Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 01, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-32641 | |
Entity Registrant Name | BROOKDALE SENIOR LIVING INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-3068069 | |
Entity Address, Address Line One | 111 Westwood Place, | |
Entity Address, Address Line Two | Suite 400, | |
Entity Address, City or Town | Brentwood, | |
Entity Address, State or Province | TN | |
Entity Address, Postal Zip Code | 37027 | |
City Area Code | 615 | |
Local Phone Number | 221-2250 | |
Title of 12(b) Security | Common Stock, $0.01 Par Value Per Share | |
Entity Trading Symbol | BKD | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 185,594,591 | |
Entity Central Index Key | 0001332349 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 241,391 | $ 398,267 |
Marketable securities | 49,790 | 14,855 |
Restricted cash | 33,305 | 27,683 |
Accounts receivable, net | 140,661 | 133,905 |
Assets held for sale | 60,404 | 93,117 |
Prepaid expenses and other current assets, net | 102,949 | 106,189 |
Total current assets | 628,500 | 774,016 |
Property, plant and equipment and leasehold intangibles, net | 5,185,681 | 5,275,427 |
Operating lease right-of-use assets | 1,221,578 | 0 |
Restricted cash | 40,663 | 24,268 |
Investment in unconsolidated ventures | 23,211 | 27,528 |
Goodwill | 154,131 | 154,131 |
Other intangible assets, net | 42,776 | 51,472 |
Other assets, net | 77,663 | 160,418 |
Total assets | 7,374,203 | 6,467,260 |
Current liabilities | ||
Current portion of long-term debt | 343,615 | 294,426 |
Current portion of financing lease obligations | 62,839 | |
Current portion of financing lease obligations | 23,135 | |
Current portion of operating lease obligations | 188,635 | 0 |
Trade accounts payable | 106,109 | 95,049 |
Accrued expenses | 275,828 | 298,227 |
Refundable fees and deferred revenue | 81,034 | 62,494 |
Total current liabilities | 1,058,060 | 773,331 |
Long-term debt, less current portion | 3,228,606 | 3,345,754 |
Financing lease obligations, less current portion | 795,198 | |
Financing lease obligations, less current portion | 851,341 | |
Operating lease obligations, less current portion | 1,319,758 | 0 |
Deferred liabilities | 7,066 | 262,761 |
Deferred tax liability | 16,834 | 18,371 |
Other liabilities | 154,885 | 197,289 |
Total liabilities | 6,580,407 | 5,448,847 |
Preferred stock, $0.01 par value, 50,000,000 shares authorized at September 30, 2019 and December 31, 2018; no shares issued and outstanding | 0 | 0 |
Common stock, $0.01 par value, 400,000,000 shares authorized at September 30, 2019 and December 31, 2018; 199,743,898 and 196,815,254 shares issued and 193,073,421 and 192,356,051 shares outstanding (including 7,490,129 and 5,756,435 unvested restricted shares), respectively | 1,997 | 1,968 |
Additional paid-in-capital | 4,167,146 | 4,151,147 |
Treasury stock, at cost; 6,670,477 and 4,459,203 shares at September 30, 2019 and December 31, 2018, respectively | (79,097) | (64,940) |
Accumulated deficit | (3,301,680) | (3,069,272) |
Total Brookdale Senior Living Inc. stockholders' equity | 788,366 | 1,018,903 |
Noncontrolling interest | 5,430 | (490) |
Total equity | 793,796 | 1,018,413 |
Total liabilities and equity | $ 7,374,203 | $ 6,467,260 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Equity, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 199,743,898 | 196,815,254 |
Common stock, shares outstanding (in shares) | 193,073,421 | 192,356,051 |
Treasury stock, shares (in shares) | 6,670,477 | 4,459,203 |
Unvested Restricted Stock | ||
Equity, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Common stock, shares outstanding (in shares) | 7,490,129 | 5,756,435 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | ||||
Revenue | $ 1,008,949 | $ 1,120,062 | $ 3,070,450 | $ 3,462,496 |
Expense | ||||
General and administrative expense (including non-cash stock-based compensation expense of $5,929, $6,035, $18,315, and $20,710, respectively) | 56,409 | 58,796 | 170,296 | 203,138 |
Facility operating lease expense | 67,253 | 70,392 | 203,610 | 232,752 |
Depreciation and amortization | 93,550 | 110,980 | 284,462 | 341,351 |
Goodwill and asset impairment | 2,094 | 5,500 | 6,254 | 451,966 |
Loss (gain) on facility lease termination and modification, net | 0 | 2,337 | 2,006 | 148,804 |
Total operating expense | 1,029,171 | 1,116,436 | 3,071,800 | 4,010,290 |
Income (loss) from operations | (20,222) | 3,626 | (1,350) | (547,794) |
Interest income | 2,162 | 1,654 | 8,059 | 7,578 |
Interest expense: | ||||
Debt | (44,344) | (46,891) | (135,180) | (141,585) |
Financing lease obligations | (16,567) | (20,896) | (49,959) | (66,216) |
Amortization of deferred financing costs and debt discount | (1,130) | (829) | (2,920) | (7,113) |
Change in fair value of derivatives | (37) | (10) | (212) | (153) |
Debt modification and extinguishment costs | (2,455) | (33) | (5,194) | (77) |
Equity in earnings (loss) of unconsolidated ventures | (2,057) | (1,340) | (3,574) | (6,907) |
Gain (loss) on sale of assets, net | 579 | 9,833 | 2,723 | 76,586 |
Other non-operating income (loss) | 3,763 | (17) | 9,950 | 8,074 |
Income (loss) before income taxes | (80,308) | (54,903) | (177,657) | (677,607) |
Benefit (provision) for income taxes | 1,800 | 17,763 | 488 | 17,724 |
Net income (loss) | (78,508) | (37,140) | (177,169) | (659,883) |
Net (income) loss attributable to noncontrolling interest | 50 | 19 | 646 | 86 |
Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders | $ (78,458) | $ (37,121) | $ (176,523) | $ (659,797) |
Basic and diluted net income (loss) per share attributable to Brookdale Senior Living Inc. common stockholders (in dollars per share) | $ (0.42) | $ (0.20) | $ (0.95) | $ (3.52) |
Weighted average shares used in computing basic and diluted net income (loss) per share (in shares) | 185,516 | 187,675 | 186,130 | 187,383 |
Resident fees | ||||
Revenue | ||||
Revenue | $ 801,237 | $ 840,179 | $ 2,412,579 | $ 2,642,414 |
Management fees | ||||
Revenue | ||||
Revenue | 13,564 | 18,528 | 44,756 | 54,280 |
Reimbursed costs incurred on behalf of managed communities | ||||
Revenue | ||||
Revenue | 194,148 | 261,355 | 613,115 | 765,802 |
Expense | ||||
Costs of services | 194,148 | 261,355 | 613,115 | 765,802 |
Facility operating expense | ||||
Expense | ||||
Costs of services | $ 615,717 | $ 607,076 | $ 1,792,057 | $ 1,866,477 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Depreciation and amortization | $ 86,213 | $ 101,527 | $ 261,110 | $ 310,011 |
Non-cash stock-based compensation expense | $ 5,929 | $ 6,035 | $ 18,315 | $ 20,710 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In- Capital | Treasury Stock | Accumulated Deficit | Noncontrolling Interest |
Balances at beginning of period at Dec. 31, 2017 | $ 1,530,291 | $ 1,913 | $ 4,126,549 | $ (56,440) | $ (2,541,294) | $ (437) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (659,883) | (659,797) | (86) | |||
Compensation expense related to restricted stock grants | 20,710 | |||||
Issuance of common stock under Associate Stock Purchase Plan | 1 | 1,146 | ||||
Restricted stock, net | 29 | (29) | ||||
Shares withheld for employee taxes | (4) | (2,840) | ||||
Purchase of treasury stock | 0 | |||||
Noncontrolling interest contribution | 0 | |||||
Other, net | 147 | 280 | ||||
Balances at end of period at Sep. 30, 2018 | 889,848 | $ 1,939 | 4,145,683 | (56,440) | (3,200,811) | (523) |
Balances at beginning of period (in shares) at Dec. 31, 2017 | 191,276,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under Associate Stock Purchase Plan (in shares) | 153,000 | |||||
Restricted stock, net (in shares) | 2,910,000 | |||||
Shares withheld for employee taxes (in shares) | (410,000) | |||||
Purchase of treasury stock (in shares) | 0 | |||||
Balances at end of period (in shares) at Sep. 30, 2018 | 193,929,000 | |||||
Balances at beginning of period at Jun. 30, 2018 | 920,657 | $ 1,938 | 4,139,353 | (56,440) | (3,163,690) | (504) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (37,140) | (37,121) | (19) | |||
Compensation expense related to restricted stock grants | 6,035 | |||||
Issuance of common stock under Associate Stock Purchase Plan | 0 | 377 | ||||
Restricted stock, net | 1 | (1) | ||||
Shares withheld for employee taxes | 0 | (129) | ||||
Purchase of treasury stock | 0 | |||||
Noncontrolling interest contribution | 0 | |||||
Other, net | 48 | 0 | ||||
Balances at end of period at Sep. 30, 2018 | 889,848 | $ 1,939 | 4,145,683 | (56,440) | (3,200,811) | (523) |
Balances at beginning of period (in shares) at Jun. 30, 2018 | 193,798,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under Associate Stock Purchase Plan (in shares) | 42,000 | |||||
Restricted stock, net (in shares) | 105,000 | |||||
Shares withheld for employee taxes (in shares) | (16,000) | |||||
Purchase of treasury stock (in shares) | 0 | |||||
Balances at end of period (in shares) at Sep. 30, 2018 | 193,929,000 | |||||
Balances at beginning of period at Dec. 31, 2018 | 1,018,413 | $ 1,968 | 4,151,147 | (64,940) | (3,069,272) | (490) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (177,169) | (176,523) | (646) | |||
Compensation expense related to restricted stock grants | 18,315 | |||||
Issuance of common stock under Associate Stock Purchase Plan | 2 | 878 | ||||
Restricted stock, net | 31 | (31) | ||||
Shares withheld for employee taxes | (4) | (3,238) | ||||
Purchase of treasury stock | (14,157) | |||||
Noncontrolling interest contribution | 6,566 | |||||
Other, net | 75 | 0 | ||||
Balances at end of period at Sep. 30, 2019 | $ 793,796 | $ 1,997 | 4,167,146 | (79,097) | (3,301,680) | 5,430 |
Balances at beginning of period (in shares) at Dec. 31, 2018 | 192,356,051 | 192,356,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under Associate Stock Purchase Plan (in shares) | 137,000 | |||||
Restricted stock, net (in shares) | 3,258,000 | |||||
Shares withheld for employee taxes (in shares) | (467,000) | |||||
Purchase of treasury stock (in shares) | (2,211,000) | |||||
Balances at end of period (in shares) at Sep. 30, 2019 | 193,073,421 | 193,073,000 | ||||
Balances at beginning of period at Jun. 30, 2019 | $ 866,204 | $ 1,998 | 4,161,045 | (79,097) | (3,223,222) | 5,480 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (78,508) | (78,458) | (50) | |||
Compensation expense related to restricted stock grants | 5,929 | |||||
Issuance of common stock under Associate Stock Purchase Plan | 0 | 281 | ||||
Restricted stock, net | (1) | 1 | ||||
Shares withheld for employee taxes | 0 | (137) | ||||
Purchase of treasury stock | 0 | |||||
Noncontrolling interest contribution | 0 | |||||
Other, net | 27 | 0 | ||||
Balances at end of period at Sep. 30, 2019 | $ 793,796 | $ 1,997 | $ 4,167,146 | $ (79,097) | $ (3,301,680) | $ 5,430 |
Balances at beginning of period (in shares) at Jun. 30, 2019 | 193,111,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under Associate Stock Purchase Plan (in shares) | 41,000 | |||||
Restricted stock, net (in shares) | (62,000) | |||||
Shares withheld for employee taxes (in shares) | (17,000) | |||||
Purchase of treasury stock (in shares) | 0 | |||||
Balances at end of period (in shares) at Sep. 30, 2019 | 193,073,421 | 193,073,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows from Operating Activities | ||
Net income (loss) | $ (177,169) | $ (659,883) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Debt modification and extinguishment costs | 5,194 | 77 |
Depreciation and amortization, net | 287,382 | 348,464 |
Goodwill and asset impairment | 6,254 | 451,966 |
Equity in (earnings) loss of unconsolidated ventures | 3,574 | 6,907 |
Distributions from unconsolidated ventures from cumulative share of net earnings | 2,388 | 2,159 |
Amortization of deferred gain | 0 | (3,269) |
Amortization of entrance fees | (1,172) | (1,220) |
Proceeds from deferred entrance fee revenue | 2,902 | 2,507 |
Deferred income tax (benefit) provision | (1,216) | (19,180) |
Operating lease expense adjustment | (13,626) | (14,656) |
Change in fair value of derivatives | 212 | 153 |
Loss (gain) on sale of assets, net | (2,723) | (76,586) |
Loss (gain) on facility lease termination and modification, net | 2,006 | 135,760 |
Non-cash stock-based compensation expense | 18,315 | 20,710 |
Non-cash interest expense on financing lease obligations | 0 | 9,151 |
Non-cash management contract termination gain | (640) | (5,649) |
Other | (7,173) | (154) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (6,756) | (1,127) |
Prepaid expenses and other assets, net | 50,387 | 28,118 |
Prepaid insurance premiums financed with notes payable | (5,875) | (6,244) |
Trade accounts payable and accrued expenses | (21,970) | (9,661) |
Refundable fees and deferred revenue | (24,007) | (4,239) |
Operating lease assets and liabilities for lessor capital expenditure reimbursements | 12,043 | 0 |
Operating lease assets and liabilities for lease termination | 0 | (33,596) |
Net cash provided by (used in) operating activities | 128,330 | 170,508 |
Cash Flows from Investing Activities | ||
Change in lease security deposits and lease acquisition deposits, net | (430) | (664) |
Purchase of marketable securities | (137,786) | 0 |
Sale of marketable securities | 104,000 | 293,273 |
Capital expenditures, net of related payables | (206,385) | (169,349) |
Acquisition of assets, net of related payables and cash received | (453) | (271,771) |
Investment in unconsolidated ventures | (4,294) | (8,946) |
Distributions received from unconsolidated ventures | 7,454 | 10,782 |
Proceeds from sale of assets, net | 53,430 | 131,912 |
Proceeds from notes receivable | 34,109 | 1,580 |
Property insurance proceeds | 0 | 156 |
Net cash provided by (used in) investing activities | (150,355) | (13,027) |
Cash Flows from Financing Activities | ||
Proceeds from debt | 318,491 | 279,919 |
Repayment of debt and financing lease obligations | (404,152) | (501,946) |
Proceeds from line of credit | 0 | 200,000 |
Repayment of line of credit | 0 | (200,000) |
Purchase of treasury stock, net of related payables | (18,401) | 0 |
Payment of financing costs, net of related payables | (6,357) | (3,341) |
Proceeds from refundable entrance fees, net of refunds | 0 | (316) |
Payments for lease termination | 0 | (12,548) |
Payments of employee taxes for withheld shares | (3,242) | (2,844) |
Other | 827 | 1,147 |
Net cash provided by (used in) financing activities | (112,834) | (239,929) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (134,859) | (82,448) |
Cash, cash equivalents, and restricted cash at beginning of period | 450,218 | 282,546 |
Cash, cash equivalents, and restricted cash at end of period | $ 315,359 | $ 200,098 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Brookdale Senior Living Inc. ("Brookdale" or the "Company") is an operator of senior living communities throughout the United States. The Company is committed to providing senior living solutions primarily within properties that are designed, purpose-built, and operated to provide quality service, care, and living accommodations for residents. The Company operates and manages independent living, assisted living, memory care, and continuing care retirement communities ("CCRCs"). The Company also offers a range of home health, hospice, and outpatient therapy services to residents of many of its communities and to seniors living outside of its communities. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q. In the opinion of management, these financial statements include all adjustments, which are of a normal and recurring nature, necessary to present fairly the financial position, results of operations, and cash flows of the Company for all periods presented. Certain information and footnote disclosures included in annual financial statements have been condensed or omitted. The Company believes that the disclosures included are adequate and provide a fair presentation of interim period results. Interim financial statements are not necessarily indicative of the financial position or operating results for an entire year. These interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 14, 2019. Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company's condensed consolidated financial position or results of operations. Except for the changes for the impact of the recently adopted accounting pronouncements discussed in this Note, the Company has consistently applied its accounting policies to all periods presented in these condensed consolidated financial statements. Principles of Consolidation The condensed consolidated financial statements include the accounts of Brookdale and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Investments in affiliated companies that the Company does not control, but has the ability to exercise significant influence over governance and operations, are accounted for by the equity method. The ownership interest of consolidated entities not wholly-owned by the Company are presented as noncontrolling interests in the accompanying condensed consolidated financial statements. Noncontrolling interest represents the share of consolidated entities owned by third parties. Noncontrolling interest is adjusted for the noncontrolling holder's share of additional contributions, distributions, and the proportionate share of the net income or loss of each respective entity. Revenue Recognition Resident Fees Resident fee revenue is reported at the amount that reflects the consideration the Company expects to receive in exchange for the services provided. These amounts are due from residents or third-party payors and include variable consideration for retroactive adjustments, if any, under reimbursement programs. Performance obligations are determined based on the nature of the services provided. Resident fee revenue is recognized as performance obligations are satisfied. Under the Company's senior living residency agreements, which are generally for a contractual term of 30 days to one year, the Company provides senior living services to residents for a stated daily or monthly fee. The Company has elected the lessor practical expedient within Accounting Standards Codification ("ASC") 842, Leases ("ASC 842") and recognizes, measures, presents, and discloses the revenue for services under the Company's senior living residency agreements based upon the predominant component, either the lease or nonlease component, of the contracts. The Company has determined that the services included under the Company’s independent living, assisted living, and memory care residency agreements have the same timing and pattern of transfer. The Company recognizes revenue under ASC 606, Revenue Recognition from Contracts with Customers ("ASC 606") for its independent living, assisted living, and memory care residency agreements for which it has estimated that the nonlease components of such residency agreements are the predominant component of the contract. The Company enters into contracts to provide home health, hospice, and outpatient therapy services. Each service provided under the contract is capable of being distinct, and thus, the services are considered individual and separate performance obligations. The performance obligations are satisfied and revenue is recognized as services are provided. The Company receives payment for services under various third-party payor programs which include Medicare, Medicaid, and other third-party payors. Settlements with third-party payors for retroactive adjustments due to audits, reviews, or investigations are included in the determination of the estimated transaction price for providing services. The Company estimates the transaction price based on the terms of the contract with the payor, correspondence with the payor and historical payment trends, and retroactive adjustments that differ from the Company's estimates are recognized in the period when final settlements are determined. Management Services The Company manages certain communities under contracts which provide periodic management fee payments to the Company. Management fees are generally determined by an agreed upon percentage of gross revenues (as defined in the management agreement). Certain management contracts also provide for an annual incentive fee to be paid to the Company upon achievement of certain metrics identified in the contract. The Company recognizes revenue for community management services in accordance with the provisions of ASC 606. Although there are various management and operational activities performed by the Company under the contracts, the Company has determined that all community operations management activities are a single performance obligation, which is satisfied over time as the services are rendered. The Company estimates the amount of incentive fee revenue expected to be earned, if any, during the annual contract period and revenue is recognized as services are provided. The Company’s estimate of the transaction price for management services also includes the amount of reimbursement due from the owners of the communities for services provided and related costs incurred. Such revenue is included in "reimbursed costs incurred on behalf of managed communities" on the condensed consolidated statements of operations. The related costs are included in "costs incurred on behalf of managed communities" on the condensed consolidated statements of operations. Gain (Loss) on Sale of Assets The Company regularly enters into real estate transactions which may include the disposal of certain communities, including the associated real estate. The Company recognizes income from real estate sales under ASC 610-20, Other Income - Gains and Losses from Derecognition of Nonfinancial Assets ("ASC 610-20"). Under ASC 610-20, income is recognized when the transfer of control occurs and the Company applies the five-step model for recognition to determine the amount and timing of income to recognize for all real estate sales. The Company accounts for the sale of equity method investments under ASC 860, Transfers and Servicing ("ASC 860"). Under ASC 860, income is recognized when the transfer of control of the equity interest occurs and the Company has no continuing involvement with the transferred financial assets. Income Taxes Income taxes are accounted for under the asset and liability approach which requires recognition of deferred tax assets and liabilities for the differences between the financial reporting and tax basis of assets and liabilities. A valuation allowance reduces deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Fair Value of Financial Instruments ASC 820, Fair Value Measurement establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows: Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Cash and cash equivalents and restricted cash are reflected in the accompanying condensed consolidated balance sheets at amounts considered by management to reasonably approximate fair value due to the short maturity. Goodwill The Company tests goodwill for impairment annually as of October 1 or whenever indicators of impairment arise. Factors the Company considers important in its analysis of whether an indicator of impairment exists include a significant decline in the Company's stock price or market capitalization for a sustained period since the last testing date, significant underperformance relative to historical or projected future operating results and significant negative industry or economic trends. The Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. The quantitative goodwill impairment test is based upon a comparison of the estimated fair value of the reporting unit to which the goodwill has been assigned with the reporting unit's carrying value. The Company is not required to calculate the fair value of a reporting unit unless the Company determines, based on a qualitative assessment, that it is more likely than not that its fair value of a reporting unit is less than its carrying value. The fair values used in the quantitative goodwill impairment test are estimated using Level 3 inputs based upon discounted future cash flow projections for the reporting unit. These cash flow projections are based upon a number of estimates and assumptions such as revenue and expense growth rates, capitalization rates, and discount rates. The Company also considers market based measures such as earnings multiples in its analysis of estimated fair values of its reporting units. If the quantitative goodwill impairment test results in a reporting unit's carrying value exceeding its estimated fair value, an impairment charge will be recorded based on the difference. The impairment charge is limited to the amount of goodwill allocated to the reporting unit. Long-lived Asset Impairment Long-lived assets (including right-of-use assets) are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets held for use are assessed by a comparison of the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset, calculated utilizing the lowest level of identifiable cash flows. If estimated future undiscounted net cash flows are less than the carrying amount of the asset then the fair value of the asset is estimated. The impairment expense is determined by comparing the estimated fair value of the asset to its carrying value, with any amount in excess of fair value recognized as an expense in the current period. Undiscounted cash flow projections and estimates of fair value amounts are based on a number of assumptions such as revenue and expense growth rates, estimated holding periods and estimated capitalization rates (Level 3). Self-Insurance Liability Accruals The Company is subject to various legal proceedings and claims that arise in the ordinary course of its business. Although the Company maintains general liability and professional liability insurance policies for its owned, leased, and managed communities under a master insurance program, the Company's current policies provide for deductibles for each and every claim. As a result, the Company is, in effect, self-insured for claims that are less than the deductible amounts. In addition, the Company maintains a high deductible workers compensation program and a self-insured employee medical program. The Company reviews the adequacy of its accruals related to these liabilities on an ongoing basis, using historical claims, actuarial valuations, third-party administrator estimates, consultants, advice from legal counsel, and industry data, and adjusts accruals periodically. Estimated costs related to these self-insurance programs are accrued based on known claims and projected claims incurred but not yet reported. Subsequent changes in actual experience are monitored, and estimates are updated as information becomes available. Lease Accounting The following is the Company's lease accounting policy under ASC 842 subsequent to the adoption. Refer to Recently Adopted Accounting Pronouncements in this Note 2 for significant changes that resulted from the adoption effective January 1, 2019. The Company, as lessee, recognizes a right-of-use asset and a lease liability on the Company’s condensed consolidated balance sheet for its community, office, and equipment leases. As of the commencement date of a lease, a lease liability and corresponding right-of-use asset is established on the Company’s condensed consolidated balance sheet at the present value of future minimum lease payments. The Company's community leases generally contain fixed annual rent escalators or annual rent escalators based on an index, such as the consumer price index. The future minimum lease payments recognized on the condensed consolidated balance sheet include fixed payments (including in-substance fixed payments) and variable payments estimated utilizing the index or rate on the lease commencement date. The Company recognizes lease expense as incurred for additional variable payments. For the Company’s leases that do not contain an implicit rate, the Company utilizes its estimated incremental borrowing rate in determining the present value of lease payments based on information available at commencement of the lease, which reflects the fixed rate at which the Company could borrow a similar amount for the same term on a collateralized basis. Leases with an initial term of 12 months or less are not recorded on the Company’s condensed consolidated balance sheet and instead are recognized as lease expense as incurred. The Company, as lessee, makes a determination with respect to each of its community, office, and equipment leases as to whether each should be accounted for as an operating lease or financing lease in accordance with the provisions of ASC 842. The classification criteria is based on estimates regarding the fair value of the leased asset, minimum lease payments, effective cost of funds, the economic life of the asset, and certain other terms in the lease agreements. For operating leases, payments made under operating lease arrangements are accounted for in the Company's condensed consolidated statements of operations as operating lease expense for actual rent paid, generally plus or minus a straight-line adjustment for estimated minimum lease escalators if applicable. The right-of-use asset is generally reduced each period by an amount equal to the difference between the operating lease expense and the amount of expense on the lease liability utilizing the effective interest method. Subsequent to the impairment of an operating lease right-of-use asset, the Company recognizes operating lease expense consisting of the reduction of the right-of-use asset on a straight-line basis over the remaining lease term and the amount of expense on the lease liability utilizing the effective interest method. For financing leases, the Company recognizes interest expense on the lease liability utilizing the effective interest method. Additionally, the right-of-use asset is generally amortized to depreciation and amortization expense on a straight-line basis over the lease term unless the lease contains an option to purchase the underlying asset that the Company is reasonably certain to exercise in which case the asset is depreciated over the useful life of the underlying asset. For transactions in which an owned community is sold and leased back from the buyer (sale-leaseback transactions), the Company recognizes an asset sale and lease accounting is applied if the Company has transferred control of the community. For such transactions, the Company removes the transferred assets from the condensed consolidated balance sheet and a gain or loss on the sale is recognized for the difference between the carrying value of the asset and the transaction price for the sale transaction. For sale‑leaseback transactions in which the Company has not transferred control of the underlying asset, the Company does not recognize an asset sale or derecognize the underlying asset until control is transferred. For such transactions, the Company continues to depreciate the asset over its useful life. Additionally, the Company accounts for any amounts received as a financing lease liability and the Company recognizes interest expense on the financing lease liability utilizing the effective interest method with the interest expense limited to an amount that is not greater than the cash payments on the financing lease liability over the term of the lease. Refer to the Company’s revenue recognition policy for discussion of the accounting policy for residency agreements, which include the lease of an asset. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 amends the existing accounting principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ASU 2016-02 requires a lessee to recognize a right-of-use asset and a lease liability on the condensed consolidated balance sheet for most leases. Additionally, ASU 2016-02 makes targeted changes to lessor accounting, including changes to align certain aspects with the revenue recognition model, and requires enhanced disclosure of lease arrangements. In July 2018, the FASB issued ASU 2018-11, Leases, Targeted Improvements ("ASU 2018-11"). ASU 2018-11 provides entities with a transition method option to not restate comparative periods presented, but to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In addition, ASU 2018-11 provides entities with a practical expedient allowing lessors to not separate nonlease components from the associated lease components when certain criteria are met. The Company adopted these lease accounting standards effective January 1, 2019 and utilized the modified retrospective transition method with no adjustments to comparative periods presented. Additionally, the Company elected the package of practical expedients within ASU 2016-02 that allows an entity to not reassess, as of January 1, 2019, its prior conclusions on whether an existing contract contains a lease, lease classification for existing leases, and whether costs incurred for existing leases qualify as initial direct costs. The Company's adoption of ASU 2016-02 resulted in the recognition of operating lease liabilities of $1.6 billion and right-of-use assets of $1.3 billion on the condensed consolidated balance sheet for its existing community, office, and equipment operating leases based on the remaining present value of the minimum lease payments as of January 1, 2019. The future minimum rental payments recognized on the condensed consolidated balance sheet included fixed payments (including in-substance fixed payments) and variable payments estimated utilizing the index or rate as of January 1, 2019. Such right-of-use asset amounts were recognized based upon the amount of the recognized lease liabilities, adjusted for accrued lease payments, intangible assets, and the recognition of right-of-use asset impairments. As of December 31, 2018, the Company had a net liability of $231.4 million recognized on its condensed consolidated balance sheet for accrued lease payments and intangible assets for operating leases. Additionally, $58.1 million of previously unrecognized right-of-use asset impairments were recognized as a cumulative effect adjustment to beginning accumulated deficit as of January 1, 2019. As a result of the Company’s election of the package of practical expedients within ASU 2016-02, there were no changes to the classification of the Company’s existing operating, capital and financing leases as of January 1, 2019 and there were no changes to the amounts recognized on its condensed consolidated balance sheet for its existing capital and financing leases as of January 1, 2019. Subsequent to the adoption of ASU 2016-02, lessors are required to separately recognize and measure the lease component of a contract with a customer utilizing the provisions of ASC 842 and the nonlease components utilizing the provisions of ASC 606. To separately account for the components, the transaction price is allocated among the components based upon the estimated stand alone selling prices of the components. Additionally, certain components of a contract which were previously included within the lease element recognized in accordance with ASC 840, Leases ("ASC 840") prior to the adoption of ASU 2016-02 (such as common area maintenance services, other basic services, and executory costs) are recognized as nonlease components subject to the provisions of ASC 606 subsequent to the adoption of ASU 2016-02. However, entities are permitted to elect the practical expedient under ASU 2018-11 allowing lessors to not separate nonlease components from the associated lease components when certain criteria are met. Entities that elect to utilize the lease/nonlease component combination practical expedient under ASU 2018-11 upon initial application of ASC 842 are required to apply the practical expedient to all new and existing transactions within a class of underlying assets that qualify for the expedient as of the initial application date. For the year ended December 31, 2018, the Company recognized revenue for housing services under independent living, assisted living, and memory care residency agreements in accordance with the provisions of the former lease accounting standard, ASC 840, and the Company recognized revenue for assistance with activities of daily living, memory care services, healthcare, and personalized health services under independent living, assisted living, and memory care residency agreements in accordance with the provisions of ASC 606. Upon adoption of ASU 2016-02 and ASU 2018-11, the Company elected the lessor practical expedient within ASU 2018-11 and recognizes, measures, presents, and discloses the revenue for housing services under the Company's senior living residency agreements based upon the predominant component, either the lease or nonlease component, of the contracts rather than allocating the consideration and separately accounting for it under ASC 842 and ASC 606. The Company has concluded that the nonlease components of the Company’s independent living, assisted living, and memory care residency agreements are the predominant component of the contract for the Company’s existing agreements as of January 1, 2019. As a result of the Company's election of the package of practical expedients within ASU 2016-02, the Company continued to recognize revenue for existing contracts as of December 31, 2018 over the lease term. In addition, ASU 2016-02 has changed the definition of initial direct costs of a lease, with the initial direct costs that are initially deferred and recognized over the term of the lease limited to costs that are both incremental and direct. The Company concluded that the contract origination costs recognized on the condensed consolidated balance sheet as of December 31, 2018 were in excess of the initial direct costs that would have been deferred under the provisions of ASU 2016-02. As a result of the Company’s election of the package of practical expedients, the contract origination costs recognized on the condensed consolidated balance sheet as of December 31, 2018 continued to be amortized during 2019 over the lease term. Additionally, the Company concluded that certain costs previously deferred upon new contract origination are recognized within facility operating expense in 2019 as incurred. In addition to the previously unrecognized right-of-use asset impairment of $58.1 million , the Company recognized cumulative effect adjustments to beginning accumulated deficit as of January 1, 2019 for the impact of the adoption of accounting standards by its equity method investees and the deferred tax impact of these adjustments. The recognition of the right-of-use assets and corresponding liabilities and the removal of the deferred tax position related to these leases as of December 31, 2018 had a $0.3 million impact on the Company's net deferred tax position. A deferred tax asset of $14.1 million and an increase to the valuation allowance of $13.8 million was recorded against accumulated deficit reflecting the tax impact of the previously unrecognized right-of-use asset impairments. The adoption of the new accounting standards resulted in the following adjustments to the Company's condensed consolidated balance sheet as of January 1, 2019: (in millions) Assets Prepaid expenses and other current assets, net $ 67 Property, plant and equipment and leasehold intangibles, net (11 ) Operating lease right-of-use assets 1,329 Investment in unconsolidated ventures (2 ) Other intangible assets, net (5 ) Other assets, net (73 ) Total assets $ 1,305 Liabilities and Equity Refundable fees and deferred revenue $ 43 Operating lease obligations 1,618 Deferred liabilities (257 ) Other liabilities (43 ) Total liabilities 1,361 Total equity (56 ) Total liabilities and equity $ 1,305 Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 replaces the current incurred loss impairment methodology for credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company will be required to use a forward-looking expected credit loss model for accounts receivable and other financial instruments. ASU 2016-13 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for fiscal years beginning after December 15, 2018. The Company plans to adopt ASU 2016-13 effective January 1, 2020 and will recognize any cumulative effect of the adoption as an adjustment to beginning retained earnings with no adjustments to comparative periods presented. The Company does not expect the impact of the adoption of ASU 2016-13 to have a material effect to its consolidated financial statements and disclosures. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share ("EPS") is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if securities or other instruments that are convertible into common stock were exercised or could result in the issuance of common stock. Potentially dilutive common stock equivalents include unvested restricted stock, unvested and vested restricted stock units, and convertible debt instruments and warrants. During the three and nine months ended September 30, 2019 and 2018 , the Company reported a consolidated net loss. As a result of the net loss, unvested restricted stock, restricted stock units, and convertible debt instruments and warrants were antidilutive for each period and were not included in the computation of diluted weighted average shares. The weighted average restricted stock and restricted stock units excluded from the calculations of diluted net loss per share were 7.6 million and 6.2 million for the three months ended September 30, 2019 and 2018 , respectively, and 7.6 million and 6.5 million for the nine months ended September 30, 2019 and 2018 , respectively. For the nine months ended September 30, 2018 , the calculation of diluted weighted average shares excludes the impact of conversion of the principal amount of $316.3 million of the Company's 2.75% convertible senior notes which were repaid in cash at their maturity on June 15, 2018. In addition, the calculation of diluted weighted average shares excludes the impact of the exercise of warrants to acquire the Company's common stock. As of September 30, 2018 , the number of shares issuable upon exercise of the warrants was approximately 9.2 million . During the three months ended March 31, 2019, the option to exercise the remaining outstanding warrants expired unexercised. |
Acquisitions, Dispositions and
Acquisitions, Dispositions and Other Significant Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions, Dispositions and Other Significant Transactions | Acquisitions, Dispositions and Other Significant Transactions During the period from January 1, 2018 through September 30, 2019 , the Company disposed of 30 owned communities. The Company also entered into agreements with Ventas, Inc. ("Ventas") and Welltower Inc. ("Welltower") and continued to execute on the transactions with HCP, Inc. (now known as Healthpeak Properties, Inc.) ("HCP") announced in 2017, which together restructured a significant portion of the Company's triple-net lease obligations with the Company's largest lessors. As a result of such transactions, as well as other lease expirations and terminations, the Company's triple-net lease obligations on 97 communities were terminated during the period from January 1, 2018 to September 30, 2019 . During this period, the Company also sold its ownership interests in five unconsolidated ventures and acquired six communities that the Company previously leased or managed. As of September 30, 2019 , the Company owned 336 communities, leased 335 communities, managed 17 communities on behalf of unconsolidated ventures, and managed 106 communities on behalf of third parties. The following table sets forth, for the periods indicated, the amounts included within the Company's condensed consolidated financial statements for the 127 communities that it disposed through sales and lease terminations during the period from January 1, 2018 to September 30, 2019 through the respective disposition dates (of which 77 communities were disposed through sales and lease terminations during the period from July 1, 2018 to September 30, 2019): Three Months Ended Nine Months Ended (in thousands) 2019 2018 2019 2018 Resident fees Independent Living $ — $ 14,099 $ — $ 74,970 Assisted Living and Memory Care 103 45,496 12,385 223,763 CCRCs — 4,401 — 15,106 Senior housing resident fees $ 103 $ 63,996 $ 12,385 $ 313,839 Facility operating expense Independent Living $ — $ 8,588 $ — $ 44,256 Assisted Living and Memory Care 103 35,182 10,204 160,606 CCRCs — 3,785 — 13,701 Senior housing facility operating expense $ 103 $ 47,555 $ 10,204 $ 218,563 Cash facility lease payments $ — $ 13,111 $ 1,451 $ 80,046 2019 Completed and Planned Dispositions of Owned Communities During the nine months ended September 30, 2019 , the Company completed the sale of eight owned communities for cash proceeds of $44.1 million , net of transaction costs, and recognized a net gain on sale of assets of $0.9 million for the nine months ended September 30, 2019 . As of September 30, 2019 , six communities were classified as held for sale, resulting in $60.4 million being recorded as assets held for sale and $30.8 million of mortgage debt being included in the current portion of long-term debt within the condensed consolidated balance sheet with respect to such communities. The closings of the transactions are, or will be subject to the satisfaction of various closing conditions, including (where applicable) the receipt of regulatory approvals. There can be no assurance that the transactions will close or, if they do, when the actual closings will occur. 2018 Completed Dispositions of Owned Communities During the year ended December 31, 2018, the Company completed the sale of 22 owned communities for cash proceeds of $380.7 million , net of transaction costs, and recognized a net gain on sale of assets of $188.6 million . The Company utilized a portion of the cash proceeds from the asset sales to repay approximately $174.0 million of associated mortgage debt and debt prepayment penalties. These dispositions included the sale of three communities during the three months ended March 31, 2018 for which the Company received cash proceeds of $12.8 million , net of transaction costs, and recognized a net gain on sale of assets of $1.9 million . 2018 Welltower Lease and RIDEA Venture Restructuring In June 2018, the Company entered into definitive agreements with Welltower to terminate its triple-net lease obligations on 37 communities and to sell the Company's 20% equity interest in its Welltower RIDEA venture to Welltower. During the three months ended June 30, 2018, the Company paid Welltower an aggregate lease termination fee of $58.0 million , recognized a $22.6 million loss on lease termination, received net proceeds of $33.5 million for the sale of equity interest, and recognized a $14.7 million gain on sale of the RIDEA venture. The Company also elected not to renew two master leases with Welltower which matured on September 30, 2018 ( 11 communities). In addition, the parties separately agreed to allow the Company to terminate leases with respect to, and to remove from the remaining Welltower leased portfolio, a number of communities with annual aggregate base rent up to $5.0 million upon Welltower's sale of such communities, and the Company would receive a corresponding 6.25% rent credit on Welltower's disposition proceeds. 2018 Ventas Lease Portfolio Restructuring In April 2018, the Company and Ventas entered into a Master Lease and Security Agreement (the "Ventas Master Lease") in connection with the restructuring of a portfolio of 128 communities that it leased from Ventas. The Company estimated the fair value of each of the elements of the restructuring transactions. The fair value of the future lease payments was based upon historical and forecasted community cash flows and market data, including an implied management fee rate of 5% of revenue and a market supported lease coverage ratio (Level 3 inputs). The Company recognized a $125.7 million non-cash loss on lease modification during the three months ended June 30, 2018, primarily for the extensions of the triple-net lease obligations for communities with lease terms that were unfavorable to the Company given current market conditions on the amendment date in exchange for modifications to the change of control provisions and financial covenant provisions of the community leases. Pursuant to the Ventas Master Lease, the Company has exercised its right to direct Ventas to market for sale 28 communities. Ventas is obligated to use commercially reasonable, diligent efforts to sell such communities on or before December 31, 2020 (subject to extension for regulatory purposes); provided, that Ventas' obligation to sell any such community is subject to Ventas' receiving a purchase price in excess of a mutually agreed upon minimum sale price and to certain other customary closing conditions. Upon any such sale, such communities will be removed from the Ventas Master Lease, and the annual minimum rent under the Ventas Master Lease will be reduced by the amount of the net sale proceeds received by Ventas multiplied by 6.25% . During the three months ended June 30, 2019, five of such communities were sold by Ventas and removed from the Ventas Master Lease, and the annual minimum rent under the Ventas Master Lease was prospectively reduced by $1.5 million . 2017 HCP Master Lease Transaction and RIDEA Ventures Restructuring Pursuant to transactions the Company entered into with HCP in November 2017, during the three months ended June 30, 2018, the Company acquired five communities from HCP, two of which the Company formerly leased, for an aggregate purchase price of $242.8 million , and during the three months ended March 31, 2018, the Company acquired one community for an aggregate purchase price of $32.1 million . During the year ended December 31, 2018, leases with respect to 33 communities were terminated, and such communities were removed from the Company's master lease with HCP. Sixteen of such community leases were terminated in the nine months ended September 30, 2018. During the three and nine months ended September 30, 2018, the Company derecognized $60.9 million and $147.8 million , respectively, of the carrying value of the assets under financing leases and $67.3 million and $160.8 million , respectively, carrying value of financing lease obligations and recognized a $6.1 million and $12.6 million , respectively, non-cash gain on sale of assets for six communities which were previously subject to sale-leaseback transactions. Additionally, the Company recognized a $0.1 million non-cash loss and a $1.8 million non-cash gain on lease termination for seven communities under operating and capital leases during the three and nine months ended September 30, 2018, respectively. During the three months ended March 31, 2018, HCP acquired the Company's 10% ownership interest in a RIDEA venture with HCP for $62.3 million , and the Company recognized a $41.7 million gain on sale. Management agreements for 35 communities with former unconsolidated ventures with HCP have been terminated by HCP since November of 2017. The Company has recognized a $9.3 million non-cash management contract termination gain, of which $0.6 million was recognized during the three months ended September 30, 2018 and $0.8 million and $5.6 million were recognized during the nine months ended September 30, 2019 and 2018 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Marketable Securities As of September 30, 2019 , marketable securities of $49.8 million are stated at fair value based on valuation provided by third-party pricing services and are classified within Level 2 of the valuation hierarchy. Debt The Company had outstanding long-term debt with a carrying value of approximately $3.6 billion as of both September 30, 2019 and December 31, 2018 . Fair value of the long-term debt approximates carrying value in all periods presented. The Company's fair value of long-term debt disclosure is classified within Level 2 of the valuation hierarchy. Goodwill and Asset Impairment Expense The following is a summary of goodwill and asset impairment expense. Three Months Ended Nine Months Ended (in millions) 2019 2018 2019 2018 Goodwill $ — $ — $ — $ 351.7 Property, plant and equipment and leasehold intangibles, net 0.8 2.5 2.0 50.2 Investment in unconsolidated ventures — — — 33.4 Other intangible assets, net — — 2.6 1.7 Assets held for sale 1.3 3.0 1.3 15.0 Other assets, net $ — — $ 0.4 — Goodwill and asset impairment $ 2.1 $ 5.5 $ 6.3 $ 452.0 Goodwill During the three months ended March 31, 2018, the Company identified qualitative indicators of impairment, including a significant decline in the Company's stock price and market capitalization for a sustained period during the three months ended March 31, 2018. Based upon the Company's qualitative assessment, the Company performed a quantitative goodwill impairment test as of March 31, 2018, which included a comparison of the estimated fair value of each reporting unit to which the goodwill has been assigned with the reporting unit's carrying value. Based on the results of the Company's quantitative goodwill impairment test, the Company recorded a non-cash impairment charge of $351.7 million to goodwill and asset impairment within the Assisted Living and Memory Care operating segment for the three months ended March 31, 2018. See Note 2 for more information regarding the Company's policy for goodwill. Property, Plant and Equipment and Leasehold Intangibles During the three and nine months ended September 30, 2018 , the Company evaluated property, plant and equipment and leasehold intangibles for impairment and identified properties with a carrying value of the assets in excess of the estimated future undiscounted net cash flows expected to be generated by the assets primarily due to an expectation that certain communities will be disposed of prior to their previously intended holding periods. As a result of this change in intent, the Company compared the estimated fair value of the assets to their carrying value for these identified properties and recorded an impairment charge for the excess of carrying value over estimated fair value. The estimates of fair values of the property, plant and equipment of these communities were determined based on valuations provided by third-party pricing services and are classified within Level 3 of the valuation hierarchy. The Company recorded property, plant and equipment and leasehold intangibles non-cash impairment charges in its operating results of $2.5 million and $50.2 million for the three and nine months ended September 30, 2018 , respectively, primarily within the Assisted Living and Memory Care segment. Investment in Unconsolidated Ventures The Company evaluates realization of its investment in ventures accounted for using the equity method if circumstances indicate that the Company's investment is other than temporarily impaired. During the three months ended March 31, 2018, the Company recorded non-cash impairment charges related to investments in unconsolidated ventures of $33.4 million . The impairment charges reflect the amount by which the carrying values of the investments exceeded their estimated fair value (using Level 3 inputs). Right-of-Use Assets The Company's adoption of ASU 2016-02 resulted in the recognition of the right-of-use assets for the operating leases for 25 communities to be recognized on the condensed consolidated balance sheet as of January 1, 2019 at the estimated fair value of $56.6 million and $58.1 million |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Grants of restricted shares under the Company's 2014 Omnibus Incentive Plan were as follows: (in thousands, except for per share amounts) Shares Granted Weighted Average Grant Date Fair Value Total Value Three months ended March 31, 2019 4,047 $ 7.87 $ 31,857 Three months ended June 30, 2019 142 $ 6.51 $ 922 Three months ended September 30, 2019 136 $ 7.55 $ 1,028 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net The Company's Independent Living and Health Care Services segments had a carrying value of goodwill of $27.3 million and $126.8 million , respectively, as of both September 30, 2019 and December 31, 2018 . Goodwill is tested for impairment annually with a test date of October 1 and sooner if indicators of impairment are present. The Company determined no impairment was necessary for the three and nine months ended September 30, 2019 . Factors the Company considers important in its analysis, which could trigger an impairment of such assets, include significant underperformance relative to historical or projected future operating results, significant negative industry or economic trends, a significant decline in the Company's stock price for a sustained period and a decline in its market capitalization below net book value. A change in anticipated operating results or the other metrics indicated above could necessitate further analysis of potential impairment at an interval prior to the Company's annual measurement date. Refer to Note 5 for information on impairment expense for goodwill in 2018. Other intangible assets as of September 30, 2019 and December 31, 2018 are summarized in the following tables: September 30, 2019 (in thousands) Gross Accumulated Net Health care licenses $ 42,776 $ — $ 42,776 Trade names 27,800 (27,800 ) — Total $ 70,576 $ (27,800 ) $ 42,776 December 31, 2018 (in thousands) Gross Accumulated Net Community purchase options $ 4,738 $ — $ 4,738 Health care licenses 42,323 — 42,323 Trade names 27,800 (26,295 ) 1,505 Management contracts 9,610 (6,704 ) 2,906 Total $ 84,471 $ (32,999 ) $ 51,472 Amortization expense related to definite-lived intangible assets for the three months ended September 30, 2019 and 2018 was $0.2 million and $0.6 million , respectively, and for the nine months ended September 30, 2019 and 2018 was $1.8 million and $2.3 million , respectively. The Company recognized $2.6 million of non-cash impairment charges on management contract intangible assets during the nine months ended September 30, 2019 for the termination of management contracts. |
Property, Plant and Equipment a
Property, Plant and Equipment and Leasehold Intangibles, Net | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment and Leasehold Intangibles, Net | Property, Plant and Equipment and Leasehold Intangibles, Net As of September 30, 2019 and December 31, 2018 , net property, plant and equipment and leasehold intangibles, which include assets under financing leases, consisted of the following: (in thousands) September 30, 2019 December 31, 2018 Land $ 454,790 $ 455,623 Buildings and improvements 4,812,422 4,749,877 Furniture and equipment 849,573 805,190 Resident and leasehold operating intangibles 319,049 477,827 Construction in progress 80,788 57,636 Assets under financing leases and leasehold improvements 1,832,524 1,776,649 Property, plant and equipment and leasehold intangibles 8,349,146 8,322,802 Accumulated depreciation and amortization (3,163,465 ) (3,047,375 ) Property, plant and equipment and leasehold intangibles, net $ 5,185,681 $ 5,275,427 Assets under financing leases and leasehold improvements includes $0.6 billion and $0.7 billion of financing lease right-of-use assets, net of accumulated amortization, as of September 30, 2019 and December 31, 2018 , respectively. Refer to Note 10 for further information on the Company’s financing leases. The Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $93.3 million and $110.4 million for the three months ended September 30, 2019 and 2018 , respectively, and $282.6 million and $339.0 million for the nine months ended September 30, 2019 and 2018 , respectively. Long-lived assets with definite useful lives are depreciated or amortized on a straight-line basis over their estimated useful lives (or, in certain cases, the shorter of their estimated useful lives or the lease term) and are tested for impairment whenever indicators of impairment arise. Refer to Note 5 for additional information on impairment expense for property, plant and equipment and leasehold intangibles. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt as of September 30, 2019 and December 31, 2018 consists of the following: (in thousands) September 30, 2019 December 31, 2018 Mortgage notes payable due 2020 through 2047; weighted average interest rate of 4.77% for the nine months ended September 30, 2019, less debt discount and deferred financing costs of $17.7 million and $18.6 million as of September 30, 2019 and December 31, 2018, respectively (weighted average interest rate of 4.75% in 2018) $ 3,513,386 $ 3,579,931 Other notes payable, weighted average interest rate of 5.79% for the nine months ended September 30, 2019 (weighted average interest rate of 5.85% in 2018) and maturity dates ranging from 2020 to 2021 58,835 60,249 Total long-term debt 3,572,221 3,640,180 Current portion 343,615 294,426 Total long-term debt, less current portion $ 3,228,606 $ 3,345,754 As of September 30, 2019 and December 31, 2018 , the current portion of long-term debt within the Company's condensed consolidated financial statements includes $30.8 million and $31.2 million , respectively, of mortgage notes payable secured by assets held for sale. This debt is expected to be repaid with the proceeds from the sales. Refer to Note 4 for more information about the Company's assets held for sale. Credit Facilities On December 5, 2018, the Company entered into a Fifth Amended and Restated Credit Agreement with Capital One, National Association, as administrative agent, lender and swingline lender and the other lenders from time to time parties thereto (the "Amended Agreement"). The Amended Agreement amended and restated in its entirety the Company's Fourth Amended and Restated Credit Agreement dated as of December 19, 2014 (the "Original Agreement"). The Amended Agreement provides commitments for a $250 million revolving credit facility with a $60 million sublimit for letters of credit and a $50 million swingline feature. The Company has a one-time right under the Amended Agreement to increase commitments on the revolving credit facility by an additional $100 million , subject to obtaining commitments for the amount of such increase from acceptable lenders. The Amended Agreement provides the Company a one-time right to reduce the amount of the revolving credit commitments, and the Company may terminate the revolving credit facility at any time, in each case without payment of a premium or penalty. The Amended Agreement extended the maturity date of the Original Agreement from January 3, 2020 to January 3, 2024 and decreased the interest rate payable on drawn amounts. Amounts drawn under the facility will continue to bear interest at 90-day LIBOR plus an applicable margin; however, the Amended Agreement reduced the applicable margin from a range of 2.50% to 3.50% to a range of 2.25% to 3.25% . The applicable margin varies based on the percentage of the total commitment drawn, with a 2.25% margin at utilization equal to or lower than 35% , a 2.75% margin at utilization greater than 35% but less than or equal to 50% , and a 3.25% margin at utilization greater than 50% . A quarterly commitment fee continues to be payable on the unused portion of the facility at 0.25% per annum when the outstanding amount of obligations (including revolving credit and swingline loans and letter of credit obligations) is greater than or equal to 50% of the revolving credit commitment amount or 0.35% per annum when such outstanding amount is less than 50% of the revolving credit commitment amount. The credit facility is secured by first priority mortgages on certain of the Company's communities. In addition, the Amended Agreement permits the Company to pledge the equity interests in subsidiaries that own other communities and grant negative pledges in connection therewith (rather than mortgaging such communities), provided that not more than 10% of the borrowing base may result from communities subject to negative pledges. Availability under the revolving credit facility will vary from time to time based on borrowing base calculations related to the appraised value and performance of the communities securing the credit facility and the Company’s consolidated fixed charge coverage ratio. During the third quarter of 2019, the Company added three communities to the borrowing base and entered into an amendment to the Amended Agreement that provides for availability calculations to be made at additional consolidated fixed charge coverage ratio thresholds. The Amended Agreement contains typical affirmative and negative covenants, including financial covenants with respect to minimum consolidated fixed charge coverage and minimum consolidated tangible net worth. Amounts drawn on the credit facility may be used for general corporate purposes. As of September 30, 2019 , no borrowings were outstanding on the revolving credit facility, $41.2 million of letters of credit were outstanding, and the revolving credit facility had $164.2 million of availability. The Company also had a separate unsecured letter of credit facility of up to $47.5 million as of September 30, 2019 . Letters of credit totaling $47.5 million had been issued under the separate facility as of that date. 2019 Financings On May 7, 2019, the Company obtained $111.1 million of debt secured by the non-recourse first mortgages on 14 communities. Sixty percent of the principal amount bears interest at a fixed rate of 4.52% , and the remaining forty percent of the principal amount bears interest at a variable rate equal to the 30-day LIBOR plus a margin of 223 basis points. The debt matures in June 2029. The $111.1 million of proceeds from the financing along with cash on hand were utilized to repay $155.5 million of outstanding mortgage debt maturing in 2019. On August 29, 2019, the Company obtained $160.3 million of debt secured by the non-recourse first mortgages on five communities. Seventy-five percent of the principal amount bears interest at a fixed rate of 3.35% , and the remaining twenty-five percent of the principal amount bears interest at a variable rate equal to the 30-day LIBOR plus a margin of 217 basis points. The debt matures in September 2029. The $160.3 million of proceeds from the financing were utilized to repay $139.2 million of outstanding mortgage debt maturing in 2020 and 2023. Financial Covenants Certain of the Company’s debt documents contain restrictions and financial covenants, such as those requiring the Company to maintain prescribed minimum net worth and stockholders’ equity levels and debt service ratios, and requiring the Company not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community, and/or entity basis. In addition, the Company’s debt documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements. The Company’s failure to comply with applicable covenants could constitute an event of default under the applicable debt documents. Many of the Company’s debt documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors). Furthermore, the Company’s debt is secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries. As of September 30, 2019 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases As of September 30, 2019 , the Company operated 335 communities under long-term leases ( 244 operating leases and 91 financing leases). The substantial majority of the Company's lease arrangements are structured as master leases. Under a master lease, numerous communities are leased through an indivisible lease. The Company typically guarantees the performance and lease payment obligations of its subsidiary lessees under the master leases. Due to the nature of such master leases, it is difficult to restructure the composition of such leased portfolios or economic terms of the leases without the consent of the applicable landlord. In addition, an event of default related to an individual property or limited number of properties within a master lease portfolio may result in a default on the entire master lease portfolio. The leases relating to these communities are generally fixed rate leases with annual escalators that are either fixed or based upon changes in the consumer price index or the leased property revenue. The Company is responsible for all operating costs, including repairs, property taxes, and insurance. As of September 30, 2019 , the weighted-average remaining lease term of the Company’s operating and financing leases was 7.1 years and 8.5 years , respectively. The leases generally provide for renewal or extension options from 5 to 20 years and in some instances, purchase options. The community leases contain other customary terms, which may include assignment and change of control restrictions, maintenance and capital expenditure obligations, termination provisions and financial covenants, such as those requiring the Company to maintain prescribed minimum net worth and stockholders’ equity levels and lease coverage ratios, and not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community and/or entity basis. In addition, the Company’s lease documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements. The Company’s failure to comply with applicable covenants could constitute an event of default under the applicable lease documents. Many of the Company’s debt and lease documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors). Certain leases contain cure provisions, which generally allow the Company to post an additional lease security deposit if the required covenant is not met. Furthermore, the Company’s leases are secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries. As of September 30, 2019 , the Company is in compliance with the financial covenants of its long-term leases. A summary of operating and financing lease expense (including the respective presentation on the condensed consolidated statements of operations) and cash flows from leasing transactions is as follows: Operating Leases (in thousands) Three Months Ended Nine Months Ended Facility operating expense $ 4,532 $ 13,761 Facility lease expense 67,253 203,610 Operating lease expense 71,785 217,371 Operating lease expense adjustment 4,814 13,626 Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements (11,043 ) (12,043 ) Operating cash flows from operating leases $ 65,556 $ 218,954 Non-cash recognition of right-of-use assets obtained in exchange for new operating lease obligations $ 22,375 $ 26,356 Financing Leases (in thousands) Three Months Ended Nine Months Ended Depreciation and amortization $ 11,675 $ 35,030 Interest expense: financing lease obligations 16,567 49,959 Financing lease expense $ 28,242 $ 84,989 Operating cash flows from financing leases $ 16,567 $ 49,959 Financing cash flows from financing leases 5,549 16,502 Total cash flows from financing leases $ 22,116 $ 66,461 As of September 30, 2019 , the weighted-average discount rate of the Company’s operating and financing leases was 8.6% and 7.8% , respectively. As the Company's community leases do not contain an implicit rate, the Company utilized its incremental borrowing rate based on information available on January 1, 2019 to determine the present value of lease payments for operating leases that commenced prior to that date. The aggregate amounts of future minimum lease payments, including community, office, and equipment leases recognized on the condensed consolidated balance sheet as of September 30, 2019 are as follows (in thousands): Year Ending December 31, Operating Leases Financing Leases 2019 (three months) $ 77,495 $ 22,052 2020 312,861 89,090 2021 298,025 90,330 2022 294,696 91,719 2023 290,698 93,190 Thereafter 806,856 429,663 Total lease payments 2,080,631 816,044 Purchase option liability and non-cash gain on future sale of property — 575,791 Imputed interest and variable lease payments (572,238 ) (533,798 ) Total lease obligations $ 1,508,393 $ 858,037 The aggregate amounts of future minimum operating lease payments, including community, office, and equipment leases not recognized on the condensed consolidated balance sheet under ASC 840 as of December 31, 2018 are as follows (in thousands): Year Ending December 31, Operating Leases 2019 $ 310,340 2020 307,493 2021 290,661 2022 291,114 2023 285,723 Thereafter 786,647 Total lease payments $ 2,271,978 |
Leases | Leases As of September 30, 2019 , the Company operated 335 communities under long-term leases ( 244 operating leases and 91 financing leases). The substantial majority of the Company's lease arrangements are structured as master leases. Under a master lease, numerous communities are leased through an indivisible lease. The Company typically guarantees the performance and lease payment obligations of its subsidiary lessees under the master leases. Due to the nature of such master leases, it is difficult to restructure the composition of such leased portfolios or economic terms of the leases without the consent of the applicable landlord. In addition, an event of default related to an individual property or limited number of properties within a master lease portfolio may result in a default on the entire master lease portfolio. The leases relating to these communities are generally fixed rate leases with annual escalators that are either fixed or based upon changes in the consumer price index or the leased property revenue. The Company is responsible for all operating costs, including repairs, property taxes, and insurance. As of September 30, 2019 , the weighted-average remaining lease term of the Company’s operating and financing leases was 7.1 years and 8.5 years , respectively. The leases generally provide for renewal or extension options from 5 to 20 years and in some instances, purchase options. The community leases contain other customary terms, which may include assignment and change of control restrictions, maintenance and capital expenditure obligations, termination provisions and financial covenants, such as those requiring the Company to maintain prescribed minimum net worth and stockholders’ equity levels and lease coverage ratios, and not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community and/or entity basis. In addition, the Company’s lease documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements. The Company’s failure to comply with applicable covenants could constitute an event of default under the applicable lease documents. Many of the Company’s debt and lease documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors). Certain leases contain cure provisions, which generally allow the Company to post an additional lease security deposit if the required covenant is not met. Furthermore, the Company’s leases are secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries. As of September 30, 2019 , the Company is in compliance with the financial covenants of its long-term leases. A summary of operating and financing lease expense (including the respective presentation on the condensed consolidated statements of operations) and cash flows from leasing transactions is as follows: Operating Leases (in thousands) Three Months Ended Nine Months Ended Facility operating expense $ 4,532 $ 13,761 Facility lease expense 67,253 203,610 Operating lease expense 71,785 217,371 Operating lease expense adjustment 4,814 13,626 Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements (11,043 ) (12,043 ) Operating cash flows from operating leases $ 65,556 $ 218,954 Non-cash recognition of right-of-use assets obtained in exchange for new operating lease obligations $ 22,375 $ 26,356 Financing Leases (in thousands) Three Months Ended Nine Months Ended Depreciation and amortization $ 11,675 $ 35,030 Interest expense: financing lease obligations 16,567 49,959 Financing lease expense $ 28,242 $ 84,989 Operating cash flows from financing leases $ 16,567 $ 49,959 Financing cash flows from financing leases 5,549 16,502 Total cash flows from financing leases $ 22,116 $ 66,461 As of September 30, 2019 , the weighted-average discount rate of the Company’s operating and financing leases was 8.6% and 7.8% , respectively. As the Company's community leases do not contain an implicit rate, the Company utilized its incremental borrowing rate based on information available on January 1, 2019 to determine the present value of lease payments for operating leases that commenced prior to that date. The aggregate amounts of future minimum lease payments, including community, office, and equipment leases recognized on the condensed consolidated balance sheet as of September 30, 2019 are as follows (in thousands): Year Ending December 31, Operating Leases Financing Leases 2019 (three months) $ 77,495 $ 22,052 2020 312,861 89,090 2021 298,025 90,330 2022 294,696 91,719 2023 290,698 93,190 Thereafter 806,856 429,663 Total lease payments 2,080,631 816,044 Purchase option liability and non-cash gain on future sale of property — 575,791 Imputed interest and variable lease payments (572,238 ) (533,798 ) Total lease obligations $ 1,508,393 $ 858,037 The aggregate amounts of future minimum operating lease payments, including community, office, and equipment leases not recognized on the condensed consolidated balance sheet under ASC 840 as of December 31, 2018 are as follows (in thousands): Year Ending December 31, Operating Leases 2019 $ 310,340 2020 307,493 2021 290,661 2022 291,114 2023 285,723 Thereafter 786,647 Total lease payments $ 2,271,978 |
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2019 | |
Litigation [Abstract] | |
Litigation | Litigation The Company has been and is currently involved in litigation and claims, including putative class action claims from time to time, incidental to the conduct of its business which are generally comparable to other companies in the senior living and healthcare industries. Certain claims and lawsuits allege large damage amounts and may require significant costs to defend and resolve. As a result, the Company maintains general liability and professional liability insurance policies in amounts and with coverage and deductibles the Company believes are adequate, based on the nature and risks of its business, historical experience and industry standards. The Company's current policies provide for deductibles for each claim. Accordingly, the Company is, in effect, self-insured for claims that are less than the deductible amounts and for claims or portions of claims that are not covered by such policies. |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow Information | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosure of Cash Flow Information | Supplemental Disclosure of Cash Flow Information Nine Months Ended (in thousands) 2019 2018 Supplemental Disclosure of Cash Flow Information: Interest paid $ 185,722 $ 198,133 Income taxes paid, net of refunds 1,909 1,542 Capital expenditures, net of related payables Capital expenditures - non-development, net $ 180,187 $ 130,692 Capital expenditures - development, net 18,677 20,084 Capital expenditures - non-development - reimbursable 12,043 1,764 Capital expenditures - development - reimbursable — 1,709 Trade accounts payable (4,522 ) 15,100 Net cash paid $ 206,385 $ 169,349 Acquisition of assets, net of related payables and cash received: Property, plant and equipment and leasehold intangibles, net $ — $ 237,563 Other intangible assets, net 453 (4,345 ) Financing lease obligations — 36,120 Other liabilities — 2,433 Net cash paid $ 453 $ 271,771 Proceeds from sale of assets, net: Prepaid expenses and other assets, net $ (5,298 ) $ (3,006 ) Assets held for sale (41,882 ) (18,758 ) Property, plant and equipment and leasehold intangibles, net (647 ) (91,778 ) Investments in unconsolidated ventures (156 ) (58,179 ) Financing lease obligations — 93,514 Refundable fees and deferred revenue — 8,345 Other liabilities (2,724 ) 2,690 Loss (gain) on sale of assets, net (2,723 ) (64,740 ) Net cash received $ (53,430 ) $ (131,912 ) Lease termination and modification, net: Prepaid expenses and other assets, net $ — $ (2,040 ) Property, plant and equipment and leasehold intangibles, net — (81,320 ) Financing lease obligations — 58,099 Deferred liabilities — 67,950 Loss (gain) on sale of assets, net — (5,761 ) Loss (gain) on facility lease termination and modification, net — 22,260 Net cash paid (1) $ — $ 59,188 Supplemental Schedule of Non-cash Operating, Investing and Financing Activities: Assets designated as held for sale: Prepaid expenses and other assets, net $ (5 ) $ (281 ) Assets held for sale 9,169 162,157 Property, plant and equipment and leasehold intangibles, net (9,164 ) (161,876 ) Net $ — $ — Lease termination and modification, net: Prepaid expenses and other assets, net $ (648 ) $ (4,783 ) Property, plant and equipment and leasehold intangibles, net (1,666 ) (106,264 ) Financing lease obligations — 112,267 Operating lease right-of-use assets (8,644 ) — Operating lease obligations 9,289 — Deferred liabilities — (122,304 ) Other liabilities (337 ) 625 Loss (gain) on sale of assets, net — (6,085 ) Loss (gain) on facility lease termination and modification, net 2,006 126,544 Net $ — $ — (1) The net cash paid to terminate community leases is presented within the condensed consolidated statement of cash flows based upon the lease classification of the terminated leases. Net cash paid of $46.6 million for the termination of operating leases is presented within net cash provided by (used in) operating activities and net cash paid of $12.5 million for the termination of capital leases is presented within net cash provided by (used in) financing activities for the nine months ended September 30, 2018 . During the three months ended June 30, 2019, the Company and its joint venture partner contributed cash in an aggregate amount of $13.3 million to a consolidated joint venture which owns three senior housing communities. The Company obtained a $6.6 million promissory note receivable from its joint venture partner secured by a 50% equity interest in the joint venture in a non-cash exchange for the Company funding the $13.3 million aggregate contribution in cash. Nine Months Ended (in thousands) 2019 2018 Notes receivable: Other assets, net $ 6,566 $ — Noncontrolling interest (6,566 ) — Net $ — $ — Refer to Note 2 for a schedule of the non-cash adjustments to the Company's condensed consolidated balance sheet as of January 1, 2019 as a result of the adoption of new accounting standards and Note 10 for a schedule of the non-cash recognition of right-of-use assets obtained in exchange for new operating lease obligations. Restricted cash consists principally of escrow deposits for real estate taxes, property insurance, and capital expenditures required by certain lenders under mortgage debt agreements and deposits as security for self-insured retention risk under workers' compensation programs and property insurance programs. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sums to the total of the same such amounts shown in the condensed consolidated statements of cash flows. (in thousands) September 30, 2019 December 31, 2018 Reconciliation of cash, cash equivalents, and restricted cash: Cash and cash equivalents $ 241,391 $ 398,267 Restricted cash 33,305 27,683 Long-term restricted cash 40,663 24,268 Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows $ 315,359 $ 450,218 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The difference between the Company's effective tax rate for the three and nine months ended September 30, 2019 and September 30, 2018 was primarily due to the non-deductible impairment of goodwill that occurred in the three months ended March 31, 2018 and the adjustment from stock-based compensation, which was greater in the nine months ended September 30, 2018 compared to the nine months ended September 30, 2019 . The Company recorded an aggregate deferred federal, state, and local tax benefit of $19.4 million and $39.0 million for the three and nine months ended September 30, 2019 , respectively. The benefit includes $19.4 million and $40.7 million as a result of the operating losses for the three and nine months ended September 30, 2019 , respectively. The benefit was reduced by a $1.7 million reduction in the deferred tax asset related to employee stock compensation for the nine months ended September 30, 2019 . The benefit for the three and nine months ended September 30, 2019 is offset by increases in the valuation allowance of $17.8 million and $37.7 million , respectively. The change in the valuation allowance for the three and nine months ended September 30, 2019 is the result of the anticipated reversal of future tax liabilities offset by future tax deductions. The Company recorded an aggregate deferred federal, state, and local tax benefit of $15.4 million and $71.3 million as a result of the operating loss for the three and nine months ended September 30, 2018 , respectively. The benefit for the three months ended September 30, 2018 includes a benefit from a decrease in the valuation allowance of $2.7 million . The benefit for the nine months ended September 30, 2018 was offset by an increase in the valuation allowance of $52.2 million . The Company evaluates its deferred tax assets each quarter to determine if a valuation allowance is required based on whether it is more likely than not that some portion of the deferred tax asset would not be realized. The Company's valuation allowance as of September 30, 2019 and December 31, 2018 was $387.9 million and $336.4 million , respectively. The increase in the valuation allowance during the nine months ended September 30, 2019 is comprised of multiple components. The increase includes $13.8 million resulting from the adoption of ASC 842 and the related addition of future timing differences recorded in the three months ended March 31, 2019. An additional $39.4 million of allowance was established against the current operating loss incurred during the nine months ended September 30, 2019 . Offsetting the increases was a decrease of $1.7 million of allowance as a result of removal of future timing differences related to employee stock compensation recorded in the three months ended March 31, 2019. On December 22, 2017, the President signed the Tax Cuts and Jobs Act ("Tax Act") into law. The Tax Act limits the annual deductibility of a corporation's net interest expense unless it elects to be exempt from such deductibility limitation under the real property trade or business exception. The Company elected the real property trade or business exception with the 2018 tax return. As such, the Company is required to apply the alternative depreciation system ("ADS") to all current and future residential real property and qualified improvement property assets. This change impacts the current and future tax depreciation deductions and impacted the Company's valuation allowance accordingly. Additional information that may affect the Company's provisional amounts would include further clarification and guidance on how the Internal Revenue Service will implement tax reform and further clarification and guidance on how state taxing authorities will implement tax reform and the related effect on the Company's state and local income tax returns, state and local net operating losses, and corresponding valuation allowances. The Company recorded interest charges related to its tax contingency reserve for cash tax positions for the three and nine months ended September 30, 2019 and 2018 which are included in income tax expense or benefit for the period. As of September 30, 2019 , tax returns for years 2014 through 2018 |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue The Company disaggregates its revenue from contracts with customers by payor source, as the Company believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. See details on a reportable segment basis in the tables below. Three Months Ended September 30, 2019 (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total Private pay $ 136,274 $ 435,367 $ 70,353 $ 171 $ 642,165 Government reimbursement 600 17,107 19,931 89,157 126,795 Other third-party payor programs — — 9,820 22,457 32,277 Total resident fee revenue $ 136,874 $ 452,474 $ 100,104 $ 111,785 $ 801,237 Three Months Ended September 30, 2018 (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total Private pay $ 143,963 $ 464,719 $ 73,567 $ 159 $ 682,408 Government reimbursement 668 18,406 20,901 89,100 129,075 Other third-party payor programs — — 9,679 19,017 28,696 Total resident fee revenue $ 144,631 $ 483,125 $ 104,147 $ 108,276 $ 840,179 Nine Months Ended September 30, 2019 (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total Private pay $ 406,667 $ 1,310,867 $ 212,978 $ 554 $ 1,931,066 Government reimbursement 1,852 50,358 61,614 269,428 383,252 Other third-party payor programs — — 30,492 67,769 98,261 Total resident fee revenue $ 408,519 $ 1,361,225 $ 305,084 $ 337,751 $ 2,412,579 Nine Months Ended September 30, 2018 (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total Private pay $ 459,875 $ 1,482,789 $ 217,680 $ 585 $ 2,160,929 Government reimbursement 2,446 54,643 65,986 272,332 395,407 Other third-party payor programs — — 30,346 55,732 86,078 Total resident fee revenue $ 462,321 $ 1,537,432 $ 314,012 $ 328,649 $ 2,642,414 The Company has not further disaggregated management fee revenues and revenue for reimbursed costs incurred on behalf of managed communities as the economic factors affecting the nature, timing, amount, and uncertainty of revenue and cash flows do not significantly vary within each respective revenue category. Contract Balances Resident fee revenue for recurring and routine monthly services is generally billed monthly in advance under the Company's independent living, assisted living, and memory care residency agreements. Resident fee revenue for standalone or certain health care services is generally billed monthly in arrears. Additionally, non-refundable community fees are generally billed and collected in advance or upon move-in of a resident under the Company's independent living, assisted living, and memory care residency agreements. Amounts of revenue that are collected from residents in advance are recognized as deferred revenue until the performance obligations are satisfied. The Company had total deferred revenue (included within refundable fees and deferred revenue, deferred liabilities, and other liabilities within the condensed consolidated balance sheets) of $75.8 million and $106.4 million , including $31.6 million and $50.6 million of monthly resident fees billed and received in advance, as of September 30, 2019 and December 31, 2018 , respectively. For the nine months ended September 30, 2019 and 2018, the Company recognized $83.7 million and $76.2 million |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company has five reportable segments: Independent Living; Assisted Living and Memory Care; CCRCs; Health Care Services; and Management Services. Operating segments are defined as components of an enterprise that engage in business activities from which it may earn revenues and incur expenses; for which separate financial information is available; and whose operating results are regularly reviewed by the chief operating decision maker to assess the performance of the individual segment and make decisions about resources to be allocated to the segment. Independent Living . The Company's Independent Living segment includes owned or leased communities that are primarily designed for middle to upper income seniors who desire an upscale residential environment providing the highest quality of service. The majority of the Company's independent living communities consist of both independent and assisted living units in a single community, which allows residents to age-in-place by providing them with a continuum of senior independent and assisted living services. Assisted Living and Memory Care. The Company's Assisted Living and Memory Care segment includes owned or leased communities that offer housing and 24-hour assistance with activities of daily life to mid-acuity frail and elderly residents. Assisted living and memory care communities include both freestanding, multi-story communities and freestanding, single story communities. The Company also provides memory care services at freestanding memory care communities that are specially designed for residents with Alzheimer's and other dementias. CCRCs. The Company's CCRCs segment includes large owned or leased communities that offer a variety of living arrangements and services to accommodate all levels of physical ability and health. Most of the Company's CCRCs have independent living, assisted living and skilled nursing available on one campus or within the immediate market, and some also include memory care and Alzheimer's services. Health Care Services . The Company's Health Care Services segment includes the home health, hospice, and outpatient therapy services, as well as education and wellness programs, provided to residents of many of the Company's communities and to seniors living outside of the Company's communities. The Health Care Services segment does not include the skilled nursing and inpatient healthcare services provided in the Company's skilled nursing units, which are included in the Company's CCRCs segment. Management Services. The Company's Management Services segment includes communities operated by the Company pursuant to management agreements. In some of the cases, the controlling financial interest in the community is held by third parties and, in other cases, the community is owned in a venture structure in which the Company has an ownership interest. Under the management agreements for these communities, the Company receives management fees as well as reimbursed expenses, which represent the reimbursement of expenses it incurs on behalf of the owners. The accounting policies of the Company's reportable segments are the same as those described in the summary of significant accounting policies in Note 2 . The following table sets forth selected segment financial and operating data: Three Months Ended Nine Months Ended (in thousands) 2019 2018 2019 2018 Revenue: Independent Living (1) $ 136,874 $ 144,631 $ 408,519 $ 462,321 Assisted Living and Memory Care (1) 452,474 483,125 1,361,225 1,537,432 CCRCs (1) 100,104 104,147 305,084 314,012 Health Care Services (1) 111,785 108,276 337,751 328,649 Management Services (2) 207,712 279,883 657,871 820,082 Total revenue $ 1,008,949 $ 1,120,062 $ 3,070,450 $ 3,462,496 Segment operating income: (3) Independent Living $ 49,414 $ 57,106 $ 153,749 $ 186,662 Assisted Living and Memory Care 116,856 144,701 390,699 490,976 CCRCs 14,472 21,809 53,956 70,291 Health Care Services 4,778 9,487 22,118 28,008 Management Services 13,564 18,528 44,756 54,280 Total segment operating income 199,084 251,631 665,278 830,217 General and administrative expense (including non-cash stock-based compensation expense) 56,409 58,796 170,296 203,138 Facility operating lease expense 67,253 70,392 203,610 232,752 Depreciation and amortization 93,550 110,980 284,462 341,351 Goodwill and asset impairment 2,094 5,500 6,254 451,966 Loss (gain) on facility lease termination and modification, net — 2,337 2,006 148,804 Income (loss) from operations $ (20,222 ) $ 3,626 $ (1,350 ) $ (547,794 ) As of (in thousands) September 30, 2019 December 31, 2018 Total assets: Independent Living $ 1,461,087 $ 1,104,774 Assisted Living and Memory Care 4,271,885 3,684,170 CCRCs 786,825 707,819 Health Care Services 273,943 254,950 Corporate and Management Services 580,463 715,547 Total assets $ 7,374,203 $ 6,467,260 (1) All revenue is earned from external third parties in the United States. (2) Management services segment revenue includes management fees and reimbursements of costs incurred on behalf of managed communities. (3) Segment operating income is defined as segment revenues less segment facility operating expense (excluding depreciation and amortization) and costs incurred on behalf of managed communities. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Events CCRC Venture and HCP Master Lease Transactions On October 1, 2019, the Company entered into definitive agreements, including a Master Transactions and Cooperation Agreement (the “MTCA”) and an Equity Interest Purchase Agreement (the “Purchase Agreement”), providing for a multi-part transaction with HCP. The parties subsequently amended the agreements to include one additional entry fee CCRC community as part of the sale of the Company's interest in the CCRC Venture (rather than removing the CCRC from the CCRC Venture for joint marketing and sale). The components of the multi-part transaction include: • CCRC Venture Transaction. Pursuant to the Purchase Agreement, HCP has agreed to acquire the Company's 51% ownership interest in its unconsolidated entry fee CCRC venture with HCP (the “CCRC Venture”), which will hold 14 entry fee CCRCs after giving effect to the internal restructuring described below, for a total purchase price equal to 51% of the equity value of the CCRC Venture, which is measured as $1.06 billion less portfolio debt, subject to a net working capital adjustment. Pursuant to the Purchase Agreement, the parties have agreed to use commercially reasonable efforts to obtain certain governmental approvals and consummate an internal restructuring for the purposes of moving two entry fee CCRCs into a new unconsolidated venture on substantially the same terms as the CCRC Venture and to accommodate the sale of such two communities at a future date. Pursuant to the MTCA, the parties have agreed to terminate the Company’s existing management agreements with 14 entry fee CCRCs, and HCP has agreed to pay the Company a $100 million management agreement termination fee, immediately following the closing of the sale of the Company’s ownership interest in the CCRC Venture. Upon termination of the management agreements, the Company will transition operations of the entry fee CCRCs to a new operator in accordance with the terms of the MTCA. The Company expects its cash proceeds from the sale of its ownership interest to be approximately $291 million net of portfolio debt, subject to the net working capital adjustment. The disposition of the ownership interest in the CCRC Venture is anticipated to also result in the Company recording a gain on sale of assets for accounting purposes. • Master Lease Transactions. Pursuant to the MTCA, the parties have agreed to amend and restate the Company’s existing master lease with HCP pursuant to which the Company will continue to lease 25 communities from HCP, and the Company has agreed to pay $405.5 million to acquire 18 communities that it currently leases from HCP and to reduce its annual rent under the amended and restated master lease, upon which time the 18 communities will be removed from the master lease. In addition, HCP has agreed to transition one leased community to a successor operator. With respect to the continuing 24 communities, the Company’s amended and restated master lease with HCP will have an initial term to expire on December 31, 2027, subject to two extension options at the Company's election for ten years each, which must be exercised with respect to the entire pool of leased communities. Pursuant to the amended and restated master lease, the initial base rent for the 24 communities will be approximately $41.8 million and is subject to an escalator of 2.4% per annum on April 1st of each year. Under the terms of the master lease, HCP has agreed to make available up to $35 million for capital expenditures for a five-year period related to the 24 communities at an initial lease rate of 7.0% . The MTCA and Purchase Agreement contain certain customary representations and warranties made by each party. The Company and HCP have also agreed to certain customary covenants, including that the parties will use commercially reasonable efforts to obtain certain required lender consents and governmental approvals, subject to certain limitations. The parties’ obligations to consummate the transactions contemplated by the MTCA and Purchase Agreement are subject to the satisfaction or waiver of certain conditions, including completion of the internal restructuring, the prior or concurrent closing of the transactions contemplated by the Purchase Agreement, which shall occur no later than December 31, 2020, and the receipt of governmental approvals. The Purchase Agreement may be terminated by either party under certain circumstances, including a material breach by the other party of its obligations under the Purchase Agreement that is not cured within the applicable period or the failure of the closing of the Purchase Agreement to occur on or prior to December 31, 2020. The Company expects to fund its acquisition of the 18 communities with the proceeds from the sale of its interest in the CCRC Venture and non-recourse mortgage financing on the acquired communities. The Company expects the sale of its 51% ownership interest in the CCRC Venture, the terminations of its management agreements on 14 entry fee CCRCs, and its acquisition of the 18 currently leased communities to occur in the first quarter of 2020, and the sales of the two entry fee CCRCs to occur over the next 12 to 18 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q. In the opinion of management, these financial statements include all adjustments, which are of a normal and recurring nature, necessary to present fairly the financial position, results of operations, and cash flows of the Company for all periods presented. Certain information and footnote disclosures included in annual financial statements have been condensed or omitted. The Company believes that the disclosures included are adequate and provide a fair presentation of interim period results. Interim financial statements are not necessarily indicative of the financial position or operating results for an entire year. These interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 14, 2019. Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company's condensed consolidated financial position or results of operations. Except for the changes for the impact of the recently adopted accounting pronouncements discussed in this Note, the Company has consistently applied its accounting policies to all periods presented in these condensed consolidated financial statements. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Brookdale and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Investments in affiliated companies that the Company does not control, but has the ability to exercise significant influence over governance and operations, are accounted for by the equity method. The ownership interest of consolidated entities not wholly-owned by the Company are presented as noncontrolling interests in the accompanying condensed consolidated financial statements. Noncontrolling interest represents the share of consolidated entities owned by third parties. Noncontrolling interest is adjusted for the noncontrolling holder's share of additional contributions, distributions, and the proportionate share of the net income or loss of each respective entity. |
Revenue Recognition | Revenue Recognition Resident Fees Resident fee revenue is reported at the amount that reflects the consideration the Company expects to receive in exchange for the services provided. These amounts are due from residents or third-party payors and include variable consideration for retroactive adjustments, if any, under reimbursement programs. Performance obligations are determined based on the nature of the services provided. Resident fee revenue is recognized as performance obligations are satisfied. Under the Company's senior living residency agreements, which are generally for a contractual term of 30 days to one year, the Company provides senior living services to residents for a stated daily or monthly fee. The Company has elected the lessor practical expedient within Accounting Standards Codification ("ASC") 842, Leases ("ASC 842") and recognizes, measures, presents, and discloses the revenue for services under the Company's senior living residency agreements based upon the predominant component, either the lease or nonlease component, of the contracts. The Company has determined that the services included under the Company’s independent living, assisted living, and memory care residency agreements have the same timing and pattern of transfer. The Company recognizes revenue under ASC 606, Revenue Recognition from Contracts with Customers ("ASC 606") for its independent living, assisted living, and memory care residency agreements for which it has estimated that the nonlease components of such residency agreements are the predominant component of the contract. The Company enters into contracts to provide home health, hospice, and outpatient therapy services. Each service provided under the contract is capable of being distinct, and thus, the services are considered individual and separate performance obligations. The performance obligations are satisfied and revenue is recognized as services are provided. The Company receives payment for services under various third-party payor programs which include Medicare, Medicaid, and other third-party payors. Settlements with third-party payors for retroactive adjustments due to audits, reviews, or investigations are included in the determination of the estimated transaction price for providing services. The Company estimates the transaction price based on the terms of the contract with the payor, correspondence with the payor and historical payment trends, and retroactive adjustments that differ from the Company's estimates are recognized in the period when final settlements are determined. Management Services The Company manages certain communities under contracts which provide periodic management fee payments to the Company. Management fees are generally determined by an agreed upon percentage of gross revenues (as defined in the management agreement). Certain management contracts also provide for an annual incentive fee to be paid to the Company upon achievement of certain metrics identified in the contract. The Company recognizes revenue for community management services in accordance with the provisions of ASC 606. Although there are various management and operational activities performed by the Company under the contracts, the Company has determined that all community operations management activities are a single performance obligation, which is satisfied over time as the services are rendered. The Company estimates the amount of incentive fee revenue expected to be earned, if any, during the annual contract period and revenue is recognized as services are provided. The Company’s estimate of the transaction price for management services also includes the amount of reimbursement due from the owners of the communities for services provided and related costs incurred. Such revenue is included in "reimbursed costs incurred on behalf of managed communities" on the condensed consolidated statements of operations. The related costs are included in "costs incurred on behalf of managed communities" on the condensed consolidated statements of operations. |
Gain (Loss) on Sale of Assets | Gain (Loss) on Sale of Assets The Company regularly enters into real estate transactions which may include the disposal of certain communities, including the associated real estate. The Company recognizes income from real estate sales under ASC 610-20, Other Income - Gains and Losses from Derecognition of Nonfinancial Assets ("ASC 610-20"). Under ASC 610-20, income is recognized when the transfer of control occurs and the Company applies the five-step model for recognition to determine the amount and timing of income to recognize for all real estate sales. The Company accounts for the sale of equity method investments under ASC 860, Transfers and Servicing ("ASC 860"). Under ASC 860, income is recognized when the transfer of control of the equity interest occurs and the Company has no continuing involvement with the transferred financial assets. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability approach which requires recognition of deferred tax assets and liabilities for the differences between the financial reporting and tax basis of assets and liabilities. A valuation allowance reduces deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 820, Fair Value Measurement establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows: Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Cash and cash equivalents and restricted cash are reflected in the accompanying condensed consolidated balance sheets at amounts considered by management to reasonably approximate fair value due to the short maturity. |
Goodwill and Long-lived Asset Impairment | Goodwill The Company tests goodwill for impairment annually as of October 1 or whenever indicators of impairment arise. Factors the Company considers important in its analysis of whether an indicator of impairment exists include a significant decline in the Company's stock price or market capitalization for a sustained period since the last testing date, significant underperformance relative to historical or projected future operating results and significant negative industry or economic trends. The Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. The quantitative goodwill impairment test is based upon a comparison of the estimated fair value of the reporting unit to which the goodwill has been assigned with the reporting unit's carrying value. The Company is not required to calculate the fair value of a reporting unit unless the Company determines, based on a qualitative assessment, that it is more likely than not that its fair value of a reporting unit is less than its carrying value. The fair values used in the quantitative goodwill impairment test are estimated using Level 3 inputs based upon discounted future cash flow projections for the reporting unit. These cash flow projections are based upon a number of estimates and assumptions such as revenue and expense growth rates, capitalization rates, and discount rates. The Company also considers market based measures such as earnings multiples in its analysis of estimated fair values of its reporting units. If the quantitative goodwill impairment test results in a reporting unit's carrying value exceeding its estimated fair value, an impairment charge will be recorded based on the difference. The impairment charge is limited to the amount of goodwill allocated to the reporting unit. Long-lived Asset Impairment Long-lived assets (including right-of-use assets) are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets held for use are assessed by a comparison of the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset, calculated utilizing the lowest level of identifiable cash flows. If estimated future undiscounted net cash flows are less than the carrying amount of the asset then the fair value of the asset is estimated. The impairment expense is determined by comparing the estimated fair value of the asset to its carrying value, with any amount in excess of fair value recognized as an expense in the current period. Undiscounted cash flow projections and estimates of fair value amounts are based on a number of assumptions such as revenue and expense growth rates, estimated holding periods and estimated capitalization rates (Level 3). |
Self-Insurance Liability Accruals | Self-Insurance Liability Accruals The Company is subject to various legal proceedings and claims that arise in the ordinary course of its business. Although the Company maintains general liability and professional liability insurance policies for its owned, leased, and managed communities under a master insurance program, the Company's current policies provide for deductibles for each and every claim. As a result, the Company is, in effect, self-insured for claims that are less than the deductible amounts. In addition, the Company maintains a high deductible workers compensation program and a self-insured employee medical program. |
Lease Accounting | Lease Accounting The following is the Company's lease accounting policy under ASC 842 subsequent to the adoption. Refer to Recently Adopted Accounting Pronouncements in this Note 2 for significant changes that resulted from the adoption effective January 1, 2019. The Company, as lessee, recognizes a right-of-use asset and a lease liability on the Company’s condensed consolidated balance sheet for its community, office, and equipment leases. As of the commencement date of a lease, a lease liability and corresponding right-of-use asset is established on the Company’s condensed consolidated balance sheet at the present value of future minimum lease payments. The Company's community leases generally contain fixed annual rent escalators or annual rent escalators based on an index, such as the consumer price index. The future minimum lease payments recognized on the condensed consolidated balance sheet include fixed payments (including in-substance fixed payments) and variable payments estimated utilizing the index or rate on the lease commencement date. The Company recognizes lease expense as incurred for additional variable payments. For the Company’s leases that do not contain an implicit rate, the Company utilizes its estimated incremental borrowing rate in determining the present value of lease payments based on information available at commencement of the lease, which reflects the fixed rate at which the Company could borrow a similar amount for the same term on a collateralized basis. Leases with an initial term of 12 months or less are not recorded on the Company’s condensed consolidated balance sheet and instead are recognized as lease expense as incurred. The Company, as lessee, makes a determination with respect to each of its community, office, and equipment leases as to whether each should be accounted for as an operating lease or financing lease in accordance with the provisions of ASC 842. The classification criteria is based on estimates regarding the fair value of the leased asset, minimum lease payments, effective cost of funds, the economic life of the asset, and certain other terms in the lease agreements. For operating leases, payments made under operating lease arrangements are accounted for in the Company's condensed consolidated statements of operations as operating lease expense for actual rent paid, generally plus or minus a straight-line adjustment for estimated minimum lease escalators if applicable. The right-of-use asset is generally reduced each period by an amount equal to the difference between the operating lease expense and the amount of expense on the lease liability utilizing the effective interest method. Subsequent to the impairment of an operating lease right-of-use asset, the Company recognizes operating lease expense consisting of the reduction of the right-of-use asset on a straight-line basis over the remaining lease term and the amount of expense on the lease liability utilizing the effective interest method. For financing leases, the Company recognizes interest expense on the lease liability utilizing the effective interest method. Additionally, the right-of-use asset is generally amortized to depreciation and amortization expense on a straight-line basis over the lease term unless the lease contains an option to purchase the underlying asset that the Company is reasonably certain to exercise in which case the asset is depreciated over the useful life of the underlying asset. For transactions in which an owned community is sold and leased back from the buyer (sale-leaseback transactions), the Company recognizes an asset sale and lease accounting is applied if the Company has transferred control of the community. For such transactions, the Company removes the transferred assets from the condensed consolidated balance sheet and a gain or loss on the sale is recognized for the difference between the carrying value of the asset and the transaction price for the sale transaction. For sale‑leaseback transactions in which the Company has not transferred control of the underlying asset, the Company does not recognize an asset sale or derecognize the underlying asset until control is transferred. For such transactions, the Company continues to depreciate the asset over its useful life. Additionally, the Company accounts for any amounts received as a financing lease liability and the Company recognizes interest expense on the financing lease liability utilizing the effective interest method with the interest expense limited to an amount that is not greater than the cash payments on the financing lease liability over the term of the lease. Refer to the Company’s revenue recognition policy for discussion of the accounting policy for residency agreements, which include the lease of an asset. |
Recently Adopted Accounting Pronouncements/Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 amends the existing accounting principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ASU 2016-02 requires a lessee to recognize a right-of-use asset and a lease liability on the condensed consolidated balance sheet for most leases. Additionally, ASU 2016-02 makes targeted changes to lessor accounting, including changes to align certain aspects with the revenue recognition model, and requires enhanced disclosure of lease arrangements. In July 2018, the FASB issued ASU 2018-11, Leases, Targeted Improvements ("ASU 2018-11"). ASU 2018-11 provides entities with a transition method option to not restate comparative periods presented, but to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In addition, ASU 2018-11 provides entities with a practical expedient allowing lessors to not separate nonlease components from the associated lease components when certain criteria are met. The Company adopted these lease accounting standards effective January 1, 2019 and utilized the modified retrospective transition method with no adjustments to comparative periods presented. Additionally, the Company elected the package of practical expedients within ASU 2016-02 that allows an entity to not reassess, as of January 1, 2019, its prior conclusions on whether an existing contract contains a lease, lease classification for existing leases, and whether costs incurred for existing leases qualify as initial direct costs. The Company's adoption of ASU 2016-02 resulted in the recognition of operating lease liabilities of $1.6 billion and right-of-use assets of $1.3 billion on the condensed consolidated balance sheet for its existing community, office, and equipment operating leases based on the remaining present value of the minimum lease payments as of January 1, 2019. The future minimum rental payments recognized on the condensed consolidated balance sheet included fixed payments (including in-substance fixed payments) and variable payments estimated utilizing the index or rate as of January 1, 2019. Such right-of-use asset amounts were recognized based upon the amount of the recognized lease liabilities, adjusted for accrued lease payments, intangible assets, and the recognition of right-of-use asset impairments. As of December 31, 2018, the Company had a net liability of $231.4 million recognized on its condensed consolidated balance sheet for accrued lease payments and intangible assets for operating leases. Additionally, $58.1 million of previously unrecognized right-of-use asset impairments were recognized as a cumulative effect adjustment to beginning accumulated deficit as of January 1, 2019. As a result of the Company’s election of the package of practical expedients within ASU 2016-02, there were no changes to the classification of the Company’s existing operating, capital and financing leases as of January 1, 2019 and there were no changes to the amounts recognized on its condensed consolidated balance sheet for its existing capital and financing leases as of January 1, 2019. Subsequent to the adoption of ASU 2016-02, lessors are required to separately recognize and measure the lease component of a contract with a customer utilizing the provisions of ASC 842 and the nonlease components utilizing the provisions of ASC 606. To separately account for the components, the transaction price is allocated among the components based upon the estimated stand alone selling prices of the components. Additionally, certain components of a contract which were previously included within the lease element recognized in accordance with ASC 840, Leases ("ASC 840") prior to the adoption of ASU 2016-02 (such as common area maintenance services, other basic services, and executory costs) are recognized as nonlease components subject to the provisions of ASC 606 subsequent to the adoption of ASU 2016-02. However, entities are permitted to elect the practical expedient under ASU 2018-11 allowing lessors to not separate nonlease components from the associated lease components when certain criteria are met. Entities that elect to utilize the lease/nonlease component combination practical expedient under ASU 2018-11 upon initial application of ASC 842 are required to apply the practical expedient to all new and existing transactions within a class of underlying assets that qualify for the expedient as of the initial application date. For the year ended December 31, 2018, the Company recognized revenue for housing services under independent living, assisted living, and memory care residency agreements in accordance with the provisions of the former lease accounting standard, ASC 840, and the Company recognized revenue for assistance with activities of daily living, memory care services, healthcare, and personalized health services under independent living, assisted living, and memory care residency agreements in accordance with the provisions of ASC 606. Upon adoption of ASU 2016-02 and ASU 2018-11, the Company elected the lessor practical expedient within ASU 2018-11 and recognizes, measures, presents, and discloses the revenue for housing services under the Company's senior living residency agreements based upon the predominant component, either the lease or nonlease component, of the contracts rather than allocating the consideration and separately accounting for it under ASC 842 and ASC 606. The Company has concluded that the nonlease components of the Company’s independent living, assisted living, and memory care residency agreements are the predominant component of the contract for the Company’s existing agreements as of January 1, 2019. As a result of the Company's election of the package of practical expedients within ASU 2016-02, the Company continued to recognize revenue for existing contracts as of December 31, 2018 over the lease term. In addition, ASU 2016-02 has changed the definition of initial direct costs of a lease, with the initial direct costs that are initially deferred and recognized over the term of the lease limited to costs that are both incremental and direct. The Company concluded that the contract origination costs recognized on the condensed consolidated balance sheet as of December 31, 2018 were in excess of the initial direct costs that would have been deferred under the provisions of ASU 2016-02. As a result of the Company’s election of the package of practical expedients, the contract origination costs recognized on the condensed consolidated balance sheet as of December 31, 2018 continued to be amortized during 2019 over the lease term. Additionally, the Company concluded that certain costs previously deferred upon new contract origination are recognized within facility operating expense in 2019 as incurred. In addition to the previously unrecognized right-of-use asset impairment of $58.1 million , the Company recognized cumulative effect adjustments to beginning accumulated deficit as of January 1, 2019 for the impact of the adoption of accounting standards by its equity method investees and the deferred tax impact of these adjustments. The recognition of the right-of-use assets and corresponding liabilities and the removal of the deferred tax position related to these leases as of December 31, 2018 had a $0.3 million impact on the Company's net deferred tax position. A deferred tax asset of $14.1 million and an increase to the valuation allowance of $13.8 million was recorded against accumulated deficit reflecting the tax impact of the previously unrecognized right-of-use asset impairments. The adoption of the new accounting standards resulted in the following adjustments to the Company's condensed consolidated balance sheet as of January 1, 2019: (in millions) Assets Prepaid expenses and other current assets, net $ 67 Property, plant and equipment and leasehold intangibles, net (11 ) Operating lease right-of-use assets 1,329 Investment in unconsolidated ventures (2 ) Other intangible assets, net (5 ) Other assets, net (73 ) Total assets $ 1,305 Liabilities and Equity Refundable fees and deferred revenue $ 43 Operating lease obligations 1,618 Deferred liabilities (257 ) Other liabilities (43 ) Total liabilities 1,361 Total equity (56 ) Total liabilities and equity $ 1,305 Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 replaces the current incurred loss impairment methodology for credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company will be required to use a forward-looking expected credit loss model for accounts receivable and other financial instruments. ASU 2016-13 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for fiscal years beginning after December 15, 2018. The Company plans to adopt ASU 2016-13 effective January 1, 2020 and will recognize any cumulative effect of the adoption as an adjustment to beginning retained earnings with no adjustments to comparative periods presented. The Company does not expect the impact of the adoption of ASU 2016-13 to have a material effect to its consolidated financial statements and disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of change in accounting principles | The adoption of the new accounting standards resulted in the following adjustments to the Company's condensed consolidated balance sheet as of January 1, 2019: (in millions) Assets Prepaid expenses and other current assets, net $ 67 Property, plant and equipment and leasehold intangibles, net (11 ) Operating lease right-of-use assets 1,329 Investment in unconsolidated ventures (2 ) Other intangible assets, net (5 ) Other assets, net (73 ) Total assets $ 1,305 Liabilities and Equity Refundable fees and deferred revenue $ 43 Operating lease obligations 1,618 Deferred liabilities (257 ) Other liabilities (43 ) Total liabilities 1,361 Total equity (56 ) Total liabilities and equity $ 1,305 |
Acquisitions, Dispositions an_2
Acquisitions, Dispositions and Other Significant Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Disposal Groups | The following table sets forth, for the periods indicated, the amounts included within the Company's condensed consolidated financial statements for the 127 communities that it disposed through sales and lease terminations during the period from January 1, 2018 to September 30, 2019 through the respective disposition dates (of which 77 communities were disposed through sales and lease terminations during the period from July 1, 2018 to September 30, 2019): Three Months Ended Nine Months Ended (in thousands) 2019 2018 2019 2018 Resident fees Independent Living $ — $ 14,099 $ — $ 74,970 Assisted Living and Memory Care 103 45,496 12,385 223,763 CCRCs — 4,401 — 15,106 Senior housing resident fees $ 103 $ 63,996 $ 12,385 $ 313,839 Facility operating expense Independent Living $ — $ 8,588 $ — $ 44,256 Assisted Living and Memory Care 103 35,182 10,204 160,606 CCRCs — 3,785 — 13,701 Senior housing facility operating expense $ 103 $ 47,555 $ 10,204 $ 218,563 Cash facility lease payments $ — $ 13,111 $ 1,451 $ 80,046 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Nonrecurring | The following is a summary of goodwill and asset impairment expense. Three Months Ended Nine Months Ended (in millions) 2019 2018 2019 2018 Goodwill $ — $ — $ — $ 351.7 Property, plant and equipment and leasehold intangibles, net 0.8 2.5 2.0 50.2 Investment in unconsolidated ventures — — — 33.4 Other intangible assets, net — — 2.6 1.7 Assets held for sale 1.3 3.0 1.3 15.0 Other assets, net $ — — $ 0.4 — Goodwill and asset impairment $ 2.1 $ 5.5 $ 6.3 $ 452.0 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Current year grants of restricted shares | Grants of restricted shares under the Company's 2014 Omnibus Incentive Plan were as follows: (in thousands, except for per share amounts) Shares Granted Weighted Average Grant Date Fair Value Total Value Three months ended March 31, 2019 4,047 $ 7.87 $ 31,857 Three months ended June 30, 2019 142 $ 6.51 $ 922 Three months ended September 30, 2019 136 $ 7.55 $ 1,028 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of definite-lived intangible assets | Other intangible assets as of September 30, 2019 and December 31, 2018 are summarized in the following tables: September 30, 2019 (in thousands) Gross Accumulated Net Health care licenses $ 42,776 $ — $ 42,776 Trade names 27,800 (27,800 ) — Total $ 70,576 $ (27,800 ) $ 42,776 December 31, 2018 (in thousands) Gross Accumulated Net Community purchase options $ 4,738 $ — $ 4,738 Health care licenses 42,323 — 42,323 Trade names 27,800 (26,295 ) 1,505 Management contracts 9,610 (6,704 ) 2,906 Total $ 84,471 $ (32,999 ) $ 51,472 |
Schedule of indefinite-lived intangible assets | ther intangible assets as of September 30, 2019 and December 31, 2018 are summarized in the following tables: September 30, 2019 (in thousands) Gross Accumulated Net Health care licenses $ 42,776 $ — $ 42,776 Trade names 27,800 (27,800 ) — Total $ 70,576 $ (27,800 ) $ 42,776 December 31, 2018 (in thousands) Gross Accumulated Net Community purchase options $ 4,738 $ — $ 4,738 Health care licenses 42,323 — 42,323 Trade names 27,800 (26,295 ) 1,505 Management contracts 9,610 (6,704 ) 2,906 Total $ 84,471 $ (32,999 ) $ 51,472 |
Property, Plant and Equipment_2
Property, Plant and Equipment and Leasehold Intangibles, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment and leasehold intangibles, net | As of September 30, 2019 and December 31, 2018 , net property, plant and equipment and leasehold intangibles, which include assets under financing leases, consisted of the following: (in thousands) September 30, 2019 December 31, 2018 Land $ 454,790 $ 455,623 Buildings and improvements 4,812,422 4,749,877 Furniture and equipment 849,573 805,190 Resident and leasehold operating intangibles 319,049 477,827 Construction in progress 80,788 57,636 Assets under financing leases and leasehold improvements 1,832,524 1,776,649 Property, plant and equipment and leasehold intangibles 8,349,146 8,322,802 Accumulated depreciation and amortization (3,163,465 ) (3,047,375 ) Property, plant and equipment and leasehold intangibles, net $ 5,185,681 $ 5,275,427 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Long-term debt as of September 30, 2019 and December 31, 2018 consists of the following: (in thousands) September 30, 2019 December 31, 2018 Mortgage notes payable due 2020 through 2047; weighted average interest rate of 4.77% for the nine months ended September 30, 2019, less debt discount and deferred financing costs of $17.7 million and $18.6 million as of September 30, 2019 and December 31, 2018, respectively (weighted average interest rate of 4.75% in 2018) $ 3,513,386 $ 3,579,931 Other notes payable, weighted average interest rate of 5.79% for the nine months ended September 30, 2019 (weighted average interest rate of 5.85% in 2018) and maturity dates ranging from 2020 to 2021 58,835 60,249 Total long-term debt 3,572,221 3,640,180 Current portion 343,615 294,426 Total long-term debt, less current portion $ 3,228,606 $ 3,345,754 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Lease Costs | A summary of operating and financing lease expense (including the respective presentation on the condensed consolidated statements of operations) and cash flows from leasing transactions is as follows: Operating Leases (in thousands) Three Months Ended Nine Months Ended Facility operating expense $ 4,532 $ 13,761 Facility lease expense 67,253 203,610 Operating lease expense 71,785 217,371 Operating lease expense adjustment 4,814 13,626 Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements (11,043 ) (12,043 ) Operating cash flows from operating leases $ 65,556 $ 218,954 Non-cash recognition of right-of-use assets obtained in exchange for new operating lease obligations $ 22,375 $ 26,356 Financing Leases (in thousands) Three Months Ended Nine Months Ended Depreciation and amortization $ 11,675 $ 35,030 Interest expense: financing lease obligations 16,567 49,959 Financing lease expense $ 28,242 $ 84,989 Operating cash flows from financing leases $ 16,567 $ 49,959 Financing cash flows from financing leases 5,549 16,502 Total cash flows from financing leases $ 22,116 $ 66,461 |
Finance Lease, Liability, Maturity | The aggregate amounts of future minimum lease payments, including community, office, and equipment leases recognized on the condensed consolidated balance sheet as of September 30, 2019 are as follows (in thousands): Year Ending December 31, Operating Leases Financing Leases 2019 (three months) $ 77,495 $ 22,052 2020 312,861 89,090 2021 298,025 90,330 2022 294,696 91,719 2023 290,698 93,190 Thereafter 806,856 429,663 Total lease payments 2,080,631 816,044 Purchase option liability and non-cash gain on future sale of property — 575,791 Imputed interest and variable lease payments (572,238 ) (533,798 ) Total lease obligations $ 1,508,393 $ 858,037 |
Lessee, Operating Lease, Liability, Maturity | The aggregate amounts of future minimum lease payments, including community, office, and equipment leases recognized on the condensed consolidated balance sheet as of September 30, 2019 are as follows (in thousands): Year Ending December 31, Operating Leases Financing Leases 2019 (three months) $ 77,495 $ 22,052 2020 312,861 89,090 2021 298,025 90,330 2022 294,696 91,719 2023 290,698 93,190 Thereafter 806,856 429,663 Total lease payments 2,080,631 816,044 Purchase option liability and non-cash gain on future sale of property — 575,791 Imputed interest and variable lease payments (572,238 ) (533,798 ) Total lease obligations $ 1,508,393 $ 858,037 |
Schedule of Future Minimum Rental Payments for Operating Leases | The aggregate amounts of future minimum operating lease payments, including community, office, and equipment leases not recognized on the condensed consolidated balance sheet under ASC 840 as of December 31, 2018 are as follows (in thousands): Year Ending December 31, Operating Leases 2019 $ 310,340 2020 307,493 2021 290,661 2022 291,114 2023 285,723 Thereafter 786,647 Total lease payments $ 2,271,978 |
Supplemental Disclosure of Ca_2
Supplemental Disclosure of Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental cash flow information | Nine Months Ended (in thousands) 2019 2018 Supplemental Disclosure of Cash Flow Information: Interest paid $ 185,722 $ 198,133 Income taxes paid, net of refunds 1,909 1,542 Capital expenditures, net of related payables Capital expenditures - non-development, net $ 180,187 $ 130,692 Capital expenditures - development, net 18,677 20,084 Capital expenditures - non-development - reimbursable 12,043 1,764 Capital expenditures - development - reimbursable — 1,709 Trade accounts payable (4,522 ) 15,100 Net cash paid $ 206,385 $ 169,349 Acquisition of assets, net of related payables and cash received: Property, plant and equipment and leasehold intangibles, net $ — $ 237,563 Other intangible assets, net 453 (4,345 ) Financing lease obligations — 36,120 Other liabilities — 2,433 Net cash paid $ 453 $ 271,771 Proceeds from sale of assets, net: Prepaid expenses and other assets, net $ (5,298 ) $ (3,006 ) Assets held for sale (41,882 ) (18,758 ) Property, plant and equipment and leasehold intangibles, net (647 ) (91,778 ) Investments in unconsolidated ventures (156 ) (58,179 ) Financing lease obligations — 93,514 Refundable fees and deferred revenue — 8,345 Other liabilities (2,724 ) 2,690 Loss (gain) on sale of assets, net (2,723 ) (64,740 ) Net cash received $ (53,430 ) $ (131,912 ) Lease termination and modification, net: Prepaid expenses and other assets, net $ — $ (2,040 ) Property, plant and equipment and leasehold intangibles, net — (81,320 ) Financing lease obligations — 58,099 Deferred liabilities — 67,950 Loss (gain) on sale of assets, net — (5,761 ) Loss (gain) on facility lease termination and modification, net — 22,260 Net cash paid (1) $ — $ 59,188 Supplemental Schedule of Non-cash Operating, Investing and Financing Activities: Assets designated as held for sale: Prepaid expenses and other assets, net $ (5 ) $ (281 ) Assets held for sale 9,169 162,157 Property, plant and equipment and leasehold intangibles, net (9,164 ) (161,876 ) Net $ — $ — Lease termination and modification, net: Prepaid expenses and other assets, net $ (648 ) $ (4,783 ) Property, plant and equipment and leasehold intangibles, net (1,666 ) (106,264 ) Financing lease obligations — 112,267 Operating lease right-of-use assets (8,644 ) — Operating lease obligations 9,289 — Deferred liabilities — (122,304 ) Other liabilities (337 ) 625 Loss (gain) on sale of assets, net — (6,085 ) Loss (gain) on facility lease termination and modification, net 2,006 126,544 Net $ — $ — (1) The net cash paid to terminate community leases is presented within the condensed consolidated statement of cash flows based upon the lease classification of the terminated leases. Net cash paid of $46.6 million for the termination of operating leases is presented within net cash provided by (used in) operating activities and net cash paid of $12.5 million for the termination of capital leases is presented within net cash provided by (used in) financing activities for the nine months ended September 30, 2018 . During the three months ended June 30, 2019, the Company and its joint venture partner contributed cash in an aggregate amount of $13.3 million to a consolidated joint venture which owns three senior housing communities. The Company obtained a $6.6 million promissory note receivable from its joint venture partner secured by a 50% equity interest in the joint venture in a non-cash exchange for the Company funding the $13.3 million aggregate contribution in cash. Nine Months Ended (in thousands) 2019 2018 Notes receivable: Other assets, net $ 6,566 $ — Noncontrolling interest (6,566 ) — Net $ — $ — Refer to Note 2 for a schedule of the non-cash adjustments to the Company's condensed consolidated balance sheet as of January 1, 2019 as a result of the adoption of new accounting standards and Note 10 for a schedule of the non-cash recognition of right-of-use assets obtained in exchange for new operating lease obligations. Restricted cash consists principally of escrow deposits for real estate taxes, property insurance, and capital expenditures required by certain lenders under mortgage debt agreements and deposits as security for self-insured retention risk under workers' compensation programs and property insurance programs. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sums to the total of the same such amounts shown in the condensed consolidated statements of cash flows. (in thousands) September 30, 2019 December 31, 2018 Reconciliation of cash, cash equivalents, and restricted cash: Cash and cash equivalents $ 241,391 $ 398,267 Restricted cash 33,305 27,683 Long-term restricted cash 40,663 24,268 Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows $ 315,359 $ 450,218 |
Schedule of notes receivable | Nine Months Ended (in thousands) 2019 2018 Notes receivable: Other assets, net $ 6,566 $ — Noncontrolling interest (6,566 ) — Net $ — $ — |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The Company disaggregates its revenue from contracts with customers by payor source, as the Company believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. See details on a reportable segment basis in the tables below. Three Months Ended September 30, 2019 (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total Private pay $ 136,274 $ 435,367 $ 70,353 $ 171 $ 642,165 Government reimbursement 600 17,107 19,931 89,157 126,795 Other third-party payor programs — — 9,820 22,457 32,277 Total resident fee revenue $ 136,874 $ 452,474 $ 100,104 $ 111,785 $ 801,237 Three Months Ended September 30, 2018 (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total Private pay $ 143,963 $ 464,719 $ 73,567 $ 159 $ 682,408 Government reimbursement 668 18,406 20,901 89,100 129,075 Other third-party payor programs — — 9,679 19,017 28,696 Total resident fee revenue $ 144,631 $ 483,125 $ 104,147 $ 108,276 $ 840,179 Nine Months Ended September 30, 2019 (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total Private pay $ 406,667 $ 1,310,867 $ 212,978 $ 554 $ 1,931,066 Government reimbursement 1,852 50,358 61,614 269,428 383,252 Other third-party payor programs — — 30,492 67,769 98,261 Total resident fee revenue $ 408,519 $ 1,361,225 $ 305,084 $ 337,751 $ 2,412,579 Nine Months Ended September 30, 2018 (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total Private pay $ 459,875 $ 1,482,789 $ 217,680 $ 585 $ 2,160,929 Government reimbursement 2,446 54,643 65,986 272,332 395,407 Other third-party payor programs — — 30,346 55,732 86,078 Total resident fee revenue $ 462,321 $ 1,537,432 $ 314,012 $ 328,649 $ 2,642,414 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | The following table sets forth selected segment financial and operating data: Three Months Ended Nine Months Ended (in thousands) 2019 2018 2019 2018 Revenue: Independent Living (1) $ 136,874 $ 144,631 $ 408,519 $ 462,321 Assisted Living and Memory Care (1) 452,474 483,125 1,361,225 1,537,432 CCRCs (1) 100,104 104,147 305,084 314,012 Health Care Services (1) 111,785 108,276 337,751 328,649 Management Services (2) 207,712 279,883 657,871 820,082 Total revenue $ 1,008,949 $ 1,120,062 $ 3,070,450 $ 3,462,496 Segment operating income: (3) Independent Living $ 49,414 $ 57,106 $ 153,749 $ 186,662 Assisted Living and Memory Care 116,856 144,701 390,699 490,976 CCRCs 14,472 21,809 53,956 70,291 Health Care Services 4,778 9,487 22,118 28,008 Management Services 13,564 18,528 44,756 54,280 Total segment operating income 199,084 251,631 665,278 830,217 General and administrative expense (including non-cash stock-based compensation expense) 56,409 58,796 170,296 203,138 Facility operating lease expense 67,253 70,392 203,610 232,752 Depreciation and amortization 93,550 110,980 284,462 341,351 Goodwill and asset impairment 2,094 5,500 6,254 451,966 Loss (gain) on facility lease termination and modification, net — 2,337 2,006 148,804 Income (loss) from operations $ (20,222 ) $ 3,626 $ (1,350 ) $ (547,794 ) As of (in thousands) September 30, 2019 December 31, 2018 Total assets: Independent Living $ 1,461,087 $ 1,104,774 Assisted Living and Memory Care 4,271,885 3,684,170 CCRCs 786,825 707,819 Health Care Services 273,943 254,950 Corporate and Management Services 580,463 715,547 Total assets $ 7,374,203 $ 6,467,260 (1) All revenue is earned from external third parties in the United States. (2) Management services segment revenue includes management fees and reimbursements of costs incurred on behalf of managed communities. (3) Segment operating income is defined as segment revenues less segment facility operating expense (excluding depreciation and amortization) and costs incurred on behalf of managed communities. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Revenue Recognition [Abstract] | |||
Term of residency agreements- minimum | 30 days | ||
Term of residency agreements - maximum | 1 year | ||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||
Total lease obligations | $ 1,508,393 | ||
Operating lease right-of-use assets | 1,221,578 | $ 0 | |
Change in valuation allowance | $ 387,900 | 336,400 | |
ASU 2016-02 | |||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||
Total lease obligations | $ 1,618,000 | ||
Operating lease right-of-use assets | 1,329,000 | ||
Operating lease assets (liabilities) | (231,400) | ||
Cumulative effect change in accounting principle | 58,100 | ||
Deferred tax assets | 14,100 | $ 300 | |
Change in valuation allowance | 13,800 | ||
ASU 2016-02, Impairment Loss | |||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||
Cumulative effect change in accounting principle | $ 58,100 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Balance Sheet Adoption Effect (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Prepaid expenses and other current assets, net | $ 102,949 | $ 106,189 | |||||
Property, plant and equipment and leasehold intangibles, net | 5,185,681 | 5,275,427 | |||||
Operating lease right-of-use assets | 1,221,578 | 0 | |||||
Investment in unconsolidated ventures | 23,211 | 27,528 | |||||
Other intangible assets, net | 42,776 | 51,472 | |||||
Other assets, net | 77,663 | 160,418 | |||||
Total assets | 7,374,203 | 6,467,260 | |||||
Refundable fees and deferred revenue | 81,034 | 62,494 | |||||
Total lease obligations | 1,508,393 | ||||||
Deferred liabilities | 7,066 | 262,761 | |||||
Other liabilities | 154,885 | 197,289 | |||||
Total liabilities | 6,580,407 | 5,448,847 | |||||
Total equity | 793,796 | $ 866,204 | 1,018,413 | $ 889,848 | $ 920,657 | $ 1,530,291 | |
Total liabilities and equity | $ 7,374,203 | $ 6,467,260 | |||||
ASU 2016-02 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Prepaid expenses and other current assets, net | $ 67,000 | ||||||
Property, plant and equipment and leasehold intangibles, net | (11,000) | ||||||
Operating lease right-of-use assets | 1,329,000 | ||||||
Investment in unconsolidated ventures | (2,000) | ||||||
Other intangible assets, net | (5,000) | ||||||
Other assets, net | (73,000) | ||||||
Total assets | 1,305,000 | ||||||
Refundable fees and deferred revenue | 43,000 | ||||||
Total lease obligations | 1,618,000 | ||||||
Deferred liabilities | (257,000) | ||||||
Other liabilities | (43,000) | ||||||
Total liabilities | 1,361,000 | ||||||
Total equity | (56,000) | ||||||
Total liabilities and equity | $ 1,305,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 15, 2018 | |
Unvested Restricted Stock | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities (shares) | 7.6 | 6.2 | 7.6 | 6.5 | |
Warrant | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities (shares) | 9.2 | ||||
Convertible Senior Notes Due June 2018 | Convertible notes payable | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Principal | $ 316.3 | ||||
Interest rate | 2.75% |
Acquisitions, Dispositions an_3
Acquisitions, Dispositions and Other Significant Transactions - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | 15 Months Ended | 21 Months Ended | |||
Sep. 30, 2019USD ($)community | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($)community | Sep. 30, 2019USD ($)community | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)community | Sep. 30, 2019USD ($)community | Sep. 30, 2019USD ($)community | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of unconsolidated joint ventures, interest sold | 5 | |||||||
Number of communities, acquired, previously leased or managed | 6 | |||||||
Operating and financing leases, number of communities | 335 | 335 | 335 | 335 | ||||
Number of communities disposed through sales or termination of lease | 77 | |||||||
Gain (loss) on sale of assets, net | $ | $ 579 | $ 9,833 | $ 2,723 | $ 76,586 | ||||
Assets held for sale | $ | 60,404 | $ 60,404 | $ 93,117 | $ 60,404 | $ 60,404 | |||
Communities Disposed Of Through Sale | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of communities disposed of | 30 | |||||||
Communities Disposed Of Through Lease Terminations | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of communities disposed of | 97 | |||||||
127 Communities Disposed Of By Sales And Lease Terminations | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of communities disposed of | 127 | |||||||
Sale of 3 communities | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of communities disposed of | 3 | |||||||
Net cash proceeds | $ | $ 12,800 | |||||||
Mortgage notes payable | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Payment for debt extinguishment or debt prepayment cost | $ | $ 174,000 | |||||||
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of communities disposed of | 22 | |||||||
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Eight Communities | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of communities disposed of | 8 | |||||||
Net cash proceeds | $ | $ 44,100 | |||||||
Gain (loss) on sale of assets, net | $ | $ 900 | |||||||
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Six Communities Held For Sale | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of communities classified as held for sale | 6 | |||||||
Assets held for sale | $ | 60,400 | $ 60,400 | 60,400 | $ 60,400 | ||||
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Sale Of 22 Communities | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Net cash proceeds | $ | $ 380,700 | |||||||
Gain (loss) on sale of assets, net | $ | $ 1,900 | 188,600 | ||||||
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Mortgage notes payable | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Mortgage debt | $ | 30,800 | 30,800 | $ 31,200 | 30,800 | 30,800 | |||
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Mortgage notes payable | Six Communities Held For Sale | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Mortgage debt | $ | $ 30,800 | $ 30,800 | $ 30,800 | $ 30,800 | ||||
Current Property Ownership Status | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of communities owned | 336 | 336 | 336 | 336 | ||||
Operating and financing leases, number of communities | 335 | 335 | 335 | 335 | ||||
Number of communities managed | 17 | |||||||
Number of communities managed by third party | 106 | 106 | 106 | 106 |
Acquisitions, Dispositions an_4
Acquisitions, Dispositions and Other Significant Transactions - Revenue of Disposal Groups (Details) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Resident fees | $ 1,008,949 | $ 1,120,062 | $ 3,070,450 | $ 3,462,496 |
Communities Disposed Of Through Sale And Lease Terminations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Resident fees | 103 | 63,996 | 12,385 | 313,839 |
Facility operating expense | 103 | 47,555 | 10,204 | 218,563 |
Cash facility lease payments | 0 | 13,111 | 1,451 | 80,046 |
Communities Disposed Of Through Sale And Lease Terminations | Independent Living | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Resident fees | 0 | 14,099 | 0 | 74,970 |
Facility operating expense | 0 | 8,588 | 0 | 44,256 |
Communities Disposed Of Through Sale And Lease Terminations | Assisted Living and Memory Care | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Resident fees | 103 | 45,496 | 12,385 | 223,763 |
Facility operating expense | 103 | 35,182 | 10,204 | 160,606 |
Communities Disposed Of Through Sale And Lease Terminations | CCRCs | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Resident fees | 0 | 4,401 | 0 | 15,106 |
Facility operating expense | $ 0 | $ 3,785 | $ 0 | $ 13,701 |
Acquisitions, Dispositions an_5
Acquisitions, Dispositions and Other Significant Transactions - Welltower Lease and RIDA Venture Restructuring (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2018USD ($)community | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($)leasecommunity | Jun. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($)leasecommunity | |
Business Acquisition [Line Items] | ||||||
Payments for lease termination | $ 0 | $ 12,548 | ||||
Loss on facility lease termination and modification, net | $ 0 | $ (2,337) | $ (2,006) | $ (148,804) | ||
Master leases not renewed, number of communities | community | 11 | 11 | ||||
Welltower Lease Transactions | ||||||
Business Acquisition [Line Items] | ||||||
Number Of Leases Not Renewed | lease | 2 | 2 | ||||
Welltower Inc. | Welltower Lease Transactions | ||||||
Business Acquisition [Line Items] | ||||||
Payments for lease termination | $ 58,000 | |||||
Loss on facility lease termination and modification, net | 22,600 | |||||
Proceeds from sale of equity method investment | 33,500 | |||||
Gain on sale of equity method investment | $ 14,700 | |||||
Potential lease terminations, rent credit percentage | 6.25% | |||||
Welltower Inc. | Welltower Lease Transactions | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Operating leases, rent expense | $ 5,000 | |||||
Welltower RIDEA | ||||||
Business Acquisition [Line Items] | ||||||
Percentage ownership | 20.00% | 20.00% | ||||
37 Communities Disposed Of Through Lease Terminations | Welltower Lease Transactions | ||||||
Business Acquisition [Line Items] | ||||||
Number of communities disposed of | community | 37 |
Acquisitions, Dispositions an_6
Acquisitions, Dispositions and Other Significant Transactions - Ventas Lease Portfolio Restructuring (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Apr. 30, 2018 | Sep. 30, 2019USD ($)lease | Jun. 30, 2019USD ($)community | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)leasecommunity | Sep. 30, 2018USD ($) | Apr. 01, 2018community | |
Business Acquisition [Line Items] | |||||||
Number of communities leased | lease | 244 | 244 | |||||
Loss on facility lease termination and modification, net | $ | $ 0 | $ (2,337) | $ (2,006) | $ (148,804) | |||
Ventas, Inc | Master Lease And Security Agreement | |||||||
Business Acquisition [Line Items] | |||||||
Number of communities leased | community | 128 | ||||||
Management percent fee | 5.00% | ||||||
Loss on facility lease termination and modification, net | $ | $ 125,700 | ||||||
Number of communities exercised to market for sale | community | 28 | ||||||
Option to terminate, rent reduction percentage | 6.25% | ||||||
Number of communities exercised to market for sale and sold | community | 5 | ||||||
Reduction of rent for terminating communities | $ | $ 1,500 |
Acquisitions, Dispositions an_7
Acquisitions, Dispositions and Other Significant Transactions - HCP Master Lease Transaction and RIDEA Ventures Restructuring (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017USD ($) | Nov. 30, 2017USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2019community | Sep. 30, 2018USD ($)community | Mar. 31, 2018USD ($)community | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($)community | Dec. 31, 2018community | |
Business Acquisition [Line Items] | |||||||||
Number of communities disposed through termination of lease | community | 16 | ||||||||
Gain (loss) on sale of assets, net | $ 579 | $ 9,833 | $ 2,723 | $ 76,586 | |||||
Gain (loss) on facility lease termination and modification, net | $ 0 | (2,337) | (2,006) | (148,804) | |||||
Non-cash management contract termination gain | 640 | 5,649 | |||||||
35 Communities Disposed Of Through Management Agreement | RIDEA Ventures Restructuring | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of communities disposed of | community | 35 | ||||||||
Non-cash management contract termination gain | $ 9,300 | $ 600 | $ 800 | $ 5,600 | |||||
Variable Interest Entity, Not Primary Beneficiary, Real Estate Company | RIDEA Ventures Restructuring | |||||||||
Business Acquisition [Line Items] | |||||||||
Proceeds from divestiture of interest in joint venture | $ 32,100 | $ 62,300 | |||||||
Gain (loss) on sale of assets, net | $ 41,700 | ||||||||
Percentage ownership | 10.00% | ||||||||
HCP, Inc. | RIDEA Ventures Restructuring | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of communities acquired | community | 5 | 1 | |||||||
Number of communities formerly leases | community | 2 | ||||||||
Payments to acquire interest in joint venture | $ 242,800 | ||||||||
HCP, Inc. | Master Lease Transactions | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of communities | community | 7 | 7 | |||||||
HCP, Inc. | 33 Communities Disposed Of Through Lease Terminations | Master Lease Transactions | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of communities disposed of | community | 33 | ||||||||
Assets under leases | $ 60,900 | $ 147,800 | |||||||
Financing lease obligations, carrying value | 67,300 | 160,800 | |||||||
Gain (loss) on sale of assets, net | 6,100 | $ 12,600 | |||||||
Number of communities previously subject to sale leaseback transactions | community | 6 | ||||||||
HCP, Inc. | 7 Communities Operating Under Operating and Capital Leases | Master Lease Transactions | |||||||||
Business Acquisition [Line Items] | |||||||||
Gain (loss) on facility lease termination and modification, net | $ (100) | $ 1,800 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Thousands | Jan. 01, 2019USD ($)community | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Marketable securities | $ 49,790 | $ 14,855 | ||||
Debt | 3,572,221 | $ 3,640,180 | ||||
Property, plant and equipment and leasehold intangibles, net | $ 2,500 | $ 50,200 | ||||
ASU 2016-02 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Operating lease right-of-use asset, number of communities impaired | community | 25 | |||||
Operating lease right-of-use assets | $ 56,600 | |||||
Cumulative effect change in accounting principle | $ 58,100 | |||||
Assisted Living and Memory Care | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Goodwill impairment | $ 351,700 | |||||
Level 2 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Marketable securities | $ 49,800 |
Fair Value Measurements - Goodw
Fair Value Measurements - Goodwill and Asset Impairment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Property, plant and equipment and leasehold intangibles, net | $ 2,500 | $ 50,200 | |||
Goodwill and asset impairment | $ 2,094 | 5,500 | $ 6,254 | 451,966 | |
Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Goodwill | 0 | 0 | 0 | 351,700 | |
Property, plant and equipment and leasehold intangibles, net | 800 | 2,500 | 2,000 | 50,200 | |
Investment in unconsolidated ventures | 0 | 0 | $ 33,400 | 0 | 33,400 |
Other intangible assets, net | 0 | 0 | 2,600 | 1,700 | |
Assets held for sale | 1,300 | 3,000 | 1,300 | 15,000 | |
Other assets, net | 0 | 0 | 400 | 0 | |
Goodwill and asset impairment | $ 2,100 | $ 5,500 | $ 6,300 | $ 452,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - Unvested Restricted Stock - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted Shares Granted (in shares) | 136 | 142 | 4,047 |
Value Per Share (in dollars per share) | $ 7.55 | $ 6.51 | $ 7.87 |
Total value of restricted shares granted | $ 1,028 | $ 922 | $ 31,857 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Goodwill [Line Items] | |||||
Goodwill | $ 154,131 | $ 154,131 | $ 154,131 | ||
Amortization expense related to definite-lived intangible assets | 200 | $ 600 | 1,800 | $ 2,300 | |
Independent Living | |||||
Goodwill [Line Items] | |||||
Goodwill | $ 27,300 | 27,300 | |||
Health Care Services | |||||
Goodwill [Line Items] | |||||
Goodwill | $ 126,800 | ||||
Management contracts | |||||
Goodwill [Line Items] | |||||
Non-cash impairment charges | $ 2,600 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, Net - Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Accumulated Amortization | $ (27,800) | $ (32,999) |
Intangible assets, gross carrying amount | 70,576 | 84,471 |
Intangible assets, net | 42,776 | 51,472 |
Community purchase options | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Indefinite lived assets, gross carrying amount | 4,738 | |
Health care licenses | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Indefinite lived assets, gross carrying amount | 42,776 | 42,323 |
Trade names | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived assets, gross carrying amount | 27,800 | 27,800 |
Accumulated Amortization | (27,800) | (26,295) |
Finite lived assets, net | $ 0 | 1,505 |
Management contracts | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived assets, gross carrying amount | 9,610 | |
Accumulated Amortization | (6,704) | |
Finite lived assets, net | $ 2,906 |
Property, Plant and Equipment_3
Property, Plant and Equipment and Leasehold Intangibles, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment and leasehold intangibles gross | $ 8,349,146 | $ 8,349,146 | $ 8,322,802 | ||
Accumulated depreciation and amortization | (3,163,465) | (3,163,465) | (3,047,375) | ||
Property, plant and equipment and leasehold intangibles, net | 5,185,681 | 5,185,681 | 5,275,427 | ||
Finance lease, right-of-use asset | 600,000 | 600,000 | 700,000 | ||
Depreciation and amortization expense | 93,300 | $ 110,400 | 282,600 | $ 339,000 | |
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment and leasehold intangibles gross | 454,790 | 454,790 | 455,623 | ||
Buildings and improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment and leasehold intangibles gross | 4,812,422 | 4,812,422 | 4,749,877 | ||
Furniture and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment and leasehold intangibles gross | 849,573 | 849,573 | 805,190 | ||
Resident and leasehold operating intangibles | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment and leasehold intangibles gross | 319,049 | 319,049 | 477,827 | ||
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment and leasehold intangibles gross | 80,788 | 80,788 | 57,636 | ||
Assets under financing leases and leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment and leasehold intangibles gross | $ 1,832,524 | $ 1,832,524 | $ 1,776,649 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Long-Term Debt, Capital and Financing Leases and Financing Obligations [Line Items] | ||
Total long-term debt | $ 3,572,221 | $ 3,640,180 |
Current portion | 343,615 | 294,426 |
Total long-term debt, less current portion | 3,228,606 | 3,345,754 |
Mortgage notes payable | ||
Long-Term Debt, Capital and Financing Leases and Financing Obligations [Line Items] | ||
Total long-term debt | 3,513,386 | 3,579,931 |
Unamortized debt discount | $ 17,700 | $ 18,600 |
Weighted average interest rate | 4.77% | 4.75% |
Other notes payable | ||
Long-Term Debt, Capital and Financing Leases and Financing Obligations [Line Items] | ||
Total long-term debt | $ 58,835 | $ 60,249 |
Weighted average interest rate | 5.79% | 5.85% |
Debt - Debt (Details)
Debt - Debt (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Mortgage debt | $ 30.8 | $ 31.2 |
Debt - Credit Facilities (Detai
Debt - Credit Facilities (Details) | Dec. 05, 2018USD ($) | Sep. 30, 2019USD ($)community |
Credit Facilities [Line Items] | ||
Number of communities added to borrowing base and agreement during period | community | 3 | |
Fifth Amended and Restated Credit Agreement | Line of Credit | ||
Credit Facilities [Line Items] | ||
Percentage of loan availability from pledged assets that cannot exceed availability from mortgaged assets | 10.00% | |
Letters of credit issued | $ 47,500,000 | |
Fifth Amended and Restated Credit Agreement | Line of Credit | Applicable Margin, Less Than Or Equal To 35% Utilization | ||
Credit Facilities [Line Items] | ||
Percentage of utilization | 35.00% | |
Fifth Amended and Restated Credit Agreement | Line of Credit | Applicable Margin, Greater Than 50% Utilization | ||
Credit Facilities [Line Items] | ||
Percentage of utilization | 50.00% | |
Fifth Amended and Restated Credit Agreement | Line of Credit | Unused Commitment Fee, Outstanding Debt Percentage Greater Than Or Equal To 50% | ||
Credit Facilities [Line Items] | ||
Quarterly commitment fee | 0.25% | |
Outstanding debt percentage | 50.00% | |
Fifth Amended and Restated Credit Agreement | Line of Credit | Unused Commitment Fee, Outstanding Debt Percentage Less Than 50% | ||
Credit Facilities [Line Items] | ||
Quarterly commitment fee | 0.35% | |
Outstanding debt percentage | 50.00% | |
Fifth Amended and Restated Credit Agreement | Line of Credit | Minimum | Applicable Margin, Greater Than 35% But Less Than Or Equal To 50% Utilization | ||
Credit Facilities [Line Items] | ||
Percentage of utilization | 35.00% | |
Fifth Amended and Restated Credit Agreement | Line of Credit | Maximum | Applicable Margin, Greater Than 35% But Less Than Or Equal To 50% Utilization | ||
Credit Facilities [Line Items] | ||
Percentage of utilization | 50.00% | |
Fifth Amended and Restated Credit Agreement | Line of Credit | LIBOR | Applicable Margin, Less Than Or Equal To 35% Utilization | ||
Credit Facilities [Line Items] | ||
Basis spread on variable rate basis | 2.25% | |
Fifth Amended and Restated Credit Agreement | Line of Credit | LIBOR | Applicable Margin, Greater Than 35% But Less Than Or Equal To 50% Utilization | ||
Credit Facilities [Line Items] | ||
Basis spread on variable rate basis | 2.75% | |
Fifth Amended and Restated Credit Agreement | Line of Credit | LIBOR | Applicable Margin, Greater Than 50% Utilization | ||
Credit Facilities [Line Items] | ||
Basis spread on variable rate basis | 3.25% | |
Fifth Amended and Restated Credit Agreement | Line of Credit | LIBOR | Minimum | ||
Credit Facilities [Line Items] | ||
Basis spread on variable rate basis | 2.25% | |
Fifth Amended and Restated Credit Agreement | Line of Credit | LIBOR | Maximum | ||
Credit Facilities [Line Items] | ||
Basis spread on variable rate basis | 3.25% | |
Fourth Amended and Restated Credit Agreement | Line of Credit | ||
Credit Facilities [Line Items] | ||
Line of credit | 0 | |
Fourth Amended and Restated Credit Agreement | Line of Credit | LIBOR | Minimum | ||
Credit Facilities [Line Items] | ||
Basis spread on variable rate basis | 2.50% | |
Fourth Amended and Restated Credit Agreement | Line of Credit | LIBOR | Maximum | ||
Credit Facilities [Line Items] | ||
Basis spread on variable rate basis | 3.50% | |
Revolving Credit Facility | Fifth Amended and Restated Credit Agreement | Line of Credit | ||
Credit Facilities [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 250,000,000 | |
Line of credit facility, remaining borrowing capacity | 164,200,000 | |
Letter of credit sublimit | Fifth Amended and Restated Credit Agreement | Line of Credit | ||
Credit Facilities [Line Items] | ||
Credit facility, maximum borrowing capacity | 60,000,000 | |
Letters of credit issued | 41,200,000 | |
Swingline Line of Credit | Fifth Amended and Restated Credit Agreement | Line of Credit | ||
Credit Facilities [Line Items] | ||
Credit facility, maximum borrowing capacity | 50,000,000 | |
Option to increase maximum borrowing capacity | Fifth Amended and Restated Credit Agreement | Line of Credit | ||
Credit Facilities [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 100,000,000 | |
Letter of Credit | Fifth Amended and Restated Credit Agreement | Line of Credit | ||
Credit Facilities [Line Items] | ||
Credit facility, maximum borrowing capacity | $ 47,500,000 |
Debt - 2019 Financings (Details
Debt - 2019 Financings (Details) | Aug. 29, 2019USD ($)community | May 07, 2019USD ($)community |
Mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Percentage of principal bearing fixed rate | 75.00% | 60.00% |
Fixed rate | 3.35% | 4.52% |
Percentage of principal bearing variable rate | 25.00% | 40.00% |
Mortgage notes payable | Non-Recourse Supplemental Loan | ||
Debt Instrument [Line Items] | ||
Face amount | $ 160,300,000 | $ 111,100,000 |
Mortgage notes payable | Mortgage Debt Due 2019 | ||
Debt Instrument [Line Items] | ||
Extinguishment of debt | $ 139,200,000 | $ 155,500,000 |
Secured debt | Non-Recourse First Mortgages | ||
Debt Instrument [Line Items] | ||
Number of communities securing debt | community | 5 | 14 |
LIBOR | Mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate basis | 217.00% | 223.00% |
Leases (Details)
Leases (Details) | 9 Months Ended |
Sep. 30, 2019leasecommunity | |
Leases [Abstract] | |
Operating and financing leases, number of communities | community | 335 |
Operating leases, number of communities | 244 |
Financing leases, number of communities | 91 |
Operating lease, weighted average remaining lease term | 7 years 1 month 6 days |
Finance lease, weighted average remaining lease term | 8 years 6 months |
Operating lease, weighted average discount rate, percent | 8.60% |
Finance lease, weighted average discount rate, percent | 7.80% |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Finance and operating lease, renewal term | 5 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Finance and operating lease, renewal term | 20 years |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Leases [Abstract] | ||||
Facility operating expense | $ 4,532 | $ 13,761 | ||
Facility lease expense | 67,253 | $ 70,392 | 203,610 | $ 232,752 |
Operating lease expense | 71,785 | 217,371 | ||
Operating lease expense adjustment | 4,814 | 13,626 | ||
Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements | (11,043) | (12,043) | ||
Operating cash flows from operating leases | 65,556 | 218,954 | ||
Non-cash recognition of right-of-use assets obtained in exchange for new operating lease obligations | 22,375 | 26,356 | ||
Depreciation and amortization | 11,675 | 35,030 | ||
Interest expense: financing lease obligations | 16,567 | $ 20,896 | 49,959 | $ 66,216 |
Financing lease expense | 28,242 | 84,989 | ||
Operating cash flows from financing leases | 16,567 | 49,959 | ||
Financing cash flows from financing leases | 5,549 | 16,502 | ||
Total cash flows from financing leases | $ 22,116 | $ 66,461 |
Leases - Maturity ASC 842 (Deta
Leases - Maturity ASC 842 (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating Leases | |
2019 | $ 77,495 |
2020 | 312,861 |
2021 | 298,025 |
2022 | 294,696 |
2023 | 290,698 |
Thereafter | 806,856 |
Total lease payments | 2,080,631 |
Imputed interest and variable lease payments | (572,238) |
Total lease obligations | 1,508,393 |
Financing Leases | |
2019 | 22,052 |
2020 | 89,090 |
2021 | 90,330 |
2022 | 91,719 |
2023 | 93,190 |
Thereafter | 429,663 |
Total lease payments | 816,044 |
Purchase option liability and non-cash gain on future sale of property | 575,791 |
Imputed interest and variable lease payments | (533,798) |
Total lease obligations | $ 858,037 |
Leases - Maturity ASC 840 (Deta
Leases - Maturity ASC 840 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 310,340 |
2020 | 307,493 |
2021 | 290,661 |
2022 | 291,114 |
2023 | 285,723 |
Thereafter | 786,647 |
Total lease payments | $ 2,271,978 |
Supplemental Disclosure of Ca_3
Supplemental Disclosure of Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Supplemental Cash Flow Information [Abstract] | ||||
Interest paid | $ 185,722 | $ 198,133 | ||
Income taxes paid, net of refunds | 1,909 | 1,542 | ||
Net cash paid | 206,385 | 169,349 | ||
Prepaid expenses and other assets, net | 50,387 | 28,118 | ||
Loss (gain) on sale of assets, net | $ (579) | $ (9,833) | (2,723) | (76,586) |
Loss (gain) on facility lease termination and modification, net | $ 0 | $ 2,337 | 2,006 | 148,804 |
Net cash paid | 0 | 12,548 | ||
Additions to property, plant and equipment and leasehold improvements | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Net cash paid | 206,385 | 169,349 | ||
Trade accounts payable | (4,522) | 15,100 | ||
Acquisition of assets, net of related payables and cash received | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Property, plant and equipment and leasehold intangibles, net | 0 | 237,563 | ||
Other intangible assets, net | 453 | (4,345) | ||
Financing lease obligations | 0 | 36,120 | ||
Other liabilities | 0 | 2,433 | ||
Net cash paid | 453 | 271,771 | ||
Proceeds from sale of assets, net | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Financing lease obligations | 0 | 93,514 | ||
Prepaid expenses and other assets, net | (5,298) | (3,006) | ||
Assets held for sale | (41,882) | (18,758) | ||
Property, plant and equipment and leasehold intangibles, net | (647) | (91,778) | ||
Investments in unconsolidated ventures | (156) | (58,179) | ||
Refundable fees and deferred revenue | 0 | 8,345 | ||
Other liabilities | (2,724) | 2,690 | ||
Loss (gain) on sale of assets, net | (2,723) | (64,740) | ||
Net cash received | (53,430) | (131,912) | ||
Lease termination And modification, net | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Prepaid expenses and other assets, net | 0 | (2,040) | ||
Property, plant and equipment and leasehold intangibles, net | 0 | (81,320) | ||
Financing lease obligations | 0 | 58,099 | ||
Loss (gain) on sale of assets, net | 0 | (5,761) | ||
Deferred liabilities | 0 | 67,950 | ||
Loss (gain) on facility lease termination and modification, net | 0 | 22,260 | ||
Net cash paid | 0 | 59,188 | ||
Assets designated as held for sale | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Prepaid expenses and other assets, net | 5 | 281 | ||
Assets held for sale | (9,169) | (162,157) | ||
Property, plant and equipment and leasehold intangibles, net | (9,164) | (161,876) | ||
Net | 0 | 0 | ||
Noncash lease termination and modification, net | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Prepaid expenses and other assets, net | 648 | 4,783 | ||
Property, plant and equipment and leasehold intangibles, net | 1,666 | 106,264 | ||
Financing lease obligations | 0 | 112,267 | ||
Other liabilities | 337 | (625) | ||
Loss (gain) on sale of assets, net | 0 | (6,085) | ||
Operating lease right-of-use assets | (8,644) | 0 | ||
Operating lease obligations | 9,289 | 0 | ||
Deferred liabilities | 0 | (122,304) | ||
Loss (gain) on facility lease termination and modification, net | 2,006 | 126,544 | ||
Net | 0 | 0 | ||
Non-development | Additions to property, plant and equipment and leasehold improvements | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Net cash paid | 180,187 | 130,692 | ||
Development | Additions to property, plant and equipment and leasehold improvements | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Net cash paid | 18,677 | 20,084 | ||
Non-development - reimbursable | Additions to property, plant and equipment and leasehold improvements | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Net cash paid | 12,043 | 1,764 | ||
Development - reimbursable | Additions to property, plant and equipment and leasehold improvements | ||||
Supplemental Cash Flow Information [Abstract] | ||||
Net cash paid | $ 0 | $ 1,709 |
Supplemental Disclosure of Ca_4
Supplemental Disclosure of Cash Flow Information - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2019USD ($)community | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | |
Related Party Transaction [Line Items] | |||
Net cash paid for termination of operating leases | $ 0 | $ 33,596 | |
Joint Venture | |||
Related Party Transaction [Line Items] | |||
Payments to acquire interest in joint venture | $ 13,300 | ||
Number of communities owned | community | 3 | ||
Percentage ownership | 50.00% | ||
Promissory Note | Joint Venture | |||
Related Party Transaction [Line Items] | |||
Notes receivable | $ 6,600 | ||
Lease termination And modification, net | |||
Related Party Transaction [Line Items] | |||
Net cash paid for termination of operating leases | 46,600 | ||
Payments (proceeds) for termination of capital and financing leases, financing activities | $ 12,500 |
Supplemental Disclosure of Ca_5
Supplemental Disclosure of Cash Flow Information - Notes Receivable (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | ||
Other assets, net | $ 6,566 | $ 0 |
Noncontrolling interest | (6,566) | 0 |
Net | $ 0 | $ 0 |
Supplemental Disclosure of Ca_6
Supplemental Disclosure of Cash Flow Information - Cash and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 241,391 | $ 398,267 | ||
Restricted cash | 33,305 | 27,683 | ||
Long-term restricted cash | 40,663 | 24,268 | ||
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows | $ 315,359 | $ 450,218 | $ 200,098 | $ 282,546 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Valuation Allowance [Line Items] | ||||||
Gross deferred federal, state and local tax benefit | $ 19.4 | $ 39 | ||||
Deferred federal, state and local tax benefit | 19.4 | 40.7 | ||||
Deferred tax assets, tax deferred expense, employee compensation | (1.7) | $ (1.7) | (1.7) | |||
Change in valuation allowance | 17.8 | 37.7 | ||||
Valuation allowance | $ 387.9 | 387.9 | $ 336.4 | |||
Federal and State | ||||||
Valuation Allowance [Line Items] | ||||||
Deferred federal, state and local tax benefit | $ 15.4 | $ 71.3 | ||||
Change in valuation allowance | $ (2.7) | $ 39.4 | $ 52.2 | |||
ASC 842 | ||||||
Valuation Allowance [Line Items] | ||||||
Change in valuation allowance | $ 13.8 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 1,008,949 | $ 1,120,062 | $ 3,070,450 | $ 3,462,496 |
Private pay | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 642,165 | 682,408 | 1,931,066 | 2,160,929 |
Government reimbursement | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 126,795 | 129,075 | 383,252 | 395,407 |
Other third-party payor programs | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 32,277 | 28,696 | 98,261 | 86,078 |
Total resident fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 801,237 | 840,179 | 2,412,579 | 2,642,414 |
Independent Living | Private pay | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 136,274 | 143,963 | 406,667 | 459,875 |
Independent Living | Government reimbursement | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 600 | 668 | 1,852 | 2,446 |
Independent Living | Other third-party payor programs | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Independent Living | Total resident fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 136,874 | 144,631 | 408,519 | 462,321 |
Assisted Living and Memory Care | Private pay | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 435,367 | 464,719 | 1,310,867 | 1,482,789 |
Assisted Living and Memory Care | Government reimbursement | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 17,107 | 18,406 | 50,358 | 54,643 |
Assisted Living and Memory Care | Other third-party payor programs | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Assisted Living and Memory Care | Total resident fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 452,474 | 483,125 | 1,361,225 | 1,537,432 |
CCRCs | Private pay | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 70,353 | 73,567 | 212,978 | 217,680 |
CCRCs | Government reimbursement | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 19,931 | 20,901 | 61,614 | 65,986 |
CCRCs | Other third-party payor programs | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 9,820 | 9,679 | 30,492 | 30,346 |
CCRCs | Total resident fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 100,104 | 104,147 | 305,084 | 314,012 |
Health Care Services | Private pay | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 171 | 159 | 554 | 585 |
Health Care Services | Government reimbursement | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 89,157 | 89,100 | 269,428 | 272,332 |
Health Care Services | Other third-party payor programs | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 22,457 | 19,017 | 67,769 | 55,732 |
Health Care Services | Total resident fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 111,785 | $ 108,276 | $ 337,751 | $ 328,649 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Monthly resident fees | $ 31.6 | $ 50.6 | |
Revenue recognized | 83.7 | $ 76.2 | |
Deferred Revenue and Credits | |||
Disaggregation of Revenue [Line Items] | |||
Contract with customer, liability | $ 75.8 | $ 106.4 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 5 | ||||
Revenue | $ 1,008,949 | $ 1,120,062 | $ 3,070,450 | $ 3,462,496 | |
Segment Operating Income | 199,084 | 251,631 | 665,278 | 830,217 | |
General and administrative expense (including non-cash stock-based compensation expense) | 56,409 | 58,796 | 170,296 | 203,138 | |
Facility lease expense | 67,253 | 70,392 | 203,610 | 232,752 | |
Depreciation and amortization | 93,550 | 110,980 | 284,462 | 341,351 | |
Goodwill and asset impairment | 2,094 | 5,500 | 6,254 | 451,966 | |
Loss (gain) on facility lease termination and modification, net | 0 | 2,337 | 2,006 | 148,804 | |
Income (loss) from operations | (20,222) | 3,626 | (1,350) | (547,794) | |
Total assets | 7,374,203 | 7,374,203 | $ 6,467,260 | ||
Operating Segments | Independent Living | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 136,874 | 144,631 | 408,519 | 462,321 | |
Segment Operating Income | 49,414 | 57,106 | 153,749 | 186,662 | |
Total assets | 1,461,087 | 1,461,087 | 1,104,774 | ||
Operating Segments | Assisted Living and Memory Care | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 452,474 | 483,125 | 1,361,225 | 1,537,432 | |
Segment Operating Income | 116,856 | 144,701 | 390,699 | 490,976 | |
Total assets | 4,271,885 | 4,271,885 | 3,684,170 | ||
Operating Segments | CCRCs Rental | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 100,104 | 104,147 | 305,084 | 314,012 | |
Segment Operating Income | 14,472 | 21,809 | 53,956 | 70,291 | |
Total assets | 786,825 | 786,825 | 707,819 | ||
Operating Segments | Health Care Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 111,785 | 108,276 | 337,751 | 328,649 | |
Segment Operating Income | 4,778 | 9,487 | 22,118 | 28,008 | |
Total assets | 273,943 | 273,943 | 254,950 | ||
Operating Segments | Management Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 207,712 | 279,883 | 657,871 | 820,082 | |
Segment Operating Income | 13,564 | $ 18,528 | 44,756 | $ 54,280 | |
Total assets | $ 580,463 | $ 580,463 | $ 715,547 |
Subsequent Event (Details)
Subsequent Event (Details) $ in Millions | Oct. 01, 2019USD ($)communityentry_feeextension_option |
Subsequent Event | |
Subsequent Event [Line Items] | |
Number of additional entry fee | entry_fee | 1 |
Number of communities, acquired, previously leased or managed | 18 |
CCRC Ventures, LLC | CCRCs | Subsequent Event | |
Subsequent Event [Line Items] | |
Business acquisition, percentage of voting interests acquired | 51.00% |
Number of entry fee | entry_fee | 14 |
Payments to acquire interest in joint venture | $ | $ 1,060 |
Number of communities to be sold at a future date | 2 |
Number of entry fee, sales | entry_fee | 2 |
CCRC Ventures, LLC | CCRCs | Minimum | Subsequent Event | |
Subsequent Event [Line Items] | |
Number of entry fee, sales, period | 12 months |
CCRC Ventures, LLC | CCRCs | Maximum | Subsequent Event | |
Subsequent Event [Line Items] | |
Number of entry fee, sales, period | 18 months |
HCP, Inc. | CCRCs | Subsequent Event | |
Subsequent Event [Line Items] | |
Business acquisition, percentage of voting interests acquired | 51.00% |
Payments (proceeds) for management agreement termination fee | $ | $ 100 |
Proceeds from divestiture of business | $ | $ 291 |
Master Lease Transactions | Subsequent Event | |
Subsequent Event [Line Items] | |
Number of continuing communities | 24 |
Operating leases, rent expense | $ | $ 41.8 |
Operating leases, rent expense, annual escalator rate | 2.40% |
Operating lease, initial lease rate | 7.00% |
Master Lease Transactions | HCP, Inc. | |
Subsequent Event [Line Items] | |
Operating lease, capital expenditures, period | 5 years |
Master Lease Transactions | HCP, Inc. | Subsequent Event | |
Subsequent Event [Line Items] | |
Payments to acquire interest in joint venture | $ | $ 405.5 |
Number of communities leased | 25 |
Number of communities, acquired, previously leased or managed | 18 |
Number of leases communities transferred to successor operator | 1 |
Number of continuing communities | 24 |
Lessee, operating lease, number of extensions | extension_option | 2 |
Lessee, operating lease, number of extensions, term | 10 years |
Operating lease, capital expenditures, availability | $ | $ 35 |
Uncategorized Items - bkdq32019
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (55,885,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 0 |