 23,234 | 42,706 |
Stock-based compensation expense | 421 | 898 | 1,494 | 1,558 |
Depreciation and amortization expense | 15,547 | 16,136 | 47,584 | 48,085 |
Long-lived asset impairment | 3,240 | 39,194 | ||
Community reimbursement expense | 9,555 | 11,888 | ||
Total expenses | 107,982 | 119,215 | 356,304 | 344,344 |
Other income (expense): | ||||
Interest income | 14 | 59 | 83 | 173 |
Interest expense | (11,141) | (12,562) | (34,044) | (37,728) |
Write down of assets held for sale | (2,340) | |||
Gain (loss) on facility lease modification and termination, net | (753) | 10,487 | (97) | |
Gain (loss) on disposition of assets, net | (191,032) | (198,388) | 38 | |
Other income (expense) | 9 | 1 | 2 | 8 |
Loss from continuing operations before provision for income taxes | (214,832) | (20,607) | (274,505) | (45,878) |
Provision for income taxes | (132) | (124) | (393) | (371) |
Net loss | $ (214,964) | $ (20,731) | $ (274,898) | $ (46,249) |
Per share data: | ||||
Basic net loss per share | $ (7) | $ (0.68) | $ (8.99) | $ (1.53) |
Diluted net loss per share | $ (7) | $ (0.68) | $ (8.99) | $ (1.53) |
Weighted average shares outstanding — basic | 30,730 | 30,324 | 30,578 | 30,236 |
Weighted average shares outstanding — diluted | 30,730 | 30,324 | 30,578 | 30,236 |
Comprehensive loss | $ (214,964) | $ (20,731) | $ (274,898) | $ (46,249) |
Resident Revenue [Member] | ||||
Revenues: | ||||
Total revenues | 85,894 | $ 111,110 | 290,952 | $ 338,412 |
Management Fees [Member] | ||||
Revenues: | ||||
Total revenues | 604 | 819 | ||
Community Reimbursement Revenue [Member] | ||||
Revenues: | ||||
Total revenues | $ 9,555 | $ 11,888 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect Period of Adoption Adjustment [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Deficit [Member] | Retained Deficit [Member]Cumulative Effect Period of Adoption Adjustment [Member] | Treasury Stock [Member] |
Beginning Balance at Dec. 31, 2018 | $ 35,265 | $ 12,636 | $ 318 | $ 187,879 | $ (149,502) | $ 12,636 | $ (3,430) |
Beginning Balance, Shares at Dec. 31, 2018 | 31,273 | ||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | us-gaap:AccountingStandardsUpdate201602Member | |||||
Restricted stock awards (cancellations), net | $ (2) | 2 | |||||
Restricted stock awards (cancellations), net, Shares | (150) | ||||||
Stock-based compensation | (978) | (978) | |||||
Net loss | (12,984) | (12,984) | |||||
Ending Balance at Mar. 31, 2019 | 33,939 | $ 316 | 186,903 | (149,850) | (3,430) | ||
Ending Balance, Shares at Mar. 31, 2019 | 31,123 | ||||||
Beginning Balance at Dec. 31, 2018 | 35,265 | $ 12,636 | $ 318 | 187,879 | (149,502) | $ 12,636 | (3,430) |
Beginning Balance, Shares at Dec. 31, 2018 | 31,273 | ||||||
Net loss | (46,249) | ||||||
Ending Balance at Sep. 30, 2019 | 3,210 | $ 320 | 189,435 | (183,115) | (3,430) | ||
Ending Balance, Shares at Sep. 30, 2019 | 31,463 | ||||||
Beginning Balance at Mar. 31, 2019 | 33,939 | $ 316 | 186,903 | (149,850) | (3,430) | ||
Beginning Balance, Shares at Mar. 31, 2019 | 31,123 | ||||||
Restricted stock awards (cancellations), net | $ 4 | (4) | |||||
Restricted stock awards (cancellations), net, Shares | 346 | ||||||
Stock-based compensation | 1,638 | 1,638 | |||||
Net loss | (12,534) | (12,534) | |||||
Ending Balance at Jun. 30, 2019 | 23,043 | $ 320 | 188,537 | (162,384) | (3,430) | ||
Ending Balance, Shares at Jun. 30, 2019 | 31,469 | ||||||
Restricted stock awards (cancellations), net, Shares | (6) | ||||||
Stock-based compensation | 898 | 898 | |||||
Net loss | (20,731) | (20,731) | |||||
Ending Balance at Sep. 30, 2019 | 3,210 | $ 320 | 189,435 | (183,115) | (3,430) | ||
Ending Balance, Shares at Sep. 30, 2019 | 31,463 | ||||||
Beginning Balance at Dec. 31, 2019 | 14,379 | $ 319 | 190,386 | (172,896) | (3,430) | ||
Beginning Balance, Shares at Dec. 31, 2019 | 31,441 | ||||||
Restricted stock awards (cancellations), net, Shares | (52) | ||||||
Stock-based compensation | 597 | 597 | |||||
Net loss | (47,181) | (47,181) | |||||
Ending Balance at Mar. 31, 2020 | (32,205) | $ 319 | 190,983 | (220,077) | (3,430) | ||
Ending Balance, Shares at Mar. 31, 2020 | 31,389 | ||||||
Beginning Balance at Dec. 31, 2019 | 14,379 | $ 319 | 190,386 | (172,896) | (3,430) | ||
Beginning Balance, Shares at Dec. 31, 2019 | 31,441 | ||||||
Net loss | (274,898) | ||||||
Ending Balance at Sep. 30, 2020 | (259,023) | $ 319 | 191,882 | (447,794) | (3,430) | ||
Ending Balance, Shares at Sep. 30, 2020 | 31,429 | ||||||
Beginning Balance at Mar. 31, 2020 | (32,205) | $ 319 | 190,983 | (220,077) | (3,430) | ||
Beginning Balance, Shares at Mar. 31, 2020 | 31,389 | ||||||
Restricted stock awards (cancellations), net, Shares | 43 | ||||||
Stock-based compensation | 478 | 478 | |||||
Net loss | (12,753) | (12,753) | |||||
Ending Balance at Jun. 30, 2020 | (44,480) | $ 319 | 191,461 | (232,830) | (3,430) | ||
Ending Balance, Shares at Jun. 30, 2020 | 31,432 | ||||||
Restricted stock awards (cancellations), net, Shares | (3) | ||||||
Stock-based compensation | 421 | 421 | |||||
Net loss | (214,964) | (214,964) | |||||
Ending Balance at Sep. 30, 2020 | $ (259,023) | $ 319 | $ 191,882 | $ (447,794) | $ (3,430) | ||
Ending Balance, Shares at Sep. 30, 2020 | 31,429 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating Activities | ||
Net loss | $ (274,898) | $ (46,249) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 47,584 | 48,085 |
Amortization of deferred financing charges | 1,399 | 1,237 |
Deferred income | (217) | 790 |
Operating lease expense adjustment | (18,460) | (4,285) |
Loss on disposition of assets, net | 198,388 | 59 |
Gain on facility lease modification and termination, net | (10,487) | |
Long-lived asset impairment | 39,194 | |
Write-down of assets held for sale | 2,340 | |
Provision for bad debts | 2,190 | 2,182 |
Stock-based compensation expense | 1,494 | 1,558 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,616) | (385) |
Property tax and insurance deposits | 1,091 | 690 |
Prepaid expenses and other | 911 | (2,001) |
Other assets | (2,056) | (373) |
Accounts payable | 1,101 | (4,683) |
Accrued expenses | 11,317 | 430 |
Federal and state income taxes receivable/payable | (117) | (103) |
Deferred resident revenue | 1 | (6) |
Customer deposits | (189) | (38) |
Net cash used in operating activities | (5,370) | (752) |
Investing Activities | ||
Capital expenditures | (11,211) | (14,271) |
Proceeds from disposition of assets | 6,396 | 4,888 |
Net cash used in investing activities | (4,815) | (9,383) |
Financing Activities | ||
Proceeds from notes payable | 3,673 | 5,268 |
Repayments of notes payable | (11,901) | (16,884) |
Cash payments for financing lease and financing obligations | (361) | (1,095) |
Deferred financing charges paid | (14) | (698) |
Net cash used in financing activities | (8,603) | (13,409) |
Decrease in cash and cash equivalents | (18,788) | (23,544) |
Cash and cash equivalents and restricted cash at beginning of period | 37,063 | 44,320 |
Cash and cash equivalents and restricted cash at end of period | 18,275 | 20,776 |
Cash paid during the period for: | ||
Interest | 25,855 | 35,723 |
Lease modification and termination | 6,791 | |
Income taxes | $ 13 | $ 505 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | 1. BASIS OF PRESENTATION Capital Senior Living Corporation, a Delaware corporation (together with its subsidiaries, the “Company”), is one of the largest operators of senior housing communities in the United States in terms of resident capacity. The Company owns, operates, and manages senior housing communities throughout the United States. As of September 30, 2020, the Company operated 119 senior housing communities in 22 states with an aggregate capacity of approximately 14,700 residents, including 61 senior housing communities that the Company owned, 34 senior housing communities that the Company leased, and 24 communities that the Company managed on behalf of third parties. The accompanying consolidated financial statements include the financial statements of Capital Senior Living Corporation and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. The accompanying Consolidated Balance Sheet, as of December 31, 2019, has been derived from audited consolidated financial statements of the Company for the year ended December 31, 2019, and the accompanying unaudited consolidated financial statements, as of and for the three and nine month periods ended September 30, 2020 and 2019, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States have not been included pursuant to those rules and regulations. For further information, refer to the financial statements and notes thereto for the year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2020. The Company meets the SEC’s definition of a “Smaller Reporting Company,” and therefore qualifies for the SEC’s reduced disclosure requirements for smaller reporting companies. In the opinion of the Company, the accompanying consolidated financial statements contain all adjustments necessary to present fairly the Company’s financial position as of September 30, 2020, results of operations for the three and nine month periods ended September 30, 2020 and 2019, and cash flows for the nine month periods ended September 30, 2020 and 2019. The results of operations for the three and nine month periods ended September 30, 2020 are not necessarily indicative of the results for the year ending December 31, 2020. |
Going Concern Uncertainty
Going Concern Uncertainty | 9 Months Ended |
Sep. 30, 2020 | |
Risks And Uncertainties [Abstract] | |
Going Concern Uncertainty | 2. GOING CONCERN UNCERTAINTY A new strain of coronavirus, which causes the viral disease known as COVID-19, has spread from China to many other countries, including the United States. The United States broadly continues to experience the pandemic caused by COVID-19, which has significantly disrupted, and likely will continue to disrupt for some period, the nation’s economy, the senior living industry, and the Company’s business. In an effort to protect its residents and employees and slow the spread of COVID-19 and in response to recent quarantines, shelter-in-place orders and other limitations imposed by federal, state and local governments, the Company has restricted or limited access to its communities, including limitations on in-person prospective resident tours and, in certain cases, new resident admissions. As a result, COVID-19 has caused, and management expects will continue to cause, a decline in the occupancy levels at the Company’s communities, which has negatively impacted, and likely will continue to negatively impact, the Company’s revenues and operating results, which depend significantly on such occupancy levels. Reduced controllable move-out activity during the pandemic may partially offset future adverse revenue impacts. In addition, the outbreak of COVID-19 has required the Company to incur, and management expects will require the Company to continue to incur, significant additional operating costs and expenses in order to implement enhanced infection control protocols and otherwise care for its residents, including increased costs and expenses relating to supplies and personal protective equipment, testing of the Company’s residents and employees, labor and specialized disinfecting and cleaning services. Further, residents at certain of its senior housing communities have tested positive for COVID-19, which has increased the costs of caring for the residents and resulted in reduced occupancies at such communities. At September 30, 2020, the Company had incurred $4.6 million in COVID-19 related expenses since the onset of the pandemic, $1.4 million of which was incurred in the third quarter of 2020. Accounting Standards Codification (“ASC”) 205-40, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” requires an evaluation of whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date the financial statements are issued. Initially, this evaluation does not consider the potential mitigating effect of management’s plans that have not been fully implemented. When substantial doubt exists, management evaluates the mitigating effect of its plans to determine if it is probable that (1) the plans will be effectively implemented within one year after the date the financial statements are issued, and (2) when implemented, the plans will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In complying with the requirements under ASC 205-40 to complete an evaluation without considering mitigating factors, the Company considered several conditions or events including (1) uncertainty around the impact of COVID-19 on the Company’s operations and financial results, and (2) operating losses and negative cash flows from operations for projected fiscal years 2020 and 2021. The above conditions raise substantial doubt about the Company’s ability to continue as a going concern for the twelve-month period following the date the financial statements are issued. The Company is implementing plans as discussed below, which includes strategic and cash-preservation initiatives, which are designed to provide the Company with adequate liquidity to meet its obligations for at least the twelve-month period following the date its financial statements are issued. The Company’s primary sources of near- and medium-term liquidity are expected to be (1) improved operating cash flows due to strategic and cash preservation initiatives discussed below, (2) debt forbearance, to the extent available on acceptable terms, and (3) forbearance on rent payments to landlords, to the extent available on acceptable terms. Strategic and Cash Preservation Initiatives The Company has taken or intends to take the following actions, among others, to improve its liquidity position and to address uncertainty about its ability to operate as a going concern: • In the first quarter of 2019, the Company implemented a 3-year operational improvement plan which began to show improved operating results during 2020, prior to the onset of COVID-19, and is expected to continue to drive incremental profitability improvements. • The Company has implemented additional proactive spending reductions to improve liquidity, including reduced discretionary spending and monitoring capital spending. • The Company has recently taken measures to exit underperforming leases in order to strengthen the Company’s balance sheet and allow the Company to strategically invest in certain existing communities (see “Note 5- Dispositions and Other Significant Transactions”). Recent actions the Company has taken to improve the Company’s future financial position include: o In the first quarter of 2020, the Company entered into agreements with two of its largest landlords, Welltower, Inc. (“Welltower”) and Ventas, Inc. (“Ventas”) providing for the early termination of the Master Lease Agreements with such landlords covering certain of its senior housing communities. Pursuant to such agreements, the Company agreed to pay Welltower and Ventas reduced monthly rental amounts, beginning February 1, 2020, and to convert such lease agreements into property management agreements with the Company as manager on December 31, 2020, if such communities have not been transitioned to a successor operator. At September 30, 2020, five communities had transitioned to a successor operator. On November 1, 2020, subsequent to quarter-end, 14 Welltower communities transitioned to different operators. See “Note 12- Subsequent Events.” o In the first quarter of 2020, the Company also entered into an agreement with Healthpeak Properties, Inc. (“Healthpeak”) providing for the early termination of one of two Master Lease Agreements with Healthpeak covering six of its senior housing communities. This Master Lease Agreement was converted to a management agreement under a REIT Investment Diversification Act (“RIDEA”) structure pursuant to which the Company agreed to manage the communities that were subject to such lease agreement until such communities are sold by Healthpeak. o In the first quarter of 2020, the Company transitioned one of the communities leased from Healthpeak to a new operator. On October 15, 2020, subsequent to quarter-end, the Company transitioned a second Healthpeak community to a new operator. See “Note 12- Subsequent Events.” • The Company is currently evaluating the opportunity to sell certain communities that would provide positive net proceeds. • In May 2020, the Company entered into short-term debt forbearance agreements with a number of its lenders and continues to discuss further debt relief with its lenders (see “Note 6- Debt Transactions”). In October 2020, the Company entered into an additional short-term forbearance agreement with Protective Life. • In May 2020, the Company entered into an agreement with Healthpeak effective April 1, 2020, through the end of the lease term, under which the Company began paying Healthpeak rent of approximately $0.7 million per month for eight senior housing communities subject to a Master Lease Agreement with Healthpeak in lieu of approximately $0.9 million of monthly rent due and payable under the Master Lease Agreement covering such communities. The remaining rent is subject to payment by the Company pursuant to a three-year three-month communities . In addition, the Company will earn a management fee for continuing to manage the se communities . See “Note 12- Subsequent Events.” • The Company has elected to utilize the Coronavirus Aid, Relief, and Economic Security Act of 2020 (CARES Act) payroll tax deferral program to delay payment of a portion of payroll taxes estimated to be incurred from April 2020 through December 2020. At September 30, 2020, the Company had deferred $5.0 million in payroll taxes, which was included in accrued expenses on the Company’s Consolidated Balance Sheets. • In conjunction with the CARES Act, the Company had received approximately $0.6 million in relief from state agencies at September 30, 2020 and has applied for additional federal and state funding • In July 2020, the Company initiated a process which is intended to transfer the operations and ownership of 18 communities that are either underperforming or are in underperforming loan pools to Fannie Mae, the holder of nonrecourse debt on such communities. In conjunction with the agreement, the Company discontinued recognizing revenues and expenses on the properties as of August 1, 2020 but continues to manage the communities on behalf of Fannie Mae. The Company earns a management fee for providing such services. As a result of events of default and the appointment of a receiver to take possession of the communities, the Company concluded that, in accordance with ASC 610-20, “Gains and Losses from the Derecognition of Nonfinancial Assets” a $191.0 million loss should be taken due to the derecognition of the assets as a result of the loss of control of the assets, which occurred during the three months ended September 30, 2020. See “Note 6- Debt Transactions.” Once legal ownership of the properties transfers to Fannie Mae and the liabilities relating to such communities is extinguished, the Company expects to recognize a gain related to the extinguishment in accordance with ASC 470, “Debt.” At September 30, 2020, the Company included $217.7 million in outstanding debt in the current portion of notes payable, net of deferred loan costs, and $6.1 million of accrued interest in accrued expenses on the Company’s Consolidated Balance Sheets related to these properties. • The Company is evaluating possible debt and capital options. The Company’s plans are designed to provide the Company with adequate liquidity to meet its obligations for at least the twelve-month period following the date its financial statements are issued; however, the remediation plan is dependent on conditions and matters that may be outside of the Company’s control or may not be available on terms acceptable to the Company, or at all, many of which have been made worse or more unpredictable by COVID-19. Accordingly, management determined it was not probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. If the Company is unable to successfully execute all of these initiatives or if the plan does not fully mitigate the Company’s liquidity challenges, the Company’s operating plans and resulting cash flows along with its cash and cash equivalents and other sources of liquidity may not be sufficient to fund operations for the twelve-month period following the date the financial statements are issued. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date the financial statements are issued. As such, the accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and their carrying amounts, or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents. The Company has deposits in banks that exceed Federal Deposit Insurance Corporation insurance limits. Management believes that credit risk related to these deposits is minimal. Restricted cash consists of deposits required by certain lenders as collateral pursuant to letters of credit. The deposits must remain so long as the letters of credit are outstanding which are subject to renewal annually. The following table sets forth the Company’s cash and cash equivalents and restricted cash (in thousands): September 30, 2020 2019 Cash and cash equivalents $ 14,293 $ 7,703 Restricted cash 3,982 13,073 $ 18,275 $ 20,776 Long-Lived Assets and Impairment Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets. At each balance sheet date, the Company reviews the carrying value of its property and equipment to determine if facts and circumstances suggest that they may be impaired or that the depreciation period may need to be changed. The Company considers internal factors such as net operating losses along with external factors relating to each asset, including contract changes, local market developments, and other publicly available information to determine whether impairment indicators exist. If an indicator of impairment is identified, the carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flows from such asset is separately identifiable and is less than its carrying value. Recoverability of an asset group is assessed by comparing its carrying amount to the estimated future undiscounted net cash flows expected to be generated by the asset group through operation and disposition, calculated utilizing the lowest level of identifiable cash flows. If estimated future undiscounted net cash flows are less than the carrying amount of the asset then the fair value of the asset is estimated. The impairment expense is determined by comparing the estimated fair value of the asset to its carrying amount, with any amount in excess of fair value recognized as an expense in the current period. Asset groups were established at the individual property level and consist of property and equipment, net for owned properties and property and equipment, net and right-of-use assets, net for leased properties. Long-lived ROU and fixed assets are valued at fair value using inputs classified as Level 3 in the fair value hierarchy, which are unobservable inputs based on the Company’s assumptions. Impairment, if any, is recorded in the period in which the impairment occurred. Assets Held for Sale Assets are classified as held for sale when the Company has determined all of the held-for-sale criteria have been met. The Company determines the fair value, net of costs of disposal, of an asset on the date the asset is categorized as held for sale, and the asset is recorded at the lower of its fair value, net of cost of disposal, or carrying value on that date. The Company periodically reevaluates assets held for sale to determine if the assets are still recorded at the lower of fair value, net of cost of disposal, or carrying value. The fair values are generally determined based on market rates, industry trends, and recent comparable sales transactions. The actual sales price of these assets could differ significantly from the Company’s estimates. During the first quarter of 2019, the Company classified one senior housing community located in Kokomo, Indiana, as held for sale, resulting in $4.9 million being reclassified as assets held for sale and $3.5 million of corresponding mortgage debt being reclassified to the current portion of notes payable within the Consolidated Balance Sheets. The Company determined, using level 2 inputs as defined in the accounting standards codification, that the assets had an aggregate fair value, net of costs of disposal of $4.9 million. As the fair value was less than the carrying value of $7.2 million, a remeasurement write-down of approximately $2.3 million was recorded to adjust the carrying values of the assets held for sale at March 31, 2019. The senior living community was sold during the second quarter of 2019 for its carrying value. During the third quarter of fiscal 2019, the Company classified two communities, located in Springfield, Missouri and Peoria, Illinois, as assets held for sale resulting in net assets of $24.4 million being reclassified to assets held for sale and $44.4 million of corresponding mortgage debt being reclassified to the current portion of notes payable within the Company’s Consolidated Balance Sheets. The Company determined, using level 2 inputs as defined in the accounting standards codification, that the assets had an aggregate fair value of $62.8 million, net of disposal costs. The two senior living communities were sold during the fourth quarter of 2019. There were no senior housing communities classified as held for sale by the Company at September 30, 2020 or December 31, 2019. Off-Balance Sheet Arrangements The Company had no material off-balance sheet arrangements at September 30, 2020 or December 31, 2019. Revenue Recognition Resident revenue consists of fees for basic housing and certain support services and fees associated with additional housing and expanded support requirements such as assisted living care, memory care, and ancillary services. Basic housing and certain support services revenue is recorded when services are rendered and amounts billed are Residency agreements are generally short term in nature with durations of one year or less and are typically terminable by either party, under certain circumstances, upon providing 30 days’ notice, unless state law provides otherwise, with resident fees billed monthly in advance. Revenue for certain ancillary services is recognized as services are provided, and includes fees for services such as medication management, daily living activities, beautician/barber, laundry, television, guest meals, pets, and parking which are generally billed monthly in arrears and totaled approximately $0.1 million and $1.6 million for the three and nine months ended September 30, 2020, respectively, and approximately $1.0 million and $3.1 million for the three and nine months ended September 30, 2019, respectively, as a component of resident revenue within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company's senior housing communities have residency agreements that generally require the resident to pay a community fee prior to moving into the community and are recorded initially by the Company as deferred revenue. At September 30, 2020 and December 31, 2019, the Company had contract liabilities for deferred community fees totaling approximately $1.6 million and $2.2 million, respectively, which are included as a component of deferred income within current liabilities of the Company’s Consolidated Balance Sheets. The Company recognized community fees as a component of resident revenue within the Company’s Consolidated Statements of Operations and Comprehensive Loss of approximately $1.0 million and $3.2 million during the three and nine months ended September 30, 2020, respectively. The Company recognized community fees as a component of resident revenue within the Company’s Consolidated Statements of Operations and Comprehensive Loss of approximately $0.7 million and $1.9 million during the three and nine months ended September 30, 2019, respectively. During the first quarter of 2020, the Company entered into management agreements whereby it manages certain communities under a contract which provides periodic management fee payments to the Company and reimbursement for costs and expenses related to such communities. In addition, during the third quarter of 2020, the Company entered into a management agreement with Fannie Mae, whereby it manages the 18 communities of which it is in the process of legally transferring the ownership to Fannie Mae. The Company will continue to manage the communities until ownership of such communities has legally transferred to Fannie Mae. See “Note 6- Debt Transactions.” Management fees are generally determined by an agreed upon percentage of gross revenues (as defined in the management agreement). The Company has determined that all community management activities are a single performance obligation, which is satisfied over time as the services are rendered. The Company's estimate of the transaction price for management services also includes the amount of reimbursement due from the owners of the communities for services provided and related costs incurred. Such revenue is included in "community reimbursement revenue" on the Company’s Consolidated Statements of Operations and Comprehensive Loss. The related costs are included in "community reimbursement expense" on the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company recognized revenue from management fees of $0.6 million and $0.8 million, during the three and nine months ended September 30, 2020, respectively. The Company recognized revenue from reimbursed costs incurred on behalf of managed communities of $9.6 million and $11.9 million, during the three and nine months ended September 30, 2020, respectively. Lease Accounting Management determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of the identified asset means the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. Operating lease right-of-use assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term on the lease commencement date. When the implicit lease rate is not determinable, management uses the Company’s incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future minimum lease payments. The expected lease terms include options to extend or terminate the lease when it is reasonably certain the Company will exercise such options. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease terms. Financing lease right-of-use assets are recognized within property, plant and equipment and leasehold improvements, net on the Company's Consolidated Balance Sheets. The Company recognizes interest expense on the financing lease liabilities utilizing the effective interest method. The right-of-use asset is generally amortized to depreciation and amortization expense on a straight-line basis over the lease term. Modifications to existing lease agreements, including changes to the lease term or payment amounts, are reviewed to determine whether they result in a separate contract. For modifications that do not result in a separate contract, management reviews the lease classification and re-measures the related right-of-use assets and liabilities at the effective date of the modification. Certain of the Company’s lease arrangements have lease and non-lease components. The Company accounts for the lease components and non-lease components as a single lease component for all classes of underlying assets. Leases with an expected lease term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the expected lease term. Credit Risk and Allowance for Doubtful Accounts The Company’s resident receivables are generally due within 30 days from the date billed. Accounts receivable are reported net of an allowance for doubtful accounts of $7.9 million and $8.6 million at September 30, 2020, and December 31, 2019, respectively, and represent the Company’s estimate of the amount that ultimately will be collected. The adequacy of the Company’s allowance for doubtful accounts is reviewed on an ongoing basis, using historical payment trends, write-off experience, analyses of receivable portfolios by payor source and aging of receivables, as well as a review of specific accounts, and adjustments are made to the allowance as necessary. Credit losses on resident receivables have historically been within management’s estimates, and management believes that the allowance for doubtful accounts adequately provides for expected losses. Self-Insurance Liability Accruals The Company offers full-time employees an option to participate in its health and dental plans. The Company is self-insured up to certain limits and is insured if claims in excess of these limits are incurred. The cost of employee health and dental benefits, net of employee contributions, is shared between the corporate office and the senior housing communities based on the respective number of plan participants. Funds collected are used to pay the actual program costs, including estimated annual claims, third-party administrative fees, network provider fees, communication costs, and other related administrative costs incurred by the plans. Claims are paid as they are submitted to the Company’s third-party administrator. The Company records a liability for outstanding claims and claims that have been incurred but not yet reported. This liability is based on the historical claim reporting lag and payment trends of health insurance claims. Additionally, the Company may be liable for an Employee Shared Responsibility Payment (“ESRP”) pursuant to the Affordable Care Act. The ESRP is applicable to employers that had 50 or more full-time equivalent employees, did not offer minimum essential coverage (“MEC”) to at least 70% of full-time employees and their dependents, or did offer MEC to at least 70% of full-time employees and their dependents that did not meet the affordable or minimum value criteria and had one or more full-time employees certified as being allowed the premium tax credit. The IRS determines the amount of the proposed ESRP from information returns completed by employers and from income tax returns completed by employees. Management believes that the liabilities recorded and reserves established for outstanding losses and expenses are adequate to cover the ultimate cost of losses and expenses incurred at September 30, 2020; however, actual claims and expenses may differ. Any subsequent changes in estimates are recorded in the period in which they are determined. The Company uses a combination of insurance and self-insurance for workers’ compensation. Determining the reserve for workers’ compensation losses and costs that the Company has incurred as of the end of a reporting period involves significant judgments based on projected future events including potential settlements for pending claims, known incidents which may result in claims, estimates of incurred but not yet reported claims, changes in insurance premiums, estimated litigation costs and other factors. The Company regularly adjusts these estimates to reflect changes in the foregoing factors. However, since this reserve is based on estimates, the actual expenses incurred may differ from the amounts reserved. Any subsequent changes in estimates are recorded in the period in which they are determined. Income Taxes Income taxes are computed using the asset and liability method and current income taxes are recorded based on amounts refundable or payable in the current year. The effective tax rates for the three and nine months ended September 30, 2020 and 2019 differ from the statutory tax rates due to state income taxes, permanent tax differences, and changes in the deferred tax asset valuation allowance. The Company is impacted by the Texas Margin Tax (“TMT”), which effectively imposes tax on modified gross revenues for communities within the State of Texas. The Company consolidates 38 Texas communities for purposes of the TMT, which contributes to the overall provision for income taxes. Deferred income taxes are recorded based on the estimated future tax effects of loss carryforwards and temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which the Company expects those carryforwards and temporary differences to be recovered or settled. Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income. At year end, the Company had a three-year cumulative operating loss for its U.S. operations and accordingly, has provided a full valuation allowance on its U.S. and state net deferred tax assets. The valuation allowance reduces the Company’s net deferred tax assets to the amount that is “more likely than not” (i.e., a greater than 50% likelihood) to be realized. However, in the event that the Company were to determine that it would be more likely than not that the Company would realize the benefit of deferred tax assets in the future in excess of their net recorded amounts, adjustments to deferred tax assets would increase net income in the period such determination was made. The benefits of the net deferred tax assets might not be realized if actual results differ from expectations. The Company evaluates uncertain tax positions through consideration of accounting and reporting guidance on criteria, measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better financial statement comparability among different companies. The Company is required to recognize a tax benefit in its financial statements for an uncertain tax position only if management’s assessment is that such position is “more likely than not” to be upheld on audit based only on the technical merits of the tax position. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as income tax expense. The Company is generally no longer subject to federal and state tax audits for years prior to 2016 and 2015, respectively. On March 18, 2020, the Families First Coronavirus Response Act (FFCR Act), and on March 27, 2020, the CARES Act were each enacted in response to the COVID-19 pandemic. The FFCR Act and the CARES Act contain numerous income tax provisions, such as relaxing limitations on the deductibility of interest and the use of net operating losses arising in taxable years beginning after December 31, 2017. Future regulatory guidance under the FFCR Act and the CARES Act remains forthcoming, and such guidance could ultimately increase or lessen their impact on the Company’s business and financial condition. Net Loss Per Share Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Potentially dilutive securities consist of unvested restricted shares and shares that could be issued under outstanding stock options. Potentially dilutive securities are excluded from the computation of net loss per common share if their effect is antidilutive. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except for per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net loss $ (214,964 ) $ (20,731 ) $ (274,898 ) $ (46,249 ) Net loss allocated to unvested restricted shares — — — — Undistributed net loss allocated to common shares $ (214,964 ) $ (20,731 ) $ (274,898 ) $ (46,249 ) Weighted average shares outstanding – basic 30,730 30,324 30,578 30,236 Effects of dilutive securities: Employee equity compensation plans — — — — Weighted average shares outstanding – diluted 30,730 30,324 30,578 30,236 Basic net loss per share – common shareholders $ (7.00 ) $ (0.68 ) $ (8.99 ) $ (1.53 ) Diluted net loss per share – common shareholders $ (7.00 ) $ (0.68 ) $ (8.99 ) $ (1.53 ) Awards of unvested restricted stock and restricted stock units representing approximately 685,000 shares, as well as 147,000 outstanding stock options, were antidilutive as a result of the net loss reported by the Company for the three and nine months ended September 30, 2020. Awards of unvested restricted stock and restricted stock units representing approximately 1,128,000 shares and approximately 147,000 stock options, were antidilutive as a result of the net loss reported by the Company for the three and nine months ended September 30, 2019. Accordingly, such shares and options were not included in the calculation of diluted weighted average shares outstanding for the three and nine months ended September 30, 2020 and 2019. Treasury Stock The Company accounts for treasury stock under the cost method and includes treasury stock as a component of shareholders’ equity (deficit). All shares acquired by the Company have been purchased in open-market transactions. There were no repurchases of the Company’s common stock during the nine months ended September 30, 2020 or fiscal 2019. Recently Issued Accounting Guidance In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments |
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets | 9 Months Ended |
Sep. 30, 2020 | |
Asset Impairment Charges [Abstract] | |
Impairment of Long-Lived Assets | 4. IMPAIRMENT OF LONG-LIVED ASSETS During the first quarter of 2020, the Company determined that the modifications of certain of its Master Lease Agreements (see “Note 5- Dispositions and Other Significant Transactions”) and adverse impacts on the Company’s operating results resulting from the COVID-19 pandemic were indicators of potential impairment of its long-lived assets. As such, the Company evaluated its long-lived asset groups for impairment and identified communities with a carrying amount of the assets in excess of the estimated future undiscounted net cash flows expected to be generated by the assets. In March 2020, the Company entered into forbearance agreements with Ventas and Welltower, which, among other things, provide that the lease agreements covering the communities will be converted into property management agreements with the Company as manager on December 31, 2020 if the properties have not transitioned to a successor operator on or prior to such date (see “Note 5- Dispositions and Other Significant Transactions”). The Company’s leases with Ventas and Welltower were originally scheduled to mature during 2025 and 2026. Due to the modification of the lease term and the expected impacts of the COVID-19 pandemic, the Company evaluated certain owned communities and all leased communities for impairment and tested the recoverability of these assets by comparing projected undiscounted cash flows associated with these assets to their respective historical carrying values. For communities in which the historical carrying value was not recoverable, the Company compared the estimated fair value of the assets to their carrying amount and recorded an impairment charge for the excess of carrying amount over fair value. For the operating lease right-of-use assets, fair value was estimated utilizing a discounted cash flow approach based on historical and projected cash flows and market data, including management fees and a market supported lease coverage ratio. The fair values of the property and equipment, net of these communities, were primarily determined utilizing the cost approach, which determines the current replacement cost of the property being appraised and then deducts for the loss in value caused by physical deterioration, functional obsolescence, and economic obsolescence the amount required to replace the asset as if new and adjusts to reflect usage. These fair value measurements are considered Level 3 measurements within the valuation hierarchy. During the first quarter of 2020, the Company recorded non-cash impairment charges of $6.2 million and $29.8 million to operating lease right-of-use assets, net and property and equipment, net, respectively. During the three months ended September 30, 2020, the Company recorded non-cash impairment charges of $1.3 million and $1.1 million to operating lease right-of-use assets, net and property and equipment, net, respectively, due to a change in the useful life of 15 of its communities, all of which transferred to new operators subsequent to quarter-end (see “Note 12, Subsequent Events,” for discussion of these properties’ transitions). Due to the changes in useful lives, the Company concluded the assets related to those properties had indicators of impairment and the carrying values were not fully recoverable. The fair values of the right-of-use assets were estimated, using level 3 inputs as defined in the accounting standards codification, utilizing a discounted cash flow approach based upon historical and projected cash flows and market data, including management fees and a market supported lease coverage ratio. In addition, during the three months ended September 30, 2020 the Company recorded a non-cash impairment charge of $0.8 million to property and equipment, net of one owned community. The fair value of the property and equipment, net of this community was determined was determined using the sales comparison approach, which utilizes the sales of comparable properties, and the income capitalization approach, which reflects the property’s income-producing capabilities. This impairment charge is primarily due to the COVID-19 pandemic and lower than expected operating performance at the community and reflects the amount by which the carrying amount of these assets exceeded their fair value. In total, the Company recognized non-cash impairment charges of $3.2 million and $39.2 million for the three and nine months ended September 30, 2020, respectively. The Company did not record any impairment charges for the three or nine months ended September 30, 2019. |
Dispositions and Other Signific
Dispositions and Other Significant Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Dispositions And Other Significant Transactions [Abstract] | |
Dispositions and Other Significant Transactions | 5. DISPOSITIONS AND OTHER SIGNIFICANT TRANSACTIONS Disposition of Boca Raton, Florida Community Effective January 15, 2020, the Company’s leased senior living community located in Boca Raton, Florida transitioned to a new operator. In conjunction with the transition, the Company paid the lessor, Healthpeak, a one-time $0.3 million termination payment as a prepayment against the remaining lease payments and was relieved of any additional obligation to Healthpeak with regard to that property and the lease was terminated as to this property. The Company recorded an approximate $1.8 million gain on the transaction, which is included in gain (loss) on facility lease modification and termination, net on the Company’s Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2020. Disposition of Merrillville, Indiana Community Effective March 31, 2020, the Company sold one community located in Merrillville, Indiana for a total purchase price of $7.0 million and received approximately $6.9 million in cash proceeds after paying customary closing costs. The community was unencumbered by any mortgage debt. The Company recognized a loss of $7.4 million on the disposition, which is included in loss on disposition of assets, net on the Company’s Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2020. The community was comprised of 171 assisted living units and 42 memory care units. Early Termination of Master Lease Agreements As of December 31, 2019, the Company leased 46 senior housing communities from certain real estate investment trusts (“REITs”). The Company transitioned one community to a different operator effective January 15, 2020. During the first quarter of 2020, the Company entered into agreements, which restructured or terminated certain of its Master Lease Agreements with each of its landlords as further described below. After giving effect to such transactions, the disposition of the Company’s Boca Raton community in January 2020, and the disposition of five communities in September 2020, as of September 30, 2020, the Company leased 34 senior living communities from the REITs and managed six senior living communities for the account of Healthpeak. Ventas As of December 31, 2019, the Company leased seven senior housing communities from Ventas. The term of the Ventas lease agreement was scheduled to expire on September 30, 2025. On March 10, 2020, the Company entered into an agreement with Ventas (as amended, the “Ventas Agreement”), providing for the early termination of its Master Lease Agreement with Ventas covering all seven communities. Pursuant to such agreement, among other things, from February 1, 2020 through December 31, 2020, the Company agreed to pay Ventas rent of approximately $1.0 million per month for such communities as compared to approximately $1.3 million per month that would otherwise have been due and payable under the Master Lease Agreement. In addition, the Ventas Agreement provides that the Company will not be required to comply with certain financial covenants of the Master Lease Agreement during the forbearance period, which terminates on December 31, 2020 absent any defaults by the Company. In conjunction with the Ventas Agreement, the Company released to Ventas $4.1 million in security deposits and $2.5 million in escrow deposits held by Ventas, and Ventas reduced the amounts and term of the Company’s lease payments, and effectively eliminated the Company’s lease termination obligation, which was $11.4 million at December 31, 2019. The Ventas Agreement provides that Ventas can terminate the Master Lease Agreement, with respect to any or all communities upon 30 days’ notice. The effective date of termination may not be later than December 31, 2020. Upon termination, Ventas may elect to enter into a property management agreement with the Company as manager or transition the properties to a new operator. If, as of December 1, 2020, Ventas has not delivered a termination notice for any communities subject to the Master Lease Agreement, then, with respect to any such communities, Ventas will be deemed to have delivered a termination notice electing to enter into a property management agreement with the Company as manager for such communities with an effective date of December 31, 2020. Any such management agreement will provide for a management fee equal to 5% of gross revenues of the applicable community payable to the Company and other customary terms and conditions. The Ventas Agreement also provides that the Company will not be obligated to fund certain capital expenditures under the Master Lease Agreement during the applicable forbearance period and Ventas will reimburse the Company for certain specified capital expenditures. In accordance with ASC Topic 842, the reduction in the monthly minimum rent payable to Ventas and modification of the lease term pursuant to the Ventas Agreement was determined to be a modification of the Master Lease Agreement. As such, the Company reassessed the classification of the Master Lease Agreement with Ventas based on the modified terms and determined that the lease continued to be classified as an operating lease until the communities transitioned to a different operator or management agreement, at which time the lease would terminate. The modification resulted in a reduction to the lease termination obligation, lease liability and operating lease right-of-use asset recorded in the Company's Consolidated Balance Sheets by approximately $11.4 million, $51.6 million, and $47.8 million, respectively, during the first quarter of 2020. The Company recognized a net gain of approximately $8.4 million on the transaction, which is included in gain (loss) on facility lease modification and termination, net on the Company’s Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2020 and was primarily due to the impact of the change in lease term on certain of the right-of-use asset balances. As a result of the lease modification, the Company assessed the operating lease right-of-use assets for impairment during the first quarter of 2020. See “Note 4- Impairment of Long Lived Assets.” Welltower As of December 31, 2019, the Company leased 24 senior housing communities from Welltower. The initial terms of the Welltower lease agreements were scheduled to expire on various dates from April 2025 through April 2026. On March 15, 2020, the Company entered into an agreement with Welltower (the “Welltower Agreement”), providing for the early termination of three Master Lease Agreements between it and Welltower covering all 24 communities. Pursuant to the Welltower Agreement, among other things, from February 1, 2020 through December 31, 2020, the Company agreed to pay Welltower rent of approximately $2.2 million per month for such communities as compared to approximately $2.8 million per month that would otherwise have been due and payable under the Master Lease Agreements. In addition, the Welltower Agreement provides that the Company will not be required to comply with certain financial covenants of the Master Lease Agreements during the forbearance period, which terminates on December 31, 2020, absent any defaults by the Company. In conjunction with the Welltower Agreement, the Company agreed to release $6.5 million in letters of credit to Welltower, which were released during the three months ended June 30, 2020. The Welltower Agreement provides that Welltower can terminate the agreement, with respect to any or all communities upon 30 days’ notice. The effective date of termination may not be later than December 31, 2020. Upon termination, Welltower may elect to enter into a property management agreement with the Company as manager or to transition the properties to a new operator. If, as of December 1, 2020, Welltower has not delivered a termination notice for any communities subject to the Master Lease Agreements, then, with respect to any such communities, Welltower will be deemed to have delivered a termination notice electing to enter into a property management agreement with the Company as manager for such communities with an effective date of December 31, 2020. Any such management agreement will provide for a management fee equal to 5% of gross revenues of the applicable community payable to the Company and other customary terms and conditions. The Welltower Agreement also provides that the Company will not be obligated to fund certain capital expenditures under the Master Lease Agreements during the applicable forbearance period and Welltower will reimburse the Company for certain specified capital expenditures. In accordance with ASC Topic 842, the reduction in the monthly minimum rent payable to Welltower under the then- existing Master Lease Agreements with Welltower and modification to the lease term pursuant to the Welltower Agreement was determined to be a modification of the Master Lease Agreements. As such, the Company reassessed the classification of the Master Lease Agreements based on the modified terms and determined that the each of the lease s continued to be classified as an operating lease until the applicable communit ies transitioned to a different operator or management agreement, at which time such lease would terminate. The modification resulted in a reduction to the lease liability and operating lease right-of-use asset recorded in the Company's C onsolidated B alance S heets by approximately $ million, and $ million, respectively, during the first quarter of 2020. The Company recognized a gain of approximately $ 8.0 million on the transaction, which is included in gain (loss) on facility lease modification and termination, net on the Company’s Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2020. As a result of the lease modification, the Company assessed the operating lease right-of-use assets for impairment during the first quarter of 2020 . See “Note 4- Impairment of Long Lived Assets.” During the three months ended September 30, 2020, Welltower elected to terminate the agreement with respect to five communities, all of which transferred to a different operator on September 10, 2020. The Company recorded an approximate $0.7 million loss on the transaction, which is included in gain (loss) on facility lease modification and termination, net on the Company’s Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2020. Healthpeak On March 1, 2020, the Company entered into an agreement with Healthpeak (“the Healthpeak Agreement”), effective February 1, 2020, providing for the early termination of one of its Master Lease Agreements with Healthpeak, which was previously scheduled to mature in April 2026. Such Master Lease Agreement terminated and was converted into a Management Agreement under a RIDEA structure pursuant to which the Company agreed to manage the six communities that were subject to the Master Lease Agreement until such communities are sold by Healthpeak. Pursuant to the Management Agreement, the Company will receive a management fee equal to 5% of gross revenues realized at the applicable senior living communities plus reimbursement for its direct costs and expenses related to such communities. gain (loss) on facility lease modification and termination, net on the Company’s Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2020 On May 20, 2020, the Company entered into an additional agreement with Healthpeak, effective April 1, 2020 until the end of the lease term. Pursuant to such agreement, the Company began paying Healthpeak rent of approximately $0.7 million per month for eight senior housing communities subject to a Master Lease Agreement with Healthpeak in lieu of approximately $0.9 million of monthly rent due and payable under the Master Lease Agreement covering such communities. The rents paid to Healthpeak represent approximately 75% of their scheduled rates, with the remaining rent being subject to payment by the Company pursuant to a three-year Disposition of Kokomo, Indiana Community Effective May 1, 2019, the Company closed the sale of one senior housing community located in Kokomo, Indiana, for a total purchase price of $5.0 million and received approximately $1.4 million in net proceeds |
Debt Transactions
Debt Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt Transactions | 6. DEBT TRANSACTIONS Transactions Involving Certain Fannie Mae Loans The CARES Act, among other things, permitted borrowers with mortgages from Government Sponsored Enterprises who experienced a financial hardship related to COVID-19 for up to 90 days On May 7, 2020, the Company entered into forbearance agreements with Berkadia Commercial Mortgage LLC, as servicer of 23 of its Fannie Mae loans covering 20 properties. On May 9, 2020, the Company entered into a forbearance agreement with Wells Fargo Bank (“Wells Fargo”), as servicer of one Fannie Mae loan covering one property . On May 20, 2020, the Company entered into forbearance agreements with KeyBank, as servicer of three Fannie Mae loans covering two properties. The forbearance agreements allow ed the Company to withhold the loan payments due under the loan agreements for the months of April, May and June 2020 and Fannie Mae agreed to forbear in exercising its rights and remedies during such period. During this three-month loan payment forbearance, the Company agree d to pay to Fannie Mae monthly all net operating income, if any, as defined in the forbearance agreement, for the properties receiving forbearance . On July 8, 2020, the Company entered into forbearance extension agreements with Fannie Mae, which provided for a one month extension of the forbearance agreements between it and Fannie Mae covering 23 properties. The forbearance extension agreements extended the forbearance period until July 31, 2020, and Fannie Mae agreed to forbear in exercising its rights and remedies during such period. By July 31, 2020, the Company was required to repay to Fannie Mae the deferred payments, less payments made during the forbearance period. On July 31, 2020, the Company made required payments to Fannie Mae totaling $0.6 million, which included the deferred payments, less payments made during the forbearance period, for five properties with forbearance agreements. The Company elected not to pay $3.9 million on the loans for the remaining 18 properties as of that date as it initiated a process which is intended to transfer the operations and ownership of such properties to Fannie Mae. Therefore, the Company was in default on such loans. As a result of the default, Fannie Mae filed a motion with the United States District Court requesting that a receiver be appointed over the 18 properties, which was approved by the court. The Company agreed to continue to manage the 18 communities, subject to earning a management fee, until legal ownership of the properties is transferred to Fannie Mae. Management fees earned from the properties are recognized as revenue when earned. In conjunction with the receivership order, the Company must obtain approval from the receiver for all payments, but will receive reimbursements from Fannie Mae for reasonable operating expenses incurred on behalf of any of the 18 communities under the receivership order. As a result of the events of default and receivership order, the Company discontinued recognizing revenues and expenses related to the 18 properties effective August 1, 2020, which was the date of default. In addition, the Company concluded it was no longer entitled to receive any existing accounts receivable or revenue related to the properties, all amounts held in escrow by Fannie Mae had been forfeited, and that the Company no longer has control of the properties in accordance ASC 610-20. As such, the Company derecognized the assets and recorded a loss of $191.0 million on the transaction, which is included in loss on disposition of assets, net on the Company’s Consolidated Statements of Operations and Comprehensive Loss during the three and nine months ended September 30, 2020. Once legal ownership of the properties transfers to Fannie Mae and the liabilities relating to such communities have been extinguished, the Company expects to recognize a gain related to the extinguishment in accordance with ASC 470. At September 30, 2020, the Company included $217.7 million in outstanding debt in current portion of notes payable, net of deferred loan costs, and $6.1 million of accrued interest in accrued expenses on the Company’s Consolidated Balance Sheets related to these properties. Debt Forbearance Agreement on BBVA Loan The Company also entered into a loan amendment with another lender, BBVA, USA, related to a loan covering three properties pursuant to which the Company deferred monthly debt service payments for April, May and June 2020, which deferred payments are added to principal and due in June 2021. At September 30, 2020, the Company had deferred payments of $0.9 million related to the BBVA loan, which were included in notes payable, net of deferred loan costs and current portion Debt Forbearance Agreement on HUD Loan The Company also entered into a debt forbearance agreement with ORIX Real Estate Capital, LLC (“ORIX”), related to a U.S. Department of Housing and Urban Development (“HUD”) loan covering one property pursuant to which the Company deferred monthly debt service payments for April, May and June 2020, which deferred payments are added to the regularly scheduled payments in equal installments for one year following the forbearance period. At September 30, 2020, the Company had deferred payments of $0.1 million related to the ORIX loan, which were included in notes payable, net of deferred loan costs and current portion Protective Life Amendments to Loan Agreements and Loan Modification and Temporary Deferral Agreements On May 21, 2020, the Company entered into amendments to its loan agreements with one of its lenders, Protective Life Insurance Company (“Protective Life”), related to loans covering 10 properties. These amendments allow the Company to defer principal and interest payments for April, May and June 2020 and to defer principal payments for July 2020 through March 2021, with such deferral amounts being added to principal due at maturity in either 2025 or 2026, depending upon the loan. At September 30, 2020, the Company had deferred payments of $3.2 million related to the Protective Life loans, of which $1.7 million was included in accrued expenses in the Company’s Consolidated Balance Sheets. The remaining $1.5 million of which were included in notes payable, net of deferred loan costs and current portion payments for October, November, and December 2020 and to continue to defer principal payments through September 30, 2021. See “Note 12- Subsequent Events.” Letters of Credit The Company previously issued standby letters of credit with Wells Fargo, totaling approximately $3.4 million, for the benefit of Hartford Financial Services (“Hartford”) in connection with the administration of workers’ compensation. On August 27, 2020, the available letters of credit were increased to $4.0 million, all of which remained outstanding as of September 30, 2020. The Company previously issued standby letters of credit with JP Morgan Chase Bank (“Chase”), totaling approximately $6.5 million, for the benefit of Welltower, in connection with certain leases between Welltower and the Company. The letters of credit were surrendered and paid to Welltower in conjunction with the Welltower Agreement during the quarter ended June 30, 2020. The Company previously issued standby letters of credit with Chase, totaling approximately $2.9 million, for the benefit of Healthpeak in connection with certain leases between Healthpeak and the Company. The letters of credit were released to the Company during the first quarter of 2020 and were included in cash and cash equivalents on the Company’s Consolidated Balance Sheets. Notes Payable The senior housing communities owned by the Company and encumbered by mortgage debt are provided as collateral under their respective loan agreements. At September 30, 2020 and December 31, 2019, these communities carried a total net book value of approximately $883.7 million and $898.0 million, respectively, with total mortgage loans outstanding, excluding deferred loan costs, of approximately $921.6 million and $926.5 million, respectively. On June 15, 2020, the Company renewed certain insurance policies and entered into a finance agreement totaling approximately $2.2 million. The finance agreement has a fixed interest rate of 4.60% with the principal being repaid over a 10-month term. On May 20, 2020, the Company entered into an agreement with Healthpeak (“the Healthpeak Forbearance”), effective April 1, 2020, through the lease term ending October 31, 2020, to defer a percentage of rent payments. At September 30, 2020, the Company had deferred $1.4 million in rent payments, which is included in notes payable, net of deferred loan costs and current portion on the Company’s Consolidated Balance Sheets. See “Note 5- Dispositions and Other Significant Transactions.” As such, the Company included $31.5 million in outstanding debt related to those properties in current portion of notes payable, net of deferred loan costs, on the Company’s Consolidated Balance Sheets at September 30, 2020. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Equity | 7. EQUITY Preferred Stock The Company is authorized to issue preferred stock in series and to fix and state the voting powers and such designations, preferences and relative participating, optional or other special rights of the shares of each such series and the qualifications, limitations and restrictions thereof. Such action may be taken by the Company’s board of directors without stockholder approval. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of preferred stock. No preferred stock was outstanding as of September 30, 2020 or December 31, 2019. Share Repurchases On January 22, 2009, the Company’s board of directors approved a share repurchase program that authorized the Company to purchase up to $10.0 million of the Company’s common stock. Purchases may be made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or block trades, or by any combination of such methods, in accordance with applicable insider trading and other securities laws and regulations. The size, scope and timing of any purchases will be based on business, market and other conditions and factors, including price, regulatory and contractual requirements or consents, and capital availability. The repurchase program does not obligate the Company to acquire any particular amount of common stock and the share repurchase authorization has no stated expiration date. Shares of stock repurchased under the program will be held as treasury shares. Pursuant to this authorization, during fiscal 2009, the Company purchased 349,800 shares at an average cost of $2.67 per share for a total cost to the Company of approximately $0.9 million. On January 14, 2016, the Company announced that its board of directors approved a continuation of the share repurchase program. Pursuant to this authorization, during the first quarter of fiscal 2016, the Company purchased 144,315 shares of its common stock at an average cost of $17.29 per share for a total cost to the Company of approximately $2.5 million. All such purchases were made in open market transactions. The Company has not purchased any additional shares of its common stock pursuant to the Company’s share repurchase program during the three or nine months ended September 30, 2020 or fiscal 2019. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 8. STOCK-BASED COMPENSATION The Company recognizes compensation expense for share-based stock awards to certain employees and directors, including grants of employee stock options and awards of restricted stock, in the Company’s Consolidated Statements of Operations and Comprehensive Loss based on their fair values. On May 14, 2019, the Company’s stockholders approved the 2019 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation (the “2019 Plan”), which replaced the 2007 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation (as amended, the “2007 Plan”). The 2019 Plan provides for, among other things, the grant of restricted stock awards, restricted stock units and stock options to purchase shares of the Company’s common stock. The 2019 Plan authorizes the Company to issue up to 2,250,000 shares of common stock plus reserved shares not issued or subject to outstanding awards under the 2007 Plan, and the Company has reserved shares of common stock for future issuance pursuant to awards under the 2019 Plan. Effective March 26, 2019, the 2007 Plan was terminated and no additional awards will be granted under the 2007 Plan. Stock Options The Company may periodically grant stock options as a long-term retention tool that is intended to attract, retain and provide incentives for employees, officers and directors and to more closely align stockholder interests with those of our employees and directors. The Company’s stock options generally vest over a period of one to five years and the related expense is amortized on a straight-line basis over the vesting period. A summary of the Company’s stock option activity and related information for the nine months ended September 30, 2020 is presented below: Outstanding at Beginning of Period Granted Exercised Cancelled Outstanding at End of Period Options 147,239 – – – 147,239 At September 30, 2020, the options outstanding had no intrinsic value, a weighted-average remaining contractual life of 8.25 years, and a weighted average exercise price of $7.46. At September 30, 2020, there was approximately $0.2 million of total unrecognized compensation expense, which is expected to be recognized over a weighted average period of 1.25 years. At September 30, 2020, 48,588 options were exercisable, and the remaining options were unvested. There were no stock options granted during the three or nine months ended September 30, 2020. Restricted Stock The Company periodically grants restricted stock awards and units to employees, officers, and directors in order to attract, retain, and provide incentives for such individuals and to more closely align stockholder and employee interests. For restricted stock awards and units without performance and market-based vesting conditions, the Company records compensation expense for the entire award on a straight-line basis over the requisite service period, which is generally a period of one to four years, unless the award is subject to certain accelerated vesting requirements. Restricted stock awards are considered outstanding at the time of grant since the holders thereof are entitled to dividends, upon vesting, and voting rights. For restricted stock awards with performance and market-based vesting conditions, total compensation expense is recognized over the requisite service period for each separately vesting tranche of the award as if the award is, in substance, multiple awards once the performance target is deemed probable of achievement. Performance goals are evaluated periodically, and if such goals are not ultimately met or it is not probable the goals will be achieved, no compensation expense is recognized and any previously recognized compensation expense is reversed for performance-based awards. The Company recognizes compensation expense of a restricted stock award over its respective vesting or performance period based on the fair value of the award on the grant date, net of actual forfeitures. A summary of the Company’s restricted stock awards activity and related information for the nine months ended September 30, 2020 is presented below: Outstanding at Beginning of Period Granted Vested Cancelled Outstanding at End of Period Shares 1,089,346 – (301,740 ) (102,359 ) 685,247 The restricted stock outstanding at September 30, 2020 had an intrinsic value of approximately $0.5 million. There were no grants of restricted stock awards or restricted stock units during the three or nine months ended September 30, 2020. The Company recognized $0.4 million and $1.5 million in stock-based compensation expense during the three and nine months ended September 30, 2020, respectively, and $0.9 million and $1.6 million during the three and nine months ended September 30, 2019, respectively, which is primarily associated with employees whose corresponding salaries and wages are included within general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. Unrecognized stock-based compensation expense was $1.7 million as of September 30, 2020. If all awards granted are earned, the Company expects this expense to be recognized over a one to three-year one to four-year |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | 9. CONTINGENCIES The Company has claims incurred in the normal course of its business. Most of these claims are believed by management to be covered by insurance, subject to normal reservations of rights by the insurance companies and possibly subject to certain exclusions in the applicable insurance policies. Whether or not covered by insurance, these claims, in the opinion of management, based on advice of legal counsel, should not have a material effect on the consolidated financial statements of the Company if determined adversely to the Company. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 10. FAIR VALUE MEASUREMENTS Financial Instruments The carrying amounts and fair values of financial instruments at September 30, 2020 and December 31, 2019, are as follows (in thousands): September 30, 2020 December 31, 2019 Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 14,293 $ 14,293 $ 23,975 $ 23,975 Restricted cash 3,982 3,982 13,088 13,088 Notes payable, excluding deferred loan costs 923,048 921,567 930,085 899,326 The following methods and assumptions were used in estimating the Company’s fair value disclosures for financial instruments: Cash and cash equivalents and Restricted cash: The carrying amounts reported in the Company’s Consolidated Balance Sheets for cash and cash equivalents and restricted cash approximate fair value, which represent level 1 inputs as defined in the accounting standards codification. Notes payable, excluding deferred loan costs: The fair value of notes payable, excluding deferred loan costs, is estimated using discounted cash flow analysis, based on current incremental borrowing rates for similar types of borrowing arrangements, which represent level 2 inputs as defined in the accounting standards codification. Assets Held for Sale : During the three and nine months ended September 30, 2020, no senior living communities were classified as assets held for sale. During the first quarter of 2019, the Company classified one senior living community as held for sale and recognized a remeasurement write-down of approximately $2.3 million to adjust the carrying values of the assets to their fair value, net of cost of disposal. The senior living community was sold during the second quarter of 2019 for its carrying value. During the third quarter of 2019, the Company classified two senior living communities as held for sale, which required no remeasurement to adjust the carrying values to the fair values. The Company determines, using level 2 inputs as defined in the accounting standards codification, the fair value, net of costs of disposal, of an asset on the date the asset is categorized as held for sale, and the asset is recorded at the lower of its fair value, net of cost of disposal, or carrying value on that date. The Company periodically reevaluates assets held for sale to determine if the assets are still recorded at the lower of fair value, net of cost of disposal, or carrying value. The fair values are generally determined based on market rates, industry trends and recent comparable sales transactions. Operating Lease Right-Of-Use Assets The Company recorded non-cash impairment charges to operating lease right-of-use assets, net of $1.3 million and $7.5 million for the three and nine months ended September 30, 2020, respectively. The Company recognized impaired operating lease right-of-use assets, net at their fair values of $15.0 million and $0.5 million at March 31, 2020 and September 30, 2020 respectively. The fair values of the right-of-use assets were estimated, using level 3 inputs as defined in the accounting standards codification, utilizing a discounted cash flow approach based upon historical and projected cash flows and market data, including management fees and a market supported lease coverage ratio of 1.1. The range of discount rates utilized was 7.7% to 10.3%, depending upon the property type and geographical location of the respective community. See “Note 4- Impairment of Long-Lived Assets.” Property and Equipment, Net During the three and nine months ended September 30, 2020, the Company recorded non-cash impairment charges of $1.9 million and $31.7 million to property and equipment, net, respectively. The fair value of the impaired assets was $10.5 million and $12.5 million at March 31, 2020 and September 30, 2020, respectively. At March 31, 2020, the fair values of the property and equipment, net of these communities were primarily determined utilizing the cost approach, which determines the current replacement cost of the property being appraised and then deducts for the loss in value caused by physical deterioration, functional obsolescence, and economic obsolescence the amount required to replace the asset as if new and adjusts to reflect usage. At September 30, 2020, the fair value of the property and equipment, net of the owned community was determined using the sales comparison approach, which utilizes the sales of comparable properties, and the income capitalization approach, which reflects the property’s income-producing capabilities. The fair values of the property and equipment, net of the leased communities were primarily determined utilizing a discounted cash flow approach considering stabilized facility operating income and market capitalization rates. All of the aforementioned fair value measurements are considered Level 3 measurements within the valuation hierarchy. The estimated fair value of these assets and liabilities could be affected by market changes and this effect could be material. As of September 30, 2020, there was a wide range of possible outcomes as a result of the COVID-19 pandemic, as there was a high degree of uncertainty about its ultimate impacts. Management’s estimates of the impacts of the pandemic are highly dependent on variables that are difficult to predict, including the duration, severity, and geographic concentrations of the pandemic and any resurgence of the disease, the duration and degree to which visitors are restricted from the Company's communities, the effect of the pandemic on the demand for senior living communities, the degree to which the Company may receive government financial relief and the timing thereof, and the duration and costs of the Company’s response efforts. Future events may indicate differences from management's current judgments and estimates which could, in turn, result in future impairments. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | 11. LEASES Management determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of the identified asset means the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. Operating lease right-of-use assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term on the lease commencement date. When the implicit lease rate is not determinable, management uses the Company’s incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future minimum lease payments. As of September 30, 2020, the weighted average discount rate and average remaining lease terms of the Company's operating leases was % and 0.4 years , respectively. The expected lease terms include options to extend or terminate the lease when it is reasonably certain the Company will exercise such options. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease terms. Financing lease right-of-use assets are recognized within property, plant and equipment and leasehold improvements, net on the Company's Consolidated Balance Sheets. The Company recognizes interest expense on the financing lease liabilities utilizing the effective interest method. As of September 30, 2020, the weighted average discount rate and average remaining lease term of the Company's financing leases was 7.0% and 3.3 years, respectively. The right-of-use asset is generally amortized to depreciation and amortization expense on a straight-line basis over the lease term. Certain of the Company’s lease arrangements have lease and non-lease components. The Company accounts for the lease components and non-lease components as a single lease component for all classes of underlying assets. Leases with an expected lease term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the expected lease term. The Company has operating leases for various real estate (primarily senior housing communities) and equipment as well as financing leases for certain vehicles. As of September 30, 2020, the Company leased 34 senior housing communities from certain REITs. Under these facility lease agreements, the Company is responsible for all operating costs, maintenance and repairs, insurance and property taxes. Additionally, facility leases may include contingent rent increases when certain operational performance thresholds are surpassed, at which time the right-of-use assets and lease liability will be remeasured. The recoverability of assets and depreciable life of leasehold improvements are limited by expected lease terms. There are various financial covenants and other restrictions in the Company’s lease agreements. The Company’s lease agreements do not contain any material residual value guarantees. As of September 30, 2020, the Company was not in compliance with certain provisions of the Welltower Agreement and the Ventas Agreement due to the Company’s events of default regarding certain Fannie Mae loan agreements (see “Note 6- Debt Transactions”). Ventas and Welltower subsequently waived the defaults under the Ventas Agreement and the Welltower Agreement, respectively. The Company was in compliance with all other lease covenants at September 30 2020. As of December 31, 2019, the Company was not in compliance with certain financial covenants with regard to its Master Lease Agreements with Ventas and Welltower. The Company subsequently entered into the Ventas Agreement and the Welltower Agreement with respect to such defaults. Under the agreements, the Company does not have to comply with certain financial covenants of the respective Master Lease Agreements during the forbearance period, which terminates on December 31, 2020, absent any defaults by the Company under such agreements. The Company was in compliance with all other lease covenants at December 31, 2019. A summary of operating and financing lease expense (including the respective presentation on the consolidated statement of operations) and cash flows from leasing transactions is as follows: Nine Months Ended September 30, Operating Leases (in thousands) 2020 2019 Facility lease expense $ 23,234 $ 42,706 General and administrative expenses 495 238 Operating expenses, including variable lease expense of $4,499 and $4,616 in 2020 and 2019, respectively 4,760 5,070 Total operating lease costs $ 28,489 $ 48,014 Operating lease expense adjustment 18,460 4,285 Operating cash flows from operating leases $ 46,949 $ 52,299 Nine Months Ended September 30, Financing Leases (in thousands) 2020 2019 Depreciation and amortization $ 110 $ — Interest expense: financing lease obligations 25 — Total financing lease costs 135 — Operating cash flows from financing leases $ 110 $ — Financing cash flows from financing leases 25 — Total cash flows from financing leases $ 135 $ — Future minimum lease payments associated with operating lease l i abilities recognized on the Company’s Consolidated Balance Sheet s as of September 30, 2020 , are as follows (in thousands): Year Ending December 31, Operating Leases Financing Leases 2020 (excluding the nine months ended September 30, 2020) $ 8,727 $ 39 2021 321 155 2022 132 155 2023 85 145 2024 47 7 Thereafter 3 2 Total $ 9,315 $ 503 Less: Amount representing interest (present value discount) (205 ) (52 ) Present value of lease liabilities $ 9,110 $ 451 Less: Current portion of lease liabilities (8,845 ) (126 ) Lease liabilities, net of current portion $ 265 $ 325 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. SUBSEQUENT EVENTS Protective Life Amendments to Loan Agreements and Loan Modification and Temporary Deferral Agreements Effective October 1, 2020, the Company entered into amendments to its loan agreements with one of its lenders, Protective Life Insurance Company, related to loans covering 10 properties. These amendments allow the Company to defer interest payments for October, November, and December 2020 and to extend the deferral period of principal payments through September 1, 2021, with such deferral amounts being added to principal due at maturity in either 2025 or 2026, depending upon the loan. Disposition of St. Louis, Missouri Community Effective October 15, 2020, the Company’s leased senior living community located in St. Louis, Missouri transitioned to a new operator. In conjunction with the transition, the Company was relieved of any additional obligation to Healthpeak with regard to that property. The transition was the second transaction under the Company’s October 22, 2019 agreement with Healthpeak. Disposition of 14 Welltower Communities Effective November 1, 2020, 14 of the Company’s leased senior living communities transitioned to new operators. The transitions were the second and third transactions under the Welltower Agreement. Healthpeak Lease Amendment Effective as of November 1, 2020, subsequent to quarter-end, the Company entered into an agreement with Healthpeak to extend the end of the lease term from October 31, 2020 to April 30, 2021 (subject to two possible three month extensions). Pursuant to such agreement, the Company will begin paying Healthpeak monthly rent of any excess cash flow of the communities and earning a management fee for continuing to manage the communities. Acceptance of Provider Relief Fund Grant On November 6, 2020, the Company accepted $8.1 million of cash for grants from the Provider Relief Fund’s Phase 2 General Distribution, which was expanded by the CARES Act to provide grants or other funding mechanisms to eligible healthcare providers for healthcare related expenses or lost revenues attributable to COVID-19. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents. The Company has deposits in banks that exceed Federal Deposit Insurance Corporation insurance limits. Management believes that credit risk related to these deposits is minimal. Restricted cash consists of deposits required by certain lenders as collateral pursuant to letters of credit. The deposits must remain so long as the letters of credit are outstanding which are subject to renewal annually. The following table sets forth the Company’s cash and cash equivalents and restricted cash (in thousands): September 30, 2020 2019 Cash and cash equivalents $ 14,293 $ 7,703 Restricted cash 3,982 13,073 $ 18,275 $ 20,776 |
Long-Lived Assets and Impairment | Long-Lived Assets and Impairment Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets. At each balance sheet date, the Company reviews the carrying value of its property and equipment to determine if facts and circumstances suggest that they may be impaired or that the depreciation period may need to be changed. The Company considers internal factors such as net operating losses along with external factors relating to each asset, including contract changes, local market developments, and other publicly available information to determine whether impairment indicators exist. If an indicator of impairment is identified, the carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flows from such asset is separately identifiable and is less than its carrying value. Recoverability of an asset group is assessed by comparing its carrying amount to the estimated future undiscounted net cash flows expected to be generated by the asset group through operation and disposition, calculated utilizing the lowest level of identifiable cash flows. If estimated future undiscounted net cash flows are less than the carrying amount of the asset then the fair value of the asset is estimated. The impairment expense is determined by comparing the estimated fair value of the asset to its carrying amount, with any amount in excess of fair value recognized as an expense in the current period. Asset groups were established at the individual property level and consist of property and equipment, net for owned properties and property and equipment, net and right-of-use assets, net for leased properties. Long-lived ROU and fixed assets are valued at fair value using inputs classified as Level 3 in the fair value hierarchy, which are unobservable inputs based on the Company’s assumptions. Impairment, if any, is recorded in the period in which the impairment occurred. |
Assets Held for Sale | Assets Held for Sale Assets are classified as held for sale when the Company has determined all of the held-for-sale criteria have been met. The Company determines the fair value, net of costs of disposal, of an asset on the date the asset is categorized as held for sale, and the asset is recorded at the lower of its fair value, net of cost of disposal, or carrying value on that date. The Company periodically reevaluates assets held for sale to determine if the assets are still recorded at the lower of fair value, net of cost of disposal, or carrying value. The fair values are generally determined based on market rates, industry trends, and recent comparable sales transactions. The actual sales price of these assets could differ significantly from the Company’s estimates. During the first quarter of 2019, the Company classified one senior housing community located in Kokomo, Indiana, as held for sale, resulting in $4.9 million being reclassified as assets held for sale and $3.5 million of corresponding mortgage debt being reclassified to the current portion of notes payable within the Consolidated Balance Sheets. The Company determined, using level 2 inputs as defined in the accounting standards codification, that the assets had an aggregate fair value, net of costs of disposal of $4.9 million. As the fair value was less than the carrying value of $7.2 million, a remeasurement write-down of approximately $2.3 million was recorded to adjust the carrying values of the assets held for sale at March 31, 2019. The senior living community was sold during the second quarter of 2019 for its carrying value. During the third quarter of fiscal 2019, the Company classified two communities, located in Springfield, Missouri and Peoria, Illinois, as assets held for sale resulting in net assets of $24.4 million being reclassified to assets held for sale and $44.4 million of corresponding mortgage debt being reclassified to the current portion of notes payable within the Company’s Consolidated Balance Sheets. The Company determined, using level 2 inputs as defined in the accounting standards codification, that the assets had an aggregate fair value of $62.8 million, net of disposal costs. The two senior living communities were sold during the fourth quarter of 2019. There were no senior housing communities classified as held for sale by the Company at September 30, 2020 or December 31, 2019. |
Off-Balance Sheet Arrangements | Off-Balance Sheet Arrangements The Company had no material off-balance sheet arrangements at September 30, 2020 or December 31, 2019. |
Revenue Recognition | Revenue Recognition Resident revenue consists of fees for basic housing and certain support services and fees associated with additional housing and expanded support requirements such as assisted living care, memory care, and ancillary services. Basic housing and certain support services revenue is recorded when services are rendered and amounts billed are Residency agreements are generally short term in nature with durations of one year or less and are typically terminable by either party, under certain circumstances, upon providing 30 days’ notice, unless state law provides otherwise, with resident fees billed monthly in advance. Revenue for certain ancillary services is recognized as services are provided, and includes fees for services such as medication management, daily living activities, beautician/barber, laundry, television, guest meals, pets, and parking which are generally billed monthly in arrears and totaled approximately $0.1 million and $1.6 million for the three and nine months ended September 30, 2020, respectively, and approximately $1.0 million and $3.1 million for the three and nine months ended September 30, 2019, respectively, as a component of resident revenue within the Company’s Consolidated Statements of Operations and Comprehensive Loss. and are recorded initially by the Company as deferred revenue. At September 30, 2020 and December 31, 2019, the Company had contract liabilities for deferred community fees totaling approximately $1.6 million and $2.2 million, respectively, which are included as a component of deferred income within current liabilities of the Company’s Consolidated Balance Sheets. During the first quarter of 2020, the Company entered into management agreements whereby it manages certain communities under a contract which provides periodic management fee payments to the Company and reimbursement for costs and expenses related to such communities. In addition, during the third quarter of 2020, the Company entered into a management agreement with Fannie Mae, whereby it manages the 18 communities of which it is in the process of legally transferring the ownership to Fannie Mae. The Company will continue to manage the communities until ownership of such communities has legally transferred to Fannie Mae. See “Note 6- Debt Transactions.” Management fees are generally determined by an agreed upon percentage of gross revenues (as defined in the management agreement). The Company has determined that all community management activities are a single performance obligation, which is satisfied over time as the services are rendered. The Company's estimate of the transaction price for management services also includes the amount of reimbursement due from the owners of the communities for services provided and related costs incurred. Such revenue is included in "community reimbursement revenue" on the Company’s Consolidated Statements of Operations and Comprehensive Loss. The related costs are included in "community reimbursement expense" on the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company recognized revenue from management fees of $0.6 million and $0.8 million, during the three and nine months ended September 30, 2020, respectively. The Company recognized revenue from reimbursed costs incurred on behalf of managed communities of $9.6 million and $11.9 million, during the three and nine months ended September 30, 2020, respectively. |
Lease Accounting | Lease Accounting Management determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of the identified asset means the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. Operating lease right-of-use assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term on the lease commencement date. When the implicit lease rate is not determinable, management uses the Company’s incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future minimum lease payments. The expected lease terms include options to extend or terminate the lease when it is reasonably certain the Company will exercise such options. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease terms. Financing lease right-of-use assets are recognized within property, plant and equipment and leasehold improvements, net on the Company's Consolidated Balance Sheets. The Company recognizes interest expense on the financing lease liabilities utilizing the effective interest method. The right-of-use asset is generally amortized to depreciation and amortization expense on a straight-line basis over the lease term. Modifications to existing lease agreements, including changes to the lease term or payment amounts, are reviewed to determine whether they result in a separate contract. For modifications that do not result in a separate contract, management reviews the lease classification and re-measures the related right-of-use assets and liabilities at the effective date of the modification. Certain of the Company’s lease arrangements have lease and non-lease components. The Company accounts for the lease components and non-lease components as a single lease component for all classes of underlying assets. Leases with an expected lease term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the expected lease term. |
Credit Risk and Allowance for Doubtful Accounts | Credit Risk and Allowance for Doubtful Accounts The Company’s resident receivables are generally due within 30 days from the date billed. Accounts receivable are reported net of an allowance for doubtful accounts of $7.9 million and $8.6 million at September 30, 2020, and December 31, 2019, respectively, and represent the Company’s estimate of the amount that ultimately will be collected. The adequacy of the Company’s allowance for doubtful accounts is reviewed on an ongoing basis, using historical payment trends, write-off experience, analyses of receivable portfolios by payor source and aging of receivables, as well as a review of specific accounts, and adjustments are made to the allowance as necessary. Credit losses on resident receivables have historically been within management’s estimates, and management believes that the allowance for doubtful accounts adequately provides for expected losses. |
Self-Insurance Liability Accruals | Self-Insurance Liability Accruals The Company offers full-time employees an option to participate in its health and dental plans. The Company is self-insured up to certain limits and is insured if claims in excess of these limits are incurred. The cost of employee health and dental benefits, net of employee contributions, is shared between the corporate office and the senior housing communities based on the respective number of plan participants. Funds collected are used to pay the actual program costs, including estimated annual claims, third-party administrative fees, network provider fees, communication costs, and other related administrative costs incurred by the plans. Claims are paid as they are submitted to the Company’s third-party administrator. The Company records a liability for outstanding claims and claims that have been incurred but not yet reported. This liability is based on the historical claim reporting lag and payment trends of health insurance claims. Additionally, the Company may be liable for an Employee Shared Responsibility Payment (“ESRP”) pursuant to the Affordable Care Act. The ESRP is applicable to employers that had 50 or more full-time equivalent employees, did not offer minimum essential coverage (“MEC”) to at least 70% of full-time employees and their dependents, or did offer MEC to at least 70% of full-time employees and their dependents that did not meet the affordable or minimum value criteria and had one or more full-time employees certified as being allowed the premium tax credit. The IRS determines the amount of the proposed ESRP from information returns completed by employers and from income tax returns completed by employees. Management believes that the liabilities recorded and reserves established for outstanding losses and expenses are adequate to cover the ultimate cost of losses and expenses incurred at September 30, 2020; however, actual claims and expenses may differ. Any subsequent changes in estimates are recorded in the period in which they are determined. The Company uses a combination of insurance and self-insurance for workers’ compensation. Determining the reserve for workers’ compensation losses and costs that the Company has incurred as of the end of a reporting period involves significant judgments based on projected future events including potential settlements for pending claims, known incidents which may result in claims, estimates of incurred but not yet reported claims, changes in insurance premiums, estimated litigation costs and other factors. The Company regularly adjusts these estimates to reflect changes in the foregoing factors. However, since this reserve is based on estimates, the actual expenses incurred may differ from the amounts reserved. Any subsequent changes in estimates are recorded in the period in which they are determined. |
Income Taxes | Income Taxes Income taxes are computed using the asset and liability method and current income taxes are recorded based on amounts refundable or payable in the current year. The effective tax rates for the three and nine months ended September 30, 2020 and 2019 differ from the statutory tax rates due to state income taxes, permanent tax differences, and changes in the deferred tax asset valuation allowance. The Company is impacted by the Texas Margin Tax (“TMT”), which effectively imposes tax on modified gross revenues for communities within the State of Texas. The Company consolidates 38 Texas communities for purposes of the TMT, which contributes to the overall provision for income taxes. Deferred income taxes are recorded based on the estimated future tax effects of loss carryforwards and temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which the Company expects those carryforwards and temporary differences to be recovered or settled. Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income. At year end, the Company had a three-year cumulative operating loss for its U.S. operations and accordingly, has provided a full valuation allowance on its U.S. and state net deferred tax assets. The valuation allowance reduces the Company’s net deferred tax assets to the amount that is “more likely than not” (i.e., a greater than 50% likelihood) to be realized. However, in the event that the Company were to determine that it would be more likely than not that the Company would realize the benefit of deferred tax assets in the future in excess of their net recorded amounts, adjustments to deferred tax assets would increase net income in the period such determination was made. The benefits of the net deferred tax assets might not be realized if actual results differ from expectations. The Company evaluates uncertain tax positions through consideration of accounting and reporting guidance on criteria, measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better financial statement comparability among different companies. The Company is required to recognize a tax benefit in its financial statements for an uncertain tax position only if management’s assessment is that such position is “more likely than not” to be upheld on audit based only on the technical merits of the tax position. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as income tax expense. The Company is generally no longer subject to federal and state tax audits for years prior to 2016 and 2015, respectively. On March 18, 2020, the Families First Coronavirus Response Act (FFCR Act), and on March 27, 2020, the CARES Act were each enacted in response to the COVID-19 pandemic. The FFCR Act and the CARES Act contain numerous income tax provisions, such as relaxing limitations on the deductibility of interest and the use of net operating losses arising in taxable years beginning after December 31, 2017. Future regulatory guidance under the FFCR Act and the CARES Act remains forthcoming, and such guidance could ultimately increase or lessen their impact on the Company’s business and financial condition. |
Net Loss Per Share | Net Loss Per Share Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Potentially dilutive securities consist of unvested restricted shares and shares that could be issued under outstanding stock options. Potentially dilutive securities are excluded from the computation of net loss per common share if their effect is antidilutive. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except for per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net loss $ (214,964 ) $ (20,731 ) $ (274,898 ) $ (46,249 ) Net loss allocated to unvested restricted shares — — — — Undistributed net loss allocated to common shares $ (214,964 ) $ (20,731 ) $ (274,898 ) $ (46,249 ) Weighted average shares outstanding – basic 30,730 30,324 30,578 30,236 Effects of dilutive securities: Employee equity compensation plans — — — — Weighted average shares outstanding – diluted 30,730 30,324 30,578 30,236 Basic net loss per share – common shareholders $ (7.00 ) $ (0.68 ) $ (8.99 ) $ (1.53 ) Diluted net loss per share – common shareholders $ (7.00 ) $ (0.68 ) $ (8.99 ) $ (1.53 ) Awards of unvested restricted stock and restricted stock units representing approximately 685,000 shares, as well as 147,000 outstanding stock options, were antidilutive as a result of the net loss reported by the Company for the three and nine months ended September 30, 2020. Awards of unvested restricted stock and restricted stock units representing approximately 1,128,000 shares and approximately 147,000 stock options, were antidilutive as a result of the net loss reported by the Company for the three and nine months ended September 30, 2019. Accordingly, such shares and options were not included in the calculation of diluted weighted average shares outstanding for the three and nine months ended September 30, 2020 and 2019. |
Treasury Stock | Treasury Stock |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents and Restricted Cash | The following table sets forth the Company’s cash and cash equivalents and restricted cash (in thousands): September 30, 2020 2019 Cash and cash equivalents $ 14,293 $ 7,703 Restricted cash 3,982 13,073 $ 18,275 $ 20,776 |
Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share (in thousands, except for per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net loss $ (214,964 ) $ (20,731 ) $ (274,898 ) $ (46,249 ) Net loss allocated to unvested restricted shares — — — — Undistributed net loss allocated to common shares $ (214,964 ) $ (20,731 ) $ (274,898 ) $ (46,249 ) Weighted average shares outstanding – basic 30,730 30,324 30,578 30,236 Effects of dilutive securities: Employee equity compensation plans — — — — Weighted average shares outstanding – diluted 30,730 30,324 30,578 30,236 Basic net loss per share – common shareholders $ (7.00 ) $ (0.68 ) $ (8.99 ) $ (1.53 ) Diluted net loss per share – common shareholders $ (7.00 ) $ (0.68 ) $ (8.99 ) $ (1.53 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Option Activity and Related Information | A summary of the Company’s stock option activity and related information for the nine months ended September 30, 2020 is presented below: Outstanding at Beginning of Period Granted Exercised Cancelled Outstanding at End of Period Options 147,239 – – – 147,239 |
Restricted Common Stock Awards Activity and Related Information | A summary of the Company’s restricted stock awards activity and related information for the nine months ended September 30, 2020 is presented below: Outstanding at Beginning of Period Granted Vested Cancelled Outstanding at End of Period Shares 1,089,346 – (301,740 ) (102,359 ) 685,247 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Carrying Amounts and Fair Values of Financial Instruments | The carrying amounts and fair values of financial instruments at September 30, 2020 and December 31, 2019, are as follows (in thousands): September 30, 2020 December 31, 2019 Carrying Amount Fair Value Carrying Amount Fair Value Cash and cash equivalents $ 14,293 $ 14,293 $ 23,975 $ 23,975 Restricted cash 3,982 3,982 13,088 13,088 Notes payable, excluding deferred loan costs 923,048 921,567 930,085 899,326 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Summary of Operating and Financing Lease Expense and Cash Flows from Leasing Transactions | A summary of operating and financing lease expense (including the respective presentation on the consolidated statement of operations) and cash flows from leasing transactions is as follows: Nine Months Ended September 30, Operating Leases (in thousands) 2020 2019 Facility lease expense $ 23,234 $ 42,706 General and administrative expenses 495 238 Operating expenses, including variable lease expense of $4,499 and $4,616 in 2020 and 2019, respectively 4,760 5,070 Total operating lease costs $ 28,489 $ 48,014 Operating lease expense adjustment 18,460 4,285 Operating cash flows from operating leases $ 46,949 $ 52,299 Nine Months Ended September 30, Financing Leases (in thousands) 2020 2019 Depreciation and amortization $ 110 $ — Interest expense: financing lease obligations 25 — Total financing lease costs 135 — Operating cash flows from financing leases $ 110 $ — Financing cash flows from financing leases 25 — Total cash flows from financing leases $ 135 $ — |
Future Minimum Lease Payments of Operating Lease Liabilities | Future minimum lease payments associated with operating lease l i abilities recognized on the Company’s Consolidated Balance Sheet s as of September 30, 2020 , are as follows (in thousands): Year Ending December 31, Operating Leases Financing Leases 2020 (excluding the nine months ended September 30, 2020) $ 8,727 $ 39 2021 321 155 2022 132 155 2023 85 145 2024 47 7 Thereafter 3 2 Total $ 9,315 $ 503 Less: Amount representing interest (present value discount) (205 ) (52 ) Present value of lease liabilities $ 9,110 $ 451 Less: Current portion of lease liabilities (8,845 ) (126 ) Lease liabilities, net of current portion $ 265 $ 325 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) | Sep. 30, 2020CommunityStateResident |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Senior housing communities operated by company | 119 |
Number of states in which senior housing communities operated | State | 22 |
Aggregate capacity of residents in company operated senior housing communities | Resident | 14,700 |
Senior housing communities owned by company | 61 |
Senior housing communities on lease by company | 34 |
Senior housing communities managed by company | 24 |
Going Concern Uncertainty - Add
Going Concern Uncertainty - Additional Information (Details) $ in Thousands | Nov. 01, 2020Community | Apr. 01, 2020USD ($)Community | Jul. 31, 2020Community | Sep. 30, 2020USD ($)Community | Sep. 30, 2020USD ($)Community | Nov. 06, 2020USD ($) | Dec. 31, 2019USD ($) |
Going Concern Uncertainty [Line Items] | |||||||
Number of communities transitioned to successor operator | Community | 5 | 5 | |||||
Deferred payroll taxes, CARES Act | $ 5,000 | $ 5,000 | |||||
CARES Act relief received from state agencies | 600 | ||||||
Current portion of notes payable | 263,674 | 263,674 | $ 15,819 | ||||
Fannie Mae Loan [Member] | |||||||
Going Concern Uncertainty [Line Items] | |||||||
Number of communities | Community | 18 | ||||||
Loss on the derecognition of assets | 191,000 | ||||||
Current portion of notes payable | 217,700 | 217,700 | |||||
Fannie Mae Loan [Member] | Accrued Expenses | |||||||
Going Concern Uncertainty [Line Items] | |||||||
Accrued interest | 6,100 | 6,100 | |||||
Subsequent Event [Member] | |||||||
Going Concern Uncertainty [Line Items] | |||||||
CARES Act cash for grants from provider relief fund | $ 8,100 | ||||||
CARES Act additional grands applied pursuant to provider relief fund | $ 20,000,000 | ||||||
CARES Act eligible percentage of annual patent care revenue from applicants | 2.00% | ||||||
Welltower, Inc. [Member] | Subsequent Event [Member] | |||||||
Going Concern Uncertainty [Line Items] | |||||||
Number of communities transitioned to different operators | Community | 14 | ||||||
Healthpeak Properties Inc [Member] | |||||||
Going Concern Uncertainty [Line Items] | |||||||
Lease expiration date | Oct. 31, 2020 | ||||||
Number of senior housing communities started rent payment | Community | 8 | ||||||
Healthpeak Properties Inc [Member] | Senior Housing Community [Member] | |||||||
Going Concern Uncertainty [Line Items] | |||||||
Monthly rental payments | $ 700 | ||||||
Monthly rent due and payable | $ 900 | ||||||
Lease expiration date | Oct. 31, 2020 | ||||||
Remaining rent payment period | 3 years | ||||||
Healthpeak Properties Inc [Member] | Subsequent Event [Member] | Senior Housing Community [Member] | |||||||
Going Concern Uncertainty [Line Items] | |||||||
Lease expiration date | Apr. 30, 2021 | ||||||
Operating lease existence of option to extend | true | ||||||
Operating lease option to extend | subject to two possible three-month extensions | ||||||
Available renewal extension period | 3 months | ||||||
COVID-19 [Member] | |||||||
Going Concern Uncertainty [Line Items] | |||||||
Other nonrecurring expense | $ 1,400 | $ 4,600 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Cash and Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 14,293 | $ 23,975 | $ 7,703 | |
Restricted cash | 3,982 | 13,088 | 13,073 | |
Total Cash and cash equivalents and Restricted cash | $ 18,275 | $ 37,063 | $ 20,776 | $ 44,320 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2020USD ($)CommunityEmployeeshares | Sep. 30, 2019USD ($)Communityshares | Mar. 31, 2019USD ($)Community | Mar. 31, 2016shares | Sep. 30, 2020USD ($)CommunityEmployeeshares | Sep. 30, 2019USD ($)shares | Dec. 31, 2019USD ($)Communityshares | Dec. 31, 2009shares | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Accounting Policies [Line Items] | |||||||||||
Number of assets held for sale | Community | 2 | 1 | 0 | 0 | |||||||
Current portion of notes payable | $ 263,674 | $ 263,674 | $ 15,819 | ||||||||
Remeasurement write-down of assets held for sale | $ 2,340 | ||||||||||
Number of senior living communities sold | Community | 2 | ||||||||||
Resident revenue | 96,053 | $ 111,110 | 303,659 | 338,412 | |||||||
Contract liabilities for deferred fees included as deferred income | 4,300 | 4,300 | $ 4,300 | $ 5,000 | $ 4,100 | $ 4,500 | |||||
Contract liabilities for deferred fees recognized into revenue | 5,000 | $ 4,100 | 4,300 | $ 4,500 | |||||||
Contract liabilities for deferred community fees included in current liabilities | 991 | $ 991 | 1,247 | ||||||||
Resident receivables due period | 30 days | ||||||||||
Allowance for doubtful accounts | $ 7,900 | $ 7,900 | $ 8,600 | ||||||||
Minimum number of full time equivalent employees requires for employee shared responsibility payment | Employee | 50 | 50 | |||||||||
Percentage of full time employees and dependents not offered minimum essential cover to be eligible for employee shared responsibility payment | 70.00% | 70.00% | |||||||||
Percentage of full time employees and dependents Offered Minimum essential cover but not meet the affordable or minimum value criteria to be eligible for employee shared responsibility payment | 70.00% | 70.00% | |||||||||
Number of employees certified for premium tax credit | Employee | 1 | 1 | |||||||||
Uncertain tax position maximum percentage | 50.00% | ||||||||||
Repurchase of common stock | shares | 0 | 144,315 | 0 | 0 | 349,800 | ||||||
Unvested Restricted Stock and Restricted Stock Units [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Antidilutive shares and options not included in calculation of diluted weighted average shares outstanding | shares | 685,000 | 1,128,000 | 685,000 | 1,128,000 | |||||||
Stock Options [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Antidilutive shares and options not included in calculation of diluted weighted average shares outstanding | shares | 147,000 | 147,000 | 147,000 | 147,000 | |||||||
Fannie Mae Loan [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Current portion of notes payable | $ 217,700 | $ 217,700 | |||||||||
Fannie Mae Loan [Member] | Management Agreement [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Number of communities managed | Community | 18 | ||||||||||
Rental and Other Services [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Resident revenue | $ 84,700 | $ 109,400 | 286,100 | $ 333,400 | |||||||
Ancillary Services [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Resident revenue | 100 | 1,000 | 1,600 | 3,100 | |||||||
Community Fees [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Resident revenue | 1,000 | 700 | 3,200 | 1,900 | |||||||
Contract liabilities for deferred community fees included in current liabilities | 1,600 | 1,600 | $ 2,200 | ||||||||
Management Fees [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Resident revenue | 604 | 819 | |||||||||
Community Reimbursement Revenue [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Resident revenue | $ 9,555 | $ 11,888 | |||||||||
Maximum [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Residency agreements duration period | 1 year | ||||||||||
Senior Housing Community [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Assets held for sale | 24,400 | $ 4,900 | 24,400 | ||||||||
Aggregate assets fair value net of costs of disposal | 62,800 | 4,900 | 62,800 | ||||||||
Change in aggregate assets fair value net of costs of disposal | 7,200 | ||||||||||
Remeasurement write-down of assets held for sale | 2,300 | 2,300 | |||||||||
Senior Housing Community [Member] | Mortgage Debt [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Current portion of notes payable | $ 44,400 | $ 3,500 | $ 44,400 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Computation of Basic and Diluted Net Loss Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accounting Policies [Abstract] | ||||||||
Net loss | $ (214,964) | $ (12,753) | $ (47,181) | $ (20,731) | $ (12,534) | $ (12,984) | $ (274,898) | $ (46,249) |
Net loss allocated to unvested restricted shares | 0 | 0 | 0 | 0 | ||||
Undistributed net loss allocated to common shares | $ (214,964) | $ (20,731) | $ (274,898) | $ (46,249) | ||||
Weighted average shares outstanding – basic | 30,730 | 30,324 | 30,578 | 30,236 | ||||
Effects of dilutive securities: | ||||||||
Employee equity compensation plans | 0 | 0 | 0 | 0 | ||||
Weighted average shares outstanding – diluted | 30,730 | 30,324 | 30,578 | 30,236 | ||||
Basic net loss per share – common shareholders | $ (7) | $ (0.68) | $ (8.99) | $ (1.53) | ||||
Diluted net loss per share – common shareholders | $ (7) | $ (0.68) | $ (8.99) | $ (1.53) |
Impairment of Long-Lived Asse_2
Impairment of Long-Lived Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Impaired Long Lived Assets Held And Used [Line Items] | |||||
Impairment charge on operating lease right-of-use assets | $ 1,300,000 | $ 6,200,000 | $ 7,500,000 | ||
Non-cash impairment charge on property and equipment | 3,240,000 | 39,194,000 | |||
Non-cash impairment charges | 3,200,000 | $ 0 | 39,200,000 | $ 0 | |
Change in Useful Life of 15 Communities [Member] | |||||
Impaired Long Lived Assets Held And Used [Line Items] | |||||
Impairment charge on operating lease right-of-use assets | 1,300,000 | ||||
Non-cash impairment charge on property and equipment | 1,100,000 | ||||
One Community [Member] | |||||
Impaired Long Lived Assets Held And Used [Line Items] | |||||
Non-cash impairment charge on property and equipment | 800,000 | ||||
Change in Useful Life [Member] | |||||
Impaired Long Lived Assets Held And Used [Line Items] | |||||
Non-cash impairment charge on property and equipment | $ 1,900,000 | $ 29,800,000 | $ 31,700,000 |
Dispositions and Other Signif_2
Dispositions and Other Significant Transactions - Additional Information (Details) $ in Thousands | Apr. 01, 2020USD ($)Community | Mar. 15, 2020USD ($) | Mar. 10, 2020USD ($) | Mar. 01, 2020USD ($)Community | Jan. 15, 2020USD ($) | May 01, 2019USD ($)Property | Sep. 30, 2020USD ($)CommunityProperty | Mar. 31, 2019USD ($) | Sep. 30, 2020USD ($)CommunityProperty | Sep. 30, 2020USD ($)CommunityProperty | Sep. 30, 2019USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($)Community |
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Number of senior living communities sold | Community | 2 | ||||||||||||
Loss on disposition of assets, net | $ 191,032 | $ 198,388 | $ (38) | ||||||||||
Senior housing communities operated by company | Community | 119 | 119 | 119 | ||||||||||
Senior housing communities owned by company | Community | 61 | 61 | 61 | ||||||||||
Senior housing communities on lease by company | Community | 34 | 34 | 34 | ||||||||||
Number of leased senior housing communities | Community | 34 | 34 | 34 | ||||||||||
Rent expense | $ 4,760 | 5,070 | |||||||||||
Lease liability | $ 9,110 | $ 9,110 | 9,110 | ||||||||||
Operating lease right-of-use assets, net | $ 3,691 | $ 3,691 | $ 3,691 | $ 224,523 | |||||||||
Remeasurement write-down of assets held for sale | 2,340 | ||||||||||||
Early Termination Agreement [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Number of senior living communities sold | Community | 5 | 5 | 5 | ||||||||||
Senior housing communities operated by company | Community | 46 | ||||||||||||
Number of community transitioned | Community | 1 | ||||||||||||
Healthpeak Properties Inc [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Lease expiration date | Oct. 31, 2020 | ||||||||||||
Number of senior housing communities started rent payment | Community | 8 | ||||||||||||
Healthpeak Properties Inc [Member] | Current Portion of Notes Payable, Net of Deferred Loan Costs [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Deferred rent payments | $ 1,400 | $ 1,400 | $ 1,400 | ||||||||||
Healthpeak Properties Inc [Member] | Early Termination Agreement [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Loss on disposition of assets, net | $ 7,000 | ||||||||||||
Senior housing communities owned by company | Community | 34 | 34 | 34 | ||||||||||
Senior housing communities on lease by company | Community | 6 | 6 | 6 | ||||||||||
Security deposits released | $ 2,600 | ||||||||||||
Management fee percentage | 5.00% | ||||||||||||
Previously scheduled, lease maturity month year | 2026-04 | ||||||||||||
Number of communities to be managed | Community | 6 | ||||||||||||
Ventas [Member] | Early Termination Agreement [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Number of leased senior housing communities | Community | 7 | ||||||||||||
Lease expiration date | Sep. 30, 2025 | ||||||||||||
Rent expense due to early termination of lease | $ 1,000 | ||||||||||||
Rent expense | 1,300 | ||||||||||||
Security deposits released | 4,100 | ||||||||||||
Escrow deposits held | $ 2,500 | ||||||||||||
Lease termination obligation | $ 11,400 | ||||||||||||
Lease termination period | 30 days | ||||||||||||
Management fee percentage | 5.00% | ||||||||||||
Ventas [Member] | ASC 842 [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Gain (loss) on facility lease modification and termination | $ 8,400 | ||||||||||||
Lease termination obligation | $ 11,400 | ||||||||||||
Lease liability | 51,600 | ||||||||||||
Operating lease right-of-use assets, net | 47,800 | ||||||||||||
Welltower, Inc. [Member] | Early Termination Agreement [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Number of leased senior housing communities | Community | 24 | ||||||||||||
Rent expense due to early termination of lease | $ 2,200 | ||||||||||||
Rent expense | $ 2,800 | ||||||||||||
Lease termination period | 30 days | ||||||||||||
Management fee percentage | 5.00% | ||||||||||||
Lease expiration description | April 2025 through April 2026 | ||||||||||||
Welltower, Inc. [Member] | Early Termination Agreement [Member] | Letter of Credit [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Letter of credit released | $ 6,500 | $ 6,500 | $ 6,500 | ||||||||||
Welltower, Inc. [Member] | ASC 842 [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Gain (loss) on facility lease modification and termination | 8,000 | ||||||||||||
Lease liability | 129,900 | ||||||||||||
Operating lease right-of-use assets, net | $ 121,900 | ||||||||||||
Welltower, Inc. [Member] | Termination Agreement [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Gain (loss) on facility lease modification and termination | $ (700) | (700) | |||||||||||
Number of leased senior housing communities transferred to different operator | Community | 5 | ||||||||||||
Senior Living Boca Raton, Florida Community [Member] | Healthpeak Properties Inc [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Transitioned property amount as a prepayment against the remaining lease payments | $ 300 | ||||||||||||
Gain (loss) on facility lease modification and termination | $ 1,800 | ||||||||||||
Senior Housing Community Merrillville, Indiana Community [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Number of senior living communities sold | Community | 1 | 1 | 1 | ||||||||||
Purchase price for the sale of asset | $ 7,000 | ||||||||||||
Cash proceeds from sale of assets | $ 6,900 | ||||||||||||
Loss on disposition of assets, net | $ 7,400 | ||||||||||||
Senior Housing Community Merrillville, Indiana Community [Member] | Assisted Living Unit [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Number of living units in a housing community sold | Property | 171 | 171 | 171 | ||||||||||
Senior Housing Community Merrillville, Indiana Community [Member] | Memory Care Units [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Number of living units in a housing community sold | Property | 42 | 42 | 42 | ||||||||||
Senior Housing Community [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Purchase price for the sale of asset | $ 5,000 | ||||||||||||
Cash proceeds from sale of assets | $ 1,400 | ||||||||||||
Number of living units in a housing community sold | Property | 138 | ||||||||||||
Remeasurement write-down of assets held for sale | $ 2,300 | $ 2,300 | |||||||||||
Senior Housing Community [Member] | Mortgage Debt [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Outstanding mortgage debt retired | $ 3,500 | ||||||||||||
Senior Housing Community [Member] | Healthpeak Properties Inc [Member] | |||||||||||||
Dispositions And Other Significant Transactions [Line Items] | |||||||||||||
Lease expiration date | Oct. 31, 2020 | ||||||||||||
Monthly rental payments | $ 700 | ||||||||||||
Monthly rent due and payable | $ 900 | ||||||||||||
Percentage of scheduled rates of rent | 75.00% | ||||||||||||
Remaining rent payment period | 3 years |
Debt Transactions - Additional
Debt Transactions - Additional Information (Detail) $ in Thousands | Jul. 31, 2020USD ($)Property | Jul. 08, 2020Property | Jun. 15, 2020USD ($) | May 21, 2020Property | May 20, 2020PropertyLoan | May 09, 2020PropertyLoan | May 07, 2020PropertyLoan | Apr. 01, 2020 | Jul. 31, 2020CommunityProperty | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2020USD ($)Property | Aug. 27, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |||||||||||||||
Current portion of notes payable | $ 263,674 | $ 263,674 | $ 15,819 | ||||||||||||
Net book value of housing communities | 883,700 | 883,700 | 898,000 | ||||||||||||
Mortgage debt | 921,600 | 921,600 | 926,500 | ||||||||||||
Deferred financing cost | 14,300 | 14,300 | 14,300 | ||||||||||||
Accumulated amortization | 7,100 | 7,100 | $ 5,700 | ||||||||||||
4.60%,10-Month Term Financing Agreement [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Insurance finance agreement, outstanding amount | $ 2,200 | ||||||||||||||
Debt instrument, fixed interest rate | 4.60% | ||||||||||||||
Debt instrument, repayment term | 10 months | ||||||||||||||
Hartford Financial Services [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Letters of credit remain outstanding | 3,400 | 3,400 | |||||||||||||
Available letters of credit | $ 4,000 | ||||||||||||||
Welltower, Inc. [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Letters of credit amount surrendered and paid | $ 6,500 | ||||||||||||||
Healthpeak Properties Inc [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Letters of credit remain outstanding | $ 2,900 | ||||||||||||||
Lease expiration date | Oct. 31, 2020 | ||||||||||||||
Current Portion of Notes Payable, Net of Deferred Loan Costs [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Outstanding debt | 31,500 | 31,500 | |||||||||||||
Current Portion of Notes Payable, Net of Deferred Loan Costs [Member] | Healthpeak Properties Inc [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Deferred rent payments | 1,400 | 1,400 | |||||||||||||
Fannie Mae Loan [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Loss on the derecognition of assets | 191,000 | ||||||||||||||
Current portion of notes payable | 217,700 | 217,700 | |||||||||||||
Fannie Mae Loan [Member] | Accrued Expenses | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Accrued interest | 6,100 | $ 6,100 | |||||||||||||
Forbearance Agreements [Member] | Fannie Mae Loan [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Number of properties covered under loan | Property | 5 | ||||||||||||||
Loan payment terms | During this three-month loan payment forbearance, the Company agreed to pay to Fannie Mae monthly all net operating income, if any, as defined in the forbearance agreement, for the properties receiving forbearance. | ||||||||||||||
Number of properties covered under loan | Property | 23 | ||||||||||||||
Deferred payments | $ 600 | ||||||||||||||
Unpaid loans | $ 3,900 | ||||||||||||||
Number of properties under loan default | Property | 18 | 18 | |||||||||||||
Number of communities managed | Community | 18 | ||||||||||||||
Loss on the derecognition of assets | 191,000 | $ 191,000 | |||||||||||||
Current portion of notes payable | 217,700 | 217,700 | |||||||||||||
Forbearance Agreements [Member] | Fannie Mae Loan [Member] | Accrued Expenses | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Accrued interest | $ 6,100 | $ 6,100 | |||||||||||||
Berkadia [Member] | Forbearance Agreements [Member] | Fannie Mae Loan [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Number of mortgage loans | Loan | 23 | ||||||||||||||
Number of properties covered under loan | Property | 20 | ||||||||||||||
Wells Fargo [Member] | Forbearance Agreements [Member] | Fannie Mae Loan [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Number of mortgage loans | Loan | 1 | ||||||||||||||
Number of properties covered under loan | Property | 1 | ||||||||||||||
KeyBank [Member] | Forbearance Agreements [Member] | Fannie Mae Loan [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Number of mortgage loans | Loan | 3 | ||||||||||||||
Number of properties covered under loan | Property | 2 | ||||||||||||||
BBVA USA [Member] | Forbearance Agreements [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Number of properties covered under loan | Property | 3 | ||||||||||||||
Loan payment terms | the Company deferred monthly debt service payments for April, May and June 2020, which deferred payments are added to principal and due in June 2021. | ||||||||||||||
BBVA USA [Member] | Forbearance Agreements [Member] | Current Portion of Notes Payable, Net of Deferred Loan Costs [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Deferred payments | $ 900 | ||||||||||||||
ORIX Real Estate Capital, LLC [Member] | Forbearance Agreements [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Number of properties covered under loan | Property | 1 | ||||||||||||||
Loan payment terms | the Company deferred monthly debt service payments for April, May and June 2020, which deferred payments are added to the regularly scheduled payments in equal installments for one year following the forbearance period. | ||||||||||||||
ORIX Real Estate Capital, LLC [Member] | Forbearance Agreements [Member] | Current Portion of Notes Payable, Net of Deferred Loan Costs [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Deferred payments | $ 100 | ||||||||||||||
Protective Life Insurance Company [Member] | Protective Life Amendments to Loan Agreements and Loan Modification and Temporary Deferral Agreement [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Number of properties covered under loan | Property | 10 | ||||||||||||||
Loan payment terms | These amendments allow the Company to defer principal and interest payments for April, May and June 2020 and to defer principal payments for July 2020 through March 2021, with such deferral amounts being added to principal due at maturity in either 2025 or 2026, depending upon the loan. | ||||||||||||||
Deferred payments | $ 3,200 | ||||||||||||||
Protective Life Insurance Company [Member] | Protective Life Amendments to Loan Agreements and Loan Modification and Temporary Deferral Agreement [Member] | Accrued Expenses | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Deferred payments | 1,700 | ||||||||||||||
Protective Life Insurance Company [Member] | Protective Life Amendments to Loan Agreements and Loan Modification and Temporary Deferral Agreement [Member] | Current Portion of Notes Payable, Net of Deferred Loan Costs [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Deferred payments | $ 1,500 | ||||||||||||||
Protective Life Insurance Company [Member] | Protective Life Amendments Two Loan Agreements and Loan Modification and Temporary Deferral Agreement [Member] | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Loan payment terms | Subsequent to quarter-end, the Company entered into amendments to its loan agreements with Protective Life, which allow the Company to defer principal and interest payments for October, November, and December 2020 and to continue to defer principal payments through September 30, 2021. |
Equity - Additional Information
Equity - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Mar. 31, 2016 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2009 | Jan. 22, 2009 | |
Equity [Abstract] | ||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | |||
Authorization for purchase of company's common stock | $ 10,000,000 | |||||
Purchase common stock shares | 0 | 144,315 | 0 | 0 | 349,800 | |
Average cost of per share | $ 17.29 | $ 2.67 | ||||
Purchase common stock value | $ 2,500,000 | $ 900,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | Mar. 26, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | May 14, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options vesting period, Minimum | 1 year | |||||
Stock options vesting period, Maximum | 5 years | |||||
Stock options outstanding, intrinsic value | $ 0 | $ 0 | ||||
Stock options outstanding, weighted-average remaining contractual life | 8 years 3 months | |||||
Stock options outstanding, weighted average exercise price | $ 7.46 | $ 7.46 | ||||
Total unrecognized compensation expense | $ 200,000 | $ 200,000 | ||||
Stock options exercisable | 48,588,000 | 48,588,000 | ||||
Number of stock options granted during period | 0 | 0 | ||||
Period of recognition for compensation expense, Minimum | 1 year | |||||
Period of recognition for compensation expense, Maximum | 4 years | |||||
Compensation expense recognized | $ 400,000 | $ 900,000 | $ 1,500,000 | $ 1,600,000 | ||
Unrecognized stock based compensation expense, net of estimated forfeitures | 1,700,000 | $ 1,700,000 | ||||
Stock Options [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expected period of expenses | 1 year 3 months | |||||
Restricted Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation expense recognized | $ 0 | |||||
Restricted stock outstanding, intrinsic value | $ 500,000 | $ 500,000 | ||||
Number of restricted stock awards or restricted stock units granted during period | 0 | 0 | ||||
Performance and Market Based Stock Awards [Member] | Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expected period of expenses | 1 year | |||||
Performance and Market Based Stock Awards [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expected period of expenses | 3 years | |||||
Nonperformance Based Stock Awards [Member] | Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expected period of expenses | 1 year | |||||
Nonperformance Based Stock Awards [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expected period of expenses | 4 years | |||||
2019 Omnibus Stock and Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Authorized shares of common stock | 2,250,000 | |||||
2007 Omnibus Stock and Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of additional shares granted under the plan | 0 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity and Related Information (Detail) - shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Options, Outstanding at Beginning of Period | 147,239 | |
Options, Granted | 0 | 0 |
Options, Exercised | 0 | |
Options, Cancelled | 0 | |
Options, Outstanding at End of Period | 147,239 | 147,239 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards Activity and Related Information (Detail) - Restricted Stock [Member] - shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares, Outstanding at Beginning of Period | 1,089,346 | |
Shares, Granted | 0 | 0 |
Shares, Vested | (301,740) | |
Shares, Cancelled | (102,359) | |
Shares, Outstanding End of Period | 685,247 | 685,247 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Amounts and Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Restricted cash | $ 3,982 | $ 13,088 | $ 13,073 |
Carrying Amount [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | 14,293 | 23,975 | |
Restricted cash | 3,982 | 13,088 | |
Notes payable, excluding deferred loan costs | 923,048 | 930,085 | |
Fair Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents | 14,293 | 23,975 | |
Restricted cash | 3,982 | 13,088 | |
Notes payable, excluding deferred loan costs | $ 921,567 | $ 899,326 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020USD ($)Community | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($)Community | Mar. 31, 2019USD ($)Community | Sep. 30, 2020USD ($)Community | Sep. 30, 2019USD ($) | Dec. 31, 2019Community | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Number of assets held for sale | Community | 2 | 1 | 0 | 0 | |||
Remeasurement write-down of assets held for sale | $ 2,340,000 | ||||||
Impairment charge on operating lease right-of-use assets | $ 1,300,000 | $ 6,200,000 | $ 7,500,000 | ||||
Fair value of impaired operating lease right-of-use assets | 500,000 | $ 15,000,000 | 500,000 | ||||
Management fees and a market supported lease coverage ratio | 110.00% | ||||||
Non-cash impairment charge on property and equipment | 3,240,000 | 39,194,000 | |||||
Fair value of impaired property and equipment | 12,500,000 | $ 10,500,000 | 12,500,000 | ||||
Change in Useful Life [Member] | |||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Non-cash impairment charge on property and equipment | $ 1,900,000 | $ 29,800,000 | $ 31,700,000 | ||||
Discount Rate [Member] | Minimum [Member] | Level 3 [Member] | |||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Range of discount rates utilized | 7.7 | 7.7 | |||||
Discount Rate [Member] | Maximum [Member] | Level 3 [Member] | |||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Range of discount rates utilized | 10.3 | 10.3 | |||||
Senior Living Community [Member] | |||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Number of assets held for sale | Community | 0 | 2 | 1 | 0 | |||
Remeasurement write-down of assets held for sale | $ 0 | $ 2,300,000 |
Leases - Additional Information
Leases - Additional Information (Detail) | Sep. 30, 2020Community |
Leases [Abstract] | |
Weighted-average discount rate, operating leases | 4.10% |
Average remaining lease terms, operating leases | 4 months 24 days |
Weighted-average discount rate, financing leases | 7.00% |
Average remaining lease terms, financing leases | 3 years 3 months 18 days |
Number of leased senior housing communities | 34 |
Leases - Summary of Operating a
Leases - Summary of Operating and Financing Lease Expense and Cash Flows from Leasing Transactions (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Lease Cost [Abstract] | ||
Facility lease expense | $ 23,234 | $ 42,706 |
General and administrative expenses | 495 | 238 |
Operating expenses, including variable lease expense of $4,499 and $4,616 in 2020 and 2019, respectively | 4,760 | 5,070 |
Total operating lease costs | 28,489 | 48,014 |
Operating lease expense adjustment | 18,460 | 4,285 |
Operating cash flows from operating leases | 46,949 | $ 52,299 |
Depreciation and amortization | 110 | |
Interest expense: financing lease obligations | 25 | |
Total financing lease costs | 135 | |
Operating cash flows from financing leases | 110 | |
Financing cash flows from financing leases | 25 | |
Total cash flows from financing leases | $ 135 |
Leases - Summary of Operating_2
Leases - Summary of Operating and Financing Lease Expense and Cash Flows from Leasing Transactions (Parenthetical) (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Lease Cost [Abstract] | ||
Variable lease expense | $ 4,499 | $ 4,616 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments of Operating Lease Liabilities (Detail) $ in Thousands | Sep. 30, 2020USD ($) |
Operating Lease Liabilities Payments Due [Abstract] | |
2020 (excluding the nine months ended September 30, 2020) | $ 8,727 |
2021 | 321 |
2022 | 132 |
2023 | 85 |
2024 | 47 |
Thereafter | 3 |
Total | 9,315 |
Less: Amount representing interest (present value discount) | (205) |
Present value of lease liabilities | 9,110 |
Less: Current portion of lease liabilities | (8,845) |
Lease liabilities, net of current portion | 265 |
Finance Lease Liabilities Payments Due [Abstract] | |
2020 (excluding the nine months ended September 30, 2020) | 39 |
2021 | 155 |
2022 | 155 |
2023 | 145 |
2024 | 7 |
Thereafter | 2 |
Total | 503 |
Less: Amount representing interest (present value discount) | (52) |
Present value of lease liabilities | 451 |
Less: Current portion of lease liabilities | (126) |
Lease liabilities, net of current portion | $ 325 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ in Millions | Nov. 01, 2020Property | Oct. 01, 2020Property | May 21, 2020Property | Apr. 01, 2020 | Nov. 06, 2020USD ($) |
Healthpeak Properties Inc [Member] | |||||
Subsequent Event [Line Items] | |||||
Lease expiration date | Oct. 31, 2020 | ||||
Senior Housing Community [Member] | Healthpeak Properties Inc [Member] | |||||
Subsequent Event [Line Items] | |||||
Lease expiration date | Oct. 31, 2020 | ||||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
CARES Act cash for grants from provider relief fund | $ | $ 8.1 | ||||
Subsequent Event [Member] | Senior Housing Community [Member] | Healthpeak Properties Inc [Member] | |||||
Subsequent Event [Line Items] | |||||
Lease expiration date | Apr. 30, 2021 | ||||
Number of Lease Extension Available | 2 | ||||
Available renewal extension period | 3 months | ||||
Operating lease existence of option to extend | true | ||||
Operating lease option to extend | subject to two possible three-month extensions | ||||
Protective Life Amendments to Loan Agreements and Loan Modification and Temporary Deferral Agreement [Member] | Protective Life Insurance Company [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of properties covered under loan | 10 | ||||
Protective Life Amendments to Loan Agreements and Loan Modification and Temporary Deferral Agreement [Member] | Protective Life Insurance Company [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of properties covered under loan | 10 |