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 every Interactive Data File required to be submitted 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 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.

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 ~~October 26, 2020,~~August 2, 2021, there were ~~157,981,681~~125,010,868 shares of the registrant's $0.01 par value common stock outstanding.

(In thousands, except per share amounts)	September 30, 2020		December 31, 2019		June 30, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	218,701	$	129,668	$	229,254	$	531,104
Restricted cash		6,209		7,871		2,129		6,361
Accounts receivable, net of allowance of $37,025 and $23,879 as of September 30, 2020 and December 31, 2019, respectively		381,888		459,751
Contract assets, net of allowance of $1,068 and $0 as of September 30, 2020 and December 31, 2019, respectively		101,333		95,982
Accounts receivable, net of allowance of $31,991 and $31,596 as of June 30, 2021 and December 31, 2020, respectively						338,587		347,355
Contract assets, net of allowance of $1,068 as of June 30, 2021 and December 31, 2020						120,051		106,717
Income tax receivable						0		25,421
Prepaid expenses and other current assets		135,869		147,990		150,968		136,264
Assets held for sale		104,782		0
Total current assets		948,782		841,262		840,989		1,153,222
Fixed assets, net		70,027		88,339		59,077		72,162
Software development costs, net		241,656		243,929		182,848		193,202
Intangible assets, net		329,011		374,142		261,258		286,602
Goodwill		1,287,197		1,362,017		974,834		974,729
Deferred taxes, net		5,881		5,704		5,872		5,790
Contract assets - long-term, net of allowance of $4,273 and $0 as of September 30, 2020 and December 31, 2019, respectively		42,805		67,559
Contract assets - long-term, net of allowance of $4,273 as of June 30, 2021 and December 31, 2020						49,849		43,682
Right-of-use assets - operating leases		102,217		98,020		75,052		96,601
Other assets		118,689		124,767		90,521		91,628
Total assets	$	3,146,265	$	3,205,739	$	2,540,300	$	2,917,618

(In thousands, except per share amounts)	September 30, 2020			December 31, 2019			June 30, 2021			December 31, 2020
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	53,627		$	104,014		$	26,782		$	35,905
Accrued expenses		166,180			270,662			88,780			100,262
Accrued compensation and benefits		97,515			68,569			94,185			118,771
Deferred revenue		339,239			379,843			364,000			334,764
Current maturities of long-term debt		48,293			364,465
Current operating lease liabilities		22,317			23,137			19,662			22,264
Liabilities related to assets held for sale		17,479			0
Current liabilities attributable to discontinued operations								2,670			322,811
Total current liabilities		744,650			1,210,690			596,079			934,777
Long-term debt		1,026,048			551,004			421,312			167,587
Deferred revenue		11,570			12,337			2,862			3,471
Deferred taxes, net		24,534			21,038			17,797			18,186
Long-term operating lease liabilities		98,866			95,162			71,597			93,463
Other liabilities		32,210			30,320			37,179			33,891
Total liabilities		1,937,878			1,920,551			1,146,826			1,251,375
Commitments and contingencies
Stockholders’ equity:
Preferred stock: $0.01 par value, 1,000 shares authorized, 0 shares issued and outstanding as of September 30, 2020 and December 31, 2019		0			0
Common stock: $0.01 par value, 349,000 shares authorized as of September 30, 2020 and December 31, 2019; 274,471 and 157,978 shares issued and outstanding as of September 30, 2020, respectively; 272,609 and 162,475 shares issued and outstanding as of December 31, 2019, respectively		2,744			2,725
Treasury stock: at cost, 116,493 and 110,134 shares as of September 30, 2020 and December 31, 2019, respectively		(625,246	)		(571,157	)
Preferred stock: $0.01 par value, 1,000 shares authorized, 0 shares issued and outstanding as of June 30, 2021 and December 31, 2020								0			0
Common stock: $0.01 par value, 349,000 shares authorized as of June 30, 2021 and December 31, 2020; 276,668 and 125,011 shares issued and outstanding as of June 30, 2021, respectively; 274,558 and 139,942 shares issued and outstanding as of December 31, 2020, respectively								2,766			2,745
Treasury stock: at cost, 151,657 and 134,616 shares as of June 30, 2021 and December 31, 2020, respectively								(1,174,498	)		(870,558	)
Additional paid-in capital		1,929,396			1,907,348			1,903,542			1,902,776
Accumulated deficit		(94,706	)		(49,336	)
Retained earnings								664,101			633,118
Accumulated other comprehensive loss		(3,801	)		(4,392	)		(2,437	)		(1,838	)
Total stockholders’ equity		1,208,387			1,285,188			1,393,474			1,666,243
Total liabilities and stockholders’ equity	$	3,146,265		$	3,205,739		$	2,540,300		$	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,						Three Months Ended June 30,						Six Months Ended June 30,
(In thousands, except per share amounts)	2020			2019			2020			2019			2021			2020			2021			2020
Revenue:
Software delivery, support and maintenance	$	250,547		$	284,373		$	770,180		$	844,908		$	219,610		$	223,591		$	442,301		$	455,731
Client services		151,483			159,811			454,786			475,785			154,104			145,713			299,765			294,937
Total revenue		402,030			444,184			1,224,966			1,320,693			373,714			369,304			742,066			750,668
Cost of revenue:
Software delivery, support and maintenance		75,311			83,312			225,879			248,401			69,303			71,130			140,034			144,214
Client services		131,915			156,275			420,185			452,226			122,597			131,171			240,684			279,391
Amortization of software development and acquisition-related assets		33,207			29,295			95,860			86,547			30,061			29,405			59,550			57,529
Total cost of revenue		240,433			268,882			741,924			787,174			221,961			231,706			440,268			481,134
Gross profit		161,597			175,302			483,042			533,519			151,753			137,598			301,798			269,534
Selling, general and administrative expenses		97,231			101,152			309,139			306,939			79,090			109,897			160,798			202,722
Research and development		48,476			63,873			158,913			191,597			51,219			46,045			100,392			105,422
Asset impairment charges		210			248			210			4,037			5,244			0			5,244			0
Amortization of intangible and acquisition-related assets		6,301			6,847			19,347			20,376			5,825			6,321			11,649			13,031
Income (loss) from operations		9,379			3,182			(4,567	)		10,570			10,375			(24,665	)		23,715			(51,641	)
Interest expense		(7,662	)		(10,839	)		(31,280	)		(31,447	)		(2,949	)		(10,314	)		(6,092	)		(20,979	)
Other income (loss), net		398			781			45			(143,700	)		16,757			(875	)		17,794			(353	)
(Impairment) recovery of long-term investments		(1,025	)		0			(1,575	)		1,045
Equity in net income (loss) of unconsolidated investments		383			386			17,417			540
Income (loss) before income taxes		1,473			(6,490	)		(19,960	)		(162,992	)
Impairment of long-term investments														0			(550	)		0			(550	)
Equity in net (loss) income of unconsolidated investments														(86	)		16,834			(64	)		17,034
Income (loss) from continuing operations before income taxes														24,097			(19,570	)		35,353			(56,489	)
Income tax (provision) benefit		(931	)		765			(7,457	)		(640	)		(2,192	)		(2,009	)		(4,855	)		2,525
Income (loss) from continuing operations, net of tax														21,905			(21,579	)		30,498			(53,964	)
Income from discontinued operations														36			18,838			7			35,056
Gain on sale of discontinued operations														0			0			647			0
Income tax effect on discontinued operations														(15	)		(4,864	)		(169	)		(9,051	)
Income from discontinued operations, net of tax														21			13,974			485			26,005
Net income (loss)		542			(5,725	)		(27,417	)		(163,632	)	$	21,926		$	(7,605	)	$	30,983		$	(27,959	)
Net loss attributable to non-controlling interests		0			0			0			424
Net income (loss) attributable to Allscripts Healthcare Solutions, Inc. stockholders	$	542		$	(5,725	)	$	(27,417	)	$	(163,208	)
Net income (loss) attributable to Allscripts Healthcare Solutions, Inc. stockholders per share - Basic	$	0.00		$	(0.03	)	$	(0.17	)	$	(0.97	)
Net income (loss) attributable to Allscripts Healthcare Solutions, Inc. stockholders per share - Diluted	$	0.00		$	(0.03	)	$	(0.17	)	$	(0.97	)

Net income (loss) per share:
Basic
Continuing operations													$	0.16		$	(0.13	)	$	0.22		$	(0.33	)
Discontinued operations														0.00			0.08			0.00			0.16
Net income (loss) per share - Basic													$	0.16		$	(0.05	)	$	0.22		$	(0.17	)

Diluted
Continuing operations													$	0.15		$	(0.13	)	$	0.21		$	(0.33	)
Discontinued operations														0.00			0.08			0.00			0.16
Net income (loss) per share - Diluted													$	0.15		$	(0.05	)	$	0.21		$	(0.17	)

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

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2020			2019			2020			2019			2021			2020			2021			2020
Net income (loss)	$	542		$	(5,725	)	$	(27,417	)	$	(163,632	)	$	21,926		$	(7,605	)	$	30,983		$	(27,959	)
Other comprehensive income (loss):
Foreign currency translation adjustments		983			(574	)		(611	)		(35	)		421			918			520			(1,594	)
Change in fair value of derivatives qualifying as cash flow hedges		1,009			(305	)		1,620			(131	)		(828	)		1,084			(1,509	)		611
Other comprehensive income (loss) before income tax (expense) benefit		1,992			(879	)		1,009			(166	)
Income tax (expense) benefit related to items in other comprehensive income (loss)		(260	)		80			(418	)		34
Other comprehensive income (loss) before income tax benefit														(407	)		2,002			(989	)		(983	)
Income tax benefit related to items in other comprehensive income (loss)														214			(280	)		390			(158	)
Total other comprehensive income (loss)		1,732			(799	)		591			(132	)		(193	)		1,722			(599	)		(1,141	)
Comprehensive income (loss)		2,274			(6,524	)		(26,826	)		(163,764	)	$	21,733		$	(5,883	)	$	30,384		$	(29,100	)
Comprehensive loss attributable to non-controlling interests		0			0			0			424
Comprehensive income (loss), net	$	2,274		$	(6,524	)	$	(26,826	)	$	(163,340	)

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

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2020			2019			2020			2019			2021			2020			2021			2020
Number of common shares
Balance at beginning of period		274,463			272,472			272,609			270,955			275,241			273,484			274,558			272,609
Common stock issued under stock compensation plans, net of shares withheld for employee taxes		8			24			1,862			1,541			1,427			979			2,110			1,854
Balance at end of period		274,471			272,496			274,471			272,496			276,668			274,463			276,668			274,463
Common stock
Balance at beginning of period	$	2,743		$	2,724		$	2,725		$	2,709		$	2,751		$	2,733		$	2,745		$	2,725
Common stock issued under stock compensation plans, net of shares withheld for employee taxes		1			0			19			15			15			10			21			18
Balance at end of period	$	2,744		$	2,724		$	2,744		$	2,724		$	2,766		$	2,743		$	2,766		$	2,743
Number of treasury stock shares
Balance at beginning of period		(111,493	)		(105,818	)		(110,134	)		(99,731	)		(134,616	)		(111,583	)		(134,616	)		(110,134	)
Issuance of treasury stock		0			0			90			61			33			90			33			90
Purchase of treasury stock		(5,000	)		(3,459	)		(6,449	)		(9,607	)		(6,397	)		0			(6,397	)		(1,449	)
Accelerated share repurchase program														(10,677	)		0			(10,677	)		0
Balance at end of period		(116,493	)		(109,277	)		(116,493	)		(109,277	)		(151,657	)		(111,493	)		(151,657	)		(111,493	)
Treasury stock
Balance at beginning of period	$	(579,678	)	$	(524,767	)	$	(571,157	)	$	(460,543	)	$	(870,558	)	$	(580,871	)	$	(870,558	)	$	(571,157	)
Issuance of treasury stock		0			0			1,193			846			465			1,193			465			1,193
Purchase of treasury stock		(45,568	)		(37,090	)		(55,282	)		(102,160	)		(108,953	)		0			(108,953	)		(9,714	)
Accelerated share repurchase program														(195,452	)		0			(195,452	)		0
Balance at end of period	$	(625,246	)	$	(561,857	)	$	(625,246	)	$	(561,857	)	$	(1,174,498	)	$	(579,678	)	$	(1,174,498	)	$	(579,678	)
Additional paid-in capital
Balance at beginning of period	$	1,920,645		$	1,867,613		$	1,907,348		$	1,881,494		$	1,906,534		$	1,914,816		$	1,902,776		$	1,907,348
Stock-based compensation		8,811			7,773			25,931			29,296			8,383			7,166			17,084			17,120
Common stock issued under stock compensation plans, net of shares withheld for employee taxes		(60	)		9			(5,604	)		(6,702	)		(7,932	)		(2,376	)		(13,912	)		(5,544	)
Capped call transactions		0			0			797			0			0			797			0			797
Accelerated share repurchase program														(4,548	)		0			(4,548	)		0
Issuance of treasury stock		0			0			(440	)		(144	)		69			(440	)		69			(440	)
Warrants issued		0			683			1,364			2,047			1,036			682			2,073			1,364
Acquisition of non-controlling interest		0			0			0			(29,913	)
Balance at end of period	$	1,929,396		$	1,876,078		$	1,929,396		$	1,876,078		$	1,903,542		$	1,920,645		$	1,903,542		$	1,920,645
Retained earnings (accumulated deficit)
Balance at beginning of period	$	(95,248	)	$	(24,641	)	$	(49,336	)	$	132,842		$	642,175		$	(87,643	)	$	633,118		$	(49,336	)
Net income (loss) less net loss attributable to non-controlling interests		542			(5,725	)		(27,417	)		(163,208	)
Net income (loss)														21,926			(7,605	)		30,983			(27,959	)
ASU 2016-13 implementation adjustments		0			0			(17,953	)		0			0			0			0			(17,953	)
Balance at end of period	$	(94,706	)	$	(30,366	)	$	(94,706	)	$	(30,366	)	$	664,101		$	(95,248	)	$	664,101		$	(95,248	)
Accumulated other comprehensive loss
Balance at beginning of period	$	(5,533	)	$	(4,722	)	$	(4,392	)	$	(5,389	)	$	(2,244	)	$	(7,255	)	$	(1,838	)	$	(4,392	)
Foreign currency translation adjustments, net		983			(574	)		(611	)		(35	)		421			918			520			(1,594	)
Unrecognized gain (loss) on derivatives qualifying as cash flow hedges, net of tax		749			(225	)		1,202			(97	)		(614	)		804			(1,119	)		453
Balance at end of period	$	(3,801	)	$	(5,521	)	$	(3,801	)	$	(5,521	)	$	(2,437	)	$	(5,533	)	$	(2,437	)	$	(5,533	)
Non-controlling interest
Balance at beginning of period	$	0		$	0		$	0		$	29,314
Acquisition of non-controlling interest		0			0			0			(28,890	)
Net loss attributable to non-controlling interests		0			0			0			(424	)
Balance at end of period	$	0		$	0		$	0		$	0
Total Stockholders’ Equity at beginning of period	$	1,242,929		$	1,316,207		$	1,285,188		$	1,580,427		$	1,678,658		$	1,241,780		$	1,666,243		$	1,285,188
Total Stockholders’ Equity at end of period	$	1,208,387		$	1,281,058		$	1,208,387		$	1,281,058		$	1,393,474		$	1,242,929		$	1,393,474		$	1,242,929

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

	Nine Months Ended September 30,						Six Months Ended June 30,
(In thousands)	2020			2019			2021			2020
Cash flows from operating activities:
Net loss	$	(27,417	)	$	(163,632	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Net income (loss)							$	30,983		$	(27,959	)
Less: Income from discontinued operations								485			26,005
Income (loss) from continuing operations								30,498			(53,964	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization		153,682			152,250			88,713			99,305
Operating right-of-use asset amortization		16,149			16,722
Non-cash lease expense, net								(2,527	)		219
Stock-based compensation expense		25,931			29,563			17,084			17,120
Deferred taxes		2,930			(3,066	)		(100	)		3,132
Asset impairment charges		210			4,037			5,244			0
Impairment (recovery) of long-term investments		1,575			(1,045	)
Equity in net (income) loss of unconsolidated investments		(17,417	)		(540	)
Other (income) loss, net		(789	)		2,796
Impairment of long-term investments								0			550
Equity in net loss (income) of unconsolidated investments								64			(17,034	)
Other income, net								(7,617	)		(2,696	)
Changes in operating assets and liabilities (net of businesses acquired):
Accounts receivable and contract assets, net		64,237			53,886			34,175			46,795
Prepaid expenses and other assets		4,289			615			(12,317	)		(15,069	)
Accounts payable		(49,611	)		27,571			(8,802	)		(27,064	)
Accrued expenses		(3,564	)		450			18,393			1,987
Accrued compensation and benefits		30,664			(43,426	)		(24,613	)		13,889
Deferred revenue		(26,820	)		(138,639	)		(16,328	)		(15,496	)
Other liabilities		1,710			(701	)		3,288			1,615
Operating leases		(15,109	)		(17,897	)
Accrued DOJ settlement		(88,745	)		145,000			0			(73,020	)
Net cash provided by operating activities - continuing operations		71,905			63,944
Net cash used in operating activities - discontinued operations		0			(30,000	)
Net cash provided by operating activities		71,905			33,944
Net cash provided by (used in) operating activities - continuing operations								125,155			(19,731	)
Net cash (used in) provided by operating activities - discontinued operations								(321,517	)		38,669
Net cash (used in) provided by operating activities								(196,362	)		18,938
Cash flows from investing activities:
Capital expenditures		(7,896	)		(13,475	)		(3,094	)		(4,778	)
Capitalized software		(78,032	)		(86,190	)		(35,472	)		(50,912	)
Cash paid for business acquisitions, net of cash acquired		0			(23,443	)
Sales (purchases) of equity securities, other investments and related intangible assets, net		20,996			(7,191	)
Other proceeds from investing activities		0			14
Cash received from sale of businesses, net of cash divested								952			0
Purchases of equity securities, other investments and related intangible assets, net								(221	)		(3,823	)
Sale of other investments								1,919			23,254
Distributions received from investments								1,371			0
Net cash used in investing activities - continuing operations								(34,545	)		(36,259	)
Net cash used in investing activities - discontinued operations								0			(4,447	)
Net cash used in investing activities		(64,932	)		(130,285	)		(34,545	)		(40,706	)
Cash flows from financing activities:
Taxes paid related to net share settlement of equity awards		(5,589	)		(6,762	)		(13,887	)		(5,533	)
Payments for issuance costs on 0.875% Convertible Senior Notes								0			(758	)
Repayment of Convertible Senior Notes		(352,361	)		0			0			(7,361	)
Payments for issuance costs on 0.875% Convertible Senior Notes		(758	)		0
Credit facility payments		(175,000	)		(15,000	)		0			(167,500	)
Credit facility borrowings, net of issuance costs		673,625			249,241			250,000			285,000
Repurchase of common stock		(55,282	)		(102,160	)		(108,953	)		(9,714	)
Repurchase of unsettled common stock		0			(9,301	)
Accelerated share repurchase program								(200,000	)		0
Payment of acquisition and other financing obligations		(4,369	)		(11,581	)		(2,400	)		(4,369	)
Purchases of subsidiary shares owned by non-controlling interest		0			(54,064	)
Net cash provided by financing activities		80,266			50,373
Net cash (used in) provided by financing activities								(75,240	)		89,765
Effect of exchange rate changes on cash and cash equivalents		132			(103	)		65			(338	)
Net increase (decrease) in cash and cash equivalents		87,371			(46,071	)
Net (decrease) increase in cash and cash equivalents								(306,082	)		67,659
Cash, cash equivalents and restricted cash, beginning of period		137,539			184,795			537,465			137,539
Cash, cash equivalents and restricted cash, end of period		224,910			138,724		$	231,383		$	205,198

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~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~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~~six months ended ~~September~~June 30, ~~2020~~2021 are not necessarily indicative of the results to be expected for the full year ending December 31, ~~2020.~~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. The Company believes that the disclosures made are adequate to make 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, ~~2019~~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 first quarter of 2020, we changed our reportable segments from Provider, Veradigm and Unallocated to Core Clinical and Financial Solutions, Data, Analytics and Care Coordination, and Unallocated. The business units reported within the historical segments have been reallocated into the new segments. Refer to Note 15 “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.

~~We adopted Accounting Standards Update No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”) on January 1, 2020 using the cumulative-effect adjustment transition method. The guidance~~There have been no changes to our significant accounting policies from those disclosed in ASU 2016-13 replaces the incurred loss impairment methodology under current GAAP. The new impairment model requires immediate recognition of estimated credit losses expected to occur for most financial assets and certain other instruments. For available-for-sale debt securities with unrealized losses, the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Refer to Note 2 “Revenue from Contracts with Customers” and Note 3 “Accounts Receivable” for further discussion on the impact of adoption.our Form 10-K.

In ~~August 2018,~~December 2019, the Financial Accounting Standards Board (“FASB”) ~~issued Accounting Standards Update No. 2018-13,~~ ~~“Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement”~~ (“ASU 2018-13”), which eliminates, adds and modifies certain disclosure requirements for fair value measurements. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted-average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU 2018-13 will be effective for all entities for interim and annual periods beginning after December 15, 2019, with early adoption permitted. We adopted ASU 2018-13 on January 1, 2020, and the adoption had no impact on our consolidated financial statements.

~~In March 2020, the FASB issued Accounting Standards Update No. 2020-04,~~ ~~“Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting”~~ (“ASU 2020-04”), which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 will be effective for all entities as of March 12, 2020 through December 31, 2022. We adopted ASU 2020-04 on March 12, 2020, and the adoption had no impact on our consolidated financial statements.

~~In December 2019, the FASB~~ issued Accounting Standards Update No. 2019-12, “Income Taxes (Topic 740)” (“ASU 2019-12”), which is part of the FASB’s overall simplification initiative to reduce the costs and complexity of 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 interim periods, franchise taxes, step-up in tax basis of goodwill, separate entity financial statements and interim recognition of tax laws or rate changes. ASU 2019-12 is effective for public business entities for annual reporting periods beginning after December 15, ~~2020, with early~~2020. We adopted ASU 2019-12 on January 1, 2021, and the adoption ~~permitted. The adoption of this guidance is~~did not ~~expected to~~ have a significant impact on our consolidated financial statements.

In August 2020, the FASB issued Accounting Standards Update No. 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). The amendments in ASU 2020-06 simplify the accounting 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 qualify for the derivative scope exceptions and also simplifies the diluted earnings per share calculation in certain areas. The 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, 2021. ~~Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and adoption must be as of the beginning of the fiscal year.~~ We are currently evaluating the impact of this accounting guidance.

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

Our 2 primary revenue streams are (i) software delivery, support and maintenance and (ii) client services. Software delivery, support and maintenance revenue consists of all of our proprietary software sales (either under a perpetual or term license delivery model), subscription-based software sales, transaction-related revenue, the resale of 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 organization’s IT operations using our employees.

At ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, we had capitalized costs to obtain or fulfill a contract of ~~$18.8~~$15.5 million and ~~$20.8~~$16.8 million, respectively, in Prepaid and other current assets and ~~$32.8~~$27.2 million and ~~$32.9~~$27.9 million, respectively, in Other assets. During the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, we recognized ~~$6.8~~$4.9 million and ~~$7.5~~$5.8 million, respectively, of amortization expense related to such capitalized costs. During the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, we recognized ~~$20.9~~$10.7 million and ~~$22.5~~$12.5 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.

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:

(In thousands)	Three Months Ended March 31, 2020		Three Months Ended June 30, 2020		Three Months Ended September 30, 2020		Three Months Ended March 31, 2021		Three Months Ended June 30, 2021
Revenue related to deferred revenue balance at beginning of period	$	140,132	$	155,616	$	154,000	$	137,848	$	151,857
Revenue related to new performance obligations satisfied during the period		216,990		196,110		193,370		173,316		158,910
Revenue recognized under "right-to-invoice" expedient		58,059		54,082		54,313		56,811		62,422
Reimbursed travel expenses, shipping and other revenue		1,532		415		347		377		525
Total revenue	$	416,713	$	406,223	$	402,030	$	368,352	$	373,714

(In thousands)	Three Months Ended March 31, 2019		Three Months Ended June 30, 2019		Three Months Ended September 30, 2019		Three Months Ended March 31, 2020		Three Months Ended June 30, 2020
Revenue related to deferred revenue balance at beginning of period	$	126,184	$	146,150	$	151,543	$	105,366	$	119,545
Revenue related to new performance obligations satisfied during the period		248,221		233,696		228,927		216,580		195,308
Revenue recognized under "right-to-invoice" expedient		55,923		62,245		61,814		58,059		54,082
Reimbursed travel expenses, shipping and other revenue		1,721		2,369		1,900		1,359		369
Total revenue	$	432,049	$	444,460	$	444,184	$	381,364	$	369,304

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 ~~$4.4~~$3.9 billion as of ~~September~~June 30, ~~2020,~~2021, of which we expect to recognize approximately ~~27%~~33% over the next 12 months, and the remaining ~~73%~~67% 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:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019		2021		2020		2021		2020
Revenue:
Recurring revenue	$	333,900	$	349,455	$	1,010,207	$	1,048,204	$	303,644	$	303,196	$	599,292	$	613,177
Non-recurring revenue		68,130		94,729		214,759		272,489		70,070		66,108		142,774		137,491
Total revenue	$	402,030	$	444,184	$	1,224,966	$	1,320,693	$	373,714	$	369,304	$	742,066	$	750,668

	Three Months Ended September 30, 2019								Three Months Ended June 30, 2021
(In thousands)	Core Clinical and Financial Solutions		Data, Analytics and Care Coordination		Unallocated Amounts		Total		Core Clinical and Financial Solutions		Data, Analytics and Care Coordination		Unallocated Amounts			Total
Software delivery, support and maintenance	$	191,280	$	85,603	$	7,490	$	284,373	$	158,754	$	65,150	$	(4,294	)	$	219,610
Client services		151,736		5,692		2,383		159,811		151,394		2,710		0			154,104
Total revenue	$	343,016	$	91,295	$	9,873	$	444,184	$	310,148	$	67,860	$	(4,294	)	$	373,714

	Nine Months Ended September 30, 2020								Three Months Ended June 30, 2020
(In thousands)	Core Clinical and Financial Solutions		Data, Analytics and Care Coordination		Unallocated Amounts		Total		Core Clinical and Financial Solutions		Data, Analytics and Care Coordination		Unallocated Amounts			Total
Software delivery, support and maintenance	$	502,159	$	251,027	$	16,994	$	770,180	$	167,220	$	58,664	$	(2,293	)	$	223,591
Client services		435,723		11,326		7,737		454,786		143,879		1,834		0			145,713
Total revenue	$	937,882	$	262,353	$	24,731	$	1,224,966	$	311,099	$	60,498	$	(2,293	)	$	369,304

	Nine Months Ended September 30, 2019								Six Months Ended June 30, 2021
(In thousands)	Core Clinical and Financial Solutions		Data, Analytics and Care Coordination		Unallocated Amounts		Total		Core Clinical and Financial Solutions		Data, Analytics and Care Coordination		Unallocated Amounts			Total
Software delivery, support and maintenance	$	574,715	$	250,059	$	20,134	$	844,908	$	323,964	$	127,009	$	(8,672	)	$	442,301
Client services		456,495		11,627		7,663		475,785		295,349		4,416		0			299,765
Total revenue	$	1,031,210	$	261,686	$	27,797	$	1,320,693	$	619,313	$	131,425	$	(8,672	)	$	742,066

We adopted ASU 2016-13 on January 1, 2020 using the cumulative-effect adjustment transition method. The ~~new~~ guidance required the recognition of lifetime estimated credit losses expected to occur for contract ~~assets.~~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 ~~their~~an internal credit assessment and business size. The pools ~~are~~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~~six months ended ~~September~~June 30, ~~2020,~~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~~June 30, ~~2020~~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.

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

We adopted ASU 2016-13 on January 1, 2020 using the cumulative-effect adjustment transition method. The ~~new~~ guidance required the recognition of lifetime estimated credit losses expected to occur for trade accounts ~~receivable. The guidance also required that we pool assets with similar risk characteristics and consider current economic conditions when estimating losses. The adoption~~receivable, which resulted in the recording of ~~ASU 2016-13 for trade accounts receivable was recorded as~~ a debit to retained earnings of $12.6 million as of January 1, ~~2020~~2020. Refer to Note 2, “Revenue from Contracts with Customers” for additional information regarding the adoption of ASU 2016-13.

At adoption, we segmented the accounts receivable population into pools based on their risk assessment. Risks related to trade accounts receivable are a customer’s inability to pay or bankruptcy. Each pool was defined by their internal credit assessment, and business size. The pools are aligned with management’s review of financial performance. For the nine months ended September 30, 2020, 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 twelve-month lookback period of credit memos and adjustments divided by the average accounts receivable 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.

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

(In thousands)	Total			Total
Balance at January 1, 2020	$	36,490
Balance at December 31, 2020				$	31,596
Current period provision		9,164			1,655
Write-offs		(8,286	)		(1,721	)
Recoveries		73			461
Less: Reclassified allowance against receivables held for sale ⁽¹⁾		(416	)
Balance at September 30, 2020	$	37,025
Balance at June 30, 2021				$	31,991

⁽¹⁾During the three months ended September 30, 2020, a portion of accounts receivable and the allowance thereon were reclassified to current assets held for sale in the accompanying consolidated balance sheets due to the Company’s entry into an asset purchase agreement with Strata Decision Technology LLC, to sell the EPSi^TM ~~business. Refer to Note 5 “Business Combinations” for further discussion about the pending sale of the EPSi~~^TM ~~business.~~

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 ~~all~~ 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 87 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:

(In thousands)	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Operating lease cost ⁽¹⁾	$	6,430		$	7,113		$	19,791		$	20,881		$	5,636		$	6,261		$	11,697		$	13,014
Less: Sublease income		(257	)		(824	)		(1,026	)		(2,404	)		(74	)		(166	)		(157	)		(769	)
Total operating lease costs	$	6,173		$	6,289		$	18,765		$	18,477		$	5,562		$	6,095		$	11,540		$	12,245

(In thousands)	Nine Months Ended September 30,				Six Months Ended June 30,
	2020		2019		2021		2020
Operating cash flows from operating leases	$	21,082	$	22,211	$	10,083	$	13,953
Right-of-use assets obtained in exchange for operating lease obligations	$	23,355	$	144,080	$	0	$	21,963

(In thousands, except lease term and discount rate)	September 30, 2020			December 31, 2019			June 30, 2021			December 31, 2020
Right-of-use assets - operating leases	$	102,217		$	98,020		$	75,052		$	96,601
Current operating lease liabilities	$	22,317		$	23,137		$	19,662		$	22,264
Long-term operating lease liabilities	$	98,866		$	95,162		$	71,597		$	93,463
Weighted average remaining lease term (in years)		6			6			5			6
Weighted average discount rate		3.6	%		4.4	%		3.3	%		3.6	%

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~~June 30, ~~2020.~~2021.

	September 30, 2020			June 30, 2021
(In thousands)	Operating Leases			Operating Leases
Remainder of 2020	$	6,593
2021		26,763
Remainder of 2021				$	11,590
2022		25,068			21,348
2023		22,856			19,547
2024		17,267			14,114
2025					12,764
Thereafter		36,667			20,104
Total lease liabilities		135,214			99,467
Less: Amount representing interest		(13,059	)		(8,208	)
Less: Reclassified lease liabilities held for sale ⁽¹⁾		(972	)
Less: Short-term lease liabilities		(22,317	)		(19,662	)
Total long-term lease liabilities	$	98,866		$	71,597

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 Data, Analytics and Care Coordination business segment.

On ~~June 10, 2019,~~December 31, 2020, we ~~acquired~~completed the sale of substantially all of the assets of our CarePort business to a ~~business engaged~~subsidiary of WellSky Corp., a Delaware corporation (“WellSky”), pursuant to a purchase agreement (the “CarePort Purchase Agreement”). The total consideration for CarePort was $1.35 billion, which was subject to certain adjustments for liabilities assumed by WellSky and net working capital as described in the ~~development, implementation, customization, marketing, licensing and~~CarePort Purchase Agreement. We realized a pre-tax gain upon the sale of a specialty prescription drug platform, including software that collects, saves and transmits information required to fill a prescription. The drug platform and software enables healthcare providers, pharmacists and payors to digitally interact with one another to fill a prescription. The business is$933.9 million, which was included in the Gain on sale of discontinued operations line in our ~~Data, Analytics and Care Coordination business segment.~~consolidated statements of operations for the year ended December 31, 2020. For the six months ended June 30, 2021, we recorded a $0.6 million gain that primarily related to net working capital adjustments in the 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 ~~March 1, 2019,~~October 15, 2020, we ~~acquired~~completed the sale of substantially all of the ~~outstanding minority interests in Pulse8, Inc., a healthcare analytics and technology company that provides~~assets of our EPSi^TM business ~~intelligence software solutions for health plans and at-risk providers~~(“EPSi”) to enable them to analyze their risk adjustment and quality management programs, for $53.8 million (subject to adjustments for net working capital and a contingency holdback). We initially acquired a controlling stake in Pulse 8, Inc. on September 8, 2016. This transaction was treated as an equity transaction, and the cash payment is reported as part of cash flow from financing activities in the consolidated statement of cash flows for the nine months ended September 30, 2019.

~~On July 30, 2020, we signed an asset purchase agreement with~~ Strata Decision Technology LLC, an Illinois limited liability company (“Strata”), and Roper Technologies, Inc., a Delaware corporation, pursuant to a purchase agreement (the “EPSi Purchase Agreement”)~~, pursuant to which Stratahasagreed~~ ~~to purchase~~ ~~substantially all of~~ ~~the~~ ~~assets of our~~. The total consideration for EPSi^TM ~~business for~~ was $365.0 million, which was subject to ~~adjustment upon the terms~~certain adjustments for liabilities assumed by Strata and ~~conditions set forth~~net working capital as described in the EPSi Purchase Agreement. ~~The transactions contemplated by the EPSi Purchase Agreement are subject to customary closing conditions, including theapplicablewaitingperiod(andanyextensionsthereof)undertheHart-Scott-RodinoAntitrust~~ ~~ImprovementsAct~~ ~~havingexpired~~or~~otherwise~~ ~~havingbeenterminated.~~ As of September 30, 2020, the assets and liabilities related to the EPSi Purchase Agreement were classified as held-for-sale on our consolidated balance sheet. The held-for-sale assets and liabilities are classified as current since we expect to completeWe realized a pre-tax gain upon the sale of $222.6 million, which was included in the ~~disposal group within~~Gain on sale of discontinued operations line in our consolidated statements of operations for the ~~next 12 months.~~year ended December 31, 2020. The ~~business classified~~divestiture was treated as ~~held-for-sale was classified in continuing operations~~a discontinued operation as ~~the disposition does not represent a strategic shift that will have a major effect on our operations and financial results.~~of December 31, 2020. Refer to Note 15, “Discontinued Operations” for additional information. On October ~~15,~~29, 2020, we ~~completed~~repaid $19.0 million of the Term Loan (as defined below) as a result of the sale, ofwhich was a mandatory prepayment in accordance with the ~~EPSi~~^TM ~~business, which is further discussed in Note 17 “Subsequent Events”.~~

~~The following table provides the components of those assets and liabilities related to the EPSi Purchase~~Second Amended Credit Agreement ~~which are classified as held-for-sale as of September 30, 2020:~~

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2: Quoted prices for similar instruments in active markets with inputs that are observable, 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.

Level 3: Unobservable inputs 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 ~~instruments include~~instrument includes the fair value of contingent consideration related to a completed ~~acquisitions.~~acquisition. The fair ~~values are~~value is based on a discounted cash flow ~~analyses~~analysis reflecting the likelihood of achieving specified performance measures or events and captures the contractual nature of the contingencies, commercial risk, or time value of money. Level 3 instruments also included the 1.25% Call Option asset and the 1.25% embedded cash conversion option liability that are not actively traded. The changes in unobservable inputs to the valuation pricing model used to value these instruments is not material to our consolidated results of operations. On July 1, 2020, these instruments matured and were repaid in full.

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, 2020								December 31, 2019								Balance Sheet	June 30, 2021								December 31, 2020
(In thousands)	Classifications	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total		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	$	1,620	$	0	$	1,620	$	0	$	0	$	0	$	0	Prepaid expenses and other current assets	$	0	$	0	$	0	$	0	$	0	$	1,509	$	0	$	1,509
1.25% Call Option	Other assets		0		0		0		0		0		0		84		84
Total assets		$	0	$	1,620	$	0	$	1,620	$	0	$	0	$	84	$	84		$	0	$	0	$	0	$	0	$	0	$	1,509	$	0	$	1,509

Contingent consideration - current	Accrued expenses	$	0	$	0	$	16,115	$	16,115	$	0	$	0	$	17,116	$	17,116	Accrued expenses	$	0	$	0	$	153	$	153	$	0	$	0	$	1,011	$	1,011
Contingent consideration - long-term	Other liabilities		0		0		0		0		0		0		2,415		2,415
1.25% Embedded cash conversion option	Other liabilities		0		0		0		0		0		0		185		185
Total liabilities		$	0	$	0	$	16,115	$	16,115	$	0	$	0	$	19,716	$	19,716		$	0	$	0	$	153	$	153	$	0	$	0	$	1,011	$	1,011

The changes in our Level 3 ~~assets and liabilities~~liability measured at fair value on a recurring basis at ~~September~~June 30, ~~2020 are~~2021 is summarized as follows:

The following table summarizes the quantitative information about our Level 3 fair value measurements at ~~September~~June 30, ~~2020:~~

September 30, 2020

June 30, 2021

(In thousands, except the discount rate)

Fair Value

Valuation Technique

Significant Unobservable Inputs

Ranges of Inputs

Weighted Average ⁽¹⁾

Fair Value

Valuation Technique

Significant Unobservable Inputs

Ranges of Inputs

Weighted Average ⁽¹⁾

Financial instruments:

Contingent consideration

16,115

Probability Weighted Discounted cash flow

Discount rate

4% to 5%

153

Probability Weighted Discounted cash flow

Discount rate

5.3% to 5.5%

5.4

Revenue

$0 to $62,500

31,250

Registry members

0 to 1,551

776

Registry members

0 to 1,551

776

Patient data volume

0 to 52,845

26,422

Patient data volume

0 to 52,845

26,422

Projected year of payment

2021

Projected year of payment

2020 to 2021

Total financial instruments

16,115

153

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

	Number of Investees		Original		Carrying Value at				Number of Investees		Original		Carrying Value at
(In thousands, except for number of investees)	at September 30, 2020		Cost		September 30, 2020		December 31, 2019		at June 30, 2021		Cost		June 30, 2021		December 31, 2020
Equity method investments ⁽¹⁾		3	$	7,099	$	11,051	$	11,332		3	$	7,099	$	10,438	$	10,744
Cost less impairment		8		37,568		24,995		32,462		8		37,568		37,976		25,059
Total long-term equity investments		11	$	44,667	$	36,046	$	43,794		11	$	44,667	$	48,414	$	35,803

16During the three and six months ended June 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 three and six months ended June 30, 2021.

During the ~~nine~~six months ended ~~September~~June 30, 2020, we recorded a $16.8 million gain from the sale of a third-party equity method ~~investment, which occurred in the second quarter of 2020.~~investment.

As of ~~September~~June 30, ~~2020,~~2021, it is not 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, the issuer’s subsequent or planned raises of capital and observable price changes in orderly transactions.

~~During the three and nine months ended September 30, 2020, we recorded non-cash impairment charges of $1.0 million and $1.6 million, respectively, related to our long-term investments.~~ 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. Based on our ~~review in the third quarter of 2020,~~assessment, we determined ~~to recognize an~~0 impairment ~~charge related to one of our cost-method investments, which equaled~~charges were necessary for the cost basis of our initial investment. In the second quarter of 2020, we reached a settlement agreement with one of our third-party equity-method investments, which resulted in the recognition of a $0.6 million impairment charge. During the ninesix months ended ~~September~~June 30, 2019, we recovered $1.0 million from a third-party cost-method investment that we had previously impaired. The impairment charges and the amount recovered are recognized in the (Impairment) recovery of long-term investments in the consolidated statements of operations.2021.

Our long-term financial liabilities include amounts outstanding under our senior secured credit facility (as described in Note 10, “Debt”), with carrying values that approximate fair value since the interest rates approximate current market rates. As of December 31, 2019, the carrying amount of our 1.25% Cash Convertible Senior Notes (the “1.25% Notes”) approximated fair value since the effective interest rate on the 1.25% Notes approximated current market rates. On July 1, 2020, the 1.25% Notes matured and were paid in full. Refer to Note 10, “Debt,” for further information regarding our long-term financial liabilities.

Stock-based compensation expense recognized during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~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. NaN stock-based compensation costs were capitalized during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020.

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019		2021		2020		2021		2020
Cost of revenue:
Software delivery, support and maintenance	$	295	$	395	$	1,213	$	1,522	$	311	$	343	$	807	$	918
Client services		1,519		765		3,418		3,021		967		808		2,346		1,899
Total cost of revenue		1,814		1,160		4,631		4,543		1,278		1,151		3,153		2,817
Selling, general and administrative expenses		6,728		5,643		18,851		20,799		7,551		5,081		15,594		12,123
Research and development		2,127		1,677		5,950		7,125		1,554		1,428		3,467		3,823
Total stock-based compensation expense	$	10,669	$	8,480	$	29,432	$	32,467	$	10,383	$	7,660	$	22,214	$	18,763

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. NaN stock options were granted during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020.

	Three Months Ended September 30, 2020				Nine Months Ended September 30, 2020				Three Months Ended June 30, 2021				Six Months Ended June 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		90	$	8.90		4,508	$	6.44		1,963	$	15.41		2,445	$	15.36
Performance-based restricted stock units with a service condition		504	$	7.19		504	$	7.19		0	$	0.00		235	$	15.16
Market-based restricted stock units with a service condition		0	$	0.00		595	$	9.98		0	$	0.00		235	$	17.19
		594	$	7.45		5,607	$	6.88		1,963	$	15.41		2,915	$	15.49

During the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and the year ended December 31, ~~2019, 1.9~~2020, 2.1 million and ~~1.7~~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~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~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~~six months ended ~~September~~June 30, 2021 and 2020 ~~and 2019~~ were ~~770~~895 thousand and ~~658~~764 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 ~~August 2, 2018,~~November 18, 2020, we announced that our Board ~~of Directors~~ approved a stock purchase program (the ~~“2018~~“2020 Program”) under which we may repurchase up to ~~$250~~$300 million of our common stock through December 31, ~~2020. We~~2021. The 2020 Program replaced a previous program. During the three and six months ended June 30, 2021, we repurchased ~~5.0~~5.6 million shares of our common stock under the ~~2018 Program for a total~~2020 Program. This is inclusive of ~~$45.6 million during~~ the ~~three~~shares we received at final settlement of the accelerated share repurchase program we entered into on November 30, 2020, described below. During the six months ended ~~September~~June 30, ~~2020. We~~2020, we repurchased ~~6.5~~1.5 million shares of our common stock under the ~~2018 Program~~previous program for a total of ~~$55.3 million~~$9.7 million. We repurchased 0 shares during the ~~nine~~three months ended ~~September~~June 30, 2020.

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 ~~approximate dollar value of shares that may yet be purchased under~~2021 Program replaced the ~~2018~~2020 Program ~~is $46.6 million as of September~~and does not have a termination date. During the three months ended June 30, ~~2020. We~~2021, we repurchased ~~3.5~~11.5 million shares of our common stock under the ~~2018 Program~~2021 Program. This is inclusive of the shares we received at initial 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, “ASR Counterparties”), to purchase shares of our common stock for a total payment of ~~$37.1~~$200.0 million ~~during~~(the “Prepayment Amount”). Under the ~~three months ended September~~terms of the ASR Agreements, on November 30, ~~2019. We repurchased 9.6~~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 ~~2018 Program for a total~~ASR Agreements if the final purchase price per share equaled the closing price of ~~$102.2 million during the nine months ended September~~our common stock on November 30, ~~2019. We did initiate share transactions to purchase an additional 0.9 million~~2020. These repurchased shares ~~for $9.3 million under the 2018 Program for the three months ended September 30, 2019, but the transactions were not settled until October 2019. The~~became treasury shares ~~settled in October 2019 were outstanding as of September 30, 2019,~~ and ~~therefore~~ were recorded as a ~~financing transaction as “Repurchase~~$165.7 million reduction to stockholders’ equity. The remaining $34.3 million of ~~unsettled common stock” within~~ the ~~consolidated statements of cash flows and~~Prepayment Amount was recorded as ~~“Other assets” within~~a reduction to stockholders’ equity as an unsettled forward contract indexed to our common stock. The total number of shares received under the ~~consolidated balance sheets.~~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 for the repurchase period.

On June 14, 2021, we entered into Supplemental Confirmations (each, a “June 2021 Supplemental Confirmation”) to the Master Confirmations dated November 30, 2020 (each, as supplemented by the corresponding June 2021 Supplemental Confirmation, a “June 2021 ASR Agreement”), with each of 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. These repurchased shares became treasury shares and were recorded as a $161.2 million reduction to stockholders’ equity. The remaining $38.8 million of the June 2021 Prepayment Amount was recorded as a reduction to stockholders’ equity as an unsettled forward contract indexed to our common stock. We excluded the potential share impact of any remaining shares subject to repurchase from the computation of diluted earnings per share as these shares would be anti-dilutive as of June 30, 2021. The approximate dollar value of shares of our common stock that may yet be purchased under the 2021 Program following the June 2021 ASR Agreements was $108.4 million as of June 30, 2021.

At final settlement, depending on the final purchase price per share, the ASR Counterparties may be required to deliver additional shares of our common stock to the Company, or, under certain circumstances, we may be required to make a cash payment to each ASR Counterparty or may elect to deliver the equivalent value in shares of our common stock. The final purchase price per share under each June 2021 ASR Agreement will generally be based on the average of daily volume weighted average prices of shares of our common stock during a term set forth in the June 2021 ASR Agreements. The June 2021 ASR Agreements contain provisions customary for agreements of this type, including provisions for adjustments to the transaction terms, the circumstances generally under which the June 2021 ASR Agreements may be accelerated, extended or terminated early by the ASR Counterparties and various acknowledgments, representations and warranties made by the parties to one another. Final settlement of the June 2021 ASR Agreements is expected to be completed during the fourth quarter of 2021, although the settlement may be accelerated at the ASR Counterparties’ option.

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.

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 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)

2020

2019

2020

2019

Basic earnings (loss) per Common Share:

Net income (loss)

$
542

$
(5,725
)

$
(27,417
)

$
(163,632
)
Net loss attributable to non-controlling interests

0

0

0

424

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

$
542

$
(5,725
)

$
(27,417
)

$
(163,208
)

Weighted-average common shares outstanding

161,144

166,391

162,092

167,610

Net loss attributable to Allscripts Healthcare
   Solutions, Inc. stockholders per Common Share

$
0.00

$
(0.03
)

$
(0.17
)

$
(0.97
)

Diluted earnings (loss) per Common Share:

Net income (loss)

$
542

$
(5,725
)

$
(27,417
)

$
(163,632
)
Net loss attributable to non-controlling interests

0

0

0

424

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

$
542

$
(5,725
)

$
(27,417
)

$
(163,208
)

Weighted-average common shares outstanding

161,144

166,391

162,092

167,610

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

2,168

0

0

0

Weighted-average common shares outstanding assuming
   dilution

163,312

166,391

162,092

167,610

Net income (loss) attributable to Allscripts Healthcare
   Solutions, Inc. stockholders per Common Share

$
0.00

$
(0.03
)

$
(0.17
)

$
(0.97
)

	Three Months Ended June 30,					Six Months Ended June 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	$	21,905	$	(21,579	)	$	30,498	$	(53,964	)
Income from discontinued operations, net of tax		21		13,974			485		26,005
Net income (loss)	$	21,926	$	(7,605	)	$	30,983	$	(27,959	)

Weighted-average common shares outstanding		136,647		162,682			138,409		162,571

Basic earnings (loss) from continuing operations per Common Share	$	0.16	$	(0.13	)	$	0.22	$	(0.33	)
Basic earnings from discontinued operations per Common Share		0.00		0.08			0.00		0.16
Net earnings (loss) per Common Share	$	0.16	$	(0.05	)	$	0.22	$	(0.17	)

Diluted earnings (loss) per Common Share:
Income (loss) from continuing operations, net of tax	$	21,905	$	(21,579	)	$	30,498	$	(53,964	)
Income from discontinued operations, net of tax		21		13,974			485		26,005
Net income (loss)	$	21,926	$	(7,605	)	$	30,983	$	(27,959	)

Weighted-average common shares outstanding		136,647		162,682			138,409		162,571
Plus: Dilutive effect of restricted stock unit awards and warrants		8,624		0			8,839		0
Weighted-average common shares outstanding assuming dilution		145,271		162,682			147,248		162,571

Diluted earnings (loss) from continuing operations per Common Share	$	0.15	$	(0.13	)	$	0.21	$	(0.33	)
Diluted earnings from discontinued operations per Common Share		0.00		0.08			0.00		0.16
Net earnings (loss) per Common Share	$	0.15	$	(0.05	)	$	0.21	$	(0.17	)

Due to the net loss ~~attributable to Allscripts Healthcare Solutions, Inc. stockholders~~ for ~~the nine months ended September 30, 2020 and~~ the three and ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we used basic weighted-average common shares outstanding in the calculation of diluted loss per share, ~~for those periods,~~ 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 June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019		2021		2020		2021		2020
Shares subject to anti-dilutive stock options, restricted stock unit awards and warrants excluded from calculation		47,162		27,969		48,816		27,350
Shares subject to anti-dilutive restricted stock unit awards and warrants excluded from calculation										1,502		50,988		1,501		49,304

	September 30, 2020							December 31, 2019							June 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	$	546,289	$	(463,298	)	$	82,991	$	546,373	$	(437,640	)	$	108,733	$	535,156	$	(479,059	)	$	56,097	$	535,092	$	(465,292	)	$	69,800
Customer contracts and relationships		701,976		(507,956	)		194,020		702,034		(488,625	)		213,409		674,347		(521,186	)		153,161		674,336		(509,534	)		164,802
Total	$	1,248,265	$	(971,254	)	$	277,011	$	1,248,407	$	(926,265	)	$	322,142	$	1,209,503	$	(1,000,245	)	$	209,258	$	1,209,428	$	(974,826	)	$	234,602

Intangibles not subject to amortization:
Registered trademarks						$	52,000						$	52,000						$	52,000						$	52,000
Goodwill							1,287,197							1,362,017							974,834							974,729
Total						$	1,339,197						$	1,414,017						$	1,026,834						$	1,026,729

Changes in the carrying amounts of goodwill by reportable segment for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 were as follows:

There ~~are $39.2 million in~~were 0 accumulated impairment losses associated with ~~our~~ goodwill as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019.~~

	September 30, 2020							December 31, 2019						June 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		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	$	(1,712	)	$	169,565	$	177,942	$	4,697	$	173,245	$	167,853	$	(6,099	)	$	173,952	$	167,853	$	(3,166	)	$	171,019
1.25% Cash Convertible Senior Notes		0		0			0		345,000		7,552		337,448
Senior Secured Credit Facility		910,000		5,224			904,776		410,000		5,224		404,776		250,000		2,640			247,360		0		3,432			(3,432	)
Total debt	$	1,077,853	$	3,512		$	1,074,341	$	932,942	$	17,473	$	915,469	$	417,853	$	(3,459	)	$	421,312	$	167,853	$	266		$	167,587
Less: Debt payable within one year		49,000		707			48,293		364,653		188		364,465
Total long-term debt, less current maturities	$	1,028,853	$	2,805		$	1,026,048	$	568,289	$	17,285	$	551,004

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, consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019		2021		2020		2021		2020
Coupon interest	$	451	$	1,078	$	3,561	$	3,234	$	455	$	1,555	$	910	$	3,110
Amortization of discounts and debt issuance costs		1,454		3,685		12,030		10,876		1,474		5,288		2,933		10,576
Total interest expense related to the convertible notes	$	1,905	$	4,763	$	15,591	$	14,110	$	1,929	$	6,843	$	3,843	$	13,686

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 iswas 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~~June 30, ~~2020, $310.0 million under the Term Loan, $600.0~~2021, $250.0 million under the Revolving Facility and ~~$1.1~~$1.0 million in letters of credit were outstanding under the Second Amended Credit Agreement.

As of ~~September~~June 30, ~~2020,~~2021, the interest rate on the borrowings under the Second Amended Credit Agreement was LIBOR plus ~~2.00%~~1.50%, which totaled ~~2.15%~~1.60%. We were in compliance with all covenants under the Second Amended Credit Agreement as of ~~September~~June 30, ~~2020.~~2021.

In connection with the sale of our EPSi^TMbusiness on October 15, 2020, which is further discussed in Note ~~17, “Subsequent Events”~~5, “Business Combinations and Divestitures”, the terms of our Second Amended ~~and Restated~~ 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 ~~therefore included~~further discussed in ~~current maturities~~Note 5, “Business Combinations and Divestitures”, the terms of ~~long-term debt at September 30,~~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. ~~In connection with this amendment, we incurred fees and other costs totaling $0.8 million, of which a majority was capitalized.~~

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~~June 30, ~~2020,~~2021, we had ~~$298.9~~$649.0 million available borrowing capacity, net of outstanding letters of credit, under ~~our~~the Revolving Facility. There can be no assurance that we will be able to draw on the full available balance of ~~our~~the Revolving Facility if the financial institutions that have extended such credit commitments become unwilling or unable to fund such 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~~June 30, ~~2020~~2021 totaled $207.9 million. The carrying value of the combined equity component, net of capped call fees, issuance costs and accretion, at ~~September~~June 30, ~~2020~~2021 totaled ~~$17.4~~$13.6 million.

~~On July 1, 2020, the 1.25% Cash Convertible Senior Notes matured and were repaid utilizing $345.0 million drawn against the Revolving Facility.~~

The following table summarizes future debt payment obligations as of ~~September~~June 30, ~~2020:~~2021:


(In thousands)	Total		Remainder of 2020		2021		2022		2023		2024		Thereafter		Total		Remainder of 2021		2022		2023		2024		2025		Thereafter
0.875% Convertible Senior Notes ⁽¹⁾	$	207,911	$	0	$	0	$	0	$	0	$	0	$	207,911	$	207,911	$	0	$	0	$	0	$	0	$	0	$	207,911
Term Loan		310,000		26,500		30,000		37,500		216,000		0		0
Revolving Facility ⁽²⁾		600,000		0		0		0		600,000		0		0		250,000		0		0		250,000		0		0		0
Total debt	$	1,117,911	$	26,500	$	30,000	$	37,500	$	816,000	$	0	$	207,911	$	457,911	$	0	$	0	$	250,000	$	0	$	0	$	207,911

We account for income taxes under FASB Accounting Standards Codification 740, “Income Taxes” (“ASC 740”). We calculate the quarterly tax provision consistent with the guidance provided by ASC 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:

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
(In thousands, except effective tax rate)	2020			2019			2020			2019			2021			2020			2021			2020
Income (loss) before income taxes	$	1,473		$	(6,490	)	$	(19,960	)	$	(162,992	)
Income (loss) from continuing operations before income taxes													$	24,097		$	(19,570	)	$	35,353		$	(56,489	)
Income tax (provision) benefit	$	(931	)	$	765		$	(7,457	)	$	(640	)	$	(2,192	)	$	(2,009	)	$	(4,855	)	$	2,525
Effective tax rate		63.2	%		11.8	%		(37.4	%)		(0.4	%)		9.1	%		(10.3	%)		13.7	%		4.5	%

Our provision for income taxes differs from the tax computed at the U.S. federal statutory income tax rate primarily due to permanent differences, income attributable to foreign jurisdictions taxed at different rates, state taxes, tax credits and certain discrete ~~items.~~items including a windfall benefit of $4.6 million for the six months ended June 30, 2021 and a shortfall expense of $6.9 million for the six months ended June 30, 2020. Our effective tax rate for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the prior year comparable periods, differs primarily due to the fact that the permanent items, credits and the impact of foreign earnings had ~~less~~more impact on the pre-tax income ~~(loss)~~ of ~~$1.5~~$24.1 million and ~~($20.0)~~$35.4 million in the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively, compared to the ~~impacts~~impact of these items on a pre-tax loss of ~~$6.5~~$19.6 million and ~~$163.0~~$56.5 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019,~~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~~six months ended ~~September~~June 30, ~~2020,~~2021, we ~~recorded~~released valuation allowances of ~~$1.2~~$0.1 million related to U.S. and foreign net operating loss carryforwards.

Our unrecognized income tax benefits were ~~$21.4~~$30.1 million and ~~$20.6~~$28.9 million as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~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 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, 2020

June 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

1,620

Accrued expenses

Prepaid expenses and other current assets

Derivatives not subject to hedge accounting:

1.25% Call Option

Other assets

N/A

1.25% Embedded cash conversion option

N/A

Other liabilities

Total derivatives

1,620

December 31, 2019

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

Accrued expenses

Prepaid expenses and other current assets

1,509

Derivatives not subject to hedge accounting:

1.25% Call Option

Other assets

N/A

1.25% Embedded cash conversion option

N/A

Other liabilities

185

Total derivatives

185

1,509

We have entered into non-deliverable forward foreign currency exchange contracts with reputable banking counterparties 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 percentage of forecasted monthly INR expenses over time. As of ~~September~~June 30, ~~2020, there were 9~~2021, we had 0 forward contracts ~~outstanding that were staggered to mature monthly starting in~~ ~~October 2020~~ ~~and ending in~~ ~~June 2021~~.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 July 2021. As of September 30, 2020, the notional amount for each of the outstanding forward contracts ranged from 225 to 280 million INR, or the equivalent of $3.0 million to $3.8 million, based on the exchange rate between the United States dollar and the INR in effect as of September 30, 2020. These amounts also approximate the forecasted future INR expenses we target to hedge in any one month in the future. As of September 30, 2020, we estimate that $1.6 million of net unrealized derivative gains included in accumulated other comprehensive income (“AOCI”) will be reclassified into income within the next nine months.hedges.

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					Amount of Gain (Loss) Reclassified from AOCI into Income				Amount of Gain (Loss) Recognized in OCI						Amount of Gain (Loss) Reclassified from AOCI into Income
(In thousands)	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		Three Months Ended June 30, 2021			Six Months Ended June 30, 2021		Location of Gain (Loss) Reclassified from AOCI into Income	Three Months Ended June 30, 2021		Six Months Ended June 30, 2021
Foreign exchange contracts	$	1,280	$	1,798	Cost of Revenue	$	107	$	71	$	(54	)	$	121	Cost of Revenue	$	290	$	611
					Selling, general and administrative expenses		52		34						Selling, general and administrative expenses		167		351
					Research and development	$	111	$	73						Research and development	$	317	$	668

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 was intended to offset cash payments in excess of the principal amount due upon any conversion of the 1.25% Notes. On July 1, 2020, the 1.25% Notes matured and were repaid in full (refer to Note 10 “Debt”) and the 1.25% Call Option expired. Prior to its expiration, the 1.25% Call Option was measured and reported at fair value on a recurring basis, within Level 3 of the fair value hierarchy. The 1.25% Call Option did not qualify for hedge accounting treatment. Therefore, the change in fair value of these instruments was 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, the net effect of those two derivative instruments on our earnings was minimal.

The embedded cash conversion option within the 1.25% Notes was 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 cash conversion option expired without ever having required settlement prior to the maturity of the 1.25% Notes. 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 was measured and reported at fair value on a recurring basis, within Level 3 of the fair value hierarchy.

~~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 are presented in the tables below. All amounts are net of ~~tax and exclude non-controlling interest.~~tax.

⁽¹⁾~~Net of taxes of $149 thousand arising from the revaluation of tax effects included in AOCI.~~

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

Three Months Ended September 30,

2020

2019

(In thousands)

Before-Tax Amount

Tax Effect

Net Amount

Before-Tax Amount

Tax Effect

Net Amount

Foreign currency translation adjustments

$
983

$
0

$
983

$
(574
)

$
0

$
(574
)
Derivatives qualifying as cash flow hedges:

Foreign exchange contracts:

Net gains (losses) arising during the period

1,280

(330
)

950

(257
)

67

(190
)
Net losses (gains) reclassified into income

(271
)

70

(201
)

(48
)

13

(35
)
Net change in unrealized gains (losses) on foreign exchange contracts

1,009

(260
)

749

(305
)

80

(225
)
Net gain (loss) on cash flow hedges

1,009

(260
)

749

(305
)

80

(225
)
Other comprehensive income (loss)

$
1,992

$
(260
)

$
1,732

$
(879
)

$
80

$
(799
)

	Three Months Ended June 30,
	2021								2020
(In thousands)	Before-Tax Amount			Tax Effect		Net Amount			Before-Tax Amount		Tax Effect			Net Amount
Foreign currency translation adjustments	$	421		$	0	$	421		$	918	$	0		$	918
Derivatives qualifying as cash flow hedges:
Foreign exchange contracts:
Net (losses) gains arising during the period		(54	)		14		(40	)		991		(256	)		735
Net (gains) losses reclassified into income		(774	)		200		(574	)		93		(24	)		69
Net change in unrealized (losses) gains on foreign exchange contracts		(828	)		214		(614	)		1,084		(280	)		804
Other comprehensive (loss) income	$	(407	)	$	214	$	(193	)	$	2,002	$	(280	)	$	1,722

	Nine Months Ended September 30,																		Six Months Ended June 30,
	2020									2019									2021									2020
(In thousands)	Before-Tax Amount			Tax Effect			Net Amount			Before-Tax Amount			Tax Effect			Net Amount			Before-Tax Amount			Tax Effect			Net Amount			Before-Tax Amount			Tax Effect			Net Amount
Foreign currency translation adjustments	$	(611	)	$	0		$	(611	)	$	(35	)	$	0		$	(35	)	$	520		$	0		$	520		$	(1,594	)	$	0		$	(1,594	)
Derivatives qualifying as cash flow hedges:
Foreign exchange contracts:
Net gains (losses) arising during the period		1,798			(464	)		1,334			83			(22	)		61			121			(31	)		90			518			(134	)		384
Net losses (gains) reclassified into income		(178	)		46			(132	)		(214	)		56			(158	)
Net change in unrealized gains (losses) on foreign exchange contracts		1,620			(418	)		1,202			(131	)		34			(97	)
Net gain (loss) on cash flow hedges		1,620			(418	)		1,202			(131	)		34			(97	)
Net (gains) losses reclassified into income																				(1,630	)		421			(1,209	)		93			(24	)		69
Net change in unrealized (losses) gains on foreign exchange contracts																				(1,509	)		390			(1,119	)		611			(158	)		453
Other comprehensive (loss) income	$	1,009		$	(418	)	$	591		$	(166	)	$	34		$	(132	)	$	(989	)	$	390		$	(599	)	$	(983	)	$	(158	)	$	(1,141	)

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, ~~except as set forth below with respected to the resolution of the Practice Fusion investigations,~~ 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 ~~additional~~ 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 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.

The Enterprise Information Solutions business (the “EIS Business”) acquired from McKesson Corporation (“McKesson”) on October 2, 2017 is subject to a May 2017 civil investigative demand (“CID”) from the U.S. Attorney’s Office for the Eastern District of New York. The CID requests documents and information related to the certification McKesson obtained for Horizon Clinicals in connection with the U.S. Department of Health and Human Services’ Electronic Health Record Incentive Program. In August 2018, McKesson received an additional CID seeking similar information for Paragon. McKesson has agreed, with respect to the 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.

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 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 ~~require~~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. The terms~~expenditures, all of ~~Settlement Agreements resolved, among other things, allegations that Practice Fusion, long before its acquisition by Allscripts~~which, as of December 31, 2020, have been paid in full.

During 2020, we implemented a strategic initiative to sell 2 of our businesses, EPSi and ~~concerning conduct about which Allscripts was unaware at the time~~CarePort. Since both businesses were part of the ~~acquisition, violated~~same strategic initiative and were sold within the ~~AKS through~~same period, the ~~manner by which~~combined sale of EPSi and CarePort represents a ~~sponsored Clinical Decision Support arrangement~~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 ~~sold~~part of the Unallocated category as it did not meet the requirements to ~~an opioid manufacturer~~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 ~~other AKS allegations~~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 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 June 30, 2021 and December 31, 2020:

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 six months ended June 30, 2021 and 2020. The activity during the three and six months ended June 30, 2021 relates to certain adjustments made by the DOJ against Practice Fusion, as well as False Claims Act allegations pertaining to Meaningful Use payments the federal government made to users of Practice Fusion’s EHR system. In April 2020, Practice Fusion amended its civil settlement agreementin connection with the ~~DOJ by revising~~sale of EPSi and CarePort, primarily of which relates to net working capital adjustments that impacted the ~~timing of certain~~gain on the sale of the ~~payments required to be made by Practice Fusion. Pursuant~~discontinued operations.

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2021			2020			2021			2020
Major income and expense line items related to EPSi and CarePort:
Revenue:
Software delivery, support and maintenance	$	363		$	32,431		$	0		$	63,913
Client services		5			4,488			0			8,366
Total revenue		368			36,919			0			72,279
Cost of revenue:
Software delivery, support and maintenance		294			3,113			(193	)		6,354
Client services		22			4,313			145			8,878
Amortization of software development and acquisition-related assets		0			2,607			0			5,124
Total cost of revenue		316			10,033			(48	)		20,356
Gross profit		52			26,886			48			51,923
Selling, general and administrative expenses		9			4,722			74			9,186
Research and development		8			2,237			(32	)		5,015
Amortization of intangible assets		0			8			0			15
Income from discontinued operations for EPSi and CarePort		35			19,919			6			37,707
Interest expense		0			(1,081	)		0			(2,639	)
Other income, net		1			0			1			0
Gain on sale of discontinued operations		0			0			647			0
Income from discontinued operations for EPSi and CarePort before income taxes ⁽¹⁾		36			18,838			654			35,068
Income tax provision		(15	)		(4,864	)		(169	)		(9,051	)
Income from discontinued operations, net of tax for EPSi and CarePort ⁽²⁾	$	21		$	13,974		$	485		$	26,017

(1) Income from discontinued operations for EPSi and CarePort does not agree to the ~~amendment,~~consolidated statements of operations for the ~~Federal settlement~~six months ended June 30, 2020, due to residual amounts ~~that were otherwise owed in~~related to Netsmart (as defined below). Refer to Note 17, “Supplemental Disclosures” for additional information.

(2) Income from discontinued operations, net of tax for EPSi and CarePort does not agree to the ~~Company’s second and third fiscal quarters were reduced by half, and~~consolidated statements of operations for the ~~balance of the Federal settlement amount owed by Practice Fusion will become~~six months ended June 30, 2020 due ~~in January 2021.~~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 first quarter~~As of ~~2020,~~June 30, 2021, we realigned our reporting structure to organize the Company around strategic business units to maximize delivery of client commitments, operational effectiveness and competitiveness. As a result, we have 3had 2 operating segments. The operating segments ~~(i) Core Clinical and Financial Solutions, (ii) Data, Analytics and Care Coordination and (iii) EPSi~~^TM~~. The Core Clinical and Financial Solutions and Data, Analytics and Care Coordination operating segments~~ are ~~the~~ equivalent to the reportable segments.

During the second quarter of 2020, (i) certain operations were moved between Core Clinical and Financial Solutions, and Data, Analytics and Care Coordination and (ii) a transfer price allocation was recorded between Core Clinical and Financial Solutions, and Data, Analytics and Care Coordination. In addition, the ~~(i) corporate general and administrative expenses (including marketing expenses) and (ii) revenue and the associated cost from the resale of certain ancillary products, primarily hardware~~ ~~that were previously in the “Unallocated Amounts” have been allocated between the three operating segments.~~

The ~~new reportable segments are (i) Core Clinical and Financial Solutions and (ii) Data, Analytics and Care Coordination. The new~~ Core Clinical and Financial Solutions segment derives its revenue from the sale of software applications for patient engagement, integrated clinical and financial management solutions, which primarily include EHR-related software, financial and practice management software, related installation, support and maintenance, outsourcing, private cloud hosting and revenue cycle management. The ~~new~~ Data, Analytics and Care Coordination segment derives its revenue from the sale of ~~care coordination,~~ practice reimbursement and payer and life sciences solutions, which are mainly targeted at ~~hospitals, health systems, other care facilities,~~physician practices, payers, life sciences companies and other key healthcare stakeholders. These solutions enable clients to transition, analyze, coordinate care and improve the quality, efficiency and value of healthcare delivery across the entire care community. The ~~EPSi~~^TM ~~operating segment is included in the~~ “Unallocated Amounts” category consists of transfer pricing revenues and as it does not meet the requirements to be a reportable segment nor the criteria to be aggregated into the 2 reportable segments. The segment disclosures below for the three and nine months ended September 30, 2019 have been revised to conform to the current year presentation. of January 1, 2021 also includes certain corporate-related expenses.

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 about the allocation of resources. We do not track our assets by segment.

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2020			2019			2020			2019			2021			2020			2021			2020
Revenue:
Core Clinical and Financial Solutions	$	306,451		$	343,016		$	937,882		$	1,031,210		$	310,148		$	311,099		$	619,313		$	631,431
Data, Analytics and Care Coordination		88,834			91,295			262,353			261,686			67,860			60,498			131,425			123,929
Unallocated Amounts		6,745			9,873			24,731			27,797			(4,294	)		(2,293	)		(8,672	)		(4,692	)
Total revenue	$	402,030		$	444,184		$	1,224,966		$	1,320,693		$	373,714		$	369,304		$	742,066		$	750,668

Gross profit:
Core Clinical and Financial Solutions	$	104,045		$	115,403		$	312,901		$	357,850		$	118,787		$	108,522		$	238,749		$	208,956
Data, Analytics and Care Coordination		52,402			53,382			153,099			156,788			32,966			29,076			63,049			60,578
Unallocated Amounts		5,150			6,517			17,042			18,881			0			0			0			0
Total gross profit	$	161,597		$	175,302		$	483,042		$	533,519		$	151,753		$	137,598		$	301,798		$	269,534

Income (loss) from operations:
Core Clinical and Financial Solutions	$	(8,387	)	$	(9,514	)	$	(45,132	)	$	(26,772	)	$	11,947		$	(15,834	)	$	29,552		$	(36,546	)
Data, Analytics and Care Coordination		15,039			9,548			31,971			26,402			2,875			(8,831	)		3,257			(15,095	)
Unallocated Amounts		2,727			3,148			8,594			10,940			(4,447	)		0			(9,094	)		0
Total income (loss) from operations	$	9,379		$	3,182		$	(4,567	)	$	10,570		$	10,375		$	(24,665	)	$	23,715		$	(51,641	)

The majority of the restricted cash balance as of ~~September~~June 30, 2021 represents lease deposits. The majority of the restricted cash balance as of June 30, 2020 represents lease deposits and ~~2019 represents the remaining balance of the~~an escrow account established as part of the acquisition of Netsmart LLC (“Netsmart”) in 2016, to be used by Netsmart to facilitate the integration of Allscripts’ former Homecare^TMbusiness.

	September 30,				June 30,
(In thousands)	2020		2019		2021		2020
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	218,701	$	129,349	$	229,254	$	199,004
Restricted cash		6,209		9,375		2,129		6,194
Total cash, cash equivalents and restricted cash	$	224,910	$	138,724	$	231,383	$	205,198

	Nine Months Ended September 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2021		2020
Supplemental non-cash information:
Issuance of treasury stock to commercial partner	$	752	$	701	$	534	$	752

On October 12, 2020, we signed a purchase agreement (the “CarePort Purchase Agreement”) with a subsidiary of WellSky Corp., a Delaware corporation (“WellSky”), pursuant to which WellSky has agreed to purchase substantially all of the assets of our CarePort Health business, and to assume certain liabilities in connection therewith, for $1.35 billion, subject to certain adjustments and upon the terms and conditions set forth in the CarePort Purchase Agreement. The transactions contemplated by the CarePort Purchase Agreement are subject to customary closing conditions, including the applicable waiting period (and any extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act having expired or otherwise having been terminated.

~~On October 15, 2020, we completed the transactions contemplated by the EPSi Purchase Agreement, by which Strata purchased substantially all of the assets of the EPSi~~^TM ~~business. The total consideration for the EPSi~~^TM business was $365.0 million, which is subject to certain adjustments for liabilities assumed by Strata and net working capital as described in the EPSi Purchase Agreement. We expect to realize a pre-tax gain upon sale between $225.0 and $235.0 million. On October 29, 2020, we repaid $20.0 million of the Term Loan as a result of the sale, of which $19.0 million was a mandatory prepayment in accordance with the Second Amended Credit Agreement.

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, 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, ~~statements regarding our settlement agreements with the Department of Justice (the “DOJ”) and other governmental authorities,~~ 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 or events. Certain factors that could cause ~~Allscripts~~our actual results to differ materially from those described in the forward-looking statements include, but are not limited to: the timing or ultimate completion of the sale of our Careport Health business, as the transaction is subject to certain closing conditions, including the expiration or termination of the waiting period under U.S. antitrust laws; ~~our use of the proceeds from the sale of our EPSi business and the contemplated sale of our CarePort Health business;~~ our ability to 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; our use of the proceeds from the sale of our EPSi and CarePort businesses; the failure by Practice Fusion to comply with the terms of the settlement agreements with the ~~DOJ;~~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 ~~required to be~~ 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 recently 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; ~~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;~~ 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; ~~our ability to maintain or expand our business with existing customers;~~ risks related to ~~international~~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, ~~2019~~2020 (our “Form 10-K”) ~~and Part II, Item 1A of this Form 10-Q~~ under the ~~headings~~heading “Risk Factors” and elsewhere. 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” 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,” “Company,” or “Allscripts” as used herein refers collectively to Allscripts Healthcare Solutions, Inc. 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 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 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 face the ~~urgency~~acuity of 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 growing pressure to demonstrate the delivery of high-quality care at lower costs and to fully embrace expectations of efficient, patient-centered information exchange. Congressional oversight of EHRs and health information technology has increased in recent years. This increased oversight has impacted and could continue to impact our clients and our business. ~~The~~Most recently, the passage of the 2121st Century Cures Act in December 2016 assuaged some concerns about interoperability and possible U.S. Food and Drug Administration ~~(“FDA”)~~ oversight of EHRs, and the ensuing regulations on data blocking and interoperability were ~~just~~ released by the Department of Health and Human Services (“HHS”) in March ~~2020. Certain~~2020 and became applicable under Office of the ~~elements~~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 ~~regulation may~~regulations will have a significant effect on our business processes and how our clients must exchange patient information. In particular, Allscripts will need to complete development work to satisfy the revised and new certification criterion, ~~just released,~~ and we and our clients will becontinue making adjustments to business practices associated with information exchange and provision of Electronic Health Information.

Population health management, analytics, data connectivity based on open Application Programming Interfaces (“APIs”) and other exchange mechanisms, and patient engagement are strategic imperatives that can help address these challenges. In the United States, for example, such initiatives are critical tools for success under the framework of the Quality Payment Program (“QPP”), launched by the Centers for Medicare & Medicaid Services (“CMS”) in responsePlease refer to the ~~passage of the Medicare Access~~section entitled “Our Business Overview and CHIP Reauthorization Act (“MACRA”). As healthcare providers and payers continue to migrate from volume-based to value-based care delivery and also weigh compliance with the newly finalized information blocking and interoperability regulations from the Office of the National Coordinator for Health Information Technology (“ONC”) and CMS, solutions that are connected to the consumer marketplace are the key to market leadershipRegulatory Environment” in the new healthcare reality. Additionally, there is a small but growing portion of the market interested in payment models not reliant on insurance, such as the direct primary care model, where doctors and other healthcare professionals understand the clinical value of the interoperable EHR separate and apart from payment mechanisms established by public or commercial payers or associated reporting requirements.

We believe our solutions are delivering value to our clients by providing them with powerful connectivity, as well as increasingly robust patient engagement and care coordination tools, enabling users to successfully participate in alternative 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 evolving area to be a key driverPart II, Item 7 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 continues to experience a period of change, primarily due to new laws and regulations, as well as modifications to industry standards. Various incentives that exist today (including alternative payment models that reward high value care delivery) have been rapidly moving health care toward a time where EHRs are as common as practice management or other financial systems in all provider offices. As a result, we believe that legislation, such as the aforementioned MACRA, as well as other government-driven initiatives (including 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.

The recently finalized ONC regulation on interoperability, information blocking and certification is the most recent major issuance from the government that will affect the health IT industry. The rule requires that we evaluate changes to business processes related to requests for the access, exchange or use of Electronic Health Information, as defined in the ONC regulation. The rule, which involves complex and specific requirements, will necessitate adjustments in our interactions with the market, but we also believe it may lead healthcare organizations to further invest in technologies, such as those sold by Allscripts, that facilitate the exchange of health data and support patients’ access to their information. Given Allscripts’ OPEN strategy, the Company’s application programming interface-based approach to connectivity launched more than a decade ago that exemplified for policy makers the potential benefits of APIs, we expect that Allscripts may be better positioned to adjust more quickly than some other companies in our sector to the requirement to remove barriers to information exchange.

In addition, given that CMS annually proposes new and revised regulations, including payment rules for upcoming years, which require the use of EHRs and other health information technology even as we comply with previously published rules, Allscripts continues to prepare on an ongoing basisForm 10-K for additional areas in which we must execute compliance. Similarly, our ability to achieve newly expanded applicable product certification requirements resulting from changing strategies at the ONC and the scope of related development and other efforts required to meet regulatory standards could both materially impact our capacity to maximize the market opportunity. All our market-facing EHR solutions and several other relevant products have successfully completed the testing process and are certified as 2015 Edition-compliant by an ONC-Authorized Certification Body (the most recent edition), and we remain committed to satisfying the new certification requirements and meeting the 2015 Cures Edition conditions of certification that were recently finalized by the ONC.

The MACRA encouraged the adoption of health IT necessary to satisfy new requirements more closely associating the report of quality measurements to Medicare payments. Following the finalization of the Physician Fee Schedule rule each year, providers accepting payment from Medicare must select one of two payment models: the Merit-based Incentive Payment System (“MIPS”) or an Advanced Alternative Payment Model (“APM”). Both of these approaches require substantive reporting on quality measures. Additionally, the MIPS consolidated several preexisting incentive programs, including Medicare Meaningful Use and Physician Quality Reporting System, under one umbrella, as required by statute. We believe this law, coupled with other pay for value programs, continues to 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 need an EHR and other health IT solutions and among those looking to purchase more robust systems to comply with increasingly complex MACRA requirements. Additional regulations continue to be released annually, clarifying requirements related to reporting and quality measures, which will enable physician populations and healthcare organizations to make strategic decisions about the purchase of analytic software or other solutions important to comply with the new law and associated regulations.

Given the ongoing expansion of payment models requiring analytics, reporting and greater data connectivity, we believe large physician groups will continue to purchase and enhance their use of EHR technology; while the number of very large practices with over 100 physicians that have not yet acquired such technology is insignificant, those considering replacement purchases are increasing. Such practices may choose to replace older EHR technology in the future as regulatory requirements (such as those related to Advanced APMs) and business realities dictate the need for updates and upgrades, as well as additional features and functionality. As incentive payment strategies shift in policies released under the current Presidential Administration in the United States, the role of commercial payers and their continued expansion of alternative payment models and interest in attaining larger volumes of clinical data, as well as the anticipated growth in Medicaid payment models, are expected to provide additional incentives for purchase and expansion.

We also continue to see activity in local community-based buying, whereby individual hospitals, health systems and integrated delivery networks subsidize the purchase of EHR licenses or related services for local, affiliated physicians and physicians across their employed physician base in order to leverage buying power and to 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 a variety of incentive programs, while the subsidizing health system expands connectivity within the local provider community. We believe that the rules related to exceptions to the Stark Law and Anti-Kickback Statute, which were recently released in proposed form and would continue to allow hospitals and other organizations to subsidize the purchase of EHRs, will possibly further contribute to the growth of this market dynamic. We expect that these regulatory revisions from HHS will further support value-based payment models and their associated purchasing arrangements between hospitals and physician practices, including allowing subsidization of replacement EHRs and not just initial purchases. The associated challenge we face is to successfully position, sell, implement and support our products sold to hospitals, health systems or integrated delivery networks that subsidize their affiliated physicians. We believe the community programs we have in place will help us penetrate these markets.

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 efforts by the current Presidential Administration and several state governments to alter aspects of the Patient Protection and Affordable Care Act (as amended, the “PPACA”) or to make other policy changes through Executive Orders and United States Supreme Court appointments create uncertainty for us and for our clients. Certain lawsuits related to the PPACA also create uncertainty for us and our clients. Some laws currently in place may have a positive impact by requiring the expanded use of EHRs, quality measurement, prescription drug monitoring and analytics tools to participate in certain federal, state or private sector programs. Others, such as adjustments made to the PPACA by the Administration, laws or regulations mandating reductions in reimbursement for certain types of providers, decreasing insurance coverage of patients, state-level requests for waivers from CMS related to Medicaid modeling, 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.

Allscripts continues to see increased opportunities stemming from the large stores of patient data accumulated from our industry-leading client base and partnerships with other EHR companies, including NextGen Healthcare Inc., a leading provider of ambulatory-focused healthcare technology solutions. Through collaboration with researchers and life sciences companies, we believe Allscripts may play a role in the study of real-world evidence as it relates to post-market surveillance of new medicines or the study of therapeutics related to COVID-19, as examples. We continue to closely monitor regulations and/or guidance from HHS, the CDC and the FDA, as well as any new laws that take shape in Congress that may touch third-party uses of patient data and/or any related privacy implications for patient consent.

Congressional focus on addressing the opioid epidemic in part through technological applications and reducing clinician burden is likely to continue. The Administration is also taking action in some areas that may directly or indirectly affect Allscripts and

our clients, including efforts to increase health-related price transparency in order to support patients in applying market-based pressures to the nation’s challenge of health cost containment. Further, CMS has finalized changes to the Evaluation & Management coding structure that ties closely to our clients’ requirements to document the care they are delivering prior to payment. We expect these changes may have a positive effect on clinician satisfaction with our EHRs, though the fundamentals of payment will remain in transition to value-based payment models.

New payment and delivery system reform programs, including those modeled after those of the Medicare program, are increasingly being rolled out at the state level through Medicaid administrators, as well as through the private sector, presenting additional opportunities for us to provide software and services to our clients who participate. We also must take steps to comply with state-specific laws and regulations governing companies in the health information technology space.

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.information.

The global outbreak of the novel coronavirus (COVID-19) has severely restricted the level of economic activity around the world, and the degrees of any economic recovery in various jurisdictions have not been linear. We have been carefully monitoring the COVID-19 pandemic and its impact on our global operations. We are conducting business with certain modifications to employee travel, employee work locations, and 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, ~~as is true of~~along with other health IT vendors, has been asked by the White House, HHS, the CDC, and state and local governments to support public health efforts to contain the pandemic by expanding COVID-19 reporting options available to our clients. Our technology has been instrumental to the provision of high-quality care, aiding not only public health surveillance but also in clinical decision support interventions to aid in triage, diagnosis and treatment; information exchange as patients are moved from site to ~~site;~~site and/or discharged; predictive analytics based on local data for surge ~~anticipation;~~anticipation and ~~patient transitions~~vaccine management; and research based on real-world data informing the world’s evolving understanding of post-acute sequelae of COVID-19 syndrome (known colloquially as ~~they leave~~Long COVID).

~~The~~ COVID-19 pandemic negatively impacted revenue for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, as we saw delays in deals with upfront software revenue and professional services implementations across our inpatient and outpatient base. ~~Over the past six months,~~During 2020, we implemented cost reduction actions ~~that included~~across all functional disciplines of the Company, including headcount reductions and temporary salary measures. We believe ~~our~~the cost reduction actions that were implemented in 2020 and our current liquidity ~~serve to position~~provide us ~~appropriately and provide~~with operating and financial flexibility to assist us in navigating through this uncertain environment.

The extent to which the COVID-19 pandemic will continue to impact the Company’s results of operations and financial condition will depend on future developments that are highly uncertain and cannot be ~~predicted, including~~predicted. Future developments include new information that may emerge concerning the duration and severity of the COVID-19 pandemic, resurgences or additional “waves” of outbreaks of COVID-19 in various jurisdictions (including new lineages of the virus), the impact of COVID-19 on economic activity, ~~and~~ the actions taken by health authorities and policy makers to contain its impacts on public health and the global ~~economy. See Part II, Item 1A, Risk Factors, for an additional discussion~~economy, and the availability, effectiveness and public acceptance of ~~risks related to COVID-19.~~vaccines.

~~We adopted Accounting Standards Update No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~” (“ASU 2016-13”) on January 1, 2020 using the cumulative-effect adjustment transition method. The guidance in ASU 2016-13 replaces the incurred loss impairment methodology under current GAAP. The new impairment model requires immediate recognition of estimated credit losses expected to occur for most financial assets and certain other instruments. For available-for-sale debt securities with unrealized losses, the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Refer to Note 2 “Revenue from Contracts with Customers” and Note 3 “Accounts Receivable” to our consolidated financial statements included in Part I, Item 1, “Financial Statements” of this Form 10-Q for further information regarding the impact of adopting ASU 2016-13.

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

During the ~~third~~second quarter of ~~2020,~~2021, we continued to make 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 integrating recent acquisitions. Additionally, we believe there are still opportunities to continue to improve our operating leverage and further streamline our operations, and such efforts are ongoing.

Total revenue for the ~~third~~second quarter of ~~2020~~2021 was ~~$402~~$374 million, ~~a decrease~~an increase of ~~$42~~$4 million compared to the ~~third~~second quarter of ~~2019.~~2020. For the three months ended ~~September~~June 30, ~~2020,~~2021, software delivery, support and maintenance revenue and client services revenue ~~was $251~~were $220 million and ~~$151~~$154 million, respectively, compared with ~~$284~~$224 million and ~~$160~~$146 million, respectively, during the three months ended ~~September~~June 30, ~~2019.~~2020. Gross profit for the ~~third~~second quarter of 2021 was ~~$162~~$152 million, ~~a decrease~~an increase of ~~$13~~$14 million compared to the ~~third~~second quarter of ~~2019.~~2020. Gross margin increased to ~~40.2%~~40.6% in the ~~third~~second quarter of ~~2020~~2021 compared to a ~~39.5%~~37.3% gross margin in the ~~third~~second quarter of ~~2019.~~2020.

Our contract backlog as of ~~September~~June 30, ~~2020~~2021 was ~~$4.4~~$3.9 billion, which ~~remained consistent~~decreased compared with our contract backlog of ~~$4.4~~$4.1 billion as of December 31, ~~2019, while increasing compared with contract backlog as of September~~2020 and June 30, ~~2019 of $3.9 billion.~~2020.

Our bookings, which reflect the value of executed contracts for software, hardware, other client services, private cloud hosting, outsourcing and subscription-based services, totaled ~~$187~~$180 million for the three months ended ~~September~~June 30, ~~2020,~~2021, which represents ~~a decrease~~an increase of ~~21%~~10% over the comparable prior period amount of ~~$236~~$164 million and a decrease of ~~less than 1%~~7% from the ~~second~~first quarter ~~2020~~2021 amount of ~~$188~~$194 million.

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended June 30,									Six Months Ended June 30,
(In thousands, except percentages)	2020			2019			% Change			2020			2019			% Change			2021			2020			% Change			2021			2020			% Change
Revenue:
Software delivery, support and maintenance	$	250,547		$	284,373			(11.9	%)	$	770,180		$	844,908			(8.8	%)	$	219,610		$	223,591			(1.8	%)	$	442,301		$	455,731			(2.9	%)
Client services		151,483			159,811			(5.2	%)		454,786			475,785			(4.4	%)		154,104			145,713			5.8	%		299,765			294,937			1.6	%
Total revenue		402,030			444,184			(9.5	%)		1,224,966			1,320,693			(7.2	%)		373,714			369,304			1.2	%		742,066			750,668			(1.1	%)
Cost of revenue:
Software delivery, support and maintenance		75,311			83,312			(9.6	%)		225,879			248,401			(9.1	%)		69,303			71,130			(2.6	%)		140,034			144,214			(2.9	%)
Client services		131,915			156,275			(15.6	%)		420,185			452,226			(7.1	%)		122,597			131,171			(6.5	%)		240,684			279,391			(13.9	%)
Amortization of software development and acquisition-related assets		33,207			29,295			13.4	%		95,860			86,547			10.8	%		30,061			29,405			2.2	%		59,550			57,529			3.5	%
Total cost of revenue		240,433			268,882			(10.6	%)		741,924			787,174			(5.7	%)		221,961			231,706			(4.2	%)		440,268			481,134			(8.5	%)
Gross profit		161,597			175,302			(7.8	%)		483,042			533,519			(9.5	%)		151,753			137,598			10.3	%		301,798			269,534			12.0	%
Gross margin %		40.2	%		39.5	%					39.4	%		40.4	%					40.6	%		37.3	%					40.7	%		35.9	%
Selling, general and administrative expenses		97,231			101,152			(3.9	%)		309,139			306,939			0.7	%		79,090			109,897			(28.0	%)		160,798			202,722			(20.7	%)
Research and development		48,476			63,873			(24.1	%)		158,913			191,597			(17.1	%)		51,219			46,045			11.2	%		100,392			105,422			(4.8	%)
Asset impairment charges		210			248			(15.3	%)		210			4,037			(94.8	%)		5,244			0		NM				5,244			0		NM
Amortization of intangible and acquisition-related assets		6,301			6,847			(8.0	%)		19,347			20,376			(5.1	%)		5,825			6,321			(7.8	%)		11,649			13,031			(10.6	%)
Income (loss) from operations		9,379			3,182			194.8	%		(4,567	)		10,570			(143.2	%)		10,375			(24,665	)		142.1	%		23,715			(51,641	)		145.9	%
Interest expense		(7,662	)		(10,839	)		(29.3	%)		(31,280	)		(31,447	)		(0.5	%)		(2,949	)		(10,314	)		(71.4	%)		(6,092	)		(20,979	)		(71.0	%)
Other income (loss), net		398			781			(49.0	%)		45			(143,700	)		(100.0	%)		16,757			(875	)	NM				17,794			(353	)	NM
(Impairment) recovery of long-term investments		(1,025	)		0		NM				(1,575	)		1,045		NM
Equity in net income (loss) of unconsolidated investments		383			386			(0.8	%)		17,417			540		NM
Income (loss) before income taxes		1,473			(6,490	)		(122.7	%)		(19,960	)		(162,992	)		(87.8	%)
Impairment of long-term investments																				0			(550	)		(100.0	%)		0			(550	)		(100.0	%)
Equity in net (loss) income of unconsolidated investments																				(86	)		16,834			(100.5	%)		(64	)		17,034			(100.4	%)
Income (loss) from continuing operations before income taxes																				24,097			(19,570	)	NM				35,353			(56,489	)		162.6	%
Income tax (provision) benefit		(931	)		765		NM				(7,457	)		(640	)	NM				(2,192	)		(2,009	)		9.1	%		(4,855	)		2,525		NM
Effective tax rate		63.2	%		11.8	%					(37.4	%)		(0.4	%)					9.1	%		(10.3	%)					13.7	%		4.5	%
Income (loss) from continuing operations, net of tax																				21,905			(21,579	)	NM				30,498			(53,964	)		156.5	%
Income from discontinued operations																				36			18,838			(99.8	%)		7			35,056			(100.0	%)
Gain on sale of discontinued operations																				0			0		NM				647			0		NM
Income tax effect on discontinued operations																				(15	)		(4,864	)		(99.7	%)		(169	)		(9,051	)		(98.1	%)
Income from discontinued operations, net of tax																				21			13,974			(99.8	%)		485			26,005			(98.1	%)
Net income (loss)		542			(5,725	)		(109.5	%)		(27,417	)		(163,632	)		(83.2	%)	$	21,926		$	(7,605	)	NM			$	30,983		$	(27,959	)	NM
Net loss attributable to non-controlling interests		0			0		-				0			424		NM
Net income (loss) attributable to Allscripts Healthcare Solutions, Inc. stockholders	$	542		$	(5,725	)		(109.5	%)	$	(27,417	)	$	(163,208	)		(83.2	%)

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 June 30,							Six Months Ended June 30,
(In thousands)	2020		2019		% Change			2020		2019		% Change			2021		2020		% Change			2021		2020		% Change
Revenue:
Recurring revenue	$	333,900	$	349,455		(4.5	%)	$	1,010,207	$	1,048,204		(3.6	%)	$	303,644	$	303,196		0.1	%	$	599,292	$	613,177		(2.3	%)
Non-recurring revenue		68,130		94,729		(28.1	%)		214,759		272,489		(21.2	%)		70,070		66,108		6.0	%		142,774		137,491		3.8	%
Total revenue	$	402,030	$	444,184		(9.5	%)	$	1,224,966	$	1,320,693		(7.2	%)	$	373,714	$	369,304		1.2	%	$	742,066	$	750,668		(1.1	%)

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Recurring revenue consists of subscription-based software sales, support and maintenance revenue, recurring transactions revenue and recurring revenue from managed services solutions, such as outsourcing, private cloud hosting and revenue cycle 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 ~~decreased~~was flat for the three ~~and nine~~ months ended ~~September~~June 30, ~~2020~~2021 compared to the prior year comparable ~~periods,~~period, reflecting increases in recurring transaction-related revenues and managed services revenues, which were mostly offset by attrition. Recurring revenue decreased for the six months ended June 30, 2021 compared to the prior year comparable period, primarily due to attrition. The decrease was partially offset by an increase in ~~subscription revenue.~~recurring transaction-related revenues. Non-recurring revenue ~~decreased~~increased for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 compared to the prior year comparable periods, primarily due to ~~lower upfront software~~non-recurring transaction-related revenues and ~~project delays that impacted~~ client services ~~revenue.~~revenues. The ~~decrease~~increase was partially offset by ~~new business~~a decrease in ~~client services revenue.~~upfront software revenues.

The percentage of recurring and non-recurring revenue of our total revenue was ~~83%~~81% and ~~17%~~19%, respectively, during both the three and six months ended ~~September~~June 30, ~~2020~~2021 and ~~79% and 21%, respectively, during the three months ended September 30, 2019. The percentage of recurring and non-recurring revenue of our total revenue was~~ 82% and 18%, respectively, during both the ~~nine~~three and six months ended ~~September~~June 30, ~~2020 and 79% and 21%, respectively, during the nine months ended September 30, 2019.~~2020.

	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended June 30,									Six Months Ended June 30,
(In thousands, except percentages)	2020			2019			% Change			2020			2019			% Change			2021			2020			% Change			2021			2020			% Change
Total cost of revenue	$	240,433		$	268,882			(10.6	%)	$	741,924		$	787,174			(5.7	%)	$	221,961		$	231,706			(4.2	%)	$	440,268		$	481,134			(8.5	%)
Gross profit	$	161,597		$	175,302			(7.8	%)	$	483,042		$	533,519			(9.5	%)	$	151,753		$	137,598			10.3	%	$	301,798		$	269,534			12.0	%
Gross margin %		40.2	%		39.5	%					39.4	%		40.4	%					40.6	%		37.3	%					40.7	%		35.9	%

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Gross profit ~~decreased~~and margin increased during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 compared with the prior year comparable periods, primarily due to ~~attrition, revenue mix~~the increase in recurring managed services revenues, the increase in transaction-related revenues, the decrease in hosting costs and ~~project delays.~~the cost reduction initiatives implemented throughout 2020. The ~~decrease~~increase was partially offset by ~~new business in software subscription revenues~~attrition.

Three and Six Months Ended June 30, 2021 Compared with the Three and Six Months Ended June 30, 2020

Selling, general and administrative expenses decreased during the three and six months ended June 30, 2021, compared with the prior year comparable periods, primarily due to lower legal costs and the impact of the cost reduction ~~initiatives.~~initiatives implemented throughout 2020.

Three and Six Months Ended June 30, 2021 Compared with the Three and Six Months Ended June 30, 2020

Research and development expenses increased during the three months ended ~~September~~June 30, ~~2020~~2021 compared with the prior year comparable period, primarily due to a decrease in the ~~cost reduction initiatives. Gross margin~~amount of capitalized software costs. Research and development expenses decreased ~~during~~for the ~~nine~~six months ended ~~September~~June 30, ~~2020 compared with the prior year comparable period, due to the previously mentioned items for the gross profit decline.~~

~~Three and Nine Months Ended September 30, 2020 Compared with the Three and Nine Months Ended September 30, 2019~~

~~Selling, general and administrative expenses decreased during the three months ended September 30, 2020,~~2021 compared with the prior year comparable period, primarily due to the impact of the cost reduction initiatives. Selling, general and administrative expenses increased during the nine months ended September 30, 2020, compared with the prior year comparable period, primarily due to higher severance related expenses. The increase was partially offset by the impact of the cost reduction initiatives.initiatives implemented throughout 2020.

	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended June 30,					Six Months Ended June 30,
(In thousands)	2020		2019		% Change			2020		2019		% Change			2021		2020		% Change	2021		2020		% Change
Research and development	$	48,476	$	63,873		(24.1	%)	$	158,913	$	191,597		(17.1	%)
Asset impairment charges															$	5,244	$	0	NM	$	5,244	$	0	NM

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~

~~Research and development expenses decreased during the three and nine months ended September 30,~~ 2020 ~~compared with the prior year comparable periods, primarily due to the impact of the cost reduction initiatives.~~

~~Three and Nine Months Ended September 30, 2020 Compared with the Three and Nine Months Ended September 30, 2019~~

Asset impairment charges for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2021 were ~~primarily the result of retiring certain hosting assets~~ due to ~~data center migrations.~~the write-off of deferred costs related to our private cloud hosting operations.

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

2020

2019

% Change

2020

2019

% Change

2021

2020

% Change

2021

2020

% Change

Amortization of intangible and acquisition-related

assets

6,301

6,847

(8.0

19,347

20,376

(5.1

5,825

6,321

(7.8

11,649

13,031

(10.6

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

The decrease in amortization expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the prior year comparable periods, was due to normal amortization expense ~~in 2020~~ and certain intangible assets being fully amortized in ~~2019.~~2020.

	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended June 30,							Six Months Ended June 30,
(In thousands)	2020		2019		% Change			2020		2019		% Change			2021		2020		% Change			2021		2020		% Change
Interest expense	$	7,662	$	10,839		(29.3	%)	$	31,280	$	31,447		(0.5	%)	$	2,949	$	10,314		(71.4	%)	$	6,092	$	20,979		(71.0	%)

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Interest expense decreased during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 compared to the prior year comparable periods ~~primarily~~ due to ~~a decline~~lower outstanding debt levels during the current year. The 1.25% Cash Convertible Senior Notes matured and were repaid in full in the ~~effective interest rates on outstanding debt.~~third quarter of 2020. The ~~decrease~~senior secured credit facility was ~~partially offset by higher total debt levels~~repaid in full in the ~~current year~~fourth quarter of 2020. In June 2021, we borrowed $250.0 million from the senior secured revolving facility (“Revolving Facility”); however this had a minimal impact on interest expense for the comparable periods.

	Three Months Ended September 30,							Nine Months Ended September 30,								Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2020		2019		% Change			2020		2019			% Change			2021		2020			% Change	2021		2020			% Change
Other income (loss), net	$	398	$	781		(49.0	%)	$	45	$	(143,700	)		(100.0	%)	$	16,757	$	(875	)	NM	$	17,794	$	(353	)	NM

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Other income (loss), net for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 consisted of a combination of interest income and miscellaneous receipts and expenses. The large increase ~~during~~in income in 2021 was primarily due to a $5.0 million distribution received from the ~~nine months ended September 30, 2020 compared~~Practice Fusion escrow account related to the ~~prior year comparable period was due to the $145 million~~ settlement agreements with the DOJ, ~~related to its civil~~a $9.7 million gain as a result of a note conversion and ~~criminal investigations~~the revaluation of ~~Practice Fusion.~~our existing investment with a third-party cost method investment, and a $1.4 million distribution received from a third-party cost method investment.

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,								Six Months Ended June 30,
(In thousands)	2020			2019		% Change	2020			2019		% Change	2021		2020			% Change			2021		2020			% Change
(Impairment) recovery of long-term investments	$	(1,025	)	$	0	NM	$	(1,575	)	$	1,045	NM
Impairment of long-term investments													$	0	$	(550	)		(100.0	%)	$	0	$	(550	)		(100.0	%)

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

During the three and six months ended ~~September~~June 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. ~~During the nine months ended September 30, 2019, we recovered $1.0 million from a third-party cost-method investment that we had previously impaired.~~

	Three Months Ended September 30,							Nine Months Ended September 30,					Three Months Ended June 30,								Six Months Ended June 30,
(In thousands)	2020		2019		% Change			2020		2019		% Change	2021			2020		% Change			2021			2020		% Change
Equity in net income (loss) of unconsolidated investments	$	383	$	386		(0.8	%)	$	17,417	$	540	NM
Equity in net (loss) income of unconsolidated investments													$	(86	)	$	16,834		(100.5	%)	$	(64	)	$	17,034		(100.4	%)

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Equity in net (loss) income ~~(loss)~~ of unconsolidated investments represents our share of the equity earnings of our investments in third parties accounted for under the equity method of accounting based on a one quarter lag. During the ~~nine~~three and six months ended ~~September~~June 30, 2020, we recorded a $16.8 million gain from the sale of a third-party ~~equity-method~~equity method investment.

	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended June 30,									Six Months Ended June 30,
(In thousands, except percentages)	2020			2019			% Change	2020			2019			% Change	2021			2020			% Change			2021			2020			% Change
Income tax (provision) benefit	$	(931	)	$	765		NM	$	(7,457	)	$	(640	)	NM	$	(2,192	)	$	(2,009	)		9.1	%	$	(4,855	)	$	2,525		NM
Effective tax rate		63.2	%		11.8	%			(37.4	%)		(0.4	%)			9.1	%		(10.3	%)					13.7	%		4.5	%

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Our provision for income taxes differs from the tax computed at the U.S. federal statutory income tax rate primarily due to permanent differences, income attributable to foreign jurisdictions taxed at different rates, state taxes, tax credits and certain discrete items. Our effective tax rate for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the prior year comparable periods, differs primarily due to the fact that the permanent items, credits and the impact of foreign earnings had ~~less~~more impact on the pre-tax income ~~(loss)~~ of ~~$1.5~~$24.1 million and ~~($20.0)~~$35.4 million in the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively, compared to the impacts of these items on a pre-tax loss of ~~$6.5~~$19.6 million and ~~$163.0~~$56.5 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, respectively.

	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended June 30,									Six Months Ended June 30,
(In thousands)	2020		2019		% Change	2020		2019		% Change	2021			2020			% Change			2021			2020			% Change
Net loss attributable to non-controlling interest	$	0	$	0	-	$	0	$	424	NM
Income from discontinued operations											$	36		$	18,838			(99.8	%)	$	7		$	35,056			(100.0	%)
Gain on sale of discontinued operations												0			0		NM				647			0		NM
Income tax effect on discontinued operations												(15	)		(4,864	)		(99.7	%)		(169	)		(9,051	)		(98.1	%)
Income from discontinued operations, net of tax											$	21		$	13,974			(99.8	%)	$	485		$	26,005			(98.1	%)

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

~~The net loss 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 ~~affiliates’ common stock that is not owned by us for each~~sale of EPSi, it was part of the Unallocated 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 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 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 all periods presented. ~~We purchased all of the outstanding minority interests in Pulse8, Inc.~~The income from discontinued operations during ~~the first quarter of 2019.~~

~~The segment disclosures below for~~ the three and ~~nine~~six months ended ~~September~~June 30, ~~2019 have been revised to conform~~2020 represents income generated from both EPSi and CarePort. The gain on sale of discontinued operations during the three and six months ended June 30, 2021 primarily represents net working capital adjustments to the ~~current year presentation.~~gain from the sale of CarePort. Refer to Note 15, ~~“Business Segments”~~“Discontinued Operations” 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.~~information regarding discontinued operations.

	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended June 30,									Six Months Ended June 30,
(In thousands)	2020			2019			% Change			2020			2019			% Change			2021			2020			% Change			2021			2020			% Change
Revenue:
Core Clinical and Financial Solutions	$	306,451		$	343,016			(10.7	%)	$	937,882		$	1,031,210			(9.1	%)	$	310,148		$	311,099			(0.3	%)	$	619,313		$	631,431			(1.9	%)
Data, Analytics and Care Coordination		88,834			91,295			(2.7	%)		262,353			261,686			0.3	%		67,860			60,498			12.2	%		131,425			123,929			6.0	%
Unallocated Amounts		6,745			9,873			(31.7	%)		24,731			27,797			(11.0	%)		(4,294	)		(2,293	)		87.3	%		(8,672	)		(4,692	)		84.8	%
Total revenue	$	402,030		$	444,184			(9.5	%)	$	1,224,966		$	1,320,693			(7.2	%)	$	373,714		$	369,304			1.2	%	$	742,066		$	750,668			(1.1	%)

Gross Profit:
Care Coordination and Financial Solutions	$	104,045		$	115,403			(9.8	%)	$	312,901		$	357,850			(12.6	%)
Core Clinical and Financial Solutions																			$	118,787		$	108,522			9.5	%	$	238,749		$	208,956			14.3	%
Data, Analytics and Care Coordination		52,402			53,382			(1.8	%)		153,099			156,788			(2.4	%)		32,966			29,076			13.4	%		63,049			60,578			4.1	%
Unallocated Amounts		5,150			6,517			(21.0	%)		17,042			18,881			(9.7	%)		0			0		NM				0			0		NM
Total gross profit	$	161,597		$	175,302			(7.8	%)	$	483,042		$	533,519			(9.5	%)	$	151,753		$	137,598			10.3	%	$	301,798		$	269,534			12.0	%

Income (loss) from operations:
Care Coordination and Financial Solutions	$	(8,387	)	$	(9,514	)		11.8	%	$	(45,132	)	$	(26,772	)		(68.6	%)
Core Clinical and Financial Solutions																			$	11,947		$	(15,834	)		175.5	%	$	29,552		$	(36,546	)		180.9	%
Data, Analytics and Care Coordination		15,039			9,548			57.5	%		31,971			26,402			21.1	%		2,875			(8,831	)		132.6	%		3,257			(15,095	)		121.6	%
Unallocated Amounts		2,727			3,148			(13.4	%)		8,594			10,940			(21.4	%)		(4,447	)		0		NM				(9,094	)		0		NM
Total income (loss) from operations	$	9,379		$	3,182			194.8	%	$	(4,567	)	$	10,570			(143.2	%)	$	10,375		$	(24,665	)		142.1	%	$	23,715		$	(51,641	)		145.9	%

Our Core Clinical and Financial Solutions segment derives its revenue from the sale of software applications for patient engagement, integrated clinical and financial management solutions, which primarily include EHR-related software, financial and practice management software, related installation, support and maintenance, outsourcing, private cloud hosting and revenue cycle management.

	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended June 30,									Six Months Ended June 30,
(In thousands, except percentages)	2020			2019			% Change			2020			2019			% Change			2021			2020			% Change			2021			2020			% Change
Revenue	$	306,451		$	343,016			(10.7	%)	$	937,882		$	1,031,210			(9.1	%)	$	310,148		$	311,099			(0.3	%)	$	619,313		$	631,431			(1.9	%)
Gross profit	$	104,045		$	115,403			(9.8	%)	$	312,901		$	357,850			(12.6	%)	$	118,787		$	108,522			9.5	%	$	238,749		$	208,956			14.3	%
Gross margin %		34.0	%		33.6	%					33.4	%		34.7	%					38.3	%		34.9	%					38.6	%		33.1	%
Loss from operations	$	(8,387	)	$	(9,514	)		(11.8	%)	$	(45,132	)	$	(26,772	)		68.6	%
Income (loss) from operations																			$	11,947		$	(15,834	)		175.5	%	$	29,552		$	(36,546	)		180.9	%
Operating margin %		(2.7	%)		(2.8	%)					(4.8	%)		(2.6	%)					3.9	%		(5.1	%)					4.8	%		(5.8	%)

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Core Clinical and Financial Solutions revenue decreased during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the prior year comparable periods, primarily due to lower upfront software revenues ~~attrition~~ and ~~project delays that impacted client services revenue.~~attrition.

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

Income from operations and operating margin ~~slightly~~ increased ~~during~~for the three and six months ended ~~September~~June 30, ~~2020~~2021, compared with the prior year comparable ~~period,~~periods, primarily due to the ~~cost reduction initiatives. Gross margin decreased during the nine months ended September 30, 2020 compared with the prior year comparable period, due to the previously mentioned items for the~~increase in gross profit ~~decline.~~

~~Loss from operations slightly decreased for the three months ended September 30, 2020, compared with the prior year comparable period, primarily due to lower operating expenses driven by~~and the cost reduction ~~initiatives.~~initiatives implemented throughout 2020. The ~~decrease~~increase was partially offset by the ~~decline in gross profit. Loss from operations increased for the nine months ended September 30, 2020, compared with the prior year comparable period due~~asset impairment charges related to ~~a decline in gross profit. The decrease was partially offset by the cost reduction initiatives.~~our private cloud hosting operations.

Our Data, Analytics and Care Coordination segment derives its revenue from the sale of ~~care coordination,~~ practice reimbursement and payer and life sciences solutions, which are mainly targeted at ~~hospitals, health systems, other care facilities,~~physician practices, payers, life sciences companies and other key healthcare stakeholders. These solutions enable clients to transition, analyze, ~~and~~ coordinate care ~~while improving~~and improve the quality, efficiency and value of healthcare delivery across the entire care community.

	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended June 30,									Six Months Ended June 30,
(In thousands, except percentages)	2020			2019			% Change			2020			2019			% Change			2021			2020			% Change			2021			2020			% Change
Revenue	$	88,834		$	91,295			(2.7	%)	$	262,353		$	261,686			0.3	%	$	67,860		$	60,498			12.2	%	$	131,425		$	123,929			6.0	%
Gross profit	$	52,402		$	53,382			(1.8	%)	$	153,099		$	156,788			(2.4	%)	$	32,966		$	29,076			13.4	%	$	63,049		$	60,578			4.1	%
Gross margin %		59.0	%		58.5	%					58.4	%		59.9	%					48.6	%		48.1	%					48.0	%		48.9	%
Income from operations	$	15,039		$	9,548			57.5	%	$	31,971		$	26,402			21.1	%
Income (loss) from operations																			$	2,875		$	(8,831	)		132.6	%	$	3,257		$	(15,095	)		121.6	%
Operating margin %		16.9	%		10.5	%					12.2	%		10.1	%					4.2	%		(14.6	%)					2.5	%		(12.2	%)

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Data, Analytics and Care Coordination revenue ~~decreased~~increased for the three and six months ended ~~September~~June 30, ~~2020~~2021 compared with the prior year comparable ~~period~~periods, due to ~~a decrease~~an increase in subscription and transaction-related revenues. The ~~decrease~~increase for the six months ended June 30, 2021 was partially offset by ~~an increase~~a decrease in ~~subscription revenue. New business in subscription revenue and client~~ services ~~contributed to the slight increase in revenue for the nine months ended September 30, 2020 compared with the prior year comparable period.~~revenues.

Gross profit ~~decreased~~increased during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 compared with the prior year comparable periods, primarily due to ~~the decrease~~an increase in ~~revenue~~revenues and revenue ~~profile.~~mix. Gross margin increased slightly ~~increased~~ during the three months ended ~~September~~June 30, ~~2020 compared with the prior year comparable period, primarily due to the cost reduction initiatives. Gross margin decreased during the nine months ended September 30, 2020~~2021 compared with the prior year comparable period, due to the previously mentioned items for the increase in gross ~~profit decline.~~profit. Gross margin decreased slightly during the six months ended June 30, 2021 compared with the prior year comparable period, primarily due to higher capitalized software amortization that was slightly offset by the previously mentioned revenue mix.

Income from operations and operating margin increased during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 compared with the prior year comparable periods, primarily due to lower ~~operating expenses driven by~~capitalized software costs and the cost reduction ~~initiatives. The increase was partially offset by a decline in gross profit.~~initiatives implemented throughout 2020.

The ~~EPSi~~^TM ~~operating segment is included in the~~ “Unallocated Amounts” category consists of transfer pricing revenues and as ~~it does not meet the requirements to be a reportable segment nor the criteria to be aggregated into the two reportable segments.~~of January 1, 2021 also includes certain corporate-related expenses.

	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended June 30,									Six Months Ended June 30,
(In thousands, except percentages)	2020			2019			% Change			2020			2019			% Change			2021			2020			% Change			2021			2020			% Change
Revenue	$	6,745		$	9,873			(31.7	%)	$	24,731		$	27,797			(11.0	%)	$	(4,294	)	$	(2,293	)		(87.3	%)	$	(8,672	)	$	(4,692	)		(84.8	%)
Gross profit	$	5,150		$	6,517			(21.0	%)	$	17,042		$	18,881			(9.7	%)	$	0		$	0		NM			$	0		$	0		NM
Gross margin %		76.4	%		66.0	%					68.9	%		67.9	%					0.0	%		0.0	%					0.0	%		0.0	%
Income from operations	$	2,727		$	3,148			(13.4	%)	$	8,594		$	10,940			(21.4	%)
Loss from operations																			$	(4,447	)	$	0		NM			$	(9,094	)	$	0		NM
Operating margin %		40.4	%		31.9	%					34.7	%		39.4	%					103.6	%		0.0	%					104.9	%		0.0	%

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Revenue decreased during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the prior year comparable periods, primarily due to ~~a decrease~~an increase in ~~maintenance and transaction-related~~transfer pricing revenues.

~~Gross profit decreased~~Loss from operations during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020, compared with the prior year comparable periods, primarily due to a decrease in maintenance revenues. Gross margin increased during the three~~2021 includes certain general and nine months ended September 30, 2020 compared with the prior years comparable periods, primarily due to the transfer price allocation for the two reportable segments related to increased transaction-related revenues.

Income from operations decreased during the three and nine months ended September 30, 2020, compared with the prior year comparable periods, primarily due to the decline in gross profit. The decrease was partially offset by the cost reduction initiatives.administrative corporate expenses.

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:

							% Change vs. September 30, 2020												% Change vs. June 30, 2021
(In millions)	As of September 30, 2020		As of December 31, 2019		As of September 30, 2019		December 31, 2019			September 30, 2019			As of June 30, 2021		As of December 31, 2020		As of June 30, 2020		December 31, 2020			June 30, 2020
Software delivery, support and maintenance	$	2,434	$	2,519	$	2,550		(3.4	%)		(4.5	%)	$	2,038	$	2,153	$	2,234		(5.3	%)		(8.8	%)
Client services		1,949		1,848		1,359		5.5	%		43.4	%		1,825		1,918		1,898		(4.8	%)		(3.8	%)
Total contract backlog	$	4,383	$	4,367	$	3,909		0.4	%		12.1	%	$	3,863	$	4,071	$	4,132		(5.1	%)		(6.5	%)

Total contract backlog as of ~~September~~June 30, ~~2020 increased~~2021 decreased compared with December 31, ~~2019~~2020 and ~~September~~June 30, ~~2019.~~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. Our liquidity was influenced by the COVID-19 pandemic during the nine months ended September~~parties, and divestitures. As of June 30, ~~2020. We increased cash on hand through additional credit facility borrowings to provide financial flexibility and enhance~~2021, our ~~ability to address potential future uncertainties regarding the impact of the COVID-19 pandemic. Our~~ principal sources of liquidity consisted of cash and cash equivalents of ~~$225~~$231 million and available borrowing capacity of ~~$299~~$649 million under our ~~revolving credit facility as of September 30, 2020.~~Revolving Facility. The change in our cash and cash equivalents balance is reflective of the following:

~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Net cash provided by operating activities – continuing operations increased during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 compared with the prior year comparable period. ~~Non-cash adjustments~~The increase in net income (loss) for the six months ended June 30, 2021 reflects cost savings related to ~~net loss decreased primarily~~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 distribution received from our third-party cost method investments and lower interest expense, due to the ~~sale~~repayment of ~~a third-party equity-method investment, a decrease~~ the 1.25% Cash Convertible Senior Notes and the senior secured credit facility in ~~stock-based compensation expenses~~the third and ~~a decrease in asset impairment charges.~~ fourth quarters of 2020, respectively. Net ~~loss~~income (loss) and ~~Cash~~cash impact of changes in operating assets and liabilities for the ~~nine~~six months ended ~~September~~June 30, 2020 ~~and 2019~~ reflects ~~$89~~$73 million of payments ~~and the $145 million settlement~~ related to the ~~DOJ Settlement Agreements, respectively.~~settlement agreements with the DOJ. The ~~decrease~~increase in ~~Cash~~cash impact of changes in operating assets and liabilities for the six months ended June 30, 2021 was partially offset by working capital changes. Non-cash adjustments to net income (loss) increased primarily 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 increase was partially offset by lower depreciation and amortization expenses and a lower non-cash lease expense.

Net cash ~~used in~~provided by operating activities – discontinued operations decreased during the ~~nine~~six months ended ~~September~~June 30, ~~2019 reflects an advance income~~2021 compared with the prior year comparable period primarily due to the tax payment ~~related~~relating to the gain ~~realized upon~~from the sale of ~~our investment in Netsmart~~CarePort on December 31, ~~2018.~~2020. Additionally, both EPSi and CarePort generated cash from operations during the six months ended June 30, 2020.

	Nine Months Ended September 30,									Six Months Ended June 30,
(In thousands)	2020			2019			$ Change			2021			2020			$ Change
Capital expenditures	$	(7,896	)	$	(13,475	)	$	5,579		$	(3,094	)	$	(4,778	)	$	1,684
Capitalized software		(78,032	)		(86,190	)		8,158			(35,472	)		(50,912	)		15,440
Cash paid for business acquisitions, net of cash acquired		0			(23,443	)		23,443
Sales (purchases) of equity securities, other investments and related intangible assets, net		20,996			(7,191	)		28,187
Other proceeds from investing activities		0			14			(14	)
Cash received from sale of businesses, net of cash divested											952			0			952
Purchases of equity securities, other investments and related intangible assets, net											(221	)		(3,823	)		3,602
Sale of other investments											1,919			23,254			(21,335	)
Distributions received from investments											1,371			0			1,371
Net cash used in investing activities - continuing operations											(34,545	)		(36,259	)		1,714
Net cash used in investing activities - discontinued operations											0			(4,447	)		4,447
Net cash used in investing activities	$	(64,932	)	$	(130,285	)	$	65,353		$	(34,545	)	$	(40,706	)	$	6,161

~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Net cash used in investing activities – continuing operations decreased during the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the prior year comparable period. The decrease in the use of cash during ~~2020~~2021 was primarily due to ~~the absence of an acquisition,~~a decrease in capitalized software costs and a decrease in the sale of ~~a third-party equity-method investment and decreased~~investments.

Net cash used in investing activities – discontinued operations during the six months ended June 30, 2020 reflects spending for capital expenditures and capitalized software ~~costs.~~costs related to the EPSi and CarePort businesses that were sold during the fourth quarter of 2020.

	Nine Months Ended September 30,									Six Months Ended June 30,
(In thousands)	2020			2019			$ Change			2021			2020			$ Change
Taxes paid related to net share settlement of equity awards	$	(5,589	)	$	(6,762	)	$	1,173		$	(13,887	)	$	(5,533	)	$	(8,354	)
Payments for issuance costs on 0.875% Convertible Senior Notes											0			(758	)		758
Repayment of Convertible Senior Notes		(352,361	)		0			(352,361	)		0			(7,361	)		7,361
Payments for issuance costs on 0.875% Convertible Senior Notes		(758	)		0			(758	)
Credit facility payments		(175,000	)		(15,000	)		(160,000	)		0			(167,500	)		167,500
Credit facility borrowings, net of issuance costs		673,625			249,241			424,384			250,000			285,000			(35,000	)
Repurchase of common stock		(55,282	)		(102,160	)		46,878			(108,953	)		(9,714	)		(99,239	)
Repurchase of unsettled common stock		0			(9,301	)		9,301
Accelerated share repurchase program											(200,000	)		0			(200,000	)
Payment of acquisition and other financing obligations		(4,369	)		(11,581	)		7,212			(2,400	)		(4,369	)		1,969
Purchases of subsidiary shares owned by non-controlling interest		0			(54,064	)		54,064
Net cash provided by financing activities	$	80,266		$	50,373		$	29,893
Net cash (used in) provided by financing activities										$	(75,240	)	$	89,765		$	(165,005	)

~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Net cash ~~provided by~~used in financing activities increased during the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, compared with the prior year comparable period. The increase was primarily a result of ~~higher net~~the payment made to the accelerated share purchase program, the repurchase of common stock on the open market and lower credit facility borrowings ~~to repay~~in 2021. The increase was partially offset by the ~~1.25% Notes~~credit facility payments made in full, as well as to increase cash on hand and provide financial flexibility to enhance our ability to address potential future uncertainties regarding the impact of the COVID-19 pandemic. During the nine months ended September 30, 2020, we also repurchased a lower amount of our common stock, increased payments on debt instruments and had an absence of minority interest purchases compared with the nine months ended September 30, 2019.2020.

The following table summarizes ~~our required minimum~~ future payments under the 0.875% Convertible Senior Notes and ~~the Senior Secured Credit~~Revolving Facility as of ~~September~~June 30, ~~2020.~~2021:

(In thousands)	Total		Remainder of 2020		2021		2022		2023		2024		Thereafter		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	$	207,911	$	0	$	0	$	0	$	0	$	0	$	207,911
Senior Secured Credit Facility ⁽²⁾		910,000		26,500		30,000		37,500		816,000		0		0
Revolving Facility ⁽²⁾																250,000		0		0		250,000		0		0		0
Total principal payments		1,117,911		26,500		30,000		37,500		816,000		0		207,911		457,911		0		0		250,000		0		0		207,911
Interest payments:
0.875% Convertible Senior Notes		11,824		0		1,819		1,819		1,819		1,819		4,548		10,915		910		1,819		1,819		1,819		1,819		2,729
Senior Secured Credit Facility ^{(2) (3)}		47,826		5,002		19,471		18,787		4,566		0		0
Revolving Facility ^{(2) (3)}																11,470		3,277		6,554		1,639		0		0		0
Total interest payments		59,650		5,002		21,290		20,606		6,385		1,819		4,548		22,385		4,187		8,373		3,458		1,819		1,819		2,729
Total future debt payments	$	1,177,561	$	31,502	$	51,290	$	58,106	$	822,385	$	1,819	$	212,459	$	480,296	$	4,187	$	8,373	$	253,458	$	1,819	$	1,819	$	210,640

~~Research~~Our total investment in research and development ~~investment~~ is expected to decline ~~for the remainder of 2020~~in 2021 as the Company ~~is implementing cost reduction initiatives. Total~~continues to benefit from margin improvement initiatives that commenced in 2020. Our total spending consists of research and development costs directly recorded to expense, which are offset by the capitalization of eligible development costs.

We believe that our cash and cash equivalents of ~~$225~~$231 million as of ~~September~~June 30, ~~2020,~~2021, our future cash flows, ~~expected proceeds from dispositions,~~ our borrowing capacity under our ~~senior secured revolving facility (the “Revolving Facility”)~~Revolving Facility and access to capital markets, taken together, provide adequate resources to 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 and the repurchase of our common stock under our ~~2018~~ stock repurchase ~~program, each~~programs, 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.

We have various contractual obligations, which are recorded as liabilities in our consolidated financial statements. During the ~~nine~~six months ended ~~September~~June 30, ~~2020, in~~2021, there were no material changes, outside of the ordinary course of business, we amended or renewed multi-year service agreements with a third-party software vendor, which resulted in increases of approximately $14.4 million, $18.0 million, $13.3 million, $8.2 million, $4.5 million, and $1.9 million to our ~~future~~contractual obligations and purchase ~~obligation amounts for the years ending December 31, 2020, 2021, 2022, 2023, 2024, and 2025, 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 ~~nine~~six months ended ~~September~~June 30, ~~2020.~~

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 ~~which were~~are designed to, ~~a level of reasonable assurance,~~and were effective as of ~~September~~June 30, ~~2020. In~~2021 to, provide assurance at a reasonable level that the ~~course of this evaluation,~~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, ~~considered the fact that, on October 15, 2020, the Company~~including our chief executive officer and chief financial officer, as appropriate, to allow for timely filed a Form 8-K reporting the sale of our EPSi business, as further discussed in Note 17, “Subsequent Events,” of the Notes to Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q. The Form 8-K did not include thedecisions regarding required ~~pro forma financial information reflecting the sale of our EPSi business, which was subsequently included on a Form 8-K/A filed on October 30, 2020.~~disclosure.

~~We have implemented, and continue to refine, internal controls related to the new credit loss accounting standard which we adopted on January 1, 2020.~~ There have been no ~~other~~ changes in our internal control over financial reporting during the ~~three months~~quarter ended ~~September~~June 30, ~~2020,~~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 14, “Contingencies,” of the Notes to Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.

~~Except as follows, there~~There have been no material changes during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 from the risk factors as previously disclosed in our Form 10-K.

~~The novel coronavirus (COVID-19) pandemic has and could continue to materially and adversely impact the business, results of operations, financial condition, liquidity and cash flowsof us and our clients.~~

The COVID-19 pandemic and efforts to control its spread is having a significant impact on our operations and the operations of our healthcare clients. The magnitude and duration of the disruption and resulting decline in business activity will largely depend on future developments which are highly uncertain and cannot be predicted. Because our hospital and other health care provider clients have understandably prioritized their resources towards the COVID-19 outbreak, we expect that our business will continue to be adversely affected, including by negatively impacting the demand for our solutions (including the timeframes for the implementation of our solutions) and the timing of the payment for our solutions, while restricting our sales, marketing, and other important business activities. For example, the COVID-19 pandemic negatively impacted revenue for the three and nine months ended September 30, 2020, as we saw delays in deals with upfront software revenue and professional services implementations across our inpatient and outpatient base. We are unable to predict the continuing magnitude of any such affect.

As a result of the COVID-19 pandemic, certain industry events that we sponsor or at which we present and certain client events have been canceled, postponed or moved to virtual-only experiences, and we have instituted a work-from-home policy for most of our employees and have significantly restricted employee travel. In addition, concerns over the economic impact of the COVID-19 pandemic have also caused extreme volatility in financial and other capital markets which has adversely impacted and may continue to adversely impact our stock price and our ability to access capital markets. The extent to which the COVID-19 pandemic will continue to impact our results of operations and financial condition will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the duration and severity of the COVID-19 pandemic, resurgences or additional “waves” of outbreaks of COVID-19 in various jurisdictions, the impact of COVID-19 on economic activity, and the actions taken by health authorities and policy makers to contain its impacts on public health and the global economy. The COVID-19 pandemic may also have the effect of heightening many of the other risks described in the other “Risk Factors” included in our Form 10-K, such as those relating to our products and services, sales cycles and implementation schedules, the retention of key employees, financial performance and debt obligations.

On ~~August 2, 2018,~~June 23, 2021, the Company issued 33,321 shares of common stock to a commercial partner pursuant to the terms of, and in exchange for entering, an existing commercial agreement between the parties. The shares of common stock have been offered and sold pursuant to Section 4(a)(2) of the Securities Act of 1933.

On November 18, 2020, we announced that our Board of Directors approved a stock repurchase program (the “2020 Program”) under which we may repurchase up to ~~$250~~$300 million of our common stock through December 31, 2021. The 2020 Program replaced a previous program. During the three months ended June 30, 2021, we repurchased 5.6 million shares of our common stock under the 2020 Program. This is inclusive of the shares we received at final settlement of the accelerated share repurchase program we entered into on November 30, 2020, described below.

On 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 $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 June 30, 2021, we repurchased 11.5 million shares of our common stock under the 2021 Program. This is inclusive of the shares we received at initial settlement of the accelerated share repurchase program entered into on June 14, 2021, described below.

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 ~~purchase~~repurchase program may be accelerated, suspended, delayed or discontinued at any time.

The following table ~~summarizes~~summarize the stock repurchase activity during the three months ended ~~September~~June 30, ~~2020~~2021 and the approximate dollar value of shares that may yet be purchased under our stock repurchase program:

Lisa Khorey will no longer serve as the Company’s Executive Vice President, Chief Client Delivery Officer, effective August 5, 2021 (the “Effective Date”).

On the Effective Date, the Company and Ms. Khorey entered into an amendment (the “Amendment”) to Ms. Khorey’s employment agreement with the Company, effective as of November 1, 2016 (the “Employment Agreement”). Pursuant to the Amendment, during a transition period from the Effective Date through March 1, 2022, Ms. Khorey will serve in the role of Executive Consultant to the Company on a part-time basis. If the Company does not elect to renew Ms. Khorey’s employment upon the expiration of the transition period, such nonrenewal will constitute a termination of Ms. Khorey’s employment by the Company without Cause (as defined in the Employment Agreement), and Ms. Khorey will be eligible for severance benefits in accordance with the terms of the Employment Agreement. During the transition period, Ms. Khorey will not be eligible for a performance bonus for calendar year 2021 and Ms. Khorey’s base salary will be $103,400 per annum, except that her base salary in effect prior to the Effective Date will apply for purposes of determining any severance benefits payable to Ms. Khorey following a termination of her employment. The foregoing summary is qualified in its entirety by reference to the complete text of the Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 10-Q and is incorporated by reference herein.

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	2928
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4138
Item 4.	Controls and Procedures	4138
PART II. OTHER INFORMATION		4238
Item 1.	Legal Proceedings	4238
Item 1A.	Risk Factors	4238
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4238
Item 5.	Other Information	40
Item 6.	Exhibits	4340
SIGNATURES		4441

(In thousands)	Contingent Consideration			1.25% Notes Call Spread Overlay
Balance at December 31, 2019	$	19,531		$	(101	)
Additions		773			0
Payments		(4,189	)		0
Fair value adjustments		0			101
Balance at September 30, 2020	$	16,115		$	0

(In thousands)	Core Clinical and Financial Solutions			Data, Analytics and Care Coordination		Unallocated Amounts ⁽²⁾			Total
Balance as of December 31, 2019		734,883			552,471		74,663			1,362,017
Foreign exchange translation		(157	)		0		0			(157	)
Reclassification to assets held for sale ⁽¹⁾		0			0		(74,663	)		(74,663	)
Balance as of September 30, 2020	$	734,726		$	552,471	$	0		$	1,287,197


☒	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, 2020
(In thousands)	Core Clinical and Financial Solutions		Data, Analytics and Care Coordination		Unallocated Amounts		Total
Software delivery, support and maintenance	$	160,858	$	85,231	$	4,458	$	250,547
Client services		145,593		3,603		2,287		151,483
Total revenue	$	306,451	$	88,834	$	6,745	$	402,030

	Six Months Ended June 30, 2020
(In thousands)	Core Clinical and Financial Solutions		Data, Analytics and Care Coordination		Unallocated Amounts			Total
Software delivery, support and maintenance	$	341,301	$	119,122	$	(4,692	)	$	455,731
Client services		290,130		4,807		0			294,937
Total revenue	$	631,431	$	123,929	$	(4,692	)	$	750,668

(In thousands)	September 30, 2020
Assets held for sale:
Current assets:
Accounts receivable, net of allowance of $416	$	10,088
Contract assets		4,147
Prepaid expenses and other current assets		956
Total current assets classified as held for sale		15,191
Fixed assets, net		254
Software development costs, net		10,977
Goodwill		74,663
Contract assets - long-term		2,765
Right-of-use assets - operating leases		932
Total assets held for sale	$	104,782

Liabilities related to assets held for sale:
Current liabilities:
Accrued expenses	$	964
Accrued compensation and benefits		1,714
Deferred revenue		13,400
Current operating lease liabilities		371
Total current liabilities classified as held for sale		16,449
Deferred revenue		429
Long-term operating lease liabilities		601
Total liabilities related to assets held for sale	$	17,479

(In thousands)	Foreign Currency Translation Adjustments			Unrealized Net Gains on Foreign Exchange Contracts			Total
Balance as of December 31, 2019⁽¹⁾	$	(4,392	)	$	0		$	(4,392	)
Other comprehensive loss (income) before reclassifications		(611	)		1,334			723
Net losses (gains) reclassified from accumulated other comprehensive loss		0			(132	)		(132	)
Net other comprehensive (loss) income		(611	)		1,202			591
Balance as of September 30, 2020⁽²⁾	$	(5,003	)	$	1,202		$	(3,801	)

(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 income (loss) before reclassifications		520			90			610
Net (gains) losses reclassified from accumulated other comprehensive loss		0			(1,209	)		(1,209	)
Net other comprehensive income (loss)		520			(1,119	)		(599	)
Balance as of June 30, 2021	$	(2,437	)	$	0		$	(2,437	)

(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		Programs		Programs
07/01/20—07/31/20		0	$	0.00		0	$	92,116
08/01/20—08/31/20		3,200	$	9.22		3,200	$	62,614
09/01/20—09/30/20		1,800	$	8.87		1,800	$	46,647
		5,000	$	9.09		5,000

Exhibit Number		Exhibit Description	Filed Herewith	Furnished Herewith
~~2.1~~		Asset Purchase Agreement, dated as of July 30, 2020, by an among Allscripts Healthcare Solutions, Inc., a Delaware corporation, Allscripts Healthcare, LLC, a North Carolina limited liability company, Allscripts Software, LLC, a Delaware limited liability company, Strata Decision Technology LLC, an Illinois limited liability company, and, solely for purposes of Article VI and Section 12.18 thereof, Roper Technologies, Inc. (incorporated by reference to Exhibit 2.1 to Form 8-K filed with the SEC on August 3, 2020)

~~2.2~~		Purchase Agreement, dated as of October 12, 2020, by and among Allscripts Healthcare, LLC, a North Carolina limited liability company, Carbonite Buyer, Inc., a Delaware corporation, and, solely for purposes of Section 9.13(f) thereof, WellSky Corporation, a Delaware corporation (incorporated by reference to Exhibit 2.1 to Form 8-K filed with the SEC on October 15, 2020)

10.1	†	First Amendment to the Employment Agreement between Allscripts Healthcare Solutions, Inc. and ~~Richard Poulton (incorporated by reference by Exhibit 10.1 to Form 8-K filed with the SEC on August 3, 2020)~~Lisa Khorey	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		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~~June 30, ~~2020,~~2021, formatted in Inline XBRL and included in Exhibit 101.	X

ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.

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

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company