In making the Company’s credit evaluations, management considers the general collection risk associated with trends in the long-term care industry. The Company establishes credit limits through payment terms with customers, performs ongoing credit evaluations and monitors accounts on an aging schedule basis to minimize the risk of loss. Despite the Company’s efforts to minimize credit risk exposure, customers could be adversely affected if future industry trends change in such a manner as to negatively impact their cash flows. As a result, the Company’s future collection experience could differ significantly from historical collection trends. If the Company’s customers experience a negative impact on their cash flows, it could have a material adverse effect on the Company’s results of operations and financial condition.

The Company evaluates its accounts and notes receivable for expected credit losses quarterly. Accounts receivable are evaluated based on internally developed credit quality indicators derived from the aging of receivables. Notes receivable are evaluated based on internally developed credit quality indicators derived from management’s assessment of collection risk. At the end of each period, the Company sets a reserve for expected credit losses on standard accounts and notes receivable based on the Company’s historical loss rates. Accounts and notes receivable with an elevated risk profile, which are from customers who have filed bankruptcy or are subject to collections activity, are aggregated and evaluated to determine the total reserve for the class of receivable. Additionally, starting in the year ended December 31, 2024, for notes receivable management evaluates standard receivables based on whether the customer is current (paying within 60 days of terms) or delinquent (paying outside of 60 days of terms).

On July 9, 2025, Genesis Healthcare, Inc. (“Genesis”) filed for Chapter 11 bankruptcy protection in the Northern District of Texas. As of June 30, 2025, the Company had outstanding accounts and notes receivable due from Genesis of $47.7 million and $22.1 million (inclusive of $1.7 million in deferred interest income), respectively. Upon review of the bankruptcy petition, the Company identified the Genesis accounts and notes receivables as separate loss pools for evaluating the collectability of the receivables due to the size of the outstanding balances and the assessed likelihood of recovery. As of June 30, 2025, the Company assessed a 100% allowance on the outstanding balances of both the accounts and notes receivable due from Genesis. In conjunction with recording the allowance for Genesis receivables, the Company recognized bad debt expense of $61.2 million during the three and six months ended June 30, 2025.

ASC 326 permits entities to make an accounting policy election not to measure an estimate for credit losses on accrued interest if those entities write off accrued interest deemed uncollectible in a timely manner. The Company follows an income recognition policy on all interest earned on notes receivable. Under such policy the Company accounts for all notes receivable on a non-accrual basis and defers the recognition of any interest income until receipt of cash payments. This policy was established based on the Company’s history of collections of interest on outstanding notes receivable, as we do not deem it probable that we will receive substantially all interest on outstanding notes receivable. Accordingly, the Company does not record a credit loss adjustment for accrued interest. Interest income from notes receivable for the three months ended June 30, 2025 and 2024 was $1.0 million and $0.6 million, respectively. Interest income from notes receivable for the six months ended June 30, 2025 and 2024 was $2.3 million and $1.7 million, respectively.


	Notes receivable
	Amortized cost basis by origination year
	2025		2024		2023		2022		2021		Prior		Total
	(in thousands)
Notes receivable
Standard notes receivable	$	51,922	$	16,121	$	2,084	$	5,875	$	—	$	—	$	76,002
Delinquent notes receivable	$	—	$	318	$	1,054	$	1,811	$	606	$	—	$	3,789
Genesis notes receivable	$	—	$	—	$	—	$	—	$	—	$	22,134	$	22,134
Elevated risk notes receivable	$	—	$	—	$	2,709	$	—	$	—	$	1,491	$	4,200

Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current-period recoveries	—		(278)		—		—		—		—		(278)
Current-period net write-offs	$	—	$	(278)	$	—	$	—	$	—	$	—	$	(278)


	Age analysis of past-due notes receivable as of June 30, 2025
	0 - 90 Days		91 - 180 Days		Greater than 181 Days		Total
	(in thousands)
Notes receivable
Standard notes receivable	$	119	$	—	$	—	$	119
Delinquent notes receivable	378		327		2,698		3,403
Genesis notes receivable	255		286		21,336		21,877
Elevated risk notes receivable	—		150		2,879		3,029
	$	752	$	763	$	26,913	$	28,428


	Allowance for doubtful accounts
Portfolio Segment:	March 31, 2025		Reclassifications		Write-Offs1		Bad Debt Expense		June 30, 2025
	(in thousands)
Accounts receivable
Aged accounts receivable	$	87,098	$	(1,751)	$	(30,246)	$	9,642	$	64,743
Genesis accounts receivable	—		1,751		—		45,977		47,728
Total accounts receivable	$	87,098	$	—	$	(30,246)	$	55,619	$	112,471

Notes receivable
Standard notes receivable	$	4,586	$	—	$	—	$	1,035	$	5,621
Delinquent notes receivable	6,013		(5,176)		—		235		1,072
Genesis notes receivable	—		5,176		—		15,234		20,410
Elevated risk notes receivable	2,140		—		—		170		2,310
Total notes receivable	$	12,739	$	—	$	—	$	16,674	$	29,413
Total accounts and notes receivable	$	99,837	$	—	$	(30,246)	$	72,293	$	141,884

1.Write-offs are shown net of recoveries. During the three months ended June 30, 2025, the Company collected less than $0.1 million of accounts and notes receivable which had previously been written-off as uncollectible.


	Allowance for doubtful accounts
Portfolio segment:	March 31, 2024		Write-Offs1		Bad Debt Expense		June 30, 2024
	(in thousands)
Accounts receivable	$	84,087	$	(11,955)	$	31,561	$	103,693

Notes receivable
Standard notes receivable	$	3,047	$	—	$	(60)	$	2,987
Delinquent notes receivable	3,698		(69)		221		3,850
Elevated risk notes receivable	4,755		—		—		4,755
Total notes receivable	$	11,500	$	(69)	$	161	$	11,592
Total accounts and notes receivable	$	95,587	$	(12,024)	$	31,722	$	115,285

1.Write-offs are shown net of recoveries. During the three months ended June 30, 2024, the Company collected less than $0.1 million of accounts and notes receivable which had previously been written-off as uncollectible.


	Allowance for doubtful accounts
Portfolio Segment:	December 31, 2024		Reclassifications		Write-Offs1		Bad Debt Expense		June 30, 2025
	(in thousands)
Accounts receivable
Aged accounts receivable	$	87,520	$	(1,651)	$	(32,557)	$	11,431	$	64,743
Genesis accounts receivable	—		1,651		—		46,077		47,728
Total accounts receivable	$	87,520	$	—	$	(32,557)	$	57,508	$	112,471

Notes receivable
Standard notes receivable	$	5,096	—		278		$	247	$	5,621
Delinquent notes receivable	6,026		(5,176)		—		222		1,072
Genesis notes receivable	—		5,176		—		15,234		20,410
Elevated risk notes receivable	2,140		—		—		170		2,310
Total notes receivable	$	13,262	$	—	$	278	$	15,873	$	29,413
Total accounts and notes receivable	$	100,782	$	—	$	(32,279)	$	73,381	$	141,884


	Allowance for doubtful accounts
Portfolio segment:	December 31, 2023		Write-Offs1		Bad Debt Expense		June 30, 2024
	(in thousands)
Accounts receivable	$	80,819	$	(12,988)	$	35,862	$	103,693

Notes receivable
Standard notes receivable	$	3,510	$	—	$	(523)	$	2,987
Delinquent notes receivable	2,615		(69)		1,304		3,850
Elevated risk notes receivable	4,755		—		—		4,755
Total notes receivable	$	10,880	$	(69)	$	781	$	11,592
Total accounts and notes receivable	$	91,699	$	(13,057)	$	36,643	$	115,285