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Five Star Senior Living Inc. Announces Fourth Quarter and Year End 2018 Results

Share:

Five Star Senior Living Inc. (NASDAQ:FVE) today announced its financial
results for the quarter and year ended December 31, 2018.

Financial Results for the quarter ended December 31, 2018:

  • Senior living revenue for the fourth quarter of 2018 decreased 1.1% to
    $276.3 million from $279.2 million for the same period in
    2017, primarily due to the sale of six senior living communities
    between December 2017 and June 2018 to Senior Housing Properties Trust
    (NASDAQ:SNH), which Five Star is currently managing for SNH, and the
    sale of one skilled nursing facility, or SNF, in June 2018 to a third
    party, which Five Star had previously leased from SNH. This decrease
    was partially offset by increases in occupancy, average monthly rates
    to residents who pay privately for services and revenues from
    ancillary services, such as rehabilitation and wellness services, as
    well as an estimated $0.9 million revenue reserve recorded in the
    fourth quarter of 2017 in connection with the previously disclosed
    2017 Medicare compliance assessment, or the Compliance Assessment, at
    one of Five Star's former SNFs. Management fee revenue for the fourth
    quarter of 2018 increased 5.3% to $3.7 million, primarily due to an
    increase in the number of managed communities compared to the same
    period in 2017.
  • Net loss for the fourth quarter of 2018 was $23.7 million, or $0.47
    per diluted share, compared to net loss of $1.0 million, or $0.02 per
    diluted share, for the same period in 2017. Net loss for the fourth
    quarter of 2018 included $0.8 million, or $0.02 per diluted share, of
    net severance costs incurred in December 2018 related to two former
    executive officers. Net loss for the fourth quarter of 2017 included a
    gain on sale of senior living communities of $7.3 million, or $0.15
    per diluted share, in connection with the sale of two senior living
    communities in December 2017 to SNH, which Five Star is currently
    managing for SNH, a benefit from income taxes of $3.2 million, or
    $0.07 per diluted share, resulting primarily from Five Star's
    monetization of alternative minimum tax credits, $1.5 million, or
    $0.03 per diluted share, for estimated revenue reserves, penalties and
    fees related to the Compliance Assessment, and $1.6 million, or $0.03
    per diluted share, related to long lived asset impairment Five Star
    recorded to reduce the carrying value of one senior living community
    classified as held for sale at December 31, 2017 to its estimated fair
    value less costs to sell, which community was subsequently sold in
    June 2018 to SNH. Five Star is currently managing this community for
    SNH.
  • Earnings before interest, taxes, depreciation and amortization, or
    EBITDA, for the fourth quarter of 2018 was $(13.7) million compared to
    $5.8 million for the same period in 2017. EBITDA excluding certain
    items, or Adjusted EBITDA, was $(12.9) million and $2.1 million for
    the fourth quarters of 2018 and 2017, respectively. A reconciliation
    of net loss determined in accordance with U.S. generally accepted
    accounting principles, or GAAP, to EBITDA and Adjusted EBITDA for the
    quarters ended December 31, 2018 and 2017 appears later in this press
    release.

Operating Results for the quarter ended December 31,
2018:

  • Occupancy at owned and leased senior living communities for the fourth
    quarter of 2018 increased 30 basis points to 82.9% from 82.6% for the
    same period in 2017.
  • Average monthly rates at owned and leased senior living communities
    for the fourth quarter of 2018 increased 1.2% to $4,710 from $4,653
    for the same period in 2017.
  • The percentage of revenue derived from residents' private resources at
    owned and leased senior living communities was 77.7% for the fourth
    quarter of each of 2018 and 2017.

Financial Results for the year ended December 31,
2018:

  • Senior living revenue for the year ended December 31, 2018 decreased
    2.5% to $1.09 billion from $1.12 billion for the same period in
    2017, primarily due to the sale of six senior living communities
    between December 2017 and June 2018 to SNH, which Five Star is
    currently managing for SNH, the sale of one SNF in June 2018 to a
    third party, which Five Star had previously leased from SNH, and a
    decrease in occupancy, partially offset by increases in average
    monthly rates to residents who pay privately for services and revenues
    from ancillary services, such as rehabilitation and wellness services,
    as well as an estimated $0.9 million revenue reserve recorded in the
    fourth quarter of 2017 in connection with the Compliance Assessment.
    Management fee revenue for the year ended December 31, 2018 increased
    7.6% to $15.1 million, primarily due to an increase in the number of
    managed communities compared to the same period in 2017.
  • Net loss for the year ended December 31, 2018 was $74.1 million, or
    $1.49 per diluted share, compared to net loss of $20.9 million, or
    $0.42 per diluted share, for the same period in 2017. Net loss for the
    year ended December 31, 2018 included a gain on sale of senior living
    communities of $7.1 million, or $0.14 per diluted share, primarily due
    to the sale of four senior living communities in 2018 to SNH, which
    Five Star is currently managing for SNH. Net loss for the year ended
    December 31, 2018 also included $0.8 million, or $0.02 per diluted
    share, of net severance costs incurred in December 2018 related to two
    former executive officers. Net loss for December 31, 2017 included a
    gain on sale of senior living communities of $7.3 million, or $0.06
    per diluted share, in connection with the sale of two senior living
    communities in December 2017 to SNH, which Five Star is currently
    managing for SNH, a benefit for income taxes of $4.5 million, or $0.09
    per diluted share, resulting primarily from Five Star's monetization
    of alternative minimum tax credits, $1.5 million, or $0.03 per diluted
    share, for estimated revenue reserves, penalties and fees related to
    the Compliance Assessment and $2.1 million, or $0.04 per diluted
    share, primarily related to long lived asset impairment Five Star
    recorded to reduce the carrying value of one senior living community
    classified as held for sale at December 31, 2017 to its estimated fair
    value less costs to sell, which community was subsequently sold in
    June 2018 to SNH. Five Star is currently managing this community for
    SNH.
  • EBITDA for the year ended December 31, 2018 was $(35.7) million
    compared to $16.3 million for the same period in 2017. Adjusted EBITDA
    for the year ended December 31, 2018 was $(41.1) million compared to
    $12.1 million for the same period in 2017. A reconciliation of net
    loss determined in accordance with GAAP to EBITDA and Adjusted EBITDA
    for the years ended December 31, 2018 and 2017 appears later in this
    press release.

Other:

  • In November 2018, Five Star began managing for SNH a senior living
    community located in Colorado with 239 living units pursuant to a
    management agreement with SNH.

Going Concern:

  • Five Star faces challenges that are currently negatively impacting its
    revenues, expenses, cash flows and results from operations, and Five
    Star expects these challenges to continue at least through 2019. These
    conditions raise substantial doubt about Five Star's ability to
    continue as a going concern. Based on Five Star's cash balance at
    December 31, 2018 and projected cash needs for the next 12 months,
    Five Star's management believes that Five Star will need to increase
    its revenues, reduce its costs, renew or replace its existing credit
    facility, reduce its operating leverage and/or pursue other
    transactions to be able to continue to fund its operating and capital
    requirements and meet its debt covenant obligations.
  • Five Star currently operates 260 senior living communities under lease
    and management arrangements with SNH, which represents approximately
    91.5% of the total communities Five Star operates. In order to address
    Five Star's operating and liquidity issues, Five Star's Independent
    Directors and SNH's independent trustees are currently evaluating Five
    Star's arrangements with SNH. As a result, there may be changes to
    Five Star's arrangements with SNH which could positively impact Five
    Star's ability to continue as a going concern in the future.
    Nevertheless, Five Star cannot be sure that it will reach any
    agreement with SNH to change any of Five Star's arrangements with them
    or that any change in Five Star's arrangements with SNH will
    positively impact Five Star's ability to continue as a going concern
    in the future.

Conference Call:

At 10:00 a.m. Eastern Time this morning, President and Chief Executive
Officer, Katherine Potter, and Executive Vice President, Chief Financial
Officer and Treasurer, Richard Doyle, will host a conference call to
discuss Five Star's fourth quarter and full year 2018 financial results.

The conference call telephone number is (877) 329-4332. Participants
calling from outside the United States and Canada should dial (412)
317-5436. No pass code is necessary to access the call from either
number. Participants should dial in about 15 minutes prior to the
scheduled start of the call. A replay of the conference call will be
available through 11:59 p.m. on Wednesday, March 13, 2019. To access the
replay, dial (412) 317-0088. The replay pass code is 10127650.

A live audio webcast of the conference call will also be available in a
listen-only mode on Five Star's website, which is located at www.fivestarseniorliving.com. Participants
wanting to access the webcast should visit Five Star's website about
five minutes before the call. The archived webcast will be available for
replay on Five Star's website following the call for about a week. The
transcription, recording and retransmission in any way of
Five
Star's
fourth quarter 2018 conference call are
strictly prohibited without the prior written consent of Five
Star.
Five Star's website is not incorporated as part of this press
release.

About Five Star Senior Living Inc.:

Five Star Senior Living Inc. is a senior living and healthcare services
company. As of December 31, 2018, Five Star operated 284 senior living
communities with 32,106 living units located in 32 states, including 208
communities (22,250 living units) that it owned or leased and 76
communities (9,766 living units) that it managed. These communities
include independent living, assisted living, continuing care retirement
communities and skilled nursing communities. Five Star is headquartered
in Newton, Massachusetts.

WARNING CONCERNING FORWARD LOOKING STATEMENTS

THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER FIVE STAR
USES WORDS SUCH AS "BELIEVE", "EXPECT", "ANTICIPATE", "INTEND", "PLAN",
"ESTIMATE", "WILL", "MAY" AND NEGATIVES OR DERIVATIVES OF THESE OR
SIMILAR EXPRESSIONS, FIVE STAR IS MAKING FORWARD LOOKING STATEMENTS.
THESE FORWARD LOOKING STATEMENTS ARE BASED UPON FIVE STAR'S PRESENT
INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT
GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY FIVE STAR'S FORWARD
LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS, INCLUDING:

  • STATEMENTS ABOUT THE CURRENT EVALUATION BY FIVE STAR'S INDEPENDENT
    DIRECTORS AND SNH'S INDEPENDENT TRUSTEES REGARDING FIVE STAR'S LEASE
    AND MANAGEMENT ARRANGEMENTS WITH SNH MAY IMPLY THAT THERE WILL BE
    AGREED CHANGES TO FIVE STAR'S ARRANGEMENTS WITH SNH IN THE FUTURE,
    THAT FIVE STAR'S OPERATING RESULTS AND FINANCIAL CONDITION WILL
    IMPROVE AS A RESULT AND THAT FIVE STAR WILL BE ABLE TO CONTINUE AS A
    GOING CONCERN. FIVE STAR CANNOT BE SURE THAT IT WILL REACH ANY
    AGREEMENT WITH SNH TO CHANGE ANY OF FIVE STAR'S ARRANGEMENTS WITH SNH
    OR THAT ANY CHANGE IN FIVE STAR'S ARRANGEMENTS WITH SNH WILL
    POSITIVELY IMPACT FIVE STAR'S ABILITY TO CONTINUE AS A GOING CONCERN
    IN THE FUTURE.
  • ANY ACTIONS FIVE STAR MAY TAKE TO ADDRESS THE CURRENT SUBSTANTIAL
    DOUBT AS TO ITS ABILITY TO CONTINUE AS A GOING CONCERN MAY NOT BE
    SUCCESSFUL. FURTHER, ANY SUCH ACTIONS THAT MAY ADDRESS THAT CONCERN
    MAY ONLY PROVIDE RELIEF IN THE SHORT TERM AND COULD INCREASE FIVE
    STAR'S FUTURE COSTS AND THEREBY PREVENT OR LIMIT ITS ABILITY TO
    OPERATE PROFITABLY IN THE INTERMEDIATE OR LONGER TERM.

THE INFORMATION CONTAINED IN FIVE STAR'S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER "RISK FACTORS" IN FIVE
STAR'S PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER
IMPORTANT FACTORS THAT COULD CAUSE FIVE STAR'S ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE STATED IN OR IMPLIED BY FIVE STAR'S FORWARD
LOOKING STATEMENTS. FIVE STAR'S FILINGS WITH THE SEC ARE AVAILABLE ON
THE SEC'S WEBSITE AT WWW.SEC.GOV.

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.

EXCEPT AS REQUIRED BY LAW, FIVE STAR DOES NOT INTEND TO UPDATE OR CHANGE
ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE
EVENTS OR OTHERWISE.

         

FIVE STAR SENIOR LIVING INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share data)
(unaudited)

 
Three Months Ended Year Ended
December 31, December 31,
2018       2017   2018       2017  
Revenues:
Senior living revenue $ 276,296 $ 279,238 $ 1,094,404 $ 1,122,176
Management fee revenue 3,737 3,549 15,145 14,080
Reimbursed costs incurred on behalf of managed communities 72,836   65,504   280,845   259,850  
Total revenues 352,869   348,291   1,390,394   1,396,106  
Operating expenses:
Senior living wages and benefits 144,346 137,900 563,263 551,096
Other senior living operating expenses 74,937 74,365 301,239 293,425
Costs incurred on behalf of managed communities 72,836 65,504 280,845 259,850
Rent expense 52,510 52,007 209,150 206,531
General and administrative expenses 20,784 18,479 78,189 75,212
Depreciation and amortization expense 8,965 9,152 35,939 38,192
Gain on sale of senior living communities (7,258 ) (7131 ) (7,258 )
Long lived asset impairment 96   1,584   461   2,112  
Total operating expenses 374,474   351,733   1,461,955   1,419,160  
 
Operating loss (21,605 ) (3,442 ) (71,561 ) (23,054 )
 
Interest, dividend and other income 241 206 818 765
Interest and other expense (1,245 ) (1,108 ) (3,018 ) (4,308 )
Gain on early extinguishment of debt 143
Unrealized loss on equity investments (817 ) (690 )
Realized gain on sale of debt and equity investments, net of tax 107   57   99   408  
 
Loss before income taxes and equity in earnings of an investee (23,319 ) (4,287 ) (74,352 ) (26,046 )
Benefit (provision) for income taxes 27 3,206 (247 ) 4,536
Equity in earnings of an investee, net of tax (366 ) 75   516   608  
Net loss $ (23,658 ) $ (1,006 ) $ (74,083 ) $ (20,902 )
 
Weighted average shares outstanding—basic and diluted 49,818   49,215   49,687   49,204  
 
Net loss per share—basic and diluted $ (0.47 ) $ (0.02 ) $ (1.49 ) $ (0.42 )
 
         

FIVE STAR SENIOR LIVING INC.
CONSOLIDATED BALANCE SHEETS
(in
thousands)

(unaudited)

 
December 31, December 31,
2018 2017
Assets
Current assets:
Cash and cash equivalents $ 29,512 $ 26,255
Accounts receivable, net of allowance 37,758 38,673
Due from related persons 7,855 4,774
Investments 20,179 22,524
Restricted cash 19,720 20,747
Prepaid expenses and other current assets 23,029 25,132
Assets held for sale   59,080  
Total current assets 138,053   197,185  
 
Property and equipment, net 243,873 251,504
Equity investment of an investee 8,633 8,185
Restricted cash 923 1,476
Restricted investments 8,073 10,758
Other long term assets 6,069   6,800  
Total assets $ 405,624   $ 475,908  
 
Liabilities and Shareholders' Equity
Current liabilities:
Revolving credit facility $ 51,484 $
Accounts payable and accrued expenses 69,667 74,734
Accrued compensation and benefits 35,421 37,893
Due to related persons 18,883 18,683
Mortgage notes payable 339 316
Accrued real estate taxes 12,959 11,801
Security deposits and current portion of continuing care contracts 3,468 4,073
Other current liabilities 37,472 36,361
Liabilities held for sale   34,781  
Total current liabilities 229,693   218,642  
 
Long term liabilities:
Mortgage notes payable 7,533 7,872
Accrued self insurance obligations 33,030 33,082
Deferred gain on sale and leaseback transaction 59,478 66,087
Other long term liabilities 4,721   5,231  
Total long term liabilities 104,762   112,272  
 
Shareholders' equity:

Common stock, par value $.01: 75,000,000 shares authorized,
50,852,052 and 50,524,424 shares issued and outstanding at
December 31, 2018 and 2017, respectively

508 505
Additional paid in capital 361,555 360,942
Accumulated deficit (292,636 ) (220,489 )
Accumulated other comprehensive income 1,742   4,036  
Total shareholders' equity 71,169   144,994  
Total liabilities and shareholders' equity $ 405,624   $ 475,908  
 
     

FIVE STAR SENIOR LIVING INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
thousands)

(unaudited)

 
Year Ended December 31,
2018       2017  
Cash flows from operating activities:
Net loss $ (74,083 ) $ (20,902 )
Adjustments to reconcile net loss to cash provided by (used in)
operating activities:
Depreciation and amortization expense 35,939 38,192
Gain on sale of senior living communities (7,131 ) (7,258 )
Gain on early extinguishment of debt (166 )
Unrealized loss on equity investments 690
Realized gain on sale of debt and equity investments (99 ) (408 )
Loss on disposal of property and equipment 16 277
Long lived asset impairment 461 2,112
Equity in earnings of an investee, net of tax (516 ) (608 )
Stock based compensation 616 1,094
Provision for losses on receivables 4,904 4,697
Amortization of deferred gain on sale and leaseback transaction (6,609 ) (6,608 )
Other noncash expense adjustments, net 1,192 703
Changes in assets and liabilities:
Accounts receivable (3,989 ) (5,046 )
Prepaid expenses and other assets 1,535 (10,650 )
Accounts payable and accrued expenses (4,211 ) 6,306
Accrued compensation and benefits (2,472 ) 1,954
Due (from) to related persons, net (1,683 ) 11,439
Other current and long term liabilities 1,217   1,120  
Cash (used in) provided by operating activities (54,223 ) 16,248  
 
Cash flows from investing activities:
Acquisition of property and equipment (48,980 ) (71,095 )
Purchases of investments (5,297 ) (14,409 )
Proceeds from sale of property and equipment 17,956 39,800
Proceeds from sale of land 750
Proceeds from sale of communities 31,819 39,076
Proceeds from sale of investments 9,438   22,382  
Cash provided by investing activities 4,936   16,504  
 
Cash flows from financing activities:
Proceeds from borrowings on revolving credit facility 76,484 65,000
Repayments of borrowings on revolving credit facility (25,000 ) (65,000 )
Repayments of mortgage notes payable (509 ) (16,766 )
Prepayment fees on early extinguishment of debt (132 )
Payment of deferred financing fees (1,889 )
Payment of employee tax obligations on withheld shares (11 ) (66 )
Cash provided by (used in) financing activities 50,964   (18,853 )
 
Cash flows from discontinued operations:
Net cash provided by operating activities   1,003  
Net cash flows provided by discontinued operations   1,003  
 
Change in cash and cash equivalents and restricted cash 1,677 14,902
Cash and cash equivalents and restricted cash at beginning of period 48,478   33,576  
Cash and cash equivalents and restricted cash at end of period $ 50,155   $ 48,478  
 
Reconciliation of cash and cash equivalents and restricted cash
Cash and cash equivalents $ 29,512 $ 26,255
Restricted cash 20,643   22,223  
Cash and cash equivalents and restricted cash at end of period $ 50,155   $ 48,478  
 
Supplemental cash flow information:
Cash paid for interest $ 1,577 $ 3,932
Cash paid (received) for income taxes, net $ 311 $ (1,399 )
 
Non-cash activities:
Real estate sales $ 33,364 $
Mortgage notes assumed by purchaser in real estate sales $ 33,364 $
 
 

FIVE STAR SENIOR LIVING INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(in thousands)
(unaudited)

 

Non-GAAP financial measures are financial measures that are not
determined in accordance with GAAP. Five Star believes the non-GAAP
financial measures presented in the table below are meaningful
supplemental disclosures because they may help investors gain a
better understanding of changes in Five Star's operating results and
its ability to pay rent or service debt, make capital expenditures
and expand its business. These non-GAAP financial measures also may
help investors make comparisons between Five Star and other
companies on both a GAAP and a non-GAAP basis. Five Star believes
that EBITDA and Adjusted EBITDA are meaningful financial measures
that may help investors better understand its financial performance,
including by allowing investors to compare Five Star's performance
between periods and to the performance of other companies. EBITDA
and Adjusted EBITDA are used by management to evaluate Five Star's
financial performance and compare Five Star's performance over time
and to the performance of other companies. Five Star calculates
EBITDA and Adjusted EBITDA as shown below. These measures should not
be considered as alternatives to net income (loss) or operating
income (loss), as indicators of Five Star's operating performance or
as measures of Five Star's liquidity. Also, EBITDA and Adjusted
EBITDA as presented may not be comparable to similarly titled
amounts calculated by other companies.
 
Five Star believes that net income (loss) is the most directly
comparable financial measure, determined according to GAAP, to Five
Star's presentation of EBITDA and Adjusted EBITDA. The following
table presents the reconciliation of these non-GAAP financial
measures to net loss for the three months and years ended December
31, 2018 and 2017.
         
Three Months Ended Year Ended
December 31, December 31,
2018     2017 2018     2017
Net loss $ (23,658 ) $ (1,006 ) $ (74,083 ) $ (20,902 )
Add (less):
Interest and other expense 1,245 1,108 3,018 4,308
(Benefit) provision for income taxes (1) (27 ) (3,206 ) 247 (4,536 )
Depreciation and amortization expense 8,965 9,152 35,939 38,192
Interest, dividend and other income (241 ) (206 ) (818 ) (765 )
EBITDA (13,716 ) 5,842   (35,697 ) 16,297  
Add (less):
Long lived asset impairment 96 1,584 461 2,112
Costs related to compliance assessment 1,546 (106 ) 1,546
Severance, net (2) 756 756
Employee litigation matter 345 605 345
Litigation recovery (800 )
Gain on sale of senior living communities (7,258 ) (7,131 ) (7,258 )
Gain on early extinguishment of debt       (143 )
Adjusted EBITDA $ (12,864 ) $ 2,059   $ (41,112 ) $ 12,099  
 
(1)   2017 data includes Five Star's monetization of alternative minimum
tax credits.
(2) Represents an aggregate $1.7 million of severance costs related to
two former executive officers, net of $0.9 million of previously
accrued compensation and benefits expense related to these former
employees.
 
         

FIVE STAR SENIOR LIVING INC.
SENIOR LIVING COMMUNITY
FINANCIAL DATA(1)
(in thousands)
(unaudited)

 
Three Months Ended Year Ended
December 31, December 31,
2018     2017 2018     2017
Senior living revenue:
Independent and assisted living community revenue (owned) $ 18,456 $ 23,703 $ 76,040 $ 95,148
Independent and assisted living community revenue (leased) 108,669 108,330 431,461 434,111
Continuing care retirement community revenue (leased) 97,473 97,631 387,184 391,364
Skilled nursing facility revenue (leased) (2) 42,229 41,389 164,290 170,717
Ageility physical therapy revenue 9,469   8,185   35,429   30,836  
Total senior living revenue $ 276,296   $ 279,238   $ 1,094,404   $ 1,122,176  
 
Senior living wages and benefits:
Independent and assisted living community wages and benefits (owned) $ 8,722 $ 9,973 $ 34,504 $ 39,664
Independent and assisted living community wages and benefits (leased) 50,591 46,790 194,652 186,434
Continuing care retirement community wages and benefits (leased) 51,054 49,547 202,556 199,141
Skilled nursing facility wages and benefits (leased) 28,485 27,236 110,113 108,053
Ageility physical therapy wages and benefits 6,654 5,719 24,243 20,972
Insurance and other (3) (1,160 ) (1,365 ) (2,805 ) (3,168 )
Total senior living wages and benefits $ 144,346   $ 137,900   $ 563,263   $ 551,096  
 
Other senior living operating expenses:
Independent and assisted living community other operating expenses
(owned)
$ 5,447 $ 6,500 $ 22,450 $ 25,344
Independent and assisted living community other operating expenses
(leased)
29,722 27,732 115,904 108,676
Continuing care retirement community other operating expenses
(leased)
27,225 25,591 108,931 102,994
Skilled nursing facility other operating expenses (leased) (4) 11,209 11,744 48,065 46,752
Ageility physical therapy other operating expenses 938 622 2,848 2,048
Insurance and other (3) 396   2,176   3,041   7,611  
Total other senior living operating expenses $ 74,937   $ 74,365   $ 301,239   $ 293,425  
 
(1)   Excludes data for managed communities.
(2) Skilled nursing facility revenue (leased) for the year ended
December 31, 2018 includes a $0.1 million reversal of estimated
revenue reserves related to the Compliance Assessment. Skilled
nursing facility revenue (leased) for the three months and year
ended December 31, 2017 includes an estimated $0.9 million revenue
reserve related to the Compliance Assessment.
(3) Insurance and other expenses primarily relate to Five Star's captive
insurance company subsidiary, which mainly participates in Five
Star's workers' compensation and professional and general liability
insurance programs. Credit balances in senior living wages and
benefits for insurance and other represent premiums earned by Five
Star's captive insurance company subsidiary in excess of expenses
recorded in the applicable period.
(4) Skilled nursing facility other operating expenses (leased) for the
three months and year ended December 31, 2017 includes $0.7 million
expense for estimated penalties, compliance costs and professional
fees related to the Compliance Assessment.
 
         

FIVE STAR SENIOR LIVING INC.
COMPARABLE SENIOR LIVING
COMMUNITY FINANCIAL DATA(1)
(in thousands)
(unaudited)

 
Three Months Ended Year Ended
December 31, (2) December 31, (3)
2018     2017 2018     2017
Senior living revenue:
Independent and assisted living community revenue (owned) $ 18,456 $ 18,525 $ 73,563 $ 73,961
Independent and assisted living community revenue (leased) 108,669 108,330 431,461 434,111
Continuing care retirement community revenue (leased) 97,473 97,631 387,184 391,364
Skilled nursing facility revenue (leased)(4) 42,228 39,632 161,227 163,200
Ageility physical therapy revenue 7,631   8,100   28,027   29,250  
Total senior living revenue $ 274,457   $ 272,218   $ 1,081,462   $ 1,091,886  
 
Senior living wages and benefits:
Independent and assisted living community wages and benefits (owned) $ 8,729 $ 8,131 $ 33,611 $ 32,357
Independent and assisted living community wages and benefits (leased) 50,591 46,790 194,652 186,434
Continuing care retirement community wages and benefits (leased) 51,054 49,547 202,556 199,141
Skilled nursing facility wages and benefits (leased) 28,485 26,112 108,065 103,160
Ageility physical therapy wages and benefits 5,357 5,645 19,218 19,865
Insurance and other (5) (1,160 ) (1,365 ) (2,805 ) (3,168 )
Total senior living wages and benefits $ 143,056   $ 134,860   $ 555,297   $ 537,789  
 
Other senior living operating expenses:
Independent and assisted living community other operating expenses
(owned)
$ 5,480 $ 5,147 $ 21,548 $ 19,998
Independent and assisted living community other operating expenses
(leased)
29,722 27,732 115,904 108,676
Continuing care retirement community other operating expenses
(leased)
27,225 25,591 108,931 102,994
Skilled nursing facility other operating expenses (leased) (6) 11,173 11,180 46,901 44,112
Ageility physical therapy other operating expenses 764 563 2,296 1,827
Insurance and other (5) 396   2,176   3,041   7,611  
Total other senior living operating expenses $ 74,760   $ 72,389   $ 298,621   $ 285,218  
 
(1)   Excludes data for managed communities.
(2) Includes data for senior living communities that Five Star has owned
or leased continuously since October 1, 2017.
(3) Includes data for senior living communities that Five Star has owned
or leased continuously since January 1, 2017.
(4) Skilled nursing facility revenue (leased) for the year ended
December 31, 2018 includes a $0.1 million reversal of estimated
revenue reserves related to the Compliance Assessment. Skilled
nursing facility revenue (leased) for the three months and year
ended December 31, 2017 includes an estimated $0.9 million revenue
reserve related to the Compliance Assessment.
(5) Insurance and other expenses primarily relate to Five Star's captive
insurance company subsidiary, which mainly participates in Five
Star's workers' compensation and professional and general liability
insurance programs. Credit balances in senior living wages and
benefits for insurance and other represent premiums earned by Five
Star's captive insurance company subsidiary in excess of expenses
recorded in the applicable period.
(6) Skilled nursing facility other operating expenses (leased) for the
three months and year ended December 31, 2017 includes $0.7 million
expense for estimated penalties, compliance costs and professional
fees related to the Compliance Assessment.
 
   

FIVE STAR SENIOR LIVING INC.
SENIOR LIVING OTHER OPERATING
DATA
(unaudited)

 
Three Months Ended
December 31,   September 30,   June 30,   March 31,   December 31,
2018 2018 2018 2018 2017
Independent and assisted living communities (owned):(1)
Number of communities (end of period) 20 20 20 22 24
Number of units (end of period) 2,108 2,108 2,108 2,259 2,474
Occupancy(2) 82.3 % 81.5 % 81.1 % 80.7 % 82.7 %
Avg. monthly rate(3) $ 3,458 $ 3,442 $ 3,392 $ 3,464 $ 3,408
 
Independent and assisted living communities (leased):
Number of communities (end of period) 128 128 128 128 128
Number of units (end of period) 10,520 10,520 10,519 10,510 10,507
Occupancy(2) 84.2 % 83.7 % 83.6 % 83.4 % 84.4 %
Avg. monthly rate(3) $ 3,991 $ 3,991 $ 4,024 $ 4,070 $ 3,978
 
Continuing care retirement communities (leased):
Number of communities (end of period) 31 31 31 31 31
Number of units (end of period)(4) 7,117 7,157 7,158 7,158 7,159
Occupancy(2) 82.9 % 81.3 % 80.6 % 81.5 % 81.8 %
Avg. monthly rate(3) $ 5,383 $ 5,427 $ 5,433 $ 5,584 $ 5,433
 
Skilled nursing facilities (leased):
Number of communities (end of period) 29 29 29 30 30
Number of units (end of period)(5) 2,505 2,505 2,505 2,602 2,602
Occupancy(2) 77.9 % 76.9 % 74.7 % 75.7 % 77.8 %
Avg. monthly rate(3) $ 7,049 $ 6,874 $ 6,926 $ 6,951 $ 6,721
                       
Total senior living communities (owned and leased):
Number of communities (end of period) 208 208 208 211 213
Number of units (end of period) 22,250 22,290 22,290 22,529 22,742
Occupancy(2) 82.9 % 82.0 % 81.4 % 81.7 % 82.6 %
Avg. monthly rate(3)     $ 4,710     $ 4,701     $ 4,709     $ 4,796     $ 4,653  
 
Managed communities:(1)
Number of communities (end of period) 76 75 75 72 70
Number of units (end of period)(6) 9,766 9,515 9,510 9,258 9,043
Occupancy(2) 86.5 % 86.7 % 86.1 % 86.0 % 86.0 %
Avg. monthly rate(3) $ 4,149 $ 4,164 $ 4,242 $ 4,301 $ 4,254
 
Other ancillary services:
Number of ageility physical therapy inpatient clinics (end of period) 47 47 47 47 47
Number of ageility physical therapy outpatient clinics (end of
period)
128 120 111 108 92
Number of home health communities served (end of period) 10 12 12 12 15
 
(1)   Occupancy and average monthly rate for the three months ended
December 31, 2017, March 31, 2018 and June 30, 2018 include data for
the senior living communities that were sold to SNH during those
periods as owned until the time of sale and as managed from the time
of sale through the end of such periods.
(2) Includes living units categorized as in service. As a result, the
number of living units may change from period to period for reasons
other than the acquisition or disposition of senior living
communities.
(3) Average monthly rate is calculated by taking the average daily rate,
which is defined as total operating revenues for senior living
services divided by occupied units during the period, and
multiplying it by 30 days.
(4) Includes 1,916 skilled nursing units in communities where assisted
living and independent living services are the predominant services
provided.
(5) Includes 76 assisted living and independent living units in
communities where skilled nursing services are the predominant
services provided.
(6) Includes 427 skilled nursing units in communities where assisted
living and independent living services are the predominant services
provided.
 
         

FIVE STAR SENIOR LIVING INC.
PERCENT BREAKDOWN OF SENIOR
LIVING COMMUNITY REVENUE(1)
(unaudited)

 
Three Months Ended Year Ended
December 31, December 31,
2018     2017 2018     2017
Independent and assisted living communities (owned):
Private and other sources 98.7 % 99.2 % 98.7 % 99.0 %
Medicaid 1.3 % 0.8 % 1.3 % 1.0 %
Total 100.0 % 100.0 % 100.0 % 100.0 %
 
Independent and assisted living communities (leased):
Private and other sources 98.8 % 98.9 % 98.9 % 99.0 %
Medicaid 1.2 % 1.1 % 1.1 % 1.0 %
Total 100.0 % 100.0 % 100.0 % 100.0 %
 
Continuing care retirement communities (leased):
Private and other sources 74.3 % 74.1 % 74.1 % 73.9 %
Medicare 17.5 % 18.4 % 18.1 % 19.0 %
Medicaid 8.2 % 7.5 % 7.8 % 7.1 %
Total 100.0 % 100.0 % 100.0 % 100.0 %
 
Skilled nursing facilities (leased):
Private and other sources 22.0 % 19.1 % 21.0 % 21.7 %
Medicare 17.1 % 18.9 % 18.2 % 20.5 %
Medicaid 60.9 % 62.0 % 60.8 % 57.8 %
Total 100.0 % 100.0 % 100.0 % 100.0 %
 
Total senior living communities (owned and leased):
Private and other sources 77.7 % 77.7 % 77.7 % 77.8 %
Medicare 9.1 % 9.5 % 9.4 % 10.0 %
Medicaid 13.2 % 12.8 % 12.9 % 12.2 %
Total 100.0 % 100.0 % 100.0 % 100.0 %
 
(1)   Excludes data for managed communities.

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