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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):

 

Landlord

  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        5.0      

(4)

(Two five-year renewals)

    7.75     0.2        —     

Ventas

  June 27, 2012     2        43.3      

(4)

(Two five-year renewals)

    6.75     0.8        —     

HCP

  May 1, 2006     3        54.0      

(5)

(Two ten-year renewals)

    8     0.3        12.8   

HCP

  May 31, 2006     6        43.0      

10 years

(Two ten-year renewals)

    8     0.2        0.6   

HCP

  December 1, 2006     4        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        8.0      

(5)

(Two ten-year renewals)

    7.25 %0.1        —     

HCN

  April 16, 2010     5        48.5      

15 years

(One 15-year renewal)

    8.25     0.6        0.8   

HCN

  May 1, 2010     3        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     0.4        2.0   

HCN

  April 8, 2011     4        141.0      

15 years

(One 15-year renewal)

    7.25     0.9        16.3   
            

 

 

   

 

 

 

Subtotal

      6.7        37.5   

Accumulated amortization through December 31, 2014

      (3.5     —     

Accumulated deferred gains / lease concessions recognized through December 31, 2014

      —          (18.0
            

 

 

   

 

 

 

Net lease acquisition costs / deferred gains / lease concessions as of December 31, 2014

    $ 3.2      $ 19.5   
            

 

 

   

 

 

 

 

 

(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):

 

2015

   $ 63,487   

2016

     60,657   

2017

     59,221   

2018

     59,224   

2019

     59,206   

Thereafter

     194,136   
  

 

 

 
   $ 495,931   
  

 

 

 

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.

 

     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   

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