Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 28, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-33757 | |
Entity Registrant Name | ENSIGN GROUP, INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 33-0861263 | |
Entity Address, Address Line One | 29222 Rancho Viejo Road, Suite 127 | |
Entity Address, City or Town | San Juan Capistrano | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92675 | |
City Area Code | 949 | |
Local Phone Number | 487-9500 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | ENSG | |
Security Exchange Name | NASDAQ | |
Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 53,353,205 | |
Entity Central Index Key | 0001125376 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 44,396 | $ 31,083 |
Accounts receivable—less allowance for doubtful accounts of $3,707 and $2,886 at September 30, 2019 and December 31, 2018, respectively | 308,093 | 276,099 |
Investments—current | 13,026 | 8,682 |
Prepaid income taxes | 2,536 | 6,219 |
Prepaid expenses and other current assets | 25,150 | 24,130 |
Assets held for sale - current | 0 | 1,859 |
Total current assets | 393,201 | 348,072 |
Property and equipment, net | 708,224 | 618,874 |
Right-of-use assets (Note 17) | 1,062,219 | |
Insurance subsidiary deposits and investments | 34,561 | 36,168 |
Escrow deposits | 50 | 7,271 |
Deferred tax assets | 8,105 | 11,650 |
Restricted and other assets (Note 12) | 17,351 | 20,844 |
Intangible assets, net (Note 10) | 3,541 | 31,000 |
Goodwill | 96,199 | 80,477 |
Other indefinite-lived intangibles | 36,098 | 27,602 |
Total assets | 2,359,549 | 1,181,958 |
Current liabilities: | ||
Accounts payable | 40,019 | 44,236 |
Accrued wages and related liabilities | 132,659 | 119,656 |
Lease liabilities—current (Note 17) | 60,817 | |
Accrued self-insurance liabilities—current | 26,707 | 25,446 |
Other accrued liabilities | 84,250 | 69,784 |
Current maturities of long-term debt | 10,177 | 10,105 |
Total current liabilities | 354,629 | 269,227 |
Long-term debt—less current maturities | 265,692 | 233,135 |
Long-term lease liabilities—less current portion (Note 17) | 974,496 | |
Accrued self-insurance liabilities—less current portion | 58,958 | 54,605 |
Other long-term liabilities | 3,968 | 11,234 |
Deferred gain related to sale-leaseback (Note 17) | 11,417 | |
Total liabilities | 1,657,743 | 579,618 |
Commitments and contingencies (Notes 15, 17 and 18) | ||
Ensign Group, Inc. stockholders' equity: | ||
Common stock; $0.001 par value; 100,000 shares authorized; 56,017 and 53,367 shares issued and outstanding at September 30, 2019, respectively, and 55,089 and 52,584 shares issued and outstanding at December 31, 2018, respectively | 55 | 55 |
Additional paid-in capital | 303,680 | 284,384 |
Retained earnings | 426,414 | 344,901 |
Common stock in treasury, at cost, 2,046 and 1,932 shares at September 30, 2019 and December 31, 2018, respectively (Note 19) | (43,890) | (38,405) |
Total Ensign Group, Inc. stockholders' equity | 686,259 | 590,935 |
Non-controlling interest | 15,547 | 11,405 |
Total equity | 701,806 | 602,340 |
Total liabilities and equity | $ 2,359,549 | $ 1,181,958 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable—less allowance for doubtful accounts of $3,707 and $2,886 at September 30, 2019 and December 31, 2018, respectively | $ 3,707 | $ 2,886 |
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 56,017,000 | 55,089,000 |
Common stock, shares outstanding (in shares) | 53,367,000 | 52,584,000 |
Common stock in treasury, at cost (in shares) | 2,046,000 | 1,932,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue | $ 600,507 | $ 514,364 | $ 1,725,372 | $ 1,502,884 |
Expense | ||||
Cost of services | 477,805 | 413,723 | 1,364,807 | 1,200,098 |
Return of unclaimed class action settlement (Note 18) | 0 | 0 | 0 | (1,664) |
Rent—cost of services (Note 17) | 37,728 | 34,851 | 110,574 | 103,173 |
General and administrative expense | 31,710 | 24,601 | 95,295 | 72,091 |
Depreciation and amortization | 14,319 | 11,902 | 40,101 | 35,145 |
Total expenses | 561,562 | 485,077 | 1,610,777 | 1,408,843 |
Income from operations | 38,945 | 29,287 | 114,595 | 94,041 |
Other income (expense): | ||||
Interest expense | (3,900) | (3,989) | (11,513) | (11,471) |
Interest income | 736 | 467 | 1,883 | 1,477 |
Other expense, net | (3,164) | (3,522) | (9,630) | (9,994) |
Income before provision for income taxes | 35,781 | 25,765 | 104,965 | 84,047 |
Provision for income taxes | 7,953 | 5,415 | 20,605 | 18,078 |
Net income | 27,828 | 20,350 | 84,360 | 65,969 |
Less: net income/(loss) attributable to noncontrolling interests | 669 | (511) | 1,220 | (35) |
Net income attributable to The Ensign Group, Inc. | $ 27,159 | $ 20,861 | $ 83,140 | $ 66,004 |
Net income per share attributable to The Ensign Group, Inc.: | ||||
Basic (usd per share) | $ 0.50 | $ 0.40 | $ 1.55 | $ 1.27 |
Diluted (usd per share) | $ 0.48 | $ 0.38 | $ 1.48 | $ 1.22 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 53,941 | 52,139 | 53,470 | 51,870 |
Diluted (in shares) | 56,364 | 54,632 | 56,054 | 54,176 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Statement - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Non-Controlling Interest |
Balance at beginning of period at Dec. 31, 2017 | $ 500,059 | $ 53 | $ 266,058 | $ 264,691 | $ (38,405) | $ 7,662 |
Balance at beginning of period (in shares) at Dec. 31, 2017 | 51,360 | (1,932) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock to employees and directors resulting from the exercise of stock options and grant of stock awards (in shares) | 404 | |||||
Issuance of common stock to employees and directors resulting from the exercise of stock options and grant of stock awards | 2,920 | $ 1 | 2,919 | |||
Dividends declared | (2,346) | (2,346) | ||||
Employee stock award compensation | 1,971 | 1,971 | ||||
Noncontrolling interest attributable to subsidiary equity plan (Note 16) | 338 | (79) | 417 | |||
Distribution to noncontrolling interest holder | (292) | (292) | ||||
Net income (loss) attributable to noncontrolling interest | 161 | 161 | ||||
Net income attributable to the Ensign Group, Inc. | 23,132 | 23,132 | ||||
Balance at end of period (in shares) at Mar. 31, 2018 | 51,764 | (1,932) | ||||
Balance at end of period at Mar. 31, 2018 | 525,943 | $ 54 | 270,948 | 285,398 | $ (38,405) | 7,948 |
Balance at beginning of period at Dec. 31, 2017 | 500,059 | $ 53 | 266,058 | 264,691 | $ (38,405) | 7,662 |
Balance at beginning of period (in shares) at Dec. 31, 2017 | 51,360 | (1,932) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Dividends declared | (2,377) | |||||
Net income (loss) attributable to noncontrolling interest | (35) | |||||
Net income attributable to the Ensign Group, Inc. | 66,004 | |||||
Balance at end of period (in shares) at Sep. 30, 2018 | 52,248 | (1,932) | ||||
Balance at end of period at Sep. 30, 2018 | 572,376 | $ 54 | 278,802 | 321,448 | $ (38,405) | 10,477 |
Balance at beginning of period at Mar. 31, 2018 | 525,943 | $ 54 | 270,948 | 285,398 | $ (38,405) | 7,948 |
Balance at beginning of period (in shares) at Mar. 31, 2018 | 51,764 | (1,932) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock to employees and directors resulting from the exercise of stock options and grant of stock awards (in shares) | 269 | |||||
Issuance of common stock to employees and directors resulting from the exercise of stock options and grant of stock awards | 1,857 | 1,857 | ||||
Dividends declared | (2,367) | (2,367) | ||||
Employee stock award compensation | 2,177 | 2,177 | ||||
Noncontrolling interest attributable to subsidiary equity plan (Note 16) | 343 | (1,885) | 2,228 | |||
Net income (loss) attributable to noncontrolling interest | 315 | 315 | ||||
Net income attributable to the Ensign Group, Inc. | 22,011 | 22,011 | ||||
Balance at end of period (in shares) at Jun. 30, 2018 | 52,033 | (1,932) | ||||
Balance at end of period at Jun. 30, 2018 | 550,279 | $ 54 | 274,982 | 303,157 | $ (38,405) | 10,491 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock to employees and directors resulting from the exercise of stock options and grant of stock awards (in shares) | 215 | |||||
Issuance of common stock to employees and directors resulting from the exercise of stock options and grant of stock awards | 1,358 | 1,358 | ||||
Dividends declared | (2,377) | (2,377) | ||||
Employee stock award compensation | 2,462 | 2,462 | ||||
Noncontrolling interest attributable to subsidiary equity plan (Note 16) | 348 | (193) | 541 | |||
Distribution to noncontrolling interest holder | (44) | (44) | ||||
Net income (loss) attributable to noncontrolling interest | (511) | (511) | ||||
Net income attributable to the Ensign Group, Inc. | 20,861 | 20,861 | ||||
Balance at end of period (in shares) at Sep. 30, 2018 | 52,248 | (1,932) | ||||
Balance at end of period at Sep. 30, 2018 | 572,376 | $ 54 | 278,802 | 321,448 | $ (38,405) | 10,477 |
Balance at beginning of period at Dec. 31, 2018 | 602,340 | $ 55 | 284,384 | 344,901 | $ (38,405) | 11,405 |
Balance at beginning of period (in shares) at Dec. 31, 2018 | 52,584 | (1,932) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock to employees and directors resulting from the exercise of stock options and grant of stock awards (in shares) | 371 | |||||
Issuance of common stock to employees and directors resulting from the exercise of stock options and grant of stock awards | 5,616 | 5,616 | ||||
Dividends declared | (2,543) | (2,543) | ||||
Employee stock award compensation | 2,612 | 2,612 | ||||
Noncontrolling interest attributable to subsidiary equity plan (Note 16) | 341 | (317) | 658 | |||
Net income (loss) attributable to noncontrolling interest | 235 | 235 | ||||
Net income attributable to the Ensign Group, Inc. | 27,372 | 27,372 | ||||
Balance at end of period (in shares) at Mar. 31, 2019 | 52,955 | (1,932) | ||||
Balance at end of period at Mar. 31, 2019 | 645,003 | $ 55 | 292,612 | 378,443 | $ (38,405) | 12,298 |
Balance at beginning of period at Dec. 31, 2018 | 602,340 | $ 55 | 284,384 | 344,901 | $ (38,405) | 11,405 |
Balance at beginning of period (in shares) at Dec. 31, 2018 | 52,584 | (1,932) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Dividends declared | (2,564) | |||||
Net income (loss) attributable to noncontrolling interest | 1,220 | |||||
Net income attributable to the Ensign Group, Inc. | 83,140 | |||||
Balance at end of period (in shares) at Sep. 30, 2019 | 53,367 | (2,046) | ||||
Balance at end of period at Sep. 30, 2019 | 701,806 | $ 55 | 303,680 | 426,414 | $ (43,890) | 15,547 |
Balance at beginning of period at Mar. 31, 2019 | 645,003 | $ 55 | 292,612 | 378,443 | $ (38,405) | 12,298 |
Balance at beginning of period (in shares) at Mar. 31, 2019 | 52,955 | (1,932) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock to employees and directors resulting from the exercise of stock options and grant of stock awards (in shares) | 326 | |||||
Issuance of common stock to employees and directors resulting from the exercise of stock options and grant of stock awards | 3,213 | 3,213 | ||||
Dividends declared | (2,559) | (2,559) | ||||
Employee stock award compensation | 3,066 | 3,066 | ||||
Shares of common stock used to satisfy tax withholding obligations (in shares) | 9 | 9 | ||||
Shares of common stock used to satisfy tax withholding obligations | (485) | $ (485) | ||||
Noncontrolling interest attributable to subsidiary equity plan (Note 16) | 236 | (2,497) | 2,733 | |||
Distribution to noncontrolling interest holder | (92) | (92) | ||||
Net income (loss) attributable to noncontrolling interest | 316 | 316 | ||||
Net income attributable to the Ensign Group, Inc. | 28,609 | 28,609 | ||||
Balance at end of period (in shares) at Jun. 30, 2019 | 53,272 | (1,941) | ||||
Balance at end of period at Jun. 30, 2019 | 677,307 | $ 55 | 298,891 | 401,996 | $ (38,890) | 15,255 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock to employees and directors resulting from the exercise of stock options and grant of stock awards (in shares) | 200 | |||||
Issuance of common stock to employees and directors resulting from the exercise of stock options and grant of stock awards | 1,828 | 1,828 | ||||
Repurchase of common stock (in shares) | (105) | 105 | ||||
Repurchase of common stock (Note 19) | (5,000) | $ (5,000) | ||||
Dividends declared | (2,564) | (2,564) | ||||
Employee stock award compensation | 2,961 | 2,961 | ||||
Repurchase of common stock attributable to subsidiary equity plan (Note 16) | (394) | (394) | ||||
Noncontrolling interest attributable to subsidiary equity plan (Note 16) | 17 | (177) | 194 | |||
Distribution to noncontrolling interest holder | (177) | (177) | ||||
Net income (loss) attributable to noncontrolling interest | 669 | 669 | ||||
Net income attributable to the Ensign Group, Inc. | 27,159 | 27,159 | ||||
Balance at end of period (in shares) at Sep. 30, 2019 | 53,367 | (2,046) | ||||
Balance at end of period at Sep. 30, 2019 | $ 701,806 | $ 55 | $ 303,680 | $ 426,414 | $ (43,890) | $ 15,547 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Dividends per share (in dollars per share) | $ 0.0475 | $ 0.0475 | $ 0.0475 | $ 0.045 | $ 0.045 | $ 0.045 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 84,360 | $ 65,969 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 40,101 | 35,145 |
Impairment of long-lived assets and goodwill (Note 9) | 1,471 | 4,513 |
Amortization of deferred financing fees | 876 | 882 |
Amortization of deferred gain on sale-leaseback (Note 17) | (493) | |
Non-cash leasing arrangement (Note 17) | 309 | |
Deferred income taxes | 0 | 710 |
Provision for doubtful accounts | 1,454 | 2,101 |
Share-based compensation | 9,233 | 7,639 |
Cash received from insurance proceeds related to replacement properties and business interruptions | 804 | 1,783 |
Gains on insurance claims and disposal of assets | (2,977) | (1,097) |
Income tax refund | 0 | 11,000 |
Change in operating assets and liabilities | ||
Accounts receivable | (34,173) | 3,479 |
Prepaid income taxes | 4,181 | 1,938 |
Prepaid expenses and other assets | 3,697 | 238 |
Insurance subsidiary deposits | 0 | (399) |
Operating lease obligations | (3,632) | |
Accounts payable | (4,217) | 2,031 |
Accrued wages and related liabilities | 16,285 | 8,540 |
Other accrued liabilities | 12,872 | 9,092 |
Accrued self-insurance liabilities | 4,686 | 4,025 |
Other long-term liability | 2,263 | 181 |
Net cash provided by operating activities | 137,593 | 157,277 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (54,983) | (37,632) |
Cash payments for business acquisitions (Note 8) | (25,213) | (1,625) |
Cash payments for asset acquisitions (Note 8) | (75,326) | (57,859) |
Escrow deposits | (50) | (660) |
Escrow deposits used to fund acquisitions | 7,271 | 228 |
Cash proceeds from the sale of assets and insurance proceeds | 7,835 | 2,971 |
Investments and change in other assets | (8,922) | (692) |
Net cash used in investing activities | (149,388) | (95,269) |
Cash flows from financing activities: | ||
Proceeds from revolving credit facility and other debt (Note 15) | 895,000 | 600,000 |
Payments on revolving credit facility and other debt (Note 15) | (863,494) | (657,427) |
Issuance of common stock upon exercise of options | 7,376 | 6,135 |
Repurchase of shares of common stock to satisfy tax withholding obligations | (485) | 0 |
Proceeds from sale of subsidiary shares (Note 16) | 2,293 | 1,972 |
Repurchase of shares of common stock and subsidiary shares (Note 16) | (7,687) | (1,972) |
Dividends paid | (7,626) | (7,042) |
Non-controlling interest distribution | (269) | (336) |
Payments of deferred financing costs | 0 | (18) |
Net cash provided by/(used in) financing activities | 25,108 | (58,688) |
Net increase in cash and cash equivalents | 13,313 | 3,320 |
Cash and cash equivalents beginning of period | 31,083 | 42,337 |
Cash and cash equivalents end of period | 44,396 | 45,657 |
Cash paid during the period for: | ||
Interest | 11,446 | 11,625 |
Income taxes | 16,358 | 15,563 |
Lease liabilities | 111,391 | |
Non-cash financing and investing activity: | ||
Accrued capital expenditures | 3,500 | 3,800 |
Accrued dividends declared | 2,564 | 2,377 |
Note receivable from sale of ancillary business | 0 | $ 129 |
Right-of-use assets obtained in exchange for new operating lease obligation | $ 52,606 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS The Company - The Ensign Group, Inc. (collectively, Ensign or the Company), is a holding company with no direct operating assets, employees or revenue. The Company, through its operating subsidiaries, is a provider of health care services across the post-acute care continuum. As of September 30, 2019 , the Company operated 259 facilities, 63 home health, hospice and home care agencies and other ancillary operations located in Arizona, California, Colorado, Idaho, Iowa, Kansas, Massachusetts, Nebraska, Nevada, Oklahoma, Oregon, South Carolina, Texas, Utah, Washington, Wisconsin and Wyoming. The Company's operating subsidiaries, each of which strives to be the operation of choice in the community it serves, provide a broad spectrum of skilled nursing, senior living, home health, hospice, home care and other ancillary services. The Company's operating subsidiaries have a collective capacity of approximately 21,100 operational skilled nursing beds and 6,000 senior living units. As of September 30, 2019 , the Company owned 81 of its 259 affiliated facilities and leased an additional 178 facilities through long-term lease arrangements and had options to purchase 11 of those 178 facilities. As of December 31, 2018 , the Company owned 72 of its 244 affiliated facilities and leased an additional 172 facilities through long-term lease arrangements and had options to purchase 12 of those 172 facilities. Certain of the Company’s wholly-owned independent subsidiaries, collectively referred to as the Service Center, provide certain accounting, payroll, human resources, information technology, legal, risk management and other centralized services to the other operating subsidiaries through contractual relationships with such subsidiaries. The Company also has a wholly-owned captive insurance subsidiary (the Captive) that provides some claims-made coverage to the Company’s operating subsidiaries for general and professional liability, as well as coverage for certain workers’ compensation insurance liabilities. Each of the Company's affiliated operations are operated by separate, wholly-owned, independent subsidiaries that have their own management, employees and assets. References herein to the consolidated “Company” and “its” assets and activities in this Report is not meant to imply, nor should it be construed as meaning, that The Ensign Group, Inc. has direct operating assets, employees or revenue, or that any of the subsidiaries, are operated by The Ensign Group, Inc. Spin-Off Transaction — On October 1, 2019, the Company completed the previously announced separation of its transitional and skilled nursing services, home health and hospice operations and substantially all of its senior living operations into two separate, publicly traded companies. See Note 2, Spin-Off of Subsidiaries . Other Information — The accompanying condensed consolidated financial statements as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018 (collectively, the Interim Financial Statements) are unaudited. Certain information and note disclosures normally included in annual consolidated financial statements have been condensed or omitted, as permitted under applicable rules and regulations. Readers of the Interim Financial Statements should refer to the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2018 which are included in the Company’s annual report on Form 10-K, File No. 001-33757 (the Annual Report) filed with the Securities and Exchange Commission (SEC). Management believes that the Interim Financial Statements reflect all adjustments which are of a normal and recurring nature necessary to present fairly the Company’s financial position and results of operations in all material respects. The results of operations presented in the Interim Financial Statements are not necessarily representative of operations for the entire year. |
Spin-Off of Subsidiaries
Spin-Off of Subsidiaries | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
SPIN-OFF OF SUBSIDIARIES | SPIN-OFF OF SUBSIDIARIES On October 1, 2019, the Company completed the previously announced separation of its transitional and skilled nursing services, home health and hospice operations and substantially all of its senior living operations into two separate, publicly traded companies: • Ensign, which includes skilled nursing and assisted living services, physical, occupational and speech therapies and other rehabilitative and healthcare services at 211 healthcare facilities and campuses, post-acute-related new business ventures and real estate investments; and • The Pennant Group, Inc. (Pennant), which is a holding company of operating subsidiaries that provide home health, hospice and senior living services. The Company completed the separation into two publicly traded companies through a tax-free distribution of all of the outstanding shares of common stock of Pennant to Ensign stockholders on a pro rata basis (the Spin-Off). Ensign stockholders received one share of Pennant common stock for every two shares of Ensign common stock held at the close of business on September 20, 2019, the record date for the Spin-Off. The number of shares of Ensign common stock each stockholder owns and the related proportionate interest in Ensign did not change as a result of the Spin-Off. Each Ensign stockholder received only whole shares of Pennant common stock in the distribution, as well as cash in lieu of any fractional shares. The Spin-Off was effective from and after October 1, 2019, with shares of Pennant common stock distributed on October 1, 2019. Pennant is listed on the NASDAQ Global Select Market (NASDAQ) and trades under the ticker symbol “PNTG.” The accompanying unaudited, interim Consolidated Financial Statements include the historical results of Ensign, as the Spin-off did not take place until October 1, 2019, after the September 30 reporting period in this Quarterly Report. Immediately after the Spin-Off, Ensign will no longer consolidate its home health and hospice operations and substantially all of its senior living operations into its financial results. Beginning in the fourth quarter of 2019, Pennant's historical financial results for periods prior to October 1, 2019 will be reflected in the Company's consolidated financial statements as discontinued operations. Prior to October 1, 2019, Ensign operated under three stand-alone reporting segments. In future filings, the Company will operate under one reporting segment. As a result of the Spin-Off, the accompanying unaudited, interim Consolidated Financial Statements are not indicative of the Company’s future financial position, results of operations or cash flows. In connection with the Spin-Off, Pennant's operations consist of 63 home health, hospice and home care agencies and 52 senior living communities as of October 1, 2019. Ensign affiliates retained ownership of all the real estate, which includes 29 of the 52 senior living operations that were contributed to Pennant. These assets are leased to Pennant on a triple-net basis. Pennant affiliates are responsible for all costs at the properties, including property taxes, insurance and maintenance and repair costs. Annual rental income generated from the leases with Pennant is approximately $12,000 . Pennant's remaining 23 senior living operations are leasing the underlying real estate from unrelated third parties. In accordance with Accounting Standards Codification (ASC) 505-60, Equity-Spinoffs and Reverse Spinoffs, the accounting for the separation of the Company follows its legal form, with Ensign as the legal and accounting spinnor and Pennant as the legal and accounting spinnee, due to the relative significance of Ensign’s healthcare business, the relative fair values of the respective companies, the retention of all senior management, and other relevant indicators. Prior to the Spin-Off, the Company entered into a Separation and Distribution Agreement with Pennant, setting forth the mechanics of the Spin-Off, certain organizational matters and other ongoing obligations of the Company and Pennant. The Company and Pennant or their respective subsidiaries, as applicable, also entered into a number of other agreements to govern the relationship between the Company and Pennant after the Spin-Off. Effective October 1, 2019, the following agreements were entered into: • Master Separation Agreement - The master separation agreement contains the key provisions relating to the separation of Pennant’s home health and hospice operations and substantially all of its senior living operations from Ensign, and other provisions that govern the relationship between Ensign and Pennant after the Spin-Off. • Transition Services Agreement - Ensign will provide Pennant with certain services, and Pennant will provide Ensign with certain services, for a two year period, subject to extension upon the agreement of the parties, following the distribution to help ensure an orderly transition. The services that are under the transition services agreement may include certain finance, information technology, human resources, employee benefits and other services. • Tax Matters Agreement - The tax matters agreement will govern the respective rights, responsibilities and obligations of Ensign and Pennant after the Spin-Off with respect to tax liabilities and benefits, tax attributes, tax returns, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns. • Employee Matters Agreement - The employee matters agreement addresses the allocation of employees between Ensign and Pennant, as well as the allocation of related qualified defined contribution plans, employee health and welfare benefit plans, incentive plans, equity-based awards and other employment, compensation and benefits-related matters. • Lease Agreement - Ensign affiliates retained ownership of the real estate at 29 senior living operations that were contributed to Pennant. All of these properties are leased to Pennant on a triple-net basis, where as the Pennant affiliates are responsible for all costs at the properties, including property taxes, insurance and maintenance and repair costs. The initial terms range between 14 to 16 years . In connection with the Spin-Off, Pennant granted awards to employees and directors of Ensign immediately prior to the consummation of the spin-off in recognition of their performance in assisting with the spin-off transaction. In connection with the Spin-Off, the awards of equity of Pennant subsidiaries granted to certain individuals were exchanged for Pennant common stock prior to the distribution. As the Spin-off did not take place until October 1, 2019, after the most recent period reported in this Quarterly Report, all the share counts, options and restricted stock awards are not reflective of the conversion for the Spin-Off. Beginning in the fourth quarter of 2019, Ensign's shares outstanding, options and restricted stock awards will be reflective of the conversion, including the non-controlling interest of a subsidiary of the Company (Subsidiary Equity Plan) for common stock of Pennant and the impact of the options and restricted stock awards to Pennant employees in diluted shares outstanding. The Company incurred expenses in connection with the completed Spin-Off transaction of $3,261 and $7,908 for the three and nine months ended September 30, 2019 , respectively. The Company will continue to incur additional Spin-Off transaction expenses in the fourth quarter of 2019. On October 1, 2019, in connection with the Spin-Off, the Company entered into the third amendment to the current amended credit facility with a revolving line of credit of up to $350,000 in aggregate principal. See Note 15, Debt. In addition, the Company amended the Master Leases with CareTrust and other third party lease agreements in connection with the Spin-Off. The net impact of the lease termination and modification of lease agreements is a reduction in ROU and lease liabilities of approximately $35,000 . See Note 17, Leases . As approved by the Board of Directors on August 26, 2019, the Company entered into a stock repurchase program pursuant to which the Company may repurchase up to $20,000 of its common stock under the program for a period of approximately 12 months . Under this program, the Company is authorized to repurchase its issued and outstanding common shares from time to time in open-market and privately negotiated transactions and block trades in accordance with federal securities laws. The stock repurchase program will expire on August 31, 2020 . During the third quarter of 2019, the Company repurchased 105 shares of its common stock for a total of $5,000 . Subsequent to September 30, 2019 , the Company repurchased 33 shares of its common stock for a total of $1,406 . As approved by the Board of Directors on April 3, 2018, the Company entered into a stock repurchase program pursuant to which the Company was authorized to repurchase up to $30,000 of its common stock under the program for a period of approximately 11 months . Under this program, the Company was authorized to repurchase its issued and outstanding common shares from time to time in open-market and privately negotiated transactions and block trades in accordance with federal securities laws. The stock repurchase program expired on February 20, 2019 . The Company did not purchase any shares pursuant to this stock repurchase program. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation — The accompanying Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The Company is the sole member or stockholder of various consolidated limited liability companies and corporations established to operate various acquired skilled nursing and senior living operations, home health, hospice and home care operations, and related ancillary services. All intercompany transactions and balances have been eliminated in consolidation. The condensed consolidated financial statements include the accounts of all entities controlled by the Company through its ownership of a majority voting interest. The Company presents noncontrolling interests within the equity section of its condensed consolidated balance sheets. The Company presents the amount of consolidated net income that is attributable to The Ensign Group, Inc. and the noncontrolling interest in its condensed consolidated statements of income. The condensed consolidated financial statements include the accounts of all entities controlled by the Company through its ownership of a majority voting interest and the accounts of any variable interest entities (VIEs) where the Company is subject to a majority of the risk of loss from the VIE's activities, entitled to receive a majority of the entity's residual returns, or both. The Company assesses the requirements related to the consolidation of VIEs, including a qualitative assessment of power and economics that considers which entity has the power to direct the activities that "most significantly impact" the VIE's economic performance and has the obligation to absorb losses of, or the right to receive benefits that could be potentially significant to, the VIE. The Company's relationship with variable interest entities was not material during the three and nine months ended September 30, 2019 and 2018 . The Company completed the sale of one of its senior living operations for a sale price of $1,838 during the first quarter of 2019. The sale transaction does not meet the criteria of discontinued operations as it does not represent a strategic shift that has, or will have, a major effect on the Company's operations and financial results. The Company presented property and equipment assets of the senior living operation sold as held for sale in the consolidated balance sheet as of December 31, 2018. Estimates and Assumptions — The preparation of Interim Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Interim Financial Statements and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates in the Company’s Interim Financial Statements relate to revenue, intangible assets and goodwill, impairment of long-lived assets, general and professional liability, workers' compensation and healthcare claims included in accrued self-insurance liabilities, and income taxes. Actual results could differ from those estimates. Fair Value of Financial Instruments — The Company’s financial instruments consist principally of cash and cash equivalents, debt security investments, accounts receivable, insurance subsidiary deposits, accounts payable and borrowings. The Company believes all of the financial instruments’ recorded values approximate fair values because of their nature or respective short durations. Revenue Recognition — On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606) applying the modified retrospective method. The adoption of ASC 606 did not have a material impact on the measurement nor on the recognition of revenue of contracts, for which all revenue had not been recognized, as of January 1, 2018, therefore no cumulative adjustment has been made to the opening balance of retained earnings at the beginning of 2018. See Note 4, Revenue and Accounts Receivable . Accounts Receivable and Allowance for Doubtful Accounts — Accounts receivable consist primarily of amounts due from Medicare and Medicaid programs, other government programs, managed care health plans and private payor sources, net of estimates for variable consideration. The allowance for doubtful accounts reflects the Company’s best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts and other currently available evidence. See Note 4, Revenue and Accounts Receivable . Property and Equipment — Property and equipment are initially recorded at their historical cost. Repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the depreciable assets (ranging from three to 59 years ). Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the remaining lease term. Impairment of Long-Lived Assets — The Company reviews the carrying value of long-lived assets that are held and used in the Company’s operating subsidiaries for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of these assets is determined based upon expected undiscounted future net cash flows from the operating subsidiaries to which the assets relate, utilizing management’s best estimate, appropriate assumptions, and projections at the time. If the carrying value is determined to be unrecoverable from future operating cash flows, the asset is deemed impaired and an impairment loss would be recognized to the extent the carrying value exceeded the estimated fair value of the asset. The Company estimates the fair value of assets based on the estimated future discounted cash flows of the asset. Management has evaluated its long-lived assets and recorded an impairment charge of $1,471 during the three and nine months ended September 30, 2019 . The Company recorded an impairment charge of $860 during the nine months ended September 30, 2018 . There were no impairment charges during the three months ended September 30, 2018 . Leases and Leasehold Improvements - The Company leases skilled nursing facilities, senior living facilities and commercial office space. On January 1, 2019, the Company adopted Accounting Standards Codification Topic 842, Leases (ASC 842), electing the transition method that allows it to apply the standard as of the adoption date and record a cumulative adjustment in retained earnings. The Company determines if an arrangement is a lease at the inception of each lease. At the inception of each lease, the Company performs an evaluation to determine whether the lease should be classified as an operating or finance lease. Operating leases are included in right-of-use assets, current lease liabilities and long-term lease liabilities on the Company's condensed consolidated balance sheet. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at lease commencement date in determining the present value of future lease payments. The Company estimates this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. The Company records rent expense for operating leases on a straight-line basis over the term of the lease. The lease term used for straight-line rent expense is calculated from the date the Company is given control of the leased premises through the end of the lease term. Renewals are not assumed in the determination of the lease term unless they are deemed to be reasonably assured at the inception of the lease. The lease term used for this evaluation also provides the basis for establishing depreciable lives for buildings subject to lease and leasehold improvements. The Company recognizes lease expense for leases with an initial term of 12 months or less on a straight-line basis over the lease term. These leases are not recorded on the condensed consolidated balance sheet. Certain of the Company's lease agreements include rental payments that are adjusted periodically for inflation. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company does not have material subleases. See further discussion at Note 17, Leases . Intangible Assets and Goodwill — Definite-lived intangible assets consist primarily of patient base, facility trade names and customer relationships. Trade names at affiliated facilities are amortized over 30 years and customer relationships are amortized over a period of up to 20 years . The Company's indefinite-lived intangible assets consist of trade names, and Medicare and Medicaid licenses. The Company tests indefinite-lived intangible assets for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. Goodwill is subject to annual testing for impairment. In addition, goodwill is tested for impairment if events occur or circumstances change that would reduce the fair value of a reporting unit below its carrying amount. The Company performs its annual test for impairment during the fourth quarter of each year. Management evaluated its goodwill and intangible assets during the third quarter of 2018, due to changes in circumstances and the Company recorded an impairment charge of $3,653 to goodwill and intangible assets during the three and nine months ended September 30, 2018 . The Company did no t identify any goodwill or intangible assets impairment during the three and nine months ended September 30, 2019 . See further discussion at Note 11, Goodwill and Other Indefinite-Lived Intangible Assets . Self-Insurance — The Company is partially self-insured for general and professional liability up to a base amount per claim (the self-insured retention) with an aggregate, one-time deductible above this limit. Losses beyond these amounts are insured through third-party policies with coverage limits per claim, per location and on an aggregate basis for the Company. The combined self-insured retention is $500 per claim, subject to an additional one-time deductible of $750 for California affiliated operations and a separate, one-time, deductible of $1,000 for non-California operations. For all affiliated operations, except those located in Colorado, the third-party coverage above these limits is $1,000 per claim, $3,000 per operation, with a $5,000 blanket aggregate limit and an additional state-specific aggregate where required by state law. In Colorado, the third-party coverage above these limits is $1,000 per claim and $3,000 per operation, which is independent of the aforementioned blanket aggregate limits that apply outside of Colorado. The self-insured retention and deductible limits for general and professional liability and workers' compensation for all states (except Texas, Washington and Wyoming for workers' compensation) are self-insured through the Captive, the related assets and liabilities of which are included in the accompanying condensed consolidated balance sheets. The Captive is subject to certain statutory requirements as an insurance provider. The Company’s policy is to accrue amounts equal to the actuarially estimated costs to settle open claims of insureds, as well as an estimate of the cost of insured claims that have been incurred but not reported. The Company develops information about the size of the ultimate claims based on historical experience, current industry information and actuarial analysis, and evaluates the estimates for claim loss exposure on a quarterly basis. Accrued general liability and professional malpractice liabilities on an undiscounted basis, net of anticipated insurance recoveries, were $46,915 and $42,635 as of September 30, 2019 and December 31, 2018 , respectively. The Company’s operating subsidiaries are self-insured for workers’ compensation in California. To protect itself against loss exposure in California with this policy, the Company has purchased individual specific excess insurance coverage that insures individual claims that exceed $500 per occurrence. In Texas, the operating subsidiaries have elected non-subscriber status for workers’ compensation claims and the Company has purchased individual stop-loss coverage that insures individual claims that exceed $750 per occurrence. The Company’s operating subsidiaries in all other states, with the exception of Washington and Wyoming, are under a loss sensitive plan that insures individual claims that exceed $350 per occurrence. In Washington and Wyoming, the operating subsidiaries' coverage is financed through premiums paid by the employers and employees. The claims and benefit payments are managed through a state insurance pool. Outside of California, Texas, Washington and Wyoming, the Company has purchased insurance coverage that insures individual claims that exceed $350 per accident. In all states except Washington and Wyoming, the Company accrues amounts equal to the estimated costs to settle open claims, as well as an estimate of the cost of claims that have been incurred but not reported. The Company uses actuarial valuations to estimate the liability based on historical experience and industry information. Accrued workers’ compensation liabilities are recorded on an undiscounted basis in the accompanying condensed consolidated balance sheets and were $24,583 and $24,624 as of September 30, 2019 and December 31, 2018 , respectively. In addition, the Company has recorded an asset and equal liability of $7,899 and $6,969 at September 30, 2019 and December 31, 2018 , respectively, in order to present the ultimate costs of malpractice and workers' compensation claims and the anticipated insurance recoveries on a gross basis. See Note 12, Restricted and Other Assets. The Company self-funds medical (including prescription drugs) and dental healthcare benefits to the majority of its employees. The Company is fully liable for all financial and legal aspects of these benefit plans. To protect itself against loss exposure with this policy, the Company has purchased individual stop-loss insurance coverage that insures individual claims that exceed $300 for each covered person with an additional one-time aggregate individual stop loss deductible of $75 . Beginning 2016, the Company's policy does not include the additional one-time aggregate individual stop loss deductible of $75 . The Company’s accrued liability under these plans recorded on an undiscounted basis in the accompanying condensed consolidated balance sheets was $6,268 and $5,823 as of September 30, 2019 and December 31, 2018 , respectively. The Company believes that adequate provision has been made in the Interim Financial Statements for liabilities that may arise out of patient care, workers’ compensation, healthcare benefits and related services provided to date. The amount of the Company’s reserves was determined based on an estimation process that uses information obtained from both company-specific and industry data. This estimation process requires the Company to continuously monitor and evaluate the life cycle of the claims. Using data obtained from this monitoring and the Company’s assumptions about emerging trends, the Company, with the assistance of an independent actuary, develops information about the size of ultimate claims based on the Company’s historical experience and other available industry information. The most significant assumptions used in the estimation process include determining the trend in costs, the expected cost of claims incurred but not reported and the expected costs to settle or pay damage awards with respect to unpaid claims. The self-insured liabilities are based upon estimates, and while management believes that the estimates of loss are reasonable, the ultimate liability may be in excess of or less than the recorded amounts. Due to the inherent volatility of actuarially determined loss estimates, it is reasonably possible that the Company could experience changes in estimated losses that could be material to net income. If the Company’s actual liability exceeds its estimates of loss, its future earnings, cash flows and financial condition would be adversely affected. Income Taxes — Deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at tax rates in effect when such temporary differences are expected to reverse. The Company generally expects to fully utilize its deferred tax assets; however, when necessary, the Company records a valuation allowance to reduce its net deferred tax assets to the amount that is more likely than not to be realized. In determining the need for a valuation allowance or the need for and magnitude of liabilities for uncertain tax positions, the Company makes certain estimates and assumptions. These estimates and assumptions are based on, among other things, knowledge of operations, markets, historical trends and likely future changes and, when appropriate, the opinions of advisors with knowledge and expertise in certain fields. Due to certain risks associated with the Company’s estimates and assumptions, actual results could differ. Noncontrolling Interest — The noncontrolling interest in a subsidiary is initially recognized at estimated fair value on the acquisition date and is presented within total equity in the Company's condensed consolidated balance sheets. The Company presents the noncontrolling interest and the amount of consolidated net income attributable to The Ensign Group, Inc. in its condensed consolidated statements of income and net income per share is calculated based on net income attributable to The Ensign Group, Inc.'s stockholders. The carrying amount of the noncontrolling interest is adjusted based on an allocation of subsidiary earnings based on ownership interest. Share-Based Compensation — The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors including employee stock options based on estimated fair values, ratably over the requisite service period of the award. Net income has been reduced as a result of the recognition of the fair value of all stock options and restricted stock awards issued, the amount of which is contingent upon the number of future grants and other variables. Recent Accounting Pronouncements — Except for rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws and a limited number of grandfathered standards, the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. For any new pronouncements announced, the Company considers whether the new pronouncements could alter previous generally accepted accounting principles and determines whether any new or modified principles will have a material impact on the Company's reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Company's financial management and certain standards are under consideration. Recent Accounting Standards Adopted by the Company In July 2019, the FASB issued ASU No. 2019-07, Codification Updates to SEC Sections - Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization, and Miscellaneous Updates , which aligns the guidance in various SEC sections of the FASB ASC with the requirements of certain already effective SEC final rules. ASU 2019-07 is effective immediately during the company's third quarter of fiscal 2019 and did not have a material impact on the company's consolidated financial statements and related disclosures. In February 2016, the FASB established Topic 842, Leases , by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases with terms longer than 12 months on the balance sheet and disclose key information about leasing arrangements. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The classification criteria for distinguishing between operating and finance (previously capital) leases are substantially similar to the previous lease guidance, but with no explicit bright lines. The Company adopted the standard as of January 1, 2019, electing the transition method that allows it to apply the standard as of the adoption date and record a cumulative adjustment in retained earnings, if applicable. The Company has elected the package of practical expedients permitted under the transition guidance, which among other things, allows the Company to carry forward the historical lease classification. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company has made an accounting policy to keep leases with an initial term of 12 months or less off of the balance sheet and recognize those lease payments in the consolidated statements of income on a straight-line basis over the lease term. The Company has also elected the practical expedient to not separate lease and non-lease components for all of its leases as the non-lease components are not significant to the overall lease costs. The adoption of this standard resulted in recognition of right-of-use assets and lease liabilities of $1,051,148 and $1,029,240 , respectively, on its condensed consolidated balance sheets as of January 1, 2019. The Company recorded an adjustment, net of tax, of $9,030 to retained earnings, on the adoption date, related to a deferred gain on a previous sale-leaseback transaction, which resulted in an increase in rent expense of $658 annually, as we are no longer able to recognize the gain in our consolidated statement of income as a result of the new lease standard. In addition, initial direct costs associated with its lease agreements and favorable lease assets of $26,939 were classified into right-of-use assets on the adoption date. The standard does not materially affect the Company's consolidated net earnings or have a notable impact on liquidity or debt-covenant compliance under the current agreements. See further discussion at Note 17, Leases . Prior to the adoption of ASC 842, the Company recognized revenue related to its senior living residency agreements in accordance with the provisions of ASC 840, Leases (ASC 840). Subsequent to the adoption of ASU 2016-02, Leases , lessors are required to separately recognize and measure the lease component of a contract with a customer utilizing the provisions of ASC 842 and the non-lease components utilizing the provisions of ASC 606, Revenue from Contracts with Customers ( ASC 606 ) . To separately account for the components, the transaction price is allocated among the components based upon the estimated stand alone selling prices of the components. Additionally, certain components of a contract which were previously included within the lease element recognized in accordance with ASC 840 prior to the adoption of ASU 2016-02 (such as common area maintenance services, other basic services, and executory costs) are recognized as non-lease components subject to the provisions of ASC 606 subsequent to the adoption of ASU 2016-02. Entities are required to recognize a cumulative effect adjustment to beginning retained earnings as of the initial application date of ASU 2016-02 for changes to amounts recognized for these certain components for the transition from ASC 840 to ASC 606. However, entities are permitted to elect the practical expedient under ASU 2018-11, Leases , allowing lessors to not separate non-lease components from the associated lease components when certain criteria are met. Entities that elect to utilize the lease/non-lease component combination practical expedient under ASU 2018-11 upon initial application of ASC 842 are required to apply the practical expedient to all new and existing transactions within a class of underlying assets that qualify for the expedient as of the initial application date with a cumulative effect adjustment to beginning retained earnings as of the initial application date for any changes recognized related to existing transactions. Upon adoption of ASU 2016-02 and ASU 2018-11, the Company elected the lessor practical expedient within ASU 2018-11. The Company recognizes revenue under these resident agreements based upon the predominant component, either the lease or non-lease component, of the contracts rather than allocating the consideration and separately accounting for it under ASC 842 and ASC 606. The Company has concluded that the non-lease components of the agreements with respect to its senior living communities are the predominant component of the contract, therefore, the Company recognizes revenue for these residents agreements under ASC 606. The timing and pattern of revenue recognition is substantially the same as that prior to the adoption of these standards. In June 2018, the FASB issued ASU 2018-07, which simplifies several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of ASC 718, Compensation-Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments specify that ASC 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that ASC 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606, Revenue from Contracts with Customers. The Company adopted this guidance effective January 1, 2019. The adoption of this guidance did not have a material impact on its consolidated financial statements and related disclosures. Accounting Standards Recently Issued But Not Yet Adopted by the Company In August 2018, the FASB issued amended guidance to simplify fair value measurement disclosure requirements. The new provisions eliminate the requirements to disclose (1) transfers between Level 1 and Level 2 of the fair value hierarchy, (2) policies related to valuation processes and the timing of transfers between levels of the fair value hierarchy, and (3) net asset value disclosure of estimates of timing of future liquidity events. The FASB also modified disclosure requirements of Level 3 fair value measurements. This guidance is effective for annual periods beginning after December 15, 2019, which will be the Company's fiscal year 2020, with early adoption permitted. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued amended authoritative guidance to simplify and reduce the cost and complexity of the goodwill impairment test. The new provisions eliminate step 2 from the goodwill impairment test and shifts the concept of impairment from a measure of loss when comparing the implied fair value of goodwill to its carrying amount to comparing the fair value of a reporting unit with its carrying amount. The FASB also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment or step 2 of the goodwill impairment test. The new guidance does not amend the optional qualitative assessment of goodwill impairment. This guidance is effective for annual periods beginning after December 15, 2019, which will be the Company's fiscal year 2020, with early adoption permitted. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update (ASU) 2016-13 “ Financial Instruments – Credit Losses (Topic 326): Measurement of credit Losses on Financial Instruments ”, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The guidance will be effective for fiscal year beginning after December 15, 2019, which will be the Company's fiscal year 2020, with early adoption is permitted. The Company has not yet determined the effect of the ASU on its results of operations, financial condition or cash flows. |
Revenue and Accounts Receivable
Revenue and Accounts Receivable | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE AND ACCOUNTS RECEIVABLE | REVENUE AND ACCOUNTS RECEIVABLE The Company's revenue is derived primarily from providing healthcare services to its patients. Revenues are recognized when services are provided to the patients at the amount that reflects the consideration to which the Company expects to be entitled from patients and third-party payors, including Medicaid, Medicare and insurers (private and Medicare replacement plans), in exchange for providing patient care. The healthcare services in transitional and skilled, home health and hospice patient contracts include routine services in exchange for a contractual agreed-upon amount or rate. Routine services are treated as a single performance obligation satisfied over time as services are rendered. As such, patient care services represent a bundle of services that are not capable of being distinct. Additionally, there may be ancillary services which are not included in the daily rates for routine services, but instead are treated as separate performance obligations satisfied at a point in time, if and when those services are rendered. Revenue recognized from healthcare services are adjusted for estimates of variable consideration to arrive at the transaction price. The Company determines the transaction price based on contractually agreed-upon amounts or rate, adjusted for estimates of variable consideration. The Company uses the expected value method in determining the variable component that should be used to arrive at the transaction price, using contractual agreements and historical reimbursement experience within each payor type. The amount of variable consideration which is included in the transaction price may be constrained, and is included in net revenue only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. If actual amounts of consideration ultimately received differ from the Company’s estimates, the Company adjusts these estimates, which would affect net revenue in the period such variances become known. Revenue from the Medicare and Medicaid programs accounted for 68.3% and 68.1% the Company's revenue for the three and nine months ended September 30, 2019 , respectively and 68.6% and 68.2% for the three and nine months ended September 30, 2018 , respectively. Settlement with Medicare and Medicaid payors for retroactive adjustments due to audits and reviews are considered variable consideration and are included in the determination of the estimated transaction price. These settlements are estimated based on the terms of the payment agreement with the payor, correspondence from the payor and the Company’s historical settlement activity. Consistent with healthcare industry practices, any changes to these revenue estimates are recorded in the period the change or adjustment becomes known based on final settlement. The Company recorded adjustments to revenue which were not material to the Company's consolidated revenue or Interim Financial Statements for the three and nine months ended September 30, 2019 and 2018 . Disaggregation of Revenue The Company disaggregates revenue from contracts with its patients by reportable operating segments and payors. The Company determines that disaggregating revenue into these categories achieves the disclosure objectives to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. A reconciliation of disaggregated revenue to segment revenue as well as revenue by payor is provided in Note 7, Business Segments . The Company’s service specific revenue recognition policies are as follows: Transitional and Skilled Nursing Revenue The Company’s revenue is derived primarily from providing long-term healthcare services to patients and is recognized on the date services are provided at amounts billable to individual patients, adjusted for estimates for variable consideration. For patients under reimbursement arrangements with third-party payors, including Medicaid, Medicare and private insurers, revenue is recorded based on contractually agreed-upon amounts or rate, adjusted for estimates for variable consideration, on a per patient, daily basis or as services are performed. Senior Living Revenue The Company's senior living revenue consists of fees for basic housing and assisted living care. Accordingly, we record revenue when services are rendered on the date services are provided at amounts billable to individual residents. Residency agreements are generally for a term of 30 days, with resident fees billed monthly in advance. For residents under reimbursement arrangements with Medicaid, revenue is recorded based on contractually agreed-upon amounts or rates on a per resident, daily basis or as services are rendered. The Company has elected the lessor practical expedient within ASC 842, Leases ("ASC 842") and recognizes, measures, presents, and discloses the revenue for services under the Company's senior living residency agreements based upon the predominant component, either the lease or nonlease component, of the contracts. The Company has determined that the services included under the Company’s senior living residency agreements have the same timing and pattern of transfer. The Company recognizes revenue under ASC 606, for its senior residency agreements for which it has estimated that the nonlease components of such residency agreements are the predominant component of the contract. Home Health Revenue Medicare Revenue Net service revenue is recorded under the Medicare prospective payment system based on a 60-day episode payment rate that is subject to adjustment based on certain variables including, but not limited to: (a) an outlier payment if the patient’s care was unusually costly; (b) a low utilization adjustment if the number of visits was fewer than five; (c) a partial payment if the patient transferred to another provider or transferred from another provider before completing the episode; (d) a payment adjustment based upon the level of covered therapy services; (e) the number of episodes of care provided to a patient, regardless of whether the same home health provider provided care for the entire series of episodes; (f) changes in the base episode payments established by the Medicare program; (g) adjustments to the base episode payments for case mix and geographic wages; and (h) recoveries of overpayments. The Company makes adjustments to Medicare revenue on completed episodes to reflect differences between estimated and actual payment amounts, an inability to obtain appropriate billing documentation and other reasons unrelated to credit risk. Revenue is also adjusted for estimates for variable consideration. Therefore, the Company believes that its reported net service revenue and patient accounts receivable will be the net amounts to be realized from Medicare for services rendered. In addition to revenue recognized on completed episodes, the Company also recognizes a portion of revenue associated with episodes in progress. Episodes in progress are 60-day episodes of care that begin during the reporting period, but were not completed as of the end of the period. As such, the Company estimates revenue and recognizes it on a daily basis. The primary factors underlying this estimate are the number of episodes in progress at the end of the reporting period, expected Medicare revenue per episode and the Company’s estimate of the average percentage complete based on visits performed. Non-Medicare Revenue Episodic Based Revenue - The Company recognizes revenue in a similar manner as it recognizes Medicare revenue for episodic-based rates that are paid by other insurance carriers, including Medicare Advantage programs; however, these rates can vary based upon the negotiated terms. Non-episodic Based Revenue - Revenue is recorded on an accrual basis based upon the date of service at amounts equal to its established or estimated per visit rates, as applicable. Hospice Revenue Revenue is recorded on an accrual basis based upon the date of service at amounts equal to the estimated payment rates. The estimated payment rates are daily rates for each of the levels of care the Company delivers. The payment is adjusted for an inability to obtain appropriate billing documentation or authorizations acceptable to the payor and other reasons unrelated to credit risk. Additionally, as Medicare hospice revenue is subject to an inpatient cap and an overall payment cap, the Company monitors its provider numbers and estimates amounts due back to Medicare if a cap has been exceeded. The Company records these adjustments as a reduction to revenue and increases to other accrued liabilities. Revenue for the three and nine months ended September 30, 2019 and 2018 is summarized in the following tables: Three Months Ended September 30, 2019 2018 Revenue % of Revenue Revenue % of Revenue Medicaid $ 218,725 36.4 % $ 188,486 36.6 % Medicare 157,046 26.2 133,554 26.0 Medicaid — skilled 34,080 5.7 30,684 6.0 Total Medicaid and Medicare 409,851 68.3 352,724 68.6 Managed care 96,095 16.0 80,196 15.6 Private and other (1) 94,561 15.7 81,444 15.8 Revenue $ 600,507 100.0 % $ 514,364 100.0 % (1) Private and other payors also includes revenue from all payors generated in other ancillary services for the three months ended September 30, 2019 and 2018. Nine Months Ended September 30, 2019 2018 Revenue % of Revenue % of Medicaid $ 620,539 36.0 % $ 529,280 35.2 % Medicare 457,953 26.5 409,681 27.3 Medicaid — skilled 96,323 5.6 86,024 5.7 Total Medicaid and Medicare 1,174,815 68.1 1,024,985 68.2 Managed care 279,633 16.2 244,062 16.2 Private and other (1) 270,924 15.7 233,837 15.6 Revenue $ 1,725,372 100.0 % $ 1,502,884 100.0 % (1) Private and other payors also includes revenue from all payors generated in other ancillary services for the nine months ended September 30, 2019 and 2018. Balance Sheet Impact Included in the Company’s condensed consolidated balance sheet are contract assets, comprised of billed accounts receivable and unbilled receivables, which are the result of the timing of revenue recognition, billings and cash collections, as well as, contract liabilities, which primarily represent payments the Company receives in advance of services provided. The Company had no material contract liabilities as of September 30, 2019 and December 31, 2018 , or activity during the three and nine months ended September 30, 2019 and 2018. Accounts receivable as of September 30, 2019 and December 31, 2018 is summarized in the following table: September 30, 2019 December 31, 2018 Medicaid $ 131,763 $ 117,984 Managed care 62,003 54,682 Medicare 57,704 50,994 Private and other payors 60,330 55,325 311,800 278,985 Less: allowance for doubtful accounts (3,707 ) (2,886 ) Accounts receivable, net $ 308,093 $ 276,099 Practical Expedients and Exemptions As the Company’s contracts with its patients have an original duration of one year or less, the Company uses the practical expedient applicable to its contracts and does not consider the time value of money. Further, because of the short duration of these contracts, the Company has not disclosed the transaction price for the remaining performance obligations as of the end of each reporting period or when the Company expects to recognize this revenue. In addition, the Company has applied the practical expedient provided by ASC 340, Other Assets and Deferred Costs |
Computation of Net Income Per C
Computation of Net Income Per Common Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
COMPUTATION OF NET INCOME PER COMMON SHARE | COMPUTATION OF NET INCOME PER COMMON SHARE Basic net income per share is computed by dividing income from continuing operations attributable to stockholders of The Ensign Group, Inc. by the weighted average number of outstanding common shares for the period. The computation of diluted net income per share is similar to the computation of basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. A reconciliation of the numerator and denominator used in the calculation of basic net income per common share follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net income $ 27,828 $ 20,350 $ 84,360 $ 65,969 Less: net income/(loss) attributable to noncontrolling interests 669 (511 ) 1,220 (35 ) Net income attributable to The Ensign Group, Inc. $ 27,159 $ 20,861 $ 83,140 $ 66,004 Denominator: Weighted average shares outstanding for basic net income per share 53,941 52,139 53,470 51,870 Basic net income per common share attributable to The Ensign Group, Inc. $ 0.50 $ 0.40 $ 1.55 $ 1.27 A reconciliation of the numerator and denominator used in the calculation of diluted net income per common share follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net income $ 27,828 $ 20,350 $ 84,360 $ 65,969 Less: net income/(loss) attributable to noncontrolling interests 669 (511 ) 1,220 (35 ) Net income attributable to The Ensign Group, Inc. $ 27,159 $ 20,861 $ 83,140 $ 66,004 Denominator: Weighted average common shares outstanding 53,941 52,139 53,470 51,870 Plus: incremental shares from assumed conversion (1) 2,423 2,493 2,584 2,306 Adjusted weighted average common shares outstanding 56,364 54,632 56,054 54,176 Diluted net income per common share attributable to The Ensign Group, Inc. $ 0.48 $ 0.38 $ 1.48 $ 1.22 (1) Options outstanding which are anti-dilutive and therefore not factored into the weighted average common shares amount above were 421 and 143 for the three and nine months ended September 30, 2019 , respectively, and 244 and 163 for the three and nine months ended September 30, 2018 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Cash and cash equivalents $ 44,396 $ — $ — $ 31,083 $ — $ — The Company's non-financial assets, which includes goodwill, intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis. However, on a periodic basis, or whenever events or changes in circumstances indicate that their carrying value may not be recoverable, the Company assesses its long-lived assets for impairment. When impairment has occurred, such long-lived assets are written down to fair value. See Note 3, Summary of Significant Accounting Policies for further discussion of the Company's significant accounting policies. Debt Security Investments - Held to Maturity At September 30, 2019 and December 31, 2018 , the Company had approximately $47,587 and $44,850 , respectively, in debt security investments which were classified as held to maturity and carried at amortized cost. The carrying value of the debt securities approximates fair value based on Level 1 inputs. The Company has the intent and ability to hold these debt securities to maturity. Further, as of September 30, 2019 , the debt security investments were held in AA, A and BBB rated debt securities. |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS The Company has three reportable operating segments: (1) transitional and skilled services, which includes the operation of skilled nursing facilities; (2) senior living services, which includes the operation of assisted and independent living facilities; and (3) home health and hospice services, which includes the Company's home health, hospice and home care businesses. The Company's Chief Executive Officer, who is its chief operating decision maker, or CODM, reviews financial information at the operating segment level. The Company also reports an “all other” category that includes results from its mobile diagnostics and other ancillary operations. These operations are neither significant individually nor in aggregate, and therefore do not constitute a reportable segment. The reporting segments are business units that offer different services and are managed separately to provide greater visibility into those operations. As of September 30, 2019 , transitional and skilled services included 175 wholly-owned affiliated skilled nursing operations and 27 campuses that provide skilled nursing and rehabilitative care services and senior living services. The Company provided room and board and social services through 57 wholly-owned affiliated senior living operations and 27 campuses as mentioned above. Home health, hospice and home care services were provided to patients through 63 affiliated agencies. As of September 30, 2019 , the Company held majority membership interests in other ancillary operations, which operating results are included in the "all other" category. The Company evaluates performance and allocates capital resources to each segment based on an operating model that is designed to maximize the quality of care provided and profitability. General and administrative expenses are not allocated to any segment for purposes of determining segment profit or loss, and are included in the "all other" category in the selected segment financial data that follows. The accounting policies of the reporting segments are the same as those described in Note 3 , Summary of Significant Accounting Policies. The Company's CODM does not review assets by segment in his resource allocation and therefore assets by segment are not disclosed below. Segment revenues by major payor source were as follows: Three Months Ended September 30, 2019 Transitional and Skilled Services Senior Living Services Home Health and Hospice Services All Other Total Revenue Revenue % Medicaid $ 202,665 $ 10,904 $ 5,156 $ — $ 218,725 36.4 % Medicare 119,633 — 37,413 — 157,046 26.2 Medicaid-skilled 34,080 — — — 34,080 5.7 Subtotal 356,378 10,904 42,569 — 409,851 68.3 Managed care 88,542 — 7,553 — 96,095 16.0 Private and other 41,053 32,892 5,049 15,567 (1) 94,561 15.7 Total revenue $ 485,973 $ 43,796 $ 55,171 $ 15,567 $ 600,507 100.0 % (1) Private and other payors also includes revenue from all payors generated in other ancillary services for the three months ended September 30, 2019. Three Months Ended September 30, 2018 Transitional and Skilled Services Senior Living Services Home Health and Hospice Services All Other Total Revenue Revenue % Medicaid $ 176,009 $ 9,284 $ 3,193 $ — $ 188,486 36.6 % Medicare 103,506 — 30,048 — 133,554 26.0 Medicaid-skilled 30,684 — — — 30,684 6.0 Subtotal 310,199 9,284 33,241 — 352,724 68.6 Managed care 73,897 — 6,299 — 80,196 15.6 Private and other 37,668 28,774 4,297 10,705 (1) 81,444 15.8 Total revenue $ 421,764 $ 38,058 $ 43,837 $ 10,705 $ 514,364 100.0 % (1) Private and other payors also includes revenue from all payors generated in other ancillary services for the three months ended September 30, 2018. Nine Months Ended September 30, 2019 Transitional and Skilled Services Senior Living Services Home Health and Hospice Services All Other Total Revenue Revenue % Medicaid $ 576,504 $ 31,039 $ 12,996 $ — $ 620,539 36.0 % Medicare 355,141 — 102,812 — 457,953 26.5 Medicaid-skilled 96,323 — — — 96,323 5.6 Subtotal 1,027,968 31,039 115,808 — 1,174,815 68.1 Managed care 258,205 — 21,428 — 279,633 16.2 Private and other 118,296 95,497 14,260 42,871 (1) 270,924 15.7 Total revenue $ 1,404,469 $ 126,536 $ 151,496 $ 42,871 $ 1,725,372 100.0 % (1) Private and other payors also includes revenue from all payors generated in other ancillary services for the nine months ended September 30, 2019. Nine Months Ended September 30, 2018 Transitional and Skilled Services Senior Living Services Home Health and Hospice Services All Other Total Revenue Revenue % Medicaid $ 494,104 $ 26,225 $ 8,951 $ — $ 529,280 35.2 % Medicare 323,696 — 85,985 — 409,681 27.3 Medicaid-skilled 86,024 — — — 86,024 5.7 Subtotal 903,824 26,225 94,936 — 1,024,985 68.2 Managed care 225,865 — 18,197 — 244,062 16.2 Private and other 107,609 85,110 11,711 29,407 (1) 233,837 15.6 Total revenue $ 1,237,298 $ 111,335 $ 124,844 $ 29,407 $ 1,502,884 100.0 % (1) Private and other payors also includes revenue from all payors generated in other ancillary services for the nine months ended September 30, 2018. The following table sets forth selected financial data consolidated by business segment: Three Months Ended September 30, 2019 Transitional and Skilled Services (4) Senior Living Services (4) Home Health and Hospice Services All Other (3) Elimination Total Revenue from external customers $ 485,973 $ 43,796 $ 55,171 $ 15,567 $ — $ 600,507 Intersegment revenue (1) 998 — — 2,389 (3,387 ) — Total revenue $ 486,971 $ 43,796 $ 55,171 $ 17,956 $ (3,387 ) $ 600,507 Segment income (loss) (2) $ 56,838 $ 2,815 $ 8,424 $ (29,132 ) $ — $ 38,945 Interest expense, net of interest income $ (3,164 ) Income before provision for income taxes $ 35,781 Depreciation and amortization $ 9,331 $ 2,127 $ 317 $ 2,544 $ — $ 14,319 (1) Intersegment revenue represents services provided at the Company's operating subsidiaries between the Company's business lines. (2) Segment income (loss) includes depreciation and amortization expense and excludes general and administrative expense and interest expense for transitional and skilled services, senior living services and home health and hospice services segments. Home health and hospice services segment income also excludes intercompany expenses for services provided at transitional and skilled operations of $998 . Including these expenses, home health and hospice services segment income would be $7,426 . Transitional and skilled services, senior living services and home health and hospice services segment income excludes intercompany expenses for services provided by the business lines that are included in the "All Other" category of $2,389 . (3) General and administrative expense are included in the "All Other" category. (4) The Company's campuses represent facilities that offer both skilled nursing and senior living services. Revenue and expenses related to skilled nursing and senior living services have been allocated and recorded in the respective reportable segment. Three Months Ended September 30, 2018 Transitional and Skilled Services (4) Senior Living Services (4) Home Health and Hospice Services All Other (3) Elimination Total Revenue from external customers $ 421,764 $ 38,058 $ 43,837 $ 10,705 $ — $ 514,364 Intersegment revenue (1) 857 — — 851 (1,708 ) — Total revenue $ 422,621 $ 38,058 $ 43,837 $ 11,556 $ (1,708 ) $ 514,364 Segment income (loss) (2) $ 46,350 $ 4,733 $ 7,297 $ (29,093 ) $ — $ 29,287 Interest expense, net of interest income $ (3,522 ) Income before provision for income taxes $ 25,765 Depreciation and amortization $ 8,061 $ 1,902 $ 263 $ 1,676 $ — $ 11,902 (1) Intersegment revenue represents services provided at the Company's operating subsidiaries between the Company's business lines. (2) Segment income (loss) includes depreciation and amortization expense and excludes general and administrative expense and interest expense for transitional and skilled services, senior living services and home health and hospice services segments. Home health and hospice services segment income also excludes intercompany expenses for services provided at transitional and skilled operations of $857 . Including these expenses, home health and hospice services segment income would be $6,440 . Transitional and skilled services, senior living services and home health and hospice services segment income excludes intercompany expenses for services provided by the business lines that are included in the "All Other" category of $851 . (3) General and administrative expense is included in the "All Other" category. (4) The Company's campuses represent facilities that offer both skilled nursing and senior living services. Revenue and expenses related to skilled nursing and senior living services have been allocated and recorded in the respective reportable segment. Nine Months Ended September 30, 2019 Transitional and Skilled Services (4) Senior Living Services (4) Home Health and Hospice Services All Other (3) Elimination Total Revenue from external customers $ 1,404,469 $ 126,536 $ 151,496 $ 42,871 $ — $ 1,725,372 Intersegment revenue (1) 2,493 — — 6,250 (8,743 ) — Total revenue $ 1,406,962 $ 126,536 $ 151,496 $ 49,121 $ (8,743 ) $ 1,725,372 Segment income (loss) (2) $ 172,254 $ 12,674 $ 22,598 $ (92,931 ) $ — $ 114,595 Interest expense, net of interest income $ (9,630 ) Income before provision for income taxes $ 104,965 Depreciation and amortization $ 26,883 $ 6,046 $ 897 $ 6,275 $ — $ 40,101 (1) Intersegment revenue represents services provided at the Company's operating subsidiaries between the Company's business lines. (2) Segment income (loss) includes depreciation and amortization expense and excludes general and administrative expense and interest expense for transitional and skilled services, senior living services and home health and hospice services segments. Home health and hospice services segment income also excludes intercompany expenses for services provided at transitional and skilled operations of $2,493 . Including these expenses, home health and hospice services segment income would be $20,105 . Transitional and skilled services, senior living services and home health and hospice services segment income excludes intercompany expenses for services provided by the business lines which are included in the "All Other" category of $6,250 . (3) General and administrative expense is included in the "All Other" category. (4) The Company's campuses represent facilities that offer both skilled nursing and senior living services. Revenue and expenses related to skilled nursing and senior living services have been allocated and recorded in the respective reportable segment. Nine Months Ended September 30, 2018 Transitional and Skilled Services (4) Senior Living Services (4) Home Health and Hospice Services All Other (3) Elimination Total Revenue from external customers $ 1,237,298 $ 111,335 $ 124,844 $ 29,407 $ — $ 1,502,884 Intersegment revenue (1) 2,191 — — 3,045 (5,236 ) — Total revenue $ 1,239,489 $ 111,335 $ 124,844 $ 32,452 $ (5,236 ) $ 1,502,884 Segment income (loss) (2) $ 135,755 $ 14,361 $ 19,623 $ (75,698 ) $ — $ 94,041 Interest expense, net of interest income $ (9,994 ) Income before provision for income taxes $ 84,047 Depreciation and amortization $ 23,571 $ 5,362 $ 789 $ 5,423 $ — $ 35,145 (1) Intersegment revenue represents services provided at the Company's operating subsidiaries between the Company's business lines. (2) Segment income (loss) includes depreciation and amortization expense and excludes general and administrative expense and interest expense for transitional and skilled services, senior living services and home health and hospice services segments. Home health and hospice services segment income also excludes intercompany expenses for services provided at transitional and skilled operations of $2,191 . Including these expenses, home health and hospice services segment income would be $17,432 . Transitional and skilled services, senior living services and home health and hospice services segment income excludes intercompany expenses for services provided by the business lines that are included in the "All Other" category of $3,045 . (3) General and administrative expense is included in the "All Other" category. (4) The Company's campuses represent facilities that offer both skilled nursing and senior living services. Revenue and expenses related to skilled nursing and senior living services have been allocated and recorded in the respective reportable segment. The Company's senior living services segment income for the three and nine months ended September 30, 2019 included an impairment charge to long-lived assets of $1,471 . In addition, during the first quarter of 2019, the Company completed the sale of one of its senior living operations for an aggregate sale price of $1,838 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS The Company's subsidiaries' acquisition focus is to purchase or lease operations that are complementary to the current affiliated operations, accretive to the business or otherwise advance the Company's strategy. The results of all operating subsidiaries are included in the accompanying Interim Financial Statements subsequent to the date of acquisition. Acquisitions are accounted for using the acquisition method of accounting. The Company's affiliated operations also enter into long-term leases that may include options to purchase the facilities. As a result, from time to time, the affiliated operations will acquire facilities that have been operating under third-party leases. During the nine months ended September 30, 2019 , the Company expanded its operations through a combination of long-term leases and real estate purchases, with the addition of eleven stand-alone skilled nursing operations, two stand-alone senior living operations, three campus operations, two home health agencies, five hospice agencies and two home care agencies. The addition of these operations added a total of 1,454 operational skilled nursing beds and 455 operational senior living units to be operated by the Company's affiliated operating subsidiaries. For the acquisitions through long-term leases, the Company did not acquire any material assets or assume any liabilities other than the tenant's post-assumption rights and obligations under the long-term lease. The Company also invested in new ancillary services that are complementary to its existing businesses. The Company entered into a separate operations transfer agreement with the prior operator as part of each transaction. In addition, the Company acquired real estate for $10,735 . The aggregate purchase price for these acquisitions during the nine months ended September 30, 2019 was $101,463 . The fair value of assets for 18 of the acquisitions was concentrated in property and equipment and as such, these transactions were classified as asset acquisitions. The purchase price for the 18 asset acquisitions was $75,326 , which mainly consisted of building and improvements of $48,383 and land of $23,940 . The fair value of assets for the remaining ten acquisitions was concentrated in goodwill and as such, these transactions were classified as business acquisitions. The purchase price for the ten business combinations was $26,137 , which mainly consisted of goodwill and indefinite-lived intangible assets of $24,218 . The Company also entered into a note payable with the seller of $924 , which was subsequently paid off in the second quarter of 2019 and included in the payments on revolving credit facility and other debt line item in the condensed consolidated statement of cash flow. As of the date of this filing, the preliminary allocation of the purchase price for the acquisitions in the third quarter was not finalized as necessary valuation information was not yet available. During the nine months ended September 30, 2018 , the Company expanded its operations through a combination of a long-term lease and real estate purchases, with the addition of three stand-alone skilled nursing operations, two stand-alone assisted living operations, one campus operation, two home health agencies, one hospice agency and one home care agency. The Company did not acquire any material assets or assume any liabilities other than tenant's post-assumption rights and obligations under the long-term lease. The addition of these operations added 468 operational skilled nursing beds and 218 assisted living units to be operated by the Company's affiliated operating subsidiaries. In addition, with the stand-alone skilled nursing operation acquisition, the Company acquired real estate that included an adjacent long-term acute care hospital that is currently operated by a third party under a lease arrangement. The Company entered into a separate operations transfer agreement with the prior operator as part of each transaction. In addition, in June 2018, the Company acquired an office building for a purchase price of $30,959 to accommodate its growing Service Center team. The aggregate purchase price for these acquisitions during the nine months ended September 30, 2018 was $59,484 . The fair value of assets for nine of the acquisitions was concentrated in property and equipment and as such, these transactions were classified as asset acquisitions. The fair value of assets for the remaining two acquisitions was concentrated in goodwill and as such, these transactions were classified as business acquisitions. The purchase price for the two business combinations was $1,625 , mainly consisted of goodwill and indefinite-lived intangible assets of $1,609 . The Company’s acquisition strategy has been focused on identifying both opportunistic and strategic acquisitions within its target markets that offer strong opportunities for return. The operating subsidiaries acquired by the Company are frequently underperforming financially and can have regulatory and clinical challenges to overcome. Financial information, especially with underperforming operating subsidiaries, is often inadequate, inaccurate or unavailable. Consequently, the Company believes that prior operating results are not a meaningful representation of the Company’s current operating results or indicative of the integration potential of its newly acquired operating subsidiaries. The businesses acquired during the nine months ended September 30, 2019 were not material acquisitions to the Company individually or in the aggregate. Accordingly, pro forma financial information is not presented. These acquisitions have been included in the September 30, 2019 condensed consolidated balance sheets of the Company, and the operating results have been included in the condensed consolidated statements of operations of the Company since the dates the Company gained effective control. Subsequent to September 30, 2019 , the Company expanded its operations through a long-term lease, with the addition of one stand-alone independent living operation. The Company did not acquire any material assets or assume any liabilities other than the tenant's post-assumption rights and obligations under the long-term lease. The addition of this operations added a total of 58 |
Property and Equipment _ Net
Property and Equipment — Net | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT— Net | PROPERTY AND EQUIPMENT— Net Property and equipment, net consist of the following: September 30, 2019 December 31, 2018 Land $ 81,303 $ 60,420 Buildings and improvements 471,221 411,096 Equipment 228,368 202,346 Furniture and fixtures 5,911 5,079 Leasehold improvements 130,921 112,935 Construction in progress 8,056 9,729 925,780 801,605 Less: accumulated depreciation (217,556 ) (182,731 ) Property and equipment, net $ 708,224 $ 618,874 During the third quarter of 2019, the Company completed the sale of real estate for $5,300 and recognized a gain of $2,861 related to the transaction. In addition, management evaluated its long-lived assets and recorded an impairment charge of $1,471 during the nine months ended September 30, 2019 . See also Note 8, Acquisitions for information on acquisitions during the nine months ended September 30, 2019 |
Intangible Assets - Net
Intangible Assets - Net | 9 Months Ended |
Sep. 30, 2019 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTANGIBLE ASSETS — NET | INTANGIBLE ASSETS — Net Weighted Average Life (Years) September 30, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Intangible Assets Net Net Lease acquisition costs 1.7 $ 360 $ (294 ) 66 $ 843 $ (251 ) $ 592 Favorable leases 2.1 534 (382 ) 152 35,650 (8,724 ) 26,926 Assembled occupancy 0.4 3,261 (3,166 ) 95 2,936 (2,870 ) 66 Facility trade name 30.0 733 (336 ) 397 733 (317 ) 416 Customer relationships 16.7 5,110 (2,279 ) 2,831 4,670 (1,670 ) 3,000 Total $ 9,998 $ (6,457 ) $ 3,541 $ 44,832 $ (13,832 ) $ 31,000 During the three and nine months ended September 30, 2019 , amortization expense was $865 and $2,770 , of which $495 and $1,485 , respectively, was related to the amortization of right-of-use assets. Amortization expense was $761 and $2,067 for the three and nine months ended September 30, 2018 , respectively. Favorable leases and lease acquisition costs of $26,939 were reclassed to right-of-use assets as of January 1, 2019, as a part of the adoption of ASC 842. See Note 17, Leases . Estimated amortization expense for each of the years ending December 31 is as follows: Year Amount 2019 (remainder) $ 279 2020 345 2021 249 2022 249 2023 237 2024 234 Thereafter 1,948 $ 3,541 |
Goodwill and Other Indefinite-L
Goodwill and Other Indefinite-Lived Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS | GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS The Company tests goodwill during the fourth quarter of each year or more often if events or circumstances indicate there may be impairment. The Company performs its analysis for each reporting unit that constitutes a business for which discrete financial information is produced and reviewed by operating segment management and provides services that are distinct from the other components of the operating segment, in accordance with the provisions of Accounting Standards Codification topic 350, Intangibles—Goodwill and Other (ASC 350). This guidance provides the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value, a "Step 0" analysis. If, based on a review of qualitative factors, it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company performs "Step 1" of the traditional two-step goodwill impairment test by comparing the net assets of each reporting unit to their respective fair values. The Company determines the estimated fair value of each reporting unit using a discounted cash flow analysis. In the event a unit's net assets exceed its fair value, an implied fair value of goodwill must be determined by assigning the unit's fair value to each asset and liability of the unit. The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. An impairment loss is measured by the difference between the goodwill carrying value and the implied fair value. The Company anticipates that the majority of total goodwill recognized will be fully deductible for tax purposes as of September 30, 2019 . See further discussion of goodwill acquired at Note 8, Acquisitions . The following table represents activity in goodwill by segment as of and for the nine months ended September 30, 2019 : Goodwill Transitional and Skilled Services Senior Living Services Home Health and Hospice Services All Other Total January 1, 2019 $ 45,486 $ 3,958 $ 27,250 $ 3,783 $ 80,477 Additions — — 10,341 5,381 15,722 September 30, 2019 $ 45,486 $ 3,958 $ 37,591 $ 9,164 $ 96,199 The Company recorded an impairment charge to goodwill and intangible assets of $3,653 for the three and nine months ended September 30, 2018 on one of its ancillary operations, which mainly consists of $3,513 of goodwill impairment. Management determined that the improvements in operations and related forecasted cash flows were slower than anticipated at the time of acquisition, resulting in the impairment to goodwill. The Company did no t record any impairment charge to goodwill and other intangible assets during the three and nine months ended September 30, 2019 . See further discussion of goodwill acquired at Note 8, Acquisitions . Other indefinite-lived intangible assets consists of the following: September 30, 2019 December 31, 2018 Trade name $ 1,244 $ 1,217 Medicare and Medicaid licenses 34,854 26,385 $ 36,098 $ 27,602 As of the date of this filing, the preliminary allocation of the purchase price for the acquisitions in the third quarter, mentioned in Note 8, Acquisitions |
Restricted and Other Assets
Restricted and Other Assets | 9 Months Ended |
Sep. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
RESTRICTED AND OTHER ASSETS | RESTRICTED AND OTHER ASSETS Restricted and other assets consist of the following: September 30, 2019 December 31, 2018 Debt issuance costs, net $ 1,214 $ 1,892 Long-term insurance losses recoverable asset 7,899 6,969 Deposits with landlords 4,580 8,694 Capital improvement reserves with landlords and lenders 3,599 3,196 Note receivable from sale of ancillary business 59 93 Restricted and other assets $ 17,351 $ 20,844 Included in restricted and other assets as of September 30, 2019 and December 31, 2018 are anticipated insurance recoveries related to the Company's workers' compensation, general and professional liability claims that are recorded on a gross rather than net basis in accordance with an Accounting Standards Update issued by the FASB. Prepaid rent of $5,220 , previously included in deposits with landlords above, were reclassed to right-of-use assets as of January 1, 2019, as part of the adoption of ASC 842. See Note 17, Leases . |
Other Accrued Liabilities
Other Accrued Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
OTHER ACCRUED LIABILITIES | OTHER ACCRUED LIABILITIES Other accrued liabilities consist of the following: September 30, 2019 December 31, 2018 Quality assurance fee $ 5,889 $ 5,375 Refunds payable 29,747 25,118 Resident advances 10,155 8,495 Cash held in trust for patients 2,975 2,824 Resident deposits 8,080 6,665 Dividends payable 2,564 2,525 Property taxes 11,085 9,426 Other 13,755 9,356 Other accrued liabilities $ 84,250 $ 69,784 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recorded income tax expense of $20,605 and $18,078 during the nine months ended September 30, 2019 and 2018 , respectively, or 19.6% of earnings before income taxes for the nine months ended September 30, 2019 , compared to 21.5% for the nine months ended September 30, 2018 . The effective tax rate for both nine month periods includes excess tax benefits from stock-based compensation which were offset by non-deductible expenses including non-deductible compensation. Moreover, in the three months ended September 30, 2019 , California Internal Revenue Code conforms to portions of the Tax Cuts and Job Act increasing the Company's state tax rate. The Company is not currently under examination by any major income tax jurisdiction. During 2019, the statutes of limitations will lapse on the Company's 2015 Federal tax year and certain 2014 and 2015 state tax years. The Company does not believe the Federal or state statute lapses or any other event will significantly impact the balance of unrecognized tax benefits in the next twelve months. The net balance of unrecognized tax benefits was not material to the Interim Financial Statements for the nine months ended September 30, 2019 and 2018 . The Company implemented ASC 842 as described in the Summary of Significant Accounting Policies. The new lease standard reduced net deferred assets by $3,044 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Long-term debt consists of the following: September 30, 2019 December 31, 2018 Term loan with SunTrust $ 107,500 $ 113,125 Revolving credit facility with SunTrust 50,000 10,000 Mortgage loans and promissory note 121,010 122,955 278,510 246,080 Less: current maturities (10,177 ) (10,105 ) Less: debt issuance costs (2,641 ) (2,840 ) $ 265,692 $ 233,135 Credit Facility with a Lending Consortium Arranged by SunTrust The Company maintains a credit facility with a lending consortium arranged by SunTrust Bank, Inc. ("SunTrust") (as amended to date, the Credit Facility). The Company originally entered into the Credit Facility in an aggregate principal amount of $150,000 in May 2014. Under the Credit Facility, the Company could seek to obtain incremental revolving or term loans in an aggregate amount not to exceed $75,000 . On February 5, 2016, the Company amended its existing revolving credit facility to increase its aggregate principal amount available to $250,000 (the Amended Credit Facility). Under the credit facility, the Company may seek to obtain incremental revolving or term loans in an aggregate amount not to exceed $150,000 . The interest rates applicable to loans under the credit facility are, at the Company's option, equal to either a base rate plus a margin ranging from 0.75% to 1.75% per annum or LIBOR plus a margin ranging from 1.75% to 2.75% per annum, based on the Consolidated Total Net Debt to Consolidated EBITDA ratio (as defined in the agreement). In addition, the Company pays a commitment fee on the unused portion of the commitments under the credit facility that will range from 0.30% to 0.50% per annum, depending on the Consolidated Total Net Debt to Consolidated EBITDA ratio of the Company and its subsidiaries. The Company is permitted to prepay all or any portion of the loans under the credit facility prior to maturity without premium or penalty, subject to reimbursement of any LIBOR breakage costs of the lenders. On July 19, 2016, the Company entered into the second amendment to the credit facility (Second Amended Credit Facility), which amended the existing credit agreement to increase the aggregate principal amount up to $450,000 . The Second Amended Credit Facility is comprised of a $300,000 revolving credit facility and a $150,000 term loan. Borrowings under the term loan portion of the Second Amended Credit Facility mature on February 5, 2021 and amortize in equal quarterly installments, in an aggregate annual amount equal to 5.00% per annum of the original principal amount. The interest rates and commitment fee applicable to the Second Amended Credit Facility are similar to the Amended Credit Facility discussed below. Except as set forth in the Second Amended Credit Facility, all other terms and conditions of the Amended Credit Facility remained in full force and effect as described below. The Credit Facility is guaranteed, jointly and severally, by certain of the Company’s wholly owned subsidiaries, and is secured by a pledge of stock of the Company's material operating subsidiaries as well as a first lien on substantially all of its personal property. The credit facility contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its operating subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, amend certain material agreements and pay certain dividends and other restricted payments. Under the Credit Facility, the Company must comply with financial maintenance covenants to be tested quarterly, consisting of a maximum Consolidated Total Net Debt to consolidated EBITDA ratio (which shall be increased to 3.50 : 1.00 for the first fiscal quarter and the immediate following three fiscal quarters), and a minimum interest/rent coverage ratio (which cannot be below 1.50 : 1.00 ). The majority of lenders can require that the Company and its operating subsidiaries mortgage certain of its real property assets to secure the Amended Credit Facility if an event of default occurs, the Consolidated Total Net Debt to consolidated EBITDA ratio is above 2.75 : 1.00 for two consecutive fiscal quarters, or its liquidity is equal or less than 10% of the Aggregate Revolving Commitment Amount (as defined in the agreement) for ten consecutive business days, provided that such mortgages will no longer be required if the event of default is cured, the Consolidated Total Net Debt to consolidated EBITDA ratio is below 2.75 : 1.00 for two consecutive fiscal quarters, or its liquidity is above 10% of the Aggregate Revolving Commitment Amount (as defined in the agreement) or ninety consecutive days, as applicable. As of September 30, 2019 , the Company's operating subsidiaries had $157,500 outstanding under the Credit Facility. The outstanding balance on the term loan was $107,500 , of which $7,500 is classified as short-term and the remaining $100,000 is classified as long-term. The outstanding balance on the revolving Credit Facility was $50,000 , which is classified as long-term. The Company was in compliance with all loan covenants as of September 30, 2019 . On October 1, 2019, in connection with the Spin-Off, the Company entered into the third amendment to the current amended credit facility (Third Amended and Restated Credit Facility), with a revolving line of credit of up to $350,000 in aggregate principal. The maturity date of the Third Amended and Restated Credit Facility is October 1, 2024. Borrowings are supported by a lending consortium arranged by SunTrust. In connection with the amendment, the Company also terminated the term loan under the current amended credit facility, which had an aggregate outstanding principal amount of $107,500 , plus accrued and unpaid interest on September 30, 2019. The interest rates applicable to loans under the credit facility are, at the Company's option, equal to either a base rate plus a margin ranging from 0.50% to 1.50% per annum or LIBOR plus a margin range from 1.50% to 2.50% per annum, based on the Consolidated Total Net Debt to Consolidated EBITDA ratio (as defined in the agreement). In addition, the Company will pay a commitment fee on the unused portion of the commitments that will range from 0.25% to 0.45% per annum, depending on the Consolidated Total Net Debt to Consolidated EBITDA ratio. As of October 28, 2019 , there was approximately $150,000 outstanding under the Credit Facility. Mortgage Loans and Promissory Note In December 2017, 17 of the Company's subsidiaries entered into mortgage loans in the aggregate amount of $112,000 . The mortgage loans are insured with Department of Housing and Urban Development (HUD), which subjects these subsidiaries to HUD oversight and periodic inspections. The mortgage loans and note bear fixed interest rates of 3.3% per annum. Amounts borrowed under the mortgage loans may be prepaid, subject to prepayment fees of the principal balance on the date of prepayment. During the first three years, the prepayment fee is 10% and is reduced by 3% in the fourth year of the loan, and reduced by 1.0% per year for years five through ten of the loan. There is no prepayment penalty after year ten . The terms of the mortgage loans are 30 to 35 years . The borrowings were arranged by Lancaster Pollard Mortgage Company, LLC, and insured by HUD. Loan proceeds were used to pay down previously drawn amounts on Ensign's revolving line of credit. In addition to refinancing existing borrowings, the proceeds of the HUD-insured debt helped fund acquisitions, to renovate and upgrade existing and future facilities, to cover working capital needs and for other business purposes. In addition to the HUD mortgage loans above, the Company had outstanding indebtedness under mortgage loans insured with HUD and a promissory note issued in connection with various acquisitions. These mortgage loans and note bear fixed interest rates between 2.6% and 5.3% per annum. Amounts borrowed under the mortgage loans may be prepaid starting after the second anniversary of the notes subject to prepayment fees of the principal balance on the date of prepayment. These prepayment fees are reduced by 1.0% per year for years three through 11 of the loan. There is no prepayment penalty after year 11 . The term of the mortgage loans and the note is between 12 and 33 years . The mortgage loans and note are secured by the real property comprising the facilities and the rents, issues and profits thereof, as well as all personal property used in the operation of the facilities. As of September 30, 2019 , the Company's operating subsidiaries had $121,010 outstanding under the mortgage loans and note, of which $2,677 is classified as short-term and the remaining $118,333 is classified as long-term. The Company was in compliance with all loan covenants as of September 30, 2019 . Based on Level 2, the carrying value of the Company's long-term debt is considered to approximate the fair value of such debt for all periods presented based upon the interest rates that the Company believes it can currently obtain for similar debt. Off-Balance Sheet Arrangements As of September 30, 2019 , the Company had approximately $5,342 |
Options and Awards
Options and Awards | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
OPTIONS AND AWARDS | OPTIONS AND AWARDS Stock-based compensation expense consists of share-based payment awards made to employees and directors, including employee stock options and restricted stock awards, based on estimated fair values. As stock-based compensation expense recognized in the Company’s condensed consolidated statements of income for the three and nine months ended September 30, 2019 and 2018 was based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. The Company estimates forfeitures at the time of grant and, if necessary, revises the estimate in subsequent periods if actual forfeitures differ. Stock Options 2017 Omnibus Incentive Plan - The Company has one active stock incentive plan, the 2017 Omnibus Incentive Plan (the 2017 Plan). The 2017 Plan provides for the issuance of 6,881 shares of common stock. The number of shares available to be issued under the 2017 Plan will be reduced by (i) one share for each share that relates to an option or stock appreciation right award and (ii) 2.5 shares for each share which relates to an award other than a stock option or stock appreciation right award (a full-value award). Granted non-employee director options vest and become exercisable in three equal annual installments, or the length of the term if less than three years , on the completion of each year of service measured from the grant date. All other options generally vest over 5 years at 20% per year on the anniversary of the grant date. Options expire 10 years from the date of grant. At September 30, 2019 , there were 3,638 unissued shares of common stock available for issuance under this plan. The Company uses the Black-Scholes option-pricing model to recognize the value of stock-based compensation expense for all share-based payment awards. Determining the appropriate fair-value model and calculating the fair value of stock-based awards at the grant date requires considerable judgment, including estimating stock price volatility, expected option life and forfeiture rates. The Company develops estimates based on historical data and market information, which can change significantly over time. The Company granted 553 options and 252 restricted stock awards from the 2017 Plan during the nine months ended September 30, 2019 . The Company used the following assumptions for stock options granted during the three months ended September 30, 2019 and 2018 : Grant Year Options Granted Weighted Average Risk-Free Rate Expected Life Weighted Average Volatility Weighted Average Dividend Yield 2019 154 1.5% 6.2 years 34.0% 0.4% 2018 101 2.8% 6.3 years 32.0% 0.5% The Company used the following assumptions for stock options granted during the nine months ended September 30, 2019 and 2018 : Grant Year Options Granted Weighted Average Risk-Free Rate Expected Life Weighted Average Volatility Weighted Average Dividend Yield 2019 553 2.0% 6.2 years 33.9% 0.4% 2018 496 2.7% 6.2 years 32.0% 0.5% For the nine months ended September 30, 2019 and 2018 , the following represents the exercise price and fair value displayed at grant date for stock option grants: Grant Year Granted Weighted Average Exercise Price Weighted Average Fair Value of Options 2019 553 $ 53.05 $ 18.89 2018 496 $ 33.61 $ 11.64 The weighted average exercise price equaled the weighted average fair value of common stock on the grant date for all options granted during the periods ended September 30, 2019 and 2018 and therefore, the intrinsic value was $0 at the date of grant. The following table represents the employee stock option activity during the nine months ended September 30, 2019 : Number of Options Outstanding Weighted Average Exercise Price Number of Options Vested Weighted Average Exercise Price of Options Vested January 1, 2019 4,188 $ 17.35 2,431 $ 12.37 Granted 553 53.05 Forfeited (46 ) 31.26 Exercised (687 ) 10.74 September 30, 2019 4,008 $ 23.24 2,364 $ 14.52 The following summary information reflects stock options outstanding, vested and related details as of September 30, 2019 : Stock Options Outstanding Stock Options Vested Number Outstanding Black-Scholes Fair Value Remaining Contractual Life (Years) Vested and Exercisable Year of Grant Exercise Price 2009 $4.06 - $4.56 33 $ 67 0 33 2010 4.77 - 4.96 38 93 1 38 2011 5.90 - 7.99 73 249 2 73 2012 6.56 - 7.96 198 729 3 198 2013 7.98 - 11.49 322 1,552 4 322 2014 10.55 - 18.94 1,000 5,687 5 992 2015 21.47 - 25.24 422 3,838 6 302 2016 18.79 - 19.89 368 2,563 7 189 2017 18.64 - 22.90 412 2,876 8 130 2018 26.53 - 38.59 595 7,194 9 87 2019 $51.43 - $53.99 547 10,332 10 — Total 4,008 $ 35,180 2,364 Restricted Stock Awards The Company granted 58 and 252 restricted stock awards during the three and nine months ended September 30, 2019 , respectively. The Company granted 42 and 316 restricted stock awards during the three and nine months ended September 30, 2018 , respectively. All awards were granted at an issued price of $0 and generally vest over five years . The fair value per share of restricted awards granted during the nine months ended September 30, 2019 and 2018 ranged from $41.68 to $57.39 and $23.61 to $38.59 respectively. The fair value per share includes quarterly stock awards to non-employee directors. A summary of the status of the Company's non-vested restricted stock awards as of September 30, 2019 and changes during the nine months ended September 30, 2019 is presented below: Non-Vested Restricted Awards Weighted Average Grant Date Fair Value Nonvested at January 1, 2019 573 $ 29.31 Granted 252 52.13 Vested (210 ) 36.74 Forfeited (11 ) 34.91 Nonvested at September 30, 2019 604 $ 36.14 During the three and nine months ended September 30, 2019 , the Company granted 6 and 20 automatic quarterly stock awards to non-employee directors for their service on the Company's board of directors. The fair value per share of these stock awards ranged from $41.68 to $57.39 based on the market price on the grant date. Share-based compensation expense recognized for the Company's equity incentive plans for the three and nine months ended September 30, 2019 and 2018 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Share-based compensation expense related to stock options $ 1,291 $ 1,213 $ 4,113 $ 3,721 Share-based compensation expense related to restricted stock awards 1,347 968 3,544 2,220 Share-based compensation expense related to stock options and restricted stock awards to non-employee directors 323 281 982 668 Total $ 2,961 $ 2,462 $ 8,639 $ 6,609 In future periods, the Company expects to recognize approximately $18,941 and $19,984 in share-based compensation expense for unvested options and unvested restricted stock awards, respectively, that were outstanding as of September 30, 2019 . Future share-based compensation expense will be recognized over 3.9 weighted average years for both unvested options and restricted stock awards. There were 1,644 unvested and outstanding options at September 30, 2019 , of which 1,540 are expected to vest. The weighted average contractual life for options outstanding, vested and expected to vest at September 30, 2019 was 6.1 years. The aggregate intrinsic value of options outstanding, vested, expected to vest and exercised as of September 30, 2019 and December 31, 2018 is as follows: Options September 30, 2019 December 31, 2018 Outstanding $ 100,008 $ 89,806 Vested 77,801 64,222 Expected to vest 19,521 22,963 Exercisable 27,851 27,646 The intrinsic value is calculated as the difference between the market value of the underlying common stock and the exercise price of the options. Equity Instrument Denominated in the Shares of a Subsidiary On May 26, 2016, the Company granted stock options and restricted stock awards in the Subsidiary Equity Plan to employees and management of the subsidiary. The Company did no t grant any new restricted shares during the nine months ended September 30, 2019 and 2018 . These awards generally vest over a period of three to five years , or upon the occurrence of certain prescribed events. During both the nine months ended September 30, 2019 and 2018 , 976 restricted stock awards vested. The Company granted 221 stock options during the nine months ended September 30, 2018 . The Company did no t grant any new stock options during the nine months ended September 30, 2019 . The value of the stock options and restricted stock awards is tied to the value of the common stock of the subsidiary. The awards can be put to the Company at various prescribed dates, which in no event is earlier than six months after vesting of the restricted awards or exercise of the stock options. The Company can also call the awards, generally upon employee termination. The grant-date fair value of the awards is recognized as compensation expense over the relevant vesting periods, with a corresponding adjustment to noncontrolling interests. The grant values were determined based on an independent valuation of the subsidiary shares. For the three and nine months ended September 30, 2019 , the Company expensed $17 and $594 , respectively, in share-based compensation related to the Subsidiary Equity Plan. For the three and nine months ended September 30, 2018 , the Company expensed $348 and $1,030 , respectively, in share-based compensation related to the Subsidiary Equity Plan. The reduction in expense for the third quarter is related to the vesting completion for certain restricted shares, which vested over a period of three years. The aggregate number of the Company's common shares that would be required to settle these awards at current estimated fair values, including vested and unvested awards, at September 30, 2019 and 2018 is 485 and 222 , respectively. During the nine months ended September 30, 2019 and 2018 , the Company repurchased 534 and 865 shares of common stock, respectively, under the Subsidiary Equity Plan for $2,687 and $1,972 , respectively. The Company subsequently sold the shares and received net proceeds of $2,293 and $1,972 , respectively during the nine months ended September 30, 2019 and 2018 . The Company repurchased 65 shares of common stock under the Subsidiary Equity Plan for a total of $394 during the three months ended September 30, 2019 . |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases from CareTrust REIT, Inc. (CareTrust) real property associated with 93 affiliated skilled nursing, senior living facilities used in the Company’s operations under eight “triple-net” master lease agreements (collectively, the Master Leases), which range in terms from 12 to 20 years . At the Company’s option, the Master Leases may be extended for two or three five -year renewal terms beyond the initial term, on the same terms and conditions. The extension of the term of any of the Master Leases is subject to the following conditions: (1) no event of default under any of the Master Leases having occurred and being continuing; and (2) the tenants providing timely notice of their intent to renew. The term of the Master Leases is subject to termination prior to the expiration of the then current term upon default by the tenants in their obligations, if not cured within any applicable cure periods set forth in the Master Leases. If the Company elects to renew the term of a Master Lease, the renewal will be effective to all, but not less than all, of the leased property then subject to the Master Lease. The Company does not have the ability to terminate the obligations under a Master Lease prior to its expiration without CareTrust’s consent. If a Master Lease is terminated prior to its expiration other than with CareTrust’s consent, the Company may be liable for damages and incur charges such as continued payment of rent through the end of the lease term as well as maintenance and repair costs for the leased property. Commencing the third year, the rent structure under the Master Leases includes a fixed component, subject to annual escalation equal to the lesser of (1) the percentage change in the Consumer Price Index (but not less than zero) or (2) 2.5% . In addition to rent, the Company is required to pay the following: (1) all impositions and taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor); (2) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties; (3) all insurance required in connection with the leased properties and the business conducted on the leased properties; (4) all facility maintenance and repair costs; and (5) all fees in connection with any licenses or authorizations necessary or appropriate for the leased properties and the business conducted on the leased properties. Total rent expense under the Master Leases was approximately $15,250 and $45,146 for the three and nine months ended September 30, 2019 , respectively, and $14,778 and $43,734 for the three and nine months ended September 30, 2018 , respectively. Among other things, under the Master Leases, the Company must maintain compliance with specified financial covenants measured on a quarterly basis, including a portfolio coverage ratio and a minimum rent coverage ratio. The Master Leases also include certain reporting, legal and authorization requirements. The Company is not aware of any defaults as of September 30, 2019 . The Company also leases certain affiliated operations and its administrative offices under non-cancelable operating leases, most of which have initial lease terms ranging from five to 20 years . The Company has entered into multiple lease agreements with various landlords to operate newly constructed state-of-the-art, full-service healthcare resorts. The term of each lease is 15 years with two five -year renewal options and is subject to annual escalation equal to the percentage change in the Consumer Price Index with a stated cap percentage. In addition, the Company leases certain of its equipment under non-cancelable operating leases with initial terms ranging from three to five years . Most of these leases contain renewal options, certain of which involve rent increases. Total rent expense, inclusive of straight-line rent adjustments and rent associated with the Master Leases noted above, was $37,925 and $111,106 for the three and nine months ended September 30, 2019 , respectively, and $35,028 and $103,668 for the three and nine months ended September 30, 2018 , respectively. Thirty-nine of the Company’s affiliated facilities, excluding the facilities that are operated under the Master Leases with CareTrust, are operated under seven separate master lease arrangements. Under these master leases, a breach at a single facility could subject one or more of the other facilities covered by the same master lease to the same default risk. Failure to comply with Medicare and Medicaid provider requirements is a default under several of the Company’s leases, master lease agreements and debt financing instruments. In addition, other potential defaults related to an individual facility may cause a default of an entire master lease portfolio and could trigger cross-default provisions in the Company’s outstanding debt arrangements and other leases. With an indivisible lease, it is difficult to restructure the composition of the portfolio or economic terms of the lease without the consent of the landlord. Impact of New Leases Guidance As described further in Note 3, Summary of Significant Accounting Policies , the Company adopted Topic 842, Leases , as of January 1, 2019. Prior period amounts have not been adjusted and continue to be reported in accordance with our historic accounting under Topic 840. All of the Company's leases are classified as operating leases. The components of lease assets and liabilities are included in the condensed consolidated balance sheets. The following table summarizes the impact of the adoption of the new lease accounting guidance on the Company’s condensed consolidated balance sheet as of January 1, 2019 . Balance at December 31, 2018 Adjustments due to new lease guidance January 1, 2019 Balance at September 30, 2019 Total assets (1) $ 1,181,958 $ 1,015,937 $ 2,197,895 $ 2,359,549 Total liabilities (2) 579,618 1,006,907 1,586,525 1,657,743 Total equity 602,340 9,030 611,370 701,806 (1) Adjustment in assets includes the reclassification of intangible assets, prepaid rent and deferred rent into right-of-use assets and the decrease in deferred tax assets due to the removal of deferred gain related to sale-leaseback as of January 1, 2019. (2) Adjustment in liabilities includes the reclassification of other liabilities into lease liabilities and the removal of deferred gain related to sale-lease back as of January 1, 2019. The components of operating lease expense (1) , are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Rent - cost of services (2) $ 37,728 $ 34,851 $ 110,574 $ 103,173 General and administrative expense 197 177 532 495 Depreciation and amortization (3) 495 495 1,485 1,485 $ 38,420 $ 35,523 $ 112,591 $ 105,153 (1) Operating lease expenses include variable lease costs of $4,438 and $12,113 during the three and nine months ended September 30, 2019 , respectively. In addition, short-term leases are included in operating leases, which are immaterial. (2) Rent- cost of services includes the amortization of deferred rent of $138 and $309 for the three and nine months ended September 30, 2019 , respectively. (3) Depreciation and amortization is related to the amortization of favorable and direct lease costs. Future minimum lease payments for all leases as of September 30, 2019 are as follows: Year Amount 2019 (remainder) $ 36,720 2020 146,498 2021 145,662 2022 143,787 2023 141,954 2024 141,927 Thereafter 902,903 Total lease payments 1,659,451 Less: present value adjustment (624,138 ) Present value of total lease liabilities 1,035,313 Less: current lease liabilities (60,817 ) Long-term operating lease liabilities $ 974,496 Future minimum lease payments for all leases as of December 31, 2018 were as follows: Year Amount 2019 $ 142,497 2020 141,536 2021 140,524 2022 139,018 2023 137,349 Thereafter 967,027 Total lease payments $ 1,667,951 Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the lease commencement date. As of September 30, 2019 , the weighted average remaining lease term is 12 years and the weighted average discount rate used to determine the operating lease liability is 8.66% . On October 1, 2019, in connection with the Spin-Off, the Company amended the Master Leases with CareTrust and other third party lease agreements. These amendments terminate the leases related to the operations that transferred to Pennant and modified the rental payments and lease terms of the operations that remained with Ensign. In accordance with Topic 842, Leases, the amended lease agreements are considered to be modified and subject to lease modification guidance. The right-of-use (ROU) asset and lease liabilities related to these agreements will be remeasured based on the change in the lease conditions such as rent payment and lease terms. The incremental borrowing rate will also be adjusted to mirror the revised lease terms which become effective at the date of the modification, which is the date of the Spin-Off. The net impact of the lease termination, for the 23 leases that will be transferred to Pennant and modification of lease agreements, is a reduction in ROU asset and lease liabilities of approximately $35,000 , effective October 1, 2019. We will also guarantee leases of Pennant based on the underlying terms of the leases. In connection with the Spin-Off, Ensign affiliates retained ownership of the real estate at 29 senior living operations that were contributed to Pennant. All of these properties are leased to Pennant on a triple-net basis, where as the Pennant affiliates are responsible for all costs at the properties including (1) all impositions and taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor); (2) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties; (3) all insurance required in connection with the leased properties and the business conducted on the leased properties; (4) all facility maintenance and repair costs; and (5) all fees in connection with any licenses or authorizations necessary or appropriate for the leased properties and the business conducted on the leased properties. The initial terms range between 14 to 16 years . Annual rental income generated from the leases with Pennant is approximately $12,000 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Regulatory Matters — Laws and regulations governing Medicare and Medicaid programs are complex and subject to interpretation. Compliance with such laws and regulations can be subject to future governmental review and interpretation, as well as significant regulatory action including fines, penalties, and exclusion from certain governmental programs. Included in these laws and regulations is the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which requires healthcare providers (among other things) to safeguard the privacy and security of certain health information. In late December of 2016, the Company learned of a potential issue at one of its independent operating entities in Arizona which involved the limited and inadvertent disclosure of certain confidential information. The issue has been internally investigated, addressed and disclosed as is required by law. This matter was resolved in the second quarter of 2019. The Company believes that it is presently in compliance in all material respects with applicable HIPAA laws and regulations. Cost-Containment Measures — Both government and private pay sources have instituted cost-containment measures designed to limit payments made to providers of healthcare services, and there can be no assurance that future measures designed to limit payments made to providers will not adversely affect the Company. Indemnities — From time to time, the Company enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims. These contracts primarily include (i) certain real estate leases, under which the Company may be required to indemnify property owners or prior facility operators for post-transfer environmental or other liabilities and other claims arising from the Company’s use of the applicable premises, (ii) operations transfer agreements, in which the Company agrees to indemnify past operators of facilities the Company acquires against certain liabilities arising from the transfer of the operation and/or the operation thereof after the transfer to the Company's independent operating subsidiary, (iii) certain lending agreements, under which the Company may be required to indemnify the lender against various claims and liabilities, and (iv) certain agreements with the Company’s officers, directors and employees, under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationships. The terms of such obligations vary by contract and, in most instances, do not expressly state or include a specific or maximum dollar amount. Generally, amounts under these contracts cannot be reasonably estimated until a specific claim is asserted. Consequently, because no claims have been asserted, no liabilities have been recorded for these obligations on the Company’s condensed consolidated balance sheets for any of the periods presented. U.S. Department of Justice Civil Investigative Demand - On May 31, 2018, the Company received a Civil Investigative Demand (CID) from the U.S. Department of Justice stating that it is investigating whether there has been a violation of the False Claims Act and/or the Anti-Kickback Statute with respect to the relationships between certain of the Company’s independently operated skilled nursing facilities and persons who served as medical directors, advisory board participants or other potential referral sources. The CID covered the period from October 3, 2013 to the present, and was limited in scope to ten of the Company’s Southern California independent operating entities. In October 2018, the Department of Justice made an additional request for information covering the period of January 1, 2011 to the present, relating to the same topic. As a general matter, the Company’s independent operating entities maintain policies and procedures to promote compliance with the False Claims Act, the Anti-Kickback Statute, and other applicable regulatory requirements. The Company is fully cooperating with the U.S. Department of Justice to promptly respond to the requests for information. However, the Company cannot predict when the investigation will be resolved, the outcome of the investigation, or its potential impact on the Company. Litigation — The skilled nursing business involves a significant risk of liability given the age and health of the patients and residents served by the Company's independent operating subsidiaries. The Company, its independent operating subsidiaries, and others in the industry are subject to an increasing number of claims and lawsuits, including professional liability claims, alleging that services provided have resulted in personal injury, elder abuse, wrongful death or other related claims. The defense of these lawsuits may result in significant legal costs, regardless of the outcome, and can result in large settlement amounts or damage awards. In addition to the potential lawsuits and claims described above, the Company is also subject to potential lawsuits under the Federal False Claims Act and comparable state laws alleging submission of fraudulent claims for services to any healthcare program (such as Medicare) or payor. A violation may provide the basis for exclusion from Federally-funded healthcare programs. Such exclusions could have a correlative negative impact on the Company’s financial performance. Some states, including California, Arizona and Texas, have enacted similar whistleblower and false claims laws and regulations. In addition, the Deficit Reduction Act of 2005 created incentives for states to enact anti-fraud legislation modeled on the Federal False Claims Act. As such, the Company could face increased scrutiny, potential liability and legal expenses and costs based on claims under state false claims acts in markets in which its independent operating subsidiaries do business. In May 2009, Congress passed the Fraud Enforcement and Recovery Act (FERA) which made significant changes to the Federal False Claims Act (FCA) and expanded the types of activities subject to prosecution and whistleblower liability. Following changes by FERA, health care providers face significant penalties for the knowing retention of government overpayments, even if no false claim was involved. Health care providers can now be liable for knowingly and improperly avoiding or decreasing an obligation to pay money or property to the government. This includes the retention of any government overpayment. The government can argue, therefore, that a FCA violation can occur without any affirmative fraudulent action or statement, as long as it is knowingly improper. In addition, FERA extended protections against retaliation for whistleblowers, including protections not only for employees, but also contractors and agents. Thus, an employment relationship is generally not required in order to qualify for protection against retaliation for whistleblowing. Healthcare litigation (including class action litigation) is common and is filed based upon a wide variety of claims and theories, and the Company's independent operating subsidiaries are routinely subjected to varying types of claims. One particular type of suit arises from alleged violations of minimum staffing requirements for skilled nursing facilities in those states which have enacted such requirements. The alleged failure to meet these requirements can, among other things, jeopardize a facility's compliance with the requirements of participation under certain state and federal healthcare programs; it may also subject the facility to a deficiency, a citation, a civil money penalty, or litigation. These class-action “staffing” suits have the potential to result in large jury verdicts and settlements. The Company expects the plaintiffs' bar to continue to be aggressive in their pursuit of these staffing and similar claims. The Company and its independent operating subsidiaries have in the past been subject to class action litigation involving claims of alleged violations of regulatory requirements related to staffing. While the Company has been able to settle these claims without a material ongoing adverse effect on its business, future claims could be brought that may materially affect its business, financial condition and results of operations. Other claims and suits, including class actions, continue to be filed against the Company and other companies in its industry. For example, the Company has been subjected to, and is currently involved in, class action litigation alleging violations of state and federal wage and hour law as related to the alleged failure to pay wages and to timely provide and authorize meal and rest breaks. The Company does not believe that the ultimate resolution of these actions will have a material adverse effect on the Company’s business, cash flows, financial condition or results of operations. The Company and its independent operating subsidiaries have been, and continue to be, subject to claims and legal actions that arise in the ordinary course of business, including potential claims related to patient care and treatment, as well as employment related claims. A significant increase in the number of these claims, or an increase in the amounts owing should plaintiffs be successful in their prosecution of these claims, could materially adversely affect the Company’s business, financial condition, results of operations and cash flows. In August of 2011, the Company was named as a Defendant in a class action litigation alleging violations of state and federal wage and hour law. In January of 2017, the Company participated in an initial mediation session with plaintiffs' counsel. As a result of this discussion and due to (i) the fact no class had been certified (ii) the lack of specificity as to legal theories articulated by the plaintiffs (iii) the nature of the remedies sought and (iv) the lack of any basis upon which to compute estimated compensatory and/or exemplary damages, the Company could not predict what the outcome of the pending class action lawsuit would be, what the timing of the ultimate resolution of this lawsuit would be, or an estimate and/or range of possible loss related to it. In March of 2017, the Company was invited to engage in further settlement discussions to determine whether a resolution of the case was possible in advance of a decision on class certification. In April of 2017, the Company reached an agreement in principle to settle the subject class action litigation, without any admission of liability and subject to approval by the California Superior Court. Based upon the change in case status, the Company recorded an accrual for estimated probable losses of $11,000 , exclusive of legal fees, in the first quarter of 2017. The Company funded the settlement amount of $11,000 in December of 2017, and the funds were distributed to participating class members in the first quarter of 2018. The Company received back $1,664 related to unclaimed class settlement funds remaining after completion of the settlement process, and the recoveries were recorded in the first quarter of 2018. Other claims and suits continue to be filed against the Company, its independent operating entities, and other post-acute care providers. In addition, professional negligence claims have been filed and will likely continue to be filed against the Company's independent operating entities by residents or responsible parties. The Company cannot predict or provide any assurance as to the possible outcome of any inquiry, investigation or litigation. If any litigation were to proceed through trial, and the Company and its independent operating subsidiaries are subjected to, alleged to be liable for, or agree to a settlement of, claims or obligations under Federal Medicare statutes, the Federal False Claims Act, or similar State and Federal statutes and related regulations, or if the Company or its independent operating subsidiaries are alleged or found to be liable on theories of general or professional negligence, the Company's business, financial condition and results of operations and cash flows could be materially and adversely affected and its stock price could be adversely impacted. Among other things, any settlement or litigation could involve the payment of substantial sums to settle any alleged civil violations, and may also include the assumption of specific procedural and financial obligations by the Company or its subsidiaries going forward under a corporate integrity agreement and/or other such arrangements. Medicare Revenue Recoupments — The Company's independent operating entities are subject to regulatory reviews relating to Medicare services, billings and potential overpayments as a result of Recovery Audit Contractors (RAC), Zone Program Integrity Contractors (ZPIC), Program Safeguard Contractors (PSC), Unified Program Integrity Contractors (UPIC), Supplemental Medical Review Contractors (SMRC) and Medicaid Integrity Contractors (MIC) programs (collectively referred to as Reviews). As of September 30, 2019 , 13 of the Company's independent operating subsidiaries had Reviews scheduled, on appeal, or in a dispute resolution process, both pre- and post-payment. The Company anticipates that these Reviews will increase in frequency in the future. If an operation fails a Review and/or subsequent Reviews, the operation could then be subject to extended review or an extrapolation of the identified error rate to billings in the same time period. As of September 30, 2019 , the Company's independent operating subsidiaries have responded to the requests and the related claims are currently under review, on appeal or in a dispute resolution process. U.S. Government Inquiry and Corporate Integrity Agreement — In October 2013, the Company and its independent operating entities completed and executed a settlement agreement (the Settlement Agreement) with the DOJ, which received the final approval of the Office of Inspector General-HHS and the United States District Court for the Central District of California. Pursuant to the Settlement Agreement, the Company made a single lump-sum remittance to the government in the amount of $48,000 in October 2013. The Company and its independent operating entities have denied engaging in any illegal conduct and agreed to the settlement amount without any admission of wrongdoing in order to resolve the allegations and to avoid the uncertainty and expense of protracted litigation. In connection with the settlement and effective as of October 1, 2013, the Company and its independent operating entities entered into a five-year corporate integrity agreement (the CIA) with the Office of Inspector General-HHS. CMS acknowledged the existence of the Company’s current compliance program, which is in accord with the Office of the Inspector General (OIG)’s guidance related to an effective compliance program, and required that the Company and its independent operating entities continue during the term of the CIA to maintain a program designed to promote compliance with the statutes, regulations, and written directives of Medicare, Medicaid, and all other Federal health care programs. In the first quarter of 2019, the Company received notice from the OIG that the Company’s five-year CIA with the OIG had been completed. Upon receipt of the Company’s fifth and final annual report, the OIG confirmed that the term of the CIA is concluded. Concentrations Credit Risk — The Company has significant accounts receivable balances, the collectability of which is dependent on the availability of funds from certain governmental programs, primarily Medicare and Medicaid. These receivables represent the only significant concentration of credit risk for the Company. The Company does not believe there are significant credit risks associated with these governmental programs. The Company believes that an appropriate allowance has been recorded for the possibility of these receivables proving uncollectible, and continually monitors and adjusts these allowances as necessary. The Company’s receivables from Medicare and Medicaid payor programs accounted for approximately 60.8% and 60.6% of its total accounts receivable as of September 30, 2019 and December 31, 2018 , respectively. Revenue from reimbursement under the Medicare and Medicaid programs accounted for 68.3% and 68.1% of the Company's revenue for the three and nine months ended September 30, 2019 , respectively, and 68.6% and 68.2% of the Company's revenue for the three and nine months ended September 30, 2018 , respectively. Cash in Excess of FDIC Limits — The Company currently has bank deposits with financial institutions in the U.S. that exceed FDIC insurance limits. FDIC insurance provides protection for bank deposits up to $250 . In addition, the Company has uninsured bank deposits with a financial institution outside the U.S. As of October 28, 2019 , the Company had approximately $686 in uninsured cash deposits. All uninsured bank deposits are held at high quality credit institutions. |
Common Stock Repurchase Program
Common Stock Repurchase Program | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
COMMON STOCK REPURCHASE PROGRAM | SPIN-OFF OF SUBSIDIARIES On October 1, 2019, the Company completed the previously announced separation of its transitional and skilled nursing services, home health and hospice operations and substantially all of its senior living operations into two separate, publicly traded companies: • Ensign, which includes skilled nursing and assisted living services, physical, occupational and speech therapies and other rehabilitative and healthcare services at 211 healthcare facilities and campuses, post-acute-related new business ventures and real estate investments; and • The Pennant Group, Inc. (Pennant), which is a holding company of operating subsidiaries that provide home health, hospice and senior living services. The Company completed the separation into two publicly traded companies through a tax-free distribution of all of the outstanding shares of common stock of Pennant to Ensign stockholders on a pro rata basis (the Spin-Off). Ensign stockholders received one share of Pennant common stock for every two shares of Ensign common stock held at the close of business on September 20, 2019, the record date for the Spin-Off. The number of shares of Ensign common stock each stockholder owns and the related proportionate interest in Ensign did not change as a result of the Spin-Off. Each Ensign stockholder received only whole shares of Pennant common stock in the distribution, as well as cash in lieu of any fractional shares. The Spin-Off was effective from and after October 1, 2019, with shares of Pennant common stock distributed on October 1, 2019. Pennant is listed on the NASDAQ Global Select Market (NASDAQ) and trades under the ticker symbol “PNTG.” The accompanying unaudited, interim Consolidated Financial Statements include the historical results of Ensign, as the Spin-off did not take place until October 1, 2019, after the September 30 reporting period in this Quarterly Report. Immediately after the Spin-Off, Ensign will no longer consolidate its home health and hospice operations and substantially all of its senior living operations into its financial results. Beginning in the fourth quarter of 2019, Pennant's historical financial results for periods prior to October 1, 2019 will be reflected in the Company's consolidated financial statements as discontinued operations. Prior to October 1, 2019, Ensign operated under three stand-alone reporting segments. In future filings, the Company will operate under one reporting segment. As a result of the Spin-Off, the accompanying unaudited, interim Consolidated Financial Statements are not indicative of the Company’s future financial position, results of operations or cash flows. In connection with the Spin-Off, Pennant's operations consist of 63 home health, hospice and home care agencies and 52 senior living communities as of October 1, 2019. Ensign affiliates retained ownership of all the real estate, which includes 29 of the 52 senior living operations that were contributed to Pennant. These assets are leased to Pennant on a triple-net basis. Pennant affiliates are responsible for all costs at the properties, including property taxes, insurance and maintenance and repair costs. Annual rental income generated from the leases with Pennant is approximately $12,000 . Pennant's remaining 23 senior living operations are leasing the underlying real estate from unrelated third parties. In accordance with Accounting Standards Codification (ASC) 505-60, Equity-Spinoffs and Reverse Spinoffs, the accounting for the separation of the Company follows its legal form, with Ensign as the legal and accounting spinnor and Pennant as the legal and accounting spinnee, due to the relative significance of Ensign’s healthcare business, the relative fair values of the respective companies, the retention of all senior management, and other relevant indicators. Prior to the Spin-Off, the Company entered into a Separation and Distribution Agreement with Pennant, setting forth the mechanics of the Spin-Off, certain organizational matters and other ongoing obligations of the Company and Pennant. The Company and Pennant or their respective subsidiaries, as applicable, also entered into a number of other agreements to govern the relationship between the Company and Pennant after the Spin-Off. Effective October 1, 2019, the following agreements were entered into: • Master Separation Agreement - The master separation agreement contains the key provisions relating to the separation of Pennant’s home health and hospice operations and substantially all of its senior living operations from Ensign, and other provisions that govern the relationship between Ensign and Pennant after the Spin-Off. • Transition Services Agreement - Ensign will provide Pennant with certain services, and Pennant will provide Ensign with certain services, for a two year period, subject to extension upon the agreement of the parties, following the distribution to help ensure an orderly transition. The services that are under the transition services agreement may include certain finance, information technology, human resources, employee benefits and other services. • Tax Matters Agreement - The tax matters agreement will govern the respective rights, responsibilities and obligations of Ensign and Pennant after the Spin-Off with respect to tax liabilities and benefits, tax attributes, tax returns, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns. • Employee Matters Agreement - The employee matters agreement addresses the allocation of employees between Ensign and Pennant, as well as the allocation of related qualified defined contribution plans, employee health and welfare benefit plans, incentive plans, equity-based awards and other employment, compensation and benefits-related matters. • Lease Agreement - Ensign affiliates retained ownership of the real estate at 29 senior living operations that were contributed to Pennant. All of these properties are leased to Pennant on a triple-net basis, where as the Pennant affiliates are responsible for all costs at the properties, including property taxes, insurance and maintenance and repair costs. The initial terms range between 14 to 16 years . In connection with the Spin-Off, Pennant granted awards to employees and directors of Ensign immediately prior to the consummation of the spin-off in recognition of their performance in assisting with the spin-off transaction. In connection with the Spin-Off, the awards of equity of Pennant subsidiaries granted to certain individuals were exchanged for Pennant common stock prior to the distribution. As the Spin-off did not take place until October 1, 2019, after the most recent period reported in this Quarterly Report, all the share counts, options and restricted stock awards are not reflective of the conversion for the Spin-Off. Beginning in the fourth quarter of 2019, Ensign's shares outstanding, options and restricted stock awards will be reflective of the conversion, including the non-controlling interest of a subsidiary of the Company (Subsidiary Equity Plan) for common stock of Pennant and the impact of the options and restricted stock awards to Pennant employees in diluted shares outstanding. The Company incurred expenses in connection with the completed Spin-Off transaction of $3,261 and $7,908 for the three and nine months ended September 30, 2019 , respectively. The Company will continue to incur additional Spin-Off transaction expenses in the fourth quarter of 2019. On October 1, 2019, in connection with the Spin-Off, the Company entered into the third amendment to the current amended credit facility with a revolving line of credit of up to $350,000 in aggregate principal. See Note 15, Debt. In addition, the Company amended the Master Leases with CareTrust and other third party lease agreements in connection with the Spin-Off. The net impact of the lease termination and modification of lease agreements is a reduction in ROU and lease liabilities of approximately $35,000 . See Note 17, Leases . As approved by the Board of Directors on August 26, 2019, the Company entered into a stock repurchase program pursuant to which the Company may repurchase up to $20,000 of its common stock under the program for a period of approximately 12 months . Under this program, the Company is authorized to repurchase its issued and outstanding common shares from time to time in open-market and privately negotiated transactions and block trades in accordance with federal securities laws. The stock repurchase program will expire on August 31, 2020 . During the third quarter of 2019, the Company repurchased 105 shares of its common stock for a total of $5,000 . Subsequent to September 30, 2019 , the Company repurchased 33 shares of its common stock for a total of $1,406 . As approved by the Board of Directors on April 3, 2018, the Company entered into a stock repurchase program pursuant to which the Company was authorized to repurchase up to $30,000 of its common stock under the program for a period of approximately 11 months . Under this program, the Company was authorized to repurchase its issued and outstanding common shares from time to time in open-market and privately negotiated transactions and block trades in accordance with federal securities laws. The stock repurchase program expired on February 20, 2019 . The Company did not purchase any shares pursuant to this stock repurchase program. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation — The accompanying Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The Company is the sole member or stockholder of various consolidated limited liability companies and corporations established to operate various acquired skilled nursing and senior living operations, home health, hospice and home care operations, and related ancillary services. All intercompany transactions and balances have been eliminated in consolidation. The condensed consolidated financial statements include the accounts of all entities controlled by the Company through its ownership of a majority voting interest. The Company presents noncontrolling interests within the equity section of its condensed consolidated balance sheets. The Company presents the amount of consolidated net income that is attributable to The Ensign Group, Inc. and the noncontrolling interest in its condensed consolidated statements of income. The condensed consolidated financial statements include the accounts of all entities controlled by the Company through its ownership of a majority voting interest and the accounts of any variable interest entities (VIEs) where the Company is subject to a majority of the risk of loss from the VIE's activities, entitled to receive a majority of the entity's residual returns, or both. The Company assesses the requirements related to the consolidation of VIEs, including a qualitative assessment of power and economics that considers which entity has the power to direct the activities that "most significantly impact" the VIE's economic performance and has the obligation to absorb losses of, or the right to receive benefits that could be potentially significant to, the VIE. The Company's relationship with variable interest entities was not material during the three and nine months ended September 30, 2019 and 2018 . The Company completed the sale of one of its senior living operations for a sale price of $1,838 during the first quarter of 2019. The sale transaction does not meet the criteria of discontinued operations as it does not represent a strategic shift that has, or will have, a major effect on the Company's operations and financial results. The Company presented property and equipment assets of the senior living operation sold as held for sale in the consolidated balance sheet as of December 31, 2018. |
Estimates and Assumptions | Estimates and Assumptions — The preparation of Interim Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Interim Financial Statements and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates in the Company’s Interim Financial Statements relate to revenue, intangible assets and goodwill, impairment of long-lived assets, general and professional liability, workers' compensation and healthcare claims included in accrued self-insurance liabilities, and income taxes. Actual results could differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments — The Company’s financial instruments consist principally of cash and cash equivalents, debt security investments, accounts receivable, insurance subsidiary deposits, accounts payable and borrowings. The Company believes all of the financial instruments’ recorded values approximate fair values because of their nature or respective short durations. |
Revenue Recognition | Revenue Recognition — On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts — |
Property and Equipment | Property and Equipment — Property and equipment are initially recorded at their historical cost. Repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the depreciable assets (ranging from three to 59 years ). Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the remaining lease term. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets — |
Leases and Leasehold Improvements | Leases and Leasehold Improvements - The Company leases skilled nursing facilities, senior living facilities and commercial office space. On January 1, 2019, the Company adopted Accounting Standards Codification Topic 842, Leases (ASC 842), electing the transition method that allows it to apply the standard as of the adoption date and record a cumulative adjustment in retained earnings. The Company determines if an arrangement is a lease at the inception of each lease. At the inception of each lease, the Company performs an evaluation to determine whether the lease should be classified as an operating or finance lease. Operating leases are included in right-of-use assets, current lease liabilities and long-term lease liabilities on the Company's condensed consolidated balance sheet. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at lease commencement date in determining the present value of future lease payments. The Company estimates this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. The Company records rent expense for operating leases on a straight-line basis over the term of the lease. The lease term used for straight-line rent expense is calculated from the date the Company is given control of the leased premises through the end of the lease term. Renewals are not assumed in the determination of the lease term unless they are deemed to be reasonably assured at the inception of the lease. The lease term used for this evaluation also provides the basis for establishing depreciable lives for buildings subject to lease and leasehold improvements. |
Intangible Assets and Goodwill | Intangible Assets and Goodwill — Definite-lived intangible assets consist primarily of patient base, facility trade names and customer relationships. Trade names at affiliated facilities are amortized over 30 years and customer relationships are amortized over a period of up to 20 years . The Company's indefinite-lived intangible assets consist of trade names, and Medicare and Medicaid licenses. The Company tests indefinite-lived intangible assets for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. |
Self-Insurance | Self-Insurance — The Company is partially self-insured for general and professional liability up to a base amount per claim (the self-insured retention) with an aggregate, one-time deductible above this limit. Losses beyond these amounts are insured through third-party policies with coverage limits per claim, per location and on an aggregate basis for the Company. The combined self-insured retention is $500 per claim, subject to an additional one-time deductible of $750 for California affiliated operations and a separate, one-time, deductible of $1,000 for non-California operations. For all affiliated operations, except those located in Colorado, the third-party coverage above these limits is $1,000 per claim, $3,000 per operation, with a $5,000 blanket aggregate limit and an additional state-specific aggregate where required by state law. In Colorado, the third-party coverage above these limits is $1,000 per claim and $3,000 per operation, which is independent of the aforementioned blanket aggregate limits that apply outside of Colorado. The self-insured retention and deductible limits for general and professional liability and workers' compensation for all states (except Texas, Washington and Wyoming for workers' compensation) are self-insured through the Captive, the related assets and liabilities of which are included in the accompanying condensed consolidated balance sheets. The Captive is subject to certain statutory requirements as an insurance provider. The Company’s policy is to accrue amounts equal to the actuarially estimated costs to settle open claims of insureds, as well as an estimate of the cost of insured claims that have been incurred but not reported. The Company develops information about the size of the ultimate claims based on historical experience, current industry information and actuarial analysis, and evaluates the estimates for claim loss exposure on a quarterly basis. Accrued general liability and professional malpractice liabilities on an undiscounted basis, net of anticipated insurance recoveries, were $46,915 and $42,635 as of September 30, 2019 and December 31, 2018 , respectively. The Company’s operating subsidiaries are self-insured for workers’ compensation in California. To protect itself against loss exposure in California with this policy, the Company has purchased individual specific excess insurance coverage that insures individual claims that exceed $500 per occurrence. In Texas, the operating subsidiaries have elected non-subscriber status for workers’ compensation claims and the Company has purchased individual stop-loss coverage that insures individual claims that exceed $750 per occurrence. The Company’s operating subsidiaries in all other states, with the exception of Washington and Wyoming, are under a loss sensitive plan that insures individual claims that exceed $350 per occurrence. In Washington and Wyoming, the operating subsidiaries' coverage is financed through premiums paid by the employers and employees. The claims and benefit payments are managed through a state insurance pool. Outside of California, Texas, Washington and Wyoming, the Company has purchased insurance coverage that insures individual claims that exceed $350 per accident. In all states except Washington and Wyoming, the Company accrues amounts equal to the estimated costs to settle open claims, as well as an estimate of the cost of claims that have been incurred but not reported. The Company uses actuarial valuations to estimate the liability based on historical experience and industry information. Accrued workers’ compensation liabilities are recorded on an undiscounted basis in the accompanying condensed consolidated balance sheets and were $24,583 and $24,624 as of September 30, 2019 and December 31, 2018 , respectively. In addition, the Company has recorded an asset and equal liability of $7,899 and $6,969 at September 30, 2019 and December 31, 2018 , respectively, in order to present the ultimate costs of malpractice and workers' compensation claims and the anticipated insurance recoveries on a gross basis. See Note 12, Restricted and Other Assets. The Company self-funds medical (including prescription drugs) and dental healthcare benefits to the majority of its employees. The Company is fully liable for all financial and legal aspects of these benefit plans. To protect itself against loss exposure with this policy, the Company has purchased individual stop-loss insurance coverage that insures individual claims that exceed $300 for each covered person with an additional one-time aggregate individual stop loss deductible of $75 . Beginning 2016, the Company's policy does not include the additional one-time aggregate individual stop loss deductible of $75 . The Company’s accrued liability under these plans recorded on an undiscounted basis in the accompanying condensed consolidated balance sheets was $6,268 and $5,823 as of September 30, 2019 and December 31, 2018 , respectively. The Company believes that adequate provision has been made in the Interim Financial Statements for liabilities that may arise out of patient care, workers’ compensation, healthcare benefits and related services provided to date. The amount of the Company’s reserves was determined based on an estimation process that uses information obtained from both company-specific and industry data. This estimation process requires the Company to continuously monitor and evaluate the life cycle of the claims. Using data obtained from this monitoring and the Company’s assumptions about emerging trends, the Company, with the assistance of an independent actuary, develops information about the size of ultimate claims based on the Company’s historical experience and other available industry information. The most significant assumptions used in the estimation process include determining the trend in costs, the expected cost of claims incurred but not reported and the expected costs to settle or pay damage awards with respect to unpaid claims. The self-insured liabilities are based upon estimates, and while management believes that the estimates of loss are reasonable, the ultimate liability may be in excess of or less than the recorded amounts. Due to the inherent volatility of actuarially determined loss estimates, it is reasonably possible that the Company could experience changes in estimated losses that could be material to net income. If the Company’s actual liability exceeds its estimates of loss, its future earnings, cash flows and financial condition would be adversely affected. |
Income Taxes | Income Taxes — Deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at tax rates in effect when such temporary differences are expected to reverse. The Company generally expects to fully utilize its deferred tax assets; however, when necessary, the Company records a valuation allowance to reduce its net deferred tax assets to the amount that is more likely than not to be realized. In determining the need for a valuation allowance or the need for and magnitude of liabilities for uncertain tax positions, the Company makes certain estimates and assumptions. These estimates and assumptions are based on, among other things, knowledge of operations, markets, historical trends and likely future changes and, when appropriate, the opinions of advisors with knowledge and expertise in certain fields. Due to certain risks associated with the Company’s estimates and assumptions, actual results could differ. |
Noncontrolling Interest | Noncontrolling Interest — |
Share-Based Compensation | Share-Based Compensation — The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors including employee stock options based on estimated fair values, ratably over the requisite service period of the award. Net income has been reduced as a result of the recognition of the fair value of all stock options and restricted stock awards issued, the amount of which is contingent upon the number of future grants and other variables. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements — Except for rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws and a limited number of grandfathered standards, the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. For any new pronouncements announced, the Company considers whether the new pronouncements could alter previous generally accepted accounting principles and determines whether any new or modified principles will have a material impact on the Company's reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Company's financial management and certain standards are under consideration. Recent Accounting Standards Adopted by the Company In July 2019, the FASB issued ASU No. 2019-07, Codification Updates to SEC Sections - Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization, and Miscellaneous Updates , which aligns the guidance in various SEC sections of the FASB ASC with the requirements of certain already effective SEC final rules. ASU 2019-07 is effective immediately during the company's third quarter of fiscal 2019 and did not have a material impact on the company's consolidated financial statements and related disclosures. In February 2016, the FASB established Topic 842, Leases , by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases with terms longer than 12 months on the balance sheet and disclose key information about leasing arrangements. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The classification criteria for distinguishing between operating and finance (previously capital) leases are substantially similar to the previous lease guidance, but with no explicit bright lines. The Company adopted the standard as of January 1, 2019, electing the transition method that allows it to apply the standard as of the adoption date and record a cumulative adjustment in retained earnings, if applicable. The Company has elected the package of practical expedients permitted under the transition guidance, which among other things, allows the Company to carry forward the historical lease classification. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company has made an accounting policy to keep leases with an initial term of 12 months or less off of the balance sheet and recognize those lease payments in the consolidated statements of income on a straight-line basis over the lease term. The Company has also elected the practical expedient to not separate lease and non-lease components for all of its leases as the non-lease components are not significant to the overall lease costs. The adoption of this standard resulted in recognition of right-of-use assets and lease liabilities of $1,051,148 and $1,029,240 , respectively, on its condensed consolidated balance sheets as of January 1, 2019. The Company recorded an adjustment, net of tax, of $9,030 to retained earnings, on the adoption date, related to a deferred gain on a previous sale-leaseback transaction, which resulted in an increase in rent expense of $658 annually, as we are no longer able to recognize the gain in our consolidated statement of income as a result of the new lease standard. In addition, initial direct costs associated with its lease agreements and favorable lease assets of $26,939 were classified into right-of-use assets on the adoption date. The standard does not materially affect the Company's consolidated net earnings or have a notable impact on liquidity or debt-covenant compliance under the current agreements. See further discussion at Note 17, Leases . Prior to the adoption of ASC 842, the Company recognized revenue related to its senior living residency agreements in accordance with the provisions of ASC 840, Leases (ASC 840). Subsequent to the adoption of ASU 2016-02, Leases , lessors are required to separately recognize and measure the lease component of a contract with a customer utilizing the provisions of ASC 842 and the non-lease components utilizing the provisions of ASC 606, Revenue from Contracts with Customers ( ASC 606 ) . To separately account for the components, the transaction price is allocated among the components based upon the estimated stand alone selling prices of the components. Additionally, certain components of a contract which were previously included within the lease element recognized in accordance with ASC 840 prior to the adoption of ASU 2016-02 (such as common area maintenance services, other basic services, and executory costs) are recognized as non-lease components subject to the provisions of ASC 606 subsequent to the adoption of ASU 2016-02. Entities are required to recognize a cumulative effect adjustment to beginning retained earnings as of the initial application date of ASU 2016-02 for changes to amounts recognized for these certain components for the transition from ASC 840 to ASC 606. However, entities are permitted to elect the practical expedient under ASU 2018-11, Leases , allowing lessors to not separate non-lease components from the associated lease components when certain criteria are met. Entities that elect to utilize the lease/non-lease component combination practical expedient under ASU 2018-11 upon initial application of ASC 842 are required to apply the practical expedient to all new and existing transactions within a class of underlying assets that qualify for the expedient as of the initial application date with a cumulative effect adjustment to beginning retained earnings as of the initial application date for any changes recognized related to existing transactions. Upon adoption of ASU 2016-02 and ASU 2018-11, the Company elected the lessor practical expedient within ASU 2018-11. The Company recognizes revenue under these resident agreements based upon the predominant component, either the lease or non-lease component, of the contracts rather than allocating the consideration and separately accounting for it under ASC 842 and ASC 606. The Company has concluded that the non-lease components of the agreements with respect to its senior living communities are the predominant component of the contract, therefore, the Company recognizes revenue for these residents agreements under ASC 606. The timing and pattern of revenue recognition is substantially the same as that prior to the adoption of these standards. In June 2018, the FASB issued ASU 2018-07, which simplifies several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of ASC 718, Compensation-Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments specify that ASC 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that ASC 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606, Revenue from Contracts with Customers. The Company adopted this guidance effective January 1, 2019. The adoption of this guidance did not have a material impact on its consolidated financial statements and related disclosures. Accounting Standards Recently Issued But Not Yet Adopted by the Company In August 2018, the FASB issued amended guidance to simplify fair value measurement disclosure requirements. The new provisions eliminate the requirements to disclose (1) transfers between Level 1 and Level 2 of the fair value hierarchy, (2) policies related to valuation processes and the timing of transfers between levels of the fair value hierarchy, and (3) net asset value disclosure of estimates of timing of future liquidity events. The FASB also modified disclosure requirements of Level 3 fair value measurements. This guidance is effective for annual periods beginning after December 15, 2019, which will be the Company's fiscal year 2020, with early adoption permitted. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued amended authoritative guidance to simplify and reduce the cost and complexity of the goodwill impairment test. The new provisions eliminate step 2 from the goodwill impairment test and shifts the concept of impairment from a measure of loss when comparing the implied fair value of goodwill to its carrying amount to comparing the fair value of a reporting unit with its carrying amount. The FASB also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment or step 2 of the goodwill impairment test. The new guidance does not amend the optional qualitative assessment of goodwill impairment. This guidance is effective for annual periods beginning after December 15, 2019, which will be the Company's fiscal year 2020, with early adoption permitted. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update (ASU) 2016-13 “ Financial Instruments – Credit Losses (Topic 326): Measurement of credit Losses on Financial Instruments ”, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The guidance will be effective for fiscal year beginning after December 15, 2019, which will be the Company's fiscal year 2020, with early adoption is permitted. The Company has not yet determined the effect of the ASU on its results of operations, financial condition or cash flows. |
Revenue and Accounts Receivab_2
Revenue and Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenue for the three and nine months ended September 30, 2019 and 2018 is summarized in the following tables: Three Months Ended September 30, 2019 2018 Revenue % of Revenue Revenue % of Revenue Medicaid $ 218,725 36.4 % $ 188,486 36.6 % Medicare 157,046 26.2 133,554 26.0 Medicaid — skilled 34,080 5.7 30,684 6.0 Total Medicaid and Medicare 409,851 68.3 352,724 68.6 Managed care 96,095 16.0 80,196 15.6 Private and other (1) 94,561 15.7 81,444 15.8 Revenue $ 600,507 100.0 % $ 514,364 100.0 % (1) Private and other payors also includes revenue from all payors generated in other ancillary services for the three months ended September 30, 2019 and 2018. Nine Months Ended September 30, 2019 2018 Revenue % of Revenue % of Medicaid $ 620,539 36.0 % $ 529,280 35.2 % Medicare 457,953 26.5 409,681 27.3 Medicaid — skilled 96,323 5.6 86,024 5.7 Total Medicaid and Medicare 1,174,815 68.1 1,024,985 68.2 Managed care 279,633 16.2 244,062 16.2 Private and other (1) 270,924 15.7 233,837 15.6 Revenue $ 1,725,372 100.0 % $ 1,502,884 100.0 % (1) Private and other payors also includes revenue from all payors generated in other ancillary services for the nine months ended September 30, 2019 and 2018. |
Schedule of Accounts, Notes, Loans and Financing Receivable | Accounts receivable as of September 30, 2019 and December 31, 2018 is summarized in the following table: September 30, 2019 December 31, 2018 Medicaid $ 131,763 $ 117,984 Managed care 62,003 54,682 Medicare 57,704 50,994 Private and other payors 60,330 55,325 311,800 278,985 Less: allowance for doubtful accounts (3,707 ) (2,886 ) Accounts receivable, net $ 308,093 $ 276,099 |
Computation of Net Income Per_2
Computation of Net Income Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic, by Common Class, Including Two Class Method | A reconciliation of the numerator and denominator used in the calculation of basic net income per common share follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net income $ 27,828 $ 20,350 $ 84,360 $ 65,969 Less: net income/(loss) attributable to noncontrolling interests 669 (511 ) 1,220 (35 ) Net income attributable to The Ensign Group, Inc. $ 27,159 $ 20,861 $ 83,140 $ 66,004 Denominator: Weighted average shares outstanding for basic net income per share 53,941 52,139 53,470 51,870 Basic net income per common share attributable to The Ensign Group, Inc. $ 0.50 $ 0.40 $ 1.55 $ 1.27 |
Schedule of Earnings Per Share, Diluted, by Common Class, Including Two Class Method | A reconciliation of the numerator and denominator used in the calculation of diluted net income per common share follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net income $ 27,828 $ 20,350 $ 84,360 $ 65,969 Less: net income/(loss) attributable to noncontrolling interests 669 (511 ) 1,220 (35 ) Net income attributable to The Ensign Group, Inc. $ 27,159 $ 20,861 $ 83,140 $ 66,004 Denominator: Weighted average common shares outstanding 53,941 52,139 53,470 51,870 Plus: incremental shares from assumed conversion (1) 2,423 2,493 2,584 2,306 Adjusted weighted average common shares outstanding 56,364 54,632 56,054 54,176 Diluted net income per common share attributable to The Ensign Group, Inc. $ 0.48 $ 0.38 $ 1.48 $ 1.22 (1) Options outstanding which are anti-dilutive and therefore not factored into the weighted average common shares amount above were 421 and 143 for the three and nine months ended September 30, 2019 , respectively, and 244 and 163 for the three and nine months ended September 30, 2018 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value, of Assets and Liabilities Measured on Recurring Basis | The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Cash and cash equivalents $ 44,396 $ — $ — $ 31,083 $ — $ — |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | Segment revenues by major payor source were as follows: Three Months Ended September 30, 2019 Transitional and Skilled Services Senior Living Services Home Health and Hospice Services All Other Total Revenue Revenue % Medicaid $ 202,665 $ 10,904 $ 5,156 $ — $ 218,725 36.4 % Medicare 119,633 — 37,413 — 157,046 26.2 Medicaid-skilled 34,080 — — — 34,080 5.7 Subtotal 356,378 10,904 42,569 — 409,851 68.3 Managed care 88,542 — 7,553 — 96,095 16.0 Private and other 41,053 32,892 5,049 15,567 (1) 94,561 15.7 Total revenue $ 485,973 $ 43,796 $ 55,171 $ 15,567 $ 600,507 100.0 % (1) Private and other payors also includes revenue from all payors generated in other ancillary services for the three months ended September 30, 2019. Three Months Ended September 30, 2018 Transitional and Skilled Services Senior Living Services Home Health and Hospice Services All Other Total Revenue Revenue % Medicaid $ 176,009 $ 9,284 $ 3,193 $ — $ 188,486 36.6 % Medicare 103,506 — 30,048 — 133,554 26.0 Medicaid-skilled 30,684 — — — 30,684 6.0 Subtotal 310,199 9,284 33,241 — 352,724 68.6 Managed care 73,897 — 6,299 — 80,196 15.6 Private and other 37,668 28,774 4,297 10,705 (1) 81,444 15.8 Total revenue $ 421,764 $ 38,058 $ 43,837 $ 10,705 $ 514,364 100.0 % (1) Private and other payors also includes revenue from all payors generated in other ancillary services for the three months ended September 30, 2018. Nine Months Ended September 30, 2019 Transitional and Skilled Services Senior Living Services Home Health and Hospice Services All Other Total Revenue Revenue % Medicaid $ 576,504 $ 31,039 $ 12,996 $ — $ 620,539 36.0 % Medicare 355,141 — 102,812 — 457,953 26.5 Medicaid-skilled 96,323 — — — 96,323 5.6 Subtotal 1,027,968 31,039 115,808 — 1,174,815 68.1 Managed care 258,205 — 21,428 — 279,633 16.2 Private and other 118,296 95,497 14,260 42,871 (1) 270,924 15.7 Total revenue $ 1,404,469 $ 126,536 $ 151,496 $ 42,871 $ 1,725,372 100.0 % (1) Private and other payors also includes revenue from all payors generated in other ancillary services for the nine months ended September 30, 2019. Nine Months Ended September 30, 2018 Transitional and Skilled Services Senior Living Services Home Health and Hospice Services All Other Total Revenue Revenue % Medicaid $ 494,104 $ 26,225 $ 8,951 $ — $ 529,280 35.2 % Medicare 323,696 — 85,985 — 409,681 27.3 Medicaid-skilled 86,024 — — — 86,024 5.7 Subtotal 903,824 26,225 94,936 — 1,024,985 68.2 Managed care 225,865 — 18,197 — 244,062 16.2 Private and other 107,609 85,110 11,711 29,407 (1) 233,837 15.6 Total revenue $ 1,237,298 $ 111,335 $ 124,844 $ 29,407 $ 1,502,884 100.0 % (1) Private and other payors also includes revenue from all payors generated in other ancillary services for the nine months ended September 30, 2018. |
Schedule of Segment Reporting Information, by Segment | The following table sets forth selected financial data consolidated by business segment: Three Months Ended September 30, 2019 Transitional and Skilled Services (4) Senior Living Services (4) Home Health and Hospice Services All Other (3) Elimination Total Revenue from external customers $ 485,973 $ 43,796 $ 55,171 $ 15,567 $ — $ 600,507 Intersegment revenue (1) 998 — — 2,389 (3,387 ) — Total revenue $ 486,971 $ 43,796 $ 55,171 $ 17,956 $ (3,387 ) $ 600,507 Segment income (loss) (2) $ 56,838 $ 2,815 $ 8,424 $ (29,132 ) $ — $ 38,945 Interest expense, net of interest income $ (3,164 ) Income before provision for income taxes $ 35,781 Depreciation and amortization $ 9,331 $ 2,127 $ 317 $ 2,544 $ — $ 14,319 (1) Intersegment revenue represents services provided at the Company's operating subsidiaries between the Company's business lines. (2) Segment income (loss) includes depreciation and amortization expense and excludes general and administrative expense and interest expense for transitional and skilled services, senior living services and home health and hospice services segments. Home health and hospice services segment income also excludes intercompany expenses for services provided at transitional and skilled operations of $998 . Including these expenses, home health and hospice services segment income would be $7,426 . Transitional and skilled services, senior living services and home health and hospice services segment income excludes intercompany expenses for services provided by the business lines that are included in the "All Other" category of $2,389 . (3) General and administrative expense are included in the "All Other" category. (4) The Company's campuses represent facilities that offer both skilled nursing and senior living services. Revenue and expenses related to skilled nursing and senior living services have been allocated and recorded in the respective reportable segment. Three Months Ended September 30, 2018 Transitional and Skilled Services (4) Senior Living Services (4) Home Health and Hospice Services All Other (3) Elimination Total Revenue from external customers $ 421,764 $ 38,058 $ 43,837 $ 10,705 $ — $ 514,364 Intersegment revenue (1) 857 — — 851 (1,708 ) — Total revenue $ 422,621 $ 38,058 $ 43,837 $ 11,556 $ (1,708 ) $ 514,364 Segment income (loss) (2) $ 46,350 $ 4,733 $ 7,297 $ (29,093 ) $ — $ 29,287 Interest expense, net of interest income $ (3,522 ) Income before provision for income taxes $ 25,765 Depreciation and amortization $ 8,061 $ 1,902 $ 263 $ 1,676 $ — $ 11,902 (1) Intersegment revenue represents services provided at the Company's operating subsidiaries between the Company's business lines. (2) Segment income (loss) includes depreciation and amortization expense and excludes general and administrative expense and interest expense for transitional and skilled services, senior living services and home health and hospice services segments. Home health and hospice services segment income also excludes intercompany expenses for services provided at transitional and skilled operations of $857 . Including these expenses, home health and hospice services segment income would be $6,440 . Transitional and skilled services, senior living services and home health and hospice services segment income excludes intercompany expenses for services provided by the business lines that are included in the "All Other" category of $851 . (3) General and administrative expense is included in the "All Other" category. (4) The Company's campuses represent facilities that offer both skilled nursing and senior living services. Revenue and expenses related to skilled nursing and senior living services have been allocated and recorded in the respective reportable segment. Nine Months Ended September 30, 2019 Transitional and Skilled Services (4) Senior Living Services (4) Home Health and Hospice Services All Other (3) Elimination Total Revenue from external customers $ 1,404,469 $ 126,536 $ 151,496 $ 42,871 $ — $ 1,725,372 Intersegment revenue (1) 2,493 — — 6,250 (8,743 ) — Total revenue $ 1,406,962 $ 126,536 $ 151,496 $ 49,121 $ (8,743 ) $ 1,725,372 Segment income (loss) (2) $ 172,254 $ 12,674 $ 22,598 $ (92,931 ) $ — $ 114,595 Interest expense, net of interest income $ (9,630 ) Income before provision for income taxes $ 104,965 Depreciation and amortization $ 26,883 $ 6,046 $ 897 $ 6,275 $ — $ 40,101 (1) Intersegment revenue represents services provided at the Company's operating subsidiaries between the Company's business lines. (2) Segment income (loss) includes depreciation and amortization expense and excludes general and administrative expense and interest expense for transitional and skilled services, senior living services and home health and hospice services segments. Home health and hospice services segment income also excludes intercompany expenses for services provided at transitional and skilled operations of $2,493 . Including these expenses, home health and hospice services segment income would be $20,105 . Transitional and skilled services, senior living services and home health and hospice services segment income excludes intercompany expenses for services provided by the business lines which are included in the "All Other" category of $6,250 . (3) General and administrative expense is included in the "All Other" category. (4) The Company's campuses represent facilities that offer both skilled nursing and senior living services. Revenue and expenses related to skilled nursing and senior living services have been allocated and recorded in the respective reportable segment. Nine Months Ended September 30, 2018 Transitional and Skilled Services (4) Senior Living Services (4) Home Health and Hospice Services All Other (3) Elimination Total Revenue from external customers $ 1,237,298 $ 111,335 $ 124,844 $ 29,407 $ — $ 1,502,884 Intersegment revenue (1) 2,191 — — 3,045 (5,236 ) — Total revenue $ 1,239,489 $ 111,335 $ 124,844 $ 32,452 $ (5,236 ) $ 1,502,884 Segment income (loss) (2) $ 135,755 $ 14,361 $ 19,623 $ (75,698 ) $ — $ 94,041 Interest expense, net of interest income $ (9,994 ) Income before provision for income taxes $ 84,047 Depreciation and amortization $ 23,571 $ 5,362 $ 789 $ 5,423 $ — $ 35,145 (1) Intersegment revenue represents services provided at the Company's operating subsidiaries between the Company's business lines. (2) Segment income (loss) includes depreciation and amortization expense and excludes general and administrative expense and interest expense for transitional and skilled services, senior living services and home health and hospice services segments. Home health and hospice services segment income also excludes intercompany expenses for services provided at transitional and skilled operations of $2,191 . Including these expenses, home health and hospice services segment income would be $17,432 . Transitional and skilled services, senior living services and home health and hospice services segment income excludes intercompany expenses for services provided by the business lines that are included in the "All Other" category of $3,045 . (3) General and administrative expense is included in the "All Other" category. (4) The Company's campuses represent facilities that offer both skilled nursing and senior living services. Revenue and expenses related to skilled nursing and senior living services have been allocated and recorded in the respective reportable segment. |
Property and Equipment _ Net (T
Property and Equipment — Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net consist of the following: September 30, 2019 December 31, 2018 Land $ 81,303 $ 60,420 Buildings and improvements 471,221 411,096 Equipment 228,368 202,346 Furniture and fixtures 5,911 5,079 Leasehold improvements 130,921 112,935 Construction in progress 8,056 9,729 925,780 801,605 Less: accumulated depreciation (217,556 ) (182,731 ) Property and equipment, net $ 708,224 $ 618,874 |
Intangible Assets - Net (Tables
Intangible Assets - Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Weighted Average Life (Years) September 30, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Intangible Assets Net Net Lease acquisition costs 1.7 $ 360 $ (294 ) 66 $ 843 $ (251 ) $ 592 Favorable leases 2.1 534 (382 ) 152 35,650 (8,724 ) 26,926 Assembled occupancy 0.4 3,261 (3,166 ) 95 2,936 (2,870 ) 66 Facility trade name 30.0 733 (336 ) 397 733 (317 ) 416 Customer relationships 16.7 5,110 (2,279 ) 2,831 4,670 (1,670 ) 3,000 Total $ 9,998 $ (6,457 ) $ 3,541 $ 44,832 $ (13,832 ) $ 31,000 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense for each of the years ending December 31 is as follows: Year Amount 2019 (remainder) $ 279 2020 345 2021 249 2022 249 2023 237 2024 234 Thereafter 1,948 $ 3,541 |
Goodwill and Other Indefinite_2
Goodwill and Other Indefinite-Lived Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table represents activity in goodwill by segment as of and for the nine months ended September 30, 2019 : Goodwill Transitional and Skilled Services Senior Living Services Home Health and Hospice Services All Other Total January 1, 2019 $ 45,486 $ 3,958 $ 27,250 $ 3,783 $ 80,477 Additions — — 10,341 5,381 15,722 September 30, 2019 $ 45,486 $ 3,958 $ 37,591 $ 9,164 $ 96,199 |
Schedule of Other Indefinite-lived Intangible Assets by Major Class | Other indefinite-lived intangible assets consists of the following: September 30, 2019 December 31, 2018 Trade name $ 1,244 $ 1,217 Medicare and Medicaid licenses 34,854 26,385 $ 36,098 $ 27,602 |
Restricted and Other Assets (Ta
Restricted and Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Restricted and Other Assets | Restricted and other assets consist of the following: September 30, 2019 December 31, 2018 Debt issuance costs, net $ 1,214 $ 1,892 Long-term insurance losses recoverable asset 7,899 6,969 Deposits with landlords 4,580 8,694 Capital improvement reserves with landlords and lenders 3,599 3,196 Note receivable from sale of ancillary business 59 93 Restricted and other assets $ 17,351 $ 20,844 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Other accrued liabilities consist of the following: September 30, 2019 December 31, 2018 Quality assurance fee $ 5,889 $ 5,375 Refunds payable 29,747 25,118 Resident advances 10,155 8,495 Cash held in trust for patients 2,975 2,824 Resident deposits 8,080 6,665 Dividends payable 2,564 2,525 Property taxes 11,085 9,426 Other 13,755 9,356 Other accrued liabilities $ 84,250 $ 69,784 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consists of the following: September 30, 2019 December 31, 2018 Term loan with SunTrust $ 107,500 $ 113,125 Revolving credit facility with SunTrust 50,000 10,000 Mortgage loans and promissory note 121,010 122,955 278,510 246,080 Less: current maturities (10,177 ) (10,105 ) Less: debt issuance costs (2,641 ) (2,840 ) $ 265,692 $ 233,135 |
Options and Awards (Tables)
Options and Awards (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable | The aggregate intrinsic value of options outstanding, vested, expected to vest and exercised as of September 30, 2019 and December 31, 2018 is as follows: Options September 30, 2019 December 31, 2018 Outstanding $ 100,008 $ 89,806 Vested 77,801 64,222 Expected to vest 19,521 22,963 Exercisable 27,851 27,646 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The Company used the following assumptions for stock options granted during the three months ended September 30, 2019 and 2018 : Grant Year Options Granted Weighted Average Risk-Free Rate Expected Life Weighted Average Volatility Weighted Average Dividend Yield 2019 154 1.5% 6.2 years 34.0% 0.4% 2018 101 2.8% 6.3 years 32.0% 0.5% The Company used the following assumptions for stock options granted during the nine months ended September 30, 2019 and 2018 : Grant Year Options Granted Weighted Average Risk-Free Rate Expected Life Weighted Average Volatility Weighted Average Dividend Yield 2019 553 2.0% 6.2 years 33.9% 0.4% 2018 496 2.7% 6.2 years 32.0% 0.5% |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | For the nine months ended September 30, 2019 and 2018 , the following represents the exercise price and fair value displayed at grant date for stock option grants: Grant Year Granted Weighted Average Exercise Price Weighted Average Fair Value of Options 2019 553 $ 53.05 $ 18.89 2018 496 $ 33.61 $ 11.64 |
Schedule of Common Stock Outstanding Roll Forward | The following table represents the employee stock option activity during the nine months ended September 30, 2019 : Number of Options Outstanding Weighted Average Exercise Price Number of Options Vested Weighted Average Exercise Price of Options Vested January 1, 2019 4,188 $ 17.35 2,431 $ 12.37 Granted 553 53.05 Forfeited (46 ) 31.26 Exercised (687 ) 10.74 September 30, 2019 4,008 $ 23.24 2,364 $ 14.52 |
Share-based Payment Arrangement, Option, Exercise Price Range | The following summary information reflects stock options outstanding, vested and related details as of September 30, 2019 : Stock Options Outstanding Stock Options Vested Number Outstanding Black-Scholes Fair Value Remaining Contractual Life (Years) Vested and Exercisable Year of Grant Exercise Price 2009 $4.06 - $4.56 33 $ 67 0 33 2010 4.77 - 4.96 38 93 1 38 2011 5.90 - 7.99 73 249 2 73 2012 6.56 - 7.96 198 729 3 198 2013 7.98 - 11.49 322 1,552 4 322 2014 10.55 - 18.94 1,000 5,687 5 992 2015 21.47 - 25.24 422 3,838 6 302 2016 18.79 - 19.89 368 2,563 7 189 2017 18.64 - 22.90 412 2,876 8 130 2018 26.53 - 38.59 595 7,194 9 87 2019 $51.43 - $53.99 547 10,332 10 — Total 4,008 $ 35,180 2,364 |
Schedule of Nonvested Restricted Stock Units Activity | A summary of the status of the Company's non-vested restricted stock awards as of September 30, 2019 and changes during the nine months ended September 30, 2019 is presented below: Non-Vested Restricted Awards Weighted Average Grant Date Fair Value Nonvested at January 1, 2019 573 $ 29.31 Granted 252 52.13 Vested (210 ) 36.74 Forfeited (11 ) 34.91 Nonvested at September 30, 2019 604 $ 36.14 |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | Share-based compensation expense recognized for the Company's equity incentive plans for the three and nine months ended September 30, 2019 and 2018 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Share-based compensation expense related to stock options $ 1,291 $ 1,213 $ 4,113 $ 3,721 Share-based compensation expense related to restricted stock awards 1,347 968 3,544 2,220 Share-based compensation expense related to stock options and restricted stock awards to non-employee directors 323 281 982 668 Total $ 2,961 $ 2,462 $ 8,639 $ 6,609 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table summarizes the impact of the adoption of the new lease accounting guidance on the Company’s condensed consolidated balance sheet as of January 1, 2019 . Balance at December 31, 2018 Adjustments due to new lease guidance January 1, 2019 Balance at September 30, 2019 Total assets (1) $ 1,181,958 $ 1,015,937 $ 2,197,895 $ 2,359,549 Total liabilities (2) 579,618 1,006,907 1,586,525 1,657,743 Total equity 602,340 9,030 611,370 701,806 (1) Adjustment in assets includes the reclassification of intangible assets, prepaid rent and deferred rent into right-of-use assets and the decrease in deferred tax assets due to the removal of deferred gain related to sale-leaseback as of January 1, 2019. (2) Adjustment in liabilities includes the reclassification of other liabilities into lease liabilities and the removal of deferred gain related to sale-lease back as of January 1, 2019. |
Lease, Cost | The components of operating lease expense (1) , are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Rent - cost of services (2) $ 37,728 $ 34,851 $ 110,574 $ 103,173 General and administrative expense 197 177 532 495 Depreciation and amortization (3) 495 495 1,485 1,485 $ 38,420 $ 35,523 $ 112,591 $ 105,153 (1) Operating lease expenses include variable lease costs of $4,438 and $12,113 during the three and nine months ended September 30, 2019 , respectively. In addition, short-term leases are included in operating leases, which are immaterial. (2) Rent- cost of services includes the amortization of deferred rent of $138 and $309 for the three and nine months ended September 30, 2019 , respectively. (3) Depreciation and amortization is related to the amortization of favorable and direct lease costs. |
Lessee, Operating Lease, Liability, Maturity | Future minimum lease payments for all leases as of September 30, 2019 are as follows: Year Amount 2019 (remainder) $ 36,720 2020 146,498 2021 145,662 2022 143,787 2023 141,954 2024 141,927 Thereafter 902,903 Total lease payments 1,659,451 Less: present value adjustment (624,138 ) Present value of total lease liabilities 1,035,313 Less: current lease liabilities (60,817 ) Long-term operating lease liabilities $ 974,496 |
Future Minimum Rental Payments for Operating Leases | Future minimum lease payments for all leases as of December 31, 2018 were as follows: Year Amount 2019 $ 142,497 2020 141,536 2021 140,524 2022 139,018 2023 137,349 Thereafter 967,027 Total lease payments $ 1,667,951 |
Description of Business (Detail
Description of Business (Details) | Oct. 01, 2019business | Sep. 30, 2019facilitybusinessbed | Dec. 31, 2018facility |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of real estate properties operated | 259 | 244 | |
Home health, hospice and home care operations | business | 63 | ||
Operational skilled nursing beds | bed | 21,100 | ||
Number of real estate properties | 81 | 72 | |
Number of real estate properties leased | 178 | 172 | |
Number of real estate properties leased with an option to purchase | 11 | 12 | |
Operational senior living units | bed | 6,000 | ||
Subsequent Event | Spinoff | |||
Restructuring Cost and Reserve [Line Items] | |||
Public companies created | business | 2 |
Spin-Off of Subsidiaries (Detai
Spin-Off of Subsidiaries (Details) | Oct. 01, 2019USD ($)facilitybusinesssegment | Sep. 30, 2019USD ($)facilitybusiness | Sep. 30, 2019USD ($)facilitybusinesssegment | Feb. 05, 2016USD ($) | May 30, 2014USD ($) |
Restructuring Cost and Reserve [Line Items] | |||||
Number of reportable segments | segment | 3 | ||||
Home health, hospice and home care operations | business | 63 | 63 | |||
Senior living facilities | facility | 57 | 57 | |||
Right-of-use assets | $ (1,062,219,000) | $ (1,062,219,000) | |||
Operating lease, liability | (1,035,313,000) | (1,035,313,000) | |||
Revolving Credit Facility | SunTrust | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 150,000,000 | $ 75,000,000 | |||
Subsequent Event | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of reportable segments | segment | 1 | ||||
Subsequent Event | Third Amended Credit Facility | Revolving Credit Facility | SunTrust | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 350,000,000 | ||||
Spinoff | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expense related to spin-off transaction | $ 3,261,000 | $ 7,908,000 | |||
Spinoff | Subsequent Event | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Public companies created | business | 2 | ||||
Health care facilities | facility | 211 | ||||
Agreement term | 2 years | ||||
Senior living facilities | facility | 23 | ||||
Sale leaseback transaction, annual rental payments | $ 12,000,000 | ||||
Right-of-use assets | 35,000,000 | ||||
Operating lease, liability | $ 35,000,000 | ||||
Spinoff | Subsequent Event | Common Stock | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Stockholders' equity note, stock split, conversion ratio | 0.5 | ||||
Spinoff | Subsequent Event | Minimum | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Lessee, operating lease, term of contract | 14 years | ||||
Spinoff | Subsequent Event | Maximum | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Lessee, operating lease, term of contract | 16 years | ||||
Spinoff | Subsequent Event | Ensign Affiliates | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Senior living facilities | facility | 29 | ||||
Pennant | Spinoff | Subsequent Event | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Home health, hospice and home care operations | business | 63 | ||||
Senior living facilities | facility | 52 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Divestiture (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($)facility | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Senior living facility | facility | 1 |
Sale price from divestiture of businesses | $ | $ 1,838 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Property and Equipment (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 59 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Impairment of Long-Lived Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Impairment of long-lived assets | $ 1,471,000 | $ 0 | $ 1,471,000 | $ 860,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Intangible Assets and Goodwill (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill and intangible asset impairment | $ 0 | $ 3,653,000 | $ 0 | $ 3,653,000 |
Facility trade name | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible asset, useful life | 30 years | |||
Customer relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible asset, useful life | 20 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Self-Insurance General and Professional (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Professional Liability Insurance | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | $ 46,915 | $ 42,635 |
Self-Insurance Retention Per Claim | Parent Company | General Liability Insurance | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | 500 | |
Aggregate Deductible | Parent Company | California | General Liability Insurance | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | 750 | |
Aggregate Deductible | Parent Company | Non-California | General Liability Insurance | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | 1,000 | |
Blanket Aggregate | Third-Party Payor | All States Except Colorado | General Liability Insurance | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | 5,000 | |
Per Facility | Third-Party Payor | All States Except Colorado | General Liability Insurance | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | 3,000 | |
Per Facility | Third-Party Payor | Colorado | General Liability Insurance | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | 3,000 | |
Per Occurence | Third-Party Payor | All States Except Colorado | General Liability Insurance | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | 1,000 | |
Per Occurence | Third-Party Payor | Colorado | General Liability Insurance | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | $ 1,000 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Self-Insurance Workers' Compensation (Details) - Workers' Compensation - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | $ 24,583 | $ 24,624 |
Stop-Loss Insurance Limit Per Claim | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | 500 | |
Stop-Loss Insurance Limit Per Claim | TEXAS | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | 750 | |
Loss-Sensitive Limit Per Claim | Other States, Except California, Texas and Washington | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | $ 350 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Self Insurance Recoveries (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Long-term insurance losses recoverable asset | $ 7,899 | $ 6,969 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Self-Insurance Health Insurance (Details) - Health Liability Insurance - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | $ 6,268 | $ 5,823 |
Stop-Loss Insurance Limit Per Claim | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | 300 | |
Stop Loss Deductible | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Self insurance reserve | $ 75 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Recent Accounting Standards Adopted (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Sep. 30, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use assets | $ 1,062,219 | |
Net of lease liability | $ 1,035,313 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use assets | $ 1,051,148 | |
Net of lease liability | 1,029,240 | |
Cumulative effect on retained earnings, net of tax | 9,030 | |
Sale leaseback transaction, deferred gain | 658 | |
Accounting Standards Update 2016-02 | Favorable leases | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use assets | $ 26,939 |
Revenue and Accounts Receivab_3
Revenue and Accounts Receivable - Revenue from Medicare and Medicaid Programs (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Customer Concentration Risk | Revenue Benchmark | Total Medicare and Medicaid | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk | 68.30% | 68.60% | 68.10% | 68.20% |
Revenue and Accounts Receivab_4
Revenue and Accounts Receivable - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 600,507 | $ 514,364 | $ 1,725,372 | $ 1,502,884 |
Percentage of revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Medicaid | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 218,725 | $ 188,486 | $ 620,539 | $ 529,280 |
Percentage of revenue | 36.40% | 36.60% | 36.00% | 35.20% |
Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 157,046 | $ 133,554 | $ 457,953 | $ 409,681 |
Percentage of revenue | 26.20% | 26.00% | 26.50% | 27.30% |
Medicaid — skilled | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 34,080 | $ 30,684 | $ 96,323 | $ 86,024 |
Percentage of revenue | 5.70% | 6.00% | 5.60% | 5.70% |
Total Medicaid and Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 409,851 | $ 352,724 | $ 1,174,815 | $ 1,024,985 |
Percentage of revenue | 68.30% | 68.60% | 68.10% | 68.20% |
Managed care | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 96,095 | $ 80,196 | $ 279,633 | $ 244,062 |
Percentage of revenue | 16.00% | 15.60% | 16.20% | 16.20% |
Private and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 94,561 | $ 81,444 | $ 270,924 | $ 233,837 |
Percentage of revenue | 15.70% | 15.80% | 15.70% | 15.60% |
Revenue and Accounts Receivab_5
Revenue and Accounts Receivable - Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 311,800 | $ 278,985 |
Less: allowance for doubtful accounts | (3,707) | (2,886) |
Accounts receivable, net | 308,093 | 276,099 |
Medicaid | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 131,763 | 117,984 |
Managed care | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 62,003 | 54,682 |
Medicare | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 57,704 | 50,994 |
Private and other payors | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 60,330 | $ 55,325 |
Computation of Net Income Per_3
Computation of Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||||||
Net income | $ 27,828 | $ 20,350 | $ 84,360 | $ 65,969 | ||||
Less: net income/(loss) attributable to noncontrolling interests | 669 | $ 316 | $ 235 | (511) | $ 315 | $ 161 | 1,220 | (35) |
Net income attributable to The Ensign Group, Inc. | $ 27,159 | $ 28,609 | $ 27,372 | $ 20,861 | $ 22,011 | $ 23,132 | $ 83,140 | $ 66,004 |
Denominator: | ||||||||
Weighted average shares outstanding for basic net income per share | 53,941 | 52,139 | 53,470 | 51,870 | ||||
Plus: incremental shares from assumed conversion (1) | 2,423 | 2,493 | 2,584 | 2,306 | ||||
Adjusted weighted average common shares outstanding | 56,364 | 54,632 | 56,054 | 54,176 | ||||
Basic net income per common share attributable to The Ensign Group, Inc. | $ 0.50 | $ 0.40 | $ 1.55 | $ 1.27 | ||||
Diluted net income per common share attributable to The Ensign Group, Inc. | $ 0.48 | $ 0.38 | $ 1.48 | $ 1.22 | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 421 | 244 | 143 | 163 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value, of Assets and Liabilities Measured on Recurring Basis (Details) - Fair Value Measurements Recurring - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 44,396 | $ 31,083 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 0 | $ 0 |
Fair Value Measurements - Inves
Fair Value Measurements - Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Security, Corporate, US | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Debt securities, held-to-maturity | $ 47,587 | $ 44,850 |
Business Segments - Narrative (
Business Segments - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)facilitybusiness | Mar. 31, 2019USD ($)facility | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)facilitybusinesssegment | Sep. 30, 2018USD ($) | |
Segment Reporting [Abstract] | |||||
Number of reportable segments | segment | 3 | ||||
Transitional and skilled service facilities | 175 | 175 | |||
Transitional and skilled services and senior living campuses | 27 | 27 | |||
Senior living facilities | 57 | 57 | |||
Home health, hospice and home care operations | business | 63 | 63 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Impairment of long-lived assets | $ | $ 1,471,000 | $ 0 | $ 1,471,000 | $ 860,000 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Senior living facility | 1 | ||||
Sale price from divestiture of businesses | $ | $ 1,838,000 | ||||
Senior Living Services | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Impairment of long-lived assets | $ | $ 1,471,000 | $ 1,471,000 |
Business Segments - Revenue by
Business Segments - Revenue by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 600,507 | $ 514,364 | $ 1,725,372 | $ 1,502,884 |
Percentage of revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Medicaid | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 218,725 | $ 188,486 | $ 620,539 | $ 529,280 |
Percentage of revenue | 36.40% | 36.60% | 36.00% | 35.20% |
Medicare | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 157,046 | $ 133,554 | $ 457,953 | $ 409,681 |
Percentage of revenue | 26.20% | 26.00% | 26.50% | 27.30% |
Medicaid — skilled | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 34,080 | $ 30,684 | $ 96,323 | $ 86,024 |
Percentage of revenue | 5.70% | 6.00% | 5.60% | 5.70% |
Total Medicaid and Medicare | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 409,851 | $ 352,724 | $ 1,174,815 | $ 1,024,985 |
Percentage of revenue | 68.30% | 68.60% | 68.10% | 68.20% |
Managed care | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 96,095 | $ 80,196 | $ 279,633 | $ 244,062 |
Percentage of revenue | 16.00% | 15.60% | 16.20% | 16.20% |
Private and other | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 94,561 | $ 81,444 | $ 270,924 | $ 233,837 |
Percentage of revenue | 15.70% | 15.80% | 15.70% | 15.60% |
Operating Segments | Transitional and Skilled Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 485,973 | $ 421,764 | $ 1,404,469 | $ 1,237,298 |
Operating Segments | Senior Living Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 43,796 | 38,058 | 126,536 | 111,335 |
Operating Segments | Home Health and Hospice Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 55,171 | 43,837 | 151,496 | 124,844 |
Operating Segments | Medicaid | Transitional and Skilled Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 202,665 | 176,009 | 576,504 | 494,104 |
Operating Segments | Medicaid | Senior Living Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 10,904 | 9,284 | 31,039 | 26,225 |
Operating Segments | Medicaid | Home Health and Hospice Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 5,156 | 3,193 | 12,996 | 8,951 |
Operating Segments | Medicare | Transitional and Skilled Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 119,633 | 103,506 | 355,141 | 323,696 |
Operating Segments | Medicare | Senior Living Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Operating Segments | Medicare | Home Health and Hospice Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 37,413 | 30,048 | 102,812 | 85,985 |
Operating Segments | Medicaid — skilled | Transitional and Skilled Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 34,080 | 30,684 | 96,323 | 86,024 |
Operating Segments | Medicaid — skilled | Senior Living Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Operating Segments | Medicaid — skilled | Home Health and Hospice Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Operating Segments | Total Medicaid and Medicare | Transitional and Skilled Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 356,378 | 310,199 | 1,027,968 | 903,824 |
Operating Segments | Total Medicaid and Medicare | Senior Living Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 10,904 | 9,284 | 31,039 | 26,225 |
Operating Segments | Total Medicaid and Medicare | Home Health and Hospice Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 42,569 | 33,241 | 115,808 | 94,936 |
Operating Segments | Managed care | Transitional and Skilled Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 88,542 | 73,897 | 258,205 | 225,865 |
Operating Segments | Managed care | Senior Living Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Operating Segments | Managed care | Home Health and Hospice Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 7,553 | 6,299 | 21,428 | 18,197 |
Operating Segments | Private and other | Transitional and Skilled Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 41,053 | 37,668 | 118,296 | 107,609 |
Operating Segments | Private and other | Senior Living Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 32,892 | 28,774 | 95,497 | 85,110 |
Operating Segments | Private and other | Home Health and Hospice Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 5,049 | 4,297 | 14,260 | 11,711 |
All Other | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 15,567 | 10,705 | 42,871 | 29,407 |
All Other | Medicaid | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
All Other | Medicare | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
All Other | Medicaid — skilled | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
All Other | Total Medicaid and Medicare | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
All Other | Managed care | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
All Other | Private and other | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 15,567 | $ 10,705 | $ 42,871 | $ 29,407 |
Business Segments - Schedule of
Business Segments - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 600,507 | $ 514,364 | $ 1,725,372 | $ 1,502,884 |
Segment income (loss) | 38,945 | 29,287 | 114,595 | 94,041 |
Interest expense, net of interest income | (3,164) | (3,522) | (9,630) | (9,994) |
Income before provision for income taxes | 35,781 | 25,765 | 104,965 | 84,047 |
Depreciation and amortization | 14,319 | 11,902 | 40,101 | 35,145 |
Operating Segments | Transitional and Skilled Services | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 485,973 | 421,764 | 1,404,469 | 1,237,298 |
Segment income (loss) | 56,838 | 46,350 | 172,254 | 135,755 |
Depreciation and amortization | 9,331 | 8,061 | 26,883 | 23,571 |
Operating Segments | Senior Living Services | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 43,796 | 38,058 | 126,536 | 111,335 |
Segment income (loss) | 2,815 | 4,733 | 12,674 | 14,361 |
Depreciation and amortization | 2,127 | 1,902 | 6,046 | 5,362 |
Operating Segments | Home Health and Hospice Services | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 55,171 | 43,837 | 151,496 | 124,844 |
Segment income (loss) | 8,424 | 7,297 | 22,598 | 19,623 |
Depreciation and amortization | 317 | 263 | 897 | 789 |
Operating income & intersegment expense | 7,426 | 6,440 | 20,105 | 17,432 |
Intersegment revenue | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | (2,389) | (851) | (6,250) | (3,045) |
Intersegment revenue | Transitional and Skilled Services | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | (998) | (857) | (2,493) | (2,191) |
Intersegment revenue | Senior Living Services | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Intersegment revenue | Home Health and Hospice Services | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
All Other | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 15,567 | 10,705 | 42,871 | 29,407 |
Segment income (loss) | (29,132) | (29,093) | (92,931) | (75,698) |
Depreciation and amortization | 2,544 | 1,676 | 6,275 | 5,423 |
Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | (3,387) | (1,708) | (8,743) | (5,236) |
Operating Segments and All Other | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 17,956 | 11,556 | 49,121 | 32,452 |
Operating Segments and All Other | Transitional and Skilled Services | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 486,971 | 422,621 | 1,406,962 | 1,239,489 |
Operating Segments and All Other | Senior Living Services | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 43,796 | 38,058 | 126,536 | 111,335 |
Operating Segments and All Other | Home Health and Hospice Services | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 55,171 | $ 43,837 | $ 151,496 | $ 124,844 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Oct. 30, 2019bedoperation | Jun. 30, 2018USD ($) | Sep. 30, 2019USD ($)facilitybedoperation | Sep. 30, 2018USD ($)facilitybedoperation | |
Business Acquisition [Line Items] | ||||
Operational skilled nursing beds | bed | 21,100 | |||
Operational senior living units | bed | 6,000 | |||
Payments to acquire real estate | $ | $ 10,735 | |||
Payments to acquire business and asset acquisitions | $ | 101,463 | |||
Payments to acquire asset acquisitions | $ | 75,326 | $ 57,859 | ||
Payments to acquire businesses, gross | $ | 26,137 | 1,625 | ||
Notes issued | $ | 924 | |||
Office Building | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire business and asset acquisitions | $ | $ 30,959 | 59,484 | ||
Goodwill & Indefinite-lived Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire businesses, gross | $ | 24,218 | $ 1,609 | ||
Buildings and improvements | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire asset acquisitions | $ | 48,383 | |||
Land | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire asset acquisitions | $ | $ 23,940 | |||
8051 Services, Skilled Nursing Care Facilities | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | operation | 11 | 3 | ||
Operational skilled nursing beds | bed | 1,454 | 468 | ||
Senior Living Facilities | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | operation | 2 | 2 | ||
Operational senior living units | facility | 455 | |||
Skilled nursing, assisted living and independent living facilities | facility | 218 | |||
Senior Living Facilities | Subsequent Event | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | operation | 1 | |||
Operational senior living units | bed | 58 | |||
Transitional and Skilled Services and Senior Living Campuses | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | operation | 3 | 1 | ||
621610 Home Health Care Services | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | operation | 2 | 2 | ||
Hospice Agencies | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | operation | 5 | 1 | ||
Home Care Agency | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | operation | 2 | 1 | ||
Asset Acquisition | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | operation | 18 | 9 | ||
Business Combination | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | operation | 10 | 2 |
Property and Equipment _ Net (D
Property and Equipment — Net (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment | $ 925,780,000 | $ 925,780,000 | $ 801,605,000 | ||
Less: accumulated depreciation | (217,556,000) | (217,556,000) | (182,731,000) | ||
Property and equipment, net | 708,224,000 | 708,224,000 | 618,874,000 | ||
Real estate held-for-sale | 5,300,000 | ||||
Gains on sale of investment real estate | 2,861,000 | ||||
Impairment of long-lived assets | 1,471,000 | $ 0 | 1,471,000 | $ 860,000 | |
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment | 81,303,000 | 81,303,000 | 60,420,000 | ||
Buildings and improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment | 471,221,000 | 471,221,000 | 411,096,000 | ||
Equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment | 228,368,000 | 228,368,000 | 202,346,000 | ||
Furniture and fixtures | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment | 5,911,000 | 5,911,000 | 5,079,000 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment | 130,921,000 | 130,921,000 | 112,935,000 | ||
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment | $ 8,056,000 | $ 8,056,000 | $ 9,729,000 |
Intangible Assets - Net - Sched
Intangible Assets - Net - Schedule of Finite Lived Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 9,998 | $ 44,832 |
Accumulated Amortization | (6,457) | (13,832) |
Net | $ 3,541 | 31,000 |
Lease acquisition costs | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life (Years) | 1 year 8 months 12 days | |
Gross Carrying Amount | $ 360 | 843 |
Accumulated Amortization | (294) | (251) |
Net | $ 66 | 592 |
Favorable leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life (Years) | 2 years 1 month 6 days | |
Gross Carrying Amount | $ 534 | 35,650 |
Accumulated Amortization | (382) | (8,724) |
Net | $ 152 | 26,926 |
Assembled occupancy | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life (Years) | 12 days | |
Gross Carrying Amount | $ 3,261 | 2,936 |
Accumulated Amortization | (3,166) | (2,870) |
Net | $ 95 | 66 |
Facility trade name | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life (Years) | 30 years | |
Gross Carrying Amount | $ 733 | 733 |
Accumulated Amortization | (336) | (317) |
Net | $ 397 | 416 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life (Years) | 16 years 8 months 12 days | |
Gross Carrying Amount | $ 5,110 | 4,670 |
Accumulated Amortization | (2,279) | (1,670) |
Net | $ 2,831 | $ 3,000 |
Intangible Assets - Net - Narra
Intangible Assets - Net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 865 | $ 761 | $ 2,770 | $ 2,067 | |
Right of use asset amortization | 495 | 1,485 | |||
Right-of-use assets | $ 1,062,219 | $ 1,062,219 | |||
Accounting Standards Update 2016-02 | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Right-of-use assets | $ 1,051,148 | ||||
Accounting Standards Update 2016-02 | Favorable leases | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Right-of-use assets | $ 26,939 |
Intangible Assets - Net - Futur
Intangible Assets - Net - Future Amortization (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Year | ||
2019 (remainder) | $ 279 | |
2020 | 345 | |
2021 | 249 | |
2022 | 249 | |
2023 | 237 | |
2024 | 234 | |
Thereafter | 1,948 | |
Net | $ 3,541 | $ 31,000 |
Goodwill and Other Indefinite_3
Goodwill and Other Indefinite-Lived Intangible Assets - Goodwill Rollforward (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill [Roll Forward] | ||||
Balance at beginning of period | $ 80,477,000 | |||
Additions | 15,722,000 | |||
Balance at end of period | $ 96,199,000 | 96,199,000 | ||
Goodwill and intangible asset impairment | 0 | $ 3,653,000 | 0 | $ 3,653,000 |
Goodwill impairment | $ 3,513,000 | $ 3,513,000 | ||
Operating Segments | Transitional and Skilled Services | ||||
Goodwill [Roll Forward] | ||||
Balance at beginning of period | 45,486,000 | |||
Additions | 0 | |||
Balance at end of period | 45,486,000 | 45,486,000 | ||
Operating Segments | Senior Living Services | ||||
Goodwill [Roll Forward] | ||||
Balance at beginning of period | 3,958,000 | |||
Additions | 0 | |||
Balance at end of period | 3,958,000 | 3,958,000 | ||
Operating Segments | Home Health and Hospice Services | ||||
Goodwill [Roll Forward] | ||||
Balance at beginning of period | 27,250,000 | |||
Additions | 10,341,000 | |||
Balance at end of period | 37,591,000 | 37,591,000 | ||
All Other | ||||
Goodwill [Roll Forward] | ||||
Balance at beginning of period | 3,783,000 | |||
Additions | 5,381,000 | |||
Balance at end of period | $ 9,164,000 | $ 9,164,000 |
Goodwill and Other Indefinite_4
Goodwill and Other Indefinite-Lived Intangible Assets - Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Indefinite-lived Intangible Assets [Line Items] | ||
Other indefinite-lived intangibles | $ 36,098 | $ 27,602 |
Trade name | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Other indefinite-lived intangibles | 1,244 | 1,217 |
Medicare and Medicaid licenses | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Other indefinite-lived intangibles | $ 34,854 | $ 26,385 |
Restricted and Other Assets - S
Restricted and Other Assets - Schedule of Restricted and Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Debt issuance costs, net | $ 1,214 | $ 1,892 |
Long-term insurance losses recoverable asset | 7,899 | 6,969 |
Deposits with landlords | 4,580 | 8,694 |
Capital improvement reserves with landlords and lenders | 3,599 | 3,196 |
Note receivable from sale of ancillary business | 59 | 93 |
Restricted and other assets | $ 17,351 | $ 20,844 |
Restricted and Other Assets - N
Restricted and Other Assets - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use assets | $ 1,062,219 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use assets | $ 1,051,148 | |
Reclassification | Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Prepaid rent | 5,220 | |
Right-of-use assets | $ 5,220 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Quality assurance fee | $ 5,889 | $ 5,375 |
Refunds payable | 29,747 | 25,118 |
Resident advances | 10,155 | 8,495 |
Cash held in trust for patients | 2,975 | 2,824 |
Resident deposits | 8,080 | 6,665 |
Dividends payable | 2,564 | 2,525 |
Property taxes | 11,085 | 9,426 |
Other | 13,755 | 9,356 |
Other accrued liabilities | $ 84,250 | $ 69,784 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Provision for income taxes | $ 7,953 | $ 5,415 | $ 20,605 | $ 18,078 | |
Effective income tax rate reconciliation, percent | 19.60% | 21.50% | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative effect of accounting change | $ 9,030 | ||||
Accounting Standards Update 2016-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Cumulative effect of accounting change | $ 3,044 |
Debt - Schedule of Long term de
Debt - Schedule of Long term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 278,510 | $ 246,080 |
Less: current maturities | (10,177) | (10,105) |
Less: debt issuance costs | (2,641) | (2,840) |
Long term debt, net of current maturities and debt discount | 265,692 | 233,135 |
SunTrust | Term loan with SunTrust | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 107,500 | 113,125 |
Less: current maturities | (7,500) | |
Mortgage loans and promissory note | Mortgage loans and promissory note | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 121,010 | 122,955 |
Less: current maturities | (2,677) | |
Revolving Credit Facility | SunTrust | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 50,000 | $ 10,000 |
Debt - Credit Facility with a L
Debt - Credit Facility with a Lending Consortium Arranged by SunTrust (Details) | Oct. 01, 2019USD ($) | Feb. 05, 2016USD ($) | Oct. 28, 2019USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Jul. 19, 2016USD ($) | May 30, 2014USD ($) |
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 278,510,000 | $ 246,080,000 | |||||
Amount outstanding, current | 10,177,000 | 10,105,000 | |||||
Mortgage loans and promissory note | Mortgage loans and promissory note | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | 121,010,000 | 122,955,000 | |||||
Amount outstanding, current | 2,677,000 | ||||||
Long-term debt—less current maturities | 118,333,000 | ||||||
SunTrust | Term loan with SunTrust | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | 107,500,000 | 113,125,000 | |||||
Amount outstanding, current | 7,500,000 | ||||||
Long-term debt—less current maturities | 100,000,000 | ||||||
SunTrust | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, current borrowing capacity | $ 250,000,000 | $ 150,000,000 | |||||
Line of credit facility, maximum borrowing capacity | $ 150,000,000 | $ 75,000,000 | |||||
Total net debt ratio, maximum | 3.50 | ||||||
Total net debt ratio, minimum | 1.50 | ||||||
Total net debt ratio, default | 2.75 | ||||||
Aggregate revolving commitment percentage | 10.00% | ||||||
Long-term debt, gross | 50,000,000 | $ 10,000,000 | |||||
SunTrust | Revolving Credit Facility | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.30% | ||||||
SunTrust | Revolving Credit Facility | Minimum | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.25% | ||||||
SunTrust | Revolving Credit Facility | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.50% | ||||||
SunTrust | Revolving Credit Facility | Maximum | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.45% | ||||||
SunTrust | Revolving Credit Facility | Second Amended Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, current borrowing capacity | $ 450,000,000 | ||||||
Long-term line of credit | 300,000,000 | ||||||
Term loan, borrowing capacity | $ 150,000,000 | ||||||
Line of credit facility, interest rate at period end | 5.00% | ||||||
Long-term debt, gross | $ 157,500,000 | ||||||
SunTrust | Revolving Credit Facility | Third Amended Credit Facility | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 350,000,000 | ||||||
Long-term debt, gross | $ 150,000,000 | ||||||
SunTrust | Revolving Credit Facility | Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin | 0.75% | ||||||
SunTrust | Revolving Credit Facility | Base Rate | Minimum | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin | 0.50% | ||||||
SunTrust | Revolving Credit Facility | Base Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin | 1.75% | ||||||
SunTrust | Revolving Credit Facility | Base Rate | Maximum | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin | 1.50% | ||||||
SunTrust | Revolving Credit Facility | LIBOR | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin | 1.75% | ||||||
SunTrust | Revolving Credit Facility | LIBOR | Minimum | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin | 1.50% | ||||||
SunTrust | Revolving Credit Facility | LIBOR | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin | 2.75% | ||||||
SunTrust | Revolving Credit Facility | LIBOR | Maximum | Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin | 2.50% |
Debt - Mortgage Loans and Promi
Debt - Mortgage Loans and Promissory Note and Off-Balance Sheet Arrangements (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Dec. 31, 2017USD ($)facility | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 278,510 | $ 246,080 | |
Amount outstanding, current | $ 10,177 | 10,105 | |
Mortgage loans and promissory note | Mortgages | |||
Debt Instrument [Line Items] | |||
Number of operating subsidiaries | facility | 17 | ||
Notes payable | $ 112,000 | ||
Prepayment penalty reduced rate during first three years | 10.00% | ||
Prepayment penalty reduced rate during the fourth year | 3.00% | ||
Prepayment penalty reduced rate for the fifth through tenth years | 1.00% | ||
Prepayment penalty reduced rate | 1.00% | ||
Mortgage loans and promissory note | Mortgages | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, pre-payment fee reduction, term | 5 years | 3 years | |
Debt instrument, term | 30 years | 12 years | |
Mortgage loans and promissory note | Mortgages | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument, pre-payment fee reduction, term | 10 years | 11 years | |
Debt instrument, term | 35 years | 33 years | |
Mortgage loans and promissory note | Notes Payable to Banks | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 3.30% | ||
Mortgage loans and promissory note | Notes Payable to Banks | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 2.60% | ||
Mortgage loans and promissory note | Notes Payable to Banks | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate, stated percentage | 5.30% | ||
Mortgage loans and promissory note | Notes Payable Other Payables | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 121,010 | $ 122,955 | |
Amount outstanding, current | 2,677 | ||
Long-term debt—less current maturities | 118,333 | ||
Secured Debt | Senior Debt Obligations | |||
Debt Instrument [Line Items] | |||
Pledged financial instruments, not separately reported, securities for letter of credit facilities | $ 5,342 |
Options and Awards - Stock Opti
Options and Awards - Stock Options Narrative (Details) shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019planshares | Sep. 30, 2018shares | Sep. 30, 2019planinstallmentshares | Sep. 30, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of option plans | plan | 1 | 1 | ||
Award vesting period | 5 years | |||
Options granted (in shares) | 154 | 101 | 553 | 496 |
Nonvested restricted awards, granted (in shares) | 58 | 42 | 252 | 316 |
2017 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 6,881 | 6,881 | ||
Conversion to reduce shares availability | 1 | |||
Other than options, conversion to reduce shares availability | 2.5 | |||
Award vesting period | 5 years | |||
Award vesting rights, percentage | 20.00% | |||
Expiration period | 10 years | |||
Number of shares available for grant (in shares) | 3,638 | 3,638 | ||
2017 Plan | Non-employee directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation arrangement by share-based payment award, number of installments | installment | 3 | |||
Award requisite service period | 3 years |
Options and Awards - Valuation
Options and Awards - Valuation Assumptions (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||||
Options Granted (in shares) | 154 | 101 | 553 | 496 |
Weighted Average Risk-Free Rate | 1.50% | 2.80% | 2.00% | 2.70% |
Expected Life | 6 years 2 months 12 days | 6 years 3 months 18 days | 6 years 2 months 12 days | 6 years 2 months 12 days |
Weighted Average Volatility | 34.00% | 32.00% | 33.90% | 32.00% |
Weighted Average Dividend Yield | 0.40% | 0.50% | 0.40% | 0.50% |
Options and Awards - Exercise P
Options and Awards - Exercise Price and Fair Value (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||||
Granted (in shares) | 154 | 101 | 553 | 496 |
Weighted Average Exercise Price (in dollars per share) | $ 53.05 | $ 33.61 | ||
Weighted Average Fair Value of Options (in dollars per share) | 18.89 | 11.64 | ||
Grant date intrinsic value (in dollars per share) | $ 0 | $ 0 |
Options and Awards - Options Ou
Options and Awards - Options Outstanding Rollforward (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Number of Options Outstanding | |||||
Balance at beginning of period, (in shares) | 4,188 | ||||
Granted (in shares) | 154 | 101 | 553 | 496 | |
Forfeited (in shares) | (46) | ||||
Exercised (in shares) | (687) | ||||
Balance at end of period, (in shares) | 4,008 | 4,008 | |||
Weighted Average Exercise Price | |||||
Balance at beginning of period, (in dollars per share) | $ 17.35 | ||||
Granted (in dollars per share) | 53.05 | $ 33.61 | |||
Forfeited (in dollars per share) | 31.26 | ||||
Exercised (in dollars per share) | 10.74 | ||||
Balance at end of period, (in dollars per share) | $ 23.24 | 23.24 | |||
Weighted Average Exercise Price of Options Vested (in dollars per share) | $ 14.52 | $ 14.52 | $ 12.37 | ||
Number of Options Vested (in shares) | 2,364 | 2,364 | 2,431 |
Options and Awards - Options _2
Options and Awards - Options Outstanding by Exercise Price (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number Outstanding (in shares) | 4,008 |
Black-Scholes Fair Value | $ | $ 35,180 |
Stock Options Vested and Exercisable (in shares) | 2,364 |
2009 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit (in dollars per share) | $ / shares | $ 4.06 |
Exercise Price, Upper Range Limit (in dollars per share) | $ / shares | $ 4.56 |
Number Outstanding (in shares) | 33 |
Black-Scholes Fair Value | $ | $ 67 |
Remaining Contractual Life (Years) | 0 years |
Stock Options Vested and Exercisable (in shares) | 33 |
2010 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit (in dollars per share) | $ / shares | $ 4.77 |
Exercise Price, Upper Range Limit (in dollars per share) | $ / shares | $ 4.96 |
Number Outstanding (in shares) | 38 |
Black-Scholes Fair Value | $ | $ 93 |
Remaining Contractual Life (Years) | 1 year |
Stock Options Vested and Exercisable (in shares) | 38 |
2011 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit (in dollars per share) | $ / shares | $ 5.90 |
Exercise Price, Upper Range Limit (in dollars per share) | $ / shares | $ 7.99 |
Number Outstanding (in shares) | 73 |
Black-Scholes Fair Value | $ | $ 249 |
Remaining Contractual Life (Years) | 2 years |
Stock Options Vested and Exercisable (in shares) | 73 |
2012 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit (in dollars per share) | $ / shares | $ 6.56 |
Exercise Price, Upper Range Limit (in dollars per share) | $ / shares | $ 7.96 |
Number Outstanding (in shares) | 198 |
Black-Scholes Fair Value | $ | $ 729 |
Remaining Contractual Life (Years) | 3 years |
Stock Options Vested and Exercisable (in shares) | 198 |
2013 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit (in dollars per share) | $ / shares | $ 7.98 |
Exercise Price, Upper Range Limit (in dollars per share) | $ / shares | $ 11.49 |
Number Outstanding (in shares) | 322 |
Black-Scholes Fair Value | $ | $ 1,552 |
Remaining Contractual Life (Years) | 4 years |
Stock Options Vested and Exercisable (in shares) | 322 |
2014 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit (in dollars per share) | $ / shares | $ 10.55 |
Exercise Price, Upper Range Limit (in dollars per share) | $ / shares | $ 18.94 |
Number Outstanding (in shares) | 1,000 |
Black-Scholes Fair Value | $ | $ 5,687 |
Remaining Contractual Life (Years) | 5 years |
Stock Options Vested and Exercisable (in shares) | 992 |
2015 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit (in dollars per share) | $ / shares | $ 21.47 |
Exercise Price, Upper Range Limit (in dollars per share) | $ / shares | $ 25.24 |
Number Outstanding (in shares) | 422 |
Black-Scholes Fair Value | $ | $ 3,838 |
Remaining Contractual Life (Years) | 6 years |
Stock Options Vested and Exercisable (in shares) | 302 |
2016 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit (in dollars per share) | $ / shares | $ 18.79 |
Exercise Price, Upper Range Limit (in dollars per share) | $ / shares | $ 19.89 |
Number Outstanding (in shares) | 368 |
Black-Scholes Fair Value | $ | $ 2,563 |
Remaining Contractual Life (Years) | 7 years |
Stock Options Vested and Exercisable (in shares) | 189 |
2017 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit (in dollars per share) | $ / shares | $ 18.64 |
Exercise Price, Upper Range Limit (in dollars per share) | $ / shares | $ 22.90 |
Number Outstanding (in shares) | 412 |
Black-Scholes Fair Value | $ | $ 2,876 |
Remaining Contractual Life (Years) | 8 years |
Stock Options Vested and Exercisable (in shares) | 130 |
2018 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit (in dollars per share) | $ / shares | $ 26.53 |
Exercise Price, Upper Range Limit (in dollars per share) | $ / shares | $ 38.59 |
Number Outstanding (in shares) | 595 |
Black-Scholes Fair Value | $ | $ 7,194 |
Remaining Contractual Life (Years) | 9 years |
Stock Options Vested and Exercisable (in shares) | 87 |
2019 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise Price, Lower Range Limit (in dollars per share) | $ / shares | $ 51.43 |
Exercise Price, Upper Range Limit (in dollars per share) | $ / shares | $ 53.99 |
Number Outstanding (in shares) | 547 |
Black-Scholes Fair Value | $ | $ 10,332 |
Remaining Contractual Life (Years) | 10 years |
Stock Options Vested and Exercisable (in shares) | 0 |
Options and Awards - Restricted
Options and Awards - Restricted Stock Awards Narrative (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Nonvested restricted awards, granted (in shares) | 58 | 42 | 252 | 316 |
Share-based compensation, restricted awards, exercise price (in dollars per share) | $ 0 | |||
Award vesting period | 5 years | |||
Granted (in dollars per share) | $ 52.13 | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in dollars per share) | 41.68 | $ 23.61 | ||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in dollars per share) | $ 57.39 | $ 38.59 | ||
Non-employee directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted to non-employee directors (in shares) | 6 | 20 | ||
Non-employee directors | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in dollars per share) | $ 41.68 | |||
Non-employee directors | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in dollars per share) | $ 57.39 |
Options and Awards - Restrict_2
Options and Awards - Restricted Award Rollforward (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Non-Vested Restricted Awards | ||||
Nonvested at beginning of period (in shares) | 573 | |||
Granted (in shares) | 58 | 42 | 252 | 316 |
Vested (in shares) | (210) | |||
Forfeited (in shares) | (11) | |||
Nonvested at end of period (in shares) | 604 | 604 | ||
Weighted Average Grant Date Fair Value | ||||
Nonvested at beginning of period (in dollars per share) | $ 29.31 | |||
Granted (in dollars per share) | 52.13 | |||
Vested (in dollars per share) | 36.74 | |||
Forfeited (in dollars per share) | 34.91 | |||
Nonvested at end of period (in dollars per share) | $ 36.14 | $ 36.14 |
Options and Awards - Compensati
Options and Awards - Compensation Expense (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 2,961 | $ 2,462 | $ 8,639 | $ 6,609 |
Share-based compensation arrangement by share-based payment award, options, outstanding, weighted average remaining contractual term | 6 years 1 month 6 days | |||
Share-based compensation expense related to stock options | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 1,291 | 1,213 | $ 4,113 | 3,721 |
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized | $ 18,941 | $ 18,941 | ||
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized, period for recognition | 3 years 10 months 24 days | |||
Employee service share-based compensation, nonvested awards (in shares) | 1,644 | 1,644 | ||
Share-based compensation arrangement by share-based payment award, options, expected to vest, number (in shares) | 1,540 | 1,540 | ||
Share-based compensation expense related to restricted stock awards | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 1,347 | 968 | $ 3,544 | 2,220 |
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized | 19,984 | $ 19,984 | ||
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized, period for recognition | 3 years 11 months | |||
Share-based compensation expense related to stock options and restricted stock awards to non-employee directors | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 323 | $ 281 | $ 982 | $ 668 |
Options and Awards - Intrinsic
Options and Awards - Intrinsic Values (Details) - Stock Options - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding | $ 100,008 | $ 89,806 |
Vested | 77,801 | 64,222 |
Expected to vest | 19,521 | 22,963 |
Exercisable | $ 27,851 | $ 27,646 |
Options and Awards - Equity Ins
Options and Awards - Equity Instrument Denominated in the Shares of a Subsidiary (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Nonvested restricted awards, granted (in shares) | 58,000 | 42,000 | 252,000 | 316,000 |
Award vesting period | 5 years | |||
Vested in the period (in shares) | 210,000 | |||
Options granted (in shares) | 154,000 | 101,000 | 553,000 | 496,000 |
Share-based compensation expense | $ 2,961 | $ 2,462 | $ 8,639 | $ 6,609 |
Payments for repurchase of common stock | 7,687 | 1,972 | ||
Proceeds from issuance or sale of equity | $ 2,293 | $ 1,972 | ||
Repurchase of common stock attributable to subsidiary equity plan | 394 | |||
Subsidiary Equity Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Nonvested restricted awards, granted (in shares) | 0 | 0 | ||
Vested in the period (in shares) | 976,000 | 976,000 | ||
Options granted (in shares) | 0 | 221,000 | ||
Share-based compensation expense | $ 17 | $ 348 | $ 594 | $ 1,030 |
Aggregate number of common shares that would be required to settle awards (in shares) | 485,000 | 222,000 | 485,000 | 222,000 |
Stock repurchased during period, shares (in shares) | 65,000 | 534,000 | 865,000 | |
Payments for repurchase of common stock | $ 2,687 | $ 1,972 | ||
Proceeds from issuance or sale of equity | $ 2,293 | $ 1,972 | ||
Subsidiary Equity Plan | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Subsidiary Equity Plan | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 5 years |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | Oct. 01, 2019USD ($)facility | Sep. 30, 2019USD ($)facilityrenewalagreement | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)facilityrenewalagreement | Sep. 30, 2018USD ($) |
Lessee, Lease, Description [Line Items] | |||||
Master lease agreements | agreement | 7 | 7 | |||
Facilities under master lease arrangement | facility | 39 | 39 | |||
Operating lease, weighted average remaining lease term | 12 years | 12 years | |||
Operating lease, weighted average discount rate, percent | 8.66% | 8.66% | |||
Senior living facilities | facility | 57 | 57 | |||
Right-of-use assets | $ (1,062,219) | $ (1,062,219) | |||
Operating lease, liability | $ (1,035,313) | $ (1,035,313) | |||
Spinoff | Subsequent Event | |||||
Lessee, Lease, Description [Line Items] | |||||
Senior living facilities | facility | 23 | ||||
Right-of-use assets | $ 35,000 | ||||
Operating lease, liability | 35,000 | ||||
Sale leaseback transaction, annual rental payments | $ 12,000 | ||||
Various Landlords | |||||
Lessee, Lease, Description [Line Items] | |||||
Lessee, operating lease, term of contract | 15 years | 15 years | |||
Lessee, operating lease, renewal term | 5 years | 5 years | |||
Lessee leasing arrangements, operating leases, number of renewal terms | renewal | 2 | 2 | |||
CareTrust REIT | |||||
Lessee, Lease, Description [Line Items] | |||||
Skilled nursing, assisted living and independent living facilities | facility | 93 | 93 | |||
Master lease agreements | agreement | 8 | 8 | |||
Lessee, operating lease, renewal term | 5 years | 5 years | |||
Operating leases of lessee, contingent rentals, basis spread on variable rate | 2.50% | 2.50% | |||
Rent expense | $ 15,250 | $ 45,146 | |||
Rent expense | $ 14,778 | $ 43,734 | |||
Minimum | Spinoff | Subsequent Event | |||||
Lessee, Lease, Description [Line Items] | |||||
Lessee, operating lease, term of contract | 14 years | ||||
Minimum | Various Landlords | |||||
Lessee, Lease, Description [Line Items] | |||||
Lessee, operating lease, term of contract | 5 years | 5 years | |||
Minimum | Various Landlords | Equipment | |||||
Lessee, Lease, Description [Line Items] | |||||
Lessee, operating lease, term of contract | 3 years | 3 years | |||
Minimum | CareTrust REIT | |||||
Lessee, Lease, Description [Line Items] | |||||
Lessee, operating lease, term of contract | 12 years | 12 years | |||
Lessee leasing arrangements, operating leases, number of renewal terms | renewal | 2 | 2 | |||
Maximum | Spinoff | Subsequent Event | |||||
Lessee, Lease, Description [Line Items] | |||||
Lessee, operating lease, term of contract | 16 years | ||||
Maximum | Various Landlords | |||||
Lessee, Lease, Description [Line Items] | |||||
Lessee, operating lease, term of contract | 20 years | 20 years | |||
Maximum | Various Landlords | Equipment | |||||
Lessee, Lease, Description [Line Items] | |||||
Lessee, operating lease, term of contract | 5 years | 5 years | |||
Maximum | CareTrust REIT | |||||
Lessee, Lease, Description [Line Items] | |||||
Lessee, operating lease, term of contract | 20 years | 20 years | |||
Lessee leasing arrangements, operating leases, number of renewal terms | renewal | 3 | 3 | |||
Cost of Sales and General and Administrative Expense | |||||
Lessee, Lease, Description [Line Items] | |||||
Rent expense | $ 37,925 | $ 111,106 | |||
Rent expense | $ 35,028 | $ 103,668 | |||
Ensign Affiliates | Spinoff | Subsequent Event | |||||
Lessee, Lease, Description [Line Items] | |||||
Senior living facilities | facility | 29 |
Leases - Balance Sheet Impact o
Leases - Balance Sheet Impact on New Lease Guidance (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Assets | $ 2,359,549 | $ 2,197,895 | $ 1,181,958 | ||||||
Liabilities | 1,657,743 | 1,586,525 | 579,618 | ||||||
Stockholders' equity, including portion attributable to noncontrolling interest | $ 701,806 | $ 677,307 | $ 645,003 | 611,370 | $ 602,340 | $ 572,376 | $ 550,279 | $ 525,943 | $ 500,059 |
Accounting Standards Update 2016-02 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Assets | 1,015,937 | ||||||||
Liabilities | 1,006,907 | ||||||||
Stockholders' equity, including portion attributable to noncontrolling interest | $ 9,030 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Lessee, Lease, Description [Line Items] | ||||
Operating lease expense | $ 38,420 | $ 35,523 | $ 112,591 | $ 105,153 |
Variable lease, cost | 4,438 | 12,113 | ||
Amortization of deferred rent | 138 | 309 | ||
Rent - cost of services | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease expense | 37,728 | 34,851 | 110,574 | 103,173 |
General and administrative expense | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease expense | 197 | 177 | 532 | 495 |
Depreciation and amortization | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease expense | $ 495 | $ 495 | $ 1,485 | $ 1,485 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Year | ||
2019 (remainder) | $ 36,720 | |
2020 | 146,498 | |
2021 | 145,662 | |
2022 | 143,787 | |
2023 | 141,954 | |
2024 | 141,927 | |
Thereafter | 902,903 | |
Total lease payments | 1,659,451 | |
Less: present value adjustment | (624,138) | |
Present value of total lease liabilities | 1,035,313 | |
Less: current lease liabilities | (60,817) | |
Long-term operating lease liabilities | $ 974,496 | |
Year | ||
2019 | $ 142,497 | |
2020 | 141,536 | |
2021 | 140,524 | |
2022 | 139,018 | |
2023 | 137,349 | |
Thereafter | 967,027 | |
Total lease payments | $ 1,667,951 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Oct. 01, 2013 | Dec. 31, 2017USD ($) | Oct. 31, 2013USD ($) | Sep. 30, 2019facility | Sep. 30, 2018 | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2019facility | Sep. 30, 2018 | Dec. 31, 2018 | Oct. 28, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |||||||||||
Litigation settlement, amount awarded to other party | $ 11,000 | ||||||||||
Payments for legal settlements | $ 11,000 | $ 48,000 | |||||||||
Litigation settlement, return of unclaimed settlement | $ 1,664 | ||||||||||
Facilities under Medicare probe reviews | facility | 13 | 13 | |||||||||
Agreement term | 5 years | ||||||||||
Subsequent Event | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Cash, uninsured amount | $ 686 | ||||||||||
Customer Concentration Risk | Total Medicaid and Medicare | Accounts Receivable | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Concentration risk | 60.80% | 60.60% | |||||||||
Customer Concentration Risk | Total Medicaid and Medicare | Revenue Benchmark | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Concentration risk | 68.30% | 68.60% | 68.10% | 68.20% |
Common Stock Repurchase Progr_2
Common Stock Repurchase Program (Details) - USD ($) shares in Thousands | Aug. 26, 2019 | Apr. 03, 2018 | Oct. 30, 2019 | Sep. 30, 2019 |
Equity, Class of Treasury Stock [Line Items] | ||||
Repurchase of common stock | $ 5,000,000 | |||
August 26, 2019 Repurchase Program | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Stock repurchase program, authorized amount | $ 20,000,000 | |||
Stock repurchase program, period in force | 12 years | |||
Stock repurchased during period, shares (in shares) | 105 | |||
Repurchase of common stock | $ 5,000,000 | |||
August 26, 2019 Repurchase Program | Subsequent Event | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Stock repurchased during period, shares (in shares) | 33 | |||
Repurchase of common stock | $ 1,406,000 | |||
April 3, 2018 Repurchase Program | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Stock repurchase program, authorized amount | $ 30,000,000 | |||
Stock repurchase program, period in force | 11 years |
Uncategorized Items - ensg09302
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 9,030,000 |