Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 26, 2020 | Jun. 28, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 1-16817 | ||
Entity Registrant Name | FIVE STAR SENIOR LIVING INC. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 04-3516029 | ||
Entity Address, Address Line One | 400 Centre Street | ||
Entity Address, City or Town | Newton | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02458 | ||
City Area Code | 617 | ||
Local Phone Number | 796‑8387 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | FVE | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 12.7 | ||
Entity Common Stock, Shares Outstanding | 31,543,711 | ||
Documents Incorporated by Reference | Certain information required by Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K is incorporated by reference to our definitive Proxy Statement for the 2020 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the fiscal year ended December 31, 2019 . | ||
Entity Central Index Key | 0001159281 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 31,740 | $ 29,512 |
Accounts receivable, net of allowance of $4,664 and $3,422 at December 31, 2019 and 2018, respectively | 34,190 | 37,758 |
Due from related persons | 5,533 | 7,855 |
Prepaid expenses | 3,809 | 8,567 |
Investments in available for sale securities, of which $12,622 and $11,285 are restricted as of December 31, 2019 and 2018, respectively | 21,070 | 20,179 |
Restricted cash | 23,995 | 20,823 |
Other current assets | 13,477 | 13,359 |
Assets held for sale | 9,554 | 0 |
Total current assets | 143,368 | 138,053 |
Property and equipment, net | 167,247 | 243,873 |
Equity investment of an investee | 298 | 8,633 |
Restricted cash | 1,244 | 923 |
Restricted investments in available for sale securities | 7,105 | 8,073 |
Right of use assets | 20,855 | |
Other long-term assets | 5,676 | 6,069 |
Total assets | 345,793 | 405,624 |
Current liabilities: | ||
Revolving credit facilities | 0 | 51,484 |
Accounts payable and accrued expenses | 82,447 | 69,667 |
Current portion of lease liabilities | 2,872 | |
Accrued compensation and benefits | 35,629 | 35,421 |
Due to related persons | 2,247 | 18,883 |
Mortgage notes payable | 362 | 339 |
Accrued real estate taxes | 1,676 | 12,959 |
Security deposits and current portion of continuing care contracts | 434 | 3,468 |
Other current liabilities | 26,089 | 37,472 |
Liabilities held for sale | 12,544 | 0 |
Total current liabilities | 164,300 | 229,693 |
Long-term liabilities: | ||
Mortgage notes payable | 7,171 | 7,533 |
Long-term portion of lease liabilities | 19,671 | |
Accrued self-insurance obligations | 33,872 | 33,030 |
Deferred gain on sale and leaseback transaction | 0 | 59,478 |
Other long-term liabilities | 798 | 4,721 |
Total long-term liabilities | 61,512 | 104,762 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Common stock, par value $.01: 75,000,000 shares authorized, 5,154,892 and 5,085,345 shares issued and outstanding at December 31, 2019 and 2018, respectively | 52 | 51 |
Additional paid in capital | 362,450 | 362,012 |
Accumulated deficit | (245,184) | (292,636) |
Accumulated other comprehensive income | 2,663 | 1,742 |
Total shareholders’ equity | 119,981 | 71,169 |
Total liabilities and shareholders’ equity | $ 345,793 | $ 405,624 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 4,644 | $ 3,422 |
Investments in available for sale securities, restricted | $ 12,622 | $ 11,285 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 5,154,892 | 5,085,345 |
Common stock, shares outstanding (in shares) | 5,154,892 | 5,085,345 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUES | ||
Total revenues | $ 1,415,144 | $ 1,390,394 |
OPERATING EXPENSES | ||
Rent expense | 141,486 | |
Rent expense | 209,150 | |
General and administrative expenses | 87,884 | 78,189 |
Depreciation and amortization expense | 16,640 | 35,939 |
Loss (gain) on sale of senior living communities | 856 | (7,131) |
Long-lived asset impairment | 3,282 | 461 |
Total operating expenses | 1,435,418 | 1,461,955 |
Operating loss | (20,274) | (71,561) |
Interest, dividend and other income | 1,364 | 818 |
Interest and other expense | (2,615) | (3,018) |
Unrealized gain (loss) on equity investments | 782 | (690) |
Realized gain on sale of debt and equity investments, net of tax | 229 | 99 |
Loss before income taxes and equity in earnings of an investee | (20,514) | (74,352) |
Provision for income taxes | (56) | (247) |
Equity in earnings of an investee, net of tax | 575 | 516 |
Net loss | $ (19,995) | $ (74,083) |
Weighted average shares outstanding—basic and diluted (in shares) | 5,006 | 4,969 |
Net loss per share - basic and diluted (in dollars per share) | $ (3.99) | $ (14.91) |
Senior living | ||
REVENUES | ||
Total revenues | $ 1,085,183 | $ 1,094,404 |
Management fee revenue | ||
REVENUES | ||
Total revenues | 16,169 | 15,145 |
Reimbursed costs incurred on behalf of managed communities | ||
REVENUES | ||
Total revenues | 313,792 | 280,845 |
OPERATING EXPENSES | ||
Cost of revenues | 313,792 | 280,845 |
Senior living wages and benefits | ||
OPERATING EXPENSES | ||
Cost of revenues | 573,593 | 563,263 |
Other senior living operating expenses | ||
OPERATING EXPENSES | ||
Cost of revenues | $ 297,885 | $ 301,239 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (19,995) | $ (74,083) |
Other comprehensive income (loss): | ||
Unrealized gain (loss) on investments, net of tax of $294 and $0, respectively | 831 | (385) |
Equity in unrealized gain (loss) of an investee, net of tax | 90 | (68) |
Realized gain on investments reclassified and included in net loss, net of tax of $0 and $0, respectively | 0 | 106 |
Other comprehensive income (loss) | 921 | (347) |
Comprehensive loss | $ (19,074) | $ (74,430) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized (loss) gain on investments in available for sale securities tax | $ 294 | $ 0 |
Realized (gain) loss on investments in available for sale securities reclassified and included in net loss, tax provision (benefit) | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income |
Balance (in shares) at Dec. 31, 2017 | 5,052,442 | ||||
Balance at Dec. 31, 2017 | $ 144,994 | $ 51 | $ 361,396 | $ (220,489) | $ 4,036 |
Comprehensive income (loss): | |||||
Net loss | (74,083) | (74,083) | |||
Unrealized gain (loss) on investments, net of tax | (385) | (385) | |||
Realized gain on investments reclassified and included in net loss, net of tax | 106 | 106 | |||
Equity in unrealized gain (loss) of an investee, net of tax | (68) | (68) | |||
Comprehensive loss | (74,430) | (72,136) | (2,294) | ||
Grants under share award plan and share based compensation (in shares) | 47,100 | ||||
Grants under share award plan and share based compensation | 616 | $ 0 | 616 | ||
Repurchases under share award plan (in shares) | (14,197) | ||||
Repurchases under share award plan | (11) | $ 0 | (11) | ||
Balance at Dec. 31, 2018 | $ 71,169 | $ 51 | 362,012 | (292,636) | 1,742 |
Balance (in shares) at Dec. 31, 2018 | 5,085,345 | 5,085,345 | |||
Comprehensive income (loss): | |||||
Net loss | $ (19,995) | (19,995) | |||
Unrealized gain (loss) on investments, net of tax | 831 | 831 | |||
Equity in unrealized gain (loss) of an investee, net of tax | 90 | 90 | |||
Comprehensive loss | (19,074) | (19,995) | 921 | ||
Grants under share award plan and share based compensation (in shares) | 85,800 | ||||
Grants under share award plan and share based compensation | 439 | $ 1 | 438 | ||
Repurchases under share award plan (in shares) | (16,253) | ||||
Repurchases under share award plan | (26) | $ 0 | (26) | ||
Balance at Dec. 31, 2019 | $ 119,981 | $ 52 | $ 362,450 | $ (245,184) | $ 2,663 |
Balance (in shares) at Dec. 31, 2019 | 5,154,892 | 5,154,892 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net loss | $ (19,995) | $ (74,083) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization expense | 16,640 | 35,939 |
Loss (gain) on sale of senior living communities | 856 | (7,131) |
Unrealized (gain) loss on equity securities | (782) | 690 |
Realized gain on sale of debt and equity securities | (229) | (99) |
Loss on disposal of property and equipment | 86 | 16 |
Long-lived asset impairment | 3,282 | 461 |
Equity in earnings of an investee, net of tax | (575) | (516) |
Stock based compensation | 439 | 616 |
Provision for losses on receivables | 4,891 | 4,904 |
Amortization of non-cash rent adjustments | (13,840) | (6,609) |
Other non-cash expense (income) adjustments, net | 346 | 1,192 |
Changes in assets and liabilities: | ||
Accounts receivable | (1,323) | (3,989) |
Prepaid expenses and other assets | 914 | 1,535 |
Accounts payable and accrued expenses | 12,850 | (4,211) |
Accrued compensation and benefits | 208 | (2,472) |
Due (to) from related persons, net | (1,619) | (1,683) |
Other current and long-term liabilities | (6,258) | 1,217 |
Net cash used in operating activities | (4,109) | (54,223) |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Acquisition of property and equipment | (57,494) | (48,980) |
Purchases of investments | (2,991) | (5,297) |
Proceeds from sale of property and equipment | 110,027 | 17,956 |
Distributions in excess from Affiliates Insurance Company | 9,000 | 0 |
(Settlement of liabilities) proceeds from sale of communities | (754) | |
(Settlement of liabilities) proceeds from sale of communities | 31,819 | |
Proceeds from sale of investments | 5,193 | 9,438 |
Net cash provided by investing activities | 62,981 | 4,936 |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Proceeds from borrowings on revolving credit facilities | 5,000 | 76,484 |
Repayments of borrowings on revolving credit facilities | (56,484) | (25,000) |
Repayments of mortgage notes payable | (365) | (509) |
Payment of deferred financing fees | (1,271) | 0 |
Payment of employee tax obligations on withheld shares | (26) | (11) |
Net cash (used in) provided by financing activities | (53,146) | 50,964 |
Change in cash, cash equivalents and restricted cash | 5,726 | 1,677 |
Restricted cash transferred to held for sale assets | 5 | 0 |
Cash, cash equivalents and restricted cash at beginning of period | 51,258 | 49,581 |
Cash, cash equivalents and restricted cash at end of period | 56,979 | 51,258 |
Reconciliation of cash, cash equivalents and restricted cash | ||
Cash and cash equivalents and restricted cash at end of period | 56,979 | 51,258 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Interest paid | 1,819 | 1,577 |
Income taxes (received) paid, net | (1,947) | 311 |
NON-CASH ACTIVITIES: | ||
Initial recognition of right of use assets for lease liabilities | 1,478,958 | 0 |
Real estate sales | 0 | 33,364 |
Mortgage notes assumed by purchaser in real estate sales | $ 0 | $ 33,364 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business General. Five Star Senior Living Inc., collectively with its consolidated subsidiaries, we, us or our, is a corporation formed in 2001 under the laws of the State of Maryland. As of December 31, 2019 , we operated 268 senior living communities located in 32 states with 31,285 living units, including 257 primarily independent and assisted living communities with 30,021 living units and 11 skilled nursing facilities, or SNFs, with 1,264 living units. As of December 31, 2019 , we owned and operated 20 of these senior living communities ( 2,108 living units), we leased and operated 170 of these senior living communities ( 18,840 living units) and we managed 78 of these senior living communities ( 10,337 living units). Our 268 senior living communities, as of December 31, 2019 , included 11,364 independent living apartments, 16,470 assisted living suites and 3,451 SNF units. The foregoing numbers exclude living units categorized as out of service. Restructuring of Business Arrangements with DHC . On April 1, 2019, we entered into a transaction agreement, or the Transaction Agreement, with Diversified Healthcare Trust (formerly known as Senior Housing Properties Trust), or DHC, to restructure our business arrangements with DHC, pursuant to which, effective as of January 1, 2020, or the Conversion Time: • our five then existing master leases with DHC for all of DHC’s senior living communities that we then leased, as well as our then existing management and pooling agreements with DHC for DHC’s senior living communities that were then managed by us, were terminated and replaced, or the Conversion, with new management agreements for all of these senior living communities and a related omnibus agreement, or collectively, the New Management Agreements; • we issued 10,268,158 of our common shares to DHC and an aggregate of 16,118,849 of our common shares to DHC’s shareholders of record as of December 13, 2019, or, together, the Share Issuances; and • as consideration for the Share Issuances, DHC provided to us $75,000 of additional consideration by assuming certain of our working capital liabilities. Such consideration, the Conversion and the Share Issuances are collectively referred to as the Restructuring Transactions. In connection with the Transaction Agreement, we entered into a credit agreement with DHC pursuant to which DHC extended to us a $25,000 line of credit, or the DHC credit facility, which was secured by six senior living communities we own. The DHC credit facility matured and was terminated in connection with the completion of the Restructuring Transactions. There were no amounts outstanding under the DHC credit facility at the time of such termination and we did not make any borrowings under the DHC credit facility during its term. Reverse Stock Split. On September 30, 2019, we completed a one-for-ten reverse stock split of our outstanding common shares, or the Reverse Stock Split, pursuant to which every ten of our common shares issued and outstanding as of the effective time of the Reverse Stock Split were converted into one share of our common stock, par value $.10 per share, subject to the receipt of cash in lieu of fractional shares. Following the effective time of the Reverse Stock Split on September 30, 2019, we changed the par value of our common stock from $.10 per share back to $.01 per share. The Reverse Stock Split affected all record holders of our common shares uniformly and did not affect any record shareholder’s percentage ownership interest in us. The Reverse Stock Split reduced the number of our then issued and outstanding common shares from 50,823,340 to 5,082,334 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation . The accompanying consolidated financial statements include the accounts of Five Star Senior Living Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates. Preparation of these financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that may affect the amounts reported in these financial statements and related notes. Some significant estimates are included in our revenue recognition, including contractual allowances, the allowance for doubtful accounts, self-insurance reserves, long-lived assets, and estimates concerning our provisions for income taxes. Our actual results could differ from our estimates. We periodically review estimates and assumptions and we reflect the effects of changes, if any, in the consolidated financial statements in the period that they are determined. Fair Value of Financial Instruments. Our financial instruments are limited to cash and cash equivalents, accounts receivable, debt and equity investments, accounts payable and mortgage notes payable. Except for our mortgage debt, the fair value of these financial instruments was not materially different from their carrying values at December 31, 2019 and 2018. We estimate the fair values of our mortgage debt using market quotes when available, discounted cash flow analyses and current prevailing interest rates. Segment Information. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in determining the allocation of resources and in assessing performance. Our chief operating decision maker is our President and Chief Executive Officer. As of December 31, 2019 , we have two operating segments: senior living and rehabilitation and wellness. In the senior living segment, we operate for our own account or manage for the account of others independent living communities, assisted living communities and SNFs that are subject to centralized oversight and provide housing and services to older adults. In the rehabilitation and wellness operating segment, we provide therapy services, including physical, occupational, speech and other specialized therapy services, in the inpatient setting and in outpatient clinics. We have determined that our two operating segments meet the aggregation criteria as prescribed under the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 280, Segment Reporting , and we have therefore determined that our business is comprised of one reportable segment, senior living. All of our operations and assets are located in the United States, except for the operations of our Cayman Islands organized captive insurance company subsidiary which participates in our workers’ compensation, professional and general liability and certain automobile insurance programs. Earnings Per Share. We calculate basic earnings per common share, or EPS, by dividing net income (loss) by the weighted average number of common shares outstanding during the year. We calculate diluted EPS using the more dilutive of the two-class method or the treasury stock method. Cash and Cash Equivalents and Restricted Cash. Cash and cash equivalents, consisting of short-term, highly liquid investments and money market funds with original maturities of three months or less at the date of purchase, are carried at cost plus accrued interest, which approximates market. Restricted cash as of December 31, 2019 and 2018 , includes cash that we deposited as security for obligations arising from our self-insurance programs and other amounts for which we are required to establish escrows including real estate taxes and capital expenditures as required by our mortgages and certain resident security deposits. As of December 31, 2019 2018 Current Long-Term Current Long-Term Insurance reserves and other restricted amounts $ 679 $ 1,244 $ 691 $ 923 Real estate taxes and capital expenditures as required by our mortgages 526 — 483 — Resident security deposits 32 — 612 — Workers’ compensation letter of credit collateral 21,655 — 17,934 — Health deposit-imprest cash 1,103 — 1,103 — Total $ 23,995 $ 1,244 $ 20,823 $ 923 Concentrations of Credit Risk. Our financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments and trade receivables. We have cash investment policies that, among other things, limit investments to investment-grade securities. We hold our cash and cash equivalents and investments with high-quality financial institutions and we monitor the credit ratings of those institutions. We perform ongoing credit evaluations of our customers, and the risk with respect to trade receivables is further mitigated by the diversity, both by geography and by industry, of the customer base. As of December 31, 2019 , payments due from Medicare and Medicaid represented 26.5% and 25.0% , respectively, of our consolidated accounts receivable balance. As of December 31, 2018 , payments due from Medicare and Medicaid represented 23.4% and 33.8% , respectively, of our consolidated accounts receivable. We derive primarily all of our management fee revenue from DHC. As of December 31, 2019 and 2018 , we had $3,363 due from DHC and $10,900 due to DHC, respectively, which are included in due from related persons and due to related persons, respectively, on our consolidated balance sheets. Accounts Receivable and Allowance for Doubtful Accounts. We record accounts receivable at their estimated net realizable value. Included in accounts receivable as of December 31, 2019 and 2018 , are amounts due from the Medicare program of $9,056 and $8,821 , respectively, and amounts due from various state Medicaid programs of $8,532 and $12,757 , respectively. We estimate allowances for uncollectible amounts and contractual allowances based upon factors which include, but are not limited to, historical payment trends, write-off experience, analyses of accounts receivable portfolios by payor source and the age of the receivable as well as a review of specific accounts, the terms of the agreements, the residents’ or third party payers’ stated intent to pay, the payers’ financial capacity to pay and other factors which may include likelihood and cost of litigation. Billings for services under third party payer programs are recorded net of estimated retroactive adjustments, if any. Retroactive adjustments are accrued on an estimated basis in the period the related services are rendered and adjusted in future periods or as final settlements are determined. Contractual or cost related adjustments from Medicare or Medicaid are accrued when assessed (without regard to when the assessment is paid or withheld). Subsequent adjustments to these accrued amounts are recorded in net revenues when known. The allowance for doubtful accounts reflects estimates that we periodically review and revise based on new information, to which revisions may be material. Our allowance for doubtful accounts consists of the following: Allowance for Doubtful Accounts Balance at Beginning of Period Provision for Doubtful Accounts Recoveries Write-offs Balance at End of Period December 31, 2018 $ 3,572 $ 4,904 $ 1,461 $ (6,515 ) $ 3,422 December 31, 2019 $ 3,422 $ 4,891 $ 1,459 $ (5,108 ) $ 4,664 Equity and Debt Investments. On January 1, 2018, we adopted FASB Accounting Standards Update, or ASU, No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which changes how entities measure certain equity investments and present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. Prior to our adoption of this ASU, we recorded changes in the fair value of our equity investments through other comprehensive income. Pursuant to this ASU, these changes will now be recorded through earnings. We adopted this ASU using the cumulative effect adjustment method and recorded an adjustment of $1,947 on January 1, 2018, to accumulated other comprehensive income and accumulated deficit in our consolidated balance sheets. Equity investments are carried at fair value with changes in fair value recorded in earnings. At December 31, 2019 , these equity investments had a fair value of $6,409 and a net unrealized holding gain of $1,201 . At December 31, 2018 , these equity investments had a fair value of $5,466 and a net unrealized holding gain of $419 . Debt investments are carried at fair value, with unrealized gains and losses reported as a separate component of shareholders’ equity and “other than temporary impairment” losses recorded through earnings. Realized gains and losses on debt investments are recognized based on specific identification. Restricted debt investments are kept as security for obligations arising from our self-insurance programs. At December 31, 2019 , these debt investments had a fair value of $21,766 and a net unrealized holding gain of $2,104 . At December 31, 2018 , these debt investments had a fair value of $22,785 and a net unrealized holding gain of $979 . In 2019 and 2018 , our debt and equity investments generated interest and dividend income of $1,364 and $818 , respectively, which is included in interest, dividend and other income in our consolidated statements of operations. The following table summarizes the fair value and gross unrealized losses related to our debt investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position for the years ended: Debt Investments Less than 12 months Greater than 12 months Total Fair Value Unrealized Loss Fair Value Unrealized Fair Value Unrealized December 31, 2019 $ 292 $ 10 $ — $ — $ 292 $ 10 December 31, 2018 $ 1,688 $ 31 $ 12,234 $ 265 $ 13,922 $ 296 We routinely evaluate our debt investments to determine if they have been impaired. If the fair value of a debt investment is less than its book or carrying value and we expect that situation to continue for a more than temporary period, we will record an “other than temporary impairment” loss in our consolidated statements of operations. We evaluate the fair value of our debt investments by reviewing each investment’s current market price, the ratings of the investment, the financial condition of the issuer and our intent and ability to retain the investment during temporary market price fluctuations or until maturity. In evaluating the factors described above, we presume a decline in value to be an “other than temporary impairment” if the quoted market price of the investment is below the investment’s cost basis for an extended period. However, this presumption may be overcome if there is persuasive evidence indicating the value decline is temporary in nature, such as when the operating performance of the obligor is strong or if the market price of the investment is historically volatile. Additionally, there may be instances in which impairment losses are recognized even if the decline in value does not meet the criteria described above, such as if we plan to sell the investment in the near term and the fair value is below our cost basis. When we believe that a change in fair value of a debt investment is temporary, we record a corresponding credit or charge to other comprehensive income for any unrealized gains and losses. When we determine that impairment in the fair value of a debt investment is an “other than temporary impairment”, we record a charge to earnings. We did not record such an impairment charge for the years ended December 31, 2019 and 2018 . Deferred Financing Costs. We capitalize issuance costs related to our secured revolving credit facility, or our credit facility, and amortize the deferred costs over the term of the agreement governing our credit facility, or our credit agreement. Our unamortized balance of deferred finance costs was $980 and $187 at December 31, 2019 and 2018 , respectively, of which $692 and $187 was included in other current assets on our consolidated balance sheets as of December 31, 2019 and 2018 , respectively, and $288 and $0 was included in other long-term assets on our consolidated balance sheets as of December 31, 2019 and 2018 , respectively. In connection with an amendment to the agreement governing our prior credit facility, in December 2018, we wrote off $554 in deferred financing fees in the fourth quarter of 2018 and recorded such amount to interest and other expense in our consolidated statements of operations. No such write-offs occurred during the year ended December 31, 2019. In June 2019, we entered into a new credit agreement to replace our prior credit facility with our $65,000 secured revolving credit facility. See Note 8 for more information on our credit facility. At December 31, 2019 , the weighted average amortization period remaining, related to our finance costs, is less than two years. Assets and Liabilities Held for Sale. We designate communities as held for sale when it is probable that the communities will be sold within one year. We record these assets on the consolidated balance sheets at the lesser of the carrying value and fair value less estimated selling costs. If the carrying value is greater than the fair value less the estimated selling costs, we record an impairment charge. We evaluate the fair value of the assets held for sale each period to determine if it has changed. At December 31, 2019 , we designated all communities under our then master leases with DHC as held for sale, because, pursuant to the Transaction Agreement, effective January 1, 2020, those leases were terminated and we and DHC entered into the New Management Agreements. Property and Equipment. Property and equipment are recorded at cost and depreciated using the straight-line basis over their estimated useful lives, which are typically as follows: Asset Class Estimated Useful Life (in years) Buildings 40 Building improvements 3 - 15 Equipment 7 Computer equipment and software 5 Furniture and fixtures 7 We regularly evaluate whether events or changes in circumstances have occurred that could indicate impairment in the value of our long-lived assets. If there is an indication that the carrying value of an asset is not recoverable, we determine the amount of impairment loss, if any, by comparing the historical carrying value of the asset to its estimated fair value, with any amount in excess of fair value recognized as an expense in the current period. We determine estimated fair value through an evaluation of recent financial performance, recent transactions for similar assets, market conditions and projected cash flows using standard industry valuation techniques. Undiscounted cash flow projections and estimates of fair value amounts are based on a number of assumptions such as revenue and expense growth rates, estimated holding periods and estimated capitalization rates (Level 3). Equity Method Investments. As of December 31, 2019 , and until its dissolution on February 13, 2020, we and six other shareholders each owned approximately 14.3% of the outstanding equity of Affiliates Insurance Company, or AIC. Although we owned less than 20% of AIC, we used the equity method to account for this investment because we believed that we had significant influence over AIC, as all of our then Directors were also directors of AIC. Under the equity method, we recorded our percentage share of net earnings from AIC in our consolidated statements of operations. If we determined there was an “other than temporary impairment” in the fair value of this investment, we would have recorded a charge to earnings. In evaluating the fair value of this investment, we have considered, among other things, the assets and liabilities held by AIC, AIC’s overall financial condition and earning trends, and the financial condition and prospects for the insurance industry generally. As of December 31, 2019 , we had invested $6,034 in AIC. As discussed further in Note 14, AIC was dissolved on February 13, 2020, and in connection with this dissolution, we and each other AIC shareholder received an initial liquidating distribution of $9,000 in December 2019. Legal Proceedings and Claims. We have been, are currently, and expect in the future to be involved in claims, lawsuits, and regulatory and other government audits, investigations and proceedings arising in the ordinary course of our business, some of which may involve material amounts. Also, the defense and resolution of these claims, lawsuits, and regulatory and other government audits, investigations and proceedings may require us to incur significant expense. We account for claims and litigation losses in accordance with FASB, Accounting Standards Codification ™ , or ASC, Topic 450, Contingencies . Under FASB ASC Topic 450, loss contingency provisions are recorded for probable and estimable losses at our best estimate of a loss or, when a best estimate cannot be made, at our estimate of the minimum loss. These estimates are often developed prior to knowing the amount of the ultimate loss, require the application of considerable judgment, and are refined as additional information becomes known. Accordingly, we are often initially unable to develop a best estimate of loss and therefore the estimated minimum loss amount, which could be zero , is recorded; then, as information becomes known, the minimum loss amount is updated, as appropriate. Occasionally, a minimum or best estimate amount may be increased or decreased when events result in a changed expectation. Self-Insurance. We partially self-insure up to certain limits for workers’ compensation, professional and general liability, automobile and property coverage. Claims that exceed these limits are insured up to contractual limits, over which we are self-insured. We fully self-insure all health-related claims for our covered employees. We have established an offshore captive insurance company subsidiary that participates in our workers’ compensation, professional and general liability and automobile insurance programs. Determining reserves for the casualty, liability, workers’ compensation and healthcare losses and costs that we have incurred as of the end of a reporting period involves significant judgments based upon our experience and our expectations of future events, including projected settlements for pending claims, known incidents that we expect may result in claims, estimates of incurred but not yet reported claims, expected changes in premiums for insurance provided by insurers whose policies provide for retroactive adjustments, estimated litigation costs and other factors. Since these reserves are based on estimates, the actual expenses we incur may differ from the amount reserved. We regularly adjust these estimates to reflect changes in the foregoing factors, our actual claims experience, recommendations from our professional consultants, changes in market conditions and other factors; it is possible that such adjustments may be material. Our total self-insurance reserves were $65,908 and $67,534 as of the year ended December 31, 2019 and 2018 , respectively, and are included in accrued compensation and benefits, other current liabilities and accrued self-insurance obligations in our consolidated balance sheets. Lease Accounting. On January 1, 2019, we adopted FASB ASC Topic 842, Leases , or ASC Topic 842, utilizing the modified retrospective transition method with no adjustments to comparative periods presented. Additionally, we elected the practical expedients within FASB ASU No. 2016-02, Leases (Topic 842) , or ASU No. 2016-02 that allow an entity to not reassess as of January 1, 2019, its prior conclusions on whether an existing contract contains a lease, lease classification for existing leases, and whether costs incurred for existing leases qualify as initial direct costs. In accordance with ASC Topic 842, at the inception of a contract, we, as lessee, evaluate and determine whether such a contract is or contains a lease based on whether such contract conveys the right to control the use of the identified asset. We apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. We have elected to apply the portfolio approach where possible in assessing our leases and performed an assessment of all our leases. In addition, we have elected the practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component if certain conditions are met. As lessee, we lease senior living communities and our headquarters, and enter into contracts for the use and maintenance of various pieces of equipment that contain a lease. We have determined that none of these leases have met any of the criteria to be classified as a finance lease and, therefore, we have accounted for all of these leases as operating leases. We have determined that our leases for the use and maintenance of equipment are short-term leases. In accordance with ASC Topic 842, we have made an accounting policy election for our leases, which are determined to be short-term leases, whereby we recognize the lease payments on a straight-line basis over the lease term and variable lease payments in the period in which the obligations for those payments are incurred. Expenses related to these leases are recognized in the statement of operations in other senior living operating expenses and are not material to our consolidated financial statements. We have determined that our leases for senior living communities and our headquarters are long-term leases. In accordance with ASC Topic 842, a lessee is required to record a right of use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Accordingly, we have recorded a right of use asset and lease liability for all of our leased communities and our headquarters. We determined that the discount rate implicit in the leases was not readily available, and therefore, in accordance with ASC Topic 842, we determined our incremental borrowing rate, or IBR, to calculate the right of use assets and lease liabilities. For purposes of determining the lease term, we concluded that it is not reasonably certain that our lease extensions will be exercised and, therefore, we included payments required to be made under the committed lease term in calculating the right of use assets and lease liabilities. Expenses related to these leases are recognized in the statement of operations in rent expense, except for the expense related to our headquarters, which is recorded in general and administrative expenses. We recognized variable lease payments primarily relating to percentage rent paid under our leases with DHC and operating costs such as insurance and real estate taxes, in the statement of operations in the period in which the obligations for those payments are incurred. We have not capitalized any initial direct costs related to our leases as these costs are not material to our consolidated financial statements. ASC Topic 842 provides lessors with a practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component if certain conditions are met. In addition, ASC Topic 842 clarifies which ASC Topic (Topic 842 or FASB ASC Topic 606, Revenue from Contracts with Customers , or ASC Topic 606) applies for the combined component. Specifically, if the non-lease components associated with the lease component are the predominant component of the combined components, the lessor should account for the combined component in accordance with ASC Topic 606. Otherwise, the lessor should account for the combined component as an operating lease in accordance with ASC Topic 842. We have elected this practical expedient and recognized revenue under our resident agreements at our independent living and assisted living communities based upon the predominant component rather than allocating the consideration and separately accounting for it under ASC Topic 842 and ASC Topic 606. We have concluded that the non-lease components of the agreements with respect to our independent and assisted living communities are the predominant component of the leases and, therefore, we recognize revenue for these agreements under ASC Topic 606. Stock-Based Compensation. We have a stock-based compensation plan under which we grant equity-based awards. We measure the compensation cost of award recipients’ services received in exchange for an award of equity instruments based on the grant date fair value of the underlying award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award. The impact of forfeitures are recognized as they occur. Income Taxes. Our income tax expense includes U.S. income taxes. Certain items of income and expense are not reported in tax returns and financial statements in the same year. We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences to be included in our financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse, while the effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We can recognize a tax benefit only if it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that has a greater than 50% likelihood of being realized. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent, we believe that we are more likely than not that all or a portion of deferred tax assets will not be realized, we establish a valuation allowance to reduce the deferred tax assets to the appropriate valuation. To the extent we establish a valuation allowance or increase or decrease this allowance in a given period, we include the related tax expense or tax benefit within the tax provision in the consolidated statement of operations in that period. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. In the future, if we determine that we would be able to realize our deferred tax assets in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance and record an income tax benefit within the tax provision in the consolidated statement of operations in that period. We pay franchise taxes in certain states in which we have operations. We have included franchise taxes in general and administrative and other senior living operating expenses in our consolidated statements of operations. Revenue Recognition. We recognize revenue from contracts with customers in accordance with ASC Topic 606 using the practical expedient in paragraph 606-10-10-4 that allows for the use of a portfolio approach, because we have determined that the effect of applying the guidance to our portfolios of contracts within the scope of ASC Topic 606 on our consolidated financial statements would not differ materially from applying the guidance to each individual contract within the respective portfolio or our performance obligations within such portfolio. The five-step model defined by ASC Topic 606 requires us to: (i) identify our contracts with customers, (ii) identify our performance obligations under those contracts, (iii) determine the transaction prices of those contracts, (iv) allocate the transaction prices to our performance obligations in those contracts and (v) recognize revenue when each performance obligation under those contracts is satisfied. Revenue is recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. A substantial portion of our revenue at our independent living and assisted living communities relates to contracts with residents for housing services that are generally short-term in nature and initially is subject to ASC Topic 842. As previously discussed, we have concluded that the non-lease components of these contracts are the predominant components of the contracts; therefore, we recognize revenue for these contracts under ASC Topic 606. Our contracts with residents and other customers that are within the scope of ASC Topic 606 are generally short-term in nature. We have determined that services performed under those contracts are considered one performance obligation in accordance with ASC Topic 606 as such services are regarded as a series of distinct events with the same timing and pattern of transfer to the resident or customer. Revenue is recognized for those contracts when our performance obligation is satisfied by transferring control of the service provided to the resident or customer, which is generally when the services are provided over time. Senior Living Revenue. Resident fees at our independent living and assisted living communities consist of regular monthly charges for basic housing and support services and fees for additional requested services, such as assisted living services, personalized health services and ancillary services. Fees are specified in our agreements with residents, which are generally short-term ( 30 days to one year ), with regular monthly charges billed in advance. Funds received from residents in advance of services being provided are not material to our consolidated financial statements. Some of our senior living communities require payment of an upfront entrance fee in advance of a resident moving into the community; substantially all of these community fees are non-refundable and are initially recorded as deferred revenue and included in other current liabilities in our consolidated balance sheets. These deferred amounts are then amortized on a straight line basis into revenue over the term of the resident's agreement. When the resident no longer resides within our community, the remaining deferred non-refundable fees are recognized in revenue. Revenue recorded and deferred in connection with community fees is not material to our consolidated financial statements. Revenue for basic housing and support services and additional requested services is recognized in accordance with ASC Topic 606 and measured based on the consideration specified in the resident agreement and is recorded when the services are provided. In our SNFs and certain of our independent and assisted living communities where we provide SNF services, we are paid fixed daily rates from governmental and contracted third party payers, and we charge a predetermined fixed daily rate for private pay residents. These fixed daily rates and certain other fees are billed monthly in arrears. Although there are complex regulatory compliance rules governing fixed daily rates, we have no episodic payments or capitation arrangements. We currently use the “most likely amount” technique to estimate revenue in accordance with ASC Topic 606, although rates are generally known and considered fixed prior to services being performed, whether included in the resident agreement or contracted with governmental or third party payers. Rate adjustments from Medicare or Medicaid are recorded when known (without regard to when the assessment is paid or withheld), and subsequent adjustments to these amounts are recorded in revenues when known. Billings under certain of these programs are subject to audit and |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consist of the following: As of December 31, 2019 2018 Land $ 12,155 $ 16,383 Buildings and improvements 201,447 208,375 Furniture, fixtures and equipment 59,174 239,240 Property and equipment, at cost 272,776 463,998 Accumulated depreciation (105,529 ) (220,125 ) Property and equipment, net $ 167,247 $ 243,873 We recorded depreciation expense relating to our property and equipment of $16,640 and $35,859 for the years ended December 31, 2019 and 2018 , respectively. We review the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If there is an indication that the carrying value of an asset is not recoverable, we determine the amount of impairment loss, if any, by comparing the historical carrying value of the asset to its estimated fair value. We determine estimated fair value based on input from market participants, our experience selling similar assets, market conditions and internally developed cash flow models that our assets or asset groups are expected to generate, and we consider these estimates to be a Level 3 fair value measurement. As a result of our long-lived assets impairment review, we recorded $3,148 and $387 of impairment charges to certain of our long-lived assets for the years ended December 31, 2019 and 2018 , respectively. The fair values of the impaired assets were $4,520 and $362 as of December 31, 2019 and 2018 , respectively. We also recorded long-lived asset impairment charges of $134 for the year ended December 31, 2019 , to reduce the carrying value of five senior living communities we and DHC sold to their estimated fair value less costs to sell. For the year ended December 31, 2018 , we recorded long-lived asset impairment charges of $74 to reduce the carrying value of one senior living community we and DHC sold to its estimated fair value less costs to sell. See Notes 9 and 11 for further information regarding the sales of these communities. As of December 31, 2019 and 2018 , we had $4,813 and $0 , respectively, of net property and equipment classified as held for sale and presented separately on our consolidated balance sheets. See Notes 9 and 11 for more information regarding our communities classified as held for sale. As of December 31, 2018 , we had $1,863 of assets related to our leased senior living communities included in our property and equipment that we subsequently sold during the year ended December 31, 2019 to DHC for increased rent pursuant to the terms of our leases with DHC. As of January 1, 2020, pursuant to the Transaction Agreement, DHC assumed $4,813 of net property and equipment related to our leased senior living communities that were classified as held for sale as of December 31, 2019 . See Note 9 for more information regarding our leases and other arrangements with DHC. |
Other Intangible Assets
Other Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | Other Intangible Assets The other intangible assets balance includes management agreements, trademarks, resident agreements, liquor licenses and other intangible assets that we primarily acquired in connection with our acquisitions of senior living communities. The changes in the carrying amount of our other intangible assets for the years ended December 31, 2019 and 2018 are as follows: December 31, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Indefinite lived intangible assets $ 191 $ — $ 191 $ 191 $ — $ 191 Definite lived intangible assets 3,767 (3,767 ) — 3,767 (3,767 ) — $ 3,958 $ (3,767 ) $ 191 $ 3,958 $ (3,767 ) $ 191 In connection with the Restructuring Transactions, the indefinite lived intangible assets have been reclassified to assets held for sale as of December 31, 2019 on our consolidated balance sheets. We amortize definite lived intangible assets using the straight-line method over the useful lives of the assets which have identifiable useful lives commencing on the date of acquisition. Total amortization expense for definite lived intangible assets for the year ended December 31, 2018 was $80 . There was no amortization expense for definite lived intangible assets for the year ended December 31, 2019 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Significant components of our deferred tax assets and liabilities at December 31, 2019 and 2018 , which are included in other long-term assets on our consolidated balance sheets, were as follows: As of December 31, 2019 2018 Non-current deferred tax assets: Allowance for doubtful accounts $ 1,204 $ 894 Deferred gains on sale and leaseback transactions 357 18,789 Insurance reserves 2,500 2,558 Tax credits 19,394 19,636 Tax loss carryforwards 62,098 57,914 Interest expense 958 801 Depreciable assets 5,778 4,831 Goodwill 2,536 2,992 Right of use lease obligation 5,886 — Other assets 528 1,050 Total non-current deferred tax assets before valuation allowance 101,239 109,465 Valuation allowance: (87,665 ) (101,300 ) Total non-current deferred tax assets 13,574 8,165 Non-current deferred tax liabilities: Lease expense (4,914 ) (5,434 ) Employee stock grants (7 ) (35 ) Right of use lease asset (5,886 ) — Other liabilities (1,818 ) (1,374 ) Total non-current deferred tax liabilities (12,625 ) (6,843 ) Net deferred tax assets $ 949 $ 1,322 On December 22, 2017, legislation commonly referred to as the Tax Cuts and Jobs Act of 2017, or the TCJA, became effective, enacting significant change to the United States Internal Revenue Code of 1986, as amended, or the IRC. Among other things, the TCJA reduces the corporate income tax rate from 35% to 21%, repeals the corporate alternative minimum tax, or AMT, limits various business deductions, modifies the maximum usage of net operating losses and significantly modifies various international tax provisions. The changes effected by the TCJA are generally effective for tax years ending after December 31, 2017. In addition, the TCJA will have other impacts on us in the future. Our federal net operating losses incurred prior to December 31, 2017 will continue to have a 20-year carryforward limitation applied to them and will need to be evaluated for recoverability in the future. Federal net operating losses incurred after December 31, 2017, if any, will have an indefinite life, but their usage will be limited to 80% of taxable income in any given year. The deduction of business interest is limited for any tax year beginning after 2017 to the sum of the taxpayer’s business interest income, floor plan financing, and 30 percent of adjusted taxable income. Any disallowed interest generally may be carried forward indefinitely. As of December 31, 2019 , our federal net operating loss carryforwards, which are scheduled to begin expiring in 2027 if unused, were approximately $184,850 , and our federal tax credit carryforwards, which begin expiring in 2026 if unused, were approximately $18,723 . At December 31, 2019 , our federal tax returns filed for the 2016, 2017, and 2018 tax years are subject to examination and our net operating loss carryforwards and tax credit carryforwards are subject to adjustment by the Internal Revenue Service. While we have significant net operating losses, due to a “change of control” under IRC Sections 382, Limitation on Net Operating Loss Carryforwards and Certain Built-In Losses Following Ownership Change , and 383, Special Limitations on Certain Excess Credits, as a result of the Share Issuances on January 1, 2020, we expect a significant annual limitation on the amount of pre-2020 net operating losses that we will be able to utilize subsequent to 2019. Management assessed the available positive and negative evidence to estimate if sufficient future taxable income will be generated to realize the existing deferred tax assets. An important piece of objective negative evidence evaluated was the significant losses we incurred over the three -year period ending December 31, 2019 . That objective negative evidence is difficult to overcome and would require a substantial amount of objectively verifiable positive evidence beyond projections of future income to support the realization of our deferred tax assets. Accordingly, on the basis of that assessment, we have recorded a valuation allowance against the majority of our deferred tax assets and liabilities as of December 31, 2019 and 2018 . In the future, if we believe that we will more likely than not realize the benefit of these deferred tax assets, we will adjust our valuation allowance and recognize an income tax benefit, which may affect our results of operations. The changes in our valuation allowance for deferred tax assets were as follows: Balance at Beginning of Period Amounts Charged to Expense Amounts Charged Off, Net of Recoveries Amounts Charged (Credited) to Equity Balance at End of Period Year Ended December 31, 2018 $ 80,154 $ — $ 21,074 $ 72 $ 101,300 Year Ended December 31, 2019 $ 101,300 $ — $ (13,341 ) $ (294 ) $ 87,665 For the year ended December 31, 2019 , we recognized a provision for income taxes from operations of $56 , attributable to state income taxes. The provision for income taxes from operations is as follows: Years Ended December 31, 2019 2018 Current tax provision (benefit): Federal $ (561 ) $ (554 ) State 244 151 Total current tax benefit (317 ) (403 ) Deferred tax provision: Federal 277 554 State 96 96 Total deferred tax provision 373 650 Total tax provision $ 56 $ 247 The principal reasons for the difference between our effective tax rate on operations and the U.S. federal statutory income tax rate are as follows: Years Ended December 31, 2019 2018 Taxes at statutory U.S. federal income tax rate (21.0 )% (21.0 )% State and local income taxes, net of federal tax benefit 17.2 % (5.8 )% Tax credits (0.9 )% — % Change in valuation allowance (67.4 )% 26.8 % Deferred taxes 72.4 % — % Other differences, net — % 0.3 % Effective tax rate 0.3 % 0.3 % We utilize a two-step process for the measurement of uncertain tax positions that have been taken or are expected to be taken on a tax return. The first step is a determination of whether the tax position should be recognized in the financial statements. The second step determines the measurement of the tax position. As of December 31, 2019 and 2018 , there were no uncertain tax positions. We recognize interest and penalties related to income taxes in income tax expense, and such amounts were not material for the years ended December 31, 2019 and 2018 . |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share We calculated EPS for the years ended December 31, 2019 and 2018 using the weighted average number of common shares outstanding during the periods. When applicable, diluted EPS reflects the more dilutive earnings per common share amount calculated using the two-class method or the treasury stock method. The years ended December 31, 2019 and 2018 had 120,718 and 140,416 , respectively, of potentially dilutive restricted unvested common shares that were not included in the calculation of diluted EPS because to do so would have been antidilutive. |
Fair Values of Assets and Liabi
Fair Values of Assets and Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Values of Assets and Liabilities | Fair Values of Assets and Liabilities Our assets recorded at fair value have been categorized based upon a fair value hierarchy in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures . We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels. Level 1 - Inputs are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date. Level 2 - Inputs are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments and quoted prices in inactive markets. Level 3 - Inputs are generated from model-based techniques that use significant assumptions that are not observable in the market. Recurring Fair Value Measures The tables below present certain of our assets measured at fair value at December 31, 2019 and 2018 , categorized by the level of inputs, as defined in the fair value hierarchy under U.S. generally accepted accounting principles, or GAAP, used in the valuation of each asset. As of December 31, 2019 Description Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents (1) $ 27,456 $ 27,456 $ — $ — Investments: Equity investments (2) Financial services industry 1,233 1,233 — — Healthcare 395 395 — — Technology 281 281 — — Other 4,500 4,500 — — Total equity investments 6,409 6,409 — — Debt investments (3) International bond fund (4) 2,680 — 2,680 — High yield fund (5) 2,977 — 2,977 — Industrial bonds 1,180 — 1,180 — Technology bonds 2,189 — 2,189 — Government bonds 9,537 9,537 — — Energy bonds 625 — 625 — Financial bonds 1,853 — 1,853 — Other 725 — 725 — Total debt investments 21,766 9,537 12,229 — Total investments 28,175 15,946 12,229 — Total $ 55,631 $ 43,402 $ 12,229 $ — As of December 31, 2018 Description Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents (1) $ 23,390 $ 23,390 $ — $ — Investments: Equity investments (2) Financial services industry 1,074 1,074 — — Healthcare 291 291 — — Technology 174 174 — — Other 3,927 3,927 — — Total equity investments 5,466 5,466 — — Debt investments (3) International bond fund (4) 2,537 — 2,537 — High yield fund (5) 2,669 — 2,669 — Industrial bonds 1,692 — 1,692 — Technology bonds 2,375 — 2,375 — Government bonds 9,791 9,791 — — Energy bonds 595 — 595 — Financial bonds 1,858 — 1,858 — Other 1,268 — 1,268 — Total debt investments 22,785 9,791 12,994 — Total investments 28,251 15,257 12,994 — Total $ 51,641 $ 38,647 $ 12,994 $ — _______________________________________ (1) Cash equivalents consist of short-term, highly liquid investments and money market funds held primarily for obligations arising from our self-insurance programs. Cash equivalents are reported in our consolidated balance sheets as cash, cash equivalents and current and long-term restricted cash. Cash equivalents include $23,014 and $19,529 of balances that are restricted at December 31, 2019 and 2018 , respectively. (2) The fair value of our equity investments is readily determinable. During the years ended December 31, 2019 and 2018 , we received gross proceeds of $1,963 and $2,407 , respectively, in connection with the sales of equity investments and recorded gross realized gains totaling $289 and $280 , respectively, and gross realized losses totaling $60 and $72 , respectively. (3) As of December 31, 2019 , our debt investments, which are classified as available for sale, had a fair value of $21,766 with an amortized cost of $19,662 ; the difference between the fair value and amortized cost amounts resulted from unrealized gains of $2,114 , net of unrealized losses of $10 . As of December 31, 2018 , our debt investments had a fair value of $22,785 with an amortized cost of $21,806 ; the difference between the fair value and amortized cost amounts resulted from unrealized gains of $1,276 , net of unrealized losses of $296 . Debt investments include $12,477 and $13,943 of balances that are restricted as of December 31, 2019 and 2018 , respectively. At December 31, 2019 , one of the debt investments we hold, with a fair value of $292 , has been in a loss position for less than 12 months and we did not hold any debt investment with a fair value in a loss position for greater than 12 months. We do not believe this investment is impaired primarily because it has not been in a loss position for an extended period of time, the financial conditions of the issuer of this investment remain strong with solid fundamentals, or we intend to hold the investment until recovery, and other factors that support our conclusion that the loss is temporary. During the years ended December 31, 2019 and 2018 , we received gross proceeds of $3,230 and $7,031 , respectively, in connection with the sales of debt investments and recorded gross realized gains totaling $7 and $10 , respectively, and gross realized losses totaling $7 and $119 , respectively. We record gains and losses on the sales of these investments using the specific identification method. (4) The investment strategy of this fund is to invest principally in fixed income securities issued by non-U.S. issuers. The fund invests in such securities or investment vehicles as it considers appropriate to achieve the fund’s investment objective, which is to provide an above average rate of total return while attempting to limit investment risk by investing in a diversified portfolio of U.S. dollar investment grade fixed income securities. There are no unfunded commitments and the investment can be redeemed weekly. (5) The investment strategy of this fund is to invest principally in fixed income securities. The fund invests in such securities or investment vehicles as it considers appropriate to achieve the fund’s investment objective, which is to provide an above average rate of total return while attempting to limit investment risk by investing in a diversified portfolio of primarily fixed income securities issued by companies with below investment grade ratings. There are no unfunded commitments and the investment can be redeemed weekly. Our financial assets (which include cash equivalents and investments) have been valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third party pricing services or other market observable data. During the year ended December 31, 2019 , we did not change the type of inputs used to determine the fair value of any of our assets and liabilities that we measure at fair value. Accordingly, there were no transfers of assets or liabilities between levels of the fair value hierarchy during the year ended December 31, 2019 . The carrying value of accounts receivable and accounts payable approximates fair value as of December 31, 2019 and 2018 . The carrying value and fair value of our mortgage notes payable were $7,533 and $8,861 , respectively, as of December 31, 2019 and $7,872 and $8,986 , respectively, as of December 31, 2018 , and are categorized in Level 3 of the fair value hierarchy in their entirety. We estimate the fair values of our mortgage notes payable by using discounted cash flow analyses and currently prevailing market terms as of the measurement date. Non-recurring Fair Value Measures We review the carrying value of our long-lived assets, including our right of use assets, property and equipment and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. See Note 3 for more information regarding fair value measurements related to impairments of our long-lived assets we recorded. |
Indebtedness
Indebtedness | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness In June 2019, we entered into a second amended and restated credit agreement with Citibank, N.A., as administrative agent and lender, and a syndicate of other lenders, pursuant to which we obtained a $65,000 secured revolving credit facility. Our credit facility replaced our prior credit facility, which provided for borrowings of up to $54,000 , subject to conditions, and was scheduled to mature on June 28, 2019. In June 2019, we repaid, in aggregate, approximately $51,500 of outstanding borrowings under our prior credit facility. Our credit facility is scheduled to mature on June 12, 2021, and, subject to the payment of an extension fee and meeting other conditions, we have an option to extend the stated maturity date of our credit facility for a one year period. Other terms of our credit facility are substantially similar to those of our prior credit facility. We paid fees of $1,271 in 2019 in connection with the replacement of our credit facility, which fees were deferred and are being amortized over the initial term of our credit facility. Our credit facility is available for general business purposes, including acquisitions, and provides for the issuance of letters of credit. We are required to pay interest at a rate of LIBOR plus a premium of 250 basis points per annum, or at a base rate, as defined in our credit agreement, plus 150 basis points per annum, on borrowings under our credit facility; the annual interest rates as of December 31, 2019 were 4.20% and 6.25% , respectively. We are also required to pay a quarterly commitment fee of 0.35% per annum on the unused part of the available borrowings under our credit facility. The weighted average annual interest rate for borrowings under our credit facility was 5.00% for the year ended December 31, 2019 . The weighted average annual interest rate for borrowings under our prior credit facility was 4.99% and 6.29% , for the years ended December 31, 2019 and 2018 , respectively. As of December 31, 2019 , we had no borrowings under our credit facility, letters of credit issued in an aggregate amount of $3,238 and we had $55,856 available for borrowing under our credit facility. We incurred aggregate interest expense and other associated costs related to our credit facilities of $2,089 and $1,965 for the years ended December 31, 2019 and 2018 , respectively. Our credit facility is secured by real estate mortgages on 11 senior living communities with a combined 1,245 living units owned by certain of our subsidiaries that guarantee our obligations under our credit facility. Our credit facility is also secured by these subsidiaries’ accounts receivable and related collateral. The amount of available borrowings under our credit facility is subject to our having qualified collateral, which is primarily based on the value of the communities securing our obligations under our credit facility. Our credit facility provides for acceleration of payment of all amounts outstanding under our credit facility upon the occurrence and continuation of certain events of default, including a change of control of us, as defined in our credit agreement. Our credit agreement contains financial and other covenants, including those that restrict our ability to pay dividends or make other distributions to our stockholders in certain circumstances. At December 31, 2019 , we had seven irrevocable standby letters of credit outstanding, totaling $28,626 . In 2019, we increased, from $22,700 to $25,388 , one of these letters of credit which secures our workers’ compensation insurance program, and this letter of credit is currently collateralized by approximately $21,655 of cash equivalents and $7,250 of debt and equity investments. This letter of credit currently expires in June 2020 and is automatically extended for one year terms unless notice of nonrenewal is provided by the issuing bank prior to the end of the applicable term. At December 31, 2019 , the cash equivalents collateralizing this letter of credit, including accumulated interest, were classified as short-term restricted cash in our consolidated balance sheets, and the debt and equity investments collateralizing this letter of credit are classified as short-term investments in our consolidated balance sheets. The remaining six irrevocable standby letters of credit outstanding at December 31, 2019 , totaling $3,238 , secure certain of our other obligations. These letters of credit are scheduled to mature between June 2020 and October 2020 and are required to be renewed annually. As of December 31, 2019 , our obligations under these six letters of credit, totaling $3,238 , remained issued and outstanding under our credit facility and we had $55,856 available for further borrowing under our credit facility. At December 31, 2019 , one of our senior living communities was encumbered by a mortgage. This mortgage contains standard mortgage covenants. We recorded a mortgage discount in connection with the assumption of this mortgage note as part of our acquisition of the community that secures this mortgage note in order to record this mortgage at its estimated fair value. We amortize this mortgage discount as an increase in interest expense until the maturity of this mortgage. This mortgage note requires payments of principal and interest monthly until maturity. The following table is a summary of this mortgage note as of December 31, 2019 : Balance as of December 31, 2019 Contractual Stated Interest Rate Effective Interest Rate Maturity Date Monthly Payment Lender Type $ 7,786 (1) 6.20 % 6.70 % September 2032 $ 72 Federal Home Loan Mortgage Corporation ________________________________________________________________ (1) Contractual principal balance excluding unamortized discount and debt issuance costs of $253 . We incurred mortgage interest expense, net of discount amortization, of $526 and $1,053 for the years ended December 31, 2019 and 2018 , respectively. Our mortgage debt requires monthly payments into escrows for taxes, insurance and property replacement funds; certain withdrawals from escrows require Federal Home Loan Mortgage Corporation approval. In February 2018, in connection with the sale of one of our senior living communities to DHC, DHC assumed a Federal National Mortgage Association mortgage note that had a principal balance of $16,776 and required interest at the contracted rate of 6.64% per annum. In connection with DHC’s assumption of this debt, we recorded a gain of $543 , which amount is included in gain on sale of senior living communities in our consolidated statements of operations. In June 2018, in connection with the sale of two of our senior living communities to DHC, DHC assumed a commercial lender mortgage note that had a principal balance of $16,588 and required interest at the contracted rate of 5.75% per annum. In connection with DHC’s assumption of this debt, we recorded a gain of $638 , which amount is included in gain on sale of senior living communities in our consolidated statements of operations. As of December 31, 2019, the required principal payments due during the next five years and thereafter under the terms of our mortgage note are as follows: Year Principal Payment 2020 $ 387 2021 413 2022 440 2023 469 2024 498 Thereafter 5,579 Total $ 7,786 Less: Unamortized net discount and debt issuance costs $ (253 ) Total mortgage note payable $ 7,533 Less: Short-term portion of mortgage note payable $ (362 ) Long-term portion of mortgage note payable $ 7,171 As of December 31, 2019 , we believe we were in compliance with all applicable covenants under our credit facility and mortgage debts. See Note 9 for information regarding the $25,000 credit facility we obtained from DHC on April 1, 2019. The DHC credit facility matured and was terminated on January 1, 2020, in connection with the completion of the Restructuring Transactions. There were no borrowings outstanding under the DHC credit facility at the time of such termination and we did not make any borrowings under the DHC credit facility during its term. |
Leases with DHC and Healthpeak
Leases with DHC and Healthpeak Properties, Inc and Management Agreements with DHC | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases with DHC and Healthpeak Properties, Inc and Management Agreements with DHC | Leases with DHC and Healthpeak Properties, Inc and Management Agreements with DHC As of December 31, 2019, we were DHC’s largest tenant and DHC was our largest landlord. As of December 31, 2019 and 2018 , we leased 166 and 184 senior living communities from DHC, respectively. We leased these senior living communities from DHC pursuant to five master leases. As of December 31, 2019 , we managed senior living communities for the account of DHC. As of December 31, 2019 and 2018 , we also managed 78 and 76 senior living communities, respectively, for the account of DHC, pursuant to management and pooling agreements. Effective as of January 1, 2020, we restructured our business arrangements with DHC as further described below, and after giving effect to the Restructuring Transactions, we manage 244 senior living communities for the account of DHC pursuant to the New Management Agreements. Restructuring our Business Arrangements with DHC . On April 1, 2019, we entered into the Transaction Agreement, pursuant to which, effective as of the Conversion Time: • our five then existing master leases with DHC for all of DHC’s senior living communities that we then leased, as well as our then existing management and pooling agreements with DHC for DHC’s senior living communities that were then operated by us, were terminated and replaced with the New Management Agreements; • we effected the Share Issuances pursuant to which we issued 10,268,158 of our common shares to DHC and an aggregate of 16,118,849 of our common shares to DHC’s shareholders of record as of December 13, 2019; and • as consideration for the Share Issuances, DHC provided to us $75,000 of additional consideration by assuming certain of our working capital liabilities. In accordance with ASC Topic 360, Property, Plant and Equipment , or ASC 360, the senior living communities under the five then existing master leases with DHC that terminated, as described above, met the conditions to be classified as held for sale in reporting periods subsequent to our entry into the Transaction Agreement. As a result, as of December 31, 2019, we have classified these senior living communities as held for sale. The carrying value of these senior living communities was $(2,990) , and consisted of restricted cash of $5 , prepaid and other current assets of $4,545 , net property and equipment of $4,813 , other intangible assets of $191 , accrued real estate taxes of $10,615 , and security deposits and current portion of continuing care contracts of $1,929 , all of which were presented on our consolidated balance sheets as assets or liabilities held for sale. These communities, while leased by us, generated income (loss) from operations before income taxes of $46,316 and $(27,229) for the years ended December 31, 2019 and 2018, respectively. Also pursuant to the Transaction Agreement: (1) commencing February 1, 2019, the aggregate amount of monthly minimum rent payable to DHC by us under our master leases with DHC was reduced to $11,000 , as of February 1, 2019, subject to adjustment, and subsequently reduced in accordance with the Transaction Agreement as result of DHC’s subsequent sales of certain of the leased senior living communities, and no additional rent was payable to DHC by us from such date through the Conversion Time; and (2) on April 1, 2019, DHC purchased from us $49,155 of unencumbered Qualifying PP&E (as defined in the Transaction Agreement) related to DHC’s senior living communities then leased and operated by us. In accordance with ASC Topic 842, the reduction in the monthly minimum rent payable to DHC under our then existing master leases with DHC pursuant to the Transaction Agreement was determined to be a modification of these master leases, and we reassessed the classification of these master leases based on the modified terms and determined that these master leases continued to be classified as long-term operating leases until certain contingent events were achieved. On April 1, 2019, we recorded a lease inducement of $13,840 . During the period from April 1, 2019 through December 31, 2019, we amortized $1,416 of the lease inducements based on the remaining term of the master lease agreements as a reduction of rent expense. As of December 31, 2019, the remaining contingent events were achieved and accordingly, we remeasured the lease liability and right of use asset recorded in the consolidated balance sheets to zero and recognized $12,423 of a lease inducement as a reduction of rent expenses. Pursuant to the Transaction Agreement, we agreed to expand our Board of Directors within six months of January 1, 2020 to add an Independent Director (as defined in our Bylaws) reasonably satisfactory to DHC. On February 26, 2020, our Board of Directors elected Michael E. Wagner, M.D. as an Independent Director, which satisfied our agreement with DHC to expand our Board of Directors. Pursuant to the New Management Agreements, we will receive a management fee equal to 5% of the gross revenues realized at the applicable senior living communities plus reimbursement for our direct costs and expenses related to such communities, as well as an annual incentive fee equal to 15% of the amount by which the annual earnings before interest, taxes, depreciation and amortization, or EBITDA, of all communities on a combined basis exceeds the target EBITDA for all communities on a combined basis for such calendar year, provided that in no event shall the incentive fee be greater than 1.5% of the gross revenues realized at all communities on a combined basis for such calendar year. The New Management Agreements expire in 2034, subject to our right to extend for two consecutive five -year terms if we achieve certain performance targets for the combined managed communities portfolio, unless earlier terminated or timely notice of nonrenewal is delivered. The New Management Agreements also provide that DHC has, and in some cases we have, the option to terminate the agreements upon the acquisition by a person or group of more than 9.8% of the other’s voting stock and upon certain change in control events affecting the other party, as defined in the applicable agreements, including the adoption of any stockholder proposal (other than a precatory proposal) with respect to the other party, or the election to the board of directors or trustees, as applicable, of the other party of any individual, if such proposal or individual was not approved, nominated or appointed, as the case may be, by a majority of the other party’s board of directors or board of trustees, as applicable, in office immediately prior to the making of such proposal or the nomination or appointment of such individual. The New Management Agreements also provide DHC with the right to terminate the New Management Agreement for any community that does not earn 90% of the target EBITDA for such community for two consecutive calendar years or in any two of three consecutive calendar years, with the measurement period commencing January 1, 2021 (and the first termination not possible until the beginning of calendar year 2023); provided DHC may not in any calendar year terminate communities representing more than 20% of the combined revenues for all communities for the calendar year prior to such termination. Pursuant to a guaranty agreement dated as of January 1, 2020, made by us in favor of DHC’s applicable subsidiaries, we have guaranteed the payment and performance of each of our applicable subsidiary’s obligations under the applicable New Management Agreements. In connection with the Transaction Agreement, we entered into the DHC credit facility pursuant to which DHC extended to us a $25,000 line of credit. The DHC credit facility matured and was terminated on January 1, 2020, in connection with the completion of the Restructuring Transactions. There were no borrowings outstanding under the DHC credit facility at the time of such termination and we did not make any borrowings under the DHC credit facility during its term. We incurred transaction costs of $11,952 related to the Transaction Agreement and the Restructuring Transactions for the year ended December 31, 2019. Senior Living Communities Formerly Leased from DHC . Under our master leases with DHC, which terminated as of January 1, 2020, we paid DHC annual rent plus percentage rent equal to 4.0% of the increase in gross revenues at the applicable senior living communities over base year gross revenues as specified in the applicable lease. Our obligation to pay percentage rent under Lease No. 5 commenced in 2018. Different base years applied to those communities that pay percentage rent. The base year for a particular leased community was usually the first full calendar year after that community had become subject to that lease. As noted above, pursuant to the Transaction Agreement, we were no longer required to pay any additional rent to DHC beginning February 1, 2019. Our total annual rent payable to DHC was $129,785 and $207,760 as of December 31, 2019 and 2018 , respectively, excluding percentage rent. Our total rent expense under all our leases with DHC was $138,310 and $206,190 for the years ended December 31, 2019 and 2018 , respectively, which amounts included percentage rent of $1,547 and $5,542 for the years ended December 31, 2019 and 2018, respectively. The 2019 percentage rent occurred prior to, and was adjusted by, the Transaction Agreement. Rent expense for the year ended December 31, 2018, was net of lease inducement amortization and the amortization of the deferred gain associated with the sale and leaseback transaction with DHC in June 2016. Pursuant to the Transaction Agreement, our rent payable to DHC was reduced by a total of $13,840 in aggregate for February and March 2019 and we did not pay such amount to DHC. However, as the Transaction Agreement was not entered into until April 1, 2019, our rent expense for the three months ended March 31, 2019, was not adjusted for the rent reduction for February and March 2019. Instead, the rent reduction for February and March 2019, was determined to be a lease inducement, and the $13,840 was recorded as a reduction of the right of use asset on our consolidated balance sheets and was amortized as a reduction of rent expense over the remaining terms of our master leases. As of December 31, 2019 we had no rent outstanding to DHC. As of December 31, 2018 , we had outstanding rent due and payable to DHC $18,781 , which amount is included in due to related persons in our consolidated balance sheets. As of December 31, 2019, our leases with DHC were “triple net” leases, which generally required us to pay rent and all property operating expenses, to indemnify DHC from liability which may arise by reason of its ownership of the properties, to maintain the properties at our expense, to remove and dispose of hazardous substances on the properties in compliance with applicable law and to maintain insurance on the properties for DHC’s and our benefit. Under our leases with DHC, we had the right to request that DHC purchase certain improvements to the leased communities, and, until we entered the Transaction Agreement, in return for the purchases the annual rent payable to DHC would increase in accordance with a formula specified in the applicable lease. We sold to DHC $17,956 of improvements to communities leased from DHC for the year ended December 31, 2018 . As a result, the annual rent payable by us to DHC increased by approximately $1,433 . Pursuant to the Transaction Agreement, the improvements of $110,027 we sold to DHC for the communities we leased from DHC during the year ended December 31, 2019, did not result in increased rent payable by us to DHC. An increase in the annual rent payable by us to DHC of $1,547 for improvements sold to DHC in 2019 but prior to entering into the Transaction Agreement was adjusted pursuant to the terms of the Transaction Agreement. In February 2020, DHC entered into an agreement to sell to a third party one senior living community located in California that DHC owns and we previously leased and currently manage for a sales price of approximately $2,000 , excluding closing costs. This sale is subject to conditions; as a result, this sale may not occur, it may be delayed or its terms may change. The carrying value of this senior living community is classified as held for sale was $25 as of December 31, 2019, and consisted primarily of prepaid and other current assets of $11 and net property, plant and equipment of $14 , and it is presented on our consolidated balance sheets as assets held for sale and is included in the results of operations above. This community, while leased by us, generated losses from operations before income taxes of $(142) and $(856) for the years ended December 31, 2019 and 2018, respectively. In January 2020, DHC entered into an agreement to sell to a third party nine SNFs located in Colorado and Wyoming that DHC owns and we previously leased and currently manage for an aggregate sales price of approximately $74,000 , excluding closing costs. This sale is subject to conditions; as a result, this sale may not occur, it may be delayed or its terms may change. The carrying value of these senior living communities was $(549) as of December 31, 2019, and consisted primarily of prepaid and other current assets of $92 , net property, plant and equipment of $114 and accrued real estate taxes of $250 , and it is presented on our consolidated balance sheets as assets held for sale or liabilities held for sale and is included in the results of operations above. Accrued compensation and benefits of $505 , which is also presented on our consolidated balance sheets, was classified as held for sale subsequent to the balance sheet date. This community, while leased by us, generated income from operations before income taxes of $1,062 and $5,697 for the years ended December 31, 2019 and 2018, respectively. In December 2019, we and DHC entered into an agreement to sell to a third party one senior living community located in Nebraska that DHC owns and we previously leased and currently manage for a sales price of approximately $5,600 , excluding closing costs. This sale is subject to conditions; as a result, this sale may not occur, it may be delayed or its terms may change. The carrying value of this senior living community was $(164) as of December 31, 2019, and consisted primarily of prepaid and other current assets of $16 , net property, plant and equipment of $4 and accrued real estate taxes of $143 , and it is presented on our consolidated balance sheets as assets held for sale and is included in the results of operations above. Accrued compensation and benefits of $41 , which is also presented on our consolidated balance sheets, was classified as held for sale subsequent to the balance sheet date. This community, while leased by us, generated income (loss) from operations before income taxes of $260 and $(36) for the years ended December 31, 2019 and 2018, respectively. During the year ended December 31, 2019, we and DHC sold to third parties 18 SNFs located in California, Kansas, Iowa and Nebraska that DHC owned and leased to us for an aggregate sales price of approximately $29,500 , excluding closing costs. As a result of these sales, the annual minimum rent payable to DHC by us under our master leases with DHC was reduced in accordance with the terms of the Transaction Agreement. We recorded a loss of $749 for the year ended December 31, 2019, as a result of settling certain liabilities associated with the sale of 15 of these 18 SNFs, which amount is included in loss (gain) on sale of senior living communities in our consolidated statements of operations. We did not receive any proceeds from these sales. In April 2019, we and DHC entered into an agreement to sell to a third party two SNFs located in Wisconsin that DHC owns and leased to us for an aggregate sales price of approximately $11,000 , excluding closing costs. This sale agreement was terminated in August 2019. Previously, in accordance with ASC 360, these two SNFs met the conditions to be classified as held for sale. Despite the termination of this sale agreement, these SNFs remain classified as held for sale as of December 31, 2019, as a result of our and DHC’s agreement to terminate our five master leases with DHC pursuant to the Transaction Agreement and are included in the amounts disclosed above regarding our assets held for sale. In June 2018, we and DHC sold to a third party one SNF located in California that DHC owned and leased to us for a sales price of approximately $6,500 , excluding closing costs. Pursuant to the terms of our then lease with DHC, as a result of this sale, our annual rent payable to DHC decreased by 10.0% of the net proceeds that DHC received from this sale, in accordance with the terms of the applicable lease. We did not receive any proceeds from this sale. Also in June 2018, DHC acquired from a third party an additional living unit at a senior living community we leased from DHC located in Florida which was added to the lease for that senior living community, and, as a result of this acquisition, our annual rent payable to DHC increased by $14 in accordance with the terms of such lease. See Note 11 for more information regarding these transactions with DHC. In accordance with FASB ASC Topic 840, Leases , the sale and leaseback transaction we completed in June 2016 with DHC qualified for sale-leaseback accounting and we classified the related lease as an operating lease. Accordingly, the gain generated from the sale of $82,644 was deferred and was being amortized as a reduction of rent expense over the initial term of the related lease. In accordance with our adoption of Topic 842 effective January 1, 2019, we recorded through retained earnings our total deferred gain as of that date. Senior Living Communities Leased from Healthpeak Properties, Inc . As of December 31, 2019 , we leased four senior living communities under one lease with Healthpeak Properties, Inc., (formerly known as HCP, Inc.), or PEAK. This lease is also a “triple net” lease which requires that we pay all costs incurred in the operation of the communities, including the cost of insurance and real estate taxes, maintaining the communities, and indemnifying the landlord for any liability which may arise from the operations during the lease term. Our lease with PEAK contains a minimum annual rent increase of 2.0% , but not greater than 4.0% , depending on increases in certain cost of living indexes, expires on April 30, 2028, and includes one ten -year renewal option. Rent expense is recognized for actual rent paid plus or minus a straight-line adjustment for the minimum rent increases, which amount is not material to our consolidated financial statements. The right of use asset balance has been decreased for the amount of accrued lease payments, which amounts are not material to our consolidated financial statements. The following table is a summary of our leases with DHC and with PEAK as of December 31, 2019 : Number of Properties Remaining Renewal Options Annual Minimum Rent as of December 31, 2019 Future Minimum Rents for the Twelve Months Ending December 31, Lease No. (Expiration Date) 2020 2021 2022 2023 2024 Thereafter Total IBR Lease Liability (4) 1. DHC Lease No. 1 (1) (December 31, 2024) 73 Two 15-year renewal options $ 31,226 $ — $ — $ — $ — $ — $ — $ — — $ — 2. DHC Lease No. 2 (1) (June 30, 2026) 39 Two 10-year renewal options 39,318 — — — — — — — — — 3. DHC Lease No. 3 (2) (December 31, 2028) 17 Two 15-year renewal options 26,679 — — — — — — — — — 4. DHC Lease No. 4 (1) (April 30, 2032) 28 Two 15-year renewal options 25,641 — — — — — — — — — 5. DHC Lease No. 5 (2) (December 31, 2028) 9 Two 15-year renewal options 6,921 — — — — — — — — — 6. One PEAK lease (3) (April 30, 2028) 4 One 10-year renewal option 2,853 2,910 2,959 3,023 3,088 3,150 7,590 22,720 4.60 % 21,097 Totals 170 $ 132,638 $ 2,910 $ 2,959 $ 3,023 $ 3,088 $ 3,150 $ 7,590 $ 22,720 $ 21,097 (1) Lease includes SNFs and independent and assisted living communities. (2) Lease includes independent and assisted living communities. (3) Lease includes assisted living communities. (4) Total lease liability does not include the lease liability related to our headquarters of $1,446 , using an IBR of 4.4% . Senior Living Communities Managed for the Account of DHC and its Related Entities . As of December 31, 2019 and 2018 , we managed 78 and 76 senior living communities, respectively, for the account of DHC. We earned base management fees of $15,045 and $14,146 from the senior living communities we managed for the account of DHC for the years ended December 31, 2019 and 2018 , respectively. In addition, we earned incentive fees of $0 and $36 and fees for our management of capital expenditure projects at the communities we managed for the account of DHC of $842 and $684 for the years ended December 31, 2019 and 2018 , respectively. These amounts are included in management fee revenue in our consolidated statements of operations. In connection with the completion of the Restructuring Transactions, effective as of January 1, 2020, we and DHC terminated these long-term management and pooling agreements and replaced them with the New Management Agreements, the terms of which are discussed above. For the years ended December 31, 2019 and 2018, we had pooling agreements with DHC that combined most of our management agreements with DHC that included assisted living units, or our AL Management Agreements. The pooling agreements combined various calculations of revenues and expenses from the operations of the applicable communities covered by such agreements. Our AL Management Agreements and the pooling agreements generally provided that we received from DHC: • a management fee equal to either 3.0% or 5.0% of the gross revenues realized at the applicable communities, • reimbursement for our direct costs and expenses related to such communities, • an annual incentive fee equal to either 35.0% or 20.0% of the annual net operating income of such communities remaining after DHC realizes an annual minimum return equal to either 8.0% or 7.0% of its invested capital, or, in the case of certain of the communities, a specified amount plus 7.0% of its invested capital since December 31, 2015, and • a fee for our management of capital expenditure projects equal to 3.0% of amounts funded by DHC. For AL Management Agreements that became effective from and after May 2015, our pooling agreements provided that our management fee is 5.0% of the gross revenues realized at the applicable community, and our annual incentive fee is 20.0% of the annual net operating income of the applicable community remaining after DHC realizes its requisite annual minimum return. Our management agreements with DHC for the part of the senior living community owned by DHC and located in Yonkers, New York that is not subject to the requirements of New York healthcare licensing laws, as described elsewhere herein, and for the assisted living communities owned by DHC and located in Villa Valencia, California and Aurora, Colorado were not included in any of our pooling agreements with DHC. We also had a pooling agreement with DHC that combined our management agreements with DHC for senior living communities consisting only of independent living units. Since January 1, 2018 , we began managing the following senior living communities for the account of DHC, pursuant to our then existing management and pooling arrangements with DHC: • in June 2018, a senior living community located in California with 98 living units • in November 2018, a senior living community located in Colorado with 238 living units; and • in April 2019, a senior living community located in Oregon with 318 living units. During the first quarter of 2018, we sold to DHC two senior living communities pursuant to a transaction agreement we entered with DHC in November 2017, or the 2017 transaction agreement, for an aggregate sales price of $41,917 . These two senior living communities had an aggregate carrying value of $19,425 , net of mortgage debt and premiums of $17,356 , of which the principal amount of $16,776 was assumed by DHC. These transactions are accounted for in accordance with ASU No. 2014-09, in particular ASC Topic 610 and related ASUs, effective with the adoption of these new ASUs on January 1, 2018. Under these new ASUs, the income recognition for real estate sales is largely based on the transfer of control rather than continuing involvement in the ownership of the real estate. We recorded a gain of $5,684 for the year ended December 31, 2018, as a result of the sale of these two senior living communities, which gain is included in loss (gain) on sale of senior living communities in our consolidated statements of operations. In June 2018, we sold to DHC the remaining two senior living communities that we agreed to sell pursuant to the 2017 transaction agreement for an aggregate sales price of $23,300 . These two senior living communities had an aggregate carrying value of $5,163 , net of mortgage debt and premiums of $17,226 , of which the principal amount of $16,588 was assumed by DHC. These transactions are accounted for in accordance with ASU No. 2014-09, in particular ASC Topic 610 and related ASUs, effective with our adoption of these new ASUs on January 1, 2018. We recorded a gain of $1,549 for the year ended December 31, 2018, respectively, as a result of the sale of these two senior living communities, which gain is included in loss (gain) on sale of senior living communities in our consolidated statements of operations. Concurrent with our sales of the senior living communities to DHC pursuant to the 2017 transaction agreement, we began managing those senior living communities for DHC’s account pursuant to management and pooling agreements with DHC. We also provide certain other services to residents at some of the senior living communities we manage for the account of DHC, such as rehabilitation services. At senior living communities we manage for the account of DHC where we provide rehabilitation services on an outpatient basis, the residents, third party payers or government programs pay us for those rehabilitation services. At senior living communities we manage for the account of DHC where we provide both inpatient and outpatient rehabilitation services, DHC generally pays us for these services and charges for such services are included in amounts charged to residents, third party payers or government programs. We earned revenues of $5,920 and $6,442 for the years ended December 31, 2019 and 2018 , respectively, for rehabilitation services we provided at senior living communities we manage for the account of DHC and that are payable by DHC. These amounts are included in senior living revenue in our consolidated statements of operations. Following the completion of the Restructuring Transactions, and consistent with our historical accounting for these services at our managed communities, the revenues earned at these inpatient clinics will no longer constitute intercompany revenues and thus will not be eliminated in consolidation and will be recognized and reported as senior living revenue in our consolidated statements of operations. D&R Yonkers LLC. In order to accommodate certain requirements of New York healthcare licensing laws, we manage a part of the senior living community that DHC owns for the subtenant entity, which is affiliated with DHC and the members of which are DHC’s president and chief operating officer and chief financial officer and treasurer. We earn a management fee equal to 3.0% of the gross revenues realized at that part of the community. The management agreement expires on August 31, 2022, and is subject to renewal for eight consecutive five -year terms, unless earlier terminated. We earned management fees of $282 and $279 for the years ended December 31, 2019 and 2018 , respectively, under this management agreement, which are included in management fee revenue in our consolidated statements of operations. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity We have common shares available for issuance under the terms of our equity compensation plan adopted in 2014, or the 2014 Plan. We awarded 85,800 and 47,100 of our common shares in 2019 and 2018 , respectively, to our Directors, officers and others who provide services to us. We valued these shares based upon the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq , on the dates the awards were made, or $376 in 2019 , based on a $4.57 weighted average share price and $227 in 2018 , based on a $4.80 weighted average share price. Shares awarded to Directors vest immediately; one fifth of the shares awarded to our officers and others (other than our Directors) vest on the award date and on the four succeeding anniversaries of the award date. Our unvested common shares totaled 96,482 and 81,690 as of December 31, 2019 and 2018 , respectively. Share based compensation expense is recognized ratably over the vesting period and is included in general and administrative expenses in our consolidated statements of operations. We recorded share based compensation expense of $438 and $615 for the years ended December 31, 2019 and 2018 , respectively. As of December 31, 2019 , the estimated future stock compensation expense for unvested shares was $569 based on the award date closing share price for awards to our officers and others and non-employees. The weighted average period over which stock compensation expense will be recorded is approximately 2 years . As of December 31, 2019 , 176,460 of our common shares remain available for issuance under the 2014 Plan. In 2019 and 2018 , employees and officers of us or RMR LLC who were recipients of our share awards were permitted to elect to have us withhold the number of their then vesting common shares with a fair market value sufficient to fund the minimum required tax withholding obligations with respect to their vesting share awards in satisfaction of those tax withholding obligations. During 2019 and 2018 , we acquired through this share withholding process 5,724 and 3,049 , respectively, common shares with an aggregate value of approximately $26 and $11 , respectively, which is reflected as an increase to accumulated deficit in our consolidated balance sheets. On January 1, 2020, in connection with the Restructuring Transactions, we effected the Share Issuances pursuant to which we issued 10,268,158 of our common shares to DHC and an aggregate of 16,118,849 of our common shares to DHC’s shareholders of record as of December 13, 2019. As consideration for the Share Issuances, DHC provided to us $75,000 of additional consideration by assuming certain of our working capital liabilities. |
Dispositions
Dispositions | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Dispositions | Dispositions During 2018, we sold to DHC four senior living communities pursuant to the 2017 transaction agreement as follows: • in January 2018, we sold one senior living community for a sales price of $19,667 , excluding closing costs; • in February 2018, we sold one senior living community for a sales price of $22,250 , excluding closing costs. At the time of sale, this senior living community had mortgage debt in the principal amount of $ 16,776 , which was assumed by DHC; and • in June 2018, we sold the remaining two senior living communities for an aggregate sales price of $23,300 , excluding closing costs. At the time of sale, these senior living communities had mortgage debt in the principal amount of $16,588 , which was assumed by DHC. The senior living communities sold in 2018 were accounted for in accordance with ASU No. 2014-09, in particular ASC Topic 610 and related ASUs. Under these ASUs, the income recognition for real estate sales is largely based on the transfer of control rather than continuing involvement in the ownership of the real estate. We recorded a gain of $7,231 for the year ended December 31, 2018 as a result of the sale of the four senior living communities sold to DHC in 2018, which gain is included in loss (gain) on sale of senior living communities in our consolidated statements of operations. These senior living communities, while owned by us, generated income from operations before income taxes of $178 for the year ended December 31, 2018, excluding the gain on sale of the communities. These amounts are included in our consolidated statements of operations. In June 2018, we and DHC sold to a third party one SNF, located in California with 97 living units that DHC owned and leased to us, for a sales price of approximately $6,500 , excluding closing costs. We recorded a loss of $102 for the year ended December 31, 2018 as a result of this sale, which loss is included in loss (gain) on sale of senior living communities in our consolidated statements of operations. This community, while leased by us, generated a loss from operations before income taxes of $320 for the year ended December 31, 2018, excluding the loss on sale of the community. Pursuant to the terms of our then existing lease with DHC, as a result of this sale, our annual rent payable to DHC decreased by 10.0% of the net proceeds that DHC received from this sale. We did not receive any proceeds from this sale. In May and September 2019, we and DHC sold to third parties 18 SNFs located in California, Kansas, Iowa and Nebraska that DHC owned and leased to us, for an aggregate sales price of approximately $29,500 , excluding closing costs. We recorded a loss of $749 for the year ended December 31, 2019, as a result of settling certain liabilities associated with the sale of 15 of these 18 SNFs, which amount is included in loss (gain) on sale of senior living communities in our consolidated statements of operations. We did not receive any proceeds from these sales. These senior living communities, while leased to us, incurred losses from operations before income taxes of $(3,443) and $(2,825) for the years ended December 31, 2019 and 2018, respectively, excluding the loss on sale of the communities. See Notes 9 and 14 for more information regarding these and other transactions with DHC. |
Legal Proceedings and Claims
Legal Proceedings and Claims | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings and Claims | Legal Proceedings and Claims We have been, are currently, and expect in the future to be involved in claims, lawsuits, and regulatory and other government audits, investigations and proceedings arising in the ordinary course of our business, some of which may involve material amounts. Also, the defense and resolution of these claims, lawsuits, and regulatory and other government audits, investigations and proceedings may require us to incur significant expense. We account for claims and litigation losses in accordance with FASB ASC Topic 450, Contingencies . Under FASB ASC Topic 450, loss contingency provisions are recorded for probable and estimable losses at our best estimate of a loss or, when a best estimate cannot be made, at our estimate of the minimum loss. These estimates are often developed prior to knowing the amount of the ultimate loss, require the application of considerable judgment and are refined as additional information becomes known. Accordingly, we are often initially unable to develop a best estimate of loss and therefore the estimated minimum loss amount, which could be zero , is recorded; then, as information becomes known, the minimum loss amount is updated, as appropriate. A minimum or best estimate amount may be increased or decreased when events result in a changed expectation. As previously disclosed, in July 2017, as a result of our compliance program to review records related to our Medicare billing practices , we became aware of certain potential inadequate documentation and other issues at one of our leased SNFs. This compliance review was not initiated in response to any specific complaint or allegation, but was a review of the type that we periodically undertake to test our compliance with applicable Medicare billing rules. As a result of these discoveries, we made a voluntary disclosure of deficiencies to the U.S. Department of Health and Human Services Office of the Inspector General, or the OIG, pursuant to the OIG’s Provider Self-Disclosure Protocol. We submitted supplemental disclosures related to this matter to the OIG in December 2017 and March 2018. We settled this matter with the OIG without admitting any liability in June 2019 and paid $1,139 to the OIG in exchange for a customary release. The expense associated with this matter was recorded primarily in 2017, with the exception of an adjustment of $193 that was made during the year ended December 31, 2018, to reduce the balance of the liability. We did not recognize any expenses related to this matter in 2019. |
Business Management Agreement w
Business Management Agreement with RMR LLC | 12 Months Ended |
Dec. 31, 2019 | |
Management Agreement [Abstract] | |
Business Management Agreement with RMR LLC | Business Management Agreement with RMR LLC RMR LLC provides business management services to us pursuant to our business management agreement. These business management services may include, but are not limited to, services related to compliance with various laws and rules applicable to our status as a publicly traded company, maintenance of our senior living communities, evaluation of business opportunities, accounting and financial reporting, capital markets and financing activities, investor relations and general oversight of our daily business activities, including legal matters, human resources, insurance programs and the like. Fees . We pay RMR LLC an annual business management fee equal to 0.6% of our revenues. Revenues are defined as our total revenues from all sources reportable under GAAP, less any revenues reportable by us with respect to communities for which we provide management services plus the gross revenues at those communities determined in accordance with GAAP. Pursuant to our business management agreement with RMR LLC, we recognized business management fees of $9,090 and $9,059 for the years ended December 31, 2019 and 2018 , respectively. Term and Termination. The current term of our business management agreement ends on December 31, 2019 and automatically renews for successive one year terms unless we or RMR LLC gives notice of nonrenewal before the end of an applicable term. RMR LLC may terminate our business management agreement upon 120 days’ written notice, and we may terminate upon 60 days’ written notice, subject to approval by a majority vote of our Independent Directors. If we terminate or elect not to renew our business management agreement other than for cause, as defined, we are obligated to pay RMR LLC a termination fee equal to 2.875 times the sum of the annual base management fee and the annual internal audit services expense, which amounts are based on averages during the 24 consecutive calendar months prior to the date of notice of nonrenewal or termination. Expense Reimbursement . We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR LLC on our behalf. Under our business management agreement, we reimburse RMR LLC for our allocable costs for our internal audit function. Our Audit Committee appoints our Director of Internal Audit and our Compensation Committee approves the costs of our internal audit function. The amounts recognized as expense for internal audit costs were $284 and $236 for the years ended December 31, 2019 and 2018 , respectively. These amounts are included in general and administrative expenses in our consolidated statements of operations for these periods. Transition Services. RMR LLC has agreed to provide certain transition services to us for 120 days following an applicable termination by us or notice of termination by RMR LLC. Vendors . Pursuant to our management agreement with RMR LLC, RMR LLC may from time to time negotiate on our behalf with certain third party vendors and suppliers for the procurement of goods and services to us. As part of this arrangement, we may enter agreements with RMR LLC and other companies to which RMR LLC provides management services for the purpose of obtaining more favorable terms from such vendors and suppliers. |
Related Person Transactions
Related Person Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Related Person Transactions We have relationships and historical and continuing transactions with DHC, RMR LLC, ABP Trust, Adam D. Portnoy and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have directors, trustees or officers who are also our Directors or officers. The Chair of our Board of Directors and one of our Managing Directors, Adam Portnoy, as the sole trustee of ABP Trust, is the controlling shareholder of The RMR Group Inc., or RMR Inc., and is a managing director and the president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. RMR Inc. is the managing member of RMR LLC. Jennifer Clark, our other Managing Director and Secretary, is a managing director and the executive vice president, general counsel and secretary of RMR Inc. and an officer and employee of RMR LLC and certain of our officers are also officers and employees of RMR LLC. Some of our Independent Directors also serve as independent trustees or independent directors of other public companies to which RMR LLC or its subsidiaries provide management services. Adam Portnoy serves as the chair of the boards of directors or boards of trustees of several of these public companies and as a managing director or managing trustee of all these companies. Other officers of RMR LLC serve as managing directors or managing trustees of certain of these companies. In addition, officers of RMR LLC and RMR Inc. serve as our officers and officers of other companies to which RMR LLC or its subsidiaries provide management services. DHC . DHC is currently our largest stockholder, owning, as of January 1, 2020, 10,691,658 , of our common shares, or 33.9% of our outstanding common shares. We manage for the account of DHC a substantial majority of the senior living communities we operate. RMR LLC provides management services to both us and DHC and Adam Portnoy, the Chair of our Board of Directors and one of our Managing Directors, also serves as the chair of the board of trustees and as a managing trustee of DHC. DHC’s executive officers are officers and employees of RMR LLC. Our other Managing Director and Secretary also serves as a managing trustee and the secretary of DHC. Effective as of January 1, 2020, we completed the Restructuring Transactions, pursuant to which we restructured our existing business arrangements with DHC. See Notes 9 and 11 for more information regarding our relationships, agreements and transactions with DHC and certain parties related to it and us. In order to effect DHC’s distribution of our common shares to its shareholders in 2001 and to govern our relationship with DHC thereafter, we entered agreements with DHC and others, including RMR LLC. Since then, we have entered various leases, management agreements and other agreements with DHC that include provisions that confirm and modify these undertakings. Among other things, these agreements provide that: • so long as DHC remains a real estate investment trust, or a REIT, we may not waive the share ownership restrictions in our charter that prohibit any person or group from acquiring more than 9.8% (in value or number of shares, whichever is more restrictive) of the outstanding shares of any class of our stock without DHC’s consent ; • so long as we are a tenant of, or manager for, DHC, we will not permit nor take any action that, in the reasonable judgment of DHC, might jeopardize DHC’s qualification for taxation as a REIT; • DHC has the right to terminate our management agreements upon the acquisition by a person or group of more than 9.8% of our voting stock or other change in control events affecting us, as defined therein, including the adoption of any stockholder proposal (other than a precatory proposal) or the election to our Board of Directors of any individual, if such proposal or individual was not approved, nominated or appointed, as the case may be, by a majority of our Directors in office immediately prior to the making of such proposal or the nomination or appointment of such individual; and • so long as we are a tenant of, or manager for, DHC or so long as we have a business management agreement with RMR LLC, we will not acquire or finance any real estate of a type then owned or financed by DHC or any other company managed by RMR LLC without first giving DHC or such company managed by RMR LLC, as applicable, the opportunity to acquire or finance that real estate. Senior Living Communities Leased from or Managed for DHC . As of December 31, 2019 and 2018 , we leased 166 and 184 senior living communities from DHC, respectively, pursuant to five leases, and we managed 78 and 76 senior living communities for the account of DHC, respectively, pursuant to long-term management and pooling agreements. Effective as of January 1, 2020, we restructured our business arrangements with DHC and, after giving effect to the Restructuring Transactions we manage 244 senior living communities for the account of DHC pursuant to the New Management Agreements. We manage a part of a senior living community that DHC owns for the subtenant, which is an affiliate of DHC. See Note 9 for more information regarding these leases and management arrangements and the Restructuring Transactions. Our Manager, RMR LLC. We have an agreement with RMR LLC to provide business management services to us. See Note 13 for more information regarding our relationship with RMR LLC. Share Awards to RMR LLC Employees . We have historically made share awards to certain RMR LLC employees who are not also Directors, officers or employees of us under our equity compensation plans. During the years ended December 31, 2019 and 2018 , we awarded to such persons annual share awards of 17,150 and 7,090 common shares, respectively, valued at $77 and $25 , in aggregate, respectively, based upon the closing price of our common shares on Nasdaq on the dates the awards were made. Generally, one fifth of these awards vest on the award date and one fifth vests on each of the next four anniversaries of the award date. In certain instances, we may accelerate the vesting of an award, such as in connection with the award holder’s retirement as an officer of us or an officer or employee of RMR LLC. These awards to RMR LLC employees are in addition to the share awards to our Managing Directors, as Director compensation, and the fees we paid to RMR LLC. During the years ended December 31, 2019 and 2018 , we purchased 5,724 and 3,049 common shares, at the closing price of the common shares on Nasdaq on the date of purchase, from certain of our officers and other employees of ours and RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. See Note 10 for further information regarding these purchases. Retirement and Separation Arrangements. In connection with their respective retirement, we entered into retirement agreements with our former officers, Bruce J. Mackey Jr. and Richard A. Doyle. Additionally, we entered into a separation agreement with our former Senior Vice President, Senior Living Operations, R. Scott Herzig. Pursuant to these agreements, we made cash payments of $600 and $510 to Mr. Mackey and Mr. Herzig, respectively, in January 2019 and made cash payments of $260 to Mr. Doyle in each of June 2019 and January 2020. In addition, we made release payments to Mr. Mackey, in cash, in an aggregate amount of $330 during the year ended December 31, 2019 and $110 in January 2020, and made transition payments to Mr. Mackey and Mr. Doyle, in cash, in an aggregate amount of $96 and $56 , respectively, during the year ended December 31, 2019. Our arrangements with Messrs. Mackey, Herzig and Doyle meet the criteria in FASB ASC Topic 420, Exit or Disposal Cost Obligations, or ASC Topic 420, and, as a result, we recorded the full severance cost for Mr. Mackey of $1,160 and for Mr. Herzig of $510 during the fourth quarter of 2018 and we recorded the full severance cost for Mr. Doyle of $581 during the second quarter of 2019. Adam Portnoy and ABP Trust . Adam Portnoy, one of our Managing Directors, directly and indirectly through ABP Trust and its subsidiaries, beneficially owned, in aggregate, approximately 6.3% of our outstanding common shares as of January 1, 2020. Adam Portnoy is the sole trustee and an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc. Our Secretary is also an officer of ABP Trust. We are party to a Consent, Standstill, Registration Rights and Lock-Up Agreement, dated October 2, 2016, with Adam Portnoy, ABP Trust and certain other related persons, or the ABP Parties, under which, among other things, the ABP Parties have each agreed not to transfer, except for certain permitted transfers as provided for therein, any of our shares of common stock acquired after October 2, 2016, but not including shares issued under our equity compensation plans, for a lock-up period that ends on the earlier of (i) the 10 year anniversary of such agreement, (ii) January 1st of the fourth calendar year after our first taxable year to which no then existing net operating loss or certain other tax benefits may be carried forward by us, but no earlier than January 1, 2022, (iii) the date that we enter into a definitive binding agreement for a transaction that, if consummated, would result in a change of control of us, (iv) the date that our Board of Directors otherwise approves and recommends that our stockholders accept a transaction that, if consummated, would result in a change of control of us and (v) the consummation of a change of control of us. Under the Consent, Standstill, Registration Rights and Lock-Up Agreement, the ABP Parties also each agreed, for a period of 10 years, not to engage in certain activities involving us without the approval of our Board of Directors, including not to effect or seek to effect any tender or exchange offer, merger, business combination, recapitalization, restructuring, liquidation or other extraordinary transaction involving us, other than the acquisition by the ABP Parties, in aggregate, of up to 1,800,000 (after giving effect to the Reverse Stock Split) of our common shares prior to March 31, 2017, or solicit any proxies to vote any of our voting securities. These provisions do not restrict activities taken by an individual in her or his capacity as a Director, officer or employee of us. We lease our headquarters from a subsidiary of ABP Trust. Our rent expense for our headquarters, including utilities and real estate taxes that we pay as additional rent, was $1,874 and $1,715 for the years ended December 31, 2019 and 2018 , respectively. The adoption of ASC Topic 842 resulted in the recognition of a lease liability and right of use asset, which amount was $1,446 for each of the lease liability and the right of use asset as of December 31, 2019, with respect to our headquarters lease, using an IBR of 4.40% . The right of use asset balance has been reduced by the amount of accrued lease payments, which amounts are not material to our consolidated financial statements. AIC . Until its dissolution on February 13, 2020, we, ABP Trust, DHC and four other companies to which RMR LLC provides management services owned AIC in equal amounts. Certain of our Directors and certain trustees or directors of the other AIC shareholders served on the board of directors of AIC. We and the other AIC shareholders historically participated in a combined property insurance program arranged and insured or reinsured in part by AIC. The policies under that program expired on June 30, 2019, and we and the other AIC shareholders elected not to renew the AIC property insurance program; we have instead purchased standalone property insurance coverage from unrelated third party insurance providers. We paid aggregate annual premiums, including taxes and fees, of $3,144 and $4,329 in connection with this insurance program for the policy year ending June 30, 2019 and 2018, respectively. As of December 31, 2019 and 2018 , our investment in AIC had a carrying value of $298 and $8,633 , respectively. These amounts are presented as equity investment of an investee in our consolidated balance sheets. We recognized income of $575 and $516 related to our investment in AIC for the years ended December 31, 2019 and 2018 , respectively. These amounts are presented as equity in earnings of an investee in our consolidated statements of operations. Our other comprehensive income includes our proportionate share of unrealized gains (losses) on securities which are owned and held for sale by AIC of $90 and $(68) related to our investment in AIC for the years ended December 31, 2019 and 2018 , respectively. On February 13, 2020, AIC was dissolved and in connection with its dissolution, we and each other AIC shareholder received an initial liquidating distribution of $9,000 from AIC in December 2019. Directors’ and Officers’ Liability Insurance. We, RMR Inc., RMR LLC and certain other companies to which RMR LLC or its subsidiaries provide management services, including DHC, participate in a combined directors’ and officers’ liability insurance policy. The current combined policy expires in September 2020. We paid aggregate premiums of $185 and $152 in 2019 and 2018 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Employee 401(k) Plan. We have an employee savings plan, or our 401(k) Plan, under the provisions of Section 401(k) of the IRC. All of our employees are eligible to participate in our 401(k) Plan and are entitled upon termination or retirement to receive their vested portion of our 401(k) Plan assets. We match a certain amount of employee contributions. We also pay certain expenses related to our 401(k) Plan. Our contributions and related expenses for our 401(k) Plan were $1,155 and $1,332 for the years ended December 31, 2019 and 2018 , respectively, of which $ 1,016 and $ 1,155 , respectively, was recorded to senior living wages and benefits in our consolidated statements of operations and $ 139 and $ 177 , respectively, was recorded to general and administrative expenses in our consolidated statements of operations. Non-Qualified Deferred Compensation Plan. In May 2018, our Board of Directors adopted a non-qualified deferred compensation plan, or our Deferred Compensation Plan, which we began offering to certain of our employees, including our executive officers, in August 2018. Participation in our Deferred Compensation Plan is limited to a group of highly compensated employees holding the position of administrator or director or a position above such levels, which group includes our named executive officers. Our Deferred Compensation Plan is an unfunded and unsecured deferred compensation arrangement. A participant may, on a pre-tax basis, elect to defer base salary and bonus up to the maximum percentages for such deferrals as described in our Deferred Compensation Plan. We may also, at our discretion, match deferrals made under our Deferred Compensation Plan, subject to a vesting schedule. Compensation deferred under our Deferred Compensation Plan was recorded in accounts payable and accrued expenses in our consolidated balance sheets as of December 31, 2019 and 2018 . Expenses related to such deferred compensation were recorded in senior living wages and benefits and general and administrative expenses in our consolidated statements of operations. Compensation deferred under our Deferred Compensation Plan was not material to our consolidated balance sheets as of December 31, 2019 and 2018 , or our consolidated statements of operations for the year ended December 31, 2019 and 2018 . |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events We evaluated subsequent events and transactions occurring after December 31, 2019 through March 2, 2020 , the date these consolidated financial statements were available to be issued. Effective as of January 1, 2020, we completed the Restructuring Transactions pursuant to the Transaction Agreement. The following pro forma presentation of our shareholders’ equity as of December 31, 2019, gives effect to the issuance of 26,387,007 common shares in the Share Issuances, as if, these issuances were effective at the close of business on December 31, 2019. December 31, 2019 (As Reported) Restructuring Transaction Adjustment December 31, 2019 (Pro Forma) Common stock, par value $.01: 75,000,000 shares authorized, $ 52 $ 264 $ 316 Additional paid in capital 362,450 97,634 460,084 See Notes 1, 9 and 11 for more information regarding the Restructuring Transactions. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation . The accompanying consolidated financial statements include the accounts of Five Star Senior Living Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates. Preparation of these financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that may affect the amounts reported in these financial statements and related notes. Some significant estimates are included in our revenue recognition, including contractual allowances, the allowance for doubtful accounts, self-insurance reserves, long-lived assets, and estimates concerning our provisions for income taxes. Our actual results could differ from our estimates. We periodically review estimates and assumptions and we reflect the effects of changes, if any, in the consolidated financial statements in the period that they are determined. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. Our financial instruments are limited to cash and cash equivalents, accounts receivable, debt and equity investments, accounts payable and mortgage notes payable. Except for our mortgage debt, the fair value of these financial instruments was not materially different from their carrying values at December 31, 2019 and 2018. We estimate the fair values of our mortgage debt using market quotes when available, discounted cash flow analyses and current prevailing interest rates. |
Segment Information | Segment Information. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in determining the allocation of resources and in assessing performance. Our chief operating decision maker is our President and Chief Executive Officer. As of December 31, 2019 , we have two operating segments: senior living and rehabilitation and wellness. In the senior living segment, we operate for our own account or manage for the account of others independent living communities, assisted living communities and SNFs that are subject to centralized oversight and provide housing and services to older adults. In the rehabilitation and wellness operating segment, we provide therapy services, including physical, occupational, speech and other specialized therapy services, in the inpatient setting and in outpatient clinics. We have determined that our two operating segments meet the aggregation criteria as prescribed under the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 280, Segment Reporting , and we have therefore determined that our business is comprised of one reportable segment, senior living. All of our operations and assets are located in the United States, except for the operations of our Cayman Islands organized captive insurance company subsidiary which participates in our workers’ compensation, professional and general liability and certain automobile insurance programs. |
Earnings Per Share | Earnings Per Share. We calculate basic earnings per common share, or EPS, by dividing net income (loss) by the weighted average number of common shares outstanding during the year. We calculate diluted EPS using the more dilutive of the two-class method or the treasury stock method. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash. Cash and cash equivalents, consisting of short-term, highly liquid investments and money market funds with original maturities of three months or less at the date of purchase, are carried at cost plus accrued interest, which approximates market. |
Concentrations of Credit Risk | Concentrations of Credit Risk. Our financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments and trade receivables. We have cash investment policies that, among other things, limit investments to investment-grade securities. We hold our cash and cash equivalents and investments with high-quality financial institutions and we monitor the credit ratings of those institutions. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts. We record accounts receivable at their estimated net realizable value. Included in accounts receivable as of December 31, 2019 and 2018 , are amounts due from the Medicare program of $9,056 and $8,821 , respectively, and amounts due from various state Medicaid programs of $8,532 and $12,757 , respectively. We estimate allowances for uncollectible amounts and contractual allowances based upon factors which include, but are not limited to, historical payment trends, write-off experience, analyses of accounts receivable portfolios by payor source and the age of the receivable as well as a review of specific accounts, the terms of the agreements, the residents’ or third party payers’ stated intent to pay, the payers’ financial capacity to pay and other factors which may include likelihood and cost of litigation. Billings for services under third party payer programs are recorded net of estimated retroactive adjustments, if any. Retroactive adjustments are accrued on an estimated basis in the period the related services are rendered and adjusted in future periods or as final settlements are determined. Contractual or cost related adjustments from Medicare or Medicaid are accrued when assessed (without regard to when the assessment is paid or withheld). Subsequent adjustments to these accrued amounts are recorded in net revenues when known. |
Equity and Debt Investment | Equity and Debt Investments. On January 1, 2018, we adopted FASB Accounting Standards Update, or ASU, No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which changes how entities measure certain equity investments and present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. Prior to our adoption of this ASU, we recorded changes in the fair value of our equity investments through other comprehensive income. Pursuant to this ASU, these changes will now be recorded through earnings. We adopted this ASU using the cumulative effect adjustment method and recorded an adjustment of $1,947 on January 1, 2018, to accumulated other comprehensive income and accumulated deficit in our consolidated balance sheets. Equity investments are carried at fair value with changes in fair value recorded in earnings. At December 31, 2019 , these equity investments had a fair value of $6,409 and a net unrealized holding gain of $1,201 . At December 31, 2018 , these equity investments had a fair value of $5,466 and a net unrealized holding gain of $419 . Debt investments are carried at fair value, with unrealized gains and losses reported as a separate component of shareholders’ equity and “other than temporary impairment” losses recorded through earnings. Realized gains and losses on debt investments are recognized based on specific identification. Restricted debt investments are kept as security for obligations arising from our self-insurance programs. At December 31, 2019 , these debt investments had a fair value of $21,766 and a net unrealized holding gain of $2,104 . At December 31, 2018 , these debt investments had a fair value of $22,785 and a net unrealized holding gain of $979 . In 2019 and 2018 , our debt and equity investments generated interest and dividend income of $1,364 and $818 , respectively, which is included in interest, dividend and other income in our consolidated statements of operations. The following table summarizes the fair value and gross unrealized losses related to our debt investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position for the years ended: Debt Investments Less than 12 months Greater than 12 months Total Fair Value Unrealized Loss Fair Value Unrealized Fair Value Unrealized December 31, 2019 $ 292 $ 10 $ — $ — $ 292 $ 10 December 31, 2018 $ 1,688 $ 31 $ 12,234 $ 265 $ 13,922 $ 296 We routinely evaluate our debt investments to determine if they have been impaired. If the fair value of a debt investment is less than its book or carrying value and we expect that situation to continue for a more than temporary period, we will record an “other than temporary impairment” loss in our consolidated statements of operations. We evaluate the fair value of our debt investments by reviewing each investment’s current market price, the ratings of the investment, the financial condition of the issuer and our intent and ability to retain the investment during temporary market price fluctuations or until maturity. In evaluating the factors described above, we presume a decline in value to be an “other than temporary impairment” if the quoted market price of the investment is below the investment’s cost basis for an extended period. However, this presumption may be overcome if there is persuasive evidence indicating the value decline is temporary in nature, such as when the operating performance of the obligor is strong or if the market price of the investment is historically volatile. Additionally, there may be instances in which impairment losses are recognized even if the decline in value does not meet the criteria described above, such as if we plan to sell the investment in the near term and the fair value is below our cost basis. When we believe that a change in fair value of a debt investment is temporary, we record a corresponding credit or charge to other comprehensive income for any unrealized gains and losses. When we determine that impairment in the fair value of a debt investment is an “other than temporary impairment”, we record a charge to earnings. We did not record such an impairment charge for the years ended December 31, 2019 and 2018 . |
Deferred Financing Costs | Deferred Financing Costs. |
Assets and Liabilities Held for Sale | Assets and Liabilities Held for Sale. |
Property and Equipment | Property and Equipment. Property and equipment are recorded at cost and depreciated using the straight-line basis over their estimated useful lives, which are typically as follows: Asset Class Estimated Useful Life (in years) Buildings 40 Building improvements 3 - 15 Equipment 7 Computer equipment and software 5 Furniture and fixtures 7 We regularly evaluate whether events or changes in circumstances have occurred that could indicate impairment in the value of our long-lived assets. If there is an indication that the carrying value of an asset is not recoverable, we determine the amount of impairment loss, if any, by comparing the historical carrying value of the asset to its estimated fair value, with any amount in excess of fair value recognized as an expense in the current period. We determine estimated fair value through an evaluation of recent financial performance, recent transactions for similar assets, market conditions and projected cash flows using standard industry valuation techniques. Undiscounted cash flow projections and estimates of fair value amounts are based on a number of assumptions such as revenue and expense growth rates, estimated holding periods and estimated capitalization rates (Level 3). |
Equity Method Investments | Equity Method Investments. As of December 31, 2019 , and until its dissolution on February 13, 2020, we and six other shareholders each owned approximately 14.3% of the outstanding equity of Affiliates Insurance Company, or AIC. Although we owned less than 20% |
Legal Proceedings and Claims | Legal Proceedings and Claims. We have been, are currently, and expect in the future to be involved in claims, lawsuits, and regulatory and other government audits, investigations and proceedings arising in the ordinary course of our business, some of which may involve material amounts. Also, the defense and resolution of these claims, lawsuits, and regulatory and other government audits, investigations and proceedings may require us to incur significant expense. We account for claims and litigation losses in accordance with FASB, Accounting Standards Codification ™ , or ASC, Topic 450, Contingencies . Under FASB ASC Topic 450, loss contingency provisions are recorded for probable and estimable losses at our best estimate of a loss or, when a best estimate cannot be made, at our estimate of the minimum loss. These estimates are often developed prior to knowing the amount of the ultimate loss, require the application of considerable judgment, and are refined as additional information becomes known. Accordingly, we are often initially unable to develop a best estimate of loss and therefore the estimated minimum loss amount, which could be zero , is recorded; then, as information becomes known, the minimum loss amount is updated, as appropriate. Occasionally, a minimum or best estimate amount may be increased or decreased when events result in a changed expectation. |
Self Insurance | Self-Insurance. |
Leases, lessor | Lease Accounting. On January 1, 2019, we adopted FASB ASC Topic 842, Leases , or ASC Topic 842, utilizing the modified retrospective transition method with no adjustments to comparative periods presented. Additionally, we elected the practical expedients within FASB ASU No. 2016-02, Leases (Topic 842) , or ASU No. 2016-02 that allow an entity to not reassess as of January 1, 2019, its prior conclusions on whether an existing contract contains a lease, lease classification for existing leases, and whether costs incurred for existing leases qualify as initial direct costs. In accordance with ASC Topic 842, at the inception of a contract, we, as lessee, evaluate and determine whether such a contract is or contains a lease based on whether such contract conveys the right to control the use of the identified asset. We apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. We have elected to apply the portfolio approach where possible in assessing our leases and performed an assessment of all our leases. In addition, we have elected the practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component if certain conditions are met. As lessee, we lease senior living communities and our headquarters, and enter into contracts for the use and maintenance of various pieces of equipment that contain a lease. We have determined that none of these leases have met any of the criteria to be classified as a finance lease and, therefore, we have accounted for all of these leases as operating leases. We have determined that our leases for the use and maintenance of equipment are short-term leases. In accordance with ASC Topic 842, we have made an accounting policy election for our leases, which are determined to be short-term leases, whereby we recognize the lease payments on a straight-line basis over the lease term and variable lease payments in the period in which the obligations for those payments are incurred. Expenses related to these leases are recognized in the statement of operations in other senior living operating expenses and are not material to our consolidated financial statements. We have determined that our leases for senior living communities and our headquarters are long-term leases. In accordance with ASC Topic 842, a lessee is required to record a right of use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Accordingly, we have recorded a right of use asset and lease liability for all of our leased communities and our headquarters. We determined that the discount rate implicit in the leases was not readily available, and therefore, in accordance with ASC Topic 842, we determined our incremental borrowing rate, or IBR, to calculate the right of use assets and lease liabilities. For purposes of determining the lease term, we concluded that it is not reasonably certain that our lease extensions will be exercised and, therefore, we included payments required to be made under the committed lease term in calculating the right of use assets and lease liabilities. Expenses related to these leases are recognized in the statement of operations in rent expense, except for the expense related to our headquarters, which is recorded in general and administrative expenses. We recognized variable lease payments primarily relating to percentage rent paid under our leases with DHC and operating costs such as insurance and real estate taxes, in the statement of operations in the period in which the obligations for those payments are incurred. We have not capitalized any initial direct costs related to our leases as these costs are not material to our consolidated financial statements. ASC Topic 842 provides lessors with a practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component if certain conditions are met. In addition, ASC Topic 842 clarifies which ASC Topic (Topic 842 or FASB ASC Topic 606, Revenue from Contracts with Customers , or ASC Topic 606) applies for the combined component. Specifically, if the non-lease components associated with the lease component are the predominant component of the combined components, the lessor should account for the combined component in accordance with ASC Topic 606. Otherwise, the lessor should account for the combined component as an operating lease in accordance with ASC Topic 842. We have elected this practical expedient and recognized revenue under our resident agreements at our independent living and assisted living communities based upon the predominant component rather than allocating the consideration and separately accounting for it under ASC Topic 842 and ASC Topic 606. We have concluded that the non-lease components of the agreements with respect to our independent and assisted living communities are the predominant component of the leases and, therefore, we recognize revenue for these agreements under ASC Topic 606. |
Leases, lessee | Lease Accounting. On January 1, 2019, we adopted FASB ASC Topic 842, Leases , or ASC Topic 842, utilizing the modified retrospective transition method with no adjustments to comparative periods presented. Additionally, we elected the practical expedients within FASB ASU No. 2016-02, Leases (Topic 842) , or ASU No. 2016-02 that allow an entity to not reassess as of January 1, 2019, its prior conclusions on whether an existing contract contains a lease, lease classification for existing leases, and whether costs incurred for existing leases qualify as initial direct costs. In accordance with ASC Topic 842, at the inception of a contract, we, as lessee, evaluate and determine whether such a contract is or contains a lease based on whether such contract conveys the right to control the use of the identified asset. We apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. We have elected to apply the portfolio approach where possible in assessing our leases and performed an assessment of all our leases. In addition, we have elected the practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component if certain conditions are met. As lessee, we lease senior living communities and our headquarters, and enter into contracts for the use and maintenance of various pieces of equipment that contain a lease. We have determined that none of these leases have met any of the criteria to be classified as a finance lease and, therefore, we have accounted for all of these leases as operating leases. We have determined that our leases for the use and maintenance of equipment are short-term leases. In accordance with ASC Topic 842, we have made an accounting policy election for our leases, which are determined to be short-term leases, whereby we recognize the lease payments on a straight-line basis over the lease term and variable lease payments in the period in which the obligations for those payments are incurred. Expenses related to these leases are recognized in the statement of operations in other senior living operating expenses and are not material to our consolidated financial statements. We have determined that our leases for senior living communities and our headquarters are long-term leases. In accordance with ASC Topic 842, a lessee is required to record a right of use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Accordingly, we have recorded a right of use asset and lease liability for all of our leased communities and our headquarters. We determined that the discount rate implicit in the leases was not readily available, and therefore, in accordance with ASC Topic 842, we determined our incremental borrowing rate, or IBR, to calculate the right of use assets and lease liabilities. For purposes of determining the lease term, we concluded that it is not reasonably certain that our lease extensions will be exercised and, therefore, we included payments required to be made under the committed lease term in calculating the right of use assets and lease liabilities. Expenses related to these leases are recognized in the statement of operations in rent expense, except for the expense related to our headquarters, which is recorded in general and administrative expenses. We recognized variable lease payments primarily relating to percentage rent paid under our leases with DHC and operating costs such as insurance and real estate taxes, in the statement of operations in the period in which the obligations for those payments are incurred. We have not capitalized any initial direct costs related to our leases as these costs are not material to our consolidated financial statements. ASC Topic 842 provides lessors with a practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component if certain conditions are met. In addition, ASC Topic 842 clarifies which ASC Topic (Topic 842 or FASB ASC Topic 606, Revenue from Contracts with Customers , or ASC Topic 606) applies for the combined component. Specifically, if the non-lease components associated with the lease component are the predominant component of the combined components, the lessor should account for the combined component in accordance with ASC Topic 606. Otherwise, the lessor should account for the combined component as an operating lease in accordance with ASC Topic 842. We have elected this practical expedient and recognized revenue under our resident agreements at our independent living and assisted living communities based upon the predominant component rather than allocating the consideration and separately accounting for it under ASC Topic 842 and ASC Topic 606. We have concluded that the non-lease components of the agreements with respect to our independent and assisted living communities are the predominant component of the leases and, therefore, we recognize revenue for these agreements under ASC Topic 606. |
Stock-Based Compensation | Stock-Based Compensation. |
Income Taxes | Income Taxes. Our income tax expense includes U.S. income taxes. Certain items of income and expense are not reported in tax returns and financial statements in the same year. We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences to be included in our financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse, while the effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We can recognize a tax benefit only if it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that has a greater than 50% likelihood of being realized. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent, we believe that we are more likely than not that all or a portion of deferred tax assets will not be realized, we establish a valuation allowance to reduce the deferred tax assets to the appropriate valuation. To the extent we establish a valuation allowance or increase or decrease this allowance in a given period, we include the related tax expense or tax benefit within the tax provision in the consolidated statement of operations in that period. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. In the future, if we determine that we would be able to realize our deferred tax assets in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance and record an income tax benefit within the tax provision in the consolidated statement of operations in that period. We pay franchise taxes in certain states in which we have operations. We have included franchise taxes in general and administrative and other senior living operating expenses in our consolidated statements of operations. |
Revenue Recognition | Revenue Recognition. We recognize revenue from contracts with customers in accordance with ASC Topic 606 using the practical expedient in paragraph 606-10-10-4 that allows for the use of a portfolio approach, because we have determined that the effect of applying the guidance to our portfolios of contracts within the scope of ASC Topic 606 on our consolidated financial statements would not differ materially from applying the guidance to each individual contract within the respective portfolio or our performance obligations within such portfolio. The five-step model defined by ASC Topic 606 requires us to: (i) identify our contracts with customers, (ii) identify our performance obligations under those contracts, (iii) determine the transaction prices of those contracts, (iv) allocate the transaction prices to our performance obligations in those contracts and (v) recognize revenue when each performance obligation under those contracts is satisfied. Revenue is recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. A substantial portion of our revenue at our independent living and assisted living communities relates to contracts with residents for housing services that are generally short-term in nature and initially is subject to ASC Topic 842. As previously discussed, we have concluded that the non-lease components of these contracts are the predominant components of the contracts; therefore, we recognize revenue for these contracts under ASC Topic 606. Our contracts with residents and other customers that are within the scope of ASC Topic 606 are generally short-term in nature. We have determined that services performed under those contracts are considered one performance obligation in accordance with ASC Topic 606 as such services are regarded as a series of distinct events with the same timing and pattern of transfer to the resident or customer. Revenue is recognized for those contracts when our performance obligation is satisfied by transferring control of the service provided to the resident or customer, which is generally when the services are provided over time. Senior Living Revenue. Resident fees at our independent living and assisted living communities consist of regular monthly charges for basic housing and support services and fees for additional requested services, such as assisted living services, personalized health services and ancillary services. Fees are specified in our agreements with residents, which are generally short-term ( 30 days to one year ), with regular monthly charges billed in advance. Funds received from residents in advance of services being provided are not material to our consolidated financial statements. Some of our senior living communities require payment of an upfront entrance fee in advance of a resident moving into the community; substantially all of these community fees are non-refundable and are initially recorded as deferred revenue and included in other current liabilities in our consolidated balance sheets. These deferred amounts are then amortized on a straight line basis into revenue over the term of the resident's agreement. When the resident no longer resides within our community, the remaining deferred non-refundable fees are recognized in revenue. Revenue recorded and deferred in connection with community fees is not material to our consolidated financial statements. Revenue for basic housing and support services and additional requested services is recognized in accordance with ASC Topic 606 and measured based on the consideration specified in the resident agreement and is recorded when the services are provided. In our SNFs and certain of our independent and assisted living communities where we provide SNF services, we are paid fixed daily rates from governmental and contracted third party payers, and we charge a predetermined fixed daily rate for private pay residents. These fixed daily rates and certain other fees are billed monthly in arrears. Although there are complex regulatory compliance rules governing fixed daily rates, we have no episodic payments or capitation arrangements. We currently use the “most likely amount” technique to estimate revenue in accordance with ASC Topic 606, although rates are generally known and considered fixed prior to services being performed, whether included in the resident agreement or contracted with governmental or third party payers. Rate adjustments from Medicare or Medicaid are recorded when known (without regard to when the assessment is paid or withheld), and subsequent adjustments to these amounts are recorded in revenues when known. Billings under certain of these programs are subject to audit and possible retroactive adjustment, and related revenue is recorded at the amount we ultimately expect to receive, which is inclusive of the estimated retroactive adjustments or refunds, if any, under reimbursement programs. Retroactive adjustments are recorded on an estimated basis in the period the related services are rendered and adjusted in future periods or as final settlements are determined. Revenue is recognized when performance obligations are satisfied by transferring control of the service provided to the resident, which is generally when services are provided over the duration of care. Continuing Care Contracts. Residents at one of our senior living communities may enter continuing care contracts with us, which require the resident to pay an upfront entrance fee prior to moving into the community, which is partially refundable in certain circumstances up to 90% of the total entrance fee. Three other forms of continuing care contracts were in effect for existing residents but are not offered to new residents. The non-refundable portion of a resident’s entrance fee is recorded as deferred revenue and amortized over the estimated stay of the resident based on an actuarial valuation. When the resident no longer resides within our community, the remaining deferred non-refundable fees are recognized in revenue. The refundable portion of a resident’s entrance fee is generally refundable within a certain number of months or days following contract termination or upon the resale of the unit, or in some agreements, upon the resale of a comparable unit, or 12 months after the resident vacates the unit. The refundable portion of the entrance fee is not amortized and is included in security deposits and the current portion of continuing care contracts on the consolidated balance sheet. All refundable amounts due to residents at any time in the future are classified as current liabilities. We pay refunds of these admission fees to the extent refundable under the contract when residents relocate from our communities. We report the refundable amount of these admission fees as current liabilities and the non‑refundable amount as deferred revenue, a portion of which is classified as a current liability. The balance of our refundable admission fees as of December 31, 2019 and 2018 were $552 and $755 , respectively, and were included in liabilities held for sale and security deposits and current portion of continuing care contracts, respectively, on our consolidated balance sheets. The balance of non-refundable admission fees as of December 31, 2019 and 2018 were $0 and $1,119 , respectively, of which $0 and $863 , respectively, were included in other long-term liabilities on our consolidated balance sheets. SNFs. In our SNFs and certain of our independent and assisted living communities where we provide SNF services, we are paid fixed daily rates from governmental and contracted third party payers, and we charge a predetermined fixed daily rate for private pay residents. These fixed daily rates and certain other fees are billed monthly in arrears. Although there are complex regulatory compliance rules governing fixed daily rates, we have no episodic payments or capitation arrangements. We currently use the “most likely amount” technique to estimate revenue in accordance with ASC Topic 606, although rates are generally known and considered fixed prior to services being performed, whether included in the resident agreement or contracted with governmental or third party payers. Rate adjustments from Medicare or Medicaid are recorded when known (without regard to when the assessment is paid or withheld), and subsequent adjustments to these amounts are recorded in revenues when known. Billings under certain of these programs are subject to audit and possible retroactive adjustments, and related revenue is recorded at the amount we ultimately expect to receive, which is inclusive of the estimated retroactive adjustments or refunds, if any, under reimbursement programs. Retroactive adjustments are recorded on an estimated basis in the period the related services are rendered and adjusted in future periods or as final settlements are determined. Revenue is recognized when performance obligations are satisfied by transferring control of the service provided to the resident, which is generally when services are provided over the duration of care. We derived approximately 21.5% and 23.3% of our senior living revenues for the years ended December 31, 2019 and 2018 , respectively, from payments under Medicare and Medicaid programs. Management Fee Revenue and Reimbursed Costs Incurred on Behalf of Managed Communities. We manage senior living communities for the account of DHC pursuant to long-term management agreements which provide for periodic management fee payments to us and reimbursement for our direct costs and expenses related to such communities. Although there are various management and operational activities performed by us under the agreements, we have determined that all community operations management activities constitute a single performance obligation, which is satisfied over time as the services are rendered. Management fees are determined by an agreed upon percentage of gross revenues (as defined) and recognized in accordance with ASC Topic 606 in the same period that we provide the management services to DHC, generally monthly. We estimate the amount of incentive fee revenue expected to be earned, on an annual basis and revenue is recognized as services are provided. Our 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. FASB ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , clarifies how an entity should identify the unit of accounting for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions. Where we are the primary obligor and therefore control the transfer of the goods and services with respect to any such operating expenses incurred in connection with the management of these communities, we recognize revenue when the goods have been delivered or the service has been rendered and we are due to be reimbursed from DHC. Such revenue is included in reimbursed costs incurred on behalf of managed communities in our consolidated statements of operations. The related costs are included in costs incurred on behalf of managed communities in our consolidated statements of operations. Amounts due from DHC related to management fees and reimbursed costs incurred on behalf of managed communities are included in due from related persons in our consolidated balance sheets. |
One-time Employee Termination Benefits | One-time Employee Termination Benefits. FASB ASC Topic 420, Exit or Disposal Cost Obligations , or ASC Topic 420, specifies the criteria for recognizing a one-time employee termination arrangement. In connection with their respective retirement, we and The RMR Group LLC, or RMR LLC, entered into retirement agreements with our former officers, Bruce J. Mackey Jr. and Richard A. Doyle. Additionally, we entered into a separation agreement with our former Senior Vice President, Senior Living Operations, R. Scott Herzig. Pursuant to these agreements, we made cash payments of $600 and $510 to Mr. Mackey and Mr. Herzig, respectively, in January 2019, and made cash payments of $260 to Mr. Doyle in each of June 2019 and January 2020. In addition, we made release payments to Mr. Mackey in cash, in an aggregate amount of $330 , during the year ended December 31, 2019 and $110 in January 2020, and made transition payments to Mr. Mackey and Mr. Doyle in cash, in an aggregate amount of $96 and $56 , respectively, during the year ended December 31, 2019. Our arrangements with Messrs. Mackey, Herzig and Doyle meet the criteria in ASC Topic 420, and, as a result, we recorded the full severance cost of $1,160 for Mr. Mackey and $510 for Mr. Herzig in the year ended December 31, 2018, and we recorded the full severance cost of $581 |
Reclassifications | Reclassifications. We have made reclassifications to the prior years’ financial statements to conform to the current year’s presentation. These reclassifications had no effect on net loss or shareholders’ equity. |
Recently Adopted Accounting Pronouncements and Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements . As previously discussed, on January 1, 2019, we adopted FASB ASU No. 2016-02 and FASB ASU No. 2018-11 under ASC Topic 842, Leases , or ASC Topic 842, utilizing the modified retrospective transition method with no adjustments to comparative periods presented. Accordingly, the information presented for 2018 has not been restated and remains as previously reported under ASC 840 and related interpretations. Additionally, we elected the practical expedients within ASU No. 2016-02 that allow an entity to not reassess as of January 1, 2019, its prior conclusions on whether an existing contract contains a lease, lease classification for existing leases, and whether costs incurred for existing leases qualify as initial direct costs. While the adoption of these ASUs did not affect the rent we pay, the rent expense amounts presented in our consolidated statements of operations were impacted primarily due to changes in how we accounted for our deferred gain on the sale and leaseback transaction we entered into with DHC in 2017. As such, on January 1, 2019, we recorded through retained earnings our total deferred gain of $67,473 on our consolidated balance sheets as of December 31, 2018, $55 of which was in accounts payable and accrued expenses, $6,724 of which was in other current liabilities, $1,216 of which was in other long-term liabilities and the remaining $59,478 was separately stated on our consolidated balance sheets. On January 1, 2019, we adopted FASB ASU No. 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20) , which shortens the amortization period for certain callable debt securities held at a premium. Specifically, this ASU requires the premium to be amortized to the earliest call date. This ASU does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The adoption of this ASU did not have a material impact on our consolidated financial statements. On January 1, 2019, we adopted FASB ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220) , which permits an entity to reclassify the tax effects that remain recorded within other comprehensive income to retained earnings as a result of the tax reform legislation that became effective in December 2017. The adoption of this ASU did not have a material impact on our consolidated financial statements. On January 1, 2019, we adopted FASB ASU No. 2018-07, Compensation-Stock Compensation (Topic 718) , which expands the scope of ASU Topic 718 to include share based payment transactions for acquiring goods and services from non-employees. The adoption of this ASU did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires a financial asset or a group of financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This ASU eliminates the probable initial recognition threshold and instead requires reflection of an entity’s current estimate of all expected credit losses. In addition, this ASU amends the current available for sale security other-than-temporary impairment model for debt securities. The length of time that the fair value of an available for sale debt security has been below the amortized cost will no longer impact the determination of whether a credit loss exists and credit losses will now be limited to the difference between a security’s amortized cost basis and its fair value. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses , which amends the transition and effective date for nonpublic entities and clarifies that receivables arising from operating leases are not in the scope of this ASU. These ASUs are effective for reporting periods beginning after December 15, 2022. We are assessing the potential impact that the adoption of these ASUs will have on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) , which modifies certain disclosure requirements in Topic 820, such as the removal of the need to disclose the amount of and reason for transfers between Level 1 and Level 2 of the fair value hierarchy, and several changes related to Level 3 fair value measurements. This ASU is effective for reporting periods beginning after December 15, 2019. We expect this ASU will not have a material impact on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40) , which aligns the requirements for capitalizing implementation costs incurred in a cloud computing hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal use software. This ASU is effective for reporting periods beginning after December 15, 2019. We expect this ASU will not have a material impact on our consolidated financial statements. In December 2019, the FASB also issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies certain requirements under Topic 740, including eliminating the exception to intraperiod tax allocation when there is a loss from continuing operations and income from other sources, such as other comprehensive income or discontinued operations. This ASU is effective for reporting periods beginning after December 15, 2020. We expect this ASU will not have a material impact on our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of restricted cash | As of December 31, 2019 2018 Current Long-Term Current Long-Term Insurance reserves and other restricted amounts $ 679 $ 1,244 $ 691 $ 923 Real estate taxes and capital expenditures as required by our mortgages 526 — 483 — Resident security deposits 32 — 612 — Workers’ compensation letter of credit collateral 21,655 — 17,934 — Health deposit-imprest cash 1,103 — 1,103 — Total $ 23,995 $ 1,244 $ 20,823 $ 923 |
Schedule of allowance for doubtful accounts roll forward | Our allowance for doubtful accounts consists of the following: Allowance for Doubtful Accounts Balance at Beginning of Period Provision for Doubtful Accounts Recoveries Write-offs Balance at End of Period December 31, 2018 $ 3,572 $ 4,904 $ 1,461 $ (6,515 ) $ 3,422 December 31, 2019 $ 3,422 $ 4,891 $ 1,459 $ (5,108 ) $ 4,664 |
Schedule of fair value and gross unrealized losses related to available for sale securities | The following table summarizes the fair value and gross unrealized losses related to our debt investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position for the years ended: Debt Investments Less than 12 months Greater than 12 months Total Fair Value Unrealized Loss Fair Value Unrealized Fair Value Unrealized December 31, 2019 $ 292 $ 10 $ — $ — $ 292 $ 10 December 31, 2018 $ 1,688 $ 31 $ 12,234 $ 265 $ 13,922 $ 296 |
Schedule of property and equipment estimated useful lives | Property and equipment are recorded at cost and depreciated using the straight-line basis over their estimated useful lives, which are typically as follows: Asset Class Estimated Useful Life (in years) Buildings 40 Building improvements 3 - 15 Equipment 7 Computer equipment and software 5 Furniture and fixtures 7 Property and equipment consist of the following: As of December 31, 2019 2018 Land $ 12,155 $ 16,383 Buildings and improvements 201,447 208,375 Furniture, fixtures and equipment 59,174 239,240 Property and equipment, at cost 272,776 463,998 Accumulated depreciation (105,529 ) (220,125 ) Property and equipment, net $ 167,247 $ 243,873 |
Schedule of disaggregation of revenue | The following table presents revenue disaggregated by type of contract and payer: Year Ended December 31, 2019 2018 Leasing revenue (1) $ 654,563 $ 649,493 Revenue from contracts with customers: Medicare and Medicaid programs (1) 237,455 255,032 Additional requested services, and private pay and other third party payer SNF services (1) 193,165 189,879 Management fee revenue 16,169 15,145 Reimbursed costs incurred on behalf of managed communities 313,792 280,845 Total revenue from contracts with customers 760,581 740,901 Total revenues $ 1,415,144 $ 1,390,394 (1) Included in senior living revenue in our consolidated statements of operations. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment are recorded at cost and depreciated using the straight-line basis over their estimated useful lives, which are typically as follows: Asset Class Estimated Useful Life (in years) Buildings 40 Building improvements 3 - 15 Equipment 7 Computer equipment and software 5 Furniture and fixtures 7 Property and equipment consist of the following: As of December 31, 2019 2018 Land $ 12,155 $ 16,383 Buildings and improvements 201,447 208,375 Furniture, fixtures and equipment 59,174 239,240 Property and equipment, at cost 272,776 463,998 Accumulated depreciation (105,529 ) (220,125 ) Property and equipment, net $ 167,247 $ 243,873 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of indefinite-lived intangible assets | The changes in the carrying amount of our other intangible assets for the years ended December 31, 2019 and 2018 are as follows: December 31, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Indefinite lived intangible assets $ 191 $ — $ 191 $ 191 $ — $ 191 Definite lived intangible assets 3,767 (3,767 ) — 3,767 (3,767 ) — $ 3,958 $ (3,767 ) $ 191 $ 3,958 $ (3,767 ) $ 191 |
Schedule of finite-lived intangible assets | The changes in the carrying amount of our other intangible assets for the years ended December 31, 2019 and 2018 are as follows: December 31, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Indefinite lived intangible assets $ 191 $ — $ 191 $ 191 $ — $ 191 Definite lived intangible assets 3,767 (3,767 ) — 3,767 (3,767 ) — $ 3,958 $ (3,767 ) $ 191 $ 3,958 $ (3,767 ) $ 191 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets and liabilities | Significant components of our deferred tax assets and liabilities at December 31, 2019 and 2018 , which are included in other long-term assets on our consolidated balance sheets, were as follows: As of December 31, 2019 2018 Non-current deferred tax assets: Allowance for doubtful accounts $ 1,204 $ 894 Deferred gains on sale and leaseback transactions 357 18,789 Insurance reserves 2,500 2,558 Tax credits 19,394 19,636 Tax loss carryforwards 62,098 57,914 Interest expense 958 801 Depreciable assets 5,778 4,831 Goodwill 2,536 2,992 Right of use lease obligation 5,886 — Other assets 528 1,050 Total non-current deferred tax assets before valuation allowance 101,239 109,465 Valuation allowance: (87,665 ) (101,300 ) Total non-current deferred tax assets 13,574 8,165 Non-current deferred tax liabilities: Lease expense (4,914 ) (5,434 ) Employee stock grants (7 ) (35 ) Right of use lease asset (5,886 ) — Other liabilities (1,818 ) (1,374 ) Total non-current deferred tax liabilities (12,625 ) (6,843 ) Net deferred tax assets $ 949 $ 1,322 |
Schedule of changes in valuation allowance for deferred tax assets | The changes in our valuation allowance for deferred tax assets were as follows: Balance at Beginning of Period Amounts Charged to Expense Amounts Charged Off, Net of Recoveries Amounts Charged (Credited) to Equity Balance at End of Period Year Ended December 31, 2018 $ 80,154 $ — $ 21,074 $ 72 $ 101,300 Year Ended December 31, 2019 $ 101,300 $ — $ (13,341 ) $ (294 ) $ 87,665 |
Schedule of provision for income taxes from continuing operations | The provision for income taxes from operations is as follows: Years Ended December 31, 2019 2018 Current tax provision (benefit): Federal $ (561 ) $ (554 ) State 244 151 Total current tax benefit (317 ) (403 ) Deferred tax provision: Federal 277 554 State 96 96 Total deferred tax provision 373 650 Total tax provision $ 56 $ 247 |
Schedule of difference between effective tax rate on continuing operations and the U.S. Federal statutory income tax rate | The principal reasons for the difference between our effective tax rate on operations and the U.S. federal statutory income tax rate are as follows: Years Ended December 31, 2019 2018 Taxes at statutory U.S. federal income tax rate (21.0 )% (21.0 )% State and local income taxes, net of federal tax benefit 17.2 % (5.8 )% Tax credits (0.9 )% — % Change in valuation allowance (67.4 )% 26.8 % Deferred taxes 72.4 % — % Other differences, net — % 0.3 % Effective tax rate 0.3 % 0.3 % |
Fair Values of Assets and Lia_2
Fair Values of Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets measured at fair value on a recurring basis | The tables below present certain of our assets measured at fair value at December 31, 2019 and 2018 , categorized by the level of inputs, as defined in the fair value hierarchy under U.S. generally accepted accounting principles, or GAAP, used in the valuation of each asset. As of December 31, 2019 Description Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents (1) $ 27,456 $ 27,456 $ — $ — Investments: Equity investments (2) Financial services industry 1,233 1,233 — — Healthcare 395 395 — — Technology 281 281 — — Other 4,500 4,500 — — Total equity investments 6,409 6,409 — — Debt investments (3) International bond fund (4) 2,680 — 2,680 — High yield fund (5) 2,977 — 2,977 — Industrial bonds 1,180 — 1,180 — Technology bonds 2,189 — 2,189 — Government bonds 9,537 9,537 — — Energy bonds 625 — 625 — Financial bonds 1,853 — 1,853 — Other 725 — 725 — Total debt investments 21,766 9,537 12,229 — Total investments 28,175 15,946 12,229 — Total $ 55,631 $ 43,402 $ 12,229 $ — As of December 31, 2018 Description Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents (1) $ 23,390 $ 23,390 $ — $ — Investments: Equity investments (2) Financial services industry 1,074 1,074 — — Healthcare 291 291 — — Technology 174 174 — — Other 3,927 3,927 — — Total equity investments 5,466 5,466 — — Debt investments (3) International bond fund (4) 2,537 — 2,537 — High yield fund (5) 2,669 — 2,669 — Industrial bonds 1,692 — 1,692 — Technology bonds 2,375 — 2,375 — Government bonds 9,791 9,791 — — Energy bonds 595 — 595 — Financial bonds 1,858 — 1,858 — Other 1,268 — 1,268 — Total debt investments 22,785 9,791 12,994 — Total investments 28,251 15,257 12,994 — Total $ 51,641 $ 38,647 $ 12,994 $ — _______________________________________ (1) Cash equivalents consist of short-term, highly liquid investments and money market funds held primarily for obligations arising from our self-insurance programs. Cash equivalents are reported in our consolidated balance sheets as cash, cash equivalents and current and long-term restricted cash. Cash equivalents include $23,014 and $19,529 of balances that are restricted at December 31, 2019 and 2018 , respectively. (2) The fair value of our equity investments is readily determinable. During the years ended December 31, 2019 and 2018 , we received gross proceeds of $1,963 and $2,407 , respectively, in connection with the sales of equity investments and recorded gross realized gains totaling $289 and $280 , respectively, and gross realized losses totaling $60 and $72 , respectively. (3) As of December 31, 2019 , our debt investments, which are classified as available for sale, had a fair value of $21,766 with an amortized cost of $19,662 ; the difference between the fair value and amortized cost amounts resulted from unrealized gains of $2,114 , net of unrealized losses of $10 . As of December 31, 2018 , our debt investments had a fair value of $22,785 with an amortized cost of $21,806 ; the difference between the fair value and amortized cost amounts resulted from unrealized gains of $1,276 , net of unrealized losses of $296 . Debt investments include $12,477 and $13,943 of balances that are restricted as of December 31, 2019 and 2018 , respectively. At December 31, 2019 , one of the debt investments we hold, with a fair value of $292 , has been in a loss position for less than 12 months and we did not hold any debt investment with a fair value in a loss position for greater than 12 months. We do not believe this investment is impaired primarily because it has not been in a loss position for an extended period of time, the financial conditions of the issuer of this investment remain strong with solid fundamentals, or we intend to hold the investment until recovery, and other factors that support our conclusion that the loss is temporary. During the years ended December 31, 2019 and 2018 , we received gross proceeds of $3,230 and $7,031 , respectively, in connection with the sales of debt investments and recorded gross realized gains totaling $7 and $10 , respectively, and gross realized losses totaling $7 and $119 , respectively. We record gains and losses on the sales of these investments using the specific identification method. (4) The investment strategy of this fund is to invest principally in fixed income securities issued by non-U.S. issuers. The fund invests in such securities or investment vehicles as it considers appropriate to achieve the fund’s investment objective, which is to provide an above average rate of total return while attempting to limit investment risk by investing in a diversified portfolio of U.S. dollar investment grade fixed income securities. There are no unfunded commitments and the investment can be redeemed weekly. (5) The investment strategy of this fund is to invest principally in fixed income securities. The fund invests in such securities or investment vehicles as it considers appropriate to achieve the fund’s investment objective, which is to provide an above average rate of total return while attempting to limit investment risk by investing in a diversified portfolio of primarily fixed income securities issued by companies with below investment grade ratings. There are no unfunded commitments and the investment can be redeemed weekly. |
Indebtedness (Tables)
Indebtedness (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of mortgage notes | The following table is a summary of this mortgage note as of December 31, 2019 : Balance as of December 31, 2019 Contractual Stated Interest Rate Effective Interest Rate Maturity Date Monthly Payment Lender Type $ 7,786 (1) 6.20 % 6.70 % September 2032 $ 72 Federal Home Loan Mortgage Corporation ________________________________________________________________ (1) Contractual principal balance excluding unamortized discount and debt issuance costs of $253 . |
Schedule of principal payments due under mortgage notes | As of December 31, 2019, the required principal payments due during the next five years and thereafter under the terms of our mortgage note are as follows: Year Principal Payment 2020 $ 387 2021 413 2022 440 2023 469 2024 498 Thereafter 5,579 Total $ 7,786 Less: Unamortized net discount and debt issuance costs $ (253 ) Total mortgage note payable $ 7,533 Less: Short-term portion of mortgage note payable $ (362 ) Long-term portion of mortgage note payable $ 7,171 |
Leases with DHC and Healthpea_2
Leases with DHC and Healthpeak Properties, Inc and Management Agreements with DHC (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Summary of real property leases | The following table is a summary of our leases with DHC and with PEAK as of December 31, 2019 : Number of Properties Remaining Renewal Options Annual Minimum Rent as of December 31, 2019 Future Minimum Rents for the Twelve Months Ending December 31, Lease No. (Expiration Date) 2020 2021 2022 2023 2024 Thereafter Total IBR Lease Liability (4) 1. DHC Lease No. 1 (1) (December 31, 2024) 73 Two 15-year renewal options $ 31,226 $ — $ — $ — $ — $ — $ — $ — — $ — 2. DHC Lease No. 2 (1) (June 30, 2026) 39 Two 10-year renewal options 39,318 — — — — — — — — — 3. DHC Lease No. 3 (2) (December 31, 2028) 17 Two 15-year renewal options 26,679 — — — — — — — — — 4. DHC Lease No. 4 (1) (April 30, 2032) 28 Two 15-year renewal options 25,641 — — — — — — — — — 5. DHC Lease No. 5 (2) (December 31, 2028) 9 Two 15-year renewal options 6,921 — — — — — — — — — 6. One PEAK lease (3) (April 30, 2028) 4 One 10-year renewal option 2,853 2,910 2,959 3,023 3,088 3,150 7,590 22,720 4.60 % 21,097 Totals 170 $ 132,638 $ 2,910 $ 2,959 $ 3,023 $ 3,088 $ 3,150 $ 7,590 $ 22,720 $ 21,097 (1) Lease includes SNFs and independent and assisted living communities. (2) Lease includes independent and assisted living communities. (3) Lease includes assisted living communities. (4) Total lease liability does not include the lease liability related to our headquarters of $1,446 , using an IBR of 4.4% . |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Schedule of Subsequent Events | The following pro forma presentation of our shareholders’ equity as of December 31, 2019, gives effect to the issuance of 26,387,007 common shares in the Share Issuances, as if, these issuances were effective at the close of business on December 31, 2019. December 31, 2019 (As Reported) Restructuring Transaction Adjustment December 31, 2019 (Pro Forma) Common stock, par value $.01: 75,000,000 shares authorized, $ 52 $ 264 $ 316 Additional paid in capital 362,450 97,634 460,084 |
Organization and Description _2
Organization and Description of Business (Details) | Jan. 01, 2020USD ($)shares | Sep. 30, 2019$ / sharesshares | Apr. 01, 2019USD ($)lease | Dec. 31, 2019USD ($)statecommunitybedleaseliving_unitsuitefacilityapartmentproperty$ / sharesshares | Sep. 29, 2019$ / sharesshares | Dec. 31, 2018community$ / sharesshares |
Real estate properties | ||||||
Number of real estate properties leased | property | 170 | |||||
Stock split ratio | 0.1 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.10 | $ 0.01 | ||
Common stock, shares issued (in shares) | shares | 5,082,334 | 5,154,892 | 50,823,340 | 5,085,345 | ||
Common stock, shares outstanding (in shares) | shares | 5,082,334 | 5,154,892 | 50,823,340 | 5,085,345 | ||
Senior living communities | ||||||
Real estate properties | ||||||
Number of properties operated | 268 | |||||
Number of states in which real estate properties are located | state | 32 | |||||
Number of living units in properties operated | living_unit | 31,285 | |||||
Number of properties owned and operated | 20 | |||||
Number of living units in properties owned and operated | living_unit | 2,108 | |||||
Number of real estate properties leased | 170 | |||||
Number of units leased and operated | living_unit | 18,840 | |||||
Number of properties managed | 78 | |||||
Number of units in properties managed | living_unit | 10,337 | |||||
Independent and assisted living communities | ||||||
Real estate properties | ||||||
Number of properties operated | 257 | |||||
Number of living units in properties operated | living_unit | 30,021 | |||||
SNF | ||||||
Real estate properties | ||||||
Number of properties operated | facility | 11 | |||||
Number of living units in properties operated | living_unit | 1,264 | |||||
Independent living apartment | ||||||
Real estate properties | ||||||
Number of living units in properties operated | apartment | 11,364 | |||||
Assisted living suites | ||||||
Real estate properties | ||||||
Number of living units in properties operated | suite | 16,470 | |||||
Skilled nursing units | ||||||
Real estate properties | ||||||
Number of living units in properties operated | bed | 3,451 | |||||
DHC | Senior Housing Properties Trust Transaction Agreement | ||||||
Real estate properties | ||||||
Number of real estate properties leased | 166 | 184 | ||||
Number of properties managed | 244 | |||||
Number of leases | lease | 5 | |||||
DHC | Senior living communities | ||||||
Real estate properties | ||||||
Number of real estate properties leased | 166 | 184 | ||||
Number of properties managed | 244 | |||||
DHC | Senior living communities | Senior Housing Properties Trust Transaction Agreement | ||||||
Real estate properties | ||||||
Number of leases | lease | 5 | |||||
DHC | SNH Credit Facility | Line of Credit | Senior Housing Properties Trust Transaction Agreement | ||||||
Real estate properties | ||||||
Maximum borrowing capacity | $ | $ 25,000,000 | |||||
Number of senior living communities | 6 | |||||
Debt outstanding | $ | $ 0 | |||||
Subsequent Event | Private Placement | DHC | Senior Housing Properties Trust Transaction Agreement | ||||||
Real estate properties | ||||||
Number of shares sold (in shares) | shares | 26,387,007 | |||||
Issuance of common stock | $ | $ 75,000,000 | |||||
Subsequent Event | DHC | Private Placement | DHC | Senior Housing Properties Trust Transaction Agreement | ||||||
Real estate properties | ||||||
Number of shares sold (in shares) | shares | 10,268,158 | |||||
Subsequent Event | DHC Shareholders | Private Placement | DHC | Senior Housing Properties Trust Transaction Agreement | ||||||
Real estate properties | ||||||
Number of shares sold (in shares) | shares | 16,118,849 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2020USD ($) | Dec. 31, 2019USD ($)shareholdercontract | Jun. 30, 2019USD ($) | Jan. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($)shareholdercontract | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($)segmentshareholdercontract | Dec. 31, 2018USD ($) | Jan. 01, 2019USD ($) | Jan. 01, 2018USD ($) | |
Equity Method Investments | ||||||||||||
Number of operating segments | segment | 2 | |||||||||||
Number of reporting segments | segment | 1 | |||||||||||
Percentage of revenues derived from payments under the Medicare and Medicaid programs | 26.50% | 23.40% | 25.00% | 33.80% | ||||||||
Amounts due from the medicare program | $ 9,056,000 | $ 8,821,000 | $ 9,056,000 | $ 8,821,000 | $ 9,056,000 | $ 8,821,000 | ||||||
Amounts due from various state medicaid programs | 8,532,000 | 12,757,000 | 8,532,000 | 12,757,000 | 8,532,000 | 12,757,000 | ||||||
Cumulative effect of new accounting principle | $ 67,473,000 | $ 0 | ||||||||||
Equity investments | 6,409,000 | 5,466,000 | 6,409,000 | 5,466,000 | 6,409,000 | 5,466,000 | ||||||
Equity investments net unrealized holding gain | 1,201,000 | 1,201,000 | 1,201,000 | |||||||||
Debt investments | 21,766,000 | 22,785,000 | 21,766,000 | 22,785,000 | 21,766,000 | 22,785,000 | ||||||
Debt investments net unrealized holding gain | 2,104,000 | 2,104,000 | 2,104,000 | |||||||||
Interest and dividend income | 1,364,000 | 818,000 | ||||||||||
Unamortized gross balance of deferred financing costs | 980,000 | 187,000 | 980,000 | 187,000 | 980,000 | 187,000 | ||||||
Write off of deferred debt issuance costs | 554,000 | |||||||||||
Equity investment of an investee | 298,000 | 8,633,000 | 298,000 | 8,633,000 | 298,000 | 8,633,000 | ||||||
Distributions from equity investment | 9,000,000 | 0 | ||||||||||
Estimated minimum loss | 0 | 0 | 0 | |||||||||
Self insurance reserve | $ 65,908,000 | 67,534,000 | $ 65,908,000 | 67,534,000 | $ 65,908,000 | 67,534,000 | ||||||
Number of forms of contracts offered to existing residents | contract | 3 | 3 | 3 | |||||||||
AIC | ||||||||||||
Equity Method Investments | ||||||||||||
Number of other current shareholders of the related party | shareholder | 6 | 6 | 6 | |||||||||
Ownership percentage | 14.30% | 14.30% | 14.30% | |||||||||
Equity investment of an investee | $ 6,034,000 | $ 6,034,000 | $ 6,034,000 | |||||||||
Distributions from equity investment | 9,000,000 | |||||||||||
Accumulated Deficit | ||||||||||||
Equity Method Investments | ||||||||||||
Cumulative effect of new accounting principle | 67,473,000 | 1,947,000 | ||||||||||
Accumulated Other Comprehensive Income | ||||||||||||
Equity Method Investments | ||||||||||||
Cumulative effect of new accounting principle | (1,947,000) | |||||||||||
Equity Securities | ||||||||||||
Equity Method Investments | ||||||||||||
Equity investments | 5,466,000 | 5,466,000 | 5,466,000 | |||||||||
Equity investments net unrealized holding gain | 419,000 | 419,000 | 419,000 | |||||||||
Debt Securities | ||||||||||||
Equity Method Investments | ||||||||||||
Available for sale securities net unrealized holding gain | 979,000 | 979,000 | 979,000 | |||||||||
Other current assets | ||||||||||||
Equity Method Investments | ||||||||||||
Unamortized gross balance of deferred financing costs | 692,000 | 187,000 | 692,000 | 187,000 | 692,000 | 187,000 | ||||||
Other long-term assets | ||||||||||||
Equity Method Investments | ||||||||||||
Unamortized gross balance of deferred financing costs | 288,000 | 0 | 288,000 | 0 | 288,000 | 0 | ||||||
Accounts payable and accrued liabilities | ||||||||||||
Equity Method Investments | ||||||||||||
Deferred gain on sale and leaseback transaction | 55,000 | 55,000 | 55,000 | |||||||||
Other current liabilities | ||||||||||||
Equity Method Investments | ||||||||||||
Deferred gain on sale and leaseback transaction | 6,724,000 | 6,724,000 | 6,724,000 | |||||||||
Other long term liabilities | ||||||||||||
Equity Method Investments | ||||||||||||
Deferred gain on sale and leaseback transaction | 1,216,000 | 1,216,000 | 1,216,000 | |||||||||
Separately stated | ||||||||||||
Equity Method Investments | ||||||||||||
Deferred gain on sale and leaseback transaction | 59,478,000 | 59,478,000 | 59,478,000 | |||||||||
Refundable Admission Fees | ||||||||||||
Equity Method Investments | ||||||||||||
Admission fees | 552,000 | 755,000 | 552,000 | 755,000 | 552,000 | 755,000 | ||||||
Non-Refundable Admission Fees | ||||||||||||
Equity Method Investments | ||||||||||||
Admission fees | 0 | 1,119,000 | 0 | 1,119,000 | 0 | 1,119,000 | ||||||
Non-Refundable Admission Fees | Other long term liabilities | ||||||||||||
Equity Method Investments | ||||||||||||
Admission fees | $ 0 | 863,000 | $ 0 | 863,000 | $ 0 | $ 863,000 | ||||||
Resident Fees | ||||||||||||
Equity Method Investments | ||||||||||||
Payment terms, description | Fees are specified in our agreements with residents, which are generally short term (30 days to one year), with regular monthly charges billed in advance | |||||||||||
Minimum | ||||||||||||
Equity Method Investments | ||||||||||||
Payment term | 30 days | |||||||||||
Maximum | ||||||||||||
Equity Method Investments | ||||||||||||
Payment term | 1 year | |||||||||||
One form | ||||||||||||
Equity Method Investments | ||||||||||||
Remaining percentage of resident admission fee that becomes non-refundable | 90.00% | 90.00% | 90.00% | |||||||||
Senior living communities | ||||||||||||
Equity Method Investments | ||||||||||||
Percentage of revenues derived from payments under the Medicare and Medicaid programs | 21.50% | 23.30% | ||||||||||
Chief Executive Officer | Severance | ||||||||||||
Equity Method Investments | ||||||||||||
Amount recorded for one-time employee termination benefits | $ 1,160,000 | |||||||||||
Accounting Standards Update 2016-01 | Accumulated Deficit | ||||||||||||
Equity Method Investments | ||||||||||||
Cumulative effect of new accounting principle | 1,947,000 | |||||||||||
Accounting Standards Update 2016-01 | Accumulated Other Comprehensive Income | ||||||||||||
Equity Method Investments | ||||||||||||
Cumulative effect of new accounting principle | $ (1,947,000) | |||||||||||
Accounting Standards Update 2016-02 | Accumulated Deficit | ||||||||||||
Equity Method Investments | ||||||||||||
Cumulative effect of new accounting principle | $ 67,473,000 | |||||||||||
DHC | Management fee revenue | ||||||||||||
Equity Method Investments | ||||||||||||
Due from (to) related party | $ 3,363,000 | $ (10,900,000) | $ 3,363,000 | (10,900,000) | $ 3,363,000 | $ (10,900,000) | ||||||
Chief Executive Officer | Severance, Cash Payment | ||||||||||||
Equity Method Investments | ||||||||||||
Payments for one-time employee termination benefits | $ 600,000 | |||||||||||
Chief Executive Officer | Severance, Release Payments | ||||||||||||
Equity Method Investments | ||||||||||||
Payments for one-time employee termination benefits | 330,000 | |||||||||||
Chief Executive Officer | Severance, Transition Payments | ||||||||||||
Equity Method Investments | ||||||||||||
Payments for one-time employee termination benefits | 96,000 | |||||||||||
Chief Executive Officer | Subsequent Event | Severance, Release Payments | ||||||||||||
Equity Method Investments | ||||||||||||
Payments for one-time employee termination benefits | $ 110,000 | |||||||||||
Senior Vice President | Severance, Cash Payment | ||||||||||||
Equity Method Investments | ||||||||||||
Payments for one-time employee termination benefits | $ 510,000 | |||||||||||
Senior Vice President | Senior Vice President | Severance | ||||||||||||
Equity Method Investments | ||||||||||||
Amount recorded for one-time employee termination benefits | $ 510,000 | |||||||||||
Senior Vice President | Subsequent Event | Severance, Transition Payments | ||||||||||||
Equity Method Investments | ||||||||||||
Payments for one-time employee termination benefits | 56,000 | |||||||||||
Chief Financial Officer | Severance, Cash Payment | ||||||||||||
Equity Method Investments | ||||||||||||
Payments for one-time employee termination benefits | $ 260,000 | |||||||||||
Chief Financial Officer | Severance | ||||||||||||
Equity Method Investments | ||||||||||||
Amount recorded for one-time employee termination benefits | $ 581,000 | |||||||||||
Chief Financial Officer | Subsequent Event | Severance, Cash Payment | ||||||||||||
Equity Method Investments | ||||||||||||
Payments for one-time employee termination benefits | $ 260,000 | |||||||||||
Revolving Credit Facility | Secured Revolving Credit Facility Maturing June 2021 | Line of Credit | ||||||||||||
Equity Method Investments | ||||||||||||
Remaining borrowing capacity | $ 55,856,000 | $ 65,000,000 | $ 55,856,000 | $ 65,000,000 | $ 55,856,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Document Period End Date | Dec. 31, 2019 | |
Current | $ 23,995 | $ 20,823 |
Long-Term | 1,244 | 923 |
Insurance reserves and other restricted amounts | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Current | 679 | 691 |
Long-Term | 1,244 | 923 |
Real estate taxes and capital expenditures as required by our mortgages | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Current | 526 | 483 |
Long-Term | 0 | 0 |
Resident security deposits | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Current | 32 | 612 |
Long-Term | 0 | 0 |
Workers’ compensation letter of credit collateral | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Current | 21,655 | 17,934 |
Long-Term | 0 | 0 |
Health deposit-imprest cash | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Current | 1,103 | 1,103 |
Long-Term | $ 0 | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Receivables and Financing Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Allowance for doubtful accounts | ||
Balance at Beginning of Period | $ 3,422 | $ 3,572 |
Provision for Doubtful Accounts | 4,891 | 4,904 |
Recoveries | 1,459 | 1,461 |
Write-offs | (5,108) | (6,515) |
Balance at End of Period | $ 4,664 | $ 3,422 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Debt Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Investments | ||
Fair Value, Less than 12 months | $ 292 | $ 1,688 |
Unrealized Loss , Less than 12 months | 10 | 31 |
Fair Value, Greater than 12 months | 0 | 12,234 |
Unrealized Loss, Greater than 12 months | 0 | 265 |
Fair Value, Total | 292 | 13,922 |
Unrealized Loss, Total | $ 10 | $ 296 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Buildings | |
Property and Equipment | |
Estimated Useful Life (in years) | 40 years |
Building improvements | Minimum | |
Property and Equipment | |
Estimated Useful Life (in years) | 3 years |
Building improvements | Maximum | |
Property and Equipment | |
Estimated Useful Life (in years) | 15 years |
Equipment | |
Property and Equipment | |
Estimated Useful Life (in years) | 7 years |
Computer equipment and software | |
Property and Equipment | |
Estimated Useful Life (in years) | 5 years |
Furniture and fixtures | |
Property and Equipment | |
Estimated Useful Life (in years) | 7 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Leasing revenue | $ 654,563 | $ 649,493 |
Revenue from contracts with customers | 760,581 | 740,901 |
Total revenues | 1,415,144 | 1,390,394 |
Medicare and Medicaid programs | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 237,455 | 255,032 |
Additional requested services, and private pay and other third party payer SNF services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 193,165 | 189,879 |
Management fee revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 16,169 | 15,145 |
Total revenues | 16,169 | 15,145 |
Reimbursed costs incurred on behalf of managed communities | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 313,792 | 280,845 |
Total revenues | $ 313,792 | $ 280,845 |
Property and Equipment (Details
Property and Equipment (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)community | Dec. 31, 2018USD ($)community | |
Property and Equipment | ||
Property and equipment, at cost | $ 272,776 | $ 463,998 |
Accumulated depreciation | (105,529) | (220,125) |
Property and equipment, net | 167,247 | 243,873 |
Depreciation expense | 16,640 | 35,859 |
Long lived asset impairment | 3,148 | 387 |
Fair values of the impaired assets | 4,520 | 362 |
Impairment of long-lived assets | $ 134 | $ 74 |
Number of communities impaired | community | 5 | 1 |
SNH | ||
Property and Equipment | ||
Assets held for sale | $ 1,863 | |
Land | ||
Property and Equipment | ||
Property and equipment, at cost | $ 12,155 | 16,383 |
Buildings and improvements | ||
Property and Equipment | ||
Property and equipment, at cost | 201,447 | 208,375 |
Furniture, fixtures and equipment | ||
Property and Equipment | ||
Property and equipment, at cost | 59,174 | 239,240 |
Disposal Group, Not Discontinued Operations | ||
Property and Equipment | ||
Assets held for sale | $ 4,813 | $ 0 |
Other Intangible Assets (Detail
Other Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Indefinite lived intangible assets | $ 191,000 | $ 191,000 |
Definite lived intangible assets, Gross carrying amount | 3,767,000 | 3,767,000 |
Definite lived intangible assets, Accumulated amortization | (3,767,000) | (3,767,000) |
Definite lived intangible assets, Net | 0 | 0 |
Intangible assets, Gross carrying amount | 3,958,000 | 3,958,000 |
Intangible assets, Net | 191,000 | 191,000 |
Amortization of intangibles | $ 0 | $ 80,000 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Non-current deferred tax assets: | ||
Allowance for doubtful accounts | $ 1,204 | $ 894 |
Deferred gains on sale and leaseback transactions | 357 | 18,789 |
Insurance reserves | 2,500 | 2,558 |
Tax credits | 19,394 | 19,636 |
Tax loss carryforwards | 62,098 | 57,914 |
Interest expense | 958 | 801 |
Depreciable assets | 5,778 | 4,831 |
Goodwill | 2,536 | 2,992 |
Right of use lease obligation | 5,886 | 0 |
Other assets | 528 | 1,050 |
Total non-current deferred tax assets before valuation allowance | 101,239 | 109,465 |
Valuation allowance | (87,665) | (101,300) |
Total non-current deferred tax assets | 13,574 | 8,165 |
Non-current deferred tax liabilities: | ||
Lease expense | (4,914) | (5,434) |
Employee stock grants | (7) | (35) |
Right of use lease asset | (5,886) | 0 |
Other liabilities | (1,818) | (1,374) |
Total non-current deferred tax liabilities | (12,625) | (6,843) |
Net deferred tax assets | 949 | 1,322 |
Income Taxes | ||
Net operating loss carry forward, which begins to expire in 2027 if unused | 184,850 | |
Tax credit carry forward, which begins to expire in 2026 if unused | $ 18,723 | |
Period expected to be in cumulative loss position | 3 years | |
Movement in valuation allowance for deferred tax assets | ||
Provision for income taxes | $ 56 | 247 |
Valuation Allowance for Deferred Tax Assets | ||
Movement in valuation allowance for deferred tax assets | ||
Beginning balance | 101,300 | 80,154 |
Amounts Charged to Expense | 0 | 0 |
Amounts Charged Off, Net of Recoveries | (13,341) | 21,074 |
Amounts Charged (Credited) to Equity | (294) | 72 |
Ending balance | $ 87,665 | $ 101,300 |
Income Taxes - Current and Defe
Income Taxes - Current and Deferred Tax Provision (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Current tax provision (benefit): | ||
Federal | $ (561,000) | $ (554,000) |
State | 244,000 | 151,000 |
Total current tax benefit | (317,000) | (403,000) |
Deferred tax provision: | ||
Federal | 277,000 | 554,000 |
State | 96,000 | 96,000 |
Total deferred tax provision | 373,000 | 650,000 |
Total tax provision | $ 56,000 | $ 247,000 |
Difference between the entity's effective tax (benefit) rate on continuing operations and the U.S. Federal statutory income tax (benefit) rate | ||
Taxes at statutory U.S. federal income tax rate | (21.00%) | (21.00%) |
State and local income taxes, net of federal tax benefit | 17.20% | (5.80%) |
Tax credits | (0.90%) | 0.00% |
Change in valuation allowance | (67.40%) | 26.80% |
Deferred taxes | 72.40% | 0.00% |
Other differences, net | 0.00% | 0.30% |
Effective tax rate | 0.30% | 0.30% |
Unrecognized tax benefits | $ 0 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 120,718 | 140,416 |
Fair Values of Assets and Lia_3
Fair Values of Assets and Liabilities - Recurring Measurements (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)security | Dec. 31, 2018USD ($) | |
Fair Values of Assets and Liabilities | ||
Cash equivalents | $ 27,456 | $ 23,390 |
Equity investments | 6,409 | 5,466 |
Debt investments | 21,766 | 22,785 |
Total investments | 28,175 | 28,251 |
Total | 55,631 | 51,641 |
Restricted cash equivalents | 23,014 | 19,529 |
Proceeds from sale of equity securities | 1,963 | 2,407 |
Gross realized gains recorded on sale of equity securities | 289 | 280 |
Gross realized losses recorded on sale of equity securities | 60 | 72 |
Amortized cost of debt securities | 19,662 | 21,806 |
Unrealized gains on debt securities | 2,114 | 1,276 |
Unrealized losses on debt securities | $ 10 | 296 |
Debt investments in a loss position less than 12 months, number of positions | security | 1 | |
Debt investments in a loss position less than 12 months, fair value | $ 292 | 1,688 |
Proceeds from sale of debt securities | 3,230 | 7,031 |
Gross realized gains recorded on sale of debt securities | 7 | 10 |
Gross realized losses recorded on sale of debt securities | 7 | 119 |
Financial services industry | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 1,233 | 1,074 |
Healthcare | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 395 | 291 |
Technology | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 281 | 174 |
Other | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 4,500 | 3,927 |
International bond fund | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 2,680 | 2,537 |
High yield fund | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 2,977 | 2,669 |
Industrial bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 1,180 | 1,692 |
Technology bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 2,189 | 2,375 |
Government bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 9,537 | 9,791 |
Energy bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 625 | 595 |
Financial bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 1,853 | 1,858 |
Other | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 725 | 1,268 |
Restricted Debt Securities | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 12,477 | 13,943 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Values of Assets and Liabilities | ||
Cash equivalents | 27,456 | 23,390 |
Equity investments | 6,409 | 5,466 |
Debt investments | 9,537 | 9,791 |
Total investments | 15,946 | 15,257 |
Total | 43,402 | 38,647 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Financial services industry | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 1,233 | 1,074 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Healthcare | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 395 | 291 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Technology | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 281 | 174 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 4,500 | 3,927 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | International bond fund | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | High yield fund | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Industrial bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Technology bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Government bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 9,537 | 9,791 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Energy bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Financial bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Values of Assets and Liabilities | ||
Cash equivalents | 0 | 0 |
Equity investments | 0 | 0 |
Debt investments | 12,229 | 12,994 |
Total investments | 12,229 | 12,994 |
Total | 12,229 | 12,994 |
Significant Other Observable Inputs (Level 2) | Financial services industry | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Healthcare | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Technology | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Other | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | International bond fund | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 2,680 | 2,537 |
Significant Other Observable Inputs (Level 2) | High yield fund | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 2,977 | 2,669 |
Significant Other Observable Inputs (Level 2) | Industrial bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 1,180 | 1,692 |
Significant Other Observable Inputs (Level 2) | Technology bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 2,189 | 2,375 |
Significant Other Observable Inputs (Level 2) | Government bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Energy bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 625 | 595 |
Significant Other Observable Inputs (Level 2) | Financial bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 1,853 | 1,858 |
Significant Other Observable Inputs (Level 2) | Other | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 725 | 1,268 |
Significant Unobservable Inputs (Level 3) | ||
Fair Values of Assets and Liabilities | ||
Cash equivalents | 0 | 0 |
Equity investments | 0 | 0 |
Debt investments | 0 | 0 |
Total investments | 0 | 0 |
Total | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Financial services industry | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Healthcare | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Technology | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Other | ||
Fair Values of Assets and Liabilities | ||
Equity investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | International bond fund | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | High yield fund | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Industrial bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Technology bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Government bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Energy bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Financial bonds | ||
Fair Values of Assets and Liabilities | ||
Debt investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Other | ||
Fair Values of Assets and Liabilities | ||
Debt investments | $ 0 | $ 0 |
Fair Values of Assets and Lia_4
Fair Values of Assets and Liabilities - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Carrying value and fair value | ||
Mortgage notes payable | $ 7,171 | $ 7,533 |
Carrying value | Significant Unobservable Inputs (Level 3) | ||
Carrying value and fair value | ||
Mortgage notes payable | 7,533 | 7,872 |
Total | Significant Unobservable Inputs (Level 3) | ||
Carrying value and fair value | ||
Mortgage notes payable | $ 8,861 | $ 8,986 |
Indebtedness - Narrative (Detai
Indebtedness - Narrative (Details) | 1 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($)community | Feb. 28, 2018USD ($)community | Dec. 31, 2019USD ($)communityliving_unitagreement | Dec. 31, 2018USD ($) | Apr. 01, 2019USD ($) | |
Debt Instrument [Line Items] | ||||||
Payments of fees | $ 1,271,000 | $ 0 | ||||
Amount available for borrowing under credit facility | 28,626,000 | |||||
Line of Credit | DHC Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 25,000,000 | |||||
Mortgages | ||||||
Debt Instrument [Line Items] | ||||||
Interest expense and other associated costs | 526,000 | 1,053,000 | ||||
Revolving Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Interest expense and other associated costs | 2,089,000 | $ 1,965,000 | ||||
Revolving Credit Facility | Line of Credit | Secured Revolving Credit Facility Maturing June 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Letters of credit issued, remaining borrowing capacity | $ 65,000,000 | $ 55,856,000 | ||||
Maximum borrowing capacity | 65,000,000 | |||||
Extension period | 1 year | |||||
Payments of fees | $ 1,271,000 | |||||
Commitment fee | 0.35% | |||||
Weighted average annual interest rate | 5.00% | |||||
Debt outstanding | $ 0 | |||||
Amount available for borrowing under credit facility | $ 3,238,000 | |||||
Number of real estate properties securing borrowings on credit facility | community | 11 | |||||
Number of units in real estate properties securing borrowings on credit facility | living_unit | 1,245 | |||||
Revolving Credit Facility | Line of Credit | Secured Revolving Credit Facility Maturing June 2021 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate basis | 2.50% | |||||
Variable interest rate | 4.20% | |||||
Revolving Credit Facility | Line of Credit | Secured Revolving Credit Facility Maturing June 2021 | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate basis | 1.50% | |||||
Variable interest rate | 6.25% | |||||
Revolving Credit Facility | Line of Credit | Secured Revolving Credit Facility Maturing June 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 54,000,000 | |||||
Repayments of debt | $ 51,500,000 | |||||
Weighted average annual interest rate | 4.99% | 6.29% | ||||
Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 25,388,000 | $ 22,700,000 | ||||
Extension period | 1 year | |||||
Number of irrevocable standby letters of credit agreements | agreement | 7 | |||||
Other Than Workers' Compensation Insurance Program Collateral | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 3,238,000 | |||||
Number of irrevocable standby letters of credit agreements | agreement | 6 | |||||
Workers' Compensation Insurance Program | Cash Equivalents | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Collateral securing workers' compensation insurance program | $ 21,655,000 | |||||
Workers' Compensation Insurance Program | Debt and Equity Investments | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Collateral securing workers' compensation insurance program | $ 7,250,000 | |||||
Senior Living Communities | Mortgages | ||||||
Debt Instrument [Line Items] | ||||||
Number of real estate properties mortgaged | community | 1 | |||||
Senior Living Communities | Mortgages | 6.64% FNMA Mortgage Loans | ||||||
Debt Instrument [Line Items] | ||||||
Number of properties sold | community | 1 | |||||
Prepaid principal | $ 16,776,000 | |||||
Stated interest rate | 6.64% | |||||
Gain (loss) on early extinguishment of debt | $ 543,000 | |||||
Senior Living Communities | Mortgages | 5.75% Commercial Lender Mortgage | ||||||
Debt Instrument [Line Items] | ||||||
Number of properties sold | community | 2 | |||||
Prepaid principal | $ 16,588,000 | |||||
Stated interest rate | 5.75% | |||||
Gain (loss) on early extinguishment of debt | $ 638,000 |
Indebtedness - Summary of Mortg
Indebtedness - Summary of Mortgage (Details) - Mortgages - September 2032 $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |
Mortgage Notes | $ 7,786 |
Contractual Stated Interest Rate | 6.20% |
Effective Interest Rate | 6.70% |
Monthly Payment | $ 72 |
Unamortized net discount and debt issuance costs | $ 253 |
Indebtedness Indebtedness - Pri
Indebtedness Indebtedness - Principal Payments Due (Details) - Mortgages - September 2032 $ in Thousands | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |
2020 | $ 387 |
2021 | 413 |
2022 | 440 |
2023 | 469 |
2024 | 498 |
Thereafter | 5,579 |
Total mortgage notes payable, gross | 7,786 |
Less: Unamortized net discount and debt issuance costs | (253) |
Total mortgage note payable | 7,533 |
Less: Short-term portion of mortgage note payable | (362) |
Long-term portion of mortgage note payable | $ 7,171 |
Leases with DHC and Healthpea_3
Leases with DHC and Healthpeak Properties, Inc and Management Agreements with DHC - Lease Summary (Details) | Jan. 01, 2020USD ($)shares | Dec. 31, 2019USD ($)communitypropertytermrenewal_term | Apr. 01, 2019USD ($) | Feb. 29, 2020USD ($)property | Dec. 31, 2019USD ($)communitypropertytermrenewal_term | Apr. 30, 2019USD ($)living_unitproperty | Nov. 30, 2018living_unit | Jun. 30, 2018USD ($)communityliving_unitproperty | Jun. 30, 2016USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($)community | Dec. 30, 2019USD ($) | Sep. 30, 2019 | Dec. 31, 2019USD ($)communityleaseperiodpropertytermrenewal_term | Dec. 31, 2018USD ($)community | Feb. 01, 2019USD ($) |
Operating Leased Assets [Line Items] | ||||||||||||||||
Lease liability | $ 21,097,000 | $ 21,097,000 | $ 21,097,000 | |||||||||||||
Number of real estate properties leased | property | 170 | 170 | 170 | |||||||||||||
Total minimum annual rent payable | $ 132,638,000 | $ 132,638,000 | $ 132,638,000 | |||||||||||||
Rent expense | 141,486,000 | |||||||||||||||
Loss (gain) on sale of senior living communities | (856,000) | $ 7,131,000 | ||||||||||||||
Revenues | $ 1,415,144,000 | $ 1,390,394,000 | ||||||||||||||
DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Number of communities managed | community | 78 | 76 | ||||||||||||||
Minimum percentage of ownership interest of voting stock above which the option to cancel all the lease rights exist | 9.80% | 9.80% | 9.80% | |||||||||||||
Gain recognized on sale leaseback transaction | $ 82,644,000 | |||||||||||||||
Capital expenditure projects fee as a percentage of amount funded by related party | 7.00% | |||||||||||||||
Number of living units in communities managed, additions | living_unit | 318 | 238 | 98 | |||||||||||||
AL Management Agreement Before May 2015 | Minimum | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Management fees as a percentage of gross revenues | 3.00% | 3.00% | 3.00% | |||||||||||||
Annual incentive fee | 35.00% | 35.00% | 35.00% | |||||||||||||
Annual return as a percentage of invested surplus specified as a base for determining incentive fee | 8.00% | 8.00% | 8.00% | |||||||||||||
AL Management Agreement On Or After May 2015 | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Capital expenditure projects fee as a percentage of amount funded by related party | 3.00% | |||||||||||||||
AL Management Agreement On Or After May 2015 | Maximum | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Management fees as a percentage of gross revenues | 5.00% | 5.00% | 5.00% | |||||||||||||
Annual incentive fee | 20.00% | 20.00% | 20.00% | |||||||||||||
Annual return as a percentage of invested surplus specified as a base for determining incentive fee | 7.00% | 7.00% | 7.00% | |||||||||||||
New Pooling Agreement | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Management fees as a percentage of gross revenues | 5.00% | 5.00% | 5.00% | |||||||||||||
Annual incentive fee | 20.00% | 20.00% | 20.00% | |||||||||||||
Senior Housing Properties Trust Transaction Agreement | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Number of real estate properties leased | community | 166 | 166 | 166 | 184 | ||||||||||||
Number of leases | lease | 5 | |||||||||||||||
Number of properties managed | community | 244 | 244 | 244 | |||||||||||||
Operating lease monthly rent, minimum | $ 11,000,000 | |||||||||||||||
Management fee of gross revenue, base (as a percent) | 5.00% | 5.00% | 5.00% | |||||||||||||
Management fee of gross revenue, incentive (as a percent) | 15.00% | 15.00% | 15.00% | |||||||||||||
Management fee maximum (as a percent) | 1.50% | 1.50% | 1.50% | |||||||||||||
Number of renewal terms | term | 2 | 2 | 2 | |||||||||||||
Renewal term | 5 years | |||||||||||||||
EBITDA threshold, consecutive measurement period | 2 years | |||||||||||||||
EBITDA threshold, measurement period | 3 years | |||||||||||||||
Minimum percentage of ownership interest of voting stock above which the option to cancel all the lease rights exist | 9.80% | 9.80% | 9.80% | |||||||||||||
EBITDA threshold percentage | 90.00% | 90.00% | 90.00% | |||||||||||||
Termination threshold percentage | 20.00% | 20.00% | 20.00% | |||||||||||||
Expenses from transactions with related party | $ 11,952,000 | |||||||||||||||
Rent as percentage of gross revenue | 4.00% | |||||||||||||||
Total minimum annual rent payable | $ 129,785,000 | $ 129,785,000 | $ 129,785,000 | $ 207,760,000 | ||||||||||||
Rent expense | 138,310,000 | 206,190,000 | ||||||||||||||
Percentage rent | 1,547,000 | 5,542,000 | ||||||||||||||
Operating lease liability, reduction in payments due | $ 13,840,000 | |||||||||||||||
Amortization of lease inducement | 12,423,000 | $ 1,416,000 | ||||||||||||||
Increase (decrease) in due to related parties | $ 13,840,000 | |||||||||||||||
Outstanding rent due and payable | 0 | 0 | 0 | 18,781,000 | ||||||||||||
Amount funded for leasehold improvements | $ 110,027,000 | $ 110,027,000 | 110,027,000 | 17,956,000 | ||||||||||||
Increase (decrease) in annual lease rent payable | $ 1,547,000 | 1,433,000 | ||||||||||||||
June 2018 Sale of Skilled Nursing Facility in California | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Proceeds from sale communities | $ 6,500,000 | |||||||||||||||
Decrease in annual rent expense | 10.00% | |||||||||||||||
June 2018 Florida Living Unit Leased Acquired by Related Party | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Increase (decrease) in annual lease rent payable | $ 14,000 | |||||||||||||||
PEAK Inc | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Number of real estate properties leased | community | 4 | 4 | 4 | |||||||||||||
Number of renewal terms | renewal_term | 1 | 1 | 1 | |||||||||||||
Renewal term | 10 years | 10 years | 10 years | |||||||||||||
PEAK Inc | Minimum | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Minimum annual escalator percentage rent (as a percent) | 2.00% | |||||||||||||||
PEAK Inc | Maximum | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Minimum annual escalator percentage rent (as a percent) | 4.00% | |||||||||||||||
D & Yonkers LLC | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
EBITDA threshold, measurement period | 5 years | |||||||||||||||
Management fees as a percentage of gross revenues | 3.00% | 3.00% | 3.00% | |||||||||||||
Number of renewal options | period | 8 | |||||||||||||||
First Quarter 2018 Sales Group | 2017 Transaction Agreement | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Proceeds from sale communities | $ 41,917,000 | |||||||||||||||
Loss (gain) on sale of senior living communities | 5,684,000 | |||||||||||||||
Number of properties sold to, and subsequently managed for DHC | community | 2 | |||||||||||||||
PPE disposals | $ 19,425,000 | |||||||||||||||
Mortgage debt and premiums | 17,356,000 | |||||||||||||||
Related party transaction, liabilities transferred | $ 16,776,000 | |||||||||||||||
June 2018 Sales Group | 2017 Transaction Agreement | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Proceeds from sale communities | $ 23,300,000 | |||||||||||||||
Loss (gain) on sale of senior living communities | 1,549,000 | |||||||||||||||
Number of properties sold to, and subsequently managed for DHC | community | 2 | |||||||||||||||
PPE disposals | $ 5,163,000 | |||||||||||||||
Mortgage debt and premiums | 17,226,000 | |||||||||||||||
Related party transaction, liabilities transferred | $ 16,588,000 | |||||||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | February 2020 Sale Of Independent Living Community | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Carrying value | $ 25,000 | $ 25,000 | $ 25,000 | |||||||||||||
Prepaid expense and other assets | 11,000 | 11,000 | 11,000 | |||||||||||||
Operating income (loss) generated by the leased senior living communities | (142,000) | (856,000) | ||||||||||||||
Assets held for sale | 14,000 | 14,000 | 14,000 | |||||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Senior Living Communities Held Under Master Leases Set to Terminate | Senior Housing Properties Trust Transaction Agreement | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Carrying value | (2,990,000) | (2,990,000) | (2,990,000) | |||||||||||||
Cash and cash equivalents | 5,000 | 5,000 | 5,000 | |||||||||||||
Prepaid expense and other assets | 4,545,000 | 4,545,000 | 4,545,000 | |||||||||||||
Intangible assets | 191,000 | 191,000 | 191,000 | |||||||||||||
Accrued real estate taxes, current | 10,615,000 | 10,615,000 | 10,615,000 | |||||||||||||
Security deposit liability and continuing care contracts, current | 1,929,000 | 1,929,000 | 1,929,000 | |||||||||||||
Operating income (loss) generated by the leased senior living communities | 46,316,000 | (27,229,000) | ||||||||||||||
Assets held for sale | 4,813,000 | 4,813,000 | 4,813,000 | |||||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Senior Living Communities Held Under Master Leases Set to Terminate | January 2020 Sale of Skilled Nursing Facilities in Colorado and Wyoming | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Carrying value | (549,000) | (549,000) | (549,000) | |||||||||||||
Prepaid expense and other assets | 92,000 | 92,000 | 92,000 | |||||||||||||
Accrued real estate taxes, current | 250,000 | 250,000 | 250,000 | |||||||||||||
Accrued compensation and benefits | 505,000 | 505,000 | 505,000 | |||||||||||||
Operating income (loss) generated by the leased senior living communities | 1,062,000 | 5,697,000 | ||||||||||||||
Assets held for sale | 114,000 | 114,000 | 114,000 | |||||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Senior Living Communities Held Under Master Leases Set to Terminate | December 2019 Sale of Skilled Nursing Facilities in Nebraska | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Carrying value | (164,000) | (164,000) | (164,000) | |||||||||||||
Prepaid expense and other assets | 16,000 | 16,000 | 16,000 | |||||||||||||
Accrued real estate taxes, current | 143,000 | 143,000 | 143,000 | |||||||||||||
Accrued compensation and benefits | 41,000 | 41,000 | 41,000 | |||||||||||||
Operating income (loss) generated by the leased senior living communities | 260,000 | (36,000) | ||||||||||||||
Assets held for sale | 4,000 | $ 4,000 | 4,000 | |||||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Proceeds from sale communities | $ 29,500,000 | |||||||||||||||
Number of properties sold | property | 18 | |||||||||||||||
Loss (gain) on sale of senior living communities | $ (749,000) | |||||||||||||||
Number of properties sold with liabilities | property | 15 | |||||||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Senior Housing Properties Trust Transaction Agreement | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Number of leases | lease | 5 | |||||||||||||||
Assets held for sale | 49,155,000 | |||||||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | December 2019 Sale of Skilled Nursing Facilities in Nebraska | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Related party transaction, number of properties sold | property | 1 | |||||||||||||||
Proceeds from sale communities | $ 5,600,000 | |||||||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | April 2019 Sale of Skilled Nursing Facilities in Wisconsin | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Related party transaction, number of properties sold | property | 2 | |||||||||||||||
Proceeds from sale communities | $ 11,000,000 | |||||||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | June 2018 Sale of Skilled Nursing Facility in California | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Number of properties sold | property | 1 | |||||||||||||||
Line of Credit | DHC Credit Facility | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Maximum borrowing capacity | $ 25,000,000 | |||||||||||||||
Line of Credit | DHC Credit Facility | Senior Housing Properties Trust Transaction Agreement | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Maximum borrowing capacity | 25,000,000 | 25,000,000 | $ 25,000,000 | |||||||||||||
Subsequent Event | Private Placement | Senior Housing Properties Trust Transaction Agreement | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Number of shares sold (in shares) | shares | 26,387,007 | |||||||||||||||
Issuance of common stock | $ 75,000,000 | |||||||||||||||
Subsequent Event | Private Placement | DHC Shareholders | Senior Housing Properties Trust Transaction Agreement | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Number of shares sold (in shares) | shares | 16,118,849 | |||||||||||||||
Subsequent Event | Private Placement | DHC | Senior Housing Properties Trust Transaction Agreement | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Number of shares sold (in shares) | shares | 10,268,158 | |||||||||||||||
Subsequent Event | Disposal Group, Disposed of by Sale, Not Discontinued Operations | February 2020 Sale Of Independent Living Community | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Related party transaction, number of properties sold | property | 1 | |||||||||||||||
Proceeds from sale communities | $ 2,000,000 | |||||||||||||||
Subsequent Event | Disposal Group, Disposed of by Sale, Not Discontinued Operations | January 2020 Sale of Skilled Nursing Facilities in Colorado and Wyoming | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Related party transaction, number of properties sold | property | 9 | |||||||||||||||
Proceeds from sale communities | $ 74,000,000 | |||||||||||||||
Management Fees | D & Yonkers LLC | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Revenues | 282,000 | 279,000 | ||||||||||||||
Management Fees | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Revenues | 15,045,000 | 14,146,000 | ||||||||||||||
Incentive Fees | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Revenues | 0 | 36,000 | ||||||||||||||
Capital Expenditure Projects | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Revenues | 842,000 | 684,000 | ||||||||||||||
Rehabilitation Services | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Revenues | 5,920,000 | $ 6,442,000 | ||||||||||||||
Headquarters | ABP Trust | DHC | ||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||
Lease liability | $ 1,446,000 | $ 1,446,000 | $ 1,446,000 | |||||||||||||
IBR | 4.40% | 4.40% | 4.40% |
Leases with DHC and Healthpea_4
Leases with DHC and Healthpeak Properties, Inc and Management Agreements with DHC - Summary of Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)propertyterm | |
Operating Leased Assets [Line Items] | |
Number of Properties | property | 170 |
Total minimum annual rent payable | $ 132,638 |
2020 | 2,910 |
2021 | 2,959 |
2022 | 3,023 |
2023 | 3,088 |
2024 | 3,150 |
Thereafter | 7,590 |
Total | 22,720 |
Lease liability | $ 21,097 |
DHC Lease No. 1 (December 31, 2024) | |
Operating Leased Assets [Line Items] | |
Number of Properties | property | 73 |
Number of renewal options | term | 2 |
Renewal Term | 15 years |
Total minimum annual rent payable | $ 31,226 |
2020 | 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total | $ 0 |
IBR | 0.00% |
Lease liability | $ 0 |
DHC Lease No. 2 (June 30, 2026) | |
Operating Leased Assets [Line Items] | |
Number of Properties | property | 39 |
Number of renewal options | term | 2 |
Renewal Term | 10 years |
Total minimum annual rent payable | $ 39,318 |
2020 | 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total | $ 0 |
IBR | 0.00% |
Lease liability | $ 0 |
DHC Lease No. 3 (December 31, 2028) | |
Operating Leased Assets [Line Items] | |
Number of Properties | property | 17 |
Number of renewal options | term | 2 |
Renewal Term | 15 years |
Total minimum annual rent payable | $ 26,679 |
2020 | 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total | $ 0 |
IBR | 0.00% |
Lease liability | $ 0 |
DHC Lease No. 4 (April 30, 2032) | |
Operating Leased Assets [Line Items] | |
Number of Properties | property | 28 |
Number of renewal options | term | 2 |
Renewal Term | 15 years |
Total minimum annual rent payable | $ 25,641 |
2020 | 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total | $ 0 |
IBR | 0.00% |
Lease liability | $ 0 |
DHC Lease No. 5 (December 31, 2028) | |
Operating Leased Assets [Line Items] | |
Number of Properties | property | 9 |
Number of renewal options | term | 2 |
Renewal Term | 15 years |
Total minimum annual rent payable | $ 6,921 |
2020 | 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total | $ 0 |
IBR | 0.00% |
Lease liability | $ 0 |
Properties Under PEAK Lease | |
Operating Leased Assets [Line Items] | |
Number of Properties | property | 4 |
Number of renewal options | term | 1 |
Renewal Term | 10 years |
Total minimum annual rent payable | $ 2,853 |
2020 | 2,910 |
2021 | 2,959 |
2022 | 3,023 |
2023 | 3,088 |
2024 | 3,150 |
Thereafter | 7,590 |
Total | $ 22,720 |
IBR | 4.60% |
Lease liability | $ 21,097 |
DHC | ABP Trust | Headquarters | |
Operating Leased Assets [Line Items] | |
IBR | 4.40% |
Lease liability | $ 1,446 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Shareholders' Equity | |||
Weighted average amortization period stock based compensation | 2 years | ||
Directors, officers and others | |||
Shareholders' Equity | |||
Common shares issued (in shares) | 85,800 | 47,100 | |
Aggregate market value of shares issued | $ 376 | $ 227 | |
Weighted average share price (in dollars per share) | $ 4.57 | $ 4.80 | |
Share Award Plans | |||
Shareholders' Equity | |||
Unvested common shares (in shares) | 96,482 | 81,690 | |
Share based compensation | $ 438 | $ 615 | |
Estimated future stock based compensation expense | $ 569 | ||
Remaining common shares available for issuance (in shares) | 176,460 | ||
Share Award Plans | Officers and employees | |||
Shareholders' Equity | |||
Shares acquired (in shares) | 5,724 | 3,049 | |
Aggregare acquired price | $ 26 | $ 11 | |
Tranche One | Officers and employees | |||
Shareholders' Equity | |||
Award vesting percentage | 20.00% | ||
Tranche Two | Officers and employees | |||
Shareholders' Equity | |||
Award vesting percentage | 20.00% | ||
Tranche Three | Officers and employees | |||
Shareholders' Equity | |||
Award vesting percentage | 20.00% | ||
Tranche Four | Officers and employees | |||
Shareholders' Equity | |||
Award vesting percentage | 20.00% | ||
Tranche Five | Officers and employees | |||
Shareholders' Equity | |||
Award vesting percentage | 20.00% | ||
Subsequent Event | DHC | Senior Housing Properties Trust Transaction Agreement | Private Placement | |||
Shareholders' Equity | |||
Number of shares sold (in shares) | 26,387,007 | ||
Additional consideration from share issuances | $ 75,000 | ||
Subsequent Event | DHC | DHC | Senior Housing Properties Trust Transaction Agreement | Private Placement | |||
Shareholders' Equity | |||
Number of shares sold (in shares) | 10,268,158 | ||
Subsequent Event | DHC Shareholders | DHC | Senior Housing Properties Trust Transaction Agreement | Private Placement | |||
Shareholders' Equity | |||
Number of shares sold (in shares) | 16,118,849 |
Dispositions (Details)
Dispositions (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Sep. 30, 2019property | Jun. 30, 2018USD ($)communityliving_unitproperty | Feb. 28, 2018USD ($)community | Jan. 31, 2018community | Dec. 31, 2019USD ($)property | Dec. 31, 2018USD ($)community | Jan. 30, 2018USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain (loss) on sale of senior living communities | $ (856) | $ 7,131 | |||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of properties sold | property | 18 | ||||||
Sales price, excluding closing costs | $ 29,500 | ||||||
Gain (loss) on sale of senior living communities | $ (749) | ||||||
Number of properties sold with liabilities | property | 15 | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | 2017 Transaction Agreement | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of communities disposed | community | 2 | 1 | 1 | ||||
Consideration | $ 23,300 | $ 22,250 | $ 19,667 | ||||
Debt transferred | 16,588 | $ 16,776 | |||||
Gain (loss) on disposal | 7,231 | ||||||
Income from operations | 178 | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | June 2018 Sale of Skilled Nursing Facility in California | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Consideration | $ 6,500 | ||||||
Gain (loss) on disposal | (102) | ||||||
Income from operations | $ (320) | ||||||
Number of living units disposed | living_unit | 97 | ||||||
Change in rent, percent | (10.00%) | ||||||
Number of properties sold | property | 1 | ||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | 2017 Transaction Agreement | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of communities disposed | community | 4 | ||||||
Senior living communities | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of properties sold | property | 18 | 18 | |||||
Number of properties sold with liabilities | property | 15 | ||||||
Senior Housing Properties Trust Transaction Agreement | DHC | Disposal Group, Held-for-sale, Not Discontinued Operations | Senior Living Communities Held Under Master Leases Set to Terminate | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Operating income (loss) generated by the leased senior living communities | $ 46,316 | $ (27,229) | |||||
Senior Housing Properties Trust Transaction Agreement | DHC | Senior living communities | Disposal Group, Held-for-sale, Not Discontinued Operations | Senior Living Communities Held Under Master Leases Set to Terminate | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Operating income (loss) generated by the leased senior living communities | $ (3,443) | $ (2,825) |
Legal Proceedings and Claims (D
Legal Proceedings and Claims (Details) - Office of the Inspector General | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($)property | Dec. 31, 2018USD ($) | |
Loss Contingencies [Line Items] | |||
Estimated minimum loss | $ 0 | ||
Medicare Billing Voluntary Disclosure | |||
Loss Contingencies [Line Items] | |||
Litigation settlement | $ 1,139,000 | ||
Litigation settlement expense | $ 193,000 | ||
Senior living communities | DHC | SNF, California | |||
Loss Contingencies [Line Items] | |||
Number of potentially inadequate documents | property | 1 |
Business Management Agreement_2
Business Management Agreement with RMR LLC - Narrative (Details) - RMR LLC - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Business Management Agreement [Line Items] | ||
Business management fee (as a percent) | 0.60% | |
Business management fees | $ 9,090 | $ 9,059 |
Renewal term | 1 year | |
RMR LLC notice period for termination of agreement | 120 days | |
Company notice period for termination of agreement | 60 days | |
Termination fee (as a percent of base management fee) | 287.50% | |
Management agreement, termination fee, base management fee period | 24 months | |
Reimbursable expenses, internal audit costs | $ 284 | $ 236 |
Transition service period | 120 days |
Related Person Transactions - N
Related Person Transactions - Narrative (Details) $ in Thousands | Oct. 02, 2016shares | Jan. 31, 2020USD ($) | Dec. 31, 2019USD ($)communityproperty | Jun. 30, 2019USD ($) | Jan. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($)community | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2019USD ($)communitypropertyshares | Dec. 31, 2018USD ($)communityshares | Jan. 01, 2020shares |
Related person transactions | ||||||||||||
Number of real estate properties leased | property | 170 | 170 | ||||||||||
Utilities and real estate taxes | $ 209,150 | |||||||||||
Right of use assets | $ 20,855 | $ 20,855 | ||||||||||
Lease liability | 21,097 | 21,097 | ||||||||||
Equity investment of an investee | $ 298 | $ 8,633 | 298 | 8,633 | ||||||||
Income (loss) arising from investment | 575 | 516 | ||||||||||
Other comprehensive income (loss) | 90 | (68) | ||||||||||
Distributions from equity investment | $ 9,000 | $ 0 | ||||||||||
RMR LLC | ||||||||||||
Related person transactions | ||||||||||||
Share awards issued (in shares) | shares | 17,150 | 7,090 | ||||||||||
Value of share awards issued | $ 77 | $ 25 | ||||||||||
Payments for directors' and officers' insurance premiums | $ 185 | $ 152 | ||||||||||
DHC | ||||||||||||
Related person transactions | ||||||||||||
Minimum percentage of ownership interest beyond which consent of related party required | 9.80% | 9.80% | ||||||||||
Minimum percentage of ownership interest of voting stock above which the option to cancel all the lease rights exist | 9.80% | 9.80% | ||||||||||
Number of communities managed | community | 78 | 76 | ||||||||||
ABP Trust | ||||||||||||
Related person transactions | ||||||||||||
Standstill and lock-up agreement period | 10 years | |||||||||||
Maximum shares to be acquired under standstill and lock-up agreement (in shares) | shares | 1,800,000 | |||||||||||
Utilities and real estate taxes | $ 1,874 | $ 1,715 | ||||||||||
AIC | ||||||||||||
Related person transactions | ||||||||||||
Property insurance premium | $ 3,144 | $ 4,329 | ||||||||||
Equity investment of an investee | $ 298 | 8,633 | 298 | 8,633 | ||||||||
Income (loss) arising from investment | 575 | 516 | ||||||||||
Other comprehensive income (loss) | $ 90 | $ (68) | ||||||||||
Officers and employees | Share Award Plans | ||||||||||||
Related person transactions | ||||||||||||
Shares acquired (in shares) | shares | 5,724 | 3,049 | ||||||||||
Officers and employees | Share Award Plans | RMR LLC | ||||||||||||
Related person transactions | ||||||||||||
Shares acquired (in shares) | shares | 5,724 | |||||||||||
Severance, Cash Payment | Chief Executive Officer | ||||||||||||
Related person transactions | ||||||||||||
Payments for one-time employee termination benefits | $ 600 | |||||||||||
Severance, Cash Payment | Chief Financial Officer | ||||||||||||
Related person transactions | ||||||||||||
Payments for one-time employee termination benefits | $ 260 | |||||||||||
Severance, Cash Payment | Senior Vice President | ||||||||||||
Related person transactions | ||||||||||||
Payments for one-time employee termination benefits | $ 510 | |||||||||||
Severance | Chief Executive Officer | ||||||||||||
Related person transactions | ||||||||||||
Severance costs | 1,160 | |||||||||||
Severance | Chief Financial Officer | ||||||||||||
Related person transactions | ||||||||||||
Amount recorded for one-time employee termination benefits | $ 581 | |||||||||||
Severance | Senior Vice President | Senior Vice President | ||||||||||||
Related person transactions | ||||||||||||
Amount recorded for one-time employee termination benefits | $ 510 | |||||||||||
Severance | Chief Executive Officer | ||||||||||||
Related person transactions | ||||||||||||
Amount recorded for one-time employee termination benefits | $ 1,160 | |||||||||||
Severance, Release Payments | Chief Executive Officer | ||||||||||||
Related person transactions | ||||||||||||
Payments for one-time employee termination benefits | $ 330 | |||||||||||
Severance, Transition Payments | Chief Executive Officer | ||||||||||||
Related person transactions | ||||||||||||
Payments for one-time employee termination benefits | 96 | |||||||||||
ABP Trust | DHC | ||||||||||||
Related person transactions | ||||||||||||
Right of use assets | 1,446 | 1,446 | ||||||||||
Headquarters | ABP Trust | DHC | ||||||||||||
Related person transactions | ||||||||||||
Lease liability | $ 1,446 | $ 1,446 | ||||||||||
IBR | 4.40% | 4.40% | ||||||||||
Subsequent Event | DHC | ||||||||||||
Related person transactions | ||||||||||||
Percentage of outstanding common shares owned | 33.90% | |||||||||||
Subsequent Event | Severance, Cash Payment | Chief Financial Officer | ||||||||||||
Related person transactions | ||||||||||||
Payments for one-time employee termination benefits | $ 260 | |||||||||||
Subsequent Event | Severance, Release Payments | Chief Executive Officer | ||||||||||||
Related person transactions | ||||||||||||
Payments for one-time employee termination benefits | 110 | |||||||||||
Subsequent Event | Severance, Transition Payments | Senior Vice President | ||||||||||||
Related person transactions | ||||||||||||
Payments for one-time employee termination benefits | $ 56 | |||||||||||
Subsequent Event | DHC | DHC | ||||||||||||
Related person transactions | ||||||||||||
Number of shares owned (in shares) | shares | 10,691,658 | |||||||||||
Subsequent Event | ABP Trust | DHC | ||||||||||||
Related person transactions | ||||||||||||
Percentage of outstanding common shares owned | 6.30% | |||||||||||
AIC | ||||||||||||
Related person transactions | ||||||||||||
Equity investment of an investee | $ 6,034 | $ 6,034 | ||||||||||
Distributions from equity investment | $ 9,000 | |||||||||||
Senior living communities | ||||||||||||
Related person transactions | ||||||||||||
Number of real estate properties leased | community | 170 | 170 | ||||||||||
Number of properties managed | community | 78 | 78 | ||||||||||
Senior living communities | DHC | ||||||||||||
Related person transactions | ||||||||||||
Number of real estate properties leased | community | 166 | 184 | 166 | 184 | ||||||||
Number of communities managed | community | 78 | 76 | ||||||||||
Number of properties managed | community | 244 | 244 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Benefit Plans | ||
Expenses for plans including contributions | $ 1,155 | $ 1,332 |
Senior living wages and benefits | ||
Employee Benefit Plans | ||
Expenses for plans including contributions | 1,016 | 1,155 |
General and Administrative Expenses | ||
Employee Benefit Plans | ||
Expenses for plans including contributions | $ 139 | $ 177 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Sep. 29, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | |||||
Common stock | $ 52 | $ 51 | |||
Common stock, restructuring transaction adjustment | 264 | ||||
Additional paid in capital | 362,450 | $ 362,012 | |||
Additional paid in capital, restructuring transaction adjustment | $ 97,634 | ||||
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.10 | $ 0.01 | |
Senior Housing Properties Trust Transaction Agreement | Private Placement | DHC | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Number of shares sold (in shares) | 26,387,007 | ||||
Pro Forma | |||||
Subsequent Event [Line Items] | |||||
Common stock | $ 316 | ||||
Additional paid in capital | $ 460,084 |
Uncategorized Items - a12312019
Label | Element | Value |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 25,239,000 |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 21,746,000 |