SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________



☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

~~(State or Other Jurisdiction of~~

~~Incorporation or Organization)~~

~~(I.R.S. Employer~~

~~Identification No.)~~

Registrant’s Telephone Number, Including Area Code: (~~866~~) (866) 871-8519

____________________

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange

As of August 5, ~~2019~~,2020, there were ~~46,662,179~~46,987,619 shares of common stock, $0.01 par value, outstanding.

TABLE OF CONTENTS


Item		Page

	PART I - FINANCIAL INFORMATION

1.	Condensed Consolidated Financial Statements (unaudited):	1
	Condensed Consolidated Balance Sheets, As of June 3 0 , 2020 and December 31, 2019	1
	Condensed Consolidated Statements of Comprehensive Income, For the Three and Six Months Ended June 30, 2020 and 2019	2
	Condensed Consolidated Statements of Stockholders’ Equity, For the Six Months Ended June 30, 2020 and 2019	3
	Condensed Consolidated Statements of Cash Flows, For the Six Months Ended June 30, 2020 and 2019	4
	Notes to Unaudited Condensed Consolidated Financial Statements	6
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
3.	Quantitative and Qualitative Disclosures about Market Risk	30
4.	Controls and Procedures	30

	PART II - OTHER INFORMATION


1.	Legal Proceedings	31
1A.	Risk Factors	31
2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
3.	Defaults Upon Senior Securities	32
4.	Mine Safety Disclosures	32
5.	Other Information	32
6.	Exhibits	33
	Signatures	34

Item Page

PART I - FINANCIAL INFORMATION

1.
Condensed Consolidated Financial Statements (unaudited):
1

Condensed Consolidated Balance Sheets, As of June 30, 2019 and December 31, 2018
1

Condensed Consolidated Statements of Comprehensive Income, For the Three and Six Months Ended June 30, 2019 and 2018
2

Condensed Consolidated Statements of Stockholders’ Equity, For the Six Months Ended June 30, 2019 and 2018
3

Condensed Consolidated Statements of Cash Flows, For the Six Months Ended June 30, 2019 and 2018
4

Notes to Unaudited Condensed Consolidated Financial Statements
6
2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
19
3.
Quantitative and Qualitative Disclosures about Market Risk
27
4.
Controls and Procedures
27

PART II - OTHER INFORMATION

1.
Legal Proceedings
28
1A.
Risk Factors
28
2.
Unregistered Sales of Equity Securities and Use of Proceeds
28
3.
Defaults Upon Senior Securities
28
4.
Mine Safety Disclosures
28
5.
Other Information
28
6.
Exhibits
29

Signatures
30

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands, except par value)

June 30, 2019 December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents $ 20,937
$ 13,856
Accounts receivable, net of allowances of $12,273 and $10,560 at June 30, 2019 and December 31, 2018, respectively 369,372
365,871
Accounts receivable, subcontractor 50,058
50,143
Prepaid expenses 13,966
12,409
Other current assets 35,535
39,887
Total current assets 489,868
482,166
Restricted cash, cash equivalents and investments 65,919
59,331
Fixed assets, net of accumulated depreciation of $121,354 and $114,413 at June 30, 2019 and December 31, 2018, respectively 97,249
90,419
Operating lease right-of-use assets 95,247
—
Other assets 109,909
96,152
Goodwill 588,457
438,506
Intangible assets, net of accumulated amortization of $128,932 and $114,924 at June 30, 2019 and December 31, 2018, respectively 409,439
326,147
Total assets $ 1,856,088
$ 1,492,721
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 124,672
$ 149,603
Accrued compensation and benefits 149,937
135,059
Current portion of notes payable 3,750
—
Current portion of operating lease liabilities 13,068
—
Deferred revenue 11,053
12,365
Other current liabilities 14,344
10,243
Total current liabilities 316,824
307,270

Revolving credit facility 196,000
120,000
Notes payable, less unamortized fees 466,610
320,607
Deferred income taxes, net 39,273
27,326
Operating lease liabilities 97,355
—
Other long-term liabilities 59,586
78,528
Total liabilities 1,175,648
853,731
Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.01 par value; 10,000 shares authorized; none issued and outstanding at June 30, 2019 and December 31, 2018 —
—
Common stock, $0.01 par value; 200,000 shares authorized; 49,223 issued and 46,662 outstanding at June 30, 2019 and 48,809 issued and 46,643 outstanding at December 31, 2018 492
488
Additional paid-in capital 450,080
452,730
Treasury stock, at cost (2,561 and 2,166 shares at June 30, 2019 and December 31, 2018, respectively) (119,143 ) (100,438 )
Retained earnings 349,050
286,059
Accumulated other comprehensive income (loss) (39 ) 151
Total stockholders’ equity 680,440
638,990
Total liabilities and stockholders’ equity $ 1,856,088
$ 1,492,721


	June 30, 2020		December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	43,067	$	82,985
Accounts receivable, net of allowances of $8,532 and $3,332 at June 30, 2020 and December 31, 2019, respectively	366,574		352,685
Accounts receivable, subcontractor	58,469		72,714
Prepaid expenses	15,547		11,669
Other current assets	34,982		40,446
Total current assets	518,639		560,499
Restricted cash, cash equivalents and investments	56,362		62,170
Fixed assets, net of accumulated depreciation of $145,850 and $132,900 at June 30, 2020 and December 31, 2019, respectively	113,975		104,832
Operating lease right-of-use assets	85,119		89,866
Other assets	120,910		120,254
Goodwill	870,074		595,551
Intangible assets, net of accumulated amortization of $179,916 and $151,417 at June 30, 2020 and December 31, 2019, respectively	599,737		398,474
Total assets	$	2,364,816	$	1,931,646
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	144,824	$	156,140
Accrued compensation and benefits	171,007		170,932

Current portion of notes payable	7,813		—
Current portion of operating lease liabilities	15,480		13,943
Deferred revenue	11,759		11,788
Other current liabilities	33,653		25,302
Total current liabilities	384,536		378,105
Revolving credit facility	100,000		—
Notes payable, less unamortized fees	856,106		617,159
Deferred income taxes, net	87,649		46,618
Operating lease liabilities	85,504		91,209
Other long-term liabilities	73,615		61,813
Total liabilities	1,587,410		1,194,904
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value; 10,000 shares authorized; NaN issued and outstanding at June 30, 2020 and December 31, 2019	—		—
Common stock, $0.01 par value; 200,000 shares authorized; 49,542 issued and 46,981 outstanding at June 30, 2020 and 49,283 issued and 46,722 outstanding at December 31, 2019	495		493
Additional paid-in capital	461,824		455,193
Treasury stock, at cost (2,561 shares at June 30, 2020 and December 31, 2019)	(119,143)		(119,143)
Retained earnings	434,183		400,047
Accumulated other comprehensive income	47		152
Total stockholders’ equity	777,406		736,742
Total liabilities and stockholders’ equity	$	2,364,816	$	1,931,646

See accompanying notes to unaudited condensed consolidated financial statements.

AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited and in thousands, except per share amounts)


	Three Months Ended June 30,					Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018		2019			2018			2020		2019		2020		2019
Revenue	$	535,177		$	558,108	$	1,067,618		$	1,080,597	Revenue	$	608,351	$	535,177	$	1,210,812	$	1,067,618
Cost of revenue	355,635			377,152		711,317			731,817		Cost of revenue	410,811		355,635		811,206		711,317
Gross profit	179,542			180,956		356,301			348,780		Gross profit	197,540		179,542		399,606		356,301
Operating expenses:											Operating expenses:
Selling, general and administrative	121,668			115,535		241,665			220,272		Selling, general and administrative	137,068		121,668		283,302		241,665
Depreciation and amortization	12,718			10,606		24,428			18,492		Depreciation and amortization	22,071		12,718		42,160		24,428
Total operating expenses	134,386			126,141		266,093			238,764		Total operating expenses	159,139		134,386		325,462		266,093
Income from operations	45,156			54,815		90,208			110,016		Income from operations	38,401		45,156		74,144		90,208
Interest expense, net, and other	6,065			6,376		11,738			11,711		Interest expense, net, and other	11,443		6,065		22,497		11,738
Income before income taxes	39,091			48,439		78,470			98,305		Income before income taxes	26,958		39,091		51,647		78,470
Income tax expense	10,222			12,910		15,479			20,095		Income tax expense	4,633		10,222		16,357		15,479
Net income	$	28,869		$	35,529	$	62,991		$	78,210	Net income	$	22,325	$	28,869	$	35,290	$	62,991

Other comprehensive income (loss):
Other comprehensive loss:											Other comprehensive loss:
Foreign currency translation and other	(89		)	91		(190		)	72		Foreign currency translation and other	(58)		(89)		(105)		(190)
Other comprehensive income (loss)	(89		)	91		(190		)	72
Other comprehensive loss											Other comprehensive loss	(58)		(89)		(105)		(190)

Comprehensive income	$	28,780		$	35,620	$	62,801		$	78,282	Comprehensive income	$	22,267	$	28,780	$	35,185	$	62,801

Net income per common share:											Net income per common share:
Basic	$	0.62		$	0.75	$	1.35		$	1.64	Basic	$	0.47	$	0.62	$	0.74	$	1.35
Diluted	$	0.61		$	0.73	$	1.32		$	1.60	Diluted	$	0.47	$	0.61	$	0.74	$	1.32
Weighted average common shares outstanding:											Weighted average common shares outstanding:
Basic	46,644			47,653		46,713			47,693		Basic	47,383		46,644		47,371		46,713
Diluted	47,424			48,936		47,597			49,026		Diluted	47,562		47,424		47,623		47,597

See accompanying notes to unaudited condensed consolidated financial statements.

AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited and in thousands)


	Common Stock					Additional Paid-in Capital	Treasury Stock						Retained Earnings		Accumulated Other Comprehensive Income (Loss)	Total
	Shares	Amount					Shares		Amount
Balance, December 31, 2018	48,809	$	488	$	452,730	(2,166)	$	(100,438)	$	286,059	$	151	$	638,990
Repurchase of common stock into treasury	—	—		—		(378)	(17,930)		—		—		(17,930)
Equity awards vested and exercised, net of shares withheld for payroll taxes	313	3		(10,284)		—	—		—		—		(10,281)

Share-based compensation	—	—		5,186		—	—		—		—		5,186
Comprehensive income (loss)	—	—		—		—	—		34,122		(101)		34,021
Balance, March 31, 2019	49,122	$	491	$	447,632	(2,544)	$	(118,368)	$	320,181	$	50	$	649,986
Repurchase of common stock into treasury	—	—		—		(17)	(775)		—		—		(775)
Equity awards vested and exercised, net of shares withheld for payroll taxes	101	1		(1,254)		—	—		—		—		(1,253)
Share-based compensation	—	—		3,702		—	—		—		—		3,702
Comprehensive income (loss)	—	—		—		—	—		28,869		(89)		28,780
Balance, June 30, 2019	49,223	$	492	$	450,080	(2,561)	$	(119,143)	$	349,050	$	(39)	$	680,440

Common Stock
Additional
Paid-in
Capital
Treasury Stock Retained Earnings Accumulated Other Comprehensive Loss Total
Shares Amount Shares Amount
Balance, December 31, 2017 48,411
$ 484
$ 453,351
(930 ) $ (33,425 ) $ 142,229
$ (112 ) $ 562,527
Equity awards vested and exercised, net of shares withheld for payroll taxes 349
4
(10,930 ) —
—
—
—
(10,926 )
Cumulative-effect adjustment from adoption of the new revenue recognition standard —
—
—
—
—
2,089
—
2,089
Share-based compensation —
—
2,864
—
—
—
—
2,864
Comprehensive income (loss) —
—
—
—
—
42,681
(19 ) 42,662
Balance, March 31, 2018 48,760
$ 488
$ 445,285
(930 ) $ (33,425 ) $ 186,999
$ (131 ) $ 599,216
Repurchase of common stock into treasury —
—
—
(385 ) (20,891 ) —
—
(20,891 )
Equity awards vested and exercised, net of shares withheld for payroll taxes 47
—
(482 ) —
—
—
—
(482 )
Share-based compensation —
—
3,281
—
—
—
—
3,281
Comprehensive income —
—
—
—
—
35,529
91
35,620
Balance, June 30, 2018 48,807
$ 488
$ 448,084
(1,315 ) $ (54,316 ) $ 222,528
$ (40 ) $ 616,744


	Common Stock					Additional Paid-in Capital	Treasury Stock						Retained Earnings		Accumulated Other Comprehensive Income	Total
	Shares	Amount					Shares		Amount
Balance, December 31, 2019	49,283	$	493	$	455,193	(2,561)	$	(119,143)	$	400,047	$	152	$	736,742

Equity awards vested and exercised, net of shares withheld for payroll taxes	140	1		(4,354)		—	—		—		—		(4,353)
Cumulative-effect adjustment from adoption of the credit loss standard, net of tax	—	—		—		—	—		(1,154)		—		(1,154)
Share-based compensation	—	—		4,927		—	—		—		—		4,927
Comprehensive income (loss)	—	—		—		—	—		12,965		(47)		12,918
Balance, March 31, 2020	49,423	$	494	$	455,766	(2,561)	$	(119,143)	$	411,858	$	105	$	749,080

Equity awards vested and exercised, net of shares withheld for payroll taxes	119	1		(289)		—	—		—		—		(288)
Share-based compensation	—	—		6,347		—	—		—		—		6,347
Comprehensive income (loss)	—	—		—		—	—		22,325		(58)		22,267
Balance, June 30, 2020	49,542	$	495	$	461,824	(2,561)	$	(119,143)	$	434,183	$	47	$	777,406

Common Stock
Additional
Paid-in
Capital
Treasury Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Total
Shares Amount Shares Amount
Balance, December 31, 2018 48,809
$ 488
$ 452,730
(2,166 ) $ (100,438 ) $ 286,059
$ 151
$ 638,990
Repurchase of common stock into treasury —
—
—
(378 ) (17,930 ) —
—
(17,930 )
Equity awards vested and exercised, net of shares withheld for payroll taxes 313
3
(10,284 ) —
—
—
—
(10,281 )
Share-based compensation —
—
5,186
—
—
—
—
5,186
Comprehensive income (loss) —
—
—
—
—
34,122
(101 ) 34,021
Balance, March 31, 2019 49,122
$ 491
$ 447,632
(2,544 ) $ (118,368 ) $ 320,181
$ 50
$ 649,986
Repurchase of common stock into treasury —
—
—
(17 ) (775 ) —
—
(775 )
Equity awards vested and exercised, net of shares withheld for payroll taxes 101
1
(1,254 ) —
—
—
—
(1,253 )
Share-based compensation —
—
3,702
—
—
—
—
3,702
Comprehensive income (loss) —
—
—
—
—
28,869
(89 ) 28,780
Balance, June 30, 2019 49,223
$ 492
$ 450,080
(2,561 ) $ (119,143 ) $ 349,050
$ (39 ) $ 680,440

See accompanying notes to unaudited condensed consolidated financial statements.

AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)


	Six Months Ended June 30,							Six Months Ended June 30,
	2019			2018				2020		2019
Cash flows from operating activities:							Cash flows from operating activities:
Net income	$	62,991		$	78,210		Net income	$	35,290	$	62,991
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	24,428			18,492			Depreciation and amortization	42,660		24,428
Non-cash interest expense and other	1,134			1,277			Non-cash interest expense and other	2,817		1,134
Write-off of fees on the prior credit facilities	—			574

Change in fair value of contingent consideration	(2,158		)	19			Change in fair value of contingent consideration	5,000		(2,158)
Increase in allowances for doubtful accounts and sales credits	4,978			4,809
Increase in allowance for credit losses and sales credits							Increase in allowance for credit losses and sales credits	6,742		4,978
Provision for deferred income taxes	(10,328		)	(7,173		)	Provision for deferred income taxes	(9,827)		(10,328)
Share-based compensation	8,888			6,145			Share-based compensation	11,274		8,888
Loss on disposal or sale of fixed assets	39			39			Loss on disposal or sale of fixed assets	3,321		39
Amortization of discount on investments	(229		)	(62		)	Amortization of discount on investments	(71)		(229)
Net loss on deferred compensation balances							Net loss on deferred compensation balances	379		—
Non-cash lease expense	(106		)	—			Non-cash lease expense	180		(106)
Changes in assets and liabilities, net of effects from acquisitions:							Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable	12,427			13,830			Accounts receivable	2,160		12,427
Accounts receivable, subcontractor	84			6,355			Accounts receivable, subcontractor	14,245		84
Income taxes receivable	(1,673		)	13,986			Income taxes receivable	6,157		(1,673)
Prepaid expenses	(1,523		)	(2,012		)	Prepaid expenses	(3,260)		(1,523)
Other current assets	583			(613		)	Other current assets	584		583
Other assets	(8,763		)	556			Other assets	3,144		(8,763)

Accounts payable and accrued expenses	(29,471		)	(8,954		)	Accounts payable and accrued expenses	(14,035)		(29,471)
Accrued compensation and benefits	11,774			5,468			Accrued compensation and benefits	(1,187)		11,774
Other liabilities	(5,852		)	(6,588		)	Other liabilities	22,764		(5,852)

Deferred revenue	(2,025		)	1,573			Deferred revenue	(72)		(2,025)
Restricted investments balance	93			7			Restricted investments balance	6		93
Net cash provided by operating activities	65,291			125,938			Net cash provided by operating activities	128,271		65,291

Cash flows from investing activities:							Cash flows from investing activities:
Purchase and development of fixed assets	(15,532		)	(16,457		)	Purchase and development of fixed assets	(19,727)		(15,532)
Purchase of investments	(13,281		)	(6,742		)	Purchase of investments	(23,129)		(13,281)
Proceeds from maturity of investments	22,670			8,200			Proceeds from maturity of investments	14,100		22,670
Payments to fund deferred compensation plan	(5,279		)	(4,724		)	Payments to fund deferred compensation plan	(6,191)		(5,279)
Cash paid for acquisitions, net of cash received	(228,149		)	(218,047		)

Purchase of convertible promissory note							Purchase of convertible promissory note	(490)		—
Cash paid for acquisitions, net of cash and restricted cash received							Cash paid for acquisitions, net of cash and restricted cash received	(476,491)		(228,149)
Cash paid for other intangibles	(1,120		)	(1,180		)	Cash paid for other intangibles	(1,400)		(1,120)
Cash received for working capital adjustments for prior year acquisitions							Cash received for working capital adjustments for prior year acquisitions	66		—
Net cash used in investing activities	(240,691		)	(238,950		)	Net cash used in investing activities	(513,262)		(240,691)


	Six Months Ended June 30,
	2020		2019
Cash flows from financing activities:

Payments on term loans	(1,563)		—
Proceeds from term loans	250,000		150,000
Payments on revolving credit facility	(125,000)		(25,000)
Proceeds from revolving credit facility	225,000		101,000
Repurchase of common stock	—		(18,705)
Payment of financing costs	(4,181)		(777)
Earn-out payments for prior acquisitions	(10,622)		(5,700)
Cash paid for shares withheld for taxes	(4,640)		(11,533)
Net cash provided by financing activities	328,994		189,285
Effect of exchange rate changes on cash	(105)		(190)
Net increase (decrease) in cash, cash equivalents and restricted cash	(56,102)		13,695
Cash, cash equivalents and restricted cash at beginning of period	153,962		84,324
Cash, cash equivalents and restricted cash at end of period	$	97,860	$	98,019

Supplemental disclosures of cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	10,112	$	8,694
Cash paid for interest (net of $208 and $230 capitalized for the six months ended June 30, 2020 and 2019, respectively)	$	12,759	$	11,714
Cash paid for income taxes	$	59	$	27,369
Acquisitions:
Fair value of tangible assets acquired in acquisitions, net of cash and restricted cash received	$	35,868	$	27,674
Goodwill	274,560		149,941
Intangible assets	228,000		96,180
Liabilities assumed	(61,937)		(33,524)


Earn-out liabilities	—		(12,122)
Net cash paid for acquisitions	$	476,491	$	228,149
Supplemental disclosures of non-cash investing and financing activities:
Purchase of fixed assets recorded in accounts payable and accrued expenses	$	1,225	$	2,352

Six Months Ended June 30,
2019 2018
Cash flows from financing activities:
Proceeds from term loans 150,000
—
Payments on revolving credit facility (25,000 ) (40,000 )
Proceeds from revolving credit facility 101,000
195,000
Repurchase of common stock (18,705 ) (20,891 )
Payment of financing costs (777 ) (2,331 )
Earn-out payments for prior acquisitions (5,700 ) (1,713 )
Cash paid for shares withheld for taxes (11,533 ) (11,408 )
Net cash provided by financing activities 189,285
118,657
Effect of exchange rate changes on cash (190 ) 72
Net increase in cash, cash equivalents and restricted cash 13,695
5,717
Cash, cash equivalents and restricted cash at beginning of period 84,324
98,894
Cash, cash equivalents and restricted cash at end of period $ 98,019
$ 104,611

Supplemental disclosures of cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities $ 8,694
$ —
Cash paid for interest (net of $230 and $193 capitalized for the six months ended June 30, 2019 and 2018, respectively) $ 11,714
$ 10,167
Cash paid for income taxes $ 27,369
$ 14,405
Acquisitions:
Fair value of tangible assets acquired in acquisitions, net of cash and restricted cash received $ 27,674
$ 23,577
Goodwill 149,941
98,538
Intangible assets 96,180
122,110
Liabilities assumed (33,524 ) (16,078 )
Earn-out liabilities (12,122 ) (10,100 )
Net cash paid for acquisitions $ 228,149
$ 218,047
Supplemental disclosures of non-cash investing and financing activities:
Purchase of fixed assets recorded in accounts payable and accrued expenses $ 2,352
$ 1,800

See accompanying notes to unaudited condensed consolidated financial statements.

AMN HEALTHCARE SERVICES, INC.

The condensed consolidated balance sheets and related condensed consolidated statements of comprehensive income and cash flows contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”), which are unaudited, include the accounts of AMN Healthcare Services, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all entries necessary for a fair presentation of such unaudited condensed consolidated financial statements have been included. These entries consisted of all normal recurring items. The results of operations for the interim period are not necessarily indicative of the results to be expected for any other interim period or for the entire fiscal year or for any future period.

The unaudited condensed consolidated financial statements do not include all information and notes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). Please refer to the Company’s audited consolidated financial statements and the related notes for the fiscal year ended December 31, ~~2018,~~2019, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018,~~2019, filed with the Securities and Exchange Commission on February ~~21,~~ 25, 2020 (“2019 ~~(“2018~~ Annual Report”).

The preparation of financial statements in conformity with U.S. GAAP requires management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to intangible assets purchased in a business combination, asset impairments, accruals for self-insurance, compensation and related benefits, accounts receivable, contingencies and litigation, earn-out liabilities, and income taxes. Actual results could differ from those estimates under different assumptions or conditions.

Coronavirus Pandemic

On March 11, 2020, the World Health Organization declared the outbreak of a novel strain of coronavirus, also known as COVID-19, a global pandemic. Due to the pandemic, there has been uncertainty and disruption in the global economy and significant volatility of financial markets. The Company is closely monitoring the impact of the pandemic, which continues to evolve, and its effects and risks on our operations, liquidity, financial condition and financial results for the full year 2020 and, possibly, beyond.

The estimates used for, but not limited to, determining the collectability of accounts receivable, fair value of long-lived assets, and goodwill could be impacted by the pandemic. While the full impact of COVID-19, including the duration and severity of the pandemic, remains unknown, the Company has made appropriate estimates based on the facts and circumstances available as of the reporting date. Specifically, the Company continues to monitor the impacts of the pandemic on its customers’ liquidity and capital resources and, therefore, the Company’s ability to collect, or the timeliness of collection of accounts receivable. The impact of COVID-19 did not have a material effect on the Company’s estimates as of June 30, 2020. These estimates may change as new events occur and additional information is obtained. See additional information below regarding the allowance for credit losses for accounts receivable.

Recently Adopted Accounting Pronouncements

In ~~February~~June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) ~~2016-02, “Leases.~~2016-13, “Measurement of Credit Losses on Financial Instruments.” The FASB also issued a series of other ASUs, which update ASU 2016-13 (collectively, the “credit loss standard”). This new standard ~~requires organizations that lease assets to recognize~~introduces new accounting models for determining and recognizing credit losses on certain financial instruments based on an estimate of current expected credit losses. The Company adopted this standard effective January 1, 2020 using the assets and liabilities created by those leases. The standard also requires disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. A modified retrospective transition approach is required, applying the standard to all leases existing at the date of initial application. In addition, the FASB has also issued several amendments to the standard, which clarify certain aspects of the guidance, including an optional transition method for adoption of this standard, which allows organizations to initially apply the new requirements at the effective date, recognize a cumulative effect adjustment to the opening balance of retained earnings, and continue to apply the legacy guidance in Accounting Standards Codification (“ASC”) 840, Leases, including its disclosure requirements, in the comparative periods presented. The new standard provides a number of optional practical expedients in transition. The Company elected the ‘package of practical expedients’, which permits organizations not to reassess under the new standard prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect to use the hindsight practical expedient to determine the lease term or evaluate impairment for existing leases.

~~The Company adopted ASU 2016-02 effective January 1, 2019, using the optional transition method described above.~~method. The Company recognized the cumulative effect of adopting this guidance as an adjustment asto the opening balance of ~~the effective date,~~retained earnings of $1,154, net of tax, primarily related to ~~the recognition of lease liabilities of $114,807 and corresponding right-of-use assets of $99,525~~its allowance for ~~existing operating leases. The Company also derecognized existing deferred rent liabilities of $15,302. These adjustments had no effect on opening retained earnings and prior periods were~~credit losses for accounts receivable. Prior period amounts are not retrospectively ~~adjusted and continue to be reported in accordance with ASC 840.~~adjusted. The new standard also provides practical expedients for an organization’s ongoing accounting. The Company elected the short-term lease recognition exemption and the practical expedient to not separate lease and non-lease components for all leases that qualify. The Company does not expectimpact of the adoption of ~~this~~the new standard ~~to impact its results of operations.~~

~~There~~ was ~~no other~~not material ~~impact~~ to the Company’s condensed consolidated financial statements asfor the three and six months ended June 30, 2020. The Company expects the impact to be immaterial on an ongoing basis. See additional information below regarding the allowance for credit losses for accounts receivable.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment.” The standard simplifies the subsequent measurement of goodwill by removing the requirement to perform a ~~result~~hypothetical purchase price allocation to compute the implied fair value of ~~adopting~~goodwill to measure impairment. Instead, any goodwill impairment will equal the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Further, the guidance eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The Company adopted this ~~updated standard.~~standard effective January 1, 2020 and the adoption did not have a material effect on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” The standard modifies the current disclosure requirements on fair value measurements. The Company adopted this standard effective January 1, 2020. Refer to information regarding fair value measurements in Note (7), “Fair Value Measurement.”

Cash, cash equivalents and restricted cash

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents include currency on hand, deposits with financial institutions and highly liquid investments. Restricted cash and cash equivalents primarily represent cash and money market funds on deposit with financial institutions and investments represents commercial paper that serves as collateral for the Company’s outstanding letters of credit and captive insurance subsidiary claim payments. See Note ~~(6), “Notes Payable and Credit Agreement” and Note~~ (7), “Fair Value Measurement” for additional information.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated balance sheets and related notes to the amounts presented in the accompanying condensed consolidated statements of cash flows.


	June 30, 2020		December 31, 2019
Cash and cash equivalents	$	43,067	$	82,985
Restricted cash and cash equivalents (included in other current assets)	17,111		18,393
Restricted cash, cash equivalents and investments	56,362		62,170
Total cash, cash equivalents and restricted cash and investments	116,540		163,548
Less restricted investments	(18,680)		(9,586)
Total cash, cash equivalents and restricted cash	$	97,860	$	153,962

June 30, 2019 December 31, 2018
Cash and cash equivalents $ 20,937
$ 13,856
Restricted cash and cash equivalents (included in other current assets) 17,102
26,329
Restricted cash, cash equivalents and investments 65,919
59,331
Total cash, cash equivalents and restricted cash and investments 103,958
99,516
Less restricted investments (5,939 ) (15,192 )
Total cash, cash equivalents and restricted cash $ 98,019
$ 84,324
Accounts Receivable

The Company records accounts receivable at the invoiced amount. Accounts receivable are non-interest bearing. The Company maintains an allowance for expected credit losses based on the Company’s historical write-off experience, an assessment of its customers’ financial conditions and available information that is relevant to assessing the collectability of cash flows, which includes current conditions and forecasts about future economic conditions.

The following table provides a reconciliation of activity in the allowance for credit losses for accounts receivable:


	2020
Balance as of January 1,	$	3,332
Adoption of the credit loss standard, cumulative-effect adjustment to retained earnings	1,334
Provision for expected credit losses	4,889
Amounts written off charged against the allowance	(1,023)

Balance as of June 30,	$	8,532

The Company reclassified its allowance for accounts receivable in the prior year’s consolidated balance sheet to conform to the current year presentation. The prior year’s balance of accounts receivable (net of allowances) remains unchanged.

As set forth below, the Company completed ~~four~~4 acquisitions from January 1, ~~2018~~2019 through June 30, ~~2019.~~2020. The Company accounted for each acquisition using the acquisition method of accounting. Accordingly, it recorded the tangible and intangible assets acquired and liabilities assumed at their estimated fair values as of the applicable date of acquisition. Since the applicable date of acquisition, the Company has revised the allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed based on analysis of information that has been made available through June 30, ~~2019.~~2020. The allocations ~~noted as preliminary~~ will continue to be updated through the measurement period, if necessary. ~~For each acquisition,~~The Company recognizes acquisition-related costs in selling, general and administrative expenses in the consolidated statements of comprehensive income.

Stratus Video Acquisition

On February 14, 2020, the Company ~~did~~completed its acquisition of Stratus Video, a remote video interpreting company that provides healthcare interpretation via remote video, over the phone, and onsite in-person, all supported by proprietary technology platforms. The initial purchase price of $485,568 consisted entirely of cash consideration paid upon acquisition. The acquisition was funded primarily through (1) borrowings under the Company’s $400,000 secured revolving credit facility (the “Senior Credit Facility”), provided for under a credit agreement (the “New Credit Agreement”), and (2) the Second Amendment (as defined in Note (6) below) to the New Credit Agreement, which provided $250,000 of additional available borrowings to the Company. The New Credit Agreement and the Second Amendment are more fully described in Note (6), “Notes Payable and Credit Agreement.” The results of Stratus Video have been included in the Company’s technology and workforce solutions segment since the date of acquisition. During the second quarter of 2020, an additional $99 of cash consideration was paid to the selling shareholders for the final working capital settlement. The Company incurred $9,525 of acquisition-related costs during the six months ended June 30, 2020 as a result of its acquisition of Stratus Video.

The preliminary allocation of the $485,667 purchase price, which included the additional cash consideration paid for the final working capital settlement, consisted of (1) $45,044of fair value of tangible assets acquired, which included $9,176 cash received, (2) $61,937 of liabilities assumed, (3) $228,000 of identified intangible assets, and (4) $274,560 of goodwill, of which $10,186 is expected to be deductible for tax purposes. The provisional items pending finalization are the valuation of the acquired intangible assets and income tax related matters. The intangible assets acquired have a weighted average useful life of approximately seventeen years. The following table summarizes the fair value and useful life of each intangible asset acquired:


		Fair Value		Useful Life
				(in years)
Identifiable intangible assets
	Customer Relationships	$	171,000	20
	Tradenames and Trademarks	40,000		5 - 10
	Developed Technology	16,000		5
	Interpreter Database	1,000		4
		$	228,000

Approximately $28,318 of revenue and $3,859 of income before income taxes of Stratus Video were included in the unaudited condensed consolidated statement of comprehensive income for the three months ended June 30, 2020. Approximately $42,751 of revenue and $5,465 of income before income taxes of Stratus Video were included in the unaudited condensed consolidated statement of comprehensive income for the six months ended June 30, 2020. The following summary presents unaudited pro forma consolidated results of operations of the Company as if the Stratus Video and Advanced (as defined below) acquisitions had occurred on January 1, 2019, which gives effect to certain adjustments, including incremental acquisition-related costs of $4,245 and $15,926, of which $1,713 and $9,525 were reclassified from the three and six months ended June 30, 2020, respectively, amortization of intangible assets of $4,499 and $9,618, and interest expense of $1,493 and $4,220 during the three and six months ended June 30, 2019, respectively. The pro forma financial information is not ~~incur any material acquisition-related costs.~~necessarily indicative of the operating results that would have occurred had the acquisitions been consummated as of the date indicated, nor is it necessarily indicative of the Company’s future operating results.


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Revenue	$	608,351	$	588,488	$	1,224,684	$	1,171,799
Income from operations	40,300		34,771		85,153		65,516
Net income	23,730		18,136		42,404		36,817

b4health Acquisition

On December 19, 2019, the Company completed its acquisition of B4Health, LLC (“b4health”), an innovative technology company and a leading provider of a web-based internal float pool management solution and vendor management system for healthcare facilities. The initial purchase price of $23,006 included (1) $19,906 cash consideration paid upon acquisition and (2) a contingent earn-out payment of up to $12,000 with an estimated fair value of $3,100 as of the acquisition date. The contingent earn-out payment is based on the operating results of b4health for the twelve months ending December 31, 2020. The results of b4health have been included in the Company’s technology and workforce solutions segment since the date of acquisition. During the first quarter of 2020, $66 was returned to the Company for the final working capital settlement.

The allocation of the $22,940 purchase price, which was reduced by the final working capital settlement, consisted of (1) $1,169 of fair value of tangible assets acquired, which included $222 cash received, (2) $823 of liabilities assumed, (3) $9,000 of identified intangible assets, and (4) $13,594 of goodwill, all of which is deductible for tax purposes. The fair value of intangible assets includes $3,000 of developed technology, $4,000 of customer relationships, and $2,000 of trademarks with a weighted average useful life of approximately seven years.

Advanced Acquisition

On June 14, 2019, the Company completed its acquisition of Advanced Medical Personnel Services, Inc. (“Advanced”), a national healthcare staffing company that specializes in placing therapists and nurses across multiple settings. The initial purchase price of $211,743 included (1) $201,121 cash consideration paid upon acquisition and (2) a contingent earn-out payment of up to $20,000 with an estimated fair value of $10,622 as of the acquisition date. The contingent earn-out payment is based on the operating results of Advanced for the twelve months ending December 31, ~~2019.~~2019, which was settled in full during the first quarter of 2020. The acquisition was funded primarily through (1) borrowings under the ~~Company’s $400,000 secured revolving credit facility (the “Senior~~Senior Credit ~~Facility”), provided for under a credit agreement (the “New Credit Agreement”), dated as of February 9, 2018,~~Facility and (2) the First Amendment (as defined in Note (6) below) to the New Credit Agreement, which provided $150,000 of additional available borrowings to the Company. The ~~New Credit Agreement and the First Amendment are more fully described in Note (6), “Notes Payable and Credit Agreement.” The~~ results of Advanced have been included in the Company’s nurse and allied solutions segment since the date of acquisition. During the third quarter of 2019, an additional $73 of cash consideration was paid to the selling shareholders for the final working capital settlement.

The ~~preliminary~~ allocation of the ~~$211,743~~$211,816 purchase price, which included the additional cash consideration paid for the final working capital settlement, consisted of (1) ~~$29,064~~$29,020 of fair value of tangible assets acquired, which included $2,497 cash and restricted cash received, (2) ~~$30,134~~$28,772 of liabilities assumed, (3) ~~$89,300~~$91,700 of identified intangible assets, and (4) ~~$123,513~~$119,868 of goodwill, of which ~~$75,493~~$57,236 is ~~expected to be~~ deductible for tax purposes. ~~The provisional items pending finalization are the valuation of the acquired intangible assets, goodwill, and income tax related matters.~~ The intangible assets acquired have a weighted average useful life of approximately nine years. The following table summarizes the fair value and useful life of each intangible asset acquired:

Silversheet Acquisition

On January 30, 2019, the Company completed its acquisition of Silversheet, Inc. (“Silversheet”), which provides innovative software and services to reduce the complexities and challenges of the credentialing process for clinicians and healthcare organizations. The initial purchase price of $31,676 included (1) $30,176 cash consideration paid upon acquisition, funded primarily through borrowings under the Senior Credit Facility, and (2) a contingent earn-out payment of up to $25,000 with an estimated fair value of $1,500 as of the acquisition date. The contingent earn-out payment is based on (A) up to $6,000 based on the operating results of Silversheet for the twelve months ending December 31, 2019, which resulted in no earn-out payment, and (B) up to $19,000 based on the operating results of Silversheet for the twelve months ending December 31, 2020. The results of Silversheet have been included in the Company’s ~~other~~technology and workforce solutions segment since the date of acquisition.

The ~~preliminary~~ allocation of the $31,676 purchase price consisted of (1) ~~$1,758~~$2,826 of fair value of tangible assets acquired, which included $651 cash received, (2) ~~$3,390~~$1,567 of liabilities assumed, (3) $6,880 of identified intangible assets, and (4) ~~$26,428~~$23,537 of

goodwill, none of which is deductible for tax purposes. ~~The provisional items pending finalization are the valuation of the acquired intangible assets, goodwill, and income tax related matters.~~ The fair value of intangible assets primarily includes $5,300 of developed technology and $1,500 of trademarks with a weighted average useful life of approximately eight years.

~~MedPartners Acquisition~~

On April 9, 2018, the Company completed its acquisition of MedPartners HIM (“MedPartners”), which provides case management, clinical documentation improvement, medical coding and registry services to hospitals and physician medical groups nationwide. The initial purchase price of $200,711 included (1) $196,533 cash consideration paid upon acquisition, funded primarily through borrowings under the Senior Credit Facility, and (2) a contingent earn-out payment of up to $20,000 with an estimated fair value of $4,400 as of the acquisition date. The contingent earn-out payment is based on (A) up to $10,000 based on the operating results of MedPartners for the twelve months ending December 31, 2018, which resulted in no earn-out payment, and (B) up to $10,000 based on the operating results of MedPartners for the six months ending June 30, 2019. The results of MedPartners have been included in the Company’s other workforce solutions segment since the date of acquisition. During the third quarter of 2018, $222 was returned to the Company for the final working capital settlement.

The allocation of the $200,711 purchase price, which was finalized during the second quarter of 2019, consisted of (1) $28,508 of fair value of tangible assets acquired, which included $8,403 cash received, (2) $11,933 of liabilities assumed, (3) $103,000 of identified intangible assets, and (4) $81,136 of goodwill, all of which is deductible for tax purposes. The intangible assets acquired have a weighted average useful life of approximately sixteen years. The following table summarizes the fair value and useful life of each intangible asset acquired:

Fair Value Useful Life
(in years)
Identifiable intangible assets
Tradenames and Trademarks $ 46,000
20
Customer Relationships 57,000
12
$ 103,000

~~Phillips DiPisa and Leaders For Today Acquisition~~

On April 6, 2018, the Company completed its acquisition of two related entities, Phillips DiPisa and Leaders For Today (“PDA and LFT”), which offer a range of leadership staffing and permanent placement solutions for the healthcare industry. The initial purchase price of $35,503 included (1) $30,268 cash consideration paid upon acquisition, funded through cash on hand, and (2) a contingent earn-out payment of up to $7,000 with an estimated fair value of $5,700 as of the acquisition date. The contingent earn-out payment is based on the operating results of PDA and LFT for the twelve months ending December 31, 2018, which was settled in full during the second quarter of 2019. The results of PDA and LFT have been included in the Company’s other workforce solutions segment since the date of acquisition. During the third quarter of 2018, $465 was returned to the Company for the final working capital settlement.

The allocation of the $35,503 purchase price, which was finalized during the second quarter of 2019, consisted of (1) $4,389 of fair value of tangible assets acquired, which included $351 cash received, (2) $4,779 of liabilities assumed, (3) $19,110 of identified intangible assets, and (4) $16,783 of goodwill, all of which is deductible for tax purposes. The fair value of intangible assets includes $5,400 of trademarks, $8,000 of customer relationships and $5,710 of staffing databases with a weighted average useful life of approximately twelve years.

Revenue primarily consists of fees earned from the temporary staffing and permanent placement of healthcare professionals, executives, and ~~executives~~leaders (clinical and operational). The Company also generates revenue from its software as ~~well as from the Company’s SaaS-based technology,~~a service (“SaaS”)-based technologies, including ~~its~~ vendor management systems and ~~its~~ scheduling ~~software.~~software, and outsourced workforce services, including language interpretation and recruitment process outsourcing. Revenue is recognized when control of these services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenue from temporary staffing services is recognized as the services are rendered by clinical and non-clinical healthcare professionals. Under the Company’s managed services program (“MSP”) arrangements, the Company manages all or a part of a customer’s supplemental workforce needs utilizing its own network of healthcare professionals along with those of third-party subcontractors. Revenue and the related direct costs under MSP arrangements are recorded in accordance with the accounting guidance on reporting revenue gross as a principal versus net as an agent. When the Company uses subcontractors and acts as an agent, revenue is recorded net of the related subcontractor’s expense. Revenue from ~~executive search, physician~~ permanent placement and ~~recruitment process outsourcing~~outsourced workforce services is recognized as the services are rendered. ~~The~~Depending on the arrangement, the Company’s SaaS-based revenue is recognized either as the services are rendered or ratably over the applicable arrangement’s service period.

The Company’s customers are primarily billed as services are rendered. Any fees billed in advance of being earned are recorded as deferred revenue. While payment terms vary by the type of customer and the services rendered, the term between invoicing and when payment is due is not significant. During the six months ended June 30, 2020 and 2019, previously deferred revenue recognized as revenue was ~~$8,641.~~$10,371 and $8,641, respectively.

The Company has elected to apply the following practical expedients and optional exemptions related to contract costs and revenue recognition:

•Recognize incremental costs of obtaining a contract with amortization periods of one year or less as expense when incurred. These costs are recorded within selling, general and administrative expenses.

•Recognize revenue in the amount of consideration to which the Company has a right to invoice the customer if that amount corresponds directly with the value to the customer of the Company’s services completed to date.

•Exemptions from disclosing the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which revenue is recognized in the amount of consideration to which the Company has a right to invoice for services performed and (iii) contracts for which variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation.

See Note (5), “Segment Information” for additional information.

Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the reporting period. The following table sets forth the computation of basic and diluted net income per common share:

Share-based awards to purchase 189 and 62 shares of common stock were not included in the above calculation of diluted net income per common share for the three and six months ended June 30, ~~2019 and~~ ~~2018, respectively:~~

Three Months Ended June 30, Six Months Ended June 30,
2019 2018 2019 2018
Net income $ 28,869
$ 35,529
$ 62,991
$ 78,210

Net income per common share - basic $ 0.62
$ 0.75
$ 1.35
$ 1.64
Net income per common share - diluted $ 0.61
$ 0.73
$ 1.32
$ 1.60

Weighted average common shares outstanding - basic 46,644
47,653
46,713
47,693
Plus dilutive effect of potential common shares 780
1,283
884
1,333
Weighted average common shares outstanding - diluted 47,424
48,936
47,597
49,026

2020, respectively, because the effect of these instruments was anti-dilutive. Share-based awards to purchase 66 and 66 shares of common stock were not included in the above calculation of diluted net income per common share for the three and six months ended June 30, 2019, respectively, because the effect of these instruments was anti-dilutive. Share-based awards to purchase 36 and 23 shares of common stock were not included in the above calculation of diluted net income per common share for the three and six months ended June 30, 2018, respectively, because the effect of these instruments was anti-dilutive.

The Company’s operating segments are identified in the same manner as they are reported internally and used by the Company’s chief operating decision maker for the purpose of evaluating performance and allocating resources. Effective March 8, 2020, the Company ~~has three~~modified its reportable ~~segments:~~segments. The Company previously utilized 3 reportable segments, which it identified as follows: (1) nurse and allied solutions, (2) locum tenens solutions, and (3) other workforce solutions. In light of the Company’s recent acquisitions and organizational changes to better align its organizational structure with its strategy and operations, the Company’s management reorganized its reportable segments to better reflect how the business is evaluated by the chief operating decision maker. Beginning in the first quarter of 2020, the Company has disclosed the following 3 reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. The nurse and allied solutions segment includes the Company’s travel nurse staffing, rapid response nurse staffing and labor disruption, allied staffing, local staffing, and revenue cycle solutions businesses. The physician and leadership solutions segment includes the Company’s locum tenens staffing, healthcare interim leadership staffing, executive search, and physician permanent placement businesses. The technology and workforce solutions segment includes the Company’s language interpretation services, vendor management systems, workforce optimization, recruitment process outsourcing, credentialing, and flex pool management businesses.

The Company’s chief operating decision maker relies on internal management reporting processes that provide revenue and operating income by reportable segment for making financial decisions and allocating resources. Segment operating income represents income before income taxes plus depreciation, amortization of intangible assets, share-based compensation, interest expense, net, and other, and unallocated corporate overhead. The Company’s management does not evaluate, manage or measure performance of segments using asset information; accordingly, asset information by segment is not prepared or disclosed.

The following table, which includes reclassified prior period data to conform to the new segment reporting structure, provides a reconciliation of revenue and operating income by reportable segment to consolidated results and was derived from each segment’s internal financial information as used for corporate management purposes:

Three Months Ended June 30, Six Months Ended June 30,
2019
2018 2019 2018
Revenue
Nurse and allied solutions $ 331,627
$ 332,728
$ 668,656
$ 670,907
Locum tenens solutions 82,074
107,297
162,564
210,414
Other workforce solutions 121,476
118,083
236,398
199,276
$ 535,177
$ 558,108
$ 1,067,618
$ 1,080,597
Segment operating income
Nurse and allied solutions $ 48,694
$ 43,936
$ 96,616
$ 95,741
Locum tenens solutions 7,128
13,371
12,829
23,329
Other workforce solutions 27,127
28,576
53,315
48,427
82,949
85,883
162,760
167,497
Unallocated corporate overhead 21,373
17,181
39,236
32,844
Depreciation and amortization 12,718
10,606
24,428
18,492
Share-based compensation 3,702
3,281
8,888
6,145
Interest expense, net, and other 6,065
6,376
11,738
11,711
Income before income taxes $ 39,091
$ 48,439
$ 78,470
$ 98,305
11

The following tables present the Company’s revenue disaggregated by service type. Certain prior period amounts have been reclassified to conform with current period presentation. These reclassifications have no impact on total revenue by reportable segment.


	Three Months Ended June 30, 2020
	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Temporary staffing	$	444,464	$	95,701	$	1,030	$	541,195
Permanent placement	—		12,921		—		12,921
Outsourced workforce	—		—		30,836		30,836
SaaS-based technologies	—		—		23,399		23,399
Total revenue	$	444,464	$	108,622	$	55,265	$	608,351


	Three Months Ended June 30, 2019
	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Temporary staffing	$	367,994	$	122,171	$	—	$	490,165
Permanent placement	—		20,278		—		20,278
Outsourced workforce	—		—		4,097		4,097
SaaS-based technologies	—		—		20,637		20,637
Total revenue	$	367,994	$	142,449	$	24,734	$	535,177


	Six Months Ended June 30, 2020
	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Temporary staffing	$	868,810	$	215,297	$	1,030	$	1,085,137
Permanent placement	—		31,167		—		31,167
Outsourced workforce	—		—		48,516		48,516
SaaS-based technologies	—		—		45,992		45,992
Total revenue	$	868,810	$	246,464	$	95,538	$	1,210,812


	Six Months Ended June 30, 2019
	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Temporary staffing	$	741,466	$	241,011	$	—	$	982,477
Permanent placement	—		38,515		—		38,515
Outsourced workforce	—		—		7,792		7,792
SaaS-based technologies	—		—		38,834		38,834
Total revenue	$	741,466	$	279,526	$	46,626	$	1,067,618

In connection with the reorganization of its reportable segments effective March 8, 2020, the Company reassigned the goodwill balances to the reporting units, the composition of which changed under the reorganized reportable segments, using the relative fair value reallocation approach. The Company ~~offers~~performed a ~~comprehensive managed services program, in which~~goodwill impairment test at the reporting unit level both immediately before and after the reorganization. The Company determined the fair values of its reporting units using a combination of the income approach (using discounted future cash flows) and the market valuation approach. Based on the results of this testing, the Company ~~manages all or a portion~~determined that the fair values of ~~a client’s contingent staffing needs. This service includes~~its reporting units were each greater than their respective carrying values both before and after the placement of the Company’s own healthcare professionals and the utilization of other staffing agencies to fulfill the client’s staffing needs. See additional information in Note (3), “Revenue Recognition.” For the three months ended June 30, 2019 and 2018, revenue under the Company’s managed services program arrangements comprised approximately 65% and 56% for nurse and allied solutions revenue, 22% and 14% for locum tenens solutions revenue and 8% and 6% for other workforce solutions revenue, respectively. Forreorganization. Therefore, there was 0 impairment loss recognized during the six months ended June 30, 2019 and 2018, revenue under the Company’s managed services program arrangements comprised approximately 66% and 60% for nurse and allied solutions revenue, 23% and 14% for locum tenens solutions revenue and 8% and 8% for other workforce solutions revenue, respectively.2020.

The following table summarizes the activity related to the carrying value of goodwill by reportable segment:


	Nurse and Allied Solutions		Physician and Leadership Solutions		Technology and Workforce Solutions		Total
Balance, January 1, 2020	$	344,316	$	163,348	$	87,887	$	595,551
Goodwill adjustment for Advanced acquisition	29		—		—		29
Goodwill adjustment for b4health acquisition	—		—		(66)		(66)
Goodwill from Stratus Video acquisition	—		—		274,560		274,560
Reallocation due to change in segments	(14,600)		297		14,303		—
Balance, June 30, 2020	$	329,745	$	163,645	$	376,684	$	870,074
Accumulated impairment loss as of December 31, 2019 and June 30, 2020	$	154,444	$	60,495	$	—	$	214,939

Nurse and Allied Solutions Locum Tenens Solutions Other Workforce Solutions Total
Balance, January 1, 2019 $ 103,107
$ 19,743
$ 315,656
$ 438,506
Goodwill adjustment for MedPartners acquisition —
—
23
23
Goodwill adjustment for PDA and LFT acquisition —
—
(13 ) (13 )
Goodwill from Silversheet acquisition —
—
26,428
26,428
Goodwill from Advanced acquisition 123,513
—
—
123,513
Balance, June 30, 2019 $ 226,620
$ 19,743
$ 342,094
$ 588,457
Accumulated impairment loss as of December 31, 2018 and June 30, 2019 $ 154,444
$ 53,940
$ 6,555
$ 214,939

6. NOTES PAYABLE AND CREDIT AGREEMENT

On February 9, 2018, the Company entered into the New Credit Agreement with several lenders to provide for the $400,000 Senior Credit Facility to replace its then-existing credit facilities. The Senior Credit Facility includes a $50,000 sublimit for the issuance of letters of credit and a $50,000 sublimit for swingline loans. On June 14, 2019, the Company entered into the first amendment to the New Credit Agreement (the “First Amendment”) to provide for, among other things, a $150,000 secured term loan credit facility (the “Term Loan”). The First Amendment (together with the New Credit Agreement, the “Amended Credit Agreement”) also extended the maturity date of the Senior Credit Facility to be coterminous with the Term Loan. The obligations of the Company under the Amended Credit Agreement are secured by substantially all of the assets of the Company. The Company used the proceeds from the Term Loan, together with a drawdown of a portion of the Senior Credit Facility, to complete its acquisition of Advanced, as more fully described in Note (2), “Acquisitions.” The Company fully repaid all amounts under the Term Loan in 2019.

On February 14, 2020, the Company entered into the second amendment to the New Credit Agreement (the “Second Amendment”) to provide for, among other things, a $250,000 secured term loan credit facility (the “Additional Term Loan”). The Second Amendment (together with the New Credit Agreement and the First Amendment, collectively, the “Amended Credit Agreement”) extended the maturity date of the Senior Credit Facility to be coterminous with the Additional Term Loan. The obligations of the Company under the Amended Credit Agreement are secured by substantially all of the assets of the Company. The Company used the proceeds from the Additional Term Loan, together with a drawdown of a portion of the Senior Credit Facility, to complete its acquisition of Stratus Video as more fully described in Note (2), “Acquisitions.”

Borrowings under the Senior Credit Facility and the Additional Term Loan (together, the “Credit Facilities”) bear interest at floating rates, at the Company’s option, based upon either LIBOR plus a spread of 1.00% to ~~2.00%~~1.75% or a base rate plus a spread of 0.00% to ~~1.00%~~0.75%. The applicable spread is determined quarterly based upon the Company’s consolidated net leverage ~~ratio.~~ratio (as calculated per the Amended Credit Agreement). The Additional Term Loan is subject to amortization of principal of 2.50% per year for the first year of the term and 5.00% per year thereafter, payable in equal quarterly installments. The Senior Credit Facility is available for working capital, capital expenditures, permitted acquisitions and general corporate purposes. The maturity date of the Credit Facilities is ~~June~~February 14, ~~2024.~~2025.

In connection with the ~~First~~Second Amendment, the Company incurred ~~$875~~$3,899 in fees paid to lenders and other third parties, which were capitalized during the three months ended ~~June 30, 2019~~March 31, 2020 and are amortized to interest expense over the term of the Credit Facilities. In addition, ~~$1,702~~$1,681 of unamortized financing fees ~~relating to~~incurred in connection with obtaining the New Credit Agreement and First Amendment will continue to be amortized to interest expense over the term of the Credit Facilities.

The Company’s valuation techniques and inputs used to measure fair value and the definition of the three levels (Level 1, Level 2, and Level 3) of the fair value hierarchy are disclosed in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 3—Fair Value Measurement” of the ~~2018~~2019 Annual Report. The Company has not changed the valuation techniques or inputs it uses for its fair value measurement during the three and six months ended June 30, ~~2019.~~2020.

Assets and Liabilities Measured on a Recurring Basis

The Company’s restricted cash equivalents that serve as collateral for the Company’s outstanding letters of credit

The Company has a deferred compensation plan for certain executives and key employees, which is composed of deferred compensation and all related income and losses attributable thereto. The Company’s obligation under its deferred compensation plan is measured at fair value based on quoted market prices of the participants’ elected investments, which are Level 1 inputs.

The Company’s restricted cash equivalents and investments that serve as collateral for the Company’s captive insurance company primarily consist of commercial paper that is measured at observable market prices for identical securities that are traded in less active markets, which are Level 2 inputs. Of the ~~$65,311~~$52,752 commercial paper issued and outstanding as of June 30, ~~2019, $5,939~~2020, $18,680 had original maturities greater than three months, which were considered available-for-sale securities. As of December 31, ~~2018,~~2019, the Company had ~~$63,243~~$59,243 commercial paper issued and outstanding, of which ~~$15,192~~$9,586 had original maturities greater than three months and were considered available-for-sale securities.

The Company’s contingent consideration liabilities are measured at fair value using a probability-weighted discounted cash flow analysis or a simulation-based methodology for the acquired companies, which are Level 3 inputs. The Company recognizes changes to the fair value of its contingent consideration liabilities in selling, general and administrative expenses in the condensed consolidated statements of comprehensive income.

The following tables present information about the above-referenced assets and liabilities and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value:

Significant Other Observable Inputs

Significant Unobservable Inputs

Fair Value Measurements as of December 31, 2018
Total
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)

Significant Other Observable Inputs
(Level 2)

Significant Unobservable Inputs
(Level 3)
Money market funds $ 2,461
$ 2,461
$ —
$ —
Commercial paper 63,243
—
63,243
—
Acquisition contingent consideration liabilities (7,700 ) —
—
(7,700 )

Level 3 Information

The following ~~tables set~~table sets forth a reconciliation of changes in the fair value of contingent consideration liabilities classified as Level 3 in the fair value hierarchy:

Three Months Ended June 30,
2019 2018
Balance as of April 1, $ (8,500 )
$ —
Settlement of PDA and LFT contingent consideration liability for year ended December 31, 2018 7,000
—
Contingent consideration liability from PDA and LFT acquisition on April 6, 2018 —
(5,700 )
Contingent consideration liability from MedPartners acquisition on April 9, 2018 —
(4,400 )
Contingent consideration liability from Advanced acquisition on June 14, 2019 (10,622 ) —
Change in fair value of contingent consideration liability from PDA and LFT acquisition —
(19 )
Change in fair value of contingent consideration liability from Silversheet acquisition 1,458
—
Balance as of June 30, $ (10,664 ) $ (10,119 )

Six Months Ended June 30,
2019 2018
Balance as of January 1, $ (7,700 ) $ (2,070 )
Settlement of HSG contingent consideration liability for year ended December 31, 2016 —
70
Settlement of HSG contingent consideration liability for year ended December 31, 2017 —
2,000
Settlement of PDA and LFT contingent consideration liability for year ended December 31, 2018 7,000

Contingent consideration liability from PDA and LFT acquisition on April 6, 2018 —
(5,700 )
Contingent consideration liability from MedPartners acquisition on April 9, 2018 —
(4,400 )
Contingent consideration liability from Silversheet acquisition on January 30, 2019 (1,500 ) —
Contingent consideration liability from Advanced acquisition on June 14, 2019 (10,622 ) —
Change in fair value of contingent consideration liability from PDA and LFT acquisition —
(19 )
Change in fair value of contingent consideration liability from Medpartners acquisition 700
—
Change in fair value of contingent consideration liability from Silversheet acquisition 1,458
—
Balance as of June 30, $ (10,664 ) $ (10,119 )


	2020		2019
Balance as of April 1,	$	(3,300)	$	(8,500)
Settlement of PDA and LFT contingent consideration liability for year ended December 31, 2018	—		7,000
Contingent consideration liability from Advanced acquisition on June 14, 2019	—		(10,622)
Change in fair value of contingent consideration liability from Silversheet acquisition	—		1,458
Change in fair value of contingent consideration liability from b4health acquisition	(4,800)		—
Balance as of June 30,	$	(8,100)	$	(10,664)


	2020		2019
Balance as of January 1,	$	(23,100)	$	(7,700)
Settlement of PDA and LFT contingent consideration liability for year ended December 31, 2018	—		7,000
Settlement of Advanced contingent consideration liability for year ended December 31, 2019	20,000		—
Contingent consideration liability from Silversheet acquisition on January 30, 2019	—		(1,500)
Contingent consideration liability from Advanced acquisition on June 14, 2019	—		(10,622)
Change in fair value of contingent consideration liability from MedPartners acquisition	—		700
Change in fair value of contingent consideration liability from Silversheet acquisition	—		1,458
Change in fair value of contingent consideration liability from b4health acquisition	(5,000)		—
Balance as of June 30,	$	(8,100)	$	(10,664)

The fair value measurements of contingent consideration liabilities classified as Level 3 in the fair value hierarchy include the following significant unobservable inputs:


	As of June 30, 2020	As of December 31, 2019

Volatility	75.0%	50.0%
Discount rate	13.1%	16.5%
Risk-free rate	0.2%	1.5%
Cost of debt	6.3%	5.3%

Assets Measured on a Non-Recurring Basis

The Company applies fair value techniques on a non-recurring basis associated with valuing potential impairment losses related to its goodwill, indefinite-lived intangible assets, long-lived assets, and equity investments.

The Company evaluates goodwill and indefinite-lived intangible assets annually for impairment and whenever circumstances occur indicating that goodwill might be impaired. The Company determines the fair value of its reporting units based on a combination of inputs, including the market capitalization of the Company, as well as Level 3 inputs such as

discounted cash flows, which are not observable from the market, directly or indirectly. The Company determines the fair value of its indefinite-lived intangible assets using the income approach (relief-from-royalty method) based on Level 3 inputs.

The Company’s equity investment represents an investment in a non-controlled corporation without a readily determinable market value. The Company has elected to measure the investment at cost minus impairment, if any, plus or minus changes resulting from observable price changes. The fair value is determined by using quoted prices for identical or similar investments of the same issuer, which are Level 2 inputs. The Company recognizes changes to the fair value of its equity investment in interest expense, net, and other in the condensed consolidated statements of comprehensive income.

The balance of the equity investment classified as Level 2 in the fair value hierarchy was $15,449 as of both June 30, ~~2019~~2020 and December 31, ~~2018.~~2019. There were no changes to the fair value of the equity investment recognized during the three and six months ended June 30, ~~2019.~~2020.

There were no triggering events identified, no indication of impairment of the Company’s goodwill, indefinite-lived intangible assets, long-lived assets, or equity investments, and no0 impairment charges recorded during the six months ended June 30, ~~2019~~2020 and ~~2018.~~2019.

Fair Value of Financial Instruments

The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate the value, even though these instruments are not recognized at fair value in the consolidated balance sheets. ~~As of June 30, 2019, the Company’s senior notes have a carrying amount of $325,000 and an estimated~~The fair value of ~~$331,500. As of December 31, 2018,~~ the Company’s 5.125% senior notes ~~had a carrying amount of $325,000~~due 2024 (the “2024 Notes”) and an4.625% senior notes due 2027 (the “2027 Notes”) was estimated ~~fair value of $310,375. Quoted~~using quoted market prices in active markets for identical liabilities, ~~based inputs (Level 1) were used to estimate~~which are Level 1 inputs. The carrying amounts and estimated fair ~~value. The senior notes were issued~~value of the 2024 Notes and the 2027 Notes are presented in ~~October 2016 and have a fixed rate of 5.125%.~~the following table. See additional information in “Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note ~~(7)~~(8), Notes Payable and Credit Agreement” of ~~our 2018~~the 2019 Annual Report.


	As of June 30, 2020						As of December 31, 2019
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
2024 Notes	$	325,000	$	323,375	$	325,000	$	337,188
2027 Notes	300,000		289,500		300,000		301,500

The fair value of the Company’s long-term self-insurance accruals cannot be estimated as the Company cannot reasonably determine the timing of future payments.

8. ~~LEASES~~

The Company leases certain office facilities, data centers, and equipment under various operating leases. Leases with an initial term of 12 months or less (primarily related to housing arrangements for healthcare professionals on assignment) are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Most leases include one or more options to renew, with renewal terms that can extend the lease term up to 10 years. Certain leases also include options to terminate the leases within 3 years.

~~The components of lease expense were as follows:~~

Three Months Ended June 30, Six Months Ended June 30,
2019 2019
Lease Cost
Operating lease cost $ 4,569
$ 9,105
Short-term lease cost 5,076
10,998
Variable and other lease cost 599
1,316
Net lease cost $ 10,244
$ 21,419

~~The maturity of lease liabilities as of June 30, 2019 were as follows:~~

Operating Leases
Years ending December 31,
2019 (excluding the six months ended June 30, 2019) $ 9,011
2020 18,220
2021 18,374
2022 18,181
2023 17,887
Thereafter 50,319
Total lease payments $ 131,992
Less imputed interest (21,569 )
Present value of lease liabilities $ 110,423

~~Supplemental cash flow information related to leases was as follows:~~

Six Months Ended June 30,
2019
Cash paid for amounts included in the measurement of operating lease liabilities (operating cash flows) $ 8,694
Operating lease right-of-use assets obtained in exchange for lease obligations $ —



~~Weighted average remaining lease term~~	~~7 years~~
~~Weighted average discount rate~~	~~4.8~~	%

~~Future minimum lease payments under noncancelable operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2018 were as follows:~~

Operating Leases
Years ending December 31,
2019 $ 18,218
2020 18,149
2021 18,349
2022 18,144
2023 17,990
Thereafter 50,436
Total minimum lease payments $ 141,286

~~Rent expense under operating leases (with initial lease terms in excess of one year) was $21,402 for the year ended December 31, 2018.~~

9. INCOME TAXES

The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. With few exceptions, as of June 30, ~~2019,~~2020, the Company is no longer subject to state, local or foreign examinations by tax authorities for tax years before ~~2009~~2010, and the Company is no longer subject to U.S. federal income or payroll tax examinations for tax years before 2015. The IRS conducted, completed, and settled audits of the Company’s 2011-2012 and 2013 tax years related to income and employment tax issues for the Company’s treatment of certain non-taxable per diem allowances and travel benefits in November 2017 and May 2018, respectively.2016. Prior to the ~~Company's~~Company’s acquisition of Advanced, on June 14, 2019, Advanced was under an IRS audit for the years 2011-2013 for various payroll tax matters related to the treatment of certain non-taxable per diem allowances and travel benefits. This audit was completed and an assessment was issued for $8,300 in July 2018. ~~Advanced filed~~The Company received a ~~protest~~final determination from the IRS in ~~August 2018 and had their first IRS Appeals meeting in May 2019. Advanced is no longer subject to state or local examinations by tax authorities~~November 2019 for tax years before 2011. Advanced is no longer subject to U.S. federal income or payroll tax examinations for tax years before 2011, payroll tax examination for the years 2014 and 2015 and income tax examination for the year 2014.$1,300. The Company is indemnified by Advanced for the potential contingent liability for all pre-acquisition open years. The Company acquired Stratus Video on February 14, 2020. The Company is indemnified by ~~Advanced.~~Stratus Video for any potential international income tax and contingent tax liability items for pre-acquisition open years up to $2,500. The Advanced ~~acquisition is~~and Stratus Video acquisitions are more fully described in Note (2), “Acquisitions.”

The Company believes its indemnifications by Advanced and Stratus Video for all pre-acquisition years and its reserve for unrecognized tax benefits and contingent tax issues isare adequate with respect to all open years. Notwithstanding the foregoing, the Company could adjust its provision for income taxes and contingent tax liability based on future developments.

~~10.~~9. COMMITMENTS AND CONTINGENCIES: LEGAL PROCEEDINGS

From time to time, the Company is involved in various lawsuits, claims, investigations, and proceedings that arise in the ordinary course of business. These matters typically relate to professional liability, tax, compensation, contract, competitor disputes and employee-related matters and include individual and class action lawsuits, as well as inquiries and investigations by governmental agencies regarding the Company’s employment and compensation practices. Additionally, some of the Company’s clients may also become subject to claims, governmental inquiries and investigations, and legal actions relating to services provided by the Company’s healthcare professionals. Depending upon the particular facts and circumstances, the Company may also be subject to indemnification obligations under its contracts with such clients relating to these matters. The Company records a liability when management believes an adverse outcome from a loss contingency is both probable and the amount, or a range, can be reasonably estimated. Significant judgment is required to determine both probability of loss and the

estimated amount. The Company reviews its loss contingencies at least quarterly and adjusts its accruals and/or disclosures to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, or other new information, as deemed necessary. The most significant matters for which the Company has established loss contingencies are class actions related to wage and hour claims under California and Federal law. Specifically, among other claims in these lawsuits, it is alleged that ~~employees were not afforded required breaks or compensated for all time worked,~~ employees’ wage statements are not sufficiently clear, and certain expense reimbursements should be included in the regular rate of pay for purposes of calculating overtime rates. The Company believes that its wage and hour practices conform with law in all material respects, but litigation is always subject to inherent ~~uncertainty.~~uncertainty and the Company is not able to reasonably predict if any matter will be resolved in a manner that is materially adverse to the Company beyond the amounts accrued. In addition, for the matters for which it is at least reasonably possible that the estimated loss will change in the near term, the Company is unable to currently estimate the possible loss or range of loss beyond the amounts already accrued.

With regard to ~~outstanding~~ loss contingencies accrued as of June 30, ~~2019,~~2020, which are included in accounts payable and accrued expenses in the condensed consolidated balance ~~sheet,~~sheets, the Company believes that such matters will not, either individually or

in the aggregate, have a material adverse effect on its business, consolidated financial position, results of operations, or cash flows.

~~11.~~10. BALANCE SHEET DETAILS

The consolidated balance sheets detail is as ~~follows as of June 30, 2019 and December 31, 2018:~~follows:


	June 30, 2019			December 31, 2018				June 30, 2020		December 31, 2019
Other current assets:							Other current assets:
Restricted cash and cash equivalents	$	17,102		$	26,329		Restricted cash and cash equivalents	$	17,111	$	18,393
Income tax receivable	2,472			799
Income taxes receivable							Income taxes receivable	—		5,984
Other	15,961			12,759			Other	17,871		16,069
Other current assets	$	35,535		$	39,887		Other current assets	$	34,982	$	40,446

Fixed assets:							Fixed assets:
Furniture and equipment	$	35,578		$	34,211		Furniture and equipment	$	45,570	$	37,315
Software	173,753			162,006			Software	204,443		191,050
Leasehold improvements	9,272			8,615			Leasehold improvements	9,812		9,367
	218,603			204,832				259,825		237,732
Accumulated depreciation	(121,354		)	(114,413		)	Accumulated depreciation	(145,850)		(132,900)
Fixed assets, net	$	97,249		$	90,419		Fixed assets, net	$	113,975	$	104,832

Other assets:							Other assets:
Life insurance cash surrender value	$	68,122		$	55,028		Life insurance cash surrender value	$	82,252	$	79,515
Other	41,787			41,124			Other	38,658		40,739
Other assets	$	109,909		$	96,152		Other assets	$	120,910	$	120,254

Accounts payable and accrued expenses:							Accounts payable and accrued expenses:
Trade accounts payable	$	20,691		$	31,537		Trade accounts payable	$	24,811	$	26,985
Subcontractor payable	49,227			50,892			Subcontractor payable	64,324		75,562
Accrued expenses	35,142			30,236			Accrued expenses	33,046		36,344
Loss contingencies	8,096			24,549			Loss contingencies	10,462		6,146
Professional liability reserve	8,073			8,633			Professional liability reserve	9,098		7,925
Other	3,443			3,756			Other	3,083		3,178
Accounts payable and accrued expenses	$	124,672		$	149,603		Accounts payable and accrued expenses	$	144,824	$	156,140

Accrued compensation and benefits:							Accrued compensation and benefits:
Accrued payroll	$	41,660		$	42,571		Accrued payroll	$	50,262	$	47,381
Accrued bonuses	18,367			18,021			Accrued bonuses	19,294		22,613
Accrued travel expense	2,483			3,417			Accrued travel expense	1,840		2,459
Health insurance reserve	3,985			3,559			Health insurance reserve	5,482		4,019
Workers compensation reserve	8,566			7,817			Workers compensation reserve	8,727		8,782
Deferred compensation	71,292			55,720			Deferred compensation	84,338		81,064
Other	3,584			3,954			Other	1,064		4,614
Accrued compensation and benefits	$	149,937		$	135,059		Accrued compensation and benefits	$	171,007	$	170,932

Other current liabilities:							Other current liabilities:
Acquisition related liabilities	$	10,780		$	7,918		Acquisition related liabilities	$	8,100	$	20,000
Income taxes payable							Income taxes payable	21,483		—
Other	3,564			2,325			Other	4,070		5,302
Other current liabilities	$	14,344		$	10,243		Other current liabilities	$	33,653	$	25,302

Other long-term liabilities:							Other long-term liabilities:
Workers compensation reserve	$	19,078		$	19,454		Workers compensation reserve	$	18,178	$	18,291
Professional liability reserve	33,439			38,324			Professional liability reserve	32,013		34,606
Deferred rent	—			15,012
Unrecognized tax benefits	5,540			4,862			Unrecognized tax benefits	5,696		5,431
Deferred revenue	571			865

Other	958			11			Other	17,728		3,485
Other long-term liabilities	$	59,586		$	78,528		Other long-term liabilities	$	73,615	$	61,813

Item 2. Management’s Discussion and Analysis of Financial Condition and Results

of Operations

The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto and other financial information included elsewhere herein and in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018,~~2019, filed with the Securities and Exchange Commission (“SEC”) on February ~~21,~~ 25, 2020 (“2019 ~~(“2018~~ Annual Report”). Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are “forward-looking statements.” See “Special Note Regarding Forward-Looking Statements.” We undertake no obligation to update the forward-looking statements in this Quarterly Report. References in this Quarterly Report to “AMN Healthcare,” the “Company,” “we,” “us” and “our” refer to AMN Healthcare Services, Inc. and its wholly owned subsidiaries.

Changes to Our Reportable Segments

Effective March 8, 2020, we modified our reportable segments. We previously utilized three reportable segments, which we identified as follows: (1) nurse and allied solutions, (2) locum tenens solutions, and (3) other workforce solutions. In light of our acquisitions as well as our organizational changes to better align our structure with our strategy, our management reorganized our reportable segments to better reflect how the business is evaluated by the chief operating decision maker. Beginning in the first quarter of 2020, we have disclosed the following three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. The nurse and allied solutions segment includes our travel nurse staffing, rapid response nurse staffing and labor disruption, allied staffing, local staffing, and revenue cycle solutions businesses. The physician and leadership solutions segment includes our locum tenens staffing, healthcare interim leadership staffing, executive search, and physician permanent placement businesses. The technology and workforce solutions segment includes remote video interpreting, vendor management systems, workforce optimization, recruitment process outsourcing, education, credentialing and flex pool management businesses. Prior period data in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” has been reclassified to conform to the new segment reporting structure.

Overview of Our Business

We provide healthcare workforce solutions and staffing services to healthcare ~~facilities~~organizations across the nation. As an innovative ~~workforce~~total talent solutions partner, our managed services programs, or “MSP,” vendor management systems, or “VMS,” workforce consulting services, remote video interpretation services, predictive modeling, staff scheduling, ~~mid-revenue~~revenue cycle solutions and the placement of physicians, nurses, allied healthcare professionals and healthcare leaders into temporary and permanent positions enable our clients to successfully reduce staffing complexity, increase efficiency and lead their organizations within the rapidly evolving healthcare environment.

~~We conduct business through three reportable segments: (1) nurse and allied solutions, (2) locum tenens solutions, and (3) other workforce solutions.~~ For the three months ended June 30, ~~2019,~~2020, we recorded revenue of ~~$535.2~~$608.4 million, as compared to ~~$558.1~~$535.2 million for the same period last year. For the six months ended June 30, 2020, we recorded revenue of $1,210.8 million, as compared to $1,067.6 million for the same period last year.

Nurse and allied solutions segment revenue comprised ~~63%~~72% and ~~62%~~70% of total consolidated revenue for the six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. Through our nurse and allied solutions segment, we provide hospitals and other healthcare facilities with a comprehensive managed services solution in which we manage and staff all of the temporary nursing and allied staffing needs of a client and traditional clinical staffing solutions of variable assignment lengths. We also provide revenue cycle solutions, which includes skilled labor solutions for remote medical coding, clinical documentation improvement, case management, clinical data registry, and provides auditing and advisory services.

~~Locum tenens~~Physician and leadership solutions segment revenue comprised ~~15%~~20% and ~~20%~~26% of total consolidated revenue for the six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. Through our ~~locum tenens~~physician and leadership solutions segment, we provide a comprehensive managed services solution in which we manage all of the locum tenens needs of a client and place physicians of all specialties, as well as dentists and advanced practice providers, with clients on a temporary basis as independent contractors. ~~These locum tenens providers are used by our clients to fill temporary vacancies created by vacation~~We also recruit physicians and ~~leave schedules~~healthcare leaders for permanent placement and ~~to bridge the gap while they seek permanent candidates or explore expansion. Our locum tenens clients represent a diverse group of~~place interim leaders and executives across all healthcare ~~organizations throughout the United States, including hospitals, health systems, medical groups, occupational medical clinics, psychiatric facilities, government institutions, and insurance entities.~~settings. The interim healthcare professionals we place ~~are recruited nationwide and~~ are typically placed on contracts with assignment lengths ranging from a few days to one ~~year.~~year, and a growing number of these placements are under our managed services solution.

~~Other~~Technology and workforce solutions segment revenue comprised ~~22%~~8% and ~~18%~~4% of total consolidated revenue for the six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. Through our ~~other~~technology and workforce solutions segment, we provide hospitals and other healthcare facilities with a range of workforce solutions, including: (1) ~~identifying and recruiting physicians and healthcare leaders for permanent placement,~~language interpretation services, (2) ~~placing interim leaders and executives across all healthcare settings, (3) a~~ software-as-a-service (“SaaS”) VMS technologies through which our clients can manage ~~all of~~ their temporary staffing needs, (3)

workforce optimization services that include consulting, data analytics, predictive modeling, and SaaS-based scheduling technology, (4) RPO services that leverage our expertise and support systems to replace or complement a client’s existing internal recruitment function for permanent placement needs, (5) ~~an education program that provides custom healthcare education, research, professional practice tools,~~credentialing services, and ~~professional development services,~~ (6) ~~mid-revenue cycle~~flex pool management ~~and related consulting services, (7) workforce optimization services that include consulting, data analytics, predictive modeling, and SaaS-based scheduling technology, and (8) credentialing~~ services.

As part of our long-term growth strategy to add value for our clients, healthcare professionals, and shareholders, on February 14, 2020, December 19, 2019, June 14, 2019, and January 30, 2019, ~~April 6, 2018 and April 9, 2018,~~ we acquired Stratus Video, b4health, Advanced, and Silversheet, ~~Phillips DiPisa~~respectively. Stratus Video is a remote video interpreting company that provides healthcare interpretation via remote video, over the phone, and ~~Leaders For Today (“PDA”~~onsite in-person, supported by proprietary technology platforms. b4health is an innovative technology company and ~~“LFT”)~~a leading provider of a web-based internal float pool management solution and ~~MedPartners HIM (“MedPartners”), respectively.~~vendor management system for healthcare facilities. Advanced is a national healthcare staffing company that specializes in placing therapists and nurses across multiple settings, including hospitals, schools, clinics, skilled nursing facilities, and home health. Silversheet provides innovative credentialing software solutions to clinicians and healthcare enterprises. PDA and LFT offer a range of leadership staffing and permanent placement solutions for the healthcare industry. MedPartners provides mid-revenue cycle management solutions, including case management, clinical documentation

~~improvement, medical coding and registry services to hospitals and physician medical groups nationwide.~~ See additional information in the accompanying Note (2), “Acquisitions.”

Recent Trends

Demand for our temporary and permanent placement staffing services is driven in part by U.S. economic and labor trends. ~~The U.S. Bureau~~During the first few months of ~~Labor Statistics’ survey data reflects near record levels of healthcare job openings and quits. We view this data, along with a nearly 20-year-low unemployment rate and continued economic growth as~~2020, the positive ~~trends for the healthcare staffing industry. These positive macro economic~~macroeconomic and labor trends ~~have~~ created a highly competitive market for healthcare professionals. However, when the imposition of “shelter-in-place” orders and the suspension of elective and “non-essential” healthcare services occurred in March 2020 in response to the COVID-19 health crisis, demand for many of our businesses declined significantly. Although these “shelter-in-place” orders and suspensions have been loosened and lifted in some parts of the country, general utilization of healthcare continues to be below the pre-COVID-19 levels, which continues to negatively impact demand for many of our business lines other than nursing, language interpretation services and our vendor management technology solutions. At the same time, demand for our nursing services has fluctuated significantly throughout the first half of the year based on COVID-19 related needs. With the uncertainty regarding safety concerns, the increase in unemployment, related economic concerns and the uncertainty surrounding the COVID-19 pandemic, we are unable to predict the extent and duration to which demand for our businesses will be impacted by the COVID-19 pandemic.

In our nurse and allied solutions segment, prior to the COVID-19 pandemic, our ability to recruit enough nurses to meet the then-current demand levels was impacted by the tight labor market and modest bill rate increases. Starting in early March, and in response to the COVID-19 public health crisis, bill rates and wages for ~~clinicians~~nurses increased significantly in order to attract nurses into taking higher risk positions. In the latter part of April, we experienced a significant cancellation of requests for nurses as hospitalization rates from COVID-19 were initially well below originally expected levels in most areas of the US other than the northeast. In May and early June, with the decrease in COVID-19 related requests coupled with the lower healthcare utilization overall, demand in our ~~clinician supply,~~nursing businesses dropped well below prior year levels, and bill rates started trending back towards standard rate levels. Starting in late-June, as COVID-19 infection rates and hospitalizations significantly increased across many areas of the country, demand for nurses rose quickly, and total demand for nursing exceeded prior year levels by mid-July. Demand for nurses in specialties including ICU, telemetry, and medical surgical nurses is particularly strong in states including California, Texas, Florida, Arizona, and Georgia. With the higher demand, and urgent need to quickly fill positions, bill rates and wages are increasing again. Many of the recent COVID-19 related requests for nurse staffing is for shorter duration of six to ten weeks due to client uncertainty as to how long these related patient volumes will remain at elevated levels.

Prior to the COVID-19 public health crisis, our allied staffing division experienced a decline in demand for physical therapists from skilled nursing facility and home health clients resulting from recently implemented Medicare reimbursement changes. This decline in demand was further exacerbated by the impact of COVID-19 in March. At the same time, we experienced significant demand for respiratory therapists as a result of the COVID-19 pandemic. Similar to our nursing division, we experienced an increased level of order cancellations for these respiratory therapists as the number of COVID-19 cases began to flatten.

During April, the vast majority of speech language therapists contracted with schools were able to start working again through the rapid adoption of our tele-therapy platform. Like nursing, the allied staffing division has ~~not kept pace~~experienced a recent surge in demand for respiratory therapists due to the increased COVID-19 hospitalization rates across the country in late June. Demand has also improved for our imaging and lab specialties, but continues to be well below prior year for our physical therapy discipline.

In our physician and leadership solutions segment, our locum tenens division started the year well, with recruiter productivity and revenue increasing after disruptions resulting from process and technology changes made during 2018. However, in mid-March, as a result of COVID-19, our locum tenens business experienced a significant increase in order cancellations and a decrease in overall demand due to the suspension of elective procedures and non-essential healthcare

services. With healthcare utilization resuming in late April, demand and placements for locum tenens has been slowly improving, but the recovery is inconsistent across specialties.

For our interim leadership division, demand decreased as providers reacted to lower patient volumes and focused on cost containment. Our physician permanent placement and healthcare executive search businesses experienced a decline in overall search demand as many clients have temporarily suspended filling open roles due to uncertainty from the COVID-19 public health crisis. Since June, demand for our interim and permanent placement services has improved from their lowest levels, and clients resumed more normal operating activities in line with growth in ~~client demand.~~patient volumes and a rebound in elective procedures.

~~The consolidation within the healthcare industry is creating larger, more sophisticated~~In our technology and ~~complex health systems that we believe has elevated the need for strategic~~ workforce solutions ~~capable~~segment, our VMS technologies initially experienced increased growth following the outbreak of ~~partnering~~the COVID-19 public health crisis as clients utilized our technologies to ~~solve~~effectively manage their ~~recruiting, staffing~~increased demand for nurses. As demand for nurses declined during the quarter, utilization of the VMS technologies also declined. However, more recently, orders and ~~workforce optimization requirements. Given~~placements in the ~~increasing need~~technologies have risen again, and new clients are also adopting the platforms to engage with contingent labor.

In early March, the utilization in our language interpretation business declined as a result of the COVID-19-related suspension or restriction of elective and “non-essential” healthcare services. However, utilization started to increase in late April as many of these restrictions were lifted and healthcare utilization resumed more normal activities, including working through a backlog of elective procedures. By mid-June, weekly interpretation minutes utilized were above pre-COVID-19 levels, and have continued to steadily increase through July.

At the onset of the COVID-19 pandemic, we experienced a delay in discussions with clients regarding new contracts or expansions. As clients have recently begun to resume normal operations, we have contracted for ~~partners capable of offering a comprehensive workforce solution, we continue to see the benefits of our workforce solutions strategy, particularly with our MSPs.~~several new managed services programs and service line expansions. As a result of our ongoing focus on these types of strategic MSP relationships, the percentage of our staffing revenue derived from our MSP clients continues to ~~increase, and we believe these strategic, longer-term relationships will continue to comprise a greater proportion of revenue in our staffing businesses.~~increase.

In ~~our nurse and allied solutions segment, overall demand is strong and at~~response to the highest levels seen this year. However, placement activity has been unfavorably impacted by fewer contingent nurse staffing needs from a large client. Limited growth in bill rates is also impacting our ability to sufficiently recruit the nurses to meet the increased demand. Our allied staffing business continues its steady organic revenue growth. We believe that the acquisition of Advanced and their supply of nurse and allied healthcare professionals will help us better address our client’s staffing needs.

In our locum tenens solutions segment, we implemented operating model changes together with new front and back office technologies primarily during 2018. Although these changes are expected to have a long-term positive impact on our business, they were significantly more disruptive than anticipated to our sales productivity and revenue. Althoughreduced demand for ~~hospitalists~~services as a result of the COVID-19 pandemic, throughout the second quarter, we took actions to reduce our selling, general and ~~emergency room physicians has significantly declined over the past 12 months, the demand environment for locum tenens in~~administrative expenses by approximately $120 million when annualized. Cost reduction actions taken include, among other ~~specialties, especially behavioral health, is strong.~~

Inthings, suspending employer contributions under our ~~other~~401(k) retirement savings plan and deferred compensation plan, reducing our workforce ~~solutions segment, better~~to correspond to reduced demand, and ~~placements in the interim leadership~~reducing variable compensation, travel, professional services and physician permanent placement divisions are driving improved segment performance and our profitability on a consolidated basis. Since experiencing a decline in our mid-revenue cycle division revenue in recent quarters following certain changes made to our MedPartners business after its acquisition, this division's revenue performance has since stabilized due in part to growth in serving our MSP customers.marketing expenses.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with United States generally accepted accounting principles (“U.S. GAAP”) requires us to make estimates and judgments that affect our reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to intangible assets purchased in a business combination, asset impairments, accruals for self-insurance, compensation and related benefits, accounts receivable, contingencies and litigation, earn-out liabilities, and income taxes. We base these estimates on the information that is currently available to us and on various other assumptions that we believe are reasonable under the circumstances. Actual results could vary from these estimates under different assumptions or conditions. If these estimates differ significantly from actual results, our consolidated financial statements and future results of operations may be materially impacted. There have been no material changes in our critical accounting policies and estimates, other than the adoption of the Accounting Standards ~~Update~~Updates (“~~ASU”~~ASUs”) ~~2016-02~~ described in Item 1. Condensed Consolidated Financial Statements—Note 1, “Basis of Presentation,” as compared to the critical accounting policies and estimates described in our ~~2018~~2019 Annual Report.

Results of Operations

The following table sets forth, for the periods indicated, selected unaudited condensed consolidated statements of operations data as a percentage of revenue. Our results of operations include three reportable segments: (1) nurse and allied solutions, (2) ~~locum tenens~~physician and leadership solutions, and (3) ~~other~~technology and workforce solutions. The ~~PDA, LFT, MedPartners,~~ Silversheet, Advanced, b4health and ~~Advanced~~Stratus Video acquisitions impact the comparability of the results between the three and six months ended June 30, ~~2019~~2020 and ~~2018~~2019 depending on the timing of the applicable acquisition. Our historical results are not necessarily indicative of our future results of operations.


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Unaudited Condensed Consolidated Statements of Operations:
Revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of revenue	67.5		66.5		67.0		66.6
Gross profit	32.5		33.5		33.0		33.4
Selling, general and administrative	22.5		22.7		23.4		22.6
Depreciation and amortization	3.7		2.4		3.5		2.4
Income from operations	6.3		8.4		6.1		8.4
Interest expense, net, and other	1.9		1.1		1.8		1.0
Income before income taxes	4.4		7.3		4.3		7.4
Income tax expense	0.7		1.9		1.4		1.5
Net income	3.7	%	5.4	%	2.9	%	5.9	%

Three Months Ended June 30, Six Months Ended June 30,
2019 2018 2019 2018
Unaudited Condensed Consolidated Statements of Operations:
Revenue 100.0 % 100.0 % 100.0 % 100.0 %
Cost of revenue 66.5
67.6
66.6
67.7
Gross profit 33.5
32.4
33.4
32.3
Selling, general and administrative 22.7
20.7
22.6
20.4
Depreciation and amortization 2.4
1.9
2.4
1.7
Income from operations 8.4
9.8
8.4
10.2
Interest expense, net, and other 1.1
1.1
1.0
1.1
Income before income taxes 7.3
8.7
7.4
9.1
Income tax expense 1.9
2.3
1.5
1.9
Net income 5.4 % 6.4 % 5.9 % 7.2 %

Comparison of Results for the Three Months Ended June 30, ~~2019~~2020 to the Three Months Ended June 30, ~~2018~~2019

Revenue. Revenue ~~decreased 4%~~increased 14% to ~~$535.2~~$608.4 million for the three months ended June 30, ~~2019~~2020 from ~~$558.1~~$535.2 million for the same period in ~~2018,~~2019, primarily attributable to ~~an approximately $14.0 million decrease in labor disruption revenue and lower revenue in the locum tenens solutions segment, partially offset by~~ additional revenue of ~~$5.4~~$61.5 million from our ~~Silversheet~~Advanced, b4health, and ~~Advanced acquisitions.~~Stratus Video acquisitions and higher organic revenue in our nurse and allied solutions segment. Excluding the additional revenue from acquisitions, revenue ~~decreased 5%~~increased 2%.

Nurse and allied solutions segment revenue ~~decreased slightly~~increased 21% to ~~$331.6~~$444.5 million for the three months ended June 30, ~~2019~~2020 from ~~$332.7~~$368.0 million for the same period in ~~2018.~~2019. The ~~$1.1~~$76.5 million ~~decrease~~increase was primarily attributable to ~~an approximately $14.0~~$31.6 million ~~decrease in labor disruption~~of revenue from our Advanced acquisition, which benefited from having direct access to our MSP orders. In addition, the average bill rate increased by 20%, which was partially offset by ~~$5.0 million of revenue in connection with the Advanced acquisition and~~ a ~~1% increase~~13% decrease in the average number of healthcare professionals on assignment and an approximately $11.0 million decrease in labor disruption revenue during the three months ended June 30, ~~2019~~.2020.

~~Locum tenens~~Physician and leadership solutions segment revenue decreased 24% to ~~$82.1~~$108.6 million for the three months ended June 30, ~~2019~~2020 from ~~$107.3~~$142.4 million for the same period in ~~2018.~~2019. The ~~$25.2~~$33.8 million decrease was primarily attributable to a ~~25%~~22% decrease in the number of days filled and a 4% decrease in the revenue per day filled in our locum tenens business, which was attributable to the impact of COVID-19 since the second half of March of 2020, during the three months ended June 30, ~~2019, partially offset by~~2020. In addition, revenue in our interim leadership and permanent placement businesses declined during the three months ended June 30, 2020 due to a ~~2% increase~~decrease in overall demand as some clients placed new searches on hold due to the ~~revenue per day filled.~~COVID-19 public health crisis.

~~Other~~Technology and workforce solutions segment revenue increased 3%123% to ~~$121.5~~$55.3 million for the three months ended June 30, ~~2019~~2020 from ~~$118.1~~$24.7 million for the same period in ~~2018.~~2019. The ~~$3.4~~$30.6 million increase was primarily attributable to additional revenue of $29.8 million from our b4health and Stratus Video acquisitions along with growth in our ~~interim leadership, permanent placement and~~organic VMS ~~businesses, partially offset by a decline in our mid-revenue cycle~~ business during the three months ended June 30, ~~2019.~~2020.

For the three months ended June 30, 2020 and 2019, revenue under our MSP arrangements comprised approximately 55% and 46% of our consolidated revenue, 70% and 59% for nurse and allied solutions segment revenue and 22% and 19% for physician and leadership solutions segment revenue, respectively.

Gross Profit. Gross profit ~~decreased 1%~~increased 10% to ~~$179.5~~$197.5 million for the three months ended June 30, ~~2019~~2020 from ~~$181.0~~$179.5 million for the same period in ~~2018,~~2019, representing gross margins of ~~33.5%~~32.5% and ~~32.4%~~33.5%, respectively. The decline in consolidated gross margin for the three months ended June 30, ~~2019~~2020 was ~~positively impacted by~~primarily due to a ~~higher~~lower gross margin in our nurse and allied solutions

segment, driven primarily by ~~a higher labor disruption margin and~~lower bill-to-pay spreads, partially offset by the change in sales mix resulting from our b4health and Stratus Video acquisitions and their higher ~~health insurance costs, higher other workforce solutions gross margin, and a favorable segment mix shift. These positive factors were partially offset by a lower margin in~~margins as compared to our ~~locum tenens solutions segment.~~staffing businesses. Gross margin by reportable segment for the three months ended June 30, 2020 and 2019 was 27.0% and ~~2018 was 27.5% and 26.3%~~28.1% for nurse and allied solutions, ~~27.8%~~36.4% and ~~29.8%~~37.2% for ~~locum tenens~~physician and leadership solutions, and ~~54.0%~~68.7% and ~~52.2%~~93.4% for ~~other~~technology and workforce solutions, respectively. The year-over-year gross margin decline in the ~~locum tenens~~technology and workforce solutions segment was ~~driven by~~primarily due to the change in sales mix resulting from the addition of lower ~~bill-to-pay spreads.~~margin Stratus Video as compared to our SaaS-based technologies within the segment.

Selling, General and Administrative Expenses. Selling, general and administrative (“SG&A”) expenses were ~~$121.7~~$137.1 million, representing ~~22.7%~~22.5% of revenue, for the three months ended June 30, ~~2019,~~2020, as compared to ~~$115.5~~$121.7 million, representing ~~20.7%~~22.7% of revenue, for the same period in ~~2018.~~2019. The increase in SG&A expenses was primarily due to ~~$2.3~~$9.7 million of additional SG&A expenses from the ~~Silversheet~~Advanced, b4health and ~~Advanced~~Stratus Video acquisitions, a ~~$3.8~~$8.3 million increase inrelated to acquisition, integration, changes in the fair value of earn-out liabilities from acquisitions, restructuring, and extraordinary legal expenses, ~~along with higher employee compensation expenses. The increase was partially offset by an additional~~a $3.5 million oflower favorable actuarial-based ~~decreases~~decrease in our professional liability reserves as compared to the same period in ~~2018.~~2019, and a $2.6 million increase in share-based compensation expense. The overall increase was partially offset by cost reduction measures that were initiated during the three months ended June 30, 2020. SG&A expenses broken down among the reportable segments, unallocated corporate overhead, and share-based compensation are as follows:


						(In Thousands)
	(In Thousands) Three Months Ended June 30,					Three Months Ended June 30,
	2019		2018			2020		2019
Nurse and allied solutions	$	42,342	$	43,479	Nurse and allied solutions	$	58,829	$	50,657
Locum tenens solutions	15,721		18,577
Other workforce solutions	38,530		33,017
Physician and leadership solutions					Physician and leadership solutions	24,239		34,171
Technology and workforce solutions					Technology and workforce solutions	16,488		11,765
Unallocated corporate overhead	21,373		17,181		Unallocated corporate overhead	31,165		21,373
Share-based compensation	3,702		3,281		Share-based compensation	6,347		3,702
	$	121,668	$	115,535		$	137,068	$	121,668

Depreciation and Amortization Expenses. Amortization expense increased ~~14%~~104% to ~~$7.4~~$15.1 million for the three months ended June 30, ~~2019~~2020 from ~~$6.5~~$7.4 million for the same period in ~~2018, with the increase~~2019, primarily attributable to additional amortization expenses related to the intangible assets acquired in the ~~Silversheet~~Advanced, b4health and ~~Advanced acquisitions.~~Stratus Video acquisitions and the shortened useful life of the tradename intangible asset acquired in the MedPartners acquisition, which occurred during the third quarter of 2019. Depreciation expense increased ~~32%~~30% to ~~$5.4~~$7.0 million for the three months ended June 30, ~~2019~~2020 from ~~$4.1~~$5.4 million for the same period in ~~2018,~~2019, primarily attributable to an increase in purchased and developed hardware and software placed in service for our ongoing front and back office information technology initiatives.

Interest Expense, Net, and Other. Interest expense, net, and other, was ~~$6.1~~$11.4 million during the three months ended June 30, ~~2019~~2020 as compared to ~~$6.4~~$6.1 million for the same period in ~~2018.~~2019. The ~~decrease~~increase is primarily due to ~~higher income from restricted investments related to our captive insurance company for the three months ended June 30, 2019, partially offset by~~ a higher average debt outstanding balance for the three months ended June 30, ~~2019,~~2020, which resulted from borrowings used to finance the ~~Silversheet~~Stratus Video acquisition and ~~Advanced acquisitions.~~the consummation of the issuance and sale of our 2027 Notes (as defined below in this Item 2) in October 2019.

Income Tax Expense. Income tax expense was ~~$10.2~~$4.6 million for the three months ended June 30, ~~2019~~2020 as compared to ~~$12.9~~$10.2 million for the same period in ~~2018,~~2019, reflecting effective income tax rates of ~~26%~~17% and ~~27%~~26% for the three months ended June 30, ~~2019~~2020 and ~~2018,~~2019, respectively. The decrease in the effective income tax rate was primarily attributable to the ~~Company’s~~recognition of a $4.3 million discrete tax ~~benefits of $1.9 million and $0.7 million in relation to income before income taxes of $39.1 million and $48.4 million~~benefit for the three months ended June 30, 2019 and 2018, respectively. We currently estimate our annual effective tax rate to be approximately 25% for 2019. The 26% effective tax rate for the three months ended June 30, 2019 differs from our estimated annual effective tax rate of 25% primarily due to less proportionate discrete tax benefits recorded during the three months ended June 30, 2019, as compared to the six months ended June 30, 2019, in relation to income before income taxes. The discrete tax benefits are related to equity awards vested and exercised and fair value changes in the cash surrender value of our Company Owned Life Insurance (“COLI”). during the three months ended June 30, 2020 compared to a $0.6 million discrete tax benefit for COLI during the same period in 2019, in relation to income before income taxes of $27.0 million and $39.1 million for the three months ended June 30, 2020 and 2019, respectively. We currently estimate our annual effective tax rate to be approximately 32% for 2020. The 17% effective tax rate for the three months ended June 30, 2020 differs from our estimated annual effective tax rate of 32% primarily due to the discrete tax benefit recognized during the three months ended June 30, 2020, in relation to income before income taxes, as discussed above.

Comparison of Results for the Six Months Ended June 30, ~~2019~~2020 to the Six Months Ended June 30, ~~2018~~2019

Revenue. Revenue ~~decreased 1%~~increased 13% to ~~$1,067.6~~$1,210.8 million for the six months ended June 30, ~~2019~~2020 from ~~$1,080.6~~$1,067.6 million for the same period in ~~2018,~~2019, primarily attributable to additional revenue of $117.9 million from our Silversheet, Advanced, b4health, and Stratus Video acquisitions and higher organic revenue in our nurse and allied solutions segment, partially offset

by an approximately ~~$10.0~~$12.0 million decrease in labor disruption revenue and lower revenue in ~~the locum tenens~~our physician and leadership solutions ~~segment, partially offset by additional revenue of $39.7 million from our PDA, LFT, MedPartners, Silversheet, and Advanced acquisitions.~~segment. Excluding the additional revenue from acquisitions, revenue ~~decreased 5%~~increased 2%.

Nurse and allied solutions segment revenue ~~decreased slightly~~increased 17% to ~~$668.7~~$868.8 million for the six months ended June 30, ~~2019~~2020 from ~~$670.9~~$741.5 million for the same period in ~~2018.~~2019. The ~~$2.2~~$127.3 million ~~decrease~~increase was primarily attributable to ~~an approximately $10.0 million decrease in labor disruption revenue and a 1% decrease in the average bill rate during the six months ended June 30, 2019, partially offset by~~ additional revenue of ~~$5.0~~$72.2 million in connection with the Advanced acquisition and an increase in the average bill rate of 10%, partially offset by a ~~1% increase~~8% decrease in the average number of healthcare professionals on ~~assignment.~~assignment and an approximately $12.0 million decrease in labor disruption revenue during the six months ended June 30, 2020.

~~Locum tenens~~ Physician and leadership solutions segment revenue decreased ~~23%~~12% to ~~$162.6~~$246.5 million for the six months ended June 30, ~~2019~~2020 from ~~$210.4~~$279.5 million for the same period in ~~2018.~~2019. The ~~$47.8~~$33.0 million decrease was primarily attributable to a ~~24%~~11% decrease in the number of days filled during the six months ended June 30, ~~2019, partially offset by~~2020 and a 2% ~~increase~~decrease in the revenue per day ~~filled.~~filled in our locum tenens business. In addition, revenue in our interim leadership and permanent placement businesses declined during the six months ended June 30, 2020 due to a decrease in overall demand as some clients placed new searches on hold due to the COVID-19 public health crisis.

~~Other~~Technology and workforce solutions segment revenue increased ~~19%~~105% to ~~$236.4~~$95.5 million for the six months ended June 30, ~~2019~~2020 from ~~$199.3~~$46.6 million for the same period in ~~2018.~~2019. Of the ~~$37.1~~$48.9 million increase, ~~$34.7~~$45.6 million was attributable to additional revenue ~~in connection with the PDA, LFT, MedPartners,~~from our b4health and ~~Silversheet~~Stratus Video acquisitions ~~with the remainder primarily attributable to growth in our permanent placement and VMS businesses, partially offset by a decline in our organic mid-revenue cycle business~~ during the six months ended June 30, ~~2019.~~2020.

For the six months ended June 30, 2020 and 2019, revenue under our MSP arrangements comprised approximately 51% and 47% of our consolidated revenue, 65% and 60% for nurse and allied solutions segment revenue and 19% and 20% for physician and leadership solutions segment revenue, respectively.

Gross Profit. Gross profit increased 2%12% to ~~$356.3~~$399.6 million for the six months ended June 30, ~~2019~~2020 from ~~$348.8~~$356.3 million for the same period in ~~2018,~~2019, representing gross margins of ~~33.4%~~33.0% and ~~32.3%~~33.4%, respectively. The decline in consolidated gross margin for the six months ended June 30, ~~2019~~2020 was positively impacted by higher-than-average gross margins from PDA, LFT, and MedPartners and a change in our physician permanent placement business model that prompted a $4.3 million classification of certain recruiter compensation expenses to SG&A that was previously in cost of revenue. Net of these factors, our year-over-year gross margin declined primarily due to a lower gross margin in our ~~locum tenens~~nurse and allied solutions ~~segment.~~segment, driven primarily by lower bill-to-pay spreads, partially offset by the change in sales mix resulting from our b4health and Stratus Video acquisitions and their higher margins as compared to our staffing businesses. Gross margin by reportable segment for the six months ended June 30, ~~2019~~2020 and ~~2018~~2019 was 27.7% and ~~27.2%~~28.3% for nurse and allied solutions, ~~27.8%~~36.6% and ~~29.2%~~36.9% for ~~locum tenens~~physician and leadership solutions, and ~~53.3%~~71.7% and ~~52.7%~~93.0% for ~~other~~technology and workforce solutions, respectively. The year-over-year gross margin decline in the ~~locum tenens~~technology and workforce solutions segment was ~~driven by~~primarily due to the change in sales mix resulting from the addition of lower ~~bill-to-pay spreads.~~margin Stratus Video as compared to our SaaS-based technologies within the segment.

Selling, General and Administrative Expenses. SG&A expenses were ~~$241.7~~$283.3 million, representing ~~22.6%~~23.4% of revenue, for the six months ended June 30, ~~2019,~~2020, as compared to ~~$220.3~~$241.7 million, representing ~~20.4%~~22.6% of revenue, for the same period in ~~2018.~~2019. The increase in SG&A expenses was primarily due to ~~$11.0~~$18.7 million of additional SG&A expenses from the ~~PDA, LFT, MedPartners,~~ Silversheet, Advanced, b4health, and ~~Advanced~~Stratus Video acquisitions, a ~~$7.3~~$17.3 million increase inrelated to acquisition, integration, changes in the fair value of earn-out liabilities from acquisitions, restructuring, and extraordinary legal expenses, a ~~$2.7 million increase in share-based compensation expense and higher employee compensation expenses. The increase was partially offset by an additional~~ $3.5 million oflower favorable actuarial-based ~~decreases~~decrease in our professional liability reserves as compared to the same period in ~~2018.~~2019, and a $2.4 million increase in share-based compensation expense. The increase was partially offset by cost reduction measures that were initiated during the three months ended June 30, 2020. SG&A expenses broken down among the reportable segments, unallocated corporate overhead, and share-based compensation are as follows:


						(In Thousands)
	(In Thousands) Six Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2020		2019
Nurse and allied solutions	$	88,523	$	86,464	Nurse and allied solutions	$	120,189	$	103,383
Locum tenens solutions	32,283		38,168
Other workforce solutions	72,735		56,651
Physician and leadership solutions					Physician and leadership solutions	60,283		68,495
Technology and workforce solutions					Technology and workforce solutions	31,823		21,663
Unallocated corporate overhead	39,236		32,844		Unallocated corporate overhead	59,733		39,236
Share-based compensation	8,888		6,145		Share-based compensation	11,274		8,888
	$	241,665	$	220,272		$	283,302	$	241,665

Depreciation and Amortization Expenses. Amortization expense increased ~~28%~~104% to ~~$14.0~~$28.5 million for the six months ended June 30, ~~2019~~2020 from ~~$10.9~~$14.0 million for the same period in ~~2018,~~2019, with the increase primarily attributable to additional amortization expenses related to the intangible assets acquired in the ~~PDA, LFT,~~Advanced, b4health and Stratus Video acquisitions and the shortened useful life of the tradename intangible asset acquired in the MedPartners ~~Silversheet and Advanced acquisitions.~~acquisition, which occurred during the third

quarter of 2019. Depreciation expense increased ~~37%~~32% to ~~$10.4~~$13.7 million for the six months ended June 30, ~~2019~~2020 from ~~$7.6~~$10.4 million for the same period in ~~2018,~~2019, primarily attributable to an increase in purchased and developed hardware and software placed in service for our ongoing front and back office information technology initiatives.

Interest Expense, Net, and Other. Interest expense, net, and other, was ~~$11.7~~$22.5 million during the six months ended June 30, ~~2019~~2020 as compared to $11.7 million for the same period in ~~2018.~~2019. The ~~slight~~ increase is primarily due to a higher average debt outstanding balance for the six months ended June 30, ~~2019,~~2020, which resulted from borrowings used to finance the ~~Silversheet~~Stratus Video acquisition and ~~Advanced acquisitions, partially offset by higher income from restricted investments related to~~the consummation of the issuance and sale of our ~~captive insurance company for the six months ended June 30,~~2027 Notes (as defined below in this Item 2) in October 2019.

Income Tax Expense. Income tax expense was ~~$15.5~~$16.4 million for the six months ended June 30, ~~2019~~2020 as compared to income tax expense of ~~$20.1~~$15.5 million for the same period in ~~2018,~~2019, reflecting effective income tax rates of ~~20%~~32% and 20% for these periods, respectively. The increase in the effective income tax rate was primarily attributable to the recognition of discrete tax benefits of $0.6 million and $8.3 million in relation to income before income taxes of $51.6 million and $78.5 million for the six months ended June 30, 2020 and 2019, respectively. We currently estimate our annual effective income tax rate to be approximately ~~25%~~32% for 2019. The 20% effective tax rate for the six months ended June 30, 2019 differs from our estimated annual effective income tax rate of 25% primarily due to a discrete tax benefit of $5.5 million relating to the equity awards vested and exercised and a discrete tax2020.

~~benefit of $2.0 million relating to fair value changes in the cash surrender value of our COLI for the six months ended June 30, 2019.~~

Liquidity and Capital Resources

In summary, our cash flows were:

Historically, our primary liquidity requirements have been for acquisitions, working capital requirements, and debt service under our credit facilities and ~~the Notes.~~senior notes. We have funded these requirements through internally generated cash flow and funds borrowed under our credit facilities. As of June 30, ~~2019~~,2020, (1) the total of our Additional Term Loan (as defined below) outstanding (including both current and long-term portions) was ~~$150.0~~$248.4 million, (2) ~~$196.0~~$100.0 million was drawn with ~~$188.7~~$282.6 million of available credit under the Senior Credit Facility (as defined below), ~~and~~ (3) the aggregate principal amount of our 5.125% Senior Notes due 2024 (the ~~“Notes”~~“2024 Notes”) outstanding equaled $325.0 million and (4) the aggregate principal amount of our 4.625% senior notes due 2027 (the “2027 Notes”) outstanding equaled $300.0 million. We describe in further detail our credit agreement, in effect prior to the second amendment thereof, under which our Senior Credit Facility is governed, the 2024 Notes, and the 2027 Notes in “Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note ~~(7)~~(8), Notes Payable and Credit Agreement” of our ~~2018~~2019 Annual Report on Form 10-K. See additional information on our Amended Credit Agreement (as defined below) in Note (6), “Notes Payable and Credit Agreement” to the accompanying Condensed Consolidated Financial Statements.

We believe that cash generated from operations and available borrowings under our Senior Credit Facility will be sufficient to fund our operations, including expected capital expenditures, for the next 12 months and beyond. We intend to finance potential future acquisitions with cash provided from operations, borrowings under our Senior Credit Facility or other borrowings under our Amended Credit Agreement, bank loans, debt or equity offerings, or some combination of the foregoing. The following discussion provides further details of our liquidity and capital resources.

Operating Activities

Net cash provided by operating activities for the six months ended June 30, ~~2019~~2020 was ~~$65.3~~$128.3 million, compared to ~~$125.9~~$65.3 million for the same period in ~~2018.~~2019. The ~~decrease~~increase in net cash provided by operating activities was primarily attributable to (1) ~~declined operating results,~~an increase in other liabilities between periods of $28.6 million, and a corresponding decrease in income tax receivable between periods of $7.8 million, primarily due to our election to defer estimated income tax payments and employer payroll taxes in accordance with the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), (2) ~~a decrease~~an increase in accounts payable and accrued expenses between periods of $15.4 million primarily due to the payment of a loss contingency during the second quarter of 2019 and the timing of payments, (3) ~~increases~~a decrease in ~~subcontractor receivables,~~other assets between periods of $11.9 million due to lower long-term prepayments and ~~(4) increases in income tax receivable and other assets.~~deposits. The overall ~~decrease~~increase was partially offset by ~~increases~~a decrease in accrued compensation and benefits between periods of $13.0 million primarily due to timing of payments. Our Days Sales Outstanding (“DSO”) was 55 days at June 30, 2020, 55 days at December 31, 2019, and 63 days at June 30, ~~2019, 64 days at December 31, 2018, and 58 days at June 30, 2018.~~2019.

Investing Activities

Net cash used in investing activities for the six months ended June 30, ~~2019~~2020 was ~~$240.7~~$513.3 million, compared to ~~$239.0~~$240.7 million for the same period in ~~2018.~~2019. The increase was primarily due to ~~$228.1~~(1) $476.5 million used for acquisitions during the six months ended June 30, ~~2019,~~2020, as compared to ~~$218.0~~$228.1 million ~~used for acquisitions~~ during the six months ended June 30, ~~2018. The increase was partially offset by~~2019, and (2) a net ~~proceeds~~purchase of restricted investments related to our captive insurance company of $9.0 million during the six months ended June 30, 2020, as compared to net proceeds of $9.4 million during the six months ended June 30, ~~2019, as compared to $1.5 million during the six months ended June 30, 2018. See additional information in the accompanying Note (2), “Acquisitions.” Capital~~2019. In addition, capital expenditures were ~~$15.5~~$19.7 million and ~~$16.5~~$15.5 million for the six months ended June 30, 2020 and 2019, ~~and 2018,~~ respectively.

Financing Activities

Net cash provided by financing activities during the six months ended June 30, 2020 was $329.0 million, primarily due to borrowings of $225.0 million under the Senior Credit Facility (as defined below) and $250.0 million of borrowings under the Additional Term Loan (as defined below), which were primarily used to fund our Stratus Video acquisition, partially offset by (1) the repayment of $125.0 million under the Senior Credit Facility, (2) $10.6 million for acquisition contingent consideration earn-out payments, (3) $4.6 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards, and (4) $4.2 million payment of financing costs in connection with the Amended Credit Agreement (as defined below). Net cash provided by financing activities during the six months ended June 30, 2019 was $189.3 million, primarily due to borrowings of $101.0 million under the Senior Credit Facility ~~(as defined below)~~ and $150.0 million of borrowings under the Term Loan (as defined below) used to fund our Advanced acquisition, partially offset by (1) the repayment of $25.0 million under the Senior Credit Facility, (2) $18.7 million paid in connection with the repurchase of ~~our~~ common stock, (3) $5.7 million for acquisition contingent consideration earn-out payments, and (4) $11.5 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards. Net cash provided by financing activities during the six months ended June 30, 2018 was $118.7 million, primarily due to borrowings of $195.0 million under the Senior Credit Facility, partially offset by (1) the repayment of $40.0 million under the Senior Credit Facility, (2) $20.9 million paid in connection with the repurchase of common stock, (3) $2.3 million payment of financing costs in connection with the new credit agreement, (4) $1.7 million for acquisition contingent consideration earn-out payments, and (5) $11.4 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards.

Amended Credit Agreement

On February 9, 2018, we entered into a credit agreement (the “New Credit Agreement”) with several lenders to provide for a $400.0 million secured revolving credit facility (the “Senior Credit Facility”) to replace our then-existing credit agreement. The Senior Credit Facility includes a $50.0 million sublimit for the issuance of letters of credit and a $50.0 million sublimit for swingline loans. On June 14, 2019, we entered into the first amendment to the New Credit Agreement (the “First Amendment”) to provide for, among other things, a $150.0 million secured term loan credit facility (the “Term Loan”). On February 14, 2020, we entered into the second amendment to the New Credit Agreement (the “Second Amendment”) to provide for, among other things, a $250.0 million secured term loan credit facility (the “Additional Term Loan” and, together with the Senior Credit Facility, the “Credit Facilities”). The ~~First~~Second Amendment (together with the New Credit Agreement and the First Amendment, collectively, the “Amended Credit Agreement”) ~~also~~ extended the maturity date of the Senior Credit Facility to be coterminous with the Additional Term Loan. Our obligations under the Amended Credit Agreement are secured by substantially all of our assets. For more detail regarding the terms of the Amended Credit Agreement, including maturity dates, payment and interest terms, please see Note (6) to the accompanying Condensed Consolidated Financial Statements, “Notes Payable and Credit Agreement.”

At June 30, ~~2019~~,2020, we maintained outstanding standby letters of credit totaling ~~$17.6~~$19.8 million as collateral in relation to our workers’ compensation insurance agreements and a corporate office lease agreement. Of the ~~$17.6~~$19.8 million of outstanding letters of credit, we have collateralized $2.4 million in cash and cash equivalents and the remaining ~~amounts are~~$17.4 million is collateralized by the Senior Credit Facility. Outstanding standby letters of credit at December 31, ~~2018~~2019 totaled ~~$17.6~~$19.8 million.

Off-Balance Sheet Arrangements

At June 30, ~~2019~~,2020, we did not have any off-balance sheet ~~arrangement~~arrangements that ~~has~~have or isare reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

Contractual Obligations

There have been no material changes during the six months ended June 30, ~~2019,~~2020, other than the borrowings and repayments under the ~~New Credit Agreement and~~ Amended Credit Agreement described in the accompanying Note (2), “Acquisitions” and Note (6), “Notes Payable and Credit Agreement,” to the table entitled “Contractual Obligations” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our ~~2018~~2019 Annual Report.

Recent Accounting Pronouncements

In ~~June 2016,~~December 2019, the FASB issued ASU ~~2016-13, “Measurement of Credit Losses on Financial Instruments.~~2019-12, “Simplifying the Accounting for Income Taxes.” The standard ~~introduces~~is expected to reduce cost and complexity related to accounting for income taxes. The new ~~accounting models for determining~~guidance eliminates certain exceptions and ~~recognizing credit losses on certain financial instruments based on an estimate of current expected credit losses~~clarifies and amends existing guidance to promote consistent application among reporting entities. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2019.~~2020, with early adoption permitted. Depending on the amendment, adoption may be applied on a retrospective, modified retrospective or prospective basis. We ~~will adopt this standard in the first quarter of 2020 and~~ are currently evaluating the impact of adopting this standard on our consolidated financial statements.

In January ~~2017,~~2020, the FASB issued ASU ~~2017-04, “Simplifying~~2020-01, “Clarifying the ~~Test for Goodwill Impairment.~~Interactions between Topic 321, Topic 323, and Topic 815.” The ~~standard simplifies~~new guidance clarifies the ~~subsequent measurement of goodwill by removing~~interactions between accounting standards that apply to equity investments without readily determinable fair values. Specifically, it addresses the ~~requirement to perform a hypothetical purchase price allocation to compute~~accounting for the implied fair value of goodwill to measure impairment. Instead, any goodwill impairment will equal the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Further, the guidance eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessmenttransition into and ~~if it fails that qualitative test, to perform Step 2~~out of the goodwill impairment test. This standard is effective for annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019, with early adoption permitted for impairment tests performed after January 1, 2017. While we continue to assess the timing of adopting this standard, we do not expect the adoption to have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” The standard modifies the current disclosure requirements on fair value measurements and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We will adopt this standard in the first quarter of 2020 and are currently evaluating the effect that adopting it will have on our disclosures.

In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The standard aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.equity method. This standard is effective on a prospective ~~or retrospective~~ basis for fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2019,~~2020, with early adoption permitted. We ~~will adopt this standard in the first quarter of 2020 and~~ are currently evaluating the effect ~~that~~of adopting ~~it will have~~this standard on our consolidated financial ~~statements.~~statements, but do not expect the adoption to have a material impact.

There have been no other new accounting pronouncements issued but not yet adopted that are expected to materially affect our consolidated financial condition or results of operations.

Special Note Regarding Forward-Looking Statements

This Quarterly Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We base these forward-looking statements on our expectations, estimates, forecasts, and projections about future events and about the industry in which we operate. Forward-looking statements are identified by words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “will,” “should,” “would,” “project,” “may,” variations of such words, and other similar expressions. In addition, any statements that refer to projections of financial items, anticipated growth, future growth and revenues, future economic conditions and performance, plans, objectives and strategies for future operations, expectations, or other characterizations of future events or circumstances are forward-looking statements. All forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Factors that could cause actual results to differ materially from those implied by the forward-looking statements in this Quarterly Report are set forth in our ~~2018~~2019 Annual Report and include but are not limited to:

•the effects of the COVID-19 pandemic on our business, financial condition and results of operations;

•the duration that hospitals and other healthcare entities decrease their utilization of temporary nurses and allied healthcare professionals, physicians, healthcare leaders and other healthcare professionals and workforce technology applications as a result of the suspension or restrictions placed on non-essential and elective healthcare as a result of the COVID-19 pandemic;

•the duration that individuals may continue to forgo non-essential and elective healthcare as “safer at home” restrictions and recommendations are reinstituted in parts of the country and lifted in others;

•the extent and duration that a significant spike in unemployment that has resulted from the COVID-19 pandemic will cause an increase in under- and uninsured patients and a corresponding reduction in overall healthcare utilization and demand for our services;

•the extent to which the COVID-19 pandemic may disrupt our operations due to the unavailability of our employees or healthcare professionals due to illness, risk of illness, quarantines, travel restrictions, desire to travel and work on temporary assignments or other factors that limit our existing or potential workforce and pool of candidates;

•the severity and duration of the impact the COVID-19 pandemic has on the financial condition and cash flow of many hospitals and healthcare systems such that it impairs their ability to make payments to us, timely or otherwise, for services rendered;

•the effects of economic downturns or slow recoveries, which could result in less demand for our services, pricing pressures and ~~pricing pressures;~~negatively impact payments terms and collectability of accounts receivable;

•any inability on our part to anticipate and quickly respond to changing marketplace conditions, such as alternative modes of healthcare delivery, reimbursement, or client needs;

•the negative effects that intermediary organizations may have on our ability to secure new and profitable ~~contracts with our clients;~~contracts;

•the level of consolidation and concentration of buyers of healthcare workforce, ~~solutions~~staffing and ~~staffing services,~~technology solutions, which could affect the pricing of our services and our ability to mitigate concentration risk;

•the ability of our clients to increase the efficiency and effectiveness of their staffing management and recruiting efforts, through predictive analytics, online recruiting, telemedicine or otherwise, which may negatively affect our revenue, results of operations, and cash flows;

•the repeal or significant erosion of the Patient Protection and Affordable Care Act without a corresponding replacement may negatively affect the demand for our services;

•any inability on our part to recruit and retain sufficient quality healthcare professionals at reasonable costs, which could increase our operating costs and negatively affect our business and profitability;

•any inability on our part to grow and operate our business profitably in compliance with federal and state ~~healthcare industry~~ regulation, including privacy laws, conduct of operations, costs and payment for services and payment for referrals as well as laws regarding employment and compensation practices and government contracting;

•any challenge to the classification of certain of our healthcare professionals as independent contractors, which could adversely affect our profitability;

•the effect of investigations, claims, and legal proceedings alleging medical malpractice, violations of employment, privacy and wage regulations and other legal theories of liability asserted against us, which could subject us to substantial liabilities;

•any technology disruptions or our inability to implement new infrastructure and technology systems effectively may adversely affect our operating results and ability to manage our business effectively;

•any failure to further develop and evolve our current workforce solutions technology offerings and capabilities, which may harm our business;

•disruption to or failures of our SaaS-based technology, or our inability to adequately protect our intellectual property rights with respect to such technology, sufficiently protect the privacy of personal information, which could reduce client satisfaction, harm our reputation and negatively affect our business;

•security breaches and cybersecurity incidents that could compromise our information and systems, which could adversely affect our business operations and reputation and could subject us to substantial liabilities;

any inability on our part to recruit and retain sufficient quality healthcare professionals at reasonable costs, which could increase our operating costs and negatively affect our business and profitability;

•our increasing dependence on third parties, including offshore vendors, for the execution of certain critical functions;

•the loss of our key officers and management personnel, which could adversely affect our business and operating results;

•any inability to consummate and effectively incorporate acquisitions into our business operations, which may adversely affect our long-term growth and our results of operations;

•businesses we acquire may have liabilities or adverse operating issues, which could harm our operating results;

•any increase to our business and operating risks as we develop new services and clients, enter new lines of business, and focus more of our business on providing a full range of client solutions;

•any inability on our part to maintain our positive brand awareness and identity, which may adversely affect our results of operation;

•the expansion of social media platforms presents new risks and challenges, which could cause damage to our brand reputation;

•any recognition of an impairment to the substantial amount of goodwill or indefinite-lived intangibles on our balance sheet;

•our indebtedness, which could adversely affect our ability to raise additional capital to fund operations, limit our ability to react to changes in the economy or our industry, and expose us to interest rate risk to the extent of any variable rate debt;

•the terms of our debt instruments that impose restrictions on us that may affect our ability to successfully operate our business; and

•the effect of significant adverse adjustments to our insurance-related accruals on our balance sheet, which could decrease our earnings or increase our losses and negatively impact our cash flows.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates, and commodity prices. During the three and six months ended June 30, ~~2019,~~2020, our primary exposure to market risk was interest rate risk associated with our variable interest debt instruments. A 100 basis point increase in interest rates on our variable rate debt would not have resulted in a material effect on our unaudited condensed consolidated financial statements for the three and six months ended June 30, ~~2019.~~2020. During the three and six months ended June 30, ~~2019,~~2020, we generated substantially all of our revenue in the United States. Accordingly, we believe that our foreign currency risk is immaterial.

Item 4. Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of June 30, ~~2019~~2020 were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, ~~2019~~2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

We ~~do not~~ believe that, ~~there have been any material changes~~in addition to the risk factors disclosed in Part I, Item 1A of our ~~2018~~2019 Annual Report, the following risks could materially adversely affect our business or our consolidated operating results, financial condition or cash flows, which, in turn, could cause the price of our common stock to decline. The risk factors described below and in our 2019 Annual Report are not the only risks we face. Factors we currently do not know, factors that we currently consider immaterial or factors that are not specific to us, such as general economic conditions, may also materially adversely affect our business or our consolidated operating results, financial condition or cash flows. The risk factors described below qualify all forward-looking statements we make, including forward-looking statements within the section entitled “Risk Factors” in Part I, Item 1A of our 2019 Annual Report.

The widespread outbreak of illness or other public health crisis could have an adverse effect on our business, financial condition and results of operations.

We could be negatively affected by the widespread outbreak of an illness or any other public health crisis. The COVID-19 pandemic has negatively impacted the global economy and created significant volatility and disruption of financial markets. Many state and local jurisdictions have imposed “shelter-in-place” orders, quarantines and restrictions on travel and mass gatherings to slow the spread of the virus and have required many “non-essential” businesses to close operations or shift to a remote working environment and restricted the delivery of non-emergency healthcare.

Demand for our staffing services and workforce technology solutions is sensitive to changes in economic activity. Demand for non-essential and elective healthcare has been negatively impacted by the COVID-19 pandemic. Many hospitals and other healthcare entities have significantly decreased their utilization of temporary healthcare professionals, interpreters, coders and permanent recruitment and placement services, which has resulted in decreased demand for many of our service offerings and utilization of our workforce technology platforms. We expect this decreased demand will have an adverse effect on our business, financial condition and results of operations. Many individuals may continue to forgo non-essential and elective healthcare even after “safer at home” restrictions and recommendations are lifted. We are unable to predict the duration and extent to which demand for our services will be negatively impacted by the COVID-19 pandemic.

In addition, the significant spike in unemployment that has resulted from the COVID-19 pandemic will likely cause an increase in under- and uninsured patients, which generally results in a reduction in overall healthcare utilization and a decrease in demand for our services. At this time, we are unable to predict the duration and extent to which our businesses will be negatively impacted by the increased unemployment and under- and uninsured rates resulting from the COVID-19 pandemic.

The COVID-19 pandemic, and any other outbreak of illness or other public health crises, may also disrupt our operations due to the unavailability of our corporate team members or healthcare professionals due to illness, risk of illness, quarantines, travel restrictions or other factors that limit our existing or potential workforce and pool of candidates. In addition, we may experience negative financial effects of the COVID-19 due to higher workers compensation and health insurance costs, for which we are largely self-insured. We may also be subject to claims regarding the health and safety of our healthcare professionals and our corporate team members.

Given the economic impact the COVID-19 pandemic has had on the financial condition of many hospitals and healthcare systems, many of our clients have begun to experience cash flow issues and difficulty gaining access to sufficient credit, which has, in some cases, impaired their ability to make payments to us, timely or otherwise, for services rendered and we have already experienced an increase to our allowance for credit losses for accounts receivable. We may also be subject to claims from these clients relating to the ability to provide services under terms and conditions that they believe are fair and reasonable.

The foregoing and other continued disruptions to our business as a result of COVID-19 could have an adverse effect on our business, financial condition and results of operations. The extent of the impact of COVID-19 on our operational and financial performance will depend on future developments, including the duration and spread of the COVID-19 outbreak, which is highly uncertain and cannot be predicted at this time.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

From time to time, we may repurchase our common stock in the open market pursuant to programs approved by our Board. We may repurchase our common stock for a variety of reasons, such as acquiring shares to offset dilution related to equity-based incentives and optimizing our capital structure. On November 1, 2016, our Board authorized us to repurchase up to $150.0 million of our outstanding common stock in the open market. Under the repurchase program announced on November 1, 2016 (the “Company Repurchase Program”), share purchases may be made from time to time beginning in the fourth quarter of 2016, depending on prevailing market conditions and other considerations. The Company Repurchase Program has no expiration date and may be discontinued or suspended at any time.

During the six months ended June 30, ~~2019,~~2020, we ~~purchased 395,212~~did not repurchase any shares of common ~~stock at an average price of $47.30 per share, resulting~~stock. We describe in ~~an aggregate purchase price of $18.7 million. The following table presents~~further detail our repurchase program and the ~~detail of~~ shares repurchased ~~during the six months ended June 30, 2019. All share repurchases reflected~~thereunder in ~~the table below were made under the Company Repurchase Program, which is the sole repurchase program~~Part II, Item 5, “Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of ~~the Company currently~~Equity Securities” set forth in ~~effect.~~our 2019 Annual Report on Form 10-K.

Purchased as Part of

Value of Shares (or Units)

Purchased Under the Program

Item 3. Defaults Upon Senior Securities

Item 4. Mine Safety Disclosures

Item 5. Other Information

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Delaware						06-1500476
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

~~Delaware~~8840 Cypress Waters Boulevard			~~06-1500476~~Suite 300
~~(State or Other Jurisdiction of~~ ~~Incorporation or Organization)~~ Dallas			~~(I.R.S. Employer~~ ~~Identification No.)~~ Texas		75019

~~12400 High Bluff Drive~~	~~Suite 100~~
~~San Diego~~	~~California~~	~~92130~~
(Address of Principal Executive Offices)				(Zip Code)



Title of Each Class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	AMN	New York Stock Exchange



	Fair Value Measurements as of June 30, 2019
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds	$	2,486		$	2,486	$	—	$	—
Commercial paper	65,311			—		65,311		—
Acquisition contingent consideration liabilities	(10,664		)	—		—		(10,664		)



	Operating Leases
Years ending December 31,
2019 (excluding the six months ended June 30, 2019)	$	9,011
2020	18,220
2021	18,374
2022	18,181
2023	17,887
Thereafter	50,319
Total lease payments	$	131,992
Less imputed interest	(21,569		)
Present value of lease liabilities	$	110,423




Period	Total Number of Shares (or Units) Purchased	Average Price Paid per Share (or Unit)	Total Number of Shares (or Units) Purchased as Part of Publicly Announced Program	Maximum Dollar Value of Shares (or Units) that May Yet Be Purchased Under the Program
February 1 - 28, 2019	22,900	$50.50	22,900	$48,405,129
March 1 - 31, 2019	355,417	$47.16	355,417	$31,631,647
April 1 - 30, 2019	16,895	$45.80	16,895	$30,857,280

Total	395,212	$47.30	395,212	$30,857,280



Exhibit Number		Description

~~2.1~~31.1		Stock Purchase Agreement, dated as of April 29, 2019, by and among AMN Healthcare, Inc., Advanced Medical Holdings, LLC, and Advanced Medical Personnel Services, Inc. (Incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K dated June 14, 2019, filed with the SEC on June 17, 2019).

~~4.1~~	First Amendment to Credit Agreement, dated as of June 14, 2019, by and among AMN Healthcare, Inc., as borrower, AMN Healthcare Services, Inc., AMN Services, LLC, O’Grady-Peyton International (USA), Inc., AMN Staffing Services, LLC, Merritt, Hawkins & Associates, LLC, AMN Healthcare Allied, Inc., Staff Care, Inc., AMN Allied Services, LLC, Nursefinders, LLC, Shiftwise, Inc., AMN Vision Services, LLC, Onward Healthcare, LLC, Locum Leaders, LLC, Medefis, Inc., Avantas, LLC, The First String Healthcare, Inc., MillicanSolutions, LLC, B. E. Smith, LLC, B. E. Smith Interim Services, LLC, HealthSource Global Staffing, Inc., Peak Provider Solutions, Inc., Peak Health Solutions, LLC, and Peak Government Services, LLC, Silversheet Inc., MedPartners HIM, LLC, Phillips, DiPisa & Associates, Inc., Leaders For Today, LLC, as guarantors, the lenders identified on the signature pages thereto, as lenders, and SunTrust Bank, as administrative agent.*

~~31.1~~	Certification by Susan R. Salka pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.*

31.2		Certification by Brian M. Scott pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.*

32.1		Certification by Susan R. Salka pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2		Certification by Brian M. Scott pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

101.INS		XBRL Instance Document.*

101.SCH		XBRL Taxonomy Extension Schema Document.*

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.*

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.*

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.*

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.*



/S/ BRIAN M. SCOTT
Brian M. Scott Chief Accounting Officer, Chief Financial Officer and Treasurer (Principal Accounting and Financial Officer)