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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties and include all statements that are not historical statements of fact and those regarding our intent, belief or ~~expectations, including those related to the COVID-19 pandemic.~~expectations. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "could," "would," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "believe," "project," "predict," "continue," "plan," "target," or other similar words or expressions. These forward-looking statements are based on certain assumptions and expectations, and our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Although we believe that expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our assumptions or expectations will be attained and actual results and performance could differ materially from those projected. Factors which could have a material adverse effect on our operations and future prospects or which could cause events or circumstances to differ from the forward-looking statements include, but are not limited ~~to:~~to, the impacts of the COVID-19 pandemic, including the response efforts of federal, state, and local government authorities, businesses, individuals, and us on our business, results of operations, cash flow, revenue, expenses, liquidity, and our strategic initiatives, including plans for future growth, which will depend on many factors, some of which cannot be foreseen, including the duration, severity, and breadth of the pandemic and any resurgence or variants of the disease, including the Delta variant, the impact of COVID-19 on the ~~nation's~~nation’s economy and debt and equity markets and the local economies in our markets, the development, availability, utilization, and ~~availability~~efficacy of COVID-19 testing, therapeutic agents, and vaccines and the prioritization of such resources among businesses and demographic groups, government financial and regulatory relief efforts that may become available to business and individuals, including our ability to qualify for and satisfy the terms and conditions of financial ~~relief;~~relief, perceptions regarding the safety of senior living communities during and after the pandemic, changes in demand for senior living communities and our ability to adapt our sales and marketing efforts to meet that demand, the impact of COVID-19 on our residents’ and their families’ ability to afford our resident fees, including due to changes in unemployment rates, consumer confidence, housing markets, and equity markets caused by COVID-19, changes in the acuity levels of our new residents, the disproportionate impact of COVID-19 on seniors generally and those residing in our communities, the duration and costs of our response efforts, including increased equipment, supplies, labor, litigation, testing, vaccination clinic, and other expenses, potentially greater associate attrition and use of contract labor due to our associate vaccine mandate, the impact of COVID-19 on our ability to complete financings and refinancings of various assets, or other transactions ~~(including dispositions)~~ or to generate sufficient cash flow to cover required interest and lease payments and to satisfy financial and other covenants in our debt and lease documents, increased regulatory requirements, including unfunded, mandatory testing, increased enforcement actions resulting from COVID-19, ~~including those~~government action that may limit our collection or discharge efforts for delinquent accounts, and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or our response efforts; events which adversely affect the ability of seniors to afford resident fees, including downturns in the economy, housing ~~markets,~~market, consumer confidence, or the equity markets and unemployment among resident family ~~members, which may be adversely impacted by the pandemic;~~members; changes in reimbursement rates, methods, or timing under governmental reimbursement programs including the Medicare and Medicaid programs; the impact of ongoing healthcare reform efforts; the effects of senior housing construction and development, ~~oversupply~~lower industry occupancy (including due to the pandemic), and increased competition; conditions of housing markets, regulatory changes, acts of nature, and the effects of climate change in geographic areas where we are concentrated; terminations of our resident agreements and vacancies in the living spaces we lease, including due to the pandemic; limits on our ability to use net operating loss carryovers to reduce future tax payments; failure to maintain the security and functionality of our information systems, to prevent a cybersecurity attack or breach, or to comply with applicable privacy and consumer protection laws, including HIPAA; our ability to complete our capital expenditures in accordance with our plans; our ability to identify and pursue development, investment and acquisition opportunities and our ability to successfully integrate acquisitions; competition for the acquisition of assets; our ability to complete pending or expected disposition, acquisition, or other transactions on agreed upon terms or at all, including in respect of the satisfaction of closing conditions, the risk that regulatory approvals are not obtained or are subject to unanticipated conditions, and uncertainties as to the timing of closing, and our ability to identify and pursue any such opportunities in the future; risks related to the implementation of our strategy, including initiatives undertaken to execute on our strategic priorities and their effect on our results; delays in obtaining regulatory approvals; disruptions in the financial markets ~~including those related to~~or decreases in the ~~pandemic,~~appraised values, performance, or occupancy of our communities that affect our ability to obtain financing or extend or refinance debt as it matures and our financing costs; the risks associated with current global economic conditions, including changes related to the pandemic, and general economic factors such as inflation, the consumer price index, commodity costs, fuel and other energy costs, costs of salaries, wages, benefits, and insurance, interest rates, and tax rates; the impact of seasonal contagious illness or an outbreak of COVID-19 or other contagious disease in the markets in which we operate; our ability to generate sufficient cash flow to cover required interest and long-term lease payments and to fund our planned capital ~~projects, which may be adversely affected by the pandemic; the effect of our indebtedness and long-term leases on our liquidity;~~projects; the effect of our non-compliance with any of our debt or lease agreements (including the financial covenants contained therein), including the risk of lenders or lessors declaring a cross default in the event of our non-compliance with any such agreements and the risk of loss of our property securing leases and indebtedness due to any resulting lease terminations and foreclosure actions; the effect of our indebtedness and long-term leases on our liquidity; the potential phasing out of LIBOR which may increase the costs of our debt obligations; our ability to obtain additional capital on terms acceptable to us;

departures of key officers and potential disruption caused by changes in management; increased competition for or a shortage of personnel (including due to the pandemic or general labor market conditions), wage pressures resulting from increased competition, low unemployment levels, minimum wage increases and changes in overtime laws, and union activity; failure to maintain the security and functionality of our information systems, to prevent a cybersecurity attack or breach, or to comply with applicable privacy and consumer protection laws, including HIPAA; our inability to achieve or maintain profitability; our ability to complete pending or expected disposition, acquisition, or other transactions on agreed upon terms or at all, including in respect of the satisfaction of closing conditions, the risk that regulatory approvals are not obtained or are subject to unanticipated conditions, and uncertainties as to the timing of closing, and our ability to identify and pursue any such opportunities in the future; our ability to obtain additional capital on terms acceptable to us; our ability to complete our capital expenditures in accordance with our plans; our ability to identify and pursue development, investment, and acquisition opportunities and our ability to successfully integrate acquisitions; competition for the acquisition of assets; delays in obtaining regulatory approvals; terminations, early or otherwise, or non-renewal of management agreements; conditions of housing markets, regulatory changes, acts of nature, and the effects of climate change in geographic areas where we are concentrated;

terminations of our resident agreements and vacancies in the living spaces we lease, which may be adversely impacted by the pandemic; departures of key officers and potential disruption caused by changes in management; risks related to the implementation of our strategy, including initiatives undertaken to execute on our strategic priorities and their effect on our results; actions of activist stockholders, including a proxy contest; market conditions and capital allocation decisions that may influence our determination from time to time whether to purchase any shares under our existing share repurchase program and our ability to fund any repurchases; our ability to maintain consistent quality control; a decrease in the overall demand for senior housing, which may be adversely impacted by the pandemic; environmental contamination at any of our communities; failure to comply with existing environmental laws; ~~costs to defend against, or~~ an adverse determination or resolution of complaints filed against ~~us;~~us, including class action and stockholder derivative complaints; the cost and difficulty of complying with increasing and evolving regulation; costs to respond to, and adverse determinations resulting from, government reviews, audits and investigations; unanticipated costs to comply with legislative or regulatory developments; the risks associated with current global economic conditions and general economic factors such as inflation, the consumer price index, commodity costs, fuel and other energy costs, costs of salaries, wages, benefits, and insurance, interest rates, and tax rates; the impact of seasonal contagious illness or an outbreak of COVID-19 or other contagious disease in the markets in which we operate; actions of activist stockholders, including a proxy contest; as well as other risks detailed from time to time in our filings with the Securities and Exchange Commission, ~~("SEC"),~~ including those set forth under "Item 1A. Risk Factors" contained in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 and Part II, "Item 1A. Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in such SEC filings. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect management's views as of the date of this Quarterly Report on Form 10-Q. We cannot guarantee future results, levels of activity, performance or achievements, and, except as required by law, we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

Overview

~~As of September 30, 2020, we~~We are the ~~largest~~nation’s premier operator of senior living communities, ~~in the United States based on total capacity,~~ ~~with 726~~operating and managing 682 communities in 4441 states ~~and~~as of September 30, 2021, with the ability to serve ~~approximately 65,000~~more than 60,000 residents. We offer our residents access to a broad continuum of services across the most attractive sectors of the senior living industry. WeWe operate and manage independent living, assisted living, memory care, and co~~ntinuing~~continuing care retirement communities ("CCRCs"). ~~We also offer a range of home health, hospice, and outpatient therapy services to more than 17,000 patients as of that date.~~

Our goal is to be the first choice in senior living by being the nation's most trusted and effective senior living provider and employer. With our range of community and service offerings, we believe that we are positioned to take advantage of favorable demographic trends over time. Our community and service offerings combine housing with hospitality and healthcare services. Our senior living communities ~~offer~~and our comprehensive network help to provide seniors with care and services in an environment that feels like home. Our expertise in healthcare, hospitality, and real estate provides residents ~~a supportive home-like setting, assistance~~ with ~~activities of daily living such as eating, bathing, dressing, toileting, transferring/walking,~~opportunities to improve wellness, pursue passions, and ~~in certain communities, licensed skilled nursing services. We also provide home health, hospice,~~stay connected with friends and ~~outpatient therapy services to residents of many of our communities and to seniors living outside of our communities.~~loved ones. By providing residents with a range of service options as their needs change, we provide greater continuity of care, enabling seniors to age-in-place, which we believe enables them to maintain residency with us for a longer period of time. The ability of residents to age-in-place is also beneficial to our residents and their families who are concerned with care decisions for their elderly relatives.

As of September 30, 2021, we operated in four business segments: Independent Living; Assisted Living and Memory Care; CCRCs; and Management Services. Prior to July 1, 2021, we had an additional reportable segment, Health Care Services. On July 1, 2021, we sold 80% of our equity in the Health Care Services segment, through which we formerly provided home health, hospice, and outpatient therapy services to our residents and seniors living outside our communities. For periods beginning July 1, 2021, the results of operations and financial position of the Health Care Services segment are deconsolidated from our consolidated financial statements and our 20% equity interest in the Health Care Services venture ("HCS Venture") is accounted for under the equity method of accounting.

COVID-19 Pandemic Update

The ~~United States broadly continues to experience the~~ COVID-19 pandemic ~~which~~ has significantly disrupted ~~and likely will continue to significantly disrupt for some period, our nation’s economy,~~ the senior living industry and our business. Although a significant portion of our corporate support associates began working from home in March 2020, we continue to serve and care for seniors through the pandemic. Due to the average age and prevalence of chronic medical conditions among our residents and patients, they generally are at disproportionately higher risk of hospitalization and adverse outcomes if they contract COVID-19.

The health and wellbeing of our residents, patients, and associates is and has been our highest ~~priority. We initiated our COVID-19 preparation efforts in January 2020 and~~priority as we continue to ~~actively monitor requirements~~serve and ~~guidance~~care for seniors through the COVID-19 pandemic. In addition to the updates below, readers are directed to the "COVID-19 Pandemic" section of ~~federal, state,~~Item 7. Management’s Discussion and ~~local governments~~Analysis of Financial Condition and ~~agencies, including~~Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission ("SEC") on February 25, 2021 for more information about the impact of the pandemic and our response efforts on our business, results of operations, and financial condition.

Vaccine Update. By April 9, 2021, we completed at least three rounds of COVID-19 vaccine clinics at all of our communities through the Pharmacy Partnership for Long-Term Care Program offered through the U.S. Centers for Disease Control and Prevention ~~and U.S. Centers for Medicare & Medicaid Services~~ ("~~CMS"~~CDC")~~, and adapt~~. Upon completion of such clinics, our ~~policies and procedures when applicable. Our response efforts center on infection prevention and control protocols.~~COVID-19 positive resident caseload had decreased by 97% since the peak in mid-December 2020. As of October 31, 2021, our resident vaccine acceptance rate was 95%. The CDC has recently recommended that certain populations, including residents in long-term care settings, should receive a COVID-19 booster dose. We have ~~enhanced and reinforced training~~completed booster vaccine clinics in the vast majority of our communities. We have adopted a policy requiring our associates to be vaccinated against COVID-19, subject to limited exceptions, which we are implementing in ~~such protocols. Upon confirmation of positive COVID-19 exposure at~~ a phased approach beginning with our corporate associates and field and community we follow government guidance regarding minimizing further exposure, including associates' adhering to personal protection protocols, restricting new resident admissions, and in some cases isolating residents.leadership.

~~Seeking~~

Rebuilding Occupancy. We continue to ~~prevent~~execute on key initiatives to rebuild occupancy lost due to the ~~introduction of COVID-19 into our communities,~~pandemic. Our consolidated senior housing monthly net move-ins and ~~to help control further exposure to infections within communities,~~move-outs turned positive in March ~~2020~~2021 for the first time since the pandemic began. Beginning in March 2021, we ~~began restricting visitors at all our communities~~have achieved eight consecutive months of weighted average consolidated senior housing occupancy growth on a sequential basis. According to ~~essential healthcare personnel and certain compassionate care situations, screening associates and permitted visitors, suspending group outings, modifying communal dining and programming~~data from the National Investment Center for the Seniors Housing & Care Industry ("NIC"), seniors housing occupancy increased 120 basis points from the second quarter to ~~comply with social distancing guidelines and, in most cases, implementing in-room only dining and activities programming, requesting that residents refrain from leaving~~ the ~~community unless medically necessary, and requiring new residents and residents returning from a hospital or nursing home~~third quarter of 2021 for stabilized portfolios. Our weighted average consolidated senior housing occupancy increased 200 basis points sequentially for the third quarter of 2021 compared to ~~isolate in their apartment for fourteen days. These restrictions were in place across our portfolio for~~the second quarter of 2021. During the three months ended ~~June~~September 30, ~~2020.~~2021, the nationwide spread of the Delta variant caused some moderation in our sequential monthly occupancy growth rate. We ~~have adopted a framework for determining when to ease restrictions at each~~believe that some potential residents and their families were more cautious, or temporarily delayed their decision regarding, moving into senior living communities in certain areas as the Delta variant spread. The table below sets forth our consolidated occupancy trend during the pandemic.


	Q1 2020		Q2 2020		Q3 2020		Q4 2020		Q1 2021		Q2 2021		Q3 2021
Weighted average	83.2	%	78.7	%	75.3	%	72.7	%	69.6	%	70.5	%	72.5	%
Quarter end	82.2	%	77.8	%	75.0	%	71.5	%	70.6	%	72.6	%	74.2	%


	January 2021		February 2021		March 2021		April 2021		May 2021		June 2021		July 2021		August 2021		September 2021		October 2021
Weighted average	70.0	%	69.4	%	69.4	%	69.9	%	70.5	%	71.2	%	72.0	%	72.5	%	73.0	%	73.3	%
Month end	70.4	%	70.1	%	70.6	%	71.1	%	71.6	%	72.6	%	73.3	%	73.7	%	74.2	%	74.5	%

As of July 31, 2021, all of our communities ~~based on~~were open for visitors, new resident move-ins, and prospective residents. During the three months ended September 30, 2021, several ~~criteria, including regulatory requirements and guidance, completion~~ of ~~baseline testing at the community, and the community having no current confirmed positive COVID-19 cases. Under this framework, we began easing~~our communities experienced restrictions on visitors, new resident move-ins, and prospective residents, with a ~~community-by-community basis~~peak of such restrictions occurring in July 2020 where regulatory requirements and guidance allow, which easing may have included permitting outdoor, and in some cases, indoor visits with families, reduced capacity communal dining, limited communal activities programming, and in-person prospective resident visits. Due to the vulnerable naturemid-September 2021. As of October 31, 2021, substantially all of our ~~residents, we expect restrictions at our~~ communities ~~to continue~~were open for ~~some time,~~visitors, new resident move-ins, and weprospective residents. We may revert to more restrictive measures at our communities, including restrictions on visitors and move-ins, if the pandemic worsens, or as necessary to comply with regulatory ~~requirements.~~

~~In April 2020, we proactively commenced a resident and associate testing program for our communities. We conducted~~requirements, or at the ~~testing program in conjunction with~~direction of state ~~and~~or local testing requirements at several of our communities. We undertook the program to identify positive, but asymptomatic, individuals, to better understand how our infection protocols are working, and to help minimize the exposure to residents and associates of someone known to be COVID-19 positive. In July 2020, we completed baseline testing at all of our communities. Through October 31, 2020, our testing program has accumulated more than 185,000 test results. Approximately 1% of our residents had current COVID-19 positive test results on October 31, 2020.

Further testing, whether undertaken proactively or as a result of regulatory requirements, may result in significant additional expense, additional temporary restrictions on move-ins at affected communities, continued need for isolating positive residents, increased use of personal protection equipment by our associates, and increased labor costs.

The pandemic, including the related restrictions at our communities, have significantly disrupted demand for senior living communities and the sales process, which typically includes in-person prospective resident visits within communities. We believe potential residents and their families are more cautious regarding moving into senior living communities while the pandemic continues, and such caution may persist for some time. In response to these developments, we have redesigned our sales process to include virtual tours, video engagement, and outdoor prospective resident meetings, enhanced and adapted our marketing programs to address the social distancing environment, and sought to strengthen our relationships with referral partners. During the third quarter of 2020, we returned to using in-person prospective resident visits for a majority of our communities. However, several large markets continue with virtual-only prospective resident visits. Restrictions on move-ins were eased at our communities beginning in July 2020, with approximately 98% of our communities accepting new residents by the end of September 2020 compared to 86% of our communities as of June 30, 2020. On October 31, 2020, we are accepting new residents to 95% of our communities.health authorities. We cannot predict with reasonable certainty whether or when ~~demand for senior living communities~~our occupancy will return to pre-COVID-19 pandemic levels or the extent to which the pandemic’s effect on ~~demand~~occupancy may adversely affect the amount of resident fees we are able to collect from our residents.

~~The pandemic, including the related restrictions at~~Revenue and Expense Impacts. Compared to our ~~communities, began to adversely impact our occupancy and resident fee revenue significantly during March~~pre-pandemic expectations for fiscal 2020, as new resident leads, visits (including virtual visits), and move-in activity declined significantly compared to typical levels. The year-over-year decrease in monthly move-ins of our same community portfolio has moderated from 64.2% in April 2020 to 22.9% in September 2020, and move-ins for the third quarter of 2020 improved 38.0% sequentially from the second quarter of 2020. Despite the slowing pace of reduced move-ins, our same community weighted average occupancy has declined in each month of the pandemic, from 83.0% in March 2020 to 74.4% in September 2020, and was 74.0% in October 2020. Wewe estimate that the pandemic ~~including the related restrictions at our communities,~~ resulted in ~~$70.8~~$76.4 million and ~~$115.8~~$303.4 million of lost resident fee revenue for the three and nine months ended September 30, 2021, respectively. Estimated lost resident fee revenue includes $76.4 million and $252.4 million in our ~~same community~~consolidated senior housing portfolio for the three and nine months ended September 30, ~~2020, respectively. Further deterioration of our resident fee revenue will result from lower move-in activity~~2021, respectively, and ~~the resident attrition inherent~~$51.0 million in our business, which may increase due to the impacts of COVID-19. Lower controllable move-out activity during the pandemic may continue to partially offset future adverse revenue impacts. Our home health average daily census also began to decrease in March 2020 due to lower occupancy in our communities and fewer elective medical procedures and hospital discharges, resulting in a 14.4% year-over-year decline in home health average daily censusHealth Care Services segment for the ~~three~~nine months ended September 30, ~~2020. We expect home health average daily census to continue to gradually recover sequentially with increased elective medical procedures and hospital discharges and~~2021. On a cumulative basis through September 30, 2021, we estimate that the pandemic has resulted in approximately $584.5 million of lost resident fee revenue, including $480.9 million in our consolidated senior housing ~~occupancy.~~portfolio. The estimated lost revenue represents the difference between the actual resident fee revenue for the period and our pre-pandemic expectations for the 2020 period.

~~Facility~~For the three and nine months ended September 30, 2021, we recognized $7.2 million and $44.3 million, respectively, of facility operating expense for incremental direct costs to respond to the pandemic. For the three and nine months ended September 30, 2020, ~~includes~~we recognized $24.5 million and $95.1 million, respectively, of ~~incremental~~such facility operating expense. The direct costs ~~to prepare for and respond to the pandemic, including costs~~include those for: acquisition of additional personal protective equipment ("PPE"), medical equipment, and cleaning and disposable food service ~~supplies,~~supplies; enhanced cleaning and environmental ~~sanitation,~~sanitation; increased employee-related costs, including labor, ~~increased~~ workers compensation, and health plan expense; increased expense ~~consulting and professional services,~~for general liability claims; and COVID-19 testing of residents and associates where not otherwise covered by government payor or third-party insurance sources. ~~We are not able to reasonably predict~~On a cumulative basis through September 30, 2021, we have incurred $169.8 million of pandemic related facility operating expense since the ~~total amount~~beginning of ~~costs~~fiscal 2020. For the three and nine months ended September 30, 2021, we ~~will incur related to the pandemic,~~recorded $0.6 million and ~~such costs are likely to be substantial. As described further below, we also recorded~~$13.4 million, respectively, of non-cash impairment charges in our operating results ~~of $95.2 million for the nine months ended September 30, 2020~~ for our operating lease right-of-use assets and property, plant and equipment and leasehold intangibles, primarily due to the COVID-19 pandemic and lower than expected operating performance at communities ~~for which assets were impaired.~~with impaired assets. For the three and nine months ended September 30, 2020, we recorded $8.2 million and $95.2 million, respectively, of such non-cash impairment charges.

Liquidity. We have taken, and continue to take, actions to enhance and preserve our liquidity in response to the pandemic. During the nine months ended September 30, 2020, we have completed our financing plans in the regular course of business, including refinancing substantially all of our remaining 2020 and 2021 maturities. In addition, on August 31, 2020, we terminated our $250 million revolving credit facility and obtained $266.9 million of non-recourse mortgage financing on 16 communities, most of which had secured the credit facility prior to its termination. See Note 10 for further information regarding our financings. During the nine months ended September 30, 2020, we accepted $36.1 million of cash for grants under the Public Health and Social Services Emergency Fund (the "Provider Relief Fund") and $87.5 million of accelerated/advanced Medicare payments, and we deferred $50.1 million of the employer portion of social security payroll taxes. Each of these programs were created or expanded under the Coronavirus Aid, Relief, and Economic Security Act of 2020 ("CARES Act"), as described below. We also have delayed or canceled a number of elective capital expenditure projects, resulting in an approximate $65 million reduction to our pre-pandemic full-year 2020 capital expenditure plans, and suspended repurchases under our existing share repurchase program. On July 26, 2020, we restructured our 120 community triple-net master lease with Ventas, Inc. ("Ventas") in a multipart transaction. The components included, among other things, reducing our initial annual minimum rent to $100 million, representing a reduction of approximately $86 million over the twelve months ending June 30, 2021, and removal of the prior

requirements that we satisfy financial covenants and maintain a security deposit with Ventas. We paid a $119.2 million one-time cash lease payment to Ventas in connection with our lease restructuring transaction effective July 26, 2020. See "Transaction Activity and Impact of Dispositions on Results of Operations" below for more information about the Ventas restructuring.

As of September 30, ~~2020,~~2021, our total liquidity was ~~$490.7~~$645.8 million, consisting of ~~$354.6~~$478.5 million of unrestricted cash and cash equivalents, ~~and $136.1~~$157.9 million of marketable ~~securities.~~securities, and $9.4 million of availability on our secured credit facility. We continue to seek opportunities to enhance and preserve our liquidity, including through ~~reducing expenses~~increasing occupancy and ~~elective capital expenditures,~~maintaining expense

discipline, continuing to evaluate our financing structure and the state of debt markets, and seeking further government-sponsored financial relief related to the ~~COVID-19~~ pandemic. There is no assurance that debt financing will continue to be available on terms consistent with our expectations or at all, or that our efforts will be successful in seeking further government-sponsored financial relief or regarding the amount of, or conditions required to qualify for, any such relief.

~~In response to the pandemic,~~Financial Relief. The Coronavirus Aid, Relief, and Economic Security Act of 2020 ("CARES Act"), signed into law on March 27, 2020, ~~the President signed the CARES Act into law, which was amended~~ and ~~expanded by the~~ Paycheck Protection Program and Health Care Enhancement Act, signed into law on April 24, ~~2020. The legislation provides~~2020, provide liquidity and financial relief to certain businesses, among other things. ~~The~~Certain impacts ~~to us~~ of ~~certain provisions of the CARES Act~~such programs are ~~summarized~~provided below.

•During the ~~three and~~ nine months ended September 30, ~~2020,~~2021, we accepted ~~$2.6~~$0.8 million ~~and$36.1 million~~ ofof cash ~~for~~from grants from the Public Health and Social Services Emergency Fund ("Provider Relief ~~Fund, respectively, which was expanded~~Fund") administered by the ~~CARES Act to provide~~U.S. Department of Health and Human Services ("HHS"), under which grants ~~or other funding mechanisms~~have been made available to eligible healthcare providers for healthcare related expenses or lost revenues attributable to COVID-19. The ~~accepted~~ grants ~~were~~received in the nine months ended September 30, 2021 represented incentive payments made ~~available pursuant to the following distributions from the Provider Relief Fund:~~

•$28.9 million pursuant to the Phase 1 General Distribution, which generally related to home health, hospice, outpatient therapy, and skilled nursing care provided through our Health Care Services and CCRCs segments.

•~~$4.6 million pursuant to the Skilled Nursing Facility Targeted Distribution, which generally related to our certified skilled nursing facilities.~~

•~~$2.6 million~~ pursuant to the Nursing Home Infection Control Distribution, which related to our skilled nursing care provided through our ~~CCRCs segments. Further funding may become available to us from this distribution based on an incentive program that measures skilled nursing facilities’ COVID-19 infection rates and mortality.~~CCRCs.

~~We have applied~~In September 2021, HHS announced that it has allocated $17.0 billion for ~~additional grants pursuant to~~a Phase 4 general distribution from the Provider Relief ~~Fund's~~Fund. According to HHS guidance, it intends to allocate 75% of the Phase ~~2 General Distribution, generally related to our senior housing segments. The amount of such grants are expected to be~~4 general distribution based on ~~2% of a portion of our 2018 revenues from patient care. We expect to receive up to approximately $50 million of grants from this allocation.~~

~~We have also applied for additional grants pursuant to the Provider Relief Fund’s Phase 3 General Distribution, for which HHS allocated up to $20 billion. According to HHS' guidance,~~ eligible ~~applicants will receive grant amounts to ensure that they have received approximately 2% of their annual patient care revenue, plus an additional percentage of their change~~applicants’ changes in revenues ~~minus their~~and operating expenses ~~in each case~~ from patient care attributable to ~~COVID-19.~~

~~Grants from~~COVID-19 for the ~~Provider Relief Fund are subject~~second half of 2020 and the first quarter of 2021, with smaller providers to receive a supplement in addition to a base payment. HHS will determine the ~~terms and conditions~~exact amount of the ~~program, including that such funds may only be used~~base payments and supplements after analyzing data from all the applications received. HHS intends to ~~prevent, prepare~~allocate 25% of the Phase 4 general distribution for ~~and respond to COVID-19 and will reimburse only for healthcare related expenses or lost revenues~~bonus payments that are ~~attributable~~based on the amount and type of services provided to ~~COVID-19. The permissible uses of grants from~~Medicaid, Children's Health Insurance Program ("CHIP"), and Medicare patients. We applied for the ~~Nursing Home Infection Control Distribution are further limited certain infection control expenses.~~

~~During the three~~Phase 4 general distribution and ~~nine months ended September 30, 2020, we recognized~~ ~~$8.6 million~~ ~~and~~ ~~$35.0 million, respectively, of the grants as other operating income based upon our estimates of our satisfaction of the conditions of the grants during such period.~~

~~HHS continues to evaluate and provide allocations of, and regulation and guidance regarding, grants made under the Provider Relief Fund. We~~ intend to pursue any additional funding that may become ~~available pursuant to the Provider Relief Fund. However, there~~available. There can be no assurance that we will qualify for, or receive, such future grants in the amount we expect, that additional restrictions on the permissible uses or terms and conditions of the grants will not be imposed by HHS, or that future funding programs will be made available for which we qualify.

•During the ~~three and nine months~~year ended ~~September 30,~~December 31, 2020, we received ~~$2.5 million and~~ $87.5 million ~~respectively,~~ under the Accelerated and Advance Payment Program administered by ~~CMS,~~the Centers for Medicare & Medicaid Services ("CMS"), $75.2 million of which related to our Health Care Services segment and $12.3 million related to our CCRCs segment and of which $2.5 million and $87.5 million was ~~temporarily expanded by~~received in the ~~CARES Act. Under the program, we requested acceleration/advancement~~three and nine months ended September 30, 2020, respectively. Recoupment of ~~100% of our Medicare payment amount for a three-month period. The Continuing Appropriations Act, 2021 and Other Extensions Act, enacted on October 1, 2020,~~

~~amended the repayment terms for accelerated/advanced payments. As amended, recoupment of accelerated/~~advanced payments ~~will begin~~began one year after payments were ~~issued. Payments will be recouped~~issued at a rate of 25% of Medicare payments for the first eleven months following the anniversary of issuance and at a rate of 50% of Medicare payments for the next six months. Any outstanding balance of ~~accelerated/~~advanced payments will be due following such recoupment period. WeDuring the three and nine months ended September 30, 2021, $3.5 million and $17.8 million, respectively, of the advanced payments were recouped. Pursuant to the sale of 80% of our equity in our Health Care Services segment (as described below), $63.6 million of such obligations related to our Health Care Services segment were retained by the unconsolidated HCS Venture. As of September 30, 2021, the outstanding balance of advanced payments related to our CCRCs segment was $6.1 million, of which we expect recoupment of approximately ~~$44~~$3.0 million induring the three months ended December 31, 2021 and ~~recoupment or repayment of~~ the ~~remaining amount~~remainder in 2022.

•~~Under~~During the ~~CARES Act,~~year ended December 31, 2020, we ~~have elected to defer~~deferred payment of $72.7 million of the employer portion of social security payroll taxes incurred from March 27, 2020 tothrough December 31, ~~2020.~~2020 pursuant to the CARES Act. One-half of such deferral amount will become due on each of December 31, 2021 and December 31, 2022. AsPursuant to the sale of ~~September 30, 2020, we have deferred payment~~80% of $50.1 million under the program and intend to defer an additional approximately $25 million of the employer portion of payroll taxes estimated to be incurred for the three months ending December 31, 2020.

•~~The CARES Act temporarily suspended the 2% Medicare sequestration for the period May 1, 2020 to December 31, 2020, which primarily benefits~~our equity in our Health Care Services ~~segment. This suspension had a favorable impact~~segment, $9.6 million of ~~$1.6~~such obligations related to our Health Care Services segment were retained by the unconsolidated HCS Venture. We expect to pay $31.6 million of the deferred payments in both December 2021 and $2.5 million on the segment’s resident fee revenue for the three and nine months ended September 30, 2020, respectively. We estimate that the suspension will have a $1.5 million favorable impact on the segment’s resident fee revenue for the three months ended December 31, 2020.2022.

•We ~~continue to evaluate our eligibility~~are eligible to claim the employee retention ~~tax~~ credit ~~under the CARES Act~~ for certain of our ~~associates.~~associates under the CARES Act. The ~~refundable tax~~ credit for 2020 is available to employers that fully or partially ~~suspend~~suspended operations during any calendar quarter in 2020 due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings due to COVID-19, and is equal to 50% of qualified wages paid after March 12, 2020 through December 31, 2020 to qualified employees, with a maximum credit of $5,000 per employee. ~~We estimate that~~During the nine months ended September 30, 2021, we ~~will be eligible~~recognized $9.9 million of employee retention credits on wages paid from March 12, 2020 to December 31, 2020 within other operating income, of which none were recognized during the three months ended September 30, 2021. During the three and nine months ended September 30, 2021, we received $1.1 million for the employee retention credits, which were previously recognized within other operating income. The credit was modified and extended by subsequent legislation for wages paid from January 1, 2021 through December 31, 2021, and we are assessing our eligibility to claim ~~tax credits of $10 million or more. However, there~~such credit. There can be no assurance that we will qualify for, or receive, ~~tax~~ credits in the amount or on the timing we expect.

In addition to the grants described above, during the three and nine months ended September 30, 2021, we received and recognized $0.1 million and $1.4 million, respectively, of other operating income from grants from other government sources.

We cannot predict with reasonable certainty the impacts that COVID-19 ultimately will have on our business, results of operations, cash flow, and liquidity, and our response efforts may continue to delay or negatively impact our strategic initiatives, including plans for future growth. The ultimate impacts of COVID-19 will depend on many factors, some of which cannot be foreseen, including the duration, severity, and breadth of the pandemic and any resurgence or variants of the ~~disease;~~disease, including the Delta variant; the impact of COVID-19 on the nation’s economy and debt and equity markets and the local economies in our markets; the development, availability, utilization, and ~~availability~~efficacy of COVID-19 testing, therapeutic agents, and vaccines and the prioritization of such resources among businesses and demographic groups; government financial and regulatory relief efforts that may become available to business and individuals, including our ability to qualify for and satisfy the terms and conditions of financial relief; perceptions regarding the safety of senior living communities during and after the pandemic; changes in demand for senior living communities and our ability to adapt our sales and marketing efforts to meet that demand; the impact of COVID-19 on our residents’ and their families’ ability to afford our resident fees, including due to changes in unemployment rates, consumer confidence, housing markets, and equity markets caused by COVID-19; changes in the acuity levels of our new residents; the disproportionate impact of COVID-19 on seniors generally and those residing in our communities; the duration and costs of our response efforts, including increased equipment, supplies, labor, litigation, testing, vaccination clinic, and other expenses; potentially greater associate attrition and use of contract labor due to our associate vaccine mandate; the impact of COVID-19 on our ability to complete financings and refinancings of various assets or other transactions ~~(including dispositions)~~ or to generate sufficient cash flow to cover required debt, interest, and lease payments and to satisfy financial and other covenants in our debt and lease documents; increased regulatory requirements, including unfunded, mandatory testing; increased enforcement actions resulting from ~~COVID-19, including those~~COVID-19; government action that may limit our collection or discharge efforts for delinquent accounts; and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or our response efforts.

~~Transaction Activity~~

Sale of Health Care Services

On July 1, 2021, we completed the sale of 80% of our equity in our Health Care Services segment to affiliates of HCA Healthcare, Inc. ("HCA Healthcare") for a purchase price of $400.0 million in cash, subject to certain adjustments set forth in the Securities Purchase Agreement (the “Purchase Agreement”) dated February 24, 2021, including a reduction for the remaining outstanding balance as of the closing of Medicare advance payments and ~~Impact~~deferred payroll tax payments related to the Health Care Services segment (the "HCS Sale"). We received net cash proceeds of ~~Dispositions~~$305.8 million at closing on ~~Results~~July 1, 2021 and $6.8 million upon completion of ~~Operations~~the post-closing net working capital adjustment in October 2021. The Purchase Agreement also contained certain agreed upon indemnities for the benefit of the purchaser. Pursuant to the Purchase Agreement, at closing of the transaction, we retained a 20% equity interest in the HCS Venture.

The results and financial position of our Health Care Services segment were deconsolidated from our consolidated financial statements as of July 1, 2021 and our 20% equity interest in the HCS Venture is accounted for under the equity method of accounting subsequent to that date. As of July 1, 2021, we recognized a $100.0 million asset within investment in unconsolidated ventures on our consolidated balance sheet for the estimated fair value of our retained 20% noncontrolling interest in the HCS Venture. We recognized a $288.2 million gain on sale, net of transaction costs, within our condensed consolidated statement of operations for the three months ended September 30, 2021 for the HCS Sale. Refer to Note 17 to the condensed consolidated financial statements for selected financial data for the Health Care Services segment through June 30, 2021.

In September 2021, the HCS Venture entered into a Securities Purchase Agreement with LHC Group Inc., providing for the sale of home health, hospice, and outpatient therapy agencies in areas not served by HCA Healthcare. Upon the completion of the sale on November 1, 2021, we received $35.0 million of cash distributions from the HCS Venture from the net sale proceeds, which further enhanced our liquidity. We continue to retain a 20% equity interest in the remaining HCS Venture, which continues to operate home health, hospice, and outpatient therapy agencies in areas served by HCA Healthcare.

Community Transactions

During the period from January 1, ~~2019~~2020 through September 30, ~~2020,~~2021, we ~~acquired~~terminated triple-net lease obligations on an aggregate of 33 communities (2,978 units), including through the acquisition of 27 formerly leased communities (2,453 units), we sold 16four owned communities ~~(2,143~~(504 units), and we sold our ownership interest in our unconsolidated entry fee CCRC ~~Venture~~venture (the "CCRC Venture") with Healthpeak Properties, Inc. ("Healthpeak")~~, and our triple-net lease obligations on 14 communities (937 units) were terminated.~~. On July 26, 2020, we entered into definitive agreements with Ventas, Inc. ("Ventas") to restructure our 120 community (10,174 units) triple-net master lease arrangements. In addition, we conveyed to Ventas five communities (471 units) and manage the communities following the closing. ~~Completed transactions and cash lease payments during the nine months ended September 30, 2020 have reduced our future minimum lease payments by approximately $1.0 billion, or 36%.~~

~~Summaries of the significant transactions impacting the periods presented, and the impacts of dispositions of owned and leased communities on our results of operations, are included below.~~ See Item 7. Management's Discussion and Analysis of Financial

Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 filed with the SEC on February 25, 2021 for more details regarding the terms of ~~such~~significant transactions ~~including transactions we entered into with Healthpeak during 2019.~~that occurred prior to 2021.

During the ~~next 12~~nine months ended September 30, 2021, we completed the sale of two owned communities (129 units) for cash proceeds of $8.5 million, net of transaction costs, and for which we recognized a net gain on sale of assets of $0.5 million.

We expect to close on the disposition of ~~one~~three owned unencumbered ~~community (120~~communities (250 units) classified as held for sale as of September 30, 2020 and the termination of our lease obligation on one community (159 units). We also anticipate terminations of certain of our management arrangements with third parties as we transition to new operators our management on certain communities.2021. The closings of the ~~various pending and expected transactions described herein~~sales of the communities are ~~or will be,~~ subject to the satisfaction of various closing conditions, including (where applicable) the receipt of regulatory approvals. ~~However, there~~There can be no assurance that the transactions will close or, if they do, when the actual closings will occur.

~~Summaries~~Completed Dispositions of ~~Transactions~~Entry Fee CCRCs by Unconsolidated Venture

•~~Ventas Lease Portfolio Restructuring:~~ On July 26, 2020 (the "Effective Date"), we entered into definitive agreements with Ventas in connection with the restructuring of our lease arrangements with Ventas, including a Master Transaction Letter Agreement (the "Master Agreement"). Pursuant to the Master Agreement:

•On the Effective Date the parties entered into the Amended and Restated Master Lease and Security Agreement (the "Master Lease") and Amended and Restated Guaranty (the "Guaranty"), which amended and restated the prior Master Lease and Security Agreement and prior Guaranty, each dated as of April 26, 2018 and as amended from time to time. Pursuant to the Master Lease, we continue to lease 120 communities (10,174 units) for an aggregate initial annual minimum rent of approximately $100 million, which reflects a reduction of approximately $83 million of annual minimum rent in effect prior to the transaction. Effective on January 1 of each lease year, beginning January 1, 2022, the annual minimum rent will be subject to a 3% escalator. The initial term of the Master Lease ends December 31, 2025, with two 10-year extension options available to us. The annual minimum rent for the initial lease year of any such renewal term will be the greater of the fair market rental of the communities or the increased annual minimum rent for such lease year applying the foregoing 3% escalator. The Master Lease removed the prior provision that would have automatically extended the initial term in the event of the consummation of a change of control transaction by us. The Master Lease requires us to spend (or escrow with Ventas) a minimum of $1,500 per unit on a community-level basis and $3,600 per unit on an aggregate basis of all communities, in each case per 24-month period ending December 31 during the lease term, commencing with the 24-month period ending December 31, 2021. In addition, Ventas has agreed to fund costs associated with certain pre-approved capital expenditure projects in the aggregate amount of up to $37.8 million. Upon disbursement of such expenditures, the annual minimum rent under the Master Lease will increase by the amount of the disbursement multiplied by 50% of the sum of the then current 10-year treasury note rate and 4.5%. The transaction agreements with Ventas further provide that the Master Lease and certain other agreements between the parties will be cross-defaulted.

Our subsidiaries’ obligations under the Master Lease are guaranteed at the parent level pursuant to the Guaranty. The Guaranty removed the prior requirements that we satisfy, at the parent level, financial covenants and that we maintain a security deposit with Ventas. The Guaranty also removed the prior right of Ventas to terminate the Master Lease on the basis of parent level financial covenants. Pursuant to the terms of the Guaranty, we may consummate a change of control transaction without the need for consent of Ventas so long as certain objective conditions are satisfied, including the post-transaction guarantor’s maintaining a minimum tangible net worth of at least $600.0 million, having minimum levels of operational experience and reputation in the senior living industry, and paying a change of control fee of $25.0 million to Ventas. The Guaranty removed the prior provisions that would have required that such post-transaction guarantor satisfy a maximum leverage ratio level, that we fund additional capital expenditures, and that we extend the term upon the occurrence of the change in control transaction. Under the terms of the Guaranty, commencing January 1, 2024 (and until such time (if any) as we exercise our lease term extension option with respect to the Master Lease), Ventas shall have the right to terminate the Master Lease (with respect to one or more communities), provided that the trailing twelve month coverage ratio of each such community is less than 0.9x and provided further that the removal and termination of any such communities does not result in a portfolio coverage ratio with respect to the remaining communities in the Master Lease that is less than the portfolio coverage ratio prior to such removal and termination.

•On the Effective Date, we entered into a Second Amended and Restated Omnibus Agreement with Ventas, which provides that if a default occurs and is continuing under certain other material leases or under certain material financings and if the same continues beyond the permitted cure period or the applicable landlord or lender exercises any material remedies, Ventas shall have the right to transition all or a portion of the communities from the Master Lease to a management arrangement with us pursuant to a market management agreement (which is terminable by

either party). Notwithstanding the foregoing, Ventas may only transition one or more communities from the Master Lease to a management arrangement if such transition does not result in a portfolio coverage ratio with respect to the remaining communities in the Master Lease that is less than the portfolio coverage ratio prior to such transition.

•On the Effective Date, we conveyed five owned communities (471 units) to Ventas in full release and satisfaction of $78.4 million principal amount of indebtedness secured by the communities. Upon closing, the parties entered into new terminable, market rate management agreements pursuant to which we manage the communities. We also paid to Ventas $115.0 million in cash, released all security deposits under the former guaranty (which included the release of a $42.4 million deposit held by Ventas and the payment of $4.2 million in cash as settlement of the amount of letters of credit), and issued a $45.0 million unsecured interest-only promissory note to Ventas. The initial interest rate of the promissory note is 9.0% per annum and will increase by 0.50% on each anniversary of the date of issuance. We may prepay the outstanding principal amount in whole or in part at any time without premium or penalty. The promissory note matures on the earlier of December 31, 2025 or the occurrence of a change of control transaction (as defined in the Guaranty).

•On the Effective Date, we issued to Ventas a warrant (the "Warrant") to purchase 16.3 million shares of our common stock, $0.01 par value per share, at a price per share of $3.00. The Warrant is exercisable at Ventas’ option at any time and from time to time, in whole or in part, until December 31, 2025. 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. To the extent that the number of shares owned by Ventas (including shares underlying the Warrant) would be more than 9.6% of the total combined voting power of all our classes of capital stock or of the total value of shares of all our classes of capital stock (the "Ownership Cap") (other than as a result of actions taken by Ventas), we would generally be required to repurchase the number of shares necessary to avoid Ventas exceeding the Ownership Cap unless Ventas makes an election to require us to pay Ventas cash in lieu of issuing shares pursuant to the Warrant in excess of the Ownership Cap. The Warrant and the shares issuable upon exercise thereof have not been registered under the Securities Act of 1933, as amended, and were issued in a private placement pursuant to Section 4(a)(2) thereof. On the Effective Date, the parties entered into a Registration Rights Agreement, pursuant to which Ventas and its permitted transferees are entitled to certain registration rights. Pursuant to the terms of the agreement, we filed a shelf registration statement with the SEC, with respect to the shares of common stock underlying the Warrant, which was declared effective on August 17, 2020. Ventas is entitled to customary underwritten offering, piggyback, and additional demand registration rights with respect to the shares underlying the Warrant.

•~~Healthpeak:~~ On October 1, 2019, we entered into definitive agreements, including a Master Transactions and Cooperation Agreement (the "MTCA") and an Equity Interest Purchase Agreement (the "Purchase Agreement"), providing for a multi-part transaction with Healthpeak. The parties subsequently amended the agreements to include one additional entry fee CCRC community as part of the sale of our interest in the CCRC Venture (rather than removing the community from the CCRC Venture for joint marketing and sale). The components of the multi-part transaction include:

•~~CCRC Venture Transaction:~~ Pursuant to the Purchase Agreement, on January 31, 2020, Healthpeak acquired our 51% ownership interest in the CCRC Venture, which held 14 entry fee CCRCs (6,383 units), for a purchase price of $289.2 million, net of a $5.9 million post-closing net working capital adjustment paid to Healthpeak during the three months ended June 30, 2020 (representing an aggregate valuation of $1.06 billion less portfolio debt, subject to a net working capital adjustment). We recognized a $369.8 million gain on sale of assets for the nine months ended September 30, 2020, and we derecognized the net equity method liability for the sale of the ownership interest in the CCRC Venture. At the closing, the parties terminated the existing management agreements on the 14 entry fee CCRCs, Healthpeak paid us a $100.0 million management agreement termination fee, and we transitioned operations of the entry fee CCRCs to a new operator. We recognized $100.0 million of management fee revenue for the three months ended March 31, 2020 for the management termination fee. The sale of our interest in the CCRC Venture and the $100.0 million of management termination fees generated approximately $579.0 million of taxable income in three months ended March 31, 2020. We will utilize any 2020 operating losses generated and tax loss carryforwards (including our capital loss carryforward that was generated in 2018) to offset the taxable gain on this transaction. Prior to the January 31, 2020 closing of our sale of our ownership interest in the ~~parties~~CCRC Venture, we and Healthpeak moved the remaining two entry fee CCRCs ~~(889 units)~~ into a new unconsolidated entry fee CCRC venture on substantially the same terms as the CCRC Venture to accommodate the sale of such two ~~communities expected to occur in 2021. Subsequent to these transactions, we will have exited substantially all of our~~communities. During the three months ended June 30, 2021, the new unconsolidated entry fee CCRC venture completed the sale of the two remaining entry fee CCRCs for cash proceeds of $14.0 million, net of associated mortgage debt repayments and transaction costs. Subsequent to the sale transaction, the new unconsolidated entry fee CCRC venture has no continuing operations. During the three months ended June 30, 2021, we received $5.4 million of cash distributions from the new unconsolidated entry fee CCRC venture and recognized $13.9 million of equity in earnings of unconsolidated ventures for the our proportionate share of the net income of the new unconsolidated entry fee CCRC venture, which was primarily comprised of a gain on sale of assets for the sale of the two remaining entry fee CCRCs. During the three months ended September 30, 2021, we received $3.0 million of additional cash distributions from the new unconsolidated entry fee CCRC venture.

•~~Master Lease Transactions.~~ Pursuant to the MTCA, on January 31, 2020, the parties amended and restated our existing master lease pursuant to which we continue to lease 25 communities (2,711 units) from Healthpeak, and we acquired

3734

~~18 formerly leased~~Community Labor

We continue to see pressures associated with the intensely competitive labor environment. We have increased our recruiting efforts to fill open positions and, in certain markets, are actively adjusting wages to remain competitive. We seek to ensure that our communities ~~(2,014 units) from Healthpeak,~~are staffed with full and part-time associates, though our use of more expensive contract labor and overtime has increased to fill open positions. We expect the intensity of this competitive environment will be transitory, though likely to continue into 2022.

Convertible Senior Notes Offering

On October 1, 2021, we issued $230.0 million principal amount of 2.00% convertible senior notes due 2026 (the "Notes"). We received net proceeds of $224.3 million at ~~which~~closing after the deduction of the initial purchasers’ discount. We used approximately $15.9 million of the net proceeds to pay the cost of the capped call transactions described below. We also used a portion of the net proceeds to repay a $45.0 million note payable and $29.2 million of mortgage debt and intend to use the remaining net proceeds for general corporate purposes, including refinancing or repaying maturing debt. The Notes were issued pursuant to, and are governed by, the Indenture dated as of October 1, 2021 by and between us and American Stock Transfer & Trust Company, LLC, as trustee.

The Notes are our senior unsecured obligations and rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the Notes, and equal in right of payment to any of our indebtedness that is not so subordinated. The Notes are effectively junior in right of payment to any of our 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 our current or future subsidiaries.

The Notes bear interest at 2.00% per year, payable semi-annually in arrears in cash on April 15 and October 15 of each year, beginning on April 15, 2022. The Notes will mature on October 15, 2026, unless earlier converted, redeemed or repurchased in accordance with their terms. Holders of the Notes may convert all or any portion of their Notes at their option at any time prior to the ~~18 communities were removed from~~close of business on the ~~master lease. At the closing, we paid $405.5 million to acquire such communities and to reduce our annual rent~~business day immediately preceding July 15, 2026, only under the ~~amended and restated master lease. We funded~~following circumstances: (1) during any calendar quarter commencing after the community acquisitions with $192.6 million of non-recourse mortgage financing and the proceeds from the multi-part transaction. In addition, Healthpeak has agreed to terminate the lease for one leased community (159 units). With respect to the continuing 24 communities (2,552 units), our amended and restated master lease: (i) has an initial term to expirecalendar quarter ending on December 31, ~~2027, subject~~2021 (and only during such calendar quarter), if the last reported sale price of our common stock 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 ~~two extension options~~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 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the Notes on each such trading day; (3) if we call any or all of the Notes for redemption, at ~~our election for ten years each, which must be exercised~~any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date, but only with respect to the ~~entire pool~~Notes called (or deemed called) for redemption; or (4) upon the occurrence of ~~leased communities; (ii) the initial annual base rent for the 24 communities is $41.7 million and is subject to an escalator~~specified corporate events. On or after July 15, 2026, holders may convert all or any portion of ~~2.4% per annum on April 1st of each year; and (iii) Healthpeak has agreed to make available up to $35.0 million for capital expenditures for a five-year period related~~their Notes at any time prior to the ~~24 communities at an initial lease rate~~close of ~~7.0%. As a result~~business on the second scheduled trading day immediately preceding the maturity date regardless of the ~~community acquisition transaction,~~foregoing conditions. Upon conversion, we ~~recognized~~will satisfy our conversion obligation by paying or delivering, as the case may be, cash, shares of our common stock or a ~~$19.7 million gain on debt extinguishment during the three months ended March 31, 2020~~combination of cash and ~~derecognized the $105.1 million carrying amount~~shares of financing lease obligations for eight communities which were previously subject to sale-leaseback transactions in which we were deemed to have continuing involvement. During the three months ended March 31, 2020, we obtained $30.0 million of additional non-recourse mortgage financing on the acquired communities.

•~~Acquisitions Pursuant to Purchase Options:~~ ~~On January 22, 2020, we acquired eight formerly leased communities (336 units) from National Health Investors, Inc. pursuant to~~ our exercise of a purchase option for a purchase price of $39.3 million. We funded the community acquisitions with cash on hand. During the three months ended March 31, 2020, we obtained $29.2 million of non-recourse mortgage financing, primarily secured by the acquired communities. On ~~August 31,~~ ~~2020,~~ we ~~acquired one formerly leased community (103 units) pursuant to~~common stock at our ~~exercise of a purchase option for a purchase price of $25.0 million and funded the acquisition with cash on hand and non-recourse mortgage financing secured by the acquired community.~~

•~~Dispositions of Owned Communities.~~ In addition to the conveyance of five communities to Ventas, during the nine months ended September 30, 2020, we completed the sale of two owned communities (375 units) for cash proceeds of $38.1 million, net of transaction costs, and for which we recognized a net gain on sale of assets of $2.7 million for the nine months ended September 30, 2020.

~~Summary of Financial Impact of Completed Dispositions~~election.

The ~~following table sets forth,~~conversion rate for the ~~periods indicated,~~Notes is initially 123.4568 shares of our common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $8.10 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 ~~amounts included within~~maturity date or following the issuance of a notice of redemption, we will increase the conversion rate for a holder who elects to convert our ~~consolidated financial data~~Notes in connection with such a corporate event or who elects to convert any Notes called (or deemed called) for redemption during the related redemption period in certain circumstances.

We may not redeem the Notes prior to October 21, 2024. We may redeem for cash all or (subject to certain limitations) any portion of the Notes, at our option, on or after October 21, 2024 and prior to the 51st scheduled trading day immediately preceding the maturity date if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the ~~19 communities that~~Notes.

If we ~~disposed through sales, conveyances, and lease terminations during~~undergo a fundamental change (as defined in the ~~period from July 1, 2019~~Indenture) prior to ~~September 30, 2020 through~~ the ~~respective disposition dates.~~

Three Months Ended September 30, 2020
(in thousands) Actual Results Amounts Attributable to Completed Dispositions Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
Independent Living $ 125,762 $ — $ 125,762
Assisted Living and Memory Care 408,695 1,279 407,416
CCRCs 76,411 2,158 74,253
Senior housing resident fees $ 610,868 $ 3,437 $ 607,431
Facility operating expense
Independent Living $ 83,420 $ — $ 83,420
Assisted Living and Memory Care 323,479 1,195 322,284
CCRCs 69,298 2,077 67,221
Senior housing facility operating expense $ 476,197 $ 3,272 $ 472,925
Cash facility lease payments $ 185,398 $ — $ 185,398
maturity date, holders may require us to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal

Three Months Ended September 30, 2019
(in thousands) Actual Results Amounts Attributable to Completed Dispositions Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
Independent Living $ 136,874 $ — $ 136,874
Assisted Living and Memory Care 452,474 9,960 442,514
CCRCs 100,104 13,435 86,669
Senior housing resident fees $ 689,452 $ 23,395 $ 666,057
Facility operating expense
Independent Living $ 87,460 $ — $ 87,460
Assisted Living and Memory Care 335,618 8,907 326,711
CCRCs 85,632 13,700 71,932
Senior housing facility operating expense $ 508,710 $ 22,607 $ 486,103
Cash facility lease payments $ 94,183 $ 947 $ 93,236
amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The ~~following table sets forth, for~~Notes and the ~~periods indicated,~~shares of common stock issuable upon conversion of the ~~amounts included within~~Notes, if any, have not been, and are not required to be, registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws. The Notes were issued to the initial purchasers in reliance upon Section 4(a)(2) of the Securities Act in transactions not involving any public offering. The Notes were resold by the initial purchasers to persons whom the initial purchasers reasonably believed are “qualified institutional buyers,” as defined in, and in accordance with, Rule 144A under the Securities Act.

In connection with the offering of the Notes, we entered into privately negotiated capped call transactions ("Capped Call Transactions") with each of Bank of America, N.A., Royal Bank of Canada, Wells Fargo Bank, National Association or their respective affiliates (the "Capped Call Counterparties"). The Capped Call Transactions initially cover, subject to customary anti-dilution adjustments, the number of shares of our ~~consolidated financial data for~~common stock that initially underlie the ~~35 communities~~Notes and initially have an exercise price of $8.10 per share of common stock. The cap price of the Capped Call Transactions is initially approximately $9.90 per share of our common stock, representing a premium of 65% above the last reported sale price of $6.00 per share of our common stock on September 28, 2021, and is subject to certain adjustments under the terms of the Capped Call Transactions. The Capped Call Transactions are expected generally to reduce or offset potential dilution to holders of our common stock upon conversion of the Notes and/or offset the potential cash payments that we ~~disposed through sales, conveyances, and lease terminations during~~could be required to make in excess of the ~~period from January 1, 2019~~principal amount of any converted Notes upon conversion thereof, with such reduction and/or offset subject to ~~September 30, 2020 through~~a cap based on the ~~respective disposition dates.~~

Nine Months Ended September 30, 2020
(in thousands) Actual Results Amounts Attributable to Completed Dispositions Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
Independent Living $ 391,902 $ — $ 391,902
Assisted Living and Memory Care 1,298,330 14,099 1,284,231
CCRCs 249,983 9,836 240,147
Senior housing resident fees $ 1,940,215 $ 23,935 $ 1,916,280
Facility operating expense
Independent Living $ 257,108 $ — $ 257,108
Assisted Living and Memory Care 993,557 13,368 980,189
CCRCs 218,635 9,304 209,331
Senior housing facility operating expense $ 1,469,300 $ 22,672 $ 1,446,628
Cash facility lease payments $ 362,150 $ 1,102 $ 361,048

Nine Months Ended September 30, 2019
(in thousands) Actual Results Amounts Attributable to Completed Dispositions Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
Independent Living $ 408,519 $ — $ 408,519
Assisted Living and Memory Care 1,361,225 41,647 1,319,578
CCRCs 305,084 41,606 263,478
Senior housing resident fees $ 2,074,828 $ 83,253 $ 1,991,575
Facility operating expense
Independent Living $ 254,770 $ — $ 254,770
Assisted Living and Memory Care 970,526 35,542 934,984
CCRCs 251,128 39,683 211,445
Senior housing facility operating expense $ 1,476,424 $ 75,225 $ 1,401,199
Cash facility lease payments $ 283,697 $ 4,265 $ 279,432
cap price.

The ~~following table sets forth~~Capped Call Transactions are separate transactions entered into by us with the ~~number~~Capped Call counterparties and are not part of ~~communities and units in our senior housing segments disposed through sales, conveyances, and lease terminations during~~ the ~~nine months ended September 30, 2020 and twelve months ended December 31, 2019:~~

Nine Months Ended
September 30, 2020 Twelve Months Ended
December 31, 2019
Number of communities
Assisted Living and Memory Care 10 20
CCRCs 1 4
Total 11 24
Total units
Assisted Living and Memory Care 827 1,600
CCRCs 297 827
Total 1,124 2,427

~~Other Recent Developments~~

~~Goodwill Impairment Estimates~~

Asterms of ~~September 30, 2020, we~~the Notes. The Capped Call Transactions had a ~~goodwill balance~~cost of ~~$154.1 million. Goodwill recorded in connection with business combinations is allocated to~~$15.9 million, which was paid on October 1, 2021 from the ~~respective reporting unit and included in our application~~proceeds of the ~~provisions~~Notes. We will separately account for Capped Call Transactions from the Notes and will recognize the cost as a reduction of ~~ASC 350,~~ ~~Intangibles - Goodwill and Other~~.

Goodwill allocated to our Independent Living and Health Care Services reporting units is $27.3 million and $126.8 million as of September 30, 2020, respectively. Our interim goodwill impairment analyses did not resultadditional paid-in capital in any impairment charges during the nine months ended September 30, 2020. Based on the results of our interim quantitative goodwill impairment test as of March 31, 2020, we estimated that the fair values of both our Independent Living and Health Care Services reporting units exceeded their carrying amount by approximately 20%. Additionally, we estimated that there were no significant changes to the fair values of both our Independent Living and Health Care Services reporting units during the three months ~~ended June 30, 2020 and September 30, 2020.~~

~~Determining~~ending December 31, 2021 as the ~~fair value of a reporting unit involves the use of significant estimates and assumptions that~~Capped Call Transactions are unpredictable and inherently uncertain. These estimates and assumptions include revenue and expense growth rates and operating margins used to calculate projected future cash flows and risk-adjusted discount rates. Future events may indicate differences from management's current judgments and estimates which could, in turn, result in future impairments. Future events that may result in impairment charges include differences in the projected occupancy rates or monthly service fee rates, changes in the cost

structure of existing communities, changes in reimbursement rates from Medicare for healthcare services, and changes in healthcare reform. Significant adverse changes in our future revenues and/or operating margins, significant changes in the market for senior housing or the valuation of the real estate of senior living communities, as well as other events and circumstances, including, but not limited to, increased competition, changes in reimbursement rates from Medicare for healthcare services, and changing economic or market conditions, including market control premiums, could result in changes in fair value and the determination that additional goodwill is impaired.

Our impairment loss assessment contains uncertainties because it requires us to apply judgment to estimate whether there has been a decline in the fair value of our reporting units, including estimating future cash flows, and if necessary, the fair value of our assets and liabilities. As we periodically perform this assessment, changes in our estimates and assumptions may cause us to realize material impairment charges in the future. Although we make every reasonable effort to ensure the accuracy of our estimate of the fair value of our reporting units, future changes in the assumptions used to make these estimates could result in the recording of an impairment loss.

As of March 31, 2020, June 30, 2020, and September 30, 2020, there was a wide range of possible outcomes as a result of the COVID-19 pandemic, as there was a high degree of uncertainty about its ultimate impacts. Management’s estimates of the impacts of the pandemic are highly dependent on variables that are difficult to predict, as described above. Future events may indicate differences from management's current judgments and estimates which could, in turn, result in future impairments.

~~Capital Expenditures~~

In response to the COVID-19 pandemic, we have delayed or canceled a number of elective capital expenditure projects. As a result, we expect our full-year 2020 non-development capital expenditures, net of anticipated lessor reimbursements, and development capital expenditures to be approximately $140 million and $15 million, respectively, which reflects a $50 million and $15 million reductionindexed to our ~~pre-pandemic plans for 2020, respectively. We anticipate that our 2020 capital expenditures will be funded from cash on hand, cash flows from operations, and reimbursements from lessors.~~common stock.

Results of Operations

As of September 30, ~~2020~~2021, our total operations included ~~726~~682 communities with a capacity to serve ~~approximately 65,000~~over 60,000 residents. As of that date, we owned ~~350~~348 communities ~~(31,824~~(31,783 units), leased ~~302~~300 communities ~~(21,286~~(21,026 units), and managed 7434 communities ~~(9,980~~(4,913 units). The following discussion should be read in conjunction with our condensed consolidated financial statements and the related notes, which are included in "Item 1. Financial Statements" of this Quarterly Report on Form 10-Q. The results of operations for any particular period are not necessarily indicative of results for any future period. Transactions completed during the period of January 1, ~~2019~~2020 to September 30, ~~2020~~2021 affect the comparability of our results of ~~operations, and summaries of such transactions and their impact on our results of operations are discussed above in "Transaction Activity and Impact of Dispositions on Results of Operations."~~operations.

We use the operating measures described below in connection with operating and managing our business and reporting our results of operations. Our adoption and application of the new lease accounting standard impacted our results for the year ended December 31, 2019 due to our recognition of additional resident fee revenue and facility operating expense, which are non-cash and are non-recurring in years subsequent to December 31, 2019. To aid in comparability between periods, presentations of our results on a same community basis, and RevPAR and RevPOR, exclude the impact of the lease accounting standard.

•~~Operating~~Senior housing operating results and data presented on a same community basis reflect results and data of a consistent population of communities by excluding the impact of changes in the composition of our portfolio of communities. The operating results exclude ~~hurricane and~~ natural disaster expense and related insurance ~~recoveries, and for the 2019 periods, exclude the additional resident fee revenue and facility operating expense recognized as a result of the application of the lease accounting standard ASC 842.~~recoveries. We define our same community portfolio as communities consolidated and operational for the full period in both comparison years. Consolidated communities excluded from the same community portfolio include communities acquired or disposed of since the beginning of the prior year, communities classified as assets held for sale, certain communities planned for disposition, certain communities that have undergone or are undergoing expansion, redevelopment, and repositioning projects, ~~certain communities that have expansion, redevelopment, and repositioning projects that are anticipated to be under construction in the current year,~~ and certain communities that have experienced a casualty event that significantly impacts their operations. Our management uses same community operating results and data for decision making, and we believe such results and data provide useful information to investors, because it enables comparisons of revenue, expense, and other operating measures for a consistent portfolio over time without giving effect to the impacts of communities that were not consolidated and operational for the comparison periods, communities acquired or disposed during the comparison periods (or planned for disposition), and communities with results that are or likely will be impacted

by completed ~~in-process,~~ or ~~planned~~in-process development-related capital expenditure projects. As presented herein, same community results include the direct costs incurred to ~~prepare for and~~ respond to the COVID-19 pandemic.

•RevPAR, or average monthly senior housing resident fee revenue per available unit, is defined as resident fee revenue for the corresponding portfolio for the period (excluding Health Care Services segment revenue, revenue from private duty services provided to seniors living outside of our communities, and entrance fee ~~amortization, and, for the 2019 periods, the additional resident fee revenue recognized as a result of the application of the lease accounting standard ASC 842)~~amortization), divided by the weighted average number of available units in the corresponding portfolio for the period, divided by the number of months in the

period. We measure RevPAR at the consolidated level, as well as at the segment level with respect to our Independent Living, Assisted Living and Memory Care, and CCRCs segments. Our management uses RevPAR for decision making, and we believe the measure provides useful information to investors, because the measure is an indicator of senior housing resident fee revenue performance that reflects the impact of both senior housing occupancy and rate.

•RevPOR, or average monthly senior housing resident fee revenue per occupied unit, is defined as resident fee revenue for the corresponding portfolio for the period (excluding Health Care Services segment revenue, revenue from private duty services provided to seniors living outside of our communities, and entrance fee ~~amortization, and, for the 2019 periods, the additional resident fee revenue recognized as a result of the application of the lease accounting standard ASC 842)~~amortization), divided by the weighted average number of occupied units in the corresponding portfolio for the period, divided by the number of months in the period. We measure RevPOR at the consolidated level, as well as at the segment level with respect to our Independent Living, Assisted Living and Memory Care, and CCRCs segments. Our management uses RevPOR for decision making, and we believe the measure provides useful information to investors, because it reflects the average amount of senior housing resident fee revenue we derive from an occupied unit per month without factoring occupancy rates. RevPOR is a significant driver of our senior housing revenue performance.

•Weighted average occupancy rate reflects the percentage of units at our owned and leased communities being utilized by residents over a reporting period. We measure occupancy rates with respect to our Independent Living, Assisted Living and Memory Care, and CCRCs segments, and also measure this metric both on a consolidated senior housing and a same community basis. Our management uses weighted average occupancy, and we believe the measure provides useful information to investors, because it is a significant driver toof our senior housing ~~resident fee revenue.~~revenue performance.

This section includes the non-GAAP performance measure Adjusted EBITDA. See "Non-GAAP Financial Measures" below for our definition of the measure and other important information regarding such measure, including reconciliations to the most comparable GAAP ~~measures.~~measure.

Comparison of Three Months Ended September 30, ~~2020~~2021 and ~~2019~~2020

Summary Operating Results

The following table summarizes our overall operating results for the three months ended September 30, ~~2020~~2021 and ~~2019.~~2020.


		Three Months Ended September 30,				Increase (Decrease)					Three Months Ended September 30,				Increase (Decrease)
(in thousands)	(in thousands)	2020		2019		Amount		Percent		(in thousands)	2021		2020		Amount		Percent
Total resident fees and management fees revenue	Total resident fees and management fees revenue	$	706,440	$	814,801	$	(108,361)	(13.3)	%	Total resident fees and management fees revenue	$	603,716	$	706,440	$	(102,724)	(14.5)	%
Other operating income	Other operating income	10,765		—		10,765		NM		Other operating income	89		10,765		(10,676)		(99.2)	%
Facility operating expense	Facility operating expense	570,530		615,717		(45,187)		(7.3)	%	Facility operating expense	480,423		570,530		(90,107)		(15.8)	%
Net income (loss)	Net income (loss)	(124,993)		(78,508)		46,485		59.2	%	Net income (loss)	174,263		(124,993)		299,256		NM
Adjusted EBITDA	Adjusted EBITDA	(64,019)		80,447		(144,466)		NM		Adjusted EBITDA	34,582		(64,019)		98,601		NM

The decrease in total resident fees and management fees revenue was primarily attributable to the deconsolidation of results of the Health Care Services segment effective July 1, 2021, which resulted in a ~~$100.5~~decrease of $89.9 million ~~decrease in~~of resident fees including a 7.7% decrease in same community RevPAR, comprised of a 920 basis points decrease in same community weighted average occupancy and a 3.5% increase in same community RevPOR. We estimate that the COVID-19 pandemic, including the related restrictions at our communities, resulted in $70.8 million of lost resident fee revenue on a same community basis forcompared to the three months ended September 30, 2020. Estimated lost resident fee revenue represents the difference between the actual revenue for the period and our expectations prior to estimating the effects of COVID-19. Revenue for home health services decreased $19.0 million, as our home health average daily census began to decrease in March 2020 due to the COVID-19 pandemic and due to the implementation of the Patient-Driven Grouping Model ("PDGM"), an alternate home health case-mix adjustment methodology with a 30-day unit of payment, which became effective beginning January 1, 2020.

~~Additionally, the~~The disposition of 1912 communities through sales and conveyances of owned communities and lease terminations since the beginning of the prior year period resulted in ~~$20.0~~$7.4 million less in resident fees during the three months ended September 30, ~~2020~~2021 compared to the prior year period. The decrease was also attributable to a 0.9% decrease in same community RevPAR, comprised of a 300 basis point decrease in same community weighted average occupancy and a 3.1% increase in same community RevPOR. Management fee revenue decreased ~~$7.9~~$2.0 million primarily due to ~~terminations~~the transition of management agreements ~~subsequent to~~on 43 net communities since the beginning of the prior year period.

~~Our other operating income for~~During the three months ended September 30, 2021 and 2020, ~~includes~~we recognized $0.1 million and $10.8 million, respectively, of government grants as other operating income based on our estimates of our satisfaction of the conditions of the grants during the period.

The decrease in facility operating expense was primarily attributable to the deconsolidation of results of the Health Care Services segment effective July 1, 2021, which resulted in a decrease of $94.3 million of facility operating expense compared to the three months ended September 30, 2020. Additionally, the disposition of communities since the beginning of the prior year period ~~which~~ resulted in ~~$19.3~~$7.7 million less in facility operating expense during the three months ended September 30, ~~2020~~2021 compared

to the prior year ~~period, and a decrease~~period. These decreases in ~~labor costs for home health services as a result of lower census and as we adjusted our home health services operational structure, to better align our~~ facility operating ~~expenses and business model with the new payment model. These decreases~~expense were ~~primarily~~partially offset by a ~~0.3%~~2.9% increase in same community facility operating expense, ~~which was primarily~~including an increase in labor expense arising from increased contract labor and overtime costs due to ~~$20.4~~the intensely competitive labor market, partially offset by a $14.0 million ofdecrease in incremental direct costs ~~incurred during~~to respond to the COVID-19 pandemic. Facility operating expense for the three months ended September 30, 2021 and 2020 includes $7.2 million and $24.5 million, respectively, of incremental direct costs to respond to the COVID-19 pandemic. ~~The increase in same community facility operating expense was partially offset by decreases in repairs and maintenance costs and food and supplies costs due to the reduced occupancy during the period.~~

In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense of $8.0 million and $14.0 million, respectively, during the three months ended September 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019. Same community resident fee revenue and facility operating expense excludes $7.3 million and $12.8 million, respectively, of such additional revenue and expenses.

The increase in net ~~loss~~income was primarily attributable to the HCS Sale resulting in a net gain on sale of $288.2 million and decreases in facility operating lease expense, depreciation and amortization expense, non-cash asset impairment expense, and general and administrative expense, partially offset by the net impact of the revenue, other operating income, and facility operating expense factors previously discussed.

The ~~decrease~~increase in Adjusted EBITDA was primarily attributable to the $119.2 million one-time cash lease payment made to Ventas in connection with our lease restructuring transaction effective July 26, 2020 and a decrease in general and administrative expense (excluding non-cash stock based compensation expense and transaction and organizational restructuring costs), partially offset by the net impact of the revenue, other operating income, and facility operating expense factors previously ~~discussed, partially offset by a decrease in general and administrative expense.~~discussed.

Operating Results - Senior Housing Segments

The following table summarizes the operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) on a combined basis for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, including operating results and data on a same community basis. See management's discussion and analysis of the operating results on an individual segment basis on the following pages.


														Three Months Ended September 30,						Increase (Decrease)
(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	Three Months Ended September 30,						Increase (Decrease)					(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	2021			2020			Amount			Percent
		2020			2019			Amount			Percent
Resident fees	Resident fees	$	610,868		$	689,452		$	(78,584)		(11.4)	%	Resident fees	$	600,095		$	610,868		$	(10,773)		(1.8)	%
Other operating income	Other operating income	$	4,873		$	—		$	4,873		NM		Other operating income	$	89		$	4,873		$	(4,784)		(98.2)	%
Facility operating expense	Facility operating expense	$	476,197		$	508,710		$	(32,513)		(6.4)	%	Facility operating expense	$	480,423		$	476,197		$	4,226		0.9	%

Number of communities (period end)	Number of communities (period end)	652			671			(19)			(2.8)	%	Number of communities (period end)	648			652			(4)			(0.6)	%
Number of units (period end)	Number of units (period end)	53,110			55,262			(2,152)			(3.9)	%	Number of units (period end)	52,809			53,110			(301)			(0.6)	%
Total average units	Total average units	53,440			55,258			(1,818)			(3.3)	%	Total average units	52,811			53,440			(629)			(1.2)	%
RevPAR	RevPAR	$	3,806		$	4,109		$	(303)		(7.4)	%	RevPAR	$	3,784		$	3,806		$	(22)		(0.6)	%
Occupancy rate (weighted average)	Occupancy rate (weighted average)	75.3		%	84.2		%	(890)		bps	n/a		Occupancy rate (weighted average)	72.5		%	75.3		%	(280)		bps	n/a

RevPOR	RevPOR	$	5,056		$	4,880		$	176		3.6	%	RevPOR	$	5,219		$	5,056		$	163		3.2	%

Same Community Operating Results and Data	Same Community Operating Results and Data												Same Community Operating Results and Data
Resident fees	Resident fees	$	565,881		$	613,260		$	(47,379)		(7.7)	%	Resident fees	$	569,606		$	574,949		$	(5,343)		(0.9)	%
Other operating income	Other operating income	$	3,710		$	—		$	3,710		NM		Other operating income	$	87		$	3,704		$	(3,617)		(97.7)	%
Facility operating expense	Facility operating expense	$	435,058		$	433,972		$	1,086		0.3	%	Facility operating expense	$	453,632		$	440,977		$	12,655		2.9	%

Number of communities	Number of communities	631			631			—			—	%	Number of communities	634			634			—			—
Total average units	Total average units	49,363			49,368			(5)			—	%	Total average units	50,148			50,143			5			—
RevPAR	RevPAR	$	3,821		$	4,141		$	(320)		(7.7)	%	RevPAR	$	3,786		$	3,822		$	(36)		(0.9)	%
Occupancy rate (weighted average)	Occupancy rate (weighted average)	75.6		%	84.8		%	(920)		bps	n/a		Occupancy rate (weighted average)	72.5		%	75.5		%	(300)		bps	n/a
RevPOR	RevPOR	$	5,057		$	4,885		$	172		3.5	%	RevPOR	$	5,222		$	5,064		$	158		3.1	%

Independent Living Segment

The following table summarizes the operating results and data for our Independent Living segment for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, including operating results and data on a same community basis.


														Three Months Ended September 30,						Increase (Decrease)
(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	Three Months Ended September 30,						Increase (Decrease)					(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	2021			2020			Amount			Percent
		2020			2019			Amount			Percent
Resident fees	Resident fees	$	125,762		$	136,874		$	(11,112)		(8.1)	%	Resident fees	$	119,584		$	125,762		$	(6,178)		(4.9)	%

Other operating income	Other operating income	96			—			96			NM		Other operating income	$	9		$	96		$	(87)		(90.6)	%
Facility operating expense	Facility operating expense	$	83,420		$	87,460		$	(4,040)		(4.6)	%	Facility operating expense	$	82,860		$	83,420		$	(560)		(0.7)	%

Number of communities (period end)	Number of communities (period end)	68			68			—			—	%	Number of communities (period end)	68			68			—			—
Number of units (period end)	Number of units (period end)	12,534			12,511			23			0.2	%	Number of units (period end)	12,567			12,534			33			0.3	%
Total average units	Total average units	12,534			12,511			23			0.2	%	Total average units	12,567			12,534			33			0.3	%
RevPAR	RevPAR	$	3,345		$	3,581		$	(236)		(6.6)	%	RevPAR	$	3,172		$	3,345		$	(173)		(5.2)	%
Occupancy rate (weighted average)	Occupancy rate (weighted average)	80.0		%	89.1		%	(910)		bps	n/a		Occupancy rate (weighted average)	74.7		%	80.0		%	(530)		bps	n/a

RevPOR	RevPOR	$	4,182		$	4,018		$	164		4.1	%	RevPOR	$	4,244		$	4,182		$	62		1.5	%

Same Community Operating Results and Data	Same Community Operating Results and Data												Same Community Operating Results and Data
Resident fees	Resident fees	$	118,384		$	126,823		$	(8,439)		(6.7)	%	Resident fees	$	115,999		$	122,498		$	(6,499)		(5.3)	%
Other operating income	Other operating income	$	96		$	—		$	96		NM		Other operating income	$	9		$	96		$	(87)		(90.6)	%
Facility operating expense	Facility operating expense	$	77,387		$	78,445		$	(1,058)		(1.3)	%	Facility operating expense	$	80,149		$	80,659		$	(510)		(0.6)	%

Number of communities	Number of communities	64			64			—			—	%	Number of communities	66			66			—			—
Total average units	Total average units	11,703			11,703			—			—	%	Total average units	12,165			12,156			9			0.1	%
RevPAR	RevPAR	$	3,372		$	3,612		$	(240)		(6.6)	%	RevPAR	$	3,179		$	3,359		$	(180)		(5.4)	%
Occupancy rate (weighted average)	Occupancy rate (weighted average)	80.3		%	89.4		%	(910)		bps	n/a		Occupancy rate (weighted average)	74.8		%	79.9		%	(510)		bps	n/a
RevPOR	RevPOR	$	4,201		$	4,043		$	158		3.9	%	RevPOR	$	4,250		$	4,203		$	47		1.1	%

The decrease in the segment's resident fees was primarily attributable to a decrease in the segment's same community RevPAR, comprised of a ~~910~~510 basis ~~points~~point decrease in same community weighted average occupancy and ~~a 3.9%~~an 1.1% increase in same community RevPOR. The decrease in the segment's same community weighted average occupancy primarily reflects the impact of ~~reduced~~the net move-in and move-out activity ~~related to the COVID-19 pandemic, including the related restrictions at our communities. We estimate that the COVID-19 pandemic, including the related restrictions~~ at our communities ~~resulted in $11.6 million~~since the beginning of ~~lost resident fee revenue~~the prior year period. The segment’s period end occupancy increased on a ~~same community~~sequential basis for ~~this segment for~~both the three months ended June 30, 2021 and September 30, ~~2020.~~2021. The increase in the segment's same community RevPOR was primarily the result of in-place rent increases.

The decrease in the segment's facility operating expense was primarily attributable to ~~the additional facility operating expense during the three months ended September 30, 2019 as a result of the application of the new lease accounting standard (described below) and~~ a decrease in the segment's same community facility operating ~~expense. The~~expense, including a $1.3 million decrease in incremental direct costs to respond to the COVID-19 pandemic and a decrease in food costs due to reduced occupancy during the period. These decreases in the segment's same community facility operating expense ~~was primarily attributable to decreases~~were partially offset by an increase in repairs and maintenance costs ~~and food and supplies costs~~ due to ~~the reduced occupancy~~more move-ins during the ~~period, partially offset by $1.9~~period. The segment's facility operating expense for the three months ended September 30, 2021 and 2020 includes $0.9 million and $2.2 million, respectively, of incremental direct costs to respond to the COVID-19 pandemic.

In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of $2.5 million and $3.4 million, respectively, during the three months ended September 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019. Same community resident fee revenue and facility operating expense for this segment excludes $2.3 million and $3.2 million, respectively, of such additional revenue and expenses.

4539

Assisted Living and Memory Care Segment

The following table summarizes the operating results and data for our Assisted Living and Memory Care segment for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, including operating results and data on a same community basis.


														Three Months Ended September 30,						Increase (Decrease)
(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	Three Months Ended September 30,						Increase (Decrease)					(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	2021			2020			Amount			Percent
		2020			2019			Amount			Percent
Resident fees	Resident fees	$	408,695		$	452,474		$	(43,779)		(9.7)	%	Resident fees	$	402,621		$	408,695		$	(6,074)		(1.5)	%
Other operating income	Other operating income	$	1,936		$	—		$	1,936		NM		Other operating income	$	75		$	1,936		$	(1,861)		(96.1)	%
Facility operating expense	Facility operating expense	$	323,479		$	335,618		$	(12,139)		(3.6)	%	Facility operating expense	$	327,372		$	323,479		$	3,893		1.2	%

Number of communities (period end)	Number of communities (period end)	563			577			(14)			(2.4)	%	Number of communities (period end)	560			563			(3)			(0.5)	%
Number of units (period end)	Number of units (period end)	35,124			36,177			(1,053)			(2.9)	%	Number of units (period end)	34,891			35,124			(233)			(0.7)	%
Total average units	Total average units	35,268			36,173			(905)			(2.5)	%	Total average units	34,893			35,268			(375)			(1.1)	%
RevPAR	RevPAR	$	3,863		$	4,127		$	(264)		(6.4)	%	RevPAR	$	3,845		$	3,863		$	(18)		(0.5)	%
Occupancy rate (weighted average)	Occupancy rate (weighted average)	74.4		%	83.2		%	(880)		bps	n/a		Occupancy rate (weighted average)	71.9		%	74.4		%	(250)		bps	n/a

RevPOR	RevPOR	$	5,193		$	4,962		$	231		4.7	%	RevPOR	$	5,347		$	5,193		$	154		3.0	%

Same Community Operating Results and Data	Same Community Operating Results and Data												Same Community Operating Results and Data
Resident fees	Resident fees	$	397,126		$	427,413		$	(30,287)		(7.1)	%	Resident fees	$	396,999		$	400,484		$	(3,485)		(0.9)	%
Other operating income	Other operating income	$	1,937		$	—		$	1,937		NM		Other operating income	$	75		$	1,937		$	(1,862)		(96.1)	%
Facility operating expense	Facility operating expense	$	312,267		$	308,385		$	3,882		1.3	%	Facility operating expense	$	323,056		$	314,277		$	8,779		2.8	%

Number of communities	Number of communities	553			553			—			—	%	Number of communities	554			554			—			—
Total average units	Total average units	34,048			34,053			(5)			—	%	Total average units	34,380			34,384			(4)			—
RevPAR	RevPAR	$	3,888		$	4,184		$	(296)		(7.1)	%	RevPAR	$	3,849		$	3,882		$	(33)		(0.9)	%
Occupancy rate (weighted average)	Occupancy rate (weighted average)	74.5		%	83.5		%	(900)		bps	n/a		Occupancy rate (weighted average)	71.8		%	74.4		%	(260)		bps	n/a
RevPOR	RevPOR	$	5,216		$	5,010		$	206		4.1	%	RevPOR	$	5,363		$	5,221		$	142		2.7	%

The decrease in the segment's resident fees was primarily attributable to a decrease in the segment's same community RevPAR, comprised of a ~~900~~260 basis ~~points~~point decrease in same community weighted average occupancy and a ~~4.1%~~2.7% increase in same community RevPOR. The decrease in the segment's same community weighted average occupancy primarily reflects the impact of ~~reduced~~the net move-in and move-out activity ~~related to the COVID-19 pandemic, including the related restrictions at our communities. We estimate that the COVID-19 pandemic, including the related restrictions~~ at our communities ~~resulted in $47.5 million~~since the beginning of ~~lost resident fee revenue~~the prior year period. The segment’s period end occupancy increased on a ~~same community~~sequential basis for ~~this segment for~~both the three months ended June 30, 2021 and September 30, ~~2020.~~2021. The increase in the segment's same community RevPOR was primarily the result of in-place rent increases. Additionally, the disposition of 1410 communities (836 units) since the beginning of the prior year period resulted in ~~$8.7~~$2.8 million less in resident fees during the three months ended September 30, ~~2020~~2021 compared to the prior year period.

The ~~decrease~~increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense, including an increase in labor expense arising from increased contract labor and overtime costs due to the intensely competitive labor market. The increase in the segment's same community facility operating expense was partially offset by a $10.7 million decrease in incremental direct costs to respond to the COVID-19 pandemic. The increase in the segment's facility operating expense was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in ~~$7.7~~$2.8 million less in facility operating expense during the three months ended September 30, ~~2020~~2021 compared to the prior year period. The ~~decrease in~~segment's facility operating expense ~~was partially offset by an increase in~~for the ~~segment's same community facility operating expense, including~~three months ended September 30, 2021 and 2020 includes $4.8 million and $15.5 million, respectively, of incremental direct costs to respond to the COVID-19 pandemic. The increase in the segment's same community facility operating expense was partially offset by decreases in repairs and maintenance costs and food and supplies costs due to the reduced occupancy during the period.

In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of $4.6 million and $9.1 million, respectively, during the three months ended September 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019. Same community resident fee revenue and facility operating expense for this segment excludes $4.4 million and $8.6 million, respectively, of such additional revenue and expenses.

4640

CCRCs Segment

The following table summarizes the operating results and data for our CCRCs segment for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, including operating results and data on a same community basis.


														Three Months Ended September 30,						Increase (Decrease)
(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	Three Months Ended September 30,						Increase (Decrease)					(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	2021			2020			Amount			Percent
		2020			2019			Amount			Percent
Resident fees	Resident fees	$	76,411		$	100,104		$	(23,693)		(23.7)	%	Resident fees	$	77,890		$	76,411		$	1,479		1.9	%
Other operating income	Other operating income	$	2,841		$	—		$	2,841		NM		Other operating income	$	5		$	2,841		$	(2,836)		(99.8)	%
Facility operating expense	Facility operating expense	$	69,298		$	85,632		$	(16,334)		(19.1)	%	Facility operating expense	$	70,191		$	69,298		$	893		1.3	%

Number of communities (period end)	Number of communities (period end)	21			26			(5)			(19.2)	%	Number of communities (period end)	20			21			(1)			(4.8)	%
Number of units (period end)	Number of units (period end)	5,452			6,574			(1,122)			(17.1)	%	Number of units (period end)	5,351			5,452			(101)			(1.9)	%
Total average units	Total average units	5,638			6,574			(936)			(14.2)	%	Total average units	5,351			5,638			(287)			(5.1)	%
RevPAR	RevPAR	$	4,477		$	5,012		$	(535)		(10.7)	%	RevPAR	$	4,824		$	4,477		$	347		7.8	%
Occupancy rate (weighted average)	Occupancy rate (weighted average)	70.7		%	80.4		%	(970)		bps	n/a		Occupancy rate (weighted average)	71.2		%	70.7		%	50		bps	n/a

RevPOR	RevPOR	$	6,332		$	6,234		$	98		1.6	%	RevPOR	$	6,777		$	6,332		$	445		7.0	%

Same Community Operating Results and Data	Same Community Operating Results and Data												Same Community Operating Results and Data
Resident fees	Resident fees	$	50,371		$	59,024		$	(8,653)		(14.7)	%	Resident fees	$	56,608		$	51,967		$	4,641		8.9	%
Other operating income	Other operating income	$	1,677		$	—		$	1,677		NM		Other operating income	$	3		$	1,671		$	(1,668)		(99.8)	%
Facility operating expense	Facility operating expense	$	45,404		$	47,142		$	(1,738)		(3.7)	%	Facility operating expense	$	50,427		$	46,041		$	4,386		9.5	%

Number of communities	Number of communities	14			14			—			—		Number of communities	14			14			—			—
Total average units	Total average units	3,612			3,612			—			—		Total average units	3,603			3,603			—			—
RevPAR	RevPAR	$	4,648		$	5,447		$	(799)		(14.7)	%	RevPAR	$	5,237		$	4,808		$	429		8.9	%
Occupancy rate (weighted average)	Occupancy rate (weighted average)	70.0		%	81.8		%	(1,180)		bps	n/a		Occupancy rate (weighted average)	71.8		%	71.2		%	60		bps	n/a
RevPOR	RevPOR	$	6,645		$	6,659		$	(14)		(0.2)	%	RevPOR	$	7,294		$	6,751		$	543		8.0	%

The ~~decrease~~increase in the segment's resident fees was primarily attributable to ~~a decrease~~the increase in the segment's same community RevPAR, comprised of an 8.0% increase in same community RevPOR and a ~~1180~~60 basis ~~points decrease~~point increase in same community weighted average ~~occupancy and a 0.2% decrease~~occupancy. The increase in the segment's same community ~~RevPOR.~~RevPOR was primarily the result of an occupancy mix shift from less independent living services to more skilled nursing services within the segment and in-place rent increases. The ~~decrease~~increase in the segment's same community weighted average occupancy primarily reflects the impact of ~~reduced~~the net move-in and move-out activity ~~related to the COVID-19 pandemic, including the related restrictions~~ at our communities. We estimate that the COVID-19 pandemic, including the related restrictions at our communities, resulted in $11.7 million of lost resident fee revenue on a same community basis for this segment for the three months ended September 30, 2020. The decrease in the segment's same community RevPOR was primarily the result of a mix shift away from skilled nursing within the segment, partially offset by in-place rent increases. Additionally, the disposition of five communities since the beginning of the prior year period. The segment’s period end occupancy increased on a sequential basis for each of the three months ended March 31, 2021, June 30, 2021, and September 30, 2021. The increase in resident fees was partially offset by disposition of two communities (456 units) since the beginning of the prior year period, which resulted in ~~$11.3~~$4.6 million less in resident fees during the three months ended September 30, ~~2020~~2021 compared to the prior year period.

The ~~decrease~~increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense, including an increase in labor expense arising from increased contract labor and overtime costs due to the intensely competitive labor market and an increase in healthcare supplies costs to respond to increased skilled nursing occupancy during the current year period. These increases in the segment's same community facility operating expense were partially offset by a $2.1 million decrease in incremental direct costs to respond to the COVID-19 pandemic. The increase in the segment's facility operating expense was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in ~~$11.6~~$4.9 million less in facility operating expense during the three months ended September 30, ~~2020~~2021 compared to the prior year ~~period and a decrease in the~~period. The segment's ~~same community facility operating expense. The decrease in the segment's same community~~ facility operating expense ~~was primarily attributable to decreases in labor expense arising from fewer hours worked and healthcare supplies costs during the period as we intentionally scaled back such costs~~ for the ~~reduced occupancy, partially offset by $3.1~~three months ended September 30, 2021 and 2020 includes $1.5 million and $4.4 million, respectively, of incremental direct costs to respond to the COVID-19 pandemic.

In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of $0.9 million and $1.5 million, respectively, during the three months ended September 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019. Same community resident fee revenue and facility

4741

~~operating expense for this segment excludes $0.6 million and $1.0 million, respectively, of such additional revenue and expenses.~~

~~Operating Results - Health Care Services Segment~~

~~The following table summarizes the operating results and data for our Health Care Services segment for the three months ended September 30, 2020 and 2019.~~

(in thousands, except census) Three Months Ended
September 30, Increase (Decrease)
2020 2019 Amount Percent
Resident fees $ 89,903 $ 111,785 $ (21,882) (19.6) %
Other operating income $ 5,892 $ — $ 5,892 NM
Facility operating expense $ 94,333 $ 107,007 $ (12,674) (11.8) %
Home health average daily census 13,146 15,357 (2,211) (14.4) %
Hospice average daily census 1,666 1,642 24 1.5 %

The decrease in the segment's resident fees was primarily attributable to a decrease in revenue for home health services, as our home health average daily census began to decrease in March 2020 due to the COVID-19 pandemic, which resulted in lower occupancy in our communities and fewer elective medical procedures and hospital discharges. The implementation of the PDGM, an alternate home health case-mix adjustment methodology with a 30-day unit of payment, which became effective beginning January 1, 2020, resulted in a decrease in revenue for home health services. We estimate that the COVID-19 pandemic, including the related restrictions at our communities, resulted in $15.1 million of lost resident fee revenue for the three months ended September 30, 2020.

The decrease in the segment's facility operating expense was primarily attributable to a decrease in labor costs for home health services as a result of the lower census and as we adjusted our home health services operational structure, to better align our facility operating expenses and business model with the new payment model. The decrease in the segment's facility operating expense was partially offset by $2.4 million of incremental direct costs to respond to the COVID-19 pandemic.

Operating Results - Management Services Segment

The following table summarizes the operating results and data for our Management Services segment for the three months ended September 30, ~~2020~~2021 and ~~2019.~~2020.


(in thousands, except communities, units, and occupancy)		Three Months Ended September 30,				Increase (Decrease)
		2020		2019		Amount		Percent			Three Months Ended September 30,				Increase (Decrease)
(in thousands, except communities and units)										(in thousands, except communities and units)	2021		2020		Amount		Percent
Management fees	Management fees	$	5,669	$	13,564	$	(7,895)	(58.2)	%	Management fees	$	3,621	$	5,669	$	(2,048)	(36.1)	%
Reimbursed costs incurred on behalf of managed communities	Reimbursed costs incurred on behalf of managed communities	$	90,775	$	194,148	$	(103,373)	(53.2)	%	Reimbursed costs incurred on behalf of managed communities	$	37,849	$	90,775	$	(52,926)	(58.3)	%
Costs incurred on behalf of managed communities										Costs incurred on behalf of managed communities	$	37,849	$	90,775	$	(52,926)	(58.3)	%

Number of communities (period end)	Number of communities (period end)	74		123		(49)		(39.8)	%	Number of communities (period end)	34		74		(40)		(54.1)	%
Number of units (period end)	Number of units (period end)	9,980		20,168		(10,188)		(50.5)	%	Number of units (period end)	4,913		9,980		(5,067)		(50.8)	%
Total average units	Total average units	10,446		20,730		(10,284)		(49.6)	%	Total average units	5,328		10,446		(5,118)		(49.0)	%

The decrease in management fees was primarily attributable to the transition of management arrangements on 6443 net communities since the beginning of the prior year period generally for management arrangements on certain former unconsolidated ventures in which we sold our interest and interim management arrangements on formerly leased communities. Management fees of ~~$5.7~~$3.6 million for the three months ended September 30, ~~2020~~2021 include ~~$1.3~~$0.2 million of management fees attributable to communities for which our management agreements were terminated during such ~~period or we expect the terminations of our management agreements to occur in the next approximately 12 months.~~period.

The decrease in reimbursed costs and costs incurred on behalf of managed communities was primarily attributable to terminations of management agreements subsequent to the beginning of the prior year period.

Operating Results - Other Income and Expense Items

The following table summarizes other income and expense items in our operating results for the three months ended September 30, ~~2020~~2021 and ~~2019.~~2020.


											Three Months Ended September 30,				Increase (Decrease)
(in thousands)	(in thousands)	Three Months Ended September 30,				Increase (Decrease)				(in thousands)	2021		2020		Amount		Percent
		2020		2019		Amount		Percent
General and administrative expense	General and administrative expense	$	54,138	$	56,409	$	(2,271)	(4.0)	%	General and administrative expense	$	43,812	$	54,138	$	(10,326)	(19.1)	%
Facility operating lease expense	Facility operating lease expense	51,620		67,253		(15,633)		(23.2)	%	Facility operating lease expense	43,226		51,620		(8,394)		(16.3)	%
Depreciation and amortization	Depreciation and amortization	87,821		93,550		(5,729)		(6.1)	%	Depreciation and amortization	84,560		87,821		(3,261)		(3.7)	%
Asset impairment	Asset impairment	8,213		2,094		6,119		NM		Asset impairment	639		8,213		(7,574)		(92.2)	%

Costs incurred on behalf of managed communities		90,775		194,148		(103,373)		(53.2)	%
Interest income	Interest income	607		2,162		(1,555)		(71.9)	%	Interest income	286		607		(321)		(52.9)	%
Interest expense	Interest expense	(50,546)		(62,078)		(11,532)		(18.6)	%	Interest expense	49,361		50,546		(1,185)		(2.3)	%
Gain (loss) on debt modification and extinguishment, net	Gain (loss) on debt modification and extinguishment, net	(7,917)		(2,455)		5,462		NM		Gain (loss) on debt modification and extinguishment, net	—		(7,917)		7,917		NM
Equity in earnings (loss) of unconsolidated ventures	Equity in earnings (loss) of unconsolidated ventures	(293)		(2,057)		1,764		NM		Equity in earnings (loss) of unconsolidated ventures	(1,474)		(293)		(1,181)		NM
Gain (loss) on sale of assets, net	Gain (loss) on sale of assets, net	2,209		579		1,630		NM		Gain (loss) on sale of assets, net	288,375		2,209		286,166		NM
Other non-operating income (loss)	Other non-operating income (loss)	948		3,763		(2,815)		(74.8)	%	Other non-operating income (loss)	571		948		(377)		(39.8)	%
Benefit (provision) for income taxes	Benefit (provision) for income taxes	(14,884)		1,800		16,684		NM		Benefit (provision) for income taxes	(15,279)		(14,884)		(395)		(2.7)	%

General and Administrative Expense. The decrease in general and administrative expense was primarily attributable to ~~a reduction~~decreases in ~~our travel~~transaction costs, compensation costs as ~~we intentionally scaled back such activities and~~a result of a reduction in our corporate headcount ~~as we scaled~~related to the sale of 80% of our ~~general~~equity in our Health Care Services segment, and non-cash stock-based compensation expense. General and administrative ~~costs in connection with community dispositions. The decrease was partially offset by a $2.3 million increase in~~expense includes transaction and organizational restructuring costs ~~compared to the prior period, to~~of $0.9 million and $6.3 million for the three months ended September 30, ~~2020.~~2021 and 2020, respectively. Transaction costs include those directly related to acquisition, disposition, financing and leasing activity, and stockholder relations advisory matters, and are primarily comprised of legal, finance, consulting, professional fees, and other ~~third party~~third-party costs. Organizational restructuring costs include those related to our efforts to reduce general and administrative expense and our senior leadership changes, including severance costs. In addition to

the reductions in general and administrative expense directly attributable to the HCS Sale, we expect reductions of general and administrative expense for indirect scaling initiatives, including initiatives previously completed.

Facility Operating Lease Expense. The decrease in facility operating lease expense was primarily due to the Ventas lease portfolio restructuring during the ~~current~~prior year period and ~~the acquisition of formerly leased communities~~lease termination activity since the beginning of the prior year period.

Depreciation and Amortization. The decrease in depreciation and amortization expense was primarily due to ~~leasehold improvements for certain leased communities becoming fully depreciated~~disposition activity since the beginning of the prior year period and ~~disposition activity~~leasehold improvements for certain leased communities becoming fully depreciated since the beginning of the prior year period.

Asset Impairment. During the ~~current year period,~~three months ended September 30, 2021 and 2020, we recorded $0.6 million and $8.2 million, respectively, of non-cash impairment charges, primarily for ~~hurricane and other~~ natural disaster related property damage ~~sustained~~ at certain communities ~~during the period~~ and for right-of-use assets for certain leased communities with decreased future cash flow estimates as a result of the COVID-19 pandemic. During the prior year period, we recorded $2.1 million of non-cash impairment charges. See Note 6 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information about the impairment charges.

~~Costs Incurred~~Gain (loss) on ~~Behalf of Managed Communities.~~Debt Modification and Extinguishment, Net. The decrease in ~~costs incurred~~loss on ~~behalf of managed communities~~debt modification and extinguishment was primarily due to ~~terminations~~$7.8 million of ~~management agreements subsequent to~~costs incurred during the ~~beginning of the prior year period.~~three months ended September 30, 2020 for debt modifications and extinguishments.

~~Interest Expense.~~ Gain (loss) on sale of assets, net.The ~~decrease~~increase in ~~interest expense was primarily~~gain on sale of assets is due to ~~a decrease in interest expense on long-term debt, reflecting~~ the ~~impact of lower interest rates, and~~$288.2 million gain recognized for the ~~acquisition of communities previously subject to financing leases since the beginning of the prior year period.~~HCS Sale.

Benefit (Provision) for Income Taxes. The difference between our effective tax rate for the three months ended September 30, ~~2020~~2021 and ~~2019~~2020 was primarily due to the ~~impact~~HCS Sale that occurred in the three months ended September 30, 2021.

We recorded an aggregate deferred federal, state, and local tax expense of ~~the increase to~~$81.0 million and a reduction in the valuation allowance onof $71.8 million, primarily a result of the ~~annualized effective rate~~HCS Sale in the three months ended September 30, 2021. The change in the valuation allowance for

~~2020.~~ the three months ended September 30, 2021 resulted from the anticipated reversal of future tax liabilities offset by future tax deductions. We recorded an aggregate deferred federal, state, and local tax benefit of $27.4 million as a result of the operating loss for the three months ended September 30, 2020, which was offset by an increase in the valuation allowance of $40.0 million. The change in the valuation allowance for the three months ended September 30, 2020 resulted from the anticipated reversal of future tax liabilities offset by future tax deductions.

We ~~recorded an aggregate~~evaluate our deferred ~~federal, state, and local~~ tax ~~benefit of $19.4 million as~~assets each quarter to determine if a ~~result~~valuation allowance is required based on whether it is more likely than not that some portion of the ~~operating loss for the three months ended~~deferred tax asset would not be realized. Our valuation allowance as of September 30, ~~2019. The tax benefit~~2021 and December 31, 2020 was ~~offset by an increase in the valuation allowance of $17.8 million.~~$354.5 million and $381.0 million, respectively.

Comparison of Nine Months Ended September 30, ~~2020~~2021 and ~~2019~~2020

Summary Operating Results

The following table summarizes our overall operating results for the nine months ended September 30, ~~2020~~2021 and ~~2019.~~2020.


		Nine Months Ended September 30,				Increase (Decrease)					Nine Months Ended September 30,				Increase (Decrease)
(in thousands)	(in thousands)	2020		2019		Amount		Percent		(in thousands)	2021		2020		Amount		Percent
Total resident fees and management fees revenue	Total resident fees and management fees revenue	$	2,335,567	$	2,457,335	$	(121,768)	(5.0)	%	Total resident fees and management fees revenue	$	1,955,608	$	2,335,567	$	(379,959)	(16.3)	%
Other operating income	Other operating income	37,458		—		37,458		NM		Other operating income	12,132		37,458		(25,326)		(67.6)	%
Facility operating expense	Facility operating expense	1,765,046		1,792,057		(27,011)		(1.5)	%	Facility operating expense	1,587,581		1,765,046		(177,465)		(10.1)	%
Net income (loss)	Net income (loss)	126,084		(177,169)		303,253		NM		Net income (loss)	(17,644)		126,084		(143,728)		NM
Adjusted EBITDA	Adjusted EBITDA	165,783		301,066		(135,283)		(44.9)	%	Adjusted EBITDA	102,627		165,783		(63,156)		(38.1)	%

The decrease in total resident fees and management fees revenue was primarily attributable to a ~~$197.5~~$276.7 million decrease in resident fees, including a ~~$61.6 million decrease for home health services, as our home health average daily census began to~~7.7% decrease in ~~March 2020 due~~same community RevPAR, comprised of an 850 basis point decrease in same community weighted average occupancy and a 3.4% increase in same community RevPOR. In addition, the deconsolidation of results of the Health Care Services segment effective July 1, 2021 resulted in a decrease of $89.9 million of resident fees compared to the ~~COVID-19 pandemic and due to the implementation of the PDGM. Additionally, the~~nine months ended September 30, 2020. The disposition of 3515 communities through sales and conveyances of

owned communities and lease terminations since the beginning of the prior year period resulted in ~~$59.3~~$35.3 million less in resident fees during the nine months ended September 30, ~~2020~~2021 compared to the prior year period. Same community RevPAR decreased 3.1%, comprised of a 500 basis points decrease in same community weighted average occupancy and a 3.0% increase in same community RevPOR. We estimate that the COVID-19 pandemic, including the related restrictions at our communities, resulted in $115.8 million of lost resident fee revenue on a same community basis for the nine months ended September 30, 2020. Management fee revenue ~~increased $75.7~~decreased $103.3 million primarily due to $100.0 million of management fee revenue recognized during the three months ended March 31, 2020 for the management termination fee payment from Healthpeak ~~partially offset by terminations~~and transition of management agreements on 66 net communities subsequent to the beginning of the prior year period.

~~Our other operating income for~~During the nine months ended September 30, 2021 and 2020, ~~includes~~we recognized $12.1 million and $37.5 million, respectively, of government grants and employee retention credits as other operating income based on our estimates of our satisfaction of the conditions of the grants and credits during the period.

The decrease in facility operating expense was primarily attributable to a $124.3 million decrease in facility operating expenses for the Health Care Services segment, primarily due to deconsolidation of results of the segment effective July 1, 2021, which resulted in a $94.3 million decrease in facility operating expenses. Additionally, the disposition of communities since the beginning of the prior year period ~~which~~ resulted in ~~$52.6~~$34.1 million less in facility operating expense during the nine months ended September 30, ~~2020~~2021 compared to the prior year period. ~~Additionally, there~~Same community facility operating expense decreased 1.5% which was primarily due to a $42.8 million decrease in incremental direct costs to respond to the COVID-19 pandemic and a decrease in ~~labor~~food costs ~~for home health services as a result of~~due to reduced occupancy during the lower census and as we adjusted our home health services operational structure, to better align our facility operating expenses and business model with the new payment model. The decrease was partially offset by a 6.1% increaseperiod. These decreases in same community facility operating expense ~~which was primarily~~were partially offset by an increase in labor costs arising from an increase in contract labor and overtime costs due to ~~$81.6 million of incremental~~a competitive labor market and an increase in advertising costs ~~incurred~~as we scaled back advertising during the prior year period due to the pandemic. Facility operating expense for the nine months ended September 30, 2021 and 2020 includes $44.3 million and $95.1 million, respectively, of incremental direct costs to respond to the COVID-19 pandemic. ~~Additionally, there was an increase in labor expense arising from wage rate increases, an increase in employee benefit expense, and an extra day of expense due to the leap year.~~

In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense of $16.0 million and $35.0 million, respectively, during the nine months ended September 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019. Same community resident fee revenue and facility operating expense excludes $14.6 million and $31.9 million, respectively, of such additional revenue and expenses.

The ~~increase~~decrease in net income was primarily attributable to ~~a $371.3~~the net impact of the revenue, other operating income, and facility operating expense factors previously discussed, as well as an $84.6 million ~~increase~~decrease in net gain on sale of assets, ~~resulting from our~~primarily due to a $369.8 million gain on sale of assets recognized for the sale of our ownership interest in the CCRC Venture during the prior year period compared to the $288.2 million gain related to the sale of 80% of our equity in our Health Care Services segment in the current period. These decreases were partially offset by ~~the net revenue and~~decreases in non-cash asset impairment expense, facility operating lease expense, ~~factors previously discussed.~~depreciation and impairment expense, and general and administrative expense compared to the prior year period.

The decrease in Adjusted EBITDA was primarily attributable to the ~~$119.2 million one-time cash lease payment made to Ventas in connection with our lease restructuring transaction effective July 26, 2020 and the~~ revenue, other operating income, and facility operating expense factors previously discussed, partially offset by a $163.0 million decrease in ~~general and administrative expense.~~cash facility operating lease payments, primarily reflecting reduced cash lease payments as a result of the lease restructuring transaction with Ventas on July 26, 2020.

Operating Results - Senior Housing Segments

The following table summarizes the operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) on a combined basis for the nine months ended September 30, ~~2020~~2021 and ~~2019~~2020 including operating results and data on a same community basis. See management's discussion and analysis of the operating results on an individual segment basis on the following pages.


														Nine Months Ended September 30,						Increase (Decrease)
(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	Nine Months Ended September 30,						Increase (Decrease)					(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	2021			2020			Amount			Percent
		2020			2019			Amount			Percent
Resident fees	Resident fees	$	1,940,215		$	2,074,828		$	(134,613)		(6.5)	%	Resident fees	$	1,764,259		$	1,940,215		$	(175,956)		(9.1)	%
Other operating income	Other operating income	$	14,571		$	—		$	14,571		NM		Other operating income	$	9,027		$	14,571		$	(5,544)		(38.0)	%
Facility operating expense	Facility operating expense	$	1,469,300		$	1,476,424		$	(7,124)		(0.5)	%	Facility operating expense	$	1,416,128		$	1,469,300		$	(53,172)		(3.6)	%

Number of communities (period end)	Number of communities (period end)	652			671			(19)			(2.8)	%	Number of communities (period end)	648			652			(4)			(0.6)	%
Number of units (period end)	Number of units (period end)	53,110			55,262			(2,152)			(3.9)	%	Number of units (period end)	52,809			53,110			(301)			(0.6)	%
Total average units	Total average units	53,888			55,728			(1,840)			(3.3)	%	Total average units	52,898			53,888			(990)			(1.8)	%
RevPAR	RevPAR	$	3,997		$	4,103		$	(106)		(2.6)	%	RevPAR	$	3,702		$	3,997		$	(295)		(7.4)	%
Occupancy rate (weighted average)	Occupancy rate (weighted average)	79.1		%	83.7		%	(460)		bps	n/a		Occupancy rate (weighted average)	70.9		%	79.1		%	(820)		bps	n/a

RevPOR	RevPOR	$	5,054		$	4,900		$	154		3.1	%	RevPOR	$	5,225		$	5,054		$	171		3.4	%

Same Community Operating Results and Data	Same Community Operating Results and Data												Same Community Operating Results and Data
Resident fees	Resident fees	$	1,783,556		$	1,840,604		$	(57,048)		(3.1)	%	Resident fees	$	1,673,510		$	1,813,002		$	(139,492)		(7.7)	%
Other operating income	Other operating income	$	10,155		$	—		$	10,155		NM		Other operating income	$	8,249		$	10,148		$	(1,899)		(18.7)	%
Facility operating expense	Facility operating expense	$	1,337,034		$	1,260,094		$	76,940		6.1	%	Facility operating expense	$	1,335,267		$	1,355,460		$	(20,193)		(1.5)	%

Number of communities	Number of communities	631			631			—			—	%	Number of communities	634			634			—			—
Total average units	Total average units	49,366			49,358			8			—	%	Total average units	50,148			50,146			2			—
RevPAR	RevPAR	$	4,014		$	4,144		$	(130)		(3.1)	%	RevPAR	$	3,708		$	4,017		$	(309)		(7.7)	%
Occupancy rate (weighted average)	Occupancy rate (weighted average)	79.4		%	84.4		%	(500)		bps	n/a		Occupancy rate (weighted average)	70.8		%	79.3		%	(850)		bps	n/a
RevPOR	RevPOR	$	5,056		$	4,910		$	146		3.0	%	RevPOR	$	5,236		$	5,065		$	171		3.4	%


Delaware			20-3068069
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value Per Share	BKD	New York Stock Exchange


		PAGE
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets -
	As of September 30, ~~2020~~2021 (Unaudited) and December 31, ~~2019~~2020	4

	Condensed Consolidated Statements of Operations -
	Three and nine months ended September 30, ~~2020~~2021 and ~~2019~~2020 (Unaudited)	5

	Condensed Consolidated Statements of Equity -
	Three and nine months ended September 30, ~~2020~~2021 and ~~2019~~2020 (Unaudited)	6

	Condensed Consolidated Statements of Cash Flows -
	Nine months ended S ~~eptember~~September 30, ~~2020~~2021 and ~~2019~~2020 (Unaudited)	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3028

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6558

Item 4.	Controls and Procedures	6659

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	6659

Item 1A.	Risk Factors	6659

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6962

Item 6.	Exhibits	7063

Signatures		7164


		September 30, 2020		December 31, 2019			September 30, 2021		December 31, 2020
Assets	Assets	(Unaudited)				Assets	(Unaudited)
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	354,621	$	240,227	Cash and cash equivalents	$	478,509	$	380,420
Marketable securities	Marketable securities	136,136		68,567		Marketable securities	157,936		172,905
Restricted cash	Restricted cash	35,206		26,856		Restricted cash	37,722		28,059
Accounts receivable, net	Accounts receivable, net	113,820		133,613		Accounts receivable, net	52,223		109,221
Assets held for sale	Assets held for sale	8,324		42,671		Assets held for sale	11,739		16,061
Prepaid expenses and other current assets, net	Prepaid expenses and other current assets, net	73,977		84,241		Prepaid expenses and other current assets, net	94,984		66,937
Total current assets	Total current assets	722,084		596,175		Total current assets	833,113		773,603
Property, plant and equipment and leasehold intangibles, net	Property, plant and equipment and leasehold intangibles, net	5,127,167		5,109,834		Property, plant and equipment and leasehold intangibles, net	4,940,553		5,068,060
Operating lease right-of-use assets	Operating lease right-of-use assets	843,265		1,159,738		Operating lease right-of-use assets	669,158		788,138
Restricted cash	Restricted cash	103,248		34,614		Restricted cash	61,668		56,669
Investment in unconsolidated ventures	Investment in unconsolidated ventures	5,750		21,210		Investment in unconsolidated ventures	103,808		4,898
Goodwill	Goodwill	154,131		154,131		Goodwill	27,321		154,131

Other assets, net	Other assets, net	52,282		118,731		Other assets, net	18,712		56,259
Total assets	Total assets	$	7,007,927	$	7,194,433	Total assets	$	6,654,333	$	6,901,758
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Current liabilities	Current liabilities					Current liabilities
Current portion of long-term debt	Current portion of long-term debt	$	72,345	$	339,413	Current portion of long-term debt	$	219,323	$	68,885
Current portion of financing lease obligations	Current portion of financing lease obligations	19,074		63,146		Current portion of financing lease obligations	21,634		19,543
Current portion of operating lease obligations	Current portion of operating lease obligations	145,953		193,587		Current portion of operating lease obligations	146,451		146,226
Trade accounts payable	Trade accounts payable	62,591		104,721		Trade accounts payable	73,810		71,233

Accrued expenses	Accrued expenses	277,046		266,703		Accrued expenses	293,920		287,851
Refundable fees and deferred revenue	Refundable fees and deferred revenue	142,001		79,402		Refundable fees and deferred revenue	66,778		96,995
Total current liabilities	Total current liabilities	719,010		1,046,972		Total current liabilities	821,916		690,733
Long-term debt, less current portion	Long-term debt, less current portion	3,857,820		3,215,710		Long-term debt, less current portion	3,638,136		3,847,103
Financing lease obligations, less current portion	Financing lease obligations, less current portion	547,922		771,434		Financing lease obligations, less current portion	534,853		543,764
Operating lease obligations, less current portion	Operating lease obligations, less current portion	874,657		1,277,178		Operating lease obligations, less current portion	726,086		819,429

Deferred tax liability	Deferred tax liability	12,671		15,397		Deferred tax liability	18,069		9,557
Other liabilities	Other liabilities	151,677		169,017		Other liabilities	121,493		188,443
Total liabilities	Total liabilities	6,163,757		6,495,708		Total liabilities	5,860,553		6,099,029
Preferred stock, $0.01 par value, 50,000,000 shares authorized at September 30, 2020 and December 31, 2019; 0 shares issued and outstanding		0		0
Common stock, $0.01 par value, 400,000,000 shares authorized at September 30, 2020 and December 31, 2019; 198,442,483 and 199,593,343 shares issued and 187,914,958 and 192,128,586 shares outstanding (including 4,559,537 and 7,252,459 unvested restricted shares), respectively		1,984		1,996
Preferred stock, $0.01 par value, 50,000,000 shares authorized at September 30, 2021 and December 31, 2020; no shares issued and outstanding						Preferred stock, $0.01 par value, 50,000,000 shares authorized at September 30, 2021 and December 31, 2020; no shares issued and outstanding	—		—
Common stock, $0.01 par value, 400,000,000 shares authorized at September 30, 2021 and December 31, 2020; 197,486,683 and 198,331,663 shares issued and 186,959,158 and 187,804,138 shares outstanding (including 1,598,510 and 4,349,421 unvested restricted shares), respectively						Common stock, $0.01 par value, 400,000,000 shares authorized at September 30, 2021 and December 31, 2020; 197,486,683 and 198,331,663 shares issued and 186,959,158 and 187,804,138 shares outstanding (including 1,598,510 and 4,349,421 unvested restricted shares), respectively	1,975		1,983
Additional paid-in-capital	Additional paid-in-capital	4,209,710		4,172,099		Additional paid-in-capital	4,221,112		4,212,409
Treasury stock, at cost; 10,527,525 and 7,464,757 shares at September 30, 2020 and December 31, 2019, respectively		(102,774)		(84,651)
Treasury stock, at cost; 10,527,525 shares at September 30, 2021 and December 31, 2020						Treasury stock, at cost; 10,527,525 shares at September 30, 2021 and December 31, 2020	(102,774)		(102,774)
Accumulated deficit	Accumulated deficit	(3,267,064)		(3,393,088)		Accumulated deficit	(3,328,772)		(3,311,184)
Total Brookdale Senior Living Inc. stockholders' equity	Total Brookdale Senior Living Inc. stockholders' equity	841,856		696,356		Total Brookdale Senior Living Inc. stockholders' equity	791,541		800,434
Noncontrolling interest	Noncontrolling interest	2,314		2,369		Noncontrolling interest	2,239		2,295
Total equity	Total equity	844,170		698,725		Total equity	793,780		802,729
Total liabilities and equity	Total liabilities and equity	$	7,007,927	$	7,194,433	Total liabilities and equity	$	6,654,333	$	6,901,758


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Revenue and other operating income
Revenue										Revenue
Resident fees	Resident fees	$	700,771	$	801,237	$	2,215,107	$	2,412,579	Resident fees	$	600,095	$	700,771	$	1,938,423	$	2,215,107
Management fees	Management fees	5,669		13,564		120,460		44,756		Management fees	3,621		5,669		17,185		120,460
Reimbursed costs incurred on behalf of managed communities	Reimbursed costs incurred on behalf of managed communities	90,775		194,148		315,003		613,115		Reimbursed costs incurred on behalf of managed communities	37,849		90,775		146,651		315,003
Other operating income	Other operating income	10,765		0		37,458		0		Other operating income	89		10,765		12,132		37,458
Total revenue and other operating income	Total revenue and other operating income	807,980		1,008,949		2,688,028		3,070,450		Total revenue and other operating income	641,654		807,980		2,114,391		2,688,028

Expense	Expense									Expense
Facility operating expense (excluding facility depreciation and amortization of $81,854, $86,213, $253,126, and $261,110, respectively)		570,530		615,717		1,765,046		1,792,057
General and administrative expense (including non-cash stock-based compensation expense of $6,136, $5,929, $18,212, and $18,315, respectively)		54,138		56,409		161,251		170,296
Facility operating expense (excluding facility depreciation and amortization of $78,756, $81,854, $233,951, and $253,126, respectively)										Facility operating expense (excluding facility depreciation and amortization of $78,756, $81,854, $233,951, and $253,126, respectively)	480,423		570,530		1,587,581		1,765,046

General and administrative expense (including non-cash stock-based compensation expense of $3,568, $6,136, $12,878, and $18,212, respectively)										General and administrative expense (including non-cash stock-based compensation expense of $3,568, $6,136, $12,878, and $18,212, respectively)	43,812		54,138		146,155		161,251

Facility operating lease expense	Facility operating lease expense	51,620		67,253		178,480		203,610		Facility operating lease expense	43,226		51,620		131,508		178,480
Depreciation and amortization	Depreciation and amortization	87,821		93,550		271,713		284,462		Depreciation and amortization	84,560		87,821		252,042		271,713
Asset impairment	Asset impairment	8,213		2,094		96,729		6,254		Asset impairment	639		8,213		13,394		96,729
Loss (gain) on facility lease termination and modification, net		0		0		0		2,006

Costs incurred on behalf of managed communities	Costs incurred on behalf of managed communities	90,775		194,148		315,003		613,115		Costs incurred on behalf of managed communities	37,849		90,775		146,651		315,003
Total operating expense	Total operating expense	863,097		1,029,171		2,788,222		3,071,800		Total operating expense	690,509		863,097		2,277,331		2,788,222
Income (loss) from operations	Income (loss) from operations	(55,117)		(20,222)		(100,194)		(1,350)		Income (loss) from operations	(48,855)		(55,117)		(162,940)		(100,194)

Interest income	Interest income	607		2,162		4,305		8,059		Interest income	286		607		1,048		4,305
Interest expense:	Interest expense:									Interest expense:
Debt	Debt	(36,908)		(44,344)		(117,645)		(135,180)		Debt	(35,708)		(36,908)		(106,484)		(117,645)
Financing lease obligations	Financing lease obligations	(11,908)		(16,567)		(37,082)		(49,959)		Financing lease obligations	(11,674)		(11,908)		(34,549)		(37,082)
Amortization of deferred financing costs and debt discount	Amortization of deferred financing costs and debt discount	(1,730)		(1,167)		(4,601)		(3,132)		Amortization of deferred financing costs and debt discount	(1,979)		(1,730)		(5,992)		(4,601)
Gain (loss) on debt modification and extinguishment, net	Gain (loss) on debt modification and extinguishment, net	(7,917)		(2,455)		11,107		(5,194)		Gain (loss) on debt modification and extinguishment, net	—		(7,917)		—		11,107
Equity in earnings (loss) of unconsolidated ventures	Equity in earnings (loss) of unconsolidated ventures	(293)		(2,057)		(863)		(3,574)		Equity in earnings (loss) of unconsolidated ventures	(1,474)		(293)		11,941		(863)
Gain (loss) on sale of assets, net	Gain (loss) on sale of assets, net	2,209		579		374,019		2,723		Gain (loss) on sale of assets, net	288,375		2,209		289,408		374,019
Other non-operating income (loss)	Other non-operating income (loss)	948		3,763		4,598		9,950		Other non-operating income (loss)	571		948		5,163		4,598
Income (loss) before income taxes	Income (loss) before income taxes	(110,109)		(80,308)		133,644		(177,657)		Income (loss) before income taxes	189,542		(110,109)		(2,405)		133,644
Benefit (provision) for income taxes	Benefit (provision) for income taxes	(14,884)		1,800		(7,560)		488		Benefit (provision) for income taxes	(15,279)		(14,884)		(15,239)		(7,560)
Net income (loss)	Net income (loss)	(124,993)		(78,508)		126,084		(177,169)		Net income (loss)	174,263		(124,993)		(17,644)		126,084
Net (income) loss attributable to noncontrolling interest	Net (income) loss attributable to noncontrolling interest	18		50		55		646		Net (income) loss attributable to noncontrolling interest	19		18		56		55
Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders	Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders	$	(124,975)	$	(78,458)	$	126,139	$	(176,523)	Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders	$	174,282	$	(124,975)	$	(17,588)	$	126,139

Net income (loss) per share attributable to Brookdale Senior Living Inc. common stockholders:	Net income (loss) per share attributable to Brookdale Senior Living Inc. common stockholders:									Net income (loss) per share attributable to Brookdale Senior Living Inc. common stockholders:
Basic	Basic	$	(0.68)	$	(0.42)	$	0.69	$	(0.95)	Basic	$	0.94	$	(0.68)	$	(0.10)	$	0.69
Diluted	Diluted	$	(0.68)	$	(0.42)	$	0.69	$	(0.95)	Diluted	$	0.89	$	(0.68)	$	(0.10)	$	0.69

Weighted average common shares outstanding:	Weighted average common shares outstanding:									Weighted average common shares outstanding:
Basic	Basic	183,244		185,516		183,535		186,130		Basic	185,317		183,244		184,841		183,535
Diluted	Diluted	183,244		185,516		183,668		186,130		Diluted	196,230		183,244		184,841		183,668


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2020		2019			2021		2020
Cash Flows from Operating Activities	Cash Flows from Operating Activities					Cash Flows from Operating Activities
Net income (loss)	Net income (loss)	$	126,084	$	(177,169)	Net income (loss)	$	(17,644)	$	126,084
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:					Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Loss (gain) on debt modification and extinguishment, net	Loss (gain) on debt modification and extinguishment, net	(11,107)		5,194		Loss (gain) on debt modification and extinguishment, net	—		(11,107)
Depreciation and amortization, net	Depreciation and amortization, net	276,314		287,594		Depreciation and amortization, net	258,034		276,314
Asset impairment	Asset impairment	96,729		6,254		Asset impairment	13,394		96,729
Equity in (earnings) loss of unconsolidated ventures	Equity in (earnings) loss of unconsolidated ventures	863		3,574		Equity in (earnings) loss of unconsolidated ventures	(11,941)		863
Distributions from unconsolidated ventures from cumulative share of net earnings	Distributions from unconsolidated ventures from cumulative share of net earnings	766		2,388		Distributions from unconsolidated ventures from cumulative share of net earnings	6,191		766
Amortization of entrance fees	Amortization of entrance fees	(1,606)		(1,172)		Amortization of entrance fees	(1,320)		(1,606)
Proceeds from deferred entrance fee revenue	Proceeds from deferred entrance fee revenue	118		2,902		Proceeds from deferred entrance fee revenue	2,981		118
Deferred income tax (benefit) provision	Deferred income tax (benefit) provision	(2,727)		(1,216)		Deferred income tax (benefit) provision	8,512		(2,727)
Operating lease expense adjustment	Operating lease expense adjustment	(132,276)		(13,626)		Operating lease expense adjustment	(16,263)		(132,276)
Loss (gain) on sale of assets, net	Loss (gain) on sale of assets, net	(374,019)		(2,723)		Loss (gain) on sale of assets, net	(289,408)		(374,019)
Loss (gain) on facility lease termination and modification, net		0		2,006

Non-cash stock-based compensation expense	Non-cash stock-based compensation expense	18,212		18,315		Non-cash stock-based compensation expense	12,878		18,212
Non-cash management contract termination gain		0		(640)

Other	Other	(1,965)		(7,173)		Other	(4,399)		(1,965)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable, net	Accounts receivable, net	19,678		(6,756)		Accounts receivable, net	(584)		19,678
Prepaid expenses and other assets, net	Prepaid expenses and other assets, net	27,504		50,387		Prepaid expenses and other assets, net	(7,487)		27,504
Prepaid insurance premiums financed with notes payable	Prepaid insurance premiums financed with notes payable	(5,823)		(5,875)		Prepaid insurance premiums financed with notes payable	(4,634)		(5,823)
Trade accounts payable and accrued expenses	Trade accounts payable and accrued expenses	17,002		(21,970)		Trade accounts payable and accrued expenses	21,878		17,002
Refundable fees and deferred revenue	Refundable fees and deferred revenue	64,763		(24,007)		Refundable fees and deferred revenue	(10,492)		64,763
Operating lease assets and liabilities for lessor capital expenditure reimbursements	Operating lease assets and liabilities for lessor capital expenditure reimbursements	13,640		12,043		Operating lease assets and liabilities for lessor capital expenditure reimbursements	27,057		13,640

Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	132,150		128,330		Net cash provided by (used in) operating activities	(13,247)		132,150
Cash Flows from Investing Activities	Cash Flows from Investing Activities					Cash Flows from Investing Activities
Change in lease security deposits and lease acquisition deposits, net	Change in lease security deposits and lease acquisition deposits, net	3,399		(430)		Change in lease security deposits and lease acquisition deposits, net	19		3,399
Purchase of marketable securities	Purchase of marketable securities	(255,373)		(137,786)		Purchase of marketable securities	(247,847)		(255,373)
Sale and maturities of marketable securities	Sale and maturities of marketable securities	188,750		104,000		Sale and maturities of marketable securities	262,995		188,750
Capital expenditures, net of related payables	Capital expenditures, net of related payables	(140,690)		(206,385)		Capital expenditures, net of related payables	(125,817)		(140,690)
Acquisition of assets, net of related payables and cash received	Acquisition of assets, net of related payables and cash received	(472,193)		(453)		Acquisition of assets, net of related payables and cash received	—		(472,193)
Investment in unconsolidated ventures	Investment in unconsolidated ventures	(1,809)		(4,294)		Investment in unconsolidated ventures	(5,359)		(1,809)
Distributions received from unconsolidated ventures	Distributions received from unconsolidated ventures	0		7,454		Distributions received from unconsolidated ventures	2,155		—
Proceeds from sale of assets, net	Proceeds from sale of assets, net	331,103		53,430		Proceeds from sale of assets, net	315,583		331,103
Proceeds from notes receivable	Proceeds from notes receivable	2,849		34,109		Proceeds from notes receivable	—		2,849
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(343,964)		(150,355)		Net cash provided by (used in) investing activities	201,729		(343,964)
Cash Flows from Financing Activities	Cash Flows from Financing Activities					Cash Flows from Financing Activities
Proceeds from debt	Proceeds from debt	961,833		318,491		Proceeds from debt	25,158		961,833
Repayment of debt and financing lease obligations	Repayment of debt and financing lease obligations	(518,700)		(404,152)		Repayment of debt and financing lease obligations	(96,065)		(518,700)
Proceeds from line of credit	Proceeds from line of credit	166,381		0		Proceeds from line of credit	—		166,381
Repayment of line of credit	Repayment of line of credit	(166,381)		0		Repayment of line of credit	—		(166,381)
Purchase of treasury stock, net of related payables	Purchase of treasury stock, net of related payables	(18,123)		(18,401)		Purchase of treasury stock, net of related payables	—		(18,123)
Payment of financing costs, net of related payables	Payment of financing costs, net of related payables	(18,141)		(6,357)		Payment of financing costs, net of related payables	(196)		(18,141)
Payments of employee taxes for withheld shares	Payments of employee taxes for withheld shares	(4,012)		(3,242)		Payments of employee taxes for withheld shares	(4,772)		(4,012)
Other	Other	335		827		Other	144		335
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	403,192		(112,834)		Net cash provided by (used in) financing activities	(75,731)		403,192
Net increase (decrease) in cash, cash equivalents, and restricted cash	Net increase (decrease) in cash, cash equivalents, and restricted cash	191,378		(134,859)		Net increase (decrease) in cash, cash equivalents, and restricted cash	112,751		191,378
Cash, cash equivalents, and restricted cash at beginning of period	Cash, cash equivalents, and restricted cash at beginning of period	301,697		450,218		Cash, cash equivalents, and restricted cash at beginning of period	465,148		301,697
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	493,075	$	315,359	Cash, cash equivalents, and restricted cash at end of period	$	577,899	$	493,075


	Three Months Ended September 30, 2021
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Total
Private pay	$	119,137	$	385,553	$	53,366	$	558,056
Government reimbursement	447		17,068		15,252		32,767
Other third-party payor programs	—		—		9,272		9,272
Total resident fee revenue	$	119,584	$	402,621	$	77,890	$	600,095

	Three Months Ended September 30, 2020
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	125,156	$	391,292	$	57,129	$	221	$	573,798
Government reimbursement	606		17,403		13,440		71,095		102,544
Other third-party payor programs	—		—		5,842		18,587		24,429
Total resident fee revenue	$	125,762	$	408,695	$	76,411	$	89,903	$	700,771


	Nine Months Ended September 30, 2021
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	354,996	$	1,130,735	$	159,105	$	601	$	1,645,437
Government reimbursement	1,375		50,542		42,165		134,083		228,165
Other third-party payor programs	—		—		25,341		39,480		64,821
Total resident fee revenue	$	356,371	$	1,181,277	$	226,611	$	174,164	$	1,938,423

	Nine Months Ended September 30, 2020
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	390,124	$	1,246,181	$	181,812	$	649	$	1,818,766
Government reimbursement	1,778		52,149		46,589		215,350		315,866
Other third-party payor programs	—		—		21,582		58,893		80,475
Total resident fee revenue	$	391,902	$	1,298,330	$	249,983	$	274,892	$	2,215,107


(in thousands, except for per share and unit amounts)	Restricted Stock Units and Stock Awards Granted	Weighted Average Grant Date Fair Value		Total Grant Date Fair Value
Three months ended March 31, 2020	4,438	$	7.06	$	31,341
Three months ended June 30, 2020	78	$	3.91	$	303
Three months ended September 30, 2020	52	$	2.78	$	144


(in thousands)	(in thousands)	September 30, 2020		December 31, 2019		(in thousands)	September 30, 2021		December 31, 2020
Land	Land	$	503,686	$	450,894	Land	$	502,918	$	505,298
Buildings and improvements	Buildings and improvements	5,193,677		4,790,769		Buildings and improvements	5,251,220		5,215,460
Furniture and equipment	Furniture and equipment	933,474		859,849		Furniture and equipment	973,932		945,783
Resident and leasehold operating intangibles	Resident and leasehold operating intangibles	310,230		317,111		Resident and leasehold operating intangibles	304,837		307,071
Construction in progress	Construction in progress	62,319		80,729		Construction in progress	48,632		61,491
Assets under financing leases and leasehold improvements	Assets under financing leases and leasehold improvements	1,539,276		1,847,493		Assets under financing leases and leasehold improvements	1,589,501		1,523,055
Property, plant and equipment and leasehold intangibles	Property, plant and equipment and leasehold intangibles	8,542,662		8,346,845		Property, plant and equipment and leasehold intangibles	8,671,040		8,558,158
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(3,415,495)		(3,237,011)		Accumulated depreciation and amortization	(3,730,487)		(3,490,098)
Property, plant and equipment and leasehold intangibles, net	Property, plant and equipment and leasehold intangibles, net	$	5,127,167	$	5,109,834	Property, plant and equipment and leasehold intangibles, net	$	4,940,553	$	5,068,060


	Three Months Ended September 30,				Nine Months Ended September 30,
Financing Leases (in thousands)	2020		2019		2020		2019
Depreciation and amortization	$	7,818	$	11,675	$	24,999	$	35,030
Interest expense: financing lease obligations	11,908		16,567		37,082		49,959
Financing lease expense	$	19,726	$	28,242	$	62,081	$	84,989

Operating cash flows from financing leases	$	11,908	$	16,567	$	37,082	$	49,959
Financing cash flows from financing leases	4,548		5,549		14,312		16,502
Changes in financing lease assets and liabilities for lessor capital expenditure reimbursement	(923)		0		(4,337)		0
Total cash flows from financing leases	$	15,533	$	22,116	$	47,057	$	66,461


Year Ending December 31,	Year Ending December 31,	Operating Leases		Financing Leases		Year Ending December 31,	Operating Leases		Financing Leases
2020 (three months)		$	53,625	$	15,968
2021		212,133		64,630
2021 (three months)						2021 (three months)	$	50,822	$	16,608
2022	2022	195,487		65,234		2022	205,262		67,070
2023	2023	195,734		65,960		2023	193,855		67,791
2024	2024	195,462		67,166		2024	194,607		68,992
2025						2025	192,345		59,023
Thereafter	Thereafter	482,894		166,745		Thereafter	284,938		112,922
Total lease payments	Total lease payments	1,335,335		445,703		Total lease payments	1,121,829		392,406
Purchase option liability and non-cash gain on future sale of property	Purchase option liability and non-cash gain on future sale of property	0		412,817		Purchase option liability and non-cash gain on future sale of property	—		416,575
Imputed interest and variable lease payments	Imputed interest and variable lease payments	(314,725)		(291,524)		Imputed interest and variable lease payments	(249,292)		(252,494)
Total lease obligations	Total lease obligations	$	1,020,610	$	566,996	Total lease obligations	$	872,537	$	556,487


(in thousands, except weighted average amounts)	Restricted Stock Unit and Stock Award Grants	Weighted Average Grant Date Fair Value		Total Grant Date Fair Value
Three months ended March 31, 2021	1,961	$	5.09	$	9,988
Three months ended June 30, 2021	20	$	6.62	$	130
Three months ended September 30, 2021	3	$	7.76	$	22


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except for per share amounts)	2021		2020		2021		2020
Income attributable to common stockholders:
Net income (loss)	$	174,282	$	(124,975)	$	(17,588)	$	126,139

Weighted average shares outstanding - basic	185,317		183,244		184,841		183,535
Effect of dilutive securities	10,913		—		—		133
Weighted average shares outstanding - diluted	196,230		183,244		184,841		183,668

Basic earnings (loss) per common share:
Net income (loss) per share attributable to common stockholders	$	0.94	$	(0.68)	$	(0.10)	$	0.69

Diluted earnings (loss) per common share:
Net income (loss) per share attributable to common stockholders	$	0.89	$	(0.68)	$	(0.10)	$	0.69


	Three Months Ended September 30,		Nine Months Ended September 30,
(in millions)	2021	2020(1)	2021(1)	2020
Non-performance-based restricted stock and restricted stock units	3.5	7.1	4.9	6.9
Performance-based restricted stock and restricted stock units	0.3	1.9	0.3	1.8
Warrants	6.8	16.3	16.3	16.3
Total	10.6	25.3	21.5	25.0


Master Agreement with Ventas:						Master Agreement with Ventas:
Property, plant and equipment and leasehold intangibles, net						Property, plant and equipment and leasehold intangibles, net	$	—	$	(66,444)
Operating lease right-of-use assets						Operating lease right-of-use assets	—		(153,213)
Other assets, net	Other assets, net	(42,354)		0		Other assets, net	—		(42,354)
Long-term debt	Long-term debt	34,053		0		Long-term debt	—		34,053
Financing lease obligations	Financing lease obligations	7,077		0		Financing lease obligations	—		7,077
Operating lease obligations	Operating lease obligations	362,944		0		Operating lease obligations	—		362,944
Additional paid-in-capital	Additional paid-in-capital	(22,883)		0		Additional paid-in-capital	—		(22,883)
Net cash paid	Net cash paid	$	119,180	$	0	Net cash paid	$	—	$	119,180
Proceeds from HCS Sale, net:						Proceeds from HCS Sale, net:
Accounts receivable, net						Accounts receivable, net	$	(57,582)	$	—
Property, plant and equipment and leasehold intangibles, net						Property, plant and equipment and leasehold intangibles, net	(1,806)		—
Operating lease right-of-use assets						Operating lease right-of-use assets	(8,145)		—
Investments in unconsolidated ventures						Investments in unconsolidated ventures	100,000		—
Goodwill						Goodwill	(126,810)		—
Prepaid expenses and other assets, net						Prepaid expenses and other assets, net	(26,409)		—
Trade accounts payable						Trade accounts payable	1,387		—
Accrued expenses						Accrued expenses	25,226		—
Refundable fees and deferred revenue						Refundable fees and deferred revenue	57,314		—
Operating lease obligations						Operating lease obligations	8,145		—
Other liabilities						Other liabilities	11,135		—
Loss (gain) on sale of assets, net						Loss (gain) on sale of assets, net	(288,233)		—
Net cash received						Net cash received	$	(305,778)	$	—

Acquisition of other assets, net of related payables and cash received:	Acquisition of other assets, net of related payables and cash received:					Acquisition of other assets, net of related payables and cash received:
Property, plant and equipment and leasehold intangibles, net	Property, plant and equipment and leasehold intangibles, net	$	684	$	0	Property, plant and equipment and leasehold intangibles, net	$	—	$	684

Other intangible assets, net		0		453

Financing lease obligations	Financing lease obligations	64,260		0		Financing lease obligations	—		64,260

Net cash paid	Net cash paid	$	64,944	$	453	Net cash paid	$	—	$	64,944
Proceeds from sale of CCRC Venture, net:	Proceeds from sale of CCRC Venture, net:					Proceeds from sale of CCRC Venture, net:
Investments in unconsolidated ventures	Investments in unconsolidated ventures	$	(14,848)	$	0	Investments in unconsolidated ventures	$	—	$	(14,848)
Current portion of long-term debt	Current portion of long-term debt	34,706		0		Current portion of long-term debt	—		34,706

Other liabilities	Other liabilities	60,748		0		Other liabilities	—		60,748
Loss (gain) on sale of assets, net	Loss (gain) on sale of assets, net	(369,831)		0		Loss (gain) on sale of assets, net	—		(369,831)
Net cash received	Net cash received	$	(289,225)	$	0	Net cash received	$	—	$	(289,225)

Proceeds from sale of other assets, net:	Proceeds from sale of other assets, net:					Proceeds from sale of other assets, net:
Prepaid expenses and other assets, net	Prepaid expenses and other assets, net	$	(1,318)	$	(5,298)	Prepaid expenses and other assets, net	$	—	$	(1,318)
Assets held for sale	Assets held for sale	(34,348)		(41,882)		Assets held for sale	(8,040)		(34,348)
Property, plant and equipment and leasehold intangibles, net	Property, plant and equipment and leasehold intangibles, net	(938)		(647)		Property, plant and equipment and leasehold intangibles, net	(568)		(938)
Investments in unconsolidated ventures		0		(156)

Other liabilities	Other liabilities	(1,086)		(2,724)		Other liabilities	(22)		(1,086)
Loss (gain) on sale of assets, net	Loss (gain) on sale of assets, net	(4,188)		(2,723)		Loss (gain) on sale of assets, net	(1,175)		(4,188)

Net cash received	Net cash received	$	(41,878)	$	(53,430)	Net cash received	$	(9,805)	$	(41,878)

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

Assets designated as held for sale:
Prepaid expenses and other assets, net		$	0	$	(5)
Assets held for sale		0		9,169
Property, plant and equipment and leasehold intangibles, net		0		(9,164)

Net		$	0	$	0

Healthpeak master lease modification:
Property, plant and equipment and leasehold intangibles, net		$	(57,462)	$	0
Operating lease right-of-use assets		88,044		0
Financing lease obligations		70,874		0
Operating lease obligations		(101,456)		0
Net		$	0	$	0
Other lease termination and modification, net:
Prepaid expenses and other assets, net		$	0	$	(648)
Property, plant and equipment and leasehold intangibles, net		13,498		(1,666)

Operating lease right-of-use assets		7,291		(8,644)
Financing lease obligations		(15,483)		0
Operating lease obligations		(5,199)		9,289

Other liabilities		(107)		(337)

Loss (gain) on facility lease termination and modification, net		0		2,006
Net		$	0	$	0


		As of					As of
(in thousands)	(in thousands)	September 30, 2020		December 31, 2019		(in thousands)	September 30, 2021		December 31, 2020
Total assets:	Total assets:					Total assets:
Independent Living	Independent Living	$	1,434,312	$	1,441,652	Independent Living	$	1,367,177	$	1,419,838
Assisted Living and Memory Care	Assisted Living and Memory Care	3,853,458		4,157,610		Assisted Living and Memory Care	3,653,277		3,787,611
CCRCs	CCRCs	759,743		742,809		CCRCs	715,310		738,121
Corporate and Management Services						Corporate and Management Services	918,569		723,010
Health Care Services	Health Care Services	238,621		256,715		Health Care Services	—		233,178
Corporate and Management Services		721,793		595,647
Total assets	Total assets	$	7,007,927	$	7,194,433	Total assets	$	6,654,333	$	6,901,758


	Three Months Ended September 30, 2020
(in thousands)	Actual Results		Amounts Attributable to Completed Dispositions		Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
Independent Living	$	125,762	$	—	$	125,762
Assisted Living and Memory Care	408,695		1,279		407,416
CCRCs	76,411		2,158		74,253
Senior housing resident fees	$	610,868	$	3,437	$	607,431
Facility operating expense
Independent Living	$	83,420	$	—	$	83,420
Assisted Living and Memory Care	323,479		1,195		322,284
CCRCs	69,298		2,077		67,221
Senior housing facility operating expense	$	476,197	$	3,272	$	472,925
Cash facility lease payments	$	185,398	$	—	$	185,398


	Three Months Ended September 30, 2019
(in thousands)	Actual Results		Amounts Attributable to Completed Dispositions		Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
Independent Living	$	136,874	$	—	$	136,874
Assisted Living and Memory Care	452,474		9,960		442,514
CCRCs	100,104		13,435		86,669
Senior housing resident fees	$	689,452	$	23,395	$	666,057
Facility operating expense
Independent Living	$	87,460	$	—	$	87,460
Assisted Living and Memory Care	335,618		8,907		326,711
CCRCs	85,632		13,700		71,932
Senior housing facility operating expense	$	508,710	$	22,607	$	486,103
Cash facility lease payments	$	94,183	$	947	$	93,236


	Nine Months Ended September 30, 2019
(in thousands)	Actual Results		Amounts Attributable to Completed Dispositions		Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
Independent Living	$	408,519	$	—	$	408,519
Assisted Living and Memory Care	1,361,225		41,647		1,319,578
CCRCs	305,084		41,606		263,478
Senior housing resident fees	$	2,074,828	$	83,253	$	1,991,575
Facility operating expense
Independent Living	$	254,770	$	—	$	254,770
Assisted Living and Memory Care	970,526		35,542		934,984
CCRCs	251,128		39,683		211,445
Senior housing facility operating expense	$	1,476,424	$	75,225	$	1,401,199
Cash facility lease payments	$	283,697	$	4,265	$	279,432


	Nine Months Ended September 30, 2020	Twelve Months Ended December 31, 2019
Number of communities

Assisted Living and Memory Care	10	20
CCRCs	1	4
Total	11	24
Total units

Assisted Living and Memory Care	827	1,600
CCRCs	297	827
Total	1,124	2,427


(in thousands, except census)	Three Months Ended September 30,				Increase (Decrease)
	2020		2019		Amount		Percent
Resident fees	$	89,903	$	111,785	$	(21,882)	(19.6)	%
Other operating income	$	5,892	$	—	$	5,892	NM
Facility operating expense	$	94,333	$	107,007	$	(12,674)	(11.8)	%

Home health average daily census	13,146		15,357		(2,211)		(14.4)	%
Hospice average daily census	1,666		1,642		24		1.5	%


(in millions)	~~Nine Months Ended September 30, 2020~~
Community-level capital expenditures, net(1)	$	~~86.9~~73.8
Corporate capital expenditures, net(2)	~~18.0~~17.6
Non-development capital expenditures, net(3)	~~104.9~~91.4
Development capital expenditures, net	~~9.9~~2.7
Total capital expenditures, net	$	~~114.8~~94.1


			Payments Due during the Period Ending December 31,
(in millions)	Total		2020		2021		2022		2023		2024		Thereafter

Contractual Obligations:
Principal on long-term debt(1)	$	3,958.5	$	16.2	$	72.5	$	352.4	$	234.4	$	304.2	$	2,978.8
Interest on long-term debt(2)	921.6		36.3		143.3		133.3		121.8		116.4		370.5
Long-term debt	4,880.1		52.5		215.8		485.7		356.2		420.6		3,349.3
Financing lease obligations(3)	445.7		16.0		64.6		65.2		66.0		67.2		166.7
Operating lease obligations(4)	1,335.3		53.6		212.1		195.5		195.7		195.5		482.9

Total contractual obligations	$	6,661.1	$	122.1	$	492.5	$	746.4	$	617.9	$	683.3	$	3,998.9


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs ($ in thousands) (2)
7/1/2020 - 7/31/2020	—	$	—	—	$	44,026
8/1/2020 - 8/31/2020	22,010	2.75		—	44,026
9/1/2020 - 9/30/2020	—	—		—	44,026
Total	22,010	$	—	—


Exhibit No.						Description

2.1						Securities Purchase Agreement dated as of February 24, 2021, by and among the Company and certain of its subsidiaries and certain subsidiaries of HCA Healthcare, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on February 24, 2021 (File No. 001-32641)).*
3.1						Amended and Restated Certificate of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q filed on November 5, 2019 (File No. 001-32641)).
3.2						Amended and Restated Bylaws of the Company dated October 29, 2019 (incorporated by reference to Exhibit 3.3 to the Company's Current Report on Form 8-K filed on October 29, 2019 (File No. 001-32641)).
4.1						Form of Certificate for common stock (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-1 (Amendment No. 3) filed on November 7, 2005 (File No. 333-127372)).
4.2						Description of the Company's common stock (incorporated by reference to Exhibit 4.2 to the Company's Annual Report on Form 10-K filed on February 19, 2020 (File No. 001-32641)).
4.3						Indenture, dated as of October 1, 2021, by and among the Company and American Stock Transfer & Trust Company, LLC, as trustee, governing the 2.00% Convertible Senior Notes due 2026 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 1, 2021 (File No. 001-32641)).
4.4						Form of 2.00% Convertible Senior Notes due 2026 (included in Exhibit 4.3).
10.1						L ~~etter~~ ~~Agreement~~Amendment No. 2 dated ~~as of~~effective July ~~26, 2020 by and between the Company and Ventas(incorporated by~~ ~~reference~~12, 2021 to ~~Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on August 10, 2020 (File No. 001-32641))~~.*
~~10.2~~						Amended and Restated Master Lease and Security Agreement ~~dated as of July 26, 2020~~ by ~~an among~~and between certain ~~subsidiaries~~affiliates of the Company as Tenant and certain subsidiaries of Ventas as ~~Landlord~~Landlord. ~~(incorporated~~(incorporated by reference to Exhibit ~~10.2~~10.2 to the ~~Company's~~Company’s Quarterly Report on Form 10-Q filed on August ~~10, 2020~~6 , 2021 (File No. 001-32641)).*
~~10.3~~						~~Amended and Restated Guaranty dated as of July 26, 2020 by and among the Company as Guarantor, certain subsidiaries of the Company as Tenant, and Ventas and certain of its subsidiaries~~ ~~(incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q filed on August 10, 2020 (File No. 001-32641))~~.*
~~10.4~~						~~Warrant dated July 26, 2020 by and between the Company and Ventas~~ ~~(incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q filed on August 10, 2020 (File No. 001-32641))~~.
~~10.5~~						~~Registration Rights Agreement dated as of July 26, 2020 by and between the Company and Ventas~~ ~~(incorporated by reference to Exhibit 10.~~5 ~~to the Company's Quarterly Report on Form 10-Q filed on August 10, 2020 (File No. 001-32641))~~.
31.1						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32						Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.SCH						Inline XBRL Taxonomy Extension Schema Document.
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104						The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2020,~~2021, formatted in Inline XBRL (included in Exhibit 101).
*						~~Portions of this exhibit~~Schedules and exhibits have been omitted pursuant to Item ~~601(b)(10)(iv)~~601 of Regulation S-K. The Company hereby undertakes to furnish supplementally a copy of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission.


			BROOKDALE SENIOR LIVING INC.
			(Registrant)

			By:			/s/ Steven E. Swain
			Name:			Steven E. Swain
			Title:			Executive Vice President and Chief Financial Officer (Principal Financial Officer)
			Date:			November 5, ~~2020~~2021