Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November ~~6, 2017,~~1, 2021, there were ~~180,680,911~~122,572,462 shares of the registrant's $0.01 par value common stock outstanding.

(In thousands, except per share amounts)

September 30, 2017

December 31, 2016

ASSETS

Current assets:

Cash and cash equivalents

$
104,301

$
95,607

Restricted cash

5,123

1,003

Accounts receivable, net of allowance of $36,030 and $32,670 as of
   September 30, 2017 and December 31, 2016, respectively

442,872

405,172

Prepaid expenses and other current assets

115,701

102,551

Total current assets

667,997

604,333

Available for sale marketable securities

0

149,100

Fixed assets, net

165,434

148,810

Software development costs, net

207,055

163,879

Intangible assets, net

717,233

741,403

Goodwill

1,971,950

1,924,052

Deferred taxes, net

4,234

2,791

Other assets

149,485

97,791

Total assets

$
3,883,388

$
3,832,159

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$
114,291

$
126,144

Accrued expenses

71,820

86,135

Accrued compensation and benefits

70,037

64,291

Deferred revenue

392,462

363,772

Current maturities of long-term debt

24,550

15,158

Current maturities of non-recourse long-term debt - Netsmart

2,749

2,451

Current maturities of capital lease obligations

8,517

9,126

Total current liabilities

684,426

667,077

Long-term debt

747,441

717,853

Non-recourse long-term debt - Netsmart

625,513

576,918

Long-term capital lease obligations

7,708

9,877

Deferred revenue

19,319

18,009

Deferred taxes, net

145,432

141,752

Other liabilities

86,474

39,787

Total liabilities

2,316,313

2,171,273

Redeemable convertible non-controlling interest - Netsmart

420,572

387,685

Commitments and contingencies

Stockholders’ equity:

Preferred stock: $0.01 par value, 1,000 shares authorized,
   no shares issued and outstanding as of September 30, 2017 and December 31, 2016

0

0

Common stock: $0.01 par value, 349,000 shares authorized as of September 30, 2017
   and December 31, 2016; 269,154 and 180,650 shares issued and outstanding as of
  September 30, 2017, respectively; 267,997 and 180,510 shares issued and outstanding
   as of December 31, 2016, respectively

2,692

2,680

Treasury stock: at cost, 88,504 and 87,487 shares as of September 30, 2017 and
   December 31, 2016, respectively

(322,735
)

(310,993
)
Additional paid-in capital

1,782,432

1,789,959

Accumulated deficit

(354,928
)

(187,351
)
Accumulated other comprehensive loss

(2,067
)

(61,829
)
Total Allscripts Healthcare Solutions, Inc.'s stockholders' equity

1,105,394

1,232,466

Non-controlling interest

41,109

40,735

Total stockholders’ equity

1,146,503

1,273,201

Total liabilities and stockholders’ equity

$
3,883,388

$
3,832,159

(In thousands, except per share amounts)	September 30, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	214,179	$	531,104
Restricted cash		2,141		6,361
Accounts receivable, net of allowance of $30,022 and $31,596 as of September 30, 2021 and December 31, 2020, respectively		340,924		347,355
Contract assets, net of allowance of $1,068 as of September 30, 2021 and December 31, 2020		123,244		106,717
Income tax receivable		0		25,421
Prepaid expenses and other current assets		124,473		136,264
Total current assets		804,961		1,153,222
Fixed assets, net		53,667		72,162
Software development costs, net		176,721		193,202
Intangible assets, net		248,408		286,602
Goodwill		974,427		974,729
Deferred taxes, net		6,118		5,790
Contract assets - long-term, net of allowance of $4,273 as of September 30, 2021 and December 31, 2020		51,119		43,682
Right-of-use assets - operating leases		70,297		96,601
Other assets		98,588		91,628
Total assets	$	2,484,306	$	2,917,618

The accompanying notes are an integral part of these consolidated financial statements.

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share amounts)	2021			2020			2021			2020
Revenue:
Software delivery, support and maintenance	$	222,726		$	219,850		$	670,840		$	680,124
Client services		146,546			145,768			440,498			436,162
Total revenue		369,272			365,618			1,111,338			1,116,286
Cost of revenue:
Software delivery, support and maintenance		68,462			72,411			208,496			216,625
Client services		122,142			127,361			362,826			406,752
Amortization of software development and acquisition-related assets		29,894			30,708			89,444			88,237
Total cost of revenue		220,498			230,480			660,766			711,614
Gross profit		148,774			135,138			450,572			404,672
Selling, general and administrative expenses		78,794			93,442			239,592			296,164
Research and development		45,540			46,352			145,932			151,774		��
Asset impairment charges		6,519			210			11,763			210
Amortization of intangible and acquisition-related assets		5,817			6,295			17,466			19,326
Income (loss) from operations		12,104			(11,161	)		35,819			(62,802	)
Interest expense		(3,617	)		(6,667	)		(9,709	)		(27,646	)
Other income, net		4,700			398			22,494			45
Gain on sale of businesses, net		8,363			0			8,363			0
Impairment of long-term investments		0			(1,025	)		0			(1,575	)
Equity in net (loss) income of unconsolidated investments		(257	)		383			(321	)		17,417
Income (loss) from continuing operations before income taxes		21,293			(18,072	)		56,646			(74,561	)
Income tax (provision) benefit		(5,099	)		4,116			(9,954	)		6,641
Income (loss) from continuing operations, net of tax		16,194			(13,956	)		46,692			(67,920	)
(Loss) income from discontinued operations		(14	)		19,545			(7	)		54,601
Gain on sale of discontinued operations		0			0			647			0
Income tax effect on discontinued operations		0			(5,047	)		(169	)		(14,098	)
(Loss) income from discontinued operations, net of tax		(14	)		14,498			471			40,503
Net income (loss)	$	16,180		$	542		$	47,163		$	(27,417	)

Net income (loss) per share:
Basic
Continuing operations	$	0.13		$	(0.09	)	$	0.35		$	(0.42	)
Discontinued operations		0.00			0.09			0.00			0.25
Net income (loss) per share - Basic	$	0.13		$	0.00		$	0.35		$	(0.17	)

Diluted
Continuing operations	$	0.12		$	(0.09	)	$	0.33		$	(0.42	)
Discontinued operations		0.00			0.09			0.00			0.25
Net income (loss) per share - Diluted	$	0.12		$	0.00		$	0.33		$	(0.17	)

Three Months Ended
September 30,

Nine Months Ended
September 30,

(In thousands, except per share amounts)

2017

2016

2017

2016

Revenue:

Software delivery, support and maintenance

$
294,221

$
252,692

$
845,951

$
731,721

Client services

155,221

139,692

443,057

392,742

Total revenue

449,442

392,384

1,289,008

1,124,463

Cost of revenue:

Software delivery, support and maintenance

86,893

86,537

259,361

240,860

Client services

132,629

116,415

379,797

335,957

Amortization of software development and acquisition-related assets

28,001

23,273

81,788

62,905

Total cost of revenue

247,523

226,225

720,946

639,722

Gross profit

201,919

166,159

568,062

484,741

Selling, general and administrative expenses

117,352

98,778

340,234

277,733

Research and development

51,057

45,142

146,748

140,070

Asset impairment charges

0

0

0

4,650

Amortization of intangible and acquisition-related assets

8,137

5,365

23,340

14,944

Income from operations

25,373

16,874

57,740

47,344

Interest expense

(22,252
)

(19,367
)

(62,722
)

(42,757
)
Other (loss) income, net

(570
)

(6
)

(545
)

466

Impairment of and losses on long-term investments

(20,700
)

0

(165,290
)

0

Equity in net income (loss) of unconsolidated investments

449

0

706

(7,501
)
(Loss) income before income taxes

(17,700
)

(2,499
)

(170,111
)

(2,448
)
Income tax benefit (provision)

238

2,656

1,073

2,596

Net (loss) income

(17,462
)

157

(169,038
)

148

Less: Net income attributable to non-controlling interests

(163
)

(151
)

(352
)

(142
)
Less: Accretion of redemption preference on redeemable
   convertible non-controlling interest - Netsmart

(10,962
)

(10,191
)

(32,887
)

(18,344
)
Net loss attributable to Allscripts Healthcare
   Solutions, Inc. stockholders

$
(28,587
)

$
(10,185
)

$
(202,277
)

$
(18,338
)
Loss per share - basic attributable to Allscripts
   Healthcare Solutions, Inc. stockholders

$
(0.16
)

$
(0.06
)

$
(1.12
)

$
(0.10
)
Loss per share - diluted attributable to Allscripts
   Healthcare Solutions, Inc. stockholders

$
(0.16
)

$
(0.06
)

$
(1.12
)

$
(0.10
)

The accompanying notes are an integral part of these consolidated financial statements.

~~The accompanying notes are an integral part of these consolidated financial statements.~~

Nine Months Ended September 30,

(In thousands)

2017

2016

Cash flows from operating activities:

Net (loss) income

$
(169,038
)

$
148

Adjustments to reconcile net loss to net cash provided by operating
activities:

Depreciation and amortization

155,108

120,473

Stock-based compensation expense

28,140

29,717

Excess tax benefits from stock-based compensation

0

(972
)
Deferred taxes

(5,324
)

(4,198
)
Asset impairment charges

0

4,650

Impairment of and losses on long-term investments

165,290

0

Equity in net (income) loss of unconsolidated investments

(706
)

7,501

Other losses, net

3,711

2,057

Changes in operating assets and liabilities (net of businesses acquired):

Accounts receivable, net

(31,256
)

(12,723
)
Prepaid expenses and other assets

(6,939
)

3,381

Accounts payable

2,908

26,341

Accrued expenses

(6,196
)

(8,843
)
Accrued compensation and benefits

5,930

(12,933
)
Deferred revenue

18,661

30,587

Other liabilities

12,894

(28
)
Net cash provided by operating activities

173,183

185,158

Cash flows from investing activities:

Capital expenditures

(40,216
)

(25,046
)
Capitalized software

(107,079
)

(69,994
)
Cash paid for business acquisitions, net of cash acquired

(54,308
)

(935,280
)
Purchases of equity securities, other investments and related
intangible assets

(5,423
)

(20,685
)
Other proceeds from investing activities

215

37

Net cash used in investing activities

(206,811
)

(1,050,968
)
Cash flows from financing activities:

Proceeds from sale or issuance of common stock

0

84

Proceeds from issuance of redeemable convertible preferred stock - Netsmart

0

333,606

Excess tax benefits from stock-based compensation

0

972

Taxes paid related to net share settlement of equity awards

(6,777
)

(7,379
)
Payments of capital lease obligations

(9,013
)

(3,858
)
Credit facility payments

(115,281
)

(80,507
)
Credit facility borrowings, net of issuance costs

189,698

654,135

Repurchase of common stock

(12,077
)

(71,082
)
Payment of acquisition financing obligations

(2,398
)

0

Proceeds from sales of subsidiary shares to non-controlling interest

1,494

0

Net cash provided by financing activities

45,646

825,971

Effect of exchange rate changes on cash and cash equivalents

796

217

Net increase (decrease) in cash and cash equivalents

12,814

(39,622
)
Cash, cash equivalents and restricted cash, beginning of period

96,610

116,873

Cash, cash equivalents and restricted cash, end of period

$
109,424

$
77,251

The accompanying notes are an integral part of these consolidated financial statements.

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2021			2020			2021			2020
Number of common shares
Balance at beginning of period		276,668			274,463			274,558			272,609
Common stock issued under stock compensation plans, net of shares withheld for employee taxes		29			8			2,139			1,862
Balance at end of period		276,697			274,471			276,697			274,471
Common stock
Balance at beginning of period	$	2,766		$	2,743		$	2,745		$	2,725
Common stock issued under stock compensation plans, net of shares withheld for employee taxes		0			1			21			19
Balance at end of period	$	2,766		$	2,744		$	2,766		$	2,744
Number of treasury stock shares
Balance at beginning of period		(151,657	)		(111,493	)		(134,616	)		(110,134	)
Issuance of treasury stock		0			0			33			90
Purchase of treasury stock		0			(5,000	)		(6,397	)		(6,449	)
Accelerated share repurchase program		(2,469	)		0			(13,146	)		0
Balance at end of period		(154,126	)		(116,493	)		(154,126	)		(116,493	)
Treasury stock
Balance at beginning of period	$	(1,174,498	)	$	(579,678	)	$	(870,558	)	$	(571,157	)
Issuance of treasury stock		0			0			465			1,193
Purchase of treasury stock		0			(45,568	)		(108,953	)		(55,282	)
Accelerated share repurchase program		(38,817	)		0			(234,269	)		0
Balance at end of period	$	(1,213,315	)	$	(625,246	)	$	(1,213,315	)	$	(625,246	)
Additional paid-in capital
Balance at beginning of period	$	1,903,542		$	1,920,645		$	1,902,776		$	1,907,348
Stock-based compensation		8,777			8,811			25,861			25,931
Common stock issued under stock compensation plans, net of shares withheld for employee taxes		(76	)		(60	)		(13,988	)		(5,604	)
Capped call transactions		0			0			0			797
Accelerated share repurchase program		38,817			0			34,269			0
Issuance of treasury stock		0			0			69			(440	)
Warrants issued		1,037			0			3,110			1,364
Balance at end of period	$	1,952,097		$	1,929,396		$	1,952,097		$	1,929,396
Retained earnings (accumulated deficit)
Balance at beginning of period	$	664,101		$	(95,248	)	$	633,118		$	(49,336	)
Net income (loss)		16,180			542			47,163			(27,417	)
ASU 2016-13 implementation adjustments		0			0			0			(17,953	)
Balance at end of period	$	680,281		$	(94,706	)	$	680,281		$	(94,706	)
Accumulated other comprehensive loss
Balance at beginning of period	$	(2,437	)	$	(5,533	)	$	(1,838	)	$	(4,392	)
Foreign currency translation adjustments, net		(805	)		983			(285	)		(611	)
Unrecognized gain (loss) on derivatives qualifying as cash flow hedges, net of tax		0			749			(1,119	)		1,202
Balance at end of period	$	(3,242	)	$	(3,801	)	$	(3,242	)	$	(3,801	)
Total Stockholders’ Equity at beginning of period	$	1,393,474		$	1,242,929		$	1,666,243		$	1,285,188
Total Stockholders’ Equity at end of period	$	1,418,587		$	1,208,387		$	1,418,587		$	1,208,387

The accompanying notes are an integral part of these consolidated financial statements.

	Nine Months Ended September 30,
(In thousands)	2021			2020
Cash flows from operating activities:
Net income (loss)	$	47,163		$	(27,417	)
Less: Income from discontinued operations		471			40,503
Income (loss) from continuing operations		46,692			(67,920	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization		132,989			146,016
Non-cash lease expense, net		(3,048	)		561
Stock-based compensation expense		25,861			25,931
Deferred taxes		(1,650	)		2,930
Impairment of assets and long-term investments		11,763			1,785
Equity in net loss (income) of unconsolidated investments		321			(17,417	)
Gain on sale of businesses, net		(8,363	)		0
Other income, net		(9,881	)		(4,423	)
Changes in operating assets and liabilities (net of businesses acquired):
Accounts receivable and contract assets, net		55			60,440
Prepaid expenses and other assets		13,086			4,232
Accounts payable		(13,671	)		(49,458	)
Accrued expenses		21,630			(3,487	)
Accrued compensation and benefits		(25,513	)		29,975
Deferred revenue		(11,862	)		(26,028	)
Other liabilities		3,614			(3,110	)
Accrued DOJ settlement		0			(88,745	)
Net cash provided by operating activities - continuing operations		182,023			11,282
Net cash (used in) provided by operating activities - discontinued operations		(322,495	)		60,623
Net cash (used in) provided by operating activities		(140,472	)		71,905
Cash flows from investing activities:
Capital expenditures		(4,551	)		(7,798	)
Capitalized software		(55,482	)		(71,337	)
Sale of businesses and other investments, net of cash divested, and distributions received		7,581			24,884
Purchases of equity securities, other investments and related intangible assets, net		(2,421	)		(3,888	)
Net cash used in investing activities - continuing operations		(54,873	)		(58,139	)
Net cash used in investing activities - discontinued operations		0			(6,793	)
Net cash used in investing activities		(54,873	)		(64,932	)
Cash flows from financing activities:
Taxes paid related to net share settlement of equity awards		(13,967	)		(5,589	)
Repayment of Convertible Senior Notes		0			(352,361	)
Credit facility payments		(50,000	)		(175,000	)
Credit facility borrowings, net of issuance costs		250,000			673,625
Repurchase of common stock		(308,953	)		(55,282	)
Payment of acquisition and other financing obligations		(2,400	)		(5,127	)
Net cash (used in) provided by financing activities		(125,320	)		80,266
Effect of exchange rate changes on cash and cash equivalents		(480	)		132
Net (decrease) increase in cash and cash equivalents		(321,145	)		87,371
Cash, cash equivalents and restricted cash, beginning of period		537,465			137,539
Cash, cash equivalents and restricted cash, end of period	$	216,320		$	224,910

The accompanying notes are an integral part of these consolidated financial statements.

The consolidated financial statements include the accounts of Allscripts Healthcare Solutions, Inc. (“Allscripts”) and its wholly-owned subsidiaries and controlled affiliates. All significant intercompany balances and transactions have been eliminated. Each of the terms “we,” “us,” “our” or the “Company” as used herein refers collectively to Allscripts Healthcare Solutions, Inc. and its wholly-owned subsidiaries and controlled affiliates, unless otherwise stated.

The unaudited interim consolidated financial statements as of and for the three and nine months ended September 30, ~~2017~~2021 and ~~2016~~2020 have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These interim consolidated financial statements are unaudited and, in the opinion of our management, include all adjustments, consisting of normal recurring adjustments and accruals, necessary to present fairly the consolidated financial statements for the periods presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The consolidated results of operations for the three and nine months ended September 30, ~~2017~~2021 are not necessarily indicative of the results to be expected for the full year ending December 31, ~~2017.~~2021.

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with the SEC's rules and regulations for interim ~~reporting, although the~~reporting. The Company believes that the disclosures made are adequate to make ~~that information not misleading. These~~these unaudited interim consolidated financial statements not misleading. They should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2020 (our “Form 10-K”).

The preparation of consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying notes. Our estimates and assumptions consider the economic implications of COVID-19 on our critical and significant accounting estimates. Actual results could differ materially from these estimates.

During the third quarter of 2021, we changed our reportable segments from Core Clinical and Financial Solutions, Data, Analytics and Care Coordination, and Unallocated to Hospital and Large Physician Practices, Veradigm, and Unallocated. Certain business units reported within the historical segments have been reallocated into the new segments. Refer to Note 16 “Business Segments” for further discussion on the impact of the change.

Certain reclassifications were made to prior period amounts in order to conform to the current period presentation. These reclassifications had no impact on the reported consolidated prior period financial results.

There have been no changes to our significant accounting policies from those disclosed in our Form 10-K.

In ~~March 2016,~~December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. ~~2016-07,~~ ~~Investments – Equity Method and Joint Ventures~~2019-12, “Income Taxes (Topic ~~323): Simplifying the Transition to the Equity Method of Accounting~~740)” (“ASU ~~2016-07”~~2019-12”)~~. The guidance in ASU 2016-07 eliminates the requirement that, when an investment qualifies for use~~, which is part of the ~~equity method as a result~~FASB’s overall simplification initiative to reduce the costs and complexity of ~~an increase~~applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 simplifies accounting guidance for intraperiod allocations, deferred tax liabilities, year-to-date losses in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had beeninterim periods, franchise taxes, step-up in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the currenttax basis of ~~the investor’s previously held interest~~goodwill, separate entity financial statements and ~~adopt the equity method~~interim recognition of accounting as of the date the investment becomes qualified for equity method accounting. The amendments also require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gaintax laws or ~~loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method.~~rate changes. ASU ~~2016-07~~2019-12 is effective for interim and annual periods beginning after December 15, 2016, and should be applied prospectively. Early application is permitted. We adopted this new guidance effective January 1, 2017 and the adoption did not have any impact on our consolidated financial statements.

~~In March 2016, the FASB issued Accounting Standards Update No. 2016-09,~~ ~~Compensation – Stock Compensation (Topic 718): Improvements to Share-Based Payment Accounting~~ (“ASU 2016-09”). The Company adopted ASU 2016-09 effective January 1, 2017, which requires that tax effects related to employee share-based payments be recorded prospectively as a component of the provision for income taxes, thus potentially increasing the volatility in our effective tax rate (see Note 9, “Income Taxes”). Additionally, we prospectively adopted the requirement to present recognized excess tax benefits related to employee share-based payments as an operating activity in the accompanying Consolidated Statements of Cash Flows. ASU 2016-09 also eliminates prospectively the requirement to consider anticipated tax windfalls and shortfalls in the calculation of assumed proceeds under the treasury stock method used for computing the dilutive effect of share-based payment awards in the calculation of diluted earnings per share. Finally, ASU 2016-09 requires the recognition of excess tax benefits related to employee share-based payments, regardless of whether the tax deduction reduces taxes payable. As part of the adoption of this requirement, we decreased the opening balance of accumulated deficit by $1.8 million to recognize excess tax benefits not previously recorded since they did not reduce taxes payable. The adoption of the remaining requirements of ASU 2016-09 did not have a material impact on our financial position or results of operation.

~~In August 2016, the FASB issued Accounting Standards Update No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~ (“ASU 2016-15”). The guidance in ASU 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues. ASU 2016-15 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. We early adopted this new guidance effective January 1, 2017 and the adoption did not have any impact on our consolidated financial statements.

~~In May 2017, the FASB issued Accounting Standards Update No. 2017-09,~~ ~~Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting~~ (“ASU 2017-09”). The guidance in ASU 2017-09 clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. ASU 2017-09 is effective prospectively for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. We early adopted this new guidance effective June 1, 2017 and the adoption did not have any impact on our consolidated financial statements.

~~In May 2014, the FASB issued Accounting Standards Update No. 2014-09,~~ ~~Revenue from Contracts with Customers: Topic 606~~ (“ASU 2014-09”), to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five-step process to achieve this principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. As issued, ASU 2014-09 was effective for uspublic business entities for annual reporting periods beginning after December 15, ~~2016, including interim periods within that reporting period. On August 12, 2015, the FASB issued~~2020. We adopted ASU 2015-14, which deferred the effective date of ASU 2014-09 by one year to annual reporting periods beginning after December 15, 2017, while also permitting companies to voluntarily adopt the new revenue standard as of the original effective date. In addition, during 2016, the FASB issued ASU 2016-08, ASU 2016-10, 2016-11, 2016-12 and 2016-20, all of which clarify certain implementation guidance within ASU 2014-09.

The new revenue recognition guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We have decided to adopt the standard effective2019-12 on January 1, ~~2018 using~~2021, and the ~~modified retrospective method.~~

Weadoption did not have completed our assessment of our systems, available data and processes that will be affected by the implementation of this new guidance. We are continuing to work towards establishing policies, updating our processes and implementing necessary changes to be able to comply with the new requirements. Through evaluation of the standard’s requirements, the Company plans to utilize several practical expedients including (i) viewing shipping and handling as a fulfillment cost versus a distinct performance obligation, and (ii) the right to invoice expedient as it relates to transaction-related revenue activities. Based on the results of our assessment to date, we anticipate this standard will have ansignificant impact ~~which could be significant,~~ on our consolidated financial statements. While we are continuing to assess all potential impacts of the standard, we currently believe the most significant impact relates to our accounting for software license revenue. We expect revenue related to hardware sales, software-as-a-service-based offerings, client services, electronic data interchange services, and managed services to remain substantially unchanged. We expect to recognize a significant portion of license revenue upfront rather than be restricted to payment amounts due under extended payment term contracts as required under the current guidance. We also expect to recognize license revenue upfront rather than over the subscription period from certain multi-year software subscription contracts that include both software licenses and software support and maintenance. Due to the complexity of certain of our license subscription contracts, the actual revenue license recognition treatment required under the new standard will be dependent on contract-specific terms, and may vary in some instances from upfront recognition.

Additionally, we currently only capitalize direct sales commissions that are specifically associated with new or renewal contracts. The new revenue recognition guidance requires the capitalization of all incremental costs of obtaining a contract with a customer that an entity expects to recover. As part of our implementation efforts, we have identified certain indirect commissions and other payments that would be eligible for capitalization under the new guidance because they are also incremental costs solely associated with new or renewal contracts that we expect to recover. As result, we expect to record a deferral for such costs, which could be significant, upon adoption of the new guidance on January 1, 2018.9

In ~~January 2017,~~August 2020, the FASB issued Accounting Standards Update No. ~~2017-01,~~ ~~Business Combinations (Topic 805)~~2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): ~~Clarifying the Definition of a Business~~Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU ~~2017-01”~~2020-06”). The amendments in ASU ~~2017-01 provides new~~2020-06 simplify the accounting ~~guidance~~for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to ~~assist an entity~~qualify for the derivative scope exceptions and also simplifies the diluted earnings per share calculation in ~~evaluating when a set of transferred assets and activities is a business.~~certain areas. The ~~guidance~~standard is effective for public business entities, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years and interim periods within those fiscal years, beginning after December 15, 2017, and should be applied prospectively to any transactions occurring within the period of adoption. Early adoption is permitted, including for interim or annual periods in which the financial statements have not been issued or made available for issuance. We are currently evaluating the impact of adopting this new guidance, including the timing of adoption.

~~In January 2017, the FASB issued Accounting Standards Update No. 2017-04,~~ ~~Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~ (“ASU 2017-04”), which provides new accounting guidance to simplify the accounting for goodwill impairment. ASU 2017-04 removes Step Two of the goodwill impairment test, which requires a hypothetical purchase price allocation. Under the new guidance, a goodwill impairment will equal the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill assigned to the reporting unit. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. ASU 2017-04 is effective for annual and interim periods in fiscal years beginning after December 15, 2019 with early adoption permitted for any goodwill impairment tests performed after January 1, 2017. The new guidance is to be applied prospectively.2021. We are currently evaluating the impact of this accounting ~~guidance, including the timing of adoption.~~

~~In August 2017, the FASB issued Accounting Standards Update No. 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities~~ (“ASU 2017-12”), which provides new accounting guidance to simplify and improve the reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. In addition to that main objective, the amendments in this Update make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted in any interim period after the issuance of this Update. We are currently evaluating the impact of this accounting guidance, including the timing of adoption.guidance.

We do not believe that any other recently issued, but not yet effective accounting standards, if adopted, ~~would~~will have a material impact on our consolidated financial statements.

~~Acquisition~~Our 2 primary revenue streams are (i) software delivery, support and maintenance and (ii) client services. Software delivery, support and maintenance revenue consists of ~~DeVero~~

~~On July 17, 2017, Netsmart (as defined below) completed~~all of our proprietary software sales (either under a perpetual or term license delivery model), subscription-based software sales, transaction-related revenue, the ~~acquisition~~resale of ~~DeVero, Inc. (“DeVero”),~~hardware and third-party software and revenue from post-contract client support and maintenance services, which include telephone support services, maintaining and upgrading software and ongoing enhanced maintenance. Client services revenue consists of revenue from managed services solutions, such as private cloud hosting, outsourcing and revenue cycle management, as well as other client services and project-based revenue from implementation, training and consulting services. For some clients, we host the software applications licensed from us using our own or third-party servers. For other clients, we offer an outsourced service in which we assume partial to total responsibility for a healthcare ~~technology company that develops electronic medical record solutions for home healthcare~~organization’s IT operations using our employees.

At September 30, 2021 and ~~hospice, for an aggregate purchase price~~December 31, 2020, we had capitalized costs to obtain or fulfill a contract of ~~$50.7~~$15.1 million and $16.8 million, respectively, in ~~cash. The purchase price was funded through incremental borrowings under Netsmart’s debt facilities. The allocation~~Prepaid and other current assets and $26.1 million and $27.9 million, respectively, in Other assets. During the three months ended September 30, 2021 and 2020, we recognized $5.0 million and $6.0 million, respectively, of ~~the aggregate consideration is as follows: $32.9 million of goodwill; $19.0 million of intangible assets~~amortization expense related to customer relationships; $6.9 million of intangible assets related to technology; $2.0 million of cash; other assets of $1.5 million; accounts payable and accrued expenses of $2.3 million; deferred revenue of $0.9 million; and deferred income taxes of $8.4 million. This allocation is preliminary and subject to changes, which could be significant, as liabilities related to deferred taxes are finalized, and additional information becomes available. The acquired intangible assets related to technology and customer relationships will be amortized over their estimated useful lives of 7-20 years using a method that approximatessuch capitalized costs. During the pattern of economic benefits to be gained by the intangible assets. The goodwill is not deductible for tax purposes. The results of operations of DeVero were not material to our consolidated results of operations for the three and nine months ended September 30, ~~2017~~.2021 and 2020, we recognized $15.7 million and $18.5 million, respectively, of amortization expense related to such capitalized costs. The amortization of these capitalized costs to obtain a contract are included in Selling, general and administrative expense within our consolidated statements of operations.

~~NantHealth Asset Purchase Agreement~~The timing of revenue recognition, billings and cash collections results in billed and unbilled accounts receivable, contract assets and customer advances and deposits. Accounts receivable, net includes both billed and unbilled amounts where the right to receive payment is unconditional and only subject to the passage of time. Contract assets include amounts where revenue recognized exceeds the amount billed to the customer and the right to payment is not solely subject to the passage of time. Deferred revenue includes advanced payments and billings in excess of revenue recognized. Our contract assets and deferred revenue are reported in a net position on an individual contract basis at the end of each reporting period. Contract assets are classified as current or long-term based on the timing of when we expect to complete the related performance obligations and bill the customer. Deferred revenue is classified as current or long-term based on the timing of when we expect to recognize revenue.

The breakdown of revenue recognized based on the origination of performance obligations and elected accounting expedients is presented in the table below:

The aggregate amount of contract transaction price related to remaining unsatisfied performance obligations (commonly referred to as “backlog”) represents contracted revenue that has not yet been recognized and includes both deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Total backlog equaled $3.9 billion as of September 30, 2021, of which we expect to recognize approximately 35% over the next 12 months, and the remaining 65% thereafter.

We recognize revenue only when we satisfy an identified performance obligation (or bundle of obligations) by transferring control of a promised product or service to a customer. We consider a product or service to be transferred when a customer obtains control because a customer has sole possession of the right to use (or the right to direct the use of) the product or service for the remainder of its economic life or to consume the product or service in its own operations. We evaluate the transfer of control primarily from the customer’s perspective as this reduces the risk that revenue is recognized for activities that do not transfer control to the customer.

The majority of our revenue is recognized over time because a customer continuously and simultaneously receives and consumes the benefits of our performance. The exceptions to this pattern are our sales of perpetual and term software licenses, and hardware, where we determined that a customer obtains control of the asset upon granting of access, delivery or shipment.

We disaggregate our revenue from contracts with customers based on the type of revenue and nature of revenue stream, as we believe those categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The below tables summarize revenue by type and nature of revenue stream as well as by our reportable segments:

We adopted ASU 2016-13 on January 1, 2020 using the cumulative-effect adjustment transition method. The guidance required the recognition of lifetime estimated credit losses expected to occur for contract assets and trade receivables. The guidance also required that we pool assets with similar risk characteristics and consider current economic conditions when estimating losses. The adoption of ASU 2016-13 for contract assets was recorded as a debit to retained earnings of $5.3 million as of January 1, 2020. Refer to Note 3, “Accounts Receivable”, for the adoption impact related to trade receivables.

At adoption, we segmented the contract asset population into pools based on their risk assessment. Risks related to contract assets are a customer’s inability to pay or bankruptcy. Each pool was defined by an internal credit assessment and business size. The pools were aligned with management’s review of financial performance at the time. In the fourth quarter of 2020, we used each customer’s primary business unit in our pooling determination. This assessment provides additional information of the customer including size, segment and industry. Using this perspective, we added one new pool. We reallocated pools and loss rates accordingly and noted slight shifts in each pool. The new pools are aligned with management’s current review of financial performance. For the nine months ended September 30, 2021, no adjustment to the pools was necessary.

We utilized a loss-rate method to measure expected credit loss for each pool. The loss rate is calculated using a twenty-four-month lookback period of credit memos and adjustments divided by the average contract asset balance for each pool during that period. We considered current economic conditions, including how the COVID-19 pandemic is impacting the global economy, internal forecasts, cash collection and credit memos written during the current period when assessing loss rates. We reviewed these factors and concluded that no adjustments should be made to the historical loss rate data. The September 30, 2021 analysis resulted in no change in the ending estimate of credit losses.

Changes in the estimate of credit losses for contract assets are presented in the table below.

We adopted ASU 2016-13 on January 1, 2020 using the cumulative-effect adjustment transition method. The guidance required the recognition of lifetime estimated credit losses expected to occur for trade accounts receivable, which resulted in the recording of a debit to retained earnings of $12.6 million as of January 1, 2020. Refer to Note 2, “Revenue from Contracts with Customers” for additional information regarding the adoption of ASU 2016-13.

Changes in the estimate of credit losses for trade accounts receivable are presented in the table below.

We determine whether an arrangement is a lease at inception. Assets leased under an operating lease arrangement are recorded in Right-of-use assets – operating leases and the associated lease liabilities are included in Current operating lease liabilities and Long-term operating lease liabilities within the consolidated balance sheets. Assets leased under finance lease arrangements are recorded within fixed assets and the associated lease liabilities are recorded within Accrued expenses and Other liabilities within the consolidated balance sheets.

Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the expected lease term. Since our lease arrangements do not provide an implicit rate, we use our incremental borrowing rate in conjunction with the market swap rate for the expected remaining lease term at the commencement date for new leases in determining the present value of future lease payments. Our expected lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term.

We have elected the group of practical expedients under ASU 2016-02 to forego assessing upon adoption: (1) whether any expired contracts are or contain leases; (2) the lease classification for any existing or expired leases and (3) any indirect costs that would have qualified for capitalization for any existing leases. We have lease agreements with lease and non-lease components, which are generally accounted for separately except for real estate and vehicle leases, which we have elected to combine through a practical expedient under ASU 2016-02. Non-lease components for our leases typically consist of executory costs, and the practical expedient allows for executory costs to be recorded as lease payments. Additionally, for certain equipment leases, we apply a portfolio approach to effectively record right-of-use assets and liabilities.

Our operating leases mainly include office leases and our finance leases include office and computer equipment leases. Our finance leases are not significant. Our leases have remaining lease terms up to 7 years, some of which include options to extend the leases for up to 5 years, which may include options to terminate the leases within 1 year. Operating costs associated with leased assets are as follows:

The future maturities of our leasing arrangements including lease and non-lease components are shown in the below table. The maturities are calculated using foreign currency exchange rates in effect as of September 30, 2021.

On July 2, 2019, we acquired the Pinnacle and Diabetes Collaborative Registries from the American College of Cardiology (“ACC”) as part of our broader strategic partnership with the ACC. The total purchase price was $19.7 million, consisting of an initial payment of $11.7 million plus up to an aggregate of $8.0 million pending the attainment of certain milestones over the next 18 months. The contingent consideration of up to $8.0 million was valued at $5.0 million at the time of closing. As part of this partnership, we operate Pinnacle and Diabetes Collaborative Registries, which extends our EHR-enabled ambulatory network to create a large-scale chronic disease network. During the first quarter of 2021, we extended the ACC earnout agreement to June 30, 2021. In the second quarter of 2021, we paid $0.9 million related to the earnout agreement. The remaining payment was accrued as contingent consideration within our consolidated financial statements. Refer to Note 6, “Fair Value Measurements and Long-term Investments” for additional information regarding the contingent consideration. The business is included in our Veradigm business segment.

On August ~~25, 2017, the Company~~23, 2021, we completed the ~~acquisition~~sale of substantially all of the assets ~~relating~~of our 2bPrecise business to the provider/patient engagement solutions business of NantHealth, Inc. (“NantHealth”). The consideration for the transaction included the 15,000,000 shares of common stock of NantHealth that had been held by the Company as available for sale securities and which had a fair value of $42.8 million at the time of the transaction. The transaction also includes adjustments for working capital and deferred revenue obligations, as well as a modification of the commercial agreement between the parties. Total consideration for the transaction was as follows:

~~The allocation of the fair value of the consideration transferred as of the acquisition date of August 25, 2017 is shown in the table below.~~ This allocation is preliminary and subject to changes, which could be significant, as appraisals of tangible and intangible assets are finalized, and additional information becomes available. The goodwill is expected to be deductible for tax purposes.

~~The following table summarizes the estimated fair values of the identifiable intangible assets and their estimated useful lives:~~

~~On March 31, 2017, Netsmart entered into an Asset Purchase Agreement with~~ a third party for ~~an aggregate cash consideration of $4.0 million, to acquire intellectual property, certain contractual relationships and certain associates. This transaction has been accounted for as~~ a business combination. The Asset Purchase Agreement provides for contingent consideration to be paid to the third party based on the number of customers of the third party that migrate to Netsmart’s electronic health record product. The value of the contingent consideration has been estimated to be $0.7 million. Netsmart accrued $0.5 million at September 30, 2017 within other liabilities. This amount represents the discounted fair value of the contingent consideration. This transaction resultednon-controlling interest in the ~~recognition~~combined entity. We realized a pre-tax gain upon the sale of ~~goodwill of $4.4 million.~~ ~~The goodwill is expected to be deductible for tax purposes. We have finalized the allocation of the fair value of the consideration transferred as of September 30, 2017~~.

~~On March 20, 2016, we entered into a Contribution and Investment Agreement with GI Netsmart Holdings LLC, a Delaware limited liability company (“GI Partners”), to form a joint business entity to~~$8.4 million, which ~~we contributed our Homecare~~^TM business and GI Partners made a cash contribution. On April 19, 2016, the joint business entity acquired Netsmart, Inc., a Delaware corporation. As a result of these transactions (the “Netsmart Transaction”), the joint business entity combined the Allscripts Homecare^TM ~~business with Netsmart, Inc. Throughout the rest of this Form 10-Q, the joint business entity is referred to as “Netsmart”.~~ ~~As part of the Netsmart Transaction, we deposited $15 million in an escrow account to be used by Netsmart to facilitate the integration of our Homecare~~^TM ~~business within Netsmart over the next five years, at which time the restriction on any unused funds will lapse. As of September 30, 2017, there is $11.3 million remaining~~was included in the ~~escrow account.~~ ~~Our Form 10-K includes a detailed discussion about the Netsmart Transaction. We finalized the allocation~~Gain on sale of ~~the fair value of the consideration transferred as of December 31, 2016.~~

On October 27, 2016, Netsmart completed the acquisition of HealthMEDX, LLC, a Delaware limited liability company (“HealthMEDX”), for an aggregate consideration of $39.2 million. HealthMEDX is a provider of electronic medical record solutions for long-term and post-acute care including continuing care retirement communities, assisted living, independent living, skilled nursing and home care providers. During the three months ended March 31, 2017, we finalized the allocation of the fair value of the consideration transferred and recorded a measurement period adjustment of $0.1 million related to the fair value of liabilities with an offset to goodwill.

~~During the second quarter of 2017 we recorded final measurement period adjustments against goodwill related to the Company’s acquisitions of third parties during the fourth quarter of 2016.~~

The supplemental pro forma results below for the three and nine months ended September 30, 2017 and 2016 were calculated after applying our accounting policies and adjusting the results of NantHealth’s provider /patient engagement solutions business to reflect (i) the additional amortization of acquired intangible assets and (ii) the additional amortization of the estimated adjustment to decrease the assumed deferred revenue obligations to fair value, that would have been recognized assuming the acquisition occurred on January 1, 2016, together with the consequential tax effects. The supplemental pro forma results were also adjusted to exclude acquisition-related and transaction costs incurred during the 2017 period. ~~The revenue and~~businesses, net ~~loss of NantHealth’s provider/patient solutions business since August 25, 2017 are included~~line in our ~~consolidated statement of operations for the three and nine months ended September 30, 2017.~~

The supplemental pro forma results below for the three and nine months ended September 30, 2016 were calculated after applying our accounting policies and adjusting the results of Netsmart and HealthMEDX to reflect (i) the additional depreciation and amortization that would have resulted from the fair value adjustments to property, plant and equipment and intangible assets, (ii) the additional interest expense associated with Netsmart’s borrowings under new term loans and (iii) the additional amortization of the estimated adjustment to decrease the assumed deferred revenue obligations to fair value, that would have been recognized assuming both acquisitions occurred on January 1, 2015, together with the consequential tax effects. The supplemental pro forma results were also adjusted to exclude acquisition-related and transaction costs incurred during the 2016 period. The effects of transactions between Allscripts and Netsmart during the periods presented have been eliminated in the supplemental pro forma data. ~~The revenue and net loss of Netsmart since April 19, 2016 are included in our consolidated statement of operations for the three and nine months ended September 30, 2016.~~ ~~The~~ consolidated statements of operations for the three and nine months ended September 30, ~~2016 do not include any actual revenue~~2021. The 2bPrecise business was previously reported within our Data, Analytics and ~~earnings from HealthMEDX since this acquisition~~Care Coordination segment. However, due to the reportable segment changes in the third quarter of 2021, the historical 2bPrecise business is now presented in our “Unallocated Amounts” category. Refer to Note 16, “Business Segments” for additional information.

On December 31, 2020, we completed the sale of substantially all of the assets of our CarePort business to a subsidiary of WellSky Corp., a Delaware corporation (“WellSky”), pursuant to a purchase agreement (the “CarePort Purchase Agreement”). The total consideration for CarePort was ~~completed~~$1.35 billion, which was subject to certain adjustments for liabilities assumed by WellSky and net working capital as described in the CarePort Purchase Agreement. We realized a pre-tax gain upon the sale of $933.9 million, which was included in the Gain on ~~October 27, 2016.~~

~~The below supplemental pro forma data~~sale of discontinued operations line in our consolidated statements of operations for the ~~combined entity is presented under~~year ended December 31, 2020. For the ~~assumption that the Netsmart and HealthMEDX acquisitions occurred on January 1, 2015 and the NantHealth provider/patient solutions business acquisition occurred on January 1, 2016. The three and~~ nine months ended September 30, ~~2017 only reflect pro forma adjustments~~2021, we recorded a $0.6 million gain that primarily related to net working capital adjustments in the ~~NantHealth provider/patient solutions~~Gain on sale of discontinued operations line in our consolidated statements of operations. The divestiture was treated as a discontinued operation as of December 31, 2020. Refer to Note 15, “Discontinued Operations” for additional information. On December 31, 2020, we repaid $161.0 million of the Term Loan (as defined below) as a result of the sale, which was a mandatory prepayment in accordance with the Second Amended Credit Agreement (as defined below).

On October 15, 2020, we completed the sale of substantially all of the assets of our EPSi^TM business (“EPSi”) to Strata Decision Technology LLC, an Illinois limited liability company (“Strata”), and Roper Technologies, Inc., a Delaware corporation, pursuant to a purchase agreement (the “EPSi PurchaseAgreement”). The total consideration for EPSi was $365.0 million, which was subject to certain adjustments for liabilities assumed by Strata and net working capital as ~~Netsmart and HealthMEDX are~~described in the EPSi Purchase Agreement. We realized a pre-tax gain upon the sale of $222.6 million, which was included in the Gain on sale of discontinued operations line in our consolidated statements of operations for the ~~full 2017 periods.~~

year ended December 31, 2020. The divestiture was treated as a discontinued operation as of December 31, 2020. Refer to Note 15, “Discontinued Operations” for additional information. On October 29, 2020, we repaid $19.0 million of the Term Loan (as defined below) as a result of the sale, which was a mandatory prepayment in accordance with the Second Amended Credit Agreement (as defined below).

Fair value measurements are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market participant assumptions in the absence of observable market information. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The fair values of assets and liabilities required to be measured at fair value are categorized based upon the level of judgment associated with the inputs used to measure their value in one of the following three categories:

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. ~~Our Level 1 financial instruments included our investment in NantHealth common stock. Refer to Note 11,~~ ~~“Other Comprehensive Income,”~~ ~~for further information regarding our available for sale marketable securities.~~

Level 2: ~~Inputs, other than quoted~~Quoted prices ~~included~~for similar instruments in ~~Level 1,~~active markets with inputs that are observable, ~~for the asset or liability,~~ either directly or indirectly. Our Level 2 derivative financial instruments include foreign currency forward contracts valued based upon observable values of spot and forward foreign currency exchange rates. ~~Refer to Note 10, “Derivative Financial Instruments,” for further information regarding these derivative financial instruments.~~

Level 3: Unobservable inputs ~~that~~ are significant to the fair value of the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. Our Level 3 ~~financial instruments include derivative financial instruments comprising~~instrument includes the ~~1.25% Call Option asset~~fair value of contingent consideration related to a completed acquisition. The fair value is based on a discounted cash flow analysis reflecting the likelihood of achieving specified performance measures or events and captures the ~~1.25% embedded cash conversion option liability that are not actively traded. These derivative instruments were designed with~~contractual nature of the ~~intent that changes in their fair values would substantially offset, with limited net impact to our earnings. Therefore, we believe the sensitivity~~contingencies, commercial risk, or time value of changes in the unobservable inputs to the option pricing model for these instruments is substantially mitigated. Refer to Note 10, “Derivative Financial Instruments,” for further information regarding these derivative financial instruments. The sensitivity of changes in the unobservable inputs to the valuation pricing model used to value these instruments is not material to our consolidated results of operations.money.

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of the respective balance sheet dates:

Balance Sheet

September 30, 2017

December 31, 2016

(In thousands)

Classifications

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

NantHealth
   Common Stock

Available for sale
   marketable
   securities

$
0

$
0

$
0

$
0

$
149,100

$
0

$
0

$
149,100

1.25% Call Option

Other assets

0

0

44,882

44,882

0

0

17,080

17,080

1.25% Embedded
   cash conversion
   option

Other liabilities

0

0

(45,973
)

(45,973
)

0

0

(17,659
)

(17,659
)
Foreign exchange
   derivative assets

Prepaid expenses
   and other
   current assets

0

1,362

0

1,362

0

1,021

0

1,021

Total

$
0

$
1,362

$
(1,091
)

$
271

$
149,100

$
1,021

$
(579
)

$
149,542

	Balance Sheet	September 30, 2021								December 31, 2020
(In thousands)	Classifications	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Foreign exchange derivative assets	Prepaid expenses and other current assets	$	0	$	0	$	0	$	0	$	0	$	1,509	$	0	$	1,509
Total assets		$	0	$	0	$	0	$	0	$	0	$	1,509	$	0	$	1,509

Contingent consideration - current	Accrued expenses	$	0	$	0	$	153	$	153	$	0	$	0	$	1,011	$	1,011
Total liabilities		$	0	$	0	$	153	$	153	$	0	$	0	$	1,011	$	1,011

The changes in our Level 3 liability measured at fair value on a recurring basis at September 30, 2021 is summarized as follows:

The following table summarizes the quantitative information about our Level 3 fair value measurements at September 30, 2021:

The following table summarizes our long-term equity investments which are included in ~~other~~Other assets in the accompanying consolidated balance sheets:

During the three months ended September 30, 2021, we divested one of our businesses to a new third-party in exchange for a non-controlling interest in the combined entity, which is a cost method investment. The divestiture resulted in an $8.4 million gain, which is included in the Gain on sale of businesses, net line in our consolidated statements of operations for the three and nine months ended September 30, 2021. During the nine months ended September 30, 2021, one of our third-party cost method investments converted its notes and we received 475 thousand shares as a result of the conversion. We also revalued our existing investment based on the note conversion share price. The note conversion and the revaluation of the existing investment resulted in a $9.7 million gain, which is included in the Other income (loss), net line in our consolidated statements of operations for the nine months ended September 30, 2021.

During the nine months ended September 30, 2020, we recorded a $16.8 million gain from the sale of a third-party equity method investment.

As of September 30, ~~2017,~~2021, it is not ~~practicable~~possible to estimate the fair value of our non-marketable cost and equity method investments, primarily because of their illiquidity and restricted marketability. The factors we considered in trying to determine fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations, ~~and~~ the issuer’s subsequent or planned raises of ~~capital.~~capital and observable price changes in orderly transactions.

Each quarter, management performs an assessment of each of our investments on an individual basis to determine if there have been any declines in fair ~~value are other than temporary.~~ value. Based on ~~management's~~our assessment, ~~during the second quarter of 2017, the Company~~we determined that the decline in fair value of our available for sale marketable securities was other than temporary based on a number of factors, including, but not limited to, uncertainty regarding our intent to hold these investments for a period of time that would be sufficient to recover our cost basis in the event of a market recovery, the fact that the fair value of each investment had continued to decline below cost over the period held, and the Company's uncertainty around the near-term prospects for certain of the investments. ~~As a result, the Company recognized other-than-temporary~~0 impairment charges ~~of $142.2 million on available for sale marketable securities during the second quarter of 2017.~~ ~~The cost basis of these marketable securities prior to recognizing the impairment charges~~

~~was approximately $205.6 million. The Company determined the fair value of these securities based on Level 1 inputs.~~ During the three months ended September 30, 2017, the Company recognized an additional $20.7 million loss upon the final disposition of these securities in connection with the NantHealth provider/patient solutions business acquisition (refer to Note 2, “Business Combinations”). In addition, the Company recognized other-than-temporary impairment charges of $2.1 million on a cost method equity investment during the nine months ended September 30, 2017. ~~The aggregate carrying value of this equity investment prior to recognizing the impairment charge was $2.1 million.~~ ~~These impairment charges are included in impairment of and losses on long-term investments line in our consolidated statement of operations~~were necessary for the nine months ended September 30, ~~2017.~~ 2021.

Our long-term financial liabilities include amounts outstanding under our senior secured credit facility ~~and Netsmart’s Credit Agreements~~ (as ~~defined~~described in Note 8,10, “Debt”), with carrying values that approximate fair value since the interest rates approximate current market rates. In addition, the carrying amount of our 1.25% Cash Convertible Senior Notes (the “1.25% Notes”) approximates fair value as September 30, 2017, since the effective interest rate on the 1.25% Notes approximates current market rates. SeeRefer to Note 8,10, “Debt,” for further information regarding our long-term financial liabilities.

Stock-based compensation expense recognized during the three and nine months ended September 30, ~~2017~~2021 and ~~2016~~2020 is included in our consolidated statements of operations as shown in the below table. Stock-based compensation expense includes both non-cash expense related to grants of stock-based awards as well as cash expense related to the employee discount applied to purchases of our common stock under our employee stock purchase plan. ~~In addition, the three and nine months periods ended September 30, 2017 and 2016 include stock-based compensation expense related to Netsmart’s time-based liability classified option awards. No~~NaN stock-based compensation costs were capitalized during the three and nine months ended September 30, ~~2017~~2021 and ~~2016.~~2020.

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2017		2016		2017		2016		2021		2020		2021		2020
Cost of revenue:
Software delivery, support and maintenance	$	378	$	979	$	2,491	$	3,209	$	305	$	295	$	1,112	$	1,213
Client services		899		884		3,464		3,512		816		1,519		3,162		3,418
Total cost of revenue		1,277		1,863		5,955		6,721		1,121		1,814		4,274		4,631
Selling, general and administrative expenses		7,193		6,464		17,793		17,972		7,832		6,728		23,426		18,851
Research and development		1,934		1,446		6,643		6,141		1,361		2,127		4,828		5,950
Total stock-based compensation expense	$	10,404	$	9,773	$	30,391	$	30,834	$	10,314	$	10,669	$	32,528	$	29,432

We measure stock-based compensation expense at the grant date based on the fair value of the award. We recognize the expense for service-based share awards over the requisite service period on a straight-line basis, net of estimated forfeitures. We recognize the expense for performance-based and market-based share awards over the vesting period under the accelerated attribution method, net of estimated forfeitures. In addition, we recognize stock-based compensation cost for awards with performance conditions if and when we conclude that it is probable that the performance conditions will be achieved.

The fair value of service-based and performance-based restricted stock units is measured at the underlying closing share price of our common stock on the date of grant. The fair value of market-based restricted stock units is measured using the Monte Carlo pricing model. NoNaN stock options were granted during the three and nine months ended September 30, ~~2017~~2021 and ~~2016.~~2020.

	Three Months Ended September 30, 2017				Nine Months Ended September 30, 2017				Three Months Ended September 30, 2021				Nine Months Ended September 30, 2021
			Weighted-Average				Weighted-Average				Weighted-Average				Weighted-Average
			Grant Date				Grant Date				Grant Date				Grant Date
(In thousands, except per share amounts)	Shares		Fair Value		Shares		Fair Value		Shares		Fair Value		Shares		Fair Value
Service-based restricted stock units		11	$	13.73		1,908	$	12.38		42	$	16.59		2,487	$	15.38
Performance-based restricted stock units with a service condition		38	$	13.25		610	$	12.01		33	$	15.35		268	$	15.18
Market-based restricted stock units with a service condition		0	$	0.00		613	$	13.34		0	$	0.00		235	$	17.19
		49	$	13.36		3,131	$	12.50		75	$	16.04		2,990	$	15.51

During the nine months ended September 30, ~~2017~~2021 and the year ended December 31, ~~2016, 1.2~~2020, 2.1 million and ~~1.5~~1.9 million shares of common stock, respectively, were issued in connection with ~~the exercise of options and~~ the release of restrictions on stock awards.

Upon vesting, restricted stock units are generally net share-settled to cover the required withholding tax, and the remaining amount is converted into an equivalent number of shares of common stock. The majority of restricted stock units and awards that vested during the nine months ended September 30, ~~2017~~2021 and ~~year ended December 31, 2016~~2020 were net-share settled such that we withheld shares with fair value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes and remitted the cash to the appropriate taxing authorities. Total payments for the employees' minimum statutory tax obligations to the taxing authorities are reflected as a financing activity within the accompanying consolidated statements of cash flows. The total shares withheld for the nine months ended September 30, ~~2017~~2021 and ~~2016~~2020 were ~~569~~900 thousand and ~~572~~770 thousand, respectively, and were based on the value of the restricted stock units on their vesting date as determined by our closing stock price. These net-share settlements had the effect of share repurchases by us as they reduced the number of shares that would have otherwise been issued as a result of the vesting.

On November ~~17, 2016,~~18, 2020, we announced that our Board approved a stock purchase program (the “2020 Program”) under which we may repurchase up to ~~$200~~$300 million of our common stock through December 31, ~~2019.~~2021. The 2020 Program replaced a previous program and the 2020 program was fully exhausted by May of 2021. During the ~~three and~~ nine months ended September 30, ~~2017,~~2021, we repurchased ~~0.0~~5.6 million ~~and 1.0 million~~ shares ~~respectively,~~ of our common stock under the 2020 Program, which was inclusive of the shares we received at final settlement of the accelerated share repurchase program we entered into on November 30, 2020, described below. During the three months ended September 30, 2020, we repurchased 5.0 million shares of our common stock under the previous program for a total of ~~$12.1~~$45.6 million. During the nine months ended September 30, 2020, we repurchased 6.5 million shares of our common stock under the previous program for a total of $55.3 million.

On May 26, 2021, we announced that our Board approved a new stock purchase program (the “2021 Program”) under which we may repurchase up to $350 million of our common stock. The 2021 Program replaced the 2020 Program and does not have a termination date. During the three months ended September 30, 2021, we received 2.4 million shares of our common stock at final settlement of the accelerated share repurchase program entered into on June 14, 2021, described below. During the nine months ended September 30, 2021, we repurchased 13.9 million shares of our common stock under the 2021 Program. This is inclusive of the shares we received at initial and final settlement of the accelerated share repurchase program entered into on June 14, 2021, described below.

On November 30, 2020, we entered into separate Master Confirmations (each, a “Master Confirmation”) and Supplemental Confirmations (each, together with the related Master Confirmation, an “ASR Agreement”), with JPMorgan Chase Bank, National Association and Wells Fargo Bank, National Association (each, an “ASR Counterparty”, or collectively, the “ASR Counterparties”), to purchase shares of our common stock for a total payment of $200.0 million (the “Prepayment Amount”). Under the terms of the ASR Agreements, on November 30, 2020, we paid the Prepayment Amount to the ASR Counterparties and received on December 2, 2020 an initial delivery of approximately 11.7 million shares of our common stock, which is approximately 80% of the total number of shares that could be repurchased under the ASR Agreements if the final purchase price per share equaled the closing price of our common stock on November 30, 2020. These repurchased shares became treasury shares and were recorded as a $165.7 million reduction to stockholders’ equity. The remaining $34.3 million of the Prepayment Amount was recorded as a reduction to stockholders’ equity as an unsettled forward contract indexed to our common stock. The total number of shares received under the ASR Agreements, after final settlement, was based on the average daily volume weighted average price of our common stock during the repurchase period, less an agreed upon discount. Final settlement of the ASR Agreements occurred in May 2021, resulting in the receipt of 1.6 million additional shares, which yielded a weighted-average share repurchase price of approximately $15.07.

The approximate dollar value of shares of our common stock that may yet be purchased under the ~~program~~2021 Program was $108.4 million as of September 30, ~~2017 was $163.9 million.~~ 2021. Any future stock repurchase transactions may be made through open market transactions, block trades, privately negotiated transactions (including accelerated share repurchase transactions) or other means, subject to market conditions. Any repurchase activity will depend on many factors such as our working capital needs, cash requirements for investments, debt repayment obligations, economic and market conditions at the time, including the price of our common stock, and other factors that we consider relevant. Our stock repurchase program may be accelerated, suspended, delayed or discontinued at any time.

~~Stock-based compensation expense (benefit) related to Netsmart’s time-based liability classified option awards was included in the following categories in our consolidated statements of operations:~~

~~At September 30, 2017, the liability for outstanding awards was $5.2~~million. As of September 30, 2017 the weighted average fair value per option unit using the Black‑Scholes‑Merton option pricing model was estimated at $0.23, as compared to $0.54 at December 31, 2016. A significant portion of the decrease in fair value occurred during the first quarter of 2017 and resulted in the reversal of previously recognized stock-based compensation expense during the three months ended March 31, 2017, as required under the liability method of accounting.

During the three and nine months ended September 30, 2017, 3.3 million option unit awards were granted by Netsmart . Of the 3.3 million unit awards granted, 2.1 million were time-based and 1.2 million were performance-based. These options were issued at an exercise price of $1.00.

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average shares of common stock outstanding. For purposes of calculating diluted earnings (loss) per share, the denominator includes both the ~~weighted average~~weighted-average shares of common stock outstanding and dilutive common stock equivalents. Dilutive common stock equivalents consist of ~~stock options,~~ restricted stock unit awards and warrants calculated under the treasury stock method.

Three Months Ended
September 30,

Nine Months Ended
September 30,

(In thousands, except per share amounts)

2017

2016

2017

2016

Basic Loss per Common Share:

Net (loss) income

$
(17,462
)

$
157

$
(169,038
)

$
148

Less: Net income attributable to non-controlling interests

(163
)

(151
)

(352
)

(142
)
Less: Accretion of redemption preference on redeemable
   convertible non-controlling interest - Netsmart

(10,962
)

(10,191
)

(32,887
)

(18,344
)
Net loss attributable to Allscripts Healthcare Solutions, Inc.
   stockholders

$
(28,587
)

$
(10,185
)

$
(202,277
)

$
(18,338
)

Weighted-average common shares outstanding

180,634

186,226

180,864

187,190

Basic Loss per Common Share

$
(0.16
)

$
(0.06
)

$
(1.12
)

$
(0.10
)

Diluted Loss per Common Share:

Net (loss) income

$
(17,462
)

$
157

$
(169,038
)

$
148

Less: Net income attributable to non-controlling interests

(163
)

(151
)

(352
)

(142
)
Less: Accretion of redemption preference on redeemable
   convertible non-controlling interest - Netsmart

(10,962
)

(10,191
)

(32,887
)

(18,344
)
Net loss attributable to Allscripts Healthcare Solutions, Inc.
   stockholders

$
(28,587
)

$
(10,185
)

$
(202,277
)

$
(18,338
)

Weighted-average common shares outstanding

180,634

186,226

180,864

187,190

Plus: Dilutive effect of stock options, restricted stock unit
   awards and warrants

0

0

0

0

Weighted-average common shares outstanding assuming
   dilution

180,634

186,226

180,864

187,190

Diluted Loss per Common Share

$
(0.16
)

$
(0.06
)

$
(1.12
)

$
(0.10
)

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share amounts)	2021			2020			2021		2020
Basic earnings (loss) per Common Share:
Income (loss) from continuing operations, net of tax	$	16,194		$	(13,956	)	$	46,692	$	(67,920	)
(Loss) income from discontinued operations, net of tax		(14	)		14,498			471		40,503
Net income (loss)	$	16,180		$	542		$	47,163	$	(27,417	)

Weighted-average common shares outstanding		123,892			161,144			133,517		162,092

Basic earnings (loss) from continuing operations per Common Share	$	0.13		$	(0.09	)	$	0.35	$	(0.42	)
Basic earnings from discontinued operations per Common Share		0.00			0.09			0.00		0.25
Net earnings (loss) per Common Share	$	0.13		$	0.00		$	0.35	$	(0.17	)

Diluted earnings (loss) per Common Share:
Income (loss) from continuing operations, net of tax	$	16,194		$	(13,956	)	$	46,692	$	(67,920	)
(Loss) income from discontinued operations, net of tax		(14	)		14,498			471		40,503
Net income (loss)	$	16,180		$	542		$	47,163	$	(27,417	)

Weighted-average common shares outstanding		123,892			161,144			133,517		162,092
Plus: Dilutive effect of restricted stock unit awards and warrants		7,460			0			8,564		0
Weighted-average common shares outstanding assuming dilution		131,352			161,144			142,081		162,092

Diluted earnings (loss) from continuing operations per Common Share	$	0.12		$	(0.09	)	$	0.33	$	(0.42	)
Diluted earnings from discontinued operations per Common Share		0.00			0.09			0.00		0.25
Net earnings (loss) per Common Share	$	0.12		$	0.00		$	0.33	$	(0.17	)

Due to the loss from continuing operations, net of tax and the net loss ~~attributable to Allscripts Healthcare Solutions, Inc. stockholders~~ for the three and nine months ended September 30, ~~2017 and 2016,~~2020, respectively, we used basic weighted-average common shares outstanding in the calculation of diluted loss per share, ~~for that period,~~ since the inclusion of any stock equivalents would be anti-dilutive.

The following ~~stock options,~~ restricted stock unit awards and warrants are not included in the computation of diluted earnings (loss) per share as the effect of including such ~~stock options,~~ restricted stock unit awards and warrants in the computation would be anti-dilutive:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2017		2016		2017		2016		2021		2020		2021		2020
Shares subject to anti-dilutive stock options, restricted stock unit awards and warrants excluded from calculation		26,085		27,580		26,636		26,219
Shares subject to anti-dilutive restricted stock unit awards and warrants excluded from calculation										1,504		47,162		1,502		48,816

	September 30, 2017							December 31, 2016							September 30, 2021							December 31, 2020
	Gross							Gross							Gross							Gross
	Carrying		Accumulated			Intangible		Carrying		Accumulated			Intangible		Carrying		Accumulated			Intangible		Carrying		Accumulated			Intangible
(In thousands)	Amount		Amortization			Assets, Net		Amount		Amortization			Assets, Net		Amount		Amortization			Assets, Net		Amount		Amortization			Assets, Net
Intangibles subject to amortization:
Proprietary technology	$	638,118	$	(388,913	)	$	249,205	$	627,819	$	(347,477	)	$	280,342	$	534,999	$	(485,810	)	$	49,189	$	535,092	$	(465,292	)	$	69,800
Customer contracts and relationships		843,458		(454,430	)		389,028		813,021		(430,960	)		382,061		674,034		(526,815	)		147,219		674,336		(509,534	)		164,802
Total	$	1,481,576	$	(843,343	)	$	638,233	$	1,440,840	$	(778,437	)	$	662,403	$	1,209,033	$	(1,012,625	)	$	196,408	$	1,209,428	$	(974,826	)	$	234,602

Intangibles not subject to amortization:
Registered trademarks						$	79,000						$	79,000						$	52,000						$	52,000
Goodwill							1,971,950							1,924,052							974,427							974,729
Total						$	2,050,950						$	2,003,052						$	1,026,427						$	1,026,729

Changes in the carrying amounts of goodwill by reportable segment for the nine months ended September 30, ~~2017~~2021 were as follows:

There were no0 accumulated impairment losses associated with ~~our~~ goodwill as of September 30, ~~2017 or~~2021 and December 31, ~~2016.~~2020.

Additions during the third quarter of 2017 include goodwill of $9.1 million arising from Allscripts’ purchase of NantHealth’s provider/patient engagement solutions business and $32.9 million arising from Netsmart’s acquisition of DeVero. Other additions during the nine months ended September 30, 2017 include additions arising from Netsmart’s Asset Purchase Agreement with a third party and measurement period adjustments against goodwill related to the Company’s acquisitions of third parties in late 2016. Refer to Note 2, “Business Combinations,” for additional information regarding these transactions.

~~We incurred the following asset and long-term investment impairment charges:~~

During the first quarter of 2016, we incurred non-cash asset impairment charges which included $2.2 million for the impairment of capitalized software as a result of our decision to discontinue several software development projects, $2.1 million for the impairment of one of our cost method equity investments, and other charges of $0.4 million to write down a long-term asset to its estimated net realizable value.

During the nine months ended September 30, 2017, we recognized non-cash charges of $165.3 million including other than temporary impairment charges of $144.6 million during the second quarter of 2017 associated with two of the Company’s long-term investments based on management’s assessment of the likelihood of near-term recovery of the investments’ value. The majority of the impairment charges relate to our investment in NantHealth common stock. Refer to Note 3, “Fair Value Measurements and Long-term Investments” and Note 11, “Other Comprehensive Income,” for further information regarding these impairments. During the three months ended September 30, 2017, we realized an additional $20.7 million loss upon the final disposition of the NantHealth common stock. Refer to Note 2, “Business Combinations,” for information regarding the divestiture of our investment in NantHealth common stock in connection with our acquisition of certain assets related to NantHealth’s provider/patient engagement solutions business.

Debt outstanding, excluding ~~capital leases,~~lease obligations, consists of the following:

September 30, 2017

December 31, 2016

(In thousands)

Principal Balance

Unamortized Discount and Debt Issuance Costs

Net Carrying Amount

Principal Balance

Unamortized Discount and Debt Issuance Costs

Net Carrying Amount

1.25% Cash Convertible
   Senior Notes

$
345,000

$
39,319

$
305,681

$
345,000

$
49,186

$
295,814

Senior Secured Credit Facility

470,000

3,690

466,310

441,875

4,691

437,184

Netsmart Non-Recourse Debt:

First Lien Term Loan

480,533

11,482

469,051

432,925

11,655

421,270

Second Lien Term Loan

167,000

7,789

159,211

167,000

8,901

158,099

Other debt

0

0

0

13

0

13

Total debt

$
1,462,533

$
62,280

$
1,400,253

$
1,386,813

$
74,433

$
1,312,380

Less: Debt payable within
   one year - excluding Netsmart

25,000

450

24,550

15,638

480

15,158

Less: Debt payable within
   one year - Netsmart

4,866

2,117

2,749

4,351

1,900

2,451

Total long-term debt, less
   current maturities

$
1,432,667

$
59,713

$
1,372,954

$
1,366,824

$
72,053

$
1,294,771

	September 30, 2021							December 31, 2020
(In thousands)	Principal Balance		Unamortized Discount and Debt Issuance Costs			Net Carrying Amount		Principal Balance		Unamortized Discount and Debt Issuance Costs			Net Carrying Amount
0.875% Convertible Senior Notes ⁽¹⁾	$	167,853	$	(7,578	)	$	175,431	$	167,853	$	(3,166	)	$	171,019
Senior Secured Credit Facility		200,000		2,244			197,756		0		3,432			(3,432	)
Total debt	$	367,853	$	(5,334	)	$	373,187	$	167,853	$	266		$	167,587

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2017		2016		2017		2016		2021		2020		2021		2020
Interest expense	$	5,577	$	3,896	$	15,079	$	11,029	$	1,742	$	4,651	$	4,109	$	14,199
Amortization of discounts and debt issuance costs		3,674		3,522		10,867		10,401		1,875		2,016		5,600		13,447
Netsmart:
Interest expense ⁽¹⁾		12,107		11,019		34,188		19,549
Amortization of discounts and debt issuance costs		894		930		2,588		1,778
Total interest expense	$	22,252	$	19,367	$	62,722	$	42,757	$	3,617	$	6,667	$	9,709	$	27,646

Interest expense related to the 0.875% Convertible Senior Notes and the 1.25% Cash Convertible Senior Notes (which matured and were repaid in full on July 1, 2020), included in the table above, ~~consists~~consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2017		2016		2017		2016		2021		2020		2021		2020
Coupon interest at 1.25%	$	1,078	$	1,078	$	3,234	$	3,234
Coupon interest									$	454	$	451	$	1,364	$	3,561
Amortization of discounts and debt issuance costs		3,342		3,185		9,866		9,401		1,479		1,454		4,412		12,030
Total interest expense related to the 1.25% Notes	$	4,420	$	4,263	$	13,100	$	12,635
Total interest expense related to the convertible notes									$	1,933	$	1,905	$	5,776	$	15,591

On February 15, 2018, Allscripts and Allscripts Healthcare LLC entered into a Second Amended and Restated Credit Agreement (the “Second Amended Credit Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent. The Second Amended Credit Agreement provides for a $400 million senior secured term loan (the “Term Loan”) and a $900 million senior secured revolving facility (the “Revolving Facility”), each with a five-year term. The Term Loan was repayable in quarterly installments, which began on June 30, 2018. We repaid the Term Loan in full on December 31, 2020. A total of up to $50 million of the Revolving Facility is available for the issuance of letters of credit, up to $10 million of the Revolving Facility is available for swingline loans, and up to $100 million of the Revolving Facility could be borrowed under certain foreign currencies.

As of September 30, ~~2017, $225.0~~2021, $200.0 million under ~~a term loan, $245.0 million under our revolving credit facility,~~the Revolving Facility and ~~$0.8~~$1.0 million in letters of credit were outstanding under ~~our senior secured credit facility.~~the Second Amended Credit Agreement.

As of September 30, ~~2017,~~2021, the interest rate on the borrowings under ~~our senior secured credit facility~~the Second Amended Credit Agreement was LIBOR plus ~~2.25%~~1.50%, which totaled ~~3.49%~~1.58%. We were in compliance with all covenants under the ~~senior secured credit facility agreement~~Second Amended Credit Agreement as of September 30, ~~2017.~~2021.

In connection with the sale of our EPSibusiness on October 15, 2020, which is further discussed in Note 5, “Business Combinations and Divestitures”, the terms of our Second Amended Credit Agreement required us to make a mandatory prepayment of our Term Loan in the amount of $19.0 million on October 29, 2020.

In connection with the sale of our CarePort business on December 31, 2020, which is further discussed in Note 5, “Business Combinations and Divestitures”, the terms of our Second Amended Credit Agreement required us to make a mandatory prepayment of our Term Loan in the amount of $161.0 million on December 31, 2020.

On August 7, 2019, we entered into a First Amendment to the Second Amended Credit Agreement in order to remain compliant with the covenants of our Second Amended Credit Agreement. The First Amendment provided the financial flexibility to settle the U.S. Department of Justice’s investigations as discussed in Note 14, “Contingencies”, while maintaining our compliance with the covenants of our Second Amended Credit Agreement. None of the original terms of our Second Amended Credit Agreement relating to scheduled future principal payments, applicable interest rates and margins or borrowing capacity under our Revolving Facility were amended.

On July 20, 2020, we entered into a Second Amendment to the Second Amended Credit Agreement. None of the original terms of our Second Amended Credit Agreement relating to scheduled future principal payments, applicable interest rates and margins or borrowing capacity under our Revolving Facility were amended. In connection with this amendment, we incurred fees and other costs totaling $1.4 million, of which a majority was capitalized.

As of September 30, ~~2017,~~2021, we had ~~$304.2~~$699.0 million available borrowing capacity, net of outstanding letters of credit, under ~~our revolving credit facility.~~the Revolving Facility. There can be no assurance that we will be able to draw on the full available balance of ~~our revolving credit facility if~~ the financial institutions that have extended such credit commitments become unwilling or unable to fund such borrowings. Refer to Note 15, “Subsequent Events,” for information regarding an additional borrowing of $185.0 million under our revolving credit facility to fund a business acquisition that occurred subsequent to September 30, 2017.

~~As of September 30, 2017, the if-converted value of the 1.25% Notes did not exceed the 1.25% Notes’ principal amount.~~

As of September 30, 2017, $480.5 million under the Netsmart First Lien Term Loan, $167.0 million under the Netsmart Second Lien Term Loan and no amounts under the Netsmart Revolving Facility (collectively, the “Credit Agreements”) were outstanding.

As of September 30, 2017, the interest rate on the borrowings under the Netsmart First Lien Term Loan was Adjusted LIBO plus 4.50%, which totaled 5.83%, the interest rate on the borrowings under the Netsmart Second Lien Term Loan was Adjusted LIBO plus 9.50%, which totaled 10.82%, and the interest rate on the borrowings under the Netsmart Revolving Facility was Adjusted LIBO plus 4.75%, which totaled 6.08%. Netsmart was in compliance with all covenants under its Credit Agreements as of September 30, 2017.

As of September 30, 2017, Netsmart had $50.0 million available, with no outstanding letters of credit commitments, under the Netsmart Revolving Facility. There can be no assurance that Netsmart will be able to draw on the full available balance of the Netsmart Revolving Facility if the financial institutions that have extended such credit commitments become unwilling or unable to fund such ~~borrowings.~~borrowings or if we are unable to maintain compliance with applicable covenants.

The issuance in December 2019 of the combined $218.0 million aggregate principal amount of the 0.875% Convertible Senior Notes resulted in $0.7 million in debt issuance costs, which were paid in January 2020. We have separately recorded liability and equity components of the 0.875% Convertible Senior Notes, including any discounts and issuance costs, by allocating the proceeds from the issuance between the liability component and the embedded conversion option, or equity component. This allocation was completed by first estimating an interest rate at the time of issuance for similar notes that do not include an embedded conversion option. The semi-annual interest rate of 1.95% was used to compute the initial fair value of the liability component, which totaled $177.9 million at the time of issuance. The excess of the initial proceeds received from the 0.875% Convertible Senior Notes and the $177.9 million liability component was allocated to the equity component, which totaled $40.1 million at the time of issuance before deducting any paid capped call fees. The equity component of $40.1 million, the $17.2 million in paid capped call fees and an allocation of $1.1 million in combined discounts and issuance costs were recorded in Additional paid-in capital within the consolidated balance sheets in December 2019. These were recorded as a discount that will be accreted into interest expense through January 1, 2027 using the interest method. In June 2020, we paid $7.7 million to repurchase $10.1 million of the aggregate principal amount of the 0.875% Convertible Senior Notes, which resulted in a $0.5 million gain. In connection with the repurchase, the capped call transaction was partially terminated, and we received $0.3 million, which resulted in a recognition of $0.8 million in equity to offset the capped call fees and a $0.5 million loss. The remaining principal amount of the 0.875% Convertible Senior Notes at September 30, 2021 totaled $207.9 million. The carrying value of the combined equity component, net of capped call fees, issuance costs and accretion, at September 30, 2021 totaled $12.2 million.

The following table summarizes future debt principal payment obligations as of September 30, ~~2017:~~2021:

(In thousands)

Total

Remainder of 2017

2018

2019

2020

2021

Thereafter

1.25% Cash Convertible Senior Notes ⁽¹⁾

$
345,000

$
0

$
0

$
0

$
345,000

$
0

$
0

Term Loan

225,000

6,250

28,125

40,625

150,000

0

0

Revolving Facility ⁽²⁾

245,000

0

0

0

245,000

0

0

Netsmart Non-Recourse Debt ⁽²⁾

First Lien Term Loan

480,533

1,217

4,866

4,866

4,866

4,866

459,852

Second Lien Term Loan

167,000

0

0

0

0

0

167,000

Total debt

$
1,462,533

$
7,467

$
32,991

$
45,491

$
744,866

$
4,866

$
626,852


(In thousands)	Total		Remainder of 2021		2022		2023		2024		2025		Thereafter
0.875% Convertible Senior Notes ⁽¹⁾	$	207,911	$	0	$	0	$	0	$	0	$	0	$	207,911
Revolving Facility ⁽²⁾		200,000		0		0		200,000		0		0		0
Total debt	$	407,911	$	0	$	0	$	200,000	$	0	$	0	$	207,911

⁽¹⁾ ~~Assumes no cash conversions of the 1.25% Notes prior to their maturity on July 1, 2020.~~

⁽²⁾ ~~Assumes no additional borrowings after September 30, 2017, payment of any required periodic installments of principal and that all drawn amounts are repaid upon maturity.~~

We account for income taxes under FASB Accounting Standards Codification 740, “Income ~~Taxes~~Taxes” (“ASC 740”). We calculate the quarterly tax provision consistent with the guidance provided by ASC ~~740-270,~~740, whereby we forecast the estimated annual effective tax rate and then apply that rate to the year-to-date pre-tax book (loss) income. The effective tax rate may be subject to fluctuations during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective rate, including factors such as the valuation allowances against deferred tax assets, the recognition or de-recognition of tax benefits related to uncertain tax positions, or changes in or the interpretation of tax laws in jurisdictions where the Company conducts business. There is no tax benefit recognized on certain of the net operating losses incurred due to insufficient evidence supporting the Company’s ability to use these losses in the future. The effective tax rates were as follows:

Our provision for income taxes differs from the tax computed at the U.S. federal statutory income tax rate primarily due ~~primarily~~ to ~~valuation allowance,~~ permanent differences, income attributable to foreign jurisdictions taxed at ~~lower~~different rates, state taxes, tax credits and certain discrete ~~items.~~items including a windfall benefit of $4.6 million for the nine months ended September 30, 2021 and a shortfall expense of $6.9 million for the nine months ended September 30, 2020. Our effective tax ~~rate~~rates for the three and nine months ended September 30, ~~2017,~~2021, compared with the prior year comparable periods, ~~differs~~differ primarily due to ~~$64.2~~the fact that the permanent items, credits and the impact of foreign earnings had more impact on the pre-tax income of $21.3 million ~~of valuation allowance~~and $56.6 million in the three and nine months ended September 30, ~~2017 for deferred taxes~~2021, respectively, compared to the impact of these items on a ~~capital~~pre-tax loss ~~carryforward, which can only can be deductible to~~of $18.1 million and $74.6 million for the ~~extent of offsetting capital gains.~~three and nine months ended September 30, 2020, respectively.

In evaluating our ability to recover our deferred tax assets within the jurisdictions from which they arise, we consider all available evidence, including scheduled reversals of deferred tax liabilities, tax-planning strategies, and results of recent operations. In evaluating the objective evidence that historical results provide, we consider three years of cumulative operating income (loss). ~~We recorded $67.8 million of valuation allowance during~~During the nine months ended September 30, ~~2017~~2021, we released valuation allowances of $0.7 million related to ~~deferred tax assets associated with~~U.S. and foreign net operating loss ~~carryforwards, credit carryforwards and other deferred tax assets not expected to be realized.~~

Effective January 1, 2017, we adopted ASU 2016-09. The guidance in ASU 2016-09, among other things, will require all income tax effects of share-based awards to be recognized in the statement of operations when the awards vest or are settled as a discrete item in the period in which they occur. In the nine months ended September 30, 2017, we recorded $1.5 million of tax expense for awards in which the compensation cost recorded was higher than the tax deductions for the awards. We recorded an offsetting release of valuation allowance in the quarter of $1.5 million, the effect of which has already been included in the valuation allowance amount recorded in the nine months ended September 30, 2017 noted above. ASU 2016-09 requires entities to recognize excess tax benefits, regardless of whether the tax deduction reduces taxes payable. As part of adopting the new standard, we recorded a gross cumulative effect adjustment of $5.6 million to the opening balance of accumulated deficit to create a deferred tax asset to recognize excess tax benefits not previously recorded. The net decrease to accumulated deficit was $1.8 million due to the recognition of a corresponding valuation allowance of $3.8 million.carryforwards.

Our unrecognized income tax benefits were ~~$12.0~~$29.9 million and ~~$11.4~~$28.9 million as of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively. If any portion of our unrecognized tax benefits is recognized, it could impact our effective tax rate. The tax reserves are reviewed periodically and adjusted ~~in light of~~considering changing facts and circumstances, such as progress of tax audits, lapse of applicable statutes of limitations and changes in tax law.

The following tables provide information about the fair values of our derivative financial instruments as of the respective balance sheet dates:

September 30, 2017

September 30, 2021

Asset Derivatives

Liability Derivatives

Asset Derivatives

(In thousands)

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives qualifying as cash flow hedges:

Foreign exchange contracts

Prepaid expenses and

other current assets

1,362

Accrued expenses

Prepaid expenses and other current assets

Derivatives not subject to hedge accounting:

1.25% Call Option

Other assets

44,882

N/A

1.25% Embedded cash conversion option

N/A

Other liabilities

45,973

Total derivatives

46,244

45,973

December 31, 2016

December 31, 2020

Asset Derivatives

Liability Derivatives

Asset Derivatives

(In thousands)

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives qualifying as cash flow hedges:

Foreign exchange contracts

Prepaid expenses and

other current assets

1,021

Accrued expenses

Prepaid expenses and other current assets

1,509

Derivatives not subject to hedge accounting:

1.25% Call Option

Other assets

17,080

N/A

1.25% Embedded cash conversion option

N/A

Other liabilities

17,659

Total derivatives

18,101

17,659

1,509

We have entered into non-deliverable forward foreign currency exchange contracts with reputable banking counterparties ~~in order~~ to hedge a portion of our forecasted future Indian Rupee-denominated (“INR”) expenses against foreign currency fluctuations between the United States dollar and the INR. These forward contracts cover a ~~decreasing~~ percentage of forecasted monthly INR expenses over time. As of September 30, ~~2017, there were 9~~2021, we had 0 forward contracts ~~outstanding that were staggered to mature monthly starting in October 2017 and ending in June 2018.~~outstanding. In the future, we may enter into additional forward contracts to increase the amount of hedged monthly INR expenses or initiate hedges for monthly periods beyond June 2018. As of September 30, 2017, the notional amount of each outstanding forward contract was 120 million INR, or the equivalent of $1.8 million, based on the exchange rate between the United States dollar and the INR in effect as of September 30, 2017. These amounts also approximate the forecasted future INR expenses we target to hedge in any one month in the future.

~~The critical terms of the forward contracts and the related hedged forecasted future expenses matched and allowed us to designate the forward contracts as highly effective cash flow~~ hedges. The effective portion of the change in fair value is initially recorded in accumulated other comprehensive loss (“AOCI”) and subsequently reclassified to income in the period in which the cash flows from the associated hedged transactions affect income. Any ineffective portion of the change in fair value of the cash flow hedges is recognized in current period income. During the three and nine months ended September 30, 2017, no amount was excluded from the effectiveness assessment and no gains or losses were reclassified from AOCI into income as a result of forecasted transactions that failed to occur. As of September 30, 2017, we estimate that $1.4 million of net unrealized derivative gains included in AOCI will be reclassified into income within the next twelve months.

The following tables show the impact of derivative instruments designated as cash flow hedges on the consolidated statements of operations and the consolidated statements of comprehensive loss:

	Amount of Gain (Loss) Recognized in OCI (Effective Portion)					Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)				Amount of Gain (Loss) Recognized in OCI					Amount of Gain (Loss) Reclassified from AOCI into Income
(In thousands)	Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017		Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017		Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021		Location of Gain (Loss) Reclassified from AOCI into Income	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
Foreign exchange contracts	$	16	$	2,323	Cost of Revenue	$	241	$	674	$	0	$	121	Cost of Revenue	$	0	$	611
					Selling, general and administrative expenses		184		515					Selling, general and administrative expenses		0		351
					Research and development	$	283	$	793					Research and development	$	0	$	668

	Amount of Gain (Loss) Recognized in OCI (Effective Portion)					Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)				Amount of Gain (Loss) Recognized in OCI					Amount of Gain (Loss) Reclassified from AOCI into Income
(In thousands)	Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016		Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016		Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020		Location of Gain (Loss) Reclassified from AOCI into Income	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Foreign exchange contracts	$	971	$	1,172	Cost of Revenue	$	88	$	84	$	1,280	$	1,798	Cost of Revenue	$	107	$	71
					Selling, general and administrative expenses		71		68					Selling, general and administrative expenses		52		34
					Research and development	$	126	$	120					Research and development	$	111	$	73

In June 2013, concurrent with the issuance of the 1.25% Notes, we entered into privately negotiated hedge transactions with certain of the initial purchasers of the 1.25% Notes (collectively, the “1.25% Call Option”). Assuming full performance by the counterparties, the 1.25% Call Option is intended to offset cash payments in excess of the principal amount due upon any conversion of the 1.25% Notes.

The 1.25% Call Option, which is indexed to our common stock, is a derivative asset that requires mark-to-market accounting treatment (due to the cash settlement features) until the 1.25% Call Option settles or expires. The 1.25% Call Option is measured and reported at fair value on a recurring basis, within Level 3 of the fair value hierarchy. For further discussion of the inputs used to determine the fair value of the 1.25% Call Option, refer to Note 3, “Fair Value Measurements and Long-term Investments.”

The 1.25% Call Option does not qualify for hedge accounting treatment. Therefore, the change in fair value of these instruments is recognized immediately in our consolidated statements of operations in Other income, net. Because the terms of the 1.25% Call Option are substantially similar to those of the 1.25% Notes embedded cash conversion option, discussed below, we expect the net effect of those two derivative instruments on our earnings to be minimal.

The embedded cash conversion option within the 1.25% Notes is required to be separated from the 1.25% Notes and accounted for separately as a derivative liability, with changes in fair value reported in our consolidated statements of operations in Other income, net until the cash conversion option settles or expires. The initial fair value liability of the embedded cash conversion option was $82.8 million, which simultaneously reduced the carrying value of the 1.25% Notes (effectively an original issuance discount). The embedded cash conversion option is measured and reported at fair value on a recurring basis, within Level 3 of the fair value hierarchy. For further discussion of the inputs used to determine the fair value of the embedded cash conversion option, refer to Note 3, “Fair Value Measurements and Long-term Investments.”

~~The following table shows the net impact of the changes in fair values of the 1.25% Call Option and the 1.25% Notes’ embedded cash conversion option in the consolidated statements of operations:~~

Changes in the balances of each component included in ~~AOCI~~accumulated other comprehensive income (loss) (“AOCI”) are presented in the tables below. All amounts are net of ~~tax and exclude non-controlling interest.~~tax.

⁽¹⁾ ~~Net of taxes of $166 thousand for unrealized net gains on foreign exchange contract derivatives.~~

⁽²⁾~~Net of taxes of $521 thousand for unrealized net gains on foreign exchange contract derivatives.~~

The following tables reflect the tax effects allocated to each component of other comprehensive income (loss) (“OCI”):

Three Months Ended September 30,

2017

2016

(In thousands)

Before-Tax Amount

Tax Effect

Net Amount

Before-Tax Amount

Tax Effect

Net Amount

Foreign currency translation adjustments

$
693

$
0

$
693

$
150

$
0

$
150

Available for sale securities:

Net loss arising during the period

(20,704
)

1

(20,703
)

9,750

0

9,750

Net loss reclassified into income ⁽¹⁾

20,700

0

20,700

0

0

0

Net change in unrealized gains (losses) on available for sale securities

(4
)

1

(3
)

9,750

0

9,750

Derivatives qualifying as cash flow hedges:

Foreign exchange contracts:

Net gains (losses) arising during the period

16

(6
)

10

971

(382
)

589

Net (gains) losses reclassified into income

(708
)

276

(432
)

(285
)

112

(173
)
Net change in unrealized (losses) gains on foreign exchange contracts

(692
)

270

(422
)

686

(270
)

416

Net (loss) gain on cash flow hedges

(692
)

270

(422
)

686

(270
)

416

Other comprehensive income (loss)

$
(3
)

$
271

$
268

$
10,586

$
(270
)

$
10,316

	Three Months Ended September 30,
	2021								2020
(In thousands)	Before-Tax Amount			Tax Effect		Net Amount			Before-Tax Amount			Tax Effect			Net Amount
Foreign currency translation adjustments	$	(805	)	$	0	$	(805	)	$	983		$	0		$	983
Derivatives qualifying as cash flow hedges:
Foreign exchange contracts:
Net gains (losses) arising during the period		0			0		0			1,280			(330	)		950
Net (gains) losses reclassified into income		0			0		0			(271	)		70			(201	)
Net change in unrealized gains (losses) on foreign exchange contracts		0			0		0			1,009			(260	)		749
Other comprehensive (loss) income	$	(805	)	$	0	$	(805	)	$	1,992		$	(260	)	$	1,732

Nine Months Ended September 30,

2017

2016

(In thousands)

Before-Tax Amount

Tax Effect

Net Amount

Before-Tax Amount

Tax Effect

Net Amount

Foreign currency translation adjustments

$
3,040

$
0

$
3,040

$
(49
)

$
0

$
(49
)
Available for sale securities:

Net loss arising during the period

(106,358
)

3

(106,355
)

(8,365
)

0

(8,365
)
Net loss reclassified into income ⁽¹⁾

162,865

0

162,865

0

0

0

Net change in unrealized gains (losses) on available for sale securities

56,507

3

56,510

(8,365
)

0

(8,365
)
Derivatives qualifying as cash flow hedges:

Foreign exchange contracts:

Net gains (losses) arising during the period

2,323

(902
)

1,421

1,172

(462
)

710

Net (gains) losses reclassified into income

(1,982
)

773

(1,209
)

(272
)

107

(165
)
Net change in unrealized gains (losses) on foreign exchange contracts

341

(129
)

212

900

(355
)

545

Net gain (loss) on cash flow hedges

341

(129
)

212

900

(355
)

545

Other comprehensive income (loss)

$
59,888

$
(126
)

$
59,762

$
(7,514
)

$
(355
)

$
(7,869
)

In addition to commitments and obligations in the ordinary course of business, we are currently subject to various legal proceedings and claims that have not been fully adjudicated. We intend to vigorously defend ourselves, as appropriate, in these matters.

No less than quarterly, we review the status of each significant matter and assess our potential financial exposure. We accrue a liability for an estimated loss if the potential loss from any legal proceeding or claim is considered probable and the amount can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether the amount of an exposure is reasonably estimable, and accruals are based only on the information available to our management at the time the judgment is made.

The outcome of legal proceedings is inherently uncertain, and we may incur substantial defense costs and expenses defending any of these matters. In the opinion of our management, the ultimate disposition of pending legal proceedings or claims will not have a material adverse effect on our consolidated financial position, liquidity or results of operations. However, if one or more of these legal proceedings were resolved against or settled by us in a reporting period for amounts in excess of our management’s expectations, our consolidated financial statements for that and subsequent reporting ~~period~~periods could be materially adversely affected. Additionally, the resolution of a legal proceeding against us could prevent us from offering our products and services to current or prospective clients or cause us to incur increased compliance costs, either of which could further adversely affect our operating results.

On May 1, 2012, Physicians Healthsource, Inc. filed a class action complaint in the U.S. District Court for the Northern District of Illinois against us alleging violations of the Telephone Consumer Protection ActThe Enterprise Information Solutions business (the ~~“TCPA”~~“EIS Business”). On June 2, 2017, the court denied Allscripts’ motion for summary judgment, and also denied Plaintiff’s motion for class certification. Plaintiff did not seek appellate review of the Court’s denial of class certification, so the only claim remaining in the case is Plaintiff’s individual TCPA claim. On August 11, 2017, Plaintiff filed a motion for summary judgment against Allscripts. On September 25, the court stayed this matter pending the outcome of the appeal in ~~Brodsky v. Humana Dental Ins. Co., (Case 17-8019) 7th Cir., which may have implications on the outcome of Plaintiff’s motion in this case.~~

~~The EIS Business~~ acquired from McKesson Corporation (“McKesson”) on October 2, 2017 ~~(as discussed below under Note 15, “Subsequent Events”)~~ is subject to a May 2017 civil investigative demand ~~(CID)~~(“CID”) related to the Horizon Clinicals software from the U.S. Attorney’s Office for the Eastern District of New York. In August 2018, McKesson received an additional CID (together with the May 2017 CID, the “McKesson CIDs”), which relates to the Paragon software. The ~~CID requests~~McKesson CIDs request documents and information related to the certification McKesson obtained in connection with the U.S. Department of Health and Human Services’ Electronic Health Record Incentive Program. McKesson has agreed, with respect to the ~~CID,~~CIDs, to indemnify Allscripts for amounts paid or payable to the government (or any private relator) involving any products or services marketed, sold or licensed by the EIS Business as of or prior to the closing of the acquisition. In October 2021, Allscripts received a CID seeking information about its acquisition of the EIS Business from McKesson and the Horizon Clinicals software. McKesson has agreed to assume defense of this CID.

Practice Fusion, acquired by Allscripts on February 13, 2018, received in March 2017 a request for documents and information from the U.S. Attorney’s Office for the District of Vermont pursuant to a CID. Between April 2018 and June 2019, Practice Fusion received from the U.S. Department of Justice (the “DOJ”) seven additional requests for documents and information through four additional CIDs and three Health Insurance Portability and Accountability Act (“HIPAA”) subpoenas. The document and information requests received by Practice Fusion related to both the certification Practice Fusion obtained in connection with the U.S. Department of Health and Human Services’ Electronic Health Record Incentive Program and Practice Fusion’s compliance with the Anti-Kickback Statute (“AKS”) and HIPAA as it relates to certain business practices engaged in by Practice Fusion. In March 2019, Practice Fusion received a grand jury subpoena in connection with a criminal investigation related to Practice Fusion’s compliance with the AKS. On August 6, 2019, Practice Fusion reached an agreement in principle with the DOJ to resolve all of the DOJ’s outstanding civil and criminal investigations, including the investigation by the U.S. Attorney’s Office for the District of Vermont, and we announced that on January 27, 2020, Practice Fusion entered into a deferred prosecution agreement (the “Deferred Prosecution Agreement”) and various civil settlement agreements, including with the Medicaid programs for each U.S. state, the District of Columbia and Puerto Rico (collectively, the “Settlement Agreements”) resolving the investigations conducted by the DOJ and the U.S. Attorney’s Office. The Settlement Agreements required Practice Fusion to, among other matters, pay a criminal fine of $25.3 million, a forfeiture payment of $959,700 and a civil settlement of $118.6 million, which includes $5.2 million designated for the state Medicaid program expenditures, all of which, as of December 31, 2020, have been paid in full. The Deferred Prosecution Agreement required Practice Fusion to retain an Oversight Organization to oversee the Practice Fusion’s implementation of certain compliance measures and ongoing compliance efforts. On August 17, 2021, Practice Fusion’s initial Oversight Organization resigned, and on August 25, 2021, Practice Fusion received a notice from the U.S. Attorney’s Office for the District of Vermont stating Practice Fusion was in breach of the Deferred Prosecution Agreement due to such resignation. On September 17, 2021, Practice Fusion engaged a new Oversight Organization, and it continues to engage in discussions with the U.S. Attorney’s Office concerning the claim that a breach of the Deferred Prosecution Agreement occurred.

During 2020, we implemented a strategic initiative to sell 2 of our businesses, EPSi and CarePort. Since both businesses were part of the same strategic initiative and were sold within the same period, the combined sale of EPSi and CarePort represented a strategic shift that had a major effect on our operations and financial results. As of December 31, 2020, these businesses were reported together as discontinued operations.

On October 15, 2020, we completed the sale of our EPSi business. Prior to the sale, EPSi was part of the “Unallocated Amounts” category as it did not meet the requirements to be a reportable segment nor the criteria to be aggregated into our two reportable segments. On its own, the divestiture of the EPSi business did not represent a strategic shift that had a major effect on our operations and financial results. However, the combined sale of EPSi and CarePort represented a strategic shift that had a major effect on our operations and financial results. Therefore, EPSi was treated as a discontinued operation.

On December 31, 2020, we completed the sale of our CarePort business. Prior to the sale, CarePort was part of the former Data, Analytics and Care Coordination reportable segment. On its own, the divestiture of the CarePort business represented a strategic shift that had a major effect on our operations and financial results.

The following table summarizes the major classes of assets and liabilities of EPSi and CarePort, as reported on the consolidated balance sheets as of September 30, 2021 and December 31, 2020:

~~13.~~The following table summarizes the major income and expense line items of EPSi and CarePort as reported in the consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020. The activity during the three and nine months ended September 30, 2021 relates to certain adjustments made in connection with the sale of EPSi and CarePort, primarily of which relates to net working capital adjustments that impacted the gain on the sale of the discontinued operations.

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2021			2020			2021			2020
Major income and expense line items related to EPSi and CarePort:
Revenue:
Software delivery, support and maintenance	$	6		$	32,894		$	6		$	96,807
Client services		0			3,517			0			11,883
Total revenue		6			36,411			6			108,690
Cost of revenue:
Software delivery, support and maintenance		15			2,900			(178	)		9,254
Client services		4			4,553			149			13,431
Amortization of software development and acquisition-related assets		0			2,499			0			7,623
Total cost of revenue		19			9,952			(29	)		30,308
Gross (loss) profit		(13	)		26,459			35			78,382
Selling, general and administrative expenses		2			3,788			76			12,974
Research and development		0			2,118			(32	)		7,133
Amortization of intangible assets		0			7			0			22
(Loss) income from discontinued operations for EPSi and CarePort		(15	)		20,546			(9	)		58,253
Interest expense		0			(995	)		0			(3,634	)
Other income, net		1			0			2			0
Gain on sale of discontinued operations		0			0			647			0
(Loss) income from discontinued operations for EPSi and CarePort before income taxes ⁽¹⁾		(14	)		19,551			640			54,619
Income tax provision		0			(5,047	)		(169	)		(14,098	)
(Loss) income from discontinued operations, net of tax for EPSi and CarePort ⁽²⁾	$	(14	)	$	14,504		$	471		$	40,521

(1) (Loss) income from discontinued operations for EPSi and CarePort does not agree to the consolidated statements of operations for the three and nine months ended September 30, 2020, due to residual amounts related to Netsmart (as defined below). Refer to Note 17, “Supplemental Disclosures” for additional information.

(2) (Loss) income from discontinued operations, net of tax for EPSi and CarePort does not agree to the consolidated statements of operations for the three and nine months ended September 30, 2020 due to residual amounts related to Netsmart (as defined below). Refer to Note 17, Supplemental Disclosures” for additional information.

We primarily derive our revenues from sales of our proprietary software (either as a direct license sale or under a subscription delivery model), which also serves as the basis for our recurring service contracts for software support and maintenance and certain transaction-related services. In addition, we provide various other client services, including installation, and managed services, such as outsourcing, private cloud hosting and revenue cycle management.

During the third quarter of 2021, we realigned our reporting structure as a result of certain organizational changes. As a result, we changed the presentation of our reportable segments to Hospital and Large Physician Practices and Veradigm. As of September 30, ~~2017,~~2021, we had ~~eight~~2 operating segments. The operating segments ~~which~~ are ~~aggregated into three~~equivalent to the reportable segments. The ~~Clinical~~Hospital and Financial Solutions reportable segment includes the Ambulatory, Hospitals and Health Systems, previously named “Acute”, and the Payer and Life Sciences strategic business units, each of which represents a separate operating segment. This reportableLarge Physician Practices segment derives its revenue from the sale of integrated clinical ~~software applications~~ and financial ~~and information~~management solutions, which primarily include ~~electronic health record-related software, financial and practice management~~EHR-related software, related installation, support and maintenance, outsourcing and private cloud ~~hosting, revenue cycle management, training and electronic claims administration services.~~hosting. The ~~Population Health reportable segment is comprised of four separate operating segments: Population Health, FollowMyHealth~~^®~~, EPSi~~^TM ~~and NantHealth. This reportable~~Veradigm segment derives its revenue from ~~the sale of health management~~payer and ~~coordinated care~~life sciences solutions, which are mainly targeted at ~~hospitals, health systems,~~payers, life sciences companies and other ~~care facilities~~key healthcare stakeholders; the sale of EHR software to single-specialty and ~~Accountable Care Organizations (“ACOs”).~~small and mid-sized physician practices, including related clinical, financial, administrative and operational solutions; and software applications for patient engagement. These solutions enable clients to ~~connect,~~ transition, analyze, ~~and~~ coordinate care and improve the quality, efficiency and value of healthcare delivery across the entire care community. The ~~NantHealth operating~~“Unallocated Amounts” category consists of the 2bPrecise business, certain products that were shifted from the previous Core Clinical and Financial Solutions reportable segment ~~was created from our acquisition~~due to the organizational changes (“Certain Products”), transfer pricing revenues and as of January 1, 2021 also includes certain ~~assets related to NantHealth’s provider/patient engagement solutions business on August 25, 2017.~~corporate-related expenses. The ~~operating results associated with this business have been~~amounts included in the ~~population health~~“Unallocated Amounts” category for 2bPrecise and Certain Products do not meet the requirements to be reportable segments nor the criteria to be aggregated into the two reportable segments. The segment ~~results since the date of the acquisition. Refer~~disclosures below have been revised to Note 2, “Business Combinations,” for additional information related to this acquisition. The Netsmart reportable segment is comprised of the Netsmart strategic business unit, which represents a separate operating segment. The Netsmart segment also includes the results of HealthMEDX and DeVero, which were acquired subsequentconform to the Netsmart Transaction. Refer to Note 2, “Business Combinations” for further details regarding the acquisition of these businesses. Netsmart operates in the home care and behavioral healthcare information technology field throughout the United States and provides software and technology solutions to the health and human services industry, which comprises behavioral health, addiction treatment, intellectual and developmental disability services, child and family services, and public health segment, as well as to post-acute home care organizations.current year presentation.

Our ~~Chief Operating Decision Maker (“CODM”)~~chief operating decision maker uses segment revenues, gross profit and income (loss) from operations as measures of performance and to make decisions onabout the allocation of resources. With the exception of the Netsmart segment, in determining these performance measures, we do not include in revenue the amortization of acquisition-related deferred revenue adjustments, which reflect the fair value adjustments to deferred revenues acquired in a business acquisition. With the exception of the Netsmart segment, we also exclude the amortization of intangible assets, stock-based compensation expense, non-recurring expenses and transaction-related costs, and non-cash asset impairment charges from the operating segment data provided to our CODM. Non-recurring expenses relate to certain severance, product consolidation, legal, consulting and other charges incurred in connection with activities that are considered one-time. Accordingly, these amounts are not included in our reportable segment results and are included in an “Unallocated Amounts” category within our segment disclosure. The “Unallocated Amounts” category also includes corporate general and administrative expenses (including marketing expenses), which are centrally managed, as well as revenue and the associated cost from the resale of certain ancillary products, primarily hardware, other than the respective amounts associated with the Netsmart segment. The historical results of our Homecare^TM business prior to the Netsmart Transaction, which were previously reported as part of Population Health, are also included in the “Unallocated Amounts” category. The Netsmart segment, as presented, includes all revenue and expenses incurred by Netsmart since it operates as a stand-alone business entity and its resources allocation and performance are reviewed and measured at such all-inclusive level. The eliminations of intercompany transactions between Allscripts and Netsmart are included in the “Unallocated Amounts” category. We do not track our assets by segment.

Three Months Ended
September 30,

Nine Months Ended
September 30,

(In thousands)

2017

2016

2017

2016

Revenue:

Clinical and Financial Solutions

$
303,323

$
276,503

$
870,452

$
830,200

Population Health

60,515

61,722

179,313

170,803

Netsmart

83,618

52,621

235,046

96,854

Unallocated Amounts

1,986

1,538

4,197

26,606

Total revenue

$
449,442

$
392,384

$
1,289,008

$
1,124,463

Gross Profit:

Clinical and Financial Solutions

$
130,224

$
113,677

$
363,228

$
349,017

Population Health

41,947

46,337

125,535

125,152

Netsmart

39,644

17,378

111,489

32,327

Unallocated Amounts

(9,896
)

(11,233
)

(32,190
)

(21,755
)
Total gross profit

$
201,919

$
166,159

$
568,062

$
484,741

Income (loss) from operations:

Clinical and Financial Solutions

$
68,837

$
59,921

$
186,846

$
188,145

Population Health

29,298

32,977

86,282

81,895

Netsmart

7,153

(6,426
)

23,910

(8,825
)
Unallocated Amounts

(79,915
)

(69,598
)

(239,298
)

(213,871
)
Total income from operations

$
25,373

$
16,874

$
57,740

$
47,344

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2021			2020			2021			2020
Revenue:
Hospital and Large Physician Practices	$	225,685		$	233,630		$	695,427		$	712,538
Veradigm		137,168			125,073			396,987			385,525
Unallocated Amounts		6,419			6,915			18,924			18,223
Total revenue	$	369,272		$	365,618		$	1,111,338		$	1,116,286

Gross profit:
Hospital and Large Physician Practices	$	79,135		$	73,359		$	249,594		$	210,582
Veradigm		65,698			56,685			187,963			180,981
Unallocated Amounts		3,941			5,094			13,015			13,109
Total gross profit	$	148,774		$	135,138		$	450,572		$	404,672

Income (loss) from operations:
Hospital and Large Physician Practices	$	(6,160	)	$	(16,913	)	$	(6,995	)	$	(75,982	)
Veradigm		16,877			8,820			46,386			24,518
Unallocated Amounts		1,387			(3,068	)		(3,572	)		(11,338	)
Total income (loss) from operations	$	12,104		$	(11,161	)	$	35,819		$	(62,802	)

The majority of the restricted cash balance as of September 30, ~~2017~~2021 represents ~~Netsmart’s cash deposits to maintain two letters of credit with a financial institution related to customer agreements.~~

~~On October 2, 2017, Allscripts Healthcare, LLC, a wholly-owned subsidiary~~lease deposits. The majority of the Company (“Healthcare LLC”), completed the transactions contemplated by a purchase agreement (the “Purchase Agreement”) with McKesson Corporation (“McKesson”), pursuant to which Healthcare LLC purchased McKesson’s Enterprise Information Solutions Business division (the “EIS Business”), which provides certain software solutionsrestricted cash balance as of September 30, 2020 represents lease deposits and ~~services to hospitals and health systems, by acquiring all~~an escrow account established as part of the ~~outstanding equity interests~~acquisition of ~~two indirect, wholly-owned subsidiaries~~Netsmart LLC (“Netsmart”) in 2016, to be used by Netsmart to facilitate the integration of ~~McKesson for a purchase price of $185 million, subject to adjustments for net working capital and net debt.~~ The purchase price was funded through incremental borrowings under our debt facilities. The financial results of the EIS Business will be consolidated with our financial results starting on the date of the transaction. As of the date of this Form 10-Q, the preliminary allocation of the fair value of the consideration transferred has not yet been completed.Allscripts’ former Homecare^TM business.

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and other sections of this Quarterly Report on Form 10-Q (“Form 10-Q”) contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical fact or ~~pattern.~~pattern, including statements regarding the potential impacts of the COVID-19 pandemic and steps we have taken or plan to take in response thereto, statements related to the effect of macroeconomic trends, statements regarding evolving patient care models, statements regarding legislative, administrative and regulatory actions on our business and opportunities related to accumulated patient data, and statements regarding our expected future investment in research and development efforts. Forward-looking statements can also be identified by the use of words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guarantees of future performance. Actual results could differ significantly from those set forth in the forward-looking statements, and reported results should not be considered an indication of future ~~performance.~~ performance or events. Certain factors that could cause our actual results to differ materially from those described in the forward-looking statements include, but are not limited to: our ability to ~~those~~achieve the margin targets associated with our margin improvement initiatives within the contemplated time periods, if at all; the magnitude, severity and duration of the COVID-19 pandemic, including the impacts of the pandemic, along with the impacts of our responses and the responses by governments and other businesses to the pandemic, on our business, our employees, our clients and our suppliers; security breaches resulting in unauthorized access to our or our clients’ computer systems or data, including denial-of-services ransomware or other Internet-based attacks; the failure by Practice Fusion to comply with the terms of the settlement agreements with the U.S. Department of Justice (the “DOJ”); the costs and burdens of compliance by Practice Fusion with the terms of its settlement agreements with the DOJ; additional investigations and proceedings from governmental entities or third parties other than the DOJ related to the same or similar conduct underlying the DOJ’s investigations into Practice Fusion’s business practices; our ability to recover from third parties (including insurers) any amounts paid in connection with Practice Fusion’s settlement agreements with the DOJ and related inquiries; the expected financial results of businesses acquired by us; the successful integration of businesses acquired by us; the anticipated and unanticipated expenses and liabilities related to businesses acquired by us, including the civil investigation by the U.S. Attorney’s Office involving our Enterprise Information Solutions business; our failure to compete successfully; consolidation in our industry; current and future laws, regulations and industry initiatives; increased government involvement in our industry; the failure of markets in which we operate to develop as quickly as expected; our or our customers’ failure to see the benefits of government programs; changes in interoperability or other regulatory standards; our ability to maintain and expand our business with existing clients or effectively transition clients to newer products; the effects of the realignment of our sales, services and support organizations; market acceptance of our products and services; the unpredictability of the sales and implementation cycles for our products and services; our ability to manage future growth; our ability to introduce new products and services; our ability to establish and maintain strategic relationships; risks associated with investments and acquisitions; the performance of our products; our ability to protect our intellectual property rights; the outcome of legal proceedings involving us; our ability to hire, retain and motivate key personnel; performance by our content and service providers; liability for use of content; price reductions; our ability to license and integrate third-party technologies; risks related to global operations; variability of our quarterly operating results; risks related to our outstanding indebtedness; changes in tax rates or laws; business disruptions; our ability to maintain proper and effective internal controls; asset and long-term investment impairment charges; and the other factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2020 (our “Form 10-K”) under the heading “Risk Factors” and elsewhere. Certain factors that could cause Allscripts actual results to differ materially from those described in the forward-looking statements include, but are not limited to: the expected financial contribution and results of the Netsmart joint business entity, including consolidation for financial reporting purposes, the EIS business, and the provider/patient solutions business acquired from NantHealth; the successful integration of the EIS and the provider/patient solutions businesses; the anticipated and unanticipated expenses and liabilities related to the acquisition and the acquired EIS and provider/patient solutions businesses; Allscripts failure to compete successfully; consolidation in Allscripts industry; current and future laws, regulations and industry initiatives; increased government involvement in Allscripts industry; the failure of markets in which Allscripts operates to develop as quickly as expected; Allscripts or its customers’ failure to see the benefits of government programs; changes in interoperability or other regulatory standards; the effects of the realignment of Allscripts sales, services and support organizations; market acceptance of Allscripts products and services; the unpredictability of the sales and implementation cycles for Allscripts products and services; Allscripts ability to manage future growth; Allscripts ability to introduce new products and services; Allscripts ability to establish and maintain strategic relationships; risks related to the acquisition of new companies or technologies; the performance of Allscripts products; Allscripts ability to protect its intellectual property rights; the outcome of legal proceedings involving Allscripts; Allscripts ability to hire, retain and motivate key personnel; performance by Allscripts content and service providers; liability for use of content; security breaches; price reductions; Allscripts ability to license and integrate third party technologies; Allscripts ability to maintain or expand its business with existing customers; risks related to international operations; changes in tax rates or laws; business disruptions; Allscripts ability to maintain proper and effective internal controls; and asset and long-term investment impairment charges. The following discussion should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in Part I, Item 1, “Financial ~~Statements (unaudited)”~~Statements” in this Form 10-Q, as well as our Form 10-K filed with the Securities and Exchange Commission (the “SEC”). We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Each of the terms “we,” “us,” ~~“our”~~“our,” “Company,” or ~~“company”~~“Allscripts” as used herein refers collectively to Allscripts Healthcare Solutions, Inc. ~~and~~and/or its wholly-owned subsidiaries and controlled affiliates, unless otherwise stated.

We deliver information technology (“IT”) solutions and services to help healthcare organizations achieve optimal clinical, financial and operational results. We sell our solutions to physicians, hospitals, governments, health systems, health plans, ~~life-sciences~~life sciences companies, retail clinics, retail pharmacies, pharmacy benefit managers, insurance companies, employer wellness clinics and post-acute organizations, such as home health and hospice agencies. We help our clients improve the quality and efficiency of health care with solutions that include electronic health records (“EHRs”), information connectivity, private cloud hosting, outsourcing, analytics, patient ~~engagement, clinical decision support~~access and population health management. We derive our revenues primarily from sales of our proprietary software (either as a perpetual license sale or under a subscription delivery model), support and maintenance services, and managed services, such as outsourcing, private cloud hosting and revenue cycle management.

Our solutions empower healthcare professionals with the data, insights and connectivity to other caregivers they need to succeed in an industry that is rapidly changing from fee-for-service models to fee-for-value advanced payment models. We believe we offer some of the most comprehensive solutions in our industry today. Healthcare organizations can effectively manage patients and patient populations across all care settings using a combination of our physician, hospital, health system, post-acute care and population health management products and services. We believe these solutions will help transform health care as the industry seeks new ways to manage risk, improve quality and reduce costs.

Globally, healthcare providers continue to face the COVID-19 crisis, as well as an aging population and the challenge of caring for an increasing number of patients with chronic diseases. At the same time, practitioners worldwide are also under ~~increasing~~growing pressure to demonstrate the delivery of ~~high quality~~high-quality care at lower ~~costs. Population health management, analytics, connectivity based on open Application Programming Interfaces,~~costs and ~~patient engagement are strategic imperatives that can help address these challenges. In the United States, for example, such initiatives will be critical tools for success under the framework~~to fully embrace expectations of ~~the new Quality Payment Program (“QPP”), launched by the Centers for Medicare & Medicaid Services (“CMS”) in response to the passage of the Medicare Access and CHIP Reauthorization Act~~

(“MACRA”). As healthcare providers and payers migrate from volume-based to value-based care delivery, interoperable solutions that are connected to the consumer marketplace are the key to market leadership in the new healthcare reality.

We believe our solutions are delivering value to our clients by providing them with powerful connectivity, patient engagement and care coordination tools, enabling United States users to successfully participate in alternate payment models that reward high value care delivery. Population health management is commonly viewed as one of the critical next frontiers in healthcare delivery, and we expect this rapidly emerging area to be a key driver of our future growth, both domestically and globally.

Recent advances in molecular science and computer technology are creating opportunities for the delivery of personalized medicine solutions. We believe these solutions will transform the coordination and delivery of health care, ultimately improving patient outcomes.

Specific to the United States, the healthcare IT industry in which we operate is in the midst of a period of rapid evolution, primarily due to new laws and regulations, as well as changes in industry standards. Various incentives that exist today (including the EHR Incentive Program (a.k.a. Meaningful Use) and alternative payment models that reward high value care delivery) are rapidly moving health care toward a time where EHRs are as common as practice management systems in all provider offices. As a result, we believe that legislation, such as the aforementioned MACRA, as well as other government-driven initiatives, possibly at the state level, will continue to affect healthcare IT adoption and expansion, including products and solutions like ours. We also believe that we are well-positioned in the market to take advantage of the ongoing opportunity presented by these changes.

Given that we expect CMS will release further future regulations related to EHRs, even as we comply with previously published rules associated with the QPP, as well as Stage 3 of the Meaningful Use program for those organizations not eligible for the QPP, our industry is preparing for additional areas in which we must execute compliance. Similarly, our ability to achieve applicable product certifications, any changing frequency of the Office of the National Coordinator for Health Information Technology (“ONC”) certification program, and the length, if any, of additional related development and other efforts required to meet regulatory standards could materially impact our capacity to maximize the market opportunity. All of our market-facing EHR solutions, as well as the Allscripts EDTM, dbMotion and FollowMyHealth® products, have successfully completed the testing process and are certified as 2015 Edition-compliant by an ONC-Authorized Certification Body, in accordance with the applicable provider or hospital certification criteria adopted by the United States Secretary of Health and Human Services.

Conversations around the Medicare Sustainable Growth Rate reimbursement model concluded in the United States Congress in 2015 when the MACRA was passed, which further encouraged the adoption of health IT necessary to satisfy new requirements more closely associating the report of quality measurements to Medicare payments. With the finalization of the rule for the QPP in 2017, providers accepting payment from Medicare will have an opportunity to select one of two payment models: the Merit-based Incentive Payment System (“MIPS”) or an Advanced Alternative Payment Model (“APM”), as allowed by the regulation. These programs will require increased reporting on quality measures; additionally, the MIPS consolidates several preexisting incentive programs, including Meaningful Use and Physician Quality Reporting System, under one umbrella, as required by statute. The implementation of this new law could drive additional interest in our products among providers who were not eligible for or chose not to participate in the Health Information Technology for Economic and Clinical Health Act (“HITECH”) incentive program but now see a new reason to adopt EHRs and other healthefficient, patient-centered information technologies or by those needing to purchase more robust systems to help them be successful under the more complex MACRA requirements. Regulations released in the fourth quarter of 2016 in response to the MACRA also addressed, at least in part, current ambiguities among physician populations and healthcare organizations, enabling them to make strategic decisions about the purchase of analytic software or other solutions important to comply with the new law and associated regulations. Such regulations are expected to be released on an annual basis and are in process for 2017.

HITECH resulted in additional related new orders for our EHR products, and we believe that the MACRA could drive purchases of not only EHRs but additional technologies necessary in advanced payment models. Large physician groups will continue to purchase and enhance their use of EHR technology, though the number of very large practices with over 100 physicians that have not yet acquired such technology is quickly decreasing. Such practices may choose to replace older EHR technology in the future as regulatory requirements (such as those related to QPP-related programs for Advanced APMs) and business realities dictate the need for updates and upgrades, as well as additional features and functionality. Additionally, we believe that a number of companies who certified their EHR products for Stage 1 or Stage 2 of Meaningful Use have and will continue to demonstrate that they have not been able to comply with the requirements for the 2015 Edition, which continues to present additional opportunities in the replacement market, particularly in the smaller physician space. As the incentive payments have begun to wind down and shifts in policies related to payment adjustments from the new presidential Administration in the United States is revealed, the role of commercial payers and their continued expansion of alternative payment models, as well as the anticipated growth in Medicaid payment models, is expected to provide a different motivation for purchase and expansion.

We also continue to see activity in local community-based buying whereby individual hospitals, health systems and integrated delivery networks are subsidizing the purchase of EHR licenses or related services for local, affiliated physicians and across their employed physician base as part of an offer to leverage buying power and help those practices take advantage of payment reform opportunities. This activity has also resulted in a pull-through effect where smaller practices affiliated with a community hospital are motivated to participate in the incentive program, while the subsidizing health system expands connectivity within the local provider community. We believe that the 2013 extension of the Stark and Anti-kickback exceptions, which allowed hospitals and other organizations to subsidize the purchase of EHRs, will continue to contribute to the continuation of this market dynamic. We also believe that new orders driven by the MACRA legislation and related to EHR and community-based activity will continue to come in as physicians in those small- and medium-sized practices who have not yet participated seek to avoid payment adjustments stemming from the QPP. The associated challenge we face is to successfully position, sell, implement and support our products to the hospital, health system or integrated delivery network that is subsidizing its affiliated physicians. We believe the community programs we have in place will aid us in penetrating this market.

We believe we have taken and continue to take the proper steps to maximize the opportunity presented by the QPP and other new payment programs. However, given the effects the laws are having on our clients, there can be no assurance that they will result in significant new orders for us in the near term, and if they do, that we will have the capacity to meet the additional market demand in a timely fashion.

Additionally, other public laws to reform the United States healthcare system contain various provisions which may impact us and our clients. Continued decisions by the new Administration and Congress to alter the implementation of the Patient Protection and Affordable Care Act (as amended, the “PPACA”) creates uncertainty for us and for our clients for the near term. Some laws currently in place may have a positive impact by requiring the expanded use of EHRs, quality measurement and analytics tools to participate in certain federal, state or private sector programs. Others, such as the repeal of or adjustments made to the PPACA by the new Administration and Congress, laws or regulations mandating reductions in reimbursement for certain types of providers, decreasing insurance coverage of patients, decisions not to continue policies from the previous Administration, or increasing regulatory oversight of our products or our business practices, may have a negative impact by reducing the resources available to purchase our products. Increases in fraud and abuse enforcement and payment adjustments for non-participation in certain programs or overpayment of certain incentive payments may also adversely affect participants in the healthcare sector, including us. Generally,exchange. Congressional oversight of EHRs and health information technology has increased in recent ~~years, including a specific focus on perceived interoperability failures in the industry,~~years. This increased oversight has impacted and ~~any contributive factors~~could continue to ~~such failures, which could~~ impact our clients and our business. ~~However,~~Most recently, the passage of the 21^st21st Century Cures ~~legislation~~Act in December 2016 ~~with components included to address~~assuaged some concerns about interoperability ~~as well as any continued Congressional focus~~and possible U.S. Food and Drug Administration oversight of EHRs, and the ensuing regulations on ~~repealing or adjusting~~data blocking and interoperability were released by the ~~PPACA, may lead~~Department of Health and Human Services (“HHS”) in March 2020 and became applicable under Office of the National Coordinator for Health Information Technology oversight in April 2021. Additional regulatory clarity will come with the final rule expected shortly from the HHS Office of the Inspector General. Some aspects of the new regulations will have a significant effect on our business processes and how our clients must exchange patient information. In particular, Allscripts will need to ~~a decrease in such activity.~~complete development work to satisfy the revised and new certification criterion, and we and our clients will continue making adjustments to business practices associated with information exchange and provision of Electronic Health Information.

~~Starting October 1, 2015, all entities covered by HIPAA were required to have upgraded~~Please refer to the ~~tenth revision~~section entitled “Our Business Overview and Regulatory Environment” in Part II, Item 7 of our Form 10-K for additional information.

The global outbreak of the ~~International Statistical Classification~~novel coronavirus (COVID-19) has resulted in volatile economic activity around the world, and the degrees of ~~Diseases~~any economic recovery in various jurisdictions have not been linear. We have been carefully monitoring the COVID-19 pandemic and ~~Related Health Problems promulgated~~its impact on our global operations. We are conducting business with certain modifications to employee travel and employee work locations, and have implemented certain cost reduction initiatives, among other modifications. We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state or local authorities or that we determine are in the best interests of our employees, customers, partners and stockholders.

Allscripts, along with other health IT vendors, has been asked by the ~~World Health Organization, also known as ICD-10, for use in~~White House, HHS, the CDC, and state and local governments to support public health efforts to contain the pandemic by expanding COVID-19 reporting ~~medical diagnoses and inpatient procedures. These changes in coding standards presented a significant opportunity for~~options available to our ~~clients in the United States to get~~clients. Our technology has been instrumental to the ~~most advanced versions~~provision of ~~our products,~~high-quality care, aiding not only public health surveillance but also ~~posed a challenge due~~in clinical decision support interventions to aid in triage, diagnosis and treatment; information exchange as patients are moved from site to site and/or discharged; predictive analytics based on local data for surge anticipation and vaccine management; and research based on real-world data informing the ~~scale~~world’s evolving understanding of post-acute sequelae of COVID-19 (known colloquially as Long COVID).

However, the COVID-19 pandemic negatively impacted revenue for the three and nine months ended September 30, 2021, as we continued to see delays in deals with upfront software revenue and professional services implementations across our inpatient and outpatient base. During 2020, we implemented cost reduction actions across all functional disciplines of the ~~challenge for~~Company, including headcount reductions and temporary salary measures. We believe the ~~industry, particularly among smaller independent physician practices. New payment~~cost reduction actions that were implemented in 2020 and ~~delivery system reform programs, as have been launched related~~our current liquidity provide us with operating and financial flexibility to assist us in navigating through this uncertain environment.

The extent to which the ~~Medicare program,~~COVID-19 pandemic will continue to impact the Company’s results of operations and financial condition will depend on future developments that are ~~also increasingly being rolled out at~~highly uncertain and cannot be predicted. Future developments include new information that may emerge concerning the ~~state level through Medicaid administrators, as well as through~~duration and severity of the ~~private sector, presenting~~COVID-19 pandemic, resurgences or additional ~~opportunity for us~~“waves” of outbreaks of COVID-19 in various jurisdictions (including new lineages of the virus), the impact of COVID-19 on economic activity, the actions taken by health authorities and policy makers to ~~provide software~~contain its impacts on public health and ~~services to our clients who participate.~~

~~We derive our revenues primarily from sales~~the global economy, and the availability, effectiveness and public acceptance of our proprietary software (either as a perpetual license sale or under a subscription delivery model), support and maintenance services, and managed services, such as outsourcing, private cloud hosting and revenue cycle management.vaccines.

There were no material changes to our critical accounting policies and estimates from those previously disclosed in our Form 10-K.

During the third quarter of ~~2017,~~2021, we continued to make ~~incremental~~ progress on our key strategic, financial and operational imperatives, which are aimed at driving higher client satisfaction, increasing operating margins, improving our competitive position by expanding the depth and breadth of our ~~products and, ultimately, positioning the company for sustainable long-term growth both domestically and globally.~~products. Additionally, we believe ~~that~~ there are still opportunities ~~for continuing~~to continue to improve our operating leverage and further streamline our operations, and such efforts are ongoing.

Total revenue for the third quarter of ~~2017~~2021 was ~~$449~~$369 million, an increase of ~~15%~~$4 million compared to the third quarter of ~~2016.~~2020. For the three months ended September 30, ~~2017,~~2021, software delivery, support and maintenance revenue and client services revenue ~~totaled $294~~were $223 million ~~for an increase of 16%,~~ and ~~$155~~$146 million, ~~for an increase of 11%,~~ respectively, as compared with $220 million and $146 million, respectively, during the three months ended September 30, ~~2016~~.

2020. Gross profit ~~and gross margin increased during~~for the third quarter of ~~2017~~2021 was $149 million, an increase of $14 million compared ~~with~~to the ~~prior year comparable period, primarily due~~third quarter of 2020. Gross margin increased to ~~improved profitability from~~40.3% in the ~~delivery~~third quarter of ~~recurring subscription-based software sales and recurring client services, particularly private-cloud hosting, as we continue~~2021 compared to ~~expand our customer base for these services. This marks the highest quarterly gross profit and~~a 37.0% gross margin ~~that we have achieved~~ in the ~~last three years.~~

~~During~~ ~~the three months ended September 30, 2017, we recognized a loss on the disposition~~third quarter of available for sale securities of $20.7 million associated with the Company’s disposition of NantHealth, Inc. (“NantHealth”) common stock as consideration for the acquisition of NantHealth’s provider/patient engagement solutions business (as described below).2020.

Our contract backlog as of September 30, ~~2017~~2021 was ~~at a record high~~$3.9 billion, which decreased compared with our contract backlog of $4.1 billion ~~and remained unchanged compared with contract backlog~~ as of ~~June 30, 2017, while increasing 5% compared with contract backlog as of~~both December 31, 2020 and September 30, ~~2016.~~2020.

Our bookings, which reflect the value of executed contracts for software, hardware, other client services, ~~private-cloud~~private cloud hosting, outsourcing and subscription-based services, totaled ~~$304~~$166 million for the three months ended September 30, ~~2017,~~2021, which ~~represented~~represents an increase of 4% over the comparable prior period amount of ~~$291~~$160 million and a decrease of ~~25%~~8% from the second quarter ~~of 2017~~2021 amount of ~~$407~~$180 million. The growth in bookings compared with the third quarter of 2016 reflects the strong long-term value proposition of our comprehensive offerings, which are targeted across the continuum of care globally. The decline in bookings compared to the second quarter of 2017 in part reflects a normal seasonal fluctuation in customer spending patterns, which generally adversely affect bookings during our third fiscal quarter whereby it is typically one of the lower bookings quarters during the year. Similarly, in 2016, bookings for the third quarter declined 20% from the second quarter. This pattern should not be relied upon or be considered indicative of our future performance, however, as it has varied in magnitude in the past. New client business totaled approximately one-third of bookings for the third quarter of 2017. The composition of our bookings for the three months ended September 30, 2017 was 50% of client services-related bookings and 50% software delivery-related bookings. The corresponding ratios for the three months ended September 30, 2016 were 49% and 51%, respectively.

On August 25, 2017, the Company completed the acquisition of certain assets relating to NantHealth’s provider/patient engagement solutions business. The consideration for the transaction was the 15,000,000 shares of common stock of NantHealth that had been owned by the Company.

On October 2, 2017, Allscripts Healthcare, LLC, a wholly-owned subsidiary of the Company (“Healthcare LLC”), completed the acquisition of McKesson Corporation’s (“McKesson’s”) Enterprise Information Solutions (EIS) Business division (the “EIS Business”), which provides certain software solutions and services to hospitals and health systems, by acquiring all of the outstanding equity interests of two indirect, wholly-owned subsidiaries of McKesson for a purchase price of $185 million, subject to adjustments for net working capital and net debt. The purchase price was funded through incremental borrowings under our debt facilities. Additional information about the acquisition is contained in a Current Report on Form 8-K filed with the SEC by the Company on October 2, 2017.

Three and Nine Months Ended September 30, ~~2017~~2021 Compared with the Three and Nine Months Ended September 30, ~~2016~~

	Three Months Ended September 30,									Nine Months Ended September 30,										Three Months Ended September 30,									Nine Months Ended September 30,
(In thousands)	2017			2016			% Change			2017			2016			% Change
(In thousands, except percentages)																				2021			2020			% Change			2021			2020			% Change
Revenue:
Software delivery, support and maintenance	$	294,221		$	252,692			16.4	%	$	845,951		$	731,721			15.6	%		$	222,726		$	219,850			1.3	%	$	670,840		$	680,124			(1.4	%)
Client services		155,221			139,692			11.1	%		443,057			392,742			12.8	%			146,546			145,768			0.5	%		440,498			436,162			1.0	%
Total revenue		449,442			392,384			14.5	%		1,289,008			1,124,463			14.6	%			369,272			365,618			1.0	%		1,111,338			1,116,286			(0.4	%)
Cost of revenue:
Software delivery, support and maintenance		86,893			86,537			0.4	%		259,361			240,860			7.7	%			68,462			72,411			(5.5	%)		208,496			216,625			(3.8	%)
Client services		132,629			116,415			13.9	%		379,797			335,957			13.0	%			122,142			127,361			(4.1	%)		362,826			406,752			(10.8	%)
Amortization of software development and acquisition-related assets		28,001			23,273			20.3	%		81,788			62,905			30.0	%			29,894			30,708			(2.7	%)		89,444			88,237			1.4	%
Total cost of revenue		247,523			226,225			9.4	%		720,946			639,722			12.7	%			220,498			230,480			(4.3	%)		660,766			711,614			(7.1	%)
Gross profit		201,919			166,159			21.5	%		568,062			484,741			17.2	%			148,774			135,138			10.1	%		450,572			404,672			11.3	%
Gross margin %		44.9	%		42.3	%					44.1	%		43.1	%						40.3	%		37.0	%					40.5	%		36.3	%
Selling, general and administrative expenses		117,352			98,778			18.8	%		340,234			277,733			22.5	%			78,794			93,442			(15.7	%)		239,592			296,164			(19.1	%)
Research and development		51,057			45,142			13.1	%		146,748			140,070			4.8	%			45,540			46,352			(1.8	%)		145,932			151,774			(3.8	%)
Asset impairment charges		0			0			0.0	%		0			4,650			(100.0	%)	��		6,519			210		NM				11,763			210		NM
Amortization of intangible and acquisition-related assets		8,137			5,365			51.7	%		23,340			14,944			56.2	%			5,817			6,295			(7.6	%)		17,466			19,326			(9.6	%)
Income from operations		25,373			16,874			50.4	%		57,740			47,344			22.0	%
Income (loss) from operations																					12,104			(11,161	)	NM				35,819			(62,802	)		157.0	%
Interest expense		(22,252	)		(19,367	)		14.9	%		(62,722	)		(42,757	)		46.7	%			(3,617	)		(6,667	)		(45.7	%)		(9,709	)		(27,646	)		(64.9	%)
Other (loss) income, net		(570	)		(6	)	NM				(545	)		466		NM
Impairment of and losses on long-term investments		(20,700	)		0			100.0	%		(165,290	)		0			100.0	%
Other income, net																					4,700			398		NM				22,494			45		NM
Gain on sale of businesses, net																					8,363			0			100.0	%		8,363			0			100.0	%
Impairment of long-term investments																					0			(1,025	)		(100.0	%)		0			(1,575	)		(100.0	%)
Equity in net (loss) income of unconsolidated investments		449			0		NM				706			(7,501	)		(109.4	%)			(257	)		383			(167.1	%)		(321	)		17,417			(101.8	%)
Income (loss) before income taxes		(17,700	)		(2,499	)	NM				(170,111	)		(2,448	)	NM
Income tax benefit (provision)		238			2,656			(91.0	%)		1,073			2,596			(58.7	%)
Income (loss) from continuing operations before income taxes																					21,293			(18,072	)	NM				56,646			(74,561	)		176.0	%
Income tax (provision) benefit																					(5,099	)		4,116		NM				(9,954	)		6,641		NM
Effective tax rate		1.3	%		106.3	%					0.6	%		106.0	%						23.9	%		22.8	%					17.6	%		8.9	%
Net (loss) income		(17,462	)		157		NM				(169,038	)		148		NM
Less: Net loss (income) attributable to non-controlling interest		(163	)		(151	)		7.9	%		(352	)		(142	)		147.9	%
Less: Accretion of redemption preference on redeemable convertible non-controlling interest - Netsmart		(10,962	)		(10,191	)		7.6	%		(32,887	)		(18,344	)		79.3	%
Net loss attributable to Allscripts Healthcare Solutions, Inc. stockholders	$	(28,587	)	$	(10,185	)		180.7	%	$	(202,277	)	$	(18,338	)	NM
Income (loss) from continuing operations, net of tax																					16,194			(13,956	)	NM				46,692			(67,920	)		168.7	%
(Loss) income from discontinued operations																					(14	)		19,545			(100.1	%)		(7	)		54,601			(100.0	%)
Gain on sale of discontinued operations																					0			0		-				647			0			100.0	%
Income tax effect on discontinued operations																					0			(5,047	)		(100.0	%)		(169	)		(14,098	)		(98.8	%)
(Loss) income from discontinued operations, net of tax																					(14	)		14,498			(100.1	%)		471			40,503			(98.8	%)
Net income (loss)																				$	16,180		$	542		NM			$	47,163		$	(27,417	)	NM

NM – We define “NM” as not meaningful for increases or decreases greater than 200%.

	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended September 30,							Nine Months Ended September 30,
(In thousands)	2017		2016		% Change			2017		2016		% Change			2021		2020		% Change			2021		2020		% Change
Revenue:
Software delivery, support and maintenance
Recurring revenue	$	235,560	$	213,921		10.1	%	$	694,914	$	616,325		12.8	%	$	304,724	$	301,616		1.0	%	$	904,016	$	914,792		(1.2	%)
Non-recurring revenue		58,661		38,771		51.3	%		151,037		115,396		30.9	%		64,548		64,002		0.9	%		207,322		201,494		2.9	%
Total software delivery, support and maintenance		294,221		252,692		16.4	%		845,951		731,721		15.6	%
Client services
Recurring revenue		104,100		92,983		12.0	%		300,600		254,181		18.3	%
Non-recurring revenue		51,121		46,709		9.4	%		142,457		138,561		2.8	%
Total client services		155,221		139,692		11.1	%		443,057		392,742		12.8	%
Total revenue	$	449,442	$	392,384		14.5	%	$	1,289,008	$	1,124,463		14.6	%	$	369,272	$	365,618		1.0	%	$	1,111,338	$	1,116,286		(0.4	%)

Three and Nine Months Ended September 30, ~~2017~~2021 Compared with the Three and Nine Months Ended September 30, ~~2016~~2020

The increase in revenue for the three and nine months ended September 30, 2017 is primarily due to the consolidation of Netsmart beginning in the second quarter of 2016, including lower amortization of acquisition-related deferred revenue adjustment related to the Netsmart acquisition totaling $1 million and $4 million for the three and nine months ended September 30, 2017, respectively, compared with $12 million and $22 million for the three and nine months ended September 30, 2016, respectively.

~~Software delivery, support and maintenance~~Recurring revenue consists of ~~recurring~~ subscription-based software sales, support and maintenance revenue, recurring transactions revenue and ~~non-recurring perpetual software licenses sales, hardware resale and non-recurring transactions revenue. Client services revenue consists of~~ recurring revenue from managed services solutions, such as outsourcing, private cloud hosting and revenue cycle ~~management, as well as~~management. Non-recurring revenue consists of perpetual software licenses sales, hardware resale and non-recurring transactions revenue, and project-based client services revenue.

Recurring revenue increased for the three months ended September 30, 2021 compared to the prior year comparable period, reflecting increases in recurring transaction-related revenues and subscription revenues, which were mostly offset by attrition. Recurring revenue decreased for the nine months ended September 30, 2021 compared to the prior year comparable period, primarily due to attrition. The ~~growth~~decrease was partially offset by an increase in ~~both~~ recurring transaction-related revenues and ~~non-recurring software delivery, support and maintenance and client services~~subscription revenues. Non-recurring revenue increased for the three and nine months ended September 30, ~~2017~~2021 compared ~~with~~to the prior year comparable periods, primarily due to an increase in non-recurring transaction-related revenues. The increase was ~~largely driven~~partially offset by ~~incremental revenue from Netsmart as well as higher revenue associated with the sale of Allscripts integrated clinical~~a decrease in upfront software ~~applications and health management and coordinated care solutions, including associated client services to implement and support these solutions.~~revenues.

The percentage of recurring and non-recurring revenue of our total revenue was ~~76%~~83% and ~~24% and 77% and 23%~~17%, respectively, during the three months ended September 30, 2021 and 82% and 18%, respectively, during the three months ended September 30, 2020. The percentage of recurring and non-recurring revenue of our total revenue was 81% and 19%, respectively, during the nine months ended September 30, ~~2017, respectively, representing a slight shift compared with 78%~~2021 and ~~22%~~82% and ~~77% and 23%~~18%, respectively, during the ~~three and~~ nine months ended September 30, ~~2016.~~2020.

	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended September 30,									Nine Months Ended September 30,
(In thousands)	2017			2016			% Change			2017			2016			% Change
(In thousands, except percentages)																			2021			2020			% Change			2021			2020			% Change
Total cost of revenue	$	247,523		$	226,225			9.4	%	$	720,946		$	639,722			12.7	%	$	220,498		$	230,480			(4.3	%)	$	660,766		$	711,614			(7.1	%)
Gross profit	$	201,919		$	166,159			21.5	%	$	568,062		$	484,741			17.2	%	$	148,774		$	135,138			10.1	%	$	450,572		$	404,672			11.3	%
Gross margin %		44.9	%		42.3	%					44.1	%		43.1	%					40.3	%		37.0	%					40.5	%		36.3	%

Three and Nine Months Ended September 30, ~~2017~~2021 Compared with the Three and Nine Months Ended September 30, ~~2016~~2020

Gross profit and ~~gross~~ margin increased during the three and nine months ended September 30, ~~2017~~2021 compared with the prior year comparable periods, primarily due to the ~~consolidation of Netsmart beginning~~increase in transaction-related revenues, the ~~second quarter of 2016~~increase in subscription revenues, the decrease in hosting costs and ~~improved profitability from~~ the delivery of recurring subscription-based software sales and recurring client services, particularly private cloud hosting, as we continue to expand our customer base for these services. Additionally, gross profit and gross margin for the nine months ended September 30, 2017 increased due to improved profitability from non-recurring software delivery revenue, primarily associated with sales of our acute solutions. These increases were partlycost reduction initiatives implemented throughout 2020. The increase was partially offset by ~~lower gross profit~~a decrease in upfront software revenues and ~~gross margin associated with the delivery of non-recurring project-based client services as well as higher amortization of software development and acquisition-related assets compared with prior year.~~
attrition.

	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended September 30,							Nine Months Ended September 30,
(In thousands)	2017		2016		% Change			2017		2016		% Change			2021		2020		% Change			2021		2020		% Change
Selling, general and administrative expenses	$	117,352	$	98,778		18.8	%	$	340,234	$	277,733		22.5	%	$	78,794	$	93,442		(15.7	%)	$	239,592	$	296,164		(19.1	%)

Three and Nine Months Ended September 30, ~~2017~~2021 Compared with the Three and Nine Months Ended September 30, ~~2016~~2020

Selling, general and administrative expenses ~~increased~~decreased during the three and nine months ended September 30, ~~2017~~2021, compared with the prior year comparable periods, primarily due to ~~additional personnel expenses from acquisitions completed during 2016, including~~lower legal costs and the ~~Netsmart Transaction in~~impact of the ~~second quarter of 2016, as well as higher transaction-related, severance and legal expenses.~~cost reduction initiatives implemented throughout 2020.

	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended September 30,							Nine Months Ended September 30,
(In thousands)	2017		2016		% Change			2017		2016		% Change			2021		2020		% Change			2021		2020		% Change
Research and development	$	51,057	$	45,142		13.1	%	$	146,748	$	140,070		4.8	%	$	45,540	$	46,352		(1.8	%)	$	145,932	$	151,774		(3.8	%)

Three and Nine Months Ended September 30, ~~2017~~2021 Compared with the Three and Nine Months Ended September 30, ~~2016~~2020

Research and development ~~expense increased~~expenses decreased during the three and nine months ended September 30, ~~2017~~2021 compared with the prior year comparable periods, primarily due to ~~higher overall personnel costs and additional expenses from Netsmart and DeVero, which were partly offset by an increase in~~ the ~~amount~~impact of ~~capitalized software costs in 2017 compared with 2016 periods.~~the cost reduction initiatives implemented throughout 2020.

	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands)	2017		2016		% Change			2017		2016		% Change			2021		2020		% Change	2021		2020		% Change
Asset impairment charges	$	0	$	0		0.0	%	$	0	$	4,650		(100.0	%)	$	6,519	$	210	NM	$	11,763	$	210	NM
Impairment of and losses on long-term investments	$	20,700	$	0		100.0	%	$	165,290	$	0		100.0	%

Three and Nine Months Ended September 30, ~~2017~~2021 Compared with the Three and Nine Months Ended September 30, ~~2016~~2020

~~During the first quarter of 2016, we incurred non-cash asset~~Asset impairment charges ~~that included $2.2 million~~ for the ~~impairment of capitalized software as a result of our decision to discontinue several software development projects, $2.1 million for the impairment of one of our cost method equity investments,~~three and ~~other charges of $0.4 million to write down a long-term asset to its estimated net realizable value.~~

During the three months ended June 30, 2017, we recognized other-than-temporary non-cash impairment charges of $144.6 million associated with two of the Company’s long-term investments based on management’s assessment of the likelihood of near-term recovery of the investments’ value. The majority of these impairment charges related to our investment in NantHealth common stock.

~~During the three~~nine months ended September 30, ~~2017, we recognized a loss~~2021 were primarily due to the write-off of ~~$20.7 million upon the disposition of~~deferred costs related to our ~~entire investment in NantHealth common stock. Refer to~~ ~~Note 3, “Fair Value Measurements and Long-term Investments” and~~ Note 11, “Other Comprehensive Income,” in the notes to consolidated financial statements for further information regarding these impairments. Refer to Note 2, “Business Combinations,” for information regarding the divestiture of our investment in NantHealth common stock as part of our acquisition of NantHealth’s provider/patient engagement solutions business.private cloud hosting operations.

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

2017

2016

% Change

2017

2016

% Change

2021

2020

% Change

2021

2020

% Change

Amortization of intangible and acquisition-related

assets

8,137

5,365

51.7

23,340

14,944

56.2

5,817

6,295

(7.6

17,466

19,326

(9.6

Three and Nine Months Ended September 30, ~~2017~~2021 Compared with the Three and Nine Months Ended September 30, ~~2016~~2020

The ~~increase~~decrease in amortization expense for the three and nine months ended September 30, ~~2017~~2021, compared with the prior year comparable periods, was ~~primarily driven by additional~~due to normal amortization expense ~~associated with the value of~~and certain intangible assets ~~recognized~~

being fully amortized in ~~connection with the Netsmart Transaction in the second quarter of 2016 and the acquisitions of HealthMEDX and controlling interests in third parties during the fourth quarter of 2016.~~2020.

	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended September 30,							Nine Months Ended September 30,
(In thousands)	2017		2016		% Change			2017		2016		% Change			2021		2020		% Change			2021		2020		% Change
Interest expense	$	22,252	$	19,367		14.9	%	$	62,722	$	42,757		46.7	%	$	3,617	$	6,667		(45.7	%)	$	9,709	$	27,646		(64.9	%)

Three and Nine Months Ended September 30, ~~2017~~2021 Compared with the Three and Nine Months Ended September 30, ~~2016~~2020

Interest expense decreased during the three and nine months ended September 30, ~~2017 was higher~~2021 compared ~~with~~to the prior year comparable periods ~~primarily~~ due to ~~incremental interest expense associated with Netsmart’s non-recourse~~lower outstanding debt ~~including interest on~~levels during the ~~incremental borrowing~~current year. The 1.25% Cash Convertible Senior Notes matured and were repaid in full in the third quarter of ~~2017 to fund the DeVero acquisition. In addition, interest expense associated with Allscripts~~2020. The senior secured credit facility ~~also increased primarily due to higher outstanding balance compared with~~was repaid in full in the ~~2016 periods.~~fourth quarter of 2020. The decrease was partially offset as a result of new borrowings from the senior secured revolving facility (“Revolving Facility”) that occurred in the second quarter of 2021.

	Three Months Ended September 30,							Nine Months Ended September 30,						Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands)	2017			2016			% Change	2017			2016		% Change	2021		2020		% Change	2021		2020		% Change
Other (loss) income, net	$	(570	)	$	(6	)	NM	$	(545	)	$	466	NM
Other income, net														$	4,700	$	398	NM	$	22,494	$	45	NM

Three and Nine Months Ended September 30, ~~2017~~2021 Compared with the Three and Nine Months Ended September 30, ~~2016~~2020

~~Other (loss)~~Other income, net for the three and nine months ended September 30, ~~2017~~2021 and ~~2016 consists~~2020 consisted of a combination of interest income and miscellaneous ~~(payments) receipts.~~receipts and expenses. The increase in income during the three months ended September 30, 2021 was primarily due to a $1.4 million distribution received from a third-party cost method investment and a $1.6 million gain as a result of the sale of a third-party cost method investment. In addition to the items previously mentioned, the increase in income during the nine months ended September 30, 2021 was primarily due to a $5.0 million distribution received from the Practice Fusion escrow account related to the settlement agreements with the DOJ, a $9.7 million gain as a result of a note conversion and the revaluation of our existing investment with a third-party cost method investment and a $1.4 million distributions received from a third-party cost method investment.

~~Equity in~~Gain on Sale of Businesses, Net ~~(Loss) Income of Unconsolidated Investments~~

	Three Months Ended September 30,					Nine Months Ended September 30,								Three Months Ended September 30,							Nine Months Ended September 30,
(In thousands)	2017		2016		% Change	2017		2016			% Change			2021		2020		% Change			2021		2020		% Change
Equity in net (loss) income of unconsolidated investments	$	449	$	0	NM	$	706	$	(7,501	)		(109.4	%)
Gain on sale of businesses, net														$	8,363	$	0		100.0	%	$	8,363	$	0		100.0	%

Three and Nine Months Ended September 30, ~~2017~~2021 Compared with the Three and Nine Months Ended September 30, ~~2016~~2020

Gain on sale of businesses, net during the three and nine months ended September 30, 2021 consisted of a gain of $8.4 million from the divestiture of our 2bPrecise business.

Three and Nine Months Ended September 30, 2021 Compared with the Three and Nine Months Ended September 30, 2020

During the three months ended September 30, 2020, we recorded a $1.0 million impairment for a third-party cost-method investment. During the nine months ended September 30, 2020, we also recorded a $0.6 million impairment for a third-party equity-method investment.

Three and Nine Months Ended September 30, 2021 Compared with the Three and Nine Months Ended September 30, 2020

Equity in net (loss) income of unconsolidated investments represents our share of the equity ~~(losses)~~ earnings of our investments in third parties accounted for under the equity method ~~including the amortization~~ of ~~cost basis adjustments. The amount recognized during~~accounting based on a one quarter lag. During the nine months ended September 30, ~~2016 represents our share~~2020, we recorded a $16.8 million gain from the sale of the net loss incurred by NantHealth prior to NantHealth’s initial public offering (“IPO”) in June 2016. Our investment in NantHealth common stock was accounted for as an available-for-sale marketable security after the IPO.a third-party equity method investment.

Three and Nine Months Ended September 30, ~~2017~~2021 Compared with the Three and Nine Months Ended September 30, ~~2016~~2020

Our provision for income taxes differs from the tax computed at the U.S. federal statutory income tax rate primarily due ~~primarily~~ to ~~valuation allowance,~~ permanent differences, income attributable to foreign jurisdictions taxed at ~~lower~~different rates, state taxes, tax credits and certain discrete items. Our effective tax rate for the three and nine months ended September 30, ~~2017,~~2021, compared with the prior year comparable periods, differs primarily due to ~~$64.2~~the fact that the permanent items, credits and the impact of foreign earnings had more impact on the pre-tax income of $21.3 million and $56.6 million in the three and nine months ended September 30, 2021, respectively, compared to the impacts of ~~valuation allowance in~~these items on a pre-tax loss of $18.1 million and $74.6 million for the three and nine months ended September 30, 2020, respectively.

In evaluating our ability to recover our deferred tax assets within the jurisdictions from which they arise, we consider all available evidence, including scheduled reversals of deferred tax liabilities, tax-planning strategies, and results of recent operations. In evaluating the objective evidence that historical results provide, we consider three years of cumulative operating income (loss). During the nine months ended September 30, ~~2017 for deferred taxes on a capital~~2021, we released valuation allowances of $0.7 million related to U.S. and foreign net operating loss ~~carryforward, which can only can be deductible to the extent of offsetting capital gains.~~
carryforwards.

Three and Nine Months Ended September 30, ~~2017~~2021 Compared with the Three and Nine Months Ended September 30, ~~2016~~2020

~~The net (loss) income attributable to non-controlling interest represents~~On October 15, 2020 and December 31, 2020, we completed the ~~share~~sale of ~~earnings of consolidated affiliates that is attributable~~the EPSi and CarePort businesses, respectively. Prior to the ~~affiliate’s common stock~~sale of EPSi, it was part of the “Unallocated Amounts” category as it did not meet the requirements to be a reportable segment nor the criteria to be aggregated into our two reportable segments. Prior to the sale of CarePort, it was part of the former Data, Analytics and Care Coordination reportable segment. Both businesses were part of the same strategic initiative and were sold within the same period, and given that ~~is not owned by us~~the combined sale of EPSi and CarePort represented a strategic shift that had a major effect on our operations and financial results, we reported them together as discontinued operations for ~~each of the~~all periods presented. The ~~accretion~~(loss) income from discontinued operations during the three and nine months ended September 30, 2020 represents income generated from both EPSi and CarePort. The gain on sale of ~~redemption preference on redeemable convertible non-controlling interest~~discontinued operations during the nine months ended September 30, 2021 primarily represents ~~the accretion of liquidation preference at 11% per annum~~net working capital adjustments to the ~~value~~gain from the sale of ~~the preferred units of Netsmart for each of the periods presented.~~CarePort. Refer to Note ~~2, “Business Combinations and Other Investments”~~15, “Discontinued Operations” of the Notes to ~~our consolidated financial statements included~~Consolidated Financial Statements in Part ~~II,~~I, Item ~~8, “Financial Statements and Supplementary Data”~~1 of ~~our~~this Form ~~10-K~~10-Q for ~~additional~~further information regarding ~~such liquidation preference.~~discontinued operations.

During the third quarter of 2021, we changed our reportable segments from Core Clinical and Financial Solutions, Data, Analytics and Care Coordination, and Unallocated to Hospital and Large Physician Practices, Veradigm, and Unallocated. The segment disclosures below for the three and nine months ended September 30, 2020, have been revised to conform to the current year presentation. Refer to Note 16 “Business Segments” of the Notes to Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for further discussion on the impact of the change.

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

2017

2016

% Change

2017

2016

% Change

Revenue:

Clinical and Financial Solutions

$
303,323

$
276,503

9.7
%

$
870,452

$
830,200

4.8
%
Population Health

60,515

61,722

(2.0
%)

179,313

170,803

5.0
%
Netsmart

83,618

52,621

58.9
%

235,046

96,854

142.7
%
Unallocated Amounts

1,986

1,538

29.1
%

4,197

26,606

(84.2
%)
Total revenue

$
449,442

$
392,384

14.5
%

$
1,289,008

$
1,124,463

14.6
%

Gross Profit:

Clinical and Financial Solutions

$
130,224

$
113,677

14.6
%

$
363,228

$
349,017

4.1
%
Population Health

41,947

46,337

(9.5
%)

125,535

125,152

0.3
%
Netsmart

39,644

17,378

128.1
%

111,489

32,327

NM

Unallocated Amounts

(9,896
)

(11,233
)

(11.9
%)

(32,190
)

(21,755
)

48.0
%
Total gross profit

$
201,919

$
166,159

21.5
%

$
568,062

$
484,741

17.2
%

Income (loss) from operations:

Clinical and Financial Solutions

$
68,837

$
59,921

14.9
%

$
186,846

$
188,145

(0.7
%)
Population Health

29,298

32,977

(11.2
%)

86,282

81,895

5.4
%
Netsmart

7,153

(6,426
)

NM

23,910

(8,825
)

NM

Unallocated Amounts

(79,915
)

(69,598
)

14.8
%

(239,298
)

(213,871
)

11.9
%
Total income from operations

$
25,373

$
16,874

50.4
%

$
57,740

$
47,344

22.0
%

	Three Months Ended September 30,									Nine Months Ended September 30,
(In thousands)	2021			2020			% Change			2021			2020			% Change
Revenue:
Hospital & Large Physician Practices	$	225,685		$	233,630			(3.4	%)	$	695,427		$	712,538			(2.4	%)
Veradigm		137,168			125,073			9.7	%		396,987			385,525			3.0	%
Unallocated Amounts		6,419			6,915			(7.2	%)		18,924			18,223			3.8	%
Total revenue	$	369,272		$	365,618			1.0	%	$	1,111,338		$	1,116,286			(0.4	%)

Gross Profit:
Hospital & Large Physician Practices	$	79,135		$	73,359			7.9	%	$	249,594		$	210,582			18.5	%
Veradigm		65,698			56,685			15.9	%		187,963			180,981			3.9	%
Unallocated Amounts		3,941			5,094			(22.6	%)		13,015			13,109			(0.7	%)
Total gross profit	$	148,774		$	135,138			10.1	%	$	450,572		$	404,672			11.3	%

Income (loss) from operations:
Hospital & Large Physician Practices	$	(6,160	)	$	(16,913	)		63.6	%	$	(6,995	)	$	(75,982	)		90.8	%
Veradigm		16,877			8,820			91.3	%		46,386			24,518			89.2	%
Unallocated Amounts		1,387			(3,068	)		145.2	%		(3,572	)		(11,338	)		68.5	%
Total income (loss) from operations	$	12,104		$	(11,161	)	NM			$	35,819		$	(62,802	)		157.0	%

Our ~~Clinical~~Hospital and ~~Financial Solutions~~Large Physician Practices segment derives its revenue from the sale of integrated clinical ~~software applications~~ and financial ~~and information~~management solutions, which primarily include EHR-related ~~software, financial and practice management~~ software, related installation, support and maintenance, outsourcing and private cloud ~~hosting, revenue cycle management, training and electronic claims administration services.~~hosting.

	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended September 30,									Nine Months Ended September 30,
(In thousands)	2017			2016			% Change			2017			2016			% Change
(In thousands, except percentages)																			2021			2020			% Change			2021			2020			% Change
Revenue	$	303,323		$	276,503			9.7	%	$	870,452		$	830,200			4.8	%	$	225,685		$	233,630			(3.4	%)	$	695,427		$	712,538			(2.4	%)
Gross profit	$	130,224		$	113,677			14.6	%	$	363,228		$	349,017			4.1	%	$	79,135		$	73,359			7.9	%	$	249,594		$	210,582			18.5	%
Gross margin %		42.9	%		41.1	%					41.7	%		42.0	%					35.1	%		31.4	%					35.9	%		29.6	%
Income from operations	$	68,837		$	59,921			14.9	%	$	186,846		$	188,145			(0.7	%)
Loss from operations																			$	(6,160	)	$	(16,913	)		(63.6	%)	$	(6,995	)	$	(75,982	)		(90.8	%)
Operating margin %		22.7	%		21.7	%					21.5	%		22.7	%					(2.7	%)		(7.2	%)					(1.0	%)		(10.7	%)

Three and Nine Months Ended September 30, ~~2017~~2021 Compared with the Three and Nine Months Ended September 30, ~~2016~~2020

~~Clinical~~Hospital and ~~Financial Solutions~~Large Physician Practices revenue decreased during the three and nine months ended September 30, 2021, compared with the prior year comparable periods, primarily due to lower upfront software revenues and attrition.

Gross profit and margin increased during the three and nine months ended September 30, ~~2017~~2021, compared with the prior year comparable periods, ~~as higher revenue~~primarily due to the decrease in hosting costs and the cost reduction initiatives implemented throughout 2020. The increase was partially offset by the previously mentioned attrition.

Loss from ~~software delivery, support~~operations decreased for the three and ~~maintenance,~~nine months ended September 30, 2021, compared with the prior year comparable periods, primarily due to the increase in gross profit and ~~recurring revenue cycle management and other transaction-based services and~~the cost reduction initiatives implemented throughout 2020. The decrease was partially offset by the asset impairment charges related to our private cloud hosting ~~client services were partly offset by lower non-recurring client services revenue. The higher~~operations.

Our Veradigm segment derives its revenue from payer and life sciences solutions, which are mainly targeted at payers, life sciences companies and other key healthcare stakeholders; the sale of EHR software to single-specialty and small and mid-sized physician practices, including related clinical, financial, administrative and operational solutions; and software applications for patient engagement. These solutions enable clients to transition, analyze, coordinate care and improve the quality, efficiency and value of healthcare delivery ~~support~~across the entire care community.

Three and ~~maintenance~~Nine Months Ended September 30, 2021 Compared with the Three and Nine Months Ended September 30, 2020

Veradigm revenue ~~was driven by increases in both recurring subscription-based revenue~~increased for the three and ~~non-recurring software license sales of our acute solutions. During the 2017 periods~~nine months ended September 30, 2021 compared with the ~~respective 2016~~prior year comparable periods, ~~there was a higher number of larger acute client expansions, which drove the~~due to an increase in ~~non-recurring software delivery, support~~subscription and ~~maintenance revenue.~~transaction-related revenues. The increase ~~in revenue cycle management revenue~~ was ~~due to the activation of several new accounts, which more than~~partially offset certain other projects that ended in 2016. Revenue related to private cloud hosting also increased primarily due to new ambulatory client go-lives. The decrease in non-recurring client services revenue was partly due to the realization of certain deferred revenue amounts during the first quarter of 2016 that did not re-occur in 2017. In addition, non-recurring client services revenue was lower as result ofby a decrease in ~~implementation services attributable to fewer large implementations of our ambulatory~~maintenance and ~~acute solutions as certain large service projects were mostly completed in 2016.~~upfront software revenues.

Gross profit and gross margin increased during the three and nine months ended September 30, ~~2017~~2021 compared with the prior year comparable ~~period,~~periods, primarily due to ~~a favorable mix of higher margin software license sales and transaction-processing~~an increase in revenues changes in revenue ~~partly offset by higher amortization of capitalized software development and acquired technology-related intangible assets.~~ mix.

Income from operations and operating margin increased ~~due to~~during the ~~same factors~~three and ~~an improved operating leverage.~~

~~Gross margin and operating margin decreased during the~~ nine months ended September 30, ~~2017~~2021 compared with the prior year comparable ~~period,~~periods, primarily due to the ~~decrease~~increase in ~~non-recurring client services revenue, a greater reliance on third-party~~gross profit, lower bad debt costs and the cost reduction initiatives implemented throughout 2020.

The “Unallocated Amounts” category consists of the 2bPrecise business, certain products that were shifted from the previous Core Clinical and services, higher internal costs related to anticipated new outsourcing clients go-lives and higher amortization of capitalized software development and acquired technology-related intangible assets. In addition, overall operating expenses increased primarilyFinancial Solutions reportable segment due to ~~higher personnel costs~~the organizational changes (“Certain Products”), transfer pricing revenues and ~~research and development expenses. These decreases were partly offset by certain credits related to our hosting partners during the nine months ended September 30, 2017~~ as ~~compared to the prior year comparable period.~~

~~Our Population Health segment derives its revenue from the sale~~ of health management and coordinated care solutions, which are mainly targeted at hospitals, health systems, other care facilities and ACOs. These solutions enable clients to connect, transition, analyze and coordinate care across the entire care community. This segmentJanuary 1, 2021 also includes certain corporate-related expenses. The amounts included in the ~~results of NantHealth’s provider/patient engagement solutions business subsequent~~“Unallocated Amounts” category for 2bPrecise and Certain Products do not meet the requirements to ~~August 25, 2017, which were not material for~~be reportable segments nor the ~~three months ended September 30, 2017.~~criteria to be aggregated into the two reportable segments.

	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended September 30,									Nine Months Ended September 30,
(In thousands)	2017			2016			% Change			2017			2016			% Change
(In thousands, except percentages)																			2021			2020			% Change			2021			2020			% Change
Revenue	$	60,515		$	61,722			(2.0	%)	$	179,313		$	170,803			5.0	%	$	6,419		$	6,915			(7.2	%)	$	18,924		$	18,223			3.8	%
Gross profit	$	41,947		$	46,337			(9.5	%)	$	125,535		$	125,152			0.3	%	$	3,941		$	5,094			(22.6	%)	$	13,015		$	13,109			(0.7	%)
Gross margin %		69.3	%		75.1	%					70.0	%		73.3	%					61.4	%		73.7	%					68.8	%		71.9	%
Income from operations	$	29,298		$	32,977			(11.2	%)	$	86,282		$	81,895			5.4	%
Income (loss) from operations																			$	1,387		$	(3,068	)		145.2	%	$	(3,572	)	$	(11,338	)		68.5	%
Operating margin %		48.4	%		53.4	%					48.1	%		47.9	%					21.6	%		(44.4	%)					(18.9	%)		(62.2	%)

Three and Nine Months Ended September 30, ~~2017~~2021 Compared with the Three and Nine Months Ended September 30, ~~2016~~2020

~~Population Health revenue~~Revenue decreased ~~slightly~~ during the three months ended September 30, ~~2017~~2021 and increased slightly during the nine months ended September 30, 2021, compared with the prior year comparable periods.

Gross profit and gross margin decreased during the three and nine months ended September 30, 2021, compared with the prior year comparable periods, primarily due to an increase in the 2021 bonus accrual.

The category recorded income from operations for the three months ended September 30, 2021, compared to loss from operations for the prior year comparable period, primarily due to lower selling, general and administrative expenses. Loss from operations decreased during the nine months ended September 30, 2021, compared with the prior year comparable period, primarily due to lower recurring software delivery, support and maintenance revenue and non-recurring project-related client services revenue, which were mostly offset by higher non-recurring software delivery, support and maintenance revenue associated with client expansion and new client sales of population health solutions. The decline in recurring software delivery, support and maintenance revenue was due to the realization of certain deferred revenue amounts upon delivery of all software-related elements associated with a large customer contract during the third quarter of 2016, which did not recur during the third quarter of 2017. Gross profit and gross margin decreased primarily due to higher utilization of third party resources and higher amortization of capitalized software. Income from operations and operating margin also decreased due to the same factors, partly offset by an overall decline in operating expenses.

Population Health revenue increased during the nine months ended September 30, 2017 compared with the prior year comparable period, primarily due to higher non-recurring software delivery, support and maintenance revenue associated with client expansion and new client sales of our CareInMotion™ population health management portfolio and non-recurring project-related client services revenue. These increases were partly offset by lower recurring software delivery, support and maintenance revenue, mostly driven by the deferred revenue release as noted in the above paragraph. Gross margin decreased ~~primarily due to an unfavorable mix of lower margin projects utilizing third party resources in addition to slightly higher third-party expenses associated with new solutions and~~ ~~higher amortization of capitalized software development~~ ~~and acquired technology-related intangible assets.~~ ~~Income from operations and operating margin increased primarily due to an overall decline in operating expenses, including higher capitalization of internal software development expenses.~~

~~Our Netsmart segment is a new segment that was established as part of the Netsmart Transaction and was initially comprised of the combination of our Homecare~~^TM business with Netsmart, Inc. The Netsmart segment also includes the results of HealthMEDX, LLC and DeVero, Inc., which were acquired subsequent to the Netsmart Transaction. Refer to Note 2, “Business Combinations” for further details regarding the acquisition of these businesses. The Netsmart segment operates in and provides software and technology solutions to the health and human services and post-acute sectors of health care throughout the United States. The health and human services sector comprises behavioral health, addiction treatment, intellectual and developmental disability services, child and family services and public health market segments. The post-acute sector includes homecare and long-term care which is comprised of home health, hospice, private duty, assisted living and skilled nursing. The human services, home care and long-term care markets combined represent the second largest category of health care spending in the United States.

~~Three and Nine Months Ended September 30, 2017 Compared with the Three and Nine Months Ended September 30, 2016~~

Revenue for the three and nine months ended September 30, 2017 includes two revenue categories, business services and system sales. Business services includes both subscription revenue and services and support revenue. System sales includes revenue from software licenses, sold either as perpetual licenses or fixed-term licenses, and revenue from third party software licenses and hardware products.

Revenue for the three months ended September 30, 2017 increased compared with the prior year comparable period, primarily due to sales to both existing clients as well as new footprints and incremental revenue from the acquisitions of HealthMEDX during the fourth quarter of 2016 and DeVero during the third quarter of 2017. In addition, total revenue for the three months ended September 30, 2017 and 2016 was reduced by $1 million and $12 million, respectively, due to the impact of acquisition-related deferred revenue adjustments related to the Netsmart Transaction.

Revenue for the nine months ended September 30, 2017 compared with the prior year comparable period also increased primarily due to the same factors that drove the quarterly growth in revenue as noted in the above paragraph. Total revenue for the nine months ended September 30, 2017 and 2016 was reduced by $4 million and $22 million, respectively, due to the impact of acquisition-related deferred revenue adjustments related to the Netsmart Transaction. In addition, revenue for the nine months ended September 30, 2017 increased due to the 2016 comparable period only including results of Netsmart since the date of the Netsmart Transaction in April 2016. Furthermore, the results of the Homecare^TM ~~business are included in the Netsmart reportable segment in~~

~~the current year period and for a portion of the 2016 period and in the Unallocated Amounts category for the 2016 period prior to the date of the Netsmart Transaction.~~

Gross profit and gross margin improved during the three and nine months ended September 30, 2017, primarily driven by higher revenue from Netsmart license sales and operational efficiencies as well as the impact of lower acquisition-related deferred revenue adjustments in the 2017 periods as compared with the 2016 periods. Income from operations and operating margin improved as a result of the above revenue increases and gross margin improvements partly offset by increased expenses related to the acquired businesses.

In determining revenue, gross profit and income from operations for our segments, with the exception of the Netsmart segment, we do not include in revenue the amortization of acquisition-related deferred revenue adjustments, which reflect the fair value adjustments to deferred revenues acquired in a business acquisition. With the exception of the Netsmart segment, we also exclude the amortization of intangible assets, stock-based compensation expense, non-recurring expenses and transaction-related costs, and non-cash asset impairment charges from the operating segment data provided to our CODM. Non-recurring expenses relate to certain severance, product consolidation, legal, consulting and other charges incurred in connection with activities that are considered one-time. Accordingly, these amounts are not included in our reportable segment results and are included in the “Unallocated Amounts” category. The “Unallocated Amounts” category also includes corporate general and administrative expenses (including marketing expenses), which are centrally managed, as well as revenue and the associated cost from the resale of certain ancillary products, primarily hardware, other than the respective amounts associated with the Netsmart segment. The historical results of our Homecare^TM business prior to the Netsmart Transaction are also included in the “Unallocated Amounts” category. The Netsmart segment, as presented, includes all revenue and expenses incurred by Netsmart since it operates as a stand-alone business entity and its resources allocation and performance are reviewed and measured at such all-inclusive level. The eliminations of intercompany transactions between Allscripts and Netsmart are also included in the “Unallocated Amounts” category.

~~Three and Nine Months Ended September 30, 2017 Compared with the Three and Nine Months Ended September 30, 2016~~

Revenue from the resale of ancillary products, primarily consisting of hardware, is customer and project driven and, as a result, can fluctuate from period to period. Revenue for the nine months ended September 30, 2017 compared with the prior year comparable period decreased primarily due to the results of our Homecare^TM business being included in the Netsmart reportable segment for the 2017 period and in the Unallocated Amounts category for the 2016 period. Revenue for the three and nine months ended September 30, 2017 includes the elimination of $2 million and $7 million, respectively, of revenue associated with transactions between Allscripts and Netsmart, while revenue for the three and nine months ended September 30, 2016 includes eliminations of $2 million and $4 million, respectively. Hardware revenue for the three and nine months ended September 30, 2017 was essentially flat compared with the three and nine months ended September 30, 2016.

Gross unallocated expenses, which represent the unallocated loss from operations excluding the impact of revenue, totaled $82 million and $243 million for the three and nine months ended September 30, 2017, respectively, compared to $71 million and $241 million for the three and nine months ended September 30, 2016, respectively. The increases during the three and nine months ended September 30, 2017 compared with the prior year comparable periods were primarily driven by an increase in selling, general and administrative ~~expenses due to higher transaction-related, severance and legal~~ expenses. The increase in selling, general and administrative expenses during the nine months ended September 30, 2017 compared with the prior year comparable period was offset by a $12 million decrease in cost of revenue, which was partly due to ~~the results of our Homecare~~^TM ~~business being included in the Netsmart reportable segment in the current year period and in the Unallocated Amounts category for the 2016 period prior to the Netsmart Transaction.~~ ~~In addition, the nine months ended September 30, 2016 include a $5 million asset impairment charge which did not recur during the corresponding 2017 period.~~

Contract backlog represents the value of bookings and support and maintenance contracts that have not yet been recognized as revenue. A summary of contract backlog by revenue category is as follows:

	As of		As of		As of		% Change from September 30, 2017
	September 30,		December 31,		September 30,		December 31,			September 30,									% Change vs. September 30, 2021
(In millions)	2017		2016		2016		2016			2016			As of September 30, 2021		As of December 31, 2020		As of September 30, 2020		December 31, 2020			September 30, 2020
Software delivery, support and maintenance	$	2,384	$	2,379	$	2,300		0.2	%		3.7	%	$	2,096	$	2,153	$	2,154		(2.6	%)		(2.7	%)
Client services		1,724		1,671		1,622		3.2	%		6.3	%		1,810		1,918		1,906		(5.6	%)		(5.0	%)
Total contract backlog	$	4,108	$	4,050	$	3,922		1.4	%		4.7	%	$	3,906	$	4,071	$	4,060		(4.1	%)		(3.8	%)

Total contract backlog as of September 30, ~~2017 increased~~2021 decreased compared with December 31, ~~2016~~2020 and September 30, ~~2016.~~2020. Total contract backlog can fluctuate between periods based on the level of revenue and bookings, as well as the timing and mix of renewal activity and periodic revalidations.

The primary factors that influence our liquidity include, but are not limited to, the amount and timing of our revenues, cash collections from our clients, capital expenditures and investments in research and development efforts, including investments in or acquisitions of ~~third-parties.~~third parties, and divestitures. As of September 30, ~~2017,~~2021, our principal sources of liquidity consisted of cash and cash equivalents of ~~$104 million, net of restricted cash of $5~~$216 million and available borrowing capacity of ~~$304~~$699 million under our revolving credit facility and $50 million under the Netsmart revolving credit facility. Refer to Note 15, “Subsequent Events,” for information regarding an additional borrowing of $185.0 million under our revolving credit facility to fund a business acquisition that occurred subsequent to September 30, 2017.TheRevolving Facility. The change in our cash and cash equivalents balance is reflective of the following:

Nine Months Ended September 30, ~~2017~~2021 Compared with the Nine Months Ended September 30, ~~2016~~2020

Net cash provided by operating activities ~~decreased~~ – continuing operations increased during the nine months ended September 30, ~~2017~~2021 compared with the prior year comparable ~~period~~period. The change from net loss for the nine months ended September 30, 2020 to net income for the nine months ended September 30, 2021 reflects cost savings related to the cost reduction initiatives implemented throughout 2020, the distribution received from the Practice Fusion escrow account related to the settlement agreements with the DOJ, the investment gain and distributions received from our third-party cost method investments, the gain from the sale of our 2bPrecise business and lower interest expense, due to the repayment of the 1.25% Cash Convertible Senior Notes and the senior secured credit facility in the third and fourth quarters of 2020, respectively. Net income (loss) and cash impact of changes in operating assets and liabilities for the nine months ended September 30, 2020 reflects $89 million of payments related to the settlement agreements with the DOJ. The increase in cash impact of changes in operating assets and liabilities for the nine months ended September 30, 2021 was partially offset by working capital changes. Non-cash adjustments to net income (loss) decreased primarily due to ~~unfavorable working capital changes~~the gain from the sale of our 2bPrecise business and ~~higher costs~~lower depreciation and amortization expense. The decrease was partially offset due to the absence of equity in net income of unconsolidated investments and the asset impairment charges related to our private cloud hosting operations.

The change from net cash provided by operating activities – discontinued operations for the nine months ended September 30, 2020 to net cash used in operating activities – discontinued operations for the nine months ended September 30, 2021 was primarily due to the tax payment relating to the gain from the sale of CarePort on December 31, 2020. Additionally, both EPSi and CarePort generated cash from operations during the ~~first~~ nine months of 2017 compared with 2016, which included increased interest expense attributable to Netsmart’s non-recourse debt and higher transaction-related and legal expenses. The increase in non-cash adjustments to net loss was primarily driven by other-than-temporary impairment charges associated with long-term investments.ended September 30, 2020.

	Nine Months Ended September 30,									Nine Months Ended September 30,
(In thousands)	2017			2016			$ Change			2021			2020			$ Change
Capital expenditures	$	(40,216	)	$	(25,046	)	$	(15,170	)	$	(4,551	)	$	(7,798	)	$	3,247
Capitalized software		(107,079	)		(69,994	)		(37,085	)		(55,482	)		(71,337	)		15,855
Cash paid for business acquisitions, net of cash acquired		(54,308	)		(935,280	)		880,972
Purchases of equity securities, other investments and related intangible assets		(5,423	)		(20,685	)		15,262
Other proceeds from investing activities		215			37			178
Sale of businesses and other investments, net of cash divested, and distributions received											7,581			24,884			(17,303	)
Purchases of equity securities, other investments and related intangible assets, net											(2,421	)		(3,888	)		1,467
Net cash used in investing activities - continuing operations											(54,873	)		(58,139	)		3,266
Net cash used in investing activities - discontinued operations											0			(6,793	)		6,793
Net cash used in investing activities	$	(206,811	)	$	(1,050,968	)	$	844,157		$	(54,873	)	$	(64,932	)	$	10,059

Nine Months Ended September 30, ~~2017~~2021 Compared with the Nine Months Ended September 30, ~~2016~~2020

Net cash used in investing activities – continuing operations decreased during the nine months ended September 30, ~~2017~~2021, compared with the prior year comparable ~~period,~~ period. The decrease in the use of cash during 2021 was primarily due to a decrease in capitalized software costs, a decrease in capital expenditures and the ~~acquisition~~receipt of ~~Netsmart, Inc. for $906 million, net~~distributions from a third-party cost method investment. The decrease was partially offset by a decrease in the sale of investments.

Net cash ~~acquired, and $21 million of new third-party investments~~used in investing activities – discontinued operations during the nine months ended September 30, ~~2016, partly offset by increased~~2020 reflects spending for capital expenditures and capitalized software costs related to the EPSi and CarePort businesses that were sold during the nine months ended September 30, 2017. During the nine months ended September 30, 2017, we acquired $2.8 million in equity investments in third parties and a $2.6 million convertible note issued by another entity in which we also hold an equity investment. ~~The increase in capital spending during the nine months ended September 30, 2017 is partly due to Netsmart. During the third~~fourth quarter of 2017, Netsmart acquired DeVero for $48.5 million, net of cash acquired. In addition, during the first quarter of 2017, Netsmart entered into an Asset Purchase Agreement with a third party, for an aggregate cash consideration of $4.0 million, to acquire a business consisting of intellectual property, certain contractual relationships and certain associates.2020.

Nine Months Ended September 30, ~~2017~~2021 Compared with the Nine Months Ended September 30, ~~2016~~2020

~~Net~~The change from net cash provided by ~~investing~~financing activities ~~decreased during~~for the nine months ended September 30, ~~2017 compared with the prior year comparable period primarily due~~2020 to ~~$534 million,~~ net ~~of issuance costs, borrowed under Netsmart’s non-recourse Credit Agreements and $45 million borrowed under our revolving credit facility to partially finance the Netsmart Acquisition during~~cash used in financing activities for the nine months ended September 30, ~~2016. In addition, Netsmart received $334 million in proceeds from~~ 2021 was primarily a result of the ~~issuance of redeemable convertible preferred stock during~~payment made pursuant to the ~~second quarter of 2016.~~ ~~During~~accelerated share repurchase program, the nine months ended September 30, 2017, Netsmart borrowed an additional $51 million under its senior secured term loan, primarily used to finance its acquisition of DeVero, Inc. Additionally, we repurchased a smaller amountrepurchase of common stock ~~during~~on the ~~nine months ended September 30, 2017 compared with~~open market and lower credit facility borrowings in 2021, partially offset by lower credit facility payments in 2021 and the ~~prior year comparable period.~~repayment of convertible senior notes in 2020.

The following table summarizes ~~our required minimum~~ future payments under the ~~1.25%~~0.875% Convertible Senior Notes ~~the Senior Secured Credit~~and Revolving Facility ~~and Netsmart’s Non-Recourse Debt~~ as of September 30, 2017. Refer to Note 15, “Subsequent Events,” for information regarding an additional borrowing of $185.0 million under the Senior Secured Credit Facility to fund a business acquisition that occurred subsequent to September 30, 2017.2021:

(In thousands)

Total

Remainder of 2017

2018

2019

2020

2021

Thereafter

Principal payments:

1.25% Cash Convertible Senior
  Notes ⁽¹⁾

$
345,000

$
0

$
0

$
0

$
345,000

$
0

$
0

Senior Secured Credit Facility ⁽²⁾

470,000

6,250

28,125

40,625

395,000

0

0

Netsmart Non-Recourse Debt⁽²⁾

First Lien Term Loan

480,533

1,217

4,866

4,866

4,866

4,866

459,852

Second Lien Term Loan

167,000

0

0

0

0

0

167,000

   Total principal payments

1,462,533

7,467

32,991

45,491

744,866

4,866

626,852

Interest payments:

1.25% Cash Convertible Senior
  Notes ⁽¹⁾

12,939

0

4,313

4,313

4,313

0

0

Senior Secured Credit Facility ^{(2) (3)}

43,905

4,323

16,748

15,604

7,230

0

0

Netsmart Non-Recourse Debt

First Lien Term Loan ⁽⁴⁾

156,668

7,007

27,850

27,566

27,282

26,998

39,965

First Lien Revolver ⁽⁵⁾

938

63

250

250

250

125

0

Second Lien Term Loan ⁽⁶⁾

112,901

4,516

18,064

18,064

18,064

18,064

36,129

   Total interest payments

327,351

15,909

67,225

65,797

57,139

45,187

76,094

Total future debt payments

$
1,789,884

$
23,376

$
100,216

$
111,288

$
802,005

$
50,053

$
702,946

(In thousands)	Total		Remainder of 2021		2022		2023		2024		2025		Thereafter
Principal payments:
0.875% Convertible Senior Notes ⁽¹⁾	$	207,911	$	0	$	0	$	0	$	0	$	0	$	207,911
Revolving Facility ⁽²⁾		200,000		0		0		200,000		0		0		0
Total principal payments		407,911		0		0		200,000		0		0		207,911
Interest payments:
0.875% Convertible Senior Notes		10,006		0		1,819		1,819		1,819		1,819		2,730
Revolving Facility ^{(2) (3)}		8,349		1,392		5,566		1,391		0		0		0
Total interest payments		18,355		1,392		7,385		3,210		1,819		1,819		2,730
Total future debt payments	$	426,266	$	1,392	$	7,385	$	203,210	$	1,819	$	1,819	$	210,641

We are currently in our seventh year of a ten-year agreement with Atos (formerly known as Xerox Consultant Services) to provide services to support our private cloud hosting services for our Sunrise acute care clients. We maintain all client relationships and domain expertise with respect to the hosted applications. The agreement includes the payment of an initial base amount of $50 million per year plus charges for services incremental to the base agreement. We incur approximately $5.0 million of expenses per month under this agreement, which are included in client services cost of revenue in our consolidated statements of operations.

Our total investment in research and development ~~efforts during 2017~~ is expected to ~~increase compared with 2016~~decline in 2021 as ~~we continue~~the Company continues to ~~build and expand our capabilities~~benefit from margin improvement initiatives that commenced in ~~emerging areas of health care, such as precision medicine and population health analytics, and our traditional offerings in the ambulatory and acute markets.~~2020. Our total spending consists of research and development costs directly recorded to expense, which are offset by the capitalization of eligible development costs. Capitalized software development costs for the three and nine months ended September 30, 2017, include $6.8 million and $23.5 million, respectively, of third-party software purchases to supplement our internal software development efforts, while there were no such purchases during the three and nine months ended September 30, 2016.

~~We plan to fund the purchase price under the Purchase Agreement for the EIS Business using cash on hand and borrowings under our senior secured credit facilities.~~

To supplement our statement of operations, the table below presents a non-GAAP measure of research and development-related expenses that we believe is a useful metric for evaluating how we are investing in research and development.

We believe that our cash and cash equivalents of ~~$104 million, net of restricted cash of $5~~$216 million as of September 30, ~~2017,~~2021, our future cash flows, ~~and~~ our borrowing capacity under our ~~revolving credit facility~~Revolving Facility and ~~the Netsmart revolving credit facility,~~access to capital markets, taken together, provide adequate resources to ~~fund our ongoing cash requirements for the next twelve months.~~meet future operating needs as well as scheduled payments of short and long-term debt. We cannot provide assurance that our actual cash requirements will not be greater than we expect as of the date of this Form 10-Q. We will, from time to time, consider the acquisition of, or investment in, complementary businesses, products, services and technologies ~~each~~and the repurchase of our common stock under our stock repurchase program, any of which might impact our liquidity requirements or cause us to borrow additional amounts under our Revolving Facility or issue additional equity or debt securities.

If sources of liquidity are not available or if we cannot generate sufficient cash flow from operations during the next twelve months, we might be required to obtain additional sources of funds through additional operating improvements, capital market transactions, asset sales or financing from third parties, a combination thereof or otherwise. We cannot provide assurance that these additional sources of funds will be available or, if available, would have reasonable terms.

Contractual Obligations, Commitments and ~~Off Balance~~Off-Balance Sheet Arrangements

We have various contractual obligations, which are recorded as liabilities in our consolidated financial statements. ~~Other items, such as operating lease contract obligations, are not recognized as liabilities in our consolidated financial statements but are required to be disclosed.~~

During the nine months ended September 30, ~~2017, in~~2021, there were no material changes, outside of the ordinary course of business, ~~we amended or renewed multi-year service agreements with third-party software vendors, which resulted in increases of approximately $20 million, $34 million, $28 million, $11 million and $3 million~~ to our ~~future~~contractual obligations and purchase ~~obligations amounts for the years ending December 31, 2017, 2018, 2019, 2020 and 2021, respectively,~~commitments previously disclosed in our Form 10-K.

Our market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our Form 10-K have not changed materially during the ~~quarter~~nine months ended September 30, ~~2017.~~

Evaluation of ~~disclosure controls~~Disclosure Controls and ~~procedures~~Procedures

Under the ~~direction~~supervision and with the participation of our management, including our chief executive officer and chief financial officer, we ~~evaluated~~conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, ~~pursuant to~~as such term is defined under Rule ~~13a-15(b)~~13a-15(e) promulgated under the Exchange Act, as of the ~~Securities Exchange Act~~end of ~~1934, as amended (the “Exchange Act”),~~the period covered by this Form 10-Q.

Based on management’s evaluation, our chief executive officer and our chief financial officer concluded that our disclosure controls and procedures are designed to, and were effective as of September 30, ~~2017.~~2021 to, provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure.

On August 25, 2017, we acquired substantially all of the assets of NantHealth’s provider/patient engagement solutions business as further described in Note 2, “Business Combinations”, of the notes to consolidated financial statements. We continue to integrate policies, processes, people, technology and operations from that transaction, and we will continue to evaluate the impact of any related changes to internal control over financial reporting during the remainder of our 2017 fiscal year. Except for any changes in internal controls related to the inclusion of Netsmart’s internal controls in the Company’s control environment and the integration of the NantHealth provider/patient engagement solutions business into Allscripts, thereThere have been no ~~other~~ changes in our internal control over financial reporting during the quarter ended September 30, ~~2017,~~2021, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We hereby incorporate by reference Note ~~12,~~14, “Contingencies,” of the Notes to Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.

Except ~~for the additional risk factor set forth below,~~as follows, there have been no other material changes during the ~~quarter~~nine months ended September 30, ~~2017~~2021 from the risk factors as previously disclosed in our Form 10-K.

The failure by Practice Fusion to comply with the terms of its settlement agreements with the U.S. Department of Justice (the “DOJ”) could have a material and adverse impact on our business, results of operations and financial condition, and, even if Practice Fusion complies with those settlement agreements, the costs and burdens of compliance could be significant, and we may face additional investigations and proceedings from other governmental entities or third parties related to the same or similar conduct underlying the agreements with the DOJ.

~~Our acquisition~~On January 27, 2020, we announced that our subsidiary Practice Fusion entered into a series of agreements to resolve an investigation conducted by the DOJ and the U.S. Attorney for the District of Vermont. See the risk factor entitled “We have acquired and expect to acquire new companies, investments or technologies, which are subject to significant risks.” Practice Fusion has entered a three-year deferred prosecution agreement with the U.S. Attorney for the District of Vermont (“Deferred Prosecution Agreement”) and a civil settlement agreement with the DOJ (“Civil Settlement Agreement”), and has entered into separate civil settlement agreements with the Medicaid programs for each U.S. state, the District of Columbia and Puerto Rico (“State Settlement Agreements” and, together with the Deferred Prosecution Agreement and the Civil Settlement Agreement, the “Settlement Agreements”).

Under the Deferred Prosecution Agreement, Practice Fusion consented to the filing of a two count criminal information: one felony count of violating the Anti-Kickback Statute and one felony count of conspiracy to violate the Anti-Kickback Statute. The Deferred Prosecution Agreement required Practice Fusion to pay a criminal fine of $25.3 million and a forfeiture payment of $959,700, both of which have been paid in full, and for the Company and Practice Fusion to regularly review and certify compliance with the Deferred Prosecution Agreement. Practice Fusion also agreed to implement Additional Civil Compliance Terms, which include the appointment of an Oversight Organization and the implementation of compliance measures set forth in a Compliance Addendum, each as described further in the Deferred Prosecution Agreement. The Oversight Organization Mandate requires Practice Fusion to retain an Oversight Organization selected by the U.S. Attorney’s Office for the District of Vermont for three years. The Oversight Organization is required to take steps to provide reasonable assurance that Practice Fusion establishes and maintains compliance systems, controls and processes reasonably designed, implemented and operated to ensure Practice Fusion’s compliance with the terms of the ~~EIS Business~~Deferred Prosecution Agreement, including the Compliance Addendum, as well as reducing the risk of any recurrence of misconduct as described in the information and statement of facts. The Compliance Addendum also required Practice Fusion to, within 90 days of the execution of the Deferred Prosecution Agreement, implement and maintain a Sponsored Clinical Decision Support (“CDS”) Compliance Program that sets procedures and systems to review all current or future Sponsored CDSs on the Practice Fusion electronic health records system. Practice Fusion is subject to ~~material risks and uncertainties~~

~~The success of our acquisition~~the Compliance Addendum for a three-year period from the effective date of the ~~EIS Business will depend,~~Deferred Prosecution Agreement.

Practice Fusion also entered into the Civil Settlement Agreement to resolve allegations by the DOJ that false claims were submitted to governmental healthcare programs. The Civil Settlement Agreement required Practice Fusion to pay a civil settlement of $118.6 million, which included $5.2 million designated for the state Medicaid program expenditures and has been paid in ~~part, on our ability~~full. In addition, Practice Fusion entered into the State Settlement Agreements to ~~achieve~~resolve Medicaid claims under state law analogues to the ~~expected benefits~~federal False Claims Act. The financial terms of the ~~acquisition and~~State Settlement Agreements are substantially similar to ~~integrate~~those set forth in the Civil Settlement Agreement.

See Note 14, “Contingencies,” to our ~~existing businesses~~consolidated financial statements included in Part I, Item 1, “Financial Statements” of this Form 10-Q for additional information.

Compliance with ~~those~~the terms of the ~~EIS Business, including the integration of products~~Settlement Agreements has imposed and ~~technologies. This integration will be complex, costly and time-consuming and will involve numerous risks, including, but not limited~~could continue to unanticipated expenses and the diversion of financial, managerial, and other resources from both our existing operations and those of the EIS Business. If we fail to successfully integrate the EIS Business, we may not be able to achieve projected results or support the amount of consideration paid for the EIS Business, which could materially and adversely impact our business, financial condition and operating results. In addition, as previously announced by McKesson, the Horizon product line of the EIS Business will be sunset in March 2018. The transition away from the Horizon product line may involve anticipated and unanticipatedimpose significant costs and liabilities, including severance costs, customer attrition and customer claims relating to such transition, any of which could materially and adversely impact our business, financial condition and operating results.

~~In addition, as previously announced by McKesson, the EIS Business is subject to~~burdens on us. For instance, on August 25, 2021, Practice Fusion received a ~~May 2017 civil investigative demand (CID)~~notice from the U.S. Attorney’s Office for the ~~Eastern~~ District of ~~New York. The CID requests documents~~Vermont stating Practice Fusion was in breach of the Deferred Prosecution Agreement after Practice Fusion’s Initial Oversight Organization resigned. On September 17, 2021, Practice Fusion engaged a new Oversight Organization, and ~~information related to the certification McKesson obtained~~it is currently engaged in ~~connection~~discussions with the U.S. ~~Department~~Attorney’s Office concerning the claim that a breach of ~~Health~~the Deferred Prosecution Agreement occurred. The failure by Practice Fusion to comply with any Settlement Agreement may result in the DOJ imposing substantial monetary penalties, excluding Practice Fusion from Medicare, Medicaid and ~~Human Services’ Electronic Health Record Incentive Program. In our purchase agreement with McKesson, McKesson has agreed, with respect to the CID, to indemnify Allscripts for amounts paid~~ other federal healthcare programs, and/or payable to the government (or any private relator) involving any products or services marketed, sold or licensed by the EIS Business as of or prior to the closing. If the CID results in non-monetary relief, significant compliance or litigation costs, or any losses to Allscripts that are not covered by the indemnification from McKesson, such relief, costs or lossescriminally prosecuting Practice Fusion, which could ~~materially and adversely impact~~have a material adverse effect on our business, financial condition and ~~operating results.~~results of operations.

Other government investigations or legal or regulatory proceedings, including investigations or proceedings brought by private litigants or shareholders, federal agencies, private insurers and states’ attorneys general, may follow as a consequence of our entry into the Settlement Agreement or the existing government investigation of our EIS Business, which could result in criminal liability, the imposition of damages or non-monetary relief, significant compliance, litigation or settlement costs, other losses, or a diversion of management’s attention from other business concerns and have a material adverse effect on our business, results of operations and financial condition. For example, Practice Fusion has received requests for documents and information from the Attorneys General of several states arising from the conduct at issue in the Settlement Agreements. We may also be subject to negative publicity related to these matters that could harm our reputation, reduce demand for our solutions and services, result in employee attrition and negatively impact our stock price.

On ~~November 17, 2016,~~May 26, 2021, we announced that our Board of Directors approved a new stock purchase program (the “2021 Program”) under which we may repurchase up to ~~$200~~$350 million of our common stock. The 2021 Program replaced a previous program and does not have a termination date. During the three months ended September 30, 2021, we received 2.4 million shares of our common stock ~~through December 31, 2019.~~ at final settlement of the accelerated share repurchase program entered into on June 14, 2021, described below. We did not repurchase any shares on the open market during the three months ended September 30, 2021.

On June 14, 2021, we entered into Supplemental Confirmations (each, a “June 2021 Supplemental Confirmation”) to the separate Master Confirmations (each, a “Master Confirmation”) dated November 30, 2020 (each, as supplemented by the corresponding June 2021 Supplemental Confirmation, a “June 2021 ASR Agreement”), with JPMorgan Chase Bank, National Association and Wells Fargo Bank, National Association (each, an “ASR Counterparty”, or collectively, the “ASR Counterparties”), to purchase shares of our common stock for a total payment of $200.0 million (the “June 2021 Prepayment Amount”). Under the terms of the June 2021 ASR Agreements, on June 14, 2021, we paid the June 2021 Prepayment Amount to the ASR Counterparties and received on June 16, 2021 an initial delivery of approximately 9.1 million shares of our common stock, which is approximately 80% of the total number of shares that could be repurchased under the June 2021 ASR Agreements if the final purchase price per share equaled the closing price of our common stock on June 14, 2021. The total number of shares received under the June 2021 ASR Agreements, after final settlement, was based on the average daily volume weighted average price of our common stock during the repurchase period, less an agreed upon discount. Final settlement of the June 2021 ASR Agreements occurred in August 2021, resulting in the receipt of 2.4 million additional shares, which yielded a weighted average share repurchase price of approximately $17.28.

Any future stock ~~repurchases~~repurchase transactions may be made through open market transactions, block trades, privately negotiated transactions (including accelerated share repurchase transactions) or other means, subject to market conditions.

Any repurchase activity will depend on many factors such as our working capital needs, cash requirements for investments, debt repayment obligations, economic and market conditions at the time, including the price of our common stock, and other factors that we consider relevant. Our stock repurchase program may be accelerated, suspended, delayed or discontinued at any time.

The following table summarize the stock repurchase activity during the three months ended September 30, ~~2017. The~~2021 and the approximate dollar value of shares that may yet to be purchased ~~pursuant to~~under our stock repurchase ~~program as of September 30, 2017 was $163.9 million.~~program:

Incorporated by Reference
Exhibit Number

Exhibit Description

Filed Herewith

Furnished Herewith

Form

Exhibit

Filing Date

2.1

Purchase Agreement, dated as of August 1, 2017, by and between McKesson Corporation and Allscripts Healthcare, LLC.

8-K

2.1

August 4, 2017

2.2

Asset Purchase Agreement, dated as of August 3, 2017, between Allscripts Healthcare Solutions, Inc. and NantHealth, Inc.

8-K

2.1

August 31, 2017

2.3

Amendment No. 1 to Purchase Agreement, dated as of October 2, 2017, by and between McKesson Corporation and Allscripts Healthcare, LLC.

X

31.1

Rule 13a - 14(a) Certification of Chief Executive Officer

X

31.2

Rule 13a - 14(a) Certification of Chief Financial Officer

X

32.1

Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer

X

101.INS

XBRL Instance Document

X

101.SCH

XBRL Taxonomy Extension Schema

X

101.CAL

XBRL Taxonomy Extension Calculation Linkbase

X

101.LAB

XBRL Taxonomy Extension Label Linkbase

X

101.PRE

XBRL Taxonomy Extension Presentation Linkbase

X

101.DEF

XBRL Taxonomy Definition Linkbase

X

Exhibit Number	Exhibit Description	Filed Herewith	Furnished Herewith
31.1	Rule 13a - 14(a) Certification of Chief Executive Officer	X

31.2	Rule 13a - 14(a) Certification of Chief Financial Officer	X

32.1	Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer		X

101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline document	X

101.SCH	Inline XBRL Taxonomy Extension Schema	X

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase	X

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase	X

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase	X

101.DEF	Inline XBRL Taxonomy Definition Linkbase	X

104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in Inline XBRL and included in Exhibit 101.	X

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.

		PAGE
PART I. FINANCIAL INFORMATION		3
Item 1.	Financial Statements (unaudited)	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2729
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4239
Item 4.	Controls and Procedures	4239
PART II. OTHER INFORMATION		4340
Item 1.	Legal Proceedings	4340
Item 1A.	Risk Factors	4340
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4341
Item 6.	Exhibits	4442
SIGNATURES		4543

(In thousands)	Three Months Ended March 31, 2021		Three Months Ended June 30, 2021		Three Months Ended September 30, 2021
Revenue related to deferred revenue balance at beginning of period	$	137,848	$	151,857	$	144,696
Revenue related to new performance obligations satisfied during the period		173,316		158,910		159,149
Revenue recognized under "right-to-invoice" expedient		56,811		62,422		64,820
Reimbursed travel expenses, shipping and other revenue		377		525		607
Total revenue	$	368,352	$	373,714	$	369,272

(In thousands)	Three Months Ended March 31, 2020		Three Months Ended June 30, 2020		Three Months Ended September 30, 2020
Revenue related to deferred revenue balance at beginning of period	$	105,366	$	119,545	$	118,300
Revenue related to new performance obligations satisfied during the period		216,580		195,308		192,658
Revenue recognized under "right-to-invoice" expedient		58,059		54,082		54,313
Reimbursed travel expenses, shipping and other revenue		1,359		369		347
Total revenue	$	381,364	$	369,304	$	365,618

(In thousands)	Total
Balance at December 31, 2020	$	5,341
Current period provision		0
Balance at September 30, 2021	$	5,341
Less: Contract assets, short-term		1,068
Total contract assets, long-term	$	4,273


☒	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

	Three Months Ended September 30, 2021
(In thousands)	Hospital and Large Physician Practices		Veradigm		Unallocated Amounts		Total
Software delivery, support and maintenance	$	104,809	$	113,075	$	4,842	$	222,726
Client services		120,876		24,093		1,577		146,546
Total revenue	$	225,685	$	137,168	$	6,419	$	369,272

	Three Months Ended September 30, 2020
(In thousands)	Hospital and Large Physician Practices		Veradigm		Unallocated Amounts		Total
Software delivery, support and maintenance	$	113,112	$	101,171	$	5,567	$	219,850
Client services		120,518		23,902		1,348		145,768
Total revenue	$	233,630	$	125,073	$	6,915	$	365,618

	Nine Months Ended September 30, 2021
(In thousands)	Hospital and Large Physician Practices		Veradigm		Unallocated Amounts		Total
Software delivery, support and maintenance	$	333,277	$	323,462	$	14,101	$	670,840
Client services		362,150		73,525		4,823		440,498
Total revenue	$	695,427	$	396,987	$	18,924	$	1,111,338

	Nine Months Ended September 30, 2020
(In thousands)	Hospital and Large Physician Practices		Veradigm		Unallocated Amounts		Total
Software delivery, support and maintenance	$	351,098	$	314,550	$	14,476	$	680,124
Client services		361,440		70,975		3,747		436,162
Total revenue	$	712,538	$	385,525	$	18,223	$	1,116,286

(In thousands, except lease term and discount rate)	September 30, 2021			December 31, 2020
Right-of-use assets - operating leases	$	70,297		$	96,601
Current operating lease liabilities	$	19,264		$	22,264
Long-term operating lease liabilities	$	67,057		$	93,463
Weighted average remaining lease term (in years)		5			6
Weighted average discount rate		3.3	%		3.6	%

	September 30, 2021
(In thousands)	Operating Leases
Remainder of 2021	$	5,669
2022		21,469
2023		19,650
2024		14,105
2025		12,748
Thereafter		20,130
Total lease liabilities		93,771
Less: Amount representing interest		(7,450	)
Less: Short-term lease liabilities		(19,264	)
Total long-term lease liabilities	$	67,057

	(In thousands)
Cash	$	1,742
NantHealth common stock		42,750
Less: Value assigned to modification of existing commercial agreement with NantHealth		(22,700	)
Total consideration for NantHealth provider/patient solutions business	$	21,792

	(In thousands)
Cash and cash equivalents	$	21
Accounts receivable, net		2,078
Prepaid expenses and other current assets		1,806
Fixed assets		7,099
Intangible assets		12,400
Goodwill		9,058
Other assets		205
Accounts payable and accrued expenses		(1,575	)
Deferred revenue		(9,300	)
Net assets acquired	$	21,792

	Useful Life	Fair Value
Description	(In years)	(In thousands)
Customer Relationships	19	$	9,200
Technology	5		3,000
Tradenames	5		200
		$	12,400

(In thousands)	Contingent Consideration
Balance at December 31, 2020	$	1,011
Payments		(858	)
Balance at September 30, 2021	$	153

	Number of
	Investees		Original		Carrying Value at
(In thousands, except # of investees)	at September 30, 2017		Investment		September 30, 2017		December 31, 2016
Equity method investments ⁽¹⁾		3	$	1,658	$	4,142	$	2,436
Cost method investments		7		32,784		26,572		26,041
Total equity investments		10	$	34,442	$	30,714	$	28,477

	Number of Investees		Original		Carrying Value at
(In thousands, except for number of investees)	at September 30, 2021		Cost		September 30, 2021		December 31, 2020
Equity method investments ⁽¹⁾		3	$	7,099	$	10,181	$	10,744
Cost less impairment		8		49,336		49,127		25,059
Total long-term equity investments		11	$	56,435	$	59,308	$	35,803

	Clinical and		Population
(In thousands)	Financial Solutions		Health		Netsmart		Total
Balance as of December 31, 2016	$	843,837	$	404,875	$	675,340	$	1,924,052
DeVero acquisition		0		0		32,943		32,943
Nanthealth provider/patient solutions business		0		9,058		0		9,058
Other additions		405		47		4,503		4,955
Foreign exchange translation		942		0		0		942
Balance as of September 30, 2017	$	845,184	$	413,980	$	712,786	$	1,971,950


(In thousands)	Total		Remainder of 2017		2018		2019		2020		2021		Thereafter
1.25% Cash Convertible Senior Notes ⁽¹⁾	$	345,000	$	0	$	0	$	0	$	345,000	$	0	$	0
Term Loan		225,000		6,250		28,125		40,625		150,000		0		0
Revolving Facility ⁽²⁾		245,000		0		0		0		245,000		0		0
Netsmart Non-Recourse Debt ⁽²⁾
First Lien Term Loan		480,533		1,217		4,866		4,866		4,866		4,866		459,852
Second Lien Term Loan		167,000		0		0		0		0		0		167,000
Total debt	$	1,462,533	$	7,467	$	32,991	$	45,491	$	744,866	$	4,866	$	626,852

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except effective tax rate)	2021			2020			2021			2020
Income (loss) from continuing operations before income taxes	$	21,293		$	(18,072	)	$	56,646		$	(74,561	)
Income tax (provision) benefit	$	(5,099	)	$	4,116		$	(9,954	)	$	6,641
Effective tax rate		23.9	%		22.8	%		17.6	%		8.9	%

(In thousands)	Foreign Currency Translation Adjustments			Unrealized Net (Losses) Gains on Available for Sale Securities			Unrealized Net Gains on Foreign Exchange Contracts			Total
Balance as of December 31, 2016 ⁽¹⁾	$	(6,028	)	$	(56,420	)	$	619		$	(61,829	)
Other comprehensive income (loss) before reclassifications		3,040			(106,355	)		1,421			(101,894	)
Net losses (gains) reclassified from accumulated other comprehensive loss ⁽²⁾		0			162,865			(1,209	)		161,656
Net other comprehensive income		3,040			56,510			212			59,762
Balance as of September 30, 2017 ⁽³⁾	$	(2,988	)	$	90		$	831		$	(2,067	)

(In thousands)	Foreign Currency Translation Adjustments			Unrealized Net Gains (Losses) on Foreign Exchange Contracts			Total
Balance as of December 31, 2020⁽¹⁾	$	(2,957	)	$	1,119		$	(1,838	)
Other comprehensive (loss) income before reclassifications		(285	)		90			(195	)
Net losses (gains) reclassified from accumulated other comprehensive loss		0			(1,209	)		(1,209	)
Net other comprehensive income (loss)		(285	)		(1,119	)		(1,404	)
Balance as of September 30, 2021	$	(3,242	)	$	0		$	(3,242	)

(In thousands)	Foreign Currency Translation Adjustments			Unrealized Net Losses on Available for Sale Securities			Unrealized Net Gains on Foreign Exchange Contracts			Total
Balance as of December 31, 2015 ⁽¹⁾	$	(4,500	)	$	0		$	258		$	(4,242	)
Other comprehensive (loss) income before reclassifications		(49	)		(8,365	)		710			(7,704	)
Net losses reclassified from accumulated other comprehensive loss		0			0			(165	)		(165	)
Net other comprehensive (loss) income		(49	)		(8,365	)		545			(7,869	)
Balance as of September 30, 2016⁽²⁾	$	(4,549	)	$	(8,365	)	$	803		$	(12,111	)

	Three Months Ended September 30						Nine Months Ended September 30,
(In thousands)	2017			2016			2017			2016
Research and development costs directly recorded to expense	$	51,057		$	45,142		$	146,748		$	140,070
Capitalized software development costs per consolidated statement of cash flows		35,497			32,888			107,079			69,994
Total non-GAAP R&D-related spending	$	86,554		$	78,030		$	253,827		$	210,064
Total revenue	$	449,442		$	392,384		$	1,289,008		$	1,124,463
Total non-GAAP R&D-related spending as a % of total revenue		19.3	%		19.9	%		19.7	%		18.7	%

(In thousands, except per share amounts)
					Total Number		Approximate
					Of Shares		Dollar Value
					Purchased		Of Shares
					As Part Of		That May Yet
	Total		Average		Publicly		Be Purchased
	Number		Price		Announced		Under The
	Of Shares		Paid Per		Plans Or		Plans Or
Period (Based on Trade Date)	Purchased		Share⁽¹⁾⁽²⁾		Programs		Programs
07/01/21—07/31/21		-	$	-		-	$	108,361
08/01/21—08/31/21 ⁽³⁾		2,470	$	-		2,470	$	108,361
09/01/21—09/30/21		-	$	-		-	$	108,361
		2,470	$	-		2,470

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

By:		/s/ ~~Dennis M. Olis~~Richard J. Poulton
		~~Dennis M. Olis~~Richard J. Poulton
		President and Chief Financial Officer
		(Principal Financial and Accounting Officer and Duly Authorized Officer)

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