Note 7 - Long-term Leases

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Leases of Lessee Disclosure [Text Block]

Note 7 – Long-Term Leases

Operating Leases

At March 31, 2020, we leased from NHI the real property of 35 skilled nursing facilities, seven assisted living centers and three independent living centers under two separate lease agreements. As part of the first lease agreement, we sublease four Florida skilled nursing facilities to a third-party operator. Base rent expense under both NHI lease agreements totals $34,200,000 annually with rent thereafter escalating by 4% of the increase in facility revenue over a base year. Total facility rent expense to NHI was $9,655,000 and $9,515,000 for the three months ended March 31, 2020 and 2019, respectively.

Finance Leases

At March 31, 2020, we leased and operated three senior healthcare facilities in the state of Missouri under three separate lease agreements. Two of the healthcare facilities are skilled nursing facilities that also include assisted living facilities and the third healthcare facility is a memory care facility. Each of the leases is a ten-year lease with two five–year renewal options. Under the terms of the leases, base rent totals $5,200,000 annually with rent thereafter escalating by 4% of the increase in facility revenue over the 2014 base year.

Minimum Lease Payments

The following table summarizes the maturity of our finance and operating lease liabilities as of March 31, 2020 (in thousands):

	Finance Leases			Operating Leases
2020	$	5,200		$	35,495
2021		5,200			35,169
2022		5,200			34,748
2023		4,766			34,430
2024		-			34,279
Thereafter		-			65,600
Total minimum lease payments		20,366			239,721
Less: amounts representing interest		(2,256	)		(42,761	)
Present value of future minimum lease payments		18,110			196,960
Less: current portion		(4,228	)		(24,557	)
Noncurrent lease liabilities	$	13,882		$	172,403