2021 Q4 Form 10-Q Financial Statement

#000094539421000049 Filed on November 04, 2021

View on sec.gov

Income Statement

Concept 2021 Q4 2021 Q3 2020 Q3
Revenue $421.4M $437.1M $296.5M
YoY Change 56.06% 47.42% -50.57%
Cost Of Revenue $287.0M $285.2M $174.8M
YoY Change 39.98% 63.18% -53.74%
Gross Profit $134.4M $151.9M $121.7M
YoY Change 106.78% 24.79% -45.15%
Gross Profit Margin 31.9% 34.74% 41.05%
Selling, General & Admin $12.60M $14.23M $12.30M
YoY Change -3.08% 15.7% -1.6%
% of Gross Profit 9.37% 9.37% 10.11%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $115.8M $124.2M $122.2M
YoY Change -4.57% 1.6% 18.46%
% of Gross Profit 86.12% 81.76% 100.41%
Operating Expenses $132.3M $142.8M $138.3M
YoY Change -4.58% 3.28% 17.9%
Operating Profit $2.151M $9.035M -$16.60M
YoY Change -102.92% -154.43% -115.87%
Interest Expense -$90.15M $92.46M $80.53M
YoY Change 33.95% 14.81% 53.76%
% of Operating Profit -4190.93% 1023.33%
Other Income/Expense, Net
YoY Change
Pretax Income -$199.7M -$61.93M -$101.6M
YoY Change 51.78% -39.03% -351.05%
Income Tax -$1.950M -$55.00K -$296.0K
% Of Pretax Income
Net Earnings -$198.8M -$59.71M -$102.6M
YoY Change 44.36% -41.82% -356.13%
Net Earnings / Revenue -47.18% -13.66% -34.62%
Basic Earnings Per Share -$0.36 -$0.62
Diluted Earnings Per Share -$1.207M -$0.36 -$0.62
COMMON SHARES
Basic Shares Outstanding 165.1M shares 164.6M shares 164.4M shares
Diluted Shares Outstanding 164.6M shares 164.4M shares

Balance Sheet

Concept 2021 Q4 2021 Q3 2020 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $944.0M $912.5M $47.80M
YoY Change 1187.92% 1809.06% 181.18%
Cash & Equivalents $944.0M $912.5M $47.85M
Short-Term Investments
Other Short-Term Assets
YoY Change
Inventory
Prepaid Expenses
Receivables $48.17M $46.66M $58.60M
Other Receivables $26.88M $25.17M $13.40M
Total Short-Term Assets $1.019B $984.4M $119.8M
YoY Change 602.34% 721.67% 33.71%
LONG-TERM ASSETS
Property, Plant & Equipment $6.944B $7.628B $7.863B
YoY Change -11.9% -2.99% -4.27%
Goodwill
YoY Change
Intangibles $283.2M
YoY Change -13.07%
Long-Term Investments $62.69M $25.44M $43.10M
YoY Change 70.81% -40.97%
Other Assets $518.9M $5.364M $229.3M
YoY Change 1536.89% -97.66% -65.18%
Total Long-Term Assets $8.134B $8.350B $8.677B
YoY Change -4.78% -3.76% -7.95%
TOTAL ASSETS
Total Short-Term Assets $1.019B $984.4M $119.8M
Total Long-Term Assets $8.134B $8.350B $8.677B
Total Assets $9.153B $9.335B $8.797B
YoY Change 5.36% 6.12% -7.55%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $455.0M $441.3M $342.1M
YoY Change 21.14% 29.0% 9.96%
Accrued Expenses
YoY Change
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $455.0M $441.3M $342.4M
YoY Change 21.04% 28.88% -21.09%
LONG-TERM LIABILITIES
Long-Term Debt $7.143B $7.140B $6.212B
YoY Change 15.05% 14.93% -4.02%
Other Long-Term Liabilities
YoY Change
Total Long-Term Liabilities $7.143B $7.140B $6.212B
YoY Change 15.05% 14.93% -4.02%
TOTAL LIABILITIES
Total Short-Term Liabilities $455.0M $441.3M $342.4M
Total Long-Term Liabilities $7.143B $7.140B $6.212B
Total Liabilities $7.598B $7.581B $6.555B
YoY Change 15.39% 15.66% -5.1%
SHAREHOLDERS EQUITY
Retained Earnings $2.636B $2.834B $3.318B
YoY Change -17.12% -14.57% -5.38%
Common Stock $1.651M $1.651M $1.648M
YoY Change 0.18% 0.18% 0.12%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $1.555B $1.754B $2.242B
YoY Change
Total Liabilities & Shareholders Equity $9.153B $9.335B $8.797B
YoY Change 5.36% 6.12% -7.55%

Cashflow Statement

Concept 2021 Q4 2021 Q3 2020 Q3
OPERATING ACTIVITIES
Net Income -$198.8M -$59.71M -$102.6M
YoY Change 44.36% -41.82% -356.13%
Depreciation, Depletion And Amortization $115.8M $124.2M $122.2M
YoY Change -4.57% 1.6% 18.46%
Cash From Operating Activities $48.90M $22.21M $16.70M
YoY Change -275.28% 32.98% -91.33%
INVESTING ACTIVITIES
Capital Expenditures -$30.74M -$22.05M -$8.800M
YoY Change 111.98% 150.51% -99.65%
Acquisitions
YoY Change
Other Investing Activities $16.78M -$89.00K -$16.00M
YoY Change -73.02% -99.44% -126.76%
Cash From Investing Activities -$13.96M -$22.13M -$24.70M
YoY Change -129.26% -10.39% -99.0%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -1.715M -2.510M 44.10M
YoY Change -88.01% -105.69% -98.07%
NET CHANGE
Cash From Operating Activities 48.90M 22.21M 16.70M
Cash From Investing Activities -13.96M -22.13M -24.70M
Cash From Financing Activities -1.715M -2.510M 44.10M
Net Change In Cash 33.23M -2.436M 36.10M
YoY Change 504.16% -106.75% 111.11%
FREE CASH FLOW
Cash From Operating Activities $48.90M $22.21M $16.70M
Capital Expenditures -$30.74M -$22.05M -$8.800M
Free Cash Flow $79.64M $44.25M $25.50M
YoY Change -694.32% 73.54% -99.06%

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us-gaap Asset Impairment Charges
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us-gaap Deferred Income Tax Expense Benefit
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15650000 USD
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1002000 USD
us-gaap Net Cash Provided By Used In Operating Activities
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svc Property Managers Purchases With Restricted Cash
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us-gaap Proceeds From Equity Method Investment Dividends Or Distributions Return Of Capital
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286000 USD
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us-gaap Net Cash Provided By Used In Investing Activities
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us-gaap Repayments Of Senior Debt
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us-gaap Proceeds From Lines Of Credit
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us-gaap Payments Of Financing Costs
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us-gaap Capital Expenditures Incurred But Not Yet Paid
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us-gaap Noncash Or Part Noncash Acquisition Investments Acquired1
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42000000 USD
CY2021Q3 svc Ownership Percentage Held In Subsidiary
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1
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The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in our condensed consolidated financial statements include the allowance for credit losses, purchase price allocations, useful lives of fixed assets, impairment of real estate and related intangibles.
CY2021Q3 us-gaap Straight Line Rent Adjustments
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905000 USD
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2370000 USD
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3087000 USD
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298000 USD
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25172000 USD
CY2020Q4 svc Straight Line Rent Receivables
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6 agreement
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us-gaap Common Stock Dividends Per Share Cash Paid
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us-gaap Dividends Common Stock Cash
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us-gaap Nature Of Operations
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<div style="margin-bottom:10pt;margin-top:10pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%;text-decoration:underline">Note 8. Business and Property Management Agreements with RMR LLC</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%;text-decoration:underline"> </span></div><div style="margin-bottom:10pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We have no employees. The personnel and various services we require to operate our business are provided to us by RMR LLC. We have two agreements with RMR LLC to provide management services to us: (1) a business management agreement, which relates to our business generally, and (2) a property management agreement, which relates to our property level operations of our net lease portfolio, excluding properties leased to TA, the office building component of one of our hotels and to major renovation or repositioning activities at our hotels.</span></div><div style="margin-bottom:10pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We recognized net business management fees payable to RMR LLC of $10,794 and $8,641 for the three months ended September 30, 2021 and 2020, respectively, and $31,836 and $27,613 for the nine months ended September 30, 2021 and 2020, respectively. Based on our common share total return, as defined in our business management agreement, as of each of September 30, 2021 and 2020, no incentive fees are included in the net business management fees we recognized for the three or nine months ended September 30, 2021 or 2020. The actual amount of annual incentive fees for 2021, if any, will be based on our common share total return, as defined in our business management agreement, for the three-year period ending December 31, 2021, and will be payable in January 2022. We did not incur an incentive fee payable to RMR LLC for the year ended December 31, 2020. We include business management fee amounts in general and administrative expenses in our condensed consolidated statements of comprehensive income (loss). </span></div><div style="margin-bottom:10pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We and RMR LLC amended our business management agreement effective August 1, 2021 to replace the benchmark index used in the calculation of incentive management fees. Pursuant to the amendment, for periods beginning on and after August 1, 2021, the MSCI U.S. REIT/Hotel &amp; Resort REIT Index will replace the discontinued SNL U.S. REIT Hotel Index and be used to calculate benchmark returns per share for purposes of determining any incentive management fee payable by us to RMR LLC. For periods prior to August 1, 2021, the SNL U.S. REIT Hotel Index will continue to be used. Accordingly, the </span></div><div style="margin-bottom:10pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">calculation of incentive management fees for the next three measurement periods will continue to use the SNL U.S. REIT Hotel Index in calculating the benchmark returns for periods through July 31, 2021. This change of index was due to S&amp;P Global, Inc. ceasing to publish the SNL U.S. REIT Hotel Index.</span></div><div style="margin-bottom:10pt;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We recognized property management and construction supervision fees payable to RMR LLC of $1,384 and $781 for the three months ended September 30, 2021 and 2020, respectively, and $3,267 and $2,722 for the nine months ended September 30, 2021 and 2020, respectively. Of those amounts, for the three months ended September 30, 2021 and 2020, $1,002 and $781, respectively, of property management fees were expensed to other operating expenses in our condensed consolidated statements of comprehensive income (loss) and $382 of construction and supervision fees were capitalized for the three months ended September 30, 2021. For the nine months ended September 30, 2021 and 2020, $2,683 and $2,710, respectively, of property management fees were expensed to other operating expenses in our condensed consolidated statements of comprehensive income (loss) and $584 and $12, respectively, of construction and supervision fees were capitalized. The amounts capitalized are included in building, improvements and equipment in our condensed consolidated balance sheets and are being depreciated over the estimated useful lives of the related capital assets. </span></div><div style="text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We are generally responsible for all our operating expenses, including certain expenses incurred or arranged by RMR LLC on our behalf. We are generally not responsible for payment of RMR LLC’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR LLC employees assigned to work exclusively or partly at our net lease properties, our share of the wages, benefits and other related costs of RMR LLC's centralized accounting personnel, our share of RMR LLC’s costs for providing our internal audit function, and as otherwise agreed. We reimbursed RMR LLC $679 and $258 for these expenses and costs for the three months ended September 30, 2021 and 2020, respectively, and $2,016 and $525 for the nine months ended September 30, 2021 and 2020, respectively. We included these amounts in other operating expenses and selling, general and administrative expenses, as applicable, in our condensed consolidated statements of comprehensive income (loss).</span></div><div style="text-indent:18pt"><span><br/></span></div><div style="text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On June 22, 2021, we and RMR LLC amended our property management agreement to, among other things, provide for RMR LLC's oversight of any major capital projects and repositioning activities at our hotels, including our hotels that are managed by Sonesta, as we may request from time to time. RMR LLC will receive the same fee previously paid to Sonesta for these services, which is equal to 3% of the cost of any such major capital project or repositioning activity.</span></div>
CY2021Q3 dei Entity Number Of Employees
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0 employee
CY2021Q3 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
-55000 USD
CY2021Q3 us-gaap Current Foreign Tax Expense Benefit
CurrentForeignTaxExpenseBenefit
-139000 USD
CY2021Q3 us-gaap Current State And Local Tax Expense Benefit
CurrentStateAndLocalTaxExpenseBenefit
-194000 USD
CY2020Q3 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
-296000 USD
CY2020Q3 us-gaap Current Foreign Tax Expense Benefit
CurrentForeignTaxExpenseBenefit
-123000 USD
CY2020Q3 us-gaap Current State And Local Tax Expense Benefit
CurrentStateAndLocalTaxExpenseBenefit
-173000 USD
us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
1009000 USD
us-gaap Current Foreign Tax Expense Benefit
CurrentForeignTaxExpenseBenefit
309000 USD
us-gaap Current State And Local Tax Expense Benefit
CurrentStateAndLocalTaxExpenseBenefit
699000 USD
us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
16706000 USD
us-gaap Current Foreign Tax Expense Benefit
CurrentForeignTaxExpenseBenefit
379000 USD
us-gaap Current State And Local Tax Expense Benefit
CurrentStateAndLocalTaxExpenseBenefit
677000 USD
CY2020Q3 svc Deferred Tax Liabilities Litigation Settlement
DeferredTaxLiabilitiesLitigationSettlement
15650000 USD
us-gaap Number Of Reportable Segments
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2 segment
CY2021Q3 us-gaap Revenue From Contract With Customer Excluding Assessed Tax
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338375000 USD
CY2021Q3 us-gaap Operating Lease Lease Income Lease Payments
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98724000 USD
CY2021Q3 us-gaap Revenues
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437099000 USD
CY2021Q3 us-gaap Cost Of Goods And Service Excluding Depreciation Depletion And Amortization
CostOfGoodsAndServiceExcludingDepreciationDepletionAndAmortization
285233000 USD
CY2021Q3 us-gaap Other Cost And Expense Operating
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4437000 USD
CY2021Q3 us-gaap Depreciation Depletion And Amortization
DepreciationDepletionAndAmortization
124163000 USD
CY2021Q3 us-gaap General And Administrative Expense
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14231000 USD
CY2021Q3 us-gaap Business Combination Acquisition Related Costs
BusinessCombinationAcquisitionRelatedCosts
3149000 USD
CY2021Q3 us-gaap Asset Impairment Charges
AssetImpairmentCharges
0 USD
CY2021Q3 us-gaap Costs And Expenses
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431213000 USD
CY2021Q3 us-gaap Gain Loss On Sale Of Properties
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94000 USD
CY2021Q3 us-gaap Equity Securities Fv Ni Unrealized Gain Loss
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24348000 USD
CY2021Q3 us-gaap Interest And Other Income
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203000 USD
CY2021Q3 us-gaap Interest Expense
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92458000 USD
CY2021Q3 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
-61927000 USD
CY2021Q3 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
-55000 USD
CY2021Q3 us-gaap Income Loss From Equity Method Investments
IncomeLossFromEquityMethodInvestments
2158000 USD
CY2021Q3 us-gaap Net Income Loss
NetIncomeLoss
-59714000 USD
us-gaap Revenue From Contract With Customer Excluding Assessed Tax
RevenueFromContractWithCustomerExcludingAssessedTax
787463000 USD
us-gaap Operating Lease Lease Income Lease Payments
OperatingLeaseLeaseIncomeLeasePayments
286742000 USD
us-gaap Revenues
Revenues
1074205000 USD
us-gaap Cost Of Goods And Service Excluding Depreciation Depletion And Amortization
CostOfGoodsAndServiceExcludingDepreciationDepletionAndAmortization
723769000 USD
us-gaap Other Cost And Expense Operating
OtherCostAndExpenseOperating
11758000 USD
us-gaap Depreciation Depletion And Amortization
DepreciationDepletionAndAmortization
370208000 USD
us-gaap General And Administrative Expense
GeneralAndAdministrativeExpense
40840000 USD
us-gaap Business Combination Acquisition Related Costs
BusinessCombinationAcquisitionRelatedCosts
28934000 USD
us-gaap Asset Impairment Charges
AssetImpairmentCharges
2110000 USD
us-gaap Costs And Expenses
CostsAndExpenses
1177619000 USD
us-gaap Gain Loss On Sale Of Properties
GainLossOnSaleOfProperties
10934000 USD
us-gaap Equity Securities Fv Ni Unrealized Gain Loss
EquitySecuritiesFvNiUnrealizedGainLoss
20367000 USD
us-gaap Interest And Other Income
InterestAndOtherIncome
485000 USD
us-gaap Interest Expense
InterestExpense
273227000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
-344855000 USD
us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
1009000 USD
us-gaap Income Loss From Equity Method Investments
IncomeLossFromEquityMethodInvestments
50000 USD
us-gaap Net Income Loss
NetIncomeLoss
-345814000 USD
CY2021Q3 us-gaap Assets
Assets
9334831000 USD
CY2020Q3 us-gaap Revenue From Contract With Customer Excluding Assessed Tax
RevenueFromContractWithCustomerExcludingAssessedTax
199719000 USD
CY2020Q3 us-gaap Operating Lease Lease Income Lease Payments
OperatingLeaseLeaseIncomeLeasePayments
96776000 USD
CY2020Q3 us-gaap Revenues
Revenues
296495000 USD
CY2020Q3 us-gaap Cost Of Goods And Service Excluding Depreciation Depletion And Amortization
CostOfGoodsAndServiceExcludingDepreciationDepletionAndAmortization
174801000 USD
CY2020Q3 us-gaap Other Cost And Expense Operating
OtherCostAndExpenseOperating
3705000 USD
CY2020Q3 us-gaap Depreciation Depletion And Amortization
DepreciationDepletionAndAmortization
122204000 USD
CY2020Q3 us-gaap General And Administrative Expense
GeneralAndAdministrativeExpense
12295000 USD
CY2020Q3 us-gaap Asset Impairment Charges
AssetImpairmentCharges
10248000 USD
CY2020Q3 us-gaap Costs And Expenses
CostsAndExpenses
323253000 USD
CY2020Q3 us-gaap Gain Loss On Sale Of Properties
GainLossOnSaleOfProperties
109000 USD
CY2020Q3 us-gaap Equity Securities Fv Ni Unrealized Gain Loss
EquitySecuritiesFvNiUnrealizedGainLoss
5606000 USD
CY2020Q3 us-gaap Interest And Other Income
InterestAndOtherIncome
6000 USD
us-gaap Interest And Other Income
InterestAndOtherIncome
283000 USD
us-gaap Interest Expense
InterestExpense
223679000 USD
us-gaap Gains Losses On Extinguishment Of Debt
GainsLossesOnExtinguishmentOfDebt
-6970000 USD
CY2020Q3 us-gaap Interest Expense
InterestExpense
80532000 USD
CY2020Q3 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
-101569000 USD
CY2020Q3 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
-296000 USD
CY2020Q3 us-gaap Income Loss From Equity Method Investments
IncomeLossFromEquityMethodInvestments
-1369000 USD
CY2020Q3 us-gaap Net Income Loss
NetIncomeLoss
-102642000 USD
us-gaap Revenue From Contract With Customer Excluding Assessed Tax
RevenueFromContractWithCustomerExcludingAssessedTax
700578000 USD
us-gaap Operating Lease Lease Income Lease Payments
OperatingLeaseLeaseIncomeLeasePayments
294633000 USD
us-gaap Revenues
Revenues
995211000 USD
us-gaap Cost Of Goods And Service Excluding Depreciation Depletion And Amortization
CostOfGoodsAndServiceExcludingDepreciationDepletionAndAmortization
492906000 USD
us-gaap Other Cost And Expense Operating
OtherCostAndExpenseOperating
11029000 USD
us-gaap Depreciation Depletion And Amortization
DepreciationDepletionAndAmortization
377557000 USD
us-gaap General And Administrative Expense
GeneralAndAdministrativeExpense
37621000 USD
us-gaap Asset Impairment Charges
AssetImpairmentCharges
55502000 USD
us-gaap Costs And Expenses
CostsAndExpenses
974615000 USD
us-gaap Gain Loss On Sale Of Properties
GainLossOnSaleOfProperties
-9655000 USD
us-gaap Gain Loss Related To Litigation Settlement
GainLossRelatedToLitigationSettlement
62386000 USD
us-gaap Equity Securities Fv Ni Unrealized Gain Loss
EquitySecuritiesFvNiUnrealizedGainLoss
4409000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
-152630000 USD
us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
16706000 USD
us-gaap Income Loss From Equity Method Investments
IncomeLossFromEquityMethodInvestments
-4305000 USD
us-gaap Net Income Loss
NetIncomeLoss
-173641000 USD
CY2020Q4 us-gaap Assets
Assets
8687319000 USD
CY2020Q4 svc Number Of Real Estate Properties To Be Sold Or Rebranded
NumberOfRealEstatePropertiesToBeSoldOrRebranded
5 property

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