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Based upon that evaluation, our President and Chief Executive Officer and our Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective.
−Removed: There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
+Added: There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Warning Concerning Forward-Looking Statements
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Forward-looking statements in this Quarterly Report on Form 10-Q relate to various aspects of our business, including:
−Removed: • The duration and severity of the COVID-19 pandemic and its impact on us and our managers' and other operators' and tenants' businesses,
−Removed: • The ability of our senior living community managers to minimize negative economic impacts, including the current inflationary conditions, supply chain challenges and possible recession, on our senior living communities and to manage them profitably and increase our returns,
+Added: • The duration and severity of the COVID-19 pandemic and its continuing impact on us and our managers' and other operators' and tenants' businesses,
+Added: • The ability of our senior living community managers to minimize negative economic impacts, including the current inflationary conditions and rising interest rates, supply chain challenges and a possible recession, on our senior living communities and to manage them profitably and increase our returns,
• Our belief that we are well positioned to weather the present disruptions facing the real estate industry and, in particular, the real estate healthcare industry, including the senior living industry,
−Removed: • Our belief that the healthcare sector and many of our tenants and managers and other operators provide essential services across the United States and the implication that our and our tenants' and managers' and other operators' businesses will remain open to provide such essential services,
• Whether the aging U.S.
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• The impacts of the COVID-19 pandemic on us and our managers and other operators and tenants,
−Removed: • The impacts of economic conditions, including increasing interest rates, inflation and a possible recession, and the capital markets on us and our managers and other operators and tenants,
+Added: • The impacts of economic conditions, including high inflation, rising interest rates, geopolitical risks or a possible recession, on us and our managers and other operators and tenants,
• Compliance with, and changes to, federal, state and local laws and regulations, accounting rules, tax laws and similar matters,
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• Acts of terrorism, outbreaks of pandemics, including the COVID-19 pandemic, or other manmade or natural disasters beyond our control.
−Removed: • Under the current economic conditions for the industries in which our properties and businesses operate, our managers and other operators and tenants may not be able to profitably operate their businesses at our properties, our tenants may become unable or unwilling to pay their rent obligations to us, or our senior living community managers may be unable to generate our minimum returns for sustained periods as a result of the COVID-19 pandemic or otherwise.
+Added: • Under the current economic conditions for the industries in which our properties and businesses operate or otherwise, our managers and other operators and tenants may not be able to profitably operate their businesses at our properties, our tenants may become unable or unwilling to pay their rent obligations to us, or our senior living community managers may be unable to generate our minimum returns for sustained periods.
Additionally, if we default under our credit facility or other debt obligations, we may be required to repay our outstanding borrowings and other debt.
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However, we may sell some or all of our AlerisLife common shares, or our ownership interest in AlerisLife may otherwise be diluted in the future,
−Removed: • Our current cash distribution rate to common shareholders is $0.01 per share per quarter, or $0.04 per share per year, due to the operating challenges and other economic impacts resulting from the COVID-19 pandemic.
• Our distribution rate may be set and reset from time to time by our Board of Trustees.
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• Rents that we receive from our properties may decline upon renewals or expirations of our leases because of changing market conditions or otherwise,
−Removed: • Although we have obtained a waiver from compliance with the fixed charge coverage ratio covenant included in our credit agreement through December 2022, if our operating results and financial condition are further adversely impacted by current economic conditions or otherwise, we may fail to comply with the terms of the waiver and other requirements under our credit agreement, and we may also fail to satisfy certain financial requirements under the agreements governing our public debt.
−Removed: For example, our ratio of consolidated income available for debt service to debt service was below the 1.5x incurrence requirement under our credit agreement and our public debt covenants as of June 30, 2022, and we cannot be certain how long this ratio will remain below 1.5x.
+Added: • Although we have obtained a waiver from compliance with the fixed charge coverage ratio covenant included in our credit agreement through December 2022, if our operating results and financial condition are further adversely impacted by current economic conditions or otherwise, or our operating results do not sufficiently and timely improve, we may fail to comply with the terms of the waiver and other requirements under our credit agreement, and we may also fail to satisfy certain financial requirements under the agreements governing our public debt.
+Added: For example, our ratio of consolidated income available for debt service to debt service was below the 1.5x incurrence requirement under our credit agreement and our public debt covenants as of September 30, 2022, and we cannot be certain how long this ratio will remain below 1.5x.
We are unable to incur additional debt until this ratio is at or above 1.5x on a pro forma basis, but we are not required to repay outstanding debt as a result of failure to comply with this financial requirement.
+Added: If we believe we will not be able to satisfy our financial or other covenants, we expect that we would seek waivers or amendments prior to any covenant violation or seek other financing alternatives;
+Added: however, we may fail to obtain any such waivers or amendments or financing alternatives on acceptable terms or at all,
• We are currently fully drawn under our revolving credit facility and could also be required to repay our outstanding debt in the event of non-compliance with certain other requirements of our credit agreement or the agreements governing our public debt.
+Added: In addition, pursuant to our credit agreement, the borrowing capacity under our revolving credit facility will be reduced to $586.4 million in January 2023 and, as such, we will be required to repay $113.6 million under our revolving credit facility by that time.
We may therefore experience future liquidity constraints, as we are currently unable to incur additional debt under our credit agreement or otherwise for failure to comply with the requirements of our credit agreement and the agreements governing our public debt, and we will be limited to our cash on hand or be forced to raise additional sources of capital or take other measures to maintain adequate liquidity.
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• The premiums used to determine the interest rate payable on our revolving credit facility and the facility fee payable on our revolving credit facility are based on our credit ratings, which are subject to change,
−Removed: • For the three months ended June 30, 2022, substantially all of our NOI was generated from properties where a majority of the revenues are derived from our tenants' and residents' private resources.
+Added: • For the three months ended September 30, 2022, substantially all of our NOI was generated from properties where a majority of the revenues are derived from our tenants' and residents' private resources.
This may imply that we will maintain or increase the percentage of our NOI generated from private resources at our senior living communities.
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If the government fails to pay us or our managers or other operators amounts due to us or them because of government defaults, shutdowns, budgetary constraints or otherwise, we and they may be significantly negatively impacted,
−Removed: • Circumstances that adversely affect the ability of seniors or their families to pay for our managers' or other operators' services, such as economic downturns or a possible recession, weak housing market conditions, higher levels of unemployment among our residents' family members, lower levels of consumer confidence, inflation, increasing
−Removed: interest rates, stock market volatility and/or changes in demographics generally could affect the profitability of our senior living communities,
+Added: • Circumstances that adversely affect the ability of seniors or their families to pay for our managers' or other operators' services, such as economic downturns or a possible recession, weak housing market conditions, higher levels of unemployment among our residents' family members, lower levels of consumer confidence, high inflation, rising interest rates, stock market volatility and/or changes in demographics generally could affect the profitability of our senior living communities,
• It is difficult to accurately estimate tenant space preparation costs.
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Accordingly, we cannot be sure that these agreements will remain in effect for continuing 20 year terms.
−Removed: Currently unexpected results could occur due to many different circumstances, some of which are beyond our control, such as economic conditions, including increasing interest rates, high inflation and a possible recession, other changes in capital markets or the economy generally, the COVID-19 pandemic and its aftermath, new legislation or regulations affecting our business or the businesses of our managers or other operators or tenants, changes in our managers' or other operators' or tenants' revenues or costs, worsening or lack of improvement of the financial condition or changes in our managers' or other operators' or tenants' financial conditions, deficiencies in operations by a manager or other operator of one or more of our senior living communities, acts of terrorism, war or other hostilities, pandemics, natural disasters or climate change and climate related events.
+Added: Currently unexpected results could occur due to many different circumstances, some of which are beyond our control, such as economic conditions, including high inflation, rising interest rates and a possible recession, other changes in capital markets or the economy generally, the COVID-19 pandemic and its aftermath, new legislation or regulations affecting our business or the businesses of our managers or other operators or tenants, changes in our managers' or other operators' or tenants' revenues or costs, worsening or lack of improvement of the financial condition or changes in our managers' or other operators' or tenants' financial conditions, deficiencies in operations by a manager or other operator of one or more of our senior living communities, acts of terrorism, war, other hostilities or other geopolitical risks, pandemics, natural disasters or climate change and climate related events.
The information contained elsewhere in this Quarterly Report on Form 10-Q or in our other filings with the SEC, including under the caption “Risk Factors”, or incorporated herein or therein, identifies other important factors that could cause differences from our forward-looking statements.
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Other Information
+Added: Risk Factors.
+Added: There have been no material changes to risk factors from those we previously disclosed in our Annual Report.
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.