Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 01, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
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, $0.001 par value per share | ||
Trading Symbol | SEM | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 4,691,969,579 | ||
Entity Common Stock, Shares Outstanding | 133,884,817 | ||
Documents Incorporated by Reference | Listed hereunder are the documents, any portions of which are incorporated by reference and the Parts of this Form 10-K into which such portions are incorporated: 1. The registrant's definitive proxy statement for use in connection with the 2022 Annual Meeting of Stockholders to be held on or about April 30, 2022 to be filed within 120 days after the registrant’s fiscal year ended December 31, 2021, portions of which are incorporated by reference into Part III of this Form 10-K. Such definitive proxy statement, except for the parts therein which have been specifically incorporated by reference, should not be deemed “filed” for the purposes of this form 10-K. | ||
Entity Central Index Key | 0001320414 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Firm ID | 238 |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Philadelphia, Pennsylvania |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 74,310 | $ 577,061 |
Accounts receivable | 889,303 | 896,763 |
Prepaid income taxes | 55,620 | 5,686 |
Other current assets | 120,206 | 114,490 |
Total Current Assets | 1,139,439 | 1,594,000 |
Operating lease right-of-use assets | 1,078,754 | 1,032,217 |
Property and equipment, net | 961,467 | 943,420 |
Goodwill | 3,448,912 | 3,379,014 |
Identifiable intangible assets, net | 374,879 | 387,541 |
Other assets | 356,720 | 319,207 |
Total Assets | 7,360,171 | 7,655,399 |
Current Liabilities: | ||
Overdrafts | 42,353 | 0 |
Current operating lease liabilities | 229,334 | 220,413 |
Current portion of long-term debt and notes payable | 17,572 | 12,621 |
Accounts payable | 233,844 | 177,087 |
Accrued payroll | 247,292 | 224,876 |
Accrued vacation | 144,048 | 132,811 |
Accrued interest | 29,002 | 29,240 |
Accrued other | 244,312 | 228,948 |
Government advances (Note 22) | 83,790 | 321,807 |
Unearned government assistance (Note 22) | 93 | 82,607 |
Income taxes payable | 1,437 | 7,956 |
Total Current Liabilities | 1,273,077 | 1,438,366 |
Non-current operating lease liabilities | 916,540 | 875,367 |
Long-term debt, net of current portion | 3,556,385 | 3,389,398 |
Non-current deferred tax liability | 142,792 | 132,421 |
Other non-current liabilities | 106,442 | 168,703 |
Total Liabilities | 5,995,236 | 6,004,255 |
Commitments and contingencies (Note 21) | ||
Redeemable non-controlling interests | 39,033 | 398,171 |
Stockholders’ Equity: | ||
Common stock, $0.001 par value, 700,000,000 shares authorized, 134,850,735 and 133,884,817 shares issued and outstanding at 2020 and 2021, respectively | 134 | 135 |
Capital in excess of par | 504,314 | 509,128 |
Retained earnings | 593,251 | 553,244 |
Accumulated other comprehensive income (loss) | 12,282 | (2,027) |
Total Stockholders’ Equity | 1,109,981 | 1,060,480 |
Non-controlling interests | 215,921 | 192,493 |
Total Equity | 1,325,902 | 1,252,973 |
Total Liabilities and Equity | $ 7,360,171 | $ 7,655,399 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
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) | 133,884,817 | 134,850,735 |
Common stock, shares outstanding (in shares) | 133,884,817 | 134,850,735 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | |||
Revenue | $ 6,204,515 | $ 5,531,713 | $ 5,453,922 |
Costs and expenses: | |||
Cost of services, exclusive of depreciation and amortization | 5,285,149 | 4,710,372 | 4,641,002 |
General and administrative | 146,975 | 138,037 | 128,463 |
Depreciation and amortization | 202,645 | 205,659 | 212,576 |
Total costs and expenses | 5,634,769 | 5,054,068 | 4,982,041 |
Other operating income | 144,028 | 90,012 | 0 |
Income from operations | 713,774 | 567,657 | 471,881 |
Other income and expense: | |||
Loss on early retirement of debt | 0 | 0 | (38,083) |
Equity in earnings of unconsolidated subsidiaries | 44,428 | 29,440 | 24,989 |
Gain on sale of businesses | 2,155 | 12,387 | 6,532 |
Interest income | 5,350 | 0 | 0 |
Interest expense | (135,985) | (153,011) | (200,570) |
Income before income taxes | 629,722 | 456,473 | 264,749 |
Income tax expense | 129,773 | 111,867 | 63,718 |
Net income | 499,949 | 344,606 | 201,031 |
Less: Net income attributable to non-controlling interests | 97,724 | 85,611 | 52,582 |
Net income attributable to Select Medical Holdings Corporation | $ 402,225 | $ 258,995 | $ 148,449 |
Earnings per common share (Note 20): | |||
Basic (in dollars per share) | $ 2.98 | $ 1.93 | $ 1.10 |
Diluted (in dollars per share) | $ 2.98 | $ 1.93 | $ 1.10 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 499,949 | $ 344,606 | $ 201,031 |
Other comprehensive income (loss), net of tax: | |||
Gain (loss) on interest rate cap cash flow hedge | 14,270 | (2,027) | 0 |
Reclassification adjustment for (gains) losses included in net income | 39 | 0 | 0 |
Net change, net of tax benefit (expense) | 14,309 | (2,027) | 0 |
Comprehensive income | 514,258 | 342,579 | 201,031 |
Less: Comprehensive income attributable to non-controlling interests | 97,724 | 85,611 | 52,582 |
Comprehensive income attributable to Select Medical Holdings Corporation | $ 416,534 | $ 256,968 | $ 148,449 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Tax benefit (expense) on components of other comprehensive income | $ (4,799) | $ 705 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity and Income - USD ($) $ in Thousands | Total | Total Stockholders’ Equity | Common Stock | Capital in Excess of Par | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interests |
Beginning balance (in shares) at Dec. 31, 2018 | 135,266,000 | ||||||
Beginning balance at Dec. 31, 2018 | $ 916,240 | $ 803,042 | $ 135 | $ 482,556 | $ 320,351 | $ 0 | $ 113,198 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income attributable to Select Medical Holdings Corporation | 148,449 | 148,449 | 148,449 | ||||
Net income attributable to non-controlling interests | 26,626 | 0 | 26,626 | ||||
Issuance of restricted stock (in shares) | 1,500,000 | ||||||
Issuance of restricted stock | 0 | 0 | $ 2 | (2) | |||
Forfeitures of unvested restricted stock (in shares) | (43,000) | ||||||
Forfeitures of unvested restricted stock | 0 | 0 | $ 0 | 0 | |||
Vesting of restricted stock | 23,382 | 23,382 | 23,382 | ||||
Repurchase of common shares (in shares) | (2,500,000) | ||||||
Repurchase of common shares | (38,531) | (38,531) | $ (3) | (22,565) | (15,963) | ||
Exercise of stock options (in shares) | 105,000 | ||||||
Exercise of stock options | 964 | 964 | $ 0 | 964 | |||
Issuance of non-controlling interests | 38,121 | 6,499 | 6,499 | 31,622 | |||
Distributions to and purchases of non-controlling interests | (14,861) | 204 | 204 | (15,065) | |||
Redemption value adjustment on non-controlling interests | (172,915) | (172,915) | (172,915) | ||||
Other comprehensive income (loss) | 0 | ||||||
Other | 1,560 | (122) | (122) | 1,682 | |||
Ending balance (in shares) at Dec. 31, 2019 | 134,328,000 | ||||||
Ending balance at Dec. 31, 2019 | 929,035 | 770,972 | $ 134 | 491,038 | 279,800 | 0 | 158,063 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income attributable to Select Medical Holdings Corporation | 258,995 | 258,995 | 258,995 | ||||
Net income attributable to non-controlling interests | 47,850 | 0 | 47,850 | ||||
Issuance of restricted stock (in shares) | 1,478,000 | ||||||
Issuance of restricted stock | 0 | 0 | $ 1 | (1) | |||
Forfeitures of unvested restricted stock (in shares) | (84,000) | ||||||
Forfeitures of unvested restricted stock | 0 | 0 | $ 0 | 0 | |||
Vesting of restricted stock | 24,738 | 24,738 | 24,738 | ||||
Repurchase of common shares (in shares) | (872,000) | ||||||
Repurchase of common shares | (16,034) | (16,034) | $ 0 | (8,996) | (7,038) | ||
Issuance of non-controlling interests | 8,062 | 3,042 | 3,042 | 5,020 | |||
Distributions to and purchases of non-controlling interests | (26,620) | (5,833) | 102 | (5,935) | (20,787) | ||
Redemption value adjustment on non-controlling interests | 27,470 | 27,470 | 27,470 | ||||
Other comprehensive income (loss) | (2,027) | (2,027) | (2,027) | ||||
Other | $ 1,504 | (843) | (795) | (48) | 2,347 | ||
Ending balance (in shares) at Dec. 31, 2020 | 134,850,735 | 134,850,000 | |||||
Ending balance at Dec. 31, 2020 | $ 1,252,973 | 1,060,480 | $ 135 | 509,128 | 553,244 | (2,027) | 192,493 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income attributable to Select Medical Holdings Corporation | 402,225 | 402,225 | 402,225 | ||||
Net income attributable to non-controlling interests | 47,571 | 0 | 47,571 | ||||
Cash dividends declared for common stockholders ($0.375 per share) | (50,600) | (50,600) | (50,600) | ||||
Issuance of restricted stock (in shares) | 1,363,000 | ||||||
Issuance of restricted stock | 0 | 0 | $ 1 | (1) | |||
Forfeitures of unvested restricted stock (in shares) | (18,000) | ||||||
Forfeitures of unvested restricted stock | 0 | 0 | $ 0 | 0 | |||
Vesting of restricted stock | 28,798 | 28,798 | 28,798 | ||||
Repurchase of common shares (in shares) | (2,311,000) | ||||||
Repurchase of common shares | (79,476) | (79,476) | $ (2) | (33,322) | (46,152) | ||
Issuance of non-controlling interests | 21,186 | 3,646 | 3,646 | 17,540 | |||
Non-controlling interests acquired in business combination | 11,153 | 0 | 11,153 | ||||
Distributions to and purchases of non-controlling interests | (72,158) | (19,197) | (3,757) | (15,440) | (52,961) | ||
Redemption value adjustment on non-controlling interests | (250,083) | (250,083) | (250,083) | ||||
Other comprehensive income (loss) | 14,309 | 14,309 | 14,309 | ||||
Other | $ 4 | (121) | (178) | 57 | 125 | ||
Ending balance (in shares) at Dec. 31, 2021 | 133,884,817 | 133,884,000 | |||||
Ending balance at Dec. 31, 2021 | $ 1,325,902 | $ 1,109,981 | $ 134 | $ 504,314 | $ 593,251 | $ 12,282 | $ 215,921 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity and Income (Parenthetical) | 12 Months Ended |
Dec. 31, 2021$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Cash dividends declared for common stockholders (in dollars per share) | $ 0.375 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities | |||
Net income | $ 499,949 | $ 344,606 | $ 201,031 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Distributions from unconsolidated subsidiaries | 37,002 | 35,390 | 20,222 |
Depreciation and amortization | 202,645 | 205,659 | 212,576 |
Provision for expected credit losses | 236 | 604 | 3,038 |
Equity in earnings of unconsolidated subsidiaries | (44,428) | (29,440) | (24,989) |
Loss on extinguishment of debt | 0 | 0 | 22,130 |
Gain on sale of assets and businesses | (2,409) | (22,563) | (6,321) |
Stock compensation expense | 30,940 | 27,250 | 26,451 |
Amortization of debt discount, premium and issuance costs | 2,217 | 2,184 | 11,566 |
Deferred income taxes | 5,055 | (14,715) | (7,435) |
Changes in operating assets and liabilities, net of effects of business combinations: | |||
Accounts receivable | 23,101 | (116,601) | (57,991) |
Other current assets | (2,418) | (18,775) | (4,259) |
Other assets | (7,196) | 17,587 | 6,122 |
Accounts payable | 53,392 | 27,325 | 5,743 |
Accrued expenses | (73,159) | 168,839 | 37,298 |
Government advances | (241,185) | 318,116 | 0 |
Unearned government assistance | (82,514) | 82,607 | 0 |
Net cash provided by operating activities | 401,228 | 1,028,073 | 445,182 |
Investing activities | |||
Business combinations, net of cash acquired | (81,911) | (20,808) | (93,705) |
Purchases of property and equipment | (180,537) | (146,440) | (157,126) |
Investment in businesses | (20,967) | (31,425) | (66,090) |
Proceeds from sale of assets and businesses | 26,821 | 83,320 | 192 |
Net cash used in investing activities | (256,594) | (115,353) | (316,729) |
Financing activities | |||
Borrowings on revolving facilities | 160,000 | 470,000 | 700,000 |
Payments on revolving facilities | 0 | (470,000) | (720,000) |
Proceeds from term loans | 0 | 0 | 1,208,106 |
Payments on term loans | 0 | (39,843) | (1,618,170) |
Proceeds from 6.250% senior notes | 0 | 0 | 1,244,987 |
Payment on 6.375% senior notes | 0 | 0 | (710,000) |
Revolving facility debt issuance costs | 0 | 0 | (310) |
Borrowings of other debt | 33,013 | 40,108 | 24,225 |
Principal payments on other debt | (39,668) | (48,381) | (30,604) |
Dividends paid to common stockholders | (50,600) | 0 | 0 |
Repurchase of common stock | (79,476) | (16,034) | (38,531) |
Proceeds from exercise of stock options | 0 | 0 | 964 |
Increase (decrease) in overdrafts | 42,353 | 0 | (25,083) |
Proceeds from issuance of non-controlling interests | 20,732 | 7,564 | 18,447 |
Distributions to and purchases of non-controlling interests | (73,081) | (38,589) | (21,780) |
Purchase of membership interests of Concentra Group Holdings Parent (Note 2) | (660,658) | (576,366) | 0 |
Net cash provided by (used in) financing activities | (647,385) | (671,541) | 32,251 |
Net increase (decrease) in cash and cash equivalents | (502,751) | 241,179 | 160,704 |
Cash and cash equivalents at beginning of period | 577,061 | 335,882 | 175,178 |
Cash and cash equivalents at end of period | 74,310 | 577,061 | 335,882 |
Supplemental information: | |||
Cash paid for interest | 132,203 | 155,236 | 182,992 |
Cash paid for taxes | 181,184 | 108,890 | 70,592 |
Non-cash investing and financing activities: | |||
Liabilities for purchases of property and equipment | $ 23,441 | $ 24,480 | $ 28,760 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flow (Parenthetical) - Senior notes - Select Medical Corporation | Aug. 01, 2019 |
6.250% senior notes | |
Interest rate of debt | 6.25% |
6.375% senior notes | |
Interest rate of debt | 6.375% |
Organization and Significant Ac
Organization and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Significant Accounting Policies | Organization and Significant Accounting Policies Business Description The 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 Company is, based on number of facilities, one of the largest operators of critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers in the United States. As of December 31, 2021, the Company had operations in 46 states and the District of Columbia. As of December 31, 2021, the Company operated 104 critical illness recovery hospitals, 30 rehabilitation hospitals, and 1,881 outpatient rehabilitation clinics. As of December 31, 2021, Concentra operated 518 occupational health centers and 134 onsite clinics at employer worksites. The Company operates through four business segments: the critical illness recovery hospital segment, the rehabilitation hospital segment, the outpatient rehabilitation segment, and the Concentra segment. The Company’s critical illness recovery hospital segment consists of hospitals designed to serve the needs of patients recovering from critical illnesses, often with complex medical needs, and the rehabilitation hospital segment consists of hospitals designed to serve patients that require intensive physical rehabilitation care. Patients are typically admitted to the Company’s critical illness recovery hospitals and rehabilitation hospitals from general acute care hospitals. The Company’s outpatient rehabilitation segment consists of clinics that provide physical, occupational, and speech rehabilitation services. The Company’s Concentra segment consists of occupational health centers that provide workers’ compensation injury care, physical therapy, and consumer health services and onsite clinics located at employer worksites that deliver occupational medicine services. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Estimates and assumptions are used for, but not limited to: revenue recognition, allowances for expected credit losses, estimated useful lives of assets, the fair value of goodwill and intangible assets, amounts payable for self-insured losses, and the computation of income taxes. Future events and their effects cannot be predicted with certainty; accordingly, the Company’s accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as the Company’s operating environment changes. The Company’s management evaluates and updates assumptions and estimates on an ongoing basis. Actual results could differ from those estimates. Principles of Consolidation The consolidated financial statements include the accounts of Holdings, Select, and the subsidiaries, limited liability companies, limited partnerships, and variable interest entities in which the Company has a controlling financial interest. All intercompany balances and transactions are eliminated in consolidation. Variable Interest Entities Certain states prohibit the “corporate practice of medicine,” which restricts the Company from owning medical practices which directly employ physicians and from exercising control over medical decisions by physicians. In these states, the Company enters into long-term management agreements with medical practices that are owned by licensed physicians which, in turn, employ or contract with physicians who provide professional medical services in certain of its occupational health centers and clinics. The agreements provide for the Company to direct the transfer of ownership of the medical practices to new licensed physicians at any time. Based on the provisions of the management agreements, the medical practices are variable interest entities for which the Company is the primary beneficiary. Non-Controlling Interests The ownership interests held by outside parties in subsidiaries, which include limited liability companies and limited partnerships, controlled by the Company are classified as non-controlling interests. Net income or loss is attributed to the Company’s non-controlling interests. Some of the Company’s non-controlling ownership interests consist of outside parties that have certain redemption rights that, if exercised, require the Company to purchase the parties’ ownership interests. These interests are classified and reported as redeemable non-controlling interests and have been adjusted to their approximate redemption values, after the attribution of net income or loss . 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, if any. (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. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents are stated at cost which approximates fair value. Accounts Receivable Substantially all of the Company’s accounts receivable is related to providing healthcare services to patients. These services are paid for primarily by federal and state governmental authorities, managed care health plans, commercial insurance companies, workers’ compensation programs, and employer-directed programs. 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. The Company performs periodic assessments to determine if an allowance for expected credit losses is necessary. The Company considers its incurred loss experience and adjusts for known and expected events and other circumstances. In estimating its expected credit losses, the Company may consider changes in the length of time its receivables have been outstanding, changes in credit ratings for its payors, requests from payors to alter payment terms due to financial difficulty, and notices of payor bankruptcies or payors entering receivership. Because the Company’s accounts receivable is 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’s credit losses have been infrequent and insignificant in nature. Amounts recognized for allowances for expected credit losses are immaterial to the consolidated financial statements. 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 leases are classified as operating leases. 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. Right-of-use assets and lease liabilities are measured at the present value of the remaining fixed lease payments at lease commencement. As most of the Company’s leases do not specify an implicit rate, the Company uses its incremental borrowing rate, which coincides with the lease term at the commencement of a lease, 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 also include any prepaid lease payments and initial direct costs, less any lease incentive received, 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 are accounted for as lease payments and are included in the measurement of the Company’s right-of-use asset and lease liability. For the Company’s operating leases, lease expense, a component of cost of services and general and administrative expense in the consolidated statements of operations, is recognized on a straight-line basis over the lease term. For the Company’s finance leases, interest expense on the lease liability is recognized using the effective interest method and 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 also makes variable lease payments which are expensed as incurred. These payments relate to changes in indexes or rates after the lease commencement date, as well as property taxes, insurance, and common area maintenance which were not fixed at lease commencement. This expense is a component of cost of services and general and administrative expense in the consolidated statements of operations. 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 in the consolidated statements of operations, is recognized on a straight-line basis, as a reduction to lease expense, over the term of the sublease. The Company elected the short-term lease exemption for equipment leases; accordingly, equipment leases with terms of 12 months or less are not recorded in the consolidated balance sheets. 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 in the consolidated statements of operations. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Maintenance and repairs of property and equipment are expensed as incurred. Improvements that increase the estimated useful life of an asset are capitalized. Direct internal and external costs of developing software for internal use, including programming and enhancements, are capitalized and depreciated over the estimated useful lives once the software is placed in service. Capitalized software costs are included within furniture and equipment. Software training costs, maintenance, and repairs are expensed as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets or the term of the lease, as appropriate. The general range of useful lives is as follows: Land improvements 5 – 25 years Leasehold improvements 1 – 20 years Buildings 40 years Building improvements 5 – 40 years Furniture and equipment 1 – 20 years The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of those assets or asset groups may not be recoverable. If the expected undiscounted future cash flows are less than the carrying amount of such assets or asset groups, the Company recognizes an impairment loss to the extent the carrying amount exceeds its estimated fair value. Intangible Assets Goodwill and indefinite-lived identifiable intangible assets Goodwill and other indefinite-lived intangible assets are recognized primarily as the result of business combinations. Goodwill is assigned to reporting units based upon the specific nature of the business acquired or, when a business combination contains business components related to more than one reporting unit, goodwill is assigned to each reporting unit based upon an allocation determined by the relative fair values of the business acquired. When the Company disposes of a business, the Company allocates a portion of the reporting unit’s goodwill to that business based on the relative fair values of the portion of the reporting unit being disposed of and the portion of the reporting unit remaining. The Company evaluates its reporting units on an annual basis and, if its reporting units are reorganized, the Company reassigns goodwill based on the relative fair values of the new reporting units. Goodwill and other indefinite-lived intangible assets are not amortized, but instead are subject to periodic impairment evaluations. The Company performs its impairment tests annually as of October 1 or when events or conditions occur that might suggest a possible impairment. Events or conditions which might suggest impairment could include a significant change in the business environment, the regulatory environment, or legal factors; a current period operating or cash flow loss combined with a history of such losses or a projection of continuing losses; or a sale or disposition of a significant portion of a reporting unit. The Company may first assess qualitatively whether goodwill is more likely than not impaired by considering relevant events or circumstances that affect the fair value or carrying amount of a reporting unit. If goodwill is more likely than not impaired, the Company is then required to complete a quantitative analysis. The Company considers both the income and market approach in determining the fair values of its reporting units when performing a quantitative analysis. If the carrying value of a reporting unit exceeds its fair value, an impairment charge is recognized equal to the difference between the carrying amount of the reporting unit and its fair value, not to exceed the carrying value of goodwill of the reporting unit. At December 31, 2021, the Company’s other indefinite-lived intangible assets consist of trademarks, certificates of need, and accreditations. To determine the fair values of its trademarks, the Company uses a relief from royalty income approach. For the Company’s certificates of need and accreditations, the Company performs qualitative assessments. As part of these assessments, the Company evaluates the current business environment, regulatory environment, legal and other company-specific factors. If it is more likely than not that the fair values are less than the carrying values, the Company performs a quantitative impairment test. The Company’s most recent impairment assessments were completed during the fourth quarter of 2021 utilizing information as of October 1, 2021. The Company did not identify any instances of impairment with respect to goodwill or other indefinite-lived intangible assets as of October 1, 2021. Finite-lived identifiable intangible assets Finite-lived intangible assets are amortized based on the pattern in which the economic benefits are consumed or otherwise depleted. If such a pattern cannot be reliably determined, finite-lived intangible assets are amortized on a straight-line basis over their estimated lives. Management believes that the below estimated useful lives are reasonable based on the economic factors applicable to each class of finite-lived intangible asset. The general range of useful lives is as follows: Customer relationships 5 – 15 years Non-compete agreements 1 – 15 years The Company’s finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of those assets or asset groups may not be recoverable. If the expected undiscounted future cash flows are less than the carrying amount of such assets or asset groups, the Company recognizes an impairment loss to the extent the carrying amount exceeds its estimated fair value. Equity Method Investments The Company applies the equity method of accounting for investments in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, but does not possess a controlling financial interest in the investee. Investments of this nature are recorded at their original cost and adjusted periodically to recognize the Company’s share of its investees’ net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed the carrying amount, the investment balance is reduced to zero. The Company resumes accounting for the investment under the equity method if the investee subsequently reports net income and the Company’s share of that net income exceeds the share of the net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. The Company evaluates its equity method investments for impairment when there is evidence or indicators that a loss in value may be other than temporary. Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements. Deferred tax assets and liabilities are determined on the basis of the differences between the book and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company also recognizes the future tax benefits from net operating loss carryforwards as deferred tax assets. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company evaluates the realizability of deferred tax assets and reduces those assets using a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. Among the factors used to assess the likelihood of realization are projections of future taxable income streams, the expected timing of the reversals of existing temporary differences, and the impact of tax planning strategies that could be implemented to avoid the potential loss of future tax benefits. Reserves for uncertain tax positions are established for exposure items related to various federal and state tax matters. Income tax reserves are recorded when an exposure is identified and when, in the opinion of management, it is more likely than not that a tax position will not be sustained and the amount of the liability can be estimated. Insurance Risk Programs Under a number of the Company’s insurance programs, which include the Company’s employee health insurance, workers’ compensation, and professional malpractice liability insurance programs, the Company is liable for a portion of its losses before it can attempt to recover from the applicable insurance carrier. The Company accrues for losses under an occurrence-based approach whereby the Company estimates the losses that will be incurred in a respective accounting period and accrues that estimated liability using actuarial methods. These programs are monitored quarterly and estimates are revised as necessary to take into account additional information. The Company also records insurance proceeds receivable for liabilities which exceed the Company’s deductibles and self-insured retention limits and are recoverable through its insurance policies. Revenue Recognition Patient Service Revenues Patient service revenues are recognized at an amount equal to the consideration the Company expects to be entitled to in exchange for providing healthcare services to its patients. Amounts owed for services provided are the obligations of the Company’s patients and can be paid for by third-party payors, including health insurers, government programs, and other payors on the patient’s behalf. Most of the Company’s patients are subject to healthcare coverage through a third-party payor arrangement. Given the nature and extent of third-party payor arrangements, the Company disaggregates its revenue by the following payor categories: Medicare : Medicare is a federal program that provides medical insurance benefits to persons age 65 and over, some disabled persons, and persons with end stage renal disease. The Company determines the transaction price for services provided to patients who are Medicare beneficiaries using Medicare’s prospective payment systems and other payment methods. The expected payment is determined by the level of clinical services provided and is sensitive to the patient’s length of stay. Non-Medicare : Non-Medicare payor sources include, but are not limited to, insurance companies (including Medicare Advantage plans), state Medicaid programs, workers’ compensation programs, health maintenance organizations, preferred provider organizations, other managed care companies and employers, as well as patients themselves. The transaction price for services provided to non-Medicare patients include amounts prescribed by state and federal fee schedules, negotiated contract amounts, or usual and customary amounts associated with the specific payor or based on the service provided. The Company applies the portfolio approach in determining revenues for certain homogeneous non-Medicare patient populations. The Company’s principal revenue source comes from providing healthcare services to patients. For patients treated within the Company’s outpatient rehabilitation clinics and Concentra centers, performance obligations are generally satisfied upon completion of the patient’s visit. For patients treated within the Company’s critical illness recovery and rehabilitation hospitals, the Company’s performance obligation is satisfied over the duration of the patient’s stay. As such, the Company recognizes revenue over the patient’s stay in amounts which are commensurate with the level of services provided to the patient. Any differences between the Company’s estimates of the transaction price, which may be impacted by various factors as described further below, and the payment received upon a patient’s discharge would be recognized as revenue in the period in which this change becomes known; such adjustments are not significant. The Company has an obligation to continue delivering treatment to patients admitted in the Company’s critical illness recovery and rehabilitation hospitals at the end of each reporting period. These performance obligations are typically satisfied in the subsequent month following the reporting period. The Company has elected the optional exemption which allows for the exclusion of disclosures regarding the transaction price allocated to unsatisfied performance obligations of contracts with a duration of less than one year. Revenue earned from providing services to patients is variable in nature, as the Company is required to make judgments which impact the transaction price, such as a patient’s condition and length of stay. These factors, among others, impact the payment the Company expects to receive for providing services. Variable consideration included in the transaction price is inclusive of the Company’s estimates of implicit discounts and other adjustments related to timely filing and documentation denials, out of network adjustments, and medical necessity denials, which are estimated using the Company’s historical experience. The Company is also subject to regular post-payment inquiries, investigations, and audits of the claims it submits for services provided. Some claims can take several years for resolution and may result in adjustments to the transaction price. Management includes in its estimates of the transaction price its expectations for these types of adjustments such that the amount of cumulative revenue recognized will not be subject to significant reversal in future periods. Historically, adjustments arising from a change in the transaction price have not been significant. Other Revenues The Company recognizes revenue for other services which principally consist of management and employee leasing services under contractual arrangements with related parties affiliated with the Company and non-affiliated healthcare institutions. The Company accounts for management and employee leasing services as single performance obligations satisfied over time. The transaction price is variable in nature and the Company recognizes revenue in amounts which are commensurate with the level of services provided during the period. The Company’s transaction price is determined such that the amount of cumulative revenue recognized will not be subject to significant reversal in future periods. Recently Adopted Accounting Guidance Reference Rate Reform In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021, the FASB issued 2021-01, Reference Rate Reform (Topic 848), Scope, which further clarified the scope of the reference rate reform optional practical expedients and exceptions outlined in Topic 848. Topic 848 provides temporary relief from some of the existing rules governing contract modifications when the modification is related to the replacement of the London Interbank Offered Rate (“LIBOR”) or other reference rates discontinued as a result of reference rate reform. On March 5, 2021, the Financial Conduct Authority (“FCA”) in the U.K. announced that all LIBOR settings will either cease to be provided or no longer be representative (i) immediately after December 31, 2021, in the case of the one-week and two-month USD LIBOR terms and all sterling, euro, Swiss franc and Japanese yen settings, and (ii) immediately after June 30, 2023, in the case of the one-, three-, six-, and 12-month USD LIBOR terms. For eligible contract modifications, the update generally allows an entity to account for and present modifications as an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. That is, the modified contract is accounted for as a continuation of the existing contract. For cash flow hedging relationships affected by reference rate reform, Topic 848 provides expedients that allow an entity to (i) change the reference rate of either the forecasted transaction or hedging instrument due to reference rate reform without requiring dedesignation of the hedging relationship; (ii) assert that changes to the hedged forecasted transaction due to reference rate reform will not impact whether it remains probable of occurring; and (iii) for the purposes of assessment of hedge effectiveness assume that the reference rate will not be replaced for the remainder of the hedging relationship if both the hedged forecasted transaction and hedging instrument are expected to be impacted by reference rate reform. The standard was effective upon issuance on March 12, 2020, and the optional practical expedients can generally be applied to contract modifications made and hedging relationships entered into on or before December 31, 2022. Borrowings under the Company’s credit agreement bear interest, at the election of Select, based on LIBOR or an alternate base rate. The Company currently elects for its term loan borrowings to bear interest at a rate that is indexed to one-month LIBOR. Provisions within the credit agreement provide the Company with the ability to agree with JPMorgan Chase Bank, N.A., as administrative agent to the lenders, to replace LIBOR with a different reference rate in the event that LIBOR ceases to exist. The Company has not yet agreed upon a different reference rate with JPMorgan Chase Bank, N.A. For the Company’s cash flow hedge, which mitigates the Company’s exposure to increases in the one-month LIBOR rate above 1.0% on $2.0 billion of principal outstanding under the term loan, the Company has elected to assert that the hedged forecasted transaction remains probable of occurring, regardless of a modification or expected modification that may replace one-month LIBOR with a different reference rate. The Company intends to modify the cash flow hedge’s contractual terms related to the replacement of the reference rate, as necessary, to align with the reference rate specified for the Company’s term loan. For the purpose of the assessment of hedge effectiveness, the Company assumes that the reference rate will not be replaced for the remainder of the hedging relationship, as outlined by Topic 848. The Company’s cash flow hedge is described further in Note 12 – Interest Rate Cap. ASU 2020-04 has not had, and the Company does not expect it to have in future periods, a material impact on the Company's consolidated financial statements. Government Assistance In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) , which requires business entities to disclose information about certain government assistance they receive if they account for the transactions by applying a grant or contribution model by analogy (for example, International Financial Reporting Standards (“IFRS”) guidance in International Accounting Standard (“IAS”) 20 or guidance on contributions for not-for-profit entities in Accounting Standards Codification (“ASC”) 958-605). For transactions in the scope of the new standard, business entities will need to provide information about the nature of the transaction and the accounting policy used, the significant terms and conditions associated with the transaction, and the amounts and financial statement line items affected by the transaction. The new guidance is effective for annual reporting periods beginning after December 15, 2021; however, early adoption is permitted. The disclosure requirements can be applied either prospectively or retrospectively. The Company early adopted ASU 2021-10 as of December 31, 2021. ASU 2021-10 did not have an impact on the Company's consolidated financial statements upon adoption. Recent Accounting Guidance Not Yet Adopted Convertible Instruments and Contracts on an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. As part of this update, convertible instruments are to be included in diluted earnings per share using the if-converted method, rather than the treasury stock method. Further, contracts which can be settled in cash or shares, excluding liability-classifie |
Redeemable Non-Controlling Inte
Redeemable Non-Controlling Interests | 12 Months Ended |
Dec. 31, 2021 | |
Noncontrolling Interest [Abstract] | |
Redeemable Non-Controlling Interests | Redeemable Non-Controlling Interests The Company’s redeemable non-controlling interests have been comprised primarily of the voting membership interests owned by outside members of Concentra Group Holdings Parent each which have put rights with respect to their interests in Concentra Group Holdings Parent. The redemption value of the voting membership interests was approximately $368.9 million as of December 31, 2020. There were no voting membership interests owned by outside members of Concentra Group Holdings Parent as of December 31, 2021. The remainder of the Company’s redeemable non-controlling interest balance primarily relates to put rights held by outside partners in eight less than wholly owned subsidiaries. During the year ended December 31, 2020, Select, Welsh, Carson, Anderson & Stowe XII, L.P. (“WCAS”), Dignity Health Holding Corporation (“DHHC”), and other members of Concentra Group Holdings Parent entered into agreements pursuant to which Select acquired additional outstanding membership interests of Concentra Group Holdings Parent. The aggregate purchase price for these interests was $576.4 million. Following these purchases, Select owned approximately 78.0% of the outstanding membership interests of Concentra Group Holdings Parent on a fully diluted basis and approximately 79.8% of the outstanding voting membership interests of Concentra Group Holdings Parent. During the year ended December 31, 2021, Select, WCAS, DHHC, and other members of Concentra Group Holdings Parent entered into agreements pursuant to which Select acquired additional outstanding membership interests of Concentra Group Holdings Parent. The aggregate purchase price for these interests was $660.7 million. Following these purchases, Select owns approximately 99.3% of the outstanding membership interests of Concentra Group Holdings Parent on a fully diluted basis and 100.0% of the outstanding voting membership interests of Concentra Group Holdings Parent. The changes in redeemable non-controlling interests are as follows: For the Year Ended December 31, 2019 2020 2021 (in thousands) Balance as of January 1 $ 780,488 $ 974,541 $ 398,171 Net income attributable to redeemable non-controlling interests 25,956 37,761 50,153 Distributions to and purchases of redeemable non-controlling interests (6,205) (11,255) (911) Redemption value adjustment on redeemable non-controlling interests 172,915 (27,470) 250,083 Purchase of membership interests of Concentra Group Holdings Parent — (576,366) (660,658) Other 1,387 960 2,195 Balance as of December 31 $ 974,541 $ 398,171 $ 39,033 |
Credit Risk and Payor Concentra
Credit Risk and Payor Concentrations | 12 Months Ended |
Dec. 31, 2021 | |
Credit Loss [Abstract] | |
Credit Risk and Payor Concentrations | Credit Risk and Payor Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash balances and accounts receivable. 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. Because of the diversity in the Company’s non-governmental third-party payor base, as well as their geographic dispersion, accounts receivable due from the Medicare program represent the Company’s only significant concentration of credit risk. Approximately 18% and 15% of the Company’s accounts receivable is due from Medicare at December 31, 2020 and 2021, respectively. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions During the year ended December 31, 2019, the Company made acquisitions consisting of critical illness recovery hospital, rehabilitation hospital, outpatient rehabilitation, and Concentra businesses. The consideration given for these acquired businesses consisted principally of $93.7 million of cash and the issuance of $15.1 million of non-controlling interests. The Company allocated the purchase price of these acquired businesses to assets acquired, principally property and equipment, and liabilities assumed based on their estimated fair values. The Company recognized goodwill of $33.6 million, $14.3 million, $13.0 million, and $16.1 million in our critical illness recovery hospital, rehabilitation hospital, outpatient rehabilitation, and Concentra reporting units, respectively. During the year ended December 31, 2020, the Company made acquisitions consisting of critical illness recovery hospital, rehabilitation hospital, outpatient rehabilitation, and Concentra businesses. The consideration given for these acquired businesses consisted principally of $20.8 million of cash. The Company allocated the purchase price of these acquired businesses to assets acquired, principally accounts receivable and property and equipment, and liabilities assumed based on their estimated fair values. The Company recognized goodwill of $6.0 million, $2.5 million, $2.7 million, and $12.3 million in our critical illness recovery hospital, rehabilitation hospital, outpatient rehabilitation, and Concentra reporting units, respectively. During the year ended December 31, 2021, the Company made acquisitions consisting of critical illness recovery hospital, rehabilitation hospital, outpatient rehabilitation, and Concentra businesses. The consideration given for these acquired businesses consisted principally of $89.7 million of cash and the issuance of $11.2 million of non-controlling interests. The Company allocated the purchase price of these acquired businesses to assets acquired, principally cash, accounts receivable, property and equipment, and operating lease right-of-use assets, and liabilities assumed based on their estimated fair values. The Company recognized goodwill of $46.7 million, $9.4 million, $7.7 million, and $8.6 million in our critical illness recovery hospital, rehabilitation hospital, outpatient rehabilitation, and Concentra reporting units, respectively. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest EntitiesAs of December 31, 2020 and 2021, the total assets of the Company’s variable interest entities were $208.4 million and $225.1 million, respectively, and are principally comprised of accounts receivable. As of December 31, 2020 and 2021, the total liabilities of the Company’s variable interest entities were $55.1 million and $74.8 million, respectively, and are principally comprised of accounts payable and accrued expenses. These variable interest entities have obligations payable for services received under their management agreements with the Company of $151.8 million and $150.3 million as of December 31, 2020 and 2021, respectively. These intercompany balances are eliminated in consolidation. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases The Company has operating and finance leases for its facilities. 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 The Company’s total lease cost is as follows: For the Year Ended December 31, 2019 2020 2021 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total (in thousands) Operating lease cost $ 271,799 $ 5,498 $ 277,297 $ 278,945 $ 7,118 $ 286,063 $ 283,595 $ 7,186 $ 290,781 Finance lease cost: Amortization of right-of-use assets 258 — 258 452 — 452 647 — 647 Interest on lease liabilities 812 — 812 1,011 — 1,011 1,142 — 1,142 Short-term lease cost 2,171 — 2,171 — — — 269 — 269 Variable lease cost 43,096 553 43,649 49,409 580 49,989 52,666 426 53,092 Sublease income (9,822) — (9,822) (9,814) — (9,814) (8,955) — (8,955) Total lease cost $ 308,314 $ 6,051 $ 314,365 $ 320,003 $ 7,698 $ 327,701 $ 329,364 $ 7,612 $ 336,976 Supplemental cash flow information related to leases is as follows: For the Year Ended December 31, 2019 2020 2021 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 274,095 $ 280,263 $ 294,576 Operating cash flows for finance leases 777 1,011 1,142 Financing cash flows for finance leases 225 140 616 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (1) 1,275,575 256,697 284,657 Finance leases 9,102 1,220 4,545 _______________________________________________________________________________ (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 during the year ended December 31, 2019. Supplemental balance sheet information related to leases is as follows: December 31, 2020 2021 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total Operating Leases (in thousands) Operating lease right-of-use assets $ 1,002,151 $ 30,066 $ 1,032,217 $ 1,052,603 $ 26,151 $ 1,078,754 Current operating lease liabilities $ 214,377 $ 6,036 $ 220,413 $ 222,865 $ 6,469 $ 229,334 Non-current operating lease liabilities 848,215 27,152 875,367 894,104 22,436 916,540 Total operating lease liabilities $ 1,062,592 $ 33,188 $ 1,095,780 $ 1,116,969 $ 28,905 $ 1,145,874 December 31, 2020 2021 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total Finance Leases (in thousands) Property and equipment, net $ 5,644 $ — $ 5,644 $ 8,505 $ — $ 8,505 Current portion of long-term debt and notes payable $ 663 $ — $ 663 $ 1,404 $ — $ 1,404 Long-term debt, net of current portion 13,491 — 13,491 16,679 — 16,679 Total finance lease liabilities $ 14,154 $ — $ 14,154 $ 18,083 $ — $ 18,083 The weighted average remaining lease terms and discount rates are as follows: December 31, 2020 2021 Weighted average remaining lease term (in years): Operating leases 7.8 7.8 Finance leases 31.2 24.7 Weighted average discount rate: Operating leases 5.6 % 5.6 % Finance leases 7.2 % 7.4 % As of December 31, 2021, maturities of lease liabilities are approximately as follows: Operating Leases Finance Leases (in thousands) 2022 $ 284,359 $ 2,724 2023 240,346 2,747 2024 200,347 2,384 2025 162,649 2,101 2026 133,483 2,126 Thereafter 468,921 28,181 Total undiscounted cash flows 1,490,105 40,263 Less: Imputed interest 344,231 22,180 Total discounted lease liabilities $ 1,145,874 $ 18,083 |
Leases | Leases The Company has operating and finance leases for its facilities. 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 The Company’s total lease cost is as follows: For the Year Ended December 31, 2019 2020 2021 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total (in thousands) Operating lease cost $ 271,799 $ 5,498 $ 277,297 $ 278,945 $ 7,118 $ 286,063 $ 283,595 $ 7,186 $ 290,781 Finance lease cost: Amortization of right-of-use assets 258 — 258 452 — 452 647 — 647 Interest on lease liabilities 812 — 812 1,011 — 1,011 1,142 — 1,142 Short-term lease cost 2,171 — 2,171 — — — 269 — 269 Variable lease cost 43,096 553 43,649 49,409 580 49,989 52,666 426 53,092 Sublease income (9,822) — (9,822) (9,814) — (9,814) (8,955) — (8,955) Total lease cost $ 308,314 $ 6,051 $ 314,365 $ 320,003 $ 7,698 $ 327,701 $ 329,364 $ 7,612 $ 336,976 Supplemental cash flow information related to leases is as follows: For the Year Ended December 31, 2019 2020 2021 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 274,095 $ 280,263 $ 294,576 Operating cash flows for finance leases 777 1,011 1,142 Financing cash flows for finance leases 225 140 616 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (1) 1,275,575 256,697 284,657 Finance leases 9,102 1,220 4,545 _______________________________________________________________________________ (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 during the year ended December 31, 2019. Supplemental balance sheet information related to leases is as follows: December 31, 2020 2021 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total Operating Leases (in thousands) Operating lease right-of-use assets $ 1,002,151 $ 30,066 $ 1,032,217 $ 1,052,603 $ 26,151 $ 1,078,754 Current operating lease liabilities $ 214,377 $ 6,036 $ 220,413 $ 222,865 $ 6,469 $ 229,334 Non-current operating lease liabilities 848,215 27,152 875,367 894,104 22,436 916,540 Total operating lease liabilities $ 1,062,592 $ 33,188 $ 1,095,780 $ 1,116,969 $ 28,905 $ 1,145,874 December 31, 2020 2021 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total Finance Leases (in thousands) Property and equipment, net $ 5,644 $ — $ 5,644 $ 8,505 $ — $ 8,505 Current portion of long-term debt and notes payable $ 663 $ — $ 663 $ 1,404 $ — $ 1,404 Long-term debt, net of current portion 13,491 — 13,491 16,679 — 16,679 Total finance lease liabilities $ 14,154 $ — $ 14,154 $ 18,083 $ — $ 18,083 The weighted average remaining lease terms and discount rates are as follows: December 31, 2020 2021 Weighted average remaining lease term (in years): Operating leases 7.8 7.8 Finance leases 31.2 24.7 Weighted average discount rate: Operating leases 5.6 % 5.6 % Finance leases 7.2 % 7.4 % As of December 31, 2021, maturities of lease liabilities are approximately as follows: Operating Leases Finance Leases (in thousands) 2022 $ 284,359 $ 2,724 2023 240,346 2,747 2024 200,347 2,384 2025 162,649 2,101 2026 133,483 2,126 Thereafter 468,921 28,181 Total undiscounted cash flows 1,490,105 40,263 Less: Imputed interest 344,231 22,180 Total discounted lease liabilities $ 1,145,874 $ 18,083 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment The Company’s property and equipment consists of the following: December 31, 2020 2021 (in thousands) Land $ 93,756 $ 95,912 Leasehold improvements 562,734 620,367 Buildings 552,796 574,916 Furniture and equipment 704,430 728,072 Construction-in-progress 62,748 79,722 Total property and equipment 1,976,464 2,098,989 Accumulated depreciation (1,033,044) (1,137,522) Property and equipment, net $ 943,420 $ 961,467 Depreciation expense was $182.9 million, $178.0 million, and $173.2 million for the years ended December 31, 2019, 2020, and 2021, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
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 years ended December 31, 2020 and 2021: Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Total (in thousands) Balance as of January 1, 2020 $ 1,078,804 $ 430,900 $ 649,763 $ 1,232,488 $ 3,391,955 Acquisition of businesses 5,957 2,481 2,704 12,287 23,429 Measurement period adjustment — — — (20) (20) Sale of businesses — (628) (6,034) (29,688) (36,350) Balance as of December 31, 2020 1,084,761 432,753 646,433 1,215,067 3,379,014 Acquisition of businesses 46,679 9,402 7,692 8,645 72,418 Sale of businesses — — — (2,520) (2,520) Balance as of December 31, 2021 $ 1,131,440 $ 442,155 $ 654,125 $ 1,221,192 $ 3,448,912 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, 2020 2021 Gross Accumulated Net Gross Accumulated Net (in thousands) Indefinite-lived intangible assets: Trademarks $ 166,698 $ — $ 166,698 $ 166,698 $ — $ 166,698 Certificates of need 18,392 — 18,392 21,478 — 21,478 Accreditations 1,874 — 1,874 1,874 — 1,874 Finite-lived intangible assets: Trademarks 5,000 (5,000) — 5,000 (5,000) — Customer relationships 291,923 (113,346) 178,577 304,289 (141,111) 163,178 Non-compete agreements 33,771 (11,771) 22,000 36,746 (15,095) 21,651 Total identifiable intangible assets $ 517,658 $ (130,117) $ 387,541 $ 536,085 $ (161,206) $ 374,879 The Company’s accreditations and trademarks have renewal terms and the costs to renew these intangible assets are expensed as incurred. At December 31, 2021, the accreditations and trademarks have a weighted average time until next renewal of 1.5 years and 7.7 years, respectively. The Company’s finite-lived intangible assets amortize over their estimated useful lives. Amortization expense was $29.6 million, $27.6 million, and $29.5 million for the years ended December 31, 2019, 2020, and 2021, respectively. Estimated amortization expense of the Company’s finite-lived intangible assets for each of the five succeeding years is as follows: 2022 2023 2024 2025 2026 (in thousands) Amortization expense $ 30,131 $ 29,264 $ 20,674 $ 14,237 $ 13,452 |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments The Company’s equity method investments consist principally of minority ownership interests in rehabilitation businesses. Equity method investments of $251.1 million and $270.8 million are presented as part of other assets in the consolidated balance sheets as of December 31, 2020 and 2021, respectively. At December 31, 2021, these businesses primarily consist of the following ownership interests: BIR JV, LLP 49.0 % OHRH, LLC 49.0 % GlobalRehab—Scottsdale, LLC 49.0 % ES Rehabilitation, LLC 49.0 % BHSM Rehabilitation, LLC 49.0 % The Company provides contracted services, principally employee leasing services, and charges management fees to related parties affiliated through its equity method investments. Revenue generated from contracted services provided and management fees charged to related parties affiliated through the Company’s equity method investments was $308.2 million, $337.6 million, and $332.0 million for the years ended December 31, 2019, 2020, and 2021, respectively. The Company had receivables from related parties affiliated through its equity method investments of $13.7 million and $2.5 million, which are included as part of other current assets and other assets in the consolidated balance sheet, respectively, as of December 31, 2020. The Company has receivables from related parties of $23.9 million and $3.5 million, which are included as part of other current assets and other assets in the consolidated balance sheet, respectively, as of December 31, 2021. The Company had liabilities for the operating cash it holds on behalf of certain rehabilitation businesses in which it has an equity method investment. These liabilities were $30.6 million and $22.0 million as of December 31, 2020 and 2021, respectively, and are included as part of accrued other in the consolidated balance sheets. Summarized combined financial information of the rehabilitation businesses in which the Company has a minority ownership interest is as follows: December 31, 2020 2021 (in thousands) Current assets $ 189,571 $ 181,838 Non-current assets 334,372 356,278 Total assets $ 523,943 $ 538,116 Current liabilities $ 96,980 $ 89,953 Non-current liabilities 118,312 103,484 Equity 308,651 344,679 Total liabilities and equity $ 523,943 $ 538,116 For the Year Ended December 31, 2019 2020 2021 (in thousands) Revenues $ 536,464 $ 562,031 $ 587,445 Cost of services and other operating expenses 476,182 496,739 503,880 Net income 58,519 72,172 87,528 |
Insurance Risk Programs
Insurance Risk Programs | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Insurance Risk Programs | Insurance Risk Programs Under a number of the Company’s insurance programs, which include the Company’s employee health insurance, workers’ compensation, and professional malpractice liability insurance programs, the Company is liable for a portion of its losses before it can attempt to recover from the applicable insurance carrier. The Company accrues for losses under an occurrence-based approach whereby the Company estimates the losses that will be incurred in a respective accounting period and accrues that estimated liability using actuarial methods. At December 31, 2020 and 2021, provisions for losses for professional liability risks retained by the Company have been discounted at 3%. The Company recorded a liability of $173.6 million and $173.5 million related to these programs at December 31, 2020 and 2021, respectively. If the Company did not discount the provisions for losses for professional liability risks, the aggregate liability for all of the insurance risk programs would be approximately $178.4 million and $178.5 million at December 31, 2020 and 2021, respectively. At December 31, 2020 and 2021, the Company recorded insurance proceeds receivable of $13.0 million and $14.5 million, respectively, for liabilities which exceeded its deductibles and self-insured retention limits and are recoverable through its insurance policies. |
Long-Term Debt and Notes Payabl
Long-Term Debt and Notes Payable | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Notes Payable | Long-Term Debt and Notes Payable As of December 31, 2021, the Company’s long-term debt and notes payable are as follows: Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value (in thousands) 6.250% senior notes $ 1,225,000 $ 27,635 $ (13,951) $ 1,238,684 $ 1,297,104 Credit facilities: Revolving facility 160,000 — — 160,000 159,400 Term loan 2,103,437 (6,386) (6,961) 2,090,090 2,087,661 Other debt, including finance leases 85,398 — (215) 85,183 85,183 Total debt $ 3,573,835 $ 21,249 $ (21,127) $ 3,573,957 $ 3,629,348 Principal maturities of the Company’s long-term debt and notes payable are approximately as follows: 2022 2023 2024 2025 2026 Thereafter Total (in thousands) 6.250% senior notes $ — $ — $ — $ — $ 1,225,000 $ — $ 1,225,000 Credit facilities: Revolving facility — — 160,000 — — — 160,000 Term loan — 4,757 11,150 2,087,530 — — 2,103,437 Other debt, including finance leases 17,572 27,072 26,081 1,824 1,286 11,563 85,398 Total debt $ 17,572 $ 31,829 $ 197,231 $ 2,089,354 $ 1,226,286 $ 11,563 $ 3,573,835 As of December 31, 2020, the Company’s long-term debt and notes payable are as follows: Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value (in thousands) 6.250% senior notes $ 1,225,000 $ 33,773 $ (16,953) $ 1,241,820 $ 1,316,875 Credit facilities: Term loan 2,103,437 (8,393) (9,149) 2,085,895 2,082,403 Other debt, including finance leases 74,606 — (302) 74,304 74,304 Total debt $ 3,403,043 $ 25,380 $ (26,404) $ 3,402,019 $ 3,473,582 Credit Facilities On March 6, 2017, Select entered into a senior secured credit agreement (the “credit agreement”). The credit agreement provided for $2,265.0 million in term loan borrowings (the “term loan”) and a $450.0 million revolving credit facility (the “revolving facility” and, together with the term loan, the “credit facilities”), including a $75.0 million sublimit for the issuance of standby letters of credit. On June 2, 2021, Select entered into Amendment No. 5 to its credit agreement which, among other things, increased the aggregate commitments available under its revolving facility from $450.0 million to $650.0 million, including a $125.0 million sublimit for the issuance of standby letters of credit. At December 31, 2021, Select had $434.7 million of availability under the revolving facility after giving effect to $160.0 million of outstanding borrowings and $55.3 million of outstanding letters of credit. The term loan and the revolving facility are due March 6, 2025 and March 6, 2024, respectively. The interest rates on the term loan and the revolving facility are equal to the Adjusted LIBO Rate (as defined in the credit agreement) plus a percentage ranging from 2.25% to 2.50%, or the Alternate Base Rate (as defined in the credit agreement) plus a percentage ranging from 1.25% to 1.50%, in each case subject to a specified leverage ratio. As of December 31, 2021, the term loan borrowings bear interest at a rate that is indexed to one-month LIBOR plus 2.25%. As of December 31, 2021, the revolving facility borrowings bear interest either at a rate indexed to one-month LIBOR plus 2.25% or the Alternate Base Rate plus 1.25%. The revolving facility requires Select to maintain a leverage ratio, as specified in the credit agreement, not to exceed 7.00 to 1.00. As of December 31, 2021, Select’s leverage ratio was 3.77 to 1.00. Borrowings under the credit facilities are guaranteed by Holdings and substantially all of Select’s current domestic subsidiaries, other than certain non-guarantor subsidiaries including Concentra and its subsidiaries, and will be guaranteed by substantially all of Select’s future domestic subsidiaries. Borrowings under the credit facilities are secured by substantially all of Select’s existing and future property and assets and by a pledge of Select’s capital stock, the capital stock of Select’s domestic subsidiaries, other than certain non-guarantor subsidiaries including Concentra and its subsidiaries, and up to 65% of the capital stock of Select’s foreign subsidiaries held directly by Select or a domestic subsidiary. Prepayment of Borrowings Select will be required to prepay borrowings under the credit facilities with (i) the net cash proceeds received from non-ordinary course asset sales or other dispositions, or as a result of a casualty or condemnation, subject to reinvestment provisions and other customary carveouts and, to the extent required, the payment of certain indebtedness secured by liens having priority over the debt under the credit facilities or subject to a first lien intercreditor agreement, (ii) the net cash proceeds received from the issuance of debt obligations other than certain permitted debt obligations, and (iii) a percentage of excess cash flow (as defined in the credit agreement) based on Select’s leverage ratio, as specified in the credit agreement. The Company will not be required to make a prepayment of borrowings as a result of excess cash flow for the year ended December 31, 2021. 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. On December 10, 2019, Select issued and sold $675.0 million aggregate principal amount of 6.250% senior notes, due August 15, 2026, as additional notes under the indenture pursuant to which it previously issued $550.0 million aggregate principal amount of senior notes. The additional senior notes were issued at 106.00% of the aggregate principal amount. 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 its 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, including Concentra and its subsidiaries. Prior to August 15, 2022, Select may redeem some or all of the senior notes by paying a “make-whole” premium. On or after August 15, 2022, Select may redeem some or all of the senior notes 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. Concentra-JPM Revolving Facility On June 1, 2015, Concentra Inc. entered into a first lien credit agreement (the “Concentra-JPM first lien credit agreement”). The Concentra-JPM first lien credit agreement provided for availability of up to $100.0 million under a revolving credit facility (the “Concentra-JPM revolving facility”), which would mature on March 1, 2022. On June 2, 2021, Concentra Inc. terminated its obligations under the Concentra-JPM first lien credit agreement. Loss on Early Retirement of Debt During the year ended December 31, 2019, the Company refinanced its senior notes, credit facilities, and the Concentra-JPM first and second lien credit agreements which resulted in losses on early retirement of debt of $38.1 million. The losses on early retirement of debt consisted of $22.1 million of debt extinguishment losses and $16.0 million of debt modification losses. |
Interest Rate Cap
Interest Rate Cap | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Cap | Interest Rate Cap The Company is subject to market risk exposure arising from changes in interest rates on its term loan, which bears interest at a rate that is indexed to one-month LIBOR, as discussed further in Note 11 – Long-Term Debt and Notes Payable. The Company’s objective in using an interest rate derivative is to mitigate its exposure to increases in interest rates. The interest rate cap limits the Company’s exposure to increases in the one-month LIBOR rate to 1.0% on $2.0 billion of principal outstanding under the term loan, as the interest rate cap provides for payments from the counterparty when interest rates rise above 1.0%. The interest rate cap has a $2.0 billion notional amount and became effective March 31, 2021 for the monthly periods from and including April 30, 2021 through September 30, 2024. The Company will pay a monthly premium for the interest rate cap over the term of the agreement. The annual premium is equal to 0.0916% on the notional amount. The interest rate cap has been designated as a cash flow hedge and is highly effective at offsetting the changes in cash outflows when one-month LIBOR exceeds 1.0%. Changes in the fair value of the interest rate cap, net of tax, are recognized in other comprehensive income and are reclassified out of accumulated other comprehensive income or loss (“AOCI”) and into interest expense when the hedged interest obligations affect earnings. The following table outlines the changes in AOCI, net of tax, during the periods presented: For the Year Ended December 31, 2019 2020 2021 (in thousands) Beginning balance $ — $ — $ (2,027) Gain (loss) on interest rate cap cash flow hedge — (2,027) 14,270 Amounts reclassified from AOCI — — 39 Ending balance $ — $ (2,027) $ 12,282 The Company expects that approximately $1.0 million of estimated pre-tax gains will be reclassified from AOCI into interest expense within the next twelve months. Refer to Note 13 – Fair Value of Financial Instruments for information on the fair value of the Company’s interest rate cap contract and its balance sheet classification. Refer to Note 1 – Organization and Significant Accounting Policies for the Company’s considerations regarding reference rate reform and the impact to its interest rate cap contract. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial instruments which are measured at fair value, or for which a fair value is disclosed, are classified in the fair value hierarchy, as outlined below, on the basis of the observability of the inputs used in the fair value measurement: • Level 1 – inputs are based upon quoted prices for identical instruments in active markets. • Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data. • Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the instrument. The Company’s interest rate cap contract is recorded at its fair value in the consolidated balance sheets on a recurring basis. The fair value of the interest rate cap contract is based upon a model-derived valuation using observable market inputs, such as interest rates and interest rate volatility, and the strike price. December 31, Financial Instrument Balance Sheet Classification Level 2020 2021 (in thousands) Asset: Interest rate cap contract, non-current portion Other assets Level 2 $ — $ 18,055 Liability: Interest rate cap contract, current portion Accrued other Level 2 $ 1,339 $ 330 Interest rate cap contract, non-current portion Other non-current liabilities Level 2 1,392 — The Company does not measure its indebtedness at fair value in its consolidated balance sheets. The fair value of the credit facilities is based on quoted market prices for this debt in the syndicated loan market. The fair value of the senior notes is based on quoted market prices. The carrying value of the Company’s other debt, as disclosed in Note 11 – Long-Term Debt and Notes Payable, approximates fair value. December 31, 2020 December 31, 2021 Financial Instrument Level Carrying Value Fair Value Carrying Value Fair Value (in thousands) 6.250% senior notes Level 2 $ 1,241,820 $ 1,316,875 $ 1,238,684 $ 1,297,104 Credit facilities: Revolving facility Level 2 — — 160,000 159,400 Term loan Level 2 2,085,895 2,082,403 2,090,090 2,087,661 |
Stock Repurchase Program
Stock Repurchase Program | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stock Repurchase Program | Stock Repurchase ProgramHoldings’ board of directors has authorized a common stock repurchase program to repurchase up to $1.0 billion worth of shares of its common stock. The program is in effect until December 31, 2023, unless extended or earlier terminated by the board of directors. Stock repurchases under this program may be made in the open market or through privately negotiated transactions, and at times and in such amounts as Holdings deems appropriate. Holdings is funding this program with cash on hand and borrowings under the revolving facility. The common stock repurchase program has available capacity of $584.8 million as of December 31, 2021. The share repurchases and the cost associated with those repurchases are as follows: For the Year Ended December 31, 2019 2020 2021 Shares repurchased 2,165,221 491,559 1,770,720 Cost of shares repurchased (in thousands) $ 33,163 $ 8,692 $ 58,598 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company identifies its segments according to how the chief operating decision maker evaluates financial performance and allocates resources. The Company’s reportable segments consist of 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 provided to related parties affiliated through the Company’s equity method investments. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. For the years ended December 31, 2020 and 2021, the Company’s other activities also include other operating income related to the recognition of payments received under the Provider Relief Fund for health care related expenses and loss of revenue attributable to the coronavirus disease 2019 (“COVID-19”). Refer to Note 22 – CARES Act for further information. The Company evaluates the performance of its 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. For the Year Ended December 31, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Revenue $ 1,836,518 $ 670,971 $ 1,046,011 $ 1,628,817 $ 271,605 $ 5,453,922 Adjusted EBITDA 254,868 135,857 151,831 276,482 (108,130) 710,908 Total assets 2,099,833 1,127,028 1,289,190 2,372,187 452,050 7,340,288 Capital expenditures 45,573 27,216 33,628 44,101 6,608 157,126 For the Year Ended December 31, 2020 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Revenue $ 2,077,499 $ 734,673 $ 919,913 $ 1,501,434 $ 298,194 $ 5,531,713 Adjusted EBITDA 342,427 153,203 79,164 252,892 (27,120) 800,566 Total assets 2,213,892 1,148,617 1,302,110 2,400,646 590,134 7,655,399 Capital expenditures 49,726 7,571 28,876 50,114 10,153 146,440 For the Year Ended December 31, 2021 Critical Illness Recovery Hospitals Rehabilitation Hospitals Outpatient Concentra Other Total (in thousands) Revenue $ 2,246,772 $ 849,340 $ 1,084,361 $ 1,732,041 $ 292,001 $ 6,204,515 Adjusted EBITDA 267,993 184,704 138,275 389,616 (33,229) 947,359 Total assets 2,304,116 1,194,136 1,348,316 2,275,345 238,258 7,360,171 Capital expenditures 65,690 13,003 36,301 46,787 18,756 180,537 A reconciliation of Adjusted EBITDA to income before income taxes is as follows: For the Year Ended December 31, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ 254,868 $ 135,857 $ 151,831 $ 276,482 $ (108,130) Depreciation and amortization (50,763) (27,322) (28,301) (96,807) (9,383) Stock compensation expense — — — (3,069) (23,382) Income (loss) from operations $ 204,105 $ 108,535 $ 123,530 $ 176,606 $ (140,895) $ 471,881 Loss on early retirement of debt (38,083) Equity in earnings of unconsolidated subsidiaries 24,989 Gain on sale of businesses 6,532 Interest expense (200,570) Income before income taxes $ 264,749 For the Year Ended December 31, 2020 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ 342,427 $ 153,203 $ 79,164 $ 252,892 $ (27,120) Depreciation and amortization (51,531) (27,727) (29,009) (87,865) (9,527) Stock compensation expense — — — (2,512) (24,738) Income (loss) from operations $ 290,896 $ 125,476 $ 50,155 $ 162,515 $ (61,385) $ 567,657 Equity in earnings of unconsolidated subsidiaries 29,440 Gain on sale of businesses 12,387 Interest expense (153,011) Income before income taxes $ 456,473 For the Year Ended December 31, 2021 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ 267,993 $ 184,704 $ 138,275 $ 389,616 $ (33,229) Depreciation and amortization (53,094) (27,677) (29,592) (82,210) (10,072) Stock compensation expense — — — (2,142) (28,798) Income (loss) from operations $ 214,899 $ 157,027 $ 108,683 $ 305,264 $ (72,099) $ 713,774 Equity in earnings of unconsolidated subsidiaries 44,428 Gain on sale of businesses 2,155 Interest income 5,350 Interest expense (135,985) Income before income taxes $ 629,722 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The following tables disaggregate the Company’s revenue: For the Year Ended December 31, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Patient service revenue: Medicare $ 907,963 $ 332,514 $ 171,690 $ 1,965 $ — $ 1,414,132 Non-Medicare 916,650 300,113 794,288 1,615,529 — 3,626,580 Total patient services revenue 1,824,613 632,627 965,978 1,617,494 — 5,040,712 Other revenue 11,905 38,344 80,033 11,323 271,605 413,210 Total revenue $ 1,836,518 $ 670,971 $ 1,046,011 $ 1,628,817 $ 271,605 $ 5,453,922 For the Year Ended December 31, 2020 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Patient service revenue: Medicare $ 900,593 $ 345,642 $ 137,447 $ 1,284 $ — $ 1,384,966 Non-Medicare 1,164,410 349,530 719,600 1,488,976 — 3,722,516 Total patient services revenue 2,065,003 695,172 857,047 1,490,260 — 5,107,482 Other revenue 12,496 39,501 62,866 11,174 298,194 424,231 Total revenue $ 2,077,499 $ 734,673 $ 919,913 $ 1,501,434 $ 298,194 $ 5,531,713 For the Year Ended December 31, 2021 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Patient service revenue: Medicare $ 833,387 $ 412,440 $ 172,064 $ 1,079 $ — $ 1,418,970 Non-Medicare 1,401,414 394,809 843,803 1,723,804 — 4,363,830 Total patient services revenue 2,234,801 807,249 1,015,867 1,724,883 — 5,782,800 Other revenue 11,971 42,091 68,494 7,158 292,001 421,715 Total revenue $ 2,246,772 $ 849,340 $ 1,084,361 $ 1,732,041 $ 292,001 $ 6,204,515 |
Sale of Businesses
Sale of Businesses | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of Businesses | Sale of Businesses The Company recognized a gain of $6.5 million during the year ended December 31, 2019. The gain resulted principally from the sale of outpatient rehabilitation businesses to equity method investees. During the year ended December 31, 2020, the Company sold three businesses, including Concentra’s Department of Veterans Affairs community-based outpatient clinic business, for a total selling price of approximately $87.0 million, which excludes transaction expenses and certain other adjustments set forth in each respective purchase agreement. These sales resulted in gains of approximately $21.4 million. During the year ended December 31, 2020, the Company also accrued a liability and incurred a loss of $9.0 million related to the indemnity provision associated with a previously sold business. The Company paid the $9.0 million during the year ended December 31, 2021. The Company recognized a gain of $2.2 million during the year ended December 31, 2021. The gain resulted from the sale of a Concentra business. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation Holdings’ equity incentive plan provides for the issuance of various stock-based awards. Under its current plan, Holdings has issued restricted stock awards. The equity plan currently allows for the issuance of 7,502,000 awards, as adjusted for cancelled or forfeited awards through December 31, 2021. As of December 31, 2021, Holdings has capacity to issue 4,660,593 stock-based awards under its equity plan. The equity plan allows for authorized but previously unissued shares or shares previously issued and outstanding and reacquired by Holdings to satisfy these awards. The Company measures the compensation costs of stock-based compensation arrangements based on the grant-date fair value and recognizes the costs over the period during which employees are required to provide services. Restricted stock awards are valued using the closing market price of Holdings’ stock on the date of grant. These restricted stock awards generally vest over three Transactions related to restricted stock awards are as follows: Shares Weighted Average (share amounts in thousands) Unvested balance, January 1, 2021 4,523 $ 17.74 Granted 1,363 38.59 Vested (1,409) 19.57 Forfeited (18) 15.88 Unvested balance, December 31, 2021 4,459 $ 23.54 For the years ended December 31, 2019, 2020, and 2021, the weighted average grant date fair values of restricted stock awards granted were $16.60, $17.17, and $38.59, respectively. For the years ended December 31, 2019, 2020, and 2021, the fair values of restricted stock awards vested were $15.6 million, $22.2 million, and $27.6 million, respectively. For the year ended December 31, 2019, the intrinsic value of stock options exercised was $0.7 million. Holdings did not have any stock options outstanding or exercisable during the years ended December 31, 2020 and 2021. Stock compensation expense recognized by the Company is as follows: For the Year Ended December 31, 2019 2020 2021 (in thousands) Stock compensation expense: Included in general and administrative $ 20,334 $ 22,053 $ 24,598 Included in cost of services 6,117 5,197 6,342 Total $ 26,451 $ 27,250 $ 30,940 Future stock compensation expense based on current stock-based awards is estimated to be as follows: 2022 2023 2024 2025 2026 (in thousands) Stock compensation expense $ 31,762 $ 21,749 $ 11,990 $ 2,093 $ 60 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of the Company’s income tax expense for the years ended December 31, 2019, 2020, and 2021 are as follows: For the Year Ended December 31, 2019 2020 2021 (in thousands) Current income tax expense: Federal $ 55,822 $ 95,633 $ 99,254 State and local 15,331 30,949 25,464 Total current income tax expense 71,153 126,582 124,718 Deferred income tax expense (benefit) (7,435) (14,715) 5,055 Total income tax expense $ 63,718 $ 111,867 $ 129,773 Reconciliations of the statutory federal income tax rate to the effective income tax rate are as follows: For the Year Ended December 31, 2019 2020 2021 Federal income tax at statutory rate 21.0 % 21.0 % 21.0 % State and local income taxes, less federal income tax benefit 4.2 5.8 4.2 Permanent differences 0.4 0.5 0.5 Deferred income taxes - state income tax rate adjustment 0.8 0.0 (1.2) Uncertain tax positions (0.1) (0.1) 0.0 Valuation allowance 0.5 0.0 0.2 Limitation on Officers’ compensation 1.3 1.1 0.9 Stock-based compensation (0.7) (1.4) (1.7) Non-controlling interest (2.9) (3.3) (1.9) Other (0.4) 0.9 (1.4) Effective income tax rate 24.1 % 24.5 % 20.6 % The Company’s deferred tax assets and liabilities are as follows: December 31, 2020 2021 (in thousands) Deferred tax assets Implicit discounts and adjustments $ 13,825 $ 13,058 Compensation and benefit-related accruals 54,464 57,604 Professional malpractice liability insurance 17,330 18,462 Deferred revenue 163 95 Federal and state net operating loss and state tax credit carryforwards 34,417 38,022 Interest limitation carryforward 686 494 Stock awards 3,638 4,285 Equity investments 4,627 4,414 Operating lease liabilities 223,875 230,416 CARES Act employer payroll tax deferral 23,001 11,594 Derivatives 705 — Other 2,489 4,850 Deferred tax assets $ 379,220 $ 383,294 Valuation allowance (17,339) (17,773) Deferred tax assets, net of valuation allowance $ 361,881 $ 365,521 Deferred tax liabilities Deferred income $ (4,595) $ — Investment in unconsolidated affiliates (10,401) (12,606) Depreciation and amortization (238,655) (245,859) Deferred financing costs (5,003) (3,696) Operating lease right-of-use assets (210,045) (215,640) Derivatives — (4,094) Other (4,844) (4,252) Deferred tax liabilities $ (473,543) $ (486,147) Deferred tax liabilities, net of deferred tax assets $ (111,662) $ (120,626) The Company’s deferred tax assets and liabilities are included in the consolidated balance sheet captions as follows: December 31, 2020 2021 (in thousands) Other assets $ 20,759 $ 22,166 Non-current deferred tax liability (132,421) (142,792) $ (111,662) $ (120,626) The CARES Act, which was enacted on March 27, 2020, includes changes to certain tax law related to net operating losses and the deductibility of interest expense and depreciation. The effects of changes in tax rates and laws on deferred tax balances are recognized in the period in which the legislation was enacted. In 2020, 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. This resulted from bonus depreciation on certain types of qualified property for tax years beginning January 1, 2018, and the provision for an increase in the amounts allowed for interest expense deductions for tax years beginning January 1, 2019. The legislation related to net operating losses did not impact the Company’s deferred tax balances. The CARES Act also allowed eligible employers to defer payment on their share of payroll taxes otherwise required to be deposited between March 27, 2020 and December 31, 2020, as described further in Note 22 – CARES Act. In 2020, this legislation had the effect of decreasing the Company’s deferred income taxes and increasing its current income taxes payable by approximately $23.0 million. In 2021, the Company paid 50% of the deferred payroll tax amount as mandated by the CARES Act. This increased the Company’s deferred income taxes and decreased its current income taxes payable by approximately $11.5 million. Payment of the remaining 50% is required by December 31, 2022. As of December 31, 2020 and 2021, the Company’s valuation allowance is primarily attributable to the uncertainty regarding the realization of state net operating losses and other net deferred tax assets of loss entities. The state net deferred tax assets have a full valuation allowance recorded for entities that have a cumulative history of pre-tax losses (current year in addition to the two prior years). For the year ended December 31, 2020, the Company recorded a net valuation allowance decrease of $1.1 million. These changes resulted from net changes in state net operating losses, as well as the sale of a business. For the year ended December 31, 2021, the Company recorded a net valuation allowance increase of $0.4 million. These changes resulted from net changes in state net operating losses. The changes in the Company’s valuation allowance were recognized as a result of management’s reassessment of the amount of its deferred tax assets that are more likely than not to be realized. At December 31, 2020 and 2021, the Company’s net deferred tax liabilities of approximately $111.7 million and $120.6 million, respectively, consist of items which have been recognized for tax reporting purposes, but which will increase tax on returns to be filed in the future. The Company has performed an assessment of positive and negative evidence regarding the realization of the net deferred tax assets. This assessment included a review of legal entities with three years of cumulative losses, estimates of projected future taxable income, the effect on future taxable income resulting from the reversal of existing deferred tax liabilities in future periods, and the impact of tax planning strategies that management would and could implement in order to keep deferred tax assets from expiring unused. Although realization is not assured, based on the Company’s assessment, it has concluded that it is more likely than not that such assets, net of the determined valuation allowance, will be realized. The total state net operating losses are approximately $620.3 million. State net operating loss carryforwards expire and are subject to valuation allowances as follows: State Net Operating Losses Gross Valuation Allowance (in thousands) 2022 $ 25,823 $ 9,755 2023 16,718 8,636 2024 25,737 8,761 2025 36,614 7,743 Thereafter through 2040 515,430 305,621 |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The following table sets forth the net income attributable to the Company, its common shares outstanding, and its participating securities outstanding. There were no contractual dividends paid for the years ended December 31, 2019, 2020, and 2021. Basic EPS Diluted EPS For the Year Ended December 31, For the Year Ended December 31, 2019 2020 2021 2019 2020 2021 (in thousands) Net income $ 201,031 $ 344,606 $ 499,949 $ 201,031 $ 344,606 $ 499,949 Less: net income attributable to non-controlling interests 52,582 85,611 97,724 52,582 85,611 97,724 Net income attributable to the Company 148,449 258,995 402,225 148,449 258,995 402,225 Less: Distributed and undistributed income attributable to participating securities 4,995 8,896 13,435 4,994 8,896 13,435 Distributed and undistributed income attributable to common shares $ 143,454 $ 250,099 $ 388,790 $ 143,455 $ 250,099 $ 388,790 The following tables set forth the computation of EPS under the two-class method: For the Year Ended December 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 $ 143,454 130,248 $ 1.10 $ 143,455 130,276 $ 1.10 Participating securities 4,995 4,535 1.10 4,994 4,535 1.10 Total Company $ 148,449 $ 148,449 For the Year Ended December 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 $ 250,099 129,780 $ 1.93 $ 250,099 129,780 $ 1.93 Participating securities 8,896 4,616 1.93 8,896 4,616 1.93 Total Company $ 258,995 $ 258,995 For the Year Ended December 31, 2021 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 388,790 130,249 $ 2.98 $ 388,790 130,249 $ 2.98 Participating securities 13,435 4,501 $ 2.98 13,435 4,501 $ 2.98 Total Company $ 402,225 $ 402,225 _______________________________________________________________________________ (1) Represents the weighted average share count outstanding during the period. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Construction Commitments At December 31, 2021, the Company had outstanding commitments under construction contracts related to new construction, improvements, and renovations totaling approximately $18.8 million. 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 $37.0 million for professional malpractice liability insurance and $40.0 million for general liability insurance. 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 designed a separate insurance program that responds to the risks of specific joint ventures. Most of the Company’s joint ventures are insured under a master program with an annual aggregate limit of up to $80.0 million, subject to a sublimit aggregate ranging from $23.0 million to $33.0 million for most joint ventures. 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 also maintains additional types of liability insurance covering claims which, due to their nature or amount, are not covered by or not fully covered by the Company’s professional and general liability insurance policies. These insurance policies also do not generally cover punitive damages and are subject to various deductibles and policy limits. The Company reviews its insurance program annually and may make adjustments to the amount of insurance coverage and self-insured retentions in future years. 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. Oklahoma City Subpoena. On August 24, 2020, the Company and Select Specialty Hospital – Oklahoma City, Inc. (“SSH–Oklahoma City”) received Civil Investigative Demands from the U.S. Attorney’s Office for the Western District of Oklahoma seeking responses to interrogatories and the production of various documents principally relating to the documentation, billing and reviews of medical services furnished to patients at SSH-Oklahoma City. 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. New Jersey Litigation. In December 2020, the United States District Court for the District of New Jersey unsealed a qui tam complaint in the United States of America and State of New Jersey ex rel. Keith A. DiLello, Sr. v. Hackensack Meridian Health, Jersey Shore University Medical Center, Ocean Medical Center, Seaview Orthopaedics, Shrewsbury Surgery Center, Kessler Rehabilitation, Dr. Halambros Demetriades, Dr. Theodore Kutzan, Dr. Adam Myers, Dr. Hoan-Vu Nguyen, Dr. Frederick De Paola, ABC Corporations 1-10, and John/Jane Does 1-10, Case 3:20-cv-02949-FLW-ZNQ. The complaint was filed under seal in March 2020 and was unsealed after the United States and the State of New Jersey declined to intervene in the case. In the complaint, the plaintiff-relator, an automobile accident victim and former patient of the defendant providers, alleges that they routinely billed both personal injury protection (“PIP”) carriers and CMS. He alleges that they violated federal and state law by billing CMS when other insurance is available and failing to return payment to CMS after payment was made by the PIP carriers. In March 2021, defendant Kessler Rehabilitation waived service of process of the complaint. The Company intends to vigorously defend this action, but at this time the Company is unable to predict the timing and outcome of this matter. Physical Therapy Billing. On October 7, 2021, the Company received a one-page letter from a Trial Attorney at the U.S. Department of Justice, Civil Division, Commercial Litigation Branch, Fraud Section (“DOJ”). The letter stated that the DOJ, in conjunction with the U.S. Department of Health and Human Services, is investigating the Company in connection with potential violations of the False Claims Act, 31 U.S.C. § 3729, et seq. The letter specified that the investigation relates to the Company’s billing of physical therapy services. The Company intends to produce documents and data in response to such letter and to fully cooperate with this investigation. At this time, the Company is unable to predict the timing and outcome of this matter. Medicare Dual-Eligible Litigation The Company’s critical illness recovery hospitals have pursued claims against CMS involving denied Medicare bad debt reimbursement for copayments and deductibles of dual-eligible Medicaid beneficiaries for cost reporting periods ending in 2005 through 2010. A U.S. District Court ruled in favor of the Company and ordered CMS to pay the Medicare bad debt reimbursement plus interest and, during the year ended December 31, 2021, the Company received reimbursement proceeds of $19.9 million plus accrued interest of $5.4 million. These amounts were recognized as other operating income and interest income, respectively, during the year ended December 31, 2021. |
CARES Act
CARES Act | 12 Months Ended |
Dec. 31, 2021 | |
Unusual or Infrequent Items, or Both [Abstract] | |
CARES Act | CARES Act Provider Relief Funds On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted. Since the enactment of the CARES Act, the Company’s consolidated subsidiaries have received approximately $215.8 million of payments from the Public Health and Social Services Emergency Fund, also referred to as the Provider Relief Fund. The Company is able to use payments received under the Provider Relief Fund for “health care related expenses or lost revenues that are attributable to coronavirus.” The Provider Relief Fund payments must first be applied against health care related expenses attributable to COVID-19. Provider Relief Fund payments not fully expended on health care related expenses attributable to COVID-19 are then applied to lost revenues. The provisions of the Provider Relief Fund payments permit a parent organization to allocate all or a portion of its general and targeted distributions among its subsidiaries which are eligible health care providers. The Department of Health and Human Services (“HHS”) has issued a series of post-payment notices of reporting requirements and other guidance which, in some instances, have significantly altered the terms and conditions surrounding the Provider Relief Fund payments since the enactment of the CARES Act. Certain of the provisions and reporting requirements associated with the Provider Relief Fund payments were signed into law as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (“CRRSA Act”) on December 27, 2020. As part of the terms and conditions of the Provider Relief Fund program, the Company must adhere to certain reporting requirements associated with payments received from the Provider Relief Fund. Recipients must report to HHS on their use of Provider Relief Fund payments by specified deadlines; these deadlines differ depending on when the payments were received by the recipient. The Company has adhered with these reporting requirements and completed such reporting for the payments it received between April 10, 2020 and June 30, 2020. The Company will complete its remaining reporting obligations for payments received after June 30, 2020 as the reporting becomes due. In the absence of specific guidance for government grants under U.S. GAAP, the Company accounted for the payments it received in accordance with IAS 20, Accounting for Government Grants and Disclosure of Government Assistanc e. Under the Company’s accounting policy, payments are recognized as other operating income when it is probable that it has complied with the terms and conditions of the payments. The Company assessed its eligibility to utilize certain Provider Relief Fund payments and whether those payments were used in accordance with the terms and conditions set forth within the CRRSA Act and by HHS. During the year ended December 31, 2021, the Company updated its assessment of uncertainties surrounding its ability to utilize certain of its Provider Relief Fund payments, including its ability to allocate general distributions among the Company’s subsidiaries, for additional information obtained during the period. Based on the Company’s assessments, during the years ended December 31, 2020 and 2021, the Company determined that it has complied with the terms and conditions associated with the Provider Relief Fund payments and was eligible to recognize approximately $90.0 million and $123.8 million, respectively, of Provider Relief Fund payments as other operating income. As of December 31, 2021, $93 thousand of Provider Relief Fund payments have not yet been utilized by the Company in accordance with the regulations promulgated by HHS and the CRRSA Act and are reported as unearned government assistance in the accompanying consolidated balance sheet. These Provider Relief Fund payments may need to be repaid to the extent they cannot be utilized in accordance with the terms and conditions set forth within the CRRSA Act and by HHS. Further changes to the regulations surrounding the Provider Relief Fund payments or amended interpretations of existing guidance may change the Company’s assessment of whether it is probable that it has complied with the terms and conditions of the Provider Relief Fund payments. These changes may result in the Company being unable to recognize additional Provider Relief Fund payments as other operating income or the reversal of amounts previously recognized. Medicare Accelerated and Advance Payments Program The Company’s consolidated subsidiaries received approximately $325.0 million of advance payments under CMS’s Accelerated and Advance Payment Program, which was temporarily expanded by the CARES Act during the year ended December 31, 2020. Repayment of the advance payments began one year from the issuance date of the payment. After that first year, the Medicare program automatically recoups 25.0% of the Medicare payments otherwise owed to the provider or supplier for eleven months. At the end of the eleven-month period, recoupment increases to 50.0% for another six months. Any amounts that remain unpaid after 29 months are subject to a 4.0% interest rate. The Company received the majority of its advance payments in April 2020. Accordingly, CMS began recouping a portion of the Medicare payments due to the Company beginning in April 2021. CMS recouped $241.2 million of Medicare payments during the year ended December 31, 2021. As of December 31, 2021, the Company owes CMS $83.8 million which is reported as government advances in the accompanying consolidated balance sheet. Employer Payroll Tax Deferral 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 was able to defer half of its share of payroll taxes owed until December 31, 2021, with the remaining half due on December 31, 2022. As of December 31, 2020, the Company owed approximately $106.2 million related to these payroll taxes, which is reported in accrued payroll and other non-current liabilities on the accompanying consolidated balance sheet. As of December 31, 2021, the Company owed approximately $53.0 million related to these payroll taxes. This amount is reflected in accrued payroll on the accompanying consolidated balance sheet. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Event On February 17, 2022, the Company’s board of directors declared a cash dividend of $0.125 per share. The dividend will be payable on or about March 16, 2022 to stockholders of record as of the close of business on March 4, 2022. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | The following Financial Statement Schedule along with the report thereon of PricewaterhouseCoopers LLP dated February 24, 2022, should be read in conjunction with the consolidated financial statements. Financial Statement Schedules not included in this filing have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto. Schedule II—Valuation and Qualifying Accounts Balance at Charged to Acquisitions (1) Deductions (2) Balance at (in thousands) Income Tax Valuation Allowance Year ended December 31, 2021 $ 17,339 $ 434 $ — $ — $ 17,773 Year ended December 31, 2020 $ 18,461 $ (484) $ — $ (638) $ 17,339 Year ended December 31, 2019 $ 17,893 $ 568 $ — $ — $ 18,461 _______________________________________________________________________________ (1) Includes valuation allowance reserves resulting from business combinations. (2) Valuation allowance deductions relate to the disposition of certain subsidiaries. |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Estimates and assumptions are used for, but not limited to: revenue recognition, allowances for expected credit losses, estimated useful lives of assets, the fair value of goodwill and intangible assets, amounts payable for self-insured losses, and the computation of income taxes. Future events and their effects cannot be predicted with certainty; accordingly, the Company’s accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as the Company’s operating environment changes. The Company’s management evaluates and updates assumptions and estimates on an ongoing basis. Actual results could differ from those estimates. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Holdings, Select, and the subsidiaries, limited liability companies, limited partnerships, and variable interest entities in which the Company has a controlling financial interest. All intercompany balances and transactions are eliminated in consolidation. |
Variable Interest Entities | Variable Interest EntitiesCertain states prohibit the “corporate practice of medicine,” which restricts the Company from owning medical practices which directly employ physicians and from exercising control over medical decisions by physicians. In these states, the Company enters into long-term management agreements with medical practices that are owned by licensed physicians which, in turn, employ or contract with physicians who provide professional medical services in certain of its occupational health centers and clinics. The agreements provide for the Company to direct the transfer of ownership of the medical practices to new licensed physicians at any time. Based on the provisions of the management agreements, the medical practices are variable interest entities for which the Company is the primary beneficiary. |
Non-Controlling Interests | Non-Controlling InterestsThe ownership interests held by outside parties in subsidiaries, which include limited liability companies and limited partnerships, controlled by the Company are classified as non-controlling interests. Net income or loss is attributed to the Company’s non-controlling interests. Some of the Company’s non-controlling ownership interests consist of outside parties that have certain redemption rights that, if exercised, require the Company to purchase the parties’ ownership interests. These interests are classified and reported as redeemable non-controlling interests and have been adjusted to their approximate redemption values, after the attribution of net income or loss. |
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, if any. (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. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents are stated at cost which approximates fair value. |
Accounts Receivable | Accounts Receivable Substantially all of the Company’s accounts receivable is related to providing healthcare services to patients. These services are paid for primarily by federal and state governmental authorities, managed care health plans, commercial insurance companies, workers’ compensation programs, and employer-directed programs. 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. The Company performs periodic assessments to determine if an allowance for expected credit losses is necessary. The Company considers its incurred loss experience and adjusts for known and expected events and other circumstances. In estimating its expected credit losses, the Company may consider changes in the length of time its receivables have been outstanding, changes in credit ratings for its payors, requests from payors to alter payment terms due to financial difficulty, and notices of payor bankruptcies or payors entering receivership. Because the Company’s accounts receivable is 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’s credit losses have been infrequent and insignificant in nature. Amounts recognized for allowances for expected credit losses are immaterial to the consolidated financial statements. |
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 leases are classified as operating leases. 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. Right-of-use assets and lease liabilities are measured at the present value of the remaining fixed lease payments at lease commencement. As most of the Company’s leases do not specify an implicit rate, the Company uses its incremental borrowing rate, which coincides with the lease term at the commencement of a lease, 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 also include any prepaid lease payments and initial direct costs, less any lease incentive received, 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 are accounted for as lease payments and are included in the measurement of the Company’s right-of-use asset and lease liability. For the Company’s operating leases, lease expense, a component of cost of services and general and administrative expense in the consolidated statements of operations, is recognized on a straight-line basis over the lease term. For the Company’s finance leases, interest expense on the lease liability is recognized using the effective interest method and 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 also makes variable lease payments which are expensed as incurred. These payments relate to changes in indexes or rates after the lease commencement date, as well as property taxes, insurance, and common area maintenance which were not fixed at lease commencement. This expense is a component of cost of services and general and administrative expense in the consolidated statements of operations. 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 in the consolidated statements of operations, is recognized on a straight-line basis, as a reduction to lease expense, over the term of the sublease. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Maintenance and repairs of property and equipment are expensed as incurred. Improvements that increase the estimated useful life of an asset are capitalized. Direct internal and external costs of developing software for internal use, including programming and enhancements, are capitalized and depreciated over the estimated useful lives once the software is placed in service. Capitalized software costs are included within furniture and equipment. Software training costs, maintenance, and repairs are expensed as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets or the term of the lease, as appropriate. The general range of useful lives is as follows: Land improvements 5 – 25 years Leasehold improvements 1 – 20 years Buildings 40 years Building improvements 5 – 40 years Furniture and equipment 1 – 20 years The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of those assets or asset groups may not be recoverable. If the expected undiscounted future cash flows are less than the carrying amount of such assets or asset groups, the Company recognizes an impairment loss to the extent the carrying amount exceeds its estimated fair value. |
Intangible Assets | Intangible Assets Goodwill and indefinite-lived identifiable intangible assets Goodwill and other indefinite-lived intangible assets are recognized primarily as the result of business combinations. Goodwill is assigned to reporting units based upon the specific nature of the business acquired or, when a business combination contains business components related to more than one reporting unit, goodwill is assigned to each reporting unit based upon an allocation determined by the relative fair values of the business acquired. When the Company disposes of a business, the Company allocates a portion of the reporting unit’s goodwill to that business based on the relative fair values of the portion of the reporting unit being disposed of and the portion of the reporting unit remaining. The Company evaluates its reporting units on an annual basis and, if its reporting units are reorganized, the Company reassigns goodwill based on the relative fair values of the new reporting units. Goodwill and other indefinite-lived intangible assets are not amortized, but instead are subject to periodic impairment evaluations. The Company performs its impairment tests annually as of October 1 or when events or conditions occur that might suggest a possible impairment. Events or conditions which might suggest impairment could include a significant change in the business environment, the regulatory environment, or legal factors; a current period operating or cash flow loss combined with a history of such losses or a projection of continuing losses; or a sale or disposition of a significant portion of a reporting unit. The Company may first assess qualitatively whether goodwill is more likely than not impaired by considering relevant events or circumstances that affect the fair value or carrying amount of a reporting unit. If goodwill is more likely than not impaired, the Company is then required to complete a quantitative analysis. The Company considers both the income and market approach in determining the fair values of its reporting units when performing a quantitative analysis. If the carrying value of a reporting unit exceeds its fair value, an impairment charge is recognized equal to the difference between the carrying amount of the reporting unit and its fair value, not to exceed the carrying value of goodwill of the reporting unit. At December 31, 2021, the Company’s other indefinite-lived intangible assets consist of trademarks, certificates of need, and accreditations. To determine the fair values of its trademarks, the Company uses a relief from royalty income approach. For the Company’s certificates of need and accreditations, the Company performs qualitative assessments. As part of these assessments, the Company evaluates the current business environment, regulatory environment, legal and other company-specific factors. If it is more likely than not that the fair values are less than the carrying values, the Company performs a quantitative impairment test. The Company’s most recent impairment assessments were completed during the fourth quarter of 2021 utilizing information as of October 1, 2021. The Company did not identify any instances of impairment with respect to goodwill or other indefinite-lived intangible assets as of October 1, 2021. Finite-lived identifiable intangible assets Finite-lived intangible assets are amortized based on the pattern in which the economic benefits are consumed or otherwise depleted. If such a pattern cannot be reliably determined, finite-lived intangible assets are amortized on a straight-line basis over their estimated lives. Management believes that the below estimated useful lives are reasonable based on the economic factors applicable to each class of finite-lived intangible asset. The general range of useful lives is as follows: Customer relationships 5 – 15 years Non-compete agreements 1 – 15 years The Company’s finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of those assets or asset groups may not be recoverable. If the expected undiscounted future cash flows are less than the carrying amount of such assets or asset groups, the Company recognizes an impairment loss to the extent the carrying amount exceeds its estimated fair value. |
Equity Method Investments | Equity Method Investments The Company applies the equity method of accounting for investments in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, but does not possess a controlling financial interest in the investee. Investments of this nature are recorded at their original cost and adjusted periodically to recognize the Company’s share of its investees’ net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceed the carrying amount, the investment balance is reduced to zero. The Company resumes accounting for the investment under the equity method if the investee subsequently reports net income and the Company’s share of that net income exceeds the share of the net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. The Company evaluates its equity method investments for impairment when there is evidence or indicators that a loss in value may be other than temporary. |
Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements. Deferred tax assets and liabilities are determined on the basis of the differences between the book and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company also recognizes the future tax benefits from net operating loss carryforwards as deferred tax assets. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company evaluates the realizability of deferred tax assets and reduces those assets using a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. Among the factors used to assess the likelihood of realization are projections of future taxable income streams, the expected timing of the reversals of existing temporary differences, and the impact of tax planning strategies that could be implemented to avoid the potential loss of future tax benefits. Reserves for uncertain tax positions are established for exposure items related to various federal and state tax matters. Income tax reserves are recorded when an exposure is identified and when, in the opinion of management, it is more likely than not that a tax position will not be sustained and the amount of the liability can be estimated. |
Insurance Risk Programs | Insurance Risk ProgramsUnder a number of the Company’s insurance programs, which include the Company’s employee health insurance, workers’ compensation, and professional malpractice liability insurance programs, the Company is liable for a portion of its losses before it can attempt to recover from the applicable insurance carrier. The Company accrues for losses under an occurrence-based approach whereby the Company estimates the losses that will be incurred in a respective accounting period and accrues that estimated liability using actuarial methods. These programs are monitored quarterly and estimates are revised as necessary to take into account additional information. The Company also records insurance proceeds receivable for liabilities which exceed the Company’s deductibles and self-insured retention limits and are recoverable through its insurance policies. |
Revenue Recognition | Revenue Recognition Patient Service Revenues Patient service revenues are recognized at an amount equal to the consideration the Company expects to be entitled to in exchange for providing healthcare services to its patients. Amounts owed for services provided are the obligations of the Company’s patients and can be paid for by third-party payors, including health insurers, government programs, and other payors on the patient’s behalf. Most of the Company’s patients are subject to healthcare coverage through a third-party payor arrangement. Given the nature and extent of third-party payor arrangements, the Company disaggregates its revenue by the following payor categories: Medicare : Medicare is a federal program that provides medical insurance benefits to persons age 65 and over, some disabled persons, and persons with end stage renal disease. The Company determines the transaction price for services provided to patients who are Medicare beneficiaries using Medicare’s prospective payment systems and other payment methods. The expected payment is determined by the level of clinical services provided and is sensitive to the patient’s length of stay. Non-Medicare : Non-Medicare payor sources include, but are not limited to, insurance companies (including Medicare Advantage plans), state Medicaid programs, workers’ compensation programs, health maintenance organizations, preferred provider organizations, other managed care companies and employers, as well as patients themselves. The transaction price for services provided to non-Medicare patients include amounts prescribed by state and federal fee schedules, negotiated contract amounts, or usual and customary amounts associated with the specific payor or based on the service provided. The Company applies the portfolio approach in determining revenues for certain homogeneous non-Medicare patient populations. The Company’s principal revenue source comes from providing healthcare services to patients. For patients treated within the Company’s outpatient rehabilitation clinics and Concentra centers, performance obligations are generally satisfied upon completion of the patient’s visit. For patients treated within the Company’s critical illness recovery and rehabilitation hospitals, the Company’s performance obligation is satisfied over the duration of the patient’s stay. As such, the Company recognizes revenue over the patient’s stay in amounts which are commensurate with the level of services provided to the patient. Any differences between the Company’s estimates of the transaction price, which may be impacted by various factors as described further below, and the payment received upon a patient’s discharge would be recognized as revenue in the period in which this change becomes known; such adjustments are not significant. The Company has an obligation to continue delivering treatment to patients admitted in the Company’s critical illness recovery and rehabilitation hospitals at the end of each reporting period. These performance obligations are typically satisfied in the subsequent month following the reporting period. The Company has elected the optional exemption which allows for the exclusion of disclosures regarding the transaction price allocated to unsatisfied performance obligations of contracts with a duration of less than one year. Revenue earned from providing services to patients is variable in nature, as the Company is required to make judgments which impact the transaction price, such as a patient’s condition and length of stay. These factors, among others, impact the payment the Company expects to receive for providing services. Variable consideration included in the transaction price is inclusive of the Company’s estimates of implicit discounts and other adjustments related to timely filing and documentation denials, out of network adjustments, and medical necessity denials, which are estimated using the Company’s historical experience. The Company is also subject to regular post-payment inquiries, investigations, and audits of the claims it submits for services provided. Some claims can take several years for resolution and may result in adjustments to the transaction price. Management includes in its estimates of the transaction price its expectations for these types of adjustments such that the amount of cumulative revenue recognized will not be subject to significant reversal in future periods. Historically, adjustments arising from a change in the transaction price have not been significant. Other Revenues The Company recognizes revenue for other services which principally consist of management and employee leasing services under contractual arrangements with related parties affiliated with the Company and non-affiliated healthcare institutions. The Company accounts for management and employee leasing services as single performance obligations satisfied over time. The transaction price is variable in nature and the Company recognizes revenue in amounts which are commensurate with the level of services provided during the period. The Company’s transaction price is determined such that the amount of cumulative revenue recognized will not be subject to significant reversal in future periods. |
Recently Adopted Accounting Guidance and Recent Accounting Guidance Not Yet Adopted | Recently Adopted Accounting Guidance Reference Rate Reform In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021, the FASB issued 2021-01, Reference Rate Reform (Topic 848), Scope, which further clarified the scope of the reference rate reform optional practical expedients and exceptions outlined in Topic 848. Topic 848 provides temporary relief from some of the existing rules governing contract modifications when the modification is related to the replacement of the London Interbank Offered Rate (“LIBOR”) or other reference rates discontinued as a result of reference rate reform. On March 5, 2021, the Financial Conduct Authority (“FCA”) in the U.K. announced that all LIBOR settings will either cease to be provided or no longer be representative (i) immediately after December 31, 2021, in the case of the one-week and two-month USD LIBOR terms and all sterling, euro, Swiss franc and Japanese yen settings, and (ii) immediately after June 30, 2023, in the case of the one-, three-, six-, and 12-month USD LIBOR terms. For eligible contract modifications, the update generally allows an entity to account for and present modifications as an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. That is, the modified contract is accounted for as a continuation of the existing contract. For cash flow hedging relationships affected by reference rate reform, Topic 848 provides expedients that allow an entity to (i) change the reference rate of either the forecasted transaction or hedging instrument due to reference rate reform without requiring dedesignation of the hedging relationship; (ii) assert that changes to the hedged forecasted transaction due to reference rate reform will not impact whether it remains probable of occurring; and (iii) for the purposes of assessment of hedge effectiveness assume that the reference rate will not be replaced for the remainder of the hedging relationship if both the hedged forecasted transaction and hedging instrument are expected to be impacted by reference rate reform. The standard was effective upon issuance on March 12, 2020, and the optional practical expedients can generally be applied to contract modifications made and hedging relationships entered into on or before December 31, 2022. Borrowings under the Company’s credit agreement bear interest, at the election of Select, based on LIBOR or an alternate base rate. The Company currently elects for its term loan borrowings to bear interest at a rate that is indexed to one-month LIBOR. Provisions within the credit agreement provide the Company with the ability to agree with JPMorgan Chase Bank, N.A., as administrative agent to the lenders, to replace LIBOR with a different reference rate in the event that LIBOR ceases to exist. The Company has not yet agreed upon a different reference rate with JPMorgan Chase Bank, N.A. For the Company’s cash flow hedge, which mitigates the Company’s exposure to increases in the one-month LIBOR rate above 1.0% on $2.0 billion of principal outstanding under the term loan, the Company has elected to assert that the hedged forecasted transaction remains probable of occurring, regardless of a modification or expected modification that may replace one-month LIBOR with a different reference rate. The Company intends to modify the cash flow hedge’s contractual terms related to the replacement of the reference rate, as necessary, to align with the reference rate specified for the Company’s term loan. For the purpose of the assessment of hedge effectiveness, the Company assumes that the reference rate will not be replaced for the remainder of the hedging relationship, as outlined by Topic 848. The Company’s cash flow hedge is described further in Note 12 – Interest Rate Cap. ASU 2020-04 has not had, and the Company does not expect it to have in future periods, a material impact on the Company's consolidated financial statements. Government Assistance In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) , which requires business entities to disclose information about certain government assistance they receive if they account for the transactions by applying a grant or contribution model by analogy (for example, International Financial Reporting Standards (“IFRS”) guidance in International Accounting Standard (“IAS”) 20 or guidance on contributions for not-for-profit entities in Accounting Standards Codification (“ASC”) 958-605). For transactions in the scope of the new standard, business entities will need to provide information about the nature of the transaction and the accounting policy used, the significant terms and conditions associated with the transaction, and the amounts and financial statement line items affected by the transaction. The new guidance is effective for annual reporting periods beginning after December 15, 2021; however, early adoption is permitted. The disclosure requirements can be applied either prospectively or retrospectively. The Company early adopted ASU 2021-10 as of December 31, 2021. ASU 2021-10 did not have an impact on the Company's consolidated financial statements upon adoption. Recent Accounting Guidance Not Yet Adopted Convertible Instruments and Contracts on an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. As part of this update, convertible instruments are to be included in diluted earnings per share using the if-converted method, rather than the treasury stock method. Further, contracts which can be settled in cash or shares, excluding liability-classified share-based payment awards, are to be included in diluted earnings per share on an if-converted basis if the effect is dilutive, regardless of whether the entity or the counterparty can choose between cash and share settlement. The share-settlement presumption may not be rebutted based on past experience or a stated policy. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2021. The use of either the modified retrospective or fully retrospective method of transition is permitted. Under the terms of the Amended and Restated Limited Liability Company Agreement of Concentra Group Holdings Parent, LLC (“Concentra Group Holdings Parent”), certain members of Concentra Group Holdings Parent had put rights that obligated the Company to purchase such members’ equity interests when exercised. The Company could elect to pay the purchase price for those equity interests in cash or in shares of Holdings’ common stock. On December 24, 2021, the Company purchased the equity interests which were subject to these provisions. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of property and equipment useful lives | The general range of useful lives is as follows: Land improvements 5 – 25 years Leasehold improvements 1 – 20 years Buildings 40 years Building improvements 5 – 40 years Furniture and equipment 1 – 20 years |
Schedule of finite-lived intangible asset useful lives | The general range of useful lives is as follows: Customer relationships 5 – 15 years Non-compete agreements 1 – 15 years |
Redeemable Non-Controlling In_2
Redeemable Non-Controlling Interests (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Noncontrolling Interest [Abstract] | |
Schedule of redeemable non-controlling interests | The changes in redeemable non-controlling interests are as follows: For the Year Ended December 31, 2019 2020 2021 (in thousands) Balance as of January 1 $ 780,488 $ 974,541 $ 398,171 Net income attributable to redeemable non-controlling interests 25,956 37,761 50,153 Distributions to and purchases of redeemable non-controlling interests (6,205) (11,255) (911) Redemption value adjustment on redeemable non-controlling interests 172,915 (27,470) 250,083 Purchase of membership interests of Concentra Group Holdings Parent — (576,366) (660,658) Other 1,387 960 2,195 Balance as of December 31 $ 974,541 $ 398,171 $ 39,033 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of lease cost | The Company’s total lease cost is as follows: For the Year Ended December 31, 2019 2020 2021 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total (in thousands) Operating lease cost $ 271,799 $ 5,498 $ 277,297 $ 278,945 $ 7,118 $ 286,063 $ 283,595 $ 7,186 $ 290,781 Finance lease cost: Amortization of right-of-use assets 258 — 258 452 — 452 647 — 647 Interest on lease liabilities 812 — 812 1,011 — 1,011 1,142 — 1,142 Short-term lease cost 2,171 — 2,171 — — — 269 — 269 Variable lease cost 43,096 553 43,649 49,409 580 49,989 52,666 426 53,092 Sublease income (9,822) — (9,822) (9,814) — (9,814) (8,955) — (8,955) Total lease cost $ 308,314 $ 6,051 $ 314,365 $ 320,003 $ 7,698 $ 327,701 $ 329,364 $ 7,612 $ 336,976 The weighted average remaining lease terms and discount rates are as follows: December 31, 2020 2021 Weighted average remaining lease term (in years): Operating leases 7.8 7.8 Finance leases 31.2 24.7 Weighted average discount rate: Operating leases 5.6 % 5.6 % Finance leases 7.2 % 7.4 % |
Supplemental cash flow information | Supplemental cash flow information related to leases is as follows: For the Year Ended December 31, 2019 2020 2021 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 274,095 $ 280,263 $ 294,576 Operating cash flows for finance leases 777 1,011 1,142 Financing cash flows for finance leases 225 140 616 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (1) 1,275,575 256,697 284,657 Finance leases 9,102 1,220 4,545 _______________________________________________________________________________ (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 during the year ended December 31, 2019. |
Supplemental balance sheet information | Supplemental balance sheet information related to leases is as follows: December 31, 2020 2021 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total Operating Leases (in thousands) Operating lease right-of-use assets $ 1,002,151 $ 30,066 $ 1,032,217 $ 1,052,603 $ 26,151 $ 1,078,754 Current operating lease liabilities $ 214,377 $ 6,036 $ 220,413 $ 222,865 $ 6,469 $ 229,334 Non-current operating lease liabilities 848,215 27,152 875,367 894,104 22,436 916,540 Total operating lease liabilities $ 1,062,592 $ 33,188 $ 1,095,780 $ 1,116,969 $ 28,905 $ 1,145,874 December 31, 2020 2021 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total Finance Leases (in thousands) Property and equipment, net $ 5,644 $ — $ 5,644 $ 8,505 $ — $ 8,505 Current portion of long-term debt and notes payable $ 663 $ — $ 663 $ 1,404 $ — $ 1,404 Long-term debt, net of current portion 13,491 — 13,491 16,679 — 16,679 Total finance lease liabilities $ 14,154 $ — $ 14,154 $ 18,083 $ — $ 18,083 |
Maturities of operating lease liabilities | As of December 31, 2021, maturities of lease liabilities are approximately as follows: Operating Leases Finance Leases (in thousands) 2022 $ 284,359 $ 2,724 2023 240,346 2,747 2024 200,347 2,384 2025 162,649 2,101 2026 133,483 2,126 Thereafter 468,921 28,181 Total undiscounted cash flows 1,490,105 40,263 Less: Imputed interest 344,231 22,180 Total discounted lease liabilities $ 1,145,874 $ 18,083 |
Maturities of finance lease liabilities | As of December 31, 2021, maturities of lease liabilities are approximately as follows: Operating Leases Finance Leases (in thousands) 2022 $ 284,359 $ 2,724 2023 240,346 2,747 2024 200,347 2,384 2025 162,649 2,101 2026 133,483 2,126 Thereafter 468,921 28,181 Total undiscounted cash flows 1,490,105 40,263 Less: Imputed interest 344,231 22,180 Total discounted lease liabilities $ 1,145,874 $ 18,083 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of components of property and equipment | The Company’s property and equipment consists of the following: December 31, 2020 2021 (in thousands) Land $ 93,756 $ 95,912 Leasehold improvements 562,734 620,367 Buildings 552,796 574,916 Furniture and equipment 704,430 728,072 Construction-in-progress 62,748 79,722 Total property and equipment 1,976,464 2,098,989 Accumulated depreciation (1,033,044) (1,137,522) Property and equipment, net $ 943,420 $ 961,467 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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 years ended December 31, 2020 and 2021: Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Total (in thousands) Balance as of January 1, 2020 $ 1,078,804 $ 430,900 $ 649,763 $ 1,232,488 $ 3,391,955 Acquisition of businesses 5,957 2,481 2,704 12,287 23,429 Measurement period adjustment — — — (20) (20) Sale of businesses — (628) (6,034) (29,688) (36,350) Balance as of December 31, 2020 1,084,761 432,753 646,433 1,215,067 3,379,014 Acquisition of businesses 46,679 9,402 7,692 8,645 72,418 Sale of businesses — — — (2,520) (2,520) Balance as of December 31, 2021 $ 1,131,440 $ 442,155 $ 654,125 $ 1,221,192 $ 3,448,912 |
Schedule of gross carrying amounts, accumulated amortization, and net carrying value for 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, 2020 2021 Gross Accumulated Net Gross Accumulated Net (in thousands) Indefinite-lived intangible assets: Trademarks $ 166,698 $ — $ 166,698 $ 166,698 $ — $ 166,698 Certificates of need 18,392 — 18,392 21,478 — 21,478 Accreditations 1,874 — 1,874 1,874 — 1,874 Finite-lived intangible assets: Trademarks 5,000 (5,000) — 5,000 (5,000) — Customer relationships 291,923 (113,346) 178,577 304,289 (141,111) 163,178 Non-compete agreements 33,771 (11,771) 22,000 36,746 (15,095) 21,651 Total identifiable intangible assets $ 517,658 $ (130,117) $ 387,541 $ 536,085 $ (161,206) $ 374,879 |
Schedule of future estimated amortization expense for finite-lived intangible assets | Estimated amortization expense of the Company’s finite-lived intangible assets for each of the five succeeding years is as follows: 2022 2023 2024 2025 2026 (in thousands) Amortization expense $ 30,131 $ 29,264 $ 20,674 $ 14,237 $ 13,452 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of equity method investments | At December 31, 2021, these businesses primarily consist of the following ownership interests: BIR JV, LLP 49.0 % OHRH, LLC 49.0 % GlobalRehab—Scottsdale, LLC 49.0 % ES Rehabilitation, LLC 49.0 % BHSM Rehabilitation, LLC 49.0 % Summarized combined financial information of the rehabilitation businesses in which the Company has a minority ownership interest is as follows: December 31, 2020 2021 (in thousands) Current assets $ 189,571 $ 181,838 Non-current assets 334,372 356,278 Total assets $ 523,943 $ 538,116 Current liabilities $ 96,980 $ 89,953 Non-current liabilities 118,312 103,484 Equity 308,651 344,679 Total liabilities and equity $ 523,943 $ 538,116 For the Year Ended December 31, 2019 2020 2021 (in thousands) Revenues $ 536,464 $ 562,031 $ 587,445 Cost of services and other operating expenses 476,182 496,739 503,880 Net income 58,519 72,172 87,528 |
Long-Term Debt and Notes Paya_2
Long-Term Debt and Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt and notes payable | As of December 31, 2021, the Company’s long-term debt and notes payable are as follows: Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value (in thousands) 6.250% senior notes $ 1,225,000 $ 27,635 $ (13,951) $ 1,238,684 $ 1,297,104 Credit facilities: Revolving facility 160,000 — — 160,000 159,400 Term loan 2,103,437 (6,386) (6,961) 2,090,090 2,087,661 Other debt, including finance leases 85,398 — (215) 85,183 85,183 Total debt $ 3,573,835 $ 21,249 $ (21,127) $ 3,573,957 $ 3,629,348 As of December 31, 2020, the Company’s long-term debt and notes payable are as follows: Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value (in thousands) 6.250% senior notes $ 1,225,000 $ 33,773 $ (16,953) $ 1,241,820 $ 1,316,875 Credit facilities: Term loan 2,103,437 (8,393) (9,149) 2,085,895 2,082,403 Other debt, including finance leases 74,606 — (302) 74,304 74,304 Total debt $ 3,403,043 $ 25,380 $ (26,404) $ 3,402,019 $ 3,473,582 |
Schedule of principal maturities of long-term debt and notes payable | Principal maturities of the Company’s long-term debt and notes payable are approximately as follows: 2022 2023 2024 2025 2026 Thereafter Total (in thousands) 6.250% senior notes $ — $ — $ — $ — $ 1,225,000 $ — $ 1,225,000 Credit facilities: Revolving facility — — 160,000 — — — 160,000 Term loan — 4,757 11,150 2,087,530 — — 2,103,437 Other debt, including finance leases 17,572 27,072 26,081 1,824 1,286 11,563 85,398 Total debt $ 17,572 $ 31,829 $ 197,231 $ 2,089,354 $ 1,226,286 $ 11,563 $ 3,573,835 |
Interest Rate Cap (Tables)
Interest Rate Cap (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The following table outlines the changes in AOCI, net of tax, during the periods presented: For the Year Ended December 31, 2019 2020 2021 (in thousands) Beginning balance $ — $ — $ (2,027) Gain (loss) on interest rate cap cash flow hedge — (2,027) 14,270 Amounts reclassified from AOCI — — 39 Ending balance $ — $ (2,027) $ 12,282 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of interest rate cap | December 31, Financial Instrument Balance Sheet Classification Level 2020 2021 (in thousands) Asset: Interest rate cap contract, non-current portion Other assets Level 2 $ — $ 18,055 Liability: Interest rate cap contract, current portion Accrued other Level 2 $ 1,339 $ 330 Interest rate cap contract, non-current portion Other non-current liabilities Level 2 1,392 — |
Schedule of long-term debt | December 31, 2020 December 31, 2021 Financial Instrument Level Carrying Value Fair Value Carrying Value Fair Value (in thousands) 6.250% senior notes Level 2 $ 1,241,820 $ 1,316,875 $ 1,238,684 $ 1,297,104 Credit facilities: Revolving facility Level 2 — — 160,000 159,400 Term loan Level 2 2,085,895 2,082,403 2,090,090 2,087,661 |
Stock Repurchase Program (Table
Stock Repurchase Program (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of share repurchases and repurchase costs | The share repurchases and the cost associated with those repurchases are as follows: For the Year Ended December 31, 2019 2020 2021 Shares repurchased 2,165,221 491,559 1,770,720 Cost of shares repurchased (in thousands) $ 33,163 $ 8,692 $ 58,598 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of selected financial data | The following tables summarize selected financial data for the Company’s reportable segments. For the Year Ended December 31, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Revenue $ 1,836,518 $ 670,971 $ 1,046,011 $ 1,628,817 $ 271,605 $ 5,453,922 Adjusted EBITDA 254,868 135,857 151,831 276,482 (108,130) 710,908 Total assets 2,099,833 1,127,028 1,289,190 2,372,187 452,050 7,340,288 Capital expenditures 45,573 27,216 33,628 44,101 6,608 157,126 For the Year Ended December 31, 2020 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Revenue $ 2,077,499 $ 734,673 $ 919,913 $ 1,501,434 $ 298,194 $ 5,531,713 Adjusted EBITDA 342,427 153,203 79,164 252,892 (27,120) 800,566 Total assets 2,213,892 1,148,617 1,302,110 2,400,646 590,134 7,655,399 Capital expenditures 49,726 7,571 28,876 50,114 10,153 146,440 For the Year Ended December 31, 2021 Critical Illness Recovery Hospitals Rehabilitation Hospitals Outpatient Concentra Other Total (in thousands) Revenue $ 2,246,772 $ 849,340 $ 1,084,361 $ 1,732,041 $ 292,001 $ 6,204,515 Adjusted EBITDA 267,993 184,704 138,275 389,616 (33,229) 947,359 Total assets 2,304,116 1,194,136 1,348,316 2,275,345 238,258 7,360,171 Capital expenditures 65,690 13,003 36,301 46,787 18,756 180,537 |
Schedule of reconciliation of Adjusted EBITDA to income before income taxes | A reconciliation of Adjusted EBITDA to income before income taxes is as follows: For the Year Ended December 31, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ 254,868 $ 135,857 $ 151,831 $ 276,482 $ (108,130) Depreciation and amortization (50,763) (27,322) (28,301) (96,807) (9,383) Stock compensation expense — — — (3,069) (23,382) Income (loss) from operations $ 204,105 $ 108,535 $ 123,530 $ 176,606 $ (140,895) $ 471,881 Loss on early retirement of debt (38,083) Equity in earnings of unconsolidated subsidiaries 24,989 Gain on sale of businesses 6,532 Interest expense (200,570) Income before income taxes $ 264,749 For the Year Ended December 31, 2020 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ 342,427 $ 153,203 $ 79,164 $ 252,892 $ (27,120) Depreciation and amortization (51,531) (27,727) (29,009) (87,865) (9,527) Stock compensation expense — — — (2,512) (24,738) Income (loss) from operations $ 290,896 $ 125,476 $ 50,155 $ 162,515 $ (61,385) $ 567,657 Equity in earnings of unconsolidated subsidiaries 29,440 Gain on sale of businesses 12,387 Interest expense (153,011) Income before income taxes $ 456,473 For the Year Ended December 31, 2021 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ 267,993 $ 184,704 $ 138,275 $ 389,616 $ (33,229) Depreciation and amortization (53,094) (27,677) (29,592) (82,210) (10,072) Stock compensation expense — — — (2,142) (28,798) Income (loss) from operations $ 214,899 $ 157,027 $ 108,683 $ 305,264 $ (72,099) $ 713,774 Equity in earnings of unconsolidated subsidiaries 44,428 Gain on sale of businesses 2,155 Interest income 5,350 Interest expense (135,985) Income before income taxes $ 629,722 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | The following tables disaggregate the Company’s revenue: For the Year Ended December 31, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Patient service revenue: Medicare $ 907,963 $ 332,514 $ 171,690 $ 1,965 $ — $ 1,414,132 Non-Medicare 916,650 300,113 794,288 1,615,529 — 3,626,580 Total patient services revenue 1,824,613 632,627 965,978 1,617,494 — 5,040,712 Other revenue 11,905 38,344 80,033 11,323 271,605 413,210 Total revenue $ 1,836,518 $ 670,971 $ 1,046,011 $ 1,628,817 $ 271,605 $ 5,453,922 For the Year Ended December 31, 2020 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Patient service revenue: Medicare $ 900,593 $ 345,642 $ 137,447 $ 1,284 $ — $ 1,384,966 Non-Medicare 1,164,410 349,530 719,600 1,488,976 — 3,722,516 Total patient services revenue 2,065,003 695,172 857,047 1,490,260 — 5,107,482 Other revenue 12,496 39,501 62,866 11,174 298,194 424,231 Total revenue $ 2,077,499 $ 734,673 $ 919,913 $ 1,501,434 $ 298,194 $ 5,531,713 For the Year Ended December 31, 2021 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Patient service revenue: Medicare $ 833,387 $ 412,440 $ 172,064 $ 1,079 $ — $ 1,418,970 Non-Medicare 1,401,414 394,809 843,803 1,723,804 — 4,363,830 Total patient services revenue 2,234,801 807,249 1,015,867 1,724,883 — 5,782,800 Other revenue 11,971 42,091 68,494 7,158 292,001 421,715 Total revenue $ 2,246,772 $ 849,340 $ 1,084,361 $ 1,732,041 $ 292,001 $ 6,204,515 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of restricted stock awards | Transactions related to restricted stock awards are as follows: Shares Weighted Average (share amounts in thousands) Unvested balance, January 1, 2021 4,523 $ 17.74 Granted 1,363 38.59 Vested (1,409) 19.57 Forfeited (18) 15.88 Unvested balance, December 31, 2021 4,459 $ 23.54 |
Schedule of stock compensation expense recognized | Stock compensation expense recognized by the Company is as follows: For the Year Ended December 31, 2019 2020 2021 (in thousands) Stock compensation expense: Included in general and administrative $ 20,334 $ 22,053 $ 24,598 Included in cost of services 6,117 5,197 6,342 Total $ 26,451 $ 27,250 $ 30,940 |
Schedule of stock compensation expense based on current stock-based awards for each of the next five years | Future stock compensation expense based on current stock-based awards is estimated to be as follows: 2022 2023 2024 2025 2026 (in thousands) Stock compensation expense $ 31,762 $ 21,749 $ 11,990 $ 2,093 $ 60 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of the components of income tax expense | The components of the Company’s income tax expense for the years ended December 31, 2019, 2020, and 2021 are as follows: For the Year Ended December 31, 2019 2020 2021 (in thousands) Current income tax expense: Federal $ 55,822 $ 95,633 $ 99,254 State and local 15,331 30,949 25,464 Total current income tax expense 71,153 126,582 124,718 Deferred income tax expense (benefit) (7,435) (14,715) 5,055 Total income tax expense $ 63,718 $ 111,867 $ 129,773 |
Schedule of reconciliations of the statutory federal income tax rate to the effective income tax rate | Reconciliations of the statutory federal income tax rate to the effective income tax rate are as follows: For the Year Ended December 31, 2019 2020 2021 Federal income tax at statutory rate 21.0 % 21.0 % 21.0 % State and local income taxes, less federal income tax benefit 4.2 5.8 4.2 Permanent differences 0.4 0.5 0.5 Deferred income taxes - state income tax rate adjustment 0.8 0.0 (1.2) Uncertain tax positions (0.1) (0.1) 0.0 Valuation allowance 0.5 0.0 0.2 Limitation on Officers’ compensation 1.3 1.1 0.9 Stock-based compensation (0.7) (1.4) (1.7) Non-controlling interest (2.9) (3.3) (1.9) Other (0.4) 0.9 (1.4) Effective income tax rate 24.1 % 24.5 % 20.6 % |
Schedule of deferred tax assets and liabilities | The Company’s deferred tax assets and liabilities are as follows: December 31, 2020 2021 (in thousands) Deferred tax assets Implicit discounts and adjustments $ 13,825 $ 13,058 Compensation and benefit-related accruals 54,464 57,604 Professional malpractice liability insurance 17,330 18,462 Deferred revenue 163 95 Federal and state net operating loss and state tax credit carryforwards 34,417 38,022 Interest limitation carryforward 686 494 Stock awards 3,638 4,285 Equity investments 4,627 4,414 Operating lease liabilities 223,875 230,416 CARES Act employer payroll tax deferral 23,001 11,594 Derivatives 705 — Other 2,489 4,850 Deferred tax assets $ 379,220 $ 383,294 Valuation allowance (17,339) (17,773) Deferred tax assets, net of valuation allowance $ 361,881 $ 365,521 Deferred tax liabilities Deferred income $ (4,595) $ — Investment in unconsolidated affiliates (10,401) (12,606) Depreciation and amortization (238,655) (245,859) Deferred financing costs (5,003) (3,696) Operating lease right-of-use assets (210,045) (215,640) Derivatives — (4,094) Other (4,844) (4,252) Deferred tax liabilities $ (473,543) $ (486,147) Deferred tax liabilities, net of deferred tax assets $ (111,662) $ (120,626) The Company’s deferred tax assets and liabilities are included in the consolidated balance sheet captions as follows: December 31, 2020 2021 (in thousands) Other assets $ 20,759 $ 22,166 Non-current deferred tax liability (132,421) (142,792) $ (111,662) $ (120,626) |
Schedule of state net operating loss carryforwards | The total state net operating losses are approximately $620.3 million. State net operating loss carryforwards expire and are subject to valuation allowances as follows: State Net Operating Losses Gross Valuation Allowance (in thousands) 2022 $ 25,823 $ 9,755 2023 16,718 8,636 2024 25,737 8,761 2025 36,614 7,743 Thereafter through 2040 515,430 305,621 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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. There were no contractual dividends paid for the years ended December 31, 2019, 2020, and 2021. Basic EPS Diluted EPS For the Year Ended December 31, For the Year Ended December 31, 2019 2020 2021 2019 2020 2021 (in thousands) Net income $ 201,031 $ 344,606 $ 499,949 $ 201,031 $ 344,606 $ 499,949 Less: net income attributable to non-controlling interests 52,582 85,611 97,724 52,582 85,611 97,724 Net income attributable to the Company 148,449 258,995 402,225 148,449 258,995 402,225 Less: Distributed and undistributed income attributable to participating securities 4,995 8,896 13,435 4,994 8,896 13,435 Distributed and undistributed income attributable to common shares $ 143,454 $ 250,099 $ 388,790 $ 143,455 $ 250,099 $ 388,790 The following tables set forth the computation of EPS under the two-class method: For the Year Ended December 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 $ 143,454 130,248 $ 1.10 $ 143,455 130,276 $ 1.10 Participating securities 4,995 4,535 1.10 4,994 4,535 1.10 Total Company $ 148,449 $ 148,449 For the Year Ended December 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 $ 250,099 129,780 $ 1.93 $ 250,099 129,780 $ 1.93 Participating securities 8,896 4,616 1.93 8,896 4,616 1.93 Total Company $ 258,995 $ 258,995 For the Year Ended December 31, 2021 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 388,790 130,249 $ 2.98 $ 388,790 130,249 $ 2.98 Participating securities 13,435 4,501 $ 2.98 13,435 4,501 $ 2.98 Total Company $ 402,225 $ 402,225 _______________________________________________________________________________ (1) Represents the weighted average share count outstanding during the period. |
Organization and Significant _4
Organization and Significant Accounting Policies - Business Description (Details) | 12 Months Ended |
Dec. 31, 2021statehospitalbusinessSegmentclinichealthCenter | |
Segment information | |
Number of states in which the entity had operations | state | 46 |
Number of business segments | businessSegment | 4 |
Critical Illness Recovery Hospital | |
Segment information | |
Number of facilities operated by the entity | hospital | 104 |
Rehabilitation Hospital | |
Segment information | |
Number of facilities operated by the entity | hospital | 30 |
Outpatient Rehabilitation | |
Segment information | |
Number of outpatient rehabilitation clinics operated by entity | clinic | 1,881 |
Concentra | |
Segment information | |
Number of occupational health centers operated by entity | healthCenter | 518 |
Number of onsite clinics | clinic | 134 |
Organization and Significant _5
Organization and Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Land improvements | Minimum | |
Property and equipment | |
Estimated useful lives | 5 years |
Land improvements | Maximum | |
Property and equipment | |
Estimated useful lives | 25 years |
Leasehold improvements | Minimum | |
Property and equipment | |
Estimated useful lives | 1 year |
Leasehold improvements | Maximum | |
Property and equipment | |
Estimated useful lives | 20 years |
Buildings | |
Property and equipment | |
Estimated useful lives | 40 years |
Building improvements | Minimum | |
Property and equipment | |
Estimated useful lives | 5 years |
Building improvements | Maximum | |
Property and equipment | |
Estimated useful lives | 40 years |
Furniture and equipment | Minimum | |
Property and equipment | |
Estimated useful lives | 1 year |
Furniture and equipment | Maximum | |
Property and equipment | |
Estimated useful lives | 20 years |
Organization and Significant _6
Organization and Significant Accounting Policies - Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Customer relationships | Minimum | |
Intangible Assets and Liabilities | |
Useful life of intangible assets | 5 years |
Customer relationships | Maximum | |
Intangible Assets and Liabilities | |
Useful life of intangible assets | 15 years |
Non-compete agreements | Minimum | |
Intangible Assets and Liabilities | |
Useful life of intangible assets | 1 year |
Non-compete agreements | Maximum | |
Intangible Assets and Liabilities | |
Useful life of intangible assets | 15 years |
Organization and Significant _7
Organization and Significant Accounting Policies - Recently Adopted Accounting Guidance and Recent Accounting Guidance Not Yet Adopted (Details) - Interest Rate Cap $ in Billions | Dec. 31, 2021USD ($) |
Derivative [Line Items] | |
Interest rate rap (as a percent) | 1.00% |
Interest rate cap, notional amount | $ 2 |
Redeemable Non-Controlling In_3
Redeemable Non-Controlling Interests - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2021USD ($)subsidiary | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Noncontrolling Interest [Line Items] | ||||
Redeemable non-controlling interests | $ 39,033,000 | $ 398,171,000 | $ 974,541,000 | $ 780,488,000 |
Purchase of membership interests of Concentra Group Holdings Parent | 660,658,000 | 576,366,000 | $ 0 | |
Concentra Group Holdings Parent LLC | ||||
Noncontrolling Interest [Line Items] | ||||
Purchase of membership interests of Concentra Group Holdings Parent | $ 660,700,000 | $ 576,400,000 | ||
Concentra Group Holdings Parent | ||||
Noncontrolling Interest [Line Items] | ||||
Outstanding membership interest owned by Select | 99.30% | 78.00% | ||
Concentra Group Holdings Parent | Voting Units | ||||
Noncontrolling Interest [Line Items] | ||||
Outstanding membership interest owned by Select | 100.00% | 79.80% | ||
Outside Members of Concentra Group Holdings Parent, LLC | ||||
Noncontrolling Interest [Line Items] | ||||
Redeemable non-controlling interests | $ 0 | $ 368,900,000 | ||
Outside Members Of Other Less Than Wholly Owned Subsidiaries | ||||
Noncontrolling Interest [Line Items] | ||||
Less than wholly owned subsidiaries | subsidiary | 8 |
Redeemable Non-Controlling In_4
Redeemable Non-Controlling Interests - Schedule of Redeemable Non-Controlling Interests (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance, beginning | $ 398,171 | $ 974,541 | $ 780,488 |
Net income attributable to redeemable non-controlling interests | 50,153 | 37,761 | 25,956 |
Distributions to and purchases of redeemable non-controlling interests | (911) | (11,255) | (6,205) |
Redemption value adjustment on redeemable non-controlling interests | 250,083 | (27,470) | 172,915 |
Purchase of membership interests of Concentra Group Holdings Parent | (660,658) | (576,366) | 0 |
Other | 2,195 | 960 | 1,387 |
Balance, ending | $ 39,033 | $ 398,171 | $ 974,541 |
Credit Risk and Payor Concent_2
Credit Risk and Payor Concentrations (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts receivable | Credit concentration risk | Medicare Receivable | |||
Concentration Risk [Line Items] | |||
Percentage of concentration risk | 15.00% | 18.00% | |
Revenue | Third-party payor risk | Medicare | |||
Concentration Risk [Line Items] | |||
Percentage of concentration risk | 23.00% | 25.00% | 26.00% |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 3,448,912 | $ 3,379,014 | $ 3,391,955 |
Critical Illness Recovery Hospital, Outpatient Rehabilitation and Concentra Business | |||
Business Acquisition [Line Items] | |||
Cash paid to acquire businesses | 89,700 | 20,800 | 93,700 |
Issuance of non-controlling interests | 11,200 | 15,100 | |
Critical Illness Recovery Hospital Reporting Unit | |||
Business Acquisition [Line Items] | |||
Goodwill | 46,700 | 6,000 | 33,600 |
Rehabilitation Hospital Reporting Unit | |||
Business Acquisition [Line Items] | |||
Goodwill | 9,400 | 2,500 | 14,300 |
Outpatient Rehabilitation Reporting Unit | |||
Business Acquisition [Line Items] | |||
Goodwill | 7,700 | 2,700 | 13,000 |
Concentra Reporting Unit | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 8,600 | $ 12,300 | $ 16,100 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Variable Interest Entity [Line Items] | |||
Total assets | $ 7,360,171 | $ 7,655,399 | $ 7,340,288 |
Liabilities | 5,995,236 | 6,004,255 | |
Variable Interest Entity, Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Total assets | 225,100 | 208,400 | |
Liabilities | 74,800 | 55,100 | |
Obligations payable | $ 150,300 | $ 151,800 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 12 Months Ended |
Dec. 31, 2021renewal_option | |
Critical Illness Recovery Hospital | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Number of renewal options | 2 |
Lease renewal term | 5 years |
Rehabilitation Hospital | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Number of renewal options | 2 |
Lease renewal term | 5 years |
Outpatient Rehabilitation | |
Lessee, Lease, Description [Line Items] | |
Lease term | 5 years |
Number of renewal options | 2 |
Concentra | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Number of renewal options | 2 |
Lease renewal term | 5 years |
Minimum | Outpatient Rehabilitation | |
Lessee, Lease, Description [Line Items] | |
Lease renewal term | 3 years |
Maximum | Outpatient Rehabilitation | |
Lessee, Lease, Description [Line Items] | |
Lease renewal term | 5 years |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating lease cost | |||
Unrelated Parties | $ 283,595 | $ 278,945 | $ 271,799 |
Related Parties | 7,186 | 7,118 | 5,498 |
Total | 290,781 | 286,063 | 277,297 |
Amortization of right-of-use assets | |||
Unrelated Parties | 647 | 452 | 258 |
Related Parties | 0 | 0 | 0 |
Total | 647 | 452 | 258 |
Interest on lease liabilities | |||
Unrelated Parties | 1,142 | 1,011 | 812 |
Related Parties | 0 | 0 | 0 |
Total | 1,142 | 1,011 | 812 |
Short-term lease cost | |||
Unrelated Parties | 269 | 0 | 2,171 |
Related Parties | 0 | 0 | 0 |
Total | 269 | 0 | 2,171 |
Variable lease cost | |||
Unrelated Parties | 52,666 | 49,409 | 43,096 |
Related Parties | 426 | 580 | 553 |
Total | 53,092 | 49,989 | 43,649 |
Sublease income | |||
Unrelated Parties | (8,955) | (9,814) | (9,822) |
Related Parties | 0 | 0 | 0 |
Total | (8,955) | (9,814) | (9,822) |
Total lease cost | |||
Unrelated Parties | 329,364 | 320,003 | 308,314 |
Related Parties | 7,612 | 7,698 | 6,051 |
Total | $ 336,976 | $ 327,701 | $ 314,365 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows for operating leases | $ 294,576 | $ 280,263 | $ 274,095 |
Operating cash flows for finance leases | 1,142 | 1,011 | 777 |
Financing cash flows for finance leases | 616 | 140 | 225 |
Right-of-use assets obtained in exchange for lease liabilities: | |||
Operating leases | 284,657 | 256,697 | 1,275,575 |
Finance leases | $ 4,545 | $ 1,220 | 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) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Operating lease right-of-use assets | ||
Unrelated Parties | $ 1,052,603 | $ 1,002,151 |
Related Parties | 26,151 | 30,066 |
Total | 1,078,754 | 1,032,217 |
Current operating lease liabilities | ||
Unrelated Parties | 222,865 | 214,377 |
Related Parties | 6,469 | 6,036 |
Total | 229,334 | 220,413 |
Non-current operating lease liabilities | ||
Unrelated Parties | 894,104 | 848,215 |
Related Parties | 22,436 | 27,152 |
Total | 916,540 | 875,367 |
Total operating lease liabilities | ||
Unrelated Parties | 1,116,969 | 1,062,592 |
Related Parties | 28,905 | 33,188 |
Total | 1,145,874 | 1,095,780 |
Property and equipment, net | ||
Unrelated Parties | 8,505 | 5,644 |
Related Parties | 0 | 0 |
Total | $ 8,505 | $ 5,644 |
Property and equipment, net | Property and equipment, net | Property and equipment, net |
Current portion of long-term debt and notes payable | ||
Unrelated Parties | $ 1,404 | $ 663 |
Related Parties | 0 | 0 |
Total | $ 1,404 | $ 663 |
Current portion of long-term debt and notes payable | Current portion of long-term debt and notes payable | Current portion of long-term debt and notes payable |
Long-term debt, net of current portion | ||
Unrelated Parties | $ 16,679 | $ 13,491 |
Related Parties | 0 | 0 |
Total | $ 16,679 | $ 13,491 |
Long-term debt, net of current portion | Long-term debt, net of current portion | Long-term debt, net of current portion |
Total finance lease liabilities | ||
Unrelated Parties | $ 18,083 | $ 14,154 |
Related Parties | 0 | 0 |
Total | $ 18,083 | $ 14,154 |
Leases - Weighted Average Lease
Leases - Weighted Average Lease Terms and Discount Rates (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Weighted average remaining lease term (in years): | ||
Operating leases | 7 years 9 months 18 days | 7 years 9 months 18 days |
Finance leases | 24 years 8 months 12 days | 31 years 2 months 12 days |
Weighted average discount rate: | ||
Operating leases | 5.60% | 5.60% |
Finance leases | 7.40% | 7.20% |
Leases - Maturities of Operatin
Leases - Maturities of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Operating Leases | ||
2022 | $ 284,359 | |
2023 | 240,346 | |
2024 | 200,347 | |
2025 | 162,649 | |
2026 | 133,483 | |
Thereafter | 468,921 | |
Total undiscounted cash flows | 1,490,105 | |
Less: Imputed interest | 344,231 | |
Total discounted lease liabilities | 1,145,874 | $ 1,095,780 |
Finance Leases | ||
2022 | 2,724 | |
2023 | 2,747 | |
2024 | 2,384 | |
2025 | 2,101 | |
2026 | 2,126 | |
Thereafter | 28,181 | |
Total undiscounted cash flows | 40,263 | |
Less: Imputed interest | 22,180 | |
Total discounted lease liabilities | $ 18,083 | $ 14,154 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property and equipment | |||
Total property and equipment | $ 2,098,989 | $ 1,976,464 | |
Accumulated depreciation | (1,137,522) | (1,033,044) | |
Property and equipment, net | 961,467 | 943,420 | |
Depreciation expense | 173,200 | 178,000 | $ 182,900 |
Land | |||
Property and equipment | |||
Total property and equipment | 95,912 | 93,756 | |
Leasehold improvements | |||
Property and equipment | |||
Total property and equipment | 620,367 | 562,734 | |
Buildings | |||
Property and equipment | |||
Total property and equipment | 574,916 | 552,796 | |
Furniture and equipment | |||
Property and equipment | |||
Total property and equipment | 728,072 | 704,430 | |
Construction-in-progress | |||
Property and equipment | |||
Total property and equipment | $ 79,722 | $ 62,748 |
Intangible Assets - Carrying Am
Intangible Assets - Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill | ||
Balance at the beginning of the year | $ 3,379,014 | $ 3,391,955 |
Acquisition of businesses | 72,418 | 23,429 |
Measurement period adjustment | (20) | |
Sale of businesses | (2,520) | (36,350) |
Balance at the end of the year | 3,448,912 | 3,379,014 |
Critical Illness Recovery Hospital | ||
Goodwill | ||
Balance at the beginning of the year | 1,084,761 | 1,078,804 |
Acquisition of businesses | 46,679 | 5,957 |
Measurement period adjustment | 0 | |
Sale of businesses | 0 | 0 |
Balance at the end of the year | 1,131,440 | 1,084,761 |
Rehabilitation Hospital | ||
Goodwill | ||
Balance at the beginning of the year | 432,753 | 430,900 |
Acquisition of businesses | 9,402 | 2,481 |
Measurement period adjustment | 0 | |
Sale of businesses | 0 | (628) |
Balance at the end of the year | 442,155 | 432,753 |
Outpatient Rehabilitation | ||
Goodwill | ||
Balance at the beginning of the year | 646,433 | 649,763 |
Acquisition of businesses | 7,692 | 2,704 |
Measurement period adjustment | 0 | |
Sale of businesses | 0 | (6,034) |
Balance at the end of the year | 654,125 | 646,433 |
Concentra | ||
Goodwill | ||
Balance at the beginning of the year | 1,215,067 | 1,232,488 |
Acquisition of businesses | 8,645 | 12,287 |
Measurement period adjustment | (20) | |
Sale of businesses | (2,520) | (29,688) |
Balance at the end of the year | $ 1,221,192 | $ 1,215,067 |
Intangible Assets - Carrying Va
Intangible Assets - Carrying Value and Amortization of Identifiable Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Total identifiable intangible assets, accumulated amortization | $ (161,206) | $ (130,117) | |
Total identifiable intangible assets, gross carrying amount | 536,085 | 517,658 | |
Total identifiable intangible assets, net carrying amount | 374,879 | 387,541 | |
Amortized intangible assets: | |||
Amortization expense | 29,500 | 27,600 | $ 29,600 |
Estimated amortization expense | |||
2022 | 30,131 | ||
2023 | 29,264 | ||
2024 | 20,674 | ||
2025 | 14,237 | ||
2026 | 13,452 | ||
Trademarks | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Finite-lived intangible assets, gross carrying amount | 5,000 | 5,000 | |
Total identifiable 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 | 304,289 | 291,923 | |
Total identifiable intangible assets, accumulated amortization | (141,111) | (113,346) | |
Finite-lived intangible assets, net carrying amount | 163,178 | 178,577 | |
Non-compete agreements | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Finite-lived intangible assets, gross carrying amount | 36,746 | 33,771 | |
Total identifiable intangible assets, accumulated amortization | (15,095) | (11,771) | |
Finite-lived intangible assets, net carrying amount | 21,651 | 22,000 | |
Trademarks | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Indefinite-lived intangible assets | $ 166,698 | 166,698 | |
Amortized intangible assets: | |||
Weighted average time until next renewal | 7 years 8 months 12 days | ||
Certificates of need | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Indefinite-lived intangible assets | $ 21,478 | 18,392 | |
Accreditations | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||
Indefinite-lived intangible assets | $ 1,874 | $ 1,874 | |
Amortized intangible assets: | |||
Weighted average time until next renewal | 1 year 6 months |
Equity Method Investments (Deta
Equity Method Investments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||
Revenue from contracted services and management fees to related parties | $ 332 | $ 337.6 | $ 308.2 |
Liabilities to related parties | $ 22 | 30.6 | |
BIR JV, LLP | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage of ownership | 49.00% | ||
OHRH, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage of ownership | 49.00% | ||
GlobalRehab—Scottsdale, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage of ownership | 49.00% | ||
ES Rehabilitation, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage of ownership | 49.00% | ||
BHSM Rehabilitation, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage of ownership | 49.00% | ||
Other non current assets | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 270.8 | 251.1 | |
Accounts receivable from related parties, noncurrent | 3.5 | 2.5 | |
Other current assets | |||
Schedule of Equity Method Investments [Line Items] | |||
Accounts receivable from related parties, current | $ 23.9 | $ 13.7 |
Equity Method Investments - Sum
Equity Method Investments - Summarized Combined Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | ||||
Current assets | $ 1,139,439 | $ 1,594,000 | ||
Total Assets | 7,360,171 | 7,655,399 | $ 7,340,288 | |
Current liabilities | 1,273,077 | 1,438,366 | ||
Equity | 1,325,902 | 1,252,973 | 929,035 | $ 916,240 |
Total Liabilities and Equity | 7,360,171 | 7,655,399 | ||
Net income | 499,949 | 344,606 | 201,031 | |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Current assets | 181,838 | 189,571 | ||
Non-current assets | 356,278 | 334,372 | ||
Total Assets | 538,116 | 523,943 | ||
Current liabilities | 89,953 | 96,980 | ||
Non-current liabilities | 103,484 | 118,312 | ||
Equity | 344,679 | 308,651 | ||
Total Liabilities and Equity | 538,116 | 523,943 | ||
Revenues | 587,445 | 562,031 | 536,464 | |
Cost of services and other operating expenses | 503,880 | 496,739 | 476,182 | |
Net income | $ 87,528 | $ 72,172 | $ 58,519 |
Insurance Risk Programs (Detail
Insurance Risk Programs (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Insurance [Abstract] | ||
Discount rate for provisions for losses for professional liability (as a percent) | 3.00% | 3.00% |
Liability recorded after discounting | $ 173.5 | $ 173.6 |
Value of aggregate liability, if the entity did not discount the provisions for losses | 178.5 | 178.4 |
Insurance proceeds receivable | $ 14.5 | $ 13 |
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 | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Principal Outstanding | $ 3,573,835 | $ 3,403,043 |
Unamortized Premium (Discount) | 21,249 | 25,380 |
Unamortized Issuance Costs | (21,127) | (26,404) |
Carrying Value | 3,573,957 | 3,402,019 |
Fair Value | 3,629,348 | 3,473,582 |
Senior Notes | 6.250% senior notes | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 1,225,000 | 1,225,000 |
Unamortized Premium (Discount) | 27,635 | 33,773 |
Unamortized Issuance Costs | (13,951) | (16,953) |
Carrying Value | 1,238,684 | 1,241,820 |
Fair Value | 1,297,104 | 1,316,875 |
Term loan | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 2,103,437 | 2,103,437 |
Unamortized Premium (Discount) | (6,386) | (8,393) |
Unamortized Issuance Costs | (6,961) | (9,149) |
Carrying Value | 2,090,090 | 2,085,895 |
Fair Value | 2,087,661 | 2,082,403 |
Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 85,398 | 74,606 |
Unamortized Premium (Discount) | 0 | 0 |
Unamortized Issuance Costs | (215) | (302) |
Carrying Value | 85,183 | 74,304 |
Fair Value | 85,183 | $ 74,304 |
Revolving facility | Revolving facility | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 160,000 | |
Unamortized Premium (Discount) | 0 | |
Unamortized Issuance Costs | 0 | |
Carrying Value | 160,000 | |
Fair Value | $ 159,400 |
Long-Term Debt and Notes Paya_4
Long-Term Debt and Notes Payable - Principal Maturities Of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
2022 | $ 17,572 | |
2023 | 31,829 | |
2024 | 197,231 | |
2025 | 2,089,354 | |
2026 | 1,226,286 | |
Thereafter | 11,563 | |
Total | 3,573,835 | $ 3,403,043 |
Senior Notes | 6.250% senior notes | ||
Debt Instrument [Line Items] | ||
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 1,225,000 | |
Thereafter | 0 | |
Total | 1,225,000 | 1,225,000 |
Revolving facility | Revolving facility | ||
Debt Instrument [Line Items] | ||
2022 | 0 | |
2023 | 0 | |
2024 | 160,000 | |
2025 | 0 | |
2026 | 0 | |
Thereafter | 0 | |
Total | 160,000 | |
Term loan | ||
Debt Instrument [Line Items] | ||
2022 | 0 | |
2023 | 4,757 | |
2024 | 11,150 | |
2025 | 2,087,530 | |
2026 | 0 | |
Thereafter | 0 | |
Total | 2,103,437 | 2,103,437 |
Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
2022 | 17,572 | |
2023 | 27,072 | |
2024 | 26,081 | |
2025 | 1,824 | |
2026 | 1,286 | |
Thereafter | 11,563 | |
Total | $ 85,398 | $ 74,606 |
Long-Term Debt and Notes Paya_5
Long-Term Debt and Notes Payable - Credit Facilities (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 02, 2021 | Mar. 06, 2017 | |
Long-term debt and notes payable | |||||
Payments on term loans | $ 0 | $ 39,843,000 | $ 1,618,170,000 | ||
Term loan | Select Medical Corporation | 2017 Credit Facilities | |||||
Long-term debt and notes payable | |||||
Aggregate principal amount | $ 2,265,000,000 | ||||
Percentage of capital stock of foreign subsidiaries | 65.00% | ||||
Payments on term loans | $ 0 | ||||
Term loan | Select Medical Corporation | 2017 Credit Facilities | London Interbank Offered Rate (LIBOR) | |||||
Long-term debt and notes payable | |||||
Interest rate margin (as a percent) | 2.25% | ||||
Term loan | Select Medical Corporation | 2017 Credit Facilities | Minimum | Adjusted LIBO | |||||
Long-term debt and notes payable | |||||
Interest rate margin (as a percent) | 2.25% | ||||
Term loan | Select Medical Corporation | 2017 Credit Facilities | Minimum | Alternate Base Rate | |||||
Long-term debt and notes payable | |||||
Interest rate margin (as a percent) | 1.25% | ||||
Term loan | Select Medical Corporation | 2017 Credit Facilities | Maximum | Adjusted LIBO | |||||
Long-term debt and notes payable | |||||
Interest rate margin (as a percent) | 2.50% | ||||
Term loan | Select Medical Corporation | 2017 Credit Facilities | Maximum | Alternate Base Rate | |||||
Long-term debt and notes payable | |||||
Interest rate margin (as a percent) | 1.50% | ||||
Revolving facility | Select Medical Corporation | Revolving facility | 2017 Credit Facilities | |||||
Long-term debt and notes payable | |||||
Maximum borrowing capacity | $ 650,000,000 | 450,000,000 | |||
Remaining borrowing capacity | $ 434,700,000 | ||||
Outstanding borrowings | $ 160,000,000 | ||||
Leverage ratio | 3.77 | ||||
Percentage of capital stock of foreign subsidiaries | 65.00% | ||||
Payments on term loans | $ 0 | ||||
Revolving facility | Select Medical Corporation | Revolving facility | 2017 Credit Facilities | Alternate Base Rate | |||||
Long-term debt and notes payable | |||||
Interest rate margin (as a percent) | 1.25% | ||||
Revolving facility | Select Medical Corporation | Revolving facility | 2017 Credit Facilities | London Interbank Offered Rate (LIBOR) | |||||
Long-term debt and notes payable | |||||
Interest rate margin (as a percent) | 2.25% | ||||
Revolving facility | Select Medical Corporation | Revolving facility | 2017 Credit Facilities | Minimum | Adjusted LIBO | |||||
Long-term debt and notes payable | |||||
Interest rate margin (as a percent) | 2.25% | ||||
Revolving facility | Select Medical Corporation | Revolving facility | 2017 Credit Facilities | Minimum | Alternate Base Rate | |||||
Long-term debt and notes payable | |||||
Interest rate margin (as a percent) | 1.25% | ||||
Revolving facility | Select Medical Corporation | Revolving facility | 2017 Credit Facilities | Maximum | Leverage ratio less than 7.0 to 1.00 | |||||
Long-term debt and notes payable | |||||
Leverage ratio | 7 | ||||
Revolving facility | Select Medical Corporation | Revolving facility | 2017 Credit Facilities | Maximum | Adjusted LIBO | |||||
Long-term debt and notes payable | |||||
Interest rate margin (as a percent) | 2.50% | ||||
Revolving facility | Select Medical Corporation | Revolving facility | 2017 Credit Facilities | Maximum | Alternate Base Rate | |||||
Long-term debt and notes payable | |||||
Interest rate margin (as a percent) | 1.50% | ||||
Revolving facility | Select Medical Corporation | Standby letters of credit | 2017 Credit Facilities | |||||
Long-term debt and notes payable | |||||
Maximum borrowing capacity | $ 125,000,000 | $ 75,000,000 | |||
Outstanding letters of credit | $ 55,300,000 |
Long-Term Debt and Notes Paya_6
Long-Term Debt and Notes Payable - 6.250% Senior Notes (Details) - 6.250% senior notes - Senior notes - Select Medical Corporation - USD ($) | Dec. 10, 2019 | Dec. 31, 2021 | Aug. 01, 2019 |
Debt Instrument [Line Items] | |||
Interest rate of debt | 6.25% | ||
Aggregate principal amount | $ 675,000,000 | $ 550,000,000 | |
Premium received upon issuance (percentage) | 106.00% | ||
Principal amount of senior notes redeemable with proceeds of equity offerings (percentage) | 40.00% | ||
Redemption price (percentage) | 106.25% | ||
Redemption price, change of control (percentage) | 101.00% |
Long-Term Debt and Notes Paya_7
Long-Term Debt and Notes Payable - Concentra-JPM Revolving Facility (Details) $ in Millions | Jun. 01, 2015USD ($) |
Concentra-JPM first lien credit agreement | Revolving facility | Concentra Inc. | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 100 |
Long-Term Debt and Notes Paya_8
Long-Term Debt and Notes Payable - Loss on Early Retirement of Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||
Loss on early retirement of debt | $ 0 | $ 0 | $ 38,083 |
Loss on extinguishment of debt | $ 0 | $ 0 | 22,130 |
Loss on debt modification | $ 16,000 |
Interest Rate Cap - Narrative (
Interest Rate Cap - Narrative (Details) - Interest Rate Cap $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Derivative [Line Items] | |
Interest rate rap (as a percent) | 1.00% |
Interest rate cap, notional amount | $ 2,000 |
Annual premium (in percent) | 0.000916 |
Estimated pre-tax gains expected to be reclassified in the next twelve months | $ 1 |
Interest Rate Cap - Schedule of
Interest Rate Cap - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,252,973 | $ 929,035 | $ 916,240 |
Ending balance | 1,325,902 | 1,252,973 | 929,035 |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Interest Rate Cap | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (2,027) | 0 | 0 |
Gain (loss) on interest rate cap cash flow hedge | 14,270 | (2,027) | 0 |
Amounts reclassified from AOCI | 39 | 0 | 0 |
Ending balance | $ 12,282 | $ (2,027) | $ 0 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Interest Rate Cap (Details) - Interest Rate Cap - Level 2 - Fair Value, Recurring - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Other assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate cap contract, non-current portion | $ 18,055 | $ 0 |
Accrued other | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate cap contract, current portion | 330 | 1,339 |
Other non-current liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate cap contract, non-current portion | $ 0 | $ 1,392 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 3,629,348 | $ 3,473,582 |
Senior notes | 6.250% senior notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 1,238,684 | 1,241,820 |
Fair Value | 1,297,104 | 1,316,875 |
Senior notes | 6.250% senior notes | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 1,238,684 | 1,241,820 |
Fair Value | 1,297,104 | 1,316,875 |
Term loan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 2,090,090 | 2,085,895 |
Fair Value | 2,087,661 | 2,082,403 |
Term loan | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 2,090,090 | 2,085,895 |
Fair Value | 2,087,661 | 2,082,403 |
Revolving facility | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 160,000 | 0 |
Fair Value | 159,400 | $ 0 |
Revolving facility | Revolving facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 160,000 | |
Fair Value | $ 159,400 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - Common Stock Repurchase Program $ in Millions | Dec. 31, 2021USD ($) |
Stock Repurchase Program [Line Items] | |
Maximum amount authorized to be repurchased under the common stock repurchase program | $ 1,000 |
Repurchase program available capacity | $ 584.8 |
Stock Repurchase Program - Shar
Stock Repurchase Program - Share Repurchases and Repurchase Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Repurchase Program [Line Items] | |||
Cost of shares repurchased | $ 79,476 | $ 16,034 | $ 38,531 |
Common Stock Repurchase Program | |||
Stock Repurchase Program [Line Items] | |||
Shares repurchased (in shares) | 1,770,720 | 491,559 | 2,165,221 |
Cost of shares repurchased | $ 58,598 | $ 8,692 | $ 33,163 |
Segment Information - Selected
Segment Information - Selected Financial Data (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment information | |||
Revenue | $ 6,204,515 | $ 5,531,713 | $ 5,453,922 |
Adjusted EBITDA | 947,359 | 800,566 | 710,908 |
Total assets | 7,360,171 | 7,655,399 | 7,340,288 |
Capital expenditures | 180,537 | 146,440 | 157,126 |
Corporate, non-Segment | |||
Segment information | |||
Revenue | 292,001 | 298,194 | 271,605 |
Adjusted EBITDA | (33,229) | (27,120) | (108,130) |
Total assets | 238,258 | 590,134 | 452,050 |
Capital expenditures | 18,756 | 10,153 | 6,608 |
Critical Illness Recovery Hospital | Operating Segments | |||
Segment information | |||
Revenue | 2,246,772 | 2,077,499 | 1,836,518 |
Adjusted EBITDA | 267,993 | 342,427 | 254,868 |
Total assets | 2,304,116 | 2,213,892 | 2,099,833 |
Capital expenditures | 65,690 | 49,726 | 45,573 |
Rehabilitation Hospital | Operating Segments | |||
Segment information | |||
Revenue | 849,340 | 734,673 | 670,971 |
Adjusted EBITDA | 184,704 | 153,203 | 135,857 |
Total assets | 1,194,136 | 1,148,617 | 1,127,028 |
Capital expenditures | 13,003 | 7,571 | 27,216 |
Outpatient Rehabilitation | Operating Segments | |||
Segment information | |||
Revenue | 1,084,361 | 919,913 | 1,046,011 |
Adjusted EBITDA | 138,275 | 79,164 | 151,831 |
Total assets | 1,348,316 | 1,302,110 | 1,289,190 |
Capital expenditures | 36,301 | 28,876 | 33,628 |
Concentra | Operating Segments | |||
Segment information | |||
Revenue | 1,732,041 | 1,501,434 | 1,628,817 |
Adjusted EBITDA | 389,616 | 252,892 | 276,482 |
Total assets | 2,275,345 | 2,400,646 | 2,372,187 |
Capital expenditures | $ 46,787 | $ 50,114 | $ 44,101 |
Segment Information - Reconcili
Segment Information - Reconciliation of Adjusted EBITDA to Income Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment information | |||
Adjusted EBITDA | $ 947,359 | $ 800,566 | $ 710,908 |
Depreciation and amortization | (202,645) | (205,659) | (212,576) |
Stock compensation expense | (30,940) | (27,250) | (26,451) |
Income from operations | 713,774 | 567,657 | 471,881 |
Loss on early retirement of debt | 0 | 0 | (38,083) |
Equity in earnings of unconsolidated subsidiaries | 44,428 | 29,440 | 24,989 |
Gain on sale of businesses | 2,155 | 12,387 | 6,532 |
Interest income | 5,350 | 0 | 0 |
Interest expense | (135,985) | (153,011) | (200,570) |
Income before income taxes | 629,722 | 456,473 | 264,749 |
Operating Segments | Critical Illness Recovery Hospital | |||
Segment information | |||
Adjusted EBITDA | 267,993 | 342,427 | 254,868 |
Depreciation and amortization | (53,094) | (51,531) | (50,763) |
Stock compensation expense | 0 | 0 | 0 |
Income from operations | 214,899 | 290,896 | 204,105 |
Operating Segments | Rehabilitation Hospital | |||
Segment information | |||
Adjusted EBITDA | 184,704 | 153,203 | 135,857 |
Depreciation and amortization | (27,677) | (27,727) | (27,322) |
Stock compensation expense | 0 | 0 | 0 |
Income from operations | 157,027 | 125,476 | 108,535 |
Operating Segments | Outpatient Rehabilitation | |||
Segment information | |||
Adjusted EBITDA | 138,275 | 79,164 | 151,831 |
Depreciation and amortization | (29,592) | (29,009) | (28,301) |
Stock compensation expense | 0 | 0 | 0 |
Income from operations | 108,683 | 50,155 | 123,530 |
Operating Segments | Concentra | |||
Segment information | |||
Adjusted EBITDA | 389,616 | 252,892 | 276,482 |
Depreciation and amortization | (82,210) | (87,865) | (96,807) |
Stock compensation expense | (2,142) | (2,512) | (3,069) |
Income from operations | 305,264 | 162,515 | 176,606 |
Corporate, non-Segment | |||
Segment information | |||
Adjusted EBITDA | (33,229) | (27,120) | (108,130) |
Depreciation and amortization | (10,072) | (9,527) | (9,383) |
Stock compensation expense | (28,798) | (24,738) | (23,382) |
Income from operations | $ (72,099) | $ (61,385) | $ (140,895) |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 6,204,515 | $ 5,531,713 | $ 5,453,922 |
Total patient services revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 5,782,800 | 5,107,482 | 5,040,712 |
Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,418,970 | 1,384,966 | 1,414,132 |
Non-Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 4,363,830 | 3,722,516 | 3,626,580 |
Other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 421,715 | 424,231 | 413,210 |
Operating Segments | Critical Illness Recovery Hospital | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 2,246,772 | 2,077,499 | 1,836,518 |
Operating Segments | Critical Illness Recovery Hospital | Total patient services revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 2,234,801 | 2,065,003 | 1,824,613 |
Operating Segments | Critical Illness Recovery Hospital | Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 833,387 | 900,593 | 907,963 |
Operating Segments | Critical Illness Recovery Hospital | Non-Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,401,414 | 1,164,410 | 916,650 |
Operating Segments | Critical Illness Recovery Hospital | Other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 11,971 | 12,496 | 11,905 |
Operating Segments | Rehabilitation Hospital | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 849,340 | 734,673 | 670,971 |
Operating Segments | Rehabilitation Hospital | Total patient services revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 807,249 | 695,172 | 632,627 |
Operating Segments | Rehabilitation Hospital | Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 412,440 | 345,642 | 332,514 |
Operating Segments | Rehabilitation Hospital | Non-Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 394,809 | 349,530 | 300,113 |
Operating Segments | Rehabilitation Hospital | Other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 42,091 | 39,501 | 38,344 |
Operating Segments | Outpatient Rehabilitation | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,084,361 | 919,913 | 1,046,011 |
Operating Segments | Outpatient Rehabilitation | Total patient services revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,015,867 | 857,047 | 965,978 |
Operating Segments | Outpatient Rehabilitation | Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 172,064 | 137,447 | 171,690 |
Operating Segments | Outpatient Rehabilitation | Non-Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 843,803 | 719,600 | 794,288 |
Operating Segments | Outpatient Rehabilitation | Other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 68,494 | 62,866 | 80,033 |
Operating Segments | Concentra | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,732,041 | 1,501,434 | 1,628,817 |
Operating Segments | Concentra | Total patient services revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,724,883 | 1,490,260 | 1,617,494 |
Operating Segments | Concentra | Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,079 | 1,284 | 1,965 |
Operating Segments | Concentra | Non-Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,723,804 | 1,488,976 | 1,615,529 |
Operating Segments | Concentra | Other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 7,158 | 11,174 | 11,323 |
Corporate, non-Segment | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 292,001 | 298,194 | 271,605 |
Corporate, non-Segment | Total patient services revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
Corporate, non-Segment | Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
Corporate, non-Segment | Non-Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
Corporate, non-Segment | Other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 292,001 | $ 298,194 | $ 271,605 |
Sale of Businesses (Details)
Sale of Businesses (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($)business | Dec. 31, 2019USD ($) | |
Sale of Businesses | |||
Gain (loss) on sale of businesses | $ 2,155 | $ 12,387 | $ 6,532 |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Sale of Businesses | |||
Number of businesses sold | business | 3 | ||
Selling price | $ 87,000 | ||
Loss payments | 9,000 | ||
Outpatient Rehabilitation | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Sale of Businesses | |||
Gain (loss) on sale of businesses | $ 6,500 | ||
Three Businesses Sold | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Sale of Businesses | |||
Gain (loss) on sale of businesses | 21,400 | ||
Concentra Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Sale of Businesses | |||
Gain (loss) on sale of businesses | $ 2,200 | ||
Previously Sold Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Sale of Businesses | |||
Gain (loss) on sale of businesses | $ (9,000) |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock based Compensation | |||
Number of shares authorized (in shares) | 7,502,000 | ||
Number of shares authorized, remaining (in shares) | 4,660,593 | ||
Total intrinsic value of options exercised | $ 0.7 | ||
Restricted stock awards | |||
Stock based Compensation | |||
Weighted average grant date fair value of granted shares (in dollars per share) | $ 38.59 | $ 17.17 | $ 16.60 |
Fair value of vested shares | $ 27.6 | $ 22.2 | $ 15.6 |
Minimum | Restricted stock awards | |||
Stock based Compensation | |||
Award vesting period | 3 years | ||
Maximum | Restricted stock awards | |||
Stock based Compensation | |||
Award vesting period | 4 years |
Stock-based Compensation - Rest
Stock-based Compensation - Restricted Stock Awards (Details) - Restricted stock awards - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Shares | |||
Unvested balance, at beginning of the year (in shares) | 4,523 | ||
Granted (in shares) | 1,363 | ||
Vested (in shares) | (1,409) | ||
Forfeited (in shares) | (18) | ||
Unvested balance, at end of the year (in shares) | 4,459 | 4,523 | |
Weighted Average Grant Date Fair Value | |||
Unvested balance, at beginning of the year (in dollars per share) | $ 17.74 | ||
Granted (in dollars per share) | 38.59 | $ 17.17 | $ 16.60 |
Vested (in dollars per share) | 19.57 | ||
Forfeited (in dollars per share) | 15.88 | ||
Unvested balance, at end of the year (in dollars per share) | $ 23.54 | $ 17.74 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock based Compensation | |||
Total | $ 30,940 | $ 27,250 | $ 26,451 |
Stock compensation expense for each of the next five years, based on restricted stock awards granted | |||
2022 | 31,762 | ||
2023 | 21,749 | ||
2024 | 11,990 | ||
2025 | 2,093 | ||
2026 | 60 | ||
Included in general and administrative | |||
Stock based Compensation | |||
Total | 24,598 | 22,053 | 20,334 |
Included in cost of services | |||
Stock based Compensation | |||
Total | $ 6,342 | $ 5,197 | $ 6,117 |
Income Taxes - Tax Expense Comp
Income Taxes - Tax Expense Components and Reconciliation to Federal Statutory Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current income tax expense: | |||
Federal | $ 99,254 | $ 95,633 | $ 55,822 |
State and local | 25,464 | 30,949 | 15,331 |
Total current income tax expense | 124,718 | 126,582 | 71,153 |
Deferred income tax expense (benefit) | 5,055 | (14,715) | (7,435) |
Total income tax expense | $ 129,773 | $ 111,867 | $ 63,718 |
Reconciliation of the statutory federal income tax rate to the effective income tax rate | |||
Federal income tax at statutory rate | 21.00% | 21.00% | 21.00% |
State and local income taxes, less federal income tax benefit | 4.20% | 5.80% | 4.20% |
Permanent differences | 0.50% | 0.50% | 0.40% |
Deferred income taxes - state income tax rate adjustment | (1.20%) | 0.00% | 0.80% |
Uncertain tax positions | 0.00% | (0.10%) | (0.10%) |
Valuation allowance | 0.20% | 0.00% | 0.50% |
Limitation on Officers’ compensation | 0.90% | 1.10% | 1.30% |
Stock-based compensation | (1.70%) | (1.40%) | (0.70%) |
Non-controlling interest | (1.90%) | (3.30%) | (2.90%) |
Other | (1.40%) | 0.90% | (0.40%) |
Effective income tax rate | 20.60% | 24.50% | 24.10% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets | ||
Implicit discounts and adjustments | $ 13,058 | $ 13,825 |
Compensation and benefit-related accruals | 57,604 | 54,464 |
Professional malpractice liability insurance | 18,462 | 17,330 |
Deferred revenue | 95 | 163 |
Federal and state net operating loss and state tax credit carryforwards | 38,022 | 34,417 |
Interest limitation carryforward | 494 | 686 |
Stock awards | 4,285 | 3,638 |
Equity investments | 4,414 | 4,627 |
Operating lease liabilities | 230,416 | 223,875 |
CARES Act employer payroll tax deferral | 11,594 | 23,001 |
Derivatives | 0 | 705 |
Other | 4,850 | 2,489 |
Deferred tax assets | 383,294 | 379,220 |
Valuation allowance | (17,773) | (17,339) |
Deferred tax assets, net of valuation allowance | 365,521 | 361,881 |
Deferred tax liabilities | ||
Deferred income | 0 | (4,595) |
Investment in unconsolidated affiliates | (12,606) | (10,401) |
Depreciation and amortization | (245,859) | (238,655) |
Deferred financing costs | (3,696) | (5,003) |
Operating lease right-of-use assets | (215,640) | (210,045) |
Derivatives | (4,094) | 0 |
Other | (4,252) | (4,844) |
Deferred tax liabilities | (486,147) | (473,543) |
Deferred tax liabilities, net of deferred tax assets | $ (120,626) | $ (111,662) |
Income Taxes - Deferred Tax A_2
Income Taxes - Deferred Tax Assets and Liabilities Included in the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Other assets | $ 22,166 | $ 20,759 |
Non-current deferred tax liability | (142,792) | (132,421) |
Deferred tax liabilities, net of deferred tax assets | $ (120,626) | $ (111,662) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Mar. 27, 2020 | |
Income Taxes [Line Items] | |||
Increase (decrease) in deferred income taxes | $ 11,500 | $ (23,000) | $ 15,500 |
Increase (decrease) in current income taxes payable | $ (11,500) | 23,000 | $ (15,500) |
Employer payroll taxes paid (percentage) | 50.00% | ||
Employer payroll taxes to be paid in next twelve months under CARES Act (percentage) | 50.00% | ||
Valuation allowance (release) increase | $ 400 | (1,100) | |
Deferred tax liabilities, net of deferred tax assets | $ 120,626 | $ 111,662 | |
Period of review for entities with cumulative losses | 3 years | ||
State and Local Jurisdiction | |||
Income Taxes [Line Items] | |||
Net operating losses | $ 620,300 |
Income Taxes - Expiration of St
Income Taxes - Expiration of State NOL's and Gross Valuation Allowances (Details) - State and Local Jurisdiction $ in Thousands | Dec. 31, 2021USD ($) |
State Net Operating Losses | |
2022 | $ 25,823 |
2023 | 16,718 |
2024 | 25,737 |
2025 | 36,614 |
Thereafter through 2040 | 515,430 |
Gross Valuation Allowance | |
2022 | 9,755 |
2023 | 8,636 |
2024 | 8,761 |
2025 | 7,743 |
Thereafter through 2040 | $ 305,621 |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Contractual dividends paid | $ 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 | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Net income | $ 499,949 | $ 344,606 | $ 201,031 |
Less: net income attributable to non-controlling interests | 97,724 | 85,611 | 52,582 |
Net income attributable to Select Medical Holdings Corporation | 402,225 | 258,995 | 148,449 |
Basic EPS | |||
Less: Distributed and undistributed income attributable to participating securities - Basic EPS | 13,435 | 8,896 | 4,995 |
Distributed and undistributed income attributable to common shares | 388,790 | 250,099 | 143,454 |
Diluted EPS | |||
Less: Distributed and undistributed income attributable to participating securities - Diluted EPS | 13,435 | 8,896 | 4,994 |
Distributed and undistributed income attributable to common shares | $ 388,790 | $ 250,099 | $ 143,455 |
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 | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net Income Allocation, Basic | |||
Net income allocated to common shares - basic | $ 388,790 | $ 250,099 | $ 143,454 |
Net income allocated to participating securities - basic | 13,435 | 8,896 | 4,995 |
Net Income Allocation, Diluted | |||
Net income allocated to common shares - diluted | 388,790 | 250,099 | 143,455 |
Net income allocated to participating securities - diluted | 13,435 | 8,896 | 4,994 |
Net income attributable to Select Medical Holdings Corporation | $ 402,225 | $ 258,995 | $ 148,449 |
Weighted average common shares outstanding, basic (in shares) | 130,249 | 129,780 | 130,248 |
Weighted average common shares outstanding, diluted (in shares) | 130,249 | 129,780 | 130,276 |
Weighted average participating securities outstanding (in shares) | 4,501 | 4,616 | 4,535 |
Basic EPS | |||
Basic EPS (in dollars per share) | $ 2.98 | $ 1.93 | $ 1.10 |
Diluted EPS | |||
Diluted EPS (in dollars per share) | $ 2.98 | $ 1.93 | $ 1.10 |
Commitments and Contingencies -
Commitments and Contingencies - Construction Commitments (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Construction Commitments | |
Construction Commitments | |
Construction contract commitments | $ 18.8 |
Commitments and Contingencies_2
Commitments and Contingencies - Litigation (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Professional liability claims | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | $ 37 |
General liability claims | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | 40 |
Joint Venture Operations | Professional liability claims | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | 80 |
Joint Venture Operations | Minimum | Professional liability claims | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | 23 |
Joint Venture Operations | Maximum | Professional liability claims | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | $ 33 |
Commitments and Contingencies_3
Commitments and Contingencies - Medicare Duel-Eligible Litigation (Details) - Judicial Ruling $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Gain Contingencies [Line Items] | |
Medicare bad debt reimbursement claim | $ 19.9 |
Accrued interest | $ 5.4 |
CARES Act (Details)
CARES Act (Details) - USD ($) $ in Thousands | 12 Months Ended | 21 Months Ended | 24 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2021 | |
Unusual or Infrequent Items, or Both [Abstract] | ||||
Government assistance, provider relief payments received, CARES Act | $ 215,800 | |||
Government assistance recognized in earnings, CARES Act | $ 123,800 | $ 90,000 | ||
Unearned government assistance, CARES Act | 93 | 82,607 | 93 | $ 93 |
Government advances received under Medicare Accelerated and Advance Payments Program | 325,000 | |||
Government advances recouped, CARES Act | 241,200 | |||
Government advances, CARES Act | 83,790 | 321,807 | 83,790 | 83,790 |
Deferred payroll taxes, CARES Act | $ 53,000 | $ 106,200 | $ 53,000 | $ 53,000 |
Subsequent Event (Details)
Subsequent Event (Details) | Feb. 17, 2022$ / shares |
Subsequent Event | |
Subsequent Event [Line Items] | |
Cash dividend declared (in dollars per share) | $ 0.125 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - Income Tax Valuation Allowance - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in valuation and qualifying accounts | |||
Balance at Beginning of Year | $ 17,339 | $ 18,461 | $ 17,893 |
Charged to Cost and Expenses | 434 | (484) | 568 |
Acquisitions | 0 | 0 | 0 |
Deduction | 0 | (638) | 0 |
Balance at End of Year | $ 17,773 | $ 17,339 | $ 18,461 |