T | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
£ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware
|
20-3068069
|
(State or other jurisdiction
of incorporation or organization) |
(I.R.S. Employer Identification No.)
|
111 Westwood Place, Suite 400, Brentwood, Tennessee
|
37027
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|
|
Large accelerated filer T
|
Accelerated filer £
|
|
Non-accelerated filer £ (Do not check if a smaller reporting company)
|
Smaller reporting company £
|
|
PAGE
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 40 |
|
|
|
|
March 31,
2013
|
December 31,
2012
|
||||||
Assets
|
(Unaudited)
|
|||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
28,242
|
$
|
69,240
|
||||
Cash and escrow deposits — restricted
|
42,666
|
43,096
|
||||||
Accounts receivable, net
|
109,178
|
100,401
|
||||||
Deferred tax asset
|
13,377
|
13,377
|
||||||
Prepaid expenses and other current assets, net
|
89,899
|
82,924
|
||||||
Total current assets
|
283,362
|
309,038
|
||||||
Property, plant and equipment and leasehold intangibles, net
|
3,853,423
|
3,879,977
|
||||||
Cash and escrow deposits — restricted
|
62,370
|
62,767
|
||||||
Investment in unconsolidated ventures
|
36,287
|
31,386
|
||||||
Goodwill
|
109,553
|
109,553
|
||||||
Other intangible assets, net
|
158,804
|
159,942
|
||||||
Other assets, net
|
117,109
|
113,315
|
||||||
Total assets
|
$
|
4,620,908
|
$
|
4,665,978
|
||||
|
||||||||
Liabilities and Stockholders' Equity
|
||||||||
Current liabilities
|
||||||||
Current portion of long-term debt
|
$
|
307,845
|
$
|
509,543
|
||||
Trade accounts payable
|
45,920
|
43,184
|
||||||
Accrued expenses
|
187,466
|
200,895
|
||||||
Refundable entrance fees and deferred revenue
|
364,148
|
370,755
|
||||||
Tenant security deposits
|
5,966
|
6,521
|
||||||
Total current liabilities
|
911,345
|
1,130,898
|
||||||
Long-term debt, less current portion
|
2,286,085
|
2,089,826
|
||||||
Line of credit
|
45,000
|
80,000
|
||||||
Deferred entrance fee revenue
|
81,098
|
79,010
|
||||||
Deferred liabilities
|
150,444
|
150,788
|
||||||
Deferred tax liability
|
96,187
|
96,187
|
||||||
Other liabilities
|
42,880
|
42,283
|
||||||
Total liabilities
|
3,613,039
|
3,668,992
|
||||||
|
||||||||
Stockholders' Equity
|
||||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized at March 31, 2013 and December 31, 2012; no shares issued and outstanding
|
—
|
—
|
||||||
Common stock, $0.01 par value, 200,000,000 shares authorized at March 31, 2013 and December 31, 2012; 130,097,962 and 129,117,946 shares issued and 127,669,561 and 126,689,545 shares outstanding (including 4,629,150 and 3,951,950 unvested restricted shares), respectively
|
1,277
|
1,267
|
||||||
Additional paid-in-capital
|
2,005,261
|
1,997,946
|
||||||
Treasury stock, at cost; 2,428,401 shares at March 31, 2013 and December 31, 2012
|
(46,800
|
)
|
(46,800
|
)
|
||||
Accumulated deficit
|
(951,869
|
)
|
(955,427
|
)
|
||||
Total stockholders' equity
|
1,007,869
|
996,986
|
||||||
Total liabilities and stockholders' equity
|
$
|
4,620,908
|
$
|
4,665,978
|
||||
|
Three Months Ended
March 31,
|
||||||||
2013
|
2012
|
|||||||
Revenue
|
||||||||
Resident fees
|
$
|
624,370
|
$
|
596,549
|
||||
Management fees
|
7,609
|
7,444
|
||||||
Reimbursed costs incurred on behalf of managed communities
|
80,287
|
78,715
|
||||||
Total revenue
|
712,266
|
682,708
|
||||||
|
||||||||
Expense
|
||||||||
Facility operating expense (excluding depreciation and amortization of $57,255 and $57,936, respectively)
|
413,003
|
398,769
|
||||||
General and administrative expense (including non-cash stock-based compensation expense of $6,894 and $6,435, respectively)
|
46,611
|
44,973
|
||||||
Facility lease expense
|
69,019
|
71,445
|
||||||
Depreciation and amortization
|
64,659
|
63,344
|
||||||
Asset impairment
|
—
|
1,083
|
||||||
Loss on acquisition
|
—
|
636
|
||||||
Gain on facility lease termination
|
—
|
(2,780
|
)
|
|||||
Costs incurred on behalf of managed communities
|
80,287
|
78,715
|
||||||
Total operating expense
|
673,579
|
656,185
|
||||||
Income from operations
|
38,687
|
26,523
|
||||||
|
||||||||
Interest income
|
303
|
852
|
||||||
Interest expense:
|
||||||||
Debt
|
(30,971
|
)
|
(32,050
|
)
|
||||
Amortization of deferred financing costs and debt discount
|
(4,569
|
)
|
(4,473
|
)
|
||||
Change in fair value of derivatives and amortization
|
135
|
(233
|
)
|
|||||
Loss on extinguishment of debt
|
—
|
(221
|
)
|
|||||
Equity in earnings of unconsolidated ventures
|
115
|
99
|
||||||
Other non-operating income (loss)
|
1,006
|
(111
|
)
|
|||||
Income (loss) before income taxes
|
4,706
|
(9,614
|
)
|
|||||
Provision for income taxes
|
(1,148
|
)
|
(930
|
)
|
||||
Net income (loss)
|
$
|
3,558
|
$
|
(10,544
|
)
|
|||
|
||||||||
Basic earnings (loss) per share
|
$
|
0.03
|
$
|
(0.09
|
)
|
|||
|
||||||||
Weighted average shares used in computing basic earnings (loss) per share
|
122,823
|
121,145
|
||||||
|
||||||||
Diluted earnings (loss) per share
|
$
|
0.03
|
$
|
(0.09
|
)
|
|||
|
||||||||
Weighted average shares used in computing diluted earnings (loss) per share
|
124,391
|
121,145
|
||||||
|
Three Months Ended
March 31,
|
||||||||
2013
|
2012
|
|||||||
|
||||||||
Net income (loss)
|
$
|
3,558
|
$
|
(10,544
|
)
|
|||
Other comprehensive income:
|
||||||||
Unrealized gain on marketable securities - restricted
|
—
|
1,038
|
||||||
Other
|
—
|
9
|
||||||
Total other comprehensive income, net of tax
|
—
|
1,047
|
||||||
Comprehensive income (loss)
|
$
|
3,558
|
$
|
(9,497
|
)
|
|||
|
|
Common Stock
|
|||||||||||||||||||||||
|
Shares
|
Amount
|
Additional
Paid-In-
Capital
|
Treasury
Stock
|
Accumulated
Deficit
|
Total
|
||||||||||||||||||
Balances at January 1, 2013 as previously reported
|
126,689
|
$
|
1,267
|
$
|
1,997,946
|
$
|
(46,800
|
)
|
$
|
(949,696
|
)
|
$
|
1,002,717
|
|||||||||||
Retrospective adjustment for adoption of accounting policy
|
―
|
―
|
―
|
―
|
(5,731
|
)
|
(5,731
|
)
|
||||||||||||||||
Balances at January 1, 2013 as adjusted
|
126,689
|
1,267
|
1,997,946
|
(46,800
|
)
|
(955,427
|
)
|
996,986
|
||||||||||||||||
Compensation expense related to restricted stock grants
|
―
|
―
|
6,894
|
―
|
―
|
6,894
|
||||||||||||||||||
Net income
|
―
|
―
|
―
|
―
|
3,558
|
3,558
|
||||||||||||||||||
Issuance of common stock under Associate Stock Purchase Plan
|
15
|
―
|
366
|
―
|
―
|
366
|
||||||||||||||||||
Restricted stock, net
|
966
|
10
|
―
|
―
|
―
|
10
|
||||||||||||||||||
Other
|
―
|
―
|
55
|
―
|
―
|
55
|
||||||||||||||||||
Balances at March 31, 2013
|
127,670
|
$
|
1,277
|
$
|
2,005,261
|
$
|
(46,800
|
)
|
$
|
(951,869
|
)
|
$
|
1,007,869
|
|||||||||||
|
Three Months Ended
March 31,
|
||||||||
|
2013
|
2012
|
||||||
Cash Flows from Operating Activities
|
||||||||
Net income (loss)
|
$
|
3,558
|
$
|
(10,544
|
)
|
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||
Loss on extinguishment of debt
|
―
|
221
|
||||||
Depreciation and amortization
|
69,228
|
67,817
|
||||||
Asset impairment
|
―
|
1,083
|
||||||
Equity in earnings of unconsolidated ventures
|
(115
|
)
|
(99
|
)
|
||||
Distributions from unconsolidated ventures from cumulative share of net earnings
|
668
|
206
|
||||||
Amortization of deferred gain
|
(1,093
|
)
|
(1,093
|
)
|
||||
Amortization of entrance fees
|
(7,133
|
)
|
(6,066
|
)
|
||||
Proceeds from deferred entrance fee revenue
|
9,237
|
7,000
|
||||||
Deferred income tax benefit
|
―
|
(135
|
)
|
|||||
Change in deferred lease liability
|
748
|
1,642
|
||||||
Change in fair value of derivatives and amortization
|
(135
|
)
|
233
|
|||||
(Gain) loss on sale of assets
|
(926
|
)
|
114
|
|||||
Loss on acquisition
|
―
|
636
|
||||||
Gain on facility lease termination
|
―
|
(2,780
|
)
|
|||||
Non-cash stock-based compensation
|
6,894
|
6,435
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
(9,064
|
)
|
(5,317
|
)
|
||||
Prepaid expenses and other assets, net
|
9,140
|
(1,681
|
)
|
|||||
Accounts payable and accrued expenses
|
(10,871
|
)
|
(23,705
|
)
|
||||
Tenant refundable fees and security deposits
|
(335
|
)
|
(442
|
)
|
||||
Deferred revenue
|
(5,316
|
)
|
12,168
|
|||||
Net cash provided by operating activities
|
64,485
|
45,693
|
||||||
|
||||||||
Cash Flows from Investing Activities
|
||||||||
Increase in lease security deposits and lease acquisition deposits, net
|
(1,952
|
)
|
(2,217
|
)
|
||||
Decrease in cash and escrow deposits — restricted
|
826
|
8,442
|
||||||
Purchase of marketable securities — restricted
|
―
|
(761
|
)
|
|||||
Additions to property, plant and equipment and leasehold intangibles, net of related payables
|
(51,614
|
)
|
(41,533
|
)
|
||||
Acquisition of assets, net of related payables and cash received
|
(2
|
)
|
(104,984
|
)
|
||||
Issuance of notes receivable, net
|
(17
|
)
|
(439
|
)
|
||||
Investment in unconsolidated ventures
|
(5,843
|
)
|
―
|
|||||
Distributions received from unconsolidated ventures
|
―
|
100
|
||||||
Proceeds from sale of assets, net
|
440
|
―
|
||||||
Net cash used in investing activities
|
(58,162
|
)
|
(141,392
|
)
|
||||
|
||||||||
Cash Flows from Financing Activities
|
||||||||
Proceeds from debt
|
8,955
|
175,838
|
||||||
Repayment of debt and capital lease obligations
|
(17,707
|
)
|
(86,068
|
)
|
||||
Proceeds from line of credit
|
105,000
|
130,000
|
||||||
Repayment of line of credit
|
(140,000
|
)
|
(110,000
|
)
|
||||
Payment of financing costs, net of related payables
|
(2,200
|
)
|
(2,378
|
)
|
||||
Refundable entrance fees:
|
||||||||
Proceeds from refundable entrance fees
|
7,636
|
7,989
|
||||||
Refunds of entrance fees
|
(9,320
|
)
|
(8,102
|
)
|
||||
Cash portion of loss on extinguishment of debt
|
―
|
(118
|
)
|
|||||
Recouponing and payment of swap termination
|
―
|
(99
|
)
|
|||||
Other
|
315
|
(86
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(47,321
|
)
|
106,976
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(40,998
|
)
|
11,277
|
|||||
Cash and cash equivalents at beginning of period
|
69,240
|
30,836
|
||||||
Cash and cash equivalents at end of period
|
$
|
28,242
|
$
|
42,113 |
As of and for the Year Ended December 31, 2012
|
||||||||||||
As Reported
|
Adjustment
|
As Adjusted
|
||||||||||
Consolidated Balance Sheets
|
||||||||||||
Refundable entrance fees and deferred revenue
|
$
|
361,360
|
$
|
9,395
|
$
|
370,755
|
||||||
Deferred tax liability
|
99,851
|
(3,664
|
)
|
96,187
|
||||||||
Accumulated deficit
|
(949,696
|
)
|
(5,731
|
)
|
(955,427
|
)
|
||||||
Consolidated Statements of Operations
|
||||||||||||
Resident fees
|
$
|
2,414,283
|
$
|
(1,347
|
)
|
$
|
2,412,936
|
|||||
Total revenue
|
2,770,085
|
(1,347
|
)
|
2,768,738
|
||||||||
Loss before income taxes
|
(63,601
|
)
|
(1,347
|
)
|
(64,948
|
)
|
||||||
Provision for income taxes
|
(2,044
|
)
|
525
|
(1,519
|
)
|
|||||||
Net loss
|
(65,645
|
)
|
(822
|
)
|
(66,467
|
)
|
||||||
Basic and diluted net loss per share
|
(0.54
|
)
|
—
|
(0.54
|
)
|
|||||||
Consolidated Statements of Cash Flows
|
||||||||||||
Net loss
|
$
|
(65,645
|
)
|
$
|
(822
|
)
|
$
|
(66,467
|
)
|
|||
Amortization of entrance fees
|
(26,709
|
)
|
1,347
|
(25,362
|
)
|
|||||||
Deferred income tax benefit
|
—
|
(525
|
)
|
(525
|
)
|
|
Year Ended December 31, 2011
|
|||||||||||
As Reported
|
Adjustment
|
As Adjusted
|
||||||||||
Consolidated Statements of Operations
|
||||||||||||
Resident fees
|
$
|
2,291,757
|
$
|
(1,435
|
)
|
$
|
2,290,322
|
|||||
Total revenue
|
2,457,918
|
(1,435
|
)
|
2,456,483
|
||||||||
Loss before income taxes
|
(65,835
|
)
|
(1,435
|
)
|
(67,270
|
)
|
||||||
Provision for income taxes
|
(2,340
|
)
|
560
|
(1,780
|
)
|
|||||||
Net loss
|
(68,175
|
)
|
(875
|
)
|
(69,050
|
)
|
||||||
Basic and diluted net loss per share
|
(0.56
|
)
|
(0.01
|
)
|
(0.57
|
)
|
||||||
Consolidated Statements of Cash Flows
|
||||||||||||
Net loss
|
$
|
(68,175
|
)
|
$
|
(875
|
)
|
$
|
(69,050
|
)
|
|||
Amortization of entrance fees
|
(25,401
|
)
|
1,435
|
(23,966
|
)
|
|||||||
Deferred income tax provision
|
943
|
(560
|
)
|
383
|
Three Months Ended March 31, 2012
|
||||||||||||
As Reported
|
Adjustment
|
As Adjusted
|
||||||||||
Condensed Consolidated Statements of Operations
|
||||||||||||
Resident fees
|
$
|
596,886
|
$
|
(337
|
)
|
$
|
596,549
|
|||||
Total revenue
|
683,045
|
(337
|
)
|
682,708
|
||||||||
Loss before income taxes
|
(9,277
|
)
|
(337
|
)
|
(9,614
|
)
|
||||||
Provision for income taxes
|
(1,061
|
)
|
131
|
(930
|
)
|
|||||||
Net loss
|
(10,338
|
)
|
(206
|
)
|
(10,544
|
)
|
||||||
Basic and diluted net loss per share
|
(0.09
|
)
|
-
|
(0.09
|
)
|
|||||||
Condensed Consolidated Statements of Cash Flows
|
||||||||||||
Net loss
|
$
|
(10,338
|
)
|
$
|
(206
|
)
|
$
|
(10,544
|
)
|
|||
Amortization of entrance fees
|
(6,403
|
)
|
337
|
(6,066
|
)
|
|||||||
Deferred income tax benefit
|
(4
|
)
|
(131
|
)
|
(135
|
)
|
Three Months Ended
March 31,
|
||||||||
2013
|
2012
|
|||||||
Income attributable to common shareholders:
|
||||||||
Net income (loss)
|
$
|
3,558
|
$
|
(10,544
|
)
|
|||
Weighted-average shares outstanding - basic
|
122,823
|
121,145
|
||||||
Effect of dilutive securities - Unvested restricted stock and restricted stock units
|
1,568
|
—
|
||||||
Weighted-average shares outstanding - diluted
|
124,391
|
121,145
|
||||||
Basic earnings (loss) per common share:
|
||||||||
Net income (loss) per share attributable to common shareholders
|
$
|
0.03
|
$
|
(0.09
|
)
|
|||
Diluted earnings (loss) per common share:
|
||||||||
Net income (loss) per share attributable to common shareholders
|
$
|
0.03
|
$
|
(0.09
|
)
|
|||
Shares Granted
|
Value Per Share
|
Total Value
|
||||||||||
Three months ended March 31, 2013
|
1,036
|
|
$25.32 − $27.36
|
|
$27,858
|
March 31, 2013
|
December 31, 2012
|
|||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Impairment
and Other
Charges
|
Net
|
Gross
Carrying
Amount
|
Accumulated
Impairment
and Other
Charges
|
Net
|
|||||||||||||||||||
Retirement Centers
|
$
|
7,642
|
$
|
(521
|
)
|
$
|
7,121
|
$
|
7,642
|
$
|
(521
|
)
|
$
|
7,121
|
||||||||||
Assisted Living
|
102,680
|
(248
|
)
|
102,432
|
102,680
|
(248
|
)
|
102,432
|
||||||||||||||||
CCRCs - Rental
|
56,281
|
(56,281
|
)
|
—
|
56,281
|
(56,281
|
)
|
—
|
||||||||||||||||
CCRCs - Entry Fee
|
158,718
|
(158,718
|
)
|
—
|
158,718
|
(158,718
|
)
|
—
|
||||||||||||||||
Total
|
$
|
325,321
|
$
|
(215,768
|
)
|
$
|
109,553
|
$
|
325,321
|
$
|
(215,768
|
)
|
$
|
109,553
|
||||||||||
March 31, 2013
|
December 31, 2012
|
|||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
|
|||||||||||||||||||
Community purchase options
|
$
|
147,610
|
$
|
(22,188
|
)
|
$
|
125,422
|
$
|
147,610
|
$
|
(21,263
|
)
|
$
|
126,347
|
||||||||||
Health care licenses
|
31,084
|
—
|
31,084
|
31,082
|
—
|
31,082
|
||||||||||||||||||
Other
|
2,585
|
(287
|
)
|
2,298
|
2,585
|
(72
|
)
|
2,513
|
||||||||||||||||
Total
|
$
|
181,279
|
$
|
(22,475
|
)
|
$
|
158,804
|
$
|
181,277
|
$
|
(21,335
|
)
|
$
|
159,942
|
||||||||||
|
March 31,
2013
|
December 31,
2012
|
|||||||
Land
|
$
|
295,513
|
$
|
296,314
|
||||
Buildings and improvements
|
3,400,253
|
3,391,667
|
||||||
Leasehold improvements
|
61,183
|
60,186
|
||||||
Furniture and equipment
|
559,708
|
541,585
|
||||||
Resident and leasehold operating intangibles
|
441,547
|
441,603
|
||||||
Construction in progress
|
79,102
|
75,419
|
||||||
Assets under capital and financing leases
|
677,226
|
674,492
|
||||||
5,514,532
|
5,481,266
|
|||||||
Accumulated depreciation and amortization
|
(1,661,109
|
)
|
(1,601,289
|
)
|
||||
Property, plant and equipment and leasehold intangibles, net
|
$
|
3,853,423
|
$
|
3,879,977
|
||||
|
March 31,
2013
|
December 31,
2012
|
|||||||
Mortgage notes payable due 2013 through 2022; weighted average interest rate of 4.61% for the three months ended March 31, 2013, net of debt discount of $0.3 million (weighted average interest rate of 4.62% in 2012)
|
$
|
1,695,258
|
$
|
1,701,515
|
||||
$150,000 Series A notes payable, secured by five communities and by a $3.0 million cash collateral deposit, bearing interest at LIBOR plus 0.88%, payable in monthly installments of principal and interest through maturity in August 2013
|
143,310
|
144,384
|
Discount mortgage note payable due June 2013, weighted average interest rate of 2.46% for the three months ended March 31, 2013, net of debt discount of $0.5 million and $1.0 million in 2013 and 2012, respectively (weighted average interest rate of 2.56% in 2012)
|
80,687
|
80,533
|
||||||
Variable rate tax-exempt bonds credit-enhanced by Fannie Mae; weighted average interest rate of 1.42% for the three months ended March 31, 2013 (weighted average interest rate of 1.65% in 2012), due 2032, payable in monthly installments of principal and interest through maturity, secured by the underlying assets of the portfolio
|
99,646
|
99,847
|
||||||
Capital and financing lease obligations payable through 2026; weighted average interest rate of 8.16% for the three months ended March 31, 2013 (weighted average interest rate of 8.16% in 2012)
|
312,679
|
319,745
|
||||||
Convertible notes payable in aggregate principal amount of $316.3 million, less debt discount of $62.5 million and $65.0 million in 2013 and 2012, respectively, interest at 2.75% per annum, due June 2018
|
253,775
|
251,312
|
||||||
Construction financing due 2017 through 2024; weighted average interest rate of 8.0% for the three months ended March 31, 2013 (weighted average interest rate of 8.0% in 2012)
|
4,093
|
1,280
|
||||||
Notes payable issued to finance insurance premiums, weighted average interest rate of 2.81% for the three months ended March 31, 2013 (weighted average interest rate of 2.81% in 2012), due 2013
|
4,482
|
753
|
||||||
Total debt
|
2,593,930
|
2,599,369
|
||||||
Less current portion
|
307,845
|
509,543
|
||||||
Total long-term debt
|
$
|
2,286,085
|
$
|
2,089,826
|
||||
|
Three Months Ended
March 31,
|
||||||||
2013
|
2012
|
|||||||
Supplemental Disclosure of Cash Flow Information:
|
||||||||
Interest paid
|
$
|
29,027
|
$
|
30,049
|
||||
Income taxes paid
|
$
|
341
|
$
|
207
|
||||
Write-off of deferred costs
|
$
|
—
|
$
|
744
|
||||
Supplemental Schedule of Non-cash Operating, Investing and Financing Activities:
|
||||||||
Acquisition of assets, net of related payables and cash received:
|
||||||||
Cash and escrow deposits-restricted
|
$
|
—
|
$
|
3,313
|
||||
Prepaid expenses and other current assets
|
—
|
(2,817
|
)
|
|||||
Property, plant and equipment and leasehold intangibles, net
|
—
|
121,250
|
||||||
Other intangible assets, net
|
—
|
3,672
|
||||||
Other assets, net
|
—
|
(7,327
|
)
|
|||||
Accrued expenses
|
—
|
(392
|
)
|
|||||
Other liabilities
|
—
|
4,429
|
||||||
Long-term debt, less current portion
|
—
|
(15,000
|
)
|
|||||
Accumulated earnings
|
—
|
(2,144
|
)
|
|||||
Net
|
$
|
—
|
$
|
104,984
|
||||
Three Months Ended
March 31,
|
||||||||
2013
|
2012
|
|||||||
Cash basis payment
|
$
|
69,364
|
$
|
70,896
|
||||
Straight-line expense
|
748
|
1,642
|
||||||
Amortization of deferred gain
|
(1,093
|
)
|
(1,093
|
)
|
||||
Facility lease expense
|
$
|
69,019
|
$
|
71,445
|
||||
|
|
Three Months Ended
March 31,
|
|||||||
|
2013
|
2012
|
||||||
Revenue(1)
|
||||||||
Retirement Centers
|
$
|
128,922
|
$
|
124,512
|
||||
Assisted Living
|
260,615
|
251,352
|
||||||
CCRCs - Rental
|
100,327
|
95,112
|
||||||
CCRCs - Entry Fee
|
74,308
|
71,719
|
||||||
ISC
|
60,198
|
53,854
|
||||||
Management Services(2)
|
87,896
|
86,159
|
||||||
|
$
|
712,266
|
$
|
682,708
|
||||
Segment operating income(3)
|
||||||||
Retirement Centers
|
$
|
53,334
|
$
|
50,991
|
||||
Assisted Living
|
96,285
|
90,563
|
||||||
CCRCs - Rental
|
29,077
|
28,019
|
||||||
CCRCs - Entry Fee
|
19,571
|
16,805
|
||||||
ISC
|
13,100
|
11,402
|
||||||
Management Services
|
7,609
|
7,444
|
||||||
|
218,976
|
205,224
|
||||||
General and administrative (including non-cash stock-based compensation expense)
|
46,611
|
44,973
|
||||||
Facility lease expense
|
69,019
|
71,445
|
||||||
Depreciation and amortization
|
64,659
|
63,344
|
||||||
Asset impairment
|
—
|
1,083
|
||||||
Loss on acquisition
|
—
|
636
|
||||||
Gain on facility lease termination
|
—
|
(2,780
|
)
|
|||||
Income from operations
|
$
|
38,687
|
$
|
26,523
|
||||
|
As of | ||||||||
March 31,
2013
|
December 31,
2012
|
|||||||
Total assets
|
||||||||
Retirement Centers
|
$
|
1,255,802
|
$
|
1,256,497
|
||||
Assisted Living
|
1,427,052
|
1,438,934
|
||||||
CCRCs - Rental
|
531,131
|
534,220
|
||||||
CCRCs - Entry Fee
|
943,038
|
951,584
|
||||||
ISC
|
91,974
|
90,357
|
||||||
Corporate and Management Services
|
371,911
|
394,386
|
||||||
Total assets
|
$
|
4,620,908
|
$
|
4,665,978
|
||||
(1) | All revenue is earned from external third parties in the United States. |
(2) | Management services segment revenue includes reimbursements for which the Company is the primary obligor of costs incurred on behalf of managed communities. |
(3) | Segment operating income is defined as segment revenues less segment operating expenses (excluding depreciation and amortization). |
|
Three Months Ended
March 31,
|
Increase
|
||||||||||||||
|
2013
|
2012
|
Amount
|
Percent
|
||||||||||||
Total revenues
|
$
|
712.3
|
$
|
682.7
|
$
|
29.6
|
4.3
|
%
|
||||||||
Net income (loss)
|
$
|
3.6
|
$
|
(10.5
|
)
|
$
|
14.1
|
133.7
|
%
|
|||||||
Adjusted EBITDA
|
$
|
110.3
|
$
|
96.6
|
$
|
13.7
|
14.2
|
%
|
||||||||
Cash From Facility Operations
|
$
|
67.8
|
$
|
54.6
|
$
|
13.3
|
24.3
|
%
|
||||||||
Facility Operating Income
|
$
|
204.2
|
$
|
191.7
|
$
|
12.5
|
6.5
|
%
|
(dollars in thousands, except average monthly revenue per unit)
|
Three Months Ended
March 31,
|
|||||||||||||||
2013
|
2012
|
Increase
(Decrease)
|
% Increase
(Decrease)
|
|||||||||||||
Statement of Operations Data:
|
||||||||||||||||
Revenue
|
||||||||||||||||
Resident fees
|
||||||||||||||||
Retirement Centers
|
$
|
128,922
|
$
|
124,512
|
$
|
4,410
|
3.5
|
%
|
||||||||
Assisted Living
|
260,615
|
251,352
|
9,263
|
3.7
|
%
|
|||||||||||
CCRCs - Rental
|
100,327
|
95,112
|
5,215
|
5.5
|
%
|
|||||||||||
CCRCs - Entry Fee
|
74,308
|
71,719
|
2,589
|
3.6
|
%
|
|||||||||||
ISC
|
60,198
|
53,854
|
6,344
|
11.8
|
%
|
|||||||||||
Total resident fees
|
624,370
|
596,549
|
27,821
|
4.7
|
%
|
|||||||||||
Management services(1)
|
87,896
|
86,159
|
1,737
|
2.0
|
%
|
|||||||||||
Total revenue
|
712,266
|
682,708
|
29,558
|
4.3
|
%
|
Three Months Ended
March 31,
|
||||||||||||||||
2013
|
2012
|
Increase
(Decrease)
|
% Increase
(Decrease)
|
|||||||||||||
Expense
|
||||||||||||||||
Facility operating expense
|
||||||||||||||||
Retirement Centers
|
75,588
|
73,521
|
2,067
|
2.8
|
%
|
|||||||||||
Assisted Living
|
164,330
|
160,789
|
3,541
|
2.2
|
%
|
|||||||||||
CCRCs - Rental
|
71,250
|
67,093
|
4,157
|
6.2
|
%
|
|||||||||||
CCRCs - Entry Fee
|
54,737
|
54,914
|
(177
|
)
|
(0.3
|
%)
|
||||||||||
ISC
|
47,098
|
42,452
|
4,646
|
10.9
|
%
|
|||||||||||
Total facility operating expense
|
413,003
|
398,769
|
14,234
|
3.6
|
%
|
|||||||||||
General and administrative expense
|
46,611
|
44,973
|
1,638
|
3.6
|
%
|
|||||||||||
Facility lease expense
|
69,019
|
71,445
|
(2,426
|
)
|
(3.4
|
%)
|
||||||||||
Depreciation and amortization
|
64,659
|
63,344
|
1,315
|
2.1
|
%
|
|||||||||||
Asset impairment
|
—
|
1,083
|
(1,083
|
)
|
(100.0
|
%)
|
||||||||||
Loss on acquisition
|
—
|
636
|
(636
|
)
|
(100.0
|
%)
|
||||||||||
Gain on facility lease termination
|
—
|
(2,780
|
)
|
(2,780
|
)
|
(100.0
|
%)
|
|||||||||
Costs incurred on behalf of managed communities
|
80,287
|
78,715
|
1,572
|
2.0
|
%
|
|||||||||||
Total operating expense
|
673,579
|
656,185
|
17,394
|
2.7
|
%
|
|||||||||||
Income from operations
|
38,687
|
26,523
|
12,164
|
45.9
|
%
|
|||||||||||
Interest income
|
303
|
852
|
(549
|
)
|
(64.4
|
%)
|
||||||||||
Interest expense
|
||||||||||||||||
Debt
|
(30,971
|
)
|
(32,050
|
)
|
(1,079
|
)
|
(3.4
|
%)
|
||||||||
Amortization of deferred financing costs and debt discount
|
(4,569
|
)
|
(4,473
|
)
|
96
|
2.1
|
%
|
|||||||||
Change in fair value of derivatives and amortization
|
135
|
(233
|
)
|
368
|
157.9
|
%
|
||||||||||
Loss on extinguishment of debt
|
—
|
(221
|
)
|
(221
|
)
|
(100.0
|
%)
|
|||||||||
Equity in earnings of unconsolidated ventures
|
115
|
99
|
16
|
16.2
|
%
|
|||||||||||
Other non-operating income (loss)
|
1,006
|
(111
|
)
|
1,117
|
NM
|
Three Months Ended
March 31,
|
||||||||||||||||
2013
|
2012
|
Increase
(Decrease)
|
% Increase
(Decrease)
|
|||||||||||||
Income (loss) before income taxes
|
4,706
|
(9,614
|
)
|
14,320
|
148.9
|
%
|
||||||||||
Provision for income taxes
|
(1,148
|
)
|
(930
|
)
|
218
|
23.4
|
%
|
|||||||||
Net income (loss)
|
$
|
3,558
|
$
|
(10,544
|
)
|
$
|
14,102
|
133.7
|
%
|
|||||||
|
||||||||||||||||
Selected Operating and Other Data:
|
||||||||||||||||
Total number of communities (period end)
|
649
|
646
|
3
|
0.5
|
%
|
|||||||||||
Total units operated(2)
|
||||||||||||||||
Period end
|
66,127
|
66,093
|
34
|
0.1
|
%
|
|||||||||||
Weighted average
|
66,067
|
66,137
|
(70
|
)
|
(0.1
|
%)
|
||||||||||
Owned/leased communities units(2)
|
||||||||||||||||
Period end
|
47,850
|
47,904
|
(54
|
)
|
(0.1
|
%)
|
||||||||||
Weighted average
|
47,953
|
47,884
|
69
|
0.1
|
%
|
|||||||||||
Owned/leased communities occupancy rate (weighted average)
|
88.5
|
%
|
87.8
|
%
|
0.7
|
%
|
0.8
|
%
|
||||||||
Senior Housing average monthly revenue per unit(3)
|
$
|
4,375
|
$
|
4,257
|
$
|
118
|
2.8
|
%
|
||||||||
|
||||||||||||||||
Selected Segment Operating and Other Data:
|
||||||||||||||||
Retirement Centers
|
||||||||||||||||
Number of communities (period end)
|
76
|
76
|
—
|
—
|
||||||||||||
Total units(2)
|
||||||||||||||||
Period end
|
14,429
|
14,452
|
(23
|
)
|
(0.2
|
%)
|
||||||||||
Weighted average
|
14,429
|
14,452
|
(23
|
)
|
(0.2
|
%)
|
||||||||||
Occupancy rate (weighted average)
|
89.5
|
%
|
88.8
|
%
|
0.7
|
%
|
0.8
|
%
|
||||||||
Senior Housing average monthly revenue per unit(3)
|
$
|
3,328
|
$
|
3,235
|
$
|
93
|
2.9
|
%
|
||||||||
Assisted Living
|
||||||||||||||||
Number of communities (period end)
|
431
|
434
|
(3
|
)
|
(0.7
|
%)
|
||||||||||
Total units(2)
|
||||||||||||||||
Period end
|
21,446
|
21,635
|
(189
|
)
|
(0.9
|
%)
|
||||||||||
Weighted average
|
21,556
|
21,635
|
(79
|
)
|
(0.4
|
%)
|
||||||||||
Occupancy rate (weighted average)
|
89.1
|
%
|
88.5
|
%
|
0.6
|
%
|
0.7
|
%
|
||||||||
Senior Housing average monthly revenue per unit(3)
|
$
|
4,523
|
$
|
4,379
|
$
|
144
|
3.3
|
%
|
||||||||
CCRCs - Rental
|
||||||||||||||||
Number of communities (period end)
|
27
|
26
|
1
|
3.8
|
%
|
|||||||||||
Total units(2)
|
||||||||||||||||
Period end
|
6,688
|
6,627
|
61
|
0.9
|
%
|
|||||||||||
Weighted average
|
6,687
|
6,626
|
61
|
0.9
|
%
|
|||||||||||
Occupancy rate (weighted average)
|
87.6
|
%
|
86.5
|
%
|
1.1
|
%
|
1.3
|
%
|
||||||||
Senior Housing average monthly revenue per unit(3)
|
$
|
5,709
|
$
|
5,536
|
$
|
173
|
3.1
|
%
|
||||||||
CCRCs - Entry Fee
|
||||||||||||||||
Number of communities (period end)
|
14
|
14
|
—
|
—
|
||||||||||||
Total units(2)
|
||||||||||||||||
Period end
|
5,287
|
5,190
|
97
|
1.9
|
%
|
|||||||||||
Weighted average
|
5,281
|
5,171
|
110
|
2.1
|
%
|
|||||||||||
Occupancy rate (weighted average)
|
84.6
|
%
|
83.7
|
%
|
0.9
|
%
|
1.1
|
%
|
||||||||
Senior Housing average monthly revenue per unit(3)
|
$
|
5,011
|
$
|
5,055
|
$
|
(44
|
)
|
(0.9
|
%)
|
|
Three Months Ended
March 31,
|
|||||||||||||||
|
2013
|
2012
|
Increase
(Decrease)
|
% Increase
(Decrease)
|
||||||||||||
Other Entry Fee Data
|
||||||||||||||||
Non-refundable entrance fees sales
|
$
|
9,237
|
$
|
7,000
|
$
|
2,237
|
32.0
|
%
|
||||||||
Refundable entrance fees sales(4)
|
7,636
|
7,989
|
(353
|
)
|
(4.4
|
%)
|
||||||||||
Total entrance fee receipts
|
16,873
|
14,989
|
1,884
|
12.6
|
%
|
|||||||||||
Refunds
|
(9,320
|
)
|
(8,102
|
)
|
1,218
|
15.0
|
%
|
|||||||||
Net entrance fees
|
$
|
7,553
|
$
|
6,887
|
$
|
666
|
9.7
|
%
|
||||||||
Management Services
|
||||||||||||||||
Number of communities (period end)
|
101
|
96
|
5
|
5.2
|
%
|
|||||||||||
Total units(2)
|
||||||||||||||||
Period end
|
18,277
|
18,189
|
88
|
0.5
|
%
|
|||||||||||
Weighted average
|
18,114
|
18,253
|
(139
|
)
|
(0.8
|
%)
|
||||||||||
Occupancy rate (weighted average)
|
84.9
|
%
|
84.3
|
%
|
0.6
|
%
|
0.7
|
%
|
||||||||
|
||||||||||||||||
ISC
|
||||||||||||||||
Outpatient Therapy treatment codes
|
821,308
|
907,816
|
(86,508
|
)
|
(9.5
|
%)
|
||||||||||
Home Health average census
|
4,289
|
3,448
|
841
|
24.4
|
%
|
(1) | Management services segment revenue includes reimbursements for which we are the primary obligor of costs incurred on behalf of managed communities. |
(2) | Period end units operated excludes equity homes. Weighted average units operated represents the average units operated during the period, excluding equity homes. |
(3) | Senior Housing average monthly revenue per unit represents the average of the total monthly resident fee revenues, excluding amortization of entrance fees and ISC segment revenue, divided by average occupied units. |
(4) | Refundable entrance fee sales for the three months ended March 31, 2013 and 2012 include amounts received from residents participating in the MyChoice program, which allows new and existing residents the option to pay additional refundable entrance fee amounts in return for a reduced monthly service fee. MyChoice amounts received from residents totaled $1.8 million and $2.4 million for the three months ended March 31, 2013 and 2012, respectively. |
Three Months Ended March 31,
|
||||||||||||||||
2013
|
2012
|
|||||||||||||||
Resident fee revenues
|
$
|
624,370
|
79.2
|
%
|
$
|
596,549
|
79.0
|
%
|
||||||||
Resident fee revenues under management
|
163,507
|
20.8
|
%
|
158,695
|
21.0
|
%
|
||||||||||
Total
|
$
|
787,877
|
100.0
|
%
|
$
|
755,244
|
100.0
|
%
|
||||||||
General and administrative expenses (excluding non-cash stock-based compensation expense and integration, transaction-related and EMR roll-out costs)
|
$
|
37,612
|
4.8
|
%
|
$
|
34,634
|
4.6
|
%
|
||||||||
Non-cash stock-based compensation expense
|
6,894
|
0.9
|
%
|
6,435
|
0.9
|
%
|
||||||||||
Integration, transaction-related and EMR roll-out costs
|
2,105
|
0.2
|
%
|
3,904
|
0.5
|
%
|
||||||||||
General and administrative expenses (including non-cash stock-based compensation expense and integration, transaction-related and EMR roll-out costs)
|
$
|
46,611
|
5.9
|
%
|
$
|
44,973
|
6.0
|
%
|
Three Months Ended
March 31,
|
||||||||
2013
|
2012
|
|||||||
Cash provided by operating activities
|
$
|
64,485
|
$
|
45,693
|
||||
Cash used in investing activities
|
(58,162
|
)
|
(141,392
|
)
|
||||
Cash (used in) provided by financing activities
|
(47,321
|
)
|
106,976
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(40,998
|
)
|
11,277
|
|||||
Cash and cash equivalents at beginning of period
|
69,240
|
30,836
|
||||||
Cash and cash equivalents at end of period
|
$
|
28,242
|
$
|
42,113
|
· | cash balances on hand; |
· | cash flows from operations; |
· | proceeds from our credit facilities; |
· | proceeds from mortgage financing or refinancing of various assets; |
· | funds generated through joint venture arrangements or sale-leaseback transactions; and |
· | with somewhat lesser frequency, funds raised in the debt or equity markets and proceeds from the selective disposition of underperforming and/or non-core assets. |
· | working capital; |
· | operating costs such as employee compensation and related benefits, general and administrative expense and supply costs; |
· | debt service and lease payments; |
· | acquisition consideration and transaction costs; |
· | cash collateral required to be posted in connection with our interest rate swaps and related financial instruments; |
· | capital expenditures and improvements, including the expansion of our current communities and the development of new communities; |
· | dividend payments; |
· | purchases of common stock under our share repurchase authorizations; and |
· | other corporate initiatives (including integration and branding). |
· | working capital; |
· | operating costs such as employee compensation and related benefits, general and administrative expense and supply costs; |
· | debt service and lease payments; |
· | capital expenditures and improvements, including the expansion, redevelopment and repositioning of our current communities and the development of new communities; |
· | other corporate initiatives (including information systems and branding); |
·
|
acquisition consideration and transaction costs; and
|
·
|
purchases of common stock under our share repurchase authorization.
|
· | provision (benefit) for income taxes; |
· | non-operating (income) expense items; |
·
|
(gain) loss on sale or acquisition of communities (including gain (loss) on facility lease termination);
|
· | depreciation and amortization (including non-cash impairment charges); |
· | straight-line lease expense (income); |
· | amortization of deferred gain; |
· | amortization of deferred entrance fees; |
· | non-cash stock-based compensation expense; and |
·
|
change in future service obligation;
|
· | entrance fee receipts and refunds (excluding (i) first generation entrance fee receipts from the sale of units at a recently opened entrance fee CCRC prior to stabilization and (ii) first generation entrance fee refunds not replaced by second generation entrance fee receipts at the recently opened community prior to stabilization). |
· | the cash portion of interest expense, income tax (benefit) provision and non-recurring charges related to gain (loss) on sale of communities and extinguishment of debt activities generally represent charges (gains), which may significantly affect our financial results; and |
· | depreciation and amortization, though not directly affecting our current cash position, represent the wear and tear and/or reduction in value of our communities, which affects the services we provide to our residents and may be indicative of future needs for capital expenditures. |
Three Months Ended
March 31,
|
||||||||
2013(1)
|
2012(1)
|
|||||||
Net income (loss)
|
$
|
3,558
|
$
|
(10,544
|
)
|
|||
Provision for income taxes
|
1,148
|
930
|
||||||
Equity in earnings of unconsolidated ventures
|
(115
|
)
|
(99
|
)
|
||||
Loss on extinguishment of debt
|
—
|
221
|
||||||
Other non-operating (income) loss
|
(1,006
|
)
|
111
|
|||||
Interest expense:
|
||||||||
Debt
|
24,448
|
24,340
|
||||||
Capitalized lease obligation
|
6,523
|
7,710
|
||||||
Amortization of deferred financing costs and debt discount
|
4,569
|
4,473
|
||||||
Change in fair value of derivatives and amortization
|
(135
|
)
|
233
|
|||||
Interest income
|
(303
|
)
|
(852
|
)
|
||||
Income from operations
|
38,687
|
26,523
|
||||||
Gain on facility lease termination
|
—
|
(2,780
|
)
|
|||||
Loss on acquisition
|
—
|
636
|
||||||
Depreciation and amortization
|
64,659
|
63,344
|
||||||
Asset impairment
|
—
|
1,083
|
||||||
Straight-line lease expense
|
748
|
1,642
|
||||||
Amortization of deferred gain
|
(1,093
|
)
|
(1,093
|
)
|
||||
Amortization of entrance fees
|
(7,133
|
)
|
(6,066
|
)
|
||||
Non-cash stock-based compensation expense
|
6,894
|
6,435
|
||||||
Entrance fee receipts(2)
|
16,873
|
14,989
|
||||||
Entrance fee disbursements
|
(9,320
|
)
|
(8,102
|
)
|
||||
Adjusted EBITDA
|
$
|
110,315
|
$
|
96,611
|
(1) | The calculation of Adjusted EBITDA includes integration, transaction-related and EMR roll-out costs of $2.1 million and $3.9 million for the three months ended March 31, 2013 and 2012, respectively. |
(2) | Includes the receipt of refundable and non-refundable entrance fees. |
· | changes in operating assets and liabilities; |
· | deferred interest and fees added to principal; |
· | refundable entrance fees received; |
· | first generation entrance fee receipts at a recently opened entrance fee CCRC prior to stabilization; |
· | entrance fee refunds disbursed adjusted for first generation entrance fee refunds not replaced by second generation entrance fee receipts at the recently opened community prior to stabilization; |
· | lease financing debt amortization with fair market value or no purchase options; |
· | gain (loss) on facility lease termination; |
· | recurring capital expenditures, net; |
· | distributions from unconsolidated ventures from cumulative share of net earnings; |
· | CFFO from unconsolidated ventures; and |
· | other. |
· | the cash portion of interest expense, income tax (benefit) provision and non-recurring charges related to gain (loss) on sale of communities and extinguishment of debt activities generally represent charges (gains), which may significantly affect our financial results; and |
· | depreciation and amortization, though not directly affecting our current cash position, represent the wear and tear and/or reduction in value of our communities, which affects the services we provide to our residents and may be indicative of future needs for capital expenditures. |
Three Months Ended
March 31,
|
||||||||
2013(1)
|
2012(1)
|
|||||||
Net cash provided by operating activities
|
$
|
64,485
|
$
|
45,693
|
||||
Changes in operating assets and liabilities
|
16,446
|
18,977
|
||||||
Refundable entrance fees received(2)(3)
|
7,636
|
7,989
|
||||||
Entrance fee refunds disbursed
|
(9,320
|
)
|
(8,102
|
)
|
||||
Recurring capital expenditures, net
|
(9,324
|
)
|
(8,064
|
)
|
||||
Lease financing debt amortization with fair market value or no purchase options
|
(3,371
|
)
|
(2,929
|
)
|
||||
Distributions from unconsolidated ventures from cumulative share of net earnings
|
(668
|
)
|
(206
|
)
|
||||
CFFO from unconsolidated ventures
|
1,958
|
1,228
|
||||||
Cash From Facility Operations
|
$
|
67,842
|
$
|
54,586
|
(1) | The calculation of Cash From Facility Operations includes integration, transaction-related and EMR roll-out costs of $2.1 million and $3.9 million for the three months ended March 31, 2013 and 2012, respectively. |
(2) | Entrance fee receipts include promissory notes issued to the Company by the resident in lieu of a portion of the entrance fees due. Collections, net of new issuances for the three months ended March 31, 2013 and 2012 were $2.2 million and $0.6 million, respectively. |
(3) | Total entrance fee receipts for the three months ended March 31, 2013 and 2012 were $16.9 million and $15.0 million, respectively, including $9.2 million and $7.0 million, respectively, of non-refundable entrance fee receipts included in net cash provided by operating activities. |
· | provision (benefit) for income taxes; |
· | non-operating (income) expense items; |
·
|
(gain) loss on sale or acquisition of communities (including gain (loss) on facility lease termination);
|
· | depreciation and amortization (including non-cash impairment charges); |
· | facility lease expense; |
· | general and administrative expense, including non-cash stock-based compensation expense; |
·
|
change in future service obligation;
|
· | amortization of deferred entrance fee revenue; and |
· | management fees. |
· | interest expense, income tax (benefit) provision and non-recurring charges related to gain (loss) on sale of communities and extinguishment of debt activities generally represent charges (gains), which may significantly affect our financial results; and |
· | depreciation and amortization, though not directly affecting our current cash position, represent the wear and tear and/or reduction in value of our communities, which affects the services we provide to our residents and may be indicative of future needs for capital expenditures. |
Three Months Ended
March 31,
|
||||||||
2013
|
2012
|
|||||||
Net income (loss)
|
$
|
3,558
|
$
|
(10,544
|
)
|
|||
Provision for income taxes
|
1,148
|
930
|
||||||
Equity in earnings of unconsolidated ventures
|
(115
|
)
|
(99
|
)
|
||||
Loss on extinguishment of debt
|
—
|
221
|
||||||
Other non-operating (income) loss
|
(1,006
|
)
|
111
|
|||||
Interest expense:
|
||||||||
Debt
|
24,448
|
24,340
|
||||||
Capitalized lease obligation
|
6,523
|
7,710
|
||||||
Amortization of deferred financing costs and debt discount
|
4,569
|
4,473
|
||||||
Change in fair value of derivatives and amortization
|
(135
|
)
|
233
|
|||||
Interest income
|
(303
|
)
|
(852
|
)
|
||||
Income from operations
|
38,687
|
26,523
|
||||||
Gain on facility lease termination
|
—
|
(2,780
|
)
|
|||||
Depreciation and amortization
|
64,659
|
63,344
|
||||||
Asset impairment
|
—
|
1,083
|
||||||
Loss on acquisition
|
—
|
636
|
||||||
Facility lease expense
|
69,019
|
71,445
|
||||||
General and administrative (including non-cash stock-based compensation expense)
|
46,611
|
44,973
|
||||||
Amortization of entrance fees
|
(7,133
|
)
|
(6,066
|
)
|
||||
Management fees
|
(7,609
|
)
|
(7,444
|
)
|
||||
Facility Operating Income
|
$
|
204,234
|
$
|
191,714
|
||||
(a)
|
Not applicable.
|
(b)
|
Not applicable.
|
(c)
|
The following table contains information regarding purchases of our common stock made during the quarter ended March 31, 2013 by or on behalf of the Company or any ''affiliated purchaser,'' as defined by Rule 10b-18(a)(3) of the Exchange Act:
|
Period
|
Total
Number of
Shares
Purchased (1)
|
Average
Price Paid
per Share
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs
|
Maximum Number of
Shares that May Yet Be
Purchased Under the
Plans or Programs (2)
|
||||||||||||
01/01/13 - 01/31/13
|
-
|
$
|
-
|
-
|
-
|
|||||||||||
02/01/13 - 02/28/13
|
630
|
27.84
|
-
|
-
|
||||||||||||
03/01/13 - 03/31/13
|
-
|
-
|
-
|
-
|
||||||||||||
Total
|
630
|
$
|
27.84
|
-
|
-
|
|||||||||||
|
(1)
|
Consists entirely of shares withheld to satisfy tax liabilities due upon the vesting of restricted stock.
|
(2)
|
See Note 17 to the consolidated financial statements contained in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC on February 19, 2013, which is incorporated herein by reference, for information regarding our share repurchase program. No shares were purchased pursuant to this authorization during the three months ended March 31, 2013. As of March 31, 2013, approximately $82.4 million remains available under this share repurchase authorization.
|
|
|
|
|
|
|
|
|
BROOKDALE SENIOR LIVING INC.
|
|
|
|||
|
(Registrant)
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Mark W. Ohlendorf
|
|
|
||
|
Name:
|
|
Mark W. Ohlendorf
|
|
|
|
|
Title:
|
|
Co-President and Chief Financial Officer
|
|
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
Date:
|
|
May 9, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K filed on February 26, 2010).
|
3.2
|
|
Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on July 3, 2012).
|
4.1
|
|
Form of Certificate for common stock (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-1 (Amendment No. 3) (No. 333-127372) filed on November 7, 2005).
|
4.2
|
|
Stockholders Agreement, dated as of November 28, 2005, by and among Brookdale Senior Living Inc., FIT-ALT Investor LLC, Fortress Brookdale Acquisition LLC, Fortress Investment Trust II and Health Partners (incorporated by reference to Exhibit 4.2 to the Company's Annual Report on Form 10-K filed on March 31, 2006).
|
4.3
|
|
Amendment No. 1 to Stockholders Agreement, dated as of July 25, 2006, by and among Brookdale Senior Living Inc., FIT-ALT Investor LLC, Fortress Registered Investment Trust, Fortress Brookdale Investment Fund LLC, FRIT Holdings LLC, and FIT Holdings LLC (incorporated by reference to Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2006).
|
4.4
|
|
Amendment Number Two to Stockholders Agreement, dated as of November 4, 2009 (incorporated by reference to Exhibit 4.4 to the Company's Quarterly Report on Form 10-Q filed on November 4, 2009).
|
4.5
|
|
Indenture, dated as of June 14, 2011, between the Company and American Stock Transfer & Trust Company, LLC, as Trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on June 14, 2011).
|
4.6
|
|
Supplemental Indenture, dated as of June 14, 2011, between the Company and American Stock Transfer & Trust Company, LLC, as Trustee (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on June 14, 2011).
|
4.7
|
|
Form of 2.75% Convertible Senior Note due 2018 (included as part of Exhibit 4.6).
|
10.1
|
|
Employment Agreement, dated as of February 11, 2013, by and between Brookdale Senior Living Inc. and T. Andrew Smith (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 12, 2013).
|
10.2
|
|
Restricted Share Agreement (Time-Vesting), dated as of February 11, 2013, by and between Brookdale Senior Living Inc. and T. Andrew Smith (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on February 12, 2013).
|
10.3
|
|
Restricted Share Agreement (Performance-Vesting), dated as of February 11, 2013, by and between Brookdale Senior Living Inc. and T. Andrew Smith (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed on February 12, 2013).
|
10.4
|
|
Form of Restricted Share Agreement under the Brookdale Senior Living Inc. Omnibus Stock Incentive Plan (2013 Time-Vesting Form for Executive Committee Members) (incorporated by reference to Exhibit 10.39 to the Company's Annual Report on Form 10-K filed on February 19, 2013).
|
10.5
|
|
Form of Restricted Share Agreement under the Brookdale Senior Living Inc. Omnibus Stock Incentive Plan (2013 Time-Vesting Form for Executive Vice Presidents) (incorporated by reference to Exhibit 10.40 to the Company's Annual Report on Form 10-K filed on February 19, 2013).
|
10.6
|
|
Form of Restricted Share Agreement under the Brookdale Senior Living Inc. Omnibus Stock Incentive Plan (2013 Performance-Vesting Form for Executive Committee Members) (incorporated by reference to Exhibit 10.41 to the Company's Annual Report on Form 10-K filed on February 19, 2013).
|
10.7
|
|
Form of Restricted Share Agreement under the Brookdale Senior Living Inc. Omnibus Stock Incentive Plan (2013 Performance-Vesting Form for Executive Vice Presidents) (incorporated by reference to Exhibit 10.42 to the Company's Annual Report on Form 10-K filed on February 19, 2013).
|
10.8
|
Second Amended and Restated Credit Agreement, dated as of March 28, 2013, among certain
|
|
subsidiaries of Brookdale Senior Living Inc., General Electric Capital Corporation, as administrative agent and lender, and the other lenders from time to time parties thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 3, 2013).
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted 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.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Brookdale Senior Living Inc.;
|
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 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 control 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 fiscal 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 functions):
|
(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.
|
Date: May 9, 2013
|
|
/s/ T. Andrew Smith
|
|
|
T. Andrew Smith
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Brookdale Senior Living Inc.;
|
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 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 control 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 fiscal 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 functions):
|
(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.
|
Date: May 9, 2013
|
|
/s/ Mark W. Ohlendorf
|
|
|
Mark W. Ohlendorf
|
|
|
Chief Financial Officer
|
/s/ T. Andrew Smith
|
|
|
Name:
|
T. Andrew Smith
|
|
Title:
|
Chief Executive Officer
|
|
Date:
|
May 9, 2013
|
|
/s/ Mark W. Ohlendorf
|
|
|
Name:
|
Mark W. Ohlendorf
|
|
Title:
|
Chief Financial Officer
|
|
Date:
|
May 9, 2013
|
|
Supplemental Disclosure of Cash Flow Information (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Supplemental Cash Flow Information [Abstract] | ||
Interest paid | $ 29,027 | $ 30,049 |
Income taxes paid | 341 | 207 |
Write-off of deferred costs | 0 | 744 |
Acquisition of assets, net of related payables and cash received [Line Items] | ||
Cash and escrow deposits - restricted | 0 | 3,313 |
Prepaid expenses and other current assets | 0 | (2,817) |
Property, plant and equipment and leasehold intangibles, net | 0 | 121,250 |
Other intangible assets, net | 0 | 3,672 |
Other assets, net | 0 | (7,327) |
Accrued expenses | 0 | (392) |
Other liabilities | 0 | 4,429 |
Long-term debt, less current portion | 0 | (15,000) |
Accumulated earnings | 0 | (2,144) |
Net | $ 0 | $ 104,984 |
Stock-Based Compensation (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
|||||||||||||||||||||||||||
Stock-Based Compensation [Abstract] | |||||||||||||||||||||||||||
Current year grants of restricted shares | Current year grants of restricted shares under the Company's Omnibus Stock Incentive Plan were as follows (amounts in thousands except for value per share):
|
Segment Information (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
|||||||||
Segment Information [Abstract] | ||||||||||||
Number of reportable segments | 6 | |||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | $ 712,266 | $ 682,708 | $ 2,768,738 | $ 2,456,483 | ||||||||
Segment operating income | 218,976 | 205,224 | ||||||||||
General and administrative (including non-cash stock-based compensation expense) | 46,611 | 44,973 | ||||||||||
Facility lease expense | 69,019 | 71,445 | ||||||||||
Depreciation and amortization | 64,659 | 63,344 | ||||||||||
Asset impairment | 0 | 1,083 | ||||||||||
Loss on acquisition | 0 | 636 | ||||||||||
Gain on facility lease termination | 0 | (2,780) | ||||||||||
Income from operations | 38,687 | 26,523 | ||||||||||
Total assets | 4,620,908 | 4,665,978 | ||||||||||
Retirement Centers [Member]
|
||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 128,922 | [1] | 124,512 | [1] | ||||||||
Segment operating income | 53,334 | [2] | 50,991 | [2] | ||||||||
Total assets | 1,255,802 | 1,256,497 | ||||||||||
Assisted Living [Member]
|
||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 260,615 | [1] | 251,352 | [1] | ||||||||
Segment operating income | 96,285 | [2] | 90,563 | [2] | ||||||||
Total assets | 1,427,052 | 1,438,934 | ||||||||||
CCRCs - Rental [Member]
|
||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 100,327 | [1] | 95,112 | [1] | ||||||||
Segment operating income | 29,077 | [2] | 28,019 | [2] | ||||||||
Total assets | 531,131 | 534,220 | ||||||||||
CCRCs - Entry Fee [Member]
|
||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 74,308 | [1] | 71,719 | [1] | ||||||||
Segment operating income | 19,571 | [2] | 16,805 | [2] | ||||||||
Total assets | 943,038 | 951,584 | ||||||||||
ISC [Member]
|
||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 60,198 | [1] | 53,854 | [1] | ||||||||
Segment operating income | 13,100 | [2] | 11,402 | [2] | ||||||||
Total assets | 91,974 | 90,357 | ||||||||||
Management Services [Member]
|
||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 87,896 | [1],[3] | 86,159 | [1],[3] | ||||||||
Segment operating income | 7,609 | [2] | 7,444 | [2] | ||||||||
Total assets | $ 371,911 | $ 394,386 | ||||||||||
|
Description of Business
|
3 Months Ended |
---|---|
Mar. 31, 2013
|
|
Description of Business [Abstract] | |
Description of Business | 1. Description of Business Brookdale Senior Living Inc. ("Brookdale" or the "Company") is a leading owner and operator of senior living communities throughout the United States. The Company provides an exceptional living experience through properties that are designed, purpose-built and operated to provide the highest quality service, care and living accommodations for residents. The Company owns, leases and operates retirement centers, assisted living and dementia-care communities and continuing care retirement centers ("CCRCs"). Through its Innovative Senior Care ("ISC") program, the Company also offers a range of outpatient therapy, home health and hospice services, primarily to residents of its communities. |