XML 67 R18.htm IDEA: XBRL DOCUMENT v2.4.1.9
Commitments and Contingencies
12 Months Ended
Dec. 31, 2014
Commitments and Contingencies [Abstract]  
Commitments and Contingencies
10.       Commitments and Contingencies

Facility Operating Leases

The Company has entered into sale leaseback and lease agreements with certain real estate investment trusts ("REIT"s). Under these agreements communities are either sold to the REIT and leased back or a long-term lease agreement is entered into for the communities. The initial lease terms primarily vary from 10 to 20 years and generally include renewal options ranging from 5 to 30 years. The Company is responsible for all operating costs, including repairs, property taxes and insurance. The substantial majority of the Company's lease arrangements are structured as master leases. Under a master lease, numerous communities are leased through an indivisible lease. The Company typically guarantees its performance and the lease payments under the master lease and the lease may include performance covenants, such as net worth, minimum capital expenditure requirements per community per annum and minimum lease coverage ratios. Failure to comply with these covenants could result in an event of default. Certain leases contain cure provisions generally requiring the posting of an additional lease security deposit if the required covenant is not met.

As of December 31, 2014 the Company operated 583 communities under long-term leases (342 operating leases and 241 capital and financing leases). As of December 31, 2013 the Company operated 329 communities under long-term leases (275 operating leases and 54 capital and financing leases). The remaining base lease terms vary from one year to 17 years and generally provide for renewal, extension and purchase options.

A summary of facility lease expense and the impact of straight-line adjustment and amortization of (above) below market rents and deferred gains are as follows (in thousands):
 

 
 
For the Years Ended
December 31,
 
 
 
2014
  
2013
  
2012
 
Cash basis payment
 
$
330,207
  
$
278,504
  
$
281,729
 
Straight-line expense
  
1,439
   
2,597
   
6,668
 
Amortization of (above) below market rents, net
  
(3,444
)
  
   
 
Amortization of deferred gain
  
(4,372
)
  
(4,372
)
  
(4,372
)
Facility lease expense
 
$
323,830
  
$
276,729
  
$
284,025
 

The aggregate amounts of future minimum operating lease payments, including community and office leases, as of December 31, 2014, are as follows (dollars in thousands):
 
Year Ending December 31,
 
Operating
Leases
 
2015
 
$
395,990
 
2016
  
396,011
 
2017
  
381,722
 
2018
  
366,040
 
2019
  
348,111
 
Thereafter
  
1,239,651
 
Total
 
$
3,127,525
 

Other

The Company has employment or letter agreements with certain officers of the Company that grant these employees the right to receive their base salary and continuation of certain benefits, for a defined period of time, in the event of certain terminations of the officers' employment, as described in those agreements.