Discontinued Operations | 15. Discontinued Operations Hospitals and Large Physician Practices Discontinued Operation On March 2, 2022, we entered into the Harris Purchase Agreement to sell substantially all of the assets of the Hospitals and Large Physician Practices Business. The Hospitals and Large Physician Practices Business sale represents a strategic shift that will have a major effect on our operations and financial results. Therefore, as of March 31, 2022, we reported the Hospitals and Large Physician Practices Business as discontinued operations. On May 2, 2022, we completed the sale of the Hospitals and Large Physician Practices Business, which is further discussed in Note 18, “Subsequent Events.” The following table summarizes the major classes of assets and liabilities of the Hospitals and Large Physician Practices Business as reported on the consolidated balance sheets as of March 31, 2022 and December 31, 2021: (In thousands) March 31, 2022 December 31, 2021 Carrying amounts of major classes of assets associated with Hospitals and Large Physician Practices included as part of discontinued operations: Cash and cash equivalents $ 67,671 $ 55,834 Restricted cash 847 861 Accounts receivable, net of allowance of $ 18,045 and $ 16,584 as of March 31, 2022 and December 31, 2021, respectively 200,407 155,447 Contract assets, net of allowance of $ 492 as of March 31, 2022 and December 31, 2021 68,786 61,382 Prepaid expenses and other current assets 63,310 58,431 Total current assets 401,021 331,955 Fixed assets, net 33,686 38,083 Software development costs, net 91,810 97,416 Intangible assets, net 77,997 86,240 Goodwill 467,725 467,871 Deferred taxes, net 8,393 6,607 Contract assets - long-term, net of allowance of $ 739 as of March 31, 2022 and December 31, 2021 31,934 28,623 Right-of-use assets - operating leases 48,089 50,585 Other assets 14,092 17,731 Total assets (1) $ 1,174,747 $ 1,125,111 Carrying amounts of major classes of liabilities associated with Hospitals and Large Physician Practices included as part of discontinued operations: Accounts payable $ 21,708 $ 11,555 Accrued expenses 45,852 38,007 Accrued compensation and benefits 37,506 61,167 Deferred revenue 274,541 205,152 Current operating lease liabilities 13,613 13,466 Total current liabilities 393,220 329,347 Deferred revenue long-term 475 2,568 Long-term operating lease liabilities 44,952 48,068 Other liabilities 341 270 Total liabilities (1) $ 438,988 $ 380,253 (1) The total assets and total liabilities in the above table for the three months ended March 31, 2022 and for the year ended December 31, 2021, are presented in the balance sheet as of March 31, 2022 as Assets held for sale and Liabilities related to assets held for sale. The following table summarizes the major income and expense line items of the Hospitals and Large Physician Practices Business as reported in the consolidated statements of operations for the three months ended March 31, 2022 and 2021. Three Months Ended March 31, (In thousands) 2022 2021 Major income and expense line items related to Hospitals and Large Physician Practices: Revenue: Provider $ 214,230 $ 234,700 Total revenue 214,230 234,700 Cost of revenue: Provider 143,692 147,572 Total cost of revenue 143,692 147,572 Gross profit 70,538 87,128 Selling, general and administrative expenses 48,749 49,545 Research and development 23,856 28,513 Amortization of intangible assets 3,450 3,460 (Loss) income from discontinued operations for Hospitals and Large Physician Practices ( 5,517 ) 5,610 Other income, net 496 239 (Loss) income from discontinued operations for Hospitals and Large Physician Practices before income taxes ( 5,021 ) 5,849 Income tax benefit (provision) 9,407 ( 1,556 ) Income from discontinued operations, net of tax for Hospitals and Large Physician Practices $ 4,386 $ 4,293 EPSi and CarePort Discontinued Operation During 2020, we implemented a strategic initiative to sell two of our businesses, EPSi and CarePort. Since both businesses were part of the same strategic initiative and were sold within the same period, the combined sale of EPSi and CarePort represented a strategic shift that had a major effect on our operations and financial results. As of December 31, 2020, these businesses were reported together as discontinued operations. On October 15, 2020, we completed the sale of our EPSi business. Prior to the sale, EPSi was part of the “Unallocated Amounts” category as it did not meet the requirements to be a reportable segment nor the criteria to be aggregated into our two reportable segments. On its own, the divestiture of the EPSi business did not represent a strategic shift that had a major effect on our operations and financial results. However, the combined sale of EPSi and CarePort represented a strategic shift that had a major effect on our operations and financial results. Therefore, EPSi was treated as a discontinued operation. On December 31, 2020, we completed the sale of our CarePort business. Prior to the sale, CarePort was part of the former Data, Analytics and Care Coordination reportable segment. On its own, the divestiture of the CarePort business represented a strategic shift that had a major effect on our operations and financial results. The following table summarizes the major income and expense line items of EPSi and CarePort as reported in the consolidated statements of operations for the three months ended March 31, 2021. The activity during the three months ended March 31, 2021 relates to certain adjustments made in connection with the sale of EPSi and CarePort, primarily relating to net working capital adjustments that impacted the gain on the sale of the discontinued operations. Three Months Ended (In thousands) March 31, 2021 Major income and expense line items related to EPSi and CarePort: Revenue: Provider $ ( 368 ) Total revenue ( 368 ) Cost of revenue: Provider ( 364 ) Total cost of revenue ( 364 ) Gross loss ( 4 ) Selling, general and administrative expenses 65 Research and development ( 40 ) Loss from discontinued operations for EPSi and CarePort ( 29 ) Gain on sale of discontinued operations 647 Income from discontinued operations for EPSi and CarePort before income taxes 618 Income tax provision ( 154 ) Income from discontinued operations, net of tax for EPSi and CarePort $ 464 |