Basis of Presentation and Organization General The accompanying condensed consolidated financial statements of Five Star Senior Living Inc. and its subsidiaries, or we, us or our, are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying financial statements should be read in conjunction with the financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2018 , or our Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. Certain reclassifications have been made to the prior years condensed consolidated financial statements to conform to the current years presentation. We operate senior living communities, including independent living communities, assisted living communities and skilled nursing facilities, or SNFs. As of June 30, 2019 , we operated 282 senior living communities located in 33 states with 31,996 living units, including 256 primarily independent and assisted living communities with 29,768 living units and 26 SNFs with 2,228 living units. As of June 30, 2019 , we owned and operated 20 of these senior living communities ( 2,108 living units), we leased and operated 185 of these senior living communities ( 19,804 living units) and we managed 77 of these senior living communities ( 10,084 living units). Our 282 senior living communities, as of June 30, 2019 , included 11,134 independent living apartments, 16,470 assisted living suites and 4,392 SNF units. The foregoing numbers exclude living units categorized as out of service. Going Concern The accompanying condensed consolidated financial statements have been prepared on the basis that we will continue as a going concern, which accordingly assumes, among other things, the realization of assets and the satisfaction of liabilities in the ordinary course of business. We previously determined that, as of May 8, 2019, a substantial doubt existed regarding our ability to continue as a going concern. We had made this determination based on the following factors, among others: we face increased competition across the senior living industry, including in specific markets in which we operate senior living communities; medical advances and healthcare services allow some potential residents to defer the time when they require the special services available at our communities; low unemployment in the United States combined with a competitive labor market within our industry are increasing our employment costs; we have a significant accumulated deficit and we have incurred operating losses in each of the last three fiscal years; we did not expect to be able to pay our full rent obligations during the first quarter of 2019, absent rent relief from Senior Housing Properties Trust, or, together with its subsidiaries, SNH; and our then existing $54,000 secured revolving credit facility, or our prior credit facility, was fully drawn and scheduled to expire on June 28, 2019. Since March 31, 2019, we have taken significant actions to address our operating and liquidity challenges. As a result, even though challenging conditions in the senior living industry continue to exist, there no longer exists a substantial doubt about our ability to continue as a going concern for the next 12 months. We currently operate 258 senior living communities under lease and management arrangements with SNH, or approximately 91.5% of the total communities we operate. In order to address our ongoing operating and liquidity challenges, on April 1, 2019, we entered into a transaction agreement with SNH, or the Transaction Agreement, pursuant to which we and SNH agreed to modify our existing business arrangements, subject to certain conditions and the receipt of various approvals. As part of these modifications, (1) commencing February 1, 2019 through December 31, 2019, the aggregate amount of monthly minimum rent payable to SNH by us under our master leases with SNH was reduced to $11,000 , and, as our stockholders approved the issuances of our common shares to SNH and SNHs shareholders pursuant to the Transaction Agreement, our monthly minimum rent payable to SNH under our existing master leases with SNH will remain at $11,000 , subject to adjustment, regardless of whether the Transaction Agreement is extended and/or is terminated, and (2) no additional rent is payable to SNH by us from February 1, 2019 to January 1, 2020 (or January 1, 2021, if extended under the Transaction Agreement), or the Conversion Time, subject to possible extension. Also on April 1, 2019, pursuant to the Transaction Agreement, SNH purchased from us approximately $50,000 of unencumbered fixed assets and improvements related to SNH's senior living communities leased and operated by us, which amount was subsequently reduced to $49,155 due to the exclusion of certain fixed assets in accordance with the Transaction Agreement. SNH also extended to us a $25,000 line of credit that matures on January 1, 2020, subject to extension. As of June 30, 2019 and August 6, 2019, we had no borrowings outstanding under this line of credit. Other significant pending transactions are also contemplated by the Transaction Agreement. For more information regarding the Transaction Agreement and related agreements and the transactions contemplated thereby, see Note 9. On June 12, 2019, we entered into a second amended and restated credit agreement with Citibank, N.A., as administrative agent and lender, and a syndicate of other lenders, or our credit agreement, pursuant to which we have a $65,000 secured revolving credit facility, or our credit facility, that is available for general business purposes. Our credit facility replaced our prior credit facility, which was scheduled to expire on June 28, 2019. During June 2019, we repaid, in aggregate, $51,484 of outstanding borrowings under our credit facility. As of June 30, 2019 and August 6, 2019, we had no borrowings outstanding under our credit facility. For more information regarding our credit agreement, our credit facility and our prior credit facility, see Note 8. Segment Information As of June 30, 2019 , we have two operating segments: senior living communities and rehabilitation and wellness. In the senior living community segment, we operate for our own account or manage for the account of others independent living communities, assisted living communities and SNFs that are subject to centralized oversight and provide housing and services to elderly residents. In the rehabilitation and wellness operating segment we provide therapy services, including physical, occupational, speech and other specialized therapy services, in the inpatient setting and in outpatient clinics. We have determined that our two operating segments meet the aggregation criteria as prescribed under Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 280, Segment Reporting , and we have therefore determined that our business is comprised of one reportable segment, senior living. All of our operations and assets are located in the United States, except for the operations of our Cayman Islands organized captive insurance company subsidiary, which participates in our workers compensation, professional and general liability and certain automobile insurance programs.