Leases (Tables)
|
12 Months Ended |
Dec. 31, 2014
|
Leases [Abstract] |
|
Summary of Company's Facility Lease Agreements |
The following
table summarizes each of the Company’s facility lease
agreements as of December 31, 2014 (dollars in
millions):
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Landlord
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|
Date of
Lease |
|
Number
of
Communities |
|
|
Value
of
Transaction |
|
|
Term
|
|
Initial
Lease
Rate(1) |
|
|
Lease
Acquisition
Costs(2) |
|
|
Deferred
Gains / Lease
Concessions(3) |
|
Ventas
|
|
September 30, 2005 |
|
|
6 |
|
|
$ |
84.6 |
|
|
(4)
(Two five-year renewals)
|
|
|
8 |
% |
|
$ |
1.4 |
|
|
$ |
4.6 |
|
Ventas
|
|
October 18,
2005 |
|
|
1 |
|
|
|
19.5 |
|
|
(4)
(Two
five-year renewals)
|
|
|
8 |
% |
|
|
0.2 |
|
|
|
— |
|
Ventas
|
|
June 8,
2006 |
|
|
1 |
|
|
|
19.1 |
|
|
(4)
(Two
five-year renewals)
|
|
|
8 |
% |
|
|
0.4 |
|
|
|
— |
|
Ventas
|
|
January 31,
2008 |
|
|
1 |
|
|
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5.0 |
|
|
(4)
(Two
five-year renewals)
|
|
|
7.75 |
% |
|
|
0.2 |
|
|
|
— |
|
Ventas
|
|
June 27,
2012 |
|
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2 |
|
|
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43.3 |
|
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(4)
(Two
five-year renewals)
|
|
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6.75 |
% |
|
|
0.8 |
|
|
|
— |
|
HCP
|
|
May 1,
2006 |
|
|
3 |
|
|
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54.0 |
|
|
(5)
(Two ten-year
renewals)
|
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|
8 |
% |
|
|
0.3 |
|
|
|
12.8 |
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HCP
|
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May 31,
2006 |
|
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6 |
|
|
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43.0 |
|
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10
years
(Two ten-year renewals)
|
|
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8 |
% |
|
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0.2 |
|
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|
0.6 |
|
HCP
|
|
December 1,
2006 |
|
|
4 |
|
|
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51.0 |
|
|
(5)
(Two ten-year
renewals)
|
|
|
8 |
% |
|
|
0.7 |
|
|
|
— |
|
HCP
|
|
December 14,
2006 |
|
|
1 |
|
|
|
18.0 |
|
|
(5)
(Two ten-year
renewals)
|
|
|
7.75 |
% |
|
|
0.3 |
|
|
|
— |
|
HCP
|
|
April 11,
2007 |
|
|
1 |
|
|
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8.0 |
|
|
(5)
(Two ten-year
renewals)
|
|
|
7.25 |
%0.1 |
|
|
|
|
|
|
— |
|
HCN
|
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April 16,
2010 |
|
|
5 |
|
|
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48.5 |
|
|
15
years
(One 15-year
renewal)
|
|
|
8.25 |
% |
|
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0.6 |
|
|
|
0.8 |
|
HCN
|
|
May 1,
2010 |
|
|
3 |
|
|
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36.0 |
|
|
15
years
(One 15-year
renewal)
|
|
|
8.25 |
% |
|
|
0.2 |
|
|
|
0.4 |
|
HCN
|
|
September 10,
2010 |
|
|
12 |
|
|
|
104.6 |
|
|
15
years
(One 15-year
renewal)
|
|
|
8.50 |
% |
|
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0.4 |
|
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|
2.0 |
|
HCN
|
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April 8, 2011 |
|
|
4 |
|
|
|
141.0 |
|
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15
years
(One 15-year
renewal)
|
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7.25 |
% |
|
|
0.9 |
|
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16.3 |
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Subtotal
|
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6.7 |
|
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|
37.5 |
|
Accumulated amortization
through December 31, 2014
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(3.5 |
) |
|
|
— |
|
Accumulated deferred
gains / lease concessions recognized through December 31,
2014
|
|
|
|
|
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|
— |
|
|
|
(18.0 |
) |
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Net lease acquisition
costs / deferred gains / lease concessions as of December 31,
2014
|
|
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|
|
$ |
3.2 |
|
|
$ |
19.5 |
|
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(1) |
Initial lease rates are
measured against agreed upon fair market values and are subject to
conditional lease escalation provisions as set forth in each
respective lease agreement. |
(2) |
Lease acquisition costs
are being amortized over the respective initial lease
terms. |
(3) |
Deferred gains of $34.9
million and lease concessions of $2.6 million are being recognized
in the Company’s Consolidated Statements of Operations and
Comprehensive Loss as a reduction in facility lease expense over
the respective initial lease terms. Lease concessions of $0.6
million relate to the transaction with HCP on May 31, 2006,
and $2.0 million relate to the transaction with HCN on
September 10, 2010. |
(4) |
Effective June 27,
2012, the Company executed a lease amendment with Ventas. All of
the leased communities in the Ventas lease portfolio were modified
to be coterminous expiring on September 30, 2020, with two
5-year renewal extensions available at the Company’s
option. |
(5) |
On November 11,
2013, the Company executed a third amendment to the master lease
agreement associated with nine of its leases with HCP to facilitate
a $3.3 million capital improvement project for one of the leased
properties and extend the respective lease terms through
October 31, 2020, with two 10-year renewal extensions
available at the Company’s option. |
|
Summary of Future Minimum Lease Commitments |
The Company
incurred $60.9 million, $58.8 million, and $58.5 million in lease
expense during fiscal 2014, 2013, and 2012, respectively. Future
minimum lease commitments as of December 31, 2014, are as
follows (in thousands):
|
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|
2015
|
|
$ |
63,487 |
|
2016
|
|
|
60,657 |
|
2017
|
|
|
59,221 |
|
2018
|
|
|
59,224 |
|
2019
|
|
|
59,206 |
|
Thereafter
|
|
|
194,136 |
|
|
|
|
|
|
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|
$ |
495,931 |
|
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|
Schedule of Quarterly Financial Information |
The following
table presents certain unaudited quarterly financial information
for each of the four quarters ended December 31, 2014 and
2013. This information has been prepared on the same basis as the
audited consolidated financial statements of the Company and
include, in the opinion of the Company’s management, all
adjustments (consisting of normal recurring adjustments) necessary
to present fairly the quarterly results when read in conjunction
with the audited consolidated financial statements of the
Company.
|
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|
2014 Calendar
Quarters |
|
|
|
First |
|
|
Second |
|
|
Third |
|
|
Fourth |
|
|
|
(In thousands, except
per share amounts) |
|
Total revenues
|
|
$ |
91,857 |
|
|
$ |
93,425 |
|
|
$ |
98,483 |
|
|
$ |
100,160 |
|
Income from
operations
|
|
|
2,615 |
|
|
|
3,149 |
|
|
|
2,679 |
|
|
|
5,457 |
|
Net loss and
comprehensive loss
|
|
|
(4,647 |
) |
|
|
(9,819 |
) |
|
|
(5,759 |
) |
|
|
(3,901 |
) |
Net loss per share,
basic
|
|
$ |
(0.16 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.13 |
) |
Net loss per share,
diluted
|
|
$ |
(0.16 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.13 |
) |
Weighted average shares
outstanding, basic
|
|
|
28,146 |
|
|
|
28,298 |
|
|
|
28,371 |
|
|
|
28,387 |
|
Weighted average shares
outstanding, fully diluted
|
|
|
28,146 |
|
|
|
28,298 |
|
|
|
28,371 |
|
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|
28,387 |
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|
2013 Calendar
Quarters |
|
|
|
First |
|
|
Second |
|
|
Third |
|
|
Fourth |
|
|
|
(In thousands, except
per share amounts) |
|
Total revenues
|
|
$ |
86,225 |
|
|
$ |
87,219 |
|
|
$ |
87,983 |
|
|
$ |
88,935 |
|
Income from
operations
|
|
|
2,763 |
|
|
|
2,963 |
|
|
|
2,900 |
|
|
|
2,624 |
|
Net loss and
comprehensive loss
|
|
|
(2,076 |
) |
|
|
(2,070 |
) |
|
|
(9,963 |
) |
|
|
(2,395 |
) |
Net loss per share,
basic
|
|
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.08 |
) |
Net loss per share,
diluted
|
|
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.08 |
) |
Weighted average shares
outstanding, basic
|
|
|
27,584 |
|
|
|
27,809 |
|
|
|
27,911 |
|
|
|
27,949 |
|
Weighted average shares
outstanding, fully diluted
|
|
|
27,584 |
|
|
|
27,809 |
|
|
|
27,911 |
|
|
|
27,949 |
|
|
Quarterly Financial Information |
18. |
Quarterly Financial
Information (Unaudited) |
The following
table presents certain unaudited quarterly financial information
for each of the four quarters ended December 31, 2014 and
2013. This information has been prepared on the same basis as the
audited consolidated financial statements of the Company and
include, in the opinion of the Company’s management, all
adjustments (consisting of normal recurring adjustments) necessary
to present fairly the quarterly results when read in conjunction
with the audited consolidated financial statements of the
Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Calendar
Quarters |
|
|
|
First |
|
|
Second |
|
|
Third |
|
|
Fourth |
|
|
|
(In thousands, except
per share amounts) |
|
Total revenues
|
|
$ |
91,857 |
|
|
$ |
93,425 |
|
|
$ |
98,483 |
|
|
$ |
100,160 |
|
Income from
operations
|
|
|
2,615 |
|
|
|
3,149 |
|
|
|
2,679 |
|
|
|
5,457 |
|
Net loss and
comprehensive loss
|
|
|
(4,647 |
) |
|
|
(9,819 |
) |
|
|
(5,759 |
) |
|
|
(3,901 |
) |
Net loss per share,
basic
|
|
$ |
(0.16 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.13 |
) |
Net loss per share,
diluted
|
|
$ |
(0.16 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.13 |
) |
Weighted average shares
outstanding, basic
|
|
|
28,146 |
|
|
|
28,298 |
|
|
|
28,371 |
|
|
|
28,387 |
|
Weighted average shares
outstanding, fully diluted
|
|
|
28,146 |
|
|
|
28,298 |
|
|
|
28,371 |
|
|
|
28,387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 Calendar
Quarters |
|
|
|
First |
|
|
Second |
|
|
Third |
|
|
Fourth |
|
|
|
(In thousands, except
per share amounts) |
|
Total revenues
|
|
$ |
86,225 |
|
|
$ |
87,219 |
|
|
$ |
87,983 |
|
|
$ |
88,935 |
|
Income from
operations
|
|
|
2,763 |
|
|
|
2,963 |
|
|
|
2,900 |
|
|
|
2,624 |
|
Net loss and
comprehensive loss
|
|
|
(2,076 |
) |
|
|
(2,070 |
) |
|
|
(9,963 |
) |
|
|
(2,395 |
) |
Net loss per share,
basic
|
|
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.08 |
) |
Net loss per share,
diluted
|
|
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.08 |
) |
Weighted average shares
outstanding, basic
|
|
|
27,584 |
|
|
|
27,809 |
|
|
|
27,911 |
|
|
|
27,949 |
|
Weighted average shares
outstanding, fully diluted
|
|
|
27,584 |
|
|
|
27,809 |
|
|
|
27,911 |
|
|
|
27,949 |
|
|