On January 17, 2025, BrightSpring entered into a definitive agreement to sell its Community Living business to National Mentor Holdings, Inc. (the “Purchaser”) for $835.0 million in cash upon closing, subject to certain post-closing adjustments. We entered into the transaction in order to streamline our service offerings and further focus on the senior and specialty populations. On March 30,

2026, the Company completed the transaction pursuant to the terms of the definitive agreement for cash proceeds of $810.9 million, resulting in a pre-tax gain on sale of $103.4 million.

The following tables reconciles the gross proceeds on sale of the Community Living business:


	For the Three Months Ended
	March 31,
	2026
Gross proceeds	$	835,000
Less: certain post-closing adjustments		11,073
Less: direct costs to sell		13,854
Less: carrying amount of Community Living business		706,661
Gain on sale of discontinued operations	$	103,412
Less: current and deferred tax impact		72,218
Net gain on sale of discontinued operations	$	31,194

The Company determined the divestiture of the Community Living business represents a strategic shift that will have a major effect on its business and concluded the criteria for classification as discontinued operations were met during the first fiscal quarter of 2025. Accordingly, the Community Living business is reported as discontinued operations in accordance with Accounting Standards Codification (“ASC”) 205-20, Discontinued Operations. The Community Living business was historically presented as a part of the Provider Services reportable segment.

In accordance with ASC 205-20, Allocation of Interest to Discontinued Operations, the Company elected to allocate interest expense to discontinued operations for the Company’s debt that is not directly attributed to the Community Living business. Interest expense was allocated based on a ratio of net assets held for sale to the sum of consolidated net assets and consolidated debt. In addition, upon closing of the divestiture, we entered into a transition services agreement (“TSA”) with the Purchaser to support the Purchaser's post-closing operations of the Community Living business by providing the Purchaser with certain transition services in exchange for service fees in the form of both fixed-price and pass through costs over the 18 months following the close of the transaction. Transition services primarily include finance and accounting, human resources, IT, facilities management, and compliance services.

The financial results of the Community Living business are presented as income from discontinued operations on our unaudited condensed consolidated statements of operations through March 31, 2026. The following table presents the financial results of the Community Living business (in thousands):


	For the Three Months Ended
	March 31,
	2026		2025
Services revenue	$	306,646	$	299,106
Cost of services		206,585		204,183
Gross profit		100,061		94,923
Selling, general, and administrative expenses		37,966		60,744
Operating income of discontinued operations		62,095		34,179
Interest expense, net		6,677		7,907
Gain on sale of discontinued operations		103,412		—
Income of discontinued operations before incomes taxes		158,830		26,272
Income tax expense of discontinued operations		84,503		6,478
Income from discontinued operations, net of income taxes	$	74,327	$	19,794

The following table presents the aggregate carrying amounts of assets and liabilities held for sale for the Community Living business as of December 31, 2025 in the unaudited condensed consolidated balance sheet (in thousands):


Assets
Current assets:
Cash and cash equivalents	$	107
Accounts receivable, net of allowance for credit losses		136,875
Inventories		3,294
Prepaid expenses and other current assets		2,717
Total current assets held for sale		142,993
Property and equipment, net of accumulated depreciation of $104,314		83,465
Goodwill		307,640
Intangible assets, net of accumulated amortization		216,192
Operating lease right-of-use assets, net		129,005
Other assets		2,894
Total assets held for sale	$	882,189
Liabilities
Current liabilities:
Trade accounts payable	$	25,081
Accrued expenses		59,038
Current portion of obligations under operating leases		32,749
Current portion of obligations under financing leases		7,691
Total current liabilities held for sale		124,559
Obligations under operating leases, net of current portion		57,771
Obligations under financing leases, net of current portion		12,766
Deferred income taxes, net		390
Long-term liabilities		508
Total liabilities held for sale	$	195,994

The following table presents the significant non-cash items and purchases of property and equipment for the discontinued operations that are included in the accompanying unaudited condensed consolidated statements of cash flows (in thousands):


	For the Three Months Ended
	March 31,
	2026			2025
Cash flows from operating activities of discontinued operations:
Depreciation and amortization	$	—		$	1,329
Share-based compensation		(9,301	)		3,207
Gain on sale of discontinued operations		(103,412	)		—

Cash flows used in investing activities of discontinued operations:
Purchases of property and equipment		3,088			3,044