Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 21, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 1-16817 | ||
Entity Registrant Name | ALERISLIFE 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 | ALR | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 108 | ||
Entity Common Stock, Shares Outstanding | 32,618,779 | ||
Documents Incorporated by Reference | Certain information required by Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K is incorporated by reference to our definitive Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the fiscal year ended December 31, 2021. | ||
Entity Central Index Key | 0001159281 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Audit Information [Abstract] | ||
Auditor Name | Deloitte & Touche LLP | RSM US LLP |
Auditor Location | Boston, Massachusetts | Boston, Massachusetts |
Auditor Firm ID | 34 | 49 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 66,987 | $ 84,351 |
Restricted cash and cash equivalents | 24,970 | 23,877 |
Accounts receivable, net | 9,244 | 9,104 |
Due from related person | 41,664 | 96,357 |
Debt and equity investments, of which $7,609 and $11,125 are restricted, respectively | 19,535 | 19,961 |
Prepaid expenses and other current assets | 24,433 | 28,658 |
Total current assets | 186,833 | 262,308 |
Property and equipment, net | 159,843 | 159,251 |
Operating lease right-of-use assets | 9,197 | 18,030 |
Finance lease right-of-use assets | 3,467 | 4,493 |
Restricted cash and cash equivalents | 982 | 1,369 |
Restricted debt and equity investments | 3,873 | 4,788 |
Other long-term assets | 12,082 | 3,967 |
Total assets | 376,277 | 454,206 |
Current liabilities: | ||
Accounts payable | 37,516 | 23,454 |
Accrued expenses and other current liabilities | 31,488 | 42,208 |
Accrued compensation and benefits | 34,295 | 70,543 |
Accrued self-insurance obligations | 31,739 | 31,355 |
Operating lease liabilities | 699 | 2,567 |
Finance lease liabilities | 872 | 808 |
Due to related persons | 3,879 | 6,585 |
Mortgage note payable | 419 | 388 |
Total current liabilities | 140,907 | 177,908 |
Long-term liabilities: | ||
Accrued self-insurance obligations | 34,744 | 37,420 |
Operating lease liabilities | 9,366 | 17,104 |
Finance lease liabilities | 3,050 | 3,921 |
Mortgage note payable | 6,364 | 6,783 |
Other long-term liabilities | 256 | 538 |
Total long-term liabilities | 53,780 | 65,766 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Common stock, par value $0.01: 75,000,000 shares authorized, 32,662,649 and 31,679,207 shares issued and outstanding, respectively | 327 | 317 |
Additional paid-in-capital | 461,298 | 460,038 |
Accumulated deficit | (281,064) | (251,139) |
Accumulated other comprehensive income | 1,029 | 1,316 |
Total shareholders’ equity | 181,590 | 210,532 |
Total liabilities and shareholders' equity | $ 376,277 | $ 454,206 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Investments in available for sale securities, restricted | $ 7,609 | $ 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) | 32,662,649 | 31,679,207 |
Common stock, shares outstanding (in shares) | 32,662,649 | 31,679,207 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
REVENUES | ||
Revenues | $ 934,593 | $ 1,163,742 |
Other operating income | 7,795 | 3,435 |
OPERATING EXPENSES | ||
General and administrative | 85,718 | 85,835 |
Restructuring expenses | 19,196 | 1,448 |
Depreciation and amortization | 11,873 | 10,997 |
Total operating expenses | 968,247 | 1,151,235 |
Operating (loss) income | (25,859) | 15,942 |
Interest, dividend and other income | 358 | 757 |
Interest and other expense | (1,683) | (1,631) |
Unrealized gain on equity investments | 730 | 480 |
Realized gain on sale of debt and equity investments | 218 | 425 |
Loss on termination of leases | (3,278) | (22,899) |
Loss before income taxes and equity in losses of an investee | (29,514) | (6,926) |
Provision for income taxes | (234) | (663) |
Equity in losses of an investee | (177) | 0 |
Net loss | $ (29,925) | $ (7,589) |
Weighted average shares outstanding - basic (in shares) | 31,591 | 31,471 |
Weighted average shares outstanding - diluted (in shares) | 31,591 | 31,471 |
Net loss per share—basic (in dollars per share) | $ (0.95) | $ (0.24) |
Net loss per share - diluted (in dollars per share) | $ (0.95) | $ (0.24) |
Total management and operating revenues | ||
REVENUES | ||
Revenues | $ 180,131 | $ 221,927 |
Lifestyle Services | ||
REVENUES | ||
Revenues | 68,014 | 82,032 |
OPERATING EXPENSES | ||
Cost of revenues | 59,322 | 66,853 |
Residential | ||
REVENUES | ||
Revenues | 64,638 | 77,015 |
Residential management fees | ||
REVENUES | ||
Revenues | 47,479 | 62,880 |
Reimbursed community-level costs incurred on behalf of managed communities | ||
REVENUES | ||
Revenues | 722,857 | 916,167 |
OPERATING EXPENSES | ||
Cost of revenues | 722,857 | 916,167 |
Other reimbursed expenses | ||
REVENUES | ||
Revenues | 31,605 | 25,648 |
Residential wages and benefits | ||
OPERATING EXPENSES | ||
Cost of revenues | 38,970 | 41,819 |
Other residential operating expenses | ||
OPERATING EXPENSES | ||
Cost of revenues | $ 30,311 | $ 28,116 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (29,925) | $ (7,589) |
Other comprehensive (loss) income: | ||
Unrealized (loss) gain on debt investments, net of tax of $0 and $0, respectively | (420) | 649 |
Realized loss in equity of an investee, net of tax of $0 and $0, respectively | 177 | 0 |
Realized gain on debt investments reclassified and included in net (loss), net of tax of $0 and $0, respectively | (44) | (302) |
Other comprehensive (loss) income | (287) | 347 |
Comprehensive loss | $ (30,212) | $ (7,242) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Tax on unrealized gain (loss) on debt investments | $ 0 | $ 0 |
Realized loss in equity of an investee, tax | 0 | 0 |
Tax on realized (gain) loss on debt investments | $ 0 | $ 0 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders’ 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 |
Balance (in shares) at Dec. 31, 2019 | 5,154,892 | |||||||
Balance at Dec. 31, 2019 | $ 119,981 | $ 0 | $ 52 | $ 362,450 | $ (245,184) | $ 1,694 | $ 2,663 | $ (1,694) |
Comprehensive income (loss): | ||||||||
Net loss | (7,589) | (7,589) | ||||||
Unrealized gain on debt investments, net of tax | 649 | 649 | ||||||
Realized gain on debt investments reclassified and included in net loss, net of tax | (302) | (302) | ||||||
Equity in realized loss of an investee | 0 | |||||||
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) | 155,150 | |||||||
Grants under share award plan and share-based compensation | 525 | $ 1 | 524 | |||||
Repurchases and forfeitures under share award plan (in shares) | (17,842) | |||||||
Repurchases and forfeitures under share award plan | $ (72) | (12) | (60) | |||||
Balance (in shares) at Dec. 31, 2020 | 31,679,207 | 31,679,207 | ||||||
Balance at Dec. 31, 2020 | $ 210,532 | $ 317 | 460,038 | (251,139) | 1,316 | |||
Comprehensive income (loss): | ||||||||
Net loss | (29,925) | (29,925) | ||||||
Unrealized gain on debt investments, net of tax | (420) | (420) | ||||||
Realized gain on debt investments reclassified and included in net loss, net of tax | (44) | (44) | ||||||
Equity in realized loss of an investee | 177 | 177 | ||||||
Grants under share award plan and share based compensation (in shares) | 1,084,600 | |||||||
Grants under share award plan and share-based compensation | 1,514 | $ 11 | 1,503 | |||||
Repurchases and forfeitures under share award plan (in shares) | (101,158) | |||||||
Repurchases and forfeitures under share award plan | $ (244) | $ (1) | (243) | |||||
Balance (in shares) at Dec. 31, 2021 | 32,662,649 | 32,662,649 | ||||||
Balance at Dec. 31, 2021 | $ 181,590 | $ 327 | $ 461,298 | $ (281,064) | $ 1,029 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net loss | $ (29,925) | $ (7,589) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 11,873 | 10,997 |
Unrealized gain on equity investments | (730) | (480) |
Realized gain on sale of debt and equity investments | (218) | (425) |
Lease terminations | (408) | 22,899 |
Long-lived asset impairment | 890 | 0 |
Equity in loss of an investee | 177 | 0 |
Share-based compensation | 1,484 | 513 |
Provision for losses on accounts receivables | 2,089 | 1,450 |
Other non-cash expense adjustments, net | 992 | 633 |
Changes in assets and liabilities: | ||
Accounts receivable | (2,229) | 23,636 |
Due from related person | 54,693 | (70,799) |
Prepaid expenses and other current and long term assets | (4,248) | (10,324) |
Accounts payable | 10,351 | (6,986) |
Accrued expenses and other current liabilities | (10,894) | 37,813 |
Accrued compensation and benefits | (36,248) | 34,914 |
Due to related persons | (2,706) | 4,338 |
Other current and long term liabilities | (2,516) | 10,791 |
Net cash (used in) provided by operating activities | (7,573) | 51,381 |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Acquisition of property and equipment | (9,439) | (5,427) |
Proceeds from sale of debt and equity investments | (3,156) | (5,750) |
Proceeds from sale of debt and equity investments | 4,934 | 10,408 |
Proceeds from sale of property and equipment | 0 | 2,725 |
Distributions in excess of earnings from an investee | 11 | 287 |
Net cash (used in) provided by investing activities | (7,650) | 2,243 |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Costs related to issuance of common stock | 0 | (559) |
Repayments of mortgage notes payable | (414) | (387) |
Repayments of finance lease principal | (807) | 0 |
Payment of employee tax obligations on withheld shares | (214) | (60) |
Net cash used in financing activities | (1,435) | (1,006) |
(Decrease) increase in cash and cash equivalents and restricted cash and cash equivalents | (16,658) | 52,618 |
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 | 92,939 | 109,597 |
Reconciliation of cash and cash equivalents and restricted cash and cash equivalents: | ||
Cash and cash equivalents | 66,987 | 84,351 |
Current restricted cash and cash equivalents | 24,970 | 23,877 |
Other restricted cash and cash equivalents | 982 | 1,369 |
Cash and cash equivalents and restricted cash and cash equivalents at end of period | 92,939 | 109,597 |
Supplemental cash flow information: | ||
Interest paid | 453 | 480 |
Income taxes paid, net | 449 | (40) |
Operating lease payments, including lease termination payment | 7,952 | 4,643 |
Financing lease interest payments | 332 | 92 |
Non-cash investing and financing activities: | ||
Liabilities assumed related to issuance of our common stock | 0 | 51,547 |
Change in accrued capital | 267 | 2,656 |
Right-of-use assets obtained in exchange for finance lease liabilities | 0 | 4,724 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 9,746 | $ 0 |
Basis of Presentation and Organ
Basis of Presentation and Organization | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Organization | Basis of Presentation and Organization General . AlerisLife Inc., formerly known as Five Star Senior Living Inc., collectively with its consolidated subsidiaries, the Company, we, us or our, is a holding company incorporated in Maryland and substantially all of our business is conducted by our two segments: (i) residential (formerly known as senior living) through our brand Five Star Senior Living, or Five Star, and (ii) lifestyle services (formerly known as rehabilitation and wellness services) primarily through our brands Ageility Physical Therapy Solutions and Ageility Fitness, or collectively Ageility, as well as Windsong Home Health. As of December 31, 2021, through our residential segment, we owned and operated or managed, 141 senior living communities located in 28 states with 20,105 living units, including 10,423 independent living apartments, 9,636 assisted living suites, which includes 1,872 of our Bridge to Rediscovery memory care units, and one continuing care retirement community, or CCRC, with 106 living units, including 46 skilled nursing facility, or SNF, units that was closed in February 2022. We managed 121 of these senior living communities (18,005 living units) for Diversified Healthcare Trust, or DHC, and owned 20 of these senior living communities (2,100 living units). As of December 31, 2021, we transitioned the management of 107 senior living communities with approximately 7,400 living units to new operators pursuant to the Strategic Plan described below. On September 30, 2021, our former lease with Healthpeak Properties, Inc, or PEAK, for four communities (with approximately 200 living units) was terminated. The foregoing numbers exclude living units categorized as out of service. Our lifestyle services segment provides a comprehensive suite of lifestyle services including Ageility rehabilitation and fitness, Windsong home health and other home based, concierge services at senior living communities we own and operate or manage as well as at unaffiliated senior living communities. As of December 31, 2021, Ageility operated ten inpatient rehabilitation clinics in senior living communities owned by DHC, all of which are in communities that were transitioned to new operators during the year ended December 31, 2021. As of December 31, 2021, Ageility operated 205 outpatient rehabilitation clinics, of which 106 were located at Five Star operated senior living communities and 99 were located within senior living communities not operated by Five Star. In December 2021, we closed 17 outpatient rehabilitation clinics that were in senior living communities that were transitioned to a new operator in 2021 or closed in February 2022. 2020 Restructuring of our Business Arrangements with DHC . Effective as of January 1, 2020 we restructured our business arrangements with DHC, and after giving effect to the restructuring transactions, all 244 of the senior living communities owned by DHC that we then operated were pursuant to management agreements. In June 2021, we and DHC replaced our management agreements that were then in effect with the Master Management Agreement, as described below: We recognized transaction costs of $1,448 related to the 2020 restructuring of our business arrangements with DHC for the year ended December 31, 2020. For more information regarding the 2020 Restructuring see Note 10. Strategic Plan . On April 9, 2021, we announced a new strategic plan, or the Strategic Plan, including to: • Reposition AlerisLife's senior living management service offering to focus on larger independent living and assisted living as well as active adult communities and exit skilled nursing by transitioning 108 communities to new operators and closing approximately 1,500 SNF living units in retained CCRCs; • Evolve through investment in an enhanced scalable corporate shared services center to support operations and growth and to deliver differentiated, customer focused senior living resident experiences across a segmented portfolio of communities, as well as through home health and concierge offerings. We are expanding our Ageility service line by introducing innovative fitness and personal training offerings to complement outpatient therapy, and home health services, including strength training, orthopedic rehabilitation, fall prevention, cognitive or memory enhancement, aquatic therapy, and general personal fitness and wellness programs; and • Diversify with a focus on revenue diversification opportunities, including growing Ageility rehabilitation services and expanding lifestyle services to provide choice based, financially flexible senior living resident experience and reach customers outside of senior living communities. During and subsequent to the year ended December 31, 2021, we made the following progress with respect to the Reposition phase of the Strategic Plan: • We and DHC amended our management arrangements on June 9, 2021; see Note 10 for additional information on the amendments to the management arrangements with DHC, • Transitioned the management of 107 senior living communities with approximately 7,400 living units to new operators, • Closed one senior living community with approximately 100 living units in February 2022, • Closed all 1,532 SNF living units in 27 managed CCRCs, and began collaborating with DHC to reposition these SNF units, • Closed 27 of the 37 Ageility inpatient rehabilitation clinics we planned to close, and • For the remaining ten Ageility inpatient rehabilitation clinics, entered into agreements with the new operators to continue to provide these services through August 2022. During and subsequent to the year ended December 31, 2021, we made the following progress with respect to the Evolve phase of the Strategic Plan: • Completed enhancements to our corporate technology infrastructure, • Invested in critical areas of residential experience at Five Star senior living communities, including community wireless connectivity, resident transportation services and re-designed senior living community common areas and resident units, deploying $11,684 and $103,378 of capital in our owned and managed communities, respectively, • Invested in digital marketing infrastructure to effectively reduce cost per digital lead by approximately 70.0%, • Entered into a culinary services partnership with Compass Group to transform the senior living resident dining experience, • Entered into a collaboration with Dispatch Health to enable senior living resident access to ambulatory care services in their community, • Standardized certain administrative functions through centralization efforts to enhance operating efficiency, and • Subsequent to year end, we hired a Chief People Officer and a Chief Customer Officer. During the year end December 31, 2021, we made the following progress with respect to the Diversify phase of the Strategic Plan: • Opened 15 net new Ageility outpatient rehabilitation clinics, exclusive of the closure of 17 Ageility outpatient rehabilitation clinics in December 2021 in Five Star senior living communities that were transitioned to new operators in 2021 or closed in February 2022, bringing the Ageility outpatient rehabilitation clinic total to 205, as of December 31, 2021, and • Grew Ageility fitness revenues to $3,303 or a 38.1% increase over the same period in 2020. In connection with the repositioning of our residential management services, we incurred restructuring expenses of $19,196, approximately $13,311 of which were reimbursed by DHC. These expenses included $7,100 of retention bonus payments, $9,091 of severance, benefits and transition expenses, and $3,005 of transaction expenses. See Note 19 for summary of restructuring expenses and the corresponding liability. See Notes 10 and 19 for more information on the Strategic Plan, the amendments to our management arrangements and our business arrangements with DHC. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation . The accompanying consolidated financial statements include the accounts of AlerisLife Inc, formerly known as Five Star Senior Living Inc., and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Estimates and Assumptions. The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires us to make estimates and assumptions that may affect the amounts reported in these consolidated financial statements and related notes. Significant estimates in our 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 consolidated financial statements in the period that they are determined. Fair Value of Financial Instruments. Our financial instruments are limited to cash and cash equivalents, accounts receivable, debt and equity investments, accounts payable and a mortgage note payable. Except for our mortgage note payable, the fair value of these financial instruments was not materially different from their carrying values at December 31, 2021 and 2020. We estimate the fair values of our mortgage note payable using market quotes when available, discounted cash flow analyses and current prevailing interest rates. Our assets recorded at fair value have been categorized based on a fair value hierarchy. We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels. Level 1 - Inputs are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date. Level 2 - Inputs are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments and quoted prices in inactive markets. Level 3 - Inputs are generated from model-based techniques that use significant assumptions that are not observable in the market. Segment Information. Operating segments are components of an enterprise that engage in business activities and for which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in determining the allocation of resources and in assessing performance. Our chief operating decision maker is our President and Chief Executive Officer. We operate in two reportable segments: (1) residential (formerly known as senior living) and (2) lifestyle services (formerly known as rehabilitation and wellness services). At December 31, 2021, we changed the name of our segments to better describe the business and operations of those segments. There were no changes in the composition of the segments. In the residential reportable segment, we manage for the account of others and operate for our own account, primarily independent living communities and assisted living communities that are subject to centralized oversight through our Five Star division. In the lifestyle services segment, we primarily provide a comprehensive suite of rehabilitation and wellness services, including physical, occupational, speech and other specialized therapy services, in inpatient and outpatient clinics through our Ageility division. Corporate and other amounts excluded from our reportable segments' performance are separately stated and include amounts related to functional areas such as finance, information technology, legal and human resources. We allocate corporate and other amounts to our residential and lifestyle services segments to assist in determining the allocation of resources and assessing the performance of our segments. Corporate and other allocation amounts are determined by applying an estimated cost rate to the revenues of each division within the reportable segments. Estimated cost rates used to allocate corporate and other amounts vary by division. All of our operations and assets are located in the United States, except for the operations of our captive insurance company subsidiary, which is organized in the Cayman Islands. We do not allocate assets to operating segments and, therefore, no asset information is provided for reportable segments. See Note 4 for more information. Net Income (Loss) Per Share. We calculate basic net income (loss) per common share, or EPS, by dividing net income (loss) by the weighted average number of common shares outstanding during the year. We calculate diluted EPS using the more dilutive of the two-class method or the treasury stock method. See Note 7 for more information. Cash and Cash Equivalents and Restricted Cash and Cash Equivalents. Cash and cash equivalents as of December 31, 2021 and 2020, consisting of short-term, highly liquid investments and money market funds with original maturities of three months or less at the date of purchase, are carried at cost, which approximates market. Certain cash account balances exceed Federal Deposit Insurance Corporation insurance limits of $250 per account and, as a result, there is a concentration of credit risk related to amounts in excess of the insurance limits. We regularly monitor the financial stability of the financial institutions and believe that we are not exposed to any significant credit risk in cash and cash equivalents. Restricted cash and cash equivalents as of December 31, 2021 and 2020 include cash we deposited as security for obligations arising from our self-insurance programs and other amounts for which we are required to establish escrows, including real estate taxes and capital expenditures, as required by our mortgage and certain resident security deposits. Our restricted cash and cash equivalents consist of the following: As of December 31, 2021 2020 Current Long-Term Current Long-Term Workers’ compensation letter of credit collateral $ 22,899 $ — $ 21,561 $ — Insurance reserves and other restricted amounts 356 982 644 1,369 Health deposit-imprest cash 1,103 — 1,103 — Real estate taxes and certain capital expenditures as required by our mortgage 612 — 569 — Total $ 24,970 $ 982 $ 23,877 $ 1,369 Concentrations of Credit Risk. Our financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments and accounts receivable. We have investment policies that, among other things, limit investments to investment-grade securities. We hold our cash and cash equivalents and investments with high-quality financial institutions and we monitor the credit ratings of those institutions. We perform ongoing credit evaluations of our customers, and the risk with respect to accounts receivable is further mitigated by the diversity, both by geography and by industry, of the customer base. As of December 31, 2021, payments due from Medicare and Medicaid represented 32.1% and 1.8%, respectively, of our gross consolidated accounts receivable balance. As of December 31, 2020, payments due from Medicare and Medicaid represented 32.0% and 1.2%, respectively, of our gross consolidated accounts receivable balance. The Company does not believe there are significant credit risks associated with the receivables from these governmental programs. We derive our residential management fees from DHC. As of December 31, 2021 and 2020, we had net $37,866 and $89,911 due from DHC, respectively, which are included in due from related persons and due to related persons on our consolidated balance sheets. See Note 15 for more information. The balance due at December 31, 2020 included deferred payroll taxes of $22,194 under the CARES Act which was paid in September 2021, described more fully in Note 18, as well as liabilities incurred on behalf of DHC of $30,090, which is also included in accrued expenses and other current liabilities on our consolidated balance sheets. Accounts Receivable and Allowance for Doubtful Accounts. We record accounts receivable net of an allowance for doubtful accounts to represent the Company's estimate of expected losses. The adequacy of the allowance for doubtful accounts is reviewed on an ongoing basis using historical payment trends, write-off experience, analyses of accounts receivable portfolios by payor source and the age of the receivable as well as a review of specific accounts, the terms of the agreements, the residents’ or third party payers’ stated intent to pay, the payers’ financial capacity to pay and other factors. Billings for services under third-party payer programs are recorded net of estimated retroactive adjustments, if any. Retroactive adjustments are accrued on an estimated basis in the period the related services are rendered and adjusted in future periods or as final settlements are determined. Contractual or cost related adjustments from Medicare or Medicaid are accrued when assessed (without regard to when the assessment is paid or withheld). Subsequent adjustments to these accrued amounts are recorded in net revenues when known. The allowance for doubtful accounts reflects estimates that we periodically review and revise based on new information, to which revisions may be material. Our allowance for doubtful accounts consists of the following: Allowance for Doubtful Accounts Balance at Beginning of Period Provision for Doubtful Accounts Recoveries Write-offs Balance at End of Period December 31, 2020 $ 4,664 $ 1,450 $ 156 $ (3,121) $ 3,149 December 31, 2021 $ 3,149 $ 2,089 $ 323 $ (2,711) $ 2,850 Equity and Debt Investments. Equity investments are carried at fair value with changes in fair value recorded in earnings. At December 31, 2021, these equity investments had a fair value of $13,033 and a net unrealized holding gain of $4,105. At December 31, 2020, these equity investments had a fair value of $12,439 and a net unrealized holding gain of $3,376. Debt investments, which are classified as available for sale, are carried at fair value, with unrealized gains and losses reported as a separate component of shareholders’ equity within accumulated other comprehensive income and “other than temporary impairment” losses recorded through earnings. Realized gains and losses on debt investments are recognized based on specific identification. Restricted debt investments are kept as security for obligations arising from our self-insurance programs. At December 31, 2021, these debt investments had a fair value of $10,375 and a net unrealized holding gain of $296. At December 31, 2020, these debt investments had a fair value of $12,310 and a net unrealized holding gain of $756. In 2021 and 2020, our debt and equity investments generated interest and dividend income of $358 and $757, respectively, which is included in interest, dividend and other income in our consolidated statements of operations. The following table summarizes the fair value and gross unrealized losses related to our debt investments, aggregated by length of time that individual securities have been in a continuous unrealized loss position for the years ended: Debt Investments Less than 12 months Greater than 12 months Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized December 31, 2021 $ 2,474 $ 10 $ — $ — $ 2,474 $ 10 December 31, 2020 $ 291 $ 4 $ — $ — $ 291 $ 4 We routinely evaluate our debt investments to determine if they have been impaired. If the fair value of a debt investment is less than its book or carrying value and we expect that situation to continue for a more than temporary period, we will record an “other than temporary impairment” loss in our consolidated statements of operations. We evaluate the fair value of our debt investments by reviewing each investment’s current market price, the ratings of the investment, the financial condition of the issuer and our intent and ability to retain the investment during temporary market price fluctuations or until maturity. In evaluating the factors described above, we presume a decline in value to be an “other than temporary impairment” if the quoted market price of the investment is below the investment’s cost basis for an extended period, which we typically define as greater than twelve months. However, this presumption may be overcome if there is persuasive evidence indicating the value decline is temporary in nature, such as when the operating performance of the obligor is strong or if the market price of the investment is historically volatile. Additionally, there may be instances in which impairment losses are recognized even if the decline in value does not meet the criteria described above, such as if we plan to sell the investment in the near term and the fair value is below our cost basis. When we believe that a change in fair value of a debt investment is temporary, we record a corresponding credit or charge to other comprehensive income for any unrealized gains and losses. When we determine that impairment in the fair value of a debt investment is an “other than temporary impairment”, we record a charge to earnings. We did not record such an impairment charge for the years ended December 31, 2021 and 2020. Deferred Financing Costs. We capitalize issuance costs related to our secured revolving credit facility, or our credit facility, and amortize the deferred costs over the term of the agreement governing our credit facility, or our credit agreement. In June 2019, we entered into a new credit agreement to replace our prior credit facility with our $65,000 secured revolving credit facility, or the Credit Facility. See Note 9 for more information on our Credit Facility. Our unamortized balance of deferred finance costs was $75 and $288 at December 31, 2021 and 2020, respectively, which was included in prepaid expenses and other current assets on our consolidated balance sheets. The Credit Facility was terminated on January 27, 2022. Property and Equipment. Property and equipment are recorded at cost and depreciated using the straight-line basis over their estimated useful lives, which are typically as follows: Asset Class Estimated Useful Life Buildings 40 Building and land improvements 3-15 Equipment 7 Computer equipment and software 5 Furniture and fixtures 7 Network Development 10 Vehicles 5 We routinely perform an assessment of long-lived assets to determine if indicators of impairment are present. An indicator that the carrying amount of a long-lived asset, or asset group, is not recoverable exists if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group), or if other events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be recoverable. If we conclude that an impairment exists, we determine the amount of impairment loss by comparing the historical carrying value of the asset, or group of assets, to their estimated fair value. We determine estimated fair value based on input from market participants, our experience selling similar assets, market conditions and internally developed cash flow models that our assets or asset groups are expected to generate, and we consider these estimates to be a Level 3 fair value measurement. 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. 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. Occasionally, a minimum or best estimate amount may be increased or decreased when events result in a changed expectation. Self-Insurance. We partially self-insure up to certain limits for workers’ compensation, professional and general liability and automobile insurance programs. Claims that exceed these limits are insured up to contractual limits, over which we are self-insured. We fully self-insure all health-related claims for our covered employees. We have established an offshore captive insurance company subsidiary that participates in our workers’ compensation, professional and general liability and automobile insurance programs. Determining reserves for the casualty, liability, workers’ compensation and healthcare losses and costs that we have incurred as of the end of a reporting period involves significant judgments based upon our experience and our expectations of future events, including projected settlements for pending claims, known incidents that we expect may result in claims, estimates of incurred but not yet reported claims, expected changes in premiums for insurance provided by insurers whose policies provide for retroactive adjustments, estimated litigation costs and other factors. Since these reserves are based on estimates, the actual expenses we incur may differ from the amount reserved. We regularly adjust these estimates to reflect changes in the foregoing factors, our actual claims experience, recommendations from our professional consultants, changes in market conditions and other factors; it is possible that such adjustments may be material. Lease Accounting. At the inception of a contract, we, as lessee, evaluate and determine whether such a contract is or contains a lease based on whether such contract conveys the right to control the use of the identified asset. We apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. We have elected to apply the portfolio approach where possible in assessing our leases and performed an assessment of all our leases. In addition, we have elected the practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component if certain conditions are met. As lessee, we lease senior living communities and our headquarters, and enter into contracts for the use and maintenance of various equipment that contain a lease. We have determined that an equipment lease has met the criteria to be classified as a finance lease. The remaining leases are operating leases. We have determined that our leases for the use and maintenance of equipment and for our Ageility outpatient rehabilitation clinics are short-term leases, except for the equipment lease that is classified as a finance lease. We have made an accounting policy election for our leases, which are determined to be short-term leases, whereby we recognize the lease payments on a straight-line basis over the lease term and variable lease payments in the period in which the obligations for those payments are incurred. Expenses related to these leases are recognized in the consolidated statement of operations in other residential operating expenses, lifestyle services expenses and general and administrative expenses and are not material to our consolidated financial statements. We have determined that our leases for senior living communities, our headquarters and the equipment finance lease are long-term leases. A lessee is required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Accordingly, we have recorded a right-of-use asset and lease liability for all of our long-term leases. We determined that the discount rate implicit in the leases was not readily available, and therefore, we determined our incremental borrowing rate, or IBR, to calculate the right-of-use assets and lease liabilities, except for the equipment finance lease where we used the discount rate implicit in the lease. For purposes of determining the lease term, we concluded that it is not reasonably certain that our lease extensions will be exercised and, therefore, we included payments required to be made under the committed lease term in calculating the right-of-use assets and lease liabilities. In the consolidated statement of operations, expenses related to the leases for senior living communities are recognized in other senior living operating expenses, expenses related to our headquarters are recorded in general and administrative expenses and expenses related to our equipment finance lease are recognized in depreciation and amortization and interest and other expense. There were no variable lease payments in 2021 and 2020. Our leases have remaining lease terms of up to ten years. Our lease terms may include options to extend or terminate the lease. The options are included in the lease term when it is determined that it is reasonably certain the option will be exercised. The Company recorded right-of-use assets and lease liabilities, which are presented on the Consolidated Balance Sheet. At December 31, 2021, the weighted average remaining lease term was approximately eight years with a weighted average discount rate of 4.9%. The following table presents supplemental information related to operating and finance leases: Lease No. Number of Properties Remaining Renewal Options Right-of-Use Asset Future Minimum Rents IBR (1) Lease Liability 2022 2023 2024 2025 There after Total Headquarters lease (December 31, 2031) (2) 1 N/A $ 9,197 $ 1,046 $ 1,087 $ 1,128 $ 1,169 $ 7,858 $ 12,288 3.88% $ 10,065 Equipment lease N/A 5 year renewal option 3,467 1,140 1,140 1,140 1,140 — 4,560 7.60% 3,922 Total $ 12,664 $ 2,186 $ 2,227 $ 2,268 $ 2,309 $ 7,858 $ 16,848 4.90% $ 13,987 _______________________________________ (1) For the equipment lease, this represents the discount rate. (2) On January 10, 2022, we entered into a third amendment which reduced our headquarters leased space from approximately 41,000 square feet to approximately 30,000 square feet. Operating lease expenses consist of monthly rent costs, certain utilities and real estate taxes. For the years ended December 31, 2021 and 2020, we recognized $2,041 and $2,762 of operating lease expenses in other residential operating expenses, $2,431 and $2,356 in lifestyle services expenses and $2,082 and $1,760 in general and administrative expenses within our consolidated statements of operations, respectively. For the years ended December 31, 2021 and 2020, we recognized finance lease expenses of $1,256 and $323, consisting of amortization of the right-of-use asset of $924 and $230 and interest expense on the lease liability of $332 and $93, respectively, which are recorded in our consolidated statements of operations in depreciation and amortization and interest and other expenses, respectively. 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 $2,082 and $1,760 for the year ended December 31, 2021 and 2020, which amounts are 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 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 $10,065 and $496 for the lease liability and $9,197 and $452 for the right-of-use asset as of December 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 consolidated financial statements. On January 10, 2022, we entered into the third amendment to the lease for our Corporate headquarters which reduced the leased space from approximately 41,000 square feet to approximately 30,000 square feet. Commencing on July 1, 2022, the annual lease payment will range from $770 to $1,007 over the period of the lease. As a result of amending the lease we will decrease the right of use asset and lease liability by $2,629 and $2,658, respectively. ASC Topic 842, Leases, or ASC Topic 842, provides lessors with a practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component if certain conditions are met. In addition, ASC Topic 842 clarifies which ASC Topic (ASC Topic 842 or FASB ASC Topic 606, Revenue from Contracts with Customers , or ASC Topic 606) applies for the combined component. Specifically, if the non-lease components associated with the lease component are the predominant component of the combined components, the lessor should account for the combined component in accordance with ASC Topic 606. Otherwise, the lessor should account for the combined component as an operating lease. We have elected this practical expedient and recognized revenue under our resident agreements at our independent living and assisted living communities based upon the predominant component rather than allocating the consideration and separately accounting for it under ASC Topic 842 and ASC Topic 606. We have concluded that the non-lease components of the agreements with respect to our independent and assisted living communities are the predominant component of the leases and, therefore, we recognize revenue for these agreements under ASC Topic 606. Stock-Based Compensation. We have a stock-based compensation plan under which we grant equity-based awards. We measure the compensation cost of award recipients’ services received in exchange for an award of equity instruments based on the grant date fair value of the underlying award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award. The impact of forfeitures are recognized as they occur. Income Taxes. Our income tax expense includes U.S. income taxes. Certain items of income and expense are not reported in tax returns and financial statements in the same year. We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences to be included in our financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse, while the effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We can recognize a tax benefit only if it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that has a greater than 50% likelihood of being realized. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent, we believe that we are more likely than not that all or a portion of deferred tax assets will not be realized, we establish a valuation allowance to reduce the deferred tax assets to the appropriate valuation. To the extent we establish a valuation allowance or increase or decrease this allowance in a given period, we include the related tax expense or tax benefit within the tax provision in the consolidated statement of operations in that period. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. In the future, if we determine that we would be able to realize our deferred tax assets in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance and record an income tax benefit within the tax provision in the consolidated statement of operations in that period. We pay franchise taxes in certain states in which we have operations. We have included franchise taxes in general and administrative in our consolidated statements of operations. Revenue Recognition. We recognize revenue from contracts with customers using the practical expedient that allows for the use of a portfolio approach, because we have determined that the effect of applying the guidance to our portfolios of contracts on our consolidated financial statements would not differ materially from applying the guidance to each individual contract within the respective portfolio or our performance obligations within such portfolio. The five-step model requires us to: (i) identify our contracts with customers; (ii) identify our performance obligations under those contracts; (iii) determine the transaction prices of those contracts; (iv) allocate the transaction prices to our performance obligations in those contracts; and (v) recognize revenue when each performance obligation under those contracts is satisfied. Revenue recognition occurs when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. Residential and Lifestyle Services Revenues. A substantial portion of our revenue from our independent living and assisted living communities relates to contracts with residents for housing services that are generally short term in nature and initially are subject to ASC Topic 842. As noted earlier, we have concluded that the non-lease components of these agreements are the predominant components of the contracts; therefore, we recognize revenue for these agreements under ASC Topic 606. We also provide our residents and others with lifestyle services at our senior living communities as well as at outpatient rehabilitation clinics located separately from our senior living communities. Our contracts with residents and other customers that are within the scope of ASC Topic 606 are generally short term in nature. We have determined that services performed under those contracts are considered one performance obligation as such services are regarded as a series of distinct events with the same timing and pattern of transfer to the resident or customer. Revenue is recognized for those contracts when our performance obligation is satisfied by transferring control of the service provided to the resident or customer, which are generally when the services are provided over time. Resident fees at our independent living and assisted living communities consist of regular monthly charges for basic housing and support services and fees for additional requested services, such as assisted living services, personalized health services and ancillary services. Fees are specified in our agreements with residents, which are generally short term (30 days to one year), with regular monthly charges billed in advance. Funds received from residents in advance of services provided are not material to our consolidated financial statements. Some of our senior living communities require payment of an upfront entrance fee in advance of a resident moving into the community; substantially all of |
Revenue and Other Operating Inc
Revenue and Other Operating Income | 12 Months Ended |
Dec. 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: Year ended December 31, 2021 Residential Lifestyle Services Total Private payer $ 63,495 $ 1,066 $ 64,561 Medicare and Medicaid programs 1,143 41,596 42,739 Other third-party payer programs — 25,352 25,352 Residential management fees 47,479 (1) — 47,479 Reimbursed community-level costs incurred on behalf of managed communities 722,857 (1) — 722,857 Other reimbursed expenses 31,605 (1) (2) — 31,605 Total revenues $ 866,579 $ 68,014 $ 934,593 _______________________________________ (1) Represents separate revenue sources earned from DHC; see Note 4 for discussion of Segment Information. (2) Includes $13,311 of restructuring expenses reimbursed by DHC for the year ended December 31, 2021. Year ended December 31, 2020 Residential Lifestyle Services Total Private payer $ 75,625 $ 4,520 $ 80,145 Medicare and Medicaid programs 1,390 40,519 41,909 Other third-party payer programs — 36,993 36,993 Residential management fees 62,880 (1) — 62,880 Reimbursed community-level costs incurred on behalf of managed communities 916,167 (1) — 916,167 Other reimbursed expenses 25,648 (1) — 25,648 Total revenues $ 1,081,710 $ 82,032 $ 1,163,742 _______________________________________ (1) Represents separate revenue streams earned from DHC; see Note 4 for discussion of Segment Information. 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 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 $7,795 and $3,435 for the years ended December 31, 2021 and 2020, respectively. See Note 18 for more information. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment InformationWe 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 each communities and clinics gross revenues. At December 31, 2021, we changed the names of our segments to better describe the business and operations of those segments. The segment formerly known as senior living is now called residential and the segment formerly known as rehabilitation and wellness services is now called lifestyle services. There were no changes in the composition of the segments. Results of operations and selected financial information by reportable segment and the reconciliation to the consolidated financial statements are as follows: Year ended December 31, 2021 Residential (1) Lifestyle Services (2) Corporate and Other (3) Total Revenues $ 866,579 $ 68,014 $ — $ 934,593 Other operating income 7,776 19 — 7,795 Operating expenses 831,380 61,227 75,640 968,247 Operating income (loss) 42,975 6,806 (75,640) (25,859) Allocated corporate and other costs (43,781) (3,403) 47,184 — Other income (loss), net (2,360) — (1,295) (3,655) (Loss) income before income taxes and equity in losses of an investee (3,166) 3,403 (29,751) (29,514) Provision for income taxes — — (234) (234) Equity in losses of an investee — — (177) (177) Net (loss) income $ (3,166) $ 3,403 $ (30,162) $ (29,925) _______________________________________ (1) As more fully described in Note 19, the residential segment recognized $13,311 of restructuring expenses related to the Strategic Plan and $13,311 of other reimbursed expenses in the year ended December 31, 2021. (2) As more fully described in Note 19, the lifestyle services segment recognized $1,433 of restructuring expenses related to the Strategic Plan in the year ended December 31, 2021. (3) As more fully described in Note 19, corporate and other recognized $4,452 of restructuring expenses related to the Strategic Plan in the year ended December 31, 2021. Year ended December 31, 2020 Residential Lifestyle Services Corporate and Other Total Revenues $ 1,081,710 $ 82,032 $ — $ 1,163,742 Other operating income 1,715 1,720 — 3,435 Operating expenses 1,018,348 67,321 65,566 1,151,235 Operating income (loss) 65,077 16,431 (65,566) 15,942 Allocated corporate and other costs (57,023) (4,109) 61,132 — Other income (loss), net (288) — (22,580) (22,868) Income (loss) before income taxes 7,766 12,322 (27,014) (6,926) Provision for income taxes — — (663) (663) Net income (loss) $ 7,766 $ 12,322 $ (27,677) $ (7,589) |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net consist of the following: As of December 31, 2021 2020 Land $ 12,155 $ 12,155 Buildings, construction in process and improvements 207,333 202,679 Furniture, fixtures and equipment 62,606 60,713 Property and equipment, at cost 282,094 275,547 Less: accumulated depreciation (122,251) (116,296) Property and equipment, net $ 159,843 $ 159,251 On September 30, 2021, we terminated our lease for the four communities that we leased from PEAK. Under the terms of the termination agreements, we recorded a loss on lease termination of $3,278. Included in the calculation of the loss on lease termination was the derecognition of $1,174 of all property and equipment at the four previously leased communities. The loss was the aggregate of the lease termination fee of $3,100, other obligations of $548, legal transaction costs of $37, and the net derecognition carrying amounts of our right of use asset of $16,055, leasehold improvements and other fixed assets of $1,174, partially offset by the remaining lease obligations of $17,636. See Note 11 for further information on our determination of the loss on termination of the four leased communities. On April 4, 2021, one of the four previously leased communities had a fire that caused extensive damage to the community. As a result, we recorded an impairment on certain furniture, fixtures and equipment and building improvements for the year ended December 31, 2021 of $890, which is recorded in other residential expenses in the statement of operations. Insurance proceeds received for property damages to the previously leased community caused by the fire of $1,500 were subsequently transferred to PEAK. No impairment charges were recorded for the year ended December 31, 2020. We recorded depreciation expense relating to our property and equipment of $10,758 and $10,767 for the years ended December 31, 2021 and 2020, respectively. In relation to the communities previously leased from PEAK, the disposal of fixed assets resulted in a decrease in accumulated depreciation of $4,803. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Significant components of our deferred tax assets and liabilities at December 31, 2021 and 2020, which are included in other long-term assets on our consolidated balance sheets, were as follows: As of December 31, 2021 2020 Non-current deferred tax assets: Insurance reserves $ 2,087 $ 2,661 Tax credits 1,938 1,060 Tax loss carryforwards 39,297 36,838 Depreciable assets 2,377 7,469 Goodwill 2,431 2,536 Right-of-use lease obligation 982 6,242 Other assets 1,698 1,469 Total non-current deferred tax assets before valuation allowance 50,810 58,275 Valuation allowance: (47,926) (46,485) Total non-current deferred tax assets 2,884 11,790 Non-current deferred tax liabilities: Lease expense — (4,381) Right-of-use lease asset (868) (6,180) Other liabilities (1,873) (1,085) Total non-current deferred tax liabilities (2,741) (11,646) Net deferred tax asset $ 143 $ 144 Our federal net operating losses incurred prior to December 31, 2017 will continue to have a 20-year carryforward limitation applied to them and will need to be evaluated for recoverability in the future. Federal net operating losses incurred after December 31, 2017, if any, will have an indefinite life, but their usage will be limited to 80% of taxable income in any given year. The deduction of business interest is limited for any tax year beginning after 2017 to the sum of the taxpayer’s business interest income and 50% of adjusted taxable income. Any disallowed interest generally may be carried forward indefinitely. While we have significant net operating losses, due to a “change of ownership” under IRC Sections 382, Limitation on Net Operating Loss Carryforwards and Certain Built-In Losses Following Ownership Change , and 383, Special Limitations on Certain Excess Credits, as a result of the share issuances on January 1, 2020, further described in Note 10, we have an annual limitation of $445 on the amount of pre-2020 combined federal net operating losses and federal tax credit net operating loss equivalents. As a result, in the year ended December 31, 2020, we determined that a portion of our federal net operating losses and federal tax credits of $88,601 and $18,498, respectively, would lapse before they could be utilized and therefore we wrote off our deferred tax assets for federal net operating losses and federal tax credits by $18,606 and $18,498, respectively, and our corresponding valuation allowance by $37,104. As of December 31, 2021, our federal net operating loss carryforwards, which are scheduled to begin expiring in 2027 if unused, were $120,315, after the reduction of $88,601 in 2020, for net operating losses that will lapse before they can be utilized, due to the change of ownership discussed above. Our deferred tax asset for state net operating losses were $14,031 and our state net operating loss carryforwards, which are scheduled to begin expiring in 2022 if unused, were $278,410. Our federal tax credit carryforwards, which begin expiring in 2026 if unused, were $1,114 after the reduction of $18,498, in 2020, for federal tax credits that will lapse before they can be utilized, also due to the change of ownership. We are subject to U.S. federal income tax, as well as income tax in multiple state and local jurisdictions. As of December 31, 2021, all material state and local income tax matters have been concluded through 2017 and all material federal income tax matters have been concluded through 2014. However, in some jurisdictions (U.S. federal and state), operating losses and tax credits may be subject to adjustment until they are utilized and the year of utilization is closed to adjustment. Management assessed the available positive and negative evidence to estimate if sufficient future taxable income will be generated to realize the existing deferred tax assets. An important piece of objective negative evidence evaluated were the losses we incurred over the three-year period ending December 31, 2021. That objective negative evidence is difficult to overcome and would require a substantial amount of objectively verifiable positive evidence beyond projections of future income to support the realization of our deferred tax assets. Accordingly, on the basis of that assessment, we have recorded a valuation allowance against the majority of our net deferred tax assets as of December 31, 2021 and 2020. In the future, if we believe that we will more likely than not realize the benefit of these deferred tax assets, we will adjust our valuation allowance and recognize an income tax benefit, which may affect our results of operations. The changes in our valuation allowance for deferred tax assets were as follows: Balance at Beginning of Period Amounts Charged to Expense Amounts Charged Off, Net of Recoveries Amounts (Credited) Charged to Equity Balance at End of Period Year Ended December 31, 2020 $ 87,665 $ 584 $ (41,834) $ 70 $ 46,485 Year Ended December 31, 2021 $ 46,485 $ 1,344 $ — $ 97 $ 47,926 For the year ended December 31, 2021, we recognized a provision for income taxes from operations of $234, attributable to state income taxes of $233 that includes a charge to the state valuation allowance of $1. The provision for income taxes from operations is as follows: Years Ended December 31, 2021 2020 Current tax provision (benefit): Federal $ — $ (506) State 233 365 Total current tax provision (benefit) 233 (141) Deferred tax provision: Federal — 277 State 1 527 Total deferred tax provision 1 804 Total tax provision $ 234 $ 663 The principal reasons for the difference between our effective tax rate on operations and the U.S. federal statutory income tax rate are as follows: Years Ended December 31, 2021 2020 Taxes at statutory U.S. federal income tax rate (21.0) % (21.0) % State and local income taxes, net of federal tax benefit 0.3 % 4.5 % Tax credits (2.2) % 259.3 % Change in valuation allowance 17.6 % (581.2) % Deferred taxes 1.9 % — % Federal net operating losses — % 268.6 % State net operating losses 3.5 % 50.2 % Return to provision — % 36.4 % Investments — % (7.8) % Other differences, net 0.7 % 0.6 % Effective tax rate 0.8 % 9.6 % We utilize a two-step process for the measurement of uncertain tax positions that have been taken or are expected to be taken on a tax return. The first step is a determination of whether the tax position should be recognized in the financial statements. The second step determines the measurement of the tax position. As of December 31, 2021 and 2020, there were no uncertain tax positions. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted average number of outstanding common shares during the period. The following table provides a reconciliation of the weighted average number of common shares used in the calculation of basic and diluted net loss per share (in thousands): Years Ended December 31, 2021 2020 Weighted average shares outstanding—basic 31,591 31,471 Effect of dilutive securities: unvested share awards — — Weighted average shares outstanding—diluted (1) 31,591 31,471 _______________________________________ (1) For the years ended December 31, 2021 and 2020, 236 and 110, respectively, 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 | 12 Months Ended |
Dec. 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 December 31, 2021 and 2020, categorized by the level of input used in the valuation of each asset. As of December 31, 2021 Description Total Quoted Prices in Significant Other Significant Cash equivalents (1) $ 26,417 $ 26,417 $ — $ — Investments: Total equity investments (2) 13,033 6,980 6,053 — Total debt investments (3) 10,375 4,612 5,763 — Total investments 23,408 11,592 11,816 — Total $ 49,825 $ 38,009 $ 11,816 $ — As of December 31, 2020 Description Total Quoted Prices in Significant Other Significant Cash equivalents (1) $ 26,291 $ 26,291 $ — $ — Investments: Total equity investments (2) 12,439 6,465 5,974 — Total debt investments (3) 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 consolidated balance sheets as cash and cash equivalents and current and long-term restricted cash and cash equivalents. Cash equivalents include $23,546 and $22,837 of balances that were restricted at December 31, 2021 and December 31, 2020, respectively. In addition to the cash equivalents of $26,417 and $26,291 at December 31, 2021 and December 31, 2020, respectively, reflected above, there were cash balances of $64,116 and $80,898 and restricted cash balances of $2,406 and $2,409 at December 31, 2021 and December 31, 2020, respectively. (2) The fair value of our equity investments is readily determinable. During the years ended December 31, 2021 and 2020, we received gross proceeds of $741 and $3,845, respectively, in connection with the sales of equity investments and recorded gross realized gains totaling $175 and $368, respectively, and gross realized losses totaling $0 and $245, respectively. (3) As of December 31, 2021, our debt investments, which are classified as available for sale, had a fair value of $10,375 with an amortized cost of $10,079; the difference between the fair value and amortized cost amounts resulted from unrealized gains of $296, net of unrealized losses of $10. 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 $6,907 and $8,395 of balances that were restricted as of December 31, 2021 and December 31, 2020, respectively. At December 31, 2021, forty-one debt investments we held, with a fair value of $2,474, 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 December 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 years ended December 31, 2021 and 2020, we received gross proceeds of $4,193 and $6,563, respectively, in connection with the sales of debt investments and recorded gross realized gains totaling $69 and $302, and gross realized losses of $26 and $0, 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 December 31, 2021, by contractual maturity, are shown below. Amortized Cost Fair Value Due in one year or less $ 1,150 $ 1,160 Due after one year through five years 3,863 4,011 Due after five years through ten years 3,929 4,070 Due after ten years 1,137 1,134 Total $ 10,079 $ 10,375 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 years ended December 31, 2021 and 2020, 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 December 31, 2021 and December 31, 2020. The carrying value and fair value of our mortgage notes payable were $6,783 and $7,689, respectively, as of December 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 and property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. On April 4, 2021, one of the four previously leased communities had a fire that caused extensive damage to the community. As a result, we deemed the recorded furniture, fixtures and equipment and building improvements at the community had no net recoverable value. We recorded an impairment equal to their carrying value in the year ended December 31, 2021 of $890, which is recorded in other residential expenses in the statement of operations. See Note 5 for more information regarding fair value measurements related to impairments of our long-lived assets. |
Indebtedness
Indebtedness | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness Our $65,000 Credit Facility was governed by a credit agreement with a syndicate of lenders. The Loan (defined below) that we obtained on January 27, 2022 replaced our Credit Facility, which was scheduled to expire on June 12, 2022. No borrowings were outstanding under the Credit Facility at the time we entered into the Credit Agreement (defined below). Our Credit Facility was available for general business purposes, including acquisitions, and provides for the issuance of letters of credit. We were 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 December 31, 2021, were 2.60% and 4.75%, respectively. We were 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 December 31, 2021 and 2020, we had no borrowings outstanding under our Credit Facility. As of December 31, 2021, we had a letter of credit issued under the Credit Facility in an aggregate amount of $64 which was terminated when we replaced the Credit Facility with the Loan and we had $10,848 available for borrowings under our Credit Facility. We incurred aggregate interest expense related to our Credit Facility of $674 and $1,036 for the years ended December 31, 2021 and 2020, respectively. Our Credit Facility was secured by 11 senior living communities we own with a combined 1,237 living units owned by certain of our subsidiaries that guarantee our obligations under our Credit Facility. Our Credit Facility was also secured by these senior living communities' accounts receivable and related collateral. The amount of available borrowings under our Credit Facility was subject to our having sufficient qualified collateral, which was primarily based on the value and operating performance of the communities securing our obligations under our Credit Facility. Our Credit Facility provided 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. On January 27, 2022, certain of our subsidiaries entered into a credit and security agreement, or the Credit Agreement, with MidCap Funding VIII Trust as administrative agent and a lender, or MidCap. Under the terms of the Credit Agreement, we closed on a $95,000 senior secured term loan, or the Loan, $63,000 of which was funded upon effectiveness of the Credit Agreement, including approximately $3,200 in closing costs. The remaining proceeds include $12,000 for capital improvements and an opportunity for another $20,000 that is available to us upon achieving certain financial thresholds. Certain subsidiaries of the Company are borrowers under the Credit Agreement and the Company and one of its subsidiaries provided a payment guarantee of up to $40,000 of the obligations under the Credit Agreement as well as standard non-recourse carve-outs. The guaranty is evidenced by a Guaranty and Security Agreement, or the Guaranty Agreement, made by the Company and one of its subsidiaries in favor of MidCap. Pursuant to the Guaranty Agreement, the Company's subsidiary granted MidCap a security interest on all of the assets of the subsidiary. The Guaranty Agreement requires the Company and its subsidiary to comply with various covenants, including restricting the Company's ability to make distributions to shareholders. The Loan is secured by real estate mortgages on 14 senior living communities owned by the borrower, the borrowers' assets and certain related collateral. The maturity date of the Loan is January 27, 2025. Subject to the payment of an extension fee and meeting certain other conditions the Company may elect to extend the stated maturity date of the Loan for two one-year periods. We are required to pay interest on outstanding amounts at a base rate of the Secured Overnight Financing Rate, or SOFR, (subject to a minimum base rate of 50 basis points) plus 450 basis points. The Credit Agreement requires interest only payments for the first two years and requires customary mandatory prepayment of the Loan on account of certain events of default. Voluntary prepayments made within 18 months of the effective date of the Loan will be subject to a prepayment fee, but the Loan may thereafter be voluntarily prepaid without premium or penalty. The Company will be required to pay an exit fee upon any prepayment of the Loan, which would be in addition to any prepayment fees that may be payable. The Loan provides for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, including a change of control of the Company, as defined in the Credit Agreement. The Credit Agreement also contains a number of financial and other covenants including covenants that restrict the borrowers' ability to incur indebtedness or to pay or make distributions under certain circumstances and requires the Company to maintain certain financial ratios. The Credit Agreement also contains certain customary representations and warranties and reporting obligations. At December 31, 2021, we had two irrevocable standby letters of credit outstanding, totaling $26,914. One of these letters of credit in the amount of $26,850, which secures our workers' compensation insurance program, is collateralized by approximately $22,899 of cash equivalents and $4,574 of debt and equity investments. This letter of credit expires in June 2022 and is automatically extended for one-year terms unless notice of nonrenewal is provided prior to the end of the applicable term. At December 31, 2021, the cash equivalents collateralizing this letter of credit are classified as short-term restricted cash and cash equivalents in our 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 consolidated balance sheets. The remaining one irrevocable standby letter of credit outstanding at December 31, 2021, totaling $64, which was issued under the Credit Facility, secured certain of our other obligations. This letter of credit was terminated when we replaced the Credit Facility with the Loan on January 27, 2022. At December 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 December 31, 2021: Balance as of Contractual Stated Interest Rate Effective Interest Rate Maturity Date Monthly Payment Lender Type $ 6,986 (1) 6.20% 6.70% September 2032 $ 72 Federal Home Loan Mortgage Corporation _______________________________________ (1) Contractual principal payments excluding unamortized discount of $203. We incurred interest expense, net of discount amortization, of $477 and $502 with respect to the mortgage note for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, the required principal payments due during the next five years and thereafter under the terms of our mortgage note are as follows: Year Principal Payment 2022 $ 440 2023 469 2024 498 2025 531 2026 565 Thereafter 4,483 Total 6,986 Less: Unamortized net discount (203) Total mortgage note payable 6,783 Less: Short-term portion of mortgage note payable 419 Long-term portion of mortgage note payable $ 6,364 We believe we were in compliance with all applicable covenants under our Credit Facility and mortgage note as of December 31, 2021. |
Lease with DHC and Management A
Lease with DHC and Management Agreements with DHC | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Lease with DHC and Management Agreements with DHC | Lease with DHC and Management Agreements with DHC Restructuring our Business Arrangements with DHC . Effective as of January 1, 2020, we restructured our business arrangements with DHC as further described below, and after giving effect to that restructuring, all 244 of the senior living communities owned by DHC that we then operated were pursuant to management agreements. Pursuant to the 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 and a related omnibus agreement; • 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 December 31, 2020, DHC assumed $51,547 of our working capital liabilities as part of the $75,000 it provided to us for the share issuances. We received cash of $23,453 from DHC during the year ended December 31, 2020; and • pursuant to a guaranty agreement dated as of January 1, 2020 and amended and restated on June 9, 2021, 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 management agreements with DHC. We recognized transaction costs of $1,448 related to the 2020 restructuring of our business arrangements with DHC for the year ended December 31, 2020, respectively, which is included in general and administrative expenses in our consolidated statements of operations. 2021 Amendments to our Management Arrangements with DHC. As part of the implementation of the Strategic Plan, on June 9, 2021, we and DHC amended our management arrangements that were then in effect with the Master Management Agreement. See Notes 1 and 19 for additional information on the Strategic Plan. The principal changes to the management arrangements include: • We agreed to cooperate with DHC to transition the operations for 107 senior living communities owned by DHC with approximately 7,400 living units that it then managed to other third party managers and to close one senior living community with approximately 100 living units, 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 was revised: (i) to not commence until 2025; (ii) the maximum number of communities that may be terminated was reduced to 10% (from 20%) of the total managed portfolio by revenue per year; and (iii) to provide that achieving less than 80% (rather than 90%) of budgeted earnings before interest, taxes, and depreciation and amortization, or EBITDA, will be required to qualify as a “Non-Performing Asset” DHC will not be obligated to pay any termination fee to us if it exercises these termination rights; • We will continue to manage for DHC 120 senior living communities we then managed for it; • We closed the 27 skilled nursing units in CCRC communities that we will continue to manage with approximately 1,500 living units and are in the process of repositioning those units; • the incentive fee that we may earn in any calendar year for the senior living communities that we will continue to manage for DHC will no longer be subject to a cap and that any senior living communities that are undergoing a major renovation or repositioning will be excluded from the calculation of the incentive fee and the incentive fee calculation will be reset pursuant to the terms of the management agreements as a result of expected capital projects DHC is planning in the next five years; • RMR LLC assumed oversight of major community renovation or repositioning activities at the senior living communities that we continue to manage for DHC; and • the term of our existing management agreements with DHC was extended by two years to December 31, 2036. We and DHC entered into an amended and restated master management agreement, or the Master Management Agreement, for the senior living communities that we manage for DHC and interim management agreements for the senior living communities that we and DHC agreed to transition to new operators. These agreements replaced our prior management and omnibus agreements with DHC. In addition, we delivered to DHC a related amended and restated guaranty agreement pursuant to which we will continue to guarantee the payment and performance of each of our applicable subsidiary's obligations under the applicable management agreements. Pursuant to the Master Management Agreement, we receive a management fee equal to 5% of the gross revenues realized at the applicable senior living communities plus reimbursement for our direct costs and expenses related to such communities. We also receive 3% of construction costs for construction projects we manage at the senior living communities we managed. Commencing with the 2021 calendar year, we may receive an annual incentive fee equal to 15% of the amount by which the annual earnings before interest, taxes, depreciation and amortization, or EBITDA, of all senior living communities on a combined basis exceeds the target EBITDA for all senior living communities on a combined basis for such calendar year, provided that in no event shall the incentive fee be greater than 1.5% of the gross revenues realized at all senior living communities on a combined basis for such calendar year. The target EBITDA for those communities on a combined basis is increased annually based on the greater of the annual increase of the Consumer Price Index, or CPI, or 2%, plus 6% of any capital investments funded at the managed communities on a combined basis in excess of the target capital investment. Unless otherwise agreed, the target capital investment increases annually based on the greater of the annual increase of CPI or 2%. Any senior living communities that are undergoing a major renovation or repositioning are excluded from the calculation of the incentive fee. The Master Management Agreement expires in 2036, subject to our right to extend for two consecutive five-year terms if we achieve certain performance targets for the combined managed communities portfolio, unless earlier terminated. Pursuant to the Master Management Agreement, beginning in 2025, DHC will have the right to terminate up to 10% of the senior living communities, based on total revenues per year for failure to meet 80% of a target EBITDA for the applicable period. As of December 31, 2021 and 2020, we managed 121 and 228 senior living communities, respectively, for DHC. We earned residential management fees of $43,457 and $59,928 from the senior living communities we managed for DHC for the years ended December 31, 2021 and 2020, respectively. In addition, we earned fees for our management of capital expenditure projects at the communities we managed for DHC of $3,615 and $2,467 for the years ended December 31, 2021 and 2020, respectively. These amounts are included in residential management fees in our consolidated statements of operations. We also provide lifestyle services to residents at some of the senior living communities we manage for DHC, such as rehabilitation and wellness services. At senior living communities we manage for 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 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 $9,177 and $25,687 for the years ended December 31, 2021 and 2020, respectively, for lifestyle services we provided at senior living communities we manage for DHC and that are payable by DHC. These amounts are included in lifestyle services revenues in our consolidated statements of operations. We earned residential management fees of $407 and $485 for the years ended December 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 residential management fees in our consolidated statements of operations. During the year ended December 31, 2020, DHC sold nine 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, DHC also closed seven senior living communities and one building in one senior living community during the year ended December 31, 2020. For the year ended December 31, 2020, we recognized $2,685 of residential management fees related to these sold and closed communities. During the year ended December 31, 2021, we closed 1,532 SNF units and are in the process of repositioning them. We will continue to manage the repositioned units for DHC. For the years ending December 31, 2021 and 2020, we recognized $1,865 and $5,936 of residential management fees related to these closed SNF units, respectively. During the year ended December 31, 2021 we transitioned the management of 107 senior living communities that we managed for DHC with approximately 7,400 living units to new operators. We closed one senior living community with approximately 100 living units that we manage for DHC in February 2022. During the year ended December 31, 2021, we closed all 1,532 SNF units within the 27 CCRC communities that we will reposition and continue to manage for DHC. For the years ended December 31, 2021 and 2020, we recognized $12,693 and $23,378 of residential management fees related to the management of these communities and units, respectively. 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 clinics. We recognized rent expense of $1,487 and $1,561 for the years ended December 31, 2021 and 2020, respectively, with respect to these leases. We previously leased four senior living communities from PEAK. On September 30, 2021, we and PEAK terminated our lease for all four communities that we leased from PEAK. We recognized a $3,278 loss on lease termination for these communities during the year ended December 31, 2021. The loss was the aggregate of the lease termination fee of $3,100, other obligations of $548, legal transaction costs of $37, and the net derecognition carrying amounts of the Company's right of use asset of $16,055, leasehold improvements and other fixed assets of $1,174, partially offset by the remaining lease obligations of $17,636. On March 8, 2021, we had 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 leased 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 lease with PEAK was a "triple net" lease which required 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 consolidated financial statements. The right-of-use asset balance was decreased during the applicable periods for the amount of accrued lease payments, which amounts were not material to our consolidated financial statements. On June 3, 2021, we entered into an operations transfer agreement to assist with the transfer of three of four communities that we leased from PEAK to new operators, subject to regulatory and other approvals. These three communities had 152 living units and had residential revenues of $4,409 and $6,935 and lease expense of $1,622 and $2,156 for the years ended December 31, 2021 and 2020, respectively. On April 4, 2021, one of the communities that we leased from PEAK had a fire that caused extensive damage and the community remained out of service since that date and through our termination of our lease with PEAK. Insurance proceeds received for damage to the community of $1,500 were remitted to PEAK. As of October 1, 2021, the PEAK communities were no longer part of our residential operations. |
Senior Living Communities Lease
Senior Living Communities Leased from PEAK | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Senior Living Communities Leased from PEAK | Lease with DHC and Management Agreements with DHC Restructuring our Business Arrangements with DHC . Effective as of January 1, 2020, we restructured our business arrangements with DHC as further described below, and after giving effect to that restructuring, all 244 of the senior living communities owned by DHC that we then operated were pursuant to management agreements. Pursuant to the 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 and a related omnibus agreement; • 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 December 31, 2020, DHC assumed $51,547 of our working capital liabilities as part of the $75,000 it provided to us for the share issuances. We received cash of $23,453 from DHC during the year ended December 31, 2020; and • pursuant to a guaranty agreement dated as of January 1, 2020 and amended and restated on June 9, 2021, 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 management agreements with DHC. We recognized transaction costs of $1,448 related to the 2020 restructuring of our business arrangements with DHC for the year ended December 31, 2020, respectively, which is included in general and administrative expenses in our consolidated statements of operations. 2021 Amendments to our Management Arrangements with DHC. As part of the implementation of the Strategic Plan, on June 9, 2021, we and DHC amended our management arrangements that were then in effect with the Master Management Agreement. See Notes 1 and 19 for additional information on the Strategic Plan. The principal changes to the management arrangements include: • We agreed to cooperate with DHC to transition the operations for 107 senior living communities owned by DHC with approximately 7,400 living units that it then managed to other third party managers and to close one senior living community with approximately 100 living units, 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 was revised: (i) to not commence until 2025; (ii) the maximum number of communities that may be terminated was reduced to 10% (from 20%) of the total managed portfolio by revenue per year; and (iii) to provide that achieving less than 80% (rather than 90%) of budgeted earnings before interest, taxes, and depreciation and amortization, or EBITDA, will be required to qualify as a “Non-Performing Asset” DHC will not be obligated to pay any termination fee to us if it exercises these termination rights; • We will continue to manage for DHC 120 senior living communities we then managed for it; • We closed the 27 skilled nursing units in CCRC communities that we will continue to manage with approximately 1,500 living units and are in the process of repositioning those units; • the incentive fee that we may earn in any calendar year for the senior living communities that we will continue to manage for DHC will no longer be subject to a cap and that any senior living communities that are undergoing a major renovation or repositioning will be excluded from the calculation of the incentive fee and the incentive fee calculation will be reset pursuant to the terms of the management agreements as a result of expected capital projects DHC is planning in the next five years; • RMR LLC assumed oversight of major community renovation or repositioning activities at the senior living communities that we continue to manage for DHC; and • the term of our existing management agreements with DHC was extended by two years to December 31, 2036. We and DHC entered into an amended and restated master management agreement, or the Master Management Agreement, for the senior living communities that we manage for DHC and interim management agreements for the senior living communities that we and DHC agreed to transition to new operators. These agreements replaced our prior management and omnibus agreements with DHC. In addition, we delivered to DHC a related amended and restated guaranty agreement pursuant to which we will continue to guarantee the payment and performance of each of our applicable subsidiary's obligations under the applicable management agreements. Pursuant to the Master Management Agreement, we receive a management fee equal to 5% of the gross revenues realized at the applicable senior living communities plus reimbursement for our direct costs and expenses related to such communities. We also receive 3% of construction costs for construction projects we manage at the senior living communities we managed. Commencing with the 2021 calendar year, we may receive an annual incentive fee equal to 15% of the amount by which the annual earnings before interest, taxes, depreciation and amortization, or EBITDA, of all senior living communities on a combined basis exceeds the target EBITDA for all senior living communities on a combined basis for such calendar year, provided that in no event shall the incentive fee be greater than 1.5% of the gross revenues realized at all senior living communities on a combined basis for such calendar year. The target EBITDA for those communities on a combined basis is increased annually based on the greater of the annual increase of the Consumer Price Index, or CPI, or 2%, plus 6% of any capital investments funded at the managed communities on a combined basis in excess of the target capital investment. Unless otherwise agreed, the target capital investment increases annually based on the greater of the annual increase of CPI or 2%. Any senior living communities that are undergoing a major renovation or repositioning are excluded from the calculation of the incentive fee. The Master Management Agreement expires in 2036, subject to our right to extend for two consecutive five-year terms if we achieve certain performance targets for the combined managed communities portfolio, unless earlier terminated. Pursuant to the Master Management Agreement, beginning in 2025, DHC will have the right to terminate up to 10% of the senior living communities, based on total revenues per year for failure to meet 80% of a target EBITDA for the applicable period. As of December 31, 2021 and 2020, we managed 121 and 228 senior living communities, respectively, for DHC. We earned residential management fees of $43,457 and $59,928 from the senior living communities we managed for DHC for the years ended December 31, 2021 and 2020, respectively. In addition, we earned fees for our management of capital expenditure projects at the communities we managed for DHC of $3,615 and $2,467 for the years ended December 31, 2021 and 2020, respectively. These amounts are included in residential management fees in our consolidated statements of operations. We also provide lifestyle services to residents at some of the senior living communities we manage for DHC, such as rehabilitation and wellness services. At senior living communities we manage for 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 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 $9,177 and $25,687 for the years ended December 31, 2021 and 2020, respectively, for lifestyle services we provided at senior living communities we manage for DHC and that are payable by DHC. These amounts are included in lifestyle services revenues in our consolidated statements of operations. We earned residential management fees of $407 and $485 for the years ended December 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 residential management fees in our consolidated statements of operations. During the year ended December 31, 2020, DHC sold nine 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, DHC also closed seven senior living communities and one building in one senior living community during the year ended December 31, 2020. For the year ended December 31, 2020, we recognized $2,685 of residential management fees related to these sold and closed communities. During the year ended December 31, 2021, we closed 1,532 SNF units and are in the process of repositioning them. We will continue to manage the repositioned units for DHC. For the years ending December 31, 2021 and 2020, we recognized $1,865 and $5,936 of residential management fees related to these closed SNF units, respectively. During the year ended December 31, 2021 we transitioned the management of 107 senior living communities that we managed for DHC with approximately 7,400 living units to new operators. We closed one senior living community with approximately 100 living units that we manage for DHC in February 2022. During the year ended December 31, 2021, we closed all 1,532 SNF units within the 27 CCRC communities that we will reposition and continue to manage for DHC. For the years ended December 31, 2021 and 2020, we recognized $12,693 and $23,378 of residential management fees related to the management of these communities and units, respectively. 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 clinics. We recognized rent expense of $1,487 and $1,561 for the years ended December 31, 2021 and 2020, respectively, with respect to these leases. We previously leased four senior living communities from PEAK. On September 30, 2021, we and PEAK terminated our lease for all four communities that we leased from PEAK. We recognized a $3,278 loss on lease termination for these communities during the year ended December 31, 2021. The loss was the aggregate of the lease termination fee of $3,100, other obligations of $548, legal transaction costs of $37, and the net derecognition carrying amounts of the Company's right of use asset of $16,055, leasehold improvements and other fixed assets of $1,174, partially offset by the remaining lease obligations of $17,636. On March 8, 2021, we had 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 leased 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 lease with PEAK was a "triple net" lease which required 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 consolidated financial statements. The right-of-use asset balance was decreased during the applicable periods for the amount of accrued lease payments, which amounts were not material to our consolidated financial statements. On June 3, 2021, we entered into an operations transfer agreement to assist with the transfer of three of four communities that we leased from PEAK to new operators, subject to regulatory and other approvals. These three communities had 152 living units and had residential revenues of $4,409 and $6,935 and lease expense of $1,622 and $2,156 for the years ended December 31, 2021 and 2020, respectively. On April 4, 2021, one of the communities that we leased from PEAK had a fire that caused extensive damage and the community remained out of service since that date and through our termination of our lease with PEAK. Insurance proceeds received for damage to the community of $1,500 were remitted to PEAK. As of October 1, 2021, the PEAK communities were no longer part of our residential operations. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity We have common shares available for issuance under the terms of our equity compensation plan adopted in 2014, or the 2014 Plan. We awarded 1,084,600 and 155,150 of our common shares in 2021 and 2020, respectively, to our Directors, officers and others who provide services to us. We valued these shares based upon the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on the dates the awards were made, or $3,639 in 2021, based on a $3.36 weighted average share price and $1,073 in 2020, based on a $6.92 weighted average share price. Shares awarded to Directors vest immediately; one-fifth of the shares awarded to our officers and others (other than our Directors for awards made to them in that capacity) vest on the award date and on the four succeeding anniversaries of the award date. Our unvested common shares totaled 875,248 and 149,638 as of December 31, 2021 and 2020, respectively. Share based compensation expense is recognized ratably over the vesting period and is included in general and administrative expenses in our consolidated statements of operations. We recorded share based compensation expense of $1,484 and $513 for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, the estimated future stock compensation expense for unvested shares was $2,964 based on the award date closing share price for awards to our officers and others and non-employees. The weighted average period over which stock compensation expense will be recorded is approximately 2.5 years. As of December 31, 2021, 1,392,470 of our common shares remain available for issuance under the 2014 Plan. In 2021 and 2020, employees and officers of us or RMR LLC who were recipients of our share awards were permitted to elect to have us withhold the number of their then vesting common shares with a fair market value sufficient to fund the minimum required tax withholding obligations with respect to their vesting share awards in satisfaction of those tax withholding obligations. During 2021 and 2020, we acquired through this share withholding process 70,818 and 7,912, respectively, common shares with an aggregate value of approximately $214 and $60, respectively. On January 1, 2020, in connection with the restructuring of our business arrangements with DHC, we issued 10,268,158 of our common shares to DHC and an aggregate of 16,118,849 of our common shares to DHC’s shareholders of record as of December 13, 2019. As consideration for the share issuances, DHC provided to us $75,000 of additional consideration by assuming certain of our working capital liabilities and through cash payments. See Note 10 for further information on the restructuring of our business arrangements with DHC. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesWe 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. 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 included: (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 Ms. Lefevre's individual and PAGA claims. The settlement was approved by the court, and final judgment on the settlement has been entered. The settlement amount was $3,062, of which $2,400 was allocated to us and $662 was allocated to DHC. The total settlement amount was paid on May 12, 2021. The settlement extinguished the Mandviwala v. Five Star Quality Care, Inc. d/b/a Five Star Quality Care - CA, Inc. and FVE Managers, Inc. lawsuit. We recognized our allocated amount for the settlement as an expense in our consolidated statements of operations during the year ended December 31, 2020. In July 2021, we became aware of a potential issue with respect to completion of a form at one of the SNFs we previously managed for DHC. As a result of this discovery, we have made a voluntary self-disclosure to HHS, OIG, pursuant to the OIG's Provider Self-Disclosure Protocol. We submitted our initial disclosure to the OIG in January 2022 and we have recorded expenses for costs we incurred or expect to incur, including estimated OIG imposed penalties, as a result of this matter totaling $209 to general and administrative expenses in our consolidated statements of operations for the year ending December 31, 2021, all of which is accrued and not paid at December 31, 2021. |
Business Management Agreement w
Business Management Agreement with RMR LLC | 12 Months Ended |
Dec. 31, 2021 | |
Management Agreement [Abstract] | |
Business Management Agreement with RMR LLC | Business Management Agreement with RMR LLC RMR LLC provides business management services to us pursuant to our business management and shared services agreement. These business management services may include, but are not limited to, services related to compliance with various laws and rules applicable to our status as a publicly traded company, maintenance of our senior living communities, evaluation of business opportunities, accounting and financial reporting, capital markets and financing activities, investor relations and general oversight of our daily business activities, including legal matters, human resources, insurance programs and the like. Fees . We pay RMR LLC an annual business management fee equal to 0.6% of our revenues. Revenues are defined as our total revenues from all sources reportable under GAAP, less any revenues reportable by us with respect to communities for which we provide management services plus the gross revenues at those communities determined in accordance with GAAP. Pursuant to our business management agreement with RMR LLC, we recognized business management fees of $6,039 and $8,230 for the years ended December 31, 2021 and 2020, respectively. These amounts are included in general and administrative expenses in our consolidated statements of operations for these periods. Term and Termination. The current term of our business management agreement ends on December 31, 2022 and automatically renews for successive one-year terms unless we or RMR LLC give notice of nonrenewal before the end of an applicable term. RMR LLC may terminate our business management agreement upon 120 days’ written notice, and we may terminate upon 60 days’ written notice, subject to approval by a majority vote of our Independent Directors. If we terminate or elect not to renew our business management agreement other than for cause, as defined, we are obligated to pay RMR LLC a termination fee equal to 2.875 times the sum of the annual base management fee and the annual internal audit services expense, which amounts are based on averages during the 24 consecutive calendar months prior to the date of notice of nonrenewal or termination. Expense Reimbursement . We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR LLC on our behalf. Under our business management agreement, we reimburse RMR LLC for our allocable costs for our internal audit function. Our Audit Committee appoints our Director of Internal Audit and our Compensation Committee approves the costs of our internal audit function. The amounts recognized as expense for internal audit costs were $255 and $281 for the years ended December 31, 2021 and 2020, respectively. These amounts are included in general and administrative expenses in our consolidated statements of operations for these periods. Transition Services. RMR LLC has agreed to provide certain transition services to us for 120 days following an applicable termination by us or notice of termination by RMR LLC. Vendors . Pursuant to our management agreement with RMR LLC, RMR LLC may from time to time negotiate on our behalf with certain third-party vendors and suppliers for the procurement of goods and services to us. As part of this arrangement, we may enter agreements with RMR LLC and other companies to which RMR LLC provides management services for the purpose of obtaining more favorable terms from such vendors and suppliers. |
Related Person Transactions
Related Person Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Related Person Transactions We have relationships and historical and continuing transactions with DHC, RMR LLC, ABP Trust 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, as the sole trustee of ABP Trust, is the controlling shareholder of RMR Inc. and is a managing director and the president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. 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 D. Portnoy serves as the chair of the board and as a managing director or managing trustee of those 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 December 31, 2021, 10,691,658 of our common shares, or 32.7% of our outstanding common shares. We manage for DHC most of the senior living communities we operate. RMR LLC provides management services to both us and DHC and Adam D. Portnoy is the chair of the board of trustees and a managing trustee of DHC. During 2020 and 2021, we and DHC completed restructurings of our business arrangements. We participate in a DHC property insurance program for the senior living communities we own and formerly leased. The premiums we pay for this coverage are allocated pursuant to a formula based on the profiles of the properties included in the program. Our program cost for the policy years ended June 30, 2021 and 2020 were $590 and $500, respectively. Included in accrued expenses and other current liabilities on our consolidated balance sheets at December 31, 2021 and 2020 are $20,345 and $30,090, respectively, that will be or were, as applicable, reimbursed by DHC and are included in due from related person. See Notes 1 and 10 for more information regarding our relationships, agreements and transactions with DHC and certain parties related to it and us. In order to affect DHC’s distribution of our common shares to its shareholders in 2001 and to govern our relationship with DHC thereafter, we entered into agreements with DHC and others, including RMR LLC. Since then, we have entered into various leases, management agreements and other agreements with DHC that include provisions that confirm and modify these undertakings. Among other things, these agreements provide that: • so long as DHC remains a real estate investment trust, or a REIT, we may not waive the share ownership restrictions in our charter that prohibit any person or group from acquiring more than 9.8% (in value or number of shares, whichever is more restrictive) of the outstanding shares of any class of our stock without DHC’s consent ; • so long as we are a tenant of, or manager for, DHC, we will not permit nor take any action that, in the reasonable judgment of DHC, might jeopardize DHC’s qualification for taxation as a REIT; • DHC has the right to terminate our management agreements upon the acquisition by a person or group of more than 9.8% of our voting stock or other change in control events affecting us, as defined therein, including the adoption of any shareholder proposal (other than a precatory proposal) or the election to our Board of any individual, if such proposal or individual was not approved, nominated or appointed, as the case may be, by a majority of our Directors in office immediately prior to the making of such proposal or the nomination or appointment of such individual; and • so long as we are a tenant of, or manager for, DHC or so long as we have a business management agreement with RMR LLC, we will not acquire or finance any real estate of a type then owned or financed by DHC or any other company managed by RMR LLC without first giving DHC or such company managed by RMR LLC, as applicable, the opportunity to acquire or finance that real estate. Our Manager, RMR LLC. We have an agreement with RMR LLC for RMR LLC to provide business management services to us. See Note 14 for more information regarding our management agreement with RMR LLC. Share Awards to RMR LLC Employees . We have historically made share awards to certain RMR LLC employees who are not also Directors, officers or employees of us under our equity compensation plans. During the years ended December 31, 2021 and 2020, we awarded to such persons annual share awards of 164,600 and 21,150, respectively, common shares valued at $512 and $166, in aggregate, respectively, based upon the closing price of our common shares on Nasdaq on the dates the awards were made. Generally, one-fifth of these awards vest on the award date and one-fifth vests on each of the next four anniversaries of the award date. In certain instances, we may accelerate the vesting of an award, such as in connection with the award holder’s retirement as an officer of us or an officer or employee of RMR LLC. These awards to RMR LLC employees are in addition to the share awards to our Managing Directors, as Director compensation, and the fees we paid to RMR LLC. See Note 12 for more information regarding our stock awards and activity as well as certain stock purchases we made in connection with stock award recipients satisfying tax withholding obligations on vesting stock awards. Retirement and Separation Arrangements. In connection with her retirement, on November 22, 2021, we entered into a letter agreement with Margaret Wigglesworth, our former Executive Vice President and Chief Operating Officer. Pursuant to the letter agreement, Ms. Wigglesworth continued to serve as the Executive Vice President and Chief Operating Officer through November 22, 2021, and continued to serve as our employee through December 31, 2021. Pursuant to the letter agreement, we paid Ms. Wigglesworth her current cash salary and benefits through December 31, 2021. In addition, subject to the satisfaction of certain other conditions, we made a cash payment of $404 to Ms. Wigglesworth in January 2022. Adam D. Portnoy and ABP Trust . Adam D. Portnoy and ABP Trust and its subsidiaries owned approximately 2,017,615 of our common shares, representing 6.2% of our outstanding common shares as of December 31, 2021. We are party to a Consent, Standstill, Registration Rights and Lock-Up Agreement, dated October 2, 2016, with Adam D. Portnoy, ABP Trust and certain other related persons, or the ABP Parties, under which, among other things, the ABP Parties have each agreed not to transfer, except for certain permitted transfers as provided for therein, any of our shares of common stock acquired after October 2, 2016, but not including shares issued under our equity compensation plans, for a lock-up period that ends on the earlier of (i) the 10 year anniversary of such agreement, (ii) January 1st of the fourth calendar year after our first taxable year to which no then existing net operating loss or certain other tax benefits may be carried forward by us, but no earlier than January 1, 2022, (iii) the date that we enter into a definitive binding agreement for a transaction that, if consummated, would result in a change of control of us, (iv) the date that our Board otherwise approves and recommends that our shareholders accept a transaction that, if consummated, would result in a change of control of us and (v) the consummation of a change of control of us. Under the Consent, Standstill, Registration Rights and Lock-Up Agreement, the ABP Parties also each agreed, for a period of 10 years, not to engage in certain activities involving us without the approval of our Board, including not to effect or seek to effect any tender or exchange offer, merger, business combination, recapitalization, restructuring, liquidation or other extraordinary transaction involving us, or solicit any proxies to vote any of our voting securities. These provisions do not restrict activities taken by an individual in her or his capacity as a Director, officer or employee of us. We lease our headquarters from a subsidiary of ABP Trust, the controlling shareholder of RMR Inc. See Note 2 for more information on the lease of our headquarters. |
Self-Insurance Reserves
Self-Insurance Reserves | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Self-Insurance Reserves | Self-Insurance Reserves We partially self-insure up to certain limits for workers’ compensation, professional and general liability and automobile insurance programs through an offshore captive insurance company subsidiary. Claims that exceed these limits are reinsured up to contractual limits and reserves for these programs are included in accrued self-insurance obligations in our consolidated balance sheets. We fully self-insure all health-related claims for our covered employees and reserves are included in accrued compensation and benefits in our consolidated balance sheets. As of December 31, 2021 and 2020, we accrued reserves of $73,174 and $78,992, respectively, under these programs, of which $34,744 and $37,420 is classified as long-term liabilities. As of December 31, 2021 and 2020, we recorded $2,686 and $3,809, respectively, of estimated amounts receivable from the reinsurance companies under these programs. At December 31, 2021 our workers' compensation insurance program was secured by an irrevocable standby letter of credit totaling $26,850 and collateralized by approximately $22,899 of cash equivalents and $4,574 of debt and equity investments. See Note 2 for further information on our critical accounting estimates and judgment involved in determining our self-insurance obligations. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Employee 401(k) Plan. We have an employee savings plan, or our 401(k) Plan, under the provisions of Section 401(k) of the IRC. All of our employees are eligible to participate in our 401(k) Plan and are entitled upon termination or retirement to receive their vested portion of our 401(k) Plan assets. We match a certain amount of employee contributions. We also pay certain expenses related to our 401(k) Plan. Our contributions and related expenses for our 401(k) Plan were $529 and $257 for the years ended December 31, 2021 and 2020, respectively, of which $265 and $61, respectively, was recorded to wages and benefits in our consolidated statements of operations and $264 and $196, respectively, was recorded to general and administrative expenses in our consolidated statements of operations. Non-Qualified Deferred Compensation Plan. In May 2018, our Board adopted a non-qualified deferred compensation plan, or our Deferred Compensation Plan, which we began offering to certain of our employees, including our executive officers, in August 2018. Participation in our Deferred Compensation Plan is limited to a group of highly compensated employees holding the position of administrator or director or a position above such levels, which group includes our named executive officers. Our Deferred Compensation Plan is an unfunded and unsecured deferred compensation arrangement. A participant may, on a pre-tax basis, elect to defer base salary and bonus up to the maximum percentages for such deferrals as described in our Deferred Compensation Plan. We may also, at our discretion, match deferrals made under our Deferred Compensation Plan, subject to a vesting schedule. Compensation deferred under our Deferred Compensation Plan was recorded in accrued compensation and benefits in our consolidated balance sheets as of December 31, 2021 and 2020. Expenses related to such deferred compensation were recorded in senior living wages and benefits and general and administrative expenses in our consolidated statements of operations. Compensation deferred under our Deferred Compensation Plan was $465 and $302 as of December 31, 2021 and 2020, respectively, which are included in our accrued compensation and benefits in our consolidated balance sheets. |
COVID- 19 Pandemic
COVID- 19 Pandemic | 12 Months Ended |
Dec. 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 COVID-19, a pandemic, or the Pandemic. The global spread of COVID-19 caused economic disruption worldwide, and although conditions have significantly improved in the United States since the low points experienced, significant uncertainty regarding the Pandemic's ultimate duration, severity and near and long term impacts remain. Governments in affected regions have implemented and may continue to from time-to-time implement, safety precautions, including quarantines, travel restrictions, business closures and other public safety measures. During 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 December 31, 2021 and 2020, $6,082 and $9,701, respectively, of PPE for future use was included in prepaid expenses and other current assets in our consolidated balance sheets, respectively. PPE that is deployed to senior living communities that we manage on behalf of DHC is reimbursable to us by DHC. For the years ended December 31, 2021 and 2020 we deployed $3,278 and $5,132, respectively, of PPE to senior living communities that we manage on behalf of DHC. In response to the Pandemic, the United States enacted the CARES Act 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. 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 Fund 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. We record any funds we receive pursuant to the CARES Act as other operating income. We recognized other operating income of $7,795 and $3,435 for the years ended December 31, 2021 and 2020, respectively, related to funds we received pursuant to the CARES Act, primarily for our senior living communities for which we believe we have met the required terms and conditions to recognize the funds received as income. The below table provides the funds we received and income we recognized for the years ending December 31, 2021 and 2020 by program. December 31, 2021 December 31, 2020 Received Recognized Received Recognized General Distribution Funds Phase 1 $ — $ — $ 1,720 $ 1,720 Phase 2 — — 1,562 1,562 Phase 3 7,724 7,724 — — State Programs 71 71 88 88 Testing Equipment/Test kits — — 65 65 Total $ 7,795 $ 7,795 $ 3,435 $ 3,435 The CARES Act delayed the payment of certain required federal tax deposits for 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 were to be considered timely paid if 50% of the deferred amount was paid by December 31, 2021, and the remainder by December 31, 2022. As of December 31, 2020, we deferred $27,593 of employer payroll taxes, which are included in accrued compensation and benefits in our consolidated balance sheets as of December 31, 2020, of which $22,194 will be reimbursable to us by DHC pursuant to the management agreements and are included in due from related persons in our consolidated balance sheet at December 31, 2020. In September 2021, we paid the deferred amounts and received the amounts due from DHC. 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 lifestyle services segment and the senior living communities we manage in the form of increased rates for services provided and the residential management fees we earn from these communities as a result. Increases in rates are recognized in revenue in the period services are provided. On April 14, 2021, President Biden signed into law legislation that further extended the temporary suspension of the 2% Medicare Sequestration until December 31, 2021. |
Restructuring Expense
Restructuring Expense | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Expense | Restructuring Expense On April 9, 2021, we announced, as part of the Strategic Plan, the repositioning of the Company's residential 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. These transition activities were substantially completed prior to December 31, 2021. During the year ended December 31, 2021, the following actions were taken pursuant to the repositioning phase of the Strategic Plan, we: • DHC amended our management arrangements on June 9, 2021. See Note 10 for additional information regarding the amendments to the management arrangements with DHC, • Closed all 1,532 SNF living units in 27 managed CCRCs, and began collaborating with DHC to reposition these SNF units, • Closed 27 of the 37 planned Ageility inpatient rehabilitation clinics, • Transitioned the management of 107 senior living communities with approximately 7,400 living units to new operators, • Recognized severance and retention costs of $16,191, and • Incurred other costs in connection with the closure of communities and units of $3,005. A summary of the liabilities incurred combined with a reconciliation of the related components of the Strategic Plan restructuring expense recognized in the year ended December 31, 2021, follows, first by cost component and then by segment, the expenses are aggregated and reported in the line item Restructuring expenses in our consolidated statements of operations: Summary of Liabilities and Expenses as of and for the year ended December 31, 2021 (1) Type of Expense: Beginning Balance Expenses Incurred Payments Ending Balance Retention bonuses $ — $ 7,100 $ 6,095 $ 1,005 Severance, benefits and transition expenses — 9,091 7,654 1,437 Transaction expenses — 3,005 2,517 488 Total $ — $ 19,196 $ 16,266 $ 2,930 _______________________________________ (1) No obligations related to the Strategic Plan were incurred in 2020. Accrued bonuses and other compensation are reported in the consolidated balance sheet as part of Accrued compensation and benefits and accrued transaction expenses are reported as part of Accrued expenses and other current liabilities in the consolidated balance sheet. Summary of Liabilities and Expenses as of and for the year ended December 31, 2021 (1) By Segment: Beginning Balance Expenses Incurred Payments Ending Balance Residential $ — $ 13,311 $ 10,770 $ 2,541 Lifestyle Services — 1,433 1,433 — Corporate and Other — 4,452 4,063 389 Total $ — $ 19,196 $ 16,266 $ 2,930 _______________________________________ (1) No obligations related to the Strategic Plan were incurred in 2020. Accrued bonuses and other compensation are reported in the consolidated balance sheet as part of Accrued compensation and benefits and accrued transaction expenses are reported as part of Accrued expenses and other current liabilities in the consolidated balance sheet. In connection with the repositioning of our residential management services, we incurred restructuring obligations, recognized under ASC 420, Exit or Disposal Cost Obligations and ASC 712, Compensation-Nonretirement Postemployment Benefits-special termination benefits of $19,196, approximately $13,311 of which were reimbursed by DHC. These expenses include $7,100 of retention bonus payments, $9,091 of severance, benefits and transition expenses, and $3,005 of transaction expenses. See Notes 1 and 10 for more information on the Strategic Plan and our business arrangements with DHC. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 10, 2022, we entered into the Third Amendment to the lease for our Corporate headquarters. See Note 2 for further information on this lease amendment. On January 25, 2022, we changed our name from Five Star Senior Living Inc. to AlerisLife Inc. On January 27, 2022, we closed on a $95,000 Loan, $63,000 was funded upon effectiveness of the Credit Agreement, including approximately $3,200 in closing costs and we terminated our Credit Facility. See Note 9 for further information on the Term Loan. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation . The accompanying consolidated financial statements include the accounts of AlerisLife Inc, formerly known as Five Star Senior Living Inc., and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Estimates and Assumptions | Estimates and Assumptions. The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires us to make estimates and assumptions that may affect the amounts reported in these consolidated financial statements and related notes. Significant estimates in our 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 consolidated financial statements in the period that they are determined. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. Our financial instruments are limited to cash and cash equivalents, accounts receivable, debt and equity investments, accounts payable and a mortgage note payable. Except for our mortgage note payable, the fair value of these financial instruments was not materially different from their carrying values at December 31, 2021 and 2020. We estimate the fair values of our mortgage note payable using market quotes when available, discounted cash flow analyses and current prevailing interest rates. Our assets recorded at fair value have been categorized based on a fair value hierarchy. We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels. Level 1 - Inputs are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date. Level 2 - Inputs are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments and quoted prices in inactive markets. Level 3 - Inputs are generated from model-based techniques that use significant assumptions that are not observable in the market. |
Segment Information | Segment Information. Operating segments are components of an enterprise that engage in business activities and for which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in determining the allocation of resources and in assessing performance. Our chief operating decision maker is our President and Chief Executive Officer. We operate in two reportable segments: (1) residential (formerly known as senior living) and (2) lifestyle services (formerly known as rehabilitation and wellness services). At December 31, 2021, we changed the name of our segments to better describe the business and operations of those segments. There were no changes in the composition of the segments. In the residential reportable segment, we manage for the account of others and operate for our own account, primarily independent living communities and assisted living communities that are subject to centralized oversight through our Five Star division. In the lifestyle services segment, we primarily provide a comprehensive suite of rehabilitation and wellness services, including physical, occupational, speech and other specialized therapy services, in inpatient and outpatient clinics through our Ageility division. Corporate and other amounts excluded from our reportable segments' performance are separately stated and include amounts related to functional areas such as finance, information technology, legal and human resources. We allocate corporate and other amounts to our residential and lifestyle services segments to assist in determining the allocation of resources and assessing the performance of our segments. Corporate and other allocation amounts are determined by applying an estimated cost rate to the revenues of each division within the reportable segments. Estimated cost rates used to allocate corporate and other amounts vary by division. All of our operations and assets are located in the United States, except for the operations of our captive insurance company subsidiary, which is organized in the Cayman Islands. We do not allocate assets to operating segments and, therefore, no asset information is provided for reportable segments. See Note 4 for more information. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share. We calculate basic net income (loss) per common share, or EPS, by dividing net income (loss) by the weighted average number of common shares outstanding during the year. We calculate diluted EPS using the more dilutive of the two-class method or the treasury stock method. See Note 7 for more information. |
Cash and Cash Equivalents and Restricted Cash and Cash Equivalents | Cash and Cash Equivalents and Restricted Cash and Cash Equivalents. Cash and cash equivalents as of December 31, 2021 and 2020, consisting of short-term, highly liquid investments and money market funds with original maturities of three months or less at the date of purchase, are carried at cost, which approximates market. Certain cash account balances exceed Federal Deposit Insurance Corporation insurance limits of $250 per account and, as a result, there is a concentration of credit risk related to amounts in excess of the insurance limits. We regularly monitor the financial stability of the financial institutions and believe that we are not exposed to any significant credit risk in cash and cash equivalents. |
Concentrations of Credit Risk | Concentrations of Credit Risk. Our financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments and accounts receivable. We have investment policies that, among other things, limit investments to investment-grade securities. We hold our cash and cash equivalents and investments with high-quality financial institutions and we monitor the credit ratings of those institutions. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts. We record accounts receivable net of an allowance for doubtful accounts to represent the Company's estimate of expected losses. The adequacy of the allowance for doubtful accounts is reviewed on an ongoing basis using historical payment trends, write-off experience, analyses of accounts receivable portfolios by payor source and the age of the receivable as well as a review of specific accounts, the terms of the agreements, the residents’ or third party payers’ stated intent to pay, the payers’ financial capacity to pay and other factors. Billings for services under third-party payer programs are recorded net of estimated retroactive adjustments, if any. Retroactive adjustments are accrued on an estimated basis in the period the related services are rendered and adjusted in future periods or as final settlements are determined. Contractual or cost related adjustments from Medicare or Medicaid are accrued when assessed (without regard to when the assessment is paid or withheld). Subsequent adjustments to these accrued amounts are recorded in net revenues when known. |
Equity and Debt Investments | Equity and Debt Investments. Equity investments are carried at fair value with changes in fair value recorded in earnings. At December 31, 2021, these equity investments had a fair value of $13,033 and a net unrealized holding gain of $4,105. At December 31, 2020, these equity investments had a fair value of $12,439 and a net unrealized holding gain of $3,376. Debt investments, which are classified as available for sale, are carried at fair value, with unrealized gains and losses reported as a separate component of shareholders’ equity within accumulated other comprehensive income and “other than temporary impairment” losses recorded through earnings. Realized gains and losses on debt investments are recognized based on specific identification. Restricted debt investments are kept as security for obligations arising from our self-insurance programs. At December 31, 2021, these debt investments had a fair value of $10,375 and a net unrealized holding gain of $296. At December 31, 2020, these debt investments had a fair value of $12,310 and a net unrealized holding gain of $756. In 2021 and 2020, our debt and equity investments generated interest and dividend income of $358 and $757, respectively, which is included in interest, dividend and other income in our consolidated statements of operations. The following table summarizes the fair value and gross unrealized losses related to our debt investments, aggregated by length of time that individual securities have been in a continuous unrealized loss position for the years ended: Debt Investments Less than 12 months Greater than 12 months Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized December 31, 2021 $ 2,474 $ 10 $ — $ — $ 2,474 $ 10 December 31, 2020 $ 291 $ 4 $ — $ — $ 291 $ 4 We routinely evaluate our debt investments to determine if they have been impaired. If the fair value of a debt investment is less than its book or carrying value and we expect that situation to continue for a more than temporary period, we will record an “other than temporary impairment” loss in our consolidated statements of operations. We evaluate the fair value of our debt investments by reviewing each investment’s current market price, the ratings of the investment, the financial condition of the issuer and our intent and ability to retain the investment during temporary market price fluctuations or until maturity. In evaluating the factors described above, we presume a decline in value to be an “other than temporary impairment” if the quoted market price of the investment is below the investment’s cost basis for an extended period, which we typically define as greater than twelve months. However, this presumption may be overcome if there is persuasive evidence indicating the value decline is temporary in nature, such as when the operating performance of the obligor is strong or if the market price of the investment is historically volatile. Additionally, there may be instances in which impairment losses are recognized even if the decline in value does not meet the criteria described above, such as if we plan to sell the investment in the near term and the fair value is below our cost basis. When we believe that a change in fair value of a debt investment is temporary, we record a corresponding credit or charge to other comprehensive income for any unrealized gains and losses. When we determine that impairment in the fair value of a debt investment is an “other than temporary impairment”, we record a charge to earnings. We did not record such an impairment charge for the years ended December 31, 2021 and 2020. |
Deferred Financing Costs | Deferred Financing Costs. We capitalize issuance costs related to our secured revolving credit facility, or our credit facility, and amortize the deferred costs over the term of the agreement governing our credit facility, or our credit agreement. In June 2019, we entered into a new credit agreement to replace our prior credit facility with our $65,000 secured revolving credit facility, or the Credit Facility. See Note 9 for more information on our Credit Facility. |
Property and Equipment | roperty and Equipment. Property and equipment are recorded at cost and depreciated using the straight-line basis over their estimated useful lives, which are typically as follows: Asset Class Estimated Useful Life Buildings 40 Building and land improvements 3-15 Equipment 7 Computer equipment and software 5 Furniture and fixtures 7 Network Development 10 Vehicles 5 |
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. 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. Occasionally, a minimum or best estimate amount may be increased or decreased when events result in a changed expectation. |
Self Insurance | Self-Insurance. We partially self-insure up to certain limits for workers’ compensation, professional and general liability and automobile insurance programs. Claims that exceed these limits are insured up to contractual limits, over which we are self-insured. We fully self-insure all health-related claims for our covered employees. We have established an offshore captive insurance company subsidiary that participates in our workers’ compensation, professional and general liability and automobile insurance programs. Determining reserves for the casualty, liability, workers’ compensation and healthcare losses and costs that we have incurred as of the end of a reporting period involves significant judgments based upon our experience and our expectations of future events, including projected settlements for pending claims, known incidents that we expect may result in claims, estimates of incurred but not yet reported claims, expected changes in premiums for insurance provided by insurers whose policies provide for retroactive adjustments, estimated litigation costs and other factors. Since these reserves are based on estimates, the actual expenses we incur may differ from the amount reserved. We regularly adjust these estimates to reflect changes in the foregoing factors, our actual claims experience, recommendations from our professional consultants, changes in market conditions and other factors; it is possible that such adjustments may be material. |
Lease Accounting | Lease Accounting. At the inception of a contract, we, as lessee, evaluate and determine whether such a contract is or contains a lease based on whether such contract conveys the right to control the use of the identified asset. We apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. We have elected to apply the portfolio approach where possible in assessing our leases and performed an assessment of all our leases. In addition, we have elected the practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component if certain conditions are met. As lessee, we lease senior living communities and our headquarters, and enter into contracts for the use and maintenance of various equipment that contain a lease. We have determined that an equipment lease has met the criteria to be classified as a finance lease. The remaining leases are operating leases. We have determined that our leases for the use and maintenance of equipment and for our Ageility outpatient rehabilitation clinics are short-term leases, except for the equipment lease that is classified as a finance lease. We have made an accounting policy election for our leases, which are determined to be short-term leases, whereby we recognize the lease payments on a straight-line basis over the lease term and variable lease payments in the period in which the obligations for those payments are incurred. Expenses related to these leases are recognized in the consolidated statement of operations in other residential operating expenses, lifestyle services expenses and general and administrative expenses and are not material to our consolidated financial statements. We have determined that our leases for senior living communities, our headquarters and the equipment finance lease are long-term leases. A lessee is required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Accordingly, we have recorded a right-of-use asset and lease liability for all of our long-term leases. We determined that the discount rate implicit in the leases was not readily available, and therefore, we determined our incremental borrowing rate, or IBR, to calculate the right-of-use assets and lease liabilities, except for the equipment finance lease where we used the discount rate implicit in the lease. For purposes of determining the lease term, we concluded that it is not reasonably certain that our lease extensions will be exercised and, therefore, we included payments required to be made under the committed lease term in calculating the right-of-use assets and lease liabilities. In the consolidated statement of operations, expenses related to the leases for senior living communities are recognized in other senior living operating expenses, expenses related to our headquarters are recorded in general and administrative expenses and expenses related to our equipment finance lease are recognized in depreciation and amortization and interest and other expense. There were no variable lease payments in 2021 and 2020. Our leases have remaining lease terms of up to ten years. Our lease terms may include options to extend or terminate the lease. The options are included in the lease term when it is determined that it is reasonably certain the option will be exercised. The Company recorded right-of-use assets and lease liabilities, which are presented on the Consolidated Balance Sheet. At December 31, 2021, the weighted average remaining lease term was approximately eight years with a weighted average discount rate of 4.9%. The following table presents supplemental information related to operating and finance leases: Lease No. Number of Properties Remaining Renewal Options Right-of-Use Asset Future Minimum Rents IBR (1) Lease Liability 2022 2023 2024 2025 There after Total Headquarters lease (December 31, 2031) (2) 1 N/A $ 9,197 $ 1,046 $ 1,087 $ 1,128 $ 1,169 $ 7,858 $ 12,288 3.88% $ 10,065 Equipment lease N/A 5 year renewal option 3,467 1,140 1,140 1,140 1,140 — 4,560 7.60% 3,922 Total $ 12,664 $ 2,186 $ 2,227 $ 2,268 $ 2,309 $ 7,858 $ 16,848 4.90% $ 13,987 _______________________________________ (1) For the equipment lease, this represents the discount rate. (2) On January 10, 2022, we entered into a third amendment which reduced our headquarters leased space from approximately 41,000 square feet to approximately 30,000 square feet. Operating lease expenses consist of monthly rent costs, certain utilities and real estate taxes. For the years ended December 31, 2021 and 2020, we recognized $2,041 and $2,762 of operating lease expenses in other residential operating expenses, $2,431 and $2,356 in lifestyle services expenses and $2,082 and $1,760 in general and administrative expenses within our consolidated statements of operations, respectively. For the years ended December 31, 2021 and 2020, we recognized finance lease expenses of $1,256 and $323, consisting of amortization of the right-of-use asset of $924 and $230 and interest expense on the lease liability of $332 and $93, respectively, which are recorded in our consolidated statements of operations in depreciation and amortization and interest and other expenses, respectively. ASC Topic 842, Leases, or ASC Topic 842, provides lessors with a practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component if certain conditions are met. In addition, ASC Topic 842 clarifies which ASC Topic (ASC Topic 842 or FASB ASC Topic 606, Revenue from Contracts with Customers , or ASC Topic 606) applies for the combined component. Specifically, if the non-lease components associated with the lease component are the predominant component of the combined components, the lessor should account for the combined component in accordance with ASC Topic 606. Otherwise, the lessor should account for the combined component as an operating lease. We have elected this practical expedient and recognized revenue under our resident agreements at our independent living and assisted living communities based upon the predominant component rather than allocating the consideration and separately accounting for it under ASC Topic 842 and ASC Topic 606. We have concluded that the non-lease components of the agreements with respect to our independent and assisted living communities are the predominant component of the leases and, therefore, we recognize revenue for these agreements under ASC Topic 606. |
Lease Accounting | Lease Accounting. At the inception of a contract, we, as lessee, evaluate and determine whether such a contract is or contains a lease based on whether such contract conveys the right to control the use of the identified asset. We apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. We have elected to apply the portfolio approach where possible in assessing our leases and performed an assessment of all our leases. In addition, we have elected the practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component if certain conditions are met. As lessee, we lease senior living communities and our headquarters, and enter into contracts for the use and maintenance of various equipment that contain a lease. We have determined that an equipment lease has met the criteria to be classified as a finance lease. The remaining leases are operating leases. We have determined that our leases for the use and maintenance of equipment and for our Ageility outpatient rehabilitation clinics are short-term leases, except for the equipment lease that is classified as a finance lease. We have made an accounting policy election for our leases, which are determined to be short-term leases, whereby we recognize the lease payments on a straight-line basis over the lease term and variable lease payments in the period in which the obligations for those payments are incurred. Expenses related to these leases are recognized in the consolidated statement of operations in other residential operating expenses, lifestyle services expenses and general and administrative expenses and are not material to our consolidated financial statements. We have determined that our leases for senior living communities, our headquarters and the equipment finance lease are long-term leases. A lessee is required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Accordingly, we have recorded a right-of-use asset and lease liability for all of our long-term leases. We determined that the discount rate implicit in the leases was not readily available, and therefore, we determined our incremental borrowing rate, or IBR, to calculate the right-of-use assets and lease liabilities, except for the equipment finance lease where we used the discount rate implicit in the lease. For purposes of determining the lease term, we concluded that it is not reasonably certain that our lease extensions will be exercised and, therefore, we included payments required to be made under the committed lease term in calculating the right-of-use assets and lease liabilities. In the consolidated statement of operations, expenses related to the leases for senior living communities are recognized in other senior living operating expenses, expenses related to our headquarters are recorded in general and administrative expenses and expenses related to our equipment finance lease are recognized in depreciation and amortization and interest and other expense. There were no variable lease payments in 2021 and 2020. Our leases have remaining lease terms of up to ten years. Our lease terms may include options to extend or terminate the lease. The options are included in the lease term when it is determined that it is reasonably certain the option will be exercised. The Company recorded right-of-use assets and lease liabilities, which are presented on the Consolidated Balance Sheet. At December 31, 2021, the weighted average remaining lease term was approximately eight years with a weighted average discount rate of 4.9%. The following table presents supplemental information related to operating and finance leases: Lease No. Number of Properties Remaining Renewal Options Right-of-Use Asset Future Minimum Rents IBR (1) Lease Liability 2022 2023 2024 2025 There after Total Headquarters lease (December 31, 2031) (2) 1 N/A $ 9,197 $ 1,046 $ 1,087 $ 1,128 $ 1,169 $ 7,858 $ 12,288 3.88% $ 10,065 Equipment lease N/A 5 year renewal option 3,467 1,140 1,140 1,140 1,140 — 4,560 7.60% 3,922 Total $ 12,664 $ 2,186 $ 2,227 $ 2,268 $ 2,309 $ 7,858 $ 16,848 4.90% $ 13,987 _______________________________________ (1) For the equipment lease, this represents the discount rate. (2) On January 10, 2022, we entered into a third amendment which reduced our headquarters leased space from approximately 41,000 square feet to approximately 30,000 square feet. Operating lease expenses consist of monthly rent costs, certain utilities and real estate taxes. For the years ended December 31, 2021 and 2020, we recognized $2,041 and $2,762 of operating lease expenses in other residential operating expenses, $2,431 and $2,356 in lifestyle services expenses and $2,082 and $1,760 in general and administrative expenses within our consolidated statements of operations, respectively. For the years ended December 31, 2021 and 2020, we recognized finance lease expenses of $1,256 and $323, consisting of amortization of the right-of-use asset of $924 and $230 and interest expense on the lease liability of $332 and $93, respectively, which are recorded in our consolidated statements of operations in depreciation and amortization and interest and other expenses, respectively. ASC Topic 842, Leases, or ASC Topic 842, provides lessors with a practical expedient, by class of underlying asset, not to separate non-lease components from the associated lease component if certain conditions are met. In addition, ASC Topic 842 clarifies which ASC Topic (ASC Topic 842 or FASB ASC Topic 606, Revenue from Contracts with Customers , or ASC Topic 606) applies for the combined component. Specifically, if the non-lease components associated with the lease component are the predominant component of the combined components, the lessor should account for the combined component in accordance with ASC Topic 606. Otherwise, the lessor should account for the combined component as an operating lease. We have elected this practical expedient and recognized revenue under our resident agreements at our independent living and assisted living communities based upon the predominant component rather than allocating the consideration and separately accounting for it under ASC Topic 842 and ASC Topic 606. We have concluded that the non-lease components of the agreements with respect to our independent and assisted living communities are the predominant component of the leases and, therefore, we recognize revenue for these agreements under ASC Topic 606. |
Stock-Based Compensation | Stock-Based Compensation. We have a stock-based compensation plan under which we grant equity-based awards. We measure the compensation cost of award recipients’ services received in exchange for an award of equity instruments based on the grant date fair value of the underlying award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award. The impact of forfeitures are recognized as they occur. |
Income Taxes | Income Taxes. Our income tax expense includes U.S. income taxes. Certain items of income and expense are not reported in tax returns and financial statements in the same year. We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences to be included in our financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse, while the effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We can recognize a tax benefit only if it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that has a greater than 50% likelihood of being realized. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent, we believe that we are more likely than not that all or a portion of deferred tax assets will not be realized, we establish a valuation allowance to reduce the deferred tax assets to the appropriate valuation. To the extent we establish a valuation allowance or increase or decrease this allowance in a given period, we include the related tax expense or tax benefit within the tax provision in the consolidated statement of operations in that period. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. In the future, if we determine that we would be able to realize our deferred tax assets in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance and record an income tax benefit within the tax provision in the consolidated statement of operations in that period. We pay franchise taxes in certain states in which we have operations. We have included franchise taxes in general and administrative in our consolidated statements of operations. |
Revenue Recognition | Revenue Recognition. We recognize revenue from contracts with customers using the practical expedient that allows for the use of a portfolio approach, because we have determined that the effect of applying the guidance to our portfolios of contracts on our consolidated financial statements would not differ materially from applying the guidance to each individual contract within the respective portfolio or our performance obligations within such portfolio. The five-step model requires us to: (i) identify our contracts with customers; (ii) identify our performance obligations under those contracts; (iii) determine the transaction prices of those contracts; (iv) allocate the transaction prices to our performance obligations in those contracts; and (v) recognize revenue when each performance obligation under those contracts is satisfied. Revenue recognition occurs when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. Residential and Lifestyle Services Revenues. A substantial portion of our revenue from our independent living and assisted living communities relates to contracts with residents for housing services that are generally short term in nature and initially are subject to ASC Topic 842. As noted earlier, we have concluded that the non-lease components of these agreements are the predominant components of the contracts; therefore, we recognize revenue for these agreements under ASC Topic 606. We also provide our residents and others with lifestyle services at our senior living communities as well as at outpatient rehabilitation clinics located separately from our senior living communities. Our contracts with residents and other customers that are within the scope of ASC Topic 606 are generally short term in nature. We have determined that services performed under those contracts are considered one performance obligation as such services are regarded as a series of distinct events with the same timing and pattern of transfer to the resident or customer. Revenue is recognized for those contracts when our performance obligation is satisfied by transferring control of the service provided to the resident or customer, which are generally when the services are provided over time. Resident fees at our independent living and assisted living communities consist of regular monthly charges for basic housing and support services and fees for additional requested services, such as assisted living services, personalized health services and ancillary services. Fees are specified in our agreements with residents, which are generally short term (30 days to one year), with regular monthly charges billed in advance. Funds received from residents in advance of services provided are not material to our consolidated financial statements. Some of our senior living communities require payment of an upfront entrance fee in advance of a resident moving into the community; substantially all of these community fees are non-refundable and are initially recorded as deferred revenue and included in accrued expenses and other current liabilities in our consolidated balance sheets. These deferred amounts are then amortized on a straight-line basis into revenue over the term of the resident's agreement. When the resident no longer resides within our community, the remaining deferred non-refundable fees are recognized in revenue. Revenue recorded and deferred in connection with community fees is not material to our consolidated financial statements. Revenue for basic housing and support services and additional requested services is recognized in accordance with ASC Topic 606 and measured based on the consideration specified in the resident agreement and is recorded when the services are provided. In our SNFs and certain of our independent and assisted living communities where we provide SNF services, we are paid fixed daily rates from governmental and contracted third party payers, and we charge a predetermined fixed daily rate for private pay residents. These fixed daily rates and certain other fees are billed monthly in arrears. Although there are complex regulatory compliance rules governing fixed daily rates, we have no episodic payments or capitation arrangements. We currently use the “most likely amount” technique to estimate revenue, although rates are generally known and considered fixed prior to services being performed, whether included in the resident agreement or contracted with governmental or third party payers. Rate adjustments from Medicare or Medicaid are recorded when known (without regard to when the assessment is paid or withheld), and subsequent adjustments to these amounts are recorded in revenues when known. Billings under certain of these programs are subject to audit and possible retroactive adjustment, and related revenue is recorded at the amount we ultimately expect to receive, which is inclusive of the estimated retroactive adjustments or refunds, if any, under reimbursement programs. Retroactive adjustments are recorded on an estimated basis in the period the related services are rendered and adjusted in future periods or as final settlements are determined. Revenue is recognized when performance obligations are satisfied by transferring control of the service provided to the resident, which is generally when services are provided over the duration of care. Lifestyle services revenues at our Ageility rehabilitation clinics consist of charges for clinically-based rehabilitation services, including physical therapy, speech therapy and occupational therapy, as well as other service-based programs and therapies. Revenue for these services is recognized in accordance with ASC Topic 606 and is recorded when the services are provided. Residential Management Fees and Reimbursed Community-Level Costs Incurred on Behalf of Managed Communities. We manage senior living communities for the account of DHC pursuant to long-term management agreements which provide for periodic management fee payments to us and reimbursement for our direct costs and expenses related to support such communities. Although there are various management and operational activities performed by us under the management agreements, we have determined that all community operations and management activities constitute a single performance obligation, which is satisfied over time as the services are rendered. We earn residential management fees equal to 5% of gross revenues realized and 3% of construction costs for construction projects we manage at the senior living communities we manage. We recognize residential management fees in the same period that we provide the management services to DHC. Our estimate of the transaction price for management services also includes the amount of reimbursement due from the owners of the communities for services provided and related costs incurred. Commencing with the 2021 calendar year, we may also earn incentive fees from DHC under the management agreements, which are payable in cash and are contingent, performance-based fees recognized only when earned at the end of each respective measurement period. Incentive management fees are excluded from the transaction price until it becomes probable that there will not be a significant reversal of cumulative revenue recognized. The incentive fee is equal to 15% of the amount by which the annual earnings before interest, taxes, depreciation and amortization, or EBITDA, of all the managed communities on a combined basis exceeds target EBITDA for those communities on a combined basis for such calendar year, provided that in no event shall the incentive fee be greater than 1.5% of the gross revenues realized at all the managed communities on a combined basis for such calendar year. The target EBITDA for those communities on a combined basis is increased annually based on the greater of the annual increase of the Consumer Price Index, or CPI, or 2%, plus 6% of any capital investments funded at the managed communities on a combined basis in excess of target amounts. Unless otherwise agreed, the target capital investment increases annually based on the greater of the annual increase of CPI or 2%. As part of the Strategic Plan, we amended our management arrangement with DHC. The incentive fee that we may earn in any calendar year for the senior living communities that we will continue to manage for DHC will no longer be subject to a cap and any senior living communities that are undergoing a major renovation or repositioning will be excluded from the calculation of the incentive fee and the incentive fee will be reset pursuant to the terms of the management agreements as a result of expected capital projects DHC is planning in the next five years. For more information regarding the 2021 amendments to our management agreements with DHC, see "Properties" included in Part I, Item 2, of this Annual Report on Form 10-K and Note 10 to our Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K. ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , clarifies how an entity should identify the unit of accounting for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions. Where we are the primary obligor and, therefore, control the transfer of the goods and services with respect to any such operating expenses incurred in connection with the management of these communities, we recognize revenue when the goods have been delivered or the service has been rendered and we are due to be reimbursed from DHC pursuant to the management agreements. Such revenue is included in reimbursed community-level costs incurred on behalf of managed communities in our consolidated statements of operations. The related costs are included in community-level costs incurred on behalf of managed communities in our consolidated statements of operations. Amounts due from DHC related to residential management fees and reimbursed community-level costs incurred on behalf of managed communities are included in due from related person in our consolidated balance sheets. Other reimbursed expenses. Other reimbursed expenses include reimbursements that arise from certain centralized services we provide pursuant to our management agreements, a significant portion of which are charged or passed through to and are paid by our customers. We have determined that we control the services provided by third parties for our customers and, therefore, we account for the cost of these services and the related reimbursement revenue on a gross basis. We recognized revenue from other reimbursed expenses of $31,605 and $25,648 for the years ended December 31, 2021 and December 31, 2020, respectively. Government grants. We recognize income from government grants on a systematic and rational basis over the period in which we recognize the related expenses or loss of revenues for which the grants are intended to compensate when there is reasonable assurance that we will comply with the applicable terms and conditions of the grant and there is reasonable assurance that the grant will be received. Accounting for Costs Associated with Exit or Disposal Activities. A liability for costs associated with exit or disposal activities other than in a business combination, is recognized when the liability is incurred. The liability, recognized under Accounting Standards Codification, or ASC, 420, Exit or Disposal Cost Obligations and ASC 712, Compensation — Nonretirement Postemployment - special termination benefits , is measured at fair value, with adjustments for changes in estimated cash flows recognized in earnings. During the year ended December 31, 2021, costs were incurred related to the Strategic Plan. See Note 19 for summary of restructuring expenses and the corresponding liability. |
Reclassifications | Reclassifications. We have made reclassifications to the financial statements of the prior years to conform to the current year’s presentation. These reclassifications had no effect on net loss or shareholders’ equity. 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. |
Recently Adopted Accounting Pronouncements and Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements . On December 31, 2021, we adopted 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 measurement at the modification date or reassessment of a previous accounting determination. The adoption of this ASU did not have a material impact on our consolidated financial statements. On December 31, 2021, we adopted ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance , which requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The adoption of this ASU did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) , which requires a financial asset or a group of financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This ASU eliminates the probable initial recognition threshold and instead requires reflection of an entity’s current estimate of all expected credit losses. In addition, this ASU amends the current 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 consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of restricted cash | Our restricted cash and cash equivalents consist of the following: As of December 31, 2021 2020 Current Long-Term Current Long-Term Workers’ compensation letter of credit collateral $ 22,899 $ — $ 21,561 $ — Insurance reserves and other restricted amounts 356 982 644 1,369 Health deposit-imprest cash 1,103 — 1,103 — Real estate taxes and certain capital expenditures as required by our mortgage 612 — 569 — Total $ 24,970 $ 982 $ 23,877 $ 1,369 |
Schedule of allowance for doubtful accounts roll forward | Our allowance for doubtful accounts consists of the following: Allowance for Doubtful Accounts Balance at Beginning of Period Provision for Doubtful Accounts Recoveries Write-offs Balance at End of Period December 31, 2020 $ 4,664 $ 1,450 $ 156 $ (3,121) $ 3,149 December 31, 2021 $ 3,149 $ 2,089 $ 323 $ (2,711) $ 2,850 |
Schedule of fair value and gross unrealized losses related to available for sale securities | The following table summarizes the fair value and gross unrealized losses related to our debt investments, aggregated by length of time that individual securities have been in a continuous unrealized loss position for the years ended: Debt Investments Less than 12 months Greater than 12 months Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized December 31, 2021 $ 2,474 $ 10 $ — $ — $ 2,474 $ 10 December 31, 2020 $ 291 $ 4 $ — $ — $ 291 $ 4 |
Schedule of property and equipment estimated useful lives | Property and equipment are recorded at cost and depreciated using the straight-line basis over their estimated useful lives, which are typically as follows: Asset Class Estimated Useful Life Buildings 40 Building and land improvements 3-15 Equipment 7 Computer equipment and software 5 Furniture and fixtures 7 Network Development 10 Vehicles 5 Property and equipment, net consist of the following: As of December 31, 2021 2020 Land $ 12,155 $ 12,155 Buildings, construction in process and improvements 207,333 202,679 Furniture, fixtures and equipment 62,606 60,713 Property and equipment, at cost 282,094 275,547 Less: accumulated depreciation (122,251) (116,296) Property and equipment, net $ 159,843 $ 159,251 |
Finance Lease, liability, fiscal year maturity | The following table presents supplemental information related to operating and finance leases: Lease No. Number of Properties Remaining Renewal Options Right-of-Use Asset Future Minimum Rents IBR (1) Lease Liability 2022 2023 2024 2025 There after Total Headquarters lease (December 31, 2031) (2) 1 N/A $ 9,197 $ 1,046 $ 1,087 $ 1,128 $ 1,169 $ 7,858 $ 12,288 3.88% $ 10,065 Equipment lease N/A 5 year renewal option 3,467 1,140 1,140 1,140 1,140 — 4,560 7.60% 3,922 Total $ 12,664 $ 2,186 $ 2,227 $ 2,268 $ 2,309 $ 7,858 $ 16,848 4.90% $ 13,987 _______________________________________ (1) For the equipment lease, this represents the discount rate. (2) On January 10, 2022, we entered into a third amendment which reduced our headquarters leased space from approximately 41,000 square feet to approximately 30,000 square feet. |
Lessee, operating lease, liability, maturity | The following table presents supplemental information related to operating and finance leases: Lease No. Number of Properties Remaining Renewal Options Right-of-Use Asset Future Minimum Rents IBR (1) Lease Liability 2022 2023 2024 2025 There after Total Headquarters lease (December 31, 2031) (2) 1 N/A $ 9,197 $ 1,046 $ 1,087 $ 1,128 $ 1,169 $ 7,858 $ 12,288 3.88% $ 10,065 Equipment lease N/A 5 year renewal option 3,467 1,140 1,140 1,140 1,140 — 4,560 7.60% 3,922 Total $ 12,664 $ 2,186 $ 2,227 $ 2,268 $ 2,309 $ 7,858 $ 16,848 4.90% $ 13,987 _______________________________________ (1) For the equipment lease, this represents the discount rate. (2) On January 10, 2022, we entered into a third amendment which reduced our headquarters leased space from approximately 41,000 square feet to approximately 30,000 square feet. |
Revenue from Contract with Cust
Revenue from Contract with Customer (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
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: Year ended December 31, 2021 Residential Lifestyle Services Total Private payer $ 63,495 $ 1,066 $ 64,561 Medicare and Medicaid programs 1,143 41,596 42,739 Other third-party payer programs — 25,352 25,352 Residential management fees 47,479 (1) — 47,479 Reimbursed community-level costs incurred on behalf of managed communities 722,857 (1) — 722,857 Other reimbursed expenses 31,605 (1) (2) — 31,605 Total revenues $ 866,579 $ 68,014 $ 934,593 _______________________________________ (1) Represents separate revenue sources earned from DHC; see Note 4 for discussion of Segment Information. (2) Includes $13,311 of restructuring expenses reimbursed by DHC for the year ended December 31, 2021. Year ended December 31, 2020 Residential Lifestyle Services Total Private payer $ 75,625 $ 4,520 $ 80,145 Medicare and Medicaid programs 1,390 40,519 41,909 Other third-party payer programs — 36,993 36,993 Residential management fees 62,880 (1) — 62,880 Reimbursed community-level costs incurred on behalf of managed communities 916,167 (1) — 916,167 Other reimbursed expenses 25,648 (1) — 25,648 Total revenues $ 1,081,710 $ 82,032 $ 1,163,742 _______________________________________ (1) Represents separate revenue streams earned from DHC; see Note 4 for discussion of Segment Information. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of segment information | Results of operations and selected financial information by reportable segment and the reconciliation to the consolidated financial statements are as follows: Year ended December 31, 2021 Residential (1) Lifestyle Services (2) Corporate and Other (3) Total Revenues $ 866,579 $ 68,014 $ — $ 934,593 Other operating income 7,776 19 — 7,795 Operating expenses 831,380 61,227 75,640 968,247 Operating income (loss) 42,975 6,806 (75,640) (25,859) Allocated corporate and other costs (43,781) (3,403) 47,184 — Other income (loss), net (2,360) — (1,295) (3,655) (Loss) income before income taxes and equity in losses of an investee (3,166) 3,403 (29,751) (29,514) Provision for income taxes — — (234) (234) Equity in losses of an investee — — (177) (177) Net (loss) income $ (3,166) $ 3,403 $ (30,162) $ (29,925) _______________________________________ (1) As more fully described in Note 19, the residential segment recognized $13,311 of restructuring expenses related to the Strategic Plan and $13,311 of other reimbursed expenses in the year ended December 31, 2021. (2) As more fully described in Note 19, the lifestyle services segment recognized $1,433 of restructuring expenses related to the Strategic Plan in the year ended December 31, 2021. (3) As more fully described in Note 19, corporate and other recognized $4,452 of restructuring expenses related to the Strategic Plan in the year ended December 31, 2021. Year ended December 31, 2020 Residential Lifestyle Services Corporate and Other Total Revenues $ 1,081,710 $ 82,032 $ — $ 1,163,742 Other operating income 1,715 1,720 — 3,435 Operating expenses 1,018,348 67,321 65,566 1,151,235 Operating income (loss) 65,077 16,431 (65,566) 15,942 Allocated corporate and other costs (57,023) (4,109) 61,132 — Other income (loss), net (288) — (22,580) (22,868) Income (loss) before income taxes 7,766 12,322 (27,014) (6,926) Provision for income taxes — — (663) (663) Net income (loss) $ 7,766 $ 12,322 $ (27,677) $ (7,589) |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment are recorded at cost and depreciated using the straight-line basis over their estimated useful lives, which are typically as follows: Asset Class Estimated Useful Life Buildings 40 Building and land improvements 3-15 Equipment 7 Computer equipment and software 5 Furniture and fixtures 7 Network Development 10 Vehicles 5 Property and equipment, net consist of the following: As of December 31, 2021 2020 Land $ 12,155 $ 12,155 Buildings, construction in process and improvements 207,333 202,679 Furniture, fixtures and equipment 62,606 60,713 Property and equipment, at cost 282,094 275,547 Less: accumulated depreciation (122,251) (116,296) Property and equipment, net $ 159,843 $ 159,251 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets and liabilities | Significant components of our deferred tax assets and liabilities at December 31, 2021 and 2020, which are included in other long-term assets on our consolidated balance sheets, were as follows: As of December 31, 2021 2020 Non-current deferred tax assets: Insurance reserves $ 2,087 $ 2,661 Tax credits 1,938 1,060 Tax loss carryforwards 39,297 36,838 Depreciable assets 2,377 7,469 Goodwill 2,431 2,536 Right-of-use lease obligation 982 6,242 Other assets 1,698 1,469 Total non-current deferred tax assets before valuation allowance 50,810 58,275 Valuation allowance: (47,926) (46,485) Total non-current deferred tax assets 2,884 11,790 Non-current deferred tax liabilities: Lease expense — (4,381) Right-of-use lease asset (868) (6,180) Other liabilities (1,873) (1,085) Total non-current deferred tax liabilities (2,741) (11,646) Net deferred tax asset $ 143 $ 144 |
Schedule of changes in valuation allowance for deferred tax assets | The changes in our valuation allowance for deferred tax assets were as follows: Balance at Beginning of Period Amounts Charged to Expense Amounts Charged Off, Net of Recoveries Amounts (Credited) Charged to Equity Balance at End of Period Year Ended December 31, 2020 $ 87,665 $ 584 $ (41,834) $ 70 $ 46,485 Year Ended December 31, 2021 $ 46,485 $ 1,344 $ — $ 97 $ 47,926 |
Schedule of provision for income taxes from continuing operations | The provision for income taxes from operations is as follows: Years Ended December 31, 2021 2020 Current tax provision (benefit): Federal $ — $ (506) State 233 365 Total current tax provision (benefit) 233 (141) Deferred tax provision: Federal — 277 State 1 527 Total deferred tax provision 1 804 Total tax provision $ 234 $ 663 |
Schedule of difference between effective tax rate on continuing operations and the U.S. Federal statutory income tax rate | The principal reasons for the difference between our effective tax rate on operations and the U.S. federal statutory income tax rate are as follows: Years Ended December 31, 2021 2020 Taxes at statutory U.S. federal income tax rate (21.0) % (21.0) % State and local income taxes, net of federal tax benefit 0.3 % 4.5 % Tax credits (2.2) % 259.3 % Change in valuation allowance 17.6 % (581.2) % Deferred taxes 1.9 % — % Federal net operating losses — % 268.6 % State net operating losses 3.5 % 50.2 % Return to provision — % 36.4 % Investments — % (7.8) % Other differences, net 0.7 % 0.6 % Effective tax rate 0.8 % 9.6 % |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 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 loss per share (in thousands): Years Ended December 31, 2021 2020 Weighted average shares outstanding—basic 31,591 31,471 Effect of dilutive securities: unvested share awards — — Weighted average shares outstanding—diluted (1) 31,591 31,471 _______________________________________ |
Fair Values of Assets and Lia_2
Fair Values of Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets measured at fair value on a recurring basis | The tables below present certain of our assets measured at fair value at December 31, 2021 and 2020, categorized by the level of input used in the valuation of each asset. As of December 31, 2021 Description Total Quoted Prices in Significant Other Significant Cash equivalents (1) $ 26,417 $ 26,417 $ — $ — Investments: Total equity investments (2) 13,033 6,980 6,053 — Total debt investments (3) 10,375 4,612 5,763 — Total investments 23,408 11,592 11,816 — Total $ 49,825 $ 38,009 $ 11,816 $ — As of December 31, 2020 Description Total Quoted Prices in Significant Other Significant Cash equivalents (1) $ 26,291 $ 26,291 $ — $ — Investments: Total equity investments (2) 12,439 6,465 5,974 — Total debt investments (3) 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 consolidated balance sheets as cash and cash equivalents and current and long-term restricted cash and cash equivalents. Cash equivalents include $23,546 and $22,837 of balances that were restricted at December 31, 2021 and December 31, 2020, respectively. In addition to the cash equivalents of $26,417 and $26,291 at December 31, 2021 and December 31, 2020, respectively, reflected above, there were cash balances of $64,116 and $80,898 and restricted cash balances of $2,406 and $2,409 at December 31, 2021 and December 31, 2020, respectively. (2) The fair value of our equity investments is readily determinable. During the years ended December 31, 2021 and 2020, we received gross proceeds of $741 and $3,845, respectively, in connection with the sales of equity investments and recorded gross realized gains totaling $175 and $368, respectively, and gross realized losses totaling $0 and $245, respectively. (3) As of December 31, 2021, our debt investments, which are classified as available for sale, had a fair value of $10,375 with an amortized cost of $10,079; the difference between the fair value and amortized cost amounts resulted from unrealized gains of $296, net of unrealized losses of $10. 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 |
Schedule of debt securities | The amortized cost basis and fair value of available for sale debt securities at December 31, 2021, by contractual maturity, are shown below. Amortized Cost Fair Value Due in one year or less $ 1,150 $ 1,160 Due after one year through five years 3,863 4,011 Due after five years through ten years 3,929 4,070 Due after ten years 1,137 1,134 Total $ 10,079 $ 10,375 |
Indebtedness (Tables)
Indebtedness (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Summary of mortgage notes | The following table is a summary of this mortgage note as of December 31, 2021: Balance as of Contractual Stated Interest Rate Effective Interest Rate Maturity Date Monthly Payment Lender Type $ 6,986 (1) 6.20% 6.70% September 2032 $ 72 Federal Home Loan Mortgage Corporation _______________________________________ (1) Contractual principal payments excluding unamortized discount of $203. |
Schedule of principal payments due under mortgage notes | As of December 31, 2021, the required principal payments due during the next five years and thereafter under the terms of our mortgage note are as follows: Year Principal Payment 2022 $ 440 2023 469 2024 498 2025 531 2026 565 Thereafter 4,483 Total 6,986 Less: Unamortized net discount (203) Total mortgage note payable 6,783 Less: Short-term portion of mortgage note payable 419 Long-term portion of mortgage note payable $ 6,364 |
COVID- 19 Pandemic (Tables)
COVID- 19 Pandemic (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Schedule of Funds Received and Income Recognized | The below table provides the funds we received and income we recognized for the years ending December 31, 2021 and 2020 by program. December 31, 2021 December 31, 2020 Received Recognized Received Recognized General Distribution Funds Phase 1 $ — $ — $ 1,720 $ 1,720 Phase 2 — — 1,562 1,562 Phase 3 7,724 7,724 — — State Programs 71 71 88 88 Testing Equipment/Test kits — — 65 65 Total $ 7,795 $ 7,795 $ 3,435 $ 3,435 |
Restructuring Expense (Tables)
Restructuring Expense (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Liabilities and Expenses Related to Strategic Plan | A summary of the liabilities incurred combined with a reconciliation of the related components of the Strategic Plan restructuring expense recognized in the year ended December 31, 2021, follows, first by cost component and then by segment, the expenses are aggregated and reported in the line item Restructuring expenses in our consolidated statements of operations: Summary of Liabilities and Expenses as of and for the year ended December 31, 2021 (1) Type of Expense: Beginning Balance Expenses Incurred Payments Ending Balance Retention bonuses $ — $ 7,100 $ 6,095 $ 1,005 Severance, benefits and transition expenses — 9,091 7,654 1,437 Transaction expenses — 3,005 2,517 488 Total $ — $ 19,196 $ 16,266 $ 2,930 _______________________________________ (1) No obligations related to the Strategic Plan were incurred in 2020. Accrued bonuses and other compensation are reported in the consolidated balance sheet as part of Accrued compensation and benefits and accrued transaction expenses are reported as part of Accrued expenses and other current liabilities in the consolidated balance sheet. Summary of Liabilities and Expenses as of and for the year ended December 31, 2021 (1) By Segment: Beginning Balance Expenses Incurred Payments Ending Balance Residential $ — $ 13,311 $ 10,770 $ 2,541 Lifestyle Services — 1,433 1,433 — Corporate and Other — 4,452 4,063 389 Total $ — $ 19,196 $ 16,266 $ 2,930 _______________________________________ (1) No obligations related to the Strategic Plan were incurred in 2020. Accrued bonuses and other compensation are reported in the consolidated balance sheet as part of Accrued compensation and benefits and accrued transaction expenses are reported as part of Accrued expenses and other current liabilities in the consolidated balance sheet. |
Basis of Presentation and Org_2
Basis of Presentation and Organization (Details) $ in Thousands | 12 Months Ended | ||||||||||||||
Dec. 31, 2021USD ($)propertysegment | Dec. 31, 2020USD ($)community | Feb. 28, 2022living_unitcommunityproperty | Dec. 31, 2021state | Dec. 31, 2021living_unit | Dec. 31, 2021apartment | Dec. 31, 2021suite | Dec. 31, 2021bed | Dec. 31, 2021community | Dec. 31, 2021facility | Sep. 30, 2021communityliving_unit | Jun. 09, 2021living_unitcommunity | Jun. 03, 2021community | Apr. 04, 2021community | Jan. 01, 2020community | |
Real estate properties | |||||||||||||||
Number of operating segments | segment | 2 | ||||||||||||||
Restructuring expenses | $ | $ 19,196 | $ 1,448 | |||||||||||||
Revenues | $ | 934,593 | 1,163,742 | |||||||||||||
Other reimbursed expenses | |||||||||||||||
Real estate properties | |||||||||||||||
Revenues | $ | $ 31,605 | $ 25,648 | |||||||||||||
Strategic Plan | |||||||||||||||
Real estate properties | |||||||||||||||
Percentage of reduction cost per digital lead | 70.00% | ||||||||||||||
Restructuring expenses | $ | $ 19,196 | ||||||||||||||
Strategic Plan | Retention bonuses | |||||||||||||||
Real estate properties | |||||||||||||||
Restructuring expenses | $ | 7,100 | ||||||||||||||
Strategic Plan | Severance, benefits and transition expenses | |||||||||||||||
Real estate properties | |||||||||||||||
Restructuring expenses | $ | 9,091 | ||||||||||||||
Strategic Plan | Transaction expenses | |||||||||||||||
Real estate properties | |||||||||||||||
Restructuring expenses | $ | 3,005 | ||||||||||||||
DHC | Strategic Plan | Other reimbursed expenses | |||||||||||||||
Real estate properties | |||||||||||||||
Revenues | $ | $ 13,311 | ||||||||||||||
DHC | Strategic Plan | Forecast | |||||||||||||||
Real estate properties | |||||||||||||||
Number of units in real estate property closed | living_unit | 100 | ||||||||||||||
PEAK Inc | |||||||||||||||
Real estate properties | |||||||||||||||
Number of communities operated | 1 | ||||||||||||||
Senior Living Communities | |||||||||||||||
Real estate properties | |||||||||||||||
Number of properties operated | property | 141 | ||||||||||||||
Number of states in which real estate properties are located | state | 28 | ||||||||||||||
Number of living units in properties operated | 20,105 | 120 | 244 | ||||||||||||
Number of properties managed | 121 | ||||||||||||||
Number of properties owned and operated | property | 20 | ||||||||||||||
Number of living units in properties owned and operated | living_unit | 2,100 | ||||||||||||||
Number of communities operated | 3 | ||||||||||||||
Senior Living Communities | DHC | |||||||||||||||
Real estate properties | |||||||||||||||
Number of properties operated | 244 | ||||||||||||||
Number of units in properties managed | living_unit | 18,005 | ||||||||||||||
Number of real estate properties closed | 1 | ||||||||||||||
Senior Living Communities | DHC | Forecast | |||||||||||||||
Real estate properties | |||||||||||||||
Number of units in real estate property closed | living_unit | 100 | ||||||||||||||
Senior Living Communities | DHC | Strategic Plan | |||||||||||||||
Real estate properties | |||||||||||||||
Number of real estate properties transitioned | 107 | ||||||||||||||
Number of units in real estate properties transitioned | living_unit | 7,400 | ||||||||||||||
Senior Living Communities | DHC | Strategic Plan | Forecast | |||||||||||||||
Real estate properties | |||||||||||||||
Number of real estate properties closed | 1 | ||||||||||||||
Senior Living Communities | PEAK Inc | |||||||||||||||
Real estate properties | |||||||||||||||
Number of communities operated | 4 | 4 | |||||||||||||
Number of living units leased | living_unit | 200 | ||||||||||||||
Senior Living Communities | DHC | |||||||||||||||
Real estate properties | |||||||||||||||
Number of properties managed | 228 | ||||||||||||||
Senior Living Communities | Senior Housing Properties Trust Transaction Agreement | DHC | |||||||||||||||
Real estate properties | |||||||||||||||
Transaction costs | $ | $ 1,448 | ||||||||||||||
Continuing Care Retirement Communities | Forecast | |||||||||||||||
Real estate properties | |||||||||||||||
Number of properties operated | 1 | ||||||||||||||
Number of units in real estate property closed | living_unit | 106 | ||||||||||||||
Continuing Care Retirement Communities | DHC | Strategic Plan | |||||||||||||||
Real estate properties | |||||||||||||||
Number of real estate properties closed | living_unit | 1,500 | ||||||||||||||
Continuing Care Retirement Communities | DHC | Strategic Plan | |||||||||||||||
Real estate properties | |||||||||||||||
Number of properties operated | 27 | ||||||||||||||
Independent living apartment | |||||||||||||||
Real estate properties | |||||||||||||||
Number of living units in properties operated | apartment | 10,423 | ||||||||||||||
Assisted living suites | |||||||||||||||
Real estate properties | |||||||||||||||
Number of living units in properties operated | suite | 9,636 | ||||||||||||||
Rediscovery Memory Care Units | |||||||||||||||
Real estate properties | |||||||||||||||
Number of living units in properties operated | bed | 1,872 | ||||||||||||||
Skilled nursing units | |||||||||||||||
Real estate properties | |||||||||||||||
Number of living units in properties operated | bed | 46 | ||||||||||||||
Ageility Inpatient Rehabilitation | |||||||||||||||
Real estate properties | |||||||||||||||
Number of properties operated | 37 | ||||||||||||||
Revenue from contract with customer, excluding assessed tax | $ | $ 3,303 | ||||||||||||||
Revenue from contract with customer, excluding assessed tax, percentage increase | 38.10% | ||||||||||||||
Ageility Inpatient Rehabilitation | Strategic Plan | |||||||||||||||
Real estate properties | |||||||||||||||
Number of real estate properties closed | 17 | 27 | |||||||||||||
Ageility Inpatient Rehabilitation | DHC | |||||||||||||||
Real estate properties | |||||||||||||||
Number of real estate properties closed | property | 10 | ||||||||||||||
Ageility Inpatient Rehabilitation | Rehabilitation And Wellness | |||||||||||||||
Real estate properties | |||||||||||||||
Number of properties operated | property | 10 | ||||||||||||||
Outpatient Rehabilitation Clinics | Strategic Plan | |||||||||||||||
Real estate properties | |||||||||||||||
Number of real estate properties opened | property | 15 | ||||||||||||||
Outpatient Rehabilitation Clinics | DHC | |||||||||||||||
Real estate properties | |||||||||||||||
Number of properties managed | property | 106 | ||||||||||||||
Number of real estate properties transitioned | property | 99 | ||||||||||||||
Outpatient Rehabilitation Clinics | DHC | Forecast | |||||||||||||||
Real estate properties | |||||||||||||||
Number of real estate properties closed | property | 17 | ||||||||||||||
Outpatient Rehabilitation Clinics | DHC | Strategic Plan | |||||||||||||||
Real estate properties | |||||||||||||||
Number of properties operated | 205 | ||||||||||||||
SNF | |||||||||||||||
Real estate properties | |||||||||||||||
Number of units in real estate property closed | facility | 1,532 | ||||||||||||||
SNF | Strategic Plan | |||||||||||||||
Real estate properties | |||||||||||||||
Number of units in real estate property closed | living_unit | 1,532 | ||||||||||||||
SNF | DHC | Strategic Plan | |||||||||||||||
Real estate properties | |||||||||||||||
Number of real estate properties transitioned | 108 | ||||||||||||||
Owned Communities | Strategic Plan | |||||||||||||||
Real estate properties | |||||||||||||||
Payments for protective equipment | $ | $ 11,684 | ||||||||||||||
Managed Communities | Strategic Plan | |||||||||||||||
Real estate properties | |||||||||||||||
Payments for protective equipment | $ | $ 103,378 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | Feb. 24, 2021USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Equity Method Investments | |||||
Number of reporting segments | segment | 2 | ||||
Federal deposit insurance corporation premium expense | $ 250 | $ 250 | |||
Accrued expenses and other current liabilities | 31,488,000 | 42,208,000 | |||
Total equity investments | 13,033,000 | 12,439,000 | |||
Equity investments net unrealized holding gain (loss) | 4,105,000 | 3,376,000 | |||
Total debt investments | 10,375,000 | 12,310,000 | |||
Debt investments net unrealized holding gain (loss) | 296,000 | 756,000 | |||
Interest, dividend and other income | 358,000 | 757,000 | |||
Unamortized gross balance of deferred financing costs | $ 75,000 | 288,000 | |||
Lessee remaining lease term | 10 years | ||||
Weighted average discount rate | 4.90% | ||||
Finance lease expenses | $ 1,256,000 | 323,000 | |||
Right-of-use asset, amortization | (924,000) | (230,000) | |||
Estimated minimum loss | 0 | ||||
Interest expense | $ 332,000 | 93,000 | |||
Management fee of gross revenue, base (as a percent) | 3.00% | ||||
Property management fee percentage of construction costs | 3.00% | ||||
Revenues | $ 934,593,000 | 1,163,742,000 | |||
Cumulative effect adjustment | 181,590,000 | 210,532,000 | $ 119,981,000 | ||
Decrease operating lease right of use asset | 2,658,000 | ||||
Decrease in operating lease liability | 2,629,000 | ||||
DHC | |||||
Equity Method Investments | |||||
Accrued expenses and other current liabilities | 20,345,000 | 30,090,000 | |||
General and Administrative Expenses | |||||
Equity Method Investments | |||||
Operating lease expense | $ 2,082,000 | $ 1,760,000 | |||
Cumulative Effect, Period of Adoption, Adjustment | |||||
Equity Method Investments | |||||
Cumulative effect adjustment | 0 | ||||
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent | Cumulative Effect, Period of Adoption, Adjustment | |||||
Equity Method Investments | |||||
Cumulative effect adjustment | $ 1,694,000 | ||||
Accounts Receivable | Customer Concentration Risk | Medicare | |||||
Equity Method Investments | |||||
Concentration risk percentage | 32.10% | 32.00% | |||
Accounts Receivable | Customer Concentration Risk | Medicaid | |||||
Equity Method Investments | |||||
Concentration risk percentage | 1.80% | 1.20% | |||
COVID-19 | |||||
Equity Method Investments | |||||
Employer payroll taxes | $ 22,194,000 | $ 22,194,000 | |||
Residential | |||||
Equity Method Investments | |||||
Operating lease expense | $ 2,041,000 | 2,762,000 | |||
Lifestyle Services | |||||
Equity Method Investments | |||||
Operating lease expense | 2,431,000 | 2,356,000 | |||
Residential management fees | |||||
Equity Method Investments | |||||
Revenues | 47,479,000 | 62,880,000 | |||
Residential management fees | Residential | |||||
Equity Method Investments | |||||
Revenues | 47,479,000 | 62,880,000 | |||
Residential management fees | Lifestyle Services | |||||
Equity Method Investments | |||||
Revenues | 0 | 0 | |||
Other reimbursed expenses | |||||
Equity Method Investments | |||||
Revenues | 31,605,000 | 25,648,000 | |||
Other reimbursed expenses | Residential | |||||
Equity Method Investments | |||||
Revenues | 31,605,000 | 25,648,000 | |||
Other reimbursed expenses | Lifestyle Services | |||||
Equity Method Investments | |||||
Revenues | $ 0 | 0 | |||
Minimum | |||||
Equity Method Investments | |||||
Consumer price index percentage | 2.00% | ||||
Maximum | |||||
Equity Method Investments | |||||
Consumer price index percentage | 6.00% | ||||
DHC | Senior Housing Properties Trust Transaction Agreement | |||||
Equity Method Investments | |||||
Management fee of gross revenue, base (as a percent) | 5.00% | ||||
Management fee of gross revenue, incentive (as a percent) | 15.00% | ||||
Management fee maximum (as a percent) | 1.50% | ||||
DHC | Residential management fees | |||||
Equity Method Investments | |||||
Due from to related party | $ 37,866,000 | $ 89,911,000 | |||
DHC | Minimum | ABP Trust | |||||
Equity Method Investments | |||||
Operating lease expense | $ 1,026,000 | ||||
DHC | Maximum | ABP Trust | |||||
Equity Method Investments | |||||
Operating lease expense | $ 1,395,000 | ||||
Revolving Credit Facility | Secured Revolving Credit Facility Maturing June 2022 | Line of Credit | |||||
Equity Method Investments | |||||
Maximum borrowing capacity | $ 65,000,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Current | $ 24,970 | $ 23,877 |
Long-Term | 982 | 1,369 |
Workers’ compensation letter of credit collateral | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Current | 22,899 | 21,561 |
Long-Term | 0 | 0 |
Insurance reserves and other restricted amounts | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Current | 356 | 644 |
Long-Term | 982 | 1,369 |
Health deposit-imprest cash | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Current | 1,103 | 1,103 |
Long-Term | 0 | 0 |
Real estate taxes and certain capital expenditures as required by our mortgage | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Current | 612 | 569 |
Long-Term | $ 0 | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Receivables and Financing Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance for doubtful accounts | ||
Balance at Beginning of Period | $ 3,149 | $ 4,664 |
Provision for Doubtful Accounts | 2,089 | 1,450 |
Recoveries | 323 | 156 |
Write-offs | (2,711) | (3,121) |
Balance at End of Period | $ 2,850 | $ 3,149 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Debt Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Investments | ||
Fair Value, Less than 12 months | $ 2,474 | $ 291 |
Unrealized Loss , Less than 12 months | 10 | 4 |
Fair Value, Greater than 12 months | 0 | 0 |
Unrealized Loss, Greater than 12 months | 0 | 0 |
Fair Value, Total | 2,474 | 291 |
Unrealized Loss, Total | $ 10 | $ 4 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Buildings | |
Property and Equipment | |
Estimated Useful Life (in years) | 40 years |
Building and land improvements | Minimum | |
Property and Equipment | |
Estimated Useful Life (in years) | 3 years |
Building and land improvements | Maximum | |
Property and Equipment | |
Estimated Useful Life (in years) | 15 years |
Equipment | |
Property and Equipment | |
Estimated Useful Life (in years) | 7 years |
Computer equipment and software | |
Property and Equipment | |
Estimated Useful Life (in years) | 5 years |
Furniture and fixtures | |
Property and Equipment | |
Estimated Useful Life (in years) | 7 years |
Network Development | |
Property and Equipment | |
Estimated Useful Life (in years) | 10 years |
Vehicles | |
Property and Equipment | |
Estimated Useful Life (in years) | 5 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Summary of Leases (Details) $ in Thousands | Jan. 10, 2022USD ($)ft² | Feb. 24, 2021USD ($) | Dec. 31, 2021USD ($)property | Dec. 31, 2020USD ($) |
Accounting Policies [Abstract] | ||||
Lessee remaining lease term | 10 years | |||
Weighted average remaining lease term | 8 years | |||
Weighted average discount rate | 4.90% | |||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||
Operating lease right-of-use assets | $ 9,197 | $ 18,030 | ||
Finance Lease, Liability, Payment, Due [Abstract] | ||||
Finance lease right-of-use assets | 3,467 | 4,493 | ||
Lease right-of-use assets | 12,664 | |||
2022 | 2,186 | |||
2023 | 2,227 | |||
2024 | 2,268 | |||
2025 | 2,309 | |||
There after | 7,858 | |||
Total | $ 16,848 | |||
IBR | 4.90% | |||
Lease Liability | $ 13,987 | |||
Finance lease expenses | 1,256 | 323 | ||
Right-of-use asset, amortization | 924 | 230 | ||
Interest expense | $ 332 | 93 | ||
Weighted average discount rate | 4.90% | |||
ABP Trust | Subsequent Event | ||||
Finance Lease, Liability, Payment, Due [Abstract] | ||||
Leased space | ft² | 30,000 | |||
ABP Trust | DHC | ||||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||
IBR | 3.90% | |||
Finance Lease, Liability, Payment, Due [Abstract] | ||||
Leasehold improvements | $ 2,667 | |||
ABP Trust | DHC | Minimum | ||||
Finance Lease, Liability, Payment, Due [Abstract] | ||||
Operating lease expense | 1,026 | |||
ABP Trust | DHC | Maximum | ||||
Finance Lease, Liability, Payment, Due [Abstract] | ||||
Operating lease expense | 1,395 | |||
Equipment | ||||
Finance Lease, Liability, Payment, Due [Abstract] | ||||
Finance lease, renewal term | 5 years | |||
Finance lease right-of-use assets | $ 3,467 | |||
2022 | 1,140 | |||
2023 | 1,140 | |||
2024 | 1,140 | |||
2025 | 1,140 | |||
There after | 0 | |||
Total | $ 4,560 | |||
IBR | 7.60% | |||
Lease Liability | $ 3,922 | |||
General and Administrative Expenses | ||||
Finance Lease, Liability, Payment, Due [Abstract] | ||||
Operating lease expense | $ 2,082 | 1,760 | ||
Headquarters Lease | ||||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||
Lessee, operating lease, number of properties lease | property | 1 | |||
Operating lease right-of-use assets | $ 9,197 | |||
2022 | 1,046 | |||
2023 | 1,087 | |||
2024 | 1,128 | |||
2025 | 1,169 | |||
There after | 7,858 | |||
Total | $ 12,288 | |||
IBR | 3.88% | |||
Lease Liability | $ 10,065 | |||
Headquarters | ABP Trust | DHC | ||||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||
Operating lease right-of-use assets | 9,746 | 9,197 | 452 | |
Lease Liability | $ 9,746 | $ 10,065 | $ 496 | |
Corporate Headquarters | ABP Trust | Subsequent Event | ||||
Finance Lease, Liability, Payment, Due [Abstract] | ||||
Leased space | ft² | 41,000 | |||
Corporate Headquarters | ABP Trust | Minimum | Subsequent Event | ||||
Finance Lease, Liability, Payment, Due [Abstract] | ||||
Operating lease expense | $ 770 | |||
Corporate Headquarters | ABP Trust | Maximum | Subsequent Event | ||||
Finance Lease, Liability, Payment, Due [Abstract] | ||||
Operating lease expense | $ 1,007 |
Revenue from Contract with Cu_2
Revenue from Contract with Customer (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 934,593 | $ 1,163,742 |
Other operating income | 7,795 | 3,435 |
Private payer | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 64,561 | 80,145 |
Private payer | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 63,495 | 75,625 |
Private payer | Lifestyle Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,066 | 4,520 |
Medicare and Medicaid programs | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 42,739 | 41,909 |
Medicare and Medicaid programs | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,143 | 1,390 |
Medicare and Medicaid programs | Lifestyle Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 41,596 | 40,519 |
Other third-party payer programs | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 25,352 | 36,993 |
Other third-party payer programs | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Other third-party payer programs | Lifestyle Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 25,352 | 36,993 |
Residential management fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 47,479 | 62,880 |
Residential management fees | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 47,479 | 62,880 |
Residential management fees | Lifestyle Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Reimbursed community-level costs incurred on behalf of managed communities | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 722,857 | 916,167 |
Reimbursed community-level costs incurred on behalf of managed communities | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 722,857 | 916,167 |
Reimbursed community-level costs incurred on behalf of managed communities | Lifestyle Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Other reimbursed expenses | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 31,605 | 25,648 |
Other reimbursed expenses | DHC | Strategic Plan | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 13,311 | |
Other reimbursed expenses | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 31,605 | 25,648 |
Other reimbursed expenses | Lifestyle Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Total revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 934,593 | 1,163,742 |
Total revenue | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 866,579 | 1,081,710 |
Total revenue | Lifestyle Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 68,014 | $ 82,032 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 934,593 | $ 1,163,742 |
Other operating income | 7,795 | 3,435 |
Operating expenses | 968,247 | 1,151,235 |
Operating (loss) income | (25,859) | 15,942 |
Allocated corporate and other costs | 0 | 0 |
Other income (loss), net | (3,655) | (22,868) |
(Loss) income before income taxes and equity in losses of an investee | (29,514) | (6,926) |
Provision for income taxes | (234) | (663) |
Equity in losses of an investee | (177) | 0 |
Net (loss) income | (29,925) | (7,589) |
Restructuring expenses | 19,196 | 1,448 |
Other reimbursed expenses | ||
Segment Reporting Information [Line Items] | ||
Revenues | 31,605 | 25,648 |
Strategic Plan | ||
Segment Reporting Information [Line Items] | ||
Restructuring expenses | 19,196 | |
DHC | Strategic Plan | Other reimbursed expenses | ||
Segment Reporting Information [Line Items] | ||
Revenues | 13,311 | |
Residential | Other reimbursed expenses | ||
Segment Reporting Information [Line Items] | ||
Revenues | 31,605 | 25,648 |
Lifestyle Services | Other reimbursed expenses | ||
Segment Reporting Information [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | Residential | ||
Segment Reporting Information [Line Items] | ||
Revenues | 866,579 | 1,081,710 |
Other operating income | 7,776 | 1,715 |
Operating expenses | 831,380 | 1,018,348 |
Operating (loss) income | 42,975 | 65,077 |
Allocated corporate and other costs | (43,781) | (57,023) |
Other income (loss), net | (2,360) | (288) |
(Loss) income before income taxes and equity in losses of an investee | (3,166) | 7,766 |
Provision for income taxes | 0 | 0 |
Equity in losses of an investee | 0 | |
Net (loss) income | (3,166) | 7,766 |
Operating Segments | Residential | Strategic Plan | ||
Segment Reporting Information [Line Items] | ||
Restructuring expenses | 13,311 | |
Operating Segments | Lifestyle Services | ||
Segment Reporting Information [Line Items] | ||
Revenues | 68,014 | 82,032 |
Other operating income | 19 | 1,720 |
Operating expenses | 61,227 | 67,321 |
Operating (loss) income | 6,806 | 16,431 |
Allocated corporate and other costs | (3,403) | (4,109) |
Other income (loss), net | 0 | 0 |
(Loss) income before income taxes and equity in losses of an investee | 3,403 | 12,322 |
Provision for income taxes | 0 | 0 |
Equity in losses of an investee | 0 | |
Net (loss) income | 3,403 | 12,322 |
Operating Segments | Lifestyle Services | Strategic Plan | ||
Segment Reporting Information [Line Items] | ||
Restructuring expenses | 1,433 | |
Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Revenues | 0 | 0 |
Other operating income | 0 | 0 |
Operating expenses | 75,640 | 65,566 |
Operating (loss) income | (75,640) | (65,566) |
Allocated corporate and other costs | 47,184 | 61,132 |
Other income (loss), net | (1,295) | (22,580) |
(Loss) income before income taxes and equity in losses of an investee | (29,751) | (27,014) |
Provision for income taxes | (234) | (663) |
Equity in losses of an investee | (177) | |
Net (loss) income | (30,162) | $ (27,677) |
Corporate and Other | Strategic Plan | ||
Segment Reporting Information [Line Items] | ||
Restructuring expenses | $ 4,452 |
Property and Equipment, net (De
Property and Equipment, net (Details) | Sep. 30, 2021USD ($)community | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Jun. 03, 2021community | Apr. 04, 2021community |
Property and Equipment | |||||
Property and equipment, at cost | $ 282,094,000 | $ 275,547,000 | |||
Less: accumulated depreciation | (122,251,000) | (116,296,000) | |||
Property and equipment, net | 159,843,000 | 159,251,000 | |||
Loss on termination of lease | 3,278,000 | 22,899,000 | |||
Operating lease right-of-use assets | 9,197,000 | 18,030,000 | |||
Tangible asset impairment charges | 0 | ||||
Depreciation expense | 10,758,000 | 10,767,000 | |||
Residential | |||||
Property and Equipment | |||||
Tangible asset impairment charges | 890,000 | ||||
Senior Living Communities | |||||
Property and Equipment | |||||
Number of communities operated | community | 3 | ||||
PEAK Inc | |||||
Property and Equipment | |||||
Number of communities operated | community | 1 | ||||
Loss on termination of lease | 3,278,000 | ||||
Loss on termination of lease, termination fee | $ 3,100,000 | ||||
Loss on termination of lease, other obligation fee | 548,000 | ||||
Loss on termination of lease, legal transaction cost | 37,000 | ||||
Operating lease right-of-use assets | 16,055,000 | ||||
Lease Liability | $ 17,636,000 | ||||
Proceeds from insurance settlement | 1,500,000 | ||||
Decrease in accumulated depreciation | 4,803,000 | ||||
PEAK Inc | Senior Living Communities | |||||
Property and Equipment | |||||
Number of communities operated | community | 4 | 4 | |||
Land | |||||
Property and Equipment | |||||
Property and equipment, at cost | 12,155,000 | 12,155,000 | |||
Buildings, construction in process and improvements | |||||
Property and Equipment | |||||
Property and equipment, at cost | 207,333,000 | 202,679,000 | |||
Furniture, fixtures and equipment | |||||
Property and Equipment | |||||
Property and equipment, at cost | $ 62,606,000 | $ 60,713,000 | |||
Leasehold Improvements and Other Fixed Assets | PEAK Inc | |||||
Property and Equipment | |||||
Property and equipment, net | $ 1,174,000 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2020 | |
Non-current deferred tax assets: | |||
Insurance reserves | $ 2,087 | $ 2,661 | |
Tax credits | 1,938 | 1,060 | |
Tax loss carryforwards | 39,297 | 36,838 | |
Depreciable assets | 2,377 | 7,469 | |
Goodwill | 2,431 | 2,536 | |
Right-of-use lease obligation | 982 | 6,242 | |
Other assets | 1,698 | 1,469 | |
Total non-current deferred tax assets before valuation allowance | 50,810 | 58,275 | |
Valuation allowance: | (47,926) | (46,485) | |
Total non-current deferred tax assets | 2,884 | 11,790 | |
Non-current deferred tax liabilities: | |||
Lease expense | 0 | (4,381) | |
Right-of-use lease asset | (868) | (6,180) | |
Other liabilities | (1,873) | (1,085) | |
Total non-current deferred tax liabilities | (2,741) | (11,646) | |
Net deferred tax asset | 143 | 144 | |
Income Taxes | |||
Annual limitation net operating losses | $ 445 | ||
Tax credit carryforward, amount to lapse before utilized | 18,498 | ||
Movement in valuation allowance for deferred tax assets | |||
Provision for income taxes | 234 | 663 | |
State income tax | 233 | ||
State valuation allowance, amount | 1 | ||
Federal | |||
Non-current deferred tax assets: | |||
Tax loss carryforwards | 18,606 | ||
Income Taxes | |||
Operating loss carryforwards, amount to lapse before utilized | 88,601 | ||
Increase (decrease) in deferred tax asset valuation allowance | (37,104) | ||
Net operating loss carry forward | 120,315 | ||
Tax credit carry forward | 1,114 | ||
State and Local Jurisdiction | |||
Non-current deferred tax assets: | |||
Tax loss carryforwards | 14,031 | ||
Income Taxes | |||
Net operating loss carry forward | 278,410 | ||
Valuation Allowance for Deferred Tax Assets | |||
Movement in valuation allowance for deferred tax assets | |||
Beginning balance | 46,485 | 87,665 | |
Amounts Charged to Expense | 1,344 | 584 | |
Amounts Charged Off, Net of Recoveries | 0 | (41,834) | |
Amounts (Credited) Charged to Equity | 97 | 70 | |
Ending balance | $ 47,926 | $ 46,485 |
Income Taxes - Current and Defe
Income Taxes - Current and Deferred Tax Provision (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current tax provision (benefit): | ||
Federal | $ 0 | $ (506,000) |
State | 233,000 | 365,000 |
Total current tax provision (benefit) | 233,000 | (141,000) |
Deferred tax provision: | ||
Federal | 0 | 277,000 |
State | 1,000 | 527,000 |
Total deferred tax provision | 1,000 | 804,000 |
Total tax provision | $ 234,000 | $ 663,000 |
Difference between the entity's effective tax (benefit) rate on continuing operations and the U.S. Federal statutory income tax (benefit) rate | ||
Taxes at statutory U.S. federal income tax rate | (21.00%) | (21.00%) |
State and local income taxes, net of federal tax benefit | 0.30% | 4.50% |
Tax credits | (2.20%) | 259.30% |
Change in valuation allowance | 17.60% | (581.20%) |
Deferred taxes | 1.90% | 0.00% |
Federal net operating losses | 0.00% | 268.60% |
State net operating losses | 3.50% | 50.20% |
Return to provision | 0.00% | 36.40% |
Investments | 0.00% | (7.80%) |
Other differences, net | 0.70% | 0.60% |
Effective tax rate | 0.80% | 9.60% |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Tax Year 2020 | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
AMT amount | 554,000 | |
Tax Year 2021 | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
AMT amount | 100,000 | |
Latest Tax Year | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
AMT amount | $ 454,000 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Weighted average shares outstanding - basic (in shares) | 31,591 | 31,471 |
Effect of dilutive securities: unvested share awards (in shares) | 0 | 0 |
Weighted average shares outstanding - diluted (in shares) | 31,591 | 31,471 |
Potentially dilutive restricted unvested common shares, not included in diluted EPS calculation (in shares) | 236 | 110 |
Fair Values of Assets and Lia_3
Fair Values of Assets and Liabilities - Recurring Measurements (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)security | Dec. 31, 2020USD ($) | |
Fair Values of Assets and Liabilities | ||
Cash equivalents | $ 26,417 | $ 26,291 |
Total equity investments | 13,033 | 12,439 |
Total debt investments | 10,375 | 12,310 |
Total investments | 23,408 | 24,749 |
Total | 49,825 | 51,040 |
Restricted cash equivalents | 23,546 | 22,837 |
Restricted Cash | 2,406 | 2,409 |
Cash | 64,116 | 80,898 |
Proceeds from sale of equity securities | 741 | 3,845 |
Gross realized gains recorded on sale of equity securities | 175 | 368 |
Gross realized losses recorded on sale of equity securities | 0 | 245 |
Total | 10,079 | 11,554 |
Unrealized gains on debt securities | 296 | 756 |
Unrealized losses on debt securities | $ 10 | 4 |
Debt investments in a loss position less than 12 months, number of positions | security | 41,000 | |
Debt investments in a loss position less than 12 months, fair value | $ 2,474 | 291 |
Proceeds from sale of debt securities | 4,193 | 6,563 |
Gross realized gains recorded on sale of debt securities | 69 | 302 |
Gross realized losses recorded on sale of debt securities | 26 | 0 |
Restricted Debt Securities | ||
Fair Values of Assets and Liabilities | ||
Total debt investments | 6,907 | 8,395 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Values of Assets and Liabilities | ||
Cash equivalents | 26,417 | 26,291 |
Total equity investments | 6,980 | 6,465 |
Total debt investments | 4,612 | 7,301 |
Total investments | 11,592 | 13,766 |
Total | 38,009 | 40,057 |
Significant Other Observable Inputs (Level 2) | ||
Fair Values of Assets and Liabilities | ||
Cash equivalents | 0 | 0 |
Total equity investments | 6,053 | 5,974 |
Total debt investments | 5,763 | 5,009 |
Total investments | 11,816 | 10,983 |
Total | 11,816 | 10,983 |
Significant Unobservable Inputs (Level 3) | ||
Fair Values of Assets and Liabilities | ||
Cash equivalents | 0 | 0 |
Total equity investments | 0 | 0 |
Total debt investments | 0 | 0 |
Total investments | 0 | 0 |
Total | $ 0 | $ 0 |
Fair Values of Assets and Lia_4
Fair Values of Assets and Liabilities - Debt Securities, Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Amortized Cost | ||
Due in one year or less | $ 1,150 | |
Due after one year through five years | 3,863 | |
Due after five years through ten years | 3,929 | |
Due after ten years | 1,137 | |
Total | 10,079 | $ 11,554 |
Fair Value | ||
Due in one year or less | 1,160 | |
Due after one year through five years | 4,011 | |
Due after five years through ten years | 4,070 | |
Due after ten years | 1,134 | |
Total | $ 10,375 | $ 12,310 |
Fair Values of Assets and Lia_5
Fair Values of Assets and Liabilities - Narrative (Details) | 12 Months Ended | ||||
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2021community | Jun. 03, 2021community | Apr. 04, 2021community | |
Carrying value and fair value | |||||
Mortgage note payable | $ 6,364,000 | $ 6,783,000 | |||
Tangible asset impairment charges | 0 | ||||
Senior Living Communities | |||||
Carrying value and fair value | |||||
Number of communities operated | community | 3 | ||||
Residential | |||||
Carrying value and fair value | |||||
Tangible asset impairment charges | 890,000 | ||||
PEAK Inc | |||||
Carrying value and fair value | |||||
Number of communities operated | community | 1 | ||||
PEAK Inc | Senior Living Communities | |||||
Carrying value and fair value | |||||
Number of communities operated | community | 4 | 4 | |||
Carrying value | |||||
Carrying value and fair value | |||||
Mortgage note payable | 6,783,000 | 7,171,000 | |||
Total | |||||
Carrying value and fair value | |||||
Mortgage note payable | $ 7,689,000 | $ 8,177,000 |
Indebtedness - Narrative (Detai
Indebtedness - Narrative (Details) | Jan. 27, 2022USD ($)communityextension | Dec. 31, 2021USD ($)communityagreementliving_unit | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||
Amount available for borrowing under credit facility | $ 26,914,000 | ||
Unamortized gross balance of deferred financing costs | 75,000 | $ 288,000 | |
Secured Debt | Senior Secured Term Loan | Subsequent Event | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 95,000,000 | ||
Proceeds from loan | 63,000,000 | ||
Unamortized gross balance of deferred financing costs | 3,200,000 | ||
Proceeds for capital improvements | 12,000,000 | ||
Achievement of certain financial threshold amount for credit agreement | 20,000,000 | ||
Collateral securing workers' compensation insurance program | $ 40,000,000 | ||
Number of extension | extension | 2 | ||
Extension period | 1 year | ||
Secured Debt | SOFR Rate | Senior Secured Term Loan | Minimum | Subsequent Event | |||
Debt Instrument [Line Items] | |||
Variable rate basis | 0.50% | ||
Secured Debt | SOFR Rate | Senior Secured Term Loan | Maximum | Subsequent Event | |||
Debt Instrument [Line Items] | |||
Variable rate basis | 4.50% | ||
Mortgages | |||
Debt Instrument [Line Items] | |||
Interest expense and other associated costs | $ 477,000 | 502,000 | |
Senior Living Communities | Secured Debt | Senior Secured Term Loan | Subsequent Event | |||
Debt Instrument [Line Items] | |||
Number of real estate properties securing borrowings on credit facility | community | 14 | ||
Senior Living Communities | Mortgages | |||
Debt Instrument [Line Items] | |||
Number of real estate properties mortgaged | community | 1 | ||
Revolving Credit Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Interest expense and other associated costs | $ 674,000 | 1,036,000 | |
Revolving Credit Facility | Line of Credit | Secured Revolving Credit Facility Maturing June 2022 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 65,000,000 | ||
Debt outstanding | $ 0 | $ 0 | |
Variable interest rate | 0.35% | ||
Amount available for borrowing under credit facility | $ 64,000 | ||
Letters of credit issued, remaining borrowing capacity | $ 10,848,000 | ||
Revolving Credit Facility | Line of Credit | LIBOR | Secured Revolving Credit Facility Maturing June 2022 | |||
Debt Instrument [Line Items] | |||
Variable rate basis | 2.50% | ||
Variable interest rate | 2.60% | ||
Revolving Credit Facility | Line of Credit | Base Rate | Secured Revolving Credit Facility Maturing June 2022 | |||
Debt Instrument [Line Items] | |||
Variable rate basis | 1.50% | ||
Variable interest rate | 4.75% | ||
Revolving Credit Facility | Secured Debt | Senior Secured Term Loan | Subsequent Event | |||
Debt Instrument [Line Items] | |||
Debt instrument, term for interest only payments | 2 years | ||
Debt instrument, term subject to prepayment fee | 18 months | ||
Revolving Credit Facility | Senior Living Communities | Secured Revolving Credit Facility Maturing June 2022 | |||
Debt Instrument [Line Items] | |||
Number of real estate properties securing borrowings on credit facility | community | 11 | ||
Number of units in real estate properties securing borrowings on credit facility | living_unit | 1,237 | ||
Letter of Credit | Other Than Workers' Compensation Insurance Program Collateral | |||
Debt Instrument [Line Items] | |||
Number of irrevocable standby letters of credit agreements | living_unit | 1 | ||
Standby Letters of Credit | |||
Debt Instrument [Line Items] | |||
Number of irrevocable standby letters of credit agreements | agreement | 2 | ||
Standby Letters of Credit | Workers' Compensation Insurance Program | |||
Debt Instrument [Line Items] | |||
Extension period | 1 year | ||
Guarantor obligations maximum exposure undiscounted | $ 26,850,000 | ||
Standby Letters of Credit | Cash Equivalents | Workers' Compensation Insurance Program | |||
Debt Instrument [Line Items] | |||
Collateral securing workers' compensation insurance program | 22,899,000 | ||
Standby Letters of Credit | Debt and Equity Investments | Workers' Compensation Insurance Program | |||
Debt Instrument [Line Items] | |||
Collateral securing workers' compensation insurance program | $ 4,574,000 |
Indebtedness - Summary of Mortg
Indebtedness - Summary of Mortgage (Details) - September 2032 $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Debt Instrument [Line Items] | |
Unamortized net discount and debt issuance costs | $ 203 |
Mortgages | |
Debt Instrument [Line Items] | |
Mortgage debt and premiums | $ 6,986 |
Contractual Stated Interest Rate | 6.20% |
Effective Interest Rate | 6.70% |
Monthly Payment | $ 72 |
Unamortized net discount and debt issuance costs | $ 203 |
Indebtedness - Principal Paymen
Indebtedness - Principal Payments Due (Details) - September 2032 $ in Thousands | Dec. 31, 2021USD ($) |
Debt Instrument [Line Items] | |
Less: Unamortized net discount | $ (203) |
Mortgages | |
Debt Instrument [Line Items] | |
2022 | 440 |
2023 | 469 |
2024 | 498 |
2025 | 531 |
2026 | 565 |
Thereafter | 4,483 |
Total mortgage notes payable, gross | 6,986 |
Less: Unamortized net discount | (203) |
Total mortgage note payable | 6,783 |
Less: Short-term portion of mortgage note payable | 419 |
Long-term portion of mortgage note payable | $ 6,364 |
Lease with DHC and Management_2
Lease with DHC and Management Agreements with DHC - Narrative (Details) $ in Thousands | Jun. 09, 2021USD ($)living_unitcommunity | Dec. 31, 2021USD ($)living_unitcommunityrenewal_termpropertyfacility | Dec. 31, 2020USD ($)buildingcommunityliving_unit | Dec. 31, 2019USD ($)leaseshares | Feb. 28, 2022living_unitcommunity | Jan. 01, 2020community |
Operating Leased Assets [Line Items] | ||||||
Gain (loss) on contract termination | $ 22,899 | |||||
Increase (decrease) in working capital liabilities | (51,547) | |||||
Management fee of gross revenue, base (as a percent) | 3.00% | |||||
Number of renewal terms | renewal_term | 2 | |||||
Renewal term | 5 years | |||||
Revenues | $ 934,593 | 1,163,742 | ||||
Minimum | ||||||
Operating Leased Assets [Line Items] | ||||||
Consumer price index percentage | 2.00% | |||||
Maximum | ||||||
Operating Leased Assets [Line Items] | ||||||
Consumer price index percentage | 6.00% | |||||
Residential management fees | ||||||
Operating Leased Assets [Line Items] | ||||||
Revenues | $ 47,479 | 62,880 | ||||
DHC | Management Fees | ||||||
Operating Leased Assets [Line Items] | ||||||
Revenues | $ 43,457 | 59,928 | ||||
DHC | ||||||
Operating Leased Assets [Line Items] | ||||||
Additional senior living without payment for termination fee | $ 682,000 | |||||
DHC | ||||||
Operating Leased Assets [Line Items] | ||||||
Issuance of common stock | 23,453 | |||||
DHC | Strategic Plan | Forecast | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of units in real estate property closed | living_unit | 100 | |||||
Senior Housing Properties Trust Transaction Agreement | DHC | ||||||
Operating Leased Assets [Line Items] | ||||||
Management fee of gross revenue, base (as a percent) | 5.00% | |||||
Management fee of gross revenue, incentive (as a percent) | 15.00% | |||||
Management fee maximum (as a percent) | 1.50% | |||||
Senior Housing Properties Trust Transaction Agreement | DHC | Private Placement | ||||||
Operating Leased Assets [Line Items] | ||||||
Issuance of common stock | $ 75,000 | |||||
Excess of fair value of share issuances | $ 97,899 | |||||
Senior Housing Properties Trust Transaction Agreement | DHC | ||||||
Operating Leased Assets [Line Items] | ||||||
Management agreement, term of agreement, extension | 2 years | |||||
Senior Housing Properties Trust Transaction Agreement | DHC | DHC | Private Placement | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of shares sold (in shares) | shares | 10,268,158 | |||||
Issuance of common stock | 75,000 | |||||
Senior Housing Properties Trust Transaction Agreement | DHC Shareholders | DHC | Private Placement | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of shares sold (in shares) | shares | 16,118,849 | |||||
Other Services Provided to Residents at Managed Communities | DHC | ||||||
Operating Leased Assets [Line Items] | ||||||
Related party transaction, rehabilitation service revenue | $ 9,177 | $ 25,687 | ||||
Senior Living Communities | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of living units in properties operated | 120 | 20,105 | 244 | |||
Number of properties managed | community | 121 | |||||
Number of properties operated | property | 141 | |||||
Senior Living Communities | DHC | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of properties managed | community | 228 | |||||
Senior Living Communities | DHC | Management Fees | ||||||
Operating Leased Assets [Line Items] | ||||||
Revenues | $ 3,615 | $ 2,467 | ||||
Senior Living Communities | DHC | Management Fees | D & Yonkers LLC | ||||||
Operating Leased Assets [Line Items] | ||||||
Revenues | 407 | $ 485 | ||||
Senior Living Communities | DHC | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of communities In real estate property closed | community | 1 | |||||
Number of communities sold | community | 9 | |||||
Additional senior living communities | living_unit | 7 | |||||
Number of buildings closed | building | 1 | |||||
Operating lease expense | $ 1,487 | $ 1,561 | ||||
Senior Living Communities | DHC | Management Fees | ||||||
Operating Leased Assets [Line Items] | ||||||
Revenues | $ 2,685 | |||||
Senior Living Communities | DHC | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of properties operated | community | 244 | |||||
Number of real estate properties closed | community | 1 | |||||
Senior Living Communities | DHC | Forecast | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of units in real estate property closed | living_unit | 100 | |||||
Senior Living Communities | DHC | Strategic Plan | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of real estate properties transitioned | community | 107 | |||||
Management agreement, percentage of communities allowed for termination | 10.00% | 20.00% | ||||
Management agreement, percentage of EBITDA | 80.00% | 90.00% | ||||
Number of units in real estate properties transitioned | living_unit | 7,400 | |||||
Senior Living Communities | DHC | Strategic Plan | Forecast | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of real estate properties closed | community | 1 | |||||
Senior Living Communities | Senior Housing Properties Trust Transaction Agreement | DHC | ||||||
Operating Leased Assets [Line Items] | ||||||
Transaction costs | $ 1,448 | |||||
Senior Living Communities | Senior Housing Properties Trust Transaction Agreement | DHC | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of leases | lease | 5 | |||||
Residential Communities | DHC | Residential management fees | ||||||
Operating Leased Assets [Line Items] | ||||||
Revenues | $ 12,693 | 23,378 | ||||
SNF | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of units in real estate property closed | facility | 1,532 | |||||
SNF | Strategic Plan | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of units in real estate property closed | living_unit | 1,532 | |||||
SNF | Management Fees | ||||||
Operating Leased Assets [Line Items] | ||||||
Revenues | $ 1,865 | $ 5,936 | ||||
SNF | DHC | Strategic Plan | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of real estate properties transitioned | community | 108 | |||||
Continuing Care Retirement Communities | Forecast | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of units in real estate property closed | living_unit | 106 | |||||
Number of properties operated | community | 1 | |||||
Continuing Care Retirement Communities | DHC | Strategic Plan | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of properties operated | community | 27 | |||||
Continuing Care Retirement Communities | DHC | Strategic Plan | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of real estate properties closed | living_unit | 1,500 |
Senior Living Communities Lea_2
Senior Living Communities Leased from PEAK - Narrative (Details) $ in Thousands | Sep. 30, 2021USD ($)community | Dec. 31, 2021USD ($)living_unit | Dec. 31, 2020USD ($) | Jun. 09, 2021living_unit | Jun. 03, 2021communityliving_unit | Apr. 04, 2021community | Jan. 01, 2020community |
Operating Leased Assets [Line Items] | |||||||
Loss on termination of lease | $ 3,278 | $ 22,899 | |||||
Operating lease right-of-use assets | 9,197 | 18,030 | |||||
Property and equipment, net | 159,843 | 159,251 | |||||
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% | ||||||
Revenues | $ 934,593 | 1,163,742 | |||||
Senior Living Communities | |||||||
Operating Leased Assets [Line Items] | |||||||
Number of communities operated | community | 3 | ||||||
Number of living units in properties operated | 20,105 | 120 | 244 | ||||
Senior Living Communities | PEAK | |||||||
Operating Leased Assets [Line Items] | |||||||
Number of living units in properties operated | living_unit | 152 | ||||||
Revenues | $ 4,409 | 6,935 | |||||
Operating lease expense | 1,622 | 2,156 | |||||
Residential | PEAK | |||||||
Operating Leased Assets [Line Items] | |||||||
Revenues | 4,409 | $ 6,935 | |||||
PEAK Inc | |||||||
Operating Leased Assets [Line Items] | |||||||
Number of communities operated | community | 1 | ||||||
Loss on termination of lease | 3,278 | ||||||
Loss on termination of lease, termination fee | $ 3,100 | ||||||
Loss on termination of lease, other obligation fee | 548 | ||||||
Loss on termination of lease, legal transaction cost | 37 | ||||||
Operating lease right-of-use assets | 16,055 | ||||||
Lease Liability | 17,636 | ||||||
Proceeds from insurance settlement | $ 1,500 | ||||||
PEAK Inc | Leasehold Improvements and Other Fixed Assets | |||||||
Operating Leased Assets [Line Items] | |||||||
Property and equipment, net | $ 1,174 | ||||||
PEAK Inc | Senior Living Communities | |||||||
Operating Leased Assets [Line Items] | |||||||
Number of communities operated | community | 4 | 4 | |||||
Number of communities transferred | community | 3 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Shareholders' Equity | |||
Weighted average amortization period stock based compensation | 2 years 6 months | ||
DHC | Senior Housing Properties Trust Transaction Agreement | Private Placement | |||
Shareholders' Equity | |||
Additional consideration from share issuances | $ 75,000 | ||
DHC | |||
Shareholders' Equity | |||
Additional consideration from share issuances | $ 23,453 | ||
DHC | DHC | Senior Housing Properties Trust Transaction Agreement | Private Placement | |||
Shareholders' Equity | |||
Number of shares sold (in shares) | 10,268,158 | ||
Additional consideration from share issuances | $ 75,000 | ||
DHC Shareholders | DHC | Senior Housing Properties Trust Transaction Agreement | Private Placement | |||
Shareholders' Equity | |||
Number of shares sold (in shares) | 16,118,849 | ||
Share Award Plans | |||
Shareholders' Equity | |||
Unvested common shares (in shares) | 875,248 | 149,638 | |
Share based compensation | $ 1,484 | $ 513 | |
Estimated future stock based compensation expense | $ 2,964 | ||
Remaining common shares available for issuance (in shares) | 1,392,470 | ||
Share Award Plans | Officers and employees | |||
Shareholders' Equity | |||
Shares acquired (in shares) | 70,818 | 7,912 | |
Directors, officers and others | |||
Shareholders' Equity | |||
Common shares issued (in shares) | 1,084,600 | 155,150 | |
Aggregate market value of shares issued | $ 3,639 | $ 1,073 | |
Weighted average share price (in dollars per share) | $ 3.36 | $ 6.92 | |
Officers and employees | Share-based Payment Arrangement, Tranche One | |||
Shareholders' Equity | |||
Award vesting percentage | 20.00% | ||
Officers and employees | Share-based Payment Arrangement, Tranche Two | |||
Shareholders' Equity | |||
Award vesting percentage | 20.00% | ||
Officers and employees | Share-based Payment Arrangement, Tranche Three | |||
Shareholders' Equity | |||
Award vesting percentage | 20.00% | ||
Officers and employees | Share-based Compensation Award, Tranche Four | |||
Shareholders' Equity | |||
Award vesting percentage | 20.00% | ||
Officers and employees | Share-based Compensation Award, Tranche Five | |||
Shareholders' Equity | |||
Award vesting percentage | 20.00% | ||
Officers and employees | Share Award Plans | |||
Shareholders' Equity | |||
Aggregate acquired price | $ 214 | $ 60 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | May 12, 2021USD ($) | Dec. 31, 2021USD ($)lawsuit |
Loss Contingencies [Line Items] | ||
Litigation settlement expense | $ 3,062 | |
Lefevre V. Five Star Quality Care, Inc | ||
Loss Contingencies [Line Items] | ||
Number of lawsuits | lawsuit | 2 | |
Litigation settlement expense | 2,400 | |
Lefevre V. Five Star Quality Care, Inc | DHC | ||
Loss Contingencies [Line Items] | ||
Litigation settlement expense | $ 662 | |
Office of the Inspector General | ||
Loss Contingencies [Line Items] | ||
Litigation settlement expense | $ 209 |
Business Management Agreement_2
Business Management Agreement with RMR LLC - Narrative (Details) - RMR LLC - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Management Agreement [Line Items] | ||
Business management fee (as a percent) | 0.60% | |
Business management fees | $ 6,039 | $ 8,230 |
Renewal term | 1 year | |
RMR LLC notice period for termination of agreement | 120 days | |
Company notice period for termination of agreement | 60 days | |
Termination fee (as a percent of base management fee) | 287.50% | |
Management agreement, termination fee, base management fee period | 24 months | |
Reimbursable expenses, internal audit costs | $ 255 | $ 281 |
Transition service period | 120 days |
Related Person Transactions - N
Related Person Transactions - Narrative (Details) - USD ($) $ in Thousands | Oct. 02, 2016 | Jan. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Related person transactions | ||||||
Accrued expenses and other current liabilities | $ 31,488 | $ 42,208 | ||||
Cash payments for severance | $ 16,266 | |||||
DHC | ||||||
Related person transactions | ||||||
Minimum percentage of ownership interest beyond which consent of related party required | 9.80% | |||||
Minimum percentage of ownership interest of voting stock above which the option to cancel all the lease rights exist | 9.80% | |||||
RMR LLC Employees | ||||||
Related person transactions | ||||||
Share awards issued (in shares) | 164,600 | 21,150 | ||||
Value of share awards issued | $ 512 | $ 166 | ||||
RMR LLC Employees | Share-based Compensation Award, Tranche Five | ||||||
Related person transactions | ||||||
Award vesting percentage | 20.00% | |||||
ABP Trust | ||||||
Related person transactions | ||||||
Standstill and lock-up agreement period | 10 years | |||||
Severance, Cash Payment | Chief Executive Officer And Chief Financial Officer | Subsequent Event | ||||||
Related person transactions | ||||||
Cash payments for severance | $ 404 | |||||
ABP Trust | DHC | ||||||
Related person transactions | ||||||
Number of shares owned (in shares) | 2,017,615 | |||||
Percentage of outstanding common shares owned | 6.20% | |||||
DHC | ||||||
Related person transactions | ||||||
Accrued expenses and other current liabilities | $ 20,345 | $ 30,090 | ||||
DHC | DHC | ||||||
Related person transactions | ||||||
Number of shares owned (in shares) | 10,691,658 | |||||
Percentage of outstanding common shares owned | 32.70% | |||||
Property insurance premium | $ 590 | $ 500 |
Self-Insurance Reserves (Detail
Self-Insurance Reserves (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Loss Contingencies [Line Items] | ||
Self insurance reserve | $ 73,174 | $ 78,992 |
Accrued self-insurance obligations | 34,744 | 37,420 |
Estimated amount receivable from reinsurance program | 2,686 | $ 3,809 |
Standby Letters of Credit | Workers’ compensation letter of credit collateral | ||
Loss Contingencies [Line Items] | ||
Guarantor obligations maximum exposure undiscounted | 26,850 | |
Standby Letters of Credit | Workers’ compensation letter of credit collateral | Cash Equivalents | ||
Loss Contingencies [Line Items] | ||
Collateral securing workers' compensation insurance program | 22,899 | |
Standby Letters of Credit | Workers’ compensation letter of credit collateral | Debt and Equity Investments | ||
Loss Contingencies [Line Items] | ||
Collateral securing workers' compensation insurance program | $ 4,574 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Benefit Plans | ||
Expenses for plans including contributions | $ 529 | $ 257 |
Accrued compensation and benefits | 34,295 | 70,543 |
Nonqualified Plan | ||
Employee Benefit Plans | ||
Accrued compensation and benefits | 465 | 302 |
Senior Living, Wages and Benefits | ||
Employee Benefit Plans | ||
Expenses for plans including contributions | 265 | 61 |
General and Administrative Expenses | ||
Employee Benefit Plans | ||
Expenses for plans including contributions | $ 264 | $ 196 |
COVID-19 Pandemic - Narrative (
COVID-19 Pandemic - Narrative (Details) - COVID-19 - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Unusual or Infrequent Item, or Both [Line Items] | |||
Payments for protective equipment | $ 6,082 | $ 9,701 | |
Accrued payroll taxes | 27,593 | ||
Employer payroll taxes | $ 22,194 | 22,194 | |
Senior Living | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Payments for protective equipment | $ 3,278 | $ 5,132 |
COVID-19 Pandemic - Funds Recei
COVID-19 Pandemic - Funds Received and Income Recognized (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Unusual or Infrequent Item, or Both [Line Items] | ||
Received | $ 1,562 | |
Recognized | $ 7,795 | 3,435 |
COVID-19 | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Received | 7,795 | 3,435 |
Recognized | 7,795 | 3,435 |
Phase 1 | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Received | 0 | 1,720 |
Recognized | 0 | 1,720 |
Phase 2 | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Received | 0 | |
Recognized | 0 | 1,562 |
Phase 3 | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Received | 7,724 | 0 |
Recognized | 7,724 | 0 |
State Programs | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Received | 71 | 88 |
Recognized | 71 | 88 |
Testing Equipment/Test kits | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Received | 0 | 65 |
Recognized | $ 0 | $ 65 |
Restructuring Expense - Narrati
Restructuring Expense - Narrative (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2021USD ($)property | Dec. 31, 2020USD ($)community | Dec. 31, 2021community | Dec. 31, 2021living_unit | Dec. 31, 2021facility | Jun. 09, 2021living_unitcommunity | |
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring expenses | $ 19,196 | $ 1,448 | ||||
Revenues | 934,593 | 1,163,742 | ||||
Other reimbursed expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Revenues | 31,605 | $ 25,648 | ||||
Strategic Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring expenses | 19,196 | |||||
Strategic Plan | Employee Severance And Retention | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring expenses | 16,191 | |||||
Strategic Plan | Transaction expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring expenses | 3,005 | |||||
Strategic Plan | Retention bonuses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring expenses | 7,100 | |||||
Strategic Plan | DHC | Other reimbursed expenses | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Revenues | $ 13,311 | |||||
SNF | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of units in real estate property closed | facility | 1,532 | |||||
SNF | Strategic Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of units in real estate property closed | living_unit | 1,532 | |||||
SNF | Strategic Plan | DHC | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of real estate properties transitioned | community | 108 | |||||
Continuing Care Retirement Communities | Strategic Plan | DHC | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of properties operated | community | 27 | |||||
Continuing Care Retirement Communities | Strategic Plan | DHC | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of real estate properties closed | living_unit | 1,500 | |||||
Ageility Inpatient Rehabilitation | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of properties operated | community | 37 | |||||
Ageility Inpatient Rehabilitation | DHC | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of real estate properties closed | property | 10 | |||||
Ageility Inpatient Rehabilitation | Strategic Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of real estate properties closed | 17 | 27 | ||||
Senior Living Communities | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of properties operated | property | 141 | |||||
Senior Living Communities | DHC | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of properties operated | community | 244 | |||||
Number of real estate properties closed | community | 1 | |||||
Senior Living Communities | Strategic Plan | DHC | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of real estate properties transitioned | community | 107 | |||||
Number of units in real estate properties transitioned | living_unit | 7,400 |
Restructuring Expense - Summary
Restructuring Expense - Summary of Liabilities and Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | $ 0 | |
Expenses Incurred | 19,196 | $ 1,448 |
Payments | 16,266 | |
Ending Balance | 2,930 | 0 |
Strategic Plan | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 0 | |
Expenses Incurred | 19,196 | |
Payments | 16,266 | |
Ending Balance | 2,930 | 0 |
Strategic Plan | Corporate and Other | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 0 | |
Expenses Incurred | 4,452 | |
Payments | 4,063 | |
Ending Balance | 389 | 0 |
Strategic Plan | Residential | Operating Segments | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 0 | |
Expenses Incurred | 13,311 | |
Payments | 10,770 | |
Ending Balance | 2,541 | 0 |
Strategic Plan | Lifestyle Services | Operating Segments | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 0 | |
Expenses Incurred | 1,433 | |
Payments | 1,433 | |
Ending Balance | 0 | 0 |
Strategic Plan | Retention bonuses | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 0 | |
Expenses Incurred | 7,100 | |
Payments | 6,095 | |
Ending Balance | 1,005 | 0 |
Strategic Plan | Severance, benefits and transition expenses | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 0 | |
Expenses Incurred | 9,091 | |
Payments | 7,654 | |
Ending Balance | 1,437 | 0 |
Strategic Plan | Transaction expenses | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 0 | |
Expenses Incurred | 3,005 | |
Payments | 2,517 | |
Ending Balance | $ 488 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jan. 27, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Subsequent Event [Line Items] | |||
Unamortized gross balance of deferred financing costs | $ 75,000 | $ 288,000 | |
Subsequent Event | Senior Secured Term Loan | Secured Debt | |||
Subsequent Event [Line Items] | |||
Maximum borrowing capacity | $ 95,000,000 | ||
Proceeds from loan | 63,000,000 | ||
Unamortized gross balance of deferred financing costs | $ 3,200,000 |