What changed in this filing

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Item 1. Financial Statements

2025-05-07 compared with 2024-11-07 · 162 added, 245 removed, 385 unchanged (51% of the section changed)

3 unchanged sentences

(In thousands, except stock amounts)

September 30,

2025 December 31,

28 unchanged sentences

Total liabilities 6,057,556 6,121,657

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized at September 30, 2024 and December 31, 2023;

Preferred stock, $ 0.01 par value, 50,000,000 shares authorized at March 31, 2025 and December 31, 2024;

no shares issued and outstanding

Common stock, $ 0.01 par value, 400,000,000 shares authorized at September 30, 2024 and December 31, 2023;

209,768,026 and 198,780,826 shares issued and 199,240,501 and 188,253,301 shares outstanding (including 27,972 unvested restricted shares as of September 30, 2024), respectively

Common stock, $ 0.01 par value, 400,000,000 shares authorized at March 31, 2025 and December 31, 2024;

244,530,409 and 210,547,351 shares issued and 234,002,884 and 200,019,826 shares outstanding (including 27,972 unvested restricted shares as of March 31, 2025 and December 31, 2024)

Additional paid-in-capital 4,351,874 4,352,991

Treasury stock, at cost;

10,527,525 shares at September 30, 2024 and December 31, 2023

10,527,525 shares at March 31, 2025 and December 31, 2024

( 102,774 ) ( 102,774 )

10 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Resident fees $ 777,454 $ 744,241

1 unchanged sentence

Reimbursed costs incurred on behalf of managed communities 33,790 35,972

Other operating income — 2,623 — 9,073

Total revenue and other operating income 784,167 757,291 2,344,539 2,261,346

Total revenue 813,864 782,831

Facility operating expense (excluding facility depreciation and amortization of $ 86,209 and $ 79,904 , respectively)

5 unchanged sentences

Asset impairment 1,787 1,708

Loss (gain) on sale of communities, net — — — ( 36,296 )

Costs incurred on behalf of managed communities 33,790 35,972

7 unchanged sentences

Gain (loss) on debt modification and extinguishment, net ( 35,220 ) —

Equity in earnings (loss) of unconsolidated ventures — ( 1,426 ) — ( 3,156 )

Non-operating gain (loss) on sale of assets, net — 704

14 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Total equity, balance at beginning of period $ 213,905 $ 405,153

38 unchanged sentences

(Unaudited, in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash Flows from Operating Activities

4 unchanged sentences

Asset impairment 1,787 1,708

Equity in (earnings) loss of unconsolidated ventures — 3,156

Distributions from unconsolidated ventures from cumulative share of net earnings — 430

Amortization of entrance fees — ( 732 )

Proceeds from deferred entrance fee revenue — 477

Deferred income tax (benefit) provision ( 1,157 ) ( 425 )

4 unchanged sentences

Property and casualty insurance income ( 1,415 ) ( 2,626 )

Other non-operating (income) loss — ( 2,542 )

Changes in operating assets and liabilities:

7 unchanged sentences

Cash Flows from Investing Activities

Purchase of marketable securities ( 39,191 ) ( 159,811 )

Sale and maturities of marketable securities 20,000 30,000

Capital expenditures, net of related payables ( 41,817 ) ( 44,399 )

Acquisition of assets, net of cash acquired — ( 574 )

Investment in unconsolidated ventures — ( 7,589 )

Acquisition of assets ( 311,028 ) —

Proceeds from sale of assets, net — 849

23 unchanged sentences

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, 2024, the Company owned 342 communities, representing a majority of the Company's community portfolio, leased 277 communities, and managed 29 communities.

As of March 31, 2025, the Company owned 383 communities, representing a majority of the Company's community portfolio, leased 236 communities, and managed 28 communities.

Summary of Significant Accounting Policies

14 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.

Reclassifications

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.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires expanded annual and interim disclosures for significant segment expenses.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company is currently evaluating the effect of this pronouncement on its segment disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which standardizes categories for the effective tax rate reconciliation, requires disaggregation of income taxes and additional income tax-related disclosures.

This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is evaluating the effect this pronouncement will have on its income tax disclosures.

Fair Value Measurements

Marketable Securities

As of September 30, 2024 and December 31, 2023, marketable securities of $ 29.7 million and $ 29.8 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 Secured Overnight Financing Rate ("SOFR") interest rate cap instruments as of September 30, 2024.

The following table summarizes the Company's Secured Overnight Financing Rate ("SOFR") interest rate cap instruments as of March 31, 2025.

($ in millions)

Current notional balance $ 1,257.5

Notional balance $ 893.9

Weighted average fixed cap rate 4.27 %

Weighted average remaining term 0.5 years

Weighted average remaining term 1.0 year

Estimated asset fair value (included in other assets, net) $ 4.0

As of December 31, 2023, the estimated fair value of the interest rate cap instruments was $ 13.3 million.

The following table summarizes the Company's SOFR interest rate swap instrument as of September 30, 2024.

As of December 31, 2024, the estimated fair value of the interest rate cap instruments was $ 4.1 million included in other assets, net.

The following table summarizes the Company's SOFR interest rate swap instrument as of March 31, 2025.

($ in millions)

Current notional balance $ 220.0

Notional balance $ 230.0

Fixed interest rate 4.06 %

Remaining term 1.0 year

Remaining term 1.5 years

Estimated fair value (included in other liabilities) $ ( 1.0 )

As of December 31, 2023, the estimated fair value of the interest rate swap instrument was $ 1.6 million included in other assets, net.

As of December 31, 2024, the estimated fair value of the interest rate swap instrument was $( 0.1 ) million included in other liabilities, net.

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 $ 3.7 billion as of both September 30, 2024 and December 31, 2023.

Fair value of the long-term debt is approximately $ 3.6 billion and $ 3.4 billion as of September 30, 2024 and December 31, 2023, respectively.

The Company had outstanding long-term debt with a carrying amount of approximately $ 4.3 billion and $ 4.1 billion as of March 31, 2025 and December 31, 2024, respectively.

Fair value of the long-term debt is approximately $ 4.2 billion and $ 3.8 billion as of March 31, 2025 and December 31, 2024, respectively.

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

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 September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Private pay 93.9 % 93.9 %

7 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 $ 53.6 million and $ 48.3 million, including $ 28.0 million and $ 24.1 million of monthly resident fees billed and received in advance, as of September 30, 2024 and December 31, 2023, respectively.

For the nine months ended September 30, 2024 and 2023, the Company recognized $ 47.0 million and $ 49.1 million, respectively, of revenue that was included in the deferred revenue balance as of January 1, 2024 and 2023, respectively.

The Company applies the practical expedient in ASC 606-10-50-14 and does not disclose amounts for remaining performance obligations that have original expected durations of one year or less.

The Company had total deferred revenue (included within refundable fees and deferred revenue within the condensed consolidated balance sheets) of $ 58.9 million and $ 53.8 million, including $ 33.8 million and $ 29.4 million of monthly resident fees billed and received in advance, as of March 31, 2025 and December 31, 2024, respectively.

For the three months ended March 31, 2025 and 2024, the Company recognized $ 40.7 million and $ 35.2 million, respectively, of revenue that was included in the deferred revenue balance as of January 1, 2025 and 2024, respectively.

Property, Plant and Equipment and Leasehold Intangibles, Net

As of September 30, 2024 and December 31, 2023, net property, plant and equipment and leasehold intangibles, which include assets under financing leases, consisted of the following.

(in thousands) September 30, 2024 December 31, 2023

As of March 31, 2025 and December 31, 2024, net property, plant and equipment and leasehold intangibles consisted of the following.

(in thousands) March 31, 2025 December 31, 2024

Land $ 559,133 $ 532,719

8 unchanged sentences

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 $ 90.1 million and $ 85.9 million for the three months ended September 30, 2024 and 2023, respectively, and $ 264.2 million and $ 255.3 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company recognized $ 0.9 million and $ 2.6 million for the three and nine months ended September 30, 2024, respectively, of non-cash impairment charges in its operating results for its property, plant and equipment and leasehold

intangibles assets due to property damage sustained at certain communities.

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 planned disposition of certain underperforming communities that have since been sold.

The Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $ 91.0 million and $ 86.1 million for the three months ended March 31, 2025 and 2024, respectively.

The Company recognized $ 1.8 million and $ 1.7 million for the three months ended March 31, 2025 and 2024, respectively, of non-cash impairment charges in its operating results for its property, plant and equipment and leasehold intangibles assets.

Long-term debt consists of the following.

(in thousands) September 30, 2024 December 31, 2023

(in thousands) March 31, 2025 December 31, 2024

Fixed rate mortgage notes payable due 2026 through 2047;

weighted average interest rate of 4.37 % and 4.26 % as of September 30, 2024 and December 31, 2023, respectively.

weighted average interest rate of 4.74 % and 4.65 % as of March 31, 2025 and December 31, 2024, respectively

$ 2,721,406 $ 2,599,028

Variable rate mortgage notes payable due 2026 through 2030;

weighted average interest rate of 7.53 % and 7.74 % as of September 30, 2024 and December 31, 2023, respectively

weighted average interest rate of 6.78 % and 6.89 % as of March 31, 2025 and December 31, 2024, respectively

1,219,462 1,110,642

Convertible notes payable due October 2026;

interest rate of 2.00 % as of both September 30, 2024 and December 31, 2023

interest rate of 2.00 % as of both March 31, 2025 and December 31, 2024

23,297 23,297

Tangible equity units senior amortizing notes due November 2025;

interest rate of 10.25 % as of both September 30, 2024 and December 31, 2023

Convertible notes payable due October 2029;

interest rate of 3.50 % as of both March 31, 2025 and December 31, 2024

369,445 369,445

Tangible equity units senior amortizing notes due 2025;

interest rate of 10.25 % as of both March 31, 2025 and December 31, 2024

Notes payable for insurance premium financing due 2025;

interest rate of 7.40 % as of September 30, 2024

interest rate of 6.16 % as of March 31, 2025

Deferred financing costs, net ( 49,882 ) ( 49,074 )

2 unchanged sentences

Total long-term debt, less current portion $ 4,248,486 $ 4,022,008

As of September 30, 2024, the long-term debt, less current portion within the Company's condensed consolidated balance sheet includes $ 100.0 million of mortgage notes payable scheduled to mature in January 2025 with two one-year extension options, exercisable by the Company subject to the satisfaction of certain conditions.

As of September 30, 2024, 91.5 %, or $ 3.4 billion, of the Company's total debt obligations represented non-recourse property-level mortgage financings.

As of September 30, 2024, $ 58.5 million of letters of credit and no cash borrowings were outstanding under the Company's $ 100.0 million secured credit facility.

The Company also had a separate secured letter of credit facility providing up to $ 17.0 million of letters of credit as of September 30, 2024 under which $ 15.7 million had been issued as of that date.

As of March 31, 2025, the long-term debt, less current portion within the Company's condensed consolidated balance sheet includes $ 99.8 million of mortgage debt scheduled to mature in January 2026 for which the Company has the unilateral option to extend the maturity for one additional year subject to the satisfaction of certain conditions.

As of March 31, 2025, 87.7 %, or $ 3.8 billion, of the Company's total debt obligations represented non-recourse property-level mortgage financings.

As of March 31, 2025, $ 33.7 million of letters of credit and no cash borrowings were outstanding under the Company's $ 100.0 million secured credit facility.

The Company also had separate letter of credit facilities providing up to $ 37.0 million of letters of credit as of March 31, 2025 under which $ 35.7 million had been issued as of that date.

2025 Mortgage Financings

In February 2025, the Company obtained an aggregate of $ 130.1 million of debt secured by non-recourse first priority mortgages on five communities.

The debt bears interest at a fixed rate of 6.47 %, is interest only for the first five years , and matures in March 2035.

In February 2025, the Company obtained $ 161.0 million of debt secured by first priority mortgages on 36 communities.

The loan bears interest at a variable rate equal to SOFR plus a margin of 350 basis points.

The debt matures in February 2027 with two one-year extension options, exercisable subject to certain performance criteria.

In September 2024, the Company obtained $ 182.5 million of debt secured by first priority mortgages on 16 communities.

The loan bears interest at a fixed rate of 5.67 % and is interest only for the first two years .

The debt matures in October 2029.

At the closing, the Company repaid $ 197.1 million of outstanding mortgage debt, which was scheduled to mature in September 2025, using proceeds from the $ 182.5 million debt and cash on hand.

Convertible Senior Notes

On September 30, 2024, the Company entered into privately negotiated exchange and subscription agreements (the “Exchange and Subscription Agreements”) with certain holders (the "Investors") of the Company’s outstanding 2.00 % convertible senior notes due 2026 (the “2026 Notes”), each of whom may have also beneficially owned shares of the Company's common stock as of such date and at closing.

On October 3, 2024, pursuant to the Exchange and Subscription Agreements, the Company issued $ 369.4 million aggregate principal amount of its 3.50 % convertible senior notes due 2029 (the “2029 New Notes”).

At closing, $ 219.4 million principal amount of the 2029 New Notes were issued in exchange for $ 206.7 million principal amount of the 2026 Notes and $ 150.0 million principal amount of the 2029 New Notes were issued for cash.

The 2029 New Notes were

issued pursuant to, and are governed by, an Indenture (the “2029 New Notes Indenture”), dated as of October 3, 2024 between the Company and Equiniti Trust Co., as trustee (the “Trustee”).

Following the closing, $ 23.3 million in aggregate principal amount of the 2026 Notes remain outstanding with the terms unchanged.

The 2029 New Notes are the Company’s senior unsecured obligations and will rank senior in right of payment to any of its indebtedness that is expressly subordinated in right of payment to the 2029 New Notes, and equal in right of payment to any indebtedness that is not so subordinated.

The 2029 New 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 and structurally junior to all indebtedness and other liabilities (including trade payables) and any preferred equity of current or future subsidiaries of the Company.

Under the terms of the 2029 New Notes Indenture, subject to certain exceptions, the Company may not incur pari passu indebtedness in an aggregate principal amount exceeding $ 500 million.

The 2029 New Notes bear interest at a rate of 3.50 % per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning on April 15, 2025.

The 2029 New Notes will mature on October 15, 2029, unless earlier converted or repurchased in accordance with their terms.

Holders of the 2029 New Notes may convert all or any portion of their 2029 New Notes at their option at any time prior to the close of business on the business day immediately preceding July 15, 2029, only under the following circumstances:

(1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2024 (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;

(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 the 2029 New 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 2029 New Notes on each such trading day; or (3) upon the occurrence of specified corporate events.

On or after July 15, 2029, holders may convert all or any portion of their 2029 New 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.

Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election.

Under the 2029 New Notes Indenture, the Company will not be obligated to deliver any shares of common stock to any holder upon any conversion of the 2029 New Notes whereby such holder would beneficially own a number of shares of Company common stock in excess of 19.9 % of the total number of shares of Company common stock issued and outstanding immediately following such conversion.

The conversion rate for the 2029 New Notes will initially be 111.1111 shares of common stock per $1,000 principal amount of the 2029 New Notes (equivalent to an initial conversion price of approximately $ 9.00 per share of common stock).

The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest.

In addition, following certain corporate events that occur prior to the maturity date, the Company will increase the conversion rate for a holder who elects to convert its 2029 New Notes in connection with such a corporate event.

The Company does not have the right to redeem the 2029 New Notes at its election before the maturity date.

No sinking fund is provided for the 2029 New Notes.

The Company’s net cash proceeds from the exchange and issuance transactions, after subtracting fees, discounts and estimated expenses payable by the Company, were approximately $ 135.0 million.

The Company intends to use the proceeds to fund acquisitions and for general corporate purposes.

The Company expects to recognize an approximately $ 15.0 million loss on debt extinguishment in the three months ended December 31, 2024 for the completed exchange and issuance transactions.

The loan bears interest at a variable rate based on SOFR plus a margin of 300 basis points, and is interest only for the first year.

The debt has an initial three-year term and two one-year extension options, exercisable subject to certain performance criteria, with a final maturity date, including extension options, of February 2030.

At the time of closing, the Company repaid $ 50.0 million of outstanding mortgage debt on 11 communities, which held a final maturity date of February 2029.

Financial Covenants

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.

Certain of the Company's debt documents contain restrictions and financial covenants, such as those requiring the Company to maintain prescribed minimum liquidity and net worth 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.

The Company's failure to comply with applicable covenants could constitute an event of default under the applicable debt documents.

The Company's failure to comply with applicable covenants, subject to cure provisions in certain instances, could constitute an event of default under the applicable debt documents.

Many of the Company's debt documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors).

Furthermore, the Company's 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 September 30, 2024, the Company is in compliance with the financial covenants of its debt agreements.

As of September 30, 2024, the Company operated 277 communities under long-term leases ( 227 operating leases and 50 financing leases).

As of March 31, 2025, the Company is in compliance with the financial covenants of its debt agreements.

As of March 31, 2025, the Company operated 236 communities under long-term leases ( 227 operating leases and 9 financing leases).

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

2 unchanged sentences

An event of default related to an individual property or limited number of properties within a master lease portfolio may result in a default on the entire master lease portfolio.

The leases relating to these communities are generally fixed rate leases with annual escalators that are either fixed or based upon changes in the consumer price index or the leased property revenue.

The leases relating to substantially all of the Company's leased communities are fixed rate leases with annual escalators that are fixed.

The Company is responsible for all operating costs, including repairs and maintenance, property taxes, and insurance.

The leases generally provide for renewal or extension options from 5 to 20 years and in some instances, purchase options.

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.

The leases generally provide for renewal or extension options, or in certain cases, purchase options.

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 and net worth 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.

The Company's failure to comply with applicable covenants could constitute an event of default under the applicable lease documents.

Many of the Company's debt and lease documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors).

Many of the Company's lease documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors).

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

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 September 30, 2024, the Company is in compliance with the financial covenants of its long-term lease agreements.

As of March 31, 2025, the Company is in compliance with the financial covenants of its long-term lease agreements.

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 did not recognize any such impairment charges for the three and nine months ended September 30, 2024.

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 did not recognize any such impairment charges for the three months ended March 31, 2025 and 2024.

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

September 30, Nine Months Ended

September 30,

Operating Leases (in thousands)

2024 2023 2024 2023

Facility operating expense $ 2,059 $ 1,920

2 unchanged sentences

Operating lease expense adjustment (1)

12,489 11,458 39,061 33,820

Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements ( 2,013 ) ( 249 )

2 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

Financing Leases (in thousands)

2024 2023 2024 2023

Depreciation and amortization $ 2,525 $ 2,872

5 unchanged sentences

Total net cash outflows from financing leases $ 5,889 $ 5,323

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, 2024 are as follows (in millions).

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, 2025 are as follows (in millions).

Year Ending December 31, Operating Leases Financing Leases

2024 (three months) $ 56.9 $ 12.8

2025 (nine months) $ 174.9 $ 5.3

2026 182.1 7.1

4 unchanged sentences

Total lease payments 1,999.0 46.1

Purchase price for communities subject to acquisition agreements — 610.0

Reacquisition price in excess of sale-leaseback proceeds — ( 32.8 )

Imputed interest and variable lease payments ( 741.2 ) ( 40.4 )

Other financing obligations — 20.7

Non-cash gain on future sale of property — 20.7

Total lease obligations $ 1,257.8 $ 26.4

Omega Lease Amendment

In August 2024, the Company and Omega Healthcare Investors, Inc.

("Omega") amended the existing master lease pursuant to which the Company continues to lease 24 communities from Omega.

The Company's amended master lease has an initial term to expire on December 31, 2037.

As part of the amendment, Omega agreed to make available up to $ 80.0 million to fund costs associated with capital expenditures for the communities through December 31, 2037.

The annual rent under the lease will not be adjusted upon reimbursements for capital expenditures in the aggregate amount of up to $ 30.0 million of the $ 80.0 million pool, which is available in certain tranches through June 30, 2028.

With respect to the remaining $ 50.0 million of the $ 80.0 million pool, the annual rent under the lease will prospectively increase by the amount of each reimbursement multiplied by 9.5 %.

The $ 50.0 million will be available in certain tranches beginning January 1, 2025, subject to certain annual reimbursement caps specified in the lease.

Under the terms of the amendment, rent will escalate annually per the terms of the existing lease escalator, with a potential minor contingent rent adjustment beginning in 2028 depending on lease performance.

The amendment to the lease arrangements increased the operating lease right-of-use assets and lease obligations recognized on the Company's condensed consolidated balance sheet each by $ 253.4 million.

International JV / Welltower Portfolio Acquisition

In September 2024, the Company entered into a definitive agreement to acquire 11 senior living communities that are currently leased by the Company from a joint venture between Welltower Inc.

(“Welltower”) and its joint venture partners for a purchase price of $ 300.0 million.

As part of this transaction, the Company will assume approximately $ 194.5 million of existing 4.92 % fixed rate agency debt which is scheduled to mature in March 2027.

Currently, these communities are held in a triple-net lease with annualized current cash rent payments of $ 22.3 million and a current maturity of August 31, 2028.

The Company expects to complete the acquisition transaction in 2024, subject to the satisfaction of customary closing conditions for real estate

transactions.

The Company expects to fund its acquisition of the 11 communities through the assumption of the existing mortgage debt, a portion of the net cash proceeds from the sale of the 2029 New Notes, and cash on hand.

The leases for the 11 communities were previously classified as operating leases and have been prospectively classified as financing leases subsequent to the amendment of the leasing arrangement.

The amendment of the leasing arrangement resulted in the following increases to the assets and liabilities recognized on the Company's condensed consolidated balance sheet.

(in millions)

Property, plant and equipment and leasehold intangibles, net $ 281.0

Operating lease right-of-use assets ( 52.0 )

Total assets $ 229.0

Financing lease obligations $ 300.0

Operating lease obligations ( 71.0 )

Total liabilities $ 229.0

Diversified Healthcare Trust Portfolio Acquisition

In September 2024, the Company entered into a definitive agreement to acquire 25 senior living communities that were leased by the Company from Diversified Healthcare Trust for a purchase price of $ 135.0 million.

Effective February 27, 2025, the Company successfully closed the acquisition.

The Company funded the acquisition of the 25 communities through proceeds from mortgage financings and cash on hand.

Refer to Note 6 for information on the mortgage financing.

Previously, these communities were held in a triple-net lease with annualized cash rent payments of $ 10.2 million and an initial maturity of December 31, 2032.

The leases for the 25 communities were previously classified as operating leases and were prospectively classified as financing leases subsequent to the amendment of the leasing arrangement through the date of acquisition.

Welltower Portfolio Acquisition

In September 2024, the Company entered into a definitive agreement to acquire five senior living communities that are currently leased by the Company from Welltower for a purchase price of $ 175.0 million.

Currently, these communities are held in a triple-net lease with annualized current cash rent payments of $ 13.4 million and a current maturity of December 31, 2024.

The Company expects to complete the acquisition transaction in 2024, subject to the satisfaction of customary closing conditions for real estate transactions.

The Company expects to fund its acquisition of the five communities through a portion of the net cash proceeds from the sale of the 2029 New Notes, proceeds from non-recourse mortgage financing on the assets, and cash on hand.

In September 2024, the Company entered into a definitive agreement to acquire five senior living communities that were leased by the Company from Welltower Inc.

for a purchase price of $ 175.0 million.

Effective February 27, 2025, the Company successfully closed the acquisition.

The Company funded the acquisition of the five communities through proceeds from mortgage financings and cash on hand.

Refer to Note 6 for information on the mortgage financing.

Previously, these communities were held in a triple-net lease with annualized cash rent payments of $ 13.7 million and an initial maturity of December 31, 2024, which had been extended through the acquisition date.

The definitive agreement included the finalization of the purchase price under the provisions of a purchase option arrangement with a variable price component based upon the fair value of the assets.

The amendment of the leasing arrangement increased the financing lease right-of-use assets and lease obligations recognized for two of these communities on the Company's consolidated balance sheet each by $ 17.7 million.

The leasing arrangements for three of these communities are accounted for as failed sale-leaseback transactions as the Company has not previously transferred control of the underlying assets for accounting purposes under a sale and leaseback arrangement with a purchase option.

Diversified Healthcare Trust Portfolio Acquisition

In September 2024, the Company entered into a definitive agreement to acquire 25 senior living communities that are currently leased by the Company from Diversified Healthcare Trust for a purchase price of $ 135.0 million.

Currently, these communities are held in a triple-net lease with annualized current cash rent payments of $ 10.2 million and a current maturity of December 31, 2032.

The Company expects to complete the acquisition transaction in 2024, subject to the satisfaction of customary closing conditions for real estate transactions.

The Company expects to fund its acquisition of the 25 communities through a portion of the net cash proceeds from the sale of the 2029 New Notes, proceeds from non-recourse mortgage financing on certain of the assets, and cash on hand.

The leases for the 25 communities were previously classified as operating leases and have been prospectively classified as financing leases subsequent to the amendment of the leasing arrangement.

The amendment of the leasing arrangement resulted in the following increases to the assets and liabilities recognized on the Company's condensed consolidated balance sheet.

(in millions)

Property, plant and equipment and leasehold intangibles, net $ 128.6

Operating lease right-of-use assets ( 40.4 )

Total assets $ 88.2

Financing lease obligations $ 135.0

Operating lease obligations ( 46.8 )

Total liabilities $ 88.2

The leasing arrangements for three of these communities were accounted for as failed sale-leaseback transactions as the Company did not transfer control of the underlying assets under a sale and leaseback arrangement with a purchase option.

For the three months ended March 31, 2025, the Company recognized a $ 32.8 million loss on extinguishment of the financing obligation for the amount by which the repurchase price exceeded the previously recognized financing obligation for such three communities.

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.

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Certain claims and lawsuits allege large damage amounts, seek injunctive relief, and may require (and have required) significant costs to defend and resolve.

The Company continues to vigorously defend against the putative class action cases, and an estimate of the possible loss or range of possible loss in connection with any such putative class action cannot be made.

As a result, the Company maintains general liability, professional liability, excess liability, and other insurance policies in amounts and with coverage and deductibles the Company believes are appropriate, based on the nature and risks of its business, historical experience, availability, and industry standards.

The Company continues to vigorously defend against the putative class action cases.

Based on the information that has been received as of the date hereof related to certain pending putative class action litigation discussed above, the Company recorded $ 7.0 million in litigation expense for the three months ended December 31, 2024, representing its current estimate of the Company’s ultimate cost to resolve such litigation, net of estimated probable insurance recoveries.

The final outcome of the litigation is dependent on many factors that are difficult to predict.

Accordingly the Company’s ultimate cost related to this matter may be materially different than the amount of the Company’s current estimate and accruals.

The Company maintains general liability, professional liability, excess liability, and other insurance policies in amounts and with coverage and deductibles the Company believes are appropriate, based on the nature and risks of its business, historical experience, availability, and industry standards.

The Company's current policies provide for deductibles for each claim and contain various exclusions from coverage.

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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 were subsequently transferred to the Middle District of Tennessee and consolidated into two lawsuits.

In January 2024, the court dismissed one of the two derivative lawsuits.

Plaintiffs have appealed the dismissal to the United States Court of Appeals for the Sixth Circuit.

The other derivative lawsuit remains pending with the Middle District of Tennessee and asserts claims on behalf of the Company against certain current and former officers and directors for alleged breaches of duties owed to the Company.

The complaint incorporates substantively similar allegations to the securities lawsuit previously described.

In January 2024, the court dismissed one of the two derivative lawsuits—styled Davis v.

Baier et al ., No.

3:20-cv-00929 (M.D.

Tenn.) (the “ Davis Action”).

Plaintiffs have appealed the dismissal of the Davis Action to the United States Court of Appeals for the Sixth Circuit;

that appeal is pending.

The other derivative lawsuit—styled Templin v.

Baier et al ., No.

3:21-cv-00373 (M.D.

Tenn.) (the “ Templin Action”)—remains pending in the Middle District of Tennessee (the “Court”) and asserts claims on behalf of the Company against certain current and former officers and directors for alleged breaches of duties owed to the Company.

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

On May 2, 2025, plaintiff in the Templin Action filed a motion for preliminary approval of a proposed settlement, together with an executed settlement agreement.

On May 6, 2025, the Court entered an order preliminarily approving the proposed settlement.

The proposed settlement is subject to Court approval.

A settlement hearing is scheduled for July 9, 2025 at 1:00 p.m.

As required by the Court’s order preliminarily approving the settlement, the Company is furnishing the Summary Notice of Proposed Derivative Settlement as Exhibit 10.5 to this Quarterly Report on Form 10-Q.

Stock-Based Compensation

Grants of restricted stock units and stock awards under the Company's 2014 and 2024 Omnibus Incentive Plan were as follows.

Grants of restricted stock units and stock awards under the Company's 2024 Omnibus Incentive Plan were as follows.

(in thousands, except for 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, 2025 2,806 $ 5.12 $ 14,366

Three months ended June 30, 2024 17 $ 6.86 $ 115

Three months ended September 30, 2024 36 $ 7.15 $ 258

Earnings Per Share

Potentially dilutive common stock equivalents for the Company include convertible senior notes, warrants, unvested restricted stock, restricted stock units, and prepaid stock purchase contracts.

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

As of September 30, 2024, the maximum number of shares issuable upon settlement of the 2026 Notes is 38.3 million (after giving effect to 9.9 million additional shares that would be issuable upon conversion in connection with the occurrence of certain corporate or other events).

After giving effect to the Company's convertible notes exchange and issuance transactions on October 3, 2024, the maximum number of shares issuable upon settlement of the Company’s outstanding convertible senior notes is 58.9 million (after giving effect to 14.9 million additional shares that would be issuable upon conversion in connection with the occurrence of certain corporate or other events).

Refer to Note 6 for information on the Company's convertible notes exchange and issuance transactions on October 3, 2024.

Potentially dilutive common stock equivalents for the Company include convertible senior notes, warrants, unvested restricted stock, restricted stock units, and, until March 31, 2025, prepaid stock purchase contracts.

As of March 31, 2025, $ 23.3 million in aggregate principal amount of the Company's 2.00 % convertible senior notes due 2026 (the "2026 Notes") remain outstanding and the maximum number of shares issuable upon settlement of the 2026 Notes is 3.9 million (after giving effect to 1.0 million additional shares that would be issuable upon conversion in connection with the occurrence of certain corporate or other events).

As of March 31, 2025, $ 369.4 million in aggregate principal amount of the Company’s 3.50 % convertible senior notes due 2029 (the “2029 Notes”) remain outstanding and the maximum number of shares issuable upon settlement of the 2029 Notes is 55.0 million (after giving effect to 13.9 million 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.

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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.

During the three and nine months ended September 30, 2024, the Company issued 1,162,946 shares of common stock and 2,105,370 shares of common stock, respectively, upon the partial exercise of the Warrant by Ventas for 2.0 million shares and 3.7 million shares, net of shares withheld to satisfy the aggregate exercise price during the three and nine months ended September 30, 2024, respectively.

As of September 30, 2024, the Warrant remains outstanding for the right to purchase 12.6 million shares of the Company's common stock.

During the three months ended March 31, 2025, the Company issued 2.6 million shares of common stock, upon the partial exercise of the Warrant by Ventas for 5.6 million shares, net of shares withheld to satisfy the aggregate exercise price.

As of March 31, 2025, the Warrant remains outstanding for the right to purchase 5.6 million shares of the Company's common stock.

During the three months ended December 31, 2022, the Company issued 2,875,000 of its 7.00 % tangible equity units (the "Units") at a public offering price of $ 50.00 per Unit for an aggregate offering of $ 143.8 million.

Each Unit is comprised of a prepaid stock purchase contract and a senior amortizing note with an initial principal amount of $ 8.8996 .

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.

During the three and nine months ended September 30, 2024, 65,000 and 583,662 , respectively, of the Units were separated at the election of the holders into the two components, prepaid stock purchase contracts and senior amortizing notes, and the Company delivered 840,716 and 7,549,141 shares of the Company’s common stock upon settlement of such prepaid stock purchase contracts for the three and nine months ended September 30, 2024, respectively.

As of September 30, 2024, 2,291,338 prepaid stock purchase contracts remain outstanding, and the maximum number of shares issuable upon settlement of the Units' prepaid stock purchase contracts is 34.8 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.

Each Unit was comprised of a prepaid stock purchase contract and a senior amortizing note with an initial principal amount of $ 8.8996 .

In March 2025, the Company elected to exercise its right to settle the remaining outstanding 2,291,338 prepaid stock purchase contracts, pursuant to the early settlement right in the purchase contract agreement, and the Company delivered 29,636,386 shares of the Company's common stock upon settlement.

As of March 31, 2025, the Company had no outstanding prepaid stock purchase contracts and $ 7.2 million payable in 2025 for the senior amortizing notes component of the Units.

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 weighted average minimum number of shares issuable upon settlement of the prepaid stock purchase contract component of the Units.

The following table summarizes the computation of basic weighted average shares presented in the condensed consolidated statements of operations.

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

Three Months Ended March 31,

(in thousands) 2025 2024

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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 September 30,

As of March 31,

(in millions) 2025 2024

Convertible senior notes at initial conversion rate 28.4 28.4

Incremental shares issuable upon certain events for convertible senior notes 9.9 9.9

2026 Notes at initial conversion rate 2.9 28.4

Incremental shares issuable upon certain events for 2026 Notes 1.0 9.9

2029 Notes at initial conversion rate 41.1 —

Incremental shares issuable upon certain events for 2029 Notes 13.9 —

Warrants 5.6 16.3

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Total 70.7 67.0

The difference between the Company's effective tax rate for the three months ended September 30, 2024 and 2023 was primarily due to an increase in the valuation allowance recorded on operating losses during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

The difference between the Company's effective tax rate for the nine months ended September 30, 2024 and 2023 was primarily due to an increase in the tax benefit on the vesting of restricted stock units for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 12.2 million for the three months ended September 30, 2024, which was offset by an increase to the valuation allowance of $ 12.5 million.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 28.9 million for the nine months ended September 30, 2024, which was partially offset by an increase to the valuation allowance of $ 28.8 million.

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 difference between the Company's effective tax rate for the three months ended March 31, 2025 and 2024 was primarily due to an increase in the benefit recorded on operational losses during the three months ended March 31, 2025.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 15.9 million for the three months ended March 31, 2025, which was partially offset by an increase to the valuation allowance of $ 14.7 million.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $ 7.6 million for the three months ended March 31, 2024, which was partially offset by an increase to the valuation allowance of $ 7.2 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 September 30, 2024 and December 31, 2023 was $ 503.0 million and $ 474.2 million, respectively.

The increase in the valuation allowance for both the nine months ended September 30, 2024 and 2023 is the result of current operating losses during the periods and 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, 2024 and 2023, which are included in income tax expense or benefit for the period.

As of September 30, 2024, tax returns for years 2020 through 2023 are subject to future examination by tax authorities.

The Company's valuation allowance as of March 31, 2025 and December 31, 2024 was $ 536.2 million and $ 521.5 million, respectively.

The increase in the valuation allowance for the three months ended March 31, 2025 and 2024 is the result of current operating losses during the three months ended March 31, 2025 and 2024 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 months ended March 31, 2025 and 2024 which are included in income tax expense or benefit for the period.

As of March 31, 2025, tax returns for years 2020 through 2023 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

Nine Months Ended

September 30,

Three Months Ended

(in thousands) 2025 2024

8 unchanged sentences

Net cash paid $ 41,817 $ 44,399

Acquisition of assets, net of cash acquired:

Prepaid expenses and other assets, net $ — $ 23

Property, plant and equipment and leasehold intangibles, net — 6,872

Investment in unconsolidated ventures — ( 3,395 )

Other liabilities — ( 384 )

Other non-operating loss (income) — ( 2,542 )

Net cash paid $ — $ 574

Proceeds from sale of assets, net:

Prepaid expenses and other assets, net $ ( 362 ) $ ( 1,660 )

Property, plant and equipment and leasehold intangibles, net ( 6,291 ) ( 23,733 )

Refundable fees and deferred revenue — 9,347

Other liabilities 559 10,021

Non-operating loss (gain) on sale of assets, net ( 923 ) ( 860 )

Loss (gain) on sale of communities, net — ( 36,296 )

Net cash received $ ( 7,017 ) $ ( 43,181 )

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

Non-cash lease transactions, net:

Acquisition of assets:

Property, plant and equipment and leasehold intangibles, net $ 1,028 $ —

Operating lease right-of-use assets 170,867 216,492

Financing lease obligations 277,208 —

Operating lease obligations ( 145,414 ) ( 253,794 )

Restricted cash consists principally of escrow deposits for interest rate caps, real estate taxes, property insurance, capital expenditures, and debt service reserves required by certain lenders under mortgage debt agreements, deposits as security for self-insured retention risk under workers' compensation programs and property insurance programs, and regulatory reserves for certain CCRCs.

Loss on debt modification and extinguishment, net 32,792 —

Net cash paid $ 311,028 $ —

Restricted cash consists principally of escrow deposits for interest rate caps, real estate taxes, property insurance, capital expenditures, and debt service reserves required by certain lenders under mortgage debt agreements, deposits as security for self-insured retention risk under general and professional liability programs, property insurance programs, and workers' compensation programs, and regulatory reserves for certain CCRCs.

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) September 30, 2024 December 31, 2023

(in thousands) March 31, 2025 December 31, 2024

Reconciliation of cash, cash equivalents, and restricted cash:

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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.

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'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.

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Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2025 2024

Revenue and other operating income:

Independent Living $ 157,117 $ 148,948

$ 150,380 $ 141,449 $ 448,870 $ 422,993

Assisted Living and Memory Care 533,379 510,872

510,084 496,232 1,528,147 1,475,322

83,265 82,065 250,662 251,446

CCRCs 86,958 84,421

All Other 36,410 38,590

Total revenue and other operating income $ 784,167 $ 757,291 $ 2,344,539 $ 2,261,346

Total revenue $ 813,864 $ 782,831

Community labor expenses:

Independent Living 58,284 57,140

Assisted Living and Memory Care 252,710 246,574

CCRCs 46,293 46,054

Other facility operating expenses:

Independent Living 44,601 43,165

Assisted Living and Memory Care 131,116 126,840

CCRCs 23,983 22,777

Total facility operating expenses 556,987 542,550

Segment operating income:

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Facility operating lease expense:

Independent Living 9,820 9,431

Assisted Living and Memory Care 39,906 37,908

CCRCs 3,381 3,125

Corporate and All Other ( 233 ) 1,032

Depreciation and amortization:

Independent Living 25,837 22,043

Assisted Living and Memory Care 51,640 49,023

CCRCs 8,732 8,837

Corporate and All Other 4,767 6,224

Asset impairment:

Loss (gain) on sale of communities, net — — — ( 36,296 )

Assisted Living and Memory Care 1,387 1,708

Income (loss) from operations $ 29,576 $ 19,246

(in thousands) September 30, 2024 December 31, 2023

Total assets:

Three Months Ended

(in thousands) 2025 2024

Interest expense:

Independent Living $ 15,588 $ 16,186

Assisted Living and Memory Care 37,671 36,002

CCRCs 5,357 5,804

Corporate and All Other 6,415 ( 305 )

Total interest expense $ 65,031 $ 57,687

Capital expenditures:

Independent Living $ 10,270 $ 12,720

Assisted Living and Memory Care 26,526 31,048

CCRCs 3,462 4,533

Corporate and All Other 2,891 2,757

Total capital expenditures $ 43,149 $ 51,058

(in thousands) March 31, 2025 December 31, 2024

Independent Living (4)

$ 1,230,952 $ 1,252,736

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Total assets $ 6,205,691 $ 6,335,562

(1) All revenue and other operating income is earned from external third parties in the United States.

(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 total carrying amount of goodwill is included within the Independent Living segment and was $ 27.3 million as of both September 30, 2024 and December 31, 2023.

(1) All revenue is earned from external third parties in the United States.

(2) Other facility operating expenses is primarily comprised of costs for food, utilities, maintenance, real estate taxes, insurance, marketing, paid referral fees, and other costs of operating the Company's communities.

(3) Segment operating income is defined as segment revenues less segment facility operating expenses (excluding facility depreciation and amortization) and costs incurred on behalf of managed communities.

(4) The Company's total carrying amount of goodwill is included within the Independent Living segment and was $ 27.3 million as of both March 31, 2025 and December 31, 2024.

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