10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2015

Or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number: 1-13445

Capital Senior Living Corporation

(Exact name of registrant as specified in its charter)

Delaware	75-2678809
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
14160 Dallas Parkway, Suite 300 Dallas, Texas	75254 (Zip Code)
(Address of principal executive offices)

Registrant’s telephone number, including area code:

(972) 770-5600

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $.01 par value per share	New York Stock Exchange
Preferred Stock Purchase Rights	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by a check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.    Yes  ¨        No  þ

Indicate by a check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨        No  þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ        No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ        No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer    ¨	Accelerated filer     þ	Non-accelerated filer    ¨	Smaller reporting company    ¨
		(Do not check if a smaller reporting company)

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨        No  þ

The aggregate market value of the 27,820,315 shares of the Registrant’s common stock, par value $0.01 per share (“Common Stock”), held by non-affiliates (defined to exclude all of the Registrant’s executive officers and directors) on December 31, 2015, based upon the adjusted closing price of the Registrant’s Common Stock as reported by the New York Stock Exchange on June 30, 2015, was approximately $681.6 million. As of February 19, 2016, the Registrant had 29,412,484 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive proxy statement pertaining to its 2016 Annual Meeting of Stockholders and filed or to be filed not later than 120 days after the end of the fiscal year pursuant to Regulation 14A are incorporated herein by reference into Part III of this report.

CAPITAL SENIOR LIVING CORPORATION

TABLE OF CONTENTS

		Page Number
	PART I
Item 1.	Business		1
Item 1A.	Risk Factors		17
Item 1B.	Unresolved Staff Comments		24
Item 2.	Properties		24
Item 3.	Legal Proceedings		24
Item 4.	Mine Safety Disclosures		24
	PART II
Item 5.	Market for Registrant's Common Equity; Related Stockholder Matters and Issuer Purchases of Equity Securities		25
Item 6.	Selected Financial Data		28
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations		28
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		49
Item 8.	Financial Statements and Supplementary Data		50
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		50
Item 9A.	Controls and Procedures		50
Item 9B.	Other Information		51
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance		52
Item 11.	Executive Compensation		52
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		52
Item 13.	Certain Relationships and Related Transactions, and Director Independence		52
Item 14.	Principal Accounting Fees and Services		52
	PART IV
Item 15.	Exhibits and Financial Statement Schedules		53
Signatures			54
Index to Financial Statements			F-1
Index to Exhibits			E-1

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PART I

ITEM 1. BUSINESS.

Overview

Capital Senior Living Corporation, a Delaware corporation (together with its subsidiaries, the “Company”), is one of the largest operators of senior living communities in the United States in terms of resident capacity. The Company and its predecessors have provided senior living services since 1990. As of December 31, 2015, the Company operated 121 senior living communities in 23 states with an aggregate capacity of approximately 15,400 residents, including 71 senior living communities which the Company owned and 50 senior living communities the Company leased. As of December 31, 2015, the Company also operated one home care agency. During 2015, approximately 95% of total revenues for the senior living communities operated by the Company were derived from private pay sources.

The Company’s operating strategy is to provide value to its senior living residents by providing quality senior living services at reasonable prices, while achieving and sustaining a strong, competitive position within its geographically concentrated regions, as well as continuing to enhance the performance of its operations. The Company provides senior living services to the elderly, including independent living, assisted living, and home care services. Many of the Company’s communities offer a continuum of care to meet its residents’ needs as they change over time. This continuum of care, which integrates independent living and assisted living and is bridged by home care through independent home care agencies or the Company’s home care agency, sustains residents’ autonomy and independence based on their physical and mental abilities.

Website

The Company’s Internet website www.capitalsenior.com contains an Investor Relations section, which provides links to the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, Section 16 filings and any amendments to those reports and filings. These reports and filings are available through the Company’s Internet website free of charge as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (“SEC”).

Industry Background

The senior living industry encompasses a broad and diverse range of living accommodations and supportive services that are provided primarily to persons 75 years of age or older.

For the elderly who require limited services, independent living residences supplemented at times by home health care, offers a viable option. Most independent living communities typically offer community living packaged with basic services consisting of meals, housekeeping, laundry, 24-hour staffing, transportation, social and recreational activities and health care monitoring. Independent living residents typically are not reliant on assistance with activities of daily living (“ADL’s”) although some residents may contract out for those services.

As a senior’s need for assistance increases, care in an assisted living residence is often preferable and more cost-effective than home-based care or nursing home care. Typically, assisted living represents a combination of housing and support services designed to aid elderly residents with ADL’s such as ambulation, bathing, dressing, eating, grooming, personal hygiene and monitoring or assistance with medications. Certain assisted living residences may also provide assistance to residents with low acuity medical needs, or may offer higher levels of personal assistance for incontinent residents or residents with Alzheimer’s disease or other cognitive or physical frailties. Generally, assisted living residents require higher levels of care than residents of independent living residences and retirement living centers, but require lower levels of care than patients in skilled nursing facilities. For seniors who need the constant attention of a skilled nurse or medical practitioner, a skilled nursing facility may be required.

According to the American Seniors Housing Association Seniors Housing Construction Monitor report for Winter 2016, as of the fourth quarter of fiscal 2015, 19.9% of the age-restricted seniors housing supply in the

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United States were assisted living units, 22.7% were independent living units, 51.8% were nursing care units, and 5.6% were memory care units.

The senior living industry is highly fragmented and characterized by numerous small operators. Moreover, the scope of senior living services varies substantially from one operator to another. Many smaller senior living providers do not operate purpose-built residences, do not have extensive professional training for staff and provide only limited assistance with ADLs. The Company believes that many senior living operators do not provide the required comprehensive range of senior living services designed to permit residents to “age in place” within the community as residents develop further physical or cognitive frailties.

The Company believes that a number of demographic, regulatory and other trends will contribute to the continued growth in the senior living market, including the following:

Consumer Preference

The Company believes that senior living communities are increasingly becoming the setting preferred by prospective residents and their families for the care of the elderly. Senior living offers residents greater independence and allows them to “age in place” in a residential setting, which the Company believes results in a higher quality of life than that experienced in more institutional or clinical settings.

The likelihood of living alone increases with age. Most of this increase is due to an aging population in which women outlive men. Societal changes, such as high divorce rates and the growing numbers of persons choosing not to marry, have further increased the number of Americans living alone. This growth in the number of elderly living alone has resulted in an increased demand for services that historically have been provided by a spouse, other family members or live-in caregivers.

Demographics

The primary market for the Company’s senior living services is comprised of persons aged 75 and older. This age group is one of the fastest growing segments of the United States population. The older population itself is increasingly older. In 2011, the 75-84 age group (12.8 million) was 16 times larger than in 1900 and the 85 and over age group (5.7 million) was 40 times larger. The 85 and over population is projected to triple from 5.7 million in 2011 to 14.1 million in 2040. As the number of persons aged 75 and older continues to grow, the Company believes that there will be corresponding increases in the number of persons who need assistance with ADLs.

Senior Affluence

The average net worth of senior citizens is typically higher than non-senior citizens, partially as a result of accumulated equity through home ownership. The Company believes that a substantial portion of the senior population has historically accumulated significant resources available for their retirement and long-term care needs. The Company’s target population is comprised of moderate to upper income seniors who have, either directly or indirectly through familial support, the financial resources to pay for senior living communities, including an assisted living alternative to traditional long-term care.

Reduced Reliance on Family Care

Historically, the family has been the primary provider of care for seniors. The Company believes that the increase in the percentage of women in the work force, the reduction of average family size, and overall increased mobility in society is reducing the role of the family as the traditional caregiver for aging parents. The Company believes that these factors will make it necessary for many seniors to look outside the family for assistance as they age.

Restricted Supply of Nursing Beds

Several states in the United States have adopted Certificate of Need (“CON”) or similar statutes generally requiring that, prior to the addition of new skilled nursing beds, the addition of new services, or the making of

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certain capital expenditures, a state agency must determine that a need exists for the new beds or the proposed activities. The Company believes that this CON process tends to restrict the supply and availability of licensed nursing facility beds. High construction costs, limitations on government reimbursement, and start-up expenses also act to constrain growth in the supply of such facilities. At the same time, nursing facility operators are continuing to focus on improving occupancy and expanding services to sub-acute patients generally of a younger age and requiring significantly higher levels of nursing care. As a result, the Company believes that there has been a decrease in the number of skilled nursing beds available to patients with lower acuity levels and that this trend should increase the demand for the Company’s senior living communities, including, particularly, the Company’s assisted living communities.

Cost-Containment Pressures

In response to rapidly rising health care costs, governmental and private pay sources have adopted cost containment measures that have reduced admissions and encouraged reduced lengths of stays in hospitals and other acute care settings. Private insurers have begun to limit reimbursement for medical services in general to predetermined charges, and managed care organizations (such as health maintenance organizations) are attempting to limit hospitalization costs by negotiating for discounted rates for hospital and acute care services and by monitoring and reducing hospital use. In response, hospitals are discharging patients earlier and referring elderly patients, who may be too sick or frail to manage their lives without assistance, to nursing homes and assisted living residences where the cost of providing care is typically lower than hospital care. In addition, third-party payors are increasingly becoming involved in determining the appropriate health care settings for their insureds or clients, based primarily on cost and quality of care. Based on industry data, the typical day-rate in an assisted living facility is two-thirds of the cost for comparable care in a nursing home.

Operating Strategy

The Company’s operating strategy is to provide value to its senior living residents by providing quality senior living services at reasonable prices, while achieving and sustaining a strong, competitive position within its geographically concentrated regions, as well as continuing to enhance the performance of its operations. The Company is implementing its operating strategy principally through the following methods:

Provide a Broad Range of Quality Personalized Care

Central to the Company’s operating strategy is its focus on providing quality care and services that are personalized and tailored to meet the individual needs of each community resident. The Company’s residences and services are designed to provide a broad range of care that permits residents to “age in place” as their needs change and as they develop further physical or cognitive frailties. By creating an environment that maximizes resident autonomy and provides individualized service programs, the Company seeks to attract seniors at an earlier stage, before they need the higher level of care provided in a skilled nursing facility. The Company also maintains a comprehensive quality assurance program designed to ensure the satisfaction of its residents and their family members. The Company conducts annual resident satisfaction surveys that allow residents at each community to express whether they are “very satisfied,” “satisfied” or “dissatisfied” with all major areas of a community, including, housekeeping, maintenance, activities and transportation, food service, security and management. In 2015 and 2014, the Company achieved 95% and 94%, respectively, overall approval ratings from the residents’ satisfaction surveys.

Offer Services Across a Range of Pricing Options

The Company’s range of products and services is continually expanding to meet the evolving needs of its residents. The Company has developed a menu of products and service programs that may be further customized to serve both the moderate and upper income markets of a particular targeted geographic area. By offering a range of pricing options that are customized for each target market, the Company believes that it can develop synergies, economies of scale and operating efficiencies in its efforts to serve a larger percentage of the elderly population within a particular geographic market.

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Improve Occupancy Rates

The Company continually seeks to maintain and improve occupancy rates by: (i) retaining residents as they “age in place” by extending optional care and service programs and converting existing units to higher levels of care; (ii) attracting new residents through the on-site marketing programs focused on residents and family members; (iii) selecting communities in underserved markets; (iv) aggressively seeking referrals from professional community outreach sources, including area religious organizations, senior social service programs, civic and business networks, as well as the medical community; and (v) continually refurbishing and renovating its communities.

Improve Operating Efficiencies

The Company seeks to improve operating efficiencies at its communities by actively monitoring and managing operating costs. By having an established portfolio of communities in geographically concentrated regions throughout the United States with regional management in place, the Company believes it has established a platform to achieve operating efficiencies through economies of scale in the purchase of bulk items, such as food and supplies, and in the spreading of fixed costs, such as corporate overhead, over a larger revenue base, and to provide more effective management supervision and financial controls. The Company’s growth strategy includes acquiring additional communities within our geographically concentrated regions to achieve further efficiencies.

Emphasize Employee Training and Retention

The Company devotes special attention to the hiring, screening, training, supervising and retention of its employees and caregivers to ensure that quality standards are achieved. In addition to normal on-site training, the Company conducts national management meetings and encourages sharing of expertise among managers. The Company has also implemented a comprehensive online training program that addresses the specific challenges of working within the senior living environment. The Company’s commitment to the total quality management concept is emphasized throughout its training programs. This commitment to the total quality management concept means identification of the “best practices” in the senior living market and communication of those “best practices” to the Company’s executive directors and their staff. The identification of best practices is realized by a number of means, including: emphasis on regional and executive directors keeping up with professional trade publications; interaction with other professionals and consultants in the senior living industry through seminars, conferences and consultations; visits to other properties; leadership and participation at national and local trade organization events; and information derived from marketing studies and resident satisfaction surveys. This information is continually processed by regional managers and the executive directors and communicated to the Company’s employees as part of their training. The Company hires an executive director for each of its communities and provides them with autonomy, responsibility and accountability. The Company’s staffing of each community with an executive director allows it to hire more professional employees at these positions, while the Company’s developed career path helps it to retain the professionals it hires. The Company believes its commitment to and emphasis on employee training and retention differentiates the Company from many of its competitors.

Senior Living Services

The Company provides senior living services to the elderly, including independent living and assisted living services, and also provides home care services at one of its communities. By offering a variety of services and encouraging the active participation of the resident and the resident’s family and medical consultants, the Company is able to customize its service plan to meet the specific needs and desires of each resident. Additionally, the Company is actively working to expand service offerings through conversions of existing units to higher levels of care. As a result, the Company believes that it is able to maximize customer satisfaction and avoid the high cost of delivering unnecessary services to residents.

The Company’s operating philosophy is to provide quality senior living communities and services to senior citizens and deliver a continuum of care for its residents as their needs change over time. This continuum of care, which integrates independent living and assisted living and is bridged by home care, sustains residents’

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autonomy and independence based on their physical and mental abilities. As residents age, in many of the Company’s communities, they are able to obtain the additional services they need within the same community, avoiding the disruptive and often traumatic move to a different facility.

Independent Living Services

The Company provides independent living services to seniors who typically do not yet need assistance or support with ADLs, but who prefer the physical and psychological comfort of a residential community that offers health care and other services. As of December 31, 2015, the Company owned 34 communities and leased 19 communities that provide independent living services, which include communities that combine assisted living and other services, with an aggregate capacity for approximately 6,800 residents.

Independent living services provided by the Company include daily meals, transportation, social and recreational activities, laundry, housekeeping and 24-hour staffing. The Company also fosters the wellness of its residents by offering access to health screenings (such as blood pressure checks), periodic special services (such as influenza inoculations), dietary and similar programs, as well as ongoing exercise and fitness classes. Classes are given by health care professionals to keep residents informed about health and disease management. Subject to applicable government regulation, personal care and medical services are available to independent living residents through either the community staff or through the Company’s agency or other independent home care agencies. The Company’s independent living residents pay a fee ranging from $1,100 to $6,600 per month, in general, depending on the specific community, program of services, size of the unit and amenities offered. The Company’s contracts with its independent living residents are generally for a term of one year and are typically terminable by either party, under certain circumstances, upon providing 30 days’ notice.

Assisted Living Services

The Company offers a wide range of assisted living care and services, including personal care services, 24-hour staffing, support services, and supplemental services. As of December 31, 2015, the Company owned 57 communities and leased 41 communities that provide assisted living services, which include communities that combine independent living and other services, with an aggregate capacity for approximately 8,600 residents. The residents of the Company’s assisted living residences generally need help with some or all ADLs, but do not require the more acute medical care traditionally given in nursing homes. Upon admission to the Company’s assisted living communities, and in consultation with the resident, the resident’s family and medical consultants, each resident is assessed to determine his or her health status, including functional abilities and need for personal care services. The resident also completes a lifestyles assessment to determine the resident’s preferences. From these assessments, a care plan is developed for each resident to ensure that all staff members who render care meet the specific needs and preferences of each resident where possible. Each resident’s care plan is reviewed periodically to determine when a change in care is needed.

The Company has adopted a philosophy of assisted living care that allows a resident to maintain a dignified independent lifestyle. Residents and their families are encouraged to be partners in the residents’ care and to take as much responsibility for their well-being as possible. The basic types of assisted living services offered by the Company include the following:

Personal Care Services.    These services include assistance with ADLs such as ambulation, bathing, dressing, eating, grooming, personal hygiene, and monitoring or assistance with medications.

Support Services.    These services include meals, assistance with social and recreational activities, laundry services, general housekeeping, maintenance services and transportation services.

Supplemental Services.    These services include extra transportation services, personal maintenance, extra laundry services, and special care services, such as services for residents with certain forms of dementia. Certain of these services require extra charges.

The Company’s assisted living residents pay a fee ranging from $1,400 to $8,400 per month, in general, depending on the specific community, the level of personal care services, support service and supplemental serv-

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ices provided to the resident, size of the unit and amenities offered. The Company’s contracts with its assisted living residents are generally for a term of one year and are typically terminable by either party, under certain circumstances, upon 30 days’ notice unless state law stipulates otherwise.

The Company maintains programs and special units at some of its assisted living communities for residents with certain forms of dementia, which provide the attention, care and services needed to help those residents maintain a higher quality of life. Specialized services include assistance with ADLs, behavior management and life skills based activities programs, the goal of which is to provide a normalized environment that supports residents’ remaining functional abilities. Whenever possible, residents assist with meals, laundry and housekeeping. Special units for residents with certain forms of dementia are located in a separate area of the community and have their own dining facilities, resident lounge areas, and specially trained staff. The special care areas are designed to allow residents the freedom to ambulate as they wish, while keeping them safely contained within a secure area with a minimum of disruption to other residents. Resident fees for these special units are dependent on the size of the unit, the design type and the level of services provided.

Home Care Services

As of December 31, 2015, the Company provided home care services to clients at one senior living community through the Company’s home care agency and made home care services available to clients at a majority of its senior living communities through third-party providers. The Company believes that the provision of private pay, home care services is an attractive adjunct to its independent living services because it allows the Company to make available more services to its residents as they age in place and increases the length of stay in the Company’s communities. In addition, the Company makes available to residents certain customized physician, dentistry, podiatry and other health-related rehabilitation and therapy services that may be offered by third-party providers.

Operating Communities

The table below sets forth certain information with respect to senior living communities operated by the Company as of December 31, 2015.

				Resident Capacity1									Commencement of Operations2
Community		Units		IL		AL		Total		Ownership
Owned:
Aspen Grove	Lamberville, MI		78		—		83		83		100	%		03/14
Autumn Glen	Greencastle, IN		52		—		64		64		100	%		06/13
Brookview Meadows	Green Bay, WI		78		—		156		156		100	%		01/15
Canton Regency	Canton, OH		239		162		145		307		100	%		03/91
Chateau of Batesville	Batesville, IN		41		—		43		43		100	%		10/12
Country Charm	Greenwood, IN		90		—		166		166		100	%		10/12
Country Charm Village	Indianapolis, IN		73		—		105		105		100	%		10/12
Courtyards at Lake Granbury	Granbury, TX		81		—		112		112		100	%		03/12
Good Tree Retirement and Memories	Stephenville, TX		60		20		75		95		100	%		03/12
Gramercy Hill	Lincoln, NE		146		62		103		165		100	%		10/98
Greenbriar Village	Indianapolis, IN		124		—		134		134		100	%		08/15
Harbor Court	Rocky River, OH		122		—		144		144		100	%		12/12
Heritage at the Plains at Parish Homestead	Oneonta, NY		108		97		53		150		100	%		05/15
Independence Village of Peoria	Peoria, IL		158		166		—		166		100	%		08/00
Keystone Woods Assisted Living	Anderson, IN		50		—		70		70		100	%		07/11
Laurel Hurst Laurel Woods	Columbus, NC		102		70		60		130		100	%		10/11
Marquis Place of Elkhorn	Elkhorn, NE		64		—		69		69		100	%		03/13
Middletown	Middletown, OH		61		—		75		75		100	%		09/13
Montclair	Springfield, MO		158		178		—		178		100	%		12/12
North Pointe	Anderson, SC		70		—		70		70		100	%		10/11

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				Resident Capacity1									Commencement of Operations2
Community		Units		IL		AL		Total		Ownership
Park-Oak Grove	Roanoke, VA		93		—		164		164		100	%		08/14
River Crossing Assisted Living	Charlestown, IN		100		—		106		106		100	%		12/13
Riverbend Independent and Assisted Living	Jeffersonville, IN		112		—		114		114		100	%		03/12
Remington at Valley Ranch	Irving, TX		127		158		—		158		100	%		04/12
Residence of Chardon	Chardon, OH		42		—		52		52		100	%		10/12
Sugar Grove	Plainfield, IN		164		48		116		164		100	%		12/13
Summit Place	Anderson, SC		91		19		89		108		100	%		10/11
Summit Point Living	Macedonia, OH		163		126		98		224		100	%		08/11
Towne Centre Retirement Community	Merrillville, IN		210		163		75		238		100	%		03/91
Vintage Gardens	St. Joseph, MO		102		44		92		136		100	%		05/13
Waterford at Baytown	Baytown, TX		129		18		132		150		100	%		03/15
Waterford at Bridle Brook	Mahomet, IL		78		—		120		120		100	%		09/15
Waterford at College Station	College Station, TX		53		—		87		87		100	%		03/12
Waterford at Columbia	Columbia, SC		117		141		—		141		100	%		11/00
Waterford at Corpus Christi	Corpus Christi, TX		50		—		56		56		100	%		10/12
Waterford at Deer Park	Deer Park, TX		120		144		—		144		100	%		11/00
Waterford at Dillon Pointe	Spartanburg, SC		36		—		55		55		100	%		12/13
Waterford at Edison Lakes	South Bend, IN		116		96		45		141		100	%		12/00
Waterford at Fairfield	Fairfield, OH		120		140		—		140		100	%		11/00
Waterford at Fitchburg	Fitchburg, WI		82		—		150		150		100	%		10/13
Waterford at Fort Worth	Fort Worth, TX		151		177		—		177		100	%		06/00
Waterford at Hartford	Hartford, WI		39		—		53		53		100	%		05/15
Waterford at Hidden Lake	Canton, GA		49		—		98		98		100	%		12/14
Waterford at Highland Colony	Jackson, MS		119		143		—		143		100	%		11/00
Waterford at Ironbridge	Springfield, MO		118		142		—		142		100	%		06/01
Waterford at Levis Commons	Toledo, OH		146		163		44		207		100	%		04/09
Waterford at Mansfield	Mansfield, OH		118		97		45		142		100	%		10/00
Waterford at Mesquite	Mesquite, TX		153		176		—		176		100	%		09/99
Waterford at Oakwood	Oakwood, GA		64		—		70		70		100	%		09/13
Waterford at Oshkosh	Oshkosh, WI		90		—		109		109		100	%		08/14
Waterford at Pantego	Pantego, TX		119		143		—		143		100	%		12/00
Waterford at Plano	Plano, TX		135		109		57		166		100	%		12/00
Waterford at Plymouth	Plymouth, WI		69		—		82		82		100	%		08/14
Waterford at Richmond Heights	Richmond Heights, OH		148		117		110		227		100	%		04/09
Waterford at Thousand Oaks	San Antonio, TX		119		135		—		135		100	%		05/00
Waterford at Virginia Beach	Virginia Beach, VA		111		—		138		138		100	%		10/15
Waterford at West Bend	West Bend, WI		40		—		41		41		100	%		05/15
Waterford on Cooper	Arlington, TX		105		—		151		151		100	%		03/12
Waterford on Huebner	San Antonio, TX		119		135		—		135		100	%		04/99
Wellington at Arapaho	Richardson, TX		140		113		57		170		100	%		05/02
Wellington at Conroe	Conroe, TX		44		25		35		60		100	%		03/12
Wellington at Dayton	Dayton, OH		149		146		94		240		100	%		08/08
Wellington at Kokomo	Kokomo, IN		96		—		99		99		100	%		07/11
Wellington at North Richland Hills	North Richland Hills, TX		119		139		—		139		100	%		01/02

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				Resident Capacity1									Commencement of Operations2
Community		Units		IL		AL		Total		Ownership
Whispering Pines Village	Columbiana, OH		68		24		88		112		100	%		07/15
Whitcomb House	Milford, MA		68		—		87		87		100	%		10/13
Woodlands of Columbus	Columbus, OH		116		—		117		117		100	%		10/12
Woodlands of Hamilton	Hamilton, OH		87		—		100		100		100	%		10/12
Woodlands of Shaker Heights	Shaker Heights, OH		66		—		85		85		100	%		10/12
Woodview Assisted Living	Fort Wayne, IN		88		—		130		130		100	%		12/13
Wynnfield Crossing Assisted Living	Rochester, IN		59		—		79		79		100	%		07/11
			7,172		3,836		5,247		9,083
Leased:
Ventas:
Amberleigh	Buffalo, NY		267		387		—		387		N/A			01/92
Cottonwood Village	Cottonwood, AZ		163		131		58		189		N/A			03/91
Crown Pointe	Omaha, NE		135		85		80		165		N/A			08/00
Georgetowne Place	Fort Wayne, IN		159		242		—		242		N/A			10/05
Harrison at Eagle Valley3	Indianapolis, IN		124		138		—		138		N/A			03/91
Independence Village of East Lansing	East Lansing, MI		149		161		—		161		N/A			08/00
Independence Village of Olde Raleigh	Raleigh, NC		167		177		—		177		N/A			08/00
Rose Arbor	Maple Grove, MN		144		86		87		173		N/A			06/06
Villa Santa Barbara	Santa Barbara, CA		125		64		62		126		N/A			08/00
West Shores	Hot Springs, AR		137		131		42		173		N/A			08/00
Whitley Place	Keller, TX		47		—		65		65		N/A			02/08
HCN:
Azalea Trails Assisted Living	Tyler, TX		56		—		70		70		N/A			09/10
Buffalo Creek Assisted Living	Waxahachie, TX		56		—		70		70		N/A			09/10
Dogwood Trails Assisted Living	Palestine, TX		65		—		75		75		N/A			09/10
Hawkins Creek Assisted Living	Longview, TX		56		—		70		70		N/A			09/10
Hearth at Prestwick	Avon, IN		136		—		150		150		N/A			08/06
Hearth at Windermere	Fishers, IN		128		—		150		150		N/A			08/06
Heritage Oaks Assisted Living	Conroe, TX		75		—		90		90		N/A			09/10
Keepsake Village of Columbus	Columbus, IN		46		—		48		48		N/A			08/06
Magnolia Court Assisted Living	Nacogdoches, TX		56		—		70		70		N/A			09/10
Martin Crest Assisted Living	Weatherford, TX		56		—		86		86		N/A			09/10
Pecan Point Assisted Living	Sherman, TX		56		—		70		70		N/A			09/10
Santa Fe Trails Assisted Living	Cleburne, TX		56		—		86		86		N/A			09/10
Spring Lake Assisted Living	Paris, TX		56		—		70		70		N/A			09/10
Spring Meadows Libertyville	Libertyville, IL		198		208		45		253		N/A			04/11
Spring Meadows Naperville	Naperville, IL		197		186		45		231		N/A			04/11
Spring Meadows at Summit	Summit, NJ		89		—		98		98		N/A			04/11
Spring Meadows at Trumbull	Trumbull, CT		148		136		42		178		N/A			04/11
Stonefield Assisted Living	McKinney, TX		75		—		90		90		N/A			09/10
Walnut Creek Assisted Living	Mansfield, TX		56		—		70		70		N/A			09/10
Waterford at Ames	Ames, IA		60		—		122		122		N/A			02/06
Waterford at Miracle Hills	Omaha, NE		63		—		70		70		N/A			03/06
Waterford at Roxbury Park	Omaha, NE		65		—		70		70		N/A			02/06
Waterford at Van Dorn	Lincoln, NE		69		—		84		84		N/A			02/06
Waterford at Woodbridge	Plattsmouth, NE		40		—		45		45		N/A			02/06

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				Resident Capacity1								Commencement of Operations2
Community		Units		IL		AL		Total		Ownership
HCP:
Atrium of Carmichael	Sacramento, CA		151		155		—		155		N/A		01/92
Charlotte Square	Charlotte, NC		120		—		125		125		N/A		12/06
Chesapeake Place	Chesapeake, VA		103		—		153		153		N/A		12/06
Covenant Place of Abilene	Abilene, TX		50		—		55		55		N/A		08/04
Covenant Place of Burleson	Burleson, TX		74		—		80		80		N/A		08/04
Covenant Place of Waxahachie	Waxahachie, TX		50		—		55		55		N/A		08/04
Crescent Place	Cedar Hill, TX		80		—		85		85		N/A		11/05
Crescent Point	Cedar Hill, TX		111		134		—		134		N/A		08/04
Crosswood Oaks	Sacramento, CA		121		127		—		127		N/A		01/92
Good Place	North Richland Hills, TX		72		—		80		80		N/A		08/04
Greenville Place	Greenville, SC		102		—		153		153		N/A		12/06
Meadow Lakes	North Richland Hills, TX		119		145		—		145		N/A		08/04
Myrtle Beach Estates	Myrtle Beach, SC		108		—		142		142		N/A		12/06
Tesson Heights	St. Louis, MO		184		134		72		206		N/A		10/98
Veranda Club	Boca Raton, FL		186		129		97		226		N/A		01/92
			5,206		2,956		3,377		6,333
Total			12,378		6,792		8,624		15,416

(1) Independent living (IL) residences and assisted living (AL) residences based on community licensure.

(2) Indicates the date on which the Company acquired or commenced operating the community. The Company operated certain of its communities pursuant to management agreements prior to acquiring interests in or leasing the communities.

(3) The Company’s home care agency is on-site at The Harrison at Eagle Valley community.

Management Contracts

The Company was party to a series of property management agreements (the “SHPIII/CSL Management Agreements”) with three joint ventures (collectively “SHPIII/CSL”) owned 90% by Senior Housing Partners III, L.P. (“SHPIII”), a fund managed by Prudential Investment Management, Inc. (“Prudential Investment”) and 10% by the Company, which collectively owned and operated three senior living communities. The SHPIII/CSL Management Agreements were for initial terms of ten years from the date the certificate of occupancy was issued and extended until various dates through January 2019. The SHPIII/CSL Management Agreements generally provided for management fees of 5% of gross revenue plus reimbursement for costs and expenses related to the communities. On June 30, 2014, the Company acquired 100% of the member interests in these joint ventures. For additional information refer to Note 4, “Acquisitions”, within the notes to consolidated financial statements.

Growth Strategies

The Company believes that the fragmented nature of the senior living industry and the limited capital resources available to many small, private operators provide an attractive opportunity for the Company to expand its existing base of senior living operations. The Company believes that its current operations with geographic concentrations throughout the United States serve as the foundation on which the Company can build senior living networks in targeted geographic markets and thereby provide a broad range of high quality care in a cost-efficient manner.

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The following are the principal elements of the Company’s clear and differentiated growth strategy:

Organic Growth

The Company intends to continue to focus on its occupancy, rents and operating margins of its stabilized communities. The Company continually seeks to improve occupancy rates and increase average rents by: (i) retaining residents as they “age in place” by extending optional care and service programs and converting existing units to higher levels of care; (ii) attracting new residents through the on-site marketing programs focused on residents and family members and utilizing technology to enhance Internet marketing; (iii) aggressively seeking referrals from professional community outreach sources, including area religious organizations, senior social service programs, civic and business networks, as well as the medical community; and (iv) continually refurbishing and renovating its communities.

Expansion and Conversions of Existing Communities

The Company intends to increase levels of care and capacity at certain of its existing communities through expansion and/or conversions of certain units. Increasing our levels of care and capacity is expected to increase revenue and operating income while meeting the needs of our residents who have an average age of 85 years.

Pursue Strategic Acquisitions

The Company intends to continue to pursue acquisitions of senior living communities. Through strategic acquisitions, joint venture investments, or facility leases, the Company seeks to acquire communities in existing geographically concentrated regions as a means to increase market share, augment existing clusters, strengthen its ability to provide a broad range of care, and create operating efficiencies. As the industry continues to consolidate, the Company believes that opportunities will arise to acquire other senior living companies. The Company believes that the current fragmented nature of the senior living industry, combined with the Company’s financial resources, geographically concentrated regions, and extensive contacts within the industry, should provide it with the opportunity to evaluate a number of potential acquisition opportunities in the future. In reviewing acquisition opportunities, the Company will consider, among other things, geographic location, competitive climate, reputation and quality of management and communities, and the need for renovation or improvement of the communities.

Expand Referral Networks

The Company intends to continue to develop relationships with local and regional hospital systems, managed care organizations and other referral sources to attract new residents to the Company’s communities. In certain circumstances these relationships may involve strategic alliances or joint ventures. The Company believes that such arrangements or alliances, which could range from joint marketing arrangements to priority transfer agreements, will enable it to be strategically positioned within the Company’s markets if, as the Company believes, senior living programs become an integral part of the evolving health care delivery system.

Operations

Centralized Management

The Company centralizes its corporate and other administrative functions so that the community-based management and staff can focus their efforts on resident care. The Company maintains centralized accounting, finance, human resources, training and other operational functions at its national corporate office in Dallas, Texas. The Company also has a corporate office in New York, New York. The Company’s corporate offices are generally responsible for: (i) establishing Company-wide policies and procedures relating to, among other things, resident care and operations; (ii) performing accounting functions; (iii) developing employee training programs and materials; (iv) coordinating human resources; (v) coordinating marketing functions; and (vi) providing strategic direction. In addition, financing, development, construction and acquisition activities, including feasibility and market studies, and community design, development, and construction management are conducted at the Company’s corporate offices.

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The Company seeks to control operational expenses for each of its communities through proprietary expense management systems, standardized management reporting and centralized controls of capital expenditures, asset replacement tracking, and purchasing for larger and more frequently used supplies and food inventories through group purchasing programs. Community expenditures are monitored by regional and district managers who are accountable for the resident satisfaction and financial performance of the communities in their region.

Regional Management

The Company provides oversight and support to each of its senior living communities through experienced regional and district managers. A district manager will generally oversee the marketing and operations of three to seven communities clustered in a small geographic area. A regional manager will generally cover a larger geographic area consisting of eight to thirteen communities. In most cases, the district and regional managers will office out of the Company’s senior living communities. Currently, there are district and regional managers based in the East, Central Plains, South Central, Dallas, Indiana, Midwest, Texas, Southwest, and West regions.

The executive director at each community reports to a regional or district manager. The regional and district managers report on the operations of each community directly to senior management at the Company’s corporate office. The district and regional managers make regular site visits to each of their assigned communities. The site visits involve a physical plant inspection, quality assurance review, staff training, financial and systems audits, regulatory compliance, and team building.

Community-Based Management

An executive director manages the day-to-day operations at each senior living community, including oversight of the quality of care, delivery of resident services, and monitoring of financial performance. The executive director is also responsible for all personnel, including food service, maintenance, activities, security, assisted living, housekeeping, and, where applicable, nursing or care services. In most cases, each community also has department managers who direct the environmental services, nursing or care services, business management functions, dining services, activities, transportation, housekeeping, and marketing functions.

The assisted living component of the senior living communities is managed by licensed professionals, such as a nurse and/or a licensed administrator. These licensed professionals have many of the same operational responsibilities as the Company’s executive directors, but their primary responsibility is to oversee resident care. Many of the Company’s senior living communities are part of a campus setting, which include independent living. This campus arrangement allows for cross-utilization of certain support personnel and services, including administrative functions that result in greater operational efficiencies and lower costs than freestanding facilities.

The Company actively recruits personnel to maintain adequate staffing levels at its existing communities and hires new staff for new or acquired communities prior to opening. The Company has adopted comprehensive recruiting and screening programs for management positions that utilize corporate office team interviews and thorough background and reference checks. The Company offers system-wide training and orientation for all of its employees at the community level through a combination of Company-sponsored seminars and conferences.

Quality Assurance

Quality assurance programs are coordinated and implemented by the Company’s corporate and regional staff. The Company’s quality assurance is targeted to achieve maximum resident and resident family member satisfaction with the care and services delivered by the Company. The Company’s primary focus in quality control monitoring includes routine in-service training and performance evaluations of caregivers and other support employees. Additional quality assurance measures include:

Resident and Resident’s Family Input.    On a routine basis, the Company provides residents and their family members the opportunity to provide valuable input regarding the day-to-day delivery of services. On-site management at each community has fostered and encouraged active resident councils and resident committees who meet independently. These resident bodies meet with on-site management on a monthly basis to offer input and suggestions as to the quality and delivery of services. Additionally, at each community the Company con-

11

ducts annual resident satisfaction surveys to further monitor the satisfaction levels of both residents and their family members. These surveys are sent directly to a third party firm for tabulation, then to the Company’s corporate headquarters for distribution to onsite staff. In fiscal 2015 and 2014, the Company achieved 95% and 94%, respectively, approval ratings from its residents. For any departmental area of service scoring below 90%, a corrective action plan is developed jointly by on-site, regional and corporate staff for immediate implementation.

Regular Community Inspections.    Each community is inspected, on at least a quarterly basis, by regional and/or corporate staff. Included as part of this inspection is the monitoring of the overall appearance and maintenance of the community interiors and grounds. The inspection also includes monitoring staff professionalism and departmental reviews of maintenance, housekeeping, activities, transportation, marketing, administration and food and health care services, if applicable. The inspections also include observing residents in their daily activities and the community’s compliance with government regulations.

Independent Service Evaluations.    The Company engages the services of outside professional independent consulting firms to evaluate various components of the community operations. These services include mystery shops, competing community analysis, pricing recommendations and product positioning. This provides management with valuable unbiased product and service information. A plan of action regarding any areas requiring improvement or change is implemented based on information received. At communities where health care is delivered, these consulting service reviews include the on-site handling of medications, record keeping and general compliance with all governmental regulations.

Sales and Marketing

Most communities are staffed by on-site sales directors and additional marketing/sales staff depending on the community size and occupancy status. The primary focus of the on-site marketing staff is to create awareness of the Company and its services among prospective residents and family members, professional referral sources and other key decision makers. These efforts incorporate an aggressive marketing plan to include monthly, quarterly and annual goals for leasing, new lead generation, prospect follow up, community outreach and resident and family referrals. Additionally, the marketing plan includes a calendar of promotional events and a comprehensive media program. On-site marketing departments perform a competing community assessment quarterly. Corporate and regional marketing directors monitor the on-site marketing departments’ effectiveness and productivity on a weekly basis. Routine detailed marketing department audits are performed on annual monthly basis or more frequently if deemed necessary. Corporate and regional personnel assist in the development of marketing strategies for each community to address the continuously changing resident profile and maintain a focus on building brand awareness and increasing Internet website traffic and leads. The marketing strategies developed utilize the implementation of application program interface systems with certain website and Internet referral partners and the production of creative media and necessary marketing collateral. The Company has also implemented numerous Internet web-based initiatives to attract prospects including certain e-mail and website triggers prompting interactive invitations with on-going follow-ups, as well as a nurturing program to actively engage prospects throughout the marketing/sales cycle. Ongoing sales training of on-site marketing/sales staff is implemented by corporate and regional marketing directors.

Government Regulation

Changes in existing laws and regulations, adoption of new laws and regulations and new interpretations of existing laws and regulations could have a material effect on the Company’s operations. Failure by the Company to comply with applicable regulatory requirements could have a material adverse effect on the Company’s business, financial condition, cash flows, and results of operations. Accordingly, the Company monitors legal and regulatory developments on local and national levels.

The health care industry is subject to extensive regulation and frequent regulatory change. At this time, no federal laws or regulations specifically regulate assisted or independent living residences. While a number of states have not yet enacted specific assisted living regulations, certain of the Company’s assisted living communities are subject to regulation, licensing, CON and permitting by state and local health care and social service agencies and other regulatory authorities. While such requirements vary from state to state, they typically relate to staffing, physical design, required services and resident characteristics. The Company believes that such regu-

12

lation will increase in the future. In addition, health care providers are receiving increased scrutiny under anti-trust laws as integration and consolidation of health care delivery increases and affects competition. The Company’s communities are also subject to various zoning restrictions, local building codes, and other ordinances, such as fire safety codes. Failure by the Company to comply with applicable regulatory requirements could have a material adverse effect on the Company’s business, financial condition, and results of operations. Regulation of the assisted living industry is evolving. The Company is unable to predict the content of new regulations and their effect on its business. There can be no assurance that the Company’s operations will not be adversely affected by regulatory developments.

The Company believes that its communities are in substantial compliance with applicable regulatory requirements. However, unannounced surveys or inspections may occur annually or bi-annually, or following a regulator’s receipt of a complaint about a community. In the ordinary course of business, one or more of the Company’s communities could be cited for deficiencies resulting from such inspections or surveys. Most inspection deficiencies are resolved through an agreed-to plan of corrective action relating to the community’s operations, but the reviewing agency typically has the authority to take further action against a licensed or certified community, which could result in the imposition of fines, imposition of a provisional or conditional license, suspension or revocation of a license, suspension or denial of admissions, loss of certification as a provider under federal health care programs or imposition of other sanctions, including criminal penalties. Loss, suspension or modification of a license may also cause us to default under our loan or lease agreements and/or trigger cross-defaults. Sanctions may be taken against providers or facilities without regard to the providers’ or facilities’ history of compliance. We may also expend considerable resources to respond to federal and state investigations or other enforcement action under applicable laws or regulations. To date, none of the deficiency reports received by us has resulted in a suspension, fine or other disposition that has had a material adverse effect on our revenues. However, any future substantial failure to comply with any applicable legal and regulatory requirements could result in a material adverse effect to our business as a whole. In addition, states Attorneys General vigorously enforce consumer protection laws as those laws relate to the senior living industry. State Medicaid Fraud and Abuse Units may also investigate assisted living communities even if the community or any of its residents do not receive federal or state funds.

Under the Americans with Disabilities Act of 1990 (“ADA”), all places of public accommodation are required to meet certain federal requirements related to access and use by disabled persons. A number of additional federal, state and local laws exist that also may require modifications to existing and planned properties to permit access to the properties by disabled persons. While the Company believes that its communities are substantially in compliance with present requirements or are exempt therefrom, if required changes involve a greater expenditure than anticipated or must be made on a more accelerated basis than anticipated, additional costs would be incurred by the Company. Further legislation may impose additional burdens or restrictions with respect to access by disabled persons, the costs of compliance with which could be substantial.

The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), in conjunction with the federal regulations promulgated thereunder by the Department of Health and Human Services, has established, among other requirements, standards governing the privacy of certain protected and individually identifiable health information (“PHI”) that is created, received or maintained by a range of covered entities. HIPAA has also established standards governing uniform health care transactions, the codes and identifiers to be used by the covered entities and standards governing the security of certain electronic transactions conducted by covered entities. Penalties for violations can range from civil money penalties for errors and negligent acts to criminal fines and imprisonment for knowing and intentional misconduct.

In addition, the Company is subject to various federal, state and local environmental laws and regulations. Such laws and regulations often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of hazardous or toxic substances. The costs of any required remediation or removal of these substances could be substantial and the liability of an owner or operator as to any property is generally not limited under such laws and regulations and could exceed the property’s value and the aggregate assets of the owner or operator. The presence of these substances or failure to remediate such contamination properly may also adversely affect the owner’s ability to sell or rent the property, or to borrow using the property as collateral. Under these laws and regulations, an owner, operator or an entity that arranges for the disposal of hazardous or toxic substances, such as asbestos-containing materials, at a disposal site may also be liable for the costs of any

13

required remediation or removal of the hazardous or toxic substances at the disposal site. In connection with the ownership or operation of its properties, the Company could be liable for these costs, as well as certain other costs, including governmental fines and injuries to persons or properties. The Company has completed Phase I environmental audits of substantially all of the communities in which the Company owns interests, typically at the time of acquisition, and such audits have not revealed any material environmental liabilities that exist with respect to these communities.

Under various federal, state and local environmental laws, ordinances and regulations, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances or petroleum product releases at such property, and may be held liable to a governmental entity or to third parties for property damage and for investigation and clean-up costs. The Company is not aware of any environmental liability with respect to any of its owned, leased or managed communities that the Company believes would have a material adverse effect on its business, financial condition, or results of operations. The Company believes that its communities are in compliance in all material respects with all federal, state and local laws, ordinances and regulations regarding hazardous or toxic substances or petroleum products. The Company has not been notified by any governmental authority, and is not otherwise aware of any material non-compliance, liability or claim relating to hazardous or toxic substances or petroleum products in connection with any of the communities the Company currently operates.

The Company believes that the structure and composition of government and, specifically, health care regulations will continue to change and, as a result, regularly monitors developments in the law. The Company expects to modify its agreements and operations from time to time as the business and regulatory environments change. While the Company believes it will be able to structure all its agreements and operations in accordance with applicable law, there can be no assurance that its arrangements will not be successfully challenged.

Competition

The senior living industry is highly competitive, and the Company expects that all segments of the industry will become increasingly competitive in the future. Although there are a number of substantial companies active in the senior living industry and in the markets in which the Company operates, the industry continues to be very fragmented and characterized by numerous small operators. The Company primarily competes with national operators such as Brookdale Senior Living Inc., Holiday Retirement Corp., and Five Star Quality Care, Inc. and other regional and local independent operators. The Company believes that the primary competitive factors in the senior living industry are: (i) location; (ii) reputation for and commitment to a high quality of service; (iii) quality on-site staff and support service offerings (such as food services); (iv) fair price for services provided; and (v) physical appearance and amenities associated with the communities. The Company competes with other companies providing independent living, assisted living, skilled nursing, home health care, and other similar service and care alternatives, some of whom may have greater financial resources than the Company. Because seniors tend to choose senior living communities near their homes, the Company’s principal competitors are other senior living and long-term care communities in the same geographic areas as the Company’s communities. The Company also competes with other health care businesses with respect to attracting and retaining nurses, technicians, aides and other high quality professional and non-professional employees and managers.

Employees

As of December 31, 2015, the Company employed 7,384 persons, of which 3,871 were full-time employees (92 of whom are located at the Company’s corporate offices) and 3,513 were part-time employees. None of the Company’s employees are currently represented by a labor union and the Company is not aware of any union organizing activity among its employees. The Company believes that its relationship with its employees is good.

14

Executive Officers and Other Key Employees of the Registrant

The following table sets forth certain information concerning each of the Company’s executive officers and other key employees as of December 31, 2015:

Name	Age		Position(s) with the Company
Lawrence A. Cohen		62	Chief Executive Officer and Vice Chairman of the Board
Keith N. Johannessen		59	President and Chief Operating Officer
Carey P. Hendrickson		53	Senior Vice President and Chief Financial Officer
David R. Brickman		57	Senior Vice President, Secretary and General Counsel
David W. Beathard, Sr.		68	Senior Vice President — Operations
Gregory P. Boemer.		48	Vice President — Operations
Gary E. Fernandez		52	Vice President — National Sales and Marketing
Joseph G. Solari		51	Vice President — Corporate Development
Gloria Holland		48	Vice President — Finance
Glen H. Campbell		71	Vice President — Asset Management
Christopher H. Lane		44	Vice President — Financial Reporting
Robert F. Hollister		60	Property Controller

Lawrence A. Cohen has served as one of our directors since November 1996 and as Vice Chairman of the Board since November 1996. He has served as our Chief Executive Officer since May 1999 and was our Chief Financial Officer from November 1996 to May 1999. From 1991 to 1996, Mr. Cohen served as President and Chief Executive Officer of Paine Webber Properties Incorporated. Mr. Cohen serves on the boards of various charitable organizations and is active in several industry associations. Mr. Cohen was a founding member and is Chairman of the American Seniors Housing Association and serves on the Operator Advisory Board of the National Investment Center for the Seniors Housing & Care Industry. He received an LL.M. in Taxation from New York University School of Law, a JD from St. John’s University School of Law, and a BBA in Accounting from The George Washington University. Mr. Cohen has had positions with businesses involved in senior living for 31 years.

Keith N. Johannessen has been a director since 1999. Mr. Johannessen has served as our President since 1994 and Chief Operating Officer since 1999. He previously served as our Executive Vice President from May 1993 to February 1994. He has more than 37 years of operational experience in seniors housing. He began his senior housing career in 1978 with Life Care Services Corporation and then joined Oxford Retirement Services, Inc as Executive Vice President. Mr. Johannessen later served as Senior Manager in the health care practice of Ernst & Young LLP prior to joining the Company in 1993. He has served on the State of the Industry and Model Assisted Living Regulations Committees of the American Seniors Housing Association. Mr. Johannessen holds a Bachelor of Arts degree.

Carey P. Hendrickson joined the Company as Senior Vice President and Chief Financial Officer in May 2014. From 2010 through 2014, he served as the Senior Vice President/Chief Financial Officer and Treasurer of Belo Corp., a television company that owned and operated network-affiliated television stations and their associated websites (“Belo”). Prior to serving in such capacity, Mr. Hendrickson served Belo in various roles including Senior Vice President/Chief Accounting Officer, Vice President/Human Resources, Vice President/Investor Relations and Corporate Communications, and Vice President/Strategic & Financial Planning. He began his career with KPMG LLP and was the director of financial planning for Republic Financial Services before joining Belo in 1992. Mr. Hendrickson received a BBA in Accounting from Baylor University and a Master of Business Administration in Finance from the University of Texas in Arlington.

David R. Brickman is currently the Senior Vice President, Secretary, and General Counsel of the Company. He served as Vice President and General Counsel of the Company and its predecessors since July 1992 and has

15

served as Secretary of the Company since May 2007. From 1989 to 1992, Mr. Brickman served as in-house counsel with LifeCo Travel Management Company, a corporation that provided travel services to U.S. corporations. Mr. Brickman earned a Juris Doctor and Masters of Business Administration from the University of South Carolina and a Masters in Health Administration from Duke University. He currently serves on the Board of Advisors for the Southern Methodist University Corporate Counsel Symposium. He is also a member of the National Center for Assisted Living In-house Counsel Roundtable Task Force, as well as the Long-Term Care Risk Legal Forum. Mr. Brickman has either practiced law or performed in-house counsel functions for 29 years.

David W. Beathard, Sr. is currently the Senior Vice President — Operations of the Company. He served as Vice President — Operations of the Company and its predecessors from August 1996 to June 2013. From 1992 to 1996, Mr. Beathard owned and operated a consulting firm, which provided operational, marketing, and feasibility consulting regarding senior housing facilities. Mr. Beathard has been active in the operational, sales and marketing, and construction oversight aspects of senior housing for 42 years.

Gregory P. Boemer joined the Company in October 2001 as a Regional Manager and has served as Vice President — Operations since June 2013. Prior to joining the Company, Mr. Boemer was a Regional Manager for Alterra Healthcare. Mr. Boemer is a graduate of Texas A&M University and attended the University of North Texas with a focus in Gerontology. Mr. Boemer has been active in all aspects of senior housing for 19 years.

Gary E. Fernandez joined the Company in October 2001 as a Regional Sales and Marketing Director and served in such capacity until being promoted to his current position of Vice President — National Sales and Marketing in January 2014. In addition to his role as Regional Sales and Marketing Director with the Company, he served as Director of Corporate Marketing and Media from 2002 to 2003. Prior to joining the Company, he served as National Sales and Marketing Director with Hearthstone Assisted Living from 1999 to 2001. He also served as Director of Advertising with Alterra Healthcare from 1997 to 1999. He is a graduate of the University of Wisconsin — Milwaukee and has been active in the senior housing industry for 18 years.

Joseph G. Solari joined the Company as Vice President — Corporate Development in September 2010. Mr. Solari has more than 18 years of experience originating, structuring, negotiating and executing the acquisition, sale and divestiture of healthcare real estate and real estate operating companies. Prior to joining the Company, from 2007 to 2009, Mr. Solari was Managing Director, Acquisitions for Ventas, Inc., where he was responsible for the firm’s real estate investment activities in the seniors housing and skilled nursing industries. Prior to Ventas, Inc., from 1999 to 2007, Mr. Solari spent eight years in the healthcare investment banking group of Houlihan Lokey, where he was responsible for the origination and execution of merger and acquisition, private placement and financial restructuring engagements for the firm’s healthcare clients, with particular focus on facility-based, healthcare services companies. Mr. Solari earned his Masters in Business Administration degree from Virginia Commonwealth University.

Gloria M. Holland has served as Vice President — Finance of the Company since June 2004. From 2001 to 2004, Ms. Holland served as Assistant Treasurer and a corporate officer for Aurum Technology, Inc., a privately held company that provided technology and outsourcing to community banks. From 1996 to 2001, Ms. Holland held positions in Corporate Finance and Treasury at Brinker International, an owner and operator of casual dining restaurants. From 1989 to 1996, Ms. Holland was a Vice President in the Corporate Banking division of NationsBank and predecessor banks. Ms. Holland received a BBA in Finance from the University of Mississippi in 1989.

Glen H. Campbell has served as Vice President — Asset Management of the Company since September 1997. From 1990 to 1997 Mr. Campbell served as Vice President of Development for Greenbrier Corporation, an assisted living development and management company. From 1985 to 1990 Mr. Campbell served as Director of Facility Management for Retirement Corporation of America. Mr. Campbell has been active in the design and development of retirement communities for 43 years.

Christopher H. Lane, a Certified Public Accountant, joined the Company in December 2008 and currently serves as Vice President — Financial Reporting. Prior to joining the Company, Mr. Lane served as a Senior Manager in the financial services audit practice of KPMG LLP. Mr. Lane earned a Masters in Accounting from Texas Tech University and is a member of the American Institute of Certified Public Accountants, Texas Society of Certified Public Accountants and Institute of Management Accountants.

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Robert F. Hollister, a Certified Public Accountant, has served as Property Controller for the Company and its predecessors since April 1992. From 1985 to 1992, Mr. Hollister was Chief Financial Officer and Controller of Kavanaugh Securities, Inc., a National Association of Securities Dealers broker dealer. Mr. Hollister is a member of the American Institute of Certified Public Accountants.

Subsidiaries

Capital Senior Living Corporation is the parent company of several direct and indirect subsidiaries. Although Capital Senior Living Corporation and its subsidiaries are referred to collectively for ease of reference in this Form 10-K as the Company, these subsidiaries are separately incorporated and maintain their legal existence separate and apart from the parent, Capital Senior Living Corporation.

ITEM 1A. RISK FACTORS.

Our business involves various risks and uncertainties. When evaluating our business the following information should be carefully considered in conjunction with the other information contained in our periodic filings with the SEC. Additional risks and uncertainties not known to us currently or that currently we deem to be immaterial also may impair our business operations. If we are unable to prevent events that have a negative effect from occurring, then our business may suffer. Negative events are likely to decrease our revenue, increase our costs, make our financial results poorer and/or decrease our financial strength, and may cause our stock price to decline.

We have significant debt and our failure to generate cash flow sufficient to cover required interest and principal payments could result in defaults of the related debt.

As of December 31, 2015, we had mortgage and other indebtedness, excluding deferred loan costs, totaling approximately $777.1 million. We cannot assure you that we will generate cash flow from operations or receive proceeds from refinancings, other financings or the sales of assets sufficient to cover required interest and principal payments. Any payment or other default could cause the applicable lender to foreclose upon the communities securing the indebtedness with a consequent loss of income and asset value to us. Further, because some of our mortgages contain cross-default and cross-collateralization provisions, a payment or other default by us with respect to one community could affect a significant number of our other communities.

We have significant lease obligations and our failure to generate cash flows sufficient to cover these lease obligations could result in defaults under the lease agreements.

As of December 31, 2015, we leased 50 communities with future lease obligations totaling approximately $570.3 million, with minimum lease obligations of $64.4 million in fiscal 2016. We cannot assure you that we will generate cash flow from operations or receive proceeds from refinancings, other financings or the sales of assets sufficient to cover these required operating lease obligations. Any payment or other default under any such lease could result in the termination of the lease, with a consequent loss of income and asset value to us. Further, because our leases contain cross-default provisions, a payment or other default by us with respect to one leased community could affect all of our other leased communities with related lessors. Certain of our leases contain various financial and other restrictive covenants, which could limit our flexibility in operating our business. Failure to maintain compliance with the lease obligations as set forth in our lease agreements could have a material adverse impact on us. The termination of a significant portion of our facility lease agreements could have a material adverse effect on our business, financial condition, cash flows, and results of operations.

Our failure to comply with financial covenants and other restrictions contained in debt instruments and lease agreements could result in the acceleration of the related debt or lease or in the exercise of other remedies.

Our outstanding indebtedness and leases are secured by our communities, and, in certain cases, a guaranty by our Company or by one or more of our subsidiaries. Therefore, an event of default under the outstanding indebtedness or leases, subject to cure provisions in certain instances, would give the respective lenders or les-

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sors, as applicable, the right to declare all amounts outstanding to be immediately due and payable, terminate the lease, or foreclose on collateral securing the outstanding indebtedness and leases.

There are various financial covenants and other restrictions in certain of our debt instruments and lease agreements, including provisions which:

• require us to meet specified financial tests at the subsidiary company level, which include, but are not limited to, tangible net worth requirements;

• require us to meet specified financial tests at the community level, which include, but are not limited to, lease coverage tests; and

• require consent for changes in control of us.

If we fail to comply with any of these requirements, then the related indebtedness or lease obligations could become due and payable prior to their stated dates. We cannot assure that we could pay these debt or lease obligations if they became due prior to their stated dates.

We will require additional financing and/or refinancings in the future and may issue equity securities.

Our ability to obtain such financing or refinancing on terms acceptable to us could have a material adverse effect on our business, financial condition, cash flows, and results of operations. Our ability to meet our long-term capital requirements, including the repayment of certain long-term debt obligations, will depend, in part, on our ability to obtain additional financing or refinancings on acceptable terms from available financing sources, including through the use of mortgage financing, joint venture arrangements, by accessing the debt and/or equity markets and possibly through operating leases or other types of financing, such as lines of credit. Turmoil in the financial markets can severely restrict the availability of funds for borrowing and may make it more difficult or costly for us to raise capital. There can be no assurance that financing or refinancings will be available or that, if available, will be on terms acceptable to us. Moreover, raising additional funds through the issuance of equity securities could cause existing stockholders to experience dilution and could adversely affect the market price of our common stock. Disruptions in the financial markets may have a significant adverse effect on the market value of our common stock and other adverse effects on us and our business. Our inability to obtain additional financing or refinancings on terms acceptable to us could delay or eliminate some or all of our growth plans, necessitate the sales of assets at unfavorable prices or both, and would have a material adverse effect on our business, financial condition, cash flows, and results of operations.

Increases in market interest rates could significantly increase the costs of our floating rate debt and lease obligations, which could adversely affect our liquidity and earnings.

Our floating rate debt and lease obligations and any future indebtedness and lease obligations, if applicable, exposes us to interest rate risk. Therefore, increases in prevailing interest rates could increase in the future our interest or lease payment obligations and could in the future have a material adverse effect on our business, financial condition, cash flows, and results of operations.

We cannot assure that we will be able to effectively manage our growth.

We intend to expand our operations, directly or indirectly, through the acquisition of existing senior living communities and/or the expansion of some of our existing senior living communities. The success of our growth strategy will depend, in large part, on our ability to implement these plans and to effectively operate these communities. If we are unable to manage our growth effectively, our business, financial condition, cash flows, and results of operations may be adversely affected.

We cannot assure that we will attempt to, or be able to, acquire additional senior living communities, or expand existing senior living communities.

The acquisition of existing communities or other businesses involves a number of risks. Existing communities available for acquisition frequently serve or target different markets than those presently served by us. We may also determine that renovations of acquired communities and changes in staff and operating management

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personnel are necessary to successfully integrate those communities or businesses into our existing operations. The costs incurred to reposition or renovate newly acquired communities may not be recovered by us. In undertaking acquisitions, we also may be adversely impacted by unforeseen liabilities attributable to the prior operators of those communities or businesses, against whom we may have little or no recourse. The success of our acquisition strategy will be determined by numerous factors, including our ability to identify suitable acquisition candidates; the competition for those acquisitions; the purchase price; the requirement to make operational or structural changes and improvements; the financial performance of the communities or businesses after acquisition; our ability to finance the acquisitions; and our ability to integrate effectively any acquired communities or businesses into our management, information, and operating systems. We cannot assure that our acquisition of senior living communities or other businesses will be completed at the rate currently expected, if at all, or if completed, that any acquired communities or businesses will be successfully integrated into our operations.

Our ability to successfully expand existing senior living communities will depend on a number of factors, including, but not limited to, our ability to acquire suitable sites at reasonable prices; our success in obtaining necessary zoning, licensing, and other required governmental permits and authorizations; and our ability to control construction costs and accurately project completion schedules. Additionally, we anticipate that the expansion of existing senior living communities may involve a substantial commitment of capital for a period of time of two years or more until the expansions are operating and producing revenue, the consequence of which could be an adverse impact on our liquidity.

Termination of resident agreements and resident attrition could affect adversely our revenues and earnings.

State regulations governing assisted living facilities require written resident agreements with each resident. Most of these regulations also require that each resident have the right to terminate the resident agreement for any reason on reasonable notice. Consistent with these regulations, the resident agreements signed by us allow residents to terminate their lease upon 0 to 30 days’ notice. Thus, we cannot contract with residents to stay for longer periods of time, unlike typical apartment leasing arrangements that involve lease agreements with specified leasing periods of up to a year or longer. Our resident agreements generally provide for termination of the lease upon death or allow a resident to terminate their lease upon the need for a higher level of care not provided at the community. If a large number of residents elected to or otherwise terminate their resident agreements at or around the same time, then our revenues and earnings could be adversely affected. In addition, the advanced age of our average resident means that the resident turnover rate in our senior living facilities may be difficult to predict.

We largely rely on private pay residents and circumstances that adversely affect the ability of the elderly to pay for our services could have a material adverse effect on us.

Approximately 95% of our total revenues from communities that we operated were attributable to private pay sources and approximately 5% of our revenues from these communities were attributable to reimbursements from Medicaid during fiscal 2015. We expect to continue to rely primarily on the ability of residents to pay for our services from their own or family financial resources. Unfavorable economic conditions in the housing, financial, and credit markets, inflation, or other circumstances that adversely affect the ability of the elderly to pay for our services could have a material adverse effect on our business, financial condition, cash flows, and results of operations.

The senior living services industry is very competitive and some competitors may have substantially greater financial resources than us.

The senior living services industry is highly competitive, and we expect that all segments of the industry will become increasingly competitive in the future. We compete with other companies providing independent living, assisted living, home health care and other similar services and care alternatives. We also compete with other health care businesses with respect to attracting and retaining nurses, technicians, aides and other high quality professional and non-professional employees and managers. Although we believe there is a need for senior living communities in the markets where we operate residences, we expect that competition will increase from existing competitors and new market entrants, some of whom may have substantially greater financial

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resources than us. In addition, some of our competitors operate on a not-for-profit basis or as charitable organizations and have the ability to finance capital expenditures on a tax-exempt basis or through the receipt of charitable contributions, neither of which are available to us. Furthermore, if the development of new senior living communities outpaces the demand for those communities in the markets in which we have senior living communities, those markets may become saturated. Regulation in the independent and assisted living industry is not substantial. Consequently, development of new senior living communities could outpace demand. An oversupply of those communities in our markets could cause us to experience decreased occupancy, reduced operating margins and lower profitability.

We rely on the services of key executive officers and the loss of these officers or their services could have a material adverse effect on us.

We depend on the services of our executive officers for our management. The loss of some of our executive officers and the inability to attract and retain qualified management personnel could affect our ability to manage our business and could adversely affect our business, financial condition, cash flows, and results of operations.

A significant increase in our labor costs could have a material adverse effect on us.

We compete with other providers of senior living services with respect to attracting and retaining qualified management personnel responsible for the day-to-day operations of each of our communities and skilled personnel responsible for providing resident care. A shortage of nurses or trained personnel may require us to enhance our wage and benefits package in order to compete in the hiring and retention of these personnel or to hire more expensive temporary personnel. We also will be dependent on the available labor pool of semi-skilled and unskilled employees in each of the markets in which we operate. No assurance can be given that our labor costs will not increase, or that, if they do increase, they can be matched by corresponding increases in rates charged to residents. Any significant failure by us to control our labor costs or to pass on any increased labor costs to residents through rate increases could have a material adverse effect on our business, financial condition, cash flows, and results of operations.

We are subject to risks related to the provision for employee health care benefits and recent health care reform legislation.

We use a combination of insurance and self-insurance for employee health care plans. We record expenses under these plans based on estimates of the costs of expected claims, administrative costs and stop-loss premiums. These estimates are then adjusted to reflect actual costs incurred. Actual costs under these plans are subject to variability depending primarily upon participant enrollment and demographics, the actual costs of claims and whether stop-loss insurance covers these claims. In the event that our cost estimates differ from actual costs, we could incur additional unplanned health care costs which could have a material adverse effect on our business, financial condition, cash flows, and results of operations.

In March 2010, comprehensive health care reform legislation under the Patient Protection and Affordable Care Act (HR 3590) and the Health Care Education and Affordability Reconciliation Act (HR 4872) was passed and signed into law. This legislation expands health care coverage to many uninsured individuals and expands health care coverage to those already insured under existing plans. The health care reform legislation includes, among other things, guaranteed coverage requirements, eliminates pre-existing condition exclusions and annual and lifetime maximum limits, restricts the extent to which policies can be rescinded, and imposes new and significant taxes on health insurers and health care benefits. Provisions of the health care reform legislation become effective at various dates over the next several years. The United States Department of Health and Human Services, National Association of Insurance Commissioners, Department of Labor and Treasury Department continue to issue necessary enabling regulations and guidance with respect to the health care reform legislation. Due to the breadth and complexity of the health care reform legislation, the lack of implementing regulations and interpretative guidance, and the phased-in nature of the implementation, it is difficult to predict the overall impact this legislation will have over the coming years; however, this legislation could have a material adverse effect on our business, financial condition, cash flows, and results of operations.

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There is an inherent risk of liability in the provision of personal and health care services, not all of which may be covered by insurance.

The provision of personal and health care services in the long-term care industry entails an inherent risk of liability. In recent years, participants in the long-term care industry have become subject to an increasing number of lawsuits alleging negligence or related legal theories, many of which involve large claims and result in the incurrence of significant defense costs. Moreover, senior living communities offer residents a greater degree of independence in their daily living. This increased level of independence may subject the resident and, therefore, us to risks that would be reduced in more institutionalized settings. We currently maintain insurance in amounts we believe are comparable to those maintained by other senior living companies based on the nature of the risks, our historical experience and industry standards, and we believe that this insurance coverage is adequate. However, we may become subject to claims in excess of our insurance or claims not covered by our insurance, such as claims for punitive damages, terrorism and natural disasters. A claim against us not covered by, or in excess of, our insurance could have a material adverse effect upon us.

In addition, our insurance policies must be renewed annually. Based upon poor loss experience, insurers for the long-term care industry have become increasingly wary of liability exposure. A number of insurance carriers have stopped writing coverage to this market, and those remaining have increased premiums and deductibles substantially. Therefore, we cannot assure that we will be able to obtain liability insurance in the future or that, if that insurance is available, it will be available on acceptable economic terms.

We are subject to government regulations and compliance, some of which are burdensome and some of which may change to our detriment in the future.

Federal and state governments regulate various aspects of our business. The development and operation of senior living communities and the provision of health care services are subject to federal, state and local licensure, certification and inspection laws that regulate, among other matters, the number of licensed beds, the provision of services, the distribution of pharmaceuticals, billing practices and policies, equipment, staffing (including professional licensing), operating policies and procedures, fire prevention measures, environmental matters and compliance with building and safety codes. Failure to comply with these laws and regulations could result in the denial of reimbursement, the imposition of fines, temporary suspension of admission of new residents, suspension or decertification from the Medicaid program, restrictions on the ability to acquire new communities or expand existing communities and, in extreme cases, the revocation of a community’s license or closure of a community. We believe that such regulation will increase in the future and we are unable to predict the content of new regulations or their effect on our business, any of which could materially adversely affect us.

Various states, including several of the states in which we currently operate, control the supply of licensed beds and assisted living communities through CON or other programs. In those states, approval is required for the addition of licensed beds and some capital expenditures at those communities. To the extent that a CON or other similar approval is required for the acquisition or construction of new communities, the expansion of the number of licensed beds, services, or existing communities, we could be adversely affected by our failure or inability to obtain that approval, changes in the standards applicable for that approval, and possible delays and expenses associated with obtaining that approval. In addition, in most states, the reduction of the number of licensed beds or the closure of a community requires the approval of the appropriate state regulatory agency and, if we were to seek to reduce the number of licensed beds at, or to close, a community, we could be adversely affected by a failure to obtain or a delay in obtaining that approval.

Federal and state anti-remuneration laws, such as “anti-kickback” laws, govern some financial arrangements among health care providers and others who may be in a position to refer or recommend patients to those providers. These laws prohibit, among other things, some direct and indirect payments that are intended to induce the referral of patients to, the arranging for services by, or the recommending of, a particular provider of health care items or services. Federal anti-kickback laws have been broadly interpreted to apply to some contractual relationships between health care providers and sources of patient referral. Similar state laws vary, are sometimes vague, and seldom have been interpreted by courts or regulatory agencies. Violation of these laws can result in loss of licensure, civil and criminal penalties, and exclusion of health care providers or suppliers from participation in the Medicaid program. There can be no assurance that those laws will be interpreted in a manner consistent with our practices.

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Under the Americans with Disabilities Act of 1990, all places of public accommodation are required to meet federal requirements related to access and use by disabled persons. A number of additional federal, state and local laws exist that also may require modifications to existing and planned communities to create access to the properties by disabled persons. Although we believe that our communities are substantially in compliance with present requirements or are exempt therefrom, if required changes involve a greater expenditure than anticipated or must be made on a more accelerated basis than anticipated, additional costs would be incurred by us. Further legislation may impose additional burdens or restrictions with respect to access by disabled persons, the costs of compliance with which could be substantial.

The Health Insurance Portability and Accountability Act of 1996, in conjunction with the federal regulations promulgated thereunder by the Department of Health and Human Services, has established, among other requirements, standards governing the privacy of certain protected and individually identifiable health information that is created, received or maintained by a range of covered entities. HIPAA has also established standards governing uniform health care transactions, the codes and identifiers to be used by the covered entities and standards governing the security of certain electronic transactions conducted by covered entities. Penalties for violations can range from civil money penalties for errors and negligent acts to criminal fines and imprisonment for knowing and intentional misconduct. HIPAA is a complex set of regulations and many unanswered questions remain with respect to the manner in which HIPAA applies to businesses such as those operated by us.

An increasing number of legislative initiatives have been introduced or proposed in recent years that would result in major changes in the health care delivery system on a national or a state level. Among the proposals that have been introduced are price controls on hospitals, insurance market reforms to increase the availability of group health insurance to small businesses, requirements that all businesses offer health insurance coverage to their employees and the creation of government health insurance plans that would cover all citizens and increase payments by beneficiaries. We cannot predict whether any of the above proposals or other proposals will be adopted and, if adopted, no assurances can be given that their implementation will not have a material adverse effect on our business, financial condition or results of operations.

We may be subject to liability for environmental damages.

Under various federal, state and local environmental laws, ordinances and regulations, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances or petroleum product releases at the property, and may be held liable to a governmental entity or to third parties for property damage and for investigation and clean-up costs incurred by those parties in connection with the contamination. These laws typically impose clean-up responsibility and liability without regard to whether the owner knew of or caused the presence of the contaminants, and liability under these laws has been interpreted to be joint and several unless the harm is divisible and there is a reasonable basis for allocation of responsibility. The costs of investigation, remediation or removal of the substances may be substantial, and the presence of the substances, or the failure to properly remediate the property, may adversely affect the owner’s ability to sell or lease the property or to borrow using the property as collateral. In addition, some environmental laws create a lien on the contaminated site in favor of the government for damages and costs it incurs in connection with the contamination. Persons who arrange for the disposal or treatment of hazardous or toxic substances also may be liable for the costs of removal or remediation of the substances at the disposal or treatment facility, whether or not the facility is owned or operated by the person. Finally, the owner of a site may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from a site. If we become subject to any of these claims the costs involved could be significant and could have a material adverse effect on our business, financial condition, cash flows, and results of operations.

We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.

We rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information and to manage or support a variety of our business processes, including medical records, financial transactions and maintenance of records, which may include personally identifiable information of residents and other customers and payroll data. We rely on commercially available systems, software, tools and monitoring to provide security for processing, transmitting and storing confidential information,

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such as personally identifiable information relating to health and financial accounts. Although we have taken steps to protect the security of the data maintained in our information systems, it is possible that our security measures will not be able to prevent the systems’ improper functioning, or the improper disclosure of personally identifiable information such as in the event of cyber-attacks. Security breaches, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, can create system disruptions, shutdowns or unauthorized disclosure of confidential information; however, no instances of these potential threats have been identified by the Company. The Company maintains cyber and data privacy-related insurance coverage which provides liability protection associated with network security, privacy and sensitive electronic-data, and privacy breach expenses. Any failure to maintain proper function, security and availability of our information systems could interrupt our operations, damage our reputation, subject us to liability claims or regulatory penalties and could materially and adversely affect our business, financial condition, or results of operations.

Anti-takeover provisions in our governing documents, governing law and material agreements may discourage, delay or prevent a merger or acquisition that our stockholders may consider favorable or prevent the removal of our current board of directors and management.

Certain provisions of our amended and restated certificate of incorporation and our amended and restated by-laws may discourage, delay or prevent a merger or acquisition that our stockholders may consider favorable or prevent the removal of our current board of directors and management. We have a number of anti-takeover devices in place that will hinder takeover attempts, including: a staggered board of directors consisting of three classes of directors, each of whom serve three-year terms; removal of directors only for cause, and only with the affirmative vote of at least a majority of the voting interest of stockholders entitled to vote; right of our directors to issue preferred stock from time to time with voting, economic and other rights superior to those of our common stock without the consent of our stockholders; provisions in our amended and restated certificate of incorporation and amended and restated by-laws limiting the right of our stockholders to call special meetings of stockholders; advance notice requirements for stockholders with respect to director nominations and actions to be taken at annual meetings; requirement for two-thirds stockholder approval for amendment of our by-laws and certain provisions of our certificate of incorporation; and no provision in our amended and restated certificate of incorporation for cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of our common stock can elect all the directors standing for election.

Several of our leases, loan documents and other material agreements require approval in case of a change of control of our company. These provisions may have the effect of delaying or preventing a change of control of our company even if this change of control would benefit our stockholders.

In addition to the anti-takeover provisions described above, we are subject to Section 203 of the Delaware General Corporation Law. Section 203 generally prohibits a person beneficially owning, directly or in directly, 15% or more of our outstanding common stock from engaging in a business combination with us for three years after the person acquired the stock. However, this prohibition does not apply if (A) our directors approve in advance the person’s ownership of 15% or more of the shares or the business combination or (B) the business combination is approved by our stockholders by a vote of at least two-thirds of the outstanding shares not owned by the acquiring person.

Because we do not presently have plans to pay dividends on our common stock, stockholders must look solely to appreciation of our common stock to realize a gain on their investment.

It is the policy of our Board of Directors to retain any future earnings to finance the operation and expansion of the Company’s business. Accordingly, the Company has not and does not currently anticipate declaring or paying cash dividends on your common stock in the foreseeable future. The payment of cash dividends in the future will be at the sole discretion of our Board of Directors and will depend on, among other things, the Company’s earnings, operations, capital requirements, financial condition, restrictions in then existing financing agreements and other factors deemed relevant by our Board of Directors. Accordingly, stockholders must look solely to appreciation of our common stock to realize a gain on their investment. This appreciation may not occur.

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The price of our common stock has fluctuated substantially over the past several years and may continue to fluctuate substantially in the future.

Our stock price may continue to be subject to significant fluctuations as a result of a variety of factors, which are described throughout this Annual report on Form 10-K, including those factors discussed under this section entitled “Risk Factors.” Some of these factors are beyond our control. We may fail to meet the expectations of our stockholders or securities analysts at some point in the future, and our stock price could decline as a result.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

The executive and administrative offices of the Company are located at 14160 Dallas Parkway, Suite 300, Dallas, Texas 75254, and consist of approximately 26,000 square feet. The lease on the premises currently extends through September 2020. The Company believes that its corporate office facilities are adequate to meet its requirements through at least fiscal 2016 and that suitable additional space will be available, as needed, to accommodate further physical expansion of corporate operations. The Company also leases executive office space in New York, New York pursuant to a two-year lease agreement.

As of December 31, 2015, the Company owned or leased and managed the senior living communities referred to in Item 1 above under the caption “Operating Communities.”

ITEM 3. LEGAL PROCEEDINGS.

The Company has claims incurred in the normal course of its business. Most of these claims are believed by management to be covered by insurance, subject to normal reservations of rights by the insurance companies and possibly subject to certain exclusions in the applicable insurance policies. Whether or not covered by insurance, these claims, in the opinion of management, based on advice of legal counsel, should not have a material effect on the consolidated financial statements of the Company if determined adversely to the Company.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

(a) Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

Market Information and Holders

The Company’s shares of common stock are listed for trading on the New York Stock Exchange (“NYSE”) under the symbol “CSU”. The following table sets forth, for the periods indicated, the high and low sales prices for the Company’s common stock, as reported on the NYSE. At February 19, 2016, there were approximately 165 stockholders of record of the Company’s common stock.

	2015				2014
Year	High		Low		High		Low
First Quarter	$	26.75	$	22.52	$	26.89	$	21.52
Second Quarter		27.75		24.40		26.85		22.26
Third Quarter		24.97		19.20		25.84		20.33
Fourth Quarter		24.55		19.59		25.91		21.05

Dividends

It is the policy of the Company’s Board of Directors to retain all future earnings to finance the operation and expansion of the Company’s business. Accordingly, the Company did not declare or pay cash dividends on its common stock during fiscal 2015 or 2014 and does not anticipate declaring or paying cash dividends on the common stock in the foreseeable future. The payment of cash dividends in the future will be at the sole discretion of the Company’s Board of Directors and will depend on, among other things, the Company’s earnings, operations, capital requirements, financial condition, restrictions in then existing financing agreements, and other factors deemed relevant by the Board of Directors.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table presents information relating to the Company’s equity compensation plans as of December 31, 2015:

Plan Category	Number of Securities  to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		Weighted-Average Exercise Price of the Outstanding Options, Warrants and Rights		Number of  Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in First Column)
Equity compensation plans approved by security holders		3,000	$	10.97		1,901,886
Equity compensation plans not approved by security holders		—		—		—
Total		3,000	$	10.97		1,901,886

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Performance Graph

The following Performance Graph shows the cumulative total return for the five-year period ended December 31, 2015, in the value of $100 invested in: (1) the Company’s common stock; (2) the Standard & Poor’s Broad Market Index (the “S&P 500”); and (3) the common stock of the Peer Group (as defined below) of companies, whose returns represent the arithmetic average of such companies. The values with each investment as of the beginning of each year are based on share price appreciation and the reinvestment of any dividends on the respective ex-dividend dates.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

Among Capital Senior Living Corporation, the S&P 500 Index, and a Peer Group

* $100 invested on 12/31/10 in stock or index, including reinvestment of dividends. Fiscal year ending December 31.

Copyright^© 2016 S&P, a division of McGraw Hill Financial. All rights reserved.

The preceding graph assumes $100 invested at the beginning of the measurement period, including reinvestment of any dividends, in the Company’s common stock, the S&P 500, and the Peer Group and was plotted using the following data:

	Cumulative Total Returns
	12/10		12/11		12/12		12/13		12/14		12/15
Capital Senior Living Corporation		100.00		118.51		278.96		358.06		371.79		311.34
S&P 500		100.00		102.11		118.45		156.82		178.29		180.75
Peer Group		100.00		77.77		114.29		122.87		160.43		82.00

The Company’s Peer Group, which was selected in good faith on an industry basis, consists of Brookdale Senior Living, Inc. and Five Star Quality Care, Inc.

(b) Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities.

Not applicable.

(c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

The following information is provided pursuant to Item 703 of Regulation S-K. The Company did not repurchase any shares of its common stock pursuant to the Company’s share repurchase program (as described

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below) during the year ended December 31, 2015. The information set forth in the table below reflects shares repurchased by the Company pursuant to this program prior to the year ended December 31, 2015.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(1)
Total at September 30, 2015		349,800	$	2.67		349,800	$	9,065,571
October 1 – October 31, 2015		—		—		—		—
November 1 – November 30, 2015		—		—		—		—
December 1 – December 31, 2015		—		—		—		—
Total at December 31, 2015		349,800	$	2.67		349,800	$	9,065,571

(1) On January 22, 2009, the Company’s board of directors approved a share repurchase program that authorized the Company to purchase up to $10.0 million of the Company’s common stock. The repurchase program does not obligate the Company to acquire any particular amount of common stock and the share repurchase authorization has no stated expiration date. All shares that have been purchased by the Company under this program were purchased in open-market transactions. On January 14, 2016, the Company announced that its board of directors has approved a continuation of the share repurchase program.

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ITEM 6. SELECTED FINANCIAL DATA.

The following table presents selected financial data of the Company which has been derived from the audited consolidated financial statements of the Company. The selected financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes thereto included in this Annual Report.

	At and for the Year Ended December 31,
	2015			2014			2013			2012			2011
	(In thousands, except per share and other data)
Consolidated Statements of Operations and Comprehensive (Loss) Income Data:
Total revenues	$	412,177		$	383,925		$	350,362		$	310,536		$	263,502
Income from operations		18,835			13,900			11,250			13,655			17,911
Net (loss) income		(14,284	)		(24,126	)		(16,504	)		(3,119	)		3,025
Net (loss) income per share:
Basic net (loss) income per share	$	(0.50	)	$	(0.83	)	$	(0.58	)	$	(0.11	)	$	0.11
Diluted net (loss) income per share	$	(0.50	)	$	(0.83	)	$	(0.58	)	$	(0.11	)	$	0.11
Balance Sheet Data:
Cash and cash equivalents (excluding restricted cash)	$	56,087		$	39,209		$	13,611		$	18,737		$	22,283
Working capital (deficit)(1)		26,726			13,113			(5,892	)		(5,712	)		20,786
Total assets(1)		1,019,033			891,370			745,549			636,942			462,326
Long-term debt, excluding current portion(1)		754,949			592,884			467,376			342,366			224,940
Shareholders’ equity	$	135,746		$	141,174		$	157,950		$	168,594		$	169,141
Other Data:
Communities (at end of period)
Owned or leased		121			117			109			98			81
Joint ventures & managed		—			—			3			3			3
Total		121			117			112			101			84
Resident capacity:
Owned or leased		15,416			15,149			13,939			12,973			11,150
Joint ventures & managed		—			—			674			674			674
Total		15,416			15,149			14,613			13,647			11,824

(1) Working capital, total assets, and long-term debt, excluding current portion, for fiscal 2015 excludes $8,532 in debt issuance costs, net of accumulated amortization, and fiscal 2014 was revised from amounts previously reported to reflect the impact of reclassifying $6,331 in debt issuance costs, net of accumulated amortization, from other assets to notes payable. This revision was due to the Company’s adoption of ASU 2015-03, Interest—Imputation of Interest- Simplifying the Presentation of Debt Issuance Costs, during the fourth quarter of fiscal 2015 which requires current and retrospective application to the Company’s Consolidated Balance Sheets for all periods presented.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Certain information contained in this report constitutes “Forward-Looking Statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which can be identified by the use of forward-looking terminology such as “may,” “will,” “would,” “intend,” “could,” “believe,” “expect,” “anticipate,” “estimate” or “continue” or the negative thereof or other variations thereon or comparable terminology. The Company cautions readers that forward-

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looking statements, including, without limitation, those relating to the Company’s future business prospects, revenues, working capital, liquidity, capital needs, interest costs, and income, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements, due to several important factors herein identified. These factors include the Company’s ability to find suitable acquisition properties at favorable terms, financing, licensing, business conditions, risks of downturn in economic conditions generally, satisfaction of closing conditions such as those pertaining to licensure, availability of insurance at commercially reasonable rates, and changes in accounting principles and interpretations, among others, and other risks and factors identified from time to time in the Company’s reports filed with the SEC.

Overview

The following discussion and analysis addresses (i) the Company’s results of operations on a historical consolidated basis for the years ended December 31, 2015, 2014, and 2013, and (ii) liquidity and capital resources of the Company and should be read in conjunction with the Company’s historical consolidated financial statements and the selected financial data contained elsewhere in this report.

The Company is one of the largest operators of senior living communities in the United States. The Company’s operating strategy is to provide value to its senior living residents by providing quality senior living services at reasonable prices, while achieving and sustaining a strong, competitive position within its geographically concentrated regions, as well as continuing to enhance the performance of its operations. The Company provides senior living services to the elderly, including independent living, assisted living, and home care services at reasonable prices. Many of the Company’s communities offer a continuum of care to meet its residents’ needs as they change over time. This continuum of care, which integrates independent living and assisted living and is bridged by home care through independent home care agencies or the Company’s home care agency, sustains residents’ autonomy and independence based on their physical and mental abilities.

As of December 31, 2015, the Company operated 121 senior living communities in 23 states with an aggregate capacity of approximately 15,400 residents, including 71 senior living communities which the Company owned and 50 senior living communities the Company leased. As of December 31, 2015, the Company also operated one home care agency.

Significant Financial and Operational Highlights

The Company primarily derives its revenue by providing senior living and healthcare services to the elderly and operating senior living communities under joint venture arrangements. When comparing fiscal 2015 to fiscal 2014, the Company generated total revenues of approximately $412.2 million compared to total revenues of approximately $383.9 million, respectively, representing an increase of approximately $28.3 million, or 7.4%. The increase in revenues primarily results from the senior living communities acquired by the Company during fiscal 2015 and a full year of activity for the senior living communities acquired by the Company during fiscal 2014 which was slightly offset by a decrease in revenues due to the five properties sold by the Company during fiscal 2015.

The weighted average financial occupancy rate for our consolidated communities for the fiscal years ended December 31, 2015 and 2014 was 88.3% and 87.1%, respectively. In addition to the increase we experienced in total consolidated occupancies, we also achieved an increase in average monthly rental rates of 6.5% at our consolidated communities when comparing fiscal 2015 to fiscal 2014. On a same-store basis, the weighted average financial occupancy rate for our consolidated communities for the fiscal year ended December 31, 2015 and 2014 was 88.0% and 87.5%, respectively. In addition to the increase we experienced in our same-store occupancies, we also achieved an increase in average monthly rental rates of 2.7% when comparing fiscal 2015 to fiscal 2014. The increase in occupancies and average monthly rental rates was primarily the result of our recent community acquisitions and the capital improvements we have prudently invested in our communities for unit conversions which enable us to provide a broader range of senior living services at higher levels of care.

On December 17, 2015, the Company completed supplemental mortgage financing of approximately $7.6 million from Fannie Mae on three senior living communities at a fixed interest rate of 5.49% which is cotermi-

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nous with existing mortgage debt maturing in November 2022. The supplemental mortgage loans are cross-collateralized and cross-defaulted with the original mortgage debt.

On November 24, 2015, the Company completed supplemental mortgage financing of approximately $3.2 million from Fannie Mae on one senior living community at a fixed interest rate of 5.46% which is coterminous with existing mortgage debt maturing in April 2023. The supplemental mortgage loan is cross-collateralized and cross-defaulted with the original mortgage debt.

On November 24, 2015, the Company completed supplemental mortgage financing of approximately $8.7 million from Fannie Mae on one senior living community at a fixed interest rate of 5.39% which is coterminous with existing mortgage debt maturing in January 2023. The supplemental mortgage loan is cross-collateralized and cross-defaulted with the original mortgage debt.

On November 12, 2015, the Company repaid mortgage loans totaling approximately $31.6 million from Fannie Mae associated with four of its senior living communities scheduled to mature in June 2017. The Company obtained approximately $52.8 million of new long-term fixed interest rate mortgage financing from Berkadia Commercial Mortgage LLC (“Berkadia”), who later sold the loans to Fannie Mae, at a fixed interest rate of 4.68% with a 10-year term and the principal amortized over a 30-year term. As a result of the early repayment of the existing mortgage debt, the Company accelerated the amortization of approximately $0.1 million in unamortized deferred financing costs and incurred a prepayment premium of approximately $1.7 million to Fannie Mae.

Effective October 30, 2015, the Company closed the acquisition of one senior living community located in Virginia Beach, Virginia, for $38.0 million (the “Virginia Beach Transaction”). The community consists of 111 assisted living units. The Company obtained financing from Protective Life Insurance Company (“Protective Life”) for $28.0 million of the acquisition price at a fixed interest rate of 4.25% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective September 30, 2015, the Company closed the acquisition of one senior living community located in Mahomet, Illinois, for $15.5 million Mahomet Transaction (the “Mahomet Transaction”). The community consists of 78 assisted living units. The Company obtained financing from Fannie Mae for approximately $11.1 million of the acquisition price at a fixed interest rate of 4.69% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

On September 30, 2015, the Company completed supplemental financing of approximately $5.0 million from Fannie Mae on an existing senior living community owned by the Company located in Macedonia, Ohio. The supplemental loan is coterminous with existing mortgage debt maturing in October 2021 with a 5.19% fixed interest rate and the principal amortized over a 30-year term. The supplemental loan is cross-collateralized and cross-defaulted with the original mortgage debt.

On September 24, 2015, the Company obtained approximately $8.4 million long-term fixed interest rate mortgage financing from Fannie Mae to replace interim variable interest rate financing obtained by the Company from Berkadia on September 30, 2013, in connection with the Company’s previous acquisition of a senior living community located in Oakwood, Georgia. The new mortgage loan has a 10-year term with a 4.7% fixed interest rate and the principal amortized over a 30-year term.

Effective August 11, 2015, the Company closed the acquisition of one senior living community located in Indianapolis, Indiana, for $21.0 million (the “Indianapolis Transaction”). The community consists of 124 assisted living units. The Company obtained financing from Protective Life for $13.2 million of the acquisition price at a fixed interest rate of 4.25% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources. The note with Protective Life associated with the Indianapolis Transaction includes a loan commitment for up to $2.6 million of supplemental funding at the same terms and 4.25% fixed interest rate. The loan commitment is based on meeting certain funding requirements and is available through February 28, 2018.

Effective August 6, 2015, the Company closed a transaction to sell one of its senior living communities located in Wichita, Kansas, for approximately $14.8 million (the “Sedgwick Sale Transaction”). As a result of

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the sale, outstanding mortgage debt totaling approximately $6.8 million was assumed by the buyer. The Company recognized a gain on sale of approximately $6.4 million and received net proceeds, less the debt assumption, of approximately $8.0 million. For income tax purposes, the Company executed a like-kind exchange and acquired a replacement property shortly after the sale which resulted in the deferral of the gain without the Company incurring any current federal or state income tax liabilities. The Company contracted with a qualified intermediary for purposes of reaching its determination that the transaction satisfied all requirements of a like-kind exchange under applicable federal and state income tax laws.

Effective July 28, 2015, the Company closed the acquisition of one senior living community located in Columbiana, Ohio, for approximately $13.3 million (the “Columbiana Transaction”). The community consists of 68 assisted living units. The Company obtained financing from Protective Life for approximately $9.9 million of the acquisition price at a fixed interest rate of 4.25% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective May 29, 2015, the Company closed the acquisition of one senior living community located in Oneonta, New York, for $14.9 million (the “Heritage Transaction”). The community consists of 64 independent living units and 44 assisted living units. The Company obtained financing from Fannie Mae for approximately $11.2 million of the acquisition price at a fixed interest rate of 4.79% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective May 21, 2015, the Company closed the acquisition of two senior living communities located in Hartford and West bend, Wisconsin, for $12.0 million (the “Emerald Transaction”). The communities consist of 79 assisted living units. The Company obtained financing from Fannie Mae for approximately $9.2 million of the acquisition price at a fixed interest rate of 4.55% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective March 27, 2015, the Company closed the acquisition of one senior living community located in Baytown, Texas, for approximately $29.6 million (the “Baytown Transaction”). The community consists of 9 independent living cottages and 120 assisted living units. The Company obtained financing from Protective Life for approximately $21.4 million of the acquisition price at a fixed interest rate of 3.55% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

On March 5, 2015, the Company repaid an interim, interest only variable rate mortgage loan totaling approximately $21.6 million from Wells Fargo on one of its senior living communities located in Toledo, Ohio. The Company obtained approximately $21.8 million of mortgage debt from Fannie Mae to replace the Wells Fargo interim financing. This new mortgage loan has a 10-year term with a fixed interest rate of 3.84% and the principal amortized over 30-years.

On February 17, 2015, the Company obtained new permanent mortgage financing totaling approximately $23.2 million from Fannie Mae on one of its owned senior living communities located in Peoria, Illinois. The new financing replaced a mortgage loan previously scheduled to mature on September 1, 2015, which was defeased by the Company on January 21, 2015, in conjunction with the Four Property Sale Transaction, discussed below. This new mortgage loan has a 10-year term with a fixed interest rate of 3.85% and the principal amortized over 30 years. As a result of the Peoria financing, the Company repaid existing mortgage debt on two owned properties totaling approximately $14.1 million.

Effective January 22, 2015, the Company closed a transaction to sell four of its senior living communities located in Oklahoma City, Oklahoma, Shreveport, Louisiana, Southfield, Michigan, and Winston-Salem, North Carolina, in a single transaction for approximately $36.5 million (the “Four Property Sale Transaction”). As a result of the sale, the outstanding mortgage debt on the Company’s senior living communities located in Oklahoma City and Shreveport was repaid without incurring any prepayment penalties as these notes were short-term, bridge loan interim financing. However, the mortgage loan associated with the Company’s senior living community located in Winston-Salem could not be prepaid under the existing loan agreement as it did not offer a prepayment provision. Therefore, the Company determined it would defease the mortgage loan by acquiring certain treasury securities to serve as collateral for the outstanding principal balance as of the date of the sale until the note matured on September 1, 2015. The Company contracted with a third party trust to assume the

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mortgage debt and assigned all of its rights to the treasury securities to serve as collateral until the balance remaining comes due. Based on this structure, the Company concluded it met the requirements to report the debt transaction as a legal defeasance which resulted in the Company removing the respective assets and liabilities from its Consolidated Balance Sheet during the first quarter of fiscal 2015 when the transaction closed. The Company previously reported these assets as held for sale at December 31, 2014, and recorded a remeasurement write-down of approximately $0.6 million to adjust the carrying values of the assets to the sales price, less costs to sell. As a result of the sale, the Company received net proceeds of approximately $35.7 million.

Effective January 13, 2015, the Company closed the acquisition of one senior living community located in Green Bay, Wisconsin, for approximately $18.3 million (the “Green Bay Transaction”). The community consists of 78 assisted living units. The Company obtained financing from Fannie Mae for approximately $14.1 million of the acquisition price at a fixed interest rate of 4.35% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Joint Venture Transactions and Management Contracts

During fiscal 2014, the Company managed three communities owned by joint ventures in which the Company had a minority interest. For communities owned by joint ventures, the Company typically received a management fee of 5% of gross revenues. The Company’s joint venture management fees were based on a percentage of gross revenues. As a result, the cash flow and profitability of such contracts to the Company were more dependent on the revenues generated by such communities and less dependent on net cash flow than for owned or leased communities. On June 30, 2014, the Company closed the SHPIII/CSL Transaction, acquiring 100% of the member interests of SHPIII/CSL Miami, SHPIII/CSL Levis Commons, and SHPIII/CSL Richmond Heights. For additional information refer to Note 4, “Acquisitions”, within the notes to consolidated financial statements.

Facility Leases

The Company currently leases 50 senior living communities from certain real estate investment trusts (“REITs”). The lease terms are generally for 10-15 years with renewal options for 5-20 years at the Company’s option. Under these lease agreements, the Company is responsible for all operating costs, maintenance and repairs, insurance and property taxes.

As of December 31, 2015, the Company leased 11 senior living communities (collectively the “Ventas Lease Agreements”), from Ventas , Inc. (“Ventas”). During the second quarter of fiscal 2015, the Company executed amendments to the master lease agreements with Ventas to facilitate up to $24.5 million of leasehold improvements for 10 communities within the Ventas lease portfolio and extend the lease terms until September 30, 2025, with two five-year renewal extensions available at the Company’s option. The initial lease rates under each of the Ventas Lease Agreements ranged from 6.75% to 8% and are subject to certain conditional escalation clauses which will be recognized when probable or incurred. The Company incurred $11.4 million in lease acquisition and modification costs related to the Ventas Lease Agreements. These deferred lease acquisition and modification costs are being amortized over the lease terms and are included in facility lease expense in the Company’s Consolidated Statement of Operations and Comprehensive Loss. The Company accounts for nine of the Ventas Lease Agreements as an operating lease and two as a capital lease and financing obligation.

As of December 31, 2015, the Company leased 15 senior living communities (collectively the “HCP Lease Agreements”), from HCP, Inc. (“HCP”). During the fourth quarter of fiscal 2013, the Company executed an amendment to the master lease agreement with HCP to facilitate up to $3.3 million of leasehold improvements for one community within the HCP lease portfolio and extend the initial lease terms for nine communities until October 31, 2020, with two 10-year renewal extensions available at the Company’s option. During the second quarter of fiscal 2015, the Company exercised its right to extend the lease term with HCP for the remaining six communities in the HCP lease portfolio until April 30, 2026, with one 10-year renewal extension available at the Company’s option. The initial lease rates under the HCP Lease Agreements ranged from 7.25% to 8% and are subject to certain conditional escalation clauses, which will be recognized when probable or incurred. The Company incurred $1.6 million in lease acquisition and modification costs related to the HCP Lease Agreements. These deferred lease acquisition and modification costs are being amortized over the lease terms and are included

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in facility lease expense in the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company accounts for each of the HCP Lease Agreements as an operating lease.

As of December 31, 2015, the Company leased 24 senior living communities (collectively the “HCN Lease Agreements”), from Welltower, Inc., formerly Health Care REIT, Inc. (“HCN”). The HCN Lease Agreements each have an initial term of 15 years, with one 15-year renewal extension available at the Company’s option. The initial lease rates under the HCN Lease Agreements ranged from 7.25% to 8.5% and are subject to certain conditional escalation clauses, which will be recognized when probable or incurred. The initial terms on the HCN Lease Agreements expire on various dates through April 2026. The Company incurred $2.1 million in lease acquisition costs related to the HCN Lease Agreements. These deferred lease acquisition costs are being amortized over the lease terms and are included in facility lease expense in the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company accounts for each of the HCN Lease Agreements as an operating lease.

The following table summarizes each of the Company’s facility lease agreements as of December 31, 2015 (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	%	$	9.5		$	4.6
Ventas	October 18, 2005		1		19.5	(4) (Two five-year renewals)		8	%		0.3			—
Ventas	June 8, 2006		1		19.1	(4) (Two five-year renewals)		8	%		0.6			—
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	(6) (One ten-year renewal)		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											15.1			37.5
Accumulated amortization through December 31, 2015											(7.4	)		—
Accumulated deferred gains / lease concessions recognized through December 31, 2015											—			(20.2	)
Net lease acquisition costs / deferred gains / lease concessions as of December 31, 2015										$	7.7		$	17.3

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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 and modification 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 17, 2015, the Company executed amendments to the master lease agreements with Ventas to facilitate up to $24.5 million of leasehold improvements for 10 of the leased communities and extend the lease terms through September 30, 2025, with two 5-year renewal extensions available at the Company’s option.

(5) On November 11, 2013, the Company executed an amendment to the master lease agreement associated with nine of its leased communities with HCP to facilitate up to $3.3 million of leasehold improvements for one of the leased communities and extend the respective lease terms through October 31, 2020, with two 10-year renewal extensions available at the Company’s option.

(6) On April 24, 2015, the Company exercised its right to extend the lease terms with HCP through April 30, 2026, with one 10-year renewal extension remaining available at the Company’s option.

Facility lease expense in the Company’s Consolidated Statements of Operations and Comprehensive Loss includes rent expense plus amortization expense relating to leasehold acquisition costs offset by the amortization of deferred gains and lease incentives. There are various financial covenants and other restrictions in the Company’s lease agreements. The Company was in compliance with all of its lease covenants at December 31, 2015 and 2014.

Debt Transactions

On December 17, 2015, the Company completed supplemental mortgage financing of approximately $7.6 million from Fannie Mae on three senior living communities located in Columbus, Ohio, Chardon, Ohio, and Greenwood, Indiana, at a fixed interest rate of 5.49% which is coterminous with existing mortgage debt maturing in November 2022. The supplemental mortgage loans are cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.2 million in deferred financing costs related to these loans, which are being amortized over the remaining initial loan terms.

On November 24, 2015, the Company completed supplemental mortgage financing of approximately $3.2 million from Fannie Mae on one senior living community located in Elkhorn, Nebraska, at a fixed interest rate of 5.46% which is coterminous with existing mortgage debt maturing in April 2023. The supplemental mortgage loan is cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over the remaining initial loan term.

On November 24, 2015, the Company completed supplemental mortgage financing of approximately $8.7 million from Fannie Mae on one senior living community located in Springfield, Missouri, at a fixed interest rate of 5.39% which is coterminous with existing mortgage debt maturing in January 2023. The supplemental mortgage loan is cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over the remaining initial loan term.

On November 12, 2015, the Company repaid mortgage loans totaling approximately $31.6 million from Fannie Mae associated with four of its senior living communities located in Columbia, South Carolina, Deer Park and Pantego, Texas, and South Bend, Indiana, scheduled to mature in June 2017. The Company obtained approximately $52.8 million of new long-term fixed interest rate mortgage financing from Berkadia, who later sold the loans to Fannie Mae, at a fixed interest rate of 4.68% with a 10-year term and the principal amortized over a 30-year term. The Company incurred approximately $0.6 million in deferred financing costs related to the new

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mortgage loans, which are being amortized over 10 years. As a result of the early repayment of the existing mortgage debt, the Company accelerated the amortization of approximately $0.1 million in unamortized deferred financing costs and incurred a prepayment premium of approximately $1.7 million to Fannie Mae.

On October 30, 2015, in conjunction with the Virginia Beach Transaction, the Company obtained $28.0 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 4.25% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.4 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On September 30, 2015, in conjunction with the Mahomet Transaction, the Company obtained approximately $11.1 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.69% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On September 30, 2015, the Company completed supplemental financing of approximately $5.0 million from Fannie Mae on an existing senior living community owned by the Company located in Macedonia, Ohio. The supplemental loan is coterminous with existing mortgage debt maturing in October 2021with a 5.19% fixed interest rate and the principal amortized over a 30-year term. The supplemental loan is cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over the remaining initial loan term.

On September 24, 2015, the Company obtained approximately $8.4 million long-term fixed interest rate mortgage financing from Fannie Mae to replace interim variable interest rate financing obtained by the Company from Berkadia on September 30, 2013, in connection with the Company’s previous acquisition of a senior living community located in Oakwood, Georgia. The new mortgage loan has a 10-year term with a 4.7% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On August 11, 2015, in conjunction with the Indianapolis Transaction, the Company obtained approximately $13.2 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 4.25% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years. The note with Protective Life associated with the Indianapolis Transaction includes a loan commitment for up to approximately $2.6 million of supplemental funding for the same term and 4.25% fixed interest rate. The loan commitment is based on meeting certain funding requirements and is available through February 28, 2018.

On August 6, 2015, outstanding mortgage debt totaling approximately $6.8 million was assumed by the buyer in conjunction with the Sedgwick Sale Transaction. As a result of the buyer’s assumption of the existing mortgage debt, the Company accelerated the amortization of approximately $0.1 million in unamortized deferred financing costs. For additional information refer to Note 5, “Dispositions”, within the notes to consolidated financial statements.

On July 28, 2015, in conjunction with the Columbiana Transaction, the Company obtained approximately $9.9 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 4.25% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On May 31, 2015, the Company renewed certain insurance policies and entered into a finance agreement totaling approximately $1.7 million. The finance agreement has a fixed interest rate of 1.73% with the principal being repaid over an 11-month term.

On May 29, 2015, in conjunction with the Heritage Transaction, the Company obtained approximately $11.2 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.79% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On May 21, 2015, in conjunction with the Emerald Transaction, the Company obtained approximately $9.2 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.55% fixed inter-

35

est rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On March 27, 2015, in conjunction with the Baytown Transaction, the Company obtained approximately $21.4 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 3.55% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On March 5, 2015, the Company repaid an interim, interest only variable rate mortgage loan totaling approximately $21.6 million from Wells Fargo on one of its senior living communities located in Toledo, Ohio. The Company obtained approximately $21.8 million of mortgage debt from Fannie Mae to replace the Wells Fargo interim financing. This new mortgage loan has a 10-year term with a fixed interest rate of 3.84% and the principal amortized over 30-years. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over the loan term. As a result of the refinance, the Company received approximately $0.2 million in cash proceeds. Due to the early repayment, the Company accelerated the amortization of approximately $79,000 in unamortized deferred financing costs and incurred additional prepayment fees totaling approximately $55,000.

On February 17, 2015, the Company obtained new permanent mortgage financing totaling approximately $23.2 million from Fannie Mae on one of its owned senior living communities located in Peoria, Illinois. The new financing replaced a mortgage loan previously scheduled to mature on September 1, 2015, which was defeased by the Company on January 22, 2015, in conjunction with the Four Property Sale Transaction. This new mortgage loan has a 10-year term with a fixed interest rate of 3.85% and the principal amortized over 30 years. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over the loan term. As a result of the Peoria financing, the Company repaid existing mortgage debt on two owned properties totaling approximately $14.1 million. Due to the early repayment, the Company accelerated the amortization of approximately $0.2 million in unamortized deferred financing costs and incurred additional prepayment fees totaling approximately $0.5 million.

On January 22, 2015, outstanding mortgage debt totaling approximately $13.7 million was defeased in conjunction with the Four Property Sale Transaction. The mortgage loan associated with the Company’s senior living community located in Winston-Salem, North Carolina, carried an outstanding balance of approximately $5.7 million and could not be prepaid under the existing loan agreement as it did not offer a prepayment provision. Additionally, this mortgage loan was cross-collateralized with another mortgage loan on one of the Company’s senior living communities located in Peoria, Illinois, which carried an outstanding mortgage balance of approximately $8.0 million and also did not offer a prepayment provision. Therefore, the Company determined it would defease the Winston-Salem and Peoria mortgage loans by acquiring certain treasury securities to serve as collateral for the outstanding principal balance as of the date of the sale until the note matured on September 1, 2015. The Company contracted with a third party trust to assume the mortgage debt and assigned all of its rights to the treasury securities to serve as collateral until the balance remaining came due. Based on this structure, the Company concluded it met the requirements to report the debt transaction as a legal defeasance which resulted in the Company removing the respective assets and liabilities from its Consolidated Balance Sheet during the first quarter of fiscal 2015 when the transaction closed. Due to the defeasance, the Company accelerated the amortization of approximately $18,000 in unamortized deferred financing costs. For additional information refer to Note 5, “Dispositions”, within the notes to consolidated financial statements.

On January 13, 2015, in conjunction with the Green Bay Transaction, the Company obtained approximately $14.1 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.35% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over 10 years.

Recent Events

Effective February 16, 2016, the Company closed the acquisition of two senior living communities located in Pensacola, Florida, for approximately $48.0 million. The communities consist of 179 assisted living units. The Company obtained financing from Protective Life for $35.0 million of the acquisition price at a fixed rate of

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4.38% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective January 26, 2016, the Company closed the acquisition of three senior living communities located in Colby, Park Falls, and Wisconsin Rapids, Wisconsin, for approximately $16.8 million. The communities consist of 138 assisted living units. The Company obtained financing from Protective Life for $11.3 million of the acquisition price at a fixed rate of 4.50% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements and related notes. Management bases its estimates and assumptions on historical experience, observance of industry trends and various other sources of information and factors, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially could result in materially different results under different assumptions and conditions. The Company believes the following critical accounting policies require management’s most difficult, subjective and complex judgments.

Revenue Recognition

Resident and health care revenue is recognized at estimated net realizable amounts, based on historical experiences, due from residents in the period to which the rental and other services are provided. Additionally, substantially all community fees received from residents are non-refundable and are recorded initially by the Company as deferred revenue. The deferred amounts are amortized over the respective residents’ initial lease term which is consistent with the contractual obligation associated with the estimated stay of the resident.

Revenues from the Medicaid program accounted for approximately 5% of the Company’s revenue fiscal 2015 and 4% of the Company’s revenue in each of fiscal 2014 and 2013. During fiscal 2015, 2014, and 2013, 34, 30, and 29, respectively, of the Company’s communities were providers of services under Medicaid programs. Accordingly, these communities were entitled to reimbursement under the foregoing program at established rates that were lower than private pay rates. Patient service revenue for Medicaid patients was recorded at the reimbursement rates as the rates were set prospectively by the applicable state upon the filing of an annual cost report. None of the Company’s communities were providers of services under the Medicare program during fiscal 2015 or 2014.

Laws and regulations governing the Medicaid program are complex and subject to interpretation. The Company believes that it is in compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of potential wrongdoing. While no such regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation as well as significant regulatory action including fines, penalties, and exclusion from the Medicaid program.

Management services revenue was recognized when earned and related to the Company providing certain management and administrative support services under management contracts, which were terminated when the Company acquired 100% of the member interests in its unconsolidated joint ventures on June 30, 2014.

Community reimbursement revenue is comprised of reimbursable expenses from the non-consolidated communities that the Company operated under long-term management agreements, which were terminated when the Company acquired 100% of the member interests in its unconsolidated joint ventures on June 30, 2014.

Credit Risk and Allowance for Doubtful Accounts

The Company’s resident receivables are generally due within 30 days from the date billed. Accounts receivable are reported net of an allowance for doubtful accounts, and represent the Company’s estimate of the amount that ultimately will be collected. The adequacy of the Company’s allowance for doubtful accounts is reviewed on

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an ongoing basis, using historical payment trends, write-off experience, analyses of receivable portfolios by payor source and aging of receivables, as well as a review of specific accounts, and adjustments are made to the allowance as necessary. Credit losses on resident receivables have historically been within management’s estimates, and management believes that the allowance for doubtful accounts adequately provides for expected losses.

Investments in Unconsolidated Joint Ventures

The Company accounted for its investments in unconsolidated joint ventures under the equity method of accounting. The Company had not consolidated these joint venture interests because the Company had concluded that the other member of each joint venture had substantive kick-out rights or substantive participating rights. Under the equity method of accounting, the Company recorded its investments in the unconsolidated joint ventures at cost and adjusted such investments for its share of the earnings and losses of the joint ventures. On June 30, 2014, the Company acquired 100% of the member interests in these joint ventures. For additional information refer to Note 4, “Acquisitions” within the notes to consolidated financial statements.

Off-Balance Sheet Arrangements

The Company had no material off-balance sheet arrangements at December 31, 2015.

Lease Accounting

The Company determines whether to account for its leases as operating, capital or financing leases depending on the underlying terms of each lease agreement. This determination of classification requires significant judgment relating to certain information, including the estimated fair value and remaining economic life of the community, the Company’s cost of funds, minimum lease payments and other lease terms. The lease rates under the Company’s lease agreements are subject to certain conditional escalation clauses which are recognized when probable or incurred and are based on changes in the consumer price index or certain operational performance measures. As of December 31, 2015 and 2014, the Company leased 50 communities, 48 of which the Company classified as operating leases and two of which the Company classified as capital lease and financing obligations. The Company incurs lease acquisition costs and amortizes these costs over the term of the respective lease agreement. Certain leases entered into by the Company qualified as sale/leaseback transactions, and as such, any related gains have been deferred and are being amortized over the respective lease term. No new communities were leased by the Company during fiscal 2015 or 2014.

Facility lease expense in the Company’s Consolidated Statements of Operations and Comprehensive loss includes rent expense plus amortization expense relating to leasehold acquisition costs offset by the amortization of deferred gains and lease incentives.

Employee Health and Dental Benefits, Workers’ Compensation, and Insurance Reserves

The Company offers certain full-time employees an option to participate in its health and dental plans. The Company is self-insured up to certain limits and is insured if claims in excess of these limits are incurred. The cost of employee health and dental benefits, net of employee contributions, is shared between the corporate office and the senior living communities based on the respective number of plan participants. Funds collected are used to pay the actual program costs including estimated annual claims, third-party administrative fees, network provider fees, communication costs, and other related administrative costs incurred by the plans. Claims are paid as they are submitted to the Company’s third-party administrator. The Company records a liability for outstanding claims and claims that have been incurred but not yet reported. This liability is based on the historical claim reporting lag and payment trends of health insurance claims. Management believes that the liability for outstanding losses and expenses is adequate to cover the ultimate cost of losses and expenses incurred at December 31, 2015; however, actual claims and expenses may differ. Any subsequent changes in estimates are recorded in the period in which they are determined.

The Company uses a combination of insurance and self-insurance for workers’ compensation. Determining the reserve for workers’ compensation losses and costs that the Company has incurred as of the end of a reporting period involves significant judgments based on projected future events, including potential settlements for pend-

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ing claims, known incidents which may result in claims, estimates of incurred but not yet reported claims, changes in insurance premiums, estimated litigation costs and other factors. The Company regularly adjusts these estimates to reflect changes in the foregoing factors. However, since this reserve is based on estimates, the actual expenses incurred may differ from the amounts reserved. Any subsequent changes in estimates are recorded in the period in which they are determined.

Long-Lived Assets

Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets. At each balance sheet date, the Company reviews the carrying value of its property and equipment to determine if facts and circumstances suggest that they may be impaired or that the depreciation period may need to be changed. The Company considers internal factors such as net operating losses along with external factors relating to each asset, including contract changes, local market developments, and other publicly available information. If an indicator of impairment is identified, the carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flows from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount the carrying value exceeds the fair market value, generally based on discounted cash flows, of the long-lived asset. The Company does not believe there are any indicators of impairment that would require an adjustment to the carrying value of the property and equipment or their remaining useful lives as of December 31, 2015 and 2014.

Assets Held for Sale

Assets are classified as held for sale when the Company has determined all of the held-for-sale criteria have been met. The Company determines the fair value, net of costs of disposal, of an asset on the date the asset is categorized as held for sale, and the asset is recorded at the lower of its fair value, net of cost of disposal, or carrying value on that date. The Company periodically re-evaluates assets held for sale to determine if the assets are still recorded at the lower of fair value, net of cost of disposal, or carrying value. The fair values are generally determined based on market rates, industry trends and recent comparable sales transactions. The actual sales price of these assets could differ significantly from the Company’s estimates.

During the fourth quarter of fiscal 2014, the Company classified four senior living communities as held for sale and determined the assets had an aggregate fair value, net of cost of disposal, that exceeded the carrying values and a remeasurement write-down of approximately $0.6 million was recorded. The four senior living communities were sold during the first quarter of fiscal 2015 in a single transaction for its carrying value. There were no senior living communities classified as held for sale by the Company at December 31, 2015.

Income Taxes

Income taxes are computed using the asset and liability method and current income taxes are recorded based on amounts refundable or payable in the current year. Deferred income taxes are recorded based on the estimated future tax effects of loss carryforwards and temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which we expect those carryforwards and temporary differences to be recovered or settled. Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income. Based upon this evaluation, a valuation allowance has been recorded to reduce the Company’s net deferred tax assets to the amount that is more likely than not to be realized. However, in the event that we were to determine that it would be more likely than not that the Company would realize the benefit of deferred tax assets in the future in excess of their net recorded amounts, adjustments to deferred tax assets would increase net income in the period we made such a determination. The benefits of the net deferred tax assets might not be realized if actual results differ from expectations. The effective tax rates for fiscal 2015 and 2014 differ from the statutory tax rates due to state income taxes, permanent tax differences, and changes in the deferred tax asset valuation allowance. The Company is impacted by the Texas Margin Tax (“TMT”), which effectively imposes tax on modified gross revenues for communities within the State of Texas. During fiscal 2015, the Company con-

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solidated 37 Texas communities and during 2014, the Company consolidated 36 Texas communities and the TMT increased the overall provision for income taxes.

The Company evaluates uncertain tax positions through consideration of accounting and reporting guidance on criteria, measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better financial-statement comparability among different companies. The Company is required to recognize a tax benefit in its financial statements for an uncertain tax position only if management’s assessment is that its position is “more likely than not” (i.e., a greater than 50 percent likelihood) to be upheld on audit based only on the technical merits of the tax position. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as income tax expense. The Company is generally no longer subject to federal and state income tax audits for years prior to 2012.

Recently Issued Accounting Guidance

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases. ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective beginning in 2019. Early adoption of ASU 2016-02 as of its issuance is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. We are currently evaluating the impact of adopting the new leases standard on our consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes – Balance Sheet Reclassification of Deferred Taxes (Topic 740). ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted and the amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company early adopted ASU 2015-17 in the fourth quarter of 2015 on a prospective basis and included the current portion of deferred tax assets within the non-current portion of deferred tax liabilities within the Company’s consolidated balance sheet. The Company did not adjust its prior period consolidated financial statements as a result of the adoption of ASU 2015-17.

In September 2015, the FASB issued ASU 2015-16, Business Combinations — Simplifying the Accounting for Measurement-Period Adjustments. ASU 2015-16 eliminates the requirement for an acquirer in a business combination to account for the measurement-period adjustment retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. ASU 2015-16 is applied prospectively and is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the impact the adoption of ASU 2015-16 will have on the Company’s consolidated financial statements and disclosures.

In April 2015, the FASB issued ASU 2015-03, Interest — Imputation of Interest- Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30). The amendments in ASU No. 2015-03 requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. ASU 2015-03 requires retrospective application and will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. The Company early adopted the provisions of ASU 2015-03 as of October 1, 2015, and incorporated the provisions of this update to its consolidated financial statements upon adoption. As a result of adoption of ASU 2015-03, at December 31, 2015, and 2014, approximately $8.5 million and $6.3 million, respectively, of debt issuance costs, net of accumulated amortization, were reclassified within the Company’s Consolidated Balance Sheets from

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other assets to notes payable. The adoption of ASU 2015-03 did not have an impact on the Company’s financial condition or results of operations.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. ASU 2014-09 is effective for annual periods beginning after December 15, 2017. The Company is currently evaluating the impact the adoption of ASU 2014-09 will have on the Company’s consolidated financial statements and disclosures.

Results of Operations

The following tables set forth, for the periods indicated, selected historical Consolidated Statements of Operations and Comprehensive loss data in thousands of dollars and expressed as a percentage of total revenues.

	Year Ended December 31,
	2015						2014						2013
	$			%			$			%			$			%
Revenues:
Resident and healthcare revenue	$	412,177			100.0	%	$	380,400			99.1	%	$	343,478			98.1	%
Affiliated management services revenue		—			—			415			0.1			797			0.2
Community reimbursement income		—			—			3,110			0.8			6,087			1.7
Total revenues		412,177			100.0			383,925			100.0			350,362			100.0
Expenses:
Operating expenses (exclusive of facility lease expense and depreciation and amortization shown below)		248,736			60.3			230,495			60.0			207,744			59.3
General and administrative expenses		20,351			4.9			19,622			5.1			20,238			5.8
Facility lease expense		61,213			14.9			59,332			15.5			56,986			16.3
Provision for bad debts		1,192			0.3			717			0.2			497			0.2
Stock-based compensation		8,833			2.1			7,262			1.9			4,322			1.2
Depreciation and amortization		53,017			12.9			49,487			12.9			43,238			12.3
Community reimbursement expense		—			—			3,110			0.8			6,087			1.7
Total expenses		393,342			95.4			370,025			96.4			339,112			96.8
Income from operations		18,835			4.6			13,900			3.6			11,250			3.2
Other income (expense):
Interest income		53			0.0			52			0.0			151			0.2
Interest expense		(35,732	)		(8.7	)		(31,261	)		(8.2	)		(23,767	)		(6.8	)
Write-off of deferred loan costs and prepayment premium		(2,766	)		(0.7	)		(7,968	)		(2.1	)		—			—
Joint venture equity investment valuation gain		—			—			1,519			0.4			—			—
Gain on disposition of assets, net		6,225			1.5			784			0.2			1,454			0.4
Equity in earnings of unconsolidated joint ventures, net		—			—			105			0.0			133			0.1
Write-down of assets held for sale		—			—			(561	)		(0.2	)		—			—
Other income		1			0.0			23			0.0			34			0.0
Loss before provision for income taxes		(13,384	)		(3.3	)		(23,407	)		(6.1	)		(10,745	)		(3.1	)
Provision for income taxes		(900	)		(0.2	)		(719	)		(0.2	)		(5,759	)		(1.6	)
Net loss and comprehensive loss	$	(14,284	)		(3.5	)%	$	(24,126	)		(6.3	)%	$	(16,504	)		(4.7	)%

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Year Ended December 31, 2015 Compared to the Year Ended December 31, 2014

Revenues

Total revenues were $412.2 million for the fiscal year ended December 31, 2015 compared to $383.9 million for the fiscal year ended December 31, 2014, representing an increase of approximately $28.3 million, or 7.4%. This increase in revenue is primarily the result of a $31.8 million increase in resident and healthcare revenue, slightly offset by a decrease in community reimbursement revenue of $3.1 million and a decrease in affiliated management services revenue of $0.4 million.

• The increase in resident and healthcare revenue primarily results from an increase of $36.7 million from the senior living communities acquired by the Company during fiscal 2015 and a full year of operating results from the senior living communities acquired by the Company during fiscal 2014 and an increase of $5.8 million from an increase in average monthly rental rates of 1.5% at the Company’s other consolidated same-store communities, slightly offset by a decrease of $10.7 million due to the Sedgwick Sale Transaction which closed on August 6, 2015 and Four Property Sale Transaction which closed on January 22, 2015.

• Affiliated management service revenue is comprised of management fees earned from unconsolidated joint ventures that the Company operated under management agreements. On June 30, 2014, the Company acquired 100% of the member interests in these joint ventures.

• Community reimbursement income is comprised of reimbursable expenses from unconsolidated joint ventures that the Company operated under management agreements. On June 30, 2014, the Company acquired 100% of the member interests in these joint ventures.

Expenses

Total expenses were $393.3 million during fiscal 2015 compared to $370.0 million during fiscal 2014, representing an increase of $23.3 million, or 6.3%. This increase in expenses is primarily the result of a $18.2 million increase in operating expenses, a $3.5 million increase in depreciation and amortization expense, a $1.9 million increase in facility lease expense, a $1.6 million increase in stock-based compensation expense, a $0.7 million increase in general and administrative expenses, and a $0.5 million increase in provision for bad debts, slightly offset by a decrease in community reimbursement expense of $3.1 million.

• The increase in operating expenses primarily results from an increase of $22.8 million from the senior living communities acquired by the Company during fiscal 2015 and a full year of operating results from the senior living communities acquired by the Company during fiscal 2014 and a $2.6 million increase in general overall operating costs at the Company’s other consolidated same-store communities, partially offset by a decrease of $7.2 million due to the Sedgwick Sale Transaction which closed on August 6, 2015 and Four Property Sale Transaction which closed on January 22, 2015.

• The increase in depreciation and amortization expense primarily results from an increase of $13.6 million for senior living communities acquired by the Company during fiscal 2015 and a full year of operating results from the senior living communities acquired by the Company during fiscal 2014 and an increase of $2.0 million due to an increase in depreciable assets at the Company’s other consolidated same-store communities, partially offset by a decrease in in-place lease amortization of $10.3 million from the senior living communities acquired by the Company during fiscal 2014 and 2013 which were fully amortized prior to fiscal 2015 and a decrease of $1.8 million due to the Sedgwick Sale Transaction which closed on August 6, 2015 and Four Property Sale Transaction which closed on January 22, 2015.

• The increase in facility lease expense primarily results from contingent annual rental rate escalations for certain existing leases.

• The increase in stock-based compensation expense results from the Company granting restricted stock awards and units to certain employees and directors during fiscal 2015, some of which required accelerated expense recognition, and a full year of amortization for awards and units granted during fiscal 2014.

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• The increase in general and administrative expenses primarily results from an increase of $1.6 million in wages and benefits for existing employees, primarily attributable to annual merit increases, and additional employees added throughout fiscal 2015 and 2014, partially offset by a decrease of $0.9 million in employee insurance benefits and claims paid, which resulted in lower health insurance costs to the Company.

• Community reimbursement expense represents payroll and administrative costs paid by the Company for the benefit of unconsolidated joint ventures that the Company operated under management agreements. On June 30, 2014, the Company acquired 100% of the member interests in these joint ventures.

Other income and expense

• Interest income generally reflects interest earned on the investment of cash balances and escrowed funds or interest associated with certain income tax refunds or property tax settlements.

• Interest expense increased $4.5 million in fiscal 2015 when compared to fiscal 2014 primarily due to an increase of $5.6 million from the additional mortgage debt associated with the senior living communities acquired by the Company during fiscal 2015 and a full year of interest expense for the senior living communities acquired by the Company during fiscal 2014 and an increase of $0.1 million at the Company’s other consolidated same-store communities due to additional mortgage debt added by the Company associated with certain refinancings and supplemental loans that occurred during fiscal 2015, slightly offset by a $1.2 million decrease due to the Sedgwick Sale Transaction which closed on August 6, 2015 and Four Property Sale Transaction which closed on January 22, 2015.

• Write-off of deferred loan costs and prepayment premiums is attributable to the early repayment of certain mortgage debt on the Company’s owned properties due to scheduled maturities and the opportunity to replace interim variable interest rate debt with long-term fixed interest rate financing.

• Joint venture equity investment valuation gain is attributable to the Company closing the SHPIII/CSL Transaction during the second quarter of fiscal 2014. The Company acquired 100% of the members’ equity interests in SHPIII/CSL Miami, SHPIII/CSL Richmond Heights, and SHPIII/CSL Levis Commons and received cash proceeds, including incentive distributions, of approximately $2.5 million which resulted in the Company recording a gain of approximately $1.5 million to reflect the fair value of the equity interests on the acquisition date.

• The increase in gain on disposition of assets is primarily attributable to the Sedgwick Sale Transaction which closed on August 6, 2015.

• Equity in earnings of unconsolidated joint ventures, net, represents the Company’s share of the net earnings on its investments in SHPIII/CSL Miami, SHPIII/CSL Richmond Heights, and SHPIII/CSL Levis Commons. On June 30, 2014, the Company acquired 100% of the member interests in these joint ventures.

• Write-down of assets held for sale is attributable to a fair value remeasurement adjustment recorded by the Company upon classifying four senior living communities as held for sale during the fourth quarter of fiscal 2014. This reclassification resulted in the Company determining the assets had an aggregate fair value, net of costs of disposal, which exceeded the carrying values by approximately $0.6 million, that was primarily attributable to costs of disposal. The four senior living communities were sold during the first quarter of fiscal 2015 in a single transaction for its carrying value.

Provision for income taxes

Provision for income taxes for fiscal 2015 was $0.9 million, or 6.7% of loss before income taxes, compared to provision for income taxes of $0.7 million, or 3.1% of loss before income taxes, for fiscal 2014. The effective tax rates for fiscal 2015 and 2014 differ from the statutory tax rates due to state income taxes, permanent tax differences, and changes in the deferred tax asset valuation allowance. The Company is impacted by the TMT which effectively imposes tax on modified gross revenues for communities within the State of Texas. During fiscal 2015 the Company operated 37 Texas communities and during fiscal 2014 the Company operated 36 Texas

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communities and the TMT increased the overall provision for income taxes. For income tax purposes, in conjunction with the Sedgwick Sale Transaction the Company executed a like-kind exchange and acquired a replacement property shortly after the sale which resulted in deferral of the gain without the Company incurring any current federal or state income tax liabilities.

Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income. Based upon this evaluation, an adjustment to the deferred tax asset valuation allowance of $5.0 million and $8.5 million was recorded during fiscal 2015 and 2014, respectively, to reduce the Company’s net deferred tax assets to the amount that is more likely than not to be realized.

Net loss and comprehensive loss

As a result of the foregoing factors, the Company reported net loss and comprehensive loss of $(14.3 million) for the fiscal year ended December 31, 2015, compared to net loss and comprehensive loss of $(24.1 million) for the fiscal year ended December 31, 2014. The retained deficit currently reported within the Company’s Consolidated Balance Sheets is primarily the accumulated result of the Company recognizing accelerated amortization expense of $67.2 million through December 31, 2015, associated with in-place leases from the Company’s acquisition program which began during fiscal 2010.

Year Ended December 31, 2014 Compared to the Year Ended December 31, 2013

Revenues

Total revenues were $383.9 million for the year ended December 31, 2014 compared to $350.4 million for the year ended December 31, 2013, representing an increase of approximately $33.6 million, or 9.6%. This increase in revenue is the result of a $36.9 million increase in resident and healthcare revenue, slightly offset by a decrease in affiliated management services revenue of $0.4 million, and a decrease in community reimbursement revenue of $3.0 million.

• The increase in resident and healthcare revenue primarily results from an increase of $41.4 million from the senior living communities acquired by the Company during fiscal 2014 and a full year of operating results from the senior living communities acquired by the Company during fiscal 2013, partially offset by a decrease of $7.8 million due to the Company no longer providing skilled nursing services at two of its senior living communities which are in the process of being repositioned with the facilities being converted to offer assisted living care and services.

• Affiliated management service revenue is comprised of management fees earned from unconsolidated joint ventures that the Company operated under management agreements. On June 30, 2014, the Company closed the SHPIII/CSL Transaction and acquired 100% of the member interests in these joint ventures. For additional information refer to Note 4, “Acquisitions”, within the notes to consolidated financial statements.

• Community reimbursement income is comprised of reimbursable expenses from unconsolidated joint ventures that the Company operated under management agreements. On June 30, 2014, the Company closed the SHPIII/CSL Transaction and acquired 100% of the member interests in these joint ventures.

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Expenses

Total expenses were $370.0 million during fiscal 2014 compared to $339.1 million during fiscal 2013, representing an increase of $30.9 million, or 9.1%. This increase is the result of a $22.8 million increase in operating expenses, a $6.2 million increase in depreciation and amortization expense, a $2.9 million increase in stock-based compensation expense, a $2.3 million increase in facility lease expense, and a $0.2 million increase in provision for bad debts, slightly offset by a decrease in community reimbursement expense of $3.0 million and a decrease in general and administrative expenses of $0.6 million.

• The increase in operating expenses primarily results from an increase of $27.1 million from the senior living communities acquired by the Company during fiscal 2014 and a full year of operating results from the senior living communities acquired by the Company during fiscal 2013, and an increase in overall operating costs at the Company’s other consolidated same-store communities of $4.2 million. These increases were partially offset by a decrease of $8.5 million due to the Company no longer providing skilled nursing services at two of its senior living communities which are in the process of being repositioned with the facilities being converted to offer assisted living care and services. The increase in overall operating costs of $4.2 million at the Company’s other consolidated same-store communities primarily results from an increase in employee wages and benefits of $2.3 million, an increase in utilities of $0.5 million, an increase in promotional and advertising costs of $0.5 million, an increase in food costs of $0.2 million, an increase in property taxes of $0.2 million, and an increase in general operating expenses of $0.5 million.

• The increase in facility lease expense primarily results from contingent annual rental rate escalations for certain existing leases.

• The increase in stock-based compensation expense results from the accelerated vesting of certain restricted stock awards associated with the retirement of the Company’s former Chief Financial Officer during the second quarter of fiscal 2014 and the Company granting additional shares of restricted stock to certain employees and directors throughout fiscal 2014 and 2013.

• The increase in depreciation and amortization expense primarily results from an increase of $19.8 million for senior living communities acquired by the Company during fiscal 2014 and a full year of depreciation and amortization from the senior living communities acquired by the Company during fiscal 2013, and an increase of $0.6 million as a result of an increase in depreciable assets at the Company’s other consolidated same-store communities. These increases were partially offset by a decrease in in-place lease amortization of $14.2 million from the senior living communities acquired by the Company prior to fiscal 2014.

• Community reimbursement expense represents payroll and administrative costs paid by the Company for the benefit of unconsolidated joint ventures that the Company operated under management agreements. On June 30, 2014, the Company acquired 100% of the member interests in these joint ventures. For additional information refer to Note 4, “Acquisitions”, within the notes to unaudited consolidated financial statements.

• The decrease in general and administrative expenses primarily results from a decrease of $1.7 million in employee insurance benefits and claims paid, which resulted in lower health insurance costs to the Company, and a decrease of $0.2 million related to professional fees paid for a cost segregation tax study completed during the first quarter of fiscal 2013. These decreases were partially offset by an increase of $1.1 million in wages and benefits for existing and additional employees added throughout fiscal 2014 and 2013 and an increase of $0.2 million for due diligence and legal expenses incurred in connection with the Company’s acquisition program.

Other income and expense

• Interest income generally reflects interest earned on the investment of cash balances and escrowed funds or interest associated with certain income tax refunds or property tax settlements.

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• Interest expense increased $7.5 million in fiscal 2014 when compared to fiscal 2013 primarily due to the additional mortgage debt associated with the senior living communities acquired by the Company during fiscal 2014 and a full year of interest expense for the senior living communities acquired by the Company during fiscal 2013.

• Write-off of deferred loan costs and prepayment premium is attributable to the early repayment of the Company’s existing mortgage debt with Freddie Mac during fiscal 2014. The Company recorded non-cash charges of approximately $0.5 million to remove the remaining unamortized deferred financing assets related to the refinanced mortgage debt and incurred approximately $7.5 million in early repayment fees and retirement costs.

• Joint venture equity investment valuation gain is attributable to the Company closing the SHPIII/CSL Transaction on June 30, 2014, which resulted in the Company acquiring 100% of the members’ equity interests in SHPIII/CSL Miami, SHPIII/CSL Richmond Heights, and SHPIII/CSL Levis Commons. The Company received cash proceeds, including incentive distributions, of approximately $2.5 million which resulted in the Company recording a gain of approximately $1.5 million to reflect the fair value of the equity interests on the acquisition date.

• Write-down of assets held for sale is attributable to a fair value remeasurement adjustment recorded by the Company upon classifying four senior living communities as held for sale during the fourth quarter of fiscal 2014. This reclassification resulted in the Company determining the assets had an aggregate fair value, net of costs of disposal, that exceeded the carrying values by approximately $0.6 million, which was primarily attributable to costs of disposal. The four senior living communities were sold during the first quarter of fiscal 2015 in a single transaction for its carrying value.

• Equity in earnings of unconsolidated joint ventures, net, represents the Company’s share of the net earnings on its investments in SHPIII/CSL Miami, SHPIII/CSL Richmond Heights, and SHPIII/CSL Levis Commons. On June 30, 2014, the Company closed the SHPIII/CSL Transaction acquiring 100% of the member interests in these joint ventures.

Provision for income taxes

Provision for income taxes for fiscal 2014 was $0.7 million, or 3.1% of loss before income taxes, compared to provision for income taxes of $5.8 million, or 53.5% of loss before income taxes, for fiscal 2013. The effective tax rates for fiscal 2014 and 2013 differ from the statutory tax rates due to state income taxes, permanent tax differences, and changes in the deferred tax asset valuation allowance. The Company is impacted by the TMT which effectively imposes tax on modified gross revenues for communities within the State of Texas. During fiscal 2014 and 2013, the Company consolidated 36 Texas communities and the TMT increased the overall provision for income taxes.

Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income. Based upon this evaluation, adjustments to the deferred tax asset valuation allowance of $8.5 million and $8.8 million were recorded during fiscal 2014 and 2013, respectively, to reduce the Company’s net deferred tax assets to the amount that is more likely than not to be realized.

Net loss and comprehensive loss

As a result of the foregoing factors, the Company reported net loss and comprehensive loss of $(24.1 million) for the fiscal year ended December 31, 2014, compared to net loss and comprehensive loss of $(16.5 million) for the fiscal year ended December 31, 2013. The net loss and comprehensive loss of $(24.1 million) reported by the Company for fiscal 2014, resulted in the Company realizing a retained deficit of $(9.3 million) within the Company’s Consolidated Balance Sheet. The retained deficit currently reported within the Company’s Consolidated Balance Sheets is primarily the accumulated result of the Company recognizing accelerated amortization expense of $52.8 million associated with in-place leases from the Company’s acquisition program which began during fiscal 2010.

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Quarterly Results

The following table presents certain unaudited quarterly financial information for each of the four quarters ended December 31, 2015 and 2014. This information has been prepared on the same basis as the audited consolidated financial statements of the Company appearing elsewhere in this report 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 and the related notes thereto.

	2015 Calendar Quarters
	First			Second			Third		Fourth
	(In thousands, except per share amounts)
Total revenues	$	98,640		$	101,588		$	104,420	$	107,529
Income from operations		3,718			3,680			5,676		5,761
Net (loss) income and comprehensive (loss) income		(6,039	)		(5,166	)		2,871		(5,950	)
Net (loss) income per share, basic	$	(0.21	)	$	(0.18	)	$	0.10	$	(0.21	)
Net (loss) income per share, diluted	$	(0.21	)	$	(0.18	)	$	0.10	$	(0.21	)
Weighted average shares outstanding, basic		28,565			28,705			28,732		28,749
Weighted average shares outstanding, fully diluted		28,565			28,705			28,733		28,749

	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

Liquidity and Capital Resources

Changes in the current economic environment could result in decreases in the fair value of assets, slowing of transactions, and tightening liquidity and credit markets. These impacts could make securing debt for acquisitions or refinancings for the Company, its joint ventures, or buyers of the Company’s properties more difficult or on terms not acceptable to the Company. Additionally, the Company may be more susceptible to being negatively impacted by operating or performance deficits based on the exposure associated with certain lease coverage requirements.

In addition to approximately $56.1 million of unrestricted cash balances on hand as of December 31, 2015, the Company’s principal sources of liquidity are expected to be cash flows from operations, supplemental debt financings, additional proceeds from debt refinancings, equity issuances, and/or proceeds from the sale of assets. The Company expects its available cash and cash flows from operations, supplemental debt financings, additional proceeds from debt refinancings, and proceeds from the sale of assets to be sufficient to fund its short-term working capital requirements. The Company’s long-term capital requirements, primarily for acquisitions and other corporate initiatives, could be dependent on its ability to access additional funds through joint ventures and the debt and/or equity markets. The Company from time to time considers and evaluates transactions related to its portfolio including supplemental debt financings, debt refinancings, equity issuances, purchases and sales of assets, reorganizations and other transactions. There can be no assurance that the Company will continue to generate cash flows at or above current levels or that the Company will be able to obtain the capital necessary to meet the Company’s short and long-term capital requirements.

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In summary, the Company’s cash flows were as follows (in thousands):

	Year Ended December 31,
	2015			2014			2013
Net cash provided by operating activities	$	48,895		$	46,312		$	42,644
Net cash used in investing activities		(161,427	)		(175,417	)		(162,296	)
Net cash provided by financing activities		129,410			154,703			114,526
Increase (decrease) in cash and cash equivalents	$	16,878		$	25,598		$	(5,126	)

Operating Activities

The Company had net cash provided by operating activities of $48.9 million, $46.3 million, and $42.6 million in fiscal 2015, 2014, and 2013, respectively. The net cash provided by operating activities for fiscal 2015 primarily results from net non-cash charges of $63.8 million, a decrease in prepaid expenses of $2.4 million, an increase in accounts payable and accrued expenses of $3.0 million, and an increase in deferred resident rent and customer deposits of $0.5 million, partially offset by net loss of $(14.3 million), an increase in accounts receivable of $2.9 million, an increase in property tax and insurance deposits of $2.2 million, and an increase in other assets of $1.3 million. The net cash provided by operating activities for fiscal 2014 results from net non-cash charges of $65.6 million and net changes in operating assets and liabilities of $4.9 million, partially offset by net loss of $(24.1 million).

Investing Activities

The Company had net cash used in investing activities of $161.4 million, $175.4 million, and $162.3 million in fiscal 2015, 2014, and 2013, respectively. The net cash used in investing activities for fiscal 2015 primarily results from capital expenditures of $42.4 million and acquisitions of senior living communities by the Company of $162.5 million, partially offset by proceeds from the Sedgwick Sale Transaction and Four Property Sale Transaction of $43.5 million. The net cash used in investing activities for fiscal 2014 primarily results from capital expenditures of $18.7 million and acquisitions of senior living communities by the Company of $160.1 million, slightly offset by proceeds from the SHPIII/CSL Transaction of $2.5 million and proceeds from the sale of assets of $0.8 million.

Financing Activities

The Company had net cash provided by financing activities of $129.4 million, $154.7 million, and $114.5 million in fiscal 2015, 2014, and 2013, respectively. The net cash provided by financing activities for fiscal 2015 primarily results from notes payable proceeds of $250.9 million, of which approximately $118.1 million is related to new mortgage debt associated with the acquisition of senior living communities by the Company, approximately $2.2 million related to insurance premium financing, and the remaining $130.6 million resulted from supplemental financings, mortgage refinancings, or new mortgage debt obtained on existing unencumbered senior living communities, partially offset by repayments of notes payable of $115.9 million, deferred financing charges paid of $3.8 million, payments on capital lease and financing obligations of $1.0 million, and additions to restricted cash of $0.9 million. The net cash provided by financing activities for fiscal 2014 primarily results from notes payable proceeds of $300.8 million, of which $175.6 million related to the Company refinancing its mortgage loans with Freddie Mac and $125.2 million related to the acquisition of senior living communities by the Company and insurance premium financing, partially offset by repayments of notes payable of $141.0 million, deferred financing charges paid of $3.5 million, payments on capital lease and financing obligations of $1.0 million, and additions to restricted cash of $0.8 million.

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Disclosures About Contractual Obligations

The following table provides the amounts due under specified contractual obligations for the periods indicated as of December 31, 2015 (in thousands):

	Less Than One Year		One to Three Years		Three to Five Years		More Than Five Years		Total
Long-term debt, including interest expense(1)	$	50,708	$	108,689	$	96,556	$	796,342	$	1,052,295
Operating and capital leases(2)		65,135		130,090		127,590		250,477		573,292
Total contractual cash obligations	$	115,843	$	238,779	$	224,146	$	1,046,819	$	1,625,587

(1) Amounts due associated with our variable rate mortgage debt is projected by applying the variable interest rates effective at December 31, 2015.

(2) Reflects future minimum lease commitments under the Company’s various property and equipment lease agreements at current rental rates.

Long-term debt relates to the aggregate maturities of the Company’s notes payable. The Company leases its corporate headquarters in Dallas, an executive office in New York, 50 senior living communities and certain automobiles and equipment used at the Company’s communities.

Impact of Inflation

To date, inflation has not had a significant impact on the Company. However, inflation could affect the Company’s future revenues and results of operations because of, among other things, the Company’s dependence on senior residents, many of whom rely primarily on fixed incomes to pay for the Company’s services. As a result, during inflationary periods, the Company may not be able to increase resident service fees to account fully for increased operating expenses. In structuring its fees, the Company attempts to anticipate inflation levels, but there can be no assurance that the Company will be able to anticipate fully or otherwise respond to any future inflationary pressures.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.

The Company’s primary market risk is exposure to changes in interest rates on debt and lease instruments. As of December 31, 2015, the Company had $777.1 million in outstanding debt comprised of various fixed and variable rate debt instruments of $765.3 million and $11.8 million, respectively. In addition, as of December 31, 2015, the Company had $570.3 million in future facility lease obligations with contingent rent increases on certain leases based on changes in the consumer price index or certain operational performance measures.

Changes in interest rates would affect the fair market value of the Company’s fixed rate debt instruments, but would not have an impact on the Company’s earnings or cash flows. Fluctuations in interest rates on the Company’s variable rate debt instruments, which are tied to LIBOR, would affect the Company’s earnings and cash flows but would not affect the fair market values of the variable rate debt. Each percentage point increase in interest rates would impact the Company’s annual interest expense by approximately $0.1 million based on the Company’s outstanding variable rate debt as of December 31, 2015. Increases in the consumer price index could have an effect on future facility lease expense if the leased community exceeds the contingent rent escalation thresholds set forth in each of the Company’s lease agreements.

The following table summarizes information on the Company’s debt instruments outstanding as of December 31, 2015. The table presents the principal due and weighted average interest rates by expected maturity date for the Company’s debt instruments by fiscal year.

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Principal Amount, which excludes deferred loan costs, and Average Interest Rate by Expected Maturity Date at December 31, 2015 ($ in thousands):

	2016			2017			2018			2019			2020			Thereafter			Total		Fair Value
Long-term debt:
Fixed rate debt	$	14,698		$	13,518		$	14,158		$	14,829		$	15,443		$	692,670		$	765,316	$	712,969
Average interest rate		4.6	%		4.6	%		4.6	%		4.6	%		4.6	%		4.6	%
Variable rate debt					11,800															11,800		11,800
Average interest rate					4.8	%
Total debt																			$	777,116	$	724,769

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The consolidated financial statements of the Company are included under Item 15 of this Annual Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

The Company had no disagreements on accounting or financial disclosure matters with its independent accountants to report under this Item 9.

ITEM 9A. CONTROLS AND PROCEDURES.

Effectiveness of Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Based upon the controls evaluation, the Company’s CEO and CFO have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective.

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company’s fiscal quarter ended December 31, 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Internal Controls Over Financial Reporting

Management’s Report On Internal Control Over Financial Reporting

Management of the Company, including the Chief Executive Officer and the Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) under the Exchange Act. The Company’s internal controls were designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

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Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2015. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (2013 framework). Based on our assessment, we believe that, as of December 31, 2015, the Company’s internal control over financial reporting is effective based on those criteria.

The effectiveness of our internal control over financial reporting as of December 31, 2015, has been audited by Ernst & Young LLP, the independent registered public accounting firm that audited our consolidated financial statements included in this Annual Report on Form 10-K, as stated in their report which is included as part of this Annual Report on Form 10-K. The Ernst & Young LLP report is on page F-36 of this report.

ITEM 9B. OTHER INFORMATION.

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERANCE.*

ITEM 11. EXECUTIVE COMPENSATION.*

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.*

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.*

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.*

*Information required by Items 10, 11, 12, 13 and 14 is or will be set forth in the definitive proxy statement relating to the 2016 Annual Meeting of Stockholders of Capital Senior Living Corporation, which is to be filed with SEC pursuant to Regulation 14A under the Exchange Act. This definitive proxy statement relates to a meeting of stockholders involving the election of directors and the portions therefrom required to be set forth in this Form 10-K by Items 10, 11, 12, 13 and 14 are incorporated herein by reference pursuant to General Instruction G(3) to Form 10-K.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

The following documents are filed as part of this Report:

(1) Financial Statements:

The response to this portion of Item 15 is submitted as a separate section of this Report. See “Index to Financial Statements” at page F-1.

(2) Financial Statement Schedules:

All schedules have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.

(3) Exhibits:

The exhibits listed on the accompanying “Index To Exhibits” at page E-1 are filed as part of this Report.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CAPITAL SENIOR LIVING CORPORATION
By:	/S/    LAWRENCE A. COHEN
	Lawrence A. Cohen
	Vice Chairman of the Board and Chief Executive Officer

Date: February 26, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Each person whose signature to this report appears below hereby appoints Lawrence A. Cohen and Keith N. Johannessen and each of them, any one of whom may act without the joinder of the other, as his or her attorney-in-fact to sign on his behalf, individually and in each capacity stated below, and to file all amendments to this report, which amendment or amendments may make such changes in and additions to the report as any such attorney-in-fact may deem necessary or appropriate.

Signature	Title	Date
/s/    LAWRENCE A. COHEN Lawrence A. Cohen	Chief Executive Officer and Vice Chairman of the Board (Principal Executive Officer)	February 26, 2016
/s/    KEITH N. JOHANNESSEN Keith N. Johannessen	President and Chief Operating Officer and Director	February 26, 2016
/s/    CAREY P. HENDRICKSON Carey P. Hendrickson	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	February 26, 2016
/s/    JAMES A. MOORE James A. Moore	Chairman of the Board	February 26, 2016
/s/    PHILIP A. BROOKS Philip A. Brooks	Director	February 26, 2016
/s/    KIMBERLY S. LODY Kimberly S. Lody	Director	February 26, 2016
/s/    E. RODNEY HORNBAKE E. Rodney Hornbake	Director	February 26, 2016
/s/    JILL M. KRUEGER Jill M. Krueger	Director	February 26, 2016
/s/    RONALD A. MALONE Ronald A. Malone	Director	February 26, 2016
/s/    MICHAEL W. REID Michael W. Reid	Director	February 26, 2016

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INDEX TO FINANCIAL STATEMENTS

	Page
Consolidated Financial Statements of Capital Senior Living Corporation
Report of Independent Registered Public Accounting Firm, Ernst & Young LLP		F-2
Consolidated Balance Sheets — December 31, 2015 and 2014		F-3
Consolidated Statements of Operations and Comprehensive Loss — For the years ended December  31, 2015, 2014 and 2013		F-4
Consolidated Statements of Shareholders’ Equity — For the years ended December  31, 2015, 2014 and 2013		F-5
Consolidated Statements of Cash Flows — For the years ended December 31, 2015, 2014 and 2013		F-6
Notes to Consolidated Financial Statements		F-7
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting, Ernst & Young LLP		F-36

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Capital Senior Living Corporation

We have audited the accompanying consolidated balance sheets of Capital Senior Living Corporation as of December 31, 2015 and 2014, and the related consolidated statements of operations and comprehensive loss, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Capital Senior Living Corporation at December 31, 2015 and 2014, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Capital Senior Living Corporation’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 26, 2016, expressed an unqualified opinion thereon.

/s/    Ernst & Young LLP

Dallas, Texas

February 26, 2016

F-2

CAPITAL SENIOR LIVING CORPORATION

CONSOLIDATED BALANCE SHEETS

	December 31,
	2015			2014
	(In thousands, except per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	56,087		$	39,209
Restricted cash		13,159			12,241
Accounts receivable, net		9,252			5,903
Accounts receivable from affiliates		2			5
Deferred taxes		—			460
Assets held for sale		—			35,761
Property tax and insurance deposits		14,398			12,198
Prepaid expenses and other		4,370			6,797
Total current assets		97,268			112,574
Property and equipment, net		890,572			747,613
Other assets, net		31,193			31,183
Total assets	$	1,019,033		$	891,370
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,362		$	2,540
Accounts payable to affiliates		—			7
Accrued expenses		34,300			32,154
Notes payable of assets held for sale		—			14,847
Current portion of notes payable, net of deferred loan costs		13,634			32,538
Current portion of deferred income		16,059			14,603
Current portion of capital lease and financing obligations		1,257			1,054
Federal and state income taxes payable		111			219
Customer deposits		1,819			1,499
Total current liabilities		70,542			99,461
Deferred income		13,992			15,949
Capital lease and financing obligations, net of current portion		38,835			40,016
Deferred taxes		—			460
Other long-term liabilities		4,969			1,426
Notes payable, net of deferred loan costs and current portion		754,949			592,884
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $.01 par value:
Authorized shares — 15,000; no shares issued or outstanding		—			—
Common stock, $.01 par value:
Authorized shares — 65,000; issued and outstanding shares 29,539 and 29,097 in 2015 and 2014, respectively		299			294
Additional paid-in capital		159,920			151,069
Retained deficit		(23,539	)		(9,255	)
Treasury stock, at cost — 350 shares in 2015 and 2014		(934	)		(934	)
Total shareholders’ equity		135,746			141,174
Total liabilities and shareholders’ equity	$	1,019,033		$	891,370

See accompanying notes to consolidated financial statements.

F-3

CAPITAL SENIOR LIVING CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	Year Ended December 31,
	2015			2014			2013
	(In thousands, except per share data)
Revenues:
Resident and health care revenue	$	412,177		$	380,400		$	343,478
Affiliated management services revenue		—			415			797
Community reimbursement revenue		—			3,110			6,087
Total revenues		412,177			383,925			350,362
Expenses:
Operating expenses (exclusive of facility lease expense and depreciation and amortization expense shown below)		248,736			230,495			207,744
General and administrative expenses		20,351			19,622			20,238
Facility lease expense		61,213			59,332			56,986
Provision for bad debts		1,192			717			497
Stock-based compensation expense		8,833			7,262			4,322
Depreciation and amortization		53,017			49,487			43,238
Community reimbursement expense		—			3,110			6,087
Total expenses		393,342			370,025			339,112
Income from operations		18,835			13,900			11,250
Other income (expense):
Interest income		53			52			151
Interest expense		(35,732	)		(31,261	)		(23,767	)
Write-off of deferred loan costs and prepayment premiums		(2,766	)		(7,968	)		—
Joint venture equity investment valuation gain		—			1,519			—
Gain on disposition of assets, net		6,225			784			1,454
Equity in earnings of unconsolidated joint ventures, net		—			105			133
Write-down of assets held for sale		—			(561	)		—
Other income		1			23			34
Loss before provision for income taxes		(13,384	)		(23,407	)		(10,745	)
Provision for income taxes		(900	)		(719	)		(5,759	)
Net loss	$	(14,284	)	$	(24,126	)	$	(16,504	)
Per share data:
Basic net loss per share	$	(0.50	)	$	(0.83	)	$	(0.58	)
Diluted net loss per share	$	(0.50	)	$	(0.83	)	$	(0.58	)
Weighted average shares outstanding — basic		28,688			28,301			27,815
Weighted average shares outstanding — diluted		28,688			28,301			27,815
Comprehensive loss	$	(14,284	)	$	(24,126	)	$	(16,504	)

See accompanying notes to consolidated financial statements.

F-4

CAPITAL SENIOR LIVING CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

	Common Stock				Additional Paid-In Capital			Retained Earnings			Treasury Stock			Total
	Shares		Amount
	(In thousands)
Balance at January 1, 2013		28,218	$	286	$	137,867		$	31,375		$	(934	)	$	168,594
Exercise of stock options		247		2		3,157			—			—			3,159
Restricted stock awards		380		4		—			—			—			4
Stock-based compensation		—		—		4,322			—			—			4,322
Excess tax benefits on stock options exercised		—		—		(1,625	)		—			—			(1,625	)
Net loss		—		—		—			(16,504	)		—			(16,504	)
Balance at December 31, 2013		28,845		292		143,721			14,871			(934	)		157,950
Exercise of stock options		13		—		168			—			—			168
Restricted stock awards		239		2		—			—			—			2
Stock-based compensation		—		—		7,262			—			—			7,262
Excess tax benefits on stock options exercised		—		—		(82	)		—			—			(82	)
Net loss		—		—		—			(24,126	)		—			(24,126	)
Balance at December 31, 2014		29,097		294		151,069			(9,255	)		(934	)		141,174
Exercise of stock options		3		1		37			—			—			38
Restricted stock awards		439		4		—			—			—			4
Stock-based compensation		—		—		8,833			—			—			8,833
Excess tax benefits on stock options exercised		—		—		(19	)		—			—			(19	)
Net loss		—		—		—			(14,284	)		—			(14,284	)
Balance at December 31, 2015		29,539	$	299	$	159,920		$	(23,539	)	$	(934	)	$	135,746

See accompanying notes to consolidated financial statements.

F-5

CAPITAL SENIOR LIVING CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2015			2014			2013
	(in thousands)
Operating Activities
Net loss	$	(14,284	)	$	(24,126	)	$	(16,504	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		53,017			49,487			43,238
Amortization of deferred financing charges		1,029			1,361			1,100
Amortization of deferred lease costs and lease intangibles		1,421			1,230			1,164
Deferred income		(677	)		(616	)		(1,666	)
Deferred income taxes		—			—			10,793
Lease incentives		2,464			—			—
Write-off of deferred loan costs and prepayment premiums		2,766			7,968			—
Joint venture equity investment valuation gain		—			(1,519	)		—
Gain on disposition of assets, net		(6,225	)		(784	)		(1,454	)
Equity in earnings of unconsolidated joint ventures, net		—			(105	)		(133	)
Write-down of assets held for sale		—			561			—
Provision for bad debts		1,192			717			497
Stock-based compensation expense		8,833			7,262			4,322
Changes in operating assets and liabilities:
Accounts receivable		(2,931	)		(2,868	)		980
Accounts receivable from affiliates		3			411			337
Property tax and insurance deposits		(2,200	)		(1,162	)		406
Prepaid expenses and other		2,427			(192	)		(1,847	)
Other assets		(1,289	)		(163	)		(1,745	)
Accounts payable		815			(1,267	)		(3,166	)
Accrued expenses		2,146			2,833			4,876
Federal and state income taxes receivable/payable		(108	)		5,342			(1,222	)
Deferred resident revenue		176			1,932			2,719
Customer deposits		320			10			(51	)
Net cash provided by operating activities		48,895			46,312			42,644
Investing Activities
Capital expenditures		(42,430	)		(18,742	)		(13,562	)
Cash paid for acquisitions		(162,460	)		(160,105	)		(150,391	)
Proceeds from SHPIII/CSL Transaction		—			2,532			—
Proceeds from disposition of assets		43,463			796			1,460
Distributions from joint ventures		—			102			197
Net cash used in investing activities		(161,427	)		(175,417	)		(162,296	)
Financing Activities
Proceeds from notes payable		250,944			300,820			140,237
Repayments of notes payable		(115,896	)		(140,950	)		(23,539	)
Cash payments for capital lease and financing obligations		(978	)		(971	)		(871	)
Increase in restricted cash		(918	)		(816	)		(1,246	)
Cash proceeds from the issuance of common stock		42			170			3,163
Excess tax benefits on stock options exercised		(19	)		(82	)		(1,625	)
Deferred financing charges paid		(3,765	)		(3,468	)		(1,593	)
Net cash provided by financing activities		129,410			154,703			114,526
Increase (Decrease) in cash and cash equivalents		16,878			25,598			(5,126	)
Cash and cash equivalents at beginning of year		39,209			13,611			18,737
Cash and cash equivalents at end of year	$	56,087		$	39,209		$	13,611
Supplemental Disclosures
Cash paid during the year for:
Interest	$	33,642		$	28,856		$	21,953
Income taxes	$	1,039		$	724		$	702
Non-cash operating, investing, and financing activities:
Notes payable assumed by purchaser through disposition of assets	$	6,764		$	—		$	—

See accompanying notes to consolidated financial statements.

F-6

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2015

1. Organization

Capital Senior Living Corporation, a Delaware corporation (together with its subsidiaries, the “Company”), is one of the largest operators of senior living communities in the United States in terms of resident capacity. The Company owns, operates, develops and manages senior living communities throughout the United States. As of December 31, 2015, the Company operated 121 senior living communities in 23 states with an aggregate capacity of approximately 15,400 residents, including 71 senior living communities which the Company owned and 50 senior living communities that the Company leased. As of December 31, 2015, the Company also operated one home care agency. The accompanying consolidated financial statements include the financial statements of Capital Senior Living Corporation and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. The Company accounts for significant investments in unconsolidated companies, in which the Company has significant influence, using the equity method of accounting.

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents. The Company has deposits in banks that exceed Federal Deposit Insurance Corporation insurance limits. Management believes that credit risk related to these deposits is minimal. Restricted cash consists of deposits required by certain lenders as collateral pursuant to letters of credit. The deposit must remain so long as the letter of credit is outstanding which is subject to renewal annually.

Long-Lived Assets

Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets. At each balance sheet date, the Company reviews the carrying value of its property and equipment to determine if facts and circumstances suggest that they may be impaired or that the depreciation period may need to be changed. The Company considers internal factors such as net operating losses along with external factors relating to each asset, including contract changes, local market developments, and other publicly available information. If an indicator of impairment is identified, the carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flows from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount the carrying value exceeds the fair market value, generally based on discounted cash flows, of the long-lived asset. The Company does not believe there are any indicators of impairment that would require an adjustment to the carrying value of the property and equipment or their remaining useful lives as of December 31, 2015 and 2014.

Assets Held for Sale

Assets are classified as held for sale when the Company has determined all of the held-for-sale criteria have been met. The Company determines the fair value, net of costs of disposal, of an asset on the date the asset is categorized as held for sale, and the asset is recorded at the lower of its fair value, net of cost of disposal, or carrying value on that date. The Company periodically reevaluates assets held for sale to determine if the assets are still recorded at the lower of fair value, net of cost of disposal, or carrying value. The fair values are generally determined based on market rates, industry trends and recent comparable sales transactions. The actual sales price of these assets could differ significantly from the Company’s estimates.

During the fourth quarter of fiscal 2014, the Company classified four senior living communities as held for sale and determined the assets had an aggregate fair value, net of cost of disposal, that exceeded the carrying values, using level 2 inputs as defined in the accounting standards codification, and a remeasurement write-down of approximately $0.6 million was recorded to adjust the carrying values of the assets held for sale to $35.8 mil-

F-7

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

lion at December 31, 2014. The four senior living communities were sold during the first quarter of fiscal 2015 in a single transaction for its carrying value. There were no senior living communities classified as held for sale by the Company at December 31, 2015.

Investments in Unconsolidated Joint Ventures

The Company accounted for its investments in unconsolidated joint ventures under the equity method of accounting. The Company had not consolidated these joint venture interests because the Company had concluded that the other member of each joint venture had substantive kick-out rights or substantive participating rights. Under the equity method of accounting, the Company recorded its investments in the unconsolidated joint ventures at cost and adjusted such investments for its share of the earnings and losses of the joint ventures. On June 30, 2014, the Company acquired 100% of the member interests in these joint ventures. For additional information refer to Note 4, “Acquisitions.”

Off-Balance Sheet Arrangements

The Company had no material off-balance sheet arrangements at December 31, 2015.

Income Taxes

Income taxes are computed using the asset and liability method and current income taxes are recorded based on amounts refundable or payable in the current year. Deferred income taxes are recorded based on the estimated future tax effects of loss carryforwards and temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which we expect those carryforwards and temporary differences to be recovered or settled. Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income.

The Company evaluates uncertain tax positions through consideration of accounting and reporting guidance on criteria, measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better financial-statement comparability among different companies. The Company is required to recognize a tax benefit in its financial statements for an uncertain tax position only if management’s assessment is that its position is “more likely than not” (i.e., a greater than 50 percent likelihood) to be upheld on audit based only on the technical merits of the tax position. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as income tax expense.

Revenue Recognition

Resident and health care revenue is recognized at estimated net realizable amounts, based on historical experiences, due from residents in the period in which the rental and other services are provided. Additionally, substantially all community fees received from residents are non-refundable and are recorded initially by the Company as deferred revenue. The deferred amounts are amortized over the respective residents’ initial lease term which is consistent with the contractual obligation associated with the estimated stay of the resident.

Revenues from the Medicaid program accounted for approximately 5% of the Company’s revenue in fiscal 2015 and 4% of the Company’s revenue in each of fiscal 2014 and 2013. During fiscal 2015, 2014, and 2013, 34, 30, and 29, respectively, of the Company’s communities were providers of services under the Medicaid program. Accordingly, these communities were entitled to reimbursement under the foregoing program at established rates

F-8

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

that were lower than private pay rates. Patient service revenue for Medicaid patients was recorded at the reimbursement rates as the rates were set prospectively by the applicable state upon the filing of an annual cost report. None of the Company’s communities were providers of services under the Medicare program during fiscal 2015 or 2014.

Laws and regulations governing the Medicaid program are complex and subject to interpretation. The Company believes that it is in compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of potential wrongdoing. While no such regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation as well as significant regulatory action including fines, penalties, and exclusion from the Medicaid program.

Management services revenue was recognized when earned and related to the Company providing certain management and administrative support services under management contracts which were terminated when the Company acquired 100% of the member interests in its unconsolidated joint ventures on June 30, 2014.

Community reimbursement revenue is comprised of reimbursable expenses from the non-consolidated communities that the Company operated under long-term management agreements, which were terminated when the Company acquired 100% of the member interests in its unconsolidated joint ventures on June 30, 2014.

Lease Accounting

The Company determines whether to account for its leases as operating, capital or financing leases depending on the underlying terms of the lease agreement. This determination of classification requires significant judgment relating to certain information, including the estimated fair value and remaining economic life of the community, the Company’s cost of funds, minimum lease payments and other lease terms. The lease rates under the Company’s lease agreements are subject to certain conditional escalation clauses which are recognized when probable or incurred and are based on changes in the consumer price index or certain operational performance measures. As of December 31, 2015 and 2014, the Company leased 50 communities, 48 of which the Company classified as operating leases and two of which the Company classified as capital lease and financing obligations. The Company incurs lease acquisition costs and amortizes these costs over the term of the lease agreement. Certain leases entered into by the Company qualified as sale/leaseback transactions, and as such, any related gains have been deferred and are being amortized over the respective lease term. No new communities were leased by the Company during fiscal 2015 or 2014.

Facility lease expense in the Company’s Consolidated Statements of Operations and Comprehensive loss includes rent expense plus amortization expense relating to leasehold acquisition costs offset by the amortization of deferred gains and lease incentives.

Credit Risk and Allowance for Doubtful Accounts

The Company’s resident receivables are generally due within 30 days from the date billed. Accounts receivable are reported net of an allowance for doubtful accounts, and represent the Company’s estimate of the amount that ultimately will be collected. The adequacy of the Company’s allowance for doubtful accounts is reviewed on an ongoing basis, using historical payment trends, write-off experience, analyses of receivable portfolios by payor source and aging of receivables, as well as a review of specific accounts, and adjustments are made to the allowance as necessary. Credit losses on resident receivables have historically been within management’s estimates, and management believes that the allowance for doubtful accounts adequately provides for expected losses.

Employee Health and Dental Benefits, Workers’ Compensation, and Insurance Reserves

The Company offers certain full-time employees an option to participate in its health and dental plans. The Company is self-insured up to certain limits and is insured if claims in excess of these limits are incurred. The

F-9

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

cost of employee health and dental benefits, net of employee contributions, is shared between the corporate office and the senior living communities based on the respective number of plan participants. Funds collected are used to pay the actual program costs, including estimated annual claims, third-party administrative fees, network provider fees, communication costs, and other related administrative costs incurred by the plans. Claims are paid as they are submitted to the Company’s third-party administrator. The Company records a liability for outstanding claims and claims that have been incurred but not yet reported. This liability is based on the historical claim reporting lag and payment trends of health insurance claims. Management believes that the liability for outstanding losses and expenses is adequate to cover the ultimate cost of losses and expenses incurred at December 31, 2015; however, actual claims and expenses may differ. Any subsequent changes in estimates are recorded in the period in which they are determined.

The Company uses a combination of insurance and self-insurance for workers’ compensation. Determining the reserve for workers’ compensation losses and costs that the Company has incurred as of the end of a reporting period involves significant judgments based on projected future events, including potential settlements for pending claims, known incidents which may result in claims, estimates of incurred but not yet reported claims, changes in insurance premiums, estimated litigation costs and other factors. The Company regularly adjusts these estimates to reflect changes in the foregoing factors. However, since this reserve is based on estimates, the actual expenses incurred may differ from the amounts reserved. Any subsequent changes in estimates are recorded in the period in which they are determined.

Advertising

Advertising is expensed as incurred. Advertising expenses for the years ended December 31, 2015, 2014, and 2013 were $13.9 million, $12.7 million, and $10.5 million, respectively, and are included as a component of operating expenses within the Consolidated Statements of Operations and Comprehensive Loss.

Net loss Per Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Potentially dilutive securities consist of unvested restricted shares and shares that could be issued under outstanding stock options. Potentially dilutive securities are excluded from the computation of net loss per common share if their effect is antidilutive.

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except for per share amounts):

	Year Ended December 31,
	2015			2014			2013
Net loss	$	(14,284	)	$	(24,126	)	$	(16,504	)
Net loss allocated to unvested restricted shares		—			(598	)		(513	)
Undistributed net loss allocated to common shares	$	(14,284	)	$	(23,528	)	$	(15,991	)
Weighted average shares outstanding — basic		28,688			28,301			27,815
Effects of dilutive securities:
Employee equity compensation plans		—			—			—
Weighted average shares outstanding — diluted		28,688			28,301			27,815
Basic net loss per share	$	(0.50	)	$	(0.83	)	$	(0.58	)
Diluted net loss per share	$	(0.50	)	$	(0.83	)	$	(0.58	)

F-10

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Awards of unvested restricted stock representing approximately 0.8 million, 0.7 million, and 0.9 million shares were outstanding for the fiscal years ended December 31, 2015, 2014, and 2013, respectively, and are antidilutive. During fiscal 2015, the unvested restricted stock did not meet all of the requirements to be deemed participating securities. Therefore, for current and future reporting periods, (losses) earnings per share will be calculated under the treasury method and the two-class method will no longer be utilized by the Company.

Treasury Stock

The Company accounts for treasury stock under the cost method and includes treasury stock as a component of shareholders’ equity. There were no repurchases of the Company’s stock during fiscal 2015 or 2014. The Company has repurchased 144,315 shares during the first quarter of fiscal 2016 through the date of the filing of our 2015 annual report on Form 10-K with the SEC.

Stock-Based Compensation

The Company recognizes compensation expense for share-based payment awards to certain employees and directors, including grants of stock options and awards of restricted stock, in the Consolidated Statements of Operations and Comprehensive Loss based on their fair values.

On May 8, 2007, the Company’s stockholders approved the 2007 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation (as amended, the “2007 Plan”) which provides for, among other things, the grant of restricted stock awards and stock options to purchase shares of the Company’s common stock. The 2007 Plan authorizes the Company to issue up to 4.6 million shares of common stock and the Company has reserved 2.0 million shares of common stock for future issuance pursuant to awards under the 2007 Plan. Effective May 8, 2007, the 1997 Omnibus Stock and Incentive Plan (as amended, the “1997 Plan”) was terminated and no additional shares will be granted under the 1997 Plan. The Company has reserved 0.3 million shares of common stock for future issuance upon the exercise of outstanding stock options pursuant to the 1997 Plan.

Segment Information

The Company evaluates the performance and allocates resources of its senior living facilities based on current operations and market assessments on a property-by-property basis. The Company does not have a concentration of operations geographically or by product or service as its management functions are integrated at the property level. The Company has determined that all of its operating units meet the criteria in Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting, to be aggregated into one reporting segment. As such, the Company operates in one segment.

Recently Issued Accounting Guidance

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases. ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective beginning in 2019. Early adoption of ASU 2016-02 as of its issuance is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. We are currently evaluating the impact of adopting the new leases standard on our consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes – Balance Sheet Reclassification of Deferred Taxes (Topic 740). ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adop-

F-11

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

tion is permitted and the amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company early adopted ASU 2015-17 in the fourth quarter of 2015 on a prospective basis and included the current portion of deferred tax assets within the non-current portion of deferred tax liabilities within the Company’s Consolidated Balance Sheet. The Company did not adjust its prior period consolidated financial statements as a result of the adoption of ASU 2015-17.

In September 2015, the FASB issued ASU 2015-16, Business Combinations — Simplifying the Accounting for Measurement-Period Adjustments. ASU 2015-16 eliminates the requirement for an acquirer in a business combination to account for the measurement-period adjustment retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. ASU 2015-16 is applied prospectively and is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the impact the adoption of ASU 2015-16 will have on the Company’s consolidated financial statements and disclosures.

In April 2015, the FASB issued ASU 2015-03, Interest — Imputation of Interest- Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30). The amendments in ASU No. 2015-03 requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. ASU 2015-03 requires retrospective application and will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. The Company early adopted the provisions of ASU 2015-03 as of October 1, 2015, and incorporated the provisions of this update to its consolidated financial statements upon adoption. As a result of adoption of ASU 2015-03, at December 31, 2015, and 2014, approximately $8.5 million and $6.3 million, respectively, of debt issuance costs, net of accumulated amortization, were reclassified within the Company’s Consolidated Balance Sheets from other assets to notes payable. The adoption of ASU 2015-03 did not have an impact on the Company’s financial condition or results of operations.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. ASU 2014-09 is effective for annual periods beginning after December 15, 2017. The Company is currently evaluating the impact the adoption of ASU 2014-09 will have on the Company’s consolidated financial statements and disclosures.

Use of Estimates and Critical Accounting Policies

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements and related footnotes. Management bases its estimates and assumptions on historical experience, observance of industry trends and various other sources of information and factors, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially could result in materially different results under different assumptions and conditions. The Company believes revenue recognition, credit risk and allowance for doubtful accounts, investments in unconsolidated joint ventures, lease accounting, employee health and dental benefits, workers’ compensation and insurance reserves, long-lived assets, assets held for sale, and income taxes are its most critical accounting policies and require management’s most difficult and subjective judgments.

F-12

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Reclassifications

Certain reclassifications have been made to prior period amounts to conform to current period presentation. The Company’s Consolidated Statements of Cash Flows now reflect changes in deferred resident revenue separately from other components of deferred income. Accordingly, the Company reclassified changes in deferred resident revenue from changes in deferred income to a separate line item within the Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013, to be consistent with the presentation for the year ended December 31, 2015. This reclassification had no impact on net cash provided by operating activities.

3. Transactions with Affiliates

The Company was party to a series of property management agreements (the “SHPIII/CSL Management Agreements”) with three joint ventures (collectively “SHPIII/CSL”) owned 90% by Seniors Housing Partners III, LP (“SHPIII”), a fund managed by Prudential Investment Management, Inc. (“Prudential Investment”) and 10% by the Company, which collectively owned and operated three senior living communities. The SHPIII/CSL Management Agreements were for initial terms of ten years from the date the certificate of occupancy was issued and extended until various dates through January 2019. The SHPIII/CSL Management Agreements generally provided for management fees of 5% of gross revenue plus reimbursement for costs and expenses related to the communities. On June 30, 2014, the Company acquired 100% of the member interests in these joint ventures. For additional information refer to Note 4, “Acquisitions.”

4. Acquisitions

Fiscal 2015

Effective October 30, 2015, the Company closed the acquisition of one senior living community located in Virginia Beach, Virginia, for $38.0 million (the “Virginia Beach Transaction”). The community consists of 111 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Protective Life Insurance Company (“Protective Life”) for $28.0 million of the acquisition price at a fixed interest rate of 4.25% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective September 30, 2015, the Company closed the acquisition of one senior living community located in Mahomet, Illinois, for $15.5 million Mahomet Transaction (the “Mahomet Transaction”). The community consists of 78 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $11.1 million of the acquisition price at a fixed interest rate of 4.69% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective August 11, 2015, the Company closed the acquisition of one senior living community located in Indianapolis, Indiana, for $21.0 million (the “Indianapolis Transaction”). The community consists of 124 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Protective Life for $13.2 million of the acquisition price at a fixed interest rate of 4.25% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources. The note with Protective Life associated with the Indianapolis Transaction includes a loan commitment for up to $2.6 million of supplemental funding at the same terms and 4.25% fixed interest rate. The loan commitment is based on meeting certain funding requirements and is available through February 28, 2018.

Effective July 28, 2015, the Company closed the acquisition of one senior living community located in Columbiana, Ohio, for approximately $13.3 million (the “Columbiana Transaction”). The community consists of

F-13

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

68 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Protective Life for approximately $9.9 million of the acquisition price at a fixed interest rate of 4.25% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective May 29, 2015, the Company closed the acquisition of one senior living community located in Oneonta, New York, for $14.9 million (the “Heritage Transaction”). The community consists of 64 independent living units and 44 assisted living units. The Company incurred approximately $0.4 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $11.2 million of the acquisition price at a fixed interest rate of 4.79% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective May 21, 2015, the Company closed the acquisition of two senior living communities located in Hartford and West bend, Wisconsin, for $12.0 million (the “Emerald Transaction”). The communities consist of 79 assisted living units. The Company incurred approximately $0.2 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $9.2 million of the acquisition price at a fixed interest rate of 4.55% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective March 27, 2015, the Company closed the acquisition of one senior living community located in Baytown, Texas, for approximately $29.6 million (the “Baytown Transaction”). The community consists of 9 independent living cottages and 120 assisted living units. The Company incurred approximately $0.2 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Protective Life for approximately $21.4 million of the acquisition price at a fixed interest rate of 3.55% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective January 13, 2015, the Company closed the acquisition of one senior living community located in Green Bay, Wisconsin, for approximately $18.3 million (the “Green Bay Transaction”). The community consists of 78 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $14.1 million of the acquisition price at a fixed interest rate of 4.35% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

As a result of these acquisitions, the Company recorded additions to property and equipment of approximately $148.0 million and other assets of approximately $14.6 million, primarily consisting of in-place lease intangibles, within the Company’s Consolidated Balance Sheets which will be depreciated or amortized over the estimated useful lives. The purchase accounting for the fourth quarter 2015 acquisition is preliminary as it is subject to final valuation adjustments.

During fiscal 2015, these acquisitions generated $17.2 million of revenue and $(6.5) million of losses before income taxes which are included in the Company’s Consolidated Statements of Operations and Comprehensive Loss from the dates of acquisition. Losses before income taxes primarily result from the amortization of in-place lease intangibles associated with acquisitions during fiscal 2015 and 2014. The unaudited pro forma combined results of operations have been prepared as if the acquisitions had occurred on January 1, 2014, as follows (in thousands):

	December 31,
	2015			2014
Total revenues	$	425,789		$	416,518
Loss before income taxes	$	(3,616	)	$	(40,880	)

F-14

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The unaudited pro forma consolidated amounts are presented for informational purposes only and do not necessarily reflect the results of operations of the Company that would have actually resulted had the acquisitions occurred on January 1, 2014.

Fiscal 2014

Effective December 17, 2014, the Company closed the acquisition of one senior living community located in Canton, Georgia, for approximately $14.6 million (the “Canton Transaction”). The community consists of 49 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $10.4 million of the acquisition price at a fixed interest rate of 4.50% with a 10-year term, with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective August 27, 2014, the Company closed the acquisition of one senior living community located in Plymouth, Wisconsin, for $13.5 million (the “Plymouth Transaction”). The community consists of 69 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $10.4 million of the acquisition price at a fixed interest rate of 4.70% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective August 4, 2014, the Company closed the acquisition of one senior living community located in Roanoke, Virginia, for approximately $16.8 million (the “Roanoke Transaction”). The community consists of 60 assisted living units and 34 independent living units. The Company incurred approximately $0.2 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $12.9 million of the acquisition price at a fixed interest rate of 4.59% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective August 4, 2014, the Company closed the acquisition of one senior living community located in Oshkosh, Wisconsin, for approximately $17.1 million (the “Oshkosh Transaction”). The community consists of 90 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $13.2 million of the acquisition price at a fixed interest rate of 4.59% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective June 30, 2014, the Company acquired 100% of the members’ equity interests in SHPIII/CSL Miami, LLC (“SHPIII/CSL Miami”), SHPIII/CSL Richmond Heights, LLC (“SHPIII/CSL Richmond Heights”), and SHPIII/CSL Levis Commons, LLC (“SHPIII/CSL Levis Commons”) for approximately $83.6 million (the “SHPIII/CSL Transaction”). Prior to the acquisition, SHP III, a fund managed by Prudential Investment maintained a 90% equity interest in each joint venture with the remaining 10% equity interest in each joint venture held by wholly owned subsidiaries of the Company. Based on the Company acquiring the remaining ownership interests of the joint ventures, the Company concluded the acquisition took the form of a “step-acquisition” or a “business combination achieved in stages.” Further, with the Company obtaining complete ownership of the joint ventures, the act of obtaining control triggered the application of the acquisition model in Accounting Standards Codification (“ASC”) 805, Business Combinations, which resulted in the equity ownership interest being remeasured at fair value and the acquired assets and assumed liabilities measured at their full fair values. The remeasurement fair value of the equity interests were determined based on the cash proceeds, including incentive distributions, received by the Company in accordance with each respective joint venture partnership agreement. Accordingly, the Company received cash proceeds of approximately $2.5 million and recognized a gain of approximately $1.5 million during the second

F-15

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

quarter of fiscal 2014 which was reflected as a joint venture equity investment valuation gain within the Company’s Consolidated Statements of Operations and Comprehensive Loss.

On June 30, 2014, in conjunction with the SHPIII/CSL Transaction, the Company obtained approximately $16.4 million of mortgage debt from Fannie Mae for the acquisition of SHPIII/CSL Miami. The new mortgage loan has a 10-year term with a fixed interest rate of 4.30% and the principal amortized over a 30-year term. The Company also obtained approximately $23.7 million of mortgage debt from Fannie Mae for the acquisition of SHPIII/CSL Richmond Heights. The new mortgage loan has a 10-year term with a fixed interest rate of 4.48% and the principal amortized over a 30-year term. The Company obtained interim, interest only, financing of $21.6 million from Wells Fargo Bank, N.A. (“Wells Fargo”) for the acquisition of SHPIII/CSL Levis Commons with a variable interest rate of LIBOR plus 2.75% and a 24-month term. The balance of the acquisition price was paid from the Company’s existing cash resources. The Company incurred approximately $0.3 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss.

Effective March 26, 2014, the Company closed the acquisition of one senior living community located in Lambertville, Michigan, for $14.6 million (the “Aspen Grove Transaction”). The community consists of 78 assisted living units. The Company incurred approximately $0.2 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for $11.0 million of the acquisition price at a fixed interest rate of 5.43% with a 12-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

As a result of these acquisitions, the Company recorded additions to property and equipment of approximately $146.1 million and other assets of approximately $14.1 million, primarily consisting of in-place lease intangibles, within the Company’s Consolidated Balance Sheets which will be depreciated or amortized over the estimated useful lives. The purchase accounting for the Canton Transaction which closed during the fourth quarter of fiscal 2014 was preliminary as it was subject to final valuation adjustments. During the first quarter of fiscal 2015, final valuation adjustments resulted in the Company reclassifying approximately $0.4 million from other assets to property and equipment and the 2014 Consolidated Balance Sheet has been recast to reflect the final purchase price allocation.

During fiscal 2014, these acquisitions generated $16.6 million of revenue and $(4.6) million of losses before income taxes which are included in the Company’s Consolidated Statements of Operations and Comprehensive Loss from the dates of acquisition. Losses before income taxes primarily result from the amortization of in-place lease intangibles associated with acquisitions during fiscal 2014 and 2013. The unaudited pro forma combined results of operations have been prepared as if the acquisitions had occurred on January 1, 2013, as follows (in thousands):

	December 31,
	2014			2013
Total revenues	$	400,653		$	378,737
Loss before income taxes	$	(15,655	)	$	(25,963	)

The unaudited pro forma consolidated amounts are presented for informational purposes only and do not necessarily reflect the results of operations of the Company that would have actually resulted had the acquisitions occurred on January 1, 2013.

5. Dispositions

Effective August 6, 2015, the Company closed a transaction to sell one of its senior living communities located in Wichita, KS, for approximately $14.8 million (the “Sedgwick Sale Transaction”). As a result of the sale, outstanding mortgage debt totaling approximately $6.8 million was assumed by the buyer. The Company recognized a gain on sale of approximately $6.4 million and received net proceeds, less the debt assumption, of

F-16

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

approximately $8.0 million. For income tax purposes, the Company executed a like-kind exchange and acquired a replacement property shortly after the sale which resulted in the deferral of the gain without the Company incurring any current federal or state income tax liabilities. The Company contracted with a qualified intermediary for purposes of reaching its determination that the transaction satisfied all requirements of a like-kind exchange under applicable federal and state income tax law.

Effective January 22, 2015, the Company closed a transaction to sell four of its senior living communities located in Oklahoma City, Oklahoma, Shreveport, Louisiana, Southfield, Michigan, and Winston-Salem, North Carolina, in a single transaction for approximately $36.5 million (the “Four Property Sale Transaction”). As a result of the sale, the outstanding mortgage debt on the Company’s senior living communities located in Oklahoma City and Shreveport was repaid without incurring any prepayment penalties as these notes were short-term, bridge loan interim financing. However, the mortgage loan associated with the Company’s senior living community located in Winston-Salem could not be prepaid under the existing loan agreement as it did not offer a prepayment provision. Additionally, this mortgage loan was cross-collateralized with another mortgage loan on one of the Company’s senior living communities located in Peoria, IL, which also did not offer a prepayment provision. Therefore, the Company determined it would defease the Winston-Salem and Peoria mortgage loans by acquiring certain treasury securities to serve as collateral for the outstanding principal balance as of the date of the sale until the note matured on September 1, 2015. The Company contracted with a third party trust to assume the mortgage debt and assigned all of its rights to the treasury securities to serve as collateral until the balance remaining comes due. Based on this structure, the Company concluded it met the requirements to report the debt transaction as a legal defeasance which resulted in the Company removing the respective assets and liabilities from its Consolidated Balance Sheet during the first quarter of fiscal 2015 when the transaction closed. The Company had reported these assets as held for sale at December 31, 2014, and recorded a remeasurement write-down of $0.6 million to adjust the carrying values of these assets to the sales price, less costs to sell. As a result of the sale, the Company received net proceeds of approximately $35.7 million.

6. Property and Equipment

Property and equipment consists of the following (in thousands):

		December 31,
	Asset Lives	2015		2014
Land		$	61,254	$	54,115
Land improvements	5 to 20 years		17,613		13,209
Buildings and building improvements	10 to 40 years		897,668		764,794
Furniture and equipment	5 to 10 years		42,879		34,921
Automobiles	5 to 7 years		4,977		3,829
Leasehold improvements	(1)		58,466		41,679
Construction in progress	NA		5,700		1,520
			1,088,557		914,067
Less accumulated depreciation and amortization.			197,985		166,454
Property and equipment, net		$	890,572	$	747,613

(1) Leasehold improvements are amortized over the shorter of the useful life of the asset or the remaining lease term.

At December 31, 2015 and 2014, furniture and equipment include $3.0 million of capitalized computer software development costs of which $2.6 million and $2.5 million, respectively, has been amortized and is included as a component of accumulated depreciation and amortization. During fiscal 2015, final valuation adjustments associated with 2014 senior living community acquisitions resulted in the Company reclassifying approximately $0.4 million from other assets to property and equipment and the 2014 Consolidated Balance Sheet has been recast to reflect the final purchase price allocation.

F-17

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Property and equipment includes $32.4 million of assets under capital lease in connection with the Ventas Lease Transaction, as discussed at Note 17, “Leases”, of which $13.7 million and $12.8 million has been amortized and is included as a component of accumulated depreciation and amortization at December 31, 2015 and 2014, respectively.

7. Other Assets

Other assets consist of the following (in thousands):

	December 31,
	2015		2014
Deferred lease costs, net		8,211		9,684
Security and other deposits		12,953		11,324
In-place lease intangibles, net		7,719		7,443
Other		2,310		2,732
	$	31,193	$	31,183

In connection with the Company’s acquisitions and certain lease transactions, subject to final valuation adjustments, the Company records additions to in-place lease intangibles in order to reflect the value associated with the resident operating leases acquired. In-place lease intangibles are being amortized over the estimated remaining useful life of the respective resident operating leases. The value of in-place leases includes lost revenue that would be realized if the resident operating leases were to be replaced by the Company.

During fiscal 2015, final valuation adjustments associated with 2014 senior living community acquisitions resulted in the Company reclassifying approximately $0.4 million from other assets to property and equipment and the 2014 Consolidated Balance Sheet has been recast to reflect the final purchase price allocations. Additionally, other assets at December 31, 2014, was revised from amounts previously reported to reflect the impact of reclassifying $6.3 million in debt issuance costs, net of accumulated amortization, to notes payable. This revision was due to the Company’s adoption of ASU 2015-03, Interest—Imputation of Interest- Simplifying the Presentation of Debt Issuance Costs, during the fourth quarter of fiscal 2015 which requires current and retrospective application to the Company’s Consolidated Balance Sheets for all periods presented.

At December 31, 2015 and 2014, the Company had gross in-place lease intangibles of $74.9 million and $60.6 million, respectively, of which $67.2 million and $52.8 million, respectively, has been amortized. The unamortized balance at December 31, 2015 is expected to be fully amortized during fiscal 2016.

8. Accrued Expenses

Accrued expenses consist of the following (in thousands):

	December 31,
	2015		2014
Accrued salaries, bonuses and related expenses	$	11,121	$	9,865
Accrued property taxes		14,087		13,050
Accrued interest		3,035		2,485
Accrued health claims and workers comp		3,230		4,026
Accrued professional fees		748		771
Other		2,079		1,957
	$	34,300	$	32,154

F-18

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

9. Notes Payable

Notes payable consists of the following (in thousands):

Lender	Average Monthly Payment		Net Book  Value Of Collateral(1)		Interest Rate		Maturity Date	Notes Payable December 31,
								2015		2014
Fannie Mae		—		—		—	(4)	$	—	$	26,809
Fannie Mae		—		—		—	(4)		—		5,372
Fannie Mae		78		15,214		5.69	August 2021		12,716		12,915
Fannie Mae		26		5,594		4.97	October 2021		4,502		4,582
Fannie Mae		101		21,093		4.92	October 2021		17,779		18,096
Fannie Mae		27		21,093		5.19	October 2021		4,978		—
Fannie Mae		117		24,283		4.92	November 2021		20,674		21,041
Fannie Mae		27		6,273		4.38	March 2022		5,036		5,132
Fannie Mae		60		12,507		4.76	April 2022		10,814		11,007
Fannie Mae		135		28,287		4.69	April 2022		24,584		25,026
Fannie Mae		60		15,981		4.48	May 2022		11,141		11,348
Fannie Mae		144		34,998		4.34	November 2022		27,462		27,970
Fannie Mae		33		7,685		4.50	November 2022		6,113		6,222
Fannie Mae		43		26,987		5.49	November 2022		7,592		—
Fannie Mae		84		18,439		4.32	January 2023		16,164		16,460
Fannie Mae		49		18,439		5.39	January 2023		8,684		—
Fannie Mae		39		8,682		4.58	January 2023		7,224		7,350
Fannie Mae		85		18,782		4.66	April 2023		15,700		15,967
Fannie Mae		18		5,524		5.46	April 2023		3,150		—
Fannie Mae		45		8,700		5.93	October 2023		7,411		7,506
Fannie Mae		67		14,242		5.50	November 2023		11,526		11,686
Fannie Mae		67		13,028		5.38	November 2023		11,591		11,756
Fannie Mae		282		55,740		5.56	January 2024		48,071		48,722
Fannie Mae		632		118,792		4.24	July 2024(5)		125,677		134,650
Fannie Mae		120		27,851		4.48	July 2024		23,196		23,572
Fannie Mae		81		20,660		4.30	July 2024		16,035		16,304
Fannie Mae		134		29,273		4.59	September 2024		25,666		26,070
Fannie Mae		54		11,550		4.70	September 2024		10,200		10,357
Fannie Mae		53		13,093		4.50	January 2025		10,258		10,406
Fannie Mae		95		6,579		4.46	January 2025		18,651		18,923
Fannie Mae		70		16,630		4.35	February 2025		13,909		—
Fannie Mae		109		9,434		3.85	March 2025		22,939		—
Fannie Mae		102		26,078		3.84	April 2025		21,548		—
Fannie Mae		47		10,404		4.55	June 2025		9,087		—
Fannie Mae		59		13,014		4.79	June 2025		11,095		—
Fannie Mae		81		16,535		5.30	June 2025		14,029		14,237
Fannie Mae		58		13,677		4.69	October 2025		11,122		—
Fannie Mae		44		10,380		4.70	October 2025		8,406		—
Fannie Mae		273		41,027		4.68	December 2025		52,774		—
Fannie Mae		62		12,144		5.43	April 2026		10,761		10,908

F-19

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Lender	Average Monthly Payment		Net Book  Value Of Collateral(1)		Interest Rate		Maturity Date		Notes Payable December 31,
									2015		2014
Protective Life		96		26,385		3.55		April 2025		21,081		—
Protective Life		49		12,207		4.25		August 2025		9,882		—
Protective Life		65		19,045		4.25		September 2025		13,145		—
Protective Life		138		34,327		4.25		November 2025		27,961		—
Berkadia		—		—		—		(6)		—		13,777
Berkadia		—		—		—		(7)		—		4,550
Berkadia		—		—		—		(6)		—		9,300
Berkadia		—		—		—		(8)		—		8,472
Berkadia		—		—		—		(7)		—		9,500
Berkadia		48		14,359		(3)		July 2017(9)		11,800		11,800
Wells Fargo		—		—		—		(10)		—		21,600
HUD		16		5,759		4.48		September 2045		3,093		3,142
Insurance Financing		71		—		1.73		October 2016		711		—
Insurance Financing		138		—		1.73		April 2016		553		—
Insurance Financing		208		—		1.79		March 2016		625		3,095
Insurance Financing		—		—		—		February 2015		—		390
Insurance Financing		—		—		—		September 2015		—		580
	$	4,490				4.60%(2)				777,116		646,600
Less deferred loan costs, net										8,533		6,331
										768,583		640,269
Less current portion										13,634		47,385
									$	754,949	$	592,884

(1) 69 of the facilities owned by the Company are encumbered by mortgage debt and are provided as collateral under their respective loan agreements.

(2) Weighted average interest rate on current fixed interest rate debt outstanding.

(3) Variable interest rate of LIBOR plus 4.50%, which was 4.79% at December 31, 2015.

(4) On November 12, 2015, the Company obtained new long-term financing from Berkadia, who later sold the loans to Fannie Mae, to replace this mortgage debt with a fixed interest rate of 4.68% and a 10-year term.

(5) On August 6, 2015, approximately $6.8 million of this outstanding mortgage debt was assumed by the buyer in conjunction with the Sedgwick Sale Transaction. For additional information refer to Note 5, “Dispositions.”

(6) On January 22, 2015, this mortgage debt was repaid or defeased in conjunction with the Four Property Sale Transaction. For additional information refer to Note 5, “Dispositions.”

(7) On February 17, 2015, the Company obtained new long-term financing from Fannie Mae to replace this mortgage debt with a fixed interest rate of 3.85% and a 10-year term.

(8) On September 24, 2015, the Company obtained new long-term financing from Fannie Mae to replace this mortgage debt with a fixed interest rate of 4.70% and a 10-year term.

F-20

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(9) On February 4, 2015, the Company exercised its right to extend the maturity date with Berkadia to July 10, 2017.

(10) On March 5, 2015, the Company obtained new long-term financing from Fannie Mae to replace this mortgage debt with a fixed interest rate of 3.84% and a 10-year term.

The aggregate scheduled maturities of notes payable at December 31, 2015 are as follows (in thousands):

2016		14,698
2017		25,318
2018		14,158
2019		14,829
2020		15,443
Thereafter		692,670
	$	777,116

On December 17, 2015, the Company completed supplemental mortgage financing of approximately $7.6 million from Fannie Mae on three senior living communities located in Columbus, Ohio, Chardon, Ohio, and Greenwood, Indiana, at a fixed interest rate of 5.49% which is coterminous with existing mortgage debt maturing in November 2022. The supplemental mortgage loans are cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.2 million in deferred financing costs related to these loans, which are being amortized over the remaining initial loan terms.

On November 24, 2015, the Company completed supplemental mortgage financing of approximately $3.2 million from Fannie Mae on one senior living community located in Elkhorn, Nebraska, at a fixed interest rate of 5.46% which is coterminous with existing mortgage debt maturing in April 2023. The supplemental mortgage loan is cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over the remaining initial loan term.

On November 24, 2015, the Company completed supplemental mortgage financing of approximately $8.7 million from Fannie Mae on one senior living community located in Springfield, Missouri, at a fixed interest rate of 5.39% which is coterminous with existing mortgage debt maturing in January 2023. The supplemental mortgage loan is cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over the remaining initial loan term.

On November 12, 2015, the Company repaid mortgage loans totaling approximately $31.6 million from Fannie Mae associated with four of its senior living communities located in Columbia, South Carolina, Deer Park and Pantego, Texas, and South Bend, Indiana, scheduled to mature in June 2017. The Company obtained approximately $52.8 million of new long-term fixed interest rate mortgage financing from Berkadia Commercial Mortgage LLC (“Berkadia”), who later sold the loans to Fannie Mae, at a fixed interest rate of 4.68% with a 10-year term and the principal amortized over a 30-year term. The Company incurred approximately $0.6 million in deferred financing costs related to the new mortgage loans, which are being amortized over 10 years. As a result of the early repayment of the existing mortgage debt, the Company accelerated the amortization of approximately $0.1 million in unamortized deferred financing costs and incurred a prepayment premium of approximately $1.7 million to Fannie Mae.

On October 30, 2015, in conjunction with the Virginia Beach Transaction, the Company obtained $28.0 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 4.25% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.4 million in deferred financing costs related to this loan, which are being amortized over 10 years.

F-21

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On September 30, 2015, in conjunction with the Mahomet Transaction, the Company obtained approximately $11.1 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.69% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On September 30, 2015, the Company completed supplemental financing of approximately $5.0 million from Fannie Mae on an existing senior living community owned by the Company located in Macedonia, Ohio. The supplemental loan is coterminous with existing mortgage debt maturing in October 2021 with a 5.19% fixed interest rate and the principal amortized over a 30-year term. The supplemental loan is cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over the remaining initial loan term.

On September 24, 2015, the Company obtained approximately $8.4 million long-term fixed interest rate mortgage financing from Fannie Mae to replace interim variable interest rate financing obtained by the Company from Berkadia on September 30, 2013, in connection with the Company’s previous acquisition of a senior living community located in Oakwood, Georgia. The new mortgage loan has a 10-year term with a 4.7% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On August 11, 2015, in conjunction with the Indianapolis Transaction, the Company obtained approximately $13.2 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 4.25% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years. The note with Protective Life associated with the Indianapolis Transaction includes a loan commitment for up to $2.6 million of supplemental funding at the same terms and 4.25% fixed interest rate. The loan commitment is based on meeting certain funding requirements and is available through February 28, 2018.

On August 6, 2015, outstanding mortgage debt totaling approximately $6.8 million was assumed by the buyer in conjunction with the Sedgwick Sale Transaction. As a result of the buyer’s assumption of the existing mortgage debt, the Company accelerated the amortization of approximately $0.1 million in unamortized deferred financing costs. For additional information refer to Note 5, “Dispositions”.

On July 28, 2015, in conjunction with the Columbiana Transaction, the Company obtained approximately $9.9 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 4.25% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On May 31, 2015, the Company renewed certain insurance policies and entered into a finance agreement totaling approximately $1.7 million. The finance agreement has a fixed interest rate of 1.73% with the principal being repaid over an 11-month term.

On May 29, 2015, in conjunction with the Heritage Transaction, the Company obtained approximately $11.2 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.79% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On May 21, 2015, in conjunction with the Emerald Transaction, the Company obtained approximately $9.2 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.55% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On March 27, 2015, in conjunction with the Baytown Transaction, the Company obtained approximately $21.4 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 3.55% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

F-22

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On March 5, 2015, the Company repaid an interim, interest only variable rate mortgage loan totaling approximately $21.6 million from Wells Fargo on one of its senior living communities located in Toledo, Ohio. The Company obtained approximately $21.8 million of mortgage debt from Fannie Mae to replace the Wells Fargo interim financing. This new mortgage loan has a 10-year term with a fixed interest rate of 3.84% and the principal amortized over 30-years. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over the loan term. As a result of the refinance, the Company received approximately $0.2 million in cash proceeds. Due to the early repayment, the Company accelerated the amortization of approximately $79,000 in unamortized deferred financing costs and incurred additional prepayment fees totaling approximately $55,000.

On February 17, 2015, the Company obtained new permanent mortgage financing totaling approximately $23.2 million from Fannie Mae on one of its owned senior living communities located in Peoria, Illinois. The new financing replaced a mortgage loan previously scheduled to mature on September 1, 2015, which was defeased by the Company on January 22, 2015, in conjunction with the Four Property Sale Transaction. This new mortgage loan has a 10-year term with a fixed interest rate of 3.85% and the principal amortized over 30 years. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over the loan term. As a result of the Peoria financing, the Company repaid existing mortgage debt on two owned properties totaling approximately $14.1 million. Due to the early repayment, the Company accelerated the amortization of approximately $0.2 million in unamortized deferred financing costs and incurred additional prepayment fees totaling approximately $0.5 million.

On January 22, 2015, outstanding mortgage debt totaling approximately $13.7 million was defeased in conjunction with the Four Property Sale Transaction. The mortgage loan associated with the Company’s senior living community located in Winston-Salem, North Carolina, carried an outstanding balance of approximately $5.7 million and could not be prepaid under the existing loan agreement as it did not offer a prepayment provision. Additionally, this mortgage loan was cross-collateralized with another mortgage loan on one of the Company’s senior living communities located in Peoria, Illinois, which carried an outstanding mortgage balance of approximately $8.0 million and also did not offer a prepayment provision. Therefore, the Company determined it would defease the Winston-Salem and Peoria mortgage loans by acquiring certain treasury securities to serve as collateral for the outstanding principal balance as of the date of the sale until the note matured on September 1, 2015. The Company contracted with a third party trust to assume the mortgage debt and assigned all of its rights to the treasury securities to serve as collateral until the balance remaining came due. Based on this structure, the Company concluded it met the requirements to report the debt transaction as a legal defeasance which resulted in the Company removing the respective assets and liabilities from its Consolidated Balance Sheet during the first quarter of fiscal 2015 when the transaction closed. Due to the defeasance, the Company accelerated the amortization of approximately $18,000 in unamortized deferred financing costs. For additional information refer to Note 5, “Dispositions”.

On January 13, 2015, in conjunction with the Green Bay Transaction, the Company obtained approximately $14.1 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.35% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On December 23, 2014, the Company refinanced a mortgage loan totaling approximately $8.4 million from Freddie Mac associated with one of its senior living communities located in Lincoln, Nebraska. The Company obtained approximately $18.9 million of new mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.46% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which is being amortized over 10 years. As a result of the early repayment of the existing mortgage debt with Freddie Mac, the Company accelerated the amortization of approximately $48,000 in unamortized deferred financing costs and incurred a prepayment premium of approximately $0.9 million.

F-23

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On December 17, 2014, in conjunction with the Canton Transaction, the Company obtained approximately $10.4 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.50% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which is being amortized over 10 years.

On August 27, 2014, in conjunction with the Plymouth Transaction, the Company obtained approximately $10.4 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.70% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which is being amortized over 10 years.

On August 4, 2014, in conjunction with the Roanoke Transaction, the Company obtained approximately $12.9 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term, with a 4.59% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which is being amortized over 10 years.

On August 4, 2014, in conjunction with the Oshkosh Transaction, the Company obtained approximately $13.2 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.59% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which is being amortized over 10 years.

On June 30, 2014, in conjunction with the SHPIII/CSL Transaction, the Company obtained approximately $16.4 million of mortgage debt from Fannie Mae for the acquisition of SHPIII/CSL Miami. The new mortgage loan has a 10-year term with a fixed interest rate of 4.30% and the principal amortized over a 30-year term. The Company also obtained approximately $23.7 million of mortgage debt from Fannie Mae for the acquisition of SHPIII/CSL Richmond Heights. The new mortgage loan has a 10-year term with a fixed interest rate of 4.48% and the principal amortized over a 30-year term. The Company obtained interim, interest only, financing of $21.6 million from Wells Fargo for the acquisition of SHPIII/CSL Levis Commons with a variable interest rate of LIBOR plus 2.75% and a 24-month term. The Company incurred approximately $0.5 million in deferred financing costs related to these loans, which are being amortized over the respective loan terms.

On June 27, 2014, the Company refinanced mortgage loans totaling approximately $111.9 million from Freddie Mac associated with 15 of its senior living communities. The Company obtained approximately $135.5 million of mortgage debt and supplemental financings for 12 of the senior living communities from Fannie Mae. These new mortgage loans have 10-year terms with fixed interest rates of 4.24% and the principal amortized over 30-year terms. The Company obtained interim, interest only, financing of $9.3 million from Berkadia for two of the senior living communities with a variable interest rate of LIBOR plus 4.50% and a 12-month term. The Company also obtained interim, interest only, financing of $11.8 million from Berkadia for one of the senior living communities with a variable interest rate of LIBOR plus 4.50% and a 24-month term. The Company incurred approximately $2.0 million in deferred financing costs related to these loans, which are being amortized over the respective loan terms. As a result of the refinance, the Company received approximately $36.5 million in cash proceeds. As a result of the early repayment of the existing mortgage debt with Freddie Mac, the Company accelerated the amortization of approximately $0.5 million in unamortized deferred loan costs and incurred a prepayment premium of approximately $6.5 million.

On May 31, 2014, the Company renewed certain insurance policies and entered into a finance agreement totaling approximately $1.7 million. The finance agreement has a fixed interest rate of 1.92% with principal being repaid over a 9-month term.

On March 26, 2014, in conjunction with the Aspen Grove Transaction, the Company obtained approximately $11.0 million of mortgage debt from Fannie Mae. The new mortgage loan has a 12-year term with a 5.43% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which is being amortized over 12 years.

On March 25, 2011, the Company issued standby letters of credit, totaling approximately $2.6 million, for the benefit of HCN on certain leases between HCN and the Company.

F-24

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On September 10, 2010, the Company issued standby letters of credit, totaling approximately $2.2 million, for the benefit of HCN on certain leases between HCN and the Company.

On April 16, 2010, the Company issued standby letters of credit, totaling approximately $1.7 million, for the benefit of HCN on certain leases between HCN and the Company.

In connection with the Company’s loan commitments described above, the Company incurred financing charges that were deferred and amortized over the life of the notes. At December 31, 2015 and 2014, the Company had gross deferred loan costs of $10.3 million and $8.5 million, respectively. Accumulated amortization was $1.8 million and $2.2 million at December 31, 2015 and 2014, respectively. During fiscal 2015, due to the early repayment of the Company’s existing mortgage debt associated with the Four Property Sale Transaction, Sedgwick Sale Transaction and refinancings with Fannie Mae, the Company wrote-off approximately $0.5 million in unamortized deferred financing charges and removed the respective accumulated amortization of approximately $1.4 million. Amortization expense is expected to be approximately $1.1 million in each of the next five fiscal years. The Company was in compliance with all aspects of its outstanding indebtedness at December 31, 2015 and 2014.

10. Equity

Preferred Stock

The Company is authorized to issue preferred stock in series and to fix and state the voting powers and such designations, preferences and relative participating, optional or other special rights of the shares of each such series and the qualifications, limitations and restrictions thereof. Such action may be taken by the Board without stockholder approval. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of preferred stock. No preferred stock was outstanding as of December 31, 2015 and 2014.

Share Repurchases

On January 22, 2009, the Company’s board of directors approved a share repurchase program that authorized the Company to purchase up to $10.0 million of the Company’s common stock. Purchases may be made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or block trades, or by any combination of such methods, in accordance with applicable insider trading and other securities laws and regulations. The size, scope and timing of any purchases will be based on business, market and other conditions and factors, including price, regulatory and contractual requirements or consents, and capital availability. The repurchase program does not obligate the Company to acquire any particular amount of common stock and the share repurchase authorization has no stated expiration date. Shares of stock repurchased under the program will be held as treasury shares. Pursuant to this authorization, during fiscal 2009, the Company purchased 349,800 shares at an average cost of $2.67 per share for a total cost to the Company of approximately $0.9 million. All such purchases were made in open market transactions. The Company did not purchase any shares of its common stock pursuant to the Company’s share repurchase program during fiscal 2015, 2014, or 2013.

11. Stock-Based Compensation

Stock Options

Although the Company has not granted stock options in recent years, the Company’s stock option program is a long-term retention program that is intended to attract, retain and provide incentives for employees, officers and directors and to more closely align stockholder and employee interests. The Company’s stock options generally vest over one to five years and the related expense is amortized on a straight-line basis over the vesting period.

F-25

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of the Company’s stock option activity and related information for the years ended December 31, 2015, 2014, and 2013 is presented below:

	Outstanding at Beginning of Year		Granted		Exercised		Forfeited		Outstanding End of Year		Options Exercisable
December 31, 2015
Shares		6,000		—		3,000		—		3,000		3,000
Weighted average price	$	8.44		—	$	5.90		—	$	10.97	$	10.97
December 31, 2014
Shares		19,000		—		13,000		—		6,000		6,000
Weighted average price	$	7.10		—	$	6.48		—	$	8.44	$	8.44
December 31, 2013
Shares		265,930		—		246,930		—		19,000		19,000
Weighted average price	$	6.28		—	$	6.21		—	$	7.10	$	7.10

The options outstanding and the options exercisable at December 31, 2015, 2014, and 2013, had an aggregate intrinsic value of $30,000, $0.1 million, and $0.3 million, respectively. All stock options outstanding are fully vested.

The following table summarizes information relating to the Company’s options outstanding and options exercisable as of December 31, 2015.

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding  at End of Year		Weighted  Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable  at End of Year		Weighted Average Exercise Price
$10.97		3,000		.35	$	10.97		3,000	$	10.97

Restricted Stock

The Company may grant restricted stock awards and units to employees, officers, and directors in order to attract, retain, and provide incentives for such individuals and to more closely align stockholder and employee interests. For restricted stock awards and units without performance-based vesting conditions, the Company records compensation expense for the entire award on a straight-line basis over the requisite service period, which is generally a period of one to four years, unless the award is subject to certain accelerated vesting requirements. Restricted stock awards are considered outstanding at the time of grant since the holders thereof are entitled to dividends, upon vesting, and voting rights. For restricted stock awards with performance-based vesting conditions, total compensation expense is recognized over the requisite service period for each separately vesting tranche of the award as if the award is, in substance, multiple awards once the performance target is deemed probable of achievement. Performance goals are evaluated periodically and if such goals are not ultimately met or it is not probable the goals will be achieved, no compensation expense is recognized and any previously recognized compensation expense is reversed.

F-26

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company recognizes compensation expense of a restricted stock award over its respective vesting or performance period based on the fair value of the award on the grant date, net of forfeitures. A summary of the Company’s restricted common stock awards activity and related information for the years ended December 31, 2015, 2014, and 2013 is presented below:

	Outstanding at Beginning of Year		Issued		Vested		Forfeited		Outstanding End of Year
December 31, 2015
Shares		702,718		467,944		358,716		28,636		783,310
December 31, 2014
Shares		870,217		350,716		406,072		112,143		702,718
December 31, 2013
Shares		803,218		403,715		312,980		23,736		870,217

The restricted stock outstanding at December 31, 2015, 2014, and 2013, had an aggregate intrinsic value of $16.3 million, $17.5 million, and $20.9 million, respectively.

During fiscal 2015, the Company awarded 467,944 shares of restricted common stock to certain employees and directors of the Company, of which 130,000 shares were subject to performance-based vesting conditions. The average market value of the common stock on the date of grant was $24.08. These awards of restricted shares vest over a one to four-year period, unless the award is subject to certain accelerated vesting requirements, and had an intrinsic value of $11.3 million on the date of grant. Additionally, during fiscal 2015, the Company awarded 11,756 restricted stock units to certain directors of the Company with an average market value of $25.52 and an intrinsic value of $0.3 million on the date of grant, that vest over a one-year period.

On February 24, 2016, the Company awarded 541,327 shares of restricted common stock to certain employees of the Company, of which 199,692 shares were subject to performance-based vesting conditions. The market value of the common stock on the date of grant was $15.92. These awards of restricted shares vest over a one to four-year period, unless the award is subject to certain accelerated vesting requirements, and had an intrinsic value of $8.6 million on the date of grant.

Stock Based Compensation

The Company uses the Black-Scholes option pricing model to estimate the grant date fair value of its stock options. The Black-Scholes model requires the input of certain assumptions including expected volatility, expected dividend yield, expected life of the option and the risk free interest rate. The expected volatility used by the Company is based primarily on an analysis of historical prices of the Company’s common stock. The expected term of options granted is based primarily on historical exercise patterns on the Company’s outstanding stock options. The risk free rate is based on zero-coupon U.S. Treasury yields in effect at the date of grant with the same period as the expected option life. The Company does not expect to pay dividends on its common stock and therefore has used a dividend yield of zero in determining the fair value of its awards. The option forfeiture rate assumption used by the Company is based primarily on the Company’s historical option forfeiture patterns. The Company recognizes compensation expense of a restricted stock award over its respective vesting period based on the fair value of the award on the grant date, net of estimated forfeitures.

The Company recognized $8.8 million, $7.3 million, and $4.3 million in stock-based compensation expense during fiscal 2015, 2014, and 2013, respectively. Unrecognized stock-based compensation expense, net of estimated forfeitures, is $8.3 million for the year ended December 31, 2015. The Company expects this expense to be recognized over a one-year period for performance awards and a one to four-year period for nonperformance awards.

F-27

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

12. Income Taxes

The provision (benefit) for income taxes consists of the following (in thousands):

	Year Ended December 31,
	2015		2014		2013
Current:
Federal	$	—	$	—	$	(5,411	)
State		900		719		377
Deferred:
Federal		—		—		6,251
State		—		—		4,542
	$	900	$	719	$	5,759

The provision (benefit) for income taxes differed from the amounts of income tax provision (benefit) determined by applying the U.S. federal statutory income tax rate to income before provision (benefit) for income taxes as a result of the following (in thousands):

	Year Ended December 31,
	2015			2014			2013
Tax (benefit) provision at federal statutory rates	$	(4,515	)	$	(7,958	)	$	(3,653	)
State income tax expense, net of federal effects		64			(90	)		401
Federal and state income tax return true up		—			—			325
State effective rate changes		—			6			(20	)
Change in deferred tax asset valuation allowance		4,986			8,456			8,810
Other		365			305			(104	)
	$	900		$	719		$	5,759

A summary of the Company’s deferred tax assets and liabilities, are as follows (in thousands):

	December 31,
	2015			2014
Deferred tax assets:
Deferred gains on sale/leaseback transactions	$	6,176		$	7,027
Net operating loss carryforward (expiring up to 2032)		15,144			12,556
Compensation costs		1,804			972
Investments in unconsolidated joint ventures		—			—
Capital loss carryforward		—			—
Other		2,802			1,806
Total deferred tax assets		25,926			22,361
Valuation Allowance		(22,252	)		(17,266	)
Total deferred tax assets, net		3,674			5,095
Deferred tax liabilities:
Depreciation and amortization		(3,674	)		(5,095	)
Total deferred tax assets, net	$	—		$	—
Current deferred tax assets, net	$	—		$	460
Long-term deferred tax (liabilities) assets, net		—			(460	)
Total deferred tax assets, net	$	—		$	—

F-28

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Income taxes are computed using the asset and liability method and current income taxes are recorded based on amounts refundable or payable in the current year. Deferred income taxes are recorded based on the estimated future tax effects of loss carryforwards and temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which we expect those carryforwards and temporary differences to be recovered or settled. Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income. Based upon this evaluation, a valuation allowance has been recorded to reduce the Company’s net deferred tax assets to the amount that is more likely than not to be realized. A significant component of objective evidence evaluated was the cumulative loss incurred by the Company over the past four fiscal years. Such objective evidence severely limits the ability to consider other subjective evidence such as the Company’s ability to generate sufficient taxable income in future periods to fully recover the deferred tax assets. However, in the event that we were to determine that it would be more likely than not that the Company would realize the benefit of deferred tax assets in the future in excess of their net recorded amounts, adjustments to deferred tax assets would increase net income in the period we made such a determination. The benefits of the net deferred tax assets might not be realized if actual results differ from expectations.

As of December 31, 2015, the Company has Federal and State Net Operating Loss (“NOL”) carryforwards of $34.7 million and $63.3 million and related deferred tax assets of $11.7 million and $3.1 million, respectively, and a Federal Alternative Minimum Tax Credit carryforward of $0.3 million. If not used, the Federal NOL will expire during fiscal 2033 to 2035 and state NOL’s will expire during fiscal 2016 to 2035. Additionally, the Company has a Federal NOL carryforward of $10.4 million related to the excess tax benefits associated with stock-based compensation and stock option exercises. The benefit of this NOL will be recognized as an increase to additional paid-in capital at the point when such NOL provides cash benefit to the Company.

The effective tax rates for fiscal 2015 and 2014 differ from the statutory tax rates due to state income taxes, permanent tax differences, and changes in the deferred tax asset valuation allowance. The Company is impacted by the Texas Margin Tax (“TMT”), which effectively imposes tax on modified gross revenues for communities within the State of Texas. During fiscal 2015 the Company consolidated 37 Texas communities and during fiscal 2014 the Company consolidated 36 Texas communities and the TMT increased the overall provision for income taxes. The Company is generally no longer subject to federal and state tax audits for years before 2012.

13. Employee Benefit Plans

The Company has a 401(k) salary deferral plan (the “Plan”) in which all employees of the Company meeting minimum service and age requirements are eligible to participate. Contributions to the Plan are in the form of employee salary deferrals, which are subject to employer matching contributions of 50% of up to 4% of the employee’s annual salary. The Company’s contributions are funded semi-monthly to the Plan administrator. Matching contributions of $0.5 million were contributed to the Plan in each of fiscal 2015 and 2014 and $0.4 million in fiscal 2013. The Company incurred administrative expenses related to the Plan of $20,900, $15,000, and $15,300 in fiscal 2015, 2014, and 2013, respectively.

14. Contingencies

The Company has claims incurred in the normal course of its business. Most of these claims are believed by management to be covered by insurance, subject to normal reservations of rights by the insurance companies and possibly subject to certain exclusions in the applicable insurance policies. Whether or not covered by insurance, these claims, in the opinion of management, based on advice of legal counsel, should not have a material effect on the consolidated financial statements of the Company if determined adversely to the Company.

F-29

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

15. Fair Value of Financial Instruments

The carrying amounts and fair values of financial instruments at December 31, 2015 and 2014 are as follows (in thousands):

	2015				2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	56,087	$	56,087	$	39,209	$	39,209
Restricted cash		13,159		13,159		12,241		12,241
Notes payable		777,116		724,769		646,600		647,449

The following methods and assumptions were used in estimating its fair value disclosures for financial instruments:

Cash and cash equivalents and Restricted cash:    The carrying amounts reported in the balance sheet for cash and cash equivalents and restricted cash equal fair value, which represent level 1 inputs as defined in the accounting standards codification.

Notes payable:    The fair value of notes payable is estimated using discounted cash flow analysis, based on current incremental borrowing rates for similar types of borrowing arrangements, which represent level 2 inputs as defined in the accounting standards codification.

The estimated fair value of these assets and liabilities could be affected by market changes and this effect could be material.

16. Allowance for Doubtful Accounts

The components of the allowance for doubtful accounts are as follows (in thousands):

	December 31,
	2015			2014			2013
Balance at beginning of year	$	2,321		$	1,900		$	1,825
Provision for bad debts, net of recoveries		1,192			717			497
Write-offs and other		(325	)		(296	)		(422	)
Balance at end of year	$	3,188		$	2,321		$	1,900

17. Leases

The Company currently leases 50 senior living communities from certain real estate investment trusts (“REITs”). The lease terms are generally for 10-15 years with renewal options for 5-20 years at the Company’s option. Under these lease agreements, the Company is responsible for all operating costs, maintenance and repairs, insurance and property taxes.

F-30

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes each of the Company’s facility lease agreements as of December 31, 2015 (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	%	$	9.5		$	4.6
Ventas	October 18, 2005		1		19.5	(4) (Two five-year renewals)		8	%		0.3			—
Ventas	June 8, 2006		1		19.1	(4) (Two five-year renewals)		8	%		0.6			—
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											15.1			37.5
Accumulated amortization through December 31, 2015											(7.4	)		—
Accumulated deferred gains / lease concessions recognized through December 31, 2015											—			(20.2	)
Net lease acquisition costs / deferred gains / lease concessions as of December 31, 2015										$	7.7		$	17.3

(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 and modification 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 17, 2015, the Company executed amendments to the master lease agreements with Ventas to facilitate up to $24.5 million of leasehold improvements for 10 of the leased communities and extend the lease terms through September 30, 2025, 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 leased communities with HCP to facilitate up to $3.3 million of leasehold improvements for

F-31

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

one of the leased communities and extend the respective lease terms through October 31, 2020, with two 10-year renewal extensions available at the Company’s option.

(6) On April 24, 2015, the Company exercised its right to extend the lease term with HCP through April 30, 2026, with one 10-year renewal extension remaining available at the Company’s option.

Ventas

As of December 31, 2015, the Company leased 11 senior living communities from Ventas, Inc. (“Ventas”). During the second quarter of fiscal 2015, the Company executed amendments to the master lease agreements with Ventas to facilitate up to $24.5 million of leasehold improvements for 10 communities within the Ventas lease portfolio and extend the lease terms until September 30, 2025, with two five-year renewal extension available at the Company’s option. The initial lease rates under each of the Ventas Lease Agreements range from 6.75% to 8% and are subject to certain conditional escalation clauses which will be recognized when probable or incurred. The Company incurred $11.4 million in lease acquisition and modification costs related to the Ventas Lease Agreements. These deferred lease acquisition and modification costs are being amortized over the lease terms and are included in facility lease expense in the Company’s Consolidated Statement of Operations and Comprehensive loss. The Company accounts for nine of the Ventas Lease Agreements as an operating lease and two as a Capital lease and financing obligation.

Effective June 27, 2012, the Company closed a lease modification transaction with Ventas which resulted in the Company exchanging two of its owned communities for one of the communities in the existing Ventas lease portfolio and simultaneously leasing back the two communities exchanged (the “Ventas Lease Transaction”). This transaction was the result of negotiations for a solution to the anticipation of the Company not meeting certain lease coverage ratio requirements for its lease portfolio of ten properties with Ventas. The two communities previously owned by the Company are located in East Lansing, Michigan (the “East Lansing Community”) and Raleigh, North Carolina (the “Raleigh Community”) and were exchanged for a community located in Merrillville, Indiana (the “Towne Centre Community”). All three communities continue to be operated by the Company. In conjunction with this transaction, Ventas assumed approximately $18.3 million of existing mortgage debt from Berkadia and the Company received the Towne Centre Community unencumbered. All of the leased communities in the Ventas lease portfolio were modified to be coterminous with the East Lansing and Raleigh Community leases expiring on September 30, 2020, with two 5-year renewal extensions available at the Company’s option, eliminate property-level lease covenants, and contain substantially similar terms and conditions. These leases were re-evaluated by the Company at the modification date and continue to be treated as operating leases. Under the terms of the original lease agreements with Ventas, the Company had previously deposited additional cash collateral of approximately $3.4 million which was returnable to the Company once certain performance targets were reached. However, due to the rebalanced lease portfolio meeting the lease coverage ratio requirements, the Company negotiated the return of these deposits as a condition to the lease modification. Additionally, due to the extension of the lease terms for the Ventas lease portfolio to fiscal 2020, the rights of Ventas to reset the underlying values of the leased communities were deferred for five years.

Pursuant to ASC 840, Leases, the Company performed a sale/leaseback analysis to determine whether the East Lansing Community and Raleigh Community could be removed from its Consolidated Balance Sheets. Based upon the analysis performed, the Company concluded certain aspects of the lease modification would be considered forms of “continuing involvement” which precludes the Company from derecognizing these assets from its Consolidated Balance Sheets under sale/leaseback accounting criteria. Therefore, the Company recorded financing obligations equal to the fair market value of the communities exchanged and the mortgage debt assumed by Ventas. At the end of the lease term, including exercise of any renewal options, the net remaining financing obligation less the net carrying value of the leased assets will be recognized as a non-cash gain on sale of the East Lansing Community and Raleigh Community. Rental payments under these leases will not be reflected as a component of facility lease expense but will be recognized as a reduction of the financing obligation and interest expense based upon the Company’s incremental borrowing rate at the time the transaction was

F-32

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

closed. As a result of this transaction, the Company recorded additions to property and equipment of approximately $13.2 million and other assets, primarily consisting of lease intangibles, of approximately $11.8 million within the Company’s Consolidated Balance Sheets which will be depreciated or amortized over the estimated useful lives. The additions to property and equipment were reduced by approximately $4.9 million which represented the unamortized portion of the deferred gain previously recognized by the Company when the Towne Centre Community had been sold in fiscal 2006. Lease intangibles consist of the fair value of in-place leases associated with the Towne Centre Community and the fair value attributable to Ventas deferring its right to reset the underlying values of the lease portfolio five years until fiscal 2020.

HCP

As of December 31, 2015, the Company leased 15 senior living communities from HCP, Inc. (“HCP”). During the fourth quarter of fiscal 2013, the Company executed an amendment to the master lease agreement with HCP to facilitate up to $3.3 million of leasehold improvements for one community within the HCP lease portfolio and extend the initial lease terms for nine communities until October 31, 2020, with two 10-year renewal extensions available at the Company’s option. During the second quarter of fiscal 2015, the Company exercised its right to extend the lease term with HCP for the remaining six communities in the HCP lease portfolio until April 30, 2026, with one 10-year renewal extension available at the Company’s option. The initial lease rates under the HCP Lease Agreements range from 7.25% to 8% and are subject to certain conditional escalation clauses, which will be recognized when probable or incurred. The Company incurred $1.6 million in lease acquisition and modification costs related to the HCP Lease Agreements. These deferred lease acquisition and modification costs are being amortized over the lease terms and are included in facility lease expense in the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company accounts for each of the HCP Lease Agreements as an operating lease.

HCN

As of December 31, 2015, the Company leased 24 senior living communities from Welltower, Inc., formerly Health Care REIT, Inc. (“HCN”). The HCN Lease Agreements each have an initial term of 15 years, with one 15-year renewal extension available at the Company’s option. The initial lease rates under the HCN Lease Agreements range from 7.25% to 8.5% and are subject to certain conditional escalation clauses, which will be recognized when probable or incurred. The initial terms on the HCN Lease Agreements expire on various dates through April 2026. The Company incurred $2.1 million in lease acquisition costs related to the HCN Lease Agreements. These deferred lease acquisition costs are being amortized over the lease terms and are included in facility lease expense in the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company accounts for each of the HCN Lease Agreements as an operating lease.

Facility lease expense in the Company’s Consolidated Statements of Operations and Comprehensive Loss includes rent expense plus amortization expense relating to leasehold acquisition costs offset by the amortization of deferred gains and lease incentives. The Company leases its corporate headquarters in Dallas, Texas, and an office in New York City and has various lease contracts for a duration of 5 years or less on automobiles, buses and office equipment. The lease on the corporate headquarters currently expires on September 30, 2020.

F-33

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company incurred $62.8 million, $60.9 million, and $58.8 million in lease expense during fiscal 2015, 2014, and 2013, respectively. Future minimum lease commitments as of December 31, 2015, are as follows (in thousands):

2016	$	65,135
2017		65,092
2018		64,998
2019		64,939
2020		62,651
Thereafter		250,477
	$	573,292

At December 31, 2015 and 2014, the Company had gross deferred lease costs of $15.1 million and $15.0 million, respectively. Accumulated amortization at December 31, 2015 and 2014 was $7.4 million and $6.0 million, respectively, and amortization expense is expected to be approximately $1.5 million in each of the next five fiscal years. There are various financial covenants and other restrictions in the Company’s lease agreements. The Company was in compliance with all of its lease covenants at December 31, 2015 and 2014.

18. Quarterly Financial Information (Unaudited)

The following table presents certain unaudited quarterly financial information for each of the four quarters ended December 31, 2015 and 2014. 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.

	2015 Calendar Quarters
	First			Second			Third		Fourth
	(In thousands, except per share amounts)
Total revenues	$	98,640		$	101,588		$	104,420	$	107,529
Income from operations		3,718			3,680			5,676		5,761
Net (loss) income and comprehensive (loss) income		(6,039	)		(5,166	)		2,871		(5,950	)
Net (loss) income per share, basic	$	(0.21	)	$	(0.18	)	$	0.10	$	(0.21	)
Net (loss) income per share, diluted	$	(0.21	)	$	(0.18	)	$	0.10	$	(0.21	)
Weighted average shares outstanding, basic		28,565			28,705			28,732		28,749
Weighted average shares outstanding, fully diluted		28,565			28,705			28,733		28,749

	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

F-34

CAPITAL SENIOR LIVING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

19. Subsequent Events

Effective February 16, 2016, the Company closed the acquisition of two senior living communities located in Pensacola, Florida, for approximately $48.0 million. The communities consist of 179 assisted living units. The Company obtained financing from Protective Life for $35.0 million of the acquisition price at a fixed rate of 4.38% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources. The Company has not yet completed its initial purchase price allocation for this transaction.

Effective January 26, 2016, the Company closed the acquisition of three senior living communities located in Colby, Park Falls, and Wisconsin Rapids, Wisconsin, for approximately $16.8 million. The communities consist of 138 assisted living units. The Company obtained financing from Protective Life for $11.3 million of the acquisition price at a fixed rate of 4.50% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources. The Company has not yet completed its initial purchase price allocation for this transaction.

F-35

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Capital Senior Living Corporation

We have audited Capital Senior Living Corporation’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Capital Senior Living Corporation’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Capital Senior Living Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Consolidated Balance Sheets of Capital Senior Living Corporation as of December 31, 2015 and 2014, and the related consolidated statements of operations and comprehensive loss, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2015, and our report dated February 26, 2016, expressed an unqualified opinion thereon.

/s/    Ernst & Young LLP

Dallas, Texas

February 26, 2016

F-36

INDEX TO EXHIBITS

The following documents are filed as a part of this report. Those exhibits previously filed and incorporated herein by reference are identified below. Exhibits not required for this report have been omitted.

Exhibit Number		Description
3.1	—	Amended and Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to the Registration Statement No. 333-33379 on Form S-1/A filed by the Company with the Securities and Exchange Commission on September 8, 1997.)
3.1.1	—	Amendment to Amended and Restated Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1999, filed by the Company with the Securities and Exchange Commission.)
3.2	—	Second Amended and Restated Bylaws of the Registrant (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on March 8, 2013.)
4.1	—	1997 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation, as amended (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8, filed on December 3, 1999, by the Company with Securities and Exchange Commission.)
4.2	—	2007 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation. (Incorporated by reference to Exhibit 4.6 to the Company’s Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on May 31, 2007.)
4.3	—	First Amendment to 2007 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation. (Incorporated by reference to Exhibit 4.7 to the Company’s Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on May 31, 2007.)
4.4	—	Amended and Restated Second Amendment to the 2007 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation, as amended. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on May 22, 2015.)
4.5	—	Rights Agreement, dated as of February 25, 2010, by and between Capital Senior Living Corporation and Mellon Investor Services LLC, including all exhibits thereto (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on February 26, 2010).
4.6	—	Form of Certificate of Designation of Series A Junior Participating Preferred Stock, par value $0.01 per share (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K on February 26, 2010).
4.7	—	Form of Right Certificate (included as Exhibit B to the Rights Agreement, which is Exhibit 4.4 hereto, as amended pursuant to the First Amendment to Rights Agreement, which is Exhibit 4.8 hereto, and incorporated herein by reference).
4.8	—	Form of Summary of Rights (included as Annex A to the First Amendment to Rights Agreement, which is Exhibit 4.8 hereto, and incorporate herein by reference).
4.9	—	First Amendment to Rights Agreement, dated as of March 5, 2013, by and between the Company and Computershare Shareowner Services LLC (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on March 8, 2013.)
10.1	—	Form of Stock Option Agreement (Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-8, filed on December 3, 1999, by the Company with Securities and Exchange Commission.)

E-1

Exhibit Number		Description
10.2	—	Employment Agreement, dated as of November 1, 1996, by and between Capital Senior Living Corporation and Lawrence A. Cohen (Incorporated by reference to Exhibit 10.11 from the Registration Statement No. 333-33379 on Form S-1 filed by the Company with the Securities and Exchange Commission.)
10.3	—	Employment Agreement, dated as of November 26, 1996, by and between Capital Senior Living, Inc. and David R. Brickman (Incorporated by reference to Exhibit 10.12 to the Registration Statement No. 333-33379 on Form S-1 filed by the Company with the Securities and Exchange Commission.)
10.4	—	Employment Agreement, dated as of November 26, 1996, by and between Capital Senior Living, Inc. and Keith N. Johannessen (Incorporated by reference to Exhibit 10.13 from the Registration Statement No. 333-33379 on Form S-1 filed by the Company with the Securities and Exchange Commission.
10.5	—	Agreement of Limited Partnership of Triad Senior Living II, L.P. dated September 23, 1998 (Incorporated by reference to Exhibit 10.57 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998, filed by the Company with the Securities and Exchange Commission.)
10.6	—	Agreement of Limited Partnership of Triad Senior Living III, L.P. dated November 10, 1998 (Incorporated by reference to Exhibit 10.58 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998, filed by the Company with the Securities and Exchange Commission.)
10.7	—	Agreement of Limited Partnership of Triad Senior Living IV, L.P. dated December 22, 1998 (Incorporated by reference to Exhibit 10.59 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998, filed by the Company with the Securities and Exchange Commission.)
10.8	—	Employment Agreement, dated May 26, 1999, by and between Lawrence A. Cohen and Capital Senior Living Corporation (Incorporated by reference to the Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1999, filed by the Company with the Securities and Exchange Commission.)
10.9	—	Second Amended and Restated Agreement of Limited Partnership of Triad Senior Living I, L.P. (Incorporated by reference to the Exhibit 10.78 to the Company’s Annual Report on Form 10-K, dated March 30, 2000, filed by the Company with the Securities and Exchange Commission.)
10.9.1	—	Amendment No. 1 to Second Amended and Restated Agreement of Limited Partnership of Triad Senior Living I, LP. (Incorporated by reference to the Exhibit 10.10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2002, filed by the Company with the Securities and Exchange Commission.)
10.10	—	First Amendment to Triad II Partnership Agreement (Incorporated by reference to Exhibit 10.26 to the Company’s Current Report on Form 8-K, dated August 15, 2000, filed by the Company with the Securities and Exchange Commission.)
10.11	—	Support Agreement dated as of September 11, 2002 by and between Capital Senior Living, Inc., Triad I, Triad II, Triad III, Triad IV and Triad V. (Incorporated by reference to Exhibit 10.102 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2002, filed by the Company with the Securities and Exchange Commission.)
10.12	—	Second Amendment to the Employment Agreement of Lawrence A. Cohen, dated January 27, 2003 by and between Lawrence A. Cohen and Capital Senior Living Corporation (Incorporated by reference to Exhibit 10.106 to the Company’s Annual Report on Form 10-K, dated March 26, 2003, filed by the Company with the Securities and Exchange Commission.)

E-2

Exhibit Number		Description
10.13	—	First Amendment to the Employment Agreement of Keith N. Johannessen, dated January 17, 2003 by and between Keith N. Johannessen and Capital Senior Living Corporation (Incorporated by reference to Exhibit 10.107 to the Company’s Annual Report on Form 10-K, dated March 26, 2003, filed by the Company with the Securities and Exchange Commission.)
10.14	—	Second Amendment to the Employment Agreement of David R. Brickman, dated January 27, 2003 by and between David R. Brickman and Capital Senior Living Corporation (Incorporated by reference to Exhibit 10.109 to the Company’s Annual Report on Form 10-K, dated March 26, 2003, filed by the Company with the Securities and Exchange Commission.)
10.15	—	Amended and Restated Draw Promissory Note, dated February 1, 2003, of Triad Senior Living I, L.P. in favor of Capital Senior Living Properties, Inc. (Incorporated by reference to Exhibit 10.110 to the Company’s Annual Report on Form 10-K, dated March 26, 2003, filed by the Company with the Securities and Exchange Commission.)
10.15.1	—	Amended and Restated Draw Promissory Note (Fairfield), dated February 1, 2003, of Triad Senior Living II, L.P. in favor of Capital Senior Living Properties, Inc. (Incorporated by reference to Exhibit 10.111.1 to the Company’s Annual Report on Form 10-K, dated March 26, 2003, filed by the Company with the Securities and Exchange Commission.)
10.15.2	—	Amended and Restated Draw Promissory Note (Oklahoma City), dated February 1, 2003, of Triad Senior Living II, L.P. in favor of Capital Senior Living Properties, Inc. (Incorporated by reference to Exhibit 10.111.2 to the Company’s Annual Report on Form 10-K, dated March 26, 2003, filed by the Company with the Securities and Exchange Commission.)
10.15.3	—	Amended and Restated Draw Promissory Note (Plano), dated February 1, 2003, of Triad Senior Living II, L.P. in favor of Capital Senior Living Properties, Inc. (Incorporated by reference to Exhibit 10.111.3 to the Company’s Annual Report on Form 10-K, dated March 26, 2003, filed by the Company with the Securities and Exchange Commission.)
10.16	—	Amended and Restated Draw Promissory Note, dated February 1, 2003, of Triad Senior Living III, L.P. in favor of Capital Senior Living Properties, Inc. (Incorporated by reference to Exhibit 10.112 to the Company’s Annual Report on Form 10-K, dated March 26, 2003, filed by the Company with the Securities and Exchange Commission.)
10.17	—	Amended and Restated Draw Promissory Note, dated February 1, 2003, of Triad Senior Living IV, L.P. in favor of Capital Senior Living Properties, Inc. (Incorporated by reference to Exhibit 10.113 to the Company’s Annual Report on Form 10-K, dated March 26, 2003, filed by the Company with the Securities and Exchange Commission.)
10.18	—	Amended and Restated Draw Promissory Note, dated February 1, 2003, of Triad Senior Living V, L.P. in favor of Capital Senior Living Properties, Inc. (Incorporated by reference to Exhibit 10.114 to the Company’s Annual Report on Form 10-K, dated March 26, 2003, filed by the Company with the Securities and Exchange Commission.)
10.19	—	Master Lease Agreement, dated June 30, 2005, between Ventas Amberleigh, LLC and Capital Senior Management 2, Inc. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A, dated June 30, 2005, filed by the Company with the Securities and Exchange Commission on July 11, 2005.)
10.20	—	Schedule identifying substantially identical agreements to Exhibit 10.63 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K/A, dated June 30, 2005, filed by the Company with the Securities and Exchange Commission on July 11, 2005.)
10.21	—	Loan Agreement, dated July 18, 2005, by Capital Senior Living Peoria, LLC and GMAC Commercial Mortgage Bank (Incorporated by reference to the Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated July 18, 2005, filed by the Company with the Securities and Exchange Commission.)

E-3

Exhibit Number		Description
10.22	—	Schedule identifying substantially identical agreements to Exhibit 10.65 (Incorporated by reference to the Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated July 18, 2005, filed by the Company with the Securities and Exchange Commission.)
10.23	—	Master Lease Agreement, dated October 18, 2005, between Ventas Georgetowne, LLC and Capital Senior Management 2, Inc. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated October 18, 2005, filed by the Company with the Securities and Exchange Commission.)
10.24	—	Schedule identifying substantially identical agreements to Exhibit 10.70 (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, dated March 7, 2006, filed by the Company with the Securities and Exchange Commission.)
10.25	—	Master Lease Agreement, dated May 31, 2006, between subsidiaries of the Company and HCP (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated May 31, 2006, filed by the Company with the Securities and Exchange Commission.)
10.26	—	Lease, dated May 31, 2006, between subsidiaries of the Company and HCP regarding the Crosswood Oaks Facility in Citrus Heights, California (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated May 31, 2006, filed by the Company with the Securities and Exchange Commission.)
10.27	—	Schedule identifying substantially identical agreements to Exhibit 10.73 (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, dated May 31, 2006, filed by the Company with the Securities and Exchange Commission.)
10.28	—	Multifamily Note, dated June 9, 2006, executed by Triad Senior Living II, L.P. in favor of Capmark. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated June 9, 2006, filed by the Company with the Securities and Exchange Commission.)
10.29	—	Schedule identifying substantially identical agreements to Exhibit 10.75 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated June 9, 2006, filed by the Company with the Securities and Exchange Commission.)
10.30	—	Multifamily Deed of Trust, Assignment of Rents and Security Agreement and Fixture Filing, dated June 9, 2006, by Triad Senior Living II, L.P. to Ed Stout, as trustee, for the benefit of Capmark. (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, dated June 9, 2006, filed by the Company with the Securities and Exchange Commission.)
10.31	—	Loan Agreement, dated June 20, 2006, by and between Triad Senior Living III, L.P. and Capmark Bank. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated June 20, 2006, filed by the Company with the Securities and Exchange Commission.)
10.32	—	Multifamily Note dated May 3, 2007 executed by Triad Senior Living III, L.P. in favor of Capmark Bank (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated March 3, 2007, filed by the Company with the Securities and Exchange Commission.)
10.33	—	Schedule identifying substantially identical agreements to Exhibit 10.3 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated March 3, 2007, filed by the Company with the Securities and Exchange Commission.)
10.34	—	Multifamily Deed of Trust, Assignment of Rents and Security Agreement and Fixture Filing dated May 3, 2007 by Triad Senior Living III, L.P. in favor of Chicago Title Insurance Company, as trustee for the benefit of Capmark Bank. (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, dated March 3, 2007, filed by the Company with the Securities and Exchange Commission.)

E-4

Exhibit Number		Description
10.35	—	Schedule identifying substantially identical agreements to Exhibit 10.5. (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, dated March 3, 2007, filed by the Company with the Securities and Exchange Commission.)
10.36	—	Fourth Amendment to the Employment Agreement of Lawrence A. Cohen. (Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 20, 2010.)
10.37	—	Second Amendment to the Employment Agreement of Keith N. Johannessen. (Incorporated by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 20, 2010.)
10.38	—	Master Lease Agreement, dated as of September 10, 2010, between Capital Texas S, LLC and the Landlord parties thereto. (Incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 16, 2010.)
10.39	—	Employment Agreement, dated July 22, 2010, by and between Capital Senior Living, Inc. and Joseph G. Solari (Incorporated by reference to the Exhibit 10.50 to the Company’s Annual Report on Form 10-K, dated March 12, 2012, filed by the Company with the Securities and Exchange Commission.)
10.40	—	Employment Agreement, dated April 25, 2014, by and between Capital Senior Living, Inc. and Carey P. Hendrickson (Incorporated by reference to the Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated April 28, 2014, filed by the Company with the Securities and Exchange Commission.)
10.41	—	Form of Outside Directors Restricted Share Unit Award Under the 2007 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation. (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed by the Company with the Securities and Exchange Commission on August 5, 2015.)
10.42	—	Second Amendment to Employment Agreement of Joseph G. Solari, dated August 31, 2013 by and between Capital Senior Living Corporation and Joseph G. Solari. (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed by the Company with the Securities and Exchange Commission on May 6, 2015.)
*21.1	—	Subsidiaries of the Company
*23.1	—	Consent of Ernst & Young LLP
*31.1	—	Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)
*31.2	—	Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)
*32.1	—	Certification of Lawrence A. Cohen pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*32.2	—	Certification of Carey P. Hendrickson pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*101.INS	—	XBRL Instance Document
*101.SCH	—	XBRL Taxonomy Extension Schema Document
*101.CAL	—	XBRL Taxonomy Extension Calculation Linkbase Document
*101.LAB	—	XBRL Taxonomy Extension Label Linkbase Document
*101.PRE	—	XBRL Taxonomy Extension Presentation Linkbase Document
*101.DEF	—	XBRL Taxonomy Extension Definition Linkbase Document

* Filed herewith.

E-5

EX-21.1

EXHIBIT 21.1

SUBSIDIARIES

Name	Jurisdiction of Organization	Percentage Ownership
Capital Senior Living, Inc.	Texas		100%
Capital Senior Development, Inc.	Texas		100%
Capital Senior Management 1, Inc.	Texas		100%
Capital Senior Management 2, Inc.	Texas		100%
Capital Senior Management AC, Inc.	Delaware		100%
Capital Senior East Lansing, LLC	Delaware		100%
Capital Senior Peoria, LLC	Delaware		100%
Capital Senior Raleigh, LLC	Delaware		100%
Capital Senior Winston-Salem, LLC	Delaware		100%
Capital Senior Living Properties, Inc.	Texas		100%
Capital Senior Living Properties 2, Inc.	Texas		100%
Capital Senior Living Properties 2, — Atrium of Carmichael, Inc.	Delaware		100%
Capital Senior Living Properties 2, — Crosswood Oaks, Inc.	Delaware		100%
Capital Senior Living Properties 2 — Gramercy, Inc.	Delaware		100%
Capital Senior Living Properties 2, — Heatherwood, Inc.	Delaware		100%
Capital Senior Living Properties 2 — NHPT, Inc.	Delaware		100%
Capital Senior Living Properties 2, — Tesson Heights, Inc.	Delaware		100%
Capital Senior Living Properties 2 — Veranda Club, Inc.	Delaware		100%
Capital Senior Living Properties 3, Inc.	Delaware		100%
Capital Senior Living Properties 4, Inc.	Delaware		100%
Capital Senior Living Properties 5, Inc.	Delaware		100%
Capital Senior Living Properties 6, Inc.	Delaware		100%
Capital Senior Living A, Inc.	Delaware		100%
Capital Senior Living, ILM-A, Inc.	Delaware		100%
Capital Senior Living P-B, Inc.	Delaware		100%
Capital Senior Living ILM-B, Inc.	Delaware		100%
Capital Senior Living P-C, Inc.	Delaware		100%
Capital Senior Living ILM-C, Inc.	Delaware		100%
Capital Senior Living Acquisition, LLC	Delaware		100%
CGI Management, Inc.	Delaware		100%
Quality Home Care, Inc.	Indiana		100%
Triad Senior Living I, LP	Texas		100%
Triad Senior Living II, LP	Texas		100%
Triad Senior Living III, LP	Texas		100%
Triad Senior Living IV, LP	Texas		100%
Triad Senior Living V, LP	Texas		100%
Waterford Senior Living, Inc.	Texas		100%
Capital Senior Management S, Inc.	Texas		100%
Capital Midwest, LLC	Delaware		100%
Capital Spring Meadows, LLC	Delaware		100%
Capital Texas S, LLC	Delaware		100%
CSL CE Arlington, LLC	Delaware		100%
CSL CE College Station, LLC	Delaware		100%
CSL CE Conroe, LLC	Delaware		100%
CSL CE Corpus, LLC	Delaware		100%
CSL CE Stephenville, LLC	Delaware		100%
CSL RE Corpus, LLC	Delaware		100%
CSL S Cleburne, LLC	Delaware		100%
CSL S Conroe, LLC	Delaware		100%
CSL S Longview, LLC	Delaware		100%
CSL S Mansfield, LLC	Delaware		100%

CSL S McKinney, LLC	Delaware	100%
CSL S Nacogdoches, LLC	Delaware	100%
CSL S Palestine, LLC	Delaware	100%
CSL S Paris, LLC	Delaware	100%
CSL S Sherman, LLC	Delaware	100%
CSL S Tyler, LLC	Delaware	100%
CSL S Waxahachie, LLC	Delaware	100%
CSL S Weatherford, LLC	Delaware	100%
CSL 108th & Q, LLC	Delaware	100%
CSL Ames, LLC	Delaware	100%
CSL Ames Management, LLC	Delaware	100%
CSL Aspen Grove, LLC	Delaware	100%
CSL Aspen Grove Management, LLC	Delaware	100%
CSL Autumn Glen, LLC	Delaware	100%
CSL Autumn Glen Management, LLC	Delaware	100%
CSL Batesville, LLC	Delaware	100%
CSL Batesville Management, LLC	Delaware	100%
CSL Baytown, LLC	Delaware	100%
CSL Bridle Brook, LLC	Delaware	100%
CSL Canton GA, LLC	Delaware	100%
CSL Canton GA Management, LLC	Delaware	100%
CSL Chardon, LLC	Delaware	100%
CSL Charlestown, LLC	Delaware	100%
CSL Charlestown Management, LLC	Delaware	100%
CSL Columbus, LLC	Delaware	100%
CSL Dillon Pointe SC, LLC	Delaware	100%
CSL Dillon Pointe Management, LLC	Delaware	100%
CSL Elkhorn, LLC	Delaware	100%
CSL Elkhorn Management, LLC	Delaware	100%
CSL Esperanza Management, LLC	Delaware	100%
CSL Fitchburg, LLC	Delaware	100%
CSL Fitchburg Management, LLC	Delaware	100%
CSL Fort Wayne, LLC	Delaware	100%
CSL Fort Wayne Management, LLC	Delaware	100%
CSL Granbury, LLC	Delaware	100%
CSL Green Bay, LLC	Delaware	100%
CSL Green Bay Management, LLC	Delaware	100%
CSL Greenbriar, LLC	Delaware	100%
CSL Hamilton, LLC	Delaware	100%
CSL Harbor Court, LLC	Delaware	100%
CSL Harbor Court Management, LLC	Delaware	100%
CSL Hartford, LLC	Delaware	100%
CSL Hearth GP, LLC	Delaware	100%
CSL Heritage, LLC	Delaware	100%
CSL Heritage AL, LLC	Delaware	100%
CSL Heritage Management, LLC	Delaware	100%
CSL Hunt Staffing, LLC	Delaware	100%
CSL Keystone Woods, LLC	Delaware	100%
CSL Kokomo, LLC	Delaware	100%
CSL Kokomo Management, LLC	Delaware	100%
CSL Laurelhurst NC, LLC	Delaware	100%
CSL LeaseCo, Inc.	Delaware	100%
CSL Levis Commons, LLC	Delaware	100%
CSL Libertyville, LLC	Delaware	100%
CSL Marion, LLC	Delaware	100%

CSL Miami, LLC	Delaware	100%
CSL Middletown, LLC	Delaware	100%
CSL Middletown Management, LLC	Delaware	100%
CSL Midwest GP, LLC	Delaware	100%
CSL Midwest I Management, LLC	Delaware	100%
CSL Miracle Hills, LLC	Delaware	100%
CSL Montclair, LLC	Delaware	100%
CSL Naperville, LLC	Delaware	100%
CSL North Pointe SC, LLC	Delaware	100%
CSL Ohio JV, LLC	Delaware	100%
CSL Oklahoma City, LLC	Delaware	100%
CSL Oshkosh, LLC	Delaware	100%
CSL Oshkosh Management, LLC	Delaware	100%
CSL Peachtree, LLC	Delaware	100%
CSL Peachtree Management, LLC	Delaware	100%
CSL Plainfield, LLC	Delaware	100%
CSL Plainfield Management, LLC	Delaware	100%
CSL Plymouth, LLC	Delaware	100%
CSL Plymouth Management, LLC	Delaware	100%
CSL Prestwick, LLC	Delaware	100%
CSL Remington, LLC	Delaware	100%
CSL Richmond Heights, LLC	Delaware	100%
CSL Riverbend IN, LLC	Delaware	100%
CSL Riverbend Management, LLC	Delaware	100%
CSL Roanoke, LLC	Delaware	100%
CSL Roanoke Management, LLC	Delaware	100%
CSL Shaker Heights, LLC	Delaware	100%
CSL Shreveport, LLC	Delaware	100%
CSL Summit, LLC	Delaware	100%
CSL Summit Place Management, LLC	Delaware	100%
CSL Summit Place SC, LLC	Delaware	100%
CSL Summit Point, LLC	Delaware	100%
CSL Summit Point Management, LLC	Delaware	100%
CSL Towne Centre, LLC	Delaware	100%
CSL Trumbull, LLC	Delaware	100%
CSL Van Dorn, LLC	Delaware	100%
CSL Village of Columbus, LLC	Delaware	100%
CSL Vintage, LLC	Delaware	100%
CSL Vintage Land, LLC	Delaware	100%
CSL Vintage Management, LLC	Delaware	100%
CSL Virginia Beach, LLC	Delaware	100%
CSL West Bend, LLC	Delaware	100%
CSL Whispering Pines, LLC	Delaware	100%
CSL Whitcomb House, LLC	Delaware	100%
CSL Whitcomb House Management, LLC	Delaware	100%
CSL White River, LLC	Delaware	100%
CSL Whitley Place Management, LLC	Delaware	100%
CSL Windermere, LLC	Delaware	100%
CSL Woodbridge, LLC	Delaware	100%
CSL Woodlands Management, LLC	Delaware	100%
CSL Wynnfield Crossing, LLC	Delaware	100%
HealthCare Properties Liquidating Trust	Delaware	57%

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:

(1) Registration Statement (Form S-3 No. 333-192128) of Capital Senior Living Corporation;

(2) Registration Statements (Form S-8 No. 333-92045 and Form S-8 No. 333-117821) pertaining to the 1997 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation; and

(3) Registration Statements (Form S-8 No. 333-143403 and Form S-8 No. 333-204351) pertaining to the 2007 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation;

of our reports dated February 26, 2016, with respect to the consolidated financial statements of Capital Senior Living Corporation and the effectiveness of internal control over financial reporting of Capital Senior Living Corporation, included in this Annual Report (Form 10-K) of Capital Senior Living Corporation for the year ended December 31, 2015.

/s/ Ernst & Young LLP

Dallas, Texas

February 26, 2016

EX-31.1

EXHIBIT 31.1

CAPITAL SENIOR LIVING CORPORATION

CERTIFICATIONS

I, Lawrence A. Cohen, certify that:

1. I have reviewed this annual report on Form 10-K of Capital Senior Living Corporation (“Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

/S/ LAWRENCE A. COHEN

Lawrence A. Cohen

Chief Executive Officer

February 26, 2016

EX-31.2

EXHIBIT 31.2

CAPITAL SENIOR LIVING CORPORATION

CERTIFICATIONS

I, Carey P. Hendrickson, certify that:

1. I have reviewed this annual report on Form 10-K of Capital Senior Living Corporation (“Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

/s/ CAREY P. HENDRICKSON

Carey P. Hendrickson

Senior Vice President

Chief Financial Officer

February 26, 2016

EX-32.1

EXHIBIT 32.1

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the filing of the Annual Report of Capital Senior Living Corporation (the “Company”) on Form 10-K for the twelve months ended December 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lawrence A. Cohen, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ LAWRENCE A. COHEN

Lawrence A. Cohen

Chief Executive Officer

February 26, 2016

EX-32.2

EXHIBIT 32.2

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the filing of the Annual Report of Capital Senior Living Corporation (the “Company”) on Form 10-K for the twelve months ended December 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Carey P. Hendrickson, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ CAREY P. HENDRICKSON

Carey P. Hendrickson

Senior Vice President

Chief Financial Officer

February 26, 2016

XML

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Feb. 19, 2016	Jun. 30, 2015
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Trading Symbol	CSU
Entity Registrant Name	CAPITAL SENIOR LIVING CORP
Entity Central Index Key	0001043000
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		29,412,484
Entity Public Float			$ 681.6

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 56,087	$ 39,209
Restricted cash	13,159	12,241
Accounts receivable, net	9,252	5,903
Accounts receivable from affiliates	2	5
Deferred taxes		460
Assets held for sale		35,761
Property tax and insurance deposits	14,398	12,198
Prepaid expenses and other	4,370	6,797
Total current assets	97,268	112,574
Property and equipment, net	890,572	747,613
Other assets, net	31,193	31,183
Total assets	1,019,033	891,370
Current liabilities:
Accounts payable	3,362	2,540
Accounts payable to affiliates		7
Accrued expenses	34,300	32,154
Notes payable of assets held for sale		14,847
Current portion of notes payable, net of deferred loan costs	13,634	32,538
Current portion of deferred income	16,059	14,603
Current portion of capital lease and financing obligations	1,257	1,054
Federal and state income taxes payable	111	219
Customer deposits	1,819	1,499
Total current liabilities	70,542	99,461
Deferred income	13,992	15,949
Capital lease and financing obligations, net of current portion	38,835	40,016
Deferred taxes		460
Other long-term liabilities	4,969	1,426
Notes payable, net of deferred loan costs and current portion	$ 754,949	$ 592,884
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value: Authorized shares - 15,000; no shares issued or outstanding
Common stock, $.01 par value: Authorized shares - 65,000; issued and outstanding shares 29,539 and 29,097 in 2015 and 2014, respectively	$ 299	$ 294
Additional paid-in capital	159,920	151,069
Retained deficit	(23,539)	(9,255)
Treasury stock, at cost - 350 shares in 2015 and 2014	(934)	(934)
Total shareholders' equity	135,746	141,174
Total liabilities and shareholders' equity	$ 1,019,033	$ 891,370

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	15,000,000	15,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	65,000,000	65,000,000
Common stock, shares issued	29,539,000	29,097,000
Common stock, shares outstanding	29,539,000	29,097,000
Treasury stock, shares	350,000	350,000

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Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenues:
Resident and health care revenue	$ 412,177	$ 380,400	$ 343,478
Affiliated management services revenue		415	797
Community reimbursement revenue		3,110	6,087
Total revenues	412,177	383,925	350,362
Expenses:
Operating expenses (exclusive of facility lease expense and depreciation and amortization expense shown below)	248,736	230,495	207,744
General and administrative expenses	20,351	19,622	20,238
Facility lease expense	61,213	59,332	56,986
Provision for bad debts	1,192	717	497
Stock-based compensation expense	8,833	7,262	4,322
Depreciation and amortization	53,017	49,487	43,238
Community reimbursement expense		3,110	6,087
Total expenses	393,342	370,025	339,112
Income from operations	18,835	13,900	11,250
Other income (expense):
Interest income	53	52	151
Interest expense	(35,732)	(31,261)	(23,767)
Write-off of deferred loan costs and prepayment premiums	(2,766)	(7,968)
Joint venture equity investment valuation gain		1,519
Gain on disposition of assets, net	6,225	784	1,454
Equity in earnings of unconsolidated joint ventures, net		105	133
Write-down of assets held for sale		(561)
Other income	1	23	34
Loss before provision for income taxes	(13,384)	(23,407)	(10,745)
Provision for income taxes	(900)	(719)	(5,759)
Net loss	$ (14,284)	$ (24,126)	$ (16,504)
Per share data:
Basic net loss per share	$ (0.50)	$ (0.83)	$ (0.58)
Diluted net loss per share	$ (0.50)	$ (0.83)	$ (0.58)
Weighted average shares outstanding - basic	28,688	28,301	27,815
Weighted average shares outstanding - diluted	28,688	28,301	27,815
Comprehensive loss	$ (14,284)	$ (24,126)	$ (16,504)

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Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]
Beginning Balance at Dec. 31, 2012	$ 168,594	$ 286	$ 137,867	$ 31,375	$ (934)
Beginning Balance, Shares at Dec. 31, 2012		28,218,000
Exercise of stock options	$ 3,159	$ 2	3,157
Exercise of stock options, Shares	246,930	247,000
Restricted stock awards	$ 4	$ 4
Restricted stock awards, Shares		380,000
Stock-based compensation	4,322		4,322
Excess tax benefits on stock options exercised	(1,625)		(1,625)
Net loss	(16,504)			(16,504)
Ending Balance at Dec. 31, 2013	157,950	$ 292	143,721	14,871	(934)
Ending Balance, Shares at Dec. 31, 2013		28,845,000
Exercise of stock options	$ 168		168
Exercise of stock options, Shares	13,000	13,000
Restricted stock awards	$ 2	$ 2
Restricted stock awards, Shares		239,000
Stock-based compensation	7,262		7,262
Excess tax benefits on stock options exercised	(82)		(82)
Net loss	(24,126)			(24,126)
Ending Balance at Dec. 31, 2014	141,174	$ 294	151,069	(9,255)	(934)
Ending Balance, Shares at Dec. 31, 2014		29,097,000
Exercise of stock options	$ 38	$ 1	37
Exercise of stock options, Shares	3,000	3,000
Restricted stock awards	$ 4	$ 4
Restricted stock awards, Shares		439,000
Stock-based compensation	8,833		8,833
Excess tax benefits on stock options exercised	(19)		(19)
Net loss	(14,284)			(14,284)
Ending Balance at Dec. 31, 2015	$ 135,746	$ 299	$ 159,920	$ (23,539)	$ (934)
Ending Balance, Shares at Dec. 31, 2015		29,539,000

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Operating Activities
Net loss	$ (14,284)	$ (24,126)	$ (16,504)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	53,017	49,487	43,238
Amortization of deferred financing charges	1,029	1,361	1,100
Amortization of deferred lease costs and lease intangibles	1,421	1,230	1,164
Deferred income	(677)	(616)	(1,666)
Deferred income taxes			10,793
Lease incentives	2,464
Write-off of deferred loan costs and prepayment premiums	2,766	7,968
Joint venture equity investment valuation gain		(1,519)
Gain on disposition of assets, net	(6,225)	(784)	(1,454)
Equity in earnings of unconsolidated joint ventures, net		(105)	(133)
Write-down of assets held for sale		561
Provision for bad debts	1,192	717	497
Stock-based compensation expense	8,833	7,262	4,322
Changes in operating assets and liabilities:
Accounts receivable	(2,931)	(2,868)	980
Accounts receivable from affiliates	3	411	337
Property tax and insurance deposits	(2,200)	(1,162)	406
Prepaid expenses and other	2,427	(192)	(1,847)
Other assets	(1,289)	(163)	(1,745)
Accounts payable	815	(1,267)	(3,166)
Accrued expenses	2,146	2,833	4,876
Federal and state income taxes receivable/payable	(108)	5,342	(1,222)
Deferred resident revenue	176	1,932	2,719
Customer deposits	320	10	(51)
Net cash provided by operating activities	48,895	46,312	42,644
Investing Activities
Capital expenditures	(42,430)	(18,742)	(13,562)
Cash paid for acquisitions	(162,460)	(160,105)	(150,391)
Proceeds from SHPIII/CSL Transaction		2,532
Proceeds from disposition of assets	43,463	796	1,460
Distributions from joint ventures		102	197
Net cash used in investing activities	(161,427)	(175,417)	(162,296)
Financing Activities
Proceeds from notes payable	250,944	300,820	140,237
Repayments of notes payable	(115,896)	(140,950)	(23,539)
Cash payments for capital lease and financing obligations	(978)	(971)	(871)
Increase in restricted cash	(918)	(816)	(1,246)
Cash proceeds from the issuance of common stock	42	170	3,163
Excess tax benefits on stock options exercised	(19)	(82)	(1,625)
Deferred financing charges paid	(3,765)	(3,468)	(1,593)
Net cash provided by financing activities	129,410	154,703	114,526
Increase (Decrease) in cash and cash equivalents	16,878	25,598	(5,126)
Cash and cash equivalents at beginning of year	39,209	13,611	18,737
Cash and cash equivalents at end of year	56,087	39,209	13,611
Cash paid during the year for:
Interest	33,642	28,856	21,953
Income taxes	1,039	$ 724	$ 702
Non-cash operating, investing, and financing activities:
Notes payable assumed by purchaser through disposition of assets	$ 6,764

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Organization

12 Months Ended

Dec. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

1. Organization

Capital Senior Living Corporation, a Delaware corporation (together with its subsidiaries, the “Company”), is one of the largest operators of senior living communities in the United States in terms of resident capacity. The Company owns, operates, develops and manages senior living communities throughout the United States. As of December 31, 2015, the Company operated 121 senior living communities in 23 states with an aggregate capacity of approximately 15,400 residents, including 71 senior living communities which the Company owned and 50 senior living communities that the Company leased. As of December 31, 2015, the Company also operated one home care agency. The accompanying consolidated financial statements include the financial statements of Capital Senior Living Corporation and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. The Company accounts for significant investments in unconsolidated companies, in which the Company has significant influence, using the equity method of accounting.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents. The Company has deposits in banks that exceed Federal Deposit Insurance Corporation insurance limits. Management believes that credit risk related to these deposits is minimal. Restricted cash consists of deposits required by certain lenders as collateral pursuant to letters of credit. The deposit must remain so long as the letter of credit is outstanding which is subject to renewal annually.

Long-Lived Assets

Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets. At each balance sheet date, the Company reviews the carrying value of its property and equipment to determine if facts and circumstances suggest that they may be impaired or that the depreciation period may need to be changed. The Company considers internal factors such as net operating losses along with external factors relating to each asset, including contract changes, local market developments, and other publicly available information. If an indicator of impairment is identified, the carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flows from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount the carrying value exceeds the fair market value, generally based on discounted cash flows, of the long-lived asset. The Company does not believe there are any indicators of impairment that would require an adjustment to the carrying value of the property and equipment or their remaining useful lives as of December 31, 2015 and 2014.

Assets Held for Sale

Assets are classified as held for sale when the Company has determined all of the held-for-sale criteria have been met. The Company determines the fair value, net of costs of disposal, of an asset on the date the asset is categorized as held for sale, and the asset is recorded at the lower of its fair value, net of cost of disposal, or carrying value on that date. The Company periodically reevaluates assets held for sale to determine if the assets are still recorded at the lower of fair value, net of cost of disposal, or carrying value. The fair values are generally determined based on market rates, industry trends and recent comparable sales transactions. The actual sales price of these assets could differ significantly from the Company’s estimates.

During the fourth quarter of fiscal 2014, the Company classified four senior living communities as held for sale and determined the assets had an aggregate fair value, net of cost of disposal, that exceeded the carrying values, using level 2 inputs as defined in the accounting standards codification, and a remeasurement write-down of approximately $0.6 million was recorded to adjust the carrying values of the assets held for sale to $35.8 million at December 31, 2014. The four senior living communities were sold during the first quarter of fiscal 2015 in a single transaction for its carrying value. There were no senior living communities classified as held for sale by the Company at December 31, 2015.

Investments in Unconsolidated Joint Ventures

The Company accounted for its investments in unconsolidated joint ventures under the equity method of accounting. The Company had not consolidated these joint venture interests because the Company had concluded that the other member of each joint venture had substantive kick-out rights or substantive participating rights. Under the equity method of accounting, the Company recorded its investments in the unconsolidated joint ventures at cost and adjusted such investments for its share of the earnings and losses of the joint ventures. On June 30, 2014, the Company acquired 100% of the member interests in these joint ventures. For additional information refer to Note 4, “Acquisitions.”

Off-Balance Sheet Arrangements

The Company had no material off-balance sheet arrangements at December 31, 2015.

Income Taxes

Income taxes are computed using the asset and liability method and current income taxes are recorded based on amounts refundable or payable in the current year. Deferred income taxes are recorded based on the estimated future tax effects of loss carryforwards and temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which we expect those carryforwards and temporary differences to be recovered or settled. Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income.

The Company evaluates uncertain tax positions through consideration of accounting and reporting guidance on criteria, measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better financial-statement comparability among different companies. The Company is required to recognize a tax benefit in its financial statements for an uncertain tax position only if management’s assessment is that its position is “more likely than not” (i.e., a greater than 50 percent likelihood) to be upheld on audit based only on the technical merits of the tax position. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as income tax expense.

Revenue Recognition

Resident and health care revenue is recognized at estimated net realizable amounts, based on historical experiences, due from residents in the period in which the rental and other services are provided. Additionally, substantially all community fees received from residents are non-refundable and are recorded initially by the Company as deferred revenue. The deferred amounts are amortized over the respective residents’ initial lease term which is consistent with the contractual obligation associated with the estimated stay of the resident.

Revenues from the Medicaid program accounted for approximately 5% of the Company’s revenue in fiscal 2015 and 4% of the Company’s revenue in each of fiscal 2014 and 2013. During fiscal 2015, 2014, and 2013, 34, 30, and 29, respectively, of the Company’s communities were providers of services under the Medicaid program. Accordingly, these communities were entitled to reimbursement under the foregoing program at established rates that were lower than private pay rates. Patient service revenue for Medicaid patients was recorded at the reimbursement rates as the rates were set prospectively by the applicable state upon the filing of an annual cost report. None of the Company’s communities were providers of services under the Medicare program during fiscal 2015 or 2014.

Laws and regulations governing the Medicaid program are complex and subject to interpretation. The Company believes that it is in compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of potential wrongdoing. While no such regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation as well as significant regulatory action including fines, penalties, and exclusion from the Medicaid program.

Management services revenue was recognized when earned and related to the Company providing certain management and administrative support services under management contracts which were terminated when the Company acquired 100% of the member interests in its unconsolidated joint ventures on June 30, 2014.

Community reimbursement revenue is comprised of reimbursable expenses from the non-consolidated communities that the Company operated under long-term management agreements, which were terminated when the Company acquired 100% of the member interests in its unconsolidated joint ventures on June 30, 2014.

Lease Accounting

The Company determines whether to account for its leases as operating, capital or financing leases depending on the underlying terms of the lease agreement. This determination of classification requires significant judgment relating to certain information, including the estimated fair value and remaining economic life of the community, the Company’s cost of funds, minimum lease payments and other lease terms. The lease rates under the Company’s lease agreements are subject to certain conditional escalation clauses which are recognized when probable or incurred and are based on changes in the consumer price index or certain operational performance measures. As of December 31, 2015 and 2014, the Company leased 50 communities, 48 of which the Company classified as operating leases and two of which the Company classified as capital lease and financing obligations. The Company incurs lease acquisition costs and amortizes these costs over the term of the lease agreement. Certain leases entered into by the Company qualified as sale/leaseback transactions, and as such, any related gains have been deferred and are being amortized over the respective lease term. No new communities were leased by the Company during fiscal 2015 or 2014.

Facility lease expense in the Company’s Consolidated Statements of Operations and Comprehensive loss includes rent expense plus amortization expense relating to leasehold acquisition costs offset by the amortization of deferred gains and lease incentives.

Credit Risk and Allowance for Doubtful Accounts

The Company’s resident receivables are generally due within 30 days from the date billed. Accounts receivable are reported net of an allowance for doubtful accounts, and represent the Company’s estimate of the amount that ultimately will be collected. The adequacy of the Company’s allowance for doubtful accounts is reviewed on an ongoing basis, using historical payment trends, write-off experience, analyses of receivable portfolios by payor source and aging of receivables, as well as a review of specific accounts, and adjustments are made to the allowance as necessary. Credit losses on resident receivables have historically been within management’s estimates, and management believes that the allowance for doubtful accounts adequately provides for expected losses.

Employee Health and Dental Benefits, Workers’ Compensation, and Insurance Reserves

The Company offers certain full-time employees an option to participate in its health and dental plans. The Company is self-insured up to certain limits and is insured if claims in excess of these limits are incurred. The cost of employee health and dental benefits, net of employee contributions, is shared between the corporate office and the senior living communities based on the respective number of plan participants. Funds collected are used to pay the actual program costs, including estimated annual claims, third-party administrative fees, network provider fees, communication costs, and other related administrative costs incurred by the plans. Claims are paid as they are submitted to the Company’s third-party administrator. The Company records a liability for outstanding claims and claims that have been incurred but not yet reported. This liability is based on the historical claim reporting lag and payment trends of health insurance claims. Management believes that the liability for outstanding losses and expenses is adequate to cover the ultimate cost of losses and expenses incurred at December 31, 2015; however, actual claims and expenses may differ. Any subsequent changes in estimates are recorded in the period in which they are determined.

The Company uses a combination of insurance and self-insurance for workers’ compensation. Determining the reserve for workers’ compensation losses and costs that the Company has incurred as of the end of a reporting period involves significant judgments based on projected future events, including potential settlements for pending claims, known incidents which may result in claims, estimates of incurred but not yet reported claims, changes in insurance premiums, estimated litigation costs and other factors. The Company regularly adjusts these estimates to reflect changes in the foregoing factors. However, since this reserve is based on estimates, the actual expenses incurred may differ from the amounts reserved. Any subsequent changes in estimates are recorded in the period in which they are determined.

Advertising

Advertising is expensed as incurred. Advertising expenses for the years ended December 31, 2015, 2014, and 2013 were $13.9 million, $12.7 million, and $10.5 million, respectively, and are included as a component of operating expenses within the Consolidated Statements of Operations and Comprehensive Loss.

Net loss Per Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Potentially dilutive securities consist of unvested restricted shares and shares that could be issued under outstanding stock options. Potentially dilutive securities are excluded from the computation of net loss per common share if their effect is antidilutive.

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except for per share amounts):

	Year Ended December 31,
	2015			2014			2013
Net loss	$	(14,284	)	$	(24,126	)	$	(16,504	)
Net loss allocated to unvested restricted shares		—			(598	)		(513	)
Undistributed net loss allocated to common shares	$	(14,284	)	$	(23,528	)	$	(15,991	)
Weighted average shares outstanding — basic		28,688			28,301			27,815
Effects of dilutive securities:
Employee equity compensation plans		—			—			—
Weighted average shares outstanding — diluted		28,688			28,301			27,815
Basic net loss per share	$	(0.50	)	$	(0.83	)	$	(0.58	)
Diluted net loss per share	$	(0.50	)	$	(0.83	)	$	(0.58	)

Awards of unvested restricted stock representing approximately 0.8 million, 0.7 million, and 0.9 million shares were outstanding for the fiscal years ended December 31, 2015, 2014, and 2013, respectively, and are antidilutive. During fiscal 2015, the unvested restricted stock did not meet all of the requirements to be deemed participating securities. Therefore, for current and future reporting periods, (losses) earnings per share will be calculated under the treasury method and the two-class method will no longer be utilized by the Company.

Treasury Stock

The Company accounts for treasury stock under the cost method and includes treasury stock as a component of shareholders’ equity. There were no repurchases of the Company’s stock during fiscal 2015 or 2014. The Company has repurchased 144,315 shares during the first quarter of fiscal 2016 through the date of the filing of our 2015 annual report on Form 10-K with the SEC.

Stock-Based Compensation

The Company recognizes compensation expense for share-based payment awards to certain employees and directors, including grants of stock options and awards of restricted stock, in the Consolidated Statements of Operations and Comprehensive Loss based on their fair values.

On May 8, 2007, the Company’s stockholders approved the 2007 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation (as amended, the “2007 Plan”) which provides for, among other things, the grant of restricted stock awards and stock options to purchase shares of the Company’s common stock. The 2007 Plan authorizes the Company to issue up to 4.6 million shares of common stock and the Company has reserved 2.0 million shares of common stock for future issuance pursuant to awards under the 2007 Plan. Effective May 8, 2007, the 1997 Omnibus Stock and Incentive Plan (as amended, the “1997 Plan”) was terminated and no additional shares will be granted under the 1997 Plan. The Company has reserved 0.3 million shares of common stock for future issuance upon the exercise of outstanding stock options pursuant to the 1997 Plan.

Segment Information

The Company evaluates the performance and allocates resources of its senior living facilities based on current operations and market assessments on a property-by-property basis. The Company does not have a concentration of operations geographically or by product or service as its management functions are integrated at the property level. The Company has determined that all of its operating units meet the criteria in Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting, to be aggregated into one reporting segment. As such, the Company operates in one segment.

Recently Issued Accounting Guidance

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases. ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective beginning in 2019. Early adoption of ASU 2016-02 as of its issuance is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. We are currently evaluating the impact of adopting the new leases standard on our consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes – Balance Sheet Reclassification of Deferred Taxes (Topic 740). ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted and the amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company early adopted ASU 2015-17 in the fourth quarter of 2015 on a prospective basis and included the current portion of deferred tax assets within the non-current portion of deferred tax liabilities within the Company’s Consolidated Balance Sheet. The Company did not adjust its prior period consolidated financial statements as a result of the adoption of ASU 2015-17.

In September 2015, the FASB issued ASU 2015-16, Business Combinations — Simplifying the Accounting for Measurement-Period Adjustments. ASU 2015-16 eliminates the requirement for an acquirer in a business combination to account for the measurement-period adjustment retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. ASU 2015-16 is applied prospectively and is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the impact the adoption of ASU 2015-16 will have on the Company’s consolidated financial statements and disclosures.

In April 2015, the FASB issued ASU 2015-03, Interest — Imputation of Interest- Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30). The amendments in ASU No. 2015-03 requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. ASU 2015-03 requires retrospective application and will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. The Company early adopted the provisions of ASU 2015-03 as of October 1, 2015, and incorporated the provisions of this update to its consolidated financial statements upon adoption. As a result of adoption of ASU 2015-03, at December 31, 2015, and 2014, approximately $8.5 million and $6.3 million, respectively, of debt issuance costs, net of accumulated amortization, were reclassified within the Company’s Consolidated Balance Sheets from other assets to notes payable. The adoption of ASU 2015-03 did not have an impact on the Company’s financial condition or results of operations.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. ASU 2014-09 is effective for annual periods beginning after December 15, 2017. The Company is currently evaluating the impact the adoption of ASU 2014-09 will have on the Company’s consolidated financial statements and disclosures.

Use of Estimates and Critical Accounting Policies

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements and related footnotes. Management bases its estimates and assumptions on historical experience, observance of industry trends and various other sources of information and factors, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially could result in materially different results under different assumptions and conditions. The Company believes revenue recognition, credit risk and allowance for doubtful accounts, investments in unconsolidated joint ventures, lease accounting, employee health and dental benefits, workers’ compensation and insurance reserves, long-lived assets, assets held for sale, and income taxes are its most critical accounting policies and require management’s most difficult and subjective judgments.

Reclassifications

Certain reclassifications have been made to prior period amounts to conform to current period presentation. The Company’s Consolidated Statements of Cash Flows now reflect changes in deferred resident revenue separately from other components of deferred income. Accordingly, the Company reclassified changes in deferred resident revenue from changes in deferred income to a separate line item within the Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013, to be consistent with the presentation for the year ended December 31, 2015. This reclassification had no impact on net cash provided by operating activities.

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Transactions with Affiliates

12 Months Ended

Dec. 31, 2015

Related Party Transactions [Abstract]

Transactions with Affiliates

3. Transactions with Affiliates

The Company was party to a series of property management agreements (the “SHPIII/CSL Management Agreements”) with three joint ventures (collectively “SHPIII/CSL”) owned 90% by Seniors Housing Partners III, LP (“SHPIII”), a fund managed by Prudential Investment Management, Inc. (“Prudential Investment”) and 10% by the Company, which collectively owned and operated three senior living communities. The SHPIII/CSL Management Agreements were for initial terms of ten years from the date the certificate of occupancy was issued and extended until various dates through January 2019. The SHPIII/CSL Management Agreements generally provided for management fees of 5% of gross revenue plus reimbursement for costs and expenses related to the communities. On June 30, 2014, the Company acquired 100% of the member interests in these joint ventures. For additional information refer to Note 4, “Acquisitions.”

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Acquisitions

12 Months Ended

Dec. 31, 2015

Business Combinations [Abstract]

Acquisitions

4. Acquisitions

Fiscal 2015

Effective October 30, 2015, the Company closed the acquisition of one senior living community located in Virginia Beach, Virginia, for $38.0 million (the “Virginia Beach Transaction”). The community consists of 111 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Protective Life Insurance Company (“Protective Life”) for $28.0 million of the acquisition price at a fixed interest rate of 4.25% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective September 30, 2015, the Company closed the acquisition of one senior living community located in Mahomet, Illinois, for $15.5 million Mahomet Transaction (the “Mahomet Transaction”). The community consists of 78 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $11.1 million of the acquisition price at a fixed interest rate of 4.69% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective August 11, 2015, the Company closed the acquisition of one senior living community located in Indianapolis, Indiana, for $21.0 million (the “Indianapolis Transaction”). The community consists of 124 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Protective Life for $13.2 million of the acquisition price at a fixed interest rate of 4.25% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources. The note with Protective Life associated with the Indianapolis Transaction includes a loan commitment for up to $2.6 million of supplemental funding at the same terms and 4.25% fixed interest rate. The loan commitment is based on meeting certain funding requirements and is available through February 28, 2018.

Effective July 28, 2015, the Company closed the acquisition of one senior living community located in Columbiana, Ohio, for approximately $13.3 million (the “Columbiana Transaction”). The community consists of 68 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Protective Life for approximately $9.9 million of the acquisition price at a fixed interest rate of 4.25% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective May 29, 2015, the Company closed the acquisition of one senior living community located in Oneonta, New York, for $14.9 million (the “Heritage Transaction”). The community consists of 64 independent living units and 44 assisted living units. The Company incurred approximately $0.4 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $11.2 million of the acquisition price at a fixed interest rate of 4.79% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective May 21, 2015, the Company closed the acquisition of two senior living communities located in Hartford and West bend, Wisconsin, for $12.0 million (the “Emerald Transaction”). The communities consist of 79 assisted living units. The Company incurred approximately $0.2 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $9.2 million of the acquisition price at a fixed interest rate of 4.55% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective March 27, 2015, the Company closed the acquisition of one senior living community located in Baytown, Texas, for approximately $29.6 million (the “Baytown Transaction”). The community consists of 9 independent living cottages and 120 assisted living units. The Company incurred approximately $0.2 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Protective Life for approximately $21.4 million of the acquisition price at a fixed interest rate of 3.55% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective January 13, 2015, the Company closed the acquisition of one senior living community located in Green Bay, Wisconsin, for approximately $18.3 million (the “Green Bay Transaction”). The community consists of 78 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $14.1 million of the acquisition price at a fixed interest rate of 4.35% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

As a result of these acquisitions, the Company recorded additions to property and equipment of approximately $148.0 million and other assets of approximately $14.6 million, primarily consisting of in-place lease intangibles, within the Company’s Consolidated Balance Sheets which will be depreciated or amortized over the estimated useful lives. The purchase accounting for the fourth quarter 2015 acquisition is preliminary as it is subject to final valuation adjustments.

During fiscal 2015, these acquisitions generated $17.2 million of revenue and $(6.5) million of losses before income taxes which are included in the Company’s Consolidated Statements of Operations and Comprehensive Loss from the dates of acquisition. Losses before income taxes primarily result from the amortization of in-place lease intangibles associated with acquisitions during fiscal 2015 and 2014. The unaudited pro forma combined results of operations have been prepared as if the acquisitions had occurred on January 1, 2014, as follows (in thousands):

	December 31,
	2015			2014
Total revenues	$	425,789		$	416,518
Loss before income taxes	$	(3,616	)	$	(40,880	)

The unaudited pro forma consolidated amounts are presented for informational purposes only and do not necessarily reflect the results of operations of the Company that would have actually resulted had the acquisitions occurred on January 1, 2014.

Fiscal 2014

Effective December 17, 2014, the Company closed the acquisition of one senior living community located in Canton, Georgia, for approximately $14.6 million (the “Canton Transaction”). The community consists of 49 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $10.4 million of the acquisition price at a fixed interest rate of 4.50% with a 10-year term, with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective August 27, 2014, the Company closed the acquisition of one senior living community located in Plymouth, Wisconsin, for $13.5 million (the “Plymouth Transaction”). The community consists of 69 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $10.4 million of the acquisition price at a fixed interest rate of 4.70% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective August 4, 2014, the Company closed the acquisition of one senior living community located in Roanoke, Virginia, for approximately $16.8 million (the “Roanoke Transaction”). The community consists of 60 assisted living units and 34 independent living units. The Company incurred approximately $0.2 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $12.9 million of the acquisition price at a fixed interest rate of 4.59% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective August 4, 2014, the Company closed the acquisition of one senior living community located in Oshkosh, Wisconsin, for approximately $17.1 million (the “Oshkosh Transaction”). The community consists of 90 assisted living units. The Company incurred approximately $0.1 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for approximately $13.2 million of the acquisition price at a fixed interest rate of 4.59% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

Effective June 30, 2014, the Company acquired 100% of the members’ equity interests in SHPIII/CSL Miami, LLC (“SHPIII/CSL Miami”), SHPIII/CSL Richmond Heights, LLC (“SHPIII/CSL Richmond Heights”), and SHPIII/CSL Levis Commons, LLC (“SHPIII/CSL Levis Commons”) for approximately $83.6 million (the “SHPIII/CSL Transaction”). Prior to the acquisition, SHP III, a fund managed by Prudential Investment maintained a 90% equity interest in each joint venture with the remaining 10% equity interest in each joint venture held by wholly owned subsidiaries of the Company. Based on the Company acquiring the remaining ownership interests of the joint ventures, the Company concluded the acquisition took the form of a “step-acquisition” or a “business combination achieved in stages.” Further, with the Company obtaining complete ownership of the joint ventures, the act of obtaining control triggered the application of the acquisition model in Accounting Standards Codification (“ASC”) 805, Business Combinations, which resulted in the equity ownership interest being remeasured at fair value and the acquired assets and assumed liabilities measured at their full fair values. The remeasurement fair value of the equity interests were determined based on the cash proceeds, including incentive distributions, received by the Company in accordance with each respective joint venture partnership agreement. Accordingly, the Company received cash proceeds of approximately $2.5 million and recognized a gain of approximately $1.5 million during the second quarter of fiscal 2014 which was reflected as a joint venture equity investment valuation gain within the Company’s Consolidated Statements of Operations and Comprehensive Loss.

On June 30, 2014, in conjunction with the SHPIII/CSL Transaction, the Company obtained approximately $16.4 million of mortgage debt from Fannie Mae for the acquisition of SHPIII/CSL Miami. The new mortgage loan has a 10-year term with a fixed interest rate of 4.30% and the principal amortized over a 30-year term. The Company also obtained approximately $23.7 million of mortgage debt from Fannie Mae for the acquisition of SHPIII/CSL Richmond Heights. The new mortgage loan has a 10-year term with a fixed interest rate of 4.48% and the principal amortized over a 30-year term. The Company obtained interim, interest only, financing of $21.6 million from Wells Fargo Bank, N.A. (“Wells Fargo”) for the acquisition of SHPIII/CSL Levis Commons with a variable interest rate of LIBOR plus 2.75% and a 24-month term. The balance of the acquisition price was paid from the Company’s existing cash resources. The Company incurred approximately $0.3 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss.

Effective March 26, 2014, the Company closed the acquisition of one senior living community located in Lambertville, Michigan, for $14.6 million (the “Aspen Grove Transaction”). The community consists of 78 assisted living units. The Company incurred approximately $0.2 million in transaction costs related to this acquisition which have been included in general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company obtained financing from Fannie Mae for $11.0 million of the acquisition price at a fixed interest rate of 5.43% with a 12-year term with the balance of the acquisition price paid from the Company’s existing cash resources.

As a result of these acquisitions, the Company recorded additions to property and equipment of approximately $146.1 million and other assets of approximately $14.1 million, primarily consisting of in-place lease intangibles, within the Company’s Consolidated Balance Sheets which will be depreciated or amortized over the estimated useful lives. The purchase accounting for the Canton Transaction which closed during the fourth quarter of fiscal 2014 was preliminary as it was subject to final valuation adjustments. During the first quarter of fiscal 2015, final valuation adjustments resulted in the Company reclassifying approximately $0.4 million from other assets to property and equipment and the 2014 Consolidated Balance Sheet has been recast to reflect the final purchase price allocation.

During fiscal 2014, these acquisitions generated $16.6 million of revenue and $(4.6) million of losses before income taxes which are included in the Company’s Consolidated Statements of Operations and Comprehensive Loss from the dates of acquisition. Losses before income taxes primarily result from the amortization of in-place lease intangibles associated with acquisitions during fiscal 2014 and 2013. The unaudited pro forma combined results of operations have been prepared as if the acquisitions had occurred on January 1, 2013, as follows (in thousands):

	December 31,
	2014			2013
Total revenues	$	400,653		$	378,737
Loss before income taxes	$	(15,655	)	$	(25,963	)

The unaudited pro forma consolidated amounts are presented for informational purposes only and do not necessarily reflect the results of operations of the Company that would have actually resulted had the acquisitions occurred on January 1, 2013.

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Dispositions

12 Months Ended

Dec. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Dispositions

5. Dispositions

Effective August 6, 2015, the Company closed a transaction to sell one of its senior living communities located in Wichita, KS, for approximately $14.8 million (the “Sedgwick Sale Transaction”). As a result of the sale, outstanding mortgage debt totaling approximately $6.8 million was assumed by the buyer. The Company recognized a gain on sale of approximately $6.4 million and received net proceeds, less the debt assumption, of approximately $8.0 million. For income tax purposes, the Company executed a like-kind exchange and acquired a replacement property shortly after the sale which resulted in the deferral of the gain without the Company incurring any current federal or state income tax liabilities. The Company contracted with a qualified intermediary for purposes of reaching its determination that the transaction satisfied all requirements of a like-kind exchange under applicable federal and state income tax law.

Effective January 22, 2015, the Company closed a transaction to sell four of its senior living communities located in Oklahoma City, Oklahoma, Shreveport, Louisiana, Southfield, Michigan, and Winston-Salem, North Carolina, in a single transaction for approximately $36.5 million (the “Four Property Sale Transaction”). As a result of the sale, the outstanding mortgage debt on the Company’s senior living communities located in Oklahoma City and Shreveport was repaid without incurring any prepayment penalties as these notes were short-term, bridge loan interim financing. However, the mortgage loan associated with the Company’s senior living community located in Winston-Salem could not be prepaid under the existing loan agreement as it did not offer a prepayment provision. Additionally, this mortgage loan was cross-collateralized with another mortgage loan on one of the Company’s senior living communities located in Peoria, IL, which also did not offer a prepayment provision. Therefore, the Company determined it would defease the Winston-Salem and Peoria mortgage loans by acquiring certain treasury securities to serve as collateral for the outstanding principal balance as of the date of the sale until the note matured on September 1, 2015. The Company contracted with a third party trust to assume the mortgage debt and assigned all of its rights to the treasury securities to serve as collateral until the balance remaining comes due. Based on this structure, the Company concluded it met the requirements to report the debt transaction as a legal defeasance which resulted in the Company removing the respective assets and liabilities from its Consolidated Balance Sheet during the first quarter of fiscal 2015 when the transaction closed. The Company had reported these assets as held for sale at December 31, 2014, and recorded a remeasurement write-down of $0.6 million to adjust the carrying values of these assets to the sales price, less costs to sell. As a result of the sale, the Company received net proceeds of approximately $35.7 million.

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Property and Equipment

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

Property and Equipment

6. Property and Equipment

Property and equipment consists of the following (in thousands):

		December 31,
	Asset Lives	2015		2014
Land		$	61,254	$	54,115
Land improvements	5 to 20 years		17,613		13,209
Buildings and building improvements	10 to 40 years		897,668		764,794
Furniture and equipment	5 to 10 years		42,879		34,921
Automobiles	5 to 7 years		4,977		3,829
Leasehold improvements	(1)		58,466		41,679
Construction in progress	NA		5,700		1,520
			1,088,557		914,067
Less accumulated depreciation and amortization.			197,985		166,454
Property and equipment, net		$	890,572	$	747,613

(1) Leasehold improvements are amortized over the shorter of the useful life of the asset or the remaining lease term.

At December 31, 2015 and 2014, furniture and equipment include $3.0 million of capitalized computer software development costs of which $2.6 million and $2.5 million, respectively, has been amortized and is included as a component of accumulated depreciation and amortization. During fiscal 2015, final valuation adjustments associated with 2014 senior living community acquisitions resulted in the Company reclassifying approximately $0.4 million from other assets to property and equipment and the 2014 Consolidated Balance Sheet has been recast to reflect the final purchase price allocation.

Property and equipment includes $32.4 million of assets under capital lease in connection with the Ventas Lease Transaction, as discussed at Note 17, “Leases”, of which $13.7 million and $12.8 million has been amortized and is included as a component of accumulated depreciation and amortization at December 31, 2015 and 2014, respectively.

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Other Assets

12 Months Ended

Dec. 31, 2015

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

7. Other Assets

Other assets consist of the following (in thousands):

	December 31,
	2015		2014
Deferred lease costs, net		8,211		9,684
Security and other deposits		12,953		11,324
In-place lease intangibles, net		7,719		7,443
Other		2,310		2,732
	$	31,193	$	31,183

In connection with the Company’s acquisitions and certain lease transactions, subject to final valuation adjustments, the Company records additions to in-place lease intangibles in order to reflect the value associated with the resident operating leases acquired. In-place lease intangibles are being amortized over the estimated remaining useful life of the respective resident operating leases. The value of in-place leases includes lost revenue that would be realized if the resident operating leases were to be replaced by the Company.

During fiscal 2015, final valuation adjustments associated with 2014 senior living community acquisitions resulted in the Company reclassifying approximately $0.4 million from other assets to property and equipment and the 2014 Consolidated Balance Sheet has been recast to reflect the final purchase price allocations. Additionally, other assets at December 31, 2014, was revised from amounts previously reported to reflect the impact of reclassifying $6.3 million in debt issuance costs, net of accumulated amortization, to notes payable. This revision was due to the Company’s adoption of ASU 2015-03, Interest—Imputation of Interest- Simplifying the Presentation of Debt Issuance Costs, during the fourth quarter of fiscal 2015 which requires current and retrospective application to the Company’s Consolidated Balance Sheets for all periods presented.

At December 31, 2015 and 2014, the Company had gross in-place lease intangibles of $74.9 million and $60.6 million, respectively, of which $67.2 million and $52.8 million, respectively, has been amortized. The unamortized balance at December 31, 2015 is expected to be fully amortized during fiscal 2016.

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Accrued Expenses

12 Months Ended

Dec. 31, 2015

Text Block [Abstract]

Accrued Expenses

8. Accrued Expenses

Accrued expenses consist of the following (in thousands):

	December 31,
	2015		2014
Accrued salaries, bonuses and related expenses	$	11,121	$	9,865
Accrued property taxes		14,087		13,050
Accrued interest		3,035		2,485
Accrued health claims and workers comp		3,230		4,026
Accrued professional fees		748		771
Other		2,079		1,957
	$	34,300	$	32,154

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Notes Payable

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Notes Payable

9. Notes Payable

Notes payable consists of the following (in thousands):

Lender	Average Monthly Payment		Net Book  Value Of Collateral(1)		Interest Rate		Maturity Date		Notes Payable December 31,
									2015				2014
Fannie Mae		—		—		—	(4)		$	—			$	26,809
Fannie Mae		—		—		—	(4)			—				5,372
Fannie Mae		78		15,214		5.69	August 2021			12,716				12,915
Fannie Mae		26		5,594		4.97	October 2021			4,502				4,582
Fannie Mae		101		21,093		4.92	October 2021			17,779				18,096
Fannie Mae		27		21,093		5.19	October 2021			4,978				—
Fannie Mae		117		24,283		4.92	November 2021			20,674				21,041
Fannie Mae		27		6,273		4.38	March 2022			5,036				5,132
Fannie Mae		60		12,507		4.76	April 2022			10,814				11,007
Fannie Mae		135		28,287		4.69	April 2022			24,584				25,026
Fannie Mae		60		15,981		4.48	May 2022			11,141				11,348
Fannie Mae		144		34,998		4.34	November 2022			27,462				27,970
Fannie Mae		33		7,685		4.50	November 2022			6,113				6,222
Fannie Mae		43		26,987		5.49	November 2022			7,592				—
Fannie Mae		84		18,439		4.32	January 2023			16,164				16,460
Fannie Mae		49		18,439		5.39	January 2023			8,684				—
Fannie Mae		39		8,682		4.58	January 2023			7,224				7,350
Fannie Mae		85		18,782		4.66	April 2023			15,700				15,967
Fannie Mae		18		5,524		5.46	April 2023			3,150				—
Fannie Mae		45		8,700		5.93	October 2023			7,411				7,506
Fannie Mae		67		14,242		5.50	November 2023			11,526				11,686
Fannie Mae		67		13,028		5.38	November 2023			11,591				11,756
Fannie Mae		282		55,740		5.56	January 2024			48,071				48,722
Fannie Mae		632		118,792		4.24	July 2024(5)			125,677				134,650
Fannie Mae		120		27,851		4.48	July 2024			23,196				23,572
Fannie Mae		81		20,660		4.30	July 2024			16,035				16,304
Fannie Mae		134		29,273		4.59	September 2024			25,666				26,070
Fannie Mae		54		11,550		4.70	September 2024			10,200				10,357
Fannie Mae		53		13,093		4.50	January 2025			10,258				10,406
Fannie Mae		95		6,579		4.46	January 2025			18,651				18,923
Fannie Mae		70		16,630		4.35	February 2025			13,909				—
Fannie Mae		109		9,434		3.85	March 2025			22,939				—
Fannie Mae		102		26,078		3.84	April 2025			21,548				—
Fannie Mae		47		10,404		4.55	June 2025			9,087				—
Fannie Mae		59		13,014		4.79	June 2025			11,095				—
Fannie Mae		81		16,535		5.30	June 2025			14,029				14,237
Fannie Mae		58		13,677		4.69	October 2025			11,122				—
Fannie Mae		44		10,380		4.70	October 2025			8,406				—
Fannie Mae		273		41,027		4.68	December 2025			52,774				—
Fannie Mae		62		12,144		5.43	April 2026			10,761				10,908
Protective Life		96		26,385		3.55		April 2025				21,081				—
Protective Life		49		12,207		4.25		August 2025				9,882				—
Protective Life		65		19,045		4.25		September 2025				13,145				—
Protective Life		138		34,327		4.25		November 2025				27,961				—
Berkadia		—		—		—		(6)				—				13,777
Berkadia		—		—		—		(7)				—				4,550
Berkadia		—		—		—		(6)				—				9,300
Berkadia		—		—		—		(8)				—				8,472
Berkadia		—		—		—		(7)				—				9,500
Berkadia		48		14,359		(3)		July 2017(9)				11,800				11,800
Wells Fargo		—		—		—		(10)				—				21,600
HUD		16		5,759		4.48		September 2045				3,093				3,142
Insurance Financing		71		—		1.73		October 2016				711				—
Insurance Financing		138		—		1.73		April 2016				553				—
Insurance Financing		208		—		1.79		March 2016				625				3,095
Insurance Financing		—		—		—		February 2015				—				390
Insurance Financing		—		—		—		September 2015				—				580
	$	4,490				4.60%(2)						777,116				646,600
Less deferred loan costs, net												8,533				6,331
												768,583				640,269
Less current portion												13,634				47,385
											$	754,949			$	592,884

(1) 69 of the facilities owned by the Company are encumbered by mortgage debt and are provided as collateral under their respective loan agreements.

(2) Weighted average interest rate on current fixed interest rate debt outstanding.

(3) Variable interest rate of LIBOR plus 4.50%, which was 4.79% at December 31, 2015.

(4) On November 12, 2015, the Company obtained new long-term financing from Berkadia, who later sold the loans to Fannie Mae, to replace this mortgage debt with a fixed interest rate of 4.68% and a 10-year term.

(5) On August 6, 2015, approximately $6.8 million of this outstanding mortgage debt was assumed by the buyer in conjunction with the Sedgwick Sale Transaction. For additional information refer to Note 5, “Dispositions.”

(6) On January 22, 2015, this mortgage debt was repaid or defeased in conjunction with the Four Property Sale Transaction. For additional information refer to Note 5, “Dispositions.”

(7) On February 17, 2015, the Company obtained new long-term financing from Fannie Mae to replace this mortgage debt with a fixed interest rate of 3.85% and a 10-year term.

(8) On September 24, 2015, the Company obtained new long-term financing from Fannie Mae to replace this mortgage debt with a fixed interest rate of 4.70% and a 10-year term.

(9) On February 4, 2015, the Company exercised its right to extend the maturity date with Berkadia to July 10, 2017.

(10) On March 5, 2015, the Company obtained new long-term financing from Fannie Mae to replace this mortgage debt with a fixed interest rate of 3.84% and a 10-year term.

The aggregate scheduled maturities of notes payable at December 31, 2015 are as follows (in thousands):

2016		14,698
2017		25,318
2018		14,158
2019		14,829
2020		15,443
Thereafter		692,670
	$	777,116

On December 17, 2015, the Company completed supplemental mortgage financing of approximately $7.6 million from Fannie Mae on three senior living communities located in Columbus, Ohio, Chardon, Ohio, and Greenwood, Indiana, at a fixed interest rate of 5.49% which is coterminous with existing mortgage debt maturing in November 2022. The supplemental mortgage loans are cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.2 million in deferred financing costs related to these loans, which are being amortized over the remaining initial loan terms.

On November 24, 2015, the Company completed supplemental mortgage financing of approximately $3.2 million from Fannie Mae on one senior living community located in Elkhorn, Nebraska, at a fixed interest rate of 5.46% which is coterminous with existing mortgage debt maturing in April 2023. The supplemental mortgage loan is cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over the remaining initial loan term.

On November 24, 2015, the Company completed supplemental mortgage financing of approximately $8.7 million from Fannie Mae on one senior living community located in Springfield, Missouri, at a fixed interest rate of 5.39% which is coterminous with existing mortgage debt maturing in January 2023. The supplemental mortgage loan is cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over the remaining initial loan term.

On November 12, 2015, the Company repaid mortgage loans totaling approximately $31.6 million from Fannie Mae associated with four of its senior living communities located in Columbia, South Carolina, Deer Park and Pantego, Texas, and South Bend, Indiana, scheduled to mature in June 2017. The Company obtained approximately $52.8 million of new long-term fixed interest rate mortgage financing from Berkadia Commercial Mortgage LLC (“Berkadia”), who later sold the loans to Fannie Mae, at a fixed interest rate of 4.68% with a 10-year term and the principal amortized over a 30-year term. The Company incurred approximately $0.6 million in deferred financing costs related to the new mortgage loans, which are being amortized over 10 years. As a result of the early repayment of the existing mortgage debt, the Company accelerated the amortization of approximately $0.1 million in unamortized deferred financing costs and incurred a prepayment premium of approximately $1.7 million to Fannie Mae.

On October 30, 2015, in conjunction with the Virginia Beach Transaction, the Company obtained $28.0 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 4.25% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.4 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On September 30, 2015, in conjunction with the Mahomet Transaction, the Company obtained approximately $11.1 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.69% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On September 30, 2015, the Company completed supplemental financing of approximately $5.0 million from Fannie Mae on an existing senior living community owned by the Company located in Macedonia, Ohio. The supplemental loan is coterminous with existing mortgage debt maturing in October 2021 with a 5.19% fixed interest rate and the principal amortized over a 30-year term. The supplemental loan is cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over the remaining initial loan term.

On September 24, 2015, the Company obtained approximately $8.4 million long-term fixed interest rate mortgage financing from Fannie Mae to replace interim variable interest rate financing obtained by the Company from Berkadia on September 30, 2013, in connection with the Company’s previous acquisition of a senior living community located in Oakwood, Georgia. The new mortgage loan has a 10-year term with a 4.7% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On August 11, 2015, in conjunction with the Indianapolis Transaction, the Company obtained approximately $13.2 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 4.25% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years. The note with Protective Life associated with the Indianapolis Transaction includes a loan commitment for up to $2.6 million of supplemental funding at the same terms and 4.25% fixed interest rate. The loan commitment is based on meeting certain funding requirements and is available through February 28, 2018.

On August 6, 2015, outstanding mortgage debt totaling approximately $6.8 million was assumed by the buyer in conjunction with the Sedgwick Sale Transaction. As a result of the buyer’s assumption of the existing mortgage debt, the Company accelerated the amortization of approximately $0.1 million in unamortized deferred financing costs. For additional information refer to Note 5, “Dispositions”.

On July 28, 2015, in conjunction with the Columbiana Transaction, the Company obtained approximately $9.9 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 4.25% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On May 31, 2015, the Company renewed certain insurance policies and entered into a finance agreement totaling approximately $1.7 million. The finance agreement has a fixed interest rate of 1.73% with the principal being repaid over an 11-month term.

On May 29, 2015, in conjunction with the Heritage Transaction, the Company obtained approximately $11.2 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.79% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On May 21, 2015, in conjunction with the Emerald Transaction, the Company obtained approximately $9.2 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.55% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On March 27, 2015, in conjunction with the Baytown Transaction, the Company obtained approximately $21.4 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 3.55% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On March 5, 2015, the Company repaid an interim, interest only variable rate mortgage loan totaling approximately $21.6 million from Wells Fargo on one of its senior living communities located in Toledo, Ohio. The Company obtained approximately $21.8 million of mortgage debt from Fannie Mae to replace the Wells Fargo interim financing. This new mortgage loan has a 10-year term with a fixed interest rate of 3.84% and the principal amortized over 30-years. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over the loan term. As a result of the refinance, the Company received approximately $0.2 million in cash proceeds. Due to the early repayment, the Company accelerated the amortization of approximately $79,000 in unamortized deferred financing costs and incurred additional prepayment fees totaling approximately $55,000.

On February 17, 2015, the Company obtained new permanent mortgage financing totaling approximately $23.2 million from Fannie Mae on one of its owned senior living communities located in Peoria, Illinois. The new financing replaced a mortgage loan previously scheduled to mature on September 1, 2015, which was defeased by the Company on January 22, 2015, in conjunction with the Four Property Sale Transaction. This new mortgage loan has a 10-year term with a fixed interest rate of 3.85% and the principal amortized over 30 years. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over the loan term. As a result of the Peoria financing, the Company repaid existing mortgage debt on two owned properties totaling approximately $14.1 million. Due to the early repayment, the Company accelerated the amortization of approximately $0.2 million in unamortized deferred financing costs and incurred additional prepayment fees totaling approximately $0.5 million.

On January 22, 2015, outstanding mortgage debt totaling approximately $13.7 million was defeased in conjunction with the Four Property Sale Transaction. The mortgage loan associated with the Company’s senior living community located in Winston-Salem, North Carolina, carried an outstanding balance of approximately $5.7 million and could not be prepaid under the existing loan agreement as it did not offer a prepayment provision. Additionally, this mortgage loan was cross-collateralized with another mortgage loan on one of the Company’s senior living communities located in Peoria, Illinois, which carried an outstanding mortgage balance of approximately $8.0 million and also did not offer a prepayment provision. Therefore, the Company determined it would defease the Winston-Salem and Peoria mortgage loans by acquiring certain treasury securities to serve as collateral for the outstanding principal balance as of the date of the sale until the note matured on September 1, 2015. The Company contracted with a third party trust to assume the mortgage debt and assigned all of its rights to the treasury securities to serve as collateral until the balance remaining came due. Based on this structure, the Company concluded it met the requirements to report the debt transaction as a legal defeasance which resulted in the Company removing the respective assets and liabilities from its Consolidated Balance Sheet during the first quarter of fiscal 2015 when the transaction closed. Due to the defeasance, the Company accelerated the amortization of approximately $18,000 in unamortized deferred financing costs. For additional information refer to Note 5, “Dispositions”.

On January 13, 2015, in conjunction with the Green Bay Transaction, the Company obtained approximately $14.1 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.35% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over 10 years.

On December 23, 2014, the Company refinanced a mortgage loan totaling approximately $8.4 million from Freddie Mac associated with one of its senior living communities located in Lincoln, Nebraska. The Company obtained approximately $18.9 million of new mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.46% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which is being amortized over 10 years. As a result of the early repayment of the existing mortgage debt with Freddie Mac, the Company accelerated the amortization of approximately $48,000 in unamortized deferred financing costs and incurred a prepayment premium of approximately $0.9 million.

On December 17, 2014, in conjunction with the Canton Transaction, the Company obtained approximately $10.4 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.50% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which is being amortized over 10 years.

On August 27, 2014, in conjunction with the Plymouth Transaction, the Company obtained approximately $10.4 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.70% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which is being amortized over 10 years.

On August 4, 2014, in conjunction with the Roanoke Transaction, the Company obtained approximately $12.9 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term, with a 4.59% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which is being amortized over 10 years.

On August 4, 2014, in conjunction with the Oshkosh Transaction, the Company obtained approximately $13.2 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.59% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which is being amortized over 10 years.

On June 30, 2014, in conjunction with the SHPIII/CSL Transaction, the Company obtained approximately $16.4 million of mortgage debt from Fannie Mae for the acquisition of SHPIII/CSL Miami. The new mortgage loan has a 10-year term with a fixed interest rate of 4.30% and the principal amortized over a 30-year term. The Company also obtained approximately $23.7 million of mortgage debt from Fannie Mae for the acquisition of SHPIII/CSL Richmond Heights. The new mortgage loan has a 10-year term with a fixed interest rate of 4.48% and the principal amortized over a 30-year term. The Company obtained interim, interest only, financing of $21.6 million from Wells Fargo for the acquisition of SHPIII/CSL Levis Commons with a variable interest rate of LIBOR plus 2.75% and a 24-month term. The Company incurred approximately $0.5 million in deferred financing costs related to these loans, which are being amortized over the respective loan terms.

On June 27, 2014, the Company refinanced mortgage loans totaling approximately $111.9 million from Freddie Mac associated with 15 of its senior living communities. The Company obtained approximately $135.5 million of mortgage debt and supplemental financings for 12 of the senior living communities from Fannie Mae. These new mortgage loans have 10-year terms with fixed interest rates of 4.24% and the principal amortized over 30-year terms. The Company obtained interim, interest only, financing of $9.3 million from Berkadia for two of the senior living communities with a variable interest rate of LIBOR plus 4.50% and a 12-month term. The Company also obtained interim, interest only, financing of $11.8 million from Berkadia for one of the senior living communities with a variable interest rate of LIBOR plus 4.50% and a 24-month term. The Company incurred approximately $2.0 million in deferred financing costs related to these loans, which are being amortized over the respective loan terms. As a result of the refinance, the Company received approximately $36.5 million in cash proceeds. As a result of the early repayment of the existing mortgage debt with Freddie Mac, the Company accelerated the amortization of approximately $0.5 million in unamortized deferred loan costs and incurred a prepayment premium of approximately $6.5 million.

On May 31, 2014, the Company renewed certain insurance policies and entered into a finance agreement totaling approximately $1.7 million. The finance agreement has a fixed interest rate of 1.92% with principal being repaid over a 9-month term.

On March 26, 2014, in conjunction with the Aspen Grove Transaction, the Company obtained approximately $11.0 million of mortgage debt from Fannie Mae. The new mortgage loan has a 12-year term with a 5.43% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which is being amortized over 12 years.

On March 25, 2011, the Company issued standby letters of credit, totaling approximately $2.6 million, for the benefit of HCN on certain leases between HCN and the Company.

On September 10, 2010, the Company issued standby letters of credit, totaling approximately $2.2 million, for the benefit of HCN on certain leases between HCN and the Company.

On April 16, 2010, the Company issued standby letters of credit, totaling approximately $1.7 million, for the benefit of HCN on certain leases between HCN and the Company.

In connection with the Company’s loan commitments described above, the Company incurred financing charges that were deferred and amortized over the life of the notes. At December 31, 2015 and 2014, the Company had gross deferred loan costs of $10.3 million and $8.5 million, respectively. Accumulated amortization was $1.8 million and $2.2 million at December 31, 2015 and 2014, respectively. During fiscal 2015, due to the early repayment of the Company’s existing mortgage debt associated with the Four Property Sale Transaction, Sedgwick Sale Transaction and refinancings with Fannie Mae, the Company wrote-off approximately $0.5 million in unamortized deferred financing charges and removed the respective accumulated amortization of approximately $1.4 million. Amortization expense is expected to be approximately $1.1 million in each of the next five fiscal years. The Company was in compliance with all aspects of its outstanding indebtedness at December 31, 2015 and 2014.

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Equity

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Equity

10. Equity

Preferred Stock

The Company is authorized to issue preferred stock in series and to fix and state the voting powers and such designations, preferences and relative participating, optional or other special rights of the shares of each such series and the qualifications, limitations and restrictions thereof. Such action may be taken by the Board without stockholder approval. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of preferred stock. No preferred stock was outstanding as of December 31, 2015 and 2014.

Share Repurchases

On January 22, 2009, the Company’s board of directors approved a share repurchase program that authorized the Company to purchase up to $10.0 million of the Company’s common stock. Purchases may be made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or block trades, or by any combination of such methods, in accordance with applicable insider trading and other securities laws and regulations. The size, scope and timing of any purchases will be based on business, market and other conditions and factors, including price, regulatory and contractual requirements or consents, and capital availability. The repurchase program does not obligate the Company to acquire any particular amount of common stock and the share repurchase authorization has no stated expiration date. Shares of stock repurchased under the program will be held as treasury shares. Pursuant to this authorization, during fiscal 2009, the Company purchased 349,800 shares at an average cost of $2.67 per share for a total cost to the Company of approximately $0.9 million. All such purchases were made in open market transactions. The Company did not purchase any shares of its common stock pursuant to the Company’s share repurchase program during fiscal 2015, 2014, or 2013.

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

11. Stock-Based Compensation

Stock Options

Although the Company has not granted stock options in recent years, the Company’s stock option program is a long-term retention program that is intended to attract, retain and provide incentives for employees, officers and directors and to more closely align stockholder and employee interests. The Company’s stock options generally vest over one to five years and the related expense is amortized on a straight-line basis over the vesting period.

A summary of the Company’s stock option activity and related information for the years ended December 31, 2015, 2014, and 2013 is presented below:

	Outstanding at Beginning of Year		Granted		Exercised		Forfeited		Outstanding End of Year		Options Exercisable
December 31, 2015
Shares		6,000		—		3,000		—		3,000		3,000
Weighted average price	$	8.44		—	$	5.90		—	$	10.97	$	10.97
December 31, 2014
Shares		19,000		—		13,000		—		6,000		6,000
Weighted average price	$	7.10		—	$	6.48		—	$	8.44	$	8.44
December 31, 2013
Shares		265,930		—		246,930		—		19,000		19,000
Weighted average price	$	6.28		—	$	6.21		—	$	7.10	$	7.10

The options outstanding and the options exercisable at December 31, 2015, 2014, and 2013, had an aggregate intrinsic value of $30,000, $0.1 million, and $0.3 million, respectively. All stock options outstanding are fully vested.

The following table summarizes information relating to the Company’s options outstanding and options exercisable as of December 31, 2015.

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding  at End of Year		Weighted  Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable  at End of Year		Weighted Average Exercise Price
$10.97		3,000		.35	$	10.97		3,000	$	10.97

Restricted Stock

The Company may grant restricted stock awards and units to employees, officers, and directors in order to attract, retain, and provide incentives for such individuals and to more closely align stockholder and employee interests. For restricted stock awards and units without performance-based vesting conditions, the Company records compensation expense for the entire award on a straight-line basis over the requisite service period, which is generally a period of one to four years, unless the award is subject to certain accelerated vesting requirements. Restricted stock awards are considered outstanding at the time of grant since the holders thereof are entitled to dividends, upon vesting, and voting rights. For restricted stock awards with performance-based vesting conditions, total compensation expense is recognized over the requisite service period for each separately vesting tranche of the award as if the award is, in substance, multiple awards once the performance target is deemed probable of achievement. Performance goals are evaluated periodically and if such goals are not ultimately met or it is not probable the goals will be achieved, no compensation expense is recognized and any previously recognized compensation expense is reversed.

The Company recognizes compensation expense of a restricted stock award over its respective vesting or performance period based on the fair value of the award on the grant date, net of forfeitures. A summary of the Company’s restricted common stock awards activity and related information for the years ended December 31, 2015, 2014, and 2013 is presented below:

	Outstanding at Beginning of Year		Issued		Vested		Forfeited		Outstanding End of Year
December 31, 2015
Shares		702,718		467,944		358,716		28,636		783,310
December 31, 2014
Shares		870,217		350,716		406,072		112,143		702,718
December 31, 2013
Shares		803,218		403,715		312,980		23,736		870,217

The restricted stock outstanding at December 31, 2015, 2014, and 2013, had an aggregate intrinsic value of $16.3 million, $17.5 million, and $20.9 million, respectively.

During fiscal 2015, the Company awarded 467,944 shares of restricted common stock to certain employees and directors of the Company, of which 130,000 shares were subject to performance-based vesting conditions. The average market value of the common stock on the date of grant was $24.08. These awards of restricted shares vest over a one to four-year period, unless the award is subject to certain accelerated vesting requirements, and had an intrinsic value of $11.3 million on the date of grant. Additionally, during fiscal 2015, the Company awarded 11,756 restricted stock units to certain directors of the Company with an average market value of $25.52 and an intrinsic value of $0.3 million on the date of grant, that vest over a one-year period.

On February 24, 2016, the Company awarded 541,327 shares of restricted common stock to certain employees of the Company, of which 199,692 shares were subject to performance-based vesting conditions. The market value of the common stock on the date of grant was $15.92. These awards of restricted shares vest over a one to four-year period, unless the award is subject to certain accelerated vesting requirements, and had an intrinsic value of $8.6 million on the date of grant.

Stock Based Compensation

The Company uses the Black-Scholes option pricing model to estimate the grant date fair value of its stock options. The Black-Scholes model requires the input of certain assumptions including expected volatility, expected dividend yield, expected life of the option and the risk free interest rate. The expected volatility used by the Company is based primarily on an analysis of historical prices of the Company’s common stock. The expected term of options granted is based primarily on historical exercise patterns on the Company’s outstanding stock options. The risk free rate is based on zero-coupon U.S. Treasury yields in effect at the date of grant with the same period as the expected option life. The Company does not expect to pay dividends on its common stock and therefore has used a dividend yield of zero in determining the fair value of its awards. The option forfeiture rate assumption used by the Company is based primarily on the Company’s historical option forfeiture patterns. The Company recognizes compensation expense of a restricted stock award over its respective vesting period based on the fair value of the award on the grant date, net of estimated forfeitures.

The Company recognized $8.8 million, $7.3 million, and $4.3 million in stock-based compensation expense during fiscal 2015, 2014, and 2013, respectively. Unrecognized stock-based compensation expense, net of estimated forfeitures, is $8.3 million for the year ended December 31, 2015. The Company expects this expense to be recognized over a one-year period for performance awards and a one to four-year period for nonperformance awards.

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Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

The provision (benefit) for income taxes consists of the following (in thousands):

	Year Ended December 31,
	2015		2014		2013
Current:
Federal	$	—	$	—	$	(5,411	)
State		900		719		377
Deferred:
Federal		—		—		6,251
State		—		—		4,542
	$	900	$	719	$	5,759

The provision (benefit) for income taxes differed from the amounts of income tax provision (benefit) determined by applying the U.S. federal statutory income tax rate to income before provision (benefit) for income taxes as a result of the following (in thousands):

	Year Ended December 31,
	2015			2014			2013
Tax (benefit) provision at federal statutory rates	$	(4,515	)	$	(7,958	)	$	(3,653	)
State income tax expense, net of federal effects		64			(90	)		401
Federal and state income tax return true up		—			—			325
State effective rate changes		—			6			(20	)
Change in deferred tax asset valuation allowance		4,986			8,456			8,810
Other		365			305			(104	)
	$	900		$	719		$	5,759

A summary of the Company’s deferred tax assets and liabilities, are as follows (in thousands):

	December 31,
	2015			2014
Deferred tax assets:
Deferred gains on sale/leaseback transactions	$	6,176		$	7,027
Net operating loss carryforward (expiring up to 2032)		15,144			12,556
Compensation costs		1,804			972
Investments in unconsolidated joint ventures		—			—
Capital loss carryforward		—			—
Other		2,802			1,806
Total deferred tax assets		25,926			22,361
Valuation Allowance		(22,252	)		(17,266	)
Total deferred tax assets, net		3,674			5,095
Deferred tax liabilities:
Depreciation and amortization		(3,674	)		(5,095	)
Total deferred tax assets, net	$	—		$	—
Current deferred tax assets, net	$	—		$	460
Long-term deferred tax (liabilities) assets, net		—			(460	)
Total deferred tax assets, net	$	—		$	—

Income taxes are computed using the asset and liability method and current income taxes are recorded based on amounts refundable or payable in the current year. Deferred income taxes are recorded based on the estimated future tax effects of loss carryforwards and temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which we expect those carryforwards and temporary differences to be recovered or settled. Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income. Based upon this evaluation, a valuation allowance has been recorded to reduce the Company’s net deferred tax assets to the amount that is more likely than not to be realized. A significant component of objective evidence evaluated was the cumulative loss incurred by the Company over the past four fiscal years. Such objective evidence severely limits the ability to consider other subjective evidence such as the Company’s ability to generate sufficient taxable income in future periods to fully recover the deferred tax assets. However, in the event that we were to determine that it would be more likely than not that the Company would realize the benefit of deferred tax assets in the future in excess of their net recorded amounts, adjustments to deferred tax assets would increase net income in the period we made such a determination. The benefits of the net deferred tax assets might not be realized if actual results differ from expectations.

As of December 31, 2015, the Company has Federal and State Net Operating Loss (“NOL”) carryforwards of $34.7 million and $63.3 million and related deferred tax assets of $11.7 million and $3.1 million, respectively, and a Federal Alternative Minimum Tax Credit carryforward of $0.3 million. If not used, the Federal NOL will expire during fiscal 2033 to 2035 and state NOL’s will expire during fiscal 2016 to 2035. Additionally, the Company has a Federal NOL carryforward of $10.4 million related to the excess tax benefits associated with stock-based compensation and stock option exercises. The benefit of this NOL will be recognized as an increase to additional paid-in capital at the point when such NOL provides cash benefit to the Company.

The effective tax rates for fiscal 2015 and 2014 differ from the statutory tax rates due to state income taxes, permanent tax differences, and changes in the deferred tax asset valuation allowance. The Company is impacted by the Texas Margin Tax (“TMT”), which effectively imposes tax on modified gross revenues for communities within the State of Texas. During fiscal 2015 the Company consolidated 37 Texas communities and during fiscal 2014 the Company consolidated 36 Texas communities and the TMT increased the overall provision for income taxes. The Company is generally no longer subject to federal and state tax audits for years before 2012.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2015

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

13. Employee Benefit Plans

The Company has a 401(k) salary deferral plan (the “Plan”) in which all employees of the Company meeting minimum service and age requirements are eligible to participate. Contributions to the Plan are in the form of employee salary deferrals, which are subject to employer matching contributions of 50% of up to 4% of the employee’s annual salary. The Company’s contributions are funded semi-monthly to the Plan administrator. Matching contributions of $0.5 million were contributed to the Plan in each of fiscal 2015 and 2014 and $0.4 million in fiscal 2013. The Company incurred administrative expenses related to the Plan of $20,900, $15,000, and $15,300 in fiscal 2015, 2014, and 2013, respectively.

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Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Contingencies

14. Contingencies

The Company has claims incurred in the normal course of its business. Most of these claims are believed by management to be covered by insurance, subject to normal reservations of rights by the insurance companies and possibly subject to certain exclusions in the applicable insurance policies. Whether or not covered by insurance, these claims, in the opinion of management, based on advice of legal counsel, should not have a material effect on the consolidated financial statements of the Company if determined adversely to the Company.

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Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

15. Fair Value of Financial Instruments

The carrying amounts and fair values of financial instruments at December 31, 2015 and 2014 are as follows (in thousands):

	2015				2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	56,087	$	56,087	$	39,209	$	39,209
Restricted cash		13,159		13,159		12,241		12,241
Notes payable		777,116		724,769		646,600		647,449

The following methods and assumptions were used in estimating its fair value disclosures for financial instruments:

Cash and cash equivalents and Restricted cash:    The carrying amounts reported in the balance sheet for cash and cash equivalents and restricted cash equal fair value, which represent level 1 inputs as defined in the accounting standards codification.

Notes payable:    The fair value of notes payable is estimated using discounted cash flow analysis, based on current incremental borrowing rates for similar types of borrowing arrangements, which represent level 2 inputs as defined in the accounting standards codification.

The estimated fair value of these assets and liabilities could be affected by market changes and this effect could be material.

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Allowance for Doubtful Accounts

12 Months Ended

Dec. 31, 2015

Text Block [Abstract]

Allowance for Doubtful Accounts

16. Allowance for Doubtful Accounts

The components of the allowance for doubtful accounts are as follows (in thousands):

	December 31,
	2015			2014			2013
Balance at beginning of year	$	2,321		$	1,900		$	1,825
Provision for bad debts, net of recoveries		1,192			717			497
Write-offs and other		(325	)		(296	)		(422	)
Balance at end of year	$	3,188		$	2,321		$	1,900

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Leases

12 Months Ended

Dec. 31, 2015

Leases [Abstract]

Leases

17. Leases

The Company currently leases 50 senior living communities from certain real estate investment trusts (“REITs”). The lease terms are generally for 10-15 years with renewal options for 5-20 years at the Company’s option. Under these lease agreements, the Company is responsible for all operating costs, maintenance and repairs, insurance and property taxes.

The following table summarizes each of the Company’s facility lease agreements as of December 31, 2015 (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	%	$	9.5		$	4.6
Ventas	October 18, 2005		1		19.5	(4) (Two five-year renewals)		8	%		0.3			—
Ventas	June 8, 2006		1		19.1	(4) (Two five-year renewals)		8	%		0.6			—
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											15.1			37.5
Accumulated amortization through December 31, 2015											(7.4	)		—
Accumulated deferred gains / lease concessions recognized through December 31, 2015											—			(20.2	)
Net lease acquisition costs / deferred gains / lease concessions as of December 31, 2015										$	7.7		$	17.3

(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 and modification 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 17, 2015, the Company executed amendments to the master lease agreements with Ventas to facilitate up to $24.5 million of leasehold improvements for 10 of the leased communities and extend the lease terms through September 30, 2025, 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 leased communities with HCP to facilitate up to $3.3 million of leasehold improvements for one of the leased communities and extend the respective lease terms through October 31, 2020, with two 10-year renewal extensions available at the Company’s option.

(6) On April 24, 2015, the Company exercised its right to extend the lease term with HCP through April 30, 2026, with one 10-year renewal extension remaining available at the Company’s option.

Ventas

As of December 31, 2015, the Company leased 11 senior living communities from Ventas, Inc. (“Ventas”). During the second quarter of fiscal 2015, the Company executed amendments to the master lease agreements with Ventas to facilitate up to $24.5 million of leasehold improvements for 10 communities within the Ventas lease portfolio and extend the lease terms until September 30, 2025, with two five-year renewal extension available at the Company’s option. The initial lease rates under each of the Ventas Lease Agreements range from 6.75% to 8% and are subject to certain conditional escalation clauses which will be recognized when probable or incurred. The Company incurred $11.4 million in lease acquisition and modification costs related to the Ventas Lease Agreements. These deferred lease acquisition and modification costs are being amortized over the lease terms and are included in facility lease expense in the Company’s Consolidated Statement of Operations and Comprehensive loss. The Company accounts for nine of the Ventas Lease Agreements as an operating lease and two as a Capital lease and financing obligation.

Effective June 27, 2012, the Company closed a lease modification transaction with Ventas which resulted in the Company exchanging two of its owned communities for one of the communities in the existing Ventas lease portfolio and simultaneously leasing back the two communities exchanged (the “Ventas Lease Transaction”). This transaction was the result of negotiations for a solution to the anticipation of the Company not meeting certain lease coverage ratio requirements for its lease portfolio of ten properties with Ventas. The two communities previously owned by the Company are located in East Lansing, Michigan (the “East Lansing Community”) and Raleigh, North Carolina (the “Raleigh Community”) and were exchanged for a community located in Merrillville, Indiana (the “Towne Centre Community”). All three communities continue to be operated by the Company. In conjunction with this transaction, Ventas assumed approximately $18.3 million of existing mortgage debt from Berkadia and the Company received the Towne Centre Community unencumbered. All of the leased communities in the Ventas lease portfolio were modified to be coterminous with the East Lansing and Raleigh Community leases expiring on September 30, 2020, with two 5-year renewal extensions available at the Company’s option, eliminate property-level lease covenants, and contain substantially similar terms and conditions. These leases were re-evaluated by the Company at the modification date and continue to be treated as operating leases. Under the terms of the original lease agreements with Ventas, the Company had previously deposited additional cash collateral of approximately $3.4 million which was returnable to the Company once certain performance targets were reached. However, due to the rebalanced lease portfolio meeting the lease coverage ratio requirements, the Company negotiated the return of these deposits as a condition to the lease modification. Additionally, due to the extension of the lease terms for the Ventas lease portfolio to fiscal 2020, the rights of Ventas to reset the underlying values of the leased communities were deferred for five years.

Pursuant to ASC 840, Leases, the Company performed a sale/leaseback analysis to determine whether the East Lansing Community and Raleigh Community could be removed from its Consolidated Balance Sheets. Based upon the analysis performed, the Company concluded certain aspects of the lease modification would be considered forms of “continuing involvement” which precludes the Company from derecognizing these assets from its Consolidated Balance Sheets under sale/leaseback accounting criteria. Therefore, the Company recorded financing obligations equal to the fair market value of the communities exchanged and the mortgage debt assumed by Ventas. At the end of the lease term, including exercise of any renewal options, the net remaining financing obligation less the net carrying value of the leased assets will be recognized as a non-cash gain on sale of the East Lansing Community and Raleigh Community. Rental payments under these leases will not be reflected as a component of facility lease expense but will be recognized as a reduction of the financing obligation and interest expense based upon the Company’s incremental borrowing rate at the time the transaction was closed. As a result of this transaction, the Company recorded additions to property and equipment of approximately $13.2 million and other assets, primarily consisting of lease intangibles, of approximately $11.8 million within the Company’s Consolidated Balance Sheets which will be depreciated or amortized over the estimated useful lives. The additions to property and equipment were reduced by approximately $4.9 million which represented the unamortized portion of the deferred gain previously recognized by the Company when the Towne Centre Community had been sold in fiscal 2006. Lease intangibles consist of the fair value of in-place leases associated with the Towne Centre Community and the fair value attributable to Ventas deferring its right to reset the underlying values of the lease portfolio five years until fiscal 2020.

HCP

As of December 31, 2015, the Company leased 15 senior living communities from HCP, Inc. (“HCP”). During the fourth quarter of fiscal 2013, the Company executed an amendment to the master lease agreement with HCP to facilitate up to $3.3 million of leasehold improvements for one community within the HCP lease portfolio and extend the initial lease terms for nine communities until October 31, 2020, with two 10-year renewal extensions available at the Company’s option. During the second quarter of fiscal 2015, the Company exercised its right to extend the lease term with HCP for the remaining six communities in the HCP lease portfolio until April 30, 2026, with one 10-year renewal extension available at the Company’s option. The initial lease rates under the HCP Lease Agreements range from 7.25% to 8% and are subject to certain conditional escalation clauses, which will be recognized when probable or incurred. The Company incurred $1.6 million in lease acquisition and modification costs related to the HCP Lease Agreements. These deferred lease acquisition and modification costs are being amortized over the lease terms and are included in facility lease expense in the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company accounts for each of the HCP Lease Agreements as an operating lease.

HCN

As of December 31, 2015, the Company leased 24 senior living communities from Welltower, Inc., formerly Health Care REIT, Inc. (“HCN”). The HCN Lease Agreements each have an initial term of 15 years, with one 15-year renewal extension available at the Company’s option. The initial lease rates under the HCN Lease Agreements range from 7.25% to 8.5% and are subject to certain conditional escalation clauses, which will be recognized when probable or incurred. The initial terms on the HCN Lease Agreements expire on various dates through April 2026. The Company incurred $2.1 million in lease acquisition costs related to the HCN Lease Agreements. These deferred lease acquisition costs are being amortized over the lease terms and are included in facility lease expense in the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company accounts for each of the HCN Lease Agreements as an operating lease.

Facility lease expense in the Company’s Consolidated Statements of Operations and Comprehensive Loss includes rent expense plus amortization expense relating to leasehold acquisition costs offset by the amortization of deferred gains and lease incentives. The Company leases its corporate headquarters in Dallas, Texas, and an office in New York City and has various lease contracts for a duration of 5 years or less on automobiles, buses and office equipment. The lease on the corporate headquarters currently expires on September 30, 2020.

The Company incurred $62.8 million, $60.9 million, and $58.8 million in lease expense during fiscal 2015, 2014, and 2013, respectively. Future minimum lease commitments as of December 31, 2015, are as follows (in thousands):

2016	$	65,135
2017		65,092
2018		64,998
2019		64,939
2020		62,651
Thereafter		250,477
	$	573,292

At December 31, 2015 and 2014, the Company had gross deferred lease costs of $15.1 million and $15.0 million, respectively. Accumulated amortization at December 31, 2015 and 2014 was $7.4 million and $6.0 million, respectively, and amortization expense is expected to be approximately $1.5 million in each of the next five fiscal years. There are various financial covenants and other restrictions in the Company’s lease agreements. The Company was in compliance with all of its lease covenants at December 31, 2015 and 2014.

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Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information (Unaudited)

18. Quarterly Financial Information (Unaudited)

The following table presents certain unaudited quarterly financial information for each of the four quarters ended December 31, 2015 and 2014. 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.

	2015 Calendar Quarters
	First			Second			Third		Fourth
	(In thousands, except per share amounts)
Total revenues	$	98,640		$	101,588		$	104,420	$	107,529
Income from operations		3,718			3,680			5,676		5,761
Net (loss) income and comprehensive (loss) income		(6,039	)		(5,166	)		2,871		(5,950	)
Net (loss) income per share, basic	$	(0.21	)	$	(0.18	)	$	0.10	$	(0.21	)
Net (loss) income per share, diluted	$	(0.21	)	$	(0.18	)	$	0.10	$	(0.21	)
Weighted average shares outstanding, basic		28,565			28,705			28,732		28,749
Weighted average shares outstanding, fully diluted		28,565			28,705			28,733		28,749

	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

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Subsequent Events

12 Months Ended

Dec. 31, 2015

Subsequent Events [Abstract]

Subsequent Events

19. Subsequent Events

Effective February 16, 2016, the Company closed the acquisition of two senior living communities located in Pensacola, Florida, for approximately $48.0 million. The communities consist of 179 assisted living units. The Company obtained financing from Protective Life for $35.0 million of the acquisition price at a fixed rate of 4.38% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources. The Company has not yet completed its initial purchase price allocation for this transaction.

Effective January 26, 2016, the Company closed the acquisition of three senior living communities located in Colby, Park Falls, and Wisconsin Rapids, Wisconsin, for approximately $16.8 million. The communities consist of 138 assisted living units. The Company obtained financing from Protective Life for $11.3 million of the acquisition price at a fixed rate of 4.50% with a 10-year term with the balance of the acquisition price paid from the Company’s existing cash resources. The Company has not yet completed its initial purchase price allocation for this transaction.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Cash and Cash Equivalents and Restricted Cash

Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents. The Company has deposits in banks that exceed Federal Deposit Insurance Corporation insurance limits. Management believes that credit risk related to these deposits is minimal. Restricted cash consists of deposits required by certain lenders as collateral pursuant to letters of credit. The deposit must remain so long as the letter of credit is outstanding which is subject to renewal annually.

Long-Lived Assets

Long-Lived Assets

Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets. At each balance sheet date, the Company reviews the carrying value of its property and equipment to determine if facts and circumstances suggest that they may be impaired or that the depreciation period may need to be changed. The Company considers internal factors such as net operating losses along with external factors relating to each asset, including contract changes, local market developments, and other publicly available information. If an indicator of impairment is identified, the carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flows from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount the carrying value exceeds the fair market value, generally based on discounted cash flows, of the long-lived asset. The Company does not believe there are any indicators of impairment that would require an adjustment to the carrying value of the property and equipment or their remaining useful lives as of December 31, 2015 and 2014.

Assets Held for Sale

Assets Held for Sale

Assets are classified as held for sale when the Company has determined all of the held-for-sale criteria have been met. The Company determines the fair value, net of costs of disposal, of an asset on the date the asset is categorized as held for sale, and the asset is recorded at the lower of its fair value, net of cost of disposal, or carrying value on that date. The Company periodically reevaluates assets held for sale to determine if the assets are still recorded at the lower of fair value, net of cost of disposal, or carrying value. The fair values are generally determined based on market rates, industry trends and recent comparable sales transactions. The actual sales price of these assets could differ significantly from the Company’s estimates.

During the fourth quarter of fiscal 2014, the Company classified four senior living communities as held for sale and determined the assets had an aggregate fair value, net of cost of disposal, that exceeded the carrying values, using level 2 inputs as defined in the accounting standards codification, and a remeasurement write-down of approximately $0.6 million was recorded to adjust the carrying values of the assets held for sale to $35.8 million at December 31, 2014. The four senior living communities were sold during the first quarter of fiscal 2015 in a single transaction for its carrying value. There were no senior living communities classified as held for sale by the Company at December 31, 2015.

Investments in Unconsolidated Joint Ventures

Investments in Unconsolidated Joint Ventures

The Company accounted for its investments in unconsolidated joint ventures under the equity method of accounting. The Company had not consolidated these joint venture interests because the Company had concluded that the other member of each joint venture had substantive kick-out rights or substantive participating rights. Under the equity method of accounting, the Company recorded its investments in the unconsolidated joint ventures at cost and adjusted such investments for its share of the earnings and losses of the joint ventures. On June 30, 2014, the Company acquired 100% of the member interests in these joint ventures. For additional information refer to Note 4, “Acquisitions.”

Off-Balance Sheet Arrangements

Off-Balance Sheet Arrangements

The Company had no material off-balance sheet arrangements at December 31, 2015.

Income Taxes

Income Taxes

Income taxes are computed using the asset and liability method and current income taxes are recorded based on amounts refundable or payable in the current year. Deferred income taxes are recorded based on the estimated future tax effects of loss carryforwards and temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which we expect those carryforwards and temporary differences to be recovered or settled. Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income.

The Company evaluates uncertain tax positions through consideration of accounting and reporting guidance on criteria, measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better financial-statement comparability among different companies. The Company is required to recognize a tax benefit in its financial statements for an uncertain tax position only if management’s assessment is that its position is “more likely than not” (i.e., a greater than 50 percent likelihood) to be upheld on audit based only on the technical merits of the tax position. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as income tax expense.

Revenue Recognition

Revenue Recognition

Resident and health care revenue is recognized at estimated net realizable amounts, based on historical experiences, due from residents in the period in which the rental and other services are provided. Additionally, substantially all community fees received from residents are non-refundable and are recorded initially by the Company as deferred revenue. The deferred amounts are amortized over the respective residents’ initial lease term which is consistent with the contractual obligation associated with the estimated stay of the resident.

Revenues from the Medicaid program accounted for approximately 5% of the Company’s revenue in fiscal 2015 and 4% of the Company’s revenue in each of fiscal 2014 and 2013. During fiscal 2015, 2014, and 2013, 34, 30, and 29, respectively, of the Company’s communities were providers of services under the Medicaid program. Accordingly, these communities were entitled to reimbursement under the foregoing program at established rates that were lower than private pay rates. Patient service revenue for Medicaid patients was recorded at the reimbursement rates as the rates were set prospectively by the applicable state upon the filing of an annual cost report. None of the Company’s communities were providers of services under the Medicare program during fiscal 2015 or 2014.

Laws and regulations governing the Medicaid program are complex and subject to interpretation. The Company believes that it is in compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of potential wrongdoing. While no such regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation as well as significant regulatory action including fines, penalties, and exclusion from the Medicaid program.

Management services revenue was recognized when earned and related to the Company providing certain management and administrative support services under management contracts which were terminated when the Company acquired 100% of the member interests in its unconsolidated joint ventures on June 30, 2014.

Community reimbursement revenue is comprised of reimbursable expenses from the non-consolidated communities that the Company operated under long-term management agreements, which were terminated when the Company acquired 100% of the member interests in its unconsolidated joint ventures on June 30, 2014.

Lease Accounting

Lease Accounting

The Company determines whether to account for its leases as operating, capital or financing leases depending on the underlying terms of the lease agreement. This determination of classification requires significant judgment relating to certain information, including the estimated fair value and remaining economic life of the community, the Company’s cost of funds, minimum lease payments and other lease terms. The lease rates under the Company’s lease agreements are subject to certain conditional escalation clauses which are recognized when probable or incurred and are based on changes in the consumer price index or certain operational performance measures. As of December 31, 2015 and 2014, the Company leased 50 communities, 48 of which the Company classified as operating leases and two of which the Company classified as capital lease and financing obligations. The Company incurs lease acquisition costs and amortizes these costs over the term of the lease agreement. Certain leases entered into by the Company qualified as sale/leaseback transactions, and as such, any related gains have been deferred and are being amortized over the respective lease term. No new communities were leased by the Company during fiscal 2015 or 2014.

Facility lease expense in the Company’s Consolidated Statements of Operations and Comprehensive loss includes rent expense plus amortization expense relating to leasehold acquisition costs offset by the amortization of deferred gains and lease incentives.

Credit Risk and Allowance for Doubtful Accounts

Credit Risk and Allowance for Doubtful Accounts

The Company’s resident receivables are generally due within 30 days from the date billed. Accounts receivable are reported net of an allowance for doubtful accounts, and represent the Company’s estimate of the amount that ultimately will be collected. The adequacy of the Company’s allowance for doubtful accounts is reviewed on an ongoing basis, using historical payment trends, write-off experience, analyses of receivable portfolios by payor source and aging of receivables, as well as a review of specific accounts, and adjustments are made to the allowance as necessary. Credit losses on resident receivables have historically been within management’s estimates, and management believes that the allowance for doubtful accounts adequately provides for expected losses.

Employee Health and Dental Benefits, Workers' Compensation, and Insurance Reserves

Employee Health and Dental Benefits, Workers’ Compensation, and Insurance Reserves

The Company offers certain full-time employees an option to participate in its health and dental plans. The Company is self-insured up to certain limits and is insured if claims in excess of these limits are incurred. The cost of employee health and dental benefits, net of employee contributions, is shared between the corporate office and the senior living communities based on the respective number of plan participants. Funds collected are used to pay the actual program costs, including estimated annual claims, third-party administrative fees, network provider fees, communication costs, and other related administrative costs incurred by the plans. Claims are paid as they are submitted to the Company’s third-party administrator. The Company records a liability for outstanding claims and claims that have been incurred but not yet reported. This liability is based on the historical claim reporting lag and payment trends of health insurance claims. Management believes that the liability for outstanding losses and expenses is adequate to cover the ultimate cost of losses and expenses incurred at December 31, 2015; however, actual claims and expenses may differ. Any subsequent changes in estimates are recorded in the period in which they are determined.

The Company uses a combination of insurance and self-insurance for workers’ compensation. Determining the reserve for workers’ compensation losses and costs that the Company has incurred as of the end of a reporting period involves significant judgments based on projected future events, including potential settlements for pending claims, known incidents which may result in claims, estimates of incurred but not yet reported claims, changes in insurance premiums, estimated litigation costs and other factors. The Company regularly adjusts these estimates to reflect changes in the foregoing factors. However, since this reserve is based on estimates, the actual expenses incurred may differ from the amounts reserved. Any subsequent changes in estimates are recorded in the period in which they are determined.

Advertising

Advertising

Advertising is expensed as incurred. Advertising expenses for the years ended December 31, 2015, 2014, and 2013 were $13.9 million, $12.7 million, and $10.5 million, respectively, and are included as a component of operating expenses within the Consolidated Statements of Operations and Comprehensive Loss.

Net loss Per Share

Net loss Per Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Potentially dilutive securities consist of unvested restricted shares and shares that could be issued under outstanding stock options. Potentially dilutive securities are excluded from the computation of net loss per common share if their effect is antidilutive.

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except for per share amounts):

	Year Ended December 31,
	2015			2014			2013
Net loss	$	(14,284	)	$	(24,126	)	$	(16,504	)
Net loss allocated to unvested restricted shares		—			(598	)		(513	)
Undistributed net loss allocated to common shares	$	(14,284	)	$	(23,528	)	$	(15,991	)
Weighted average shares outstanding — basic		28,688			28,301			27,815
Effects of dilutive securities:
Employee equity compensation plans		—			—			—
Weighted average shares outstanding — diluted		28,688			28,301			27,815
Basic net loss per share	$	(0.50	)	$	(0.83	)	$	(0.58	)
Diluted net loss per share	$	(0.50	)	$	(0.83	)	$	(0.58	)

Awards of unvested restricted stock representing approximately 0.8 million, 0.7 million, and 0.9 million shares were outstanding for the fiscal years ended December 31, 2015, 2014, and 2013, respectively, and are antidilutive. During fiscal 2015, the unvested restricted stock did not meet all of the requirements to be deemed participating securities. Therefore, for current and future reporting periods, (losses) earnings per share will be calculated under the treasury method and the two-class method will no longer be utilized by the Company.

Treasury Stock

Treasury Stock

The Company accounts for treasury stock under the cost method and includes treasury stock as a component of shareholders’ equity. There were no repurchases of the Company’s stock during fiscal 2015 or 2014. The Company has repurchased 144,315 shares during the first quarter of fiscal 2016 through the date of the filing of our 2015 annual report on Form 10-K with the SEC.

Stock-Based Compensation

Stock-Based Compensation

The Company recognizes compensation expense for share-based payment awards to certain employees and directors, including grants of stock options and awards of restricted stock, in the Consolidated Statements of Operations and Comprehensive Loss based on their fair values.

On May 8, 2007, the Company’s stockholders approved the 2007 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation (as amended, the “2007 Plan”) which provides for, among other things, the grant of restricted stock awards and stock options to purchase shares of the Company’s common stock. The 2007 Plan authorizes the Company to issue up to 4.6 million shares of common stock and the Company has reserved 2.0 million shares of common stock for future issuance pursuant to awards under the 2007 Plan. Effective May 8, 2007, the 1997 Omnibus Stock and Incentive Plan (as amended, the “1997 Plan”) was terminated and no additional shares will be granted under the 1997 Plan. The Company has reserved 0.3 million shares of common stock for future issuance upon the exercise of outstanding stock options pursuant to the 1997 Plan.

Segment Information

Segment Information

The Company evaluates the performance and allocates resources of its senior living facilities based on current operations and market assessments on a property-by-property basis. The Company does not have a concentration of operations geographically or by product or service as its management functions are integrated at the property level. The Company has determined that all of its operating units meet the criteria in Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting, to be aggregated into one reporting segment. As such, the Company operates in one segment.

Recently Issued Accounting Guidance

Recently Issued Accounting Guidance

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases. ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective beginning in 2019. Early adoption of ASU 2016-02 as of its issuance is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. We are currently evaluating the impact of adopting the new leases standard on our consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes – Balance Sheet Reclassification of Deferred Taxes (Topic 740). ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted and the amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company early adopted ASU 2015-17 in the fourth quarter of 2015 on a prospective basis and included the current portion of deferred tax assets within the non-current portion of deferred tax liabilities within the Company’s Consolidated Balance Sheet. The Company did not adjust its prior period consolidated financial statements as a result of the adoption of ASU 2015-17.

In September 2015, the FASB issued ASU 2015-16, Business Combinations — Simplifying the Accounting for Measurement-Period Adjustments. ASU 2015-16 eliminates the requirement for an acquirer in a business combination to account for the measurement-period adjustment retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. ASU 2015-16 is applied prospectively and is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the impact the adoption of ASU 2015-16 will have on the Company’s consolidated financial statements and disclosures.

In April 2015, the FASB issued ASU 2015-03, Interest — Imputation of Interest- Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30). The amendments in ASU No. 2015-03 requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. ASU 2015-03 requires retrospective application and will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted. The Company early adopted the provisions of ASU 2015-03 as of October 1, 2015, and incorporated the provisions of this update to its consolidated financial statements upon adoption. As a result of adoption of ASU 2015-03, at December 31, 2015, and 2014, approximately $8.5 million and $6.3 million, respectively, of debt issuance costs, net of accumulated amortization, were reclassified within the Company’s Consolidated Balance Sheets from other assets to notes payable. The adoption of ASU 2015-03 did not have an impact on the Company’s financial condition or results of operations.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. ASU 2014-09 is effective for annual periods beginning after December 15, 2017. The Company is currently evaluating the impact the adoption of ASU 2014-09 will have on the Company’s consolidated financial statements and disclosures.

Use of Estimates and Critical Accounting Policies

Use of Estimates and Critical Accounting Policies

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements and related footnotes. Management bases its estimates and assumptions on historical experience, observance of industry trends and various other sources of information and factors, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially could result in materially different results under different assumptions and conditions. The Company believes revenue recognition, credit risk and allowance for doubtful accounts, investments in unconsolidated joint ventures, lease accounting, employee health and dental benefits, workers’ compensation and insurance reserves, long-lived assets, assets held for sale, and income taxes are its most critical accounting policies and require management’s most difficult and subjective judgments.

Reclassifications

Reclassifications

Certain reclassifications have been made to prior period amounts to conform to current period presentation. The Company’s Consolidated Statements of Cash Flows now reflect changes in deferred resident revenue separately from other components of deferred income. Accordingly, the Company reclassified changes in deferred resident revenue from changes in deferred income to a separate line item within the Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013, to be consistent with the presentation for the year ended December 31, 2015. This reclassification had no impact on net cash provided by operating activities.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Computation of Basic and Diluted Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except for per share amounts):

	Year Ended December 31,
	2015			2014			2013
Net loss	$	(14,284	)	$	(24,126	)	$	(16,504	)
Net loss allocated to unvested restricted shares		—			(598	)		(513	)
Undistributed net loss allocated to common shares	$	(14,284	)	$	(23,528	)	$	(15,991	)
Weighted average shares outstanding — basic		28,688			28,301			27,815
Effects of dilutive securities:
Employee equity compensation plans		—			—			—
Weighted average shares outstanding — diluted		28,688			28,301			27,815
Basic net loss per share	$	(0.50	)	$	(0.83	)	$	(0.58	)
Diluted net loss per share	$	(0.50	)	$	(0.83	)	$	(0.58	)

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2015

January 1, 2014 Acquisitions [Member]

Schedule of Pro Forma Combined Results of Operations

The unaudited pro forma combined results of operations have been prepared as if the acquisitions had occurred on January 1, 2014, as follows (in thousands):

	December 31,
	2015			2014
Total revenues	$	425,789		$	416,518
Loss before income taxes	$	(3,616	)	$	(40,880	)

January 1, 2013 Acquisitions [Member]

Schedule of Pro Forma Combined Results of Operations

The unaudited pro forma combined results of operations have been prepared as if the acquisitions had occurred on January 1, 2013, as follows (in thousands):

	December 31,
	2014			2013
Total revenues	$	400,653		$	378,737
Loss before income taxes	$	(15,655	)	$	(25,963	)

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Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consists of the following (in thousands):

		December 31,
	Asset Lives	2015		2014
Land		$	61,254	$	54,115
Land improvements	5 to 20 years		17,613		13,209
Buildings and building improvements	10 to 40 years		897,668		764,794
Furniture and equipment	5 to 10 years		42,879		34,921
Automobiles	5 to 7 years		4,977		3,829
Leasehold improvements	(1)		58,466		41,679
Construction in progress	NA		5,700		1,520
			1,088,557		914,067
Less accumulated depreciation and amortization.			197,985		166,454
Property and equipment, net		$	890,572	$	747,613

(1) Leasehold improvements are amortized over the shorter of the useful life of the asset or the remaining lease term.

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Other Assets (Tables)

12 Months Ended

Dec. 31, 2015

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Assets

Other assets consist of the following (in thousands):

	December 31,
	2015		2014
Deferred lease costs, net		8,211		9,684
Security and other deposits		12,953		11,324
In-place lease intangibles, net		7,719		7,443
Other		2,310		2,732
	$	31,193	$	31,183

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Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2015

Text Block [Abstract]

Schedule of Accrued Expenses

Accrued expenses consist of the following (in thousands):

	December 31,
	2015		2014
Accrued salaries, bonuses and related expenses	$	11,121	$	9,865
Accrued property taxes		14,087		13,050
Accrued interest		3,035		2,485
Accrued health claims and workers comp		3,230		4,026
Accrued professional fees		748		771
Other		2,079		1,957
	$	34,300	$	32,154

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Notes Payable (Tables)

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Schedule of Notes Payable

Notes payable consists of the following (in thousands):

Lender	Average Monthly Payment		Net Book  Value Of Collateral(1)		Interest Rate		Maturity Date		Notes Payable December 31,
									2015				2014
Fannie Mae		—		—		—	(4)		$	—			$	26,809
Fannie Mae		—		—		—	(4)			—				5,372
Fannie Mae		78		15,214		5.69	August 2021			12,716				12,915
Fannie Mae		26		5,594		4.97	October 2021			4,502				4,582
Fannie Mae		101		21,093		4.92	October 2021			17,779				18,096
Fannie Mae		27		21,093		5.19	October 2021			4,978				—
Fannie Mae		117		24,283		4.92	November 2021			20,674				21,041
Fannie Mae		27		6,273		4.38	March 2022			5,036				5,132
Fannie Mae		60		12,507		4.76	April 2022			10,814				11,007
Fannie Mae		135		28,287		4.69	April 2022			24,584				25,026
Fannie Mae		60		15,981		4.48	May 2022			11,141				11,348
Fannie Mae		144		34,998		4.34	November 2022			27,462				27,970
Fannie Mae		33		7,685		4.50	November 2022			6,113				6,222
Fannie Mae		43		26,987		5.49	November 2022			7,592				—
Fannie Mae		84		18,439		4.32	January 2023			16,164				16,460
Fannie Mae		49		18,439		5.39	January 2023			8,684				—
Fannie Mae		39		8,682		4.58	January 2023			7,224				7,350
Fannie Mae		85		18,782		4.66	April 2023			15,700				15,967
Fannie Mae		18		5,524		5.46	April 2023			3,150				—
Fannie Mae		45		8,700		5.93	October 2023			7,411				7,506
Fannie Mae		67		14,242		5.50	November 2023			11,526				11,686
Fannie Mae		67		13,028		5.38	November 2023			11,591				11,756
Fannie Mae		282		55,740		5.56	January 2024			48,071				48,722
Fannie Mae		632		118,792		4.24	July 2024(5)			125,677				134,650
Fannie Mae		120		27,851		4.48	July 2024			23,196				23,572
Fannie Mae		81		20,660		4.30	July 2024			16,035				16,304
Fannie Mae		134		29,273		4.59	September 2024			25,666				26,070
Fannie Mae		54		11,550		4.70	September 2024			10,200				10,357
Fannie Mae		53		13,093		4.50	January 2025			10,258				10,406
Fannie Mae		95		6,579		4.46	January 2025			18,651				18,923
Fannie Mae		70		16,630		4.35	February 2025			13,909				—
Fannie Mae		109		9,434		3.85	March 2025			22,939				—
Fannie Mae		102		26,078		3.84	April 2025			21,548				—
Fannie Mae		47		10,404		4.55	June 2025			9,087				—
Fannie Mae		59		13,014		4.79	June 2025			11,095				—
Fannie Mae		81		16,535		5.30	June 2025			14,029				14,237
Fannie Mae		58		13,677		4.69	October 2025			11,122				—
Fannie Mae		44		10,380		4.70	October 2025			8,406				—
Fannie Mae		273		41,027		4.68	December 2025			52,774				—
Fannie Mae		62		12,144		5.43	April 2026			10,761				10,908
Protective Life		96		26,385		3.55		April 2025				21,081				—
Protective Life		49		12,207		4.25		August 2025				9,882				—
Protective Life		65		19,045		4.25		September 2025				13,145				—
Protective Life		138		34,327		4.25		November 2025				27,961				—
Berkadia		—		—		—		(6)				—				13,777
Berkadia		—		—		—		(7)				—				4,550
Berkadia		—		—		—		(6)				—				9,300
Berkadia		—		—		—		(8)				—				8,472
Berkadia		—		—		—		(7)				—				9,500
Berkadia		48		14,359		(3)		July 2017(9)				11,800				11,800
Wells Fargo		—		—		—		(10)				—				21,600
HUD		16		5,759		4.48		September 2045				3,093				3,142
Insurance Financing		71		—		1.73		October 2016				711				—
Insurance Financing		138		—		1.73		April 2016				553				—
Insurance Financing		208		—		1.79		March 2016				625				3,095
Insurance Financing		—		—		—		February 2015				—				390
Insurance Financing		—		—		—		September 2015				—				580
	$	4,490				4.60%(2)						777,116				646,600
Less deferred loan costs, net												8,533				6,331
												768,583				640,269
Less current portion												13,634				47,385
											$	754,949			$	592,884

(1) 69 of the facilities owned by the Company are encumbered by mortgage debt and are provided as collateral under their respective loan agreements.

(2) Weighted average interest rate on current fixed interest rate debt outstanding.

(3) Variable interest rate of LIBOR plus 4.50%, which was 4.79% at December 31, 2015.

(4) On November 12, 2015, the Company obtained new long-term financing from Berkadia, who later sold the loans to Fannie Mae, to replace this mortgage debt with a fixed interest rate of 4.68% and a 10-year term.

(5) On August 6, 2015, approximately $6.8 million of this outstanding mortgage debt was assumed by the buyer in conjunction with the Sedgwick Sale Transaction. For additional information refer to Note 5, “Dispositions.”

(6) On January 22, 2015, this mortgage debt was repaid or defeased in conjunction with the Four Property Sale Transaction. For additional information refer to Note 5, “Dispositions.”

(7) On February 17, 2015, the Company obtained new long-term financing from Fannie Mae to replace this mortgage debt with a fixed interest rate of 3.85% and a 10-year term.

(8) On September 24, 2015, the Company obtained new long-term financing from Fannie Mae to replace this mortgage debt with a fixed interest rate of 4.70% and a 10-year term.

(9) On February 4, 2015, the Company exercised its right to extend the maturity date with Berkadia to July 10, 2017.

(10) On March 5, 2015, the Company obtained new long-term financing from Fannie Mae to replace this mortgage debt with a fixed interest rate of 3.84% and a 10-year term.

Summary of Aggregate Scheduled Maturities of Notes Payable

The aggregate scheduled maturities of notes payable at December 31, 2015 are as follows (in thousands):

2016		14,698
2017		25,318
2018		14,158
2019		14,829
2020		15,443
Thereafter		692,670
	$	777,116

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Option Activity and Related Information

A summary of the Company’s stock option activity and related information for the years ended December 31, 2015, 2014, and 2013 is presented below:

	Outstanding at Beginning of Year		Granted		Exercised		Forfeited		Outstanding End of Year		Options Exercisable
December 31, 2015
Shares		6,000		—		3,000		—		3,000		3,000
Weighted average price	$	8.44		—	$	5.90		—	$	10.97	$	10.97
December 31, 2014
Shares		19,000		—		13,000		—		6,000		6,000
Weighted average price	$	7.10		—	$	6.48		—	$	8.44	$	8.44
December 31, 2013
Shares		265,930		—		246,930		—		19,000		19,000
Weighted average price	$	6.28		—	$	6.21		—	$	7.10	$	7.10

Summary of Options Outstanding and Options Exercisable

The following table summarizes information relating to the Company’s options outstanding and options exercisable as of December 31, 2015.

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding  at End of Year		Weighted  Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable  at End of Year		Weighted Average Exercise Price
$10.97		3,000		.35	$	10.97		3,000	$	10.97

Restricted Stock Awards Activity and Related Information

the grant date, net of forfeitures. A summary of the Company’s restricted common stock awards activity and related information for the years ended December 31, 2015, 2014, and 2013 is presented below:

	Outstanding at Beginning of Year		Issued		Vested		Forfeited		Outstanding End of Year
December 31, 2015
Shares		702,718		467,944		358,716		28,636		783,310
December 31, 2014
Shares		870,217		350,716		406,072		112,143		702,718
December 31, 2013
Shares		803,218		403,715		312,980		23,736		870,217

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Taxes

The provision (benefit) for income taxes consists of the following (in thousands):

	Year Ended December 31,
	2015		2014		2013
Current:
Federal	$	—	$	—	$	(5,411	)
State		900		719		377
Deferred:
Federal		—		—		6,251
State		—		—		4,542
	$	900	$	719	$	5,759

Summary of Provision for Income Taxes Differed from Amounts of Income Tax Provision Determined by Applying U.S. Federal Statutory Income Tax Rate to Income Before Benefit for Income Taxes

The provision (benefit) for income taxes differed from the amounts of income tax provision (benefit) determined by applying the U.S. federal statutory income tax rate to income before provision (benefit) for income taxes as a result of the following (in thousands):

	Year Ended December 31,
	2015			2014			2013
Tax (benefit) provision at federal statutory rates	$	(4,515	)	$	(7,958	)	$	(3,653	)
State income tax expense, net of federal effects		64			(90	)		401
Federal and state income tax return true up		—			—			325
State effective rate changes		—			6			(20	)
Change in deferred tax asset valuation allowance		4,986			8,456			8,810
Other		365			305			(104	)
	$	900		$	719		$	5,759

Summary of Deferred Tax Assets and Liabilities

A summary of the Company’s deferred tax assets and liabilities, are as follows (in thousands):

	December 31,
	2015			2014
Deferred tax assets:
Deferred gains on sale/leaseback transactions	$	6,176		$	7,027
Net operating loss carryforward (expiring up to 2032)		15,144			12,556
Compensation costs		1,804			972
Investments in unconsolidated joint ventures		—			—
Capital loss carryforward		—			—
Other		2,802			1,806
Total deferred tax assets		25,926			22,361
Valuation Allowance		(22,252	)		(17,266	)
Total deferred tax assets, net		3,674			5,095
Deferred tax liabilities:
Depreciation and amortization		(3,674	)		(5,095	)
Total deferred tax assets, net	$	—		$	—
Current deferred tax assets, net	$	—		$	460
Long-term deferred tax (liabilities) assets, net		—			(460	)
Total deferred tax assets, net	$	—		$	—

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Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and fair values of financial instruments at December 31, 2015 and 2014 are as follows (in thousands):

	2015				2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	56,087	$	56,087	$	39,209	$	39,209
Restricted cash		13,159		13,159		12,241		12,241
Notes payable		777,116		724,769		646,600		647,449

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Allowance for Doubtful Accounts (Tables)

12 Months Ended

Dec. 31, 2015

Text Block [Abstract]

Schedule of Allowance for Doubtful Accounts

The components of the allowance for doubtful accounts are as follows (in thousands):

	December 31,
	2015			2014			2013
Balance at beginning of year	$	2,321		$	1,900		$	1,825
Provision for bad debts, net of recoveries		1,192			717			497
Write-offs and other		(325	)		(296	)		(422	)
Balance at end of year	$	3,188		$	2,321		$	1,900

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Leases (Tables)

12 Months Ended

Dec. 31, 2015

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, 2015 (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	%	$	9.5		$	4.6
Ventas	October 18, 2005		1		19.5	(4) (Two five-year renewals)		8	%		0.3			—
Ventas	June 8, 2006		1		19.1	(4) (Two five-year renewals)		8	%		0.6			—
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											15.1			37.5
Accumulated amortization through December 31, 2015											(7.4	)		—
Accumulated deferred gains / lease concessions recognized through December 31, 2015											—			(20.2	)
Net lease acquisition costs / deferred gains / lease concessions as of December 31, 2015										$	7.7		$	17.3

(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 and modification 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 17, 2015, the Company executed amendments to the master lease agreements with Ventas to facilitate up to $24.5 million of leasehold improvements for 10 of the leased communities and extend the lease terms through September 30, 2025, 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 leased communities with HCP to facilitate up to $3.3 million of leasehold improvements for one of the leased communities and extend the respective lease terms through October 31, 2020, with two 10-year renewal extensions available at the Company’s option.

(6) On April 24, 2015, the Company exercised its right to extend the lease term with HCP through April 30, 2026, with one 10-year renewal extension remaining available at the Company’s option.

Summary of Future Minimum Lease Commitments

The Company incurred $62.8 million, $60.9 million, and $58.8 million in lease expense during fiscal 2015, 2014, and 2013, respectively. Future minimum lease commitments as of December 31, 2015, are as follows (in thousands):

2016	$	65,135
2017		65,092
2018		64,998
2019		64,939
2020		62,651
Thereafter		250,477
	$	573,292

At December 31, 2015 and 2014, the Company had gross deferred lease costs of $15.1

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Quarterly Financial Information (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

The following table presents certain unaudited quarterly financial information for each of the four quarters ended December 31, 2015 and 2014. 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.

	2015 Calendar Quarters
	First			Second			Third		Fourth
	(In thousands, except per share amounts)
Total revenues	$	98,640		$	101,588		$	104,420	$	107,529
Income from operations		3,718			3,680			5,676		5,761
Net (loss) income and comprehensive (loss) income		(6,039	)		(5,166	)		2,871		(5,950	)
Net (loss) income per share, basic	$	(0.21	)	$	(0.18	)	$	0.10	$	(0.21	)
Net (loss) income per share, diluted	$	(0.21	)	$	(0.18	)	$	0.10	$	(0.21	)
Weighted average shares outstanding, basic		28,565			28,705			28,732		28,749
Weighted average shares outstanding, fully diluted		28,565			28,705			28,733		28,749

	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

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Organization - Additional Information (Detail)	Dec. 31, 2015 Community Independent_Living_Unit State Resident
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Senior living communities operated by company	121
Number of states in which senior living communities operated | State	23
Aggregate capacity of residents in company operated senior living communities | Resident	15,400
Senior living communities owned by company	71
Senior living communities on lease by company	50
Number of home care agency | Independent_Living_Unit	1

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Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016 shares	Dec. 31, 2014 USD ($) Community	Dec. 31, 2015 USD ($) Community Segment shares	Dec. 31, 2014 USD ($) Community shares	Dec. 31, 2013 USD ($) Community shares	Dec. 31, 2009 shares	Jun. 30, 2014
Accounting Policies [Line Items]
Communities classified as held for sale		4	0
Aggregate fair value less cost of disposal | $		$ 600
Assets held for sale | $		$ 35,761		$ 35,761
Percentage of member interest in joint ventures							100.00%
Uncertain tax position maximum percentage			50.00%
Percentage of revenue from Medicare and Medicaid programs			5.00%	4.00%	4.00%
Provider of services under Medicaid program, number of communities			34	30	29
Provider of services under Medicare program, number of communities			0	0
Senior living communities on lease by company			50
Communities on operating lease			48
Senior living communities on capital lease and financing obligations			2
Senior living communities on new lease by company		0	0	0
Resident receivables due period			30 days
Advertising expenses | $			$ 13,900	$ 12,700	$ 10,500
Outstanding unvested restricted stock | shares			800,000	700,000	900,000
Purchase common stock shares | shares			0	0	0	349,800
Number of reporting segment | Segment			1
Number of operating segment | Segment			1
Debt issuance cost, net of accumulated amortization | $		$ 6,300	$ 8,500	$ 6,300
Scenario Forecast [Member]
Accounting Policies [Line Items]
Purchase common stock shares | shares	144,315
2007 Omnibus Stock and Incentive Plan [Member]
Accounting Policies [Line Items]
Authorized shares of common stock | shares			4,600,000
Number of shares of common stock reserved for future issuance | shares			2,000,000
1997 Plan [Member]
Accounting Policies [Line Items]
Number of shares of common stock reserved for future issuance | shares			300,000
Management Services Revenue [Member]
Accounting Policies [Line Items]
Percentage of member interest in joint ventures							100.00%
Community Reimbursement Revenue [Member]
Accounting Policies [Line Items]
Percentage of member interest in joint ventures							100.00%

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Summary of Significant Accounting Policies - Computation of Basic and Diluted Net Loss Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Accounting Policies [Abstract]
Net loss	$ (5,950)	$ 2,871	$ (5,166)	$ (6,039)	$ (3,901)	$ (5,759)	$ (9,819)	$ (4,647)	$ (14,284)	$ (24,126)	$ (16,504)
Net loss allocated to unvested restricted shares										(598)	(513)
Undistributed net loss allocated to common shares									$ (14,284)	$ (23,528)	$ (15,991)
Weighted average shares outstanding - basic	28,749	28,732	28,705	28,565	28,387	28,371	28,298	28,146	28,688	28,301	27,815
Effects of dilutive securities:
Employee equity compensation plans									0	0	0
Weighted average shares outstanding - diluted	28,749	28,733	28,705	28,565	28,387	28,371	28,298	28,146	28,688	28,301	27,815
Basic net loss per share	$ (0.21)	$ 0.10	$ (0.18)	$ (0.21)	$ (0.13)	$ (0.20)	$ (0.34)	$ (0.16)	$ (0.50)	$ (0.83)	$ (0.58)
Diluted net loss per share	$ (0.21)	$ 0.10	$ (0.18)	$ (0.21)	$ (0.13)	$ (0.20)	$ (0.34)	$ (0.16)	$ (0.50)	$ (0.83)	$ (0.58)

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Transactions with Affiliates - Additional Information (Detail) - Community	1 Months Ended
	Dec. 31, 2007	Dec. 31, 2015	Jun. 30, 2014
Schedule of Equity Method Investments [Line Items]
Percentage of member interest			100.00%
SHPIII [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment percentage		90.00%
SHPIII/CSL Management Agreement [Member]
Schedule of Equity Method Investments [Line Items]
Initial term of lease	10 years
Management fees percentage	5.00%
Percentage of member interest			100.00%
Equity method investment percentage		10.00%
Number of senior living communities		3

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Acquisitions - Additional Information (Detail)									12 Months Ended
	Oct. 30, 2015 USD ($) Community Assisted_Living_Unit	Sep. 30, 2015 USD ($) Community Assisted_Living_Unit	Aug. 11, 2015 USD ($) Community Assisted_Living_Unit	Jul. 28, 2015 USD ($) Community Assisted_Living_Unit	May. 29, 2015 USD ($) Community Independent_Living_Unit Assisted_Living_Unit	May. 21, 2015 USD ($) Community Assisted_Living_Unit	Mar. 27, 2015 USD ($) Community Independent_Living_Unit Assisted_Living_Unit	Jan. 13, 2015 USD ($) Community Assisted_Living_Unit	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Business Acquisition [Line Items]
Additions to property and equipment									$ 148,000,000	$ 146,100,000
Finite lived intangible asset acquired in place leases during period									14,600,000
Revenue generated from acquisition									17,200,000	16,600,000
Losses before income taxes due to acquisition									$ (6,500,000)	$ (4,600,000)
Heritage Transaction [Member]
Business Acquisition [Line Items]
Acquisition cost					$ 14,900,000
Number of acquisition closed | Community					1
Number of assisted living units | Assisted_Living_Unit					44
Transaction cost of acquisition					$ 400,000
Long term finance					$ 11,200,000
Long term fixed interest rate					4.79%
Maximum period for expansion of permanent financing					10 years
Number of independent living units | Independent_Living_Unit					64
Emerald Transaction [Member]
Business Acquisition [Line Items]
Acquisition cost						$ 12,000,000
Number of acquisition closed | Community						2
Number of assisted living units | Assisted_Living_Unit						79
Transaction cost of acquisition						$ 200,000
Long term finance						$ 9,200,000
Long term fixed interest rate						4.55%
Maximum period for expansion of permanent financing						10 years
Baytown Transaction [Member]
Business Acquisition [Line Items]
Acquisition cost							$ 29,600,000
Number of acquisition closed | Community							1
Number of assisted living units | Assisted_Living_Unit							120
Transaction cost of acquisition							$ 200,000
Long term finance							$ 21,400,000
Long term fixed interest rate							3.55%
Maximum period for expansion of permanent financing							10 years
Number of independent living units | Independent_Living_Unit							9
Green Bay Transaction [Member]
Business Acquisition [Line Items]
Acquisition cost								$ 18,300,000
Number of acquisition closed | Community								1
Number of assisted living units | Assisted_Living_Unit								78
Transaction cost of acquisition								$ 100,000
Long term finance								$ 14,100,000
Long term fixed interest rate								4.35%
Maximum period for expansion of permanent financing								10 years
Mahomet Transaction [Member]
Business Acquisition [Line Items]
Acquisition cost		$ 15,500,000
Number of acquisition closed | Community		1
Number of assisted living units | Assisted_Living_Unit		78
Transaction cost of acquisition		$ 100,000
Long term finance		$ 11,100,000
Long term fixed interest rate		4.69%
Maximum period for expansion of permanent financing		10 years
Indianapolis Transaction [Member]
Business Acquisition [Line Items]
Acquisition cost			$ 21,000,000
Number of acquisition closed | Community			1
Number of assisted living units | Assisted_Living_Unit			124
Transaction cost of acquisition			$ 100,000
Long term finance			$ 13,200,000
Long term fixed interest rate			4.25%
Maximum period for expansion of permanent financing			10 years
Indianapolis Transaction [Member] | 4.25 % [Member]
Business Acquisition [Line Items]
Long term fixed interest rate			4.25%
Indianapolis Transaction [Member] | Maximum [Member] | 4.25 % [Member]
Business Acquisition [Line Items]
Loan commitment			$ 2,600,000
Columbiana Transaction [Member]
Business Acquisition [Line Items]
Acquisition cost				$ 13,300,000
Number of acquisition closed | Community				1
Number of assisted living units | Assisted_Living_Unit				68
Transaction cost of acquisition				$ 100,000
Long term finance				$ 9,900,000
Long term fixed interest rate				4.25%
Maximum period for expansion of permanent financing				10 years
Columbiana Transaction [Member] | 4.25 % [Member]
Business Acquisition [Line Items]
Long term fixed interest rate				4.25%
Virginia Beach Transaction [Member]
Business Acquisition [Line Items]
Acquisition cost	$ 38,000,000
Number of acquisition closed | Community	1
Number of assisted living units | Assisted_Living_Unit	111
Transaction cost of acquisition	$ 100,000
Long term finance	$ 28,000,000
Long term fixed interest rate	4.25%
Maximum period for expansion of permanent financing	10 years
Virginia Beach Transaction [Member] | 4.25 % [Member]
Business Acquisition [Line Items]
Long term fixed interest rate	4.25%

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Acquisitions - Schedule of Pro Forma Combined Results of Operations (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
January 1, 2013 Acquisitions [Member]
Loans At Acquisition Date [Line Items]
Total revenues		$ 400,653	$ 378,737
Loss before income taxes		(15,655)	$ (25,963)
January 1, 2014 Acquisitions [Member]
Loans At Acquisition Date [Line Items]
Total revenues	$ 425,789	416,518
Loss before income taxes	$ (3,616)	$ (40,880)

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Acquisitions - Additional Information 1 (Detail) $ in Millions	Dec. 17, 2014 USD ($) Community Assisted_Living_Unit	Aug. 27, 2014 USD ($) Community Assisted_Living_Unit	Aug. 04, 2014 USD ($) Community Independent_Living_Unit Assisted_Living_Unit
Roanoke Transaction [Member]
Business Acquisition [Line Items]
Number of acquisition closed | Community			1
Acquisition cost			$ 16.8
Number of assisted living units | Assisted_Living_Unit			60
Transaction cost of acquisition			$ 0.2
Long term finance of Fannie Mae			$ 12.9
Long term fixed rate of Fannie Mae			4.59%
Maximum period for expansion of permanent financing			10 years
Number of independent living units | Independent_Living_Unit			34
Canton Transaction [Member]
Business Acquisition [Line Items]
Number of acquisition closed | Community	1
Acquisition cost	$ 14.6
Number of assisted living units | Assisted_Living_Unit	49
Transaction cost of acquisition	$ 0.1
Long term finance of Fannie Mae	$ 10.4
Long term fixed rate of Fannie Mae	4.50%
Maximum period for expansion of permanent financing	10 years
Plymouth Transaction [Member]
Business Acquisition [Line Items]
Number of acquisition closed | Community		1
Acquisition cost		$ 13.5
Number of assisted living units | Assisted_Living_Unit		69
Transaction cost of acquisition		$ 0.1
Long term finance of Fannie Mae		$ 10.4
Long term fixed rate of Fannie Mae		4.70%
Maximum period for expansion of permanent financing		10 years

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Acquisitions - Additional Information 2 (Detail) $ in Thousands		1 Months Ended	3 Months Ended	12 Months Ended
	Aug. 04, 2014 USD ($) Community Assisted_Living_Unit	Jun. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Business Acquisition [Line Items]
Percentage of member's equity interest		100.00%	100.00%
Equity investment valuation gain				$ 1,519
Cash proceeds				$ 2,532
SHPIII/CSL Transaction [Member]
Business Acquisition [Line Items]
Percentage of member's equity interest		100.00%	100.00%
Amount of equity interest		$ 83,600
Percentage of equity interest in joint venture		90.00%
Percentage of equity interest owned by company		10.00%
Equity investment valuation gain			$ 1,500
Cash proceeds			$ 2,500
Oshkosh Transaction [Member]
Business Acquisition [Line Items]
Number of acquisition closed | Community	1
Acquisition cost	$ 17,100
Number of assisted living units | Assisted_Living_Unit	90
Transaction cost of acquisition	$ 100
Long term finance of Fannie Mae	$ 13,200
Long term fixed rate of Fannie Mae	4.59%
Maximum period for expansion of permanent financing	10 years

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Acquisitions - Additional Information 3 (Detail) $ in Millions		1 Months Ended	3 Months Ended	12 Months Ended
	Mar. 26, 2014 USD ($) Community Assisted_Living_Unit	Jun. 30, 2014 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Business Acquisition [Line Items]
Transaction cost related to acquisition		$ 0.3
Additions to property and equipment				$ 148.0	$ 146.1
Finite lived intangible asset acquired in place leases during period				14.6
Revenue generated from acquisition				17.2	16.6
Losses before income taxes due to acquisition				(6.5)	(4.6)
Property and Equipment [Member]
Business Acquisition [Line Items]
valuation adjustments			$ 0.4	$ 0.4
Other Asset [Member]
Business Acquisition [Line Items]
Finite lived intangible asset acquired in place leases during period					$ 14.1
Aspen Grove Transaction [Member]
Business Acquisition [Line Items]
Long term fixed rate of Fannie Mae	5.43%
Maximum period for expansion of permanent financing	12 years
Acquisition cost	$ 14.6
Number of acquisition closed | Community	1
Number of assisted living units | Assisted_Living_Unit	78
Transaction cost of acquisition	$ 0.2
Long term finance of Fannie Mae	$ 11.0
SHPIII/CSL Miami [Member]
Business Acquisition [Line Items]
Mortgage debt		$ 16.4
Term period of mortgage loans		10 years
Long term fixed rate of Fannie Mae		4.30%
Term period of principal amortized		30 years
SHPIII/CSL Richmond Heights [Member]
Business Acquisition [Line Items]
Mortgage debt		$ 23.7
Term period of mortgage loans		10 years
Long term fixed rate of Fannie Mae		4.48%
Term period of principal amortized		30 years
SHPIII/CSL Levis Commons [Member]
Business Acquisition [Line Items]
Interim financing obtained for acquisition		$ 21.6
Interim financing variable rate		2.75%
Maximum period for expansion of permanent financing		24 months
Interim financing variable rate description				LIBOR plus 2.75%

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Dispositions - Additional Information (Detail) $ in Thousands		3 Months Ended	12 Months Ended
	Aug. 06, 2015 USD ($) Community	Dec. 31, 2014 USD ($)	Dec. 31, 2015 USD ($) Community	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from disposition of assets			$ 43,463	$ 796	$ 1,460
Aggregate fair value less cost of disposal		$ 600
Four Property Sale Transaction [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Transaction proceeds			$ 36,500
Number of communities sold | Community			4
Proceeds from disposition of assets			$ 35,700
Aggregate fair value less cost of disposal				$ 600
Sedgwick Sale Transaction [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Transaction proceeds	$ 14,800
Number of communities sold | Community	1
Outstanding debt assumed by buyer	$ 6,800
Gain on sale of assets	6,400
Proceeds from disposition of assets	$ 8,000

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Property and Equipment - Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,088,557	$ 914,067
Less accumulated depreciation and amortization	197,985	166,454
Property and equipment, net	890,572	747,613
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	5,700	1,520
Land [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	61,254	54,115
Land improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 17,613	13,209
Land improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Asset Lives	5 years
Land improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Asset Lives	20 years
Building and building improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 897,668	764,794
Building and building improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Asset Lives	10 years
Building and building improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Asset Lives	40 years
Furniture And Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 42,879	34,921
Furniture And Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Asset Lives	5 years
Furniture And Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Asset Lives	10 years
Automobiles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 4,977	3,829
Automobiles [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Asset Lives	5 years
Automobiles [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Asset Lives	7 years
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 58,466	$ 41,679

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Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Capitalized computer software development costs		$ 3,000	$ 3,000
Capitalized computer software development costs, accumulated depreciation and amortization		2,600	2,500
Assets under capital lease included in Property and Equipment		1,088,557	914,067
Assets under capital lease, accumulated amortization		197,985	166,454
Assets Held under Capital Leases [Member]
Property, Plant and Equipment [Line Items]
Assets under capital lease included in Property and Equipment		32,400	32,400
Assets under capital lease, accumulated amortization		13,700	$ 12,800
Property and Equipment [Member]
Property, Plant and Equipment [Line Items]
valuation adjustments	$ 400	$ 400

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Other Assets - Schedule of Other Assets (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014	Jun. 27, 2014
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Deferred lease costs, net	$ 8,211	$ 9,684	$ 2,000
Security and other deposits	12,953	11,324
In-place lease intangibles, net	7,719	7,443
Other	2,310	2,732
Other assets, net	$ 31,193	$ 31,183

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Other Assets - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2015	Dec. 31, 2014
Notes Payable [Member]
Other Assets [Line Items]
valuation adjustments		$ 6.3
Leases, Acquired-in-Place [Member]
Other Assets [Line Items]
Gross in-place lease intangibles		74.9	$ 60.6
Accumulated amortization		67.2	$ 52.8
Property and Equipment [Member]
Other Assets [Line Items]
valuation adjustments	$ 0.4	$ 0.4

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Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Other Income and Expenses [Abstract]
Accrued salaries, bonuses and related expenses	$ 11,121	$ 9,865
Accrued property taxes	14,087	13,050
Accrued interest	3,035	2,485
Accrued health claims and workers comp	3,230	4,026
Accrued professional fees	748	771
Other	2,079	1,957
Accrued Expenses, Current, Total	$ 34,300	$ 32,154

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Notes Payable - Schedule of Notes Payable (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Less deferred loan costs, net	$ 8,500	$ 6,300
Notes Payable [Member]
Debt Instrument [Line Items]
Average Monthly Payment	$ 4,490
Interest rate	4.60%
Notes Payable	$ 777,116	646,600
Less deferred loan costs, net	8,533	6,331
Deferred loan costs, Total	768,583	640,269
Current portion of notes payable	13,634	47,385
Notes payable, Noncurrent, Total	754,949	592,884
Notes Payable [Member] | Fannie Mae Maturing on August 2021 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	78
Net Book Value Of Collateral	$ 15,214
Interest rate	5.69%
Maturity Date	2021-08
Notes Payable	$ 12,716	12,915
Notes Payable [Member] | Fannie Mae Maturing on October 2021 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	26
Net Book Value Of Collateral	$ 5,594
Interest rate	4.97%
Maturity Date	2021-10
Notes Payable	$ 4,502	4,582
Notes Payable [Member] | Fannie Mae Two Maturing on October 2021 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	101
Net Book Value Of Collateral	$ 21,093
Interest rate	4.92%
Maturity Date	2021-10
Notes Payable	$ 17,779	18,096
Notes Payable [Member] | Fannie Mae Three Maturing on October 2021 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	27
Net Book Value Of Collateral	$ 21,093
Interest rate	5.19%
Maturity Date	2021-10
Notes Payable	$ 4,978
Notes Payable [Member] | Fannie Mae Maturing on November 2021 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	117
Net Book Value Of Collateral	$ 24,283
Interest rate	4.92%
Maturity Date	2021-11
Notes Payable	$ 20,674	21,041
Notes Payable [Member] | Fannie Mae Maturing on March 2022 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	27
Net Book Value Of Collateral	$ 6,273
Interest rate	4.38%
Maturity Date	2022-03
Notes Payable	$ 5,036	5,132
Notes Payable [Member] | Fannie Mae Maturing on April 2022 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	60
Net Book Value Of Collateral	$ 12,507
Interest rate	4.76%
Maturity Date	2022-04
Notes Payable	$ 10,814	11,007
Notes Payable [Member] | Fannie Mae Two Maturing on April 2022 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	135
Net Book Value Of Collateral	$ 28,287
Interest rate	4.69%
Maturity Date	2022-04
Notes Payable	$ 24,584	25,026
Notes Payable [Member] | Fannie Mae Maturing on May 2022 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	60
Net Book Value Of Collateral	$ 15,981
Interest rate	4.48%
Maturity Date	2022-05
Notes Payable	$ 11,141	11,348
Notes Payable [Member] | Fannie Mae Maturing on November 2022 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	144
Net Book Value Of Collateral	$ 34,998
Interest rate	4.34%
Maturity Date	2022-11
Notes Payable	$ 27,462	27,970
Notes Payable [Member] | Fannie Mae Two Maturing on November 2022 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	33
Net Book Value Of Collateral	$ 7,685
Interest rate	4.50%
Maturity Date	2022-11
Notes Payable	$ 6,113	6,222
Notes Payable [Member] | Fannie Mae Three Maturing on November 2022 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	43
Net Book Value Of Collateral	$ 26,987
Interest rate	5.49%
Maturity Date	2022-11
Notes Payable	$ 7,592
Notes Payable [Member] | Fannie Mae Maturing on January 2023 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	84
Net Book Value Of Collateral	$ 18,439
Interest rate	4.32%
Maturity Date	2023-01
Notes Payable	$ 16,164	16,460
Notes Payable [Member] | Fannie Mae Two Maturing on January 2023 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	49
Net Book Value Of Collateral	$ 18,439
Interest rate	5.39%
Maturity Date	2023-01
Notes Payable	$ 8,684
Notes Payable [Member] | Fannie Mae Three Maturing on January 2023 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	39
Net Book Value Of Collateral	$ 8,682
Interest rate	4.58%
Maturity Date	2023-01
Notes Payable	$ 7,224	7,350
Notes Payable [Member] | Fannie Mae Maturing on April 2023 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	85
Net Book Value Of Collateral	$ 18,782
Interest rate	4.66%
Maturity Date	2023-04
Notes Payable	$ 15,700	15,967
Notes Payable [Member] | Fannie Mae Two Maturing n April 2023 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	18
Net Book Value Of Collateral	$ 5,524
Interest rate	5.46%
Maturity Date	2023-04
Notes Payable	$ 3,150
Notes Payable [Member] | Fannie Mae Maturing on October 2023 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	45
Net Book Value Of Collateral	$ 8,700
Interest rate	5.93%
Maturity Date	2023-10
Notes Payable	$ 7,411	7,506
Notes Payable [Member] | Fannie Mae Maturing on November 2023 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	67
Net Book Value Of Collateral	$ 14,242
Interest rate	5.50%
Maturity Date	2023-11
Notes Payable	$ 11,526	11,686
Notes Payable [Member] | Fannie Mae Two Maturing on November 2023 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	67
Net Book Value Of Collateral	$ 13,028
Interest rate	5.38%
Maturity Date	2023-11
Notes Payable	$ 11,591	11,756
Notes Payable [Member] | Fannie Mae Maturing on January 2024 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	282
Net Book Value Of Collateral	$ 55,740
Interest rate	5.56%
Maturity Date	2024-01
Notes Payable	$ 48,071	48,722
Notes Payable [Member] | Fannie Mae Maturing on July 2024[Member]
Debt Instrument [Line Items]
Average Monthly Payment	632
Net Book Value Of Collateral	$ 118,792
Interest rate	4.24%
Maturity Date	2024-07
Notes Payable	$ 125,677	134,650
Notes Payable [Member] | Fannie Mae Maturing on September 2024 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	134
Net Book Value Of Collateral	$ 29,273
Interest rate	4.59%
Maturity Date	2024-09
Notes Payable	$ 25,666	26,070
Notes Payable [Member] | Fannie Mae Two Maturing on January 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	95
Net Book Value Of Collateral	$ 6,579
Interest rate	4.46%
Maturity Date	2025-01
Notes Payable	$ 18,651	18,923
Notes Payable [Member] | Fannie Mae Maturing on February 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	70
Net Book Value Of Collateral	$ 16,630
Interest rate	4.35%
Maturity Date	2025-02
Notes Payable	$ 13,909
Notes Payable [Member] | Fannie Mae Maturing on March 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	109
Net Book Value Of Collateral	$ 9,434
Interest rate	3.85%
Maturity Date	2025-03
Notes Payable	$ 22,939
Notes Payable [Member] | Fannie Mae Maturing on April 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	102
Net Book Value Of Collateral	$ 26,078
Interest rate	3.84%
Maturity Date	2025-04
Notes Payable	$ 21,548
Notes Payable [Member] | Fannie Mae Maturing on June 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	47
Net Book Value Of Collateral	$ 10,404
Interest rate	4.55%
Maturity Date	2025-06
Notes Payable	$ 9,087
Notes Payable [Member] | Fannie Mae Maturing on October 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	58
Net Book Value Of Collateral	$ 13,677
Interest rate	4.69%
Maturity Date	2025-10
Notes Payable	$ 11,122
Notes Payable [Member] | Fannie Mae Maturing on December 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	273
Net Book Value Of Collateral	$ 41,027
Interest rate	4.68%
Maturity Date	2025-12
Notes Payable	$ 52,774
Notes Payable [Member] | Fannie Mae Maturing on April 2026 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	62
Net Book Value Of Collateral	$ 12,144
Interest rate	5.43%
Maturity Date	2026-04
Notes Payable	$ 10,761	10,908
Notes Payable [Member] | Protective Life Maturing on April 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	96
Net Book Value Of Collateral	$ 26,385
Interest rate	3.55%
Maturity Date	2025-04
Notes Payable	$ 21,081
Notes Payable [Member] | Protective Life Maturing on August 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	49
Net Book Value Of Collateral	$ 12,207
Interest rate	4.25%
Maturity Date	2025-08
Notes Payable	$ 9,882
Notes Payable [Member] | Protective Life Maturing on September 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	65
Net Book Value Of Collateral	$ 19,045
Interest rate	4.25%
Maturity Date	2025-09
Notes Payable	$ 13,145
Notes Payable [Member] | Protective Life Maturing on November 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	138
Net Book Value Of Collateral	$ 34,327
Interest rate	4.25%
Maturity Date	2025-11
Notes Payable	$ 27,961
Notes Payable [Member] | Berkadia One Maturing on January 2015 [Member]
Debt Instrument [Line Items]
Maturity Date	2015-01
Notes Payable		13,777
Notes Payable [Member] | Berkadia One Maturing on February 2015 [Member]
Debt Instrument [Line Items]
Maturity Date	2015-02
Notes Payable		4,550
Notes Payable [Member] | Berkadia One Maturing on September 2015 [Member]
Debt Instrument [Line Items]
Maturity Date	2015-09
Notes Payable		8,472
Notes Payable [Member] | Berkadia Maturing on July 2017 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	$ 48
Net Book Value Of Collateral	$ 14,359
Maturity Date	2017-07
Notes Payable	$ 11,800	11,800
Notes Payable [Member] | Wells Fargo Maturing on March 2015 [Member]
Debt Instrument [Line Items]
Maturity Date	2015-03
Notes Payable		21,600
Notes Payable [Member] | HUD Maturing on September 2045 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	$ 16
Net Book Value Of Collateral	$ 5,759
Interest rate	4.48%
Maturity Date	2045-09
Notes Payable	$ 3,093	3,142
Notes Payable [Member] | Insurance Financing Maturing on October 2016 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	$ 71
Interest rate	1.73%
Maturity Date	2016-10
Notes Payable	$ 711
Notes Payable [Member] | Insurance Financing Maturing on April 2016 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	$ 138
Interest rate	1.73%
Maturity Date	2016-04
Notes Payable	$ 553
Notes Payable [Member] | Insurance Financing Maturing on March 2016 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	$ 208
Interest rate	1.79%
Maturity Date	2016-03
Notes Payable	$ 625	3,095
Notes Payable [Member] | Insurance Financing Maturing on February 2015 [Member]
Debt Instrument [Line Items]
Maturity Date	2015-02
Notes Payable		390
Notes Payable [Member] | Insurance Financing Maturing on September 2015 [Member]
Debt Instrument [Line Items]
Maturity Date	2015-09
Notes Payable		580
Notes Payable [Member] | Fannie Mae One Maturing on November 2015 [Member]
Debt Instrument [Line Items]
Notes Payable		26,809
Notes Payable [Member] | Fannie Mae Two Maturing on November 2015 [Member]
Debt Instrument [Line Items]
Notes Payable		5,372
Notes Payable [Member] | Fannie Mae Two Maturing on July 2024 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	$ 120
Net Book Value Of Collateral	$ 27,851
Interest rate	4.48%
Maturity Date	2024-07
Notes Payable	$ 23,196	23,572
Notes Payable [Member] | Fannie Mae Two Maturing on September 2024 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	54
Net Book Value Of Collateral	$ 11,550
Interest rate	4.70%
Maturity Date	2024-09
Notes Payable	$ 10,200	10,357
Notes Payable [Member] | Fannie Mae Two Maturing on October 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	44
Net Book Value Of Collateral	$ 10,380
Interest rate	4.70%
Maturity Date	2025-10
Notes Payable	$ 8,406
Notes Payable [Member] | Fannie Mae Two Maturing on June 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	59
Net Book Value Of Collateral	$ 13,014
Interest rate	4.79%
Maturity Date	2025-06
Notes Payable	$ 11,095
Notes Payable [Member] | Fannie Mae Three Maturing on July 2024 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	81
Net Book Value Of Collateral	$ 20,660
Interest rate	4.30%
Maturity Date	2024-07
Notes Payable	$ 16,035	16,304
Notes Payable [Member] | Fannie Mae Three Maturing on June 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	81
Net Book Value Of Collateral	$ 16,535
Interest rate	5.30%
Maturity Date	2025-06
Notes Payable	$ 14,029	14,237
Notes Payable [Member] | Fannie Mae Maturing on January 2025 [Member]
Debt Instrument [Line Items]
Average Monthly Payment	53
Net Book Value Of Collateral	$ 13,093
Interest rate	4.50%
Maturity Date	2025-01
Notes Payable	$ 10,258	10,406
Notes Payable [Member] | Berkadia Two Maturing on February 2015 [Member]
Debt Instrument [Line Items]
Maturity Date	2015-02
Notes Payable		9,500
Notes Payable [Member] | Berkadia Two Maturing on January 2015 [Member]
Debt Instrument [Line Items]
Maturity Date	2015-01
Notes Payable		$ 9,300

XML

Notes Payable - Schedule of Notes Payable (Parenthetical) (Detail) $ in Millions							12 Months Ended
	Nov. 12, 2015	Sep. 24, 2015	Aug. 06, 2015 USD ($)	Mar. 05, 2015	Feb. 17, 2015	Feb. 04, 2015	Dec. 31, 2015 Facility
Debt Instrument [Line Items]
Number of facilities owned | Facility							69
Sedgwick Sale Transaction [Member]
Debt Instrument [Line Items]
Outstanding debt assumed by buyer | $			$ 6.8
Berkadia One Maturing on February 2015 [Member]
Debt Instrument [Line Items]
Mortgage loans term					10 years
Fixed interest rate					3.85%
Berkadia One Maturing on September 2015 [Member]
Debt Instrument [Line Items]
Mortgage loans term		10 years
Fixed interest rate		4.70%
Berkadia Two Maturing on February 2015 [Member]
Debt Instrument [Line Items]
Mortgage loans term					10 years
Fixed interest rate					3.85%
Wells Fargo Maturing on March 2015 [Member]
Debt Instrument [Line Items]
Mortgage loans term				10 years
Fixed interest rate				3.84%
Berkadia Maturing on July 2017 [Member]
Debt Instrument [Line Items]
Lease expiration date						Jul. 10, 2017
Berkadia Maturing on July 2017 [Member] | Notes Payable [Member]
Debt Instrument [Line Items]
Acquisition price at a variable rate							LIBOR plus 4.50%
Basis on variable rate							4.50%
Interest Rate							4.79%
Fannie Mae One Maturing on November 2015 [Member]
Debt Instrument [Line Items]
Mortgage loans term	10 years
Fixed interest rate	4.68%
Fannie Mae Two Maturing on November 2015 [Member]
Debt Instrument [Line Items]
Mortgage loans term	10 years
Fixed interest rate	4.68%

XML

Notes Payable - Summary of Aggregate Scheduled Maturities of Notes Payable (Detail) - Notes Payable [Member] $ in Thousands	Dec. 31, 2015 USD ($)
Debt Instrument [Line Items]
2016	$ 14,698
2017	25,318
2018	14,158
2019	14,829
2020	15,443
Thereafter	692,670
Total	$ 777,116

XML

Notes Payable - Additional Information (Detail)																									1 Months Ended	12 Months Ended
	Dec. 17, 2015 USD ($) Community	Nov. 24, 2015 USD ($)	Nov. 12, 2015 USD ($) Community	Nov. 04, 2015 USD ($)	Oct. 30, 2015 USD ($)	Sep. 30, 2015 USD ($)	Sep. 24, 2015 USD ($)	Aug. 11, 2015 USD ($)	Aug. 06, 2015 USD ($) Community	Jul. 28, 2015 USD ($)	May. 31, 2015 USD ($)	May. 29, 2015 USD ($)	May. 21, 2015 USD ($)	Mar. 27, 2015 USD ($)	Mar. 05, 2015 USD ($) Community	Feb. 17, 2015 USD ($) Community Property	Jan. 22, 2015 USD ($)	Dec. 23, 2014 USD ($) Community	Dec. 17, 2014 USD ($)	Aug. 27, 2014 USD ($)	Aug. 04, 2014 USD ($)	Jun. 27, 2014 USD ($) Community	May. 31, 2014 USD ($)	Mar. 26, 2014 USD ($)	Jun. 30, 2014 USD ($)	Dec. 31, 2015 USD ($) Community	Jan. 13, 2015 USD ($)	Dec. 31, 2014 USD ($)	Mar. 25, 2011 USD ($)	Sep. 10, 2010 USD ($)	Apr. 16, 2010 USD ($)
Debt Instrument [Line Items]
Senior living communities operated by company | Community																										121
Deferred financing cost																						$ 2,000,000				$ 8,211,000		$ 9,684,000
Unamortized deferred financing cost																						500,000
Prepayment premium																						6,500,000
Cash proceeds																						$ 36,500,000
Letters of credit																													$ 2,600,000	$ 2,200,000	$ 1,700,000
Accumulated amortization																										1,800,000		$ 2,200,000
Amortization expense																										1,100,000
Fannie Mae [Member]
Debt Instrument [Line Items]
Unamortized deferred financing cost																										500,000
Accumulated amortization																										$ 1,400,000
1.73 % [Member]
Debt Instrument [Line Items]
Finance agreement, amount											$ 1,700,000
Finance agreement, fixed interest rate											1.73%
Finance agreement, term											11 months
Financing Agreement [Member]
Debt Instrument [Line Items]
Finance agreement, fixed interest rate																							1.92%
Finance agreement, term																							9 months
Renewed insurance policies and finance agreement																							$ 1,700,000
Columbus and Chardon, Ohio, and Greenwood, Indiana [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Senior living communities operated by company | Community	3
Mortgage debt maturity	2022-11
Fixed interest rate	5.49%
Deferred financing cost	$ 200,000
Columbus and Chardon, Ohio, and Greenwood, Indiana [Member] | 3 Senior Living Communities [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Mortgage debt	$ 7,600,000
Elkhorn, Nebraska [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Mortgage debt maturity				2023-04
Fixed interest rate				5.46%
Deferred financing cost				$ 100,000
Elkhorn, Nebraska [Member] | 1 Senior Living Community [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Mortgage debt				$ 3,200,000
Springfield, Missouri [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Mortgage debt maturity		2023-01
Fixed interest rate		5.39%
Deferred financing cost		$ 100,000
Springfield, Missouri [Member] | 1 Senior Living Community [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Mortgage debt		$ 8,700,000
Columbia, South Carolina, Deer Park and Pantego, Texas, and South Bend, Indiana [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Mortgage debt			$ 52,800,000
Senior living communities operated by company | Community			4
Mortgage debt maturity			2017-06
Fixed interest rate			4.68%
Deferred financing cost			$ 600,000
Term period of mortgage loans																										10 years
Term period for principle amortization																										30 years
Unamortized deferred financing cost			100,000
Prepayment premium			1,700,000
Columbia, South Carolina, Deer Park and Pantego, Texas, and South Bend, Indiana [Member] | 4 Senior Living Communities [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Mortgage debt			$ 31,600,000
Macedonia [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Mortgage debt maturity						2021-10
Fixed interest rate						5.19%
Deferred financing cost						$ 100,000
Term period for principle amortization						30 years
Macedonia [Member] | 1 Senior Living Community [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Mortgage debt						$ 5,000,000
Georgia [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Fixed interest rate							4.70%
Deferred financing cost							$ 200,000
Term period of mortgage loans							10 years
Term period for principle amortization							30 years
Deferred financing costs amortization period							10 years
Georgia [Member] | 1 Senior Living Community [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Mortgage debt							$ 8,400,000
Toledo [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Mortgage debt															$ 21,800,000
Fixed interest rate															3.84%
Deferred financing cost															$ 200,000
Term period of mortgage loans																										10 years
Term period for principle amortization																										30 years
Unamortized deferred financing cost															79,000
Prepayment premium															55,000
Cash proceeds															200,000
Toledo [Member] | 1 Senior Living Community [Member] | Wells Fargo [Member]
Debt Instrument [Line Items]
Mortgage debt															$ 21,600,000
Senior living communities operated by company | Community															1
Peoria [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Fixed interest rate																3.85%
Deferred financing cost																$ 200,000
Term period of mortgage loans																										10 years
Term period for principle amortization																										30 years
Unamortized deferred financing cost																200,000
Prepayment premium																500,000
Repayment of debt																$ 14,100,000
Number of owned properties | Property																2
Peoria [Member] | 1 Senior Living Community [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Mortgage debt																$ 23,200,000
Senior living communities operated by company | Community																1
Lincoln, Nebraska [Member] | Freddie Mac [Member]
Debt Instrument [Line Items]
Senior living communities operated by company | Community																		1
Prepayment premium																										$ 900,000
Unamortized deferred financing cost																										$ 48,000
Lincoln, Nebraska [Member] | 1 Senior Living Community [Member] | Freddie Mac [Member]
Debt Instrument [Line Items]
Mortgage debt																		$ 8,400,000
4.46% [Member] | Lincoln, Nebraska [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Mortgage debt																		$ 18,900,000
Fixed interest rate																		4.46%
Deferred financing cost																		$ 200,000
Term period of mortgage loans																		10 years
Term period for principle amortization																		30 years
Deferred financing costs amortization period																		10 years
4.24% [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Senior living communities operated by company | Community																						12
Fixed interest rate																						4.24%
Term period of mortgage loans																						10 years
Term period for principle amortization																						30 years
4.24% [Member] | Freddie Mac [Member]
Debt Instrument [Line Items]
Senior living communities operated by company | Community																						15
4.24% [Member] | 15 Senior Living Community [Member] | Freddie Mac [Member]
Debt Instrument [Line Items]
Mortgage debt																						$ 111,900,000
4.24% [Member] | 12 Senior Living Community [Member] | Fannie Mae [Member]
Debt Instrument [Line Items]
Mortgage debt																						$ 135,500,000
Canton Transaction [Member] | 4.50% Debt [Member]
Debt Instrument [Line Items]
Mortgage debt																			$ 10,400,000
Fixed interest rate																			4.50%
Deferred financing cost																			$ 100,000
Term period of mortgage loans																			10 years
Term period for principle amortization																			30 years
Deferred financing costs amortization period																			10 years
SHPIII/CSL Miami [Member]
Debt Instrument [Line Items]
Mortgage debt																									$ 16,400,000
Fixed interest rate																									4.30%
Term period of mortgage loans																									10 years
Term period for principle amortization																									30 years
SHPIII/CSL Miami [Member] | 4.30% [Member]
Debt Instrument [Line Items]
Mortgage debt																									$ 16,400,000
Fixed interest rate																									4.30%
Term period of mortgage loans																									10 years
Term period for principle amortization																									30 years
SHPIII/CSL Richmond Heights [Member]
Debt Instrument [Line Items]
Mortgage debt																									$ 23,700,000
Fixed interest rate																									4.48%
Term period of mortgage loans																									10 years
Term period for principle amortization																									30 years
SHPIII/CSL Richmond Heights [Member] | 4.48% [[Member]
Debt Instrument [Line Items]
Mortgage debt																									$ 23,700,000
Fixed interest rate																									4.48%
Term period of mortgage loans																									10 years
Term period for principle amortization																									30 years
SHPIII/CSL Levis Commons [Member]
Debt Instrument [Line Items]
Deferred financing cost																									$ 500,000
Finance agreement, term																									24 months
Interim financing obtained for acquisition																									$ 21,600,000
Interim financing variable rate description																										LIBOR plus 2.75%
Interim financing variable rate																									2.75%
SHPIII/CSL Levis Commons [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Interim financing variable rate description																										LIBOR plus 2.75%
Interim financing variable rate																									2.75%
Indianapolis Transaction [Member]
Debt Instrument [Line Items]
Fixed interest rate								4.25%
Mortgage loan outstanding balance								$ 13,200,000
Indianapolis Transaction [Member] | 4.25 % [Member]
Debt Instrument [Line Items]
Mortgage debt								$ 13,200,000
Fixed interest rate								4.25%
Deferred financing cost								$ 200,000
Term period of mortgage loans								10 years
Term period for principle amortization								30 years
Deferred financing costs amortization period								10 years
Indianapolis Transaction [Member] | Maximum [Member] | 4.25 % [Member]
Debt Instrument [Line Items]
Loan commitment								$ 2,600,000
Virginia Beach Transaction [Member]
Debt Instrument [Line Items]
Fixed interest rate					4.25%
Mortgage loan outstanding balance					$ 28,000,000
Virginia Beach Transaction [Member] | 4.25 % [Member]
Debt Instrument [Line Items]
Mortgage debt					$ 28,000,000
Fixed interest rate					4.25%
Deferred financing cost					$ 400,000
Term period of mortgage loans					10 years
Term period for principle amortization					30 years
Deferred financing costs amortization period					10 years
Mahomet Transaction [Member]
Debt Instrument [Line Items]
Fixed interest rate						4.69%
Mortgage loan outstanding balance						$ 11,100,000
Mahomet Transaction [Member] | 4.69 % [Member]
Debt Instrument [Line Items]
Mortgage debt						$ 11,100,000
Fixed interest rate						4.69%
Deferred financing cost						$ 200,000
Term period of mortgage loans						10 years
Term period for principle amortization						30 years
Deferred financing costs amortization period						10 years
Columbiana Transaction [Member]
Debt Instrument [Line Items]
Fixed interest rate										4.25%
Mortgage loan outstanding balance										$ 9,900,000
Columbiana Transaction [Member] | 4.25 % [Member]
Debt Instrument [Line Items]
Mortgage debt										$ 9,900,000
Fixed interest rate										4.25%
Deferred financing cost										$ 200,000
Term period of mortgage loans										10 years
Term period for principle amortization										30 years
Deferred financing costs amortization period										10 years
Heritage Transaction [Member]
Debt Instrument [Line Items]
Fixed interest rate												4.79%
Mortgage loan outstanding balance												$ 11,200,000
Heritage Transaction [Member] | 4.79 % [Member]
Debt Instrument [Line Items]
Mortgage debt												$ 11,200,000
Fixed interest rate												4.79%
Deferred financing cost												$ 200,000
Term period of mortgage loans												10 years
Term period for principle amortization												30 years
Deferred financing costs amortization period												10 years
Emerald Transaction [Member]
Debt Instrument [Line Items]
Fixed interest rate													4.55%
Mortgage loan outstanding balance													$ 9,200,000
Emerald Transaction [Member] | 4.55 % [Member]
Debt Instrument [Line Items]
Mortgage debt													$ 9,200,000
Fixed interest rate													4.55%
Deferred financing cost													$ 200,000
Term period of mortgage loans													10 years
Term period for principle amortization													30 years
Deferred financing costs amortization period													10 years
Baytown Transaction [Member]
Debt Instrument [Line Items]
Fixed interest rate														3.55%
Mortgage loan outstanding balance														$ 21,400,000
Baytown Transaction [Member] | 3.55 % [Member]
Debt Instrument [Line Items]
Mortgage debt														$ 21,400,000
Fixed interest rate														3.55%
Deferred financing cost														$ 200,000
Term period of mortgage loans														10 years
Term period for principle amortization														30 years
Deferred financing costs amortization period														10 years
Green Bay Transaction [Member]
Debt Instrument [Line Items]
Fixed interest rate																											4.35%
Mortgage loan outstanding balance																											$ 14,100,000
Green Bay Transaction [Member] | 4.35 % [Member]
Debt Instrument [Line Items]
Mortgage debt																											$ 14,100,000
Fixed interest rate																											4.35%
Deferred financing cost																											$ 100,000
Term period of mortgage loans																										10 years
Term period for principle amortization																										30 years
Deferred financing costs amortization period																										10 years
Sedgwick Sale Transaction [Member]
Debt Instrument [Line Items]
Unamortized deferred financing cost									$ 100,000
Outstanding debt assumed by buyer									$ 6,800,000
Number of communities sold | Community									1
Four Property Sale Transaction [Member]
Debt Instrument [Line Items]
Outstanding mortgage debt defeased in conjunction																	$ 13,700,000
Mortgage loan outstanding balance																	5,700,000
Number of communities sold | Community																										4
Four Property Sale Transaction [Member] | Peoria [Member]
Debt Instrument [Line Items]
Unamortized deferred financing cost																	18,000
Number of communities sold | Community																										4
Mortgage loan outstanding																	$ 8,000,000
Note maturity date																										Sep. 01, 2015
Aspen Grove Transaction [Member]
Debt Instrument [Line Items]
Fixed interest rate																								5.43%
Mortgage loan outstanding balance																								$ 11,000,000
Aspen Grove Transaction [Member] | 5.43% [Member]
Debt Instrument [Line Items]
Mortgage debt																								$ 11,000,000
Fixed interest rate																								5.43%
Deferred financing cost																								$ 200,000
Term period of mortgage loans																								12 years
Term period for principle amortization																								30 years
Deferred financing costs amortization period																								12 years
Plymouth Transaction [Member]
Debt Instrument [Line Items]
Fixed interest rate																				4.70%
Mortgage loan outstanding balance																				$ 10,400,000
Plymouth Transaction [Member] | 4.70% [Member]
Debt Instrument [Line Items]
Mortgage debt																				$ 10,400,000
Fixed interest rate																				4.70%
Deferred financing cost																				$ 100,000
Term period of mortgage loans																				10 years
Term period for principle amortization																				30 years
Deferred financing costs amortization period																				10 years
Roanoke Transaction [Member]
Debt Instrument [Line Items]
Fixed interest rate																					4.59%
Mortgage loan outstanding balance																					$ 12,900,000
Roanoke Transaction [Member] | 4.59% [Member]
Debt Instrument [Line Items]
Mortgage debt																					$ 12,900,000
Fixed interest rate																					4.59%
Deferred financing cost																					$ 100,000
Term period of mortgage loans																					10 years
Term period for principle amortization																					30 years
Deferred financing costs amortization period																					10 years
Oshkosh Transaction [Member]
Debt Instrument [Line Items]
Fixed interest rate																					4.59%
Mortgage loan outstanding balance																					$ 13,200,000
Oshkosh Transaction [Member] | 4.59% [Member]
Debt Instrument [Line Items]
Mortgage debt																					$ 13,200,000
Fixed interest rate																					4.59%
Deferred financing cost																					$ 100,000
Term period of mortgage loans																					10 years
Term period for principle amortization																					30 years
Deferred financing costs amortization period																					10 years
Berkadia [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Interim financing variable rate description																										LIBOR plus 4.50%
Berkadia [Member] | 1 Senior Living Community [Member]
Debt Instrument [Line Items]
Senior living communities operated by company | Community																						1
Finance agreement, term																						24 months
Interim financing obtained for acquisition																						$ 11,800,000
Berkadia [Member] | 1 Senior Living Community [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Interim financing variable rate																						4.50%
Berkadia [Member] | 2 Senior Living Community [Member]
Debt Instrument [Line Items]
Senior living communities operated by company | Community																						2
Finance agreement, term																						12 months
Interim financing obtained for acquisition																						$ 9,300,000
Berkadia [Member] | 2 Senior Living Community [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Interim financing variable rate																						4.50%

XML

Equity - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2009	Jan. 22, 2009
Equity [Abstract]
Preferred stock, shares outstanding	0	0
Authorization for purchase of company's common stock					$ 10,000,000
Purchase common stock shares	0	0	0	349,800
Average cost of per share				$ 2.67
Purchase common stock value				$ 900,000

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Stock-Based Compensation - Additional Information (Detail) - USD ($)		12 Months Ended
	Feb. 24, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vesting period, Minimum		1 year
Stock options vesting period, Maximum		5 years
Intrinsic value of stock options outstanding and exercisable		$ 30,000,000	$ 100,000	$ 300,000
Period of recognition for compensation expense, Minimum		1 year
Period of recognition for compensation expense, Maximum		4 years
Compensation expense recognized		$ 8,800,000	7,300,000	4,300,000
Expected dividend yield		0.00%
Unrecognized stock based compensation expense, net of estimated forfeitures		$ 8,300,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense recognized		0
Restricted stock outstanding, intrinsic value		$ 16,300,000	$ 17,500,000	$ 20,900,000
Restricted common stock, Granted		467,944	350,716	403,715
Performance-based restricted stock, Granted		130,000
Average market value of restricted common stock awarded to certain employees and directors of company		$ 24.08
Restricted stock award vesting period, Minimum		1 year
Restricted stock award vesting period, Maximum		4 years
Restricted stock outstanding		$ 11,300,000
Restricted Stock [Member] | Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted common stock, Granted		11,756
Restricted stock outstanding		$ 300,000
Average market value of common stock awarded to certain employees and directors of company		$ 25.52
Restricted stock award vesting period		1 year
Restricted Stock [Member] | Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted common stock, Granted	541,327
Performance-based restricted stock, Granted	199,692
Average market value of restricted common stock awarded to certain employees and directors of company	$ 15.92
Restricted stock award vesting period, Minimum	1 year
Restricted stock award vesting period, Maximum	4 years
Restricted stock outstanding	$ 8,600,000
Performance Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected period of expenses		1 year
Nonperformance Stock Awards [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected period of expenses		1 year
Nonperformance Stock Awards [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected period of expenses		4 years

XML

Stock-Based Compensation - Stock Option Activity and Related Information (Detail) - $ / shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Shares, Outstanding at Beginning of Year	6,000	19,000	265,930
Shares, Granted	0	0	0
Shares, Exercised	3,000	13,000	246,930
Shares, Forfeited	0	0	0
Shares, Outstanding End of Year	3,000	6,000	19,000
Shares, Options Exercisable	3,000	6,000	19,000
Weighted average exercise price per share, Outstanding at Beginning of Year	$ 8.44	$ 7.10	$ 6.28
Weighted average exercise price per share, Granted	0	0	0
Weighted average exercise price per share, Exercised	5.90	6.48	6.21
Weighted average exercise price per share, Forfeited	0	0	0
Weighted average exercise price per share, Outstanding End of Year	10.97	8.44	7.10
Weighted average exercise price per share, Options Exercisable	$ 10.97	$ 8.44	$ 7.10

XML

Stock-Based Compensation - Summary of Options Outstanding and Options Exercisable (Detail)	12 Months Ended
	Dec. 31, 2015 $ / shares shares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Upper range	$ 10.97
Options outstanding end of year | shares	3,000
Weighted average remaining contractual life (years), option outstanding	4 months 6 days
Weighted average exercise price options outstanding	$ 10.97
Options exercisable, number exercisable at end of year | shares	3,000
Weighted average exercise price options exercisable	$ 10.97

XML

Stock-Based Compensation - Restricted Stock Awards Activity and Related Information (Detail) - Restricted Stock [Member] - shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Outstanding at Beginning of Year	702,718	870,217	803,218
Shares, Issued	467,944	350,716	403,715
Shares, Vested	358,716	406,072	312,980
Shares, Forfeited	28,636	112,143	23,736
Shares, Outstanding End of Year	783,310	702,718	870,217

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Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Current:
Federal			$ (5,411)
State	$ 900	$ 719	377
Deferred:
Federal			6,251
State			4,542
Income Tax Continuing Operations, Total	$ 900	$ 719	$ 5,759

XML

Income Taxes - Summary of Provision for Income Taxes Differed from Amounts of Income Tax Provision Determined by Applying U.S. Federal Statutory Income Tax Rate to Income Before Benefit for Income Taxes (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Tax Disclosure [Abstract]
Tax (benefit) provision at federal statutory rates	$ (4,515)	$ (7,958)	$ (3,653)
State income tax expense, net of federal effects	64	(90)	401
Federal and state income tax return true up			325
State effective rate changes		6	(20)
Change in deferred tax asset valuation allowance	4,986	8,456	8,810
Other	365	305	(104)
Income Tax Continuing Operations, Total	$ 900	$ 719	$ 5,759

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Income Taxes - Summary of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Deferred tax assets:
Deferred gains on sale/leaseback transactions	$ 6,176	$ 7,027
Net operating loss carryforward (expiring up to 2032)	15,144	12,556
Compensation costs	1,804	972
Investments in unconsolidated joint ventures	0	0
Capital loss carryforward	0	0
Other	2,802	1,806
Total deferred tax assets	25,926	22,361
Valuation Allowance	(22,252)	(17,266)
Total deferred tax assets, net	3,674	5,095
Deferred tax liabilities:
Depreciation and amortization	(3,674)	(5,095)
Total deferred tax assets, net	0	0
Current deferred tax assets, net		460
Long-term deferred tax (liabilities) assets, net		(460)
Total deferred tax assets, net	$ 0	$ 0

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Income Taxes - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2015 USD ($) Community	Dec. 31, 2014 Community
Income Tax Contingency [Line Items]
Deferred tax assets related to federal Net operating loss carry forwards	$ 11,700,000
Deferred tax assets related to state Net operating loss carry forwards	$ 3,100,000
Texas communities consolidated | Community	37	36
Domestic Tax Authority [Member]
Income Tax Contingency [Line Items]
Net operating loss carry forwards	$ 34,700,000
Alternative minimum tax credit carryforward	300,000
Operating loss carryforward additional	10,400,000
State and Local Jurisdiction [Member]
Income Tax Contingency [Line Items]
Net operating loss carry forwards	$ 63,300,000
Minimum [Member]
Income Tax Contingency [Line Items]
Federal NOL expiration period period	2033
State NOL expiration period	2016
Maximum [Member]
Income Tax Contingency [Line Items]
Federal NOL expiration period period	2035
State NOL expiration period	2035

XML

Employee Benefit Plans - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Compensation Related Costs [Abstract]
Employer matching contributions from annual salary	4.00%
Percentage of employer match	50.00%
Contributed to the Plan annually	$ 500,000	$ 500,000	$ 400,000
Administrative expenses	$ 20,900	$ 15,000	$ 15,300

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Fair Value of Financial Instruments - Carrying Amounts and Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Restricted cash	$ 13,159	$ 12,241
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	56,087	39,209
Restricted cash	13,159	12,241
Notes payable	777,116	646,600
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	56,087	39,209
Restricted cash	13,159	12,241
Notes payable	$ 724,769	$ 647,449

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Allowance for Doubtful Accounts - Schedule of Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Receivables [Abstract]
Balance at beginning of year	$ 2,321	$ 1,900	$ 1,825
Provision for bad debts, net of recoveries	1,192	717	497
Write-offs and other	(325)	(296)	(422)
Balance at end of year	$ 3,188	$ 2,321	$ 1,900

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Lease - Summary of Company's Facility Lease Agreements (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2015 USD ($) Community	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Schedule Of Operating Leases [Line Items]
Lease Acquisition Costs	$ 15,100
Deferred Gains / Lease Concessions	37,500
Accumulated amortization through December 31, 2015	(1,421)	$ (1,230)	$ (1,164)
Accumulated deferred gains / lease concessions recognized through December 31, 2015	(20,200)
Net lease acquisition costs as of December 31, 2015	7,700
Net deferred gains / lease concessions as of December 31, 2015	17,300
Property Subject to Operating Lease [Member]
Schedule Of Operating Leases [Line Items]
Accumulated amortization through December 31, 2015	$ (7,400)
HCP May 31, 2006 [Member]
Schedule Of Operating Leases [Line Items]
Date of Lease	May 31, 2006
Number of Communities | Community	6
Value of Transaction	$ 43,000
Term	20 years
Initial Lease Rate	8.00%
Lease Acquisition Costs	$ 200
Deferred Gains / Lease Concessions	$ 600
HCN April 16, 2010 [Member]
Schedule Of Operating Leases [Line Items]
Date of Lease	Apr. 16, 2010
Number of Communities | Community	5
Value of Transaction	$ 48,500
Term	15 years
Initial Lease Rate	8.25%
Lease Acquisition Costs	$ 600
Deferred Gains / Lease Concessions	$ 800
Ventas September 30, 2005 [Member]
Schedule Of Operating Leases [Line Items]
Date of Lease	Sep. 30, 2005
Number of Communities | Community	6
Value of Transaction	$ 84,600
Term	10 years
Initial Lease Rate	8.00%
Lease Acquisition Costs	$ 9,500
Deferred Gains / Lease Concessions	$ 4,600
Ventas October 18, 2005 [Member]
Schedule Of Operating Leases [Line Items]
Date of Lease	Oct. 18, 2005
Number of Communities | Community	1
Value of Transaction	$ 19,500
Term	10 years
Initial Lease Rate	8.00%
Lease Acquisition Costs	$ 300
Ventas June 8, 2006 [Member]
Schedule Of Operating Leases [Line Items]
Date of Lease	Jun. 08, 2006
Number of Communities | Community	1
Value of Transaction	$ 19,100
Term	10 years
Initial Lease Rate	8.00%
Lease Acquisition Costs	$ 600
Ventas January 31, 2008 [Member]
Schedule Of Operating Leases [Line Items]
Date of Lease	Jan. 31, 2008
Number of Communities | Community	1
Value of Transaction	$ 5,000
Term	10 years
Initial Lease Rate	7.75%
Lease Acquisition Costs	$ 200
Ventas June 27, 2012 [Member]
Schedule Of Operating Leases [Line Items]
Date of Lease	Jun. 27, 2012
Number of Communities | Community	2
Value of Transaction	$ 43,300
Term	10 years
Initial Lease Rate	6.75%
Lease Acquisition Costs	$ 800
HCP May 1, 2006 [Member]
Schedule Of Operating Leases [Line Items]
Date of Lease	May 01, 2006
Number of Communities | Community	3
Value of Transaction	$ 54,000
Term	20 years
Initial Lease Rate	8.00%
Lease Acquisition Costs	$ 300
Deferred Gains / Lease Concessions	$ 12,800
HCP December 1, 2006 [Member]
Schedule Of Operating Leases [Line Items]
Date of Lease	Dec. 01, 2006
Number of Communities | Community	4
Value of Transaction	$ 51,000
Term	20 years
Initial Lease Rate	8.00%
Lease Acquisition Costs	$ 700
HCP December 14, 2006 [Member]
Schedule Of Operating Leases [Line Items]
Date of Lease	Dec. 14, 2006
Number of Communities | Community	1
Value of Transaction	$ 18,000
Term	20 years
Initial Lease Rate	7.75%
Lease Acquisition Costs	$ 300
HCP April 11, 2007 [Member]
Schedule Of Operating Leases [Line Items]
Date of Lease	Apr. 11, 2007
Number of Communities | Community	1
Value of Transaction	$ 8,000
Term	20 years
Initial Lease Rate	7.25%
Lease Acquisition Costs	$ 100
HCN May 1, 2010 [Member]
Schedule Of Operating Leases [Line Items]
Date of Lease	May 01, 2010
Number of Communities | Community	3
Value of Transaction	$ 36,000
Term	15 years
Initial Lease Rate	8.25%
Lease Acquisition Costs	$ 200
Deferred Gains / Lease Concessions	$ 400
HCN September 10, 2010 [Member]
Schedule Of Operating Leases [Line Items]
Date of Lease	Sep. 10, 2010
Number of Communities | Community	12
Value of Transaction	$ 104,600
Term	15 years
Initial Lease Rate	8.50%
Lease Acquisition Costs	$ 400
Deferred Gains / Lease Concessions	$ 2,000
HCN April 8, 2011 [Member]
Schedule Of Operating Leases [Line Items]
Date of Lease	Apr. 08, 2011
Number of Communities | Community	4
Value of Transaction	$ 141,000
Term	15 years
Initial Lease Rate	7.25%
Lease Acquisition Costs	$ 900
Deferred Gains / Lease Concessions	$ 16,300

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Lease - Summary of Company's Facility Lease Agreements (Parenthetical) (Detail) $ in Millions		12 Months Ended
	Apr. 24, 2015 Community	Dec. 31, 2015 USD ($) Property	Nov. 11, 2013 USD ($) Community Lease
Schedule Of Operating Leases [Line Items]
Deferred gains		$ 34.9
Lease concessions		2.6
HCP May 31, 2006 [Member]
Schedule Of Operating Leases [Line Items]
Lease concessions		0.6
HCN September 10, 2010 [Member]
Schedule Of Operating Leases [Line Items]
Lease concessions		$ 2.0
Ventas [Member]
Schedule Of Operating Leases [Line Items]
Lease expiration date		Sep. 30, 2020
Lease agreements initial terms		5 years
Available renewal extension period		5 years
Capital improvement project		$ 24.5
Number of Lease Extension Available | Property		1
HCP [Member]
Schedule Of Operating Leases [Line Items]
Lease expiration date	Apr. 30, 2026		Oct. 31, 2020
Capital improvement project			$ 3.3
Number of operating lease remaining | Lease			9
Number of Lease Extension Available | Community	1		2

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Leases - Additional Information (Detail) $ in Millions	3 Months Ended	12 Months Ended
	Jun. 30, 2015 Property	Dec. 31, 2015 USD ($) Community Property	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Loans And Leases [Line Items]
Period of Initial lease terms in which deferred lease acquisition costs are being amortized		5 years
Lease contracts period		5 years
Incurred lease expense		$ 62.8	$ 60.9	$ 58.8
Deferred lease costs, Gross		15.1	15.0
Accumulated amortization cost		7.4	$ 6.0
Expected amortization expense next 12 months		1.5
Expected amortization expense year two		1.5
Expected amortization expense year three		1.5
Expected amortization expense year four		1.5
Expected amortization expense year five		$ 1.5
HCP [Member]
Loans And Leases [Line Items]
Number of leased senior living communities | Community		15
Number of Lease Extension Available | Property	1	2
Lease agreements initial terms		10 years
Available renewal extension period		10 years
Lease acquisition costs incurred		$ 1.6
Capital improvement project		$ 3.3
Period of Initial lease terms in which deferred lease acquisition costs are being amortized		10 years
HCN [Member]
Loans And Leases [Line Items]
Number of leased senior living communities | Community		24
Number of Lease Extension Available | Property		1
Lease agreements initial terms		15 years
Available renewal extension period		15 years
Lease acquisition costs incurred		$ 2.1
Period of Initial lease terms in which deferred lease acquisition costs are being amortized		15 years
Lease expiration year and month		2026-04
Minimum [Member] | HCP [Member]
Loans And Leases [Line Items]
Lease agreements range		7.25%
Minimum [Member] | HCN [Member]
Loans And Leases [Line Items]
Lease agreements range		7.25%
Maximum [Member] | HCP [Member]
Loans And Leases [Line Items]
Lease agreements range		8.00%
Maximum [Member] | HCN [Member]
Loans And Leases [Line Items]
Lease agreements range		8.50%
Ventas [Member]
Loans And Leases [Line Items]
Number of leased senior living communities | Community		11
Number of Lease Extension Available | Property		1
Lease expiration date		Sep. 30, 2020
Lease agreements initial terms		5 years
Available renewal extension period		5 years
Lease acquisition costs incurred		$ 11.4
Number of properties accounts as operating lease | Property		9
Number of properties accounts as financing obligation | Property		2
Capital improvement project		$ 24.5
Mortgage debt assumed		18.3
Additional Cash collateral Deposits		$ 3.4
Lease period		5 years
Additions to property and equipment		$ 13.2
Property and equipment amortized		11.8
Unamortized portion of the deferred gain		$ 4.9
Lease portfolio period		5 years
Ventas [Member] | One Five-year Renewal [Member]
Loans And Leases [Line Items]
Lease expiration date		Sep. 30, 2025
Lease agreements initial terms		5 years
Ventas [Member] | Minimum [Member]
Loans And Leases [Line Items]
Lease agreements range		6.75%
Ventas [Member] | Maximum [Member]
Loans And Leases [Line Items]
Lease agreements range		8.00%

XML

Leases - Summary of Future Minimum Lease Commitments (Detail) $ in Thousands	Dec. 31, 2015 USD ($)
Leases [Abstract]
2016	$ 65,135
2017	65,092
2018	64,998
2019	64,939
2020	62,651
Thereafter	250,477
Total	$ 573,292

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Quarterly Financial Information (Unaudited) - Schedule of Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Quarterly Financial Information Disclosure [Abstract]
Total revenues	$ 107,529	$ 104,420	$ 101,588	$ 98,640	$ 100,160	$ 98,483	$ 93,425	$ 91,857	$ 412,177	$ 383,925	$ 350,362
Income from operations	5,761	5,676	3,680	3,718	5,457	2,679	3,149	2,615
Net (loss) income and comprehensive (loss) income	$ (5,950)	$ 2,871	$ (5,166)	$ (6,039)	$ (3,901)	$ (5,759)	$ (9,819)	$ (4,647)	$ (14,284)	$ (24,126)	$ (16,504)
Net (loss) income per share, basic	$ (0.21)	$ 0.10	$ (0.18)	$ (0.21)	$ (0.13)	$ (0.20)	$ (0.34)	$ (0.16)	$ (0.50)	$ (0.83)	$ (0.58)
Net (loss) income per share, diluted	$ (0.21)	$ 0.10	$ (0.18)	$ (0.21)	$ (0.13)	$ (0.20)	$ (0.34)	$ (0.16)	$ (0.50)	$ (0.83)	$ (0.58)
Weighted average shares outstanding, basic	28,749	28,732	28,705	28,565	28,387	28,371	28,298	28,146	28,688	28,301	27,815
Weighted average shares outstanding, fully diluted	28,749	28,733	28,705	28,565	28,387	28,371	28,298	28,146	28,688	28,301	27,815

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Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] $ in Millions	Feb. 16, 2016 USD ($) Community Assisted_Living_Unit	Jan. 26, 2016 USD ($) Community Assisted_Living_Unit
Colby Park Falls [Member]
Subsequent Event [Line Items]
Number of acquisition closed | Community		3
Acquisition cost		$ 16.8
Number of assisted living units | Assisted_Living_Unit		138
Long term finance		$ 11.3
Long term fixed interest rate		4.50%
Maximum period for expansion of permanent financing		10 years
Pensacola Florida [Member]
Subsequent Event [Line Items]
Number of acquisition closed | Community	2
Acquisition cost	$ 48.0
Number of assisted living units | Assisted_Living_Unit	179
Long term finance	$ 35.0
Long term fixed interest rate	4.38%
Maximum period for expansion of permanent financing	10 years