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. The transaction is expected to close in the first fiscal quarter of 2026, subject to receipt of customary regulatory approvals and satisfaction of other closing conditions.

The Company has determined the divestiture of the Community Living business represents a strategic shift that will have a major effect on its business and has 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 related assets and liabilities of the Community Living business are classified as assets and liabilities held for sale in the accompanying unaudited condensed consolidated balance sheet as of September 30, 2025, and the results of operations from the Community Living business are classified as discontinued operations in the unaudited condensed consolidated statements of operations. Applicable amounts in prior years have been recast to conform to this discontinued operations presentation. 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 will enter into a transition services agreement 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. Transition services will 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 September 30, 2025. The following table presents the financial results of the Community Living business (in thousands):


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Services revenue	$	314,605	$	305,594	$	921,394	$	888,422
Cost of services		212,251		220,574		628,048		649,645
Gross profit		102,354		85,020		293,346		238,777
Selling, general, and administrative expenses		70,940		57,277		195,423		163,871
Operating income of discontinued operations		31,414		27,743		97,923		74,906
Interest expense, net		7,404		9,447		22,901		29,154
Income of discontinued operations before incomes taxes		24,010		18,296		75,022		45,752
Income tax expense of discontinued operations		6,257		1,605		18,474		8,464
Income from discontinued operations, net of income taxes	$	17,753	$	16,691	$	56,548	$	37,288

The following table presents the aggregate carrying amounts of assets and liabilities held for sale for the Community Living business in the unaudited condensed consolidated balance sheets (in thousands):


	September 30, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	956	$	299
Accounts receivable, net of allowance for credit losses		129,707		125,872
Inventories		3,652		4,007
Prepaid expenses and other current assets		3,112		1,269
Total current assets held for sale		137,427		131,447
Property and equipment, net of accumulated depreciation of $104,774 and $110,417 at September 30, 2025 and December 31, 2024, respectively		78,145		69,715
Goodwill		307,640		307,640
Intangible assets, net of accumulated amortization		216,192		216,258
Operating lease right-of-use assets, net		121,676		88,717
Deferred income taxes, net		287		287
Other assets		2,479		5,343
Total assets held for sale	$	863,846	$	819,407
Liabilities
Current liabilities:
Trade accounts payable	$	20,860	$	17,366
Accrued expenses		61,296		60,791
Current portion of obligations under operating leases		33,095		30,755
Current portion of obligations under financing leases		7,716		8,651
Total current liabilities held for sale		122,967		117,563
Obligations under operating leases, net of current portion		60,056		58,147
Obligations under financing leases, net of current portion		13,068		18,461
Long-term liabilities		522		569
Total liabilities held for sale	$	196,613	$	194,740

In accordance with ASC 205-20, all assets and liabilities held for sale are reported as current at September 30, 2025 as the Community Living transaction is expected to close within one-year of the balance sheet date. The presentation of assets and liabilities held for sale at December 31, 2024 are reported as current and noncurrent, consistent with the conclusion in the period, as the transaction did not meet the requirements of held for sale at that point in time.

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 Nine Months Ended
	September 30,
	2025		2024
Cash flows from discontinued operations operating activities:
Depreciation and amortization	$	1,329	$	30,132
Share-based compensation		9,578		5,402
Impairment of long-lived assets		—		3,020

Cash flows from discontinued operations investing activities:
Purchases of property and equipment		8,755		7,708