SEC Info - Allscripts Healthcare Solutions, Inc.

Revenue related to deferred revenue balance at beginning of period

i 105,366

i 119,545

i 118,300

i 138,279

Revenue related to new performance obligations satisfied during the period

i 216,580

i 195,308

i 192,658

i 182,690

Revenue recognized under "right-to-invoice" expedient

i 58,059

i 54,082

i 54,313

i 65,108

Reimbursed travel expenses, shipping and other revenue

i 1,359

i 369

i 347

i 337

Total revenue

i 381,364

i 369,304

i 365,618

i 386,414

(In thousands)

Three Months

Ended

March 31, 2019

Three Months

Ended

June 30, 2019

Three Months

Ended

September 30, 2019

Three Months

Ended

Revenue related to deferred revenue balance at beginning of period

i 93,602

i 113,288

i 116,812

i 136,460

Revenue related to new performance obligations satisfied during the period

i 248,126

i 233,293

i 227,954

i 214,952

Revenue recognized under "right-to-invoice" expedient

i 55,923

i 62,245

i 61,814

i 60,826

Reimbursed travel expenses, shipping and other revenue

i 1,467

i 2,057

i 1,700

i 2,092

Total revenue

i 399,118

i 410,883

i 408,280

i 414,330

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 $ i 4.1 billion as of December 31, 2020, of which we expect to recognize approximately i 35% over the next 12 months, and the remaining i 65% thereafter.

Transaction price and allocation

Our contracts with customers often include multiple distinct performance obligations such as software licenses, software support and maintenance, hardware, client services, private cloud hosting and Software-as-a-Service. We adjust the transaction price on a contract-by-contract basis for (i) the effect of the time value of money when a contract has a significant financing component and/or (ii) customer discounts and incentives deemed to be variable consideration. We then allocate the contract transaction price to the distinct performance obligations in the contract. Such allocation is based on the stand-alone selling price (“SSP”) of each distinct performance obligation. The transaction price allocated to each distinct performance obligation is adjusted for discounts offered to customers that are outside of the Company’s established sufficiently narrow ranges for distinct performance obligations’ SSPs on a relative SSP basis.

We use observable stand-alone pricing to determine the SSP for each distinct performance obligation. Such observable SSPs are based upon our listed sales prices and consider discounts offered to customers. In instances where SSP is not directly observable because we do not sell the product or service separately, we determine the SSP through the residual approach or cost-plus margin models using information that includes market conditions and other observable inputs. Such instances primarily relate to sales of new products and service offerings and our acute suite of software licenses. Our acute suite of software licenses is sold to a diverse set of customers for a broad range of amounts and, therefore, SSP is not discernible from past transactions due to the high variability of selling prices.

Our products and services are generally not sold with a right of return, except for certain hardware sales, which are not material to our consolidated revenue. We may provide credits or incentives on a contract-by-contract basis which are accounted for either as a material right or as variable consideration, respectively, when allocating the transaction price. Such credits and incentives have historically not been significant. We do not provide additional warranties to clients above and beyond warranties that the solutions purchased will perform in accordance with the agreed-upon specifications. On rare occasions, when additional warranties are granted, we evaluate on a case-by-case basis whether the additional warranty granted represents a separate performance obligation.

Accounting Policy Elections and Practical Expedients

We have elected to exclude from the measurement of the transaction price all taxes (e.g., sales, use, value-added) assessed by government authorities and collected from a customer. Therefore, revenue is recognized net of such taxes.

We contract with customers to deliver and ship tangible products within the normal course of business, such as computer hardware. The control of the products transfers to the customer when the product reaches the shipper based on free on board (FOB) shipping clauses in these situations. We have elected to use the practical expedient allowed under ASC 606 to account for shipping and handling activities that occur after the customer has obtained control of a promised good as fulfillment costs rather than as an additional promised service and, therefore, we do not allocate a portion of the transaction price to a shipping service obligation. We record as revenue any amounts billed to customers for shipping and handling costs and record as cost of revenue the actual shipping costs incurred.

Our standard contract terms allow for the reimbursement by a customer for certain travel expenses necessary to provide on-site services to the customer, such as implementation and training. Such reimbursed travel expenses are reported on a gross basis. Since such reimbursed travel expenses do not represent a distinct good or service nor incremental value provided to a customer, a performance obligation is deemed not to exist. In certain situations, however, when the allowable reimbursable expenses amount is capped, we believe that such cap represents the most likely amount of variable consideration and the capped amount is included in the total contract transaction price.

In accordance with ASC 606, if an entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, the entity may recognize revenue in the amount to which the entity has a right to invoice (“right-to-invoice” practical expedient). We have elected to utilize this expedient as it relates to transaction-based services (such as revenue cycle management) and electronic data interchange transactions.

Revenue Recognition

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. The following table summarizes the pattern of revenue recognition for our most significant performance obligations:

Performance Obligation	Revenue Type	Recurring or Non-recurring Nature	Revenue Recognition Pattern	Measure of progress
Support and maintenance ("SMA")	Software delivery, support and maintenance	Recurring	Over time	Output method (time elapsed) – revenue is recognized ratably over the contract term
Software as a service ("SaaS")	Software delivery, support and maintenance	Recurring	Over time	Output method (time elapsed) – revenue is recognized ratably over the contract term
Private cloud hosting	Client services	Recurring	Over time	Output method (time elapsed) – revenue is recognized ratably over the contract term
Client/Education services	Client services	Non-recurring	Over time	Input method (cost to cost) – revenue is recognized proportionally over the service implementation based on hours
Outsourcing services	Client services	Recurring	Over time	Input method (cost to cost) – revenue is recognized proportionally over the outsourcing period
Payerpath (transaction volume)	Software delivery, support and maintenance	Recurring	Over time	Output method ("right-to-invoice" practical expedient) – value transferred to the customer is reflected on invoicing.
Software licenses	Software delivery, support and maintenance	Non-recurring	Point in time	Upon electronic delivery
Hardware	Software delivery, support and maintenance	Non-recurring	Point in time	Upon shipment

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

SMA, SaaS and private cloud hosting performance obligations are deemed to be performance obligations satisfied evenly over time as these are fulfilled as stand-ready obligations to perform. Client services, such as those relating to implementation, consulting, training or education, are generally not fulfilled evenly over the contract period, but rather over a shorter timeline where work effort can increase, or decline based upon stages of the project work effort. These client services are typically quoted to a customer as a fixed fee amount that covers the implementation effort. Delivery progress for these services is measured by establishing an approved cost budget with labor hour inputs utilized to gauge percentage of completion of the work effort. Therefore, revenue for our client, education and outsourcing services is recognized proportionally with the progress of the implementation work effort.

Payerpath transaction volume and other transaction-based service obligations, such as revenue cycle management services, are fulfilled over time but are not provided evenly over the contract period and reliable inputs are not available to track progress of completion. We determined that value is provided to the customer throughout the contract period and the pricing charged to the customer varies on a monthly basis, based upon the volume of the customer’s transactions processed in that respective period. The invoiced amount to the customer represents this value and, accordingly, the practical expedient to recognize revenue based upon invoicing is most appropriate.

We considered the specific implementation guidance for accounting for licenses of intellectual property (“IP”) to determine if point in time or over time recognition was more appropriate. The first step in the licensing framework is to determine whether the license is distinct or combined with other goods and services. For most of our software licensing products, the licenses are distinct, with the exception of one of our product offerings under our CareInMotion^TM platform, which requires a significant client service customization. In all instances, we determined that we are offering functional IP as compared with a symbolic IP. Functional IP is a right to use IP because the IP has standalone functionality and a customer can use the IP as it exists at a point in time.

Disaggregation of Revenue

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. i The below tables summarize revenue by type and nature of revenue stream as well as by our reportable segments:

Year Ended December 31,

(In thousands)

2020

2019

2018

Revenue:

Recurring revenue

i 1,222,731

i 1,278,456

i 1,313,281

Non-recurring revenue

i 279,969

i 354,155

i 304,560

Total revenue

i 1,502,700

i 1,632,611

i 1,617,841

Year Ended December 31, 2020

(In thousands)

Core Clinical and Financial Solutions

Data, Analytics and Care Coordination

Unallocated Amounts

Total

Software delivery, support and maintenance

i 676,655

i 250,877

( i 12,870

)

i 914,662

Client services

i 577,594

i 10,444

i 0

i 588,038

Total revenue

i 1,254,249

i 261,321

( i 12,870

)

i 1,502,700

Year Ended December 31, 2019

(In thousands)

Core Clinical and Financial Solutions

Data, Analytics and Care Coordination

Unallocated Amounts

Total

Software delivery, support and maintenance

i 761,836

i 249,561

( i 7,202

)

i 1,004,195

Client services

i 615,311

i 13,103

i 2

i 628,416

Total revenue

i 1,377,147

i 262,664

( i 7,200

)

i 1,632,611

Year Ended December 31, 2018

(In thousands)

Core Clinical and Financial Solutions

Data, Analytics and Care Coordination

Unallocated Amounts

Total

Software delivery, support and maintenance

i 791,417

i 237,320

( i 17,113

)

i 1,011,624

Client services

i 588,082

i 9,398

i 8,737

i 606,217

Total revenue

i 1,379,499

i 246,718

( i 8,376

)

i 1,617,841

Contract Assets – Estimate of Credit Losses

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. 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 $ i 5.3 million as of January 1, 2020.

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 internal credit assessment, and business size. The pools were aligned with management’s review of financial performance. 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 review of financial performance. As of December 31, 2020, no other adjustments to the pools were 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 December 31, 2020 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
Balance at January 1, 2020	$	i 5,341
Current period provision		i 0
Balance at December 31, 2020	$	i 5,341
Less: Contract assets, short-term		i 1,068
Total contract assets, long-term	$	i 4,273

3. Accounts Receivable

Trade Accounts Receivable – Estimate of Credit Losses

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 of ASU 2016-13 for trade accounts receivable was recorded as a debit to retained earnings of $ i 12.6 million as of January 1, 2020.

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 were aligned with management’s review of financial performance. 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 review of financial performance. As of December 31, 2020, no other adjustments to the pools were 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.

i /

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

(In thousands)	Total
Balance at January 1, 2020	$	i 33,256
Current period provision		i 8,726
Write-offs		( i 10,484	)
Recoveries		i 98
Balance at December 31, 2020	$	i 31,596

4. Leases

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 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 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 comprise of executory costs, which under the practical expedient allows for executory costs to be recorded as lease payments. Additionally, for certain equipment leases, we apply a portfolio approach to effectively record right-of-use assets and liabilities.

Our operating leases mainly include office leases and our finance leases include office and computer equipment leases. Our finance leases are not significant. Our leases have remaining lease terms up to i 8 years, some of which include options to extend the leases for up to i 5 years, which may include options to terminate the leases within i 1 year. i Operating costs associated with leased assets are as follows:

(In thousands)	Year Ended December 31,
	2020			2019
Operating lease cost ⁽¹⁾	$	i 25,394		$	i 27,235
Less: Sublease income		( i 1,121	)		( i 3,265	)
Total operating lease costs	$	i 24,273		$	i 23,970

⁽¹⁾	Operating lease costs are recognized on a straight-line basis and are included in Selling, general and administrative expenses within the consolidated statement of operations.

Supplemental information for operating leases is as follows:

(In thousands)	Year Ended December 31,
	2020		2019
Operating cash flows from operating leases	$	i 26,638	$	i 29,348
Right-of-use assets obtained in exchange for operating lease obligations	$	i 21,770	$	i 141,787

/ i

The balance sheet location and balances for operating leases are as follows:

(In thousands, except lease term and discount rate)	December 31, 2020			December 31, 2019
Right-of-use assets - operating leases	$	i 96,601		$	i 95,757
Current operating lease liabilities	$	i 22,264		$	i 22,328
Long-term operating lease liabilities	$	i 93,463		$	i 93,588
Weighted average remaining lease term (in years)		6			6
Weighted average discount rate		i 3.6	%		i 4.4	%

/ /

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 December 31, 2020.

	December 31, 2020
(In thousands)	Operating Leases
2021	$	i 26,090
2022		i 24,501
2023		i 22,752
2024		i 17,388
2025		i 14,927
Thereafter		i 22,069
Total lease liabilities		i 127,727
Less: Amount representing interest		( i 12,000	)
Less: Short-term lease liabilities		( i 22,264	)
Total long-term lease liabilities	$	i 93,463

5. Business Combinations and Divestitures

2020 Divestitures

On December 31, 2020, we completed the sale of our CarePort business to a subsidiary of WellSky Corp., a Delaware corporation (“WellSky”), pursuant to a purchase agreement (the “CarePort Purchase Agreement”) by which WellSky purchased substantially all of the assets of the CarePort business. The total consideration for CarePort was $ i 1.35 billion, which is subject to certain adjustments for liabilities assumed by WellSky and net working capital as described in the CarePort Purchase Agreement. We realized a pre-tax gain upon the sale of $ i 933.9 million, which is included in the Gain on sale of discontinued operations line in our consolidated statements of operations for the year ended December 31, 2020. The divestiture is being treated as a discontinued operation as of December 31, 2020. Refer to Note 18, “Discontinued Operations” for further details regarding the historical assets, liabilities and results of operations of CarePort. On December 31, 2020, we repaid $ i 161.0 million of the Term Loan (as defined below) as a result of the sale, which was a mandatory prepayment in accordance with the Second Amended Credit Agreement (as defined below).

On October 15, 2020, we completed the sale of our EPSi business to Strata Decision Technology LLC, an Illinois limited liability company (“Strata”), and Roper Technologies, Inc., a Delaware corporation pursuant to a purchase agreement (the “EPSi Purchase Agreement”) by which Strata purchased substantially all of the assets of the EPSi business. The total consideration for EPSi was $ i 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 realized a pre-tax gain upon the sale of $ i 222.6 million, which is included in the Gain on sale of discontinued operations line in our consolidated statements of operations for the year ended December 31, 2020. The divestiture is being treated as a discontinued operation as of December 31, 2020. Refer to Note 18, “Discontinued Operations” for further details regarding the historical assets, liabilities and results of operations of EPSi. On October 29, 2020, we repaid $ i 19.0 million of the Term Loan as a result of the sale, which was a mandatory prepayment in accordance with the Second Amended Credit Agreement.

2019 Business Combinations

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 on July 2, 2019. The total purchase price was $ i 19.7 million, consisting of an initial payment of $ i 11.7 million plus up to an aggregate of $ i 8.0 million pending the attainment certain milestones over the next 18 months. The contingent consideration of up to $8.0 million was valued at $ i 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. The business is included in our Data, Analytics and Care Coordination business segment.

We acquired the assets of a business engaged in the development, implementation, customization, marketing, licensing and sale of a specialty prescription drug platform including software that collects, saves and transmits information required to fill a prescription on June 10, 2019. The drug platform and software will enable healthcare providers, pharmacists and payors to digitally interact with one another to fill a prescription. The business is included in our Data, Analytics and Care Coordination business segment.

We acquired all of the outstanding minority interest in Pulse8, Inc. on March 1, 2019 for $ i 53.8 million (subject to adjustments for net working capital and a contingency holdback), plus up to a $ i 5.0 million earnout based upon revenue targets through 2019. Pulse8, Inc. is a healthcare analytics and technology company that provides business intelligence software solutions for health plans and at-risk providers to enable them to analyze their risk adjustment and quality management programs. 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 year ended December 31, 2019.

2018 Business Combinations and Divestitures

Acquisition of Health Grid

On i May 18, 2018, we acquired all the capital stock of Health Grid Holding Company, a Delaware corporation (“Health Grid”), for a total price of $ i 110.0 million, consisting of an initial payment of $ i 60.0 million plus up to an aggregate of $ i 50.0 million in future earnout payments based on Health Grid achieving certain revenue targets over the three years following the acquisition. At the time of closing, we pre-paid $ i 10.0 million of the earnout payments and the remaining contingent consideration of up to $ i 40.0 million was valued at $ i 23.9 million. Health Grid is a patient engagement solutions provider that assists independent providers, hospitals and health systems to improve patient interactions and satisfaction. We have integrated the capabilities of Health Grid into our FollowMyHealth^® platform. i The consideration paid for Health Grid is shown below:

	(In thousands)
Aggregate purchase price	$	i 60,000
First earnout payment paid by Allscripts		i 10,000
Fair value of contingent consideration payment		i 23,915
Closing purchase price adjustments		i 2,009
Total consideration paid for Health Grid	$	i 95,924

The allocation of the fair value of the consideration transferred as of the acquisition date of May 18, 2018 is shown in the table below. The allocation of purchase price was finalized in the fourth quarter of 2018. The goodwill is i not deductible for tax purposes.

	(In thousands)
Cash and cash equivalents	$	i 1,783
Accounts receivable, net		i 3,968
Prepaid expenses and other assets		i 185
Fixed assets		i 200
Intangible assets		i 41,000
Goodwill		i 53,953
Accounts payable and accrued expenses		( i 478	)
Deferred revenue		( i 700	)
Long-term deferred tax liability		( i 3,987	)
Net assets acquired	$	i 95,924

/ i

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

	Useful Life	Fair Value
Description	(In years)	(In thousands)
Customer Relationships	15	$	i 28,000
Technology	8		i 13,000
		$	i 41,000

We incurred $ i 0.5 million of acquisition costs which are included in selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 31, 2018. The results of operations of Health Grid were not material to our consolidated results of operations for the year ended December 31, 2018.

Acquisition of Practice Fusion, Inc.

On i February 13, 2018, we completed the acquisition of Practice Fusion, Inc., a Delaware corporation (“Practice Fusion”), for aggregate consideration of $ i 113.6 million paid in cash. Practice Fusion offers an affordable certified cloud-based electronic health record (“EHR”) for traditionally hard-to-reach small, independent physician practices. i The consideration paid for Practice Fusion is shown below:

	(In thousands)
Aggregate purchase price	$	i 100,000
Add: Net working capital surplus		i 373
Add: Closing cash		i 14,951
Less: Adjustment to assumed indebtedness		( i 1,684	)
Total consideration paid for Practice Fusion	$	i 113,640

The allocation of the fair value of the consideration transferred as of the acquisition date of February 13, 2018 is shown in the table below. The allocation of the purchase price was finalized during the fourth quarter of 2018. The goodwill is i not deductible for tax purposes.

	(In thousands)
Cash and cash equivalents	$	i 14,951
Accounts receivable, net		i 13,328
Prepaid expenses and other current assets		i 809
Fixed assets		i 1,764
Intangible assets		i 67,100
Goodwill		i 35,092
Other assets		i 42
Accounts payable and accrued expenses		( i 7,378	)
Deferred revenue		( i 2,400	)
Long-term deferred tax liability		( i 8,853	)
Other liabilities		( i 815	)
Net assets acquired	$	i 113,640

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

	Useful Life	Fair Value
Description	(In years)	(In thousands)
Customer Relationships - Physician Practices	15	$	i 29,000
Customer Relationships - Pharmaceutical Partners	20		i 19,400
Technology	8		i 14,800
Tradenames	10		i 3,900
		$	67,100

We incurred $ i 1.2 million of acquisition costs which are included in selling, general and administrative expenses in the consolidated statement of operations for the year ended December 31, 2018. The results of operations of Practice Fusion were not material to our consolidated results of operations for the year ended December 31, 2018.

Netsmart LLC Divestiture

On December 31, 2018, we sold all of the Class A Common Units of Netsmart LLC, a Delaware limited liability company (“Netsmart”), owned by the Company in exchange for $ i 566.6 million, plus a final settlement as determined following the closing pursuant to the terms of the sales agreement. Netsmart was originally acquired in April 2016, and we realized a pre-tax gain on sale of $ i 500.5 million, which is included on the Gain on sale of discontinued operations line in our consolidated statements of operations for the year ended December 31, 2018. The divestiture of Netsmart is being treated as a discontinued operation as of December 31, 2018. Refer to Note 18, “Discontinued Operations” for further details regarding the historical assets, liabilities and results of operations of Netsmart.

Other Acquisitions and Divestitures

On June 15, 2018, we acquired all the outstanding minority interests in a third party for $ i 6.9 million. We initially acquired a controlling interest in the third party in April 2015. Therefore, 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 year ended December 31, 2018.

On i April 2, 2018, we sold substantially all of the assets of the Allscripts’ business providing hospitals and health systems document and other content management software and services generally known as “OneContent” to Hyland Software, Inc., an Ohio corporation (“Hyland”). Allscripts acquired the OneContent business during the fourth quarter of 2017 through the acquisition of the EIS Business (as defined below). Certain assets of Allscripts relating to the OneContent business were excluded from the transaction and retained by Allscripts. In addition, Hyland assumed certain liabilities related to the OneContent business. The total consideration for the OneContent business was $ i 260 million, which was subject to certain adjustments for liabilities assumed by Hyland and net working capital. We realized a pre-tax gain upon sale of $ i 177.9 million which is included in the Gain on sales of businesses, net line in our consolidated statements of operations for the year ended December 31, 2018.

On i March 15, 2018, we contributed certain assets and liabilities of our Strategic Sourcing business unit, acquired as part of the acquisition of the EIS Business in 2017, into a new entity together with $ i 2.7 million of cash as additional consideration. In exchange for our contributions, we obtained a i 35.7% interest in the new entity, which was valued at $ i 4.0 million and is included in Other assets in our consolidated balance sheet as of December 31, 2018. This investment is accounted for under the equity method of accounting. As a result of this transaction, we recognized an initial pre-tax loss of $ i 0.9 million and $ i 4.7 million in additional losses due to measurement period adjustments upon the finalization of carve-out balances, mainly related to accounts receivable. These losses are included on the “Gain on sale of businesses, net” line in our consolidated statements of operations for the year ended December 31, 2018.

On i February 6, 2018, we acquired all of the common stock of a cloud-based analytics software platform provider for a purchase price of $ i 8.0 million in cash. The allocation of the consideration is as follows: $ i 1.1 million of intangible assets related to technology; $ i 0.6 million to customer relationships; $ i 6.6 million of goodwill; $ i 0.8 million to accounts receivable; deferred revenue of $ i 0.6 million and $ i 0.5 million of long-term deferred income tax liabilities. The allocation was finalized in the fourth quarter of 2018. The acquired intangible asset related to technology will be amortized over i 8 years using a method that approximates the pattern of economic benefits to be gained from the intangible asset. The customer relationship was amortized over i one year. The goodwill is i not deductible for tax purposes. The results of operations of this acquisition were not material to our consolidated financial statements.

6. Fair Value Measurements and Other Investments

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. We held no Level 1 financial instruments at December 31, 2020 or 2019.

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. Refer to Note 16, “Derivative Financial Instruments,” for further information regarding these derivative financial instruments.

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. Level 3 instruments include the estimated fair value of contingent consideration related to completed acquisitions. The fair values are based on discounted cash flow analyses 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. Changes in fair value for contingent consideration adjustments are recorded in Other (loss) income, net in the consolidated statements of operations. Level 3 instruments also included the i 1.25% Call Option asset and the i 1.25% embedded cash conversion option liability (together the “ i 1.25% Notes Call Spread Overlay” as further described in Note 10, “Debt”) that are not actively traded. These derivative instruments were designed with the intent that changes in their fair values would substantially offset, with limited net impact to our earnings. The sensitivity of changes in the unobservable inputs to the valuation pricing model used to value these instruments is not material to our consolidated results of operations. On i 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

(In thousands)

Classifications

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

Foreign exchange

derivative assets

Prepaid expenses

and other

current assets

i 0

i 1,509

i 0

i 1,509

i 0

i 1.25% Call Option

Other assets

i 0

i 84

Total assets

i 0

i 1,509

i 0

i 1,509

i 0

i 84

Contingent consideration

- current

Accrued

expenses

i 0

i 1,011

i 0

i 17,100

Contingent consideration

- long-term

Other liabilities

i 0

i 2,415

i 1.25% Embedded

cash conversion

option

Other liabilities

i 0

i 185

Total liabilities

i 0

i 1,011

i 0

i 19,700

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis at December 31, 2020 are summarized as follows:

(In thousands)	Contingent Consideration			1.25% Notes Call Spread Overlay
Balance at December 31, 2018	$	i 25,624		$	( i 870	)
Additions		i 12,073			i 0
Payments/write-downs⁽¹⁾		( i 18,624	)		i 0
Fair value adjustments		i 442			i 769
Balance at December 31, 2019	$	i 19,515		$	( i 101	)
Additions		i 770			i 0
Payments/write-downs⁽²⁾		( i 19,274	)		i 0
Fair value adjustments		i 0			i 101
Balance at December 31, 2020	$	i 1,011		$	i 0

⁽¹⁾	Payments and write-downs for the year ended December 31, 2019 primarily consisted of $ i 10.0 million in payments for the Health Grid earnout and a $ i 5.0 million write-down related to the Pulse8 earnout.

⁽²⁾	Payments and write-downs for the year ended December 31, 2020 primarily consisted of $ i 4.0 million in payments for the ACC earnout and a $ i 13.9 million write-down related to the Health Grid earnout.

The following table summarizes the quantitative information about our Level 3 fair value measurements at December 31, 2020:

(In thousands, except the discount rate)

Fair Value

Valuation Technique

Significant Unobservable Inputs

Ranges of Inputs

Weighted Average ⁽¹⁾

Financial instruments:

Contingent consideration

i 1,011

Probability Weighted Discounted cash flow

Discount rate

5.3% to 5.5%

i 5.4

Registry members

0 to 1,551

i 776

Patient data volume

0 to 52,845

i 26,422

Projected year of payment

2020 to 2021

Total financial instruments

i 1,011

⁽¹⁾	The weighted average is calculated based upon the absolute fair value of the instruments.

Long-term Investments

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

Number of Investees

Original

Carrying Value at

(In thousands, except for number of investees)

at December 31, 2020

Cost

Equity method investments ⁽¹⁾

i 3

i 7,099

i 10,744

i 11,332

Cost less impairment

i 8

i 37,568

i 25,059

i 32,462

Total long-term equity investments

i 11

i 44,667

i 35,803

i 43,794

⁽¹⁾	Allscripts share of the earnings of our equity method investees is reported based on a one quarter lag.

During 2020, we recorded a $ i 16.8 million gain from the sale of a third-party equity-method investment. The gain is recognized in the Equity in net income (loss) of unconsolidated investments line in the consolidated statements of operations.

During 2018, we acquired certain non-marketable equity securities of two third parties and entered into a commercial agreement with one of the third parties for total consideration of $ i 11.7 million. During 2018, we also acquired a $ i 1.8 million non-marketable convertible note of a third party. These investments are recorded in the Other asset caption within the consolidated balance sheets.

It is not practicable to estimate the fair value of our equity investments primarily because of their illiquidity and restricted marketability as of December 31, 2020. 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.

Impairment and Recovery of Long-Term Investments

Management performs a quarterly assessment of each of our investments on an individual basis to determine if there are any declines in fair value. Based on our review in the third quarter of 2020, we recognized a $ i 1.0 million non-cash impairment charge related to one of our cost-method investments, which equaled 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 $ i 0.6 million non-cash impairment charge. We recognized non-cash impairment charges of $ i 1.7 million during 2019 related to one of our long-term investments. We also recovered $ i 1.0 million from a third-party cost-method investment that we had previously impaired. The non-cash impairment charges and the amount recovered are recognized in the Impairment (recovery) of long-term investments line in the consolidated statements of operations for the year ended December 31, 2020 and 2019.

7. Fixed Assets

Fixed assets consist of the following:

	Estimated	December 31,			December 31,
(Dollar amounts in thousands)	Useful Life	2020			2019
Computer equipment and software	3 to 10 years	$	i 329,564		$	i 343,756
Facility furniture, fixtures and equipment	5 to 7 years		i 25,932			i 24,282
Leasehold improvements	i Shorter of 7 years or life of lease		i 40,115			i 38,948
Assets under finance leases	1 to 3 years		i 524			i 524
Fixed assets, gross			i 396,135			i 407,510
Less: Accumulated depreciation and amortization			( i 323,973	)		( i 319,557	)
Fixed assets, net		$	i 72,162		$	i 87,953

Accumulated amortization for assets under finance leases totaled $ i 0.5 million and $ i 0.4 million as of December 31, 2020 and 2019, respectively.

	Year Ended December 31,
(In thousands)	2020		2019		2018
Fixed assets depreciation and amortization expense, including finance leases	$	i 32,324	$	i 46,705	$	i 46,951

/ /

8. Goodwill and Intangible Assets

Goodwill and intangible assets consist of the following:

Gross

Carrying

Accumulated

Intangible

Carrying

Accumulated

Intangible

(In thousands)

Amount

Amortization

Assets, Net

Amount

Amortization

Assets, Net

Intangibles subject to amortization:

Proprietary technology

i 535,092

( i 465,292

)

i 69,800

i 534,873

( i 433,017

)

i 101,856

Customer contracts and relationships

i 674,336

( i 509,534

)

i 164,802

i 701,805

( i 488,533

)

i 213,272

Total

i 1,209,428

( i 974,826

)

i 234,602

i 1,236,678

( i 921,550

)

i 315,128

Intangibles not subject to amortization:

Registered trademarks

i 52,000

Goodwill

i 974,729

i 974,110

Total

i 1,026,729

i 1,026,110

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. As a result of this change, our reporting units became Core Clinical and Financial Solutions, Data, Analytics and Care Coordination, and EPSi. Refer to Note 19, “Business Segments,” for further discussion on the impact of the change to our reportable segments. During the second quarter of 2020, we made two changes in our reporting units. We transferred the Follow My Health business, previously included in the Data, Analytics and Care Coordination reporting unit, to the Core Clinical and Financial Solutions reporting unit. We also transferred Payerpath, a portion of the Ambulatory business that was previously included in the Clinical and Financial Solutions reporting unit, to the Data, Analytics and Care Coordination reporting unit.

During 2020, as a result of these organizational changes, we performed interim goodwill impairment tests as of January 1, 2020 and April 1, 2020. The fair value of each reporting unit substantially exceeded its carrying value, and no indicators of impairment were identified.

We performed our annual 2020 goodwill impairment test as of October 1, 2020. The fair value of each reporting unit substantially exceeded its carrying value, and no indicators of impairment were identified.

We performed our 2019 goodwill impairment test as of October 1, 2019. As a result of this test, we concluded that the carrying value of the historical Hospitals and Health Systems (“HHS”) reporting unit exceeded its fair value. As a result, we recognized a goodwill impairment charge of $ i 25.7 million. This goodwill impairment charge is reflected on the Goodwill impairment charge line in our consolidated statements of operations. The historical HHS reporting unit is now reported within the Core Clinical and Financial Solutions reporting unit. The fair values of all other reporting units substantially exceeded their carrying values. As of December 31, 2019, the goodwill allocated to the historical HHS reporting unit was $ i 485.5 million.

We performed our 2018 goodwill impairment test as of October 1, 2018. We concluded that the carrying value of the historical NantHealth reporting unit exceeded its fair value as a result of this test. Our latest available financial forecasts at the time of the annual goodwill impairment test reflected that projected future operating costs exceeded projected revenues resulting in negative operating margins for the historical NantHealth reporting unit. We recognized a goodwill impairment charge of $ i 13.5 million as a result, representing the entire goodwill balance assigned to the historical NantHealth reporting unit. This goodwill impairment charge is reflected on the Goodwill impairment charge line in our consolidated statements of operations for the year ended December 31, 2018.

The determination of the fair value of our reporting units is based on a combination of a market approach, which considers benchmark company market multiples, and an income approach, which utilizes discounted cash flows for each reporting unit and other Level 3 inputs. We determine fair value based on the present value of the most recent cash flow projections for each reporting unit as of the date of the analysis and calculate a terminal value utilizing a terminal growth rate under the income approach. The significant assumptions under this approach include, among others: income projections, which are dependent on sales to new and existing clients, new product introductions, client behavior, competitor pricing, operating expenses, the discount rate, and the terminal growth rate. The cash flows used to determine fair value are dependent on a number of significant management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based upon our historical experience. Our estimates are subject to change given the inherent uncertainty in predicting future results. The discount rate and the terminal growth rate are based on our judgment of the rates that would be utilized by a hypothetical market participant. We also consider our market capitalization in assessing the reasonableness of the combined fair values estimated for our reporting units as part of goodwill impairment testing.

We recognized an intangible asset impairment charge of $ i 23.1 million relating to Health Grid’s remaining customer relationship intangible balance during 2020. We also recognized an intangible asset impairment charge of $ i 8.1 million relating to

NantHealth’s remaining customer relationship intangible balance during 2019. In addition, we recognized an intangible asset impairment charge of $ i 2.2 million during 2018 relating to NantHealth’s acquired proprietary technology because the carrying value of this definite-lived intangible assets no longer appeared recoverable based on latest available financial forecasts at the time of the annual goodwill impairment test. These impairment charges are included in the Asset impairment charges line in our consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018.

As of December 31, 2020, there were i no accumulated impairment losses associated with goodwill. Accumulated impairment losses associated with goodwill totaled $ i 39.2 million and $ i 13.5 million as of December 31, 2019 and 2018, respectively. i Changes in the carrying amounts of goodwill by reportable segment for the years ended December 31, 2020 and 2019 were as follows:

(In thousands)

Core Clinical and Financial Solutions

Data, Analytics and Care Coordination

Total

Balance as of December 31, 2018

i 760,294

i 225,543

i 985,837

Additions

i 0

i 13,684

Goodwill impairment charge

( i 25,700

)

i 0

( i 25,700

)

Foreign exchange translation

i 289

i 0

i 289

Balance as of December 31, 2019

i 734,883

i 239,227

i 974,110

Goodwill impairment charge

i 0

Foreign exchange translation

i 619

i 0

i 619

Balance as of December 31, 2020

i 735,502

i 239,227

i 974,729

Additions to goodwill in 2019 resulted from the purchase of the Pinnacle and Diabetes Collaborative Registries and a prescription drug software company. Refer to Note 5, “Business Combinations and Divestitures” for additional information regarding these transactions. As stated above, we also recognized a goodwill impairment charge in 2019 for $ i 25.7 million related to the HHS reporting unit.

Intangible assets are being amortized over their estimated useful lives, and amortization expense related to intangible assets was as follows:

Year Ended December 31,

(In thousands)

2020

2019

2018

Proprietary technology amortization included in cost of revenue

i 32,130

i 35,034

i 37,029

Intangible amortization included in operating expenses

i 25,604

i 27,188

i 26,558

Total intangible amortization expense

i 57,734

i 62,222

i 63,587

Future amortization expense for the intangible assets as of December 31, 2020, based on foreign currency exchange rates in effect as of such date, is as follows:


Year Ended December 31,	(In thousands)
2021	$	i 50,556
2022		i 44,155
2023		i 27,943
2024		i 23,799
2025		i 20,180
Thereafter		i 67,969
Total	$	i 234,602

9. Asset Impairment Charges

During the year ended December 31, 2020, we recorded several non-cash asset impairment charges. We recorded a non-cash asset impairment charge of $ i 23.1 million related to the write-off of the remaining Health Grid acquired customer relationship intangible balance. This was partially offset by the write-off of $ i 13.9 million related to the Health Grid contingent consideration accrual. We recorded $ i 31.2 million of non-cash asset impairment charges related to the write-off of capitalized software due to the asset values exceeding the product’s net realizable value. The write-off was primarily related to one product in which we determined it would no longer be placed into service. We also recorded a $ i 34.3 million non-cash asset impairment charge due to the write-off of deferred costs related to our private cloud hosting operations. The write-off was driven by the expectation of improved efficiencies in the utilization of our contract compared with historical deferred costs, which was identified through our broader cost reduction initiatives. Impairment of long-term investments during the year ended December 31, 2020 consisted of $ i 1.6 million, which included $ i 1.0 million related to one of our cost-method investments and $ i 0.6 million related to one of our third-party equity-method investments. Refer to Note 6, “Fair Value Measurements and Other Investments” for further information regarding the long-term investment impairments.

Asset impairment charges incurred during the year ended December 31, 2019 were primarily the result of impairing the remaining NantHealth acquired customer relationship intangible balance of $ i 8.1 million. We also recognized non-cash impairment charges of $ i 2.7 million on the retirement of certain hosting assets due to data center migrations. Impairment of long-term investments during the year ended December 31, 2019 consisted of an impairment of $ i 1.7 million associated with one of our long-term equity investments. We also recovered $ i 1.0 million from one of our long-term equity investments that we had previously impaired. We also recorded a goodwill impairment charge of $ i 25.7 million related to our HHS reporting unit. Refer to Note 8, “Goodwill and Intangible Assets” for further information regarding this impairment.

We incurred several non-cash asset impairment charges during the year ended December 31, 2018. We recorded non-cash asset impairment charges of $ i 33.2 million related to the write-off of capitalized software as a result of our decision to discontinue several software development projects. We also recorded $ i 22.9 million of non-cash asset impairment charges related to our acquisition of the patient/provider engagement solutions business from NantHealth in 2017, which included the write-downs of $ i 2.2 million of acquired technology and $ i 20.7 million, representing the unamortized value assigned to the modification of our existing commercial agreement with NantHealth, as we no longer expected to recover the value assigned to these assets. The remaining $ i 2.1 million of non-cash asset impairment charges recorded during the year ended December 31, 2018 relate to the disposal of fixed assets as a result of relocating and consolidating business functions and locations from recent acquisitions.

We recorded a goodwill impairment charge of $ i 13.5 million related to NantHealth during the year ended December 31, 2018. Refer to Note 8, “Goodwill and Intangible Assets” for further information regarding this impairment. We recognized non-cash impairment charges of $ i 15.5 million in 2018 related to two of our cost-method equity investments and a related note receivable. These charges equaled the cost bases of the investments and the related note receivable prior to the impairment.

The following table summarizes the non-cash asset impairment charges recorded during the periods indicated and where they appear in the corresponding consolidated statements of operations:

	Year Ended December 31,
(In thousands)	2020		2019		2018
Asset impairment charges	$	i 74,969	$	i 10,837	$	i 58,166
Goodwill impairment charge	$	i 0	$	i 25,700	$	i 13,466
Impairment of long-term investments	$	i 1,575	$	i 651	$	i 15,487

/ /

10. Debt

Debt outstanding, excluding lease obligations, consisted of the following:

(In thousands)

Principal Balance

Unamortized Discount and Debt Issuance Costs

Net Carrying Amount

Principal Balance

Unamortized Discount and Debt Issuance Costs

Net Carrying Amount

0.875% Convertible Senior Notes ⁽¹⁾

i 167,853

( i 3,166

)

i 171,019

i 177,942

i 4,697

i 173,245

1.25% Cash Convertible

Senior Notes

i 0

i 345,000

i 7,552

i 337,448

Senior Secured Credit Facility

i 0

i 3,432

( i 3,432

)

i 410,000

i 5,224

i 404,776

Total debt

i 167,853

i 266

i 167,587

i 932,942

i 17,473

i 915,469

Less: Debt payable within

one year

i 0

i 364,653

i 188

i 364,465

Total long-term debt, less

current maturities

i 167,853

i 266

i 167,587

i 568,289

i 17,285

i 551,004

⁽¹⁾	Principal balance is $ i 207,911 thousand; $ i 167,853 thousand is recognized in debt and $ i i 40,058 / thousand is recognized in additional paid-in capital.

Interest expense consisted of the following:

Year Ended December 31,

(In thousands)

2020

2019

2018

Interest expense

i 18,113

i 26,648

i 35,366

Amortization of discounts and debt issuance costs

i 15,991

i 16,524

i 15,548

Total interest expense

i 34,104

i 43,172

i 50,914

Interest expense related to the 0.875% Convertible Senior Notes and the 1.25% Cash Convertible Senior Notes, which is included in total interest expense above, consisted of the following:

Year Ended December 31,

(In thousands)

2020

2019

2018

Coupon interest

i 4,016

i 4,429

i 4,312

Amortization of discounts and debt issuance costs

i 13,484

i 14,926

i 13,867

Total interest expense related to the convertible notes

i 17,500

i 19,355

i 18,179

Allscripts 0.875% Convertible Senior Notes

On December 9, 2019, we issued $ i 200.0 million aggregate principal amount of Allscripts’ i 0.875% Convertible Senior Notes due 2027 (the “0.875% Notes”) in a private offering. i The 0.875% Notes are Allscripts’ senior, unsecured obligations that bear interest at a rate of 0.875% per year, payable semiannually in arrears on January 1 and July 1 of each year, commencing on i July 1, 2020. The 0.875% Notes will mature on i January 1, 2027, unless earlier repurchased by us or converted in accordance with their terms prior to such date.

The 0.875% Notes are convertible at the option of the holders (in whole or in part) at any time prior to the close of business on the business day immediately preceding July 1, 2026 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2019 (and only during such calendar quarter), if the last reported sale price of Allscripts’ common stock for at least i 20 trading days (whether or not consecutive) during the period of i 30 consecutive trading days ending on and including the last trading day of the immediately preceding calendar quarter is greater than or equal to i 130% of the conversion price on each applicable trading day; (2) during the i five business day period after any i five consecutive trading day period (the “measurement period”) in which the trading price per $ i 1,000 principal amount of 0.875% Notes for each trading day of the measurement period was less than i 98% of the product of the last reported sale price of Allscripts’ common stock and the conversion rate on each such trading day; or (3) upon the occurrence of certain corporate events as specified in the indenture governing the 0.875% Notes (the “0.875% Notes Indenture”). On or after July 1, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 0.875% Notes at any time, regardless of the foregoing conditions. Upon conversion, Allscripts will pay or deliver, as the case may be, cash, shares of Allscripts’ common stock, or a combination of cash and shares of Allscripts’ common stock, at Allscripts’ election, in amounts determined in the manner set forth in the 0.875% Notes Indenture.

The initial conversion rate for the i 0.875% Notes will be i 75.0962 shares of Allscripts’ common stock per $ i 1,000 principal amount of the 0.875% Notes, which is equivalent to an initial conversion price of approximately $ i 13.32 per share of Allscripts’ common stock. The initial conversion price of the 0.875% Notes represents a premium of approximately i 32.5% to $ i 10.05 per share last reported sale price of Allscripts’ common stock on December 4, 2019. The conversion rate will be subject to adjustment upon the occurrence of certain specified events, but will not be adjusted for any accrued and unpaid interest. In addition, upon the occurrence of a “make-whole fundamental change” (as defined in Section 1.01 of the 0.875% Notes Indenture), Allscripts’ will, in certain circumstances, increase the conversion rate by a number of additional shares of Allscripts’ common stock for a holder that elects to convert its 0.875% Notes in connection with such make-whole fundamental change. We may not redeem the 0.875% Notes prior to the maturity date, and no sinking fund is provided for the 0.875% Notes.

Upon the occurrence of a “fundamental change” (as defined in Section 1.01 of the 0.875% Notes Indenture), holders of the 0.875% Notes may require us to repurchase all or any portion of their 0.875% Notes in principal amounts of $ i 1,000 or an integral multiple thereof at a fundamental change repurchase price in cash equal to i 100% of the principal amount of the 0.875% Notes to be repurchased, plus any accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.

The 0.875% Notes Indenture contains customary terms and covenants, including that upon certain events of default, including cross acceleration to certain other indebtedness of Allscripts and its subsidiaries, either the trustee under the 0.875% Notes Indenture or the holders of not less than i 25% in aggregate principal amount of the 0.875% Notes then outstanding may declare the unpaid principal of the 0.875% Notes and accrued and unpaid interest, if any, thereon immediately due and payable.

In December 2019, in connection with the 0.875% Notes offering, we entered into privately negotiated capped call transactions with JPMorgan Chase Bank, National Association, New York Branch, Wells Fargo Bank, National Association, Bank of America, N.A. and Deutsche Bank AG, London Branch (the “option counterparties”). The capped call transactions are expected generally to reduce the potential dilution to Allscripts’ common stock upon any conversion of 0.875% Notes and/or offset any cash payments Allscripts is required to make in excess of the principal amount of the converted 0.875% Notes upon conversion of the 0.875% Notes, as the case may be, in the event that the market price of Allscripts’ common stock is greater than the strike price of the capped call transactions (which initially corresponds to the initial conversion price of the 0.875% Notes of approximately $ i 13.32 per share of Allscripts’ common stock and is subject to certain adjustments under the terms of the capped call transactions), with such reduction and/or offset subject to a cap based on the cap price of the capped call transactions. The cap price of the capped call transactions is initially $ i 17.5875 per share, representing a premium of i 75% above the last reported sale price of $ i 10.05 per share of Allscripts’ common stock on December 4, 2019, and is subject to certain adjustments under the terms of the capped call transactions. The capped call transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the 0.875% Notes, the number of shares of Allscripts’ common stock that underlie the 0.875% Notes. The capped call transactions are not part of the terms of the 0.875% Notes and will not affect any holder’s rights under the 0.875% Notes. Holders of the 0.875% Notes will not have any rights with respect to the capped call transactions.

The aggregate net proceeds of the 0.875% Notes were $ i 195.0 million after deducting $ i 5.0 million for the initial purchasers’ discount but before deducting other estimated expenses. On December 9, 2019, we used $ i 15.8 million of the net proceeds to pay the cost of the capped call transactions and the remainder of $ i 179.2 million to repay outstanding borrowings under our senior secured revolving credit facility.

On December 18, 2019, the initial purchasers notified us of the partial exercise of their option to purchase additional 0.875% Notes. On December 20, 2019 we issued an additional $ i 18.0 million in aggregate principal amount of the i 0.875% Notes (the “Option Notes”) pursuant to a partial exercise of the initial purchasers’ option to purchase additional 0.875% Notes. The Option Notes have the same terms as the 0.875% Notes previously described and are issued pursuant to the same 0.875% Notes Indenture. The net proceeds from the sale of the Option Notes totaled $ i 17.5 million after deducting $ i 0.5 million in debt issuance costs. In connection with the initial purchasers’ exercise of their option to purchase the Option Notes, we entered into additional privately negotiated capped call transactions (the “additional capped call transactions”) with each of the option counterparties. On December 20, 2019, we used $ i 1.4 million of the net proceeds to pay the cost of additional capped call transactions and the remainder to repay additional outstanding borrowings under our senior secured revolving credit facility.

The issuance in December 2019 of the combined $ i 218.0 million aggregate purchase amount of the 0.875% Notes and the Option Notes (collectively, the “0.875% Convertible Senior Notes”) incurred $ i 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 i 1.95% was used to compute the initial fair value of the liability component, which totaled $ i 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 $ i 40.1 million at the time of issuance before deducting any paid capped call fees. The equity component of $40.1 million, the $ i 17.2 million in paid capped call fees and an allocation of $ i 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 $ i 7.7 million to repurchase $ i 10.1 million of the aggregate principal amount of the i 0.875% Convertible Senior Notes, which resulted in a $ i 0.5 million gain. In connection with the repurchase, the capped call transaction was partially terminated, and we received $ i 0.3 million, which resulted in a recognition of $ i 0.8 million in equity to offset the capped call fees and a $ i 0.5 million loss. The remaining principal amount of the i 0.875% Convertible Senior Notes at December 31, 2020 totaled $ i 207.9 million. The carrying value of the combined equity component, net of capped call fees, issuance costs and accretion, at December 31, 2020 totaled $ i 16.1 million.

Allscripts Senior Secured Credit Facility

On February 15, 2018, Allscripts and 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 $ i 400 million senior secured term loan (the “Term Loan”) and a $ i 900 million senior secured revolving facility (the “Revolving Facility”), each with a five-year term. Collectively, the Term Loan and the Revolving Facility are referred to herein as the “Senior Secured Credit Facility.” i The Term Loan is repayable in quarterly installments, which commenced on June 30, 2018. A total of up to $ i 50 million of the Revolving Facility is available for the issuance of letters of credit, up to $ i 10 million of the Revolving Facility is available for swingline loans, and up to $ i 100 million of the Revolving Facility could be borrowed under certain foreign currencies.

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 provides the financial flexibility to settle the U.S. Department of Justice’s investigations as discussed in Note 22, “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 $ i 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 $ i 1.4 million, of which a majority was capitalized.

The proceeds of the Revolving Facility can be used to finance Allscripts’ working capital needs and for general corporate purposes, including, without limitation, for financing permitted acquisitions, and for share repurchases. Allscripts is also permitted to add one or more incremental revolving and/or term loan facilities in an aggregate amount of up to $ i 600 million, subject to certain conditions.

The initial applicable interest rate margin for Base Rate borrowings is i 1.00%, and for Eurocurrency Rate borrowings is i 2.00%. On and after December 31, 2020, the interest rate margins will be determined from a pricing table and will depend upon Allscripts’ total leverage ratio. The applicable margins for Base Rate borrowings under the Second Amended Credit Agreement range from i 0.50% to i 1.25% depending on Allscripts’ total leverage ratio range. The applicable margins for Eurocurrency Rate loans range from i 1.50% to i 2.25%, depending on Allscripts’ total leverage ratio.

Subject to certain agreed upon exceptions, all obligations under the Senior Secured Credit Facility remain guaranteed by each of our existing and future direct and indirect material domestic subsidiaries other than Coniston Exchange LLC and certain domestic subsidiaries owned by our foreign subsidiaries (the “Guarantors”) pursuant to a related Guarantee and Collateral Agreement among Allscripts Healthcare Solutions, Inc., Allscripts Healthcare, LLC, certain of our other subsidiaries, and JPMorgan Chase Bank, N.A., as administrative agent. Our obligations under the Senior Secured Credit Facility, any swap agreements and any cash management arrangements provided by any lender, remain secured, subject to permitted liens and other agreed upon exceptions, by a perfected first priority security interest in all of the tangible and intangible assets (including, without limitation, intellectual property, material owned real property and all of the capital stock of each Guarantor and, in the case of foreign subsidiaries, up to i 65% of the capital stock of first tier material foreign subsidiaries) of Allscripts Healthcare Solutions, Inc. and certain of our subsidiary guarantors.

The Second Amended Credit Agreement requires us to maintain a minimum interest coverage ratio of i 3.5 to 1.0 and a maximum total net leverage ratio of i 4.25 to 1.0. The minimum interest coverage ratio is calculated by dividing earnings before interest expense, income tax expense, depreciation and amortization expense by cash interest expense, subject to various agreed upon adjustments. The total net leverage ratio is calculated by dividing total indebtedness reduced by a portion of domestic unrestricted cash, by earnings before interest expense, income tax expense, depreciation and amortization expense, subject to various agreed upon adjustments. The Second Amended Credit Agreement also provides that during the four-quarter period following permitted acquisitions that are financed in whole or in part with indebtedness and the consideration paid by us is $ i 100 million or more, we are required to maintain a maximum total leverage ratio of i 4.5 to 1.0. In addition, the Second Amended Credit Agreement requires mandatory prepayments of the debt outstanding under the Senior Secured Credit Facility in certain specific circumstances, and contains a number of covenants which, among other things, restrict our ability to incur additional indebtedness, engage in mergers, or declare dividends or other payments in respect of our capital stock.

The Second Amended Credit Agreement also contains certain customary events of default, including relating to non-payment, breach of covenants, cross-default, bankruptcy and change of control.

As of December 31, 2020, $ i 1.1 million in letters of credit were outstanding under the Second Amended Credit Agreement. i i No / amounts under the Term Loan or the Revolving Facility were outstanding under the Second Amended Credit Agreement.

As of December 31, 2020, the interest rate on the Senior Secured Credit Facility was LIBOR plus i 2.00%, which totaled i 2.15%. We were in compliance with all financial covenants under the Second Amended Credit Agreement as of December 31, 2020.

As of December 31, 2020, we had $ i 898.9 million available borrowing capacity, net of outstanding letters of credit, under the Revolving Facility. There can be no assurance that we will be able to draw on the full available balance of the Revolving Facility if the financial institutions that have extended such credit commitments become unwilling or unable to fund such borrowings.

In connection with the sale of our EPSi business on October 15, 2020, which is further discussed in Note 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 $ i 19.0 million on October 29, 2020.

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

Allscripts 1.25% Cash Convertible Senior Notes

On June 18, 2013, we issued $ i 345.0 million aggregate principal amount of Allscripts' i 1.25% Cash Convertible Senior Notes due 2020 (the “1.25% Notes”). The aggregate net proceeds of the 1.25% Notes were $ i 305.1 million, after payment of the net cost of the 1.25% Notes Call Spread Overlay (as described below) and transaction costs.

i Interest on the 1.25% Notes was payable semiannually in arrears on January 1^st and July 1^st of each year, at a fixed annual rate of i 1.25%. The 1.25% Notes were not repurchased or converted prior to maturing on i July 1, 2020. The 1.25% Notes were repaid utilizing $ i 345.0 million drawn against the Revolving Facility.

The 1.25% Notes were convertible only into cash, and not into shares of our common stock or any other securities. Holders could have converted their 1.25% Notes solely into cash at their option at any time prior to the close of business on the business day immediately preceding January 1, 2020 only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of our common stock for at least i 20 trading days (whether or not consecutive) during a period of i 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to i 130% of the conversion price on each applicable trading day; (2) during the i five business day period immediately after any i five consecutive trading day period in which the trading price per $1,000 principal amount of the 1.25% Notes for each trading day of the measurement period was less than i 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On or after January 1, 2020 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders could have converted their 1.25% Notes solely into cash at any time, regardless of the foregoing circumstances. Upon conversion, in lieu of receiving shares of our common stock, a holder would have received an amount in cash, per $ i 1,000 principal amount of the 1.25% Notes, equal to the settlement amount, determined in the manner set forth in the indenture governing the 1.25% Notes (the “1.25% Notes Indenture”).

The initial conversion rate was i 58.1869 shares of our common stock per $ i 1,000 principal amount of the 1.25% Notes (equivalent to an initial conversion price of approximately $ i 17.19 per share of common stock). The conversion rate was subject to adjustment in some events but was not adjusted for any accrued and unpaid interest. In addition, in the event that certain corporate events had occurred prior to the maturity date, we would have paid a cash make-whole premium by increasing the conversion rate for a holder who elected to convert such holder’s 1.25% Notes in connection with such a corporate event in certain circumstances. We did not redeem the 1.25% Notes prior to the maturity date, and no sinking fund was provided for the 1.25% Notes.

If we would have undergone a fundamental change (as defined in the 1.25% Notes Indenture), holders could have required us to repurchase for cash all or part of their 1.25% Notes at a repurchase price equal to i 100% of the principal amount of the 1.25% Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The 1.25% Notes Indenture provided for customary events of default, including cross acceleration to certain other indebtedness of ours, and our subsidiaries.

The 1.25% Notes were senior unsecured obligations, and ranked senior in right of payment to any of our indebtedness that was expressly subordinated in right of payment to the 1.25% Notes; equal in right of payment to any of our unsecured indebtedness that was not so subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries.

The 1.25% Notes contained an embedded cash conversion option. We determined that the embedded cash conversion option was a derivative financial instrument, 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 until the cash conversion option transaction settled or expired. The initial fair value liability of the embedded cash conversion option was $ i 82.8 million, which simultaneously reduced the carrying value of the 1.25% Notes (effectively an original issuance discount). For further discussion of the derivative financial instruments relating to the 1.25% Notes, refer to Note 16, “Derivative Financial Instruments.”

The reduced carrying value of the 1.25% Notes resulted in a debt discount that was amortized to the 1.25% Notes’ principal amount through the recognition of non-cash interest expense over the expected term of the 1.25% Notes, which extended through their maturity date of July 1, 2020. This has resulted in our recognition of interest expense on the 1.25% Notes at an effective rate approximating what we would have incurred had nonconvertible debt with otherwise similar terms been issued. The effective interest rate of the 1.25% Notes at issuance was i 5.4%, which was imputed based on the amortization of the fair value of the embedded cash conversion option over the remaining term of the 1.25% Notes. We recorded interest expense until the i 1.25% Notes matured on i July 1, 2020.

In connection with the settlement of the 1.25% Notes, we paid $ i 8.4 million in transaction costs. Such costs were allocated to the 1.25% Notes, the 1.25% Call Option (as defined below) and the 1.25% Warrants (as defined below). The amount allocated to the 1.25% Notes, or $ i 8.3 million, was capitalized and was amortized over the expected term of the 1.25% Notes.

1.25% Notes Call Spread Overlay

In June 2013, concurrent with the issuance of the 1.25% Notes, we entered into privately negotiated hedge transactions (collectively, the “1.25% Call Option”) and warrant transactions (collectively, the “1.25% Warrants”), with certain of the initial purchasers of the 1.25% Notes (collectively, the “Call Spread Overlay”). 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. We used $ i 82.8 million from the initial proceeds of the 1.25% Notes to pay for the 1.25% Call Option, and simultaneously received $ i 51.2 million from the sale of the 1.25% Warrants, for a net cash outlay of $ i 31.6 million for the Call Spread Overlay. The 1.25% Call Option was a derivative financial instrument and is discussed further in Note 16, “Derivative Financial Instruments.” The 1.25% Warrants were equity instruments and are further discussed in Note 13, “Stockholders’ Equity.”

Future Debt Payments

The following table summarizes future debt payments as of December 31, 2020:


(In thousands)	Total		2021		2022		2023		2024		2025		Thereafter
0.875% Convertible Senior Notes ⁽¹⁾	$	i 207,911	$	i 0	$	i 0	$	i 0	$	i 0	$	i 0	$	i 207,911
Total debt	$	i 207,911	$	i 0	$	i 0	$	i 0	$	i 0	$	i 0	$	i 207,911

⁽¹⁾	Amount represents the face value of the 0.875% Convertible Senior Notes, which includes both the liability and equity portions.

11. Income Taxes

The following is a geographic breakdown of loss from continuing operations before income tax benefits:

	Year Ended December 31,
(In thousands)	2020			2019			2018
United States	$	( i 148,174	)	$	( i 287,088	)	$	( i 61,292	)
Foreign		( i 1,137	)		i 5,337			( i 907	)
Loss from continuing operations before income taxes	$	( i 149,311	)	$	( i 281,751	)	$	( i 62,199	)

The following is a summary of the components of the benefit for income taxes:

	Year Ended December 31,
(In thousands)	2020			2019			2018
Current tax provision
Federal	$	( i 19,346	)	$	( i 8,232	)	$	( i 14,018	)
State		( i 219	)		( i 1,809	)		( i 3,859	)
Foreign		i 3,803			i 5,054			i 5,015
		( i 15,762	)		( i 4,987	)		( i 12,862	)
Deferred tax provision
Federal		i 2,931			( i 28,732	)		( i 5,781	)
State		( i 2,981	)		( i 8,763	)		i 236
Foreign		( i 880	)		( i 858	)		( i 576	)
		( i 930	)		( i 38,353	)		( i 6,121	)
Income tax benefit	$	( i 16,692	)	$	( i 43,340	)	$	( i 18,983	)

Taxes computed at the statutory federal income tax rate of i i i 21 / / % for the years ended December 31, 2020, 2019 and 2018 are reconciled to the provision for income taxes as follows:

Year Ended December 31,

(In thousands)

2020

2019

2018

United States federal tax at statutory rate

( i 31,355

)

( i 59,170

)

( i 13,062

)

Items affecting federal income tax rate

Non-deductible acquisition and reorganization expenses

i 0

i 31

i 291

Non-deductible portion of Department of Justice Settlement

i 0

i 18,546

i 0

Research credits

( i 6,500

)

( i 6,126

)

( i 6,185

)

Change in unrecognized tax benefits

i 3,204

i 1,046

i 3

State income taxes, net of federal benefit

( i 2,940

)

( i 7,411

)

( i 2,916

)

Compensation

i 5,314

i 4,664

i 3,213

Meals and entertainment

i 118

i 549

i 616

Impact of foreign operations

i 1,443

i 3,079

i 3,627

Provision-to-Return adjustments

( i 2,362

)

( i 383

)

( i 2,140

)

Deemed Dividends

i 352

i 473

i 373

Federal, state and local rate changes

i 0

( i 630

)

i 0

US Tax reform impact

i 0

( i 2,972

)

i 0

Goodwill impairment

i 0

i 5,397

i 0

Non-deductible items

i 28

i 43

i 34

Noncontrolling interest

i 0

i 951

True-up of prior year income of Consolidated Investment

i 0

i 913

Valuation allowance

i 16,949

i 922

( i 5,208

)

Other

( i 943

)

( i 1,398

)

i 507

Income tax benefit

( i 16,692

)

( i 43,340

)

( i 18,983

)

Significant components of our deferred tax assets and liabilities consist of the following:

	December 31,
(In thousands)	2020			2019
Deferred tax assets
Accruals and reserves, net	$	i 18,260		$	i 29,627
Allowance for doubtful accounts		i 9,571			i 11,507
Stock-based compensation, net		i 8,428			i 10,382
Deferred revenue		i 35,016			i 21,786
Operating and finance lease liabilities		i 22,902			i 22,085
Net operating loss carryforwards		i 35,695			i 37,717
Research and development tax credit		i 251			i 899
Other		i 4,519			i 7,488
Less: Valuation Allowance		( i 35,491	)		( i 19,219	)
Total deferred tax assets		i 99,151			i 122,272

Deferred tax liabilities
Prepaid expense		( i 4,329	)		( i 5,372	)
Property and equipment, net		( i 2,062	)		( i 3,695	)
Acquired intangibles, net		( i 86,841	)		( i 111,284	)
Operating and finance right-of-use assets		( i 18,315	)		( i 17,255	)
Total deferred tax liabilities		( i 111,547	)		( i 137,606	)
Net deferred tax liabilities	$	( i 12,396	)	$	( i 15,334	)

The deferred tax assets (liabilities) are classified in the consolidated balance sheets as follows:

	December 31,
(In thousands)	2020			2019
Non-current deferred tax assets, net	$	i 5,790		$	i 5,704
Non-current deferred tax liabilities, net		( i 18,186	)		( i 21,038	)
Non-current deferred tax liabilities, net	$	( i 12,396	)	$	( i 15,334	)

We had federal net operating loss (“NOL”) carryforwards of $ i 164 million and $ i 174 million as of December 31, 2020, and 2019, respectively. The federal NOL carryforward includes U.S. NOL carryovers of $ i 4.3 million and Israeli NOL carryovers of $ i 49 million that do not expire. We also had state NOL carryforwards of $ i i 2.5 / million for the years ended December 31, 2020 and 2019. The NOL carryforwards expire in various amounts starting in i 2021 for both federal and state tax purposes. The utilization of the federal NOL carryforwards is subject to limitation under the rules regarding changes in stock ownership as determined by the Internal Revenue Code.

For federal purposes, i 2017 to i 2020 tax years remain subject to income tax examination by federal authorities. For our state tax jurisdictions, i 2017 to i 2020 tax years remain open to income tax examination by state tax authorities. Tax years remain open in various foreign jurisdictions beginning in i 2015. We have a subsidiary in India that is entitled to a tax holiday that allows for tax-free operations during such tax holiday. This tax holiday for the subsidiary began to partially expire in i 2012 and fully expired in i 2017. Tax savings realized from this holiday totaled $ i 0.4 million for the year ended December 31, 2017, which reduced our loss per share by less than $ i 0.01 through 2017. There is a potential for a partial tax holiday for i 5 years beginning on April 1, 2017, which is contingent upon a certain level of capital expenditure spending, among other conditions. Tax savings impact of $ i 0.2 million has been recorded for this potential tax holiday for the year ended December 31, 2020, which impacted our diluted earnings per share by less than $0.01 in this year.

GAAP principles prescribe a threshold of more-likely-than-not to be sustained upon examination for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These principles also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Changes in the amounts of unrecognized tax benefits were as follows:

Year Ended December 31,

(In thousands)

2020

2019

2018

Beginning balance as of January 1

i 20,604

i 19,821

i 10,939

Increases for tax positions related to the current year

i 8,053

i 1,240

i 8,977

Increases for tax positions related to prior years

i 427

i 95

i 367

Increases acquired in business acquisitions

i 0

i 540

Foreign currency translation

i 2

i 3

( i 5

)

Reductions due to lapsed statute of limitations

( i 201

)

( i 555

)

( i 997

)

Ending balance as of December 31

i 28,885

i 20,604

i 19,821

We had gross unrecognized tax benefits of $ i 28.9 million and $ i 20.6 million as of December 31, 2020 and 2019, respectively. The main driver of the increase in the unrecognized tax benefits as of December 31, 2020 is $ i 6.4 million related to the uncertain positions taken on the state tax treatment of the gains on the sales of our EPSi and CarePort businesses. If the current gross unrecognized tax benefits were recognized, the result would be an increase in our income tax benefit of $ i 30.8 million and $ i 20.7 million, for 2020 and 2019, respectively. These amounts are net of accrued interest and penalties relating to unrecognized tax benefits of $ i 2.0 million and $ i 0.4 million, respectively. We believe that it is reasonably possible that $ i 0.2 million of our currently remaining unrecognized tax benefits may be recognized by the end of 2021, as a result of a lapse of the applicable statute of limitations.

We recognized interest and penalties related to uncertain tax positions in our consolidated statements of operations as follows:

	Year Ended December 31,
(In thousands)	2020		2019		2018
Interest and penalties included in the provision for income taxes	$	i 1,620	$	i 229	$	i 543

/ i

The amount of interest and penalties included in our consolidated balance sheets is as follows:

	December 31,
(In thousands)	2020		2019
Interest and penalties included in the liability for uncertain tax positions	$	i 2,048	$	i 427

During the year ended December 31, 2020, we reversed valuation allowance of $ i 1.0 million related to the unvested stock compensation of covered officers due to the potential deduction limitations under Section 162(m) provisions. We recorded $ i 17.9 million against deferred tax assets of certain U.S. and foreign deferred tax assets. In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise, we consider all available positive and negative 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 i three years of cumulative operating income (loss). Using all available evidence, we determined that it was uncertain that we will realize the deferred tax asset for certain of these carryforwards within the carryforward period.

We file income tax returns in the United States federal jurisdiction, numerous states in the United States and multiple countries outside of the United States. We are subject to the continuous examination of our income tax returns by the IRS and other tax authorities. A change in the assessment of the outcomes of such matters could materially impact our consolidated financial statements.

We intend to indefinitely reinvest the undistributed earnings of our foreign subsidiaries as a general rule, as most of our foreign subsidiaries have third party customers, as well as formal sales proposals that could require significant resources. Specifically, our subsidiary in India may repatriate all current 2020 earnings at the discretion of management. As of December 31, 2020, we have no other plans to repatriate any other funds at this time. A Netherlands holding company currently holds all of our foreign subsidiaries. Our holding company makes it more efficient for us to share resources between the respective foreign subsidiaries. As we have determined that the earnings of these subsidiaries are not required as a source of funding for our U.S. operations, such earnings are not planned to be distributed to the United States in the foreseeable future. Determination of the amount of unrecognized income tax liability related to these undistributed foreign subsidiary earnings, if repatriated, is currently not practicable.

12. Stock Award Plan

Total recognized stock-based compensation expense is included in our consolidated statements of operations as shown in the table below. 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.

Year Ended December 31,

(In thousands)

2020

2019

2018

Cost of revenue:

Software delivery, support and maintenance

i 1,640

i 2,075

i 2,184

Client services

i 4,421

i 4,067

i 3,997

Total cost of revenue

i 6,061

i 6,142

i 6,181

Selling, general and administrative expenses

i 25,002

i 27,348

i 24,213

Research and development

i 7,827

i 9,200

i 8,937

Total stock-based compensation expense

i 38,890

i 42,690

i 39,331

The estimated income tax benefit of stock-based compensation expense included in the provision for income taxes for the year ended December 31, 2020 is approximately $ i 4.8 million. i i i No / / stock-based compensation costs were capitalized during the years ended December 31, 2020, 2019 and 2018. The calculation of stock-based compensation expenses includes an estimate for forfeitures at the time of grant. This estimate can be revised in subsequent periods if actual forfeitures differ from those estimates, which are based on historical trends. Total unrecognized stock-based compensation expense related to non-vested awards and options was $ i 51.3 million as of December 31, 2020, and this expense is expected to be recognized over a weighted-average period of i 2.3 years.

Allscripts Long-Term Incentive Plan

Allscripts adopted the 2019 Stock Incentive Plan (the “Plan”), which became effective May 23, 2019. The Plan provides for the granting of stock options, service-based awards, performance-based share awards and market-based share awards, among other awards. The maximum number of shares available for awards under the Plan is i 5.5 million, plus the number of available shares of common stock under the Amended and Restated 2011 Stock Incentive plan as of the effective date of the Plan. There were i 8.2 million shares as of December 31, 2020 of common stock reserved for issuance under future share-based awards to be granted to any of Allscripts employees, officers, directors or independent consultants at terms and prices to be determined by our Board, and subject to the terms of the Plan.

We issue service-based, performance-based and market-based awards in the form of restricted stock units or stock options. A description of each category of awards is presented below.

Service-based Share Awards

Service-based share awards include stock options and restricted stock units, and typically vest over a four-year period commencing on the date of grant subject to continued service with the Company. Upon termination of an employee’s employment, any unvested service-based share awards are forfeited unless otherwise provided in an employee’s employment agreement. Share units are awarded to directors and vest within i one year. We recognize the expense for service-based share awards over the requisite service period on a straight-line basis, net of estimated forfeitures.

There was $ i 42.6 million of total estimated unrecognized stock-based compensation expense related to the service-based share awards as of December 31, 2020, which is expected to be recognized over a weighted-average period of i 2.4 years.

Performance-based Share Awards

Performance-based share awards include restricted stock units. The purpose of such awards is to align management’s compensation with our financial performance and other operational objectives and, in certain cases, to retain key employees over a specified performance period. Awards granted under this category are based on the achievement of various targeted financial measures as defined by the Plan. The awards are earned based on actual results achieved compared to targeted amounts. Stock-based compensation expense related to these awards is recognized over a three-year vesting period under the accelerated attribution method if and when we conclude that it is probable that the performance conditions will be achieved.

There was $ i 2.4 million of total estimated unrecognized stock-based compensation expense as of December 31, 2020, assuming various target attainments related to the performance-based share awards, which is expected to be recognized over a weighted-average period of i 2.2 years.

Market-based Share Awards

Market-based share awards include restricted stock units. The purpose of such awards is to align management’s compensation with the performance of our common stock relative to the market. Awards granted under this category are dependent on our total shareholder returns relative to a specified peer group of companies over three-year performance periods with vesting based on three annual performance segments from the grant dates. Fair values of the awards were estimated at the date of the grants using the Monte Carlo pricing model. The Compensation Committee of our Board determines the number of awards that will vest considering overall performance over the three-year performance period following the completion of a performance period. Stock-based compensation expense related to these awards is recognized over the three-year vesting periods under the accelerated attribution method.

There was $ i 6.3 million of total estimated unrecognized stock-based compensation expense as of December 31, 2020, which is expected to be recognized over a weighted-average period of i 1.7 years.

Restricted Stock Units

The following table summarizes the activity for restricted stock units during the periods presented:

				Weighted-Average
(In thousands, except per share amounts)	Shares			Grant Date Fair Value
Unvested restricted stock units as of December 31, 2017		i 7,259		$	i 12.57
Awarded		i 4,024			i 13.25
Vested		( i 2,222	)		i 13.03
Forfeited		( i 1,111	)		i 12.43
Unvested restricted stock units as of December 31, 2018		i 7,950			i 12.81
Awarded		i 4,777			i 10.15
Vested		( i 2,360	)		i 12.62
Forfeited		( i 1,453	)		i 12.20
Unvested restricted stock units as of December 31, 2019		i 8,914			i 11.53
Awarded		i 5,607			i 6.88
Vested		( i 2,756	)		i 11.69
Forfeited		( i 2,097	)		i 10.79
Unvested restricted stock units as of December 31, 2020		i 9,668		$	i 8.95

Net Share-settlements

Upon vesting, restricted stock units are generally net share-settled upon vesting 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 that vested during the years ended December 31, 2020, 2019 and 2018 were net-share settled such that we withheld shares with value equivalent to the employees’ minimum statutory tax obligations for the applicable income and other employment taxes and remitted the equivalent amount of cash to the appropriate taxing authorities. Total payments for the employees’ minimum statutory tax obligations are reflected as a financing activity within the accompanying consolidated statements of cash flows. The total shares withheld during the years ended December 31, 2020, 2019 and 2018 were i 808 thousand, i 705 thousand and i 695 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 at the vesting date.

Stock Options

The following table summarizes the status of stock options outstanding and the changes during the periods presented:

Options

Weighted-Average

Options

Weighted-Average

(In thousands, except per share amounts)

Outstanding

Exercise Price

Exercisable

Exercise Price

Balance as of December 31, 2017

i 1,635

i 13.85

i 1,635

i 13.85

Options granted

i 0

i 0.00

Options exercised

( i 92

)

i 14.01

Options forfeited

( i 211

)

i 14.74

Balance as of December 31, 2018

i 1,332

i 13.69

i 1,332

i 13.69

Options granted

i 0

Options exercised

i 0

Options forfeited

( i 98

)

i 14.01

Balance as of December 31, 2019

i 1,234

i 13.67

i 1,234

i 13.67

Options granted

i 0

Options exercised

i 0

Options forfeited

( i 1,234

)

i 13.67

Balance as of December 31, 2020

i 0

i 0.00

i 0

i 0.00

We estimated the fair value of our service-based stock option awards on the date of grant using the Black-Scholes-Merton option-pricing model. Option valuation models, including the Black-Scholes-Merton option-pricing model, require the input of certain assumptions that involve judgment. Changes in the input assumptions can materially affect the fair value estimates and, ultimately, how much we recognize as stock-based compensation expense. Our stock options had a contractual term of i 7 years.

The aggregate intrinsic value of stock options outstanding or exercisable as of December 31, 2020 was i i zero / , as all outstanding stock options were forfeited as of December 31, 2020. The intrinsic value of stock options outstanding represents the amount that would have been received by the option holders had all option holders exercised their stock options as of that date.

The following activity occurred under the Plan:

	Year Ended December 31,
(In thousands)	2020		2019		2018
Total intrinsic value of stock options exercised	$	i 0	$	i 0	$	i 69
Total fair value of share awards vested	$	i 32,218	$	i 29,793	$	i 28,954

Allscripts Employee Stock Purchase Plan

Our Employee Stock Purchase Plan (the “ESPP”) allows eligible employees to authorize payroll deductions of up to i 20% of their base salary to be applied toward the purchase of full shares of common stock on the last business day of each offering period. Offering periods under the ESPP are three months in duration and begin on each March 1^st, June 1^st, September 1^st, and December 1^st. Shares are purchased on the last day of each offering period at a discount of i 15% to the fair market value of our common stock as reported on Nasdaq based on the lower of the closing price either on the first or last business day of each offering period. Employees are limited to purchasing shares under the ESPP having a collective fair market value no greater than $ i 25,000 in any one calendar year. The shares available for purchase under the ESPP may be drawn from either authorized but previously unissued shares of common stock or from reacquired shares of common stock, including shares purchased by us in the open market and held as treasury shares.

We treat the ESPP as a compensatory plan in accordance with GAAP. For each of the years ended December 31, 2020 and 2019, there were i i 2.0 / million shares purchased under the ESPP.

13. Stockholders’ Equity

Stock Repurchases

On August 2, 2018, we announced that our Board approved a stock purchase program (the “2018 Program”) under which we could repurchase up to $ i 250 million of our common stock through December 31, 2020. During 2020, we repurchased i 10.6 million shares of our common stock under the 2018 Program for a total of $ i 102.0 million. During 2019, we repurchased i 10.5 million shares of our common stock under the 2018 Program for a total of $ i 111.5 million.

On November 18, 2020, we announced that our Board approved a new stock purchase program (the “2020 Program”) under which we may repurchase up to $ i 300 million of our common stock through December 31, 2021. The 2020 Program replaced the 2018 Program. During the fourth quarter of 2020, we repurchased i 14.1 million of our common stock under the 2020 Program. This is inclusive of shares repurchased through the accelerated share repurchase agreements noted 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 $ i 200.0 million (the “Prepayment Amount”). Under the terms of the ASR Agreements, on November 30, 2020, we paid the Prepayment Amount to the ASR Counterparties and received on December 2, 2020 an initial delivery of i 11.7 million shares of our common stock, which is approximately i 80% of the total number of shares that could be repurchased under the ASR Agreements if the final purchase price per share equaled the closing price of our common stock on November 30, 2020. These repurchased shares became treasury shares and were recorded as a $ i 165.7 million reduction to shareholder’s equity. The remaining $ i 34.3 million of the Prepayment Amount was recorded as a reduction to shareholders’ 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 for the year ended December 31, 2020. The approximate dollar value of shares of our common stock that may yet be purchased under the 2020 Program following the ASR Agreements is $ i 67.2 million as of December 31, 2020.

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 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 such ASR Agreement. The ASR Agreements contain provisions customary for agreements of this type, including provisions for adjustments to the transaction terms, the circumstances generally under which the 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 ASR Agreements is expected to be completed during the second quarter of 2021, although the settlement may be accelerated at the ASR Counterparties’ option.

Issuance of Common Stock and Warrants

On December 31, 2020, we completed the issuance of a warrant to a commercial partner, as part of a new and expanded commercial relationship, pursuant to which the warrant holder has the right to purchase i 1.5 million shares of our common stock at an exercise price of $ i 9.82 per share, (the closing price of the Company’s common stock on the date definitive agreements with respect to the new and expanded commercial relationship were executed), subject to customary anti-dilution adjustments. The warrant vests in i four equal annual installments of i 375 thousand shares beginning on December 31, 2020 with each additional installment vesting annually thereafter. The warrant expires on i December 31, 2026 and becomes void if certain specified changes to the parties’ commercial relationship occur. The warrant was issued and sold in reliance upon an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), afforded by Section 4(a)(2) of the Securities Act and rules promulgated thereunder and corresponding provisions of state securities laws. The commercial partner is an “accredited investor” as defined in Rule 501(a) under the Securities Act. The warrant is not actively traded and was valued based on an option pricing model that used observable and unobservable market data for inputs. The warrant was valued at $ i 12.4 million and is being amortized into earnings over the three-year vesting period. Beginning in January 2021, the amortization of the warrant value will be included in stock-based compensation expense in the accompanying consolidated statements of cash flows. As of December 31, 2020, the warrant has not been exercised.

On June 30, 2016, we issued to a commercial partner, as part of an overall commercial relationship, unregistered warrants to purchase (i) i 900,000 shares of our common stock, par value $ i 0.01 per share, at a price per share of $ i 12.47, (ii) i 1,000,000 shares of our common stock at a price per share of $ i 14.34 and (iii) i 1,100,000 shares of our common stock at a price per share of $ i 15.59, in each case subject to customary anti-dilution adjustments. The warrants vested in i four equal annual installments of i 750 thousand shares beginning in June 2017 and expire in i June 2026. Our issuance of the warrants was a private placement exempt from registration pursuant to Section 4(a)(2) under the Securities Act. These warrants are not actively traded and were valued based on an option pricing model that used observable and unobservable market data for inputs. The warrants were valued at $ i 11 million and were amortized into earnings over the four-year vesting period. The amortization expense is included as a reduction to revenue in the accompanying consolidated statements of operations. On December 30, 2020, the commercial partner exercised its warrants to purchase i 900,000 shares on a cashless basis. Based on a price per share of $ i 14.18, which was calculated in accordance with the agreement, it resulted in a delivery of i 108 thousand shares. As of December 31, 2020, i no additional warrants have been exercised.

In June 2013, in connection with the issuance of the 1.25% Notes, we issued the 1.25% Warrants exercisable for i 20.1 million shares of our common stock (subject to anti-dilution adjustments under certain circumstances) with an initial exercise price of $ i 23.135 per share, subject to customary adjustments. The net proceeds from the sale of the 1.25% Warrants of $ i i 51.2 / million are included as additional paid in capital in the accompanying consolidated balance sheets as of December 31, 2020 and 2019. i The 1.25% Warrants began to expire as of i October 1, 2020, with expiration continuing to expire over the next 70 trading days. The 1.25% Warrants are exercisable only upon expiration. Additionally, if the market value per share of our common stock exceeds the strike price of the 1.25% Warrants on any trading day during the 70 trading day measurement period, we will, for each such trading day, be obligated to issue to the counterparties a number of shares equal in value to the product of the amount by which such market value exceeds such strike price and 1/70th of the aggregate number of shares of our common stock underlying the 1.25% Warrants transactions, subject to a share delivery cap. / For each 1.25% Warrant that is exercised, we will deliver to the option counterparties a number of shares of our common stock equal to the amount by which the settlement price exceeds the exercise price, divided by the settlement price, plus cash in lieu of fractional shares. We will not receive any additional proceeds if the 1.25% Warrants are exercised. The number of warrants and the strike price are subject to adjustment under certain circumstances. The 1.25% Warrants could separately have a dilutive effect to the extent that the market value per share of our common stock (as measured under the terms of the warrant transactions) exceeds the applicable strike price of the 1.25% Warrants. As of December 31, 2020, i none of the 1.25% Warrants have been exercised.

Issuance of 0.875% Convertible Senior Notes

In December 2019, we issued the i 0.875% Convertible Senior Notes that, at the option of the holders, may be converted into cash, Allscripts’ common stock or a combination of cash and Allscripts’ common stock. The issuance of the 0.875% Convertible Senior Notes generated a $ i 40.1 million equity component for the embedded conversion option, which was recorded as Additional paid-in capital within the consolidated balance sheets as a discount that will be accreted into interest expense through i January 1, 2027 using the interest method. The carrying value of the embedded conversion option was $ i 16.1 million as of December 31, 2020. Refer to Note 10, “Debt” for further information regarding the 0.875% Convertible Senior Notes and embedded conversion option.

14. Earnings (Loss) Per Share

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 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.

The calculations of earnings (loss) per share are as follows:

Year Ended December 31,

(In thousands, except per share amounts)

2020

2019

2018

Basic income (loss) per Common Share:

Loss from continuing operations, net of tax

( i 132,619

)

( i 238,411

)

( i 43,216

)

Net loss attributable to non-controlling interests

i 0

i 424

i 4,527

Net loss from continuing operations attributable to Allscripts Healthcare Solutions, Inc. stockholders

( i 132,619

)

( i 237,987

)

( i 38,689

)

Income from discontinued operations, net of tax

i 833,026

i 55,809

i 451,023

Accretion of redemption preference on redeemable convertible non-controlling interest - discontinued operations

i 0

( i 48,594

)

Net income from discontinued operations attributable to Allscripts Healthcare Solutions, Inc. stockholders

i 833,026

i 55,809

i 402,429

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

i 700,407

( i 182,178

)

i 363,740

Weighted-average common shares outstanding

i 159,281

i 166,306

i 176,038

Basic loss from continuing operations per Common Share

( i 0.83

)

( i 1.43

)

( i 0.22

)

Basic income from discontinued operations per Common Share

i 5.23

i 0.33

i 2.29

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

i 4.40

( i 1.10

)

i 2.07

Diluted income (loss) per Common Share:

Loss from continuing operations, net of tax

( i 132,619

)

( i 238,411

)

( i 43,216

)

Net loss attributable to non-controlling interests

i 0

i 424

i 4,527

Net loss from continuing operations attributable to Allscripts Healthcare Solutions, Inc. stockholders

( i 132,619

)

( i 237,987

)

( i 38,689

)

Income from discontinued operations, net of tax

i 833,026

i 55,809

i 451,023

Accretion of redemption preference on redeemable convertible non-controlling interest - discontinued operations

i 0

( i 48,594

)

Net income from discontinued operations attributable to Allscripts Healthcare Solutions, Inc. stockholders

i 833,026

i 55,809

i 402,429

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

i 700,407

( i 182,178

)

i 363,740

Weighted-average common shares outstanding

i 159,281

i 166,306

i 176,038

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

i 0

Weighted-average common shares outstanding assuming dilution

i 159,281

i 166,306

i 176,038

Diluted (loss) income from continuing operations per Common Share

( i 0.83

)

( i 1.43

)

( i 0.22

)

Diluted income from discontinued operations per Common Share

i 5.23

i 0.33

i 2.29

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

i 4.40

( i 1.10

)

i 2.07

/ /

As a result of the loss from continuing operations, net of tax for the years ended December 31, 2020, 2019 and 2018, we used basic weighted-average common shares outstanding in the calculation of diluted loss per share, 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:

Year Ended December 31,

(In thousands)

2020

2019

2018

Shares subject to anti-dilutive stock options, restricted stock unit awards and warrants excluded from calculation

i 42,845

i 27,945

i 26,175

15. Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

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

(In thousands)

Foreign Currency Translation Adjustments

Unrealized Net Gains (Losses) on Foreign Exchange Contracts

Total

Balance as of December 31, 2017 ⁽¹⁾

( i 2,676

)

i 691

( i 1,985

)

Other comprehensive (loss) income before reclassifications

( i 2,908

)

( i 264

)

( i 3,172

)

Net (gains) losses reclassified from accumulated other comprehensive loss

i 0

( i 232

)

( i 232

)

Net other comprehensive (loss) income

( i 2,908

)

( i 496

)

( i 3,404

)

Balance as of December 31, 2018 ⁽²⁾

( i 5,584

)

i 195

( i 5,389

)

Other comprehensive income (loss) before reclassifications

i 1,192

i 61

i 1,253

Net (gains) losses reclassified from accumulated other comprehensive loss

i 0

( i 256

)

( i 256

)

Net other comprehensive income (loss)

i 1,192

( i 195

)

i 997

Balance as of December 31, 2019 ⁽²⁾

( i 4,392

)

i 0

( i 4,392

)

Other comprehensive income (loss) before reclassifications

i 1,435

i 1,587

i 3,022

Net (gains) losses reclassified from accumulated other comprehensive loss

i 0

( i 468

)

( i 468

)

Net other comprehensive income (loss)

i 1,435

i 1,119

i 2,554

Balance as of December 31, 2020 ⁽³⁾

( i 2,957

)

i 1,119

( i 1,838

)

⁽¹⁾	Net of taxes of $ i 445 thousand for unrealized net gains on marketable securities and foreign exchange contract derivatives.

⁽²⁾	Tax effects for the years ended December 31, 2019 and 2018 include $ i i 149 / thousand arising from the revaluations of tax effects included in accumulated other comprehensive income.

⁽³⁾	Net of taxes of $ i 390 thousand for unrealized net gains on foreign exchange contract derivatives.

Income Tax Effects Related to Components of Other Comprehensive Loss

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

Year Ended December 31, 2020

(In thousands)

Before-Tax Amount

Tax Effect

Net Amount

Foreign currency translation adjustments

i 1,435

i 0

i 1,435

Derivatives qualifying as cash flow hedges:

Foreign exchange contracts:

Net gains (losses) arising during the period

i 2,139

( i 552

)

i 1,587

Net (gains) losses reclassified into income

( i 630

)

i 162

( i 468

)

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

i 1,509

( i 390

)

i 1,119

Other comprehensive income (loss)

i 2,944

( i 390

)

i 2,554

/ /

Year Ended December 31, 2019

(In thousands)

Before-Tax Amount

Tax Effect

Net Amount

Foreign currency translation adjustments

i 1,192

i 0

i 1,192

Derivatives qualifying as cash flow hedges:

Foreign exchange contracts:

Net gains (losses) arising during the period

i 82

( i 21

)

i 61

Net (gains) losses reclassified into income

( i 344

)

i 88

( i 256

)

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

( i 262

)

i 67

( i 195

)

Other comprehensive income

i 930

i 67

i 997

Year Ended December 31, 2018

(In thousands)

Before-Tax Amount

Tax Effect

Net Amount

Foreign currency translation adjustments

( i 2,908

)

i 0

( i 2,908

)

Derivatives qualifying as cash flow hedges:

Foreign exchange contracts:

Net (losses) gains arising during the period

( i 357

)

i 93

( i 264

)

Net (gains) losses reclassified into income ⁽¹⁾

( i 516

)

i 284

( i 232

)

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

( i 873

)

i 377

( i 496

)

Other comprehensive (loss) income

( i 3,781

)

i 377

( i 3,404

)

⁽¹⁾	Net of taxes of $ i 68 thousand for unrealized net gains on foreign exchange contract derivatives.

16. Derivative Financial Instruments

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

Asset Derivatives

Liability Derivatives

(In thousands)

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

i 1,509

Accrued expenses

i 0

Derivatives not subject to hedge accounting:

1.25% Call Option

Other assets

i 0

N/A

1.25% Embedded cash conversion option

N/A

Other liabilities

i 0

Total derivatives

i 1,509

i 0

Asset Derivatives

Liability Derivatives

(In thousands)

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

i 0

Accrued expenses

i 0

Derivatives not subject to hedge accounting:

1.25% Call Option

Other assets

i 84

N/A

1.25% Embedded cash conversion option

N/A

Other liabilities

i 185

Total derivatives

i 84

i 185

N/A – We define “N/A” as disclosure not being applicable

/ /

Foreign Exchange Contracts

We have entered into non-deliverable forward foreign currency exchange contracts with reputable banking counterparties to hedge a portion of our forecasted future 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 December 31, 2020, there were i six forward contracts outstanding that were staggered to mature monthly starting in January 2021 and ending in June 2021. In the future, we may enter into additional forward contracts to increase the amount of hedged monthly INR expenses or initiate hedges for monthly periods beyond June 2021. As of December 31, 2020, the notional amount for each of the outstanding forward contracts was i 225 million INR, or the equivalent of $ i 3.1 million, based on the exchange rate between the United States dollar and the INR in effect as of December 31, 2020. These amounts also approximate the forecasted future INR expenses we target to hedge in any one month in the future. As of December 31, 2020, we estimate that $ i 1.5 million of net unrealized derivative gains included in accumulated other comprehensive income will be reclassified into income within the next i six months.

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

Amount of Gain (Loss)

Recognized in OCI

Location of Gain (Loss) Reclassified from

AOCI into Income

Amount of Gain (Loss) Reclassified

from AOCI into Income

Year Ended December 31,

(In thousands)

2020

2019

2018

2020

2019

2018

Foreign exchange contracts

i 2,139

i 82

( i 357

)

Cost of Revenue

i 249

i 124

i 165

Selling, general and

administrative

expenses

i 122

i 83

i 138

Research and

development

i 259

i 137

i 214

1.25% Call Option

In June 2013, concurrent with the issuance of the 1.25% Notes, we entered into the 1.25% Call Option with certain of the initial purchasers of the 1.25% Notes (the “Option Counterparties”). Assuming full performance by the Option 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 i July 1, 2020, the i 1.25% Notes matured and were repaid in full (refer to Note 10, “Debt”), and the 1.25% Call Option expired.

Aside from the initial payment of a premium to the Option Counterparties of $ i 82.8 million for the 1.25% Call Option, we were not required to make any cash payments to the Option Counterparties under the 1.25% Call Option, and, subject to the terms and conditions thereof, would have been entitled to receive from the Option Counterparties an amount of cash, generally equal to the amount by which the market price per share of our common stock exceeded the strike price of the 1.25% Call Option during the relevant valuation period. The strike price under the 1.25% Call Option was equal to the conversion price of the 1.25% Notes of $ i 17.19 per share of our common stock.

The 1.25% Call Option, which was indexed to our common stock, was a derivative asset that required mark-to-market accounting treatment, due to the cash settlement features, until the 1.25% Call Option settled or expired. The 1.25% Call Option was measured and reported at fair value on a recurring basis within Level 3 of the fair value hierarchy. For further discussion of the inputs used to determine the fair value of the 1.25% Call Option, refer to Note 6, “Fair Value Measurements and Other Investments.”

The 1.25% Call Option did not qualify for hedge accounting treatment. Therefore, the change in fair value of this instrument was recognized immediately in our consolidated statements of operations in Other income (loss), net. Because the terms of the 1.25% Call Option were substantially similar to those of the 1.25% Notes embedded cash conversion option, discussed next, we expected the net effect of those two derivative instruments on our results of operations to be minimal.

100

1.25% Notes Embedded Cash Conversion Option

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 recognized immediately in our consolidated statements of operations in Other income (loss), net until the cash conversion option settled or expired. 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 $ i 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. For further discussion of the inputs used to determine the fair value of the embedded cash conversion option, refer to Note 6, “Fair Value Measurements and Other Investments.”

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

	Year Ended December 31,
(In thousands)	2020			2019			2018
1.25% Call Option	$	( i 84	)	$	( i 9,020	)	$	( i 37,474	)
1.25% Embedded cash conversion option		i 185			i 9,789			i 37,803
Net income included in Other income, net	$	i 101		$	i 769		$	i 329

17. Commitments

Commitment with Strategic Partner

We completed renegotiations with Atos to improve the operating cost structure of our private cloud hosting operations during 2019. The new agreement also provides for the payment of initial annual base fees of $ i 35 million per year (an increase from $ i 30 million) plus charges for volume-based services currently projected using volumes estimated based on historical actuals and forecasted projections. Expenses under our agreements with Atos, which are included in cost of revenue in our consolidated statements of operations, are as follows:

	Year Ended December 31,
(In thousands)	2020		2019		2018
Expenses incurred under Atos agreements	$	i 102,730	$	i 100,089	$	i 55,903

/ / i

18. Discontinued Operations

EPSi and CarePort Discontinued Operations

During 2020, we implemented a strategic initiative to sell i 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 represents a strategic shift that had a major effect on our operations and financial results. These businesses are now reported together as discontinued operations for all periods presented.

On October 15, 2020, we completed the sale of our EPSi business in exchange for $ i 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. Prior to the sale, EPSi 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 i 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 is treated as a discontinued operation. Refer to Note 5, “Business Combinations and Divestitures” for additional information about this transaction.

On December 31, 2020, we completed the sale of our CarePort business in exchange for $ i 1.35 billion, which is subject to certain adjustments for liabilities assumed by WellSky and net working capital as described in the CarePort Purchase Agreement. 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 represents a strategic shift that had a major effect on our operations and financial results. Refer to Note 5, “Business Combinations and Divestitures” for additional information about this transaction.

101

The following table summarizes the major classes of assets and liabilities of EPSi and CarePort, as reported on the consolidated balance sheets as of December 31, 2020 and 2019:

(In thousands)	December 31, 2020		December 31, 2019
Carrying amounts of major classes of assets associated with EPSi and CarePort included as part of discontinued operations:
Accounts receivable, net of allowance of $ i 1,874 as of December 31, 2019	$	i 0	$	i 35,336
Contract assets, net of allowance of $ i 0 as of December 31, 2019		i 0		i 2,690
Prepaid expenses and other current assets		i 0		i 3,845
Total current assets attributable to discontinued operations		i 0		i 41,871

Fixed assets, net		i 0		i 386
Software development costs, net		i 0		i 21,237
Intangible assets, net		i 0		i 7,014
Goodwill		i 0		i 387,907
Contract assets - long-term, net of allowance of $ i 0 as of December 31, 2019		i 0		i 4,034
Right-of-use assets - operating leases		i 0		i 2,263
Other assets		i 0		i 5,180
Total long-term assets attributable to discontinued operations	$	i 0	$	i 428,021

Carrying amounts of major classes of liabilities associated with EPSi and CarePort included as part of discontinued operations:
Accounts payable	$	i 0	$	i 1,190
Accrued expenses		i 6,669		i 381
Income tax payable		i 316,142		i 0
Accrued compensation and benefits		i 0		i 2,788
Deferred revenue		i 0		i 44,224
Current operating lease liabilities		i 0		i 809
Total current liabilities attributable to discontinued operations		i 322,811		i 49,392

Deferred revenue long-term		i 0		i 1,269
Long-term operating lease liabilities		i 0		i 1,574
Total long-term liabilities attributable to discontinued operations	$	i 0	$	i 2,843

102

The following table summarizes the major income and expense line items of EPSi and CarePort as reported in the consolidated statement of operations for the years ended December 31, 2020, 2019 and 2018:

Year ended December 31,

(In thousands)

2020

2019

2018

Major income and expense line items related to EPSi and CarePort:

Revenue:

Software delivery, support and maintenance

i 122,791

i 122,268

i 116,639

Client services

i 14,030

i 16,763

i 15,482

Total revenue

i 136,821

i 139,031

i 132,121

Cost of revenue:

Software delivery, support and maintenance

i 11,424

i 12,482

i 10,737

Client services

i 15,585

i 15,124

i 12,038

Amortization of software development and acquisition-related assets

i 9,053

i 8,166

i 6,194

Total cost of revenue

i 36,062

i 35,772

i 28,969

Gross profit

i 100,759

i 103,259

i 103,152

Selling, general and administrative expenses

i 15,539

i 18,964

i 18,118

Research and development

i 8,269

i 9,065

i 9,673

Amortization of intangible assets

i 29

Income from discontinued operations for EPSi and CarePort

i 76,922

i 75,201

i 75,332

Interest expense

( i 5,241

)

i 0

Other (expense) income, net

( i 192

)

i 2

i 5

Gain on sale of discontinued operations

i 1,156,504

i 0

Income from discontinued operations for EPSi and CarePort before income taxes

i 1,227,993

i 75,203

i 75,337

Income tax provision⁽¹⁾

( i 394,926

)

( i 19,417

)

( i 19,452

)

Income from discontinued operations, net of tax for EPSi and CarePort⁽²⁾

i 833,067

i 55,786

i 55,885

⁽¹⁾	Income tax provision does not agree to the consolidated statement of operations for the year ended December 31, 2019 due to residual amounts related to Netsmart.

⁽²⁾	Income from discontinued operations, net of tax for EPSi and CarePort does not agree to the consolidated statement of operations for the years ended December 31, 2020 and 2019 due to residual amounts related to Netsmart.

Netsmart Discontinued Operation

On December 31, 2018, we sold all of the Class A Common Units of Netsmart held by the Company in exchange for $ i 566.6 million in cash plus a final settlement as determined following the closing. Prior to the sale, Netsmart comprised a separate reportable segment, which due to its significance to our historical consolidated financial statements and results of operations, is reported as a discontinued operation as a result of the sale. Refer to Note 5, “Business Combinations and Divestitures” for additional information about this transaction.

103

The following table summarizes Netsmart’s major income and expense line items as reported in the consolidated statements of operations for the year ended December 31, 2018:

	Year ended December 31,
(In thousands)	2018
Major income and expense line items related to Netsmart:⁽¹⁾
Revenue:
Software delivery, support and maintenance	$	i 214,065
Client services		i 131,166
Total revenue		i 345,231
Cost of revenue:
Software delivery, support and maintenance		i 60,100
Client services		i 94,061
Amortization of software development and acquisition related assets		i 34,357
Total cost of revenue		i 188,518
Gross profit		i 156,713
Selling, general and administrative expenses		i 125,807
Research and development		i 25,315
Amortization of intangible and acquisition-related assets		i 24,029
Loss from discontinued operations of Netsmart		( i 18,438	)
Interest expense		( i 59,541	)
Other income		i 101
Gain on sale of discontinued operations		i 500,471
Income from discontinued operations of Netsmart before income taxes		i 422,593
Income tax provision		( i 31,186	)
Income from discontinued operations, net of tax for Netsmart	$	i 391,407

⁽¹⁾	Activity includes both Netsmart and intercompany transactions that would not have been eliminated if Netsmart’s results were not consolidated.

Horizon Clinicals and Series2000 Revenue Cycle Discontinued Operation

i Two of the product offerings acquired with the EIS Business in 2017, Horizon Clinicals and Series2000 Revenue Cycle, were sunset after March 31, 2018. The decision to discontinue maintaining and supporting these solutions was made prior to our acquisition of the EIS Business and, therefore, they are presented below as discontinued operations. Until the end of the first quarter of 2018, we were involved in ongoing maintenance and support for these solutions until customers transitioned to other platforms. i No disposal gains or losses were recognized during the year ended December 31, 2018 related to these discontinued solutions. We had $ i 0.9 million of accrued expenses associated with the Horizon Clinicals and Series2000 Revenue Cycle businesses on the consolidated balance sheet as of December 31, 2018.

104

The following table summarizes the major income and expense line items of these discontinued solutions, as reported in the consolidated statements of operations for the year ended December 31, 2018:

	Year ended December 31,
(In thousands)	2018
Major classes of line items constituting pretax profit (loss) of discontinued operations for Horizon Clinicals and Series2000 Revenue Cycle:
Revenue:
Software delivery, support and maintenance	$	i 9,441
Client services		i 404
Total revenue		i 9,845
Cost of revenue:
Software delivery, support and maintenance		i 2,322
Client services		i 830
Total cost of revenue		i 3,152
Gross profit		i 6,693
Research and development		i 1,651
Income from discontinued operations for Horizon Clinicals and Series2000 Revenue Cycle before income taxes		i 5,042
Income tax provision		( i 1,311	)
Income from discontinued operations, net of tax for Horizon Clinicals and Series2000 Revenue Cycle	$	i 3,731

/ i

19. Business Segments

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 of 2020, 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 had i three operating segments: (i) Core Clinical and Financial Solutions, (ii) Data, Analytics and Care Coordination and (iii) EPSi. The Core Clinical and Financial Solutions and Data, Analytics and Care Coordination operating segments are the equivalent to the two current reportable segments described below.

During the second quarter of 2020, (i) certain operations were moved between the Core Clinical and Financial Solutions segment, and the Data, Analytics and Care Coordination segment and (ii) a transfer price allocation was recorded between the Core Clinical and Financial Solutions segment and the Data, Analytics and Care Coordination segment. 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” were 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 practice reimbursement and payer and life sciences solutions, which are mainly targeted at 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 operating segment was included in the “Unallocated Amounts” category as it did not meet the requirements to be a reportable segment nor the criteria to be aggregated into the i two reportable segments. The segment disclosures below for the years ended December 31, 2019 and 2018 have been revised to conform to the current year presentation.

105

On October 15, 2020, we completed the sale of our EPSi business. As noted above, prior to the sale, EPSi was included in “Unallocated Amounts.” On December 31, 2020, we completed the sale of our CarePort business. Prior to the sale, CarePort was included in the Data, Analytics and Care Coordination reportable segment. The divestitures of EPSi and CarePort are being treated as discontinued operations as they were part of the same strategic initiative, were sold within the same period, and have a combined major effect on our consolidated financial statements and results of operations. Refer to Note 5, “Business Combinations and Divestitures” and to Note 18, “Discontinued Operations” for additional information.

We sold all of our investment in Netsmart on December 31, 2018. Prior to the sale, Netsmart comprised a separate reportable segment, which due to its significance to our historical consolidated financial statements and results of operations, is reported as a discontinued operation as a result of the sale. In addition, the results of operations related to two of the product offerings acquired with the EIS Business (Horizon Clinicals and Series2000) that were sunset in 2018 are also presented throughout these financial statements as discontinued operations. These two product offerings were included within the historical Provider reportable segment, which is now reported within the Core Clinical and Financial Solutions segment. Refer to Note 18, “Discontinued Operations.”

Our Chief Operating Decision Maker (“CODM”) uses segment revenues, gross profit and loss from operations as measures of performance and to make decisions about the allocation of resources. We do not track our assets by segment.

Year Ended December 31,

(In thousands)

2020

2019

2018

Revenue:

Core Clinical and Financial Solutions

i 1,254,249

i 1,377,147

i 1,379,499

Data, Analytics and Care Coordination

i 261,321

i 262,664

i 246,718

Unallocated Amounts

( i 12,870

)

( i 7,200

)

( i 8,376

)

Total revenue

i 1,502,700

i 1,632,611

i 1,617,841

Gross profit:

Core Clinical and Financial Solutions

i 434,288

i 473,033

i 491,421

Data, Analytics and Care Coordination

i 131,407

i 137,254

i 129,970

Unallocated Amounts

i 0

Total gross profit

i 565,695

i 610,287

i 621,391

Loss from operations:

Core Clinical and Financial Solutions

( i 116,139

)

( i 80,465

)

( i 158,440

)

Data, Analytics and Care Coordination

( i 14,741

)

( i 19,224

)

( i 9,944

)

Unallocated Amounts

i 0

Total loss from operations

( i 130,880

)

( i 99,689

)

( i 168,384

)

20. Supplemental Disclosures

The majority of the restricted cash balance as of December 31, 2020 represents the remaining balance of the escrow account established as part of the acquisition of Netsmart in 2016 to be used by Netsmart to facilitate the integration of our Homecare^TM business within Netsmart and an escrow fund related to a previous acquisition associated with the acquired EIS Business.

	December 31
(In thousands)	2020		2019
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	i 531,104	$	i 129,668
Restricted cash		i 6,361		i 7,871
Total cash, cash equivalents and restricted cash	$	i 537,465	$	i 137,539

/ /

106

	Year Ended December 31,
(In thousands)	2020		2019		2018
Cash paid during the period for:
Interest, including convertible senior notes	$	i 24,616	$	i 23,917	$	i 33,200
Income taxes paid, net of tax refunds	$	i 76,595	$	i 42,972	$	i 10,108
Non-cash transactions:
Accretion of redemption preference on redeemable convertible non-controlling interest - discontinued operations	$	i 0	$	i 0	$	i 48,594
Obligations incurred to purchase capitalized software or enter into finance leases	$	i 0	$	i 0	$	i 1,501
Contributions of assets in exchange for equity interest	$	i 0	$	i 0	$	i 4,000
Issuance of treasury stock to commercial partner	$	i 752	$	i 701	$	i 1,121

Accrued expenses consist of the following:

	December 31,
(In thousands)	2020		2019
Royalties, certain third-party product costs and licenses	$	i 37,841	$	i 35,064
Practice Fusion settlement		i 0		i 145,000
Other		i 62,421		i 90,217
Total Accrued expenses	$	i 100,262	$	i 270,281

Other consists of various accrued expenses and no individual item accounted for more than i 5% of the current liabilities balance at the respective balance sheet dates.

Prepaid and other current assets consists of the following:

	December 31,
(In thousands)	2020		2019
Prepaid assets	$	i 132,944	$	i 142,191
Other current assets		i 3,320		i 1,954
Total Prepaid and other current assets	$	i 136,264	$	i 144,145

/ i

Other assets consist of the following:

	December 31,
(In thousands)	2020		2019
Fair value of i i 1.25 / % Call Option	$	i 0	$	i 84
Long-term deferred hosting fees		i 11,025		i 36,002
Long-term prepaid commissions		i 27,882		i 28,876
Investments in non-marketable securities		i 35,805		i 43,806
Long-term deposits and other assets		i 16,916		i 10,819
Total Other assets	$	i 91,628	$	i 119,587

21. Geographic Information

Revenues are attributed to geographic regions based on the location where the sale originated. Our revenues by geographic area are summarized below:

Year Ended December 31,

(In thousands)

2020

2019

2018

United States

i 1,439,737

i 1,562,107

i 1,565,057

Canada

i 15,624

i 16,495

i 15,377

Other international

i 47,339

i 54,009

i 37,407

Total

i 1,502,700

i 1,632,611

i 1,617,841

/ /

107

A summary of our long-lived assets, comprised of fixed assets by geographic area, is presented below:

	December 31,
(In thousands)	2020		2019
United States	$	i 62,016	$	i 77,736
India		i 5,876		i 5,321
Israel		i 2,611		i 3,240
Canada		i 187		i 51
Other international		i 1,472		i 1,605
Total	$	i 72,162	$	i 87,953

22. Contingencies

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

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

The outcome of legal proceedings is inherently uncertain, and we may incur substantial defense costs and expenses defending any of these matters. In the opinion of our management, the ultimate disposition of pending legal proceedings or claims will not have a material adverse effect on our consolidated financial position, liquidity or results of operations. However, if one or more of these 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 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 January 27, 2020, Practice Fusion entered into the Settlement Agreements resolving the investigations conducted by the DOJ and the U.S. Attorney’s Office. See risk factor entitled “The failure by Practice Fusion to comply with the terms of its settlement agreements with the DOJ could have a material and adverse impact on our business, results of operations and financial condition, and, even if Practice Fusion complies with those settlement agreements, the costs and burdens of compliance could be significant, and we may face additional investigations and proceedings from other governmental entities or third parties related to the same or similar conduct underlying the agreements with the DOJ.” The terms of Settlement Agreements resolved, among other things, allegations that Practice Fusion, long before its acquisition by Allscripts and concerning conduct about which Allscripts was unaware at the time of the acquisition, violated the AKS through the manner by which a sponsored Clinical Decision Support arrangement was sold to an opioid manufacturer and other AKS allegations 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. The Settlement Agreements also required Practice Fusion to pay a criminal fine of $ i 25.3 million, a forfeiture payment of $ i 959,700 and a civil settlement of $ i 118.6 million, which included $ i 5.2 million designated for the state Medicaid program expenditures, all of which have now been paid in full.

108

23. Quarterly Financial Information (Unaudited)

The following tables contain a summary of our unaudited quarterly consolidated results of operations for our last eight fiscal quarters, which have been restated to illustrate CarePort and EPSi as discontinued operations.

Quarter Ended

December 31,

September 30,

June 30,

March 31,

(In thousands, except per share amounts)

2020

Revenue

i 386,414

i 365,618

i 369,304

i 381,364

Cost of revenue

i 225,391

i 230,480

i 231,706

i 249,428

Gross profit

i 161,023

i 135,138

i 137,598

i 131,936

Selling, general and administrative expenses

i 93,777

i 93,442

i 109,897

i 92,825

Research and development

i 54,287

i 46,352

i 46,045

i 59,377

Asset impairment charges

i 74,759

i 210

i 0

Amortization of intangible and acquisition-related assets

i 6,278

i 6,295

i 6,321

i 6,710

Loss from operations

( i 68,078

)

( i 11,161

)

( i 24,665

)

( i 26,976

)

Interest expense

( i 6,458

)

( i 6,667

)

( i 10,314

)

( i 10,665

)

Other income (loss), net

i 9

i 398

( i 875

)

i 522

Impairment of long-term investments

i 0

( i 1,025

)

( i 550

)

i 0

Equity in net (loss) income of unconsolidated investments

( i 223

)

i 383

i 16,834

i 200

Loss from continuing operations before income taxes

( i 74,750

)

( i 18,072

)

( i 19,570

)

( i 36,919

)

Income tax benefit (provision)

i 10,051

i 4,116

( i 2,009

)

i 4,534

Loss from continuing operations, net of tax

( i 64,699

)

( i 13,956

)

( i 21,579

)

( i 32,385

)

Income from discontinued operations

i 16,847

i 19,545

i 18,838

i 16,218

Gain on sale of discontinued operations

i 1,156,504

i 0

Income tax effect on discontinued operations

( i 380,828

)

( i 5,047

)

( i 4,864

)

( i 4,187

)

Income from discontinued operations, net of tax

i 792,523

i 14,498

i 13,974

i 12,031

Net income (loss)

i 727,824

i 542

( i 7,605

)

( i 20,354

)

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

i 727,824

i 542

( i 7,605

)

( i 20,354

)

Net income (loss) attributable to Allscripts Healthcare Solutions, Inc. stockholders per share: ⁽³⁾

Basic

Continuing operations

( i 0.43

)

( i 0.09

)

( i 0.13

)

( i 0.20

)

Discontinued operations

i 5.25

i 0.09

i 0.08

i 0.07

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

i 4.82

i 0.00

( i 0.05

)

( i 0.13

)

Diluted

Continuing operations

( i 0.43

)

( i 0.09

)

( i 0.13

)

( i 0.20

)

Discontinued operations

i 5.25

i 0.09

i 0.08

i 0.07

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

i 4.82

i 0.00

( i 0.05

)

( i 0.13

)

/ /

109

Quarter Ended

December 31,

September 30,

June 30,

March 31,

(In thousands, except per share amounts)

2019

2019 ⁽²⁾

2019 ⁽¹⁾

2019

Revenue

i 414,330

i 408,280

i 410,883

i 399,118

Cost of revenue

i 261,711

i 259,767

i 251,680

i 249,166

Gross profit

i 152,619

i 148,513

i 159,203

i 149,952

Selling, general and administrative expenses

i 108,275

i 96,080

i 100,462

i 95,991

Research and development

i 60,112

i 61,062

i 61,922

i 62,347

Asset impairment charges

i 6,800

i 248

i 3,691

i 98

Goodwill impairment charge

i 25,700

i 0

Amortization of intangible and acquisition-related assets

i 6,834

i 6,840

i 6,724

i 6,790

Loss from operations

( i 55,102

)

( i 15,717

)

( i 13,596

)

( i 15,274

)

Interest expense

( i 11,725

)

( i 10,839

)

( i 10,424

)

( i 10,184

)

Other income (loss), net

i 4,796

i 781

( i 144,994

)

i 513

(Impairment) recovery of long-term investments

( i 1,696

)

i 0

i 1,045

Equity in net income (loss) of unconsolidated investments

i 125

i 386

i 218

( i 64

)

Loss from continuing operations before income taxes

( i 63,602

)

( i 25,389

)

( i 168,796

)

( i 23,964

)

Income tax benefit

i 29,738

i 5,645

i 5,262

i 2,695

Loss from continuing operations, net of tax

( i 33,864

)

( i 19,744

)

( i 163,534

)

( i 21,269

)

Income from discontinued operations

i 20,078

i 18,899

i 18,339

i 17,919

Income tax effect on discontinued operations

( i 5,184

)

( i 4,880

)

( i 4,735

)

( i 4,627

)

Income from discontinued operations, net of tax

i 14,894

i 14,019

i 13,604

i 13,292

Net loss

( i 18,970

)

( i 5,725

)

( i 149,930

)

( i 7,977

)

Net loss attributable to non-controlling interest

i 0

i 424

Net loss attributable to Allscripts Healthcare Solutions, Inc. stockholders

( i 18,970

)

( i 5,725

)

( i 149,930

)

( i 7,553

)

Net loss attributable to Allscripts Healthcare Solutions, Inc. stockholders per share: ⁽³⁾

Basic

Continuing operations

( i 0.21

)

( i 0.11

)

( i 0.98

)

( i 0.12

)

Discontinued operations

i 0.09

i 0.08

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

( i 0.12

)

( i 0.03

)

( i 0.90

)

( i 0.04

)

Diluted

Continuing operations

( i 0.21

)

( i 0.11

)

( i 0.98

)

( i 0.12

)

Discontinued operations

i 0.09

i 0.08

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

( i 0.12

)

( i 0.03

)

( i 0.90

)

( i 0.04

)

⁽¹⁾	Results of operations for the quarter include the results of operations of a third party engaged in a specialty prescription drug platform since June 10, 2019.

⁽²⁾	Results of operations for the quarter include the results of operations of Pinnacle and Diabetes and Collaborative Registries since July 2, 2019.

⁽³⁾	The sum of the quarterly per share amounts may not equal per share amounts reported for year to date periods. This is due to changes in the number of weighted-average shares outstanding and the effects of rounding for each period.

110

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act, as of the end of the period covered by this Form 10-K.

Based on management’s evaluation, our chief executive officer and our chief financial officer concluded that our disclosure controls and procedures are designed to, and were effective as of December 31, 2020 to, provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2020 based on the guidelines established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Our internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP.

Based on the results of our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2020. We reviewed the results of management’s assessment with the Audit Committee of our Board. The effectiveness of our internal control over financial reporting as of December 31, 2020 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in its report which is included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K.

Changes in Internal Control over Financial Reporting

We have implemented internal controls related to the new credit loss accounting standard which we adopted on January 1, 2020. There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2020, 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.

Inherent Limitations on Effectiveness of Controls

Our management, including our chief executive officer and chief financial officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that we have detected all control issues and instances of fraud, if any, within our Company. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

111

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information concerning our executive officers required by this Item is incorporated by reference from Part I, Item 1 of this Form 10-K, under the heading “Information about our Executive Officers.”

Other information required by this Item is incorporated by reference from the information contained under the proposal “Election of Directors,” the heading “Directors,” and the subheadings “Section 16(a) Beneficial Ownership Reporting Compliance,” “Code of Conduct” and “Audit Committee Financial Experts” under the heading “Corporate Governance” in our 2021 Proxy Statement (the “2021 Proxy Statement”) to be filed with the U.S. Securities and Exchange Commission (the “SEC”) within 120 days after December 31, 2020.

Item 11. Executive Compensation

The information required by this Item is incorporated by reference from information contained under the headings “Compensation Discussion and Analysis” and “Executive Compensation” and the subheadings “Board Oversight of Risk Management,” “Compensation Committee Interlocks and Insider Participation,” and “Compensation of Directors” under the heading “Corporate Governance” in the 2021 Proxy Statement to be filed with the SEC within 120 days after December 31, 2020.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item is incorporated by reference from information contained under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in the 2021 Proxy Statement to be filed with the SEC within 120 days after December 31, 2020.

Item 13. Certain Relationships and Related Transactions and Director Independence

The information required by this Item is incorporated by reference from information contained under the subheadings “Certain Relationships and Related Transactions” and “Board Meetings” under the heading “Corporate Governance” in the 2021 Proxy Statement to be filed with the SEC within 120 days after December 31, 2020.

Item 14. Principal Accountant Fees and Services

The information required by this Item is incorporated by reference from information contained under the subheadings “Fees and Related Expenses Paid to Auditors” and “Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Registered Public Accounting Firm” under the proposal “Ratification of Appointment of Independent Registered Public Accounting Firm” in the 2021 Proxy Statement to be filed with the SEC within 120 days after December 31, 2020.

112

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)(1) Financial Statements

Our consolidated financial statements are included in Part II of this Form 10-K:

	Page
Report of Independent Registered Public Accounting Firm		55
Report of Independent Registered Public Accounting Firm		57
Consolidated Balance Sheets as of December 31, 2020 and 2019		58
Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018		60
Consolidated Statements of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018		61
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2020, 2019 and 2018		62
Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018		63
Notes to Consolidated Financial Statements		64

(a)(2) Financial Statement Schedules

Schedule II—Valuation and Qualifying Accounts

Charged to

Balance at

Expenses/

Write-Offs,

Balance at

Beginning of

Against

Net of

End of

(In thousands)

Year

Revenue

Recoveries

Year

Allowance for doubtful accounts and sales credits

Year ended December 31, 2019

i 25,826

i 3,467

( i 7,288

)

i 22,005

Year ended December 31, 2018

i 12,317

i 21,081

( i 7,572

)

i 25,826

All other schedules are omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto.

113

(a)(3) Exhibits

Exhibit Number

Exhibit Description

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

Furnished Herewith

Form

Exhibit

Filing Date

2.1

8-K

2.1

August 4, 2017

2.2

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

10-Q

2.3

November 9, 2017

2.3

Asset Purchase Agreement, dated as of February 15, 2018, by and among Hyland Software, Inc., Allscripts Healthcare, LLC, PF2 EIS LLC, Allscripts Software, LLC and Allscripts Healthcare Solutions, Inc.

8-K

2.1

February 16, 2018

2.4

Agreement and Plan of Merger, dated as of January 5, 2018, by and among Allscripts Healthcare, LLC, Presidio Sub, Inc., Practice Fusion, Inc. and Fortis Advisors LLC, as representative of the Holders

10-Q

2.2

May 8, 2018

2.5

Agreement and Plan of Merger, dated as of April 27, 2018, by and among Allscripts Healthcare, LLC, FollowMyHealth Merger Sub, Inc., Health Grid Holding Company, the persons listed on the schedules thereto and Raj Toleti in his capacity as the representative of the Stockholders

10-Q

2.2

August 6, 2018

2.6

Unit Purchase Agreement, dated as of December 7, 2018, by and among Allscripts Healthcare, LLC, Allscripts Next, LLC, Allscripts Healthcare Solutions, Inc. and the Purchasers named in the schedules thereto.

8-K

2.1

December 11, 2018

2.7

Asset Purchase Agreement, dated as of July 30, 2020, by and 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.

8-K

2.1

August 3, 2020

2.8

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

8-K

2.1

October 15, 2020

3.1

Fifth Amended and Restated Certificate of Incorporation of Allscripts Healthcare Solutions, Inc.

10-K

3.1

February 29, 2016

3.2

By-Laws of Allscripts Healthcare Solutions, Inc.

8-K

3.1

August 20, 2015

4.1

Indenture, dated as of December 9, 2019, by and between Allscripts Healthcare Solutions, Inc. and U.S. Bank National Association

8-K

4.1

Form of 0.875% Convertible Senior Note due 2027 (included in Exhibit 4.1)

4.2

8-K

4.2

Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

4.3

114

Exhibit Number

Exhibit Description

Second Amended and Restated Credit Agreement, dated as of February 15, 2018, by and among Allscripts Healthcare Solutions, Inc., Allscripts Healthcare, LLC, the lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and Fifth Third Bank, KeyBank National Association, SunTrust Bank, and Wells Fargo Bank, National Association, as Syndication Agents

Furnished Herewith

Form

Exhibit

Filing Date

10.1

8-K

10.1

February 15, 2018

10.2

First Amendment, dated as of August 7, 2019, to the Second Amended and Restated Credit Agreement, dated as of February 15, 2018, among Allscripts Healthcare Solutions, Inc., Allscripts Healthcare, LLC, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent

8-K

10.2

August 9, 2019

10.3

Second Amendment, dated as of July 20, 2020, to the Second Amended and Restated Credit Agreement, dated as of February 16, 2018, among Allscripts Healthcare Solutions, Inc., Allscripts Healthcare, LLC, the lenders from time to time parties thereto and JPMorgan Chase Bank, N.A. as Administrative Agent

10-Q

10.2

July 31, 2020

10.4

Guarantee and Collateral Agreement, dated as of June 28, 2013, by and among Allscripts Healthcare Solutions, Inc., Allscripts Healthcare, LLC and certain other subsidiaries party thereto, and JPMorgan Chase Bank, N.A., as administrative agent

8-K

10.2

July 2, 2013

10.5

Accelerated Share Repurchase Master Confirmation dated November 30, 2020

10.6

Accelerated Share Repurchase Master Confirmation dated November 30, 2020

10.7

Deferred Prosecution Agreement, dated January 27, 2020

8-K

10.1

January 28, 2020

10.8

Civil Settlement Agreement, dated January 26, 2020

8-K

10.2

January 28, 2020

10.9

Letter Agreement, dated April 8, 2020, between the U.S. Department of Justice and Practice Fusion, amending Exhibit A of the Civil Settlement Agreement dated January 26, 2020

10-Q

10.1

May 8, 2020

10.10

Capped call transaction confirmation, dated as of December 4, 2019, by and between JPMorgan Chase Bank, National Association, New York Branch and Allscripts Healthcare Solutions, Inc.

8-K

10.1

Capped call transaction confirmation, dated as of December 4, 2019, by and between Wells Fargo Bank, National Association and Allscripts Healthcare Solutions, Inc.

10.11

8-K

10.2

Capped call transaction confirmation, dated as of December 4, 2019, by and between Bank of America, N.A. and Allscripts Healthcare Solutions, Inc.

10.12

8-K

10.3

115

Exhibit Number

Exhibit Description

Capped call transaction confirmation, dated as of December 4, 2019, by and between Deutsche Bank AG, London Branch and Allscripts Healthcare Solutions, Inc.

Furnished Herewith

Form

Exhibit

Filing Date

10.13

8-K

10.4

Additional capped call transaction confirmation, dated as of December 18, 2019, by and between JPMorgan Chase Bank, National Association, New York Branch and Allscripts Healthcare Solutions, Inc.

10.14

8-K

10.1

Additional capped call transaction confirmation, dated as of December 18, 2019, by and between Wells Fargo Bank, National Association and Allscripts Healthcare Solutions, Inc.

10.15

8-K

10.2

Additional capped call transaction confirmation, dated as of December 18, 2019, by and between Bank of America, N.A. and Allscripts Healthcare Solutions, Inc.

10.16

8-K

10.3

Additional capped call transaction confirmation, dated as of December 18, 2019, by and between Deutsche Bank AG, London Branch and Allscripts Healthcare Solutions, Inc.

10.17

8-K

10.4

Allscripts Healthcare Solutions, Inc., Amended and Restated 1993 Stock Incentive Plan (as amended and restated effective October 8, 2009)

10.18

†

10-Q

10.3

October 13, 2009

10.19

†

Allscripts Healthcare Solutions, Inc. Second Amended and Restated 2011 Stock Incentive Plan

8-K

10.1

May 24, 2017

10.20

†

Allscripts Healthcare Solutions, Inc. Amended and Restated 2019 Stock Incentive Plan

S-8

4.3

May 22, 2020

10.21

†

Amended and Restated Allscripts Healthcare Solutions, Inc. Director Deferred Compensation Plan

10-Q

10.16

August 9, 2013

10.22

†

Form of Restricted Stock Unit Award Agreement (Directors)

10-KT

10.37

Form of Restricted Stock Unit Award Agreement (February 2011)

10.23

†

10-KT

10.38

Form of Performance-Based Restricted Stock Unit Award Agreement

10.24

†

10-KT

10.39

Form of Performance-Based Restricted Stock Unit Award Agreement (TSR)

10.25

†

10-KT

10.40

Form of Restricted Stock Unit Award Agreement for Non-Employee Directors (2011 Stock Incentive Plan)

10.26

†

10-Q

10.4

August 9, 2011

10.27

†

Form of Time-Based Vesting Restricted Stock Unit Award Agreement for Employees (2011 Stock Incentive Plan)

10-Q

10.5

August 9, 2011

116

Exhibit Number

Exhibit Description

Form of Stock Option Agreement

Furnished Herewith

Form

Exhibit

Filing Date

10.28

†

10-K

10.38

Form of Performance-Based Restricted Stock Unit Award Agreement (TSR)

10.29

†

10-K

10.39

Form of Performance-Based Restricted Stock Unit Award Agreement (TSR) (February 2014)

10.30

†

10-K

10.29

Form of Performance-Based Restricted Stock Unit Award Agreement (TSR) for Paul M. Black

10.31

†

10-K

10.40

Amendment to Performance-Based Restricted Stock Unit Award Agreement, dated February 25, 2014, between Allscripts Healthcare Solutions, Inc. and Paul M. Black

10.32

†

10-K

10.31

March 2, 2015

10.33

†

Amendment No. 1 to Performance-Based Restricted Stock Unit Award Agreement, dated December 24, 2012, between Allscripts Healthcare Solutions, Inc. and Paul M. Black

10-K

10.31

Amendment No. 2 to Performance-Based Restricted Stock Unit Award Agreement, dated December 24, 2012, between Allscripts Healthcare Solutions, Inc. and Paul M. Black

10.34

†

8-K

99.1

December 31, 2014

10.35

†

Form of Restricted Stock Unit Award Agreement for Paul M. Black

8-K

10.41

Employment Agreement, dated as of December 19, 2012, between Allscripts Healthcare Solutions, Inc. and Paul M. Black

10.36

†

8-K

10.1

December 19, 2012

10.37

†

Amendment No. 1 to Employment Agreement, effective October 1, 2015, between Allscripts Healthcare Solutions, Inc. and Paul M. Black

8-K

10.1

October 7, 2015

10.38

†

Employment Agreement, dated as of October 10, 2012 but effective as of October 29, 2012, between Allscripts Healthcare Solutions, Inc. and Richard Poulton

10-K

10.67

First Amendment to Employment Agreement between Allscripts Healthcare Solutions, Inc. and Richard Poulton

10.39

†

8-K

10.1

August 3, 2020

10.40

†

Employment Agreement, dated as of October 10, 2012 but effective as of November 12, 2012, between Allscripts Healthcare Solutions, Inc. and Dennis Olis

10-K

10.39

Employment Agreement, dated as of May 28, 2013, between Allscripts Healthcare Solutions, Inc. and Brian Farley

10.41

†

10-K

10.40

Employment Agreement, dated as of October 30, 2016, effective November 1, 2016, between Allscripts Healthcare Solutions, Inc. and Lisa Khorey

10.42

†

10-K

10.49

February 27, 2017

117

Exhibit Number

Exhibit Description