CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among other things, the operating performance of New Senior Investment Group Inc.’s (“New Senior,” the “Company,” “we,” “us” or “our”) investments, the stability of our earnings, and our financing needs. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “endeavor,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” “should,” “potential,” “intend,” “expect,” “plan,” “endeavor,” “seek,” “anticipate,” “estimate,” “believe,” “could,” “project,” “predict,” “continue”“would” or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. Our ability to predict results or the actual outcome of future plans or strategies is inherently uncertain. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the ~~forward-looking~~forward looking statements. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results in future periods to differ materially from forecasted results. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to:

•the severity, duration and scope of the novel coronavirus (“COVID-19”) global pandemic, its impact on occupancy rates and on the Company’s operations and the operations of its operators/tenant; actions that local, state and the federal government take in response to the pandemic, including the introduction of public health measures and other regulations that could affect the operations of our properties; the effects of the ~~health~~pandemic and ~~safety~~ measures ~~adopted by us~~intended to prevent its spread on our and our ~~operators/tenant related to the pandemic; increased operational costs as a result of health and safety measures related to COVID-19, and the overall impact of COVID-19 on our~~tenant’s business, results of operations, cash flows and financial condition, including declines in occupancy and ~~liquidity, as well as on~~rental revenues and increases in operating expenses; constraints in our ability to access capital and other sources of funding, including due to fluctuations in the trading price of our common stock; increased risk of claims, litigation and regulatory proceedings; and the ability of federal, state and local governments to effectively respond to and manage the pandemic on an ongoing basis to prevent its continued spread;

•our ability to comply with the terms of our financings, which depends in part on the performance of our ~~operators;~~property managers and triple net lease tenant;

•any increase in our borrowing costs as a result of rising interest rates, the expected discontinuation of the London Inter-Bank Offered Rate (LIBOR) and the transition to any other interest rate benchmark, or other factors;

•our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due or as needed to comply with the terms of our covenants or to facilitate our ability to sell assets;

•our ability to manage our liquidity and sustain distributions to our stockholders, particularly in light of the cash shortfall described in our ~~risk factors~~most recent Annual Report on Form 10-K under ~~“Part II, Item 1A”.~~the heading “Risk Factors” and in this report under ~~“Part I, Item 2. Management’s~~the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources”;

•our dependence on our property managers and tenant to operate our properties successfully and in compliance with the terms of our agreements with them, ~~applicable law and~~ the terms of our ~~financings;~~financings and applicable law;

•factors affecting the performance of our properties, such as a decline in occupancy and increases in operating costs (including, but not limited to, the costs of labor, supplies, insurance and property taxes);

•concentration risk with respect to Holiday Retirement (“Holiday”), which, for the three months ended March 31, ~~2020,~~2021, accounted for ~~94.3%~~94.2% of total net operating income (“NOI”) ~~from continuing operations;~~;

•risks associated with a change of control in the ownership or senior management of Holiday;

•our ability and the ability of our property managers and tenant to obtain and maintain adequate property, liability and other insurance from reputable, financially stable providers;

•changes of federal, state and local laws and regulations relating to employment, fraud and abuse practices, Medicaid reimbursement and licensure, etc., including those affecting the healthcare industry that affect our costs of compliance or increase the costs, or otherwise affect the operations orof our property managers or tenant;

•the ability of our property managers and tenant to maintain the financial strength and liquidity necessary to satisfy their respective obligations and liabilities to us and third parties, particularly in light of the impacts of the COVID-19 pandemic on their businesses;

•the quality and size of our investment pipeline, our ability to execute investments at attractive risk-adjusted prices, our ability to finance our investments on favorable terms, and our ability to deploy investable cash in a timely manner;

•our ability to sell properties on favorable terms and to realize the anticipated benefits from any such dispositions, including as a result of a reduction of real estate value related to the COVID-19 pandemic;

•changes in economic conditions generally and the real estate, senior housing, equity and bond markets specifically, including general economic uncertainty as a result of the COVID-19 pandemic and a worsening of global economic conditions or low levels of economic growth;

•our stock price performance and any disruption or lack of access to the capital markets or other sources of financing, including as a result of factors influenced by the COVID-19 pandemic;

•the impact of any current or future legal proceedings and regulatory investigations and inquiries on us or our ~~operators;~~property managers;

•our reliance on our ~~operators~~property managers for timely delivery of accurate property-level financial results; and

•our ability to maintain our qualification as a Real Estate Investment Trust (“REIT”) for U.S. federal income tax purposes and the potentially onerous consequences that any failure to maintain such qualification would have on our business.

Although we believe that the expectations reflected in any forward-looking statements contained herein are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The factors noted above could cause our actual results to differ significantly from those indicated by any forward-looking ~~statement~~statement.

Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our management’s views only as of the date of this Quarterly Report on Form 10-Q, and to consider carefully the factors discussed in ~~“Part II, Item 1A.~~this report under the heading “Risk Factors” ~~of this Quarterly Report on Form 10-Q~~ and ~~“Part I, Item 1A.~~under the heading “Risk Factors” ofin our ~~2019~~2020 Annual Report on Form 10-K in evaluating these forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this report to conform these statements to actual results.

SPECIAL NOTE REGARDING EXHIBITS

In reviewing the agreements and amendments included as exhibits to this Quarterly Report on Form 10-Q, please remember ~~that~~ they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

•should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

•have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

•may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and

•were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Quarterly Report on Form 10-Q and the Company’s other public filings, which are available without charge through the Securities and Exchange Commission’s (“SEC”) website at www.sec.gov.

NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES

FORM 10-Q

INDEX



		PAGE
PART I.	FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (Unaudited)	1
	Consolidated Balance Sheets as of March 31, ~~2020 (unaudited)~~2021 and December 31, ~~2019~~2020	1
	Consolidated Statements of Operations ~~(unaudited)~~ for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020	2
	Consolidated Statements of Comprehensive Income (Loss) ~~(unaudited)~~ for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020	3
	Consolidated Statements of Changes in Equity ~~(unaudited)~~ for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020	4
	Consolidated Statements of Cash Flows ~~(unaudited)~~ for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020	5
	Notes to Consolidated Financial Statements ~~(unaudited)~~	7
	Note 1. Organization	7
	Note 2. Summary of Significant Accounting Policies	78
	Note 3. Discontinued Operations	89
	Note 4. ~~Segment Reporting~~Dispositions	109
	Note 5. Segment Reporting	10
	Note 6. Real Estate Investments	1210
	Note 6.7. Receivables and Other Assets, Net	1311
	Note 7.8. Debt, Net	1412
	Note 8.9. Derivative Instruments	1513
	Note 9.10. Accrued Expenses and Other Liabilities	1513
	Note ~~10.~~11. Fair Value Measurements	1614
	Note ~~11.~~12. Income Taxes	1614
	Note ~~12.~~13. Stock-Based Compensation	15
	Note 14. Redeemable Preferred Stock, Equity and Earnings Per Common Share	1715
	Note ~~13.~~15. Commitments and Contingencies	1817
	Note ~~14.~~16. Subsequent Events	2019
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2120
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3332
Item 4.	Controls and Procedures	3534
PART II.	OTHER INFORMATION	3635
Item 1.	Legal Proceedings	3635
Item 1A.	Risk Factors	3635
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3735
Item 3.	Defaults Upon Senior Securities	3735
Item 4.	Mine Safety Disclosures	3735
Item 5.	Other Information	3735
Item 6.	Exhibits	3836
	SIGNATURES	3937

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share data)


	March 31, 2021		December 31, 2020
	(Unaudited)		(Note)
Assets
Real estate investments:
Land	$	134,643	$	134,643
Buildings, improvements and other	1,985,648		1,983,363
Accumulated depreciation	(433,249)		(417,455)
Net real estate property	1,687,042		1,700,551
Acquired lease and other intangible assets	7,642		7,642
Accumulated amortization	(2,684)		(2,595)
Net real estate intangibles	4,958		5,047
Net real estate investments	1,692,000		1,705,598

Cash and cash equivalents	24,749		33,046
Receivables and other assets, net	40,023		34,892
Total Assets	$	1,756,772	$	1,773,536

Liabilities, Redeemable Preferred Stock and Equity
Liabilities
Debt, net	$	1,484,996	$	1,486,164

Accrued expenses and other liabilities	52,896		63,886
Total Liabilities	1,537,892		1,550,050
Commitments and contingencies (Note 15)	0		0
Redeemable preferred stock, par value $0.01 per share with $100 liquidation preference, 200,000 shares authorized, issued and outstanding as of both March 31, 2021 and December 31, 2020	20,247		20,253
Equity
Preferred stock, par value $0.01 per share, 99,800,000 shares (excluding 200,000 shares of redeemable preferred stock) authorized, NaN issued or outstanding as of both March 31, 2021 and December 31, 2020	0		0
Common stock, $0.01 par value, 2,000,000,000 shares authorized, 83,819,799 and 83,023,970 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	838		830
Additional paid-in capital	908,976		907,577
Accumulated deficit	(707,371)		(694,194)
Accumulated other comprehensive loss	(3,810)		(10,980)
Total Equity	198,633		203,233
Total Liabilities, Redeemable Preferred Stock and Equity	$	1,756,772	$	1,773,536

March 31, 2020 December 31, 2019
(Unaudited)
Assets
Real estate investments:

Land $ 134,643
$ 134,643
Buildings, improvements and other 1,972,758
1,970,036
Accumulated depreciation (368,979 ) (351,555 )
Net real estate property 1,738,422
1,753,124
Acquired lease and other intangible assets 7,642
7,642
Accumulated amortization (2,327 ) (2,238 )
Net real estate intangibles 5,315
5,404
Net real estate investments 1,743,737
1,758,528

Assets from discontinued operations —
363,489
Cash and cash equivalents 135,103
39,614
Receivables and other assets, net 32,148
33,078
Total Assets $ 1,910,988
$ 2,194,709

Liabilities, Redeemable Preferred Stock and Equity

Liabilities

Debt, net $ 1,585,936
$ 1,590,632
Liabilities from discontinued operations —
267,856
Accrued expenses and other liabilities 62,313
59,320
Total Liabilities 1,648,249
1,917,808

Commitments and contingencies (Note 13)

Redeemable preferred stock, $0.01 par value with $100 liquidation preference, 400,000 shares authorized, issued and outstanding as of both March 31, 2020 and December 31, 2019 40,500
40,506

Equity

Preferred stock, $0.01 par value, 99,600,000 shares (excluding 400,000 shares of redeemable preferred stock) authorized, none issued or outstanding as of both March 31, 2020 and December 31, 2019 —
—
Common stock, $0.01 par value, 2,000,000,000 shares authorized, 82,880,222 and 82,964,438 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively 829
830
Additional paid-in capital 902,288
901,889
Accumulated deficit (666,424 ) (660,588 )
Accumulated other comprehensive loss (14,454 ) (5,736 )
Total Equity 222,239
236,395

Total Liabilities, Redeemable Preferred Stock and Equity $ 1,910,988
$ 2,194,709
Note: The consolidated balance sheet at December 31, 2020 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

See accompanying notes to consolidated financial statements (unaudited).

NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(dollars in thousands, except share data)


	Three Months Ended March 31,
	2021		2020
Revenues
Resident fees and services	$	78,113	$	85,007
Rental revenue	1,583		1,583
Total revenues	79,696		86,590
Expenses
Property operating expense	49,448		51,065
Depreciation and amortization	15,889		17,536
Interest expense	14,353		17,219
General and administrative expense	6,275		5,846
Acquisition, transaction and integration expense	393		133
Loss on extinguishment of debt	0		5,884
Other expense (income)	615		(105)
Total expenses	86,973		97,578


Loss before income taxes	(7,277)		(10,988)
Income tax expense	34		60
Loss from continuing operations	(7,311)		(11,048)
Discontinued Operations:
Gain on sale of real estate	0		19,992
Loss from discontinued operations	0		(3,107)
Discontinued operations, net	0		16,885
Net income (loss)	(7,311)		5,837
Deemed dividend on redeemable preferred stock	(296)		(598)
Net income (loss) attributable to common stockholders	$	(7,607)	$	5,239

Basic and diluted earnings per common share: (A)
Loss from continuing operations attributable to common stockholders	$	(0.09)	$	(0.14)
Discontinued operations, net	0		0.20
Net income (loss) attributable to common stockholders (B)	$	(0.09)	$	0.06




Weighted average number of shares of common stock outstanding
Basic and diluted (C)	82,815,790		82,386,622


Dividends declared and paid per share of common stock	$	0.07	$	0.13

Three Months Ended March 31,
2020 2019
Revenues

Resident fees and services $ 85,007
$ 85,749
Rental revenue 1,583
1,582
Total revenues 86,590
87,331

Expenses

Property operating expense 51,065
52,939
Interest expense 17,219
19,850
Depreciation and amortization 17,536
16,994
General and administrative expense 5,846
4,978
Acquisition, transaction and integration expense 133
492
Loss on extinguishment of debt 5,884
—
Other (income) expense (105 ) 1,315
Total expenses 97,578
96,568
Loss before income taxes (10,988 ) (9,237 )
Income tax expense 60
36
Loss from continuing operations (11,048 ) (9,273 )
Discontinued Operations:
Gain on sale of real estate 19,992
—
Loss from discontinued operations (3,107 ) (1,920 )
Discontinued operations, net 16,885
(1,920 )
Net income (loss) 5,837
(11,193 )
Deemed dividend on redeemable preferred stock (598 ) (598 )
Net income (loss) attributable to common stockholders $ 5,239
$ (11,791 )

Basic earnings per common share: ^(A)

Loss from continuing operations attributable to common stockholders $ (0.14 ) $ (0.12 )
Discontinued operations, net 0.20
(0.02 )
Net income (loss) attributable to common stockholders $ 0.06
$ (0.14 )

Diluted earnings per common share:
Loss from continuing operations attributable to common stockholders $ (0.14 ) $ (0.12 )
Discontinued operations, net 0.20
(0.02 )
Net income (loss) attributable to common stockholders $ 0.06
$ (0.14 )

Weighted average number of shares of common stock outstanding
Basic and diluted ^(B)
82,386,622
82,203,069

Dividends declared and paid per share of common stock $ 0.13
$ 0.13

(A)Basic earnings per share (“EPS”) is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding. The outstanding shares used to calculate the weighted average basic shares outstanding exclude 266,139 and 493,599 restricted stock awards, net of forfeitures, for the three months ended March 31, 2021 and 2020, respectively, as those shares were issued but were not vested and therefore, not considered outstanding for purposes of computing basic EPS. Diluted EPS is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding plus the additional dilutive effect, if any, of common stock equivalents during each period.

(B)Amounts may not sum due to rounding.

(C)Dilutive share equivalents and options were excluded for the three months ended March 31, 2021 and 2020 as their inclusion would have been anti-dilutive given our loss position.

~~(A)~~

Basic earnings per common share (“EPS”) is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding. The outstanding shares used to calculate the weighted average basic shares exclude 493,599 and 800,381 restricted stock awards, net of forfeitures, as of March 31, 2020 and 2019, respectively, as those shares were issued but were not vested and therefore, not considered outstanding for purposes of computing basic income (loss) per share. Diluted EPS is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding plus the additional dilutive effect, if any, of common stock equivalents during each period.


~~(B)~~	~~Dilutive share equivalents and options were excluded for the three months ended March 31, 2020 and 2019 as their inclusion would have been anti-dilutive given our loss position.~~

See accompanying notes to consolidated financial statements (unaudited).

NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(dollars in thousands, except share data)


	Three Months Ended March 31,
	2021		2020
Net income (loss)	$	(7,311)	$	5,837
Other comprehensive income (loss):
Unrealized gain (loss) on cash flow hedge	7,170		(8,718)
Total other comprehensive income (loss)	7,170		(8,718)
Total comprehensive income (loss)	$	(141)	$	(2,881)

Three Months Ended March 31,
2020 2019
Net loss $ (11,048 ) $ (9,273 )
Other comprehensive loss:
Unrealized loss on cash flow hedge (8,718 ) —
Total other comprehensive loss (8,718 ) —
Total comprehensive loss (19,766 ) (9,273 )

See accompanying notes to consolidated financial statements (unaudited).

NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited)

(dollars in thousands, except share data)


	Three Months Ended March 31, 2021
	Common Stock			Accumulated Deficit		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Total Equity
	Shares	Amount
Equity at December 31, 2020	83,023,970	$	830	$	(694,194)	$	907,577	$	(10,980)	$	203,233
Equity awards vested	78,776	1		—		—		—		1
Shares repurchased and retired to satisfy tax withholding upon vesting	(67,070)	(1)		—		(644)		—		(645)
Amortization of equity-based compensation	—	—		—		2,051		—		2,051
Option exercise	784,123	8		—		(8)		—		0


Dividends declared - common stock ($0.065 per share)	—	—		(5,380)		—		—		(5,380)
Dividends declared - equity awards ($0.065 per share)	—	—		(190)		—		—		(190)
Deemed dividend on redeemable preferred stock	—	—		(247)		—		—		(247)
Dividends declared on redeemable preferred stock	—	—		(49)		—		—		(49)
Other comprehensive income	—	—		—		—		7,170		7,170
Net loss	—	—		(7,311)		—		—		(7,311)
Equity at March 31, 2021	83,819,799	$	838	$	(707,371)	$	908,976	$	(3,810)	$	198,633


	Three Months Ended March 31, 2020																		Three Months Ended March 31, 2020
	Common Stock					Accumulated Deficit			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Total Equity				Common Stock			Accumulated Deficit		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Total Equity
	Shares		Amount																Shares	Amount
Equity at December 31, 2019	82,964,438		$	830		$	(660,588	)	$	901,889		$	(5,736	)	$	236,395		Equity at December 31, 2019	82,964,438	$	830	$	(660,588)	$	901,889	$	(5,736)	$	236,395
Equity awards vested	23,137		—												—			Equity awards vested	23,137	—		—		—		—		0
Shares repurchased and retired to satisfy tax withholding upon vesting	(107,353	)	(1		)	—			(998		)	—			(999		)	Shares repurchased and retired to satisfy tax withholding upon vesting	(107,353)	(1)		—		(998)		—		(999)
Amortization of equity-based compensation	—		—			—			1,397			—			1,397			Amortization of equity-based compensation	—	—		—		1,397		—		1,397

Dividends declared - common stock ($0.13 per share)	—		—			(10,708		)	—			—			(10,708		)	Dividends declared - common stock ($0.13 per share)	—	—		(10,708)		—		—		(10,708)
Dividends declared - equity awards ($0.13 per share)	—		—			(367		)	—			—			(367		)	Dividends declared - equity awards ($0.13 per share)	—	—		(367)		—		—		(367)
Deemed dividend on redeemable preferred stock	—		—			(500		)	—			—			(500		)	Deemed dividend on redeemable preferred stock	—	—		(500)		—		—		(500)
Dividends declared on redeemable preferred stock	—		—			(98		)	—			—			(98		)	Dividends declared on redeemable preferred stock	—	—		(98)		—		—		(98)
Other comprehensive loss	—		—			—			—			(8,718		)	(8,718		)	Other comprehensive loss	—	—		—		—		(8,718)		(8,718)
Net income	—		—			5,837			—			—			5,837			Net income	—	—		5,837		—		—		5,837
Equity at March 31, 2020	82,880,222		$	829		$	(666,424	)	$	902,288		$	(14,454	)	$	222,239		Equity at March 31, 2020	82,880,222	$	829	$	(666,424)	$	902,288	$	(14,454)	$	222,239

Three Months Ended March 31, 2019
Common Stock Accumulated Deficit Additional Paid-in Capital Total Equity
Shares Amount
Equity at December 31, 2018 82,148,869
$ 821
$ (616,504 ) $ 898,135
$ 282,452
Amortization of equity-based compensation —
—
—
449
449
Directors shares issued 60,975
1
—
274
275
Dividends declared - common stock ($0.13 per share) —
—
(10,687 ) —
(10,687 )
Dividends declared - equity awards ($0.13 per share) —
—
(104 ) —
(104 )
Deemed dividend on redeemable preferred stock —
—
(598 ) —
(598 )
Net loss —
—
(11,193 ) —
(11,193 )
Equity at March 31, 2019 82,209,844
$ 822

$ (639,086 ) $ 898,858
$ 260,594

See accompanying notes to consolidated financial statements (unaudited).

NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(dollars in thousands)

Three Months Ended March 31,
2020 2019
Cash Flows From Operating Activities

Net income (loss) $ 5,837
$ (11,193 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation of tangible assets and amortization of intangible assets 17,536
16,994
Amortization of deferred financing costs 742
792
Amortization of deferred revenue, net (64 ) 616
Non-cash straight-line rental revenue (134 ) (173 )
Loss on extinguishment of debt 5,884
—
Amortization of equity-based compensation 1,397
449
Gain on sale of real estate (19,992 ) —
Other non-cash expense 235
1,046
Changes in:

Receivables and other assets, net (2,505 ) (2,110 )
Accrued expenses and other liabilities (10,072 ) (20,244 )
Net cash provided by (used in) operating activities - continuing operations (1,136 ) (13,823 )
Net cash provided by (used in) operating activities - discontinued operations (3,105 ) 2,728
Net cash provided by (used in) operating activities (4,241 ) (11,095 )
Cash Flows From Investing Activities

Capital expenditures, net of insurance proceeds (2,787 ) (5,263 )
Net cash provided by (used in) investing activities - continuing operations (2,787 ) (5,263 )
Net cash provided by (used in) investing activities - discontinued operations ^(A)
373,805
(1,384 )
Net cash provided by (used in) investing activities 371,018
(6,647 )
Cash Flows From Financing Activities

Principal payments of mortgage notes payable and capital lease obligations (1,189 ) (1,844 )
Proceeds from mortgage notes payable 270,015
—
Proceeds from borrowings on revolving credit facility 100,000
—
Repayments of mortgage notes payable (368,149 ) —
Payment of exit fee on extinguishment of debt (4,504 ) —
Payment of deferred financing costs (4,767 ) (588 )
Purchase of interest rate caps (81 ) (35 )
Taxes paid related to net settlement of equity-based compensation awards (999 ) —
Payment of common stock dividend (10,708 ) (10,687 )
Payment of redeemable preferred stock dividend (604 ) —
Payment of restricted stock dividend (191 ) —
Net cash provided by (used in) financing activities - continuing operations (21,177 ) (13,154 )
Net cash provided by (used in) financing activities - discontinued operations ^(B)
(260,996 ) (1,087 )
Net cash provided by (used in) financing activities (282,173 ) (14,241 )
Net increase (decrease) in cash, cash equivalents and restricted cash 84,604
(31,983 )
Cash, cash equivalents and restricted cash, beginning of period 63,829
92,656
Cash, cash equivalents and restricted cash, end of period $ 148,433
$ 60,673


	Three Months Ended March 31,
	2021		2020
Cash Flows From Operating Activities
Net income (loss)	$	(7,311)	$	5,837
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation of tangible assets and amortization of intangible assets	15,889		17,536
Amortization of deferred financing costs	957		742
Amortization of deferred revenue, net	(450)		(64)
Non-cash straight-line rental revenue	(95)		(134)
Loss on extinguishment of debt	0		5,884
Amortization of equity-based compensation	2,051		1,397
Gain on sale of real estate	0		(19,992)
Other non-cash expense	324		235
Changes in:
Receivables and other assets, net	(4,008)		(2,505)
Accrued expenses and other liabilities	(7,789)		(10,072)
Net cash provided by (used in) operating activities - continuing operations	(432)		(1,136)
Net cash provided by (used in) operating activities - discontinued operations	0		(3,105)
Net cash provided by (used in) operating activities	(432)		(4,241)
Cash Flows From Investing Activities

Capital expenditures	(2,672)		(2,802)
Insurance proceeds, net	209		15
Net cash provided by (used in) investing activities - continuing operations	(2,463)		(2,787)
Net cash provided by (used in) investing activities - discontinued operations (A)	0		373,805
Net cash provided by (used in) investing activities	(2,463)		371,018
Cash Flows From Financing Activities
Principal payments of mortgage notes payable and capital lease obligations	(2,197)		(1,189)
Proceeds from mortgage notes payable	0		270,015
Proceeds from borrowings on the revolving credit facility	0		100,000

Repayments of mortgage notes payable and capital lease obligations	0		(368,149)
Payment of exit fee on extinguishment of debt	0		(4,504)
Payment of deferred financing costs	0		(4,767)
Purchase of interest rate caps	0		(81)
Taxes paid for net settlement of equity-based compensation awards	(645)		(999)
Payment of common stock dividend	(5,380)		(10,708)
Payment of redeemable preferred stock dividend	(302)		(604)
Payment of restricted stock dividend	(242)		(191)
Net cash provided by (used in) financing activities - continuing operations	(8,766)		(21,177)
Net cash provided by (used in) financing activities - discontinued operations (B)	0		(260,996)
Net cash provided by (used in) financing activities	(8,766)		(282,173)
Net increase (decrease) in cash, cash equivalents and restricted cash	(11,661)		84,604
Cash, cash equivalents and restricted cash, beginning of period	53,795		63,829
Cash, cash equivalents and restricted cash, end of period	$	42,134	$	148,433

(A) For the three months ended March 31, 2020, amount primarily consists ~~primarily~~ of net proceeds from the AL/MC Portfolio Disposition. Refer to “Note 34 - ~~Discontinued Operations”~~Dispositions” for details.

(B) For the three months ended March 31, 2020, amount primarily consists ~~primarily~~ of repayments of debt in conjunction with the AL/MC Portfolio Disposition. Refer to “Note 34 - ~~Discontinued Operations”~~Dispositions” for details.

NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(dollars in thousands)


	Three Months Ended March 31,
	2021		2020
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest expense	$	13,308	$	18,922


Supplemental Disclosure of Non-Cash Investing and Financing Activities

Capital lease obligations	$	258	$	278

Three Months Ended March 31,
2020 2019
Supplemental Disclosure of Cash Flow Information

Cash paid during the period for interest expense $ 18,922
$ 22,171

Supplemental Disclosure of Non-Cash Investing and Financing Activities
Issuance of common stock $ —
$ 275
Capital lease obligations 278
215

Three Months Ended March 31,
2020 2019
Reconciliation of Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents $ 39,614
$ 72,422
Restricted cash ^(A)
24,215
20,234
Total, beginning of period $ 63,829
$ 92,656

Cash and cash equivalents $ 135,103
$ 41,519
Restricted cash ^(A)
13,330
19,154
Total, end of period $ 148,433
$ 60,673


	Three Months Ended March 31,
	2021		2020
Reconciliation of Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents	$	33,046	$	39,614
Restricted cash (A)	20,749		24,215
Total, beginning of period	$	53,795	$	63,829

Cash and cash equivalents	$	24,749	$	135,103
Restricted cash (A)	17,385		13,330
Total, end of period	$	42,134	$	148,433

(A)Restricted cash consists of (i) amounts held by lender in tax, insurance, replacement reserve and other escrow accounts and (ii) security deposits; amounts relating to continuing operations are included in “Receivables and other assets, net” in our Consolidated Balance Sheets.


~~(A)~~	Restricted cash consists of (i) amounts held by lender in tax, insurance, replacement reserve and other escrow accounts and (ii) security deposits; amounts relating to continuing operations are included in “Receivables and other assets, net” in our Consolidated Balance Sheets.

See accompanying notes to consolidated financial statements (unaudited).

NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, ~~2020~~2021

(dollars in tables in thousands, except share data)

1.ORGANIZATION


1.	~~ORGANIZATION~~

New Senior Investment Group Inc. (“New Senior,” “we,” “us” or “our”) is a ~~REIT~~Real Estate Investment Trust (“REIT”) primarily focused on investing in private pay senior housing properties. As of March 31, ~~2020,~~2021, we owned a geographically diversified portfolio of 103 primarily private pay senior housing properties consisting of 102 independent living (“IL”) properties and 1 continuing care retirement community (“CCRC”), located across 36 states. We are listed on the New York Stock Exchange (“NYSE”) under the symbol “SNR” and are headquartered in New York, New York.

We operate in 21 reportable ~~segments: (1) Managed Independent Living (“IL”) Properties, and (2) Other~~segment: Senior Housing Properties.

~~Managed~~Our 102 IL ~~Properties – We own 102~~ properties are managed by Holiday ~~FHC Property Management~~Retirement (“Holiday”), a company that is majority owned by private equity funds managed by an affiliate of FIG LLC ~~(together with its~~(the “Former Manager”), a subsidiary of Fortress Investment Group LLC (“Fortress”), subsidiaries ~~“Merrill~~of Merrill Gardens LLC (“Merrill Gardens”), a former affiliate of our Former Manager, and Grace Management, Inc. (“Grace”) (collectively, the “Property Managers”), under Property Management Agreements (collectively, the “Property Management Agreements”). Under the Property Management Agreements, the Property Managers are responsible for the day-to-day operations of our senior housing properties and are entitled to a management fee in accordance with the terms of the Property Management Agreements. Our Property Management Agreements have initial five-year or ten-year terms, with successive, automatic ~~one-year~~one-year renewal periods. We ~~generally~~ pay property management fees of 4.5% to 5%5.0% of effective gross income pursuant to our Property Management Agreements and, in some cases, the Property Managers are eligible to earn an incentive fee based on operating performance.

~~Other Properties – We own 1~~Our CCRC ~~and lease this property~~is leased to Watermark Retirement Communities, Inc. (“Watermark”), a healthcare operating company, under a triple net lease agreement. In a triple net lease arrangement, the lessee agrees to operate and maintain the property at its own expense, including maintenance, utilities, taxes, insurance, repairs, capital improvements and the payroll expense of property-level employees. Our triple net lease agreement has an initial term of 15 years and includes a renewal option and annual rent increases ranging from 2.75% to 3.25%.

We were formed as a Delaware limited liability company on May 17, 2012 as a wholly owned subsidiary of Drive Shack Inc., formerly Newcastle Investment Corp. (“Drive Shack”). On November 6, 2014, we were spun-off from Drive Shack and our shares of common stock were publicly listed on the NYSE.

Coronavirus (COVID-19) global pandemic


2.	~~SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

The novel coronavirus (COVID-19) global pandemic is causing significant disruptions to the U.S. and global economies and has contributed to volatility and negative pressure in financial markets. During the three months ended March 31, 2021 and 2020, we incurred $0.3 million and $0.5 million of COVID-19 related costs, respectively, which were recorded in “Property operating expense” in our Consolidated Statements of Operations. These costs mainly consist of personal protective equipment (“PPE”) and other supplies such as packaging necessary for in-room meal deliveries to our residents and to a lesser extent testing kits for residents and staff, temperature screening machines, additional cleaning equipment, or protocols related to the properties. During the three months ended March 31, 2021, we saw these costs continue, but they have been largely offset by variable expense savings associated with lower occupancy and strong expense management from our property managers. Depending upon how the pandemic continues to evolve, there may be other future operating expenses that we may be required to bear. As of March 31, 2021, almost all of our properties had hosted clinics to administer the COVID-19 vaccine to residents and employees, however it is too early to determine whether vaccination levels or availability will influence demand and occupancy at our properties. The full extent to which the pandemic will directly or indirectly impact our business including revenues, expenses, value of our real estate, collectability of receivables and operating cash flows is highly uncertain and difficult to predict. If the economic downturn resulting from COVID-19 and measures taken to contain it persists over a long period of time, it could have a prolonged negative impact on our financial condition and results of operations. As the extent and duration of the increasingly broad effects of COVID-19 on the U.S. economy remains unclear, it is difficult for us to assess and estimate its impact on our results of operations at this time. We have evaluated the impacts of COVID-19 on our business operations to date and have incorporated information concerning the impact of COVID-19 in our assessment of the business. We will continue to monitor the COVID-19 pandemic and adjust our assessment based on the latest information available.

NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, 2021

(dollars in tables in thousands, except share data)

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP’’) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. The consolidated financial statements include the accounts of New Senior and its consolidated subsidiaries. All significant intercompany transactions and balances have been eliminated. We consolidate those entities in which we have control over significant operating, financial and investing decisions of the entity. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, as filed with the SEC.

Certain prior period amounts have been reclassified to conform to the current period’s ~~presentation, primarily related to classification of certain properties as discontinued operations.~~presentation.

~~NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~March 31, 2020~~

~~(dollars in tables in thousands, except share data)~~

Significant Accounting Policies

~~Earnings per Common Share~~

The two-class method determines EPS for each class of common stock and participating securities according to dividends declared (or accumulated) and their respective participation rights in undistributed earnings. Non-vested share-based payment awards that contain non-forfeitable rights to dividends are participating securities and, therefore are included in the computation of basic EPS pursuant to the two-class method. During the three months ended March 31, 2020, we issued 233,974 unvested restricted stock units to officers and employees with certain participating rights (“Participating RSUs”).

Diluted earnings per share of common stock is calculated by including the effect of dilutive securities. Participating RSUs are included in the computation of diluted EPS by using the more dilutive of the two-class method or treasury stock method. Any anti-dilutive securities are excluded from the calculation. During periods of loss, there is no allocation required under the two-class method since the participating securities do not have a contractual obligation to fund losses.

Refer to our significant accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 for other significant accounting policies.

Recently Adopted Accounting Pronouncements

OnIn December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes. The ASU simplifies accounting for income taxes by eliminating certain exceptions to the general approach in ASC 740, Income Taxes, and clarifies certain aspects of the guidance for more consistent application. The simplifications relate to intraperiod tax allocations when there is a loss in continuing operations and a gain outside of continuing operations, accounting for tax law or tax rate changes and year-to-date losses in interim periods, recognition of deferred tax liability for outside basis difference when investment ownership changes, and accounting for franchise taxes that are partially based on income. Transition is generally prospective, other than the provision related to outside basis difference which is on a modified retrospective basis with the cumulative effect adjusted to retained earnings at the beginning of the period adopted, and franchise tax provision which is either full or modified retrospective. We adopted ASU 2019-12 on January 1, ~~2020, we adopted ASU 2016-13,~~ ~~Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments~~ (“ASU 2016-13”). This standard requires a company to recognize an impairment allowance equal to its current estimate of all contractual cash flows that it does not expect to collect from financial assets measured at amortized cost. The2021, and the adoption of this standard did not have a material impact on our consolidated financial ~~statements as our entire balance of receivables relates to lease agreements with our residents and tenant, which are specifically excluded from this standard.~~statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). This ASU provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference London Inter-Bank Rate (“LIBOR”) or another rate that is expected to be discontinued. Companies can adopt ASU 2020-04 anytime during the effective period of March 12, 2020 through December 31, 2022. We are currently assessing the ~~impact~~provisions of ASU 2020-04 and have not made any hedge accounting elections as of March 31, 2021. If an election is made at a later date, we will apply the provisions of this ~~guidance may have on our consolidated financial statements.~~guidance.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”). The amendments in ASU 2021-01 clarify that certain optional expedients and exceptions for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of the discontinuation of the use of LIBOR as a benchmark interest rate due to reference rate reform. We are currently evaluating the impact of this guidance.

NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, 2021

(dollars in tables in thousands, except share data)

3.DISCONTINUED OPERATIONS

On ~~October 31, 2019,~~February 10, 2020, we ~~entered into a Purchase and Sale Agreement (the “Sale Agreement”) to sell~~sold a portfolio of 28 assisted living/memory care (“AL/MC”) properties for a gross sale price of $385.0 million (the “AL/MC Portfolio Disposition”). to affiliates of ReNew REIT LLC. The portfolio represented a separate reportable segment at the time and the sale represented a strategic shift that would have a major effect on our operations and financial results. As a result, we classified the assets and liabilities associated with the operations of the 28 AL/MC properties as discontinued operations in our consolidated financial ~~statements.~~statements for the three months ended March 31, 2020. Refer to “Note 4 - Dispositions” for details.

For the three months ended March 31, 2020, the results of operations associated with discontinued operations are as follows:


	Three Months Ended March 31, 2020

Revenues
Resident fees and services	$	14,024
Total revenues	14,024
Expenses
Property operating expenses	11,328
Interest expense	1,361

Acquisition, transaction, and integration expense	1,037
General and administrative expense	8
Loss on extinguishment of debt	3,602
Other income	(204)
Total expenses	17,132
Loss before income taxes	(3,108)
Income tax benefit	(1)
Loss from discontinued operations	$	(3,107)

4. DISPOSITIONS

2021 Activity

We did not have any dispositions during the three months ended March 31, 2021.

2020 Activity

On February 10, 2020, we completed the AL/MC Portfolio Disposition for a gross sale price of $385.0 million and recognized a gain on sale of $20.0 million, which is ~~included~~recorded in “Gain on sale of real estate” within “Discontinued operations, net” in our Consolidated Statements of ~~Operations.~~Operations for the three months ended March 31, 2020. In conjunction with the sale, we repaid $260.2 million of debt specifically attributable to the properties included in the ~~disposition~~AL/MC Portfolio Disposition and recognized a loss on extinguishment of debt of $3.6 million, ~~comprising~~comprised of $2.5 million in prepayment penalties and $1.1 million in the write-off of unamortized deferred financing costs, which is included in “Loss from discontinued operations” in our Consolidated Statements of ~~Operations.~~Operations for the three months ended March 31, 2020.

NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, ~~2020~~2021

(dollars in tables in thousands, except share data)

5.SEGMENT REPORTING

~~As of December 31, 2019, the assets and liabilities associated with discontinued operations were as follows:~~

December 31, 2019
Assets
Real estate investments:
Land $ 43,313
Buildings, improvements and other 397,808
Accumulated depreciation (87,719 )
Net real estate property 353,402
Acquired lease and other intangible assets 996
Accumulated amortization (996 )
Net real estate intangibles —
Net real estate investments 353,402

Receivables and other assets, net 10,087
Assets from discontinued operations $ 363,489

Liabilities
Debt, net $ 255,096
Accrued expenses and other liabilities 12,760
Liabilities from discontinued operations $ 267,856

~~For the three months ended March 31, 2020 and 2019, the results of operations associated with discontinued operations are as follows:~~

Three Months Ended March 31,
2020 2019
Revenues
Resident fees and services $ 14,024
$ 30,288
Total Revenues 14,024
30,288

Expenses
Property operating expenses 11,328
24,408
Depreciation and amortization —
3,793
Interest expense 1,361
3,869
Acquisition, transaction, and integration expense 1,037
158
General and administrative expense 8
5
Loss on extinguishment of debt 3,602
—
Other income (204 ) (69 )
Total expenses 17,132
32,164
Loss before income taxes (3,108 ) (1,876 )
Income tax (benefit) expense (1 ) 44
Loss from discontinued operations $ (3,107 ) $ (1,920 )

~~NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~March 31,~~Our primary business is investing in senior housing properties. We currently operate and report results in 1 reportable segment, Senior Housing Properties. Prior to the fourth quarter of 2020,

~~(dollars in tables in thousands, except share data)~~

~~4. SEGMENT REPORTING~~

~~We operate in~~ we had 2 reportable ~~business~~ segments ~~Managed~~(Managed IL Properties and Other ~~Properties. Our Managed IL Properties segment includes 102 IL properties throughout~~Properties). Due to the ~~United States managed by Holiday, Merrill Gardens and Grace under Property Management Agreements. Our~~AL/MC Disposition which resulted in the sale of all but one of the assets in the Other Properties segment, ~~includes one CCRC property, which is currently leased~~we changed the composition of our reportable segments to ~~a healthcare~~be in line with the financial information reviewed and used by the chief operating ~~company under a triple net lease agreement that obligates the tenant~~decision maker to ~~pay~~make operating decisions, assess performance, develop strategy and allocate capital resources. Accordingly, all property-related expenses, including maintenance, utilities, taxes, insurance, repairs, capital improvements and the payroll expense of property-level employees. It also includes the operations of 2 managed AL/MC properties we previously owned during the three months ended March 31, 2019 and sold in the second quarter of 2019.

~~We evaluate performance of the combined properties in each reportable business~~prior period segment based on segment NOI. We define NOI as total revenues less property-level operating expenses, which include property management fees and travel cost reimbursements. We believe that net income, as defined by GAAP, is the most appropriate earnings measurement. However, we believe that segment NOI serves as a useful supplementinformation has been reclassified to ~~net income because it allows investors, analysts and management to measure unlevered property-level operating results and to compare our operating results between periods and~~conform to the ~~operating results of other real estate companies on a consistent basis. Segment NOI should not be considered as an alternative to net income as determined in accordance with GAAP.~~current period presentation.

Depreciation and amortization, interest expense, acquisition, transaction and integration expense, termination fee, management fees and incentive compensation to affiliate, general and administrative expense, loss on extinguishment of debt, impairment of real estate, other expense (income), gain (loss) on sale of real estate, gain on lease termination, litigation proceeds, net, income tax expense (benefit) and discontinued operations, net are not allocated to individual segments for purposes of assessing segment performance. There are no intersegment sales.

Three Months Ended March 31, 2020
Managed IL Properties Other Properties Consolidated
Revenues

Resident fees and services $ 85,007
$ —
$ 85,007
Rental revenue —
1,583
1,583
Less: Property operating expense 51,065
—
51,065
Segment NOI $ 33,942
$ 1,583
35,525

Depreciation and amortization
17,536
Interest expense
17,219
General and administrative expense
5,846
Acquisition, transaction and integration expense
133
Loss on extinguishment of debt 5,884
Other income (105 )
Total expenses 46,513
Loss before income taxes (10,988 )
Income tax expense
60
Loss from continuing operations
(11,048 )
Discontinued operations:
Gain from sale of real estate 19,992
Loss from discontinued operations (3,107 )
Discontinued operations, net 16,885
Net income $ 5,837

~~NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~March 31, 2020~~

~~(dollars in tables in thousands, except share data)~~

Three Months Ended March 31, 2019
Managed IL Properties Other Properties Consolidated
Revenues
Resident fees and services $ 83,745
$ 2,004
$ 85,749
Rental revenue —
1,582
1,582
Less: Property operating expense 50,719
2,220
52,939
Segment NOI $ 33,026
$ 1,366
34,392

Depreciation and amortization 16,994
Interest expense 19,850
General and administrative expense 4,978
Acquisition, transaction and integration expense 492
Other expense 1,315
Total expenses 43,629
Loss before income taxes (9,237 )
Income tax expense 36
Loss from continuing operations (9,273 )
Discontinued Operations:
Loss from discontinued operations (1,920 )
Discontinued operations, net (1,920 )
Net loss $ (11,193 )

~~Assets by reportable business segment are reconciled to total assets as follows:~~

March 31, 2020 December 31, 2019

Amount Percentage Amount Percentage
Managed IL Properties $ 1,735,305
90.8 % $ 1,748,787
79.7 %
Other Properties 62,612
3.3 % 63,616
2.9 %
All other assets ^(A)
113,071
5.9 % 382,306
17.4 %
Total assets $ 1,910,988
100.0 % $ 2,194,709
100.0 %


~~(A)~~	Includes $363.5 million of assets classified as discontinued operations for the year ended December 31, 2019. The remaining balance primarily consists of corporate cash which is not directly attributable to our reportable business segments.

~~NEW SENIOR INVESTMENT GROUP INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~March 31, 2020~~

~~(dollars in tables in thousands, except share data)~~

~~The following table presents the percentage of total revenues by geographic location:~~

As of and for the three months ended
March 31, 2020

As of and for the three months ended
March 31, 2019
Number of Communities % of Total Revenue Number of Communities % of Total Revenue
Florida 9
9.0 % 9
9.1 %
California 9
10.3 % 9
10.6 %
Texas 9
8.1 % 9
7.8 %
North Carolina 8
8.5 % 8
8.3 %
Pennsylvania 5
5.7 % 6
6.7 %
Oregon 8
7.0 % 8
7.1 %
Other 55
51.4 % 56
50.4 %
Total 103
100.0 % 105
100.0 %

6.REAL ESTATE INVESTMENTS


5.	~~REAL ESTATE INVESTMENTS~~

The following table summarizes our real estate investments:

March 31, 2020 December 31, 2019
Gross Carrying Amount Accumulated Depreciation Net Carrying Value Gross Carrying Amount Accumulated Depreciation Net Carrying Value
Land $ 134,643
$ —
$ 134,643
$ 134,643
$ —
$ 134,643
Building and improvements 1,866,552
(280,022 ) 1,586,530
1,863,866
(266,420 ) 1,597,446
Furniture, fixtures and equipment 106,206
(88,957 ) 17,249
106,170
(85,135 ) 21,035
Total real estate investments $ 2,107,401
$ (368,979 ) $ 1,738,422
$ 2,104,679
$ (351,555 ) $ 1,753,124


	March 31, 2021						December 31, 2020
	Gross Carrying Amount		Accumulated Depreciation		Net Carrying Value		Gross Carrying Amount		Accumulated Depreciation		Net Carrying Value
Land	$	134,643	$	0	$	134,643	$	134,643	$	0	$	134,643
Building and improvements	1,874,723		(334,834)		1,539,889		1,873,132		(321,025)		1,552,107
Furniture, fixtures and equipment	110,925		(98,415)		12,510		110,231		(96,430)		13,801
Total real estate investments	$	2,120,291	$	(433,249)	$	1,687,042	$	2,118,006	$	(417,455)	$	1,700,551

Depreciation expense was ~~$17.4~~$15.8 million and ~~$16.9~~$17.4 million for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively.

The following table summarizes our real estate intangibles:


	March 31, 2021							December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Weighted Average Remaining Amortization Period	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Weighted Average Remaining Amortization Period
Intangible lease assets	$	7,642	$	(2,684)	$	4,958	44.5 years	$	7,642	$	(2,595)	$	5,047	44.1 years

March 31, 2020 December 31, 2019
Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted Average Remaining Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted Average Remaining Amortization Period
Intangible lease assets $ 7,642
$ (2,327 ) $ 5,315
43.2 years $ 7,642
$ (2,238 ) $ 5,404
43.0 years

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Management’s discussion and analysis of financial condition and results of operations is intended to help the reader understand the results of operations and financial condition.~~ The following should be read in conjunction with the consolidated financial statements and notes thereto included within this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that are subject to known and unknown risks and uncertainties. Actual results and the timing of events may differ significantly from those expressed or implied in such forward-looking statements due to a number of factors, including those included under the heading “Cautionary Note Regarding Forward-Looking Statements” and under the heading “Risk Factors” herein and in ~~Part II, Item 1A. “Risk Factors.”~~our Annual Report on Form 10-K for the year ended December 31, 2020.

OVERVIEW

Our Business

We are a REIT with a portfolio of 103 senior housing properties located across the United States. We believe that we are the only ~~pure play~~REIT focused solely on senior housing ~~REIT~~ and we are one of the largest owners of senior housing ~~properties.~~properties in the United States. We are listed on the NYSE under the symbol “SNR” and are headquartered in New York, New York.

We ~~conduct~~are organized and operate as a single reportable segment, Senior Housing Properties. We changed our ~~business through~~structure in the fourth quarter of 2020 and no longer operate in two reportable segments: Managed ILIndependent Living (“IL”) Properties, and Other Properties. See our consolidated financial statements and the related notes included in ~~Part I,~~ Item 1 “Financial Statements” for additional information regarding our segments.

COVID-19 & Considerations Related to Our Business

The novel coronavirus (COVID-19) global pandemic is causing significant disruptions to the U.S. and global economies and has contributed to volatility and negative pressure in financial markets. The outbreak has led federal, state and local governments and public health authorities to impose measures intended to control its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, quarantines and shelter-in-place orders. Although some of these restrictions have been lifted or scaled back at this time, ongoing resurgences of COVID-19 infections may result in the re-imposition of certain restrictions and may lead to other restrictions being re-implemented to reduce the spread of COVID-19.

As an owner of senior living properties, with a portfolio of 102 ~~independent living (“IL”)~~IL properties and one continuing care retirement ~~center~~community (“CCRC”), COVID-19 ~~impacts~~has impacted our business in ~~a number of~~various ways. Our three ~~operators~~property managers and one tenant have all put into place various protocols to address the COVID-19 pandemic at our communities ~~around~~across the ~~country.~~U.S. Some of the measures taken at the onset of the pandemic included restrictions on all non-essential visitors (including family), closure of group dining facilities and other common areas, restrictions on resident movements and group activities, as well as enhanced protocols which have required increased labor, property cleaning expenses and costs related to procuring necessary supplies such as meal containers and personal protective equipment (“PPE”). Since mid-2020, our properties have started lifting certain restrictions in a phased approach, based on both the status of state and local regulations that affect the property as well as the status of any COVID-19 cases at the property. Lifting restrictions at our properties, particularly restrictions related to onsite visitors, while being done in a measured approach in compliance with all state and local regulations, may contribute to an increase in COVID-19 cases.

~~The overall effects of~~

COVID-19 is having and will likely continue to have an impact on ~~two~~three metrics that are fundamental to our business: occupancy, rental rates and operating expenses. ~~We believe that~~

Occupancy:

Following the ~~adverse impact that~~ COVID-19 ~~will have on the future operations and financial results~~outbreak, occupancy at our ~~communities will depend upon many factors, most of which are beyond~~properties began to decrease materially as move-ins at those properties slowed due to the voluntary restrictions our ~~ability to control or predict.~~

~~Occupancy:~~

Asproperty managers imposed on move-ins at our properties as discussed in more detail in our Annual Report on Form 10-K under heading “Market Opportunity,” we believe that the rapidly growing senior citizen population in the U.S., in conjunction with longer life expectancies and other favorable demographic trends, will result in substantially stronger demand for senior housing properties.above. We do not know the extent of the ultimate impacts that COVID-19 will have on our business, ~~in the medium to longer term,~~ and whether it will fundamentally alter the demand for senior housing in general or in our properties in particular. ~~We do expect~~Ending occupancy ~~to significantly decline~~ in the second quarter of 2020, significantly driven by the voluntary restrictions our operators have imposed on move-ins at all of our properties. It is unclear when occupancy will recover, which will depend substantially on when move-in restrictions are lifted and on near-term demand trends, which are not possible to predict at this time.

~~Expenses:~~

~~During~~ the first quarter of ~~2020, operating expenses were~~2021 decreased 160 basis points compared to the fourth quarter of 2020. Occupancy may continue to decline as a result of the pandemic. The timing of a recovery in ~~line with expectations through~~occupancy is difficult to predict and could be harmed by the ~~middle~~incidence of ~~March. We saw a slight increase in property level expenses associated with~~COVID-19 at our properties or the perception that outbreaks could occur. The impact of COVID-19 may be mitigated by the distribution of the COVID-19 ~~pandemic towards~~vaccines, but it remains unclear how the ~~end~~vaccine will ultimately impact demand and occupancy. As of ~~March, driven by expenditures related~~the date of this filing, all of our properties have now hosted clinics to the procurement of personal protective equipment (PPE) and increased costs associated with the procurement of other supplies such as packaging necessary for in-room meal deliveries to residents. Our expectations in the second quarter of 2020 and for the near term are that while there may be some variable cost savings associated with lower occupancy, we expect increased operating expenses related to responding toadminister the COVID-19 ~~pandemic. These expenses are principally expected~~vaccine to ~~be higher labor costs~~residents and ~~the continued cost of PPE~~employees; however, it is too early to determine whether vaccination levels or availability will influence demand and ~~other supplies. Depending upon how the pandemic continues to evolve, there may be other future operating expenses that we may be required to bear.~~occupancy at our properties.

~~Senior Housing Industry~~

The senior housing industry offers a full continuum of care to seniors with product types that range from “mostly housing” (i.e., senior apartments) to “mostly healthcare” (i.e., skilled nursing, hospitals, etc.). We primarily focus on product types at the center of this continuum, namely IL properties. We believe that our focused portfolio of primarily IL properties will allow investors to participate in the positive fundamentals of the senior housing sector. However, according to the U.S. Centers for Disease Control and Prevention (the “CDC”), older adults and people of any age who have serious underlying medical conditions might be at higher risk for severe illness from COVID-19. The CDC guidance also states that people age 65 and older and those living in nursing homes or long-term care facilities are at high-risk for severe illness from COVID-19. While we do not own nursing facilities, the age and other demographics of our residents fall within the CDC guidance. We do not know if or how this will affect seniors’ views on different types of senior ~~living.~~living and whether it will alter demand for our types of senior living properties in the future.

Rental Rates:

Our cash flows from operating activities are primarily driven by rental revenues and fees received from residents of our managed properties, and we typically increase rental fees annually. Seniors, like much of the U.S. population, may be experiencing deteriorating financial conditions as a result of the COVID-19 pandemic, which may make it difficult for them to pay rent. In addition, there may be pressure for us to reduce rental rates or offer other concessions in light of the pandemic and its effects on our residents and our business.

Operating Expenses:

During the first quarter of 2020, operating expenses were in line with expectations through the middle of March. We saw a slight increase in property level expenses associated with the COVID-19 pandemic towards the end of March, driven by expenditures related to the procurement of PPE and other supplies such as packaging necessary for in-room meal deliveries to residents. Since the second quarter of 2020, these costs have continued, but they have been largely offset by variable expense savings associated with lower occupancy and strong expense management from our property managers. Depending on how the pandemic continues to evolve, there may be other future operating expenses that we may be required to bear or need to continue to bear, such as costs for testing kits for residents and staff, additional cleaning equipment, or new protocols related to the properties.

Given the ~~rapidly~~ evolving nature of the COVID-19 pandemic, all of the observations and forward-looking statements above represent our current good faith views based upon the information that we have available to us at this time. We believe that the extent of the pandemic’s effect on our business, operational and financial performance and liquidity will depend upon many factors and future developments, including the duration, spread, intensity and recurrence of the pandemic, health and safety actions taken to contain its spread, the availability, continuing efficacy and public usage and acceptance of vaccines, and how quickly and to what extent normal economic and operating conditions can resume within the markets in which we operate, each of which is highly uncertain and difficult to predict at this time. Even after the COVID-19 pandemic subsides, we may continue to experience adverse impacts to our business and financial results as a result of its global economic impact, including any economic downturn or recession that may occur in the future. See also ~~“Part II,~~ Item 1A. ~~Risk~~“Risk Factors” and below “Liquidity and Capital Resources,” for additional discussions regarding COVID-19 and its impact on our business.

Other Recent Developments

~~Completion~~Property Transition to Atria Senior Living

In April 2021, we transitioned the management of ~~AL/MC Portfolio Disposition & Related Refinancing Activity~~21 properties from Holiday to Atria Senior Living (“Atria”). Post-transition, Atria will manage 20% of the properties in the Company’s senior housing properties and Holiday will continue to be our largest property manager, managing 75% of our senior housing properties. During transition periods, we expect to incur integration costs and may experience a temporary disruption in operations which can adversely impact our results of operation.

At-The-Market Common Stock Offering Program

On February ~~10, 2020,~~26, 2021, we ~~completed the sale~~established an at-the-market equity offering program (the “ATM Program”) through which we may issue and sell, from time to time, up to an aggregate of ~~all 28~~$100 million of our ~~managed assisted living/memory care (“AL/MC”) properties~~common stock. Sales of common stock, if any, may be offered and sold in accordance with the Company’s instructions pursuant to a ~~Purchase and Sale~~Distribution Agreement, dated February 26, 2021, between New Senior and a consortium of banks acting as of October 31, 2019 (the “Sale Agreement”), with affiliates of ReNew REIT for a gross sale price of $385.0 million (“AL/MC Portfolio Disposition”). We recognized a gain on sale of $20.0 million fromsales agents.

During the AL/MC Portfolio Disposition, which is included in “Discontinued operations, net” in our Consolidated Statements of Operations. The sale of these properties represents a strategic shift that had a major effect on our operations and financial results. Accordingly, the operations of these properties were classified as discontinued operations in our consolidated financial statements included in this Form 10-Q. All prior period information has been reclassified to conform to current period presentation. Refer to “Part I, Item 1. Note 3 – Discontinued Operations” for additional details.

In February 2020, in conjunction with the AL/MC Portfolio Disposition, we repaid $368.1 million of debt and recognized a loss of extinguishment of debt of $5.9 million, comprising of $4.5 million in prepayment penalties and $1.4 million in the write-off of unamortized deferred financing costs on the loans, which is included in “Loss on extinguishment of debt” in our Consolidated Statements of Operations. We also entered into a new financing for $270.0 million, which is secured by 14 managed IL properties. In addition, we amended and restated our secured revolving credit facility in the amount of $125.0 million (the “Revolver”), which is currently secured by nine managed IL properties and the pledge of the equity interests of certain of our wholly owned subsidiaries. The amendment extended the maturity of the Revolver from December 2021 to February 2024. The amendment allows the Revolver to be increased with lender consent to a maximum aggregate amount of borrowing capacity of $500.0 million. Refer to “Part I, Item 1. Note 7 – Debt, Net” for additional details.

~~As a result of these refinancing initiatives, the Company’s weighted average debt maturity increased from 4.8 years as of December 31, 2019 to 6.0 years as of~~three months ended March 31, ~~2020. We have no significant debt maturities until 2024.~~2021, we did not issue any shares under the Distribution Agreement.

MARKET CONSIDERATIONS

Senior housing is a $300 billion market, and ownership of senior housing assets is highly fragmented. Given these industry fundamentals and compelling demographics that are expected to drive increased demand for senior housing, we believe the senior housing industry ~~could present~~presents an attractive investment opportunity. However, increased competition from other buyers of senior housing assets, the impact of COVID-19 on the senior housing industry, as well as liquidity constraints and other factors, could impair our ability to source attractive investment opportunities within the senior housing industry and thus to seek investments in the broader healthcare industry.

According to data from the National Investment Center for Seniors Housing and Care (“NIC”), on the 99 Primary and Secondary Markets, occupancy was down 850 basis points year-over-year in the first quarter of ~~2020 was down 10 basis points year-over-year.~~2021, the fourth full quarter impacted by the COVID-19 pandemic. New Senior’s occupancy results outperformed the industry in the first quarter, with same store managed occupancy ~~up 10~~down 770 basis points ~~year over year.~~year-over-year. Industry occupancy for ~~independent living (“IL”)~~majority IL facilities was down 30750 basis points year-over-year, while industry occupancy for ~~assisted living (“AL”)~~majority AL facilities was ~~up 10~~down 940 basis points year-over-year.

Industry-wide, new supply ~~remains elevated compared~~levels have continued to ~~pre-2015 levels, but continues to decrease.~~trend lower for the past several years. Units under construction represent ~~5.8%~~4.6% of inventory, ~~but the~~and that ratio has decreased ~~150~~280 basis points from the recent ~~peak~~high in the third quarter of 2018. The ratio of ALIL construction to inventory ~~(5.9%~~(4.6%) ~~remains~~is slightly ~~higher~~lower than ~~that~~the ratio for ~~IL (5.8%~~AL (4.7%).

While supply trends have improved recently, rate growth has ~~decelerated~~continued to decelerate over the past several quarters. Industry rate growth was ~~2.4%~~1.2% in the first quarter of ~~2020,~~2021, down 220 bps from the recent ~~peak~~high of ~~3.3%~~3.4% in the first quarter of 2019. Rate growth for IL facilities (1.4%) was ~~in line with that~~slightly higher than rate growth for AL ~~with both metrics increasing 2.4% year-over-year.~~facilities (0.9%).

The value of our existing portfolio could be impacted by new construction, as well as increased availability and popularity of home health care or other alternatives to senior housing, by hampering occupancy and rate growth, along with increasing operating expenses.

Additionally, as discussed in more detail above, the COVID-19 pandemic ~~will have an~~has continued to impact on our business in ~~2020~~2021. The timing of a recovery is difficult to predict, and ~~beyond. Our occupancy will continue~~could be harmed by the incidence of COVID-19 at our properties or the perception that outbreaks could occur. In recent months we have seen fewer active cases, and increased inquiry and tour volume across our communities, which may be due to the prevalence of vaccination clinics at our communities and high levels of uptake by residents and associates, or may be ~~impacted~~the result of declining positivity rates in the ~~near-term and potentially beyond, as federal, state, and local authorities continue~~particular communities in which we operate, or may be due to ~~enforce stay-at-home orders and mandate social distancing practices, and it is unclear whether demand for our properties will be impacted by fears related to the COVID-19 pandemic.~~other factors.

RESULTS OF OPERATIONS

Segment Overview

Our primary business is investing in senior housing properties. We currently operate and report results in one reportable segment, Senior Housing Properties. Prior to the fourth quarter of 2020, we had two reportable ~~business~~ segments ~~Managed~~(Managed IL Properties and Other ~~Properties. Our Managed IL Properties segment includes 102 IL properties throughout~~Properties). Due to the ~~United States managed by Holiday, Merrill Gardens and Grace under Property Management Agreements. Our~~AL/MC Disposition which resulted in the sale of all but one of the assets in the Other Properties segment, ~~includes one CCRC property, which is currently leased~~we changed the composition of our reportable segments to ~~Watermark under a triple net lease agreement that obligates~~be in line with the ~~tenant~~financial information reviewed and used by the chief operating decision maker to ~~pay~~make operating decisions, assess performance, develop strategy and allocate capital resources. Accordingly, all ~~property-related expenses, including maintenance, utilities, taxes, insurance, repairs, capital improvements and~~prior period segment information has been reclassified to conform to the payroll expense of property-level employees. It also includes the operations of two managed AL/MC properties we previously owned during the three months ended March 31, 2019 and sold in the second quarter of 2019.current period presentation.

Net Operating Income

WeNet operating income (“NOI”) and Cash NOI are non-U.S. generally accepted accounting principles (“GAAP”) financial measures used to evaluate the performance of ~~these reportable business segments based on segment NOI.~~our properties. We consider NOI anand Cash NOI important supplemental ~~measure~~measures used to evaluate the operating performance of our ~~segments~~properties because ~~it allows~~they allow investors, analysts and our management to assess our unleveraged property-level operating results and to compare our operating results between periods and to the operating results of other real estate companies on a consistent basis. We define NOI as total revenues less property level operating expenses, which include property management fees and travel cost reimbursements. We define Cash NOI as NOI excluding the effects of straight-line rental revenue, amortization of above/ below market lease intangibles and the amortization of deferred community fees and other, which includes the net change in deferred community fees and other rent discounts or incentives.

Our ~~Managed IL~~Senior Housing Properties segment is primarily comprised of independent living senior housing properties that are operated by property managers to which we pay a management fee. ~~Our Other Properties segment is comprised of a senior housing property~~We also own one CCRC leased on a long-term basis, and our tenant is typically responsible for bearing property-related expenses including maintenance, utilities, taxes, insurance, repairs, capital improvements and the payroll expense of property-level employees. Depreciation and amortization, interest expense, acquisition, transaction and integration expense, termination fee, management fees and incentive compensation to affiliate, general and administrative expense, loss on extinguishment of debt, impairment of real estate, other expense (income), gain (loss) on sale of real estate, gain on lease termination, litigation proceeds, net, income tax expense (benefit) and discontinued operations, net are not allocated to individual segments for purposes of assessing ~~segment~~property performance. ~~Because of such differences in our exposure to property operating results, each segment requires a different type of management focus. As such, these segments are managed separately.~~ In deciding how to allocate resources and assess performance, our chief operating decision maker regularly evaluates the performance of our reportable ~~segments~~segment on the basis of NOI and Cash NOI.

Same Store

Same store information is intended to enable management to evaluate the performance of a consistent portfolio of real estate in a manner that eliminates variances attributable to changes in the composition of our portfolio over time, due to sales and various other factors. Properties acquired, sold, transitioned to other ~~operators~~property managers or between segments, or classified as held for sale or discontinued operations during the comparable periods are excluded from the same store amounts.

Three months ended March 31, ~~2020~~2021 compared to three months ended March 31, ~~2019~~2020

~~The following table provides a reconciliation of our segment NOI to net loss, and compares the results of operations for the respective periods:~~

Three Months Ended March 31, Increase (Decrease)
(dollars in thousands) 2020 2019 Amount Percentage
Segment NOI for Managed IL Properties $ 33,942
$ 33,026
$ 916
2.8 %
Segment NOI for Other Properties 1,583
1,366
217
15.9 %
Total segment NOI 35,525
34,392
1,133
3.3 %
Expenses
Depreciation and amortization 17,536
16,994
542
3.2 %
Interest expense 17,219
19,850
(2,631 ) (13.3 )%
General and administrative expense 5,846
4,978
868
17.4 %
Acquisition, transaction and integration expense 133
492
(359 ) (73.0 )%
Loss on extinguishment of debt 5,884
—
5,884
NM
Other (income) expense (105 ) 1,315
(1,420 ) (108.0 )%
Total expenses 46,513
43,629
2,884
6.6 %
Income (Loss) before income taxes (10,988 ) (9,237 ) (1,751 ) (19.0 )%
Income tax expense 60
36
24
66.7 %
Income (Loss) from continuing operations (11,048 ) (9,273 ) (1,775 ) (19.1 )%
Gain on sale of real estate 19,992
—
19,992
NM
Loss from discontinued operations (3,107 ) (1,920 ) (1,187 ) (61.8 )%
Discontinued operations, net 16,885
(1,920 ) 18,805
NM
Net income (loss) 5,837
(11,193 ) 17,030
152.1 %
Deemed dividend on redeemable preferred stock (598 ) (598 ) —
— %
Net income (loss) attributable to common stockholders $ 5,239
$ (11,791 ) $ 17,030
144.4 %

~~_______________~~

~~NM – Not meaningful~~

~~Managed IL Properties~~

The following table presents same store and total portfolio results as of and for the three months ended March 31, 2021 and 2020, and ~~2019:~~a reconciliation of our NOI to net income (loss):


	Three Months Ended March 31,				Increase (Decrease)
(dollars in thousands)	2021		2020		Amount		Percentage
Resident fees and services	$	78,113	$	85,007	$	(6,894)	(8.1)	%
Rental revenue	1,583		1,583		—		—	%
Less: Property operating expense	49,448		51,065		(1,617)		(3.2)	%
Total NOI	30,248		35,525		(5,277)		(14.9)	%
Straight-line rental revenue	(95)		(134)		39		(29.1)	%
Amortization of deferred community fees and other	(696)		(304)		(392)		128.9	%
Cash NOI	29,457		35,087		(5,630)		(16.0)	%
Addback adjustments (A)	791		438		353		80.6	%
Expenses
Depreciation and amortization	15,889		17,536		(1,647)		(9.4)	%
Interest expense	14,353		17,219		(2,866)		(16.6)	%
General and administrative expense	6,275		5,846		429		7.3	%
Acquisition, transaction and integration expense	393		133		260		195.5	%
Loss on extinguishment of debt	—		5,884		(5,884)		NM
Other expense (income)	615		(105)		720		NM
Total expenses	37,525		46,513		(8,988)		(19.3)	%


Loss before income taxes	(7,277)		(10,988)		3,711		33.8	%
Income tax expense	34		60		(26)		(43.3)	%
Loss from continuing operations	(7,311)		(11,048)		3,737		33.8	%
Discontinued Operations:
Gain on sale of real estate	—		19,992		(19,992)		NM
Loss from discontinued operations	—		(3,107)		3,107		NM
Discontinued operations, net	—		16,885		(16,885)		NM
Net income (loss)	(7,311)		5,837		(13,148)		NM
Deemed dividend on redeemable preferred stock	(296)		(598)		302		(50.5)	%
Net income (loss) attributable to common stockholders	$	(7,607)	$	5,239	$	(12,846)	NM

Total properties as of the period ended	103		103
Average available beds	12,438		12,439

Same Store & Total Portfolio
(dollars in thousands, except per bed data) 2020 2019 Change %
Resident fees and services $ 85,007
$ 83,745
$ 1,262
1.5 %
Less: Property operating expense 51,065
50,719
346
0.7 %
NOI $ 33,942
$ 33,026
$ 916
2.8 %

Total properties as of the period ended 102
102

Average available beds 11,976
11,974

Average occupancy (%) 87.1
87.0

Average monthly revenue per occupied bed $ 2,716
$ 2,680

__________

NM – Not meaningful

(A) Represents straight-line rental revenue and amortization of deferred community fees and other adjustments to Cash NOI.

Resident fees and services

Same store and total resident fees and services ~~increased $1.3~~decreased $6.9 million. This ~~increase~~decrease is primarily attributable to a decrease in occupancy, partially offset by an increase in average rental rates.

~~Property operating expense~~

~~Same store and total property operating expense increased $0.3 million. This increase is primarily due to additional labor and supplies costs incurred in response to the COVID-19 pandemic.~~

~~Segment NOI~~

~~Same store NOI and total segment NOI increased $0.9 million. See above for the variance explanations.~~

~~Other Properties~~

The following table presents same store and total portfolio results as of and for the three months ended March 31, 2020 and 2019 but excluding properties whose operations were classified as discontinued operations:

Same Store Portfolio Total Portfolio
(dollars in thousands, except per bed data) 2020 2019 Change % 2020 2019 Change %
Resident fees and services $ —
$ —
$ —
NM
$ —
$ 2,004
$ (2,004 ) NM
Rental Revenue 1,583
1,582
1
0.1 % 1,583
1,582
1
0.1 %
Less: Property operating expense —
—
—
NM
—
2,220
(2,220 ) NM
NOI $ 1,583
$ 1,582
$ 1
0.1 % $ 1,583
$ 1,366
$ 217
15.9 %

Total properties as of the period ended 1
1
1
3

Average available beds 463
463
463
742

~~_______________~~

~~NM – Not meaningful~~

~~Resident fees and services~~

Resident fees and services represent residents’ monthly rental and care fees from two managed AL/MC properties. Total resident fees and services decreased $2.0 million due to the sale of these AL/MC assets in the second quarter of 2019.

Rental ~~Revenue~~revenue

Rental revenue relates to rents from our triple net lease property. Same store and total ~~portfolio~~ rental revenue remained ~~relatively~~ unchanged for the comparative periods. As a percentage of rental revenue, ~~same store segment~~ NOI was 100% of revenue for each fiscal year as the lessee operates the property and bears the related costs, including maintenance, utilities, taxes, insurance, repairs, capital improvements and the payroll expense of property-level employees.

Property operating expense

~~Property operating expense relates to costs incurred at two managed AL/MC properties. Total~~Same store and total property operating expense decreased ~~$2.2 million~~$1.6 million. This decrease is primarily due to ~~the sale of these AL/MC assets in the second quarter of 2019.~~lower labor-related costs and supply costs.

~~Segment~~ NOI

~~Total segment~~Same store NOI ~~increased $0.2~~and total portfolio NOI decreased $5.3 million. See above for the variance explanations.

Cash NOI

Same store ~~segment~~and total Cash NOI ~~remained relatively unchanged~~decreased $5.6 million. This is primarily due to less community fees collected from residents and lower NOI. See above for ~~the comparative periods.~~variance explanations.

Expenses

Depreciation and amortization

Depreciation and amortization ~~increased $0.5~~decreased $1.6 million primarily due to ~~additional depreciation on capital expenditure additions put into service subsequent to the first quarter~~certain furniture, fixtures, and equipment becoming fully depreciated as of ~~2019.~~March 31, 2020.

Interest expense

Interest expense decreased ~~$2.6~~$2.9 million primarily due to a lower average debt balance in conjunction with lower effective interest rates as a result of debt repayments in conjunction with the AL/MC Portfolio Disposition, lower interest rate on the newly refinanced debt and a decrease in LIBOR for the comparative periods. The weighted average effective interest rates for the three months ended March 31, 2021 and 2020 were 3.82% and ~~2019 were~~ 4.36% ~~and 4.89%~~, respectively.

General and administrative expense

General and administrative expense increased ~~$0.9~~$0.4 million primarily due to additional compensation expense, including the amortization of equity-based compensation granted to officers and employees ~~during~~after the three months ended March 31, 2020.

Acquisition, transaction and integration expense

Acquisition, transaction and integration expense ~~decreased $0.4~~increased $0.3 million primarily due to integration costs associated with the ~~strategic review during the three months ended March 31, 2019.~~transition of 21 assets to Atria Senior Living which closed in April 2021.

Loss on extinguishment of debt

Loss on extinguishment of debt ~~increased~~decreased $5.9 million primarily due to $4.5 million of prepayment penalties and a $1.4 million write-off of unamortized deferred financing fees related to debt paid off in conjunction with the AL/MC Portfolio ~~Disposition.~~Disposition in February 2020.

Other expense

Other expense ~~decreased~~increased by ~~$1.4~~$0.7 million. This is primarily due to damage remediation costs relating to a ~~lower fair value loss on our interest rate caps~~significant winter storm in Texas in February 2021 and ~~insurance recoveries for property damage.~~higher casualty related charges in the first quarter of 2021.

Income tax expense

We are organized and conduct our operations to qualify as a REIT under the requirements of the Code. However, certain of our activities are conducted through our TRS and therefore are subject to federal and state income taxes. Income tax expense was relatively flat during the comparative periods.

Discontinued operations, net

~~Discontinued operations, net increased $18.8 millionprimarily due to~~In February 2020, we completed the sale of 28the AL/MC ~~properties in February 2020~~Portfolio Disposition which resulted in a gain on sale of real estate of $20.0 million. This gain was partially offset by a loss from discontinued operation of $3.1 million which reflects the operations of the properties sold.

LIQUIDITY AND CAPITAL RESOURCES

Our principal liquidity needs are to (i) fund operating expenses, (ii) meet debt service requirements, (iii) fund recurring capital expenditures and investment activities, if applicable, and (iv) make distributions to stockholders. As of March 31, ~~2020,~~2021, we had approximately ~~$135.1~~$24.7 million in liquidity, consisting of unrestricted cash and cash equivalents. A portion of this amount is held in operating accounts used to fund expenses at our managed properties and, therefore, may not be available for distribution to stockholders.

On February 26, 2021, we established an at-the-market equity offering program (the “ATM Program”) through which we may issue and sell, from time to time, up to an aggregate of $100 million of our common stock. Sales of the common stock, if any, may be offered and sold in accordance with the Company’s instructions pursuant to a Distribution Agreement, dated February 26, 2021, between New Senior and a consortium of banks acting as sales agents.

During the three months ended March 31, 2021, we did not issue any shares under the Distribution Agreement.

Our principal sources of liquidity are (i) cash flows from operating activities, (ii) proceeds from financing in the form of debt, and, from time to time, (iii) proceeds from dispositions of assets and (iv) proceeds from the issuance of equity ~~securities.~~securities, including the availability under the ATM Program. Our cash flows from operating activities are primarily driven by (i) ~~rental revenues~~resident fees and ~~fees~~services received from residents of our managed properties

and (ii) rental revenues from the tenant of our triple net lease property, less (iii) operating expenses (primarily property operating expense of our managed properties, general and administrative expenses, professional fees, insurance and taxes) and (iv) interest payments on our debt. Our principal uses of liquidity are the expenses included in cash flows from operating activities, plus capital expenditures, principal payments on debt, and distributions to our stockholders.

We anticipate that our cash on hand, our cash flows provided by operating activities, and cash available to be drawn down from the Revolver, and proceeds from any future sales of our ~~Revolver~~shares of common stock pursuant to the ATM Program will be sufficient to fund our business operations, recurring capital expenditures, principal payments, and the distributions we are required to make to comply with REIT requirements over the next 12 months. Our actual distributions to stockholders have historically been higher than the REIT distribution requirement. The Revolver is an important source of liquidity for us. WeOur balance drawn under the Revolver fluctuates over time. Shortly after the onset of the pandemic in March 2020 and as a precaution, we borrowed $100.0 million under the Revolver. We paid down $40.0 million of the outstanding balance in May 2020 and the remainder in August 2020 due to the lack of a present need for funds, however, we continue to have access to the Revolver if our needs change in ~~March 2020.~~the future. The material terms of the Revolver are discussed in more detail in ~~“Part I, Item 1. Note 7~~“Note 8 - Debt, ~~Net.”~~Net” to our consolidated financial statements.

Our cash flows from operating activities, less capital expenditures and principal payments, have historically been ~~and continue to be,~~ less than the amount of distributions to our stockholders. We have in the past funded the shortfall using cash on hand. In light of the impacts of COVID-19, the board of directors reduced our quarterly cash dividend on shares of our common stock for the first quarter of 2020 by 50% to $0.065 per share. The board of directors maintained the same dividend level for the remainder of 2020 and effective May 3, 2021 the board declared a cash dividend on shares of the Company’s common stock for the first quarter of 2021 of $0.065 per share. The board of directors believes the dividend reduction in 2020 is the most prudent course of action and it continues to monitor our financial performance and liquidity. The board of directors will continue to re-evaluate the level of future dividends. There can be no assurance that we will pay cash dividends in an amount consistent with prior quarters. Any difference between the amount of any future dividend and the amount of dividends in prior quarters could be material, and there can be no assurance that our board of directors will declare any dividend at all. In light of the ongoing impacts of COVID-19, the board of directors reduced the Company’s regular quarterly cash dividend on its common shares for the first quarter of 2020 by 50% to $0.065 per share. The board of directors believes the dividend reduction is the most prudent course of action as it continues to monitor the Company’s financial performance and liquidity. The board of directors will continue to re-evaluate the level of future dividends.

The impacts of the COVID-19 pandemic ~~will~~has also ~~affect the Company’s~~affected our liquidity in other ways. As discussed above in “Overview - COVID-19 & Considerations Related to Our Business,” ~~we expect decreased~~if further decreases in occupancy in our properties ~~which~~occur, it will result in a reduction in our revenues and our cash flows. Over time, if financial results at the properties which secure the Revolver underperform, our availability to borrow funds under the Revolver ~~will~~could be limited. In addition, if rental revenues and fees received from residents of our managed properties decline as a result of financial or other difficulties in residents making rent payments to us, it would have a significant effect on our cash flows from operating activities. ~~Lastly, we have also temporarily halted all elective capital expenditure projects and are limiting projects to those deemed necessary.~~

The expectations set forth above are forward-looking and subject to a number of uncertainties and assumptions, which are described in more detail in our Annual Report on Form 10-K filed with the SEC under “Factors That Could Impact Our Liquidity, Capital Resources and Capital Obligations” and “Risk Factors,” as well as below in ~~“Part II, Item 1A. Risk~~“Risk Factors.” If our expectations about our liquidity prove to be incorrect, we could be subject to a shortfall in liquidity in the future, and this shortfall may occur rapidly and with little or no notice, which would limit our ability to address the shortfall on a timely basis.

Other Factors That Could Impact Our Liquidity, Capital Resources and Capital Obligations

The following factors could ~~also~~ impact our liquidity, capital resources and capital obligations:

•Access to Financing: Decisions by investors, counterparties and lenders to enter into transactions with us will depend upon a number of factors, such as our historical and projected financial performance, compliance with covenant terms, industry and market trends, the availability of capital and our investors’, counterparties’ and lenders’ policies and rates applicable thereto and the relative attractiveness of alternative investment or lending opportunities.

•Impact of Expected Additional Borrowings or Sales of Assets on Cash Flows: The availability and timing of and proceeds from additional borrowings or refinancing of existing debt may be different than expected or may not occur as expected. The timing of any sale of assets, and the proceeds from any such sales, are unpredictable and may vary materially from an asset’s estimated fair value and carrying value.

•Compliance with Debt Obligations: Our financings subject us and our ~~operators~~property managers to a number of obligations, and a failure to satisfy certain obligations, including (without limitation) a failure by the guarantors of our leases to satisfy certain financial covenants that depend in part on the performance of our leased assets, which is outside of our control, could give rise to a requirement to prepay outstanding debt or result in an event of default and the acceleration of the maturity date for repayment. We may also seek amendments to these debt covenants, and there can be no assurance that we will be able to obtain any such amendment on commercially reasonable terms, if at all.

As noted elsewhere in this Quarterly Report on Form 10-Q, the impacts of the COVID-19 pandemic will affect the Company’s liquidity in various ways, including among other things by further impairing our ability to access the capital markets, by reducing our revenues due to decreased occupancy at our properties and reduced asset values, which over time may limit the borrowing availability under the Revolver.

Debt Obligations

Our debt contains various customary financial and other covenants, and in certain cases include a Debt Service Coverage Ratio, Project Yield or Minimum Net Worth, Minimum Consolidated Tangible Net Worth, Adjusted Consolidated EBITDA to Fixed Charges and Liquid Assets provision, as defined in the agreements. As of March 31, ~~2020,~~2021, we were in compliance with all of such covenants.

Capital Expenditures

~~For our Managed IL Properties and Other Properties segments, we~~We anticipate that capital expenditures will be funded through operating cash flows from ~~the Managed IL Properties.~~our senior housing properties. Capital expenditures, net of insurance proceeds for the ~~Managed IL Properties segment~~managed properties were ~~$2.8~~$2.5 million for the three months ended March 31, ~~2020. There were no~~2021. As landlord, we did not incur any capital expenditures for the ~~Other Properties segment~~CCRC leased to the tenant for the three months ended March 31, ~~2020.~~2021. After the onset of the pandemic in March 2020, we temporarily halted all elective capital expenditure projects and limited projects to those deemed essential. In summer 2020, we resumed elective capital expenditure projects that could be completed safely.

With respect to our ~~property~~CCRC under a triple net lease arrangement, ~~in the Other Properties segment,~~ the terms of this arrangement require the tenant to fund all necessary capital expenditures in order to maintain and improve the applicable ~~senior housing properties.~~property. To the extent that our tenant is unwilling or unable to fund these capital expenditure obligations under the existing lease arrangement, we may fund capital expenditures with additional borrowings or cash flow from the operations of the senior housing properties. We may also provide corresponding loans or advances to our tenant which would increase the rent payable to us. For further information regarding capital expenditures related to our triple net lease property, see “Contractual Obligations” below and ~~“Part I, Item 1. Note 13~~“Note 15 – Commitments and Contingencies” to our consolidated financial statements.

Cash Flows

The following table provides a summary of our cash flows:


	Three Months Ended March 31,				Increase (Decrease)
(dollars in thousands)	2021		2020		Amount
Net cash provided by (used in)
Operating activities	$	(432)	$	(4,241)	$	3,809
Investing activities	(2,463)		371,018		(373,481)
Financing activities	(8,766)		(282,173)		273,407
Net increase (decrease) in cash, cash equivalents and restricted cash	(11,661)		84,604		(96,265)
Cash, cash equivalents and restricted cash, beginning of period	53,795		63,829		(10,034)
Cash, cash equivalents and restricted cash, end of period	$	42,134	$	148,433	$	(106,299)

Three Months Ended March 31, Increase (Decrease)
(dollars in thousands) 2020 2019 Amount
Net cash provided by (used in)
Operating activities $ (4,241 ) $ (11,095 ) $ 6,854
Investing activities 371,018
(6,647 ) 377,665
Financing activities (282,173 ) (14,241 ) (267,932 )
Net decrease in cash, cash equivalents and restricted cash 84,604
(31,983 ) 116,587
Cash, cash equivalents and restricted cash, beginning of period 63,829
92,656
(28,827 )
Cash, cash equivalents and restricted cash, end of period $ 148,433
$ 60,673
$ 87,760

Operating activities

Net cash used in operating activities was ~~$4.2~~$0.4 million and ~~$11.1~~$4.2 million for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively. The period-over-period ~~decrease~~increase of ~~$6.9~~$3.8 million was primarily due to a ~~one-time termination fee~~decrease in interest expense as a result of ~~$10.0 million paid~~lower average debt balance in ~~2019 to~~conjunction with lower effective interest rates as a result of debt repayments in conjunction with the ~~Former Manager when we entered into an agreement to internalize our management~~AL/MC Portfolio Disposition, lower interest rate on the newly refinanced debt and ~~higher NOI during~~a decrease in LIBOR for the ~~three months ended March 31, 2020.~~comparative periods.

Investing activities

Net cash used in investing activities was $2.5 million and net cash provided by investing activities was $371.0 million ~~and net cash used in investing activities was $6.6 million~~ for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively. The period-over-period ~~increase~~decrease of ~~$377.7~~$373.5 million was due to net proceeds received in February 2020 from the AL/MC Portfolio Disposition of $375.0 million.

Financing activities

Net cash used in financing activities was ~~$282.2~~$8.8 million and ~~$14.2~~$282.2 million for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively. The period-over-period increase of ~~$267.9~~$273.4 million was primarily due to ~~the~~ repayments of debt in conjunction with the AL/MC Portfolio Disposition, ~~and~~ debt ~~refinancing~~refinancings of $576.1 million offset by proceeds from the 2020 Freddie Financing of $270.0 ~~million and borrowings under the Revolver of $100.0 million in February 2020.~~million.

~~The Company borrowed $100.0 million under the Revolver in March 2020.~~

REIT Compliance Requirements

We are organized and conduct our operations to qualify as a REIT for U.S. federal income tax purposes. U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, excluding net capital gains. We intend to pay dividends greater than all of our REIT taxable income to holders of our common stock in ~~2020,~~2021, if, and to the extent, authorized by our board of directors. We note that a portion of this requirement may be able to be met in future years with partial stock dividends, rather than cash distributions, subject to limitations. We expect that our operating cash flows will exceed REIT taxable income due to depreciation and other non-cash deductions in computing REIT taxable income. However, before we pay any dividend, whether for U.S. federal income tax purposes or otherwise, we must first meet both our operating requirements and debt service on our obligations. If we do not have sufficient liquid assets to enable us to satisfy the 90% distribution requirement, or if we decide to retain cash, we may sell assets, issue additional equity securities or borrow funds to make cash distributions, or we may make a portion of the required distribution in the form of a taxable stock distribution or distribution of debt securities.

Income Tax

We are organized and conduct our operations to qualify as a REIT under the requirements of the Code. Currently, certain of our activities are conducted through our TRS and therefore are subject to federal and state income taxes at regular corporate tax rates.

OFF-BALANCE SHEET ARRANGEMENTS

As of March 31, ~~2020,~~2021, we do not have any off-balance sheet arrangements. We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured investment vehicles, special purpose or variable interest entities established to facilitate off-balance sheet arrangements. Further, we have not guaranteed any obligations of unconsolidated entities or entered into any commitment or intend to provide additional funding to any such entities.

CONTRACTUAL OBLIGATIONS

As of March 31, ~~2020,~~2021, we had the following material contractual obligations, including estimates of interest payments on our floating rate debt (dollars in thousands):


	Period from April 1, 2021 to December 31, 2021		2022 (D)		2023		2024		2025		Thereafter		Total
Principal payments	$	7,135	$	19,125	$	19,841	$	24,186	$	21,518	$	22,777	$	114,582
Balloon payments	—		48,419		—		—		1,098,238		238,759		1,385,416
Subtotal	7,135		67,544		19,841		24,186		1,119,756		261,536		1,499,998
Redeemable preferred stock	20,000		—		—		—		—		—		20,000
Interest & redeemable preferred stock dividend (A)(B)	34,930		43,712		42,611		42,046		35,230		24,153		222,682
Leases	484		515		472		240		8		305		2,024
Total obligations (C)	$	62,549	$	111,771	$	62,924	$	66,472	$	1,154,994	$	285,994	$	1,744,704

Period from
April 1, 2020 to December 31, 2020
2021 2022 2023 2024 Thereafter Total
Principal payments $ 2,305
$ 9,241
$ 19,103
$ 19,817
$ 24,160
$ 44,276
$ 118,902
Balloon payments —
—
48,419
—
100,000
1,337,112
1,485,531
Subtotal 2,305
9,241
67,522
19,817
124,160
1,381,388
1,604,433
Redeemable preferred stock 20,000
20,000
—
—
—
—
40,000
Interest & redeemable preferred stock dividend ^(A)(B)
49,209
63,877
60,643
59,175
55,987
87,029
375,920
Leases 392
509
471
466
235
310
2,383
Total obligations ^(C)
$ 71,906
$ 93,627
$ 128,636
$ 79,458
$ 180,382
$ 1,468,727
$ 2,022,736
(A)Estimated interest payments on floating rate debt are calculated using LIBOR rates in effect at March 31, 2021 and may not be indicative of actual payments. Actual payments may vary significantly due to LIBOR fluctuations. See “Note 8 – Debt, Net” to the consolidated financial statements for further information about interest rates.

(B)Includes obligations to pay dividends of $0.9 million in 2021 on the Series A redeemable preferred stock.

(C)Total obligations include an estimate of interest payments on floating rate debt, see Note A above.

(D)The Company has two 1-year extension options to defer the balloon payment; the second extension requires the payment of a nominal extension fee.


~~(A)~~	Estimated interest payments on floating rate debt are calculated using LIBOR rates in effect at March 31, 2020 and may not be indicative of actual payments. Actual payments may vary significantly due to LIBOR fluctuations. See “Part I, Item 1. Note 7 – Debt, Net” to the consolidated financial statements for further information about interest rates.


~~(B)~~	~~Includes obligations to pay dividends of~~ ~~$1.8 million~~ ~~in 2020, and~~ ~~$1.2 million~~ ~~in 2021 on the Series A redeemable preferred stock.~~


~~(C)~~	~~Total obligations include an estimate of interest payments on floating rate debt, see Note A above.~~

In addition to our contractual obligations, we are a party to property management agreements with property managers. See ~~“Part I, Item 1. Note 13~~“Note 15 – Commitments and Contingencies” to the consolidated financial statements for information related to our capital improvement and repair commitments.

NON-GAAP FINANCIAL MEASURES

A non-GAAP financial measure is a measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are not excluded from or included in the most directly comparable GAAP measure. We consider certain non-GAAP financial measures to be useful supplemental measures of our operating performance for management and investors. GAAP accounting for real estate assets assumes that the value of real estate assets diminishes predictably over time, even though real estate values historically have risen or fallen with market conditions. As a result, many industry investors look to non-GAAP financial measures for supplemental information about real estate companies.

You should not consider non-GAAP measures as alternatives to GAAP net (loss) income, which is an indicator of our financial performance, or as alternatives to GAAP cash flow from operating activities, which is a liquidity measure. Additionally, non-GAAP measures are not intended to be a measure of our ability to satisfy our debt and other cash requirements. In order to facilitate a clear understanding of our consolidated historical operating results, you should examine our non-GAAP measures in conjunction with GAAP net (loss) income, cash flow from operating activities, investing activities and financing activities, as presented in our consolidated financial statements, and other financial data included elsewhere in this report. Moreover, the comparability of non-GAAP financial measures across companies may be limited as a result of differences in the manner in which real estate companies calculate such measures.

Below is a description of the non-GAAP financial measures used by our management and reconciliations of these measures to the most directly comparable GAAP measures.

Funds From Operations, Normalized Funds From Operations and Adjusted Funds from Operations

We use Funds From Operations (“FFO”) and Normalized FFO as supplemental measures of our operating performance. We use the National Association of Real Estate Investment Trusts (“NAREIT”) definition of FFO. NAREIT defines FFO as GAAP net income (loss) attributable to common stockholders, which includes loss from discontinued operations, excluding gains (losses) from sales of depreciable real estate assets and impairment charges of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated entities and joint ventures to reflect FFO on the same basis. FFO does not account for debt principal payments and is not intended as a measure of a REIT’s ability to satisfy such payments or any other cash requirements.

Normalized FFO, as defined below, measures the financial performance of our portfolio of assets excluding items that, although incidental to, are not reflective of the day-to-day operating performance of our portfolio of assets. We believe that Normalized FFO is useful because it facilitates the evaluation of our portfolio’s operating performance (i) between periods on a consistent basis and (ii) to the operating performance of other real estate companies. However, comparability may be limited because our calculation of Normalized FFO may differ significantly from that of other companies or because of features of our business that are not present in other companies.

We define Normalized FFO as FFO excluding the following income and expense items, as applicable: (a) acquisition, transaction and integration related expenses; (b) the write off of unamortized discounts, premiums, deferred financing costs, or additional costs, make whole payments and penalties or premiums incurred as the result of early repayment of debt (collectively “Gain ~~(Loss)~~(loss) on extinguishment of debt”); (c) incentive compensation to affiliate recognized as a result of sales of real estate; (d) the remeasurement of deferred tax assets; (e) valuation allowance on deferred tax assets, net; (f) termination fee to affiliate; (g) gain on lease termination; (h) compensation expense related to transition awards; (i) litigation proceeds; and (j) other items that we believe are not indicative of operating performance, generally reported as “Other expense (income)” in our Consolidated Statements of Operations.

We also use Adjusted FFO (“AFFO”) as a supplemental measure of our operating performance. We believe AFFO is useful because it facilitates the evaluation of (i) the current economic return on our portfolio of assets between periods on a consistent basis and (ii) our portfolio versus those of other real estate companies that report AFFO. However, comparability may be limited because our calculation of AFFO may differ significantly from that of other companies, or because of features of our business that are not present in other companies.

We define AFFO as Normalized FFO excluding the impact of the following: (a) straight-line ~~rents;~~rental revenue; (b) amortization of above / below market lease intangibles; (c) amortization of deferred financing costs; (d) amortization of premium or discount on mortgage notes payable; (e) amortization of deferred community fees and other, which includes the net change in deferred community fees and other rent discounts or incentives; and (f) amortization of equity-based compensation expense.

The following table sets forth a reconciliation of net income (loss) attributable to common stockholders to FFO, Normalized FFO and Adjusted FFO; adjustments below include amounts related to properties classified as discontinued operations:


	Three Months Ended March 31,
(dollars in thousands)	2021		2020
Net income (loss) attributable to common stockholders	$	(7,607)	$	5,239

Depreciation and amortization	15,889		17,536
Gain on sale of real estate	—		(19,992)
FFO	8,282		2,783
Acquisition, transaction and integration expense	393		1,170
Loss on extinguishment of debt	—		9,486
Compensation expense related to transition awards	325		390


Other expense (income) (A)	615		(294)
Normalized FFO	9,615		13,535
Straight line rental revenue	(95)		(134)
Amortization of equity-based compensation expense	1,760		1,106
Amortization of deferred financing costs	957		906
Amortization of deferred community fees and other	(696)		(1,314)
Adjusted FFO	$	11,541	$	14,099

Three Months Ended March 31,
(dollars in thousands) 2020 2019
Net income (loss) attributable to common stockholders $ 5,239
$ (11,791 )
Depreciation and amortization 17,536
20,787
Gain on sale of real estate (19,992 ) —
FFO 2,783
8,996
Acquisition, transaction and integration expense 1,170
650
Loss on extinguishment of debt 9,486
—
Compensation expense related to transition awards 390
601
Other (income) expense ^(A)
(294 ) 1,306
Normalized FFO 13,535
11,553
Straight line rental revenue (134 ) (173 )
Amortization of equity-based compensation expense 1,106
—
Amortization of deferred financing costs 906
1,208
Amortization of deferred community fees and other (1,314 ) 569
Adjusted FFO $ 14,099
$ 13,157

(A) Primarily includes ~~changes in the fair value of financial instruments,~~ insurance recoveries and casualty related charges.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) facilitates an assessment of the operating performance of our existing portfolio of assets on an unleveraged basis by eliminating the impact of our capital structure and tax position. We define Adjusted EBITDA as net income (loss) attributable to common stockholders, which includes loss from discontinued operations, before interest, taxes, depreciation and amortization (including non-cash equity-based compensation

expense), excluding deemed dividends on redeemable preferred stock, gain or loss on sale of real estate, impairment of real estate held for sale, acquisition, transaction and integration expense, loss on extinguishment of debt, compensation expense related to transition awards, incentive compensation on sale of real estate, termination fee to affiliate, gain on lease termination, litigation proceeds, and other expense.

The following table sets forth a reconciliation of net income (loss) attributable to common stockholders to Adjusted EBITDA; adjustments below include amounts related to properties classified as discontinued operations:

Three Months Ended March 31,
(dollars in thousands) 2020 2019
Net income (loss) attributable to common stockholders $ 5,239
$ (11,791 )
Depreciation and amortization 17,536
20,787
Deemed dividend on redeemable preferred stock 598
598
Gain on sale of real estate (19,992 ) —
Acquisition, transaction and integration expense 1,170
650
Loss on extinguishment of debt 9,486
—
Compensation expense related to transition awards 390
601
Other (income) expense ^(A)
(294 ) 1,306
Amortization of equity-based compensation expense 1,106
—
Interest expense 18,580
23,719
Income tax expense 59
80
Adjusted EBITDA $ 33,878
$ 35,950


	Three Months Ended March 31,
(dollars in thousands)	2021		2020
Net income (loss) attributable to common stockholders	$	(7,607)	$	5,239
Depreciation and amortization	15,889		17,536
Deemed dividend on redeemable preferred stock	296		598
Gain on sale of real estate	—		(19,992)
Acquisition, transaction and integration expense	393		1,170
Loss on extinguishment of debt	—		9,486
Compensation expense related to transition awards	325		390


Other expense (income) (A)	615		(294)
Amortization of equity-based compensation expense	1,760		1,106
Interest expense	14,353		18,580
Income tax expense	34		59
Adjusted EBITDA	$	26,058	$	33,878

(A) Primarily includes ~~changes in the fair value of financial instruments,~~ insurance recoveries and casualty related charges.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Management’s discussion and analysis of financial condition and results of operations is based upon our historical financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that could affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. Our estimates are based on information available to management at the time of preparation of the financial statements, including the result of historical analysis, our understanding and experience of our operations, our knowledge of the industry and market-participant data available to us.

Actual results have historically been in line with management’s estimates and judgments used in applying each of ~~our~~the accounting policies described below, and management periodically re-evaluates accounting estimates and assumptions. Actual results could differ from these estimates and materially impact our consolidated financial statements. However, we do not expect our assessments and assumptions below to materially change in the future.

Other than critical accounting policies mentioned in ~~“Part I, Item 1. Note~~“Note 2 – Summary of Significant Accounting Policies” of our consolidated financial statements, there were no material changes to our critical accounting policies disclosed in our Form 10-K for the year ended December 31, ~~2019.~~2020.

RECENT ACCOUNTING PRONOUNCEMENTS

See ~~“Part I, Item 1. Note~~“Note 2 – Summary of Significant Accounting Policies” of our consolidated financial statements for information about recent accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the exposure to loss resulting from changes in interest rates, credit spreads, foreign currency exchange rates, commodity prices and equity prices. The primary market risks that we are exposed to are interest rate risk and credit risk. These risks are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control. All of our market risk sensitive assets and liabilities are for non-trading purposes only. In addition, we are exposed to liquidity risk.

Interest Rate Risk

We are exposed to market risk related to changes in interest rates on borrowings under our mortgage loans that are floating rate obligations. These market risks result primarily from changes in LIBOR or prime rates. We continuously monitor our level of floating rate debt with respect to our total debt and other factors, including our assessment of current and future economic conditions.

For fixed rate debt, interest rate fluctuations generally affect the fair value, but do not impact our earnings or cash flows. Therefore, interest rate risk does not have a significant impact on our fixed rate debt obligations until such obligations mature or until we elect to prepay and refinance such obligations. If interest rates have risen at the time our fixed rate debt matures or is refinanced, our future earnings and cash flows could be adversely affected by additional borrowing costs. Conversely, lower interest rates at the time of maturity or refinancing may lower our overall borrowing costs.

For floating rate debt, interest rate fluctuations can affect the fair value, as well as earnings and cash flows. IfGenerally, if market interest rates rise, our earnings and cash flows could be adversely affected by an increase in interest ~~expense. In contrast,~~expense, and lower interest rates may reduce our borrowing costs and improve our operational results. We continuously monitor our interest rate exposure and may elect to use derivative instruments to manage interest rate risk associated with floating rate debt.

In August 2020, we entered into an interest rate swap with a notional amount of $270.0 million that matures in September 2025 and in May 2019, we entered into an interest rate swap with a notional amount of $350.0 million ~~and a maturity date of~~that matures in May ~~2022 that~~2022. These swaps effectively ~~converts~~convert LIBOR-based floating-rate debt to fixed-rate debt, thus reducing the impact of interest-rate changes on future interest expense. After considering the effect of the interest rate swap, ~~$0.8 billion~~$419.1 million of our floating rate debt with an average coupon rate of ~~3.66%~~2.50% would be subject to interest rate fluctuations. As a result, a 100 basis point increase in interest rates would increase annual interest expense by ~~$7.9~~$4.2 million. AHowever, a 100 basis point decrease in interest rates would ~~decrease~~also increase annual interest expense by ~~$7.8~~$2.7 million due to the impact of LIBOR ~~floor~~floors included in certain debt agreements.

The table below sets forth the outstanding face amount of our debt subject to LIBOR fluctuations after incorporating the impact of the interest rate swap discussed above, excluding debt associated with assets classified as discontinued operations:


	Outstanding Face Amount
(dollars in thousands)	March 31, 2021		December 31, 2020
Floating Rate	$	419,137		$	419,316
Fixed Rate	1,080,861			1,082,808
Total	$	1,499,998		$	1,502,124

LIBOR was initially expected to be phased out at the end of calendar year 2021. However, regulators have announced they intend to cease the publication of U.S. dollar LIBOR rates for the most common tenors (overnight and one, three, six, and 12 months) in June 2023. Despite any continued publication of U.S. dollar LIBOR through June 2023, these same regulators emphasized that no new contracts using U.S. dollar LIBOR should be entered into after December 31, 2021. A portion of our debt, which includes certain mortgage loans and our revolving credit facility, is required to pay interest at floating rates based on LIBOR. We also hold derivatives (interest rate swaps) indexed to LIBOR as hedging instruments, as described above. In the event that LIBOR is phased out, the interest rate for our floating rate debt and the swap rate for our interest rate swaps will be based on an alternative floating rate as specified in the applicable debt instrument or agreement, or as otherwise agreed upon between us and our lenders. Certain of our newer loans and financial instruments have alternative LIBOR provisions, which generally give our lenders substantial flexibility in setting alternative rates if and when LIBOR is discontinued. We expect that the provisions of our other debt agreements relating to the calculation of interest will likely be amended, and over the past year we have been working with our lenders in the ordinary course to manage transition efforts to be prepared for this phase-out. We do not know what standard, if any, will replace LIBOR if it is phased out. Currently we cannot estimate the overall impact of the phase-out of LIBOR on our current debt agreements, although it is possible that an alternative variable rate could be higher or more volatile, which could raise our borrowing costs.

March 31, 2020 December 31, 2019
Outstanding Face Amount Outstanding Face Amount
Floating Rate $ 789,753
$ 789,036
Fixed Rate 814,680
814,680
Total $ 1,604,433
$ 1,603,716

Liquidity Risk

As described further in ~~“Part II, Item 1A. Risk~~“Risk Factors,” the following factors could affect our liquidity, access to capital resources and our capital obligations.

• Our stock price performance could impair our ability to access the capital markets, and any disruption to the capital markets or other sources of financing generally could also negatively affect our liquidity.

• Our failure to comply with the terms of our financings or a default by our lease counterparty (including a failure by the lease guarantor to satisfy certain financial covenants that depend on the performance of our leased assets, which are outside of our control) could result in the acceleration of the requirement to repay our indebtedness or require us to seek amendments to such agreements, which we may not be able to obtain on commercially reasonable terms, if at all.

• Our ability to obtain financing or refinancing on favorable terms, if at all.

•Real estate investments are relatively illiquid, and our ability to quickly sell or exchange our properties in response to changes in economic or other conditions is limited. In the event we desire or need to sell any of our properties, the value of those properties and our ability to sell at a price or on terms acceptable to us could be adversely affected by a downturn in the real estate industry generally, weakness in the senior housing and healthcare industries or other factors.

• Because we derive substantially all of our revenues from operations conducted by third parties, any inability or unwillingness by these ~~operators~~property managers to satisfy their respective obligations to us or to renew their leases with us upon expiration of the terms thereof could have a material adverse effect on our liquidity, financial condition, our ability to service our indebtedness and to make distributions to our stockholders.

• To comply with the 90% distribution requirement applicable to REITs and to avoid income and excise taxes, we must make distributions to our stockholders. Our actual distributions to stockholders have historically been higher than the REIT distribution requirement. Distributions will limit our ability to finance investments and may limit our ability to engage in transactions that are otherwise in the best interests of our stockholders. Although we do not anticipate any inability to satisfy the REIT distribution requirement, from time to time, we may not have sufficient cash or other liquid assets to do so. For example, timing differences between the ~~actual~~ receipt of income and ~~actual~~ payment of deductible expenses, on the one hand, and the inclusion of that income and deduction of those expenses in arriving at our taxable income, on the other hand, or non-deductible expenses such as principal amortization or repayments or capital expenditures in excess of non-cash deductions may cause us to fail to have sufficient cash or liquid assets to enable us to satisfy the 90% distribution requirement. In the event that timing differences occur or we decide to retain cash or to distribute such greater amount as may be necessary to avoid income and excise taxation, we may seek to borrow funds, issue additional equity securities, pay taxable stock dividends, distribute other property or securities or engage in a transaction intended to enable us to meet the REIT distribution requirements. Any of these actions may require us to raise additional capital to meet our obligations; however, limitations on our ability to access capital, as described above, could have an adverse effect on our ability to make required payments on our debt obligations, make distributions to our stockholders or make future investments necessary to implement our business strategy. The terms of the instruments governing our existing indebtedness restrict our ability to engage in certain types of these transactions.

•As discussed in more detail in ~~“Part I, Item 2. Management’s~~“Management’s Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources,” the impacts of the COVID-19 pandemic will affect the Company’s liquidity in various ways, including among other things by further impairing our ability to access the capital markets, by reducing our revenues due to decreased occupancy at our properties and reduced asset values, which over time may limit the borrowing availability under ~~our~~the Revolver.

ITEM 4. CONTROLS AND PROCEDURES

~~(a)~~

Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report. The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information is recorded, processed, summarized and reported accurately and on a timely basis. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective. We instituted a full remote working policy in mid-March that will be in effect indefinitely. Considering the COVID-19 pandemic, we have modified certain controls to address the challenges associated with a remote working environment.

~~(b)~~

Changes in Internal Control Over Financial Reporting. There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d- 15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

(a)Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information is recorded, processed, summarized and reported accurately and on a timely basis. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective.

(b)Changes in Internal Control Over Financial Reporting. There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d- 15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are and may ~~from time to time~~ become involved in legal proceedings, including regulatory investigations and inquiries, in the ordinary course of our business. Although we are unable to predict with certainty the eventual outcome of any litigation, regulatory investigation or inquiry, in the opinion of management, we do not expect our current and any threatened legal proceedings to have a material adverse effect on our financial position or results of operations. Given the inherent unpredictability of these types of proceedings, however, it is possible that future adverse outcomes could have a material adverse effect on our financial results.

ITEM 1A. RISK FACTORS

~~We are supplementing~~There have been no material changes from the risk factors ~~described~~identified under ~~“Item 1A. Risk~~the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2019 (“Form 10-K”) with the additional risk factor set forth below. This additional risk factor supplements, and to the extent inconsistent, supersedes such risk factors.~~2020.

The novel coronavirus (“COVID-19”) global pandemic and measures intended to prevent its spread have had, and may continue to have, a material adverse effect on our business, results of operations, financial condition and liquidity, as well as on the price of our common stock.

The COVID-19 pandemic is causing significant disruptions to the U.S. and global economies and has contributed to volatility and negative pressure in financial markets. The outbreak has led federal, state and local governments and public health authorities to impose measures intended to control its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, quarantines and shelter-in-place orders.

Our portfolio consists of independent senior living properties. Accordingly, factors that affect real estate and the senior housing industry will have a more pronounced effect on our portfolio relative to a portfolio of more diversified investments. In particular, because COVID-19 has had disproportionately severe impacts on the health of seniors, we expect to be more significantly affected by COVID-19 than other REITs that focus on different sectors. As of the date of this filing, approximately 15.5% of our 103 communities have reported cases of COVID-19, and we expect the number of confirmed cases to continue to rise as testing for the virus becomes more widespread. Although we are taking various measures to reduce the risk of transmission of COVID-19 in our properties, including limiting access to our facilities and common areas within our facilities, and we are working proactively with our operators to monitor their protocols and share best practices for reducing the spread of COVID-19, we can provide no assurance that these measures will be effective in preventing additional cases of COVID-19 within our properties. COVID-19 and the measures that we have taken in response to combat the virus have already resulted in reduced occupancy rates of our properties, resulting in reduced rental revenue, and it has increased operating costs at our properties, and we expect these trends to continue during the course of the COVID-19 pandemic. In addition, our residents and tenant may experience deteriorating financial conditions as a result of the COVID-19 pandemic and may be unwilling or unable to satisfy their obligations to us on a timely basis, or at all, which may further reduce our revenues and cash flows. We also may face an increased risk of litigation if we have residents who become seriously ill due to COVID-19, or with our residents and tenant related to their obligations to us.

The COVID-19 pandemic has also caused, and is likely to continue to cause, severe economic, market and other disruptions worldwide, including a significant decline and volatility in equity markets and in asset values more generally. These factors have significantly affected the price of our common stock, which traded as high as $8.35 per share and as low as $1.72 per share during the first quarter of 2020. We cannot assure you that conditions in the credit, capital and other financial markets will not continue to deteriorate as a result of the pandemic, or that our ability to obtain financing, including through refinancing our existing indebtedness at the times of maturity, will not become constrained, which could adversely affect the availability and terms of our ability to access equity and debt capital markets, or make future borrowings, renewals or refinancings. In addition, our liquidity may be adversely affected by these factors, reductions in our revenues due to decreased occupancy in our properties and reduced asset values, which over time may limit the borrowing availability under our Revolver.

The extent of the COVID-19 pandemic’s effect on our business, operational, financial performance and liquidity will depend on future developments, including the duration, spread, intensity and recurrence of the pandemic, both generally and with respect to its effect on our properties, all of which are highly uncertain and very difficult to predict at this time. Due to the speed with which the situation is developing, we are not able at this time to estimate the effect of these factors on our business, but the adverse impact of these factors on our business, results of operations, financial condition, cash flows and stock price could be material.

In addition, to the extent COVID-19 adversely affects our business, financial condition, and results of operations and economic conditions more generally, it may also have the effect of heightening many of the other risk factors described in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

On May 4, 2020, the Board adopted Amended and Restated Bylaws of the Company (as so amended and restated, the “Bylaws”), which took effect immediately. The Bylaws supersede the previously existing Amended and Restated Bylaws, which took effect on February 25, 2020. The Bylaws were amended to remove the requirement in Section 5.7 of the Bylaws that there be a minimum of 30 days between the record date and payment date for a dividend or other distribution. The Bylaws continue to provide that there be a maximum of 60 days between the record date and the payment date of a dividend or other distribution, consistent with the Delaware General Corporation Law. The foregoing description is qualified in its entirety by the full text of the Bylaws, a copy of which is attached hereto as Exhibit 3.1 and incorporated by reference herein.None.

ITEM 6. EXHIBITS



Exhibits filed with this Form 10-Q:
~~3.1~~31.1		~~Amended and Restated Bylaws of New Senior Investment Group Inc.~~
~~31.1~~	Certification of Chief Executive Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of 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.INS		Interactive Data File formatted in Inline XBRL
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		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized:



			NEW SENIOR INVESTMENT GROUP INC.


			By:			/s/ Bhairav Patel
			Bhairav Patel
			Executive Vice President of Finance and Accounting and Interim Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

			May ~~8, 2020~~5, 2021

3937



Delaware						80-0912734
(State or other jurisdiction of incorporation ~~or organization)~~						(I.R.S. Employer Identification No.)
or organization)



Large accelerated filer	☒☐	Accelerated filer	☐☒
Smaller reporting company	☐	Non-accelerated filer	☐
		Emerging growth company	☐



	March 31, 2020		December 31, 2019
Escrows held by lenders ^(A)	$	10,461	$	15,895
Straight-line rent receivable	4,218		4,084
Prepaid expenses	6,462		3,534
Security deposits	2,851		2,763
Resident receivables, net	1,422		1,345
Income tax receivable	636		821
Other assets and receivables	6,098		4,636
Total receivables and other assets	$	32,148	$	33,078


	March 31, 2021		December 31, 2020
Escrows held by lenders (A)	$	14,396	$	17,694
Straight-line rent receivable	4,610		4,515
Prepaid expenses	6,803		3,923
Security deposits	2,989		3,037
Resident receivables, net	985		1,151

Derivative asset	4,208		0
Other assets and receivables	6,032		4,572
Total receivables and other assets	$	40,023	$	34,892


2021 (nine months)	$	4,577
2022	6,233
2023	6,405
2024	6,581
2025	6,762
Thereafter	32,126
Total future minimum rents	$	62,684



☒			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



~~N/A~~
~~(Former name, former address and former fiscal year, if changed since last report)~~



	Three Months Ended March 31, 2019
	Common Stock			Accumulated Deficit			Additional Paid-in Capital		Total Equity
	Shares	Amount		Accumulated Deficit			Additional Paid-in Capital		Total Equity
Equity at December 31, 2018	82,148,869	$	821	$	(616,504	)	$	898,135	$	282,452
Amortization of equity-based compensation	—	—		—			449		449
Directors shares issued	60,975	1		—			274		275
Dividends declared - common stock ($0.13 per share)	—	—		(10,687		)	—		(10,687		)
Dividends declared - equity awards ($0.13 per share)	—	—		(104		)	—		(104		)
Deemed dividend on redeemable preferred stock	—	—		(598		)	—		(598		)
Net loss	—	—		(11,193		)	—		(11,193		)
Equity at March 31, 2019	82,209,844	$	822	$	(639,086	)	$	898,858	$	260,594



	Three Months Ended March 31, 2020
	Managed IL Properties		Other Properties		Consolidated
Revenues
Resident fees and services	$	85,007	$	—	$	85,007
Rental revenue	—		1,583		1,583
Less: Property operating expense	51,065		—		51,065
Segment NOI	$	33,942	$	1,583	35,525

Depreciation and amortization					17,536
Interest expense					17,219
General and administrative expense					5,846
Acquisition, transaction and integration expense					133
Loss on extinguishment of debt					5,884
Other income					(105		)
Total expenses					46,513
Loss before income taxes					(10,988		)
Income tax expense					60
Loss from continuing operations					(11,048		)
Discontinued operations:
Gain from sale of real estate					19,992
Loss from discontinued operations					(3,107		)
Discontinued operations, net					16,885
Net income					$	5,837



	As of and for the three months ended March 31, 2020			As of and for the three months ended March 31, 2019
	Number of Communities	% of Total Revenue		Number of Communities	% of Total Revenue
Florida	9	9.0	%	9	9.1	%
California	9	10.3	%	9	10.6	%
Texas	9	8.1	%	9	7.8	%
North Carolina	8	8.5	%	8	8.3	%
Pennsylvania	5	5.7	%	6	6.7	%
Oregon	8	7.0	%	8	7.1	%
Other	55	51.4	%	56	50.4	%
Total	103	100.0	%	105	100.0	%


~~(A)~~	~~Represents amounts held by lenders in tax, insurance, replacement reserve and other escrow accounts that are related to mortgage notes collateralized by New Senior’s properties.~~



2020 (nine months)	$	4,455
2021	6,066
2022	6,233
2023	6,405
2024	6,581
Thereafter	38,888
Total future minimum lease payments	$	68,628


~~(A)~~	~~The totals are reported net of deferred financing costs of $18.5 million and $13.1 million as of March 31, 2020 and December 31, 2019, respectively.~~


~~(B)~~	~~Substantially all of these loans have LIBOR caps that range between 3.38% and 3.75% as of March 31, 2020.~~



(646)			822-3700


~~(C)~~	~~Includes $100.0 million of borrowings outstanding under our Revolver as of March 31, 2020.~~


~~(D)~~	As of March 31, 2020, $350.0 million of total floating rate debt has been hedged using an interest rate swap, which is carried at fair value. See “Note 8 - Derivative Instruments” for more information.



	March 31, 2020		December 31, 2019
Accounts payable	$	10,718	$	17,554
Security deposits payable	2,419		2,486
Due to property managers	6,714		6,752
Mortgage interest payable	5,218		5,665
Deferred community fees, net	5,820		5,865
Rent collected in advance	1,984		2,099
Property tax payable	4,843		5,627
Operating lease liability	1,914		1,942
Derivative liability	14,670		5,896
Other liabilities	8,013		5,434
Total accrued expenses and other liabilities	$	62,313	$	59,320


	Fair Value Hierarchy	March 31, 2021				December 31, 2020
		Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Cash and cash equivalents (A)	1	$	24,749	$	24,749	$	33,046	$	33,046
Restricted cash (A)	1	17,385		17,385		20,749		20,749
Interest rate swap (B)	2	4,208		4,208		0		0
Interest rate caps (B)	2	28		28		10		10
Financial Liabilities:
Mortgage debt (C)	3	$	1,484,996	$	1,548,241	$	1,486,164	$	1,524,210

Interest rate swap (B)	2	8,018		8,018		10,980		10,980


~~(B)~~	~~Fair value based on pricing models that consider inputs including forward yield curves, cap strike rates, cap volatility and discount rates.~~


~~(C)~~	Fair value based on a discounted cash flow valuation model. Significant inputs in the model include amounts and timing of expected future cash flows and market yields which are constructed based on inputs implied from similar debt offerings. Our mortgage debt and revolving credit facility are not measured at fair value in our Consolidated Balance Sheets.


~~(D)~~	~~As of December 31, 2019, the carrying values and the fair value of our interest rate caps were immaterial.~~


~~12.~~	~~REDEEMABLE PREFERRED STOCK, EQUITY AND EARNINGS PER COMMON SHARE~~



Balance as of December 31, 2019	$	40,506
Accrued dividend on Redeemable Preferred Stock	598
Paid dividend on Redeemable Preferred Stock	(604		)
Balance as of March 31, 2020	$	40,500


Balance as of December 31, 2020	$	20,253
Accrued dividend	296
Paid dividend	(302)
Balance as of March 31, 2021	$	20,247


~~(A)~~	The outstanding shares used to calculate the weighted average basic shares exclude 493,599 and 800,381 restricted stock awards as of March 31, 2020 and 2019 net of forfeitures, respectively, as those shares were issued but were not vested and therefore, not considered outstanding for purposes of computing basic income (loss) per common share for the three months ended March 31, 2020.


~~(B)~~	~~During the three months ended March 31, 2020 and 2019~~, ~~1,527,646and 892,626 dilutive share equivalents and options, respectively, were excluded as their inclusion would have been anti-dilutive given our loss position.~~15. COMMITMENTS AND CONTINGENCIES


Year	Operating Leases
2021 (nine months)	$	484
2022	515
2023	472
2024	240
2025	8
Thereafter	305
Total future minimum lease payments	2,024
Less imputed interest	(397)
Total operating lease liability	$	1,627



	Same Store & Total Portfolio
(dollars in thousands, except per bed data)	2020		2019		Change		%
Resident fees and services	$	85,007	$	83,745	$	1,262	1.5	%
Less: Property operating expense	51,065		50,719		346		0.7	%
NOI	$	33,942	$	33,026	$	916	2.8	%

Total properties as of the period ended	102		102
Average available beds	11,976		11,974
Average occupancy (%)	87.1		87.0
Average monthly revenue per occupied bed	$	2,716	$	2,680



	Same Store Portfolio								Total Portfolio
(dollars in thousands, except per bed data)	2020		2019		Change		%		2020		2019		Change			%
Resident fees and services	$	—	$	—	$	—	NM		$	—	$	2,004	$	(2,004	)	NM
Rental Revenue	1,583		1,582		1		0.1	%	1,583		1,582		1			0.1	%
Less: Property operating expense	—		—		—		NM		—		2,220		(2,220		)	NM
NOI	$	1,583	$	1,582	$	1	0.1	%	$	1,583	$	1,366	$	217		15.9	%

Total properties as of the period ended	1		1						1		3
Average available beds	463		463						463		742