Document and Entity Information
Document and Entity Information - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 07, 2019 | |
Document Information [Line Items] | ||
Entity Central Index Key | 0001351051 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity Registrant Name | Genesis Healthcare, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-3934755 | |
Entity Address, Address Line One | 101 East State Street | |
Entity Address, City or Town | Kennett Square | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19348 | |
City Area Code | 610 | |
Local Phone Number | 444-6350 | |
Title of 12(b) Security | Class A common stock, $0.001 par value per share | |
Trading Symbol | GEN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Listing, Par Value Per Share | $ 0.001 | |
Entity Common Stock, Shares Outstanding | 107,734,326 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Listing, Par Value Per Share | 0.001 | |
Entity Common Stock, Shares Outstanding | 744,396 | |
Class C Common Stock | ||
Document Information [Line Items] | ||
Entity Listing, Par Value Per Share | $ 0.001 | |
Entity Common Stock, Shares Outstanding | 56,326,680 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 34,837 | $ 20,865 |
Restricted cash and equivalents | 42,807 | 73,762 |
Restricted investments in marketable securities | 35,950 | 35,631 |
Accounts receivable | 545,259 | 622,717 |
Prepaid expenses | 81,661 | 82,747 |
Other current assets | 39,014 | 36,528 |
Assets held for sale | 4,740 | 3,375 |
Total current assets | 784,268 | 875,625 |
Property and equipment, net of accumulated depreciation of $417,437 and $976,802 at September 30, 2019 and December 31, 2018, respectively | 957,218 | 2,887,554 |
Finance lease right-of-use assets, net of accumulated amortization of $22,420 at September 30, 2019 | 37,685 | |
Operating lease right-of-use assets | 2,416,914 | |
Restricted cash and equivalents | 50,425 | 47,649 |
Restricted investments in marketable securities | 93,044 | 100,522 |
Other long-term assets | 120,738 | 125,595 |
Deferred income taxes | 5,617 | 5,867 |
Identifiable intangible assets, net of accumulated amortization of $73,610 and $99,160 at September 30, 2019 and December 31, 2018, respectively | 90,079 | 119,082 |
Goodwill | 85,642 | 85,642 |
Assets held for sale | 32,517 | 16,087 |
Total assets | 4,674,147 | 4,263,623 |
Current liabilities: | ||
Current installments of long-term debt | 121,745 | 122,531 |
Current installments of finance lease obligations | 2,738 | |
Current installments of finance lease obligations under Topic 840 | 2,171 | |
Current installments of operating lease obligations | 137,574 | |
Current installments of financing obligations under Topic 840 | 2,001 | |
Accounts payable | 254,443 | 234,786 |
Accrued expenses | 219,120 | 227,813 |
Accrued compensation | 153,488 | 172,726 |
Self-insurance reserves | 137,111 | 149,545 |
Current portion of liabilities held for sale | 1,020 | 639 |
Total current liabilities | 1,027,239 | 912,212 |
Long-term liabilities: | ||
Long-term debt | 1,420,952 | 1,082,933 |
Finance lease obligations | 39,676 | |
Finance lease obligations under Topic 840 | 967,942 | |
Operating lease obligations | 2,697,496 | |
Financing obligations | 2,732,939 | |
Deferred income taxes | 5,499 | 6,281 |
Self-insurance reserves | 427,069 | 453,993 |
Liabilities held for sale | 45,314 | 25,942 |
Other long-term liabilities | 76,125 | 126,247 |
Commitments and contingencies | ||
Stockholders’ deficit: | ||
Additional paid-in-capital | 249,063 | 270,408 |
Accumulated deficit | (998,900) | (1,609,828) |
Accumulated other comprehensive income (loss) | 610 | (262) |
Total stockholders’ deficit before noncontrolling interests | (749,062) | (1,339,520) |
Noncontrolling interests | (316,161) | (705,346) |
Total stockholders' deficit | (1,065,223) | (2,044,866) |
Total liabilities and stockholders’ deficit | 4,674,147 | 4,263,623 |
Class A Common Stock | ||
Stockholders’ deficit: | ||
Common stock | 108 | 101 |
Class B Common Stock | ||
Stockholders’ deficit: | ||
Common stock | 1 | 1 |
Class C Common Stock | ||
Stockholders’ deficit: | ||
Common stock | $ 56 | $ 60 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Other assets: | ||
Accumulated depreciation on property and equipment | $ 417,437 | $ 976,802 |
Accumulated amortization on finance lease ROU asset | 22,420 | |
Accumulated amortization on intangible assets | $ 73,610 | $ 99,160 |
Class A Common Stock | ||
Stockholders’ deficit: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, issued (in shares) | 107,534,292 | 101,235,935 |
Common stock, shares, outstanding (in shares) | 107,534,292 | 101,235,935 |
Class B Common Stock | ||
Stockholders’ deficit: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, issued (in shares) | 744,396 | 744,396 |
Common stock, shares, outstanding (in shares) | 744,396 | 744,396 |
Class C Common Stock | ||
Stockholders’ deficit: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued (in shares) | 56,526,680 | 59,700,801 |
Common stock, shares, outstanding (in shares) | 56,526,680 | 59,700,801 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||
Net revenues | $ 1,123,705 | $ 1,217,271 | $ 3,430,397 | $ 3,790,703 | ||||
Salaries, wages and benefits | 620,493 | 680,604 | 1,889,062 | 2,122,128 | ||||
Other operating expenses | 339,441 | 371,064 | 1,014,507 | 1,125,779 | ||||
General and administrative costs | 35,930 | 35,482 | 107,024 | 114,404 | ||||
Lease expense | 100,018 | 288,665 | ||||||
Lease expense under Topic 840 | 32,366 | 97,548 | ||||||
Depreciation and amortization expense | 34,932 | 53,038 | 101,395 | 168,036 | ||||
Interest expense | 37,099 | 115,695 | 141,590 | 348,687 | ||||
Loss on early extinguishment of debt | 2,460 | 2,436 | 9,785 | |||||
Investment income | (2,071) | (2,178) | (6,078) | (4,856) | ||||
Other income | (131,811) | (20,207) | (172,141) | (42,360) | ||||
Transaction costs | 12,941 | 11,361 | 23,025 | 26,567 | ||||
Long-lived asset impairments | 16,037 | 32,390 | 16,937 | 88,008 | ||||
Goodwill and identifiable intangible asset impairments | 929 | 2,061 | ||||||
Equity in net (income) loss of unconsolidated affiliates | (93) | (152) | (178) | 106 | ||||
Income (loss) before income tax benefit | 58,329 | (93,121) | 24,153 | (265,190) | ||||
Income tax benefit | (569) | (1,220) | (680) | (1,759) | ||||
Net income (loss) | 58,898 | $ (8,983) | $ (25,082) | (91,901) | $ (62,857) | $ (108,673) | 24,833 | (263,431) |
Less net (income) loss attributable to noncontrolling interests | (12,801) | 33,773 | 1,182 | 97,153 | ||||
Net income (loss) attributable to Genesis Healthcare, Inc. | $ 46,097 | $ (58,128) | $ 26,015 | $ (166,278) | ||||
Denominator: | ||||||||
Weighted-average shares outstanding for basic net income (loss) per share | 109,123 | 102,489 | 106,581 | 100,461 | ||||
Net loss per common share: | ||||||||
Basic net income (loss) per common share attributable to Genesis Healthcare, Inc. | $ 0.42 | $ (0.57) | $ 0.24 | $ (1.66) | ||||
Diluted: | ||||||||
Weighted-average shares outstanding for diluted net income (loss) per share | 166,002 | 102,489 | 164,583 | 100,461 | ||||
Numerator: | ||||||||
Diluted net income (loss) per common share attributable to Genesis Healthcare, Inc. | $ 0.40 | $ (0.57) | $ 0.21 | $ (1.66) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income (loss) | $ 58,898 | $ (91,901) | $ 24,833 | $ (263,431) |
Net unrealized gain (loss) on marketable securities, net of tax | 98 | (468) | 1,216 | (529) |
Comprehensive income (loss) | 58,996 | (92,369) | 26,049 | (263,960) |
Less: comprehensive (income) loss attributable to noncontrolling interests | (12,830) | 33,945 | 838 | 97,479 |
Comprehensive income (loss) attributable to Genesis Healthcare, Inc. | $ 46,166 | $ (58,424) | $ 26,887 | $ (166,481) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Common StockClass A Common Stock | Common StockClass B Common Stock | Common StockClass C Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | Stockholders' Deficit | Noncontrolling Interests | Total |
Balance, beginning of period at Dec. 31, 2017 | $ 97 | $ 1 | $ 61 | $ 290,573 | $ (1,374,597) | $ (362) | $ (1,084,227) | $ (595,905) | $ (1,680,132) |
Balance, beginning of period (in shares) at Dec. 31, 2017 | 97,101 | 744 | 61,561 | ||||||
Increase (decrease) in stockholders' deficit | |||||||||
Net loss | (68,538) | (68,538) | (40,135) | (108,673) | |||||
Net unrealized gain (loss) on marketable securities, net of tax | (214) | (214) | (124) | (338) | |||||
Share-based compensation | 2,427 | 2,427 | 2,427 | ||||||
Issuance of common stock, shares | 40 | ||||||||
Conversion of common stock among classes | $ 1 | $ (1) | (8,635) | (8,635) | 8,635 | ||||
Conversion of common stock among classes (in shares) | 830 | (830) | |||||||
Distributions to noncontrolling interests | (14) | (14) | |||||||
Balance, end of period at Mar. 31, 2018 | $ 98 | $ 1 | $ 60 | 284,365 | (1,443,135) | (576) | (1,159,187) | (627,543) | (1,786,730) |
Balance, end of period (in shares) at Mar. 31, 2018 | 97,971 | 744 | 60,731 | ||||||
Balance, beginning of period at Dec. 31, 2017 | $ 97 | $ 1 | $ 61 | 290,573 | (1,374,597) | (362) | (1,084,227) | (595,905) | (1,680,132) |
Balance, beginning of period (in shares) at Dec. 31, 2017 | 97,101 | 744 | 61,561 | ||||||
Increase (decrease) in stockholders' deficit | |||||||||
Net loss | (263,431) | ||||||||
Net unrealized gain (loss) on marketable securities, net of tax | (529) | ||||||||
Balance, end of period at Sep. 30, 2018 | $ 101 | $ 1 | $ 60 | 267,882 | (1,540,875) | (565) | (1,273,396) | (665,335) | (1,938,731) |
Balance, end of period (in shares) at Sep. 30, 2018 | 101,126 | 744 | 59,701 | ||||||
Balance, beginning of period at Mar. 31, 2018 | $ 98 | $ 1 | $ 60 | 284,365 | (1,443,135) | (576) | (1,159,187) | (627,543) | (1,786,730) |
Balance, beginning of period (in shares) at Mar. 31, 2018 | 97,971 | 744 | 60,731 | ||||||
Increase (decrease) in stockholders' deficit | |||||||||
Net loss | (39,612) | (39,612) | (23,245) | (62,857) | |||||
Net unrealized gain (loss) on marketable securities, net of tax | 307 | 307 | (30) | 277 | |||||
Share-based compensation | 2,130 | 2,130 | 2,130 | ||||||
Issuance of common stock | $ 2 | (2) | |||||||
Issuance of common stock, shares | 2,008 | ||||||||
Conversion of common stock among classes | $ 1 | $ (1) | (20,283) | (20,283) | 20,283 | ||||
Conversion of common stock among classes (in shares) | 1,030 | (1,030) | |||||||
Distributions to noncontrolling interests | (566) | (566) | |||||||
Balance, end of period at Jun. 30, 2018 | $ 101 | $ 1 | $ 59 | 266,210 | (1,482,747) | (269) | (1,216,645) | (631,101) | (1,847,746) |
Balance, end of period (in shares) at Jun. 30, 2018 | 101,009 | 744 | 59,701 | ||||||
Increase (decrease) in stockholders' deficit | |||||||||
Net loss | (58,128) | (58,128) | (33,773) | (91,901) | |||||
Net unrealized gain (loss) on marketable securities, net of tax | (296) | (296) | (172) | (468) | |||||
Share-based compensation | 2,175 | 2,175 | 2,175 | ||||||
Issuance of common stock | $ 1 | 1 | 1 | ||||||
Issuance of common stock, shares | 117 | ||||||||
Conversion of common stock among classes | (482) | (482) | 482 | ||||||
Distributions to noncontrolling interests | (21) | (21) | (771) | (792) | |||||
Balance, end of period at Sep. 30, 2018 | $ 101 | $ 1 | $ 60 | 267,882 | (1,540,875) | (565) | (1,273,396) | (665,335) | (1,938,731) |
Balance, end of period (in shares) at Sep. 30, 2018 | 101,126 | 744 | 59,701 | ||||||
Balance, beginning of period at Dec. 31, 2018 | $ 101 | $ 1 | $ 60 | 270,408 | (1,609,828) | (262) | (1,339,520) | (705,346) | (2,044,866) |
Balance, beginning of period (in shares) at Dec. 31, 2018 | 101,236 | 744 | 59,701 | ||||||
Increase (decrease) in stockholders' deficit | |||||||||
Net loss | (15,263) | (15,263) | (9,819) | (25,082) | |||||
Net unrealized gain (loss) on marketable securities, net of tax | 397 | 397 | 99 | 496 | |||||
Share-based compensation | 2,087 | 2,087 | 2,087 | ||||||
Issuance of common stock, shares | 100 | ||||||||
Conversion of common stock among classes | $ 3 | $ (3) | (18,175) | (18,175) | 18,175 | ||||
Conversion of common stock among classes (in shares) | 3,081 | (3,081) | |||||||
Distributions to noncontrolling interests | 64 | 64 | (1,202) | (1,138) | |||||
Contributions from noncontrolling interests | 18,500 | 18,500 | |||||||
Cumulative effect of accounting change | 584,913 | 584,913 | 340,129 | 925,042 | |||||
Balance, end of period at Mar. 31, 2019 | $ 104 | $ 1 | $ 57 | 254,384 | (1,040,178) | 135 | (785,497) | (339,464) | (1,124,961) |
Balance, end of period (in shares) at Mar. 31, 2019 | 104,417 | 744 | 56,620 | ||||||
Balance, beginning of period at Dec. 31, 2018 | $ 101 | $ 1 | $ 60 | 270,408 | (1,609,828) | (262) | (1,339,520) | (705,346) | (2,044,866) |
Balance, beginning of period (in shares) at Dec. 31, 2018 | 101,236 | 744 | 59,701 | ||||||
Increase (decrease) in stockholders' deficit | |||||||||
Net loss | 24,833 | ||||||||
Net unrealized gain (loss) on marketable securities, net of tax | 1,216 | ||||||||
Balance, end of period at Sep. 30, 2019 | $ 108 | $ 1 | $ 56 | 249,063 | (998,900) | 610 | (749,062) | (316,161) | (1,065,223) |
Balance, end of period (in shares) at Sep. 30, 2019 | 107,534 | 744 | 56,527 | ||||||
Balance, beginning of period at Mar. 31, 2019 | $ 104 | $ 1 | $ 57 | 254,384 | (1,040,178) | 135 | (785,497) | (339,464) | (1,124,961) |
Balance, beginning of period (in shares) at Mar. 31, 2019 | 104,417 | 744 | 56,620 | ||||||
Increase (decrease) in stockholders' deficit | |||||||||
Net loss | (4,819) | (4,819) | (4,164) | (8,983) | |||||
Net unrealized gain (loss) on marketable securities, net of tax | 406 | 406 | 216 | 622 | |||||
Share-based compensation | 1,748 | 1,748 | 1,748 | ||||||
Issuance of common stock | $ 3 | (3) | |||||||
Issuance of common stock, shares | 2,996 | ||||||||
Conversion of common stock among classes | (7,842) | (7,842) | 7,842 | ||||||
Distributions to noncontrolling interests | (1,405) | (1,405) | |||||||
Balance, end of period at Jun. 30, 2019 | $ 107 | $ 1 | $ 57 | 248,287 | (1,044,997) | 541 | (796,004) | (336,975) | (1,132,979) |
Balance, end of period (in shares) at Jun. 30, 2019 | 107,413 | 744 | 56,620 | ||||||
Increase (decrease) in stockholders' deficit | |||||||||
Net loss | 46,097 | 46,097 | 12,801 | 58,898 | |||||
Net unrealized gain (loss) on marketable securities, net of tax | 69 | 69 | 29 | 98 | |||||
Share-based compensation | 1,878 | 1,878 | 1,878 | ||||||
Issuance of common stock, shares | 28 | ||||||||
Conversion of common stock among classes | $ 1 | $ (1) | (1,081) | (1,081) | 1,081 | ||||
Conversion of common stock among classes (in shares) | 93 | (93) | |||||||
Distributions to noncontrolling interests | (21) | (21) | (1,628) | (1,649) | |||||
Contributions from noncontrolling interests | 8,531 | 8,531 | |||||||
Balance, end of period at Sep. 30, 2019 | $ 108 | $ 1 | $ 56 | $ 249,063 | $ (998,900) | $ 610 | $ (749,062) | $ (316,161) | $ (1,065,223) |
Balance, end of period (in shares) at Sep. 30, 2019 | 107,534 | 744 | 56,527 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities | ||
Net income (loss) | $ 24,833 | $ (263,431) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Non-cash interest and leasing arrangements, net | 21,194 | 55,128 |
Other non-cash gain, net | (172,141) | (42,360) |
Share based compensation | 5,713 | 6,732 |
Depreciation and amortization expense | 101,395 | 168,036 |
Operating lease right-of-use asset amortization | 86,250 | |
Provision for losses on accounts receivable | (1,005) | 6,179 |
Equity in net (income) loss of unconsolidated affiliates | (178) | 106 |
Benefit for deferred taxes | (1,774) | (2,305) |
Long-lived asset impairments | 16,937 | 88,008 |
Goodwill and identifiable intangible asset impairments | 2,061 | |
(Gain) loss on early extinguishment of debt | (263) | 9,300 |
Changes in assets and liabilities: | ||
Accounts receivable | 64,614 | 48,667 |
Accounts payable and other accrued expenses and other | (63,186) | (62,055) |
Operating lease obligations | (66,631) | |
Net cash provided by operating activities | 15,758 | 14,066 |
Cash flows from investing activities: | ||
Capital expenditures | 47,046 | 41,321 |
Purchases of marketable securities | (47,896) | (63,534) |
Proceeds on maturity or sale of marketable securities | 56,725 | 50,913 |
Purchases of assets | (591,660) | |
Sales of assets | 237,632 | |
Restricted deposits | (1,224) | (873) |
Other, net | 435 | (62) |
Net cash used in investing activities | (393,034) | (54,877) |
Cash flows from financing activities: | ||
Borrowings under revolving credit facilities | 3,522,000 | 2,987,000 |
Repayments under revolving credit facilities | (3,518,465) | (2,959,875) |
Proceeds from issuance of long-term debt | 480,906 | 563,747 |
Repayment of long-term debt | (133,913) | (462,063) |
Repayment of finance lease obligations | (1,973) | |
Debt issuance costs | (8,325) | (16,678) |
Debt settlement costs | (485) | |
Contributions from noncontrolling interests | 27,031 | |
Distributions to noncontrolling interests and stockholders | (4,192) | (1,373) |
Net cash provided by financing activities | 363,069 | 110,273 |
Net (decrease) increase in cash, cash equivalents and restricted cash and equivalents | (14,207) | 69,462 |
Cash, cash equivalents and restricted cash and equivalents: | ||
Beginning of period | 142,276 | 58,638 |
End of period | 128,069 | 128,100 |
Supplemental cash flow information: | ||
Interest paid | 118,757 | 292,545 |
Net taxes paid | 2,672 | 3,019 |
Non-cash investing and financing activities: | ||
Finance lease obligations, net write-down due to lease activity | (930,582) | |
Finance lease obligations, net write-down due to lease activity under ASC 840 | (83,390) | |
Assets subject to finance lease obligations, net (gross-up) write-down due to lease activity | (1,131,352) | |
Assets subject to capital lease obligations, net (gross-up) write-down due to lease activity, under ASC 840 | 64,456 | |
Operating lease obligations, net gross-up due to lease activity | 2,901,799 | |
Assets subject to operating leases, net (gross-up) due to lease activity | (2,514,414) | |
Financing obligations, net write-down due to lease activity | (2,734,940) | |
Financing obligations, net write-down due to lease activity under ASC 840 | (177,001) | |
Assets subject to financing obligations, net write-down due to lease activity | $ 1,718,507 | |
Assets subject to financing obligations, net write-down due to lease activity under ASC 840 | $ 128,256 |
General Information
General Information | 9 Months Ended |
Sep. 30, 2019 | |
General Information | |
General Information | (1) General Informatio Description of Business Genesis Healthcare, Inc. is a healthcare services company that through its subsidiaries (collectively, the Company or Genesis), owns and operates skilled nursing facilities, assisted/senior living facilities and a rehabilitation therapy business. The Company has an administrative services company that provides a full complement of administrative and consultative services that allows its affiliated operators and third-party operators with whom the Company contracts to better focus on delivery of healthcare services. At September 30, 2019, the Company provides inpatient services through 384 skilled nursing, assisted/senior living and behavioral health centers located in 26 states. Revenues of the Company’s owned, leased and otherwise consolidated inpatient businesses constitute approximately 86% of its revenues. The Company provides a range of rehabilitation therapy services, including speech pathology, physical therapy, occupational therapy and respiratory therapy. These services are provided by rehabilitation therapists and assistants employed or contracted at substantially all of the centers operated by the Company, as well as by contract to healthcare facilities operated by others. The Company has expanded its delivery model for providing rehabilitation services to community-based and at-home settings, as well as internationally in China. After the elimination of intercompany revenues, the rehabilitation therapy services business constitutes approximately 11% of the Company’s revenues. The Company provides an array of other specialty medical services, including management services, physician services, staffing services, and other healthcare related services, which comprise the balance of the Company’s revenues. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). In the opinion of management, the consolidated financial statements include all necessary adjustments for a fair presentation of the financial position and results of operations for the periods presented. The consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation. The Company presents noncontrolling interests within the stockholders’ deficit section of its consolidated balance sheets. The Company presents the amount of net income (loss) attributable to Genesis Healthcare, Inc. and net income (loss) attributable to noncontrolling interests in its consolidated statements of operations. The consolidated financial statements include the accounts of all entities controlled by the Company through its ownership of a majority voting interest and the accounts of any variable interest entities (VIEs) where the Company is subject to a majority of the risk of loss from the VIE's activities, or entitled to receive a majority of the entity's residual returns, or both. The Company assesses the requirements related to the consolidation of VIEs, including a qualitative assessment of control and economics that considers which entity has the power to direct the activities that "most significantly impact" the VIE's economic performance and has the obligation to absorb losses of, or the right to receive benefits that could be potentially significant to the VIE. In the first quarter of 2019, the Company entered into a partnership that acquired the real property of 15 skilled nursing facilities that are leased to the Company. The partnership qualifies as a consolidated VIE. See Note 3 – “ Significant Transactions and Events – Strategic Partnerships – Next Partnership .” In the third quarter of 2019, the Company entered into a partnership that acquired the real property of 18 skilled nursing facilities that are leased to the Company. The partnership qualifies as a consolidated VIE. See Note 3 – “Significant Transactions and Events – Strategic Partnerships – Vantage Point Partnership.” The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and do not include all of the disclosures normally required by U.S. GAAP or those normally required in annual reports on Form 10-K. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2018 filed with the U.S. Securities and Exchange Commission (the SEC) on Form 10-K on March 18, 2019. Certain prior year disclosure amounts have been reclassified to conform to current period presentation. Financial Condition and Liquidity Considerations The accompanying consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In evaluating the Company’s ability to continue as a going concern, management considered the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern for 12 months following the date the Company’s financial statements were issued (November 8, 2019). Management considered the recent results of operations as well as the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s conditional and unconditional obligations due before November 8, 2020. Based upon such considerations, management determined that there are no known or knowable conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern for 12 months following the date of issuance of these financial statements (November 8, 2019). The Company’s results of operations continue to be negatively impacted by the persistent pressure of healthcare reforms enacted in recent years. This challenging operating environment has been most acute in the Company’s inpatient segment, but also has had a detrimental effect on the Company’s rehabilitation therapy segment and its customers. In recent years, the Company has implemented a number of cost mitigation strategies to offset the negative financial implications of this challenging operating environment. The Company expects to continue to pursue cost mitigation and other strategies in 2019 in response to the operating environment and liquidity requirements. During the nine months ended September 30, 2019, the Company amended, or obtained waivers related to, the financial covenants of all of its material debt and lease agreements to account for these ongoing changes in its capital structure and business conditions. Although the Company is and projects to be in compliance with all of its material debt and lease covenants through November 8, 2020, the ongoing uncertainty related to the impact of healthcare reform initiatives may have an adverse impact on the Company’s ability to remain in compliance with the covenants. Should the Company fail to comply with its debt and lease covenants at a future measurement date it could, absent necessary and timely waivers and/or amendments, be in default under certain of its existing debt and lease agreements. To the extent any cross-default provisions apply, the default could have a more significant impact on the Company’s financial position. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) established Accounting Standards Codification (ASC) Topic 842, Leases (Topic 842), by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842 ; ASU No. 2018-10, Codification Improvements to Topic 842, Leases ; and ASU No. 2018-11, Targeted Improvements . The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted the new standard on January 1, 2019. The Company elected the option to apply the transition requirements in Topic 842 at the effective date of January 1, 2019 with the effects of initially applying Topic 842 recognized as a cumulative-effect adjustment to accumulated deficit in the period of adoption. Consequently, financial information has not been updated and the disclosures required under the new standard have not been provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. The Company has elected the ‘package of practical expedients’, which permit it to not reassess its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company. The adoption of the new standard had a material effect on the Company’s financial statements. The most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on its balance sheet for real estate operating leases; (2) the derecognition of existing assets and liabilities for sale-leaseback transactions (including those arising from build-to-suit lease arrangements for which construction is complete and the Company is leasing the constructed asset) that historically did not qualify for sale accounting; and (3) providing significant new disclosures about its leasing activities. Upon adoption, the Company: · Recognized operating lease liabilities of $0.6 billion based on the present value of the remaining minimum rental payments as determined in accordance with Topic 842 for leases that had historically been accounted for as operating leases under the previous leasing standards. The Company recognized corresponding ROU assets of approximately $0.5 billion based on the operating lease liabilities, adjusted for existing straight-line lease liabilities, existing assets and liabilities related to favorable and unfavorable terms of operating leases previously recognized in respect of business combinations, and the impairment of the ROU assets. The resulting net impact of $0.1 billion associated with this change in accounting was recognized as an increase to opening accumulated deficit as of January 1, 2019. · Derecognized existing financing obligations of $2.7 billion and existing property and equipment of $1.7 billion. The Company recognized new operating lease liabilities and corresponding ROU assets of $1.9 billion on its balance sheet for the associated leases. The resulting net impact of $1.0 billion associated with this change in accounting was recognized as a reduction to opening accumulated deficit as of January 1, 2019. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company does not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. See Note 8 – “ Leases. ” In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which permits entities to reclassify the disproportionate income tax effects of the Tax Cuts and Jobs Act (Tax Reform Act) on items within accumulated other comprehensive income (loss) to retained earnings. These disproportionate income tax effect items are referred to as "stranded tax effects." Amendments in this update only relate to the reclassification of the income tax effects of the Tax Reform Act. Other accounting guidance that requires the effect of changes in tax laws or rates to be included in net income from continuing operations is not affected by this update. The Company adopted the new standard on January 1, 2019. The adoption of ASU 2018-02 did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement , which simplifies the fair value measurement disclosure requirements. The standard is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effect that the standard will have on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments , which is intended to improve financial reporting by requiring earlier recognition of credit losses on certain financial assets, such as available-for-sale debt securities. The standard replaces the current incurred loss impairment model that recognizes losses when a probable threshold is met with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased. Further, the FASB issued ASU 2019-04 and ASU 2019-05 to provide additional guidance on the credit losses standard. The standard is effective for fiscal years beginning after December 15, 2022, for smaller reporting companies, including interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the effect that the standard will have on its consolidated financial statements and related disclosures. |
Certain Significant Risks and U
Certain Significant Risks and Uncertainties | 9 Months Ended |
Sep. 30, 2019 | |
Certain Significant Risks and Uncertainties | |
Certain Significant Risks and Uncertainties | (2) Certain Significant Risks and Uncertainties Revenue Sources The Company receives revenues from Medicare, Medicaid, private insurance, self-pay residents, other third-party payors and long-term care facilities that utilize its rehabilitation therapy and other services. The Company’s inpatient services segment derives approximately 78% of its revenue from Medicare and various state Medicaid programs. The following table depicts the Company’s inpatient services segment revenue by source for the three and nine months ended September 30, 2019 and 2018: Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Medicare 19 % 21 % 20 % 22 % Medicaid 59 % 58 % 58 % 57 % Insurance 12 % 12 % 12 % 12 % Private 8 % 8 % 8 % 8 % Other 2 % 1 % 2 % 1 % Total 100 % 100 % 100 % 100 % The sources and amounts of the Company’s revenues are determined by a number of factors, including licensed bed capacity and occupancy rates of inpatient facilities, the mix of patients and the rates of reimbursement among payors. Likewise, payment for ancillary medical services, including services provided by the Company’s rehabilitation therapy services business, varies based upon the type of payor and payment methodologies. Changes in the case mix of the patients as well as payor mix among Medicare, Medicaid and private pay can significantly affect the Company’s profitability. It is not possible to quantify fully the effect of legislative changes, the interpretation or administration of such legislation or other governmental initiatives on the Company’s business and the business of the customers served by the Company’s rehabilitation therapy business. The potential impact of reforms to the United States healthcare system, including potential material changes to the delivery of healthcare services and the reimbursement paid for such services by the government or other third party payors, is uncertain at this time. Also, initiatives among managed care payors, conveners and referring acute care hospital systems to reduce lengths of stay and avoidable hospital admissions and to divert referrals to home health or other community-based care settings could have an adverse impact on the Company’s business. Accordingly, there can be no assurance that the impact of any future healthcare legislation, regulation or actions by participants in the health care continuum will not adversely affect the Company’s business. There can be no assurance that payments under governmental and private third-party payor programs will be timely, will remain at levels similar to present levels or will, in the future, be sufficient to cover the costs allocable to patients eligible for reimbursement pursuant to such programs. The Company’s financial condition and results of operations are and will continue to be affected by the reimbursement process, which in the healthcare industry is complex and can involve lengthy delays between the time that revenue is recognized and the time that reimbursement amounts are settled. Laws and regulations governing the Medicare and Medicaid programs, and the Company’s business generally, are complex and are often subject to a number of ambiguities in their application and interpretation. The Company believes that it is in substantial compliance with all applicable laws and regulations. However, from time to time the Company and its affiliates are subject to pending or threatened lawsuits and investigations involving allegations of potential wrongdoing, some of which may be material or involve significant costs to resolve and/or defend, or may lead to other adverse effects on the Company and its affiliates including, but not limited to, fines, penalties and exclusion from participation in the Medicare and/or Medicaid programs. Concentration of Credit Risk The Company is exposed to the credit risk of its third-party customers, many of whom are in similar lines of business as the Company and are exposed to the same systemic industry risks of operations as the Company, resulting in a concentration of risk. These include organizations that utilize the Company’s rehabilitation services, staffing services and physician service offerings, engaged in similar business activities or having economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in regulatory and systemic industry conditions. Management assesses its exposure to loss on accounts at the customer level. The greatest concentration of risk exists in the Company’s rehabilitation therapy services business where it has over 160 distinct customers, many being chain operators with more than one location. One customer, which is a related party of the Company, comprises $32.5 million, approximately 35%, of the gross outstanding contract receivables in the rehabilitation services business at September 30, 2019. See Note 11 – “Related Party Transactions.” One former customer comprises $8.0 million, approximately 9%, of the gross outstanding contract receivables in the rehabilitation services business at September 30, 2019. An adverse event impacting the solvency of these large customers resulting in their insolvency or other economic distress would have a material impact on the Company. The Company’s business is subject to a number of other known and unknown risks and uncertainties, which are discussed in Part II. Item 1A, “ Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, which was filed with the SEC on March 18, 2019, and in the Company’s Quarterly Reports on Form 10-Q, including the risk factors discussed herein in Part II. Item 1A. Covenant Compliance Should the Company fail to comply with its debt and lease covenants at a future measurement date, it could, absent necessary and timely waivers and/or amendments, be in default under certain of its existing debt and lease agreements. To the extent any cross-default provisions may apply, the default could have an even more significant impact on the Company’s financial position. Although the Company is in compliance, and projects to remain in compliance, with the covenants required by its material debt and lease agreements, the ongoing uncertainty related to the impact of healthcare reform initiatives may have an adverse impact on the Company’s ability to remain in compliance with its financial covenants. Such uncertainty includes changes in reimbursement patterns, patient admission patterns, bundled payment arrangements, as well as potential changes to the Patient Protection and Affordable Care Act of 2010, among others. The Company’s ability to maintain compliance with financial covenants required by its debt and lease agreements depends in part on management’s ability to increase revenues and control costs. Due to continuing changes in the healthcare industry, as well as the uncertainty with respect to changing referral patterns, patient mix, and reimbursement rates, it is possible that future operating performance may not generate sufficient operating results to maintain compliance with its quarterly debt and lease covenant requirements. There can be no assurance that the confluence of these and other factors will not impede the Company’s ability to meet covenants required by its debt and lease agreements in the future. |
Significant Transactions and Ev
Significant Transactions and Events | 9 Months Ended |
Sep. 30, 2019 | |
Significant Transactions And Events | |
Significant Transactions and Events | (3) Significant Transactions and Events Strategic Partnerships Next Partnership On January 31, 2019, Welltower Inc. (Welltower) sold the real estate of 15 facilities to a real estate partnership (Next Partnership), of which the Company acquired a 46% membership interest for $16.0 million. The remaining interest is held by Next Healthcare (Next), a related party. See Note 11 – “ Related Party Transactions .” The Company will continue to operate these facilities pursuant to a new master lease with the Next Partnership. The term of the master lease is 15 years with two five-year renewal options available. The Company will pay annual rent of $19.5 million, with no rent escalators for the first five years and an escalator of 2% beginning in the sixth lease year and thereafter. The Company also obtained a fixed price purchase option to acquire all of the real property of the facilities. The purchase option is exercisable between lease years five and seven, reducing in price each successive year down to a 10% premium over the original purchase price. In accordance with U.S. GAAP, the Company has concluded the Next Partnership qualifies as a VIE and the Company is the primary beneficiary. As such, the Company has consolidated all of the accounts of the Next Partnership in the accompanying financial statements. The ROU assets and lease obligations related to the Next Partnership lease agreement have been fully eliminated in the Company’s consolidated financial statements. The Next Partnership acquired 22 skilled nursing facilities for a purchase price of $252.5 million but immediately sold seven of these facilities for $79.0 million. The initial consolidation of the remaining 15 facilities resulted in property and equipment of $173.5 million, non-recourse debt of $165.7 million, net of debt issuance costs, and non-controlling interest of $18.5 million. The Company has not finalized the analysis of the consideration and purchase price allocation and will continue to review this during the measurement period. The impact of consolidation on the accompanying consolidated statement of operations was not material for the nine months ended September 30, 2019 apart from non-recurring transaction costs of $5.3 million. Vantage Point Partnership On September 12, 2019, Welltower and Second Spring Healthcare Investments (Second Spring) sold the real estate of four and 14 facilities, respectively, to a real estate partnership (Vantage Point Partnership), in which the Company invested $37.5 million, consisting of an equity investment of $3.7 million, for an approximate 30% membership interest, and a formation loan of $33.7 million. The remaining membership interest is held by Vantage Point Capital, LLC (Vantage Point) for an investment of $85.3 million consisting of an equity investment of $8.5 million and a formation loan of $76.8 million. In conjunction with the facility sales, the Company received aggregate annual rent credits of $30.3 million. The Company will continue to operate these facilities pursuant to a new master lease with the Vantage Point Partnership. The term of the master lease is 15 years with two five-year renewal options available. The Company will pay annual rent of approximately $33.1 million, with no rent escalators for the first four years and an escalator of 2% beginning in the fifth lease year and thereafter. The Company also obtained a fixed price purchase option to acquire all of the real property of the facilities. The purchase option is exercisable during certain periods in fiscal years 2024 and 2025 for a 10% premium over the original purchase price. Further, Vantage Point holds a put option that would require the Company to acquire its membership interests in the Vantage Point Partnership. The put option becomes exercisable if the Company opts not to purchase the facilities or upon the occurrence of certain events of default. In accordance with U.S. GAAP, the Company has concluded the Vantage Point Partnership qualifies as a VIE and the Company is the primary beneficiary. As such, the Company has consolidated all of the accounts of the Vantage Point Partnership in the accompanying financial statements. The ROU assets and lease obligations related to the Vantage Point Partnership lease agreement have been fully eliminated in the Company’s consolidated financial statements. The Vantage Point Partnership acquired all 18 skilled nursing facilities for a purchase price of $339.2 million. The initial consolidation primarily resulted in property and equipment of $339.2 million, non-recourse debt of $306.1 million, net of debt issuance costs, and non-controlling interest of $8.5 million. The Company has not finalized the analysis of the consideration and purchase price allocation and will continue to review this during the measurement period. Other than transaction costs of $11.0 million, the impact of consolidation on the accompanying consolidated statement of operations was not material for the three months ended September 30, 2019. During the third quarter of 2019, the Company sold the real property of seven skilled nursing facilities and one senior/assisted living facility located in Georgia, New Jersey, Virginia, and Maryland to affiliates of Vantage Point for an aggregate purchase price of $91.8 million, using the majority of the proceeds to acquire its interest in the Vantage Point Partnership and repay indebtedness. The operations of seven of these facilities were also divested. Three of the facilities were subject to real estate loans and two were subject to HUD insured loans. See Note 7 – “Property and Equipment” and Note 9 – “Long-Term Debt – Real Estate Loans” and “Long-Term Debt – HUD Insured Loans.” The Company also divested the operations of an additional leased skilled nursing facility located in Georgia, marking an exit from the inpatient business in this state. The divested facilities had aggregate annual revenues of $84.1 million and annual pre-tax net income of $2.6 million. The divestitures resulted in an aggregate gain of $58.2 million. Divestiture of Non-Strategic Facilities California Divestitures During the second quarter of 2019, the Company sold the real property and divested the operations of five skilled nursing facilities in California for a sale price of $56.5 million. Loan repayments of $41.8 million were paid on the facilities at closing. See Note 7 – “Property and Equipment” and Note 9 – “Long-Term Debt – Real Estate Loans” and “Long-Term Debt – HUD Insured Loans.” The Company incurred prepayment penalties and other closing costs of $2.4 million at settlement. The facilities generated annual revenues of $53.0 million and pre-tax net income of $1.6 million. The divestiture resulted in a gain of $25.0 million. The Company also divested the operations of one behavioral health center located in California upon the lease’s expiration in the second quarter of 2019. The center generated annual revenues of $3.1 million and pre-tax net loss of $0.3 million. The divestiture resulted in a loss of $0.1 million. During the third quarter of 2019, the Company sold the real property and divested the operations of one additional skilled nursing facility and one assisted/senior living facility in California for an aggregate sale price of $11.5 million. Loan repayments of $9.6 million were paid on the facilities at closing. See Note 7 – “Property and Equipment” and Note 9 – “Long-Term Debt – HUD Insured Loans.” The facilities generated annual revenues of $10.4 million and pre-tax net income of less than $0.1 million. The divestiture resulted in an aggregate gain of $1.0 million. Other Divestitures During the first quarter of 2019, the Company divested the operations of nine facilities located in New Jersey and Ohio that were subject to the master lease with Welltower (the Welltower Master Lease). The nine divested facilities had aggregate annual revenues of $90.2 million and annual pre-tax net loss of $6.0 million. The Company recognized a loss on exit reserves of $3.3 million. The Company also completed the closure of one facility located in Ohio. The facility generated annual revenues of $7.7 million and pre-tax net loss of $1.6 million. The closure resulted in a loss of $0.2 million. During the second quarter of 2019, the Company divested the operations of three leased skilled nursing facilities. Two of the facilities were located in Connecticut and subject to the Welltower Master Lease, while the third was located in Ohio. The facilities generated annual revenues of $24.7 million and pre-tax net loss of $2.9 million. The divestitures resulted in a loss of $1.1 million. During the third quarter of 2019, the Company divested the operations of 11 leased skilled nursing facilities and completed the closure of a twelfth facility. Nine of the facilities were located in Ohio, marking an exit from the inpatient business in this state, while the remaining three were located in Massachusetts, Utah, and Idaho. Four of the facilities were subject to a master lease with Omega Healthcare Investors, Inc. (Omega), three of which were removed from the lease, resulting in an annual rent credit of $1.9 million, with the fourth, the closed facility, remaining subject to the lease. The twelve facilities generated annual revenues of $75.6 million and pre-tax loss of $4.6 million. The divestitures resulted in a loss of $1.9 million. Acquisitions On June 1, 2019, the Company acquired the operations of one skilled nursing facility in New Mexico. The new facility has 80 licensed beds and generates approximate annual net revenue of $3.4 million. The facility is leased from Omega and is classified as an operating lease. The facility’s 2019 pre-tax net income is anticipated to be de minimis. Lease Transactions Welltower During the first quarter, the Company amended the Welltower Master Lease several times to reflect the lease termination of 24 facilities, including the 15 facilities sold and now leased from the Next Partnership. As a result of the lease termination on the 24 facilities, the Company received annual rent credits of approximately $23.4 million. A lease modification analysis was performed and the remaining 49 facilities subject to the master lease were reclassified from finance leases to operating leases. Finance lease ROU assets and obligations of $61.5 million and $130.2 million, respectively, were written off. On a net basis, operating lease ROU assets and obligations of $159.8 million and $111.3 million, respectively, were written down, resulting in a gain of $20.3 million. During the second quarter of 2019, the Company amended the Welltower Master Lease to reflect the lease termination of two facilities and received annual rent credits of $0.6 million. Operating lease ROU assets and lease obligations of $5.1 million and $5.6 million, respectively, were written off, resulting in a gain of $0.5 million. During the third quarter of 2019, the Company amended the Welltower Master Lease to reflect the lease termination of four facilities and received annual rent credits of $1.9 million. Operating lease ROU assets and lease obligations of $102.0 million and $74.4 million, respectively, were written off, resulting in a gain of $27.6 million. Omega During the third quarter, the Company amended its master lease with Omega to reflect the lease termination of three facilities subject to the lease and received annual rent credits of $1.9 million. In conjunction with the lease termination, finance lease ROU assets and lease obligations of $10.1 million and $16.8 million, respectively, were written off. Additionally, for those facilities remaining under the master lease, the Company reassessed the likelihood of exercising its renewal options and concluded that it no longer met the reasonably certain threshold. Consequently, the remaining facilities subject to the master lease were reclassified from finance leases to operating leases and the corresponding ROU assets and liabilities were reduced by $164.6 million and $181.3 million, respectively. The lease termination and remeasurement resulted in an aggregate gain of $23.4 million. Second Spring During the third quarter, the Company amended its master lease with Second Spring to reflect the lease termination of 14 facilities subject to the lease and received annual rent credits of $28.4 million. In conjunction with the lease termination, finance lease ROU assets and lease obligations of $5.9 million and $8.8 million, respectively, were written off and operating lease ROU assets and lease obligations of $202.7 million and $205.4 million, respectively, were written off. Additionally, for those facilities remaining under the master lease, the Company reassessed the likelihood of exercising its renewal options and concluded that it no longer met the reasonably certain threshold. Consequently, the remaining facilities subject to the master lease were reclassified from finance leases to operating leases and the corresponding ROU assets and liabilities were increased by $54.4 million and $33.3 million, respectively. The lease termination and remeasurement resulted in an aggregate gain of $26.9 million. Other During the first quarter of 2019, the Company amended a master lease agreement for 19 skilled nursing facilities. The amendment extended the lease term by five years through October 31, 2026, removed the Company’s option to purchase certain facilities under the lease and adjusted certain financial covenants. The Company had previously determined that the renewal option period was not reasonably certain of exercise. Upon execution of the amendment, the operating lease ROU assets and obligations were remeasured, resulting in an increase of $77.2 million to both operating lease ROU assets and obligations. During the third quarter of 2019, the Company amended a master lease agreement to reflect the lease termination of six facilities subject to the lease. In conjunction with the lease termination, operating lease ROU assets of $4.9 million were written off, resulting in a loss of $4.9 million. Gains and losses associated with transactions, such as divestitures, acquisitions and lease transactions, are included in other income in the consolidated statements of operations. See Note 12 – “ Other Income .” |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings (Loss) Per Share | |
Earnings (Loss) Per Share | (5) Earnings (Loss) Per Share The Company has three classes of common stock. Classes A and B are identical in economic and voting interests. Class C has a 1:1 voting ratio with each of the other two classes, representing the voting interests of the noncontrolling interest of the legacy FC-GEN Operations Investment, LLC (FC-GEN) owners. Class C common stock is a participating security; however, it shares in a de minimis economic interest and is therefore excluded from the denominator of the basic earnings (loss) per share (EPS) calculation. Basic EPS was computed by dividing net income (loss) attributable to Genesis Healthcare, Inc. by the weighted-average number of outstanding common shares for the period. Diluted EPS is computed by dividing net income (loss) plus the effect of any assumed conversions by the weighted-average number of outstanding common shares after giving effect to all potential dilutive common stock. A reconciliation of the numerator and denominator used in the calculation of basic net income (loss) per common share follows (in thousands, except per share data): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Numerator: Net income (loss) $ 58,898 $ (91,901) $ 24,833 $ (263,431) Less: Net (income) loss attributable to noncontrolling interests (12,801) 33,773 1,182 97,153 Net income (loss) attributable to Genesis Healthcare, Inc. $ 46,097 $ (58,128) $ 26,015 $ (166,278) Denominator: Weighted-average shares outstanding for basic net income (loss) per share 109,123 102,489 106,581 100,461 Basic net income (loss) per common share attributable to Genesis Healthcare, Inc. $ 0.42 $ (0.57) $ 0.24 $ (1.66) A reconciliation of the numerator and denominator used in the calculation of diluted net income (loss) per common share follows (in thousands, except per share data): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Numerator: Net income (loss) $ 58,898 $ (91,901) $ 24,833 $ (263,431) Less: Net (income) loss attributable to noncontrolling interests (12,801) 33,773 1,182 97,153 Net income (loss) attributable to Genesis Healthcare, Inc. $ 46,097 $ (58,128) $ 26,015 $ (166,278) Plus: Assumed conversion of noncontrolling interests 20,179 — 8,060 — Net income (loss) available to common stockholders after assumed conversions $ 66,276 $ (58,128) $ 34,075 $ (166,278) Denominator: Weighted-average common shares outstanding 109,123 102,489 106,581 100,461 Plus: Assumed conversion of noncontrolling interests 56,605 — 57,313 — Plus: Unvested restricted stock units and stock warrants 274 — 689 — Adjusted weighted-average common shares outstanding, diluted 166,002 102,489 164,583 100,461 Diluted net income (loss) per common share attributable to Genesis Healthcare, Inc. $ 0.40 $ (0.57) $ 0.21 $ (1.66) The computation of diluted net income (loss) per common share excludes the effects of anti-dilutive shares attributable to the assumed conversion of noncontrolling interests, unvested restricted stock units under the 2015 Omnibus Equity Incentive Plan, and stock warrants, which were 60.6 million and 61.5 million for the three and nine months ended September 30, 2018, respectively. As of September 30, 2019, there were 56.5 million units attributable to the noncontrolling interests outstanding. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Information | |
Segment Information | (6) Segment Information The Company has three reportable operating segments: (i) inpatient services; (ii) rehabilitation therapy services; and (iii) other services. For additional information on these reportable segments, see Note 1 – “ General Information – Description of Business .” A summary of the Company’s segmented revenues follows (in thousands, except percentages): Three months ended September 30, 2019 2018 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage Revenues: Inpatient services: Skilled nursing facilities $ 941,722 83.8 % $ 1,029,453 84.6 % $ (87,731) (8.5) % Assisted/Senior living facilities 23,057 2.1 % 23,974 2.0 % (917) (3.8) % Administration of third party facilities 1,980 0.2 % 2,025 0.2 % (45) (2.2) % Elimination of administrative services (748) (0.1) % (784) (0.1) % 36 (4.6) % Inpatient services, net 966,011 86.0 % 1,054,668 86.7 % (88,657) (8.4) % Rehabilitation therapy services: Total therapy services 183,898 16.4 % 214,421 17.6 % (30,523) (14.2) % Elimination of intersegment rehabilitation therapy services (67,598) (6.0) % (82,257) (6.8) % 14,659 (17.8) % Third party rehabilitation therapy services, net 116,300 10.4 % 132,164 10.8 % (15,864) (12.0) % Other services: Total other services 55,532 4.9 % 38,526 3.2 % 17,006 44.1 % Elimination of intersegment other services (14,138) (1.3) % (8,087) (0.7) % (6,051) 74.8 % Third party other services, net 41,394 3.6 % 30,439 2.5 % 10,955 36.0 % Net revenues $ 1,123,705 100.0 % $ 1,217,271 100.0 % $ (93,566) (7.7) % Nine months ended September 30, 2019 2018 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage Revenues: Inpatient services: Skilled nursing facilities $ 2,888,659 84.1 % $ 3,190,065 84.2 % $ (301,406) (9.4) % Assisted/Senior living facilities 70,408 2.1 % 71,220 1.9 % (812) (1.1) % Administration of third party facilities 6,281 0.2 % 6,577 0.2 % (296) (4.5) % Elimination of administrative services (2,347) (0.1) % (2,254) (0.1) % (93) 4.1 % Inpatient services, net 2,963,001 86.3 % 3,265,608 86.2 % (302,607) (9.3) % Rehabilitation therapy services: Total therapy services 571,875 16.7 % 685,672 18.1 % (113,797) (16.6) % Elimination of intersegment rehabilitation therapy services (213,800) (6.2) % (263,890) (7.0) % 50,090 (19.0) % Third party rehabilitation therapy services, net 358,075 10.5 % 421,782 11.1 % (63,707) (15.1) % Other services: Total other services 143,139 4.2 % 124,300 3.3 % 18,839 15.2 % Elimination of intersegment other services (33,818) (1.0) % (20,987) (0.6) % (12,831) 61.1 % Third party other services, net 109,321 3.2 % 103,313 2.7 % 6,008 5.8 % Net revenues $ 3,430,397 100.0 % $ 3,790,703 100.0 % $ (360,306) (9.5) % A summary of the Company’s unaudited condensed consolidated statement of operations follows (in thousands): Three months ended September 30, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 966,759 $ 183,898 $ 55,515 $ 17 $ (82,484) $ 1,123,705 Salaries, wages and benefits 437,508 152,793 30,192 — — 620,493 Other operating expenses 394,115 11,779 16,421 — (82,874) 339,441 General and administrative costs — — — 35,930 — 35,930 Lease expense 98,987 320 384 327 — 100,018 Depreciation and amortization expense 29,263 2,934 176 2,559 — 34,932 Interest expense 12,363 14 9 24,713 — 37,099 Loss on early extinguishment of debt — — — 2,460 — 2,460 Investment income — — — (2,071) — (2,071) Other income (131,811) — — — — (131,811) Transaction costs — — — 12,941 — 12,941 Long-lived asset impairments 16,037 — — — — 16,037 Equity in net loss (income) of unconsolidated affiliates — — — 2,932 (3,025) (93) Income (loss) before income tax benefit 110,297 16,058 8,333 (79,774) 3,415 58,329 Income tax benefit — — — (569) — (569) Income (loss) from continuing operations $ 110,297 $ 16,058 $ 8,333 $ (79,205) $ 3,415 $ 58,898 Three months ended September 30, 2018 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 1,055,452 $ 214,421 $ 38,463 $ 63 $ (91,128) $ 1,217,271 Salaries, wages and benefits 480,345 175,098 25,161 — — 680,604 Other operating expenses 428,398 12,891 20,902 — (91,127) 371,064 General and administrative costs — — — 35,482 — 35,482 Lease expense 31,732 — 316 318 — 32,366 Depreciation and amortization expense 46,472 3,147 172 3,247 — 53,038 Interest expense 91,106 14 9 24,566 — 115,695 Investment income — — — (2,178) — (2,178) Other income (20,207) — — — — (20,207) Transaction costs — — — 11,361 — 11,361 Long-lived asset impairments 32,390 — — — — 32,390 Goodwill and identifiable intangible asset impairments 929 — — — — 929 Equity in net (income) loss of unconsolidated affiliates — — — (523) 371 (152) (Loss) income before income tax benefit (35,713) 23,271 (8,097) (72,210) (372) (93,121) Income tax benefit — — — (1,220) — (1,220) (Loss) income from continuing operations $ (35,713) $ 23,271 $ (8,097) $ (70,990) $ (372) $ (91,901) Nine months ended September 30, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 2,965,348 $ 571,875 $ 142,905 $ 234 $ (249,965) $ 3,430,397 Salaries, wages and benefits 1,336,298 464,740 88,024 — — 1,889,062 Other operating expenses 1,185,684 34,866 44,312 — (250,355) 1,014,507 General and administrative costs — — — 107,024 — 107,024 Lease expense 285,510 985 1,064 1,106 — 288,665 Depreciation and amortization expense 83,463 9,210 524 8,198 — 101,395 Interest expense 68,454 41 26 73,069 — 141,590 Loss on early extinguishment of debt — — — 2,436 — 2,436 Investment income — — — (6,078) — (6,078) Other (income) loss (172,126) (76) 61 — — (172,141) Transaction costs — — — 23,025 — 23,025 Long-lived asset impairments 16,937 — — — — 16,937 Equity in net loss (income) of unconsolidated affiliates — — — 4,318 (4,496) (178) Income (loss) before income tax benefit 161,128 62,109 8,894 (212,864) 4,886 24,153 Income tax benefit — — — (680) — (680) Income (loss) from continuing operations $ 161,128 $ 62,109 $ 8,894 $ (212,184) $ 4,886 $ 24,833 Nine months ended September 30, 2018 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 3,267,862 $ 685,672 $ 124,184 $ 116 $ (287,131) $ 3,790,703 Salaries, wages and benefits 1,477,153 562,875 82,100 — — 2,122,128 Other operating expenses 1,323,423 41,707 47,780 — (287,131) 1,125,779 General and administrative costs — — — 114,404 — 114,404 Lease expense 95,660 — 959 929 — 97,548 Depreciation and amortization expense 147,552 9,479 509 10,496 — 168,036 Interest expense 277,753 41 27 70,866 — 348,687 Loss on early extinguishment of debt — — — 9,785 — 9,785 Investment income — — — (4,856) — (4,856) Other (income) loss (42,438) — 78 — — (42,360) Transaction costs — — — 26,567 — 26,567 Long-lived asset impairments 88,008 — — — — 88,008 Goodwill and identifiable intangible asset impairments 2,061 — — — — 2,061 Equity in net (income) loss of unconsolidated affiliates — — — (1,029) 1,135 106 (Loss) income before income tax benefit (101,310) 71,570 (7,269) (227,046) (1,135) (265,190) Income tax benefit — — — (1,759) — (1,759) (Loss) income from continuing operations $ (101,310) $ 71,570 $ (7,269) $ (225,287) $ (1,135) $ (263,431) The following table presents the segment assets as of September 30, 2019 compared to December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Inpatient services $ 4,224,275 $ 3,735,778 Rehabilitation therapy services 297,097 329,687 Other services 47,798 36,240 Corporate and eliminations 104,977 161,918 Total assets $ 4,674,147 $ 4,263,623 The following table presents segment goodwill as of September 30, 2019 compared to December 31, 2018 (in thousands): Inpatient Rehabilitation Therapy Services Other Services Consolidated Balance at December 31, 2018 Goodwill 351,470 73,814 11,828 437,112 Accumulated impairment losses (351,470) — — (351,470) $ — $ 73,814 $ 11,828 $ 85,642 Balance at September 30, 2019 Goodwill 351,470 73,814 11,828 437,112 Accumulated impairment losses (351,470) — — (351,470) $ — $ 73,814 $ 11,828 $ 85,642 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property and Equipment | |
Property and Equipment | (7) Property and Equipment Property and equipment consisted of the following as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Land, buildings and improvements $ 990,977 $ 469,575 Finance lease land, buildings and improvements — 693,546 Financing obligation land, buildings and improvements — 2,274,211 Equipment, furniture and fixtures 380,907 417,684 Construction in progress 2,771 9,340 Gross property and equipment 1,374,655 3,864,356 Less: accumulated depreciation (417,437) (976,802) Net property and equipment $ 957,218 $ 2,887,554 On January 1, 2019, the Company derecognized net financing obligation land and buildings of $1.7 billion and reclassified net finance lease land and buildings of $0.6 billion to finance lease ROU assets within the consolidated balance sheets due to the adoption of Topic 842. See Note 1 – “General Information - Recently Adopted Accounting Pronouncements” and Note 8 – “Leases.” Additionally, improvements of approximately $12.7 million and $73.6 million, which were historically associated with finance leases (referred to as “capital leases” prior to the adoption of Topic 842) and financing obligations, respectively, have been reclassified to “Land, buildings and improvements.” During 2019, the Company classified eight facilities in California as assets held for sale. The property and equipment of these facilities was primarily classified in the “Land, buildings and improvements” line item. See Note 14 – “Assets Held for Sale.” Since this classification, the Company has sold the real property of seven of these facilities, resulting in a net reduction of property and equipment of $36.9 million. See Note 3 – “Significant Transactions and Events – Divestiture of Non-Strategic Facilities – California Divestitures .” At September 30, 2019, net property and equipment of $16.3 million attributable to one California skilled nursing facility remains classified as held for sale. During the first quarter of 2019, the Company consolidated the financial statements of the Next Partnership. See Note 3 – “ Significant Transactions and Events – Strategic Partnerships – Next Partnership .” The consolidation resulted in an increase to “Land, buildings and improvements” of $173.5 million. During the third quarter of 2019, the Company sold the real property of eight facilities and consolidated the property and equipment of the Vantage Point Partnership, as described in Note 3 – “Significant Transactions and Events – Strategic Partnerships – Vantage Point Partnership.” The sales resulted in a net reduction of property and equipment of $29.4 million, while the consolidation resulted in an increase of $339.2 million, both of which were primarily classified in the “Land, buildings and improvements” line item. During the three and nine months ended September 30, 2019, the Company recorded long-lived asset impairment charges of $9.8 million and $10.7 million, respectively, on three skilled nursing facilities reducing property and equipment accordingly. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Lessee operating and finance leases | (8) Leases The Company leases the majority of the skilled nursing facilities and assisted/senior living facilities used in its operations, most of which are subject to triple-net leases, meaning that in addition to rent, the Company is responsible for paying property taxes, insurance, and maintenance and repair costs. As of September 30, 2019, the Company leased approximately 78% of its centers; 44% were leased pursuant to master lease agreements with four landlords. The Company also leases certain office space, land, and equipment. The Company’s real estate leases generally have initial lease terms of 10 to 15 years or more and typically include one or more options to renew, with renewal terms that generally extend the lease term for an additional five to ten years or more. Exercise of the renewal options is generally subject to the satisfaction of certain conditions which vary by contract and generally follow payment terms that are consistent with those in place during the initial term. The Company assesses renewal options using a “reasonably certain” threshold, which is understood to be a high threshold and, therefore, the majority of its leases’ terms do not include renewal periods for accounting purposes. For leases where the Company is reasonably certain to exercise its renewal option, the option periods are included within the lease term and, therefore, the measurement of the ROU asset and lease liability. The payment structure of the Company’s leases generally contain annual escalation clauses that are either fixed or variable in nature, some of which are dependent upon published indices. Leases with an initial term of 12 months or less are not recorded on the balance sheet; expense for these leases is recognized on a straight-line basis over the lease term as an other operating expense. Certain leases include options for the Company to purchase the leased asset. For such leases, the Company assesses the likelihood of exercising the purchase option using a “reasonably certain” threshold, which is understood to be a high threshold and, therefore, purchase options are generally accounted for when a compelling economic reason to exercise the option exists. Certain leases include options to terminate the lease, the terms and conditions of which vary by contract. Such options allow the contract parties to terminate their obligations under the lease contract, typically in return for an agreed financial consideration. The Company’s lease agreements do not contain any material residual value guarantees. The Company leases certain facilities from affiliates of related parties. See Note 11 – “Related Party Transactions.” The Company makes certain assumptions in determining the discount rate. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate for collateralized borrowings, based on the information available at commencement date, in determining the present value of lease payments. In order to apply the incremental borrowing rate, a portfolio approach was utilized to group assets based on similar lease terms in a manner whereby the Company reasonably expects that the application does not differ materially from application to individual leases. Subsequent to lease commencement date, the Company reassesses lease classification when there is a contract modification that is not accounted for as a separate contract, a change in lease term, or a change in the assessment of whether the lessee is reasonably certain to exercise an option to purchase the underlying asset. This reassessment is made using current facts, circumstances and conditions. As a result of a lease’s modification, the remaining consideration in the contract is reallocated to lease and non-lease components, as applicable, and the lease liability is remeasured using the applicable discount rate at the effective date of the modification. The remeasurement of the lease liability will result in adjustment to the corresponding ROU asset, unless the lease is fully or partially terminated, in which case, a gain or loss will be recognized. Lease Transactions During the nine months ended September 30, 2019, the Company amended, extended and terminated numerous facilities subject to several material lease agreements resulting in ROU asset and liability adjustments. See Note 3 – “Significant Transactions and Events – Lease Transactions.” The maturity of total operating and finance lease obligations at September 30, 2019 is as follows (in thousands): Year ending December 31, Operating Leases Finance Leases (1) 2019 (excluding nine months ended September 30, 2019) $ 94,983 $ 1,888 2020 382,353 7,570 2021 385,990 7,379 2022 381,397 7,168 2023 380,751 6,927 Thereafter 3,411,293 42,564 Total lease payments 5,036,767 73,496 Less interest (2,201,697) (31,082) Total lease obligations 2,835,070 42,414 Less current portion (137,574) (2,738) Long-term lease obligations $ 2,697,496 $ 39,676 (1) Finance lease payments include $37.2 million related to options to extend lease terms that are reasonably certain of being exercised. The Company’s future minimum commitments under finance leases (formerly capital leases), financing obligations, and operating leases as of December 31, 2018 were as follows (in thousands): Year ending December 31, Finance Leases Financing Obligations Operating Leases 2019 $ 88,793 $ 237,335 $ 110,755 2020 89,397 242,052 109,391 2021 91,292 245,311 106,031 2022 93,281 242,214 84,003 2023 95,376 247,852 76,701 Thereafter 3,325,042 6,661,624 373,753 Total future minimum lease payments 3,783,181 7,876,388 $ 860,634 Less amount representing interest (2,813,068) (5,141,448) Total lease obligation 970,113 2,734,940 Less current portion (2,171) (2,001) Long-term obligation $ 967,942 $ 2,732,939 Three months ended Nine months ended Lease Cost Classification September 30, 2019 September 30, 2019 Operating lease cost Lease expense $ 100,018 $ 288,665 Finance lease cost: Amortization of finance lease right-of-use assets Depreciation and amortization expense 1,734 15,222 Interest on finance lease obligations Interest expense 4,299 48,931 Total finance lease expense 6,033 64,153 Variable lease cost Other operating expenses 10,697 32,027 Short-term leases Other operating expenses 5,980 18,596 Total lease cost $ 122,728 $ 403,441 The following table provides remaining lease term and discount rates by lease classification as of the three and nine months ended September 30, 2019: Lease Term and Discount Rate September 30, 2019 Weighted-average remaining lease term (years) Operating leases 13.4 Finance leases 8.1 Weighted-average discount rate Operating leases Finance leases The following table includes supplemental lease information for the three and nine months ended September 30, 2019 (in thousands): Three months ended Nine months ended Other information September 30, 2019 September 30, 2019 Cash paid for amounts included in the measurement of lease obligations Operating cash flows from operating leases $ 98,521 $ 270,449 Operating cash flows from finance leases 4,835 45,286 Financing cash flows from finance leases 702 1,973 Right-of-use assets obtained in exchange for new lease obligations Operating leases 5,306 82,471 Finance leases 688 688 Lease Covenants Certain lease agreements contain a number of restrictive covenants that, among other things, and subject to certain exceptions, impose operating and financial restrictions on the Company and its subsidiaries. These leases also require the Company to meet defined financial covenants, including a minimum level of consolidated liquidity, a maximum consolidated net leverage ratio and a minimum consolidated fixed charge coverage. These leases include cross-default provisions with each other and certain material debt instruments. The Company has master lease agreements with Welltower, Sabra Health Care REIT, Inc., Omega and Second Spring (collectively, the Master Lease Agreements). The Master Lease Agreements each contain a number of financial, affirmative and negative covenants, including a maximum leverage ratio, a minimum fixed charge coverage ratio, and minimum liquidity. At September 30, 2019, the Company is in compliance with the financial covenants contained in the Master Lease Agreements. The Company has two master lease agreements with Cindat Best Years Welltower JV LLC (CBYW) involving 28 of its facilities. The Company did not meet certain financial covenants contained in one of the master lease agreements involving five of its facilities at September 30, 2019. On November 4, 2019, the Company received a waiver for these covenant breaches through January 1, 2021. At September 30, 2019, the Company is in compliance with the financial covenants contained in the other master lease agreement. At September 30, 2019, the Company did not meet certain financial covenants contained in three leases related to five of its facilities. The Company is, and expects to continue to be, current in the timely payment of its obligations under such leases. These leases do not have cross default provisions, nor do they trigger cross default provisions in any of the Company’s other loan or lease agreements. The Company will continue to work with the related credit parties to amend such leases and the related financial covenants. The Company does not believe the breach of such financial covenants at September 30, 2019 will have a material adverse impact on it. The Company has been afforded certain cure rights to such defaults by posting collateral in the form of additional letters of credit or security deposit. The Company’s ability to maintain compliance with its lease covenants depends in part on management’s ability to increase revenue and control costs. Due to continuing changes in the healthcare industry, as well as the uncertainty with respect to changing referral patterns, patient mix, and reimbursement rates, it is possible that future operating performance may not generate sufficient operating results to maintain compliance with its quarterly lease covenant compliance requirements. Should the Company fail to comply with its lease covenants at a future measurement date, it would, absent necessary and timely waivers and/or amendments, be in default under certain of its existing lease agreements. To the extent any cross-default provisions may apply, the default would have an even more significant impact on the Company’s financial position. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2019 | |
Long-Term Debt. | |
Long-Term Debt | (9) Long-Term Debt Long-term debt at September 30, 2019 and December 31, 2018 consisted of the following (in thousands): September 30, 2019 December 31, 2018 Asset based lending facilities, net of debt issuance costs of $9,295 and $11,335 at September 30, 2019 and December 31, 2018, respectively $ 384,866 $ 419,289 Term loan agreements, net of debt issuance costs of $1,226 and $1,851 and debt premium balance of $5,473 and $8,446 at September 30, 2019 and December 31, 2018, respectively 193,380 184,652 Real estate loans, net of debt issuance costs of $4,224 and $5,360 and debt premium balance of $21,744 and $28,992 at September 30, 2019 and December 31, 2018, respectively 266,003 307,690 HUD insured loans, net of debt issuance costs of $2,936 and $5,247 and debt premium balance of $0 and $860 at September 30, 2019 and December 31, 2018, respectively 117,699 181,762 Notes payable 78,157 81,398 Mortgages and other secured debt (recourse) 5,450 4,190 Mortgages and other secured debt (non-recourse), net of debt issuance costs of $7,890 and $187 and debt premium balance of $1,447 and $1,520 at September 30, 2019 and December 31, 2018, respectively 497,142 26,483 1,542,697 1,205,464 Less: Current installments of long-term debt (121,745) (122,531) Long-term debt $ 1,420,952 $ 1,082,933 Asset Based Lending Facilities On March 6, 2018, the Company entered into a new asset based lending facility agreement with MidCap Funding IV Trust and MidCap Financial Trust (collectively, MidCap). The agreement initially provided for a $555.0 million asset based lending facility comprised of (a) a $325.0 million first lien term loan facility, (b) a $200.0 million first lien revolving credit facility and (c) a $30.0 million delayed draw term loan facility (collectively, the ABL Credit Facilities). The commitments under the delayed draw term loan facility will be reduced to $20.0 million in the year 2020. On June 5, 2019, the ABL Credit Facilities were amended to simultaneously increase the aggregate revolving credit facility commitment by $40.0 million and partially prepay the first lien term loan facility by $40.0 million. The resulting commitment levels of the revolving credit facility and first lien term loan facility were $240.0 million and $285.0 million, respectively. The ABL Credit Facilities have a five-year term set to mature on March 6, 2023. The ABL Credit Facilities include a springing maturity clause that would accelerate its maturity 90 days prior to the maturity of the Term Loan Agreements, Welltower Real Estate Loans or MidCap Real Estate Loans (each defined below), in the event those agreements are not extended or refinanced. The revolving credit facility includes a swinging lockbox arrangement whereby the Company transfers all funds deposited within its designated lockboxes to MidCap on a daily basis and then draws from the revolving credit facility as needed. In accordance with U.S. GAAP, the Company has presented the entire revolving credit facility borrowings balance of $109.2 million in current installments of long-term debt at September 30, 2019. Despite this classification, the Company expects that it will have the ability to borrow and repay on the revolving credit facility through its maturity on March 6, 2023. Cash proceeds of $50.4 million received under the ABL Credit Facilities remain in a restricted account. This amount is pledged to cash collateralize letters of credit. The Company has classified this deposit and all cash account balances subject to deposit account control agreements that were sprung under the ABL Credit Facilities as restricted cash and equivalents on the consolidated balance sheets at September 30, 2019 and December 31, 2018. Borrowings under the term loan and revolving credit facility components of the ABL Credit Facilities bear interest at a 90-day LIBOR rate (subject to a floor of 0.5%) plus an applicable margin of 6%. Borrowings under the delayed draw component bear interest at a 90-day LIBOR rate (subject to a floor of 1%) plus an applicable margin of 11%. Borrowing levels under the term loan and revolving credit facility components of the ABL Credit Facilities are limited to a borrowing base that is computed based upon the level of eligible accounts receivable. In addition to paying interest on the outstanding principal borrowed under the revolving credit facility, the Company is required to pay a commitment fee to the lenders for any unutilized commitments. The commitment fee rate equals 0.5% per annum on the revolving credit facility and 2% on the delayed draw term loan facility. The term loan facility and revolving credit facility include a termination fee equal to 2% if the loans are prepaid within the first year, 1% if the loans are prepaid after year one and before year two, and 0.5% thereafter. The term loan facility and revolving credit facility include an exit fee equal to $1.6 million and $1.0 million, respectively, due and payable on the earlier of the loans retirement or on the maturity date. The ABL Credit Facilities contain representations and warranties, affirmative covenants, negative covenants, financial covenants and events of default and security interests that are customarily required for similar financings. Financial covenants include a minimum consolidated fixed charge coverage ratio, a maximum leverage ratio and minimum liquidity. Borrowings and interest rates under the ABL Credit Facilities were as follows at September 30, 2019 (dollars in thousands): Weighted Average ABL Credit Facilities Commitment Borrowings Interest Term loan facility $ 285,000 $ 285,000 8.09 % Revolving credit facility (Non-HUD) 168,000 49,630 8.09 % Revolving credit facility (HUD) 72,000 29,530 8.09 % Delayed draw term loan facility 30,000 30,000 13.09 % $ 555,000 $ 394,160 8.47 % As of September 30, 2019, the Company had a total borrowing base capacity of $406.5 million with outstanding borrowings under the ABL Credit Facilities of $394.2 million, leaving the Company with approximately $12.3 million of available borrowing capacity under the ABL Credit Facilities. Term Loan Agreements The Company and certain of its affiliates, including FC-GEN (the Borrower) are party to a term loan agreement, as amended, (the Term Loan Agreement) with an affiliate of Welltower and an affiliate of Omega. The Term Loan Agreement originally provided for term loans (the Term Loans) in the aggregate principal amount of $120.0 million and later expanded to $160.0 million. The Term Loan Agreement was amended on May 9, 2019 to extend the maturity date from July 29, 2020 to November 30, 2021. The original Term Loan for $120.0 million bears interest at a rate equal to 10.0% per annum, with up to 5.0% per annum to be paid in kind. The additional Term Loan for $40.0 million bears interest at a rate equal to 14.0% per annum, with up to 9.0% per annum to be paid in kind. As of September 30, 2019, the Term Loans had an outstanding principal balance of $194.6 million, which includes a net debt premium balance of $5.5 million. The Term Loan Agreement is secured by a first priority lien on the equity interests of the subsidiaries of the Company and the Borrower as well as certain other assets of the Company, the Borrower and their subsidiaries, subject to certain exceptions. The Term Loan Agreement is also secured by a junior lien on the assets that secure the ABL Credit Facilities on a first priority basis. Welltower and Omega, or their respective affiliates, are each currently landlords under certain master lease agreements to which the Company and/or its affiliates are tenants. The Term Loan Agreement contains financial, affirmative and negative covenants, and events of default that are customary for debt securities of this type. Financial covenants include four maintenance covenants which require the Company to maintain a maximum leverage ratio, a minimum interest coverage ratio, a minimum fixed charge coverage ratio and maximum capital expenditures. The most restrictive financial covenant is the minimum interest coverage ratio which requires the Company to maintain a coverage ratio, as defined therein, of no less than 1.70 to 1.0 through December 31, 2020, and increasing to 1.80 to 1.0 thereafter. Real Estate Loans On March 30, 2018, the Company entered into two real estate loans with MidCap (MidCap Real Estate Loans) with combined available proceeds of $75.0 million, $73.0 million of which was drawn as of September 30, 2019. The MidCap Real Estate Loans are secured by 12 skilled nursing facilities and are subject to a five-year term maturing on March 30, 2023. The maturity of the MidCap Real Estate Loans will accelerate in the event the ABL Credit Facilities are repaid in full and terminated. The loans, which were interest only in the first year, are subject to an annual interest rate equal to 30-day LIBOR (subject to a floor of 1.5%) plus an applicable margin of 5.85%. Beginning April 1, 2019, mandatory principal payments commenced, with the balance of the loans to be repaid at maturity. Proceeds from the MidCap Real Estate Loans were used to repay partially the Welltower Real Estate Loans (defined below). On May 1, 2019, the Company divested the real property and operations of five skilled nursing facilities in California, three of which were subject to the MidCap Real Estate Loans. The Company used the sale proceeds to repay $27.7 million on the MidCap Real Estate Loans. During the third quarter of 2019, the Company divested the real property of two skilled nursing facilities in New Jersey and one skilled nursing facility in Maryland that were subject to the MidCap Real Estate Loans and used the sale proceeds to repay $10.5 million on the loans. See Note 3 – “Significant Transactions and Events – Strategic Partnerships – Vantage Point Partnership.” The MidCap Real Estate Loans have an outstanding balance of $34.3 million at September 30, 2019. On November 8, 2018, one of the MidCap Real Estate Loans was amended with an additional borrowing of $10.0 million. The proceeds were used to retire a maturing mortgage loan on a corporate office building. The office building has been added as collateral and the loan maturity remains March 30, 2023. The $10.0 million additional loan is subject to an annual interest rate equal to 30-day LIBOR (subject to a floor of 2.0%) plus an applicable margin of 6.25% with principal amortizing immediately and the balance due at maturity. During the third quarter of 2019, the Company repaid $1.6 million on this loan in conjunction with the aforementioned facility sales in New Jersey and Maryland. See Note 3 – “Significant Transactions and Events – Strategic Partnerships – Vantage Point Partnership.” The loan has an outstanding balance of $8.2 million at September 30, 2019. The Company is subject to multiple real estate loan agreements with Welltower (Welltower Real Estate Loans). The Welltower Real Estate Loans are subject to payments of interest only during the term with a balloon payment due at maturity, provided, that to the extent the subsidiaries receive any net proceeds from the sale and/or refinance of the underlying facilities such net proceeds are required to be used to repay the outstanding principal balance of the Welltower Real Estate Loans. Each Welltower Real Estate Loan has a maturity date of January 1, 2022 and an annual interest rate of 12.0%, of which 7.0% will be paid in cash and 5.0% will be paid in kind. The Company agreed to make commercially reasonable efforts to secure commitments to repay no less than $105.0 million of the Welltower Real Estate Loan obligations. As of September 30, 2019, the Company has not yet secured the total required repayments or commitments. As a result, the annual cash component of the interest payments was increased by approximately $2.0 million with a corresponding decrease in the paid in kind component of interest. At September 30, 2019, the Welltower Real Estate Loans are secured by a mortgage lien on the real property and a second lien on certain receivables of the operators of the five remaining facilities subject to the Welltower Real Estate Loans. The Welltower Real Estate Loans contain a conversion option, whereby up to $50.0 million of the balance can be converted into Class A common stock of the Company or a 10-year note bearing 2% paid in kind interest. The conversion option is available to the Company upon the satisfaction of certain conditions, the most significant include: the raise of new capital and application thereof to existing Welltower debt instruments, the repayment of $105.0 million to Welltower, as described above, the partial repayment of the Term Loans, and the partial repayment of the Welltower Real Estate Loans, such that the remaining outstanding principal balance does not exceed $50.0 million. As of September 30, 2019, the Welltower Real Estate Loans have an outstanding principal balance of $227.7 million, which includes a debt premium balance of $21.7 million. HUD Insured Loans As of September 30, 2019, the Company has 19 skilled nursing facility loans insured by the U.S. Department of Housing and Urban Development (HUD) with a combined aggregate principal balance of $167.6 million, which includes a debt premium balance of $2.8 million. The HUD insured loans have an original amortization term of 30 to 35 years and an average remaining term of 29 years with fixed interest rates ranging from 3.0% to 4.2% and a weighted average interest rate of 3.4%. Depending on the mortgage agreement, prepayments are generally allowed only after 12 months from the inception of the mortgage. Prepayments are subject to a penalty of 10% of the remaining principal balances in the first year and the prepayment penalty decreases each subsequent year by 1% until no penalty is required thereafter. Any further HUD insured loans will require additional HUD approval. All HUD insured loans are non-recourse loans to the Company. All loans are subject to HUD regulatory agreements that require escrow reserve funds to be deposited with the loan servicer for mortgage insurance premiums, property taxes, insurance and for capital replacement expenditures. As of September 30, 2019, the Company has total escrow reserve funds of $15.6 million with the loan servicer that are reported within prepaid expenses. During the nine months ended September 30, 2019, the Company sold the real property of three skilled nursing facilities and one assisted/senior living facility in California subject to HUD financing. The proceeds of which were used to retire HUD insured loans totaling $23.8 million. See Note 3 – “Significant Transactions and Events – Divestiture of Non-Strategic Facilities – California Divestitures.” In addition, the Company sold one skilled nursing facility in New Jersey and one skilled nursing facility in Virginia. The proceeds of these two sales were used to retire HUD insured loans totaling $18.4 million. See Note 3 – “Significant Transactions and Events – Strategic Partnerships – Vantage Point Partnership.” At September 30, 2019, the HUD insured loans of four skilled nursing facilities were classified as held for sale in the consolidated balance sheets. These loans had an aggregate principal balance of $46.3 million, net of debt issuance costs and debt premiums, and aggregate escrow reserve funds of $4.6 million. The sale of the facilities is expected to be completed in 2019 or early 2020. See Note 14 – “ Assets Held for Sale. ” Notes Payable On January 17, 2018, the Company converted $19.6 million of its trade payables into a note payable. The note, as amended, will be repaid in equal monthly installments through December 2019 at an annual interest rate of 5.75% and has an outstanding balance of $2.0 million at September 30, 2019. In connection with Welltower’s sale of 64 skilled nursing facilities to Second Spring on November 1, 2016, the Company issued a note totaling $51.2 million to Welltower. The note accrues cash interest at 3% and paid-in-kind interest at 7%. Cash interest is paid and paid-in-kind interest accretes the principal amount semi-annually every May 1 and November 1. The note was amended on May 9, 2019 to extend the maturity date from October 30, 2020 to December 15, 2021. Upon the satisfaction of certain conditions, including the repayment of the Term Loans, repayment of the other note payable, noted below, to Welltower, and partial repayment of the Welltower Real Estate Loans, the outstanding note balance in excess of $6.0 million will be forgiven by Welltower. The note has an outstanding accreted balance of $62.1 million at September 30, 2019. In connection with Welltower’s sale of 28 skilled nursing facilities to CBYW on December 23, 2016, the Company issued a note totaling $11.7 million to Welltower. The note accrues cash interest at 3% and paid-in-kind interest at 7%. Cash interest is paid and paid-in-kind interest accretes the principal amount semi-annually every June 15 and December 15. The note matures on December 15, 2021, and has an outstanding accreted principal balance of $14.1 million at September 30, 2019. Other Debt Mortgages and other secured debt (recourse). The Company carries mortgage loans and notes payable on certain of its corporate office buildings and other acquired assets. The loans are secured by the underlying real property and have fixed or variable rates of interest with a weighted average interest rate of 1.6% at September 30, 2019, with maturity dates ranging from 2019 to 2020. Mortgages and other secured debt (non-recourse). Loans are carried by certain of the Company’s consolidated joint ventures and VIEs. The loans consist principally of revenue bonds and secured bank loans. Loans are secured by the underlying real and personal property of individual facilities and have fixed or variable rates of interest with a weighted average interest rate of 7.2% at September 30, 2019. Maturity dates range from 2022 to 2034. Loans are labeled “ non-recourse” because neither the Company nor any of its wholly owned subsidiaries is obligated to perform under the respective loan agreements. The aggregate principal balance of these loans includes a $1.5 million debt premium on one debt instrument. In the nine months ended September 30, 2019, the Company consolidated the financial statements of the Next Partnership and the Vantage Point Partnership. See Note 3 – “ Significant Transactions and Events – Strategic Partnerships – Next Partnership ” and Note 3 – “ Significant Transactions and Events – Strategic Partnerships – Vantage Point Partnership. ” The Next Partnership’s debt consists of a three-year term loan in the amount of $142.1 million and a 10-year mezzanine loan in the amount of $27.0 million. The Vantage Point Partnership’s debt consists of a 7-year term loan with available proceeds of $240.9 million, $233.6 million of which was drawn as of September 30, 2019, as well as a promissory note due to Vantage Point in the amount of $76.8 million due on September 12, 2028. Debt Covenants The ABL Credit Facilities, the Term Loan Agreement and the Welltower Real Estate Loans (collectively, the Credit Facilities) each contain a number of financial, affirmative and negative covenants, including a maximum leverage ratio, a minimum interest coverage ratio, a minimum fixed charge coverage ratio, minimum liquidity and maximum capital expenditures. The Credit Facilities include cross-default provisions with each other and certain material lease agreements. At September 30, 2019, the Company was in compliance with its financial covenants contained in the Credit Facilities. The Company’s ability to maintain compliance with its debt covenants depends in part on management’s ability to increase revenue and control costs. Due to continuing changes in the healthcare industry, as well as the uncertainty with respect to changing referral patterns, patient mix, and reimbursement rates, it is possible that future operating performance may not generate sufficient operating results to maintain compliance with its quarterly debt covenant compliance requirements. Should the Company fail to comply with its debt covenants at a future measurement date, it would, absent necessary and timely waivers and/or amendments, be in default under certain of its existing credit agreements. To the extent any cross-default provisions may apply, the default would have an even more significant impact on the Company’s financial position. The maturity of total debt of $1,539.6 million, excluding debt issuance costs and other non-cash debt discounts and premiums, at September 30, 2019 is as follows (in thousands): Twelve months ended September 30, 2020 $ 121,779 2021 5,411 2022 623,764 2023 341,338 2024 12,999 Thereafter 434,313 Total debt maturity $ 1,539,604 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes | |
Income Taxes | (10) Income Taxes The Company effectively owns 65.9% of FC-GEN, which is an entity taxed as a partnership for U.S. income tax purposes and the Company’s only source of taxable income. FC-GEN is subject to income taxes in several U.S. state and local jurisdictions. The income taxes assessed by these jurisdictions are included in the Company’s tax provision, but at its 65.9% ownership of FC-GEN. For the three months ended September 30, 2019, the Company recorded income tax benefit of $0.6 million from continuing operations, representing an effective tax rate of (1.0%), compared to income tax benefit of $1.2 million from continuing operations, representing an effective tax rate of 1.3%, for the same period in 2018. The negative effective tax rate for the three months ended September 30, 2019 compared to the same period in 2018 is the result of US GAAP gain recorded upon the disposition of leased centers during this period in 2019 that is not recognized for US federal or state income taxes. For the nine months ended September 30, 2019, the Company recorded income tax benefit of $0.7 million from continuing operations, representing an effective tax rate of (2.8%), compared to income tax benefit of $1.8 million from continuing operations, representing an effective tax rate of 0.7%, for the same period in 2018. The negative effective tax rate for the nine months ended September 30, 2019 compared to the same period in 2018 is the result of US GAAP gain recorded upon the disposition of leased centers during this period in 2019 that is not recognized for US federal or state income taxes. The Company continues to assess the requirement for, and amount of, a valuation allowance in accordance with the “more likely than not” standard. Management had previously determined that the Company would not realize its deferred tax assets and established a valuation allowance against the deferred tax assets. As of September 30, 2019, management has determined that the valuation allowance is still necessary. The Company’s Bermuda captive insurance company is expected to produce a minimal U.S. federal taxable loss in 2019. The captive is expected to generate positive pre-tax income in future periods to off-set its deferred tax assets. The 2019 U.S. federal taxable loss cannot be carried back but can be carried forward indefinitely. The Company provides rehabilitation therapy services within the People’s Republic of China and Hong Kong. At September 30, 2019, these business operations do not comprise a significant portion of the Company’s overall operating results. Management does not anticipate these operations will generate significant taxable income in the near term. The Company, through a wholly owned subsidiary, has made a minimal investment in the stock of a company providing rehabilitation therapy services in the country of India. The operations currently do not have a material effect on the Company’s effective tax rate. Exchange Rights and Tax Receivable Agreement The owners of FC-GEN have the right to exchange their membership units in FC-GEN , along with an equivalent number of Class C shares, for shares of Class A common stock of the Company or cash, at the Company’s option. As a result of such exchanges, the Company’s membership interest in FC-GEN would increase and its purchase price would be reflected in its share of the tax basis of FC-GEN’s tangible and intangible assets. Any resulting increases in tax basis are likely to increase tax depreciation and amortization deductions and, therefore, reduce the amount of income tax the Company would otherwise be required to pay in the future. Any such increase would also result in a decreased gain (or increased loss) on future dispositions of the affected assets. There were exchanges of 3,174,106 FC-GEN units and Class C shares in the nine months ended September 30, 2019 equating to 3,174,661 Class A shares. The exchanges during the nine months ended September 30, 2019 resulted in a $14.3 million internal revenue code (IRC) Section 754 tax basis step-up in the tax deductible goodwill of FC-GEN. There were exchanges of 1,860,592 FC-GEN units and Class C shares in the nine months ended September 30, 2018 equating to 1,860,912 Class A shares. The exchanges during the nine months ended September 30, 2018 resulted in a $9.5 million IRC Section 754 tax basis step-up in the tax deductible goodwill of FC-GEN. The Company is party to a tax receivable agreement (TRA) with the owners of FC-GEN. The agreement provides for the payment by the Company to the owners of FC-GEN of 90% of the cash savings, if any, in U.S. federal, state and local income tax that the Company actually realizes as a result of (i) the increases in tax basis attributable to the owners of FC-GEN and (ii) tax benefits related to imputed interest deemed to be paid by the Company as a result of the TRA. Under the TRA, the benefits deemed realized by the Company as a result of the increase in tax basis attributable to the owners of FC-GEN generally will be computed by comparing the actual income tax liability of the Company to the amount of such taxes that the Company would have been required to pay had there been no such increase in tax basis. Estimating the amount of payments that may be made under the TRA is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors. The actual increase in tax basis and deductions, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, including: · the timing of exchanges – for instance, the increase in any tax deductions will vary depending on the fair value of the depreciable or amortizable assets of FC-GEN and its subsidiaries at the time of each exchange, which fair value may fluctuate over time; · the price of shares of Company Class A common stock at the time of the exchange—the increase in any tax deductions, and the tax basis increase in other assets of FC-GEN and its subsidiaries is directly proportional to the price of shares of Company Class A common stock at the time of the exchange; · the amount and timing of the Company’s income – the Company is required to pay 90% of the deemed benefits as and when deemed realized. If FC-GEN does not have taxable income, the Company is generally not required (absent a change of control or circumstances requiring an early termination payment) to make payments under the TRA for that taxable year because no benefit will have been actually realized. However, any tax benefits that do not result in realized benefits in a given tax year likely will generate tax attributes that may be utilized to generate benefits in previous or future tax years. The utilization of such tax attributes will result in payments under the TRA; and · future tax rates of jurisdictions in which the Company has tax liability. The TRA also provides that upon certain mergers, asset sales, other forms of business combinations or other changes of control, FC-GEN (or its successor’s) obligations under the TRA would be based on certain assumptions defined in the TRA. As a result of these assumptions, FC-GEN could be required to make payments under the TRA that are greater or less than the specified percentage of the actual benefits realized by the Company that are subject to the TRA. In addition, if FC-GEN elects to terminate the TRA early, it would be required to make an early termination payment, which upfront payment may be made significantly in advance of the anticipated future tax benefits. Payments generally are due under the TRA within a specified period of time following the filing of FC-GEN’s U.S. federal and state income tax return for the taxable year with respect to which the payment obligation arises. Payments under the TRA generally will be based on the tax reporting positions that FC-GEN will determine. Although FC-GEN does not expect the IRS to challenge the Company’s tax reporting positions, FC-GEN will not be reimbursed for any overpayments previously made under the TRA, but any overpayments will reduce future payments. As a result, in certain circumstances, payments could be made under the TRA in excess of the benefits that FC-GEN actually realizes in respect of the tax attributes subject to the TRA. The term of the TRA generally will continue until all applicable tax benefits have been utilized or expired, unless the Company exercises its right to terminate the TRA and make an early termination payment. In certain circumstances (such as certain changes in control, the election of the Company to exercise its right to terminate the agreement and make an early termination payment or an IRS challenge to a tax basis increase) it is possible that cash payments under the TRA may exceed actual cash savings. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions | |
Related Party Transactions | (11) The Company provides rehabilitation services to certain facilities owned and operated by a customer in which certain members of the Company’s board of directors and board observers beneficially own a majority ownership interest in the aggregate. These services resulted in net revenues of $29.1 million and $88.9 million in the three and nine months ended September 30, 2019, respectively, as compared to net revenues of $30.6 million and $96.2 million in the three and nine months ended September 30, 2018, respectively. The services resulted in net accounts receivable balances of $32.5 million and $32.3 million at September 30, 2019 and December 31, 2018, respectively. In addition, the Company has a note receivable for $56.3 million due from the related party customer. The Company has posted a $55.0 million reserve against the note receivable and deems this reserve prudent given the delays in collection on account of this related party customer. Further, the reserve represents the judgment of management, and does not indicate a forgiveness of any amount of the outstanding accounts receivable owed by this related party customer. The Company is monitoring the financial condition of this customer and will adjust the reserve levels accordingly as new information about their outlook is available. Certain members of the Company’s board of directors and board observers indirectly beneficially hold ownership interests in FC Compassus LLC (Compassus) totaling less than 10% in the aggregate. The Company is party to certain immaterial preferred provider and affiliation agreements with Compassus. Separately, the Company has a note receivable balance of $22.1 million from Compassus outstanding at September 30, 2019. The note, which is comprised of principal of $12.0 million and accrued interest, is associated with the Company’s sale of its hospice and home health operations to Compassus, which was completed during 2016. Prior to September 20, 2019, certain members of the Company’s board of directors and board observers indirectly beneficially held ownership interests in Trident USA totaling less than 10% in the aggregate. Effective September 20, 2019, no members of the Company’s board of directors and board observers indirectly beneficially hold any ownership interests in Trident USA. The Company is party to mobile radiology and laboratory/diagnostic services agreements with Trident USA. Fees for these services were $2.4 million and $6.2 million in the three and nine months ended September 30, 2019, respectively, compared to $3.4 million and $10.0 million in the three and nine months ended September 30, 2018, respectively. Certain subsidiaries of the Company are subject to a lease and a purchase option of 12 centers in New Hampshire and Florida from 12 separate limited liability companies affiliated with Next (the Next Landlord Entities). The lease was effective June 1, 2018 and the initial annualized rent to be paid is $13.0 million. The purchase option will become exercisable in the fifth lease year. In addition, certain subsidiaries of the Company are subject to a lease and a purchase option of 15 centers in Pennsylvania, New Jersey, Connecticut, Massachusetts and West Virginia from 15 separate limited liability companies affiliated with the Next Landlord Entities. The Company owns a 46% membership interest in the Next Partnership. The lease was effective February 1, 2019 and the initial annualized rent to be paid is $19.5 million. The purchase option is exercisable for a period of time in the fifth, sixth and seventh lease years. See Note 3 – “ Significant Transactions and Events – Strategic Partnerships – Next Partnership .” Certain members of the Company’s board of directors each directly or indirectly hold an ownership interest in the Next Landlord Entities totaling approximately 4% in the aggregate. These members have earned acquisition fees, and may earn asset management fees and other fees with respect to the Next Landlord Entities. As of September 30, 2019, Welltower held approximately 8.9% of the shares of the Company’s Class A Common Stock, representing approximately 5.8% of the voting power of the Company’s voting securities. The Company is party to a master lease with an affiliate of Welltower. The initial term of the master lease expires on January 31, 2037 and the Company has one eleven-year renewal option. Beginning January 1, 2019, annual rent escalators under the master lease were 2.0%. During the three and nine months ended September 30, 2019, the Company paid rent of approximately $17.9 million and $56.0 million, respectively, to Welltower. The Company holds options to purchase certain facilities subject to the master lease. At September 30, 2019, the Company leased 43 facilities from Welltower. The Company and certain of its affiliates are also party to certain debt instruments with Welltower. See Note 9 – “ Long-Term Debt – Term Loan Agreements, ” “ Long-Term Debt – Real Estate Loans, ” and “ Long-Term Debt – Notes Payable .” In the third quarter of 2018, the Company began providing rehabilitation services to five health care centers operated by affiliates of NSPR Centers, LLC (NSpire). Certain members of the Company’s board of directors and board observers beneficially own in the aggregate a majority of the ownership interests in NSpire. The Company recorded net revenues of $1.7 million and $5.2 million, respectively, for services provided to NSpire in the three and nine months ended September 30, 2019. The services resulted in net accounts receivable balances of $1.7 million and $1.1 million at September 30, 2019 and December 31, 2018, respectively. On September 15, 2019, the Company entered into a consulting agreement with one of the Company’s board observers. The consulting agreement has a term of one year and compensation of approximately $0.6 million. Services provided include sourcing, negotiating and assisting with closing of transactions and financing. |
Other Income
Other Income | 9 Months Ended |
Sep. 30, 2019 | |
Other (Income) Loss. | |
Other Income | (12) In the three and nine months ended September 30, 2019 and 2018, the Company completed multiple transactions, including the divestiture of numerous skilled nursing facilities and the termination or modification of certain lease agreements. See Note 3 – “ Significant Transactions and Events .” These transactions resulted in a net (gain) loss recorded as other income in the consolidated statements of operations. The following table summarizes those net (gains) losses (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Gain on sale of owned assets $ (63,645) $ — $ (90,992) $ — Loss recognized for exit costs associated with divestiture of operations 6,725 8,223 14,647 17,371 Gain on lease termination or modification (74,891) — (95,796) — Gain on lease terminations and amendments - unamortized straight-lining, favorable and unfavorable lease balances — (76) — (12,013) Gain on lease terminations and amendments - unamortized financing lease and capital lease obligations — (31,817) — (53,027) Loss on lease termination settlement — 3,463 — 3,463 Loss associated with lease extensions or newly leased operations, net — — — 1,846 Total other income $ (131,811) $ (20,207) $ (172,141) $ (42,360) |
Asset Impairment Charges
Asset Impairment Charges | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Identifiable Intangible Assets | |
Asset Impairment Charges | (13) Long-Lived Assets with a Definite Useful Life In each quarter, the Company’s long-lived assets with a definite useful life are tested for impairment at the lowest levels for which there are identifiable cash flows. The Company estimated the future net undiscounted cash flows expected to be generated from the use of the long-lived assets and then compared the estimated undiscounted cash flows to the carrying amount of the long-lived assets. The cash flow period was based on the remaining useful lives of the primary asset in each long-lived asset group, principally a building or ROU asset in the inpatient segment and customer relationship assets in the rehabilitation therapy services segment. During the three and nine months ended September 30, 2019, the Company recognized impairment charges in the inpatient segment of $16.0 million and $16.9 million, respectively. During the three and nine months ended September 30, 2018, the Company recognized impairment charges in the inpatient segment totaling $32.4 million and $88.0 million, respectively. |
Assets Held for Sale
Assets Held for Sale | 9 Months Ended |
Sep. 30, 2019 | |
Assets Held for Sale | |
Assets Held for Sale | (14) In the normal course of business, the Company continually evaluates the performance of its operating units, with an emphasis on selling or closing underperforming or non-strategic assets. These assets are evaluated to determine whether they qualify as assets held for sale or discontinued operations. The assets and liabilities of a disposal group classified as held for sale shall be presented separately in the asset and liability sections, respectively, of the statement of financial position in the period in which they are identified only. Assets held for sale that qualify as discontinued operations are removed from the results of continuing operations. The results of operations in the current and prior year periods, along with any cost to exit such businesses in the year of discontinuation, are classified as discontinued operations in the consolidated statements of operations. In the year ended December 31, 2018, the Company identified a disposal group of seven skilled nursing facilities operated by the Company in the state of Texas that qualified as assets held for sale. The Company is party to a purchase and sale agreement, as amended, to sell the facilities for $20.1 million. Four of the facilities are subject to Welltower Real Estate Loans and three of the facilities are subject to HUD-insured loans. The disposal group does not meet the criteria as a discontinued operation. The sale of the real estate of the seven skilled nursing facilities is expected to close in 2019 and marks an exit from the inpatient business in Texas. During the nine months ended September 30, 2019, the Company identified a disposal group of seven skilled nursing facilities and one assisted/senior living facility operated by the Company in the state of California that qualified as assets held for sale. The Company is party to a purchase and sale agreement, as amended, to sell the facilities for $88.8 million. As of September 30, 2019, seven of the facilities were sold. See Note 3 – “Significant Transactions and Events – Divestiture of Non-Strategic Facilities – California Divestitures.” The remaining facility is subject to a HUD-insured loan, so closing is subject to licensure and other regulatory approvals and is expected to occur in 2019 or early 2020. The disposal group does not meet the criteria as a discontinued operation. In total, the Company has classified as assets held for sale in its consolidated balance sheets as of September 30, 2019 and December 31, 2018, the real property and other balances associated with eight facilities and seven facilities, respectively. The following table sets forth the major classes of assets and liabilities included as part of the disposal groups (in thousands): September 30, 2019 December 31, 2018 Current assets: Prepaid expenses $ 4,740 $ 3,375 Long-term assets: Property and equipment, net of accumulated depreciation of $5,840 and $3,640 at September 30, 2019 and December 31, 2018, respectively 32,517 16,087 Total assets $ 37,257 $ 19,462 Current liabilities: Current installments of long-term debt $ 1,020 $ 639 Long-term liabilities: Long-term debt 45,314 25,942 Total liabilities $ 46,334 $ 26,581 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | (15) Loss Reserves For Certain Self-Insured Programs General and Professional Liability and Workers’ Compensation The Company self-insures for certain insurable risks, including general and professional liabilities and workers’ compensation liabilities through the use of self-insurance or retrospective and self-funded insurance policies and other hybrid policies, which vary among states in which the Company operates, including wholly owned captive insurance subsidiaries, to provide for potential liabilities for general and professional liability claims and workers’ compensation claims. Policies are typically written for a duration of 12 months and are measured on a “claims made” basis. Regarding workers’ compensation, the Company self-insures to its deductible and purchases statutorily required insurance coverage in excess of its deductible. There is a risk that amounts funded by the Company’s self-insurance programs may not be sufficient to respond to all claims asserted under those programs. Insurance reserves represent estimates of future claims payments. This liability includes an estimate of the development of reported losses and losses incurred but not reported. Provisions for changes in insurance reserves are made in the period of the related coverage. The Company also considers amounts that may be recovered from excess insurance carriers in estimating the ultimate net liability for such risks. The Company’s management employs its judgment and periodic independent actuarial analysis in determining the adequacy of certain self-insured workers’ compensation and general and professional liability obligations recorded as liabilities in the Company’s financial statements. The Company evaluates the adequacy of its self-insurance reserves on a semi-annual basis or more frequently when it is aware of changes to its incurred loss patterns that could impact the accuracy of those reserves. The methods of making such estimates and establishing the resulting reserves are reviewed periodically and are based on historical paid claims information and nationwide nursing home trends. The foundation for most of these methods is the Company’s actual historical reported and/or paid loss data. Any adjustments resulting therefrom are reflected in current earnings. Claims are paid over varying periods, and future payments may be different than the estimated reserves. The Company utilizes a combination of third-party administrators (TPAs), in-house adjusters, and legal counsel, along with systems designed to maintain and process claims, to provide it with the data utilized in its assessments of reserve adequacy. Where TPAs are utilized, they operate under the oversight of the Company’s in-house risk management and legal functions. These functions and systems ensure that the claims are properly administered so that the historical data is reliable for estimation purposes. Case reserves, which are approved by the Company’s legal and risk management departments, are determined based on an estimate of the ultimate settlement and/or ultimate loss exposure of individual claims. The reserves for loss for workers’ compensation risks are discounted based on actuarial estimates of claim payment patterns using a discount rate for the current policy year of 1.8%. The discount rates are based upon the risk-free rate for the appropriate duration for the respective policy year. The removal of discounting would have resulted in an increased reserve for workers’ compensation risks of $9.5 million and $8.3 million as of September 30, 2019 and December 31, 2018, respectively. The reserves for general and professional liability are recorded on an undiscounted basis. For the three months ended September 30, 2019 and 2018, the provision for general and professional liability risk totaled $16.1 million and $25.0, respectively. For the nine months ended September 30, 2019 and 2018, the provision for general and professional liability risk totaled $42.9 million and $79.2 million, respectively. The reduction in the provision for general and professional liability for the three and nine months ended September 30, 2019 is the result of favorable prior year claim development and lower current year loss exposures. The favorable development is due to the combination of the ongoing impact of tort reform, claim settlements, and other risk management initiatives. The reserves for general and professional liability were $393.2 million and $435.3 million as of September 30, 2019 and December 31, 2018, respectively. For the three months ended September 30, 2019, and 2018, the provision for workers’ compensation risk totaled $14.0 million and $15.0 million, respectively. For the nine months ended September 30, 2019 and 2018, the provision for workers’ compensation risk totaled $42.7 million and $41.4 million, respectively. The reserves for workers’ compensation risks were $171.0 million and $168.3 million as of September 30, 2019 and December 31, 2018, respectively. Health Insurance The Company offers employees an option to participate in self-insured health plans. Health insurance claims are paid as they are submitted to the plans’ administrators. The Company maintains an accrual for claims that have been incurred but not yet reported to the plans’ administrators and therefore have not yet been paid. This accrual for incurred but not yet reported claims was $15.0 million and $16.6 million as of September 30, 2019 and December 31, 2018, respectively. The liability for the self-insured health plan is recorded in accrued compensation in the consolidated balance sheets. Although management believes that the amounts provided in the Company’s consolidated financial statements are adequate and reasonable, there can be no assurances that the ultimate liability for such self-insured risks will not exceed management’s estimates. Legal Proceedings The Company and certain of its subsidiaries are involved in various litigation and regulatory investigations arising in the ordinary course of business. While there can be no assurance, based on the Company’s evaluation of information currently available, management does not believe the results of such litigation and regulatory investigations would have a material adverse effect on the results of operations, financial position or cash flows of the Company. However, the Company’s assessment of materiality may be affected by limited information (particularly in the early stages of government investigations). Accordingly, the Company’s assessment of materiality may change in the future based upon availability of discovery and further developments in the proceedings at issue. The results of legal proceedings are inherently uncertain, and material adverse outcomes are possible. From time to time the Company may enter into confidential discussions regarding the potential settlement of pending investigations or litigation. There are a variety of factors that influence the Company’s decisions to settle and the amount it may choose to pay, including the strength of the Company’s case, developments in the investigation or litigation, the behavior of other interested parties, the demand on management time and the possible distraction of the Company’s employees associated with the case and/or the possibility that the Company may be subject to an injunction or other equitable remedy. The settlement of any pending investigation, litigation or other proceedings could require the Company to make substantial settlement payments and result in its incurring substantial costs. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | (16) The Company’s financial instruments consist primarily of cash and cash equivalents, restricted cash and equivalents, restricted investments in marketable securities, accounts receivable, accounts payable and current and long-term debt. The Company’s financial instruments, other than its accounts receivable and accounts payable, are spread across a number of large financial institutions whose credit ratings the Company monitors and believes do not currently carry a material risk of non-performance. Recurring Fair Value Measures Fair value is defined as an exit price (i.e., the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as shown below. An instrument’s classification within the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 — Inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability. Level 3 — Inputs that are unobservable for the asset or liability based on the Company’s own assumptions (about the assumptions market participants would use in pricing the asset or liability). The tables below present the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable September 30, Identical Assets Observable Inputs Inputs Assets: 2019 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 34,837 $ 34,837 $ — $ — Restricted cash and equivalents 93,232 93,232 — — Restricted investments in marketable securities 128,994 43,829 85,165 — Total $ 257,063 $ 171,898 $ 85,165 $ — Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs Assets: 2018 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 20,865 $ 20,865 $ — $ — Restricted cash and equivalents 121,411 121,411 — — Restricted investments in marketable securities 136,153 40,699 95,454 — Total $ 278,429 $ 182,975 $ 95,454 $ — The Company places its cash and cash equivalents, restricted cash and equivalents and restricted investments in marketable securities in quality financial instruments and limits the amount invested in any one institution or in any one type of instrument. The Company has not experienced any significant losses on such investments. Many of the Company’s financial instruments have quoted prices but are traded less frequently, instruments whose fair value has been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fairly valued using other financial instruments, the parameters of which can be directly observed. These financial instruments have been reported as Level 2 measurements. Debt Instruments The table below shows the carrying amounts and estimated fair values, net of debt issuance costs and other non-cash debt discounts and premiums, of the Company’s primary long-term debt instruments (in thousands): September 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value Asset based lending facilities $ 384,866 $ 384,866 $ 419,289 $ 419,289 Term loan agreements 193,380 193,380 184,652 184,652 Real estate loans 266,003 266,003 307,690 307,690 HUD insured loans 117,699 117,699 181,762 180,950 Notes payable 78,157 78,157 81,398 81,398 Mortgages and other secured debt (recourse) 5,450 5,450 4,190 4,190 Mortgages and other secured debt (non-recourse) 497,142 497,142 26,483 26,483 $ 1,542,697 $ 1,542,697 $ 1,205,464 $ 1,204,652 The fair value of debt is based upon market prices or is computed using discounted cash flow analysis, based on the Company’s estimated borrowing rate at the end of each fiscal period presented. The majority of the Company’s debt instruments contain variable rates that are based upon current market prices, or have been refinanced within the recent past. Consequently, management believes the carrying value of these debt instruments approximates fair value. The Company believes this approach approximates the exit price notion of fair value measurement and the inputs to the pricing models qualify as Level 2 measurements. Non-Recurring Fair Value Measures The Company recently applied the fair value measurement principles to certain of its non-recurring nonfinancial assets in connection with an impairment test . The following tables presents the Company’s hierarchy for nonfinancial assets measured at fair value on a non-recurring basis (in thousands): Impairment Charges - Carrying Value Nine months ended September 30, 2019 September 30, 2019 Assets: Property and equipment, net $ 957,218 $ 10,696 Finance lease right-of-use assets, net 37,685 — Operating lease right-of-use assets 2,416,914 6,241 Intangible assets, net 90,079 — Goodwill 85,642 — Impairment Charges - Carrying Value Nine months ended December 31, 2018 September 30, 2018 Assets: Property and equipment, net $ 2,887,554 $ 88,008 Intangible assets, net 119,082 2,061 Goodwill 85,642 — The fair value allocation related to the Company’s acquisitions and the fair value of tangible and intangible assets related to the Company’s impairment analysis are determined using a discounted cash flow approach, which is a significant unobservable input (Level 3). The Company estimates the fair value using the income approach, which is a discounted cash flow technique. These valuation methods required management to make various assumptions, including, but not limited to, future profitability, cash flows and discount rates. The Company’s estimates are based upon historical trends, management’s knowledge and experience and overall economic factors, including projections of future earnings potential. Developing discounted future cash flows in applying the income approach requires the Company to evaluate its intermediate to longer-term strategies, including, but not limited to, estimates of revenue growth, operating margins, capital requirements, inflation and working capital management. The development of appropriate rates to discount the estimated future cash flows requires the selection of risk premiums, which can materially affect the present value of future cash flows. The Company estimated the fair value of acquired tangible and intangible assets using discounted cash flow techniques that included an estimate of future cash flows, consistent with overall cash flow projections used to determine the purchase price paid to acquire the business, discounted at a rate of return that reflects the relative risk of the cash flows. The Company believes the estimates and assumptions used in the valuation methods are reasonable. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events. | |
Subsequent Events | (17) Subsequent Events On October 1, 2019, the Company divested or exited the operations of two skilled nursing facilities in New Jersey and California, which in total, generated annual revenues of $17.2 million and pre-tax net loss of $0.7 million. A loss on divestiture of the two operations totaling $0.7 million was recognized in the three and nine months ended September 30, 2019 and is included in other income in the consolidated statements of operations. |
General Information (Policies)
General Information (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
General Information | |
Description of Business | Description of Business Genesis Healthcare, Inc. is a healthcare services company that through its subsidiaries (collectively, the Company or Genesis), owns and operates skilled nursing facilities, assisted/senior living facilities and a rehabilitation therapy business. The Company has an administrative services company that provides a full complement of administrative and consultative services that allows its affiliated operators and third-party operators with whom the Company contracts to better focus on delivery of healthcare services. At September 30, 2019, the Company provides inpatient services through 384 skilled nursing, assisted/senior living and behavioral health centers located in 26 states. Revenues of the Company’s owned, leased and otherwise consolidated inpatient businesses constitute approximately 86% of its revenues. The Company provides a range of rehabilitation therapy services, including speech pathology, physical therapy, occupational therapy and respiratory therapy. These services are provided by rehabilitation therapists and assistants employed or contracted at substantially all of the centers operated by the Company, as well as by contract to healthcare facilities operated by others. The Company has expanded its delivery model for providing rehabilitation services to community-based and at-home settings, as well as internationally in China. After the elimination of intercompany revenues, the rehabilitation therapy services business constitutes approximately 11% of the Company’s revenues. The Company provides an array of other specialty medical services, including management services, physician services, staffing services, and other healthcare related services, which comprise the balance of the Company’s revenues. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). In the opinion of management, the consolidated financial statements include all necessary adjustments for a fair presentation of the financial position and results of operations for the periods presented. The consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation. The Company presents noncontrolling interests within the stockholders’ deficit section of its consolidated balance sheets. The Company presents the amount of net income (loss) attributable to Genesis Healthcare, Inc. and net income (loss) attributable to noncontrolling interests in its consolidated statements of operations. The consolidated financial statements include the accounts of all entities controlled by the Company through its ownership of a majority voting interest and the accounts of any variable interest entities (VIEs) where the Company is subject to a majority of the risk of loss from the VIE's activities, or entitled to receive a majority of the entity's residual returns, or both. The Company assesses the requirements related to the consolidation of VIEs, including a qualitative assessment of control and economics that considers which entity has the power to direct the activities that "most significantly impact" the VIE's economic performance and has the obligation to absorb losses of, or the right to receive benefits that could be potentially significant to the VIE. In the first quarter of 2019, the Company entered into a partnership that acquired the real property of 15 skilled nursing facilities that are leased to the Company. The partnership qualifies as a consolidated VIE. See Note 3 – “ Significant Transactions and Events – Strategic Partnerships – Next Partnership .” In the third quarter of 2019, the Company entered into a partnership that acquired the real property of 18 skilled nursing facilities that are leased to the Company. The partnership qualifies as a consolidated VIE. See Note 3 – “Significant Transactions and Events – Strategic Partnerships – Vantage Point Partnership.” The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and do not include all of the disclosures normally required by U.S. GAAP or those normally required in annual reports on Form 10-K. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2018 filed with the U.S. Securities and Exchange Commission (the SEC) on Form 10-K on March 18, 2019. Certain prior year disclosure amounts have been reclassified to conform to current period presentation. |
Financial Condition and Liquidity Considerations | Financial Condition and Liquidity Considerations The accompanying consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In evaluating the Company’s ability to continue as a going concern, management considered the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern for 12 months following the date the Company’s financial statements were issued (November 8, 2019). Management considered the recent results of operations as well as the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s conditional and unconditional obligations due before November 8, 2020. Based upon such considerations, management determined that there are no known or knowable conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern for 12 months following the date of issuance of these financial statements (November 8, 2019). The Company’s results of operations continue to be negatively impacted by the persistent pressure of healthcare reforms enacted in recent years. This challenging operating environment has been most acute in the Company’s inpatient segment, but also has had a detrimental effect on the Company’s rehabilitation therapy segment and its customers. In recent years, the Company has implemented a number of cost mitigation strategies to offset the negative financial implications of this challenging operating environment. The Company expects to continue to pursue cost mitigation and other strategies in 2019 in response to the operating environment and liquidity requirements. During the nine months ended September 30, 2019, the Company amended, or obtained waivers related to, the financial covenants of all of its material debt and lease agreements to account for these ongoing changes in its capital structure and business conditions. Although the Company is and projects to be in compliance with all of its material debt and lease covenants through November 8, 2020, the ongoing uncertainty related to the impact of healthcare reform initiatives may have an adverse impact on the Company’s ability to remain in compliance with the covenants. Should the Company fail to comply with its debt and lease covenants at a future measurement date it could, absent necessary and timely waivers and/or amendments, be in default under certain of its existing debt and lease agreements. To the extent any cross-default provisions apply, the default could have a more significant impact on the Company’s financial position. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) established Accounting Standards Codification (ASC) Topic 842, Leases (Topic 842), by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842 ; ASU No. 2018-10, Codification Improvements to Topic 842, Leases ; and ASU No. 2018-11, Targeted Improvements . The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted the new standard on January 1, 2019. The Company elected the option to apply the transition requirements in Topic 842 at the effective date of January 1, 2019 with the effects of initially applying Topic 842 recognized as a cumulative-effect adjustment to accumulated deficit in the period of adoption. Consequently, financial information has not been updated and the disclosures required under the new standard have not been provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. The Company has elected the ‘package of practical expedients’, which permit it to not reassess its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company. The adoption of the new standard had a material effect on the Company’s financial statements. The most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on its balance sheet for real estate operating leases; (2) the derecognition of existing assets and liabilities for sale-leaseback transactions (including those arising from build-to-suit lease arrangements for which construction is complete and the Company is leasing the constructed asset) that historically did not qualify for sale accounting; and (3) providing significant new disclosures about its leasing activities. Upon adoption, the Company: · Recognized operating lease liabilities of $0.6 billion based on the present value of the remaining minimum rental payments as determined in accordance with Topic 842 for leases that had historically been accounted for as operating leases under the previous leasing standards. The Company recognized corresponding ROU assets of approximately $0.5 billion based on the operating lease liabilities, adjusted for existing straight-line lease liabilities, existing assets and liabilities related to favorable and unfavorable terms of operating leases previously recognized in respect of business combinations, and the impairment of the ROU assets. The resulting net impact of $0.1 billion associated with this change in accounting was recognized as an increase to opening accumulated deficit as of January 1, 2019. · Derecognized existing financing obligations of $2.7 billion and existing property and equipment of $1.7 billion. The Company recognized new operating lease liabilities and corresponding ROU assets of $1.9 billion on its balance sheet for the associated leases. The resulting net impact of $1.0 billion associated with this change in accounting was recognized as a reduction to opening accumulated deficit as of January 1, 2019. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company does not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. See Note 8 – “ Leases. ” In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which permits entities to reclassify the disproportionate income tax effects of the Tax Cuts and Jobs Act (Tax Reform Act) on items within accumulated other comprehensive income (loss) to retained earnings. These disproportionate income tax effect items are referred to as "stranded tax effects." Amendments in this update only relate to the reclassification of the income tax effects of the Tax Reform Act. Other accounting guidance that requires the effect of changes in tax laws or rates to be included in net income from continuing operations is not affected by this update. The Company adopted the new standard on January 1, 2019. The adoption of ASU 2018-02 did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement , which simplifies the fair value measurement disclosure requirements. The standard is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effect that the standard will have on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments , which is intended to improve financial reporting by requiring earlier recognition of credit losses on certain financial assets, such as available-for-sale debt securities. The standard replaces the current incurred loss impairment model that recognizes losses when a probable threshold is met with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased. Further, the FASB issued ASU 2019-04 and ASU 2019-05 to provide additional guidance on the credit losses standard. The standard is effective for fiscal years beginning after December 15, 2022, for smaller reporting companies, including interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the effect that the standard will have on its consolidated financial statements and related disclosures. |
Certain Significant Risks and_2
Certain Significant Risks and Uncertainties (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Certain Significant Risks and Uncertainties | |
Schedule of revenue by major source (in thousands) | Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Medicare 19 % 21 % 20 % 22 % Medicaid 59 % 58 % 58 % 57 % Insurance 12 % 12 % 12 % 12 % Private 8 % 8 % 8 % 8 % Other 2 % 1 % 2 % 1 % Total 100 % 100 % 100 % 100 % |
Net Revenues and Accounts Recei
Net Revenues and Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Net Revenues and Accounts Receivable | |
Schedule of revenues by revenue source | The composition of net revenues by payor type and operating segment for the three and nine months ended September 30, 2019 and 2018 are as follows (in thousands): Three months ended September 30, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 187,493 $ 22,643 $ — $ 210,136 Medicaid 572,100 560 — 572,660 Insurance 111,529 5,453 — 116,982 Private 77,440 66 — 77,506 Third party providers — 85,051 17,285 102,336 Other 17,449 2,527 24,109 44,085 Total net revenues $ 966,011 $ 116,300 $ 41,394 $ 1,123,705 Three months ended September 30, 2018 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 216,382 $ 22,756 $ — $ 239,138 Medicaid 613,539 545 — 614,084 Insurance 125,060 5,412 — 130,472 Private 85,148 139 — 85,287 Third party providers — 99,851 17,995 117,846 Other 14,539 3,461 12,444 30,444 Total net revenues $ 1,054,668 $ 132,164 $ 30,439 $ 1,217,271 (1) Includes Assisted/Senior living revenue of $23.1 million and $24.0 million for the three months ended September 30, 2019 and 2018, respectively. Such amounts do not represent contracts with customers under ASC 606. (2) Primarily consists of revenue from Veteran Affairs and administration of third party facilities. (3) Includes net revenues from all payors generated by the other services, excluding third party providers. Nine months ended September 30, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 596,468 $ 68,387 $ — $ 664,855 Medicaid 1,730,147 1,688 — 1,731,835 Insurance 351,228 16,603 — 367,831 Private 233,499 270 — 233,769 Third party providers — 262,689 58,379 321,068 Other 51,659 8,438 50,942 111,039 Total net revenues $ 2,963,001 $ 358,075 $ 109,321 $ 3,430,397 Nine months ended September 30, 2018 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 700,202 $ 68,861 $ — $ 769,063 Medicaid 1,854,706 1,584 — 1,856,290 Insurance 400,889 18,020 — 418,909 Private 258,887 391 — 259,278 Third party providers — 319,015 63,500 382,515 Other 50,924 13,911 39,813 104,648 Total net revenues $ 3,265,608 $ 421,782 $ 103,313 $ 3,790,703 (1) Includes Assisted/Senior living revenue of $70.4 million and $71.2 million for the nine months ended September 30, 2019 and 2018, respectively. Such amounts do not represent contracts with customers under ASC 606. (2) Primarily consists of revenue from Veteran Affairs and administration of third party facilities. (3) Includes net revenues from all payors generated by the other services, excluding third party providers. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings (Loss) Per Share | |
Reconciliation of the numerator and denominator used in the calculation of net income per share | A reconciliation of the numerator and denominator used in the calculation of diluted net income (loss) per common share follows (in thousands, except per share data): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Numerator: Net income (loss) $ 58,898 $ (91,901) $ 24,833 $ (263,431) Less: Net (income) loss attributable to noncontrolling interests (12,801) 33,773 1,182 97,153 Net income (loss) attributable to Genesis Healthcare, Inc. $ 46,097 $ (58,128) $ 26,015 $ (166,278) Plus: Assumed conversion of noncontrolling interests 20,179 — 8,060 — Net income (loss) available to common stockholders after assumed conversions $ 66,276 $ (58,128) $ 34,075 $ (166,278) Denominator: Weighted-average common shares outstanding 109,123 102,489 106,581 100,461 Plus: Assumed conversion of noncontrolling interests 56,605 — 57,313 — Plus: Unvested restricted stock units and stock warrants 274 — 689 — Adjusted weighted-average common shares outstanding, diluted 166,002 102,489 164,583 100,461 Diluted net income (loss) per common share attributable to Genesis Healthcare, Inc. $ 0.40 $ (0.57) $ 0.21 $ (1.66) |
Schedule of reconciliation of the numerator and denominator used in the calculation of basic net income (loss) per common share | A reconciliation of the numerator and denominator used in the calculation of basic net income (loss) per common share follows (in thousands, except per share data): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Numerator: Net income (loss) $ 58,898 $ (91,901) $ 24,833 $ (263,431) Less: Net (income) loss attributable to noncontrolling interests (12,801) 33,773 1,182 97,153 Net income (loss) attributable to Genesis Healthcare, Inc. $ 46,097 $ (58,128) $ 26,015 $ (166,278) Denominator: Weighted-average shares outstanding for basic net income (loss) per share 109,123 102,489 106,581 100,461 Basic net income (loss) per common share attributable to Genesis Healthcare, Inc. $ 0.42 $ (0.57) $ 0.24 $ (1.66) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Information | |
Summary of segmented revenues | A summary of the Company’s segmented revenues follows (in thousands, except percentages): Three months ended September 30, 2019 2018 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage Revenues: Inpatient services: Skilled nursing facilities $ 941,722 83.8 % $ 1,029,453 84.6 % $ (87,731) (8.5) % Assisted/Senior living facilities 23,057 2.1 % 23,974 2.0 % (917) (3.8) % Administration of third party facilities 1,980 0.2 % 2,025 0.2 % (45) (2.2) % Elimination of administrative services (748) (0.1) % (784) (0.1) % 36 (4.6) % Inpatient services, net 966,011 86.0 % 1,054,668 86.7 % (88,657) (8.4) % Rehabilitation therapy services: Total therapy services 183,898 16.4 % 214,421 17.6 % (30,523) (14.2) % Elimination of intersegment rehabilitation therapy services (67,598) (6.0) % (82,257) (6.8) % 14,659 (17.8) % Third party rehabilitation therapy services, net 116,300 10.4 % 132,164 10.8 % (15,864) (12.0) % Other services: Total other services 55,532 4.9 % 38,526 3.2 % 17,006 44.1 % Elimination of intersegment other services (14,138) (1.3) % (8,087) (0.7) % (6,051) 74.8 % Third party other services, net 41,394 3.6 % 30,439 2.5 % 10,955 36.0 % Net revenues $ 1,123,705 100.0 % $ 1,217,271 100.0 % $ (93,566) (7.7) % Nine months ended September 30, 2019 2018 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage Revenues: Inpatient services: Skilled nursing facilities $ 2,888,659 84.1 % $ 3,190,065 84.2 % $ (301,406) (9.4) % Assisted/Senior living facilities 70,408 2.1 % 71,220 1.9 % (812) (1.1) % Administration of third party facilities 6,281 0.2 % 6,577 0.2 % (296) (4.5) % Elimination of administrative services (2,347) (0.1) % (2,254) (0.1) % (93) 4.1 % Inpatient services, net 2,963,001 86.3 % 3,265,608 86.2 % (302,607) (9.3) % Rehabilitation therapy services: Total therapy services 571,875 16.7 % 685,672 18.1 % (113,797) (16.6) % Elimination of intersegment rehabilitation therapy services (213,800) (6.2) % (263,890) (7.0) % 50,090 (19.0) % Third party rehabilitation therapy services, net 358,075 10.5 % 421,782 11.1 % (63,707) (15.1) % Other services: Total other services 143,139 4.2 % 124,300 3.3 % 18,839 15.2 % Elimination of intersegment other services (33,818) (1.0) % (20,987) (0.6) % (12,831) 61.1 % Third party other services, net 109,321 3.2 % 103,313 2.7 % 6,008 5.8 % Net revenues $ 3,430,397 100.0 % $ 3,790,703 100.0 % $ (360,306) (9.5) % |
Summary of condensed consolidated statements of operations, Total assets and Goodwill | A summary of the Company’s unaudited condensed consolidated statement of operations follows (in thousands): Three months ended September 30, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 966,759 $ 183,898 $ 55,515 $ 17 $ (82,484) $ 1,123,705 Salaries, wages and benefits 437,508 152,793 30,192 — — 620,493 Other operating expenses 394,115 11,779 16,421 — (82,874) 339,441 General and administrative costs — — — 35,930 — 35,930 Lease expense 98,987 320 384 327 — 100,018 Depreciation and amortization expense 29,263 2,934 176 2,559 — 34,932 Interest expense 12,363 14 9 24,713 — 37,099 Loss on early extinguishment of debt — — — 2,460 — 2,460 Investment income — — — (2,071) — (2,071) Other income (131,811) — — — — (131,811) Transaction costs — — — 12,941 — 12,941 Long-lived asset impairments 16,037 — — — — 16,037 Equity in net loss (income) of unconsolidated affiliates — — — 2,932 (3,025) (93) Income (loss) before income tax benefit 110,297 16,058 8,333 (79,774) 3,415 58,329 Income tax benefit — — — (569) — (569) Income (loss) from continuing operations $ 110,297 $ 16,058 $ 8,333 $ (79,205) $ 3,415 $ 58,898 Three months ended September 30, 2018 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 1,055,452 $ 214,421 $ 38,463 $ 63 $ (91,128) $ 1,217,271 Salaries, wages and benefits 480,345 175,098 25,161 — — 680,604 Other operating expenses 428,398 12,891 20,902 — (91,127) 371,064 General and administrative costs — — — 35,482 — 35,482 Lease expense 31,732 — 316 318 — 32,366 Depreciation and amortization expense 46,472 3,147 172 3,247 — 53,038 Interest expense 91,106 14 9 24,566 — 115,695 Investment income — — — (2,178) — (2,178) Other income (20,207) — — — — (20,207) Transaction costs — — — 11,361 — 11,361 Long-lived asset impairments 32,390 — — — — 32,390 Goodwill and identifiable intangible asset impairments 929 — — — — 929 Equity in net (income) loss of unconsolidated affiliates — — — (523) 371 (152) (Loss) income before income tax benefit (35,713) 23,271 (8,097) (72,210) (372) (93,121) Income tax benefit — — — (1,220) — (1,220) (Loss) income from continuing operations $ (35,713) $ 23,271 $ (8,097) $ (70,990) $ (372) $ (91,901) Nine months ended September 30, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 2,965,348 $ 571,875 $ 142,905 $ 234 $ (249,965) $ 3,430,397 Salaries, wages and benefits 1,336,298 464,740 88,024 — — 1,889,062 Other operating expenses 1,185,684 34,866 44,312 — (250,355) 1,014,507 General and administrative costs — — — 107,024 — 107,024 Lease expense 285,510 985 1,064 1,106 — 288,665 Depreciation and amortization expense 83,463 9,210 524 8,198 — 101,395 Interest expense 68,454 41 26 73,069 — 141,590 Loss on early extinguishment of debt — — — 2,436 — 2,436 Investment income — — — (6,078) — (6,078) Other (income) loss (172,126) (76) 61 — — (172,141) Transaction costs — — — 23,025 — 23,025 Long-lived asset impairments 16,937 — — — — 16,937 Equity in net loss (income) of unconsolidated affiliates — — — 4,318 (4,496) (178) Income (loss) before income tax benefit 161,128 62,109 8,894 (212,864) 4,886 24,153 Income tax benefit — — — (680) — (680) Income (loss) from continuing operations $ 161,128 $ 62,109 $ 8,894 $ (212,184) $ 4,886 $ 24,833 Nine months ended September 30, 2018 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 3,267,862 $ 685,672 $ 124,184 $ 116 $ (287,131) $ 3,790,703 Salaries, wages and benefits 1,477,153 562,875 82,100 — — 2,122,128 Other operating expenses 1,323,423 41,707 47,780 — (287,131) 1,125,779 General and administrative costs — — — 114,404 — 114,404 Lease expense 95,660 — 959 929 — 97,548 Depreciation and amortization expense 147,552 9,479 509 10,496 — 168,036 Interest expense 277,753 41 27 70,866 — 348,687 Loss on early extinguishment of debt — — — 9,785 — 9,785 Investment income — — — (4,856) — (4,856) Other (income) loss (42,438) — 78 — — (42,360) Transaction costs — — — 26,567 — 26,567 Long-lived asset impairments 88,008 — — — — 88,008 Goodwill and identifiable intangible asset impairments 2,061 — — — — 2,061 Equity in net (income) loss of unconsolidated affiliates — — — (1,029) 1,135 106 (Loss) income before income tax benefit (101,310) 71,570 (7,269) (227,046) (1,135) (265,190) Income tax benefit — — — (1,759) — (1,759) (Loss) income from continuing operations $ (101,310) $ 71,570 $ (7,269) $ (225,287) $ (1,135) $ (263,431) The following table presents the segment assets as of September 30, 2019 compared to December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Inpatient services $ 4,224,275 $ 3,735,778 Rehabilitation therapy services 297,097 329,687 Other services 47,798 36,240 Corporate and eliminations 104,977 161,918 Total assets $ 4,674,147 $ 4,263,623 The following table presents segment goodwill as of September 30, 2019 compared to December 31, 2018 (in thousands): Inpatient Rehabilitation Therapy Services Other Services Consolidated Balance at December 31, 2018 Goodwill 351,470 73,814 11,828 437,112 Accumulated impairment losses (351,470) — — (351,470) $ — $ 73,814 $ 11,828 $ 85,642 Balance at September 30, 2019 Goodwill 351,470 73,814 11,828 437,112 Accumulated impairment losses (351,470) — — (351,470) $ — $ 73,814 $ 11,828 $ 85,642 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property and Equipment | |
Schedule of property and equipment | Property and equipment consisted of the following as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Land, buildings and improvements $ 990,977 $ 469,575 Finance lease land, buildings and improvements — 693,546 Financing obligation land, buildings and improvements — 2,274,211 Equipment, furniture and fixtures 380,907 417,684 Construction in progress 2,771 9,340 Gross property and equipment 1,374,655 3,864,356 Less: accumulated depreciation (417,437) (976,802) Net property and equipment $ 957,218 $ 2,887,554 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Schedule of finance lease liability maturities | Year ending December 31, Operating Leases Finance Leases (1) 2019 (excluding nine months ended September 30, 2019) $ 94,983 $ 1,888 2020 382,353 7,570 2021 385,990 7,379 2022 381,397 7,168 2023 380,751 6,927 Thereafter 3,411,293 42,564 Total lease payments 5,036,767 73,496 Less interest (2,201,697) (31,082) Total lease obligations 2,835,070 42,414 Less current portion (137,574) (2,738) Long-term lease obligations $ 2,697,496 $ 39,676 (1) Finance lease payments include $37.2 million related to options to extend lease terms that are reasonably certain of being exercised. |
Schedule of operating lease liability maturities | Year ending December 31, Operating Leases Finance Leases (1) 2019 (excluding nine months ended September 30, 2019) $ 94,983 $ 1,888 2020 382,353 7,570 2021 385,990 7,379 2022 381,397 7,168 2023 380,751 6,927 Thereafter 3,411,293 42,564 Total lease payments 5,036,767 73,496 Less interest (2,201,697) (31,082) Total lease obligations 2,835,070 42,414 Less current portion (137,574) (2,738) Long-term lease obligations $ 2,697,496 $ 39,676 |
Schedule of future minimum lease commitments under ASC 840 | The Company’s future minimum commitments under finance leases (formerly capital leases), financing obligations, and operating leases as of December 31, 2018 were as follows (in thousands): Year ending December 31, Finance Leases Financing Obligations Operating Leases 2019 $ 88,793 $ 237,335 $ 110,755 2020 89,397 242,052 109,391 2021 91,292 245,311 106,031 2022 93,281 242,214 84,003 2023 95,376 247,852 76,701 Thereafter 3,325,042 6,661,624 373,753 Total future minimum lease payments 3,783,181 7,876,388 $ 860,634 Less amount representing interest (2,813,068) (5,141,448) Total lease obligation 970,113 2,734,940 Less current portion (2,171) (2,001) Long-term obligation $ 967,942 $ 2,732,939 |
Schedule of components of lease costs | Three months ended Nine months ended Lease Cost Classification September 30, 2019 September 30, 2019 Operating lease cost Lease expense $ 100,018 $ 288,665 Finance lease cost: Amortization of finance lease right-of-use assets Depreciation and amortization expense 1,734 15,222 Interest on finance lease obligations Interest expense 4,299 48,931 Total finance lease expense 6,033 64,153 Variable lease cost Other operating expenses 10,697 32,027 Short-term leases Other operating expenses 5,980 18,596 Total lease cost $ 122,728 $ 403,441 |
Schedule of quantitative information associated with operating and finance leases | Lease Term and Discount Rate September 30, 2019 Weighted-average remaining lease term (years) Operating leases 13.4 Finance leases 8.1 Weighted-average discount rate Operating leases Finance leases The following table includes supplemental lease information for the three and nine months ended September 30, 2019 (in thousands): Three months ended Nine months ended Other information September 30, 2019 September 30, 2019 Cash paid for amounts included in the measurement of lease obligations Operating cash flows from operating leases $ 98,521 $ 270,449 Operating cash flows from finance leases 4,835 45,286 Financing cash flows from finance leases 702 1,973 Right-of-use assets obtained in exchange for new lease obligations Operating leases 5,306 82,471 Finance leases 688 688 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Long-Term Debt. | |
Schedule of long-term debt | Long-term debt at September 30, 2019 and December 31, 2018 consisted of the following (in thousands): September 30, 2019 December 31, 2018 Asset based lending facilities, net of debt issuance costs of $9,295 and $11,335 at September 30, 2019 and December 31, 2018, respectively $ 384,866 $ 419,289 Term loan agreements, net of debt issuance costs of $1,226 and $1,851 and debt premium balance of $5,473 and $8,446 at September 30, 2019 and December 31, 2018, respectively 193,380 184,652 Real estate loans, net of debt issuance costs of $4,224 and $5,360 and debt premium balance of $21,744 and $28,992 at September 30, 2019 and December 31, 2018, respectively 266,003 307,690 HUD insured loans, net of debt issuance costs of $2,936 and $5,247 and debt premium balance of $0 and $860 at September 30, 2019 and December 31, 2018, respectively 117,699 181,762 Notes payable 78,157 81,398 Mortgages and other secured debt (recourse) 5,450 4,190 Mortgages and other secured debt (non-recourse), net of debt issuance costs of $7,890 and $187 and debt premium balance of $1,447 and $1,520 at September 30, 2019 and December 31, 2018, respectively 497,142 26,483 1,542,697 1,205,464 Less: Current installments of long-term debt (121,745) (122,531) Long-term debt $ 1,420,952 $ 1,082,933 |
Schedule of borrowings and interest rates under ABL Credit Facility | Borrowings and interest rates under the ABL Credit Facilities were as follows at September 30, 2019 (dollars in thousands): Weighted Average ABL Credit Facilities Commitment Borrowings Interest Term loan facility $ 285,000 $ 285,000 8.09 % Revolving credit facility (Non-HUD) 168,000 49,630 8.09 % Revolving credit facility (HUD) 72,000 29,530 8.09 % Delayed draw term loan facility 30,000 30,000 13.09 % $ 555,000 $ 394,160 8.47 % |
Schedule of maturity of total debt | The maturity of total debt of $1,539.6 million, excluding debt issuance costs and other non-cash debt discounts and premiums, at September 30, 2019 is as follows (in thousands): Twelve months ended September 30, 2020 $ 121,779 2021 5,411 2022 623,764 2023 341,338 2024 12,999 Thereafter 434,313 Total debt maturity $ 1,539,604 |
Other Income (Tables)
Other Income (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Other (Income) Loss. | |
Summary of Net (Gain) Loss Recorded as Other Income | The following table summarizes those net (gains) losses (in thousands): Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Gain on sale of owned assets $ (63,645) $ — $ (90,992) $ — Loss recognized for exit costs associated with divestiture of operations 6,725 8,223 14,647 17,371 Gain on lease termination or modification (74,891) — (95,796) — Gain on lease terminations and amendments - unamortized straight-lining, favorable and unfavorable lease balances — (76) — (12,013) Gain on lease terminations and amendments - unamortized financing lease and capital lease obligations — (31,817) — (53,027) Loss on lease termination settlement — 3,463 — 3,463 Loss associated with lease extensions or newly leased operations, net — — — 1,846 Total other income $ (131,811) $ (20,207) $ (172,141) $ (42,360) |
Assets Held for Sale (Tables)
Assets Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Assets Held for Sale | |
Schedule of major classes of assets and liabilities included as part of the disposal groups | The following table sets forth the major classes of assets and liabilities included as part of the disposal groups (in thousands): September 30, 2019 December 31, 2018 Current assets: Prepaid expenses $ 4,740 $ 3,375 Long-term assets: Property and equipment, net of accumulated depreciation of $5,840 and $3,640 at September 30, 2019 and December 31, 2018, respectively 32,517 16,087 Total assets $ 37,257 $ 19,462 Current liabilities: Current installments of long-term debt $ 1,020 $ 639 Long-term liabilities: Long-term debt 45,314 25,942 Total liabilities $ 46,334 $ 26,581 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value of Financial Instruments | |
Schedule of fair value of assets measured on a recurring basis | The tables below present the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable September 30, Identical Assets Observable Inputs Inputs Assets: 2019 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 34,837 $ 34,837 $ — $ — Restricted cash and equivalents 93,232 93,232 — — Restricted investments in marketable securities 128,994 43,829 85,165 — Total $ 257,063 $ 171,898 $ 85,165 $ — Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs Assets: 2018 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 20,865 $ 20,865 $ — $ — Restricted cash and equivalents 121,411 121,411 — — Restricted investments in marketable securities 136,153 40,699 95,454 — Total $ 278,429 $ 182,975 $ 95,454 $ — |
Schedule of carrying amounts and estimated fair values of long-term debt, net of issuance costs and other non-cash debt discounts and premiums | The table below shows the carrying amounts and estimated fair values, net of debt issuance costs and other non-cash debt discounts and premiums, of the Company’s primary long-term debt instruments (in thousands): September 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value Asset based lending facilities $ 384,866 $ 384,866 $ 419,289 $ 419,289 Term loan agreements 193,380 193,380 184,652 184,652 Real estate loans 266,003 266,003 307,690 307,690 HUD insured loans 117,699 117,699 181,762 180,950 Notes payable 78,157 78,157 81,398 81,398 Mortgages and other secured debt (recourse) 5,450 5,450 4,190 4,190 Mortgages and other secured debt (non-recourse) 497,142 497,142 26,483 26,483 $ 1,542,697 $ 1,542,697 $ 1,205,464 $ 1,204,652 |
Schedule of hierarchy of nonfinancial assets measured at fair value on a nonrecurring basis | The following tables presents the Company’s hierarchy for nonfinancial assets measured at fair value on a non-recurring basis (in thousands): Impairment Charges - Carrying Value Nine months ended September 30, 2019 September 30, 2019 Assets: Property and equipment, net $ 957,218 $ 10,696 Finance lease right-of-use assets, net 37,685 — Operating lease right-of-use assets 2,416,914 6,241 Intangible assets, net 90,079 — Goodwill 85,642 — Impairment Charges - Carrying Value Nine months ended December 31, 2018 September 30, 2018 Assets: Property and equipment, net $ 2,887,554 $ 88,008 Intangible assets, net 119,082 2,061 Goodwill 85,642 — |
General Information (Details)
General Information (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019state | Jun. 30, 2019facility | Mar. 31, 2019facility | Sep. 30, 2018 | Sep. 30, 2019statefacility | Sep. 30, 2018 | |
Revenue | Product Concentration Risk | ||||||
Concentration risk | ||||||
Concentration risk (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% | ||
Rehabilitation therapy service | Revenue | Product Concentration Risk | ||||||
Concentration risk | ||||||
Concentration risk (as a percent) | 10.40% | 10.80% | 10.50% | 11.10% | ||
Inpatient Services | ||||||
Description of business | ||||||
Number of skilled nursing, assisted/senior living and behavioral health centers through which inpatient services are provided | 384 | |||||
Number of states with facilities | state | 26 | 26 | ||||
Inpatient Services | Revenue | Product Concentration Risk | ||||||
Concentration risk | ||||||
Concentration risk (as a percent) | 86.00% | 86.70% | 86.30% | 86.20% | ||
Skilled Nursing Facility | ||||||
Concentration risk | ||||||
Number of facilities leased from VIE in partnership | 18 | 15 |
General Information - Recently
General Information - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Sep. 30, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease liability | $ 2,835,070 | |
Operating lease right-of-use assets | $ 2,416,914 | |
ASU 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Prior periods not restated upon adoption of ASU | true | |
Operating lease liability | $ 600,000 | |
Operating lease right-of-use assets | 500,000 | |
Increase in accumulated deficit | 100,000 | |
Net financing obligation derecognized | 2,700,000 | |
Property and equipment derecognized from PP&E due to adoption of Topic 842 | 1,700,000 | |
New operating lease liabilities | 1,900,000 | |
New operating lease right of use asset | 1,900,000 | |
Decrease in accumulated deficit | $ 1,000,000 | |
Practical expedients package adoption | true | |
Use-of-hindsight practical expedient election | false | |
Land easement practical expedient election | false |
Certain Significant Risks and_3
Certain Significant Risks and Uncertainties - Revenue Sources (Details) - Government contracts - Inpatient Services | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue Sources | ||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Medicare | ||||
Revenue Sources | ||||
Concentration Risk, Percentage | 19.00% | 21.00% | 20.00% | 22.00% |
Medicaid | ||||
Revenue Sources | ||||
Concentration Risk, Percentage | 59.00% | 58.00% | 58.00% | 57.00% |
Insurance | ||||
Revenue Sources | ||||
Concentration Risk, Percentage | 12.00% | 12.00% | 12.00% | 12.00% |
Private | ||||
Revenue Sources | ||||
Concentration Risk, Percentage | 8.00% | 8.00% | 8.00% | 8.00% |
Other | ||||
Revenue Sources | ||||
Concentration Risk, Percentage | 2.00% | 1.00% | 2.00% | 1.00% |
Revenue | Medicare and Medicaid | ||||
Revenue Sources | ||||
Concentration Risk, Percentage | 78.00% |
Certain Significant Risks and_4
Certain Significant Risks and Uncertainties - Concentration of Credit Risk (Details) - Credit Concentration Risk [Member] - Accounts Receivable - Rehabilitation Services $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($)customer | |
Minimum | |
Concentration Risk | |
Number of distinct customers | 160 |
Group Of Largest Customers | |
Concentration Risk | |
Concentration risk (as a percent) | 9.00% |
Number of former customers representing approximately 10% of gross outstanding contract receivables | 1 |
Contract receivables, net | $ | $ 8 |
Related Party Customer | |
Concentration Risk | |
Concentration risk (as a percent) | 35.00% |
Number of large customers comprising over 31% of the net outstanding contract receivables | 1 |
Contract receivables, net | $ | $ 32.5 |
Significant Transactions and _2
Significant Transactions and Events - Next Partnership (Details) $ in Thousands | Sep. 12, 2019USD ($)facilityitem | Jan. 31, 2019USD ($)facilityitem | Nov. 01, 2016item | Sep. 30, 2019facility | Sep. 30, 2019USD ($)facility | Mar. 31, 2019USD ($)facility | Sep. 30, 2019USD ($) |
Acquisitions, Lease Amendments and Terminations | |||||||
Number of facilities sold | 64 | 8 | |||||
Annual rent | $ 100,018 | $ 288,665 | |||||
Variable Interest Entity [Abstract] | |||||||
Gain (loss) recognized in disposal group | (700) | (700) | |||||
Next Joint Venture | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Ownership interest in joint venture properties | 46.00% | ||||||
Next Partnership | |||||||
Variable Interest Entity [Abstract] | |||||||
Purchase price of facilities acquired | $ 252,500 | ||||||
Proceeds from sale of facilities | 79,000 | ||||||
Non-recourse debt | 165,700 | ||||||
Non-controlling interest | 18,500 | ||||||
Transaction costs | 5,300 | ||||||
Next Partnership | Land, Buildings and Improvements | |||||||
Variable Interest Entity [Abstract] | |||||||
Property, plant and equipment, net, increase due to consolidation | $ 173,500 | $ 173,500 | |||||
Next Partnership | Skilled Nursing Facility | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Number of facilities sold | facility | 7 | ||||||
Variable Interest Entity [Abstract] | |||||||
Number of facilities acquired | facility | 22 | ||||||
Number of facilities included in consolidation of VIE | facility | 15 | ||||||
Vantage Point Partnership | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Annual rent credits | $ 30,300 | ||||||
Fixed price purchase option premium percentage | 10.00% | ||||||
Variable Interest Entity [Abstract] | |||||||
Non-recourse debt | $ 306,100 | ||||||
Non-controlling interest | 8,500 | ||||||
Investment in unconsolidated joint venture | $ 3,700 | ||||||
Ownership interest | 30.00% | ||||||
Loans and Leases Receivable, Related Parties | $ 33,700 | ||||||
Other Transaction costs | $ 11,000 | ||||||
Annual revenues | 84,100 | ||||||
Pre-tax net income (loss) | 2,600 | ||||||
Gain (loss) recognized in disposal group | 58,200 | ||||||
Number Of Facilities Divested Or Closed | facility | 7 | ||||||
Vantage Point Partnership | Land, Buildings and Improvements | |||||||
Variable Interest Entity [Abstract] | |||||||
Property, plant and equipment, net, increase due to consolidation | $ 339,200 | 339,200 | |||||
Vantage Point Partnership | Skilled Nursing Facility | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Number of facilities sold | facility | 18 | ||||||
Variable Interest Entity [Abstract] | |||||||
Purchase price of facilities acquired | $ 339,200 | ||||||
Vantage Point Partnership | Next Joint Venture | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Payment for investment in joint venture | 37,500 | ||||||
Variable Interest Entity [Abstract] | |||||||
Payment for investment in joint venture | $ 37,500 | ||||||
Vantage Point Partnership | Georgia New Jersey Virginia and Maryland | Skilled Nursing Facility | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Number of facilities sold | facility | 7 | ||||||
Variable Interest Entity [Abstract] | |||||||
Purchase price of facilities acquired | $ 91,800 | ||||||
Vantage Point Partnership | Georgia New Jersey Virginia and Maryland | Assisted Or Senior Living Facility | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Number of facilities sold | facility | 1 | ||||||
Real estate loans | Vantage Point Partnership | |||||||
Variable Interest Entity [Abstract] | |||||||
Number of facilities divested or closed subjected to loans | facility | 3 | ||||||
HUD insured loans | Vantage Point Partnership | |||||||
Variable Interest Entity [Abstract] | |||||||
Number of facilities divested or closed subjected to loans | facility | 2 | ||||||
Next Joint Venture | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Payment for investment in joint venture | $ 16,000 | ||||||
Number of years after the start of lease the fixed price purchase option becomes exercisable | 5 years | ||||||
Latest number of years after start of lease the fixed price purchase option may be exercised | 7 years | ||||||
Fixed price purchase option premium percentage | 10.00% | ||||||
Variable Interest Entity [Abstract] | |||||||
Payment for investment in joint venture | $ 16,000 | ||||||
Next master lease agreement | Skilled Nursing Facility | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Number of facilities sold | facility | 19 | ||||||
Operating lease renewal term (in years) | 5 years | ||||||
Next master lease agreement | Vantage Point Partnership | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Term of operating lease | 15 years | ||||||
Number of renewal options | item | 2 | ||||||
Operating lease renewal term (in years) | 5 years | ||||||
Annual rent | $ 33,100 | ||||||
Annual Escalators (as a percent) | 2.00% | ||||||
Next master lease agreement | Next Joint Venture | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Term of operating lease | 15 years | ||||||
Number of renewal options | item | 2 | ||||||
Operating lease renewal term (in years) | 5 years | ||||||
Annual rent | $ 19,500 | ||||||
Annual Escalators (as a percent) | 2.00% | ||||||
Next master lease agreement | Next Joint Venture | Skilled Nursing Facility | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Annual Escalators (as a percent) | 0.00% | ||||||
Welltower | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Number of facilities sold | facility | 15 | ||||||
Annual rent credits | $ 1,900 | ||||||
Welltower | Vantage Point Partnership | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Number of facilities sold | item | 4 | ||||||
Second Spring Healthcare Investment | Vantage Point Partnership | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Number of facilities sold | facility | 14 | ||||||
Vantage Point Capital, LLC [Member] | |||||||
Acquisitions, Lease Amendments and Terminations | |||||||
Payment for investment in joint venture | $ 85,300 | ||||||
Variable Interest Entity [Abstract] | |||||||
Investment in unconsolidated joint venture | 8,500 | ||||||
Loans and Leases Receivable, Related Parties | 76,800 | ||||||
Payment for investment in joint venture | $ 85,300 |
Significant Transactions and _3
Significant Transactions and Events - Divestiture of Non-Strategic Facilities (Details) $ in Thousands | Jun. 01, 2019USD ($)facilityitem | May 01, 2019facility | Jan. 31, 2019facility | Nov. 01, 2016item | Sep. 30, 2019USD ($)facility | Jun. 30, 2019USD ($)facility | Mar. 31, 2019USD ($)facility | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)facility | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Skilled Nursing Facility Divestitures | |||||||||||
Write-off of operating lease ROU assets | $ 54,400 | ||||||||||
Write-off of operating lease liabilities | $ 33,300 | ||||||||||
Gain on partial lease termination | $ (3,463) | $ (3,463) | |||||||||
Number Of Facilities Sold | 64 | 8 | |||||||||
Other Nonoperating Income (Expense) | $ 131,811 | $ 20,207 | $ 172,141 | $ 42,360 | |||||||
Gain (loss) recognized in disposal group | $ (700) | (700) | |||||||||
Increase in Operating lease obligations | $ (66,631) | ||||||||||
Skilled Nursing Facilities | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number Of Facilities Sold | facility | 3 | ||||||||||
Number of facilities presented as assets held for sale | facility | 8 | 8 | |||||||||
Divestiture | Skilled Nursing Facilities | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Annual rent credit granted on termination | $ 1,900 | ||||||||||
Annual revenues | 75,600 | ||||||||||
Pre-tax net income (loss) | 4,600 | ||||||||||
Gain (loss) recognized in disposal group | $ 1,900 | ||||||||||
Divestiture of real property and operations | Skilled Nursing Facilities | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities divested or closed | facility | 11 | ||||||||||
California | Skilled Nursing Facilities | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number Of Facilities Sold | facility | 7 | ||||||||||
California | Divestiture of real property and operations | Skilled Nursing Facilities | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities divested or closed | facility | 1 | 5 | |||||||||
Annual revenues | $ 53,000 | ||||||||||
Pre-tax net income (loss) | $ 100 | 1,600 | |||||||||
Gain (loss) recognized in disposal group | 1,000 | 25,000 | |||||||||
Sales price | 11,500 | 56,500 | $ 11,500 | ||||||||
Repayments of loans | 9,600 | 41,800 | |||||||||
Prepayment penalties and other closing costs at extinguishment | $ 2,400 | ||||||||||
California | Lease termination | Behavioral Health Center | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities divested or closed | facility | 1 | ||||||||||
Annual revenues | $ 3,100 | ||||||||||
Pre-tax net income (loss) | 300 | ||||||||||
Gain (loss) recognized in disposal group | $ 100 | ||||||||||
California | Assets held for sale. | Skilled Nursing Facilities | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Sales price | $ 88,800 | $ 88,800 | |||||||||
Massachusetts Utah and Idaho | Divestiture of real property and operations | Skilled Nursing Facilities | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities divested or closed | facility | 3 | ||||||||||
Texas | Assets held for sale. | Skilled Nursing Facilities | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Sales price | $ 20,100 | ||||||||||
New Jersey And Ohio | Divestiture | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Annual revenues | $ 90,200 | ||||||||||
Pre-tax net income (loss) | 6,000 | ||||||||||
Gain (loss) recognized in disposal group | 3,300 | ||||||||||
Ohio | Divestiture | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Annual revenues | 7,700 | ||||||||||
Pre-tax net income (loss) | 1,600 | ||||||||||
Gain (loss) recognized in disposal group | $ 200 | ||||||||||
Ohio | Divestiture | Skilled Nursing Facilities | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities divested or closed | facility | 1 | ||||||||||
Ohio | Divestiture of real property and operations | Skilled Nursing Facilities | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities divested or closed | facility | 9 | ||||||||||
Welltower Master Lease | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of skilled nursing facilities leased to third party operator | facility | 4 | ||||||||||
Number of facilities terminated from master lease agreement | facility | 2 | 24 | |||||||||
Annual rent credit granted on termination | $ 600 | $ 23,400 | |||||||||
Write-off of finance lease ROU assets | $ 102,000 | 5,100 | |||||||||
Write-off of finance lease liabilities | 74,400 | 5,600 | |||||||||
Gain on partial lease termination | $ 27,600 | $ 500 | $ 20,300 | ||||||||
Number Of Facilities Sold | facility | 15 | ||||||||||
Welltower Master Lease | Disposal Group Not Discontinued Operations Divestiture And Lease Termination | Skilled Nursing Facilities | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Write-off of finance lease ROU assets | $ 61,500 | ||||||||||
Write-off of finance lease liabilities | 130,200 | ||||||||||
Write-off of operating lease ROU assets | 159,800 | ||||||||||
Write-off of operating lease liabilities | $ 111,300 | ||||||||||
Welltower Master Lease | Connecticut | Divestiture of operations | Skilled Nursing Facilities | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities divested or closed | facility | 2 | ||||||||||
Annual revenues | $ 24,700 | ||||||||||
Pre-tax net income (loss) | 2,900 | ||||||||||
Gain (loss) recognized in disposal group | $ 1,100 | ||||||||||
Welltower Master Lease | New Jersey And Ohio | Divestiture | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities divested or closed | facility | 9 | ||||||||||
Omega | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities terminated from master lease agreement | facility | 3 | ||||||||||
Annual rent credit granted on termination | $ 1,900 | ||||||||||
Write-off of finance lease ROU assets | 10,100 | ||||||||||
Write-off of finance lease liabilities | 16,800 | ||||||||||
Write-off of operating lease ROU assets | 164,600 | ||||||||||
Write-off of operating lease liabilities | 181,300 | ||||||||||
Gain on partial lease termination | $ 23,400 | ||||||||||
Omega | Divestiture of real property and operations | Skilled Nursing Facilities | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities divested or closed | facility | 4 | ||||||||||
Number of facilities closed | facility | 3 | ||||||||||
Second Spring Master Lease | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities terminated from master lease agreement | facility | 14 | ||||||||||
Annual rent credit granted on termination | $ 28,400 | ||||||||||
Write-off of finance lease ROU assets | 5,900 | ||||||||||
Write-off of finance lease liabilities | 8,800 | ||||||||||
Write-off of operating lease ROU assets | 202,700 | ||||||||||
Write-off of operating lease liabilities | 205,400 | ||||||||||
Gain on partial lease termination | $ 26,900 | ||||||||||
Next master lease agreement | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities terminated from master lease agreement | facility | 6 | ||||||||||
Next master lease agreement | Lease termination | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Write-off of operating lease ROU assets | $ 4,900 | ||||||||||
Gain on partial lease termination | 4,900 | ||||||||||
Welltower | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Annual rent credit granted on termination | $ 1,900 | ||||||||||
Number Of Facilities Sold | facility | 15 | ||||||||||
Welltower | Welltower Master Lease | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities under master lease agreement reclassified from finance leases to operating leases | facility | 49 | ||||||||||
Skilled Nursing Facility | Divestiture | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities divested or closed | facility | 3 | ||||||||||
Skilled Nursing Facility | Maryland | Divestiture of real property and operations | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities divested or closed | facility | 1 | ||||||||||
Skilled Nursing Facility | California | Divestiture of real property and operations | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities divested or closed | facility | 5 | ||||||||||
Annual revenues | $ 10,400 | ||||||||||
Skilled Nursing Facility | New Jersey | Divestiture of real property and operations | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities divested or closed | facility | 2 | ||||||||||
Skilled Nursing Facility | Omega | New Mexico | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities acquired | facility | 1 | ||||||||||
Number of beds in facilities | item | 80 | ||||||||||
Annual net revenue from acquired operations | $ 3,400 | ||||||||||
Skilled Nursing Facility | Next master lease agreement | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number Of Facilities Sold | facility | 19 | ||||||||||
Increase in operating ROU assets | $ 77,200 | ||||||||||
Assisted Or Senior Living Facility | California | Divestiture of real property and operations | |||||||||||
Skilled Nursing Facility Divestitures | |||||||||||
Number of facilities divested or closed | facility | 1 |
Net Revenues and Accounts Rec_2
Net Revenues and Accounts Receivable - Adoption of ASC 606 (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net Revenues and Accounts Receivable | ||||
Operating expenses | $ 339,441 | $ 371,064 | $ 1,014,507 | $ 1,125,779 |
Contract liabilities | $ 0 | $ 0 | ||
Practical expedient | ||||
Election of practical expedient regarding financing component | true |
Net Revenues and Accounts Rec_3
Net Revenues and Accounts Receivable - Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of revenue | ||||
Net revenues | $ 3,790,703 | |||
Net revenues | $ 1,123,705 | |||
Total net revenues | 1,123,705 | $ 1,217,271 | $ 3,430,397 | 3,790,703 |
Revenue not accounted for under Topic 606 | 23,100 | 24,000 | ||
Inpatient Services | ||||
Disaggregation of revenue | ||||
Net revenues | 3,265,608 | |||
Total net revenues | 966,011 | 1,054,668 | 2,963,001 | 3,265,608 |
Rehabilitation therapy service | ||||
Disaggregation of revenue | ||||
Net revenues | 116,300 | 132,164 | 358,075 | 421,782 |
Total net revenues | 132,164 | 358,075 | ||
Other Services | ||||
Disaggregation of revenue | ||||
Net revenues | 41,394 | 30,439 | 109,321 | 103,313 |
Total net revenues | 30,439 | 109,321 | ||
Medicare | ||||
Disaggregation of revenue | ||||
Net revenues | 210,136 | 239,138 | 664,855 | 769,063 |
Medicare | Inpatient Services | ||||
Disaggregation of revenue | ||||
Net revenues | 187,493 | 216,382 | 596,468 | 700,202 |
Medicare | Rehabilitation therapy service | ||||
Disaggregation of revenue | ||||
Net revenues | 22,643 | 22,756 | 68,387 | 68,861 |
Medicaid | ||||
Disaggregation of revenue | ||||
Net revenues | 572,660 | 614,084 | 1,731,835 | 1,856,290 |
Medicaid | Inpatient Services | ||||
Disaggregation of revenue | ||||
Net revenues | 572,100 | 613,539 | 1,730,147 | 1,854,706 |
Medicaid | Rehabilitation therapy service | ||||
Disaggregation of revenue | ||||
Net revenues | 560 | 545 | 1,688 | 1,584 |
Insurance | ||||
Disaggregation of revenue | ||||
Net revenues | 116,982 | 130,472 | 367,831 | 418,909 |
Insurance | Inpatient Services | ||||
Disaggregation of revenue | ||||
Net revenues | 111,529 | 125,060 | 351,228 | 400,889 |
Insurance | Rehabilitation therapy service | ||||
Disaggregation of revenue | ||||
Net revenues | 5,453 | 5,412 | 16,603 | 18,020 |
Private | ||||
Disaggregation of revenue | ||||
Net revenues | 233,769 | 259,278 | ||
Net revenues | 77,506 | 85,287 | ||
Private | Inpatient Services | ||||
Disaggregation of revenue | ||||
Net revenues | 77,440 | 85,148 | 233,499 | 258,887 |
Private | Rehabilitation therapy service | ||||
Disaggregation of revenue | ||||
Net revenues | 66 | 139 | 270 | 391 |
Assisted living | Inpatient Services | ||||
Disaggregation of revenue | ||||
Revenue not accounted for under Topic 606 | 70,400 | 71,200 | ||
Third party providers | ||||
Disaggregation of revenue | ||||
Net revenues | 102,336 | 117,846 | 321,068 | 382,515 |
Third party providers | Rehabilitation therapy service | ||||
Disaggregation of revenue | ||||
Net revenues | 85,051 | 99,851 | 262,689 | 319,015 |
Third party providers | Other Services | ||||
Disaggregation of revenue | ||||
Net revenues | 17,285 | 17,995 | 58,379 | 63,500 |
Other | ||||
Disaggregation of revenue | ||||
Net revenues | 44,085 | 30,444 | 111,039 | 104,648 |
Other | Inpatient Services | ||||
Disaggregation of revenue | ||||
Net revenues | 17,449 | 14,539 | 51,659 | 50,924 |
Other | Rehabilitation therapy service | ||||
Disaggregation of revenue | ||||
Net revenues | 2,527 | 3,461 | 8,438 | 13,911 |
Other | Other Services | ||||
Disaggregation of revenue | ||||
Net revenues | $ 24,109 | $ 12,444 | $ 50,942 | $ 39,813 |
Earnings (Loss) Per Share - Gen
Earnings (Loss) Per Share - General Information (Details) | 9 Months Ended |
Sep. 30, 2019class | |
Income Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Number of classes of common stock | 3 |
Class C Common Stock | |
Income Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Voting ratio | 1 |
Number of classes of stock that share voting ratio | 2 |
Earnings (Loss) Per Share - Cal
Earnings (Loss) Per Share - Calculation of Basic net income (loss) per common share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||||||
Net income (loss) | $ 58,898 | $ (8,983) | $ (25,082) | $ (91,901) | $ (62,857) | $ (108,673) | $ 24,833 | $ (263,431) |
Less net (income) loss attributable to noncontrolling interests | (12,801) | 33,773 | 1,182 | 97,153 | ||||
Net income (loss) attributable to Genesis Healthcare, Inc. | $ 46,097 | $ (58,128) | $ 26,015 | $ (166,278) | ||||
Denominator: | ||||||||
Weighted-average shares outstanding for basic net income (loss) per share | 109,123 | 102,489 | 106,581 | 100,461 | ||||
Basic net income (loss) per common share attributable to Genesis Healthcare, Inc. | $ 0.42 | $ (0.57) | $ 0.24 | $ (1.66) |
Earnings (Loss) Per Share - C_2
Earnings (Loss) Per Share - Calculation of diluted net income (loss) per common share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||||||
Net income (loss) | $ 58,898 | $ (8,983) | $ (25,082) | $ (91,901) | $ (62,857) | $ (108,673) | $ 24,833 | $ (263,431) |
Less: Net (income) loss attributable to noncontrolling interests | 12,801 | (33,773) | (1,182) | (97,153) | ||||
Net loss attributable to Genesis Healthcare, Inc | 46,097 | (58,128) | 26,015 | (166,278) | ||||
Plus: Assumed conversion of noncontrolling interests | 20,179 | 8,060 | ||||||
Net loss attributable to Genesis Healthcare, Inc | $ 66,276 | $ (58,128) | $ 34,075 | $ (166,278) | ||||
Denominator: | ||||||||
Weighted-average common shares outstanding | 109,123 | 102,489 | 106,581 | 100,461 | ||||
Plus: Assumed conversion of noncontrolling interests | 56,605 | 57,313 | ||||||
Plus: Unvested restricted stock units and stock warrants | 274 | 689 | ||||||
Adjusted weighted-average common shares outstanding, diluted | 166,002 | 102,489 | 164,583 | 100,461 | ||||
Diluted net income (loss) per common share attributable to Genesis Healthcare, Inc. | $ 0.40 | $ (0.57) | $ 0.21 | $ (1.66) |
Earnings (Loss) Per Share - Ant
Earnings (Loss) Per Share - Antidilutive Securities (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of units attributed to the noncontrolling interests outstanding | 56.5 | ||
Assumed conversion of noncontrolling interests, unvested restricted stock units and stock warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive shares | 60.6 | 61.5 |
Segment Information - Segment R
Segment Information - Segment Reporting (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | |
Segment Reporting Information | ||||||||
Number of Reportable Segments | segment | 3 | |||||||
Net revenues | $ 3,790,703 | |||||||
Net revenues | $ 1,123,705 | $ 1,217,271 | $ 3,430,397 | 3,790,703 | ||||
Increase (Decrease) in Net Revenue From Prior Period | (93,566) | (360,306) | ||||||
Salaries, wages and benefits | 620,493 | 680,604 | 1,889,062 | 2,122,128 | ||||
Other operating expenses | 339,441 | 371,064 | 1,014,507 | 1,125,779 | ||||
General and administrative costs | 35,930 | 35,482 | 107,024 | 114,404 | ||||
Lease expense | 100,018 | 288,665 | ||||||
Lease expense under Topic 840 | 32,366 | 97,548 | ||||||
Depreciation and amortization expense | 34,932 | 53,038 | 101,395 | 168,036 | ||||
Interest expense | 37,099 | 115,695 | 141,590 | 348,687 | ||||
Loss on early extinguishment of debt | 2,460 | 2,436 | 9,785 | |||||
Investment income | (2,071) | (2,178) | (6,078) | (4,856) | ||||
Other income | (131,811) | (20,207) | (172,141) | (42,360) | ||||
Transaction costs | 12,941 | 11,361 | 23,025 | 26,567 | ||||
Long-lived asset impairments | 16,037 | 32,390 | 16,937 | 88,008 | ||||
Goodwill and identifiable intangible asset impairments | 929 | 2,061 | ||||||
Equity in net (income) loss of unconsolidated affiliates | (93) | (152) | (178) | 106 | ||||
Income (loss) before income tax benefit | 58,329 | (93,121) | 24,153 | (265,190) | ||||
Income tax benefit | (569) | (1,220) | (680) | (1,759) | ||||
Net income (loss) | $ 58,898 | $ (8,983) | $ (25,082) | $ (91,901) | $ (62,857) | $ (108,673) | $ 24,833 | $ (263,431) |
Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (7.70%) | (9.50%) | ||||||
Inpatient Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 3,265,608 | |||||||
Net revenues | $ 966,011 | $ 1,054,668 | $ 2,963,001 | $ 3,265,608 | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ (88,657) | $ (302,607) | ||||||
Inpatient Services | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 86.00% | 86.70% | 86.30% | 86.20% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (8.40%) | (9.30%) | ||||||
Inpatient Services | Skilled Nursing Facilities | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 941,722 | $ 1,029,453 | $ 2,888,659 | $ 3,190,065 | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ (87,731) | $ (301,406) | ||||||
Inpatient Services | Skilled Nursing Facilities | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 83.80% | 84.60% | 84.10% | 84.20% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (8.50%) | (9.40%) | ||||||
Inpatient Services | Assisted Senior Living Facilities | ||||||||
Segment Reporting Information | ||||||||
Revenues outside scope of ASC 606 | $ 23,057 | $ 23,974 | $ 70,408 | $ 71,220 | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ (917) | $ (812) | ||||||
Inpatient Services | Assisted Senior Living Facilities | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 2.10% | 2.00% | 2.10% | 1.90% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (3.80%) | (1.10%) | ||||||
Inpatient Services | Administration of third party facilities | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 1,980 | $ 2,025 | $ 6,281 | $ 6,577 | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ (45) | $ (296) | ||||||
Inpatient Services | Administration of third party facilities | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 0.20% | 0.20% | 0.20% | 0.20% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (2.20%) | (4.50%) | ||||||
Rehabilitation therapy service | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 116,300 | $ 132,164 | $ 358,075 | $ 421,782 | ||||
Net revenues | $ 132,164 | 358,075 | ||||||
Increase (Decrease) in Net Revenue From Prior Period | $ (15,864) | $ (63,707) | ||||||
Rehabilitation therapy service | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 10.40% | 10.80% | 10.50% | 11.10% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (12.00%) | (15.10%) | ||||||
Rehabilitation therapy service | Therapy Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 183,898 | $ 214,421 | $ 571,875 | $ 685,672 | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ (30,523) | $ (113,797) | ||||||
Rehabilitation therapy service | Therapy Services | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 16.40% | 17.60% | 16.70% | 18.10% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (14.20%) | (16.60%) | ||||||
Other Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 41,394 | $ 30,439 | $ 109,321 | $ 103,313 | ||||
Net revenues | $ 30,439 | 109,321 | ||||||
Increase (Decrease) in Net Revenue From Prior Period | $ 10,955 | $ 6,008 | ||||||
Other Services | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 3.60% | 2.50% | 3.20% | 2.70% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 36.00% | 5.80% | ||||||
Other Services | Other Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 55,532 | $ 38,526 | $ 143,139 | $ 124,300 | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ 17,006 | $ 18,839 | ||||||
Other Services | Other Services | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 4.90% | 3.20% | 4.20% | 3.30% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 44.10% | 15.20% | ||||||
Operating Segments | Inpatient Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 966,759 | $ 1,055,452 | $ 2,965,348 | $ 3,267,862 | ||||
Salaries, wages and benefits | 437,508 | 480,345 | 1,336,298 | 1,477,153 | ||||
Other operating expenses | 394,115 | 428,398 | 1,185,684 | 1,323,423 | ||||
Lease expense | 98,987 | 285,510 | ||||||
Lease expense under Topic 840 | 31,732 | 95,660 | ||||||
Depreciation and amortization expense | 29,263 | 46,472 | 83,463 | 147,552 | ||||
Interest expense | 12,363 | 91,106 | 68,454 | 277,753 | ||||
Other income | (131,811) | (20,207) | (172,126) | (42,438) | ||||
Long-lived asset impairments | 16,037 | 32,390 | 16,937 | 88,008 | ||||
Goodwill and identifiable intangible asset impairments | 929 | 2,061 | ||||||
Income (loss) before income tax benefit | 110,297 | (35,713) | 161,128 | (101,310) | ||||
Net income (loss) | 110,297 | (35,713) | 161,128 | (101,310) | ||||
Operating Segments | Rehabilitation therapy service | ||||||||
Segment Reporting Information | ||||||||
Net revenues | 183,898 | 214,421 | 571,875 | 685,672 | ||||
Salaries, wages and benefits | 152,793 | 175,098 | 464,740 | 562,875 | ||||
Other operating expenses | 11,779 | 12,891 | 34,866 | 41,707 | ||||
Lease expense | 320 | 985 | ||||||
Depreciation and amortization expense | 2,934 | 3,147 | 9,210 | 9,479 | ||||
Interest expense | 14 | 14 | 41 | 41 | ||||
Other income | (76) | |||||||
Income (loss) before income tax benefit | 16,058 | 23,271 | 62,109 | 71,570 | ||||
Net income (loss) | 16,058 | 23,271 | 62,109 | 71,570 | ||||
Operating Segments | Other Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | 55,515 | 38,463 | 142,905 | 124,184 | ||||
Salaries, wages and benefits | 30,192 | 25,161 | 88,024 | 82,100 | ||||
Other operating expenses | 16,421 | 20,902 | 44,312 | 47,780 | ||||
Lease expense | 384 | 1,064 | ||||||
Lease expense under Topic 840 | 316 | 959 | ||||||
Depreciation and amortization expense | 176 | 172 | 524 | 509 | ||||
Interest expense | 9 | 9 | 26 | 27 | ||||
Other income | 61 | 78 | ||||||
Income (loss) before income tax benefit | 8,333 | (8,097) | 8,894 | (7,269) | ||||
Net income (loss) | 8,333 | (8,097) | 8,894 | (7,269) | ||||
Corporate, Non-Segment | ||||||||
Segment Reporting Information | ||||||||
Net revenues | 17 | 63 | 234 | 116 | ||||
General and administrative costs | 35,930 | 35,482 | 107,024 | 114,404 | ||||
Lease expense | 327 | 1,106 | ||||||
Lease expense under Topic 840 | 318 | 929 | ||||||
Depreciation and amortization expense | 2,559 | 3,247 | 8,198 | 10,496 | ||||
Interest expense | 24,713 | 24,566 | 73,069 | 70,866 | ||||
Loss on early extinguishment of debt | 2,460 | 2,436 | 9,785 | |||||
Investment income | (2,071) | (2,178) | (6,078) | (4,856) | ||||
Transaction costs | 12,941 | 11,361 | 23,025 | 26,567 | ||||
Equity in net (income) loss of unconsolidated affiliates | 2,932 | (523) | 4,318 | (1,029) | ||||
Income (loss) before income tax benefit | (79,774) | (72,210) | (212,864) | (227,046) | ||||
Income tax benefit | (569) | (1,220) | (680) | (1,759) | ||||
Net income (loss) | (79,205) | (70,990) | (212,184) | (225,287) | ||||
Elimination | ||||||||
Segment Reporting Information | ||||||||
Net revenues | (82,484) | (91,128) | (249,965) | (287,131) | ||||
Other operating expenses | (82,874) | (91,127) | (250,355) | (287,131) | ||||
Equity in net (income) loss of unconsolidated affiliates | (3,025) | 371 | (4,496) | 1,135 | ||||
Income (loss) before income tax benefit | 3,415 | (372) | 4,886 | (1,135) | ||||
Net income (loss) | 3,415 | (372) | 4,886 | (1,135) | ||||
Elimination | Inpatient Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | (748) | $ (784) | (2,347) | $ (2,254) | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ 36 | $ (93) | ||||||
Elimination | Inpatient Services | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | (0.10%) | (0.10%) | (0.10%) | (0.10%) | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (4.60%) | 4.10% | ||||||
Elimination | Rehabilitation therapy service | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ (67,598) | $ (82,257) | $ (213,800) | $ (263,890) | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ 14,659 | $ 50,090 | ||||||
Elimination | Rehabilitation therapy service | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | (6.00%) | (6.80%) | (6.20%) | (7.00%) | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (17.80%) | (19.00%) | ||||||
Elimination | Other Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ (14,138) | $ (8,087) | ||||||
Increase (Decrease) in Net Revenue From Prior Period | $ (6,051) | |||||||
Elimination | Other Services | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | (1.30%) | (0.70%) | ||||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 74.80% | |||||||
Elimination | Other Services | Other Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ (33,818) | $ (20,987) | ||||||
Increase (Decrease) in Net Revenue From Prior Period | $ (12,831) | |||||||
Elimination | Other Services | Other Services | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | (1.00%) | (0.60%) | ||||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 61.10% |
Segment Information - Assets an
Segment Information - Assets and Goodwill by Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | $ 4,674,147 | $ 4,263,623 |
Corporate and Eliminations | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 104,977 | 161,918 |
Inpatient Services | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 4,224,275 | 3,735,778 |
Rehabilitation therapy service | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 297,097 | 329,687 |
Other Services | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | $ 47,798 | $ 36,240 |
Segment Information - Segment G
Segment Information - Segment Goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Goodwill [Line Items] | ||
Goodwill | $ 437,112 | $ 437,112 |
Accumulated impairment losses | (351,470) | (351,470) |
Goodwill, net | 85,642 | 85,642 |
Inpatient Services | ||
Goodwill [Line Items] | ||
Goodwill | 351,470 | 351,470 |
Accumulated impairment losses | (351,470) | (351,470) |
Rehabilitation therapy service | ||
Goodwill [Line Items] | ||
Goodwill | 73,814 | 73,814 |
Goodwill, net | 73,814 | 73,814 |
Other Services | ||
Goodwill [Line Items] | ||
Goodwill | 11,828 | 11,828 |
Goodwill, net | $ 11,828 | $ 11,828 |
Property and Equipment - Tabula
Property and Equipment - Tabular Disclosure (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 1,374,655 | $ 3,864,356 |
Less accumulated depreciation | (417,437) | (976,802) |
Net property and equipment | 957,218 | 2,887,554 |
Land, Buildings and Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 990,977 | 469,575 |
Capital lease land, buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 693,546 | |
Financing obligation land, buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 2,274,211 | |
Equipment, furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 380,907 | 417,684 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 2,771 | $ 9,340 |
Property and Equipment - Lease
Property and Equipment - Lease updates (Details) $ in Thousands | Sep. 12, 2019USD ($) | Jan. 31, 2019USD ($) | Nov. 01, 2016item | Sep. 30, 2019USD ($)facility | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)facility | Sep. 30, 2018USD ($) | Jan. 01, 2019USD ($) |
Assets held for sale | |||||||||
Number of facilities sold | 64 | 8 | |||||||
Amount reclassified from property and equipment to assets held for sale | $ 36,900 | $ 36,900 | |||||||
Other Asset Impairment Charges | 16,037 | $ 32,390 | $ 16,937 | $ 88,008 | |||||
California Divestitures | |||||||||
Assets held for sale | |||||||||
Number of facilities sold | facility | 7 | ||||||||
Amount reclassified from property and equipment to assets held for sale | $ 16,300 | $ 16,300 | |||||||
ASU 2016-02 | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Property and equipment derecognized from PP&E due to adoption of Topic 842 | $ 1,700,000 | ||||||||
Skilled Nursing Facilities | |||||||||
Assets held for sale | |||||||||
Number of facilities presented as assets held for sale | facility | 8 | 8 | |||||||
Number of facilities sold | facility | 3 | ||||||||
Other Asset Impairment Charges | $ 9,800 | $ 10,700 | |||||||
Skilled Nursing Facilities | California Divestitures | |||||||||
Assets held for sale | |||||||||
Number of facilities sold | facility | 1 | ||||||||
Capital lease land, buildings and improvements | ASU 2016-02 | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Net finance lease reclassified to ROU assets | 600,000 | ||||||||
Improvements reclassified to Land, buildings and improvements | 12,700 | $ 12,700 | |||||||
Financing obligation land, buildings and improvements | ASU 2016-02 | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Property and equipment derecognized from PP&E due to adoption of Topic 842 | $ 1,700,000 | ||||||||
Improvements reclassified to Land, buildings and improvements | 73,600 | 73,600 | |||||||
Next Partnership | Land, Buildings and Improvements | |||||||||
Assets held for sale | |||||||||
Property, plant and equipment, net, increase due to consolidation | $ 173,500 | $ 173,500 | |||||||
Vantage Point Partnership | |||||||||
Assets held for sale | |||||||||
Amount reclassified from property and equipment to assets held for sale | 29,400 | $ 29,400 | |||||||
Vantage Point Partnership | Land, Buildings and Improvements | |||||||||
Assets held for sale | |||||||||
Property, plant and equipment, net, increase due to consolidation | $ 339,200 | $ 339,200 |
Leases - General Information (D
Leases - General Information (Details) | 9 Months Ended |
Sep. 30, 2019item | |
Lease disclosures | |
Percentage of centers that are leased properties | 78.00% |
Percentage of centers under master lease agreements | 44.00% |
Number of landlords with master lease agreements | 4 |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true |
Lessee, Finance Lease, Existence of Option to Extend [true false] | true |
Lessee, Operating Lease, Existence of Option to Terminate [true false] | true |
Lessee, Finance Lease, Existence of Option to Terminate [true false] | true |
Minimum | |
Lease disclosures | |
Term of operating lease | 10 years |
Term of finance lease | 10 years |
Operating lease renewal term (in years) | 5 years |
Finance lease renewal term (in years) | 5 years |
Maximum | |
Lease disclosures | |
Term of operating lease | 15 years |
Term of finance lease | 15 years |
Operating lease renewal term (in years) | 10 years |
Finance lease renewal term (in years) | 10 years |
Leases - Lease Transactions (De
Leases - Lease Transactions (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)facility | Jun. 30, 2019USD ($)facility | Mar. 31, 2019USD ($)facility | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | |
Lessee Lease Disclosures [Abstract] | |||||
Write-off of operating lease ROU assets | $ 54,400 | ||||
Write-off of operating lease liabilities | $ 33,300 | ||||
Gain on partial lease termination | $ (3,463) | $ (3,463) | |||
Minimum | |||||
Lessee Lease Disclosures [Abstract] | |||||
Term of operating lease | 10 years | ||||
Operating lease renewal term (in years) | 5 years | ||||
Maximum | |||||
Lessee Lease Disclosures [Abstract] | |||||
Term of operating lease | 15 years | ||||
Operating lease renewal term (in years) | 10 years | ||||
Next master lease agreement | |||||
Lessee Lease Disclosures [Abstract] | |||||
Number of facilities terminated from master lease agreement | facility | 6 | ||||
Next master lease agreement | Skilled Nursing Facility | |||||
Lessee Lease Disclosures [Abstract] | |||||
Operating lease renewal term (in years) | 5 years | ||||
Welltower Master Lease | |||||
Lessee Lease Disclosures [Abstract] | |||||
Number of facilities terminated from master lease agreement | facility | 2 | 24 | |||
Annual rent credit granted on termination | $ 600 | $ 23,400 | |||
Write-off of finance lease ROU assets | $ 102,000 | 5,100 | |||
Write-off of finance lease liabilities | 74,400 | 5,600 | |||
Gain on partial lease termination | $ 27,600 | $ 500 | 20,300 | ||
Welltower Master Lease | Disposal Group Not Discontinued Operations Divestiture And Lease Termination | Skilled Nursing Facilities | |||||
Lessee Lease Disclosures [Abstract] | |||||
Write-off of finance lease ROU assets | 61,500 | ||||
Write-off of finance lease liabilities | 130,200 | ||||
Write-off of operating lease ROU assets | 159,800 | ||||
Write-off of operating lease liabilities | $ 111,300 |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Maturity of operating lease obligations | |
2019 (excluding nine months ended September 30, 2019) | $ 94,983 |
2020 | 382,353 |
2021 | 385,990 |
2022 | 381,397 |
2023 | 380,751 |
Thereafter | 3,411,293 |
Total operating lease payments | 5,036,767 |
Less interest | (2,201,697) |
Total operating lease obligations | 2,835,070 |
Less current portion | (137,574) |
Long-term operating lease obligations | 2,697,496 |
Maturity of finance lease obligations | |
2019 (excluding six months ended June 30, 2019) | 1,888 |
2020 | 7,570 |
2021 | 7,379 |
2022 | 7,168 |
2023 | 6,927 |
Thereafter | 42,564 |
Total finance lease payments | 73,496 |
Less interest | (31,082) |
Total finance lease obligations | 42,414 |
Less current portion | (2,738) |
Long-term finance lease obligations | 39,676 |
Leases additional information | |
Portion of finance lease payments due related to options to extend lease terms | $ 37,200,000 |
Leases - Future Minimum Capital
Leases - Future Minimum Capital and Operating Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Capital lease future minimum payments under ASC 840 | |
2019 | $ 88,793 |
2020 | 89,397 |
2021 | 91,292 |
2022 | 93,281 |
2023 | 95,376 |
Thereafter | 3,325,042 |
Total future minimum lease payments | 3,783,181 |
Less amount representing interest | (2,813,068) |
Capital lease obligation | 970,113 |
Less current portion | (2,171) |
Finance lease obligations under Topic 840 | 967,942 |
Financing obligations under ASC 840 | |
2019 | 237,335 |
2020 | 242,052 |
2021 | 245,311 |
2022 | 242,214 |
2023 | 247,852 |
Thereafter | 6,661,624 |
Total future minimum lease payments | 7,876,388 |
Less amount representing interest | (5,141,448) |
Financing obligations | 2,734,940 |
Less current portion | (2,001) |
Long-term financing obligations | 2,732,939 |
Operating leases future minimum payments under ASC 840 | |
2019 | 110,755 |
2020 | 109,391 |
2021 | 106,031 |
2022 | 84,003 |
2023 | 76,701 |
Thereafter | 373,753 |
Total future minimum lease payments | 860,634 |
Current capital lease obligation | $ 2,171 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Components of lease cost | ||
Total lease cost | $ 122,728 | $ 403,441 |
Finance lease cost | ||
Total finance lease expense | 6,033 | 64,153 |
Operating Lease Expense [Member] | ||
Components of lease cost | ||
Operating lease cost | 100,018 | 288,665 |
Depreciation And Amortization Expense [Member] | ||
Finance lease cost | ||
Amortization of finance lease right-of-use assets | 1,734 | 15,222 |
Interest Expense [Member] | ||
Finance lease cost | ||
Interest on finance lease liabilities | 4,299 | 48,931 |
Other Operating Expense [Member] | ||
Components of lease cost | ||
Variable lease cost | 10,697 | 32,027 |
Short-term leases | $ 5,980 | $ 18,596 |
Leases - Quantitative Informati
Leases - Quantitative Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Lease Term and Discount Rate | ||
Weighted-average remaining lease term - operating leases | 13 years 4 months 24 days | 13 years 4 months 24 days |
Weighted-average remaining lease term - finance leases | 8 years 1 month 6 days | 8 years 1 month 6 days |
Weighted-average discount rate - operating leases | 9.60% | 9.60% |
Weighted-average discount rate - finance leases | 7.20% | 7.20% |
Other information | ||
Operating cash flows from operating leases | $ 98,521 | $ 270,449 |
Operating cash flows from finance leases | 4,835 | 45,286 |
Financing cash flows from finance leases | 702 | 1,973 |
Operating leases | 5,306 | 82,471 |
Finance leases | $ 688 | $ 688 |
Leases - Lease Covenants (Detai
Leases - Lease Covenants (Details) | 9 Months Ended |
Sep. 30, 2019agreementfacility | |
Lease Covenants | |
Number of leases with unmet financial covenants | agreement | 3 |
Number of facilities under leases with unmet financial covenants | facility | 5 |
Welltower - CBYW | |
Lease Covenants | |
Number of master lease agreements | agreement | 2 |
Number of facilities in the master lease agreement | facility | 28 |
Number of leases with unmet financial covenants | agreement | 1 |
Number of facilities under leases with unmet financial covenants | facility | 5 |
Long-Term Debt - General Inform
Long-Term Debt - General Information (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Long-term debt | ||
Total long-term debt | $ 1,542,697 | $ 1,205,464 |
Current installments of long-term debt | (121,745) | (122,531) |
Long-term debt | 1,420,952 | 1,082,933 |
ABL Credit Facilities | ||
Long-term debt | ||
Total long-term debt | 384,866 | 419,289 |
Debt issuance costs | 9,295 | 11,335 |
Term Loan | ||
Long-term debt | ||
Total long-term debt | 193,380 | 184,652 |
Debt issuance costs | 1,226 | 1,851 |
Debt premium | 5,473 | 8,446 |
Real estate loans | ||
Long-term debt | ||
Total long-term debt | 266,003 | 307,690 |
Debt issuance costs | 4,224 | 5,360 |
Debt premium | 21,744 | 28,992 |
HUD insured loans | ||
Long-term debt | ||
Total long-term debt | 117,699 | 181,762 |
Debt issuance costs | 2,936 | 5,247 |
Debt premium | 0 | 860 |
HUD insured loans | Skilled Nursing Facilities | ||
Long-term debt | ||
Debt premium | 2,800 | |
Welltower Notes | ||
Long-term debt | ||
Total long-term debt | 78,157 | 81,398 |
Mortgages and other secured debt (recourse) | ||
Long-term debt | ||
Total long-term debt | 5,450 | 4,190 |
Mortgages and other secured debt (non-recourse) | ||
Long-term debt | ||
Total long-term debt | 497,142 | 26,483 |
Debt issuance costs | 7,890 | 187 |
Debt premium | 1,447 | $ 1,520 |
Assets held for sale. | HUD insured loans | Skilled Nursing Facilities | ||
Long-term debt | ||
Total long-term debt | $ 46,300 |
Long-Term Debt - New Asset Base
Long-Term Debt - New Asset Based Lending Facilities (Details) $ in Thousands | Jun. 05, 2019USD ($) | Mar. 06, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||||
Payment of first lien term loan facility | $ 3,518,465 | $ 2,959,875 | |||
Revolving credit facility borrowings | $ 394,160 | ||||
Weighted Average Interest Rate | 8.47% | ||||
Total borrowing base capacity | $ 555,000 | ||||
ABL Credit Facilities | |||||
Debt Instrument [Line Items] | |||||
Number of days prior to maturity of various loan agreements that the maturity of the credit facilities may be accelerated | 90 days | ||||
Restricted Cash and Cash Equivalents | $ 50,400 | ||||
Term Loan And Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Termination fees, if loan repaid within next twelve months | 2 | ||||
Termination fees, if loan repaid after year one and before year two | 1 | ||||
Termination fees, if loan repaid after year two | 0.5 | ||||
First Lien Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument exit fees amount | $ 1,600 | ||||
Revolving credit facility borrowings | $ 285,000 | ||||
Weighted Average Interest Rate | 8.09% | ||||
Total borrowing base capacity | $ 285,000 | ||||
First Lien Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument exit fees amount | 1,000 | ||||
Revolving credit facility (Non-HUD) | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility borrowings | $ 49,630 | ||||
Weighted Average Interest Rate | 8.09% | ||||
Total borrowing base capacity | $ 168,000 | ||||
HUD Tranche | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility borrowings | $ 29,530 | ||||
Weighted Average Interest Rate | 8.09% | ||||
Total borrowing base capacity | $ 72,000 | ||||
Delayed Draw Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Commitment fee rate (as percentage) | 2.00% | ||||
Revolving credit facility borrowings | $ 30,000 | ||||
Weighted Average Interest Rate | 13.09% | ||||
Total borrowing base capacity | $ 30,000 | ||||
Delayed Draw Term Loan Facility | Forecast | |||||
Debt Instrument [Line Items] | |||||
Promissory note | $ 20,000 | ||||
New Asset Based Lending Facilities | ABL Credit Facilities | |||||
Debt Instrument [Line Items] | |||||
Promissory note | $ 555,000 | ||||
Term of debt | 5 years | ||||
New Asset Based Lending Facilities | First Lien Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Promissory note | $ 325,000 | ||||
New Asset Based Lending Facilities | First Lien Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Promissory note | 200,000 | ||||
New Asset Based Lending Facilities | Delayed Draw Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Promissory note | $ 30,000 | ||||
New Asset Based Lending Facilities | 90-Day LIBOR | Term Loan And Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Floor rate (as a percent) | 0.50% | ||||
Applicable margin | 6.00% | ||||
New Asset Based Lending Facilities | 90-Day LIBOR | Delayed Draw Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Floor rate (as a percent) | 1.00% | ||||
Applicable margin | 11.00% | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Commitment fee rate (as percentage) | 0.50% | ||||
Revolving credit facility borrowings | $ 394,200 | ||||
Total borrowing base capacity | 406,500 | ||||
Available borrowing capacity under the ABL Credit Facilities | 12,300 | ||||
Revolving Credit Facility | Long Term Debt Current | ABL Credit Facilities | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility borrowings | $ 109,200 | ||||
Revolving Credit Facility Amendment | New Asset Based Lending Facilities | ABL Credit Facilities | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility borrowings | $ 240,000 | ||||
Revolving Credit Facility Amendment | New Asset Based Lending Facilities | First Lien Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Payment of first lien term loan facility | 40,000 | ||||
Revolving credit facility borrowings | 285,000 | ||||
Revolving Credit Facility Amendment | New Asset Based Lending Facilities | Revolving credit facility (Non-HUD) | |||||
Debt Instrument [Line Items] | |||||
Increase in aggregate revolving credit facility | $ 40,000 |
Long-Term Debt - Term Loan Agre
Long-Term Debt - Term Loan Agreement (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019USD ($)item | Dec. 31, 2020 | Dec. 31, 2018USD ($) | Mar. 06, 2018 | |
Term Loan Facility and New Term Loan Agreement | ||||
Debt, Weighted Average Interest Rate | 8.47% | |||
Term Loan | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Non-cash debt premium | $ 5,473 | $ 8,446 | ||
Term Loan | Term Loan Amendment | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Fixed interest rate | 14.00% | |||
Term Loan Amendment | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Additional Term Loan | 40,000 | |||
Term Loan Amendment | Term Loan Amendment | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Aggregate principal amount | 160,000 | |||
Fixed interest rate | 10.00% | |||
Term Loan Amendment | Minimum | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Paid-in-kind interest rate | 5.00% | |||
Term Loan Amendment | Maximum | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Paid-in-kind interest rate | 9.00% | |||
New Term Loan Facility [Member] | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Outstanding principal balance under term loan facility | $ 194,600 | |||
Number of maintenance covenants | item | 4 | |||
Non-cash debt premium | $ 5,500 | |||
New Term Loan Facility [Member] | Forecast | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Leverage ratio | 1.80% | |||
New Term Loan Facility [Member] | Maximum | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Leverage ratio | 1.70% | |||
Affiliate Of Welltower Inc And Affiliate Of Omega Healthcare Investors Inc | Term Loan | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Aggregate principal amount | $ 120,000 |
Long-Term Debt - Real Estate Lo
Long-Term Debt - Real Estate Loans (Details) $ in Thousands | Jun. 30, 2019USD ($) | May 01, 2019USD ($)facility | Nov. 08, 2018USD ($)loan | Apr. 01, 2018USD ($) | Sep. 30, 2019USD ($)facility | Sep. 30, 2019USD ($)facilityitem | Dec. 31, 2018USD ($) | Mar. 30, 2018USD ($)loan |
Long-term debt | ||||||||
Weighted Average Interest Rate | 8.47% | 8.47% | ||||||
Real estate loans | ||||||||
Long-term debt | ||||||||
Non-cash debt premium | $ 21,744 | $ 21,744 | $ 28,992 | |||||
Mid Cap Real Estate Loans | ||||||||
Long-term debt | ||||||||
Number of real estate loans | loan | 2 | |||||||
Aggregate principal amount | $ 75,000 | |||||||
Term of debt | 5 years | |||||||
Amount drawn on loan | $ 73,000 | |||||||
Number of facilities pledged | facility | 12 | |||||||
Repayments of Debt | $ 27,700 | 10,500 | ||||||
Aggregate principal balance | 34,300 | $ 34,300 | ||||||
Mid Cap Real Estate Loans | LIBOR | ||||||||
Long-term debt | ||||||||
Floor rate (as a percent) | 1.50% | |||||||
Applicable margin | 5.85% | |||||||
Mid Cap Real Estate Loan One [Member] | ||||||||
Long-term debt | ||||||||
Number of real estate loans | loan | 1 | |||||||
Additional borrowings | $ 10,000 | |||||||
Repayments of Debt | 1,600 | |||||||
Aggregate principal balance | 8,200 | $ 8,200 | ||||||
Mid Cap Real Estate Loan One [Member] | 30-day LIBOR | ||||||||
Long-term debt | ||||||||
Floor rate (as a percent) | 2.00% | |||||||
Applicable margin | 6.25% | |||||||
Welltower Real Estate Loans | ||||||||
Long-term debt | ||||||||
Number of facilities pledged | item | 5 | |||||||
Aggregate principal balance | 227,700 | $ 227,700 | ||||||
Non-cash debt premium | $ 21,700 | $ 21,700 | ||||||
Welltower Real Estate Loans | Welltower Real Estate Loan Amendments | ||||||||
Long-term debt | ||||||||
Term of debt | 10 years | |||||||
Fixed interest rate | 12.00% | 12.00% | ||||||
Cash interest rate | 7.00% | 7.00% | ||||||
Paid-in-kind interest rate | 5.00% | 5.00% | ||||||
Amount of increase to cash component of interest payments | $ 2,000 | |||||||
Repayment required for conversion option, condition | 105,000 | |||||||
Outstanding principal balance | $ 50,000 | $ 50,000 | ||||||
Welltower Real Estate Loans | Welltower Real Estate Loan Amendments | Minimum | ||||||||
Long-term debt | ||||||||
Amount that must be repaid by date certain to maintain the decreased cash pay interest rate | $ 105,000 | |||||||
Welltower Real Estate Loans | Welltower Real Estate Loan Amendments | Maximum | ||||||||
Long-term debt | ||||||||
Paid-in-kind interest rate | 2.00% | 2.00% | ||||||
Debt conversion option | $ 50,000 | |||||||
Skilled Nursing Facility | California | Divestiture of real property and operations | ||||||||
Long-term debt | ||||||||
Number of facilities divested or closed | facility | 5 | |||||||
Skilled Nursing Facility | California | Mid Cap Real Estate Loans | Divestiture of real property and operations | ||||||||
Long-term debt | ||||||||
Number of facilities divested or closed | facility | 3 | |||||||
Skilled Nursing Facility | New Jersey | Divestiture of real property and operations | ||||||||
Long-term debt | ||||||||
Number of facilities divested or closed | facility | 2 | |||||||
Skilled Nursing Facility | Maryland | Divestiture of real property and operations | ||||||||
Long-term debt | ||||||||
Number of facilities divested or closed | facility | 1 |
Long-Term Debt - HUD Insured Lo
Long-Term Debt - HUD Insured Loans (Details) $ in Thousands | May 01, 2019facility | Nov. 01, 2016item | Sep. 30, 2019USD ($)facility | Jun. 30, 2019facility | Sep. 30, 2019USD ($)facility | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Long-term debt | |||||||
Weighted Average Interest Rate | 8.47% | 8.47% | |||||
Debt instrument retired | $ | $ 133,913 | $ 462,063 | |||||
Number Of Facilities Sold | 64 | 8 | |||||
Skilled Nursing Facilities | |||||||
Long-term debt | |||||||
Number Of Facilities Sold | 3 | ||||||
Divestiture of real property and operations | Skilled Nursing Facilities | |||||||
Long-term debt | |||||||
Number of facilities divested or closed | 11 | ||||||
HUD insured loans | |||||||
Long-term debt | |||||||
Debt premium | $ | $ 0 | $ 0 | $ 860 | ||||
Debt instrument average remaining term (in years) | 29 years | ||||||
Weighted Average Interest Rate | 3.40% | 3.40% | |||||
Debt instrument period in which prepayment is not allowed (in months) | 12 months | ||||||
Prepayment penalty (as a percentage) | 10.00% | ||||||
Decrease in prepayment penalty (as a percentage) | 1.00% | ||||||
HUD insured loans | Minimum | |||||||
Long-term debt | |||||||
Term of debt | 30 years | ||||||
Fixed interest rate | 3.00% | 3.00% | |||||
HUD insured loans | Maximum | |||||||
Long-term debt | |||||||
Term of debt | 35 years | ||||||
Fixed interest rate | 4.20% | 4.20% | |||||
HUD insured loans | Skilled Nursing Facilities | |||||||
Long-term debt | |||||||
Number of debt instruments insured by HUD | 19 | ||||||
Principal balance outstanding | $ | $ 167,600 | $ 167,600 | |||||
Debt premium | $ | 2,800 | 2,800 | |||||
HUD insured loans | Prepaid Expenses and Other Current Assets | |||||||
Long-term debt | |||||||
Escrow reserve funds | $ | $ 15,600 | $ 15,600 | |||||
HUD insured loans | Assets held for sale. | Skilled Nursing Facilities | |||||||
Long-term debt | |||||||
Number Of Facilities Classified As Held For Sale | 4 | 4 | |||||
Net debt issuance costs, debt premiums and escrow reserve funds | $ | $ 4,600 | ||||||
California | Skilled Nursing Facilities | |||||||
Long-term debt | |||||||
Number Of Facilities Classified As Held For Sale | 7 | 7 | |||||
Number Of Facilities Sold | 7 | ||||||
California | Assets held for sale. | |||||||
Long-term debt | |||||||
Number Of Facilities Classified As Held For Sale | 8 | 8 | |||||
California | Divestiture of real property and operations | Skilled Nursing Facilities | |||||||
Long-term debt | |||||||
Number of facilities divested or closed | 1 | 5 | |||||
California | HUD insured loans | Divestiture of real property and operations | Skilled Nursing Facilities | |||||||
Long-term debt | |||||||
Number of facilities divested or closed | 3 | ||||||
Debt instrument retired | $ | $ 23,800 | ||||||
California | HUD insured loans | Divestiture of real property and operations | Assisted Senior Living Facilities | |||||||
Long-term debt | |||||||
Number of facilities divested or closed | 1 | ||||||
California | Skilled Nursing Facility | Divestiture of real property and operations | |||||||
Long-term debt | |||||||
Number of facilities divested or closed | 5 | ||||||
California | Assisted Or Senior Living Facility | Divestiture of real property and operations | |||||||
Long-term debt | |||||||
Number of facilities divested or closed | 1 | ||||||
New Jersey | HUD insured loans | Skilled Nursing Facilities | |||||||
Long-term debt | |||||||
Number of facilities divested or closed | 1 | ||||||
New Jersey | Skilled Nursing Facility | Divestiture of real property and operations | |||||||
Long-term debt | |||||||
Number of facilities divested or closed | 2 | ||||||
New Virgina Member | HUD insured loans | Skilled Nursing Facilities | |||||||
Long-term debt | |||||||
Number of facilities divested or closed | 1 | ||||||
New Jersey And Virginia Member | HUD insured loans | Skilled Nursing Facilities | |||||||
Long-term debt | |||||||
Debt instrument retired | $ | $ 18,400 |
Long-Term Debt - Notes Payable
Long-Term Debt - Notes Payable (Details) $ in Thousands | Jan. 17, 2018USD ($) | Dec. 23, 2016USD ($)item | Nov. 01, 2016USD ($)item | Sep. 30, 2019USD ($)facility | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) |
Long-term debt | ||||||
Number Of Facilities Sold | 64 | 8 | ||||
Loss on early extinguishment of debt | $ (2,460) | $ (2,436) | $ (9,785) | |||
Short-term notes payable | ||||||
Long-term debt | ||||||
Debt converted | $ 19,600 | |||||
Fixed interest rate | 5.75% | |||||
Note outstanding balance | 2,000 | 2,000 | ||||
Welltower Inc | ||||||
Long-term debt | ||||||
Number Of Facilities Sold | item | 28 | |||||
Welltower Notes | Welltower Inc | ||||||
Long-term debt | ||||||
Loan forgiven on conditions | 6,000 | |||||
Welltower note payable due October 30, 2020 | Welltower Inc | ||||||
Long-term debt | ||||||
Principal balance outstanding | 62,100 | 62,100 | ||||
Cash interest rate | 3.00% | |||||
Paid-in-kind interest rate | 7.00% | |||||
Aggregate principal amount | $ 51,200 | |||||
Note Payable Due December 15 2021 | ||||||
Long-term debt | ||||||
Principal balance outstanding | $ 14,100 | $ 14,100 | ||||
Cash interest rate | 3.00% | |||||
Paid-in-kind interest rate | 7.00% | |||||
Aggregate principal amount | $ 11,700 |
Long-Term Debt - Other (Details
Long-Term Debt - Other (Details) $ in Millions | 9 Months Ended | ||
Sep. 30, 2019USD ($)loan | Sep. 12, 2019USD ($) | Jan. 31, 2019USD ($) | |
Long-term debt | |||
Weighted Average Interest Rate | 8.47% | ||
Mortgages and other secured debt (recourse) | |||
Long-term debt | |||
Weighted Average Interest Rate | 1.60% | ||
Mortgages and other secured debt (non-recourse) | |||
Long-term debt | |||
Weighted Average Interest Rate | 7.20% | ||
Debt premium available to offset non-recourse loans | $ 1.5 | ||
Number of debt instruments with a debt premium | loan | 1 | ||
Next Partnership | |||
Long-term debt | |||
Non-recourse debt | $ 165.7 | ||
Next Partnership | Three-year term loan | |||
Long-term debt | |||
Term of debt | 3 years | ||
Non-recourse debt | $ 142.1 | ||
Next Partnership | 10-year mezzanine loan | |||
Long-term debt | |||
Term of debt | 10 years | ||
Non-recourse debt | $ 27 | ||
Vantage Point Partnership | |||
Long-term debt | |||
Non-recourse debt | $ 306.1 | ||
Vantage Point Partnership | Seven Year Term Loan Member | |||
Long-term debt | |||
Aggregate principal amount | $ 240.9 | ||
Term of debt | 7 years | ||
Proceeds from Short-term Debt | $ 233.6 | ||
Promissory note | 240.9 | ||
Vantage Point Partnership | Short-term notes payable | |||
Long-term debt | |||
Aggregate principal amount | 76.8 | ||
Promissory note | $ 76.8 |
Long-Term Debt - Debt Covenants
Long-Term Debt - Debt Covenants (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Twelve months ended December 31, | |
2020 | $ 121,779 |
2021 | 5,411 |
2022 | 623,764 |
2023 | 341,338 |
2024 | 12,999 |
Thereafter | 434,313 |
Total long-term debt | $ 1,539,604 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation | ||||
Effective tax rate | (1.00%) | 1.30% | 2.80% | (0.70%) |
Income tax benefit | $ (569) | $ (1,220) | $ (680) | $ (1,759) |
FC-GEN Operations Investment, LLC | ||||
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 65.90% | 65.90% |
Income Taxes - Exchange Rights
Income Taxes - Exchange Rights and Tax Receivable Agreement (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
FC-GEN Operations Investment, LLC | ||
Goodwill Tax Deductible Amount Tax Basis Step Up | $ 14.3 | $ 9.5 |
Tax receivable agreement, potential payment as percentage of cash savings | 90.00% | |
F C Gen Units And Class C Shares | ||
Number of membership units and Class C shares exchanged for Class A shares | 3,174,106 | 1,860,592 |
Class A Common Stock | ||
Number of Class A shares issued in exchange for membership units and Class C shares | 3,174,661 | 1,860,912 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | Sep. 15, 2019USD ($) | Jun. 01, 2018USD ($)facilityitem | Sep. 30, 2019USD ($)facility | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)facilityitem | Sep. 30, 2018USD ($) | Feb. 01, 2019USD ($) | Dec. 31, 2018USD ($) |
Related Party Transaction | ||||||||
Options to renew | true | |||||||
Lease cost | $ 122,728 | $ 403,441 | ||||||
Consulting Agreement Term | 1 year | |||||||
Related party administrative services fees | $ 600 | |||||||
Maximum | ||||||||
Related Party Transaction | ||||||||
Operating lease renewal term (in years) | 10 years | 10 years | ||||||
Rehabilitation Services | ||||||||
Related Party Transaction | ||||||||
Net revenue from related party | $ 30,600 | $ 96,200 | ||||||
Net accounts receivable from related party | $ 32,500 | $ 32,500 | $ 32,300 | |||||
Rehabilitation Services | ||||||||
Related Party Transaction | ||||||||
Net revenue from related party | 29,100 | 88,900 | ||||||
Reserves posted against note receivable | 55,000 | |||||||
Notes receivable from related party | 56,300 | 56,300 | ||||||
FC Compassus LLC | Disposed by sale | Hospice And Home Health Operations | ||||||||
Related Party Transaction | ||||||||
Principal amount of notes receivable | 12,000 | 12,000 | ||||||
Notes receivable from related party | 22,100 | 22,100 | ||||||
NSpire | ||||||||
Related Party Transaction | ||||||||
Net revenue from related party | 1,700 | 5,200 | ||||||
Net accounts receivable from related party | $ 1,700 | $ 1,700 | $ 1,100 | |||||
Number of facilities under lease and purchase option | facility | 5 | 5 | ||||||
Trident USA | Mobile Radiology And Laboratory Diagnostic Services [Member] | ||||||||
Related Party Transaction | ||||||||
Amount of services in period | $ 2,400 | $ 3,400 | $ 6,200 | $ 10,000 | ||||
Trident USA | Mobile Radiology And Laboratory Diagnostic Services [Member] | Maximum | ||||||||
Related Party Transaction | ||||||||
Aggregate ownership interest in counterparty indirectly held by certain board members, as a percent | 10.00% | |||||||
Next Landlord Entities | ||||||||
Related Party Transaction | ||||||||
Initial annualized lease rent paid | $ 13,000 | $ 19,500 | ||||||
Next Landlord Entities | Board of directors | ||||||||
Related Party Transaction | ||||||||
Ownership interest percentage | 4.00% | 4.00% | ||||||
Next Landlord Entities | New Hampshire And Florida [Member] | ||||||||
Related Party Transaction | ||||||||
Number of facilities under lease and purchase option | facility | 12 | |||||||
Number of LLCs affiliated with Next Healthcare | item | 12 | |||||||
Next Landlord Entities | Pennsylvania, New Jersey, Connecticut, Massachusetts and West Virginia | ||||||||
Related Party Transaction | ||||||||
Ownership interest percentage | 46.00% | 46.00% | ||||||
Number of facilities under lease and purchase option | facility | 15 | 15 | ||||||
Number of LLCs affiliated with Next Healthcare | item | 15 | |||||||
Welltower Inc | ||||||||
Related Party Transaction | ||||||||
Number of facilities under lease and purchase option | facility | 43 | 43 | ||||||
Shares of the Company’s | 8.90% | 8.90% | ||||||
Operating lease renewal term (in years) | 11 years | 11 years | ||||||
Options to renew | true | |||||||
Annual rent escalators | 2.00% | 2.00% | ||||||
Lease cost | $ 17,900 | $ 56,000 | ||||||
Welltower Inc | Class A Common Stock | ||||||||
Related Party Transaction | ||||||||
Voting power | 5.80% | 5.80% | ||||||
Board of directors | Disposed by sale | Hospice And Home Health Operations | ||||||||
Related Party Transaction | ||||||||
Aggregate ownership interest in counterparty indirectly held by certain board members, as a percent | 10.00% |
Other Income (Details)
Other Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Other (Income) Loss. | ||||
Gain on sale of owned assets | $ (63,645) | $ (90,992) | ||
Loss recognized for exit costs associated with divestiture of operations | 6,725 | $ 8,223 | 14,647 | $ 17,371 |
Gain on partial master lease termination | (74,891) | (95,796) | ||
Gain on lease terminations and amendments - unamortized straight-lining, favorable and unfavorable lease balances | (76) | (12,013) | ||
Gain on lease terminations and amendments - unamortized financing lease and capital lease obligations | (31,817) | (53,027) | ||
Loss on lease termination settlement | 3,463 | 3,463 | ||
Loss associated with lease extensions or newly leased operations, net | 1,846 | |||
Total other (income) loss | $ (131,811) | $ (20,207) | $ (172,141) | $ (42,360) |
Asset Impairment Charges (Detai
Asset Impairment Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Asset Impairment Charges | ||||
Reporting Unit, Name of Segment [Extensible List] | us-gaap:InpatientServicesMember | us-gaap:InpatientServicesMember | us-gaap:InpatientServicesMember | us-gaap:InpatientServicesMember |
Inpatient Services | ||||
Asset Impairment Charges | ||||
Impairment of Long-Lived Assets Held-for-use | $ 16 | $ 32.4 | $ 16.9 | $ 88 |
Assets Held for Sale (Details)
Assets Held for Sale (Details) $ in Thousands | Nov. 01, 2016item | Sep. 30, 2019USD ($)facility | Sep. 30, 2019USD ($)facility | Dec. 31, 2019facility | Dec. 31, 2018USD ($)facility |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of facilities sold | 64 | 8 | |||
Gain (loss) recognized in disposal group | $ | $ (700) | $ (700) | |||
Assets held for sale. | |||||
Assets and Liabilities of Disposal Group | |||||
Prepaid expenses | $ | 4,740 | 4,740 | $ 3,375 | ||
Property and equipment, net of accumulated depreciation of $16,723 and $3,640 at June 30, 2019 and December 31, 2018, respectively | $ | 32,517 | 32,517 | 16,087 | ||
Accumulated depreciation | $ | 5,840 | 5,840 | 3,640 | ||
Total Assets | $ | 37,257 | 37,257 | 19,462 | ||
Current installments of long-term debt | $ | 1,020 | 1,020 | 639 | ||
Long-term debt | $ | 45,314 | 45,314 | 25,942 | ||
Total Liabilities | $ | $ 46,334 | $ 46,334 | $ 26,581 | ||
Skilled Nursing Facilities | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of facilities sold | facility | 3 | ||||
Texas | Assets held for sale. | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of facilities classified as held for sale | facility | 7 | ||||
Texas | Skilled Nursing Facilities | Assets held for sale. | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of facilities classified as held for sale | facility | 7 | ||||
Sales consideration amount | $ | $ 20,100 | ||||
Texas | Skilled Nursing Facilities | Assets held for sale. | Forecast | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of facilities sold | facility | 7 | ||||
Texas | Skilled Nursing Facilities | Assets held for sale. | Welltower Real Estate Loans | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of facilities classified as held for sale | facility | 4 | ||||
Texas | Skilled Nursing Facilities | Assets held for sale. | HUD insured loans | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of facilities classified as held for sale | facility | 3 | ||||
California | Assets held for sale. | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of facilities classified as held for sale | facility | 8 | 8 | |||
California | Skilled Nursing Facilities | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of facilities classified as held for sale | facility | 7 | 7 | |||
Number of facilities sold | facility | 7 | ||||
California | Skilled Nursing Facilities | Assets held for sale. | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Sales consideration amount | $ | $ 88,800 | $ 88,800 | |||
California | Assisted Or Senior Living Facility | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of facilities classified as held for sale | facility | 1 | 1 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Commitments and Contingencies | |||||
Workers' Compensation discount rate (as a percentage) | 1.80% | ||||
Potential effect of discounting on Workers Compensation reserve | $ 9.5 | $ 9.5 | $ 8.3 | ||
Provision for general and professional liability | 16.1 | $ 25 | 42.9 | $ 79.2 | |
Reserve for general and professional liability | 393.2 | 393.2 | 435.3 | ||
Provision for workers' compensation | 14 | $ 15 | 42.7 | $ 41.4 | |
Reserve for workers' compensation risks | 171 | 171 | 168.3 | ||
Health insurance reserve | $ 15 | $ 15 | $ 16.6 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Recurring measures (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets, Fair Value Disclosure [Abstract] | ||
Cash and cash equivalents | $ 34,837 | $ 20,865 |
Restricted cash and equivalents | 93,232 | 121,411 |
Restricted investments in marketable securities | 128,994 | 136,153 |
Assets, Fair Value Disclosure, Total | 257,063 | 278,429 |
Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash and cash equivalents | 34,837 | 20,865 |
Restricted cash and equivalents | 93,232 | 121,411 |
Restricted investments in marketable securities | 43,829 | 40,699 |
Assets, Fair Value Disclosure, Total | 171,898 | 182,975 |
Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Restricted investments in marketable securities | 85,165 | 95,454 |
Assets, Fair Value Disclosure, Total | $ 85,165 | $ 95,454 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Debt Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | $ 1,542,697 | $ 1,205,464 |
Asset based lending facilities | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 384,866 | 419,289 |
Term Loan | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 193,380 | 184,652 |
Real estate loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 266,003 | 307,690 |
HUD insured loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 117,699 | 181,762 |
Welltower Notes | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 78,157 | 81,398 |
Mortgages and other secured debt (recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 5,450 | 4,190 |
Mortgages and other secured debt (non-recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 497,142 | 26,483 |
Level 2 | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 1,542,697 | 1,204,652 |
Level 2 | Asset based lending facilities | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 384,866 | 419,289 |
Level 2 | Term Loan | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 193,380 | 184,652 |
Level 2 | Real estate loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 266,003 | 307,690 |
Level 2 | HUD insured loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 117,699 | 180,950 |
Level 2 | Welltower Notes | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 78,157 | 81,398 |
Level 2 | Mortgages and other secured debt (recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 5,450 | 4,190 |
Level 2 | Mortgages and other secured debt (non-recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | $ 497,142 | $ 26,483 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Nonrecurring measures (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Non-recurring Fair Value Measures | |||
Finance lease right-of-use assets, net | $ 37,685 | ||
Operating lease right-of-use assets | 2,416,914 | ||
Fair Value, Measurements, Nonrecurring [Member] | |||
Non-recurring Fair Value Measures | |||
Property and equipment, net | 957,218 | $ 2,887,554 | |
Finance lease right-of-use assets, net | 37,685 | ||
Operating lease right-of-use assets | 2,416,914 | ||
Operating lease right-of-use assets ,Impairment Charges | 6,241 | ||
Intangible assets | 90,079 | 119,082 | |
Goodwill | 85,642 | $ 85,642 | |
Property and equipment, Impairment charges | $ 10,696 | $ 88,008 | |
Intangible assets, Impairment Loss | $ 2,061 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Oct. 01, 2019USD ($)facilityitem | May 01, 2019facility | Nov. 01, 2016item | Sep. 30, 2019USD ($)facility | Jun. 30, 2019facility | Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($) |
Subsequent Event [Line Items] | |||||||
Number of facilities sold | 64 | 8 | |||||
Gain (loss) recognized in disposal group | $ (0.7) | $ (0.7) | |||||
Subsequent Events | |||||||
Subsequent Event [Line Items] | |||||||
Number of Operating Segments | item | 2 | ||||||
Omega | |||||||
Subsequent Event [Line Items] | |||||||
Annual rent credit granted on termination | 1.9 | ||||||
Divestiture | Skilled Nursing Facility | |||||||
Subsequent Event [Line Items] | |||||||
Number of facilities divested or closed | facility | 3 | ||||||
Divestiture | Ohio | |||||||
Subsequent Event [Line Items] | |||||||
Annual revenues | $ 7.7 | ||||||
Pre-tax net income (loss) | 1.6 | ||||||
Gain (loss) recognized in disposal group | $ 0.2 | ||||||
Divestiture of real property and operations | California | Skilled Nursing Facility | |||||||
Subsequent Event [Line Items] | |||||||
Number of facilities divested or closed | facility | 5 | ||||||
Annual revenues | $ 10.4 | ||||||
Divestiture of operations | California | Subsequent Events | Leased Skilled Nursing Facility | |||||||
Subsequent Event [Line Items] | |||||||
Number of facilities divested or closed | facility | 2 | ||||||
Annual revenues | $ 17.2 | ||||||
Pre-tax net income (loss) | $ 0.7 | ||||||
Mid Cap Real Estate Loans | Divestiture of real property and operations | California | Skilled Nursing Facility | |||||||
Subsequent Event [Line Items] | |||||||
Number of facilities divested or closed | facility | 3 |