3 unchanged sentences
(In thousands, except stock amounts)
−Removed: September 30,
2021 December 31,
21 unchanged sentences
Trade accounts payable 65,278 71,233
+Added: Liabilities held for sale 116,142 —
Accrued expenses 264,117 287,851
7 unchanged sentences
Total liabilities 6,051,046 6,099,029
−Removed: Preferred stock, $ 0.01 par value, 50,000,000 shares authorized at September 30, 2020 and December 31, 2019;
+Added: Preferred stock, $ 0.01 par value, 50,000,000 shares authorized at March 31, 2021 and December 31, 2020;
no shares issued and outstanding
−Removed: Common stock, $ 0.01 par value, 400,000,000 shares authorized at September 30, 2020 and December 31, 2019;
+Added: Common stock, $ 0.01 par value, 400,000,000 shares authorized at March 31, 2021 and December 31, 2020;
197,757,065 and 198,331,663 shares issued and 187,229,540 and 187,804,138 shares outstanding (including 2,063,391 and 4,349,421 unvested restricted shares), respectively
1 unchanged sentence
Treasury stock, at cost;
−Removed: 10,527,525 and 7,464,757 shares at September 30, 2020 and December 31, 2019, respectively
+Added: 10,527,525 shares at March 31, 2021 and December 31, 2020
( 102,774 ) ( 102,774 )
10 unchanged sentences
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2020 2019 2020 2019
−Removed: Revenue and other operating income
Resident fees $ 664,350 $ 782,707
10 unchanged sentences
Asset impairment 10,677 78,226
−Removed: Loss (gain) on facility lease termination and modification, net — — — 2,006
Costs incurred on behalf of managed communities 65,794 122,717
28 unchanged sentences
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2020 2019 2020 2019
Total equity, balance at beginning of period $ 802,729 $ 698,725
2 unchanged sentences
Issuance of common stock under Associate Stock Purchase Plan — 1
−Removed: Restricted stock, net ( 1 ) ( 1 ) ( 8 ) 31
+Added: Restricted stock and restricted stock units, net 2 ( 6 )
Shares withheld for employee taxes ( 7 ) ( 6 )
2 unchanged sentences
Balance at beginning of period $ 4,212,409 $ 4,172,099
−Removed: Compensation expense related to restricted stock grants 6,136 5,929 18,212 18,315
+Added: Non-cash stock-based compensation expense 4,783 5,957
Issuance of common stock under Associate Stock Purchase Plan 224 168
−Removed: Issuance of warrants 22,883 — 22,883 —
−Removed: Restricted stock, net 1 1 8 ( 31 )
+Added: Restricted stock and restricted stock units, net ( 2 ) 6
Shares withheld for employee taxes ( 4,322 ) ( 3,892 )
7 unchanged sentences
Balance at beginning of period $ ( 3,311,184 ) $ ( 3,393,088 )
−Removed: Cumulative effect of change in accounting principle (Note 2) — — ( 115 ) ( 55,885 )
+Added: Cumulative effect of change in accounting principle — ( 115 )
Net income (loss) ( 108,285 ) 369,515
3 unchanged sentences
Net income (loss) attributable to noncontrolling interest ( 18 ) ( 18 )
−Removed: Noncontrolling interest contribution — — — 6,566
Balance at end of period $ 2,277 $ 2,351
4 unchanged sentences
Issuance of common stock under Associate Stock Purchase Plan 43 61
−Removed: Restricted stock grants, net ( 104 ) ( 62 ) ( 683 ) 3,258
+Added: Restricted stock and restricted stock units, net 127 ( 504 )
Shares withheld for employee taxes ( 744 ) ( 611 )
5 unchanged sentences
(Unaudited, in thousands)
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Cash Flows from Operating Activities
5 unchanged sentences
Equity in (earnings) loss of unconsolidated ventures 531 1,008
−Removed: Distributions from unconsolidated ventures from cumulative share of net earnings 766 2,388
Amortization of entrance fees ( 364 ) ( 377 )
3 unchanged sentences
Loss (gain) on sale of assets, net ( 1,112 ) ( 372,839 )
−Removed: Loss (gain) on facility lease termination and modification, net — 2,006
Non-cash stock-based compensation expense 4,783 5,957
−Removed: Non-cash management contract termination gain — ( 640 )
Other ( 1,416 ) ( 1,460 )
14 unchanged sentences
Investment in unconsolidated ventures ( 5,206 ) ( 268 )
−Removed: Distributions received from unconsolidated ventures — 7,454
Proceeds from sale of assets, net 3,760 304,617
−Removed: Proceeds from notes receivable 2,849 34,109
Net cash provided by (used in) investing activities ( 3,806 ) ( 247,927 )
3 unchanged sentences
Proceeds from line of credit — 166,381
−Removed: Repayment of line of credit ( 166,381 ) —
Purchase of treasury stock, net of related payables — ( 18,123 )
15 unchanged sentences
The Company also offers a range of home health, hospice, and outpatient therapy services to residents of many of its communities and to seniors living outside of its communities.
+Added: The Company has five reportable segments:
+Added: Independent Living;
+Added: Assisted Living and Memory Care;
+Added: Health Care Services;
+Added: and Management Services.
+Added: The Company expects to sell 80 % of its equity in its Health Care Services segment, as described in Note 4.
Summary of Significant Accounting Policies
6 unchanged sentences
These interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 25, 2021.
−Removed: Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company's condensed consolidated financial position or results of operations.
−Removed: Except for the changes for the impact of the recently adopted accounting pronouncements discussed in this Note, the Company has consistently applied its accounting policies to all periods presented in these condensed consolidated financial statements.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Brookdale and its consolidated subsidiaries.
−Removed: All intercompany balances and transactions have been eliminated upon consolidation.
−Removed: Investments in affiliated companies that the Company does not control, but has the ability to exercise significant influence over governance and operations, are accounted for by the equity method.
The ownership interest of consolidated entities not wholly-owned by the Company are presented as noncontrolling interests in the accompanying condensed consolidated financial statements.
−Removed: Noncontrolling interest represents the share of consolidated entities owned by third parties.
−Removed: Noncontrolling interest is adjusted for the noncontrolling holder's share of additional contributions, distributions, and the proportionate share of the net income or loss of each respective entity.
+Added: Intercompany balances and transactions have been eliminated in consolidation, and net income (loss) is reduced by the portion of net income (loss) attributable to noncontrolling interests.
+Added: The Company reports investments in unconsolidated entities over whose operating and financial policies it has the ability to exercise significant influence under the equity method of accounting.
Use of Estimates
The preparation of the condensed consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.
−Removed: Estimates are used for, but not limited to, revenue and other operating income, asset impairments, self-insurance reserves, performance-based compensation, the allowance for credit losses, depreciation and amortization, leasing transactions, income taxes, and other contingencies.
+Added: Estimates are used for, but not limited to, revenue, other operating income, asset impairments, self-insurance reserves, performance-based compensation, the allowance for credit losses, depreciation and amortization, leasing transactions, income taxes, and other contingencies.
Although these estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from the original estimates.
2 unchanged sentences
As of the commencement date of a lease, a lease liability and corresponding right-of-use asset is established on the Company's condensed consolidated balance sheet at the present value of future minimum lease payments.
−Removed: The Company's community leases generally contain fixed annual rent escalators or annual rent
−Removed: escalators based on an index, such as the consumer price index.
−Removed: The future minimum lease payments recognized on the condensed consolidated balance sheet include fixed payments (including in-substance fixed payments) and variable payments estimated utilizing the index or rate on the lease commencement date.
+Added: The Company's community leases generally contain fixed annual rent escalators or annual rent escalators based on an index, such as the consumer price index.
+Added: The future minimum lease payments recognized on the condensed consolidated balance sheet include fixed payments (including in-substance fixed payments) and variable payments
+Added: estimated utilizing the index or rate on the lease commencement date.
The Company recognizes lease expense as incurred for additional variable payments.
22 unchanged sentences
For sale‑leaseback transactions in which the Company has not transferred control of the underlying asset, the Company does not recognize an asset sale or derecognize the underlying asset until control is transferred.
−Removed: For such transactions, the Company continues to recognize the assets within property, plant and equipment and leasehold intangibles, net as financing leases and continues to depreciate the asset over its useful life.
+Added: For such transactions, the Company recognizes the underlying assets within assets under financing leases as a component of property, plant and equipment and leasehold intangibles, net on the condensed consolidated balance sheets and continues to depreciate the assets over their useful lives.
Additionally, the Company accounts for any amounts received as a financing lease liability and the Company recognizes interest expense on the financing lease liability utilizing the effective interest method with the interest expense limited to an amount that is not greater than the cash payments on the financing lease liability over the term of the lease.
−Removed: Gain (Loss) on Sale of Assets
−Removed: The Company regularly enters into real estate transactions which may include the disposition of certain communities, including the associated real estate.
−Removed: The Company recognizes gain or loss from real estate sales when the transfer of control is complete.
−Removed: The Company recognizes gain or loss from the sale of equity method investments when the transfer of control is complete and the Company has no continuing involvement with the transferred financial assets.
Property, Plant and Equipment and Leasehold Intangibles, Net
12 unchanged sentences
If the quantitative goodwill impairment test results in a reporting unit's carrying amount exceeding its estimated fair value, an impairment charge will be recorded based on the difference, with the impairment charge limited to the amount of goodwill allocated to the reporting unit.
−Removed: Recently Adopted Accounting Pronouncements
−Removed: In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses:
−Removed: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13").
−Removed: ASU 2016-13 replaces the current incurred loss impairment methodology for credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
−Removed: The Company adopted this standard effective January 1, 2020 and recognized the cumulative effect of the adoption as an immaterial adjustment to beginning accumulated deficit as of January 1, 2020 for the cumulative effect of adopting ASU 2016-13.
−Removed: In February 2016, the FASB issued ASU 2016-02 , Leases ("ASU 2016-02"), which amends the former accounting principles for the recognition, measurement, presentation, and disclosure of leases for both lessees and lessors.
−Removed: The Company adopted these lease accounting standards effective January 1, 2019 and recognized the cumulative effect of the adoption as a $ 55.9 million adjustment to beginning accumulated deficit as of January 1, 2019.
−Removed: See Footnote 2, Summary of Significant Accounting Policies, in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 for more details regarding the adoption of this accounting pronouncement.
COVID-19 Pandemic
−Removed: The United States broadly continues to experience the COVID-19 pandemic, which has significantly disrupted, and likely will continue to significantly disrupt for some period, the nation’s economy, the senior living industry, and the Company's business.
−Removed: Although a significant portion of the Company's corporate support associates began working from home in March 2020, the
−Removed: Company continues to serve and care for seniors through the pandemic.
+Added: The United States broadly continues to experience the COVID-19 pandemic, which has significantly disrupted, and likely will continue to significantly disrupt for some period, the senior living industry and the Company's business.
Due to the average age and prevalence of chronic medical conditions among the Company's residents and patients, they generally are at disproportionately higher risk of hospitalization and adverse outcomes if they contract COVID-19.
−Removed: Upon confirmation of positive COVID-19 exposure at a community, the Company follows government guidance regarding minimizing further exposure, including associates’ adhering to personal protection protocols, restricting new resident admissions, and in some cases isolating residents.
−Removed: Seeking to prevent the introduction of COVID-19 into the Company's communities, and to help control further exposure to infections within communities, in March 2020 the Company began restricting visitors at all of its 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.
−Removed: The Company began easing restrictions on a community-by-community basis in July 2020.
−Removed: Due to the vulnerable nature of the Company's residents, the Company expects restrictions at its communities to continue for some time, and it may revert to more restrictive measures if the pandemic worsens or as necessary to comply with regulatory requirements.
−Removed: The pandemic, including the related restrictions at the Company's communities, have significantly disrupted demand for senior living communities and the sales process, which typically includes in-person prospective resident visits within communities.
−Removed: The pandemic began to adversely impact the Company's occupancy and resident fee revenue during March 2020, as new resident leads, visits (including virtual visits), and move-in activity declined significantly compared to typical levels.
−Removed: Further deterioration of the Company's resident fee revenue will result from lower move-in activity and the resident attrition inherent in its business, which may increase due to the impacts of COVID-19.
−Removed: The Company's home health average daily census also began to decrease in March 2020 due to lower occupancy in its communities and fewer elective medical procedures and hospital discharges.
−Removed: 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:
−Removed: 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.
−Removed: The Company is not able to reasonably predict the total amount of costs it will incur related to the pandemic, and such costs are likely to be substantial.
−Removed: As described further in Note 6, the Company also recorded non-cash impairment charges in its operating results of $ 8.2 million and $ 95.2 million for the three and nine months ended September 30, 2020, respectively, for its 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.
−Removed: The Company has taken, and continues to take, actions to enhance and preserve its liquidity in response to the pandemic.
−Removed: During the nine months ended September 30, 2020, the Company has completed its financing plans in the regular course of business, including refinancing substantially all of its remaining 2020 and 2021 maturities.
−Removed: In addition, on August 31, 2020, the Company terminated its $ 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.
−Removed: See Note 10 for further information regarding the Company's financings.
−Removed: During the nine months ended September 30, 2020, the Company 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 it deferred $ 50.1 million of the employer portion of social security payroll taxes.
−Removed: 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: The Company also has delayed or canceled a number of elective capital expenditure projects and suspended repurchases under its existing share repurchase program.
−Removed: On July 26, 2020, the Company restructured its 120 community triple-net master lease with Ventas, Inc.
−Removed: ("Ventas") in a multipart transaction.
−Removed: The components included, among other things, reducing the Company's 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 requirements that the Company satisfy financial covenants and maintain a security deposit with Ventas.
−Removed: The Company paid a $ 119.2 million one-time cash lease payment to Ventas in connection with the transaction effective July 26, 2020.
−Removed: See Note 5 for more information about the Ventas Lease Restructuring.
−Removed: As of September 30, 2020, the Company's total liquidity was $ 490.7 million , consisting of $ 354.6 million of unrestricted cash and cash equivalents and $ 136.1 million of marketable securities.
−Removed: The Company continues to seek opportunities to enhance and preserve its liquidity, including through reducing expenses and elective capital expenditures, continuing to evaluate its financing structure and the state of debt markets, and seeking further government-sponsored financial relief related to the COVID-19 pandemic.
−Removed: There is no assurance that debt financing will continue to be available on terms consistent with the Company's expectations or at all, or that the Company's 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.
−Removed: 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.
−Removed: legislation provides liquidity and financial relief to certain businesses, among other things.
−Removed: The impacts to the Company of certain provisions of the CARES Act are summarized below.
−Removed: • During the three and nine months ended September 30, 2020, the Company accepted $ 2.6 million and $ 36.1 million of 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.
−Removed: The accepted grants were made available pursuant to the following distributions from the Provider Relief Fund:
−Removed: • $ 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 the Company's Health Care Services and CCRCs segments.
−Removed: • $ 4.6 million pursuant to the Skilled Nursing Facility Targeted Distribution, which generally related to the Company's certified skilled nursing facilities.
−Removed: • $ 2.6 million pursuant to the Nursing Home Infection Control Distribution, which related to its skilled nursing care provided through its CCRCs segments.
−Removed: Further funding may become available to the Company from this distribution based on an incentive program that measures skilled nursing facilities’ COVID-19 infection rates and mortality.
−Removed: The Company has applied for additional grants made available pursuant to the Provider Relief Fund's Phase 2 General Distribution, generally related to its senior housing segments.
−Removed: The amount of such grants are expected to be based on 2% of a portion of the Company's 2018 revenues from patient care.
−Removed: The Company has also applied for additional grants pursuant to the Provider Relief Fund’s Phase 3 General Distribution, for which HHS allocated up to $ 20 billion.
−Removed: 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.
−Removed: 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.
−Removed: The permissible uses of grants from the Nursing Home Infection Control Distribution are further limited to certain infection control expenses.
−Removed: During the three and nine months ended September 30, 2020, the Company recognized $ 8.6 million and $ 35.0 million, respectively, of the grants as other operating income based upon its estimates of its satisfaction of the conditions of the grants during such period.
−Removed: As of September 30, 2020, $ 1.1 million of unrecognized grants were included in refundable fees and deferred revenue within the Company's condensed consolidated balance sheets.
−Removed: The $ 36.1 million of grants accepted from the Provider Relief Fund during the nine months ended September 30, 2020 has been presented within net cash provided by (used in) operating activities within the Company's condensed consolidated statement of cash flows.
−Removed: • During the three and nine months ended September 30, 2020, the Company 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.
−Removed: Under the program, the Company requested acceleration/advancement of 100 % of its Medicare payment amount for a three-month period.
−Removed: The Continuing Appropriations Act, 2021 and Other Extensions Act, enacted on October 1, 2020, amended the repayment terms for accelerated/advanced payments.
−Removed: As amended, recoupment of accelerated/advanced payments will begin one year after payments were issued.
−Removed: 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 .
−Removed: Any outstanding balance of accelerated/advanced payments will be due following such recoupment period.
−Removed: As of September 30, 2020, $ 87.5 million is recognized in refundable fees and deferred revenue within the condensed consolidated balance sheets.
−Removed: The $ 87.5 million received has been presented within net cash provided by operating activities within the Company's condensed consolidated statement of cash flows.
−Removed: • Under the CARES Act, the Company has elected to defer payment of the employer portion of social security payroll taxes incurred from March 27, 2020 to December 31, 2020.
+Added: The health and wellbeing of the Company's residents, patients, and associates is and has been its highest priority as it continues to serve and care for seniors through the pandemic.
+Added: Community Restrictions .
+Added: To help protect the Company's residents, patients, and associates from contracting COVID-19, the Company imposed significant restrictions at its communities beginning in March 2020, including closing its communities to visitors and prospective residents, and in some cases restricting new resident move-ins, suspending group outings, modifying communal dining and programming to comply with social distancing and other regulatory 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.
+Added: The Company has adopted a framework for determining when to ease restrictions at each of its communities based on several criteria, including regulatory requirements and guidance, completion of baseline testing at the community, and the presence of current confirmed COVID-19 positive cases.
+Added: The Company may revert to more restrictive measures if the pandemic worsens, as necessary to comply with regulatory requirements, or at the direction of state or local health authorities.
+Added: As of April 30, 2021, 100 % of the Company's communities have opened for visitors and new prospects.
+Added: Pandemic-Related Expenses .
+Added: The Company incurred $ 27.3 million of facility operating expense during the first quarter of 2021 for incremental direct costs to respond to the pandemic.
+Added: Such costs include those for:
+Added: acquisition of additional PPE, medical equipment, and cleaning and disposable food service supplies;
+Added: enhanced cleaning and environmental sanitation;
+Added: increased employee-related costs, including labor, workers compensation, and health plan expense;
+Added: increased expense for general liability claims;
+Added: and COVID-19 testing of residents and associates where not otherwise covered by government payor or third-party insurance sources.
+Added: On a cumulative basis, the Company has incurred $ 152.9 million of pandemic related facility operating expense since the beginning of fiscal 2020.
+Added: The Company recorded non-cash impairment charges in its operating results of $ 9.0 million for the three months ended March 31, 2021, for its operating lease right-of-use assets, primarily due to the COVID-19 pandemic and lower than expected operating performance at communities with impaired assets.
+Added: As of March 31, 2021, the Company's total liquidity was $ 438.9 million, consisting of $ 304.0 million of unrestricted cash and cash equivalents and $ 134.9 million of marketable securities.
+Added: The Company's cash flows from operations, excluding management agreement termination fees and the impact of the Coronavirus Aid, Relief, and Economic Security Act of 2020 ("CARES Act") funding, have been insufficient to cover its operating expenses, capital expenditures, and required interest and lease payments during the pandemic.
+Added: However, the Company was able to satisfy its liquidity needs over such period utilizing a portion of its preexisting liquidity, together with CARES Act funding.
+Added: The Company currently estimates that its cash flows from operations, together with cash balances on hand, cash equivalents, marketable securities, and proceeds from the pending sale of 80 % of the equity in its Health Care Services segment will be sufficient to fund its liquidity needs for at least the next 12 months.
+Added: The Company continues to seek opportunities to enhance and preserve its liquidity, including through maintaining expense discipline and increasing occupancy, continuing to evaluate its financing structure and the state of debt markets, and seeking further government-sponsored financial relief related to the pandemic.
+Added: There is no assurance that debt financing will continue to be available on terms consistent with the Company's expectations or at all, that its 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, or that the closing of the pending transaction will be completed in accordance with the Company's expectations, or at all, or generate cash proceeds to the Company in the amount it anticipates.
+Added: Financial Relief .
+Added: The CARES Act, signed into law on March 27, 2020, and Paycheck Protection Program and Health Care Enhancement Act, signed into law on April 24, 2020, provide liquidity and financial relief to certain businesses, among other things.
+Added: Certain impacts of such programs are provided below.
+Added: • During the first quarter of 2021, the Company accepted $ 0.8 million of cash from grants from the Public Health and Social Services Emergency Fund ("Provider Relief Fund") administered by the U.S.
+Added: Department of Health and Human Services ("HHS"), under which grants have been made available to eligible healthcare providers for healthcare related expenses or lost revenues attributable to COVID-19.
+Added: The grants represented incentive payments made pursuant to the Nursing Home Infection Control Distribution, which related to the Company's skilled nursing care provided through its CCRCs.
+Added: HHS continues to evaluate future allocations under the Provider Relief Fund and the regulation and guidance regarding grants made under the Provider Relief Fund.
+Added: The Company intends to pursue additional funding that may become available.
+Added: There can be no assurance that the Company will qualify for, or receive, such future grants in the amount it expects, 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 it qualifies.
+Added: • During the year ended December 31, 2020, the Company received $ 87.5 million under the Accelerated and Advance Payment Program administered by CMS, $ 75.2 million of which related to its Health Care Services segment and $ 12.3 million related to its CCRCs segment.
+Added: Recoupment of advanced payments will begin one year after payments were issued 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 advanced payments will be due following such recoupment period.
+Added: Pursuant to the Purchase Agreement providing for the sale of 80 % of the Company's equity in its Health Care Services segment (as described below), its net cash proceeds at closing will include a reduction for the then outstanding balance of such advanced payments related to its Health Care Services segment.
+Added: • During fiscal 2020, the Company deferred payment of $ 72.7 million of the employer portion of social security payroll taxes incurred from March 27, 2020 through December 31, 2020 pursuant to the CARES Act.
One-half of such deferral amount will become due on each of December 31, 2021 and December 31, 2022.
−Removed: As of September 30, 2020, the Company has deferred payment of $ 50.1 million under the program and presented such amount within other liabilities within the Company's condensed consolidated balance sheets.
−Removed: • The CARES Act temporarily suspended the 2% Medicare sequestration for the period May 1, 2020 to December 31, 2020, which primarily benefits the Company's Health Care Services segment.
−Removed: The Company cannot predict with reasonable certainty the impacts that COVID-19 ultimately will have on its business, results of operations, cash flow, and liquidity, and its response efforts may continue to delay or negatively impact its strategic
−Removed: initiatives, including plans for future growth.
+Added: Pursuant to the Purchase Agreement providing for the sale of 80 % of the Company's equity in its Health Care Services segment, its net cash proceeds at closing will include a reduction for the $ 8.9 million of deferred payroll tax payments related to its Health Care Services segment.
+Added: The Company expects to pay approximately $ 32 million of the deferred payments in both December 2021 and 2022.
+Added: • The Company is eligible to claim the employee retention credit for certain of its associates under the CARES Act.
+Added: The credit for 2020 is available to employers that fully or partially suspended operations during any calendar quarter in 2020 due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings due to COVID-19, and is equal to 50 % of qualified wages paid after March 12, 2020 through December 31, 2020 to qualified employees, with a maximum credit of $ 5,000 per employee.
+Added: During the first quarter of 2021, the Company recognized $ 9.0 million of employee retention credits on wages paid from March 12, 2020 through September 30, 2020 within other operating income.
+Added: The credit was modified and extended by subsequent legislation for wages paid from January 1, 2021 through December 31, 2021, and the Company is assessing its eligibility to claim such credit.
+Added: There can be no assurance that the Company will qualify for, or receive, credits in the amount or on the timing it expects.
+Added: In addition to the grants described above, during the three months ended March 31, 2021, the Company has received and recognized $ 0.9 million of other operating income from grants from other government sources.
+Added: The Company cannot predict with reasonable certainty the impacts that COVID-19 ultimately will have on its business, results of operations, cash flow, and liquidity, and its response efforts may continue to delay or negatively impact its strategic initiatives, including plans for future growth.
The ultimate impacts of COVID-19 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;
−Removed: the impact of COVID-19 on the nation’s economy and debt and equity markets and the local economies in its markets;
−Removed: 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 its ability to qualify for and satisfy the terms and conditions of financial relief;
+Added: the impact of COVID-19 on the nation’s economy and debt and equity markets and the local economies in the Company's markets;
+Added: the development, availability, utilization, and efficacy of COVID-19 testing, therapeutic agents, and vaccines and the prioritization of such resources among businesses and demographic groups;
+Added: government financial and regulatory relief efforts that may become available to business and individuals, including the Company's 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;
changes in demand for senior living communities and the Company's ability to adapt its sales and marketing efforts to meet that demand;
−Removed: the impact of COVID-19 on its residents’ and their families’ ability to afford its resident fees, including due to changes in unemployment rates, consumer confidence, and equity markets caused by COVID-19;
−Removed: changes in the acuity levels of its residents;
−Removed: the disproportionate impact of COVID-19 on seniors generally and those residing in its communities;
−Removed: the duration and costs of its response efforts, including increased equipment, supplies, labor, litigation, testing, and other expenses;
−Removed: the impact of COVID-19 on its 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 its debt and lease documents;
+Added: the impact of COVID-19 on the Company's residents’ and their families’ ability to afford its resident fees, including due to changes in unemployment rates, consumer confidence, housing markets, and equity markets caused by COVID-19;
+Added: changes in the acuity levels of the Company's new residents;
+Added: the disproportionate impact of COVID-19 on seniors generally and those residing in the Company's communities;
+Added: the duration and costs of the Company's response efforts, including increased equipment, supplies, labor, litigation, testing, vaccination clinic, and other expenses;
+Added: the impact of COVID-19 on the Company's ability to complete financings and refinancings of various assets, or other transactions (including dispositions and the pending sale of 80 % of the equity in the Company's Health Care Services segment) or to generate sufficient cash flow to cover required debt, interest, and lease payments and to satisfy financial and other covenants in its debt and lease documents;
increased regulatory requirements, including unfunded, mandatory testing;
−Removed: increased enforcement actions resulting from COVID-19, including those that may limit its collection efforts for delinquent accounts;
−Removed: and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or its response efforts.
−Removed: Earnings Per Share
−Removed: Basic earnings per share ("EPS") is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding.
−Removed: Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents.
−Removed: Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if securities or other instruments that are convertible into common stock were exercised or could result in the issuance of common stock.
−Removed: Potentially dilutive common stock equivalents include unvested restricted stock, restricted stock units, and warrants.
−Removed: The following table summarizes the computation of basic and diluted earnings (loss) per share amounts presented in the condensed consolidated statements of operations:
−Removed: Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2020 2019 2020 2019
−Removed: Income attributable to common shareholders:
−Removed: Net income (loss)
−Removed: $ ( 124,975 ) $ ( 78,458 ) $ 126,139 $ ( 176,523 )
−Removed: Weighted average shares outstanding - basic 183,244 185,516 183,535 186,130
−Removed: Effect of dilutive securities - Unvested restricted stock and restricted stock units
−Removed: Weighted average shares outstanding - diluted 183,244 185,516 183,668 186,130
−Removed: Basic earnings (loss) per common share:
−Removed: Net income (loss) per share attributable to common shareholders
−Removed: $ ( 0.68 ) $ ( 0.42 ) $ 0.69 $ ( 0.95 )
−Removed: Diluted earnings (loss) per common share:
−Removed: Net income (loss) per share attributable to common shareholders
−Removed: $ ( 0.68 ) $ ( 0.42 ) $ 0.69 $ ( 0.95 )
−Removed: For the three months ended September 30, 2020, the Company reported a consolidated net loss.
−Removed: As a result of the net loss, unvested restricted stock, restricted stock units, and potential shares issuable under a warrant were antidilutive for the period and were not included in the computation of diluted weighted average shares.
−Removed: The weighted average unvested restricted stock and restricted stock units excluded from the calculation of diluted net loss per share was 9.0 million for the three months ended September 30, 2020.
−Removed: For the three months ended September 30, 2020, 16.3 million potential shares issuable under a warrant were excluded from the calculation of diluted net loss per share.
−Removed: For the nine months ended September 30, 2020, the calculation of diluted weighted average shares excludes 6.9 million of non-performance-based unvested restricted stock and restricted stock units and 16.3 million potential shares issuable under a warrant as the inclusion of such shares would have been antidilutive.
−Removed: Performance-based equity awards are included in the diluted earnings per share calculation based on the attainment of the applicable performance metrics to date.
−Removed: For the nine months ended September 30, 2020, the calculation of diluted weighted average shares excludes 1.8 million of unvested performance-based restricted stock and restricted stock units.
−Removed: During the three and nine months ended September 30, 2019, the Company reported a consolidated net loss.
−Removed: As a result of the net loss, unvested restricted stock and restricted stock units were antidilutive for the periods and were not included in the computation of diluted weighted average shares.
−Removed: The weighted average unvested restricted stock and restricted stock units excluded from the calculation of diluted net loss per share was 7.6 million for both the three and nine months ended September 30, 2019.
+Added: increased enforcement actions resulting from COVID-19;
+Added: government action that may limit the Company's collection or discharge efforts for delinquent accounts;
+Added: and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or the Company's response efforts.
Acquisitions, Dispositions and Other Transactions
−Removed: During the period from January 1, 2019 through September 30, 2020, the Company acquired 27 communities that the Company formerly leased, disposed of 21 owned communities (including the conveyance of five communities to Ventas discussed below), and sold its ownership interest in its unconsolidated entry fee CCRC Venture (the "CCRC Venture") with Healthpeak Properties, Inc.
−Removed: ("Healthpeak"), and the Company's triple-net lease obligations on 14 communities were terminated.
−Removed: The acquisitions of formerly leased communities include the 18 communities acquired from Healthpeak described below and eight communities acquired pursuant to the exercise of a purchase option for a purchase price of $ 39.3 million, all of which occurred during the three months ended March 31, 2020.
−Removed: During the three months ended September 30, 2020, the Company acquired one formerly leased community pursuant to the exercise of a purchase option for a purchase price of $ 25.0 million.
−Removed: As of September 30, 2020, the Company owned 350 communities, leased 302 communities, and managed 74 communities.
−Removed: One unencumbered community in the CCRCs segment was classified as held for sale, resulting in $ 8.3 million being recorded as assets held for sale as of September 30, 2020.
+Added: During the period from January 1, 2020 through March 31, 2021, the Company acquired 27 communities that the Company formerly leased, disposed of eight owned communities (including the conveyance of five communities to Ventas, Inc.
+Added: ("Ventas")), and sold its ownership interest in its unconsolidated entry fee CCRC Venture (the "CCRC Venture") with Healthpeak Properties, Inc.
+Added: ("Healthpeak"), and the Company's triple-net lease obligations on five communities were terminated.
+Added: The Company expects to sell 80 % of its equity in its Health Care Services segment, as described below.
+Added: Additionally, one unencumbered community in the Assisted Living and Memory Care segment and one unencumbered community in the CCRCs segment were classified as held for sale, resulting in $ 14.0 million being recorded as assets held for sale within the condensed consolidated balance sheet for senior housing communities as of March 31, 2021.
The closings of the various pending and expected transactions described within this note are, or will be, subject to the satisfaction of various closing conditions, including (where applicable) the receipt of regulatory approvals.
−Removed: However, there can be no assurance that the transactions will close or, if they do, when the actual closings will occur.
−Removed: Dispositions of Owned Communities
−Removed: During the nine months ended September 30, 2020, the Company completed the sale of two owned communities (excluding the conveyance of five communities to Ventas, discussed below) for cash proceeds of $ 38.1 million, net of transaction costs, and recognized a net gain on sale of assets of $ 2.7 million.
−Removed: During the year ended December 31, 2019, the Company completed the sale of 14 owned communities for cash proceeds of $ 85.4 million, net of transaction costs, and recognized a net gain on sale of assets of $ 5.5 million.
−Removed: The Company utilized a portion of the cash proceeds from the asset sales to repay approximately $ 5.1 million of associated mortgage debt and debt prepayment penalties.
−Removed: These dispositions included the sale of eight communities during the nine months ended September 30, 2019 for which the Company received cash proceeds of $ 44.1 million, net of transaction costs and recognized a net gain on sale of assets of $ 0.9 million for the nine months ended September 30, 2019.
−Removed: Ventas Lease Restructuring
−Removed: On July 26, 2020 (the "Effective Date"), the Company entered into definitive agreements with Ventas in connection with the restructuring of the Company’s lease arrangements with Ventas, including a Master Transaction Letter Agreement (the "Master Agreement").
−Removed: Pursuant to the Master Agreement:
−Removed: • On the Effective Date the parties entered into the Amended and Restated Master Lease and Security Agreement (the "Master Lease") and Amended and Restated Guaranty (the "Guaranty"), which amended and restated the prior Master Lease and Security Agreement and prior Guaranty, each dated as of April 26, 2018 and as amended from time to time.
−Removed: Pursuant to the Master Lease, the Company continues to lease 120 communities for an aggregate initial annual minimum rent of approximately $ 100 million, which reflects a reduction of approximately $ 83 million of annual minimum rent in effect prior to the transaction.
−Removed: Effective on January 1 of each lease year, beginning January 1, 2022, the annual minimum rent will be subject to a 3 % escalator.
−Removed: The initial term of the Master Lease ends December 31, 2025, with two 10-year extension options available to the Company.
−Removed: The annual minimum rent for the initial lease year of any such renewal term will be the greater of the fair market rental of the communities or the increased annual minimum rent for such lease year applying the foregoing 3 % escalator.
−Removed: The Master Lease removed the prior provision that would have automatically extended the initial term in the event of the consummation of a change of control transaction by the Company.
−Removed: The Master Lease requires the Company to spend (or escrow with Ventas) a minimum of $ 1,500 per unit on a community-level basis and $ 3,600 per unit on an aggregate basis of all communities, in each case per 24-month period ending December 31 during the lease term, commencing with the 24-month period ending December 31, 2021.
−Removed: In addition, Ventas has agreed to fund costs associated with certain pre-approved capital
−Removed: expenditure projects in the aggregate amount of up to $ 37.8 million.
−Removed: Upon disbursement of such expenditures, the annual minimum rent under the Master Lease will increase by the amount of the disbursement multiplied by 50 % of the sum of the then current 10-year treasury note rate and 4.5 %.
−Removed: The transaction agreements with Ventas further provide that the Master Lease and certain other agreements between the parties will be cross-defaulted.
−Removed: The Company’s subsidiaries’ obligations under the Master Lease are guaranteed at the parent level pursuant to the Guaranty.
−Removed: The Guaranty removed the prior requirements that the Company satisfy, at the parent level, financial covenants and that the Company maintain a security deposit with Ventas.
−Removed: The Guaranty also removed the prior right of Ventas to terminate the Master Lease on the basis of parent level financial covenants.
−Removed: Pursuant to the terms of the Guaranty, the Company may consummate a change of control transaction without the need for consent of Ventas so long as certain objective conditions are satisfied, including the post-transaction guarantor’s maintaining a minimum tangible net worth of at least $ 600.0 million, having minimum levels of operational experience and reputation in the senior living industry, and paying a change of control fee of $ 25.0 million to Ventas.
−Removed: The Guaranty removed the prior provisions that would have required that such post-transaction guarantor satisfy a maximum leverage ratio level, that the Company fund additional capital expenditures, and that the Company extend the term upon the occurrence of the change in control transaction.
−Removed: Under the terms of the Guaranty, commencing January 1, 2024 (and until such time (if any) as the Company exercises its 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, the Company 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 the Company pursuant to a market management agreement (which is terminable by either party).
−Removed: 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.
−Removed: • On the Effective Date, the Company conveyed five owned communities 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 the Company manages the communities.
−Removed: The Company 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.
−Removed: The initial interest rate of the promissory note is 9.0 % per annum and will increase by 0.50 % on each anniversary of the date of issuance.
−Removed: The Company may prepay the outstanding principal amount in whole or in part at any time without premium or penalty.
−Removed: The promissory note matures on the earlier of December 31, 2025 or the occurrence of a change of control transaction (as defined in the Guaranty).
−Removed: • On the Effective Date, the Company issued to Ventas a warrant (the "Warrant") to purchase 16.3 million shares of the Company’s common stock, $ 0.01 par value per share, at a price per share of $ 3.00 .
−Removed: The Warrant is exercisable at Ventas' option at any time and from time to time, in whole or in part, until December 31, 2025.
−Removed: The exercise price and the number of shares issuable on exercise of the Warrant are subject to certain anti-dilution adjustments, including for cash dividends, stock dividends, stock splits, reclassifications, non-cash distributions, certain repurchases of common stock and business combination transactions.
−Removed: To the extent that the number of shares owned by Ventas (including shares underlying the Warrant) would be more than 9.6 % of the total combined voting power of all the Company’s classes of capital stock or of the total value of shares of all the Company’s classes of capital stock (the “Ownership Cap”) (other than as a result of actions taken by Ventas), the Company would generally be required to repurchase the number of shares necessary to avoid Ventas exceeding the Ownership Cap unless Ventas makes an election to require the Company to pay Ventas cash in lieu of issuing shares pursuant to the Warrant in excess of the Ownership Cap.
−Removed: The Warrant and the shares issuable upon exercise thereof have not been registered under the Securities Act of 1933, as amended, and were issued in a private placement pursuant to Section 4(a)(2) thereof.
−Removed: 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: Pursuant to the terms of the agreement, the Company 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.
−Removed: Ventas is entitled to customary
−Removed: underwritten offering, piggyback, and additional demand registration rights with respect to the shares underlying the Warrant.
−Removed: As a result of the modification of the community leases with Ventas, the Company reduced the carrying amount of lease obligations and assets under leases by $ 370.0 million and $ 159.5 million, respectively, in the three months ended September 30, 2020.
−Removed: As the Company's community leases do not contain an implicit rate, the Company utilized its incremental borrowing rate based on information available on the Effective Date to determine the present value of remaining lease payments for the community leases with Ventas.
−Removed: Additionally, the results and financial position of the five communities conveyed to Ventas were deconsolidated from the Company's financial statements prospectively as of the Effective Date.
−Removed: As of the Effective Date, the Warrant was recognized as a component of stockholders’ equity at its estimated fair value of $ 22.9 million.
−Removed: The Company’s net cash provided by operating activities for the nine months ended September 30, 2020 includes the $ 119.2 million one-time cash lease payment made to Ventas in connection with its lease restructuring transaction effective July 26, 2020.
−Removed: See Note 13 for more information regarding the adjustments to the Company’s condensed consolidated balance sheet as a result of this transaction.
−Removed: Healthpeak CCRC Venture and Master Lease Transactions
−Removed: On October 1, 2019, the Company 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 the Company's 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 the Company's 51 % ownership interest in the CCRC Venture, which held 14 entry fee CCRCs, 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: The $ 289.2 million of cash received from Healthpeak is presented within net cash used in investing activities for the nine months ended September 30, 2020.
−Removed: The Company recognized a $ 369.8 million gain on sale of assets for the nine months ended September 30, 2020, and the Company 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 Company's existing management agreements on the 14 entry fee CCRCs, Healthpeak paid the Company a $ 100.0 million management agreement termination fee, and the Company transitioned operations of the entry fee CCRCs to a new operator.
−Removed: The Company recognized $ 100.0 million of management fee revenue for the three months ended March 31, 2020 for the management termination fee.
−Removed: Prior to the January 31, 2020 closing, the parties moved the remaining two entry fee CCRCs 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, the Company will have exited substantially all of its entry fee CCRC operations.
−Removed: • Master Lease Transactions.
−Removed: Pursuant to the MTCA, on January 31, 2020, the parties amended and restated the existing master lease pursuant to which the Company continues to lease 25 communities from Healthpeak, and the Company acquired 18 formerly leased communities from Healthpeak, at which time the 18 communities were removed from the master lease.
−Removed: At the closing, the Company paid $ 405.5 million to acquire such communities and to reduce its annual rent under the amended and restated master lease.
−Removed: The $ 405.5 million of cash paid to Healthpeak and $ 1.7 million of direct acquisition costs are presented within net cash used in investing activities for the nine months ended September 30, 2020.
−Removed: The Company 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.
−Removed: With respect to the continuing 24 communities, the Company's amended and restated master lease:
−Removed: (i) has an initial term to expire on December 31, 2027, subject to two extension options at the Company's 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 transaction, the Company 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 the Company was deemed to have continuing involvement.
+Added: There can be no assurance that the transactions will close or, if they do, when the actual closings will occur.
+Added: Completed Dispositions of Owned Communities
+Added: During the three months ended March 31, 2021, the Company completed the sale of one owned community for cash proceeds of $ 2.7 million, net of transaction costs, and recognized a net gain on sale of assets of $ 0.5 million.
+Added: In addition to the conveyance of five communities to Ventas, during the year ended December 31, 2020, the Company completed the sale of two owned communities for cash proceeds of $ 38.1 million, net of transaction costs, and recognized a net gain on sale of assets of $ 2.7 million.
+Added: These dispositions included the sale of one owned community during the three months ended March 31, 2020 for which the Company received cash proceeds of $ 5.5 million, net of transaction costs, and recognized a net gain on sale of assets of $ 0.2 million.
+Added: Pending Sale of Health Care Services
+Added: On February 24, 2021, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with affiliates of HCA Healthcare, Inc., providing for the sale of 80 % of the Company’s equity in its Health Care Services segment for a purchase price of $ 400 million in cash, subject to certain adjustments set forth in the Purchase Agreement, including a reduction
+Added: for the remaining outstanding balance as of the closing of Medicare advance payments and deferred payroll tax payments related to the Health Care Services segment, which were $ 75.2 million and $ 8.9 million respectively, as of March 31, 2021.
+Added: The Purchase Agreement also contains certain agreed upon indemnities for the benefit of the purchaser.
+Added: The closing of the sale transaction is anticipated to occur in the early second half of 2021, subject to receipt of applicable regulatory approvals and satisfaction of other customary closing conditions set forth in the Purchase Agreement.
+Added: Pursuant to the Purchase Agreement, at closing of the transaction, the Company will retain a 20 % equity interest in the business.
+Added: The assets and liabilities of the Health Care Services segment are included within assets held for sale and liabilities held for sale, respectively, within the Company’s condensed consolidated balance sheet as of March 31, 2021.
+Added: As of March 31, 2021, assets held for sale and liabilities held for sale of the Health Care Services segment consisted of the following:
+Added: (in thousands)
+Added: Accounts receivable, net $ 62,401
+Added: Property, plant and equipment and leasehold intangibles, net 1,964
+Added: Operating lease right-of-use assets 9,688
+Added: Goodwill 126,810
+Added: Prepaid expenses and other assets, net 32,722
+Added: Assets held for sale $ 233,585
+Added: Trade accounts payable $ 1,201
+Added: Accrued expenses 30,030
+Added: Refundable fees and deferred revenue 75,223
+Added: Operating lease obligations 9,688
+Added: Liabilities held for sale $ 116,142
+Added: Refer to Note 16 for selected financial data for the Health Care Services segment.
Fair Value Measurements
Marketable Securities
−Removed: As of September 30, 2020, marketable securities of $ 136.1 million are stated at fair value based on valuation provided by third-party pricing services and are classified within Level 2 of the valuation hierarchy.
−Removed: The Company had outstanding long-term debt obligations with a carrying value of $ 3.9 billion and $ 3.6 billion as of September 30, 2020 and December 31, 2019, respectively.
−Removed: Fair value of the long-term debt approximates carrying value in all periods presented.
+Added: As of March 31, 2021, marketable securities of $ 134.9 million are stated at fair value based on valuations provided by third-party pricing services and are classified within Level 2 of the valuation hierarchy.
+Added: The Company estimates the fair value of its debt using a discounted cash flow analysis based upon the Company's current borrowing rate for debt with similar maturities and collateral securing the indebtedness.
+Added: The Company had outstanding long-term debt with a carrying amount of approximately $ 3.9 billion as of both March 31, 2021 and December 31, 2020.
+Added: Fair value of the long-term debt approximates carrying amount in all periods presented.
The Company's fair value of long-term debt disclosure is classified within Level 2 of the valuation hierarchy.
−Removed: On July 26, 2020, the Company issued to Ventas a warrant to purchase up to 16.3 million shares of the Company’s common stock, at a price per share of $ 3.00 .
−Removed: The fair value of this warrant of $ 22.9 million as of July 26, 2020 was estimated using the Black-Scholes option-pricing model utilizing a stock price volatility assumption of 65 % which is considered a Level 2 input of the valuation hierarchy.
Asset Impairment Expense
1 unchanged sentence
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
(in millions) 2021 2020
−Removed: Property, plant and equipment and leasehold intangibles, net
−Removed: $ 4.9 $ 0.8 $ 19.6 $ 2.0
Operating lease right-of-use assets $ 9.0 $ 65.7
+Added: Property, plant and equipment and leasehold intangibles, net
Investment in unconsolidated ventures — 1.5
−Removed: Assets held for sale — 1.3 — 1.3
−Removed: Other assets, net — — — 3.0
Asset impairment $ 10.7 $ 78.2
−Removed: Although the Company cannot predict with reasonable certainty the ultimate impacts of the COVID-19 pandemic, the Company concluded that the impacts of the pandemic have adversely affected the Company’s projections of revenue, expense, and cash flow for its senior housing community long-lived assets and constitute an indicator of potential impairment.
−Removed: Accordingly, the Company assessed its long-lived assets for recoverability.
−Removed: Refer to Note 3 for additional information on the COVID-19 pandemic.
−Removed: In estimating the recoverability of asset groups for purposes of the Company’s long-lived asset impairment testing during the nine months ended September 30, 2020, the Company utilized future cash flow projections that are generally developed internally.
−Removed: Any estimates of future cash flow projections necessarily involve predicting unknown future circumstances and events and require significant management judgments and estimates.
−Removed: In arriving at the cash flow projections, the Company considers its estimates of the impacts of the pandemic, historic operating results, approved budgets and business plans, future demographic factors, expected growth rates, estimated asset holding periods, and other factors.
−Removed: 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 pandemic, as there was a high degree of uncertainty about its ultimate impacts.
−Removed: Management’s estimates of the impacts of the pandemic are highly dependent on variables that are difficult to predict, as further described in Note 3.
−Removed: Future events may indicate differences from management's current judgments and estimates which could, in turn, result in future impairments.
−Removed: Operating Lease Right-of-Use Assets
−Removed: As a result of the COVID-19 pandemic during the nine months ended September 30, 2020, the Company evaluated operating lease right-of-use assets for impairment and identified communities with a carrying amount of the assets in excess of the estimated future undiscounted net cash flows expected to be generated by the assets.
−Removed: The Company compared the estimated fair
−Removed: value of the assets to their carrying amount for these identified communities and recorded an impairment charge for the excess of carrying amount over fair value.
−Removed: The Company recognized the right-of-use assets for the operating leases for 35 communities on the condensed consolidated balance sheets as of March 31, 2020 at the estimated fair value of $ 106.7 million.
−Removed: During the three months ended June 30, 2020, the Company recognized the right-of-use assets for the operating leases for nine communities on the condensed consolidated balance sheets at the estimated fair value of $ 10.3 million.
−Removed: During the three months ended September 30, 2020, the Company recognized the right-of-use assets for the operating leases for two communities on the condensed consolidated balance sheets as of September 30, 2020 at the estimated fair value of $ 3.0 million.
−Removed: As a result, the Company recorded non-cash impairment charges for the operating lease right-of-use assets of $ 3.3 million and $ 75.6 million for the three and nine months ended September 30, 2020, respectively.
−Removed: The fair values of the operating lease right-of-use assets of these communities were estimated utilizing a discounted cash flow approach based upon historical and projected community cash flows and market data, including management fees and a market supported lease coverage ratio, all of which are considered Level 3 inputs within the valuation hierarchy.
−Removed: The estimated future cash flows were discounted at a rate that is consistent with a weighted average cost of capital from a market participant perspective.
−Removed: The range of discount rates utilized was 11.2 % to 12.3 %, depending upon the property type, geographical location, and the quality of the respective community.
−Removed: These impairment charges are primarily due to the COVID-19 pandemic and lower than expected operating performance at these communities and reflect the amount by which the carrying amounts of the assets exceeded their estimated fair value.
−Removed: Property, Plant and Equipment and Leasehold Intangibles, Net
−Removed: During the nine months ended September 30, 2020, the Company evaluated property, plant and equipment and leasehold intangibles for impairment and identified communities with a carrying amount of the assets in excess of the estimated future undiscounted net cash flows expected to be generated by the assets.
−Removed: The Company compared the estimated fair value of the assets to their carrying amount for these identified communities and recorded an impairment charge for the excess of carrying amount over fair value.
−Removed: The Company recorded property, plant and equipment and leasehold intangibles non-cash impairment charges in its operating results of $ 4.9 million and $ 19.6 million for the three and nine months ended September 30, 2020, respectively.
−Removed: The fair values of the property, plant and equipment of these communities were primarily determined utilizing a discounted cash flow approach considering stabilized facility operating income and market capitalization rates.
−Removed: These fair value measurements are considered Level 3 measurements within the valuation hierarchy.
−Removed: These impairment charges are primarily due to the COVID-19 pandemic and lower than expected operating performance at these communities and reflect the amount by which the carrying amounts of the assets exceeded their estimated fair value.
−Removed: Stock-Based Compensation
−Removed: Grants of restricted stock units and stock awards under the Company's 2014 Omnibus Incentive Plan were as follows:
−Removed: (in thousands, except for per share and unit amounts) Restricted Stock Units and Stock Awards Granted Weighted Average Grant Date Fair Value Total Grant Date Fair Value
+Added: Disaggregation of Revenue
+Added: The Company disaggregates its revenue from contracts with customers by payor source as the Company believes it best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors.
+Added: Resident fee revenue by payor source and reportable segment is as follows:
Three Months Ended March 31, 2021
−Removed: Three months ended June 30, 2020 78 $ 3.91 $ 303
−Removed: Three months ended September 30, 2020 52 $ 2.78 $ 144
−Removed: The Company's Independent Living and Health Care Services segments had a carrying value of goodwill of $ 27.3 million and $ 126.8 million, respectively, as of both September 30, 2020 and December 31, 2019.
−Removed: During the nine months ended September 30, 2020, the Company identified indicators of impairment of goodwill, including the COVID-19 pandemic and a significant decline in the Company's stock price and market capitalization for a sustained period.
−Removed: Refer to Note 3 for additional information on the COVID-19 pandemic.
−Removed: As a result of the COVID-19 pandemic, the Company performed an interim quantitative goodwill impairment test as of March 31, 2020.
−Removed: The Company’s quantitative goodwill impairment test as of March 31, 2020 included reduced estimates of projected future cash flows as a result of changes to significant assumptions using information known or knowable about the COVID-19 pandemic, including current industry and economic trends, changes in business plans, and changes in expected revenue and facility operating expense growth rates.
−Removed: Additionally, the Company considered the additional risk within the future cash flow
−Removed: estimates when selecting risk-adjusted discount rates.
−Removed: The Company determined no impairment of goodwill was necessary for the nine months ended September 30, 2020.
−Removed: Determining the fair value of the Company’s reporting units involves the use of significant estimates and assumptions that are unpredictable and inherently uncertain.
−Removed: These estimates and assumptions include revenue and expense growth rates and operating margins used to calculate projected future cash flows and risk-adjusted discount rates.
−Removed: 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.
−Removed: Significant adverse changes in the Company’s 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 goodwill is impaired.
+Added: (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total
+Added: Private pay $ 118,322 $ 370,494 $ 52,213 $ 337 $ 541,366
+Added: Government reimbursement 460 16,444 12,487 67,465 96,856
+Added: Other third-party payor programs — — 7,079 19,049 26,128
+Added: Total resident fee revenue $ 118,782 $ 386,938 $ 71,779 $ 86,851 $ 664,350
+Added: Three Months Ended March 31, 2020
+Added: (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total
+Added: Private pay $ 135,290 $ 440,613 $ 64,703 $ 170 $ 640,776
+Added: Government reimbursement 572 16,866 19,405 73,689 110,532
+Added: Other third-party payor programs — — 10,439 20,960 31,399
+Added: Total resident fee revenue $ 135,862 $ 457,479 $ 94,547 $ 94,819 $ 782,707
+Added: Contract Balances
+Added: The payment terms and conditions within the Company's revenue-generating contracts vary by contract type and payor source, although terms generally include payment to be made within 30 days.
+Added: Resident fee revenue for recurring and routine monthly services is generally billed monthly in advance under the Company's independent living, assisted living, and memory care residency agreements.
+Added: Resident fee revenue for standalone or certain healthcare services is generally billed monthly in arrears.
+Added: A portion of the Company's reimbursement from Medicare for certain healthcare services is billed near the start of each period of care, and cash is generally received before all services are rendered.
+Added: The amount of revenue recognized for periods of care which are incomplete at period end is based on the Company's historical average percentage of days complete on each period of care and any unearned amounts are deferred and recognized when the service is performed.
+Added: Additionally, non-refundable community fees are generally billed and collected in advance or upon move-in of a resident under the Company's independent living, assisted living, and memory care residency agreements.
+Added: Amounts of revenue that are collected from residents in advance are recognized as deferred revenue until the performance obligations are satisfied.
+Added: The Company had total deferred revenue (included within refundable fees and deferred revenue, liabilities held for sale, and other liabilities within the condensed consolidated balance sheets) of $ 146.0 million and $ 138.3 million, including $ 30.1
+Added: million and $ 21.1 million of monthly resident fees billed and received in advance, as of March 31, 2021 and December 31, 2020, respectively.
+Added: Such amount of total deferred revenue as of both March 31, 2021 and December 31, 2020 also included $ 87.5 million received in the year ended December 31, 2020 under a temporary expansion of the Accelerated and Advance Payment Program administered by CMS.
+Added: Refer to Note 3 for additional information on such program.
+Added: For the three months ended March 31, 2021 and 2020, the Company recognized $ 30.8 million and $ 48.3 million, respectively, of revenue that was included in the deferred revenue balance as of January 1, 2021 and 2020, respectively.
Property, Plant and Equipment and Leasehold Intangibles, Net
−Removed: As of September 30, 2020 and December 31, 2019, net property, plant and equipment and leasehold intangibles, which include assets under financing leases, consisted of the following:
−Removed: (in thousands) September 30, 2020 December 31, 2019
+Added: As of March 31, 2021 and December 31, 2020, net property, plant and equipment and leasehold intangibles, which include assets under financing leases, consisted of the following:
+Added: (in thousands) March 31, 2021 December 31, 2020
Land $ 504,698 $ 505,298
7 unchanged sentences
Property, plant and equipment and leasehold intangibles, net $ 5,018,409 $ 5,068,060
−Removed: Assets under financing leases and leasehold improvements includes $ 0.4 billion and $ 0.6 billion of financing lease right-of-use assets, net of accumulated amortization, as of September 30, 2020 and December 31, 2019, respectively.
+Added: Assets under financing leases and leasehold improvements includes $ 0.4 billion of financing lease right-of-use assets, net of accumulated amortization, as of both March 31, 2021 and December 31, 2020.
Refer to Note 10 for further information on the Company's financing leases.
−Removed: The Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $ 87.8 million and $ 93.3 million for the three months ended September 30, 2020 and 2019, respectively, and $ 271.7 million and $ 282.6 million for the nine months ended September 30, 2020 and 2019, respectively.
Long-lived assets with definite useful lives are depreciated or amortized on a straight-line basis over their estimated useful lives (or, in certain cases, the shorter of their estimated useful lives or the lease term) and are tested for impairment whenever indicators of impairment arise.
−Removed: Refer to Note 6 for additional information on impairment expense for property, plant and equipment and leasehold intangibles.
−Removed: Long-term debt as of September 30, 2020 and December 31, 2019 consists of the following:
−Removed: (in thousands) September 30, 2020 December 31, 2019
−Removed: Mortgage notes payable due 2021 through 2047;
−Removed: weighted average interest rate of 3.52 % as of September 30, 2020, less debt discount and deferred financing costs of $ 28.3 million and $ 17.0 million as of September 30, 2020 and December 31, 2019, respectively (weighted average interest rate of 4.56 % as of December 31, 2019)
+Added: The Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $ 83.9 million and $ 90.7 million for the three months ended March 31, 2021 and 2020, respectively.
+Added: The Company's Independent Living and Health Care Services segments had a carrying value of goodwill of $ 27.3 million and $ 126.8 million, respectively, as of both March 31, 2021 and December 31, 2020.
+Added: The goodwill of the Health Care Services segment is included within assets held for sale within the Company’s condensed consolidated balance sheet as of March 31, 2021.
+Added: Long-term debt consists of the following:
+Added: (in thousands) March 31, 2021 December 31, 2020
+Added: Fixed mortgage notes payable due 2022 through 2047;
+Added: weighted average interest rate of 4.17 % and 4.18 % as of March 31, 2021 and December 31, 2020, respectively
$ 2,334,151 $ 2,366,996
−Removed: Other notes payable, weighted average interest rate of 8.98 % as of September 30, 2020 (weighted average interest rate of 5.77 % as of December 31, 2019) and maturity dates ranging from 2021 to 2025
+Added: Variable mortgage notes payable due 2022 through 2030, weighted average interest rate of 2.46 % and 2.49 % as of March 31, 2021 and December 31, 2020, respectively
1,524,496 1,529,935
+Added: Other notes payable due 2021 to 2025;
+Added: weighted average interest rate of 7.79 % and 8.98 % as of March 31, 2021 and December 31, 2020, respectively
+Added: 57,468 46,557
+Added: Debt discount and deferred financing costs, net ( 26,324 ) ( 27,500 )
Total long-term debt 3,889,791 3,915,988
1 unchanged sentence
Total long-term debt, less current portion $ 3,664,901 $ 3,847,103
−Removed: Credit Facilities
−Removed: On August 31, 2020, the Company terminated its 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”).
−Removed: The Credit Agreement had provided commitments for a $ 250.0 million revolving credit facility with a $ 60.0 million sublimit for letters of credit and a $ 50.0 million swingline feature.
−Removed: The credit facility was secured by first priority mortgages on certain of the Company's 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 the Company's consolidated fixed charge coverage ratio.
−Removed: The Credit Agreement was terminated in connection with the Company 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.
−Removed: At the closing, the Company 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 the Company cash collateralized the letters of credit outstanding under the Credit Agreement.
−Removed: As of September 30, 2020, $ 87.7 million of letters of credit have been issued of which $ 46.7 million were issued under the Company's $ 50.0 million unsecured credit facility.
−Removed: Restricted cash as of September 30, 2020 includes $ 41.4 million of collateral deposits for the $ 41.0 million secured letters of credit.
−Removed: On January 31, 2020, the Company obtained $ 238.2 million of debt secured by the non-recourse first mortgages on 14 communities, including $ 192.6 million of non-recourse first mortgage financing on 13 communities acquired from Healthpeak on such date.
−Removed: Seventy percent of the principal amount bears interest at a fixed rate of 3.62 %, and the remaining thirty percent of the principal amount bears interest at a variable rate equal to 30-day LIBOR plus a margin of 209 basis points.
−Removed: The debt matures in February 2030.
−Removed: The proceeds from the financing were utilized to fund the acquisition of communities from Healthpeak and repay $ 33.1 million of outstanding mortgage debt maturing in 2020.
−Removed: Refer to Note 5 for more information about the Company's acquisition of communities from Healthpeak.
−Removed: On March 19, 2020, the Company obtained $ 29.2 million of debt secured by the non-recourse first mortgages on seven communities, primarily communities acquired during the three months ended March 31, 2020.
−Removed: The loan bears interest at a variable rate equal to the 30-day LIBOR plus a margin of 225 basis points and matures in April 2030.
−Removed: On March 20, 2020, the Company obtained $ 30.0 million of debt secured by the non-recourse first mortgage on one community acquired from Healthpeak on January 31, 2020.
−Removed: The loan bears interest at a variable rate equal to the 30-day LIBOR plus a margin of 250 basis points and matures in March 2022.
−Removed: On March 31, 2020, the Company obtained $ 149.3 million of debt secured by the non-recourse first mortgages on 18 communities.
−Removed: Of the total principal, $ 73.1 million bears interest at a fixed rate of 3.55 %, and the remaining $ 76.2 million bears interest at a variable rate equal to the 30-day LIBOR plus a margin of 210 basis points.
−Removed: The debt matures in April 2030.
−Removed: The $ 149.3 million of proceeds from the financing were primarily utilized to repay $ 136.3 million of outstanding mortgage debt maturing in 2020.
−Removed: On August 31, 2020, the Company obtained $ 266.9 million of debt secured by the non-recourse first mortgages on 16 communities, most of which secured the credit facility prior to its termination.
−Removed: Of the total principal, $ 191.3 million bears interest at a fixed rate of 2.89 %, and the remaining $ 75.6 million bears interest at a variable rate equal to the 30-day LIBOR plus a margin of 249 basis points.
−Removed: The debt matures in September 2030.
−Removed: The $ 266.9 million of proceeds from the financing were primarily utilized to repay the outstanding principal amount under the Credit Agreement and to cash collateralize letters of credit.
−Removed: On September 9, 2020, the Company obtained $ 220.5 million of debt secured by the non-recourse first mortgages on 27 communities.
−Removed: Of the total principal, $ 156.5 million bears interest at a fixed rate of 3.18 %, and the remaining $ 64.0 million bears interest at a variable rate equal to the 30-day LIBOR plus a margin of 254 basis points.
−Removed: The debt matures in October 2030.
−Removed: The $ 220.5 million of proceeds from the financing were primarily utilized to repay outstanding mortgage debt maturing in 2020 and 2021.
+Added: As of March 31, 2021, 97.9 %, or $ 3.8 billion of the Company's total debt obligations represented non-recourse property-level mortgage financings.
+Added: As of March 31, 2021, $ 69.9 million of letters of credit and no cash borrowings were outstanding under the Company's $ 80.0 million secured credit facility.
+Added: The Company also had a separate secured letter of credit facility providing up to $ 15.0 million of letters of credit as of March 31, 2021 under which $ 13.6 million had been issued as of that date.
Financial Covenants
−Removed: Certain of the Company's debt documents contain restrictions and financial covenants, such as those requiring the Company to maintain prescribed minimum net worth and stockholders' equity levels and debt service ratios, and requiring the Company not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community, and/or entity basis.
−Removed: In addition, the Company's debt documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements.
+Added: Certain of the Company's debt documents contain restrictions and financial covenants, such as those requiring the Company to maintain prescribed minimum liquidity, net worth, and stockholders' equity levels and debt service ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community, and/or entity basis.
+Added: In addition, the Company's debt documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements and maintain insurance coverage.
The Company's failure to comply with applicable covenants could constitute an event of default under the applicable debt documents.
1 unchanged sentence
Furthermore, the Company's debt is secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries.
−Removed: As of September 30, 2020, the Company is in compliance with the financial covenants of its debt agreements.
−Removed: As of September 30, 2020, the Company operated 302 communities under long-term leases ( 236 operating leases and 66 financing leases).
+Added: As of March 31, 2021, the Company is in compliance with the financial covenants of its debt agreements.
+Added: As of March 31, 2021, the Company operated 301 communities under long-term leases ( 235 operating leases and 66 financing leases).
The substantial majority of the Company's lease arrangements are structured as master leases.
5 unchanged sentences
The leases generally provide for renewal or extension options from 5 to 20 years and in some instances, purchase options.
−Removed: The community leases contain other customary terms, which may include assignment and change of control restrictions, maintenance and capital expenditure obligations, termination provisions and financial covenants, such as those requiring the Company to maintain prescribed minimum net worth and stockholders' equity levels and lease coverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community and/or entity basis.
−Removed: In addition, the Company's lease documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements.
+Added: The community leases contain other customary terms, which may include assignment and change of control restrictions, maintenance and capital expenditure obligations, termination provisions and financial covenants, such as those requiring the Company to maintain prescribed minimum liquidity, net worth, and stockholders' equity levels and lease coverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community and/or entity basis.
+Added: In addition, the
+Added: Company's lease documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements and maintain insurance coverage.
The Company's failure to comply with applicable covenants could constitute an event of default under the applicable lease documents.
2 unchanged sentences
Furthermore, the Company's leases are secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries.
−Removed: As of September 30, 2020, the Company is in compliance with the financial covenants of its long-term leases.
−Removed: A summary of operating and financing lease expense (including the respective presentation on the condensed consolidated statements of operations) and cash flows from leasing transactions is as follows:
+Added: As of March 31, 2021, the Company is in compliance with the financial covenants of its long-term leases.
+Added: A summary of operating and financing lease expense (including the respective presentation on the condensed consolidated statements of operations) and net cash outflows from leases is as follows:
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
Operating Leases (in thousands)
−Removed: 2020 2019 2020 2019
Facility operating expense $ 4,842 $ 4,850
2 unchanged sentences
Operating lease expense adjustment (1)
−Removed: 117,322 4,814 132,276 13,626
Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements ( 7,563 ) ( 4,088 )
−Removed: Operating cash flows from operating leases $ 170,566 $ 65,556 $ 311,656 $ 218,954
+Added: Operating net cash outflows from operating leases $ 46,361 $ 71,976
(1) Represents the difference between the amount of cash operating lease payments and the amount of operating lease expense recognized in accordance with Accounting Standards Codification 842, Leases ("ASC 842").
−Removed: Operating cash flows from operating leases for the three and nine months ended September 30, 2020 includes the $ 119.2 million one-time cash lease payment made to Ventas in connection with the Company's lease restructuring transaction effective July 26, 2020.
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
Financing Leases (in thousands)
−Removed: 2020 2019 2020 2019
Depreciation and amortization $ 7,630 $ 9,144
5 unchanged sentences
Changes in financing lease assets and liabilities for lessor capital expenditure reimbursement ( 1,389 ) ( 1,739 )
−Removed: Total cash flows from financing leases $ 15,533 $ 22,116 $ 47,057 $ 66,461
−Removed: The aggregate amounts of future minimum lease payments, including community, office, and equipment leases recognized on the condensed consolidated balance sheet as of September 30, 2020 are as follows (in thousands):
+Added: Total net cash outflows from financing leases $ 14,783 $ 16,630
+Added: The aggregate amounts of future minimum lease payments, including community, office, and equipment leases (excluding minimum lease payments related to $ 9.7 million of operating lease obligations included within liabilities held for sale) recognized on the condensed consolidated balance sheet as of March 31, 2021 are as follows (in thousands):
Year Ending December 31, Operating Leases Financing Leases
−Removed: 2020 (three months) $ 53,625 $ 15,968
+Added: 2021 (nine months) $ 151,681 $ 48,807
2022 203,946 65,609
7 unchanged sentences
Total lease obligations $ 937,650 $ 559,154
−Removed: The Company has been and is currently involved in litigation and claims incidental to the conduct of its business, which it believes are generally comparable to other companies in the senior living and healthcare industries, including, but not limited to, putative class action claims from time to time regarding staffing at the Company’s communities and compliance with
−Removed: consumer protection laws and the Americans with Disabilities Act.
+Added: The Company has been and is currently involved in litigation and claims incidental to the conduct of its business, which it believes are generally comparable to other companies in the senior living and healthcare industries, including, but not limited to, putative class action claims from time to time regarding staffing at the Company’s communities and compliance with consumer protection laws and the Americans with Disabilities Act.
Certain claims and lawsuits allege large damage amounts and may require significant costs to defend and resolve.
8 unchanged sentences
While the Company cannot predict with certainty the result of this or any other legal proceedings, the Company believes the allegations in the suit are without merit and does not expect this matter to have a material adverse effect on the Company's financial condition, results of operations, or cash flows.
−Removed: In October 2020, an alleged stockholder of the Company filed a stockholder derivative lawsuit in the federal court for the Middle District of Tennessee, asserting claims on behalf of the Company against certain current and former officers and directors for alleged breaches of duties owed to the Company.
−Removed: The complaint refers to the securities lawsuit described above and incorporates substantively similar allegations.
+Added: In October 2020 and April 2021, alleged stockholders of the Company filed separate stockholder derivative lawsuits in the federal court for the Middle District of Tennessee, asserting claims on behalf of the Company against certain current and former officers and directors for alleged breaches of duties owed to the Company.
+Added: The complaints refer to the securities lawsuit described above and incorporate substantively similar allegations.
+Added: Stock-Based Compensation
+Added: Grants of restricted stock and restricted stock units under the Company's 2014 Omnibus Incentive Plan were as follows:
+Added: (in thousands, except for per share and unit amounts) Restricted Stock and Restricted Stock Unit Grants Weighted Average Grant Date Fair Value Total Grant Date Fair Value
+Added: Three months ended March 31, 2021 1,961 $ 5.09 $ 9,988
+Added: Earnings Per Share
+Added: Basic earnings per share ("EPS") is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding.
+Added: Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents.
+Added: Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if securities or other instruments that are convertible into common stock were exercised or could result in the issuance of common stock.
+Added: Potentially dilutive common stock equivalents include unvested restricted stock, restricted stock units, and warrants.
+Added: The following table summarizes the computation of basic and diluted earnings (loss) per share amounts presented in the condensed consolidated statement of operations:
+Added: Three Months Ended
+Added: (in thousands, except for per share amounts) 2021 2020
+Added: Income attributable to common stockholders:
+Added: Net income (loss)
+Added: $ ( 108,285 ) $ 369,515
+Added: Weighted average shares outstanding - basic 184,011 184,186
+Added: Effect of dilutive securities - Unvested restricted stock, restricted stock units, and warrants — 336
+Added: Weighted average shares outstanding - diluted 184,011 184,522
+Added: Basic earnings (loss) per common share:
+Added: Net income (loss) per share attributable to common stockholders $ ( 0.59 ) $ 2.01
+Added: Diluted earnings (loss) per common share:
+Added: Net income (loss) per share attributable to common stockholders $ ( 0.59 ) $ 2.00
+Added: For the purposes of computing diluted EPS, weighted average shares outstanding do not include potentially dilutive securities that are anti-dilutive under the treasury stock method, and performance-based equity awards are included based on the attainment of the applicable performance metrics as of the end of the reporting period.
+Added: The following potentially dilutive securities were excluded from the computation of diluted EPS:
+Added: Three Months Ended
+Added: (in millions) 2021 (1)
+Added: Non-performance-based restricted stock and restricted stock units 6.2 6.9
+Added: Performance-based restricted stock and restricted stock units 0.4 1.8
+Added: Warrants 16.3 —
+Added: (1) As a result of the net loss reported for the period, all unvested restricted stock, restricted stock units, and potential shares issuable under warrants were antidilutive for the period and as such were not included in the computation of diluted weighted average shares outstanding.
+Added: The difference between the Company's effective tax rate for the three months ended March 31, 2021 and 2020 was primarily due to the tax impact of the multi-part transaction with Healthpeak that occurred in the three months ended March 31, 2020.
+Added: The impact represented the tax expense recorded on the gain of the sale of the Company's interest in the CCRC Venture offset by a decrease in the valuation allowance that was a direct result of the multi-part transaction with Healthpeak.
+Added: The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 25.2 million as a result of the operating loss for the three months ended March 31, 2021, which was offset by a proportionate increase in the valuation allowance of $ 25.5 million.
+Added: The Company recorded an aggregate deferred federal, state, and local tax expense of $ 90.9 million for the three months ended March 31, 2020.
+Added: The expense included $ 93.1 million as a result of the gain on the sale of the Company's interest in the CCRC Venture offset by a benefit of $ 2.2 million as a result of the operating losses (exclusive of the CCRC Venture sale) for the three months ended March 31, 2020.
+Added: The expense for the three months ended March 31, 2020 was offset by a reduction in the valuation allowance of $ 112.6 million.
+Added: The Company evaluates its deferred tax assets each quarter to determine if a valuation allowance is required based on whether it is more likely than not that some portion of the deferred tax asset would not be realized.
+Added: The Company's valuation allowance as of March 31, 2021 and December 31, 2020 was $ 406.5 million and $ 381.0 million, respectively.
+Added: The increase in the valuation allowance for the three months ended March 31, 2021 is the result of current operating losses during the three months ended March 31, 2021.
+Added: The change in the valuation allowance for the three months ended March 31, 2020 was primarily the result of a reduction in the Company’s valuation allowance of $ 117.6 million as a result of the Healthpeak transaction offset by the anticipated reversal of future tax liabilities offset by future tax deductions.
+Added: The Company recorded interest charges related to its tax contingency reserve for cash tax positions for the three months ended March 31, 2021 and 2020 which are included in income tax expense or benefit for the period.
+Added: As of March 31, 2021, tax returns for years 2017 through 2019 are subject to future examination by tax authorities.
+Added: In addition, the net operating losses from prior years are subject to adjustment under examination.
Supplemental Disclosure of Cash Flow Information
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended
(in thousands) 2021 2020
15 unchanged sentences
Net cash paid $ — $ 407,249
−Removed: Master Agreement with Ventas:
−Removed: Property, plant and equipment and leasehold intangibles, net $ ( 66,444 ) $ —
−Removed: Operating lease right-of-use assets ( 153,213 ) —
−Removed: Other assets, net ( 42,354 ) —
−Removed: Long-term debt 34,053 —
−Removed: Financing lease obligations 7,077 —
−Removed: Operating lease obligations 362,944 —
−Removed: Additional paid-in-capital ( 22,883 ) —
−Removed: Net cash paid $ 119,180 $ —
Acquisition of other assets, net of related payables and cash received:
Property, plant and equipment and leasehold intangibles, net $ — $ 179
−Removed: Other intangible assets, net — 453
Financing lease obligations — 39,260
3 unchanged sentences
Current portion of long-term debt — 34,706
+Added: Accrued expenses — ( 5,025 )
Other liabilities — 60,748
5 unchanged sentences
Property, plant and equipment and leasehold intangibles, net ( 597 ) —
−Removed: Investments in unconsolidated ventures — ( 156 )
Other liabilities 74 ( 824 )
2 unchanged sentences
Supplemental Schedule of Non-cash Operating, Investing, and Financing Activities:
−Removed: Assets designated as held for sale:
−Removed: Prepaid expenses and other assets, net $ — $ ( 5 )
−Removed: Assets held for sale — 9,169
−Removed: Property, plant and equipment and leasehold intangibles, net — ( 9,164 )
Healthpeak master lease modification:
3 unchanged sentences
Operating lease obligations — ( 101,456 )
−Removed: Other lease termination and modification, net:
−Removed: Prepaid expenses and other assets, net $ — $ ( 648 )
+Added: Other non-cash lease transactions, net:
Property, plant and equipment and leasehold intangibles, net $ — $ ( 9,441 )
3 unchanged sentences
Other liabilities — ( 75 )
−Removed: Loss (gain) on facility lease termination and modification, net — 2,006
−Removed: During the three months ended June 30, 2019, the Company and its joint venture partner contributed cash in an aggregate amount of $ 13.3 million to a consolidated joint venture which owned three senior housing communities.
−Removed: The Company obtained a $ 6.6 million promissory note receivable from its joint venture partner secured by a 50 % equity interest in the joint venture in a non-cash exchange for the Company funding the $ 13.3 million aggregate contribution in cash.
Restricted cash consists principally of deposits for letters of credit, escrow deposits for real estate taxes, property insurance, and capital expenditures, debt service reserve accounts required by certain lenders under mortgage debt agreements, and deposits as security for self-insured retention risk under workers' compensation programs and property insurance programs.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sums to the total of the same such amounts shown in the condensed consolidated statements of cash flows.
−Removed: (in thousands) September 30, 2020 December 31, 2019
+Added: (in thousands) March 31, 2021 December 31, 2020
Reconciliation of cash, cash equivalents, and restricted cash:
2 unchanged sentences
Long-term restricted cash 71,468 56,669
−Removed: Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 493,075 $ 301,697
−Removed: The difference between the Company's effective tax rate for the three and nine months ended September 30, 2020 and September 30, 2019 was primarily due to the tax impact of the multi-part transaction with Healthpeak that occurred in the three months ended March 31, 2020.
−Removed: The impact represented the tax expense recorded on the gain of the sale of the Company's interest in the CCRC Venture offset by a decrease in the valuation allowance that was a direct result of the multi-part transaction with Healthpeak.
−Removed: This was slightly offset by the adjustment for stock-based compensation, which was greater in the nine months ended September 30, 2019 compared to the nine months ended September 30, 2020.
−Removed: The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 27.4 million for the three months ended September 30, 2020 and an aggregate deferred federal, state, and local tax expense of $ 36.8 million for the nine months ended September 30, 2020.
−Removed: The expense includes $ 93.1 million as a result of the gain on the sale of the Company's interest in the CCRC Venture offset by a benefit of $ 56.3 million as a result of the operating losses (exclusive of the CCRC Venture sale) for the nine months ended September 30, 2020.
−Removed: The benefit for the three months ended September 30, 2020 is offset by additional valuation allowance of $ 40.0 million.
−Removed: The tax expense for the nine months ended September 30, 2020 is offset by a reduction in valuation allowance of $ 39.5 million.
−Removed: The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 19.4 million and $ 39.0 million for the three and nine months ended September 30, 2019.
−Removed: The benefit includes $ 19.4 million and $ 40.7 million as a result of the operating losses for the three and nine months ended September 30, 2019.
−Removed: The benefit was reduced by a $ 1.7 million reduction in the deferred tax asset related to employee stock compensation for the nine months ended September 30, 2019.
−Removed: The Company evaluates its deferred tax assets each quarter to determine if a valuation allowance is required based on whether it is more likely than not that some portion of the deferred tax asset would not be realized.
−Removed: The Company's valuation allowance as of September 30, 2020 and December 31, 2019 was $ 369.4 million and $ 408.9 million, respectively.
−Removed: The decrease in the valuation allowance for the nine months ended September 30, 2020 is the result of a reduction in the Company’s valuation allowance of $ 117.6 million as a result of the Healthpeak transaction offset by an increase in the valuation allowance of $ 78.1 million established against current operating losses during the nine months ended September 30, 2020, and by the anticipated reversal of future tax liabilities offset by future tax deductions.
−Removed: The increase in the valuation allowance during the nine months ended September 30, 2019 was comprised of multiple components.
−Removed: The increase included $ 13.8 million resulting from the adoption of ASC 842 recorded to equity, and the related addition of future timing differences recorded in the three months ended March 31, 2019.
−Removed: An additional $ 39.4 million of allowance was established against the current operating loss incurred during the nine months ended September 30, 2019.
−Removed: Offsetting the increases was a decrease of $ 1.7 million of allowance as a result of removal of future timing differences related to employee stock compensation recorded in the three months ended March 31, 2019.
−Removed: The Company recorded interest charges related to its tax contingency reserve for cash tax positions for the three and nine months ended September 30, 2020 and 2019 which are included in income tax expense or benefit for the period.
−Removed: September 30, 2020, tax returns for years 2015 through 2018 are subject to future examination by tax authorities.
−Removed: In addition, the net operating losses from prior years are subject to adjustment under examination.
−Removed: Disaggregation of Revenue
−Removed: The Company disaggregates its revenue from contracts with customers by payor source.
−Removed: The Company believes it best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors.
−Removed: See details on a reportable segment basis in the tables below.
−Removed: Three Months Ended September 30, 2020
−Removed: (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total
−Removed: Private pay $ 125,156 $ 391,292 $ 57,129 $ 221 $ 573,798
−Removed: Government reimbursement 606 17,403 13,440 71,095 102,544
−Removed: Other third-party payor programs — — 5,842 18,587 24,429
−Removed: Total resident fee revenue $ 125,762 $ 408,695 $ 76,411 $ 89,903 $ 700,771
−Removed: Three Months Ended September 30, 2019
−Removed: (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total
−Removed: Private pay $ 136,274 $ 435,367 $ 70,353 $ 171 $ 642,165
−Removed: Government reimbursement 600 17,107 19,931 89,157 126,795
−Removed: Other third-party payor programs — — 9,820 22,457 32,277
−Removed: Total resident fee revenue $ 136,874 $ 452,474 $ 100,104 $ 111,785 $ 801,237
−Removed: Nine Months Ended September 30, 2020
−Removed: (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total
−Removed: Private pay $ 390,124 $ 1,246,181 $ 181,812 $ 649 $ 1,818,766
−Removed: Government reimbursement 1,778 52,149 46,589 215,350 315,866
−Removed: Other third-party payor programs — — 21,582 58,893 80,475
−Removed: Total resident fee revenue $ 391,902 $ 1,298,330 $ 249,983 $ 274,892 $ 2,215,107
−Removed: Nine Months Ended September 30, 2019
−Removed: (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total
−Removed: Private pay $ 406,667 $ 1,310,867 $ 212,978 $ 554 $ 1,931,066
−Removed: Government reimbursement 1,852 50,358 61,614 269,428 383,252
−Removed: Other third-party payor programs — — 30,492 67,769 98,261
−Removed: Total resident fee revenue $ 408,519 $ 1,361,225 $ 305,084 $ 337,751 $ 2,412,579
−Removed: Contract Balances
−Removed: The payment terms and conditions within the Company's revenue-generating contracts vary by contract type and payor source, although terms generally include payment to be made within 30 days.
−Removed: Resident fee revenue for recurring and routine monthly services is generally billed monthly in advance under the Company's independent living, assisted living, and memory care residency agreements.
−Removed: Resident fee revenue for standalone or certain healthcare services is generally billed monthly in arrears.
−Removed: A portion of the Company's reimbursement from Medicare for certain healthcare services is billed near the start of each period of care, and cash is generally received before all services are rendered.
−Removed: The amount of revenue recognized for periods of care which are incomplete at period end is based on the Company's historical average percentage of days complete on each period of care and any unearned amounts are deferred and recognized when the service is performed.
−Removed: Additionally, non-refundable community fees are generally billed and collected in advance or upon move-in of a resident under the Company's independent living, assisted living, and memory care residency agreements.
−Removed: Amounts of revenue that are collected from residents in advance are recognized as deferred revenue until the performance obligations are satisfied.
−Removed: The Company had total deferred revenue (included within refundable fees and deferred revenue and other liabilities within the condensed consolidated balance sheets) of $ 139.5 million and $ 72.5 million, including $ 24.2 million and $ 38.9 million of monthly resident fees billed and received in advance, as of September 30, 2020 and December 31, 2019, respectively.
−Removed: Such amount of total deferred revenue as of September 30, 2020 also included $ 87.5 million received in the nine months ended September 30, 2020 under a temporary expansion of the Accelerated and Advance Payment Program administered by CMS.
−Removed: Such amount of advance receipts is anticipated to either be recognized as revenue and retained by the Company during the recoupment period from 2021 to 2022 as services are provided or refunded by the Company at the conclusion of such period.
−Removed: Refer to Note 3 for additional information on such program.
−Removed: For the nine months ended September 30, 2020 and 2019, the Company recognized $ 59.3 million and $ 83.7 million, respectively, of revenue that was included in the deferred revenue balance as of January 1, 2020 and 2019.
−Removed: The Company applies the practical expedient in ASC 606-10-50-14 and does not disclose amounts for remaining performance obligations that have original expected durations of one year or less.
−Removed: For the three months ended September 30, 2020 and 2019, the Company recognized $ 4.8 million and $ 3.8 million, respectively, and for the nine months ended September 30, 2020 and 2019, the Company recognized $ 12.4 million and $ 10.8 million, respectively, of charges within facility operating expense within the condensed consolidated statements of operations for additions to the allowance for credit losses.
+Added: Total cash, cash equivalents, and restricted cash $ 401,923 $ 465,148
Segment Information
8 unchanged sentences
Independent Living .
−Removed: The Company's Independent Living segment includes owned or leased communities that are primarily designed for middle to upper income seniors who desire an upscale residential environment providing the highest quality of service.
−Removed: The majority of the Company's independent living communities consist of both independent and assisted living units in a single community, which allows residents to age-in-place by providing them with a continuum of senior independent and assisted living services.
+Added: The Company's Independent Living segment includes owned or leased communities that are primarily designed for middle to upper income seniors who desire to live in a residential setting that feels like home, without the efforts of ownership.
+Added: The majority of the Company's independent living communities consist of both independent and assisted living units in a single community, which allows residents to age-in-place by providing them with a broad continuum of senior independent and assisted living services to accommodate their changing needs.
Assisted Living and Memory Care.
−Removed: The Company's Assisted Living and Memory Care segment includes owned or leased communities that offer housing and 24-hour assistance with activities of daily life to mid-acuity frail and elderly residents.
−Removed: Assisted living and memory care communities include both freestanding, multi-story communities and freestanding, single story communities.
+Added: The Company's Assisted Living and Memory Care segment includes owned or leased communities that offer housing and 24-hour assistance with activities of daily living for mid-acuity and frail elderly residents.
+Added: The Company's assisted living and memory care communities include both freestanding, multi-story communities, as well as smaller freestanding, single story communities.
The Company also provides memory care services at freestanding memory care communities that are specially designed for residents with Alzheimer's disease and other dementias.
−Removed: The Company's CCRCs segment includes large owned or leased communities that offer a variety of living arrangements and services to accommodate all levels of physical ability and health.
−Removed: Most of the Company's CCRCs have independent living, assisted living, and skilled nursing available on one campus or within the immediate market, and some also include memory care services.
+Added: The Company's CCRCs segment includes large owned or leased communities that offer a variety of living arrangements and services to accommodate a broad spectrum of physical ability and healthcare needs.
+Added: Most of the Company's CCRCs have independent living, assisted living, memory care, and skilled nursing available on one campus or within the immediate area.
Health Care Services .
−Removed: The Company's Health Care Services segment includes the home health, hospice, and outpatient therapy services, as well as education and wellness programs, provided to residents of many of the Company's communities and to seniors living outside of the Company's communities.
+Added: The Company's Health Care Services segment includes the home health, hospice, and outpatient therapy services provided to residents of many of its communities and to seniors living outside its communities.
The Health Care Services segment does not include the skilled nursing and inpatient healthcare services provided in the Company's skilled nursing units, which are included in the Company's CCRCs segment.
3 unchanged sentences
Under the management agreements for these communities, the Company receives management fees as well as reimbursed expenses, which represent the reimbursement of expenses it incurs on behalf of the owners.
−Removed: The following table sets forth selected segment financial and operating data:
+Added: The following table sets forth selected segment financial data:
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
(in thousands) 2021 2020
26 unchanged sentences
Corporate and Management Services — 1,938
−Removed: Total asset impairment 8,213 2,094 96,729 6,254
−Removed: Loss (gain) on facility lease termination and modification, net — — — 2,006
Income (loss) from operations $ ( 61,590 ) $ 14,900
−Removed: (in thousands) September 30, 2020 December 31, 2019
+Added: (in thousands) March 31, 2021 December 31, 2020
Total assets:
5 unchanged sentences
Total assets $ 6,746,153 $ 6,901,758
−Removed: (1) All revenue and other operating income is earned from external third parties in the United States.
−Removed: (2) The Independent Living, Assisted Living and Memory Care, CCRCs, and Health Care Services segments include $ 0.1 million, $ 1.9 million, $ 2.8 million, and $ 5.9 million respectively, for the three months ended September 30, 2020 and $ 0.1 million, $ 2.1 million, $ 12.4 million , and $ 22.9 million respectively, for the nine months ended September 30, 2020, of other operating income recognized for grants pursuant to the Provider Relief Fund described in Note 3 and other government sources.
−Removed: Allocations to the applicable segment reflect the segment's receipt and acceptance of the amounts and the Company's estimates of its satisfaction of the conditions of grant during the period.
+Added: (1) All revenue is earned from external third parties in the United States.
+Added: (2) The Independent Living, Assisted Living and Memory Care, CCRCs, and Health Care Services segments include $ 1.4 million, $ 5.1 million, $ 1.7 million, and $ 2.6 million respectively, for the three months ended March 31, 2021 of other operating income recognized for the credits or grants pursuant to the Employee Retention Credit, Provider Relief Fund, and other government sources, as described in Note 3.
+Added: Allocations to the applicable segment generally reflect the credits earned by the segment, the segment’s receipt and acceptance of the grant, or the segment’s proportional utilization of the grant.
(3) Management services segment revenue includes management fees and reimbursements of costs incurred on behalf of managed communities.
−Removed: (4) Segment operating income is defined as segment revenues and other operating income less segment facility operating expense (excluding depreciation and amortization) and costs incurred on behalf of managed communities.
+Added: (4) Segment operating income is defined as segment revenues and other operating income less segment facility operating expenses (excluding facility depreciation and amortization) and costs incurred on behalf of managed communities.
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.