Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
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 $0.001 per share | |
Trading Symbol | SEM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 133,977,064 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001320414 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 73,163 | $ 335,882 |
Accounts receivable | 816,405 | 762,677 |
Prepaid income taxes | 12,634 | 18,585 |
Other current assets | 95,828 | 95,848 |
Total Current Assets | 998,030 | 1,212,992 |
Operating lease right-of-use assets | 1,014,969 | 1,003,986 |
Property and equipment, net | 978,547 | 998,406 |
Goodwill | 3,391,078 | 3,391,955 |
Identifiable intangible assets, net | 405,374 | 409,068 |
Other assets | 327,569 | 323,881 |
Total Assets | 7,115,567 | 7,340,288 |
Current Liabilities: | ||
Current operating lease liabilities | 212,884 | 207,950 |
Current portion of long-term debt and notes payable | 17,161 | 25,167 |
Accounts payable | 131,601 | 145,731 |
Accrued payroll | 140,009 | 183,754 |
Accrued vacation | 128,705 | 124,111 |
Accrued interest | 11,339 | 33,853 |
Accrued other | 194,165 | 191,076 |
Income taxes payable | 8,090 | 2,638 |
Total Current Liabilities | 843,954 | 914,280 |
Non-current operating lease liabilities | 860,796 | 852,897 |
Non-current operating lease liabilities | 3,553,056 | 3,419,943 |
Non-current deferred tax liability | 158,782 | 148,258 |
Other non-current liabilities | 103,783 | 101,334 |
Total Liabilities | 5,520,371 | 5,436,712 |
Commitments and contingencies (Note 11) | ||
Redeemable non-controlling interests | 620,377 | 974,541 |
Stockholders’ Equity: | ||
Common stock, $0.001 par value, 700,000,000 shares authorized, 134,328,112 and 133,823,713 shares issued and outstanding at 2019 and 2020, respectively | 134 | 134 |
Capital in excess of par | 491,824 | 491,038 |
Retained earnings | 316,680 | 279,800 |
Total Stockholders’ Equity | 808,638 | 770,972 |
Non-controlling interests | 166,181 | 158,063 |
Total Equity | 974,819 | 929,035 |
Total Liabilities and Equity | $ 7,115,567 | $ 7,340,288 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
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) | 133,823,713 | 134,328,112 |
Common stock, shares outstanding (in shares) | 133,823,713 | 134,328,112 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net operating revenues | $ 1,414,632 | $ 1,324,631 |
Costs and expenses: | ||
Cost of services, exclusive of depreciation and amortization | 1,200,371 | 1,132,092 |
General and administrative | 33,831 | 28,677 |
Depreciation and amortization | 51,752 | 52,138 |
Total costs and expenses | 1,285,954 | 1,212,907 |
Income from operations | 128,678 | 111,724 |
Other income and expense: | ||
Equity in earnings of unconsolidated subsidiaries | 2,588 | 4,366 |
Gain on sale of businesses | 7,201 | 6,532 |
Interest expense | (46,107) | (50,811) |
Income before income taxes | 92,360 | 71,811 |
Income tax expense | 21,912 | 18,467 |
Net income | 70,448 | 53,344 |
Less: Net income attributable to non-controlling interests | 17,323 | 12,510 |
Net income attributable to Select Medical Holdings Corporation | $ 53,125 | $ 40,834 |
Earnings per common share (Note 10): | ||
Basic (in dollars per share) | $ 0.40 | $ 0.30 |
Diluted (in dollars per share) | $ 0.40 | $ 0.30 |
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, 2018 | 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, 2019 | 134,328,112 | 134,328,000 | ||||
Balance at Dec. 31, 2019 | $ 929,035 | $ 134 | 491,038 | 279,800 | 770,972 | 158,063 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Select Medical Holdings Corporation | 53,125 | 53,125 | 53,125 | |||
Net income attributable to non-controlling interests | 10,067 | 10,067 | ||||
Issuance of restricted stock (in shares) | 2,000 | |||||
Issuance of restricted stock | 0 | $ 0 | 0 | |||
Forfeitures of unvested restricted stock (in shares) | (15,000) | |||||
Forfeitures of unvested restricted stock | 0 | $ 0 | 0 | |||
Vesting of restricted stock | 6,136 | 6,136 | 6,136 | |||
Repurchase of common shares (in shares) | (492,000) | |||||
Repurchase of common shares | (8,691) | $ 0 | (5,350) | (3,341) | (8,691) | |
Issuance of non-controlling interests | 1,679 | 1,679 | ||||
Distributions to and purchases of non-controlling interests | (6,774) | (2,726) | (2,726) | (4,048) | ||
Redemption adjustment on non-controlling interests | (10,123) | (10,123) | (10,123) | |||
Other | $ 365 | (55) | (55) | 420 | ||
Balance (in shares) at Mar. 31, 2020 | 133,823,713 | 133,823,000 | ||||
Balance at Mar. 31, 2020 | $ 974,819 | $ 134 | $ 491,824 | $ 316,680 | $ 808,638 | $ 166,181 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities | ||
Net income | $ 70,448 | $ 53,344 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 8,479 | 7,872 |
Depreciation and amortization | 51,752 | 52,138 |
Provision for expected credit losses | 199 | 1,567 |
Equity in earnings of unconsolidated subsidiaries | (2,588) | (4,366) |
Gain on sale of assets and businesses | (7,339) | (6,233) |
Stock compensation expense | 6,903 | 6,255 |
Amortization of debt discount, premium and issuance costs | 553 | 3,231 |
Deferred income taxes | 9,364 | (81) |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | (53,928) | (74,752) |
Other current assets | 27 | (7,523) |
Other assets | 2,248 | 57,319 |
Accounts payable | (8,992) | 4,324 |
Accrued expenses | (44,455) | (69,163) |
Income taxes | 11,413 | 17,830 |
Net cash provided by operating activities | 44,084 | 41,762 |
Investing activities | ||
Business combinations, net of cash acquired | (6,833) | (6,120) |
Purchases of property and equipment | (39,208) | (49,073) |
Investment in businesses | (9,848) | (27,608) |
Proceeds from sale of assets and businesses | 11,230 | 2 |
Net cash used in investing activities | (44,659) | (82,799) |
Financing activities | ||
Borrowings on revolving facilities | 460,000 | 360,000 |
Payments on revolving facilities | (295,000) | (220,000) |
Payments on term loans | (39,843) | (132,685) |
Borrowings of other debt | 6,487 | 8,290 |
Principal payments on other debt | (8,099) | (6,155) |
Repurchase of common stock | (8,691) | 0 |
Increase in overdrafts | 0 | 6,050 |
Proceeds from issuance of non-controlling interests | 1,679 | 3,425 |
Distributions to and purchases of non-controlling interests | (12,474) | (5,251) |
Purchase of membership interests of Concentra Group Holdings Parent (Note 4) | (366,203) | 0 |
Net cash provided by (used in) financing activities | (262,144) | 13,674 |
Net decrease in cash and cash equivalents | (262,719) | (27,363) |
Cash and cash equivalents at beginning of period | 335,882 | 175,178 |
Cash and cash equivalents at end of period | 73,163 | 147,815 |
Supplemental Information | ||
Cash paid for interest | 67,885 | 37,199 |
Cash paid for taxes | 1,135 | 718 |
Operating lease right-of-use assets obtained in exchange for lease liabilities, excluding adoption impact of ASC Topic 842 at January 1, 2019 | $ 67,894 | $ 24,176 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements of Select Medical Holdings Corporation (“Holdings”) include the accounts of its wholly owned subsidiary, Select Medical Corporation (“Select”). Holdings conducts substantially all of its business through Select and its subsidiaries. Holdings and Select and its subsidiaries are collectively referred to as the “Company.” The unaudited condensed consolidated financial statements of the Company as of March 31, 2020 , and for the three month periods ended March 31, 2019 and 2020 , have been prepared pursuant to the rules and regulations of the Securities Exchange Commission (the “SEC”) for interim reporting and accounting principles generally accepted in the United States of America (“GAAP”). Accordingly, certain information and disclosures required by GAAP, which are normally included in the notes to consolidated financial statements, have been condensed or omitted pursuant to those rules and regulations, although the Company believes the disclosure is adequate to make the information presented not misleading. In the opinion of management, such information contains all adjustments, which are normal and recurring in nature, necessary for a fair statement of the financial position, results of operations and cash flow for such periods. All significant intercompany transactions and balances have been eliminated. The results of operations for the three months ended March 31, 2020 , are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2020 . 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, 2019 , contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 20, 2020. |
Accounting Policies
Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
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. Recently Adopted Accounting Pronouncements Financial Instruments On January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326) , which replaced the incurred loss approach for recognizing credit losses on financial instruments with an expected loss approach. The expected loss approach is subject to management judgments using assessments of incurred credit losses, assessments of current conditions, and forecasts using reasonable and supportable assumptions. The standard was required to be applied using the modified retrospective approach with a cumulative-effect adjustment to retained earnings, if any, upon adoption. The Company’s primary financial instrument subject to the standard is its accounts receivable derived from contracts with patients. Historically, the Company has experienced infrequent, immaterial credit losses related to its accounts receivable and, based on its experience, believes the risk of material defaults is low. The Company experienced credit losses of $1.1 million for the year ended December 31, 2017, credit loss recoveries of $0.1 million for the year ended December 31, 2018, and credit losses of $3.0 million for the year ended December 31, 2019. The Company’s historical credit losses have been infrequent and immaterial largely because the Company’s accounts receivable are typically paid for by highly-solvent, creditworthy payors such as Medicare, other governmental programs, and highly-regulated commercial insurers, on behalf of the patient. The Company believes it has moderate credit risk related to defaults on self-pay amounts in accounts receivable; however, these amounts represented less than 1.0% of the Company’s accounts receivable at January 1, 2020. In estimating the Company’s expected credit losses under Topic 326, the Company considers its incurred loss experience and adjusts for known and expected events and other circumstances, identified using periodic assessments implemented by the Company, which management believes are relevant in assessing the collectability of its accounts receivable. Because of the infrequent and insignificant nature of the Company’s historical credit losses, forecasts of expected credit losses are generally unnecessary. Expected credit losses are recognized by the Company through an allowance for credit losses and related credit loss expense. As of January 1, 2020, the Company completed its expected credit loss assessment for its financial instruments subject to Topic 326. The Company’s estimate of expected credit losses as of January 1, 2020, resulted in no adjustments to the allowance for credit losses and no |
Credit Risk Concentrations
Credit Risk Concentrations | 3 Months Ended |
Mar. 31, 2020 | |
Credit Loss [Abstract] | |
Credit Risk Concentrations | Credit Risk Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash balances and accounts 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 its critical illness recovery hospitals and rehabilitation hospitals. Within the Company’s outpatient rehabilitation clinics, insurance coverage is verified prior to the patient’s visit. Within the Company’s Concentra centers, insurance coverage is verified or an authorization is received from the patient’s employer prior to the patient’s visit. Because of the diversity in the Company’s non-governmental third-party payor base, as well as their geographic dispersion, patient accounts receivable which are due from the Medicare program represent the Company’s only significant concentration of credit risk. Approximately 15% and 18% of the Company’s accounts receivable is from Medicare at December 31, 2019 , and March 31, 2020 , respectively. |
Redeemable Non-Controlling Inte
Redeemable Non-Controlling Interests | 3 Months Ended |
Mar. 31, 2020 | |
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. On January 1, 2020, Select acquired approximately 17.2% of the outstanding membership interests of Concentra Group Holdings Parent on a fully diluted basis from Welsh, Carson, Anderson & Stowe XII, L.P. (“WCAS”), Dignity Health Holding Corporation (“DHHC”), and certain other sellers in exchange for an aggregate purchase price of approximately $338.4 million . On February 1, 2020, Select acquired an additional 1.4% of the outstanding membership interests of Concentra Group Holdings Parent on a fully diluted basis from WCAS, DHHC, and certain other sellers in exchange for an aggregate purchase price of approximately $27.8 million . These purchases were in lieu of, and are considered to be, the exercise of the first put right provided to certain equity holders under the terms of the Amended and Restated Limited Liability Company Agreement of Concentra Group Holdings Parent, dated as of February 1, 2018, as amended (the “Concentra LLC Agreement”). Following these purchases, Select owns approximately 66.6% of the outstanding membership interests of Concentra Group Holdings Parent on a fully diluted basis and approximately 68.8% of the outstanding Class A membership interests of Concentra Group Holdings Parent. The changes in redeemable non-controlling interests are as follows (in thousands): Three Months Ended March 31, 2019 2020 Balance as of January 1 $ 780,488 $ 974,541 Net income attributable to redeemable non-controlling interests 7,700 7,256 Distributions to and purchases of redeemable non-controlling interests (2,771 ) (5,687 ) Purchase of membership interests of Concentra Group Holdings Parent — (366,203 ) Redemption adjustment on redeemable non-controlling interests 47,470 10,123 Other 354 347 Balance as of March 31 $ 833,241 $ 620,377 |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2020 | |
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 Concentra’s 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 $178.4 million and $173.7 million at December 31, 2019 , and March 31, 2020 , 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 $176.7 million and $172.1 million at December 31, 2019 , and March 31, 2020 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Goodwill The following table shows changes in the carrying amounts of goodwill by reporting unit for the three months ended March 31, 2020 : Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Total (in thousands) Balance as of December 31, 2019 $ 1,078,804 $ 430,900 $ 649,763 $ 1,232,488 $ 3,391,955 Acquired — — 610 4,567 5,177 Sold — — (6,034 ) — (6,034 ) Measurement period adjustment — — — (20 ) (20 ) Balance as of March 31, 2020 $ 1,078,804 $ 430,900 $ 644,339 $ 1,237,035 $ 3,391,078 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, 2019 March 31, 2020 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 17,157 — 17,157 18,348 — 18,348 Accreditations 1,874 — 1,874 1,874 — 1,874 Finite-lived intangible assets: Trademarks 5,000 (5,000 ) — 5,000 (5,000 ) — Customer relationships 287,373 (87,346 ) 200,027 288,963 (93,814 ) 195,149 Non-compete agreements 32,114 (8,802 ) 23,312 32,845 (9,540 ) 23,305 Total identifiable intangible assets $ 510,216 $ (101,148 ) $ 409,068 $ 513,728 $ (108,354 ) $ 405,374 The Company’s accreditations and indefinite-lived trademarks have renewal terms and the costs to renew these intangible assets are expensed as incurred. At March 31, 2020 , the accreditations and indefinite-lived trademarks have a weighted average time until next renewal of 1.5 years and 6.9 years , respectively. The Company’s finite-lived intangible assets amortize over their estimated useful lives. Amortization expense was $7.1 million and $6.9 million for the three months ended March 31, 2019 and 2020 , respectively. |
Long-Term Debt and Notes Payabl
Long-Term Debt and Notes Payable | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Notes Payable | Long-Term Debt and Notes Payable As of March 31, 2020 , 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 6.250% senior notes $ 1,225,000 $ 38,437 $ (19,200 ) $ 1,244,237 $ 1,222,673 Select credit facilities: Select revolving facility 165,000 — — 165,000 164,381 Select term loan 2,103,437 (9,905 ) (10,796 ) 2,082,736 1,987,748 Other debt, including finance leases 78,617 — (373 ) 78,244 78,244 Total debt $ 3,572,054 $ 28,532 $ (30,369 ) $ 3,570,217 $ 3,453,046 Principal maturities of the Company’s long-term debt and notes payable were approximately as follows (in thousands): 2020 2021 2022 2023 2024 Thereafter Total Select 6.250% senior notes $ — $ — $ — $ — $ — $ 1,225,000 $ 1,225,000 Select credit facilities: Select revolving facility — — — — 165,000 — 165,000 Select term loan — — — 4,757 11,150 2,087,530 2,103,437 Other debt, including finance leases 14,318 8,130 17,215 3,364 23,550 12,040 78,617 Total debt $ 14,318 $ 8,130 $ 17,215 $ 8,121 $ 199,700 $ 3,324,570 $ 3,572,054 As of December 31, 2019 , the Company’s long-term debt and notes payable were as follows (in thousands): Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value Select 6.250% senior notes $ 1,225,000 $ 39,988 $ (19,944 ) $ 1,245,044 $ 1,322,020 Select credit facilities: Select revolving facility — — — — — Select term loan 2,143,280 (10,411 ) (11,348 ) 2,121,521 2,145,959 Other debt, including finance leases 78,941 — (396 ) 78,545 78,545 Total debt $ 3,447,221 $ 29,577 $ (31,688 ) $ 3,445,110 $ 3,546,524 Excess Cash Flow Payment In February 2020, Select made a principal prepayment of approximately $39.8 million associated with its term loans in accordance with the provision in its senior secured credit agreement, dated March 6, 2017 (together with any borrowings thereunder, 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. Fair Value The Company considers the inputs in the valuation process to be Level 2 in the fair value hierarchy for its 6.250% senior notes due August 15, 2026 (the “senior notes”) and the Select 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 value of the Select credit facilities was based on quoted market prices for this debt in the syndicated loan market. The fair value of the 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 | 3 Months Ended |
Mar. 31, 2020 | |
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. 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, 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 March 31, 2019 2020 (in thousands) Net operating revenues: (1) Critical illness recovery hospital $ 457,534 $ 500,521 Rehabilitation hospital 154,558 182,019 Outpatient rehabilitation 246,905 255,249 Concentra 396,321 398,535 Other 69,313 78,308 Total Company $ 1,324,631 $ 1,414,632 Adjusted EBITDA: Critical illness recovery hospital $ 72,998 $ 88,570 Rehabilitation hospital 25,797 38,569 Outpatient rehabilitation 28,991 27,122 Concentra 66,258 61,466 Other (23,927 ) (28,394 ) Total Company $ 170,117 $ 187,333 Total assets: Critical illness recovery hospital $ 2,062,659 $ 2,148,779 Rehabilitation hospital 1,089,391 1,127,267 Outpatient rehabilitation 1,250,015 1,285,449 Concentra 2,464,317 2,354,169 Other 155,110 199,903 Total Company $ 7,021,492 $ 7,115,567 Purchases of property and equipment: Critical illness recovery hospital $ 10,160 $ 8,965 Rehabilitation hospital 13,183 3,325 Outpatient rehabilitation 9,040 8,384 Concentra 15,698 15,586 Other 992 2,948 Total Company $ 49,073 $ 39,208 _______________________________________________________________________________ (1) Prior to the quarter ended June 30, 2019, the financial results of employee leasing services provided to non-consolidating subsidiaries were included with the Company’s reportable segments. These results are now reported as part of the Company’s other activities. Net operating revenues have been conformed to the current presentation for the three months ended March 31, 2019 . A reconciliation of Adjusted EBITDA to income before income taxes is as follows: Three Months Ended March 31, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 72,998 $ 25,797 $ 28,991 $ 66,258 $ (23,927 ) Depreciation and amortization (11,451 ) (6,402 ) (7,032 ) (24,904 ) (2,349 ) Stock compensation expense — — — (767 ) (5,488 ) Income (loss) from operations $ 61,547 $ 19,395 $ 21,959 $ 40,587 $ (31,764 ) $ 111,724 Equity in earnings of unconsolidated subsidiaries 4,366 Gain on sale of businesses 6,532 Interest expense (50,811 ) Income before income taxes $ 71,811 Three Months Ended March 31, 2020 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 88,570 $ 38,569 $ 27,122 $ 61,466 $ (28,394 ) Depreciation and amortization (12,336 ) (6,887 ) (7,218 ) (22,887 ) (2,424 ) Stock compensation expense — — — (767 ) (6,136 ) Income (loss) from operations $ 76,234 $ 31,682 $ 19,904 $ 37,812 $ (36,954 ) $ 128,678 Equity in earnings of unconsolidated subsidiaries 2,588 Gain on sale of businesses 7,201 Interest expense (46,107 ) Income before income taxes $ 92,360 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2020 | |
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 months ended March 31, 2019 and 2020 : Three Months Ended March 31, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 238,169 $ 74,579 $ 40,278 $ 555 $ — $ 353,581 Non-Medicare 216,959 70,642 187,914 393,236 — 868,751 Total patient services revenues 455,128 145,221 228,192 393,791 — 1,222,332 Other revenues (1) 2,406 9,337 18,713 2,530 69,313 102,299 Total net operating revenues $ 457,534 $ 154,558 $ 246,905 $ 396,321 $ 69,313 $ 1,324,631 Three Months Ended March 31, 2020 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 241,509 $ 90,752 $ 40,832 $ 472 $ — $ 373,565 Non-Medicare 255,947 81,436 196,890 395,033 — 929,306 Total patient services revenues 497,456 172,188 237,722 395,505 — 1,302,871 Other revenues 3,065 9,831 17,527 3,030 78,308 111,761 Total net operating revenues $ 500,521 $ 182,019 $ 255,249 $ 398,535 $ 78,308 $ 1,414,632 _______________________________________________________________________________ (1) Prior to the quarter ended June 30, 2019, the financial results of employee leasing services provided to non-consolidating subsidiaries were included with the Company’s reportable segments. These results are now reported as part of the Company’s other activities. Net operating revenues have been conformed to the current presentation for the three months ended March 31, 2019 |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The Company’s capital structure includes common stock and unvested restricted stock awards. To compute earnings per share (“EPS”), the Company applies the two-class method because the Company’s unvested restricted stock awards are participating securities which are entitled to participate equally with the Company’s common stock in undistributed earnings. Application of the Company’s two-class method is as follows: (i) Net income attributable to the Company is reduced by the amount of dividends declared and by the contractual amount of dividends that must be paid for the current period for each class of stock. There were no dividends declared or contractual dividends paid for the three months ended March 31, 2019 and 2020 . (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. (iii) The net income allocated to each security is then divided by the weighted average number of outstanding shares for the period to determine the EPS for each security considered in the two-class method. The following table sets forth the net income attributable to the Company, its common shares outstanding, and its participating securities outstanding. Basic EPS Diluted EPS Three Months Ended March 31, Three Months Ended March 31, 2019 2020 2019 2020 (in thousands) Net income $ 53,344 $ 70,448 $ 53,344 $ 70,448 Less: net income attributable to non-controlling interests 12,510 17,323 12,510 17,323 Net income attributable to the Company 40,834 53,125 40,834 53,125 Less: net income attributable to participating securities 1,343 1,818 1,343 1,818 Net income attributable to common shares $ 39,491 $ 51,307 $ 39,491 $ 51,307 Three Months Ended March 31, 2019 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 39,491 130,821 $ 0.30 $ 39,491 130,861 $ 0.30 Participating securities 1,343 4,449 $ 0.30 1,343 4,449 $ 0.30 Total Company $ 40,834 $ 40,834 Three Months Ended March 31, 2020 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 51,307 129,638 $ 0.40 $ 51,307 129,638 $ 0.40 Participating securities 1,818 4,594 $ 0.40 1,818 4,594 $ 0.40 Total Company $ 53,125 $ 53,125 _______________________________________________________________________________ (1) Represents the weighted average share count outstanding during the period. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
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 $6.0 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. 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 has produced 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted. The CARES Act includes changes to certain tax law related to net operating losses and the deductibility of interest expense and depreciation. ASC 740, Income Taxes , requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. This legislation had the effect of increasing the Company’s deferred income taxes and decreasing its current income taxes payable by approximately $15.5 million during the three months ended March 31, 2020. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Title VIII in Division B of the CARES Act established the Public Health and Social Services Emergency Fund, also referred to as the Cares Act Provider Relief Fund, which set aside $100.0 billion to be administered through grants and other mechanisms to hospitals, public entities, not-for-profit entities, and Medicare- and Medicaid-enrolled suppliers and institutional providers. The purpose of these funds is to reimburse providers for lost revenue attributable to the coronavirus disease 2019 (“COVID-19”) pandemic, such as forgone revenues from canceled procedures, and to provide support for related healthcare expenses, such as constructing temporary structures or emergency operation centers, retrofitting facilities, purchasing medical supplies and equipment including personal protective equipment and testing supplies, and increasing workforce. Further, these relief funds ensure uninsured patients are receiving testing and treatment for COVID-19. On April 10, 2020, the U.S. Department of Health & Human Services began making payments to healthcare providers from the $100.0 billion appropriation. These are payments, rather than loans, to healthcare providers, and will not need to be repaid. The Company received approximately $93.7 million of payments as part of the Cares Act Provider Relief Fund. The Company concluded that the receipt of these payments would be accounted for in periods subsequent to March 31, 2020, as the Company was not able to determine eligibility for the assistance or the amounts that would be distributed until April 2020. Additionally, the CARES Act allows for qualified healthcare providers to receive advanced payments under the existing Medicare Accelerated and Advance Payments Program during the COVID-19 pandemic. Under this program, healthcare providers may receive advanced payments for future Medicare services provided. The Company applied for and received approval from CMS in April 2020 to receive advanced payments and, through April 30, 2020, the Company has received $316.1 million under this program. Because these payments are made on behalf of patients before services are provided, the Company will record these payments as a contract liability until all performance obligations have been met. These advanced payments will be recouped by CMS through future Medicare claims billed by the Company, beginning 121 days after receipt of the advanced payment. After 120 days, any new Medicare claim billed by the Company will reduce the liability owed to CMS. The Company is required to repay any advanced payments not recouped by CMS within 210 days from the date the Company originally received the payment. Failure to repay the advanced payments when due will result in interest charges on the outstanding balance owed. In April 2020, the Company began deferring payment on its share of payroll taxes owed, as allowed by the CARES Act through December 31, 2020. The Company is able to defer half of its share of payroll taxes owed until December 31, 2021, with the remaining half due on December 31, 2022. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
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. |
Recent and Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Financial Instruments On January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326) , which replaced the incurred loss approach for recognizing credit losses on financial instruments with an expected loss approach. The expected loss approach is subject to management judgments using assessments of incurred credit losses, assessments of current conditions, and forecasts using reasonable and supportable assumptions. The standard was required to be applied using the modified retrospective approach with a cumulative-effect adjustment to retained earnings, if any, upon adoption. The Company’s primary financial instrument subject to the standard is its accounts receivable derived from contracts with patients. Historically, the Company has experienced infrequent, immaterial credit losses related to its accounts receivable and, based on its experience, believes the risk of material defaults is low. The Company experienced credit losses of $1.1 million for the year ended December 31, 2017, credit loss recoveries of $0.1 million for the year ended December 31, 2018, and credit losses of $3.0 million for the year ended December 31, 2019. The Company’s historical credit losses have been infrequent and immaterial largely because the Company’s accounts receivable are typically paid for by highly-solvent, creditworthy payors such as Medicare, other governmental programs, and highly-regulated commercial insurers, on behalf of the patient. The Company believes it has moderate credit risk related to defaults on self-pay amounts in accounts receivable; however, these amounts represented less than 1.0% of the Company’s accounts receivable at January 1, 2020. In estimating the Company’s expected credit losses under Topic 326, the Company considers its incurred loss experience and adjusts for known and expected events and other circumstances, identified using periodic assessments implemented by the Company, which management believes are relevant in assessing the collectability of its accounts receivable. Because of the infrequent and insignificant nature of the Company’s historical credit losses, forecasts of expected credit losses are generally unnecessary. Expected credit losses are recognized by the Company through an allowance for credit losses and related credit loss expense. As of January 1, 2020, the Company completed its expected credit loss assessment for its financial instruments subject to Topic 326. The Company’s estimate of expected credit losses as of January 1, 2020, resulted in no adjustments to the allowance for credit losses and no cumulative-effect adjustment to retained earnings on the adoption date of the standard. |
Credit Risk Concentrations | Credit Risk Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash balances and accounts 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 its critical illness recovery hospitals and rehabilitation hospitals. Within the Company’s outpatient rehabilitation clinics, insurance coverage is verified prior to the patient’s visit. Within the Company’s Concentra centers, insurance coverage is verified or an authorization is received from the patient’s employer prior to the patient’s visit. |
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 Concentra’s 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) | 3 Months Ended |
Mar. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Schedule of redeemable non-controlling interests | he changes in redeemable non-controlling interests are as follows (in thousands): Three Months Ended March 31, 2019 2020 Balance as of January 1 $ 780,488 $ 974,541 Net income attributable to redeemable non-controlling interests 7,700 7,256 Distributions to and purchases of redeemable non-controlling interests (2,771 ) (5,687 ) Purchase of membership interests of Concentra Group Holdings Parent — (366,203 ) Redemption adjustment on redeemable non-controlling interests 47,470 10,123 Other 354 347 Balance as of March 31 $ 833,241 $ 620,377 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill | The following table shows changes in the carrying amounts of goodwill by reporting unit for the three months ended March 31, 2020 : Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Total (in thousands) Balance as of December 31, 2019 $ 1,078,804 $ 430,900 $ 649,763 $ 1,232,488 $ 3,391,955 Acquired — — 610 4,567 5,177 Sold — — (6,034 ) — (6,034 ) Measurement period adjustment — — — (20 ) (20 ) Balance as of March 31, 2020 $ 1,078,804 $ 430,900 $ 644,339 $ 1,237,035 $ 3,391,078 |
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, 2019 March 31, 2020 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 17,157 — 17,157 18,348 — 18,348 Accreditations 1,874 — 1,874 1,874 — 1,874 Finite-lived intangible assets: Trademarks 5,000 (5,000 ) — 5,000 (5,000 ) — Customer relationships 287,373 (87,346 ) 200,027 288,963 (93,814 ) 195,149 Non-compete agreements 32,114 (8,802 ) 23,312 32,845 (9,540 ) 23,305 Total identifiable intangible assets $ 510,216 $ (101,148 ) $ 409,068 $ 513,728 $ (108,354 ) $ 405,374 |
Long-Term Debt and Notes Paya_2
Long-Term Debt and Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Company's long-term debt and notes payable | As of March 31, 2020 , 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 6.250% senior notes $ 1,225,000 $ 38,437 $ (19,200 ) $ 1,244,237 $ 1,222,673 Select credit facilities: Select revolving facility 165,000 — — 165,000 164,381 Select term loan 2,103,437 (9,905 ) (10,796 ) 2,082,736 1,987,748 Other debt, including finance leases 78,617 — (373 ) 78,244 78,244 Total debt $ 3,572,054 $ 28,532 $ (30,369 ) $ 3,570,217 $ 3,453,046 As of December 31, 2019 , the Company’s long-term debt and notes payable were as follows (in thousands): Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value Select 6.250% senior notes $ 1,225,000 $ 39,988 $ (19,944 ) $ 1,245,044 $ 1,322,020 Select credit facilities: Select revolving facility — — — — — Select term loan 2,143,280 (10,411 ) (11,348 ) 2,121,521 2,145,959 Other debt, including finance leases 78,941 — (396 ) 78,545 78,545 Total debt $ 3,447,221 $ 29,577 $ (31,688 ) $ 3,445,110 $ 3,546,524 |
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): 2020 2021 2022 2023 2024 Thereafter Total Select 6.250% senior notes $ — $ — $ — $ — $ — $ 1,225,000 $ 1,225,000 Select credit facilities: Select revolving facility — — — — 165,000 — 165,000 Select term loan — — — 4,757 11,150 2,087,530 2,103,437 Other debt, including finance leases 14,318 8,130 17,215 3,364 23,550 12,040 78,617 Total debt $ 14,318 $ 8,130 $ 17,215 $ 8,121 $ 199,700 $ 3,324,570 $ 3,572,054 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2019 2020 (in thousands) Net operating revenues: (1) Critical illness recovery hospital $ 457,534 $ 500,521 Rehabilitation hospital 154,558 182,019 Outpatient rehabilitation 246,905 255,249 Concentra 396,321 398,535 Other 69,313 78,308 Total Company $ 1,324,631 $ 1,414,632 Adjusted EBITDA: Critical illness recovery hospital $ 72,998 $ 88,570 Rehabilitation hospital 25,797 38,569 Outpatient rehabilitation 28,991 27,122 Concentra 66,258 61,466 Other (23,927 ) (28,394 ) Total Company $ 170,117 $ 187,333 Total assets: Critical illness recovery hospital $ 2,062,659 $ 2,148,779 Rehabilitation hospital 1,089,391 1,127,267 Outpatient rehabilitation 1,250,015 1,285,449 Concentra 2,464,317 2,354,169 Other 155,110 199,903 Total Company $ 7,021,492 $ 7,115,567 Purchases of property and equipment: Critical illness recovery hospital $ 10,160 $ 8,965 Rehabilitation hospital 13,183 3,325 Outpatient rehabilitation 9,040 8,384 Concentra 15,698 15,586 Other 992 2,948 Total Company $ 49,073 $ 39,208 _______________________________________________________________________________ (1) Prior to the quarter ended June 30, 2019, the financial results of employee leasing services provided to non-consolidating subsidiaries were included with the Company’s reportable segments. These results are now reported as part of the Company’s other activities. Net operating revenues have been conformed to the current presentation for the three months ended March 31, 2019 . |
Schedule of reconciliation of Adjusted EBITDA to income before income taxes | A reconciliation of Adjusted EBITDA to income before income taxes is as follows: Three Months Ended March 31, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 72,998 $ 25,797 $ 28,991 $ 66,258 $ (23,927 ) Depreciation and amortization (11,451 ) (6,402 ) (7,032 ) (24,904 ) (2,349 ) Stock compensation expense — — — (767 ) (5,488 ) Income (loss) from operations $ 61,547 $ 19,395 $ 21,959 $ 40,587 $ (31,764 ) $ 111,724 Equity in earnings of unconsolidated subsidiaries 4,366 Gain on sale of businesses 6,532 Interest expense (50,811 ) Income before income taxes $ 71,811 Three Months Ended March 31, 2020 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 88,570 $ 38,569 $ 27,122 $ 61,466 $ (28,394 ) Depreciation and amortization (12,336 ) (6,887 ) (7,218 ) (22,887 ) (2,424 ) Stock compensation expense — — — (767 ) (6,136 ) Income (loss) from operations $ 76,234 $ 31,682 $ 19,904 $ 37,812 $ (36,954 ) $ 128,678 Equity in earnings of unconsolidated subsidiaries 2,588 Gain on sale of businesses 7,201 Interest expense (46,107 ) Income before income taxes $ 92,360 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of net operating revenues by operating segment | The following tables disaggregate the Company’s net operating revenues for the three months ended March 31, 2019 and 2020 : Three Months Ended March 31, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 238,169 $ 74,579 $ 40,278 $ 555 $ — $ 353,581 Non-Medicare 216,959 70,642 187,914 393,236 — 868,751 Total patient services revenues 455,128 145,221 228,192 393,791 — 1,222,332 Other revenues (1) 2,406 9,337 18,713 2,530 69,313 102,299 Total net operating revenues $ 457,534 $ 154,558 $ 246,905 $ 396,321 $ 69,313 $ 1,324,631 Three Months Ended March 31, 2020 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 241,509 $ 90,752 $ 40,832 $ 472 $ — $ 373,565 Non-Medicare 255,947 81,436 196,890 395,033 — 929,306 Total patient services revenues 497,456 172,188 237,722 395,505 — 1,302,871 Other revenues 3,065 9,831 17,527 3,030 78,308 111,761 Total net operating revenues $ 500,521 $ 182,019 $ 255,249 $ 398,535 $ 78,308 $ 1,414,632 _______________________________________________________________________________ (1) Prior to the quarter ended June 30, 2019, the financial results of employee leasing services provided to non-consolidating subsidiaries were included with the Company’s reportable segments. These results are now reported as part of the Company’s other activities. Net operating revenues have been conformed to the current presentation for the three months ended March 31, 2019 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per share | The following table sets forth the net income attributable to the Company, its common shares outstanding, and its participating securities outstanding. Basic EPS Diluted EPS Three Months Ended March 31, Three Months Ended March 31, 2019 2020 2019 2020 (in thousands) Net income $ 53,344 $ 70,448 $ 53,344 $ 70,448 Less: net income attributable to non-controlling interests 12,510 17,323 12,510 17,323 Net income attributable to the Company 40,834 53,125 40,834 53,125 Less: net income attributable to participating securities 1,343 1,818 1,343 1,818 Net income attributable to common shares $ 39,491 $ 51,307 $ 39,491 $ 51,307 Three Months Ended March 31, 2019 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 39,491 130,821 $ 0.30 $ 39,491 130,861 $ 0.30 Participating securities 1,343 4,449 $ 0.30 1,343 4,449 $ 0.30 Total Company $ 40,834 $ 40,834 Three Months Ended March 31, 2020 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 51,307 129,638 $ 0.40 $ 51,307 129,638 $ 0.40 Participating securities 1,818 4,594 $ 0.40 1,818 4,594 $ 0.40 Total Company $ 53,125 $ 53,125 _______________________________________________________________________________ (1) Represents the weighted average share count outstanding during the period. |
Accounting Policies (Details)
Accounting Policies (Details) - USD ($) | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Allowance for credit losses | $ 0 | ||||
Retained earnings | $ 279,800,000 | $ 316,680,000 | |||
Concentration Risk [Line Items] | |||||
Credit loss (recoveries) | $ 3,000,000 | $ (100,000) | $ 1,100,000 | ||
Cumulative Effect, Period Of Adoption, Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Retained earnings | $ 0 | ||||
Credit Concentration Risk | Accounts Receivable | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 1.00% |
Credit Risk Concentrations (Det
Credit Risk Concentrations (Details) - Credit Concentration Risk - Accounts Receivable | Jan. 01, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Concentration Risk [Line Items] | |||
Percentage of concentration risk | 1.00% | ||
Medicare Receivable | |||
Concentration Risk [Line Items] | |||
Percentage of concentration risk | 18.00% | 15.00% |
Redeemable Non-Controlling In_3
Redeemable Non-Controlling Interests (Details) - USD ($) $ in Thousands | Feb. 01, 2020 | Jan. 01, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Noncontrolling Interest [Line Items] | ||||
Aggregate purchase price | $ 366,203 | $ 0 | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Balance, beginning | $ 974,541 | 974,541 | 780,488 | |
Net income attributable to redeemable non-controlling interests | 7,256 | 7,700 | ||
Distributions to and purchases of redeemable non-controlling interests | 5,687 | 2,771 | ||
Purchase of membership interests of Concentra Group Holdings Parent (Note 4) | (366,203) | 0 | ||
Redemption adjustment on redeemable non-controlling interests | 10,123 | 47,470 | ||
Other | 347 | 354 | ||
Balance, ending | $ 620,377 | $ 833,241 | ||
Concentra Group Holdings Parent, LLC | ||||
Noncontrolling Interest [Line Items] | ||||
Aggregate purchase price | $ 27,800 | $ 338,400 | ||
Concentra Group Holdings Parent, LLC | ||||
Noncontrolling Interest [Line Items] | ||||
Percentage of membership interests purchased | 1.40% | 17.20% | ||
Outstanding member interest | 66.60% | |||
Concentra Group Holdings Parent, LLC | Class A Units | ||||
Noncontrolling Interest [Line Items] | ||||
Outstanding member interest | 68.80% |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Variable Interest Entity [Line Items] | |||
Assets | $ 7,115,567 | $ 7,340,288 | $ 7,021,492 |
Liabilities | 5,520,371 | 5,436,712 | |
Variable Interest Entity, Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Assets | 173,700 | 178,400 | |
Liabilities | $ 172,100 | $ 176,700 |
Intangible Assets - Carrying Am
Intangible Assets - Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill | |
December 31, 2019 | $ 3,391,955 |
Acquired | 5,177 |
Sold | (6,034) |
Measurement period adjustment | (20) |
March 31, 2020 | 3,391,078 |
Critical Illness Recovery Hospital | |
Goodwill | |
December 31, 2019 | 1,078,804 |
Acquired | 0 |
Sold | 0 |
Measurement period adjustment | 0 |
March 31, 2020 | 1,078,804 |
Rehabilitation Hospital | |
Goodwill | |
December 31, 2019 | 430,900 |
Acquired | 0 |
Sold | 0 |
Measurement period adjustment | 0 |
March 31, 2020 | 430,900 |
Outpatient Rehabilitation | |
Goodwill | |
December 31, 2019 | 649,763 |
Acquired | 610 |
Sold | (6,034) |
Measurement period adjustment | 0 |
March 31, 2020 | 644,339 |
Concentra | |
Goodwill | |
December 31, 2019 | 1,232,488 |
Acquired | 4,567 |
Sold | 0 |
Measurement period adjustment | (20) |
March 31, 2020 | $ 1,237,035 |
Intangible Assets - Carrying Va
Intangible Assets - Carrying Value and Amortization of Identifiable Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Total identifiable intangible assets, gross carrying amount | $ 513,728 | $ 510,216 | |
Finite-lived intangible assets, accumulated amortization | (108,354) | (101,148) | |
Total identifiable intangible assets, net carrying amount | 405,374 | 409,068 | |
Amortized intangible assets: | |||
Amortization expense | 6,900 | $ 7,100 | |
Trademarks | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Finite-lived intangible assets, gross carrying amount | 5,000 | 5,000 | |
Finite-lived intangible assets, accumulated amortization | (5,000) | (5,000) | |
Finite-lived intangible assets, net carrying amount | 0 | 0 | |
Customer relationships | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Finite-lived intangible assets, gross carrying amount | 288,963 | 287,373 | |
Finite-lived intangible assets, accumulated amortization | (93,814) | (87,346) | |
Finite-lived intangible assets, net carrying amount | 195,149 | 200,027 | |
Non-compete agreements | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Finite-lived intangible assets, gross carrying amount | 32,845 | 32,114 | |
Finite-lived intangible assets, accumulated amortization | (9,540) | (8,802) | |
Finite-lived intangible assets, net carrying amount | 23,305 | 23,312 | |
Trademarks | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Indefinite-lived intangible assets, carrying amount | $ 166,698 | 166,698 | |
Amortized intangible assets: | |||
Weighted average time until next renewal | 6 years 10 months 24 days | ||
Certificates of need | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Indefinite-lived intangible assets, carrying amount | $ 18,348 | 17,157 | |
Accreditations | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Indefinite-lived intangible assets, carrying amount | $ 1,874 | $ 1,874 | |
Amortized intangible assets: | |||
Weighted average time until next renewal | 1 year 6 months |
Long-Term Debt and Notes Paya_3
Long-Term Debt and Notes Payable - Components of Long-Term Debt And Notes Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Principal Outstanding | $ 3,572,054 | $ 3,447,221 |
Unamortized Premium (Discount) | 28,532 | 29,577 |
Unamortized Issuance Costs | (30,369) | (31,688) |
Carrying Value | 3,570,217 | 3,445,110 |
Fair Value | 3,453,046 | 3,546,524 |
Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 78,617 | 78,941 |
Unamortized Premium (Discount) | 0 | 0 |
Unamortized Issuance Costs | (373) | (396) |
Carrying Value | 78,244 | 78,545 |
Fair Value | $ 78,244 | 78,545 |
Select Medical Corporation | Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest rate of debt (as a percent) | 6.25% | |
Principal Outstanding | $ 1,225,000 | 1,225,000 |
Unamortized Premium (Discount) | 38,437 | 39,988 |
Unamortized Issuance Costs | (19,200) | (19,944) |
Carrying Value | 1,244,237 | 1,245,044 |
Fair Value | 1,222,673 | 1,322,020 |
Select Medical Corporation | Term loans | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 2,103,437 | 2,143,280 |
Unamortized Premium (Discount) | (9,905) | (10,411) |
Unamortized Issuance Costs | (10,796) | (11,348) |
Carrying Value | 2,082,736 | 2,121,521 |
Fair Value | 1,987,748 | 2,145,959 |
Select Medical Corporation | Revolving facility | Credit facilities | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 165,000 | 0 |
Unamortized Premium (Discount) | 0 | 0 |
Unamortized Issuance Costs | 0 | 0 |
Carrying Value | 165,000 | 0 |
Fair Value | $ 164,381 | $ 0 |
Long-Term Debt and Notes Paya_4
Long-Term Debt and Notes Payable - Principal Maturities Of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
2020 | $ 14,318 | |
2021 | 8,130 | |
2022 | 17,215 | |
2023 | 8,121 | |
2024 | 199,700 | |
Thereafter | 3,324,570 | |
Total | 3,572,054 | $ 3,447,221 |
Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
2020 | 14,318 | |
2021 | 8,130 | |
2022 | 17,215 | |
2023 | 3,364 | |
2024 | 23,550 | |
Thereafter | 12,040 | |
Total | $ 78,617 | 78,941 |
Select Medical Corporation | Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest rate of debt (as a percent) | 6.25% | |
2020 | $ 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
Thereafter | 1,225,000 | |
Total | 1,225,000 | 1,225,000 |
Select Medical Corporation | Credit facilities | Revolving facility | ||
Debt Instrument [Line Items] | ||
2020 | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 165,000 | |
Thereafter | 0 | |
Total | 165,000 | 0 |
Select Medical Corporation | Term loans | ||
Debt Instrument [Line Items] | ||
2020 | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 4,757 | |
2024 | 11,150 | |
Thereafter | 2,087,530 | |
Total | $ 2,103,437 | $ 2,143,280 |
Long-Term Debt and Notes Paya_5
Long-Term Debt and Notes Payable - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Feb. 29, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | |
Line of Credit Facility [Line Items] | |||
Principal prepayment | $ 39,843 | $ 132,685 | |
Select Medical Corporation | Term loans | |||
Line of Credit Facility [Line Items] | |||
Principal prepayment | $ 39,800 | ||
Select Medical Corporation | Senior notes | |||
Line of Credit Facility [Line Items] | |||
Interest rate of debt (as a percent) | 6.25% |
Segment Information - Selected
Segment Information - Selected Financial Data (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Segment information | |||
Net operating revenues | $ 1,414,632 | $ 1,324,631 | |
Adjusted EBITDA | 187,333 | 170,117 | |
Total assets | 7,115,567 | 7,021,492 | $ 7,340,288 |
Purchases of property and equipment, net | 39,208 | 49,073 | |
Operating Segments | Critical Illness Recovery Hospital | |||
Segment information | |||
Net operating revenues | 500,521 | 457,534 | |
Adjusted EBITDA | 88,570 | 72,998 | |
Total assets | 2,148,779 | 2,062,659 | |
Purchases of property and equipment, net | 8,965 | 10,160 | |
Operating Segments | Rehabilitation Hospital | |||
Segment information | |||
Net operating revenues | 182,019 | 154,558 | |
Adjusted EBITDA | 38,569 | 25,797 | |
Total assets | 1,127,267 | 1,089,391 | |
Purchases of property and equipment, net | 3,325 | 13,183 | |
Operating Segments | Outpatient Rehabilitation | |||
Segment information | |||
Net operating revenues | 255,249 | 246,905 | |
Adjusted EBITDA | 27,122 | 28,991 | |
Total assets | 1,285,449 | 1,250,015 | |
Purchases of property and equipment, net | 8,384 | 9,040 | |
Operating Segments | Concentra | |||
Segment information | |||
Net operating revenues | 398,535 | 396,321 | |
Adjusted EBITDA | 61,466 | 66,258 | |
Total assets | 2,354,169 | 2,464,317 | |
Purchases of property and equipment, net | 15,586 | 15,698 | |
Other | |||
Segment information | |||
Net operating revenues | 78,308 | 69,313 | |
Adjusted EBITDA | (28,394) | (23,927) | |
Total assets | 199,903 | 155,110 | |
Purchases of property and equipment, net | $ 2,948 | $ 992 |
Segment Information - Reconcili
Segment Information - Reconciliation of Adjusted EBITDA to Income Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment information | ||
Adjusted EBITDA | $ 187,333 | $ 170,117 |
Depreciation and amortization | (51,752) | (52,138) |
Income from operations | 128,678 | 111,724 |
Equity in earnings of unconsolidated subsidiaries | 2,588 | 4,366 |
Gain on sale of businesses | 7,201 | 6,532 |
Interest expense | (46,107) | (50,811) |
Income (loss) before income taxes | 92,360 | 71,811 |
Operating Segments | Critical Illness Recovery Hospital | ||
Segment information | ||
Adjusted EBITDA | 88,570 | 72,998 |
Depreciation and amortization | (12,336) | (11,451) |
Stock compensation expense | 0 | 0 |
Income from operations | 76,234 | 61,547 |
Operating Segments | Rehabilitation Hospital | ||
Segment information | ||
Adjusted EBITDA | 38,569 | 25,797 |
Depreciation and amortization | (6,887) | (6,402) |
Stock compensation expense | 0 | 0 |
Income from operations | 31,682 | 19,395 |
Operating Segments | Outpatient Rehabilitation | ||
Segment information | ||
Adjusted EBITDA | 27,122 | 28,991 |
Depreciation and amortization | (7,218) | (7,032) |
Stock compensation expense | 0 | 0 |
Income from operations | 19,904 | 21,959 |
Operating Segments | Concentra | ||
Segment information | ||
Adjusted EBITDA | 61,466 | 66,258 |
Depreciation and amortization | (22,887) | (24,904) |
Stock compensation expense | (767) | (767) |
Income from operations | 37,812 | 40,587 |
Other | ||
Segment information | ||
Adjusted EBITDA | (28,394) | (23,927) |
Depreciation and amortization | (2,424) | (2,349) |
Stock compensation expense | (6,136) | (5,488) |
Income from operations | $ (36,954) | $ (31,764) |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | $ 1,414,632 | $ 1,324,631 |
Patient services revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 1,302,871 | 1,222,332 |
Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 373,565 | 353,581 |
Non-Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 929,306 | 868,751 |
Other revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 111,761 | 102,299 |
Operating Segments | Critical Illness Recovery Hospital | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 500,521 | 457,534 |
Operating Segments | Critical Illness Recovery Hospital | Patient services revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 497,456 | 455,128 |
Operating Segments | Critical Illness Recovery Hospital | Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 241,509 | 238,169 |
Operating Segments | Critical Illness Recovery Hospital | Non-Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 255,947 | 216,959 |
Operating Segments | Critical Illness Recovery Hospital | Other revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 3,065 | 2,406 |
Operating Segments | Rehabilitation Hospital | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 182,019 | 154,558 |
Operating Segments | Rehabilitation Hospital | Patient services revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 172,188 | 145,221 |
Operating Segments | Rehabilitation Hospital | Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 90,752 | 74,579 |
Operating Segments | Rehabilitation Hospital | Non-Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 81,436 | 70,642 |
Operating Segments | Rehabilitation Hospital | Other revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 9,831 | 9,337 |
Operating Segments | Outpatient Rehabilitation | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 255,249 | 246,905 |
Operating Segments | Outpatient Rehabilitation | Patient services revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 237,722 | 228,192 |
Operating Segments | Outpatient Rehabilitation | Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 40,832 | 40,278 |
Operating Segments | Outpatient Rehabilitation | Non-Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 196,890 | 187,914 |
Operating Segments | Outpatient Rehabilitation | Other revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 17,527 | 18,713 |
Operating Segments | Concentra | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 398,535 | 396,321 |
Operating Segments | Concentra | Patient services revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 395,505 | 393,791 |
Operating Segments | Concentra | Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 472 | 555 |
Operating Segments | Concentra | Non-Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 395,033 | 393,236 |
Operating Segments | Concentra | Other revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 3,030 | 2,530 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 78,308 | 69,313 |
Other | Patient services revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 0 | 0 |
Other | Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 0 | 0 |
Other | Non-Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | 0 | 0 |
Other | Other revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total net operating revenues | $ 78,308 | $ 69,313 |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Dividends declared and contractual dividends paid, basic (in dollars per share) | $ 0 | $ 0 |
Dividends declared and contractual dividends paid, diluted (in dollars per share) | $ 0 | $ 0 |
Earnings per Share - Net Income
Earnings per Share - Net Income Attributable to the Company, Common Shares Outstanding, and Participating Securities Outstanding (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net income | $ 70,448 | $ 53,344 |
Less: Net income attributable to non-controlling interests | 17,323 | 12,510 |
Net income attributable to Select Medical Holdings Corporation | 53,125 | 40,834 |
Basic EPS | ||
Less: net income attributable to participating securities | 1,818 | 1,343 |
Net income attributable to common shares | 51,307 | 39,491 |
Diluted EPS | ||
Less: net income attributable to participating securities | 1,818 | 1,343 |
Net income attributable to common shares | $ 51,307 | $ 39,491 |
Earnings per Share - Computatio
Earnings per Share - Computation of EPS Under the Two-Class Method (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net Income Allocation, Basic [Abstract] | ||
Net income allocated to common shares | $ 51,307 | $ 39,491 |
Net income allocated to participating securities | 1,818 | 1,343 |
Net Income Allocation, Diluted [Abstract] | ||
Net income attributable to common shares | 51,307 | 39,491 |
Net income allocated to participating securities | 1,818 | 1,343 |
Net income attributable to Select Medical Holdings Corporation | $ 53,125 | $ 40,834 |
Weighted average common shares outstanding, basic (in shares) | 129,638 | 130,821 |
Weighted average common shares outstanding, diluted (in shares) | 129,638 | 130,861 |
Weighted average participating securities outstanding (in shares) | 4,594 | 4,449 |
Basic EPS | ||
Basic EPS (in dollars per share) | $ 0.40 | $ 0.30 |
Diluted EPS | ||
Diluted EPS (in dollars per share) | $ 0.40 | $ 0.30 |
Commitments and Contingencies -
Commitments and Contingencies - Litigation (Details) - Professional liability claims $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Maximum | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | $ 40 |
Maximum | Joint Venture Operations | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | 20 |
Minimum | Joint Venture Operations | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | $ 6 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | Mar. 27, 2020USD ($) |
Income Tax Disclosure [Abstract] | |
Increase in deferred income taxes | $ 15.5 |
Decrease in current income taxes payable | $ 15.5 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | 1 Months Ended |
Apr. 30, 2020USD ($) | |
Subsequent Event [Line Items] | |
Federal relief payments received | $ 93.7 |
Medicare Accelerated and Advance Payments | $ 316.1 |