Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 04, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Brookdale Senior Living Inc. | |
Entity Central Index Key | 1,332,349 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 187,572,373 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 335,412 | $ 222,647 |
Marketable securities | 174,649 | 291,796 |
Cash and escrow deposits – restricted | 32,393 | 37,189 |
Accounts receivable, net | 125,473 | 128,961 |
Assets held for sale | 88,505 | 106,435 |
Prepaid expenses and other current assets, net | 135,639 | 114,844 |
Total current assets | 892,071 | 901,872 |
Property, plant and equipment and leasehold intangibles, net | 5,775,496 | 5,852,145 |
Cash and escrow deposits – restricted | 27,756 | 22,710 |
Investment in unconsolidated ventures | 77,839 | 129,794 |
Goodwill | 154,131 | 505,783 |
Other intangible assets, net | 60,659 | 67,977 |
Other assets, net | 199,476 | 195,168 |
Total assets | 7,187,428 | 7,675,449 |
Current liabilities | ||
Current portion of long-term debt | 535,470 | 495,413 |
Current portion of capital and financing lease obligations | 69,536 | 107,088 |
Trade accounts payable | 73,358 | 91,825 |
Accrued expenses | 309,998 | 329,966 |
Refundable entrance fees and deferred revenue | 72,954 | 68,358 |
Tenant security deposits | 2,989 | 3,126 |
Total current liabilities | 1,064,305 | 1,095,776 |
Long-term debt, less current portion | 3,342,840 | 3,375,324 |
Capital and financing lease obligations, less current portion | 1,187,549 | 1,164,466 |
Deferred liabilities | 213,912 | 224,304 |
Deferred tax liability | 85,776 | 70,644 |
Other liabilities | 213,485 | 214,644 |
Total liabilities | 6,107,867 | 6,145,158 |
Preferred stock, $0.01 par value, 50,000,000 shares authorized at March 31, 2018 and December 31, 2017; no shares issued and outstanding | 0 | 0 |
Common stock, $0.01 par value, 400,000,000 shares authorized at March 31, 2018 and December 31, 2017; 196,976,099 and 194,454,329 shares issued and 193,797,698 and 191,275,928 shares outstanding (including 6,230,895 and 4,770,097 unvested restricted shares), respectively | 1,938 | 1,913 |
Additional paid-in-capital | 4,132,747 | 4,126,549 |
Treasury stock, at cost; 3,178,401 shares at March 31, 2018 and December 31, 2017 | (56,440) | (56,440) |
Accumulated deficit | (2,998,201) | (2,541,294) |
Total Brookdale Senior Living Inc. stockholders' equity | 1,080,044 | 1,530,728 |
Noncontrolling interest | (483) | (437) |
Total equity | 1,079,561 | 1,530,291 |
Total liabilities and equity | $ 7,187,428 | $ 7,675,449 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Equity, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 196,976,099 | 194,454,329 |
Common stock, shares outstanding (in shares) | 193,797,698 | 191,275,928 |
Treasury stock, shares (in shares) | 3,178,401 | 3,178,401 |
Unvested Restricted Stock [Member] | ||
Equity, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Common stock, shares outstanding (in shares) | 6,230,895 | 4,770,097 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | ||
Resident fees | $ 906,266 | $ 1,016,927 |
Management fees | 18,681 | 15,894 |
Reimbursed costs incurred on behalf of managed communities | 262,287 | 183,945 |
Total revenue | 1,187,234 | 1,216,766 |
Expense | ||
Facility operating expense (excluding depreciation and amortization of $103,168 and $114,879, respectively) | 632,325 | 674,542 |
General and administrative expense (including non-cash stock-based compensation expense of $8,406 and $7,774, respectively) | 76,710 | 65,560 |
Transaction costs | 4,725 | 7,593 |
Facility lease expense | 80,400 | 88,807 |
Depreciation and amortization | 114,255 | 127,487 |
Goodwill and asset impairment | 430,363 | 20,706 |
Costs incurred on behalf of managed communities | 262,287 | 183,945 |
Total operating expense | 1,601,065 | 1,168,640 |
Income (loss) from operations | (413,831) | 48,126 |
Interest income | 2,983 | 631 |
Interest expense: | ||
Debt | (45,727) | (40,573) |
Capital and financing lease obligations | (22,931) | (49,859) |
Amortization of deferred financing costs and debt premium (discount) | (3,956) | (2,591) |
Change in fair value of derivatives | 74 | (46) |
Debt modification and extinguishment costs | (35) | (61) |
Equity in (loss) earnings of unconsolidated ventures | (4,243) | 981 |
Gain (loss) on sale of assets, net | 43,431 | (603) |
Other non-operating income | 2,586 | 1,662 |
Income (loss) before income taxes | (441,649) | (42,333) |
Provision for income taxes | (15,585) | (84,028) |
Net income (loss) | (457,234) | (126,361) |
Net (income) loss attributable to noncontrolling interest | 46 | 57 |
Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders | $ (457,188) | $ (126,304) |
Basic and diluted net income (loss) per share attributable to Brookdale Senior Living Inc. common stockholders (in dollars per share) | $ (2.45) | $ (0.68) |
Weighted average shares used in computing basic and diluted net income (loss) per share (in shares) | 186,880 | 185,689 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Depreciation and amortization | $ 103,168 | $ 114,879 |
Non-cash stock-based compensation expense | $ 8,406 | $ 7,774 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - 3 months ended Mar. 31, 2018 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Stockholders' Equity [Member] | Noncontrolling Interest [Member] |
Balances at beginning of period at Dec. 31, 2017 | $ 1,530,291 | $ 1,913 | $ 4,126,549 | $ (56,440) | $ (2,541,294) | $ 1,530,728 | $ (437) |
Balances at beginning of period (in shares) at Dec. 31, 2017 | 191,275,928 | 191,276,000 | |||||
Compensation expense related to restricted stock grants | $ 8,406 | 8,406 | 8,406 | ||||
Net income (loss) | (457,234) | (457,188) | (457,188) | (46) | |||
Issuance of common stock under Associate Stock Purchase Plan | 372 | $ 1 | 371 | 372 | |||
Issuance of common stock under Associate Stock Purchase Plan (in shares) | 62,000 | ||||||
Restricted stock, net | $ 28 | (28) | |||||
Restricted stock, net (in shares) | 2,841,000 | ||||||
Shares withheld for employee taxes | (2,618) | $ (4) | (2,614) | (2,618) | |||
Shares withheld for employee taxes (in shares) | (381,000) | ||||||
Other | 344 | 63 | 281 | 344 | |||
Balances at end of period at Mar. 31, 2018 | $ 1,079,561 | $ 1,938 | $ 4,132,747 | $ (56,440) | $ (2,998,201) | $ 1,080,044 | $ (483) |
Balances at end of period (in shares) at Mar. 31, 2018 | 193,797,698 | 193,798,000 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash Flows from Operating Activities | ||
Net income (loss) | $ (457,234) | $ (126,361) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Debt modification and extinguishment costs | 35 | 61 |
Depreciation and amortization, net | 118,211 | 130,078 |
Goodwill and asset impairment | 430,363 | 20,706 |
Equity in loss (earnings) of unconsolidated ventures | 4,243 | (981) |
Distributions from unconsolidated ventures from cumulative share of net earnings | 408 | 439 |
Amortization of deferred gain | (1,090) | (1,093) |
Amortization of entrance fees | (501) | (1,198) |
Proceeds from deferred entrance fee revenue | 1,109 | 1,927 |
Deferred income tax provision | 15,037 | 83,310 |
Straight-line lease (income) expense | (6,165) | (3,007) |
Change in fair value of derivatives | (74) | 46 |
(Gain) loss on sale of assets, net | (43,431) | 603 |
Non-cash stock-based compensation expense | 8,406 | 7,774 |
Non-cash interest expense on financing lease obligations | 3,383 | 6,156 |
Amortization of (above) below market lease, net | (1,938) | (1,697) |
Non-cash management contract termination fee | (2,242) | 0 |
Other | (156) | (1,398) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 3,488 | 3,556 |
Prepaid expenses and other assets, net | (24,807) | (8,630) |
Accounts payable and accrued expenses | (21,370) | (51,627) |
Tenant refundable fees and security deposits | (137) | (297) |
Deferred revenue | 12,426 | 8,406 |
Net cash provided by operating activities | 37,964 | 66,773 |
Cash Flows from Investing Activities | ||
Change in lease security deposits and lease acquisition deposits, net | (2,015) | (420) |
Sale of marketable securities, net | 118,273 | 0 |
Additions to property, plant and equipment and leasehold intangibles, net | (66,592) | (48,928) |
Acquisition of assets, net of related payables and cash received | (27,330) | 0 |
Investment in unconsolidated ventures | (8,434) | (185,971) |
Distributions received from unconsolidated ventures | 2,037 | 1,807 |
Proceeds from sale of assets, net | 75,060 | 31,675 |
Property insurance proceeds | 156 | 1,398 |
Other | 0 | 696 |
Net cash provided by (used in) investing activities | 91,155 | (199,743) |
Cash Flows from Financing Activities | ||
Proceeds from debt | 30,168 | 34,455 |
Repayment of debt and capital and financing lease obligations | (44,001) | (52,273) |
Payment of financing costs, net of related payables | (248) | (328) |
Proceeds from refundable entrance fees, net of refunds | 223 | (902) |
Payments of employee taxes for withheld shares | (2,618) | (5,112) |
Other | 372 | 599 |
Net cash used in financing activities | (16,104) | (23,561) |
Net increase (decrease) in cash and cash equivalents and restricted cash and escrow deposits | 113,015 | (156,531) |
Cash and cash equivalents and restricted cash and escrow deposits at beginning of period | 282,546 | 277,322 |
Cash and cash equivalents and restricted cash and escrow deposits at end of period | $ 395,561 | $ 120,791 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Brookdale Senior Living Inc. ("Brookdale" or the "Company") is the leading operator of senior living communities throughout the United States. The Company is committed to providing senior living solutions primarily within properties that are designed, purpose-built and operated to provide quality service, care and living accommodations for residents. The Company operates independent living, assisted living and dementia-care communities and continuing care retirement centers ("CCRCs"). Through its ancillary services programs, the Company also offers a range of home health, hospice, and outpatient therapy services to residents of many of its communities and to seniors living outside its communities. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("US GAAP") for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q. In the opinion of management, these financial statements include all adjustments necessary to present fairly the financial position, results of operations and cash flows of the Company as of March 31, 2018 , and for all periods presented. The condensed consolidated financial statements are prepared on the accrual basis of accounting. All adjustments made have been of a normal and recurring nature. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The Company believes that the disclosures included are adequate and provide a fair presentation of interim period results. Interim financial statements are not necessarily indicative of the financial position or operating results for an entire year. It is suggested that these interim financial statements be read in conjunction with the audited financial statements and the notes thereto, together with management's discussion and analysis of financial condition and results of operations, included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC on February 22, 2018. Except for the changes for the impact of the recently adopted accounting pronouncements discussed in this Note, the Company has consistently applied its accounting policies to all periods presented in these condensed consolidated financial statements. Principles of Consolidation The condensed consolidated financial statements include the accounts of Brookdale and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated. Investments in affiliated companies that the Company does not control, but has the ability to exercise significant influence over governance and operation, are accounted for by the equity method. The ownership interest of consolidated entities not wholly-owned by the Company are presented as noncontrolling interests in the accompanying condensed consolidated financial statements. Noncontrolling interest represents the share of consolidated entities owned by third parties. Noncontrolling interest is adjusted for the noncontrolling holder's share of additional contributions, distributions and the proportionate share of the net income or loss of each respective entity. The Company continually evaluates its potential variable interest entity ("VIE") relationships under certain criteria as provided for in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 810, Consolidation ("ASC 810"). ASC 810 broadly defines a VIE as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity's activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity's activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The Company performs this analysis on an ongoing basis and consolidates any VIEs for which the Company is determined to be the primary beneficiary, as determined by the Company's power to direct the VIE's activities and the obligation to absorb its losses or the right to receive its benefits, which are potentially significant to the VIE. Refer to Note 14 for more information about the Company's VIE relationships. Revenue Recognition Resident Fees Resident fee revenue is reported at the amount that reflects the consideration the Company expects to receive in exchange for the services provided. These amounts are due from residents or third-party payors and include variable consideration for retroactive adjustments, if any, under reimbursement programs. Performance obligations are determined based on the nature of the services provided. Resident fee revenue is recognized as performance obligations are satisfied. Under the Company's senior living residency agreements, which are generally for a term of 30 days to one year, the Company provides senior living services to residents for a stated daily or monthly fee. The Company recognizes revenue for housing services under residency agreements for independent living and assisted living services in accordance with the provisions of ASC Topic 840, Leases ("ASC 840"). The Company recognizes revenue for assisted living care, skilled nursing residency and inpatient therapy services, ancillary services, and personalized health services in accordance with the provisions of ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"). The Company has determined that the senior living services included under the daily or monthly fee have the same timing and pattern of transfer and are a series of distinct services that are considered one performance obligation which is satisfied over time. Through its ancillary services programs, the Company enters into contracts to provide home health, hospice, and outpatient therapy services. The Company recognizes revenue for home health, hospice, and outpatient therapy services in accordance with the provisions of ASC 606. Each service provided under the contract is capable of being distinct, and thus, the services are considered individual and separate performance obligations which are satisfied as services are provided and revenue is recognized as services are provided. The Company receives revenue for services under various third-party payor programs which include Medicare, Medicaid, and other third-party payors. Settlements with third-party payors for retroactive adjustments due to audits, reviews or investigations are included in the determination of the estimated transaction price for providing services. The Company estimates the transaction price based on the terms of the contract with the payor, correspondence with the payor and historical payment trends, and retroactive adjustments are recognized in future periods as final settlements are determined. Management Services The Company manages certain communities under contracts which provide periodic management fee payments to the Company. Management fees are generally determined by an agreed upon percentage of gross revenues (as defined in the management agreement). Certain management contracts also provide for an annual incentive fee to be paid to the Company upon achievement of certain metrics identified in the contract. The Company recognizes revenue for community management services in accordance with the provisions of ASC 606. Although there are various management and operational activities performed by the Company under the contracts, the Company has determined that all community operations management activities are a single performance obligation, which is satisfied over time as the services are rendered. The Company estimates the amount of incentive fee revenue expected to be earned, if any, during the annual contract period and revenue is recognized as services are provided to the owners of the communities. The Company’s estimate of the transaction price for management services also includes the amount of reimbursement due from the owners of the communities for services provided and related costs incurred. Such revenue is included in "reimbursed costs incurred on behalf of managed communities" on the condensed consolidated statements of operations. The related costs are included in "costs incurred on behalf of managed communities" on the condensed consolidated statements of operations. Gain on Sale of Assets The Company regularly enters into real estate transactions which may include the disposal of certain communities, including the associated real estate. The Company recognizes income from real estate sales under ASC 610-20, Other Income - Gains and Losses from Derecognition of Nonfinancial Assets (“ASC 610-20”). Under ASC 610-20, income is recognized when the transfer of control occurs and the Company applies the five-step model for recognition to determine the amount of income to recognize for all real estate sales. The Company accounts for the sale of equity method investments under ASC 860, Transfers and Servicing (“ASC 860”). Under ASC 860, income is recognized when the transfer of control occurs and the Company has no continuing involvement with the transferred financial assets. Stock-Based Compensation The Company follows ASC 718, Compensation – Stock Compensation (“ASC 718”) in accounting for its share-based payments. This guidance requires measurement of the cost of employee services received in exchange for stock compensation based on the grant-date fair value of the employee stock awards. This cost is recognized as compensation expense ratably over the employee’s requisite service period. Incremental compensation costs arising from subsequent modifications of awards after the grant date are recognized when incurred. Certain of the Company’s employee stock awards vest only upon the achievement of performance targets. ASC 718 requires recognition of compensation cost only when achievement of performance conditions is considered probable. Consequently, the Company’s determination of the amount of stock compensation expense requires judgment in estimating the probability of achievement of these performance targets. For all share-based awards with graded or cliff vesting other than awards with performance-based vesting conditions, the Company records compensation expense for the entire award on a straight-line basis (or, if applicable, on the accelerated method) over the requisite service period. For graded-vesting awards with performance-based vesting conditions, total compensation expense is recognized over the requisite service period for each separately vesting tranche of the award as if the award is, in substance, multiple awards once the performance target is deemed probable of achievement. Performance goals are evaluated quarterly. If such goals are not ultimately met or it is not probable the goals will be achieved, no compensation expense is recognized and any previously recognized compensation expense is reversed. Income Taxes Income taxes are accounted for under the asset and liability approach which requires recognition of deferred tax assets and liabilities for the differences between the financial reporting and tax basis of assets and liabilities. A valuation allowance reduces deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Fair Value of Financial Instruments ASC 820, Fair Value Measurements and Disclosures establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows: Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Cash and cash equivalents, marketable securities, and cash and escrow deposits – restricted are reflected in the accompanying condensed consolidated balance sheets at amounts considered by management to reasonably approximate fair value due to the short maturity. Marketable Securities Investments in commercial paper and corporate bond instruments with original maturities of greater than three months are classified as marketable securities. Goodwill and Intangible Assets The Company follows ASC 350, Goodwill and Other Intangible Assets , and tests goodwill for impairment annually during the fourth quarter or whenever indicators of impairment arise. Factors the Company considers important in its analysis of whether an indicator of impairment exists include a significant decline in the Company's stock price or market capitalization for a sustained period since the last testing date, significant underperformance relative to historical or projected future operating results and significant negative industry or economic trends. The Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. The quantitative goodwill impairment test is based upon a comparison of the estimated fair value of the reporting unit to which the goodwill has been assigned with the reporting unit's carrying value. The Company is not required to calculate the fair value of a reporting unit unless the Company determines, based on a qualitative assessment, that it is more likely than not that its fair value of a reporting unit is less than its carrying value. The fair values used in the quantitative goodwill impairment test are estimated based upon discounted future cash flow projections for the reporting unit. These cash flow projections are based upon a number of estimates and assumptions such as revenue and expense growth rates, capitalization rates and discount rates. If the quantitative goodwill impairment test results in a reporting unit's carrying value exceeding its estimated fair value, an impairment charge will be recorded based on the difference in accordance with ASU 2017-04, Intangibles - Goodwill and Other , with the impairment charge limited to the amount of goodwill allocated to the reporting unit. Acquired intangible assets are initially valued at fair market value using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over their estimated useful lives and all intangible assets are reviewed for impairment if indicators of impairment arise. The evaluation of impairment for definite-lived intangibles is based upon a comparison of the carrying value of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If estimated future undiscounted net cash flows are less than the carrying value of the asset, then the fair value of the asset is estimated. The impairment expense is determined by comparing the estimated fair value of the intangible asset to its carrying value, with any shortfall from fair value recognized as an expense in the current period. Indefinite-lived intangible assets are not amortized but are tested for impairment annually during the fourth quarter or more frequently as required. The impairment test consists of a comparison of the estimated fair value of the indefinite-lived intangible asset with its carrying value. If the carrying value exceeds its fair value, an impairment loss is recognized for that difference. Amortization of the Company's definite-lived intangible assets is computed using the straight-line method over the estimated useful lives of the assets, which are as follows: Asset Category Estimated Useful Life (in years) Trade names 2 – 5 Other 3 – 9 Self-Insurance Liability Accruals The Company is subject to various legal proceedings and claims that arise in the ordinary course of its business. Although the Company maintains general liability and professional liability insurance policies for its owned, leased and managed communities under a master insurance program, the Company's current policies provide for deductibles for each and every claim. As a result, the Company is, in effect, self-insured for claims that are less than the deductible amounts. In addition, the Company maintains a high deductible workers compensation program and a self-insured employee medical program. The Company reviews the adequacy of its accruals related to these liabilities on an ongoing basis, using historical claims, actuarial valuations, third-party administrator estimates, consultants, advice from legal counsel and industry data, and adjusts accruals periodically. Estimated costs related to these self-insurance programs are accrued based on known claims and projected claims incurred but not yet reported. Subsequent changes in actual experience are monitored, and estimates are updated as information becomes available. During the three months ended March 31, 2018 and 2017 , the Company reduced its estimate for the amount of expected losses for general liability and professional liability and workers compensation claims, based on recent historical claims experience. The reduction in these accrued reserves decreased facility operating expense by $1.2 million and $3.7 million for the three months ended March 31, 2018 and 2017 , respectively. Lease Accounting The Company, as lessee, makes a determination with respect to each of its community leases as to whether each should be accounted for as an operating lease or capital lease. The classification criteria is based on estimates regarding the fair value of the leased community, minimum lease payments, effective cost of funds, the economic life of the community and certain other terms in the lease agreements. In a business combination, the Company assumes the lease classification previously determined by the prior lessee absent a modification, as determined by ASC 840, Leases ("ASC 840"), in the assumed lease agreement. Payments made under operating leases are accounted for in the Company's condensed consolidated statements of operations as lease expense for actual rent paid plus or minus a straight-line adjustment for estimated minimum lease escalators and amortization of deferred gains in situations where sale-leaseback transactions have occurred. For capital and financing lease obligation arrangements, a liability is established on the Company's condensed consolidated balance sheet representing the present value of the future minimum lease payments and a residual value for financing leases and a corresponding long-term asset is recorded in property, plant and equipment and leasehold intangibles in the condensed consolidated balance sheet. For capital lease assets, the asset is depreciated over the remaining lease term unless there is a bargain purchase option in which case the asset is depreciated over the useful life. For financing lease assets, the asset is depreciated over the useful life of the asset. Leasehold improvements purchased during the term of the lease are amortized over the shorter of their economic life or the lease term. All of the Company's leases contain fixed or formula-based rent escalators. To the extent that the escalator increases are tied to a fixed index or rate, lease payments are accounted for on a straight-line basis over the life of the lease. In addition, all rent-free or rent holiday periods are recognized in lease expense on a straight-line basis over the lease term, including the rent holiday period. Sale-leaseback accounting is applied to transactions in which an owned community is sold and leased back from the buyer if certain continuing involvement criteria are met. Under sale-leaseback accounting, the Company removes the community and related liabilities from the condensed consolidated balance sheet. Gain on the sale is deferred and recognized as a reduction of facility lease expense for operating leases and a reduction of interest expense for capital leases. In cases of sale-leaseback transactions in which the Company has continuing involvement, other than normal leasing activities, the Company does not record the sale until such involvement terminates. For leases in which the Company is involved with the construction of a building, the Company accounts for the leases during the construction period under the provisions of ASC 840. If the Company concludes that it has substantively all of the risks of ownership during construction of a leased property and therefore is deemed the owner of the project for accounting purposes, it records an asset and related financing obligation for the amount of total project costs related to construction in progress. Once construction is complete, the Company considers the requirements under ASC Subtopic 840-40. If the arrangement qualifies for sale-leaseback accounting, the Company removes the assets and related liabilities from the condensed consolidated balance sheet. If the arrangement does not qualify for sale-leaseback accounting, the Company continues to amortize the financing obligation and depreciate the assets over the lease term. Recently Adopted Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update ("ASU") 2017-01, Business Combinations: Clarifying the Definition of a Business ("ASU 2017-01"). ASU 2017-01 clarifies the definition of a business to assist companies in determining whether transactions should be accounted for as an asset acquisition or a business combination. Under ASU 2017-01, if substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business and the transaction is accounted for as an asset acquisition. Transaction costs associated with asset acquisitions are capitalized while those associated with business combinations are expensed as incurred. The Company adopted ASU 2017-01 on a prospective basis on January 1, 2018. The Company anticipates that the changes to the definition of a business may result in future acquisitions of real estate, communities or senior housing operating companies being accounted for as asset acquisitions. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash, a consensus of the FASB Emerging Issues Task Force ("ASU 2016-18"). ASU 2016-18 intends to address the diversity in practice that exists in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted ASU 2016-18 on January 1, 2018 and the changes required by ASU 2016-18 were applied retrospectively to all periods presented. The Company has identified that the inclusion of the change in cash and escrow deposits restricted within the retrospective presentation of the statements of cash flows resulted in a $0.6 million decrease to the amount of net cash used in investing activities for the three months ended March 31, 2017 . In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). ASU 2016-15 clarifies how cash receipts and cash payments in certain transactions are presented in the statement of cash flows. Among other clarifications on the classification of certain transactions within the statement of cash flows, the amendments in ASU 2016-15 provide that debt prepayment and debt extinguishment costs will be classified within financing activities within the statement of cash flows. ASU 2016-15 is effective for the Company for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted ASU 2016-15 on January 1, 2018 and the changes in classification within the statement of cash flows were applied retrospectively to all periods presented. The Company's retrospective application resulted in an immaterial increase to the amount of net cash provided by operating activities and an immaterial decrease to the amount of net cash used in financing activities for the three months ended March 31, 2017 . In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. The five step model defined by ASU 2014-09 requires the Company to (i) identify the contracts with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when each performance obligation 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. Additionally, ASU 2014-09 requires enhanced disclosure of revenue arrangements. ASU 2014-09 may be applied retrospectively to each prior period (full retrospective) or retrospectively with the cumulative effect recognized as of the date of initial application (modified retrospective). ASU 2014-09, as amended, is effective for the Company's fiscal year beginning January 1, 2018, and the Company adopted the new standard under the modified retrospective approach. Under the modified retrospective approach, the guidance is applied to the most current period presented, recognizing the cumulative effect of the adoption change as an adjustment to beginning retained earnings. The Company has determined that the adoption of ASU 2014-09 did not result in an adjustment to retained earnings as of January 1, 2018. The Company has determined that there will be a change to the amounts of resident fee revenue and facility operating expense with no net impact to the amount of income from operations, for the impact of implicit price concessions on the estimation of the transaction price. The Company recognized $906.3 million of resident fee revenue and $632.3 million of facility operating expense for the three months ended March 31, 2018 . The impact to resident fee revenue and facility operating expenses as a result of applying ASC 606 was a decrease of $1.1 million for the three months ended March 31, 2018 . The Company has determined that there will not be any significant change to the annual amount of revenue recognized for management fees under the Company’s community management agreements, however, the Company will recognize an estimated amount of incentive fee revenue earlier during the annual contract period. The Company has determined that there will be a change to the amounts presented for revenue recognized for reimbursed costs incurred on behalf of managed communities and reimbursed costs incurred on behalf of managed communities with no net impact to the amount of income from operations, as a result of the combination of all community operations management activities as a single performance obligation for each contract. The Company recognized $262.3 million of revenue for reimbursed costs incurred on behalf of managed communities and $262.3 million of reimbursed costs incurred on behalf of managed communities for the three months ended March 31, 2018 in accordance with ASU 2014-09. The impact to revenue for reimbursed costs incurred on behalf of managed communities and reimbursed costs incurred on behalf of managed communities as a result of applying ASC 606 was an increase of $12.4 million for the three months ended March 31, 2018 . Additionally, real estate sales are within the scope of ASU 2014-09, as amended by ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets ("ASU 2017-05"). ASU 2017-05 clarifies the scope of subtopic 610-20 and adds guidance for partial sales of nonfinancial assets. Under ASU 2014-09 and ASU 2017-05, the income recognition for real estate sales is largely based on the transfer of control versus continuing involvement under the former guidance. As a result, more transactions may qualify as sales of real estate and gains or losses may be recognized sooner. The Company adopted ASU 2014-09, as amended by ASU 2017-5, under the modified retrospective approach as of January 1, 2018 and will apply the five step revenue model to all subsequent sales of real estate. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 replaces the current incurred loss impairment methodology for credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of ASU 2016-13 will have on its condensed consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 amends the existing accounting principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ASU 2016-02 requires a lessee to recognize a right-of-use asset and a lease liability on the balance sheet for most leases. Additionally, ASU 2016-02 makes targeted changes to lessor accounting and requires enhanced disclosure of lease arrangements. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and early adoption is permitted. For the three months ended March 31, 2018 , the Company made cash lease payments of $89.6 million for long-term community leases accounted for as operating leases under ASC 840. The Company anticipates that the adoption of ASU 2016-02 will result in the recognition of material lease liabilities and right-of use assets on the condensed consolidated balance sheet for these community operating leases. The Company is monitoring recent accounting standard setting activities of the FASB and the Company continues to evaluate the impact that the adoption of ASU 2016-02 will have on its condensed consolidated financial statements and disclosures. Reclassifications Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company's condensed consolidated financial position or results of operations. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share ("EPS") is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents. For purposes of calculating basic and diluted earnings per share, vested restricted stock awards are considered outstanding. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if securities or other instruments that are convertible into common stock were exercised or could result in the issuance of common stock. Potentially dilutive common stock equivalents include unvested restricted stock, restricted stock units and convertible debt instruments and warrants. During the three months ended March 31, 2018 and 2017 , the Company reported a consolidated net loss. As a result of the net loss, unvested restricted stock, restricted stock units and convertible debt instruments and warrants were antidilutive for each period and were not included in the computation of diluted weighted average shares. The weighted average restricted stock and restricted stock units excluded from the calculations of diluted net loss per share were 7.0 million and 5.2 million for the three months ended March 31, 2018 and 2017 , respectively. The calculation of diluted weighted average shares excludes the impact of conversion of the outstanding principal amount of $316.3 million of the Company's 2.75% convertible senior notes due June 15, 2018 . As of March 31, 2018 and 2017 , the maximum number of shares issuable upon conversion of the notes is approximately 13.8 million (after giving effect to additional make-whole shares issuable upon conversion in connection with the occurrence of certain events); however it is the Company's current intent and policy to settle the principal amount of the notes in cash upon conversion. The maximum number of shares issuable upon conversion of the notes in excess of the amount of principal that would be settled in cash is approximately 3.0 million . In addition, the calculation of diluted weighted average shares excludes the impact of the exercise of warrants to acquire the Company's common stock. As of March 31, 2018 and 2017 , the number of shares issuable upon exercise of the warrants was approximately 10.8 million . |
Acquisitions, Dispositions and
Acquisitions, Dispositions and Other Significant Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions, Dispositions and Other Significant Transactions | Acquisitions, Dispositions and Other Significant Transactions The Company completed sales of six communities and termination of leases on 105 communities during the period from January 1, 2017 through March 31, 2018 . The Company's condensed consolidated financial statements include resident fee revenue of $2.2 million and $107.6 million and facility operating expenses of $2.1 million and $81.0 million for the communities for the three months ended March 31, 2018 and 2017 , respectively, and cash lease payments of $27.8 million for the three months ended March 31, 2017. The results of operations of the 111 communities were reported in the following segments within the condensed consolidated financial statements prior to their disposition dates: Assisted Living ( 88 communities), Retirement Centers ( ten communities) and CCRCs-Rental ( 13 communities). The closings of the various pending transactions and expected sales of assets described below are subject to the satisfaction of various conditions, including (where applicable) the receipt of regulatory approvals. However, there can be no assurance that the transactions will close, or, if they do, when the actual closings will occur. HCP Master Lease Transaction and RIDEA Ventures Restructuring On November 2, 2017, the Company announced that it had entered into a definitive agreement for a multi-part transaction with HCP, Inc. ("HCP"). As part of such transaction, the Company entered into an Amended and Restated Master Lease and Security Agreement (“Master Lease”) with HCP effective as of November 1, 2017. The components of the multi-part transaction include: • Master Lease Transactions. The Company and HCP amended and restated triple-net leases covering substantially all of the communities the Company leased from HCP as of November 1, 2017 into the Master Lease. Pursuant to the agreements, following March 31, 2018, the Company acquired two communities for an aggregate purchase price of $35.4 million and leases with respect to four communities were terminated, and at the closings such communities were removed from the Master Lease. Pursuant to the Master Lease, 29 additional communities will be removed from the Master Lease on or before November 1, 2018. However, if HCP has not transitioned operations and/or management of such communities to a third party prior to such date, the Company will continue to operate the foregoing 29 communities on an interim basis and such communities will, from and after such time, be reported in the Management Services segment. In addition to the foregoing 35 communities, the Company continues to lease 43 communities pursuant to the terms of the Master Lease, which have the same lease rates and expiration and renewal terms as the applicable prior instruments, except that effective January 1, 2018, the Company received a $2.5 million annual rent reduction for two communities. The Master Lease also provides that the Company may engage in certain change in control and other transactions without the need to obtain HCP's consent, subject to the satisfaction of certain conditions. • RIDEA Ventures Restructuring. Pursuant to the multi-part transaction agreement, HCP acquired the Company's 10% ownership interest in one of the Company's RIDEA ventures with HCP in December 2017 for $32.1 million (for which the Company recognized a $7.2 million gain on sale) and the Company's 10% ownership interest in the remaining RIDEA venture with HCP in March 2018 for $62.3 million (for which the Company recognized a $42.3 million gain on sale). The Company provided management services to 59 communities on behalf of the two RIDEA ventures as of November 1, 2017. Pursuant to the multi-part transaction agreement, the Company acquired one community for an aggregate purchase price of $32.1 million in January 2018 and three communities for an aggregate purchase price of $207.4 million during April 2018 and retained management of 18 of such communities. The amended and restated management agreements for such 18 communities have a term set to expire in 2030 , subject to certain early termination rights. In addition, HCP will be entitled to sell or transition operations and/or management of 37 of such communities. Management agreements for ten such communities were terminated by HCP during the three months ended March 31, 2018 (for which the Company recognized a $2.2 million non-cash management contract termination gain), and the Company expects the termination of management agreements on the remaining 27 communities to occur in stages throughout 2018. The Company financed the foregoing community acquisitions with non-recourse mortgage financing and proceeds from the sales of its ownership interest in the unconsolidated ventures. See Note 9 to the condensed consolidated financial statements for more information regarding the non-recourse mortgage financing. In addition, the Company obtained future annual cash rent reductions and waived management termination fees in the multi-part transaction. As a result, the Company reduced its lease liabilities by $9.7 million for the future annual cash rent reductions and recognized a $9.7 million deferred liability for the consideration received from HCP in advance of the termination of the management agreements for the 37 communities. As a result of the modification of the remaining lease term for communities subject to capital leases, the Company reduced the carrying value of capital lease obligations and assets under capital leases by $145.6 million in 2017. The transactions related to the terminations of the leases for 33 communities in 2018 for accounting purposes are anticipated to result in the Company recording a gain in fiscal 2018 for the amount by which the carrying value of the operating and capital and financing lease obligations for the 33 communities exceed the carrying value of the Company's assets and liabilities under operating and capital and financing leases at the lease termination date. As of March 31, 2018 , the $389.4 million carrying value of the lease obligations for the 33 communities exceed the $341.4 million carrying value of the assets under operating and capital and financing leases by approximately $48.0 million , primarily for 20 communities which were previously subject to sale-leaseback transactions in which the Company was deemed to have continuing involvement for accounting purposes. The results of operations for the 33 communities that have been or will be disposed through lease terminations are reported within the following segments within the condensed consolidated financial statements: Retirement Centers ( five communities), Assisted Living ( 27 communities), and CCRCs-Rental ( one community). With respect to such 33 communities, the Company's condensed consolidated financial statements include resident fee revenue of $35.8 million and $37.3 million , facility operating expenses of $24.5 million and $22.9 million , and cash lease payments of $11.8 million and $12.0 million for the three months ended March 31, 2018 and 2017, respectively. For the 27 managed communities for which the Company's management may be terminated, the Company's condensed consolidated financial statements include management fees of $2.1 million for each of the three months ended March 31, 2018 and 2017 . Formation of Venture with Blackstone On March 29, 2017, the Company and affiliates of Blackstone Real Estate Advisors VIII L.P. (collectively, "Blackstone") formed a venture (the “Blackstone Venture”) that acquired 64 senior housing communities for a purchase price of $1.1 billion . The Company had previously leased the 64 communities from HCP under long-term lease agreements with a remaining average lease term of approximately 12 years. At the closing, the Blackstone Venture purchased the 64 -community portfolio from HCP subject to the existing leases, and the Company contributed its leasehold interests for 62 communities and a total of $179.2 million in cash to purchase a 15% equity interest in the Blackstone Venture, terminate leases, and fund its share of closing costs. As of the formation date, the Company continued to operate two of the communities under lease agreements and began managing 60 of the communities on behalf of the venture under a management agreement with the venture. The two remaining leases will be terminated, pending certain regulatory and other conditions, at which point the Company will manage the communities; however, there can be no assurance that the terminations will occur or, if they do, when the actual terminations will occur. Two of the communities are managed by a third party for the venture. The results and financial position of the 62 communities for which leases were terminated were deconsolidated from the Company prospectively upon formation of the Blackstone Venture. The Company's interest in the venture is accounted for under the equity method of accounting. Under the terms of the venture agreement, the Company may be entitled to distributions which are less than or in excess of the Company's 15% equity interest based upon specified performance criteria. Initially, the Company determined that the contributed carrying value of the Company's investment was $66.8 million , representing the amount by which the $179.2 million cash contribution exceeded the carrying value of the Company's liabilities under operating, capital and financing leases contributed by the Company net of the carrying value of the assets under such operating, capital and financing leases. However, the Company estimated the fair value of its 15% equity interest in the Blackstone Venture at inception to be $47.1 million . As a result, the Company recorded a $19.7 million charge within asset impairment expense for the three months ended March 31, 2017 for the amount of the contributed carrying value in excess of the estimated fair value of the Company's investment. Additionally, these transactions related to the Blackstone Venture required the Company to record a significant increase to the Company's existing tax valuation allowance, after considering the change in the Company's future reversal of estimated timing differences resulting from these transactions, primarily due to removing the deferred positions related to the contributed leases. During the three months ended March, 31, 2017, the Company recorded a provision for income taxes to establish an additional $85.0 million of valuation allowance against its federal and state net operating loss carryforwards and tax credits as the Company anticipates these carryforwards and credits will not be utilized prior to expiration. See Note 13 for more information about the Company's deferred income taxes. Dispositions of Owned Communities during 2018 and Assets Held for Sale The Company began 2018 with 15 of its owned communities classified as held for sale as of December 31, 2017. During the three months ended March 31, 2018 , the Company completed the sale of three communities, two of which were not previously included in assets held for sale, for net cash proceeds of $12.8 million and recognized a net gain on sale of assets of $1.9 million . As of March 31, 2018 , 14 communities were classified as held for sale, resulting in $88.5 million being recorded as assets held for sale and $30.0 million of mortgage debt being included in the current portion of long-term debt within the condensed consolidated balance sheet with respect to such communities. This debt will either be repaid with the proceeds from the sales or be assumed by the prospective purchasers. The results of operations of the 14 communities are reported in the following segments within the condensed consolidated financial statements: Assisted Living ( 12 communities) and CCRCs-Rental ( two communities). The 14 communities had resident fee revenue of $9.1 million and $9.5 million and facility operating expenses of $8.0 million and $7.7 million for the three months ended March 31, 2018 and 2017 , respectively. Dispositions of Owned Communities and Other Lease Terminations during 2017 During the year ended December 31, 2017, the Company completed the sale of three communities for net cash proceeds of $8.2 million , and the Company terminated leases for 43 communities otherwise than in connection with the transactions with HCP and Blackstone described above (including terminations of leases for 26 communities pursuant to the transactions with HCP announced in November 2016). |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Marketable Securities As of March 31, 2018 , marketable securities of $174.6 million are stated at fair value based on valuations provided by third-party pricing services and are classified within Level 2 of the valuation hierarchy. The Company recognized gains of $0.6 million for marketable securities within interest income on the Company's condensed consolidated statements of operations for the three months ended March 31, 2018. Debt The Company estimates the fair value of its debt using a discounted cash flow analysis based upon the Company's current borrowing rate for debt with similar maturities and collateral securing the indebtedness. The Company had outstanding debt (excluding capital and financing lease obligations) with a carrying value of approximately $3.9 billion as of March 31, 2018 and December 31, 2017 . Fair value of the debt approximates carrying value in all periods. The Company's fair value of debt disclosure is classified within Level 2 of the valuation hierarchy. Goodwill and Asset Impairment Expense The following is a summary of the goodwill and asset impairment expense. Three Months Ended March 31, (in millions) 2018 2017 Goodwill $ 351.7 $ — Property, plant and equipment and leasehold intangibles, net 40.8 1.0 Investment in unconsolidated ventures 33.4 19.7 Other intangible assets, net 1.7 — Assets held for sale 2.8 — Goodwill and asset impairment $ 430.4 $ 20.7 Goodwill The Company follows ASC 350, Goodwill and Other Intangible Assets , and tests goodwill for impairment annually during the fourth quarter or whenever indicators of impairment arise. Factors the Company considers important in its analysis of whether an indicator of impairment exists include a significant decline in the Company's stock price or market capitalization for a sustained period since the last testing date, significant underperformance relative to historical or projected future operating results and significant negative industry or economic trends. The Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. The quantitative goodwill impairment test is based upon a comparison of the estimated fair value of the reporting unit to which the goodwill has been assigned with the reporting unit's carrying value. The Company is not required to calculate the fair value of a reporting unit unless the Company determines, based on a qualitative assessment, that it is more likely than not that its fair value of a reporting unit is less than its carrying value. The fair values used in the quantitative goodwill impairment test are estimated based upon discounted future cash flow projections for the reporting unit. These cash flow projections are based upon a number of estimates and assumptions such as revenue and expense growth rates, capitalization rates and discount rates. The Company also considers market based measures such as earnings multiples in its analysis of estimated fair values of its reporting units. If the quantitative goodwill impairment test results in a reporting unit's carrying value exceeding its estimated fair value, an impairment charge will be recorded based on the difference in accordance with ASU 2017-04, with the impairment charge limited to the amount of goodwill allocated to the reporting unit. During the three months ended March 31, 2018, the Company identified qualitative indicators of impairment, including a significant decline in the Company's stock price and market capitalization for a sustained period during the three months ended March 31, 2018. Based upon the Company's qualitative assessment, the Company performed a quantitative goodwill impairment test as of March 31, 2018, which included a comparison of the estimated fair value of each reporting unit to which the goodwill has been assigned with the reporting unit's carrying value. In estimating the fair value of the reporting units for purposes of the quantitative goodwill impairment test, the Company utilized an income approach, which included future cash flow projections that are developed internally. Any estimates of future cash flow projections necessarily involve predicting unknown future circumstances and events and require significant management judgments and estimates. In arriving at the cash flow projections, the Company considered its historic operating results, approved budgets and business plans, future demographic factors, expected growth rates, and other factors. In using the income approach to estimate the fair value of reporting units for purposes of its goodwill impairment test, the Company made certain key assumptions. Those assumptions include future revenues, facility operating expenses, and cash flows, including sales proceeds that the Company would receive upon a sale of the communities using estimated capitalization rates, all of which are considered Level 3 inputs in accordance with ASC 820. The Company corroborated the estimated capitalization rates used in these calculations with capitalization rates observable from recent market transactions. Future cash flows are discounted at a rate that is consistent with a weighted average cost of capital from a market participant perspective. The weighted average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise. The Company also considered market based measures such as earnings multiples in its analysis of estimated fair values of its reporting units. Based on the results of the Company's quantitative goodwill impairment test, the Company determined that the carrying value of the Company's Assisted Living reporting unit exceeded its estimated fair value by more than the $351.7 million carrying value of goodwill as of March 31, 2018. As a result, the Company recorded a non-cash impairment charge of $351.7 million to goodwill within the Assisted Living operating segment for the three months ended March 31, 2018. Based on the results of the Company's quantitative goodwill impairment test, the Company determined that the estimated fair value of both the Company's Retirement Centers and Brookdale Ancillary Services reporting units exceeded their respective carrying values as of March 31, 2018. Determining the fair value of the Company’s reporting units involves the use of significant estimates and assumptions, which the Company believes to be reasonable, that are unpredictable and inherently uncertain. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows and risk-adjusted discount rates. Future events may indicate differences from management's current judgments and estimates which could, in turn, result in future impairments. Future events that may result in impairment charges include increases in interest rates, which could impact capitalization and discount rates, differences in the projected occupancy rates and changes in the cost structure of existing communities. Significant adverse changes in the Company’s future revenues and/or operating margins, significant changes in the market for senior housing or the valuation of the real estate of senior living communities, as well as other events and circumstances, including but not limited to increased competition and changing economic or market conditions, including market control premiums, could result in changes in fair value and the determination that additional goodwill is impaired. Property, Plant and Equipment and Leasehold Intangibles During the three months ended March 31, 2018 and 2017 , the Company evaluated property, plant and equipment and leasehold intangibles for impairment and identified properties with a carrying value of the assets in excess of the estimated future undiscounted net cash flows expected to be generated by the assets primarily due to an expectation that certain communities will be disposed of prior to their previously intended holding periods. As a result of this change in intent, the Company compared the estimated fair value of the assets to their carrying value for these identified properties and recorded an impairment charge for the excess of carrying value over estimated fair value. The estimates of fair values of the property, plant and equipment of these communities were determined based on valuations provided by third-party pricing services and are classified within Level 3 of the valuation hierarchy. The Company recorded property, plant and equipment and leasehold intangibles non-cash impairment charges in its operating results of $40.8 million and $1.0 million for the three months ended March 31, 2018 and 2017 , respectively, primarily within the Assisted Living segment. Investment in Unconsolidated Ventures The Company evaluates realization of its investment in ventures accounted for using the equity method if circumstances indicate that the Company's investment is other than temporarily impaired. During the three months ended March 31, 2018 , and 2017 , the Company recorded $33.4 million and $19.7 million , respectively, of non-cash impairment charges related to investments in unconsolidated ventures. These impairment charges reflect the amount by which the carrying values of the investments exceeded their estimated fair value. Refer to Note 4 for more information about the formation and impairment of the Blackstone Venture during 2017. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Grants of restricted shares under the Company's 2014 Omnibus Incentive Plan were as follows: (share amounts in thousands, except for per share amounts) Shares Granted Weighted Average Grant Date Fair Value Total Value Three months ended March 31, 2018 3,387 $ 9.10 $ 30,823 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net The following is a summary of the carrying value of goodwill by operating segment. (in thousands) Retirement Centers Assisted Living Brookdale Ancillary Services Total Balance at January 1, 2018 $ 27,321 $ 351,652 $ 126,810 $ 505,783 Impairment — (351,652 ) — (351,652 ) Balance at March 31, 2018 $ 27,321 $ — $ 126,810 $ 154,131 The following is a summary of other intangible assets. March 31, 2018 (in thousands) Gross Accumulated Net Community purchase options $ 4,738 $ — $ 4,738 Health care licenses 49,250 — 49,250 Trade names 27,800 (24,361 ) 3,439 Management contracts 10,680 (7,448 ) 3,232 Total $ 92,468 $ (31,809 ) $ 60,659 December 31, 2017 (in thousands) Gross Accumulated Net Community purchase options $ 9,533 $ — $ 9,533 Health care licenses 50,927 — 50,927 Trade names 27,800 (23,714 ) 4,086 Management contracts 11,360 (7,929 ) 3,431 Total $ 99,620 $ (31,643 ) $ 67,977 Amortization expense related to definite-lived intangible assets for the three months ended March 31, 2018 and 2017 was $0.8 million and $0.9 million , respectively. Health care licenses were determined to be indefinite-lived intangible assets and are not subject to amortization. The community purchase options are not currently amortized, but will be added to the cost basis of the related communities if the option is exercised, and will then be depreciated over the estimated useful life of the community. Refer to Note 5 for information on impairment expense for goodwill. |
Property, Plant and Equipment a
Property, Plant and Equipment and Leasehold Intangibles, Net | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment and Leasehold Intangibles, Net | Property, Plant and Equipment and Leasehold Intangibles, Net As of March 31, 2018 and December 31, 2017 , net property, plant and equipment and leasehold intangibles, which include assets under capital and financing leases, consisted of the following: (in thousands) March 31, 2018 December 31, 2017 Land $ 452,677 $ 449,295 Buildings and improvements 4,941,781 4,923,621 Leasehold improvements 130,337 124,850 Furniture and equipment 1,035,909 1,006,889 Resident and leasehold operating intangibles 597,828 594,748 Construction in progress 55,747 74,678 Assets under capital and financing leases 1,738,167 1,742,384 8,952,446 8,916,465 Accumulated depreciation and amortization (3,176,950 ) (3,064,320 ) Property, plant and equipment and leasehold intangibles, net $ 5,775,496 $ 5,852,145 Long-lived assets with definite useful lives are depreciated or amortized on a straight-line basis over their estimated useful lives (or, in certain cases, the shorter of their estimated useful lives or the lease term) and are tested for impairment whenever indicators of impairment arise. Refer to Note 5 for information on impairment expense for property, plant and equipment and leasehold intangibles. For the three months ended March 31, 2018 and 2017 , the Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $113.4 million and $126.6 million , respectively. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term Debt and Capital and Financing Lease Obligations Long-term debt and capital and financing lease obligations consist of the following: (in thousands) March 31, 2018 December 31, 2017 Mortgage notes payable due 2018 through 2047; weighted average interest rate of 4.64% for the three months ended March 31, 2018, less debt discount and deferred financing costs of $17.1 million and $16.6 million as of March 31, 2018 and December 31, 2017, respectively (weighted average interest rate of 4.59% in 2017) $ 3,482,476 $ 3,497,762 Capital and financing lease obligations payable through 2032; weighted average interest rate of 7.24% for the three months ended March 31, 2018 (weighted average interest rate of 6.75% in 2017) 1,257,085 1,271,554 Convertible notes payable in aggregate principal amount of $316.3 million, less debt discount and deferred financing costs of $2.6 million and $6.4 million as of March 31, 2018 and December 31, 2017, respectively, interest at 2.75% per annum, due June 15, 2018 313,626 309,853 Notes payable issued to finance insurance premiums, weighted average interest rate of 3.44% for the three months ended March 31, 2018 19,859 — Other notes payable, weighted average interest rate of 5.95% for the three months ended March 31, 2018 (weighted average interest rate of 5.98% in 2017) and maturity dates ranging from 2020 to 2021 62,349 63,122 Total long-term debt and capital and financing lease obligations 5,135,395 5,142,291 Less current portion 605,006 602,501 Total long-term debt and capital and financing lease obligations, less current portion $ 4,530,389 $ 4,539,790 As of March 31, 2018 and December 31, 2017 , the current portion of long-term debt within the Company's condensed consolidated financial statements includes $30.0 million and $30.1 million , respectively, or mortgage notes payable secured by assets held for sale. This debt will be either assumed by the prospective purchasers or be repaid with the proceeds from the sales. Refer to Note 4 for more information about the Company's assets held for sale. Credit Facilities On December 19, 2014, the Company entered into a Fourth Amended and Restated Credit Agreement with General Electric Capital Corporation (which has since assigned its interest to Capital One Financial Corporation), as administrative agent, lender and swingline lender, and the other lenders from time to time parties thereto. The agreement currently provides for a total commitment amount of $400.0 million , comprised of a $400.0 million revolving credit facility (with a $50.0 million sublimit for letters of credit and a $50.0 million swingline feature to permit same day borrowing) and an option to increase the revolving credit facility by an additional $250.0 million , subject to obtaining commitments for the amount of such increase from acceptable lenders. The maturity date is January 3, 2020 , and amounts drawn under the facility bear interest at 90-day LIBOR plus an applicable margin from a range of 2.50% to 3.50% . The applicable margin varies based on the percentage of the total commitment drawn, with a 2.50% margin at utilization equal to or lower than 35% , a 3.25% margin at utilization greater than 35% but less than or equal to 50% , and a 3.50% margin at utilization greater than 50% . The quarterly commitment fee on the unused portion of the facility is 0.25% per annum when the outstanding amount of obligations (including revolving credit, swingline and term loans and letter of credit obligations) is greater than or equal to 50% of the total commitment amount or 0.35% per annum when such outstanding amount is less than 50% of the total commitment amount. Amounts drawn on the facility may be used to finance acquisitions, fund working capital and capital expenditures and for other general corporate purposes. The facility is secured by a first priority mortgage on certain of the Company's communities. In addition, the agreement permits the Company to pledge the equity interests in subsidiaries that own other communities (rather than mortgaging such communities), provided that loan availability from pledged assets cannot exceed 10% of loan availability from mortgaged assets. The availability under the line will vary from time to time as it is based on borrowing base calculations related to the appraised value and performance of the communities securing the facility. The agreement contains typical affirmative and negative covenants, including financial covenants with respect to minimum consolidated fixed charge coverage and minimum consolidated tangible net worth. A violation of any of these covenants could result in a default under the credit agreement, which would result in termination of all commitments under the agreement and all amounts owing under the agreement becoming immediately due and payable and/or could trigger cross default provisions in our other outstanding debt and lease agreements. As of March 31, 2018 , no borrowings were outstanding on the revolving credit facility and $41.8 million of letters of credit were outstanding under this credit facility. The Company also had separate unsecured letter of credit facilities of up to $66.2 million in the aggregate as of March 31, 2018 . Letters of credit totaling $64.4 million had been issued under these separate facilities as of March 31, 2018 . 2018 Financings In April 2018, the Company obtained $247.6 million of debt secured by the non-recourse first mortgages on 11 communities. Sixty percent of the principal amount bears interest at a fixed rate of 4.55% , and the remaining forty percent of the principal amount bears interest at a variable rate equal to the 30-day LIBOR plus a margin of 189 basis points. The debt matures in May 2028 . The $247.6 million of proceeds from the refinancing were primarily utilized to fund the acquisition of five communities from HCP and to repay $43.0 million of outstanding mortgage debt scheduled to mature in May 2018. See Note 4 to the condensed consolidated financial statements for more information regarding the acquisitions of communities from HCP. Convertible Debt In June 2011, the Company completed a registered offering of $316.3 million aggregate principal amount of 2.75% convertible senior notes due June 15, 2018 (the "Notes"). On and after March 15, 2018, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time. As of March 31, 2018, the Notes are convertible and none were converted during the three months ended March 31, 2018. As of March 31, 2018 , the $313.6 million carrying value of the Notes was included in the current portion of long-term debt within the condensed consolidated balance sheet. It is the Company’s current intent and policy to settle the principal amount of the Notes (or, if less, the amount of the conversion obligation) in cash upon conversion. Financial Covenants Certain of the Company’s debt documents contain restrictions and financial covenants, such as those requiring the Company to maintain prescribed minimum net worth and stockholders’ equity levels and debt service ratios, and requiring the Company not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community and/or entity basis. In addition, the Company’s debt documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements. The Company’s failure to comply with applicable covenants could constitute an event of default under the applicable debt documents. Many of the Company’s debt and lease documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders or lessors). Furthermore, the Company’s debt is secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries. As of March 31, 2018 , the Company is in compliance with the financial covenants of its outstanding debt and lease agreements. |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2018 | |
Litigation [Abstract] | |
Litigation | Litigation The Company has been and is currently involved in litigation and claims, including putative class action claims from time to time, incidental to the conduct of its business which are generally comparable to other companies in the senior living and healthcare industries. Certain claims and lawsuits allege large damage amounts and may require significant costs to defend and resolve. As a result, the Company maintains general liability and professional liability insurance policies in amounts and with coverage and deductibles the Company believes are adequate, based on the nature and risks of its business, historical experience and industry standards. The Company's current policies provide for deductibles for each claim. Accordingly, the Company is, in effect, self-insured for claims that are less than the deductible amounts and for claims or portions of claims that are not covered by such policies. Similarly, the senior living and healthcare industries are continuously subject to scrutiny by governmental regulators, which could result in litigation related to regulatory compliance matters. In addition, as a result of the Company's participation in the Medicare and Medicaid programs, the Company is subject to various governmental reviews, audits and investigations, including but not limited to audits under various government programs, such as the Recovery Act Contractors (RAC), Zone Program Integrity Contractors (ZPIC), and Unified Program Integrity Contractors (UPIC) programs. The costs to respond to and defend such reviews, audits and investigations may be significant, and an adverse determination could result in citations, sanctions and other criminal or civil fines and penalties, the refund of overpayments, payment suspensions, termination of participation in Medicare and Medicaid programs, and/or damage to the Company's business reputation. |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow Information | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosure of Cash Flow Information | Supplemental Disclosure of Cash Flow Information Three Months Ended (in thousands) 2018 2017 Supplemental Disclosure of Cash Flow Information: Interest paid $ 62,721 $ 81,094 Income taxes paid, net of refunds $ (128 ) $ (107 ) Additions to property, plant and equipment and leasehold intangibles, net: Property, plant and equipment and leasehold intangibles, net $ 49,496 $ 43,830 Accounts payable 17,096 5,098 Net cash paid $ 66,592 $ 48,928 Acquisition of assets, net of related payables: Property, plant and equipment and leasehold intangibles, net $ 32,126 $ — Other intangible assets, net (4,796 ) — Net cash paid $ 27,330 $ — Proceeds from sale of assets, net: Prepaid expenses and other assets $ (579 ) $ (356 ) Assets held for sale (18,758 ) (5,621 ) Property, plant and equipment and leasehold intangibles, net (978 ) — Investments in unconsolidated ventures (20,084 ) (26,301 ) Refundable entrance fees and deferred revenue 8,345 — Other liabilities 425 — (Gain) loss on sale of assets, net (43,431 ) 603 Net cash received $ (75,060 ) $ (31,675 ) Formation of the Blackstone Venture: Prepaid expenses and other assets $ — $ (8,173 ) Property, plant and equipment and leasehold intangibles, net — (768,897 ) Investments in unconsolidated ventures — 66,816 Capital and financing lease obligations — 879,959 Deferred liabilities — 7,504 Other liabilities — 1,998 Net cash paid $ — $ 179,207 Supplemental Schedule of Non-cash Operating, Investing and Financing Activities: Assets designated as held for sale: Prepaid expenses and other assets $ — $ 106 Assets held for sale (3,336 ) (14,122 ) Property, plant and equipment and leasehold intangibles, net 3,336 14,016 Net $ — $ — The following table provides a reconciliation of cash and cash equivalents and restricted cash and escrow deposits reported within the condensed consolidated statement of cash flows that sums to the total of the same such amounts shown in the condensed consolidated statement of cash flows. March 31, 2018 December 31, 2017 Reconciliation of cash and cash equivalents and restricted cash and escrow deposits: Cash and cash equivalents $ 335,412 $ 222,647 Cash and escrow deposits – restricted 32,393 37,189 Long-term cash and escrow deposits – restricted 27,756 22,710 Total cash and cash equivalents and restricted cash and escrow deposits shown in the condensed consolidated statement of cash flows $ 395,561 $ 282,546 |
Facility Operating Leases
Facility Operating Leases | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Facility Operating Leases | Facility Operating Leases As of March 31, 2018 , the Company operated 434 communities under long-term leases ( 290 operating leases and 144 capital and financing leases). The substantial majority of the Company's lease arrangements are structured as master leases. Under a master lease, numerous communities are leased through an indivisible lease. The Company typically guarantees the performance and lease payment obligations of its subsidiary leases under the master leases. Due to the nature of such master leases, it is difficult to restructure the composition of such leased portfolios or economic terms of the leases without the consent of the applicable landlord. In addition, an event of default related to an individual property or limited number of properties within a master lease portfolio may result in a default on the entire master lease portfolio. The community leases contain other customary terms, which may include assignment and change of control restrictions, maintenance and capital expenditure obligations, termination provisions and financial covenants, such as those requiring the Company to maintain prescribed minimum net worth and stockholders’ equity levels and lease coverage ratios, and not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community and/or entity basis. In addition, the Company’s lease documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements. The Company’s failure to comply with applicable covenants could constitute an event of default under the applicable lease documents. Many of the Company’s debt and lease documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors). Certain leases contain cure provisions, which generally allow the Company to post an additional lease security deposit if the required covenant is not met. Furthermore, the Company’s leases are secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries. As of March 31, 2018 , the Company is in compliance with the financial covenants of its long-term leases. A summary of facility lease expense and the impact of straight-line adjustment and amortization of (above) below market rents and deferred gains are as follows: Three Months Ended (in thousands) 2018 2017 Cash basis payment $ 89,593 $ 94,604 Straight-line (income) expense (6,165 ) (3,007 ) Amortization of (above) below market lease, net (1,938 ) (1,697 ) Amortization of deferred gain (1,090 ) (1,093 ) Facility lease expense $ 80,400 $ 88,807 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The difference between the statutory tax rate and the Company's effective tax rates for the three months ended March 31, 2018 and March 31, 2017 reflects a decrease in the Company’s federal statutory tax rate from 35% to 21% as a result of the Tax Act and a decrease in the valuation allowance recorded in 2018 as compared to 2017. These decreases were offset by the elimination of deductibility for qualified performance-based compensation of covered employees in 2018 as a result of the Tax Act, the negative tax benefit on the vesting of restricted stock, a direct result of the Company's lower stock price in 2018, and the non-deductible write-off of goodwill . The valuation allowance during the three months ended March 31, 2018 reflects an additional allowance of $24.6 million established against the current period operating loss and is reflective of the Company's quarterly calculation of the reversal of existing tax assets and liabilities and the impact of the Company's acquisitions, dispositions, and other significant transactions, including the impact of the Tax Act which allows for the unlimited carryover of net operating losses created in 2018 and beyond. The increase in the valuation allowance during the three months ended March 31, 2017 was comprised of multiple components. The increase included $85.0 million related to the removal of future timing differences as a result of the formation of the Blackstone Venture and termination of leases associated therewith. In addition, the Company increased its valuation allowance by $48.5 million upon the adoption of ASU 2016-09. The $48.5 million offset the increase to the Company's net operating loss carryforward position previously reflected in an additional paid-in capital pool, and accordingly, did not impact the current period income tax position. The remaining change of approximately $11.8 million for the three months ended March 31, 2017 reflects the allowance established against the current period operating loss. The Company recorded an aggregate deferred federal, state and local tax benefit of $9.5 million as a result of the operating loss for the three months ended March 31, 2018 , which was offset by an increase in the valuation allowance of $24.6 million . The excess of the increase in the valuation allowance over the deferred federal, state and local benefit for the three months ended March 31, 2018 is the result of the anticipated reversal of future tax liabilities offset by future tax deductions. The Company recorded an aggregate deferred federal, state, and local tax benefit of $13.5 million as a result of the operating loss for the three months ended March 31, 2017 , which was offset by an increase in the valuation allowance of $96.8 million . The Company evaluates its deferred tax assets each quarter to determine if a valuation allowance is required based on whether it is more likely than not that some portion of the deferred tax asset would not be realized. The Company's valuation allowance as of March 31, 2018 and December 31, 2017 is $360.7 million and $336.1 million , respectively. For the year ended December 31, 2017, the Company estimated the impact of the Tax Act on state income taxes reflected in its income tax benefit. Reasonable estimates for the Company’s state and local provision continue to be made based on the Company's analysis of tax reform. These provisional amounts have not been adjusted for the three months ended March 31, 2018 but may be adjusted in future periods during 2018 when additional information is obtained. In addition, the Tax Act limits the annual deductibility of a corporation's net interest expense unless it elects to be exempt from such deductibility limitation under the real property trade or business exception. The Company plans to elect the real property trade or business exception in 2018. As such, the Company will be required to apply the alternative depreciation system ("ADS") to all current and future residential real property and qualified improvement property assets. This change did not have a material effect for the three months ended March 31, 2018 but will impact future tax depreciation deductions and may impact the Company’s valuation allowance. The Company is unable to estimate the future impact of this change at this time. Additional information that may affect the Company's provisional amounts would include further clarification and guidance on how the Internal Revenue Service will implement tax reform and further clarification and guidance on how state taxing authorities will implement tax reform and the related effect on the Company's state and local income tax returns, state and local net operating losses and corresponding valuation allowances. The Company recorded interest charges related to its tax contingency reserve for cash tax positions for the three months ended March 31, 2018 and March 31, 2017 which are included in income tax expense or benefit for the period. Tax returns for years 2013 through 2016 are subject to future examination by tax authorities. In addition, the net operating losses from prior years are subject to adjustment under examination. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Variable Interest Entities | Variable Interest Entities As of March 31, 2018 , the Company has equity interests in unconsolidated VIEs. The Company has determined that it does not have the power to direct the activities of the VIEs that most significantly impact the VIEs' economic performance and is not the primary beneficiary of these VIEs in accordance with ASC 810. The Company's interests in the VIEs are, therefore, accounted for under the equity method of accounting. The Company holds a 51% equity interest, and HCP owns a 49% interest, in a venture that owns and operates entry fee CCRCs (the "CCRC Venture"). The CCRC Venture's opco has been identified as a VIE. The equity members of the CCRC Venture's opco share certain operating rights, and the Company acts as manager to the CCRC Venture opco. However, the Company does not consolidate this VIE because it does not have the ability to control the activities that most significantly impact this VIE's economic performance. The assets of the CCRC Venture opco primarily consist of the CCRCs that it owns and leases, resident fees receivable, notes receivable and cash and cash equivalents. The obligations of the CCRC Venture opco primarily consist of community lease obligations, mortgage debt, accounts payable, accrued expenses and refundable entrance fees. The Company holds an equity ownership interest in each of the propco and opco of one venture ("RIDEA Venture") that operates senior housing communities in a RIDEA structure. As of March 31, 2018 , the Company's equity ownership interest is 10% in the RIDEA Venture. The RIDEA Venture has been identified as a VIE. The equity members of the RIDEA Venture share certain operating rights, and the Company acts as manager to the opco of the RIDEA Venture. However, the Company does not consolidate the VIE because it does not have the ability to control the activities that most significantly impact the economic performance of the VIE. The assets of the RIDEA Venture primarily consist of the senior housing communities that the RIDEA Venture owns, resident fees receivable, and cash and cash equivalents. The obligations of the RIDEA Venture primarily consist of notes payable, accounts payable and accrued expenses. The Company holds a 15% equity ownership interest in the Blackstone Venture. The Blackstone Venture has been identified as a VIE due to the Company lacking substantive participation rights in the management of the venture and the Company lacking kick-out rights over the managing member. The equity members of the Blackstone Venture share certain operating rights and the Company acts as manager to 60 communities owned by the Blackstone Venture. However, the Company does not consolidate this VIE because it does not have the ability to control the activities that most significantly impact the economic performance of the VIE. The assets of the Blackstone Venture primarily consist of senior housing communities, resident fees receivable and cash and cash equivalents. The obligations of the Blackstone Venture primarily consist of long-term mortgage debt, accounts payable and accrued expenses. As of March 31, 2018 , the Company leases two communities from the Blackstone Venture with annual lease payments of approximately $2.6 million . Under the terms of the lease agreements, the Company may be required to purchase the two leased communities for an amount equal to the greater of the fair market value of the communities or $33.8 million if there is an event of default under the lease agreement. The carrying value and classification of the related assets, liabilities and maximum exposure to loss as a result of the Company's involvement with these VIEs are summarized below as of March 31, 2018 (in millions): VIE Type Asset Type Maximum Exposure to Loss Carrying Value CCRC Venture opco Investment in unconsolidated ventures $ 31.3 $ 31.3 RIDEA Venture Investment in unconsolidated ventures $ 20.6 $ 20.6 As of March 31, 2018 , the Company is not required to provide financial support, through a liquidity arrangement or otherwise, to its unconsolidated VIEs. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue The Company disaggregates its revenue from contracts with customers by payor source, as the Company believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. See details on a reportable segment basis in the table below. Three Months Ended March 31, 2018 (in thousands) Retirement Centers Assisted Living CCRCs-Rental Brookdale Ancillary Services Total Private pay $ 157,507 $ 514,264 $ 70,721 $ 269 $ 742,761 Government reimbursement 890 18,016 23,706 92,627 135,239 Other third-party payor programs — — 10,642 17,624 28,266 Total resident fee revenue $ 158,397 $ 532,280 $ 105,069 $ 110,520 $ 906,266 Three Months Ended March 31, 2017 (in thousands) Retirement Centers Assisted Living CCRCs-Rental Brookdale Ancillary Services Total Private pay $ 171,617 $ 569,953 $ 94,623 $ 151 $ 836,344 Government reimbursement 1,003 20,584 32,828 98,534 152,949 Other third-party payor programs — — 14,347 13,287 27,634 Total resident fee revenue $ 172,620 $ 590,537 $ 141,798 $ 111,972 $ 1,016,927 The Company has not further disaggregated management fee revenues and revenue for reimbursed costs incurred on behalf of managed communities as the economic factors affecting the nature, timing, amount, and uncertainty of revenue and cash flows do not significantly vary within each respective revenue category. Contract Balances The payment terms and conditions within the Company's revenue-generating contracts vary by contract type and payor source, although terms generally include payment to be made within 30 days. Resident fee revenue for recurring and routine monthly services is generally billed monthly in advance. Resident fee revenue for standalone or certain ancillary services is generally billed monthly in arrears. Additionally, non-refundable community fees are generally billed and collected in advance or upon move-in of a resident under residency agreements for independent living and assisted living services. Amounts of revenue that are collected from residents in advance are recognized as deferred revenue until the performance obligations are satisfied. The Company had total deferred revenue (included within refundable entrance fees and deferred revenue, deferred liabilities, and other liabilities within the condensed consolidated balance sheets) of $122.4 million and $112.4 million , including $62.1 million and $49.7 million of monthly resident fees billed and received in advance, as of March 31, 2018 and December 31, 2017 , respectively. For the three months ended March 31, 2018 , the Company recognized $60.9 million of revenue that was included in the deferred revenue balance as of January 1, 2018. The Company applies the practical expedient in ASC 606-10-50-14 and does not disclose amounts for remaining performance obligations that have original expected durations of one year or less. For the three months ended March 31, 2018 , the Company recognized $4.5 million of charges within facility operating expenses within the condensed consolidated statement of operations for additions to the allowance for doubtful accounts. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information As of March 31, 2018 the Company has five reportable segments: Retirement Centers; Assisted Living; CCRCs-Rental; Brookdale Ancillary Services; and Management Services. Operating segments are defined as components of an enterprise that engage in business activities from which it may earn revenues and incur expenses; for which separate financial information is available; and whose operating results are regularly reviewed by the chief operating decision maker to assess the performance of the individual segment and make decisions about resources to be allocated to the segment. Retirement Centers . The Company's Retirement Centers segment includes owned or leased communities that are primarily designed for middle to upper income seniors generally age 75 and older who desire an upscale residential environment providing the highest quality of service. The majority of the Company's retirement center communities consist of both independent living and assisted living units in a single community, which allows residents to "age-in-place" by providing them with a continuum of senior independent and assisted living services. Assisted Living. The Company's Assisted Living segment includes owned or leased communities that offer housing and 24-hour assistance with activities of daily life to mid-acuity frail and elderly residents. Assisted living communities include both freestanding, multi-story communities and freestanding single story communities. The Company also operates memory care communities, which are freestanding assisted living communities specially designed for residents with Alzheimer's disease and other dementias. CCRCs-Rental. The Company's CCRCs-Rental segment includes large owned or leased communities that offer a variety of living arrangements and services to accommodate all levels of physical ability and health. Most of the Company's CCRCs have independent living, assisted living and skilled nursing available on one campus or within the immediate market, and some also include memory care and Alzheimer's units. Brookdale Ancillary Services . The Company's Brookdale Ancillary Services segment includes the home health, hospice, and outpatient therapy services, as well as education and wellness programs, provided to residents of many of the Company's communities and to seniors living outside of the Company's communities. The Brookdale Ancillary Services segment does not include the inpatient therapy services provided in the Company's skilled nursing units, which are included in the Company's CCRCs-Rental segment. Management Services. The Company's Management Services segment includes communities operated by the Company pursuant to management agreements. In some of the cases, the controlling financial interest in the community is held by third parties and, in other cases, the community is owned in a venture structure in which the Company has an ownership interest. Under the management agreements for these communities, the Company receives management fees as well as reimbursed expenses, which represent the reimbursement of expenses it incurs on behalf of the owners. The accounting policies of the Company's reportable segments are the same as those described in the summary of significant accounting policies in Note 2. The following table sets forth selected segment financial and operating data: Three Months Ended (in thousands) 2018 2017 Revenue: Retirement Centers (1) $ 158,397 $ 172,620 Assisted Living (1) 532,280 590,537 CCRCs-Rental (1) 105,069 141,798 Brookdale Ancillary Services (1) 110,520 111,972 Management Services (2) 280,968 199,839 $ 1,187,234 $ 1,216,766 Segment Operating Income: (3) Retirement Centers $ 64,422 $ 74,002 Assisted Living 176,538 217,439 CCRCs-Rental 24,663 35,315 Brookdale Ancillary Services 8,318 15,629 Management Services 18,681 15,894 292,622 358,279 General and administrative (including non-cash stock-based compensation expense) 76,710 65,560 Transaction costs 4,725 7,593 Facility lease expense 80,400 88,807 Depreciation and amortization 114,255 127,487 Goodwill and asset impairment 430,363 20,706 Income (loss) from operations $ (413,831 ) $ 48,126 As of (in thousands) March 31, 2018 December 31, 2017 Total assets: Retirement Centers $ 1,255,585 $ 1,266,076 Assisted Living 4,134,795 4,535,114 CCRCs-Rental 637,545 667,234 Brookdale Ancillary Services 248,763 257,257 Corporate and Management Services 910,740 949,768 $ 7,187,428 $ 7,675,449 (1) All revenue is earned from external third parties in the United States. (2) Management services segment revenue includes management fees and reimbursements of costs incurred on behalf of managed communities. (3) Segment operating income is defined as segment revenues less segment facility operating expenses (excluding depreciation and amortization) and costs incurred on behalf of managed communities. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Events On April 26, 2018, the Company entered into several agreements to restructure a portfolio of 128 communities it leased from Ventas, Inc. and certain of its subsidiaries (collectively, “Ventas”) as of such date, including a Master Lease and Security Agreement (the “Master Lease”). The Master Lease amends and restates prior leases comprising an aggregate portfolio of 107 communities into the Master Lease. Under the Master Lease and other agreements entered into on April 26, 2018, the 21 additional communities leased by the Company from Ventas pursuant to separate lease agreements will be combined automatically into the Master Lease upon the first to occur of Ventas' election or the repayment of, or receipt of lender consent with respect to, mortgage debt underlying such communities. The Company and Ventas agreed to observe, perform and enforce such separate leases as if they had been combined into the Master Lease effective April 26, 2018, to the extent not in conflict with any mortgage debt underlying such communities. The transaction agreements with Ventas further provide that the Master Lease and certain other agreements between the Company and Ventas will be cross-defaulted. The initial term of the Master Lease ends December 31, 2025, with two 10 -year extension options available to the Company. The Master Lease and separate lease agreements with Ventas, which are guaranteed at the parent level by the Company, provide for total rent in 2018 of approximately $175 million for the 128 communities, including the pro-rata portion of an $8 million rent credit for 2018. The Company will receive an annual rent credit of $8 million in 2019, $7 million in 2020 and $5 million thereafter; provided, that if a change of control of the Company occurs prior to 2021, the annual rent credit will be reduced to $5 million . Effective on January 1, 2019, the annual minimum rent will be subject to an escalator equal to the lesser of 2.25% or four times the CPI increase for the prior year (or zero if there was a CPI decrease). The Master Lease requires the Company to spend (or escrow with Ventas) a minimum of $2,000 per unit per 24 -month period commencing with the 24-month period ending December 31, 2019 and thereafter each 24-month period ending December 31 during the lease term, subject to annual increases commensurate with the escalator beginning with the second lease year of the first extension term (if any). Under the definitive agreements with Ventas, the Company, at the parent level, must satisfy certain financial covenants (including tangible net worth and leverage ratios) and may consummate a change of control transaction without the need for consent of Ventas so long as certain objective conditions are satisfied, including the post-transaction guarantor's satisfying certain enhanced minimum tangible net worth and maximum leverage ratio, having minimum levels of operational experience and reputation in the senior living industry, and paying a change of control fee of $25 million to Ventas. At the Company’s option, which must be exercised on or before April 26, 2019, the Company may provide notice to Ventas of the Company's election to direct Ventas to market for sale one or more communities with up to approximately $30 million of annual minimum rent. Upon receipt of such notice, Ventas will be obligated to use commercially reasonable, diligent efforts to sell such communities on or before December 31, 2020 (subject to extension for regulatory purposes); provided, that Ventas' obligation to sell any such community will be subject to Ventas' receiving a purchase price in excess of a minimum sale price to be mutually agreed by the Company and Ventas and to certain other customary closing conditions. Upon any such sale, such communities will be removed from the Master Lease, and the annual minimum rent under the Master Lease will be reduced by the amount of the net sale proceeds received by Ventas multiplied by 6.25% . The lease restructuring transactions may require the Company to record a significant charge in the three months ended June 30, 2018, primarily for the extensions of the triple-net lease obligations for communities with lease terms that are unfavorable to the Company given current market conditions on the amendment date. The Company is unable to reasonably estimate the amount of the charge at this time. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("US GAAP") for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q. In the opinion of management, these financial statements include all adjustments necessary to present fairly the financial position, results of operations and cash flows of the Company as of March 31, 2018 , and for all periods presented. The condensed consolidated financial statements are prepared on the accrual basis of accounting. All adjustments made have been of a normal and recurring nature. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The Company believes that the disclosures included are adequate and provide a fair presentation of interim period results. Interim financial statements are not necessarily indicative of the financial position or operating results for an entire year. It is suggested that these interim financial statements be read in conjunction with the audited financial statements and the notes thereto, together with management's discussion and analysis of financial condition and results of operations, included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC on February 22, 2018. Except for the changes for the impact of the recently adopted accounting pronouncements discussed in this Note, the Company has consistently applied its accounting policies to all periods presented in these condensed consolidated financial statements. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Brookdale and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated. Investments in affiliated companies that the Company does not control, but has the ability to exercise significant influence over governance and operation, are accounted for by the equity method. The ownership interest of consolidated entities not wholly-owned by the Company are presented as noncontrolling interests in the accompanying condensed consolidated financial statements. Noncontrolling interest represents the share of consolidated entities owned by third parties. Noncontrolling interest is adjusted for the noncontrolling holder's share of additional contributions, distributions and the proportionate share of the net income or loss of each respective entity. The Company continually evaluates its potential variable interest entity ("VIE") relationships under certain criteria as provided for in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 810, Consolidation ("ASC 810"). ASC 810 broadly defines a VIE as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity's activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity's activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The Company performs this analysis on an ongoing basis and consolidates any VIEs for which the Company is determined to be the primary beneficiary, as determined by the Company's power to direct the VIE's activities and the obligation to absorb its losses or the right to receive its benefits, which are potentially significant to the VIE. Refer to Note 14 for more information about the Company's VIE relationships. |
Revenue Recognition | Revenue Recognition Resident Fees Resident fee revenue is reported at the amount that reflects the consideration the Company expects to receive in exchange for the services provided. These amounts are due from residents or third-party payors and include variable consideration for retroactive adjustments, if any, under reimbursement programs. Performance obligations are determined based on the nature of the services provided. Resident fee revenue is recognized as performance obligations are satisfied. Under the Company's senior living residency agreements, which are generally for a term of 30 days to one year, the Company provides senior living services to residents for a stated daily or monthly fee. The Company recognizes revenue for housing services under residency agreements for independent living and assisted living services in accordance with the provisions of ASC Topic 840, Leases ("ASC 840"). The Company recognizes revenue for assisted living care, skilled nursing residency and inpatient therapy services, ancillary services, and personalized health services in accordance with the provisions of ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"). The Company has determined that the senior living services included under the daily or monthly fee have the same timing and pattern of transfer and are a series of distinct services that are considered one performance obligation which is satisfied over time. Through its ancillary services programs, the Company enters into contracts to provide home health, hospice, and outpatient therapy services. The Company recognizes revenue for home health, hospice, and outpatient therapy services in accordance with the provisions of ASC 606. Each service provided under the contract is capable of being distinct, and thus, the services are considered individual and separate performance obligations which are satisfied as services are provided and revenue is recognized as services are provided. The Company receives revenue for services under various third-party payor programs which include Medicare, Medicaid, and other third-party payors. Settlements with third-party payors for retroactive adjustments due to audits, reviews or investigations are included in the determination of the estimated transaction price for providing services. The Company estimates the transaction price based on the terms of the contract with the payor, correspondence with the payor and historical payment trends, and retroactive adjustments are recognized in future periods as final settlements are determined. Management Services The Company manages certain communities under contracts which provide periodic management fee payments to the Company. Management fees are generally determined by an agreed upon percentage of gross revenues (as defined in the management agreement). Certain management contracts also provide for an annual incentive fee to be paid to the Company upon achievement of certain metrics identified in the contract. The Company recognizes revenue for community management services in accordance with the provisions of ASC 606. Although there are various management and operational activities performed by the Company under the contracts, the Company has determined that all community operations management activities are a single performance obligation, which is satisfied over time as the services are rendered. The Company estimates the amount of incentive fee revenue expected to be earned, if any, during the annual contract period and revenue is recognized as services are provided to the owners of the communities. The Company’s estimate of the transaction price for management services also includes the amount of reimbursement due from the owners of the communities for services provided and related costs incurred. Such revenue is included in "reimbursed costs incurred on behalf of managed communities" on the condensed consolidated statements of operations. The related costs are included in "costs incurred on behalf of managed communities" on the condensed consolidated statements of operations. |
Gain on Sale of Assets | Gain on Sale of Assets The Company regularly enters into real estate transactions which may include the disposal of certain communities, including the associated real estate. The Company recognizes income from real estate sales under ASC 610-20, Other Income - Gains and Losses from Derecognition of Nonfinancial Assets (“ASC 610-20”). Under ASC 610-20, income is recognized when the transfer of control occurs and the Company applies the five-step model for recognition to determine the amount of income to recognize for all real estate sales. The Company accounts for the sale of equity method investments under ASC 860, Transfers and Servicing (“ASC 860”). Under ASC 860, income is recognized when the transfer of control occurs and the Company has no continuing involvement with the transferred financial assets. |
Stock-Based Compensation | Stock-Based Compensation The Company follows ASC 718, Compensation – Stock Compensation (“ASC 718”) in accounting for its share-based payments. This guidance requires measurement of the cost of employee services received in exchange for stock compensation based on the grant-date fair value of the employee stock awards. This cost is recognized as compensation expense ratably over the employee’s requisite service period. Incremental compensation costs arising from subsequent modifications of awards after the grant date are recognized when incurred. Certain of the Company’s employee stock awards vest only upon the achievement of performance targets. ASC 718 requires recognition of compensation cost only when achievement of performance conditions is considered probable. Consequently, the Company’s determination of the amount of stock compensation expense requires judgment in estimating the probability of achievement of these performance targets. For all share-based awards with graded or cliff vesting other than awards with performance-based vesting conditions, the Company records compensation expense for the entire award on a straight-line basis (or, if applicable, on the accelerated method) over the requisite service period. For graded-vesting awards with performance-based vesting conditions, total compensation expense is recognized over the requisite service period for each separately vesting tranche of the award as if the award is, in substance, multiple awards once the performance target is deemed probable of achievement. Performance goals are evaluated quarterly. If such goals are not ultimately met or it is not probable the goals will be achieved, no compensation expense is recognized and any previously recognized compensation expense is reversed. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability approach which requires recognition of deferred tax assets and liabilities for the differences between the financial reporting and tax basis of assets and liabilities. A valuation allowance reduces deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 820, Fair Value Measurements and Disclosures establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows: Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Cash and cash equivalents, marketable securities, and cash and escrow deposits – restricted are reflected in the accompanying condensed consolidated balance sheets at amounts considered by management to reasonably approximate fair value due to the short maturity. |
Marketable Securities | Marketable Securities Investments in commercial paper and corporate bond instruments with original maturities of greater than three months are classified as marketable securities. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company follows ASC 350, Goodwill and Other Intangible Assets , and tests goodwill for impairment annually during the fourth quarter or whenever indicators of impairment arise. Factors the Company considers important in its analysis of whether an indicator of impairment exists include a significant decline in the Company's stock price or market capitalization for a sustained period since the last testing date, significant underperformance relative to historical or projected future operating results and significant negative industry or economic trends. The Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. The quantitative goodwill impairment test is based upon a comparison of the estimated fair value of the reporting unit to which the goodwill has been assigned with the reporting unit's carrying value. The Company is not required to calculate the fair value of a reporting unit unless the Company determines, based on a qualitative assessment, that it is more likely than not that its fair value of a reporting unit is less than its carrying value. The fair values used in the quantitative goodwill impairment test are estimated based upon discounted future cash flow projections for the reporting unit. These cash flow projections are based upon a number of estimates and assumptions such as revenue and expense growth rates, capitalization rates and discount rates. If the quantitative goodwill impairment test results in a reporting unit's carrying value exceeding its estimated fair value, an impairment charge will be recorded based on the difference in accordance with ASU 2017-04, Intangibles - Goodwill and Other , with the impairment charge limited to the amount of goodwill allocated to the reporting unit. Acquired intangible assets are initially valued at fair market value using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over their estimated useful lives and all intangible assets are reviewed for impairment if indicators of impairment arise. The evaluation of impairment for definite-lived intangibles is based upon a comparison of the carrying value of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If estimated future undiscounted net cash flows are less than the carrying value of the asset, then the fair value of the asset is estimated. The impairment expense is determined by comparing the estimated fair value of the intangible asset to its carrying value, with any shortfall from fair value recognized as an expense in the current period. Indefinite-lived intangible assets are not amortized but are tested for impairment annually during the fourth quarter or more frequently as required. The impairment test consists of a comparison of the estimated fair value of the indefinite-lived intangible asset with its carrying value. If the carrying value exceeds its fair value, an impairment loss is recognized for that difference. Amortization of the Company's definite-lived intangible assets is computed using the straight-line method over the estimated useful lives of the assets, which are as follows: Asset Category Estimated Useful Life (in years) Trade names 2 – 5 Other 3 – 9 |
Self-Insurance Liability Accruals | Self-Insurance Liability Accruals The Company is subject to various legal proceedings and claims that arise in the ordinary course of its business. Although the Company maintains general liability and professional liability insurance policies for its owned, leased and managed communities under a master insurance program, the Company's current policies provide for deductibles for each and every claim. As a result, the Company is, in effect, self-insured for claims that are less than the deductible amounts. In addition, the Company maintains a high deductible workers compensation program and a self-insured employee medical program. The Company reviews the adequacy of its accruals related to these liabilities on an ongoing basis, using historical claims, actuarial valuations, third-party administrator estimates, consultants, advice from legal counsel and industry data, and adjusts accruals periodically. Estimated costs related to these self-insurance programs are accrued based on known claims and projected claims incurred but not yet reported. Subsequent changes in actual experience are monitored, and estimates are updated as information becomes available. During the three months ended March 31, 2018 and 2017 , the Company reduced its estimate for the amount of expected losses for general liability and professional liability and workers compensation claims, based on recent historical claims experience. The reduction in these accrued reserves decreased facility operating expense by $1.2 million and $3.7 million for the three months ended March 31, 2018 and 2017 , respectively. |
Lease Accounting | Lease Accounting The Company, as lessee, makes a determination with respect to each of its community leases as to whether each should be accounted for as an operating lease or capital lease. The classification criteria is based on estimates regarding the fair value of the leased community, minimum lease payments, effective cost of funds, the economic life of the community and certain other terms in the lease agreements. In a business combination, the Company assumes the lease classification previously determined by the prior lessee absent a modification, as determined by ASC 840, Leases ("ASC 840"), in the assumed lease agreement. Payments made under operating leases are accounted for in the Company's condensed consolidated statements of operations as lease expense for actual rent paid plus or minus a straight-line adjustment for estimated minimum lease escalators and amortization of deferred gains in situations where sale-leaseback transactions have occurred. For capital and financing lease obligation arrangements, a liability is established on the Company's condensed consolidated balance sheet representing the present value of the future minimum lease payments and a residual value for financing leases and a corresponding long-term asset is recorded in property, plant and equipment and leasehold intangibles in the condensed consolidated balance sheet. For capital lease assets, the asset is depreciated over the remaining lease term unless there is a bargain purchase option in which case the asset is depreciated over the useful life. For financing lease assets, the asset is depreciated over the useful life of the asset. Leasehold improvements purchased during the term of the lease are amortized over the shorter of their economic life or the lease term. All of the Company's leases contain fixed or formula-based rent escalators. To the extent that the escalator increases are tied to a fixed index or rate, lease payments are accounted for on a straight-line basis over the life of the lease. In addition, all rent-free or rent holiday periods are recognized in lease expense on a straight-line basis over the lease term, including the rent holiday period. Sale-leaseback accounting is applied to transactions in which an owned community is sold and leased back from the buyer if certain continuing involvement criteria are met. Under sale-leaseback accounting, the Company removes the community and related liabilities from the condensed consolidated balance sheet. Gain on the sale is deferred and recognized as a reduction of facility lease expense for operating leases and a reduction of interest expense for capital leases. In cases of sale-leaseback transactions in which the Company has continuing involvement, other than normal leasing activities, the Company does not record the sale until such involvement terminates. For leases in which the Company is involved with the construction of a building, the Company accounts for the leases during the construction period under the provisions of ASC 840. If the Company concludes that it has substantively all of the risks of ownership during construction of a leased property and therefore is deemed the owner of the project for accounting purposes, it records an asset and related financing obligation for the amount of total project costs related to construction in progress. Once construction is complete, the Company considers the requirements under ASC Subtopic 840-40. If the arrangement qualifies for sale-leaseback accounting, the Company removes the assets and related liabilities from the condensed consolidated balance sheet. If the arrangement does not qualify for sale-leaseback accounting, the Company continues to amortize the financing obligation and depreciate the assets over the lease term. |
Recently Adopted Accounting Pronouncements/Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update ("ASU") 2017-01, Business Combinations: Clarifying the Definition of a Business ("ASU 2017-01"). ASU 2017-01 clarifies the definition of a business to assist companies in determining whether transactions should be accounted for as an asset acquisition or a business combination. Under ASU 2017-01, if substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business and the transaction is accounted for as an asset acquisition. Transaction costs associated with asset acquisitions are capitalized while those associated with business combinations are expensed as incurred. The Company adopted ASU 2017-01 on a prospective basis on January 1, 2018. The Company anticipates that the changes to the definition of a business may result in future acquisitions of real estate, communities or senior housing operating companies being accounted for as asset acquisitions. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash, a consensus of the FASB Emerging Issues Task Force ("ASU 2016-18"). ASU 2016-18 intends to address the diversity in practice that exists in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted ASU 2016-18 on January 1, 2018 and the changes required by ASU 2016-18 were applied retrospectively to all periods presented. The Company has identified that the inclusion of the change in cash and escrow deposits restricted within the retrospective presentation of the statements of cash flows resulted in a $0.6 million decrease to the amount of net cash used in investing activities for the three months ended March 31, 2017 . In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). ASU 2016-15 clarifies how cash receipts and cash payments in certain transactions are presented in the statement of cash flows. Among other clarifications on the classification of certain transactions within the statement of cash flows, the amendments in ASU 2016-15 provide that debt prepayment and debt extinguishment costs will be classified within financing activities within the statement of cash flows. ASU 2016-15 is effective for the Company for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted ASU 2016-15 on January 1, 2018 and the changes in classification within the statement of cash flows were applied retrospectively to all periods presented. The Company's retrospective application resulted in an immaterial increase to the amount of net cash provided by operating activities and an immaterial decrease to the amount of net cash used in financing activities for the three months ended March 31, 2017 . In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. The five step model defined by ASU 2014-09 requires the Company to (i) identify the contracts with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when each performance obligation 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. Additionally, ASU 2014-09 requires enhanced disclosure of revenue arrangements. ASU 2014-09 may be applied retrospectively to each prior period (full retrospective) or retrospectively with the cumulative effect recognized as of the date of initial application (modified retrospective). ASU 2014-09, as amended, is effective for the Company's fiscal year beginning January 1, 2018, and the Company adopted the new standard under the modified retrospective approach. Under the modified retrospective approach, the guidance is applied to the most current period presented, recognizing the cumulative effect of the adoption change as an adjustment to beginning retained earnings. The Company has determined that the adoption of ASU 2014-09 did not result in an adjustment to retained earnings as of January 1, 2018. The Company has determined that there will be a change to the amounts of resident fee revenue and facility operating expense with no net impact to the amount of income from operations, for the impact of implicit price concessions on the estimation of the transaction price. The Company recognized $906.3 million of resident fee revenue and $632.3 million of facility operating expense for the three months ended March 31, 2018 . The impact to resident fee revenue and facility operating expenses as a result of applying ASC 606 was a decrease of $1.1 million for the three months ended March 31, 2018 . The Company has determined that there will not be any significant change to the annual amount of revenue recognized for management fees under the Company’s community management agreements, however, the Company will recognize an estimated amount of incentive fee revenue earlier during the annual contract period. The Company has determined that there will be a change to the amounts presented for revenue recognized for reimbursed costs incurred on behalf of managed communities and reimbursed costs incurred on behalf of managed communities with no net impact to the amount of income from operations, as a result of the combination of all community operations management activities as a single performance obligation for each contract. The Company recognized $262.3 million of revenue for reimbursed costs incurred on behalf of managed communities and $262.3 million of reimbursed costs incurred on behalf of managed communities for the three months ended March 31, 2018 in accordance with ASU 2014-09. The impact to revenue for reimbursed costs incurred on behalf of managed communities and reimbursed costs incurred on behalf of managed communities as a result of applying ASC 606 was an increase of $12.4 million for the three months ended March 31, 2018 . Additionally, real estate sales are within the scope of ASU 2014-09, as amended by ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets ("ASU 2017-05"). ASU 2017-05 clarifies the scope of subtopic 610-20 and adds guidance for partial sales of nonfinancial assets. Under ASU 2014-09 and ASU 2017-05, the income recognition for real estate sales is largely based on the transfer of control versus continuing involvement under the former guidance. As a result, more transactions may qualify as sales of real estate and gains or losses may be recognized sooner. The Company adopted ASU 2014-09, as amended by ASU 2017-5, under the modified retrospective approach as of January 1, 2018 and will apply the five step revenue model to all subsequent sales of real estate. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 replaces the current incurred loss impairment methodology for credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact the adoption of ASU 2016-13 will have on its condensed consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 amends the existing accounting principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ASU 2016-02 requires a lessee to recognize a right-of-use asset and a lease liability on the balance sheet for most leases. Additionally, ASU 2016-02 makes targeted changes to lessor accounting and requires enhanced disclosure of lease arrangements. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and early adoption is permitted. For the three months ended March 31, 2018 , the Company made cash lease payments of $89.6 million for long-term community leases accounted for as operating leases under ASC 840. The Company anticipates that the adoption of ASU 2016-02 will result in the recognition of material lease liabilities and right-of use assets on the condensed consolidated balance sheet for these community operating leases. The Company is monitoring recent accounting standard setting activities of the FASB and the Company continues to evaluate the impact that the adoption of ASU 2016-02 will have on its condensed consolidated financial statements and disclosures. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company's condensed consolidated financial position or results of operations. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of definite-lived intangible assets | Amortization of the Company's definite-lived intangible assets is computed using the straight-line method over the estimated useful lives of the assets, which are as follows: Asset Category Estimated Useful Life (in years) Trade names 2 – 5 Other 3 – 9 The following is a summary of other intangible assets. March 31, 2018 (in thousands) Gross Accumulated Net Community purchase options $ 4,738 $ — $ 4,738 Health care licenses 49,250 — 49,250 Trade names 27,800 (24,361 ) 3,439 Management contracts 10,680 (7,448 ) 3,232 Total $ 92,468 $ (31,809 ) $ 60,659 December 31, 2017 (in thousands) Gross Accumulated Net Community purchase options $ 9,533 $ — $ 9,533 Health care licenses 50,927 — 50,927 Trade names 27,800 (23,714 ) 4,086 Management contracts 11,360 (7,929 ) 3,431 Total $ 99,620 $ (31,643 ) $ 67,977 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Nonrecurring | The following is a summary of the goodwill and asset impairment expense. Three Months Ended March 31, (in millions) 2018 2017 Goodwill $ 351.7 $ — Property, plant and equipment and leasehold intangibles, net 40.8 1.0 Investment in unconsolidated ventures 33.4 19.7 Other intangible assets, net 1.7 — Assets held for sale 2.8 — Goodwill and asset impairment $ 430.4 $ 20.7 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Current year grants of restricted shares | Grants of restricted shares under the Company's 2014 Omnibus Incentive Plan were as follows: (share amounts in thousands, except for per share amounts) Shares Granted Weighted Average Grant Date Fair Value Total Value Three months ended March 31, 2018 3,387 $ 9.10 $ 30,823 |
Goodwill and Other Intangible29
Goodwill and Other Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of changes in the carrying amount of goodwill | The following is a summary of the carrying value of goodwill by operating segment. (in thousands) Retirement Centers Assisted Living Brookdale Ancillary Services Total Balance at January 1, 2018 $ 27,321 $ 351,652 $ 126,810 $ 505,783 Impairment — (351,652 ) — (351,652 ) Balance at March 31, 2018 $ 27,321 $ — $ 126,810 $ 154,131 |
Schedule of definite-lived intangible assets | Amortization of the Company's definite-lived intangible assets is computed using the straight-line method over the estimated useful lives of the assets, which are as follows: Asset Category Estimated Useful Life (in years) Trade names 2 – 5 Other 3 – 9 The following is a summary of other intangible assets. March 31, 2018 (in thousands) Gross Accumulated Net Community purchase options $ 4,738 $ — $ 4,738 Health care licenses 49,250 — 49,250 Trade names 27,800 (24,361 ) 3,439 Management contracts 10,680 (7,448 ) 3,232 Total $ 92,468 $ (31,809 ) $ 60,659 December 31, 2017 (in thousands) Gross Accumulated Net Community purchase options $ 9,533 $ — $ 9,533 Health care licenses 50,927 — 50,927 Trade names 27,800 (23,714 ) 4,086 Management contracts 11,360 (7,929 ) 3,431 Total $ 99,620 $ (31,643 ) $ 67,977 |
Schedule of indefinite-lived intangible assets | The following is a summary of other intangible assets. March 31, 2018 (in thousands) Gross Accumulated Net Community purchase options $ 4,738 $ — $ 4,738 Health care licenses 49,250 — 49,250 Trade names 27,800 (24,361 ) 3,439 Management contracts 10,680 (7,448 ) 3,232 Total $ 92,468 $ (31,809 ) $ 60,659 December 31, 2017 (in thousands) Gross Accumulated Net Community purchase options $ 9,533 $ — $ 9,533 Health care licenses 50,927 — 50,927 Trade names 27,800 (23,714 ) 4,086 Management contracts 11,360 (7,929 ) 3,431 Total $ 99,620 $ (31,643 ) $ 67,977 |
Property, Plant and Equipment30
Property, Plant and Equipment and Leasehold Intangibles, Net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment and leasehold intangibles, net | As of March 31, 2018 and December 31, 2017 , net property, plant and equipment and leasehold intangibles, which include assets under capital and financing leases, consisted of the following: (in thousands) March 31, 2018 December 31, 2017 Land $ 452,677 $ 449,295 Buildings and improvements 4,941,781 4,923,621 Leasehold improvements 130,337 124,850 Furniture and equipment 1,035,909 1,006,889 Resident and leasehold operating intangibles 597,828 594,748 Construction in progress 55,747 74,678 Assets under capital and financing leases 1,738,167 1,742,384 8,952,446 8,916,465 Accumulated depreciation and amortization (3,176,950 ) (3,064,320 ) Property, plant and equipment and leasehold intangibles, net $ 5,775,496 $ 5,852,145 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Long-term debt and capital and financing lease obligations consist of the following: (in thousands) March 31, 2018 December 31, 2017 Mortgage notes payable due 2018 through 2047; weighted average interest rate of 4.64% for the three months ended March 31, 2018, less debt discount and deferred financing costs of $17.1 million and $16.6 million as of March 31, 2018 and December 31, 2017, respectively (weighted average interest rate of 4.59% in 2017) $ 3,482,476 $ 3,497,762 Capital and financing lease obligations payable through 2032; weighted average interest rate of 7.24% for the three months ended March 31, 2018 (weighted average interest rate of 6.75% in 2017) 1,257,085 1,271,554 Convertible notes payable in aggregate principal amount of $316.3 million, less debt discount and deferred financing costs of $2.6 million and $6.4 million as of March 31, 2018 and December 31, 2017, respectively, interest at 2.75% per annum, due June 15, 2018 313,626 309,853 Notes payable issued to finance insurance premiums, weighted average interest rate of 3.44% for the three months ended March 31, 2018 19,859 — Other notes payable, weighted average interest rate of 5.95% for the three months ended March 31, 2018 (weighted average interest rate of 5.98% in 2017) and maturity dates ranging from 2020 to 2021 62,349 63,122 Total long-term debt and capital and financing lease obligations 5,135,395 5,142,291 Less current portion 605,006 602,501 Total long-term debt and capital and financing lease obligations, less current portion $ 4,530,389 $ 4,539,790 |
Supplemental Disclosure of Ca32
Supplemental Disclosure of Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental cash flow information | Three Months Ended (in thousands) 2018 2017 Supplemental Disclosure of Cash Flow Information: Interest paid $ 62,721 $ 81,094 Income taxes paid, net of refunds $ (128 ) $ (107 ) Additions to property, plant and equipment and leasehold intangibles, net: Property, plant and equipment and leasehold intangibles, net $ 49,496 $ 43,830 Accounts payable 17,096 5,098 Net cash paid $ 66,592 $ 48,928 Acquisition of assets, net of related payables: Property, plant and equipment and leasehold intangibles, net $ 32,126 $ — Other intangible assets, net (4,796 ) — Net cash paid $ 27,330 $ — Proceeds from sale of assets, net: Prepaid expenses and other assets $ (579 ) $ (356 ) Assets held for sale (18,758 ) (5,621 ) Property, plant and equipment and leasehold intangibles, net (978 ) — Investments in unconsolidated ventures (20,084 ) (26,301 ) Refundable entrance fees and deferred revenue 8,345 — Other liabilities 425 — (Gain) loss on sale of assets, net (43,431 ) 603 Net cash received $ (75,060 ) $ (31,675 ) Formation of the Blackstone Venture: Prepaid expenses and other assets $ — $ (8,173 ) Property, plant and equipment and leasehold intangibles, net — (768,897 ) Investments in unconsolidated ventures — 66,816 Capital and financing lease obligations — 879,959 Deferred liabilities — 7,504 Other liabilities — 1,998 Net cash paid $ — $ 179,207 Supplemental Schedule of Non-cash Operating, Investing and Financing Activities: Assets designated as held for sale: Prepaid expenses and other assets $ — $ 106 Assets held for sale (3,336 ) (14,122 ) Property, plant and equipment and leasehold intangibles, net 3,336 14,016 Net $ — $ — The following table provides a reconciliation of cash and cash equivalents and restricted cash and escrow deposits reported within the condensed consolidated statement of cash flows that sums to the total of the same such amounts shown in the condensed consolidated statement of cash flows. March 31, 2018 December 31, 2017 Reconciliation of cash and cash equivalents and restricted cash and escrow deposits: Cash and cash equivalents $ 335,412 $ 222,647 Cash and escrow deposits – restricted 32,393 37,189 Long-term cash and escrow deposits – restricted 27,756 22,710 Total cash and cash equivalents and restricted cash and escrow deposits shown in the condensed consolidated statement of cash flows $ 395,561 $ 282,546 |
Facility Operating Leases (Tabl
Facility Operating Leases (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of facility operating leases | A summary of facility lease expense and the impact of straight-line adjustment and amortization of (above) below market rents and deferred gains are as follows: Three Months Ended (in thousands) 2018 2017 Cash basis payment $ 89,593 $ 94,604 Straight-line (income) expense (6,165 ) (3,007 ) Amortization of (above) below market lease, net (1,938 ) (1,697 ) Amortization of deferred gain (1,090 ) (1,093 ) Facility lease expense $ 80,400 $ 88,807 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Variable Interest Entities | The carrying value and classification of the related assets, liabilities and maximum exposure to loss as a result of the Company's involvement with these VIEs are summarized below as of March 31, 2018 (in millions): VIE Type Asset Type Maximum Exposure to Loss Carrying Value CCRC Venture opco Investment in unconsolidated ventures $ 31.3 $ 31.3 RIDEA Venture Investment in unconsolidated ventures $ 20.6 $ 20.6 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | disaggregates its revenue from contracts with customers by payor source, as the Company believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. See details on a reportable segment basis in the table below. Three Months Ended March 31, 2018 (in thousands) Retirement Centers Assisted Living CCRCs-Rental Brookdale Ancillary Services Total Private pay $ 157,507 $ 514,264 $ 70,721 $ 269 $ 742,761 Government reimbursement 890 18,016 23,706 92,627 135,239 Other third-party payor programs — — 10,642 17,624 28,266 Total resident fee revenue $ 158,397 $ 532,280 $ 105,069 $ 110,520 $ 906,266 Three Months Ended March 31, 2017 (in thousands) Retirement Centers Assisted Living CCRCs-Rental Brookdale Ancillary Services Total Private pay $ 171,617 $ 569,953 $ 94,623 $ 151 $ 836,344 Government reimbursement 1,003 20,584 32,828 98,534 152,949 Other third-party payor programs — — 14,347 13,287 27,634 Total resident fee revenue $ 172,620 $ 590,537 $ 141,798 $ 111,972 $ 1,016,927 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | The following table sets forth selected segment financial and operating data: Three Months Ended (in thousands) 2018 2017 Revenue: Retirement Centers (1) $ 158,397 $ 172,620 Assisted Living (1) 532,280 590,537 CCRCs-Rental (1) 105,069 141,798 Brookdale Ancillary Services (1) 110,520 111,972 Management Services (2) 280,968 199,839 $ 1,187,234 $ 1,216,766 Segment Operating Income: (3) Retirement Centers $ 64,422 $ 74,002 Assisted Living 176,538 217,439 CCRCs-Rental 24,663 35,315 Brookdale Ancillary Services 8,318 15,629 Management Services 18,681 15,894 292,622 358,279 General and administrative (including non-cash stock-based compensation expense) 76,710 65,560 Transaction costs 4,725 7,593 Facility lease expense 80,400 88,807 Depreciation and amortization 114,255 127,487 Goodwill and asset impairment 430,363 20,706 Income (loss) from operations $ (413,831 ) $ 48,126 As of (in thousands) March 31, 2018 December 31, 2017 Total assets: Retirement Centers $ 1,255,585 $ 1,266,076 Assisted Living 4,134,795 4,535,114 CCRCs-Rental 637,545 667,234 Brookdale Ancillary Services 248,763 257,257 Corporate and Management Services 910,740 949,768 $ 7,187,428 $ 7,675,449 (1) All revenue is earned from external third parties in the United States. (2) Management services segment revenue includes management fees and reimbursements of costs incurred on behalf of managed communities. (3) Segment operating income is defined as segment revenues less segment facility operating expenses (excluding depreciation and amortization) and costs incurred on behalf of managed communities. |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair Value of Financial Instruments [Line Items] | ||
Term of residency agreements- minimum | 30 days | |
Term of residency agreements - maximum | 1 year | |
Decrease in facility operating expense | $ 1,200 | $ 3,700 |
Decrease in net cash used in investing activities | (91,155) | 199,743 |
Resident fees | 906,266 | 1,016,927 |
Facility operating expenses | 632,325 | 674,542 |
Reimbursed costs incurred on behalf of managed communities | 262,287 | 183,945 |
Costs incurred on behalf of managed communities | 262,287 | 183,945 |
Cash lease payments | $ 89,593 | 94,604 |
Trade names [Member] | Minimum [Member] | ||
Fair Value of Financial Instruments [Line Items] | ||
Useful lives of definite lived assets | 2 years | |
Trade names [Member] | Maximum [Member] | ||
Fair Value of Financial Instruments [Line Items] | ||
Useful lives of definite lived assets | 5 years | |
Other Intangible Assets [Member] | Minimum [Member] | ||
Fair Value of Financial Instruments [Line Items] | ||
Useful lives of definite lived assets | 3 years | |
Other Intangible Assets [Member] | Maximum [Member] | ||
Fair Value of Financial Instruments [Line Items] | ||
Useful lives of definite lived assets | 9 years | |
Accounting Standards Update 2016-18 [Member] | ||
Fair Value of Financial Instruments [Line Items] | ||
Decrease in net cash used in investing activities | $ 600 | |
Accounting Standards Update 2014-09 [Member] | ||
Fair Value of Financial Instruments [Line Items] | ||
Decrease in resident fee revenue and facility operating expenses | $ 1,100 | |
Increase in revenue | $ 12,400 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Jun. 30, 2011 | |
Unvested Restricted Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (shares) | 7 | 5.2 | ||
Convertible Debt Securities [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (shares) | 13.8 | 13.8 | ||
Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (shares) | 10.8 | 10.8 | ||
Convertible Debt [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Principal | $ 316.3 | $ 316.3 | ||
Convertible Senior Notes Due June 2018 [Member] | Convertible Debt [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Principal | $ 316.3 | |||
Interest rate | 2.75% | |||
Maximum number of convertible instruments (shares) | 3 |
Acquisitions, Dispositions an39
Acquisitions, Dispositions and Other Significant Transactions - Additional Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)community | Mar. 31, 2017USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Resident fee revenue | $ | $ 906,266 | $ 1,016,927 |
Facility operating expenses | $ | 632,325 | 674,542 |
Cash lease payments | $ | $ 89,593 | 94,604 |
111 Communities Disposed Of By Sales And Lease Terminations [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of communities disposed of | community | 111 | |
Resident fee revenue | $ | $ 2,200 | 107,600 |
Facility operating expenses | $ | $ 2,100 | 81,000 |
Cash lease payments | $ | $ 27,800 | |
6 Communities Disposed Of By Sales [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of communities disposed of | community | 6 | |
105 Communities Disposed Of By Lease Terminations [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of communities disposed of | community | 105 | |
Assisted Living [Member] | 111 Communities Disposed Of By Sales And Lease Terminations [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of communities disposed of | community | 88 | |
Retirement Centers [Member] | 111 Communities Disposed Of By Sales And Lease Terminations [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of communities disposed of | community | 10 | |
CCRCs Rental [Member] | 111 Communities Disposed Of By Sales And Lease Terminations [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of communities disposed of | community | 13 |
Acquisitions, Dispositions an40
Acquisitions, Dispositions and Other Significant Transactions - HCP Master Lease Transaction and RIDEA Ventures Restructuring (Details) $ in Thousands | Nov. 01, 2018community | Jan. 01, 2018USD ($)community | Nov. 02, 2017USD ($)communityjoint_venture | Apr. 30, 2018USD ($)community | Mar. 31, 2018USD ($) | Jan. 31, 2018USD ($)community | Dec. 31, 2017USD ($)community | Mar. 31, 2018USD ($)communityjoint_venture | Mar. 31, 2017USD ($) | Dec. 31, 2018community | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | |||||||||||
Non-cash management contract termination fee | $ 2,242 | $ 0 | |||||||||
Gain (loss) on sale of assets, net | 43,431 | (603) | |||||||||
Resident fee revenue | 906,266 | 1,016,927 | |||||||||
Management fees revenue | 18,681 | 15,894 | |||||||||
Facility operating expenses | 632,325 | 674,542 | |||||||||
Cash lease payments | 89,593 | 94,604 | |||||||||
Master Lease Transactions [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total communities disposed of | community | 35 | ||||||||||
Annual rent reduction | $ 2,500 | ||||||||||
Number of communities with rent reduction | community | 2 | ||||||||||
Deferred revenue | $ 9,700 | $ 9,700 | |||||||||
RIDEA Ventures Restructuring [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of communities management is retained | community | 18 | ||||||||||
HCP, Inc. [Member] | Master Lease Transactions [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of communities acquired | community | 2 | 1 | |||||||||
Payments to acquire joint ventures | $ 35,400 | $ 32,100 | |||||||||
Number of communities leased | community | 43 | ||||||||||
Forecast [Member] | Master Lease Transactions [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of communities disposed of | community | 29 | 33 | |||||||||
Subsequent Event [Member] | HCP, Inc. [Member] | Master Lease Transactions [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of communities acquired | community | 3 | ||||||||||
Payments to acquire joint ventures | $ 207,400 | ||||||||||
RIDEA Ventures [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Percentage ownership | 10.00% | 10.00% | |||||||||
Number of joint ventures | joint_venture | 1 | ||||||||||
RIDEA Ventures [Member] | RIDEA Ventures Restructuring [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Percentage ownership | 10.00% | 10.00% | 10.00% | 10.00% | |||||||
Number of joint ventures | 2 | 1 | |||||||||
Proceeds from sale of joint venture interest | $ 62,300 | $ 32,100 | |||||||||
Number of communities managed | community | 59 | ||||||||||
RIDEA Ventures [Member] | HCP, Inc. [Member] | RIDEA Ventures Restructuring [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Gain (loss) on sale of assets, net | 42,300 | $ 7,200 | |||||||||
4 Communities Disposed Of Through Lease Terminations [Member] | HCP, Inc. [Member] | Master Lease Transactions [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of communities disposed of | community | 4 | ||||||||||
37 Communities Disposed Of Through Management Termination [Member] | RIDEA Ventures Restructuring [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of communities disposed of | community | 37 | 10 | |||||||||
Non-cash management contract termination fee | $ 2,200 | ||||||||||
37 Communities Disposed Of Through Management Termination [Member] | Forecast [Member] | RIDEA Ventures Restructuring [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of communities disposed of | community | 27 | ||||||||||
33 Communities Disposed Of Through Lease Terminations [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Capital Lease Obligations | 389,400 | 389,400 | |||||||||
Reduction in capital lease obligations and assets under lease | $ 145,600 | ||||||||||
Assets under leases | 341,400 | 341,400 | |||||||||
Amount exceeding carrying value of assets under leases | $ 48,000 | $ 48,000 | |||||||||
Number of communities | community | 20 | ||||||||||
Resident fee revenue | $ 35,800 | 37,300 | |||||||||
Management fees revenue | 2,100 | 2,100 | |||||||||
Facility operating expenses | 24,500 | 22,900 | |||||||||
Cash lease payments | $ 11,800 | $ 12,000 | |||||||||
Retirement Centers [Member] | 33 Communities Disposed Of Through Lease Terminations [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of communities disposed of | community | 5 | ||||||||||
Assisted Living [Member] | 33 Communities Disposed Of Through Lease Terminations [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of communities disposed of | community | 27 | ||||||||||
CCRCs Rental [Member] | 33 Communities Disposed Of Through Lease Terminations [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of communities disposed of | community | 1 |
Acquisitions, Dispositions an41
Acquisitions, Dispositions and Other Significant Transactions - Formation of Venture with Blackstone(Details) $ in Thousands | Mar. 29, 2017USD ($)community | Mar. 31, 2018USD ($)community | Mar. 31, 2017USD ($) |
Business Acquisition [Line Items] | |||
Payments to acquire joint venture | $ 8,434 | $ 185,971 | |
Goodwill and asset impairment | $ 430,363 | 20,706 | |
Change in valuation allowance | 11,800 | ||
HCP, Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Term of lease | 12 years | ||
Formation of Blackstone Joint Venture [Member] | |||
Business Acquisition [Line Items] | |||
Change in valuation allowance | 85,000 | ||
Joint Venture [Member] | Blackstone Venture [Member] | |||
Business Acquisition [Line Items] | |||
Number of community leasehold interests contributed | community | 62 | ||
Payments to acquire joint venture | $ 179,200 | ||
Percentage ownership | 15.00% | ||
Carrying value of investment | $ 66,800 | ||
Fair value of investment | $ 47,100 | ||
Goodwill and asset impairment | $ 19,700 | ||
Joint Venture [Member] | Blackstone Venture [Member] | Senior Housing Communities [Member] | |||
Business Acquisition [Line Items] | |||
Number of communities acquired | community | 64 | ||
Purchase price | $ 1,100,000 | ||
Number of communities managed by third party | community | 2 | ||
Blackstone Venture [Member] | |||
Business Acquisition [Line Items] | |||
Percentage ownership | 15.00% | ||
Number of communities leased | community | 2 | 2 | |
Number of communities managed | community | 60 |
Acquisitions, Dispositions an42
Acquisitions, Dispositions and Other Significant Transactions - Dispositions of Owned Communities and Assets Held for Sale (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)community | Mar. 31, 2017USD ($)community | Dec. 31, 2017USD ($)community | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain (loss) on sale of assets, net | $ 43,431 | $ (603) | |
Assets held for sale | 88,505 | $ 106,435 | |
Resident fee revenue | 906,266 | 1,016,927 | |
Facility operating expenses | $ 632,325 | $ 674,542 | |
Sale of 3 communities [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of communities disposed of | community | 3 | ||
Net cash proceeds | $ 8,200 | ||
43 Communities Disposed Of By Lease Terminations [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of communities disposed of | community | 43 | ||
26 Communities Disposed Of By Lease Terminations [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of communities disposed of | community | 26 | ||
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations [Member] | 15 Communities Held For Sale [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of communities classified as held for sale | community | 15 | ||
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations [Member] | Three Communities [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of communities disposed of | community | 3 | ||
Net cash proceeds | $ 12,800 | ||
Gain (loss) on sale of assets, net | $ 1,900 | ||
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations [Member] | 14 Communities Held For Sale [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of communities classified as held for sale | community | 14 | ||
Assets held for sale | $ 88,500 | ||
Resident fee revenue | 9,100 | $ 9,500 | |
Facility operating expenses | $ 8,000 | $ 7,700 | |
Assisted Living [Member] | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations [Member] | 14 Communities Held For Sale [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of communities classified as held for sale | community | 12 | ||
CCRCs Rental [Member] | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations [Member] | 14 Communities Held For Sale [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of communities classified as held for sale | community | 2 | ||
Mortgages [Member] | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations [Member] | 14 Communities Held For Sale [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Mortgage debt | $ 30,000 | $ 30,100 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 174,649 | $ 291,796 |
Gains related to trading securities | 600 | |
Debt | 5,135,395 | 5,142,291 |
Goodwill impairment | 351,652 | |
Reported Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 3,900,000 | $ 3,900,000 |
Assisted Living [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Amount of carrying amount in excess of fair value | 351,700 | |
Goodwill impairment | 351,652 | |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 174,600 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - Unvested Restricted Stock [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted Shares Granted (in shares) | shares | 3,387 |
Value Per Share (in dollars per share) | $ / shares | $ 9.10 |
Total value of restricted shares granted | $ | $ 30,823 |
Fair Value Measurements - Goodw
Fair Value Measurements - Goodwill and Asset Impairment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill | $ 351,652 | |
Goodwill and asset impairment | 430,363 | $ 20,706 |
Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill | 351,700 | 0 |
Property, plant and equipment and leasehold intangibles, net | 40,800 | 1,000 |
Investment in unconsolidated ventures | 33,400 | 19,700 |
Other intangible assets, net | 1,700 | 0 |
Assets held for sale | 2,800 | 0 |
Goodwill and asset impairment | $ 430,400 | $ 20,700 |
Goodwill and Other Intangible46
Goodwill and Other Intangible Assets, Net - Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balance at January 1, 2018 | $ 505,783 |
Impairment | (351,652) |
Balance at March 31, 2018 | 154,131 |
Retirement Centers [Member] | |
Goodwill [Roll Forward] | |
Balance at January 1, 2018 | 27,321 |
Impairment | 0 |
Balance at March 31, 2018 | 27,321 |
Assisted Living [Member] | |
Goodwill [Roll Forward] | |
Balance at January 1, 2018 | 351,652 |
Impairment | (351,652) |
Balance at March 31, 2018 | 0 |
Brookdale Ancillary Services [Member] | |
Goodwill [Roll Forward] | |
Balance at January 1, 2018 | 126,810 |
Impairment | 0 |
Balance at March 31, 2018 | $ 126,810 |
Goodwill and Other Intangible47
Goodwill and Other Intangible Assets, Net - Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Accumulated Amortization | $ (31,809) | $ (31,643) |
Intangible assets, gross carrying amount | 92,468 | 99,620 |
Intangible assets, net | 60,659 | 67,977 |
Community Purchase Options [Member] | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Indefinite lived assets, gross carrying amount | 4,738 | 9,533 |
Health care licenses [Member] | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Indefinite lived assets, gross carrying amount | 49,250 | 50,927 |
Trade names [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived assets, gross carrying amount | 27,800 | 27,800 |
Accumulated Amortization | (24,361) | (23,714) |
Finite lived assets, net | 3,439 | 4,086 |
Management Contracts [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived assets, gross carrying amount | 10,680 | 11,360 |
Accumulated Amortization | (7,448) | (7,929) |
Finite lived assets, net | $ 3,232 | $ 3,431 |
Goodwill and Other Intangible48
Goodwill and Other Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense related to definite-lived intangible assets | $ 0.8 | $ 0.9 |
Property, Plant and Equipment49
Property, Plant and Equipment and Leasehold Intangibles, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment and leasehold intangibles gross | $ 8,952,446 | $ 8,916,465 | |
Accumulated depreciation and amortization | (3,176,950) | (3,064,320) | |
Property, plant and equipment and leasehold intangibles, net | 5,775,496 | 5,852,145 | |
Depreciation and amortization expense | 113,400 | $ 126,600 | |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment and leasehold intangibles gross | 452,677 | 449,295 | |
Buildings and Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment and leasehold intangibles gross | 4,941,781 | 4,923,621 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment and leasehold intangibles gross | 130,337 | 124,850 | |
Furniture and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment and leasehold intangibles gross | 1,035,909 | 1,006,889 | |
Resident and Leasehold Operating Intangibles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment and leasehold intangibles gross | 597,828 | 594,748 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment and leasehold intangibles gross | 55,747 | 74,678 | |
Assets Under Capital and Financing Leases [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment and leasehold intangibles gross | $ 1,738,167 | $ 1,742,384 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Long-Term Debt, Capital and Financing Leases and Financing Obligations [Line Items] | ||
Total long-term debt and capital and financing lease obligations | $ 5,135,395 | $ 5,142,291 |
Less current portion | 605,006 | 602,501 |
Total long-term debt and capital and financing lease obligations, less current portion | 4,530,389 | 4,539,790 |
Mortgages [Member] | ||
Long-Term Debt, Capital and Financing Leases and Financing Obligations [Line Items] | ||
Total long-term debt and capital and financing lease obligations | 3,482,476 | 3,497,762 |
Unamortized debt discount | $ 17,100 | $ 16,600 |
Weighted average interest rate | 4.64% | 4.59% |
Capital and Financing Lease Obligations [Member] | ||
Long-Term Debt, Capital and Financing Leases and Financing Obligations [Line Items] | ||
Total long-term debt and capital and financing lease obligations | $ 1,257,085 | $ 1,271,554 |
Weighted average interest rate | 7.24% | 6.75% |
Convertible Debt [Member] | ||
Long-Term Debt, Capital and Financing Leases and Financing Obligations [Line Items] | ||
Total long-term debt and capital and financing lease obligations | $ 313,626 | $ 309,853 |
Principal | 316,300 | 316,300 |
Unamortized debt discount | $ 2,600 | $ 6,400 |
Weighted average interest rate | 2.75% | 2.75% |
Notes Payable, Insurance Premiums [Member] | ||
Long-Term Debt, Capital and Financing Leases and Financing Obligations [Line Items] | ||
Total long-term debt and capital and financing lease obligations | $ 19,859 | $ 0 |
Weighted average interest rate | 3.44% | |
Other Notes Payable [Member] | ||
Long-Term Debt, Capital and Financing Leases and Financing Obligations [Line Items] | ||
Total long-term debt and capital and financing lease obligations | $ 62,349 | $ 63,122 |
Weighted average interest rate | 5.95% | 5.98% |
Debt - Debt (Details)
Debt - Debt (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
14 Communities Held For Sale [Member] | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations [Member] | Mortgages [Member] | ||
Debt Instrument [Line Items] | ||
Mortgage debt | $ 30 | $ 30.1 |
Debt - Line of Credit (Details)
Debt - Line of Credit (Details) - Fourth Amended and Restated Credit Agreement [Member] - Line of Credit [Member] - USD ($) | Dec. 19, 2014 | Mar. 31, 2018 |
Credit Facilities [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 400,000,000 | |
Percentage of loan availability from pledged assets that cannot exceed availability from mortgaged assets | 10.00% | |
Line of credit | $ 0 | |
Letters of credit issued | 64,400,000 | |
Applicable Margin, Less Than Or Equal To 35% Utilization [Member] | ||
Credit Facilities [Line Items] | ||
Percentage of utilization | 35.00% | |
Applicable Margin, Greater Than 50% Utilization [Member] | ||
Credit Facilities [Line Items] | ||
Percentage of utilization | 50.00% | |
Unused Commitment Fee, Outstanding Debt Percentage Greater Than Or Equal To 50% [Member] | ||
Credit Facilities [Line Items] | ||
Quarterly commitment fee | 0.25% | |
Outstanding debt percentage | 50.00% | |
Unused Commitment Fee, Outstanding Debt Percentage Less Than 50% [Member] | ||
Credit Facilities [Line Items] | ||
Quarterly commitment fee | 0.35% | |
Outstanding debt percentage | 50.00% | |
Minimum [Member] | Applicable Margin, Greater Than 35% But Less Than Or Equal To 50% Utilization [Member] | ||
Credit Facilities [Line Items] | ||
Percentage of utilization | 35.00% | |
Maximum [Member] | Applicable Margin, Greater Than 35% But Less Than Or Equal To 50% Utilization [Member] | ||
Credit Facilities [Line Items] | ||
Percentage of utilization | 50.00% | |
LIBOR [Member] | Applicable Margin, Less Than Or Equal To 35% Utilization [Member] | ||
Credit Facilities [Line Items] | ||
Basis spread on variable rate basis | 2.50% | |
LIBOR [Member] | Applicable Margin, Greater Than 35% But Less Than Or Equal To 50% Utilization [Member] | ||
Credit Facilities [Line Items] | ||
Basis spread on variable rate basis | 3.25% | |
LIBOR [Member] | Applicable Margin, Greater Than 50% Utilization [Member] | ||
Credit Facilities [Line Items] | ||
Basis spread on variable rate basis | 3.50% | |
LIBOR [Member] | Minimum [Member] | ||
Credit Facilities [Line Items] | ||
Basis spread on variable rate basis | 2.50% | |
LIBOR [Member] | Maximum [Member] | ||
Credit Facilities [Line Items] | ||
Basis spread on variable rate basis | 3.50% | |
Revolving Credit Facility [Member] | ||
Credit Facilities [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 400,000,000 | |
Letter of credit sublimit [Member] | ||
Credit Facilities [Line Items] | ||
Credit facility, maximum borrowing capacity | 50,000,000 | |
Letters of credit issued | 41,800,000 | |
Swingline Line of Credit [Member] | ||
Credit Facilities [Line Items] | ||
Credit facility, maximum borrowing capacity | 50,000,000 | |
Option to increase maximum borrowing capacity [Member] | ||
Credit Facilities [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 250,000,000 | |
Letter of Credit [Member] | ||
Credit Facilities [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 66,200,000 |
Debt - 2018 Financings_Converti
Debt - 2018 Financings/Convertible Debt (Details) $ in Millions | 1 Months Ended | |||
Apr. 30, 2018USD ($)community | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2011USD ($) | |
Convertible Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 316.3 | $ 316.3 | ||
Convertible Debt [Member] | Convertible Senior Notes Due June 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 316.3 | |||
Fixed rate | 2.75% | |||
Convertible debt | $ 313.6 | |||
Subsequent Event [Member] | ||||
Debt Instrument [Line Items] | ||||
Number of communities expected to be acquired | community | 5 | |||
Subsequent Event [Member] | Mortgages [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage of principal bearing fixed rate | 60.00% | |||
Fixed rate | 4.55% | |||
Percentage of principal bearing variable rate | 40.00% | |||
Subsequent Event [Member] | Mortgages [Member] | Non-Recourse Supplemental Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 247.6 | |||
Subsequent Event [Member] | Mortgages [Member] | Mortgage Debt Due May 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Extinguishment of debt | $ 43 | |||
Subsequent Event [Member] | Secured Debt [Member] | Non-Recourse First Mortgages [Member] | ||||
Debt Instrument [Line Items] | ||||
Number of communities securing debt | community | 11 | |||
Subsequent Event [Member] | LIBOR [Member] | Mortgages [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate basis | 1.89% |
Supplemental Disclosure of Ca54
Supplemental Disclosure of Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Supplemental Cash Flow Information [Abstract] | ||||
Interest paid | $ 62,721 | $ 81,094 | ||
Income taxes paid, net of refunds | (128) | (107) | ||
Net cash paid | 66,592 | 48,928 | ||
Net cash paid | 27,330 | 0 | ||
Prepaid expenses and other assets | (24,807) | (8,630) | ||
Cash and cash equivalents | 335,412 | $ 222,647 | ||
Cash and escrow deposits – restricted | 32,393 | 37,189 | ||
Long-term cash and escrow deposits – restricted | 27,756 | 22,710 | ||
Total cash and cash equivalents and restricted cash and escrow deposits shown in the condensed consolidated statement of cash flows | 395,561 | 120,791 | $ 282,546 | $ 277,322 |
Additions to property, plant and equipment and leasehold intangibles, net [Member] | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Property, plant and equipment and leasehold intangibles, net | 49,496 | 43,830 | ||
Accounts payable | (17,096) | (5,098) | ||
Net cash paid | 66,592 | 48,928 | ||
Acquisition of assets, net of related payables [Member] | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Property, plant and equipment and leasehold intangibles, net | 32,126 | 0 | ||
Other intangible assets, net | 4,796 | 0 | ||
Net cash paid | 27,330 | 0 | ||
Proceeds from sale of assets, net [Member] | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Prepaid expenses and other assets | (579) | (356) | ||
Assets held for sale | (18,758) | (5,621) | ||
Property, plant and equipment and leasehold intangibles, net | (978) | 0 | ||
Investments in unconsolidated ventures | 20,084 | 26,301 | ||
Refundable entrance fees and deferred revenue | 8,345 | 0 | ||
Other liabilities | 425 | 0 | ||
(Gain) loss on sale of assets, net | (43,431) | 603 | ||
Net cash received | (75,060) | (31,675) | ||
Formation of Blackstone Joint Venture [Member] | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Prepaid expenses and other assets | 0 | (8,173) | ||
Investments in unconsolidated ventures | 0 | 66,816 | ||
Capital and financing lease obligations | 0 | 879,959 | ||
Deferred liabilities | 0 | 7,504 | ||
Other liabilities | 0 | 1,998 | ||
Property, plant and equipment and leasehold intangibles, net | 0 | (768,897) | ||
Net cash paid | 0 | 179,207 | ||
Assets designated as held for sale [Member] | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Prepaid expenses and other assets | 0 | (106) | ||
Assets held for sale | 3,336 | 14,122 | ||
Property, plant and equipment and leasehold intangibles, net | 3,336 | 14,016 | ||
Net | $ 0 | $ 0 |
Facility Operating Leases (Deta
Facility Operating Leases (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)lease | Mar. 31, 2017USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Number of communities operated under long-term leases | lease | 434 | |
Number of operating leases | lease | 290 | |
Number of capital and financing leases | lease | 144 | |
Schedule of facility operating lease expense [Abstract] | ||
Cash basis payment | $ 89,593 | $ 94,604 |
Straight-line (income) expense | (6,165) | (3,007) |
Amortization of (above) below market lease, net | (1,938) | (1,697) |
Amortization of deferred gain | (1,090) | (1,093) |
Facility lease expense | $ 80,400 | $ 88,807 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Valuation Allowance [Line Items] | |||
Change in valuation allowance | $ 11.8 | ||
Deferred federal, state and local tax benefit | $ 9.5 | 13.5 | |
Valuation allowance | 360.7 | $ 336.1 | |
Formation of Blackstone Joint Venture [Member] | |||
Valuation Allowance [Line Items] | |||
Change in valuation allowance | 85 | ||
Adoption Of Accounting Standards Update 2016-09 [Member] | |||
Valuation Allowance [Line Items] | |||
Change in valuation allowance | 48.5 | ||
Federal and State [Member] | |||
Valuation Allowance [Line Items] | |||
Change in valuation allowance | $ 24.6 | $ 96.8 |
Variable Interest Entities (Det
Variable Interest Entities (Details) $ in Millions | Mar. 29, 2017community | Mar. 31, 2018USD ($)communityjoint_venture |
CCRC Venture opco [Member] | ||
Variable Interest Entity [Line Items] | ||
Percentage ownership in unconsolidated joint ventures | 51.00% | |
Maximum Exposure to Loss | $ 31.3 | |
Carrying Amount | $ 31.3 | |
RIDEA Ventures [Member] | ||
Variable Interest Entity [Line Items] | ||
Percentage ownership in unconsolidated joint ventures | 10.00% | |
Number of joint ventures | joint_venture | 1 | |
Maximum Exposure to Loss | $ 20.6 | |
Carrying Amount | $ 20.6 | |
Blackstone Venture [Member] | ||
Variable Interest Entity [Line Items] | ||
Percentage ownership in unconsolidated joint ventures | 15.00% | |
Number of communities managed | community | 60 | |
Number of communities leased | community | 2 | 2 |
Lease payments | $ 2.6 | |
Fair market value of communities | $ 33.8 | |
HCP, Inc. [Member] | CCRC Venture opco [Member] | ||
Variable Interest Entity [Line Items] | ||
Percentage ownership in unconsolidated joint ventures | 49.00% |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 906,266 | $ 1,016,927 |
Private Pay [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 742,761 | 836,344 |
Government Reimbursement [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 135,239 | 152,949 |
Other Third-Party Payor Programs [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 28,266 | 27,634 |
Retirement Centers [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 158,397 | 172,620 |
Retirement Centers [Member] | Private Pay [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 157,507 | 171,617 |
Retirement Centers [Member] | Government Reimbursement [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 890 | 1,003 |
Retirement Centers [Member] | Other Third-Party Payor Programs [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Assisted Living [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 532,280 | 590,537 |
Assisted Living [Member] | Private Pay [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 514,264 | 569,953 |
Assisted Living [Member] | Government Reimbursement [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 18,016 | 20,584 |
Assisted Living [Member] | Other Third-Party Payor Programs [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
CCRCs Rental [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 105,069 | 141,798 |
CCRCs Rental [Member] | Private Pay [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 70,721 | 94,623 |
CCRCs Rental [Member] | Government Reimbursement [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 23,706 | 32,828 |
CCRCs Rental [Member] | Other Third-Party Payor Programs [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 10,642 | 14,347 |
Brookdale Ancillary Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 110,520 | 111,972 |
Brookdale Ancillary Services [Member] | Private Pay [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 269 | 151 |
Brookdale Ancillary Services [Member] | Government Reimbursement [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 92,627 | 98,534 |
Brookdale Ancillary Services [Member] | Other Third-Party Payor Programs [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 17,624 | $ 13,287 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Monthly resident fees | $ 62.1 | $ 49.7 |
Revenue recognized | 60.9 | |
Additions for allowance for doubtful accounts | 4.5 | |
Deferred Revenue And Credits [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Deferred revenue | $ 122.4 | $ 112.4 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 5 | ||
Revenue | $ 1,187,234 | $ 1,216,766 | |
Segment Operating Income | 292,622 | 358,279 | |
General and administrative (including non-cash stock-based compensation expense) | 76,710 | 65,560 | |
Transaction costs | 4,725 | 7,593 | |
Facility lease expense | 80,400 | 88,807 | |
Depreciation and amortization | 114,255 | 127,487 | |
Goodwill and asset impairment | 430,363 | 20,706 | |
Income (loss) from operations | (413,831) | 48,126 | |
Total assets | $ 7,187,428 | $ 7,675,449 | |
Retirement Centers [Member] | |||
Segment Reporting Information [Line Items] | |||
Age of residential tenant | 75 years | ||
Operating Segments [Member] | Retirement Centers [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 158,397 | 172,620 | |
Segment Operating Income | 64,422 | 74,002 | |
Total assets | 1,255,585 | 1,266,076 | |
Operating Segments [Member] | Assisted Living [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 532,280 | 590,537 | |
Segment Operating Income | 176,538 | 217,439 | |
Total assets | 4,134,795 | 4,535,114 | |
Operating Segments [Member] | CCRCs Rental [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 105,069 | 141,798 | |
Segment Operating Income | 24,663 | 35,315 | |
Total assets | 637,545 | 667,234 | |
Operating Segments [Member] | Brookdale Ancillary Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 110,520 | 111,972 | |
Segment Operating Income | 8,318 | 15,629 | |
Total assets | 248,763 | 257,257 | |
Operating Segments [Member] | Management Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 280,968 | 199,839 | |
Segment Operating Income | 18,681 | $ 15,894 | |
Total assets | $ 910,740 | $ 949,768 |
Subsequent Event (Details)
Subsequent Event (Details) - Ventas, Inc [Member] - Master Lease And Security Agreement [Member] | Apr. 26, 2018USD ($)communityextension_option | Dec. 31, 2018USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Apr. 26, 2019USD ($) |
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Number of communities leased | community | 128 | |||||
Prior number of communities | community | 107 | |||||
Additional number of communities | community | 21 | |||||
Number of extensions | extension_option | 2 | |||||
Extension term | 10 years | |||||
Investment minimum, unit per lease | $ 2,000 | |||||
Period of lease | 24 months | |||||
Payment for change of control fees | $ 25,000,000 | |||||
Forecast [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Rent expense | $ 175,000,000 | |||||
Rent credit | 8,000,000 | $ 5,000,000 | $ 7,000,000 | $ 8,000,000 | ||
Rent credit after change of control | $ 5,000,000 | |||||
Base rent escalator, CPI increase | 2.25% | |||||
Base rent escalator, CPI decrease | 0.00% | |||||
Option to terminate, annual base rent | $ 30,000,000 | |||||
Option to terminate, rent reduction percentage | 6.25% |