Document and Entity Information
Document and Entity Information - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | May 26, 2020 | |
Document Information [Line Items] | ||
Entity Central Index Key | 0001351051 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
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 | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Listing, Par Value Per Share | $ 0.001 | |
Entity Common Stock, Shares Outstanding | 110,124,460 | |
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 | 55,409,742 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 23,502 | $ 12,097 |
Restricted cash and equivalents | 47,285 | 63,101 |
Restricted investments in marketable securities | 31,855 | 31,855 |
Accounts receivable | 553,520 | 567,636 |
Prepaid expenses | 73,774 | 108,908 |
Other current assets | 43,845 | 44,079 |
Assets held for sale | 1,171 | |
Total current assets | 773,781 | 828,847 |
Property and equipment, net of accumulated depreciation of $415,948 and $431,361 at March 31, 2020 and December 31, 2019, respectively | 853,793 | 962,105 |
Finance lease right-of-use assets, net of accumulated amortization of $24,436 and $23,401 at March 31, 2020 and December 31, 2019, respectively | 33,791 | 37,097 |
Operating lease right-of-use assets | 2,353,477 | 2,399,505 |
Restricted cash and equivalents | 50,766 | 50,608 |
Restricted investments in marketable securities | 99,266 | 105,087 |
Other long-term assets | 109,400 | 85,725 |
Deferred income taxes | 4,391 | 3,772 |
Identifiable intangible assets, net of accumulated amortization of $77,553 and $76,243 at March 31, 2020 and December 31, 2019, respectively | 86,136 | 87,446 |
Goodwill | 85,642 | 85,642 |
Assets held for sale | 38,538 | 16,306 |
Total assets | 4,488,981 | 4,662,140 |
Current liabilities: | ||
Current installments of long-term debt | 106,088 | 162,426 |
Current installments of finance lease obligations | 2,926 | 2,839 |
Current installments of operating lease obligations | 142,191 | 140,887 |
Accounts payable | 195,356 | 238,384 |
Accrued expenses | 226,692 | 226,092 |
Accrued compensation | 154,058 | 153,698 |
Self-insurance reserves | 149,655 | 146,476 |
Current portion of liabilities held for sale | 728 | 368 |
Total current liabilities | 977,694 | 1,071,170 |
Long-term liabilities: | ||
Long-term debt | 1,355,148 | 1,450,994 |
Finance lease obligations | 38,845 | 39,335 |
Operating lease obligations | 2,632,831 | 2,681,403 |
Deferred income taxes | 4,792 | 5,245 |
Self-insurance reserves | 412,189 | 406,864 |
Liabilities held for sale | 44,913 | 19,789 |
Other long-term liabilities | 64,704 | 69,905 |
Commitments and contingencies | ||
Stockholders’ deficit: | ||
Additional paid-in-capital | 247,876 | 248,594 |
Accumulated deficit | (976,788) | (1,010,296) |
Accumulated other comprehensive income | 1,243 | 602 |
Total stockholders’ deficit before noncontrolling interests | (727,504) | (760,935) |
Noncontrolling interests | (314,631) | (321,630) |
Total stockholders' deficit | (1,042,135) | (1,082,565) |
Total liabilities and stockholders’ deficit | 4,488,981 | 4,662,140 |
Class A Common Stock | ||
Stockholders’ deficit: | ||
Common stock | 108 | 108 |
Class B Common Stock | ||
Stockholders’ deficit: | ||
Common stock | 1 | 1 |
Class C Common Stock | ||
Stockholders’ deficit: | ||
Common stock | $ 56 | $ 56 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other assets: | ||
Accumulated depreciation on property and equipment | $ 415,948 | $ 431,361 |
Accumulated amortization on finance lease ROU asset | 24,436 | 23,401 |
Accumulated amortization on intangible assets | $ 77,553 | $ 76,243 |
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) | 108,163,948 | 107,888,854 |
Common stock, shares, outstanding (in shares) | 108,163,948 | 107,888,854 |
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) | 55,902,144 | 56,172,193 |
Common stock, shares, outstanding (in shares) | 55,902,144 | 56,172,193 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Net revenues | $ 1,092,250,000 | $ 1,161,640,000 |
Salaries, wages and benefits | 580,533,000 | 642,410,000 |
Other operating expenses | 340,481,000 | 342,538,000 |
General and administrative costs | 39,617,000 | 35,532,000 |
Lease expense | 98,020,000 | 94,061,000 |
Depreciation and amortization expense | 25,988,000 | 38,195,000 |
Interest expense | 36,240,000 | 51,516,000 |
(Gain) loss on early extinguishment of debt | 4,039,000 | |
Investment income | (1,156,000) | (1,864,000) |
Other income | (84,832,000) | (16,917,000) |
Transaction costs | 5,591,000 | 1,261,000 |
Long-lived asset impairments | 9,700,000 | |
Equity in net income of unconsolidated affiliates | 127,000 | (61,000) |
Income (loss) before income tax expense (benefit) | 37,902,000 | (25,031,000) |
Income tax expense (benefit) | (779,000) | 51,000 |
Net loss | 38,681,000 | (25,082,000) |
Less net (income) loss attributable to noncontrolling interests | (5,173,000) | 9,819,000 |
Net income (loss) attributable to Genesis Healthcare, Inc. | $ 33,508,000 | $ (15,263,000) |
Basic: | ||
Weighted-average shares outstanding for basic net income (loss) per share | 109,721 | 103,715 |
Basic net income (loss) per common share attributable to Genesis Healthcare, Inc. | $ 0.31 | $ (0.15) |
Diluted: | ||
Weighted-average shares outstanding for diluted net income (loss) per share | 167,414 | 103,715 |
Diluted net income (loss) per common share attributable to Genesis Healthcare, Inc. | $ 0.24 | $ (0.15) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Net loss | $ 38,681 | $ (25,082) |
Net unrealized gain (loss) on marketable securities, net of tax | 978 | 496 |
Comprehensive income (loss) | 39,659 | (24,586) |
Less: comprehensive loss attributable to noncontrolling interests | (5,510) | 9,720 |
Comprehensive income (loss) attributable to Genesis Healthcare, Inc. | $ 34,149 | $ (14,866) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) $ 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 Income | Stockholders' Deficit | Noncontrolling Interests | Total |
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 income (loss) | (15,263) | (15,263) | (9,819) | (25,082) | |||||
Net unrealized gain 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, 2019 | $ 108 | $ 1 | $ 56 | 248,594 | (1,010,296) | 602 | (760,935) | (321,630) | (1,082,565) |
Balance, beginning of period (in shares) at Dec. 31, 2019 | 107,889 | 744 | 56,172 | ||||||
Increase (decrease) in stockholders' deficit | |||||||||
Net income (loss) | 33,508 | 33,508 | 5,173 | 38,681 | |||||
Net unrealized gain on marketable securities, net of tax | 641 | 641 | 337 | 978 | |||||
Share-based compensation | 1,894 | 1,894 | 1,894 | ||||||
Issuance of common stock, shares | 5 | ||||||||
Conversion of common stock among classes | (2,612) | (2,612) | 2,612 | ||||||
Conversion of common stock among classes (in shares) | 270 | (270) | |||||||
Distributions to noncontrolling interests | (1,123) | (1,123) | |||||||
Balance, end of period at Mar. 31, 2020 | $ 108 | $ 1 | $ 56 | $ 247,876 | $ (976,788) | $ 1,243 | $ (727,504) | $ (314,631) | $ (1,042,135) |
Balance, end of period (in shares) at Mar. 31, 2020 | 108,164 | 744 | 55,902 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities | ||
Net income (loss) | $ 38,681 | $ (25,082) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Non-cash interest and leasing arrangements, net | 5,901 | 5,222 |
Other non-cash gain, net | (84,832) | (16,917) |
Share based compensation | 1,894 | 2,087 |
Depreciation and amortization expense | 25,988 | 38,195 |
Reduction in the carrying amount of operating lease right-of-use assets | 31,506 | 29,574 |
(Recovery) provision for losses on accounts receivable | 201 | (685) |
Equity in net income of unconsolidated affiliates | 127 | (61) |
Benefit for deferred taxes | (1,331) | (835) |
Gain on early extinguishment of debt | 1,328 | |
Long-lived asset impairments | 9,700 | |
Changes in assets and liabilities: | ||
Accounts receivable | 7,321 | 20,974 |
Accounts payable and other accrued expenses and other | 7,277 | (18,759) |
Operating lease obligations | (28,511) | (21,567) |
Net cash (used in) provided by operating activities | 15,250 | 12,146 |
Cash flows from investing activities: | ||
Capital expenditures | (21,278) | (23,529) |
Purchases of marketable securities | (12,359) | (14,700) |
Proceeds on maturity or sale of marketable securities | 19,416 | 8,257 |
Purchases of assets | (9,146) | (252,475) |
Sales of assets | 161,408 | 79,000 |
Restricted deposits | 749 | |
Investments in joint venture | (14,886) | |
Loan provided to joint venture | (9,000) | |
Other, net | 32 | 28 |
Net cash (used in) provided by investing activities | 114,936 | (203,419) |
Cash flows from financing activities: | ||
Borrowings under revolving credit facilities | 1,093,643 | 1,163,000 |
Repayments under revolving credit facilities | (1,143,692) | (1,194,676) |
Proceeds from issuance of long-term debt | 7,339 | 170,565 |
Repayment of long-term debt | (89,654) | (4,467) |
Repayment of finance lease obligations | (712) | (575) |
Debt issuance costs | (240) | (3,708) |
Contributions from noncontrolling interests | 18,500 | |
Distributions to noncontrolling interests and stockholders | (1,123) | (1,138) |
Net cash provided by financing activities | (134,439) | 147,501 |
Net (decrease) increase in cash, cash equivalents and restricted cash and equivalents | (4,253) | (43,772) |
Cash, cash equivalents and restricted cash and equivalents: | ||
Beginning of period | 125,806 | 142,276 |
End of period | 121,553 | 98,504 |
Supplemental cash flow information: | ||
Interest paid | 31,815 | 45,620 |
Net taxes paid | 1,430 | 1,081 |
Non-cash investing and financing activities: | ||
Finance lease obligations, net write-down due to lease activity | 309 | |
Finance lease obligations, net write-down due to lease activity under ASC 840 | (131,842) | |
Assets subject to finance lease obligations, net (gross-up) write-down due to lease activity | (310) | |
Assets subject to capital lease obligations, net (gross-up) write-down due to lease activity, under ASC 840 | 61,512 | |
Operating lease obligations, net gross-up due to lease activity | (18,757) | 2,408,557 |
Assets subject to operating leases, net (gross-up) due to lease activity | $ 14,320 | (2,264,702) |
Financing obligations, net write-down due to lease activity under ASC 840 | (2,734,940) | |
Assets subject to financing obligations, net write-down due to lease activity under ASC 840 | $ 1,718,507 |
General Information
General Information | 3 Months Ended |
Mar. 31, 2020 | |
General Information | |
General Information | (1) General Informatio Description of Business Genesis Healthcare, Inc. is a healthcare services holding 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 March 31, 2020, the Company provided inpatient services through 376 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 87% 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 10% 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. Reliance on SEC Relief from Filing Requirements The Company, relying on the Order of the U.S. Securities and Exchange Commission (the SEC) issued on March 25, 2020, delayed the filing of this Quarterly Report on Form 10-Q for the three months ended March 31, 2020 due to circumstances related to the 2019 novel coronavirus (COVID-19). In particular, the Company’s operations and corporate facilities are located throughout the United States with its corporate headquarters in Kennett Square, Pennsylvania. Various government-imposed restrictions in many of the areas in which the Company operates, including its corporate offices, have limited access to its corporate facilities which have, in turn, slowed the timely completion of the Company’s financial reporting process, including evaluating the various impacts of COVID-19 on its historical and projected financial statements, such as occupancy and expense forecasts. 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 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 whether the Company has the power to direct the activities that most significantly impact the VIE's economic performance and has the obligation to absorb losses of, or the right to receive benefits that could be potentially significant to the VIE. The 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, 2019 filed with the SEC on Form 10-K on March 16, 2020. 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 (May 27, 2020). 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 May 27, 2021. 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 (May 27, 2020). The Company’s results of operations continue to be negatively impacted by the persistent pressure of healthcare reforms enacted in recent years and more recently by the COVID-19 pandemic. 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 and with respect to COVID-19, it has access to certain grants and subsidy programs by federal and state governments. The Company expects to continue to pursue cost mitigation and other strategies in response to the operating environment and liquidity requirements. Although the Company is and projects to be in compliance with all of its material debt and lease covenants through May 27, 2021, the ongoing uncertainty related to the impact of healthcare reform initiatives, including private and public responses to COVID-19, 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 August 2018, the Financial Accounting Standards Board (the FASB) issued Accounting Standard Update (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 Company adopted the new standard on January 1, 2020. The adoption of ASU 2018-13 did not have a material impact on the Company’s consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements 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. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which serves to remove or amend certain requirements associated with the accounting for income taxes. The standard is effective for fiscal years beginning after December 15, 2020, including interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the effect, if any, that the standard will have on its consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), which provides practical expedients and exceptions for reference rate reform related activities that impact debt, leases, and other contracts. The guidance is optional and may be applied as reference rate activities occur. For a contract that meets the criteria, this ASU generally allows an entity to account for and present modifications as an event that does not require remeasurement at the modification date or reassessment of a previous accounting determination. The guidance was effective upon issuance and can be applied through December 31, 2022. The Company is currently evaluating the potential impact that this ASU will have on its consolidated financial statements and related disclosures. |
Certain Significant Risks and U
Certain Significant Risks and Uncertainties | 3 Months Ended |
Mar. 31, 2020 | |
Certain Significant Risks and Uncertainties | |
Certain Significant Risks and Uncertainties | (2) Certain Significant Risks and Uncertainties COVID-19 The COVID-19 pandemic has materially and adversely affected, and will continue to materially and adversely affect, the Company’s patients, staff and operations, which in turn has materially and adversely affected its revenues and expenses. The Company began to experience the negative impact of the COVID-19 pandemic beginning in late February 2020. The negative impact escalated quickly subsequent to March 31, 2020. For a more detailed discussion of the impact of COVID-19 on the Company’s operations, net revenues, operating expenses and liquidity, see Note 17 – “ Subsequent Events – COVID-19 .” 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 79% 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 months ended March 31, 2020 and 2019: Three months ended March 31, 2020 2019 Medicare 21 % 21 % Medicaid 58 % 58 % Insurance 12 % 12 % Private 7 % 7 % Other 2 % 2 % Total 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, public and private subsidy and grant programs related to COVID-19, 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 140 distinct customers, many being chain operators with more than one location. One of the Company’s customers, a related party, comprises $30.1 million, or approximately 36%, of the gross outstanding contract receivables in the rehabilitation services business at March 31, 2020. See Note 11 – “Related Party Transactions.” A future adverse event impacting this customer or several other 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, 2019, which was filed with the SEC on March 16, 2020, 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 and the effect of the COVID-19 pandemic may have an adverse impact on the Company’s ability to remain in compliance with its financial covenants through May 27, 2021. 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 and receive adequate compensatory grants and subsidies from governmental authorities relative to the COVID-19 pandemic. 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 | 3 Months Ended |
Mar. 31, 2020 | |
Significant Transactions and Events | |
Significant Transactions and Events | (3) Significant Transactions and Events Strategic Partnerships Vantage Point Partnership On January 10, 2020, Welltower, Inc. (Welltower) sold the real estate of one skilled nursing facility located in Massachusetts to the Vantage Point Partnership. The sale represents the final component of a transaction that occurred on September 12, 2019, whereby the Company acquired an approximately 30% membership interest in the real estate of 18 facilities previously leased from Welltower and Second Spring Healthcare Investments. As a result of the January 10, 2020 transaction, the Company will receive an annual rent credit of $0.7 million from Welltower and recorded a gain of $0.2 million as a result of the lease termination. The Vantage Point Partnership acquired this skilled nursing facility for a purchase price of $9.1 million. The consolidation of this additional skilled nursing facility primarily resulted in property and equipment of $9.1 million, non-recourse debt of $7.3 million with the balance of the purchase price settled primarily with proceeds held in escrow from the September 12, 2019 closing. The Company will continue to operate the facility under the master lease agreement with the Vantage Point Partnership along with the other 18 facilities. NewGen Partnership On February 1, 2020, the Company transitioned operational responsibility for 19 facilities in the states of California, Washington and Nevada to New Generation Health, LLC (NewGen). The Company sold the real estate and operations of six skilled nursing facilities and transferred the operations to 13 skilled nursing, behavioral health and assisted living facilities for $78.7 million. Net transaction proceeds were used by the Company to repay indebtedness, including prepayment penalties, of $33.7 million, fund its initial 50% equity contribution and working capital requirement of $14.9 million, and provide financing to the partnership of $9.0 million. The Company recorded a gain on sale of assets and transition of leased facilities of $58.8 million and loss on early extinguishment of debt of $1.0 million. Concurrently, the facilities have entered, or will enter upon regulatory approval, into management services agreements with NewGen for the day-to-day operations of the facilities. The Company will continue to provide administrative and back office services to the facilities pursuant to administrative support agreements, as well as therapy services pursuant to therapy services agreements. Subsequent to February 1, 2020, the Company has applied the equity method of accounting for its 50% interest in these operations. Divestiture of Non-Strategic Facilities On January 31, 2020, Omega Healthcare Investors, Inc. (Omega) sold the real estate of one skilled nursing facility located in Massachusetts. The Company leased the facility under a master lease agreement, but closed the facility on July 1, 2019. The sale resulted in a gain on the lease termination of $0.2 million and an annual rent credit of $0.4 million. On February 1, 2020, the Company sold two owned skilled nursing facilities in North Carolina and one owned skilled nursing facility in Maryland for $61.8 million. Proceeds were used to retire $29.1 million of U.S. Department of Housing and Urban Development (HUD) financed debt. The three facilities generated revenues of $38.7 million and pre-tax income of $0.5 million. The transactions resulted in a gain on sale of $24.5 million and loss on early extinguishment of debt of $2.6 million. On February 26, 2020, the Company completed the sale of one owned HUD-insured skilled nursing facility in California for $20.8 million. The facility had been classified as an asset held for sale as of December 31, 2019. Proceeds were used to retire $20.5 million of HUD financed debt. The facility generated revenues of $14.0 million and pre-tax loss of $0.1 million. See Note 14 – “ Assets Held for Sale .” The transactions resulted in a gain on sale of $3.0 million and loss on early extinguishment of debt of $0.4 million. On March 4, 2020, the Company divested the operations of one leased assisted/senior living facility in Montana. The lease termination resulted in an annual rent credit of $0.7 million. The facility generated revenues of $2.5 million and pre-tax income of $0.1 million. Gains and losses associated with transactions and divestitures are included in other income on the consolidated statements of operations. See Note 12 – “ Other Income .” |
Net Revenues and Accounts Recei
Net Revenues and Accounts Receivable | 3 Months Ended |
Mar. 31, 2020 | |
Net Revenues and Accounts Receivable | |
Net Revenues and Accounts Receivable | (4) Net Revenues and Accounts Receivable Revenue Streams Inpatient Services The Company generates revenues primarily by providing services to patients within its facilities. The Company uses interdisciplinary teams of experienced medical professionals to provide services prescribed by physicians. These teams include registered nurses, licensed practical nurses, certified nursing assistants and other professionals who provide individualized comprehensive nursing care. Many of the Company’s facilities are equipped to provide specialty care, such as on-site dialysis, ventilator care, cardiac and pulmonary management, as well as standard services, such as room and board, special nutritional programs, social services, recreational activities and related healthcare and other services. The Company assesses collectibility on all accounts prior to providing services. Rehabilitation Therapy Services The Company generates revenues by providing rehabilitation therapy services, including speech-language pathology, physical therapy, occupational therapy and respiratory therapy at its skilled nursing facilities and assisted/senior living facilities, as well as facilities of third-party skilled nursing operators and other outpatient settings. The majority of revenues generated by rehabilitation therapy services rendered are billed to contracted third party providers. Other Services The Company generates revenues by providing an array of other specialty medical services, including physician services, staffing services, and other healthcare related services. Disaggregation of Revenues The Company disaggregates revenue from contracts with customers by reportable operating segments and payor type. The Company notes that disaggregation of revenue into these categories achieves the disclosure objectives to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The payment terms and conditions within the Company's revenue-generating contracts vary by contract type and payor source. Payments are generally received within 30 to 60 days after billing. See Note 6 – “ Segment Information .” The composition of net revenues by payor type and operating segment for the three months ended March 31, 2020 and 2019 was as follows (in thousands): Three months ended March 31, 2020 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 197,036 $ 21,909 $ — $ 218,945 Medicaid 550,990 490 — 551,480 Insurance 112,271 5,455 — 117,726 Private 75,069 110 — 75,179 Third party providers — 73,106 18,617 91,723 Other 17,584 4,399 15,214 37,197 Total net revenues $ 952,950 $ 105,469 $ 33,831 $ 1,092,250 Three months ended March 31, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 207,968 $ 22,752 $ — $ 230,720 Medicaid 580,947 555 — 581,502 Insurance 125,080 5,234 — 130,314 Private 76,933 111 — 77,044 Third party providers — 89,529 20,607 110,136 Other 16,564 2,659 12,701 31,924 Total net revenues $ 1,007,492 $ 120,840 $ 33,308 $ 1,161,640 (1) Includes Assisted/Senior living revenue of $21.8 million and $23.6 million for the three months ended March 31, 2020 and 2019, 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
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2020 | |
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 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) attributable to Genesis Healthcare, Inc. plus the effect of any assumed conversions of noncontrolling interests 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 March 31, 2020 2019 Numerator: Net income (loss) $ 38,681 $ (25,082) Less: Net (income) loss attributable to noncontrolling interests (5,173) 9,819 Net income (loss) attributable to Genesis Healthcare, Inc. $ 33,508 $ (15,263) Denominator: Weighted-average shares outstanding for basic net income (loss) per share 109,721 103,715 Basic net income (loss) per common share attributable to Genesis Healthcare, Inc. $ 0.31 $ (0.15) 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 March 31, 2020 2019 Numerator: Net income (loss) $ 38,681 $ (25,082) Less: Net (income) loss attributable to noncontrolling interests (5,173) 9,819 Net income (loss) attributable to Genesis Healthcare, Inc. $ 33,508 $ (15,263) Plus: Assumed conversion of noncontrolling interests 6,268 — Net income (loss) available to common stockholders after assumed conversions $ 39,776 $ (15,263) Denominator: Weighted-average common shares outstanding 109,721 103,715 Plus: Assumed conversion of noncontrolling interests 56,023 — Plus: Unvested restricted stock units and stock warrants 1,670 — Adjusted weighted-average common shares outstanding, diluted 167,414 103,715 Diluted net income (loss) per common share attributable to Genesis Healthcare, Inc. $ 0.24 $ (0.15) As the Company was in a net loss position for the three months ended March 31, 2019, the computation of diluted net loss per common share for this period excludes the effects of 60.0 million anti-dilutive shares attributable to the assumed conversion of noncontrolling interests, unvested restricted stock units, and stock warrants. As of March 31, 2019, there were 56.6 million units attributable to the noncontrolling interests outstanding. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 2019 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage Revenues: Inpatient services: Skilled nursing facilities $ 929,873 85.1 % $ 982,396 84.6 % $ (52,523) (5.3) % Assisted/Senior living facilities 21,822 2.0 % 23,649 2.0 % (1,827) (7.7) % Administration of third party facilities 2,041 0.2 % 2,247 0.2 % (206) (9.2) % Elimination of administrative services (786) (0.1) % (800) — % 14 1.8 % Inpatient services, net 952,950 87.2 % 1,007,492 86.8 % (54,542) (5.4) % Rehabilitation therapy services: Total therapy services 164,796 15.1 % 195,071 16.8 % (30,275) (15.5) % Elimination of intersegment rehabilitation therapy services (59,327) (5.4) % (74,231) (6.4) % 14,904 20.1 % Third party rehabilitation therapy services, net 105,469 9.7 % 120,840 10.4 % (15,371) (12.7) % Other services: Total other services 54,823 5.0 % 42,118 3.6 % 12,705 30.2 % Elimination of intersegment other services (20,992) (1.9) % (8,810) (0.8) % (12,182) (138.3) % Third party other services, net 33,831 3.1 % 33,308 2.8 % 523 1.6 % Net revenues $ 1,092,250 100.0 % $ 1,161,640 100.0 % $ (69,390) (6.0) % A summary of the Company’s unaudited condensed consolidated statement of operations follows (in thousands): Three months ended March 31, 2020 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 953,736 $ 164,796 $ 54,039 $ 784 $ (81,105) $ 1,092,250 Salaries, wages and benefits 411,042 134,569 34,922 — — 580,533 Other operating expenses 395,526 8,502 17,683 — (81,230) 340,481 General and administrative costs — — — 39,617 — 39,617 Lease expense 96,982 312 427 299 — 98,020 Depreciation and amortization expense 21,634 1,686 198 2,489 (19) 25,988 Interest expense 13,566 14 10 23,830 (1,180) 36,240 Loss on early extinguishment of debt — — — 4,039 — 4,039 Investment income — — — (2,336) 1,180 (1,156) Other (income) loss (85,112) — 280 — — (84,832) Transaction costs — — — 5,591 — 5,591 Long-lived asset impairments 9,700 — — — — 9,700 Equity in net income of unconsolidated affiliates — — — 188 (61) 127 Income (loss) before income tax benefit 90,398 19,713 519 (72,933) 205 37,902 Income tax benefit — — — (779) — (779) Net income (loss) $ 90,398 $ 19,713 $ 519 $ (72,154) $ 205 $ 38,681 Three months ended March 31, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 1,008,292 $ 195,071 $ 42,065 $ 53 $ (83,841) $ 1,161,640 Salaries, wages and benefits 456,762 157,092 28,556 — — 642,410 Other operating expenses 401,932 10,957 13,489 — (83,840) 342,538 General and administrative costs — — — 35,532 — 35,532 Lease expense 92,966 330 342 423 — 94,061 Depreciation and amortization expense 31,872 3,164 174 2,985 — 38,195 Interest expense 27,040 14 9 24,453 — 51,516 Investment income — — — (1,864) — (1,864) Other income (16,841) (76) — — — (16,917) Transaction costs — — — 1,261 — 1,261 Equity in net (income) loss of unconsolidated affiliates — — — (524) 463 (61) Income (loss) before income tax expense 14,561 23,590 (505) (62,213) (464) (25,031) Income tax expense — — — 51 — 51 Net income (loss) $ 14,561 $ 23,590 $ (505) $ (62,264) $ (464) $ (25,082) The following table presents the segment assets as of March 31, 2020 compared to December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Inpatient services $ 4,076,856 $ 4,221,579 Rehabilitation therapy services 274,785 281,978 Other services 50,354 49,877 Corporate and eliminations 86,986 108,706 Total assets $ 4,488,981 $ 4,662,140 The following table presents segment goodwill as of March 31, 2020 compared to December 31, 2019 (in thousands): Rehabilitation Therapy Services Other Services Consolidated Balance at December 31, 2019 Goodwill $ 73,814 $ 11,828 $ 85,642 Accumulated impairment losses — — — $ 73,814 $ 11,828 $ 85,642 Balance at March 31, 2020 Goodwill 73,814 11,828 85,642 Accumulated impairment losses — — — $ 73,814 $ 11,828 $ 85,642 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property and Equipment | |
Property and Equipment | (7) Property and Equipment Property and equipment consisted of the following as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Land, buildings and improvements $ 895,787 $ 1,004,447 Equipment, furniture and fixtures 371,138 386,248 Construction in progress 2,816 2,771 Gross property and equipment 1,269,741 1,393,466 Less: accumulated depreciation (415,948) (431,361) Net property and equipment $ 853,793 $ 962,105 Net property and equipment included $540.9 million and $535.9 million at March 31, 2020 and December 31, 2019, respectively, associated with the Company's consolidated VIEs. During the three months ended March 31, 2020, the Company sold 10 skilled nursing facilities resulting in a reduction in net property and equipment of $75.0 million. During the three months ended March 31, 2020, the Company recorded long-lived asset impairment charges of $7.1 million. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020, the Company leased approximately 76% of its centers; 45% 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 right-of-use (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. As of March 31, 2020, the Company held fixed-price options to purchase 57 facilities, 23 of which are subject to third-party leases and 34 of which are subject to lease arrangements with the Company’s consolidated VIEs. 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. During the three months ended March 31, 2020, the Company recognized ROU asset impairments of $2.6 million. The maturity of total operating and finance lease obligations at March 31, 2020 is as follows (in thousands): Year ending December 31, Operating Leases Finance Leases (1) 2020 (excluding the three months ended March 31, 2020) $ 283,563 $ 5,780 2021 381,752 7,526 2022 379,771 7,323 2023 379,007 7,108 2024 384,735 6,893 Thereafter 3,021,964 35,930 Total lease payments 4,830,792 70,560 Less interest (2,055,770) (28,789) Total lease obligations 2,775,022 41,771 Less current portion (142,191) (2,926) Long-term lease obligations $ 2,632,831 $ 38,845 (1) Finance lease payments include $37.2 million related to options to extend lease terms that are reasonably certain of being exercised. The following table provides lease costs and income by line item on the consolidated statements of operations for the three months ended March 31, 2020 (in thousands): Three months ended Classification March 31, 2020 Operating lease cost Lease expense $ 98,020 Finance lease cost: Amortization of finance lease right-of-use assets Depreciation and amortization expense 1,016 Interest on finance lease obligations Interest expense 1,219 Total finance lease expense 2,235 Variable lease cost Other operating expenses 8,775 Short-term leases Other operating expenses 5,383 Sublease income Net revenues (975) Total $ 113,438 The following table provides remaining lease term and discount rates by lease classification as of the three months ended March 31, 2020: Lease Term and Discount Rate March 31, 2020 Weighted-average remaining lease term (years) Operating leases 12.3 Finance leases 9.9 Weighted-average discount rate Operating leases Finance leases The following table includes supplemental lease information for the three months ended March 31, 2020 (in thousands): Three months ended Other information March 31, 2020 Cash paid for amounts included in the measurement of lease obligations Operating cash flows from operating leases $ 94,288 Operating cash flows from finance leases 1,931 Financing cash flows from finance leases Right-of-use assets obtained in exchange for new lease obligations Operating leases 5,274 Finance leases 373 Lease Covenants The Company’s lease agreements generally contain covenant requirements 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, such as a minimum level of consolidated liquidity, a maximum consolidated net leverage ratio and a minimum consolidated fixed charge coverage. Certain of the Company’s leases include cross-default provisions with each other and certain material debt instruments. At March 31, 2020, the Company was in compliance with the financial covenants contained in its leases containing cross-default provisions, with the exception of one master lease agreement involving two of its facilities. However, on May 4, 2020, the Company received a waiver for these covenant breaches through July 1, 2021. At March 31, 2020, the Company did not meet certain financial covenants contained in one lease related to two 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 March 31, 2020 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, control costs and receive adequate compensatory grants and subsidies from governmental authorities relative to the COVID-19 pandemic. 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 | 3 Months Ended |
Mar. 31, 2020 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | (9) Long-Term Debt Long-term debt at March 31, 2020 and December 31, 2019 consisted of the following (in thousands): March 31, 2020 December 31, 2019 Asset based lending facilities, net of debt issuance costs of $7,935 and $8,615 at March 31, 2020 and December 31, 2019, respectively $ 362,977 $ 412,346 Term loan agreements, net of debt issuance costs of $943 and $1,084 and debt premium balance of $4,159 and $4,816 at March 31, 2020 and December 31, 2019, respectively 200,130 196,714 Real estate loans, net of debt issuance costs of $3,467 and $3,846 and debt premium balance of $16,912 and $19,328 at March 31, 2020 and December 31, 2019, respectively 230,669 265,700 HUD insured loans, net of debt issuance costs of $1,147 and $2,909 at March 31, 2020 and December 31, 2019, respectively 44,876 117,117 Notes payable 110,952 116,952 Mortgages and other secured debt (recourse) 6,375 6,369 Mortgages and other secured debt (non-recourse), net of debt issuance costs of $9,167 and $9,349 and debt premium balance of $1,398 and $1,422 at March 31, 2020 and December 31, 2019, respectively 505,257 498,222 1,461,236 1,613,420 Less: Current installments of long-term debt (106,088) (162,426) Long-term debt $ 1,355,148 $ 1,450,994 Asset Based Lending Facilities The Company maintains a $555.0 million asset based lending facility, as amended, comprised of (a) a $285.0 million first lien term loan facility, (b) a $240.0 million first lien revolving credit facility and (c) a $30.0 million delayed draw term loan facility (collectively, the ABL Credit Facilities) with affiliates of MidCap Financial Services, LLC (MidCap). The commitments under the delayed draw term loan facility were reduced to $27.5 million on March 31, 2020, and will be further reduced to $25.0 million on June 30, 2020, $22.5 million on September 30, 2020, and $20.0 million on December 31, 2020 and thereafter. The Company originally entered into the ABL Credit Facilities in March 2018. The ABL Credit Facilities have a stated maturity of March 6, 2023 and include a springing maturity clause that would accelerate the maturity date 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. The Company has presented the entire revolving credit facility borrowings balance of $85.9 million in current installments of long-term debt at March 31, 2020. Despite this classification, the Company expects that it will have the ability to borrow and repay on the revolving credit facility through its maturity. Cash proceeds of $50.8 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 in the consolidated balance sheets at March 31, 2020 and December 31, 2019. 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 two years and 1.5% 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 loan’s 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 March 31, 2020 (dollars in thousands): Weighted Average ABL Credit Facilities Commitment Borrowings Interest Term loan facility $ 285,000 $ 285,000 7.45 % Revolving credit facility (Non-HUD) 168,000 28,924 7.45 % Revolving credit facility (HUD) 72,000 29,488 7.45 % Delayed draw term loan facility 30,000 27,500 12.45 % $ 555,000 $ 370,912 7.82 % As of March 31, 2020, the Company had a total borrowing base capacity of $403.1 million with outstanding borrowings under the ABL Credit Facilities of $370.9 million, leaving the Company with approximately $32.2 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 matures on November 30, 2021. The original Term Loan for $120.0 million bears interest at a rate equal to 14.0% per annum, with up to 9.0% per annum to be paid in kind. The additional Term Loan for $40.0 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 Term Loans had an outstanding accreted principal balance of $196.9 million and $193.0 million at March 31, 2020 and December 31, 2019, respectively. 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 a maximum leverage ratio, a minimum interest coverage ratio and a minimum fixed charge coverage ratio, the most restrictive of which 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 MidCap Real Estate Loans The Company originally entered into two real estate loans with MidCap (MidCap Real Estate Loans) with combined available proceeds of $75.0 million during March 2018. The MidCap Real Estate Loans are secured by 9 skilled nursing facilities and mature on March 30, 2023, subject to acceleration of the maturity date in the event the ABL Credit Facilities are repaid in full and terminated. The loans are subject to principal payments and bear an annual interest rate equal to 30-day LIBOR (subject to a floor of 1.5%) plus an applicable margin of 5.85%, with the balance due at maturity. Proceeds from the MidCap Real Estate Loans were used to repay partially the Welltower Real Estate Loans (defined below). 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 2019, the Company divested the real property and operations of six facilities that were subject to the MidCap Real Estate Loans, using the sale proceeds to repay $39.8 million on the loans. During the first quarter of 2020, the Company divested the real property and operations of three facilities that were subject to the MidCap Real Estate Loans, using the sale proceeds to repay $14.1 million on the loans. The MidCap Real Estate Loans had an outstanding principal balance of $27.9 million and $42.2 million at March 31, 2020 and December 31, 2019, respectively. Additionally, two facilities that are subject to the MidCap Real Estate Loans were classified as held for sale as of March 31, 2020, resulting in the classification of $11.7 million in long term debt as held for sale. Welltower Real Estate Loans The Company is subject to two 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. The Welltower Real Estate Loans have 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 March 31, 2020, 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 March 31, 2020, the Welltower Real Estate Loans are unsecured. 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. During the first quarter of 2020, the Company divested the real property and operations of the remaining facility that was subject to the Welltower Real Estate Loans, using the sale proceeds to repay $9.0 million on the loans. The Welltower Real Estate Loans had an outstanding accreted principal balance of $218.0 million and $208.0 million at March 31, 2020 and December 31, 2019, respectively. HUD Insured Loans As of March 31, 2020, the Company had 10 owned skilled nursing facility loans insured by HUD. The HUD insured loans have an original amortization term of 30 to 35 years and an average remaining term of 28.7 years with fixed interest rates ranging from 3.0% to 3.5% and a weighted average interest rate of 3.3%. 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 March 31, 2020, the Company has total escrow reserve funds of $7.6 million with the loan servicer that are reported within prepaid expenses in the consolidated balance sheets. During the first quarter of 2020, the Company sold the real property and operations of six skilled nursing facilities that were subject to HUD financing, one of which was classified as held for sale at December 31, 2019. The sale proceeds were used to retire HUD insured loans totaling $59.3 million. The HUD insured loans for owned facilities had an aggregate principal balance of $80.8 million and $140.6 million at March 31, 2020 and December 31, 2019, respectively. Additionally, the HUD insured loans of four facilities with aggregate principal balances of $34.8 million were classified as held for sale at March 31, 2020. Notes Payable In November 2016, the Company issued a note totaling $51.2 million to Welltower, which accrues cash interest at 3.0% and paid-in-kind interest at 7.0%. Cash interest is paid and paid-in-kind interest accretes the principal amount semi-annually every May 1 and November 1. During 2019, the maturity date of the note was extended 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 had an outstanding accreted principal balance of $64.2 million and $64.2 million at March 31, 2020 and December 31, 2019, respectively. In December 2016, the Company issued a second note totaling $11.7 million to Welltower, which accrues cash interest at 3.0% and paid-in-kind interest at 7.0%. 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 had an outstanding accreted principal balance of $14.6 million and $14.6 million at March 31, 2020 and December 31, 2019, respectively. In October 2019, the Company converted $23.2 million of its trade payables into a note payable. The note requires monthly interest payments based on an annual interest rate of 3.5%. The balance of the note is due on the maturity date, September 30, 2022. In November 2019, the Company issued a short-term note payable for $15.0 million. During the first quarter of 2020, the Company paid $6.0 million on the note, such that the outstanding principal balance was $9.0 million at March 31, 2020. Subsequent to March 31, 2020, the Company paid an addition $3.0 million on the note. The balance of the note is due on September 30, 2020. 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 1.5% at March 31, 2020, and maturity dates ranging from 2020 to 2024. Mortgages and other secured debt (non-recourse). The Company’s consolidated joint ventures and VIEs are subject to various loans, as set forth below. These 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. Next Partnership Debt The Company holds a 46% ownership interest in a partnership with Next Healthcare (Next), a related party (the Next Partnership). The Company has concluded the Next Partnership, which includes 15 facilities, 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 consolidated financial statements. The Next Partnership is subject to a term loan agreement with an original principal balance of $142.1 million and maturity date of January 31, 2022. The term loan bears interest at LIBOR plus 3.50% and is subject to interest-only payments through January 31, 2021. Beginning in April 2021, principal payments calculated based on a 25-year amortization schedule, after giving effect to any prior refinancings or other repayments of the term loan, will be applied to the remaining term loan balance. As of March 31, 2020, the term loan had an outstanding principal balance of $103.3 million and was collateralized by 12 facilities. The Next Partnership is subject to a mezzanine loan with an original principal balance of $27.0 million and maturity date of February 1, 2029. The mezzanine loan bears interest at 11.50% and is subject to interest-only payments through January 2022, with payments including a principal component thereafter. As of March 31, 2020, the mezzanine loan had an outstanding principal balance of $27.0 million. The Next Partnership includes three facilities that are subject to HUD-insured loans that mature in January 2055. The loans bear interest at 3.15% and as of March 31, 2020, had an aggregate outstanding principal balance of $41.5 million. Vantage Point Partnership Debt The Company holds an approximately 30% ownership interest in a partnership with Vantage Point Capital, LLC (the Vantage Point Partnership). The Company has concluded the Vantage Point Partnership, which includes 19 facilities, 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 consolidated financial statements. The Vantage Point Partnership is subject to a term loan agreement with an aggregate original principal balance of $240.9 million and maturity date of September 12, 2026. The term loan bears interest at LIBOR (subject to a floor of 1.75%) plus 3.75% and is subject to interest-only payments through October 1, 2021. The interest-only period can be extended through October 1, 2022 upon satisfaction of certain conditions, such as the achievement of a specified debt service coverage ratio and ratio of adjusted net operating income to the outstanding term loan balance. Following the interest-only period, principal payments calculated based on a 25-year amortization schedule, after giving effect to any prior refinancings or other repayments of the term loan, will be applied to the remaining term loan balance. As of March 31, 2020, the term loan had an outstanding principal balance of $240.9 million and was collateralized by 19 facilities. The Vantage Point Partnership is subject to a promissory note in the amount of $76.8 million, the entire balance of which was outstanding at March 31, 2020. The promissory note bears interest at 14.0% and matures on September 12, 2028. Other Non-Recourse Debt The Company has other non-recourse loans consisting principally of revenue bonds and secured bank loans with maturities ranging from 2023 through 2034. The loans are secured by the underlying real and personal property of individual facilities and have fixed or variable rates of interest. At March 31, 2020, the loans had a weighted average interest rate of 4.5% and an aggregate outstanding principal balance of $23.5 million. 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 and minimum liquidity. The Credit Facilities include cross-default provisions with each other and certain material lease agreements. At March 31, 2020, 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, control costs and receive adequate compensatory grants and subsidies from governmental authorities relative to the COVID-19 pandemic. 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 $1,461.4 million, excluding debt issuance costs and other non-cash debt discounts and premiums, at March 31, 2020 is as follows (in thousands): Twelve months ended March 31, 2021 $ 106,080 2022 586,487 2023 337,843 2024 11,932 2025 9,587 Thereafter 409,497 Total debt maturity $ 1,461,426 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Taxes | |
Income Taxes | (10) Income Taxes The Company effectively owns 66.3% 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 66.3% ownership of FC-GEN. For the three months ended March 31, 2020, the Company recorded income tax benefit of $0.8 million, representing an effective tax rate of (2.1)%, compared to income tax expense of $0.1 million, representing an effective tax rate of (0.2)%, for the same period in 2019. The change in effective tax rate was caused by the net deferred tax benefit resulting from the Company’s disposition of real estate assets. 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 March 31, 2020, management 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 2020. The captive is expected to generate positive pre-tax income in future periods to off-set its deferred tax assets. The 2020 U.S. federal taxable loss can be carried back for a five year tax period and then can be carried forward indefinitely, as provided for under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The Company provides rehabilitation therapy services within the People’s Republic of China and Hong Kong. At March 31, 2020, 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. 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 0.3 million FC-GEN units and Class C shares in the three months ended March 31, 2020 equating to 0.3 million Class A shares. The exchanges during the three months ended March 31, 2020 resulted in a $1.5 million internal revenue code (IRC) Section 754 tax basis step-up in the tax deductible goodwill of FC-GEN. There were exchanges of 3.1 million FC-GEN units and Class C shares in the three months ended March 31, 2019 equating to 3.1 million Class A shares. The exchanges during the three months ended March 31, 2019 resulted in a $12.9 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 | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions | |
Related Party Transactions | (11) The Company provides rehabilitation services to certain facilities owned and operated by two customers in which certain members of the Company’s board of directors, board observer, and shareholders with greater than 5% of the Company’s Class A common stock beneficially own an ownership interest. In the case of one significant customer, these services resulted in net revenues of $25.8 million and $29.9 million in the three months ended March 31, 2020 and 2019, respectively, and total net accounts receivable balances of $30.1 million and $28.9 million at March 31, 2020 and December 31, 2019, respectively. Further, the Company holds a note receivable from this customer, which was derived from past due accounts receivable, in the amount of $56.3 million. The Company has reserved $55.0 million on the note receivable balance. The reserve represents the judgment of management and does not indicate a forgiveness of any amount 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. In the case of the other customer, services began in the third quarter of 2018. The Company recorded net revenues of $1.4 million and $1.8 million in the three months ended March 31, 2020 and 2019, respectively, resulting in net accounts receivable balances of $1.4 million at both March 31, 2020 and December 31, 2019. Certain subsidiaries of the Company are subject to a lease 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 was $13.0 million. The lease includes a purchase option that is exercisable in 2022. In addition, certain subsidiaries of the Company are subject to a lease of 15 centers 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 was $19.5 million. The lease includes a purchase option that is exercisable during 2024 through 2026. 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 paid from the Next Landlord Entities. As of March 31, 2020, Welltower held approximately 8.8% 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. Annual rent escalators under the master lease are 2.0%. During the three months ended March 31, 2020 and 2019, the Company paid rent of approximately $17.7 million and $20.1 million, respectively, to Welltower. The Company holds options to purchase certain facilities subject to the master lease. At March 31, 2020, the Company leased 42 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 .” |
Other Income
Other Income | 3 Months Ended |
Mar. 31, 2020 | |
Other Income | |
Other Income | (12) In the three months ended March 31, 2020 and 2019, 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 March 31, 2020 2019 Gain on sale of owned assets (1) $ (74,580) $ — Loss recognized for exit costs associated with divestiture of operations (2) 4,935 3,344 Gain on lease termination or modification (3) (15,187) (20,261) Total other income $ (84,832) $ (16,917) (1) The Company sold 10 owned skilled nursing facilities during the three months ended March 31, 2020. The gain represents sale proceeds in excess of the carrying value of the assets sold. There were no sales of owned assets in the three months ended March 31, 2019. (2) The Company divested operations of 24 facilities, including the 10 sold facilities noted above, and 10 facilities in the three months ended March 31, 2020 and 2019, respectively. Upon divestiture, the Company recognizes exit costs for uncollectible accounts receivable resulting from a sale, the write-off of inventory balances assumed by the new operator, and other costs associated with the transition of operations. (3) The Company amended numerous lease agreements in the three months ended March 31, 2020 and 2019. These transactions resulted in a combination of base rent reductions, annual escalator reductions, lease term extensions or reductions and facility terminations. Each lease amendment triggers a lease reassessment of the respective ROU asset and lease liability with an offsetting adjustment recorded to the consolidated statements of operations as other income or loss. In the three months ended March 31, 2020, the Company recognized a gain on the sale of the leasehold rights of 13 facilities of $10.7 million and a gain on lease termination of nine facilities of $4.5 million. In the three months ended March 31, 2019, the Company amended the Welltower Master Lease several times to reflect the lease termination of 24 facilities resulting in a gain of $20.3 million. |
Asset Impairment Charges
Asset Impairment Charges | 3 Months Ended |
Mar. 31, 2020 | |
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 months ended March 31, 2020, the Company recognized impairment charges in the inpatient segment of $9.7 million. No impairment charges were recognized in the three months ended March 31, 2019. |
Assets Held for Sale
Assets Held for Sale | 3 Months Ended |
Mar. 31, 2020 | |
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. At March 31, 2020, the Company classified six skilled nursing facilities operated by the Company in the states of California, Nevada, Maryland, New Jersey and Rhode Island as held for sale. The facilities did not meet the criteria as discontinued operations. The Company is party to purchase and sale agreements, as amended, to sell the facilities for an aggregate $78.6 million. Three of the six skilled nursing facilities were sold on April 1, 2020. See Note 17 – “ Subsequent Events .” At December 31, 2019, the Company classified one skilled nursing facility operated by the Company in the state of California as held for sale. The facility did not meet the criteria as a discontinued operation. The sale of the facility, which was subject to a HUD insured loan, was completed on February 26, 2020. See Note 3 – “Significant Transactions and Events – Divestiture of Non-Strategic Facilities.” The following table sets forth the major classes of assets and liabilities included as part of the disposal groups as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Current assets: Prepaid expenses $ — $ 1,171 Long-term assets: Property and equipment, net of accumulated depreciation of $9,014 and $2,201 at March 31, 2020 and December 31, 2019, respectively 38,538 16,306 Total assets $ 38,538 $ 17,477 Current liabilities: Current installments of long-term debt $ 728 $ 368 Long-term liabilities: Long-term debt 44,913 19,789 Total liabilities $ 45,641 $ 20,157 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
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. General and professional liability policies are typically written for a duration of 12 months or less 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. Excess insurance policies are typically written for a duration of 12 months or less and are measured on an “occurrence” basis. 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 provision for general and professional liability risks totaled $27.7 million and $21.4 million for the three months ended March 31, 2020 and 2019, respectively. The reserves for general and professional liability, which are recorded on an undiscounted basis, were $399.7 million and $392.8 million as of March 31, 2020 and December 31, 2019, respectively. The provision for workers’ compensation risks totaled $12.5 million and $15.2 million for the three months ended March 31, 2020 and 2019, respectively. The reserves for loss for workers’ compensation risks were $162.1 million and $160.5 million as of March 31, 2020 and December 31, 2019, respectively. These reserves are discounted based on actuarial estimates of claim payment patterns using a discount rate for the current policy year of 1.6%. 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 $9.4 million and $12.0 million as of March 31, 2020 and December 31, 2019, 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 $14.5 million and $15.1 million as of March 31, 2020 and December 31, 2019, 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. Lease Guarantees The Company transferred the operations to 13 skilled nursing, behavioral health and assisted living facilities to the NewGen Partnership on February 1, 2020. In conjunction with the transfer, the Company executed lease guaranty agreements on two of the facilities now leased by the NewGen Partnership. Under the guaranty agreements, the Company guarantees all payments and performance obligations of the tenants. As of March 31, 2020, the two leases have undiscounted cash rent obligations remaining of $29.4 million. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
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 measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019, 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 March 31, Identical Assets Observable Inputs Inputs Assets: 2020 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 23,502 $ 23,502 $ — $ — Restricted cash and equivalents 98,051 98,051 — — Restricted investments in marketable securities 131,121 41,360 89,761 — Total $ 252,674 $ 162,913 $ 89,761 $ — 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: 2019 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 12,097 $ 12,097 $ — $ — Restricted cash and equivalents 113,709 113,709 — — Restricted investments in marketable securities 136,942 45,903 91,039 — Total $ 262,748 $ 171,709 $ 91,039 $ — 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. Certain 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): March 31, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Asset based lending facilities $ 362,977 $ 362,977 $ 412,346 $ 412,346 Term loan agreements 200,130 200,130 196,714 196,714 Real estate loans 230,669 230,669 265,700 265,700 HUD insured loans 44,876 44,876 117,117 117,117 Notes payable 110,952 110,952 116,952 116,952 Mortgages and other secured debt (recourse) 6,375 6,375 6,369 6,369 Mortgages and other secured debt (non-recourse) 505,257 505,257 498,222 498,222 $ 1,461,236 $ 1,461,236 $ 1,613,420 $ 1,613,420 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 present the Company’s hierarchy for nonfinancial assets measured at fair value on a non-recurring basis (in thousands): Impairment Charges - Carrying Value Three months ended March 31, 2020 March 31, 2020 Assets: Property and equipment, net $ 853,793 $ 7,100 Finance lease right-of-use assets, net 33,791 2,600 Operating lease right-of-use assets 2,353,477 — Intangible assets, net 86,136 — Goodwill 85,642 — Impairment Charges - Carrying Value Three months ended December 31, 2019 March 31, 2019 Assets: Property and equipment, net $ 962,105 $ — Finance lease right-of-use assets, net 37,097 — Operating lease right-of-use assets 2,399,505 — Intangible assets, net 87,446 — 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 impact 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 | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events | |
Subsequent Events | (17) Subsequent Events COVID-19 On March 11, 2020, the World Health Organization (WHO) declared COVID-19 a pandemic. COVID-19 is a complex and previously unknown virus which disproportionately impacts older adults, particularly those having other underlying health conditions. According to the WHO, up to half of the COVID-19 related deaths in European countries were individuals residing in long-term care facilities, similar to the ones the Company operates in the United States. The Company’s primary focus as the effects of COVID-19 began to impact the United States was the health and safety of its patients, residents, employees and their respective families. The Company implemented various measures to provide the safest possible environment within its sites of service during this pandemic and will continue to do so. The United States broadly continues to experience the pandemic caused by COVID-19, which has significantly disrupted, and likely will continue to disrupt for some period, the nation’s economy, the healthcare industry and the Company’s businesses. The rapid spread of the virus has led to the implementation of various responses, including federal, state and local government-imposed quarantines, shelter-in-place mandates, sweeping restrictions on travel, and substantial changes to selected protocol within the healthcare system across the United States. A significant number of the Company’s facilities and operations are geographically located and highly concentrated in markets with close proximity to areas of the United States that have experienced widespread and severe COVID-19 outbreaks. COVID-19 has materially and adversely affected the Company’s operations and supply chains, resulting in a reduction in its occupancy and an increase in its expenditures. Although the ultimate impact of the pandemic remains uncertain, the following disclosures serve to outline the estimated impact of COVID-19 on its business through March 31, 2020, as well as further developments through the filing date of this Quarterly Report on Form 10-Q, including the impact of emergency legislation, temporary changes to regulations and reimbursement issued in response to COVID-19. Operations The Company’s first report of a positive case of COVID-19 in one of its facilities occurred on March 16, 2020. Since that time, 187 of the Company’s 361 facilities have experienced one or more positive cases of COVID-19 among patients and residents. Over 84% of the patient and resident positive COVID-19 cases have occurred in its facilities located in the states of New Jersey, Connecticut, Massachusetts, Pennsylvania and Maryland, which correspond to many of the largest community outbreak areas across the country. The Company’s facilities in these five states represent 43% of its total operating beds. Starting in late February 2020, the Company’s occupancy began to decrease following efforts by referring hospitals to cancel or reschedule elective procedures in anticipation of COVID-19 cases in their communities. Occupancy was further impacted by implementation of self-imposed admission bans in facilities having exposure to positive cases of COVID-19 among patients, residents and employees. These self-imposed restrictions on admissions were instituted to limit risks of potential spread of the virus by individuals that either tested positive for COVID-19, exhibited symptoms of COVID-19 but had not yet been tested positive due to a severe shortage of testing materials, or were asymptomatic of COVID-19 but potentially positive and contagious. Net Revenues The Company estimates that its net revenues for the three months ended March 31, 2020 were not materially impacted by COVID-19 because revenue lost from a decline in occupancy was offset by changes in payor mix and approximately $6 million of COVID-19 related Medicaid reimbursement relief provided by several states. The decline in occupancy continued through late May 2020, resulting in the Company’s skilled nursing facility operating occupancy decreasing from 88.2% for the three months ended March 31, 2020 to 81.9% for the month ended April 30, 2020. Operating occupancy for the month ended May 31, 2020 is projected to be approximately 76%. The impact of COVID-19 on the Company’s net revenue for the remainder of 2020 will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the scope and severity of COVID-19 and the actions taken by public and private entities in response to the pandemic. Operating Expenses Beginning in early March 2020, the Company began to incur increases in its costs as a result of the pandemic, with more dramatic increases occurring at facilities with positive COVID-19 cases among patients, residents and employees. During the three months ended March 31, 2020, the Company incurred approximately $7 million of incremental operating expense to prepare for and respond to the pandemic. Increases in cost primarily stemmed from elevated labor costs, including increased use of overtime and bonus pay, as well as a significant increase in both the cost and usage of personal protective equipment, medical equipment, food service supplies for staff, enhanced cleaning and environmental sanitation costs and the impact of utilizing less efficient modes of providing therapy in order to avoid the grouping of patients. Such costs have escalated following March 31, 2020, and the Company also expects such costs to include increased workers compensation expense, health plan expense and consulting costs. The Company estimates that its operating expenses for the month ended April 30, 2020 grew approximately $21 million due to the COVID-19 pandemic. The Company is not reasonably able to predict the total amount of costs it will incur related to the pandemic and to what extent such costs will be borne by or offset by actions taken by public and private entities in response to the pandemic. Liquidity The Company has taken, and will continue to take, actions to enhance and preserve its liquidity in response to the pandemic. Since March 31, 2020, the Company’s historical sources of liquidity have been supplemented by grants and advanced Medicare payments under programs expanded or created under the CARES Act. Specifically, in April 2020, the Company applied for and received $158 million of advanced Medicare payments and in April and May 2020 received approximately $180 million of relief grants. In addition, the Company has elected to implement the CARES Act payroll tax deferral program, which is expected to preserve on an interest free basis approximately $90 million of cash representing the employer portion of payroll taxes estimated to be incurred between March 27, 2020 and December 31, 2020. The advance Medicare payments, which are also interest free, will be repaid between August 2020 and November 2020, while one-half of the payroll tax deferral amount will become due on each of December 31, 2021 and December 31, 2022. In addition to relief funding under the CARES Act, funding has been committed by a number of states in which the Company operates, currently estimated at $27 million. The Company continues to seek opportunities to enhance and preserve its liquidity, including through reducing expenses, continuing to evaluate its capital structure and seeking further government-sponsored financial relief related to the pandemic. The Company cannot provide assurance that such efforts will be successful or adequate to offset the lost revenue and escalating operating expenses as a result of the pandemic. Divestiture of Non-Strategic Facilities On April 1, 2020, the Company sold two owned skilled nursing facilities in New Jersey and one owned skilled nursing facility in Maryland for $45.8 million. Proceeds were used to retire $15.2 million of HUD financed debt and $7.5 million of MidCap Real Estate Loans. The three facilities generated annual revenues of $35.8 million and pre-tax income was de minimis. The transactions resulted in a gain on sale of $21.8 million and loss on early extinguishment of debt of $1.4 million. All three skilled nursing facilities were classified as assets held for sale as of March 31, 2020. See Note 14 – “ Assets Held For Sale .” On April 1, 2020, the Company divested the operations and terminated the lease of two skilled nursing facilties in Montana. The two facilities generated annual revenues of $18.8 million and pre-tax income of $0.4 million. The lease termination resulted in an annual rent credit of $1.1 million. On April 20, 2020, the Company divested the operations of four skilled nursing facilities in Florida and two skilled nursing facilities in Maryland that were subject to a master lease with Second Spring Healthcare Investments. The six facilities generated annual revenues of $62.0 million and pre-tax loss of $2.3 million. The lease termination resulted in an annual rent credit of $8.5 million. On May 15, 2020, the Company transitioned operational responsibility for four additional leased facilities in the state of California to NewGen. The four facilities generated annual revenues of $55.0 million and pre-tax loss of $0.5 million. The Company is currently assessing the full impact these divestitures and lease amendments will have on its consolidated financial statements. |
General Information (Policies)
General Information (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Genesis Healthcare, Inc. is a healthcare services holding 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 March 31, 2020, the Company provided inpatient services through 376 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 87% 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 10% 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 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 whether the Company has the power to direct the activities that most significantly impact the VIE's economic performance and has the obligation to absorb losses of, or the right to receive benefits that could be potentially significant to the VIE. The 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, 2019 filed with the SEC on Form 10-K on March 16, 2020. |
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 (May 27, 2020). 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 May 27, 2021. 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 (May 27, 2020). The Company’s results of operations continue to be negatively impacted by the persistent pressure of healthcare reforms enacted in recent years and more recently by the COVID-19 pandemic. 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 and with respect to COVID-19, it has access to certain grants and subsidy programs by federal and state governments. The Company expects to continue to pursue cost mitigation and other strategies in response to the operating environment and liquidity requirements. Although the Company is and projects to be in compliance with all of its material debt and lease covenants through May 27, 2021, the ongoing uncertainty related to the impact of healthcare reform initiatives, including private and public responses to COVID-19, 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 August 2018, the Financial Accounting Standards Board (the FASB) issued Accounting Standard Update (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 Company adopted the new standard on January 1, 2020. The adoption of ASU 2018-13 did not have a material impact on the Company’s consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements 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. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which serves to remove or amend certain requirements associated with the accounting for income taxes. The standard is effective for fiscal years beginning after December 15, 2020, including interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the effect, if any, that the standard will have on its consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), which provides practical expedients and exceptions for reference rate reform related activities that impact debt, leases, and other contracts. The guidance is optional and may be applied as reference rate activities occur. For a contract that meets the criteria, this ASU generally allows an entity to account for and present modifications as an event that does not require remeasurement at the modification date or reassessment of a previous accounting determination. The guidance was effective upon issuance and can be applied through December 31, 2022. The Company is currently evaluating the potential impact that this ASU will have on its consolidated financial statements and related disclosures. |
Certain Significant Risks and_2
Certain Significant Risks and Uncertainties (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Certain Significant Risks and Uncertainties | |
Schedule of revenue by major source (in thousands) | Three months ended March 31, 2020 2019 Medicare 21 % 21 % Medicaid 58 % 58 % Insurance 12 % 12 % Private 7 % 7 % Other 2 % 2 % Total 100 % 100 % |
Net Revenues and Accounts Rec_2
Net Revenues and Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Net Revenues and Accounts Receivable | |
Schedule of revenues by revenue source | Three months ended March 31, 2020 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 197,036 $ 21,909 $ — $ 218,945 Medicaid 550,990 490 — 551,480 Insurance 112,271 5,455 — 117,726 Private 75,069 110 — 75,179 Third party providers — 73,106 18,617 91,723 Other 17,584 4,399 15,214 37,197 Total net revenues $ 952,950 $ 105,469 $ 33,831 $ 1,092,250 Three months ended March 31, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 207,968 $ 22,752 $ — $ 230,720 Medicaid 580,947 555 — 581,502 Insurance 125,080 5,234 — 130,314 Private 76,933 111 — 77,044 Third party providers — 89,529 20,607 110,136 Other 16,564 2,659 12,701 31,924 Total net revenues $ 1,007,492 $ 120,840 $ 33,308 $ 1,161,640 (1) Includes Assisted/Senior living revenue of $21.8 million and $23.6 million for the three months ended March 31, 2020 and 2019, 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) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings (Loss) Per Share | |
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 March 31, 2020 2019 Numerator: Net income (loss) $ 38,681 $ (25,082) Less: Net (income) loss attributable to noncontrolling interests (5,173) 9,819 Net income (loss) attributable to Genesis Healthcare, Inc. $ 33,508 $ (15,263) Denominator: Weighted-average shares outstanding for basic net income (loss) per share 109,721 103,715 Basic net income (loss) per common share attributable to Genesis Healthcare, Inc. $ 0.31 $ (0.15) 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 March 31, 2020 2019 Numerator: Net income (loss) $ 38,681 $ (25,082) Less: Net (income) loss attributable to noncontrolling interests (5,173) 9,819 Net income (loss) attributable to Genesis Healthcare, Inc. $ 33,508 $ (15,263) Plus: Assumed conversion of noncontrolling interests 6,268 — Net income (loss) available to common stockholders after assumed conversions $ 39,776 $ (15,263) Denominator: Weighted-average common shares outstanding 109,721 103,715 Plus: Assumed conversion of noncontrolling interests 56,023 — Plus: Unvested restricted stock units and stock warrants 1,670 — Adjusted weighted-average common shares outstanding, diluted 167,414 103,715 Diluted net income (loss) per common share attributable to Genesis Healthcare, Inc. $ 0.24 $ (0.15) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Information | |
Summary of segmented revenues | A summary of the Company’s segmented revenues follows (in thousands, except percentages): Three months ended March 31, 2020 2019 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage Revenues: Inpatient services: Skilled nursing facilities $ 929,873 85.1 % $ 982,396 84.6 % $ (52,523) (5.3) % Assisted/Senior living facilities 21,822 2.0 % 23,649 2.0 % (1,827) (7.7) % Administration of third party facilities 2,041 0.2 % 2,247 0.2 % (206) (9.2) % Elimination of administrative services (786) (0.1) % (800) — % 14 1.8 % Inpatient services, net 952,950 87.2 % 1,007,492 86.8 % (54,542) (5.4) % Rehabilitation therapy services: Total therapy services 164,796 15.1 % 195,071 16.8 % (30,275) (15.5) % Elimination of intersegment rehabilitation therapy services (59,327) (5.4) % (74,231) (6.4) % 14,904 20.1 % Third party rehabilitation therapy services, net 105,469 9.7 % 120,840 10.4 % (15,371) (12.7) % Other services: Total other services 54,823 5.0 % 42,118 3.6 % 12,705 30.2 % Elimination of intersegment other services (20,992) (1.9) % (8,810) (0.8) % (12,182) (138.3) % Third party other services, net 33,831 3.1 % 33,308 2.8 % 523 1.6 % Net revenues $ 1,092,250 100.0 % $ 1,161,640 100.0 % $ (69,390) (6.0) % |
Summary of condensed consolidated statements of operations and Total assets | A summary of the Company’s unaudited condensed consolidated statement of operations follows (in thousands): Three months ended March 31, 2020 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 953,736 $ 164,796 $ 54,039 $ 784 $ (81,105) $ 1,092,250 Salaries, wages and benefits 411,042 134,569 34,922 — — 580,533 Other operating expenses 395,526 8,502 17,683 — (81,230) 340,481 General and administrative costs — — — 39,617 — 39,617 Lease expense 96,982 312 427 299 — 98,020 Depreciation and amortization expense 21,634 1,686 198 2,489 (19) 25,988 Interest expense 13,566 14 10 23,830 (1,180) 36,240 Loss on early extinguishment of debt — — — 4,039 — 4,039 Investment income — — — (2,336) 1,180 (1,156) Other (income) loss (85,112) — 280 — — (84,832) Transaction costs — — — 5,591 — 5,591 Long-lived asset impairments 9,700 — — — — 9,700 Equity in net income of unconsolidated affiliates — — — 188 (61) 127 Income (loss) before income tax benefit 90,398 19,713 519 (72,933) 205 37,902 Income tax benefit — — — (779) — (779) Net income (loss) $ 90,398 $ 19,713 $ 519 $ (72,154) $ 205 $ 38,681 Three months ended March 31, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 1,008,292 $ 195,071 $ 42,065 $ 53 $ (83,841) $ 1,161,640 Salaries, wages and benefits 456,762 157,092 28,556 — — 642,410 Other operating expenses 401,932 10,957 13,489 — (83,840) 342,538 General and administrative costs — — — 35,532 — 35,532 Lease expense 92,966 330 342 423 — 94,061 Depreciation and amortization expense 31,872 3,164 174 2,985 — 38,195 Interest expense 27,040 14 9 24,453 — 51,516 Investment income — — — (1,864) — (1,864) Other income (16,841) (76) — — — (16,917) Transaction costs — — — 1,261 — 1,261 Equity in net (income) loss of unconsolidated affiliates — — — (524) 463 (61) Income (loss) before income tax expense 14,561 23,590 (505) (62,213) (464) (25,031) Income tax expense — — — 51 — 51 Net income (loss) $ 14,561 $ 23,590 $ (505) $ (62,264) $ (464) $ (25,082) The following table presents the segment assets as of March 31, 2020 compared to December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Inpatient services $ 4,076,856 $ 4,221,579 Rehabilitation therapy services 274,785 281,978 Other services 50,354 49,877 Corporate and eliminations 86,986 108,706 Total assets $ 4,488,981 $ 4,662,140 The following table presents segment goodwill as of March 31, 2020 compared to December 31, 2019 (in thousands): Rehabilitation Therapy Services Other Services Consolidated Balance at December 31, 2019 Goodwill $ 73,814 $ 11,828 $ 85,642 Accumulated impairment losses — — — $ 73,814 $ 11,828 $ 85,642 Balance at March 31, 2020 Goodwill 73,814 11,828 85,642 Accumulated impairment losses — — — $ 73,814 $ 11,828 $ 85,642 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property and Equipment | |
Schedule of property and equipment | Property and equipment consisted of the following as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Land, buildings and improvements $ 895,787 $ 1,004,447 Equipment, furniture and fixtures 371,138 386,248 Construction in progress 2,816 2,771 Gross property and equipment 1,269,741 1,393,466 Less: accumulated depreciation (415,948) (431,361) Net property and equipment $ 853,793 $ 962,105 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases | |
Schedule of operating lease liability maturities | Year ending December 31, Operating Leases Finance Leases (1) 2020 (excluding the three months ended March 31, 2020) $ 283,563 $ 5,780 2021 381,752 7,526 2022 379,771 7,323 2023 379,007 7,108 2024 384,735 6,893 Thereafter 3,021,964 35,930 Total lease payments 4,830,792 70,560 Less interest (2,055,770) (28,789) Total lease obligations 2,775,022 41,771 Less current portion (142,191) (2,926) Long-term lease obligations $ 2,632,831 $ 38,845 |
Schedule of finance lease liability maturities | Year ending December 31, Operating Leases Finance Leases (1) 2020 (excluding the three months ended March 31, 2020) $ 283,563 $ 5,780 2021 381,752 7,526 2022 379,771 7,323 2023 379,007 7,108 2024 384,735 6,893 Thereafter 3,021,964 35,930 Total lease payments 4,830,792 70,560 Less interest (2,055,770) (28,789) Total lease obligations 2,775,022 41,771 Less current portion (142,191) (2,926) Long-term lease obligations $ 2,632,831 $ 38,845 (1) Finance lease payments include $37.2 million related to options to extend lease terms that are reasonably certain of being exercised. The following table provides lease costs and income by line item on the consolidated statements of operations for the three months ended March 31, 2020 (in thousands): |
Schedule of leases | Three months ended Classification March 31, 2020 Operating lease cost Lease expense $ 98,020 Finance lease cost: Amortization of finance lease right-of-use assets Depreciation and amortization expense 1,016 Interest on finance lease obligations Interest expense 1,219 Total finance lease expense 2,235 Variable lease cost Other operating expenses 8,775 Short-term leases Other operating expenses 5,383 Sublease income Net revenues (975) Total $ 113,438 The following table provides remaining lease term and discount rates by lease classification as of the three months ended March 31, 2020: Lease Term and Discount Rate March 31, 2020 Weighted-average remaining lease term (years) Operating leases 12.3 Finance leases 9.9 Weighted-average discount rate Operating leases Finance leases The following table includes supplemental lease information for the three months ended March 31, 2020 (in thousands): Three months ended Other information March 31, 2020 Cash paid for amounts included in the measurement of lease obligations Operating cash flows from operating leases $ 94,288 Operating cash flows from finance leases 1,931 Financing cash flows from finance leases Right-of-use assets obtained in exchange for new lease obligations Operating leases 5,274 Finance leases 373 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Long-Term Debt [Abstract] | |
Schedule of long-term debt | Long-term debt at March 31, 2020 and December 31, 2019 consisted of the following (in thousands): March 31, 2020 December 31, 2019 Asset based lending facilities, net of debt issuance costs of $7,935 and $8,615 at March 31, 2020 and December 31, 2019, respectively $ 362,977 $ 412,346 Term loan agreements, net of debt issuance costs of $943 and $1,084 and debt premium balance of $4,159 and $4,816 at March 31, 2020 and December 31, 2019, respectively 200,130 196,714 Real estate loans, net of debt issuance costs of $3,467 and $3,846 and debt premium balance of $16,912 and $19,328 at March 31, 2020 and December 31, 2019, respectively 230,669 265,700 HUD insured loans, net of debt issuance costs of $1,147 and $2,909 at March 31, 2020 and December 31, 2019, respectively 44,876 117,117 Notes payable 110,952 116,952 Mortgages and other secured debt (recourse) 6,375 6,369 Mortgages and other secured debt (non-recourse), net of debt issuance costs of $9,167 and $9,349 and debt premium balance of $1,398 and $1,422 at March 31, 2020 and December 31, 2019, respectively 505,257 498,222 1,461,236 1,613,420 Less: Current installments of long-term debt (106,088) (162,426) Long-term debt $ 1,355,148 $ 1,450,994 |
Schedule of borrowings and interest rates under ABL Credit Facility | Borrowings and interest rates under the ABL Credit Facilities were as follows at March 31, 2020 (dollars in thousands): Weighted Average ABL Credit Facilities Commitment Borrowings Interest Term loan facility $ 285,000 $ 285,000 7.45 % Revolving credit facility (Non-HUD) 168,000 28,924 7.45 % Revolving credit facility (HUD) 72,000 29,488 7.45 % Delayed draw term loan facility 30,000 27,500 12.45 % $ 555,000 $ 370,912 7.82 % |
Schedule of maturity of total debt | The maturity of total debt of $1,461.4 million, excluding debt issuance costs and other non-cash debt discounts and premiums, at March 31, 2020 is as follows (in thousands): Twelve months ended March 31, 2021 $ 106,080 2022 586,487 2023 337,843 2024 11,932 2025 9,587 Thereafter 409,497 Total debt maturity $ 1,461,426 |
Other Income (Tables)
Other Income (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Income | |
Summary of Net (Gain) Loss Recorded as Other Income | Three months ended March 31, 2020 2019 Gain on sale of owned assets (1) $ (74,580) $ — Loss recognized for exit costs associated with divestiture of operations (2) 4,935 3,344 Gain on lease termination or modification (3) (15,187) (20,261) Total other income $ (84,832) $ (16,917) (1) The Company sold 10 owned skilled nursing facilities during the three months ended March 31, 2020. The gain represents sale proceeds in excess of the carrying value of the assets sold. There were no sales of owned assets in the three months ended March 31, 2019. (2) The Company divested operations of 24 facilities, including the 10 sold facilities noted above, and 10 facilities in the three months ended March 31, 2020 and 2019, respectively. Upon divestiture, the Company recognizes exit costs for uncollectible accounts receivable resulting from a sale, the write-off of inventory balances assumed by the new operator, and other costs associated with the transition of operations. (3) The Company amended numerous lease agreements in the three months ended March 31, 2020 and 2019. These transactions resulted in a combination of base rent reductions, annual escalator reductions, lease term extensions or reductions and facility terminations. Each lease amendment triggers a lease reassessment of the respective ROU asset and lease liability with an offsetting adjustment recorded to the consolidated statements of operations as other income or loss. In the three months ended March 31, 2020, the Company recognized a gain on the sale of the leasehold rights of 13 facilities of $10.7 million and a gain on lease termination of nine facilities of $4.5 million. In the three months ended March 31, 2019, the Company amended the Welltower Master Lease several times to reflect the lease termination of 24 facilities resulting in a gain of $20.3 million. |
Assets Held for Sale (Tables)
Assets Held for Sale (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Current assets: Prepaid expenses $ — $ 1,171 Long-term assets: Property and equipment, net of accumulated depreciation of $9,014 and $2,201 at March 31, 2020 and December 31, 2019, respectively 38,538 16,306 Total assets $ 38,538 $ 17,477 Current liabilities: Current installments of long-term debt $ 728 $ 368 Long-term liabilities: Long-term debt 44,913 19,789 Total liabilities $ 45,641 $ 20,157 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value of Financial Instruments | |
Schedule of fair value of assets measured on a recurring basis | The tables below present the Company’s assets measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019, 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 March 31, Identical Assets Observable Inputs Inputs Assets: 2020 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 23,502 $ 23,502 $ — $ — Restricted cash and equivalents 98,051 98,051 — — Restricted investments in marketable securities 131,121 41,360 89,761 — Total $ 252,674 $ 162,913 $ 89,761 $ — 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: 2019 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 12,097 $ 12,097 $ — $ — Restricted cash and equivalents 113,709 113,709 — — Restricted investments in marketable securities 136,942 45,903 91,039 — Total $ 262,748 $ 171,709 $ 91,039 $ — |
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): March 31, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Asset based lending facilities $ 362,977 $ 362,977 $ 412,346 $ 412,346 Term loan agreements 200,130 200,130 196,714 196,714 Real estate loans 230,669 230,669 265,700 265,700 HUD insured loans 44,876 44,876 117,117 117,117 Notes payable 110,952 110,952 116,952 116,952 Mortgages and other secured debt (recourse) 6,375 6,375 6,369 6,369 Mortgages and other secured debt (non-recourse) 505,257 505,257 498,222 498,222 $ 1,461,236 $ 1,461,236 $ 1,613,420 $ 1,613,420 |
Schedule of hierarchy of nonfinancial assets measured at fair value on a nonrecurring basis | The following tables present the Company’s hierarchy for nonfinancial assets measured at fair value on a non-recurring basis (in thousands): Impairment Charges - Carrying Value Three months ended March 31, 2020 March 31, 2020 Assets: Property and equipment, net $ 853,793 $ 7,100 Finance lease right-of-use assets, net 33,791 2,600 Operating lease right-of-use assets 2,353,477 — Intangible assets, net 86,136 — Goodwill 85,642 — Impairment Charges - Carrying Value Three months ended December 31, 2019 March 31, 2019 Assets: Property and equipment, net $ 962,105 $ — Finance lease right-of-use assets, net 37,097 — Operating lease right-of-use assets 2,399,505 — Intangible assets, net 87,446 — Goodwill 85,642 — |
General Information - Descripti
General Information - Description of Business, and Basis of Presentation (Details) | 3 Months Ended | |
Mar. 31, 2020statefacility | Mar. 31, 2019 | |
Revenue | Product Concentration Risk | ||
Concentration risk | ||
Concentration risk (as a percent) | 100.00% | 100.00% |
Rehabilitation therapy service | Revenue | Product Concentration Risk | ||
Concentration risk | ||
Concentration risk (as a percent) | 9.70% | 10.40% |
Inpatient Services | ||
Description of business | ||
Number of skilled nursing, assisted/senior living and behavioral health centers through which inpatient services are provided | facility | 376 | |
Number of states with facilities | state | 26 | |
Inpatient Services | Revenue | Product Concentration Risk | ||
Concentration risk | ||
Concentration risk (as a percent) | 87.20% | 86.80% |
General Information - Recent Ac
General Information - Recent Accounting Pronouncements (Details) | Mar. 31, 2020 |
Accounting Standards Update 2018-13 | |
Recent Accounting Pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | true |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 1, 2020 |
Change in Accounting Principle, Accounting Standards Update, Early Adoption | false |
Accounting Standards Update 2016-13 | |
Recent Accounting Pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | false |
Change in Accounting Principle, Accounting Standards Update, Early Adoption | false |
Certain Significant Risks and_3
Certain Significant Risks and Uncertainties - Revenue Sources (Details) - Government contracts - Inpatient Services | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue Sources | ||
Concentration Risk, Percentage | 100.00% | 100.00% |
Medicare | ||
Revenue Sources | ||
Concentration Risk, Percentage | 21.00% | 21.00% |
Medicaid | ||
Revenue Sources | ||
Concentration Risk, Percentage | 58.00% | 58.00% |
Insurance | ||
Revenue Sources | ||
Concentration Risk, Percentage | 12.00% | 12.00% |
Private | ||
Revenue Sources | ||
Concentration Risk, Percentage | 7.00% | 7.00% |
Other | ||
Revenue Sources | ||
Concentration Risk, Percentage | 2.00% | 2.00% |
Revenue | Medicare and Medicaid | ||
Revenue Sources | ||
Concentration Risk, Percentage | 79.00% |
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 | 3 Months Ended |
Mar. 31, 2020USD ($)customer | |
Minimum | |
Concentration Risk | |
Number of distinct customers | 140 |
Related Party Customer | |
Concentration Risk | |
Concentration risk (as a percent) | 36.00% |
Number of large customers comprising over 34% of the net outstanding contract receivables | 1 |
Contract receivables, net | $ | $ 30.1 |
Significant Transactions and _2
Significant Transactions and Events - Next Partnership (Details) $ in Thousands | Feb. 01, 2020USD ($)facility | Jan. 10, 2020USD ($)facility | Sep. 12, 2019facility | Mar. 31, 2020USD ($)facility | Mar. 31, 2019USD ($)facility | Dec. 31, 2019facility |
Acquisitions, Lease Amendments and Terminations | ||||||
Number of facilities sold | facility | 10 | |||||
Payment for investment in joint venture | $ 14,886 | |||||
Annual rent | 98,020 | $ 94,061 | ||||
Gain (loss) on early extinguishment of debt | $ (4,039) | |||||
Number Of Facilities Divested Or Closed | facility | 24 | 6 | ||||
Skilled Nursing Facilities | ||||||
Acquisitions, Lease Amendments and Terminations | ||||||
Number of facilities sold | facility | 6 | 10 | 0 | |||
HUD insured loans | Skilled Nursing Facilities | ||||||
Acquisitions, Lease Amendments and Terminations | ||||||
Number of facilities sold | facility | 6 | |||||
Vantage Point Partnership | ||||||
Acquisitions, Lease Amendments and Terminations | ||||||
Variable interest entity, ownership interest (as a percent) | 30.00% | 30.00% | ||||
Number of facilities, membership interest in real estate acquired | facility | 18 | |||||
Vantage Point Partnership | Skilled Nursing Facilities | ||||||
Acquisitions, Lease Amendments and Terminations | ||||||
Number of facilities sold | facility | 1 | |||||
New Generation Health, LLC | California, Washington and Nevada | ||||||
Acquisitions, Lease Amendments and Terminations | ||||||
Investments in facilities | $ 14,900 | |||||
Payments for Advance to Affiliate | 9,000 | |||||
Gain (Loss) on sale of owned facilities and transition of leased facilities | 58,800 | |||||
Gain (loss) on early extinguishment of debt | $ (1,000) | |||||
Ownership interest | 50.00% | |||||
Welltower | ||||||
Acquisitions, Lease Amendments and Terminations | ||||||
Annual rent credits | $ 700 | |||||
Purchase price of facilities acquired | 9,100 | |||||
Proceeds from sale of facilities | 200 | |||||
Property, plant and equipment, net, increase due to consolidation | 9,100 | |||||
Non-recourse debt | $ 7,300 |
Significant Transactions and _3
Significant Transactions and Events - Divestiture of Non-Strategic Facilities (Details) $ in Thousands | Mar. 04, 2020USD ($)facility | Feb. 26, 2020USD ($)facility | Feb. 01, 2020USD ($)facility | Jan. 31, 2020USD ($) | Jan. 10, 2020USD ($) | Jan. 31, 2020USD ($)facility | Mar. 31, 2020USD ($)facility | Mar. 31, 2019USD ($)facility | Dec. 31, 2019facility |
Skilled Nursing Facility Divestitures | |||||||||
Number of facilities divested or closed | facility | 24 | 6 | |||||||
Number of facilities sold | facility | 10 | ||||||||
Other Nonoperating Income (Expense) | $ 84,832 | $ 16,917 | |||||||
Increase in Operating lease obligations | (28,511) | $ (21,567) | |||||||
Gain on early extinguishment of debt | $ (4,039) | ||||||||
Skilled Nursing Facilities | |||||||||
Skilled Nursing Facility Divestitures | |||||||||
Number of facilities sold | facility | 6 | 10 | 0 | ||||||
Disposal Group Not Discontinued Operations Divestiture And Lease Termination | Skilled Nursing Facilities | |||||||||
Skilled Nursing Facility Divestitures | |||||||||
Gain on partial lease termination | $ 3,000 | ||||||||
Gain (Loss) on Termination of Lease | 3,000 | ||||||||
Gain on early extinguishment of debt | $ 400 | ||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Skilled Nursing Facilities | |||||||||
Skilled Nursing Facility Divestitures | |||||||||
Number of facilities sold | facility | 1 | ||||||||
Sales price | $ 78,600 | ||||||||
Maryland | Skilled Nursing Facilities | |||||||||
Skilled Nursing Facility Divestitures | |||||||||
Number of facilities sold | facility | 1 | ||||||||
Massachusetts | Skilled Nursing Facilities | |||||||||
Skilled Nursing Facility Divestitures | |||||||||
Annual rent credit granted on termination | $ 400 | ||||||||
Gain on partial lease termination | $ 200 | ||||||||
Number of facilities sold | facility | 1 | ||||||||
Gain (Loss) on Termination of Lease | $ 200 | ||||||||
California | Skilled Nursing Facilities | |||||||||
Skilled Nursing Facility Divestitures | |||||||||
Number of facilities sold | facility | 1 | ||||||||
Annual revenues | $ 14,000 | ||||||||
Pre-tax net income (loss) | (100) | ||||||||
Sales price | 20,800 | ||||||||
Repayments of loans | $ 20,500 | ||||||||
North Carolina and Maryland | Skilled Nursing Facilities | |||||||||
Skilled Nursing Facility Divestitures | |||||||||
Annual revenues | $ 38,700 | ||||||||
Pre-tax net income (loss) | 500 | ||||||||
Gain (loss) recognized in disposal group | 24,500 | ||||||||
Sales price | 61,800 | ||||||||
Repayments of loans | 29,100 | ||||||||
Gain on early extinguishment of debt | $ 2,600 | ||||||||
North Carolina | Skilled Nursing Facilities | |||||||||
Skilled Nursing Facility Divestitures | |||||||||
Number of facilities sold | facility | 2 | ||||||||
Montana | Assisted Senior Living Facilities | |||||||||
Skilled Nursing Facility Divestitures | |||||||||
Number of facilities divested or closed | facility | 1 | ||||||||
Annual rent credit granted on termination | $ 700 | ||||||||
Annual revenues | 2,500 | ||||||||
Pre-tax net income (loss) | $ 100 | ||||||||
New Generation Health, LLC | |||||||||
Skilled Nursing Facility Divestitures | |||||||||
Leasehold rights transferred, number of facilities | facility | 13 | ||||||||
New Generation Health, LLC | California, Washington and Nevada | |||||||||
Skilled Nursing Facility Divestitures | |||||||||
Sales price | $ 78,700 | ||||||||
Repayments of loans | 33,700 | ||||||||
Gain on early extinguishment of debt | $ (1,000) | ||||||||
Welltower | |||||||||
Skilled Nursing Facility Divestitures | |||||||||
Annual rent credit granted on termination | $ 700 |
Net Revenues and Accounts Rec_3
Net Revenues and Accounts Receivable - Adoption of ASC 606 (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net Revenues and Accounts Receivable | ||
Operating expenses | $ 340,481 | $ 342,538 |
Net Revenues and Accounts Rec_4
Net Revenues and Accounts Receivable - Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of revenue | ||
Net revenues | $ 1,161,640 | |
Total net revenues | $ 1,092,250 | 1,161,640 |
Inpatient Services | ||
Disaggregation of revenue | ||
Net revenues | 1,007,492 | |
Total net revenues | 952,950 | 1,007,492 |
Rehabilitation therapy service | ||
Disaggregation of revenue | ||
Net revenues | 105,469 | 120,840 |
Total net revenues | 105,469 | |
Other Services | ||
Disaggregation of revenue | ||
Net revenues | 33,831 | 33,308 |
Total net revenues | 33,831 | |
Medicare | ||
Disaggregation of revenue | ||
Net revenues | 218,945 | 230,720 |
Medicare | Inpatient Services | ||
Disaggregation of revenue | ||
Net revenues | 197,036 | 207,968 |
Medicare | Rehabilitation therapy service | ||
Disaggregation of revenue | ||
Net revenues | 21,909 | 22,752 |
Medicaid | ||
Disaggregation of revenue | ||
Net revenues | 551,480 | 581,502 |
Medicaid | Inpatient Services | ||
Disaggregation of revenue | ||
Net revenues | 550,990 | 580,947 |
Medicaid | Rehabilitation therapy service | ||
Disaggregation of revenue | ||
Net revenues | 490 | 555 |
Insurance | ||
Disaggregation of revenue | ||
Net revenues | 117,726 | 130,314 |
Insurance | Inpatient Services | ||
Disaggregation of revenue | ||
Net revenues | 112,271 | 125,080 |
Insurance | Rehabilitation therapy service | ||
Disaggregation of revenue | ||
Net revenues | 5,455 | 5,234 |
Private | ||
Disaggregation of revenue | ||
Net revenues | 75,179 | 77,044 |
Private | Inpatient Services | ||
Disaggregation of revenue | ||
Net revenues | 75,069 | 76,933 |
Private | Rehabilitation therapy service | ||
Disaggregation of revenue | ||
Net revenues | 110 | 111 |
Assisted living | Inpatient Services | ||
Disaggregation of revenue | ||
Revenue not accounted for under Topic 606 | 21,800 | 23,600 |
Third party providers | ||
Disaggregation of revenue | ||
Net revenues | 91,723 | 110,136 |
Third party providers | Rehabilitation therapy service | ||
Disaggregation of revenue | ||
Net revenues | 73,106 | 89,529 |
Third party providers | Other Services | ||
Disaggregation of revenue | ||
Net revenues | 18,617 | 20,607 |
Other | ||
Disaggregation of revenue | ||
Net revenues | 37,197 | 31,924 |
Other | Inpatient Services | ||
Disaggregation of revenue | ||
Net revenues | 17,584 | 16,564 |
Other | Rehabilitation therapy service | ||
Disaggregation of revenue | ||
Net revenues | 4,399 | 2,659 |
Other | Other Services | ||
Disaggregation of revenue | ||
Net revenues | $ 15,214 | $ 12,701 |
Earnings (Loss) Per Share - Gen
Earnings (Loss) Per Share - General Information (Details) | 3 Months Ended |
Mar. 31, 2020class | |
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 | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net income (loss) | $ 38,681 | $ (25,082) |
Less net (income) loss attributable to noncontrolling interests | (5,173) | 9,819 |
Net income (loss) attributable to Genesis Healthcare, Inc. | $ 33,508 | $ (15,263) |
Denominator: | ||
Weighted-average shares outstanding for basic net income (loss) per share | 109,721 | 103,715 |
Basic net income (loss) per common share attributable to Genesis Healthcare, Inc. | $ 0.31 | $ (0.15) |
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 | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net income (loss) | $ 38,681 | $ (25,082) |
Less net (income) loss attributable to noncontrolling interests | (5,173) | 9,819 |
Net loss attributable to Genesis Healthcare, Inc | 33,508 | (15,263) |
Plus: Assumed conversion of noncontrolling interests | 6,268 | |
Net loss attributable to Genesis Healthcare, Inc | $ 39,776 | $ (15,263) |
Denominator: | ||
Weighted-average common shares outstanding | 109,721 | 103,715 |
Plus: Assumed conversion of noncontrolling interests | 56,023 | |
Plus: Unvested restricted stock units and stock warrants | 1,670 | |
Adjusted weighted-average common shares outstanding, diluted | 167,414 | 103,715 |
Diluted net income (loss) per common share attributable to Genesis Healthcare, Inc. | $ 0.24 | $ (0.15) |
Earnings (Loss) Per Share - Ant
Earnings (Loss) Per Share - Antidilutive Securities (Details) - Assumed conversion of noncontrolling interests, unvested restricted stock units and stock warrants shares in Millions | 3 Months Ended |
Mar. 31, 2019shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive shares | 60 |
Number of units attributed to the noncontrolling interests outstanding | 56.6 |
Segment Information - Segment R
Segment Information - Segment Reporting (Details) | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($)segment | |
Segment Reporting Information | ||
Number of reportable segments | segment | 3 | 3 |
Net revenues | $ 1,161,640,000 | |
Net revenues | $ 1,092,250,000 | 1,161,640,000 |
Increase (Decrease) in Net Revenue From Prior Period | (69,390,000) | |
Salaries, wages and benefits | 580,533,000 | 642,410,000 |
Other operating expenses | 340,481,000 | 342,538,000 |
General and administrative costs | 39,617,000 | 35,532,000 |
Lease expense | 98,020,000 | 94,061,000 |
Depreciation and amortization expense | 25,988,000 | 38,195,000 |
Interest expense | 36,240,000 | 51,516,000 |
(Gain) loss on early extinguishment of debt | 4,039,000 | |
Investment income | (1,156,000) | (1,864,000) |
Other income | (84,832,000) | (16,917,000) |
Transaction costs | 5,591,000 | 1,261,000 |
Long-lived asset impairments | 9,700,000 | |
Equity in net income of unconsolidated affiliates | 127,000 | (61,000) |
Income (loss) before income tax expense (benefit) | 37,902,000 | (25,031,000) |
Income tax expense (benefit) | (779,000) | 51,000 |
Net loss | $ 38,681,000 | $ (25,082,000) |
Product Concentration Risk | Revenue | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 100.00% | 100.00% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (6.00%) | |
Inpatient Services | ||
Segment Reporting Information | ||
Net revenues | $ 1,007,492,000 | |
Net revenues | $ 952,950,000 | $ 1,007,492,000 |
Increase (Decrease) in Net Revenue From Prior Period | $ (54,542,000) | |
Inpatient Services | Product Concentration Risk | Revenue | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 87.20% | 86.80% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (5.40%) | |
Inpatient Services | Skilled Nursing Facilities | ||
Segment Reporting Information | ||
Net revenues | $ 929,873,000 | $ 982,396,000 |
Increase (Decrease) in Net Revenue From Prior Period | $ (52,523,000) | |
Inpatient Services | Skilled Nursing Facilities | Product Concentration Risk | Revenue | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 85.10% | 84.60% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (5.30%) | |
Inpatient Services | Assisted Senior Living Facilities | ||
Segment Reporting Information | ||
Revenues outside scope of ASC 606 | $ 21,822,000 | $ 23,649,000 |
Increase (Decrease) in Net Revenue From Prior Period | $ (1,827,000) | |
Inpatient Services | Assisted Senior Living Facilities | Product Concentration Risk | Revenue | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 2.00% | 2.00% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (7.70%) | |
Inpatient Services | Administration of third party facilities | ||
Segment Reporting Information | ||
Net revenues | $ 2,041,000 | $ 2,247,000 |
Increase (Decrease) in Net Revenue From Prior Period | $ (206,000) | |
Inpatient Services | Administration of third party facilities | Product Concentration Risk | Revenue | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 0.20% | 0.20% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (9.20%) | |
Rehabilitation therapy service | ||
Segment Reporting Information | ||
Net revenues | $ 105,469,000 | $ 120,840,000 |
Net revenues | 105,469,000 | |
Increase (Decrease) in Net Revenue From Prior Period | $ (15,371,000) | |
Rehabilitation therapy service | Product Concentration Risk | Revenue | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 9.70% | 10.40% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (12.70%) | |
Rehabilitation therapy service | Therapy Services | ||
Segment Reporting Information | ||
Net revenues | $ 164,796,000 | $ 195,071,000 |
Increase (Decrease) in Net Revenue From Prior Period | $ (30,275,000) | |
Rehabilitation therapy service | Therapy Services | Product Concentration Risk | Revenue | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 15.10% | 16.80% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (15.50%) | |
Other Services | ||
Segment Reporting Information | ||
Net revenues | $ 33,831,000 | $ 33,308,000 |
Net revenues | 33,831,000 | |
Increase (Decrease) in Net Revenue From Prior Period | $ 523,000 | |
Other Services | Product Concentration Risk | Revenue | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 3.10% | 2.80% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 1.60% | |
Other Services | Other Services | ||
Segment Reporting Information | ||
Net revenues | $ 54,823,000 | $ 42,118,000 |
Increase (Decrease) in Net Revenue From Prior Period | $ 12,705,000 | |
Other Services | Other Services | Product Concentration Risk | Revenue | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 5.00% | 3.60% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 30.20% | |
Operating Segments | Inpatient Services | ||
Segment Reporting Information | ||
Net revenues | $ 953,736,000 | $ 1,008,292,000 |
Salaries, wages and benefits | 411,042,000 | 456,762,000 |
Other operating expenses | 395,526,000 | 401,932,000 |
Lease expense | 96,982,000 | 92,966,000 |
Depreciation and amortization expense | 21,634,000 | 31,872,000 |
Interest expense | 13,566,000 | 27,040,000 |
Other income | (85,112,000) | (16,841,000) |
Long-lived asset impairments | 9,700,000 | |
Income (loss) before income tax expense (benefit) | 90,398,000 | 14,561,000 |
Net loss | 90,398,000 | 14,561,000 |
Operating Segments | Rehabilitation therapy service | ||
Segment Reporting Information | ||
Net revenues | 164,796,000 | 195,071,000 |
Salaries, wages and benefits | 134,569,000 | 157,092,000 |
Other operating expenses | 8,502,000 | 10,957,000 |
Lease expense | 312,000 | 330,000 |
Depreciation and amortization expense | 1,686,000 | 3,164,000 |
Interest expense | 14,000 | 14,000 |
Other income | (76,000) | |
Income (loss) before income tax expense (benefit) | 19,713,000 | 23,590,000 |
Net loss | 19,713,000 | 23,590,000 |
Operating Segments | Other Services | ||
Segment Reporting Information | ||
Net revenues | 54,039,000 | 42,065,000 |
Salaries, wages and benefits | 34,922,000 | 28,556,000 |
Other operating expenses | 17,683,000 | 13,489,000 |
Lease expense | 427,000 | 342,000 |
Depreciation and amortization expense | 198,000 | 174,000 |
Interest expense | 10,000 | 9,000 |
Other income | 280,000 | |
Income (loss) before income tax expense (benefit) | 519,000 | (505,000) |
Net loss | 519,000 | (505,000) |
Corporate, Non-Segment | ||
Segment Reporting Information | ||
Net revenues | 784,000 | 53,000 |
General and administrative costs | 39,617,000 | 35,532,000 |
Lease expense | 299,000 | 423,000 |
Depreciation and amortization expense | 2,489,000 | 2,985,000 |
Interest expense | 23,830,000 | 24,453,000 |
(Gain) loss on early extinguishment of debt | 4,039,000 | |
Investment income | (2,336,000) | (1,864,000) |
Transaction costs | 5,591,000 | 1,261,000 |
Equity in net income of unconsolidated affiliates | 188,000 | (524,000) |
Income (loss) before income tax expense (benefit) | (72,933,000) | (62,213,000) |
Income tax expense (benefit) | (779,000) | 51,000 |
Net loss | (72,154,000) | (62,264,000) |
Elimination | ||
Segment Reporting Information | ||
Net revenues | (81,105,000) | (83,841,000) |
Other operating expenses | (81,230,000) | (83,840,000) |
Depreciation and amortization expense | (19,000) | |
Interest expense | (1,180,000) | |
Investment income | 1,180,000 | |
Equity in net income of unconsolidated affiliates | (61,000) | 463,000 |
Income (loss) before income tax expense (benefit) | 205,000 | (464,000) |
Net loss | 205,000 | (464,000) |
Elimination | Inpatient Services | ||
Segment Reporting Information | ||
Net revenues | (786,000) | (800,000) |
Increase (Decrease) in Net Revenue From Prior Period | $ 14,000 | |
Elimination | Inpatient Services | Product Concentration Risk | Revenue | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | (0.10%) | |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 1.80% | |
Elimination | Rehabilitation therapy service | ||
Segment Reporting Information | ||
Net revenues | $ (59,327,000) | $ (74,231,000) |
Increase (Decrease) in Net Revenue From Prior Period | $ 14,904,000 | |
Elimination | Rehabilitation therapy service | Product Concentration Risk | Revenue | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | (5.40%) | (6.40%) |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 20.10% | |
Elimination | Other Services | Other Services | ||
Segment Reporting Information | ||
Net revenues | $ (20,992,000) | $ (8,810,000) |
Increase (Decrease) in Net Revenue From Prior Period | $ (12,182,000) | |
Elimination | Other Services | Other Services | Product Concentration Risk | Revenue | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | (1.90%) | (0.80%) |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (138.30%) |
Segment Information - Assets an
Segment Information - Assets and Goodwill by Segment (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | $ 4,488,981 | $ 4,662,140 |
Corporate and Eliminations | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 86,986 | 108,706 |
Inpatient Services | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 4,076,856 | 4,221,579 |
Rehabilitation therapy service | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 274,785 | 281,978 |
Other Services | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | $ 50,354 | $ 49,877 |
Segment Information - Segment G
Segment Information - Segment Goodwill (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Goodwill [Line Items] | ||
Goodwill | $ 85,642 | $ 85,642 |
Goodwill, net | 85,642 | 85,642 |
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 | Mar. 31, 2020 | Dec. 31, 2019 |
Property and Equipment | ||
Gross property and equipment | $ 1,269,741 | $ 1,393,466 |
Less accumulated depreciation | (415,948) | (431,361) |
Net property and equipment | 853,793 | 962,105 |
Land, Buildings and Improvements | ||
Property and Equipment | ||
Gross property and equipment | 895,787 | 1,004,447 |
Equipment, furniture and fixtures | ||
Property and Equipment | ||
Gross property and equipment | 371,138 | 386,248 |
Construction in progress | ||
Property and Equipment | ||
Gross property and equipment | $ 2,816 | $ 2,771 |
Property and Equipment - Consol
Property and Equipment - Consolidated VIEs (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Property and Equipment | ||
Net property and equipment | $ 853,793 | $ 962,105 |
Variable Interest Entity, Primary Beneficiary | ||
Property and Equipment | ||
Net property and equipment | $ 540,900 | $ 535,900 |
Property and Equipment - Lease
Property and Equipment - Lease Updates (Details) $ in Thousands | Feb. 01, 2020facility | Mar. 31, 2020USD ($)facility | Mar. 31, 2019facility |
Assets held for sale | |||
Number of facilities sold | facility | 10 | ||
Amount reclassified from property and equipment to assets held for sale | $ 75,000 | ||
Other Asset Impairment Charges | $ 9,700 | ||
Skilled Nursing Facilities | |||
Assets held for sale | |||
Number of facilities sold | facility | 6 | 10 | 0 |
Other Asset Impairment Charges | $ 7,100 |
Leases - General Information (D
Leases - General Information (Details) | 3 Months Ended |
Mar. 31, 2020item | |
Leases | |
Percentage of centers that are leased properties (as a percent) | 76.00% |
Percentage of centers under master lease agreements (as a percent) | 45.00% |
Number of landlords with master lease agreements | 4 |
Leases - Fixed-price Options (D
Leases - Fixed-price Options (Details) | Mar. 31, 2020facility |
Leases | |
Fixed-price options to purchase facilities, number of facilities | 57 |
Fixed-price options to purchase facilities, subject to third-party leases, number of facilities | 23 |
Fixed-price options to purchase facilities, subject to lease arrangements with consolidated variable interest entities, number of facilities | 34 |
Leases - Terms and Lease Transa
Leases - Terms and Lease Transactions (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Operating leases | |
Lessee, Operating Lease, Existence of Option to Extend | true |
Lessee, Operating Lease, Existence of Option to Terminate | true |
Finance leases | |
Lessee, Finance Lease, Existence of Option to Extend | true |
Lessee, Finance Lease, Existence of Option to Terminate | true |
Minimum | |
Operating leases | |
Term of operating lease | 10 years |
Operating lease renewal term | 5 years |
Finance leases | |
Term of finance lease | 10 years |
Finance lease renewal term (in years) | 5 years |
Maximum | |
Operating leases | |
Term of operating lease | 15 years |
Operating lease renewal term | 10 years |
Finance leases | |
Term of finance lease | 15 years |
Finance lease renewal term (in years) | 10 years |
Leases - Finance Leases - Impai
Leases - Finance Leases - Impairment (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Income and Expenses, Lessee [Abstract] | |
Finance lease right-of-use assets, net, Impairment charges | $ 2.6 |
Leases - Operating Leases - Mat
Leases - Operating Leases - Maturity (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Maturity of operating lease obligations | |
2020 (excluding three months ended March 31, 2020) | $ 283,563 |
2021 | 381,752 |
2022 | 379,771 |
2023 | 379,007 |
2024 | 384,735 |
Thereafter | 3,021,964 |
Total operating lease payments | $ 4,830,792 |
Leases - Operating Leases - Tot
Leases - Operating Leases - Total Lease Obligation (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Operating leases | ||
Total operating lease payments | $ 4,830,792 | |
Less interest | (2,055,770) | |
Total operating lease obligations | 2,775,022 | |
Less current portion | (142,191) | $ (140,887) |
Long-term operating lease obligations | $ 2,632,831 | $ 2,681,403 |
Leases - Finance Leases - Matur
Leases - Finance Leases - Maturity (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Maturity of finance lease obligations | |
2020 (excluding three months ended March 31, 2020) | $ 5,780 |
2021 | 7,526 |
2022 | 7,323 |
2023 | 7,108 |
2024 | 6,893 |
Thereafter | 35,930 |
Total finance lease payments | $ 70,560 |
Leases - Finance Leases - Total
Leases - Finance Leases - Total Lease Obligation (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Finance leases | ||
Total finance lease payments | $ 70,560 | |
Less interest | (28,789) | |
Total finance lease obligations | 41,771 | |
Less current portion | (2,926) | $ (2,839) |
Long-term finance lease obligations | $ 38,845 | $ 39,335 |
Leases - Finance Leases - Addit
Leases - Finance Leases - Additional Information (Details) $ in Millions | Mar. 31, 2020USD ($) |
Leases | |
Portion of finance lease payments due related to options to extend lease terms | $ 37.2 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Lease cost | |
Operating lease cost | $ 98,020 |
Amortization of finance lease right-of-use assets | 1,016 |
Interest on finance lease liabilities | 1,219 |
Total finance lease expense | 2,235 |
Variable lease cost | 8,775 |
Short-term leases | 5,383 |
Sublease income | (975) |
Total lease cost | $ 113,438 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Mar. 31, 2020 |
Leases | |
Weighted-average remaining lease term - operating leases | 12 years 3 months 18 days |
Weighted-average remaining lease term - finance leases | 9 years 10 months 24 days |
Weighted-average discount rate - operating leases | 9.50% |
Weighted-average discount rate - finance leases | 12.10% |
Leases - Other Information (Det
Leases - Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases | ||
Operating cash flows from operating leases | $ 94,288 | |
Operating cash flows from finance leases | 1,931 | |
Financing cash flows from finance leases | 712 | $ 575 |
Right-of-use assets obtained in exchange for new lease obligations, operating leases | 5,274 | |
Right-of-use assets obtained in exchange for new lease obligations, finance leases | $ 373 |
Leases - Lease Covenants (Detai
Leases - Lease Covenants (Details) | 3 Months Ended |
Mar. 31, 2020agreementfacility | |
Leases | |
Number of leases with unmet financial covenants | agreement | 1 |
Number of facilities under leases with unmet financial covenants | facility | 2 |
Welltower - CBYW | |
Leases | |
Number of leases with unmet financial covenants | agreement | 1 |
Number of facilities under leases with unmet financial covenants | facility | 2 |
Long-Term Debt - General Inform
Long-Term Debt - General Information (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Long-term debt | ||
Total long-term debt | $ 1,461,236 | $ 1,613,420 |
Current installments of long-term debt | (106,088) | (162,426) |
Long-term debt | 1,355,148 | 1,450,994 |
ABL Credit Facilities | ||
Long-term debt | ||
Total long-term debt | 362,977 | 412,346 |
Debt issuance costs | 7,935 | 8,615 |
Term Loan | ||
Long-term debt | ||
Total long-term debt | 200,130 | 196,714 |
Debt issuance costs | 943 | 1,084 |
Debt premium | 4,159 | 4,816 |
Real estate loans | ||
Long-term debt | ||
Total long-term debt | 230,669 | 265,700 |
Debt issuance costs | 3,467 | 3,846 |
Debt premium | 16,912 | 19,328 |
HUD insured loans | ||
Long-term debt | ||
Total long-term debt | 44,876 | 117,117 |
Debt issuance costs | 1,147 | 2,909 |
Welltower Notes | ||
Long-term debt | ||
Total long-term debt | 110,952 | 116,952 |
Mortgages and other secured debt (recourse) | ||
Long-term debt | ||
Total long-term debt | 6,375 | 6,369 |
Mortgages and other secured debt (non-recourse) | ||
Long-term debt | ||
Total long-term debt | 505,257 | 498,222 |
Debt issuance costs | 9,167 | 9,349 |
Debt premium | $ 1,398 | $ 1,422 |
Long-Term Debt - New Asset Base
Long-Term Debt - New Asset Based Lending Facilities - General Information (Details) - USD ($) $ in Thousands | Mar. 06, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 23, 2016 | Nov. 01, 2016 |
Debt Instrument [Line Items] | ||||||||
Payment of first lien term loan facility | $ 1,143,692 | $ 1,194,676 | ||||||
Borrowings | 370,912 | |||||||
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 | $ 50,800 | |||||||
Term Loan And Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Termination fees, if loan repaid within next twelve months (as a percent) | 2.00% | |||||||
Termination fees, if loan repaid after year two (as a percent) | 1.50% | |||||||
First Lien Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument exit fees amount | $ 1,600 | |||||||
Borrowings | 285,000 | |||||||
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] | ||||||||
Borrowings | 28,924 | |||||||
Total borrowing base capacity | 168,000 | |||||||
HUD Tranche | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowings | 29,488 | |||||||
Total borrowing base capacity | 72,000 | |||||||
Delayed Draw Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Promissory note | $ 27,500 | |||||||
Commitment fee rate (as percentage) | 2.00% | |||||||
Borrowings | $ 27,500 | |||||||
Total borrowing base capacity | $ 30,000 | |||||||
Delayed Draw Term Loan Facility | Forecast | ||||||||
Debt Instrument [Line Items] | ||||||||
Promissory note | $ 20,000 | $ 22,500 | $ 25,000 | |||||
Note Payable Due December 2021 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Promissory note | $ 11,700 | |||||||
Welltower note payable due October 30, 2020 | ||||||||
Debt Instrument [Line Items] | ||||||||
Promissory note | $ 51,200 | |||||||
New Asset Based Lending Facilities | ABL Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Promissory note | $ 555,000 | |||||||
New Asset Based Lending Facilities | First Lien Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Promissory note | 285,000 | |||||||
New Asset Based Lending Facilities | First Lien Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Promissory note | 240,000 | |||||||
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% | |||||||
Borrowings | $ 370,900 | |||||||
Total borrowing base capacity | 403,100 | |||||||
Available borrowing capacity under the ABL Credit Facilities | 32,200 | |||||||
Revolving Credit Facility | Long Term Debt Current | ABL Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowings | $ 85,900 |
Long-Term Debt - New Asset Ba_2
Long-Term Debt - New Asset Based Lending Facilities - Borrowings and Interest Rates (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Debt Instrument [Line Items] | |
Borrowings | $ 370,912 |
Weighted Average Interest | 7.82% |
First Lien Term Loan Facility | |
Debt Instrument [Line Items] | |
Borrowings | $ 285,000 |
Weighted Average Interest | 7.45% |
Revolving credit facility (Non-HUD) | |
Debt Instrument [Line Items] | |
Borrowings | $ 28,924 |
Weighted Average Interest | 7.45% |
HUD Tranche | |
Debt Instrument [Line Items] | |
Borrowings | $ 29,488 |
Weighted Average Interest | 7.45% |
Delayed Draw Term Loan Facility | |
Debt Instrument [Line Items] | |
Borrowings | $ 27,500 |
Weighted Average Interest | 12.45% |
Long-Term Debt - Term Loan Agre
Long-Term Debt - Term Loan Agreement (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 06, 2018 | |
Term Loan | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Outstanding principal balance under term loan facility | $ 193 | |||
Term Loan | Term Loan Amendment | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Fixed interest rate | 10.00% | |||
Term Loan Amendment | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Additional Term Loan | $ 40 | |||
Term Loan Amendment | Term Loan Amendment | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Aggregate principal amount | 160 | |||
Fixed interest rate | 14.00% | |||
Term Loan Amendment | Minimum | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Paid-in-kind interest rate | 9.00% | |||
Term Loan Amendment | Maximum | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Paid-in-kind interest rate | 5.00% | |||
New Term Loan Facility [Member] | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Outstanding principal balance under term loan facility | $ 196.9 | |||
New Term Loan Facility [Member] | Maximum | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Leverage ratio | 1.70% | |||
New Term Loan Facility [Member] | Forecast | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Leverage ratio | 1.80% | |||
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 |
Long-Term Debt - Real Estate Lo
Long-Term Debt - Real Estate Loans (Details) $ in Millions | Nov. 08, 2018USD ($)loan | Apr. 01, 2018USD ($) | Mar. 31, 2020USD ($)loanfacility | Dec. 31, 2019USD ($)facility | Mar. 30, 2018USD ($)loan |
Long-term debt | |||||
Repayments of Debt | $ 14.1 | $ 39.8 | |||
Number of facilities divested or closed | facility | 24 | 6 | |||
Outstanding principal balance | $ 27.9 | $ 42.2 | |||
Welltower Real Estate Loan Amendments | |||||
Long-term debt | |||||
Aggregate principal balance | $ 208 | ||||
Mid Cap Real Estate Loans | |||||
Long-term debt | |||||
Number of real estate loans | loan | 2 | ||||
Aggregate principal amount | $ 75 | ||||
Number of facilities pledged | facility | 9 | ||||
Number of facilities divested or closed | facility | 3 | ||||
Outstanding principal balance | $ 11.7 | ||||
Mid Cap Real Estate Loans | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Long-term debt | |||||
Number of facilities divested or closed | facility | 2 | ||||
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 | ||||
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 | |||||
Aggregate principal balance | $ 218 | ||||
Welltower Real Estate Loans | Welltower Real Estate Loan Amendments | |||||
Long-term debt | |||||
Number of real estate loans | loan | 2 | ||||
Term of debt | 10 years | ||||
Repayments of Debt | $ 9 | ||||
Fixed interest rate | 12.00% | ||||
Cash interest rate | 7.00% | ||||
Paid-in-kind interest rate | 5.00% | ||||
Amount of increase to cash component of interest payments | $ 2 | ||||
Repayment required for conversion option, condition | 105 | ||||
Outstanding principal balance | $ 50 | ||||
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 | ||||
Welltower Real Estate Loans | Welltower Real Estate Loan Amendments | Maximum | |||||
Long-term debt | |||||
Paid-in-kind interest rate | 2.00% | ||||
Debt conversion option | $ 50 |
Long-Term Debt - HUD Insured Lo
Long-Term Debt - HUD Insured Loans (Details) $ in Thousands | Feb. 26, 2020facility | Feb. 01, 2020facility | Mar. 31, 2020USD ($)facility | Mar. 31, 2019USD ($)facility | Dec. 31, 2019USD ($)facility |
Long-term debt | |||||
Weighted Average Interest | 7.82% | ||||
Number of facilities divested or closed | 24 | 6 | |||
Debt instrument retired | $ | $ 89,654 | $ 4,467 | |||
Number Of Facilities Classified As Held For Sale | 1 | ||||
Number Of Facilities Sold | 10 | ||||
Skilled Nursing Facilities | |||||
Long-term debt | |||||
Number Of Facilities Sold | 6 | 10 | 0 | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | Skilled Nursing Facilities | |||||
Long-term debt | |||||
Number Of Facilities Classified As Held For Sale | 6 | ||||
Number Of Facilities Sold | 1 | ||||
HUD insured loans | |||||
Long-term debt | |||||
Principal balance outstanding | $ | $ 80,800 | $ 140,600 | |||
Debt instrument average remaining term (in years) | 28 years 8 months 12 days | ||||
Weighted Average Interest | 3.30% | ||||
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% | ||||
Debt instrument retired | $ | $ 59,300 | ||||
HUD insured loans | Minimum | |||||
Long-term debt | |||||
Term of debt | 30 years | ||||
Fixed interest rate | 3.00% | ||||
HUD insured loans | Maximum | |||||
Long-term debt | |||||
Term of debt | 35 years | ||||
Fixed interest rate | 3.50% | ||||
HUD insured loans | Skilled Nursing Facilities | |||||
Long-term debt | |||||
Number Of Facilities Sold | 6 | ||||
HUD insured loans | Skilled Nursing Facilities | |||||
Long-term debt | |||||
Number of debt instruments insured by HUD | 10 | ||||
HUD insured loans | Prepaid Expenses and Other Current Assets | |||||
Long-term debt | |||||
Escrow reserve funds | $ | $ 7,600 | ||||
HUD insured loans | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Long-term debt | |||||
Principal balance outstanding | $ | $ 34,800 | ||||
Number of facilities financed by HUD | 4 | ||||
California | Skilled Nursing Facilities | |||||
Long-term debt | |||||
Number Of Facilities Sold | 1 | ||||
Skilled Nursing Facility | California | |||||
Long-term debt | |||||
Number of facilities divested or closed | 19 |
Long-Term Debt - Notes Payable
Long-Term Debt - Notes Payable (Details) - USD ($) $ in Millions | Apr. 01, 2020 | Nov. 30, 2019 | Oct. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 23, 2016 | Nov. 01, 2016 |
Long-term debt | |||||||
Repayments of debt | $ 14.1 | $ 39.8 | |||||
Short-term notes payable | |||||||
Long-term debt | |||||||
Principal balance outstanding | 9 | ||||||
Notes Issued | $ 15 | ||||||
Repayments of debt | $ 3 | 6 | |||||
Welltower note payable due October 30, 2020 | |||||||
Long-term debt | |||||||
Promissory note | $ 51.2 | ||||||
Note Payable Due December 15 2021 | |||||||
Long-term debt | |||||||
Principal balance outstanding | 14.6 | 14.6 | |||||
Cash interest rate | 3.00% | ||||||
Paid-in-kind interest rate | 7.00% | ||||||
Note Payable Due September 30, 2022 | |||||||
Long-term debt | |||||||
Debt converted | $ 23.2 | ||||||
Fixed interest rate | 3.50% | ||||||
Welltower Inc | Welltower Notes | |||||||
Long-term debt | |||||||
Loan forgiven on conditions | 6 | ||||||
Welltower Inc | Welltower note payable due October 30, 2020 | |||||||
Long-term debt | |||||||
Principal balance outstanding | $ 64.2 | $ 64.2 | |||||
Cash interest rate | 3.00% | ||||||
Paid-in-kind interest rate | 7.00% |
Long-Term Debt - Other (Details
Long-Term Debt - Other (Details) $ in Millions | Sep. 12, 2019 | Mar. 31, 2020USD ($)facility | Dec. 31, 2019USD ($) |
Long-term debt | |||
Weighted Average Interest | 7.82% | ||
Mortgages and other secured debt (recourse) | |||
Long-term debt | |||
Weighted Average Interest | 1.50% | ||
Mortgages and other secured debt (non-recourse) | |||
Long-term debt | |||
Weighted Average Interest | 4.50% | ||
Aggregate outstanding principal balance | $ 23.5 | ||
HUD insured loans | |||
Long-term debt | |||
Weighted Average Interest | 3.30% | ||
Principal balance outstanding | $ 80.8 | $ 140.6 | |
Next Partnership | |||
Long-term debt | |||
Variable interest entity, ownership interest (as a percent) | 46.00% | ||
Number of facilities included in VIE | facility | 15 | ||
Next Partnership | Term Loan | |||
Long-term debt | |||
Aggregate principal amount | $ 142.1 | ||
Applicable margin rate (as a percent) | 3.50% | ||
Term of debt | 25 years | ||
Principal balance outstanding | $ 103.3 | ||
Number of collateralized facilities | facility | 12 | ||
Next Partnership | Mezzanine loan | |||
Long-term debt | |||
Aggregate principal amount | $ 27 | ||
Fixed interest rate | 11.50% | ||
Principal balance outstanding | $ 27 | ||
Next Partnership | HUD insured loans | |||
Long-term debt | |||
Number of facilities included | facility | 3 | ||
Fixed interest rate | 3.15% | ||
Principal balance outstanding | $ 41.5 | ||
Vantage Point Partnership | |||
Long-term debt | |||
Variable interest entity, ownership interest (as a percent) | 30.00% | 30.00% | |
Ownership interest percentage | 19.00% | ||
Vantage Point Partnership | Term Loan | |||
Long-term debt | |||
Aggregate principal amount | $ 240.9 | ||
Floor rate | 1.75% | ||
Applicable margin rate (as a percent) | 3.75% | ||
Term of debt | 25 years | ||
Principal balance outstanding | $ 240.9 | ||
Number of collateralized facilities | facility | 19 | ||
Vantage Point Partnership | Promissory note | |||
Long-term debt | |||
Aggregate principal amount | $ 76.8 | ||
Fixed interest rate | 14.00% | ||
Principal balance outstanding | $ 76.8 |
Long-Term Debt - Debt Covenants
Long-Term Debt - Debt Covenants (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Twelve months ended December 31, | |
2021 | $ 106,080 |
2022 | 586,487 |
2023 | 337,843 |
2024 | 11,932 |
2025 | 9,587 |
Thereafter | 409,497 |
Total long-term debt | $ 1,461,426 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation | ||
Effective tax rate | (2.10%) | (0.20%) |
Income tax expense (benefit) | $ (779,000) | $ 51,000 |
FC-GEN Operations Investment, LLC | ||
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation | ||
Business Acquisition, Percentage of Voting Interests Acquired | 66.30% |
Income Taxes - Exchange Rights
Income Taxes - Exchange Rights and Tax Receivable Agreement (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
FC-GEN Operations Investment, LLC | ||
Goodwill Tax Deductible Amount Tax Basis Step Up | $ 1.5 | $ 12.9 |
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 | 0.3 | 3.1 |
Class A Common Stock | ||
Number of Class A shares issued in exchange for membership units and Class C shares | 0.3 | 3.1 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | Jun. 01, 2018USD ($)itemfacility | Mar. 31, 2020USD ($)itemfacility | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Feb. 01, 2019USD ($) |
Related Party Transaction | |||||
Options to renew | true | ||||
Lease cost | $ 113,438 | ||||
Maximum | |||||
Related Party Transaction | |||||
Operating lease renewal term | 10 years | ||||
Minimum | |||||
Related Party Transaction | |||||
Operating lease renewal term | 5 years | ||||
Related Party Customer | |||||
Related Party Transaction | |||||
Net revenue from related party | $ 1,400 | $ 1,800 | |||
Notes receivable from related party | 1,400 | $ 1,400 | |||
Rehabilitation Services | |||||
Related Party Transaction | |||||
Net accounts receivable from related party | 30,100 | $ 28,900 | |||
Rehabilitation Services | |||||
Related Party Transaction | |||||
Net revenue from related party | 25,800 | 29,900 | |||
Reserves posted against note receivable | 55,000 | ||||
Notes receivable from related party | $ 56,300 | ||||
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% | ||||
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% | ||||
Number of facilities under lease and purchase option | facility | 15 | ||||
Number of LLCs affiliated with Next Healthcare | item | 15 | ||||
Welltower Inc | |||||
Related Party Transaction | |||||
Number of facilities under lease and purchase option | facility | 42 | ||||
Shares of the Company’s | 8.80% | ||||
Operating lease renewal term | 11 years | ||||
Options to renew | true | ||||
Annual rent escalators | 2.00% | ||||
Lease cost | $ 17,700 | $ 20,100 | |||
Welltower Inc | Class A Common Stock | |||||
Related Party Transaction | |||||
Voting power | 5.80% |
Other Income (Details)
Other Income (Details) $ in Thousands | Feb. 01, 2020facility | Mar. 31, 2020USD ($)facility | Mar. 31, 2019USD ($)facility | Dec. 31, 2019facility |
Gain on sale of owned assets | $ (74,580) | |||
Loss recognized for exit costs associated with divestiture of operations | 4,935 | $ 3,344 | ||
Gain on partial master lease termination | (15,187) | (20,261) | ||
Total other (income) loss | $ (84,832) | $ (16,917) | ||
Number of facilities sold | facility | 10 | |||
Number of facilities divested or closed | facility | 24 | 6 | ||
Leases terminated, number of facilities | facility | 9 | |||
Leases terminated, gain (loss) on lease termination | $ 4,500 | |||
New Generation Health, LLC | ||||
Leasehold rights transferred, number of facilities | facility | 13 | |||
Leasehold rights transferred, gain (loss) on lease termination | $ 10,700 | |||
Welltower Master Lease | ||||
Leases terminated, number of facilities | facility | 24 | |||
Leases terminated, gain (loss) on lease termination | $ 20,300 | |||
Skilled Nursing Facilities | ||||
Number of facilities sold | facility | 6 | 10 | 0 |
Asset Impairment Charges (Detai
Asset Impairment Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Asset Impairment Charges | ||
Impairment charges | $ 9.7 | $ 0 |
Assets Held for Sale (Details)
Assets Held for Sale (Details) $ in Thousands | Apr. 01, 2020USD ($) | Mar. 31, 2020USD ($)facility | Dec. 31, 2019USD ($)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 | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | |||
Assets and Liabilities of Disposal Group | |||
Prepaid expenses | $ 1,171 | ||
Property and equipment, net of accumulated depreciation of $2,201 and $3,640 at December 31, 2019 and December 31, 2018, respectively | $ 38,538 | 16,306 | |
Accumulated depreciation | 9,014 | 2,201 | |
Total Assets | 38,538 | 17,477 | |
Current installments of long-term debt | 728 | 368 | |
Long-term debt | 44,913 | 19,789 | |
Total Liabilities | $ 45,641 | $ 20,157 | |
Skilled Nursing Facilities | Disposal Group, Held-for-sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of facilities classified as held for sale | facility | 6 | ||
Sales consideration amount | $ 78,600 | ||
New Jersey and Maryland | Skilled Nursing Facilities | Disposal Group, Held-for-sale, Not Discontinued Operations | |||
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 | ||
Subsequent Event | New Jersey and Maryland | Skilled Nursing Facilities | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Sales consideration amount | $ 45,800 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Commitments and Contingencies | |||
Workers' Compensation discount rate (as a percentage) | 1.60% | ||
Potential effect of discounting on Workers Compensation reserve | $ 9.4 | $ 12 | |
Provision for general and professional liability | 27.7 | $ 21.4 | |
Reserve for general and professional liability | 399.7 | 392.8 | |
Provision for workers' compensation | 12.5 | $ 15.2 | |
Reserve for workers' compensation risks | 162.1 | 160.5 | |
Health insurance reserve | $ 14.5 | $ 15.1 |
Commitments and Contingencies -
Commitments and Contingencies - Lease Guarantees (Details) - New Generation Health, LLC $ in Millions | Feb. 01, 2020facility | Mar. 31, 2020USD ($)facility |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Leasehold rights transferred, number of facilities | 13 | |
Leasehold rights transferred, lease guarantee agreements, executed, number of facilities | 2 | 2 |
Leasehold rights transferred, lease guarantee agreements, executed, undiscounted cash rent obligations | $ | $ 29.4 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Recurring Measures (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets, Fair Value Disclosure [Abstract] | ||
Cash and cash equivalents | $ 23,502 | $ 12,097 |
Restricted cash and equivalents | 98,051 | 113,709 |
Restricted investments in marketable securities | 131,121 | 136,942 |
Assets, Fair Value Disclosure, Total | 252,674 | 262,748 |
Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash and cash equivalents | 23,502 | 12,097 |
Restricted cash and equivalents | 98,051 | 113,709 |
Restricted investments in marketable securities | 41,360 | 45,903 |
Assets, Fair Value Disclosure, Total | 162,913 | 171,709 |
Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Restricted investments in marketable securities | 89,761 | 91,039 |
Assets, Fair Value Disclosure, Total | $ 89,761 | $ 91,039 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Debt Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | $ 1,461,236 | $ 1,613,420 |
Asset based lending facilities | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 362,977 | 412,346 |
Term Loan | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 200,130 | 196,714 |
Real estate loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 230,669 | 265,700 |
HUD insured loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 44,876 | 117,117 |
Welltower Notes | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 110,952 | 116,952 |
Mortgages and other secured debt (recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 6,375 | 6,369 |
Mortgages and other secured debt (non-recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 505,257 | 498,222 |
Level 2 | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 1,461,236 | 1,613,420 |
Level 2 | Asset based lending facilities | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 362,977 | 412,346 |
Level 2 | Term Loan | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 200,130 | 196,714 |
Level 2 | Real estate loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 230,669 | 265,700 |
Level 2 | HUD insured loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 44,876 | 117,117 |
Level 2 | Welltower Notes | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 110,952 | 116,952 |
Level 2 | Mortgages and other secured debt (recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 6,375 | 6,369 |
Level 2 | Mortgages and other secured debt (non-recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | $ 505,257 | $ 498,222 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Nonrecurring Measures (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Non-recurring Fair Value Measures | ||
Finance lease right-of-use assets, net | $ 33,791 | $ 37,097 |
Finance lease right-of-use assets, net, Impairment charges | 2,600 | |
Operating lease right-of-use assets | 2,353,477 | 2,399,505 |
Fair Value, Measurements, Nonrecurring [Member] | ||
Non-recurring Fair Value Measures | ||
Property and equipment, net | 853,793 | 962,105 |
Property and equipment, Impairment Charges | 7,100 | |
Finance lease right-of-use assets, net | 33,791 | 37,097 |
Finance lease right-of-use assets, net, Impairment charges | 2,600 | |
Operating lease right-of-use assets | 2,353,477 | 2,399,505 |
Intangible assets, net | 86,136 | 87,446 |
Goodwill | $ 85,642 | $ 85,642 |
Subsequent Events - COVID-19 (D
Subsequent Events - COVID-19 (Details) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Apr. 30, 2020USD ($) | Mar. 31, 2020USD ($) | May 31, 2020 | May 27, 2020USD ($)facility | |
Subsequent Event [Line Items] | ||||
COVID-19 related Medicaid reimbursement relief | $ 6 | |||
Skilled nursing facility operating occupancy (as a percent) | 88.20% | |||
COVID-19 incremental operating expense | $ 7 | |||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Number of facilities, COVID-19, patients, residents, and employees, positive cases | facility | 187 | |||
Number of facilities | facility | 361 | |||
Number of facilities, COVID-19, positive cases, concentration percentage, New Jersey, Connecticut, Massachusetts, Pennsylvania, and Maryland (as a percent) | 84.00% | |||
Number of facilities, operating beds, concentration percentage, New Jersey, Connecticut, Massachusetts, Pennsylvania, and Maryland (as a percent) | 43.00% | |||
Skilled nursing facility operating occupancy (as a percent) | 81.90% | |||
COVID-19 incremental operating expense | $ 21 | |||
Coronavirus Aid, Relief, and Economic Security Act, advanced Medicare payment | 158 | |||
Coronavirus Aid, Relief, and Economic Security Act, relief grants | $ 180 | |||
Coronavirus Aid, Relief, and Economic Security Act, payroll tax deferral program | $ 90 | |||
COVID-19 state funding committed | $ 27 | |||
Subsequent Event | Forecast | ||||
Subsequent Event [Line Items] | ||||
Skilled nursing facility operating occupancy (as a percent) | 76.00% |
Subsequent Events - Divestiture
Subsequent Events - Divestiture of Non-Strategic Facilities (Details) $ in Thousands | May 15, 2020USD ($)facility | Apr. 20, 2020USD ($)facility | Apr. 01, 2020USD ($)facility | Feb. 26, 2020USD ($)facility | Feb. 01, 2020facility | Mar. 31, 2020USD ($)facility | Mar. 31, 2019facility | Dec. 31, 2019facility |
Subsequent Events | ||||||||
Number of facilities sold | 10 | |||||||
Number of facilities classified as held for sale | 1 | |||||||
Number of facilities divested or closed | 24 | 6 | ||||||
Loss on early extinguishment of debt | $ | $ (1,328) | |||||||
New Jersey and Maryland | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Net revenues | $ | $ 35,800 | |||||||
HUD insured loans | New Jersey and Maryland | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Repayments of loans | $ | 15,200 | |||||||
Mid Cap Real Estate Loans | ||||||||
Subsequent Events | ||||||||
Number of facilities divested or closed | 3 | |||||||
Mid Cap Real Estate Loans | New Jersey and Maryland | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Repayments of loans | $ | 7,500 | |||||||
Skilled Nursing Facilities | ||||||||
Subsequent Events | ||||||||
Number of facilities sold | 6 | 10 | 0 | |||||
Skilled Nursing Facilities | Maryland | ||||||||
Subsequent Events | ||||||||
Number of facilities sold | 1 | |||||||
Skilled Nursing Facilities | California | ||||||||
Subsequent Events | ||||||||
Number of facilities sold | 1 | |||||||
Sales price | $ | $ 20,800 | |||||||
Repayments of loans | $ | 20,500 | |||||||
Net revenues | $ | 14,000 | |||||||
Pre-tax net income (loss) | $ | $ (100) | |||||||
Skilled Nursing Facilities | HUD insured loans | ||||||||
Subsequent Events | ||||||||
Number of facilities sold | 6 | |||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | New Jersey and Maryland | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Gain (loss) recognized in disposal group | $ | $ 21,800 | |||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Skilled Nursing Facilities | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Number of facilities sold | 3 | |||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Skilled Nursing Facilities | New Jersey and Maryland | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Number of facilities sold | 3 | |||||||
Loss on early extinguishment of debt | $ | $ 1,400 | |||||||
Sales price | $ | $ 45,800 | |||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Skilled Nursing Facilities | New Jersey | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Number of facilities sold | 2 | |||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Skilled Nursing Facilities | Maryland | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Number of facilities sold | 1 | |||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Mid Cap Real Estate Loans | ||||||||
Subsequent Events | ||||||||
Number of facilities divested or closed | 2 | |||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Skilled Nursing Facilities | ||||||||
Subsequent Events | ||||||||
Number of facilities sold | 1 | |||||||
Number of facilities classified as held for sale | 6 | |||||||
Sales price | $ | $ 78,600 | |||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Skilled Nursing Facilities | New Jersey and Maryland | ||||||||
Subsequent Events | ||||||||
Number of facilities classified as held for sale | 3 | |||||||
Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | California | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Number of facilities divested or closed | 4 | |||||||
Net revenues | $ | $ 55,000 | |||||||
Pre-tax net income (loss) | $ | $ 500 | |||||||
Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | Skilled Nursing Facilities | Florida and Maryland | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Number of facilities divested or closed | 6 | |||||||
Net revenues | $ | $ 62,000 | |||||||
Pre-tax net income (loss) | $ | (2,300) | |||||||
Annual rent credit granted on termination | $ | $ 8,500 | |||||||
Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | Skilled Nursing Facilities | Florida | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Number of facilities divested or closed | 4 | |||||||
Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | Skilled Nursing Facilities | Maryland | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Number of facilities divested or closed | 2 | |||||||
Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | Skilled Nursing Facilities | Montana | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Number of facilities divested or closed | 2 | |||||||
Net revenues | $ | $ 18,800 | |||||||
Pre-tax net income (loss) | $ | 400 | |||||||
Annual rent credit granted on termination | $ | $ 1,100 |