Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | May 01, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-16817 | |
Entity Registrant Name | FIVE STAR SENIOR LIVING INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 04-3516029 | |
Entity Address, Address Line One | 400 Centre Street | |
Entity Address, City or Town | Newton | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02458 | |
City Area Code | 617 | |
Local Phone Number | 796-8387 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | FVE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,675,843 | |
Entity Central Index Key | 0001159281 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance | $ 3,248 | $ 3,149 |
Investments, restricted | $ 10,965 | $ 11,125 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 31,676,429 | 31,679,207 |
Common stock, shares outstanding (in shares) | 31,676,429 | 31,679,207 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
REVENUES | ||
Total revenues | $ 269,100 | $ 297,445 |
Other operating income | 7,793 | 0 |
OPERATING EXPENSES | ||
General and administrative | 22,641 | 22,865 |
Depreciation and amortization | 2,940 | 2,701 |
Total operating expenses | 273,230 | 288,821 |
Operating income (loss) | 3,663 | 8,624 |
Interest, dividend and other income | 84 | 339 |
Interest and other expense | (463) | (382) |
Unrealized gain (loss) on equity investments | 135 | (1,462) |
Realized gain (loss) on sale of debt and equity investments | 96 | (21) |
Loss on termination of leases | 0 | (22,899) |
Income (loss) before income taxes | 3,515 | (15,801) |
Provision for income taxes | (200) | (1,408) |
Net income (loss) | $ 3,315 | $ (17,209) |
Weighted average shares outstanding—basic (in shares) | 31,530 | 31,448 |
Weighted average shares outstanding—diluted (in shares) | 31,662 | 31,448 |
Net income (loss) per share—basic (in dollars per share) | $ 0.11 | $ (0.55) |
Net income (loss) per share—diluted (in dollars per share) | $ 0.10 | $ (0.55) |
Rehabilitation and wellness services | ||
REVENUES | ||
Total revenues | $ 19,553 | $ 21,384 |
OPERATING EXPENSES | ||
Cost of revenues | 16,210 | 17,501 |
Senior living | ||
REVENUES | ||
Total revenues | 17,057 | 20,997 |
Management fees | ||
REVENUES | ||
Total revenues | 13,850 | 17,051 |
Total management and operating revenues | ||
REVENUES | ||
Total revenues | 50,460 | 59,432 |
Reimbursed community-level costs incurred on behalf of managed communities | ||
REVENUES | ||
Total revenues | 213,160 | 232,016 |
OPERATING EXPENSES | ||
Cost of revenues | 213,160 | 232,016 |
Other reimbursed expenses | ||
REVENUES | ||
Total revenues | 5,480 | 5,997 |
Senior living wages and benefits | ||
OPERATING EXPENSES | ||
Cost of revenues | 12,013 | 9,800 |
Other senior living operating expenses | ||
OPERATING EXPENSES | ||
Cost of revenues | $ 6,266 | $ 3,938 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 3,315 | $ (17,209) |
Other comprehensive income (loss): | ||
Unrealized (loss) gain on debt investments, net of tax of $0 | (294) | 427 |
Realized loss on debt investments reclassified and included in net income (loss), net of tax of $0 | 0 | (10) |
Other comprehensive (loss) income | (294) | 417 |
Comprehensive income (loss) | $ 3,021 | $ (16,792) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Tax on unrealized loss on debt investments | $ 0 | $ 0 |
Tax on realized (gain) loss on debt investments | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income | Accumulated Other Comprehensive IncomeCumulative Effect, Period of Adoption, Adjustment |
Beginning balance (in shares) at Dec. 31, 2019 | 5,154,892 | |||||||
Beginning balance at Dec. 31, 2019 | $ 119,981 | $ 0 | $ 52 | $ 362,450 | $ (245,184) | $ 1,694 | $ 2,663 | $ (1,694) |
Comprehensive income (loss): | ||||||||
Net income (loss) | (17,209) | (17,209) | ||||||
Unrealized gain loss on debt investments, net of tax | 427 | 427 | ||||||
Realized gain on debt investments reclassified and included in net loss, net of tax | (10) | (10) | ||||||
Total comprehensive income (loss) | (16,792) | (17,209) | 417 | |||||
Issuance of common shares (in shares) | 26,387,007 | |||||||
Issuance of common shares | 97,340 | $ 264 | 97,076 | |||||
Grants under share award plan and share based compensation (in shares) | 4,000 | |||||||
Grants under share award plan and share-based compensation | 81 | 81 | ||||||
Repurchases under share award plan (in shares) | (3,564) | |||||||
Repurchases under share award plan | (1) | (1) | ||||||
Ending balance (in shares) at Mar. 31, 2020 | 31,542,335 | |||||||
Ending balance at Mar. 31, 2020 | $ 200,609 | $ 316 | 459,606 | (260,699) | 1,386 | |||
Beginning balance (in shares) at Dec. 31, 2020 | 31,679,207 | 31,679,207 | ||||||
Beginning balance at Dec. 31, 2020 | $ 210,532 | $ 317 | 460,038 | (251,139) | 1,316 | |||
Comprehensive income (loss): | ||||||||
Net income (loss) | 3,315 | 3,315 | ||||||
Unrealized gain loss on debt investments, net of tax | (294) | (294) | ||||||
Total comprehensive income (loss) | 3,021 | 3,315 | (294) | |||||
Grants under share award plan and share-based compensation | 76 | 76 | ||||||
Repurchases under share award plan (in shares) | (2,778) | |||||||
Repurchases under share award plan | $ (1) | (1) | ||||||
Ending balance (in shares) at Mar. 31, 2021 | 31,676,429 | 31,676,429 | ||||||
Ending balance at Mar. 31, 2021 | $ 213,628 | $ 317 | $ 460,113 | $ (247,824) | $ 1,022 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 3,315 | $ (17,209) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 2,940 | 2,701 |
Unrealized (gain) loss on equity securities | (135) | 1,462 |
Realized (gain) loss on sale of debt and equity securities | (96) | 21 |
Loss on termination of leases | 0 | 22,899 |
Share-based compensation | 75 | 80 |
Provision for losses on accounts receivables | 260 | 510 |
Other non-cash expense adjustments, net | 157 | 69 |
Changes in assets and liabilities: | ||
Accounts receivable | (714) | 22,739 |
Due from related person | 10,153 | (15,391) |
Prepaid expenses and other current assets | 5,870 | 2,276 |
Accounts payable | 947 | (10,342) |
Accrued expenses and other current liabilities | 3,332 | 13,078 |
Accrued compensation and benefits | 3,132 | (16,180) |
Due to related persons | (2,726) | (1,102) |
Other current and long-term liabilities | 316 | (144) |
Net cash provided by operating activities | 26,826 | 5,467 |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Acquisition of property and equipment | (2,136) | (2,013) |
Purchases of debt and equity investments | (130) | (1,588) |
Proceeds from sale of property and equipment | 0 | 2,725 |
Proceeds from sale of debt and equity investments | 337 | 1,453 |
Net cash (used in) provided by investing activities | (1,929) | 577 |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Costs related to issuance of common stock | 0 | (559) |
Repayments of mortgage notes payable | (103) | (95) |
Net cash used in financing activities | (103) | (654) |
Increase in cash and cash equivalents and restricted cash and cash equivalents | 24,794 | 5,390 |
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period | 109,597 | 56,979 |
Cash and cash equivalents and restricted cash and cash equivalents at end of period | 134,391 | 62,369 |
Reconciliation of cash and cash equivalents and restricted cash and cash equivalents: | ||
Cash and cash equivalents and restricted cash and cash equivalents at end of period | 134,391 | 62,369 |
Supplemental cash flow information: | ||
Interest paid | 203 | 122 |
Income taxes paid (refunded), net | 1 | (117) |
Non-cash investing and financing activities: | ||
Liabilities assumed related to issuance of our common stock | 0 | 51,547 |
Change in accrued capital | $ (20) | $ 4,326 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||||
Cash and cash equivalents | $ 109,485 | $ 84,351 | $ 36,641 | |
Restricted cash and cash equivalents | 23,717 | 23,877 | ||
Accounts receivable, net of allowance of $3,248 and $3,149, respectively | 9,558 | 9,104 | ||
Due from related person | 86,204 | 96,357 | ||
Debt and equity investments, of which $10,965 and $11,125 are restricted, respectively | 19,528 | 19,961 | ||
Prepaid expenses and other current assets | 22,376 | 28,658 | ||
Total current assets | 270,868 | 262,308 | ||
Property and equipment, net | 158,716 | 159,251 | ||
Operating lease right-of-use assets | 27,040 | 18,030 | ||
Finance lease right-of-use assets | 4,160 | 4,493 | ||
Restricted cash and cash equivalents | 1,189 | 1,369 | ||
Restricted debt and equity investments | 4,945 | 4,788 | ||
Equity investment of an investee, net | 11 | 11 | ||
Other long-term assets | 4,201 | 3,956 | ||
Total assets | 471,130 | 454,206 | ||
Current liabilities: | ||||
Accounts payable | 24,401 | 23,454 | ||
Accrued expenses and other current liabilities | 45,190 | 41,843 | ||
Accrued compensation and benefits | 73,675 | 70,543 | ||
Accrued self-insurance obligations | 28,155 | 31,355 | ||
Operating lease liabilities | 2,230 | 2,567 | ||
Finance lease liabilities | 824 | 808 | ||
Due to related persons | 3,859 | 6,585 | ||
Mortgage note payable | 394 | 388 | ||
Security deposits and current portion of continuing care contracts | 338 | 365 | ||
Total current liabilities | 179,066 | 177,908 | ||
Long-term liabilities: | ||||
Accrued self-insurance obligations | 41,098 | 37,420 | ||
Operating lease liabilities | 26,472 | 17,104 | ||
Finance lease liabilities | 3,710 | 3,921 | ||
Mortgage note payable | 6,682 | 6,783 | ||
Other long-term liabilities | 474 | 538 | ||
Total long-term liabilities | 78,436 | 65,766 | ||
Commitments and contingencies | ||||
Shareholders’ equity: | ||||
Common stock, par value $0.01: 75,000,000 shares authorized, 31,676,429 and 31,679,207 shares issued and outstanding, respectively | 317 | 317 | ||
Additional paid-in-capital | 460,113 | 460,038 | ||
Accumulated deficit | (247,824) | (251,139) | ||
Accumulated other comprehensive income | 1,022 | 1,316 | ||
Total shareholders’ equity | 213,628 | 210,532 | $ 200,609 | $ 119,981 |
Total liabilities and shareholders' equity | $ 471,130 | $ 454,206 |
Basis of Presentation and Organ
Basis of Presentation and Organization | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Organization | Basis of Presentation and Organization General. The accompanying condensed consolidated financial statements of Five Star Senior Living Inc. and its subsidiaries are unaudited. Certain information and disclosures required by the rules and regulations of the Securities and Exchange Commission, or SEC, and U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted pursuant to SEC rules and regulations related to interim financial statements. We believe the disclosures made are adequate to make the information presented not misleading. As of March 31, 2021, we managed or operated 252 senior living communities located in 31 states with 29,265 living units, including 243 primarily independent and assisted living communities with 28,310 living units, which include 37 continuing care retirement communities, or CCRCs, with 8,573 living units, and 9 primarily skilled nursing facilities, or SNFs, with 955 living units. As of March 31, 2021, we managed 228 of these senior living communities (26,963 living units), we owned and operated 20 of these senior living communities ( 2,099 living units) and we leased and operated four of these senior living communities (203 living units). Our 252 senior living communities, as of March 31, 2021, included 10,979 independent living apartments, 15,329 assisted living suites (which includes 3,220 of our Bridge to Rediscovery memory care units) and 2,957 SNF units. The foregoing numbers exclude living units categorized as out of service. Our rehabilitation and wellness services segment, which is primarily comprised of Ageility Physical Therapy Solutions, or Ageility, provides a comprehensive suite of rehabilitation and wellness services at our senior living communities as well as at outpatient clinics located at unaffiliated senior living communities. As of March 31, 2021, we operated 37 inpatient rehabilitation and wellness services clinics in senior living communities owned by Diversified Healthcare Trust, or DHC, which are managed by us. As of March 31, 2021, we operated 215 outpatient rehabilitation and wellness services clinics, of which 151 were located at our managed, leased and owned senior living communities and 64 were located within senior living communities not owned or leased by us or managed on behalf of DHC. Strategic Plan . On April 9, 2021, we announced a new strategic plan, or the Strategic Plan, to reposition the Company's senior living management business to focus on larger independent living, assisted living and memory care communities as well as stand-alone independent living and active adult communities. Pursuant to our Strategic Plan, we intend to, among other things, (i) amend our management arrangements with DHC to transition 108 senior living communities, with approximately 7,500 living units, that we currently manage for DHC, to new operators, (ii) close and reposition 27 skilled nursing units, with approximately 1,500 living units, in CCRCs that we will continue to manage for DHC and (iii) close 37 Ageility inpatient rehabilitation clinics in certain transitioning communities. As part of our Strategic Plan, we have agreed to amend our management agreements with DHC. See Notes 11 and 16 for more information on our Strategic Plan and our business arrangements with DHC. Reclassifications . We have made reclassifications to the financial statements of prior periods to conform to the current period presentation. These reclassifications had no effect on net income (loss) or shareholders’ equity. The accompanying financial statements should be read in conjunction with the financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2020, or our Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Estimates and Assumptions. The preparation of these financial statements in conformity with GAAP requires us to make estimates and assumptions that may affect the amounts reported in these condensed consolidated financial statements and related notes. Significant estimates in our condensed consolidated financial statements relate to revenue recognition, including contractual allowances, the allowance for doubtful accounts, self-insurance reserves and estimates concerning our provision for income taxes or valuation allowance related to deferred tax assets. Our actual results could differ from our estimates. We periodically review estimates and assumptions and we reflect the effects of changes, if any, in the condensed consolidated financial statements in the period that they are determined. Recently Issued Accounting Pronouncements Not Yet Adopted. In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-13, Financial Instruments-Credit Losses (Topic 326) , which requires a financial asset or a group of financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This ASU eliminates the probable initial recognition threshold and instead requires reflection of an entity’s current estimate of all expected credit losses. In addition, this ASU amends the current other-than-temporary impairment model for available for sale debt securities. The length of time that the fair value of an available for sale debt security has been below the amortized cost will no longer impact the determination of whether a credit loss exists and credit losses will now be limited to the difference between a security’s amortized cost basis and its fair value. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses , which amends the transition and effective date for nonpublic entities and smaller reporting companies, such as us, and clarifies that receivables arising from operating leases are not in the scope of this ASU. In November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326 , Financial Instruments-Credit Losses , which clarifies guidance around how to report expected recoveries. Entities will apply the provisions of the ASU as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. This ASU is effective for smaller reporting companies for reporting periods beginning after December 15, 2022. We are assessing the potential impact that the adoption of this ASU (and the related clarifying guidance issued by the FASB) will have on our condensed consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions on contract modifications meeting certain criteria to ease the financial reporting burdens of the expected market transition from the London Inter-bank Offered Rate, or LIBOR, and other interbank offered rates to the alternative reference rates. For a contract that meets the criteria, this ASU generally allows an entity to account for and present modifications as an event that does not require remeasurement at the modification date or reassessment of a previous accounting determination. This ASU was effective upon issuance and can be applied through December 31, 2022. We expect this ASU will not have a material impact on our condensed consolidated financial statements. |
Revenue and Other Operating Inc
Revenue and Other Operating Income | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue and Other Operating Income | Revenue and Other Operating Income The following tables present revenue from contracts by segment with customers disaggregated by type of payer, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors: Three Months Ended March 31, 2021 Senior Rehabilitation and Wellness Services (3) Total Private payer $ 16,787 $ 1,014 $ 17,801 Medicare and Medicaid programs 270 11,549 11,819 Other third-party payer programs — 6,990 6,990 Management fees 13,850 (1) (2) — 13,850 Reimbursed community-level costs incurred on behalf of managed communities 213,160 (1) — 213,160 Other reimbursed expenses 5,480 (1) — 5,480 Total revenues $ 249,547 $ 19,553 $ 269,100 _______________________________________ (1) Represents separate revenue streams earned from DHC. (2) As noted previously, in 2021 we intend to (i) transition 108 senior living communities managed on behalf of DHC with approximately 7,500 living units to new operators and (ii) close and reposition approximately 1,500 skilled nursing facility units in 27 CCRCs that we will continue to manage for DHC. The management fees we recognized related to these communities and units for the three months ended March 31, 2021 was $5,255. See Notes 11 and 16 for more information. (3) As noted previously we expect to close 37 Ageility inpatient rehabilitation clinics during 2021. Revenue related to these clinics for the three months ended March 31, 2021 was $5,441. See Note 16 for more information. Three Months Ended March 31, 2020 Senior Rehabilitation and Wellness Services Total Private payer $ 20,281 $ 897 $ 21,178 Medicare and Medicaid programs 716 9,570 10,286 Other third-party payer programs — 10,917 10,917 Management fees 17,051 (1) — 17,051 Reimbursed community-level costs incurred on behalf of managed communities 232,016 (1) — 232,016 Other reimbursed expenses 5,997 (1) — 5,997 Total revenues $ 276,061 $ 21,384 $ 297,445 _______________________________________ (1) Represents separate revenue streams earned from DHC. Other operating income. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law. Under the CARES Act, the U.S. Department of Health and Human Services, or HHS, established the Provider Relief Fund. The Provider Relief Fund was further supplemented on December 27, 2020 by the Consolidated Appropriations Act, 2021. Retention and use of the funds received under the CARES Act are subject to certain terms and conditions, including certain reporting requirements. Other operating income includes income recognized for funds we have received pursuant to the Provider Relief Fund of the CARES Act for which we have determined that we were in compliance with the terms and conditions of the Provider Relief Fund of the CARES Act. We recognize other operating income in our condensed consolidated statements of operations to the extent we estimate we have COVID-19 incurred losses or related costs for which provisions of the CARES Act is intended to compensate. The amount of income we recognize for these estimated losses and costs is limited to the amount of funds we received during the period in which the estimated losses and costs were recognized or incurred or, if funds were received subsequently, the period in which the funds were received. We recognized other operating income of $7,793 for the three months ended March 31, 2021. See Note 15 for more information. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We do not allocate assets to operating segments and, therefore, no asset information is provided for reportable segments. Certain of our general and administrative expenses incurred at our corporate office are deemed centralized services and allocated amongst operating segments. Centralized services are largely determined by job function and allocated by percentage of total revenue. Results of operations and selected financial information by reportable segment and the reconciliation to the condensed consolidated financial statements are as follows: Three Months Ended March 31, 2021 Senior Living (1) Rehabilitation and Wellness Services (2) Corporate and Other Total Revenues $ 249,547 $ 19,553 $ — $ 269,100 Other operating income 7,774 19 — 7,793 Operating expenses 237,957 16,338 18,935 273,230 Operating income 19,364 3,234 (18,935) 3,663 Allocated corporate and other costs (12,657) (978) 13,635 — Other (loss), net (122) — (26) (148) Income (loss) before income taxes 6,585 2,256 (5,326) 3,515 Provision for income taxes — — (200) (200) Net income (loss) $ 6,585 $ 2,256 $ (5,526) $ 3,315 _______________________________________ (1) As noted previously, in 2021 we intend to (i) transition 108 senior living communities managed on behalf of DHC with approximately 7,500 living units to new operators and (ii) close and reposition approximately 1,500 skilled nursing facility units in 27 CCRCs that we will continue to manage for DHC. See Notes 11 and 16 for more information. (2) As noted previously, we expect to close 37 Ageility inpatient rehabilitation clinics during 2021. See Note 16 for more information. Three Months Ended March 31, 2020 Senior Rehabilitation and Wellness Services Corporate and Other Total Revenues $ 276,061 $ 21,384 $ — $ 297,445 Operating expenses 255,619 17,616 15,586 288,821 Operating income (loss) 20,442 3,768 (15,586) 8,624 Allocated corporate and other costs (15,618) (1,068) 16,686 — Other income (loss), net 41 — (24,466) (24,425) Income (loss) before income taxes 4,865 2,700 (23,366) (15,801) Provision for income taxes — — (1,408) (1,408) Net income (loss) $ 4,865 $ 2,700 $ (24,774) $ (17,209) |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net consist of the following: March 31, 2021 December 31, 2020 Land $ 12,155 $ 12,155 Buildings, construction in process and improvements 203,646 202,679 Furniture, fixtures and equipment 61,902 60,713 Property and equipment, at cost 277,703 275,547 Less: accumulated depreciation (118,987) (116,296) Property and equipment, net $ 158,716 $ 159,251 We recorded depreciation expense relating to our property and equipment of $2,691 and $2,701 for the three months ended March 31, 2021 and 2020, respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The following tables detail the changes in accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, 2021 Equity Investments Accumulated Balance at January 1, 2021 $ (175) $ 1,491 $ 1,316 Unrealized loss on debt investments, net of tax — (294) (294) Balance at March 31, 2021 $ (175) $ 1,197 $ 1,022 Three Months Ended March 31, 2020 Equity Investments Accumulated Balance at January 1, 2020 $ (175) $ 2,838 $ 2,663 Cumulative effect adjustment to beginning accumulated deficit and accumulated other comprehensive income in connection with a reclassification of equity investments previously classified as debt investments — (1,694) (1,694) Unrealized gain on debt investments, net of tax — 427 427 Realized gain on debt investments reclassified and included in net loss, net of tax — (10) (10) Balance at March 31, 2020 $ (175) $ 1,561 $ 1,386 Accumulated other comprehensive income represents the unrealized gains and losses of our debt investments, net of tax, and our share of other comprehensive income (loss) relating to our former investment in Affiliates Insurance Company, or AIC, which dissolved on February 13, 2020. The cost of debt investments sold and for which realized gains and losses are reclassified and included in net income are determined on a specific identification basis. As of January 1, 2020, we reclassified certain of our investments from debt investments to equity investments to reflect the nature of the investment rather than the nature of the securities held by the investment. As a result, we reclassified the related unrealized gain of $1,694 from accumulated other comprehensive income to accumulated deficit on January 1, 2020. See Note 9 for more information regarding these investments. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We recognized a provision for income taxes of $200 and $1,408 for the three months ended March 31, 2021 and 2020, respectively. The provision for income taxes for the three months ended March 31, 2021 is related to state income taxes. The provision for income taxes for the three months ended March 31, 2020 is related to federal income taxes, partially offset by a federal alternative minimum tax, or AMT, credit refund benefit and a federal benefit related to lease termination expense, plus state income taxes, including a state valuation allowance. See Note 15 for more information regarding the impact of certain provisions of the CARES Act relating to income and other taxes. We previously determined it was more likely than not that a majority of our net deferred tax assets would not be realized and concluded that a valuation allowance was required, which eliminated the majority of our net deferred tax assets recorded in our condensed consolidated balance sheets. In the future, if we believe that we will more likely than not realize the benefit of these deferred tax assets, we will adjust our valuation allowance and recognize an income tax benefit, which may affect our results of operations. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per ShareBasic net income per share is calculated by dividing net income (loss) by the weighted average number of outstanding common shares outstanding during the period. When applicable, net income (loss) per share—diluted reflects the more dilutive earnings per share using the weighted average number of our common shares calculated using the two-class method, or the treasury stock method. The following table provides a reconciliation of the weighted average number of common shares used in the calculation of basic and diluted net income (loss) per share (in thousands): Three Months Ended March 31, 2021 2020 Weighted average shares outstanding—basic 31,530 31,448 Effect of dilutive securities: unvested share awards 132 — Weighted average shares outstanding—diluted (1) 31,662 31,448 _______________________________________ (1) For the three months ended March 31, 2020, 124 of our unvested common shares were not included in the calculation of net loss per share—diluted because to do so would have been anti-dilutive. |
Fair Values of Assets and Liabi
Fair Values of Assets and Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Values of Assets and Liabilities | Fair Values of Assets and Liabilities Recurring Fair Value Measures The tables below present certain of our assets measured at fair value at March 31, 2021 and December 31, 2020, categorized by the level of input used in the valuation of each asset. As of March 31, 2021 Description Total Quoted Prices in Significant Significant Cash equivalents (1) $ 26,231 $ 26,231 $ — $ — Investments: Equity investments (2) High yield fund (3) 3,162 — 3,162 — International bond fund (4) 2,781 — 2,781 — Financial services industry 1,376 1,376 — — Healthcare 492 492 — — Technology 801 801 — — Other 3,851 3,851 — — Total equity investments 12,463 6,520 5,943 — Debt investments (5) Industrial bonds 529 — 529 — Technology bonds 1,443 — 1,443 — Government bonds 7,123 7,123 — — Energy bonds 478 — 478 — Financial bonds 1,330 — 1,330 — Other 1,107 — 1,107 — Total debt investments 12,010 7,123 4,887 — Total investments 24,473 13,643 10,830 — Total $ 50,704 $ 39,874 $ 10,830 $ — As of December 31, 2020 Description Total Quoted Prices in Significant Significant Cash equivalents (1) $ 26,291 $ 26,291 $ — $ — Investments: Equity investments (2) High yield fund (3) 3,156 — 3,156 — International bond fund (4) 2,818 — 2,818 — Financial services industry 1,348 1,348 — — Healthcare 477 477 — — Technology 765 765 — — Other 3,875 3,875 — — Total equity investments 12,439 6,465 5,974 — Debt investments (5) Industrial bonds 540 — 540 — Technology bonds 1,471 — 1,471 — Government bonds 7,301 7,301 — — Energy bonds 484 — 484 — Financial bonds 1,359 — 1,359 — Other 1,155 — 1,155 — Total debt investments 12,310 7,301 5,009 — Total investments 24,749 13,766 10,983 — Total $ 51,040 $ 40,057 $ 10,983 $ — _______________________________________ (1) Cash equivalents consist of short-term, highly liquid investments and money market funds held primarily for obligations arising from our self-insurance programs. Cash equivalents are reported in our condensed consolidated balance sheets as cash and cash equivalents and current and long-term restricted cash and cash equivalents. Cash equivalents include $22,531 and $22,837 of balances that were restricted at March 31, 2021 and December 31, 2020, respectively. In addition to the cash equivalents of $26,231 and $26,291 at March 31, 2021 and December 31, 2020, respectively, reflected above, there were cash balances of $105,785 and $80,897 and restricted cash balances of $2,375 and $2,409 at March 31, 2021 and December 31, 2020, respectively. (2) The fair value of our equity investments is readily determinable. During the three months ended March 31, 2021 and March 31, 2020, we received gross proceeds of $337 and $45, respectively, in connection with the sales of equity investments and recorded gross realized gains totaling $96 and $0, respectively, and gross realized losses totaling $0 and $30, respectively. (3) The investment strategy of this fund is to invest principally in fixed income securities. The fund invests in such securities or investment vehicles it considers appropriate to achieve the fund’s investment objective, which is to provide an above average rate of total return while attempting to limit investment risk by investing in a diversified portfolio of primarily fixed income securities issued by companies with below investment grade ratings. There are no unfunded commitments and the investment can be redeemed weekly. (4) The investment strategy of this fund is to invest principally in fixed income securities issued by non-U.S. issuers. The fund invests in such securities or investment vehicles as it considers appropriate to achieve the fund’s investment objective, which is to provide an above average rate of total return while attempting to limit investment risk by investing in a diversified portfolio of U.S. dollar investment-grade fixed income securities. There are no unfunded commitments and the investment can be redeemed weekly. (5) As of March 31, 2021, our debt investments, which are classified as available for sale, had a fair value of $12,010 with an amortized cost of $11,548; the difference between the fair value and amortized cost amounts resulted from unrealized gains of $462, net of unrealized losses of $36. As of December 31, 2020, our debt investments had a fair value of $12,310 with an amortized cost of $11,554; the difference between the fair value and amortized cost amounts resulted from unrealized gains of $756, net of unrealized losses of $4. Debt investments include $8,187 and $8,395 of balances that were restricted as of March 31, 2021 and December 31, 2020, respectively. At March 31, 2021, four debt investments we held, with a fair value of $778, had been in a loss position for less than 12 months and we did not hold any debt investments with a fair value in a loss position for greater than 12 months. We do not believe these investments are impaired primarily because they have not been in a loss position for an extended period of time, the financial conditions of the issuers of these investments remain strong with solid fundamentals as of March 31, 2021, we do not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery, and other factors that support our conclusion that the loss is temporary. During the three months ended March 31, 2021 and 2020, we received gross proceeds of $0 and $1,409, respectively, in connection with the sales of debt investments and recorded gross realized gains totaling $0 and $10, respectively. There were no gross realized losses for the three months ended March 31, 2021 and 2020, respectively. We record gains and losses on the sales of these investments using the specific identification method. The amortized cost basis and fair value of available for sale debt securities at March 31, 2021, by contractual maturity, are shown below. Amortized Cost Fair Value Due in one year or less $ 1,796 $ 1,826 Due after one year through five years 5,522 5,773 Due after five years through ten years 4,230 4,411 Total $ 11,548 $ 12,010 Our financial assets (which include cash equivalents and investments) have been valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third-party pricing services or other market observable data. During the three months ended March 31, 2021, we did not change the type of inputs used to determine the fair value of any of our assets and liabilities that we measure at fair value. The carrying value of accounts receivable and accounts payable approximates fair value as of March 31, 2021 and December 31, 2020. The carrying value and fair value of our mortgage notes payable were $7,076 and $7,818, respectively, as of March 31, 2021 and $7,171 and $8,177, respectively, as of December 31, 2020, and are categorized in Level 3 of the fair value hierarchy. We estimate the fair value of our mortgage note payable by using discounted cash flow analyses and currently prevailing market terms as of the measurement date. Non-Recurring Fair Value Measures We review the carrying value of our long-lived assets, including our right-of-use assets, property and equipment and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. |
Indebtedness
Indebtedness | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness Our $65,000 secured revolving credit facility, or Credit Facility, is governed by a credit agreement with a syndicate of lenders. The current maturity date of our Credit Facility is June 12, 2021. On March 16, 2021, we exercised our option to extend the Credit Facility for one-year, until June 12, 2022, subject to payment of the extension fee and satisfaction of other conditions. Our Credit Facility is available for general business purposes, including acquisitions, and provides for the issuance of letters of credit. We are required to pay interest at a rate of LIBOR plus a premium of 250 basis points per annum, or at a base rate, as defined in our Credit Agreement, plus 150 basis points per annum, on borrowings under our Credit Facility; the effective annual interest rate options, as of March 31, 2021, were 2.61% and 4.75%, respectively. We are also required to pay a quarterly commitment fee of 0.35% per annum on the unused portion of the available capacity under our Credit Facility. As of March 31, 2021 and 2020, we had no borrowings outstanding under our Credit Facility. As of March 31, 2021, we had letters of credit issued under the Credit Facility in an aggregate amount of $2,442 and we had $14,935 available for borrowings under our Credit Facility. We incurred aggregate interest expense related to our Credit Facility of $253 and $254 for the three months ended March 31, 2021 and 2020, respectively. Our Credit Facility is secured by 11 senior living communities we own with a combined 1,236 living units owned by certain of our subsidiaries that guarantee our obligations under our Credit Facility. Our Credit Facility is also secured by these senior living communities' accounts receivable and related collateral. The amount of available borrowings under our Credit Facility is subject to our having sufficient qualified collateral, which is primarily based on the value and operating performance of the communities securing our obligations under our Credit Facility. Our Credit Facility provides for the acceleration of payment of all amounts outstanding under our Credit Facility upon the occurrence and continuation of certain events of default, including a change of control of us, as defined in our Credit Agreement. Our Credit Agreement contains financial and other covenants, including those that restrict our ability to pay dividends or make other distributions to our shareholders in certain circumstances. At March 31, 2021, we had seven irrevocable standby letters of credit outstanding, totaling $29,292. One of these letters of credit in the amount of $26,850, which secures our workers' compensation insurance program, is collateralized by approximately $21,566 of cash equivalents and $7,723 of debt and equity investments. This letter of credit expires in June 2021 and is automatically extended for one-year terms unless notice of nonrenewal is provided prior to the end of the applicable term. As of May 5, 2021, we have not received a notice of nonrenewal. We expect that our worker's compensation insurance program will require an increase in the amount of this letter of credit in June 2021. At March 31, 2021, the cash equivalents collateralizing this letter of credit are classified as short-term restricted cash and cash equivalents in our condensed consolidated balance sheets, and the debt and equity investments collateralizing this letter of credit are classified as short-term restricted debt and equity investments in our condensed consolidated balance sheets. The remaining six irrevocable standby letters of credit outstanding at March 31, 2021, totaling $2,442, which are issued under the Credit Facility, secure certain of our other obligations. As of May 5, 2021, these letters of credit were scheduled to mature between June 2021 and September 2021 and are required to be renewed annually. At March 31, 2021, one of our senior living communities was encumbered by a mortgage note. This mortgage note contains standard mortgage covenants. We recorded a discount in connection with the assumption of this mortgage note as part of our acquisition of the senior living community secured by this mortgage in order to record this mortgage note at its then estimated fair value. We amortize this discount as an increase in interest expense until the maturity of this mortgage note. This mortgage note requires payments of principal and interest monthly until maturity. The following table is a summary of this mortgage note as of March 31, 2021: Balance as of Contractual Stated Effective Maturity Date Monthly Lender $ 7,297 (1) 6.20 % 6.70 % September 2032 $ 72 Federal Home Loan Mortgage Corporation _______________________________________ (1) Contractual principal payments excluding unamortized discount $221. We incurred interest expense, net of discount amortization, of $122 and $128 with respect to the mortgage note for the three months ended March 31, 2021 and 2020, respectively. We believe we were in compliance with all applicable covenants under our Credit Facility and mortgage note as of March 31, 2021. |
Leases with DHC and Healthpeak
Leases with DHC and Healthpeak Properties Inc. and Management Agreements with DHC | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases with DHC and Healthpeak Properties Inc. and Management Agreements with DHC | Leases with DHC and Healthpeak Properties Inc. and Management Agreements with DHC 2020 Restructuring of our Business Arrangements with DHC . Effective as of January 1, 2020: • our five then existing master leases with DHC as well as our then existing management and pooling agreements with DHC were terminated and replaced with new management agreements for all those senior living communities, together with a related omnibus agreement, or collectively, the New Management Agreements; • we issued 10,268,158 of our common shares to DHC and an aggregate of 16,118,849 of our common shares to DHC’s shareholders of record as of December 13, 2019; • as consideration for the share issuances, DHC provided to us $75,000 by assuming certain of our working capital liabilities and through cash payments; we recognized $22,899 in loss on termination of leases, representing the excess of the fair value of the share issuances of $97,899 compared to the consideration of $75,000 paid by DHC. As of March 31, 2020, DHC assumed $51,547 of our working capital liabilities. We received cash of $23,453 from DHC during 2020, subsequent to March 31, 2020; and • pursuant to a guaranty agreement dated as of January 1, 2020, made by us in favor of DHC’s applicable subsidiaries, we have guaranteed the payment and performance of each of our applicable subsidiary’s obligations under the applicable New Management Agreements. We recognized transaction costs of $1,095 related to the Transaction Agreement for the three months ended March 31, 2020. 2021 Amendments to our Management Arrangements with DHC. As part of our Strategic Plan, we have agreed to amend our management arrangements with DHC. See Note 16 for additional information on our Strategic Plan. The principal changes to the management arrangements will include: • we will cooperate with DHC in transitioning the management of 108 senior living communities with approximately 7,500 living units, to other third party managers without payment of any termination fee to us; • DHC will no longer have the right to sell up to an additional $682,000 of senior living communities managed by us and terminate our management of those communities without payment of a termination fee to us upon sale; • DHC's ability to terminate the management agreement is (i) extended 2 years to 2025, (ii) the maximum amount of communities that may be terminated will be reduced to 10% (from 20%) of the total managed portfolio by revenue per year and (iii) achieving less than 80% (from 90%) of budgeted earnings before interest, taxes, depreciation and taxes, or EBITDA, will be required to qualify as a “Non Performing Asset”, • we will continue to manage 120 senior living communities for DHC; • we will close and reposition the 27 skilled nursing units in CCRC communities that we will continue to manage with approximately 1,500 living units; • the incentive fee calculation included in our existing management agreements with DHC will be amended for the senior living communities that we will continue to manage for DHC such that there will no longer be a cap placed on any incentive fee we earn in any calendar year and that any senior living communities that are undergoing a major renovation or repositioning will be excluded from the calculation and reset pursuant to the terms of the management agreements as a result of expected capital projects DHC is planning in the next five years; • DHC will assume control of major community renovation or repositioning activities at the senior living communities that we will continue to manage for DHC; and • the term of our existing management agreements with DHC will be extended by two years to December 31, 2036. We expect that the transition of management of the 108 senior living communities and the closure of 27 skilled nursing units will be completed before year end 2021. For the three months ended March 31, 2021, we recognized $5,255 of management fees related to the management of these communities and units. Senior Living Communities Leased from Healthpeak Properties, Inc. As of March 31, 2021, we leased four senior living communities under one lease with Healthpeak Properties, Inc., or PEAK. This lease is a “triple net” lease which requires that we pay all costs incurred in the operation of the communities, including the cost of insurance and real estate taxes, maintaining the communities, and indemnifying the landlord for any liability which may arise from the operations during the lease term. We recognized rent expense for this lease for actual rent paid plus or minus a straight-line adjustment for scheduled minimum rent increases, which were not material to our condensed consolidated financial statements. The right-of-use asset balance has been decreased for the amount of accrued lease payments, which amounts are not material to our condensed consolidated financial statements. On March 8, 2021, we entered into a second amendment to our master lease with PEAK, pursuant to which we agreed to pay a lease termination fee upon the sale by PEAK of any of the four communities we lease in an amount equal to the difference between: (i) the net present value of the allocated minimum rate payments that would otherwise have been payable with respect to that community for the period beginning on the sale date and ending on April 30, 2023 (discounted at 9%) and (ii) the net present value of the reinvestment returns of the net proceeds from the sale of the community (discounted at 9%), and assuming such net proceeds are reinvested for the period commencing on the sale date and ending on April 30, 2023 at a rate of 5.5%. The aggregate maximum termination fee payable by us with respect to the termination of the four communities is capped at $3,100. On April 4, 2021, one of the communities that we lease from PEAK had a fire which has caused extensive damage and the residents of the community to be relocated. We believe our liability with respect to this event is limited to a $1,000 insurance deductible which we expect to recognize in the three months ended June 30, 2021. Senior Living Communities Managed for the Account of DHC and its Related Entities . As of March 31, 2021 and 2020, we managed 228 and 244 senior living communities, respectively, for DHC. We earned management fees of $12,910 and $16,462 from the senior living communities we managed for the account of DHC for the three months ended March 31, 2021 and 2020, respectively. In addition, we earned fees for our management of capital expenditure projects at the communities we managed for the account of DHC of $834 and $462 for the three months ended March 31, 2021 and 2020, respectively. These amounts are included in management fee revenue in our condensed consolidated statements of operations. We also provide ancillary services to residents at some of the senior living communities we manage for the account of DHC, such as rehabilitation and wellness services. At senior living communities we manage for the account of DHC where we provide rehabilitation and wellness services on an outpatient basis, the residents, third party payers or government programs pay us for those rehabilitation and wellness services. At senior living communities we manage for the account of DHC where we provide inpatient rehabilitation and wellness services, DHC generally pays us for these services and charges for such services are included in amounts charged to residents, third party payers or government programs. We earned revenues of $5,441 and $8,057 for the three months ended March 31, 2021 and 2020, respectively, for rehabilitation and wellness services we provided at senior living communities we manage for the account of DHC and that are payable by DHC. These amounts are included in rehabilitation and wellness services in our condensed consolidated statements of operations. We earned management fees of $106 and $127 for the three months ended March 31, 2021 and 2020, respectively, for management services at a part of a senior living community DHC subleases to an affiliate, which amounts are included in management fee revenues in our condensed consolidated statements of operations. In 2020, DHC sold 9 senior living communities that we previously managed. Upon completion of these sales, our management agreements with DHC with respect to those communities were terminated. In addition, in 2020, DHC also closed 7 additional senior living communities and one building in one community. While those closed communities and building are no longer being operated as senior living communities, we continue to manage the related back-office operations and empty communities. For the three months ended March 31, 2020, we recognized $1,052 of management fees related to these sold and closed communities. Ageility Clinics Leased from DHC. We lease space from DHC at certain of the senior living communities that we manage for DHC. We use this leased space for outpatient rehabilitation and wellness services clinics. We recognized rent expense of $397 and $294 for the three months ended March 31, 2021 and 2020, respectively, with respect to these leases. |
Business Management Agreement w
Business Management Agreement with RMR LLC | 3 Months Ended |
Mar. 31, 2021 | |
Management Agreement [Abstract] | |
Business Management Agreement with RMR LLC | Business Management Agreement with RMR LLCRMR LLC provides business management services to us pursuant to our business management and shared services agreement. We incurred aggregate fees and certain cost reimbursements payable to RMR LLC of $1,804 and $2,351 for the three months ended March 31, 2021 and 2020, respectively. These amounts are included in general and administrative expenses in our condensed consolidated statements of operations. For further information about our relationship with RMR LLC, see our Annual Report. |
Related Person Transactions
Related Person Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Related Person Transactions We have relationships and historical and continuing transactions with DHC, RMR LLC and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors and officers who are also our Directors or officers. The RMR Group Inc., or RMR Inc., is the managing member of RMR LLC. The Chair of our Board and one of our Managing Directors, Adam D. Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc. Mr. Portnoy is also a managing director and the president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. Jennifer B. Clark, our other Managing Director and our Secretary, also serves as a managing director and the executive vice president, general counsel and secretary of RMR Inc., an officer and employee of RMR LLC and an officer of ABP Trust. Certain of our officers, and DHC’s officers, are also officers and employees of RMR LLC. Some of our Independent Directors also serve as independent trustees or independent directors of other public companies to which RMR LLC or its subsidiaries provide management services. Adam Portnoy serves as the chair of the boards of trustees or boards of directors of several of these public companies and as a managing director or managing trustee of these companies. Other officers of RMR LLC, including Ms. Clark, serve as managing trustees or managing directors of certain of these companies. DHC . DHC is currently our largest shareholder, owning, as of March 31, 2021, 10,691,658 of our common shares, or 33.8% of our outstanding common shares. We manage for the account of DHC a substantial majority of the senior living communities we operate. Adam Portnoy is chair of the board of trustees and a managing trustee of DHC. Jennifer Clark is a managing trustee and the secretary of DHC. Included in accrued expenses and other current liabilities on our condensed consolidated balance sheets at March 31, 2021 and December 31, 2020 are $31,771 and $30,090, respectively, which will be reimbursed by DHC and are included in due from related person. See Note 11 for more information regarding our relationships, agreements and transactions with DHC and certain parties related to it and us. RMR LLC. We have an agreement with RMR LLC to provide business management services to us. See Note 12 for more information regarding our relationship with RMR LLC. RMR also provides management services to DHC. ABP Trust. ABP Trust and its subsidiaries, owned 1,972,783 of our common shares, representing 6.2% of our outstanding common shares as of March 31, 2021. We lease our headquarters from a subsidiary of ABP Trust. On February 24, 2021, we and the ABP Trust subsidiary renewed the lease through December 31, 2031. The annual lease payment will range from $1,026 to $1,395 over the period of the lease. The lease also provides us with an improvements allowance from ABP Trust not to exceed $2,667. Our rent expense for our headquarters, including utilities and real estate taxes that we pay as additional rent, was $477 and $435 for the three months ended March 31, 2021 and 2020, respectively, which is included in general and administrative expenses. As a result of renewing this lease, we increased each of our right-of-use asset and lease liability noted below on our condensed consolidated balance sheets by $9,746 to reflect the terms of the amendment. We recognized a right-of-use asset and lease liability, which amounts were $10,027 and $496 for the lease liability and $9,964 and $452 for the right-of-use asset as of March 31, 2021 and December 31, 2020, respectively, with respect to our headquarters lease, using an incremental borrowing rate of 3.9%. The right-of-use asset has been reduced by the amount of accrued lease payments, which amounts are not material to our condensed consolidated financial statements. For further information about these and other such relationships and certain other related person transactions, see our Annual Report. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We have been, are currently, and expect in the future to be involved in claims, lawsuits, and regulatory and other government audits, investigations and proceedings arising in the ordinary course of our business, some of which may involve material amounts. Also, the defense and resolution of these claims, lawsuits, and regulatory and other government audits, investigations and proceedings may require us to incur significant expense. Loss contingency provisions are recorded for probable and estimable losses at our best estimate of a loss or, when a best estimate cannot be made, at our estimate of the minimum loss. These estimates are often developed prior to knowing the amount of the ultimate loss, require the application of considerable judgment and are refined as additional information becomes known. Accordingly, we are often initially unable to develop a best estimate of loss and therefore the estimated minimum loss amount, which could be zero, is recorded; then, as information becomes known, the minimum loss amount is updated, as appropriate. We were defendants in two lawsuits filed by former employees in California. The first lawsuit, Lefevre v. Five Star Quality Care, Inc. was filed in San Bernardino County Superior Court in May 2015 and the second lawsuit, Mandviwala v. Five Star Quality Care, Inc. d/b/a Five Star Quality Care - CA, Inc. and FVE Managers, Inc., our wholly owned subsidiary, was filed in Orange County Superior Court in July 2015. The claims asserted against us in the similar, though not identical, complaints include: (i) failure to pay all wages due, (ii) failure to pay overtime, (iii) failure to provide meal and rest breaks, (iv) failure to provide itemized, printed wage statements, (v) failure to keep accurate payroll records and (vi) failure to reimburse business expenses. Both plaintiffs asserted causes of action on behalf of themselves and on behalf of other similarly situated employees, including causes of action pursuant to the California Labor Code Private Attorney General Act, or PAGA. On July 10, 2020, the parties of Lefevre v. Five Star Quality Care, Inc., agreed, without admitting fault, to settle their individual and PAGA claims. The settlement was approved by the court and final judgement on the settlement has been entered. Payment on the claims is expected to be made before the end of the second quarter of 2021. The settlement effectively extinguished the Mandviwala v. Five Star Quality Care, Inc. d/b/a Five Star Quality Care - CA, Inc. and FVE Managers, Inc. lawsuit. Our share of the settlement amount of $2,473 was recognized on our condensed consolidated statements of operations during the third quarter of 2020. As a result of routine monitoring protocols that are a part of our compliance program activities related to Medicare billing, we discovered potentially inadequate documentation at a SNF that we manage on behalf of DHC. This monitoring was not initiated in response to any specific complaint or allegation, but was monitoring of the type that we periodically undertake |
COVID-19 Pandemic
COVID-19 Pandemic | 3 Months Ended |
Mar. 31, 2021 | |
Unusual or Infrequent Items, or Both [Abstract] | |
COVID-19 Pandemic | COVID-19 Pandemic On March 11, 2020, the World Health Organization declared the disease caused by the novel coronavirus SARS-CoV-2, or COVID-19, a pandemic, or the Pandemic. The global spread of COVID-19 has created significant volatility, uncertainty and economic disruption worldwide. Governments in affected regions have implemented and may continue to implement, safety precautions, including quarantines, travel restrictions, business closures and other public safety measures. On March 13, 2020, the President of the United States declared the Pandemic a national emergency, effective as of March 1, 2020, or the National Emergency. The Pandemic has significantly disrupted, and will likely continue to disrupt, our business and the senior living industry as a whole. We cannot predict whether the relief provided by the CARES Act together with any additional funds under the other Provider Relief Fund or other programs that we may receive will be sufficient to offset the financial losses caused by the Pandemic, but we expect they will not be. In connection with the Pandemic, we have experienced occupancy declines, increased labor costs and increased costs related to COVID-19 testing, medical and sanitation supplies and certain other costs. Additionally, we have purchased personal protective equipment, or PPE, to be used at our senior living communities and rehabilitation and wellness clinics. At March 31, 2021, $8,773 of PPE for future use was included in prepaid expenses and other current assets in our condensed consolidated balance sheets. PPE that is deployed to senior living communities that we manage on behalf of DHC is reimbursable to us by DHC. In the first quarter of 2021, we deployed $852 of PPE to senior living communities that we manage on behalf of DHC. In response to the Pandemic, the CARES Act was enacted on March 27, 2020. The CARES Act, among other things, provides billions of dollars of relief to certain individuals and businesses suffering from the impact of the Pandemic. Under the CARES Act, a Provider Relief Fund was established for allocation by HHS and was further supplemented by the Consolidated Appropriations Act, 2021 on December 27, 2020. The terms and conditions of the Provider Relief Fund require that the funds are utilized to compensate for lost revenues that are attributable to the Pandemic and for eligible costs to prevent, prepare for and respond to the Pandemic that are not covered by other sources. In addition Provider Relief Funds recipients are subject to other terms and conditions, including certain reporting requirements. Any funds not used in accordance with the terms and conditions must be returned to HHS. On April 10, 2020, HHS began to distribute these funds, or the Phase 1 General Distribution, to healthcare providers who received Medicare fee-for-service reimbursement in 2018 and 2019. Each healthcare provider's allocation of the Phase 1 General Distribution was determined based on 2% of a provider's 2018 (or most recent complete tax year) gross receipts, regardless of the provider's payer mix. On June 9, 2020, HHS announced additional distributions from the Provider Relief Fund, or Phase 2 General Distributions, including the Medicaid and Children's Health Insurance Program, or the Medicaid and CHIP Targeted Distribution. HHS stated that it would disburse a payment that, at a minimum, is equal to 2% of reported total revenue from patient care to eligible providers serving Medicaid and CHIP beneficiaries. Providers who had not yet received a disbursement from the Phase 1 General Distribution were eligible for the Medicaid and CHIP Targeted Distribution. Information on future allocations of the Provider Relief Fund are not yet known, though the statute requires that no less than 85% of unobligated balances of the fund and funds recovered from providers after the enactment date be allocated based on financial losses and changes in operating expenses occurring in the third or fourth quarter of calendar year 2020. We recognized $7,793 as other operating income for the three months ended March 31, 2021 related to General Distribution Funds primarily for our senior living communities for which we believe we have met the required terms and conditions. The CARES Act delays the payment of required federal tax deposits for certain payroll taxes, including the employer's share of Old-Age, Survivors, and Disability Insurance Tax, or Social Security, employment taxes, incurred between March 27, 2020 and December 31, 2020. Amounts will be considered timely paid if 50% of the deferred amount is paid by December 31, 2021, and the remainder by December 31, 2022. As of March 31, 2021 and December 31, 2020, we deferred $27,593 of employer payroll taxes, which are included in accrued compensation and benefits in our condensed consolidated balance sheets, of which $22,194 are required to be funded by us and will be reimbursed by DHC pursuant to the New Management Agreements and are included in due from related persons in our condensed consolidated balance sheets. The Sequestration Transparency Act of 2012 subjected all Medicare fee-for-service payments to a 2% sequestration reduction, or the 2% Medicare Sequestration. The CARES Act temporarily suspended the 2% Medicare Sequestration for the period from May 1, 2020 to March 31, 2021 which benefited our rehabilitation and wellness services segment and the senior living communities we manage in the form of increased rates for services provided and the management fees we earn from these communities as a result. Increases in rates are recognized in revenue in the period services are provided. The Tax Cuts and Jobs Act of 2017 repealed the AMT and allowed corporations to fully offset regular tax liability with AMT credits. Any remaining AMT credit amount became refundable incrementally from tax years 2018 through 2021. The CARES Act accelerates the refund schedule, permitting corporate taxpayers to claim the refund in full in either tax year 2018 or 2019. We expect to apply an AMT credit refund of $554 for tax year 2019 to our 2021 tax return, as we do not have a federal tax liability to utilize the refund against our the 2020 tax return. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 9, 2021, we announced the Strategic Plan to reposition our senior living management business to focus on larger independent living, assisted living and memory care communities as well as stand-alone independent living and active adult communities. Pursuant to the Strategic Plan, we intend to, among other things, (i) amend our management arrangements with DHC to transition 108 senior living communities, with approximately 7,500 living units, that we currently manage for DHC, to new operators, (ii) close and reposition 27 skilled nursing units, with approximately 1,500 living units, in CCRCs we will continue to manage for DHC, (iii) close 37 Ageility inpatient rehabilitation clinics in certain transitioning communities and (iv) eliminate certain positions in our corporate, regional and divisional teams as well as impacted units and clinics. We expect to complete the transitions and closures by the end of 2021. See Note 11 for more information regarding our agreement to amend our management agreements with DHC. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Estimates and Assumptions | Estimates and Assumptions. The preparation of these financial statements in conformity with GAAP requires us to make estimates and assumptions that may affect the amounts reported in these condensed consolidated financial statements and related notes. Significant estimates in our condensed consolidated financial statements relate to revenue recognition, including contractual allowances, the allowance for doubtful accounts, self-insurance reserves and estimates concerning our provision for income taxes or valuation allowance related to deferred tax assets. Our actual results could differ from our estimates. We periodically review estimates and assumptions and we reflect the effects of changes, if any, in the condensed consolidated financial statements in the period that they are determined. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted. In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-13, Financial Instruments-Credit Losses (Topic 326) , which requires a financial asset or a group of financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This ASU eliminates the probable initial recognition threshold and instead requires reflection of an entity’s current estimate of all expected credit losses. In addition, this ASU amends the current other-than-temporary impairment model for available for sale debt securities. The length of time that the fair value of an available for sale debt security has been below the amortized cost will no longer impact the determination of whether a credit loss exists and credit losses will now be limited to the difference between a security’s amortized cost basis and its fair value. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses , which amends the transition and effective date for nonpublic entities and smaller reporting companies, such as us, and clarifies that receivables arising from operating leases are not in the scope of this ASU. In November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326 , Financial Instruments-Credit Losses , which clarifies guidance around how to report expected recoveries. Entities will apply the provisions of the ASU as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. This ASU is effective for smaller reporting companies for reporting periods beginning after December 15, 2022. We are assessing the potential impact that the adoption of this ASU (and the related clarifying guidance issued by the FASB) will have on our condensed consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions on contract modifications meeting certain criteria to ease the financial reporting burdens of the expected market transition from the London Inter-bank Offered Rate, or LIBOR, and other interbank offered rates to the alternative reference rates. For a contract that meets the criteria, this ASU generally allows an entity to account for and present modifications as an event that does not require remeasurement at the modification date or reassessment of a previous accounting determination. This ASU was effective upon issuance and can be applied through December 31, 2022. We expect this ASU will not have a material impact on our condensed consolidated financial statements. |
Revenue and Other Operating I_2
Revenue and Other Operating Income (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The following tables present revenue from contracts by segment with customers disaggregated by type of payer, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors: Three Months Ended March 31, 2021 Senior Rehabilitation and Wellness Services (3) Total Private payer $ 16,787 $ 1,014 $ 17,801 Medicare and Medicaid programs 270 11,549 11,819 Other third-party payer programs — 6,990 6,990 Management fees 13,850 (1) (2) — 13,850 Reimbursed community-level costs incurred on behalf of managed communities 213,160 (1) — 213,160 Other reimbursed expenses 5,480 (1) — 5,480 Total revenues $ 249,547 $ 19,553 $ 269,100 _______________________________________ (1) Represents separate revenue streams earned from DHC. (2) As noted previously, in 2021 we intend to (i) transition 108 senior living communities managed on behalf of DHC with approximately 7,500 living units to new operators and (ii) close and reposition approximately 1,500 skilled nursing facility units in 27 CCRCs that we will continue to manage for DHC. The management fees we recognized related to these communities and units for the three months ended March 31, 2021 was $5,255. See Notes 11 and 16 for more information. (3) As noted previously we expect to close 37 Ageility inpatient rehabilitation clinics during 2021. Revenue related to these clinics for the three months ended March 31, 2021 was $5,441. See Note 16 for more information. Three Months Ended March 31, 2020 Senior Rehabilitation and Wellness Services Total Private payer $ 20,281 $ 897 $ 21,178 Medicare and Medicaid programs 716 9,570 10,286 Other third-party payer programs — 10,917 10,917 Management fees 17,051 (1) — 17,051 Reimbursed community-level costs incurred on behalf of managed communities 232,016 (1) — 232,016 Other reimbursed expenses 5,997 (1) — 5,997 Total revenues $ 276,061 $ 21,384 $ 297,445 _______________________________________ (1) Represents separate revenue streams earned from DHC. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of segment information | Results of operations and selected financial information by reportable segment and the reconciliation to the condensed consolidated financial statements are as follows: Three Months Ended March 31, 2021 Senior Living (1) Rehabilitation and Wellness Services (2) Corporate and Other Total Revenues $ 249,547 $ 19,553 $ — $ 269,100 Other operating income 7,774 19 — 7,793 Operating expenses 237,957 16,338 18,935 273,230 Operating income 19,364 3,234 (18,935) 3,663 Allocated corporate and other costs (12,657) (978) 13,635 — Other (loss), net (122) — (26) (148) Income (loss) before income taxes 6,585 2,256 (5,326) 3,515 Provision for income taxes — — (200) (200) Net income (loss) $ 6,585 $ 2,256 $ (5,526) $ 3,315 _______________________________________ (1) As noted previously, in 2021 we intend to (i) transition 108 senior living communities managed on behalf of DHC with approximately 7,500 living units to new operators and (ii) close and reposition approximately 1,500 skilled nursing facility units in 27 CCRCs that we will continue to manage for DHC. See Notes 11 and 16 for more information. (2) As noted previously, we expect to close 37 Ageility inpatient rehabilitation clinics during 2021. See Note 16 for more information. Three Months Ended March 31, 2020 Senior Rehabilitation and Wellness Services Corporate and Other Total Revenues $ 276,061 $ 21,384 $ — $ 297,445 Operating expenses 255,619 17,616 15,586 288,821 Operating income (loss) 20,442 3,768 (15,586) 8,624 Allocated corporate and other costs (15,618) (1,068) 16,686 — Other income (loss), net 41 — (24,466) (24,425) Income (loss) before income taxes 4,865 2,700 (23,366) (15,801) Provision for income taxes — — (1,408) (1,408) Net income (loss) $ 4,865 $ 2,700 $ (24,774) $ (17,209) |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | Property and equipment, net consist of the following: March 31, 2021 December 31, 2020 Land $ 12,155 $ 12,155 Buildings, construction in process and improvements 203,646 202,679 Furniture, fixtures and equipment 61,902 60,713 Property and equipment, at cost 277,703 275,547 Less: accumulated depreciation (118,987) (116,296) Property and equipment, net $ 158,716 $ 159,251 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of changes in accumulated other comprehensive income, net of tax | The following tables detail the changes in accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, 2021 Equity Investments Accumulated Balance at January 1, 2021 $ (175) $ 1,491 $ 1,316 Unrealized loss on debt investments, net of tax — (294) (294) Balance at March 31, 2021 $ (175) $ 1,197 $ 1,022 Three Months Ended March 31, 2020 Equity Investments Accumulated Balance at January 1, 2020 $ (175) $ 2,838 $ 2,663 Cumulative effect adjustment to beginning accumulated deficit and accumulated other comprehensive income in connection with a reclassification of equity investments previously classified as debt investments — (1,694) (1,694) Unrealized gain on debt investments, net of tax — 427 427 Realized gain on debt investments reclassified and included in net loss, net of tax — (10) (10) Balance at March 31, 2020 $ (175) $ 1,561 $ 1,386 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares | The following table provides a reconciliation of the weighted average number of common shares used in the calculation of basic and diluted net income (loss) per share (in thousands): Three Months Ended March 31, 2021 2020 Weighted average shares outstanding—basic 31,530 31,448 Effect of dilutive securities: unvested share awards 132 — Weighted average shares outstanding—diluted (1) 31,662 31,448 _______________________________________ (1) For the three months ended March 31, 2020, 124 of our unvested common shares were not included in the calculation of net loss per share—diluted because to do so would have been anti-dilutive. |
Fair Values of Assets and Lia_2
Fair Values of Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring and non recurring basis, categorized by the level of inputs used in the valuation of each asset | The tables below present certain of our assets measured at fair value at March 31, 2021 and December 31, 2020, categorized by the level of input used in the valuation of each asset. As of March 31, 2021 Description Total Quoted Prices in Significant Significant Cash equivalents (1) $ 26,231 $ 26,231 $ — $ — Investments: Equity investments (2) High yield fund (3) 3,162 — 3,162 — International bond fund (4) 2,781 — 2,781 — Financial services industry 1,376 1,376 — — Healthcare 492 492 — — Technology 801 801 — — Other 3,851 3,851 — — Total equity investments 12,463 6,520 5,943 — Debt investments (5) Industrial bonds 529 — 529 — Technology bonds 1,443 — 1,443 — Government bonds 7,123 7,123 — — Energy bonds 478 — 478 — Financial bonds 1,330 — 1,330 — Other 1,107 — 1,107 — Total debt investments 12,010 7,123 4,887 — Total investments 24,473 13,643 10,830 — Total $ 50,704 $ 39,874 $ 10,830 $ — As of December 31, 2020 Description Total Quoted Prices in Significant Significant Cash equivalents (1) $ 26,291 $ 26,291 $ — $ — Investments: Equity investments (2) High yield fund (3) 3,156 — 3,156 — International bond fund (4) 2,818 — 2,818 — Financial services industry 1,348 1,348 — — Healthcare 477 477 — — Technology 765 765 — — Other 3,875 3,875 — — Total equity investments 12,439 6,465 5,974 — Debt investments (5) Industrial bonds 540 — 540 — Technology bonds 1,471 — 1,471 — Government bonds 7,301 7,301 — — Energy bonds 484 — 484 — Financial bonds 1,359 — 1,359 — Other 1,155 — 1,155 — Total debt investments 12,310 7,301 5,009 — Total investments 24,749 13,766 10,983 — Total $ 51,040 $ 40,057 $ 10,983 $ — _______________________________________ (1) Cash equivalents consist of short-term, highly liquid investments and money market funds held primarily for obligations arising from our self-insurance programs. Cash equivalents are reported in our condensed consolidated balance sheets as cash and cash equivalents and current and long-term restricted cash and cash equivalents. Cash equivalents include $22,531 and $22,837 of balances that were restricted at March 31, 2021 and December 31, 2020, respectively. In addition to the cash equivalents of $26,231 and $26,291 at March 31, 2021 and December 31, 2020, respectively, reflected above, there were cash balances of $105,785 and $80,897 and restricted cash balances of $2,375 and $2,409 at March 31, 2021 and December 31, 2020, respectively. (2) The fair value of our equity investments is readily determinable. During the three months ended March 31, 2021 and March 31, 2020, we received gross proceeds of $337 and $45, respectively, in connection with the sales of equity investments and recorded gross realized gains totaling $96 and $0, respectively, and gross realized losses totaling $0 and $30, respectively. (3) The investment strategy of this fund is to invest principally in fixed income securities. The fund invests in such securities or investment vehicles it considers appropriate to achieve the fund’s investment objective, which is to provide an above average rate of total return while attempting to limit investment risk by investing in a diversified portfolio of primarily fixed income securities issued by companies with below investment grade ratings. There are no unfunded commitments and the investment can be redeemed weekly. (4) The investment strategy of this fund is to invest principally in fixed income securities issued by non-U.S. issuers. The fund invests in such securities or investment vehicles as it considers appropriate to achieve the fund’s investment objective, which is to provide an above average rate of total return while attempting to limit investment risk by investing in a diversified portfolio of U.S. dollar investment-grade fixed income securities. There are no unfunded commitments and the investment can be redeemed weekly. (5) As of March 31, 2021, our debt investments, which are classified as available for sale, had a fair value of $12,010 with an amortized cost of $11,548; the difference between the fair value and amortized cost amounts resulted from unrealized gains of $462, net of unrealized losses of $36. As of December 31, 2020, our debt investments had a fair value of $12,310 with an amortized cost of $11,554; the difference between the fair value and amortized cost amounts resulted from unrealized gains of $756, net of unrealized losses of $4. Debt investments include $8,187 and $8,395 of balances that were restricted as of March 31, 2021 and December 31, 2020, respectively. At March 31, 2021, four debt investments we held, with a fair value of $778, had been in a loss position for less than 12 months and we did not hold any debt investments with a fair value in a loss position for greater than 12 months. We do not believe these investments are impaired primarily because they have not been in a loss position for an extended period of time, the financial conditions of the issuers of these investments remain strong with solid fundamentals as of March 31, 2021, we do not intend to sell the investments and it is not more likely than not that we will be required to sell the investments before recovery, and other factors that support our conclusion that the loss is temporary. During the three months ended March 31, 2021 and 2020, we received gross proceeds of $0 and $1,409, respectively, in connection with the sales of debt investments and recorded gross realized gains totaling $0 and $10, respectively. There were no gross realized losses for the three months ended March 31, 2021 and 2020, respectively. We record gains and losses on the sales of these investments using the specific identification method. |
Schedule of debt securities | The amortized cost basis and fair value of available for sale debt securities at March 31, 2021, by contractual maturity, are shown below. Amortized Cost Fair Value Due in one year or less $ 1,796 $ 1,826 Due after one year through five years 5,522 5,773 Due after five years through ten years 4,230 4,411 Total $ 11,548 $ 12,010 |
Indebtedness (Tables)
Indebtedness (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Summary of mortgages | The following table is a summary of this mortgage note as of March 31, 2021: Balance as of Contractual Stated Effective Maturity Date Monthly Lender $ 7,297 (1) 6.20 % 6.70 % September 2032 $ 72 Federal Home Loan Mortgage Corporation _______________________________________ (1) Contractual principal payments excluding unamortized discount $221. |
Basis of Presentation and Org_2
Basis of Presentation and Organization (Details) $ in Thousands | Apr. 09, 2021living_unitcommunity | Apr. 07, 2021living_unit | Mar. 31, 2021USD ($)living_unitpropertyapartmentsuitebedcommunityfacilitystate | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($)property | Dec. 31, 2019USD ($) |
Real estate properties | ||||||
Stockholders' equity | $ | $ (213,628) | $ (210,532) | $ (200,609) | $ (119,981) | ||
Cumulative Effect, Period of Adoption, Adjustment | ||||||
Real estate properties | ||||||
Stockholders' equity | $ | 0 | |||||
Accumulated Other Comprehensive Income | ||||||
Real estate properties | ||||||
Stockholders' equity | $ | $ (1,022) | $ (1,316) | $ (1,386) | (2,663) | ||
Accumulated Other Comprehensive Income | Cumulative Effect, Period of Adoption, Adjustment | ||||||
Real estate properties | ||||||
Stockholders' equity | $ | $ 1,694 | |||||
Transaction Agreement | Affiliated Entity | ||||||
Real estate properties | ||||||
Number of properties managed | community | 228 | |||||
Senior Living Communities | ||||||
Real estate properties | ||||||
Number of properties operated | property | 252 | |||||
Number of states in which real estate properties are located | state | 31 | |||||
Number of living units in properties operated | 29,265 | |||||
Number of units in properties managed | 26,963 | |||||
Number of properties owned and operated | property | 20 | |||||
Number of living units in properties owned and operated | 2,099 | |||||
Number of communities operating | community | 4 | |||||
Number of units in properties leased and operated | 203 | |||||
Senior Living Communities | Subsequent Event | ||||||
Real estate properties | ||||||
Number of living units in properties operated | 120 | |||||
Senior Living Communities | Affiliated Entity | ||||||
Real estate properties | ||||||
Number of properties managed | property | 244 | |||||
Senior Living Communities | Diversified Healthcare Trust | Subsequent Event | Strategic Plan | ||||||
Real estate properties | ||||||
Number of properties operated | community | 108 | |||||
Number of living units in properties operated | 7,500 | |||||
Independent and Assisted Living Communities | ||||||
Real estate properties | ||||||
Number of properties operated | property | 243 | |||||
Number of living units in properties operated | 28,310 | |||||
Continuing Care Retirement Communities | ||||||
Real estate properties | ||||||
Number of properties operated | community | 37 | |||||
Number of units in properties managed | 8,573 | |||||
SNF | ||||||
Real estate properties | ||||||
Number of properties operated | facility | 9 | |||||
Number of living units in properties operated | 955 | |||||
SNF | Diversified Healthcare Trust | Subsequent Event | Strategic Plan | ||||||
Real estate properties | ||||||
Number of properties operated | community | 27 | |||||
Number of living units in properties operated | 1,500 | |||||
Independent Living Apartment | ||||||
Real estate properties | ||||||
Number of living units in properties operated | apartment | 10,979 | |||||
Assisted Living Suites | ||||||
Real estate properties | ||||||
Number of living units in properties operated | suite | 15,329 | |||||
Rediscovery Memory Care Units | ||||||
Real estate properties | ||||||
Number of living units in properties operated | bed | 3,220 | |||||
Skilled Nursing Units | ||||||
Real estate properties | ||||||
Number of living units in properties operated | bed | 2,957 | |||||
Inpatient Rehabilitation Clinics | Diversified Healthcare Trust | ||||||
Real estate properties | ||||||
Number of properties operated | property | 37 | |||||
Inpatient Rehabilitation Clinics | Diversified Healthcare Trust | Subsequent Event | Strategic Plan | ||||||
Real estate properties | ||||||
Number of properties operated | community | 37 | |||||
Outpatient Rehabilitation Clinics | Diversified Healthcare Trust | ||||||
Real estate properties | ||||||
Number of properties operated | property | 215 | |||||
Number of properties owned and operated | property | 151 | |||||
Number of properties owned or leased | property | 64 |
Revenue and Other Operating I_3
Revenue and Other Operating Income (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021USD ($)facilitypropertyliving_unit | Mar. 31, 2020USD ($) | Apr. 09, 2021living_unitcommunity | Apr. 07, 2021living_unit | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | $ 269,100 | $ 297,445 | ||
Other operating income | 7,793 | 0 | ||
Inpatient Rehabilitation Clinics | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | $ 5,441 | |||
Senior Living Communities | ||||
Disaggregation of Revenue [Line Items] | ||||
Number of properties operated | property | 252 | |||
Number of living units in properties operated | living_unit | 29,265 | |||
Senior Living Communities | Subsequent Event | ||||
Disaggregation of Revenue [Line Items] | ||||
Number of living units in properties operated | living_unit | 120 | |||
SNF | ||||
Disaggregation of Revenue [Line Items] | ||||
Number of properties operated | facility | 9 | |||
Number of living units in properties operated | living_unit | 955 | |||
Diversified Healthcare Trust | Inpatient Rehabilitation Clinics | ||||
Disaggregation of Revenue [Line Items] | ||||
Number of properties operated | property | 37 | |||
Diversified Healthcare Trust | Inpatient Rehabilitation Clinics | Subsequent Event | Strategic Plan | ||||
Disaggregation of Revenue [Line Items] | ||||
Number of properties operated | community | 37 | |||
Diversified Healthcare Trust | Senior Living Communities | Subsequent Event | Strategic Plan | ||||
Disaggregation of Revenue [Line Items] | ||||
Number of properties operated | community | 108 | |||
Number of living units in properties operated | living_unit | 7,500 | |||
Diversified Healthcare Trust | SNF | Subsequent Event | Strategic Plan | ||||
Disaggregation of Revenue [Line Items] | ||||
Number of properties operated | community | 27 | |||
Number of living units in properties operated | living_unit | 1,500 | |||
Private payer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | $ 17,801 | 21,178 | ||
Medicare and Medicaid programs | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 11,819 | 10,286 | ||
Other third-party payer programs | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 6,990 | 10,917 | ||
Management fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 13,850 | 17,051 | ||
Management fees | Senior Living Communities | DHC | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 5,255 | 1,052 | ||
Reimbursed community-level costs incurred on behalf of managed communities | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 213,160 | 232,016 | ||
Other reimbursed expenses | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 5,480 | 5,997 | ||
Total revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 269,100 | 297,445 | ||
Senior Living | Private payer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 16,787 | 20,281 | ||
Senior Living | Medicare and Medicaid programs | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 270 | 716 | ||
Senior Living | Other third-party payer programs | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 0 | 0 | ||
Senior Living | Management fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 13,850 | 17,051 | ||
Senior Living | Reimbursed community-level costs incurred on behalf of managed communities | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 213,160 | 232,016 | ||
Senior Living | Other reimbursed expenses | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 5,480 | 5,997 | ||
Senior Living | Total revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 249,547 | 276,061 | ||
Rehabilitation And Wellness | Private payer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 1,014 | 897 | ||
Rehabilitation And Wellness | Medicare and Medicaid programs | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 11,549 | 9,570 | ||
Rehabilitation And Wellness | Other third-party payer programs | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 6,990 | 10,917 | ||
Rehabilitation And Wellness | Management fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 0 | 0 | ||
Rehabilitation And Wellness | Reimbursed community-level costs incurred on behalf of managed communities | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 0 | 0 | ||
Rehabilitation And Wellness | Other reimbursed expenses | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 0 | 0 | ||
Rehabilitation And Wellness | Total revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, including assessed tax | $ 19,553 | $ 21,384 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021USD ($)facilitypropertyliving_unitcommunity | Mar. 31, 2020USD ($) | Apr. 09, 2021living_unitcommunity | Apr. 07, 2021living_unit | |
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer, including assessed tax | $ 269,100 | $ 297,445 | ||
Other operating income | 7,793 | 0 | ||
Operating expenses | 273,230 | 288,821 | ||
Operating income (loss) | 3,663 | 8,624 | ||
Allocated corporate and other costs | 0 | 0 | ||
Other (loss), net | (148) | (24,425) | ||
Income (loss) before income taxes | 3,515 | (15,801) | ||
Provision for income taxes | (200) | (1,408) | ||
Net income (loss) | $ 3,315 | (17,209) | ||
SNF | ||||
Segment Reporting Information [Line Items] | ||||
Number of properties operated | facility | 9 | |||
Number of living units in properties operated | living_unit | 955 | |||
Continuing Care Retirement Communities | ||||
Segment Reporting Information [Line Items] | ||||
Number of properties operated | community | 37 | |||
Inpatient Rehabilitation Clinics | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer, including assessed tax | $ 5,441 | |||
Senior Living Communities | ||||
Segment Reporting Information [Line Items] | ||||
Number of properties operated | property | 252 | |||
Number of living units in properties operated | living_unit | 29,265 | |||
Senior Living Communities | Subsequent Event | ||||
Segment Reporting Information [Line Items] | ||||
Number of living units in properties operated | living_unit | 120 | |||
Diversified Healthcare Trust | SNF | Strategic Plan | Subsequent Event | ||||
Segment Reporting Information [Line Items] | ||||
Number of properties operated | community | 27 | |||
Number of living units in properties operated | living_unit | 1,500 | |||
Diversified Healthcare Trust | Inpatient Rehabilitation Clinics | ||||
Segment Reporting Information [Line Items] | ||||
Number of properties operated | property | 37 | |||
Diversified Healthcare Trust | Inpatient Rehabilitation Clinics | Strategic Plan | Subsequent Event | ||||
Segment Reporting Information [Line Items] | ||||
Number of properties operated | community | 37 | |||
Diversified Healthcare Trust | Senior Living Communities | Strategic Plan | Subsequent Event | ||||
Segment Reporting Information [Line Items] | ||||
Number of properties operated | community | 108 | |||
Number of living units in properties operated | living_unit | 7,500 | |||
Operating Segments | Senior Living | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer, including assessed tax | $ 249,547 | 276,061 | ||
Other operating income | 7,774 | |||
Operating expenses | 237,957 | 255,619 | ||
Operating income (loss) | 19,364 | 20,442 | ||
Allocated corporate and other costs | (12,657) | (15,618) | ||
Other (loss), net | (122) | 41 | ||
Income (loss) before income taxes | 6,585 | 4,865 | ||
Provision for income taxes | 0 | 0 | ||
Net income (loss) | 6,585 | 4,865 | ||
Operating Segments | Rehabilitation And Wellness | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 19,553 | 21,384 | ||
Other operating income | 19 | |||
Operating expenses | 16,338 | 17,616 | ||
Operating income (loss) | 3,234 | 3,768 | ||
Allocated corporate and other costs | (978) | (1,068) | ||
Other (loss), net | 0 | 0 | ||
Income (loss) before income taxes | 2,256 | 2,700 | ||
Provision for income taxes | 0 | 0 | ||
Net income (loss) | 2,256 | 2,700 | ||
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer, including assessed tax | 0 | 0 | ||
Other operating income | 0 | |||
Operating expenses | 18,935 | 15,586 | ||
Operating income (loss) | (18,935) | (15,586) | ||
Allocated corporate and other costs | 13,635 | 16,686 | ||
Other (loss), net | (26) | (24,466) | ||
Income (loss) before income taxes | (5,326) | (23,366) | ||
Provision for income taxes | (200) | (1,408) | ||
Net income (loss) | $ (5,526) | $ (24,774) |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | $ 277,703 | $ 275,547 | |
Less: accumulated depreciation | (118,987) | (116,296) | |
Property and equipment, net | 158,716 | 159,251 | |
Depreciation expenses | 2,691 | $ 2,701 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | 12,155 | 12,155 | |
Buildings, construction in process and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | 203,646 | 202,679 | |
Furniture, fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | $ 61,902 | $ 60,713 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Changes in accumulated other comprehensive income | ||
Beginning balance | $ 210,532 | $ 119,981 |
Unrealized loss on debt investments, net of tax | (294) | 427 |
Realized gain on debt investments reclassified and included in net loss, net of tax | (10) | |
Ending balance | 213,628 | 200,609 |
Cumulative Effect, Period of Adoption, Adjustment | ||
Changes in accumulated other comprehensive income | ||
Beginning balance | 0 | |
Equity Investment of an Investee | ||
Changes in accumulated other comprehensive income | ||
Beginning balance | (175) | (175) |
Unrealized loss on debt investments, net of tax | 0 | 0 |
Realized gain on debt investments reclassified and included in net loss, net of tax | 0 | |
Ending balance | (175) | (175) |
Equity Investment of an Investee | Cumulative Effect, Period of Adoption, Adjustment | ||
Changes in accumulated other comprehensive income | ||
Beginning balance | 0 | |
Investments | ||
Changes in accumulated other comprehensive income | ||
Beginning balance | 1,491 | 2,838 |
Unrealized loss on debt investments, net of tax | (294) | 427 |
Realized gain on debt investments reclassified and included in net loss, net of tax | (10) | |
Ending balance | 1,197 | 1,561 |
Investments | Cumulative Effect, Period of Adoption, Adjustment | ||
Changes in accumulated other comprehensive income | ||
Beginning balance | (1,694) | |
Accumulated Other Comprehensive Income | ||
Changes in accumulated other comprehensive income | ||
Beginning balance | 1,316 | 2,663 |
Ending balance | $ 1,022 | 1,386 |
Accumulated Other Comprehensive Income | Cumulative Effect, Period of Adoption, Adjustment | ||
Changes in accumulated other comprehensive income | ||
Beginning balance | $ (1,694) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Provision (benefit) for income taxes | $ 200 | $ 1,408 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Weighted average shares outstanding—basic (in shares) | 31,530 | 31,448 |
Effect of dilutive securities: unvested share awards (in shares) | 132 | 0 |
Weighted average shares outstanding—diluted (in shares) | 31,662 | 31,448 |
Potentially dilutive restricted unvested common shares, not included in diluted EPS calculation (in shares) | 124 |
Fair Values of Assets and Lia_3
Fair Values of Assets and Liabilities - Recurring Measurements (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021USD ($)security | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Fair Values of Assets and Liabilities | |||
Cash equivalents | $ 26,231 | $ 26,291 | |
Equity investments | 12,463 | 12,439 | |
Debt investments | 12,010 | 12,310 | |
Total investments | 24,473 | 24,749 | |
Total | 50,704 | 51,040 | |
Restricted cash equivalents | 22,531 | 22,837 | |
Cash | 105,785 | 80,897 | |
Restricted cash | 2,375 | 2,409 | |
Gross proceeds from sale of equity securities | 337 | $ 45 | |
Gross realized gains recorded on sale of equity securities | 96 | 0 | |
Gross realized losses recorded on sale of equity securities | 0 | 30 | |
Amortized cost of available for sale debt securities | 11,548 | 11,554 | |
Unrealized gains on available for sale debt securities | 462 | 756 | |
Unrealized losses on available for sale debt securities | $ 36 | 4 | |
Debt investments fair value | security | 4 | ||
Debt Securities unrealized loss position, less than 12 months | $ 778 | ||
Gross proceeds from sale of available for sale debt securities | 0 | 1,409 | |
Gross realized gains recorded on sale of debt securities | 0 | $ 10 | |
Mortgage note payable | 6,682 | 6,783 | |
Carrying Value | |||
Fair Values of Assets and Liabilities | |||
Mortgage note payable | 7,076 | 7,818 | |
High yield fund | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 3,162 | 3,156 | |
International bond fund | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 2,781 | 2,818 | |
Financial services industry | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 1,376 | 1,348 | |
Healthcare | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 492 | 477 | |
Technology | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 801 | 765 | |
Other | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 3,851 | 3,875 | |
Industrial bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 529 | 540 | |
Technology bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 1,443 | 1,471 | |
Government bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 7,123 | 7,301 | |
Energy bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 478 | 484 | |
Financial bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 1,330 | 1,359 | |
Other | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 1,107 | 1,155 | |
Restricted debt securities | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 8,187 | 8,395 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair Values of Assets and Liabilities | |||
Cash equivalents | 26,231 | 26,291 | |
Equity investments | 6,520 | 6,465 | |
Debt investments | 7,123 | 7,301 | |
Total investments | 13,643 | 13,766 | |
Total | 39,874 | 40,057 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | High yield fund | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | International bond fund | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Financial services industry | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 1,376 | 1,348 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Healthcare | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 492 | 477 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Technology | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 801 | 765 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 3,851 | 3,875 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Industrial bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Technology bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Government bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 7,123 | 7,301 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Energy bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Financial bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | |||
Fair Values of Assets and Liabilities | |||
Cash equivalents | 0 | 0 | |
Equity investments | 5,943 | 5,974 | |
Debt investments | 4,887 | 5,009 | |
Total investments | 10,830 | 10,983 | |
Total | 10,830 | 10,983 | |
Significant Other Observable Inputs (Level 2) | High yield fund | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 3,162 | 3,156 | |
Significant Other Observable Inputs (Level 2) | International bond fund | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 2,781 | 2,818 | |
Significant Other Observable Inputs (Level 2) | Financial services industry | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Healthcare | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Technology | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Other | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Industrial bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 529 | 540 | |
Significant Other Observable Inputs (Level 2) | Technology bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 1,443 | 1,471 | |
Significant Other Observable Inputs (Level 2) | Government bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Energy bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 478 | 484 | |
Significant Other Observable Inputs (Level 2) | Financial bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 1,330 | 1,359 | |
Significant Other Observable Inputs (Level 2) | Other | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 1,107 | 1,155 | |
Significant Unobservable Inputs (Level 3) | |||
Fair Values of Assets and Liabilities | |||
Cash equivalents | 0 | 0 | |
Equity investments | 0 | 0 | |
Debt investments | 0 | 0 | |
Total investments | 0 | 0 | |
Total | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Estimated Fair Value | |||
Fair Values of Assets and Liabilities | |||
Mortgage note payable | 7,171 | 8,177 | |
Significant Unobservable Inputs (Level 3) | High yield fund | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | International bond fund | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Financial services industry | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Healthcare | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Technology | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Other | |||
Fair Values of Assets and Liabilities | |||
Equity investments | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Industrial bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Technology bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Government bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Energy bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Financial bonds | |||
Fair Values of Assets and Liabilities | |||
Debt investments | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Other | |||
Fair Values of Assets and Liabilities | |||
Debt investments | $ 0 | $ 0 |
Fair Values of Assets and Lia_4
Fair Values of Assets and Liabilities - Debt Securities, Contractual Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Amortized Cost | ||
Due in one year or less | $ 1,796 | |
Due after one year through five years | 5,522 | |
Due after five years through ten years | 4,230 | |
Total | 11,548 | $ 11,554 |
Fair Value | ||
Due in one year or less | 1,826 | |
Due after one year through five years | 5,773 | |
Due after five years through ten years | 4,411 | |
Total | $ 12,010 | $ 12,310 |
Indebtedness - Debt Instruments
Indebtedness - Debt Instruments Summary (Details) | 3 Months Ended | ||
Mar. 31, 2021USD ($)agreementcommunityliving_unit | Mar. 31, 2020USD ($) | Jun. 30, 2019USD ($) | |
Indebtedness | |||
Letters of credit outstanding | $ 29,292,000 | ||
Mortgage Notes | |||
Indebtedness | |||
Interest expense and other associated costs incurred | $ 122,000 | $ 128,000 | |
Mortgage Notes | Senior Living Communities | |||
Indebtedness | |||
Number of real estate properties mortgaged | community | 1 | ||
Revolving Credit Facility | Line of Credit | |||
Indebtedness | |||
Interest expense and other associated costs incurred | $ 253,000 | $ 254,000 | |
Standby Letters of Credit | |||
Indebtedness | |||
Number of irrevocable standby letters of credit agreements | agreement | 7 | ||
Standby Letters of Credit | Workers' Compensation Insurance Program | |||
Indebtedness | |||
Letter of credit amount securing workers' compensation insurance program | $ 26,850,000 | ||
Extension term | 1 year | ||
Standby Letters of Credit | Workers' Compensation Insurance Program | Cash Equivalents | |||
Indebtedness | |||
Collateral securing workers' compensation insurance program | $ 21,566,000 | ||
Standby Letters of Credit | Workers' Compensation Insurance Program | Debt and Equity Investments | |||
Indebtedness | |||
Collateral securing workers' compensation insurance program | $ 7,723,000 | ||
Letter of Credit | Other Than Workers Compensation Insurance Program Collateral | |||
Indebtedness | |||
Number of irrevocable standby letters of credit agreements | agreement | 6 | ||
Secured Revolving Credit Facility Maturing June 2021 | Revolving Credit Facility | Senior Living Communities | |||
Indebtedness | |||
Number of real estate properties securing borrowings on the new credit facility | community | 11 | ||
Number of units in real estate properties securing borrowings on the new credit facility | living_unit | 1,236 | ||
Secured Revolving Credit Facility Maturing June 2021 | Revolving Credit Facility | Line of Credit | |||
Indebtedness | |||
Maximum borrowing capacity | $ 65,000,000 | ||
Extension term | 1 year | ||
Quarterly commitment fee on the unused part of borrowing availability | 0.35% | ||
Debt outstanding | $ 0 | $ 0 | |
Letters of credit outstanding | 2,442,000 | ||
Available for borrowings | $ 14,935,000 | ||
Secured Revolving Credit Facility Maturing June 2021 | Revolving Credit Facility | Line of Credit | Base Rate | |||
Indebtedness | |||
Variable rate | 1.50% | ||
Interest rate at period end | 4.75% | ||
Secured Revolving Credit Facility Maturing June 2021 | Revolving Credit Facility | Line of Credit | LIBOR | |||
Indebtedness | |||
Variable rate | 2.50% | ||
Interest rate at period end | 2.61% |
Indebtedness - Payments of Prin
Indebtedness - Payments of Principal and Interest (Details) - September 2032 $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Indebtedness | |
Unamortized discount and debt issuance costs | $ 221 |
Mortgage Notes | |
Indebtedness | |
Debt outstanding | $ 7,297 |
Contractual Stated Interest Rate | 6.20% |
Effective Interest Rate | 6.70% |
Monthly Payment | $ 72 |
Leases with DHC and Healthpea_2
Leases with DHC and Healthpeak Properties Inc. and Management Agreements with DHC - Narrative (Details) $ in Thousands | Apr. 07, 2021living_unit | Mar. 08, 2021USD ($) | May 05, 2021USD ($) | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($)facilitypropertycommunityliving_unit | Mar. 31, 2020USD ($)property | Dec. 31, 2020buildingcommunity | Dec. 31, 2019USD ($)leaseshares | Apr. 09, 2021living_unitcommunity |
Leases | |||||||||
Loss on termination of leases | $ 0 | $ 22,899 | |||||||
Decrease in working capital liabilities | (51,547) | ||||||||
Revenue from contract with customer, including assessed tax | $ 269,100 | 297,445 | |||||||
Net present value of the allocated minimum rate percentage | 9.00% | ||||||||
Net proceeds sale of the community discount percentage | 9.00% | ||||||||
Net proceeds of reinvested sale rate percentage | 5.50% | ||||||||
Forecast | |||||||||
Leases | |||||||||
General Insurance Expense, Deductible | $ 1,000 | ||||||||
Subsequent Event | |||||||||
Leases | |||||||||
Additional consideration from share issuances | $ 23,453 | ||||||||
Management Fee Revenue | |||||||||
Leases | |||||||||
Revenue from contract with customer, including assessed tax | $ 13,850 | 17,051 | |||||||
Gain (loss) on termination of lease | $ 3,100 | ||||||||
Healthpeak Properties Inc | |||||||||
Leases | |||||||||
Number of master leases | community | 1 | ||||||||
SNH | Management Fee Revenue | |||||||||
Leases | |||||||||
Revenues form senior living communities | $ 12,910 | 16,462 | |||||||
SNH | Transaction Agreement | |||||||||
Leases | |||||||||
Number of properties managed | community | 228 | ||||||||
SNH | Other Services Provided to Residents at Managed Communities | |||||||||
Leases | |||||||||
Rehabilitation service revenue | $ 5,441 | $ 8,057 | |||||||
SNH | Shares Issued | Transaction Agreement | |||||||||
Leases | |||||||||
Additional consideration from share issuances | $ 75,000 | ||||||||
Excess fair value of shares issued | 97,899 | ||||||||
SNH | Shares Issued | Transaction Agreement | Diversified Healthcare Trust | |||||||||
Leases | |||||||||
Number of shares sold (in shares) | shares | 10,268,158 | ||||||||
SNH | Shares Issued | Transaction Agreement | Diversified Healthcare Trust Shareholders | |||||||||
Leases | |||||||||
Number of shares sold (in shares) | shares | 16,118,849 | ||||||||
DHC | |||||||||
Leases | |||||||||
Termination fees | $ 682,000 | ||||||||
Number of buildings to be sold | building | 1 | ||||||||
Senior Living Communities | |||||||||
Leases | |||||||||
Number of properties operated | property | 252 | ||||||||
Number of living units in properties operated | living_unit | 29,265 | ||||||||
Number of communities operating | community | 4 | ||||||||
Number of buildings to be sold | building | 1 | ||||||||
Senior Living Communities | Subsequent Event | |||||||||
Leases | |||||||||
Number of living units in properties operated | living_unit | 120 | ||||||||
Senior Living Communities | Diversified Healthcare Trust | Strategic Plan | |||||||||
Leases | |||||||||
Management Agreement, Percentage Of Communities Allowed For Termination | 20.00% | ||||||||
Management Agreement, Percentage Of EBITDA | 90.00% | ||||||||
Senior Living Communities | Diversified Healthcare Trust | Strategic Plan | Subsequent Event | |||||||||
Leases | |||||||||
Number of properties operated | community | 108 | ||||||||
Number of living units in properties operated | living_unit | 7,500 | ||||||||
Management Agreement, Term Of Agreement, Extension | 2 years | ||||||||
Management Agreement, Percentage Of Communities Allowed For Termination | 10.00% | ||||||||
Management Agreement, Percentage Of EBITDA | 80.00% | ||||||||
Senior Living Communities | SNH | |||||||||
Leases | |||||||||
Number of properties managed | property | 244 | ||||||||
Senior Living Communities | SNH | Management Fee Revenue | |||||||||
Leases | |||||||||
Revenues form senior living communities | $ 834 | $ 462 | |||||||
Senior Living Communities | SNH | Management Fee Revenue | D&R Yonkers LLC | |||||||||
Leases | |||||||||
Revenues form senior living communities | 106 | 127 | |||||||
Senior Living Communities | SNH | Transaction Agreement | |||||||||
Leases | |||||||||
Number of master leases | lease | 5 | ||||||||
Related party transaction costs | 1,095 | ||||||||
Senior Living Communities | DHC | |||||||||
Leases | |||||||||
Number of communities sold | community | 9 | ||||||||
Additional number of communities managed | community | 7 | ||||||||
Lease expense | 397 | 294 | |||||||
Senior Living Communities | DHC | Management Fee Revenue | |||||||||
Leases | |||||||||
Revenue from contract with customer, including assessed tax | $ 5,255 | $ 1,052 | |||||||
SNF | |||||||||
Leases | |||||||||
Number of properties operated | facility | 9 | ||||||||
Number of living units in properties operated | living_unit | 955 | ||||||||
SNF | Diversified Healthcare Trust | Strategic Plan | Subsequent Event | |||||||||
Leases | |||||||||
Number of properties operated | community | 27 | ||||||||
Number of living units in properties operated | living_unit | 1,500 |
Business Management Agreement_2
Business Management Agreement with RMR LLC - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Reit Management And Research LLC | ||
Business Management Agreement [Line Items] | ||
Business management fees and costs | $ 1,804 | $ 2,351 |
Related Person Transactions (De
Related Person Transactions (Details) - USD ($) $ in Thousands | Feb. 24, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | ||||
Accrued expenses and other current liabilities | $ 45,190 | $ 41,843 | ||
Operating lease right-of-use assets | 27,040 | 18,030 | ||
COVID-19 | ||||
Related Party Transaction [Line Items] | ||||
Accrued expenses and other current liabilities | $ 31,771 | 30,090 | ||
DHC | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Number of shares owned (in shares) | 10,691,658 | |||
Percentage of outstanding common shares owned | 33.80% | |||
ABP Trust | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Number of shares owned (in shares) | 1,972,783 | |||
Percentage of outstanding common shares owned | 6.20% | |||
Rent expense | $ 477 | $ 435 | ||
Leasehold improvements, gross | $ 2,667 | |||
Incremental borrowing rate | 3.90% | |||
ABP Trust | Affiliated Entity | Minimum | ||||
Related Party Transaction [Line Items] | ||||
Rent expense | 1,026 | |||
ABP Trust | Affiliated Entity | Maximum | ||||
Related Party Transaction [Line Items] | ||||
Rent expense | $ 1,395 | |||
ABP Trust | Headquarters | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Operating lease, cost | $ 9,746 | |||
Lease liability | 10,027 | 496 | ||
Operating lease right-of-use assets | $ 9,964 | $ 452 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 3 Months Ended | |
Sep. 30, 2020USD ($) | Mar. 31, 2021USD ($)lawsuit | |
Office of the Inspector General | ||
Loss Contingencies [Line Items] | ||
Estimated minimum loss | $ 0 | |
Lefevre v. Five Star Quality Care, Inc. | ||
Loss Contingencies [Line Items] | ||
Number of lawsuits | lawsuit | 2 | |
Litigation settlement expense | $ 2,473,000 |
COVID-19 Pandemic - Narrative (
COVID-19 Pandemic - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Unusual or Infrequent Item, or Both [Line Items] | |||
Other operating income | $ 7,793 | $ 0 | |
COVID-19 | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Payments for protective equipment | 8,773 | ||
Deferred payroll taxes | 27,593 | $ 27,593 | |
Payment of deferred taxes | 22,194 | ||
AMT amount | 554 | ||
COVID-19 | Senior living | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Payments for protective equipment | $ 852 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021USD ($)facilitypropertyliving_unit | Apr. 09, 2021USD ($)living_unitcommunity | Apr. 07, 2021living_unit | |
Strategic Plan | |||
Subsequent Event [Line Items] | |||
Transaction costs | $ 250 | ||
Strategic Plan | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Expected costs | $ 20,500 | ||
Strategic Plan | Subsequent Event | Retention Bonus Payments | |||
Subsequent Event [Line Items] | |||
Expected costs | 7,500 | ||
Strategic Plan | Subsequent Event | Severance, Benefits and Transition Expenses | |||
Subsequent Event [Line Items] | |||
Expected costs | 10,200 | ||
Strategic Plan | Subsequent Event | Restructuring Expenses | |||
Subsequent Event [Line Items] | |||
Expected costs | 2,800 | ||
Senior Living Communities | |||
Subsequent Event [Line Items] | |||
Number of properties operated | property | 252 | ||
Number of living units in properties operated | living_unit | 29,265 | ||
Senior Living Communities | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of living units in properties operated | living_unit | 120 | ||
SNF | |||
Subsequent Event [Line Items] | |||
Number of properties operated | facility | 9 | ||
Number of living units in properties operated | living_unit | 955 | ||
Diversified Healthcare Trust | Strategic Plan | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Costs expected to be reimbursed | 15,000 | ||
Diversified Healthcare Trust | Strategic Plan | Subsequent Event | Retention Bonus Payments | |||
Subsequent Event [Line Items] | |||
Costs expected to be reimbursed | 5,900 | ||
Diversified Healthcare Trust | Strategic Plan | Subsequent Event | Severance, Benefits and Transition Expenses | |||
Subsequent Event [Line Items] | |||
Costs expected to be reimbursed | 7,500 | ||
Diversified Healthcare Trust | Strategic Plan | Subsequent Event | Restructuring Expenses | |||
Subsequent Event [Line Items] | |||
Costs expected to be reimbursed | $ 1,600 | ||
Diversified Healthcare Trust | Senior Living Communities | Strategic Plan | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of properties operated | community | 108 | ||
Number of living units in properties operated | living_unit | 7,500 | ||
Diversified Healthcare Trust | SNF | Strategic Plan | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of properties operated | community | 27 | ||
Number of living units in properties operated | living_unit | 1,500 | ||
Diversified Healthcare Trust | Inpatient Rehabilitation Clinics | |||
Subsequent Event [Line Items] | |||
Number of properties operated | property | 37 | ||
Diversified Healthcare Trust | Inpatient Rehabilitation Clinics | Strategic Plan | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of properties operated | community | 37 |
Uncategorized Items - fve-20210
Label | Element | Value |
Restricted Cash, Current | us-gaap_RestrictedCashCurrent | $ 24,290,000 |
Restricted Cash, Current | us-gaap_RestrictedCashCurrent | 23,717,000 |
Other Restricted Cash And Cash Equivalents | fve_OtherRestrictedCashAndCashEquivalents | 1,189,000 |
Other Restricted Cash And Cash Equivalents | fve_OtherRestrictedCashAndCashEquivalents | $ 1,438,000 |