3 unchanged sentences
(In thousands, except stock amounts)
−Removed: September 30,
2022 December 31,
13 unchanged sentences
Goodwill 27,321 27,321
+Added: Deferred tax asset 2,584 279
Other assets, net 20,692 17,296
12 unchanged sentences
Operating lease obligations, less current portion 647,571 681,876
−Removed: Deferred tax liability 18,069 9,557
Other liabilities 84,764 86,791
Total liabilities 5,695,698 5,710,844
−Removed: Preferred stock, $ 0.01 par value, 50,000,000 shares authorized at September 30, 2021 and December 31, 2020;
+Added: Preferred stock, $ 0.01 par value, 50,000,000 shares authorized at March 31, 2022 and December 31, 2021;
no shares issued and outstanding
−Removed: Common stock, $ 0.01 par value, 400,000,000 shares authorized at September 30, 2021 and December 31, 2020;
+Added: Common stock, $ 0.01 par value, 400,000,000 shares authorized at March 31, 2022 and December 31, 2021;
197,810,798 and 197,485,318 shares issued and 187,283,273 and 186,957,793 shares outstanding (including 530,861 and 1,549,059 unvested restricted shares), respectively
1 unchanged sentence
Treasury stock, at cost;
−Removed: 10,527,525 shares at September 30, 2021 and December 31, 2020
+Added: 10,527,525 shares at March 31, 2022 and December 31, 2021
( 102,774 ) ( 102,774 )
10 unchanged sentences
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2021 2020 2021 2020
Resident fees $ 636,974 $ 664,350
17 unchanged sentences
Financing lease obligations ( 12,058 ) ( 11,383 )
−Removed: Amortization of deferred financing costs and debt discount ( 1,979 ) ( 1,730 ) ( 5,992 ) ( 4,601 )
−Removed: Gain (loss) on debt modification and extinguishment, net — ( 7,917 ) — 11,107
+Added: Amortization of deferred financing costs ( 1,542 ) ( 1,915 )
+Added: Change in fair value of derivatives 3,403 42
Equity in earnings (loss) of unconsolidated ventures ( 4,894 ) ( 531 )
7 unchanged sentences
common stockholders $ ( 100,013 ) $ ( 108,285 )
−Removed: Net income (loss) per share attributable to Brookdale Senior Living Inc.
+Added: Basic and diluted net income (loss) per share attributable to Brookdale Senior Living Inc.
common stockholders $ ( 0.54 ) $ ( 0.59 )
−Removed: Basic $ 0.94 $ ( 0.68 ) $ ( 0.10 ) $ 0.69
−Removed: Diluted $ 0.89 $ ( 0.68 ) $ ( 0.10 ) $ 0.69
−Removed: Weighted average common shares outstanding:
−Removed: Basic 185,317 183,244 184,841 183,535
−Removed: Diluted 196,230 183,244 184,841 183,668
+Added: Weighted average shares used in computing basic and diluted net income (loss) per share 185,916 184,011
See accompanying notes to condensed consolidated financial statements.
3 unchanged sentences
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2021 2020 2021 2020
Total equity, balance at beginning of period $ 699,623 $ 802,729
1 unchanged sentence
Balance at beginning of period $ 1,975 $ 1,983
−Removed: Issuance of common stock under Associate Stock Purchase Plan — 1 — 2
Restricted stock and restricted stock units, net 9 2
5 unchanged sentences
Issuance of common stock under Associate Stock Purchase Plan — 224
−Removed: Issuance of warrants — 22,883 — 22,883
Restricted stock and restricted stock units, net ( 9 ) ( 2 )
3 unchanged sentences
Treasury stock:
−Removed: Balance at beginning of period $ ( 102,774 ) $ ( 102,774 ) $ ( 102,774 ) $ ( 84,651 )
−Removed: Purchase of treasury stock — — — ( 18,123 )
−Removed: Balance at end of period $ ( 102,774 ) $ ( 102,774 ) $ ( 102,774 ) $ ( 102,774 )
+Added: Balance at beginning and end of period $ ( 102,774 ) $ ( 102,774 )
Accumulated deficit:
Balance at beginning of period $ ( 3,410,474 ) $ ( 3,311,184 )
−Removed: Cumulative effect of change in accounting principle — — — ( 115 )
Net income (loss) ( 100,013 ) ( 108,285 )
11 unchanged sentences
Shares withheld for employee taxes ( 600 ) ( 744 )
−Removed: Purchase of treasury stock — — — ( 3,063 )
Balance at end of period 187,283 187,230
3 unchanged sentences
(Unaudited, in thousands)
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Cash Flows from Operating Activities
1 unchanged sentence
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
−Removed: Loss (gain) on debt modification and extinguishment, net — ( 11,107 )
Depreciation and amortization, net 87,226 85,806
6 unchanged sentences
Operating lease expense adjustment ( 8,307 ) ( 4,664 )
+Added: Change in fair value of derivatives ( 3,403 ) ( 42 )
Loss (gain) on sale of assets, net 294 ( 1,112 )
7 unchanged sentences
Refundable fees and deferred revenue 5,907 7,717
−Removed: Operating lease assets and liabilities for lessor capital expenditure reimbursements 27,057 13,640
+Added: Operating lease assets and liabilities for lessor capital expenditure
+Added: reimbursements 1,490 7,563
Net cash provided by (used in) operating activities ( 23,255 ) ( 23,857 )
4 unchanged sentences
Capital expenditures, net of related payables ( 39,956 ) ( 40,361 )
−Removed: Acquisition of assets, net of related payables and cash received — ( 472,193 )
Investment in unconsolidated ventures ( 82 ) ( 5,206 )
−Removed: Distributions received from unconsolidated ventures 2,155 —
Proceeds from sale of assets, net 710 3,760
−Removed: Proceeds from notes receivable — 2,849
Net cash provided by (used in) investing activities ( 36,163 ) ( 3,806 )
2 unchanged sentences
Repayment of debt and financing lease obligations ( 21,440 ) ( 49,924 )
−Removed: Proceeds from line of credit — 166,381
−Removed: Repayment of line of credit — ( 166,381 )
−Removed: Purchase of treasury stock, net of related payables — ( 18,123 )
Payment of financing costs, net of related payables ( 76 ) ( 87 )
Payments of employee taxes for withheld shares ( 4,145 ) ( 4,329 )
−Removed: Other 144 335
Net cash provided by (used in) financing activities ( 403 ) ( 35,562 )
11 unchanged sentences
The Company's senior living communities and its comprehensive network help to provide seniors with care and services in an environment that feels like home.
−Removed: As of September 30, 2021, the Company has four reportable segments:
−Removed: Independent Living;
−Removed: Assisted Living and Memory Care;
−Removed: and Management Services.
−Removed: On July 1, 2021, the Company sold 80 % of its equity in its Health Care Services segment, an additional reportable segment prior to that date, as described in Note 4.
−Removed: The accompanying unaudited condensed consolidated financial statements include the financial position, results of operations, and cash flows of the Health Care Services segment through June 30, 2021.
−Removed: For periods beginning July 1, 2021, the results and financial position of the Health Care Services segment are deconsolidated from the Company's consolidated financial statements and its 20 % equity interest in the Health Care Services venture (the "HCS Venture") is accounted for under the equity method of accounting.
+Added: As of March 31, 2022, the Company owned 347 communities, representing a majority of the Company's consolidated community portfolio, leased 298 communities, and managed 33 communities.
+Added: On July 1, 2021, the Company sold 80 % of its equity in its Health Care Services segment.
+Added: The accompanying unaudited condensed consolidated financial statements include the results of operations and cash flows of the Health Care Services segment for the three months ended March 31, 2021.
+Added: For periods beginning July 1, 2021, the results and financial position of the Health Care Services segment were deconsolidated from the Company's consolidated financial statements and its 20 % equity interest in the Health Care Services venture (the "HCS Venture") is accounted for under the equity method of accounting.
Summary of Significant Accounting Policies
8 unchanged sentences
The condensed consolidated financial statements include the accounts of Brookdale and its consolidated subsidiaries.
−Removed: The ownership interest of consolidated entities not wholly-owned by the Company are presented as noncontrolling interests in the accompanying condensed consolidated financial statements.
+Added: The ownership interest of consolidated entities not wholly-owned by the Company are presented as noncontrolling interests in the accompanying unaudited condensed consolidated financial statements.
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.
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.
−Removed: The Company continually evaluates its potential variable interest entity ("VIE") relationships under certain criteria as provided for in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 810, Consolidation ("ASC 810").
+Added: The Company continually evaluates its potential variable interest entity ("VIE") relationships under certain criteria as provided for in Financial Accounting Standards Board Accounting Standards Codification 810, Consolidation ("ASC 810").
ASC 810 broadly defines a VIE as an entity with one or more of the following characteristics:
7 unchanged sentences
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.
−Removed: Lease Accounting
−Removed: The Company, as lessee, recognizes a right-of-use asset and a lease liability on the Company's condensed consolidated balance sheet for its community, office, and equipment leases.
−Removed: 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 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.
−Removed: The Company recognizes lease expense as incurred for additional variable payments.
−Removed: For the Company's leases that do not contain an implicit rate, the Company utilizes its estimated incremental borrowing rate to determine the present value of lease payments based on information available at commencement of the lease.
−Removed: The Company's estimated incremental borrowing rate reflects the fixed rate at which the Company could borrow a similar amount for the same term on a collateralized basis.
−Removed: The Company elected the short-term lease exception policy which permits leases with an initial term of 12 months or less to not be recorded on the Company's condensed consolidated balance sheet and instead to be recognized as lease expense as incurred.
−Removed: The Company, as lessee, makes a determination with respect to each of its community, office, and equipment leases as to whether each should be accounted for as an operating lease or financing lease.
−Removed: The classification criteria is based on estimates regarding the fair value of the leased asset, minimum lease payments, effective cost of funds, economic life of the asset, and certain other terms in the lease agreements.
−Removed: Lease right-of-use assets are reviewed for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
−Removed: Recoverability of right-of-use assets are assessed by a comparison of the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset, calculated utilizing the lowest level of identifiable cash flows.
−Removed: If estimated future undiscounted net cash flows are less than the carrying amount of the asset then the fair value of the asset is estimated.
−Removed: The impairment expense is determined by comparing the estimated fair value of the asset to its carrying amount, with any amount in excess of fair value recognized as an expense in the current period.
−Removed: Undiscounted cash flow projections and estimates of fair value amounts are based on a number of assumptions such as revenue and expense growth rates and estimated lease coverage ratios (Level 3).
−Removed: Operating Leases
−Removed: The Company recognizes operating lease expense for actual rent paid, generally plus or minus a straight-line adjustment for estimated minimum lease escalators if applicable.
−Removed: The right-of-use asset is generally reduced each period by an amount equal to the difference between the operating lease expense and the amount of expense on the lease liability utilizing the effective interest method.
−Removed: Subsequent to the impairment of an operating lease right-of-use asset, the Company recognizes operating lease expense consisting of the reduction of the right-of-use asset on a straight-line basis over the remaining lease term and the amount of expense on the lease liability utilizing the effective interest method.
−Removed: Financing Leases
−Removed: Financing lease right-of-use assets are recognized within property, plant and equipment and leasehold intangibles, net on the Company's condensed consolidated balance sheets.
−Removed: The Company recognizes interest expense on the financing lease liabilities utilizing the effective interest method.
−Removed: The right-of-use asset is generally amortized to depreciation and amortization expense on a straight-line basis over the lease term unless the lease contains an option to purchase the underlying asset that the Company is reasonably certain to exercise.
−Removed: If the Company is reasonably certain to exercise the purchase option, the asset is amortized over the useful life.
−Removed: Sale-Leaseback Transactions
−Removed: For transactions in which an owned community is sold and leased back from the buyer (sale-leaseback transactions), the Company recognizes an asset sale and lease accounting is applied if the Company has transferred control of the community.
−Removed: For such transactions, the Company removes the transferred assets from the condensed consolidated balance sheet and a gain or loss on the sale is recognized for the difference between the carrying amount of the asset and the transaction price for the sale transaction.
−Removed: 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 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.
−Removed: 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: Property, Plant and Equipment and Leasehold Intangibles, Net
−Removed: Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset group may not be recoverable.
−Removed: Recoverability of an asset group is assessed by comparing its carrying amount to the estimated future undiscounted net cash flows expected to be generated by the asset group through operation or disposition, calculated utilizing the lowest level of identifiable cash flows.
−Removed: If this comparison indicates that the carrying amount of an asset group is not recoverable, the Company is required to recognize an impairment loss.
−Removed: The impairment loss is measured by the amount by which the carrying amount of the asset exceeds its estimated fair value, with any amount in excess of fair value recognized as an expense in the current period.
−Removed: Undiscounted cash flow projections and estimates of fair value amounts are based on a number of assumptions such as revenue and expense growth rates, estimated holding periods, and estimated capitalization rates (Level 3).
−Removed: Recently Adopted Accounting Pronouncements
−Removed: In August 2020, the FASB issued Accounting Standard Update ("ASU") 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40):
−Removed: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ("ASU 2020-06"), which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments.
−Removed: This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method.
−Removed: The Company early adopted the ASU effective January 1, 2021 using the modified retrospective method of adoption and the adoption did not have a material impact on the Company's financial statements.
+Added: Reclassifications
+Added: 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.
COVID-19 Pandemic
−Removed: The COVID-19 pandemic has significantly disrupted the senior living industry and the Company's business.
−Removed: 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 COVID-19 pandemic.
−Removed: As of July 31, 2021, all of the Company’s communities were open for visitors, new resident move-ins, and prospective residents.
−Removed: During the three months ended September 30, 2021, several of the Company’s communities experienced restrictions on visitors, new resident move-ins, and prospective residents, with a peak of such restrictions occurring in mid-September 2021.
−Removed: As of October 31, 2021, substantially all of the Company’s communities were open for visitors, new resident move-ins, and prospective residents.
−Removed: The Company may revert to more restrictive measures at its communities, including restrictions on visitors and move-ins, if the pandemic worsens, as necessary to comply with regulatory requirements, or at the direction of state or local health authorities.
−Removed: Pandemic-Related Expenses .
−Removed: For the three and nine months ended September 30, 2021, the Company recognized $ 7.2 million and $ 44.3 million, respectively, of facility operating expense for incremental direct costs to respond to the pandemic.
−Removed: For the three and nine months ended September 30, 2020, the Company recognized $ 24.5 million and $ 95.1 million, respectively, of such facility operating expense.
−Removed: The direct costs include those for:
−Removed: acquisition of additional personal protective equipment ("PPE"), medical equipment, and cleaning and disposable food service supplies;
−Removed: enhanced cleaning and environmental sanitation;
−Removed: increased employee-related costs, including labor, workers compensation, and health plan expense;
−Removed: expense for general liability claims;
−Removed: and COVID-19 testing of residents and associates where not otherwise covered by government payor or third-party insurance sources.
−Removed: On a cumulative basis through September 30, 2021, the Company has incurred $ 169.8 million of pandemic related facility operating expense since the beginning of fiscal 2020.
−Removed: For the three and nine months ended September 30, 2021, the Company recorded $ 0.6 million and $ 13.4 million, respectively, of non-cash impairment charges in its operating results 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 with impaired assets.
−Removed: For the three and nine months ended September 30, 2020, the Company recorded $ 8.2 million and $ 95.2 million, respectively, of such non-cash impairment charges.
−Removed: The Company has taken, and continues to take, actions to enhance and preserve its liquidity in response to the pandemic.
−Removed: As of September 30, 2021, the Company's total liquidity was $ 645.8 million, consisting of $ 478.5 million of unrestricted cash and cash equivalents, $ 157.9 million of marketable securities, and $ 9.4 million of availability on its secured credit facility.
−Removed: The Company continues to seek opportunities to enhance and preserve its liquidity, including through increasing occupancy and maintaining expense discipline, continuing to evaluate its financing structure and the state of debt markets, and seeking further government-sponsored financial relief related to the 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 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.
−Removed: Financial Relief .
−Removed: The Coronavirus Aid, Relief, and Economic Security Act of 2020 ("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.
−Removed: Certain impacts of such programs are provided below.
−Removed: • During the nine months ended September 30, 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.
−Removed: 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.
−Removed: The grants received in the nine months ended September 30, 2021 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.
−Removed: In September 2021, HHS announced that it has allocated $17.0 billion for a Phase 4 general distribution from the Provider Relief Fund.
−Removed: According to HHS guidance, it intends to allocate 75% of the Phase 4 general distribution based on eligible applicants’ changes in revenues and operating expenses from patient care attributable to COVID-19 for the second half of 2020 and the first quarter of 2021, with smaller providers to receive a supplement in addition to a base payment.
−Removed: HHS will determine the exact amount of the base payments and supplements after analyzing data from all the applications received.
−Removed: HHS intends to allocate 25% of the Phase 4 general distribution for bonus payments that are based on the amount and type of services provided to Medicaid, Children's Health Insurance Program ("CHIP"), and Medicare patients.
−Removed: The Company applied for the Phase 4 general distribution and intends to pursue any additional funding that may become available.
−Removed: 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.
−Removed: • During the year ended December 31, 2020, the Company received $ 87.5 million under the Accelerated and Advance Payment Program administered by the Centers for Medicare & Medicaid Services ("CMS"), $ 75.2 million of which related to its Health Care Services segment and $ 12.3 million related to its CCRCs segment and of which $ 2.5 million and $ 87.5 million was received in the three and nine months ended September 30, 2020, respectively.
−Removed: Recoupment of advanced payments began 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.
−Removed: Any outstanding balance of advanced payments will be due following such recoupment period.
−Removed: During the three and nine months ended September 30, 2021, $ 3.5 million and $ 17.8 million, respectively, of the advanced payments were recouped.
−Removed: Pursuant to the sale of 80 % of the Company's equity in its Health Care Services segment (as described in Note 4), $ 63.6 million of such obligations related to its Health Care Services segment were retained by the unconsolidated HCS Venture.
−Removed: As of September 30, 2021, the outstanding balance of advanced payments related to its CCRCs segment was $ 6.1 million.
−Removed: • During the year ended December 31, 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.
−Removed: One-half of such deferral amount will become due on each of December 31, 2021 and December 31, 2022.
−Removed: Pursuant to the sale of 80 % of the Company's equity in its Health Care Services segment, $ 9.6 million of such obligations related
−Removed: to its Health Care Services segment were retained by the unconsolidated HCS Venture.
−Removed: The Company expects to pay $ 31.6 million of the deferred payments in both December 2021 and 2022.
−Removed: • The Company is eligible to claim the employee retention credit for certain of its associates under the CARES Act.
−Removed: 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.
−Removed: During the nine months ended September 30, 2021, the Company recognized $ 9.9 million of employee retention credits on wages paid from March 12, 2020 to December 31, 2020 within other operating income, of which none were recognized during the three months ended September 30, 2021.
−Removed: During the three and nine months ended September 30, 2021, the Company received $ 1.1 million for the employee retention credits, which were previously recognized within other operating income.
−Removed: 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.
−Removed: There can be no assurance that the Company will qualify for, or receive, credits in the amount or on the timing it expects.
−Removed: In addition to the grants described above, during the three and nine months ended September 30, 2021, the Company received and recognized $ 0.1 million and $ 1.4 million, respectively, of other operating income from grants from other government sources.
+Added: The COVID-19 pandemic has adversely impacted the Company's occupancy and resident fee revenue beginning in March 2020 and resulted in incremental direct costs to respond to the pandemic and net cash used in operating activities.
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.
−Removed: 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 or variants of the disease, including the Delta variant;
+Added: 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 or variants of the disease;
the impact of COVID-19 on the nation’s economy and debt and equity markets and the local economies in the Company's markets;
6 unchanged sentences
the disproportionate impact of COVID-19 on seniors generally and those residing in the Company's communities;
−Removed: the duration and costs of the Company's response efforts, including increased equipment, supplies, labor, litigation, testing, vaccination clinic, and other expenses;
−Removed: potentially greater associate attrition and use of contract labor due to the Company's associate vaccine mandate;
+Added: the duration and costs of the Company's response efforts, including increased equipment, supplies, labor, litigation, testing, vaccination clinic, health plan, and other expenses;
+Added: potentially greater use of contract labor and overtime due to COVID-19 and general labor market conditions;
the impact of COVID-19 on the Company's ability to complete financings and refinancings of various assets or other transactions 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;
−Removed: increased regulatory requirements, including unfunded, mandatory testing;
+Added: increased regulatory requirements, including the costs of unfunded, mandatory testing of residents and associates and provision of test kits to the Company's health plan participants;
increased enforcement actions resulting from COVID-19;
1 unchanged sentence
and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or the Company's response efforts.
−Removed: Acquisitions, Dispositions and Other Transactions
−Removed: Sale of Health Care Services
−Removed: On July 1, 2021, the Company completed the sale of 80 % of its equity in its Health Care Services segment to affiliates of HCA Healthcare, Inc.
−Removed: ("HCA Healthcare") for a purchase price of $ 400.0 million in cash, subject to certain adjustments set forth in the Securities Purchase Agreement (the "Purchase Agreement") dated February 24, 2021, including a reduction 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 (the "HCS Sale").
−Removed: The Company received net cash proceeds of $ 305.8 million at closing on July 1, 2021.
−Removed: Additionally, the Company received $ 6.8 million upon completion of the post-closing net working capital adjustment in October 2021;
−Removed: such amount is included within prepaid expenses and other current assets, net in the condensed consolidated balance sheet as of September 30, 2021.
−Removed: The Purchase Agreement also contained certain agreed upon indemnities for the benefit of the purchaser.
−Removed: Pursuant to the Purchase Agreement, at closing of the transaction, the Company retained a 20 % equity interest in the HCS Venture.
−Removed: The results and financial position of the Company's Health Care Services segment were deconsolidated from its consolidated financial statements as of July 1, 2021, and its 20 % equity interest in the HCS Venture is accounted for under the equity method of accounting subsequent to that date.
−Removed: As of July 1, 2021, the Company recognized a $ 100.0 million asset within investment in unconsolidated ventures on its condensed consolidated balance sheet for the estimated fair value of its retained 20 % noncontrolling interest in the HCS Venture.
−Removed: The Company recognized a $ 288.2 million gain on sale, net of transaction costs, for the HCS Sale within gain on sale of assets, net within its condensed consolidated statement of operations for the three months ended September 30, 2021.
−Removed: Refer to Note 17 for selected financial data for the Health Care Services segment through June 30, 2021.
−Removed: In September 2021, the HCS Venture entered into a Securities Purchase Agreement with LHC Group Inc., providing for the sale of home health, hospice, and outpatient therapy agencies in areas not served by HCA Healthcare.
−Removed: Upon the completion of the sale on November 1, 2021, the Company received $ 35.0 million of cash distributions from the HCS Venture from the net sale proceeds, which will decrease its investment in unconsolidated ventures.
−Removed: The Company continues to retain a 20 % equity interest in the remaining HCS Venture, which continues to operate home health, hospice, and outpatient therapy agencies in areas served by HCA Healthcare.
−Removed: Community Transactions
−Removed: During the period from January 1, 2020 through September 30, 2021, the Company terminated triple-net lease obligations on an aggregate of 33 communities, including through the acquisition of 27 formerly leased communities, it sold four owned communities, and it sold its ownership interest in its unconsolidated entry fee CCRC venture (the "CCRC Venture") with Healthpeak Properties, Inc.
−Removed: ("Healthpeak").
−Removed: On July 26, 2020, the Company entered into definitive agreements with Ventas, Inc.
−Removed: ("Ventas") to restructure its 120 community triple-net master lease arrangements.
−Removed: In addition, it conveyed to Ventas five communities and manages the communities following the closing.
−Removed: During the nine months ended September 30, 2021, the Company completed the sale of two owned communities for cash proceeds of $ 8.5 million, net of transaction costs, for which it recognized a net gain on sale of assets of $ 0.5 million.
−Removed: In addition to the conveyance of communities to Ventas, during the nine months ended September 30, 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.
−Removed: Three unencumbered communities ( one in the CCRCs segment and two in the Assisted Living and Memory Care segment) were classified as held for sale, resulting in $ 11.7 million being recorded as assets held for sale within the condensed consolidated balance sheet as of September 30, 2021.
−Removed: The closings of the sales of the communities are subject to the satisfaction of various closing conditions, including (where applicable) the receipt of regulatory approvals.
−Removed: There can be no assurance that the transactions will close or, if they do, when the actual closings will occur.
−Removed: Completed Dispositions of Entry Fee CCRCs by Unconsolidated Venture
−Removed: Prior to the January 31, 2020 closing of the Company’s sale of its ownership interest in the CCRC Venture, the Company and Healthpeak moved the remaining two entry fee CCRCs into a new unconsolidated entry fee CCRC venture on substantially the same terms as the CCRC Venture to accommodate the sale of such two communities.
−Removed: During the three months ended June 30, 2021, the new unconsolidated entry fee CCRC venture completed the sale of the two remaining entry fee CCRCs for cash proceeds of $ 14.0 million, net of associated mortgage debt repayments and transaction costs.
−Removed: Subsequent to the sale transaction, the new unconsolidated entry fee CCRC venture has no continuing operations.
−Removed: During the three months ended June 30, 2021, the Company received $ 5.4 million of cash distributions from the new unconsolidated entry fee CCRC venture and recognized $ 13.9 million of equity in earnings of unconsolidated ventures for the Company’s proportionate share of the net income of the new unconsolidated entry fee CCRC venture, which was primarily comprised of a gain on sale of assets for the sale of the two remaining entry fee CCRCs.
−Removed: During the three months ended September 30, 2021, the Company received $ 3.0 million of additional cash distributions from the new unconsolidated entry fee CCRC venture.
Fair Value Measurements
Marketable Securities
−Removed: As of September 30, 2021, marketable securities of $ 157.9 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.
−Removed: Investment in Unconsolidated Venture
−Removed: As of July 1, 2021, the Company recognized a $ 100.0 million asset within investment in unconsolidated ventures on its condensed consolidated balance sheet for the estimated fair value of its retained 20 % noncontrolling interest in the HCS Venture.
−Removed: The initial recognized amount of the Company’s 20 % equity interest in the HCS Venture was determined based upon a pro-rata share of the total enterprise value of the HCS Venture considering the $ 400.0 million purchase price paid by HCA Healthcare, as the Company's 20 % interest shares ratably in all of the benefits and losses expected to be generated by the HCS Venture.
−Removed: The fair value measurement is classified within Level 2 of the valuation hierarchy.
+Added: As of March 31, 2022 and December 31, 2021, marketable securities of $ 179.3 million and $ 182.4 million, respectively, are stated at fair value based on valuations provided by third-party pricing services and are classified within Level 2 of the valuation hierarchy.
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.
−Removed: The Company had outstanding long-term debt with a carrying amount of approximately $ 3.9 billion as of both September 30, 2021 and December 31, 2020.
−Removed: Fair value of the long-term debt approximates carrying amount in all periods presented.
+Added: The Company had outstanding long-term debt with a carrying amount of approximately $ 3.8 billion as of both March 31, 2022 and December 31, 2021.
+Added: Fair value of the long-term debt is approximately $ 3.6 billion as of March 31, 2022 and approximates the carrying amount as of December
The Company's fair value of long-term debt disclosure is classified within Level 2 of the valuation hierarchy.
−Removed: Asset Impairment Expense
−Removed: The following is a summary of asset impairment expense.
−Removed: Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: (in millions) 2021 2020 2021 2020
−Removed: Operating lease right-of-use assets $ — $ 3.3 $ 10.5 $ 75.6
−Removed: Property, plant and equipment and leasehold intangibles, net
−Removed: 0.6 4.9 2.9 19.6
−Removed: Investment in unconsolidated ventures — — — 1.5
−Removed: Asset impairment $ 0.6 $ 8.2 $ 13.4 $ 96.7
−Removed: Disaggregation of Revenue
−Removed: 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.
−Removed: Resident fee revenue by payor source and reportable segment is as follows:
−Removed: Three Months Ended September 30, 2021
−Removed: (in thousands) Independent Living Assisted Living and Memory Care CCRCs Total
−Removed: Private pay $ 119,137 $ 385,553 $ 53,366 $ 558,056
−Removed: Government reimbursement 447 17,068 15,252 32,767
−Removed: Other third-party payor programs — — 9,272 9,272
−Removed: Total resident fee revenue $ 119,584 $ 402,621 $ 77,890 $ 600,095
−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: Nine Months Ended September 30, 2021
−Removed: (in thousands) Independent Living Assisted Living and Memory Care CCRCs Health Care Services Total
−Removed: Private pay $ 354,996 $ 1,130,735 $ 159,105 $ 601 $ 1,645,437
−Removed: Government reimbursement 1,375 50,542 42,165 134,083 228,165
−Removed: Other third-party payor programs — — 25,341 39,480 64,821
−Removed: Total resident fee revenue $ 356,371 $ 1,181,277 $ 226,611 $ 174,164 $ 1,938,423
−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: Contract Balances
+Added: For the three months ended March 31, 2022, the Company generated 93.4 % of its resident fee revenue from private pay customers, 5.2 % from government reimbursement programs, and 1.4 % from other payor sources.
+Added: For the three months ended March 31, 2021, the Company generated 81.5 % of its resident fee revenue from private pay customers, 14.6 % from government reimbursement programs (primarily Medicare), and 3.9 % from other payor sources.
+Added: The sale of 80 % of the Company’s equity in its Health Care Services segment on July 1, 2021 reduced its revenue from government reimbursement programs.
+Added: Refer to Note 15 for disaggregation of revenue by reportable segment.
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.
1 unchanged sentence
Resident fee revenue for standalone or certain healthcare services is generally billed monthly in arrears.
−Removed: Additionally, non-refundable community fees are generally billed and collected in advance or upon move-in of a resident under
−Removed: the Company's independent living, assisted living, and memory care residency agreements.
+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.
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 $ 67.1 million and $ 138.3 million, including $ 25.0 million and $ 21.1 million of monthly resident fees billed and received in advance, as of September 30, 2021 and December 31, 2020, respectively.
−Removed: Such amount of total deferred revenue as of September 30, 2021 and December 31, 2020 also included $ 6.1 million and $ 87.5 million, respectively, received in the year ended December 31, 2020 under a temporary expansion of the Accelerated and Advance Payment Program administered by CMS.
−Removed: Refer to Note 3 for additional information on such program.
−Removed: Pursuant to the HCS Sale, $ 63.6 million of such obligations related to the Company's Health Care Services segment were retained by the HCS Venture and therefore derecognized from the Company's condensed consolidated balance sheet.
−Removed: For the nine months ended September 30, 2021 and 2020, the Company recognized $ 56.2 million and $ 59.3 million, respectively, of revenue that was included in the deferred revenue balance as of January 1, 2021 and 2020, respectively.
+Added: The Company had total deferred revenue (included within refundable fees and deferred revenue and other liabilities within the condensed consolidated balance sheets) of $ 73.6 million and $ 67.5 million, including $ 34.2 million and $ 27.5 million of monthly resident fees billed and received in advance, as of March 31, 2022 and December 31, 2021, respectively.
+Added: For the three months ended March 31, 2022 and 2021, the Company recognized $ 40.1 million and $ 30.8 million, respectively, of revenue that was included in the deferred revenue balance as of January 1, 2022 and 2021, respectively.
Property, Plant and Equipment and Leasehold Intangibles, Net
−Removed: As of September 30, 2021 and December 31, 2020, net property, plant and equipment and leasehold intangibles, which include assets under financing leases, consisted of the following:
−Removed: (in thousands) September 30, 2021 December 31, 2020
+Added: As of March 31, 2022 and December 31, 2021, net property, plant and equipment and leasehold intangibles, which include assets under financing leases, consisted of the following.
+Added: (in thousands) March 31, 2022 December 31, 2021
Land $ 502,610 $ 502,610
7 unchanged sentences
Property, plant and equipment and leasehold intangibles, net $ 4,874,044 $ 4,904,292
−Removed: Assets under financing leases and leasehold improvements includes $ 0.3 billion and $ 0.4 billion of financing lease right-of-use assets, net of accumulated amortization, as of September 30, 2021 and December 31, 2020, respectively.
+Added: Assets under financing leases and leasehold improvements includes $ 335.6 million and $ 332.3 million of financing lease right-of-use assets, net of accumulated amortization, as of March 31, 2022 and December 31, 2021, respectively.
Refer to Note 8 for further information on the Company's financing leases.
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: The Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $ 84.6 million and $ 87.8 million for the three months ended September 30, 2021 and 2020, respectively, and $ 252.0 million and $ 271.7 million for the nine months ended September 30, 2021 and 2020, respectively.
−Removed: The Company's Independent Living segment had a carrying amount of goodwill of $ 27.3 million as of both September 30, 2021 and December 31, 2020.
−Removed: The Company's Health Care Services segment had a carrying amount of goodwill of $ 126.8 million as of December 31, 2020, which was derecognized upon completion of the HCS Sale on July 1, 2021.
+Added: For the three months ended March 31, 2022 and 2021, the Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $ 85.7 million and $ 83.9 million, respectively.
Long-term debt consists of the following:
−Removed: (in thousands) September 30, 2021 December 31, 2020
−Removed: Fixed mortgage notes payable due 2022 through 2047;
−Removed: weighted average interest rate of 4.17 % and 4.18 % as of September 30, 2021 and December 31, 2020, respectively
+Added: (in thousands) March 31, 2022 December 31, 2021
+Added: Fixed rate mortgage notes payable due 2023 through 2047;
+Added: weighted average interest rate of 4.14 % as of both March 31, 2022 and December 31, 2021
$ 2,158,942 $ 2,164,115
−Removed: Variable mortgage notes payable due 2022 through 2030;
−Removed: weighted average interest rate of 2.43 % and 2.49 % as of September 30, 2021 and December 31, 2020, respectively
+Added: Variable rate mortgage notes payable due 2023 through 2030;
+Added: weighted average interest rate of 2.76 % and 2.44 % as of March 31, 2022 and December 31, 2021, respectively
1,472,438 1,476,943
−Removed: Other notes payable due 2021 to 2025;
−Removed: weighted average interest rate of 9.48 % and 8.98 % as of September 30, 2021 and December 31, 2020, respectively
+Added: Convertible notes payable due October 2026;
+Added: interest rate of 2.00 % as of both March 31, 2022 and December 31, 2021
230,000 230,000
−Removed: Debt discount and deferred financing costs, net ( 23,923 ) ( 27,500 )
+Added: Other notes payable due 2022, interest rate of 2.10 % as of March 31, 2022
+Added: Deferred financing costs, net ( 28,625 ) ( 29,846 )
Total long-term debt 3,848,535 3,841,212
1 unchanged sentence
Total long-term debt, less current portion $ 3,640,784 $ 3,778,087
−Removed: As of September 30, 2021, 98.3 %, or $ 3.8 billion, of the Company's total debt obligations represented non-recourse property-level mortgage financings.
−Removed: As of September 30, 2021, $ 70.6 million of letters of credit and no cash borrowings were outstanding under the Company's $ 80.0 million secured credit facility.
−Removed: The Company also had a separate secured letter of credit facility providing up to $ 15.0 million of letters of credit as of September 30, 2021 under which $ 13.6 million had been issued as of that date.
−Removed: Convertible Debt Offering
−Removed: On October 1, 2021, the Company issued $ 230.0 million principal amount of 2.00 % convertible senior notes due 2026 (the "Notes").
−Removed: The Company received net proceeds of $ 224.3 million at closing after the deduction of the initial purchasers' discount.
−Removed: The Company used $ 15.9 million of the net proceeds to pay the Company’s cost of the capped call transactions described below.
−Removed: Additionally, the Company used a portion of the net proceeds to repay a $ 45.0 million note payable and $ 29.2 million of mortgage debt and intends to use the remaining net proceeds for general corporate purposes, including refinancing or repaying maturing debt.
−Removed: The Notes were issued pursuant to, and are governed by, the Indenture dated as of October 1, 2021 by and between the Company and American Stock Transfer & Trust Company, LLC, as trustee.
−Removed: The Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Notes, and equal in right of payment to any of the Company’s indebtedness that is not so subordinated.
−Removed: The Notes are effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness;
−Removed: and structurally junior to all indebtedness and other liabilities (including trade payables) and any preferred equity of current or future subsidiaries of the Company.
−Removed: The Notes bear interest at 2.00 % per year, payable semi-annually in arrears in cash on April 15 and October 15 of each year, beginning on April 15, 2022.
−Removed: The Notes will mature on October 15, 2026, unless earlier converted, redeemed, or repurchased in accordance with their terms.
−Removed: Holders of the Notes may convert all or any portion of their Notes at their option at any time prior to the close of business on the business day immediately preceding July 15, 2026, only under the following circumstances:
−Removed: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2021 (and only during such calendar quarter), if the last reported sale price of the common stock of the Company for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;
−Removed: (2) during the five business day period after any ten consecutive trading day period (the "measurement period") in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the common stock of the Company and the conversion rate for the Notes on each such trading day;
−Removed: (3) if the Company calls any or all of the Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date, but only with respect to the Notes called (or deemed called) for redemption;
−Removed: or (4) upon the occurrence of specified corporate events.
−Removed: On or after July 15, 2026, holders may convert all or any portion of their Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date regardless of the foregoing conditions.
−Removed: Upon conversion, the Company will satisfy its conversion obligation by
−Removed: paying or delivering, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock at the Company’s election.
−Removed: The conversion rate for the Notes is initially 123.4568 shares of the Company’s common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $ 8.10 per share of common stock).
−Removed: The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest.
−Removed: In addition, following certain corporate events that occur prior to the maturity date or following the issuance of a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event or who elects to convert any Notes called (or deemed called) for redemption during the related redemption period in certain circumstances.
−Removed: The Company may not redeem the Notes prior to October 21, 2024.
−Removed: The Company may redeem for cash all or (subject to certain limitations) any portion of the Notes, at its option, on or after October 21, 2024 and prior to the 51 st scheduled trading day immediately preceding the maturity date if the last reported sale price of its common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
−Removed: No sinking fund is provided for the Notes.
−Removed: Capped Call Transactions
−Removed: In connection with the offering of the Notes, the Company entered into privately negotiated capped call transactions ("Capped Call Transactions") with each of Bank of America, N.A., Royal Bank of Canada, Wells Fargo Bank, National Association or their respective affiliates (the "Capped Call Counterparties").
−Removed: The Capped Call Transactions initially cover, subject to customary anti-dilution adjustments, the number of shares of the Company’s common stock that initially underlie the Notes and initially have an exercise price of $ 8.10 per share of common stock.
−Removed: The cap price of the Capped Call Transactions is initially approximately $ 9.90 per share of the Company’s common stock, representing a premium of 65 % above the last reported sale price of $ 6.00 per share of the Company’s common stock on September 28, 2021, and is subject to certain adjustments under the terms of the Capped Call Transactions.
−Removed: The Capped Call Transactions are expected generally to reduce or offset potential dilution to holders of the Company’s common stock upon conversion of the Notes and/or offset the potential cash payments that the Company could be required to make in excess of the principal amount of any converted Notes upon conversion thereof, with such reduction and/or offset subject to a cap based on the cap price.
−Removed: The Capped Call Transactions are separate transactions entered into by the Company with the Capped Call counterparties and are not part of the terms of the Notes.
−Removed: The Capped Call Transactions had a cost of $ 15.9 million, which was paid on October 1, 2021 from the proceeds of the Notes.
−Removed: The Company will separately account for Capped Call Transactions from the Notes and will recognize the cost as a reduction of additional paid-in capital in the three months ending December 31, 2021 as the Capped Call Transactions are indexed to the Company’s common stock.
+Added: As of March 31, 2022, 93.7 %, or $ 3.6 billion, of the Company's total debt obligations represented non-recourse property-level mortgage financings.
+Added: As of March 31, 2022, $ 72.6 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, 2022 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 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: 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, 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.
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.
2 unchanged sentences
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, 2021, the Company is in compliance with the financial covenants of its debt agreements.
−Removed: As of September 30, 2021, the Company operated 300 communities under long-term leases ( 234 operating leases and 66 financing leases).
+Added: As of March 31, 2022, the Company is in compliance with the financial covenants of its debt agreements.
+Added: As of March 31, 2022, the Company operated 298 communities under long-term leases ( 231 operating leases and 67 financing leases).
The substantial majority of the Company's lease arrangements are structured as master leases.
−Removed: Under a master
−Removed: lease, numerous communities are leased through an indivisible lease.
+Added: Under a master lease, numerous communities are leased through an indivisible lease.
The Company typically guarantees the performance and lease payment obligations of its subsidiary lessees under the master leases.
4 unchanged sentences
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.
−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 and maintain insurance coverage.
+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, 2021, the Company is in compliance with the financial covenants of its long-term leases.
+Added: As of March 31, 2022, the Company is in compliance with the financial covenants of its long-term leases.
+Added: Lease right-of-use assets are reviewed for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
+Added: For the three months ended March 31, 2022 and 2021, the Company recognized $ 8.6 million and $ 9.0 million, respectively, of non-cash impairment charges in its operating results for its operating lease right-of-use assets, primarily due to the COVID-19 pandemic and lower than expected operating performance at certain communities.
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: 2021 2020 2021 2020
Facility operating expense $ 1,523 $ 4,842
2 unchanged sentences
Operating lease expense adjustment (1)
−Removed: 6,273 117,322 16,263 132,276
Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements ( 1,490 ) ( 7,563 )
Operating net cash outflows from operating leases $ 49,904 $ 46,361
−Removed: (1) Represents the difference between the amount of cash operating lease payments and the amount of operating lease expense recognized in accordance with ASC 842, Leases .
−Removed: Operating net cash outflows from operating leases for the three and nine months ended September 30, 2020 include 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.
+Added: (1) Represents the difference between the amount of cash operating lease payments and the amount of operating lease expense.
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
Financing Leases (in thousands)
−Removed: 2021 2020 2021 2020
Depreciation and amortization $ 7,665 $ 7,630
6 unchanged sentences
Total net cash outflows from financing leases $ 14,341 $ 14,783
−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, 2021 are as follows (in thousands):
+Added: The aggregate amounts of future minimum lease payments, including community, office, and equipment leases recognized on the condensed consolidated balance sheet as of March 31, 2022 are as follows (in thousands).
Year Ending December 31, Operating Leases Financing Leases
−Removed: 2021 (three months) $ 50,822 $ 16,608
+Added: 2022 (nine months) $ 153,184 $ 51,412
2023 193,406 69,225
8 unchanged sentences
Investment in Unconsolidated Ventures
−Removed: As of September 30, 2021, the Company holds a 20 % equity interest, and HCA Healthcare owns an 80 % interest, in the HCS Venture, and the Company has determined the HCS Venture is a VIE.
+Added: As of March 31, 2022, the Company holds a 20 % equity interest, and affiliates of HCA Healthcare Inc.
+Added: own an 80 % interest, in the HCS Venture, and the Company has determined the HCS Venture is a VIE.
+Added: The HCS Venture operates home health, hospice, and outpatient therapy agencies in the United States.
The Company does not consolidate this VIE because it does not have the ability to control the activities that most significantly impact this VIE's economic performance.
The Company's interest in the HCS Venture is accounted for under the equity method of accounting.
−Removed: The carrying amount of the Company's investment in the unconsolidated venture and maximum exposure to loss as a result of the Company's ownership interest in the HCS Venture was $ 98.8 million as of September 30, 2021.
−Removed: As of September 30, 2021, the Company is not required to provide financial support, through a liquidity arrangement or otherwise, to its unconsolidated VIE.
−Removed: Refer to Note 4 for information on the formation of the HCS Venture.
+Added: The carrying amount of the Company's investment in the unconsolidated venture and maximum exposure to loss as a result of the Company's ownership interest in the HCS Venture was $ 57.2 million, which is included in investment in unconsolidated ventures on the accompanying unaudited condensed consolidated balance sheet as of March 31, 2022.
+Added: As of March 31, 2022, the Company is not required to provide financial support, through a liquidity arrangement or otherwise, to the HCS Venture.
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.
3 unchanged sentences
Accordingly, the Company is, in effect, self-insured for claims that are less than the deductible amounts and for claims or portions of claims that are not covered by such policies and/or exceed the policy limits.
−Removed: Similarly, the senior living and healthcare industries are continuously subject to scrutiny by governmental regulators, which could result in reviews, audits, investigations, enforcement activities or litigation related to regulatory compliance matters.
−Removed: In addition, as a result of the Company's participation in the Medicare and Medicaid programs, the Company is subject to various governmental reviews, audits and investigations, including but not limited to audits under various government programs, such as the Recovery Audit Contractors (RAC), Zone Program Integrity Contractors (ZPIC), and Unified Program Integrity Contractors (UPIC) programs.
−Removed: The costs to respond to and defend such reviews, audits, and investigations may be significant, and an adverse determination could result in citations, sanctions and other criminal or civil fines and penalties, the refund of overpayments, payment suspensions, termination of participation in Medicare and Medicaid programs, and/or damage to the Company's business reputation.
+Added: The senior living and healthcare industries are continuously subject to scrutiny by governmental regulators, which could result in reviews, audits, investigations, enforcement actions, or litigation related to regulatory compliance matters.
+Added: In addition, the Company is subject to various government reviews, audits, and investigations to verify compliance with Medicare and Medicaid programs and other applicable laws and regulations.
+Added: The Centers for Medicare & Medicaid Services ("CMS") has engaged third-party firms to review claims data to evaluate appropriateness of billings.
+Added: In addition to identifying overpayments, audit contractors can refer suspected violations to government authorities.
+Added: An adverse outcome of government scrutiny may result in citations, sanctions, other criminal or civil fines and penalties, the refund of overpayments, payment suspensions, termination of participation in Medicare and Medicaid programs, and damage to the Company’s business reputation.
+Added: The Company’s costs to respond to and defend any such audits, reviews, and investigations may be significant.
In June 2020, the Company and several current and former executive officers were named as defendants in a putative class action lawsuit alleging violations of the federal securities laws filed in the federal court for the Middle District of Tennessee.
1 unchanged sentence
The district court dismissed the lawsuit and entered judgment in favor of the defendants in September 2021, and the plaintiffs did not file an appeal.
−Removed: Between October 2020 and June 2021, alleged stockholders of the Company filed several stockholder derivative lawsuits in the federal courts for the Middle District of Tennessee and the District of Delaware, 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: Between October 2020 and June 2021, alleged stockholders of the Company filed several
+Added: stockholder derivative lawsuits in the federal courts for the Middle District of Tennessee and the District of Delaware, which was subsequently transferred to the Middle District of Tennessee.
+Added: The derivative lawsuits are currently pending and assert claims on behalf of the Company against certain current and former officers and directors for alleged breaches of duties owed to the Company.
The complaints refer to the securities lawsuit described above and incorporate substantively similar allegations.
Stock-Based Compensation
−Removed: Grants of restricted stock and restricted stock units under the Company's 2014 Omnibus Incentive Plan were as follows:
−Removed: (in thousands, except weighted average amounts) Restricted Stock Unit and Stock Award Grants Weighted Average Grant Date Fair Value Total Grant Date Fair Value
+Added: Grants of restricted stock units and stock awards under the Company's 2014 Omnibus Incentive Plan were as follows.
+Added: (in thousands, except weighted average amount) Restricted Stock Unit and Stock Award Grants Weighted Average Grant Date Fair Value Total Grant Date Fair Value
Three months ended March 31, 2022 2,862 $ 5.50 $ 15,743
−Removed: Three months ended June 30, 2021 20 $ 6.62 $ 130
−Removed: Three months ended September 30, 2021 3 $ 7.76 $ 22
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: For the three and nine months ended September 30, 2021 and 2020, potentially dilutive common stock equivalents include unvested restricted stock, restricted stock units, and warrants.
−Removed: Refer to Note 9 for information on the issuance of convertible notes on October 1, 2021.
−Removed: The following table summarizes the computation of basic and diluted earnings (loss) per share amounts presented in the condensed consolidated statement of operations:
−Removed: Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: (in thousands, except for per share amounts) 2021 2020 2021 2020
−Removed: Income attributable to common stockholders:
−Removed: Net income (loss)
−Removed: $ 174,282 $ ( 124,975 ) $ ( 17,588 ) $ 126,139
−Removed: Weighted average shares outstanding - basic 185,317 183,244 184,841 183,535
−Removed: Effect of dilutive securities 10,913 — — 133
−Removed: Weighted average shares outstanding - diluted 196,230 183,244 184,841 183,668
−Removed: Basic earnings (loss) per common share:
−Removed: Net income (loss) per share attributable to common stockholders $ 0.94 $ ( 0.68 ) $ ( 0.10 ) $ 0.69
−Removed: Diluted earnings (loss) per common share:
−Removed: Net income (loss) per share attributable to common stockholders $ 0.89 $ ( 0.68 ) $ ( 0.10 ) $ 0.69
−Removed: 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.
−Removed: The following potentially dilutive securities were excluded from the computation of diluted EPS:
−Removed: Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
+Added: During the three months ended March 31, 2022 and 2021, the Company reported a consolidated net loss.
+Added: As a result of the net loss reported for the periods, all unvested restricted stock, restricted stock units, and potential shares issuable under warrants and convertible senior notes were antidilutive for the periods and as such were not included in the computation of diluted weighted average shares outstanding.
+Added: The following potentially outstanding shares of common stock were excluded from the computation of diluted net income (loss) per share attributable to common stockholders because including the shares would have been antidilutive.
+Added: As of March 31,
(in millions) 2022 2021
−Removed: Non-performance-based restricted stock and restricted stock units 3.5 7.1 4.9 6.9
−Removed: Performance-based restricted stock and restricted stock units 0.3 1.9 0.3 1.8
+Added: Restricted stock and restricted stock units 5.7 6.6
Warrants 16.3 16.3
+Added: Convertible senior notes 38.3 —
Total 60.3 22.9
−Removed: (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.
−Removed: The difference between the Company's effective tax rate for the three and nine months ended September 30, 2021 and 2020 was primarily due to the HCS Sale in the three months ended September 30, 2021, and the tax impact of the multi-part transaction with Healthpeak in the nine months ended September 30, 2020.
−Removed: For the three months ended September 30, 2021 the impact represented the tax expense recorded on the gain on the HCS Sale, offset by a decrease in the valuation allowance that was a direct result of the sale.
−Removed: In the nine months ended September 30, 2021 and 2020, the Company recorded tax expense on the gain on the HCS Sale and sale of the Company's interest in the CCRC Venture respectively, offset by a decrease in the valuation allowance.
−Removed: In the nine months ended September 30, 2021, the tax gain from the HCS Sale was offset by operational losses, but in 2020 the tax gain for the sale of the Company's interest in the CCRC Venture was not offset by operational losses resulting in estimated taxable income through the nine months ended September 30, 2020.
−Removed: The Company recorded an aggregate deferred federal, state, and local tax expense of $ 81.0 million for the three months ended September 30, 2021 and an aggregate deferred federal, state, and local tax expense of $ 35.0 million for the nine months ended September 30, 2021.
−Removed: The expense included $ 104.3 million as a result of the gain on the HCS Sale, offset by a benefit of $ 69.3 million as a result of operating losses (exclusive of the HCS Sale) for the nine months ended September 30, 2021.
−Removed: The expense for the three months ended September 30, 2021 is offset by a reduction to the valuation allowance of $ 71.8 million.
−Removed: The tax expense for the nine months ended September 30, 2021 is offset by a reduction to the valuation allowance of $ 26.5 million.
−Removed: The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 27.4 million for the three months ended
−Removed: 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 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 $ 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 was offset by additional valuation allowance of $ 40.0 million.
−Removed: The tax expense for the nine months ended September 30, 2020 was offset by a reduction in valuation allowance of $ 39.5 million.
+Added: On July 26, 2020, the Company issued to Ventas, Inc.
+Added: ("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 .
+Added: The Warrant is exercisable at Ventas' option at any time and from time to time, in whole or in part, until December 31, 2025.
+Added: 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.
+Added: As of March 31, 2022, the maximum number of shares issuable upon conversion of convertible senior notes is 38.3 million (after giving effect to additional shares that would be issuable upon conversion in connection with the occurrence of certain corporate or other events).
+Added: The difference between the Company's effective tax rate for the three months ended March 31, 2022 and 2021 was due to the increase in the net deferred tax benefit recognized on operational losses and an increase in the tax benefit recognized on the vesting of restricted stock units and restricted stock awards due to an increase in the Company's stock price during the three months ended March 31, 2022.
+Added: The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 24.9 million for the three months ended March 31, 2022, which was offset by an increase to the valuation allowance of $ 22.6 million.
+Added: The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 25.2 million for the three months ended March 31, 2021, which was offset by additional valuation allowance of $ 25.5 million.
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, 2021 and December 31, 2020 was $ 354.5 million and $ 381.0 million, respectively.
−Removed: The decrease in the valuation allowance for the nine months ended September 30, 2021 is primarily the result of a $ 95.2 million reduction recorded as a result of the HCS Sale, offset by an increase in the valuation allowance of $ 68.7 million established against current operating losses during the nine months ended September 30, 2021.
−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 Company recorded interest charges related to its tax contingency reserve for cash tax positions for the three and nine months ended September 30, 2021 and 2020 which are included in income tax expense or benefit for the period.
−Removed: As of September 30, 2021, tax returns for years 2016 through 2019 are subject to future examination by tax authorities.
+Added: The Company's valuation allowance as of March 31, 2022 and December 31, 2021 was $ 390.6 million and $ 368.0 million, respectively.
+Added: The increase in the valuation allowance for the three months ended March 31, 2022 is the result of current operating losses during the three months ended March 31, 2022 and by the anticipated reversal of future tax liabilities offset by future tax deductions.
+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 Company recorded interest charges related to its tax contingency reserve for cash tax positions for the three months ended March 31, 2022 and 2021 which are included in income tax expense or benefit for the period.
+Added: As of March 31, 2022, tax returns for years 2018 through 2020 are subject to future examination by tax authorities.
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) 2022 2021
8 unchanged sentences
Net cash paid $ 39,956 $ 40,361
−Removed: Acquisition of communities from Healthpeak:
−Removed: Property, plant and equipment and leasehold intangibles, net $ — $ 286,734
−Removed: Operating lease right-of-use assets — ( 63,285 )
−Removed: Financing lease obligations — 129,196
−Removed: Operating lease obligations — 74,335
−Removed: Loss (gain) on debt modification and extinguishment, net — ( 19,731 )
−Removed: 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
−Removed: Proceeds from HCS Sale, net:
−Removed: Accounts receivable, net $ ( 57,582 ) $ —
−Removed: Property, plant and equipment and leasehold intangibles, net ( 1,806 ) —
−Removed: Operating lease right-of-use assets ( 8,145 ) —
−Removed: Investments in unconsolidated ventures 100,000 —
−Removed: Goodwill ( 126,810 ) —
−Removed: Prepaid expenses and other assets, net ( 26,409 ) —
−Removed: Trade accounts payable 1,387 —
−Removed: Accrued expenses 25,226 —
−Removed: Refundable fees and deferred revenue 57,314 —
−Removed: Operating lease obligations 8,145 —
−Removed: Other liabilities 11,135 —
−Removed: Loss (gain) on sale of assets, net ( 288,233 ) —
−Removed: Net cash received $ ( 305,778 ) $ —
−Removed: Acquisition of other assets, net of related payables and cash received:
−Removed: Property, plant and equipment and leasehold intangibles, net $ — $ 684
−Removed: Financing lease obligations — 64,260
−Removed: Net cash paid $ — $ 64,944
−Removed: Proceeds from sale of CCRC Venture, net:
−Removed: Investments in unconsolidated ventures $ — $ ( 14,848 )
−Removed: Current portion of long-term debt — 34,706
−Removed: Other liabilities — 60,748
−Removed: Loss (gain) on sale of assets, net — ( 369,831 )
−Removed: Net cash received $ — $ ( 289,225 )
−Removed: Proceeds from sale of other assets, net:
−Removed: Prepaid expenses and other assets, net $ — $ ( 1,318 )
−Removed: Assets held for sale ( 8,040 ) ( 34,348 )
−Removed: Property, plant and equipment and leasehold intangibles, net ( 568 ) ( 938 )
−Removed: Other liabilities ( 22 ) ( 1,086 )
−Removed: Loss (gain) on sale of assets, net ( 1,175 ) ( 4,188 )
−Removed: Net cash received $ ( 9,805 ) $ ( 41,878 )
Supplemental Schedule of Non-cash Operating, Investing, and Financing Activities:
−Removed: Assets designated as held for sale:
−Removed: Assets held for sale $ 3,612 $ —
−Removed: Property, plant and equipment and leasehold intangibles, net ( 3,612 ) —
−Removed: Healthpeak master lease modification:
−Removed: Property, plant and equipment and leasehold intangibles, net $ — $ ( 57,462 )
−Removed: Operating lease right-of-use assets — 88,044
−Removed: Financing lease obligations — 70,874
−Removed: Operating lease obligations — ( 101,456 )
−Removed: Other non-cash lease transactions, net:
+Added: Non-cash lease transactions, net:
Property, plant and equipment and leasehold intangibles, net $ 10,997 $ —
2 unchanged sentences
Operating lease obligations ( 757 ) ( 16,721 )
−Removed: Other liabilities — ( 107 )
−Removed: 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.
+Added: Restricted cash consists principally of deposits as security for self-insured retention risk under workers' compensation programs and property insurance programs, escrow deposits for real estate taxes, property insurance, and capital expenditures, and debt service reserve accounts required by certain lenders under mortgage debt agreements.
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, 2021 December 31, 2020
+Added: (in thousands) March 31, 2022 December 31, 2021
Reconciliation of cash, cash equivalents, and restricted cash:
4 unchanged sentences
Segment Information
−Removed: As of September 30, 2021, the Company has four reportable segments:
+Added: As of March 31, 2022, the Company has three reportable segments:
Independent Living;
Assisted Living and Memory Care;
−Removed: and Management Services.
Operating segments are defined as components of an enterprise that engage in business activities from which it may earn revenues and incur expenses;
2 unchanged sentences
Prior to July 1, 2021, the Company had an additional reportable segment, Health Care Services.
−Removed: On July 1, 2021, the Company sold 80 % of its equity in its Health Care Services segment, as described in Note 4.
+Added: On July 1, 2021, the Company sold 80 % of its equity in its Health Care Services segment.
For periods beginning July 1, 2021, the results and financial position of its Health Care Services segment were deconsolidated from the Company's consolidated financial statements and its 20 % equity interest in the HCS Venture is accounted for under the equity method of accounting as of that date.
3 unchanged sentences
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 living for mid-acuity and frail elderly residents.
−Removed: The Company's assisted living and memory care communities include both freestanding, multi-story communities, as well as
−Removed: smaller 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 the Company's 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.
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.
−Removed: 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.
−Removed: Management Services.
−Removed: The Company's Management Services segment includes communities operated by the Company pursuant to management agreements.
−Removed: In some of the cases, the ownership of the community is fully held by third parties and, in other cases, the community is owned in a venture structure in which the Company has an ownership interest.
−Removed: 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.
+Added: Most of the Company's CCRCs have independent living, assisted living, memory care, and skilled nursing available on one campus.
+Added: All Other includes communities operated by the Company pursuant to management agreements.
+Added: Under the management agreements for these communities, the Company receives management fees as well as reimbursement of expenses it incurs on behalf of the owners.
Health Care Services .
−Removed: The Company's Health Care Services segment included the home health, hospice, and outpatient therapy services provided to residents of many of its communities and to seniors living outside its communities.
+Added: The Company's former Health Care Services segment included 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 did 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.
−Removed: The following table sets forth selected segment financial data:
+Added: The following tables set forth selected segment financial data.
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
(in thousands) 2022 2021
5 unchanged sentences
80,456 73,463
−Removed: Management Services (3)
−Removed: 41,470 96,444 163,836 435,463
+Added: All Other 40,470 74,360
Health Care Services (1)(2)
−Removed: — 95,795 177,269 297,779
Total revenue and other operating income $ 677,820 $ 749,445
+Added: Three Months Ended
+Added: (in thousands) 2022 2021
Segment operating income:
2 unchanged sentences
CCRCs 10,039 7,608
−Removed: Management Services 3,621 5,669 17,185 120,460
+Added: All Other 3,329 8,566
Health Care Services — 2,403
1 unchanged sentence
General and administrative expense (including non-cash stock-based compensation expense) 45,126 49,943
−Removed: 43,812 54,138 146,155 161,251
Facility operating lease expense 41,564 44,418
1 unchanged sentence
Asset impairment 9,075 10,677
−Removed: Independent Living 150 — 2,034 31,317
−Removed: Assisted Living and Memory Care 475 8,213 10,596 51,301
−Removed: CCRCs 14 — 764 12,173
−Removed: Corporate and Management Services — — — 1,938
Income (loss) from operations $ ( 53,534 ) $ ( 61,590 )
−Removed: (in thousands) September 30, 2021 December 31, 2020
+Added: (in thousands) March 31, 2022 December 31, 2021
Total assets:
Independent Living (4)
+Added: $ 1,324,425 $ 1,349,341
Assisted Living and Memory Care 3,573,911 3,601,144
CCRCs 686,480 693,386
−Removed: Corporate and Management Services 918,569 723,010
−Removed: Health Care Services — 233,178
+Added: Corporate and All Other 710,161 766,596
Total assets $ 6,294,977 $ 6,410,467
(1) All revenue and other operating income is earned from external third parties in the United States.
−Removed: (2) Includes 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: (2) Includes other operating income recognized for the credits or grants pursuant to the employee retention credit and other government sources.
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.
1 unchanged sentence
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
(in thousands) 2022 2021
+Added: Other operating income:
Independent Living $ 2 $ 1,364
3 unchanged sentences
Total other operating income $ 376 $ 10,735
−Removed: (3) Management services segment revenue includes management fees and reimbursements of costs incurred on behalf of managed communities.
(3) 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.
+Added: (4) The Company's Independent Living segment had a carrying amount of goodwill of $ 27.3 million as of both March 31, 2022 and December 31, 2021.
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.