What changed in this filing

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Item 1. Financial Statements

2023-11-07 compared with 2023-08-08 · 90 added, 80 removed, 473 unchanged (26% of the section changed)

3 unchanged sentences

(In thousands, except stock amounts)

September 30,

2023 December 31,

5 unchanged sentences

Accounts receivable, net 47,522 55,761

Assets held for sale 12,675 —

Prepaid expenses and other current assets, net 94,536 106,067

22 unchanged sentences

Total liabilities 5,335,730 5,352,909

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized at June 30, 2023 and December 31, 2022;

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized at September 30, 2023 and December 31, 2022;

no shares issued and outstanding

Common stock, $ 0.01 par value, 400,000,000 shares authorized at June 30, 2023 and December 31, 2022;

Common stock, $ 0.01 par value, 400,000,000 shares authorized at September 30, 2023 and December 31, 2022;

198,767,716 and 197,776,991 shares issued and 188,240,191 and 187,249,466 shares outstanding (including 2,061 and 422,542 unvested restricted shares), respectively

1 unchanged sentence

Treasury stock, at cost;

10,527,525 shares at June 30, 2023 and December 31, 2022

10,527,525 shares at September 30, 2023 and December 31, 2022

( 102,774 ) ( 102,774 )

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

38 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

21 unchanged sentences

Net income (loss) attributable to noncontrolling interest ( 15 ) ( 15 ) ( 45 ) 101

Noncontrolling interest distribution — ( 760 ) — ( 760 )

Balance at end of period $ 1,503 $ 1,562 $ 1,503 $ 1,562

10 unchanged sentences

(Unaudited, in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows from Operating Activities

38 unchanged sentences

Payments of employee taxes for withheld shares ( 1,880 ) ( 4,282 )

Other — ( 760 )

Net cash provided by (used in) financing activities ( 69,154 ) ( 37,847 )

10 unchanged sentences

The Company operates and manages independent living, assisted living, memory care, and continuing care retirement communities ("CCRCs").

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 June 30, 2023, the Company owned 346 communities, representing a majority of the Company's community portfolio, leased 295 communities, and managed 31 communities.

The Company's senior living communities and its comprehensive network help to provide seniors with care, connection, and services in an environment that feels like home.

As of September 30, 2023, the Company owned 346 communities, representing a majority of the Company's community portfolio, leased 295 communities, and managed 31 communities.

Summary of Significant Accounting Policies

19 unchanged sentences

Marketable Securities

As of June 30, 2023 and December 31, 2022, marketable securities of $ 96.2 million and $ 48.7 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 September 30, 2023 and December 31, 2022, marketable securities of $ 66.2 million and $ 48.7 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.

Interest Rate Derivatives

3 unchanged sentences

The Company considers the credit risk of its counterparties when evaluating the fair value of its derivatives.

The following table summarizes the Company's London Interbank Offer Rate ("LIBOR") and Secured Overnight Financing Rate ("SOFR") interest rate cap instruments as of June 30, 2023.

The following table summarizes the Company's Secured Overnight Financing Rate ("SOFR") interest rate cap instruments as of September 30, 2023.

($ in thousands)

2 unchanged sentences

Weighted average remaining term 1.0 year

Estimated asset fair value (included in other assets, net) at June 30, 2023 $ 13,416

Estimated asset fair value (included in other assets, net) at September 30, 2023 $ 14,826

Estimated asset fair value (included in other assets, net) at December 31, 2022 $ 10,599

The following table summarizes the Company's SOFR interest rate swap instrument as of June 30, 2023.

The following table summarizes the Company's SOFR interest rate swap instrument as of September 30, 2023.

($ in thousands)

2 unchanged sentences

Remaining term 0.6 years

Estimated asset fair value (included in other assets, net) at June 30, 2023 $ 4,148

Estimated asset fair value (included in other assets, net) at September 30, 2023 $ 3,488

Estimated asset fair value (included in other assets, net) at December 31, 2022 $ 4,834

The Company's remaining LIBOR interest rate cap instruments were modified to reference SOFR rather than LIBOR prospectively after the discontinuance of LIBOR in July 2023.

Subsequent to the transition, the Company's SOFR interest rate cap instruments had an aggregate notional amount of $ 1.2 billion and a weighted average fixed cap rate of 4.29 %.

Long-term debt

1 unchanged sentence

The Company estimates the fair value of its convertible senior notes based on valuations provided by third-party pricing services.

The Company had outstanding long-term debt with a carrying amount of approximately $ 3.8 billion and $ 3.9 billion as of June 30, 2023 and December 31, 2022, respectively.

Fair value of the long-term debt is approximately $ 3.4 billion as of both June 30, 2023 and December 31, 2022.

The Company had outstanding long-term debt with a carrying amount of approximately $ 3.8 billion and $ 3.9 billion as of September 30, 2023 and December 31, 2022, respectively.

Fair value of the long-term debt is approximately $ 3.4 billion as of both September 30, 2023 and December 31, 2022.

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

1 unchanged sentence

Resident fee revenue by payor source is as follows.

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

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

8 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 $ 62.7 million and $ 67.3 million, including $ 34.5 million and $ 25.2 million of monthly resident fees billed and received in advance, as of June 30, 2023 and December 31, 2022, respectively.

For the six months ended June 30, 2023 and 2022, the Company recognized $ 44.9 million and $ 48.6 million, respectively, of revenue that was included in the deferred revenue balance as of January 1, 2023 and 2022, respectively.

The Company had total deferred revenue (included within refundable fees and deferred revenue and other liabilities within the condensed consolidated balance sheets) of $ 57.9 million and $ 67.3 million, including $ 31.6 million and $ 25.2 million of monthly resident fees billed and received in advance, as of September 30, 2023 and December 31, 2022, respectively.

For the nine months ended September 30, 2023 and 2022, the Company recognized $ 49.1 million and $ 53.1 million, respectively, of revenue that was included in the deferred revenue balance as of January 1, 2023 and 2022, respectively.

Property, Plant and Equipment and Leasehold Intangibles, Net

As of June 30, 2023 and December 31, 2022, net property, plant and equipment and leasehold intangibles, which include assets under financing leases, consisted of the following.

(in thousands) June 30, 2023 December 31, 2022

As of September 30, 2023 and December 31, 2022, net property, plant and equipment and leasehold intangibles, which include assets under financing leases, consisted of the following.

(in thousands) September 30, 2023 December 31, 2022

Land $ 502,084 $ 506,968

7 unchanged sentences

Property, plant and equipment and leasehold intangibles, net $ 4,372,072 $ 4,535,702

Assets under financing leases and leasehold improvements includes $ 31.0 million and $ 98.4 million of financing lease right-of-use assets, net of accumulated amortization, as of June 30, 2023 and December 31, 2022, respectively.

Assets under financing leases and leasehold improvements includes $ 29.9 million and $ 98.4 million of financing lease right-of-use assets, net of accumulated amortization, as of September 30, 2023 and December 31, 2022, respectively.

Refer to Note 7 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.

The Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $ 84.4 million and $ 86.6 million for the three months ended June 30, 2023 and 2022, respectively, and $ 169.4 million and $ 172.3 million for the six months ended June 30, 2023 and 2022, respectively.

The Company recognized $ 0.5 million for the three and six months ended June 30, 2023 of non-cash impairment charges in its

operating results for its property, plant and equipment and leasehold intangibles assets, primarily due to property damage sustained at certain communities.

The Company recognized $ 1.6 million and $ 2.1 million for the three and six months ended June 30, 2022, 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 sustained at certain communities and decreased occupancy and future cash flow estimates at certain communities as a result of the continued impacts of the COVID-19 pandemic.

The Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $ 85.9 million and $ 86.9 million for the three months ended September 30, 2023 and 2022, respectively, and $ 255.3 million and $ 259.2 million for the nine months ended September 30, 2023 and 2022,

respectively.

The Company recognized $ 5.3 million and $ 5.8 million for the three and nine months ended September 30, 2023, respectively of non-cash impairment charges in its operating results for its property, plant and equipment and leasehold intangibles assets, primarily due to the potential disposition of up to five underperforming communities.

The Company recognized $ 3.8 million and $ 5.9 million for the three and nine months ended September 30, 2022, 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 sustained at certain communities and decreased occupancy and future cash flow estimates at certain communities as a result of the continued impacts of the COVID-19 pandemic.

Long-term debt consists of the following.

(in thousands) June 30, 2023 December 31, 2022

(in thousands) September 30, 2023 December 31, 2022

Fixed rate mortgage notes payable due 2024 through 2047;

weighted average interest rate of 4.14 % as of both June 30, 2023 and December 31, 2022

weighted average interest rate of 4.14 % as of both September 30, 2023 and December 31, 2022

$ 2,040,563 $ 2,055,867

Variable rate mortgage notes payable due 2025 through 2030;

weighted average interest rate of 7.50 % and 6.68 % as of June 30, 2023 and December 31, 2022, respectively

weighted average interest rate of 7.70 % and 6.68 % as of September 30, 2023 and December 31, 2022, respectively

1,528,667 1,568,555

Convertible notes payable due October 2026;

interest rate of 2.00 % as of both June 30, 2023 and December 31, 2022

interest rate of 2.00 % as of both September 30, 2023 and December 31, 2022

230,000 230,000

Tangible equity units senior amortizing notes due November 2025;

interest rate of 10.25 % as of both June 30, 2023 and December 31, 2022

interest rate of 10.25 % as of both September 30, 2023 and December 31, 2022

19,993 25,586

Other notes payable due 2023;

interest rate of 5.90 % as of June 30, 2023

interest rate of 5.90 % as of September 30, 2023

Deferred financing costs, net ( 24,532 ) ( 29,866 )

2 unchanged sentences

Total long-term debt, less current portion $ 3,492,860 $ 3,784,099

As of June 30, 2023, 91.8 %, or $ 3.5 billion, of the Company's total debt obligations represented non-recourse property-level mortgage financings.

As of June 30, 2023, $ 1.2 billion of the Company's variable rate mortgage notes payable were indexed to LIBOR plus a weighted average margin of approximately 228 basis points and $ 0.3 billion of the Company's variable rate mortgage notes payable were indexed to SOFR plus a weighted average margin of approximately 237 basis points.

The Company's remaining variable rate mortgage notes payable arrangements indexed to LIBOR were modified to reference SOFR plus an 11 basis point spread adjustment to reflect historical spreads between LIBOR and SOFR rather than LIBOR prospectively after the discontinuance of LIBOR in July 2023.

As of September 30, 2023, 92.0 %, or $ 3.5 billion, of the Company's total debt obligations represented non-recourse property-level mortgage financings.

The Company's remaining variable rate mortgage notes payable arrangements indexed to London Interbank Offered Rate ("LIBOR") were modified to reference SOFR rather than LIBOR prospectively after the discontinuance of LIBOR in July 2023.

As of September 30, 2023, the Company's variable rate mortgage notes payable were indexed to SOFR plus a weighted average margin of 239 basis points.

The Company applied the optional expedient provided by Accounting Standards Codification 848, Reference Rate Reform , for debt contract modifications related to the discontinuation of reference rates to ease the potential burden in accounting for reference rate reform.

As of June 30, 2023, $ 72.6 million of letters of credit and no cash borrowings were outstanding under the Company's $ 80.0 million secured credit facility.

As of September 30, 2023, $ 72.5 million of letters of credit and no cash borrowings were outstanding under the Company's $ 80.0 million secured credit facility.

The credit facility matures on January 15, 2024 and the Company has the option to extend the facility for two additional terms of one year each subject to the satisfaction of certain conditions.

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, 2023 under which $ 14.5 million had been issued as of that date.

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, 2023 under which $ 14.5 million had been issued as of that date.

Financial Covenants

4 unchanged sentences

Furthermore, the Company's long-term mortgage 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 June 30, 2023, the Company is in compliance with the financial covenants of its debt agreements.

As of June 30, 2023, the Company operated 295 communities under long-term leases ( 281 operating leases and 14 financing leases).

As of September 30, 2023, the Company is in compliance with the financial covenants of its debt agreements.

As of September 30, 2023, the Company operated 295 communities under long-term leases ( 281 operating leases and 14 financing leases).

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

10 unchanged sentences

Certain leases contain cure provisions, which generally allow the Company to post an additional lease security deposit if the required covenant is not met.

As of June 30, 2023, the Company is in compliance with the financial covenants of its long-term leases.

As of September 30, 2023, 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.

The Company recognized $ 1.0 million and $ 9.6 million for the three and six months ended June 30, 2022, 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 continued impacts of the COVID-19 pandemic.

The Company did not recognize any impairment charges for its operating lease right-of-use assets for the three or six months ended June 30, 2023.

The Company recognized $ 3.8 million for both the three and nine months ended September 30, 2023, of non-cash impairment charges for its operating lease right-of-use assets, primarily due to lower than expected occupancy and decreased future cash flow estimates at certain communities.

The Company recognized $ 1.9 million and $ 11.5 million for the three and nine months ended September 30, 2022, 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 continued impacts of the COVID-19 pandemic and property damage sustained 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

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Operating Leases (in thousands)

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Financing Leases (in thousands)

8 unchanged sentences

Total net cash outflows from financing leases $ 5,194 $ 14,695 $ 25,177 $ 42,870

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, 2023 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 September 30, 2023 are as follows (in thousands).

Year Ending December 31, Operating Leases Financing Leases

2023 (six months) $ 132,021 $ 9,862

2023 (three months) $ 66,197 $ 5,026

2024 258,495 20,213

17 unchanged sentences

The prospective change in classification of such lease costs to operating lease expense will result in a $ 19.3 million increase in cash lease payments for operating leases for 2023 and an offsetting decrease in cash lease payments for financing leases.

For the three and six months ended June 30, 2023, the classification of such lease costs as operating lease expense resulted in a $ 4.8 million increase in cash lease payments for operating leases and an offsetting decrease in cash lease payments for financing leases.

For the three and nine months ended September 30, 2023, the classification of such lease costs as operating lease expense resulted in a $ 7.2 million and $ 12.0 million, respectively, increase in cash lease payments for operating leases and an offsetting decrease in cash lease payments for financing leases.

The amendment to the lease arrangements increased the right-of-use assets and lease obligations recognized on the Company's condensed consolidated balance sheet each by $ 122.3 million.

4 unchanged sentences

Investment in Unconsolidated Ventures

As of June 30, 2023, the Company owns a 20 % equity interest, and affiliates of HCA Healthcare Inc.

As of September 30, 2023, the Company owns a 20 % equity interest, and affiliates of HCA Healthcare Inc.

own an 80 % interest, in a health care services venture (the "HCS Venture"), which operates home health and hospice agencies in the United States.

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 is $ 48.0 million, which is included in investment in unconsolidated ventures on the accompanying unaudited condensed consolidated balance sheet as of June 30, 2023.

As of June 30, 2023, 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 is $ 54.1 million, which is included in investment in unconsolidated ventures on the accompanying unaudited condensed consolidated balance sheet as of September 30, 2023.

As of September 30, 2023, the Company is not required to provide financial support, through a liquidity arrangement or otherwise, to the HCS Venture.

During the three months ended September 30, 2023, the Company contributed $ 7.5 million 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.

22 unchanged sentences

Three months ended June 30, 2023 10 $ 2.95 $ 29

Three months ended September 30, 2023 16 $ 4.01 $ 65

Earnings Per Share

1 unchanged sentence

On October 1, 2021, the Company issued $ 230.0 million principal amount of 2.00 % convertible senior notes due 2026 (the "Notes").

As of June 30, 2023, the maximum number of shares issuable upon settlement of the 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).

As of September 30, 2023, the maximum number of shares issuable upon settlement of the 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).

On July 26, 2020, the Company issued to Ventas, Inc.

5 unchanged sentences

Unless settled early in accordance with the terms of the instruments, under each purchase contract, the Company is obligated to deliver to the holder on November 15, 2025 a minimum of 12.9341 , and a maximum of 15.1976 , shares of the Company's common stock depending on the daily volume-weighted average price of its common stock for the 20 trading days preceding the settlement date.

As of June 30, 2023, the maximum number of shares issuable upon settlement of the Units' prepaid stock purchase contracts is 43.7 million.

As of September 30, 2023, the maximum number of shares issuable upon settlement of the Units' prepaid stock purchase contracts is 43.7 million.

Basic earnings per share ("EPS") is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding, after giving effect to the minimum number of shares issuable upon settlement of the prepaid stock purchase contract component of the Units.

For both the three and six months ended June 30, 2023, 37.2 million shares are included in weighted average basic shares outstanding for the minimum number of shares issuable upon settlement of the Units' prepaid stock purchase contracts.

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

For both the three and nine months ended September 30, 2023, 37.2 million shares are included in weighted average basic shares outstanding for the minimum number of shares issuable upon settlement of the Units' prepaid stock purchase contracts.

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2023 2022 2023 2022

6 unchanged sentences

The Company has the following potentially outstanding shares of common stock, which were excluded from the computation of diluted net income (loss) per share attributable to common stockholders in both periods as a result of the net loss.

As of June 30,

As of September 30,

(in millions) 2023 2022

4 unchanged sentences

Total 67.6 60.0

The difference between the Company's effective tax rate for the three months ended June 30, 2023 and 2022 was primarily due to an increase in the valuation allowance recorded on operating losses during the three months ended June 30, 2023 as compared to the three months ended June 30, 2022.

The difference between the Company's effective tax rate for the six months ended June 30, 2023 and 2022 was primarily due to a decrease in the tax benefit on the vesting of restricted stock units and restricted stock awards due to a lower market price for the Company's stock for the three months ended March 31, 2023 as compared to the three months ended March 31, 2022.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 1.4 million for the three months ended June 30, 2023, which was partially offset by an increase to the valuation allowance of $ 1.3 million.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 10.8 million for the six months ended June 30, 2023, which was offset by an increase to the valuation allowance of $ 11.0 million.

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

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

The difference between the Company's effective tax rate for the three months ended September 30, 2023 and 2022 was primarily due to a decrease in the valuation allowance recorded on operating losses during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022.

The difference between the Company's effective tax rate for the nine months ended September 30, 2023 and 2022 was primarily due to a decrease in the tax benefit on the vesting of restricted stock units and restricted stock awards due to a lower market price for the Company's stock for the three months ended March 31, 2023 as compared to the three months ended March 31, 2022.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 12.2 million for the three months ended September 30, 2023, which was partially offset by an increase to the valuation allowance of $ 10.0 million.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 23.0 million for the nine months ended September 30, 2023, which was partially offset by an increase to the valuation allowance of $ 21.0 million.

The Company recorded an aggregate deferred federal, state, and local tax expense of $ 7.3 million for the three months ended September 30, 2022, which was partially offset by a reduction to the valuation allowance of $ 6.7 million.

The Company recorded an aggregate deferred federal, state, and local tax expense of $ 52.8 million for the nine months ended September 30, 2022, which was partially offset by a reduction to the valuation allowance of $ 50.7 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 June 30, 2023 and December 31, 2022 was $ 436.0 million and $ 425.0 million, respectively.

The increase in the valuation allowance for both the six months ended June 30, 2023 and 2022 is the result of current operating losses during the periods and by the anticipated reversal of future tax liabilities offset by future tax deductions.

The Company recorded interest charges related to its tax contingency reserve for cash tax positions for the three and six months ended June 30, 2023 and 2022 which are included in income tax expense or benefit for the period.

As of June 30, 2023, tax returns for years 2018 through 2021 are subject to future examination by tax authorities.

The Company's valuation allowance as of September 30, 2023 and December 31, 2022 was $ 446.0 million and $ 425.0 million, respectively.

The increase in the valuation allowance for both the nine months ended September 30, 2023 and 2022 is the result of current operating losses during the periods and by the anticipated reversal of future tax liabilities offset by future tax deductions.

The Company recorded interest charges related to its tax contingency reserve for cash tax positions for the three and nine months ended September 30, 2023 and 2022 which are included in income tax expense or benefit for the period.

As of September 30, 2023, tax returns for years 2019 through 2022 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

During the period from January 1, 2022 through June 30, 2023, the Company disposed of three owned communities, the Company's triple-net lease obligations on four communities were terminated (including through the acquisition of one formerly leased community), and the Company acquired the remaining 50 % equity interest in one community.

During the period from January 1, 2022 through September 30, 2023, the Company disposed of three owned communities, the Company's triple-net lease obligations on four communities were terminated (including through the acquisition of one formerly leased community), and the Company acquired the remaining 50 % equity interest in one community.

On May 1, 2023, the Company completed the sale of its one remaining entrance fee community, which was included within the Company's CCRCs segment.

The Company received cash proceeds of $ 12.7 million, net of $ 29.6 million in mortgage debt repaid and transaction costs, and recognized a net gain on sale of communities of $ 36.3 million.

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") and subsequent legislation.

During the years ended December 31, 2022 and 2021, the Company recognized $ 9.4 million and $ 9.9 million, respectively, of employee retention credits on wages paid from March 12, 2020 to December 31, 2021 within other operating income, for which the Company has received $ 18.5 million in cash through June 30, 2023.

During the six months ended June 30, 2023 and 2022, the Company received cash of $ 13.9 million and $ 1.2 million, respectively, for such employee retention credits.

The Company has a receivable for the remaining $ 0.8 million included within prepaid expenses and other current assets, net on the condensed consolidated balance sheet as of June 30, 2023.

Six Months Ended

On November 1, 2023, the Company completed the sale of a CCRC, for which the Company received cash proceeds of $12.7 million, net of transaction costs, at closing.

As of September 30, 2023, the community was classified as held for sale within the CCRCs segment, resulting in $ 12.7 million of property, plant and equipment and leasehold intangibles being presented as assets held for sale within the condensed consolidated balance sheets.

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 and subsequent legislation.

During the nine months ended September 30, 2023 and 2022, the Company received cash of $ 14.7 million and $ 1.2 million, respectively, for such employee retention credits.

Nine Months Ended

September 30,

(in thousands) 2023 2022

25 unchanged sentences

Net cash received $ ( 43,181 ) $ ( 5,844 )

Six Months Ended

(in thousands) 2023 2022

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) June 30, 2023 December 31, 2022

(in thousands) September 30, 2023 December 31, 2022

Reconciliation of cash, cash equivalents, and restricted cash:

4 unchanged sentences

Segment Information

As of June 30, 2023, the Company has three reportable segments:

The Company has three reportable segments:

Independent Living;

16 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022 2023 2022

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2023 2022 2023 2022

11 unchanged sentences

Income (loss) from operations $ ( 6,338 ) $ 19,206 $ 42,649 $ ( 68,376 )

(in thousands) June 30, 2023 December 31, 2022

(in thousands) September 30, 2023 December 31, 2022

Total assets:

7 unchanged sentences

(2) 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.

(3) The Company's Independent Living segment had a carrying amount of goodwill of $ 27.3 million as of both June 30, 2023 and December 31, 2022.

(3) The Company's Independent Living segment had a carrying amount of goodwill of $ 27.3 million as of both September 30, 2023 and December 31, 2022.

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