What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-06 · 104 added, 60 removed, 431 unchanged (28% of the section changed)

35 unchanged sentences

Total liabilities 5,649,729 5,710,844

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized at March 31, 2022 and December 31, 2021;

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized at June 30, 2022 and December 31, 2021;

no shares issued and outstanding

Common stock, $ 0.01 par value, 400,000,000 shares authorized at March 31, 2022 and December 31, 2021;

Common stock, $ 0.01 par value, 400,000,000 shares authorized at June 30, 2022 and December 31, 2021;

197,783,147 and 197,485,318 shares issued and 187,255,622 and 186,957,793 shares outstanding (including 483,299 and 1,549,059 unvested restricted shares), respectively

1 unchanged sentence

Treasury stock, at cost;

10,527,525 shares at March 31, 2022 and December 31, 2021

10,527,525 shares at June 30, 2022 and December 31, 2021

( 102,774 ) ( 102,774 )

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Resident fees $ 640,388 $ 673,978 $ 1,277,362 $ 1,338,328

36 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Total equity, balance at beginning of period $ 599,279 $ 695,107 $ 699,623 $ 802,729

34 unchanged sentences

(Unaudited, in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows from Operating Activities

27 unchanged sentences

Capital expenditures, net of related payables ( 96,851 ) ( 79,538 )

Acquisition of assets ( 6,004 ) —

Investment in unconsolidated ventures ( 167 ) ( 5,359 )

15 unchanged sentences

Brookdale Senior Living Inc.

("Brookdale" or the "Company") is an operator of 678 senior living communities throughout the United States.

together with its consolidated subsidiaries ("Brookdale" or the "Company") is an operator of 674 senior living communities throughout the United States.

The Company is committed to its mission of enriching the lives of the people it serves with compassion, respect, excellence, and integrity.

1 unchanged sentence

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.

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.

As of June 30, 2022, the Company owned 346 communities, representing a majority of the Company's consolidated community portfolio, leased 295 communities, and managed 33 communities.

On July 1, 2021, the Company sold 80 % of its equity in its Health Care Services segment.

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.

The accompanying unaudited condensed consolidated financial statements include the results of operations and cash flows of the Health Care Services segment for the six months ended June 30, 2021.

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.

43 unchanged sentences

and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or the Company's response efforts.

Employee Retention Credit.

The Company was eligible to claim the employee retention credit for certain of its associates under the Coronavirus Aid, Relief, and Economic Security Act of 2020 ("CARES Act").

The Company recognized $ 0.9 million and $ 9.9 million for the three and six months ended June 30, 2021, respectively, of employee retention credits on wages paid from March 12, 2020 to December 31, 2020 within other operating income, for which the Company has received $ 4.6 million in cash as of June 30, 2022.

The credit was modified and extended by subsequent legislation for wages paid from January 1, 2021 through December 31, 2021.

During the three and six months ended June 30, 2022, the Company recognized $ 4.7 million of employee retention credits on wages paid in 2021 within other operating income based upon its current estimates.

The Company has a receivable for the remaining $ 10.1 million included within prepaid expenses and other current assets, net on the condensed consolidated balance sheet as of June 30, 2022.

Phase 4 Provider Relief Fund Grants .

During the three months ended December 31, 2021, the Company applied for the Phase 4 general distribution from the Public Health and Social Services Emergency Fund ("Provider Relief Fund") administered by the U.S.

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.

The Company accepted approximately

$ 60.0 million of Phase 4 grants on August 5, 2022.

The Company has not recognized any Phase 4 grant amounts in income for the three or six months ended June 30, 2022.

Fair Value Measurements

Marketable Securities

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.

As of June 30, 2022 and December 31, 2021, marketable securities of $ 165.5 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.

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.

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 had outstanding long-term debt with a carrying amount of approximately $ 3.8 billion as of both June 30, 2022 and December 31, 2021.

Fair value of the long-term debt is approximately $ 3.4 billion as of June 30, 2022 and approximates the carrying amount as of December 31, 2021.

The Company's fair value of long-term debt disclosure is classified within Level 2 of the valuation hierarchy.

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.

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.

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.

Resident fee revenue by payor source is as follows.

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Private pay 93.6 % 81.0 % 93.5 % 81.2 %

Government reimbursement 5.1 % 14.6 % 5.1 % 14.6 %

Other third-party payor programs 1.3 % 4.4 % 1.4 % 4.2 %

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.

5 unchanged sentences

Amounts of revenue that are collected from residents in advance are recognized as deferred revenue until the performance obligations are satisfied.

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.

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.

The Company had total deferred revenue (included within refundable fees and deferred revenue and other liabilities within the condensed consolidated balance sheets) of $ 71.8 million and $ 67.5 million, including $ 30.9 million and $ 27.5 million of monthly resident fees billed and received in advance, as of June 30, 2022 and December 31, 2021, respectively.

For the six months ended June 30, 2022 and 2021, the Company recognized $ 48.6 million and $ 46.2 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

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.

(in thousands) March 31, 2022 December 31, 2021

As of June 30, 2022 and December 31, 2021, net property, plant and equipment and leasehold intangibles, which include assets under financing leases, consisted of the following.

(in thousands) June 30, 2022 December 31, 2021

Land $ 508,210 $ 502,610

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Property, plant and equipment and leasehold intangibles, net $ 4,839,643 $ 4,904,292

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.

Assets under financing leases and leasehold improvements includes $ 315.4 million and $ 332.3 million of financing lease right-of-use assets, net of accumulated amortization, as of June 30, 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.

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.

The Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $ 86.6 million and $ 83.6 million for the three months ended June 30, 2022 and 2021, respectively, and $ 172.3 million and $ 167.5 million for the six months ended June 30, 2022 and 2021, respectively.

The Company recognized $ 1.6 million and $ 0.6 million for the three months ended June 30, 2022 and 2021, respectively, and $ 2.1 million and $ 2.3 million for the six months ended June 30, 2022 and 2021, respectively, of non-cash impairment charges in its operating results for its property, plant and equipment and leasehold intangibles assets, primarily due to property damage at certain communities and decreased occupancy and future cash flow estimates at certain communities as a result of the continuing impacts of the COVID-19 pandemic.

Long-term debt consists of the following.

(in thousands) March 31, 2022 December 31, 2021

(in thousands) June 30, 2022 December 31, 2021

Fixed rate mortgage notes payable due 2023 through 2047;

weighted average interest rate of 4.14 % as of both March 31, 2022 and December 31, 2021

weighted average interest rate of 4.14 % as of both June 30, 2022 and December 31, 2021

$ 2,153,956 $ 2,164,115

Variable rate mortgage notes payable due 2023 through 2030;

weighted average interest rate of 2.76 % and 2.44 % as of March 31, 2022 and December 31, 2021, respectively

weighted average interest rate of 4.04 % and 2.44 % as of June 30, 2022 and December 31, 2021, respectively

1,467,840 1,476,943

Convertible notes payable due October 2026;

interest rate of 2.00 % as of both March 31, 2022 and December 31, 2021

interest rate of 2.00 % as of both June 30, 2022 and December 31, 2021

230,000 230,000

Other notes payable due 2022, interest rate of 2.10 % as of March 31, 2022

Other notes payable due 2022, interest rate of 2.10 % as of June 30, 2022

Deferred financing costs, net ( 27,241 ) ( 29,846 )

2 unchanged sentences

Total long-term debt, less current portion $ 3,565,819 $ 3,778,087

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.

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.

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.

As of June 30, 2022, 93.8 %, or $ 3.6 billion, of the Company's total debt obligations represented non-recourse property-level mortgage financings.

As of June 30, 2022, $ 72.6 million of letters of credit and no cash borrowings were outstanding under the Company's $ 80.0 million secured credit facility.

The Company also had a separate secured letter of credit facility providing up to $ 15.0 million of letters of credit as of June 30, 2022 under which $ 13.9 million had been issued as of that date.

Financial Covenants

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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.

As of March 31, 2022, the Company is in compliance with the financial covenants of its debt agreements.

As of March 31, 2022, the Company operated 298 communities under long-term leases ( 231 operating leases and 67 financing leases).

As of June 30, 2022, the Company is in compliance with the financial covenants of its debt agreements.

As of June 30, 2022, the Company operated 295 communities under long-term leases ( 230 operating leases and 65 financing leases).

The substantial majority of the Company's lease arrangements are structured as master leases.

6 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.

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.

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.

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.

As of March 31, 2022, the Company is in compliance with the financial covenants of its long-term leases.

As of June 30, 2022, the Company is in compliance with the financial covenants of its long-term leases.

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.

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.

The Company recognized $ 1.0 million and $ 1.5 million for the three months ended June 30, 2022 and 2021, respectively, and $ 9.6 million and $ 10.5 million for the six months ended June 30, 2022 and 2021, respectively, of non-cash impairment charges in its operating results for its operating lease right-of-use assets, primarily due to decreased occupancy and future cash flow estimates at certain communities as a result of the continuing impacts of the COVID-19 pandemic.

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

June 30, Six Months Ended

Operating Leases (in thousands)

2022 2021 2022 2021

Facility operating expense $ 1,561 $ 4,520 $ 3,084 $ 9,362

2 unchanged sentences

Operating lease expense adjustment (1)

8,308 5,326 16,615 9,990

Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements ( 3,367 ) ( 7,943 ) ( 4,857 ) ( 15,506 )

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

Financing Leases (in thousands)

2022 2021 2022 2021

Depreciation and amortization $ 7,607 $ 7,594 $ 15,273 $ 15,224

6 unchanged sentences

Total net cash outflows from financing leases $ 13,834 $ 14,299 $ 28,175 $ 29,082

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).

The aggregate amounts of future minimum lease payments, including community, office, and equipment leases recognized on the condensed consolidated balance sheet as of June 30, 2022 are as follows (in thousands).

Year Ending December 31, Operating Leases Financing Leases

2022 (nine months) $ 153,184 $ 51,412

2022 (six months) $ 102,321 $ 34,171

2023 209,006 69,401

8 unchanged sentences

Investment in Unconsolidated Ventures

As of March 31, 2022, the Company holds a 20 % equity interest, and affiliates of HCA Healthcare Inc.

As of June 30, 2022, the Company holds a 20 % equity interest, and affiliates of HCA Healthcare Inc.

own an 80 % interest, in the HCS Venture, and the Company has determined the HCS Venture is a VIE.

The HCS Venture operates home health, hospice, and outpatient therapy agencies in the United States.

The HCS Venture operates home health and hospice 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.

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.

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 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 $ 54.3 million, which is included in investment in unconsolidated ventures on the accompanying unaudited condensed consolidated balance sheet as of June 30, 2022.

As of June 30, 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.

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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.

The lawsuit asserted that the defendants made material misstatements and omissions concerning the Company's business, operational and compliance policies that caused the Company's stock price to be artificially inflated between August 2016 and April 2020.

The lawsuit asserted that the defendants made material misstatements and omissions concerning the Company's business, operational and compliance policies, compliance with applicable regulations and statutes, and staffing practices that caused the Company's stock price to be artificially inflated between August 2016 and April 2020.

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.

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, which was subsequently transferred to the Middle District of Tennessee.

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, which was subsequently transferred to the Middle District of Tennessee.

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.

The complaints incorporate substantively similar allegations to the securities lawsuit described above.

Stock-Based Compensation

Grants of restricted stock units and stock awards under the Company's 2014 Omnibus Incentive Plan were as follows.

(in thousands, except weighted average amount) Restricted Stock Unit and Stock Award Grants Weighted Average Grant Date Fair Value Total Grant Date Fair Value

(in thousands, except weighted average amounts) 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

Three months ended June 30, 2022 26 $ 6.40 $ 166

Earnings Per Share

During the three months ended March 31, 2022 and 2021, the Company reported a consolidated net loss.

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.

During the three and six months ended June 30, 2022 and 2021, the Company reported consolidated net losses.

As a result of the net losses 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.

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.

As of March 31,

As of June 30,

(in millions) 2022 2021

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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.

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).

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.

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.

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.

As of June 30, 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).

The difference between the Company's effective tax rate for the three months ended June 30, 2022 and 2021 was due to the increase in the net deferred tax expense resulting from a valuation allowance recorded in excess of the benefit recorded on operational losses for the three months ended June 30, 2022.

The difference between the Company's effective tax rate for the six months ended June 30, 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.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 20.6 million for the three months ended June 30, 2022, which was offset by an increase to the valuation allowance of $ 21.4 million.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 45.5 million for the six months ended June 30, 2022, which was offset by an increase to the valuation allowance of $ 44.0 million.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 20.8 million for the three months ended June 30, 2021, which was offset by an increase to the valuation allowance of $ 19.8 million.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 46.0 million for the six months ended June 30, 2021, which was offset by an increase to the valuation allowance of $ 45.3 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.

The Company's valuation allowance as of March 31, 2022 and December 31, 2021 was $ 390.6 million and $ 368.0 million, respectively.

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.

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.

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.

As of March 31, 2022, tax returns for years 2018 through 2020 are subject to future examination by tax authorities.

The Company's valuation allowance as of June 30, 2022 and December 31, 2021 was $ 412.0 million and $ 368.0 million, respectively.

The increase in the valuation allowance for the six months ended June 30, 2022 is the result of current operating losses during the six months ended June 30, 2022 and by the anticipated reversal of future tax liabilities offset by future tax deductions.

The increase in the valuation allowance for the six months ended June 30, 2021 is the result of current operating losses during the six months ended June 30, 2021.

The Company recorded interest charges related to its tax contingency reserve for cash tax positions for the three and six months ended June 30, 2022 and 2021 which are included in income tax expense or benefit for the period.

As of June 30, 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

Three Months Ended

During the period from January 1, 2021 through June 30, 2022, the Company disposed of five owned communities and the Company's triple-net lease obligations on six communities were terminated (including through the acquisition of one formerly leased community).

During the six months ended June 30, 2022, the Company completed the sale of two owned communities for cash proceeds of $ 4.4 million, net of transaction costs, and recognized a net gain on sale of assets of $ 0.7 million for these sales.

During the six months ended June 30, 2021, the Company completed the sale of two owned communities for cash proceeds of $ 8.5 million, net of transaction costs, and recognized a net gain on sale of assets of $ 0.5 million for these sales.

Six Months Ended

(in thousands) 2022 2021

8 unchanged sentences

Net cash paid $ 96,851 $ 79,538

Proceeds from sale of assets, net:

Prepaid expenses and other assets, net $ ( 1,264 ) $ —

Assets held for sale ( 3,668 ) ( 8,040 )

Property, plant and equipment and leasehold intangibles, net — ( 568 )

Other liabilities ( 140 ) ( 5 )

Loss (gain) on sale of assets, net ( 667 ) ( 1,033 )

Net cash received $ ( 5,739 ) $ ( 9,646 )

Supplemental Schedule of Non-cash Operating, Investing, and Financing Activities:

6 unchanged sentences

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.

(in thousands) March 31, 2022 December 31, 2021

(in thousands) June 30, 2022 December 31, 2021

Reconciliation of cash, cash equivalents, and restricted cash:

4 unchanged sentences

Segment Information

As of March 31, 2022, the Company has three reportable segments:

As of June 30, 2022, the Company has three reportable segments:

Independent Living;

22 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands) 2022 2021 2022 2021

7 unchanged sentences

Health Care Services (1)(2)

— 87,835 — 177,269

Total revenue and other operating income $ 689,516 $ 723,292 $ 1,367,336 $ 1,472,737

Three Months Ended

June 30, Six Months Ended

(in thousands) 2022 2021 2022 2021

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Income (loss) from operations $ ( 34,048 ) $ ( 52,495 ) $ ( 87,582 ) $ ( 114,085 )

(in thousands) March 31, 2022 December 31, 2021

(in thousands) June 30, 2022 December 31, 2021

Total assets:

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands) 2022 2021 2022 2021

6 unchanged sentences

(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.

(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.

(4) The Company's Independent Living segment had a carrying amount of goodwill of $ 27.3 million as of both June 30, 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.

What changed 10-Q

Item 1. Financial Statements