Segment Information
Each of our owned communities are identified as individual operating segments and we combine them into a single reportable segment for reporting purposes under ASC 280. We measure the segment based on resident revenue less community operating expense, (adjusted for various non-recurring non-operating community expenses), which we define as community net operating income (“NOI”), as well as some key performance indicators such as weighted average occupancy and a measurement of average rent per available unit. All other operating segments represent the managed communities, which consist of management fees and the related managed community reimbursement revenues and expenses.
Our Chief Executive Officer, is our chief operating decision maker (“CODM”), who organizes our company, manages resource allocations and measures performance among our one reportable segment. The CODM uses community NOI by property to allocate operating and capital resources and assesses performance of the segment by comparing actual NOI results to historical results and previously forecasted financial information. Our CODM manages our business by reviewing annual forecasts and segment results on a monthly basis. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. The total investment in equity method investments and capital expenditures are presented on the consolidated financial statements.
The following table presents resident revenue, community operating expense and community net operating income by reportable segment (in thousands):
| | | | | | | | | | | | | | |
| | Years ended December 31, |
| | 2025 | | 2024 |
| Resident revenue | | 331,957 | | | 267,849 | |
| Community operating expense: | | | | |
| Labor | | 160,925 | | | 126,730 | |
| Food | | 15,477 | | | 13,807 | |
| Utilities | | 15,558 | | | 12,701 | |
Other community operating expense (1) | | 56,512 | | | 45,943 | |
| Total community operating expense | | 248,472 | | | 199,181 | |
| Community net operating income | | $ | 83,485 | | | $ | 68,668 | |
__________
(1) Includes community maintenance, software expense, supplies, insurance, real estate taxes, marketing expense, and other overhead expense.
A reconciliation of segment revenues to consolidated total revenues for 2025 and 2024 is as follows (in thousands):
| | | | | | | | | | | | | | |
| | Years ended December 31, |
| | 2025 | | 2024 |
| Segment resident revenue | | 331,957 | | | 267,849 | |
| All other revenue: | | | | |
| Management fees | | 4,431 | | | 3,381 | |
| Managed community reimbursement revenue | | 44,753 | | | 33,096 | |
| Total revenues | | $ | 381,141 | | | $ | 304,326 | |
A reconciliation of segment net operating income to the Company’s consolidated statements of operations for 2025 and 2024 is as follows (in thousands):
| | | | | | | | | | | | | | |
| | Years ended December 31, |
| | 2025 | | 2024 |
| Segment net operating income | | $ | 83,485 | | | $ | 68,668 | |
| Management fees | | 4,431 | | | 3,381 | |
| Other operating expenses | | (4,749) | | | (2,834) | |
| General and administrative expense | | (39,851) | | | (34,123) | |
| Transaction, transition and restructuring costs | | (16,231) | | | (5,874) | |
| Depreciation and amortization expense | | (56,768) | | | (44,051) | |
| | | | |
| Long-lived asset impairment | | (12,525) | | | — | |
| Interest income | | 2,103 | | | 1,681 | |
| Interest expense | | (38,635) | | | (36,990) | |
| Gain on extinguishment of debt, net | | — | | | 48,536 | |
| Loss from equity method investment | | (1,370) | | | (895) | |
| Other expense, net | | 7,948 | | | (540) | |
| Provision for income taxes | | (330) | | | (239) | |
| Net Loss | | $ | (72,492) | | | $ | (3,280) | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.