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Summary of Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2013
Summary of Significant Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for quarterly reports on Form 10-Q. In the opinion of management, these financial statements include all adjustments necessary to present fairly the financial position, results of operations and cash flows of the Company as of June 30, 2013, and for all periods presented. The condensed consolidated financial statements are prepared on the accrual basis of accounting. All adjustments made have been of a normal and recurring nature. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The Company believes that the disclosures included are adequate and provide a fair presentation of interim period results. Interim financial statements are not necessarily indicative of the financial position or operating results for an entire year. It is suggested that these interim financial statements be read in conjunction with the audited financial statements and the notes thereto, together with management's discussion and analysis of financial condition and results of operations, included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012, as filed with the Securities and Exchange Commission.
Revenue Recognition
Revenue Recognition

Resident Fees

Resident fee revenue is recorded when services are rendered and consists of fees for basic housing, support services and fees associated with additional services such as personalized health and assisted living care. Residency agreements are generally for a term of 30 days to one year, with resident fees billed monthly in advance. Revenue for certain skilled nursing services and ancillary charges is recognized as services are provided and is billed monthly in arrears.

Entrance Fees

Certain of the Company's communities have residency agreements which require the resident to pay an upfront entrance fee prior to occupying the community.  In addition, in connection with the Company's MyChoice program, new and existing residents are allowed to pay additional entrance fee amounts in return for a reduced monthly service fee.  The non-refundable portion of the entrance fee is recorded as deferred entrance fee revenue and amortized over the estimated stay of the resident based on an actuarial valuation.  The refundable portion of a resident's entrance fee is generally refundable within a certain number of months or days following contract termination or upon the sale of the unit, or in certain agreements, upon the resale of a comparable unit or 12 months after the resident vacates the unit.  In such instances the refundable portion of the fee is not amortized and included in refundable entrance fees and deferred revenue.  All refundable amounts due to residents at any time in the future are classified as current liabilities.
 

 
Management Fees

Management fee revenue is recorded as services are provided to the owners of the communities. Revenues are determined by an agreed upon percentage of gross revenues (as defined).

Reimbursed Costs Incurred on Behalf of Managed Communities

The Company manages certain communities under contracts which provide for payment to the Company of a monthly management fee plus reimbursement of certain operating expenses.  Where the Company is the primary obligor with respect to any such operating expenses, the Company recognizes revenue when the goods have been delivered or the service has been rendered and the Company is due reimbursement.  Such revenue is included in "reimbursed costs incurred on behalf of managed communities" on the condensed consolidated statements of operations.  The related costs are included in "costs incurred on behalf of managed communities" on the condensed consolidated statements of operations.
Fair Value of Financial Instruments
Fair Value of Financial Instruments

The Financial Accounting Standards Board ("FASB") issued Accounting Standards Codification ("ASC") 820 – Fair Value Measurements ("ASC 820"), which establishes a three-level valuation hierarchy for disclosure of fair value measurements.  The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.  A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  The three levels are defined as follows:

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Cash and cash equivalents and cash and escrow deposits-restricted are reflected in the accompanying condensed consolidated balance sheets at amounts considered by management to reasonably approximate fair value due to the short maturity.  Management estimates the fair value of its long-term debt using a discounted cash flow analysis based upon the Company's current borrowing rate for debt with similar maturities and collateral securing the indebtedness.  The Company had outstanding debt with a carrying value and estimated fair value of approximately $2.6 billion and $2.7 billion as of June 30, 2013 and December 31, 2012, respectively. The Company's fair value of debt disclosure is classified within Level 2 of the valuation hierarchy.
Self-Insurance Liability Accruals
Self-Insurance Liability Accruals

The Company is subject to various legal proceedings and claims that arise in the ordinary course of its business. Although the Company maintains general liability and professional liability insurance policies for its owned, leased and managed communities under a master insurance program, the Company's current policies provide for deductibles for each and every claim.  As a result, the Company is, in effect, self-insured for claims that are less than the deductible amounts.  In addition, the Company maintains a large-deductible workers compensation program and a self-insured employee medical program. The Company reviews the adequacy of its accruals related to these liabilities on an ongoing basis, using historical claims, actuarial valuations, third party administrator estimates, consultants, advice from legal counsel and industry data, and adjusts accruals periodically. Estimated costs related to these self-insurance programs are accrued based on known claims and projected claims incurred but not yet reported. Subsequent changes in actual experience are monitored and estimates are updated as information is available.
Cumulative Effect Adjustment
Cumulative Effect Adjustment

In July 2012, the FASB issued ASU 2012-01, Continuing Care Retirement Communities — Refundable Advance Fees ("ASU 2012-01").  ASU 2012-01 amends the situations in which recognition of deferred revenue for refundable advance fees is appropriate.  Under this amendment, refundable advance fees that are contingent upon reoccupancy by a subsequent resident but are not limited to the proceeds of reoccupancy should be accounted for and reported as a liability.  The guidance in ASU 2012-01 is effective for public companies for fiscal years, and interim periods within those years, beginning after December 15, 2012.  The Company adopted the provisions of this update as of January 1, 2013 and incorporated the provisions of this update to its consolidated financial statements through retrospective application to all periods presented and a cumulative effect adjustment to the Company's accumulated deficit as of January 1, 2013.

The effect of this change in accounting was not material to the consolidated results of operations or financial position for any period, including the three and six months ended June 30, 2013 and 2012, and did not impact cash flows from operations in any period.  The Company increased its accumulated deficit by $5.7 million to reflect the net cumulative effect of the adoption of ASU 2012-01.

The related adjustments will be made to the applicable prior periods as such financial information is included in future filings with the SEC, but no later than the filing of the Company's Annual Report on Form 10-K for the year ending December 31, 2013.  The impact of all adjustments made to the prior annual consolidated financial statements is summarized as follows (dollars in thousands):
 
 
As of and for the Year Ended December 31, 2012
 
 
As Reported
 
 
Adjustment
 
 
As Adjusted
 
Consolidated Balance Sheets
 
 
 
 
 
 
Refundable entrance fees and deferred revenue
 
$
361,360
 
 
$
9,395
 
 
$
370,755
 
Deferred tax liability
 
 
99,851
 
 
 
(3,664
)
 
 
96,187
 
Accumulated deficit
 
 
(949,696
)
 
 
(5,731
)
 
 
(955,427
)
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
Resident fees
 
$
2,414,283
 
 
$
(1,347
)
 
$
2,412,936
 
Total revenue
 
 
2,770,085
 
 
 
(1,347
)
 
 
2,768,738
 
Loss before income taxes
 
 
(63,601
)
 
 
(1,347
)
 
 
(64,948
)
Provision for income taxes
 
 
(2,044
)
 
 
525
 
 
 
(1,519
)
Net loss
 
 
(65,645
)
 
 
(822
)
 
 
(66,467
)
Basic and diluted net loss per share
 
 
(0.54
)
 
 
—
 
 
 
(0.54
)
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows
 
 
 
 
 
 
 
 
 
 
 
 
Net loss
 
$
(65,645
)
 
$
(822
)
 
$
(66,467
)
Amortization of entrance fees
 
 
(26,709
)
 
 
1,347
 
 
 
(25,362
)
Deferred income tax benefit
 
 
—
 
 
 
(525
)
 
 
(525
)
 
 
 
 
Year Ended December 31, 2011
 
 
As Reported
 
 
Adjustment
 
 
As Adjusted
 
Consolidated Statements of Operations
 
 
 
 
 
 
Resident fees
 
$
2,291,757
 
 
$
(1,435
)
 
$
2,290,322
 
Total revenue
 
 
2,457,918
 
 
 
(1,435
)
 
 
2,456,483
 
Loss before income taxes
 
 
(65,835
)
 
 
(1,435
)
 
 
(67,270
)
Provision for income taxes
 
 
(2,340
)
 
 
560
 
 
 
(1,780
)
Net loss
 
 
(68,175
)
 
 
(875
)
 
 
(69,050
)
Basic and diluted net loss per share
 
 
(0.56
)
 
 
(0.01
)
 
 
(0.57
)
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows
 
 
 
 
 
 
 
 
 
 
 
 
Net loss
 
$
(68,175
)
 
$
(875
)
 
$
(69,050
)
Amortization of entrance fees
 
 
(25,401
)
 
 
1,435
 
 
 
(23,966
)
Deferred income tax provision
 
 
943
 
 
 
(560
)
 
 
383
 

The prior period financial statements included in this filing have been revised to reflect this change in accounting, the effects of which have been summarized below (dollars in thousands):

 
Three Months Ended June 30, 2012
 
 
As Reported
 
 
Adjustment
 
 
As Adjusted
 
Condensed Consolidated Statements of Operations
 
 
 
 
 
 
Resident fees
 
$
602,387
 
 
$
(337
)
 
$
602,050
 
Total revenue
 
 
690,810
 
 
 
(337
)
 
 
690,473
 
Loss before income taxes
 
 
(17,796
)
 
 
(337
)
 
 
(18,133
)
Provision for income taxes
 
 
(1,014
)
 
 
132
 
 
 
(882
)
Net loss
 
 
(18,810
)
 
 
(205
)
 
 
(19,015
)
Basic and diluted net loss per share
 
 
(0.15
)
 
 
(0.01
)
 
 
(0.16
)
 
 
 
 
 
 
 
 
 
 
 
 

Six Months Ended June 30, 2012
As Reported
Adjustment
As Adjusted
Condensed Consolidated Statements of Operations
Resident fees
$
1,199,273
$
(674
)
$
1,198,599
Total revenue
1,373,855
(674
)
1,373,181
Loss before income taxes
(27,073
)
(674
)
(27,747
)
Provision for income taxes
(2,075
)
263
(1,812
)
Net loss
(29,148
)
(411
)
(29,559
)
Basic and diluted net loss per share
(0.24
)
-
(0.24
)
Condensed Consolidated Statements of Cash Flows
Net loss
$
(29,148
)
$
(411
)
$
(29,559
)
Amortization of entrance fees
(13,050
)
674
(12,376
)
Deferred income tax benefit
(41
)
(263
)
(304
)
Reclassifications
Reclassifications

Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company's consolidated financial position or results of operations.