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the impacts of the COVID-19 pandemic, including the response efforts of federal, state, and local government authorities, businesses, individuals and us, on our business, results of operations, cash flow, liquidity, and our strategic initiatives, including plans for future growth, which will depend on many factors, some of which cannot be foreseen, including the duration, severity, and breadth of the pandemic and any resurgence of the disease, the impact of COVID-19 on the nation's economy and debt and equity markets and the local economies in our markets, the development and availability of COVID-19 testing, therapeutic agents, and vaccines and the prioritization of such resources among businesses and demographic groups, government financial and regulatory relief efforts that may become available to business and individuals, including our ability to qualify for and satisfy the terms and conditions of financial relief;
−Removed: perceptions regarding the safety of senior living communities during and after the pandemic, changes in demand for senior living communities and our ability to adapt our sales and marketing efforts to meet that demand, changes in the acuity levels of our new residents, the disproportionate impact of COVID-19 on seniors generally and those residing in our communities, the duration and costs of our response efforts, including increased equipment, supplies, labor, litigation, testing, and other expenses, the impact of COVID-19 on our ability to complete financings, refinancings, or other transactions (including dispositions) or to generate sufficient cash flow to cover required interest and lease payments and to satisfy financial and other covenants in our debt and lease documents, increased regulatory requirements, including unfunded mandatory testing, increased and enforcement actions resulting from COVID-19, including those that may limit our collection efforts for delinquent accounts and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or our response efforts;
+Added: perceptions regarding the safety of senior living communities during and after the pandemic, changes in demand for senior living communities and our ability to adapt our sales and marketing efforts to meet that demand, changes in the acuity levels of our new residents, the disproportionate impact of COVID-19 on seniors generally and those residing in our communities, the duration and costs of our response efforts, including increased equipment, supplies, labor, litigation, testing, and other expenses, the impact of COVID-19 on our ability to complete financings, refinancings, or other transactions (including dispositions) or to generate sufficient cash flow to cover required interest and lease payments and to satisfy financial and other covenants in our debt and lease documents, increased regulatory requirements, including unfunded mandatory testing, increased enforcement actions resulting from COVID-19, including those that may limit our collection efforts for delinquent accounts and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or our response efforts;
events which adversely affect the ability of seniors to afford resident fees, including downturns in the economy, housing markets, consumer confidence or the equity markets and unemployment among family members, which may be adversely impacted by the pandemic;
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the effect of our non-compliance with any of our debt or lease agreements (including the financial covenants contained therein), including the risk of lenders or lessors declaring a cross default in the event of our non-compliance with any such agreements and the risk of loss of our property securing leases and indebtedness due to any resulting lease terminations and foreclosure actions;
−Removed: the effect of our borrowing base calculations and our consolidated fixed charge coverage ratio on availability under our revolving credit facility;
the potential phasing out of LIBOR which may increase the costs of our debt obligations;
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conditions of housing markets, regulatory changes, acts of nature, and the effects of climate change in geographic areas where we are concentrated;
−Removed: terminations of our resident agreements and vacancies in the living
−Removed: spaces we lease, which may be adversely impacted by the pandemic;
+Added: terminations of our resident agreements and vacancies in the living spaces we lease, which may be adversely impacted by the pandemic;
departures of key officers and potential disruption caused by changes in management;
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We cannot guarantee future results, levels of activity, performance or achievements, and, except as required by law, we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or change in events, conditions, or circumstances on which any statement is based.
−Removed: As of June 30, 2020 , we are the largest operator of senior living communities in the United States based on total capacity, with 737 communities in 44 states and the ability to serve approximately 65,000 residents.
+Added: As of September 30, 2020, we are the largest operator of senior living communities in the United States based on total capacity, with 726 communities in 44 states and the ability to serve approximately 65,000 residents.
We offer our residents access to a broad continuum of services across the most attractive sectors of the senior living industry.
−Removed: We operate and manage independent living, assisted living, memory care, and continuing care retirement communities ("CCRCs").
+Added: W e operate and manage independent living, assisted living, memory care, and co ntinuing care retirement communities ("CCRCs").
We also offer a range of home health, hospice, and outpatient therapy services to more than 17,000 patients as of that date.
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We have enhanced and reinforced training our associates in such protocols.
−Removed: Seeking to prevent the introduction of COVID-19 into our communities, and to help control further exposure to infections within communities, in March 2020 we began restricting visitors at all our communities to essential healthcare personnel and certain compassionate care situations, screening associates and permitted visitors, suspending group outings, modifying communal dining and programming to comply with social distancing guidelines and, in most cases, implementing in-room only dining and activities programming, requesting that residents refrain from leaving the community unless medically necessary, and requiring new residents and residents returning from a hospital or nursing home to isolate in their apartment for fourteen days.
Upon confirmation of positive COVID-19 exposure at a community, we follow government guidance regarding minimizing further exposure, including associates' adhering to personal protection protocols, restricting new resident admissions, and in some cases isolating residents.
+Added: Seeking to prevent the introduction of COVID-19 into our communities, and to help control further exposure to infections within communities, in March 2020 we began restricting visitors at all our communities to essential healthcare personnel and certain compassionate care situations, screening associates and permitted visitors, suspending group outings, modifying communal dining and programming to comply with social distancing guidelines and, in most cases, implementing in-room only dining and activities programming, requesting that residents refrain from leaving the community unless medically necessary, and requiring new residents and residents returning from a hospital or nursing home to isolate in their apartment for fourteen days.
These restrictions were in place across our portfolio for the three months ended June 30, 2020.
−Removed: More recently, in response to federal, state, and local efforts to reopen the economies surrounding our communities, we have adopted a framework for determining when to ease restrictions at each of our communities based on several criteria, including regulatory requirements and guidance, completion of baseline testing at the community, and the community having no current confirmed positive COVID-19 cases.
−Removed: Beginning in July 2020, we began offering residents at some of our communities outdoor visits with families, reduced capacity communal dining, and limited communal activities programming.
−Removed: Due to the vulnerable nature of our residents, we expect many of the foregoing restrictions will continue at our communities for some time, even as federal, state, and local stay-at-home and social distancing orders and recommendations are relaxed.
+Added: We have adopted a framework for determining when to ease restrictions at each of our communities based on several criteria, including regulatory requirements and guidance, completion of baseline testing at the community, and the community having no current confirmed positive COVID-19 cases.
+Added: Under this framework, we began easing restrictions on a community-by-community basis in July 2020 where regulatory requirements and guidance allow, which easing may have included permitting outdoor, and in some cases, indoor visits with families, reduced capacity communal dining, limited communal activities programming, and in-person prospective resident visits.
+Added: Due to the vulnerable nature of our residents, we expect restrictions at our communities to continue for some time, and we may revert to more restrictive measures if the pandemic worsens or as necessary to comply with regulatory requirements.
In April 2020, we proactively commenced a resident and associate testing program for our communities.
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We undertook the program to identify positive, but asymptomatic, individuals, to better understand how our infection protocols are working, and to help minimize the exposure to residents and associates of someone known to be COVID-19 positive.
−Removed: We have completed baseline testing at all of our communities.
−Removed: To date, the program has accumulated over 100,000 test results.
−Removed: Less than 1% of our residents as of July 31, 2020 are currently confirmed positive for COVID-19.
−Removed: Based on results of our program and other testing, around 3% of our residents who have lived with us anytime during 2020 have tested positive.
−Removed: Further testing, whether undertaken proactively or as a result of regulatory requirements, may result in significant additional expense, additional temporary restrictions on move-ins at affected
−Removed: communities, continued need for isolating positive residents, increased use of personal protection equipment by our associates, and increased labor costs.
−Removed: The pandemic and related infection prevention and control protocols within senior living communities have significantly disrupted demand for senior living communities and the sales process, which typically includes in-person prospective resident visits within communities.
+Added: In July 2020, we completed baseline testing at all of our communities.
+Added: Through October 31, 2020, our testing program has accumulated more than 185,000 test results.
+Added: Approximately 1% of our residents had current COVID-19 positive test results on October 31, 2020.
+Added: Further testing, whether undertaken proactively or as a result of regulatory requirements, may result in significant additional expense, additional temporary restrictions on move-ins at affected communities, continued need for isolating positive residents, increased use of personal protection equipment by our associates, and increased labor costs.
+Added: The pandemic, including the related restrictions at our communities, have significantly disrupted demand for senior living communities and the sales process, which typically includes in-person prospective resident visits within communities.
We believe potential residents and their families are more cautious regarding moving into senior living communities while the pandemic continues, and such caution may persist for some time.
In response to these developments, we have redesigned our sales process to include virtual tours, video engagement, and outdoor prospective resident meetings, enhanced and adapted our marketing programs to address the social distancing environment, and sought to strengthen our relationships with referral partners.
+Added: During the third quarter of 2020, we returned to using in-person prospective resident visits for a majority of our communities.
+Added: However, several large markets continue with virtual-only prospective resident visits.
+Added: Restrictions on move-ins were eased at our communities beginning in July 2020, with approximately 98% of our communities accepting new residents by the end of September 2020 compared to 86% of our communities as of June 30, 2020.
+Added: On October 31, 2020, we are accepting new residents to 95% of our communities.
We cannot predict with reasonable certainty whether or when demand for senior living communities will return to pre-COVID-19 levels or the extent to which the pandemic’s effect on demand may adversely affect the amount of resident fees we are able to collect from our residents.
−Removed: We are accepting new residents to most of our communities, which as of July 31, 2020 includes 85% of our communities.
−Removed: The pandemic and our response efforts began to adversely impact our occupancy and resident fee revenue significantly during March 2020, as new resident leads, visits (including virtual visits), and move-in activity declined significantly compared to typical levels.
−Removed: During the three months ended June 30, 2020, the year-over-year decrease in monthly move-ins of our same-community portfolio ranged from approximately 65% in April 2020 to approximately 35% in June 2020, and was approximately 40% for July 2020.
−Removed: Lower move-in activity was partially offset by lower than normal controllable move-out activity.
−Removed: As a result, our same community weighted average monthly occupancy declined from 83.0% in March 2020 to 77.8% in June 2020, and was 76.8% in July 2020.
−Removed: We estimate that the pandemic and our response efforts resulted in $43.1 million of lost resident fee revenue in our same-community portfolio for the three months ended June 30, 2020.
+Added: The pandemic, including the related restrictions at our communities, began to adversely impact our occupancy and resident fee revenue significantly during March 2020, as new resident leads, visits (including virtual visits), and move-in activity declined significantly compared to typical levels.
+Added: The year-over-year decrease in monthly move-ins of our same community portfolio has moderated from 64.2% in April 2020 to 22.9% in September 2020, and move-ins for the third quarter of 2020 improved 38.0% sequentially from the second quarter of 2020.
+Added: Despite the slowing pace of reduced move-ins, our same community weighted average occupancy has declined in each month of the pandemic, from 83.0% in March 2020 to 74.4% in September 2020, and was 74.0% in October 2020.
+Added: We estimate that the pandemic, including the related restrictions at our communities, resulted in $70.8 million and $115.8 million of lost resident fee revenue in our same community portfolio for the three and nine months ended September 30, 2020, respectively.
Further deterioration of our resident fee revenue will result from lower move-in activity and the resident attrition inherent in our business, which may increase due to the impacts of COVID-19.
Lower controllable move-out activity during the pandemic may continue to partially offset future adverse revenue impacts.
−Removed: Our home health average daily census also began to decrease in March 2020 due to lower occupancy in our communities and fewer elective medical procedures and hospital discharges, resulting in an 18.7% year-over-year decline in home health average daily census for the three months ended June 30, 2020.
−Removed: We expect home health average daily census to begin to recover during the six months ended December 31, 2020 with gradual improvements to elective medical procedures, hospital discharges, and senior housing occupancy.
−Removed: Facility operating expense for the three and six months ended June 30, 2020 includes $60.6 million and $70.6 million , respectively, of incremental direct costs to prepare for and respond to the pandemic, including costs for acquisition of additional personal protective equipment ("PPE"), medical equipment, and cleaning and disposable food service supplies, enhanced cleaning and environmental sanitation costs, increased labor expense, increased workers compensation and health plan expense, increased insurance premiums and retentions, consulting and professional services costs, and costs for COVID-19 testing of residents and associates where not otherwise covered by government payor or third-party insurance sources.
+Added: Our home health average daily census also began to decrease in March 2020 due to lower occupancy in our communities and fewer elective medical procedures and hospital discharges, resulting in a 14.4% year-over-year decline in home health average daily census for the three months ended September 30, 2020.
+Added: We expect home health average daily census to continue to gradually recover sequentially with increased elective medical procedures and hospital discharges and senior housing occupancy.
+Added: Facility operating expense for the three and nine months ended September 30, 2020 includes $24.5 million and $95.1 million, respectively, of incremental direct costs to prepare for and respond to the pandemic, including costs for:
+Added: acquisition of additional personal protective equipment ("PPE"), medical equipment, and cleaning and disposable food service supplies, enhanced cleaning and environmental sanitation, increased labor, increased workers compensation and health plan expense, consulting and professional services, and COVID-19 testing of residents and associates where not otherwise covered by government payor or third-party insurance sources.
We are not able to reasonably predict the total amount of costs we will incur related to the pandemic, and such costs are likely to be substantial.
−Removed: As described further below, we also recorded non-cash impairment charges in our operating results of $76.7 million for the three months ended March 31, 2020 for our operating lease right-of-use assets and property, plant and equipment and leasehold intangibles, primarily due to the COVID-19 pandemic and lower than expected operating performance at communities for which assets were impaired.
+Added: As described further below, we also recorded non-cash impairment charges in our operating results of $95.2 million for the nine months ended September 30, 2020 for our operating lease right-of-use assets and property, plant and equipment and leasehold intangibles, primarily due to the COVID-19 pandemic and lower than expected operating performance at communities for which assets were impaired.
We have taken, and continue to take, actions to enhance and preserve our liquidity in response to the pandemic.
−Removed: We drew $166.4 million on our revolving credit facility, in March 2020, and we suspended repurchases under our existing share repurchase program.
−Removed: During the three months ended June 30, 2020, we accepted $33.5 million of cash for grants under the Public Health and Social Services Emergency Fund (the “Emergency Fund”) and $85.0 million of accelerated/advanced Medicare payments, and we deferred $26.5 million of the employer portion of social security payroll taxes.
+Added: During the nine months ended September 30, 2020, we have completed our financing plans in the regular course of business, including refinancing substantially all of our remaining 2020 and 2021 maturities.
+Added: In addition, on August 31, 2020, we terminated our $250 million revolving credit facility and obtained $266.9 million of non-recourse mortgage financing on 16 communities, most of which had secured the credit facility prior to its termination.
+Added: See Note 10 for further information regarding our financings.
+Added: During the nine months ended September 30, 2020, we accepted $36.1 million of cash for grants under the Public Health and Social Services Emergency Fund (the "Provider Relief Fund") and $87.5 million of accelerated/advanced Medicare payments, and we deferred $50.1 million of the employer portion of social security payroll taxes.
Each of these programs were created or expanded under the Coronavirus Aid, Relief, and Economic Security Act of 2020 ("CARES Act"), as described below.
−Removed: We also have delayed or canceled a number of elective capital expenditure projects resulting in an approximate $50 million reduction to our pre-pandemic full-year 2020 capital expenditure plans.
−Removed: On July 26, 2020, we entered into definitive agreements with Ventas, Inc.
−Removed: ("Ventas") to restructure our 120 community (10,174 units) triple-net master lease arrangements as further described below.
−Removed: Pursuant to the multi-part transaction, among other things, we paid a $119.2 million one-time cash payment to Ventas, reduced our initial annual minimum rent under the amended and restated master lease to $100 million effective July 1, 2020, and removed the prior requirements that we satisfy financial covenants and that we maintain a security deposit with Ventas.
−Removed: The annual minimum rent under the amended and restated master lease reflects a reduction of approximately $86 million over the next twelve months.
−Removed: As of June 30, 2020, our total liquidity was $600.2 million , consisting of $452.4 million of unrestricted cash and cash equivalents, $109.9 million of marketable securities, and $37.9 million of additional availability on our revolving credit facility.
−Removed: As of June 30, 2020, $166.4 million of borrowings were outstanding on the revolving credit facility.
−Removed: We continue to seek opportunities to enhance and preserve our liquidity, including through reducing expenses and elective capital expenditures, continuing to evaluate
−Removed: our financing structure and the state of debt markets, and seeking further government-sponsored financial relief related to the COVID-19 pandemic.
−Removed: During March 2020, we completed our financing plans in the regular course of business, including closing three non-recourse mortgage debt financing transactions totaling $208.5 million with the proceeds used to refinance the majority of our 2020 maturities and to partially fund our acquisitions of 26 communities completed during the three months ended March 31, 2020.
−Removed: As of June 30, 2020 , our remaining 2020 and 2021 maturities (after giving effect to the multi-part transaction with Ventas on July 26, 2020) are $36.4 million and $254.1 million, respectively, which are primarily non-recourse mortgage debt maturities.
−Removed: Availability under the revolving credit facility will vary from time to time based on borrowing base calculations related to the appraised value and performance of the communities securing the credit facility and our consolidated fixed charge coverage ratio.
−Removed: To the extent the outstanding borrowings on the credit facility exceed future borrowing base calculations, we would be required to repay the difference to restore the outstanding balance to the new borrowing base.
−Removed: During 2019, the parties entered into an amendment to the credit facility agreement that provides for availability calculations to be made at additional consolidated fixed charge coverage ratio thresholds, with a minimum required consolidated fixed charge coverage ratio of 1.00.
−Removed: For the twelve months ended June 30, 2020, the consolidated fixed charge coverage ratio was 1.28.
−Removed: Due primarily to the impacts of the COVID-19 pandemic, and based upon our current estimate of cash flows, we have determined that it is probable that we will not satisfy the minimum consolidated fixed charge coverage ratio covenant under the credit facility for one or more quarterly determination dates in the first half of 2021 without further action on our part.
−Removed: Failure to satisfy the minimum ratio would result in the availability under the revolving credit facility being reduced to zero and a requirement to repay the $166.4 million of borrowings outstanding on the revolving credit facility.
−Removed: As a result, we have continued efforts on our plan to refinance the assets currently securing the credit facility.
−Removed: We currently anticipate that such refinancings will be completed and the proceeds of such refinancings, together with cash on hand, will be sufficient to repay the $166.4 million balance on the revolving credit facility and terminate the facility without payment of a premium or penalty.
−Removed: However, there can be no assurance that any such additional financing will be available or on terms that are acceptable to us, in which case we would expect to take other mitigating actions prior to the maturity dates.
−Removed: Based upon our current liquidity and estimated cash flows, we have estimated that we would be unable to repay a portion of the 2021 maturities and the borrowings outstanding on the revolving credit facility as they become due without refinancing these maturities or obtaining additional financing proceeds.
−Removed: We have continued efforts on our plan to refinance the assets currently securing the credit facility and to refinance the substantial majority of the remaining 2020 and 2021 maturities with non-recourse mortgage debt.
−Removed: We currently anticipate that it is probable that such refinancings will be completed and the proceeds of such refinancings, together with cash on hand, will be sufficient to repay the $166.4 million balance on the revolving credit facility and terminate the facility without payment of a premium or penalty and to pay our contractual obligations as they come due over the next twelve months.
−Removed: However, there is no assurance that debt financing will continue to be available on terms consistent with our expectations or at all, in which case we would expect to take other mitigating actions prior to the maturity dates.
+Added: We also have delayed or canceled a number of elective capital expenditure projects, resulting in an approximate $65 million reduction to our pre-pandemic full-year 2020 capital expenditure plans, and suspended repurchases under our existing share repurchase program.
+Added: On July 26, 2020, we restructured our 120 community triple-net master lease with Ventas, Inc.
+Added: ("Ventas") in a multipart transaction.
+Added: The components included, among other things, reducing our initial annual minimum rent to $100 million, representing a reduction of approximately $86 million over the twelve months ending June 30, 2021, and removal of the prior
+Added: requirements that we satisfy financial covenants and maintain a security deposit with Ventas.
+Added: We paid a $119.2 million one-time cash lease payment to Ventas in connection with our lease restructuring transaction effective July 26, 2020.
+Added: See "Transaction Activity and Impact of Dispositions on Results of Operations" below for more information about the Ventas restructuring.
+Added: As of September 30, 2020, our total liquidity was $490.7 million, consisting of $354.6 million of unrestricted cash and cash equivalents, and $136.1 million of marketable securities.
+Added: We continue to seek opportunities to enhance and preserve our liquidity, including through reducing expenses and elective capital expenditures, continuing to evaluate our financing structure and the state of debt markets, and seeking further government-sponsored financial relief related to the COVID-19 pandemic.
+Added: There is no assurance that debt financing will continue to be available on terms consistent with our expectations or at all, or that our efforts will be successful in seeking further government-sponsored financial relief or regarding the amount of, or conditions required to qualify for, any such relief.
In response to the pandemic, on March 27, 2020, the President signed the CARES Act into law, which was amended and expanded by the Paycheck Protection Program and Health Care Enhancement Act signed into law on April 24, 2020.
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The impacts to us of certain provisions of the CARES Act are summarized below.
−Removed: During the three months ended June 30, 2020 , we accepted $33.5 million of cash for grants from the Emergency Fund, which was expanded by the CARES Act to provide grants or other funding mechanisms to eligible healthcare providers for healthcare related expenses or lost revenues attributable to COVID-19.
−Removed: Approximately $28.8 million of the grants were made available pursuant to the Emergency Fund’s general distribution, with grant amounts based primarily on our relative share of aggregate 2019 Medicare fee-for-service reimbursements and generally related to home health, hospice, outpatient therapy, and skilled nursing care provided through our Health Care Services and CCRCs segments.
−Removed: Approximately $4.7 million of the grants were made available pursuant to the Emergency Fund’s targeted allocation for certified skilled nursing facilities, with amounts determined using a per-facility and per-bed model.
−Removed: During July 2020, we applied for additional grants pursuant to the Emergency Fund’s Medicaid and CHIP allocation.
−Removed: The amount of such grants are expected to be based on 2% of a portion of our 2018 gross revenues from patient care, and we expect to receive up to approximately $50 million of grants from this allocation.
−Removed: The grants received are subject to the terms and conditions of the program, including that such funds may only be used to prevent, prepare for, and respond to COVID-19 and will reimburse only for healthcare related expenses or lost revenues that are attributable to COVID-19.
−Removed: During the three months ended June 30, 2020, we recognized $26.4 million of the grants as
−Removed: other operating income based upon our estimates of our satisfaction of the conditions of the grants during such period.
−Removed: As of June 30, 2020, $7.1 million of unrecognized grants were included in refundable fees and deferred revenue within our condensed consolidated balance sheets and are expected to be recognized in other operating income during the six months ended December 31, 2020.
−Removed: HHS continues to evaluate and provide allocations of, and regulation and guidance regarding, grants made under the Emergency Fund.
−Removed: We intend to pursue additional funding that may become available pursuant to the Emergency Fund.
−Removed: However, there can be no assurance that we will qualify for, or receive, grants in the amount we expect or that future funding programs will be made available for which we qualify.
−Removed: During the three months ended June 30, 2020 , we received $85.0 million under the Accelerated and Advance Payment Program administered by CMS, which was temporarily expanded by the CARES Act.
−Removed: Recoupment of accelerated/advanced payments are required to begin 120 days after their issuance through offsets of new Medicare claims, and all accelerated/advanced payments are due 210 days following their issuance.
+Added: • During the three and nine months ended September 30, 2020, we accepted $2.6 million and $36.1 million o f cash for grants from the Provider Relief Fund, respectively, which was expanded by the CARES Act to provide grants or other funding mechanisms to eligible healthcare providers for healthcare related expenses or lost revenues attributable to COVID-19.
+Added: The accepted grants were made available pursuant to the following distributions from the Provider Relief Fund:
+Added: • $28.9 million pursuant to the Phase 1 General Distribution, which generally related to home health, hospice, outpatient therapy, and skilled nursing care provided through our Health Care Services and CCRCs segments.
+Added: • $4.6 million pursuant to the Skilled Nursing Facility Targeted Distribution, which generally related to our certified skilled nursing facilities.
+Added: • $2.6 million pursuant to the Nursing Home Infection Control Distribution, which related to our skilled nursing care provided through our CCRCs segments.
+Added: Further funding may become available to us from this distribution based on an incentive program that measures skilled nursing facilities’ COVID-19 infection rates and mortality.
+Added: We have applied for additional grants pursuant to the Provider Relief Fund's Phase 2 General Distribution, generally related to our senior housing segments.
+Added: The amount of such grants are expected to be based on 2% of a portion of our 2018 revenues from patient care.
+Added: We expect to receive up to approximately $50 million of grants from this allocation.
+Added: We have also applied for additional grants pursuant to the Provider Relief Fund’s Phase 3 General Distribution, for which HHS allocated up to $20 billion.
+Added: According to HHS' guidance, eligible applicants will receive grant amounts to ensure that they have received approximately 2% of their annual patient care revenue, plus an additional percentage of their change in revenues minus their operating expenses, in each case from patient care attributable to COVID-19.
+Added: Grants from the Provider Relief Fund are subject to the terms and conditions of the program, including that such funds may only be used to prevent, prepare for, and respond to COVID-19 and will reimburse only for healthcare related expenses or lost revenues that are attributable to COVID-19.
+Added: The permissible uses of grants from the Nursing Home Infection Control Distribution are further limited certain infection control expenses.
+Added: During the three and nine months ended September 30, 2020, we recognized $8.6 million and $35.0 million , respectively, of the grants as other operating income based upon our estimates of our satisfaction of the conditions of the grants during such period.
+Added: HHS continues to evaluate and provide allocations of, and regulation and guidance regarding, grants made under the Provider Relief Fund.
+Added: We intend to pursue additional funding that may become available pursuant to the Provider Relief Fund.
+Added: However, there can be no assurance that we will qualify for, or receive, grants in the amount we expect, that additional restrictions on the permissible uses or terms and conditions of the grants will not be imposed by HHS, or that future funding programs will be made available for which we qualify.
+Added: • During the three and nine months ended September 30, 2020, we received $2.5 million and $87.5 million, respectively, under the Accelerated and Advance Payment Program administered by CMS, which was temporarily expanded by the CARES Act.
+Added: Under the program, we requested acceleration/advancement of 100% of our Medicare payment amount for a three-month period.
+Added: The Continuing Appropriations Act, 2021 and Other Extensions Act, enacted on October 1, 2020,
+Added: amended the repayment terms for accelerated/advanced payments.
+Added: As amended, recoupment of accelerated/advanced payments will begin one year after payments were issued.
+Added: Payments will be recouped at a rate of 25% of Medicare payments for the first eleven months following the anniversary of issuance and at a rate of 50% of Medicare payments for the next six months.
+Added: Any outstanding balance of accelerated/advanced payments will be due following such recoupment period.
+Added: We expect recoupment of approximately $44 million in 2021 and recoupment or repayment of the remaining amount in 2022.
• Under the CARES Act, we have elected to defer payment of the employer portion of social security payroll taxes incurred from March 27, 2020 to December 31, 2020.
One-half of such deferral amount will become due on each of December 31, 2021 and December 31, 2022.
−Removed: As of June 30, 2020 we have deferred $26.5 million under the program and intend to defer an additional approximately $40 million of the employer portion of payroll taxes estimated to be incurred for the six months ending December 31, 2020.
+Added: As of September 30, 2020, we have deferred payment of $50.1 million under the program and intend to defer an additional approximately $25 million of the employer portion of payroll taxes estimated to be incurred for the three months ending December 31, 2020.
• The CARES Act temporarily suspended the 2% Medicare sequestration for the period May 1, 2020 to December 31, 2020, which primarily benefits our Health Care Services segment.
−Removed: This suspension had a favorable impact of $1.0 million on the segment’s resident fee revenue for the three months ended June 30, 2020, and we estimate that the suspension will have a $3.0 million favorable impact on the segment’s resident fee revenue for the six months ended December 31, 2020 .
+Added: This suspension had a favorable impact of $1.6 million and $2.5 million on the segment’s resident fee revenue for the three and nine months ended September 30, 2020, respectively.
+Added: We estimate that the suspension will have a $1.5 million favorable impact on the segment’s resident fee revenue for the three months ended December 31, 2020.
• We continue to evaluate our eligibility to claim the employee retention tax credit under the CARES Act for certain of our associates.
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the development and availability of COVID-19 testing, therapeutic agents, and vaccines and the prioritization of such resources among businesses and demographic groups;
−Removed: government financial and regulatory relief efforts that may become available to business and individuals, including our ability to qualify and satisfy the terms and conditions of financial relief;
+Added: government financial and regulatory relief efforts that may become available to business and individuals, including our ability to qualify for and satisfy the terms and conditions of financial relief;
perceptions regarding the safety of senior living communities during and after the pandemic;
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Transaction Activity and Impact of Dispositions on Results of Operations
−Removed: During the period from January 1, 2019 through June 30, 2020 , we acquired 26 formerly leased communities, disposed of 15 owned communities ( 1,707 units), and sold our ownership interest in our unconsolidated entry fee CCRC Venture (the “CCRC Venture”) with Healthpeak Properties, Inc.
+Added: During the period from January 1, 2019 through September 30, 2020, we acquired 27 formerly leased communities (2,453 units), sold 16 owned communities (2,143 units), and sold our ownership interest in our unconsolidated entry fee CCRC Venture (the "CCRC Venture") with Healthpeak Properties, Inc.
("Healthpeak"), and our triple-net lease obligations on 14 communities (937 units) were terminated.
On July 26, 2020, we entered into definitive agreements with Ventas to restructure our 120 community (10,174 units) triple-net master lease arrangements.
−Removed: In addition, we conveyed to Ventas five communities and will manage the communities following the closing.
+Added: In addition, we conveyed to Ventas five communities (471 units) and manage the communities following the closing.
+Added: Completed transactions and cash lease payments during the nine months ended September 30, 2020 have reduced our future minimum lease payments by approximately $1.0 billion, or 36%.
Summaries of the significant transactions impacting the periods presented, and the impacts of dispositions of owned and leased communities on our results of operations, are included below.
−Removed: Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2019 for more details regarding the terms of such transactions, including transactions we entered into with Healthpeak during 2019.
−Removed: During the next 12 months, we expect to close on the dispositions of two owned unencumbered communities ( 417 units) classified as held for sale as of June 30, 2020 and the termination of our lease obligation on two communities ( 148 units).
−Removed: We also anticipate terminations of certain of our management arrangements with third parties as we transition to new operators our management on certain former unconsolidated ventures in which we sold our interest and our interim management on formerly leased communities.
+Added: Management's Discussion and Analysis of Financial
+Added: Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2019 for more details regarding the terms of such transactions, including transactions we entered into with Healthpeak during 2019.
+Added: During the next 12 months, we expect to close on the disposition of one owned unencumbered community (120 units) classified as held for sale as of September 30, 2020 and the termination of our lease obligation on one community (159 units).
+Added: We also anticipate terminations of certain of our management arrangements with third parties as we transition to new operators our management on certain communities.
The closings of the various pending and expected transactions described herein are, or will be, subject to the satisfaction of various closing conditions, including (where applicable) the receipt of regulatory approvals.
1 unchanged sentence
Summaries of Transactions
−Removed: On October 1, 2019, we entered into definitive agreements, including a Master Transactions and Cooperation Agreement (the "MTCA") and an Equity Interest Purchase Agreement (the "Purchase Agreement"), providing for a multi-part transaction with Healthpeak.
−Removed: The parties subsequently amended the agreements to include one additional entry fee CCRC community as part of the sale of our interest in the CCRC Venture (rather than removing the community from the CCRC Venture for joint marketing and sale).
−Removed: The components of the multi-part transaction include:
−Removed: CCRC Venture Transaction:
−Removed: Pursuant to the Purchase Agreement, on January 31, 2020, Healthpeak acquired our 51% ownership interest in the CCRC Venture, which held 14 entry fee CCRCs (6,383 units), for a purchase price of $289.2 million , net of a $5.9 million post-closing net working capital adjustment paid to Healthpeak during the three months ended June 30, 2020 (representing an aggregate valuation of $1.06 billion less portfolio debt, subject to a net working capital adjustment).
−Removed: We recognized a $369.8 million gain on sale of assets for the six months ended June 30, 2020 , and we derecognized the net equity method liability for the sale of the ownership interest in the CCRC Venture.
−Removed: At the closing, the parties terminated the existing management agreements on the 14 entry fee CCRCs, Healthpeak paid us a $100.0 million management agreement termination fee, and we transitioned operations of the entry fee CCRCs to a new operator.
−Removed: We recognized $100.0 million of management fee revenue for the three months ended March 31, 2020 for the management termination fee.
−Removed: The sale of our interest in the CCRC Venture and the $100.0 million of management termination fees generated approximately $579.0 million of taxable income in three months ended March 31, 2020.
−Removed: We will utilize any 2020 operating losses generated and tax loss carryforwards (including our capital loss carryforward that was generated in 2018) to offset the taxable gain on this transaction.
−Removed: Prior to the January 31, 2020 closing, the parties moved the remaining two entry fee CCRCs (889 units) into a new unconsolidated venture on substantially the same terms as the CCRC Venture to accommodate the sale of such two communities expected to occur in 2021.
−Removed: Subsequent to these transactions, we will have exited substantially all of our entry fee CCRC operations.
−Removed: Master Lease Transactions.
−Removed: Pursuant to the MTCA, on January 31, 2020, the parties amended and restated our existing master lease pursuant to which we continue to lease 25 communities (2,711 units) from Healthpeak, and we acquired 18 formerly leased communities (2,014 units) from Healthpeak, at which time the 18 communities were removed from the master lease.
−Removed: At the closing, we paid $405.5 million to acquire such communities and to reduce our annual rent under the amended and restated master lease.
−Removed: We funded the community acquisitions with $192.6 million of non-recourse mortgage financing and the proceeds from the multi-part transaction.
−Removed: In addition, Healthpeak has agreed to terminate the lease for one leased community (159 units).
−Removed: With respect to the continuing 24 communities (2,552 units), our amended and restated master lease:
−Removed: (i) has an initial term to expire on December 31, 2027, subject to two extension options at our election for ten years each, which must be exercised with respect to the entire pool of leased communities;
−Removed: (ii) the initial annual base rent for the 24 communities is $41.7 million and is subject to an escalator of 2.4% per annum on April 1st of each year;
−Removed: and (iii) Healthpeak has agreed to make available up to $35.0 million for capital expenditures for a five-year period related to the 24 communities at an initial lease rate of 7.0%.
−Removed: As a result of the community acquisition
−Removed: transaction, we recognized a $19.7 million gain on debt extinguishment and derecognized the $105.1 million carrying amount of financing lease obligations for eight communities which were previously subject to sale-leaseback transactions in which we were deemed to have continuing involvement.
−Removed: During the three months ended March 31, 2020, we obtained $30.0 million of additional non-recourse mortgage financing on the acquired communities.
−Removed: Acquisitions Pursuant to Purchase Options:
−Removed: On January 22, 2020, we acquired eight formerly leased communities (336 units) from National Health Investors, Inc.
−Removed: pursuant to our exercise of a purchase option for a purchase price of $39.3 million.
−Removed: We funded the community acquisitions with cash on hand.
−Removed: During the three months ended March 31, 2020, we obtained $29.2 million of non-recourse mortgage financing, primarily secured by the acquired communities.
−Removed: Dispositions of Owned Communities.
−Removed: During the six months ended June 30, 2020 , we completed the sale of one owned community ( 78 units) for cash proceeds of $5.5 million , net of transaction costs, and for which we recognized a net gain on sale of assets of $0.2 million for the six months ended June 30, 2020 .
• Ventas Lease Portfolio Restructuring:
17 unchanged sentences
Under the terms of the Guaranty, commencing January 1, 2024 (and until such time (if any) as we exercise our lease term extension option with respect to the Master Lease), Ventas shall have the right to terminate the Master Lease (with respect to one or more communities), provided that the trailing twelve month coverage ratio of each such community is less than 0.9x and provided further that the removal and termination of any such communities does not result in a portfolio coverage ratio with respect to the remaining communities in the Master Lease that is less than the portfolio coverage ratio prior to such removal and termination.
−Removed: On the Effective Date, we entered into a Second Amended and Restated Omnibus Agreement with Ventas, which provides that if a default occurs and is continuing under certain other material leases or under certain material financings and if the same continues beyond the permitted cure period or the applicable landlord or lender exercises any material remedies, Ventas shall have the right to transition all or a portion of the communities from the Master Lease to a management arrangement with us pursuant to a market management agreement (which is terminable by either party).
−Removed: Notwithstanding the foregoing, Ventas may only transition community(ies) from the Master Lease to a management arrangement if such
−Removed: transition does not result in a portfolio coverage ratio with respect to the remaining communities in the Master Lease that is less than the portfolio coverage ratio prior to such transition.
+Added: • On the Effective Date, we entered into a Second Amended and Restated Omnibus Agreement with Ventas, which provides that if a default occurs and is continuing under certain other material leases or under certain material financings and if the same continues beyond the permitted cure period or the applicable landlord or lender exercises any material remedies, Ventas shall have the right to transition all or a portion of the communities from the Master Lease to a management arrangement with us pursuant to a market management agreement (which is terminable by
+Added: either party).
+Added: Notwithstanding the foregoing, Ventas may only transition one or more communities from the Master Lease to a management arrangement if such transition does not result in a portfolio coverage ratio with respect to the remaining communities in the Master Lease that is less than the portfolio coverage ratio prior to such transition.
• On the Effective Date, we conveyed five owned communities (471 units) to Ventas in full release and satisfaction of $78.4 million principal amount of indebtedness secured by the communities.
−Removed: Upon closing, the parties entered into new terminable, market rate management agreements pursuant to which we will manage the communities.
+Added: Upon closing, the parties entered into new terminable, market rate management agreements pursuant to which we manage the communities.
We also paid to Ventas $115.0 million in cash, released all security deposits under the former guaranty (which included the release of a $42.4 million deposit held by Ventas and the payment of $4.2 million in cash as settlement of the amount of letters of credit), and issued a $45.0 million unsecured interest-only promissory note to Ventas.
8 unchanged sentences
On the Effective Date, the parties entered into a Registration Rights Agreement, pursuant to which Ventas and its permitted transferees are entitled to certain registration rights.
−Removed: Under the terms of the agreement, we are required to use reasonable best efforts to prepare and file a shelf registration statement with the SEC as promptly as practicable, but no later than the close of business on the fifth day following the date on which we file our Quarterly Report on Form 10-Q for the period ended June 30, 2020, with respect to the shares of common stock underlying the Warrant, and, if the registration statement is not automatically effective, to have the registration statement declared effective promptly thereafter.
+Added: Pursuant to the terms of the agreement, we filed a shelf registration statement with the SEC, with respect to the shares of common stock underlying the Warrant, which was declared effective on August 17, 2020.
Ventas is entitled to customary underwritten offering, piggyback, and additional demand registration rights with respect to the shares underlying the Warrant.
+Added: • Healthpeak:
+Added: On October 1, 2019, we entered into definitive agreements, including a Master Transactions and Cooperation Agreement (the "MTCA") and an Equity Interest Purchase Agreement (the "Purchase Agreement"), providing for a multi-part transaction with Healthpeak.
+Added: The parties subsequently amended the agreements to include one additional entry fee CCRC community as part of the sale of our interest in the CCRC Venture (rather than removing the community from the CCRC Venture for joint marketing and sale).
+Added: The components of the multi-part transaction include:
+Added: • CCRC Venture Transaction:
+Added: Pursuant to the Purchase Agreement, on January 31, 2020, Healthpeak acquired our 51% ownership interest in the CCRC Venture, which held 14 entry fee CCRCs (6,383 units), for a purchase price of $289.2 million, net of a $5.9 million post-closing net working capital adjustment paid to Healthpeak during the three months ended June 30, 2020 (representing an aggregate valuation of $1.06 billion less portfolio debt, subject to a net working capital adjustment).
+Added: We recognized a $369.8 million gain on sale of assets for the nine months ended September 30, 2020, and we derecognized the net equity method liability for the sale of the ownership interest in the CCRC Venture.
+Added: At the closing, the parties terminated the existing management agreements on the 14 entry fee CCRCs, Healthpeak paid us a $100.0 million management agreement termination fee, and we transitioned operations of the entry fee CCRCs to a new operator.
+Added: We recognized $100.0 million of management fee revenue for the three months ended March 31, 2020 for the management termination fee.
+Added: The sale of our interest in the CCRC Venture and the $100.0 million of management termination fees generated approximately $579.0 million of taxable income in three months ended March 31, 2020.
+Added: We will utilize any 2020 operating losses generated and tax loss carryforwards (including our capital loss carryforward that was generated in 2018) to offset the taxable gain on this transaction.
+Added: Prior to the January 31, 2020 closing, the parties moved the remaining two entry fee CCRCs (889 units) into a new unconsolidated venture on substantially the same terms as the CCRC Venture to accommodate the sale of such two communities expected to occur in 2021.
+Added: Subsequent to these transactions, we will have exited substantially all of our entry fee CCRC operations.
+Added: • Master Lease Transactions.
+Added: Pursuant to the MTCA, on January 31, 2020, the parties amended and restated our existing master lease pursuant to which we continue to lease 25 communities (2,711 units) from Healthpeak, and we acquired
+Added: 18 formerly leased communities (2,014 units) from Healthpeak, at which time the 18 communities were removed from the master lease.
+Added: At the closing, we paid $405.5 million to acquire such communities and to reduce our annual rent under the amended and restated master lease.
+Added: We funded the community acquisitions with $192.6 million of non-recourse mortgage financing and the proceeds from the multi-part transaction.
+Added: In addition, Healthpeak has agreed to terminate the lease for one leased community (159 units).
+Added: With respect to the continuing 24 communities (2,552 units), our amended and restated master lease:
+Added: (i) has an initial term to expire on December 31, 2027, subject to two extension options at our election for ten years each, which must be exercised with respect to the entire pool of leased communities;
+Added: (ii) the initial annual base rent for the 24 communities is $41.7 million and is subject to an escalator of 2.4% per annum on April 1st of each year;
+Added: and (iii) Healthpeak has agreed to make available up to $35.0 million for capital expenditures for a five-year period related to the 24 communities at an initial lease rate of 7.0%.
+Added: As a result of the community acquisition transaction, we recognized a $19.7 million gain on debt extinguishment during the three months ended March 31, 2020 and derecognized the $105.1 million carrying amount of financing lease obligations for eight communities which were previously subject to sale-leaseback transactions in which we were deemed to have continuing involvement.
+Added: During the three months ended March 31, 2020, we obtained $30.0 million of additional non-recourse mortgage financing on the acquired communities.
+Added: • Acquisitions Pursuant to Purchase Options:
+Added: On January 22, 2020, we acquired eight formerly leased communities (336 units) from National Health Investors, Inc.
+Added: pursuant to our exercise of a purchase option for a purchase price of $39.3 million.
+Added: We funded the community acquisitions with cash on hand.
+Added: During the three months ended March 31, 2020, we obtained $29.2 million of non-recourse mortgage financing, primarily secured by the acquired communities.
+Added: On August 31, 2020, we acquired one formerly leased community (103 units) pursuant to our exercise of a purchase option for a purchase price of $25.0 million and funded the acquisition with cash on hand and non-recourse mortgage financing secured by the acquired community.
+Added: • Dispositions of Owned Communities.
+Added: In addition to the conveyance of five communities to Ventas, during the nine months ended September 30, 2020, we completed the sale of two owned communities (375 units) for cash proceeds of $38.1 million, net of transaction costs, and for which we recognized a net gain on sale of assets of $2.7 million for the nine months ended September 30, 2020.
Summary of Financial Impact of Completed Dispositions
−Removed: The following table sets forth, for the periods indicated, the amounts included within our consolidated financial data for the 20 communities that we disposed through sales and lease terminations during the period from April 1, 2019 to June 30, 2020 through the respective disposition dates.
−Removed: Three Months Ended June 30, 2020
−Removed: (in thousands)
−Removed: Actual Results
−Removed: Amounts Attributable to Completed Dispositions
−Removed: Actual Results Less Amounts Attributable to Completed Dispositions
+Added: The following table sets forth, for the periods indicated, the amounts included within our consolidated financial data for the 19 communities that we disposed through sales, conveyances, and lease terminations during the period from July 1, 2019 to September 30, 2020 through the respective disposition dates.
+Added: Three Months Ended September 30, 2020
+Added: (in thousands) Actual Results Amounts Attributable to Completed Dispositions Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
1 unchanged sentence
Assisted Living and Memory Care 408,695 1,279 407,416
+Added: CCRCs 76,411 2,158 74,253
Senior housing resident fees $ 610,868 $ 3,437 $ 607,431
2 unchanged sentences
Assisted Living and Memory Care 323,479 1,195 322,284
+Added: CCRCs 69,298 2,077 67,221
Senior housing facility operating expense $ 476,197 $ 3,272 $ 472,925
Cash facility lease payments $ 185,398 $ — $ 185,398
−Removed: Three Months Ended June 30, 2019
−Removed: (in thousands)
−Removed: Actual Results
−Removed: Amounts Attributable to Completed Dispositions
−Removed: Actual Results Less Amounts Attributable to Completed Dispositions
+Added: Three Months Ended September 30, 2019
+Added: (in thousands) Actual Results Amounts Attributable to Completed Dispositions Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
1 unchanged sentence
Assisted Living and Memory Care 452,474 9,960 442,514
+Added: CCRCs 100,104 13,435 86,669
Senior housing resident fees $ 689,452 $ 23,395 $ 666,057
2 unchanged sentences
Assisted Living and Memory Care 335,618 8,907 326,711
+Added: CCRCs 85,632 13,700 71,932
Senior housing facility operating expense $ 508,710 $ 22,607 $ 486,103
Cash facility lease payments $ 94,183 $ 947 $ 93,236
−Removed: The following table sets forth, for the periods indicated, the amounts included within our consolidated financial data for the 27 communities that we disposed through sales and lease terminations during the period from January 1, 2019 to June 30, 2020 through the respective disposition dates.
−Removed: Six Months Ended June 30, 2020
−Removed: (in thousands)
−Removed: Actual Results
−Removed: Amounts Attributable to Completed Dispositions
−Removed: Actual Results Less Amounts Attributable to Completed Dispositions
+Added: The following table sets forth, for the periods indicated, the amounts included within our consolidated financial data for the 35 communities that we disposed through sales, conveyances, and lease terminations during the period from January 1, 2019 to September 30, 2020 through the respective disposition dates.
+Added: Nine Months Ended September 30, 2020
+Added: (in thousands) Actual Results Amounts Attributable to Completed Dispositions Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
1 unchanged sentence
Assisted Living and Memory Care 1,298,330 14,099 1,284,231
+Added: CCRCs 249,983 9,836 240,147
Senior housing resident fees $ 1,940,215 $ 23,935 $ 1,916,280
2 unchanged sentences
Assisted Living and Memory Care 993,557 13,368 980,189
+Added: CCRCs 218,635 9,304 209,331
Senior housing facility operating expense $ 1,469,300 $ 22,672 $ 1,446,628
Cash facility lease payments $ 362,150 $ 1,102 $ 361,048
−Removed: Six Months Ended June 30, 2019
−Removed: (in thousands)
−Removed: Actual Results
−Removed: Amounts Attributable to Completed Dispositions
−Removed: Actual Results Less Amounts Attributable to Completed Dispositions
+Added: Nine Months Ended September 30, 2019
+Added: (in thousands) Actual Results Amounts Attributable to Completed Dispositions Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
1 unchanged sentence
Assisted Living and Memory Care 1,361,225 41,647 1,319,578
+Added: CCRCs 305,084 41,606 263,478
Senior housing resident fees $ 2,074,828 $ 83,253 $ 1,991,575
2 unchanged sentences
Assisted Living and Memory Care 970,526 35,542 934,984
+Added: CCRCs 251,128 39,683 211,445
Senior housing facility operating expense $ 1,476,424 $ 75,225 $ 1,401,199
Cash facility lease payments $ 283,697 $ 4,265 $ 279,432
−Removed: The following table sets forth the number of communities and units in our senior housing segments disposed through sales and lease terminations during the six months ended June 30, 2020 and twelve months ended December 31, 2019 :
−Removed: Six Months Ended
−Removed: June 30, 2020
−Removed: Twelve Months Ended
+Added: The following table sets forth the number of communities and units in our senior housing segments disposed through sales, conveyances, and lease terminations during the nine months ended September 30, 2020 and twelve months ended December 31, 2019:
+Added: Nine Months Ended
+Added: September 30, 2020 Twelve Months Ended
December 31, 2019
2 unchanged sentences
Assisted Living and Memory Care 827 1,600
+Added: CCRCs 297 827
+Added: Total 1,124 2,427
Other Recent Developments
Goodwill Impairment Estimates
−Removed: As of June 30, 2020 , we had a goodwill balance of $154.1 million .
+Added: As of September 30, 2020, we had a goodwill balance of $154.1 million.
Goodwill recorded in connection with business combinations is allocated to the respective reporting unit and included in our application of the provisions of ASC 350, Intangibles - Goodwill and Other .
−Removed: Goodwill allocated to our Independent Living and Health Care Services reporting units is $27.3 million and $126.8 million as of June 30, 2020 , respectively.
−Removed: Our interim goodwill impairment analyses did not result in any impairment charges during the six months ended June 30, 2020 .
+Added: Goodwill allocated to our Independent Living and Health Care Services reporting units is $27.3 million and $126.8 million as of September 30, 2020, respectively.
+Added: Our interim goodwill impairment analyses did not result in any impairment charges during the nine months ended September 30, 2020.
Based on the results of our interim quantitative goodwill impairment test as of March 31, 2020, we estimated that the fair values of both our Independent Living and Health Care Services reporting units exceeded their carrying amount by approximately 20%.
−Removed: Additionally, we estimated that there were no significant changes to the fair values of both our Independent Living and Health Care Services reporting units during the three months ended June 30, 2020 .
+Added: Additionally, we estimated that there were no significant changes to the fair values of both our Independent Living and Health Care Services reporting units during the three months ended June 30, 2020 and September 30, 2020.
Determining the fair value of a reporting unit involves the use of significant estimates and assumptions that are unpredictable and inherently uncertain.
1 unchanged sentence
Future events may indicate differences from management's current judgments and estimates which could, in turn, result in future impairments.
−Removed: Future events that may result in impairment charges include differences in the projected occupancy rates or monthly service fee rates, changes in the cost structure of existing communities, changes in reimbursement rates from Medicare for healthcare services, and changes in healthcare reform.
+Added: Future events that may result in impairment charges include differences in the projected occupancy rates or monthly service fee rates, changes in the cost
+Added: structure of existing communities, changes in reimbursement rates from Medicare for healthcare services, and changes in healthcare reform.
Significant adverse changes in our future revenues and/or operating margins, significant changes in the market for senior housing or the valuation of the real estate of senior living communities, as well as other events and circumstances, including, but not limited to, increased competition, changes in reimbursement rates from Medicare for healthcare services, and changing economic or market conditions, including market control premiums, could result in changes in fair value and the determination that additional goodwill is impaired.
2 unchanged sentences
Although we make every reasonable effort to ensure the accuracy of our estimate of the fair value of our reporting units, future changes in the assumptions used to make these estimates could result in the recording of an impairment loss.
−Removed: As of March 31, 2020 and June 30, 2020, there was a wide range of possible outcomes as a result of the COVID-19 pandemic, as there was a high degree of uncertainty about its ultimate impacts.
+Added: As of March 31, 2020, June 30, 2020, and September 30, 2020, there was a wide range of possible outcomes as a result of the COVID-19 pandemic, as there was a high degree of uncertainty about its ultimate impacts.
Management’s estimates of the impacts of the pandemic are highly dependent on variables that are difficult to predict, as described above.
2 unchanged sentences
In response to the COVID-19 pandemic, we have delayed or canceled a number of elective capital expenditure projects.
−Removed: As a result, we expect our full-year 2020 non-development capital expenditures, net of anticipated lessor reimbursements, and development capital expenditures to be approximately $150 million and $20 million, which reflects a $40 million and $10 million reduction to our pre-pandemic plans for 2020, respectively.
+Added: As a result, we expect our full-year 2020 non-development capital expenditures, net of anticipated lessor reimbursements, and development capital expenditures to be approximately $140 million and $15 million, respectively, which reflects a $50 million and $15 million reduction to our pre-pandemic plans for 2020, respectively.
We anticipate that our 2020 capital expenditures will be funded from cash on hand, cash flows from operations, and reimbursements from lessors.
Results of Operations
−Removed: As of June 30, 2020 our total operations included 737 communities with a capacity to serve approximately 65,000 residents.
+Added: As of September 30, 2020 our total operations included 726 communities with a capacity to serve approximately 65,000 residents.
As of that date we owned 350 communities (31,824 units), leased 302 communities (21,286 units), and managed 74 communities (9,980 units).
2 unchanged sentences
The results of operations for any particular period are not necessarily indicative of results for any future period.
−Removed: Transactions completed during the period of January 1, 2019 to June 30, 2020 affect the comparability of our results of operations, and summaries of such transactions and their impact on our results of operations are discussed above in "Transaction Activity and Impact of Dispositions on Results of Operations."
+Added: Transactions completed during the period of January 1, 2019 to September 30, 2020 affect the comparability of our results of operations, and summaries of such transactions and their impact on our results of operations are discussed above in "Transaction Activity and Impact of Dispositions on Results of Operations."
We use the operating measures described below in connection with operating and managing our business and reporting our results of operations.
5 unchanged sentences
Consolidated communities excluded from the same community portfolio include communities acquired or disposed of since the beginning of the prior year, communities classified as assets held for sale, certain communities planned for disposition, certain communities that have undergone or are undergoing expansion, redevelopment, and repositioning projects, certain communities that have expansion, redevelopment, and repositioning projects that are anticipated to be under construction in the current year, and certain communities that have experienced a casualty event that significantly impacts their operations.
−Removed: Our management uses same community operating results and data, and we believe such results and data provide useful information to investors, because it enables comparisons of revenue, expense, and other operating measures for a consistent portfolio over time without giving effect to the impacts of communities that were not consolidated and operational for the comparison periods, communities acquired or disposed during the comparison periods (or planned for disposition), and communities with results that are or likely will be impacted by completed, in-process, or planned development-related capital expenditure projects.
+Added: Our management uses same community operating results and data, and we believe such results and data provide useful information to investors, because it enables comparisons of revenue, expense, and other operating measures for a consistent portfolio over time without giving effect to the impacts of communities that were not consolidated and operational for the comparison periods, communities acquired or disposed during the comparison periods (or planned for disposition), and communities with results that are or likely will be impacted
+Added: by completed, in-process, or planned development-related capital expenditure projects.
As presented herein, same community results include the direct costs incurred to prepare for and respond to the COVID-19 pandemic.
−Removed: These costs had been excluded from same community results presented in our quarterly report on Form 10-Q for the three months ended March 31, 2020.
• RevPAR , or average monthly senior housing resident fee revenue per available unit, is defined as resident fee revenue for the corresponding portfolio for the period (excluding Health Care Services segment revenue and entrance fee amortization, and, for the 2019 periods, the additional resident fee revenue recognized as a result of the application of the lease accounting standard ASC 842), divided by the weighted average number of available units in the corresponding portfolio for the period, divided by the number of months in the period.
3 unchanged sentences
We measure RevPOR at the consolidated level, as well as at the segment level with respect to our Independent Living, Assisted Living and Memory Care, and CCRCs segments.
−Removed: Our management uses
−Removed: RevPOR, and we believe the measure provides useful information to investors, because it reflects the average amount of senior housing resident fee revenue we derive from an occupied unit per month without factoring occupancy rates.
+Added: Our management uses RevPOR, and we believe the measure provides useful information to investors, because it reflects the average amount of senior housing resident fee revenue we derive from an occupied unit per month without factoring occupancy rates.
RevPOR is a significant driver of our senior housing revenue performance.
4 unchanged sentences
See "Non-GAAP Financial Measures" below for our definition of the measure and other important information regarding such measure, including reconciliations to the most comparable GAAP measures.
−Removed: Comparison of Three Months Ended June 30, 2020 and 2019
+Added: Comparison of Three Months Ended September 30, 2020 and 2019
Summary Operating Results
−Removed: The following table summarizes our overall operating results for the three months ended June 30, 2020 and 2019 .
+Added: The following table summarizes our overall operating results for the three months ended September 30, 2020 and 2019.
Three Months Ended
−Removed: Increase (Decrease)
−Removed: (in thousands)
−Removed: Total revenue and other operating income
+Added: September 30, Increase (Decrease)
+Added: (in thousands) 2020 2019 Amount Percent
+Added: Total resident fees and management fees revenue $ 706,440 $ 814,801 $ (108,361) (13.3) %
+Added: Other operating income 10,765 — 10,765 NM
Facility operating expense 570,530 615,717 (45,187) (7.3) %
Net income (loss) (124,993) (78,508) 46,485 59.2 %
−Removed: Adjusted EBITDA
−Removed: The decrease in total revenue and other operating income was primarily attributable to a $110.0 million decrease in management services revenue, including management fees and reimbursed costs incurred on behalf of managed communities, primarily due to terminations of management agreements subsequent to the beginning of the prior year period.
−Removed: Resident fees decreased $70.2 million, including a 3.5% decrease in same community RevPAR, comprised of a 480 basis points decrease in same community weighted average occupancy and a 2.3% increase in same community RevPOR.
−Removed: We estimate that the COVID-19 pandemic and our response efforts resulted in $43.1 million of lost resident fee revenue on a same community basis for the three months ended June 30, 2020.
+Added: Adjusted EBITDA (64,019) 80,447 (144,466) NM
+Added: The decrease in total resident fees and management fees revenue was primarily attributable to a $100.5 million decrease in resident fees, including a 7.7% decrease in same community RevPAR, comprised of a 920 basis points decrease in same community weighted average occupancy and a 3.5% increase in same community RevPOR.
+Added: We estimate that the COVID-19 pandemic, including the related restrictions at our communities, resulted in $70.8 million of lost resident fee revenue on a same community basis for the three months ended September 30, 2020.
Estimated lost resident fee revenue represents the difference between the actual revenue for the period and our expectations prior to estimating the effects of COVID-19.
−Removed: Revenue for home health services decreased $24.3 million, as our home health average daily census began to decrease in March 2020 due to the COVID-19 pandemic and the implementation of the Patient-Driven Grouping Model ("PDGM"), an alternate home health case-mix adjustment methodology with a 30-day unit of payment, which became effective beginning January 1, 2020.
−Removed: Additionally, the disposition of 20 communities through sales of owned communities and lease terminations since the beginning of the prior year period resulted in $15.2 million less in resident fees during the three months ended June 30, 2020 compared to the prior year period.
−Removed: Our total revenue and other operating income for the three months ended June 30, 2020 includes $26.7 million of government grants as other operating income based on our estimates of our satisfaction of the conditions of the grants during the period.
−Removed: The increase in facility operating expense was primarily attributable to an 11.3% increase in same community facility operating expense, which was primarily due to $52.9 million of incremental costs incurred during the three months ended June 30, 2020 to address the COVID-19 pandemic.
−Removed: Additionally, there was an increase in labor expense on a same community basis arising from wage rate increases.
−Removed: The increase in same community facility operating expense was partially offset by decreases in repairs and maintenance costs due to fewer move-ins and advertising costs during the period as we intentionally scaled back such activities.
−Removed: The increase in facility operating expense was partially offset by a decrease in labor costs for home health services as we adjusted our home health services operational structure, to better align our facility operating expenses and business model with the new payment model.
−Removed: In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense of $5.3 million and $11.8 million , respectively, during the three months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
+Added: Revenue for home health services decreased $19.0 million, as our home health average daily census began to decrease in March 2020 due to the COVID-19 pandemic and due to the implementation of the Patient-Driven Grouping Model ("PDGM"), an alternate home health case-mix adjustment methodology with a 30-day unit of payment, which became effective beginning January 1, 2020.
+Added: Additionally, the disposition of 19 communities through sales and conveyances of owned communities and lease terminations since the beginning of the prior year period resulted in $20.0 million less in resident fees during the three months ended September 30, 2020 compared to the prior year period.
+Added: Management fee revenue decreased $7.9 million primarily due to terminations of management agreements subsequent to the beginning of the prior year period.
+Added: Our other operating income for the three months ended September 30, 2020 includes $10.8 million of government grants as other operating income based on our estimates of our satisfaction of the conditions of the grants during the period.
+Added: The decrease in facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $19.3 million less in facility operating expense during the three months ended September 30, 2020 compared to the prior year period, and a decrease in labor costs for home health services as a result of lower census and as we adjusted our home health services operational structure, to better align our facility operating expenses and business model with the new payment model.
+Added: These decreases were primarily offset by a 0.3% increase in same community facility operating expense, which was primarily due to $20.4 million of incremental costs incurred during the three months ended September 30, 2020 to respond to the COVID-19 pandemic.
+Added: The increase in same community facility operating expense was partially offset by decreases in repairs and maintenance costs and food and supplies costs due to the reduced occupancy during the period.
+Added: In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense of $8.0 million and $14.0 million, respectively, during the three months ended September 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
Same community resident fee revenue and facility operating expense excludes $7.3 million and $12.8 million, respectively, of such additional revenue and expenses.
−Removed: The increase in net loss was primarily attributable to a $100.6 million decrease in reimbursed costs incurred on behalf of managed communities, as well as the revenue and facility operating expense factors previously discussed.
−Removed: The decrease in Adjusted EBITDA was primarily attributable to the revenue and facility operating expense factors previously discussed, partially offset by a decrease in general and administrative expense.
+Added: The increase in net loss was primarily attributable to the revenue and facility operating expense factors previously discussed.
+Added: The decrease in Adjusted EBITDA was primarily attributable to the $119.2 million one-time cash lease payment made to Ventas in connection with our lease restructuring transaction effective July 26, 2020 and the revenue and facility operating expense factors previously discussed, partially offset by a decrease in general and administrative expense.
Operating Results - Senior Housing Segments
−Removed: The following table summarizes the operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) on a combined basis for the three months ended June 30, 2020 and 2019 , including operating results and data on a same community basis.
+Added: The following table summarizes the operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) on a combined basis for the three months ended September 30, 2020 and 2019, including operating results and data on a same community basis.
See management's discussion and analysis of the operating results on an individual segment basis on the following pages.
−Removed: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
−Removed: Three Months Ended
−Removed: Increase (Decrease)
+Added: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR) Three Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2020 2019 Amount Percent
Resident fees $ 610,868 $ 689,452 $ (78,584) (11.4) %
−Removed: Other operating income
+Added: Other operating income $ 4,873 $ — $ 4,873 NM
Facility operating expense $ 476,197 $ 508,710 $ (32,513) (6.4) %
2 unchanged sentences
Total average units 53,440 55,258 (1,818) (3.3) %
−Removed: Occupancy rate (weighted average)
+Added: RevPAR $ 3,806 $ 4,109 $ (303) (7.4) %
+Added: Occupancy rate (weighted average) 75.3 % 84.2 % (890) bps n/a
+Added: RevPOR $ 5,056 $ 4,880 $ 176 3.6 %
Same Community Operating Results and Data
Resident fees $ 565,881 $ 613,260 $ (47,379) (7.7) %
−Removed: Other operating income
+Added: Other operating income $ 3,710 $ — $ 3,710 NM
Facility operating expense $ 435,058 $ 433,972 $ 1,086 0.3 %
1 unchanged sentence
Total average units 49,363 49,368 (5) — %
−Removed: Occupancy rate (weighted average)
+Added: RevPAR $ 3,821 $ 4,141 $ (320) (7.7) %
+Added: Occupancy rate (weighted average) 75.6 % 84.8 % (920) bps n/a
+Added: RevPOR $ 5,057 $ 4,885 $ 172 3.5 %
Independent Living Segment
−Removed: The following table summarizes the operating results and data for our Independent Living segment for the three months ended June 30, 2020 and 2019 , including operating results and data on a same community basis.
−Removed: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
−Removed: Three Months Ended
−Removed: Increase (Decrease)
+Added: The following table summarizes the operating results and data for our Independent Living segment for the three months ended September 30, 2020 and 2019, including operating results and data on a same community basis.
+Added: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR) Three Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2020 2019 Amount Percent
Resident fees $ 125,762 $ 136,874 $ (11,112) (8.1) %
+Added: Other operating income 96 — 96 NM
Facility operating expense $ 83,420 $ 87,460 $ (4,040) (4.6) %
2 unchanged sentences
Total average units 12,534 12,511 23 0.2 %
−Removed: Occupancy rate (weighted average)
+Added: RevPAR $ 3,345 $ 3,581 $ (236) (6.6) %
+Added: Occupancy rate (weighted average) 80.0 % 89.1 % (910) bps n/a
+Added: RevPOR $ 4,182 $ 4,018 $ 164 4.1 %
Same Community Operating Results and Data
Resident fees $ 118,384 $ 126,823 $ (8,439) (6.7) %
+Added: Other operating income $ 96 $ — $ 96 NM
Facility operating expense $ 77,387 $ 78,445 $ (1,058) (1.3) %
1 unchanged sentence
Total average units 11,703 11,703 — — %
−Removed: Occupancy rate (weighted average)
+Added: RevPAR $ 3,372 $ 3,612 $ (240) (6.6) %
+Added: Occupancy rate (weighted average) 80.3 % 89.4 % (910) bps n/a
+Added: RevPOR $ 4,201 $ 4,043 $ 158 3.9 %
The decrease in the segment's resident fees was primarily attributable to a decrease in the segment's same community RevPAR, comprised of a 910 basis points decrease in same community weighted average occupancy and a 3.9% increase in same community RevPOR.
−Removed: The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic and our response efforts.
−Removed: We estimate that the COVID-19 pandemic and our response efforts resulted in $6.4 million of lost resident fee revenue on a same community basis for this segment for the three months ended June 30, 2020.
+Added: The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic, including the related restrictions at our communities.
+Added: We estimate that the COVID-19 pandemic, including the related restrictions at our communities, resulted in $11.6 million of lost resident fee revenue on a same community basis for this segment for the three months ended September 30, 2020.
The increase in the segment's same community RevPOR was primarily the result of in-place rent increases.
−Removed: The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense as a result of $8.8 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic, partially offset by decreases in repairs and maintenance costs due to fewer move-ins and advertising costs during the period as we intentionally scaled back such activities.
−Removed: In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of $1.9 million and $3.1 million , respectively, during the three months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
+Added: The decrease in the segment's facility operating expense was primarily attributable to the additional facility operating expense during the three months ended September 30, 2019 as a result of the application of the new lease accounting standard (described below) and a decrease in the segment's same community facility operating expense.
+Added: The decrease in the segment's same community facility operating expense was primarily attributable to decreases in repairs and maintenance costs and food and supplies costs due to the reduced occupancy during the period, partially offset by $1.9 million of incremental direct costs to respond to the COVID-19 pandemic.
+Added: In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of $2.5 million and $3.4 million, respectively, during the three months ended September 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
Same community resident fee revenue and facility operating expense for this segment excludes $2.3 million and $3.2 million, respectively, of such additional revenue and expenses.
Assisted Living and Memory Care Segment
−Removed: The following table summarizes the operating results and data for our Assisted Living and Memory Care segment for the three months ended June 30, 2020 and 2019 , including operating results and data on a same community basis.
−Removed: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
−Removed: Three Months Ended
−Removed: Increase (Decrease)
+Added: The following table summarizes the operating results and data for our Assisted Living and Memory Care segment for the three months ended September 30, 2020 and 2019, including operating results and data on a same community basis.
+Added: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR) Three Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2020 2019 Amount Percent
Resident fees $ 408,695 $ 452,474 $ (43,779) (9.7) %
−Removed: Other operating income
+Added: Other operating income $ 1,936 $ — $ 1,936 NM
Facility operating expense $ 323,479 $ 335,618 $ (12,139) (3.6) %
2 unchanged sentences
Total average units 35,268 36,173 (905) (2.5) %
−Removed: Occupancy rate (weighted average)
+Added: RevPAR $ 3,863 $ 4,127 $ (264) (6.4) %
+Added: Occupancy rate (weighted average) 74.4 % 83.2 % (880) bps n/a
+Added: RevPOR $ 5,193 $ 4,962 $ 231 4.7 %
Same Community Operating Results and Data
Resident fees $ 397,126 $ 427,413 $ (30,287) (7.1) %
−Removed: Other operating income
+Added: Other operating income $ 1,937 $ — $ 1,937 NM
Facility operating expense $ 312,267 $ 308,385 $ 3,882 1.3 %
1 unchanged sentence
Total average units 34,048 34,053 (5) — %
−Removed: Occupancy rate (weighted average)
+Added: RevPAR $ 3,888 $ 4,184 $ (296) (7.1) %
+Added: Occupancy rate (weighted average) 74.5 % 83.5 % (900) bps n/a
+Added: RevPOR $ 5,216 $ 5,010 $ 206 4.1 %
The decrease in the segment's resident fees was primarily attributable to a decrease in the segment's same community RevPAR, comprised of a 900 basis points decrease in same community weighted average occupancy and a 4.1% increase in same community RevPOR.
−Removed: The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic and our response efforts.
−Removed: We estimate that the COVID-19 pandemic and our response efforts resulted in $26.0 million of lost resident fee revenue on a same community basis for this segment for the three months ended June 30, 2020.
+Added: The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic, including the related restrictions at our communities.
+Added: We estimate that the COVID-19 pandemic, including the related restrictions at our communities, resulted in $47.5 million of lost resident fee revenue on a same community basis for this segment for the three months ended September 30, 2020.
The increase in the segment's same community RevPOR was primarily the result of in-place rent increases.
−Removed: Additionally, the disposition of 16 communities since the beginning of the prior year period resulted in $5.7 million less in resident fees during the three months ended June 30, 2020 compared to the prior year period.
−Removed: The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense, including $38.0 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic, and an increase in labor expense arising from wage rate increases.
−Removed: The increase in the segment's same community facility operating expense was partially offset by decreases in repairs and maintenance costs due to fewer move-ins and advertising costs during the period as we intentionally scaled back such activities.
−Removed: Additionally, the disposition of communities since the beginning of the prior year period resulted in $4.8 million less in facility operating expense during the three months ended June 30, 2020 compared to the prior year period.
−Removed: In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of $2.7 million and $7.4 million , respectively, during the three months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
+Added: Additionally, the disposition of 14 communities since the beginning of the prior year period resulted in $8.7 million less in resident fees during the three months ended September 30, 2020 compared to the prior year period.
+Added: The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period which resulted in $7.7 million less in facility operating expense during the three months ended September 30, 2020 compared to the prior year period.
+Added: The decrease in facility operating expense was partially offset by an increase in the segment's same community facility operating expense, including $15.5 million of incremental direct costs to respond to the COVID-19 pandemic.
+Added: The increase in the segment's same community facility operating expense was partially offset by decreases in repairs and maintenance costs and food and supplies costs due to the reduced occupancy during the period.
+Added: In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of $4.6 million and $9.1 million, respectively, during the three months ended September 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
Same community resident fee revenue and facility operating expense for this segment excludes $4.4 million and $8.6 million, respectively, of such additional revenue and expenses.
CCRCs Segment
−Removed: The following table summarizes the operating results and data for our CCRCs segment for the three months ended June 30, 2020 and 2019 , including operating results and data on a same community basis.
−Removed: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
−Removed: Three Months Ended
−Removed: Increase (Decrease)
+Added: The following table summarizes the operating results and data for our CCRCs segment for the three months ended September 30, 2020 and 2019, including operating results and data on a same community basis.
+Added: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR) Three Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2020 2019 Amount Percent
Resident fees $ 76,411 $ 100,104 $ (23,693) (23.7) %
−Removed: Other operating income
+Added: Other operating income $ 2,841 $ — $ 2,841 NM
Facility operating expense $ 69,298 $ 85,632 $ (16,334) (19.1) %
2 unchanged sentences
Total average units 5,638 6,574 (936) (14.2) %
−Removed: Occupancy rate (weighted average)
+Added: RevPAR $ 4,477 $ 5,012 $ (535) (10.7) %
+Added: Occupancy rate (weighted average) 70.7 % 80.4 % (970) bps n/a
+Added: RevPOR $ 6,332 $ 6,234 $ 98 1.6 %
Same Community Operating Results and Data
Resident fees $ 50,371 $ 59,024 $ (8,653) (14.7) %
−Removed: Other operating income
+Added: Other operating income $ 1,677 $ — $ 1,677 NM
Facility operating expense $ 45,404 $ 47,142 $ (1,738) (3.7) %
1 unchanged sentence
Total average units 3,612 3,612 — —
−Removed: Occupancy rate (weighted average)
+Added: RevPAR $ 4,648 $ 5,447 $ (799) (14.7) %
+Added: Occupancy rate (weighted average) 70.0 % 81.8 % (1,180) bps n/a
+Added: RevPOR $ 6,645 $ 6,659 $ (14) (0.2) %
The decrease in the segment's resident fees was primarily attributable to a decrease in the segment's same community RevPAR, comprised of a 1180 basis points decrease in same community weighted average occupancy and a 0.2% decrease in same community RevPOR.
−Removed: The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic and our response efforts.
−Removed: We estimate that the COVID-19 pandemic and our response efforts resulted in $10.7 million of lost resident fee revenue on a same community basis for this segment for the three months ended June 30, 2020.
+Added: The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic, including the related restrictions at our communities.
+Added: We estimate that the COVID-19 pandemic, including the related restrictions at our communities, resulted in $11.7 million of lost resident fee revenue on a same community basis for this segment for the three months ended September 30, 2020.
The decrease in the segment's same community RevPOR was primarily the result of a mix shift away from skilled nursing within the segment, partially offset by in-place rent increases.
−Removed: Additionally, the disposition of four communities since the beginning of the prior year period resulted in $9.5 million less in resident fees during the three months ended June 30, 2020 compared to the prior year period.
−Removed: The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $9.5 million less in facility operating expense during the three months ended June 30, 2020 compared to the prior year period.
−Removed: The decrease in facility operating expense was partially offset by an increase in the segment's same community facility operating expense as a result of $6.1 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic, partially offset by decreases in labor expense arising from fewer hours worked and healthcare supplies costs during the period as we intentionally scaled back such costs for the reduced occupancy.
−Removed: In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of $0.7 million and $1.3 million , respectively, during the three months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
−Removed: Same community resident fee revenue and facility operating expense for this segment excludes $0.5 million and $0.9 million , respectively, of such additional revenue and expenses.
+Added: Additionally, the disposition of five communities since the beginning of the prior year period resulted in $11.3 million less in resident fees during the three months ended September 30, 2020 compared to the prior year period.
+Added: The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $11.6 million less in facility operating expense during the three months ended September 30, 2020 compared to the prior year period and a decrease in the segment's same community facility operating expense.
+Added: The decrease in the segment's same community facility operating expense was primarily attributable to decreases in labor expense arising from fewer hours worked and healthcare supplies costs during the period as we intentionally scaled back such costs for the reduced occupancy, partially offset by $3.1 million of incremental direct costs to respond to the COVID-19 pandemic.
+Added: In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of $0.9 million and $1.5 million, respectively, during the three months ended September 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
+Added: Same community resident fee revenue and facility
+Added: operating expense for this segment excludes $0.6 million and $1.0 million, respectively, of such additional revenue and expenses.
Operating Results - Health Care Services Segment
−Removed: The following table summarizes the operating results and data for our Health Care Services segment for the three months ended June 30, 2020 and 2019 .
−Removed: (in thousands, except census and treatment codes)
−Removed: Three Months Ended
−Removed: Increase (Decrease)
+Added: The following table summarizes the operating results and data for our Health Care Services segment for the three months ended September 30, 2020 and 2019.
+Added: (in thousands, except census) Three Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2020 2019 Amount Percent
Resident fees $ 89,903 $ 111,785 $ (21,882) (19.6) %
−Removed: Other operating income
+Added: Other operating income $ 5,892 $ — $ 5,892 NM
Facility operating expense $ 94,333 $ 107,007 $ (12,674) (11.8) %
1 unchanged sentence
Hospice average daily census 1,666 1,642 24 1.5 %
−Removed: The decrease in the segment's resident fees was primarily attributable to a decrease in revenue for home health services, as our home health average daily census began to decrease in March 2020 due to the COVID-19 pandemic, as referrals declined significantly due to suspension of elective medical procedures and hospital discharges increased due to stay-at-home orders and recommendations.
−Removed: Additionally, the implementation of the Patient-Driven Grouping Model ("PDGM"), an alternate home health case-mix adjustment methodology with a 30-day unit of payment, which became effective beginning January 1, 2020, resulted in a decrease in revenue for home health services.
−Removed: The decrease in resident fees was partially offset by an increase in volume and related revenues for hospice services.
−Removed: We estimate that the COVID-19 pandemic and our response efforts resulted in $14.8 million of lost resident fee revenue for the three months ended June 30, 2020.
−Removed: The decrease in the segment's facility operating expense was primarily attributable to a decrease in labor costs for home health services as we adjusted our home health services operational structure, to better align our facility operating expenses and business model with the new payment model.
−Removed: The decrease in the segment's facility operating expense was partially offset by $3.1 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic and an increase in labor costs for hospice services arising from wage rate increases and the expansion of our hospice services throughout 2019.
+Added: The decrease in the segment's resident fees was primarily attributable to a decrease in revenue for home health services, as our home health average daily census began to decrease in March 2020 due to the COVID-19 pandemic, which resulted in lower occupancy in our communities and fewer elective medical procedures and hospital discharges.
+Added: The implementation of the PDGM, an alternate home health case-mix adjustment methodology with a 30-day unit of payment, which became effective beginning January 1, 2020, resulted in a decrease in revenue for home health services.
+Added: We estimate that the COVID-19 pandemic, including the related restrictions at our communities, resulted in $15.1 million of lost resident fee revenue for the three months ended September 30, 2020.
+Added: The decrease in the segment's facility operating expense was primarily attributable to a decrease in labor costs for home health services as a result of the lower census and as we adjusted our home health services operational structure, to better align our facility operating expenses and business model with the new payment model.
+Added: The decrease in the segment's facility operating expense was partially offset by $2.4 million of incremental direct costs to respond to the COVID-19 pandemic.
Operating Results - Management Services Segment
−Removed: The following table summarizes the operating results and data for our Management Services segment for the three months ended June 30, 2020 and 2019 .
−Removed: (in thousands, except communities, units, and occupancy)
−Removed: Three Months Ended
−Removed: Increase (Decrease)
+Added: The following table summarizes the operating results and data for our Management Services segment for the three months ended September 30, 2020 and 2019.
+Added: (in thousands, except communities, units, and occupancy) Three Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2020 2019 Amount Percent
Management fees $ 5,669 $ 13,564 $ (7,895) (58.2) %
4 unchanged sentences
The decrease in management fees was primarily attributable to the transition of management arrangements on 64 net communities since the beginning of the prior year period, generally for management arrangements on certain former unconsolidated ventures in which we sold our interest and interim management arrangements on formerly leased communities.
−Removed: Management fees of $6.1 million for the three months ended June 30, 2020 include $1.8 million of management fees attributable to communities for which our management agreements were terminated during such period or we expect the terminations of our management agreements to occur in the next approximately 12 months, including management arrangements on certain former unconsolidated ventures in which we sold our interest, management agreements on communities owned by unconsolidated ventures, and interim management arrangements on formerly leased communities.
+Added: Management fees of $5.7 million for the three months ended September 30, 2020 include $1.3 million of management fees attributable to communities for which our management agreements were terminated during such period or we expect the terminations of our management agreements to occur in the next approximately 12 months.
The decrease in reimbursed costs incurred on behalf of managed communities was primarily attributable to terminations of management agreements subsequent to the beginning of the prior year period.
Operating Results - Other Income and Expense Items
−Removed: The following table summarizes other income and expense items in our operating results for the three months ended June 30, 2020 and 2019 .
−Removed: (in thousands)
−Removed: Three Months Ended
−Removed: Increase (Decrease)
+Added: The following table summarizes other income and expense items in our operating results for the three months ended September 30, 2020 and 2019.
+Added: (in thousands) Three Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2020 2019 Amount Percent
General and administrative expense $ 54,138 $ 56,409 $ (2,271) (4.0) %
1 unchanged sentence
Depreciation and amortization 87,821 93,550 (5,729) (6.1) %
−Removed: Asset impairment
−Removed: Loss (gain) on facility lease termination and modification, net
+Added: Asset impairment 8,213 2,094 6,119 NM
Costs incurred on behalf of managed communities 90,775 194,148 (103,373) (53.2) %
2 unchanged sentences
Gain (loss) on debt modification and extinguishment, net
−Removed: Equity in earnings (loss) of unconsolidated ventures
−Removed: Gain (loss) on sale of assets, net
+Added: (7,917) (2,455) 5,462 NM
+Added: Equity in earnings (loss) of unconsolidated ventures (293) (2,057) 1,764 NM
+Added: Gain (loss) on sale of assets, net 2,209 579 1,630 NM
Other non-operating income (loss) 948 3,763 (2,815) (74.8) %
−Removed: Benefit (provision) for income taxes
+Added: Benefit (provision) for income taxes (14,884) 1,800 16,684 NM
General and Administrative Expense.
−Removed: The decrease in general and administrative expense was primarily attributable to a reduction in our travel costs as we intentionally scaled back such activities, a reduction in our incentive compensation costs, and a reduction in our corporate headcount as we scaled our general and administrative costs in connection with community dispositions.
−Removed: The decrease was partially offset by a $2.7 million increase in transactional and organizational restructuring costs compared to the prior period, to $3.4 million for the three months ended June 30, 2020 .
+Added: The decrease in general and administrative expense was primarily attributable to a reduction in our travel costs as we intentionally scaled back such activities and a reduction in our corporate headcount as we scaled our general and administrative costs in connection with community dispositions.
+Added: The decrease was partially offset by a $2.3 million increase in transaction and organizational restructuring costs compared to the prior period, to $6.3 million for the three months ended September 30, 2020.
Transaction costs include those directly related to acquisition, disposition, financing and leasing activity, and stockholder relations advisory matters, and are primarily comprised of legal, finance, consulting, professional fees and other third party costs.
Organizational restructuring costs include those related to our efforts to reduce general and administrative expense and our senior leadership changes, including severance costs.
−Removed: We expect transaction and organizational restructuring costs will be higher in the three months ending September 30, 2020 including such costs incurred with respect to the transaction with Ventas announced on July 27, 2020.
Facility Operating Lease Expense.
−Removed: The decrease in facility operating lease expense was primarily due to the acquisition of formerly leased communities since the beginning of the prior year period.
+Added: The decrease in facility operating lease expense was primarily due to the Ventas lease portfolio restructuring during the current year period and the acquisition of formerly leased communities since the beginning of the prior year period.
+Added: Depreciation and Amortization .
+Added: The decrease in depreciation and amortization expense was primarily due to leasehold improvements for certain leased communities becoming fully depreciated since the beginning of the prior year period and disposition activity since the beginning of the prior year period.
Asset Impairment.
−Removed: During the current year period, we recorded $10.3 million of non-cash impairment charges, primarily for right-of-use assets for certain leased communities with decreased future cash flow estimates as a result of the COVID-19 pandemic.
+Added: During the current year period, we recorded $8.2 million of non-cash impairment charges, primarily for hurricane and other natural disaster related property damage sustained at certain communities during the period and for right-of-use assets for certain leased communities with decreased future cash flow estimates as a result of the COVID-19 pandemic.
During the prior year period, we recorded $2.1 million of non-cash impairment charges.
5 unchanged sentences
Benefit (Provision) for Income Taxes.
−Removed: The difference between our effective tax rate for the three months ended June 30, 2020 and 2019 was primarily due to the annualized effective rate for 2020.
−Removed: We recorded an aggregate deferred federal, state, and local tax benefit of $26.7 million as a result of the operating loss for the three months ended June 30, 2020 , which was offset by an increase in the valuation allowance of $33.2 million .
−Removed: The change in the valuation allowance for the three months ended June 30, 2020 resulted from the anticipated reversal of future tax liabilities offset by future tax deductions.
−Removed: We recorded an aggregate deferred federal, state, and local tax benefit of $13.0 million as a result of the operating loss for the three months ended June 30, 2019 .
+Added: The difference between our effective tax rate for the three months ended September 30, 2020 and 2019 was primarily due to the impact of the increase to the valuation allowance on the annualized effective rate for
+Added: We recorded an aggregate deferred federal, state, and local tax benefit of $27.4 million as a result of the operating loss for the three months ended September 30, 2020, which was offset by an increase in the valuation allowance of $40.0 million.
+Added: The change in the valuation allowance for the three months ended September 30, 2020 resulted from the anticipated reversal of future tax liabilities offset by future tax deductions.
+Added: We recorded an aggregate deferred federal, state, and local tax benefit of $19.4 million as a result of the operating loss for the three months ended September 30, 2019.
The tax benefit was offset by an increase in the valuation allowance of $17.8 million.
−Removed: Comparison of Six Months Ended June 30, 2020 and 2019
+Added: Comparison of Nine Months Ended September 30, 2020 and 2019
Summary Operating Results
−Removed: The following table summarizes our overall operating results for the six months ended June 30, 2020 and 2019 .
−Removed: Six Months Ended
−Removed: Increase (Decrease)
−Removed: (in thousands)
−Removed: Total revenue and other operating income
+Added: The following table summarizes our overall operating results for the nine months ended September 30, 2020 and 2019.
+Added: Nine Months Ended
+Added: September 30, Increase (Decrease)
+Added: (in thousands) 2020 2019 Amount Percent
+Added: Total resident fees and management fees revenue $ 2,335,567 $ 2,457,335 $ (121,768) (5.0) %
+Added: Other operating income 37,458 — 37,458 NM
Facility operating expense 1,765,046 1,792,057 (27,011) (1.5) %
−Removed: Net income (loss)
+Added: Net income (loss) 126,084 (177,169) 303,253 NM
Adjusted EBITDA 165,783 301,066 (135,283) (44.9) %
−Removed: The decrease in total revenue and other operating income was primarily attributable to an $111.1 million decrease in management services revenue, including management fees and reimbursed costs incurred on behalf of managed communities, primarily due to terminations of management agreements subsequent to the beginning of the prior year period, partially offset by $100.0 million of management fee revenue during the three months ended March 31, 2020 for the management termination fee payment from Healthpeak.
−Removed: Resident fees decreased $97.0 million, including a $42.5 million decrease for home health services, as our home health average daily census began to decrease in March 2020 due to the COVID-19 pandemic and the implementation of the Patient-Driven Grouping Model ("PDGM"), an alternate home health case-mix adjustment methodology with a 30-day unit of payment, which became effective beginning January 1, 2020.
−Removed: Additionally, the disposition of 27 communities through sales of owned communities and lease terminations since the beginning of the prior year period resulted in $37.4 million less in resident fees during the six months ended June 30, 2020 compared to the prior year period.
+Added: The decrease in total resident fees and management fees revenue was primarily attributable to a $197.5 million decrease in resident fees, including a $61.6 million decrease for home health services, as our home health average daily census began to decrease in March 2020 due to the COVID-19 pandemic and due to the implementation of the PDGM.
+Added: Additionally, the disposition of 35 communities through sales and conveyances of owned communities and lease terminations since the beginning of the prior year period resulted in $59.3 million less in resident fees during the nine months ended September 30, 2020 compared to the prior year period.
Same community RevPAR decreased 3.1%, comprised of a 500 basis points decrease in same community weighted average occupancy and a 3.0% increase in same community RevPOR.
−Removed: We estimate that the COVID-19 pandemic and our response efforts resulted in $45.5 million of lost resident fee revenue on a same community basis for the six months ended June 30, 2020.
−Removed: Our total revenue and other operating income for the six months ended June 30, 2020 includes $26.7 million of government grants as other operating income based on our estimates of our satisfaction of the conditions of the grants during the period.
−Removed: The increase in facility operating expense was primarily attributable to a 9.2% increase in same community facility operating expense, which was primarily due to $62.0 million of incremental costs incurred during the six months ended June 30, 2020 to address the COVID-19 pandemic.
+Added: We estimate that the COVID-19 pandemic, including the related restrictions at our communities, resulted in $115.8 million of lost resident fee revenue on a same community basis for the nine months ended September 30, 2020.
+Added: Management fee revenue increased $75.7 million primarily due to $100.0 million of management fee revenue during the three months ended March 31, 2020 for the management termination fee payment from Healthpeak partially offset by terminations of management agreements subsequent to the beginning of the prior year period.
+Added: Our other operating income for the nine months ended September 30, 2020 includes $37.5 million of government grants based on our estimates of our satisfaction of the conditions of the grants during the period.
+Added: The decrease in facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $52.6 million less in facility operating expense during the nine months ended September 30, 2020 compared to the prior year period.
+Added: Additionally, there was a decrease in labor costs for home health services as a result of the lower census and as we adjusted our home health services operational structure, to better align our facility operating expenses and business model with the new payment model.
+Added: The decrease was partially offset by a 6.1% increase in same community facility operating expense, which was primarily due to $81.6 million of incremental costs incurred during the nine months ended September 30, 2020 to respond to the COVID-19 pandemic.
Additionally, there was an increase in labor expense arising from wage rate increases, an increase in employee benefit expense, and an extra day of expense due to the leap year.
−Removed: The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $34.2 million less in facility operating expense during the six months ended June 30, 2020 compared to the prior year period.
−Removed: In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense of $8.1 million and $21.0 million , respectively, during the six months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
+Added: In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense of $16.0 million and $35.0 million, respectively, during the nine months ended September 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
Same community resident fee revenue and facility operating expense excludes $14.6 million and $31.9 million, respectively, of such additional revenue and expenses.
−Removed: The increase in net income was primarily attributable to a $369.8 million increase in net gain on sale of assets, resulting from our sale of our interest in the CCRC Venture, offset by the net revenue and facility operating expense factors previously discussed.
−Removed: The increase in Adjusted EBITDA was primarily attributable to the management termination fee, offset by the other revenue and facility operating expense factors previously discussed.
+Added: The increase in net income was primarily attributable to a $371.3 million increase in net gain on sale of assets, resulting from our sale of our interest in the CCRC Venture, partially offset by the net revenue and facility operating expense factors previously discussed.
+Added: The decrease in Adjusted EBITDA was primarily attributable to the $119.2 million one-time cash lease payment made to Ventas in connection with our lease restructuring transaction effective July 26, 2020 and the revenue and facility operating expense factors previously discussed, partially offset by a decrease in general and administrative expense.
Operating Results - Senior Housing Segments
−Removed: The following table summarizes the operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) on a combined basis for the six months ended June 30, 2020 and 2019 including operating results and data on a same community basis.
+Added: The following table summarizes the operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) on a combined basis for the nine months ended September 30, 2020 and 2019 including operating results and data on a same community basis.
See management's discussion and analysis of the operating results on an individual segment basis on the following pages.
−Removed: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
−Removed: Six Months Ended
−Removed: Increase (Decrease)
+Added: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR) Nine Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2020 2019 Amount Percent
Resident fees $ 1,940,215 $ 2,074,828 $ (134,613) (6.5) %
−Removed: Other operating income
+Added: Other operating income $ 14,571 $ — $ 14,571 NM
Facility operating expense $ 1,469,300 $ 1,476,424 $ (7,124) (0.5) %
2 unchanged sentences
Total average units 53,888 55,728 (1,840) (3.3) %
−Removed: Occupancy rate (weighted average)
+Added: RevPAR $ 3,997 $ 4,103 $ (106) (2.6) %
+Added: Occupancy rate (weighted average) 79.1 % 83.7 % (460) bps n/a
+Added: RevPOR $ 5,054 $ 4,900 $ 154 3.1 %
Same Community Operating Results and Data
Resident fees $ 1,783,556 $ 1,840,604 $ (57,048) (3.1) %
−Removed: Other operating income
+Added: Other operating income $ 10,155 $ — $ 10,155 NM
Facility operating expense $ 1,337,034 $ 1,260,094 $ 76,940 6.1 %
1 unchanged sentence
Total average units 49,366 49,358 8 — %
−Removed: Occupancy rate (weighted average)
+Added: RevPAR $ 4,014 $ 4,144 $ (130) (3.1) %
+Added: Occupancy rate (weighted average) 79.4 % 84.4 % (500) bps n/a
+Added: RevPOR $ 5,056 $ 4,910 $ 146 3.0 %
Independent Living Segment
−Removed: The following table summarizes the operating results and data for our Independent Living segment for the six months ended June 30, 2020 and 2019 , including operating results and data on a same community basis.
−Removed: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
−Removed: Six Months Ended
−Removed: Increase (Decrease)
+Added: The following table summarizes the operating results and data for our Independent Living segment for the nine months ended September 30, 2020 and 2019, including operating results and data on a same community basis.
+Added: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR) Nine Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2020 2019 Amount Percent
Resident fees $ 391,902 $ 408,519 $ (16,617) (4.1) %
−Removed: Other operating income
+Added: Other operating income $ 96 $ — $ 96 NM
Facility operating expense $ 257,108 $ 254,770 $ 2,338 0.9 %
2 unchanged sentences
Total average units 12,532 12,460 72 0.6 %
−Removed: Occupancy rate (weighted average)
+Added: RevPAR $ 3,475 $ 3,592 $ (117) (3.3) %
+Added: Occupancy rate (weighted average) 83.5 % 89.3 % (580) bps n/a
+Added: RevPOR $ 4,160 $ 4,021 $ 139 3.5 %
Same Community Operating Results and Data
Resident fees $ 369,044 $ 380,208 $ (11,164) (2.9) %
−Removed: Other operating income
+Added: Other operating income $ 96 $ — $ 96 NM
Facility operating expense $ 240,043 $ 230,566 $ 9,477 4.1 %
1 unchanged sentence
Total average units 11,704 11,691 13 0.1 %
−Removed: Occupancy rate (weighted average)
−Removed: The decrease in the segment's resident fees was primarily attributable to the additional resident fee revenue for this segment of $3.3 million during the six months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019 and a decrease in the segment's same community RevPAR, comprised of a 360 basis points decrease in same community weighted average occupancy and a 2.9% increase in same community RevPOR.
−Removed: The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic and our response efforts.
−Removed: We estimate that the COVID-19 pandemic and our response efforts resulted in $6.9 million of lost resident fee revenue on a same community basis for this segment for the six months ended June 30, 2020.
+Added: RevPAR $ 3,503 $ 3,613 $ (110) (3.0) %
+Added: Occupancy rate (weighted average) 83.8 % 89.2 % (540) bps n/a
+Added: RevPOR $ 4,181 $ 4,050 $ 131 3.2 %
+Added: The decrease in the segment's resident fees was primarily attributable to a decrease in the segment's same community RevPAR, comprised of a 540 basis points decrease in same community weighted average occupancy and a 3.2% increase in same community RevPOR.
+Added: The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic, including the related restrictions at our communities.
+Added: We estimate that the COVID-19 pandemic, including the related restrictions at our communities, resulted in $18.5 million of lost resident fee revenue on a same community basis for this segment for the nine months ended September 30, 2020.
The increase in the segment's same community RevPOR was primarily the result of in-place rent increases.
The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense, including $11.8 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic, an increase in labor expense arising from wage rate increases, an increase in employee benefit expense, and an extra day of expense due to the leap year.
−Removed: These increases in the segment's same community facility operating expense were partially offset by decreases in repairs and maintenance costs due to fewer move-ins during the period as we intentionally scaled back such activities.
−Removed: We recognized additional resident fee revenue and additional facility operating expense for this segment of $3.3 million and $5.7 million , respectively, during the six months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
+Added: These increases in the segment's same community facility operating expense were partially offset by decreases in repairs and maintenance costs due to fewer move-ins during the period and supplies costs due to the reduced occupancy during the period.
+Added: We recognized additional resident fee revenue and additional facility operating expense for this segment of $5.8 million and $9.2 million, respectively, during the nine months ended September 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
Same community resident fee revenue and facility operating expense for this segment excludes approximately $5.4 million and $8.7 million, respectively, of such additional revenue and expenses.
Assisted Living and Memory Care Segment
−Removed: The following table summarizes the operating results and data for our Assisted Living and Memory Care segment for the six months ended June 30, 2020 and 2019 , including operating results and data on a same community basis.
−Removed: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
−Removed: Six Months Ended
−Removed: Increase (Decrease)
+Added: The following table summarizes the operating results and data for our Assisted Living and Memory Care segment for the nine months ended September 30, 2020 and 2019, including operating results and data on a same community basis.
+Added: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR) Nine Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2020 2019 Amount Percent
Resident fees $ 1,298,330 $ 1,361,225 $ (62,895) (4.6) %
−Removed: Other operating income
+Added: Other operating income $ 2,088 $ — $ 2,088 NM
Facility operating expense $ 993,557 $ 970,526 $ 23,031 2.4 %
2 unchanged sentences
Total average units 35,666 36,701 (1,035) (2.8) %
−Removed: Occupancy rate (weighted average)
+Added: RevPAR $ 4,045 $ 4,096 $ (51) (1.2) %
+Added: Occupancy rate (weighted average) 78.1 % 82.3 % (420) bps n/a
+Added: RevPOR $ 5,181 $ 4,979 $ 202 4.1 %
Same Community Operating Results and Data
Resident fees $ 1,251,865 $ 1,280,151 $ (28,286) (2.2) %
−Removed: Other operating income
+Added: Other operating income $ 2,088 $ — $ 2,088 NM
Facility operating expense $ 955,595 $ 889,423 $ 66,172 7.4 %
1 unchanged sentence
Total average units 34,050 34,055 (5) — %
−Removed: Occupancy rate (weighted average)
−Removed: The decrease in the segment's resident fees was primarily attributable to the disposition of 22 communities since the beginning of the prior year period, which resulted in $18.0 million less in resident fees during the six months ended June 30, 2020 compared to the prior year period.
−Removed: The decrease in resident fees was partially offset by the increase in the segment's same community RevPAR, comprised of a 3.2% increase in same community RevPOR and a 240 basis points decrease in same community weighted average occupancy.
+Added: RevPAR $ 4,085 $ 4,177 $ (92) (2.2) %
+Added: Occupancy rate (weighted average) 78.3 % 82.9 % (460) bps n/a
+Added: RevPOR $ 5,214 $ 5,038 $ 176 3.5 %
+Added: The decrease in the segment's resident fees was primarily attributable to a decrease in the segment's same community RevPAR, comprised of a 460 basis points decrease in same community weighted average occupancy and a 3.5% increase in same community RevPOR.
+Added: The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic, including the related restrictions at our communities.
+Added: We estimate that the COVID-19 pandemic, including the related restrictions at our communities, resulted in $74.6 million of lost resident fee revenue on a same community basis for this segment for the nine months ended September 30, 2020.
The increase in the segment's same community RevPOR was primarily the result of in-place rent increases.
−Removed: The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic and our response efforts.
−Removed: We estimate that the COVID-19 pandemic and our response efforts resulted in $27.6 million of lost resident fee revenue on a same community basis for this segment for the six months ended June 30, 2020.
+Added: Additionally, the disposition of 30 communities since the beginning of the prior year period resulted in $27.5 million less in resident fees during the nine months ended September 30, 2020 compared to the prior year period.
The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense, including $60.2 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic, and an increase in labor expense arising from wage rate increases, increased contract labor costs, an increase in employee benefit expense, and an extra day of expense due to the leap year.
The increase in the segment's same community facility operating expense was partially offset by decreases in repairs and maintenance costs due to fewer move-ins during the period as we intentionally scaled back such activities.
−Removed: The increase in facility operating expense was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $15.2 million less in facility operating expense during the six months ended June 30, 2020 compared to the prior year period.
−Removed: In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of approximately $3.6 million and $12.8 million , respectively, during the six months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
−Removed: Same community resident fee revenue and facility operating expense for this segment excludes approximately $3.5 million and $12.2 million , respectively, of such additional revenue and expenses.
+Added: The increase in facility operating expense was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $22.2 million less in facility operating expense during the nine months ended September 30, 2020 compared to the prior year period.
+Added: In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of approximately $8.3 million and $21.9 million, respectively, during the nine months ended September 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
+Added: Same community resident fee
+Added: revenue and facility operating expense for this segment excludes approximately $7.8 million and $20.5 million, respectively, of such additional revenue and expenses.
CCRCs Segment
−Removed: The following table summarizes the operating results and data for our CCRCs segment for the six months ended June 30, 2020 and 2019 , including operating results and data on a same community basis.
−Removed: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR)
−Removed: Six Months Ended
−Removed: Increase (Decrease)
+Added: The following table summarizes the operating results and data for our CCRCs segment for the nine months ended September 30, 2020 and 2019, including operating results and data on a same community basis.
+Added: (in thousands, except communities, units, occupancy, RevPAR, and RevPOR) Nine Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2020 2019 Amount Percent
Resident fees $ 249,983 $ 305,084 $ (55,101) (18.1) %
−Removed: Other operating income
+Added: Other operating income $ 12,387 $ — $ 12,387 NM
Facility operating expense $ 218,635 $ 251,128 $ (32,493) (12.9) %
2 unchanged sentences
Total average units 5,690 6,567 (877) (13.4) %
−Removed: Occupancy rate (weighted average)
+Added: RevPAR $ 4,850 $ 5,108 $ (258) (5.1) %
+Added: Occupancy rate (weighted average) 75.7 % 81.3 % (560) bps n/a
+Added: RevPOR $ 6,405 $ 6,284 $ 121 1.9 %
Same Community Operating Results and Data
Resident fees $ 162,647 $ 180,245 $ (17,598) (9.8) %
−Removed: Other operating income
+Added: Other operating income $ 7,971 $ — $ 7,971 NM
Facility operating expense $ 141,396 $ 140,105 $ 1,291 0.9 %
1 unchanged sentence
Total average units 3,612 3,612 — —
−Removed: Occupancy rate (weighted average)
−Removed: The decrease in the segment's resident fees was primarily attributable to the disposition of five communities since the beginning of the prior year period, which resulted in $19.4 million less in resident fees during the six months ended June 30, 2020 compared to the prior year period.
+Added: RevPAR $ 5,003 $ 5,545 $ (542) (9.8) %
+Added: Occupancy rate (weighted average) 75.0 % 82.7 % (770) bps n/a
+Added: RevPOR $ 6,663 $ 6,703 $ (40) (0.6) %
+Added: The decrease in the segment's resident fees was primarily attributable to the disposition of five communities since the beginning of the prior year period, which resulted in $31.8 million less in resident fees during the nine months ended September 30, 2020 compared to the prior year period.
Additionally, there was a decrease in the segment's same community RevPAR, comprised of a 770 basis points decrease in same community weighted average occupancy and a 0.6% decrease in same community RevPOR.
−Removed: The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic and our response efforts.
−Removed: We estimate that the COVID-19 pandemic and our response efforts resulted in $11.0 million of lost resident fee revenue on a same community basis for this segment for the six months ended June 30, 2020.
+Added: The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic, including the related restrictions at our communities.
+Added: We estimate that the COVID-19 pandemic, including the related restrictions at our communities, resulted in $22.7 million of lost resident fee revenue on a same community basis for this segment for the nine months ended September 30, 2020.
The decrease in the segment's same community RevPOR was primarily the result of a mix shift away from skilled nursing within the segment, partially offset by in-place rent increases.
−Removed: The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $19.0 million less in facility operating expense during the six months ended June 30, 2020 compared to the prior year period.
+Added: The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $30.4 million less in facility operating expense during the nine months ended September 30, 2020 compared to the prior year period.
The decrease in facility operating expense was partially offset by an increase in the segment's same community facility operating expense, including $9.6 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic, partially offset by decreases in labor expense arising from fewer hours worked and healthcare supplies costs during the period as we intentionally scaled back such costs for the reduced occupancy.
−Removed: In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of approximately $1.1 million and $2.5 million , respectively, during the six months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019.
+Added: In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of approximately $2.0 million and $4.0 million, respectively, during the nine months ended September 30, 2019 as
+Added: a result of the application of the new lease accounting standard effective January 1, 2019.
Same community resident fee revenue and facility operating expense for this segment excludes approximately $1.4 million and $2.7 million, respectively, of such additional revenue and expenses.
Operating Results - Health Care Services Segment
−Removed: The following table summarizes the operating results and data for our Health Care Services segment for the six months ended June 30, 2020 and 2019 .
−Removed: (in thousands, except census and treatment codes)
−Removed: Six Months Ended
−Removed: Increase (Decrease)
+Added: The following table summarizes the operating results and data for our Health Care Services segment for the nine months ended September 30, 2020 and 2019.
+Added: (in thousands, except census) Nine Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2020 2019 Amount Percent
Resident fees $ 274,892 $ 337,751 $ (62,859) (18.6) %
−Removed: Other operating income
+Added: Other operating income $ 22,887 $ — $ 22,887 NM
Facility operating expense $ 295,746 $ 315,633 $ (19,887) (6.3) %
1 unchanged sentence
Hospice average daily census 1,670 1,538 132 8.6 %
−Removed: The decrease in the segment's resident fees was primarily attributable to a decrease in revenue for home health services, which reflects the implementation of the Patient-Driven Grouping Model ("PDGM"), an alternate home health case-mix adjustment methodology with a 30-day unit of payment, which became effective beginning January 1, 2020.
−Removed: Additionally, our home health average daily census also began to decrease in March 2020 due to the COVID-19 pandemic, as referrals declined significantly due to suspension of elective medical procedures and hospital discharges increased due to stay-at-home orders and recommendations.
+Added: The decrease in the segment's resident fees was primarily attributable to a decrease in revenue for home health services, which reflects the implementation of the PDGM.
+Added: Additionally, our home health average daily census also began to decrease in March 2020 due to the COVID-19 pandemic, which resulted in lower occupancy in our communities and fewer elective medical procedures and hospital discharges.
The decrease in resident fees was partially offset by an increase in volume for hospice services.
−Removed: We estimate that the COVID-19 pandemic and our response efforts resulted in $17.9 million of lost resident fee revenue for the six months ended June 30, 2020.
−Removed: The decrease in the segment's facility operating expense was primarily attributable to a decrease in labor costs for home health services as we adjusted our home health services operational structure, to better align our facility operating expenses and business model with the new payment model.
+Added: We estimate that the COVID-19 pandemic, including the related restrictions at our communities, resulted in $32.9 million of lost resident fee revenue for the nine months ended September 30, 2020.
+Added: The decrease in the segment's facility operating expense was primarily attributable to a decrease in labor costs for home health services as a result of the lower census and as we adjusted our home health services operational structure, to better align our facility operating expenses and business model with the new payment model.
The decrease in the segment's facility operating expense was partially offset by $5.9 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic and an increase in labor costs for hospice services arising from wage rate increases and the expansion of our hospice services throughout 2019.
Operating Results - Management Services Segment
−Removed: The following table summarizes the operating results and data for our Management Services segment for the six months ended June 30, 2020 and 2019 .
−Removed: (in thousands, except communities, units, and occupancy)
−Removed: Six Months Ended
−Removed: Increase (Decrease)
−Removed: Management fees
+Added: The following table summarizes the operating results and data for our Management Services segment for the nine months ended September 30, 2020 and 2019.
+Added: (in thousands, except communities, units, and occupancy) Nine Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2020 2019 Amount Percent
+Added: Management fees $ 120,460 $ 44,756 $ 75,704 NM
Reimbursed costs incurred on behalf of managed communities $ 315,003 $ 613,115 $(298,112) (48.6) %
4 unchanged sentences
We have completed the transition of management arrangements on 131 net communities since the beginning of the prior year period, generally for interim management arrangements on former unconsolidated ventures in which we sold our interest and interim management arrangements on formerly leased or owned communities.
−Removed: Management fees of $114.8 million for the six months ended June 30, 2020 include $102.2 million of management fees attributable to communities for which our management agreements were terminated during such period and approximately $3.3 million of management fees attributable to communities that we expect the terminations of our management agreements to occur in the next approximately 12 months, including management agreements on certain former unconsolidated ventures in which
−Removed: we sold our interest, management agreements on communities owned by unconsolidated ventures, and interim management arrangements on formerly leased communities.
+Added: Management fees of $120.5 million for the nine months ended September 30, 2020 include $103.9 million of management fees attributable to communities for which our management agreements were terminated during such period and approximately $3.0 million of management fees attributable to communities that we expect the terminations of our management agreements to occur in the next approximately 12 months.
The decrease in reimbursed costs incurred on behalf of managed communities was primarily attributable to terminations of management agreements subsequent to the beginning of the prior year period.
Operating Results - Other Income and Expense Items
−Removed: The following table summarizes other income and expense items in our operating results for the six months ended June 30, 2020 and 2019 .
−Removed: (in thousands)
−Removed: Six Months Ended
−Removed: Increase (Decrease)
+Added: The following table summarizes other income and expense items in our operating results for the nine months ended September 30, 2020 and 2019.
+Added: (in thousands) Nine Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2020 2019 Amount Percent
General and administrative expense $ 161,251 $ 170,296 $ (9,045) (5.3) %
1 unchanged sentence
Depreciation and amortization 271,713 284,462 (12,749) (4.5) %
−Removed: Asset impairment
+Added: Asset impairment 96,729 6,254 90,475 NM
Loss (gain) on facility lease termination and modification, net
+Added: — 2,006 (2,006) (100.0) %
Costs incurred on behalf of managed communities 315,003 613,115 (298,112) (48.6) %
2 unchanged sentences
Gain (loss) on debt modification and extinguishment, net
+Added: 11,107 (5,194) 16,301 NM
Equity in earnings (loss) of unconsolidated ventures (863) (3,574) (2,711) (75.9) %
−Removed: Gain (loss) on sale of assets, net
+Added: Gain (loss) on sale of assets, net 374,019 2,723 371,296 NM
Other non-operating income (loss) 4,598 9,950 (5,352) (53.8) %
−Removed: Benefit (provision) for income taxes
+Added: Benefit (provision) for income taxes (7,560) 488 (8,048) NM
General and Administrative Expense .
−Removed: The decrease in general and administrative expense was primarily attributable to a reduction in our corporate headcount, as we scaled our general and administrative costs in connection with community dispositions, a reduction in our travel costs as we intentionally scaled back such activities, and a reduction in our incentive compensation costs.
−Removed: The decrease was partially offset by a $4.3 million increase in transactional and organizational restructuring costs compared to the prior period, to $5.3 million for the six months ended June 30, 2020 .
+Added: The decrease in general and administrative expense was primarily attributable to a reduction in our travel costs as we intentionally scaled back such activities, a reduction in our corporate headcount, as we scaled our general and administrative costs in connection with community dispositions, and a reduction in our incentive compensation costs.
+Added: The decrease was partially offset by a $6.6 million increase in transaction and organizational restructuring costs compared to the prior period, to $11.6 million for the nine months ended September 30, 2020.
Transaction costs include those directly related to acquisition, disposition, financing and leasing activity, and stockholder relations advisory matters, and are primarily comprised of legal, finance, consulting, professional fees and other third party costs.
Organizational restructuring costs include those related to our efforts to reduce general and administrative expense and our senior leadership changes, including severance costs.
−Removed: We expect transaction and organizational restructuring costs will be higher in the three months ending September 30, 2020 including such costs incurred with respect to the transaction with Ventas announced on July 27, 2020.
Facility Operating Lease Expense.
−Removed: The decrease in facility operating lease expense was primarily due to the acquisition of formerly leased communities and lease termination activity since the beginning of the prior year.
+Added: The decrease in facility operating lease expense was primarily due to the acquisition of formerly leased communities and lease termination activity since the beginning of the prior year and the Ventas lease portfolio restructuring during the current year period.
Depreciation and Amortization .
−Removed: The decrease in depreciation and amortization expense was primarily due to disposition activity through sales and lease terminations since the beginning of the prior year.
+Added: The decrease in depreciation and amortization expense was primarily due to leasehold improvements for certain leased communities becoming fully depreciated since the beginning of the prior year period and disposition activity since the beginning of the prior year.
Asset Impairment.
9 unchanged sentences
Gain (Loss) on Sale of Assets, Net.
−Removed: The increase in gain on sale of assets, net was primarily due to a $369.8 million gain on sale of assets recognized for the sale of our ownership interest in the CCRC Venture during the six months ended June 30, 2020.
+Added: The increase in gain on sale of assets, net was primarily due to a $369.8 million gain on sale of assets recognized for the sale of our ownership interest in the CCRC Venture during the nine months ended September 30, 2020.
Benefit (Provision) for Income Taxes.
−Removed: The difference between our effective tax rate for the six months ended June 30, 2020 and 2019 was primarily due to a decrease in the valuation allowance that was a direct result of the multi-part transaction with Healthpeak.
−Removed: This was partially offset by the adjustment for stock-based compensation, which was greater in the six months ended June 30, 2019 compared to the six months ended June 30, 2020 .
−Removed: We recorded an aggregate deferred federal, state, and local tax expense of $64.2 million , of which, $28.9 million was recorded as a result of the benefit on our operating loss for the six months ended June 30, 2020 .
+Added: The difference between our effective tax rate for the nine months ended September 30, 2020 and 2019 was due to a decrease in the valuation allowance that was a direct result of the multi-part transaction with Healthpeak, and the impact of the increase of the annualized valuation allowance on the annualized effective rate for 2020.
+Added: We recorded an aggregate deferred federal, state, and local tax expense of $36.8 million, of which, $56.3 million was recorded as a result of the benefit on our operating loss for the nine months ended September 30, 2020.
The benefit was offset by $93.1 million of tax expense that was recorded on the sale of our interest in the CCRC Venture.
The tax expense was offset by a decrease in the valuation allowance of $39.5 million.
−Removed: The change in the valuation allowance for the six months ended June 30, 2020 resulted from the tax impact of the Healthpeak transaction and the anticipated reversal of future tax liabilities offset by future tax deductions.
−Removed: We recorded an aggregate deferred federal, state, and local tax benefit of $21.2 million as a result of the operating loss for the six months ended June 30, 2019 , which was offset by an increase in the valuation allowance of $21.7 million .
+Added: The change in the valuation allowance for the nine months ended September 30, 2020 resulted from the tax impact of the Healthpeak transaction, the increase in valuation allowance on current operating losses, and the anticipated reversal of future tax liabilities offset by future tax deductions.
+Added: We recorded an aggregate deferred federal, state, and local tax benefit of $40.7 million as a result of the operating loss for the nine months ended September 30, 2019, which was offset by an increase in the valuation allowance of $39.4 million.
Liquidity and Capital Resources
3 unchanged sentences
The following is a summary of cash flows from operating, investing, and financing activities, as reflected in the condensed consolidated statements of cash flows, and our Adjusted Free Cash Flow:
−Removed: Six Months Ended
−Removed: Increase (Decrease)
−Removed: (in thousands)
+Added: Nine Months Ended
+Added: September 30, Increase (Decrease)
+Added: (in thousands) 2020 2019 Amount Percent
Net cash provided by (used in) operating activities $ 132,150 $ 128,330 $ 3,820 3.0 %
Net cash provided by (used in) investing activities (343,964) (150,355) 193,609 128.8 %
−Removed: Net cash provided by (used in) financing activities
+Added: Net cash provided by (used in) financing activities 403,192 (112,834) 516,026 NM
Net increase (decrease) in cash, cash equivalents, and restricted cash
+Added: 191,378 (134,859) 326,237 NM
Cash, cash equivalents, and restricted cash at beginning of period
+Added: 301,697 450,218 (148,521) (33.0) %
Cash, cash equivalents, and restricted cash at end of period
−Removed: Adjusted Free Cash Flow
−Removed: The increase in net cash provided by operating activities was attributable primarily to the $100.0 million management termination fee payment received from Healthpeak, $85.0 million of cash received under the Medicare accelerated and advance payment program, $33.5 million of government grants accepted, and $26.5 million of social security payroll taxes deferred during the current year period.
−Removed: These changes were partially offset by an increase in same community facility operating expense, a decrease in same community revenue, and a decrease in revenue for home health services compared to the prior year period.
+Added: $ 493,075 $ 315,359 $ 177,716 56.4 %
+Added: Adjusted Free Cash Flow $ 4,306 $ (76,915) $ 81,221 NM
+Added: The increase in net cash provided by operating activities was attributable primarily to the $100.0 million management termination fee payment received from Healthpeak, $87.5 million of cash received under the Medicare accelerated and advance payment program, $50.1 million of the employer portion of social security payroll taxes deferred, and $36.1 million of government grants accepted during the current year period.
+Added: These changes were partially offset by the $119.2 million one-time cash lease payment made to Ventas in connection with our lease restructuring transaction effective July 26, 2020, $95.1 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic, a decrease in same community revenue, and a decrease in revenue for home health services compared to the prior year period.
The increase in net cash used in investing activities was primarily attributable to $472.2 million of cash paid for the acquisition of communities during the current year period, a $117.6 million increase in purchases of marketable securities compared to the prior year period, and a $31.3 million decrease in cash proceeds from notes receivable compared to the prior year period.
These changes were partially offset by a $277.7 million increase in net proceeds from the sale of assets, a $84.8 million increase in proceeds from sales and maturities of marketable securities, and a $65.7 million decrease in cash paid for capital expenditures compared to the prior year period.
−Removed: The change in net cash provided by (used in) financing activities was primarily attributable to a $315.2 million increase in debt proceeds compared to the prior year period and $166.4 million of draws on our secured credit facility during the current year period.
−Removed: These changes were partially offset by a $65.9 million increase in repayment of debt and financing lease obligations compared to the prior year period and a $4.1 million increase in cash paid during the current year period for financing costs.
+Added: The change in net cash provided by (used in) financing activities was primarily attributable to a $643.3 million increase in debt proceeds compared to the prior year period.
+Added: These changes were partially offset by a $114.5 million increase in repayment of debt and financing lease obligations compared to the prior year period and an $11.8 million increase in cash paid during the current year period for financing costs.
The increase in Adjusted Free Cash Flow was primarily attributable to the increase in net cash provided by operating activities and a $75.2 million decrease in non-development capital expenditures, net compared to the prior year period.
8 unchanged sentences
Over the longer-term, we expect to continue to fund our business through these principal sources of liquidity.
−Removed: During the three months ended June 30, 2020 , we also have received cash grants and advanced/accelerated Medicare payments under programs expanded or created under the CARES Act, and we have elected to utilize the CARES Act payroll tax deferral program, each as described above.
−Removed: We continue to seek further government-sponsored financial relief related to the COVID-19 pandemic, although we cannot provide assurance that such efforts will be successful or regarding the amount of, or conditions required to qualify for, any government-sponsored relief.
+Added: During the nine months ended September 30, 2020, we also have received cash grants and advanced/accelerated Medicare payments under programs expanded or created under the CARES Act, and we have elected to utilize the CARES Act payroll tax deferral program, each as described above.
Our liquidity requirements have historically arisen from:
19 unchanged sentences
We are highly leveraged and have significant debt and lease obligations.
−Removed: As of June 30, 2020 , we had two principal corporate-level debt obligations:
−Removed: our secured credit facility providing commitments of $250.0 million and our separate unsecured facility providing for up to $50.0 million of letters of credit.
−Removed: As of June 30, 2020 , we had $3.9 billion of debt outstanding, including $166.4 million drawn on our secured credit facility and excluding lease obligations, at a weighted average interest rate of 3.8% .
−Removed: As of such date, 92.7% , or $3.6 billion of our total debt obligations represented non-recourse property-level mortgage financings, $93.7 million of letters of credit had been issued under our secured credit facility and separate unsecured letter of credit facility, and $166.4 million was drawn on our secured credit facility.
−Removed: As of June 30, 2020 , $1.3 billion of our long-term debt is variable rate debt subject to interest rate cap agreements.
−Removed: The remaining $131.0 million of our long-term variable rate debt and $166.4 million drawn on our secured credit facility are not subject to any interest rate cap agreements.
−Removed: As of June 30, 2020 , we had $2.0 billion of operating and financing lease obligations.
−Removed: For the twelve months ending June 30, 2021 , we will be required to make approximately $392.6 million of cash lease payments in connection with our existing operating and financing leases, including a $119.2 million one-time cash payment to Ventas on July 27, 2020 (after giving effect to the multi-part transaction with Ventas on July 26, 2020).
−Removed: Total liquidity of $600.2 million as of June 30, 2020 included $452.4 million of unrestricted cash and cash equivalents (excluding restricted cash and lease security deposits of $115.5 million in the aggregate), $109.9 million of marketable securities, and $37.9 million of availability on our secured credit facility.
−Removed: Total liquidity as of June 30, 2020 increased $118.9 million from total liquidity of $481.3 million as of December 31, 2019 .
−Removed: The increase was primarily attributable to temporary liquidity relief under the CARES Act and the transactions with Healthpeak completed during the three months ended March 31, 2020, including the impact of the related financing transactions.
+Added: As of September 30, 2020, we had $3.9 billion of debt outstanding, at a weighted average interest rate of 3.6%.
+Added: As of such date, 98.2%, or $3.9 billion of our total debt obligations represented non-recourse property-level mortgage financings.
+Added: As of September 30, 2020, $1.4 billion of our long-term debt is variable rate debt subject to interest rate cap agreements.
+Added: The remaining $131.0 million of our long-term variable rate debt is not subject to any interest rate cap agreements.
+Added: As of September 30, 2020, $87.7 million of letters of credit had been issued under our secured and unsecured credit facilities.
+Added: As of September 30, 2020, we had $1.6 billion of operating and financing lease obligations.
+Added: For the twelve months ending September 30, 2021, we will be required to make approximately $264.7 million of cash lease payments in connection with our existing operating and financing leases.
+Added: Total liquidity of $490.7 million as of September 30, 2020 included $354.6 million of unrestricted cash and cash equivalents (excluding restricted cash and lease security deposits of $141.8 million in the aggregate) and $136.1 million of marketable securities.
+Added: Total liquidity as of September 30, 2020 increased $9.4 million from total liquidity of $481.3 million as of December 31, 2019.
+Added: The increase was primarily attributable to temporary liquidity relief under the CARES Act and the transactions with Healthpeak completed during the three months ended March 31, 2020, including the impact of the related financing transaction, partially offset by the $119.2 million one-time cash lease payment made to Ventas in connection with our lease restructuring transaction effective July 26, 2020.
We continue to seek opportunities to enhance and preserve our liquidity, including through reducing expenses and elective capital expenditures, continuing to evaluate our financing structure and the state of debt markets, and seeking further government-sponsored financial relief related to the COVID-19 pandemic.
−Removed: As of June 30, 2020 , our remaining 2020 and 2021 maturities (after giving effect to the multi-part transaction with Ventas on July 26, 2020) are $36.4 million and $254.1 million, respectively, which are primarily non-recourse mortgage debt maturities.
−Removed: We have continued efforts on our plan to refinance those and other maturities, including our line of credit, with non-recourse mortgage debt.
−Removed: There is no assurance that debt financing will continue to be available on terms consistent with our expectations or at all, or that our efforts will be successful in seeking further government-sponsored financial relief or regarding the terms and conditions of any such relief.
−Removed: Additionally, 49 communities (3,925 units) were unencumbered by mortgage debt as of June 30, 2020.
−Removed: We currently estimate that our existing cash flows from operations, together with cash on hand, amounts available under our secured credit facility, expected grants to be received from the Emergency Fund, proceeds from anticipated dispositions of owned communities, and financings and refinancings of various assets, will be sufficient to fund our liquidity needs for at least the next 12 months, assuming continued access to credit markets and the impacts of the pandemic on the economy and our industry begin to moderate in the near term.
+Added: There is no assurance that our efforts will be successful in seeking further government-sponsored financial relief or regarding the amount of, or conditions required to qualify for, any such relief.
+Added: Additionally, 55 communities (4,359 units) were unencumbered by mortgage debt as of September 30, 2020.
+Added: We currently estimate that our existing cash flows from operations, together with cash balances on hand, cash equivalents, marketable securities, expected grants to be received from the Provider Relief Fund, proceeds from anticipated dispositions of owned communities, and financings and refinancings of various assets, will be sufficient to fund our liquidity needs for at least the next 12 months, assuming the economy and our industry do not further deteriorate substantially as a result of the continuing impacts of the pandemic.
Our actual liquidity and capital funding requirements depend on numerous factors, including our operating results, our actual level of capital expenditures, general economic conditions, and the cost of capital.
11 unchanged sentences
These development projects include converting space from one level of care to another, reconfiguration of existing units, the addition of services that are not currently present, or physical plant modifications.
−Removed: The following table summarizes our capital expenditures for the six months ended June 30, 2020 for our consolidated business:
−Removed: (in millions)
−Removed: Six Months Ended June 30, 2020
+Added: The following table summarizes our capital expenditures for the nine months ended September 30, 2020 for our consolidated business:
+Added: (in millions) Nine Months Ended September 30, 2020
Community-level capital expenditures, net (1)
7 unchanged sentences
In response to the COVID-19 pandemic, we have delayed or canceled a number of elective capital expenditure projects.
−Removed: As a result, we expect our full-year 2020 non-development capital expenditures, net of anticipated lessor reimbursements, and development capital expenditures to be approximately $150 million and $20 million, which reflects a $40 million and $10 million reduction to our pre-pandemic plans for 2020, respectively.
+Added: As a result, we expect our full-year 2020 non-development capital expenditures, net of anticipated lessor reimbursements, and development capital expenditures to be approximately $140 million and $15 million, respectively, which reflects a $50 million and $15 million reduction to our pre-pandemic plans for 2020, respectively.
We anticipate that our 2020 capital expenditures will be funded from cash on hand, cash flows from operations, and reimbursements from lessors.
6 unchanged sentences
Credit Facilities
−Removed: Our Fifth Amended and Restated Credit Agreement with Capital One, National Association, as administrative agent, lender, and swingline lender and the other lenders from time to time parties thereto (the "Credit Agreement") provides commitments for a $250 million revolving credit facility with a $60 million sublimit for letters of credit and a $50 million swingline feature.
−Removed: We have a one-time right under the Credit Agreement to increase commitments on the revolving credit facility by an additional $100 million , subject to obtaining commitments for the amount of such increase from acceptable lenders.
−Removed: The Credit Agreement provides us a one-time right to reduce the amount of the revolving credit commitments, and we may terminate the revolving credit facility at any time, in each case without payment of a premium or penalty.
−Removed: The Credit Agreement matures on January 3, 2024.
−Removed: Amounts drawn under the facility bear interest at 90-day LIBOR plus an applicable margin.
−Removed: The applicable margin varies based on the percentage of the total commitment drawn, with a 2.25% margin at utilization equal to or lower than 35%, a 2.75% margin at utilization greater than 35% but less than or equal to 50%, and a 3.25% margin at utilization greater than 50%.
−Removed: A quarterly commitment fee is payable on the unused portion of the facility at 0.25% per annum when the outstanding amount of obligations (including revolving credit and swingline loans and letter of credit obligations) is greater than or equal to 50% of the revolving credit commitment amount or 0.35% per annum when such outstanding amount is less than 50% of the revolving credit commitment amount.
−Removed: The credit facility is secured by first priority mortgages on certain of our communities.
−Removed: In addition, the Credit Agreement permits us to pledge the equity interests in subsidiaries that own other communities and grant negative pledges in connection therewith
−Removed: (rather than mortgaging such communities), provided that not more than 10% of the borrowing base may result from communities subject to negative pledges.
−Removed: Availability under the revolving credit facility will vary from time to time based on borrowing base calculations related to the appraised value and performance of the communities securing the credit facility and our consolidated fixed charge coverage ratio.
−Removed: To the extent the outstanding borrowings on the credit facility exceed future borrowing base calculations, we would be required to repay the difference to restore the outstanding balance to the new borrowing base.
−Removed: During 2019, the parties entered into an amendment to the Credit Agreement that provides for availability calculations to be made at additional consolidated fixed charge coverage ratio thresholds.
−Removed: The Credit Agreement contains typical affirmative and negative covenants, including financial covenants with respect to minimum consolidated fixed charge coverage and minimum consolidated tangible net worth.
−Removed: Amounts drawn on the credit facility may be used for general corporate purposes.
−Removed: As of June 30, 2020 , $166.4 million of borrowings were outstanding on the revolving credit facility, $ 45.5 million of letters of credit were outstanding, and the revolving credit facility had $37.9 million of availability.
−Removed: We also had a separate unsecured letter of credit facility providing for up to $ 50.0 million of letters of credit as of June 30, 2020 under which $ 48.2 million of had been issued as of that date.
+Added: On August 31, 2020, we terminated our Fifth Amended and Restated Credit Agreement with Capital One, National Association, as administrative agent, lender, and swingline lender and the other lenders from time to time parties thereto (as amended, the "Credit Agreement").
+Added: The Credit Agreement had provided commitments for a $250 million revolving credit facility with a $60 million sublimit for letters of credit and a $50 million swingline feature.
+Added: The credit facility was secured by first priority mortgages on certain of our communities, and availability varied from time to time based on borrowing base calculations related to the appraised value and performance of the communities securing the credit facility and our consolidated fixed charge coverage ratio.
+Added: The Credit Agreement was terminated in connection with our obtaining approximately $266.9 million of non-recourse mortgage financing on 16 communities on August 31, 2020, most of which had secured the Credit Agreement prior to its termination.
+Added: At the closing, we repaid the $166.4 million outstanding principal amount under the Credit Agreement, together with accumulated interest, without payment of any termination fee or penalty, and we cash collateralized the letters of credit outstanding under the Credit Agreement.
+Added: As of September 30, 2020, $87.7 million of letters of credit have been issued of which $46.7 million were issued under our $50.0 million unsecured credit facility.
+Added: Restricted cash as of September 30, 2020 includes $41.4 million of collateral deposits for the $41.0 million secured letters of credit.
Long-Term Leases
−Removed: As of June 30, 2020 , we operated 305 communities under long-term leases ( 237 operating leases and 68 financing leases).
+Added: As of September 30, 2020, we operated 302 communities under long-term leases (236 operating leases and 66 financing leases).
The substantial majority of our lease arrangements are structured as master leases.
11 unchanged sentences
These radius restrictions could negatively affect our ability to expand, develop, or acquire senior housing communities and operating companies.
−Removed: For the three and six months ended June 30, 2020 , our cash lease payments for our operating leases were $75.5 million and $151.6 million , respectively, and for our financing leases were $16.6 million and $34.9 million , respectively.
−Removed: For the twelve months ending June 30, 2021 , we will be required to make $392.6 million of cash lease payments in connection with our existing operating and financing leases, including a $119.2 million one-time cash payment to Ventas on July 27, 2020 (after giving effect to the multi-part transaction with Ventas on July 26, 2020).
+Added: For the three and nine months ended September 30, 2020, our cash lease payments for our operating leases were $173.7 million and $325.3 million, respectively, and for our financing leases were $16.5 million and $51.4 million, respectively.
+Added: For the twelve months ending September 30, 2021, we will be required to make $264.7 million of cash lease payments in connection with our existing operating and financing leases.
Our capital expenditure plans for 2020 include required minimum spend of approximately $17 million for capital expenditures under certain of our community leases.
2 unchanged sentences
Certain of our debt and lease documents contain restrictions and financial covenants, such as those requiring us to maintain prescribed minimum net worth and stockholders' equity levels and debt service and lease coverage ratios, and requiring us not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community, and/or entity basis.
−Removed: Net worth is generally calculated as stockholders' equity as calculated in accordance with GAAP, and in certain
−Removed: circumstances, reduced by intangible assets or liabilities or increased by deferred gains from sale-leaseback transactions and deferred entrance fee revenue.
+Added: Net worth is generally calculated as stockholders' equity as calculated in accordance with GAAP, and in certain circumstances, reduced by intangible assets or liabilities or increased by deferred gains from sale-leaseback transactions and deferred entrance fee revenue.
The debt service and lease coverage ratios are generally calculated as revenues less operating expenses, including an implied management fee and a reserve for capital expenditures, divided by the debt (principal and interest) or lease payments.
4 unchanged sentences
Therefore, if an event of default has occurred under any of our debt or lease documents, subject to cure provisions in certain instances, the respective lender or lessor would have the right to declare all the related outstanding amounts of indebtedness or cash lease obligations immediately due and payable, to foreclose on our mortgaged communities, to terminate our leasehold interests, to foreclose on other collateral securing the indebtedness and leases, to discontinue our operation of leased communities, and/or to pursue other remedies available to such lender or lessor.
−Removed: Further, an event of default could trigger cross-default provisions in our other debt and lease documents (including documents with other lenders or lessors).
+Added: Further, an event of default could trigger cross-default provisions in our other debt and lease documents (including documents with other lenders or
We cannot provide assurance that we would be able to pay the debt or lease obligations if they became due upon acceleration following an event of default.
−Removed: As of June 30, 2020 , we are in compliance with the financial covenants of our debt agreements and long-term leases.
+Added: As of September 30, 2020, we are in compliance with the financial covenants of our debt agreements and long-term leases.
Contractual Commitments
−Removed: Significant ongoing commitments consist primarily of leases, debt, purchase commitments, and certain other long-term liabilities.
−Removed: For a summary and complete presentation and description of our ongoing commitments and contractual obligations, see the "Contractual Commitments" section of Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 19, 2020.
−Removed: Except as discussed therein, there were no other material changes outside the ordinary course of business in our contractual commitments during the six months ended June 30, 2020 .
−Removed: As a result of the multi-part transaction with Ventas on July 26, 2020, our cash lease payments were increased by $77.7 million for the year ending December 31, 2020 and we eliminated future cash lease payments of $89.3 million, $90.6 million, $92.0 million, $93.4 million, and $94.8 million for each of the years ending December 31, 2021, 2022, 2023, 2024, and 2025, respectively.
−Removed: Additionally, our long-term debt obligations (excluding related interest payments) decreased by $78.4 million for year ending December 31, 2021, and increased by $45.0 million for the year ending December 31, 2025 as a result of the multi-part transaction with Ventas.
−Removed: See Note 17 to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information about the multi-part transaction with Ventas.
+Added: The following table presents a summary of our material indebtedness, including the related interest payments, lease, and other contractual commitments, as of September 30, 2020.
+Added: Payments Due during the Period Ending December 31,
+Added: (in millions) Total 2020 2021 2022 2023 2024 Thereafter
+Added: Contractual Obligations:
+Added: Principal on long-term debt (1)
+Added: $ 3,958.5 $ 16.2 $ 72.5 $ 352.4 $ 234.4 $ 304.2 $ 2,978.8
+Added: Interest on long-term debt (2)
+Added: 921.6 36.3 143.3 133.3 121.8 116.4 370.5
+Added: Long-term debt 4,880.1 52.5 215.8 485.7 356.2 420.6 3,349.3
+Added: Financing lease obligations (3)
+Added: 445.7 16.0 64.6 65.2 66.0 67.2 166.7
+Added: Operating lease obligations (4)
+Added: 1,335.3 53.6 212.1 195.5 195.7 195.5 482.9
+Added: Total contractual obligations $ 6,661.1 $ 122.1 $ 492.5 $ 746.4 $ 617.9 $ 683.3 $ 3,998.9
+Added: (1) Excludes debt discount and deferred financing costs of $28.3 million as of September 30, 2020.
+Added: (2) Represents contractual interest for all fixed-rate obligations and assumes interest on variable rate instruments at the September 30, 2020 rate.
+Added: (3) Reflects future cash lease payments after giving effect to fixed payments (including in-substance fixed payments) and variable payments estimated utilizing the applicable index or rate as of September 30, 2020.
+Added: The cash payments for financing lease obligations exclude $412.8 million of financing lease obligations recognized on our condensed consolidated balance sheet for purchase option liabilities and for sale-leaseback transactions in which we have not transferred control of the underlying asset.
+Added: (4) Reflects future cash payments after giving effect to fixed payments (including in-substance fixed payments) and variable payments estimated utilizing the applicable index or rate as of September 30, 2020.
+Added: Our capital expenditure plans for 2020 include required minimum spend of approximately $17 million for capital expenditures under certain of our community leases.
+Added: Additionally, we are required to spend an average of approximately $25 million per year for each of the following four years and approximately $41 million thereafter under the initial lease terms of such leases.
+Added: The foregoing amounts exclude outstanding letters of credit aggregating to $87.7 million as of September 30, 2020.
Off-Balance Sheet Arrangements
−Removed: As of June 30, 2020 , we do not have an interest in any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.
+Added: As of September 30, 2020, we do not have an interest in any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.
Non-GAAP Financial Measures
20 unchanged sentences
Three Months Ended
−Removed: Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
(in thousands) 2020 2019 2020 2019
15 unchanged sentences
Adjusted EBITDA (1)
−Removed: Adjusted EBITDA for the three and six months ended June 30, 2019 includes a negative non-recurring net impact of $6.5 million and $13.0 million , respectively, from the application of the lease accounting standard effective January 1, 2019, for
−Removed: the six months ended June 30, 2020 includes the $100.0 million management agreement termination fee payment received from Healthpeak, and for the three months ended June 30, 2020 includes $26.7 million of government grants recognized in other operating income during the period.
+Added: $ (64,019) $ 80,447 $ 165,783 $ 301,066
+Added: (1) Adjusted EBITDA includes:
+Added: • $6.0 million and $19.0 million, respectively, of negative non-recurring net impact for the three and nine months ended September 30, 2019 from the application of the lease accounting standard effective January 1, 2019
+Added: • $100.0 million benefit for the nine months ended September 30, 2020 for the management agreement termination fee payment received from Healthpeak
+Added: • $119.2 million for the three and nine months ended September 30, 2020 for the one-time cash lease payment made to Ventas in connection with our lease restructuring transaction effective July 26, 2020
+Added: • $10.8 million and $37.5 million, respectively, benefit for the three and nine months ended September 30, 2020 of Provider Relief Funds and other government grants recognized in other operating income
Adjusted Free Cash Flow
Adjusted Free Cash Flow is a non-GAAP liquidity measure that we define as net cash provided by (used in) operating activities before:
−Removed: distributions from unconsolidated ventures from cumulative share of net earnings, changes in prepaid insurance premiums financed with notes payable, changes in operating lease liability for lease termination and modification, cash paid/received for gain/loss on facility lease termination and modification, and lessor capital expenditure reimbursements under operating leases;
+Added: distributions from unconsolidated ventures from cumulative share of net earnings, changes in prepaid insurance premiums financed with notes payable, changes in operating lease liability for lease termination, cash paid/received for gain/loss on facility lease termination and modification, and lessor capital expenditure reimbursements under operating leases;
property insurance proceeds and proceeds from refundable entrance fees, net of refunds;
6 unchanged sentences
Adjusted Free Cash Flow has material limitations as a liquidity measure, including:
−Removed: (i) it does not represent cash available for dividends, share repurchases, or discretionary expenditures since certain non-discretionary expenditures, including mandatory debt principal payments, are not reflected in this measure;
−Removed: (ii) the cash portion of non-recurring charges related to gain/loss on facility lease termination and modification generally represent charges/gains that may significantly affect our liquidity;
+Added: (i) it does not represent cash available for dividends, share repurchases, or discretionary expenditures since certain non-discretionary expenditures, including mandatory
+Added: debt principal payments, are not reflected in this measure;
+Added: (ii) the cash portion of non-recurring charges related to gain/loss on facility lease termination generally represent charges/gains that may significantly affect our liquidity;
and (iii) the impact of timing of cash expenditures, including the timing of non-development capital expenditures, limits the usefulness of the measure for short-term comparisons.
1 unchanged sentence
Three Months Ended
−Removed: Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
(in thousands) 2020 2019 2020 2019
3 unchanged sentences
Net increase (decrease) in cash, cash equivalents, and restricted cash
+Added: $ (29,055) $ (9,600) $ 191,378 $ (134,859)
Net cash provided by (used in) operating activities $ (77,169) $ 69,211 $ 132,150 $ 128,330
Distributions from unconsolidated ventures from cumulative share of net earnings
+Added: (766) (858) (766) (2,388)
Changes in prepaid insurance premiums financed with notes payable
+Added: (5,841) (6,215) 5,823 5,875
Changes in assets and liabilities for lessor capital expenditure reimbursements under operating leases
+Added: (3,131) (11,043) (13,640) (12,043)
Non-development capital expenditures, net (22,872) (59,121) (104,949) (180,187)
1 unchanged sentence
Adjusted Free Cash Flow (1)
−Removed: Adjusted Free Cash Flow includes transaction and organizational restructuring costs of $3.4 million and $0.6 million for the three months ended June 30, 2020 and 2019 , respectively, and $5.3 million and $1.1 million for the six months ended June 30, 2020 and 2019 , respectively;
−Removed: includes the $100.0 million management agreement termination fee payment received from
−Removed: Healthpeak for the six months ended June 30, 2020 ;
−Removed: and includes $85.0 million of accelerated/advanced Medicare payments, $33.5 million of Emergency Fund government grants accepted, and $26.5 million of payroll taxes deferred during the three months ended June 30, 2020.
+Added: $ (114,327) $ (13,575) $ 4,306 $ (76,915)
+Added: (1) Adjusted Free Cash Flow includes transaction and organizational restructuring costs of $6.3 million and $3.9 million for the three months ended September 30, 2020 and 2019, respectively, and $11.6 million and $5.0 million for the nine months ended September 30, 2020 and 2019, respectively.
+Added: Additionally, Adjusted Free Cash Flow includes:
+Added: For the three months ended September 30, 2020:
+Added: • $119.2 million one-time cash lease payment made to Ventas in connection with our lease restructuring transaction effective July 26, 2020
+Added: • $2.5 million benefit from accelerated/advanced Medicare payments received
+Added: • $4.4 million benefit from Provider Relief Funds and other government grants accepted
+Added: • $23.6 million benefit from payroll taxes deferred
+Added: For the nine months ended September 30, 2020:
+Added: • $119.2 million one-time cash lease payment made to Ventas in connection with our lease restructuring transaction effective July 26, 2020
+Added: • $100.0 million benefit from management agreement termination fee payment received from Healthpeak
+Added: • $87.5 million benefit from accelerated/advanced Medicare payments received
+Added: • $38.6 million benefit from Provider Relief Funds and other government grants accepted
+Added: • $50.1 million benefit from payroll taxes deferred
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.