Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 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 | 001-34465 | |
Entity Registrant Name | SELECT MEDICAL HOLDINGS CORP | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-1764048 | |
Entity Address, Address Line One | 4714 Gettysburg Road | |
Entity Address, Address Line Two | P.O. Box 2034 | |
Entity Address, City or Town | Mechanicsburg | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 17055 | |
City Area Code | 717 | |
Local Phone Number | 972-1100 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | SEM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 134,326,112 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001320414 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 135,963 | $ 175,178 |
Accounts receivable | 798,805 | 706,676 |
Prepaid income taxes | 18,804 | 20,539 |
Other current assets | 96,721 | 90,131 |
Total Current Assets | 1,050,293 | 992,524 |
Operating lease right-of-use assets | 986,519 | |
Property and equipment, net | 997,467 | 979,810 |
Goodwill | 3,382,656 | 3,320,726 |
Identifiable intangible assets, net | 415,763 | 437,693 |
Other assets | 322,058 | 233,512 |
Total Assets | 7,154,756 | 5,964,265 |
Current Liabilities: | ||
Overdrafts | 0 | 25,083 |
Current operating lease liabilities | 204,936 | |
Current portion of long-term debt and notes payable | 15,656 | 43,865 |
Accounts payable | 136,801 | 146,693 |
Accrued payroll | 170,294 | 172,386 |
Accrued vacation | 119,286 | 110,660 |
Accrued interest | 10,112 | 12,137 |
Accrued other | 209,887 | 190,691 |
Income taxes payable | 2,815 | 3,671 |
Total Current Liabilities | 869,787 | 705,186 |
Non-current operating lease liabilities | 836,205 | |
Long-term debt, net of current portion | 3,336,506 | 3,249,516 |
Non-current deferred tax liability | 147,567 | 153,895 |
Other non-current liabilities | 105,251 | 158,940 |
Total Liabilities | 5,295,316 | 4,267,537 |
Commitments and contingencies (Note 13) | ||
Redeemable non-controlling interests | 953,697 | 780,488 |
Stockholders’ Equity: | ||
Common stock, $0.001 par value, 700,000,000 shares authorized, 135,265,864 and 134,171,529 shares issued and outstanding at 2018 and 2019, respectively | 134 | 135 |
Capital in excess of par | 485,415 | 482,556 |
Retained earnings | 269,169 | 320,351 |
Total Stockholders’ Equity | 754,718 | 803,042 |
Non-controlling interests | 151,025 | 113,198 |
Total Equity | 905,743 | 916,240 |
Total Liabilities and Equity | $ 7,154,756 | $ 5,964,265 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, shares issued (in shares) | 134,171,529 | 135,265,864 |
Common stock, shares outstanding (in shares) | 134,171,529 | 135,265,864 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net operating revenues | $ 1,393,343 | $ 1,267,401 | $ 4,079,338 | $ 3,816,575 |
Costs and expenses: | ||||
Cost of services, exclusive of depreciation and amortization | 1,183,111 | 1,087,062 | 3,465,353 | 3,247,606 |
General and administrative | 34,385 | 29,975 | 94,401 | 90,951 |
Depreciation and amortization | 52,941 | 50,527 | 160,072 | 149,022 |
Total costs and expenses | 1,270,437 | 1,167,564 | 3,719,826 | 3,487,579 |
Income from operations | 122,906 | 99,837 | 359,512 | 328,996 |
Other income and expense: | ||||
Loss on early retirement of debt | (18,643) | 0 | (18,643) | (10,255) |
Equity in earnings of unconsolidated subsidiaries | 6,950 | 5,432 | 18,710 | 14,914 |
Gain on sale of businesses (Note 5) | 0 | 2,139 | 6,532 | 9,016 |
Interest expense | (54,336) | (50,669) | (156,611) | (147,991) |
Income (loss) before income taxes | 56,877 | 56,739 | 209,500 | 194,680 |
Income tax expense | 12,847 | 14,060 | 52,140 | 47,460 |
Net income | 44,030 | 42,679 | 157,360 | 147,220 |
Less: Net income attributable to non-controlling interests | 13,298 | 9,762 | 40,978 | 34,053 |
Net income attributable to Select Medical Holdings Corporation | $ 30,732 | $ 32,917 | $ 116,382 | $ 113,167 |
Earnings per common share (Note 12): | ||||
Basic (in dollars per share) | $ 0.23 | $ 0.24 | $ 0.86 | $ 0.84 |
Diluted (in dollars per share) | $ 0.23 | $ 0.24 | $ 0.86 | $ 0.84 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Equity and Income (unaudited) - USD ($) $ in Thousands | Total | Common Stock | Capital in Excess of Par | Retained Earnings (Accumulated Deficit) | Total Stockholders’ Equity | Non-controlling Interests |
Balance (in shares) at Dec. 31, 2017 | 134,115,000 | |||||
Balance at Dec. 31, 2017 | $ 932,604 | $ 134 | $ 463,499 | $ 359,735 | $ 823,368 | $ 109,236 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Select Medical Holdings Corporation | 33,739 | 33,739 | 33,739 | |||
Net income attributable to non-controlling interests | 4,500 | 4,500 | ||||
Issuance of restricted stock (in shares) | 4,000 | |||||
Issuance of restricted stock | 0 | $ 0 | 0 | |||
Forfeitures of unvested restricted stock (in shares) | (88,000) | |||||
Forfeitures of unvested restricted stock | 0 | $ 0 | 0 | |||
Vesting of restricted stock | 4,717 | 4,717 | 4,717 | |||
Repurchase of common shares (in shares) | (7,000) | |||||
Repurchase of common shares | (122) | $ 0 | (69) | (53) | (122) | |
Exercise of stock options (in shares) | 80,000 | |||||
Exercise of stock options | 738 | $ 0 | 738 | 738 | ||
Issuance and exchange of non-controlling interests | 74,341 | 74,341 | 74,341 | |||
Distributions to and purchases of non-controlling interests | (84,327) | (83,233) | (83,233) | (1,094) | ||
Redemption adjustment on non-controlling interests | (1,051) | (1,051) | (1,051) | |||
Other | 138 | 103 | 103 | 35 | ||
Balance (in shares) at Mar. 31, 2018 | 134,104,000 | |||||
Balance at Mar. 31, 2018 | 965,277 | $ 134 | 468,885 | 383,581 | 852,600 | 112,677 |
Balance (in shares) at Dec. 31, 2017 | 134,115,000 | |||||
Balance at Dec. 31, 2017 | 932,604 | $ 134 | 463,499 | 359,735 | 823,368 | 109,236 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Select Medical Holdings Corporation | 113,167 | |||||
Balance (in shares) at Sep. 30, 2018 | 135,140,000 | |||||
Balance at Sep. 30, 2018 | 887,568 | $ 135 | 477,822 | 296,635 | 774,592 | 112,976 |
Balance (in shares) at Mar. 31, 2018 | 134,104,000 | |||||
Balance at Mar. 31, 2018 | 965,277 | $ 134 | 468,885 | 383,581 | 852,600 | 112,677 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Select Medical Holdings Corporation | 46,511 | 46,511 | 46,511 | |||
Net income attributable to non-controlling interests | 3,139 | 3,139 | ||||
Issuance of restricted stock (in shares) | 170,000 | |||||
Issuance of restricted stock | 0 | $ 0 | 0 | |||
Vesting of restricted stock | 4,845 | 4,845 | 4,845 | |||
Repurchase of common shares (in shares) | (42,000) | |||||
Repurchase of common shares | (767) | $ 0 | (421) | (346) | (767) | |
Exercise of stock options (in shares) | 95,000 | |||||
Exercise of stock options | 882 | $ 0 | 882 | 882 | ||
Issuance of non-controlling interests | 3,474 | 1,553 | 1,553 | 1,921 | ||
Distributions to and purchases of non-controlling interests | (3,274) | (932) | (384) | (1,316) | (1,958) | |
Redemption adjustment on non-controlling interests | (8,500) | (8,500) | (8,500) | |||
Other | 340 | (337) | (337) | 677 | ||
Balance (in shares) at Jun. 30, 2018 | 134,327,000 | |||||
Balance at Jun. 30, 2018 | 1,011,927 | $ 134 | 474,812 | 420,525 | 895,471 | 116,456 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Select Medical Holdings Corporation | 32,917 | 32,917 | 32,917 | |||
Net income attributable to non-controlling interests | 518 | 518 | ||||
Issuance of restricted stock (in shares) | 1,048,000 | |||||
Issuance of restricted stock | 0 | $ 1 | (1) | |||
Vesting of restricted stock | 5,497 | 5,497 | 5,497 | |||
Repurchase of common shares (in shares) | (236,000) | |||||
Repurchase of common shares | (4,751) | $ 0 | (2,499) | (2,252) | (4,751) | |
Exercise of stock options (in shares) | 1,000 | |||||
Exercise of stock options | 13 | $ 0 | 13 | 13 | ||
Distributions to and purchases of non-controlling interests | (4,419) | 0 | (4,419) | |||
Redemption adjustment on non-controlling interests | (154,514) | (154,514) | (154,514) | |||
Other | 380 | (41) | (41) | 421 | ||
Balance (in shares) at Sep. 30, 2018 | 135,140,000 | |||||
Balance at Sep. 30, 2018 | $ 887,568 | $ 135 | 477,822 | 296,635 | 774,592 | 112,976 |
Balance (in shares) at Dec. 31, 2018 | 135,265,864 | 135,266,000 | ||||
Balance at Dec. 31, 2018 | $ 916,240 | $ 135 | 482,556 | 320,351 | 803,042 | 113,198 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Select Medical Holdings Corporation | 40,834 | 40,834 | 40,834 | |||
Net income attributable to non-controlling interests | 4,810 | 4,810 | ||||
Issuance of restricted stock (in shares) | 21,000 | |||||
Issuance of restricted stock | 0 | $ 0 | 0 | |||
Forfeitures of unvested restricted stock (in shares) | (24,000) | |||||
Forfeitures of unvested restricted stock | 0 | $ 0 | 0 | |||
Vesting of restricted stock | 5,488 | 5,488 | 5,488 | |||
Issuance of non-controlling interests | 6,837 | 6,837 | ||||
Distributions to and purchases of non-controlling interests | (2,480) | 259 | 259 | (2,739) | ||
Redemption adjustment on non-controlling interests | (47,470) | (47,470) | (47,470) | |||
Other | 291 | (122) | (122) | 413 | ||
Balance (in shares) at Mar. 31, 2019 | 135,263,000 | |||||
Balance at Mar. 31, 2019 | $ 924,550 | $ 135 | 488,303 | 313,593 | 802,031 | 122,519 |
Balance (in shares) at Dec. 31, 2018 | 135,265,864 | 135,266,000 | ||||
Balance at Dec. 31, 2018 | $ 916,240 | $ 135 | 482,556 | 320,351 | 803,042 | 113,198 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Select Medical Holdings Corporation | $ 116,382 | |||||
Balance (in shares) at Sep. 30, 2019 | 134,171,529 | 134,172,000 | ||||
Balance at Sep. 30, 2019 | $ 905,743 | $ 134 | 485,415 | 269,169 | 754,718 | 151,025 |
Balance (in shares) at Mar. 31, 2019 | 135,263,000 | |||||
Balance at Mar. 31, 2019 | 924,550 | $ 135 | 488,303 | 313,593 | 802,031 | 122,519 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Select Medical Holdings Corporation | 44,816 | 44,816 | 44,816 | |||
Net income attributable to non-controlling interests | 3,663 | 0 | 3,663 | |||
Issuance of restricted stock (in shares) | 187,000 | |||||
Issuance of restricted stock | 0 | $ 0 | 0 | 0 | ||
Vesting of restricted stock | 5,591 | 5,591 | 5,591 | |||
Repurchase of common shares (in shares) | (936,000) | |||||
Repurchase of common shares | (13,620) | $ 0 | (8,164) | (5,456) | (13,620) | |
Exercise of stock options (in shares) | 50,000 | |||||
Exercise of stock options | 459 | $ 0 | 459 | 459 | ||
Issuance of non-controlling interests | 31,127 | 6,366 | 6,366 | 24,761 | ||
Distributions to and purchases of non-controlling interests | (1,416) | 14 | 14 | (1,430) | ||
Redemption adjustment on non-controlling interests | 270 | 270 | 270 | |||
Other | 510 | 82 | 82 | 428 | ||
Balance (in shares) at Jun. 30, 2019 | 134,564,000 | |||||
Balance at Jun. 30, 2019 | 995,950 | $ 135 | 492,569 | 353,305 | 846,009 | 149,941 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Select Medical Holdings Corporation | 30,732 | 30,732 | 30,732 | |||
Net income attributable to non-controlling interests | 7,202 | 0 | 7,202 | |||
Issuance of restricted stock (in shares) | 1,069,000 | |||||
Issuance of restricted stock | 0 | $ 1 | (1) | 0 | ||
Forfeitures of unvested restricted stock (in shares) | (12,000) | |||||
Forfeitures of unvested restricted stock | 0 | $ 0 | 0 | 0 | ||
Vesting of restricted stock | 6,050 | 6,050 | 6,050 | |||
Repurchase of common shares (in shares) | (1,494,000) | |||||
Repurchase of common shares | (23,689) | $ (2) | (13,616) | (10,071) | (23,689) | |
Exercise of stock options (in shares) | 45,000 | |||||
Exercise of stock options | 413 | $ 0 | 413 | 413 | ||
Distributions to and purchases of non-controlling interests | (6,538) | 0 | (6,538) | |||
Redemption adjustment on non-controlling interests | (104,553) | (104,553) | (104,553) | |||
Other | $ 176 | (244) | (244) | 420 | ||
Balance (in shares) at Sep. 30, 2019 | 134,171,529 | 134,172,000 | ||||
Balance at Sep. 30, 2019 | $ 905,743 | $ 134 | $ 485,415 | $ 269,169 | $ 754,718 | $ 151,025 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities | ||
Net income | $ 157,360 | $ 147,220 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 13,609 | 10,734 |
Depreciation and amortization | 160,072 | 149,022 |
Provision for bad debts | 2,344 | (373) |
Equity in earnings of unconsolidated subsidiaries | (18,710) | (14,914) |
Loss on extinguishment of debt | 10,160 | 484 |
Gain on sale of assets and businesses | (6,349) | (9,129) |
Stock compensation expense | 19,431 | 17,175 |
Amortization of debt discount, premium and issuance costs | 9,469 | 9,845 |
Deferred income taxes | (7,247) | (2,092) |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | (93,425) | 23,495 |
Other current assets | (6,016) | (10,274) |
Other assets | 1,259 | 4,828 |
Accounts payable | 1,369 | (3,507) |
Accrued expenses | 22,396 | 49,391 |
Income taxes | 918 | 9,072 |
Net cash provided by operating activities | 266,640 | 380,977 |
Investing activities | ||
Business combinations, net of cash acquired | (86,269) | (519,258) |
Purchases of property and equipment | (123,956) | (121,039) |
Investment in businesses | (60,668) | (12,936) |
Proceeds from sale of assets and businesses | 183 | 6,691 |
Net cash used in investing activities | (270,710) | (646,542) |
Financing activities | ||
Borrowings on revolving facilities | 700,000 | 420,000 |
Payments on revolving facilities | (720,000) | (585,000) |
Proceeds from term loans | 593,683 | 779,904 |
Payments on term loans | (375,084) | (8,625) |
Proceeds from 6.250% senior notes | 539,176 | 0 |
Payment on 6.375% senior notes | 710,000 | 0 |
Revolving facility debt issuance costs | (310) | (1,333) |
Borrowings of other debt | 19,282 | 30,134 |
Principal payments on other debt | (22,628) | (17,971) |
Repurchase of common stock | (37,309) | (5,640) |
Proceeds from exercise of stock options | 872 | 1,633 |
Decrease in overdrafts | (25,083) | (6,172) |
Proceeds from issuance of non-controlling interests | 18,288 | 2,926 |
Distributions to and purchases of non-controlling interests | (16,032) | (306,427) |
Net cash provided by (used in) financing activities | (35,145) | 303,429 |
Net increase (decrease) in cash and cash equivalents | (39,215) | 37,864 |
Cash and cash equivalents at beginning of period | 175,178 | 122,549 |
Cash and cash equivalents at end of period | 135,963 | 160,413 |
Supplemental Information | ||
Cash paid for interest | 149,090 | 134,378 |
Cash paid for taxes | 58,472 | 40,460 |
Non-cash equity exchange for acquisition of U.S. HealthWorks | $ 0 | $ 238,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (unaudited) Condensed Consolidated Statements of Cash Flows (unaudited) (Parentheticals) - Senior Notes | Sep. 30, 2019 |
6.25% Senior Notes Due August 15, 2026 | |
Interest rate of debt (as a percent) | 6.25% |
6.375% Senior Notes Due June 2021 | |
Interest rate of debt (as a percent) | 6.375% |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements of Select Medical Holdings Corporation (“Holdings”) include the accounts of its wholly owned subsidiary, Select Medical Corporation (“Select”). Holdings conducts substantially all of its business through Select and its subsidiaries. Holdings and Select and its subsidiaries are collectively referred to as the “Company.” The unaudited condensed consolidated financial statements of the Company as of September 30, 2019 , and for the three and nine month periods ended September 30, 2018 and 2019 , have been prepared pursuant to the rules and regulations of the Securities Exchange Commission (the “SEC”) for interim reporting and accounting principles generally accepted in the United States of America (“GAAP”). Accordingly, certain information and disclosures required by GAAP, which are normally included in the notes to consolidated financial statements, have been condensed or omitted pursuant to those rules and regulations, although the Company believes the disclosure is adequate to make the information presented not misleading. In the opinion of management, such information contains all adjustments, which are normal and recurring in nature, necessary for a fair statement of the financial position, results of operations and cash flow for such periods. All significant intercompany transactions and balances have been eliminated. The results of operations for the three and nine months ended September 30, 2019 , are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2019 . These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2018 , contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 21, 2019. |
Accounting Policies
Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingencies, at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Credit Risk Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash balances and trade receivables. The Company’s excess cash is held with large financial institutions. The Company grants unsecured credit to its patients, most of whom reside in the service area of the Company’s facilities and are insured under third-party payor agreements. The Company’s general policy is to verify insurance coverage prior to the date of admission for patients admitted to the Company’s critical illness recovery hospitals and rehabilitation hospitals. Within the Company’s outpatient rehabilitation clinics, the Company verifies insurance coverage prior to the patient’s visit. Within the Company’s Concentra centers, the Company verifies insurance coverage or receives authorization from the patient’s employer prior to the patient’s visit. Because of the geographic diversity of the Company’s facilities and non-governmental third-party payors, Medicare represents the Company’s only significant concentration of credit risk. Approximately 16% and 15% of the Company’s accounts receivable is from Medicare at December 31, 2018 , and September 30, 2019 , respectively. Leases The Company evaluates whether a contract is or contains a lease at the inception of the contract. Upon lease commencement, the date on which a lessor makes the underlying asset available to the Company for use, the Company classifies the lease as either an operating or finance lease. Most of the Company’s facility and equipment leases are classified as operating leases. Balance Sheet For both operating and finance leases, the Company recognizes a right-of-use asset and lease liability at lease commencement. A right-of-use asset represents the Company’s right to use an underlying asset for the lease term while the lease liability represents an obligation to make lease payments arising from a lease which are measured on a discounted basis. The Company elected the short-term lease exemption for its equipment leases; accordingly, equipment leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Lease liabilities are measured at the present value of the remaining, fixed lease payments at lease commencement. The Company primarily uses its incremental borrowing rate, based on the information available at lease commencement, in determining the present value of its remaining lease payments. The Company’s leases may also specify extension or termination clauses. These options are factored into the measurement of the lease liability when it is reasonably certain that the Company will exercise the option. Right-of-use assets are measured at an amount equal to the initial lease liability, plus any prepaid lease payments (less any incentives received, such as reimbursement for leasehold improvements) and initial direct costs, at the lease commencement date. The Company has elected to account for lease and non-lease components, such as common area maintenance, as a single lease component for its facility leases. As a result, the fixed payments that would otherwise be allocated to the non-lease components will be accounted for as lease payments and are included in the measurement of the Company’s right-of-use asset and lease liability. Statement of Operations For the Company’s operating leases, rent expense, a component of cost of services and general and administrative expenses on the consolidated statements of operations, is recognized on a straight-line basis over the lease term. The straight-line rent expense is reflective of the interest expense on the lease liability using the effective interest method and the amortization of the right-of-use asset. The Company may enter into arrangements to sublease portions of its facilities and the Company typically retains the obligation to the lessor under these arrangements. The Company’s subleases are classified as operating leases; accordingly, the Company continues to account for the original leases as it did prior to commencement of the subleases. Sublease income, a component of cost of services on the consolidated statements of operations, is recognized on a straight-line basis, as a reduction to rent expense, over the term of the sublease. For the Company’s finance leases, interest expense on the lease liability is recognized using the effective interest method. Amortization expense related to the right-of-use asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. The Company elected the short-term lease exemption for its equipment leases. For these leases, the Company recognizes lease payments on a straight-line basis over the lease term and variable lease payments are expensed as incurred. These expenses are included as components of cost of services on the consolidated statements of operations. The Company makes payments related to changes in indexes or rates after the lease commencement date. Additionally, the Company makes payments, which are not fixed at lease commencement, for property taxes, insurance, and common area maintenance related to its facility leases. These variable lease payments, which are expensed as incurred, are included as a component of cost of services and general and administrative expenses on the consolidated statements of operations. Recent Accounting Pronouncements Financial Instruments In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments . The current standard delays the recognition of a credit loss on a financial asset until the loss is probable of occurring. The new standard removes the requirement that a credit loss be probable of occurring for it to be recognized and requires entities to use historical experience, current conditions, and reasonable and supportable forecasts to estimate their future expected credit losses. The financial instruments subject to ASU 2016-13 are the Company’s accounts receivable and notes receivable. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance must be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the earliest comparative period in the financial statements. Given the very high rate of collectability of the Company’s financial instruments, the impact of ASU 2016-13 will not be material to the Company’s consolidated financial statements. The Company’s implementation efforts are focused on finalizing the accounting processes and related controls associated with accounting for its financial instruments under the new standard. Recently Adopted Accounting Pronouncements Leases The Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases using a modified retrospective approach as of January 1, 2019, for leases which existed on that date. Prior comparative periods were not adjusted and continue to be reported in accordance with ASC Topic 840, Leases . The Company elected the package of practical expedients, which permitted the Company not to reassess under ASC Topic 842 the Company’s prior conclusions about lease identification, lease classification, and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to the Company. The adoption of the standard resulted in the recognition of operating lease right-of-use assets of $1,015.0 million and operating lease liabilities of $1,057.0 million |
Redeemable Non-Controlling Inte
Redeemable Non-Controlling Interests | 9 Months Ended |
Sep. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Redeemable Non-Controlling Interests | Redeemable Non-Controlling Interests The ownership interests held by outside parties in subsidiaries, limited liability companies, and limited partnerships controlled by the Company are classified as non-controlling interests. Some of the Company’s non-controlling ownership interests consist of outside parties that have certain redemption rights that, if exercised, require the Company to purchase the parties’ ownership interests. These interests are classified and reported as redeemable non-controlling interests and have been adjusted to their approximate redemption values. The changes in redeemable non-controlling interests are as follows (in thousands): Nine Months Ended September 30, 2018 2019 Balance as of January 1 $ 640,818 $ 780,488 Net income attributable to redeemable non-controlling interests 5,743 7,700 Issuance and exchange of redeemable non-controlling interests 163,659 — Distributions to and purchases of redeemable non-controlling interests (203,972 ) (2,771 ) Redemption adjustment on redeemable non-controlling interests 1,051 47,470 Other 175 354 Balance as of March 31 $ 607,474 $ 833,241 Net income attributable to redeemable non-controlling interests 10,909 11,507 Distributions to and purchases of redeemable non-controlling interests (11,112 ) (395 ) Redemption adjustment on redeemable non-controlling interests 8,500 (270 ) Other 461 339 Balance as of June 30 $ 616,232 $ 844,422 Net income attributable to redeemable non-controlling interests 9,244 6,096 Distributions to and purchases of redeemable non-controlling interests (763 ) (1,721 ) Redemption adjustment on redeemable non-controlling interests 154,514 104,553 Other 347 347 Balance as of September 30 $ 779,574 $ 953,697 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions U.S. HealthWorks Acquisition On February 1, 2018, Concentra Inc. acquired all of the issued and outstanding shares of stock of U.S. HealthWorks, Inc. (“U.S. HealthWorks”), an occupational medicine and urgent care service provider, from Dignity Health Holding Corporation (“DHHC”). U.S. HealthWorks was acquired for $753.6 million . DHHC, a subsidiary of Dignity Health, was issued a 20.0% equity interest in Concentra Group Holdings Parent, LLC (“Concentra Group Holdings Parent”) which was valued at $238.0 million . The remainder of the purchase price was paid in cash. Select retained a majority voting interest in Concentra Group Holdings Parent following the closing of the transaction. For the U.S. HealthWorks acquisition, the Company allocated the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values in accordance with the provisions of ASC Topic 805, Business Combinations . During the year ended December 31, 2018, the Company finalized the purchase accounting related to this acquisition. The following table reconciles the fair values of identifiable net assets and goodwill to the consideration given for the acquired business (in thousands): Accounts receivable $ 68,934 Other current assets 10,810 Property and equipment 69,712 Identifiable intangible assets 140,406 Other assets 25,435 Goodwill 540,067 Total assets 855,364 Accounts payable and other current liabilities 49,925 Deferred income taxes and other long-term liabilities 51,851 Total liabilities 101,776 Consideration given $ 753,588 For the three months ended September 30, 2018 , U.S. HealthWorks contributed net operating revenues of $133.3 million which is reflected in the Company’s consolidated statement of operations. For the period February 1, 2018 through September 30, 2018 , U.S. HealthWorks contributed net operating revenues of $362.7 million which is reflected in the Company’s consolidated statement of operations for the nine months ended September 30, 2018 . Due to the integrated nature of the Company’s operations, the Company believes that it is not practicable to separately identify earnings of U.S. HealthWorks on a stand-alone basis. Pro Forma Results The following pro forma unaudited results of operations have been prepared assuming the acquisition of U.S. HealthWorks occurred on January 1, 2017. These results are not necessarily indicative of the results of future operations nor of the results that would have occurred had the acquisition been consummated on the aforementioned date. For the three and nine months ended September 30, 2019 , the Company’s results of operations include U.S. HealthWorks for the entire period and no pro forma adjustments were made. Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 (in thousands) Net operating revenues $ 1,267,401 $ 3,864,155 Net income attributable to Select Medical Holdings Corporation 34,441 116,135 The Company’s pro forma results were adjusted to recognize U.S. HealthWorks acquisition costs as of January 1, 2017. Accordingly, for the nine months ended September 30, 2018 , pro forma results were adjusted to exclude $2.9 million of U.S. HealthWorks acquisition costs. |
Sale of Businesses
Sale of Businesses | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of Businesses | Sale of Businesses During the nine months ended September 30, 2019 , the Company recognized a gain of $6.5 million which resulted from the sale of 22 wholly owned outpatient rehabilitation clinics to a non-consolidating subsidiary. During the nine months ended September 30, 2018 , the Company recognized a gain of $9.0 million . The gain resulted principally from the sale of 41 |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities Concentra does not own many of its medical practices, as certain states prohibit the “corporate practice of medicine,” which restricts business corporations from practicing medicine through the direct employment of physicians or from exercising control over medical decisions by physicians. In these states, Concentra typically enters into long-term management agreements with professional corporations or associations that are owned by licensed physicians, which, in turn, employ or contract with physicians who provide professional medical services in its occupational health centers. The management agreements have terms that provide for Concentra to conduct, supervise, and manage the day-to-day non-medical operations of the occupational health centers and provide all management and administrative services. Concentra receives a management fee for these services, which is based, in part, on the performance of the professional corporation or association. Additionally, the outstanding voting equity interests of the professional corporations or associations are typically owned by licensed physicians appointed at Concentra’s discretion. Concentra has the ability to direct the transfer of ownership of the professional corporation or association to a new licensed physician at any time. The total assets of Concentra’s variable interest entities, which are comprised principally of accounts receivable, were $166.2 million and $202.3 million at December 31, 2018 , and September 30, 2019 , respectively. The total liabilities of Concentra’s variable interest entities, which are comprised principally of accounts payable, accrued expenses, and obligations payable for services received under the aforementioned management agreements, were $164.4 million and $200.9 million at December 31, 2018 , and September 30, 2019 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company has operating and finance leases for its facilities and certain equipment. The Company leases its corporate office space from related parties. The Company’s critical illness recovery hospitals and rehabilitation hospitals generally have lease terms of 10 years with two , five year renewal options. These renewal options vary for hospitals which operate as a hospital within a hospital, or “HIH.” The Company’s outpatient rehabilitation clinics generally have lease terms of five years with two , three to five year renewal options. The Company’s Concentra centers generally have lease terms of 10 years with two , five year renewal options. For the three and nine months ended September 30, 2019 , the Company’s total lease cost was as follows (in thousands): Three Months Ended September 30, 2019 Unrelated Parties Related Parties Total Operating lease cost $ 68,046 $ 1,342 $ 69,388 Finance lease cost: Amortization of right-of-use assets 73 — 73 Interest on lease liabilities 259 — 259 Short-term lease cost 592 — 592 Variable lease cost 11,789 156 11,945 Sublease income (2,458 ) — (2,458 ) Total lease cost $ 78,301 $ 1,498 $ 79,799 Nine Months Ended September 30, 2019 Unrelated Parties Related Parties Total Operating lease cost $ 202,600 $ 4,026 $ 206,626 Finance lease cost: Amortization of right-of-use assets 199 — 199 Interest on lease liabilities 555 — 555 Short-term lease cost 1,776 — 1,776 Variable lease cost 32,380 397 32,777 Sublease income (7,388 ) — (7,388 ) Total lease cost $ 230,122 $ 4,423 $ 234,545 For the nine months ended September 30, 2019 , supplemental cash flow information related to leases was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 204,909 Operating cash flows for finance leases 526 Financing cash flows for finance leases 183 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (1) $ 1,202,165 Finance leases 9,102 _______________________________________________________________________________ (1) Includes the right-of-use assets obtained in exchange for lease liabilities of $1,057.0 million which were recognized upon adoption of ASC Topic 842 at January 1, 2019. As of September 30, 2019 , supplemental balance sheet information related to leases was as follows (in thousands): Operating Leases Unrelated Parties Related Parties Total Operating lease right-of-use assets $ 968,181 $ 18,338 $ 986,519 Current operating lease liabilities $ 200,012 $ 4,924 $ 204,936 Non-current operating lease liabilities 819,808 16,397 836,205 Total operating lease liabilities $ 1,019,820 $ 21,321 $ 1,041,141 Finance Leases Unrelated Parties Related Parties Total Property and equipment, net $ 5,027 $ — $ 5,027 Current portion of long-term debt and notes payable $ 210 $ — $ 210 Long-term debt, net of current portion 13,137 — 13,137 Total finance lease liabilities $ 13,347 $ — $ 13,347 As of September 30, 2019 , the weighted average remaining lease terms and discount rates were as follows: Weighted average remaining lease term (in years): Operating leases 8.1 Finance leases 34.9 Weighted average discount rate: Operating leases 5.9 % Finance leases 7.4 % As of September 30, 2019 , maturities of lease liabilities were approximately as follows (in thousands): Operating Leases Finance Leases Total 2019 (remainder of year) $ 67,567 $ 294 $ 67,861 2020 250,778 1,182 251,960 2021 213,486 1,193 214,679 2022 173,399 1,203 174,602 2023 131,550 1,214 132,764 Thereafter 556,103 31,630 587,733 Total undiscounted cash flows 1,392,883 36,716 1,429,599 Less: Imputed interest 351,742 23,369 375,111 Total discounted lease liabilities $ 1,041,141 $ 13,347 $ 1,054,488 As disclosed in the Company’s 2018 Annual Report on Form 10-K, the Company’s undiscounted future minimum lease obligations on long-term, non-cancelable operating leases with related and unrelated parties were approximately as follows as of December 31, 2018 (in thousands): Total 2019 $ 267,846 2020 231,711 2021 193,155 2022 150,155 2023 107,759 Thereafter 484,038 $ 1,434,664 |
Leases | Leases The Company has operating and finance leases for its facilities and certain equipment. The Company leases its corporate office space from related parties. The Company’s critical illness recovery hospitals and rehabilitation hospitals generally have lease terms of 10 years with two , five year renewal options. These renewal options vary for hospitals which operate as a hospital within a hospital, or “HIH.” The Company’s outpatient rehabilitation clinics generally have lease terms of five years with two , three to five year renewal options. The Company’s Concentra centers generally have lease terms of 10 years with two , five year renewal options. For the three and nine months ended September 30, 2019 , the Company’s total lease cost was as follows (in thousands): Three Months Ended September 30, 2019 Unrelated Parties Related Parties Total Operating lease cost $ 68,046 $ 1,342 $ 69,388 Finance lease cost: Amortization of right-of-use assets 73 — 73 Interest on lease liabilities 259 — 259 Short-term lease cost 592 — 592 Variable lease cost 11,789 156 11,945 Sublease income (2,458 ) — (2,458 ) Total lease cost $ 78,301 $ 1,498 $ 79,799 Nine Months Ended September 30, 2019 Unrelated Parties Related Parties Total Operating lease cost $ 202,600 $ 4,026 $ 206,626 Finance lease cost: Amortization of right-of-use assets 199 — 199 Interest on lease liabilities 555 — 555 Short-term lease cost 1,776 — 1,776 Variable lease cost 32,380 397 32,777 Sublease income (7,388 ) — (7,388 ) Total lease cost $ 230,122 $ 4,423 $ 234,545 For the nine months ended September 30, 2019 , supplemental cash flow information related to leases was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 204,909 Operating cash flows for finance leases 526 Financing cash flows for finance leases 183 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (1) $ 1,202,165 Finance leases 9,102 _______________________________________________________________________________ (1) Includes the right-of-use assets obtained in exchange for lease liabilities of $1,057.0 million which were recognized upon adoption of ASC Topic 842 at January 1, 2019. As of September 30, 2019 , supplemental balance sheet information related to leases was as follows (in thousands): Operating Leases Unrelated Parties Related Parties Total Operating lease right-of-use assets $ 968,181 $ 18,338 $ 986,519 Current operating lease liabilities $ 200,012 $ 4,924 $ 204,936 Non-current operating lease liabilities 819,808 16,397 836,205 Total operating lease liabilities $ 1,019,820 $ 21,321 $ 1,041,141 Finance Leases Unrelated Parties Related Parties Total Property and equipment, net $ 5,027 $ — $ 5,027 Current portion of long-term debt and notes payable $ 210 $ — $ 210 Long-term debt, net of current portion 13,137 — 13,137 Total finance lease liabilities $ 13,347 $ — $ 13,347 As of September 30, 2019 , the weighted average remaining lease terms and discount rates were as follows: Weighted average remaining lease term (in years): Operating leases 8.1 Finance leases 34.9 Weighted average discount rate: Operating leases 5.9 % Finance leases 7.4 % As of September 30, 2019 , maturities of lease liabilities were approximately as follows (in thousands): Operating Leases Finance Leases Total 2019 (remainder of year) $ 67,567 $ 294 $ 67,861 2020 250,778 1,182 251,960 2021 213,486 1,193 214,679 2022 173,399 1,203 174,602 2023 131,550 1,214 132,764 Thereafter 556,103 31,630 587,733 Total undiscounted cash flows 1,392,883 36,716 1,429,599 Less: Imputed interest 351,742 23,369 375,111 Total discounted lease liabilities $ 1,041,141 $ 13,347 $ 1,054,488 As disclosed in the Company’s 2018 Annual Report on Form 10-K, the Company’s undiscounted future minimum lease obligations on long-term, non-cancelable operating leases with related and unrelated parties were approximately as follows as of December 31, 2018 (in thousands): Total 2019 $ 267,846 2020 231,711 2021 193,155 2022 150,155 2023 107,759 Thereafter 484,038 $ 1,434,664 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Goodwill The following table shows changes in the carrying amounts of goodwill by reporting unit for the nine months ended September 30, 2019 : Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Total (in thousands) Balance as of December 31, 2018 $ 1,045,220 $ 416,646 $ 642,422 $ 1,216,438 $ 3,320,726 Acquired 30,028 14,254 7,996 18,299 70,577 Sold — — (5,629 ) — (5,629 ) Measurement period adjustment 421 — — (3,439 ) (3,018 ) Balance as of September 30, 2019 $ 1,075,669 $ 430,900 $ 644,789 $ 1,231,298 $ 3,382,656 Identifiable Intangible Assets The following table provides the gross carrying amounts, accumulated amortization, and net carrying amounts for the Company’s identifiable intangible assets: December 31, 2018 September 30, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in thousands) Indefinite-lived intangible assets: Trademarks $ 166,698 $ — $ 166,698 $ 166,698 $ — $ 166,698 Certificates of need 19,174 — 19,174 17,166 — 17,166 Accreditations 1,857 — 1,857 1,874 — 1,874 Finite-lived intangible assets: Trademarks 5,000 (4,583 ) 417 5,000 (5,000 ) — Customer relationships 280,710 (61,900 ) 218,810 287,880 (81,010 ) 206,870 Favorable leasehold interests (1) 13,553 (6,064 ) 7,489 — — — Non-compete agreements 29,400 (6,152 ) 23,248 31,255 (8,100 ) 23,155 Total identifiable intangible assets $ 516,392 $ (78,699 ) $ 437,693 $ 509,873 $ (94,110 ) $ 415,763 _______________________________________________________________________________ (1) Favorable leasehold interests are a component of the operating lease right-of-use assets upon adoption of ASC Topic 842, Leases . The Company’s accreditations and indefinite-lived trademarks have renewal terms and the costs to renew these intangible assets are expensed as incurred. At September 30, 2019 , the accreditations and indefinite-lived trademarks have a weighted average time until next renewal of 1.5 years and 7.4 years , respectively. The Company’s finite-lived intangible assets amortize over their estimated useful lives. Amortization expense was $7.9 million and $6.9 million for the three months ended September 30, 2018 and 2019 , respectively. Amortization expense was $22.1 million and $22.9 million for the nine months ended September 30, 2018 and 2019 , respectively. |
Long-Term Debt and Notes Payabl
Long-Term Debt and Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Notes Payable | Long-Term Debt and Notes Payable For purposes of this indebtedness footnote, references to Select exclude Concentra Inc. because the Concentra credit facilities are non-recourse to Holdings and Select. As of September 30, 2019 , the Company’s long-term debt and notes payable were as follows (in thousands): Principal Outstanding Unamortized Discount Unamortized Issuance Costs Carrying Value Fair Value Select: 6.250% senior notes $ 550,000 $ — $ (10,582 ) $ 539,418 $ 576,125 Credit facilities: Term loan 1,531,068 (10,915 ) (11,302 ) 1,508,851 1,532,982 Other debt, including finance leases 70,816 — (420 ) 70,396 70,396 Total Select debt 2,151,884 (10,915 ) (22,304 ) 2,118,665 2,179,503 Concentra Inc.: Credit facilities: Term loan 1,240,298 (2,643 ) (10,008 ) 1,227,647 1,246,499 Other debt, including finance leases 5,850 — — 5,850 5,850 Total Concentra Inc. debt 1,246,148 (2,643 ) (10,008 ) 1,233,497 1,252,349 Total debt $ 3,398,032 $ (13,558 ) $ (32,312 ) $ 3,352,162 $ 3,431,852 Principal maturities of the Company’s long-term debt and notes payable were approximately as follows (in thousands): 2019 2020 2021 2022 2023 Thereafter Total Select: 6.250% senior notes $ — $ — $ — $ — $ — $ 550,000 $ 550,000 Credit facilities: Term loan 1,250 5,000 5,000 5,000 5,000 1,509,818 1,531,068 Other debt, including finance leases 3,541 5,502 1,814 18,036 38 41,885 70,816 Total Select debt 4,791 10,502 6,814 23,036 5,038 2,101,703 2,151,884 Concentra Inc.: Credit facilities: Term loan 250 1,000 1,000 1,238,048 — — 1,240,298 Other debt, including finance leases 136 1,194 330 358 363 3,469 5,850 Total Concentra Inc. debt 386 2,194 1,330 1,238,406 363 3,469 1,246,148 Total debt $ 5,177 $ 12,696 $ 8,144 $ 1,261,442 $ 5,401 $ 2,105,172 $ 3,398,032 As of December 31, 2018 , the Company’s long-term debt and notes payable were as follows (in thousands): Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value Select: 6.375% senior notes $ 710,000 $ 550 $ (4,642 ) $ 705,908 $ 706,450 Credit facilities: Revolving facility 20,000 — — 20,000 18,400 Term loan 1,129,875 (9,690 ) (9,321 ) 1,110,864 1,076,206 Other 56,415 — (484 ) 55,931 55,931 Total Select debt 1,916,290 (9,140 ) (14,447 ) 1,892,703 1,856,987 Concentra Inc.: Credit facilities: Term loans 1,414,175 (2,765 ) (18,648 ) 1,392,762 1,357,802 Other debt, including finance leases 7,916 — — 7,916 7,916 Total Concentra Inc. debt 1,422,091 (2,765 ) (18,648 ) 1,400,678 1,365,718 Total debt $ 3,338,381 $ (11,905 ) $ (33,095 ) $ 3,293,381 $ 3,222,705 Concentra Credit Facilities On April 8, 2019, Concentra Inc. entered into Amendment No. 5 to the Concentra first lien credit agreement. Amendment No. 5, among other things, (i) extended the maturity date of the Concentra revolving facility from June 1, 2020 to June 1, 2021 and (ii) increased the aggregate commitments available under the Concentra revolving facility from $75.0 million to $100.0 million . On September 20, 2019, Concentra Inc. entered into Amendment No. 6 to the Concentra first lien credit agreement. Amendment No. 6, among other things, (i) provided for an additional $100.0 million in term loans that, along with the existing Concentra first lien term loans, have a maturity date of June 1, 2022 and (ii) extended the maturity date of the revolving facility from June 1, 2021 to March 1, 2022. Concentra Inc. used the incremental borrowings under the Concentra first lien credit agreement to prepay in full all of its term loans outstanding under the Concentra second lien credit agreement on September 20, 2019. Select Credit Facilities On August 1, 2019, Select entered into Amendment No. 3 to the Select credit agreement dated March 6, 2017. Amendment No. 3, among other things, (i) provided for an additional $500.0 million in term loans that, along with the existing term loans, have a maturity date of March 6, 2025, (ii) extended the maturity date of Select’s revolving facility from March 6, 2022 to March 6, 2024, and (iii) increased the total net leverage ratio permitted under the Select credit agreement. Select 6.250% Senior Notes On August 1, 2019, Select issued and sold $550.0 million aggregate principal amount of 6.250% senior notes due August 15, 2026. Select used a portion of the net proceeds of the 6.250% senior notes, together with a portion of the proceeds from the incremental term loan borrowings under the Select credit facilities (as described above), in part to (i) redeem in full the $710.0 million aggregate principal amount of the 6.375% senior notes on August 30, 2019 at the redemption price of 100.000% of the principal amount plus accrued and unpaid interest, (ii) repay in full the outstanding borrowings under Select’s revolving facility, and (iii) pay related fees and expenses associated with the financing. Interest on the senior notes accrues at the rate of 6.250% per annum and is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on February 15, 2020. The senior notes are Select’s senior unsecured obligations which are subordinated to all of Select’s existing and future secured indebtedness, including the Select credit facilities. The senior notes rank equally in right of payment with all of Select’s other existing and future senior unsecured indebtedness and senior in right of payment to all of Select’s existing and future subordinated indebtedness. The senior notes are unconditionally guaranteed on a joint and several basis by each of Select’s direct or indirect existing and future domestic restricted subsidiaries, other than certain non-guarantor subsidiaries. Select may redeem some or all of the senior notes prior to August 15, 2022 by paying a “make-whole” premium. Select may redeem some or all of the senior notes on or after August 15, 2022 at specified redemption prices. In addition, prior to August 15, 2022, Select may redeem up to 40% of the principal amount of the senior notes with the net proceeds of certain equity offerings at a price of 106.250% plus accrued and unpaid interest, if any. Select is obligated to offer to repurchase the senior notes at a price of 101% of their principal amount plus accrued and unpaid interest, if any, as a result of certain change of control events. These restrictions and prohibitions are subject to certain qualifications and exceptions. The terms of the senior notes contains covenants that, among other things, limit Select’s ability and the ability of certain of Select’s subsidiaries to (i) grant liens on its assets, (ii) make dividend payments, other distributions or other restricted payments, (iii) incur restrictions on the ability of Select’s restricted subsidiaries to pay dividends or make other payments, (iv) enter into sale and leaseback transactions, (v) merge, consolidate, transfer or dispose of substantially all of their assets, (vi) incur additional indebtedness, (vii) make investments, (viii) sell assets, including capital stock of subsidiaries, (ix) use the proceeds from sales of assets, including capital stock of restricted subsidiaries, and (x) enter into transactions with affiliates. These covenants are subject to a number of exceptions, limitations and qualifications. Loss on Early Retirement of Debt The Company incurred losses on early retirement of debt totaling $18.6 million for the nine months ended September 30, 2019 . Excess Cash Flow Payment In February 2019, Select made a principal prepayment of approximately $98.8 million associated with its term loans in accordance with the provision in the Select credit facilities that requires mandatory prepayments of term loans as a result of annual excess cash flow, as defined in the Select credit facilities. In February 2019, Concentra Inc. made a principal prepayment of approximately $33.9 million associated with its term loans in accordance with the provision in the Concentra credit facilities that requires mandatory prepayments of term loans as a result of annual excess cash flow, as defined in the Concentra credit facilities. Fair Value The Company considers the inputs in the valuation process to be Level 2 in the fair value hierarchy for Select’s 6.250% senior notes and for the Select and Concentra credit facilities. Level 2 in the fair value hierarchy is defined as inputs that are observable for the asset or liability, either directly or indirectly, which includes quoted prices for identical assets or liabilities in markets that are not active. The fair values of the Select credit facilities and the Concentra credit facilities were based on quoted market prices for this debt in the syndicated loan market. The fair value of Select’s 6.250% senior notes was based on quoted market prices. The carrying amount of other debt, principally short-term notes payable, approximates fair value. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company’s reportable segments include the critical illness recovery hospital segment, rehabilitation hospital segment, outpatient rehabilitation segment, and Concentra segment. Other activities include the Company’s corporate shared services, certain investments, and employee leasing services with non-consolidating subsidiaries. Prior to 2019, these employee leasing services were reflected in the financial results of the Company’s reportable segments. Net operating revenues have been conformed to the current presentation for the three and nine months ended September 30, 2018 . The Company evaluates performance of the segments based on Adjusted EBITDA. Adjusted EBITDA is defined as earnings excluding interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, acquisition costs associated with U.S. HealthWorks, gain (loss) on sale of businesses, and equity in earnings (losses) of unconsolidated subsidiaries. The Company has provided additional information regarding its reportable segments, such as total assets, which contributes to the understanding of the Company and provides useful information to the users of the consolidated financial statements. The following tables summarize selected financial data for the Company’s reportable segments. Prior year results presented herein have been changed to conform to the current presentation. Three Months Ended September 30, Nine Months Ended September 30, 2018 2019 2018 2019 (in thousands) Net operating revenues: Critical illness recovery hospital $ 420,108 $ 462,892 $ 1,327,236 $ 1,381,569 Rehabilitation hospital 144,588 173,369 432,675 488,301 Outpatient rehabilitation 245,234 265,330 743,379 774,126 Concentra 404,481 421,900 1,173,420 1,231,672 Other 52,990 69,852 139,865 203,670 Total Company $ 1,267,401 $ 1,393,343 $ 3,816,575 $ 4,079,338 Adjusted EBITDA: Critical illness recovery hospital $ 53,292 $ 57,247 $ 186,989 $ 194,383 Rehabilitation hospital 25,343 36,780 80,314 92,545 Outpatient rehabilitation 34,531 40,040 107,003 111,615 Concentra 68,754 77,679 199,119 220,024 Other (25,292 ) (29,081 ) (75,337 ) (79,552 ) Total Company $ 156,628 $ 182,665 $ 498,088 $ 539,015 Total assets: Critical illness recovery hospital $ 1,785,336 $ 2,116,512 $ 1,785,336 $ 2,116,512 Rehabilitation hospital 888,342 1,121,260 888,342 1,121,260 Outpatient rehabilitation 991,105 1,280,712 991,105 1,280,712 Concentra 2,201,869 2,366,227 2,201,869 2,366,227 Other 113,529 270,045 113,529 270,045 Total Company $ 5,980,181 $ 7,154,756 $ 5,980,181 $ 7,154,756 Purchases of property and equipment: Critical illness recovery hospital $ 8,134 $ 12,254 $ 31,455 $ 36,902 Rehabilitation hospital 8,769 5,293 29,766 23,832 Outpatient rehabilitation 7,209 7,476 22,565 23,221 Concentra 12,539 8,240 29,281 36,178 Other 2,740 1,408 7,972 3,823 Total Company $ 39,391 $ 34,671 $ 121,039 $ 123,956 A reconciliation of Adjusted EBITDA to income before income taxes is as follows: Three Months Ended September 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 53,292 $ 25,343 $ 34,531 $ 68,754 $ (25,292 ) Depreciation and amortization (11,136 ) (6,079 ) (6,597 ) (24,488 ) (2,227 ) Stock compensation expense — — — (767 ) (5,497 ) Income (loss) from operations $ 42,156 $ 19,264 $ 27,934 $ 43,499 $ (33,016 ) $ 99,837 Equity in earnings of unconsolidated subsidiaries 5,432 Gain on sale of businesses 2,139 Interest expense (50,669 ) Income before income taxes $ 56,739 Three Months Ended September 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 57,247 $ 36,780 $ 40,040 $ 77,679 $ (29,081 ) Depreciation and amortization (12,484 ) (7,234 ) (6,887 ) (23,989 ) (2,347 ) Stock compensation expense — — — (768 ) (6,050 ) Income (loss) from operations $ 44,763 $ 29,546 $ 33,153 $ 52,922 $ (37,478 ) $ 122,906 Loss on early retirement of debt (18,643 ) Equity in earnings of unconsolidated subsidiaries 6,950 Interest expense (54,336 ) Income before income taxes $ 56,877 Nine Months Ended September 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 186,989 $ 80,314 $ 107,003 $ 199,119 $ (75,337 ) Depreciation and amortization (34,146 ) (17,816 ) (19,938 ) (70,332 ) (6,790 ) Stock compensation expense — — — (2,116 ) (15,059 ) U.S. HealthWorks acquisition costs — — — (2,895 ) — Income (loss) from operations $ 152,843 $ 62,498 $ 87,065 $ 123,776 $ (97,186 ) $ 328,996 Loss on early retirement of debt (10,255 ) Equity in earnings of unconsolidated subsidiaries 14,914 Gain on sale of businesses 9,016 Interest expense (147,991 ) Income before income taxes $ 194,680 Nine Months Ended September 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 194,383 $ 92,545 $ 111,615 $ 220,024 $ (79,552 ) Depreciation and amortization (38,430 ) (20,332 ) (20,910 ) (73,372 ) (7,028 ) Stock compensation expense — — — (2,302 ) (17,129 ) Income (loss) from operations $ 155,953 $ 72,213 $ 90,705 $ 144,350 $ (103,709 ) $ 359,512 Loss on early retirement of debt (18,643 ) Equity in earnings of unconsolidated subsidiaries 18,710 Gain on sale of businesses 6,532 Interest expense (156,611 ) Income before income taxes $ 209,500 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Net operating revenues consist primarily of revenues generated from services provided to patients and other revenues for services provided to healthcare institutions under contractual arrangements. The following tables disaggregate the Company’s net operating revenues for the three and nine months ended September 30, 2018 and 2019 : Three Months Ended September 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 210,101 $ 71,564 $ 40,563 $ 455 $ — $ 322,683 Non-Medicare 206,629 64,322 185,787 401,537 — 858,275 Total patient services revenues 416,730 135,886 226,350 401,992 — 1,180,958 Other revenues (1) 3,378 8,702 18,884 2,489 52,990 86,443 Total net operating revenues $ 420,108 $ 144,588 $ 245,234 $ 404,481 $ 52,990 $ 1,267,401 Three Months Ended September 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 218,096 $ 86,495 $ 44,230 $ 451 $ — $ 349,272 Non-Medicare 240,603 76,957 200,093 418,380 — 936,033 Total patient services revenues 458,699 163,452 244,323 418,831 — 1,285,305 Other revenues 4,193 9,917 21,007 3,069 69,852 108,038 Total net operating revenues $ 462,892 $ 173,369 $ 265,330 $ 421,900 $ 69,852 $ 1,393,343 Nine Months Ended September 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 676,950 $ 217,459 $ 120,228 $ 1,600 $ — $ 1,016,237 Non-Medicare 639,718 188,611 569,298 1,164,711 — 2,562,338 Total patient services revenues 1,316,668 406,070 689,526 1,166,311 — 3,578,575 Other revenues (1) 10,568 26,605 53,853 7,109 139,865 238,000 Total net operating revenues $ 1,327,236 $ 432,675 $ 743,379 $ 1,173,420 $ 139,865 $ 3,816,575 Nine Months Ended September 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 679,953 $ 238,334 $ 128,377 $ 1,480 $ — $ 1,048,144 Non-Medicare 692,178 221,571 586,248 1,221,893 — 2,721,890 Total patient services revenues 1,372,131 459,905 714,625 1,223,373 — 3,770,034 Other revenues 9,438 28,396 59,501 8,299 203,670 309,304 Total net operating revenues $ 1,381,569 $ 488,301 $ 774,126 $ 1,231,672 $ 203,670 $ 4,079,338 _______________________________________________________________________________ (1) For the three and nine months ended September 30, 2018 , the financial results of the Company’s reportable segments have been changed to remove the net operating revenues associated with employee leasing services provided to the Company’s non-consolidating subsidiaries. These results are now reported as part of the Company’s other activities. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The Company’s capital structure includes common stock and unvested restricted stock awards. To compute earnings per share (“EPS”), the Company applies the two-class method because the Company’s unvested restricted stock awards are participating securities which are entitled to participate equally with the Company’s common stock in undistributed earnings. Application of the Company’s two-class method is as follows: (i) Net income attributable to the Company is reduced by the amount of dividends declared and by the contractual amount of dividends that must be paid for the current period for each class of stock. There were no dividends declared or contractual dividends paid for the three and nine months ended September 30, 2018 and 2019 . (ii) The remaining undistributed net income of the Company is then equally allocated to its common stock and unvested restricted stock awards, as if all of the earnings for the period had been distributed. The total net income allocated to each security is determined by adding both distributed and undistributed net income for the period. (i) The net income allocated to each security is then divided by the weighted average number of outstanding shares for the period to determine the EPS for each security considered in the two-class method. The following table sets forth the net income attributable to the Company, its common shares outstanding, and its participating securities outstanding. Basic EPS Diluted EPS Three Months Ended September 30, Three Months Ended September 30, 2018 2019 2018 2019 (in thousands) Net income $ 42,679 $ 44,030 $ 42,679 $ 44,030 Less: net income attributable to non-controlling interests 9,762 13,298 9,762 13,298 Net income attributable to the Company 32,917 30,732 32,917 30,732 Less: net income attributable to participating securities 1,098 1,052 1,098 1,052 Net income attributable to common shares $ 31,819 $ 29,680 $ 31,819 $ 29,680 Basic EPS Diluted EPS Nine Months Ended September 30, Nine Months Ended September 30, 2018 2019 2018 2019 (in thousands) Net income $ 147,220 $ 157,360 $ 147,220 $ 157,360 Less: net income attributable to non-controlling interests 34,053 40,978 34,053 40,978 Net income attributable to the Company 113,167 116,382 113,167 116,382 Less: net income attributable to participating securities 3,732 3,889 3,729 3,888 Net income attributable to common shares $ 109,435 $ 112,493 $ 109,438 $ 112,494 The following tables set forth the computation of EPS under the two-class method: Three Months Ended September 30, 2018 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 31,819 130,387 $ 0.24 $ 31,819 130,447 $ 0.24 Participating securities 1,098 4,501 $ 0.24 1,098 4,501 $ 0.24 Total Company $ 32,917 $ 32,917 Three Months Ended September 30, 2019 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 29,680 129,988 $ 0.23 $ 29,680 130,007 $ 0.23 Participating securities 1,052 4,607 $ 0.23 1,052 4,607 $ 0.23 Total Company $ 30,732 $ 30,732 Nine Months Ended September 30, 2018 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 109,435 129,972 $ 0.84 $ 109,438 130,066 $ 0.84 Participating securities 3,732 4,432 $ 0.84 3,729 4,432 $ 0.84 Total Company $ 113,167 $ 113,167 Nine Months Ended September 30, 2019 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 112,493 130,442 $ 0.86 $ 112,494 130,474 $ 0.86 Participating securities 3,889 4,509 $ 0.86 3,888 4,509 $ 0.86 Total Company $ 116,382 $ 116,382 _______________________________________________________________________________ (1) Represents the weighted average share count outstanding during the period. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation The Company is a party to various legal actions, proceedings, and claims (some of which are not insured), and regulatory and other governmental audits and investigations in the ordinary course of its business. The Company cannot predict the ultimate outcome of pending litigation, proceedings, and regulatory and other governmental audits and investigations. These matters could potentially subject the Company to sanctions, damages, recoupments, fines, and other penalties. The Department of Justice, Centers for Medicare & Medicaid Services (“CMS”), or other federal and state enforcement and regulatory agencies may conduct additional investigations related to the Company’s businesses in the future that may, either individually or in the aggregate, have a material adverse effect on the Company’s business, financial position, results of operations, and liquidity. To address claims arising out of the Company’s operations, the Company maintains professional malpractice liability insurance and general liability insurance coverages through a number of different programs that are dependent upon such factors as the state where the Company is operating and whether the operations are wholly owned or are operated through a joint venture. For the Company’s wholly owned operations, the Company currently maintains insurance coverages under a combination of policies with a total annual aggregate limit of up to $40.0 million . The Company’s insurance for the professional liability coverage is written on a “claims-made” basis, and its commercial general liability coverage is maintained on an “occurrence” basis. These coverages apply after a self-insured retention limit is exceeded. For the Company’s joint venture operations, the Company has numerous programs that are designed to respond to the risks of the specific joint venture. The annual aggregate limit under these programs ranges from $5.0 million to $20.0 million . The policies are generally written on a “claims-made” basis. Each of these programs has either a deductible or self-insured retention limit. The Company reviews its insurance program annually and may make adjustments to the amount of insurance coverage and self-insured retentions in future years. The Company also maintains umbrella liability insurance covering claims which, due to their nature or amount, are not covered by or not fully covered by the Company’s other insurance policies. These insurance policies also do not generally cover punitive damages and are subject to various deductibles and policy limits. Significant legal actions, as well as the cost and possible lack of available insurance, could subject the Company to substantial uninsured liabilities. In the Company’s opinion, the outcome of these actions, individually or in the aggregate, will not have a material adverse effect on its financial position, results of operations, or cash flows. Healthcare providers are subject to lawsuits under the qui tam provisions of the federal False Claims Act. Qui tam lawsuits typically remain under seal (hence, usually unknown to the defendant) for some time while the government decides whether or not to intervene on behalf of a private qui tam plaintiff (known as a relator) and take the lead in the litigation. These lawsuits can involve significant monetary damages and penalties and award bounties to private plaintiffs who successfully bring the suits. The Company is and has been a defendant in these cases in the past, and may be named as a defendant in similar cases from time to time in the future. Evansville Litigation. On October 19, 2015, the plaintiff‑relators filed a Second Amended Complaint in United States of America, ex rel. Tracy Conroy, Pamela Schenk and Lisa Wilson v. Select Medical Corporation, Select Specialty Hospital-Evansville, LLC (“SSH‑Evansville”), Select Employment Services, Inc., and Dr. Richard Sloan. The case is a civil action filed in the United States District Court for the Southern District of Indiana by private plaintiff‑relators on behalf of the United States under the federal False Claims Act. The plaintiff‑relators are the former CEO and two former case managers at SSH‑Evansville, and the defendants currently include the Company, SSH‑Evansville, a subsidiary of the Company serving as common paymaster for its employees, and a physician who practices at SSH‑Evansville. The plaintiff‑relators allege that SSH‑Evansville discharged patients too early or held patients too long, improperly discharged patients to and readmitted them from short stay hospitals, up‑coded diagnoses at admission, and admitted patients for whom long‑term acute care was not medically necessary. They also allege that the defendants engaged in retaliation in violation of federal and state law. The Second Amended Complaint replaced a prior complaint that was filed under seal on September 28, 2012 and served on the Company on February 15, 2013, after a federal magistrate judge unsealed it on January 8, 2013. All deadlines in the case had been stayed after the seal was lifted in order to allow the government time to complete its investigation and to decide whether or not to intervene. On June 19, 2015, the United States Department of Justice notified the District Court of its decision not to intervene in the case. In December 2015, the defendants filed a Motion to Dismiss the Second Amended Complaint on multiple grounds, including that the action is disallowed by the False Claims Act’s public disclosure bar, which disqualifies qui tam actions that are based on fraud already publicly disclosed through enumerated sources, unless the relator is an original source, and that the plaintiff‑relators did not plead their claims with sufficient particularity, as required by the Federal Rules of Civil Procedure. Thereafter, the United States filed a notice asserting a veto of the defendants’ use of the public disclosure bar for claims arising from conduct from and after March 23, 2010, which was based on certain statutory changes to the public disclosure bar language included in the Affordable Care Act. On September 30, 2016, the District Court partially granted and partially denied the defendants’ Motion to Dismiss. It ruled that the plaintiff‑relators alleged substantially the same conduct as had been publicly disclosed and that the plaintiff-relators are not original sources, so that the public disclosure bar requires dismissal of all non‑retaliation claims arising from conduct before March 23, 2010. The District Court also ruled that the statutory changes to the public disclosure bar gave the United States the power to veto its applicability to claims arising from conduct on and after March 23, 2010, and therefore did not dismiss those claims based on the public disclosure bar. However, the District Court ruled that the plaintiff‑relators did not plead certain of their claims relating to interrupted stay manipulation and premature discharging of patients with the requisite particularity, and dismissed those claims. The District Court declined to dismiss the plaintiff-relators’ claims arising from conduct from and after March 23, 2010 relating to delayed discharging of patients and up-coding and the plaintiff-relators’ retaliation claims. The plaintiff-relators then proposed a case management plan seeking nationwide discovery involving all of the Company’s LTCHs for the period from March 23, 2010 through the present and allowing discovery that would facilitate the use of statistical sampling to prove liability, which the defendants opposed. In April 2018, a U.S. magistrate judge ruled that plaintiff‑relators’ discovery will be limited to only SSH-Evansville for the period from March 23, 2010 through September 30, 2016, and that the plaintiff‑relators will be required to prove the fraud that they allege on a claim-by-claim basis, rather than using statistical sampling. The plaintiff-relators appealed this decision to the district judge who, in March 2019, affirmed the decision of the magistrate judge regarding the geographic and temporal scope of the case, but ruled that the question of statistical sampling is not ripe for review. In October 2019, the Company entered into a settlement agreement with the United States government and the plaintiff-relators. Under the terms of the settlement, the Company agreed to make payments to the government, the plaintiff-relators and their counsel. Such payments, in the aggregate, are immaterial to the Company’s financial statements. In the settlement agreement, the government and the plaintiff-relators released all defendants from liability for all conduct alleged in the complaint, and the Company admitted no liability or wrongdoing. Wilmington Litigation. On January 19, 2017, the United States District Court for the District of Delaware unsealed a qui tam Complaint in United States of America and State of Delaware ex rel. Theresa Kelly v. Select Specialty Hospital-Wilmington, Inc. (“SSH‑Wilmington”), Select Specialty Hospitals, Inc., Select Employment Services, Inc., Select Medical Corporation, and Crystal Cheek, No. 16‑347‑LPS. The Complaint was initially filed under seal in May 2016 by a former chief nursing officer at SSH‑Wilmington and was unsealed after the United States filed a Notice of Election to Decline Intervention in January 2017. The corporate defendants were served in March 2017. In the complaint, the plaintiff‑relator alleges that the Select defendants and an individual defendant, who is a former health information manager at SSH‑Wilmington, violated the False Claims Act and the Delaware False Claims and Reporting Act based on allegedly falsifying medical practitioner signatures on medical records and failing to properly examine the credentials of medical practitioners at SSH‑Wilmington. In response to the Select defendants’ motion to dismiss the Complaint, in May 2017 the plaintiff-relator filed an Amended Complaint asserting the same causes of action. The Select defendants filed a Motion to Dismiss the Amended Complaint based on numerous grounds, including that the Amended Complaint did not plead any alleged fraud with sufficient particularity, failed to plead that the alleged fraud was material to the government’s payment decision, failed to plead sufficient facts to establish that the Select defendants knowingly submitted false claims or records, and failed to allege any reverse false claim. In March 2018, the District Court dismissed the plaintiff‑relator’s claims related to the alleged failure to properly examine medical practitioners’ credentials, her reverse false claims allegations, and her claim that defendants violated the Delaware False Claims and Reporting Act. It denied the defendants’ motion to dismiss claims that the allegedly falsified medical practitioner signatures violated the False Claims Act. Separately, the District Court dismissed the individual defendant due to plaintiff-relator’s failure to timely serve the amended complaint upon her. In March 2017, the plaintiff-relator initiated a second action by filing a Complaint in the Superior Court of the State of Delaware in Theresa Kelly v. Select Medical Corporation, Select Employment Services, Inc., and SSH‑Wilmington, C.A. No. N17C-03-293 CLS. The Delaware Complaint alleges that the defendants retaliated against her in violation of the Delaware Whistleblowers’ Protection Act for reporting the same alleged violations that are the subject of the federal Amended Complaint. The defendants filed a motion to dismiss, or alternatively to stay, the Delaware Complaint based on the pending federal Amended Complaint and the failure to allege facts to support a violation of the Delaware Whistleblowers’ Protection Act. In January 2018, the Court stayed the Delaware Complaint pending the outcome of the federal case. The Company intends to vigorously defend these actions, but at this time the Company is unable to predict the timing and outcome of this matter. Contract Therapy Subpoena. On May 18, 2017, the Company received a subpoena from the U.S. Attorney’s Office for the District of New Jersey seeking various documents principally relating to the Company’s contract therapy division, which contracted to furnish rehabilitation therapy services to residents of skilled nursing facilities (“SNFs”) and other providers. The Company operated its contract therapy division through a subsidiary until March 31, 2016, when the Company sold the stock of the subsidiary. The subpoena seeks documents that appear to be aimed at assessing whether therapy services were furnished and billed in compliance with Medicare SNF billing requirements, including whether therapy services were coded at inappropriate levels and whether excessive or unnecessary therapy was furnished to justify coding at higher paying levels. The Company does not know whether the subpoena has been issued in connection with a qui tam lawsuit or in connection with possible civil, criminal or administrative proceedings by the government. The Company is producing documents in response to the subpoena and intends to fully cooperate with this investigation. At this time, the Company is unable to predict the timing and outcome of this matter. |
Supplemental Financial Informat
Supplemental Financial Information of Concentra Group Holdings Parent | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Financial Information [Abstract] | |
Supplemental Financial Information of Concentra Group Holdings Parent | Supplemental Financial Information of Concentra Group Holdings Parent The following tables summarize selected financial information of Concentra Group Holdings Parent. December 31, 2018 September 30, 2019 (in thousands) Assets Current assets $ 385,094 $ 287,514 Non-current assets 1,793,774 2,078,713 Total Assets $ 2,178,868 $ 2,366,227 Liabilities and Equity Current liabilities $ 206,386 $ 232,035 Non-current liabilities 1,478,084 1,587,721 Total Liabilities 1,684,470 1,819,756 Redeemable non-controlling interests 18,525 17,268 Members' Equity of Concentra Group Holdings Parent 470,329 523,814 Non-controlling interests 5,544 5,389 Total Equity 475,873 529,203 Total Liabilities and Equity $ 2,178,868 $ 2,366,227 Three Months Ended September 30, Nine Months Ended September 30, 2018 2019 2018 2019 (in thousands) Net operating revenues $ 404,481 $ 421,900 $ 1,173,420 $ 1,231,672 Income from operations 43,499 52,922 123,776 144,350 Net income 16,084 17,788 45,576 53,521 Net income attributable to Select Medical Holdings Corporation 7,486 8,124 20,778 24,534 Nine Months Ended September 30, 2018 2019 (in thousands) Net cash provided by operating activities $ 119,147 $ 104,234 Net cash used in investing activities (545,856 ) (56,400 ) Net cash provided by (used in) financing activities 465,314 (185,717 ) Net increase (decrease) in cash and cash equivalents 38,605 (137,883 ) Cash and cash equivalents at beginning of period 113,059 163,116 Cash and cash equivalents at end of period $ 151,664 $ 25,233 |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingencies, at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Credit Risk Concentrations | Credit Risk Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash balances and trade receivables. The Company’s excess cash is held with large financial institutions. The Company grants unsecured credit to its patients, most of whom reside in the service area of the Company’s facilities and are insured under third-party payor agreements. The Company’s general policy is to verify insurance coverage prior to the date of admission for patients admitted to the Company’s critical illness recovery hospitals and rehabilitation hospitals. Within the Company’s outpatient rehabilitation clinics, the Company verifies insurance coverage prior to the patient’s visit. Within the Company’s Concentra centers, the Company verifies insurance coverage or receives authorization from the patient’s employer prior to the patient’s visit. Because of the geographic diversity of the Company’s facilities and non-governmental third-party payors, Medicare represents the Company’s only significant concentration of credit risk. Approximately 16% and 15% of the Company’s accounts receivable is from Medicare at December 31, 2018 , and September 30, 2019 |
Leases | Leases The Company evaluates whether a contract is or contains a lease at the inception of the contract. Upon lease commencement, the date on which a lessor makes the underlying asset available to the Company for use, the Company classifies the lease as either an operating or finance lease. Most of the Company’s facility and equipment leases are classified as operating leases. Balance Sheet For both operating and finance leases, the Company recognizes a right-of-use asset and lease liability at lease commencement. A right-of-use asset represents the Company’s right to use an underlying asset for the lease term while the lease liability represents an obligation to make lease payments arising from a lease which are measured on a discounted basis. The Company elected the short-term lease exemption for its equipment leases; accordingly, equipment leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Lease liabilities are measured at the present value of the remaining, fixed lease payments at lease commencement. The Company primarily uses its incremental borrowing rate, based on the information available at lease commencement, in determining the present value of its remaining lease payments. The Company’s leases may also specify extension or termination clauses. These options are factored into the measurement of the lease liability when it is reasonably certain that the Company will exercise the option. Right-of-use assets are measured at an amount equal to the initial lease liability, plus any prepaid lease payments (less any incentives received, such as reimbursement for leasehold improvements) and initial direct costs, at the lease commencement date. The Company has elected to account for lease and non-lease components, such as common area maintenance, as a single lease component for its facility leases. As a result, the fixed payments that would otherwise be allocated to the non-lease components will be accounted for as lease payments and are included in the measurement of the Company’s right-of-use asset and lease liability. Statement of Operations For the Company’s operating leases, rent expense, a component of cost of services and general and administrative expenses on the consolidated statements of operations, is recognized on a straight-line basis over the lease term. The straight-line rent expense is reflective of the interest expense on the lease liability using the effective interest method and the amortization of the right-of-use asset. The Company may enter into arrangements to sublease portions of its facilities and the Company typically retains the obligation to the lessor under these arrangements. The Company’s subleases are classified as operating leases; accordingly, the Company continues to account for the original leases as it did prior to commencement of the subleases. Sublease income, a component of cost of services on the consolidated statements of operations, is recognized on a straight-line basis, as a reduction to rent expense, over the term of the sublease. For the Company’s finance leases, interest expense on the lease liability is recognized using the effective interest method. Amortization expense related to the right-of-use asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. The Company elected the short-term lease exemption for its equipment leases. For these leases, the Company recognizes lease payments on a straight-line basis over the lease term and variable lease payments are expensed as incurred. These expenses are included as components of cost of services on the consolidated statements of operations. The Company makes payments related to changes in indexes or rates after the lease commencement date. Additionally, the Company makes payments, which are not fixed at lease commencement, for property taxes, insurance, and common area maintenance related to its facility leases. These variable lease payments, which are expensed as incurred, are included as a component of cost of services and general and administrative expenses on the consolidated statements of operations. |
Recent and Recently Adopted Accounting Pronouncements | Recent Accounting Pronouncements Financial Instruments In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments . The current standard delays the recognition of a credit loss on a financial asset until the loss is probable of occurring. The new standard removes the requirement that a credit loss be probable of occurring for it to be recognized and requires entities to use historical experience, current conditions, and reasonable and supportable forecasts to estimate their future expected credit losses. The financial instruments subject to ASU 2016-13 are the Company’s accounts receivable and notes receivable. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance must be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the earliest comparative period in the financial statements. Given the very high rate of collectability of the Company’s financial instruments, the impact of ASU 2016-13 will not be material to the Company’s consolidated financial statements. The Company’s implementation efforts are focused on finalizing the accounting processes and related controls associated with accounting for its financial instruments under the new standard. Recently Adopted Accounting Pronouncements Leases The Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases using a modified retrospective approach as of January 1, 2019, for leases which existed on that date. Prior comparative periods were not adjusted and continue to be reported in accordance with ASC Topic 840, Leases . The Company elected the package of practical expedients, which permitted the Company not to reassess under ASC Topic 842 the Company’s prior conclusions about lease identification, lease classification, and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to the Company. The adoption of the standard resulted in the recognition of operating lease right-of-use assets of $1,015.0 million and operating lease liabilities of $1,057.0 million at January 1, 2019. The difference between the operating lease right-of-use assets and operating lease liabilities resulted from the reclassification of prepaid rent, deferred rent, unamortized lease incentives, and acquired favorable and unfavorable leasehold interests upon adoption. The Company did not recognize a cumulative-effect adjustment to retained earnings upon adoption. |
Redeemable Non-Controlling Interests | Redeemable Non-Controlling Interests The ownership interests held by outside parties in subsidiaries, limited liability companies, and limited partnerships controlled by the Company are classified as non-controlling interests. Some of the Company’s non-controlling ownership interests consist of outside parties that have certain redemption rights that, if exercised, require the Company to purchase the parties’ ownership interests. These interests are classified and reported as redeemable non-controlling interests and have been adjusted to their approximate redemption values. |
Variable Interest Entities | Variable Interest Entities Concentra does not own many of its medical practices, as certain states prohibit the “corporate practice of medicine,” which restricts business corporations from practicing medicine through the direct employment of physicians or from exercising control over medical decisions by physicians. In these states, Concentra typically enters into long-term management agreements with professional corporations or associations that are owned by licensed physicians, which, in turn, employ or contract with physicians who provide professional medical services in its occupational health centers. The management agreements have terms that provide for Concentra to conduct, supervise, and manage the day-to-day non-medical operations of the occupational health centers and provide all management and administrative services. Concentra receives a management fee for these services, which is based, in part, on the performance of the professional corporation or association. Additionally, the outstanding voting equity interests of the professional corporations or associations are typically owned by licensed physicians appointed at Concentra’s discretion. Concentra has the ability to direct the transfer of ownership of the professional corporation or association to a new licensed physician at any time. |
Redeemable Non-Controlling In_2
Redeemable Non-Controlling Interests (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Schedule of redeemable non-controlling interests | The changes in redeemable non-controlling interests are as follows (in thousands): Nine Months Ended September 30, 2018 2019 Balance as of January 1 $ 640,818 $ 780,488 Net income attributable to redeemable non-controlling interests 5,743 7,700 Issuance and exchange of redeemable non-controlling interests 163,659 — Distributions to and purchases of redeemable non-controlling interests (203,972 ) (2,771 ) Redemption adjustment on redeemable non-controlling interests 1,051 47,470 Other 175 354 Balance as of March 31 $ 607,474 $ 833,241 Net income attributable to redeemable non-controlling interests 10,909 11,507 Distributions to and purchases of redeemable non-controlling interests (11,112 ) (395 ) Redemption adjustment on redeemable non-controlling interests 8,500 (270 ) Other 461 339 Balance as of June 30 $ 616,232 $ 844,422 Net income attributable to redeemable non-controlling interests 9,244 6,096 Distributions to and purchases of redeemable non-controlling interests (763 ) (1,721 ) Redemption adjustment on redeemable non-controlling interests 154,514 104,553 Other 347 347 Balance as of September 30 $ 779,574 $ 953,697 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of reconciliation of fair value of identifiable net assets and goodwill to the consideration given for the acquired business | The following table reconciles the fair values of identifiable net assets and goodwill to the consideration given for the acquired business (in thousands): Accounts receivable $ 68,934 Other current assets 10,810 Property and equipment 69,712 Identifiable intangible assets 140,406 Other assets 25,435 Goodwill 540,067 Total assets 855,364 Accounts payable and other current liabilities 49,925 Deferred income taxes and other long-term liabilities 51,851 Total liabilities 101,776 Consideration given $ 753,588 |
Schedule of pro forma unaudited results of operations | The following pro forma unaudited results of operations have been prepared assuming the acquisition of U.S. HealthWorks occurred on January 1, 2017. These results are not necessarily indicative of the results of future operations nor of the results that would have occurred had the acquisition been consummated on the aforementioned date. For the three and nine months ended September 30, 2019 , the Company’s results of operations include U.S. HealthWorks for the entire period and no pro forma adjustments were made. Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 (in thousands) Net operating revenues $ 1,267,401 $ 3,864,155 Net income attributable to Select Medical Holdings Corporation 34,441 116,135 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Lease Cost | As of September 30, 2019 , the weighted average remaining lease terms and discount rates were as follows: Weighted average remaining lease term (in years): Operating leases 8.1 Finance leases 34.9 Weighted average discount rate: Operating leases 5.9 % Finance leases 7.4 % For the three and nine months ended September 30, 2019 , the Company’s total lease cost was as follows (in thousands): Three Months Ended September 30, 2019 Unrelated Parties Related Parties Total Operating lease cost $ 68,046 $ 1,342 $ 69,388 Finance lease cost: Amortization of right-of-use assets 73 — 73 Interest on lease liabilities 259 — 259 Short-term lease cost 592 — 592 Variable lease cost 11,789 156 11,945 Sublease income (2,458 ) — (2,458 ) Total lease cost $ 78,301 $ 1,498 $ 79,799 Nine Months Ended September 30, 2019 Unrelated Parties Related Parties Total Operating lease cost $ 202,600 $ 4,026 $ 206,626 Finance lease cost: Amortization of right-of-use assets 199 — 199 Interest on lease liabilities 555 — 555 Short-term lease cost 1,776 — 1,776 Variable lease cost 32,380 397 32,777 Sublease income (7,388 ) — (7,388 ) Total lease cost $ 230,122 $ 4,423 $ 234,545 |
Supplemental Cash Flow Information | For the nine months ended September 30, 2019 , supplemental cash flow information related to leases was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 204,909 Operating cash flows for finance leases 526 Financing cash flows for finance leases 183 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (1) $ 1,202,165 Finance leases 9,102 _______________________________________________________________________________ (1) Includes the right-of-use assets obtained in exchange for lease liabilities of $1,057.0 million which were recognized upon adoption of ASC Topic 842 at January 1, 2019. |
Supplemental Balance Sheet Information | As of September 30, 2019 , supplemental balance sheet information related to leases was as follows (in thousands): Operating Leases Unrelated Parties Related Parties Total Operating lease right-of-use assets $ 968,181 $ 18,338 $ 986,519 Current operating lease liabilities $ 200,012 $ 4,924 $ 204,936 Non-current operating lease liabilities 819,808 16,397 836,205 Total operating lease liabilities $ 1,019,820 $ 21,321 $ 1,041,141 Finance Leases Unrelated Parties Related Parties Total Property and equipment, net $ 5,027 $ — $ 5,027 Current portion of long-term debt and notes payable $ 210 $ — $ 210 Long-term debt, net of current portion 13,137 — 13,137 Total finance lease liabilities $ 13,347 $ — $ 13,347 |
Maturities of Finance Lease Liabilities | As of September 30, 2019 , maturities of lease liabilities were approximately as follows (in thousands): Operating Leases Finance Leases Total 2019 (remainder of year) $ 67,567 $ 294 $ 67,861 2020 250,778 1,182 251,960 2021 213,486 1,193 214,679 2022 173,399 1,203 174,602 2023 131,550 1,214 132,764 Thereafter 556,103 31,630 587,733 Total undiscounted cash flows 1,392,883 36,716 1,429,599 Less: Imputed interest 351,742 23,369 375,111 Total discounted lease liabilities $ 1,041,141 $ 13,347 $ 1,054,488 |
Maturities of Operating Lease Liabilities | As of September 30, 2019 , maturities of lease liabilities were approximately as follows (in thousands): Operating Leases Finance Leases Total 2019 (remainder of year) $ 67,567 $ 294 $ 67,861 2020 250,778 1,182 251,960 2021 213,486 1,193 214,679 2022 173,399 1,203 174,602 2023 131,550 1,214 132,764 Thereafter 556,103 31,630 587,733 Total undiscounted cash flows 1,392,883 36,716 1,429,599 Less: Imputed interest 351,742 23,369 375,111 Total discounted lease liabilities $ 1,041,141 $ 13,347 $ 1,054,488 |
Maturities of Operating Lease Liabilities | As disclosed in the Company’s 2018 Annual Report on Form 10-K, the Company’s undiscounted future minimum lease obligations on long-term, non-cancelable operating leases with related and unrelated parties were approximately as follows as of December 31, 2018 (in thousands): Total 2019 $ 267,846 2020 231,711 2021 193,155 2022 150,155 2023 107,759 Thereafter 484,038 $ 1,434,664 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill | The following table shows changes in the carrying amounts of goodwill by reporting unit for the nine months ended September 30, 2019 : Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Total (in thousands) Balance as of December 31, 2018 $ 1,045,220 $ 416,646 $ 642,422 $ 1,216,438 $ 3,320,726 Acquired 30,028 14,254 7,996 18,299 70,577 Sold — — (5,629 ) — (5,629 ) Measurement period adjustment 421 — — (3,439 ) (3,018 ) Balance as of September 30, 2019 $ 1,075,669 $ 430,900 $ 644,789 $ 1,231,298 $ 3,382,656 |
Schedule of carrying value and amortization of identifiable intangible assets | The following table provides the gross carrying amounts, accumulated amortization, and net carrying amounts for the Company’s identifiable intangible assets: December 31, 2018 September 30, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in thousands) Indefinite-lived intangible assets: Trademarks $ 166,698 $ — $ 166,698 $ 166,698 $ — $ 166,698 Certificates of need 19,174 — 19,174 17,166 — 17,166 Accreditations 1,857 — 1,857 1,874 — 1,874 Finite-lived intangible assets: Trademarks 5,000 (4,583 ) 417 5,000 (5,000 ) — Customer relationships 280,710 (61,900 ) 218,810 287,880 (81,010 ) 206,870 Favorable leasehold interests (1) 13,553 (6,064 ) 7,489 — — — Non-compete agreements 29,400 (6,152 ) 23,248 31,255 (8,100 ) 23,155 Total identifiable intangible assets $ 516,392 $ (78,699 ) $ 437,693 $ 509,873 $ (94,110 ) $ 415,763 _______________________________________________________________________________ (1) Favorable leasehold interests are a component of the operating lease right-of-use assets upon adoption of ASC Topic 842, Leases . |
Long-Term Debt and Notes Paya_2
Long-Term Debt and Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Company's long-term debt and notes payable | As of December 31, 2018 , the Company’s long-term debt and notes payable were as follows (in thousands): Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value Select: 6.375% senior notes $ 710,000 $ 550 $ (4,642 ) $ 705,908 $ 706,450 Credit facilities: Revolving facility 20,000 — — 20,000 18,400 Term loan 1,129,875 (9,690 ) (9,321 ) 1,110,864 1,076,206 Other 56,415 — (484 ) 55,931 55,931 Total Select debt 1,916,290 (9,140 ) (14,447 ) 1,892,703 1,856,987 Concentra Inc.: Credit facilities: Term loans 1,414,175 (2,765 ) (18,648 ) 1,392,762 1,357,802 Other debt, including finance leases 7,916 — — 7,916 7,916 Total Concentra Inc. debt 1,422,091 (2,765 ) (18,648 ) 1,400,678 1,365,718 Total debt $ 3,338,381 $ (11,905 ) $ (33,095 ) $ 3,293,381 $ 3,222,705 As of September 30, 2019 , the Company’s long-term debt and notes payable were as follows (in thousands): Principal Outstanding Unamortized Discount Unamortized Issuance Costs Carrying Value Fair Value Select: 6.250% senior notes $ 550,000 $ — $ (10,582 ) $ 539,418 $ 576,125 Credit facilities: Term loan 1,531,068 (10,915 ) (11,302 ) 1,508,851 1,532,982 Other debt, including finance leases 70,816 — (420 ) 70,396 70,396 Total Select debt 2,151,884 (10,915 ) (22,304 ) 2,118,665 2,179,503 Concentra Inc.: Credit facilities: Term loan 1,240,298 (2,643 ) (10,008 ) 1,227,647 1,246,499 Other debt, including finance leases 5,850 — — 5,850 5,850 Total Concentra Inc. debt 1,246,148 (2,643 ) (10,008 ) 1,233,497 1,252,349 Total debt $ 3,398,032 $ (13,558 ) $ (32,312 ) $ 3,352,162 $ 3,431,852 |
Schedule of principal maturities of the Company's long-term debt and notes payable | Principal maturities of the Company’s long-term debt and notes payable were approximately as follows (in thousands): 2019 2020 2021 2022 2023 Thereafter Total Select: 6.250% senior notes $ — $ — $ — $ — $ — $ 550,000 $ 550,000 Credit facilities: Term loan 1,250 5,000 5,000 5,000 5,000 1,509,818 1,531,068 Other debt, including finance leases 3,541 5,502 1,814 18,036 38 41,885 70,816 Total Select debt 4,791 10,502 6,814 23,036 5,038 2,101,703 2,151,884 Concentra Inc.: Credit facilities: Term loan 250 1,000 1,000 1,238,048 — — 1,240,298 Other debt, including finance leases 136 1,194 330 358 363 3,469 5,850 Total Concentra Inc. debt 386 2,194 1,330 1,238,406 363 3,469 1,246,148 Total debt $ 5,177 $ 12,696 $ 8,144 $ 1,261,442 $ 5,401 $ 2,105,172 $ 3,398,032 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of selected financial data for the Company's reportable segments | The following tables summarize selected financial data for the Company’s reportable segments. Prior year results presented herein have been changed to conform to the current presentation. Three Months Ended September 30, Nine Months Ended September 30, 2018 2019 2018 2019 (in thousands) Net operating revenues: Critical illness recovery hospital $ 420,108 $ 462,892 $ 1,327,236 $ 1,381,569 Rehabilitation hospital 144,588 173,369 432,675 488,301 Outpatient rehabilitation 245,234 265,330 743,379 774,126 Concentra 404,481 421,900 1,173,420 1,231,672 Other 52,990 69,852 139,865 203,670 Total Company $ 1,267,401 $ 1,393,343 $ 3,816,575 $ 4,079,338 Adjusted EBITDA: Critical illness recovery hospital $ 53,292 $ 57,247 $ 186,989 $ 194,383 Rehabilitation hospital 25,343 36,780 80,314 92,545 Outpatient rehabilitation 34,531 40,040 107,003 111,615 Concentra 68,754 77,679 199,119 220,024 Other (25,292 ) (29,081 ) (75,337 ) (79,552 ) Total Company $ 156,628 $ 182,665 $ 498,088 $ 539,015 Total assets: Critical illness recovery hospital $ 1,785,336 $ 2,116,512 $ 1,785,336 $ 2,116,512 Rehabilitation hospital 888,342 1,121,260 888,342 1,121,260 Outpatient rehabilitation 991,105 1,280,712 991,105 1,280,712 Concentra 2,201,869 2,366,227 2,201,869 2,366,227 Other 113,529 270,045 113,529 270,045 Total Company $ 5,980,181 $ 7,154,756 $ 5,980,181 $ 7,154,756 Purchases of property and equipment: Critical illness recovery hospital $ 8,134 $ 12,254 $ 31,455 $ 36,902 Rehabilitation hospital 8,769 5,293 29,766 23,832 Outpatient rehabilitation 7,209 7,476 22,565 23,221 Concentra 12,539 8,240 29,281 36,178 Other 2,740 1,408 7,972 3,823 Total Company $ 39,391 $ 34,671 $ 121,039 $ 123,956 |
Schedule of reconciliation of Adjusted EBITDA to income before income taxes | A reconciliation of Adjusted EBITDA to income before income taxes is as follows: Three Months Ended September 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 53,292 $ 25,343 $ 34,531 $ 68,754 $ (25,292 ) Depreciation and amortization (11,136 ) (6,079 ) (6,597 ) (24,488 ) (2,227 ) Stock compensation expense — — — (767 ) (5,497 ) Income (loss) from operations $ 42,156 $ 19,264 $ 27,934 $ 43,499 $ (33,016 ) $ 99,837 Equity in earnings of unconsolidated subsidiaries 5,432 Gain on sale of businesses 2,139 Interest expense (50,669 ) Income before income taxes $ 56,739 Three Months Ended September 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 57,247 $ 36,780 $ 40,040 $ 77,679 $ (29,081 ) Depreciation and amortization (12,484 ) (7,234 ) (6,887 ) (23,989 ) (2,347 ) Stock compensation expense — — — (768 ) (6,050 ) Income (loss) from operations $ 44,763 $ 29,546 $ 33,153 $ 52,922 $ (37,478 ) $ 122,906 Loss on early retirement of debt (18,643 ) Equity in earnings of unconsolidated subsidiaries 6,950 Interest expense (54,336 ) Income before income taxes $ 56,877 Nine Months Ended September 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 186,989 $ 80,314 $ 107,003 $ 199,119 $ (75,337 ) Depreciation and amortization (34,146 ) (17,816 ) (19,938 ) (70,332 ) (6,790 ) Stock compensation expense — — — (2,116 ) (15,059 ) U.S. HealthWorks acquisition costs — — — (2,895 ) — Income (loss) from operations $ 152,843 $ 62,498 $ 87,065 $ 123,776 $ (97,186 ) $ 328,996 Loss on early retirement of debt (10,255 ) Equity in earnings of unconsolidated subsidiaries 14,914 Gain on sale of businesses 9,016 Interest expense (147,991 ) Income before income taxes $ 194,680 Nine Months Ended September 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 194,383 $ 92,545 $ 111,615 $ 220,024 $ (79,552 ) Depreciation and amortization (38,430 ) (20,332 ) (20,910 ) (73,372 ) (7,028 ) Stock compensation expense — — — (2,302 ) (17,129 ) Income (loss) from operations $ 155,953 $ 72,213 $ 90,705 $ 144,350 $ (103,709 ) $ 359,512 Loss on early retirement of debt (18,643 ) Equity in earnings of unconsolidated subsidiaries 18,710 Gain on sale of businesses 6,532 Interest expense (156,611 ) Income before income taxes $ 209,500 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of net operating revenues by operating segment | The following tables disaggregate the Company’s net operating revenues for the three and nine months ended September 30, 2018 and 2019 : Three Months Ended September 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 210,101 $ 71,564 $ 40,563 $ 455 $ — $ 322,683 Non-Medicare 206,629 64,322 185,787 401,537 — 858,275 Total patient services revenues 416,730 135,886 226,350 401,992 — 1,180,958 Other revenues (1) 3,378 8,702 18,884 2,489 52,990 86,443 Total net operating revenues $ 420,108 $ 144,588 $ 245,234 $ 404,481 $ 52,990 $ 1,267,401 Three Months Ended September 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 218,096 $ 86,495 $ 44,230 $ 451 $ — $ 349,272 Non-Medicare 240,603 76,957 200,093 418,380 — 936,033 Total patient services revenues 458,699 163,452 244,323 418,831 — 1,285,305 Other revenues 4,193 9,917 21,007 3,069 69,852 108,038 Total net operating revenues $ 462,892 $ 173,369 $ 265,330 $ 421,900 $ 69,852 $ 1,393,343 Nine Months Ended September 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 676,950 $ 217,459 $ 120,228 $ 1,600 $ — $ 1,016,237 Non-Medicare 639,718 188,611 569,298 1,164,711 — 2,562,338 Total patient services revenues 1,316,668 406,070 689,526 1,166,311 — 3,578,575 Other revenues (1) 10,568 26,605 53,853 7,109 139,865 238,000 Total net operating revenues $ 1,327,236 $ 432,675 $ 743,379 $ 1,173,420 $ 139,865 $ 3,816,575 Nine Months Ended September 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 679,953 $ 238,334 $ 128,377 $ 1,480 $ — $ 1,048,144 Non-Medicare 692,178 221,571 586,248 1,221,893 — 2,721,890 Total patient services revenues 1,372,131 459,905 714,625 1,223,373 — 3,770,034 Other revenues 9,438 28,396 59,501 8,299 203,670 309,304 Total net operating revenues $ 1,381,569 $ 488,301 $ 774,126 $ 1,231,672 $ 203,670 $ 4,079,338 _______________________________________________________________________________ (1) For the three and nine months ended September 30, 2018 , the financial results of the Company’s reportable segments have been changed to remove the net operating revenues associated with employee leasing services provided to the Company’s non-consolidating subsidiaries. These results are now reported as part of the Company’s other activities. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per share | The following table sets forth the net income attributable to the Company, its common shares outstanding, and its participating securities outstanding. Basic EPS Diluted EPS Three Months Ended September 30, Three Months Ended September 30, 2018 2019 2018 2019 (in thousands) Net income $ 42,679 $ 44,030 $ 42,679 $ 44,030 Less: net income attributable to non-controlling interests 9,762 13,298 9,762 13,298 Net income attributable to the Company 32,917 30,732 32,917 30,732 Less: net income attributable to participating securities 1,098 1,052 1,098 1,052 Net income attributable to common shares $ 31,819 $ 29,680 $ 31,819 $ 29,680 Basic EPS Diluted EPS Nine Months Ended September 30, Nine Months Ended September 30, 2018 2019 2018 2019 (in thousands) Net income $ 147,220 $ 157,360 $ 147,220 $ 157,360 Less: net income attributable to non-controlling interests 34,053 40,978 34,053 40,978 Net income attributable to the Company 113,167 116,382 113,167 116,382 Less: net income attributable to participating securities 3,732 3,889 3,729 3,888 Net income attributable to common shares $ 109,435 $ 112,493 $ 109,438 $ 112,494 The following tables set forth the computation of EPS under the two-class method: Three Months Ended September 30, 2018 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 31,819 130,387 $ 0.24 $ 31,819 130,447 $ 0.24 Participating securities 1,098 4,501 $ 0.24 1,098 4,501 $ 0.24 Total Company $ 32,917 $ 32,917 Three Months Ended September 30, 2019 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 29,680 129,988 $ 0.23 $ 29,680 130,007 $ 0.23 Participating securities 1,052 4,607 $ 0.23 1,052 4,607 $ 0.23 Total Company $ 30,732 $ 30,732 Nine Months Ended September 30, 2018 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 109,435 129,972 $ 0.84 $ 109,438 130,066 $ 0.84 Participating securities 3,732 4,432 $ 0.84 3,729 4,432 $ 0.84 Total Company $ 113,167 $ 113,167 Nine Months Ended September 30, 2019 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 112,493 130,442 $ 0.86 $ 112,494 130,474 $ 0.86 Participating securities 3,889 4,509 $ 0.86 3,888 4,509 $ 0.86 Total Company $ 116,382 $ 116,382 _______________________________________________________________________________ (1) Represents the weighted average share count outstanding during the period. |
Supplemental Financial Inform_2
Supplemental Financial Information of Concentra Group Holdings Parent (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Financial Information [Abstract] | |
Schedule of Condensed Balance Sheet | The following tables summarize selected financial information of Concentra Group Holdings Parent. December 31, 2018 September 30, 2019 (in thousands) Assets Current assets $ 385,094 $ 287,514 Non-current assets 1,793,774 2,078,713 Total Assets $ 2,178,868 $ 2,366,227 Liabilities and Equity Current liabilities $ 206,386 $ 232,035 Non-current liabilities 1,478,084 1,587,721 Total Liabilities 1,684,470 1,819,756 Redeemable non-controlling interests 18,525 17,268 Members' Equity of Concentra Group Holdings Parent 470,329 523,814 Non-controlling interests 5,544 5,389 Total Equity 475,873 529,203 Total Liabilities and Equity $ 2,178,868 $ 2,366,227 |
Schedule of Condensed Income Statement | Three Months Ended September 30, Nine Months Ended September 30, 2018 2019 2018 2019 (in thousands) Net operating revenues $ 404,481 $ 421,900 $ 1,173,420 $ 1,231,672 Income from operations 43,499 52,922 123,776 144,350 Net income 16,084 17,788 45,576 53,521 Net income attributable to Select Medical Holdings Corporation 7,486 8,124 20,778 24,534 |
Schedule of Condensed Cash Flow Statement | Nine Months Ended September 30, 2018 2019 (in thousands) Net cash provided by operating activities $ 119,147 $ 104,234 Net cash used in investing activities (545,856 ) (56,400 ) Net cash provided by (used in) financing activities 465,314 (185,717 ) Net increase (decrease) in cash and cash equivalents 38,605 (137,883 ) Cash and cash equivalents at beginning of period 113,059 163,116 Cash and cash equivalents at end of period $ 151,664 $ 25,233 |
Accounting Policies (Details)
Accounting Policies (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 986,519 | ||
Operating lease liability | $ 1,041,141 | ||
Third-Party Payor Risk | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Percentage of concentration risk | 15.00% | 16.00% | |
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 1,015,000 | ||
Operating lease liability | $ 1,057,000 |
Redeemable Non-Controlling In_3
Redeemable Non-Controlling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Balance, beginning | $ 844,422 | $ 833,241 | $ 780,488 | $ 616,232 | $ 607,474 | $ 640,818 |
Net income attributable to redeemable non-controlling interests | 6,096 | 11,507 | 7,700 | 9,244 | 10,909 | 5,743 |
Issuance and exchange of redeemable non-controlling interests | 0 | 163,659 | ||||
Distributions to and purchases of redeemable non-controlling interests | (1,721) | (395) | (2,771) | (763) | (11,112) | (203,972) |
Redemption adjustment on redeemable non-controlling interests | 104,553 | (270) | 47,470 | 154,514 | 8,500 | 1,051 |
Other | 347 | 339 | 354 | 347 | 461 | 175 |
Balance, ending | $ 953,697 | $ 844,422 | $ 833,241 | $ 779,574 | $ 616,232 | $ 607,474 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | Feb. 01, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2019 |
Business Acquisition [Line Items] | |||||
Non-cash equity exchange for acquisition of U.S. HealthWorks | $ 238,000 | $ 238,000 | $ 238,000 | $ 0 | |
U.S. HealthWorks | |||||
Business Acquisition [Line Items] | |||||
Total consideration (net of cash acquired) | $ 753,600 | ||||
Net revenues of acquiree | $ 133,300 | $ 362,700 | |||
Acquisition costs | $ (2,900) | ||||
Concentra Group Holdings Parent, LLC | U.S. HealthWorks | |||||
Business Acquisition [Line Items] | |||||
Equity interest issued (percent) | 20.00% | ||||
Non-cash equity exchange for acquisition of U.S. HealthWorks | $ 238,000 |
Acquisitions - Fair Value of Id
Acquisitions - Fair Value of Identifiable Net Assets and Goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Feb. 01, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 3,382,656 | $ 3,320,726 | |
U.S. HealthWorks | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 68,934 | ||
Other current assets | 10,810 | ||
Property and equipment | 69,712 | ||
Identifiable intangible assets | 140,406 | ||
Other assets | 25,435 | ||
Goodwill | 540,067 | ||
Total assets | 855,364 | ||
Accounts payable and other current liabilities | 49,925 | ||
Deferred income taxes and other long-term liabilities | 51,851 | ||
Total liabilities | 101,776 | ||
Consideration given | $ 753,588 |
Acquisitions - Pro Forma Result
Acquisitions - Pro Forma Results (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Business Acquisition [Line Items] | ||
Net operating revenues | $ 1,267,401 | $ 3,864,155 |
Net income attributable to Select Medical Holdings Corporation | $ 34,441 | $ 116,135 |
Sale of Businesses (Details)
Sale of Businesses (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)clinic | Sep. 30, 2018USD ($)clinic | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on sale of businesses | $ | $ 0 | $ 2,139 | $ 6,532 | $ 9,016 |
Outpatient Rehabilitation | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of outpatient rehabilitation clinics sold | clinic | 22 | 41 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Variable interest entity, assets | $ 202.3 | $ 166.2 |
Variable interest entity, liabilities | $ 200.9 | $ 164.4 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 9 Months Ended |
Sep. 30, 2019renewal_option | |
Critical Illness Recovery Hospital | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Number of renewal options | 2 |
Lease renewal option term | 5 years |
Rehabilitation Hospital | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Number of renewal options | 2 |
Lease renewal option term | 5 years |
Outpatient Rehabilitation | |
Lessee, Lease, Description [Line Items] | |
Lease term | 5 years |
Number of renewal options | 2 |
Outpatient Rehabilitation | Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease renewal option term | 3 years |
Outpatient Rehabilitation | Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease renewal option term | 5 years |
Concentra | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Number of renewal options | 2 |
Lease renewal option term | 5 years |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 69,388 | $ 206,626 |
Finance lease cost: | ||
Amortization of right-of-use assets | 73 | 199 |
Interest on lease liabilities | 259 | 555 |
Short-term lease cost | 592 | 1,776 |
Variable lease cost | 11,945 | 32,777 |
Sublease income | (2,458) | (7,388) |
Total lease cost | 79,799 | 234,545 |
Unrelated Parties | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 68,046 | 202,600 |
Finance lease cost: | ||
Amortization of right-of-use assets | 73 | 199 |
Interest on lease liabilities | 259 | 555 |
Short-term lease cost | 592 | 1,776 |
Variable lease cost | 11,789 | 32,380 |
Sublease income | (2,458) | (7,388) |
Total lease cost | 78,301 | 230,122 |
Related Parties | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 1,342 | 4,026 |
Finance lease cost: | ||
Amortization of right-of-use assets | 0 | 0 |
Interest on lease liabilities | 0 | 0 |
Short-term lease cost | 0 | 0 |
Variable lease cost | 156 | 397 |
Sublease income | 0 | 0 |
Total lease cost | $ 1,498 | $ 4,423 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Sep. 30, 2019 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows for operating leases | $ 204,909 | |
Operating cash flows for finance leases | 526 | |
Financing cash flows for finance leases | 183 | |
Right-of-use assets obtained in exchange for lease liabilities: | ||
Operating leases | 1,202,165 | |
Finance leases | $ 9,102 | |
Accounting Standards Update 2016-02 | ||
Right-of-use assets obtained in exchange for lease liabilities: | ||
Operating leases | $ 1,057,000 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating Leases | |
Operating lease right-of-use assets | $ 986,519 |
Current operating lease liabilities | 204,936 |
Non-current operating lease liabilities | 836,205 |
Total operating lease liabilities | 1,041,141 |
Finance Leases | |
Property and equipment, net | 5,027 |
Current portion of long-term debt and notes payable | 210 |
Long-term debt, net of current portion | 13,137 |
Total finance lease liabilities | 13,347 |
Unrelated Parties | |
Operating Leases | |
Operating lease right-of-use assets | 968,181 |
Current operating lease liabilities | 200,012 |
Non-current operating lease liabilities | 819,808 |
Total operating lease liabilities | 1,019,820 |
Finance Leases | |
Property and equipment, net | 5,027 |
Current portion of long-term debt and notes payable | 210 |
Long-term debt, net of current portion | 13,137 |
Total finance lease liabilities | 13,347 |
Related Parties | |
Operating Leases | |
Operating lease right-of-use assets | 18,338 |
Current operating lease liabilities | 4,924 |
Non-current operating lease liabilities | 16,397 |
Total operating lease liabilities | 21,321 |
Finance Leases | |
Property and equipment, net | 0 |
Current portion of long-term debt and notes payable | 0 |
Long-term debt, net of current portion | 0 |
Total finance lease liabilities | $ 0 |
Leases - Weighted Average Lease
Leases - Weighted Average Lease Terms and Discount Rates (Details) | Sep. 30, 2019 |
Weighted average remaining lease term (in years): | |
Operating leases | 8 years 1 month 6 days |
Finance leases | 34 years 10 months 24 days |
Weighted average discount rate: | |
Operating leases | 5.90% |
Finance leases | 7.40% |
Leases - Maturities of Operatin
Leases - Maturities of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Operating Leases | ||
2019 (remainder of year) | $ 67,567 | |
2020 | 250,778 | |
2021 | 213,486 | |
2022 | 173,399 | |
2023 | 131,550 | |
Thereafter | 556,103 | |
Total undiscounted cash flows | 1,392,883 | |
Less: Imputed interest | 351,742 | |
Total operating lease liabilities | 1,041,141 | |
Finance Leases | ||
2019 (remainder of year) | 294 | |
2020 | 1,182 | |
2021 | 1,193 | |
2022 | 1,203 | |
2023 | 1,214 | |
Thereafter | 31,630 | |
Total undiscounted cash flows | 36,716 | |
Less: Imputed interest | 23,369 | |
Total finance lease liabilities | 13,347 | |
Total | ||
2019 (remainder of year) | 67,861 | |
2020 | 251,960 | |
2021 | 214,679 | |
2022 | 174,602 | |
2023 | 132,764 | |
Thereafter | 587,733 | |
Total undiscounted cash flows | 1,429,599 | |
Less: Imputed interest | 375,111 | |
Total operating lease liabilities | $ 1,054,488 | |
Operating Leases | ||
2019 | $ 267,846 | |
2020 | 231,711 | |
2021 | 193,155 | |
2022 | 150,155 | |
2023 | 107,759 | |
Thereafter | 484,038 | |
Total | $ 1,434,664 |
Intangible Assets - Carrying Am
Intangible Assets - Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Goodwill | |
December 31, 2018 | $ 3,320,726 |
Acquired | 70,577 |
Sold | (5,629) |
Measurement period adjustment | (3,018) |
September 30, 2019 | 3,382,656 |
Critical Illness Recovery Hospital | |
Goodwill | |
December 31, 2018 | 1,045,220 |
Acquired | 30,028 |
Sold | 0 |
Measurement period adjustment | 421 |
September 30, 2019 | 1,075,669 |
Rehabilitation Hospital | |
Goodwill | |
December 31, 2018 | 416,646 |
Acquired | 14,254 |
Sold | 0 |
Measurement period adjustment | 0 |
September 30, 2019 | 430,900 |
Outpatient Rehabilitation | |
Goodwill | |
December 31, 2018 | 642,422 |
Acquired | 7,996 |
Sold | (5,629) |
Measurement period adjustment | 0 |
September 30, 2019 | 644,789 |
Concentra | |
Goodwill | |
December 31, 2018 | 1,216,438 |
Acquired | 18,299 |
Sold | 0 |
Measurement period adjustment | (3,439) |
September 30, 2019 | $ 1,231,298 |
Intangible Assets - Carrying Va
Intangible Assets - Carrying Value and Amortization of Identifiable Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Total identifiable intangible assets, gross carrying amount | $ 509,873 | $ 509,873 | $ 516,392 | ||
Finite-lived intangible assets, accumulated amortization | (94,110) | (94,110) | (78,699) | ||
Total identifiable intangible assets, net carrying amount | 415,763 | 415,763 | 437,693 | ||
Amortized intangible assets: | |||||
Amortization expense | 6,900 | $ 7,900 | 22,900 | $ 22,100 | |
Trademarks | |||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Finite-lived intangible assets, gross carrying amount | 5,000 | 5,000 | 5,000 | ||
Finite-lived intangible assets, accumulated amortization | (5,000) | (5,000) | (4,583) | ||
Finite-lived intangible assets, net carrying amount | 0 | 0 | 417 | ||
Customer relationships | |||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Finite-lived intangible assets, gross carrying amount | 287,880 | 287,880 | 280,710 | ||
Finite-lived intangible assets, accumulated amortization | (81,010) | (81,010) | (61,900) | ||
Finite-lived intangible assets, net carrying amount | 206,870 | 206,870 | 218,810 | ||
Favorable leasehold interests | |||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Finite-lived intangible assets, gross carrying amount | 0 | 0 | 13,553 | ||
Finite-lived intangible assets, accumulated amortization | 0 | 0 | (6,064) | ||
Finite-lived intangible assets, net carrying amount | 0 | 0 | 7,489 | ||
Non-compete agreements | |||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Finite-lived intangible assets, gross carrying amount | 31,255 | 31,255 | 29,400 | ||
Finite-lived intangible assets, accumulated amortization | (8,100) | (8,100) | (6,152) | ||
Finite-lived intangible assets, net carrying amount | 23,155 | 23,155 | 23,248 | ||
Trademarks | |||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Indefinite-lived intangible assets, carrying amount | 166,698 | $ 166,698 | 166,698 | ||
Amortized intangible assets: | |||||
Weighted average time until next renewal | 7 years 4 months 24 days | ||||
Certificates of need | |||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Indefinite-lived intangible assets, carrying amount | 17,166 | $ 17,166 | 19,174 | ||
Accreditations | |||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Indefinite-lived intangible assets, carrying amount | $ 1,874 | $ 1,874 | $ 1,857 | ||
Amortized intangible assets: | |||||
Weighted average time until next renewal | 1 year 6 months |
Long-Term Debt and Notes Paya_3
Long-Term Debt and Notes Payable - Components of Long-Term Debt And Notes Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Aug. 30, 2019 | Aug. 01, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||
Principal Outstanding | $ 3,398,032 | $ 3,338,381 | ||
Unamortized Premium (Discount) | (13,558) | (11,905) | ||
Unamortized Issuance Costs | (32,312) | (33,095) | ||
Carrying Value | 3,352,162 | 3,293,381 | ||
Fair Value | $ 3,431,852 | 3,222,705 | ||
Senior Notes | 6.25% Senior Notes Due August 15, 2026 | ||||
Debt Instrument [Line Items] | ||||
Interest rate of debt (as a percent) | 6.25% | |||
Senior Notes | 6.375% Senior Notes Due June 2021 | ||||
Debt Instrument [Line Items] | ||||
Interest rate of debt (as a percent) | 6.375% | |||
Select Medical Corporation | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | $ 2,151,884 | 1,916,290 | ||
Unamortized Premium (Discount) | (10,915) | (9,140) | ||
Unamortized Issuance Costs | (22,304) | (14,447) | ||
Carrying Value | 2,118,665 | 1,892,703 | ||
Fair Value | $ 2,179,503 | 1,856,987 | ||
Select Medical Corporation | Senior Notes | 6.25% Senior Notes Due August 15, 2026 | ||||
Debt Instrument [Line Items] | ||||
Interest rate of debt (as a percent) | 6.25% | 6.25% | ||
Principal Outstanding | $ 550,000 | |||
Unamortized Premium (Discount) | 0 | |||
Unamortized Issuance Costs | (10,582) | |||
Carrying Value | 539,418 | |||
Fair Value | 576,125 | |||
Select Medical Corporation | Senior Notes | 6.375% Senior Notes Due June 2021 | ||||
Debt Instrument [Line Items] | ||||
Interest rate of debt (as a percent) | 6.375% | |||
Principal Outstanding | $ 710,000 | 710,000 | ||
Unamortized Premium (Discount) | 550 | |||
Unamortized Issuance Costs | (4,642) | |||
Carrying Value | 705,908 | |||
Fair Value | 706,450 | |||
Select Medical Corporation | Other debt, including finance leases | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 70,816 | 56,415 | ||
Unamortized Premium (Discount) | 0 | 0 | ||
Unamortized Issuance Costs | (420) | (484) | ||
Carrying Value | 70,396 | 55,931 | ||
Fair Value | 70,396 | 55,931 | ||
Select Medical Corporation | Revolving facility | Credit facilities | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 20,000 | |||
Unamortized Premium (Discount) | 0 | |||
Unamortized Issuance Costs | 0 | |||
Carrying Value | 20,000 | |||
Fair Value | 18,400 | |||
Select Medical Corporation | Term loans | Credit facilities | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 1,531,068 | 1,129,875 | ||
Unamortized Premium (Discount) | (10,915) | (9,690) | ||
Unamortized Issuance Costs | (11,302) | (9,321) | ||
Carrying Value | 1,508,851 | 1,110,864 | ||
Fair Value | 1,532,982 | 1,076,206 | ||
Concentra Inc | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 1,246,148 | 1,422,091 | ||
Unamortized Premium (Discount) | (2,643) | (2,765) | ||
Unamortized Issuance Costs | (10,008) | (18,648) | ||
Carrying Value | 1,233,497 | 1,400,678 | ||
Fair Value | 1,252,349 | 1,365,718 | ||
Concentra Inc | Other debt, including finance leases | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 5,850 | 7,916 | ||
Unamortized Premium (Discount) | 0 | 0 | ||
Unamortized Issuance Costs | 0 | 0 | ||
Carrying Value | 5,850 | 7,916 | ||
Fair Value | 5,850 | 7,916 | ||
Concentra Inc | Term loans | Credit facilities | ||||
Debt Instrument [Line Items] | ||||
Principal Outstanding | 1,240,298 | 1,414,175 | ||
Unamortized Premium (Discount) | (2,643) | (2,765) | ||
Unamortized Issuance Costs | (10,008) | (18,648) | ||
Carrying Value | 1,227,647 | 1,392,762 | ||
Fair Value | $ 1,246,499 | $ 1,357,802 |
Long-Term Debt and Notes Paya_4
Long-Term Debt and Notes Payable - Principal Maturities Of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Aug. 01, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||
2019 | $ 5,177 | ||
2020 | 12,696 | ||
2021 | 8,144 | ||
2022 | 1,261,442 | ||
2023 | 5,401 | ||
Thereafter | 2,105,172 | ||
Total | $ 3,398,032 | $ 3,338,381 | |
Senior Notes | 6.25% Senior Notes Due August 15, 2026 | |||
Debt Instrument [Line Items] | |||
Interest rate of debt (as a percent) | 6.25% | ||
Select Medical Corporation | |||
Debt Instrument [Line Items] | |||
2019 | $ 4,791 | ||
2020 | 10,502 | ||
2021 | 6,814 | ||
2022 | 23,036 | ||
2023 | 5,038 | ||
Thereafter | 2,101,703 | ||
Total | $ 2,151,884 | 1,916,290 | |
Select Medical Corporation | Senior Notes | 6.25% Senior Notes Due August 15, 2026 | |||
Debt Instrument [Line Items] | |||
Interest rate of debt (as a percent) | 6.25% | 6.25% | |
2019 | $ 0 | ||
2020 | 0 | ||
2021 | 0 | ||
2022 | 0 | ||
2023 | 0 | ||
Thereafter | 550,000 | ||
Total | 550,000 | ||
Select Medical Corporation | Credit facilities | Term loans | |||
Debt Instrument [Line Items] | |||
2019 | 1,250 | ||
2020 | 5,000 | ||
2021 | 5,000 | ||
2022 | 5,000 | ||
2023 | 5,000 | ||
Thereafter | 1,509,818 | ||
Total | 1,531,068 | 1,129,875 | |
Select Medical Corporation | Other debt, including finance leases | |||
Debt Instrument [Line Items] | |||
2019 | 3,541 | ||
2020 | 5,502 | ||
2021 | 1,814 | ||
2022 | 18,036 | ||
2023 | 38 | ||
Thereafter | 41,885 | ||
Total | 70,816 | 56,415 | |
Concentra Inc | |||
Debt Instrument [Line Items] | |||
2019 | 386 | ||
2020 | 2,194 | ||
2021 | 1,330 | ||
2022 | 1,238,406 | ||
2023 | 363 | ||
Thereafter | 3,469 | ||
Total | 1,246,148 | 1,422,091 | |
Concentra Inc | Credit facilities | Term loans | |||
Debt Instrument [Line Items] | |||
2019 | 250 | ||
2020 | 1,000 | ||
2021 | 1,000 | ||
2022 | 1,238,048 | ||
2023 | 0 | ||
Thereafter | 0 | ||
Total | 1,240,298 | 1,414,175 | |
Concentra Inc | Other debt, including finance leases | |||
Debt Instrument [Line Items] | |||
2019 | 136 | ||
2020 | 1,194 | ||
2021 | 330 | ||
2022 | 358 | ||
2023 | 363 | ||
Thereafter | 3,469 | ||
Total | $ 5,850 | $ 7,916 |
Long-Term Debt and Notes Paya_5
Long-Term Debt and Notes Payable - Concentra Credit Facilities (Details) - Concentra Inc - Credit facilities - USD ($) | Sep. 20, 2019 | Apr. 08, 2019 |
First Lien Credit Agreement Maturing June 1, 2020 | ||
Debt Instrument [Line Items] | ||
Aggregate commitments available | $ 75,000,000 | |
First Lien Credit Agreement Maturing June 1, 2021 | ||
Debt Instrument [Line Items] | ||
Aggregate commitments available | $ 100,000,000 | |
First Lien Credit Agreement Maturing June 1, 2022 | ||
Debt Instrument [Line Items] | ||
Line of credit facility, additional term loan | $ 100,000,000 |
Long-Term Debt and Notes Paya_6
Long-Term Debt and Notes Payable - Select Credit Facilities (Details) | Aug. 01, 2019USD ($) |
Select Medical Corporation | Term loans | Credit facilities | 2017 Select Credit Facilities | |
Debt Instrument [Line Items] | |
Line of credit facility, additional term loan | $ 500,000,000 |
Long-Term Debt and Notes Paya_7
Long-Term Debt and Notes Payable - Select Senior Notes (Details) - USD ($) | Aug. 30, 2019 | Aug. 01, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||
Outstanding borrowings | $ 3,398,032,000 | $ 3,338,381,000 | ||
Senior Notes | 6.25% Senior Notes Due August 15, 2026 | ||||
Debt Instrument [Line Items] | ||||
Interest rate of debt (as a percent) | 6.25% | |||
Senior Notes | 6.375% Senior Notes Due June 2021 | ||||
Debt Instrument [Line Items] | ||||
Interest rate of debt (as a percent) | 6.375% | |||
Select Medical Corporation | ||||
Debt Instrument [Line Items] | ||||
Outstanding borrowings | $ 2,151,884,000 | 1,916,290,000 | ||
Select Medical Corporation | Senior Notes | 6.25% Senior Notes Due August 15, 2026 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 550,000,000 | |||
Outstanding borrowings | $ 550,000,000 | |||
Interest rate of debt (as a percent) | 6.25% | 6.25% | ||
Redemption price | 106.25% | |||
Percent of principal amount which can be redeemed with certain equity offerings | 40.00% | |||
Redemption price for change of control event | 101.00% | |||
Select Medical Corporation | Senior Notes | 6.375% Senior Notes Due June 2021 | ||||
Debt Instrument [Line Items] | ||||
Outstanding borrowings | $ 710,000,000 | $ 710,000,000 | ||
Interest rate of debt (as a percent) | 6.375% | |||
Redemption price | 100.00% |
Long-Term Debt and Notes Paya_8
Long-Term Debt and Notes Payable - Loss on Early Retirement of Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Debt Disclosure [Abstract] | ||||
Loss on early retirement of debt | $ 18,643 | $ 0 | $ 18,643 | $ 10,255 |
Long-Term Debt and Notes Paya_9
Long-Term Debt and Notes Payable - Excess Cash Flow Payment (Details) - Credit facilities - Term loans $ in Millions | 1 Months Ended |
Feb. 28, 2019USD ($) | |
Select Medical Corporation | 2017 Select Credit Facilities | |
Line of Credit Facility [Line Items] | |
Principal prepayment | $ 98.8 |
Concentra Inc | |
Line of Credit Facility [Line Items] | |
Principal prepayment | $ 33.9 |
Long-Term Debt and Notes Pay_10
Long-Term Debt and Notes Payable - Fair Value (Details) - Senior Notes - 6.25% Senior Notes Due August 15, 2026 | Sep. 30, 2019 | Aug. 01, 2019 |
Debt Instrument [Line Items] | ||
Interest rate of debt (as a percent) | 6.25% | |
Select Medical Corporation | ||
Debt Instrument [Line Items] | ||
Interest rate of debt (as a percent) | 6.25% | 6.25% |
Segment Information - Selected
Segment Information - Selected Financial Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Segment information | |||||
Net operating revenues | $ 1,393,343 | $ 1,267,401 | $ 4,079,338 | $ 3,816,575 | |
Adjusted EBITDA | 182,665 | 156,628 | 539,015 | 498,088 | |
Total assets | 7,154,756 | 5,980,181 | 7,154,756 | 5,980,181 | $ 5,964,265 |
Purchases of property and equipment, net | 34,671 | 39,391 | 123,956 | 121,039 | |
Operating Segments | Critical Illness Recovery Hospital | |||||
Segment information | |||||
Net operating revenues | 462,892 | 420,108 | 1,381,569 | 1,327,236 | |
Adjusted EBITDA | 57,247 | 53,292 | 194,383 | 186,989 | |
Total assets | 2,116,512 | 1,785,336 | 2,116,512 | 1,785,336 | |
Purchases of property and equipment, net | 12,254 | 8,134 | 36,902 | 31,455 | |
Operating Segments | Rehabilitation Hospital | |||||
Segment information | |||||
Net operating revenues | 173,369 | 144,588 | 488,301 | 432,675 | |
Adjusted EBITDA | 36,780 | 25,343 | 92,545 | 80,314 | |
Total assets | 1,121,260 | 888,342 | 1,121,260 | 888,342 | |
Purchases of property and equipment, net | 5,293 | 8,769 | 23,832 | 29,766 | |
Operating Segments | Outpatient Rehabilitation | |||||
Segment information | |||||
Net operating revenues | 265,330 | 245,234 | 774,126 | 743,379 | |
Adjusted EBITDA | 40,040 | 34,531 | 111,615 | 107,003 | |
Total assets | 1,280,712 | 991,105 | 1,280,712 | 991,105 | |
Purchases of property and equipment, net | 7,476 | 7,209 | 23,221 | 22,565 | |
Operating Segments | Concentra | |||||
Segment information | |||||
Net operating revenues | 421,900 | 404,481 | 1,231,672 | 1,173,420 | |
Adjusted EBITDA | 77,679 | 68,754 | 220,024 | 199,119 | |
Total assets | 2,366,227 | 2,201,869 | 2,366,227 | 2,201,869 | |
Purchases of property and equipment, net | 8,240 | 12,539 | 36,178 | 29,281 | |
Other | |||||
Segment information | |||||
Net operating revenues | 69,852 | 52,990 | 203,670 | 139,865 | |
Adjusted EBITDA | (29,081) | (25,292) | (79,552) | (75,337) | |
Total assets | 270,045 | 113,529 | 270,045 | 113,529 | |
Purchases of property and equipment, net | $ 1,408 | $ 2,740 | $ 3,823 | $ 7,972 |
Segment Information - Reconcili
Segment Information - Reconciliation of Adjusted EBITDA to Income Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment information | ||||
Adjusted EBITDA | $ 182,665 | $ 156,628 | $ 539,015 | $ 498,088 |
Depreciation and amortization | (52,941) | (50,527) | (160,072) | (149,022) |
Income from operations | 122,906 | 99,837 | 359,512 | 328,996 |
Loss on early retirement of debt | (18,643) | 0 | (18,643) | (10,255) |
Equity in earnings of unconsolidated subsidiaries | 6,950 | 5,432 | 18,710 | 14,914 |
Gain on sale of businesses | 0 | 2,139 | 6,532 | 9,016 |
Interest expense | (54,336) | (50,669) | (156,611) | (147,991) |
Income (loss) before income taxes | 56,877 | 56,739 | 209,500 | 194,680 |
Operating Segments | Critical Illness Recovery Hospital | ||||
Segment information | ||||
Adjusted EBITDA | 57,247 | 53,292 | 194,383 | 186,989 |
Depreciation and amortization | (12,484) | (11,136) | (38,430) | (34,146) |
Stock compensation expense | 0 | 0 | 0 | 0 |
U.S. HealthWorks acquisition costs | 0 | |||
Income from operations | 44,763 | 42,156 | 155,953 | 152,843 |
Operating Segments | Rehabilitation Hospital | ||||
Segment information | ||||
Adjusted EBITDA | 36,780 | 25,343 | 92,545 | 80,314 |
Depreciation and amortization | (7,234) | (6,079) | (20,332) | (17,816) |
Stock compensation expense | 0 | 0 | 0 | 0 |
U.S. HealthWorks acquisition costs | 0 | |||
Income from operations | 29,546 | 19,264 | 72,213 | 62,498 |
Operating Segments | Outpatient Rehabilitation | ||||
Segment information | ||||
Adjusted EBITDA | 40,040 | 34,531 | 111,615 | 107,003 |
Depreciation and amortization | (6,887) | (6,597) | (20,910) | (19,938) |
Stock compensation expense | 0 | 0 | 0 | 0 |
U.S. HealthWorks acquisition costs | 0 | |||
Income from operations | 33,153 | 27,934 | 90,705 | 87,065 |
Operating Segments | Concentra | ||||
Segment information | ||||
Adjusted EBITDA | 77,679 | 68,754 | 220,024 | 199,119 |
Depreciation and amortization | (23,989) | (24,488) | (73,372) | (70,332) |
Stock compensation expense | (768) | (767) | (2,302) | (2,116) |
U.S. HealthWorks acquisition costs | (2,895) | |||
Income from operations | 52,922 | 43,499 | 144,350 | 123,776 |
Other | ||||
Segment information | ||||
Adjusted EBITDA | (29,081) | (25,292) | (79,552) | (75,337) |
Depreciation and amortization | (2,347) | (2,227) | (7,028) | (6,790) |
Stock compensation expense | (6,050) | (5,497) | (17,129) | (15,059) |
U.S. HealthWorks acquisition costs | 0 | |||
Income from operations | $ (37,478) | $ (33,016) | $ (103,709) | $ (97,186) |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (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] | ||||
Total net operating revenues | $ 1,393,343 | $ 1,267,401 | $ 4,079,338 | $ 3,816,575 |
Patient services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 1,285,305 | 1,180,958 | 3,770,034 | 3,578,575 |
Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 349,272 | 322,683 | 1,048,144 | 1,016,237 |
Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 936,033 | 858,275 | 2,721,890 | 2,562,338 |
Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 108,038 | 86,443 | 309,304 | 238,000 |
Operating Segments | Critical Illness Recovery Hospital | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 462,892 | 420,108 | 1,381,569 | 1,327,236 |
Operating Segments | Critical Illness Recovery Hospital | Patient services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 458,699 | 416,730 | 1,372,131 | 1,316,668 |
Operating Segments | Critical Illness Recovery Hospital | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 218,096 | 210,101 | 679,953 | 676,950 |
Operating Segments | Critical Illness Recovery Hospital | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 240,603 | 206,629 | 692,178 | 639,718 |
Operating Segments | Critical Illness Recovery Hospital | Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 4,193 | 3,378 | 9,438 | 10,568 |
Operating Segments | Rehabilitation Hospital | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 173,369 | 144,588 | 488,301 | 432,675 |
Operating Segments | Rehabilitation Hospital | Patient services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 163,452 | 135,886 | 459,905 | 406,070 |
Operating Segments | Rehabilitation Hospital | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 86,495 | 71,564 | 238,334 | 217,459 |
Operating Segments | Rehabilitation Hospital | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 76,957 | 64,322 | 221,571 | 188,611 |
Operating Segments | Rehabilitation Hospital | Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 9,917 | 8,702 | 28,396 | 26,605 |
Operating Segments | Outpatient Rehabilitation | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 265,330 | 245,234 | 774,126 | 743,379 |
Operating Segments | Outpatient Rehabilitation | Patient services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 244,323 | 226,350 | 714,625 | 689,526 |
Operating Segments | Outpatient Rehabilitation | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 44,230 | 40,563 | 128,377 | 120,228 |
Operating Segments | Outpatient Rehabilitation | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 200,093 | 185,787 | 586,248 | 569,298 |
Operating Segments | Outpatient Rehabilitation | Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 21,007 | 18,884 | 59,501 | 53,853 |
Operating Segments | Concentra | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 421,900 | 404,481 | 1,231,672 | 1,173,420 |
Operating Segments | Concentra | Patient services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 418,831 | 401,992 | 1,223,373 | 1,166,311 |
Operating Segments | Concentra | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 451 | 455 | 1,480 | 1,600 |
Operating Segments | Concentra | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 418,380 | 401,537 | 1,221,893 | 1,164,711 |
Operating Segments | Concentra | Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 3,069 | 2,489 | 8,299 | 7,109 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 69,852 | 52,990 | 203,670 | 139,865 |
Other | Patient services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 0 | 0 | 0 | 0 |
Other | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 0 | 0 | 0 | 0 |
Other | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 0 | 0 | 0 | 0 |
Other | Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | $ 69,852 | $ 52,990 | $ 203,670 | $ 139,865 |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Dividends declared and contractual dividends paid, basic (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
Dividends declared and contractual dividends paid, diluted (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
Earnings per Share - Net Income
Earnings per Share - Net Income Attributable to the Company, Common Shares Outstanding, and Participating Securities Outstanding (Details) - USD ($) $ in Thousands | 3 Months Ended | 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 | |
Earnings Per Share [Abstract] | ||||||||
Net income | $ 44,030 | $ 42,679 | $ 157,360 | $ 147,220 | ||||
Less: Net income attributable to non-controlling interests | 13,298 | 9,762 | 40,978 | 34,053 | ||||
Net income attributable to Select Medical Holdings Corporation | 30,732 | $ 44,816 | $ 40,834 | 32,917 | $ 46,511 | $ 33,739 | 116,382 | 113,167 |
Basic EPS | ||||||||
Less: net income attributable to participating securities | 1,052 | 1,098 | 3,889 | 3,732 | ||||
Net income attributable to common shares | 29,680 | 31,819 | 112,493 | 109,435 | ||||
Diluted EPS | ||||||||
Less: net income attributable to participating securities | 1,052 | 1,098 | 3,888 | 3,729 | ||||
Net income attributable to common shares | $ 29,680 | $ 31,819 | $ 112,494 | $ 109,438 |
Earnings per Share - Computatio
Earnings per Share - Computation of EPS Under the Two-Class Method (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 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 | |
Net Income Allocation, Basic [Abstract] | ||||||||
Net income allocated to common shares | $ 29,680 | $ 31,819 | $ 112,493 | $ 109,435 | ||||
Net income allocated to participating securities | 1,052 | 1,098 | 3,889 | 3,732 | ||||
Net Income Allocation, Diluted [Abstract] | ||||||||
Net income attributable to common shares | 29,680 | 31,819 | 112,494 | 109,438 | ||||
Net income allocated to participating securities | 1,052 | 1,098 | 3,888 | 3,729 | ||||
Net income attributable to Select Medical Holdings Corporation | $ 30,732 | $ 44,816 | $ 40,834 | $ 32,917 | $ 46,511 | $ 33,739 | $ 116,382 | $ 113,167 |
Weighted average common shares outstanding, basic (in shares) | 129,988 | 130,387 | 130,442 | 129,972 | ||||
Weighted average common shares outstanding, diluted (in shares) | 130,007 | 130,447 | 130,474 | 130,066 | ||||
Weighted average participating securities outstanding (in shares) | 4,607 | 4,501 | 4,509 | 4,432 | ||||
Basic EPS | ||||||||
Basic EPS (in dollars per share) | $ 0.23 | $ 0.24 | $ 0.86 | $ 0.84 | ||||
Diluted EPS | ||||||||
Diluted EPS (in dollars per share) | $ 0.23 | $ 0.24 | $ 0.86 | $ 0.84 |
Commitments and Contingencies -
Commitments and Contingencies - Litigation (Details) $ in Millions | Oct. 19, 2015case_manager | Sep. 30, 2019USD ($) |
Amended complaint | SSH-Evansville | ||
Commitments and Contingencies | ||
Number of case managers identified as plaintiff | case_manager | 2 | |
Professional liability claims | Maximum | ||
Commitments and Contingencies | ||
Total annual aggregate limit of insurance coverage | $ 40 | |
Professional liability claims | Maximum | Joint Venture Operations | ||
Commitments and Contingencies | ||
Total annual aggregate limit of insurance coverage | 20 | |
Professional liability claims | Minimum | Joint Venture Operations | ||
Commitments and Contingencies | ||
Total annual aggregate limit of insurance coverage | $ 5 |
Supplemental Financial Inform_3
Supplemental Financial Information of Concentra Group Holdings Parent - Schedule of Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||||||||
Current assets | $ 1,050,293 | $ 992,524 | ||||||
Total Assets | 7,154,756 | 5,964,265 | $ 5,980,181 | |||||
Liabilities and Equity | ||||||||
Current liabilities | 869,787 | 705,186 | ||||||
Total Liabilities | 5,295,316 | 4,267,537 | ||||||
Redeemable non-controlling interests | 953,697 | $ 844,422 | $ 833,241 | 780,488 | 779,574 | $ 616,232 | $ 607,474 | $ 640,818 |
Members' Equity of Concentra Group Holdings Parent | 754,718 | 803,042 | ||||||
Non-controlling interests | 151,025 | 113,198 | ||||||
Total Equity | 905,743 | $ 995,950 | $ 924,550 | 916,240 | $ 887,568 | $ 1,011,927 | $ 965,277 | $ 932,604 |
Total Liabilities and Equity | 7,154,756 | 5,964,265 | ||||||
Concentra Group Holdings Parent, LLC | ||||||||
Assets | ||||||||
Current assets | 287,514 | 385,094 | ||||||
Non-current assets | 2,078,713 | 1,793,774 | ||||||
Total Assets | 2,366,227 | 2,178,868 | ||||||
Liabilities and Equity | ||||||||
Current liabilities | 232,035 | 206,386 | ||||||
Non-current liabilities | 1,587,721 | 1,478,084 | ||||||
Total Liabilities | 1,819,756 | 1,684,470 | ||||||
Redeemable non-controlling interests | 17,268 | 18,525 | ||||||
Members' Equity of Concentra Group Holdings Parent | 523,814 | 470,329 | ||||||
Non-controlling interests | 5,389 | 5,544 | ||||||
Total Equity | 529,203 | 475,873 | ||||||
Total Liabilities and Equity | $ 2,366,227 | $ 2,178,868 |
Supplemental Financial Inform_4
Supplemental Financial Information of Concentra Group Holdings Parent - Schedule of Condensed Income Statement (Details) - USD ($) $ 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 | |
Condensed Income Statements, Captions [Line Items] | ||||||||
Net operating revenues | $ 1,393,343 | $ 1,267,401 | $ 4,079,338 | $ 3,816,575 | ||||
Income from operations | 122,906 | 99,837 | 359,512 | 328,996 | ||||
Net income | 44,030 | 42,679 | 157,360 | 147,220 | ||||
Net income attributable to Select Medical Holdings Corporation | 30,732 | $ 44,816 | $ 40,834 | 32,917 | $ 46,511 | $ 33,739 | 116,382 | 113,167 |
Concentra Group Holdings Parent, LLC | ||||||||
Condensed Income Statements, Captions [Line Items] | ||||||||
Net operating revenues | 421,900 | 404,481 | 1,231,672 | 1,173,420 | ||||
Income from operations | 52,922 | 43,499 | 144,350 | 123,776 | ||||
Net income | 17,788 | 16,084 | 53,521 | 45,576 | ||||
Net income attributable to Select Medical Holdings Corporation | $ 8,124 | $ 7,486 | $ 24,534 | $ 20,778 |
Supplemental Financial Inform_5
Supplemental Financial Information of Concentra Group Holdings Parent - Schedule of Condensed Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by operating activities | $ 266,640 | $ 380,977 |
Net cash used in investing activities | (270,710) | (646,542) |
Net cash provided by (used in) financing activities | (35,145) | 303,429 |
Net increase (decrease) in cash and cash equivalents | (39,215) | 37,864 |
Cash and cash equivalents at beginning of period | 175,178 | 122,549 |
Cash and cash equivalents at end of period | 135,963 | 160,413 |
Concentra Group Holdings Parent, LLC | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by operating activities | 104,234 | 119,147 |
Net cash used in investing activities | (56,400) | (545,856) |
Net cash provided by (used in) financing activities | (185,717) | 465,314 |
Net increase (decrease) in cash and cash equivalents | (137,883) | 38,605 |
Cash and cash equivalents at beginning of period | 163,116 | 113,059 |
Cash and cash equivalents at end of period | $ 25,233 | $ 151,664 |