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Edward Merrigan | Director of Municipal Research | [email protected]
Mike Vitiello | Municipal Research Analyst | [email protected]
SPECIAL REPORT
ZIEGLER RESEARCH
FINANCIAL RATIO MEDIANS FOR
NOT-FOR-PROFIT ENTRANCE FEE
CONTINUING CARE RETIREMENT
COMMUNITIES
BASED ON AUDITED FYE 2014 RESULTS
Dated: September 24, 2015
EXECUTIVE SUMMARY
Ziegler Research is pleased to present this annual study of 19 financial ratio median and quartile
values we deem important for analyzing the credit quality of not-for-profit Continuing Care
Retirement Communities (CCRCs). These ratios address profitability, liquidity, cash flow, and
capital structure.
The medians and quartiles discussed in this report are based on the fiscal year-ended 2014 audits
of 97 nonprofit CCRC entities, of which 38 borrowers had debt rated in the investment grade
categories, while the rest had non-rated debt or debt rated in non-investment grade rating categories.
We did not include any FYE 2014 audits received after August 1, 2015. We were able to compute
the 19 ratios for the vast majority of borrowers studied. However, for certain borrowers some ratios
were not able to be computed. These instances are noted in the commentary for that particular
ratio. The names of the 97 borrowers included in this Special Report can be found in Appendix A.
Ziegler has underwritten bond issues for many more than the 97 borrowers included in our sample.
As of August 1, 2015 we follow approximately 265 senior living borrowing entities. The rest of the
borrowers were excluded from this report for the following reasons:
•
The borrower has no material entrance fee collection. The borrower may operate on a rental
basis only or requires only a nominal entrance fee to enter the community.
•
The borrower does not offer a continuum of care: independent living as well as assisted living
and/or skilled nursing care.
•
The borrower is a start-up community or in the midst of a substantial repositioning whereby
large amounts of non-recurring initial entrance fees are being collected and/or the borrower
is capitalizing a material amount of interest costs during the fiscal year studied.
•
The borrower’s only bond debt outstanding is either 100% Letter of Credit (LOC) enhanced
Variable Rate Demand Bonds (VRDBs), a direct Bank Placement, or a combination of both.
These CCRCs are typically not required to file audited financial statements with EMMA.
•
The borrower is in monetary default or is severely financially distressed. Ratios are not
reflective of an operationally viable CCRC.
Please refer to important analyst’s certification and disclosure at the end of this Special Report.
Past performance is no guarantee of future results. This Special Report does not constitute a solicitation or an offer to purchase or sell
any type of security described herein.
© 2015 | B.C. Ziegler and Company | Member SIPC & FINRA
A CCRC provides coordinated care and
services for older persons through
contractual agreements. The community
provides independent residential living, in
addition to assisted living and/or skilled
nursing care. To provide such services, the
CCRC: 1) accepts an entrance fee or other
type of advance fee; and/or 2) charges a
full or discounted periodic fee.
Ziegler Research calculates financial ratios generally, but not fully, in accordance with the
guidelines published by the Commission on Accreditation of Rehabilitation Facilities-Continuing
Care Accreditation Commission (CARF-CCAC), a reputable body that accredits CCRCs. If
our method for a particular ratio varies from CARF-CCAC’s method, it will be noted in the
commentary for that ratio. Standard & Poor’s and Fitch Ratings annually publish financial ratio
medians for rated bonds. Moody’s is not active in rating CCRC bonds.
Consensus among the participants who have a stake in creating uniformity around calculating
financial ratios has not fully taken place. No absolute uniform national standards exist. Because
of differences related to methods and values used, simultaneous with the release of this Special
Report, we published a companion Special Report entitled, “Calculating Financial Ratios for Notfor-Profit Continuing Care Retirement Communities.” Our companion report provides extensive
background and detail on the analytical protocols we follow when computing ratios.
All Borrower FYE 2014 Financial Ratio Median Values
Net Operating Margin (NOM)
7.7%
Net Operating Margin – Adjusted (NOM-A)
23.3%
Operating Ratio (OR)
97.6%
Operating Margin (OM)
-2.5%
Total Excess Margin (TEM)
Change in Unrestricted Net Assets Margin (CUNAM)
Days in Accounts Receivable (DAR)
0.7%
1.1%
18 days
Days Cash on Hand (DCOH)
298 days
Cushion Ratio (CUSH)
5.3 times
Debt Service Coverage – Revenue Basis (DSC-R)
0.94 times
Debt Service Coverage (DSC)
1.95 times
Debt Service as a Percentage of Total Operating Revenues and Net NonOperating Gains and (Losses) (DS-TR)
14.5%
Unrestricted Cash and Investments to Long-Term Debt (CTD)
43.0%
Reserve Ratio (RR)
51.2%
Long-Term Debt as a Percentage of Total Capital (LTDC)
95.2%
Long-Term Debt as a Percentage of Total Capital – Adjusted (LTDC-A)
77.1%
Long-Term Debt as a Percentage of Total Assets (LTD-TA)
49.2%
Average Age of Plant (AAP)
Capital Expenditures as a Percentage of Depreciation Expense (CED)
2
Ratios
11.0 years
79%
Of the 97 borrowers in our analysis, 38 had investment grade rated bonds at the time of this
publication (“BBB-” or greater rating from S&P or Fitch). We did not match ratings in effect
during FY 2014. As expected, the ratio medians generated from the audited financial results of
borrowers who have investment grade rated bonds show these borrowers are in a stronger financial
state when compared to the typical non-rated borrower. This reaffirms investment grade rated
status and provides further credibility regarding the creditworthiness calibration accuracy of S&P
and Fitch. If both agencies rate the borrower, and one gives an investment grade rating while the
other does not, we count that borrower as non-rated. Only a small percentage of new-issue bond
financings are initially floated with a non-investment grade rating (“BB+” or lower from S&P
or Fitch). Thus, non-rated debt forms the vast majority of the CCRC bond universe. For ease of
reading, we aggregately refer to non-rated and non-investment grade rated bonds as non-rated in
this report.
Breakout of Borrowers FYE 2014 Financial Ratio Median Values
Number of Borrowers
Net Operating Margin (NOM)
Investment
Grade
Non-Rated
38
59
6.9%
8.3%
Net Operating Margin – Adjusted (NOM-A)
24.2%
23.3%
Operating Ratio (OR)
95.4%
99.9%
Operating Margin (OM)
1.3%
-5.6%
Total Excess Margin (TEM)
4.9%
-1.4%
Change in Unrestricted Net Assets Margin (CUNAM)
4.5%
-0.9%
20 days
17 days
Days Cash on Hand (DCOH)
416 days
238 days
Cushion Ratio (CUSH)
8.1 times
3.8 times
Debt Service Coverage – Revenue Basis (DSC-R)
1.11 times
0.79 times
Debt Service Coverage (DSC)
Days in Accounts Receivable (DAR)
2.60 times
1.67 times
Debt Service as a Percentage of Total Operating Revenues
and Net Non-Operating Gains and (Losses) (DS-TR)
11.8%
16.3%
Unrestricted Cash and Investments to Long-Term Debt (CTD)
76.0%
33.0%
Reserve Ratio (RR)
80.0%
38.8%
Long-Term Debt as a Percentage of Total Capital (LTDC)
84.8%
122.8%
Long-Term Debt as a Percentage of Total Capital – Adjusted
(LTDC-A)
62.9%
89.8%
Long-Term Debt as a Percentage of Total Assets (LTD-TA)
40.4%
56.3%
11.0 years
10.9 years
111%
68%
Average Age of Plant (AAP)
Capital Expenditures as a Percentage of Depreciation Expense
(CED)
3
FISCAL YEAR TRENDS 2011, THROUGH 2014
Financial Ratios
Number of Borrowers
FYE 2011
Medians
FYE 2012
Medians
FYE 2013
Medians
FYE 2014
Medians
101
97
97
97
6.8%
6.7%
9.0%
7.7%
Net Operating Margin – Adjusted (NOM-A)
17.4%
19.4%
22.3%
23.3%
Operating Ratio (OR)
98.9%
99.1%
98.7%
97.6%
Operating Margin (OM)
-0.3%
-0.7%
-2.1%
-2.5%
1.3%
0.5%
0.5%
0.7%
n/a
0.9%
2.4%
1.1%
20 days
18 days
20 days
18 days
Days Cash on Hand (DCOH)
208 days
262 days
303 days
298 days
Cushion Ratio (CUSH)
4.1 times
4.4 times
5.2 times
5.3 times
Debt Service Coverage – Revenue Basis
(DSC-R)
0.83 times
0.94 times
0.93 times
0.94 times
Debt Service Coverage (DSC)
1.64 times
1.77 times
2.04 times
1.95 times
Debt Service as a Percentage of Total
Operating Revenues and Net NonOperating Gains and (Losses) (DS-TR)
14.6%
13.9%
13.2%
14.5%
Unrestricted Cash and Investments to
Long-Term Debt (CTD)
35.0%
35.0%
39.0%
43.0%
Reserve Ratio (RR)
41.9%
41.5%
47.2%
51.2%
Long-Term Debt as a Percentage of Total
Capital (LTDC)
99.6%
100.4%
93.1%
95.2%
Long-Term Debt as a Percentage of Total
Capital – Adjusted (LTDC-A)
75.4%
76.6%
72.6%
77.1%
Long-Term Debt as a Percentage of Total
Assets (LTD-TA)
51.3%
48.1%
50.6%
49.2%
10.8 years
11.4 years
10.9 years
11.0 years
61%
70%
74%
79%
Net Operating Margin (NOM)
Total Excess Margin (TEM)
Change in Unrestricted Net Assets Margin
(CUNAM)
Days in Accounts Receivable (DAR)
Average Age of Plant (AAP)
Capital Expenditures as a Percentage of
Depreciation Expense (CED)
The ratio medians we have calculated for our sample group demonstrates relatively solid credit
characteristics of the studied group of borrowers. As we can see from the above chart, the medians
for the ratios calculated for FYE 2011, 2012, and 2013 show consistent improvement. However,
the ratios calculated for FYE 2014 show possible stabilization from FYE 2013. About half of the
ratios improved and half worsened for FY 2014. However, Ziegler Research believes most of these
changes, both positive and negative, to be immaterially small. The two most significant year-overyear changes were decreases in the NOM and CUNAM. The decrease in NOM likely points to
operating expenses rising faster than operating revenues during the fiscal year. However, more
stable results in the OR, OM and TEM show that borrowers may be making up for this shortfall
in other ways. Because the intermediary profitability measures show stability, the decrease in
CUNAM is likely tied to large non-cash items such as losses from bond refundings, changes in
swap valuations or pension obligations.
We look forward to publishing this report next year for fiscal year 2015 results. We also ask readers
to comment on the utility of this report and make suggestions for improvements.
4
RATIO 1: NET OPERATING MARGIN (NOM)
FYE 2014 MEDIAN: 7.7%
(Resident and Healthcare Revenue)
- (Operating Expenses - Interest, Depreciation & Amortization Expenses)
Resident and Healthcare Revenue
= NOM
For this ratio, a higher value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Net Operating Margin (NOM) median of 7.7%. The worst reported
NOM was -22.6%, while the best was 30.6%. NOM is the only ratio in this report where nonrated borrowers performed materially better than investment grade borrowers, at 8.3% vs. 6.9%.
There was a similar trend in FYE 2011, FYE 2012 and FYE 2013. Ziegler Research believes this
discrepancy to be caused by exclusion of interest expense and non-resident revenues. Interest rates
and relative principal amounts are generally higher for non-rated borrowers compared to those
rated investment grade. Thus, interest expense for non-rated borrowers will generally be higher
than investment grade rated counterparts. Subtracting interest expense as part of the numerator
improves the NOM for non-rated borrowers more than it does for investment grade borrowers.
Also, investment grade borrowers tend to have larger amounts of unrestricted cash and investments,
leading to potentially higher investment income. Investment income is a significant source of
income for many CCRCs. Excluding it in the NOM hurts investment grade borrowers more than
non-rated, while including it in other ratios has the opposite effect.
FYE 2014 Net Operating Margin by Quartile
40
30
20
10
0
-10
-20
-30
First
Quartile
Worst
All Borrowers
Investment Grade
Non-rated
-22.6
-12.0
-22.6
2.2
1.9
2.8
Second Quartile
(Median)
7.7
6.9
8.3
Third
Quartile
12.9
12.2
13.7
Best
30.6
24.7
30.6
The Net Operating Margin (NOM) measures the operations of a CCRC and examines the
revenues and expenses related to the delivery of services to residents. The purpose of this ratio
is to provide a benchmark from which borrowers can determine the margin generated by cash
resident revenues after payment of cash operating expenses. This allows interested parties to gauge
the operational performance of a CCRC. Amortization of Entrance Fees is not a component of
Resident Revenue.
The NOM is expressed as a percentage rounded to one decimal point, e.g. 2.8%. For example,
if a CCRC had $20,000,000 in Resident Revenue (net of Amortization of Entrance Fees),
$22,000,000 in Operating Expense, $1,000,000 in Interest, $1,550,000 in Depreciation and
Amortization; NOM would be 2.8%.
5
RATIO 2: NET OPERATING MARGIN-ADJUSTED (NOM-A)
FYE 2014 MEDIAN: 23.3%
(Resident and Healthcare Revenue)
- (Operating Expenses - Interest, Depreciation and Amortization Expenses)
+ Net Entrance Fees From Turnover
= NOM-A
Resident and Healthcare Revenue + Net Entrance Fees From Turnover
For this ratio, a higher value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Net Operating Margin-Adjusted (NOM-A) median of 23.3%. The
worst reported NOM-A was -15.0%, while the best was 47.1%.
FYE 2014 Net Operating Margin-Adjusted by Quartile
60
50
40
30
20
10
0
-10
-20
Worst
All Borrowers
Investment Grade
Non-rated
-15.0
1.0
-15.0
First
Quartile
15.0
15.0
14.4
Second Quartile
(Median)
23.3
24.2
23.3
Third
Quartile
28.3
30.5
27.5
Best
47.1
47.1
46.2
The Net Operating Margin-Adjusted (NOM-A) measures a CCRC’s margin produced by cash
operating revenues after meeting cash expenses, but is adjusted to add net entrance fee receipts
from turnover in both the numerator and denominator. This means figures from the Statement
of Cash Flows are needed. Net turnover-related entrance fees are the cash flows associated with
residents moving into previously occupied units. By comparing the results of this ratio to the
NOM, the user can determine to what extent a CCRC relies on net entrance fee receipts to
enhance annual cash flows. A substantial difference in the NOM and NOM-A ratios shows a high
sensitivity to, and dependence on, these fees. If NOM-A is lower than NOM, the CCRC had more
entrance fee refunds than proceeds in the period. In tandem with other ratios such as Ratios #10
and #11 (Debt Service Coverage-Revenue Basis and Debt Service Coverage), users can determine
the extent of a CCRC’s reliance on net entrance fees for cash flow. Ziegler Research calculates this
ratio differently from CARF-CCAC. CARF-CCAC includes Initial Entrance Fees, but we do not.
Amortization of Entrance Fees is not a component of Resident Revenue.
The NOM-A is expressed as a percentage rounded to one decimal point, e.g. 11.6%. For example,
if a CCRC had $20,000,000 in Resident Revenue (net of Amortization of Entrance Fees),
$22,000,000 in Operating Expense, $1,000,000 in Interest, $1,550,000 in Depreciation and
Amortization, and $2,000,000 in Net Proceeds from Entrance fees; NOM-A would be 11.6%.
6
RATIO 3: OPERATING RATIO (OR)
FYE 2014 MEDIAN: 97.6%
Operating Expenses - (Depreciation, Amortization, Bad Debt Expenses)
Operating Revenue - Amortization of Entrance Fees
= OR
For this ratio, a lower value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had an Operating Ratio (OR) median of 97.6%. The worst reported OR
was 120.5%, while the best was 76.9%.
FYE 2014 Operating Ratio by Quartile
130
120
110
100
90
80
70
60
Worst
All Borrowers
Investment Grade
Non-rated
120.5
109.8
120.5
First
Quartile
102.7
100.6
105.7
Second Quartile
(Median)
97.6
95.4
99.9
Third
Quartile
94.0
92.0
94.8
Best
76.9
84.7
76.9
The Operating Ratio (OR) measures cash operating revenues against cash operating expenses.
The OR differs from the Net Operating Margin because: a) Interest Expense is included within
operating expenses, b) Investment Interest/Dividends and Net Assets Released for Operations are
included within revenues, and c) no revenues are included in the numerator. Although an OR
of less than 100 percent is desired, this ratio often pushes above the 100 percent mark, resulting
from cash operating expenses exceeding cash operating revenues. The reason is the historical
dependence of many CCRCs on cash from entrance fees collected to offset operating expenses,
particularly interest expense. New CCRCs in particular will often experience an OR in excess of
100 percent if structured to rely on initial entrance fees to subsidize operating losses during the
early fill-up years. The OR of a mature CCRC is generally expected to drop below 100 percent.
The OR is expressed as a percentage rounded to one decimal point, e.g. 100.3%. For example, if
a CCRC has Operating Expenses of $22,000,000, $1,500,000 in Depreciation Expense, $50,000
in Amortization Expense, $22,400,000 of Operating Revenue and $2,000,000 of Amortization of
Entrance Fees; OR would be 100.3%.
7
RATIO 4: OPERATING MARGIN (OM)
FYE 2014 MEDIAN: -2.5%
Income (Loss) from Operations
Operating Revenue
= OM
For this ratio, a higher value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had an Operating Margin (OM) median of -2.5%. The worst reported
OM was -27.4%, while the best was 14.3%.
FYE 2014 Operating Margin by Quartile
20
15
10
5
0
-5
-10
-15
-20
-25
-30
Worst
All Borrowers
Investment Grade
Non-rated
-27.4
-9.3
-27.4
First
Quartile
-7.9
-3.2
-10.6
Second Quartile
(Median)
-2.5
1.3
-5.6
Third
Quartile
Best
2.5
5.6
0.1
14.3
14.3
12.9
The Operating Margin (OM) measures the total portion of “operating” revenues remaining after
operating expenses have been satisfied. It is considered to be a strong measure of the borrower’s
ability to generate surpluses for future requirements.
The OM is expressed as a percentage rounded to one decimal point, e.g. 1.8%. For example, if
a CCRC had an Income from Operations of $400,000 and Operating Revenue of $22,500,000;
OM would be 1.8%.
8
RATIO 5: TOTAL EXCESS MARGIN (TEM)
FYE 2014 MEDIAN: 0.7%
Total Excess of Revenues over Expenses
Operating Revenue + Net Nonoperating Gains and (Losses)
= TEM
For this ratio, a higher value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Total Excess Margin (TEM) median of 0.7%. The worst reported
TEM was -27.7% while the best was 17.2%.
FYE 2014 Total Excess Margin by Quartile
20
15
10
5
0
-5
-10
-15
-20
-25
-30
Worst
All Borrowers
Investment Grade
Non-rated
-27.7
-4.9
-27.7
First
Quartile
-5.1
0.5
-9.5
Second Quartile
(Median)
0.7
4.9
-1.4
Third
Quartile
Best
5.9
9.7
2.3
17.2
17.2
15.7
The Total Excess Margin (TEM) includes both operating and non-operating revenues and gains.
In contrast to the Operating Margin, unrestricted contributions are included, as are realized gains
or losses on investments or derivatives.
The TEM is expressed as a percentage rounded to one decimal point, e.g. 1.8%. For example, if a CCRC had an Excess of Revenues over Expenses of $400,000, Operating Revenue of
$22,400,000, and Net Nonoperating Gains of $100,000; the TEM would be 1.8%.
9
RATIO 6: CHANGE IN UNRESTRICTED NET ASSETS MARGIN (CUNAM)
FYE 2014 MEDIAN: 1.1%
Increase (Decrease) in Unrestricted Net Assets
All Revenues
= CUNAM
For this ratio, a higher value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Change in Unrestricted Net Assets Margin (CUNAM) median of
1.1%. The worst reported CUNAM was -85.5%, while the highest was 26.9%. Please note that
in the chart below, the worst bar has been cut off in order to better illustrate the differences in
the quartiles.
FYE 2014 Change in Unrestricted Net Assets Margin by Quartile
30
25
20
15
10
5
0
-5
-10
-15
-20
Worst
All Borrowers
Investment Grade
Non-rated
-85.5
-8.4
-85.5
First
Quartile
-5.6
-0.1
-9.4
Second Quartile
(Median)
1.1
4.5
-0.9
Third
Quartile
Best
7.6
9.9
3.1
26.9
26.9
15.8
This ratio is not computed by CARF-CCAC, Fitch, or S&P. The CUNAM calculation includes
all items listed on the Income Statement. Any net changes in the donor restricted Net Asset
accounts for Temporarily or Permanently Restricted Net Assets are excluded from this ratio. We
believe this ratio is the most comprehensive measure of the unrestricted “margin” a CCRC can
produce. It incorporates all activities and financial line items that make up the accumulation of
Unrestricted Net Assets. It also measures a fiscal year’s deficit. This ratio captures all measurable
financial activities a CCRC participates in that must run through the Income Statement.
CUNAM is expressed as a percentage rounded to one decimal point, e.g. 0.4%. For example, if
a borrower had a Change in Unrestricted Net Assets of $100,000 and Revenues of $22,800,000;
CUNAM would be 0.4%.
10
RATIO 7: DAYS IN ACCOUNTS RECEIVABLE (DAR)
FYE 2014 MEDIAN: 18 DAYS
Net Accounts Receivable
Resident and Healthcare Revenue/365
= DAR
For this ratio, a lower value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Days in Accounts Receivable median of 18 days. The worst reported
Days in Accounts Receivable was 56 days, while the best was 1 day.
FYE 2014 Days in Accounts Receivable by Quartile
60
DAR (DAYS)
50
40
30
20
10
0
First
Quartile
Worst
All Borrowers
Investment Grade
Non-rated
56
56
41
Second Quartile
(Median)
24
25
24
18
20
17
Third
Quartile
Best
13
13
13
1
3
1
The Days in Accounts Receivable (DAR) ratio measures how much revenue is tied up in
uncollected billings. The calculation compares the total amount in accounts receivable (net of
allowances for uncollectible accounts) to average daily operating revenues associated with net
charges to residents of independent living, assisted living, and nursing units.
Generally, ILUs and ALUs in a CCRC are private pay. Typically, ILU charges are monthly,
and paid in advance. For CCRCs with a high percentage of private pay residents in nursing
care beds (NCBs), this number should be low because typically residents pay quickly. On the
other hand, CCRCs with a high percentage of revenues from third-party payors (i.e. Medicaid
and Medicare) will generally have a higher DAR because of systemic reasons that are out of
management’s control. This issue is more prevalent in some states than others. Before being able
to judge a CCRC based on this ratio, we must understand the payor mix and billing/collection
environment. It should be noted that a strong collection rate for private pay residents could mask
potential issues with collections from third party payors.
DAR is expressed as a whole number of days, e.g. 12 days. For example, if a CCRC had $750,000
in Net Accounts Receivable and $60,300 in Daily Residential and Healthcare Revenues; DAR
would be 12 days.
11
RATIO 8: DAYS CASH ON HAND (DCOH)
FYE 2014 MEDIAN: 298 DAYS
Unrestricted Cash and Investments
Daily Operating Expenses
= DCOH
For this ratio, a higher value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Days Cash on Hand (DCOH) median of 298 days. The worst
reported DCOH was 74 days, while the best was 1375 days. Due to the collection of advance
fees and the insurance nature of certain CCRC contracts, entrance-fee CCRCs typically carry
significantly more cash and investments than rental CCRCs, freestanding assisted living facilities
or skilled nursing facilities.
FYE 2014 Days Cash on Hand by Quartile
1600
DCOH (DAYS)
1400
1200
1000
800
600
400
200
0
First
Quartile
Worst
All Borrowers
Investment Grade
Non-rated
74
157
74
203
279
174
Second Quartile
(Median)
298
416
238
Third
Quartile
454
626
335
Best
1,375
1,375
972
The purpose of this ratio is to measure the number of days of cash the borrower has available for
cash operating expenses, assuming no new revenue is received. A high DCOH indicates financial
health in the event of an emergency or an immediate need for cash. With high liquidity, a
borrower can hedge against potentially volatile annual cash flows and can internally fund routine
capital expenditures. In addition, a CCRC offering entrance fee deposit refunds needs to build
cash reserves to offset any long-term nursing care liability while keeping sufficient reserves to fund
promised refunds, regardless of whether the refund is contingent upon resale of the unit.
DCOH is expressed as a whole number of days, e.g. 179 days. Some put a possessive apostrophe
(days’) indicating a statement of the denominator’s daily expenses. Ziegler Research chooses to
make it simply a plural expression of days. For example, if a CCRC had Operating Expenses
of $22,000,000 and Depreciation, Amortization, and Bad Debt Expenses of $1,550,000, the
net annual cash operating expenses would be $20,450,000. This amount is divided by 365 to
arrive at the daily operating expense value, $56,000. If the CCRC had Unrestricted Cash and
Investments of $10,000,000, we divide the daily operating expenses into the Unrestricted Cash
and Investments to arrive at 179 days.
12
RATIO 9: CUSHION RATIO (CUSH)
FYE 2014 MEDIAN: 5.3 TIMES
Unrestricted Cash and Investments
Maximum Annual Debt Service (MADS)
= CUSH
For this ratio, a higher value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Cushion Ratio median of 5.3 times. The worst reported CUSH was
1.3 times, while the best was 39.8 times. We were unable to calculate MADS for six borrowers,
either because a complete debt service schedule did not exist, or we knew of material non-bond
related debt but could not compute the costs associated with it because of inadequate disclosure.
Please note that in the chart below, the best bar has been cut off in order to better illustrate the
differences in the quartiles.
CUSH (TIMES)
FYE 2014 Cushion Ratio by Quartile
First
Quartile
Worst
All Borrowers
Investment Grade
Non-rated
1.3
3.0
1.3
Second Quartile
(Median)
3.3
5.5
2.9
5.3
8.1
3.8
Third
Quartile
8.7
12.9
5.6
Best
39.8
39.8
16.7
The Cushion Ratio (CUSH) measures the borrower’s cash position in relation to its annual debt
service obligation. Ziegler Research uses Maximum Annual Debt Service (MADS) while CARFCCAC uses historical Annual Debt Service (ADS) taken straight from the audited financial
statements. A CUSH ratio of 1.0 times signifies that a CCRC has enough liquidity to cover
MADS. If a CCRC’s debt service has not been structured to be level, a low CUSH ratio using
MADS may signal an inability to meet escalating or balloon principal payments.
The CUSH ratio is expressed to one decimal point, followed by the word “times,” e.g. 6.7 times.
Some use an “x” to represent the word times, however Ziegler Research chooses to write the
word out. For example, if a CCRC had $10,000,000 in Unrestricted Cash and Investments and
Maximum Annual Debt Service of $1,500,000; CUSH would be 6.7 times.
13
RATIO 10: DEBT SERVICE COVERAGE-REVENUE BASIS (DSC-R)
FYE 2014 MEDIAN: 0.94 TIMES
Net Available for Debt Service
Maximum Annual Debt Service (MADS)
= DSC-R
For this ratio, a higher value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Debt Service Coverage - Revenue Basis (DSC-R) ratio median
of 0.94 times. The worst reported DSC-R was -0.22 times, while the highest was 2.84 times.
Of the 91 borrowers whose DSC-R we were able to calculate, 50 or 55% had a DSC-R of over
1.00 times. Stated differently, over half our sample generated sufficient revenues to cover MADS
without reliance on entrance fees, an improvement over FY 2013’s 41%. We were unable to
calculate MADS for six borrowers, either because a complete debt service schedule did not exist,
or we knew of material non-bond related debt but could not compute the costs associated with it
because of inadequate disclosure.
DSC-R (TIMES)
FYE 2014 Debt Service Coverage - Revenue Basis by Quartile
4
3.5
3
2.5
2
1.5
1
0.5
0
-0.5
Worst
All Borrowers
Investment Grade
Non-rated
-0.22
0.17
-0.22
First
Quartile
0.68
0.87
0.59
Second Quartile
(Median)
0.94
1.11
0.79
Third
Quartile
1.40
1.64
1.22
Best
2.84
2.84
2.26
Debt Service Coverage-Revenue Basis (DSC-R) shows how well a borrower can cover MADS
without the benefit of cash flow from turnover-related net entrance fees. Covering debt service
solely through operations and not relying on entrance fees is a much more stringent and difficult
goal to achieve. Ziegler Research uses Maximum Annual Debt Service (MADS) while CARFCCAC uses historical Annual Debt Service (ADS) taken straight from the audited financial
statements.
DSC-R is expressed to two decimal points, followed by the word “times”, e.g. 0.77 times. Some
use an “x” to represent the word times, however Ziegler Research chooses write the word out.
For example, if a borrower had Net Available for Debt Service of $1,150,000 and Maximum
Annual Debt Service of $1,500,000; DSC-R would be 0.77 times.
14
RATIO 11: DEBT SERVICE COVERAGE (DSC)
FYE 2014 MEDIAN: 1.95 TIMES
Net Available for Debt Service + Net Entrance Fees From Turnover
Maximum Annual Debt Service (MADS)
= DSC
For this ratio, a higher value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Debt Service Coverage (DSC) median of 1.95 times. The worst
reported DSC was 0.40 times, while the highest was 8.09 times. Of the 91 borrowers whose
DSC we were able to calculate, 88 or 97% had a DSC greater than 1.00 times, identical to last
year’s proportionally. Stated differently, almost all of our sample generated sufficient revenues to
cover MADS. We were unable to calculate MADS for six borrowers, either because a complete
debt service schedule did not exist, or we knew of material non-bond related debt but could not
compute the costs associated with it due to inadequate disclosure.
DSC (TIMES)
FYE 2014 Debt Service Coverage by Quartile
9
8
7
6
5
4
3
2
1
0
Worst
All Borrowers
Investment Grade
Non-rated
0.40
1.49
0.40
First
Quartile
1.59
1.83
1.42
Second Quartile
(Median)
1.95
2.60
1.67
Third
Quartile
2.68
3.27
2.23
Best
8.09
5.44
8.09
Debt Service Coverage (DSC) shows how well a borrower can cover MADS with the inclusion
of cash flow from turnover-related net entrance fees. DSC should be considered in tandem with
Ratio #10, Debt Service Coverage-Revenue Basis (DSC-R), discussed earlier. Again, Ziegler
Research uses Maximum Annual Debt Service (MADS) while CARF-CCAC uses historical
Annual Debt Service (ADS) taken straight from the audited financial statements.
DSC is expressed to two decimal points, followed by the word “times,” e.g. 2.10 times. Some use
an “x” to represent the word times, however Ziegler Research chooses write the word out. For
example, if a CCRC had Net Available for Debt Service of $1,150,000, plus Net Entrance Fees
of $2,000,000 the Net Available for Debt Service would equal $3,150,000. If Maximum Annual
Debt Service was $1,500,000; DSC would be 2.10 times.
15
RATIO 12: MADS AS A PERCENTAGE OF TOTAL OPERATING REVENUES
AND NET NONOPERATING GAINS AND (LOSSES) (DS-TR)
FYE 2014 MEDIAN: 14.5%
Maximum Annual Debt Service (MADS)
Operating Revenues + Net Nonoperating Gains and (Losses)
- Net Assets Released from Restrictions for PP&E
= DS-TR
For this ratio, a lower value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Debt Service as a Percentage of Total Operating Revenues and Net
Non-Operating Gains and (Losses) (DS-TR) ratio median of 14.5%. The worst reported DS-TR
was 31.8%, while the best was 3.9%. We were unable to calculate MADS for six borrowers, either
because a complete debt service schedule did not exist, or we knew of material non-bond related
debt but could not compute the costs associated with it.
FYE 2014 Debt Service as a Percentage of Total Operating
Revenues and Net Non-Operating Gains and (Losses) by Quartile
Worst
All Borrowers
Investment Grade
Non-rated
31.8
22.5
31.8
First
Quartile
19.6
14.6
20.7
Second Quartile
(Median)
14.5
11.8
16.3
Third
Quartile
10.7
9.7
12.5
Best
3.9
4.4
3.9
The purpose of this ratio is to indicate the percentage of operating revenues and non-operating
gains and losses taken up by MADS. Year-to-year, the DS-TR ratio will be affected by changes in
maximum annual debt service and market conditions that enable favorable gains. Again, Ziegler
Research uses Maximum Annual Debt Service (MADS) while CARF-CCAC uses historical
Annual Debt Service (ADS) taken straight from the audited financial statements.
DS-TR is expressed as a percentage rounded to one decimal point, e.g. 6.7%. For example, if a
CCRC had MADS of $1,500,000, Operating Revenue of $22,400,000, and Net Nonoperating
Gains of $100,000; DS-TR would be 6.7%.
16
RATIO 13: UNRESTRICTED CASH & INVESTMENTS TO LONG-TERM
DEBT (CTD)
FYE 2014 MEDIAN: 43.0%
Unrestricted Cash and Investments
= CTD
Long-Term Debt
For this ratio, a higher value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had an Unrestricted Cash and Investments to Long-Term Debt (CTD)
ratio median of 43.0%. The worst reported CTD was 8.0%, while the best was 377.0%.
Please note that in the chart below, the best bar has been cut off in order to better illustrate the
differences in the quartiles.
FYE 2014 Unrestricted Cash and Investments
to Long-Term Debt by Quartile
160
140
120
100
80
60
40
20
0
Worst
All Borrowers
Investment Grade
Non-rated
8.0
28.0
8.0
First
Quartile
28.0
41.3
22.0
Second Quartile
(Median)
43.0
76.0
33.0
Third
Quartile
81.0
109.0
54.0
Best
377.0
377.0
213.0
The Unrestricted Cash and Investments to Long-Term Debt ratio (CTD) measures a CCRC’s
easily available cash and marketable securities (liquid and unencumbered cash and investments)
in relation to its Long-Term Debt. This ratio is a measure of the borrower’s ability to withstand
annual fluctuations in cash flow, either from weakened operating results or negligible resident
entrance fee receipts due to low turnover or a high amount of refunds.
CTD is expressed as a percentage rounded to one decimal point, e.g. 40.0%. For example, if
a borrower had Unrestricted Cash and Investments of $10,000,000 and Long-term Debt of
$25,000,000, CTD would be 40.0%.
17
RATIO 14: RESERVE RATIO (RR)
FYE 2014 MEDIAN: 51.2%
Unrestricted Cash and Investments + Debt Service Reserve Fund
Long-Term Debt
= RR
For this ratio, a higher value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Reserve Ratio median of 51.2%. The lowest reported Reserve Ratio
was 12.8%, while the highest was 390.5%. We were unable to compute a Reserve Ratio for 28
borrowers because the amount of the Debt Service Reserve Fund was not disclosed. Please note
that in the chart below, the best bar has been cut off in order to better illustrate the differences in
the quartiles.
FYE 2014 Reserve Ratio by Quartile
160
140
120
RR (%)
100
80
60
40
20
0
Worst
All Borrowers
Investment Grade
Non-rated
12.8
33.8
12.8
First
Quartile
36.1
51.9
27.3
Second Quartile
(Median)
51.2
80.0
38.8
Third
Quartile
75.8
120.9
55.4
Best
390.5
390.5
225.7
This ratio is not computed by CARF-CCAC, Fitch, or S&P. We compute it for several reasons.
Many CCRC bond issues impose operational covenants associated with cash and investments.
One common covenant allows a start-up CCRC the option of converting an initial Reserve Ratio
into a DCOH ratio after certain milestones are reached in the start-up’s development. With longer
fill-up time periods occurring with regularity, the Reserve Ratio has stayed in place longer than
most would have anticipated. Without the conversion, CCRCs that self-report ratios include any
Debt Service Reserve Funds to report Reserve Ratio covenant compliance figures. As such, we
include this ratio in our normal analysis.
The RR is expressed as a percentage rounded to one decimal point, e.g. 46.0%. For example, if a
CCRC had Unrestricted Cash and Investments of $10,000,000, a Debt Service Reserve Fund of
$1,500,000, and Long-term Debt of $25,000,000; the Reserve Ratio would be 46.0%.
18
RATIO 15: LONG-TERM DEBT AS A PERCENTAGE OF TOTAL
CAPITAL (LTDC)
FYE 2014 MEDIAN: 95.2%
Long-Term Debt
Long-Term Debt + Unrestricted Net Assets
= LTDC
For this ratio, a lower value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Long-Term Debt-to-Capitalization Percentage (LTDC) ratio median
of 95.2%. The worst reported LTDC was 1735.3%, while the best was 21.4%. Three borrowers
were excluded from this ratio. They had larger negative Unrestricted Net Assets than Long-Term
Debt, rendering the result unusable. Please note that in the chart below, the worst bar has been
cut off in order to better illustrate the differences in the quartiles.
FYE 2014 Long-Term Debt-to-Capitalization Percentage by Quartile
250
200
150
100
50
0
Worst
All Borrowers
Investment Grade
Non-rated
1,735.3
902.7
1,735.3
First
Quartile
181.3
95.8
203.1
Second Quartile
(Median)
95.2
84.8
122.8
Third
Quartile
73.9
67.9
88.4
Best
21.4
21.4
29.2
The purpose of this ratio is to measure the borrower’s debt compared to total capital.
LTDC is expressed as a percentage rounded to one decimal place, e.g. 92.6%. For example, if a
CCRC had $25,000,000 in Long-Term Debt and $2,000,000 in Unrestricted Net Assets; LTDC
would be 92.6%.
19
RATIO 16: LONG-TERM DEBT AS A PERCENTAGE OF TOTAL CAPITALADJUSTED (LTDC-A)
FYE 2014 MEDIAN: 77.1%
Long-Term Debt
= LTDC-A
Long-Term Debt + Unrestricted Net Assets
+ Unearned Entrance Fees (Non-Refundable)
For this ratio, a lower value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Long-Term Debt-to-Capitalization Percentage-Adjusted
(LTDC-A) ratio median of 77.1%. The worst reported LTDC-A was 660.5%, while the best
was 12.2%. Two borrowers were excluded from this ratio. They had larger negative Unrestricted
Net Assets than Long-Term Debt and Unearned Entrance Fees, rendering the results unusable.
Please note that in the chart below, the worst bar has been cut off in order to better illustrate the
differences in the quartiles.
FYE 2014 Long-Term Debt-to-Capitalization
Percentage - Adjusted by Quartile
250
200
150
100
50
0
Worst
All Borrowers
Investment Grade
Non-rated
660.5
401.6
660.5
First
Quartile
123.4
82.2
150.3
Second Quartile
(Median)
77.1
62.9
89.8
Third
Quartile
53.4
48.2
66.6
Best
12.2
19.6
12.2
Similar to the Long-Term Debt to Capitalization Percentage, the purpose of this ratio is to
measure the borrower’s debt compared to total capital. Unearned revenue from entrance fees is
added in recognition that this account balance represents cash paid to the community that is often
used for capital improvements and/or retained as cash reserves.
LTDC-A is expressed as a percentage rounded to one decimal place, e.g. 59.5% For example,
if a CCRC had $25,000,000 in Long-Term Debt, $2,000,000 in Unrestricted Net Assets, and
$15,000,000 in Non-Refundable Unearned Entrance Fees; LTDC-A would be 59.5%.
20
RATIO 17: LONG-TERM DEBT AS PERCENTAGE OF TOTAL
ASSETS (LTD-TA)
FYE 2014 MEDIAN: 49.2%
Long-Term Debt
= LTD-TA
Total Assets
For this ratio, a lower value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Long-Term Debt as a Percentage of Total Assets (LTD-TA) ratio
median of 49.2%. The worst reported LTD-TA was 108.7%, while the best was 9.9%.
FYE 2014 Long-Term Debt as a Percentage of Total Assets by Quartile
Worst
All Borrowers
Investment Grade
Non-rated
108.7
70.7
108.7
First
Quartile
61.1
52.0
67.4
Second Quartile
(Median)
49.2
40.4
56.3
Third
Quartile
34.9
31.9
42.7
Best
9.9
11.0
9.9
The Long-Term Debt to Total Assets (LTD-TA) ratio relates an organization’s indebtedness
to total assets. This ratio has some attributes of a liquidity ratio, as its value is sensitive to the
market values of the borrower’s investments. A borrower with a higher percentage for this ratio is
considered to have a weaker capital structure than a borrower with a lower percentage.
LTD-TA is expressed as a percentage rounded to one decimal place, e.g. 41.7 % For example, if a
borrower had $25,000,000 in Long-Term Debt and $60,000,000 in Total Assets; LTD-TA would
be 41.7%.
21
RATIO 18: AVERAGE AGE OF PLANT (AAP)
FYE 2014 MEDIAN: 11.0 YEARS
Accumulated Depreciation
= AAP
Depreciation Expense
For this ratio, a lower value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had an Average Age of Plant (AAP) median of 11.0 years. The best
reported AAP was 2.4 years, while the worst was 24.0 years. We were unable to calculate AAP for
six borrowers because material non obligated entities were included in the audited Accumulated
Depreciation figure.
FYE 2014 Average Age of Plant/Facility by Quartile
30
AAP (YEARS)
25
20
15
10
5
0
Worst
All Borrowers
Investment Grade
Non-rated
24.0
16.8
24.0
First
Quartile
13.5
13.5
13.7
Second Quartile
(Median)
11.0
11.0
10.9
Third
Quartile
9.2
10.1
8.2
Best
2.4
7.2
2.4
The Average Age of Plant ratio (AAP) measures the historical commitment of a CCRC to facility
upkeep and renewal.
A lower Average Age of Plant is desired, as with older facilities there is a greater chance that a large
expenditure will be required to keep the CCRC relevant. However, AAP is not a perfect measure
of a CCRC’s renewal because a low AAP could be a result of an expansion rather than renovation
of existing facilities.
AAP is expressed as a number of years rounded to one decimal place, i.e. 10.0 years. For example,
if the borrower had $15,000,000 in Accumulated Depreciation and $1,500,000 in Depreciation
Expense; Average Age of Plant would be displayed as 10.0 years.
22
RATIO 19: CAPITAL EXPENDITURES AS A PERCENTAGE OF
DEPRECIATION EXPENSE (CED)
FYE 2014 MEDIAN: 79%
Acquisition of PP&E
= CED
Depreciation Expense
For this ratio, a higher value represents a more favorable result. For FYE 2014, the CCRC
borrowers in our study had a Capital Expenditure as a Percentage of Depreciation (CED) ratio
median of 79%. The worst reported CED was 4%, while the highest was 589%. Please note that
in the chart below, the best bar has been cut off in order to better illustrate the differences in the
quartiles. We were unable to calculate CED for two borrowers because material non obligated
entities were included in the audited Acquisition of PP&E figure.
FYE 2014 Capital Expenditures as a Percentage of Depreciation by Quartile
Worst
All Borrowers
Investment Grade
Non-rated
4.0
17.0
4.0
First
Quartile
49.0
89.0
38.0
Second Quartile
(Median)
79.0
111.0
67.5
Third
Quartile
121.0
165.0
91.8
Best
589.0
589.0
482.0
The CED ratio is a tool for understanding the sufficiency of a CCRC’s annual reinvestment in
physical plant.
CED is expressed as a percentage rounded to the nearest whole number, e.g. 67%. For example,
if Acquisition of PP&E was $1,000,000 and Depreciation Expense was $1,500,000; CED would
be 67%.
23
ZIEGLER RESEARCH
ASSOCIATES
Edward Merrigan
Managing Director, Director of Municipal
Research
212-284-5451
[email protected]
Lavinia Criswell
Director, Senior Municipal Research Analyst
727-542-5755
[email protected]
Rebecca Greive
AVP, Municipal Research Analyst
312-596-1502
[email protected]
Jenny Dachowski
Municipal Research Analyst
414-978-6453
[email protected]
Mike Vitiello
Municipal Research Analyst
212-284-5419
[email protected]
Victoria Neitzel
Senior Research Website Administrator /
Research Associate
414-978-6464
[email protected]
Jill Kuehn
Research Assistant
414-978-6461
[email protected]
ZIEGLER RESEARCH
Ziegler Research is an assembly of financial and credit analysts committed to providing investors
with research on a selected sub-set of securities consisting of Ziegler-underwritten municipal
bonds issued to finance senior living and hospital capital projects, as well as the education and
housing sectors. Ziegler Research is separate from Ziegler’s investment banking and capital markets
businesses. The analysts rely only on publicly available information to generate opinions and
reports. The team’s published research carries an analyst certification as to the objectivity of the
opinions rendered. Analyst-certified research reports are accessible through ZieglerResearch.com (a
limited access, semi-public website), or through a Ziegler financial advisor.
ABOUT THE AUTHORS
Ed Merrigan, Managing Director of Ziegler Research, has provided analysis of
the municipal bond field since 1983 and was repeatedly voted for inclusion on
Institutional Investors annual All-American research team, being praised as one
of the most helpful and effective rating agency analysts in the industry. He has
more recently been annually voted the number one all-star in the senior living
field as ranked by Smith’s Research and Gradings. In May, 2010, the National
Federation of Municipal Analysts bestowed an Award of Excellence on Ed for his
efforts in research and disclosure.
Mike Vitiello joined Ziegler in April of 2013. He is primarily responsible for
continuously monitoring a portfolio of Ziegler and non-Ziegler underwritten
senior living and healthcare securities. Mike regularly authors borrower-specific,
analyst-certified, research reports, commenting on each borrower’s financial
condition and highlighting any significant changes for the benefit of investors
and Ziegler’s internal business groups. His responsibilities also include the
Ziegler Research annual CCRC Financial Ratio Median Analysis and the Default
Study, as well as maintaining certain aspects of the Continuing Disclosure Call
Program. Mike received a B.S.B.A. from Boston University in 2009, and holds a Series 7 license
from FINRA.
ZIEGLER
1185 Sixth Avenue, 32nd Floor
New York, NY 10036
800 366 8899
www.Ziegler.com
ANALYSTS CERTIFICATION
We, Edward Merrigan, and Mike Vitiello hereby certify that the views expressed in this research report accurately
reflect our personal views about the subject securities, issuers and borrowers. We also certify that no part of our
compensation was, is, or will be, directly or indirectly, related to the specific recommendation or view expressed
in this research report. The opinions expressed here reflect our judgment and are subject to change. This is not
a complete analysis of every material fact regarding any company, industry or security. Information has been
obtained from sources considered reliable, but Ziegler cannot guarantee the accuracy. Additional information is
available upon request. Other departments of Ziegler may have information, which is not available to Ziegler
Research, about companies mentioned in the report. Ziegler may execute transactions in the securities mentioned
in the report, which may not be consistent with the report conclusions. Past performance should not be taken as
an indication or guarantee of future performance. Ziegler may perform investment banking or other services for,
or solicit investment banking business from, any company mentioned in this report. This document may not be
reprinted without permission.
24
APPENDIX A
CCRC Borrower Audits Used in Ratio Calculations
Below is a listing of the borrowing entities whose financial results are part of this overall median
study. In many instances, these borrowers have multiple bond issues outstanding.
ACTS (Adult Communities Total Services) Retirement-Life Communities, Inc. West Point
PA
Aldersly Garden Retirement Community (CA)
San Rafael
CA
American Baptist Homes of the West (ABHOW) (subsidiary of Cornerstone
Affiliates)
Pleasanton
CA
Appalachian Christian Village Obligated Group (aka Christian Home for the
Aged, Inc.)
Johnson City
TN
Asbury Maryland Obligated Group (composed of Asbury Atlantic, Inc. and
Asbury-Solomons, Inc.) (subsidiary of Asbury Communities, Inc.)
Gaithersburg
MD
Asbury Pennsylvania Obligated Group (composed solely of Asbury Atlantic,
Inc.) (subsidiary of Asbury Communities, Inc.)
Gaithersburg
MD
Bartels Lutheran Retirement Community Obligated Group
Waverly
IA
Bayleigh Chase fka William Hill Manor (subsidiary of Integrace (fka Episcopal
Ministries to the Aging, Inc. - EMA))
Easton
MD
be.group (fka Southern California Presbyterian Homes Inc. (SCPH))
Glendale
CA
Bishop Spencer Place, Inc.
Kansas City
MO
Blakeford at Green Hills Corporation (Subsidiary of Blakeford, Inc.)
Nashville
TN
Blue Skies of Texas Obligated Group (fka Air Force Village Obligated Group)
San Antonio
TX
Bohemian Home for the Aged, Tabor Hills Health Care Facility, and Tabor
Hills Supportive Living Community LLC Obligated Group
Naperville
IL
Brethren Hillcrest Homes (CA)
LaVerne
CA
Brewster Place (aka The Congregational Home)
Topeka
KS
Buckingham Senior Living Community (aka The Buckingham) (subsidiary of
Senior Quality Lifestyles Corporation (SQLC))
Houston
TX
C.C. Young Memorial Home Obligated Group
Dallas
TX
Capital Manor, Inc.
Salem
OR
Carleton-Willard Village
Bedford
MA
Charlestown Community, Inc. (An Erickson Living Community fka An Erickson Retirement Community)
Catonsville
MD
Christian Care Centers Obligated Group (TX)
Mesquite
TX
Christian Homes, Inc. Obligated Group
Saint Louis
MO
Christian Living Communities, Inc. Obligated Group
Greenwood
Village
CO
Christwood (LA)
Covington
LA
Clark Retirement Community
Grand Rapids
MI
Concordia Life Care Community (OK) (aka Lutheran Senior Citizens, Inc.)
Oklahoma City
OK
Covenant Retirement Communities, Inc.
Skokie
IL
Crestview Retirement Community (aka MRC Crestview) (subsidiary of Methodist Retirement Communities (MRC))
Bryan
TX
Deerfield Episcopal Retirement Community, Inc. (NC)
Asheville
NC
Diakon Lutheran Social Ministries
Allentown
PA
25
26
Edgewater, A Wesley Active Life Community, LLC (subsidiary of Wesley
Retirement Services, Inc.)
West Des
Moines
IA
Eliza Jennings Obligated Group (Devon Oaks & The Renaissance) (fka Eliza
Jennings Senior Care Network)
Lakewood
OH
Emerald Heights (aka Eastside Retirement Association)
Redmond
WA
Episcopal Communities & Services For Seniors (fka Episcopal Home Communities)
Alhambra
CA
Fleet Landing (aka Naval Continuing Care Retirement Foundation, Inc.)
Atlantic Beach
FL
Forest at Duke, The
Durham
NC
Fox Run at Orchard Park (Subsidiary of United Church Home Society, Inc.)
(aka Orchard Park CCRC, Inc.)
Orchard Park
NY
Franciscan Communities, Inc. Obligated Group (subsidiary of Franciscan
Sisters of Chicago Service Corporation)
Homewood
IL
Friendship Village of Columbus
Columbus
OH
Friendship Village of Schaumburg (aka Evangelical Retirement Homes of
Greater Chicago, Inc.) (subsidiary of Friendship Senior Options, Inc.)
Schaumburg
IL
Friendship Village of Tempe (aka Tempe Life Care Village, Inc.)
Tempe
AZ
Front Porch Communities and Services (fka Internext Group)
Anaheim
CA
Goodwin House Incorporated
Alexandria
VA
Greencroft Obligated Group (IN) (sponsored by Greencroft Retirement Communities, Inc.)
Goshen
IN
Greenspring Village, Inc. (An Erickson Living Community fka An Erickson
Retirement Community) (Subsidiary of National Senior Campuses, Inc.)
Springfield
VA
Harrogate, Inc.
Lakewood
NJ
Harwood Place, Inc. (subsidiary of LutheranLiving Services)
Wauwatosa
WI
Heritage Community of Kalamazoo
Kalamazoo
MI
Holland Home Obligated Group (MI)
Grand Rapids
MI
Holy Cross Village at Notre Dame
Notre Dame
IN
Inverness Village (subsidiary of Asbury Communities, Inc.)
Tulsa
OK
Kahala Nui (aka Kahala Senior Living Community, Inc.)
Honolulu
HI
Kendal at Hanover (sponsored by The Kendal Corporation)
Hanover
NH
Kendal at Lexington Obligated Group (aka Lexington Retirement Community, Lexington
Inc. and Lexington Health Investors, LLC) (sponsored by The Kendal
Corporation)
VA
Kendal at Oberlin (sponsored by The Kendal Corporation)
OH
Kendal
Kirby Pines Retirement Community (aka Psalms, Inc.)
Memphis
TN
Lakeview Village, Inc.
Lenexa
KS
Legacy at Willow Bend Retirement Community, Inc.
Plano
TX
Lifespace Communities, Inc. (fka Life Care Retirement Communities (LCRC)) Des Moines
(Affiliate of Deerfield Retirement Community)
IA
Linden Ponds Inc. (An Erickson Living Community fka An Erickson
Retirement Community) (Subsidiary of National Senior Campuses, Inc.)
Hingham
MA
Lutheran Community at Telford
Telford
PA
Lutheran Senior Services (LSS) Obligated Group
St. Louis
MO
Lutheran Social Services of the South, Inc. (LSSS)
Austin
TX
Meadowlark Hills Retirement Community (aka Manhattan Retirement
Foundation, Inc.)
Manhattan
KS
Milwaukee Protestant Home, Inc. & Eastcastle Place, Inc. Obligated Group
Milwaukee
WI
Montgomery Place
Chicago
IL
Nazareth Living Center (50/50 subsidiary of Benedictine Health System &
Sisters of St. Joseph of Carondelet)
St. Louis
MO
Oak Crest Village, Inc. (An Erickson Living Community fka An Erickson
Retirement Community) (Subsidiary of National Senior Campuses, Inc.)
Baltimore
MD
Ohio Presbyterian Retirement Services - OPRS (aka Midwest Presbyterian
Senior Services)
Columbus
OH
Peace Village & Circle Inn (fka Peace Memorial Ministries)
Palos Park
IL
Penney Retirement Community, Inc.
Penney Farms
FL
Pennybyrn at Maryfield (NC) (aka Maryfield, Inc.) (sponsored by the
Congregation of the Poor Servants of the Mother of God)
High Point
NC
Plymouth Place, Inc.
LaGrange Park
IL
Presbyterian Retirement Communities Northwest (PRCN)
Seattle
WA
Presbyterian Retirement Communities Obligated Group (FL)
Orlando
FL
Querencia at Barton Creek (aka Barton Creek Senior Living Community,
Inc.) (subsidiary of Senior Quality Lifestyles Corporation (SQLC))
Austin
TX
Redstone Village (subsidiary of Redstone Military Retirement Residence
Association)
Huntsville
AL
Ridgecrest Village (aka Christian Retirement Homes, Inc.)
Davenport
IA
Saint Johns Communities, Inc. (aka Saint Johns on the Lake)
Milwaukee
WI
Santa Marta (aka Catholic Care Campus) (sponsored by the Archdiocese of
Kansas City)
Overland Park
KS
Seabrook Village, Inc. (An Erickson Living Community fka An Erickson
Retirement Community) (Subsidiary of National Senior Campuses, Inc.)
Tinton Falls
NJ
Senior Quality Lifestyles Corporation (SQLC) and Edgemere (aka Northwest Dallas
Senior Housing Corporation) Obligated Group
TX
Shell Point/Alliance Obligated Group (aka The Christian and Missionary
Alliance Foundation, Inc., and The Alliance Community for Retirement
Living, Inc.)
FL
Ft. Myers
Sierra Winds (aka Arizona Retirement Centers, Inc.)
Peoria
AZ
Smith Village (aka Washington and Jane Smith Community-Beverly)
(subsidiary of Smith Senior Living)
Chicago
IL
Southminster, Inc.
Charlotte
NC
Spring Harbor at Green Island
Columbus
GA
St. James Place of Baton Rouge
Baton Rouge
LA
Terwilliger Plaza
Portland
OR
Three Crowns Park (subsidiary of Three Crowns Foundation)
Evanston
IL
United Methodist Retirement Homes (UMRH) (NC)
Durham
NC
Vantage House (aka Columbia Vantage House Corporation)
Columbia
MD
Village on the Isle (aka Southwest Florida Retirement Center, Inc.)
Venice
FL
Wake Robin Corporation (VT)
Shelburne
VT
Well-Spring Retirement Community
Greensboro
NC
Wesley Enhanced Living Obligated Group
Philadelphia
PA
Wesley Homes
Des Moines
WA
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