☒
|
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)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.01 Par Value Per Share
|
BKD
|
New York Stock Exchange
|
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
PAGE
|
|
PART I.
|
|
|
|
|
|
Item 1.
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
PART II.
|
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
Assets
|
(Unaudited)
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
452,441
|
|
|
$
|
240,227
|
|
Marketable securities
|
109,873
|
|
|
68,567
|
|
||
Restricted cash
|
28,397
|
|
|
26,856
|
|
||
Accounts receivable, net
|
120,503
|
|
|
133,613
|
|
||
Assets held for sale
|
37,397
|
|
|
42,671
|
|
||
Prepaid expenses and other current assets, net
|
89,416
|
|
|
84,241
|
|
||
Total current assets
|
838,027
|
|
|
596,175
|
|
||
Property, plant and equipment and leasehold intangibles, net
|
5,256,368
|
|
|
5,109,834
|
|
||
Operating lease right-of-use assets
|
1,030,505
|
|
|
1,159,738
|
|
||
Restricted cash
|
41,292
|
|
|
34,614
|
|
||
Investment in unconsolidated ventures
|
5,601
|
|
|
21,210
|
|
||
Goodwill
|
154,131
|
|
|
154,131
|
|
||
Other assets, net
|
98,619
|
|
|
118,731
|
|
||
Total assets
|
$
|
7,424,543
|
|
|
$
|
7,194,433
|
|
Liabilities and Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current portion of long-term debt
|
$
|
222,572
|
|
|
$
|
339,413
|
|
Current portion of financing lease obligations
|
44,667
|
|
|
63,146
|
|
||
Current portion of operating lease obligations
|
183,300
|
|
|
193,587
|
|
||
Trade accounts payable
|
61,780
|
|
|
104,721
|
|
||
Accrued expenses
|
259,499
|
|
|
266,703
|
|
||
Refundable fees and deferred revenue
|
158,608
|
|
|
79,402
|
|
||
Total current liabilities
|
930,426
|
|
|
1,046,972
|
|
||
Long-term debt, less current portion
|
3,469,793
|
|
|
3,215,710
|
|
||
Financing lease obligations, less current portion
|
558,307
|
|
|
771,434
|
|
||
Operating lease obligations, less current portion
|
1,226,242
|
|
|
1,277,178
|
|
||
Line of credit
|
166,381
|
|
|
—
|
|
||
Deferred tax liability
|
144
|
|
|
15,397
|
|
||
Other liabilities
|
133,361
|
|
|
169,017
|
|
||
Total liabilities
|
6,484,654
|
|
|
6,495,708
|
|
||
Preferred stock, $0.01 par value, 50,000,000 shares authorized at June 30, 2020 and December 31, 2019; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 400,000,000 shares authorized at June 30, 2020 and December 31, 2019; 198,447,200 and 199,593,343 shares issued and 187,919,675 and 192,128,586 shares outstanding (including 4,733,385 and 7,252,459 unvested restricted shares), respectively
|
1,984
|
|
|
1,996
|
|
||
Additional paid-in-capital
|
4,180,436
|
|
|
4,172,099
|
|
||
Treasury stock, at cost; 10,527,525 and 7,464,757 shares at June 30, 2020 and December 31, 2019, respectively
|
(102,774
|
)
|
|
(84,651
|
)
|
||
Accumulated deficit
|
(3,142,089
|
)
|
|
(3,393,088
|
)
|
||
Total Brookdale Senior Living Inc. stockholders' equity
|
937,557
|
|
|
696,356
|
|
||
Noncontrolling interest
|
2,332
|
|
|
2,369
|
|
||
Total equity
|
939,889
|
|
|
698,725
|
|
||
Total liabilities and equity
|
$
|
7,424,543
|
|
|
$
|
7,194,433
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Revenue and other operating income
|
|
|
|
|
|
|
|
||||||||
Resident fees
|
$
|
731,629
|
|
|
$
|
801,863
|
|
|
$
|
1,514,336
|
|
|
$
|
1,611,342
|
|
Management fees
|
6,076
|
|
|
15,449
|
|
|
114,791
|
|
|
31,192
|
|
||||
Reimbursed costs incurred on behalf of managed communities
|
101,511
|
|
|
202,145
|
|
|
224,228
|
|
|
418,967
|
|
||||
Other operating income
|
26,693
|
|
|
—
|
|
|
26,693
|
|
|
—
|
|
||||
Total revenue and other operating income
|
865,909
|
|
|
1,019,457
|
|
|
1,880,048
|
|
|
2,061,501
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Expense
|
|
|
|
|
|
|
|
||||||||
Facility operating expense (excluding facility depreciation and amortization of $86,971, $86,070, $171,272, and $174,897, respectively)
|
606,034
|
|
|
590,246
|
|
|
1,194,516
|
|
|
1,176,340
|
|
||||
General and administrative expense (including non-cash stock-based compensation expense of $6,119, $6,030, $12,076, and $12,386, respectively)
|
52,518
|
|
|
57,576
|
|
|
107,113
|
|
|
113,887
|
|
||||
Facility operating lease expense
|
62,379
|
|
|
67,689
|
|
|
126,860
|
|
|
136,357
|
|
||||
Depreciation and amortization
|
93,154
|
|
|
94,024
|
|
|
183,892
|
|
|
190,912
|
|
||||
Asset impairment
|
10,290
|
|
|
3,769
|
|
|
88,516
|
|
|
4,160
|
|
||||
Loss (gain) on facility lease termination and modification, net
|
—
|
|
|
1,797
|
|
|
—
|
|
|
2,006
|
|
||||
Costs incurred on behalf of managed communities
|
101,511
|
|
|
202,145
|
|
|
224,228
|
|
|
418,967
|
|
||||
Total operating expense
|
925,886
|
|
|
1,017,246
|
|
|
1,925,125
|
|
|
2,042,629
|
|
||||
Income (loss) from operations
|
(59,977
|
)
|
|
2,211
|
|
|
(45,077
|
)
|
|
18,872
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest income
|
2,243
|
|
|
2,813
|
|
|
3,698
|
|
|
5,897
|
|
||||
Interest expense:
|
|
|
|
|
|
|
|
||||||||
Debt
|
(38,974
|
)
|
|
(45,193
|
)
|
|
(80,737
|
)
|
|
(90,836
|
)
|
||||
Financing lease obligations
|
(11,892
|
)
|
|
(16,649
|
)
|
|
(25,174
|
)
|
|
(33,392
|
)
|
||||
Amortization of deferred financing costs and debt discount
|
(1,556
|
)
|
|
(986
|
)
|
|
(2,871
|
)
|
|
(1,965
|
)
|
||||
Gain (loss) on debt modification and extinguishment, net
|
(157
|
)
|
|
(2,672
|
)
|
|
19,024
|
|
|
(2,739
|
)
|
||||
Equity in earnings (loss) of unconsolidated ventures
|
438
|
|
|
(991
|
)
|
|
(570
|
)
|
|
(1,517
|
)
|
||||
Gain (loss) on sale of assets, net
|
(1,029
|
)
|
|
2,846
|
|
|
371,810
|
|
|
2,144
|
|
||||
Other non-operating income (loss)
|
988
|
|
|
3,199
|
|
|
3,650
|
|
|
6,187
|
|
||||
Income (loss) before income taxes
|
(109,916
|
)
|
|
(55,422
|
)
|
|
243,753
|
|
|
(97,349
|
)
|
||||
Benefit (provision) for income taxes
|
(8,504
|
)
|
|
(633
|
)
|
|
7,324
|
|
|
(1,312
|
)
|
||||
Net income (loss)
|
(118,420
|
)
|
|
(56,055
|
)
|
|
251,077
|
|
|
(98,661
|
)
|
||||
Net (income) loss attributable to noncontrolling interest
|
19
|
|
|
585
|
|
|
37
|
|
|
596
|
|
||||
Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders
|
$
|
(118,401
|
)
|
|
$
|
(55,470
|
)
|
|
$
|
251,114
|
|
|
$
|
(98,065
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to Brookdale Senior Living Inc. common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.65
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
1.37
|
|
|
$
|
(0.53
|
)
|
Diluted
|
$
|
(0.65
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
1.37
|
|
|
$
|
(0.53
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
183,178
|
|
|
186,140
|
|
|
183,682
|
|
|
186,442
|
|
||||
Diluted
|
183,178
|
|
|
186,140
|
|
|
183,862
|
|
|
186,442
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Total equity, balance at beginning of period
|
$
|
1,052,230
|
|
|
$
|
917,597
|
|
|
$
|
698,725
|
|
|
$
|
1,018,413
|
|
|
|
|
|
|
|
|
|
||||||||
Common stock:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
1,985
|
|
|
$
|
2,000
|
|
|
$
|
1,996
|
|
|
$
|
1,968
|
|
Issuance of common stock under Associate Stock Purchase Plan
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
||||
Restricted stock, net
|
(1
|
)
|
|
(3
|
)
|
|
(7
|
)
|
|
32
|
|
||||
Shares withheld for employee taxes
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(4
|
)
|
||||
Balance at end of period
|
$
|
1,984
|
|
|
$
|
1,998
|
|
|
$
|
1,984
|
|
|
$
|
1,998
|
|
Additional paid-in-capital:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
4,174,356
|
|
|
$
|
4,154,790
|
|
|
$
|
4,172,099
|
|
|
$
|
4,151,147
|
|
Compensation expense related to restricted stock grants
|
6,119
|
|
|
6,030
|
|
|
12,076
|
|
|
12,386
|
|
||||
Issuance of common stock under Associate Stock Purchase Plan
|
—
|
|
|
299
|
|
|
168
|
|
|
597
|
|
||||
Restricted stock, net
|
1
|
|
|
3
|
|
|
7
|
|
|
(32
|
)
|
||||
Shares withheld for employee taxes
|
(59
|
)
|
|
(108
|
)
|
|
(3,951
|
)
|
|
(3,101
|
)
|
||||
Other, net
|
19
|
|
|
31
|
|
|
37
|
|
|
48
|
|
||||
Balance at end of period
|
$
|
4,180,436
|
|
|
$
|
4,161,045
|
|
|
$
|
4,180,436
|
|
|
$
|
4,161,045
|
|
Treasury stock:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
(102,774
|
)
|
|
$
|
(70,940
|
)
|
|
$
|
(84,651
|
)
|
|
$
|
(64,940
|
)
|
Purchase of treasury stock
|
—
|
|
|
(8,157
|
)
|
|
(18,123
|
)
|
|
(14,157
|
)
|
||||
Balance at end of period
|
$
|
(102,774
|
)
|
|
$
|
(79,097
|
)
|
|
$
|
(102,774
|
)
|
|
$
|
(79,097
|
)
|
Accumulated deficit:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
(3,023,688
|
)
|
|
$
|
(3,167,752
|
)
|
|
$
|
(3,393,088
|
)
|
|
$
|
(3,069,272
|
)
|
Cumulative effect of change in accounting principle (Note 2)
|
—
|
|
|
—
|
|
|
(115
|
)
|
|
(55,885
|
)
|
||||
Net income (loss)
|
(118,401
|
)
|
|
(55,470
|
)
|
|
251,114
|
|
|
(98,065
|
)
|
||||
Balance at end of period
|
$
|
(3,142,089
|
)
|
|
$
|
(3,223,222
|
)
|
|
$
|
(3,142,089
|
)
|
|
$
|
(3,223,222
|
)
|
Noncontrolling interest:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
2,351
|
|
|
$
|
(501
|
)
|
|
$
|
2,369
|
|
|
$
|
(490
|
)
|
Net income (loss) attributable to noncontrolling interest
|
(19
|
)
|
|
(585
|
)
|
|
(37
|
)
|
|
(596
|
)
|
||||
Noncontrolling interest contribution
|
—
|
|
|
6,566
|
|
|
—
|
|
|
6,566
|
|
||||
Balance at end of period
|
$
|
2,332
|
|
|
$
|
5,480
|
|
|
$
|
2,332
|
|
|
$
|
5,480
|
|
Total equity, balance at end of period
|
$
|
939,889
|
|
|
$
|
866,204
|
|
|
$
|
939,889
|
|
|
$
|
866,204
|
|
|
|
|
|
|
|
|
|
||||||||
Common stock share activity
|
|
|
|
|
|
|
|
||||||||
Outstanding shares of common stock:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
188,012
|
|
|
194,573
|
|
|
192,129
|
|
|
192,356
|
|
||||
Issuance of common stock under Associate Stock Purchase Plan
|
—
|
|
|
46
|
|
|
61
|
|
|
96
|
|
||||
Restricted stock grants, net
|
(75
|
)
|
|
(214
|
)
|
|
(579
|
)
|
|
3,320
|
|
||||
Shares withheld for employee taxes
|
(17
|
)
|
|
(16
|
)
|
|
(628
|
)
|
|
(450
|
)
|
||||
Purchase of treasury stock
|
—
|
|
|
(1,278
|
)
|
|
(3,063
|
)
|
|
(2,211
|
)
|
||||
Balance at end of period
|
187,920
|
|
|
193,111
|
|
|
187,920
|
|
|
193,111
|
|
|
Six Months Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Cash Flows from Operating Activities
|
|
|
|
||||
Net income (loss)
|
$
|
251,077
|
|
|
$
|
(98,661
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Loss (gain) on debt modification and extinguishment, net
|
(19,024
|
)
|
|
2,739
|
|
||
Depreciation and amortization, net
|
186,763
|
|
|
192,877
|
|
||
Asset impairment
|
88,516
|
|
|
4,160
|
|
||
Equity in (earnings) loss of unconsolidated ventures
|
570
|
|
|
1,517
|
|
||
Distributions from unconsolidated ventures from cumulative share of net earnings
|
—
|
|
|
1,530
|
|
||
Amortization of entrance fees
|
(925
|
)
|
|
(772
|
)
|
||
Proceeds from deferred entrance fee revenue
|
85
|
|
|
1,739
|
|
||
Deferred income tax (benefit) provision
|
(15,253
|
)
|
|
470
|
|
||
Operating lease expense adjustment
|
(14,954
|
)
|
|
(8,812
|
)
|
||
Loss (gain) on sale of assets, net
|
(371,810
|
)
|
|
(2,144
|
)
|
||
Loss (gain) on facility lease termination and modification, net
|
—
|
|
|
2,006
|
|
||
Non-cash stock-based compensation expense
|
12,076
|
|
|
12,386
|
|
||
Non-cash management contract termination gain
|
—
|
|
|
(640
|
)
|
||
Other
|
(1,800
|
)
|
|
(4,401
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
12,995
|
|
|
(3,997
|
)
|
||
Prepaid expenses and other assets, net
|
20,162
|
|
|
30,823
|
|
||
Prepaid insurance premiums financed with notes payable
|
(11,664
|
)
|
|
(12,090
|
)
|
||
Trade accounts payable and accrued expenses
|
(18,692
|
)
|
|
(43,385
|
)
|
||
Refundable fees and deferred revenue
|
80,688
|
|
|
(17,226
|
)
|
||
Operating lease assets and liabilities for lessor capital expenditure reimbursements
|
10,509
|
|
|
1,000
|
|
||
Net cash provided by (used in) operating activities
|
209,319
|
|
|
59,119
|
|
||
Cash Flows from Investing Activities
|
|
|
|
||||
Change in lease security deposits and lease acquisition deposits, net
|
3,304
|
|
|
(83
|
)
|
||
Purchase of marketable securities
|
(149,236
|
)
|
|
(98,059
|
)
|
||
Sale and maturities of marketable securities
|
108,750
|
|
|
55,000
|
|
||
Capital expenditures, net of related payables
|
(112,863
|
)
|
|
(122,297
|
)
|
||
Acquisition of assets, net of related payables and cash received
|
(446,688
|
)
|
|
—
|
|
||
Investment in unconsolidated ventures
|
(356
|
)
|
|
(4,204
|
)
|
||
Distributions received from unconsolidated ventures
|
—
|
|
|
5,305
|
|
||
Proceeds from sale of assets, net
|
300,539
|
|
|
52,430
|
|
||
Proceeds from notes receivable
|
1,140
|
|
|
31,609
|
|
||
Net cash provided by (used in) investing activities
|
(295,410
|
)
|
|
(80,299
|
)
|
||
Cash Flows from Financing Activities
|
|
|
|
||||
Proceeds from debt
|
473,460
|
|
|
158,231
|
|
||
Repayment of debt and financing lease obligations
|
(303,920
|
)
|
|
(238,036
|
)
|
||
Proceeds from line of credit
|
166,381
|
|
|
—
|
|
||
Purchase of treasury stock, net of related payables
|
(18,123
|
)
|
|
(18,401
|
)
|
||
Payment of financing costs, net of related payables
|
(7,469
|
)
|
|
(3,342
|
)
|
||
Payments of employee taxes for withheld shares
|
(3,951
|
)
|
|
(3,105
|
)
|
||
Other
|
146
|
|
|
574
|
|
||
Net cash provided by (used in) financing activities
|
306,524
|
|
|
(104,079
|
)
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
220,433
|
|
|
(125,259
|
)
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
301,697
|
|
|
450,218
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
522,130
|
|
|
$
|
324,959
|
|
•
|
During the three months ended June 30, 2020, the Company accepted $33.5 million of cash for grants from the Emergency Fund, which was expanded by the CARES Act to provide grants or other funding mechanisms to eligible healthcare providers for healthcare related expenses or lost revenues attributable to COVID-19. Approximately $28.8 million of the grants were made available pursuant to the Emergency Fund's general distribution, with grant amounts based primarily on the Company's relative share of aggregate 2019 Medicare fee-for-service reimbursements and generally related to home health, hospice, outpatient therapy, and skilled nursing care provided through the Company's Health Care Services and CCRCs segments. Approximately $4.7 million of the grants were made available pursuant to the Emergency Fund's targeted allocation for certified skilled nursing facilities, with amounts determined using a per-facility and per-bed model. During July 2020, the Company applied for additional grants pursuant to the Emergency Fund's Medicaid and CHIP allocation. The amount of such grants are expected to be based on 2% of a portion of the Company's 2018 gross revenues from patient care.
|
•
|
During three months ended June 30, 2020, the Company received $85.0 million under the Accelerated and Advance Payment Program administered by CMS, which was temporarily expanded by the CARES Act. Under the program, the Company requested acceleration/advancement of 100% of its Medicare payment amount for a three-month period. Recoupment of accelerated/advanced payments are required to begin 120 days after their issuance through offsets of new Medicare claims, and all accelerated/advanced payments are due 210 days following their issuance. Such amount has been presented within net cash provided by operating activities within the Company’s condensed consolidated statement of cash flows.
|
•
|
Under the CARES Act, the Company has elected to defer payment of the employer portion of social security payroll taxes incurred from March 27, 2020 to December 31, 2020. One-half of such deferral amount will become due on each of December 31, 2021 and December 31, 2022. As of June 30, 2020, the Company has deferred payment of $26.5 million of payroll taxes and presented such amount within other liabilities within the Company's condensed consolidated balance sheets.
|
•
|
The CARES Act temporarily suspended the 2% Medicare sequestration for the period May 1, 2020 to December 31, 2020, which primarily benefits the Company’s Health Care Services segment.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Income attributable to common shareholders:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(118,401
|
)
|
|
$
|
(55,470
|
)
|
|
$
|
251,114
|
|
|
$
|
(98,065
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding - basic
|
183,178
|
|
|
186,140
|
|
|
183,682
|
|
|
186,442
|
|
||||
Effect of dilutive securities - Unvested restricted stock and restricted stock units
|
—
|
|
|
—
|
|
|
180
|
|
|
—
|
|
||||
Weighted average shares outstanding - diluted
|
183,178
|
|
|
186,140
|
|
|
183,862
|
|
|
186,442
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to common shareholders
|
$
|
(0.65
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
1.37
|
|
|
$
|
(0.53
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to common shareholders
|
$
|
(0.65
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
1.37
|
|
|
$
|
(0.53
|
)
|
•
|
CCRC Venture Transaction. Pursuant to the Purchase Agreement, on January 31, 2020, Healthpeak acquired the Company's 51% ownership interest in the CCRC Venture, which held 14 entry fee CCRCs, for a purchase price of $289.2 million, net of a $5.9 million post-closing net working capital adjustment paid to Healthpeak during the three months ended June 30, 2020 (representing an aggregate valuation of $1.06 billion less portfolio debt, subject to a net working capital adjustment). The $289.2 million of cash received from Healthpeak is presented within net cash used in investing activities for the six months ended June 30, 2020. The Company recognized a $369.8 million gain on sale of assets for the six months ended June 30, 2020, and the Company derecognized the net equity method liability for the sale of the ownership interest in the CCRC Venture. At the closing, the parties terminated the Company's existing management agreements with the 14 entry fee CCRCs, Healthpeak paid the Company a $100.0 million management agreement termination fee, and the Company transitioned operations of the entry fee CCRCs to a new operator. The Company recognized $100.0 million of management fee revenue for the three months ended March 31, 2020 for the management termination fee. Prior to the January 31, 2020 closing, the parties moved the remaining two entry fee CCRCs into a new unconsolidated venture on substantially the same terms as the CCRC Venture to accommodate the sale of such two communities expected to occur in 2021. Subsequent to these transactions, the Company will have exited substantially all of its entry fee CCRC operations.
|
•
|
Master Lease Transactions. Pursuant to the MTCA, on January 31, 2020, the parties amended and restated the existing master lease pursuant to which the Company continues to lease 25 communities from Healthpeak, and the Company acquired 18 formerly leased communities from Healthpeak, at which time the 18 communities were removed from the master lease. At the closing, the Company paid $405.5 million to acquire such communities and to reduce its annual rent under the amended and restated master lease. The $405.5 million of cash paid to Healthpeak and $1.7 million of direct acquisition costs are presented within net cash used in investing activities for the six months ended June 30, 2020. The Company funded the community acquisitions with $192.6 million of non-recourse mortgage financing and the proceeds from the multi-part transaction. In addition, Healthpeak has agreed to terminate the lease for one leased community. With respect to the continuing 24 communities, the Company's amended and restated master lease: (i) has an initial term to expire on December 31, 2027, subject to two extension options at the Company's election for ten years each, which must be exercised with respect to the entire pool of leased communities; (ii) the initial annual base rent for the 24 communities is $41.7 million and is subject to an escalator of 2.4% per annum on April 1st of each year; and (iii) Healthpeak has agreed to make available up to $35.0 million for capital expenditures for a five-year period related to the 24 communities at an initial lease rate of 7.0%. As a result of the community acquisition transaction, the Company recognized a $19.7 million gain on debt extinguishment and derecognized the $105.1 million carrying amount of financing lease obligations for eight communities which were previously subject to sale-leaseback transactions in which the Company was deemed to have continuing involvement.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(in millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Property, plant and equipment and leasehold intangibles, net
|
$
|
3.7
|
|
|
$
|
1.2
|
|
|
$
|
14.7
|
|
|
$
|
1.2
|
|
Operating lease right-of-use assets
|
6.6
|
|
|
—
|
|
|
72.3
|
|
|
—
|
|
||||
Investment in unconsolidated ventures
|
—
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
||||
Other intangible assets, net
|
—
|
|
|
2.6
|
|
|
—
|
|
|
2.6
|
|
||||
Other assets, net
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
||||
Asset impairment
|
$
|
10.3
|
|
|
$
|
3.8
|
|
|
$
|
88.5
|
|
|
$
|
4.2
|
|
(in thousands, except for per share and unit amounts)
|
Restricted Stock Units and Stock Awards Granted
|
|
Weighted Average Grant Date Fair Value
|
|
Total Grant Date Fair Value
|
|||||
Three months ended March 31, 2020
|
4,438
|
|
|
$
|
7.06
|
|
|
$
|
31,341
|
|
Three months ended June 30, 2020
|
78
|
|
|
$
|
3.91
|
|
|
$
|
303
|
|
(in thousands)
|
June 30, 2020
|
|
December 31, 2019
|
||||
Land
|
$
|
507,336
|
|
|
$
|
450,894
|
|
Buildings and improvements
|
5,257,530
|
|
|
4,790,769
|
|
||
Furniture and equipment
|
935,755
|
|
|
859,849
|
|
||
Resident and leasehold operating intangibles
|
316,704
|
|
|
317,111
|
|
||
Construction in progress
|
60,653
|
|
|
80,729
|
|
||
Assets under financing leases and leasehold improvements
|
1,548,305
|
|
|
1,847,493
|
|
||
Property, plant and equipment and leasehold intangibles
|
8,626,283
|
|
|
8,346,845
|
|
||
Accumulated depreciation and amortization
|
(3,369,915
|
)
|
|
(3,237,011
|
)
|
||
Property, plant and equipment and leasehold intangibles, net
|
$
|
5,256,368
|
|
|
$
|
5,109,834
|
|
(in thousands)
|
June 30, 2020
|
|
December 31, 2019
|
||||
Mortgage notes payable due 2020 through 2047; weighted average interest rate of 4.08% for the six months ended June 30, 2020, less debt discount and deferred financing costs of $21.8 million and $17.0 million as of June 30, 2020 and December 31, 2019, respectively (weighted average interest rate of 4.72% in 2019)
|
$
|
3,681,795
|
|
|
$
|
3,496,735
|
|
Other notes payable, weighted average interest rate of 4.56% for the six months ended June 30, 2020 (weighted average interest rate of 5.77% in 2019) and maturity dates ranging from 2020 to 2021
|
10,570
|
|
|
58,388
|
|
||
Total long-term debt
|
3,692,365
|
|
|
3,555,123
|
|
||
Current portion
|
222,572
|
|
|
339,413
|
|
||
Total long-term debt, less current portion
|
$
|
3,469,793
|
|
|
$
|
3,215,710
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Operating Leases (in thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Facility operating expense
|
$
|
4,935
|
|
|
$
|
4,604
|
|
|
$
|
9,785
|
|
|
$
|
9,229
|
|
Facility lease expense
|
62,379
|
|
|
67,689
|
|
|
126,860
|
|
|
136,357
|
|
||||
Operating lease expense
|
67,314
|
|
|
72,293
|
|
|
136,645
|
|
|
145,586
|
|
||||
Operating lease expense adjustment (1)
|
8,221
|
|
|
4,429
|
|
|
14,954
|
|
|
8,812
|
|
||||
Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements
|
(6,421
|
)
|
|
(1,000
|
)
|
|
(10,509
|
)
|
|
(1,000
|
)
|
||||
Operating cash flows from operating leases
|
$
|
69,114
|
|
|
$
|
75,722
|
|
|
$
|
141,090
|
|
|
$
|
153,398
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents the difference between cash paid and expense recognized.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Financing Leases (in thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Depreciation and amortization
|
$
|
8,037
|
|
|
$
|
11,677
|
|
|
$
|
17,181
|
|
|
$
|
23,355
|
|
Interest expense: financing lease obligations
|
11,892
|
|
|
16,649
|
|
|
25,174
|
|
|
33,392
|
|
||||
Financing lease expense
|
$
|
19,929
|
|
|
$
|
28,326
|
|
|
$
|
42,355
|
|
|
$
|
56,747
|
|
|
|
|
|
|
|
|
|
||||||||
Operating cash flows from financing leases
|
$
|
11,892
|
|
|
$
|
16,649
|
|
|
$
|
25,174
|
|
|
$
|
33,392
|
|
Financing cash flows from financing leases
|
4,677
|
|
|
5,500
|
|
|
9,764
|
|
|
10,953
|
|
||||
Changes in financing lease assets and liabilities for lessor capital expenditure reimbursement
|
(1,675
|
)
|
|
—
|
|
|
(3,414
|
)
|
|
—
|
|
||||
Total cash flows from financing leases
|
$
|
14,894
|
|
|
$
|
22,149
|
|
|
$
|
31,524
|
|
|
$
|
44,345
|
|
Year Ending December 31,
|
Operating Leases
|
|
Financing Leases
|
||||
2020 (six months)
|
$
|
149,099
|
|
|
$
|
33,263
|
|
2021
|
287,241
|
|
|
66,168
|
|
||
2022
|
286,171
|
|
|
66,808
|
|
||
2023
|
288,435
|
|
|
67,571
|
|
||
2024
|
289,829
|
|
|
68,814
|
|
||
Thereafter
|
578,012
|
|
|
168,527
|
|
||
Total lease payments
|
1,878,787
|
|
|
471,151
|
|
||
Purchase option liability and non-cash gain on future sale of property
|
—
|
|
|
437,356
|
|
||
Imputed interest and variable lease payments
|
(469,245
|
)
|
|
(305,533
|
)
|
||
Total lease obligations
|
$
|
1,409,542
|
|
|
$
|
602,974
|
|
|
Six Months Ended
June 30, |
||||||
(in thousands)
|
2020
|
|
2019
|
||||
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
||||
Interest paid
|
$
|
107,854
|
|
|
$
|
124,647
|
|
Income taxes paid, net of refunds
|
1,388
|
|
|
1,916
|
|
||
|
|
|
|
||||
Capital expenditures, net of related payables:
|
|
|
|
||||
Capital expenditures - non-development, net
|
$
|
82,077
|
|
|
$
|
121,066
|
|
Capital expenditures - development, net
|
6,823
|
|
|
10,623
|
|
||
Capital expenditures - non-development - reimbursable
|
13,923
|
|
|
1,000
|
|
||
Trade accounts payable
|
10,040
|
|
|
(10,392
|
)
|
||
Net cash paid
|
$
|
112,863
|
|
|
$
|
122,297
|
|
Acquisition of communities from Healthpeak:
|
|
|
|
||||
Property, plant and equipment and leasehold intangibles, net
|
$
|
286,734
|
|
|
$
|
—
|
|
Operating lease right-of-use assets
|
(63,285
|
)
|
|
—
|
|
||
Financing lease obligations
|
129,196
|
|
|
—
|
|
||
Operating lease obligations
|
74,335
|
|
|
—
|
|
||
Loss (gain) on debt modification and extinguishment, net
|
(19,731
|
)
|
|
—
|
|
||
Net cash paid
|
$
|
407,249
|
|
|
$
|
—
|
|
Acquisition of other assets, net of related payables and cash received:
|
|
|
|
||||
Property, plant and equipment and leasehold intangibles, net
|
$
|
179
|
|
|
$
|
—
|
|
Financing lease obligations
|
39,260
|
|
|
—
|
|
||
Net cash paid
|
$
|
39,439
|
|
|
$
|
—
|
|
Proceeds from sale of CCRC Venture, net:
|
|
|
|
||||
Investments in unconsolidated ventures
|
$
|
(14,848
|
)
|
|
$
|
—
|
|
Current portion of long-term debt
|
34,706
|
|
|
—
|
|
||
Other liabilities
|
60,748
|
|
|
—
|
|
||
Loss (gain) on sale of assets, net
|
(369,831
|
)
|
|
—
|
|
||
Net cash received
|
$
|
(289,225
|
)
|
|
$
|
—
|
|
Proceeds from sale of other assets, net:
|
|
|
|
||||
Prepaid expenses and other assets, net
|
$
|
(1,261
|
)
|
|
$
|
(5,798
|
)
|
Assets held for sale
|
(5,274
|
)
|
|
(41,882
|
)
|
||
Property, plant and equipment and leasehold intangibles, net
|
(938
|
)
|
|
(688
|
)
|
||
Investments in unconsolidated ventures
|
—
|
|
|
(156
|
)
|
||
Other liabilities
|
(1,862
|
)
|
|
(1,762
|
)
|
||
Loss (gain) on sale of assets, net
|
(1,979
|
)
|
|
(2,144
|
)
|
||
Net cash received
|
$
|
(11,314
|
)
|
|
$
|
(52,430
|
)
|
|
|
|
|
||||
Supplemental Schedule of Non-cash Operating, Investing, and Financing Activities:
|
|
|
|
||||
Assets designated as held for sale:
|
|
|
|
||||
Prepaid expenses and other assets, net
|
$
|
—
|
|
|
$
|
(5
|
)
|
Assets held for sale
|
—
|
|
|
(4,928
|
)
|
||
Property, plant and equipment and leasehold intangibles, net
|
—
|
|
|
4,933
|
|
||
Net
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
(in thousands)
|
June 30, 2020
|
|
December 31, 2019
|
||||
Reconciliation of cash, cash equivalents, and restricted cash:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
452,441
|
|
|
$
|
240,227
|
|
Restricted cash
|
28,397
|
|
|
26,856
|
|
||
Long-term restricted cash
|
41,292
|
|
|
34,614
|
|
||
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows
|
$
|
522,130
|
|
|
$
|
301,697
|
|
|
Three Months Ended June 30, 2020
|
||||||||||||||||||
(in thousands)
|
Independent Living
|
|
Assisted Living and Memory Care
|
|
CCRCs
|
|
Health Care Services
|
|
Total
|
||||||||||
Private pay
|
$
|
129,678
|
|
|
$
|
414,276
|
|
|
$
|
59,980
|
|
|
$
|
258
|
|
|
$
|
604,192
|
|
Government reimbursement
|
600
|
|
|
17,880
|
|
|
13,744
|
|
|
70,566
|
|
|
102,790
|
|
|||||
Other third-party payor programs
|
—
|
|
|
—
|
|
|
5,301
|
|
|
19,346
|
|
|
24,647
|
|
|||||
Total resident fee revenue
|
$
|
130,278
|
|
|
$
|
432,156
|
|
|
$
|
79,025
|
|
|
$
|
90,170
|
|
|
$
|
731,629
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended June 30, 2019
|
||||||||||||||||||
(in thousands)
|
Independent Living
|
|
Assisted Living and Memory Care
|
|
CCRCs
|
|
Health Care Services
|
|
Total
|
||||||||||
Private pay
|
$
|
135,348
|
|
|
$
|
433,589
|
|
|
$
|
71,092
|
|
|
$
|
193
|
|
|
$
|
640,222
|
|
Government reimbursement
|
603
|
|
|
16,636
|
|
|
20,196
|
|
|
91,614
|
|
|
129,049
|
|
|||||
Other third-party payor programs
|
—
|
|
|
—
|
|
|
9,965
|
|
|
22,627
|
|
|
32,592
|
|
|||||
Total resident fee revenue
|
$
|
135,951
|
|
|
$
|
450,225
|
|
|
$
|
101,253
|
|
|
$
|
114,434
|
|
|
$
|
801,863
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Six Months Ended June 30, 2020
|
||||||||||||||||||
(in thousands)
|
Independent Living
|
|
Assisted Living and Memory Care
|
|
CCRCs
|
|
Health Care Services
|
|
Total
|
||||||||||
Private pay
|
$
|
264,968
|
|
|
$
|
854,889
|
|
|
$
|
124,683
|
|
|
$
|
428
|
|
|
$
|
1,244,968
|
|
Government reimbursement
|
1,172
|
|
|
34,746
|
|
|
33,149
|
|
|
144,255
|
|
|
213,322
|
|
|||||
Other third-party payor programs
|
—
|
|
|
—
|
|
|
15,740
|
|
|
40,306
|
|
|
56,046
|
|
|||||
Total resident fee revenue
|
$
|
266,140
|
|
|
$
|
889,635
|
|
|
$
|
173,572
|
|
|
$
|
184,989
|
|
|
$
|
1,514,336
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||
(in thousands)
|
Independent Living
|
|
Assisted Living and Memory Care
|
|
CCRCs
|
|
Health Care Services
|
|
Total
|
||||||||||
Private pay
|
$
|
270,393
|
|
|
$
|
875,500
|
|
|
$
|
142,625
|
|
|
$
|
383
|
|
|
$
|
1,288,901
|
|
Government reimbursement
|
1,252
|
|
|
33,251
|
|
|
41,683
|
|
|
180,271
|
|
|
256,457
|
|
|||||
Other third-party payor programs
|
—
|
|
|
—
|
|
|
20,672
|
|
|
45,312
|
|
|
65,984
|
|
|||||
Total resident fee revenue
|
$
|
271,645
|
|
|
$
|
908,751
|
|
|
$
|
204,980
|
|
|
$
|
225,966
|
|
|
$
|
1,611,342
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(in thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Revenue and other operating income:
|
|
|
|
|
|
|
|
||||||||
Independent Living (1)
|
$
|
130,278
|
|
|
$
|
135,951
|
|
|
$
|
266,140
|
|
|
$
|
271,645
|
|
Assisted Living and Memory Care (1)
|
432,308
|
|
|
450,225
|
|
|
889,787
|
|
|
908,751
|
|
||||
CCRCs (1)(2)
|
88,571
|
|
|
101,253
|
|
|
183,118
|
|
|
204,980
|
|
||||
Health Care Services(1)(2)
|
107,165
|
|
|
114,434
|
|
|
201,984
|
|
|
225,966
|
|
||||
Management Services(3)
|
107,587
|
|
|
217,594
|
|
|
339,019
|
|
|
450,159
|
|
||||
Total revenue and other operating income
|
$
|
865,909
|
|
|
$
|
1,019,457
|
|
|
$
|
1,880,048
|
|
|
$
|
2,061,501
|
|
Segment operating income: (4)
|
|
|
|
|
|
|
|
||||||||
Independent Living
|
$
|
41,038
|
|
|
$
|
51,459
|
|
|
$
|
92,452
|
|
|
$
|
104,335
|
|
Assisted Living and Memory Care
|
87,708
|
|
|
133,144
|
|
|
219,709
|
|
|
273,843
|
|
||||
CCRCs
|
13,850
|
|
|
17,847
|
|
|
33,781
|
|
|
39,484
|
|
||||
Health Care Services
|
9,692
|
|
|
9,167
|
|
|
571
|
|
|
17,340
|
|
||||
Management Services
|
6,076
|
|
|
15,449
|
|
|
114,791
|
|
|
31,192
|
|
||||
Total segment operating income
|
158,364
|
|
|
227,066
|
|
|
461,304
|
|
|
466,194
|
|
||||
General and administrative expense (including non-cash stock-based compensation expense)
|
52,518
|
|
|
57,576
|
|
|
107,113
|
|
|
113,887
|
|
||||
Facility operating lease expense
|
62,379
|
|
|
67,689
|
|
|
126,860
|
|
|
136,357
|
|
||||
Depreciation and amortization
|
93,154
|
|
|
94,024
|
|
|
183,892
|
|
|
190,912
|
|
||||
Asset impairment:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Independent Living
|
—
|
|
|
—
|
|
|
31,317
|
|
|
—
|
|
||||
Assisted Living and Memory Care
|
10,290
|
|
|
1,180
|
|
|
43,088
|
|
|
1,537
|
|
||||
CCRCs
|
—
|
|
|
—
|
|
|
12,173
|
|
|
—
|
|
||||
Health Care Services
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Management Services
|
—
|
|
|
2,589
|
|
|
1,938
|
|
|
2,623
|
|
||||
Total asset impairment:
|
10,290
|
|
|
3,769
|
|
|
88,516
|
|
|
4,160
|
|
||||
Loss (gain) on facility lease termination and modification, net
|
—
|
|
|
1,797
|
|
|
—
|
|
|
2,006
|
|
||||
Income (loss) from operations
|
$
|
(59,977
|
)
|
|
$
|
2,211
|
|
|
$
|
(45,077
|
)
|
|
$
|
18,872
|
|
|
As of
|
||||||
(in thousands)
|
June 30, 2020
|
|
December 31, 2019
|
||||
Total assets:
|
|
|
|
||||
Independent Living
|
$
|
1,510,783
|
|
|
$
|
1,441,652
|
|
Assisted Living and Memory Care
|
4,043,817
|
|
|
4,157,610
|
|
||
CCRCs
|
792,989
|
|
|
742,809
|
|
||
Health Care Services
|
248,702
|
|
|
256,715
|
|
||
Corporate and Management Services
|
828,252
|
|
|
595,647
|
|
||
Total assets
|
$
|
7,424,543
|
|
|
$
|
7,194,433
|
|
(1)
|
All revenue and other operating income is earned from external third parties in the United States.
|
(2)
|
The CCRCs and Health Care Services segments include $9.7 million and $17.0 million, respectively, of other operating income recognized for grants pursuant to the Emergency Fund described in Note 3 and other government sources. Allocations to the applicable segment reflect the segment's receipt and acceptance of the amounts and the Company's estimates of the segment's satisfaction of the conditions of grant during the period.
|
(3)
|
Management services segment revenue includes management fees and reimbursements of costs incurred on behalf of managed communities.
|
(4)
|
Segment operating income is defined as segment revenues and other operating income less segment facility operating expense (excluding depreciation and amortization) and costs incurred on behalf of managed communities.
|
•
|
On the Effective Date the parties entered into the Amended and Restated Master Lease and Security Agreement (the “Master Lease”) and Amended and Restated Guaranty (the “Guaranty”), which amended and restated the prior Master Lease and Security Agreement and prior Guaranty, each dated as of April 26, 2018 and as amended from time to time. Pursuant to the Master Lease, the Company continues to lease 120 communities for an aggregate initial annual minimum rent of approximately $100 million, which reflects a reduction of approximately $83 million of annual minimum rent in effect prior to the transaction. Effective on January 1 of each lease year, beginning January 1, 2022, the annual minimum rent will be subject to a 3% escalator. The initial term of the Master Lease ends December 31, 2025, with two 10-year extension options available to the Company. The annual minimum rent for the initial lease year of any such renewal term will be the greater of the fair market rental of the communities or the increased annual minimum rent for such lease year applying the foregoing 3% escalator. The Master Lease removed the prior provision that would have automatically extended the initial term in the event of the consummation of a change of control transaction by the Company. The Master Lease requires the Company to spend (or escrow with Ventas) a minimum of $1,500 per unit on a community-level basis and $3,600 per unit on an aggregate basis of all communities, in each case per 24-month period ending December 31 during the lease term, commencing with the 24-month period ending December 31, 2021. In addition, Ventas has agreed to fund costs associated with certain pre-approved capital expenditure projects in the aggregate amount of up to $37.8 million. Upon disbursement of such expenditures, the annual minimum rent under the Master Lease will increase by the amount of the disbursement multiplied by 50% of the sum of the then current 10-year treasury note rate and 4.5%. The transaction agreements with Ventas further provide that the Master Lease and certain other agreements between the parties will be cross-defaulted.
|
•
|
On the Effective Date, the Company entered into a Second Amended and Restated Omnibus Agreement with Ventas, which provides that if a default occurs and is continuing under certain other material leases or under certain material financings and if the same continues beyond the permitted cure period or the applicable landlord or lender exercises any material remedies, Ventas shall have the right to transition all or a portion of the communities from the Master Lease to a management arrangement with the Company pursuant to a market management agreement (which is terminable by either party). Notwithstanding the foregoing, Ventas may only transition community(ies) from the Master Lease to a management arrangement if such transition does not result in a portfolio coverage ratio with respect to the remaining communities in the Master Lease that is less than the portfolio coverage ratio prior to such transition.
|
•
|
On the Effective Date, the Company conveyed five owned communities to Ventas in full release and satisfaction of $78 million principal amount of indebtedness secured by the communities. Upon closing, the parties entered into new terminable, market rate management agreements pursuant to which the Company will manage the communities. The Company also paid to Ventas $115 million in cash, released all security deposits under the former guaranty (which included the release of a $42.4 million deposit held by Ventas and the payment of $4.2 million in cash as settlement of the amount of letters of credit), and issued a $45 million unsecured interest-only promissory note to Ventas. The initial interest rate of the promissory note is 9.0% per annum and will increase by 0.50% on each anniversary of the date of issuance. The Company may prepay the outstanding principal amount in whole or in part at any time without premium or penalty. The promissory note matures on the earlier of December 31, 2025 or the occurrence of a change of control transaction (as defined in the Guaranty).
|
•
|
On the Effective Date, the Company issued to Ventas a warrant (the “Warrant”) to purchase 16.3 million shares of the Company’s common stock, $0.01 par value per share, at a price per share of $3.00. The Warrant is exercisable at Ventas’ option at any time and from time to time, in whole or in part, until December 31, 2025. The exercise price and the number of shares issuable on exercise of the Warrant are subject to certain anti-dilution adjustments, including for cash dividends, stock dividends, stock splits, reclassifications, non-cash distributions, certain repurchases of common stock and business combination transactions. To the extent that the number of shares owned by Ventas (including shares underlying the Warrant) would be more than 9.6% of the total combined voting power of all the Company’s classes of capital stock or of the total value of shares of all the Company’s classes of capital stock (the “Ownership Cap”) (other than as a result of actions taken by Ventas), the Company would generally be required to repurchase the number of shares necessary to avoid Ventas exceeding the Ownership Cap unless Ventas makes an election to require the Company to pay Ventas cash in lieu of issuing shares pursuant to the Warrant in excess of the Ownership Cap. The Warrant and the shares issuable upon exercise thereof have not been registered under the Securities Act of 1933, as amended, and were issued in a private placement pursuant to Section 4(a)(2) thereof. On the Effective Date, the parties entered into a Registration Rights Agreement, pursuant to which Ventas and its permitted transferees are entitled to certain registration rights. Under the terms of the agreement, the Company is required to use reasonable best efforts to prepare and file a shelf registration statement with the SEC as promptly as practicable, but no later than the close of business on the fifth day following the date on which the Company files its Quarterly Report on Form 10-Q for the period ended June 30, 2020, with respect to the shares of common stock underlying the Warrant, and, if the registration statement is not automatically effective, to have the registration statement declared effective promptly thereafter. Ventas is entitled to customary underwritten offering, piggyback and additional demand registration rights with respect to the shares underlying the Warrant.
|
•
|
During the three months ended June 30, 2020, we accepted $33.5 million of cash for grants from the Emergency Fund, which was expanded by the CARES Act to provide grants or other funding mechanisms to eligible healthcare providers for healthcare related expenses or lost revenues attributable to COVID-19. Approximately $28.8 million of the grants were made available pursuant to the Emergency Fund’s general distribution, with grant amounts based primarily on our relative share of aggregate 2019 Medicare fee-for-service reimbursements and generally related to home health, hospice, outpatient therapy, and skilled nursing care provided through our Health Care Services and CCRCs segments. Approximately $4.7 million of the grants were made available pursuant to the Emergency Fund’s targeted allocation for certified skilled nursing facilities, with amounts determined using a per-facility and per-bed model. During July 2020, we applied for additional grants pursuant to the Emergency Fund’s Medicaid and CHIP allocation. The amount of such grants are expected to be based on 2% of a portion of our 2018 gross revenues from patient care, and we expect to receive up to approximately $50 million of grants from this allocation.
|
•
|
During the three months ended June 30, 2020, we received $85.0 million under the Accelerated and Advance Payment Program administered by CMS, which was temporarily expanded by the CARES Act. Recoupment of accelerated/advanced payments are required to begin 120 days after their issuance through offsets of new Medicare claims, and all accelerated/advanced payments are due 210 days following their issuance.
|
•
|
Under the CARES Act, we have elected to defer payment of the employer portion of social security payroll taxes incurred from March 27, 2020 to December 31, 2020. One-half of such deferral amount will become due on each of December 31, 2021 and December 31, 2022. As of June 30, 2020 we have deferred $26.5 million under the program and intend to defer an additional approximately $40 million of the employer portion of payroll taxes estimated to be incurred for the six months ending December 31, 2020.
|
•
|
The CARES Act temporarily suspended the 2% Medicare sequestration for the period May 1, 2020 to December 31, 2020, which primarily benefits our Health Care Services segment. This suspension had a favorable impact of $1.0 million on the segment’s resident fee revenue for the three months ended June 30, 2020, and we estimate that the suspension will have a $3.0 million favorable impact on the segment’s resident fee revenue for the six months ended December 31, 2020.
|
•
|
We continue to evaluate our eligibility to claim the employee retention tax credit under the CARES Act for certain of our associates. The refundable tax credit is available to employers that fully or partially suspend operations during any calendar quarter in 2020 due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings due to COVID-19, and is equal to 50% of qualified wages paid after March 12, 2020 through December 31, 2020 to qualified employees, with a maximum credit of $5,000 per employee. We estimate that we will be eligible to claim tax credits of $10 million or more. However, there can be no assurance that we will qualify for, or receive, tax credits in the amount we expect.
|
•
|
Healthpeak: On October 1, 2019, we entered into definitive agreements, including a Master Transactions and Cooperation Agreement (the "MTCA") and an Equity Interest Purchase Agreement (the "Purchase Agreement"), providing for a multi-part transaction with Healthpeak. The parties subsequently amended the agreements to include one additional entry fee CCRC community as part of the sale of our interest in the CCRC Venture (rather than removing the community from the CCRC Venture for joint marketing and sale). The components of the multi-part transaction include:
|
•
|
CCRC Venture Transaction: Pursuant to the Purchase Agreement, on January 31, 2020, Healthpeak acquired our 51% ownership interest in the CCRC Venture, which held 14 entry fee CCRCs (6,383 units), for a purchase price of $289.2 million, net of a $5.9 million post-closing net working capital adjustment paid to Healthpeak during the three months ended June 30, 2020 (representing an aggregate valuation of $1.06 billion less portfolio debt, subject to a net working capital adjustment). We recognized a $369.8 million gain on sale of assets for the six months ended June 30, 2020, and we derecognized the net equity method liability for the sale of the ownership interest in the CCRC Venture. At the closing, the parties terminated the existing management agreements on the 14 entry fee CCRCs, Healthpeak paid us a $100.0 million management agreement termination fee, and we transitioned operations of the entry fee CCRCs to a new operator. We recognized $100.0 million of management fee revenue for the three months ended March 31, 2020 for the management termination fee. The sale of our interest in the CCRC Venture and the $100.0 million of management termination fees generated approximately $579.0 million of taxable income in three months ended March 31, 2020. We will utilize any 2020 operating losses generated and tax loss carryforwards (including our capital loss carryforward that was generated in 2018) to offset the taxable gain on this transaction. Prior to the January 31, 2020 closing, the parties moved the remaining two entry fee CCRCs (889 units) into a new unconsolidated venture on substantially the same terms as the CCRC Venture to accommodate the sale of such two communities expected to occur in 2021. Subsequent to these transactions, we will have exited substantially all of our entry fee CCRC operations.
|
•
|
Master Lease Transactions. Pursuant to the MTCA, on January 31, 2020, the parties amended and restated our existing master lease pursuant to which we continue to lease 25 communities (2,711 units) from Healthpeak, and we acquired 18 formerly leased communities (2,014 units) from Healthpeak, at which time the 18 communities were removed from the master lease. At the closing, we paid $405.5 million to acquire such communities and to reduce our annual rent under the amended and restated master lease. We funded the community acquisitions with $192.6 million of non-recourse mortgage financing and the proceeds from the multi-part transaction. In addition, Healthpeak has agreed to terminate the lease for one leased community (159 units). With respect to the continuing 24 communities (2,552 units), our amended and restated master lease: (i) has an initial term to expire on December 31, 2027, subject to two extension options at our election for ten years each, which must be exercised with respect to the entire pool of leased communities; (ii) the initial annual base rent for the 24 communities is $41.7 million and is subject to an escalator of 2.4% per annum on April 1st of each year; and (iii) Healthpeak has agreed to make available up to $35.0 million for capital expenditures for a five-year period related to the 24 communities at an initial lease rate of 7.0%. As a result of the community acquisition
|
•
|
Acquisitions Pursuant to Purchase Options: On January 22, 2020, we acquired eight formerly leased communities (336 units) from National Health Investors, Inc. pursuant to our exercise of a purchase option for a purchase price of $39.3 million. We funded the community acquisitions with cash on hand. During the three months ended March 31, 2020, we obtained $29.2 million of non-recourse mortgage financing, primarily secured by the acquired communities.
|
•
|
Dispositions of Owned Communities. During the six months ended June 30, 2020, we completed the sale of one owned community (78 units) for cash proceeds of $5.5 million, net of transaction costs, and for which we recognized a net gain on sale of assets of $0.2 million for the six months ended June 30, 2020.
|
•
|
Ventas Lease Portfolio Restructuring: On July 26, 2020 (the “Effective Date”), we entered into definitive agreements with Ventas in connection with the restructuring of our lease arrangements with Ventas, including a Master Transaction Letter Agreement (the “Master Agreement”). Pursuant to the Master Agreement:
|
•
|
On the Effective Date the parties entered into the Amended and Restated Master Lease and Security Agreement (the “Master Lease”) and Amended and Restated Guaranty (the “Guaranty”), which amended and restated the prior Master Lease and Security Agreement and prior Guaranty, each dated as of April 26, 2018 and as amended from time to time. Pursuant to the Master Lease, we continue to lease 120 communities (10,174 units) for an aggregate initial annual minimum rent of approximately $100 million, which reflects a reduction of approximately $83 million of annual minimum rent in effect prior to the transaction. Effective on January 1 of each lease year, beginning January 1, 2022, the annual minimum rent will be subject to a 3% escalator. The initial term of the Master Lease ends December 31, 2025, with two 10-year extension options available to us. The annual minimum rent for the initial lease year of any such renewal term will be the greater of the fair market rental of the communities or the increased annual minimum rent for such lease year applying the foregoing 3% escalator. The Master Lease removed the prior provision that would have automatically extended the initial term in the event of the consummation of a change of control transaction by us. The Master Lease requires us to spend (or escrow with Ventas) a minimum of $1,500 per unit on a community-level basis and $3,600 per unit on an aggregate basis of all communities, in each case per 24-month period ending December 31 during the lease term, commencing with the 24-month period ending December 31, 2021. In addition, Ventas has agreed to fund costs associated with certain pre-approved capital expenditure projects in the aggregate amount of up to $37.8 million. Upon disbursement of such expenditures, the annual minimum rent under the Master Lease will increase by the amount of the disbursement multiplied by 50% of the sum of the then current 10-year treasury note rate and 4.5%. The transaction agreements with Ventas further provide that the Master Lease and certain other agreements between the parties will be cross-defaulted.
|
•
|
On the Effective Date, we entered into a Second Amended and Restated Omnibus Agreement with Ventas, which provides that if a default occurs and is continuing under certain other material leases or under certain material financings and if the same continues beyond the permitted cure period or the applicable landlord or lender exercises any material remedies, Ventas shall have the right to transition all or a portion of the communities from the Master Lease to a management arrangement with us pursuant to a market management agreement (which is terminable by either party). Notwithstanding the foregoing, Ventas may only transition community(ies) from the Master Lease to a management arrangement if such
|
•
|
On the Effective Date, we conveyed five owned communities (471 units) to Ventas in full release and satisfaction of $78 million principal amount of indebtedness secured by the communities. Upon closing, the parties entered into new terminable, market rate management agreements pursuant to which we will manage the communities. We also paid to Ventas $115 million in cash, released all security deposits under the former guaranty (which included the release of a $42.4 million deposit held by Ventas and the payment of $4.2 million in cash as settlement of the amount of letters of credit), and issued a $45 million unsecured interest-only promissory note to Ventas. The initial interest rate of the promissory note is 9.0% per annum and will increase by 0.50% on each anniversary of the date of issuance. We may prepay the outstanding principal amount in whole or in part at any time without premium or penalty. The promissory note matures on the earlier of December 31, 2025 or the occurrence of a change of control transaction (as defined in the Guaranty).
|
•
|
On the Effective Date, we issued to Ventas a warrant (the “Warrant”) to purchase 16.3 million shares of our common stock, $0.01 par value per share, at a price per share of $3.00. The Warrant is exercisable at Ventas’ option at any time and from time to time, in whole or in part, until December 31, 2025. The exercise price and the number of shares issuable on exercise of the Warrant are subject to certain anti-dilution adjustments, including for cash dividends, stock dividends, stock splits, reclassifications, non-cash distributions, certain repurchases of common stock and business combination transactions. To the extent that the number of shares owned by Ventas (including shares underlying the Warrant) would be more than 9.6% of the total combined voting power of all our classes of capital stock or of the total value of shares of all our classes of capital stock (the “Ownership Cap”) (other than as a result of actions taken by Ventas), we would generally be required to repurchase the number of shares necessary to avoid Ventas exceeding the Ownership Cap unless Ventas makes an election to require us to pay Ventas cash in lieu of issuing shares pursuant to the Warrant in excess of the Ownership Cap. The Warrant and the shares issuable upon exercise thereof have not been registered under the Securities Act of 1933, as amended, and were issued in a private placement pursuant to Section 4(a)(2) thereof. On the Effective Date, the parties entered into a Registration Rights Agreement, pursuant to which Ventas and its permitted transferees are entitled to certain registration rights. Under the terms of the agreement, we are required to use reasonable best efforts to prepare and file a shelf registration statement with the SEC as promptly as practicable, but no later than the close of business on the fifth day following the date on which we file our Quarterly Report on Form 10-Q for the period ended June 30, 2020, with respect to the shares of common stock underlying the Warrant, and, if the registration statement is not automatically effective, to have the registration statement declared effective promptly thereafter. Ventas is entitled to customary underwritten offering, piggyback and additional demand registration rights with respect to the shares underlying the Warrant.
|
|
Three Months Ended June 30, 2020
|
||||||||||
(in thousands)
|
Actual Results
|
|
Amounts Attributable to Completed Dispositions
|
|
Actual Results Less Amounts Attributable to Completed Dispositions
|
||||||
Resident fees
|
|
|
|
|
|
||||||
Independent Living
|
$
|
130,278
|
|
|
$
|
—
|
|
|
$
|
130,278
|
|
Assisted Living and Memory Care
|
432,156
|
|
|
103
|
|
|
432,053
|
|
|||
CCRCs
|
79,025
|
|
|
—
|
|
|
79,025
|
|
|||
Senior housing resident fees
|
$
|
641,459
|
|
|
$
|
103
|
|
|
$
|
641,356
|
|
Facility operating expense
|
|
|
|
|
|
||||||
Independent Living
|
$
|
89,240
|
|
|
$
|
—
|
|
|
$
|
89,240
|
|
Assisted Living and Memory Care
|
344,600
|
|
|
647
|
|
|
343,953
|
|
|||
CCRCs
|
74,721
|
|
|
—
|
|
|
74,721
|
|
|||
Senior housing facility operating expense
|
$
|
508,561
|
|
|
$
|
647
|
|
|
$
|
507,914
|
|
Cash facility lease payments
|
$
|
87,169
|
|
|
$
|
366
|
|
|
$
|
86,803
|
|
|
Three Months Ended June 30, 2019
|
||||||||||
(in thousands)
|
Actual Results
|
|
Amounts Attributable to Completed Dispositions
|
|
Actual Results Less Amounts Attributable to Completed Dispositions
|
||||||
Resident fees
|
|
|
|
|
|
||||||
Independent Living
|
$
|
135,951
|
|
|
$
|
—
|
|
|
$
|
135,951
|
|
Assisted Living and Memory Care
|
450,225
|
|
|
5,809
|
|
|
444,416
|
|
|||
CCRCs
|
101,253
|
|
|
9,476
|
|
|
91,777
|
|
|||
Senior housing resident fees
|
$
|
687,429
|
|
|
$
|
15,285
|
|
|
$
|
672,144
|
|
Facility operating expense
|
|
|
|
|
|
||||||
Independent Living
|
$
|
84,492
|
|
|
$
|
—
|
|
|
$
|
84,492
|
|
Assisted Living and Memory Care
|
317,081
|
|
|
5,489
|
|
|
311,592
|
|
|||
CCRCs
|
83,406
|
|
|
9,508
|
|
|
73,898
|
|
|||
Senior housing facility operating expense
|
$
|
484,979
|
|
|
$
|
14,997
|
|
|
$
|
469,982
|
|
Cash facility lease payments
|
$
|
94,267
|
|
|
$
|
961
|
|
|
$
|
93,306
|
|
|
Six Months Ended June 30, 2020
|
||||||||||
(in thousands)
|
Actual Results
|
|
Amounts Attributable to Completed Dispositions
|
|
Actual Results Less Amounts Attributable to Completed Dispositions
|
||||||
Resident fees
|
|
|
|
|
|
||||||
Independent Living
|
$
|
266,140
|
|
|
$
|
—
|
|
|
$
|
266,140
|
|
Assisted Living and Memory Care
|
889,635
|
|
|
1,455
|
|
|
888,180
|
|
|||
CCRCs
|
173,572
|
|
|
—
|
|
|
173,572
|
|
|||
Senior housing resident fees
|
$
|
1,329,347
|
|
|
$
|
1,455
|
|
|
$
|
1,327,892
|
|
Facility operating expense
|
|
|
|
|
|
||||||
Independent Living
|
$
|
173,688
|
|
|
$
|
—
|
|
|
$
|
173,688
|
|
Assisted Living and Memory Care
|
670,078
|
|
|
2,476
|
|
|
667,602
|
|
|||
CCRCs
|
149,337
|
|
|
—
|
|
|
149,337
|
|
|||
Senior housing facility operating expense
|
$
|
993,103
|
|
|
$
|
2,476
|
|
|
$
|
990,627
|
|
Cash facility lease payments
|
$
|
176,752
|
|
|
$
|
964
|
|
|
$
|
175,788
|
|
|
Six Months Ended June 30, 2019
|
||||||||||
(in thousands)
|
Actual Results
|
|
Amounts Attributable to Completed Dispositions
|
|
Actual Results Less Amounts Attributable to Completed Dispositions
|
||||||
Resident fees
|
|
|
|
|
|
||||||
Independent Living
|
$
|
271,645
|
|
|
$
|
—
|
|
|
$
|
271,645
|
|
Assisted Living and Memory Care
|
908,751
|
|
|
19,501
|
|
|
889,250
|
|
|||
CCRCs
|
204,980
|
|
|
19,354
|
|
|
185,626
|
|
|||
Senior housing resident fees
|
$
|
1,385,376
|
|
|
$
|
38,855
|
|
|
$
|
1,346,521
|
|
Facility operating expense
|
|
|
|
|
|
||||||
Independent Living
|
$
|
167,310
|
|
|
$
|
—
|
|
|
$
|
167,310
|
|
Assisted Living and Memory Care
|
634,908
|
|
|
17,668
|
|
|
617,240
|
|
|||
CCRCs
|
165,496
|
|
|
19,010
|
|
|
146,486
|
|
|||
Senior housing facility operating expense
|
$
|
967,714
|
|
|
$
|
36,678
|
|
|
$
|
931,036
|
|
Cash facility lease payments
|
$
|
255,483
|
|
|
$
|
2,388
|
|
|
$
|
253,095
|
|
|
Six Months Ended
June 30, 2020 |
|
Twelve Months Ended
December 31, 2019
|
||
Number of communities
|
|
|
|
||
Assisted Living and Memory Care
|
3
|
|
|
20
|
|
CCRCs
|
—
|
|
|
4
|
|
Total
|
3
|
|
|
24
|
|
Total units
|
|
|
|
||
Assisted Living and Memory Care
|
208
|
|
|
1,600
|
|
CCRCs
|
—
|
|
|
827
|
|
Total
|
208
|
|
|
2,427
|
|
•
|
Operating results and data presented on a same community basis reflect results and data of a consistent population of communities by excluding the impact of changes in the composition of our portfolio of communities. The operating results exclude hurricane and natural disaster expense and related insurance recoveries, and for the 2019 periods, exclude the additional resident fee revenue and facility operating expense recognized as a result of the application of the lease accounting standard ASC 842. We define our same community portfolio as communities consolidated and operational for the full period in both comparison years. Consolidated communities excluded from the same community portfolio include communities acquired or disposed of since the beginning of the prior year, communities classified as assets held for sale, certain communities planned for disposition, certain communities that have undergone or are undergoing expansion, redevelopment, and repositioning projects, certain communities that have expansion, redevelopment, and repositioning projects that are anticipated to be under construction in the current year, and certain communities that have experienced a casualty event that significantly impacts their operations. Our management uses same community operating results and data, and we believe such results and data provide useful information to investors, because it enables comparisons of revenue, expense, and other operating measures for a consistent portfolio over time without giving effect to the impacts of communities that were not consolidated and operational for the comparison periods, communities acquired or disposed during the comparison periods (or planned for disposition), and communities with results that are or likely will be impacted by completed, in-process, or planned development-related capital expenditure projects. As presented herein, same community results include the direct costs incurred to prepare for and respond to the COVID-19 pandemic. These costs had been excluded from same community results presented in our quarterly report on Form 10-Q for the three months ended March 31, 2020.
|
•
|
RevPAR, or average monthly senior housing resident fee revenue per available unit, is defined as resident fee revenue for the corresponding portfolio for the period (excluding Health Care Services segment revenue and entrance fee amortization, and, for the 2019 periods, the additional resident fee revenue recognized as a result of the application of the lease accounting standard ASC 842), divided by the weighted average number of available units in the corresponding portfolio for the period, divided by the number of months in the period. We measure RevPAR at the consolidated level, as well as at the segment level with respect to our Independent Living, Assisted Living and Memory Care, and CCRCs segments. Our management uses RevPAR, and we believe the measure provides useful information to investors, because the measure is an indicator of senior housing resident fee revenue performance that reflects the impact of both senior housing occupancy and rate.
|
•
|
RevPOR, or average monthly senior housing resident fee revenue per occupied unit, is defined as resident fee revenue for the corresponding portfolio for the period (excluding Health Care Services segment revenue and entrance fee amortization, and, for the 2019 periods, the additional resident fee revenue recognized as a result of the application of the lease accounting standard ASC 842), divided by the weighted average number of occupied units in the corresponding portfolio for the period, divided by the number of months in the period. We measure RevPOR at the consolidated level, as well as at the segment level with respect to our Independent Living, Assisted Living and Memory Care, and CCRCs segments. Our management uses
|
•
|
Weighted average occupancy rate reflects the percentage of units at our owned and leased communities being utilized by residents over a reporting period. We measure occupancy rates with respect to our Independent Living, Assisted Living and Memory Care, and CCRCs segments, and also measure this metric both on a consolidated senior housing and a same community basis. Our management uses weighted average occupancy, and we believe the measure provides useful information to investors, because it is a significant driver to senior housing resident fee revenue.
|
|
Three Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
(in thousands)
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Total revenue and other operating income
|
$
|
865,909
|
|
|
$
|
1,019,457
|
|
|
$
|
(153,548
|
)
|
|
(15.1
|
)%
|
Facility operating expense
|
606,034
|
|
|
590,246
|
|
|
15,788
|
|
|
2.7
|
%
|
|||
Net income (loss)
|
(118,420
|
)
|
|
(56,055
|
)
|
|
62,365
|
|
|
111.3
|
%
|
|||
Adjusted EBITDA
|
44,733
|
|
|
104,036
|
|
|
(59,303
|
)
|
|
(57.0
|
)%
|
(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
|
Three Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Resident fees
|
$
|
641,459
|
|
|
$
|
687,429
|
|
|
$
|
(45,970
|
)
|
|
(6.7
|
)%
|
Other operating income
|
$
|
9,698
|
|
|
$
|
—
|
|
|
$
|
9,698
|
|
|
NM
|
|
Facility operating expense
|
$
|
508,561
|
|
|
$
|
484,979
|
|
|
$
|
23,582
|
|
|
4.9
|
%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities (period end)
|
660
|
|
|
671
|
|
|
(11
|
)
|
|
(1.6
|
)%
|
|||
Number of units (period end)
|
54,019
|
|
|
55,209
|
|
|
(1,190
|
)
|
|
(2.2
|
)%
|
|||
Total average units
|
54,040
|
|
|
55,465
|
|
|
(1,425
|
)
|
|
(2.6
|
)%
|
|||
RevPAR
|
$
|
3,954
|
|
|
$
|
4,097
|
|
|
$
|
(143
|
)
|
|
(3.5
|
)%
|
Occupancy rate (weighted average)
|
78.7
|
%
|
|
83.5
|
%
|
|
(480
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
5,022
|
|
|
$
|
4,909
|
|
|
$
|
113
|
|
|
2.3
|
%
|
|
|
|
|
|
|
|
|
|||||||
Same Community Operating Results and Data
|
|
|
|
|
|
|
|
|||||||
Resident fees
|
$
|
597,511
|
|
|
$
|
619,285
|
|
|
$
|
(21,774
|
)
|
|
(3.5
|
)%
|
Other operating income
|
$
|
6,445
|
|
|
$
|
—
|
|
|
$
|
6,445
|
|
|
NM
|
|
Facility operating expense
|
$
|
467,970
|
|
|
$
|
420,643
|
|
|
$
|
47,327
|
|
|
11.3
|
%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities
|
638
|
|
|
638
|
|
|
—
|
|
|
—
|
|
|||
Total average units
|
50,107
|
|
|
50,101
|
|
|
6
|
|
|
—
|
|
|||
RevPAR
|
$
|
3,975
|
|
|
$
|
4,120
|
|
|
$
|
(145
|
)
|
|
(3.5
|
)%
|
Occupancy rate (weighted average)
|
79.2
|
%
|
|
84.0
|
%
|
|
(480
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
5,020
|
|
|
$
|
4,905
|
|
|
$
|
115
|
|
|
2.3
|
%
|
(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
|
Three Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Resident fees
|
$
|
130,278
|
|
|
$
|
135,951
|
|
|
$
|
(5,673
|
)
|
|
(4.2
|
)%
|
Facility operating expense
|
$
|
89,240
|
|
|
$
|
84,492
|
|
|
$
|
4,748
|
|
|
5.6
|
%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities (period end)
|
68
|
|
|
68
|
|
|
—
|
|
|
—
|
%
|
|||
Number of units (period end)
|
12,534
|
|
|
12,460
|
|
|
74
|
|
|
0.6
|
%
|
|||
Total average units
|
12,534
|
|
|
12,440
|
|
|
94
|
|
|
0.8
|
%
|
|||
RevPAR
|
$
|
3,465
|
|
|
$
|
3,592
|
|
|
$
|
(127
|
)
|
|
(3.5
|
)%
|
Occupancy rate (weighted average)
|
83.5
|
%
|
|
89.1
|
%
|
|
(560
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
4,147
|
|
|
$
|
4,033
|
|
|
$
|
114
|
|
|
2.8
|
%
|
|
|
|
|
|
|
|
|
|||||||
Same Community Operating Results and Data
|
|
|
|
|
|
|
|
|||||||
Resident fees
|
$
|
122,716
|
|
|
$
|
126,563
|
|
|
$
|
(3,847
|
)
|
|
(3.0
|
)%
|
Facility operating expense
|
$
|
83,492
|
|
|
$
|
76,796
|
|
|
$
|
6,696
|
|
|
8.7
|
%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities
|
64
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|||
Total average units
|
11,703
|
|
|
11,690
|
|
|
13
|
|
|
0.1
|
%
|
|||
RevPAR
|
$
|
3,495
|
|
|
$
|
3,609
|
|
|
$
|
(114
|
)
|
|
(3.2
|
)%
|
Occupancy rate (weighted average)
|
83.8
|
%
|
|
88.8
|
%
|
|
(500
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
4,169
|
|
|
$
|
4,063
|
|
|
$
|
106
|
|
|
2.6
|
%
|
(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
|
Three Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Resident fees
|
$
|
432,156
|
|
|
$
|
450,225
|
|
|
$
|
(18,069
|
)
|
|
(4.0
|
)%
|
Other operating income
|
$
|
152
|
|
|
$
|
—
|
|
|
$
|
152
|
|
|
NM
|
|
Facility operating expense
|
$
|
344,600
|
|
|
$
|
317,081
|
|
|
$
|
27,519
|
|
|
8.7
|
%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities (period end)
|
570
|
|
|
577
|
|
|
(7
|
)
|
|
(1.2
|
)%
|
|||
Number of units (period end)
|
35,744
|
|
|
36,175
|
|
|
(431
|
)
|
|
(1.2
|
)%
|
|||
Total average units
|
35,785
|
|
|
36,451
|
|
|
(666
|
)
|
|
(1.8
|
)%
|
|||
RevPAR
|
$
|
4,025
|
|
|
$
|
4,092
|
|
|
$
|
(67
|
)
|
|
(1.6
|
)%
|
Occupancy rate (weighted average)
|
77.8
|
%
|
|
82.1
|
%
|
|
(430
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
5,172
|
|
|
$
|
4,987
|
|
|
$
|
185
|
|
|
3.7
|
%
|
|
|
|
|
|
|
|
|
|||||||
Same Community Operating Results and Data
|
|
|
|
|
|
|
|
|||||||
Resident fees
|
$
|
424,021
|
|
|
$
|
433,211
|
|
|
$
|
(9,190
|
)
|
|
(2.1
|
)%
|
Other operating income
|
$
|
151
|
|
|
$
|
—
|
|
|
$
|
151
|
|
|
NM
|
|
Facility operating expense
|
$
|
336,342
|
|
|
$
|
297,421
|
|
|
$
|
38,921
|
|
|
13.1
|
%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities
|
560
|
|
|
560
|
|
|
—
|
|
|
—
|
|
|||
Total average units
|
34,792
|
|
|
34,799
|
|
|
(7
|
)
|
|
—
|
|
|||
RevPAR
|
$
|
4,062
|
|
|
$
|
4,150
|
|
|
$
|
(88
|
)
|
|
(2.1
|
)%
|
Occupancy rate (weighted average)
|
78.2
|
%
|
|
82.6
|
%
|
|
(440
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
5,191
|
|
|
$
|
5,024
|
|
|
$
|
167
|
|
|
3.3
|
%
|
(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
|
Three Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Resident fees
|
$
|
79,025
|
|
|
$
|
101,253
|
|
|
$
|
(22,228
|
)
|
|
(22.0
|
)%
|
Other operating income
|
$
|
9,546
|
|
|
$
|
—
|
|
|
$
|
9,546
|
|
|
NM
|
|
Facility operating expense
|
$
|
74,721
|
|
|
$
|
83,406
|
|
|
$
|
(8,685
|
)
|
|
(10.4
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities (period end)
|
22
|
|
|
26
|
|
|
(4
|
)
|
|
(15.4
|
)%
|
|||
Number of units (period end)
|
5,741
|
|
|
6,574
|
|
|
(833
|
)
|
|
(12.7
|
)%
|
|||
Total average units
|
5,721
|
|
|
6,574
|
|
|
(853
|
)
|
|
(13.0
|
)%
|
|||
RevPAR
|
$
|
4,572
|
|
|
$
|
5,081
|
|
|
$
|
(509
|
)
|
|
(10.0
|
)%
|
Occupancy rate (weighted average)
|
74.0
|
%
|
|
80.6
|
%
|
|
(660
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
6,181
|
|
|
$
|
6,305
|
|
|
$
|
(124
|
)
|
|
(2.0
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Same Community Operating Results and Data
|
|
|
|
|
|
|
|
|||||||
Resident fees
|
$
|
50,774
|
|
|
$
|
59,511
|
|
|
$
|
(8,737
|
)
|
|
(14.7
|
)%
|
Other operating income
|
$
|
6,294
|
|
|
$
|
—
|
|
|
$
|
6,294
|
|
|
NM
|
|
Facility operating expense
|
$
|
48,136
|
|
|
$
|
46,426
|
|
|
$
|
1,710
|
|
|
3.7
|
%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities
|
14
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|||
Total average units
|
3,612
|
|
|
3,612
|
|
|
—
|
|
|
—
|
|
|||
RevPAR
|
$
|
4,686
|
|
|
$
|
5,492
|
|
|
$
|
(806
|
)
|
|
(14.7
|
)%
|
Occupancy rate (weighted average)
|
72.9
|
%
|
|
82.0
|
%
|
|
(910
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
6,430
|
|
|
$
|
6,701
|
|
|
$
|
(271
|
)
|
|
(4.0
|
)%
|
(in thousands, except census and treatment codes)
|
Three Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Resident fees
|
$
|
90,170
|
|
|
$
|
114,434
|
|
|
$
|
(24,264
|
)
|
|
(21.2
|
)%
|
Other operating income
|
$
|
16,995
|
|
|
$
|
—
|
|
|
$
|
16,995
|
|
|
NM
|
|
Facility operating expense
|
$
|
97,473
|
|
|
$
|
105,267
|
|
|
$
|
(7,794
|
)
|
|
(7.4
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Home health average daily census
|
12,980
|
|
|
15,966
|
|
|
(2,986
|
)
|
|
(18.7
|
)%
|
|||
Hospice average daily census
|
1,646
|
|
|
1,540
|
|
|
106
|
|
|
6.9
|
%
|
(in thousands, except communities, units, and occupancy)
|
Three Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Management fees
|
$
|
6,076
|
|
|
$
|
15,449
|
|
|
$
|
(9,373
|
)
|
|
(60.7
|
)%
|
Reimbursed costs incurred on behalf of managed communities
|
$
|
101,511
|
|
|
$
|
202,145
|
|
|
$
|
(100,634
|
)
|
|
(49.8
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities (period end)
|
77
|
|
|
138
|
|
|
(61
|
)
|
|
(44.2
|
)%
|
|||
Number of units (period end)
|
10,694
|
|
|
21,451
|
|
|
(10,757
|
)
|
|
(50.1
|
)%
|
|||
Total average units
|
10,905
|
|
|
22,464
|
|
|
(11,559
|
)
|
|
(51.5
|
)%
|
(in thousands)
|
Three Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
General and administrative expense
|
$
|
52,518
|
|
|
$
|
57,576
|
|
|
$
|
(5,058
|
)
|
|
(8.8
|
)%
|
Facility operating lease expense
|
62,379
|
|
|
67,689
|
|
|
(5,310
|
)
|
|
(7.8
|
)%
|
|||
Depreciation and amortization
|
93,154
|
|
|
94,024
|
|
|
(870
|
)
|
|
(0.9
|
)%
|
|||
Asset impairment
|
10,290
|
|
|
3,769
|
|
|
6,521
|
|
|
173.0
|
%
|
|||
Loss (gain) on facility lease termination and modification, net
|
—
|
|
|
1,797
|
|
|
(1,797
|
)
|
|
(100.0
|
)%
|
|||
Costs incurred on behalf of managed communities
|
101,511
|
|
|
202,145
|
|
|
(100,634
|
)
|
|
(49.8
|
)%
|
|||
Interest income
|
2,243
|
|
|
2,813
|
|
|
(570
|
)
|
|
(20.3
|
)%
|
|||
Interest expense
|
(52,422
|
)
|
|
(62,828
|
)
|
|
(10,406
|
)
|
|
(16.6
|
)%
|
|||
Gain (loss) on debt modification and extinguishment, net
|
(157
|
)
|
|
(2,672
|
)
|
|
(2,515
|
)
|
|
(94.1
|
)%
|
|||
Equity in earnings (loss) of unconsolidated ventures
|
438
|
|
|
(991
|
)
|
|
1,429
|
|
|
NM
|
|
|||
Gain (loss) on sale of assets, net
|
(1,029
|
)
|
|
2,846
|
|
|
(3,875
|
)
|
|
NM
|
|
|||
Other non-operating income (loss)
|
988
|
|
|
3,199
|
|
|
(2,211
|
)
|
|
(69.1
|
)%
|
|||
Benefit (provision) for income taxes
|
(8,504
|
)
|
|
(633
|
)
|
|
7,871
|
|
|
NM
|
|
|
Six Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
(in thousands)
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Total revenue and other operating income
|
$
|
1,880,048
|
|
|
$
|
2,061,501
|
|
|
$
|
(181,453
|
)
|
|
(8.8
|
)%
|
Facility operating expense
|
1,194,516
|
|
|
1,176,340
|
|
|
18,176
|
|
|
1.5
|
%
|
|||
Net income (loss)
|
251,077
|
|
|
(98,661
|
)
|
|
349,738
|
|
|
NM
|
|
|||
Adjusted EBITDA
|
229,802
|
|
|
220,619
|
|
|
9,183
|
|
|
4.2
|
%
|
(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
|
Six Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Resident fees
|
$
|
1,329,347
|
|
|
$
|
1,385,376
|
|
|
$
|
(56,029
|
)
|
|
(4.0
|
)%
|
Other operating income
|
$
|
9,698
|
|
|
$
|
—
|
|
|
$
|
9,698
|
|
|
NM
|
|
Facility operating expense
|
$
|
993,103
|
|
|
$
|
967,714
|
|
|
$
|
25,389
|
|
|
2.6
|
%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities (period end)
|
660
|
|
|
671
|
|
|
(11
|
)
|
|
(1.6
|
)%
|
|||
Number of units (period end)
|
54,019
|
|
|
55,209
|
|
|
(1,190
|
)
|
|
(2.2
|
)%
|
|||
Total average units
|
54,112
|
|
|
55,963
|
|
|
(1,851
|
)
|
|
(3.3
|
)%
|
|||
RevPAR
|
$
|
4,092
|
|
|
$
|
4,100
|
|
|
$
|
(8
|
)
|
|
(0.2
|
)%
|
Occupancy rate (weighted average)
|
81.0
|
%
|
|
83.5
|
%
|
|
(250
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
5,054
|
|
|
$
|
4,909
|
|
|
$
|
145
|
|
|
3.0
|
%
|
|
|
|
|
|
|
|
|
|||||||
Same Community Operating Results and Data
|
|
|
|
|
|
|
|
|||||||
Resident fees
|
$
|
1,234,565
|
|
|
$
|
1,243,404
|
|
|
$
|
(8,839
|
)
|
|
(0.7
|
)%
|
Other operating income
|
$
|
6,445
|
|
|
$
|
—
|
|
|
$
|
6,445
|
|
|
NM
|
|
Facility operating expense
|
$
|
913,589
|
|
|
$
|
836,479
|
|
|
$
|
77,110
|
|
|
9.2
|
%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities
|
638
|
|
|
638
|
|
|
—
|
|
|
—
|
|
|||
Total average units
|
50,111
|
|
|
50,097
|
|
|
14
|
|
|
—
|
|
|||
RevPAR
|
$
|
4,106
|
|
|
$
|
4,137
|
|
|
$
|
(31
|
)
|
|
(0.7
|
)%
|
Occupancy rate (weighted average)
|
81.4
|
%
|
|
84.2
|
%
|
|
(280
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
5,047
|
|
|
$
|
4,914
|
|
|
$
|
133
|
|
|
2.7
|
%
|
(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
|
Six Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Resident fees
|
$
|
266,140
|
|
|
$
|
271,645
|
|
|
$
|
(5,505
|
)
|
|
(2.0
|
)%
|
Other operating income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
NM
|
|
Facility operating expense
|
$
|
173,688
|
|
|
$
|
167,310
|
|
|
$
|
6,378
|
|
|
3.8
|
%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities (period end)
|
68
|
|
|
68
|
|
|
—
|
|
|
—
|
%
|
|||
Number of units (period end)
|
12,534
|
|
|
12,460
|
|
|
74
|
|
|
0.6
|
%
|
|||
Total average units
|
12,532
|
|
|
12,435
|
|
|
97
|
|
|
0.8
|
%
|
|||
RevPAR
|
$
|
3,540
|
|
|
$
|
3,597
|
|
|
$
|
(57
|
)
|
|
(1.6
|
)%
|
Occupancy rate (weighted average)
|
85.3
|
%
|
|
89.4
|
%
|
|
(410
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
4,149
|
|
|
$
|
4,023
|
|
|
$
|
126
|
|
|
3.1
|
%
|
|
|
|
|
|
|
|
|
|||||||
Same Community Operating Results and Data
|
|
|
|
|
|
|
|
|||||||
Resident fees
|
$
|
250,659
|
|
|
$
|
253,385
|
|
|
$
|
(2,726
|
)
|
|
(1.1
|
)%
|
Other operating income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
NM
|
|
Facility operating expense
|
$
|
162,656
|
|
|
$
|
152,121
|
|
|
$
|
10,535
|
|
|
6.9
|
%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities
|
64
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|||
Total average units
|
11,705
|
|
|
11,685
|
|
|
20
|
|
|
0.2
|
%
|
|||
RevPAR
|
$
|
3,569
|
|
|
$
|
3,614
|
|
|
$
|
(45
|
)
|
|
(1.2
|
)%
|
Occupancy rate (weighted average)
|
85.6
|
%
|
|
89.2
|
%
|
|
(360
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
4,172
|
|
|
$
|
4,053
|
|
|
$
|
119
|
|
|
2.9
|
%
|
(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
|
Six Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Resident fees
|
$
|
889,635
|
|
|
$
|
908,751
|
|
|
$
|
(19,116
|
)
|
|
(2.1
|
)%
|
Other operating income
|
$
|
152
|
|
|
$
|
—
|
|
|
$
|
152
|
|
|
NM
|
|
Facility operating expense
|
$
|
670,078
|
|
|
$
|
634,908
|
|
|
$
|
35,170
|
|
|
5.5
|
%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities (period end)
|
570
|
|
|
577
|
|
|
(7
|
)
|
|
(1.2
|
)%
|
|||
Number of units (period end)
|
35,744
|
|
|
36,175
|
|
|
(431
|
)
|
|
(1.2
|
)%
|
|||
Total average units
|
35,864
|
|
|
36,964
|
|
|
(1,100
|
)
|
|
(3.0
|
)%
|
|||
RevPAR
|
$
|
4,134
|
|
|
$
|
4,081
|
|
|
$
|
53
|
|
|
1.3
|
%
|
Occupancy rate (weighted average)
|
79.9
|
%
|
|
81.8
|
%
|
|
(190
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
5,175
|
|
|
$
|
4,987
|
|
|
$
|
188
|
|
|
3.8
|
%
|
|
|
|
|
|
|
|
|
|||||||
Same Community Operating Results and Data
|
|
|
|
|
|
|
|
|||||||
Resident fees
|
$
|
871,629
|
|
|
$
|
868,798
|
|
|
$
|
2,831
|
|
|
0.3
|
%
|
Other operating income
|
$
|
151
|
|
|
$
|
—
|
|
|
$
|
151
|
|
|
NM
|
|
Facility operating expense
|
$
|
654,941
|
|
|
$
|
591,394
|
|
|
$
|
63,547
|
|
|
10.7
|
%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities
|
560
|
|
|
560
|
|
|
—
|
|
|
—
|
|
|||
Total average units
|
34,794
|
|
|
34,800
|
|
|
(6
|
)
|
|
—
|
|
|||
RevPAR
|
$
|
4,175
|
|
|
$
|
4,161
|
|
|
$
|
14
|
|
|
0.3
|
%
|
Occupancy rate (weighted average)
|
80.3
|
%
|
|
82.7
|
%
|
|
(240
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
5,197
|
|
|
$
|
5,036
|
|
|
$
|
161
|
|
|
3.2
|
%
|
(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
|
Six Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Resident fees
|
$
|
173,572
|
|
|
$
|
204,980
|
|
|
$
|
(31,408
|
)
|
|
(15.3
|
)%
|
Other operating income
|
$
|
9,546
|
|
|
$
|
—
|
|
|
$
|
9,546
|
|
|
NM
|
|
Facility operating expense
|
$
|
149,337
|
|
|
$
|
165,496
|
|
|
$
|
(16,159
|
)
|
|
(9.8
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities (period end)
|
22
|
|
|
26
|
|
|
(4
|
)
|
|
(15.4
|
)%
|
|||
Number of units (period end)
|
5,741
|
|
|
6,574
|
|
|
(833
|
)
|
|
(12.7
|
)%
|
|||
Total average units
|
5,716
|
|
|
6,564
|
|
|
(848
|
)
|
|
(12.9
|
)%
|
|||
RevPAR
|
$
|
5,034
|
|
|
$
|
5,156
|
|
|
$
|
(122
|
)
|
|
(2.4
|
)%
|
Occupancy rate (weighted average)
|
78.2
|
%
|
|
81.7
|
%
|
|
(350
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
6,438
|
|
|
$
|
6,308
|
|
|
$
|
130
|
|
|
2.1
|
%
|
|
|
|
|
|
|
|
|
|||||||
Same Community Operating Results and Data
|
|
|
|
|
|
|
|
|||||||
Resident fees
|
$
|
112,277
|
|
|
$
|
121,221
|
|
|
$
|
(8,944
|
)
|
|
(7.4
|
)%
|
Other operating income
|
$
|
6,294
|
|
|
$
|
—
|
|
|
$
|
6,294
|
|
|
NM
|
|
Facility operating expense
|
$
|
95,992
|
|
|
$
|
92,964
|
|
|
$
|
3,028
|
|
|
3.3
|
%
|
|
|
|
|
|
|
|
|
|||||||
Number of communities
|
14
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|||
Total average units
|
3,612
|
|
|
3,612
|
|
|
—
|
|
|
—
|
|
|||
RevPAR
|
$
|
5,181
|
|
|
$
|
5,594
|
|
|
$
|
(413
|
)
|
|
(7.4
|
)%
|
Occupancy rate (weighted average)
|
77.5
|
%
|
|
83.2
|
%
|
|
(570
|
) bps
|
|
n/a
|
|
|||
RevPOR
|
$
|
6,672
|
|
|
$
|
6,725
|
|
|
$
|
(53
|
)
|
|
(0.8
|
)%
|
(in thousands, except census and treatment codes)
|
Six Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Resident fees
|
$
|
184,989
|
|
|
$
|
225,966
|
|
|
$
|
(40,977
|
)
|
|
(18.1
|
)%
|
Other operating income
|
$
|
16,995
|
|
|
$
|
—
|
|
|
$
|
16,995
|
|
|
NM
|
|
Facility operating expense
|
$
|
201,413
|
|
|
$
|
208,626
|
|
|
$
|
(7,213
|
)
|
|
(3.5
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Home health average daily census
|
13,500
|
|
|
15,935
|
|
|
(2,435
|
)
|
|
(15.3
|
)%
|
|||
Hospice average daily census
|
1,672
|
|
|
1,485
|
|
|
187
|
|
|
12.6
|
%
|
(in thousands, except communities, units, and occupancy)
|
Six Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Management fees
|
$
|
114,791
|
|
|
$
|
31,192
|
|
|
$
|
83,599
|
|
|
NM
|
|
Reimbursed costs incurred on behalf of managed communities
|
$
|
224,228
|
|
|
$
|
418,967
|
|
|
$(194,739)
|
|
(46.5
|
)%
|
||
|
|
|
|
|
|
|
|
|||||||
Number of communities (period end)
|
77
|
|
|
138
|
|
|
(61
|
)
|
|
(44.2
|
)%
|
|||
Number of units (period end)
|
10,694
|
|
|
21,451
|
|
|
(10,757
|
)
|
|
(50.1
|
)%
|
|||
Total average units
|
12,115
|
|
|
23,755
|
|
|
(11,640
|
)
|
|
(49.0
|
)%
|
(in thousands)
|
Six Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
General and administrative expense
|
$
|
107,113
|
|
|
$
|
113,887
|
|
|
$
|
(6,774
|
)
|
|
(5.9
|
)%
|
Facility operating lease expense
|
126,860
|
|
|
136,357
|
|
|
(9,497
|
)
|
|
(7.0
|
)%
|
|||
Depreciation and amortization
|
183,892
|
|
|
190,912
|
|
|
(7,020
|
)
|
|
(3.7
|
)%
|
|||
Asset impairment
|
88,516
|
|
|
4,160
|
|
|
84,356
|
|
|
NM
|
|
|||
Loss (gain) on facility lease termination and modification, net
|
—
|
|
|
2,006
|
|
|
(2,006
|
)
|
|
(100.0
|
)%
|
|||
Costs incurred on behalf of managed communities
|
224,228
|
|
|
418,967
|
|
|
(194,739
|
)
|
|
(46.5
|
)%
|
|||
Interest income
|
3,698
|
|
|
5,897
|
|
|
(2,199
|
)
|
|
(37.3
|
)%
|
|||
Interest expense
|
(108,782
|
)
|
|
(126,193
|
)
|
|
(17,411
|
)
|
|
(13.8
|
)%
|
|||
Gain (loss) on debt modification and extinguishment, net
|
19,024
|
|
|
(2,739
|
)
|
|
21,763
|
|
|
NM
|
|
|||
Equity in earnings (loss) of unconsolidated ventures
|
(570
|
)
|
|
(1,517
|
)
|
|
(947
|
)
|
|
(62.4
|
)%
|
|||
Gain (loss) on sale of assets, net
|
371,810
|
|
|
2,144
|
|
|
369,666
|
|
|
NM
|
|
|||
Other non-operating income (loss)
|
3,650
|
|
|
6,187
|
|
|
(2,537
|
)
|
|
(41.0
|
)%
|
|||
Benefit (provision) for income taxes
|
7,324
|
|
|
(1,312
|
)
|
|
8,636
|
|
|
NM
|
|
|
Six Months Ended
June 30, |
|
Increase (Decrease)
|
|||||||||||
(in thousands)
|
2020
|
|
2019
|
|
Amount
|
|
Percent
|
|||||||
Net cash provided by (used in) operating activities
|
$
|
209,319
|
|
|
$
|
59,119
|
|
|
$
|
150,200
|
|
|
NM
|
|
Net cash provided by (used in) investing activities
|
(295,410
|
)
|
|
(80,299
|
)
|
|
215,111
|
|
|
NM
|
|
|||
Net cash provided by (used in) financing activities
|
306,524
|
|
|
(104,079
|
)
|
|
410,603
|
|
|
NM
|
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
220,433
|
|
|
(125,259
|
)
|
|
345,692
|
|
|
NM
|
|
|||
Cash, cash equivalents, and restricted cash at beginning of period
|
301,697
|
|
|
450,218
|
|
|
(148,521
|
)
|
|
(33.0
|
)%
|
|||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
522,130
|
|
|
$
|
324,959
|
|
|
$
|
197,171
|
|
|
60.7
|
%
|
|
|
|
|
|
|
|
|
|||||||
Adjusted Free Cash Flow
|
$
|
118,633
|
|
|
$
|
(63,340
|
)
|
|
$
|
181,973
|
|
|
NM
|
|
•
|
cash balances on hand, cash equivalents, and marketable securities;
|
•
|
cash flows from operations;
|
•
|
proceeds from our credit facilities;
|
•
|
funds generated through unconsolidated venture arrangements;
|
•
|
proceeds from mortgage financing, refinancing of various assets, or sale-leaseback transactions;
|
•
|
funds raised in the debt or equity markets; and
|
•
|
proceeds from the disposition of assets.
|
•
|
working capital;
|
•
|
operating costs such as employee compensation and related benefits, severance costs, general and administrative expense, and supply costs;
|
•
|
debt service and lease payments;
|
•
|
acquisition consideration, lease termination and restructuring costs, and transaction and integration costs;
|
•
|
capital expenditures and improvements, including the expansion, renovation, redevelopment, and repositioning of our current communities and the development of new communities;
|
•
|
cash collateral required to be posted in connection with our financial instruments and insurance programs;
|
•
|
purchases of common stock under our share repurchase authorizations;
|
•
|
other corporate initiatives (including integration, information systems, branding, and other strategic projects); and
|
•
|
prior to 2009, dividend payments.
|
•
|
working capital;
|
•
|
operating costs such as employee compensation and related benefits, severance costs, general and administrative expense, and supply costs, including those related to the COVID-19 pandemic;
|
•
|
debt service and lease payments;
|
•
|
payment of deferred payroll taxes under the CARES Act;
|
•
|
acquisition consideration;
|
•
|
transaction costs and expansion of our healthcare services;
|
•
|
capital expenditures and improvements, including the expansion, renovation, redevelopment, and repositioning of our existing communities;
|
•
|
cash collateral required to be posted in connection with our financial instruments and insurance programs; and
|
•
|
other corporate initiatives (including information systems and other strategic projects).
|
(in millions)
|
Six Months Ended June 30, 2020
|
||
Community-level capital expenditures, net (1)
|
$
|
68.9
|
|
Corporate capital expenditures, net(2)
|
13.2
|
|
|
Non-development capital expenditures, net (3)
|
82.1
|
|
|
Development capital expenditures, net
|
6.8
|
|
|
Total capital expenditures, net
|
$
|
88.9
|
|
(1)
|
Reflects the amount invested, net of lessor reimbursements of $13.9 million.
|
(2)
|
Includes $1.3 million of remediation costs at our communities resulting from hurricanes and other natural disasters and for the acquisition of emergency power generators at our impacted Florida communities.
|
(3)
|
Amount is included in Adjusted Free Cash Flow.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(in thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net income (loss)
|
$
|
(118,420
|
)
|
|
$
|
(56,055
|
)
|
|
$
|
251,077
|
|
|
$
|
(98,661
|
)
|
Provision (benefit) for income taxes
|
8,504
|
|
|
633
|
|
|
(7,324
|
)
|
|
1,312
|
|
||||
Equity in (earnings) loss of unconsolidated ventures
|
(438
|
)
|
|
991
|
|
|
570
|
|
|
1,517
|
|
||||
Loss (gain) on debt modification and extinguishment, net
|
157
|
|
|
2,672
|
|
|
(19,024
|
)
|
|
2,739
|
|
||||
Loss (gain) on sale of assets, net
|
1,029
|
|
|
(2,846
|
)
|
|
(371,810
|
)
|
|
(2,144
|
)
|
||||
Other non-operating (income) loss
|
(988
|
)
|
|
(3,199
|
)
|
|
(3,650
|
)
|
|
(6,187
|
)
|
||||
Interest expense
|
52,422
|
|
|
62,828
|
|
|
108,782
|
|
|
126,193
|
|
||||
Interest income
|
(2,243
|
)
|
|
(2,813
|
)
|
|
(3,698
|
)
|
|
(5,897
|
)
|
||||
Income (loss) from operations
|
(59,977
|
)
|
|
2,211
|
|
|
(45,077
|
)
|
|
18,872
|
|
||||
Depreciation and amortization
|
93,154
|
|
|
94,024
|
|
|
183,892
|
|
|
190,912
|
|
||||
Asset impairment
|
10,290
|
|
|
3,769
|
|
|
88,516
|
|
|
4,160
|
|
||||
Loss (gain) on facility lease termination and modification, net
|
—
|
|
|
1,797
|
|
|
—
|
|
|
2,006
|
|
||||
Operating lease expense adjustment
|
(8,221
|
)
|
|
(4,429
|
)
|
|
(14,954
|
)
|
|
(8,812
|
)
|
||||
Non-cash stock-based compensation expense
|
6,119
|
|
|
6,030
|
|
|
12,076
|
|
|
12,386
|
|
||||
Transaction and organizational restructuring costs
|
3,368
|
|
|
634
|
|
|
5,349
|
|
|
1,095
|
|
||||
Adjusted EBITDA (1)
|
$
|
44,733
|
|
|
$
|
104,036
|
|
|
$
|
229,802
|
|
|
$
|
220,619
|
|
(1)
|
Adjusted EBITDA for the three and six months ended June 30, 2019 includes a negative non-recurring net impact of $6.5 million and $13.0 million, respectively, from the application of the lease accounting standard effective January 1, 2019, for
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(in thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net cash provided by (used in) operating activities
|
$
|
151,840
|
|
|
$
|
64,128
|
|
|
$
|
209,319
|
|
|
$
|
59,119
|
|
Net cash provided by (used in) investing activities
|
(47,483
|
)
|
|
19,774
|
|
|
(295,410
|
)
|
|
(80,299
|
)
|
||||
Net cash provided by (used in) financing activities
|
(40,726
|
)
|
|
(87,443
|
)
|
|
306,524
|
|
|
(104,079
|
)
|
||||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
$
|
63,631
|
|
|
$
|
(3,541
|
)
|
|
$
|
220,433
|
|
|
$
|
(125,259
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net cash provided by (used in) operating activities
|
$
|
151,840
|
|
|
$
|
64,128
|
|
|
$
|
209,319
|
|
|
$
|
59,119
|
|
Distributions from unconsolidated ventures from cumulative share of net earnings
|
—
|
|
|
(781
|
)
|
|
—
|
|
|
(1,530
|
)
|
||||
Changes in prepaid insurance premiums financed with notes payable
|
(5,770
|
)
|
|
(6,752
|
)
|
|
11,664
|
|
|
12,090
|
|
||||
Changes in assets and liabilities for lessor capital expenditure reimbursements under operating leases
|
(6,421
|
)
|
|
(1,000
|
)
|
|
(10,509
|
)
|
|
(1,000
|
)
|
||||
Non-development capital expenditures, net
|
(21,521
|
)
|
|
(66,464
|
)
|
|
(82,077
|
)
|
|
(121,066
|
)
|
||||
Payment of financing lease obligations
|
(4,677
|
)
|
|
(5,500
|
)
|
|
(9,764
|
)
|
|
(10,953
|
)
|
||||
Adjusted Free Cash Flow (1)
|
$
|
113,451
|
|
|
$
|
(16,369
|
)
|
|
$
|
118,633
|
|
|
$
|
(63,340
|
)
|
(1)
|
Adjusted Free Cash Flow includes transaction and organizational restructuring costs of $3.4 million and $0.6 million for the three months ended June 30, 2020 and 2019, respectively, and $5.3 million and $1.1 million for the six months ended June 30, 2020 and 2019, respectively; includes the $100.0 million management agreement termination fee payment received from
|
(a)
|
Not applicable.
|
(b)
|
Not applicable.
|
(c)
|
The following table contains information regarding purchases of our common stock made during the quarter ended June 30, 2020 by or on behalf of the Company or any ''affiliated purchaser,'' as defined by Rule 10b-18(a)(3) of the Exchange Act:
|
Period
|
Total
Number of Shares Purchased (1) |
|
Average
Price Paid per Share |
|
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Approximate Dollar Value of
Shares that May Yet Be Purchased Under the Plans or Programs ($ in thousands) (2) |
||||||
4/1/2020 - 4/30/2020
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
44,026
|
|
5/1/2020 - 5/31/2020
|
17,061
|
|
|
3.46
|
|
|
—
|
|
|
44,026
|
|
||
6/1/2020 - 6/30/2020
|
—
|
|
|
—
|
|
|
—
|
|
|
44,026
|
|
||
Total
|
17,061
|
|
|
$
|
3.46
|
|
|
—
|
|
|
|
(1)
|
Consists entirely of shares withheld to satisfy tax liabilities due upon the vesting of restricted stock. The average price paid per share for such share withholding is based on the closing price per share on the vesting date of the restricted stock or, if such date is not a trading day, the trading day immediately prior to such vesting date.
|
(2)
|
On November 1, 2016, the Company announced that its Board of Directors had approved a share repurchase program that authorizes the Company to purchase up to $100.0 million in the aggregate of its common stock. The share repurchase program is intended to be implemented through purchases 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, and capital availability. The repurchase program does not obligate the Company to acquire any particular amount of common stock and the program may be suspended, modified or discontinued at any time at the Company's discretion without prior notice. Shares of stock repurchased under the program will be held as treasury shares. As of June 30, 2020, $44.0 million remained available under the repurchase program.
|
|
BROOKDALE SENIOR LIVING INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
By:
|
/s/ Steven E. Swain
|
|
|
Name:
|
Steven E. Swain
|
|
|
Title:
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
Date:
|
August 10, 2020
|
|
(a)
|
default by the Borrower in the payment (i) of principal when due (whether on the stated due date therefor, on the Maturity Date, on the Acceleration Date or otherwise) and/or (ii) interest or any other amounts within five days after the due date therefor;
|
(b)
|
default by the Borrower in the performance of or breach by the Borrower of any term, covenant or agreement of the Borrower in this Note (other than those specified in clause (a) above);
|
(c)
|
a court having jurisdiction in the premises enters a decree or order for (A) relief in respect of the Borrower or any of its Significant Subsidiaries in an involuntary case under any applicable bankruptcy or other similar law now or hereafter in effect, (B) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Borrower or any of its Significant Subsidiaries or (C) the winding up or liquidation of the affairs of the Borrower or any of its Significant Subsidiaries, and, in each case, such decree or order shall remain unstayed and in effect for a period of [***] ([***]) consecutive days;
|
(d)
|
the Borrower or any of its Significant Subsidiaries (A) commences a voluntary case under any applicable bankruptcy or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (B) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of such Person or for all or substantially all of the property and assets of such Person or (C) effects any general assignment for the benefit of creditors;
|
(e)
|
the Borrower or any of its Significant Subsidiaries fails to pay any Indebtedness (other than this Note) at final maturity, or the occurrence of any event or condition that results in any Indebtedness of the Borrower or any of its Significant Subsidiaries (other than this Note) becoming due prior to its final maturity or would allow the holders (or trustee or agent therefor) thereof to cause such Indebtedness (with or without the giving of notice) to become due prior to its final maturity (other than mandatory prepayments of secured Indebtedness that become payable as a result of a disposition of the property or assets securing such Indebtedness; provided that such Indebtedness is repaid when required), in each case, if the total amount of such Indebtedness as to which a default or event of default or such other event or condition has occurred or that is unpaid or accelerated exceeds $[***] or its foreign currency equivalent;
|
(f)
|
the Borrower or any of its Significant Subsidiaries fails to pay final judgments aggregating in excess of $[***] or its foreign currency equivalent (net of any amounts which are covered by insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed or bonded pending appeal within the time required by the terms of the judgment; or
|
(g)
|
the occurrence of a “Master Lease Event of Default” (as defined in the Amended and Restated Master Lease and Security Agreement (as it may be further amended, modified, amended, modified, amended and restated or divided from time to time in accordance with the terms thereof), dated as of the Funding Date, by and among certain Subsidiaries and affiliates of Holder and certain Subsidiaries and affiliates of Borrower).
|
(a)
|
the Borrower is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than the Borrower) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory of the United States (the Borrower or such Person, as the case may be, being herein called the “Successor Company”);
|
(b)
|
the Successor Company (if other than the Borrower) expressly assumes all the obligations of the Borrower under this Note pursuant to a document or instrument in form and substance reasonably satisfactory to the Holder;
|
(c)
|
immediately after giving effect to such transaction no Event of Default shall have occurred and be continuing; and
|
(d)
|
other than in connection with a consolidation, amalgamation or merger of a Subsidiary of the Borrower with and into the Borrower where the Borrower is the surviving Person, the Successor Company shall have delivered to the Holder an officer’s certificate and an opinion of counsel (in form and substance reasonably satisfactory to the Holder), each stating that such consolidation, merger or transfer complies with this Note.
|
1. Defined Terms
|
1
|
2. Premises; Single Lease; Lease Combination and Amendment and Restatement
|
1
|
2.1. Premises
|
1
|
2.2. Single Lease
|
2
|
2.3. Amendment and Restatement
|
2
|
3. Term
|
3
|
3.1. Initial Term
|
3
|
3.2. Renewal Terms
|
3
|
3.3. Term Defined
|
3
|
4. Rent
|
4
|
4.1. Minimum Rent, Adjustments
|
4
|
4.2. Additional Rent
|
5
|
4.3. [Reserved]
|
6
|
4.4. Tax and Insurance Escrow
|
6
|
4.5. Absolute Net Lease
|
9
|
4.6. Payment Method
|
9
|
5. Operating Covenants
|
9
|
5.1 Insurance
|
9
|
5.2. Permitted Use
|
13
|
5.3. Tenant Property
|
14
|
5.4. Authorizations
|
14
|
5.5. Compliance with Requirements, Third Party Payor Programs and Permitted Encumbrances
|
15
|
5.6. Preservation of Business
|
17
|
5.7. Hazardous Materials
|
17
|
5.8. Financial, Management and Regulatory Reports
|
18
|
5.9. Intentionally Deleted
|
18
|
5.10. Negative Covenants
|
18
|
5.11. Furnish Information
|
19
|
5.12. Further Assurances
|
20
|
5.13. No Impairment
|
20
|
5.14. Permitted AR Financing
|
20
|
5.15. No Liens
|
20
|
6. Condition and Maintenance of the Premises
|
20
|
6.1. Acceptance “AS IS”
|
20
|
6.2. Tenant’s Maintenance Obligations
|
21
|
6.3. Upgrade Expenditures
|
21
|
6.4. Alterations
|
25
|
6.5. Minimum Rent Increases
|
26
|
6.6. Granting of Easements and Licenses
|
27
|
7. Events of Default; Remedies
|
28
|
7.1. Master Lease Events of Default
|
28
|
7.2. Facility Defaults
|
30
|
7.3. Landlord Termination Right
|
31
|
7.4. Remedies
|
32
|
8. Obligations of Tenant on Expiration or Early Termination of the Lease
|
35
|
8.1. Surrender of Possession
|
35
|
8.2. Transition of Operations
|
36
|
8.3. Facility Termination
|
38
|
8.4. Tenant Property
|
39
|
8.5. Holding Over
|
39
|
8.6. Survival
|
39
|
9. Certain Landlord Rights
|
39
|
9.1. Landlord’s Security Interest and Financing Statements
|
39
|
9.2. Entry and Examination of Records
|
40
|
9.3. Estoppel Certificates
|
40
|
9.4. Conveyance Release
|
40
|
9.5. Landlord’s Financing
|
41
|
10. Assignment and Subletting
|
41
|
10.1. Prohibition on Transfer
|
41
|
10.2. Effect of any Unapproved Transfer
|
41
|
10.3. Permitted Transfers
|
41
|
10.4. Rights of Landlord
|
42
|
10.5. Transfer Defined
|
42
|
10.6. Subleases
|
42
|
11. Damage and Destruction
|
43
|
11.1. Notice of Property Loss
|
43
|
11.2. Substantial Destruction
|
43
|
11.3. Partial Destruction
|
44
|
11.4. Restoration
|
44
|
11.5. Disbursement of Insurance Proceeds
|
45
|
11.6. Insufficient Proceeds/Risk of Loss
|
45
|
11.7. Landlord’s Inspection
|
46
|
11.8. Not Trust Funds
|
46
|
11.9. Waiver
|
46
|
11.10. Facility Mortgagee
|
46
|
12. Condemnation
|
46
|
12.1. Total Taking
|
46
|
12.2. Partial Taking
|
47
|
12.3. Restoration
|
47
|
12.4. Temporary Taking
|
47
|
12.5. Waiver
|
47
|
13. Indemnification by Tenant
|
47
|
13.1. Indemnity
|
47
|
13.2. Indemnity Claims Process
|
48
|
13.3. Survival of Indemnity
|
48
|
13.4. Waiver of Subrogation
|
49
|
14. Combination of Leases and New Leases
|
49
|
14.1. Combination of Leases
|
49
|
14.2. New Lease
|
49
|
15. Miscellaneous
|
49
|
15.1. Attorneys’ Fees
|
49
|
15.2. Non-Recourse
|
49
|
15.3. General REIT Provisions
|
49
|
15.4. Prohibited Transactions
|
50
|
15.5. Personal Property REIT Requirements
|
50
|
15.6. Impermissible Services REIT Requirements
|
50
|
15.7. Waiver of Jury Trial
|
51
|
15.8. Notices
|
51
|
15.9. Interpretation
|
52
|
15.10. Time of the Essence
|
52
|
15.11. Severability
|
52
|
15.12. General Terms
|
52
|
15.13. Governing Law
|
52
|
15.14. Anti-Terrorism Representations
|
53
|
15.15. Notice to the Department of Health
|
53
|
15.16. Confidentiality
|
53
|
15.17. Permitted Contests
|
54
|
15.18. Landlord Restructuring Right
|
55
|
15.19. State Specific Provisions
|
55
|
(i)
|
Notwithstanding anything contained in this Lease to the contrary, Hazardous Materials Laws, in addition to all specific laws referenced in Exhibit A hereof as Hazardous Materials Laws, shall include the New Jersey Spill Compensation and Control Act (N.J.S.A. 58:10-23.11 et seq.) (for purposes of this Section 15.19.8, the “Spill Act”) and the New Jersey Industrial Site Recovery Act (N.J.S.A. 13:1K-6 et seq.) (for purposes of this Section 15.19.8, “ISRA”), if and to the extent they apply to the Premises or the use thereof at any time during the Term. The term “Authority” as used in this Section 15.19.8 shall mean governmental and quasi-governmental authorities, bodies or boards having jurisdiction over the Premises and compliance with the Hazardous Materials Laws with respect thereto, including, but not limited to, the New Jersey Department of Environmental Protection. More than one Authority shall be collectively referred to as the “Authorities.” The term “Hazardous Substances,” as used in this Lease with respect to the Premises within the State of New Jersey and compliance with the Spill Act and/or ISRA, shall mean any and all “hazardous chemicals,” “hazardous substances” or similar material or substance, including, but not limited to, flammables, explosives, radioactive materials, asbestos, polychlorinated biphenyls (PCB’s), chemicals known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous wastes, toxic substances or related materials, petroleum and petroleum products, and substances declared to be hazardous or toxic under any Hazardous Materials Law now or hereafter enacted or promulgated by any Authority.
|
(ii)
|
If at any time during the Term of this Lease, the Premises shall be determined to be an industrial establishment under ISRA as a result of the North American Industrial Classification System code applicable to Tenant’s operations, Tenant, at Tenant’s sole cost and expense, shall comply with the provisions of ISRA, or other similar applicable laws, if Tenant takes any action which would be a “triggering event” under ISRA.
|
(iii)
|
Should any Authority or any third party demand that a clean-up plan be prepared and that a clean-up be undertaken at the Premises because of any deposit, spill, discharge, or other release of Hazardous Substances in violation of the Spill Act that occurs during the Term, at or from the Premises, or which arises at any time from Tenant’s use or occupancy of the Premises, then Tenant shall, at Tenant’s sole expense, prepare and submit the required plans and all related bonds and other financial assurances; and Tenant shall carry out all such clean-up plans.
|
(iv)
|
Tenant shall indemnify, defend, and hold harmless Landlord, the manager of the property, and their respective officers, directors, beneficiaries, shareholders, partners, agents, and employees from all fines, suits, procedures, claims and actions of every kind, and all costs associated therewith (including attorneys’ and consultants’ fees) arising out of or in any way connected with any deposit, spill, discharge, or other release of Hazardous Substances that occurs during the Term, at or from the Premises, or which arises at any time from Tenant’s use or occupancy of the Premises, or from Tenant’s failure to provide all information, make all submissions, and take all steps required by all Authorities under the Hazardous Materials Laws and all other environmental laws, including any lien assessed to the Premises.
|
(v)
|
Tenant’s obligations and liabilities under this Section 15.18.8 shall survive the termination or expiration of this Lease.
|
(vi)
|
Express Agreement. The parties acknowledge and agree that the provisions of this Section 12 constitute an express agreement pursuant to the New York Real Property Law, Section 227, as the same may be amended or re-codified or any similar or successor law.
|
(vii)
|
Tenant’s Waiver; Mitigation. In connection with the exercise by Landlord of any of its remedies under this Section 7.4, including the termination of this Lease, in whole or in part, Tenant waives, to the maximum extent permitted by applicable Legal Requirements, (1) any right of redemption, re-entry or repossession under present or future laws, including without limitation, Section 761 of the New York Real Property Actions and Proceeding Law, (2) the benefit of any moratorium laws or any laws now or hereafter in force exempting property from liability for rent or for debt, (3) any duty on the part of Landlord to mitigate the damages recoverable from Tenant on account of any Default Event or Event of Default by Tenant, except that, notwithstanding the foregoing or anything in this Lease to the contrary, Landlord agrees to comply with any duty to mitigate damages where applicable Legal Requirements do not allow Tenant to waive such right, (4) the right to interpose any counterclaim (other than compulsory counterclaims) in any summary proceeding instituted by Landlord against Tenant in any court or in any action instituted by Landlord in any court for unpaid Rent under this Lease, and (5) any other right provided to Tenant under applicable Legal Requirements relating to a breach of or Event of Default under this Lease, including any rights to cure such breach or Event of Default. Tenant waives for itself and all those claim under Tenant: (a) any and all rights to restore the operation of this Lease; (b) any rights under Article 63 of the New York Civil Practice Law and Rules, including, without limitation, the right to obtain a so-called “Yellowstone” injunction in connection with any financial Default; (c) any right now or hereafter existing to petition a court to issue a stay in connection with any holdover proceeding or other summary proceeding instituted by Landlord under this Lease, including, without limitation, a stay under the provisions of New York Civil Practice Law and Rules Section 2201.
|
TENANT:
|
BLC-THE HALLMARK, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
|
|
BLC-KENWOOD OF LAKE VIEW, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
|
BROOKDALE SENIOR LIVING COMMUNITIES, INC. a Delaware corporation (f/k/a Alterra Healthcare Corporation and Alternative Living Services, Inc.)
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
(SEAL)
|
/s/ Linda B. DeVault Notary Public
|
BLC-DEVONSHIRE OF HOFFMAN ESTATES, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
BLC-SPRINGS AT EAST MESA, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
BLC-RIVER BAY CLUB, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
BLC-WOODSIDE TERRACE, L.P., a Delaware limited partnership
By: BLC-Woodside Terrace, LLC, a Delaware limited liability company, its general partner
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
BLC-ATRIUM AT SAN JOSE, L.P., a Delaware limited partnership
By: BLC-Atrium at San Jose, LLC, a Delaware limited liability company, its general partner
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
BLC-BROOKDALE PLACE OF SAN MARCOS, L.P., a Delaware limited partnership
By: BLC-Brookdale Place of San Marcos, LLC, a Delaware limited liability company, its general partner
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
BLC-PONCE DE LEON, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
BLC-PARK PLACE, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
BLC-HAWTHORNE LAKES, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
BLC-THE WILLOWS, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
BLC-BRENDENWOOD, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
BLC- CHATFIELD, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
BROOKDALE LIVING COMMUNITIES OF FLORIDA, INC. a Delaware corporation
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
|
BROOKDALE LIVING COMMUNITIES OF ILLINOIS-GV, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
|
BROOKDALE LIVING COMMUNITIES OF ILLINOIS-DNC, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
SW ASSISTED LIVING, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
SUMMERVILLE AT FAIRWOOD MANOR, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
SUMMERVILLE AT HERITAGE PLACE, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
SUMMERVILLE 5 LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
SUMMERVILLE 4 LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
SUMMERVILLE 14 LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and Treasurer
SUMMERVILLE 15 LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and Treasurer
SUMMERVILLE 16 LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and Treasurer
SUMMERVILLE 17 LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and Treasurer
SUMMERVILLE AT RIDGEWOOD GARDENS LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and Treasurer
|
ALS PROPERTIES TENNANT I, LLC,
a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
ALS PROPERTIES TENANT II, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
ALS LEASING, Inc., a Delaware corporation
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
(SEAL)
|
/s/ Linda B. DeVault
|
ASSISTED LIVING PROPERTIES, INC., a Kansas corporation
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
BLC-THE HERITAGE OF DES PLAINES, LLC, a Delaware limited liability company
By: /s/ George T. Hicks
Name: George T. Hicks
Title: Executive Vice President – Finance and
Treasurer
|
LANDLORD:
|
VENTAS REALTY, LIMITED PARTNERSHIP, a Delaware limited partnership
By: Ventas, Inc., a Delaware corporation, its general partner
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Executive Vice President
|
|
PSLT-ALS PROPERTIES I, LLC, a Delaware limited liability company
By: PSLT-ALS Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
By: Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
|
PSLT-ALS PROPERTIES II, LLC, a Delaware limited liability company
By: PSLT-ALS Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
By: Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
|
PSLT-ALS PROPERTIES IV, LLC, a Delaware limited liability company
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
|
PSLT-ALS PROPERTIES III, LLC, a Delaware limited liability company
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
ACKNOWLEDGEMENT
STATE OF ILLINOIS )
) :ss.:
COUNTY OF COOK )
Before me, the undersigned, a Notary Public in and for said County and State, personally appeared PSLT-ALS PROPERTIES III, LLC, a Delaware limited liability company (“Company”), which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Chicago, Illinois, this 24th day of July, 2020.
(SEAL) /s/ Theresa M. Kwasinski
Notary Public
Print Name: Theresa M. Kwasinski
My commission expires: August 5, 2022
Acting in the County of: Cook
|
BROOKDALE LIVING COMMUNITIES OF ILLINOIS-2960, LLC, a Delaware limited liability company
By: PSLT-BLC Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
By: Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
BROOKDALE LIVING COMMUNITIES OF ILLINOIS-HV, LLC, a Delaware limited liability company
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
RIVER OAKS PARTNERS, an Illinois general partnership
By: Brookdale Holdings, LLC, its managing partner
By: PSLT-BLC Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
By: Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
BROOKDALE LIVING COMMUNITIES OF MINNESOTA, LLC, a Delaware limited liability company
By: PSLT-BLC Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
By: Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
BROOKDALE LIVING COMMUNITIES OF CONNECTICUT, LLC, a Delaware limited liability company
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
PSLT-BLC PROPERTIES HOLDINGS, LLC, a Delaware limited liability company
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
By: Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
THE PONDS OF PEMBROKE LIMITED PARTNERSHIP, an Illinois general partnership
By: Brookdale Holdings, LLC, its general partner
By: PSLT-BLC Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
By: Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
BROOKDALE LIVING COMMUNITIES OF ARIZONA-EM, LLC, a Delaware limited liability company
By: PSLT-BLC Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
By: Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
BROOKDALE LIVING COMMUNITIES OF MASSACHUSETTS-RB, LLC, a Delaware limited liability company
By: PSLT-BLC Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
By: Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
BROOKDALE LIVING COMMUNITIES OF CALIFORNIA-RC, LLC, a Delaware limited liability company
By: PSLT-BLC Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
By: Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
BROOKDALE LIVING COMMUNITIES OF CALIFORNIA, LLC, a Delaware limited liability company
By: PSLT-BLC Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
By: Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
BLC OF CALIFORNIA-SAN MARCOS, L.P., a Delaware limited partnership
By: Brookdale Living Communities of California-San Marcos, LLC, its general partner
By: PSLT-BLC Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
By: Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
BROOKDALE LIVING COMMUNITIES OF WASHINGTON-PP, LLC, a Delaware limited liability company
By: PSLT-BLC Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
By: Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
BROOKDALE LIVING COMMUNITIES OF ILLINOIS-II, LLC, a Delaware limited liability company
By: PSLT-BLC Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
By: Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
BROOKDALE LIVING COMMUNITIES OF NEW JERSEY, LLC, a Delaware limited liability company
By: PSLT-BLC Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
BROOKDALE LIVING COMMUNITIES OF FLORIDA-CL, LLC, a Delaware limited liability company
By: PSLT-BLC Properties Holdings, LLC, its sole member
By: PSLT OP, L.P., its sole member
By: PSLT GP, LLC, its general partner
Ventas Provident, LLC, its sole member
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
NATIONWIDE HEALTH PROPERTIES, LLC, a Delaware limited liability company
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
2010 UNION LIMITED PARTNERSHIP, a Washington limited partnership
By: Nationwide Health Properties, LLC, its general partner
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
NH TEXAS PROPERTIES LIMITED PARTNERSHIP, a Texas limited partnership
By: MLD Texas Corporation, its general partner
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
MLD PROPERTIES, INC., a Delaware corporation
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
JER/NHP SENIOR LIVING ACQUISITION, LLC, a Delaware limited liability company
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
|
JER/NHP SENIOR LIVING KANSAS, INC., a Kansas corporation
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
|
|
JER/NHP SENIOR LIVING TEXAS, L.P., a Texas limited partnership
By: JER/NHP Management Texas, LLC, its general partner
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
|
|
MLD PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership
By: MLD Properties II, Inc., its general partner
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
|
|
NHP MCCLAIN, LLC, a Delaware limited liability company
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
|
ACKNOWLEDGEMENT
STATE OF ILLINOIS )
) :ss.:
COUNTY OF COOK )
Before me, the undersigned, a Notary Public in and for said County and State, personally appeared NHP MCCLAIN, LLC, a Delaware limited liability company (“Company”), by J. Justin Hutchens, its Authorized Signatory, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Chicago, Illinois, this 24th day of July, 2020.
(SEAL) /s/ Theresa M. Kwasinski
Notary Public
Print Name: Theresa M. Kwasinski
My commission expires: August 5, 2022
Acting in the County of: Cook
|
|
VENTAS FAIRWOOD, LLC, a Delaware limited liability company
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
VENTAS FRAMINGHAM, LLC, a Delaware limited liability company
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
VENTAS WHITEHALL ESTATES, LLC, a Delaware limited liability company
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
VTR-EMRTS HOLDINGS, LLC, a Delaware limited liability company
By: /s/ J. Justin Hutchens
Name: J. Justin Hutchens
Title: Authorized Signatory
|
|
|
Additional Properties......................................................................................................
|
Exhibit H-1
|
Additional Rent
|
................................................................................................................................5
|
Additional Sale Facility
|
...................................................................................................Exhibit L-1
|
Affiliate Manager
|
...........................................................................................................................19
|
Alterations
|
......................................................................................................................................26
|
Approved Project
|
...........................................................................................................................25
|
AR Financing
|
.................................................................................................................................20
|
Business
|
..........................................................................................................................................2
|
Cash Sale Proceeds
|
..........................................................................................................Exhibit L-2
|
Code
|
.................................................................................................................................................5
|
Combination Lease
|
.......................................................................................................................51
|
Condition Standard
|
........................................................................................................................22
|
Deleted Facility
|
.............................................................................................................................36
|
Deleted Facility or Facilities
|
.........................................................................................................36
|
Effective Date
|
..................................................................................................................................1
|
Escrow Deposits
|
...............................................................................................................................7
|
Event of Default
|
.............................................................................................................................29
|
Excluded Property
|
........................................................................................................Schedule 5.3
|
Excluded Vehicles
|
..........................................................................................................................15
|
Executed OTA
|
................................................................................................................................38
|
Facilities
|
...........................................................................................................................................1
|
Facility
|
.............................................................................................................................................1
|
Facility Actual Upgrade Expenditures Amount
|
.............................................................................23
|
Facility Default
|
..............................................................................................................................31
|
Facility Proprietary Marks
|
............................................................................................Schedule 5.3
|
Facility Required Upgrade Expenditures Amount
|
.........................................................................23
|
Facility Termination
|
.......................................................................................................................38
|
Facility Upgrade Deposit
|
...............................................................................................................22
|
Facility Upgrade Reimbursement Amount
|
....................................................................................23
|
Fair Market Rental
|
..........................................................................................................Exhibit D-1
|
Form OTA
|
......................................................................................................................................38
|
Individually Identifiable Health Information
|
..................................................................Exhibit C-1
|
Initial Term
|
.......................................................................................................................................3
|
Insurance Captive
|
...........................................................................................................................13
|
Landlord
|
...........................................................................................................................................1
|
Landlord Funded Upgrade Expenditures
|
.......................................................................................25
|
Landlord Funds Rent Increase
|
.......................................................................................................27
|
Landlord Indemnified Parties
|
........................................................................................................49
|
Landlord Insured Parties
|
............................................................................................................10
|
Landlord Personal Property
|
.............................................................................................................1
|
Landlord Seller
|
................................................................................................................Exhibit L-1
|
Landlord UE Funds
|
........................................................................................................................25
|
Lease
|
................................................................................................................................................1
|
Limited Termination Election
|
........................................................................................................33
|
Listed Sale Facility
|
..........................................................................................................Exhibit L-1
|
MAI Appraiser
|
................................................................................................................Exhibit D-2
|
Marketing End Date
|
........................................................................................................Exhibit L-1
|
Marketing Notice
|
.............................................................................................................Exhibit L-1
|
Master Lease Event of Default
|
......................................................................................................29
|
Minimum Rent
|
.................................................................................................................................4
|
New Guaranty
|
.................................................................................................................Exhibit H-4
|
New Lease
|
......................................................................................................................................51
|
NY DOH
|
........................................................................................................................................56
|
OFAC
|
.............................................................................................................................................55
|
OTA
|
.................................................................................................................................Exhibit L-1
|
Other Landlord Expenses
|
.................................................................................................................6
|
Patient Information
|
..........................................................................................................Exhibit C-1
|
Penalty
|
..............................................................................................................................................5
|
Permitted Transfer
|
..........................................................................................................................43
|
Personal Property REIT Requirement
|
...........................................................................................53
|
Premises
|
...........................................................................................................................................1
|
Prohibited Persons
|
.........................................................................................................................55
|
Property Loss Insurance Proceeds
|
.................................................................................................45
|
Property Removal Date
|
..................................................................................................................36
|
Property Transfer Date
|
....................................................................................................Exhibit H-3
|
Proportionate Share
|
..........................................................................................................................4
|
Protest
|
..............................................................................................................................................5
|
Real Property Taxes
|
.........................................................................................................................7
|
Receivership
|
...................................................................................................................................34
|
Reimbursement Period
|
...................................................................................................................39
|
Renewal Notice
|
................................................................................................................................4
|
Renewal Term
|
..................................................................................................................................3
|
Renewal Terms
|
.................................................................................................................................3
|
Requested Landlord UE Funds
|
......................................................................................................25
|
Required Escrow Deficiency Payment
|
............................................................................................8
|
Restoration Plans and Specifications
|
.............................................................................................46
|
Restrictive Covenants
|
....................................................................................................................17
|
Restructuring
|
..................................................................................................................................58
|
Sale Facility
|
.....................................................................................................................Exhibit L-1
|
Sale Facility Rent Reduction
|
.......................................................................Exhibit L-2, Exhibit L-3
|
Sale Notice
|
.......................................................................................................................................2
|
Section 8.3 Premises
|
......................................................................................................................40
|
Service Provider
|
.............................................................................................................................14
|
SF Purchase Contract
|
......................................................................................................Exhibit L-1
|
Situs State
|
......................................................................................................................................55
|
Subject Facility
|
................................................................................................................Exhibit L-1
|
Subject Project
|
...............................................................................................................................25
|
Substantially Destroyed
|
.................................................................................................................45
|
Surviving Lease
|
..............................................................................................................Exhibit H-1
|
Surviving Lease Date
|
......................................................................................................Exhibit H-1
|
Tenant
|
...............................................................................................................................................1
|
Tenant Personal Property
|
...............................................................................................................14
|
Tenant Seller
|
....................................................................................................................Exhibit L-1
|
Tenant’s Proportionate Share
|
..........................................................................................Exhibit H-4
|
Term
|
.................................................................................................................................................4
|
Terminated/Dispossessed Premises
|
...............................................................................................37
|
Termination/Dispossession Date
|
....................................................................................................37
|
Third Party
|
......................................................................................................................Exhibit H-4
|
Transfer
|
..........................................................................................................................................44
|
Transferred Facilities
|
.....................................................................................................................51
|
Transferred Facility
|
........................................................................................................................51
|
Unpermitted Transfer
|
.....................................................................................................................43
|
Upgrade Expenditures
|
....................................................................................................................26
|
Upgrade Expenditures Report
|
........................................................................................................24
|
Upgrade Expenditures Test Period
|
.................................................................................................22
|
Work
|
...............................................................................................................................................46
|
By:
|
BLC-Woodside Terrace, LLC, a Delaware limited liability company, its general partner
|
By:
|
BLC-Atrium at San Jose, LLC, a Delaware limited liability company, its general partner
|
By:
|
BLC-Brookdale Place of San Marcos, LLC, a Delaware limited liability company, its general partner
|
(SEAL)
|
/s/ Linda B. DeVault
|
(SEAL)
|
/s/ Linda B. DeVault
|
LANDLORDS:
|
VENTAS REALTY, LIMITED PARTNERSHIP, a Delaware limited partnership
|
If to the Company:
|
Brookdale Senior Living Inc.
111 Westwood Place, Suite 400
Brentwood, Tennessee 37027
Attention: General Counsel
|
with a copy to:
|
Skadden, Arps, Slate, Meagher & Flom LLP
One Manhattan West
New York, New York 10001
Facsimile: (917) 777-3050
E-mail: joseph.coco@skadden.com
Attention: Joseph Coco
|
If to the Holder:
|
Ventas, Inc.
353 N. Clark Street, Suite 3300
Chicago, Illinois 60654
Attention: Lease Administration
|
with a copy to:
|
Ventas, Inc.
353 N. Clark Street, Suite 3300
Chicago, Illinois 60654
Attn: Legal Department
|
with a copy to (which copy alone shall not constitute notice):
|
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attn: Robin Panovka & Victor Goldfeld
Phone: (212) 403-1000
Fax: (212) 403-2000
Email: RPanovka@wlrk.com & VGoldfeld@wlrk.com
|
|
BROOKDALE SENIOR LIVING INC.
|
|
By: /s/ George Hicks
Name: George Hicks
Title: Executive Vice President – Finance and Treasurer
|
Accepted and agreed,
|
|
VENTAS, INC.
|
|
By: /s/ Brian Wood
Name: Brian Wood
Title: Senior Vice President
and Chief Tax Officer
|
|
Warrantholder:
|
|
By:
|
|
Name:
|
|
Title:
|
|
Section 1. Definitions.......................................................................................................
|
1
|
Section 2. Registration Rights..........................................................................................
|
4
|
(a) Shelf Registration Statement.......................................................................................
|
4
|
(b) Right to Request Shelf Take-Down.............................................................................
|
5
|
(c) Demand Registration Statement If Shelf Registration Statement Unavailable...........
|
6
|
(d) Limitations on Demand Registrations.........................................................................
|
6
|
(e) Piggyback Registration................................................................................................
|
6
|
(f) Selection of Underwriters; Right to Participate...........................................................
|
7
|
(g) Priority of Securities Offered Pursuant to Demand Registrations and Underwritten Shelf Take-Downs..............................................................................................................
|
7
|
(h) Priority of Securities Offered Pursuant to Piggyback Registration.............................
|
7
|
(i) Postponement; Suspensions; Blackout Period.............................................................
|
8
|
(j) Supplements and Amendments....................................................................................
|
9
|
(k) Subsequent Holder Notice...........................................................................................
|
9
|
Section 3. Registration Procedures...................................................................................
|
10
|
Section 4. Indemnification................................................................................................
|
14
|
(a) Indemnification by the Company................................................................................
|
14
|
(b) Indemnification by the Stockholders..........................................................................
|
14
|
(c) Notices of Claims, etc.................................................................................................
|
15
|
(d) Contribution................................................................................................................
|
16
|
(e) No Exclusivity.............................................................................................................
|
16
|
Section 5. Covenants Relating to Rule 144......................................................................
|
16
|
Section 6. Miscellaneous..................................................................................................
|
17
|
(a) Termination; Survival..................................................................................................
|
17
|
(b) Governing Law............................................................................................................
|
17
|
(c) Submission to Jurisdiction...........................................................................................
|
17
|
(d) Waiver of Jury Trial.....................................................................................................................................
|
17
|
(e) Entire Agreement.........................................................................................................
|
17
|
(f) Amendments and Waivers...........................................................................................
|
18
|
(g) Successors and Assigns...............................................................................................
|
18
|
(h) Expenses......................................................................................................................
|
18
|
(i) Counterparts; Electronic Signature..............................................................................
|
18
|
(j) Severability...................................................................................................................
|
18
|
(k) Notices.........................................................................................................................
|
19
|
(l) Specific Performance...................................................................................................
|
20
|
Ventas, Inc.
|
|
353 N. Clark Street, Suite 3300
Chicago, Illinois 60654
|
|
Attention:
|
Carey Roberts
|
Email:
|
carey.roberts@Ventasreit.com
|
Wachtell, Lipton, Rosen & Katz
|
|
51 West 52nd Street
|
|
New York, NY 10019
|
|
Attention:
|
Robin Panovka & Victor Goldfeld
|
Email:
|
RPanovka@wlrk.com & VGoldfeld@wlrk.com
|
Brookdale Senior Living Inc.
|
|
111 Westwood Place, Suite 400
|
|
Brentwood, TN 37027
|
|
Attention:
|
Chad White
|
Email:
|
CWhite@brookdale.com
|
Skadden, Arps, Slate, Meagher & Flom LLP
|
|
One Manhattan West
|
|
New York, NY 10001
|
|
Attention:
|
Joseph Coco
|
Email:
|
joseph.coco@skadden.com
|
BROOKDALE SENIOR LIVING INC.
|
|
|
|
By:
|
/s/ George T. Hicks
|
|
Name: George T. Hicks
|
|
Title: Executive Vice President – Finance and Treasurer
|
VENTAS, INC.
|
|
|
|
By:
|
/s/ Brian Wood
|
|
Name: Brian Wood
|
|
Title: Senior Vice President
and Chief Tax 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:
|
August 10, 2020
|
|
/s/ Lucinda M. Baier
|
|
|
|
Lucinda M. Baier
|
|
|
|
President and 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:
|
August 10, 2020
|
|
/s/ Steven E. Swain
|
|
|
|
Steven E. Swain
|
|
|
|
Executive Vice President and Chief Financial Officer
|