Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Entity Registrant Name | SELECT MEDICAL HOLDINGS CORP | |
Trading Symbol | SEM | |
Entity Central Index Key | 0001320414 | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 135,416,312 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 147,815 | $ 175,178 |
Accounts receivable | 779,861 | 706,676 |
Prepaid income taxes | 7,709 | 20,539 |
Other current assets | 117,500 | 90,131 |
Total Current Assets | 1,052,885 | 992,524 |
Operating lease right-of-use assets | 982,616 | |
Property and equipment, net | 972,807 | 979,810 |
Goodwill | 3,323,749 | 3,320,726 |
Identifiable intangible assets, net | 426,428 | 437,693 |
Other assets | 263,007 | 233,512 |
Total Assets | 7,021,492 | 5,964,265 |
Current Liabilities: | ||
Overdrafts | 31,133 | 25,083 |
Current operating lease liabilities | 205,145 | |
Current portion of long-term debt and notes payable | 12,329 | 43,865 |
Accounts payable | 140,581 | 146,693 |
Accrued payroll | 142,289 | 172,386 |
Accrued vacation | 116,675 | 110,660 |
Accrued interest | 22,593 | 12,137 |
Accrued other | 205,535 | 190,691 |
Income taxes payable | 8,657 | 3,671 |
Total Current Liabilities | 884,937 | 705,186 |
Non-current operating lease liabilities | 820,007 | |
Long-term debt, net of current portion | 3,299,103 | 3,249,516 |
Non-current deferred tax liability | 153,863 | 153,895 |
Other non-current liabilities | 105,791 | 158,940 |
Total Liabilities | 5,263,701 | 4,267,537 |
Commitments and contingencies (Note 12) | ||
Redeemable non-controlling interests | 833,241 | 780,488 |
Stockholders’ Equity: | ||
Common stock | 135 | 135 |
Capital in excess of par | 488,303 | 482,556 |
Retained earnings (accumulated deficit) | 313,593 | 320,351 |
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 802,031 | 803,042 |
Non-controlling interests | 122,519 | 113,198 |
Total Equity | 924,550 | 916,240 |
Total Liabilities and Equity | 7,021,492 | 5,964,265 |
Select Medical Corporation | ||
Current Assets: | ||
Cash and cash equivalents | 147,815 | 175,178 |
Accounts receivable | 779,861 | 706,676 |
Prepaid income taxes | 7,709 | 20,539 |
Other current assets | 117,500 | 90,131 |
Total Current Assets | 1,052,885 | 992,524 |
Operating lease right-of-use assets | 982,616 | |
Property and equipment, net | 972,807 | 979,810 |
Goodwill | 3,323,749 | 3,320,726 |
Identifiable intangible assets, net | 426,428 | 437,693 |
Other assets | 263,007 | 233,512 |
Total Assets | 7,021,492 | 5,964,265 |
Current Liabilities: | ||
Overdrafts | 31,133 | 25,083 |
Current operating lease liabilities | 205,145 | |
Current portion of long-term debt and notes payable | 12,329 | 43,865 |
Accounts payable | 140,581 | 146,693 |
Accrued payroll | 142,289 | 172,386 |
Accrued vacation | 116,675 | 110,660 |
Accrued interest | 22,593 | 12,137 |
Accrued other | 205,535 | 190,691 |
Income taxes payable | 8,657 | 3,671 |
Total Current Liabilities | 884,937 | 705,186 |
Non-current operating lease liabilities | 820,007 | |
Long-term debt, net of current portion | 3,299,103 | 3,249,516 |
Non-current deferred tax liability | 153,863 | 153,895 |
Other non-current liabilities | 105,791 | 158,940 |
Total Liabilities | 5,263,701 | 4,267,537 |
Commitments and contingencies (Note 12) | ||
Redeemable non-controlling interests | 833,241 | 780,488 |
Stockholders’ Equity: | ||
Common stock | 0 | 0 |
Capital in excess of par | 975,903 | 970,156 |
Retained earnings (accumulated deficit) | (173,872) | (167,114) |
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 802,031 | 803,042 |
Non-controlling interests | 122,519 | 113,198 |
Total Equity | 924,550 | 916,240 |
Total Liabilities and Equity | $ 7,021,492 | $ 5,964,265 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, shares issued (in shares) | 135,262,866 | 135,265,864 |
Common stock, shares outstanding (in shares) | 135,262,866 | 135,265,864 |
Select Medical Corporation | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 100 | 100 |
Common stock, shares outstanding (in shares) | 100 | 100 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net operating revenues | $ 1,324,631 | $ 1,252,964 |
Costs and expenses: | ||
Cost of services, exclusive of depreciation and amortization | 1,132,092 | 1,065,813 |
General and administrative | 28,677 | 31,782 |
Depreciation and amortization | 52,138 | 46,771 |
Total costs and expenses | 1,212,907 | 1,144,366 |
Income from operations | 111,724 | 108,598 |
Other income and expense: | ||
Loss on early retirement of debt | 0 | (10,255) |
Equity in earnings of unconsolidated subsidiaries | 4,366 | 4,697 |
Non-operating gain | 6,532 | 399 |
Interest expense | (50,811) | (47,163) |
Income (loss) before income taxes | 71,811 | 56,276 |
Income tax expense | 18,467 | 12,294 |
Net income | 53,344 | 43,982 |
Less: Net income attributable to non-controlling interests | 12,510 | 10,243 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | $ 40,834 | $ 33,739 |
Earnings per common share (Note 11): | ||
Basic (in dollars per share) | $ 0.30 | $ 0.25 |
Diluted (in dollars per share) | $ 0.30 | $ 0.25 |
Select Medical Corporation | ||
Net operating revenues | $ 1,324,631 | $ 1,252,964 |
Costs and expenses: | ||
Cost of services, exclusive of depreciation and amortization | 1,132,092 | 1,065,813 |
General and administrative | 28,677 | 31,782 |
Depreciation and amortization | 52,138 | 46,771 |
Total costs and expenses | 1,212,907 | 1,144,366 |
Income from operations | 111,724 | 108,598 |
Other income and expense: | ||
Loss on early retirement of debt | 0 | (10,255) |
Equity in earnings of unconsolidated subsidiaries | 4,366 | 4,697 |
Non-operating gain | 6,532 | 399 |
Interest expense | (50,811) | (47,163) |
Income (loss) before income taxes | 71,811 | 56,276 |
Income tax expense | 18,467 | 12,294 |
Net income | 53,344 | 43,982 |
Less: Net income attributable to non-controlling interests | 12,510 | 10,243 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | $ 40,834 | $ 33,739 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Equity and Income (unaudited) - USD ($) $ in Thousands | Total | Select Medical Corporation | Common Stock | Common StockSelect Medical Corporation | Capital in Excess of Par | Capital in Excess of ParSelect Medical Corporation | Retained Earnings (Accumulated Deficit) | Retained Earnings (Accumulated Deficit)Select Medical Corporation | Total Stockholders’ Equity | Total Stockholders’ EquitySelect Medical Corporation | Non-controlling Interests | Non-controlling InterestsSelect Medical Corporation |
Balance (in shares) at Dec. 31, 2017 | 134,115,000 | 0 | ||||||||||
Balance at Dec. 31, 2017 | $ 932,604 | $ 932,604 | $ 134 | $ 0 | $ 463,499 | $ 947,370 | $ 359,735 | $ (124,002) | $ 823,368 | $ 823,368 | $ 109,236 | $ 109,236 |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | 33,739 | 33,739 | 33,739 | 33,739 | 33,739 | 33,739 | ||||||
Net income attributable to non-controlling interests | 4,500 | 4,500 | 4,500 | 4,500 | ||||||||
Issuance of restricted stock (in shares) | 4,000 | |||||||||||
Issuance of restricted stock | 0 | $ 0 | 0 | |||||||||
Forfeitures of unvested restricted stock (in shares) | (88,000) | |||||||||||
Forfeitures of unvested restricted stock | 0 | $ 0 | 0 | |||||||||
Vesting of restricted stock | 4,717 | 4,717 | 4,717 | |||||||||
Repurchase of common shares (in shares) | (7,000) | |||||||||||
Repurchase of common shares | (122) | $ 0 | (69) | (53) | (122) | |||||||
Exercise of stock options (in shares) | 80,000 | |||||||||||
Exercise of stock options | 738 | $ 0 | 738 | 738 | ||||||||
Additional investment by Holdings | 738 | 738 | 738 | |||||||||
Dividends declared and paid to Holdings | (122) | (122) | (122) | |||||||||
Contribution related to restricted stock award issuances by Holdings | 4,717 | 4,717 | 4,717 | |||||||||
Issuance and exchange of non-controlling interests | 74,341 | 74,341 | 74,341 | 74,341 | 74,341 | 74,341 | ||||||
Distributions to and purchases of non-controlling interests | (84,327) | (84,327) | (83,233) | (83,233) | (83,233) | (83,233) | (1,094) | (1,094) | ||||
Redemption adjustment on non-controlling interests | (1,051) | (1,051) | (1,051) | (1,051) | (1,051) | (1,051) | ||||||
Other | 138 | 138 | 103 | 103 | 103 | 103 | 35 | 35 | ||||
Balance (in shares) at Mar. 31, 2018 | 134,104,000 | 0 | ||||||||||
Balance at Mar. 31, 2018 | $ 965,277 | $ 965,277 | $ 134 | $ 0 | 468,885 | 952,825 | 383,581 | (100,225) | 852,600 | 852,600 | 112,677 | 112,677 |
Balance (in shares) at Dec. 31, 2018 | 135,265,864 | 100 | 135,266,000 | 0 | ||||||||
Balance at Dec. 31, 2018 | $ 916,240 | $ 916,240 | $ 135 | $ 0 | 482,556 | 970,156 | 320,351 | (167,114) | 803,042 | 803,042 | 113,198 | 113,198 |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | 40,834 | 40,834 | 40,834 | 40,834 | 40,834 | 40,834 | ||||||
Net income attributable to non-controlling interests | 4,810 | 4,810 | 4,810 | 4,810 | ||||||||
Issuance of restricted stock (in shares) | 21,000 | |||||||||||
Issuance of restricted stock | 0 | $ 0 | 0 | |||||||||
Forfeitures of unvested restricted stock (in shares) | (24,000) | |||||||||||
Forfeitures of unvested restricted stock | 0 | $ 0 | 0 | |||||||||
Vesting of restricted stock | 5,488 | 5,488 | 5,488 | |||||||||
Contribution related to restricted stock award issuances by Holdings | 5,488 | 5,488 | 5,488 | |||||||||
Issuance of non-controlling interests | 6,837 | 6,837 | 6,837 | 6,837 | ||||||||
Distributions to and purchases of non-controlling interests | (2,480) | (2,480) | 259 | 259 | 259 | 259 | (2,739) | (2,739) | ||||
Redemption adjustment on non-controlling interests | (47,470) | (47,470) | (47,470) | (47,470) | (47,470) | (47,470) | ||||||
Other | $ 291 | $ 291 | (122) | (122) | (122) | (122) | 413 | 413 | ||||
Balance (in shares) at Mar. 31, 2019 | 135,262,866 | 100 | 135,263,000 | 0 | ||||||||
Balance at Mar. 31, 2019 | $ 924,550 | $ 924,550 | $ 135 | $ 0 | $ 488,303 | $ 975,903 | $ 313,593 | $ (173,872) | $ 802,031 | $ 802,031 | $ 122,519 | $ 122,519 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities | ||
Net income | $ 53,344 | $ 43,982 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 7,872 | 1,364 |
Depreciation and amortization | 52,138 | 46,771 |
Provision for bad debts | 1,567 | 85 |
Equity in earnings of unconsolidated subsidiaries | (4,366) | (4,697) |
Loss on extinguishment of debt | 0 | 412 |
Gain on sale of assets and businesses | (6,233) | (513) |
Stock compensation expense | 6,255 | 4,927 |
Amortization of debt discount, premium and issuance costs | 3,231 | 3,136 |
Deferred income taxes | (81) | 78 |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | (74,752) | (45,811) |
Other current assets | (7,523) | (8,945) |
Other assets | 57,319 | 16,633 |
Accounts payable | 4,324 | (6,552) |
Accrued expenses | (69,163) | (11,981) |
Income taxes | 17,830 | 11,838 |
Net cash provided by operating activities | 41,762 | 50,727 |
Investing activities | ||
Business combinations, net of cash acquired | (6,120) | (515,359) |
Purchases of property and equipment | (49,073) | (39,617) |
Investment in businesses | (27,608) | (1,754) |
Proceeds from sale of assets and businesses | 2 | 691 |
Net cash used in investing activities | (82,799) | (556,039) |
Financing activities | ||
Borrowings on revolving facilities | 360,000 | 165,000 |
Payments on revolving facilities | (220,000) | (150,000) |
Proceeds from term loans | 0 | 779,904 |
Payments on term loans | (132,685) | (2,875) |
Revolving facility debt issuance costs | 0 | (1,333) |
Borrowings of other debt | 8,290 | 11,600 |
Principal payments on other debt | (6,155) | (5,909) |
Repurchase of common stock | 0 | (122) |
Dividends paid to Holdings | 0 | 0 |
Proceeds from exercise of stock options | 0 | 738 |
Equity investment by Holdings | 0 | 0 |
Increase (decrease) in overdrafts | 6,050 | (7,916) |
Proceeds from issuance of non-controlling interests | 3,425 | 0 |
Distributions to and purchases of non-controlling interests | (5,251) | (286,641) |
Net cash provided by (used in) financing activities | 13,674 | 502,446 |
Net increase (decrease) in cash and cash equivalents | (27,363) | (2,866) |
Cash and cash equivalents at beginning of period | 175,178 | 122,549 |
Cash and cash equivalents at end of period | 147,815 | 119,683 |
Supplemental Information | ||
Cash paid for interest | 37,199 | 35,233 |
Cash paid for taxes | 718 | 376 |
Non-cash equity exchange for acquisition of U.S. HealthWorks | 0 | 238,000 |
Select Medical Corporation | ||
Operating activities | ||
Net income | 53,344 | 43,982 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 7,872 | 1,364 |
Depreciation and amortization | 52,138 | 46,771 |
Provision for bad debts | 1,567 | 85 |
Equity in earnings of unconsolidated subsidiaries | (4,366) | (4,697) |
Loss on extinguishment of debt | 0 | 412 |
Gain on sale of assets and businesses | (6,233) | (513) |
Stock compensation expense | 6,255 | 4,927 |
Amortization of debt discount, premium and issuance costs | 3,231 | 3,136 |
Deferred income taxes | (81) | 78 |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | (74,752) | (45,811) |
Other current assets | (7,523) | (8,945) |
Other assets | 57,319 | 16,633 |
Accounts payable | 4,324 | (6,552) |
Accrued expenses | (69,163) | (11,981) |
Income taxes | 17,830 | 11,838 |
Net cash provided by operating activities | 41,762 | 50,727 |
Investing activities | ||
Business combinations, net of cash acquired | (6,120) | (515,359) |
Purchases of property and equipment | (49,073) | (39,617) |
Investment in businesses | (27,608) | (1,754) |
Proceeds from sale of assets and businesses | 2 | 691 |
Net cash used in investing activities | (82,799) | (556,039) |
Financing activities | ||
Borrowings on revolving facilities | 360,000 | 165,000 |
Payments on revolving facilities | (220,000) | (150,000) |
Proceeds from term loans | 0 | 779,904 |
Payments on term loans | (132,685) | (2,875) |
Revolving facility debt issuance costs | 0 | (1,333) |
Borrowings of other debt | 8,290 | 11,600 |
Principal payments on other debt | (6,155) | (5,909) |
Repurchase of common stock | 0 | 0 |
Dividends paid to Holdings | 0 | (122) |
Proceeds from exercise of stock options | 0 | 0 |
Equity investment by Holdings | 0 | 738 |
Increase (decrease) in overdrafts | 6,050 | (7,916) |
Proceeds from issuance of non-controlling interests | 3,425 | 0 |
Distributions to and purchases of non-controlling interests | (5,251) | (286,641) |
Net cash provided by (used in) financing activities | 13,674 | 502,446 |
Net increase (decrease) in cash and cash equivalents | (27,363) | (2,866) |
Cash and cash equivalents at beginning of period | 175,178 | 122,549 |
Cash and cash equivalents at end of period | 147,815 | 119,683 |
Supplemental Information | ||
Cash paid for interest | 37,199 | 35,233 |
Cash paid for taxes | 718 | 376 |
Non-cash equity exchange for acquisition of U.S. HealthWorks | $ 0 | $ 238,000 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements of Select Medical Holdings Corporation (“Holdings”) include the accounts of its wholly owned subsidiary, Select Medical Corporation (“Select”). Holdings conducts substantially all of its business through Select and its subsidiaries. Holdings and Select and its subsidiaries are collectively referred to as the “Company.” The unaudited condensed consolidated financial statements of the Company as of March 31, 2019 , and for the three month periods ended March 31, 2018 and 2019 , have been prepared pursuant to the rules and regulations of the Securities Exchange Commission (the “SEC”) for interim reporting and accounting principles generally accepted in the United States of America (“GAAP”). Accordingly, certain information and disclosures required by GAAP, which are normally included in the notes to consolidated financial statements, have been condensed or omitted pursuant to those rules and regulations, although the Company believes the disclosure is adequate to make the information presented not misleading. In the opinion of management, such information contains all adjustments, which are normal and recurring in nature, necessary for a fair statement of the financial position, results of operations and cash flow for such periods. All significant intercompany transactions and balances have been eliminated. The results of operations for the three months ended March 31, 2019 , are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2019 . These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2018 |
Accounting Policies
Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingencies, at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Credit Risk Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash balances and trade receivables. The Company’s excess cash is held with large financial institutions. The Company grants unsecured credit to its patients, most of whom reside in the service area of the Company’s facilities and are insured under third-party payor agreements. The Company’s general policy is to verify insurance coverage prior to the date of admission for patients admitted to the Company’s critical illness recovery hospitals and rehabilitation hospitals. Within the Company’s outpatient rehabilitation clinics, the Company verifies insurance coverage prior to the patient’s visit. Within the Company’s Concentra centers, the Company verifies insurance coverage or receives authorization from the patient’s employer prior to the patient’s visit. Because of the geographic diversity of the Company’s facilities and non-governmental third-party payors, Medicare represents the Company’s only significant concentration of credit risk. Approximately 16% and 18% of the Company’s accounts receivable are from Medicare at December 31, 2018 , and March 31, 2019 , respectively. Leases The Company evaluates whether a contract is or contains a lease at the inception of the contract. Upon lease commencement, the date on which a lessor makes the underlying asset available to the Company for use, the Company classifies the lease as either an operating or finance lease. Most of the Company’s facility and equipment leases are classified as operating leases. Balance Sheet For both operating and finance leases, the Company recognizes a right-of-use asset and lease liability at lease commencement. A right-of-use asset represents the Company’s right to use an underlying asset for the lease term while the lease liability represents an obligation to make lease payments arising from a lease which are measured on a discounted basis. The Company elected the short-term lease exemption for its equipment leases; accordingly, equipment leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Lease liabilities are measured at the present value of the remaining, fixed lease payments at lease commencement. The Company primarily uses its incremental borrowing rate, based on the information available at lease commencement, in determining the present value of its remaining lease payments. The Company’s leases may also specify extension or termination clauses. These options are factored into the measurement of the lease liability when it is reasonably certain that the Company will exercise the option. Right-of-use assets are measured at an amount equal to the initial lease liability, plus any prepaid lease payments (less any incentives received, such as reimbursement for leasehold improvements) and initial direct costs, at the lease commencement date. The Company has elected to account for lease and non-lease components, such as common area maintenance, as a single lease component for its facility leases. As a result, the fixed payments that would otherwise be allocated to the non-lease components will be accounted for as lease payments and are included in the measurement of the Company’s right-of-use asset and lease liability. Statement of Operations For the Company’s operating leases, rent expense, a component of cost of services and general and administrative expenses on the consolidated statements of operations, is recognized on a straight-line basis over the lease term. The straight-line rent expense is reflective of the interest expense on the lease liability using the effective interest method and the amortization of the right-of-use asset. For the Company’s finance leases, interest expense on the lease liability is recognized using the effective interest method. Amortization expense related to the right-of-use asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. The Company elected the short-term lease exemption for its equipment leases. For these leases, the Company recognizes lease payments on a straight-line basis over the lease term and variable lease payments are expensed as incurred. These expenses are included as components of cost of services on the consolidated statements of operations. The Company makes payments related to changes in indexes or rates after the lease commencement date. Additionally, the Company makes payments, which are not fixed at lease commencement, for property taxes, insurance, and common area maintenance related to its facility leases. These variable lease payments, which are expensed as incurred, are included as a component of cost of services and general and administrative expenses on the consolidated statements of operations. Redeemable Non-Controlling Interests The ownership interests held by outside parties in subsidiaries, limited liability companies, and limited partnerships controlled by the Company are classified as non-controlling interests. Some of the Company’s non-controlling ownership interests consist of outside parties that have certain redemption rights that, if exercised, require the Company to purchase the parties’ ownership interests. These interests are classified and reported as redeemable non-controlling interests and have been adjusted to their approximate redemption values after the attribution of net income or loss. The changes in redeemable non-controlling interests, which are the same for Holdings and Select, are as follows (in thousands): Balance as of December 31, 2017 $ 640,818 Net income attributable to redeemable non-controlling interests 5,743 Issuance and exchange of redeemable non-controlling interests 163,659 Distributions to redeemable non-controlling interests (203,972 ) Redemption adjustment on redeemable non-controlling interests 1,051 Other 175 Balance as of March 31, 2018 $ 607,474 Balance as of December 31, 2018 $ 780,488 Net income attributable to redeemable non-controlling interests 7,700 Distributions to and purchases of redeemable non-controlling interests (2,771 ) Redemption adjustment on redeemable non-controlling interests 47,470 Other 354 Balance as of March 31, 2019 $ 833,241 Recent Accounting Pronouncements Financial Instruments In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments . The current standard delays the recognition of a credit loss on a financial asset until the loss is probable of occurring. The new standard removes the requirement that a credit loss be probable of occurring for it to be recognized and requires entities to use historical experience, current conditions, and reasonable and supportable forecasts to estimate their future expected credit losses. The Company’s accounts receivable derived from contracts with customers will be subject to ASU 2016-13. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance must be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the earliest comparative period in the financial statements. Given the very high rate of collectability of the Company’s accounts receivable derived from contracts with customers, the Company believes that the impact of ASU 2016-13 is unlikely to be material. Recently Adopted Accounting Pronouncements Leases The Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases using a modified retrospective approach as of January 1, 2019, for leases which existed on that date. Prior comparative periods were not adjusted and continue to be reported in accordance with ASC Topic 840, Leases . The Company elected the package of practical expedients, which permitted the Company not to reassess under ASC Topic 842 the Company’s prior conclusions about lease identification, lease classification, and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to the Company. The adoption of the standard resulted in the recognition of operating lease right-of-use assets of $1,015.0 million and operating lease liabilities of $1,057.0 million |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions U.S. HealthWorks Acquisition On February 1, 2018, Concentra Inc. (“Concentra”) acquired all of the issued and outstanding shares of stock of U.S. HealthWorks, Inc. (“U.S. HealthWorks”), an occupational medicine and urgent care service provider, from Dignity Health Holding Corporation (“DHHC”). Concentra acquired U.S. HealthWorks for $753.6 million . DHHC, a subsidiary of Dignity Health, was issued a 20.0% equity interest in Concentra Group Holdings Parent, LLC (“Concentra Group Holdings Parent”) which was valued at $238.0 million . The remainder of the purchase price was paid in cash. Select retained a majority voting interest in Concentra Group Holdings Parent following the closing of the transaction. For the U.S. HealthWorks acquisition, the Company allocated the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values in accordance with the provisions of ASC Topic 805, Business Combinations . During the year ended December 31, 2018, the Company finalized the purchase accounting related to this acquisition. The following table reconciles the fair values of identifiable net assets and goodwill to the consideration given for the acquired business (in thousands): Accounts receivable $ 68,934 Other current assets 10,810 Property and equipment 69,712 Identifiable intangible assets 140,406 Other assets 25,435 Goodwill 540,067 Total assets 855,364 Accounts payable and other current liabilities 49,925 Deferred income taxes and other long-term liabilities 51,851 Total liabilities 101,776 Consideration given $ 753,588 For the period February 1, 2018 through March 31, 2018 , U.S. HealthWorks contributed net operating revenues of $89.9 million which is reflected in the Company’s consolidated statement of operations for the three months ended March 31, 2018 . Due to the integrated nature of the Company’s operations, the Company believes that it is not practicable to separately identify earnings of U.S. HealthWorks on a stand-alone basis. Pro Forma Results The following pro forma unaudited results of operations have been prepared assuming the acquisition of U.S. HealthWorks occurred on January 1, 2017. These results are not necessarily indicative of the results of future operations nor of the results that would have occurred had the acquisition been consummated on the aforementioned date. For the three months ended March 31, 2019 , the Company’s results of operations include U.S. HealthWorks for the entire period and no pro forma adjustments were made. Three Months Ended March 31, 2018 (in thousands) Net operating revenues $ 1,300,544 Net income attributable to the Company 34,538 The Company’s pro forma results were adjusted to recognize U.S. HealthWorks acquisition costs as of January 1, 2017. Accordingly, for the three months ended March 31, 2018, pro forma results were adjusted to exclude $2.9 million |
Sale of Businesses
Sale of Businesses | 3 Months Ended |
Mar. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of Businesses | Sale of Businesses The Company recognized a non-operating gain of $6.5 million during the three months ended March 31, 2019 , which resulted from the sale of 22 |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities Concentra does not own many of its medical practices, as certain states prohibit the “corporate practice of medicine,” which restricts business corporations from practicing medicine through the direct employment of physicians or from exercising control over medical decisions by physicians. In states which prohibit the corporate practice of medicine, Concentra typically enters into long-term management agreements with professional corporations or associations that are owned by licensed physicians, which, in turn, employ or contract with physicians who provide professional medical services in its occupational health centers. The management agreements have terms that provide for Concentra to conduct, supervise, and manage the day-to-day non-medical operations of the occupational health centers and provide all management and administrative services. Concentra receives a management fee for these services, which is based, in part, on the performance of the professional corporation or association. Additionally, the outstanding voting equity interests of the professional corporations or associations are typically owned by licensed physicians appointed at Concentra’s discretion. Concentra has the ability to direct the transfer of ownership of the professional corporation or association to a new licensed physician at any time. Based on the provisions of these agreements, Concentra has the ability to direct the activities which most significantly impact the performance of these professional corporations and associations and has an obligation to absorb losses or receive benefits which could potentially be significant to the professional corporations and associations. Accordingly, the professional corporations and associations are variable interest entities for which Concentra is the primary beneficiary. The total assets of Concentra’s variable interest entities, which are comprised principally of accounts receivable, were $166.2 million and $177.6 million at December 31, 2018 , and March 31, 2019 , respectively. The total liabilities of Concentra’s variable interest entities, which are comprised principally of accounts payable, accrued expenses, and obligations payable for services received under the aforementioned management agreements, were $164.4 million and $175.8 million at December 31, 2018 , and March 31, 2019 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company has operating and finance leases for its facilities and certain equipment. The Company leases its corporate office space from related parties. The Company’s critical illness recovery hospitals and rehabilitation hospitals generally have lease terms of 10 years with two , five year renewal options. These renewal options vary for hospitals which operate as a hospital within a hospital, or “HIH.” The Company’s outpatient rehabilitation clinics generally have lease terms of five years with two , three to five year renewal options. The Company’s Concentra centers generally have lease terms of 10 years with two , five year renewal options. For the three months ended March 31, 2019 , the Company’s total lease cost was as follows (in thousands): Unrelated Parties Related Parties Total Operating lease cost $ 66,836 $ 1,342 $ 68,178 Finance lease cost: Amortization of right-of-use assets 36 — 36 Interest on lease liabilities 97 — 97 Short-term lease cost 592 — 592 Variable lease cost 11,836 156 11,992 Sublease income (2,488 ) — (2,488 ) Total lease cost $ 76,909 $ 1,498 $ 78,407 For the three months ended March 31, 2019 , supplemental cash flow information related to leases was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 68,352 Operating cash flows for finance leases 97 Financing cash flows for finance leases 85 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (1) $ 1,080,992 _______________________________________________________________________________ (1) Includes the right-of-use assets obtained in exchange for lease liabilities of $1,057.0 million which were recognized upon adoption of ASC Topic 842 at January 1, 2019. As of March 31, 2019 , supplemental balance sheet information related to leases was as follows (in thousands): Operating Leases Unrelated Parties Related Parties Total Operating lease right-of-use assets $ 962,186 $ 20,430 $ 982,616 Current operating lease liabilities $ 200,420 $ 4,725 $ 205,145 Non-current operating lease liabilities 801,094 18,913 820,007 Total operating lease liabilities $ 1,001,514 $ 23,638 $ 1,025,152 Finance Leases Unrelated Parties Related Parties Total Property and equipment, gross $ 2,813 $ — $ 2,813 Accumulated depreciation (36 ) — (36 ) Property and equipment, net $ 2,777 $ — $ 2,777 Current portion of long-term debt and notes payable $ 167 $ — $ 167 Long-term debt, net of current portion 4,214 — 4,214 Total finance lease liabilities $ 4,381 $ — $ 4,381 As of March 31, 2019 , the weighted average remaining lease terms and discount rates was as follows: Weighted average remaining lease term (in years): Operating leases 8.1 Finance leases 13.7 Weighted average discount rate: Operating leases 5.9 % Finance leases 9.0 % As of March 31, 2019 , maturities of lease liabilities were approximately as follows (in thousands): Operating Leases Finance Leases Total 2019 $ 196,381 $ 431 $ 196,812 2020 230,500 526 231,026 2021 192,525 537 193,062 2022 151,581 548 152,129 2023 111,167 558 111,725 Thereafter 501,279 5,075 506,354 Total undiscounted cash flows 1,383,433 7,675 1,391,108 Less: Imputed interest 358,281 3,294 361,575 Total discounted lease liabilities $ 1,025,152 $ 4,381 $ 1,029,533 In accordance with ASC Topic 840, Leases , and as disclosed in the Company’s 2018 Annual Report on Form 10-K, the Company’s future minimum lease obligations on long-term, non-cancelable operating leases with related and unrelated parties as of December 31, 2018 , were approximately as follows (in thousands): Total 2019 $ 267,846 2020 231,711 2021 193,155 2022 150,155 2023 107,759 Thereafter 484,038 $ 1,434,664 |
Leases | Leases The Company has operating and finance leases for its facilities and certain equipment. The Company leases its corporate office space from related parties. The Company’s critical illness recovery hospitals and rehabilitation hospitals generally have lease terms of 10 years with two , five year renewal options. These renewal options vary for hospitals which operate as a hospital within a hospital, or “HIH.” The Company’s outpatient rehabilitation clinics generally have lease terms of five years with two , three to five year renewal options. The Company’s Concentra centers generally have lease terms of 10 years with two , five year renewal options. For the three months ended March 31, 2019 , the Company’s total lease cost was as follows (in thousands): Unrelated Parties Related Parties Total Operating lease cost $ 66,836 $ 1,342 $ 68,178 Finance lease cost: Amortization of right-of-use assets 36 — 36 Interest on lease liabilities 97 — 97 Short-term lease cost 592 — 592 Variable lease cost 11,836 156 11,992 Sublease income (2,488 ) — (2,488 ) Total lease cost $ 76,909 $ 1,498 $ 78,407 For the three months ended March 31, 2019 , supplemental cash flow information related to leases was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 68,352 Operating cash flows for finance leases 97 Financing cash flows for finance leases 85 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (1) $ 1,080,992 _______________________________________________________________________________ (1) Includes the right-of-use assets obtained in exchange for lease liabilities of $1,057.0 million which were recognized upon adoption of ASC Topic 842 at January 1, 2019. As of March 31, 2019 , supplemental balance sheet information related to leases was as follows (in thousands): Operating Leases Unrelated Parties Related Parties Total Operating lease right-of-use assets $ 962,186 $ 20,430 $ 982,616 Current operating lease liabilities $ 200,420 $ 4,725 $ 205,145 Non-current operating lease liabilities 801,094 18,913 820,007 Total operating lease liabilities $ 1,001,514 $ 23,638 $ 1,025,152 Finance Leases Unrelated Parties Related Parties Total Property and equipment, gross $ 2,813 $ — $ 2,813 Accumulated depreciation (36 ) — (36 ) Property and equipment, net $ 2,777 $ — $ 2,777 Current portion of long-term debt and notes payable $ 167 $ — $ 167 Long-term debt, net of current portion 4,214 — 4,214 Total finance lease liabilities $ 4,381 $ — $ 4,381 As of March 31, 2019 , the weighted average remaining lease terms and discount rates was as follows: Weighted average remaining lease term (in years): Operating leases 8.1 Finance leases 13.7 Weighted average discount rate: Operating leases 5.9 % Finance leases 9.0 % As of March 31, 2019 , maturities of lease liabilities were approximately as follows (in thousands): Operating Leases Finance Leases Total 2019 $ 196,381 $ 431 $ 196,812 2020 230,500 526 231,026 2021 192,525 537 193,062 2022 151,581 548 152,129 2023 111,167 558 111,725 Thereafter 501,279 5,075 506,354 Total undiscounted cash flows 1,383,433 7,675 1,391,108 Less: Imputed interest 358,281 3,294 361,575 Total discounted lease liabilities $ 1,025,152 $ 4,381 $ 1,029,533 In accordance with ASC Topic 840, Leases , and as disclosed in the Company’s 2018 Annual Report on Form 10-K, the Company’s future minimum lease obligations on long-term, non-cancelable operating leases with related and unrelated parties as of December 31, 2018 , were approximately as follows (in thousands): Total 2019 $ 267,846 2020 231,711 2021 193,155 2022 150,155 2023 107,759 Thereafter 484,038 $ 1,434,664 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Goodwill The following table shows changes in the carrying amounts of goodwill by reporting unit for the three months ended March 31, 2019 : Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Total (in thousands) Balance as of December 31, 2018 $ 1,045,220 $ 416,646 $ 642,422 $ 1,216,438 $ 3,320,726 Acquired — 6,964 746 937 8,647 Sold — — (5,624 ) — (5,624 ) Balance as of March 31, 2019 $ 1,045,220 $ 423,610 $ 637,544 $ 1,217,375 $ 3,323,749 Identifiable Intangible Assets The following table provides the gross carrying amounts, accumulated amortization, and net carrying amounts for the Company’s identifiable intangible assets: December 31, 2018 March 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in thousands) Indefinite-lived intangible assets: Trademarks $ 166,698 $ — $ 166,698 $ 166,698 $ — $ 166,698 Certificates of need 19,174 — 19,174 19,221 — 19,221 Accreditations 1,857 — 1,857 1,857 — 1,857 Finite-lived intangible assets: Trademarks 5,000 (4,583 ) 417 5,000 (5,000 ) — Customer relationships 280,710 (61,900 ) 218,810 283,090 (68,150 ) 214,940 Favorable leasehold interests (1) 13,553 (6,064 ) 7,489 — — — Non-compete agreements 29,400 (6,152 ) 23,248 30,483 (6,771 ) 23,712 Total identifiable intangible assets $ 516,392 $ (78,699 ) $ 437,693 $ 506,349 $ (79,921 ) $ 426,428 _______________________________________________________________________________ (1) Favorable leasehold interests are a component of the operating lease right-of-use assets upon adoption of ASC Topic 842, Leases . The Company’s accreditations and indefinite-lived trademarks have renewal terms and the costs to renew these intangible assets are expensed as incurred. At March 31, 2019 , the accreditations and indefinite-lived trademarks have a weighted average time until next renewal of 1.5 years and 7.9 years , respectively. The Company’s finite-lived intangible assets amortize over their estimated useful lives. Amortization expense was $6.4 million and $7.1 million for the three months ended March 31, 2018 and 2019 |
Long-Term Debt and Notes Payabl
Long-Term Debt and Notes Payable | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Notes Payable | Long-Term Debt and Notes Payable For purposes of this indebtedness footnote, references to Select exclude Concentra because the Concentra credit facilities are non-recourse to Holdings and Select. As of March 31, 2019 , the Company’s long-term debt and notes payable were as follows (in thousands): Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value Select: 6.375% senior notes $ 710,000 $ 493 $ (4,162 ) $ 706,331 $ 711,775 Credit facilities: Revolving facility 160,000 — — 160,000 147,200 Term loan 1,031,068 (9,267 ) (8,827 ) 1,012,974 1,024,624 Other 64,808 — (464 ) 64,344 64,344 Total Select debt 1,965,876 (8,774 ) (13,453 ) 1,943,649 1,947,943 Concentra: Credit facilities: Term loans 1,380,297 (2,555 ) (16,877 ) 1,360,865 1,373,545 Other debt, including finance leases 6,918 — — 6,918 6,918 Total Concentra debt 1,387,215 (2,555 ) (16,877 ) 1,367,783 1,380,463 Total debt $ 3,353,091 $ (11,329 ) $ (30,330 ) $ 3,311,432 $ 3,328,406 Principal maturities of the Company’s long-term debt and notes payable were approximately as follows (in thousands): 2019 2020 2021 2022 2023 Thereafter Total Select: 6.375% senior notes $ — $ — $ 710,000 $ — $ — $ — $ 710,000 Credit facilities: Revolving facility — — — 160,000 — — 160,000 Term loan — — — — — 1,031,068 1,031,068 Other 9,262 27,211 1,781 — — 26,554 64,808 Total Select debt 9,262 27,211 711,781 160,000 — 1,057,622 1,965,876 Concentra: Credit facilities: Term loans — — — 1,140,298 239,999 — 1,380,297 Other debt, including finance leases 1,644 754 330 358 363 3,469 6,918 Total Concentra debt 1,644 754 330 1,140,656 240,362 3,469 1,387,215 Total debt $ 10,906 $ 27,965 $ 712,111 $ 1,300,656 $ 240,362 $ 1,061,091 $ 3,353,091 As of December 31, 2018 , the Company’s long-term debt and notes payable were as follows (in thousands): Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value Select: 6.375% senior notes $ 710,000 $ 550 $ (4,642 ) $ 705,908 $ 706,450 Credit facilities: Revolving facility 20,000 — — 20,000 18,400 Term loan 1,129,875 (9,690 ) (9,321 ) 1,110,864 1,076,206 Other 56,415 — (484 ) 55,931 55,931 Total Select debt 1,916,290 (9,140 ) (14,447 ) 1,892,703 1,856,987 Concentra: Credit facilities: Term loans 1,414,175 (2,765 ) (18,648 ) 1,392,762 1,357,802 Other debt, including finance leases 7,916 — — 7,916 7,916 Total Concentra debt 1,422,091 (2,765 ) (18,648 ) 1,400,678 1,365,718 Total debt $ 3,338,381 $ (11,905 ) $ (33,095 ) $ 3,293,381 $ 3,222,705 Excess Cash Flow Payment During the three months ended March 31, 2019 , Select made a principal prepayment of approximately $98.8 million associated with its term loans in accordance with the provision in the Select credit facilities that requires mandatory prepayments of term loans as a result of annual excess cash flow, as defined in the Select credit facilities. The principal prepayment was applied against future payments sequentially; as a result, no further loan amortization payments will be required on the Select term loan until maturity on March 6, 2025. During the three months ended March 31, 2019 , Concentra made a principal prepayment of approximately $33.9 million associated with its term loans in accordance with the provision in the Concentra credit facilities that requires mandatory prepayments of term loans as a result of annual excess cash flow, as defined in the Concentra credit facilities. The principal prepayment was applied against future payments sequentially; as a result, no further loan amortization payments will be required on the terms loans outstanding under the Concentra first lien credit agreement until maturity on June 1, 2022. Fair Value The Company considers the inputs in the valuation process to be Level 2 in the fair value hierarchy for Select’s 6.375% senior notes and for its credit facilities. Level 2 in the fair value hierarchy is defined as inputs that are observable for the asset or liability, either directly or indirectly, which includes quoted prices for identical assets or liabilities in markets that are not active. The fair values of the Select credit facilities and the Concentra credit facilities were based on quoted market prices for this debt in the syndicated loan market. The fair value of Select’s 6.375% |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company’s reportable segments include the critical illness recovery hospital segment, rehabilitation hospital segment, outpatient rehabilitation segment, and Concentra segment. Other activities include the Company’s corporate shared services and certain other non-consolidating joint ventures and minority investments in other healthcare related businesses. The Company evaluates performance of the segments based on Adjusted EBITDA. Adjusted EBITDA is defined as earnings excluding interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, acquisition costs associated with U.S. HealthWorks, non-operating gain (loss), and equity in earnings (losses) of unconsolidated subsidiaries. The Company has provided additional information regarding its reportable segments, such as total assets, which contributes to the understanding of the Company and provides useful information to the users of the consolidated financial statements. The following tables summarize selected financial data for the Company’s reportable segments. The segment results of Holdings are identical to those of Select. Three Months Ended March 31, 2018 2019 (in thousands) Net operating revenues: Critical illness recovery hospital $ 464,676 $ 462,159 Rehabilitation hospital 174,774 188,954 Outpatient rehabilitation 257,381 277,197 Concentra 356,116 396,321 Other 17 — Total Company $ 1,252,964 $ 1,324,631 Adjusted EBITDA: Critical illness recovery hospital $ 72,972 $ 72,998 Rehabilitation hospital 26,776 25,797 Outpatient rehabilitation 30,525 28,991 Concentra 57,797 66,258 Other (24,838 ) (23,927 ) Total Company $ 163,232 $ 170,117 Total assets: Critical illness recovery hospital $ 1,862,791 $ 2,062,659 Rehabilitation hospital 877,750 1,089,391 Outpatient rehabilitation 973,122 1,250,015 Concentra 2,143,405 2,464,317 Other 111,575 155,110 Total Company $ 5,968,643 $ 7,021,492 Purchases of property and equipment, net: Critical illness recovery hospital $ 10,472 $ 10,160 Rehabilitation hospital 12,917 13,183 Outpatient rehabilitation 7,338 9,040 Concentra 6,621 15,698 Other 2,269 992 Total Company $ 39,617 $ 49,073 A reconciliation of Adjusted EBITDA to income before income taxes is as follows: Three Months Ended March 31, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 72,972 $ 26,776 $ 30,525 $ 57,797 $ (24,838 ) Depreciation and amortization (11,058 ) (5,722 ) (6,637 ) (21,147 ) (2,207 ) Stock compensation expense — — — (211 ) (4,716 ) U.S. HealthWorks acquisition costs — — — (2,936 ) — Income (loss) from operations $ 61,914 $ 21,054 $ 23,888 $ 33,503 $ (31,761 ) $ 108,598 Loss on early retirement of debt (10,255 ) Equity in earnings of unconsolidated subsidiaries 4,697 Non-operating gain 399 Interest expense (47,163 ) Income before income taxes $ 56,276 Three Months Ended March 31, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 72,998 $ 25,797 $ 28,991 $ 66,258 $ (23,927 ) Depreciation and amortization (11,451 ) (6,402 ) (7,032 ) (24,904 ) (2,349 ) Stock compensation expense — — — (767 ) (5,488 ) Income (loss) from operations $ 61,547 $ 19,395 $ 21,959 $ 40,587 $ (31,764 ) $ 111,724 Equity in earnings of unconsolidated subsidiaries 4,366 Non-operating gain 6,532 Interest expense (50,811 ) Income before income taxes $ 71,811 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Net operating revenues consist primarily of patient service revenues generated from services provided to patients and other revenues for services provided to healthcare institutions under contractual arrangements. The following tables disaggregate the Company’s net operating revenues for the three months ended March 31, 2018 and 2019 : Three Months Ended March 31, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra (in thousands) Patient service revenues: Medicare $ 240,992 $ 72,841 $ 38,190 $ 628 Non-Medicare 220,006 61,902 188,900 353,252 Total patient services revenues 460,998 134,743 227,090 353,880 Other revenues 3,678 40,031 30,291 2,236 Total net operating revenues $ 464,676 $ 174,774 $ 257,381 $ 356,116 Three Months Ended March 31, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra (in thousands) Patient service revenues: Medicare $ 238,169 $ 74,579 $ 40,278 $ 555 Non-Medicare 216,959 70,642 187,914 393,236 Total patient services revenues 455,128 145,221 228,192 393,791 Other revenues 7,031 43,733 49,005 2,530 Total net operating revenues $ 462,159 $ 188,954 $ 277,197 $ 396,321 |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The Company’s capital structure includes common stock and unvested restricted stock awards. To compute earnings per share (“EPS”), the Company applies the two-class method because the Company’s unvested restricted stock awards are participating securities which are entitled to participate equally with the Company’s common stock in undistributed earnings. Application of the Company’s two-class method is as follows: (i) Net income attributable to the Company is reduced by the amount of dividends declared and by the contractual amount of dividends that must be paid for the current period for each class of stock. There were no dividends declared or contractual dividends paid for the three months ended March 31, 2018 and 2019 . (ii) The remaining undistributed net income of the Company is then equally allocated to its common stock and unvested restricted stock awards, as if all of the earnings for the period had been distributed. The total net income allocated to each security is determined by adding both distributed and undistributed net income for the period. (i) The net income allocated to each security is then divided by the weighted average number of outstanding shares for the period to determine the EPS for each security considered in the two-class method. The following table sets forth the net income attributable to the Company, its common shares outstanding, and its participating securities outstanding. Basic EPS Diluted EPS Three Months Ended March 31, Three Months Ended March 31, 2018 2019 2018 2019 (in thousands) Net income $ 43,982 $ 53,344 $ 43,982 $ 53,344 Less: net income attributable to non-controlling interests 10,243 12,510 10,243 12,510 Net income attributable to the Company 33,739 40,834 33,739 40,834 Less: net income attributable to participating securities 1,111 1,343 1,110 1,343 Net income attributable to common shares $ 32,628 $ 39,491 $ 32,629 $ 39,491 The following tables set forth the computation of EPS under the two-class method: Three Months Ended March 31, 2019 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 39,491 130,821 $ 0.30 $ 39,491 130,861 $ 0.30 Participating securities 1,343 4,449 $ 0.30 1,343 4,449 $ 0.30 Total Company $ 40,834 $ 40,834 Three Months Ended March 31, 2018 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 32,628 129,691 $ 0.25 $ 32,629 129,816 $ 0.25 Participating securities 1,111 4,416 $ 0.25 1,110 4,416 $ 0.25 Total Company $ 33,739 $ 33,739 _______________________________________________________________________________ |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation The Company is a party to various legal actions, proceedings, and claims (some of which are not insured), and regulatory and other governmental audits and investigations in the ordinary course of its business. The Company cannot predict the ultimate outcome of pending litigation, proceedings, and regulatory and other governmental audits and investigations. These matters could potentially subject the Company to sanctions, damages, recoupments, fines, and other penalties. The Department of Justice, Centers for Medicare & Medicaid Services (“CMS”), or other federal and state enforcement and regulatory agencies may conduct additional investigations related to the Company’s businesses in the future that may, either individually or in the aggregate, have a material adverse effect on the Company’s business, financial position, results of operations, and liquidity. To address claims arising out of the Company’s operations, the Company maintains professional malpractice liability insurance and general liability insurance coverages through a number of different programs that are dependent upon such factors as the state where the Company is operating and whether the operations are wholly owned or are operated through a joint venture. For the Company’s wholly owned operations, the Company currently maintains insurance coverages under a combination of policies with a total annual aggregate limit of up to $40.0 million . The Company’s insurance for the professional liability coverage is written on a “claims-made” basis, and its commercial general liability coverage is maintained on an “occurrence” basis. These coverages apply after a self-insured retention limit is exceeded. For the Company’s joint venture operations, the Company has numerous programs that are designed to respond to the risks of the specific joint venture. The annual aggregate limit under these programs ranges from $5.0 million to $20.0 million . The policies are generally written on a “claims-made” basis. Each of these programs has either a deductible or self-insured retention limit. The Company reviews its insurance program annually and may make adjustments to the amount of insurance coverage and self-insured retentions in future years. The Company also maintains umbrella liability insurance covering claims which, due to their nature or amount, are not covered by or not fully covered by the Company’s other insurance policies. These insurance policies also do not generally cover punitive damages and are subject to various deductibles and policy limits. Significant legal actions, as well as the cost and possible lack of available insurance, could subject the Company to substantial uninsured liabilities. In the Company’s opinion, the outcome of these actions, individually or in the aggregate, will not have a material adverse effect on its financial position, results of operations, or cash flows. Healthcare providers are subject to lawsuits under the qui tam provisions of the federal False Claims Act. Qui tam lawsuits typically remain under seal (hence, usually unknown to the defendant) for some time while the government decides whether or not to intervene on behalf of a private qui tam plaintiff (known as a relator) and take the lead in the litigation. These lawsuits can involve significant monetary damages and penalties and award bounties to private plaintiffs who successfully bring the suits. The Company is and has been a defendant in these cases in the past, and may be named as a defendant in similar cases from time to time in the future. Evansville Litigation. On October 19, 2015, the plaintiff‑relators filed a Second Amended Complaint in United States of America, ex rel. Tracy Conroy, Pamela Schenk and Lisa Wilson v. Select Medical Corporation, Select Specialty Hospital-Evansville, LLC (“SSH‑Evansville”), Select Employment Services, Inc., and Dr. Richard Sloan. The case is a civil action filed in the United States District Court for the Southern District of Indiana by private plaintiff‑relators on behalf of the United States under the federal False Claims Act. The plaintiff‑relators are the former CEO and two former case managers at SSH‑Evansville, and the defendants currently include the Company, SSH‑Evansville, a subsidiary of the Company serving as common paymaster for its employees, and a physician who practices at SSH‑Evansville. The plaintiff‑relators allege that SSH‑Evansville discharged patients too early or held patients too long, improperly discharged patients to and readmitted them from short stay hospitals, up‑coded diagnoses at admission, and admitted patients for whom long‑term acute care was not medically necessary. They also allege that the defendants engaged in retaliation in violation of federal and state law. The Second Amended Complaint replaced a prior complaint that was filed under seal on September 28, 2012 and served on the Company on February 15, 2013, after a federal magistrate judge unsealed it on January 8, 2013. All deadlines in the case had been stayed after the seal was lifted in order to allow the government time to complete its investigation and to decide whether or not to intervene. On June 19, 2015, the United States Department of Justice notified the District Court of its decision not to intervene in the case. In December 2015, the defendants filed a Motion to Dismiss the Second Amended Complaint on multiple grounds, including that the action is disallowed by the False Claims Act’s public disclosure bar, which disqualifies qui tam actions that are based on fraud already publicly disclosed through enumerated sources, unless the relator is an original source, and that the plaintiff‑relators did not plead their claims with sufficient particularity, as required by the Federal Rules of Civil Procedure. Thereafter, the United States filed a notice asserting a veto of the defendants’ use of the public disclosure bar for claims arising from conduct from and after March 23, 2010, which was based on certain statutory changes to the public disclosure bar language included in the Affordable Care Act. On September 30, 2016, the District Court partially granted and partially denied the defendants’ Motion to Dismiss. It ruled that the plaintiff‑relators alleged substantially the same conduct as had been publicly disclosed and that the plaintiff relators are not original sources, so that the public disclosure bar requires dismissal of all non‑retaliation claims arising from conduct before March 23, 2010. The District Court also ruled that the statutory changes to the public disclosure bar gave the United States the power to veto its applicability to claims arising from conduct on and after March 23, 2010, and therefore did not dismiss those claims based on the public disclosure bar. However, the District Court ruled that the plaintiff‑relators did not plead certain of their claims relating to interrupted stay manipulation and premature discharging of patients with the requisite particularity, and dismissed those claims. The District Court declined to dismiss the plaintiff relators’ claims arising from conduct from and after March 23, 2010 relating to delayed discharging of patients and up-coding and the plaintiff relators’ retaliation claims. The plaintiff-relators then proposed a case management plan seeking nationwide discovery involving all of the Company’s LTCHs for the period from March 23, 2010 through the present and allowing discovery that would facilitate the use of statistical sampling to prove liability, which the defendants opposed. In April 2018, a U.S. magistrate judge ruled that plaintiff‑relators’ discovery will be limited to only SSH-Evansville for the period from March 23, 2010 through September 30, 2016, and that the plaintiff‑relators will be required to prove the fraud that they allege on a claim-by-claim basis, rather than using statistical sampling. The plaintiff-relators appealed this decision to the district judge who, in March 2019, affirmed the decision of the magistrate judge regarding the geographic and temporal scope of the case, but ruled that the question of statistical sampling is not ripe for review. The Company intends to vigorously defend this action, but at this time the Company is unable to predict the timing and outcome of this matter. Wilmington Litigation. On January 19, 2017, the United States District Court for the District of Delaware unsealed a qui tam Complaint in United States of America and State of Delaware ex rel. Theresa Kelly v. Select Specialty Hospital-Wilmington, Inc. (“SSH‑Wilmington”), Select Specialty Hospitals, Inc., Select Employment Services, Inc., Select Medical Corporation, and Crystal Cheek, No. 16‑347‑LPS. The Complaint was initially filed under seal in May 2016 by a former chief nursing officer at SSH‑Wilmington and was unsealed after the United States filed a Notice of Election to Decline Intervention in January 2017. The corporate defendants were served in March 2017. In the complaint, the plaintiff‑relator alleges that the Select defendants and an individual defendant, who is a former health information manager at SSH‑Wilmington, violated the False Claims Act and the Delaware False Claims and Reporting Act based on allegedly falsifying medical practitioner signatures on medical records and failing to properly examine the credentials of medical practitioners at SSH‑Wilmington. In response to the Select defendants’ motion to dismiss the Complaint, in May 2017 the plaintiff-relator filed an Amended Complaint asserting the same causes of action. The Select defendants filed a Motion to Dismiss the Amended Complaint based on numerous grounds, including that the Amended Complaint did not plead any alleged fraud with sufficient particularity, failed to plead that the alleged fraud was material to the government’s payment decision, failed to plead sufficient facts to establish that the Select defendants knowingly submitted false claims or records, and failed to allege any reverse false claim. In March 2018, the District Court dismissed the plaintiff‑relator’s claims related to the alleged failure to properly examine medical practitioners’ credentials, her reverse false claims allegations, and her claim that defendants violated the Delaware False Claims and Reporting Act. It denied the defendants’ motion to dismiss claims that the allegedly falsified medical practitioner signatures violated the False Claims Act. Separately, the District Court dismissed the individual defendant due to plaintiff-relator’s failure to timely serve the amended complaint upon her. In March 2017, the plaintiff-relator initiated a second action by filing a Complaint in the Superior Court of the State of Delaware in Theresa Kelly v. Select Medical Corporation, Select Employment Services, Inc., and SSH‑Wilmington, C.A. No. N17C-03-293 CLS. The Delaware Complaint alleges that the defendants retaliated against her in violation of the Delaware Whistleblowers’ Protection Act for reporting the same alleged violations that are the subject of the federal Amended Complaint. The defendants filed a motion to dismiss, or alternatively to stay, the Delaware Complaint based on the pending federal Amended Complaint and the failure to allege facts to support a violation of the Delaware Whistleblowers’ Protection Act. In January 2018, the Court stayed the Delaware Complaint pending the outcome of the federal case. The Company intends to vigorously defend these actions, but at this time the Company is unable to predict the timing and outcome of this matter. Contract Therapy Subpoena. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Text Block Supplement [Abstract] | |
Condensed Consolidating Financial Information | Condensed Consolidating Financial Information Select’s 6.375% senior notes are fully and unconditionally and jointly and severally guaranteed, except for customary limitations, on a senior basis by all of Select’s wholly owned subsidiaries (the “Subsidiary Guarantors”). The Subsidiary Guarantors are defined as subsidiaries where Select, or a subsidiary of Select, holds all of the outstanding ownership interests. Certain of Select’s subsidiaries did not guarantee the 6.375% senior notes (the “Non-Guarantor Subsidiaries” and Concentra Group Holdings Parent and its subsidiaries, “Non-Guarantor Concentra”). Select conducts a significant portion of its business through its subsidiaries. Presented below is condensed consolidating financial information for Select, the Subsidiary Guarantors, the Non-Guarantor Subsidiaries, and Non-Guarantor Concentra. The equity method has been used by Select with respect to investments in subsidiaries. The equity method has been used by Subsidiary Guarantors with respect to investments in Non-Guarantor Subsidiaries. Separate financial statements for Subsidiary Guarantors are not presented. Certain reclassifications have been made to prior reported amounts in order to conform to the current year guarantor structure. Select Medical Corporation Condensed Consolidating Balance Sheet March 31, 2019 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) ASSETS Current Assets: Cash and cash equivalents $ 78 $ 7,454 $ 3,353 $ 136,930 $ — $ 147,815 Accounts receivable — 444,580 132,312 202,969 — 779,861 Intercompany receivables — 1,723,869 91,005 — (1,814,874 ) (a) — Prepaid income taxes 399 5,132 — 2,833 (655 ) (f) 7,709 Other current assets 30,152 33,973 10,025 43,350 — 117,500 Total Current Assets 30,629 2,215,008 236,695 386,082 (1,815,529 ) 1,052,885 Operating lease right-of-use assets 34,992 451,905 496,144 305,795 (306,220 ) (a) 982,616 Property and equipment, net 28,774 622,323 107,147 214,563 — 972,807 Investment in affiliates 4,491,439 138,297 — — (4,629,736 ) (b)(c) — Goodwill — 2,106,374 — 1,217,375 — 3,323,749 Identifiable intangible assets, net 3 99,884 5,108 321,433 — 426,428 Other assets 36,974 208,431 33,207 19,069 (34,674 ) (a)(e) 263,007 Total Assets $ 4,622,811 $ 5,842,222 $ 878,301 $ 2,464,317 $ (6,786,159 ) $ 7,021,492 LIABILITIES AND EQUITY Current Liabilities: Overdrafts $ 31,133 $ — $ — $ — $ — $ 31,133 Current operating lease liabilities 6,298 105,809 36,663 67,347 (10,972 ) (a) 205,145 Current portion of long-term debt and notes payable 8,656 498 896 2,279 — 12,329 Accounts payable 12,198 77,245 23,396 27,742 — 140,581 Intercompany payables 1,723,869 91,005 — — (1,814,874 ) (a) — Accrued payroll 4,080 87,957 2,744 47,508 — 142,289 Accrued vacation 4,855 64,878 14,953 31,989 — 116,675 Accrued interest 16,915 26 4 5,648 — 22,593 Accrued other 65,968 60,930 15,355 63,282 — 205,535 Income taxes payable — 4,197 170 4,945 (655 ) (f) 8,657 Total Current Liabilities 1,873,972 492,545 94,181 250,740 (1,826,501 ) 884,937 Non-current operating lease liabilities 31,902 370,579 465,664 247,673 (295,811 ) (a) 820,007 Long-term debt, net of current portion 1,882,471 37 51,091 1,365,504 — 3,299,103 Non-current deferred tax liability — 103,314 1,329 58,130 (8,910 ) (e) 153,863 Other non-current liabilities 32,435 60,464 2,959 35,134 (25,201 ) (a) 105,791 Total Liabilities 3,820,780 1,026,939 615,224 1,957,181 (2,156,423 ) 5,263,701 Redeemable non-controlling interests — — — 17,283 815,958 (d) 833,241 Stockholders’ Equity: Common stock 0 — — — — 0 Capital in excess of par 975,903 — — — — 975,903 Retained earnings (accumulated deficit) (173,872 ) 1,575,968 (28,082 ) 24,837 (1,572,723 ) (c)(d) (173,872 ) Subsidiary investment — 3,239,315 291,159 459,625 (3,990,099 ) (b)(d) — Total Select Medical Corporation Stockholders’ Equity 802,031 4,815,283 263,077 484,462 (5,562,822 ) 802,031 Non-controlling interests — — — 5,391 117,128 (d) 122,519 Total Equity 802,031 4,815,283 263,077 489,853 (5,445,694 ) 924,550 Total Liabilities and Equity $ 4,622,811 $ 5,842,222 $ 878,301 $ 2,464,317 $ (6,786,159 ) $ 7,021,492 _______________________________________________________________________________ (a) Elimination of intercompany balances. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclassification of equity attributable to non-controlling interests. (e) Reclassification to report net non-current deferred tax liability in consolidation. (f) Reclassification to report prepaid income taxes and income taxes payable by tax jurisdiction in consolidation. Select Medical Corporation Condensed Consolidating Statement of Operations For the Three Months Ended March 31, 2019 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Net operating revenues $ — $ 719,830 $ 208,480 $ 396,321 $ — $ 1,324,631 Costs and expenses: Cost of services, exclusive of depreciation and amortization 739 624,475 176,048 330,830 — 1,132,092 General and administrative 28,697 (20 ) — — — 28,677 Depreciation and amortization 2,231 20,534 4,469 24,904 — 52,138 Total costs and expenses 31,667 644,989 180,517 355,734 — 1,212,907 Income (loss) from operations (31,667 ) 74,841 27,963 40,587 — 111,724 Other income and expense: Intercompany interest and royalty fees 4,108 (1,102 ) (2,643 ) (363 ) — — Intercompany management fees 61,472 (48,770 ) (12,702 ) — — — Equity in earnings of unconsolidated subsidiaries — 4,343 23 — — 4,366 Non-operating gain — 6,532 — — — 6,532 Interest income (expense) (28,200 ) 120 (221 ) (22,510 ) — (50,811 ) Income before income taxes 5,713 35,964 12,420 17,714 — 71,811 Income tax expense 57 14,225 407 3,778 — 18,467 Equity in earnings of consolidated subsidiaries 35,178 7,211 — — (42,389 ) (a) — Net income 40,834 28,950 12,013 13,936 (42,389 ) 53,344 Less: Net income attributable to non-controlling interests — — 4,802 7,708 — 12,510 Net income attributable to Select Medical Corporation $ 40,834 $ 28,950 $ 7,211 $ 6,228 $ (42,389 ) $ 40,834 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2019 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Operating activities Net income $ 40,834 $ 28,950 $ 12,013 $ 13,936 $ (42,389 ) (a) $ 53,344 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Distributions from unconsolidated subsidiaries — 7,865 7 — — 7,872 Depreciation and amortization 2,231 20,534 4,469 24,904 — 52,138 Provision for bad debts — 21 1,532 14 — 1,567 Equity in earnings of unconsolidated subsidiaries — (4,343 ) (23 ) — — (4,366 ) Equity in earnings of consolidated subsidiaries (35,178 ) (7,211 ) — — 42,389 (a) — Loss (gain) on sale of assets and businesses 300 (6,533 ) — — — (6,233 ) Stock compensation expense 5,488 — — 767 — 6,255 Amortization of debt discount, premium and issuance costs 1,286 — — 1,945 — 3,231 Deferred income taxes (364 ) 2,190 335 (2,242 ) — (81 ) Changes in operating assets and liabilities, net of effects of business combinations: Accounts receivable — (46,927 ) (15,161 ) (12,664 ) — (74,752 ) Other current assets (7,386 ) (1,991 ) 2,219 (365 ) — (7,523 ) Other assets 1,674 28,412 13,292 17,909 (3,968 ) (b) 57,319 Accounts payable (1,785 ) 926 2,745 2,438 — 4,324 Accrued expenses (480 ) (34,475 ) (14,477 ) (22,999 ) 3,268 (b) (69,163 ) Income taxes 9,819 2,410 (20 ) 5,621 — 17,830 Net cash provided by (used in) operating activities 16,439 (10,172 ) 6,931 29,264 (700 ) 41,762 Investing activities Business combinations, net of cash acquired — (3,905 ) (410 ) (1,805 ) — (6,120 ) Purchases of property and equipment (953 ) (23,309 ) (9,113 ) (15,698 ) — (49,073 ) Investment in businesses — (27,608 ) — — — (27,608 ) Proceeds from sale of assets and businesses — 2 — — — 2 Net cash used in investing activities (953 ) (54,820 ) (9,523 ) (17,503 ) — (82,799 ) Financing activities Borrowings on revolving facilities 360,000 — — — — 360,000 Payments on revolving facilities (220,000 ) — — — — (220,000 ) Payments on term loans (98,807 ) — — (33,878 ) — (132,685 ) Borrowings of other debt 5,612 — 2,678 — — 8,290 Principal payments on other debt (3,140 ) (161 ) (1,113 ) (1,741 ) — (6,155 ) Intercompany (65,200 ) 67,956 (3,456 ) — 700 (b) — Increase in overdrafts 6,050 — — — — 6,050 Proceeds from issuance of non-controlling interests — — 3,425 — — 3,425 Distributions to and purchases of non-controlling interests — (2,923 ) — (2,328 ) — (5,251 ) Net cash provided by (used in) financing activities (15,485 ) 64,872 1,534 (37,947 ) 700 13,674 Net increase (decrease) in cash and cash equivalents 1 (120 ) (1,058 ) (26,186 ) — (27,363 ) Cash and cash equivalents at beginning of period 77 7,574 4,411 163,116 — 175,178 Cash and cash equivalents at end of period $ 78 $ 7,454 $ 3,353 $ 136,930 $ — $ 147,815 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. (b) Elimination of intercompany balances. Select Medical Corporation Condensed Consolidating Balance Sheet December 31, 2018 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) ASSETS Current Assets: Cash and cash equivalents $ 77 $ 7,574 $ 4,411 $ 163,116 $ — $ 175,178 Accounts receivable — 397,674 118,683 190,319 — 706,676 Intercompany receivables — 1,787,184 83,230 — (1,870,414 ) (a) — Prepaid income taxes 10,205 5,711 — 4,623 — 20,539 Other current assets 17,866 31,181 14,048 27,036 — 90,131 Total Current Assets 28,148 2,229,324 220,372 385,094 (1,870,414 ) 992,524 Property and equipment, net 30,103 625,947 103,006 220,754 — 979,810 Investment in affiliates 4,497,167 127,036 — — (4,624,203 ) (b)(c) — Goodwill — 2,104,288 — 1,216,438 — 3,320,726 Identifiable intangible assets, net 3 102,120 5,020 330,550 — 437,693 Other assets 37,281 145,467 33,417 26,032 (8,685 ) (e) 233,512 Total Assets $ 4,592,702 $ 5,334,182 $ 361,815 $ 2,178,868 $ (6,503,302 ) $ 5,964,265 LIABILITIES AND EQUITY Current Liabilities: Overdrafts $ 25,083 $ — $ — $ — $ — $ 25,083 Current portion of long-term debt and notes payable 4,363 248 2,001 37,253 — 43,865 Accounts payable 14,033 84,343 20,956 27,361 — 146,693 Intercompany payables 1,787,184 83,230 — — (1,870,414 ) (a) — Accrued payroll 15,533 99,803 5,936 51,114 — 172,386 Accrued vacation 4,613 60,989 13,942 31,116 — 110,660 Accrued interest 5,996 22 3 6,116 — 12,137 Accrued other 60,056 61,226 17,098 52,311 — 190,691 Income taxes payable — 2,366 190 1,115 — 3,671 Total Current Liabilities 1,916,861 392,227 60,126 206,386 (1,870,414 ) 705,186 Long-term debt, net of current portion 1,837,241 448 48,402 1,363,425 — 3,249,516 Non-current deferred tax liability — 101,214 994 60,372 (8,685 ) (e) 153,895 Other non-current liabilities 35,558 59,901 9,194 54,287 — 158,940 Total Liabilities 3,789,660 553,790 118,716 1,684,470 (1,879,099 ) 4,267,537 Redeemable non-controlling interests — — — 18,525 761,963 (d) 780,488 Stockholders’ Equity: Common stock 0 — — — — 0 Capital in excess of par 970,156 — — — — 970,156 Retained earnings (accumulated deficit) (167,114 ) 1,547,018 (29,553 ) 12,355 (1,529,820 ) (c)(d) (167,114 ) Subsidiary investment — 3,233,374 272,652 457,974 (3,964,000 ) (b)(d) — Total Select Medical Corporation Stockholders’ Equity 803,042 4,780,392 243,099 470,329 (5,493,820 ) 803,042 Non-controlling interests — — — 5,544 107,654 (d) 113,198 Total Equity 803,042 4,780,392 243,099 475,873 (5,386,166 ) 916,240 Total Liabilities and Equity $ 4,592,702 $ 5,334,182 $ 361,815 $ 2,178,868 $ (6,503,302 ) $ 5,964,265 _______________________________________________________________________________ (a) Elimination of intercompany balances. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclassification of equity attributable to non-controlling interests. (e) Reclassification to report net non-current deferred tax liability in consolidation. Select Medical Corporation Condensed Consolidating Statement of Operations For the Three Months Ended March 31, 2018 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Net operating revenues $ 17 $ 706,412 $ 190,419 $ 356,116 $ — $ 1,252,964 Costs and expenses: Cost of services, exclusive of depreciation and amortization 726 608,026 158,531 298,530 — 1,065,813 General and administrative 28,807 39 — 2,936 — 31,782 Depreciation and amortization 2,207 19,447 3,970 21,147 — 46,771 Total costs and expenses 31,740 627,512 162,501 322,613 — 1,144,366 Income (loss) from operations (31,723 ) 78,900 27,918 33,503 — 108,598 Other income and expense: Intercompany interest and royalty fees 8,119 (4,295 ) (3,631 ) (193 ) — — Intercompany management fees 60,732 (49,540 ) (11,192 ) — — — Loss on early retirement of debt (2,229 ) — — (8,026 ) — (10,255 ) Equity in earnings of unconsolidated subsidiaries — 4,684 13 — — 4,697 Non-operating gain — 399 — — — 399 Interest expense (31,071 ) (67 ) (151 ) (15,874 ) — (47,163 ) Income before income taxes 3,828 30,081 12,957 9,410 — 56,276 Income tax expense (benefit) 514 11,935 93 (248 ) — 12,294 Equity in earnings of consolidated subsidiaries 30,425 8,283 — — (38,708 ) (a) — Net income 33,739 26,429 12,864 9,658 (38,708 ) 43,982 Less: Net income attributable to non-controlling interests — 85 4,581 5,577 — 10,243 Net income attributable to Select Medical Corporation $ 33,739 $ 26,344 $ 8,283 $ 4,081 $ (38,708 ) $ 33,739 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2018 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Operating activities Net income $ 33,739 $ 26,429 $ 12,864 $ 9,658 $ (38,708 ) (a) $ 43,982 Adjustments to reconcile net income to net cash provided by operating activities: Distributions from unconsolidated subsidiaries — 1,334 30 — — 1,364 Depreciation and amortization 2,207 19,447 3,970 21,147 — 46,771 Provision for bad debts — 42 — 43 — 85 Equity in earnings of unconsolidated subsidiaries — (4,684 ) (13 ) — — (4,697 ) Equity in earnings of consolidated subsidiaries (30,425 ) (8,283 ) — — 38,708 (a) — Loss on extinguishment of debt 115 — — 297 — 412 Loss (gain) on sale of assets and businesses — (516 ) — 3 — (513 ) Stock compensation expense 4,716 — — 211 — 4,927 Amortization of debt discount, premium and issuance costs 1,837 — — 1,299 — 3,136 Deferred income taxes (503 ) 1,383 (5 ) (797 ) — 78 Changes in operating assets and liabilities, net of effects of business combinations: Accounts receivable — (28,475 ) (13,600 ) (3,736 ) — (45,811 ) Other current assets (5,890 ) (569 ) 1,301 (3,787 ) — (8,945 ) Other assets 3,788 (562 ) 599 12,808 — 16,633 Accounts payable 731 (3,435 ) (985 ) (2,863 ) — (6,552 ) Accrued expenses (10,370 ) (2,667 ) 735 321 — (11,981 ) Income taxes 6,897 4,513 (111 ) 539 — 11,838 Net cash provided by operating activities 6,842 3,957 4,785 35,143 — 50,727 Investing activities Business combinations, net of cash acquired — (321 ) (22 ) (515,016 ) — (515,359 ) Purchases of property and equipment (2,269 ) (23,912 ) (6,815 ) (6,621 ) — (39,617 ) Investment in businesses — (1,749 ) — (5 ) — (1,754 ) Proceeds from sale of assets and businesses — 691 — — — 691 Net cash used in investing activities (2,269 ) (25,291 ) (6,837 ) (521,642 ) — (556,039 ) Financing activities Borrowings on revolving facilities 165,000 — — — — 165,000 Payments on revolving facilities (150,000 ) — — — — (150,000 ) Proceeds from term loans (financing costs) (11 ) — — 779,915 — 779,904 Payments on term loans (2,875 ) — — — — (2,875 ) Revolving facility debt issuance costs (837 ) — — (496 ) — (1,333 ) Borrowings of other debt 5,549 — 5,326 725 — 11,600 Principal payments on other debt (3,226 ) (145 ) (957 ) (1,581 ) — (5,909 ) Dividends paid to Holdings (122 ) — — — — (122 ) Equity investment by Holdings 738 — — — — 738 Intercompany (10,873 ) 22,125 (1,863 ) (9,389 ) — — Decrease in overdrafts (7,916 ) — — — — (7,916 ) Distributions to non-controlling interests — — (1,266 ) (285,375 ) — (286,641 ) Net cash provided by (used in) financing activities (4,573 ) 21,980 1,240 483,799 — 502,446 Net increase (decrease) in cash and cash equivalents — 646 (812 ) (2,700 ) — (2,866 ) Cash and cash equivalents at beginning of period 73 4,856 4,561 113,059 — 122,549 Cash and cash equivalents at end of period $ 73 $ 5,502 $ 3,749 $ 110,359 $ — $ 119,683 _______________________________________________________________________________ (a) |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingencies, at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Credit Risk Concentrations | Credit Risk Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash balances and trade receivables. The Company’s excess cash is held with large financial institutions. The Company grants unsecured credit to its patients, most of whom reside in the service area of the Company’s facilities and are insured under third-party payor agreements. The Company’s general policy is to verify insurance coverage prior to the date of admission for patients admitted to the Company’s critical illness recovery hospitals and rehabilitation hospitals. Within the Company’s outpatient rehabilitation clinics, the Company verifies insurance coverage prior to the patient’s visit. Within the Company’s Concentra centers, the Company verifies insurance coverage or receives authorization from the patient’s employer prior to the patient’s visit. Because of the geographic diversity of the Company’s facilities and non-governmental third-party payors, Medicare represents the Company’s only significant concentration of credit risk. Approximately 16% and 18% of the Company’s accounts receivable are from Medicare at December 31, 2018 , and March 31, 2019 |
Leases | Leases The Company evaluates whether a contract is or contains a lease at the inception of the contract. Upon lease commencement, the date on which a lessor makes the underlying asset available to the Company for use, the Company classifies the lease as either an operating or finance lease. Most of the Company’s facility and equipment leases are classified as operating leases. Balance Sheet For both operating and finance leases, the Company recognizes a right-of-use asset and lease liability at lease commencement. A right-of-use asset represents the Company’s right to use an underlying asset for the lease term while the lease liability represents an obligation to make lease payments arising from a lease which are measured on a discounted basis. The Company elected the short-term lease exemption for its equipment leases; accordingly, equipment leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Lease liabilities are measured at the present value of the remaining, fixed lease payments at lease commencement. The Company primarily uses its incremental borrowing rate, based on the information available at lease commencement, in determining the present value of its remaining lease payments. The Company’s leases may also specify extension or termination clauses. These options are factored into the measurement of the lease liability when it is reasonably certain that the Company will exercise the option. Right-of-use assets are measured at an amount equal to the initial lease liability, plus any prepaid lease payments (less any incentives received, such as reimbursement for leasehold improvements) and initial direct costs, at the lease commencement date. The Company has elected to account for lease and non-lease components, such as common area maintenance, as a single lease component for its facility leases. As a result, the fixed payments that would otherwise be allocated to the non-lease components will be accounted for as lease payments and are included in the measurement of the Company’s right-of-use asset and lease liability. Statement of Operations For the Company’s operating leases, rent expense, a component of cost of services and general and administrative expenses on the consolidated statements of operations, is recognized on a straight-line basis over the lease term. The straight-line rent expense is reflective of the interest expense on the lease liability using the effective interest method and the amortization of the right-of-use asset. For the Company’s finance leases, interest expense on the lease liability is recognized using the effective interest method. Amortization expense related to the right-of-use asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. The Company elected the short-term lease exemption for its equipment leases. For these leases, the Company recognizes lease payments on a straight-line basis over the lease term and variable lease payments are expensed as incurred. These expenses are included as components of cost of services on the consolidated statements of operations. |
Redeemable Non-Controlling Interests | Redeemable Non-Controlling InterestsThe ownership interests held by outside parties in subsidiaries, limited liability companies, and limited partnerships controlled by the Company are classified as non-controlling interests. Some of the Company’s non-controlling ownership interests consist of outside parties that have certain redemption rights that, if exercised, require the Company to purchase the parties’ ownership interests. These interests are classified and reported as redeemable non-controlling interests and have been adjusted to their approximate redemption values after the attribution of net income or loss. |
Recent and Recently Adopted Accounting Pronouncements | Recent Accounting Pronouncements Financial Instruments In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments . The current standard delays the recognition of a credit loss on a financial asset until the loss is probable of occurring. The new standard removes the requirement that a credit loss be probable of occurring for it to be recognized and requires entities to use historical experience, current conditions, and reasonable and supportable forecasts to estimate their future expected credit losses. The Company’s accounts receivable derived from contracts with customers will be subject to ASU 2016-13. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance must be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the earliest comparative period in the financial statements. Given the very high rate of collectability of the Company’s accounts receivable derived from contracts with customers, the Company believes that the impact of ASU 2016-13 is unlikely to be material. Recently Adopted Accounting Pronouncements Leases The Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases using a modified retrospective approach as of January 1, 2019, for leases which existed on that date. Prior comparative periods were not adjusted and continue to be reported in accordance with ASC Topic 840, Leases . The Company elected the package of practical expedients, which permitted the Company not to reassess under ASC Topic 842 the Company’s prior conclusions about lease identification, lease classification, and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to the Company. The adoption of the standard resulted in the recognition of operating lease right-of-use assets of $1,015.0 million and operating lease liabilities of $1,057.0 million |
Variable Interest Entities | Variable Interest Entities Concentra does not own many of its medical practices, as certain states prohibit the “corporate practice of medicine,” which restricts business corporations from practicing medicine through the direct employment of physicians or from exercising control over medical decisions by physicians. In states which prohibit the corporate practice of medicine, Concentra typically enters into long-term management agreements with professional corporations or associations that are owned by licensed physicians, which, in turn, employ or contract with physicians who provide professional medical services in its occupational health centers. The management agreements have terms that provide for Concentra to conduct, supervise, and manage the day-to-day non-medical operations of the occupational health centers and provide all management and administrative services. Concentra receives a management fee for these services, which is based, in part, on the performance of the professional corporation or association. Additionally, the outstanding voting equity interests of the professional corporations or associations are typically owned by licensed physicians appointed at Concentra’s discretion. Concentra has the ability to direct the transfer of ownership of the professional corporation or association to a new licensed physician at any time. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of redeemable non-controlling interests | The changes in redeemable non-controlling interests, which are the same for Holdings and Select, are as follows (in thousands): Balance as of December 31, 2017 $ 640,818 Net income attributable to redeemable non-controlling interests 5,743 Issuance and exchange of redeemable non-controlling interests 163,659 Distributions to redeemable non-controlling interests (203,972 ) Redemption adjustment on redeemable non-controlling interests 1,051 Other 175 Balance as of March 31, 2018 $ 607,474 Balance as of December 31, 2018 $ 780,488 Net income attributable to redeemable non-controlling interests 7,700 Distributions to and purchases of redeemable non-controlling interests (2,771 ) Redemption adjustment on redeemable non-controlling interests 47,470 Other 354 Balance as of March 31, 2019 $ 833,241 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of reconciliation of fair value of identifiable net assets and goodwill to the consideration given for the acquired business | The following table reconciles the fair values of identifiable net assets and goodwill to the consideration given for the acquired business (in thousands): Accounts receivable $ 68,934 Other current assets 10,810 Property and equipment 69,712 Identifiable intangible assets 140,406 Other assets 25,435 Goodwill 540,067 Total assets 855,364 Accounts payable and other current liabilities 49,925 Deferred income taxes and other long-term liabilities 51,851 Total liabilities 101,776 Consideration given $ 753,588 |
Schedule of pro forma unaudited results of operations | The following pro forma unaudited results of operations have been prepared assuming the acquisition of U.S. HealthWorks occurred on January 1, 2017. These results are not necessarily indicative of the results of future operations nor of the results that would have occurred had the acquisition been consummated on the aforementioned date. For the three months ended March 31, 2019 , the Company’s results of operations include U.S. HealthWorks for the entire period and no pro forma adjustments were made. Three Months Ended March 31, 2018 (in thousands) Net operating revenues $ 1,300,544 Net income attributable to the Company 34,538 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Lease Cost | As of March 31, 2019 , the weighted average remaining lease terms and discount rates was as follows: Weighted average remaining lease term (in years): Operating leases 8.1 Finance leases 13.7 Weighted average discount rate: Operating leases 5.9 % Finance leases 9.0 % three months ended March 31, 2019 , the Company’s total lease cost was as follows (in thousands): Unrelated Parties Related Parties Total Operating lease cost $ 66,836 $ 1,342 $ 68,178 Finance lease cost: Amortization of right-of-use assets 36 — 36 Interest on lease liabilities 97 — 97 Short-term lease cost 592 — 592 Variable lease cost 11,836 156 11,992 Sublease income (2,488 ) — (2,488 ) Total lease cost $ 76,909 $ 1,498 $ 78,407 |
Supplemental Cash Flow Information | For the three months ended March 31, 2019 , supplemental cash flow information related to leases was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 68,352 Operating cash flows for finance leases 97 Financing cash flows for finance leases 85 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (1) $ 1,080,992 _______________________________________________________________________________ (1) Includes the right-of-use assets obtained in exchange for lease liabilities of $1,057.0 million |
Supplemental Balance Sheet Information | As of March 31, 2019 , supplemental balance sheet information related to leases was as follows (in thousands): Operating Leases Unrelated Parties Related Parties Total Operating lease right-of-use assets $ 962,186 $ 20,430 $ 982,616 Current operating lease liabilities $ 200,420 $ 4,725 $ 205,145 Non-current operating lease liabilities 801,094 18,913 820,007 Total operating lease liabilities $ 1,001,514 $ 23,638 $ 1,025,152 Finance Leases Unrelated Parties Related Parties Total Property and equipment, gross $ 2,813 $ — $ 2,813 Accumulated depreciation (36 ) — (36 ) Property and equipment, net $ 2,777 $ — $ 2,777 Current portion of long-term debt and notes payable $ 167 $ — $ 167 Long-term debt, net of current portion 4,214 — 4,214 Total finance lease liabilities $ 4,381 $ — $ 4,381 |
Maturities of Finance Lease Liabilities | As of March 31, 2019 , maturities of lease liabilities were approximately as follows (in thousands): Operating Leases Finance Leases Total 2019 $ 196,381 $ 431 $ 196,812 2020 230,500 526 231,026 2021 192,525 537 193,062 2022 151,581 548 152,129 2023 111,167 558 111,725 Thereafter 501,279 5,075 506,354 Total undiscounted cash flows 1,383,433 7,675 1,391,108 Less: Imputed interest 358,281 3,294 361,575 Total discounted lease liabilities $ 1,025,152 $ 4,381 $ 1,029,533 |
Maturities of Operating Lease Liabilities | As of March 31, 2019 , maturities of lease liabilities were approximately as follows (in thousands): Operating Leases Finance Leases Total 2019 $ 196,381 $ 431 $ 196,812 2020 230,500 526 231,026 2021 192,525 537 193,062 2022 151,581 548 152,129 2023 111,167 558 111,725 Thereafter 501,279 5,075 506,354 Total undiscounted cash flows 1,383,433 7,675 1,391,108 Less: Imputed interest 358,281 3,294 361,575 Total discounted lease liabilities $ 1,025,152 $ 4,381 $ 1,029,533 |
Maturities of Operating Lease Liabilities | In accordance with ASC Topic 840, Leases , and as disclosed in the Company’s 2018 Annual Report on Form 10-K, the Company’s future minimum lease obligations on long-term, non-cancelable operating leases with related and unrelated parties as of December 31, 2018 , were approximately as follows (in thousands): Total 2019 $ 267,846 2020 231,711 2021 193,155 2022 150,155 2023 107,759 Thereafter 484,038 $ 1,434,664 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill | The following table shows changes in the carrying amounts of goodwill by reporting unit for the three months ended March 31, 2019 : Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Total (in thousands) Balance as of December 31, 2018 $ 1,045,220 $ 416,646 $ 642,422 $ 1,216,438 $ 3,320,726 Acquired — 6,964 746 937 8,647 Sold — — (5,624 ) — (5,624 ) Balance as of March 31, 2019 $ 1,045,220 $ 423,610 $ 637,544 $ 1,217,375 $ 3,323,749 |
Schedule of carrying value and amortization of identifiable intangible assets | The following table provides the gross carrying amounts, accumulated amortization, and net carrying amounts for the Company’s identifiable intangible assets: December 31, 2018 March 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in thousands) Indefinite-lived intangible assets: Trademarks $ 166,698 $ — $ 166,698 $ 166,698 $ — $ 166,698 Certificates of need 19,174 — 19,174 19,221 — 19,221 Accreditations 1,857 — 1,857 1,857 — 1,857 Finite-lived intangible assets: Trademarks 5,000 (4,583 ) 417 5,000 (5,000 ) — Customer relationships 280,710 (61,900 ) 218,810 283,090 (68,150 ) 214,940 Favorable leasehold interests (1) 13,553 (6,064 ) 7,489 — — — Non-compete agreements 29,400 (6,152 ) 23,248 30,483 (6,771 ) 23,712 Total identifiable intangible assets $ 516,392 $ (78,699 ) $ 437,693 $ 506,349 $ (79,921 ) $ 426,428 _______________________________________________________________________________ (1) Favorable leasehold interests are a component of the operating lease right-of-use assets upon adoption of ASC Topic 842, Leases |
Long-Term Debt and Notes Paya_2
Long-Term Debt and Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Company's long-term debt and notes payable | As of March 31, 2019 , the Company’s long-term debt and notes payable were as follows (in thousands): Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value Select: 6.375% senior notes $ 710,000 $ 493 $ (4,162 ) $ 706,331 $ 711,775 Credit facilities: Revolving facility 160,000 — — 160,000 147,200 Term loan 1,031,068 (9,267 ) (8,827 ) 1,012,974 1,024,624 Other 64,808 — (464 ) 64,344 64,344 Total Select debt 1,965,876 (8,774 ) (13,453 ) 1,943,649 1,947,943 Concentra: Credit facilities: Term loans 1,380,297 (2,555 ) (16,877 ) 1,360,865 1,373,545 Other debt, including finance leases 6,918 — — 6,918 6,918 Total Concentra debt 1,387,215 (2,555 ) (16,877 ) 1,367,783 1,380,463 Total debt $ 3,353,091 $ (11,329 ) $ (30,330 ) $ 3,311,432 $ 3,328,406 December 31, 2018 , the Company’s long-term debt and notes payable were as follows (in thousands): Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value Select: 6.375% senior notes $ 710,000 $ 550 $ (4,642 ) $ 705,908 $ 706,450 Credit facilities: Revolving facility 20,000 — — 20,000 18,400 Term loan 1,129,875 (9,690 ) (9,321 ) 1,110,864 1,076,206 Other 56,415 — (484 ) 55,931 55,931 Total Select debt 1,916,290 (9,140 ) (14,447 ) 1,892,703 1,856,987 Concentra: Credit facilities: Term loans 1,414,175 (2,765 ) (18,648 ) 1,392,762 1,357,802 Other debt, including finance leases 7,916 — — 7,916 7,916 Total Concentra debt 1,422,091 (2,765 ) (18,648 ) 1,400,678 1,365,718 Total debt $ 3,338,381 $ (11,905 ) $ (33,095 ) $ 3,293,381 $ 3,222,705 |
Schedule of principal maturities of the Company's long-term debt and notes payable | Principal maturities of the Company’s long-term debt and notes payable were approximately as follows (in thousands): 2019 2020 2021 2022 2023 Thereafter Total Select: 6.375% senior notes $ — $ — $ 710,000 $ — $ — $ — $ 710,000 Credit facilities: Revolving facility — — — 160,000 — — 160,000 Term loan — — — — — 1,031,068 1,031,068 Other 9,262 27,211 1,781 — — 26,554 64,808 Total Select debt 9,262 27,211 711,781 160,000 — 1,057,622 1,965,876 Concentra: Credit facilities: Term loans — — — 1,140,298 239,999 — 1,380,297 Other debt, including finance leases 1,644 754 330 358 363 3,469 6,918 Total Concentra debt 1,644 754 330 1,140,656 240,362 3,469 1,387,215 Total debt $ 10,906 $ 27,965 $ 712,111 $ 1,300,656 $ 240,362 $ 1,061,091 $ 3,353,091 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of selected financial data for the Company's reportable segments | The following tables summarize selected financial data for the Company’s reportable segments. The segment results of Holdings are identical to those of Select. Three Months Ended March 31, 2018 2019 (in thousands) Net operating revenues: Critical illness recovery hospital $ 464,676 $ 462,159 Rehabilitation hospital 174,774 188,954 Outpatient rehabilitation 257,381 277,197 Concentra 356,116 396,321 Other 17 — Total Company $ 1,252,964 $ 1,324,631 Adjusted EBITDA: Critical illness recovery hospital $ 72,972 $ 72,998 Rehabilitation hospital 26,776 25,797 Outpatient rehabilitation 30,525 28,991 Concentra 57,797 66,258 Other (24,838 ) (23,927 ) Total Company $ 163,232 $ 170,117 Total assets: Critical illness recovery hospital $ 1,862,791 $ 2,062,659 Rehabilitation hospital 877,750 1,089,391 Outpatient rehabilitation 973,122 1,250,015 Concentra 2,143,405 2,464,317 Other 111,575 155,110 Total Company $ 5,968,643 $ 7,021,492 Purchases of property and equipment, net: Critical illness recovery hospital $ 10,472 $ 10,160 Rehabilitation hospital 12,917 13,183 Outpatient rehabilitation 7,338 9,040 Concentra 6,621 15,698 Other 2,269 992 Total Company $ 39,617 $ 49,073 |
Schedule of reconciliation of Adjusted EBITDA to income before income taxes | A reconciliation of Adjusted EBITDA to income before income taxes is as follows: Three Months Ended March 31, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 72,972 $ 26,776 $ 30,525 $ 57,797 $ (24,838 ) Depreciation and amortization (11,058 ) (5,722 ) (6,637 ) (21,147 ) (2,207 ) Stock compensation expense — — — (211 ) (4,716 ) U.S. HealthWorks acquisition costs — — — (2,936 ) — Income (loss) from operations $ 61,914 $ 21,054 $ 23,888 $ 33,503 $ (31,761 ) $ 108,598 Loss on early retirement of debt (10,255 ) Equity in earnings of unconsolidated subsidiaries 4,697 Non-operating gain 399 Interest expense (47,163 ) Income before income taxes $ 56,276 Three Months Ended March 31, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 72,998 $ 25,797 $ 28,991 $ 66,258 $ (23,927 ) Depreciation and amortization (11,451 ) (6,402 ) (7,032 ) (24,904 ) (2,349 ) Stock compensation expense — — — (767 ) (5,488 ) Income (loss) from operations $ 61,547 $ 19,395 $ 21,959 $ 40,587 $ (31,764 ) $ 111,724 Equity in earnings of unconsolidated subsidiaries 4,366 Non-operating gain 6,532 Interest expense (50,811 ) Income before income taxes $ 71,811 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of net operating revenues by operating segment | The following tables disaggregate the Company’s net operating revenues for the three months ended March 31, 2018 and 2019 : Three Months Ended March 31, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra (in thousands) Patient service revenues: Medicare $ 240,992 $ 72,841 $ 38,190 $ 628 Non-Medicare 220,006 61,902 188,900 353,252 Total patient services revenues 460,998 134,743 227,090 353,880 Other revenues 3,678 40,031 30,291 2,236 Total net operating revenues $ 464,676 $ 174,774 $ 257,381 $ 356,116 Three Months Ended March 31, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra (in thousands) Patient service revenues: Medicare $ 238,169 $ 74,579 $ 40,278 $ 555 Non-Medicare 216,959 70,642 187,914 393,236 Total patient services revenues 455,128 145,221 228,192 393,791 Other revenues 7,031 43,733 49,005 2,530 Total net operating revenues $ 462,159 $ 188,954 $ 277,197 $ 396,321 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per share | The following table sets forth the net income attributable to the Company, its common shares outstanding, and its participating securities outstanding. Basic EPS Diluted EPS Three Months Ended March 31, Three Months Ended March 31, 2018 2019 2018 2019 (in thousands) Net income $ 43,982 $ 53,344 $ 43,982 $ 53,344 Less: net income attributable to non-controlling interests 10,243 12,510 10,243 12,510 Net income attributable to the Company 33,739 40,834 33,739 40,834 Less: net income attributable to participating securities 1,111 1,343 1,110 1,343 Net income attributable to common shares $ 32,628 $ 39,491 $ 32,629 $ 39,491 The following tables set forth the computation of EPS under the two-class method: Three Months Ended March 31, 2019 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 39,491 130,821 $ 0.30 $ 39,491 130,861 $ 0.30 Participating securities 1,343 4,449 $ 0.30 1,343 4,449 $ 0.30 Total Company $ 40,834 $ 40,834 Three Months Ended March 31, 2018 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 32,628 129,691 $ 0.25 $ 32,629 129,816 $ 0.25 Participating securities 1,111 4,416 $ 0.25 1,110 4,416 $ 0.25 Total Company $ 33,739 $ 33,739 _______________________________________________________________________________ |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Condensed Financial Statements, Captions [Line Items] | |
Schedule of Condensed Consolidating Balance Sheet | Select Medical Corporation Condensed Consolidating Balance Sheet March 31, 2019 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) ASSETS Current Assets: Cash and cash equivalents $ 78 $ 7,454 $ 3,353 $ 136,930 $ — $ 147,815 Accounts receivable — 444,580 132,312 202,969 — 779,861 Intercompany receivables — 1,723,869 91,005 — (1,814,874 ) (a) — Prepaid income taxes 399 5,132 — 2,833 (655 ) (f) 7,709 Other current assets 30,152 33,973 10,025 43,350 — 117,500 Total Current Assets 30,629 2,215,008 236,695 386,082 (1,815,529 ) 1,052,885 Operating lease right-of-use assets 34,992 451,905 496,144 305,795 (306,220 ) (a) 982,616 Property and equipment, net 28,774 622,323 107,147 214,563 — 972,807 Investment in affiliates 4,491,439 138,297 — — (4,629,736 ) (b)(c) — Goodwill — 2,106,374 — 1,217,375 — 3,323,749 Identifiable intangible assets, net 3 99,884 5,108 321,433 — 426,428 Other assets 36,974 208,431 33,207 19,069 (34,674 ) (a)(e) 263,007 Total Assets $ 4,622,811 $ 5,842,222 $ 878,301 $ 2,464,317 $ (6,786,159 ) $ 7,021,492 LIABILITIES AND EQUITY Current Liabilities: Overdrafts $ 31,133 $ — $ — $ — $ — $ 31,133 Current operating lease liabilities 6,298 105,809 36,663 67,347 (10,972 ) (a) 205,145 Current portion of long-term debt and notes payable 8,656 498 896 2,279 — 12,329 Accounts payable 12,198 77,245 23,396 27,742 — 140,581 Intercompany payables 1,723,869 91,005 — — (1,814,874 ) (a) — Accrued payroll 4,080 87,957 2,744 47,508 — 142,289 Accrued vacation 4,855 64,878 14,953 31,989 — 116,675 Accrued interest 16,915 26 4 5,648 — 22,593 Accrued other 65,968 60,930 15,355 63,282 — 205,535 Income taxes payable — 4,197 170 4,945 (655 ) (f) 8,657 Total Current Liabilities 1,873,972 492,545 94,181 250,740 (1,826,501 ) 884,937 Non-current operating lease liabilities 31,902 370,579 465,664 247,673 (295,811 ) (a) 820,007 Long-term debt, net of current portion 1,882,471 37 51,091 1,365,504 — 3,299,103 Non-current deferred tax liability — 103,314 1,329 58,130 (8,910 ) (e) 153,863 Other non-current liabilities 32,435 60,464 2,959 35,134 (25,201 ) (a) 105,791 Total Liabilities 3,820,780 1,026,939 615,224 1,957,181 (2,156,423 ) 5,263,701 Redeemable non-controlling interests — — — 17,283 815,958 (d) 833,241 Stockholders’ Equity: Common stock 0 — — — — 0 Capital in excess of par 975,903 — — — — 975,903 Retained earnings (accumulated deficit) (173,872 ) 1,575,968 (28,082 ) 24,837 (1,572,723 ) (c)(d) (173,872 ) Subsidiary investment — 3,239,315 291,159 459,625 (3,990,099 ) (b)(d) — Total Select Medical Corporation Stockholders’ Equity 802,031 4,815,283 263,077 484,462 (5,562,822 ) 802,031 Non-controlling interests — — — 5,391 117,128 (d) 122,519 Total Equity 802,031 4,815,283 263,077 489,853 (5,445,694 ) 924,550 Total Liabilities and Equity $ 4,622,811 $ 5,842,222 $ 878,301 $ 2,464,317 $ (6,786,159 ) $ 7,021,492 _______________________________________________________________________________ (a) Elimination of intercompany balances. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclassification of equity attributable to non-controlling interests. (e) Reclassification to report net non-current deferred tax liability in consolidation. (f) Condensed Consolidating Balance Sheet December 31, 2018 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) ASSETS Current Assets: Cash and cash equivalents $ 77 $ 7,574 $ 4,411 $ 163,116 $ — $ 175,178 Accounts receivable — 397,674 118,683 190,319 — 706,676 Intercompany receivables — 1,787,184 83,230 — (1,870,414 ) (a) — Prepaid income taxes 10,205 5,711 — 4,623 — 20,539 Other current assets 17,866 31,181 14,048 27,036 — 90,131 Total Current Assets 28,148 2,229,324 220,372 385,094 (1,870,414 ) 992,524 Property and equipment, net 30,103 625,947 103,006 220,754 — 979,810 Investment in affiliates 4,497,167 127,036 — — (4,624,203 ) (b)(c) — Goodwill — 2,104,288 — 1,216,438 — 3,320,726 Identifiable intangible assets, net 3 102,120 5,020 330,550 — 437,693 Other assets 37,281 145,467 33,417 26,032 (8,685 ) (e) 233,512 Total Assets $ 4,592,702 $ 5,334,182 $ 361,815 $ 2,178,868 $ (6,503,302 ) $ 5,964,265 LIABILITIES AND EQUITY Current Liabilities: Overdrafts $ 25,083 $ — $ — $ — $ — $ 25,083 Current portion of long-term debt and notes payable 4,363 248 2,001 37,253 — 43,865 Accounts payable 14,033 84,343 20,956 27,361 — 146,693 Intercompany payables 1,787,184 83,230 — — (1,870,414 ) (a) — Accrued payroll 15,533 99,803 5,936 51,114 — 172,386 Accrued vacation 4,613 60,989 13,942 31,116 — 110,660 Accrued interest 5,996 22 3 6,116 — 12,137 Accrued other 60,056 61,226 17,098 52,311 — 190,691 Income taxes payable — 2,366 190 1,115 — 3,671 Total Current Liabilities 1,916,861 392,227 60,126 206,386 (1,870,414 ) 705,186 Long-term debt, net of current portion 1,837,241 448 48,402 1,363,425 — 3,249,516 Non-current deferred tax liability — 101,214 994 60,372 (8,685 ) (e) 153,895 Other non-current liabilities 35,558 59,901 9,194 54,287 — 158,940 Total Liabilities 3,789,660 553,790 118,716 1,684,470 (1,879,099 ) 4,267,537 Redeemable non-controlling interests — — — 18,525 761,963 (d) 780,488 Stockholders’ Equity: Common stock 0 — — — — 0 Capital in excess of par 970,156 — — — — 970,156 Retained earnings (accumulated deficit) (167,114 ) 1,547,018 (29,553 ) 12,355 (1,529,820 ) (c)(d) (167,114 ) Subsidiary investment — 3,233,374 272,652 457,974 (3,964,000 ) (b)(d) — Total Select Medical Corporation Stockholders’ Equity 803,042 4,780,392 243,099 470,329 (5,493,820 ) 803,042 Non-controlling interests — — — 5,544 107,654 (d) 113,198 Total Equity 803,042 4,780,392 243,099 475,873 (5,386,166 ) 916,240 Total Liabilities and Equity $ 4,592,702 $ 5,334,182 $ 361,815 $ 2,178,868 $ (6,503,302 ) $ 5,964,265 _______________________________________________________________________________ (a) Elimination of intercompany balances. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclassification of equity attributable to non-controlling interests. (e) Reclassification to report net non-current deferred tax liability in consolidation. |
Schedule of Condensed Consolidating Statement of Operations | Select Medical Corporation Condensed Consolidating Statement of Operations For the Three Months Ended March 31, 2018 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Net operating revenues $ 17 $ 706,412 $ 190,419 $ 356,116 $ — $ 1,252,964 Costs and expenses: Cost of services, exclusive of depreciation and amortization 726 608,026 158,531 298,530 — 1,065,813 General and administrative 28,807 39 — 2,936 — 31,782 Depreciation and amortization 2,207 19,447 3,970 21,147 — 46,771 Total costs and expenses 31,740 627,512 162,501 322,613 — 1,144,366 Income (loss) from operations (31,723 ) 78,900 27,918 33,503 — 108,598 Other income and expense: Intercompany interest and royalty fees 8,119 (4,295 ) (3,631 ) (193 ) — — Intercompany management fees 60,732 (49,540 ) (11,192 ) — — — Loss on early retirement of debt (2,229 ) — — (8,026 ) — (10,255 ) Equity in earnings of unconsolidated subsidiaries — 4,684 13 — — 4,697 Non-operating gain — 399 — — — 399 Interest expense (31,071 ) (67 ) (151 ) (15,874 ) — (47,163 ) Income before income taxes 3,828 30,081 12,957 9,410 — 56,276 Income tax expense (benefit) 514 11,935 93 (248 ) — 12,294 Equity in earnings of consolidated subsidiaries 30,425 8,283 — — (38,708 ) (a) — Net income 33,739 26,429 12,864 9,658 (38,708 ) 43,982 Less: Net income attributable to non-controlling interests — 85 4,581 5,577 — 10,243 Net income attributable to Select Medical Corporation $ 33,739 $ 26,344 $ 8,283 $ 4,081 $ (38,708 ) $ 33,739 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. Condensed Consolidating Statement of Operations For the Three Months Ended March 31, 2019 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Net operating revenues $ — $ 719,830 $ 208,480 $ 396,321 $ — $ 1,324,631 Costs and expenses: Cost of services, exclusive of depreciation and amortization 739 624,475 176,048 330,830 — 1,132,092 General and administrative 28,697 (20 ) — — — 28,677 Depreciation and amortization 2,231 20,534 4,469 24,904 — 52,138 Total costs and expenses 31,667 644,989 180,517 355,734 — 1,212,907 Income (loss) from operations (31,667 ) 74,841 27,963 40,587 — 111,724 Other income and expense: Intercompany interest and royalty fees 4,108 (1,102 ) (2,643 ) (363 ) — — Intercompany management fees 61,472 (48,770 ) (12,702 ) — — — Equity in earnings of unconsolidated subsidiaries — 4,343 23 — — 4,366 Non-operating gain — 6,532 — — — 6,532 Interest income (expense) (28,200 ) 120 (221 ) (22,510 ) — (50,811 ) Income before income taxes 5,713 35,964 12,420 17,714 — 71,811 Income tax expense 57 14,225 407 3,778 — 18,467 Equity in earnings of consolidated subsidiaries 35,178 7,211 — — (42,389 ) (a) — Net income 40,834 28,950 12,013 13,936 (42,389 ) 53,344 Less: Net income attributable to non-controlling interests — — 4,802 7,708 — 12,510 Net income attributable to Select Medical Corporation $ 40,834 $ 28,950 $ 7,211 $ 6,228 $ (42,389 ) $ 40,834 _______________________________________________________________________________ (a) |
Schedule of Condensed Consolidating Statement of Cash Flows | Select Medical Corporation Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2019 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Operating activities Net income $ 40,834 $ 28,950 $ 12,013 $ 13,936 $ (42,389 ) (a) $ 53,344 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Distributions from unconsolidated subsidiaries — 7,865 7 — — 7,872 Depreciation and amortization 2,231 20,534 4,469 24,904 — 52,138 Provision for bad debts — 21 1,532 14 — 1,567 Equity in earnings of unconsolidated subsidiaries — (4,343 ) (23 ) — — (4,366 ) Equity in earnings of consolidated subsidiaries (35,178 ) (7,211 ) — — 42,389 (a) — Loss (gain) on sale of assets and businesses 300 (6,533 ) — — — (6,233 ) Stock compensation expense 5,488 — — 767 — 6,255 Amortization of debt discount, premium and issuance costs 1,286 — — 1,945 — 3,231 Deferred income taxes (364 ) 2,190 335 (2,242 ) — (81 ) Changes in operating assets and liabilities, net of effects of business combinations: Accounts receivable — (46,927 ) (15,161 ) (12,664 ) — (74,752 ) Other current assets (7,386 ) (1,991 ) 2,219 (365 ) — (7,523 ) Other assets 1,674 28,412 13,292 17,909 (3,968 ) (b) 57,319 Accounts payable (1,785 ) 926 2,745 2,438 — 4,324 Accrued expenses (480 ) (34,475 ) (14,477 ) (22,999 ) 3,268 (b) (69,163 ) Income taxes 9,819 2,410 (20 ) 5,621 — 17,830 Net cash provided by (used in) operating activities 16,439 (10,172 ) 6,931 29,264 (700 ) 41,762 Investing activities Business combinations, net of cash acquired — (3,905 ) (410 ) (1,805 ) — (6,120 ) Purchases of property and equipment (953 ) (23,309 ) (9,113 ) (15,698 ) — (49,073 ) Investment in businesses — (27,608 ) — — — (27,608 ) Proceeds from sale of assets and businesses — 2 — — — 2 Net cash used in investing activities (953 ) (54,820 ) (9,523 ) (17,503 ) — (82,799 ) Financing activities Borrowings on revolving facilities 360,000 — — — — 360,000 Payments on revolving facilities (220,000 ) — — — — (220,000 ) Payments on term loans (98,807 ) — — (33,878 ) — (132,685 ) Borrowings of other debt 5,612 — 2,678 — — 8,290 Principal payments on other debt (3,140 ) (161 ) (1,113 ) (1,741 ) — (6,155 ) Intercompany (65,200 ) 67,956 (3,456 ) — 700 (b) — Increase in overdrafts 6,050 — — — — 6,050 Proceeds from issuance of non-controlling interests — — 3,425 — — 3,425 Distributions to and purchases of non-controlling interests — (2,923 ) — (2,328 ) — (5,251 ) Net cash provided by (used in) financing activities (15,485 ) 64,872 1,534 (37,947 ) 700 13,674 Net increase (decrease) in cash and cash equivalents 1 (120 ) (1,058 ) (26,186 ) — (27,363 ) Cash and cash equivalents at beginning of period 77 7,574 4,411 163,116 — 175,178 Cash and cash equivalents at end of period $ 78 $ 7,454 $ 3,353 $ 136,930 $ — $ 147,815 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. (b) Elimination of intercompany balances. Condensed Consolidating Statement of Cash Flows For the Three Months Ended March 31, 2018 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Operating activities Net income $ 33,739 $ 26,429 $ 12,864 $ 9,658 $ (38,708 ) (a) $ 43,982 Adjustments to reconcile net income to net cash provided by operating activities: Distributions from unconsolidated subsidiaries — 1,334 30 — — 1,364 Depreciation and amortization 2,207 19,447 3,970 21,147 — 46,771 Provision for bad debts — 42 — 43 — 85 Equity in earnings of unconsolidated subsidiaries — (4,684 ) (13 ) — — (4,697 ) Equity in earnings of consolidated subsidiaries (30,425 ) (8,283 ) — — 38,708 (a) — Loss on extinguishment of debt 115 — — 297 — 412 Loss (gain) on sale of assets and businesses — (516 ) — 3 — (513 ) Stock compensation expense 4,716 — — 211 — 4,927 Amortization of debt discount, premium and issuance costs 1,837 — — 1,299 — 3,136 Deferred income taxes (503 ) 1,383 (5 ) (797 ) — 78 Changes in operating assets and liabilities, net of effects of business combinations: Accounts receivable — (28,475 ) (13,600 ) (3,736 ) — (45,811 ) Other current assets (5,890 ) (569 ) 1,301 (3,787 ) — (8,945 ) Other assets 3,788 (562 ) 599 12,808 — 16,633 Accounts payable 731 (3,435 ) (985 ) (2,863 ) — (6,552 ) Accrued expenses (10,370 ) (2,667 ) 735 321 — (11,981 ) Income taxes 6,897 4,513 (111 ) 539 — 11,838 Net cash provided by operating activities 6,842 3,957 4,785 35,143 — 50,727 Investing activities Business combinations, net of cash acquired — (321 ) (22 ) (515,016 ) — (515,359 ) Purchases of property and equipment (2,269 ) (23,912 ) (6,815 ) (6,621 ) — (39,617 ) Investment in businesses — (1,749 ) — (5 ) — (1,754 ) Proceeds from sale of assets and businesses — 691 — — — 691 Net cash used in investing activities (2,269 ) (25,291 ) (6,837 ) (521,642 ) — (556,039 ) Financing activities Borrowings on revolving facilities 165,000 — — — — 165,000 Payments on revolving facilities (150,000 ) — — — — (150,000 ) Proceeds from term loans (financing costs) (11 ) — — 779,915 — 779,904 Payments on term loans (2,875 ) — — — — (2,875 ) Revolving facility debt issuance costs (837 ) — — (496 ) — (1,333 ) Borrowings of other debt 5,549 — 5,326 725 — 11,600 Principal payments on other debt (3,226 ) (145 ) (957 ) (1,581 ) — (5,909 ) Dividends paid to Holdings (122 ) — — — — (122 ) Equity investment by Holdings 738 — — — — 738 Intercompany (10,873 ) 22,125 (1,863 ) (9,389 ) — — Decrease in overdrafts (7,916 ) — — — — (7,916 ) Distributions to non-controlling interests — — (1,266 ) (285,375 ) — (286,641 ) Net cash provided by (used in) financing activities (4,573 ) 21,980 1,240 483,799 — 502,446 Net increase (decrease) in cash and cash equivalents — 646 (812 ) (2,700 ) — (2,866 ) Cash and cash equivalents at beginning of period 73 4,856 4,561 113,059 — 122,549 Cash and cash equivalents at end of period $ 73 $ 5,502 $ 3,749 $ 110,359 $ — $ 119,683 _______________________________________________________________________________ (a) |
Accounting Policies - Narrative
Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 982,616 | ||
Operating lease liability | $ 1,025,152 | ||
Third-Party Payor Risk | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Percentage of concentration risk | 18.00% | 16.00% | |
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 1,015,000 | ||
Operating lease liability | $ 1,057,000 |
Accounting Policies - Schedule
Accounting Policies - Schedule of Redeemable Non-Controlling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Balance, beginning | $ 780,488 | $ 640,818 |
Net income attributable to redeemable non-controlling interests | 7,700 | 5,743 |
Issuance and exchange of redeemable non-controlling interests | 163,659 | |
Distributions to redeemable non-controlling interests | (2,771) | (203,972) |
Redemption adjustment on redeemable non-controlling interests | 47,470 | 1,051 |
Other | 354 | 175 |
Balance, ending | $ 833,241 | $ 607,474 |
Acquisitions - U.S. HealthWorks
Acquisitions - U.S. HealthWorks Acquisition (Details) - USD ($) $ in Thousands | Feb. 01, 2018 | Mar. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2018 |
Acquisitions | ||||
Non-cash equity exchange for acquisition of U.S. HealthWorks | $ 238,000 | $ 0 | ||
Consideration given for the acquired business | ||||
Goodwill | $ 3,323,749 | $ 3,320,726 | ||
U.S. HealthWorks | ||||
Acquisitions | ||||
Total consideration (net of cash acquired) | $ 753,600 | |||
Net revenues of acquiree | $ 89,900 | |||
Consideration given for the acquired business | ||||
Accounts receivable | 68,934 | |||
Other current assets | 10,810 | |||
Property and equipment | 69,712 | |||
Identifiable intangible assets | 140,406 | |||
Other assets | 25,435 | |||
Goodwill | 540,067 | |||
Total assets | 855,364 | |||
Accounts payable and other current liabilities | 49,925 | |||
Deferred income taxes and other long-term liabilities | 51,851 | |||
Total liabilities | 101,776 | |||
Consideration given | $ 753,588 | |||
Concentra Group Holdings Parent, LLC | U.S. HealthWorks | ||||
Acquisitions | ||||
Equity interest issued (percent) | 20.00% | |||
Non-cash equity exchange for acquisition of U.S. HealthWorks | $ 238,000 |
Acquisitions - Pro Forma Result
Acquisitions - Pro Forma Results (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Pro forma results of operations | |
Net operating revenues | $ 1,300,544 |
Net income attributable to the Company | 34,538 |
U.S. HealthWorks | |
Acquisition costs | |
U.S. HealthWorks acquisition costs | $ (2,900) |
Sale of Businesses (Details)
Sale of Businesses (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($)clinic | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Gain on disposal | $ | $ 6.5 |
Outpatient Rehabilitation | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Number of outpatient rehabilitation clinics sold | clinic | 22 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Variable interest entity, assets | $ 177.6 | $ 166.2 |
Variable interest entity, liabilities | $ 175.8 | $ 164.4 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended |
Mar. 31, 2019renewal_option | |
Critical Illness Recovery Hospital | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Number of renewal options | 2 |
Lease term renewal option | 5 years |
Rehabilitation Hospital | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Number of renewal options | 2 |
Lease term renewal option | 5 years |
Outpatient Rehabilitation | |
Lessee, Lease, Description [Line Items] | |
Lease term | 5 years |
Number of renewal options | 2 |
Outpatient Rehabilitation | Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease term renewal option | 3 years |
Outpatient Rehabilitation | Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease term renewal option | 5 years |
Concentra | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Number of renewal options | 2 |
Lease term renewal option | 5 years |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Operating lease cost | $ 68,178 |
Finance lease cost: | |
Amortization of right-of-use assets | 36 |
Interest on lease liabilities | 97 |
Short-term lease cost | 592 |
Variable lease cost | 11,992 |
Sublease income | (2,488) |
Total lease cost | 78,407 |
Unrelated Parties | |
Lessee, Lease, Description [Line Items] | |
Operating lease cost | 66,836 |
Finance lease cost: | |
Amortization of right-of-use assets | 36 |
Interest on lease liabilities | 97 |
Short-term lease cost | 592 |
Variable lease cost | 11,836 |
Sublease income | (2,488) |
Total lease cost | 76,909 |
Related Parties | |
Lessee, Lease, Description [Line Items] | |
Operating lease cost | 1,342 |
Finance lease cost: | |
Amortization of right-of-use assets | 0 |
Interest on lease liabilities | 0 |
Short-term lease cost | 0 |
Variable lease cost | 156 |
Sublease income | 0 |
Total lease cost | $ 1,498 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Mar. 31, 2019 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows for operating leases | $ 68,352 | |
Operating cash flows for finance leases | 97 | |
Financing cash flows for finance leases | 85 | |
Right-of-use assets obtained in exchange for lease liabilities: | ||
Operating leases | $ 1,080,992 | |
Accounting Standards Update 2016-02 | ||
Right-of-use assets obtained in exchange for lease liabilities: | ||
Operating leases | $ 1,057,000 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Operating Leases | |
Operating lease right-of-use assets | $ 982,616 |
Current operating lease liabilities | 205,145 |
Non-current operating lease liabilities | 820,007 |
Total operating lease liabilities | 1,025,152 |
Finance Leases | |
Property and equipment, gross | 2,813 |
Accumulated depreciation | (36) |
Property and equipment, net | 2,777 |
Current portion of long-term debt and notes payable | 167 |
Long-term debt, net of current portion | 4,214 |
Total finance lease liabilities | 4,381 |
Unrelated Parties | |
Operating Leases | |
Operating lease right-of-use assets | 962,186 |
Current operating lease liabilities | 200,420 |
Non-current operating lease liabilities | 801,094 |
Total operating lease liabilities | 1,001,514 |
Finance Leases | |
Property and equipment, gross | 2,813 |
Accumulated depreciation | (36) |
Property and equipment, net | 2,777 |
Current portion of long-term debt and notes payable | 167 |
Long-term debt, net of current portion | 4,214 |
Total finance lease liabilities | 4,381 |
Related Parties | |
Operating Leases | |
Operating lease right-of-use assets | 20,430 |
Current operating lease liabilities | 4,725 |
Non-current operating lease liabilities | 18,913 |
Total operating lease liabilities | 23,638 |
Finance Leases | |
Property and equipment, gross | 0 |
Accumulated depreciation | 0 |
Property and equipment, net | 0 |
Current portion of long-term debt and notes payable | 0 |
Long-term debt, net of current portion | 0 |
Total finance lease liabilities | $ 0 |
Leases - Weighted Average Lease
Leases - Weighted Average Lease Terms and Discount Rates (Details) | Mar. 31, 2019 |
Weighted average remaining lease term (in years): | |
Operating leases | 8 years 1 month 6 days |
Finance leases | 13 years 8 months 12 days |
Weighted average discount rate: | |
Operating leases | 5.90% |
Finance leases | 9.00% |
Leases - Maturities of Operatin
Leases - Maturities of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Operating Leases | ||
2019 | $ 196,381 | |
2020 | 230,500 | |
2021 | 192,525 | |
2022 | 151,581 | |
2023 | 111,167 | |
Thereafter | 501,279 | |
Total undiscounted cash flows | 1,383,433 | |
Less: Imputed interest | 358,281 | |
Total operating lease liabilities | 1,025,152 | |
Finance Leases | ||
2019 | 431 | |
2020 | 526 | |
2021 | 537 | |
2022 | 548 | |
2023 | 558 | |
Thereafter | 5,075 | |
Total undiscounted cash flows | 7,675 | |
Less: Imputed interest | 3,294 | |
Total finance lease liabilities | 4,381 | |
Total | ||
2019 | 196,812 | |
2020 | 231,026 | |
2021 | 193,062 | |
2022 | 152,129 | |
2023 | 111,725 | |
Thereafter | 506,354 | |
Total undiscounted cash flows | 1,391,108 | |
Less: Imputed interest | 361,575 | |
Total operating lease liabilities | $ 1,029,533 | |
Operating Leases | ||
2019 | $ 267,846 | |
2020 | 231,711 | |
2021 | 193,155 | |
2022 | 150,155 | |
2023 | 107,759 | |
Thereafter | 484,038 | |
Total | $ 1,434,664 |
Intangible Assets - Carrying Am
Intangible Assets - Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Goodwill | |
December 31, 2018 | $ 3,320,726 |
Acquired | 8,647 |
Sold | (5,624) |
March 31, 2019 | 3,323,749 |
Critical Illness Recovery Hospital | |
Goodwill | |
December 31, 2018 | 1,045,220 |
Acquired | 0 |
Sold | 0 |
March 31, 2019 | 1,045,220 |
Rehabilitation Hospital | |
Goodwill | |
December 31, 2018 | 416,646 |
Acquired | 6,964 |
Sold | 0 |
March 31, 2019 | 423,610 |
Outpatient Rehabilitation | |
Goodwill | |
December 31, 2018 | 642,422 |
Acquired | 746 |
Sold | (5,624) |
March 31, 2019 | 637,544 |
Concentra | |
Goodwill | |
December 31, 2018 | 1,216,438 |
Acquired | 937 |
Sold | 0 |
March 31, 2019 | $ 1,217,375 |
Intangible Assets - Carrying Va
Intangible Assets - Carrying Value and Amortization of Identifiable Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Total identifiable intangible assets, gross carrying amount | $ 506,349 | $ 516,392 | |
Finite-lived intangible assets, accumulated amortization | (79,921) | (78,699) | |
Total identifiable intangible assets, net carrying amount | 426,428 | 437,693 | |
Trademarks | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Finite-lived intangible assets, gross carrying amount | 5,000 | 5,000 | |
Finite-lived intangible assets, accumulated amortization | (5,000) | (4,583) | |
Finite-lived intangible assets, net carrying amount | 0 | 417 | |
Customer relationships | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Finite-lived intangible assets, gross carrying amount | 283,090 | 280,710 | |
Finite-lived intangible assets, accumulated amortization | (68,150) | (61,900) | |
Finite-lived intangible assets, net carrying amount | 214,940 | 218,810 | |
Favorable leasehold interests | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Finite-lived intangible assets, gross carrying amount | 0 | 13,553 | |
Finite-lived intangible assets, accumulated amortization | 0 | (6,064) | |
Finite-lived intangible assets, net carrying amount | 0 | 7,489 | |
Non-compete agreements | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Finite-lived intangible assets, gross carrying amount | 30,483 | 29,400 | |
Finite-lived intangible assets, accumulated amortization | (6,771) | (6,152) | |
Finite-lived intangible assets, net carrying amount | 23,712 | 23,248 | |
Customer relationships, non-compete agreements, and trademarks | |||
Amortized intangible assets: | |||
Amortization expense | 7,100 | $ 6,400 | |
Trademarks | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Indefinite-lived intangible assets, carrying amount | $ 166,698 | 166,698 | |
Amortized intangible assets: | |||
Weighted average time until next renewal | 7 years 10 months 24 days | ||
Certificates of need | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Indefinite-lived intangible assets, carrying amount | $ 19,221 | 19,174 | |
Accreditations | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Indefinite-lived intangible assets, carrying amount | $ 1,857 | $ 1,857 | |
Amortized intangible assets: | |||
Weighted average time until next renewal | 1 year 6 months |
Long-Term Debt and Notes Paya_3
Long-Term Debt and Notes Payable - Components of Long-Term Debt And Notes Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Principal Outstanding | $ 3,353,091 | $ 3,338,381 |
Unamortized Premium (Discount) | (11,329) | (11,905) |
Unamortized Issuance Costs | (30,330) | (33,095) |
Carrying Value | 3,311,432 | 3,293,381 |
Fair Value | 3,328,406 | 3,222,705 |
Select Medical Corporation | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 1,965,876 | 1,916,290 |
Unamortized Premium (Discount) | (8,774) | (9,140) |
Unamortized Issuance Costs | (13,453) | (14,447) |
Carrying Value | 1,943,649 | 1,892,703 |
Fair Value | $ 1,947,943 | 1,856,987 |
Select Medical Corporation | Senior notes | 6.375% Senior Notes Due June 2021 | ||
Debt Instrument [Line Items] | ||
Interest rate of debt (as a percent) | 6.375% | |
Principal Outstanding | $ 710,000 | 710,000 |
Unamortized Premium (Discount) | 493 | 550 |
Unamortized Issuance Costs | (4,162) | (4,642) |
Carrying Value | 706,331 | 705,908 |
Fair Value | 711,775 | 706,450 |
Select Medical Corporation | Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 64,808 | 56,415 |
Unamortized Premium (Discount) | 0 | 0 |
Unamortized Issuance Costs | (464) | (484) |
Carrying Value | 64,344 | 55,931 |
Fair Value | 64,344 | 55,931 |
Select Medical Corporation | Revolving facility | Credit facilities | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 160,000 | 20,000 |
Unamortized Premium (Discount) | 0 | 0 |
Unamortized Issuance Costs | 0 | 0 |
Carrying Value | 160,000 | 20,000 |
Fair Value | 147,200 | 18,400 |
Select Medical Corporation | Term loans | Credit facilities | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 1,031,068 | 1,129,875 |
Unamortized Premium (Discount) | (9,267) | (9,690) |
Unamortized Issuance Costs | (8,827) | (9,321) |
Carrying Value | 1,012,974 | 1,110,864 |
Fair Value | 1,024,624 | 1,076,206 |
Concentra Inc | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 1,387,215 | 1,422,091 |
Unamortized Premium (Discount) | (2,555) | (2,765) |
Unamortized Issuance Costs | (16,877) | (18,648) |
Carrying Value | 1,367,783 | 1,400,678 |
Fair Value | 1,380,463 | 1,365,718 |
Concentra Inc | Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 6,918 | 7,916 |
Unamortized Premium (Discount) | 0 | 0 |
Unamortized Issuance Costs | 0 | 0 |
Carrying Value | 6,918 | 7,916 |
Fair Value | 6,918 | 7,916 |
Concentra Inc | Term loans | Credit facilities | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 1,380,297 | 1,414,175 |
Unamortized Premium (Discount) | (2,555) | (2,765) |
Unamortized Issuance Costs | (16,877) | (18,648) |
Carrying Value | 1,360,865 | 1,392,762 |
Fair Value | $ 1,373,545 | $ 1,357,802 |
Long-Term Debt and Notes Paya_4
Long-Term Debt and Notes Payable - Principal Maturities Of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
2019 | $ 10,906 | |
2020 | 27,965 | |
2021 | 712,111 | |
2022 | 1,300,656 | |
2023 | 240,362 | |
Thereafter | 1,061,091 | |
Total | 3,353,091 | $ 3,338,381 |
Select Medical Corporation | ||
Debt Instrument [Line Items] | ||
2019 | 9,262 | |
2020 | 27,211 | |
2021 | 711,781 | |
2022 | 160,000 | |
2023 | 0 | |
Thereafter | 1,057,622 | |
Total | $ 1,965,876 | 1,916,290 |
Select Medical Corporation | Senior notes | 6.375% Senior Notes Due June 2021 | ||
Debt Instrument [Line Items] | ||
Interest rate of debt (as a percent) | 6.375% | |
2019 | $ 0 | |
2020 | 0 | |
2021 | 710,000 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 0 | |
Total | 710,000 | 710,000 |
Select Medical Corporation | Credit facilities | Revolving facility | ||
Debt Instrument [Line Items] | ||
2019 | 0 | |
2020 | 0 | |
2021 | 0 | |
2022 | 160,000 | |
2023 | 0 | |
Thereafter | 0 | |
Total | 160,000 | 20,000 |
Select Medical Corporation | Credit facilities | Term loans | ||
Debt Instrument [Line Items] | ||
2019 | 0 | |
2020 | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 1,031,068 | |
Total | 1,031,068 | 1,129,875 |
Select Medical Corporation | Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
2019 | 9,262 | |
2020 | 27,211 | |
2021 | 1,781 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 26,554 | |
Total | 64,808 | 56,415 |
Concentra Inc | ||
Debt Instrument [Line Items] | ||
2019 | 1,644 | |
2020 | 754 | |
2021 | 330 | |
2022 | 1,140,656 | |
2023 | 240,362 | |
Thereafter | 3,469 | |
Total | 1,387,215 | 1,422,091 |
Concentra Inc | Credit facilities | Term loans | ||
Debt Instrument [Line Items] | ||
2019 | 0 | |
2020 | 0 | |
2021 | 0 | |
2022 | 1,140,298 | |
2023 | 239,999 | |
Thereafter | 0 | |
Total | 1,380,297 | 1,414,175 |
Concentra Inc | Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
2019 | 1,644 | |
2020 | 754 | |
2021 | 330 | |
2022 | 358 | |
2023 | 363 | |
Thereafter | 3,469 | |
Total | $ 6,918 | $ 7,916 |
Long-Term Debt and Notes Paya_5
Long-Term Debt and Notes Payable - Excess Cash Flow Payment (Details) - Credit facilities $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Select Medical Corporation | 2017 Select Credit Facilities | |
Line of Credit Facility [Line Items] | |
Principal prepayment | $ 98.8 |
Concentra Inc | Term loans | |
Line of Credit Facility [Line Items] | |
Principal prepayment | $ 33.9 |
Long-Term Debt and Notes Paya_6
Long-Term Debt and Notes Payable - Fair Value (Details) | Mar. 31, 2019 |
Select Medical Corporation | Senior notes | 6.375% Senior Notes Due June 2021 | |
Debt Instrument [Line Items] | |
Interest rate of debt (as a percent) | 6.375% |
Segment Information - Selected
Segment Information - Selected Financial Data (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Segment information | |||
Net operating revenues | $ 1,324,631 | $ 1,252,964 | |
Adjusted EBITDA | 170,117 | 163,232 | |
Total assets | 7,021,492 | 5,968,643 | $ 5,964,265 |
Purchases of property and equipment, net | 49,073 | 39,617 | |
Critical Illness Recovery Hospital | |||
Segment information | |||
Net operating revenues | 462,159 | 464,676 | |
Rehabilitation Hospital | |||
Segment information | |||
Net operating revenues | 188,954 | 174,774 | |
Outpatient Rehabilitation | |||
Segment information | |||
Net operating revenues | 277,197 | 257,381 | |
Concentra | |||
Segment information | |||
Net operating revenues | 396,321 | 356,116 | |
Operating Segments | Critical Illness Recovery Hospital | |||
Segment information | |||
Net operating revenues | 462,159 | 464,676 | |
Adjusted EBITDA | 72,998 | 72,972 | |
Total assets | 2,062,659 | 1,862,791 | |
Purchases of property and equipment, net | 10,160 | 10,472 | |
Operating Segments | Rehabilitation Hospital | |||
Segment information | |||
Net operating revenues | 188,954 | 174,774 | |
Adjusted EBITDA | 25,797 | 26,776 | |
Total assets | 1,089,391 | 877,750 | |
Purchases of property and equipment, net | 13,183 | 12,917 | |
Operating Segments | Outpatient Rehabilitation | |||
Segment information | |||
Net operating revenues | 277,197 | 257,381 | |
Adjusted EBITDA | 28,991 | 30,525 | |
Total assets | 1,250,015 | 973,122 | |
Purchases of property and equipment, net | 9,040 | 7,338 | |
Operating Segments | Concentra | |||
Segment information | |||
Net operating revenues | 396,321 | 356,116 | |
Adjusted EBITDA | 66,258 | 57,797 | |
Total assets | 2,464,317 | 2,143,405 | |
Purchases of property and equipment, net | 15,698 | 6,621 | |
Other | |||
Segment information | |||
Net operating revenues | 0 | 17 | |
Adjusted EBITDA | (23,927) | (24,838) | |
Total assets | 155,110 | 111,575 | |
Purchases of property and equipment, net | $ 992 | $ 2,269 |
Segment Information - Reconcili
Segment Information - Reconciliation of Adjusted EBITDA to Income Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment information | ||
Adjusted EBITDA | $ 170,117 | $ 163,232 |
Depreciation and amortization | (52,138) | (46,771) |
Income from operations | 111,724 | 108,598 |
Loss on early retirement of debt | 0 | (10,255) |
Equity in earnings of unconsolidated subsidiaries | 4,366 | 4,697 |
Non-operating gain (loss) | 6,532 | 399 |
Interest expense | (50,811) | (47,163) |
Income (loss) before income taxes | 71,811 | 56,276 |
Operating Segments | Critical Illness Recovery Hospital | ||
Segment information | ||
Adjusted EBITDA | 72,998 | 72,972 |
Depreciation and amortization | (11,451) | (11,058) |
Stock compensation expense | 0 | 0 |
U.S. HealthWorks acquisition costs | 0 | |
Income from operations | 61,547 | 61,914 |
Operating Segments | Rehabilitation Hospital | ||
Segment information | ||
Adjusted EBITDA | 25,797 | 26,776 |
Depreciation and amortization | (6,402) | (5,722) |
Stock compensation expense | 0 | 0 |
U.S. HealthWorks acquisition costs | 0 | |
Income from operations | 19,395 | 21,054 |
Operating Segments | Outpatient Rehabilitation | ||
Segment information | ||
Adjusted EBITDA | 28,991 | 30,525 |
Depreciation and amortization | (7,032) | (6,637) |
Stock compensation expense | 0 | 0 |
U.S. HealthWorks acquisition costs | 0 | |
Income from operations | 21,959 | 23,888 |
Operating Segments | Concentra | ||
Segment information | ||
Adjusted EBITDA | 66,258 | 57,797 |
Depreciation and amortization | (24,904) | (21,147) |
Stock compensation expense | (767) | (211) |
U.S. HealthWorks acquisition costs | (2,936) | |
Income from operations | 40,587 | 33,503 |
Other | ||
Segment information | ||
Adjusted EBITDA | (23,927) | (24,838) |
Depreciation and amortization | (2,349) | (2,207) |
Stock compensation expense | (5,488) | (4,716) |
U.S. HealthWorks acquisition costs | 0 | |
Income from operations | $ (31,764) | $ (31,761) |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | $ 1,324,631 | $ 1,252,964 |
Critical Illness Recovery Hospital | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 462,159 | 464,676 |
Critical Illness Recovery Hospital | Patient services revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 455,128 | 460,998 |
Critical Illness Recovery Hospital | Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 238,169 | 240,992 |
Critical Illness Recovery Hospital | Non-Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 216,959 | 220,006 |
Critical Illness Recovery Hospital | Other revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 7,031 | 3,678 |
Rehabilitation Hospital | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 188,954 | 174,774 |
Rehabilitation Hospital | Patient services revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 145,221 | 134,743 |
Rehabilitation Hospital | Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 74,579 | 72,841 |
Rehabilitation Hospital | Non-Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 70,642 | 61,902 |
Rehabilitation Hospital | Other revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 43,733 | 40,031 |
Outpatient Rehabilitation | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 277,197 | 257,381 |
Outpatient Rehabilitation | Patient services revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 228,192 | 227,090 |
Outpatient Rehabilitation | Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 40,278 | 38,190 |
Outpatient Rehabilitation | Non-Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 187,914 | 188,900 |
Outpatient Rehabilitation | Other revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 49,005 | 30,291 |
Concentra | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 396,321 | 356,116 |
Concentra | Patient services revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 393,791 | 353,880 |
Concentra | Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 555 | 628 |
Concentra | Non-Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 393,236 | 353,252 |
Concentra | Other revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | $ 2,530 | $ 2,236 |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Dividends declared and contractual dividends paid, basic (in dollars per share) | $ 0 | $ 0 |
Dividends declared and contractual dividends paid, diluted (in dollars per share) | $ 0 | $ 0 |
Earnings per Share - Net Income
Earnings per Share - Net Income Attributable to the Company, Common Shares Outstanding, and Participating Securities Outstanding (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net income | $ 53,344 | $ 43,982 |
Less: Net income attributable to non-controlling interests | 12,510 | 10,243 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 40,834 | 33,739 |
Basic EPS | ||
Less: net income attributable to participating securities | 1,343 | 1,111 |
Net income attributable to common shares | 39,491 | 32,628 |
Diluted EPS | ||
Less: net income attributable to participating securities | 1,343 | 1,110 |
Net income attributable to common shares | $ 39,491 | $ 32,629 |
Earnings per Share - Computatio
Earnings per Share - Computation of EPS Under the Two-Class Method (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net Income Allocation, Basic [Abstract] | ||
Net income allocated to common shares | $ 39,491 | $ 32,628 |
Net income allocated to participating securities | 1,343 | 1,111 |
Net Income Allocation, Diluted [Abstract] | ||
Net income allocated to common shares | 39,491 | 32,629 |
Net income allocated to participating securities | 1,343 | 1,110 |
Net income attributable to the Company | $ 40,834 | $ 33,739 |
Weighted average common shares outstanding, basic (in shares) | 130,821 | 129,691 |
Weighted average common shares outstanding, diluted (in shares) | 130,861 | 129,816 |
Weighted average participating securities outstanding (in shares) | 4,449 | 4,416 |
Basic EPS | ||
Basic EPS (in dollars per share) | $ 0.30 | $ 0.25 |
Diluted EPS | ||
Diluted EPS (in dollars per share) | $ 0.30 | $ 0.25 |
Commitments and Contingencies -
Commitments and Contingencies - Litigation (Details) $ in Millions | Oct. 19, 2015case_manager | Mar. 31, 2019USD ($) |
Amended complaint | SSH-Evansville | ||
Commitments and Contingencies | ||
Number of case managers identified as plaintiff | case_manager | 2 | |
Professional liability claims | Minimum | Joint Venture Operations | ||
Commitments and Contingencies | ||
Total annual aggregate limit of insurance coverage | $ 5 | |
Professional liability claims | Maximum | ||
Commitments and Contingencies | ||
Total annual aggregate limit of insurance coverage | 40 | |
Professional liability claims | Maximum | Joint Venture Operations | ||
Commitments and Contingencies | ||
Total annual aggregate limit of insurance coverage | $ 20 |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Information - Narrative (Details) | Mar. 31, 2019 |
Senior notes | Subsidiary Guarantors | |
Debt Instrument [Line Items] | |
Interest rate of debt (as a percent) | 6.375% |
Condensed Consolidating Finan_4
Condensed Consolidating Financial Information - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||||
Cash and cash equivalents | $ 147,815 | $ 175,178 | $ 119,683 | $ 122,549 |
Accounts receivable | 779,861 | 706,676 | ||
Prepaid income taxes | 7,709 | 20,539 | ||
Other current assets | 117,500 | 90,131 | ||
Total Current Assets | 1,052,885 | 992,524 | ||
Operating lease right-of-use assets | 982,616 | |||
Property and equipment, net | 972,807 | 979,810 | ||
Goodwill | 3,323,749 | 3,320,726 | ||
Identifiable intangible assets, net | 426,428 | 437,693 | ||
Other assets | 263,007 | 233,512 | ||
Total Assets | 7,021,492 | 5,964,265 | 5,968,643 | |
Current Liabilities: | ||||
Overdrafts | 31,133 | 25,083 | ||
Current operating lease liabilities | 205,145 | |||
Current portion of long-term debt and notes payable | 12,329 | 43,865 | ||
Accounts payable | 140,581 | 146,693 | ||
Accrued payroll | 142,289 | 172,386 | ||
Accrued vacation | 116,675 | 110,660 | ||
Accrued interest | 22,593 | 12,137 | ||
Accrued other | 205,535 | 190,691 | ||
Income taxes payable | 8,657 | 3,671 | ||
Total Current Liabilities | 884,937 | 705,186 | ||
Non-current operating lease liabilities | 820,007 | |||
Long-term debt, net of current portion | 3,299,103 | 3,249,516 | ||
Non-current deferred tax liability | 153,863 | 153,895 | ||
Other non-current liabilities | 105,791 | 158,940 | ||
Total Liabilities | 5,263,701 | 4,267,537 | ||
Redeemable non-controlling interests | 833,241 | 780,488 | 607,474 | 640,818 |
Stockholders’ Equity: | ||||
Common stock | 135 | 135 | ||
Capital in excess of par | 488,303 | 482,556 | ||
Retained earnings (accumulated deficit) | 313,593 | 320,351 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 802,031 | 803,042 | ||
Non-controlling interests | 122,519 | 113,198 | ||
Total Equity | 924,550 | 916,240 | 965,277 | 932,604 |
Total Liabilities and Equity | 7,021,492 | 5,964,265 | ||
Consolidating and Eliminating Adjustments | ||||
Current Assets: | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable | 0 | 0 | ||
Intercompany receivables | (1,814,874) | (1,870,414) | ||
Prepaid income taxes | (655) | 0 | ||
Other current assets | 0 | 0 | ||
Total Current Assets | (1,815,529) | (1,870,414) | ||
Operating lease right-of-use assets | (306,220) | |||
Property and equipment, net | 0 | 0 | ||
Investment in affiliates | (4,629,736) | (4,624,203) | ||
Goodwill | 0 | 0 | ||
Identifiable intangible assets, net | 0 | 0 | ||
Other assets | (34,674) | (8,685) | ||
Total Assets | (6,786,159) | (6,503,302) | ||
Current Liabilities: | ||||
Overdrafts | 0 | 0 | ||
Current operating lease liabilities | (10,972) | |||
Current portion of long-term debt and notes payable | 0 | 0 | ||
Accounts payable | 0 | 0 | ||
Intercompany payables | (1,814,874) | (1,870,414) | ||
Accrued payroll | 0 | 0 | ||
Accrued vacation | 0 | 0 | ||
Accrued interest | 0 | 0 | ||
Accrued other | 0 | 0 | ||
Income taxes payable | (655) | 0 | ||
Total Current Liabilities | (1,826,501) | (1,870,414) | ||
Non-current operating lease liabilities | (295,811) | |||
Long-term debt, net of current portion | 0 | 0 | ||
Non-current deferred tax liability | (8,910) | (8,685) | ||
Other non-current liabilities | (25,201) | 0 | ||
Total Liabilities | (2,156,423) | (1,879,099) | ||
Redeemable non-controlling interests | 815,958 | 761,963 | ||
Stockholders’ Equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par | 0 | 0 | ||
Retained earnings (accumulated deficit) | (1,572,723) | (1,529,820) | ||
Subsidiary investment | (3,990,099) | (3,964,000) | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | (5,562,822) | (5,493,820) | ||
Non-controlling interests | 117,128 | 107,654 | ||
Total Equity | (5,445,694) | (5,386,166) | ||
Total Liabilities and Equity | (6,786,159) | (6,503,302) | ||
Select (Parent Company Only) | Reportable Legal Entities | ||||
Current Assets: | ||||
Cash and cash equivalents | 78 | 77 | 73 | 73 |
Accounts receivable | 0 | 0 | ||
Intercompany receivables | 0 | 0 | ||
Prepaid income taxes | 399 | 10,205 | ||
Other current assets | 30,152 | 17,866 | ||
Total Current Assets | 30,629 | 28,148 | ||
Operating lease right-of-use assets | 34,992 | |||
Property and equipment, net | 28,774 | 30,103 | ||
Investment in affiliates | 4,491,439 | 4,497,167 | ||
Goodwill | 0 | 0 | ||
Identifiable intangible assets, net | 3 | 3 | ||
Other assets | 36,974 | 37,281 | ||
Total Assets | 4,622,811 | 4,592,702 | ||
Current Liabilities: | ||||
Overdrafts | 31,133 | 25,083 | ||
Current operating lease liabilities | 6,298 | |||
Current portion of long-term debt and notes payable | 8,656 | 4,363 | ||
Accounts payable | 12,198 | 14,033 | ||
Intercompany payables | 1,723,869 | 1,787,184 | ||
Accrued payroll | 4,080 | 15,533 | ||
Accrued vacation | 4,855 | 4,613 | ||
Accrued interest | 16,915 | 5,996 | ||
Accrued other | 65,968 | 60,056 | ||
Income taxes payable | 0 | 0 | ||
Total Current Liabilities | 1,873,972 | 1,916,861 | ||
Non-current operating lease liabilities | 31,902 | |||
Long-term debt, net of current portion | 1,882,471 | 1,837,241 | ||
Non-current deferred tax liability | 0 | 0 | ||
Other non-current liabilities | 32,435 | 35,558 | ||
Total Liabilities | 3,820,780 | 3,789,660 | ||
Redeemable non-controlling interests | 0 | 0 | ||
Stockholders’ Equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par | 975,903 | 970,156 | ||
Retained earnings (accumulated deficit) | (173,872) | (167,114) | ||
Subsidiary investment | 0 | 0 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 802,031 | 803,042 | ||
Non-controlling interests | 0 | 0 | ||
Total Equity | 802,031 | 803,042 | ||
Total Liabilities and Equity | 4,622,811 | 4,592,702 | ||
Subsidiary Guarantors | Reportable Legal Entities | ||||
Current Assets: | ||||
Cash and cash equivalents | 7,454 | 7,574 | 5,502 | 4,856 |
Accounts receivable | 444,580 | 397,674 | ||
Intercompany receivables | 1,723,869 | 1,787,184 | ||
Prepaid income taxes | 5,132 | 5,711 | ||
Other current assets | 33,973 | 31,181 | ||
Total Current Assets | 2,215,008 | 2,229,324 | ||
Operating lease right-of-use assets | 451,905 | |||
Property and equipment, net | 622,323 | 625,947 | ||
Investment in affiliates | 138,297 | 127,036 | ||
Goodwill | 2,106,374 | 2,104,288 | ||
Identifiable intangible assets, net | 99,884 | 102,120 | ||
Other assets | 208,431 | 145,467 | ||
Total Assets | 5,842,222 | 5,334,182 | ||
Current Liabilities: | ||||
Overdrafts | 0 | 0 | ||
Current operating lease liabilities | 105,809 | |||
Current portion of long-term debt and notes payable | 498 | 248 | ||
Accounts payable | 77,245 | 84,343 | ||
Intercompany payables | 91,005 | 83,230 | ||
Accrued payroll | 87,957 | 99,803 | ||
Accrued vacation | 64,878 | 60,989 | ||
Accrued interest | 26 | 22 | ||
Accrued other | 60,930 | 61,226 | ||
Income taxes payable | 4,197 | 2,366 | ||
Total Current Liabilities | 492,545 | 392,227 | ||
Non-current operating lease liabilities | 370,579 | |||
Long-term debt, net of current portion | 37 | 448 | ||
Non-current deferred tax liability | 103,314 | 101,214 | ||
Other non-current liabilities | 60,464 | 59,901 | ||
Total Liabilities | 1,026,939 | 553,790 | ||
Redeemable non-controlling interests | 0 | 0 | ||
Stockholders’ Equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par | 0 | 0 | ||
Retained earnings (accumulated deficit) | 1,575,968 | 1,547,018 | ||
Subsidiary investment | 3,239,315 | 3,233,374 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 4,815,283 | 4,780,392 | ||
Non-controlling interests | 0 | 0 | ||
Total Equity | 4,815,283 | 4,780,392 | ||
Total Liabilities and Equity | 5,842,222 | 5,334,182 | ||
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Current Assets: | ||||
Cash and cash equivalents | 3,353 | 4,411 | 3,749 | 4,561 |
Accounts receivable | 132,312 | 118,683 | ||
Intercompany receivables | 91,005 | 83,230 | ||
Prepaid income taxes | 0 | 0 | ||
Other current assets | 10,025 | 14,048 | ||
Total Current Assets | 236,695 | 220,372 | ||
Operating lease right-of-use assets | 496,144 | |||
Property and equipment, net | 107,147 | 103,006 | ||
Investment in affiliates | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Identifiable intangible assets, net | 5,108 | 5,020 | ||
Other assets | 33,207 | 33,417 | ||
Total Assets | 878,301 | 361,815 | ||
Current Liabilities: | ||||
Overdrafts | 0 | 0 | ||
Current operating lease liabilities | 36,663 | |||
Current portion of long-term debt and notes payable | 896 | 2,001 | ||
Accounts payable | 23,396 | 20,956 | ||
Intercompany payables | 0 | 0 | ||
Accrued payroll | 2,744 | 5,936 | ||
Accrued vacation | 14,953 | 13,942 | ||
Accrued interest | 4 | 3 | ||
Accrued other | 15,355 | 17,098 | ||
Income taxes payable | 170 | 190 | ||
Total Current Liabilities | 94,181 | 60,126 | ||
Non-current operating lease liabilities | 465,664 | |||
Long-term debt, net of current portion | 51,091 | 48,402 | ||
Non-current deferred tax liability | 1,329 | 994 | ||
Other non-current liabilities | 2,959 | 9,194 | ||
Total Liabilities | 615,224 | 118,716 | ||
Redeemable non-controlling interests | 0 | 0 | ||
Stockholders’ Equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par | 0 | 0 | ||
Retained earnings (accumulated deficit) | (28,082) | (29,553) | ||
Subsidiary investment | 291,159 | 272,652 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 263,077 | 243,099 | ||
Non-controlling interests | 0 | 0 | ||
Total Equity | 263,077 | 243,099 | ||
Total Liabilities and Equity | 878,301 | 361,815 | ||
Select Medical Corporation | ||||
Current Assets: | ||||
Cash and cash equivalents | 147,815 | 175,178 | 119,683 | 122,549 |
Accounts receivable | 779,861 | 706,676 | ||
Intercompany receivables | 0 | 0 | ||
Prepaid income taxes | 7,709 | 20,539 | ||
Other current assets | 117,500 | 90,131 | ||
Total Current Assets | 1,052,885 | 992,524 | ||
Operating lease right-of-use assets | 982,616 | |||
Property and equipment, net | 972,807 | 979,810 | ||
Investment in affiliates | 0 | 0 | ||
Goodwill | 3,323,749 | 3,320,726 | ||
Identifiable intangible assets, net | 426,428 | 437,693 | ||
Other assets | 263,007 | 233,512 | ||
Total Assets | 7,021,492 | 5,964,265 | ||
Current Liabilities: | ||||
Overdrafts | 31,133 | 25,083 | ||
Current operating lease liabilities | 205,145 | |||
Current portion of long-term debt and notes payable | 12,329 | 43,865 | ||
Accounts payable | 140,581 | 146,693 | ||
Intercompany payables | 0 | 0 | ||
Accrued payroll | 142,289 | 172,386 | ||
Accrued vacation | 116,675 | 110,660 | ||
Accrued interest | 22,593 | 12,137 | ||
Accrued other | 205,535 | 190,691 | ||
Income taxes payable | 8,657 | 3,671 | ||
Total Current Liabilities | 884,937 | 705,186 | ||
Non-current operating lease liabilities | 820,007 | |||
Long-term debt, net of current portion | 3,299,103 | 3,249,516 | ||
Non-current deferred tax liability | 153,863 | 153,895 | ||
Other non-current liabilities | 105,791 | 158,940 | ||
Total Liabilities | 5,263,701 | 4,267,537 | ||
Redeemable non-controlling interests | 833,241 | 780,488 | ||
Stockholders’ Equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par | 975,903 | 970,156 | ||
Retained earnings (accumulated deficit) | (173,872) | (167,114) | ||
Subsidiary investment | 0 | 0 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 802,031 | 803,042 | ||
Non-controlling interests | 122,519 | 113,198 | ||
Total Equity | 924,550 | 916,240 | 965,277 | 932,604 |
Total Liabilities and Equity | 7,021,492 | 5,964,265 | ||
Concentra Group Holdings Parent, LLC | Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Current Assets: | ||||
Cash and cash equivalents | 136,930 | 163,116 | $ 110,359 | $ 113,059 |
Accounts receivable | 202,969 | 190,319 | ||
Intercompany receivables | 0 | 0 | ||
Prepaid income taxes | 2,833 | 4,623 | ||
Other current assets | 43,350 | 27,036 | ||
Total Current Assets | 386,082 | 385,094 | ||
Operating lease right-of-use assets | 305,795 | |||
Property and equipment, net | 214,563 | 220,754 | ||
Investment in affiliates | 0 | 0 | ||
Goodwill | 1,217,375 | 1,216,438 | ||
Identifiable intangible assets, net | 321,433 | 330,550 | ||
Other assets | 19,069 | 26,032 | ||
Total Assets | 2,464,317 | 2,178,868 | ||
Current Liabilities: | ||||
Overdrafts | 0 | 0 | ||
Current operating lease liabilities | 67,347 | |||
Current portion of long-term debt and notes payable | 2,279 | 37,253 | ||
Accounts payable | 27,742 | 27,361 | ||
Intercompany payables | 0 | 0 | ||
Accrued payroll | 47,508 | 51,114 | ||
Accrued vacation | 31,989 | 31,116 | ||
Accrued interest | 5,648 | 6,116 | ||
Accrued other | 63,282 | 52,311 | ||
Income taxes payable | 4,945 | 1,115 | ||
Total Current Liabilities | 250,740 | 206,386 | ||
Non-current operating lease liabilities | 247,673 | |||
Long-term debt, net of current portion | 1,365,504 | 1,363,425 | ||
Non-current deferred tax liability | 58,130 | 60,372 | ||
Other non-current liabilities | 35,134 | 54,287 | ||
Total Liabilities | 1,957,181 | 1,684,470 | ||
Redeemable non-controlling interests | 17,283 | 18,525 | ||
Stockholders’ Equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par | 0 | 0 | ||
Retained earnings (accumulated deficit) | 24,837 | 12,355 | ||
Subsidiary investment | 459,625 | 457,974 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 484,462 | 470,329 | ||
Non-controlling interests | 5,391 | 5,544 | ||
Total Equity | 489,853 | 475,873 | ||
Total Liabilities and Equity | $ 2,464,317 | $ 2,178,868 |
Condensed Consolidating Finan_5
Condensed Consolidating Financial Information - Condensed Consolidating Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Financial Statements, Captions [Line Items] | ||
Net operating revenues | $ 1,324,631 | $ 1,252,964 |
Costs and expenses: | ||
Cost of services, exclusive of depreciation and amortization | 1,132,092 | 1,065,813 |
General and administrative | 28,677 | 31,782 |
Depreciation and amortization | 52,138 | 46,771 |
Total costs and expenses | 1,212,907 | 1,144,366 |
Income from operations | 111,724 | 108,598 |
Other income and expense: | ||
Loss on early retirement of debt | 0 | (10,255) |
Equity in earnings of unconsolidated subsidiaries | 4,366 | 4,697 |
Non-operating gain (loss) | 6,532 | 399 |
Interest expense | (50,811) | (47,163) |
Income (loss) before income taxes | 71,811 | 56,276 |
Income tax expense (benefit) | 18,467 | 12,294 |
Net income | 53,344 | 43,982 |
Less: Net income attributable to non-controlling interests | 12,510 | 10,243 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 40,834 | 33,739 |
Consolidating and Eliminating Adjustments | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net operating revenues | 0 | 0 |
Costs and expenses: | ||
Cost of services, exclusive of depreciation and amortization | 0 | 0 |
General and administrative | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Total costs and expenses | 0 | 0 |
Income from operations | 0 | 0 |
Other income and expense: | ||
Intercompany interest and royalty fees | 0 | 0 |
Intercompany management fees | 0 | 0 |
Loss on early retirement of debt | 0 | |
Equity in earnings of unconsolidated subsidiaries | 0 | 0 |
Non-operating gain (loss) | 0 | 0 |
Interest expense | 0 | 0 |
Income (loss) before income taxes | 0 | 0 |
Income tax expense (benefit) | 0 | 0 |
Equity in earnings of consolidated subsidiaries | (42,389) | (38,708) |
Net income | (42,389) | (38,708) |
Less: Net income attributable to non-controlling interests | 0 | 0 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | (42,389) | (38,708) |
Select (Parent Company Only) | Reportable Legal Entities | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net operating revenues | 0 | 17 |
Costs and expenses: | ||
Cost of services, exclusive of depreciation and amortization | 739 | 726 |
General and administrative | 28,697 | 28,807 |
Depreciation and amortization | 2,231 | 2,207 |
Total costs and expenses | 31,667 | 31,740 |
Income from operations | (31,667) | (31,723) |
Other income and expense: | ||
Intercompany interest and royalty fees | 4,108 | 8,119 |
Intercompany management fees | 61,472 | 60,732 |
Loss on early retirement of debt | (2,229) | |
Equity in earnings of unconsolidated subsidiaries | 0 | 0 |
Non-operating gain (loss) | 0 | 0 |
Interest expense | (28,200) | (31,071) |
Income (loss) before income taxes | 5,713 | 3,828 |
Income tax expense (benefit) | 57 | 514 |
Equity in earnings of consolidated subsidiaries | 35,178 | 30,425 |
Net income | 40,834 | 33,739 |
Less: Net income attributable to non-controlling interests | 0 | 0 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 40,834 | 33,739 |
Subsidiary Guarantors | Reportable Legal Entities | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net operating revenues | 719,830 | 706,412 |
Costs and expenses: | ||
Cost of services, exclusive of depreciation and amortization | 624,475 | 608,026 |
General and administrative | (20) | 39 |
Depreciation and amortization | 20,534 | 19,447 |
Total costs and expenses | 644,989 | 627,512 |
Income from operations | 74,841 | 78,900 |
Other income and expense: | ||
Intercompany interest and royalty fees | (1,102) | (4,295) |
Intercompany management fees | (48,770) | (49,540) |
Loss on early retirement of debt | 0 | |
Equity in earnings of unconsolidated subsidiaries | 4,343 | 4,684 |
Non-operating gain (loss) | 6,532 | 399 |
Interest expense | 120 | (67) |
Income (loss) before income taxes | 35,964 | 30,081 |
Income tax expense (benefit) | 14,225 | 11,935 |
Equity in earnings of consolidated subsidiaries | 7,211 | 8,283 |
Net income | 28,950 | 26,429 |
Less: Net income attributable to non-controlling interests | 0 | 85 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 28,950 | 26,344 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net operating revenues | 208,480 | 190,419 |
Costs and expenses: | ||
Cost of services, exclusive of depreciation and amortization | 176,048 | 158,531 |
General and administrative | 0 | 0 |
Depreciation and amortization | 4,469 | 3,970 |
Total costs and expenses | 180,517 | 162,501 |
Income from operations | 27,963 | 27,918 |
Other income and expense: | ||
Intercompany interest and royalty fees | (2,643) | (3,631) |
Intercompany management fees | (12,702) | (11,192) |
Loss on early retirement of debt | 0 | |
Equity in earnings of unconsolidated subsidiaries | 23 | 13 |
Non-operating gain (loss) | 0 | 0 |
Interest expense | (221) | (151) |
Income (loss) before income taxes | 12,420 | 12,957 |
Income tax expense (benefit) | 407 | 93 |
Equity in earnings of consolidated subsidiaries | 0 | 0 |
Net income | 12,013 | 12,864 |
Less: Net income attributable to non-controlling interests | 4,802 | 4,581 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 7,211 | 8,283 |
Select Medical Corporation | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net operating revenues | 1,324,631 | 1,252,964 |
Costs and expenses: | ||
Cost of services, exclusive of depreciation and amortization | 1,132,092 | 1,065,813 |
General and administrative | 28,677 | 31,782 |
Depreciation and amortization | 52,138 | 46,771 |
Total costs and expenses | 1,212,907 | 1,144,366 |
Income from operations | 111,724 | 108,598 |
Other income and expense: | ||
Intercompany interest and royalty fees | 0 | 0 |
Intercompany management fees | 0 | 0 |
Loss on early retirement of debt | 0 | (10,255) |
Equity in earnings of unconsolidated subsidiaries | 4,366 | 4,697 |
Non-operating gain (loss) | 6,532 | 399 |
Interest expense | (50,811) | (47,163) |
Income (loss) before income taxes | 71,811 | 56,276 |
Income tax expense (benefit) | 18,467 | 12,294 |
Equity in earnings of consolidated subsidiaries | 0 | 0 |
Net income | 53,344 | 43,982 |
Less: Net income attributable to non-controlling interests | 12,510 | 10,243 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 40,834 | 33,739 |
Concentra Group Holdings Parent, LLC | Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net operating revenues | 396,321 | 356,116 |
Costs and expenses: | ||
Cost of services, exclusive of depreciation and amortization | 330,830 | 298,530 |
General and administrative | 0 | 2,936 |
Depreciation and amortization | 24,904 | 21,147 |
Total costs and expenses | 355,734 | 322,613 |
Income from operations | 40,587 | 33,503 |
Other income and expense: | ||
Intercompany interest and royalty fees | (363) | (193) |
Intercompany management fees | 0 | 0 |
Loss on early retirement of debt | (8,026) | |
Equity in earnings of unconsolidated subsidiaries | 0 | 0 |
Non-operating gain (loss) | 0 | 0 |
Interest expense | (22,510) | (15,874) |
Income (loss) before income taxes | 17,714 | 9,410 |
Income tax expense (benefit) | 3,778 | (248) |
Equity in earnings of consolidated subsidiaries | 0 | 0 |
Net income | 13,936 | 9,658 |
Less: Net income attributable to non-controlling interests | 7,708 | 5,577 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | $ 6,228 | $ 4,081 |
Condensed Consolidating Finan_6
Condensed Consolidating Financial Information - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities | ||
Net income | $ 53,344 | $ 43,982 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 7,872 | 1,364 |
Depreciation and amortization | 52,138 | 46,771 |
Provision for bad debts | 1,567 | 85 |
Equity in earnings of unconsolidated subsidiaries | (4,366) | (4,697) |
Loss on extinguishment of debt | 0 | 412 |
Loss (gain) on sale of assets and businesses | (6,233) | (513) |
Stock compensation expense | 6,255 | 4,927 |
Amortization of debt discount, premium and issuance costs | 3,231 | 3,136 |
Deferred income taxes | (81) | 78 |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | (74,752) | (45,811) |
Other current assets | (7,523) | (8,945) |
Other assets | 57,319 | 16,633 |
Accounts payable | 4,324 | (6,552) |
Accrued expenses | (69,163) | (11,981) |
Income taxes | 17,830 | 11,838 |
Net cash provided by operating activities | 41,762 | 50,727 |
Investing activities | ||
Business combinations, net of cash acquired | (6,120) | (515,359) |
Purchases of property and equipment | (49,073) | (39,617) |
Investment in businesses | (27,608) | (1,754) |
Proceeds from sale of assets and businesses | 2 | 691 |
Net cash used in investing activities | (82,799) | (556,039) |
Financing activities | ||
Borrowings on revolving facilities | 360,000 | 165,000 |
Payments on revolving facilities | (220,000) | (150,000) |
Proceeds from term loans (financing costs) | 0 | 779,904 |
Payments on term loans | (132,685) | (2,875) |
Revolving facility debt issuance costs | 0 | (1,333) |
Borrowings of other debt | 8,290 | 11,600 |
Principal payments on other debt | (6,155) | (5,909) |
Dividends paid to Holdings | 0 | 0 |
Equity investment by Holdings | 0 | 0 |
Increase (decrease) in overdrafts | 6,050 | (7,916) |
Proceeds from issuance of non-controlling interests | 3,425 | 0 |
Distributions to and purchases of non-controlling interests | (5,251) | (286,641) |
Net cash provided by (used in) financing activities | 13,674 | 502,446 |
Net increase (decrease) in cash and cash equivalents | (27,363) | (2,866) |
Cash and cash equivalents at beginning of period | 175,178 | 122,549 |
Cash and cash equivalents at end of period | 147,815 | 119,683 |
Consolidating and Eliminating Adjustments | ||
Operating activities | ||
Net income | (42,389) | (38,708) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Provision for bad debts | 0 | 0 |
Equity in earnings of unconsolidated subsidiaries | 0 | 0 |
Equity in earnings of consolidated subsidiaries | 42,389 | 38,708 |
Loss on extinguishment of debt | 0 | |
Loss (gain) on sale of assets and businesses | 0 | 0 |
Stock compensation expense | 0 | 0 |
Amortization of debt discount, premium and issuance costs | 0 | 0 |
Deferred income taxes | 0 | 0 |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | 0 | 0 |
Other current assets | 0 | 0 |
Other assets | (3,968) | 0 |
Accounts payable | 0 | 0 |
Accrued expenses | 3,268 | 0 |
Income taxes | 0 | 0 |
Net cash provided by operating activities | (700) | 0 |
Investing activities | ||
Business combinations, net of cash acquired | 0 | 0 |
Purchases of property and equipment | 0 | 0 |
Investment in businesses | 0 | 0 |
Proceeds from sale of assets and businesses | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
Financing activities | ||
Borrowings on revolving facilities | 0 | 0 |
Payments on revolving facilities | 0 | 0 |
Proceeds from term loans (financing costs) | 0 | |
Payments on term loans | 0 | 0 |
Revolving facility debt issuance costs | 0 | |
Borrowings of other debt | 0 | 0 |
Principal payments on other debt | 0 | 0 |
Dividends paid to Holdings | 0 | |
Equity investment by Holdings | 0 | |
Intercompany | 700 | 0 |
Increase (decrease) in overdrafts | 0 | 0 |
Proceeds from issuance of non-controlling interests | 0 | |
Distributions to and purchases of non-controlling interests | 0 | 0 |
Net cash provided by (used in) financing activities | 700 | 0 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
Select (Parent Company Only) | Reportable Legal Entities | ||
Operating activities | ||
Net income | 40,834 | 33,739 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 0 | 0 |
Depreciation and amortization | 2,231 | 2,207 |
Provision for bad debts | 0 | 0 |
Equity in earnings of unconsolidated subsidiaries | 0 | 0 |
Equity in earnings of consolidated subsidiaries | (35,178) | (30,425) |
Loss on extinguishment of debt | 115 | |
Loss (gain) on sale of assets and businesses | 300 | 0 |
Stock compensation expense | 5,488 | 4,716 |
Amortization of debt discount, premium and issuance costs | 1,286 | 1,837 |
Deferred income taxes | (364) | (503) |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | 0 | 0 |
Other current assets | (7,386) | (5,890) |
Other assets | 1,674 | 3,788 |
Accounts payable | (1,785) | 731 |
Accrued expenses | (480) | (10,370) |
Income taxes | 9,819 | 6,897 |
Net cash provided by operating activities | 16,439 | 6,842 |
Investing activities | ||
Business combinations, net of cash acquired | 0 | 0 |
Purchases of property and equipment | (953) | (2,269) |
Investment in businesses | 0 | 0 |
Proceeds from sale of assets and businesses | 0 | 0 |
Net cash used in investing activities | (953) | (2,269) |
Financing activities | ||
Borrowings on revolving facilities | 360,000 | 165,000 |
Payments on revolving facilities | (220,000) | (150,000) |
Proceeds from term loans (financing costs) | (11) | |
Payments on term loans | (98,807) | (2,875) |
Revolving facility debt issuance costs | (837) | |
Borrowings of other debt | 5,612 | 5,549 |
Principal payments on other debt | (3,140) | (3,226) |
Dividends paid to Holdings | (122) | |
Equity investment by Holdings | 738 | |
Intercompany | (65,200) | (10,873) |
Increase (decrease) in overdrafts | 6,050 | (7,916) |
Proceeds from issuance of non-controlling interests | 0 | |
Distributions to and purchases of non-controlling interests | 0 | 0 |
Net cash provided by (used in) financing activities | (15,485) | (4,573) |
Net increase (decrease) in cash and cash equivalents | 1 | 0 |
Cash and cash equivalents at beginning of period | 77 | 73 |
Cash and cash equivalents at end of period | 78 | 73 |
Subsidiary Guarantors | Reportable Legal Entities | ||
Operating activities | ||
Net income | 28,950 | 26,429 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 7,865 | 1,334 |
Depreciation and amortization | 20,534 | 19,447 |
Provision for bad debts | 21 | 42 |
Equity in earnings of unconsolidated subsidiaries | (4,343) | (4,684) |
Equity in earnings of consolidated subsidiaries | (7,211) | (8,283) |
Loss on extinguishment of debt | 0 | |
Loss (gain) on sale of assets and businesses | (6,533) | (516) |
Stock compensation expense | 0 | 0 |
Amortization of debt discount, premium and issuance costs | 0 | 0 |
Deferred income taxes | 2,190 | 1,383 |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | (46,927) | (28,475) |
Other current assets | (1,991) | (569) |
Other assets | 28,412 | (562) |
Accounts payable | 926 | (3,435) |
Accrued expenses | (34,475) | (2,667) |
Income taxes | 2,410 | 4,513 |
Net cash provided by operating activities | (10,172) | 3,957 |
Investing activities | ||
Business combinations, net of cash acquired | (3,905) | (321) |
Purchases of property and equipment | (23,309) | (23,912) |
Investment in businesses | (27,608) | (1,749) |
Proceeds from sale of assets and businesses | 2 | 691 |
Net cash used in investing activities | (54,820) | (25,291) |
Financing activities | ||
Borrowings on revolving facilities | 0 | 0 |
Payments on revolving facilities | 0 | 0 |
Proceeds from term loans (financing costs) | 0 | |
Payments on term loans | 0 | 0 |
Revolving facility debt issuance costs | 0 | |
Borrowings of other debt | 0 | 0 |
Principal payments on other debt | (161) | (145) |
Dividends paid to Holdings | 0 | |
Equity investment by Holdings | 0 | |
Intercompany | 67,956 | 22,125 |
Increase (decrease) in overdrafts | 0 | 0 |
Proceeds from issuance of non-controlling interests | 0 | |
Distributions to and purchases of non-controlling interests | (2,923) | 0 |
Net cash provided by (used in) financing activities | 64,872 | 21,980 |
Net increase (decrease) in cash and cash equivalents | (120) | 646 |
Cash and cash equivalents at beginning of period | 7,574 | 4,856 |
Cash and cash equivalents at end of period | 7,454 | 5,502 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Operating activities | ||
Net income | 12,013 | 12,864 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 7 | 30 |
Depreciation and amortization | 4,469 | 3,970 |
Provision for bad debts | 1,532 | 0 |
Equity in earnings of unconsolidated subsidiaries | (23) | (13) |
Equity in earnings of consolidated subsidiaries | 0 | 0 |
Loss on extinguishment of debt | 0 | |
Loss (gain) on sale of assets and businesses | 0 | 0 |
Stock compensation expense | 0 | 0 |
Amortization of debt discount, premium and issuance costs | 0 | 0 |
Deferred income taxes | 335 | (5) |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | (15,161) | (13,600) |
Other current assets | 2,219 | 1,301 |
Other assets | 13,292 | 599 |
Accounts payable | 2,745 | (985) |
Accrued expenses | (14,477) | 735 |
Income taxes | (20) | (111) |
Net cash provided by operating activities | 6,931 | 4,785 |
Investing activities | ||
Business combinations, net of cash acquired | (410) | (22) |
Purchases of property and equipment | (9,113) | (6,815) |
Investment in businesses | 0 | 0 |
Proceeds from sale of assets and businesses | 0 | 0 |
Net cash used in investing activities | (9,523) | (6,837) |
Financing activities | ||
Borrowings on revolving facilities | 0 | 0 |
Payments on revolving facilities | 0 | 0 |
Proceeds from term loans (financing costs) | 0 | |
Payments on term loans | 0 | 0 |
Revolving facility debt issuance costs | 0 | |
Borrowings of other debt | 2,678 | 5,326 |
Principal payments on other debt | (1,113) | (957) |
Dividends paid to Holdings | 0 | |
Equity investment by Holdings | 0 | |
Intercompany | (3,456) | (1,863) |
Increase (decrease) in overdrafts | 0 | 0 |
Proceeds from issuance of non-controlling interests | 3,425 | |
Distributions to and purchases of non-controlling interests | 0 | (1,266) |
Net cash provided by (used in) financing activities | 1,534 | 1,240 |
Net increase (decrease) in cash and cash equivalents | (1,058) | (812) |
Cash and cash equivalents at beginning of period | 4,411 | 4,561 |
Cash and cash equivalents at end of period | 3,353 | 3,749 |
Select Medical Corporation | ||
Operating activities | ||
Net income | 53,344 | 43,982 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 7,872 | 1,364 |
Depreciation and amortization | 52,138 | 46,771 |
Provision for bad debts | 1,567 | 85 |
Equity in earnings of unconsolidated subsidiaries | (4,366) | (4,697) |
Equity in earnings of consolidated subsidiaries | 0 | 0 |
Loss on extinguishment of debt | 0 | 412 |
Loss (gain) on sale of assets and businesses | (6,233) | (513) |
Stock compensation expense | 6,255 | 4,927 |
Amortization of debt discount, premium and issuance costs | 3,231 | 3,136 |
Deferred income taxes | (81) | 78 |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | (74,752) | (45,811) |
Other current assets | (7,523) | (8,945) |
Other assets | 57,319 | 16,633 |
Accounts payable | 4,324 | (6,552) |
Accrued expenses | (69,163) | (11,981) |
Income taxes | 17,830 | 11,838 |
Net cash provided by operating activities | 41,762 | 50,727 |
Investing activities | ||
Business combinations, net of cash acquired | (6,120) | (515,359) |
Purchases of property and equipment | (49,073) | (39,617) |
Investment in businesses | (27,608) | (1,754) |
Proceeds from sale of assets and businesses | 2 | 691 |
Net cash used in investing activities | (82,799) | (556,039) |
Financing activities | ||
Borrowings on revolving facilities | 360,000 | 165,000 |
Payments on revolving facilities | (220,000) | (150,000) |
Proceeds from term loans (financing costs) | 0 | 779,904 |
Payments on term loans | (132,685) | (2,875) |
Revolving facility debt issuance costs | 0 | (1,333) |
Borrowings of other debt | 8,290 | 11,600 |
Principal payments on other debt | (6,155) | (5,909) |
Dividends paid to Holdings | 0 | (122) |
Equity investment by Holdings | 0 | 738 |
Intercompany | 0 | 0 |
Increase (decrease) in overdrafts | 6,050 | (7,916) |
Proceeds from issuance of non-controlling interests | 3,425 | 0 |
Distributions to and purchases of non-controlling interests | (5,251) | (286,641) |
Net cash provided by (used in) financing activities | 13,674 | 502,446 |
Net increase (decrease) in cash and cash equivalents | (27,363) | (2,866) |
Cash and cash equivalents at beginning of period | 175,178 | 122,549 |
Cash and cash equivalents at end of period | 147,815 | 119,683 |
Concentra Group Holdings Parent, LLC | Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Operating activities | ||
Net income | 13,936 | 9,658 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 0 | 0 |
Depreciation and amortization | 24,904 | 21,147 |
Provision for bad debts | 14 | 43 |
Equity in earnings of unconsolidated subsidiaries | 0 | 0 |
Equity in earnings of consolidated subsidiaries | 0 | 0 |
Loss on extinguishment of debt | 297 | |
Loss (gain) on sale of assets and businesses | 0 | 3 |
Stock compensation expense | 767 | 211 |
Amortization of debt discount, premium and issuance costs | 1,945 | 1,299 |
Deferred income taxes | (2,242) | (797) |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | (12,664) | (3,736) |
Other current assets | (365) | (3,787) |
Other assets | 17,909 | 12,808 |
Accounts payable | 2,438 | (2,863) |
Accrued expenses | (22,999) | 321 |
Income taxes | 5,621 | 539 |
Net cash provided by operating activities | 29,264 | 35,143 |
Investing activities | ||
Business combinations, net of cash acquired | (1,805) | (515,016) |
Purchases of property and equipment | (15,698) | (6,621) |
Investment in businesses | 0 | (5) |
Proceeds from sale of assets and businesses | 0 | 0 |
Net cash used in investing activities | (17,503) | (521,642) |
Financing activities | ||
Borrowings on revolving facilities | 0 | 0 |
Payments on revolving facilities | 0 | 0 |
Proceeds from term loans (financing costs) | 779,915 | |
Payments on term loans | (33,878) | 0 |
Revolving facility debt issuance costs | (496) | |
Borrowings of other debt | 0 | 725 |
Principal payments on other debt | (1,741) | (1,581) |
Dividends paid to Holdings | 0 | |
Equity investment by Holdings | 0 | |
Intercompany | 0 | (9,389) |
Increase (decrease) in overdrafts | 0 | 0 |
Proceeds from issuance of non-controlling interests | 0 | |
Distributions to and purchases of non-controlling interests | (2,328) | (285,375) |
Net cash provided by (used in) financing activities | (37,947) | 483,799 |
Net increase (decrease) in cash and cash equivalents | (26,186) | (2,700) |
Cash and cash equivalents at beginning of period | 163,116 | 113,059 |
Cash and cash equivalents at end of period | $ 136,930 | $ 110,359 |