Document and Entity Information
Document and Entity Information - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 06, 2020 | |
Document Information [Line Items] | ||
Entity Central Index Key | 0001351051 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-33459 | |
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 | Q3 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Listing, Par Value Per Share | $ 0.001 | |
Entity Common Stock, Shares Outstanding | 110,642,614 | |
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 | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 200,995 | $ 12,097 |
Restricted cash and equivalents | 45,437 | 63,101 |
Restricted investments in marketable securities | 39,682 | 31,855 |
Accounts receivable | 456,023 | 567,636 |
Prepaid expenses | 118,051 | 108,908 |
Other current assets | 37,225 | 44,079 |
Assets held for sale | 1,171 | |
Total current assets | 897,413 | 828,847 |
Property and equipment, net of accumulated depreciation of $422,824 and $431,361 at September 30, 2020 and December 31, 2019, respectively | 1,018,939 | 962,105 |
Finance lease right-of-use assets, net of accumulated amortization of $15,578 and $23,401 at September 30, 2020 and December 31, 2019, respectively | 28,635 | 37,097 |
Operating lease right-of-use assets | 1,817,603 | 2,399,505 |
Restricted cash and equivalents | 51,106 | 50,608 |
Restricted investments in marketable securities | 98,159 | 105,087 |
Other long-term assets | 120,098 | 85,725 |
Deferred income taxes | 1,946 | 3,772 |
Identifiable intangible assets, net of accumulated amortization of $80,126 and $76,243 at September 30, 2020 and December 31, 2019, respectively | 83,530 | 87,446 |
Goodwill | 85,642 | 85,642 |
Assets held for sale | 11,554 | 16,306 |
Total assets | 4,214,625 | 4,662,140 |
Current liabilities: | ||
Current portion of long-term debt | 10,693 | 162,426 |
Current portion of finance lease obligations | 2,958 | 2,839 |
Current portion of operating lease obligations | 126,974 | 140,887 |
Accounts payable | 190,264 | 238,384 |
Accrued expenses | 324,354 | 226,092 |
Accrued compensation | 145,439 | 153,698 |
Self-insurance reserves | 149,793 | 146,476 |
Current portion of liabilities held for sale | 400 | 368 |
Total current liabilities | 950,875 | 1,071,170 |
Long-term liabilities: | ||
Long-term debt | 1,543,698 | 1,450,994 |
Finance lease obligations | 35,577 | 39,335 |
Operating lease obligations | 2,199,826 | 2,681,403 |
Deferred income taxes | 5,071 | 5,245 |
Self-insurance reserves | 405,955 | 406,864 |
Liabilities held for sale | 18,373 | 19,789 |
Other long-term liabilities | 200,165 | 69,905 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Additional paid-in-capital | 243,697 | 248,594 |
Accumulated deficit | (1,061,586) | (1,010,296) |
Accumulated other comprehensive income | 1,503 | 602 |
Total stockholders' deficit before noncontrolling interests | (816,219) | (760,935) |
Noncontrolling interests | (328,696) | (321,630) |
Total stockholders' deficit | (1,144,915) | (1,082,565) |
Total liabilities and stockholders' deficit | 4,214,625 | 4,662,140 |
Class A Common Stock | ||
Stockholders' deficit: | ||
Common stock | 111 | 108 |
Class B Common Stock | ||
Stockholders' deficit: | ||
Common stock | 1 | 1 |
Class C Common Stock | ||
Stockholders' deficit: | ||
Common stock | $ 55 | $ 56 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Other assets: | ||
Accumulated depreciation on property and equipment | $ 422,824 | $ 431,361 |
Accumulated amortization on finance lease ROU asset | 15,578 | 23,401 |
Accumulated amortization on intangible assets | $ 80,126 | $ 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) | 110,642,614 | 107,888,854 |
Common stock, shares, outstanding (in shares) | 110,584,200 | 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) | 55,409,742 | 56,172,193 |
Common stock, shares, outstanding (in shares) | 55,409,742 | 56,172,193 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
Net revenues | $ 938,653 | $ 1,123,705 | $ 2,987,162 | $ 3,430,397 | ||||
Salaries, wages and benefits | 535,009 | 620,493 | 1,732,486 | 1,889,062 | ||||
Other operating expenses | 309,664 | 339,441 | 967,419 | 1,014,507 | ||||
General and administrative costs | 45,172 | 35,930 | 124,558 | 107,024 | ||||
Lease expense | 86,247 | 100,018 | 280,662 | 288,665 | ||||
Depreciation and amortization expense | 24,373 | 34,932 | 84,177 | 101,395 | ||||
Interest expense | 33,918 | 37,099 | 102,065 | 141,590 | ||||
Loss on early extinguishment of debt | 1,101 | 2,460 | 6,561 | 2,436 | ||||
Investment income | (957) | (2,071) | (3,074) | (6,078) | ||||
Other (income) loss | (53,507) | (131,811) | (182,439) | (172,141) | ||||
Transaction costs | 15,561 | 12,941 | 26,696 | 23,025 | ||||
Long-lived asset impairments | 72,400 | 16,037 | 159,200 | 16,937 | ||||
Federal stimulus - COVID-19 other income | (31,212) | (216,713) | ||||||
Equity in net loss (income) of unconsolidated affiliates | (3,362) | (93) | (6,811) | (178) | ||||
(Loss) income before income tax expense (benefit) | (95,754) | 58,329 | (87,625) | 24,153 | ||||
Income tax expense (benefit) | 176 | (569) | (1,060) | (680) | ||||
Net (loss) income | (95,930) | $ (29,316) | $ 38,681 | 58,898 | $ (8,983) | $ (25,082) | (86,565) | 24,833 |
Less: Net loss (income) attributable to noncontrolling interests | 33,137 | (12,801) | 35,275 | 1,182 | ||||
Net (loss) income attributable to Genesis Healthcare, Inc. | $ (62,793) | $ 46,097 | $ (51,290) | $ 26,015 | ||||
Basic: | ||||||||
Weighted-average shares outstanding for basic net (loss) income per share (in shares) | 113,145 | 109,123 | 111,372 | 106,581 | ||||
Basic net (loss) income per common share attributable to Genesis Healthcare, Inc. (in dollars per share) | $ (0.55) | $ 0.42 | $ (0.46) | $ 0.24 | ||||
Diluted: | ||||||||
Weighted-average shares outstanding for diluted net (loss) income per share (in shares) | 113,145 | 166,002 | 111,372 | 164,583 | ||||
Diluted net (loss) income per common share attributable to Genesis Healthcare, Inc. (in dollars per share) | $ (0.55) | $ 0.40 | $ (0.46) | $ 0.21 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | ||||
Net (loss) income | $ (95,930) | $ 58,898 | $ (86,565) | $ 24,833 |
Net unrealized (loss) gain on marketable securities, net of tax | (149) | 98 | 1,331 | 1,216 |
Comprehensive income (loss) | (96,079) | 58,996 | (85,234) | 26,049 |
Less: comprehensive loss (income) attributable to noncontrolling interests | 33,198 | (12,830) | 34,845 | 838 |
Comprehensive (loss) income attributable to Genesis Healthcare, Inc. | $ (62,881) | $ 46,166 | $ (50,389) | $ 26,887 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) shares in Thousands, $ in Thousands | Common StockClass A Common Stock | Common StockClass B Common Stock | Common StockClass C Common Stock | Additional Paid-In Capital | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | Accumulated Other Comprehensive Income | Stockholders' DeficitCumulative Effect, Period of Adoption, Adjustment | Stockholders' Deficit | Noncontrolling InterestsCumulative Effect, Period of Adoption, Adjustment | Noncontrolling Interests | Cumulative Effect, Period of Adoption, Adjustment | Total |
Balance, beginning of period at Dec. 31, 2018 | $ 101 | $ 1 | $ 60 | $ 270,408 | $ 584,913 | $ (1,609,828) | $ (262) | $ 584,913 | $ (1,339,520) | $ 340,129 | $ (705,346) | $ 925,042 | $ (2,044,866) |
Balance, beginning of period (in shares) at Dec. 31, 2018 | 101,236 | 744 | 59,701 | ||||||||||
Increase (decrease) in stockholders' deficit | |||||||||||||
Net (loss) income | (15,263) | (15,263) | (9,819) | (25,082) | |||||||||
Net unrealized gain (loss) on marketable securities, net of tax | 397 | 397 | 99 | 496 | |||||||||
Share-based compensation | 2,087 | 2,087 | 2,087 | ||||||||||
Issuance of common stock, shares | 100 | ||||||||||||
Conversion of common stock among classes | $ 3 | $ (3) | (18,175) | (18,175) | 18,175 | ||||||||
Conversion of common stock among classes (in shares) | 3,081 | (3,081) | |||||||||||
Distributions to noncontrolling interests | 64 | 64 | (1,202) | (1,138) | |||||||||
Contributions from noncontrolling interests | 18,500 | 18,500 | |||||||||||
Balance, end of period at Mar. 31, 2019 | $ 104 | $ 1 | $ 57 | 254,384 | (1,040,178) | 135 | (785,497) | (339,464) | (1,124,961) | ||||
Balance, end of period (in shares) at Mar. 31, 2019 | 104,417 | 744 | 56,620 | ||||||||||
Balance, beginning of period at Dec. 31, 2018 | $ 101 | $ 1 | $ 60 | 270,408 | $ 584,913 | (1,609,828) | (262) | $ 584,913 | (1,339,520) | $ 340,129 | (705,346) | $ 925,042 | (2,044,866) |
Balance, beginning of period (in shares) at Dec. 31, 2018 | 101,236 | 744 | 59,701 | ||||||||||
Increase (decrease) in stockholders' deficit | |||||||||||||
Net (loss) income | 24,833 | ||||||||||||
Net unrealized gain (loss) on marketable securities, net of tax | 1,216 | ||||||||||||
Balance, end of period at Sep. 30, 2019 | $ 108 | $ 1 | $ 56 | 249,063 | (998,900) | 610 | (749,062) | (316,161) | (1,065,223) | ||||
Balance, end of period (in shares) at Sep. 30, 2019 | 107,534 | 744 | 56,527 | ||||||||||
Balance, beginning of period at Mar. 31, 2019 | $ 104 | $ 1 | $ 57 | 254,384 | (1,040,178) | 135 | (785,497) | (339,464) | (1,124,961) | ||||
Balance, beginning of period (in shares) at Mar. 31, 2019 | 104,417 | 744 | 56,620 | ||||||||||
Increase (decrease) in stockholders' deficit | |||||||||||||
Net (loss) income | (4,819) | (4,819) | (4,164) | (8,983) | |||||||||
Net unrealized gain (loss) on marketable securities, net of tax | 406 | 406 | 216 | 622 | |||||||||
Share-based compensation | 1,748 | 1,748 | 1,748 | ||||||||||
Issuance of common stock | $ 3 | (3) | |||||||||||
Issuance of common stock, shares | 2,996 | ||||||||||||
Conversion of common stock among classes | (7,842) | (7,842) | 7,842 | ||||||||||
Distributions to noncontrolling interests | (1,405) | (1,405) | |||||||||||
Balance, end of period at Jun. 30, 2019 | $ 107 | $ 1 | $ 57 | 248,287 | (1,044,997) | 541 | (796,004) | (336,975) | (1,132,979) | ||||
Balance, end of period (in shares) at Jun. 30, 2019 | 107,413 | 744 | 56,620 | ||||||||||
Increase (decrease) in stockholders' deficit | |||||||||||||
Net (loss) income | 46,097 | 46,097 | 12,801 | 58,898 | |||||||||
Net unrealized gain (loss) on marketable securities, net of tax | 69 | 69 | 29 | 98 | |||||||||
Share-based compensation | 1,878 | 1,878 | 1,878 | ||||||||||
Issuance of common stock, shares | 28 | ||||||||||||
Conversion of common stock among classes | $ 1 | $ (1) | (1,081) | (1,081) | 1,081 | ||||||||
Conversion of common stock among classes (in shares) | 93 | (93) | |||||||||||
Distributions to noncontrolling interests | (21) | (21) | (1,628) | (1,649) | |||||||||
Contributions from noncontrolling interests | 8,531 | 8,531 | |||||||||||
Balance, end of period at Sep. 30, 2019 | $ 108 | $ 1 | $ 56 | 249,063 | (998,900) | 610 | (749,062) | (316,161) | (1,065,223) | ||||
Balance, end of period (in shares) at Sep. 30, 2019 | 107,534 | 744 | 56,527 | ||||||||||
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 (loss) income | 33,508 | 33,508 | 5,173 | 38,681 | |||||||||
Net unrealized gain (loss) 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 | ||||||||||
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 (loss) income | (86,565) | ||||||||||||
Net unrealized gain (loss) on marketable securities, net of tax | 1,331 | ||||||||||||
Balance, end of period at Sep. 30, 2020 | $ 111 | $ 1 | $ 55 | 243,697 | (1,061,586) | 1,503 | (816,219) | (328,696) | (1,144,915) | ||||
Balance, end of period (in shares) at Sep. 30, 2020 | 110,643 | 744 | 55,410 | ||||||||||
Balance, beginning of period at Mar. 31, 2020 | $ 108 | $ 1 | $ 56 | 247,876 | (976,788) | 1,243 | (727,504) | (314,631) | (1,042,135) | ||||
Balance, beginning of period (in shares) at Mar. 31, 2020 | 108,164 | 744 | 55,902 | ||||||||||
Increase (decrease) in stockholders' deficit | |||||||||||||
Net (loss) income | (22,005) | (22,005) | (7,311) | (29,316) | |||||||||
Net unrealized gain (loss) on marketable securities, net of tax | 348 | 348 | 154 | 502 | |||||||||
Share-based compensation | 1,831 | 1,831 | 1,831 | ||||||||||
Issuance of common stock | $ 2 | (2) | |||||||||||
Issuance of common stock, shares | 1,928 | ||||||||||||
Conversion of common stock among classes | $ 1 | $ (1) | (7,597) | (7,597) | 7,597 | ||||||||
Conversion of common stock among classes (in shares) | 492 | (492) | |||||||||||
Distributions to noncontrolling interests | (1,163) | (1,163) | |||||||||||
Balance, end of period at Jun. 30, 2020 | $ 111 | $ 1 | $ 55 | 242,108 | (998,793) | 1,591 | (754,927) | (315,354) | (1,070,281) | ||||
Balance, end of period (in shares) at Jun. 30, 2020 | 110,584 | 744 | 55,410 | ||||||||||
Increase (decrease) in stockholders' deficit | |||||||||||||
Net (loss) income | (62,793) | (62,793) | (33,137) | (95,930) | |||||||||
Net unrealized gain (loss) on marketable securities, net of tax | (88) | (88) | (61) | (149) | |||||||||
Share-based compensation | 1,600 | 1,600 | 1,600 | ||||||||||
Issuance of common stock, shares | 59 | ||||||||||||
Conversion of common stock among classes | (11) | (11) | 11 | ||||||||||
Distributions to noncontrolling interests | (1,335) | (1,335) | |||||||||||
Contributions from noncontrolling interests | 21,180 | 21,180 | |||||||||||
Balance, end of period at Sep. 30, 2020 | $ 111 | $ 1 | $ 55 | $ 243,697 | $ (1,061,586) | $ 1,503 | $ (816,219) | $ (328,696) | $ (1,144,915) | ||||
Balance, end of period (in shares) at Sep. 30, 2020 | 110,643 | 744 | 55,410 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | ||
Net (loss) income | $ (86,565) | $ 24,833 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Non-cash interest and leasing arrangements, net | 18,348 | 21,194 |
Other non-cash gain, net | (182,439) | (172,141) |
Share based compensation | 5,325 | 5,713 |
Depreciation and amortization expense | 84,177 | 101,395 |
Reduction in the carrying amount of operating lease right-of-use assets | 88,219 | 86,250 |
Recovery for losses on accounts receivable | (81) | (1,005) |
Equity in net income of unconsolidated affiliates | (6,811) | (178) |
Benefit for deferred taxes | 1,298 | (1,774) |
Loss (income) on early extinguishment of debt | 1,942 | (263) |
Long-lived asset impairments | 159,200 | 16,937 |
Changes in assets and liabilities: | ||
Accounts receivable | 112,164 | 64,614 |
Accounts payable and other accrued expenses and other | 11,845 | (63,186) |
Medicare advance payments | 155,824 | |
Operating lease obligations | (81,288) | (66,631) |
Net cash provided by operating activities | 281,158 | 15,758 |
Cash flows from investing activities: | ||
Capital expenditures | (42,040) | (47,046) |
Purchases of marketable securities | (54,490) | (47,896) |
Proceeds on maturity or sale of marketable securities | 55,276 | 56,725 |
Purchases of assets | (207,313) | (591,660) |
Sales of assets | 218,636 | 237,632 |
Restricted deposits | 12,910 | |
Restricted deposits | (1,224) | |
Investments in joint venture | (16,936) | |
Loan provided to joint venture | (9,000) | |
Other, net | (2,617) | 435 |
Net cash used in investing activities | (45,574) | (393,034) |
Cash flows from financing activities: | ||
Borrowings under revolving credit facilities | 3,531,261 | 3,522,000 |
Repayments under revolving credit facilities | (3,667,222) | (3,518,465) |
Proceeds from issuance of long-term debt | 227,860 | 480,906 |
Repayment of long-term debt | (167,489) | (133,913) |
Repayment of finance lease obligations | (2,177) | (1,973) |
Debt issuance costs | (3,644) | (8,325) |
Contributions from noncontrolling interests | 21,180 | 27,031 |
Distributions to noncontrolling interests and stockholders | (3,621) | (4,192) |
Net cash (used in) provided by financing activities | (63,852) | 363,069 |
Net increase (decrease) in cash, cash equivalents and restricted cash and equivalents | 171,732 | (14,207) |
Cash, cash equivalents and restricted cash and equivalents: | ||
Beginning of period | 125,806 | 142,276 |
End of period | 297,538 | 128,069 |
Supplemental cash flow information: | ||
Interest paid | 80,352 | 118,757 |
Net taxes paid | 2,469 | 2,672 |
Federal stimulus - COVID-19 other income | 216,713 | |
Non-cash investing and financing activities: | ||
Finance lease obligations, net write-down due to lease activity | (1,462) | |
Finance lease obligations, net write-down due to lease activity under ASC 840 | (930,582) | |
Assets subject to finance lease obligations, net write-down due to lease activity | (492) | |
Assets subject to finance lease obligations, net write-down due to lease activity, under ASC 840 | (1,131,352) | |
Operating lease obligations, net (write-down) gross-up due to lease activity | (414,201) | 2,901,799 |
Assets subject to operating leases, net write-down (gross-up) due to lease activity | $ 346,964 | (2,514,414) |
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 | 9 Months Ended |
Sep. 30, 2020 | |
General Information | |
General Information | (1) General Informatio n 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 September 30, 2020, the Company states. Revenues of the Company’s owned, leased and otherwise consolidated inpatient businesses constitute approximately 86% of its revenues. The Company provides a range of rehabilitation therapy services, including speech pathology, physical therapy, occupational therapy and respiratory therapy. These services are provided by rehabilitation therapists and assistants employed or contracted at substantially all of the centers operated by the Company, as well as by contract to healthcare facilities operated by others. The Company has expanded its delivery model for providing rehabilitation services to community-based and at-home settings, as well as internationally in China. After the elimination of intercompany revenues, the rehabilitation therapy services business constitutes approximately 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 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 subsidiaries. All 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 (loss) income attributable to Genesis Healthcare, Inc. and net (loss) income 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 U.S. Securities and Exchange Commission (SEC) on Form 10-K on March 16, 2020. Going Concern Considerations On March 11, 2020, the World Health Organization 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. 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 protocols 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 is having and will likely continue to have a material and adverse effect on the Company’s operations and supply chains, resulting in a reduction in its operating occupancy and related revenues, and an increase in its expenditures. The Company performed an assessment to determine whether there are conditions or events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date the financial statements are issued. Initially, this assessment does not consider the potential mitigating effect of management’s plans that have not been fully implemented. When substantial doubt exists, management assesses the mitigating effect of its plans to determine if it is probable that (1) the plans will be effectively implemented within one year after the date the financial statements are issued, and (2) when implemented, the plans will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In completing its going concern assessment, the Company considered the uncertainties around the impact of COVID-19 on its future results of operations as well as its current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s indebtedness and other conditional and unconditional obligations due within 12 months following the date its financial statements were issued. Without giving effect to the prospect, timing and adequacy of future governmental funding support and other mitigating plans, many of which are beyond the Company’s control, it is unlikely that the Company will be able to generate sufficient cash flows to meet its required financial obligations, including its rent and debt obligations, and maintain compliance with financial covenants. The existence of these conditions raises substantial doubt about the Company’s ability to continue as a going concern for the twelve-month period following the date the financial statements are issued. In response to COVID-19, and other conditions that raise substantial doubt about the Company’s ability to continue as a going concern, the Company has taken the following measures: ● The Company applied for and received government-sponsored financial relief related to the pandemic; ● The Company is utilizing the Coronavirus Aid, Relief, and Economic Security Act of 2020 (CARES Act) payroll tax deferral program to delay payment of a portion of payroll taxes incurred through December 2020, with 50% to be repaid in December 2021 and the remaining 50% to be repaid in December 2022; ● While it vigorously advocates, for itself and the skilled nursing industry, regarding the need for additional government-sponsored funding, the Company continues to explore and to take advantage of existing government-sponsored funding programs implemented to support businesses impacted by COVID-19; ● The Company continues to seek and implement measures to adapt its operational model to function for the long-term in a COVID-19 environment; ● The Company has pursued, and will continue to pursue, creative and accretive opportunities to sell assets and enter into joint venture structures in order to provide liquidity; and ● The Company is exploring and evaluating a number of strategic and other alternatives to manage and to improve its liquidity position, in order to address the maturity of material indebtedness and other obligations over the twelve-month period following the date the financial statements are issued. These measures and other plans and initiatives are needed to provide the Company with adequate liquidity to meet its obligations for at least the twelve-month period following the date its financial statements are issued. However, such plans and initiatives are dependent on factors that are beyond the Company’s control or may not be available on terms acceptable to the Company, or at all. Accordingly, management determined it could not be certain that the plans and initiatives would be effectively implemented within one year after the date the financial statements are issued. Further, even if the Company receives additional funding support from government sources and/or is able to execute successfully all of these plans and initiatives, given the unpredictable nature of, and the operating challenges presented by, the COVID-19 virus, the Company’s operating plans and resulting cash flows along with its cash and cash equivalents and other sources of liquidity may not be sufficient to fund operations for the twelve-month period following the date the financial statements are issued. Such events or circumstances could force the Company to seek reorganization under the U.S. Bankruptcy Code. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date the financial statements are issued. As such, the accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and their carrying amounts, or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern. 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. |
Certain Significant Risks and U
Certain Significant Risks and Uncertainties | 9 Months Ended |
Sep. 30, 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 materially and adversely to 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. For a more detailed discussion of the impact of COVID-19 on the Company’s operations, net revenues, operating expenses and liquidity, see Note 3 – “ Significant Transactions and 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 81% of its revenue from Medicare and various state Medicaid programs. The following table depicts the Company’s inpatient services segment revenue by source for the three and nine months ended September 30, 2020 and 2019: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Medicare 20 % 19 % 20 % 20 % Medicaid 61 % 59 % 61 % 58 % Insurance 10 % 12 % 10 % 12 % Private 7 % 8 % 7 % 8 % Other 2 % 2 % 2 % 2 % Total 100 % 100 % 100 % 100 % The sources and amounts of the Company’s revenues are determined by a number of factors, including licensed bed capacity and occupancy rates of inpatient facilities, the mix of patients and the rates of reimbursement among payors. Likewise, payment for ancillary medical services, including services provided by the Company’s rehabilitation therapy services business, varies based upon the type of payor and payment methodologies. Changes in the case mix of the patients as well as payor mix among Medicare, Medicaid and private pay can significantly affect the Company’s profitability. It is difficult 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. 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 businesses 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 150 distinct customers, many being chain operators with more than one location. One of the Company’s customers, a related party, comprises $31.0 million, or approximately 42%, of the gross outstanding contract receivables in the rehabilitation services business at September 30, 2020. “Related Party Transactions.” 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” 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 a significant adverse impact on the Company’s financial position. Although the Company is in compliance with the covenants required by its material debt and material lease agreements at September 30, 2020, 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 November 9, 2021. Without giving effect to the prospect of timely and adequate future governmental funding support and other mitigating plans, many of which are beyond the Company’s control, it is unlikely that the Company will be able to generate sufficient cash flows to timely meet its required financial obligations, including its rent obligations, its debt service obligations and other obligations due to third parties. The existence of these conditions raises substantial doubt about the Company’s ability to continue as a going concern for the twelve-month period following the date the financial statements are issued. 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 government-sponsored financial support in response to the COVID-19 pandemic as well as possible waivers, deferrals and/or adjustments of debt and lease terms. Due to continuing changes in the healthcare industry, as well as the uncertainty with respect to changing referral patterns, patient mix, and reimbursement rates, it is possible that future operating performance may not generate sufficient operating results to maintain compliance with its quarterly debt and lease covenant requirements. There can be no assurance that the confluence of these and other factors will not impede the Company’s ability to meet covenants required by its debt and lease agreements in the future. |
Significant Transactions and Ev
Significant Transactions and Events | 9 Months Ended |
Sep. 30, 2020 | |
Significant Transactions and Events | |
Significant Transactions and Events | (3) Significant Transactions and Events COVID-19 As discussed in Note 1 – “ General Information – Going Concern Considerations,” the Company’s operations and supply chains have been materially and adversely affected by the COVID-19 pandemic, resulting in a reduction in its operating occupancy and related revenues, 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 September 30, 2020, including the impact of emergency legislation, temporary changes to regulations and reimbursements 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, 266 of the Company’s 360 facilities have experienced one or more positive cases of COVID-19 among patients and residents. Over 70 % of the patient and resident positive COVID-19 cases in its facilities have occurred 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 45% of its total operating beds. The Company’s occupancy decreased in the early months of the pandemic following the efforts by referring hospitals to cancel or reschedule elective procedures in anticipation of an increasing number of COVID-19 cases in their communities. As the pandemic progressed, occupancy was further decreased by, among other things, implementation of both self-imposed and state or local admission holds in facilities having exposure to positive cases of COVID-19 among patients, residents and employees. These self-imposed, and sometimes mandatory, 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’s net revenues for the three and nine months ended September 30, 2020 were materially and adversely impacted by a significant decline in occupancy as a result of COVID-19. The Company’s skilled nursing facility operating occupancy decreased from 88.2% for the three months ended March 31, 2020 to 75.4% for the three months ended September 30, 2020. The revenue lost from the decline in occupancy was partially offset by incremental state sponsored funding programs, changes in payor mix, and the enactment of COVID-19 relief programs, as discussed below. See Regulatory and Reimbursement Relief . After considering a commensurate reduction in related and direct operating expenses, the Company estimates lost revenue caused by COVID-19 reduced earnings by approximately $71.0 million and $145.0 million for the three and nine months ended September 30, 2020, respectively. Operating Expenses The Company’s operating expenses for the three and nine months ended September 30, 2020 were materially and adversely impacted due to increases in 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 and nine months ended September 30, 2020, the Company estimates it incurred approximately $52.0 million and $205.0 million, respectively, of incremental operating expenses in response to the pandemic. Increases in cost primarily stemmed from higher 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, workers compensation, testing, medical equipment, 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. Additionally, the future cost of securing adequate insurance coverages through annual renewals may be significantly higher than existing coverages, and the same level of coverage may no longer be available or affordable. This includes workers compensation and general and professional liability coverages, which are requirements in most states in which we operate. 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 incremental costs can be reduced or 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 to preserve its liquidity in response to the pandemic. During the three and nine months ended September 30, 2020, the Company’s usual sources of liquidity have been supplemented by grants and advanced Medicare payments under programs expanded or created under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Specifically, in the second quarter of 2020, the Company applied for and received $156.8 million of advanced Medicare payments and from April through September 2020, received approximately $254.0 million of relief grants and other forms of federal relief, such as the temporary suspension of Medicare sequestration. 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 $90.0 million of cash representing the employer portion of payroll taxes estimated to be incurred between March 27, 2020 and December 31, 2020, of which approximately $65.0 million has been realized through September 30, 2020. The advance Medicare payments of $156.8 million, which are also interest free, are expected to be recouped between April 2021 and February 2022, 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 $85.0 million, of which approximately $76.0 million has been recognized in net revenue through September 30, 2020. The Company continues to seek opportunities to enhance and to 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, timely or adequate to offset the lost revenue and escalating operating expenses as a result of the pandemic. See Note 1 – “ General Information – Going Concern Considerations.” Regulatory and Reimbursement Relief On March 18, 2020, the Families First Coronavirus Response Act was enacted, which provided a temporary 6.2% increase to each qualifying state’s Medicaid Federal Medical Assistance Percentage (FMAP) effective January 1, 2020. The temporary FMAP increase will extend through the last day of the calendar quarter in which the COVID-19 public health emergency declared by the U.S. Department of Health and Human Services (HHS), including any extensions or termination, which currently expires January 20, 2021. As part of the requirements for receiving the temporary FMAP increase, states must cover testing services and treatments for COVID-19 and may not impose deductibles, copayments, coinsurance or other cost sharing charges for any quarter in which the temporarily increased FMAP is claimed. Further, a number of additional states in which the Company operates have implemented incremental FMAP related reimbursement provisions and other forms of support to assist providers. For the three and nine months ended September 30, 2020, the Company recognized as net revenues in the consolidated statements of operations approximately $30.0 million and $76.0 million, respectively, of additional FMAP reimbursement relief. The Company cannot predict the extent to which further FMAP funding programs will be implemented in the states in which it operates. In further response to the pandemic, on March 27, 2020, the President signed into law the bipartisan CARES Act, which authorized the cash distribution of relief funds to reimburse healthcare providers for health care related expenses or lost revenues that are attributable to coronavirus. Nursing facility operators participating in Medicare and Medicaid may be eligible to receive compensation for costs incurred in the course of providing medical services, such as those related to obtaining personal protective equipment, COVID-19 related testing supplies, and increased staffing or training, provided that such costs are not compensated by another source. The secretary of HHS has broad authority and discretion to determine payment eligibility and the amount of such payments. The Company was impacted by certain provisions of the CARES Act, as summarized below. ● Temporary suspension of certain patient coverage criteria and documentation and care requirements . The CARES Act and a series of temporary waivers and guidance issued by the Centers for Medicare and Medicaid Services (CMS) suspend various Medicare patient coverage criteria as well as certain documentation and care requirements. These accommodations are intended to ensure patients have access to care notwithstanding the burdens placed on healthcare providers due to the COVID-19 pandemic. ● Relief Funds. The CARES Act authorized HHS to distribute relief fund grants to healthcare providers to support healthcare-related expenses or lost revenue attributable to COVID-19. HHS has made several rounds of distributions to providers based upon a variety of factors and providers have been able to apply for additional funding. To retain the funds, providers must submit an attestation accepting certain terms and conditions. During April 2020, the Company first began receiving relief grants from CARES Act funds administered by HHS. Through September 30, 2020, the Company has received $190.9 million in these initial relief grants, the majority of which are related to skilled nursing care provided through the Company’s Inpatient Services segment. On July 22, 2020, President Trump announced an additional $5 billion relief fund to be used to protect residents of long term care facilities and nursing homes from the impact of COVID-19. The $5 billion relief fund included: o Approximately $2.5 billion in payments to be used primarily to support increased testing and meet staffing and personal protective equipment needs. During the third quarter of 2020, the Company received $57.9 million of relief grants under the program. o Five subsequent distributions as part of the Quality Incentive Payments Program (QIP). In order to qualify for payments under QIP, a facility must have an active state certification as a nursing home or skilled nursing facility and receive reimbursement from CMS. HHS will administer quality checks on nursing home certification status to identify and remove facilities that have a terminated, expired, or revoked certification or enrollment. Facilities must also report to at least one of three data sources that will be used to establish eligibility and collect necessary provider data to inform payment. The QIP Program is scheduled to be divided into five performance periods (September, October, November, December 2020 and the last period will be for the combined four months of September 2020 – December 2020). Currently, it is anticipated that the payment amounts designated for each of these five periods may vary, however the total payments are expected to equal $2 billion. All nursing homes or skilled nursing facilities meeting the previously noted qualifications will be eligible for each of the performance periods. o $250 million of the funds is to be allocated for distribution to “COVID only” facilities. o $250 million of the funds will be part of a program for providers that participate in approved training programs to better enable nursing home employees to administer COVID-19-related safety practices. The Company recognizes relief funds as income once there is reasonable assurance that the applicable terms and conditions required to retain the funds have been met. During the three and nine months ended September 30, 2020, the Company recognized $31.2 million and $216.7 million, respectively, of aggregate relief funds within the “Federal stimulus – COVID-19 other income” caption in the consolidated statements of operations. The Company has recorded On June 9, 2020 as part of its ongoing efforts to provide financial relief to healthcare providers impacted by COVID-19, HHS announced the Phase 2 general distribution to Medicaid, Medicaid managed care, Children's Health Insurance Program (CHIP) and dental providers. HHS anticipates distributing approximately $15 billion to eligible providers that participate in state Medicaid and CHIP programs that did not receive a payment from the Provider Relief Fund General Allocation (Phase 1). Eligible applicants will receive 2% of Gross Revenues from Patient Care for calendar years 2017, 2018 or 2019 as selected by applicant. The Company has submitted applications for its assisted living facilities that meet the eligibility criteria. ● Medicare Accelerated and Advanced Payment Program. During the second quarter of 2020, the Company applied for and received $156.8 million of interest free advanced Medicare payments. These payments will be subsequently recouped over time as revenue is recognized for claims submitted for services provided to Medicare patients. In October 2020, CMS extended the recoupment period to begin one year from the date the advanced payments were issued. The Company’s recoupment period for the advanced payments is expected to be from April 2021 to February 2022. The Company has reported advanced payments of $82.4 million and $73.4 million within accrued expenses and other long-term liabilities, respectively, in the consolidated balance sheet as of September 30, 2020. ● Payroll Tax Deferral . Under the CARES Act, the Company has elected to defer payment, on an interest free basis, of the employer portion of social security payroll taxes incurred from March 27, 2020 to December 31, 2020. One-half of such deferral amount will become due on each of December 31, 2021 and December 31, 2022. The Company has presented the balance of deferred payroll taxes, $64.7 million, within other long-term liabilities in the consolidated balance sheet as of September 30, 2020. ● Temporary Suspension of Medicare Sequestration . The Budget Control Act of 2011 requires a mandatory, across the board reduction in federal spending, called a sequestration. Medicare fee for service claims with dates of service or dates of discharge on or after April 1, 2013 incur a 2.0% reduction in Medicare payments. All Medicare rate payments and settlements have incurred this mandatory reduction and it will continue to remain in place through at least 2023, unless Congress takes further action. In response to COVID-19, the CARES Act temporarily suspended the automatic 2.0% reduction of Medicare claim reimbursements for the period of May 1, 2020 through December 31, 2020. During the three and nine months ended September 30, 2020, the suspension of sequestration resulted in net revenues of approximately $3.1 million and $5.2 million, respectively. ● Employee Retention Tax Credit. The employer payroll tax credit provisions of the CARES Act grant eligible companies a credit against applicable payroll taxes for each calendar quarter in an amount equal to 50% of qualified wages with a maximum credit of $5,000 per employee. The refundable tax credit is available to employers that fully or partially suspend operations during any calendar quarter in 2020 due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings due to COVID-19. Qualified employees are those who are not providing services as a result of such orders of a government authority. The impact of the employee retention tax credit program was not material for the three and nine months ended September 30, 2020. 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 facilities previously leased from Welltower and Second Spring Healthcare Investments (Second Spring). As a result of the January 10, 2020 transaction, the Company will receive an annual rent credit of million as a result of the lease termination. The Vantage Point Partnership acquired this skilled nursing facility for a purchase price of million. The consolidation of this additional skilled nursing facility primarily resulted in property and equipment of million with the balance of the purchase price settled primarily with proceeds held in escrow from the September 12, 2019 closing. The Company operates all NewGen Partnership On February 1, 2020, the Company transitioned operational responsibility for 19 facilities in the states of California, Washington and Nevada to a partnership with New Generation Health, LLC (the NewGen Partnership). 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 million. The Company recorded a gain on sale of assets and transition of leased facilities of million. Further, on May 15, 2020, the Company transitioned operational responsibility for additional leased facilities in the state of California to the NewGen Partnership. The million. Concurrent with these transactions, 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. The Company does not hold a controlling financial interest in the NewGen Partnership. As such, the Company has applied the equity method of accounting for its Cascade Partnership On July 2, 2020, the Company sold one facility to an affiliate of Cascade Capital Group, LLC (Cascade) for $26.1 million, using proceeds from the sale to retire U.S. Department of Housing and Urban Development (HUD) financed debt of $10.5 million, pay aggregate prepayment penalties and other closing costs of $1.0 million, and partially fund its investment in a partnership with Cascade (the Cascade Partnership). Cascade also acquired eight facilities that were operated by the Company under a master lease agreement with Second Spring. The Company continues to operate all nine of these facilities subject to a new master lease agreement with affiliates of Cascade. The master lease agreement contains an initial term of 10 years with one five-year renewal option and base rent of $20.7 million with no rent escalators for the first five years and annual rent escalators of 2.5% thereafter. The Company also obtained a fixed price option to purchase the nine facilities for $251.6 million that is exercisable from July 2023 through June 2025. The Company executed a promissory note with Cascade for $20.3 million, which was subsequently converted into a 49 % membership interest in the Cascade Partnership. The Company also holds a subordinated equity interest in the Cascade Partnership of $10.0 million. The Cascade Partnership is a VIE of which the Company is the primary beneficiary. Consequently, the Company has consolidated all of the accounts of the Cascade Partnership in the accompanying financial statements. Additionally, all leasing activity associated with the master lease has been fully eliminated in consolidation. The Cascade Partnership acquired all million. The initial consolidation primarily resulted in property and equipment of million. The Company has not finalized the analysis of the consideration and purchase price allocation and will continue to review this during the measurement period. The net impact of consolidating the Cascade Partnership was not material to the accompanying consolidated statement of operations for the three and nine months ended September 30, 2020. 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 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 million of HUD financed debt. The three facilities generated revenues of million. The transactions resulted in a gain on sale of 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 million of HUD financed debt. The facility generated revenues of million. See Note 14 – “ Assets Held for Sale .” The transactions resulted in a gain on sale of 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 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 million of MidCap Real Estate Loans. The million and pre-tax income was de minimis. The transactions resulted in a gain on sale of On April 1, 2020, the Company divested the operations and terminated the lease of two skilled nursing facilities in Montana. The million. The lease termination resulted in an annual rent credit of 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. The million. The lease termination resulted in a net annual rent credit of On June 1, 2020, the Company divested the operations of four leased skilled nursing facilities in Idaho that were subject to a master lease with Omega. The On July 6, 2020, the Company sold a skilled nursing facility in Rhode Island for $10.5 million, resulting in a gain on sale of $6.1 million. Proceeds were used to retire $5.5 million of MidCap Real Estate Loans. The facility generated annual revenues of $9.9 million and pre-tax income of $0.2 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 | 9 Months Ended |
Sep. 30, 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. COVID-19 The Company’s net revenues for the three and nine months ended September 30, 2020 were materially impacted by COVID-19. For discussion of the impact, see Note 3 – “Significant Transactions and Events – COVID-19.” 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 and nine months ended September 30, 2020 and 2019 was as follows (in thousands): Three months ended September 30, 2020 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 155,374 $ 23,168 $ — $ 178,542 Medicaid 477,295 473 — 477,768 Insurance 80,242 5,852 — 86,094 Private 57,788 (1) 2 — 57,790 Third party providers — 63,954 20,702 84,656 Other 16,374 (2) 8,068 (2) 29,361 (3) 53,803 Total net revenues $ 787,073 $ 101,517 $ 50,063 $ 938,653 Three months ended September 30, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 187,493 $ 22,643 $ — $ 210,136 Medicaid 572,100 560 — 572,660 Insurance 111,529 5,453 — 116,982 Private 77,440 (1) 66 — 77,506 Third party providers — 85,051 17,285 102,336 Other 17,449 (2) 2,527 (2) 24,109 (3) 44,085 Total net revenues $ 966,011 $ 116,300 $ 41,394 $ 1,123,705 (1) Includes Assisted/Senior living revenue of $19.1 million and $23.1 million for the three months ended September 30, 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. Nine months ended September 30, 2020 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 518,892 $ 64,579 $ — $ 583,471 Medicaid 1,536,155 1,417 — 1,537,572 Insurance 259,237 16,130 — 275,367 Private 193,982 (1) 149 — 194,131 Third party providers — 203,616 64,855 268,471 Other 50,085 (2) 17,619 (2) 60,446 (3) 128,150 Total net revenues $ 2,558,351 $ 303,510 $ 125,301 $ 2,987,162 Nine months ended September 30, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 596,468 $ 68,387 $ — $ 664,855 Medicaid 1,730,147 1,688 — 1,731,835 Insurance 351,228 16,603 — 367,831 Private 233,499 (1) 270 — 233,769 Third party providers — 262,689 58,379 321,068 Other 51,659 (2) 8,438 (2) 50,942 (3) 111,039 Total net revenues $ 2,963,001 $ 358,075 $ 109,321 $ 3,430,397 (1) Includes Assisted/Senior living revenue of $61.0 million and $70.4 million for the nine months ended September 30, 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 | 9 Months Ended |
Sep. 30, 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 The noncontrolling owners of FC-GEN have the right to exchange their membership units in FC-GEN , Basic EPS was computed by dividing net (loss) income attributable to Genesis Healthcare, Inc. by the weighted-average number of outstanding common shares for the period. Diluted EPS is computed by dividing net (loss) income 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 (loss) income per common share follows (in thousands, except per share data): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Numerator: Net (loss) income $ (95,930) $ 58,898 $ (86,565) $ 24,833 Less: Net loss (income) attributable to noncontrolling interests 33,137 (12,801) 35,275 1,182 Net (loss) income attributable to Genesis Healthcare, Inc. $ (62,793) $ 46,097 $ (51,290) $ 26,015 Denominator: Weighted-average shares outstanding for basic net (loss) income per share 113,145 109,123 111,372 106,581 Basic net (loss) income per common share attributable to Genesis Healthcare, Inc. $ (0.55) $ 0.42 $ (0.46) $ 0.24 A reconciliation of the numerator and denominator used in the calculation of diluted net (loss) income per common share follows (in thousands, except per share data): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Numerator: Net (loss) income $ (95,930) $ 58,898 $ (86,565) $ 24,833 Less: Net loss (income) attributable to noncontrolling interests 33,137 (12,801) 35,275 1,182 Net (loss) income attributable to Genesis Healthcare, Inc. $ (62,793) $ 46,097 $ (51,290) $ 26,015 Plus: Assumed conversion of noncontrolling interests — 20,179 — 8,060 Net (loss) income available to common stockholders after assumed conversions $ (62,793) $ 66,276 $ (51,290) $ 34,075 Denominator: Weighted-average common shares outstanding 113,145 109,123 111,372 106,581 Plus: Assumed conversion of noncontrolling interests — 56,605 — 57,313 Plus: Unvested restricted stock units and stock warrants — 274 — 689 Adjusted weighted-average common shares outstanding, diluted 113,145 166,002 111,372 164,583 Diluted net (loss) income per common share attributable to Genesis Healthcare, Inc. $ (0.55) $ 0.40 $ (0.46) $ 0.21 The computation of diluted net (loss) income per common share attributable to Genesis Healthcare, Inc. excludes the effects of anti-dilutive shares attributable to the assumed conversion of noncontrolling interests, unvested restricted stock units, and stock warrants, which were 55.4 million and 56.0 million for the three and nine months ended September 30, 2020, respectively. There were 55.4 million and 56.5 million units attributable to the noncontrolling interests outstanding as of September 30, 2020 and 2019, respectively. Omnibus Equity Incentive Plans During the second quarter of 2020, the Company’s shareholders approved the 2020 Omnibus Equity Incentive Plan (the 2020 Plan). shares previously registered on Forms S-8 filed with the SEC that were available for issuance under the Prior Plan. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 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 September 30, 2020 2019 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage Revenues: Inpatient services: Skilled nursing facilities $ 766,782 81.8 % $ 941,722 83.8 % $ (174,940) (18.6) % Assisted/Senior living facilities 19,128 2.0 % 23,057 2.1 % (3,929) (17.0) % Administration of third party facilities 1,835 0.2 % 1,980 0.2 % (145) (7.3) % Elimination of administrative services (672) (0.1) % (748) (0) % 76 10.2 % Inpatient services, net 787,073 83.9 % 966,011 86.0 % (178,938) (18.5) % Rehabilitation therapy services: Total therapy services 156,706 16.7 % 183,898 16.4 % (27,192) (14.8) % Elimination of intersegment rehabilitation therapy services (55,189) (5.9) % (67,598) (6.0) % 12,409 18.4 % Third party rehabilitation therapy services, net 101,517 10.8 % 116,300 10.4 % (14,783) (12.7) % Other services: Total other services 73,276 7.8 % 55,532 4.9 % 17,744 32.0 % Elimination of intersegment other services (23,213) (2.5) % (14,138) (1.3) % (9,075) (64.2) % Third party other services, net 50,063 5.3 % 41,394 3.6 % 8,669 20.9 % Net revenues $ 938,653 100.0 % $ 1,123,705 100.0 % $ (185,052) (16.5) % Nine months ended September 30, 2020 2019 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage Revenues: Inpatient services: Skilled nursing facilities $ 2,493,616 83.5 % $ 2,888,659 84.1 % $ (395,043) (13.7) % Assisted/Senior living facilities 60,991 2.0 % 70,408 2.1 % (9,417) (13.4) % Administration of third party facilities 5,986 0.2 % 6,281 0.2 % (295) (4.7) % Elimination of administrative services (2,242) (0.1) % (2,347) (0.1) % 105 4.5 % Inpatient services, net 2,558,351 85.6 % 2,963,001 86.3 % (404,650) (13.7) % Rehabilitation therapy services: Total therapy services 475,127 15.9 % 571,875 16.7 % (96,748) (16.9) % Elimination of intersegment rehabilitation therapy services (171,617) (5.7) % (213,800) (6.2) % 42,183 19.7 % Third party rehabilitation therapy services, net 303,510 10.2 % 358,075 10.5 % (54,565) (15.2) % Other services: Total other services 199,058 6.7 % 143,139 4.2 % 55,919 39.1 % Elimination of intersegment other services (73,757) (2.5) % (33,818) (1.0) % (39,939) (118.1) % Third party other services, net 125,301 4.2 % 109,321 3.2 % 15,980 14.6 % Net revenues $ 2,987,162 100.0 % $ 3,430,397 100.0 % $ (443,235) (12.9) % A summary of the Company’s unaudited condensed consolidated statement of operations follows (in thousands): Three months ended September 30, 2020 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 787,745 $ 156,706 $ 73,276 $ — $ (79,074) $ 938,653 Salaries, wages and benefits 375,352 122,134 37,523 — — 535,009 Other operating expenses 362,212 7,178 19,447 — (79,173) 309,664 General and administrative costs — — — 45,172 — 45,172 Lease expense 85,245 253 450 299 — 86,247 Depreciation and amortization expense 20,301 1,736 206 2,245 (115) 24,373 Interest expense 15,674 — 10 19,414 (1,180) 33,918 Loss on early extinguishment of debt — — — 1,101 — 1,101 Investment income — — — (2,137) 1,180 (957) Other (income) loss (54,052) 620 (75) — — (53,507) Transaction costs — — — 15,561 — 15,561 Long-lived asset impairments 72,400 — — — — 72,400 Federal stimulus - COVID-19 other income (27,002) (4,210) — — — (31,212) Equity in net income of unconsolidated affiliates — — — (2,310) (1,052) (3,362) (Loss) income before income tax benefit (62,385) 28,995 15,715 (79,345) 1,266 (95,754) Income tax expense — — — 176 — 176 Net (loss) income $ (62,385) $ 28,995 $ 15,715 $ (79,521) $ 1,266 $ (95,930) Three months ended September 30, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 966,759 $ 183,898 $ 55,515 $ 17 $ (82,484) $ 1,123,705 Salaries, wages and benefits 437,508 152,793 30,192 — — 620,493 Other operating expenses 394,115 11,779 16,421 — (82,874) 339,441 General and administrative costs — — — 35,930 — 35,930 Lease expense 98,987 320 384 327 — 100,018 Depreciation and amortization expense 29,263 2,934 176 2,559 — 34,932 Interest expense 12,363 14 9 24,713 — 37,099 Loss on early extinguishment of debt — — — 2,460 — 2,460 Investment income — — — (2,071) — (2,071) Other income (131,811) — — — — (131,811) Transaction costs — — — 12,941 — 12,941 Long-lived asset impairments 16,037 — — — — 16,037 Equity in net loss (income) of unconsolidated affiliates — — — 2,932 (3,025) (93) Income (loss) before income tax benefit 110,297 16,058 8,333 (79,774) 3,415 58,329 Income tax benefit — — — (569) — (569) Net income (loss) $ 110,297 $ 16,058 $ 8,333 $ (79,205) $ 3,415 $ 58,898 Nine months ended September 30, 2020 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 2,560,593 $ 475,127 $ 199,058 $ — $ (247,616) $ 2,987,162 Salaries, wages and benefits 1,237,570 378,687 116,229 — — 1,732,486 Other operating expenses 1,132,321 24,440 58,623 — (247,965) 967,419 General and administrative costs — — — 124,558 — 124,558 Lease expense 277,506 878 1,380 898 — 280,662 Depreciation and amortization expense 71,479 5,099 612 7,140 (153) 84,177 Interest expense 42,069 27 29 63,480 (3,540) 102,065 Loss on early extinguishment of debt — — — 6,561 — 6,561 Investment income — — — (6,614) 3,540 (3,074) Other (income) loss (183,265) 621 205 — — (182,439) Transaction costs — — — 26,696 — 26,696 Long-lived asset impairments 159,200 — — — — 159,200 Federal stimulus - COVID-19 other income (204,977) (9,359) (2,377) — — (216,713) Equity in net income of unconsolidated affiliates — — — (6,419) (392) (6,811) Income (loss) before income tax benefit 28,690 74,734 24,357 (216,300) 894 (87,625) Income tax benefit — — — (1,060) — (1,060) Net income (loss) $ 28,690 $ 74,734 $ 24,357 $ (215,240) $ 894 $ (86,565) Nine months ended September 30, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 2,965,348 $ 571,875 $ 142,905 $ 234 $ (249,965) $ 3,430,397 Salaries, wages and benefits 1,336,298 464,740 88,024 — — 1,889,062 Other operating expenses 1,185,684 34,866 44,312 — (250,355) 1,014,507 General and administrative costs — — — 107,024 — 107,024 Lease expense 285,510 985 1,064 1,106 — 288,665 Depreciation and amortization expense 83,463 9,210 524 8,198 — 101,395 Interest expense 68,454 41 26 73,069 — 141,590 Loss on early extinguishment of debt — — — 2,436 — 2,436 Investment income — — — (6,078) — (6,078) Other (income) loss (172,126) (76) 61 — — (172,141) Transaction costs — — — 23,025 — 23,025 Long-lived asset impairments 16,937 — — — — 16,937 Equity in net loss (income) of unconsolidated affiliates — — — 4,318 (4,496) (178) Income (loss) before income tax benefit 161,128 62,109 8,894 (212,864) 4,886 24,153 Income tax benefit — — — (680) — (680) Net income (loss) $ 161,128 $ 62,109 $ 8,894 $ (212,184) $ 4,886 $ 24,833 The following table presents the segment assets as of September 30, 2020 compared to December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Inpatient services $ 3,670,154 $ 4,221,579 Rehabilitation therapy services 257,641 281,978 Other services 63,822 49,877 Corporate and eliminations 223,008 108,706 Total assets $ 4,214,625 $ 4,662,140 The following table presents segment goodwill as of September 30, 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 September 30, 2020 Goodwill 73,814 11,828 85,642 Accumulated impairment losses — — — $ 73,814 $ 11,828 $ 85,642 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2020 | |
Property and Equipment | |
Property and Equipment | (7) Property and Equipment Property and equipment consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Land, buildings and improvements $ 1,081,930 $ 1,004,447 Equipment, furniture and fixtures 357,032 386,248 Construction in progress 2,801 2,771 Gross property and equipment 1,441,763 1,393,466 Less: accumulated depreciation (422,824) (431,361) Net property and equipment $ 1,018,939 $ 962,105 Net property and equipment included $741.7 million and $535.9 million at September 30, 2020 and December 31, 2019, respectively, associated with the Company's consolidated VIEs. During the nine months ended September 30, 2020, the Company purchased nine skilled nursing facility and sold 14 skilled nursing facilities resulting in a net increase in net property and equipment of $104.6 million. During the nine months ended September 30, 2020, the Company recorded long-lived asset impairment charges to its property and equipment of $7.1 million. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
Leases | (8) Leases The Company leases the majority of the skilled nursing facilities and assisted/senior living facilities used in its operations, most of which are subject to triple-net leases, meaning that in addition to rent, the Company is responsible for paying property taxes, insurance, and maintenance and repair costs. As of September 30, 2020, the Company leased approximately 72% of its centers; 39% 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 terms lease term five 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 September 30, 2020, the Company held fixed-price options to purchase 66 facilities, 23 of which are subject to third-party leases and 43 of which are included within 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 assumed to be exercised 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 and nine months ended September 30, 2020, the Company recorded long-lived asset impairment charges to its lease ROU assets of $72.4 million and $152.1 million, respectively. The maturity of total operating and finance lease obligations at September 30, 2020 is as follows (in thousands): Year ending December 31, Operating Leases Finance Leases (1) 2020 (excluding the nine months ended September 30, 2020) $ 84,386 $ 1,735 2021 334,643 6,809 2022 334,691 6,603 2023 334,631 6,385 2024 340,676 6,149 Thereafter 2,671,792 34,861 Total lease payments 4,100,819 62,542 Less interest (1,774,019) (24,007) Total lease obligations 2,326,800 38,535 Less current portion (126,974) (2,958) Long-term lease obligations $ 2,199,826 $ 35,577 (1) Finance lease payments include $37.2 million related to options to renew 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 and nine months ended September 30, 2020 and 2019 (in thousands): Three months ended September 30, Nine months ended September 30, Classification 2020 2019 2020 2019 Operating lease cost Lease expense $ 86,247 $ 100,018 $ 280,662 $ 288,665 Finance lease cost: Amortization of finance lease ROU assets Depreciation and amortization expense 968 1,734 2,950 15,222 Interest on finance lease obligations Interest expense 1,341 4,299 3,392 48,931 Total finance lease expense 2,309 6,033 6,342 64,153 Variable lease cost Other operating expenses 8,948 10,697 26,697 32,027 Short-term leases Other operating expenses 4,447 5,980 14,121 18,596 Sublease income Net revenues (1,853) - (4,290) - Total $ 100,098 $ 122,728 $ 323,532 $ 403,441 The following table provides remaining lease term and discount rates by lease classification as of September 30, 2020 and December 31, 2019: Lease Term and Discount Rate September 30, 2020 December 31, 2019 Weighted-average remaining lease term (years) Operating leases 12.0 12.6 Finance leases 9.7 10.2 Weighted-average discount rate Operating leases 10.0% 9.6% Finance leases 10.6% 12.2% The following table includes supplemental lease information for the nine months ended September 30, 2020 and 2019 (in thousands): Nine months ended September 30, Other information 2020 2019 Cash paid for amounts included in the measurement of lease obligations Operating cash flows from operating leases $ 266,713 $ 270,449 Operating cash flows from finance leases 5,570 45,286 Financing cash flows from finance leases 2,177 1,973 Right-of-use assets obtained in exchange for new lease obligations Operating leases 16,270 82,471 Finance leases 727 688 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 At September 30, 2020, the Company did not meet certain financial covenants contained in two leases related to four of its facilities. The Company is current in the timely payment of its obligations under such leases. These leases do not have cross-default provisions, nor do they trigger cross-default provisions in any of the Company’s other loan or lease agreements. The Company will continue to work with the related credit parties to amend such leases and the related financial covenants. The Company does not believe the breach of such financial covenants at September 30, 2020 will have a material adverse impact on its financial position. 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 timely and adequate government-sponsored financial support in response to the COVID-19 pandemic . See Note 1 – “ General Information – Going Concern Considerations Significant Transactions and Events – COVID-19 ” for discussions that could impact future covenant compliance. 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 a significant adverse impact on the Company’s financial position. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | (9) Long-Term Debt Long-term debt at September 30, 2020 and December 31, 2019 consisted of the following (in thousands): September 30, 2020 December 31, 2019 Asset based lending facilities, net of debt issuance costs of $6,575 and $8,615 at September 30, 2020 and December 31, 2019, respectively $ 278,425 $ 412,346 Term loan agreements, net of debt issuance costs of $660 and $1,084 and debt premium balance of $2,844 and $4,816 at September 30, 2020 and December 31, 2019, respectively 207,215 196,714 Real estate loans, net of debt issuance costs of $2,710 and $3,846 and debt premium balance of $12,080 and $19,328 at September 30, 2020 and December 31, 2019, respectively 228,713 265,700 HUD insured loans, net of debt issuance costs of $870 and $2,909 at September 30, 2020 and December 31, 2019, respectively 34,252 117,117 Notes payable 102,646 116,952 Mortgages and other secured debt (recourse) 6,142 6,369 Mortgages and other secured debt (non-recourse), net of debt issuance costs of $11,415 and $9,349 and debt premium balance of $1,348 and $1,422 at September 30, 2020 and December 31, 2019, respectively 696,998 498,222 1,554,391 1,613,420 Less: Current portion of long-term debt (10,693) (162,426) Long-term debt $ 1,543,698 $ 1,450,994 Asset Based Lending Facilities The Company maintains an asset based lending facility, as amended, that was previously 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 $22.5 million on September 30, 2020 and will be further reduced to $20.0 million on December 31, 2020. 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. In the event that the springing maturity clause is triggered, the maturity date of the ABL Credit Facilities would be accelerated to October 3, 2021. 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. Cash proceeds of $51.1 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 September 30, 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 11.0%. 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 1.5 %. 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 September 30, 2020 (dollars in thousands): Weighted Average ABL Credit Facilities Commitment Borrowings Interest Term loan facility $ 285,000 $ 285,000 6.50 % Revolving credit facility (Non-HUD) 168,000 — 6.50 % Revolving credit facility (HUD) 72,000 — 6.50 % Delayed draw term loan facility 22,500 — 12.00 % $ 547,500 $ 285,000 6.50 % As of September 30, 2020, the Company had a total borrowing base capacity of $332.4 million with outstanding borrowings under the ABL Credit Facilities of $285.0 million, leaving the Company with approximately $47.4 million of available borrowing capacity under the ABL Credit Facilities. Term Loan Agreements The Company and certain of its affiliates, including FC-GEN (the Borrower) are party to a term loan agreement, as amended, (the Term Loan Agreement) with an affiliate of Welltower and an affiliate of Omega. The Term Loan Agreement originally provided for term loans (the Term Loans) in the aggregate principal amount of $120.0 million and later expanded to $160.0 million. The Term Loan Agreement was set to mature on November 30, 2021, but the agreement was amended on November 8, 2020 extending the maturity date to January 1, 2022. 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 $205.0 million and $193.0 million at September 30, 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 1.7 to 1.0 through December 31, 2020, and increasing to 1.8 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 seven 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 nine months ended September 30, 2020, the Company divested the real property and operations of five facilities that were subject to the MidCap Real Estate Loans, using the sale proceeds to repay $27.1 million on the loans. The MidCap Real Estate Loans had an outstanding principal balance of $14.3 million and $42.2 million at September 30, 2020 and December 31, 2019, respectively. On October 30, 2020, the Company sold the real property and divested the operations of three facilities in Vermont that were subject to the MidCap Real Estate Loans, using the sale proceeds to retire the remaining outstanding principal balance of $14.3 million. See Note 17 – “Subsequent Events.” 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 September 30, 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 September 30, 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 $205.0 million and $208.0 million at September 30, 2020 and December 31, 2019, respectively. HUD Insured Loans As of September 30, 2020, the Company had seven 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 28.2 years with fixed interest rates ranging from 3.0% to 3.5% and a weighted average interest rate of 3.3%. Prepayments are generally allowed only after 12 months from the inception of the mortgage. Prepayments are subject to a penalty of 10% of the remaining principal balances in the first year and the prepayment penalty decreases each subsequent year by 1% until no penalty is required thereafter. Any further HUD insured loans will require additional HUD approval. All HUD insured loans are non-recourse loans to the Company. All loans are subject to HUD regulatory agreements that require escrow reserve funds to be deposited with the loan servicer for mortgage insurance premiums, property taxes, insurance and for capital replacement expenditures. As of September 30, 2020, the balance of escrow reserve funds, During the nine months ended September 30, 2020, the Company sold the real property and operations of of which was classified as held for sale at December 31, 2019. The sale proceeds were used to retire HUD insured loans totaling million. The HUD insured loans for owned facilities had an aggregate principal balance of 2019, respectively. Additionally, the HUD insured loans of On October 30, 2020, the Company sold the real property and divested the operations of two facilities in Vermont that were subject to HUD insured loans, using the sale proceeds to retire loans of $8.1 million. See Note 17 – “Subsequent Events.” 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 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 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% . As of September 30, 2020, the outstanding principal balance of the note payable was In November 2019, the Company issued a short-term note payable for $15.0 million. The balance of the note was repaid during the third quarter of 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 0.6% 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. During the second quarter of 2020, the Next Partnership term loan was partially refinanced via two new HUD insured loans. Proceeds from the new HUD insured loans were principally used to pay down $24.6 million on the Next Partnership term loan. The term loan had an outstanding principal balance of $78.8 million and $103.4 million as of September 30, 2020 and December 31, 2019, respectively. The term loan was collateralized by 10 facilities as of September 30, 2020. 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. The mezzanine loan had an outstanding principal balance of $27.0 million as of both September 30, 2020 and December 31, 2019. The Next Partnership includes five facilities that are subject to HUD-insured loans, two of which were entered into during the nine months ended September 30, 2020. The loans mature on dates ranging from January 1, 2055 through June 1, 2055. The loans bear interest at fixed rates ranging from 2.79% to 3.15% and had an aggregate outstanding principal balance of $67.3 million and $41.7 million at September 30, 2020 and December 31, 2019, respectively. 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. The term loan had an outstanding principal balance of $240.9 million and $233.6 million at September 30, 2020 and December 31, 2019, respectively. The term loan was collateralized by 19 facilities as of September 30, 2020. 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 September 30, 2020 and December 31, 2019. The promissory note bears interest at 14.0% and matures on September 12, 2028. Cascade Partnership Debt The Cascade Partnership is subject to a term loan agreement with an aggregate principal balance of $183.5 million and maturity date of July 2, 2023. The term loan bears interest at LIBOR (subject to a floor of 1.50%) plus 4.75 % and is subject to interest-only payments through the maturity date. The term loan also has two one-year optional extension periods that become exercisable upon satisfaction of certain conditions, such as achieving a specified debt service coverage ratio. The debt service payments during the extension periods include a principal component that will be calculated based on the outstanding balance, an assumed interest rate of 6.0%, and a 25-year amortization schedule, with the balance due at maturity. The entire term loan balance was outstanding as of September 30, 2020. The term loan is collateralized by 9 facilities as of September 30, 2020. The Cascade Partnership is subject to a note payable in the amount of $10.0 million, the entire balance of which was outstanding at September 30, 2020. The note matures on June 30, 2024 and bears interest at 10.0%, of which 5.0% will be paid in cash and 5.0 % will be paid in kind. Paid in kind interest compounds annually beginning July 1, 2021. Subsequent to July 1, 2022, quarterly principal payments are required based on cash flows generated by the Cascade Partnership, with the remaining balance due at maturity. 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, with a weighted average interest rate of 4.2% at September 30, 2020. The loans had an aggregate outstanding principal balance of $22.8 million and $23.8 million at September 30, 2020 and December 31, 2019, respectively. 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 September 30, 2020, 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 timely and adequate government-sponsored financial support in response to the COVID-19 pandemic. See Note 1 – “ General Information – Going Concern Considerations COVID-19 ” for discussions that could impact future covenant compliance. 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 a significant adverse impact on the Company’s financial position. The maturity of total debt of $1,560.3 million, excluding debt issuance costs and other non-cash debt discounts and premiums, at September 30, 2020 is as follows (in thousands): Twelve months ended September 30, 2021 $ 10,691 2022 883,975 2023 213,090 2024 22,296 2025 10,085 Thereafter 420,212 Total debt maturity $ 1,560,349 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Taxes | |
Income Taxes | (10) Income Taxes The Company effectively owns 67.1 % 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 67.1% ownership of FC-GEN. For the three months ended September 30, 2020, the Company recorded income tax expense of $0.2 million, representing an effective tax rate of (0.2)%, compared to income tax benefit of $0.6 million, representing an effective tax rate of (1.0%), for the same period in 2019. For the nine months ended September 30, 2020, the Company recorded income tax benefit of $1.1 million, representing an effective tax rate of 1.3%, compared to income tax benefit of $0.7 million, representing an effective tax rate of (2.8%), for the same period in 2019. The Company previously established a full valuation allowance against the majority of its net deferred tax assets based on its assessment that the Company will not realize such assets. The Company continues to assess the requirement for, and amount of, the valuation allowance for its deferred tax assets in accordance with the “more likely than not” standard. As of September 30, 2020, management determined that the current valuation allowance was still necessary and sufficient. The Company’s Bermuda captive insurance company incurred year-to-date losses due to the impact of COVID-19. Under the CARES Act, any loss sustained during 2020 is permitted to be carried back for five years. For the nine months ended September 30, 2020, the Company recorded current income tax benefits of $2.9 million attributable to losses incurred during 2020. The Company expects that its 2020 tax year will likely be impacted by certain provisions contained in the CARES Act, such as increased limits on interest expense deductions, acceleration of refunds related to alternative minimum tax credits, payroll tax deferrals, and employee retention tax credits. Exchange Rights and Tax Receivable Agreement The noncontrolling owners of FC-GEN have the right to exchange their membership units in FC-GEN , As a result of such exchanges, the Company increases its holding interest in FC-GEN at the cost of the fair market value of the stock that was exchanged with the noncontrolling owners for their interest in FC-GEN. The cost of the exchanges to the Company in excess of the tax basis of the Company’s increased share of the assets of FC-GEN is adjusted to the tax basis of the Company’s increased share of the assets of FC-GEN, pursuant to internal revenue code (IRC) Section 743(b), because of FC-GEN’s IRC Section 754 election. The exchanges during the nine months ended September 30, 2020 and 2019 resulted in IRC Section 743(b) deductible goodwill of $6.6 million and $14.3 million, respectively. The Company is party to a tax receivable agreement (TRA) with the noncontrolling owners of FC-GEN. The agreement provides for the payment by the Company to the noncontrolling 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 noncontrolling 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, such as the timing of exchanges, the price of shares of the Company’s Class A common stock at the time of the exchange, the amount and timing of the Company’s income, and future tax rates of jurisdictions in which the Company has tax liability. The TRA also provides that upon certain mergers, asset sales, other forms of business combinations or other changes of control, FC-GEN (or its successor’s) obligations under the TRA would be based on certain assumptions defined in the TRA. As a result of these assumptions, FC-GEN could be required to make payments under the TRA that are greater or less than the specified percentage of the actual benefits realized by the Company that are subject to the TRA. In addition, if FC-GEN elects to terminate the TRA early, it would be required to make an early termination payment, which upfront payment may be made significantly in advance of the anticipated future tax benefits. Payments generally are due under the TRA within a specified period of time following the filing of FC-GEN’s U.S. federal and state income tax return for the taxable year with respect to which the payment obligation arises. Payments under the TRA generally will be based on the tax reporting positions that FC-GEN will determine. Although FC-GEN does not expect the IRS to challenge the Company’s tax reporting positions, FC-GEN will not be reimbursed for any overpayments previously made under the TRA, but any overpayments will reduce future payments. As a result, in certain circumstances, payments could be made under the TRA in excess of the benefits that FC-GEN actually realizes in respect of the tax attributes subject to the TRA. The term of the TRA generally will continue until all applicable tax benefits have been utilized or expired, unless the Company exercises its right to terminate the TRA and make an early termination payment. In certain circumstances (such as certain changes in control, the election of the Company to exercise its right to terminate the agreement and make an early termination payment or an IRS challenge to a tax basis increase) it is possible that cash payments under the TRA may exceed actual cash savings. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions | |
Related Party Transactions | (11) Related Party Transactions 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, t 2019, respectively. The customer’s total net accounts receivable balance was $31.0 million and $28.9 million at September 30, 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, the Company recorded net revenues of 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. 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 September 30, 2020, Welltower held greater than 5% of the Company’s Class A common stock. 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 . Annual rent escalators under the master lease are 2019, respectively. The Company holds options to purchase certain facilities subject to the master lease. At September 30, 2020, the Company leased facilities from Welltower. The Company and certain of its affiliates are also party to certain debt instruments with Welltower. During the three and nine months ended September 30, 2020, the Company paid interest to Welltower of The Company transitioned operational responsibility for 23 facilities in the states of California, Washington and Nevada to the NewGen Partnership. The Company does not hold a controlling financial interest in the NewGen Partnership. As such, the Company has applied the equity method of accounting for its million in financing to the NewGen Partnership. 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 provides administrative and back office services to the facilities pursuant to administrative support agreements, as well as therapy services pursuant to therapy services agreements. The Company also subleases facilities to the NewGen Partnership. Total revenues recorded for these services in the three and nine months ended September 30, 2020 were |
Other Income
Other Income | 9 Months Ended |
Sep. 30, 2020 | |
Other Income | |
Other Income | (12) Other Income In the three and nine months ended September 30, 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 September 30, Nine months ended September 30, 2020 2019 2020 2019 Gain on sale of owned assets (1) $ (6,242) $ (63,645) $ (104,037) $ (90,992) Loss recognized for exit costs associated with divestiture of operations (2) 652 6,725 10,961 14,647 Gain on lease termination or modification (3) (37,917) (74,891) (79,363) (95,796) Gain on landlord consideration credit (4) (10,000) — (10,000) — Total other income $ (53,507) $ (131,811) $ (182,439) $ (172,141) (1) The Company sold one and 14 owned skilled nursing facilities during the three and nine months ended September 30, 2020, respectively. The Company sold 10 and 15 owned skilled nursing facilities during the three and nine months ended September 30, 2019, respectively. The gain represents sale proceeds in excess of the carrying value of the assets sold. (2) The Company divested operations of one and 44 facilities, including the sold facilities noted above, in the three and nine months ended September 30, 2020, respectively. The Company divested operations of 22 and 41 facilities, including the sold facilities noted above, in the three and nine months ended September 30, 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 and nine months ended September 30, 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 September 30, 2020, the Company recognized a gain on the lease termination of 12 facilities totaling $18.2 million and a gain associated with lease modifications of $19.7 million. In the nine months ended September 30, 2020, the Company sold the leasehold rights of 13 facilities resulting in a gain of $10.7 million, terminated 24 divested facilities from various lease agreements resulting in a gain of $30.7 million, recognized a gain on the lease termination of 12 facilities totaling $18.2 million and a gain associated with lease modifications of $19.7 million. In the three and nine months ended September 30, 2019, the Company amended its master leases with Welltower, Omega, Second Spring, and certain other landlords to reflect the lease termination of 27 and 53 facilities, respectively. In conjunction with certain of these amendments, the Company reassessed the likelihood of exercising its renewal options and concluded that it no longer met the reasonably certain threshold. During the three and nine months ended September 30, 2019, these lease terminations and remeasurements resulted in a net gain of $74.9 million and $95.8 million, respectively. (4) The Company recorded a gain of $10.0 million in its consolidation accounting of the Cascade Partnership. The gain is associated with subordinated equity of the Cascade Partnership to be paid to the Company upon liquidation of the partnership. |
Asset Impairment Charges
Asset Impairment Charges | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Asset Impairment Charges | (13) Asset Impairment Charges 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 primary asset in each long-lived asset group is principally a building or ROU asset in the inpatient segment and customer relationship assets in the rehabilitation therapy services segment. 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 each long-lived asset group. The Company recognized asset impairment charges in the inpatient segment of |
Assets Held for Sale
Assets Held for Sale | 9 Months Ended |
Sep. 30, 2020 | |
Assets Held for Sale | |
Assets Held for Sale | (14) Assets Held for Sale 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 September 30, 2020, the Company classified two skilled nursing facilities operated by the Company in the states of California and Nevada 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 $20.9 million. At December 31, 2019, the Company classified one skilled nursing facility operated by the Company in 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 September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Current assets: Prepaid expenses $ — $ 1,171 Long-term assets: Property and equipment, net of accumulated depreciation of $3,015 and $2,201 at September 30, 2020 and December 31, 2019, respectively 11,554 16,306 Total assets $ 11,554 $ 17,477 Current liabilities: Current portion of long-term debt $ 400 $ 368 Long-term liabilities: Long-term debt 18,373 19,789 Total liabilities $ 18,773 $ 20,157 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | (15) Commitments and Contingencies 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 $21.3 million and $56.4 million for the three and nine months ended September 30, 2020, respectively, as compared to $16.1 million and $42.9 million for the three and nine months ended September 30, 2019, respectively. The reserves for general and professional liability, which are recorded on an undiscounted basis, were $382.3 million and $392.8 million as of September 30, 2020 and December 31, 2019, respectively. The provision for workers’ compensation risks totaled $17.2 million and $54.8 million for the three and nine months ended September 30, 2020, respectively, as compared to $14.0 million and $42.7 million for the three and nine months ended September 30, 2019, respectively. The reserves for loss for workers’ compensation risks were $173.4 million and $160.5 million as of September 30, 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 $9.3 million and $12.0 million as of September 30, 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 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. Select Subcommittee on the Coronavirus Crisis A U.S. House of Representatives subcommittee, the Select Subcommittee on the Coronavirus Crisis (the Committee), announced an investigation into the ongoing COVID-19 crisis in nursing homes, demanding information from both the federal government and five large operators, including the Company. The Company has provided all requested information. On October 30, 2020, the Committee issued an “Interim Staff Report.” Legal Proceedings The Company and certain of its subsidiaries are involved in or have received notice of various investigations, litigation and potential claims related to the COVID-19 pandemic, including inquiries from state and federal agencies; professional liability claims; and employment-related lawsuits and claims. Such claims may be subject to liability protection provisions within various state executive orders or legislation and/or federal legislation. The applicability of such protection has not yet been adjudicated in any pending claim against the Company. 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 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 evolve based upon further developments in the proceedings at issue. The results of legal proceedings are inherently uncertain, and material adverse outcomes are possible. 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 is subject to lease guaranty agreements on six of the facilities leased by the NewGen Partnership, under which it guarantees all payments and performance obligations of the tenants. As of September 30, 2020, the |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | (16) Fair Value of Financial Instruments 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 September 30, 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 September 30, Identical Assets Observable Inputs Inputs Assets: 2020 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 200,995 $ 200,995 $ — $ — Restricted cash and equivalents 96,543 96,543 — — Restricted investments in marketable securities 137,841 43,648 94,193 — Total $ 435,379 $ 341,186 $ 94,193 $ — 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): September 30, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Asset based lending facilities $ 278,425 $ 278,425 $ 412,346 $ 412,346 Term loan agreements 207,215 207,215 196,714 196,714 Real estate loans 228,713 228,713 265,700 265,700 HUD insured loans 34,252 34,252 117,117 117,117 Notes payable 102,646 102,646 116,952 116,952 Mortgages and other secured debt (recourse) 6,142 6,142 6,369 6,369 Mortgages and other secured debt (non-recourse) 696,998 696,998 498,222 498,222 $ 1,554,391 $ 1,554,391 $ 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 Nine months ended September 30, 2020 September 30, 2020 Assets: Property and equipment, net $ 1,018,939 $ 7,100 Finance lease right-of-use assets, net 28,635 6,000 Operating lease right-of-use assets 1,817,603 146,100 Intangible assets, net 83,530 — Goodwill 85,642 — Impairment Charges - Carrying Value Nine months ended December 31, 2019 September 30, 2019 Assets: Property and equipment, net $ 962,105 $ 10,696 Finance lease right-of-use assets, net 37,097 — Operating lease right-of-use assets 2,399,505 6,241 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 | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events | |
Subsequent Events | (17) Subsequent Events NewGen Partnership On October 1, 2020, the Company transitioned operational responsibility for one additional leased facility in the state of Washington to the NewGen Partnership. The facility generated annual revenues of Divestiture of Non-Strategic Facilities On October 15, 2020, the Company divested the operations of two leased skilled nursing facilities in Connecticut that were subject to a master lease. The On October 30, 2020, the Company sold the real property and divested the operations of five owned facilities in Vermont for $46.6 million. Proceeds were used to retire $8.1 million of HUD insured loans and $14.3 million of MidCap Real Estate Loans. The five facilities generated annual revenues of $47.4 million and pre-tax loss of $2.7 million. On November 1, 2020, the Company divested the operations and terminated the lease of one skilled nursing facility in Rhode Island. The facility generated annual revenues of $12.3 million and pre-tax income of $0.1 million. The lease termination resulted in an annual rent credit of $0.3 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) | 9 Months Ended |
Sep. 30, 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 September 30, 2020, the Company states. Revenues of the Company’s owned, leased and otherwise consolidated inpatient businesses constitute approximately 86% of its revenues. The Company provides a range of rehabilitation therapy services, including speech pathology, physical therapy, occupational therapy and respiratory therapy. These services are provided by rehabilitation therapists and assistants employed or contracted at substantially all of the centers operated by the Company, as well as by contract to healthcare facilities operated by others. The Company has expanded its delivery model for providing rehabilitation services to community-based and at-home settings, as well as internationally in China. After the elimination of intercompany revenues, the rehabilitation therapy services business constitutes approximately 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 subsidiaries. All 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 (loss) income attributable to Genesis Healthcare, Inc. and net (loss) income 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 U.S. Securities and Exchange Commission (SEC) on Form 10-K on March 16, 2020. |
Going Concern Considerations | Going Concern Considerations On March 11, 2020, the World Health Organization 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. 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 protocols 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 is having and will likely continue to have a material and adverse effect on the Company’s operations and supply chains, resulting in a reduction in its operating occupancy and related revenues, and an increase in its expenditures. The Company performed an assessment to determine whether there are conditions or events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date the financial statements are issued. Initially, this assessment does not consider the potential mitigating effect of management’s plans that have not been fully implemented. When substantial doubt exists, management assesses the mitigating effect of its plans to determine if it is probable that (1) the plans will be effectively implemented within one year after the date the financial statements are issued, and (2) when implemented, the plans will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In completing its going concern assessment, the Company considered the uncertainties around the impact of COVID-19 on its future results of operations as well as its current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s indebtedness and other conditional and unconditional obligations due within 12 months following the date its financial statements were issued. Without giving effect to the prospect, timing and adequacy of future governmental funding support and other mitigating plans, many of which are beyond the Company’s control, it is unlikely that the Company will be able to generate sufficient cash flows to meet its required financial obligations, including its rent and debt obligations, and maintain compliance with financial covenants. The existence of these conditions raises substantial doubt about the Company’s ability to continue as a going concern for the twelve-month period following the date the financial statements are issued. In response to COVID-19, and other conditions that raise substantial doubt about the Company’s ability to continue as a going concern, the Company has taken the following measures: ● The Company applied for and received government-sponsored financial relief related to the pandemic; ● The Company is utilizing the Coronavirus Aid, Relief, and Economic Security Act of 2020 (CARES Act) payroll tax deferral program to delay payment of a portion of payroll taxes incurred through December 2020, with 50% to be repaid in December 2021 and the remaining 50% to be repaid in December 2022; ● While it vigorously advocates, for itself and the skilled nursing industry, regarding the need for additional government-sponsored funding, the Company continues to explore and to take advantage of existing government-sponsored funding programs implemented to support businesses impacted by COVID-19; ● The Company continues to seek and implement measures to adapt its operational model to function for the long-term in a COVID-19 environment; ● The Company has pursued, and will continue to pursue, creative and accretive opportunities to sell assets and enter into joint venture structures in order to provide liquidity; and ● The Company is exploring and evaluating a number of strategic and other alternatives to manage and to improve its liquidity position, in order to address the maturity of material indebtedness and other obligations over the twelve-month period following the date the financial statements are issued. These measures and other plans and initiatives are needed to provide the Company with adequate liquidity to meet its obligations for at least the twelve-month period following the date its financial statements are issued. However, such plans and initiatives are dependent on factors that are beyond the Company’s control or may not be available on terms acceptable to the Company, or at all. Accordingly, management determined it could not be certain that the plans and initiatives would be effectively implemented within one year after the date the financial statements are issued. Further, even if the Company receives additional funding support from government sources and/or is able to execute successfully all of these plans and initiatives, given the unpredictable nature of, and the operating challenges presented by, the COVID-19 virus, the Company’s operating plans and resulting cash flows along with its cash and cash equivalents and other sources of liquidity may not be sufficient to fund operations for the twelve-month period following the date the financial statements are issued. Such events or circumstances could force the Company to seek reorganization under the U.S. Bankruptcy Code. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date the financial statements are issued. As such, the accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and their carrying amounts, or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern. |
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. |
Certain Significant Risks and_2
Certain Significant Risks and Uncertainties (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Certain Significant Risks and Uncertainties | |
Schedule of revenue by major source (in thousands) | Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Medicare 20 % 19 % 20 % 20 % Medicaid 61 % 59 % 61 % 58 % Insurance 10 % 12 % 10 % 12 % Private 7 % 8 % 7 % 8 % Other 2 % 2 % 2 % 2 % Total 100 % 100 % 100 % 100 % |
Net Revenues and Accounts Rec_2
Net Revenues and Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Net Revenues and Accounts Receivable | |
Schedule of revenues by revenue source | The composition of net revenues by payor type and operating segment for the three and nine months ended September 30, 2020 and 2019 was as follows (in thousands): Three months ended September 30, 2020 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 155,374 $ 23,168 $ — $ 178,542 Medicaid 477,295 473 — 477,768 Insurance 80,242 5,852 — 86,094 Private 57,788 (1) 2 — 57,790 Third party providers — 63,954 20,702 84,656 Other 16,374 (2) 8,068 (2) 29,361 (3) 53,803 Total net revenues $ 787,073 $ 101,517 $ 50,063 $ 938,653 Three months ended September 30, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 187,493 $ 22,643 $ — $ 210,136 Medicaid 572,100 560 — 572,660 Insurance 111,529 5,453 — 116,982 Private 77,440 (1) 66 — 77,506 Third party providers — 85,051 17,285 102,336 Other 17,449 (2) 2,527 (2) 24,109 (3) 44,085 Total net revenues $ 966,011 $ 116,300 $ 41,394 $ 1,123,705 (1) Includes Assisted/Senior living revenue of $19.1 million and $23.1 million for the three months ended September 30, 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. Nine months ended September 30, 2020 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 518,892 $ 64,579 $ — $ 583,471 Medicaid 1,536,155 1,417 — 1,537,572 Insurance 259,237 16,130 — 275,367 Private 193,982 (1) 149 — 194,131 Third party providers — 203,616 64,855 268,471 Other 50,085 (2) 17,619 (2) 60,446 (3) 128,150 Total net revenues $ 2,558,351 $ 303,510 $ 125,301 $ 2,987,162 Nine months ended September 30, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Total Medicare $ 596,468 $ 68,387 $ — $ 664,855 Medicaid 1,730,147 1,688 — 1,731,835 Insurance 351,228 16,603 — 367,831 Private 233,499 (1) 270 — 233,769 Third party providers — 262,689 58,379 321,068 Other 51,659 (2) 8,438 (2) 50,942 (3) 111,039 Total net revenues $ 2,963,001 $ 358,075 $ 109,321 $ 3,430,397 (1) Includes Assisted/Senior living revenue of $61.0 million and $70.4 million for the nine months ended September 30, 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) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings (Loss) Per Share | |
Reconciliation of the numerator and denominator used in the calculation of net income per share | Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Numerator: Net (loss) income $ (95,930) $ 58,898 $ (86,565) $ 24,833 Less: Net loss (income) attributable to noncontrolling interests 33,137 (12,801) 35,275 1,182 Net (loss) income attributable to Genesis Healthcare, Inc. $ (62,793) $ 46,097 $ (51,290) $ 26,015 Denominator: Weighted-average shares outstanding for basic net (loss) income per share 113,145 109,123 111,372 106,581 Basic net (loss) income per common share attributable to Genesis Healthcare, Inc. $ (0.55) $ 0.42 $ (0.46) $ 0.24 Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Numerator: Net (loss) income $ (95,930) $ 58,898 $ (86,565) $ 24,833 Less: Net loss (income) attributable to noncontrolling interests 33,137 (12,801) 35,275 1,182 Net (loss) income attributable to Genesis Healthcare, Inc. $ (62,793) $ 46,097 $ (51,290) $ 26,015 Plus: Assumed conversion of noncontrolling interests — 20,179 — 8,060 Net (loss) income available to common stockholders after assumed conversions $ (62,793) $ 66,276 $ (51,290) $ 34,075 Denominator: Weighted-average common shares outstanding 113,145 109,123 111,372 106,581 Plus: Assumed conversion of noncontrolling interests — 56,605 — 57,313 Plus: Unvested restricted stock units and stock warrants — 274 — 689 Adjusted weighted-average common shares outstanding, diluted 113,145 166,002 111,372 164,583 Diluted net (loss) income per common share attributable to Genesis Healthcare, Inc. $ (0.55) $ 0.40 $ (0.46) $ 0.21 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Information | |
Summary of segmented revenues | A summary of the Company’s segmented revenues follows (in thousands, except percentages): Three months ended September 30, 2020 2019 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage Revenues: Inpatient services: Skilled nursing facilities $ 766,782 81.8 % $ 941,722 83.8 % $ (174,940) (18.6) % Assisted/Senior living facilities 19,128 2.0 % 23,057 2.1 % (3,929) (17.0) % Administration of third party facilities 1,835 0.2 % 1,980 0.2 % (145) (7.3) % Elimination of administrative services (672) (0.1) % (748) (0) % 76 10.2 % Inpatient services, net 787,073 83.9 % 966,011 86.0 % (178,938) (18.5) % Rehabilitation therapy services: Total therapy services 156,706 16.7 % 183,898 16.4 % (27,192) (14.8) % Elimination of intersegment rehabilitation therapy services (55,189) (5.9) % (67,598) (6.0) % 12,409 18.4 % Third party rehabilitation therapy services, net 101,517 10.8 % 116,300 10.4 % (14,783) (12.7) % Other services: Total other services 73,276 7.8 % 55,532 4.9 % 17,744 32.0 % Elimination of intersegment other services (23,213) (2.5) % (14,138) (1.3) % (9,075) (64.2) % Third party other services, net 50,063 5.3 % 41,394 3.6 % 8,669 20.9 % Net revenues $ 938,653 100.0 % $ 1,123,705 100.0 % $ (185,052) (16.5) % Nine months ended September 30, 2020 2019 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage Revenues: Inpatient services: Skilled nursing facilities $ 2,493,616 83.5 % $ 2,888,659 84.1 % $ (395,043) (13.7) % Assisted/Senior living facilities 60,991 2.0 % 70,408 2.1 % (9,417) (13.4) % Administration of third party facilities 5,986 0.2 % 6,281 0.2 % (295) (4.7) % Elimination of administrative services (2,242) (0.1) % (2,347) (0.1) % 105 4.5 % Inpatient services, net 2,558,351 85.6 % 2,963,001 86.3 % (404,650) (13.7) % Rehabilitation therapy services: Total therapy services 475,127 15.9 % 571,875 16.7 % (96,748) (16.9) % Elimination of intersegment rehabilitation therapy services (171,617) (5.7) % (213,800) (6.2) % 42,183 19.7 % Third party rehabilitation therapy services, net 303,510 10.2 % 358,075 10.5 % (54,565) (15.2) % Other services: Total other services 199,058 6.7 % 143,139 4.2 % 55,919 39.1 % Elimination of intersegment other services (73,757) (2.5) % (33,818) (1.0) % (39,939) (118.1) % Third party other services, net 125,301 4.2 % 109,321 3.2 % 15,980 14.6 % Net revenues $ 2,987,162 100.0 % $ 3,430,397 100.0 % $ (443,235) (12.9) % |
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 September 30, 2020 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 787,745 $ 156,706 $ 73,276 $ — $ (79,074) $ 938,653 Salaries, wages and benefits 375,352 122,134 37,523 — — 535,009 Other operating expenses 362,212 7,178 19,447 — (79,173) 309,664 General and administrative costs — — — 45,172 — 45,172 Lease expense 85,245 253 450 299 — 86,247 Depreciation and amortization expense 20,301 1,736 206 2,245 (115) 24,373 Interest expense 15,674 — 10 19,414 (1,180) 33,918 Loss on early extinguishment of debt — — — 1,101 — 1,101 Investment income — — — (2,137) 1,180 (957) Other (income) loss (54,052) 620 (75) — — (53,507) Transaction costs — — — 15,561 — 15,561 Long-lived asset impairments 72,400 — — — — 72,400 Federal stimulus - COVID-19 other income (27,002) (4,210) — — — (31,212) Equity in net income of unconsolidated affiliates — — — (2,310) (1,052) (3,362) (Loss) income before income tax benefit (62,385) 28,995 15,715 (79,345) 1,266 (95,754) Income tax expense — — — 176 — 176 Net (loss) income $ (62,385) $ 28,995 $ 15,715 $ (79,521) $ 1,266 $ (95,930) Three months ended September 30, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 966,759 $ 183,898 $ 55,515 $ 17 $ (82,484) $ 1,123,705 Salaries, wages and benefits 437,508 152,793 30,192 — — 620,493 Other operating expenses 394,115 11,779 16,421 — (82,874) 339,441 General and administrative costs — — — 35,930 — 35,930 Lease expense 98,987 320 384 327 — 100,018 Depreciation and amortization expense 29,263 2,934 176 2,559 — 34,932 Interest expense 12,363 14 9 24,713 — 37,099 Loss on early extinguishment of debt — — — 2,460 — 2,460 Investment income — — — (2,071) — (2,071) Other income (131,811) — — — — (131,811) Transaction costs — — — 12,941 — 12,941 Long-lived asset impairments 16,037 — — — — 16,037 Equity in net loss (income) of unconsolidated affiliates — — — 2,932 (3,025) (93) Income (loss) before income tax benefit 110,297 16,058 8,333 (79,774) 3,415 58,329 Income tax benefit — — — (569) — (569) Net income (loss) $ 110,297 $ 16,058 $ 8,333 $ (79,205) $ 3,415 $ 58,898 Nine months ended September 30, 2020 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 2,560,593 $ 475,127 $ 199,058 $ — $ (247,616) $ 2,987,162 Salaries, wages and benefits 1,237,570 378,687 116,229 — — 1,732,486 Other operating expenses 1,132,321 24,440 58,623 — (247,965) 967,419 General and administrative costs — — — 124,558 — 124,558 Lease expense 277,506 878 1,380 898 — 280,662 Depreciation and amortization expense 71,479 5,099 612 7,140 (153) 84,177 Interest expense 42,069 27 29 63,480 (3,540) 102,065 Loss on early extinguishment of debt — — — 6,561 — 6,561 Investment income — — — (6,614) 3,540 (3,074) Other (income) loss (183,265) 621 205 — — (182,439) Transaction costs — — — 26,696 — 26,696 Long-lived asset impairments 159,200 — — — — 159,200 Federal stimulus - COVID-19 other income (204,977) (9,359) (2,377) — — (216,713) Equity in net income of unconsolidated affiliates — — — (6,419) (392) (6,811) Income (loss) before income tax benefit 28,690 74,734 24,357 (216,300) 894 (87,625) Income tax benefit — — — (1,060) — (1,060) Net income (loss) $ 28,690 $ 74,734 $ 24,357 $ (215,240) $ 894 $ (86,565) Nine months ended September 30, 2019 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 2,965,348 $ 571,875 $ 142,905 $ 234 $ (249,965) $ 3,430,397 Salaries, wages and benefits 1,336,298 464,740 88,024 — — 1,889,062 Other operating expenses 1,185,684 34,866 44,312 — (250,355) 1,014,507 General and administrative costs — — — 107,024 — 107,024 Lease expense 285,510 985 1,064 1,106 — 288,665 Depreciation and amortization expense 83,463 9,210 524 8,198 — 101,395 Interest expense 68,454 41 26 73,069 — 141,590 Loss on early extinguishment of debt — — — 2,436 — 2,436 Investment income — — — (6,078) — (6,078) Other (income) loss (172,126) (76) 61 — — (172,141) Transaction costs — — — 23,025 — 23,025 Long-lived asset impairments 16,937 — — — — 16,937 Equity in net loss (income) of unconsolidated affiliates — — — 4,318 (4,496) (178) Income (loss) before income tax benefit 161,128 62,109 8,894 (212,864) 4,886 24,153 Income tax benefit — — — (680) — (680) Net income (loss) $ 161,128 $ 62,109 $ 8,894 $ (212,184) $ 4,886 $ 24,833 The following table presents the segment assets as of September 30, 2020 compared to December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Inpatient services $ 3,670,154 $ 4,221,579 Rehabilitation therapy services 257,641 281,978 Other services 63,822 49,877 Corporate and eliminations 223,008 108,706 Total assets $ 4,214,625 $ 4,662,140 The following table presents segment goodwill as of September 30, 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 September 30, 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) | 9 Months Ended |
Sep. 30, 2020 | |
Property and Equipment | |
Schedule of property and equipment | Property and equipment consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Land, buildings and improvements $ 1,081,930 $ 1,004,447 Equipment, furniture and fixtures 357,032 386,248 Construction in progress 2,801 2,771 Gross property and equipment 1,441,763 1,393,466 Less: accumulated depreciation (422,824) (431,361) Net property and equipment $ 1,018,939 $ 962,105 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
Schedule of operating lease liability maturities | Year ending December 31, Operating Leases Finance Leases (1) 2020 (excluding the nine months ended September 30, 2020) $ 84,386 $ 1,735 2021 334,643 6,809 2022 334,691 6,603 2023 334,631 6,385 2024 340,676 6,149 Thereafter 2,671,792 34,861 Total lease payments 4,100,819 62,542 Less interest (1,774,019) (24,007) Total lease obligations 2,326,800 38,535 Less current portion (126,974) (2,958) Long-term lease obligations $ 2,199,826 $ 35,577 |
Schedule of finance lease liability maturities | Year ending December 31, Operating Leases Finance Leases (1) 2020 (excluding the nine months ended September 30, 2020) $ 84,386 $ 1,735 2021 334,643 6,809 2022 334,691 6,603 2023 334,631 6,385 2024 340,676 6,149 Thereafter 2,671,792 34,861 Total lease payments 4,100,819 62,542 Less interest (1,774,019) (24,007) Total lease obligations 2,326,800 38,535 Less current portion (126,974) (2,958) Long-term lease obligations $ 2,199,826 $ 35,577 (1) Finance lease payments include $37.2 million related to options to renew lease terms that are reasonably certain of being exercised. |
Schedule of leases | The following table provides lease costs and income by line item on the consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019 (in thousands): Three months ended September 30, Nine months ended September 30, Classification 2020 2019 2020 2019 Operating lease cost Lease expense $ 86,247 $ 100,018 $ 280,662 $ 288,665 Finance lease cost: Amortization of finance lease ROU assets Depreciation and amortization expense 968 1,734 2,950 15,222 Interest on finance lease obligations Interest expense 1,341 4,299 3,392 48,931 Total finance lease expense 2,309 6,033 6,342 64,153 Variable lease cost Other operating expenses 8,948 10,697 26,697 32,027 Short-term leases Other operating expenses 4,447 5,980 14,121 18,596 Sublease income Net revenues (1,853) - (4,290) - Total $ 100,098 $ 122,728 $ 323,532 $ 403,441 The following table provides remaining lease term and discount rates by lease classification as of September 30, 2020 and December 31, 2019: Lease Term and Discount Rate September 30, 2020 December 31, 2019 Weighted-average remaining lease term (years) Operating leases 12.0 12.6 Finance leases 9.7 10.2 Weighted-average discount rate Operating leases 10.0% 9.6% Finance leases 10.6% 12.2% The following table includes supplemental lease information for the nine months ended September 30, 2020 and 2019 (in thousands): Nine months ended September 30, Other information 2020 2019 Cash paid for amounts included in the measurement of lease obligations Operating cash flows from operating leases $ 266,713 $ 270,449 Operating cash flows from finance leases 5,570 45,286 Financing cash flows from finance leases 2,177 1,973 Right-of-use assets obtained in exchange for new lease obligations Operating leases 16,270 82,471 Finance leases 727 688 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt at September 30, 2020 and December 31, 2019 consisted of the following (in thousands): September 30, 2020 December 31, 2019 Asset based lending facilities, net of debt issuance costs of $6,575 and $8,615 at September 30, 2020 and December 31, 2019, respectively $ 278,425 $ 412,346 Term loan agreements, net of debt issuance costs of $660 and $1,084 and debt premium balance of $2,844 and $4,816 at September 30, 2020 and December 31, 2019, respectively 207,215 196,714 Real estate loans, net of debt issuance costs of $2,710 and $3,846 and debt premium balance of $12,080 and $19,328 at September 30, 2020 and December 31, 2019, respectively 228,713 265,700 HUD insured loans, net of debt issuance costs of $870 and $2,909 at September 30, 2020 and December 31, 2019, respectively 34,252 117,117 Notes payable 102,646 116,952 Mortgages and other secured debt (recourse) 6,142 6,369 Mortgages and other secured debt (non-recourse), net of debt issuance costs of $11,415 and $9,349 and debt premium balance of $1,348 and $1,422 at September 30, 2020 and December 31, 2019, respectively 696,998 498,222 1,554,391 1,613,420 Less: Current portion of long-term debt (10,693) (162,426) Long-term debt $ 1,543,698 $ 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 September 30, 2020 (dollars in thousands): Weighted Average ABL Credit Facilities Commitment Borrowings Interest Term loan facility $ 285,000 $ 285,000 6.50 % Revolving credit facility (Non-HUD) 168,000 — 6.50 % Revolving credit facility (HUD) 72,000 — 6.50 % Delayed draw term loan facility 22,500 — 12.00 % $ 547,500 $ 285,000 6.50 % |
Schedule of maturity of total debt | The maturity of total debt of $1,560.3 million, excluding debt issuance costs and other non-cash debt discounts and premiums, at September 30, 2020 is as follows (in thousands): Twelve months ended September 30, 2021 $ 10,691 2022 883,975 2023 213,090 2024 22,296 2025 10,085 Thereafter 420,212 Total debt maturity $ 1,560,349 |
Other Income (Tables)
Other Income (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Income | |
Summary of Net (Gain) Loss Recorded as Other Income | Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Gain on sale of owned assets (1) $ (6,242) $ (63,645) $ (104,037) $ (90,992) Loss recognized for exit costs associated with divestiture of operations (2) 652 6,725 10,961 14,647 Gain on lease termination or modification (3) (37,917) (74,891) (79,363) (95,796) Gain on landlord consideration credit (4) (10,000) — (10,000) — Total other income $ (53,507) $ (131,811) $ (182,439) $ (172,141) (1) The Company sold one and 14 owned skilled nursing facilities during the three and nine months ended September 30, 2020, respectively. The Company sold 10 and 15 owned skilled nursing facilities during the three and nine months ended September 30, 2019, respectively. The gain represents sale proceeds in excess of the carrying value of the assets sold. (2) The Company divested operations of one and 44 facilities, including the sold facilities noted above, in the three and nine months ended September 30, 2020, respectively. The Company divested operations of 22 and 41 facilities, including the sold facilities noted above, in the three and nine months ended September 30, 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 and nine months ended September 30, 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 September 30, 2020, the Company recognized a gain on the lease termination of 12 facilities totaling $18.2 million and a gain associated with lease modifications of $19.7 million. In the nine months ended September 30, 2020, the Company sold the leasehold rights of 13 facilities resulting in a gain of $10.7 million, terminated 24 divested facilities from various lease agreements resulting in a gain of $30.7 million, recognized a gain on the lease termination of 12 facilities totaling $18.2 million and a gain associated with lease modifications of $19.7 million. In the three and nine months ended September 30, 2019, the Company amended its master leases with Welltower, Omega, Second Spring, and certain other landlords to reflect the lease termination of 27 and 53 facilities, respectively. In conjunction with certain of these amendments, the Company reassessed the likelihood of exercising its renewal options and concluded that it no longer met the reasonably certain threshold. During the three and nine months ended September 30, 2019, these lease terminations and remeasurements resulted in a net gain of $74.9 million and $95.8 million, respectively. (4) The Company recorded a gain of $10.0 million in its consolidation accounting of the Cascade Partnership. The gain is associated with subordinated equity of the Cascade Partnership to be paid to the Company upon liquidation of the partnership. |
Assets Held for Sale (Tables)
Assets Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Current assets: Prepaid expenses $ — $ 1,171 Long-term assets: Property and equipment, net of accumulated depreciation of $3,015 and $2,201 at September 30, 2020 and December 31, 2019, respectively 11,554 16,306 Total assets $ 11,554 $ 17,477 Current liabilities: Current portion of long-term debt $ 400 $ 368 Long-term liabilities: Long-term debt 18,373 19,789 Total liabilities $ 18,773 $ 20,157 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value of Financial Instruments | |
Schedule of fair value of assets measured on a recurring basis | Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable September 30, Identical Assets Observable Inputs Inputs Assets: 2020 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 200,995 $ 200,995 $ — $ — Restricted cash and equivalents 96,543 96,543 — — Restricted investments in marketable securities 137,841 43,648 94,193 — Total $ 435,379 $ 341,186 $ 94,193 $ — 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 | September 30, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair Value Asset based lending facilities $ 278,425 $ 278,425 $ 412,346 $ 412,346 Term loan agreements 207,215 207,215 196,714 196,714 Real estate loans 228,713 228,713 265,700 265,700 HUD insured loans 34,252 34,252 117,117 117,117 Notes payable 102,646 102,646 116,952 116,952 Mortgages and other secured debt (recourse) 6,142 6,142 6,369 6,369 Mortgages and other secured debt (non-recourse) 696,998 696,998 498,222 498,222 $ 1,554,391 $ 1,554,391 $ 1,613,420 $ 1,613,420 |
Schedule of hierarchy of nonfinancial assets measured at fair value on a nonrecurring basis | Impairment Charges - Carrying Value Nine months ended September 30, 2020 September 30, 2020 Assets: Property and equipment, net $ 1,018,939 $ 7,100 Finance lease right-of-use assets, net 28,635 6,000 Operating lease right-of-use assets 1,817,603 146,100 Intangible assets, net 83,530 — Goodwill 85,642 — Impairment Charges - Carrying Value Nine months ended December 31, 2019 September 30, 2019 Assets: Property and equipment, net $ 962,105 $ 10,696 Finance lease right-of-use assets, net 37,097 — Operating lease right-of-use assets 2,399,505 6,241 Intangible assets, net 87,446 — Goodwill 85,642 — |
General Information - Descripti
General Information - Description of Business, Basis of Presentation and Going Concern Considerations (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020state | Sep. 30, 2019 | Sep. 30, 2020statefacility | Sep. 30, 2019 | Mar. 11, 2020 | |
Description of business | |||||
Repayment of payroll taxes through Dec 2021 (as a percent) | 50.00% | ||||
Repayment of payroll taxes through Dec 2022 (as a percent) | 50.00% | ||||
Revenue | Product Concentration Risk | |||||
Concentration risk | |||||
Concentration risk (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% | |
Rehabilitation therapy service | Revenue | Product Concentration Risk | |||||
Concentration risk | |||||
Concentration risk (as a percent) | 10.80% | 10.40% | 10.20% | 10.50% | |
Inpatient Services | |||||
Description of business | |||||
Number of skilled nursing, assisted/senior living and behavioral health centers through which inpatient services are provided | facility | 360 | ||||
Number of states with facilities | state | 25 | 25 | |||
Inpatient Services | Revenue | Product Concentration Risk | |||||
Concentration risk | |||||
Concentration risk (as a percent) | 83.90% | 86.00% | 85.60% | 86.30% |
General Information - Recent Ac
General Information - Recent Accounting Pronouncements (Details) | Sep. 30, 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 |
Accounting Standards Update 2019-12 | |
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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue Sources | ||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Medicare | ||||
Revenue Sources | ||||
Concentration Risk, Percentage | 20.00% | 19.00% | 20.00% | 20.00% |
Medicaid | ||||
Revenue Sources | ||||
Concentration Risk, Percentage | 61.00% | 59.00% | 61.00% | 58.00% |
Insurance | ||||
Revenue Sources | ||||
Concentration Risk, Percentage | 10.00% | 12.00% | 10.00% | 12.00% |
Private | ||||
Revenue Sources | ||||
Concentration Risk, Percentage | 7.00% | 8.00% | 7.00% | 8.00% |
Other | ||||
Revenue Sources | ||||
Concentration Risk, Percentage | 2.00% | 2.00% | 2.00% | 2.00% |
Revenue | Medicare and Medicaid | ||||
Revenue Sources | ||||
Concentration Risk, Percentage | 81.00% |
Certain Significant Risks and_4
Certain Significant Risks and Uncertainties - Concentration of Credit Risk (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)customer | |
Related Party Customer One | Rehabilitation therapy service | |
Concentration Risk | |
Contract receivables, net | $ | $ 31 |
Credit Concentration Risk [Member] | Accounts Receivable | Minimum | Rehabilitation Services | |
Concentration Risk | |
Number of distinct customers | customer | 150 |
Credit Concentration Risk [Member] | Related Party Customer One | Accounts Receivable | Rehabilitation therapy service | |
Concentration Risk | |
Concentration risk (as a percent) | 42.00% |
Significant Transactions and _2
Significant Transactions and Events - COVID-19 (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020 | Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | May 27, 2020facility | |
Unusual or Infrequent Item, or Both [Line Items] | |||||||
Number of facilities, COVID-19, patients, residents, and employees, positive cases | facility | 266 | ||||||
Number of facilities | facility | 360 | ||||||
Number of facilities, COVID-19, positive cases, concentration percentage, New Jersey, Connecticut, Massachusetts, Pennsylvania, and Maryland (as a percent) | 70.00% | ||||||
Number of facilities, operating beds, concentration percentage, New Jersey, Connecticut, Massachusetts, Pennsylvania, and Maryland (as a percent) | 45.00% | ||||||
Federal stimulus - COVID-19 other income | $ 31,212 | $ 216,713 | |||||
Medicare advance payments | 155,824 | ||||||
COVID 19 | |||||||
Unusual or Infrequent Item, or Both [Line Items] | |||||||
COVID-19 incremental operating expense | 52,000 | 205,000 | |||||
Federal stimulus - COVID-19 other income | 31,200 | 216,700 | |||||
Relief funds, liability, current | 32,100 | $ 32,100 | $ 32,100 | 32,100 | |||
Medicare advance payments | $ 156,800 | ||||||
Medicare advance payments, contract liability, current | 82,400 | 82,400 | 82,400 | 82,400 | |||
Medicare advance payments, contract liability, noncurrent | 73,400 | 73,400 | 73,400 | 73,400 | |||
Decrease in revenue | 71,000 | 145,000 | |||||
Relief grants | 57,900 | 254,000 | 190,900 | ||||
Coronavirus Aid, Relief, and Economic Security Act, payroll tax deferral program | 90,000 | 90,000 | 90,000 | 90,000 | |||
Coronavirus Aid, Relief, and Economic Security Act, payroll tax deferral program, amount realized | 65,000 | ||||||
COVID-19 state funding committed | $ 85,000 | 85,000 | 85,000 | 85,000 | |||
COVID-19 state funding committed, net revenue recognized | 76,000 | ||||||
Operating occupancy, skilled nursing facilities (as a percent) | 75.40% | 88.20% | |||||
Additional FMAP reimbursement relief | $ 30,000 | 76,000 | |||||
Revenue from suspension of sequestration | 3,100 | 5,200 | |||||
COVID 19 | Other long-term liabilities | |||||||
Unusual or Infrequent Item, or Both [Line Items] | |||||||
Deferred payroll taxes | $ 64,700 | $ 64,700 | $ 64,700 | $ 64,700 |
Significant Transactions and _3
Significant Transactions and Events - Strategic Partnerships - Variable Interest Entities (Details) $ in Thousands | Jul. 20, 2020USD ($)facility | Jul. 02, 2020USD ($)facilityOption | Jan. 10, 2020USD ($)facility | Sep. 12, 2019facility | Sep. 30, 2020USD ($)facility | Sep. 30, 2020USD ($)facility | Dec. 31, 2019USD ($) |
Variable Interest Entities | |||||||
Variable interest entity, gain associated with subordinated equity in consolidation | $ 10,000 | $ 10,000 | |||||
Gain on lease termination | 18,200 | 18,200 | |||||
Net property and equipment | 1,018,939 | 1,018,939 | $ 962,105 | ||||
Affiliates of Cascade Capital Group, LLC | |||||||
Variable Interest Entities | |||||||
Number of facilities acquired | facility | 8 | ||||||
Welltower, Inc. | |||||||
Variable Interest Entities | |||||||
Annual rent credits | $ 700 | ||||||
Gain on lease termination | $ 200 | ||||||
Affiliates of Cascade Capital Group, LLC | |||||||
Variable Interest Entities | |||||||
Number of facilities | facility | 9 | ||||||
Initial lease term | 10 years | ||||||
Number of renewal options | Option | 1 | ||||||
Option to extend | true | ||||||
Lease renewal term | 5 years | ||||||
Annual base rent | $ 20,700 | ||||||
No rent escalation period | 5 years | ||||||
Annual rent escalation (as a percent) | 2.50% | ||||||
Fixed price option to purchase facilities | $ 251,600 | ||||||
Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entities | |||||||
Net property and equipment | $ 741,700 | $ 741,700 | $ 535,900 | ||||
Vantage Point Partnership | |||||||
Variable Interest Entities | |||||||
Number of facilities acquired | facility | 1 | 18 | |||||
Variable interest entity, ownership interest (as a percent) | 30.00% | 30.00% | |||||
Purchase price of facilities acquired | $ 9,100 | ||||||
Net property and equipment | 9,100 | ||||||
Non-recourse debt | $ 7,300 | ||||||
Number of properties | facility | 19 | 19 | |||||
Cascade Partnership | |||||||
Variable Interest Entities | |||||||
Number of facilities acquired | facility | 9 | ||||||
Variable interest entity, equity interest | $ 20,300 | ||||||
Variable interest entity, ownership interest (as a percent) | 49.00% | ||||||
Variable interest entity, gain associated with subordinated equity in consolidation | $ 10,000 | ||||||
Purchase price of facilities acquired | 223,600 | ||||||
Net property and equipment | 208,600 | ||||||
Non-recourse debt | 190,300 | ||||||
Non-controlling interest | $ 21,200 |
Significant Transactions and _4
Significant Transactions and Events - Strategic Partnerships - Equity Method Investments (Details) $ in Thousands | May 15, 2020USD ($)facility | Feb. 01, 2020USD ($)facility | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)facility | Sep. 30, 2019USD ($) |
Equity Method Investments | ||||||
Investments in joint venture | $ 16,936 | |||||
Gain (loss) on early extinguishment of debt | $ (1,101) | $ (2,460) | $ (6,561) | $ (2,436) | ||
NewGen Partnership | ||||||
Equity Method Investments | ||||||
Repayments of loans | $ 33,700 | |||||
Ownership interest (as a percent) | 50.00% | 50.00% | 50.00% | |||
Investments in joint venture | $ 14,900 | |||||
Amount of finance provided to partnership | 9,000 | |||||
Facilities transitioned operational responsibility, gain (loss) on sale of assets and transition of leased facilities | 58,800 | |||||
Gain (loss) on early extinguishment of debt | $ (1,000) | |||||
Investment in unconsolidated joint venture | $ 23,900 | $ 23,900 | ||||
NewGen Partnership | Twenty-three Facilities in California, Washington and Nevada | ||||||
Equity Method Investments | ||||||
Number of facilities transitioned operational responsibility | facility | 23 | |||||
NewGen Partnership | Nineteen facilities in California, Washington and Nevada | ||||||
Equity Method Investments | ||||||
Number of facilities transitioned operational responsibility | facility | 19 | |||||
Number of facilities sold real estate and operations | facility | 6 | |||||
Number of facilities transferred operations | facility | 13 | |||||
Facilities transitioned operational responsibility, net transaction proceeds | $ 78,700 | |||||
NewGen Partnership | Four leased facilities in California | ||||||
Equity Method Investments | ||||||
Number of facilities transitioned operational responsibility | facility | 4 | |||||
Facilities transitioned operational responsibility, annual revenues | $ 55,000 | |||||
Facilities transitioned operational responsibility, pre-tax gain (loss) | $ (500) |
Significant Transactions and _5
Significant Transactions and Events - Divestiture of Non-Strategic Facilities - Owned Facilities (Details) $ in Thousands | Jul. 06, 2020USD ($) | Jul. 02, 2020USD ($)facility | Apr. 01, 2020USD ($)facility | Feb. 26, 2020USD ($)facility | Feb. 01, 2020USD ($)facility | Sep. 30, 2020USD ($)facility | Sep. 30, 2019USD ($)facility | Sep. 30, 2020USD ($)facility | Sep. 30, 2019USD ($)facility | Dec. 31, 2019facility |
Divestitures | ||||||||||
Gain (loss) on early extinguishment of debt | $ (1,101) | $ (2,460) | $ (6,561) | $ (2,436) | ||||||
Secured Debt | ||||||||||
Divestitures | ||||||||||
Gain (loss) on early extinguishment of debt | $ (1,400) | |||||||||
HUD insured loans | Secured Debt | ||||||||||
Divestitures | ||||||||||
Repayments of loans | $ 10,500 | 15,200 | $ 20,500 | $ 29,100 | ||||||
Gain (loss) on early extinguishment of debt | (400) | (2,600) | ||||||||
Mid Cap Real Estate Loans | ||||||||||
Divestitures | ||||||||||
Repayments of loans | $ 5,500 | |||||||||
Mid Cap Real Estate Loans | Secured Debt | ||||||||||
Divestitures | ||||||||||
Repayments of loans | $ 7,500 | |||||||||
One U.S. Department of Housing and Urban Development Insured Skilled Nursing Facility in California | ||||||||||
Divestitures | ||||||||||
Annual revenues | 14,000 | |||||||||
Pre-tax net income (loss) | $ (100) | |||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||||
Divestitures | ||||||||||
Number of facilities sold | facility | 1 | 10 | 14 | 15 | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Three Skilled Nursing Facilities, Two in North Carolina and One in Maryland | ||||||||||
Divestitures | ||||||||||
Consideration | 61,800 | |||||||||
Annual revenues | 38,700 | |||||||||
Pre-tax net income (loss) | 500 | |||||||||
Gain (loss) recognized in disposal group | $ 24,500 | |||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Three Skilled Nursing Facilities, Two in North Carolina and One in Maryland, Two in North Carolina | ||||||||||
Divestitures | ||||||||||
Number of facilities sold | facility | 2 | |||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Three Skilled Nursing Facilities, Two in North Carolina and One in Maryland, One in Maryland | ||||||||||
Divestitures | ||||||||||
Number of facilities sold | facility | 1 | |||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | One U.S. Department of Housing and Urban Development Insured Skilled Nursing Facility in California | ||||||||||
Divestitures | ||||||||||
Number of facilities sold | facility | 1 | |||||||||
Consideration | $ 20,800 | |||||||||
Gain (loss) recognized in disposal group | $ 3,000 | |||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Three Skilled Nursing Facilities, Two in New Jersey and One in Maryland | ||||||||||
Divestitures | ||||||||||
Number of facilities sold | facility | 3 | |||||||||
Consideration | $ 45,800 | |||||||||
Annual revenues | 35,800 | |||||||||
Gain (loss) recognized in disposal group | $ 21,800 | |||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Three Skilled Nursing Facilities, Two in New Jersey and One in Maryland, Two in New Jersey | ||||||||||
Divestitures | ||||||||||
Number of facilities sold | facility | 2 | |||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Three Skilled Nursing Facilities, Two in New Jersey and One in Maryland, One in Maryland | ||||||||||
Divestitures | ||||||||||
Number of facilities sold | facility | 1 | |||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | One Owned Skilled Nursing Facility in Rhode Island | ||||||||||
Divestitures | ||||||||||
Consideration | 10,500 | |||||||||
Annual revenues | 9,900 | |||||||||
Pre-tax net income (loss) | 200 | |||||||||
Gain (loss) recognized in disposal group | $ 6,100 | |||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | One Skilled Nursing Facility (Sold to Affiliate of Cascade Capital Group, LLC) | ||||||||||
Divestitures | ||||||||||
Number of facilities sold | facility | 1 | |||||||||
Consideration | $ 26,100 | |||||||||
Aggregate prepayment penalties and other closing costs | $ 1,000 | |||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||||||
Divestitures | ||||||||||
Number of facilities classified as held for sale | facility | 1 | |||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | One U.S. Department of Housing and Urban Development Insured Skilled Nursing Facility in California | ||||||||||
Divestitures | ||||||||||
Number of facilities classified as held for sale | facility | 1 |
Significant Transactions and _6
Significant Transactions and Events - Divestiture of Non-Strategic Facilities - Leased Facilities (Details) $ in Millions | Jun. 01, 2020USD ($)facility | Apr. 20, 2020USD ($)facility | Apr. 01, 2020USD ($)facility | Mar. 04, 2020USD ($)facility | Jan. 31, 2020USD ($)facility | Sep. 30, 2020USD ($)facility | Sep. 30, 2019facility | Sep. 30, 2020USD ($)facility | Sep. 30, 2019facility |
Leases | |||||||||
Number of facilities divested | facility | 1 | 22 | 44 | 41 | |||||
Gain on lease termination | $ 18.2 | $ 18.2 | |||||||
One Skilled Nursing Facility in Massachusetts, Omega Healthcare Investors, Inc. | |||||||||
Leases | |||||||||
Number of facilities sold by counterparty | facility | 1 | ||||||||
Gain on lease termination | $ 0.2 | ||||||||
Annual rent credit | $ 0.4 | ||||||||
Four Skilled Nursing Facilities in Idaho, Omega Healthcare Investors, Inc. | |||||||||
Leases | |||||||||
Number of facilities divested | facility | 4 | ||||||||
Annual revenues generated | $ 19.5 | ||||||||
Annual pre-tax income (loss) generated | 0.1 | ||||||||
Annual rent credit | $ 1.4 | ||||||||
One Assisted Senior Living Facility in Montana | |||||||||
Leases | |||||||||
Number of facilities divested | facility | 1 | ||||||||
Annual revenues generated | $ 2.5 | ||||||||
Annual pre-tax income (loss) generated | 0.1 | ||||||||
Annual rent credit | $ 0.7 | ||||||||
Two Skilled Nursing Facilities in Montana | |||||||||
Leases | |||||||||
Number of facilities divested | facility | 2 | ||||||||
Annual revenues generated | $ 18.8 | ||||||||
Annual pre-tax income (loss) generated | 0.4 | ||||||||
Annual rent credit | $ 1.1 | ||||||||
Six Skilled Nursing Facilities, Four in Florida and Two in Maryland, Second Spring Healthcare Investments | |||||||||
Leases | |||||||||
Number of facilities divested | facility | 6 | ||||||||
Annual revenues generated | $ 62 | ||||||||
Annual pre-tax income (loss) generated | (2.3) | ||||||||
Annual rent credit | $ 8.5 | ||||||||
Four Skilled Nursing Facilities in Florida, Second Spring Healthcare Investments | |||||||||
Leases | |||||||||
Number of facilities divested | facility | 4 | ||||||||
Two Skilled Nursing Facilities in Maryland, Second Spring Healthcare Investments | |||||||||
Leases | |||||||||
Number of facilities divested | facility | 2 |
Net Revenues and Accounts Rec_3
Net Revenues and Accounts Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of revenue | ||||
Net revenues | $ 3,430,397 | |||
Total net revenues | $ 938,653 | $ 1,123,705 | $ 2,987,162 | 3,430,397 |
Inpatient Services | ||||
Disaggregation of revenue | ||||
Net revenues | 787,073 | 966,011 | 2,963,001 | |
Total net revenues | 787,073 | 966,011 | 2,558,351 | 2,963,001 |
Rehabilitation therapy service | ||||
Disaggregation of revenue | ||||
Net revenues | 101,517 | 116,300 | 303,510 | 358,075 |
Total net revenues | 101,517 | 116,300 | 303,510 | |
Other Services | ||||
Disaggregation of revenue | ||||
Net revenues | 50,063 | 41,394 | 125,301 | 109,321 |
Total net revenues | 50,063 | 41,394 | 125,301 | |
Medicare | ||||
Disaggregation of revenue | ||||
Net revenues | 178,542 | 210,136 | 583,471 | 664,855 |
Medicare | Inpatient Services | ||||
Disaggregation of revenue | ||||
Net revenues | 155,374 | 187,493 | 518,892 | 596,468 |
Medicare | Rehabilitation therapy service | ||||
Disaggregation of revenue | ||||
Net revenues | 23,168 | 22,643 | 64,579 | 68,387 |
Medicaid | ||||
Disaggregation of revenue | ||||
Net revenues | 477,768 | 572,660 | 1,537,572 | 1,731,835 |
Medicaid | Inpatient Services | ||||
Disaggregation of revenue | ||||
Net revenues | 477,295 | 572,100 | 1,536,155 | 1,730,147 |
Medicaid | Rehabilitation therapy service | ||||
Disaggregation of revenue | ||||
Net revenues | 473 | 560 | 1,417 | 1,688 |
Insurance | ||||
Disaggregation of revenue | ||||
Net revenues | 86,094 | 116,982 | 275,367 | 367,831 |
Insurance | Inpatient Services | ||||
Disaggregation of revenue | ||||
Net revenues | 80,242 | 111,529 | 259,237 | 351,228 |
Insurance | Rehabilitation therapy service | ||||
Disaggregation of revenue | ||||
Net revenues | 5,852 | 5,453 | 16,130 | 16,603 |
Private | ||||
Disaggregation of revenue | ||||
Net revenues | 57,790 | 77,506 | 194,131 | 233,769 |
Private | Inpatient Services | ||||
Disaggregation of revenue | ||||
Net revenues | 57,788 | 77,440 | 193,982 | 233,499 |
Private | Rehabilitation therapy service | ||||
Disaggregation of revenue | ||||
Net revenues | 2 | 66 | 149 | 270 |
Assisted living | Inpatient Services | ||||
Disaggregation of revenue | ||||
Revenue not accounted for under Topic 606 | 19,100 | 23,100 | 61,000 | 70,400 |
Third party providers | ||||
Disaggregation of revenue | ||||
Net revenues | 84,656 | 102,336 | 268,471 | 321,068 |
Third party providers | Rehabilitation therapy service | ||||
Disaggregation of revenue | ||||
Net revenues | 63,954 | 85,051 | 203,616 | 262,689 |
Third party providers | Other Services | ||||
Disaggregation of revenue | ||||
Net revenues | 20,702 | 17,285 | 64,855 | 58,379 |
Other | ||||
Disaggregation of revenue | ||||
Net revenues | 53,803 | 44,085 | 128,150 | 111,039 |
Other | Inpatient Services | ||||
Disaggregation of revenue | ||||
Net revenues | 16,374 | 17,449 | 50,085 | 51,659 |
Other | Rehabilitation therapy service | ||||
Disaggregation of revenue | ||||
Net revenues | 8,068 | 2,527 | 17,619 | 8,438 |
Other | Other Services | ||||
Disaggregation of revenue | ||||
Net revenues | $ 29,361 | $ 24,109 | $ 60,446 | $ 50,942 |
Earnings (Loss) Per Share - Gen
Earnings (Loss) Per Share - General Information (Details) shares in Millions | 9 Months Ended | |
Sep. 30, 2020classshares | Sep. 30, 2019shares | |
Class of Stock [Line Items] | ||
Number of classes of common stock | class | 3 | |
Class C Common Stock | ||
Class of Stock [Line Items] | ||
Voting ratio | 1 | |
Number of units exchanged | 0.8 | 3.2 |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Number of shares converted | 0.8 | 3.2 |
Earnings (Loss) Per Share - Cal
Earnings (Loss) Per Share - Calculation of Basic Net (Loss) Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||||||
Net (loss) income | $ (95,930) | $ (29,316) | $ 38,681 | $ 58,898 | $ (8,983) | $ (25,082) | $ (86,565) | $ 24,833 |
Less: Net loss (income) attributable to noncontrolling interests | 33,137 | (12,801) | 35,275 | 1,182 | ||||
Net income (loss) attributable to Genesis Healthcare, Inc. | (62,793) | 46,097 | (51,290) | 26,015 | ||||
Net (loss) income attributable to Genesis Healthcare, Inc. - basic | $ (62,793) | $ 46,097 | $ (51,290) | $ 26,015 | ||||
Denominator: | ||||||||
Weighted-average shares outstanding for basic net (loss) income per share (in shares) | 113,145 | 109,123 | 111,372 | 106,581 | ||||
Basic net (loss) income per common share | ||||||||
Basic net income (loss) per common share attributable to Genesis Healthcare, Inc. (in dollars per share) | $ (0.55) | $ 0.42 | $ (0.46) | $ 0.24 |
Earnings (Loss) Per Share - C_2
Earnings (Loss) Per Share - Calculation of Diluted Net (Loss) Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||||||
Net (loss) income | $ (95,930) | $ (29,316) | $ 38,681 | $ 58,898 | $ (8,983) | $ (25,082) | $ (86,565) | $ 24,833 |
Less: Net loss (income) attributable to noncontrolling interests | 33,137 | (12,801) | 35,275 | 1,182 | ||||
Net income (loss) attributable to Genesis Healthcare, Inc. | (62,793) | 46,097 | (51,290) | 26,015 | ||||
Net (loss) income attributable to Genesis Healthcare, Inc. - basic | (62,793) | 46,097 | (51,290) | 26,015 | ||||
Plus: Assumed conversion of noncontrolling interests | 20,179 | 8,060 | ||||||
Net (loss) income available to common stockholders after assumed conversions | $ (62,793) | $ 66,276 | $ (51,290) | $ 34,075 | ||||
Denominator: | ||||||||
Weighted-average shares outstanding for basic net income (loss) per share | 113,145 | 109,123 | 111,372 | 106,581 | ||||
Plus: Assumed conversion of noncontrolling interests | 56,605 | 57,313 | ||||||
Plus: Unvested restricted stock units and stock warrants | 274 | 689 | ||||||
Adjusted weighted-average common shares outstanding, diluted | 113,145 | 166,002 | 111,372 | 164,583 | ||||
Diluted net (loss) income per common share | ||||||||
Diluted net (loss) income per common share attributable to Genesis Healthcare, Inc. (in dollars per share) | $ (0.55) | $ 0.40 | $ (0.46) | $ 0.21 |
Earnings (Loss) Per Share - Ant
Earnings (Loss) Per Share - Antidilutive Securities (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings (Loss) Per Share | |||
Antidilutive shares | 55.4 | 56 | |
Number of units attributed to the noncontrolling interests outstanding | 55.4 | 56.5 |
Earnings (Loss) Per Share - Omn
Earnings (Loss) Per Share - Omnibus Equity Incentive Plans (Details) | Jun. 03, 2020shares |
2020 Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares authorized (in shares) | 6,462,605 |
Additional shares authorized (in shares) | 3,500,000 |
2015 Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Available for issuance under prior plan (in shares) | 2,962,605 |
Segment Information - Segment R
Segment Information - Segment Reporting (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020USD ($)segment | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($)segment | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($)segment | |
Segment Reporting Information | ||||||||
Number of reportable segments | segment | 3 | 3 | 3 | 3 | ||||
Net revenues | $ 3,430,397 | |||||||
Net revenues | $ 938,653 | $ 1,123,705 | $ 2,987,162 | 3,430,397 | ||||
Increase (Decrease) in Net Revenue From Prior Period | (185,052) | (443,235) | ||||||
Salaries, wages and benefits | 535,009 | 620,493 | 1,732,486 | 1,889,062 | ||||
Other operating expenses | 309,664 | 339,441 | 967,419 | 1,014,507 | ||||
General and administrative costs | 45,172 | 35,930 | 124,558 | 107,024 | ||||
Lease expense | 86,247 | 100,018 | 280,662 | 288,665 | ||||
Depreciation and amortization expense | 24,373 | 34,932 | 84,177 | 101,395 | ||||
Interest expense | 33,918 | 37,099 | 102,065 | 141,590 | ||||
Loss on early extinguishment of debt | 1,101 | 2,460 | 6,561 | 2,436 | ||||
Investment income | (957) | (2,071) | (3,074) | (6,078) | ||||
Other (income) loss | (53,507) | (131,811) | (182,439) | (172,141) | ||||
Transaction costs | 15,561 | 12,941 | 26,696 | 23,025 | ||||
Long-lived asset impairments | 72,400 | 16,037 | 159,200 | 16,937 | ||||
Federal stimulus - COVID-19 other income | (31,212) | (216,713) | ||||||
Equity in net loss (income) of unconsolidated affiliates | (3,362) | (93) | (6,811) | (178) | ||||
(Loss) income before income tax expense (benefit) | (95,754) | 58,329 | (87,625) | 24,153 | ||||
Income tax expense (benefit) | 176 | (569) | (1,060) | (680) | ||||
Net (loss) income | $ (95,930) | $ (29,316) | $ 38,681 | $ 58,898 | $ (8,983) | $ (25,082) | $ (86,565) | $ 24,833 |
Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (16.50%) | (12.90%) | ||||||
Inpatient Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 787,073 | $ 966,011 | $ 2,963,001 | |||||
Net revenues | 787,073 | $ 966,011 | $ 2,558,351 | $ 2,963,001 | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ (178,938) | $ (404,650) | ||||||
Inpatient Services | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 83.90% | 86.00% | 85.60% | 86.30% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (18.50%) | (13.70%) | ||||||
Inpatient Services | Skilled Nursing Facilities | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 766,782 | $ 941,722 | $ 2,493,616 | $ 2,888,659 | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ (174,940) | $ (395,043) | ||||||
Inpatient Services | Skilled Nursing Facilities | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 81.80% | 83.80% | 83.50% | 84.10% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (18.60%) | (13.70%) | ||||||
Inpatient Services | Assisted Senior Living Facilities | ||||||||
Segment Reporting Information | ||||||||
Revenues outside scope of ASC 606 | $ 60,991 | $ 70,408 | ||||||
Net revenues | $ 19,128 | $ 23,057 | ||||||
Increase (Decrease) in Net Revenue From Prior Period | $ (3,929) | $ (9,417) | ||||||
Inpatient Services | Assisted Senior Living Facilities | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 2.00% | 2.10% | 2.00% | 2.10% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (17.00%) | (13.40%) | ||||||
Inpatient Services | Administration of third party facilities | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 1,835 | $ 1,980 | $ 5,986 | $ 6,281 | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ (145) | $ (295) | ||||||
Inpatient Services | Administration of third party facilities | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 0.20% | 0.20% | 0.20% | 0.20% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (7.30%) | (4.70%) | ||||||
Rehabilitation therapy service | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 101,517 | $ 116,300 | $ 303,510 | $ 358,075 | ||||
Net revenues | 101,517 | $ 116,300 | 303,510 | |||||
Increase (Decrease) in Net Revenue From Prior Period | $ (14,783) | $ (54,565) | ||||||
Rehabilitation therapy service | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 10.80% | 10.40% | 10.20% | 10.50% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (12.70%) | (15.20%) | ||||||
Rehabilitation therapy service | Therapy Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 156,706 | $ 183,898 | $ 475,127 | $ 571,875 | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ (27,192) | $ (96,748) | ||||||
Rehabilitation therapy service | Therapy Services | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 16.70% | 16.40% | 15.90% | 16.70% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (14.80%) | (16.90%) | ||||||
Other Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 50,063 | $ 41,394 | $ 125,301 | $ 109,321 | ||||
Net revenues | 50,063 | $ 41,394 | 125,301 | |||||
Increase (Decrease) in Net Revenue From Prior Period | $ 8,669 | $ 15,980 | ||||||
Other Services | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 5.30% | 3.60% | 4.20% | 3.20% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 20.90% | 14.60% | ||||||
Other Services | Other Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 73,276 | $ 55,532 | $ 199,058 | $ 143,139 | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ 17,744 | $ 55,919 | ||||||
Other Services | Other Services | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | 7.80% | 4.90% | 6.70% | 4.20% | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 32.00% | 39.10% | ||||||
Operating Segments | Inpatient Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ 787,745 | $ 966,759 | $ 2,560,593 | $ 2,965,348 | ||||
Salaries, wages and benefits | 375,352 | 437,508 | 1,237,570 | 1,336,298 | ||||
Other operating expenses | 362,212 | 394,115 | 1,132,321 | 1,185,684 | ||||
Lease expense | 85,245 | 98,987 | 277,506 | 285,510 | ||||
Depreciation and amortization expense | 20,301 | 29,263 | 71,479 | 83,463 | ||||
Interest expense | 15,674 | 12,363 | 42,069 | 68,454 | ||||
Other (income) loss | (54,052) | (131,811) | (183,265) | (172,126) | ||||
Long-lived asset impairments | 72,400 | 16,037 | 159,200 | 16,937 | ||||
Federal stimulus - COVID-19 other income | (27,002) | (204,977) | ||||||
(Loss) income before income tax expense (benefit) | (62,385) | 110,297 | 28,690 | 161,128 | ||||
Net (loss) income | (62,385) | 110,297 | 28,690 | 161,128 | ||||
Operating Segments | Rehabilitation therapy service | ||||||||
Segment Reporting Information | ||||||||
Net revenues | 156,706 | 183,898 | 475,127 | 571,875 | ||||
Salaries, wages and benefits | 122,134 | 152,793 | 378,687 | 464,740 | ||||
Other operating expenses | 7,178 | 11,779 | 24,440 | 34,866 | ||||
Lease expense | 253 | 320 | 878 | 985 | ||||
Depreciation and amortization expense | 1,736 | 2,934 | 5,099 | 9,210 | ||||
Interest expense | 14 | 27 | 41 | |||||
Other (income) loss | 620 | 621 | (76) | |||||
Federal stimulus - COVID-19 other income | (4,210) | (9,359) | ||||||
(Loss) income before income tax expense (benefit) | 28,995 | 16,058 | 74,734 | 62,109 | ||||
Net (loss) income | 28,995 | 16,058 | 74,734 | 62,109 | ||||
Operating Segments | Other Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | 73,276 | 55,515 | 199,058 | 142,905 | ||||
Salaries, wages and benefits | 37,523 | 30,192 | 116,229 | 88,024 | ||||
Other operating expenses | 19,447 | 16,421 | 58,623 | 44,312 | ||||
Lease expense | 450 | 384 | 1,380 | 1,064 | ||||
Depreciation and amortization expense | 206 | 176 | 612 | 524 | ||||
Interest expense | 10 | 9 | 29 | 26 | ||||
Other (income) loss | (75) | 205 | 61 | |||||
Federal stimulus - COVID-19 other income | (2,377) | |||||||
(Loss) income before income tax expense (benefit) | 15,715 | 8,333 | 24,357 | 8,894 | ||||
Net (loss) income | 15,715 | 8,333 | 24,357 | 8,894 | ||||
Corporate, Non-Segment | ||||||||
Segment Reporting Information | ||||||||
Net revenues | 17 | 234 | ||||||
General and administrative costs | 45,172 | 35,930 | 124,558 | 107,024 | ||||
Lease expense | 299 | 327 | 898 | 1,106 | ||||
Depreciation and amortization expense | 2,245 | 2,559 | 7,140 | 8,198 | ||||
Interest expense | 19,414 | 24,713 | 63,480 | 73,069 | ||||
Loss on early extinguishment of debt | 1,101 | 2,460 | 6,561 | 2,436 | ||||
Investment income | (2,137) | (2,071) | (6,614) | (6,078) | ||||
Transaction costs | 15,561 | 12,941 | 26,696 | 23,025 | ||||
Equity in net loss (income) of unconsolidated affiliates | (2,310) | 2,932 | (6,419) | 4,318 | ||||
(Loss) income before income tax expense (benefit) | (79,345) | (79,774) | (216,300) | (212,864) | ||||
Income tax expense (benefit) | 176 | (569) | (1,060) | (680) | ||||
Net (loss) income | (79,521) | (79,205) | (215,240) | (212,184) | ||||
Elimination | ||||||||
Segment Reporting Information | ||||||||
Net revenues | (79,074) | (82,484) | (247,616) | (249,965) | ||||
Other operating expenses | (79,173) | (82,874) | (247,965) | (250,355) | ||||
Depreciation and amortization expense | (115) | (153) | ||||||
Interest expense | (1,180) | (3,540) | ||||||
Investment income | 1,180 | 3,540 | ||||||
Equity in net loss (income) of unconsolidated affiliates | (1,052) | (3,025) | (392) | (4,496) | ||||
(Loss) income before income tax expense (benefit) | 1,266 | 3,415 | 894 | 4,886 | ||||
Net (loss) income | 1,266 | 3,415 | 894 | 4,886 | ||||
Elimination | Inpatient Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | (672) | $ (748) | (2,242) | $ (2,347) | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ 76 | $ 105 | ||||||
Elimination | Inpatient Services | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | (0.10%) | 0.00% | (0.10%) | (0.10%) | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 10.20% | 4.50% | ||||||
Elimination | Rehabilitation therapy service | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ (55,189) | $ (67,598) | $ (171,617) | $ (213,800) | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ 12,409 | $ 42,183 | ||||||
Elimination | Rehabilitation therapy service | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | (5.90%) | (6.00%) | (5.70%) | (6.20%) | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 18.40% | 19.70% | ||||||
Elimination | Other Services | Other Services | ||||||||
Segment Reporting Information | ||||||||
Net revenues | $ (23,213) | $ (14,138) | $ (73,757) | $ (33,818) | ||||
Increase (Decrease) in Net Revenue From Prior Period | $ (9,075) | $ (39,939) | ||||||
Elimination | Other Services | Other Services | Product Concentration Risk | Revenue | ||||||||
Segment Reporting Information | ||||||||
Concentration Risk, Percentage | (2.50%) | (1.30%) | (2.50%) | (1.00%) | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (64.20%) | (118.10%) |
Segment Information - Assets an
Segment Information - Assets and Goodwill by Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | $ 4,214,625 | $ 4,662,140 |
Corporate and Eliminations | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 223,008 | 108,706 |
Inpatient Services | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 3,670,154 | 4,221,579 |
Rehabilitation therapy service | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 257,641 | 281,978 |
Other Services | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | $ 63,822 | $ 49,877 |
Segment Information - Segment G
Segment Information - Segment Goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 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 | Sep. 30, 2020 | Dec. 31, 2019 |
Property and Equipment | ||
Gross property and equipment | $ 1,441,763 | $ 1,393,466 |
Less accumulated depreciation | (422,824) | (431,361) |
Net property and equipment | 1,018,939 | 962,105 |
Land, buildings and improvements | ||
Property and Equipment | ||
Gross property and equipment | 1,081,930 | 1,004,447 |
Equipment, furniture and fixtures | ||
Property and Equipment | ||
Gross property and equipment | 357,032 | 386,248 |
Construction in progress | ||
Property and Equipment | ||
Gross property and equipment | $ 2,801 | $ 2,771 |
Property and Equipment - Consol
Property and Equipment - Consolidated VIEs (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Property and Equipment | ||
Net property and equipment | $ 1,018,939 | $ 962,105 |
Variable Interest Entity, Primary Beneficiary | ||
Property and Equipment | ||
Net property and equipment | $ 741,700 | $ 535,900 |
Property and Equipment - Facili
Property and Equipment - Facilities Purchased and Sold (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)facility | |
Property and Equipment | |
Skilled nursing facilities purchased, number | 9 |
Skilled nursing facilities sold, number | 14 |
Property and equipment, additions (disposals) from facilities purchased and sold, net | $ | $ 104.6 |
Property and Equipment - Impair
Property and Equipment - Impairment (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Property and Equipment | |
Property and equipment, impairment charges | $ 7.1 |
Leases - General Information (D
Leases - General Information (Details) | 9 Months Ended |
Sep. 30, 2020item | |
Leases | |
Percentage of centers that are leased properties (as a percent) | 72.00% |
Percentage of centers under master lease agreements (as a percent) | 39.00% |
Number of landlords with master lease agreements | 4 |
Leases - Terms and Lease Transa
Leases - Terms and Lease Transactions (Details) | 9 Months Ended |
Sep. 30, 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 - Fixed-price Options (D
Leases - Fixed-price Options (Details) | Sep. 30, 2020facility |
Leases | |
Fixed-price options to purchase facilities, number of facilities | 66 |
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 | 43 |
Leases - Finance Leases - Impai
Leases - Finance Leases - Impairment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Income and Expenses, Lessee [Abstract] | ||
Finance lease right-of-use assets, net, Impairment charges | $ 72.4 | $ 152.1 |
Leases - Operating Leases - Mat
Leases - Operating Leases - Maturity (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Maturity of operating lease obligations | |
2020 (excluding the six months ended June 30, 2020) | $ 84,386 |
2021 | 334,643 |
2022 | 334,691 |
2023 | 334,631 |
2024 | 340,676 |
Thereafter | 2,671,792 |
Total operating lease payments | $ 4,100,819 |
Leases - Operating Leases - Tot
Leases - Operating Leases - Total Lease Obligation (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Operating leases | ||
Total operating lease payments | $ 4,100,819 | |
Less interest | (1,774,019) | |
Total operating lease obligations | 2,326,800 | |
Less current portion | (126,974) | $ (140,887) |
Long-term operating lease obligations | $ 2,199,826 | $ 2,681,403 |
Leases - Finance Leases - Matur
Leases - Finance Leases - Maturity (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Maturity of finance lease obligations | |
2020 (excluding the six months ended June 30, 2020) | $ 1,735 |
2021 | 6,809 |
2022 | 6,603 |
2023 | 6,385 |
2024 | 6,149 |
Thereafter | 34,861 |
Total finance lease payments | $ 62,542 |
Leases - Finance Leases - Total
Leases - Finance Leases - Total Lease Obligation (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Finance leases | ||
Total finance lease payments | $ 62,542 | |
Less interest | (24,007) | |
Total finance lease obligations | 38,535 | |
Less current portion | (2,958) | $ (2,839) |
Long-term finance lease obligations | $ 35,577 | $ 39,335 |
Leases - Finance Leases - Addit
Leases - Finance Leases - Additional Information (Details) $ in Millions | Sep. 30, 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) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Lease cost | ||||
Operating lease cost | $ 86,247 | $ 100,018 | $ 280,662 | $ 288,665 |
Amortization of finance lease right-of-use assets | 968 | 1,734 | 2,950 | 15,222 |
Interest on finance lease liabilities | 1,341 | 4,299 | 3,392 | 48,931 |
Total finance lease expense | 2,309 | 6,033 | 6,342 | 64,153 |
Variable lease cost | 8,948 | 10,697 | 26,697 | 32,027 |
Short-term leases | 4,447 | 5,980 | 14,121 | 18,596 |
Sublease income | (1,853) | (4,290) | ||
Total lease cost | $ 100,098 | $ 122,728 | $ 323,532 | $ 403,441 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Sep. 30, 2020 | Dec. 31, 2019 |
Leases | ||
Weighted-average remaining lease term (years) - operating leases | 12 years | 12 years 7 months 6 days |
Weighted-average remaining lease term (years) - finance leases | 9 years 8 months 12 days | 10 years 2 months 12 days |
Weighted-average discount rate - operating leases | 10.00% | 9.60% |
Weighted-average discount rate - finance leases | 10.60% | 12.20% |
Leases - Other Information (Det
Leases - Other Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Leases | ||
Operating cash flows from operating leases | $ 266,713 | $ 270,449 |
Operating cash flows from finance leases | 5,570 | 45,286 |
Financing cash flows from finance leases | 2,177 | 1,973 |
Right-of-use assets obtained in exchange for new lease obligations, operating leases | 16,270 | 82,471 |
Right-of-use assets obtained in exchange for new lease obligations, finance leases | $ 727 | $ 688 |
Leases - Lease Covenants (Detai
Leases - Lease Covenants (Details) | 9 Months Ended |
Sep. 30, 2020facilityagreement | |
Leases | |
Number of leases with unmet financial covenants | agreement | 2 |
Number of facilities under leases with unmet financial covenants | facility | 4 |
Long-Term Debt - General Inform
Long-Term Debt - General Information (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Long-term debt | ||
Total long-term debt | $ 1,554,391 | $ 1,613,420 |
Current installments of long-term debt | (10,693) | (162,426) |
Long-term debt | 1,543,698 | 1,450,994 |
ABL Credit Facilities | ||
Long-term debt | ||
Total long-term debt | 278,425 | 412,346 |
Debt issuance costs | 6,575 | 8,615 |
Term Loan | ||
Long-term debt | ||
Total long-term debt | 207,215 | 196,714 |
Debt issuance costs | 660 | 1,084 |
Debt premium | 2,844 | 4,816 |
Real estate loans | ||
Long-term debt | ||
Total long-term debt | 228,713 | 265,700 |
Debt issuance costs | 2,710 | 3,846 |
Debt premium | 12,080 | 19,328 |
HUD insured loans | ||
Long-term debt | ||
Total long-term debt | 34,252 | 117,117 |
Debt issuance costs | 870 | 2,909 |
Welltower Notes | ||
Long-term debt | ||
Total long-term debt | 102,646 | 116,952 |
Mortgages and other secured debt (recourse) | ||
Long-term debt | ||
Total long-term debt | 6,142 | 6,369 |
Mortgages and other secured debt (non-recourse) | ||
Long-term debt | ||
Total long-term debt | 696,998 | 498,222 |
Debt issuance costs | 11,415 | 9,349 |
Debt premium | $ 1,348 | $ 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 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2020 | Dec. 23, 2016 | Nov. 01, 2016 |
Debt Instrument [Line Items] | |||||||
Payment of first lien term loan facility | $ 3,667,222 | $ 3,518,465 | |||||
Borrowings | $ 285,000 | 285,000 | |||||
Total borrowing base capacity | 547,500 | 547,500 | |||||
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 | ||||||
Cash proceeds | 51,100 | ||||||
Restricted Cash and Cash Equivalents | $ 51,100 | $ 51,100 | |||||
Term Loan And Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Termination fees, if loan repaid after year two (as a percent) | 1.50% | 1.50% | |||||
First Lien Term Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument exit fees amount | $ 1,600 | ||||||
Borrowings | $ 285,000 | 285,000 | |||||
Total borrowing base capacity | 285,000 | 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] | |||||||
Total borrowing base capacity | 168,000 | 168,000 | |||||
HUD Tranche | |||||||
Debt Instrument [Line Items] | |||||||
Total borrowing base capacity | 72,000 | 72,000 | |||||
Delayed Draw Term Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Promissory note | 22,500 | $ 22,500 | |||||
Commitment fee rate (as percentage) | 2.00% | ||||||
Total borrowing base capacity | 22,500 | $ 22,500 | |||||
Delayed Draw Term Loan Facility | Forecast | |||||||
Debt Instrument [Line Items] | |||||||
Promissory note | $ 20,000 | ||||||
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 | 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 | 285,000 | $ 285,000 | |||||
Total borrowing base capacity | 332,400 | 332,400 | |||||
Available borrowing capacity under the ABL Credit Facilities | $ 47,400 | $ 47,400 |
Long-Term Debt - New Asset Ba_2
Long-Term Debt - New Asset Based Lending Facilities - Borrowings and Interest Rates (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Debt Instrument [Line Items] | |
Borrowings | $ 285,000 |
Weighted Average Interest | 6.50% |
First Lien Term Loan Facility | |
Debt Instrument [Line Items] | |
Borrowings | $ 285,000 |
Weighted Average Interest | 6.50% |
Revolving credit facility (Non-HUD) | |
Debt Instrument [Line Items] | |
Weighted Average Interest | 6.50% |
HUD Tranche | |
Debt Instrument [Line Items] | |
Weighted Average Interest | 6.50% |
Delayed Draw Term Loan Facility | |
Debt Instrument [Line Items] | |
Weighted Average Interest | 12.00% |
Long-Term Debt - Term Loan Agre
Long-Term Debt - Term Loan Agreement (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 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 | $ 205 | |||
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 | Oct. 30, 2020USD ($)facility | Nov. 08, 2018USD ($)loan | Mar. 31, 2020USD ($) | Sep. 30, 2020USD ($)facilityloan | Dec. 31, 2019USD ($)facility | Mar. 30, 2018USD ($)loan |
Long-term debt | ||||||
Repayments of Debt | $ 27.1 | $ 39.8 | ||||
Number of facilities divested or closed | facility | 6 | |||||
Outstanding principal balance | $ 14.3 | $ 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 | 7 | |||||
Number of facilities divested or closed | facility | 5 | |||||
Mid Cap Real Estate Loans | Subsequent Events | ||||||
Long-term debt | ||||||
Repayments of Debt | $ 14.3 | |||||
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 | $ 205 | |||||
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 | |||||
VERMONT | Mid Cap Real Estate Loans | Subsequent Events | ||||||
Long-term debt | ||||||
Number of facilities divested or closed | facility | 3 |
Long-Term Debt - HUD Insured Lo
Long-Term Debt - HUD Insured Loans (Details) $ in Thousands | Oct. 30, 2020USD ($)facility | Feb. 26, 2020facility | Sep. 30, 2020USD ($)facility | Sep. 30, 2019facility | Sep. 30, 2020USD ($)facility | Sep. 30, 2019USD ($)facility | Dec. 31, 2019USD ($)facility |
Long-term debt | |||||||
Weighted Average Interest | 6.50% | 6.50% | |||||
Number of facilities divested or closed | 6 | ||||||
Debt instrument retired | $ | $ 167,489 | $ 133,913 | |||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Long-term debt | |||||||
Number of Facilities Sold | 1 | 10 | 14 | 15 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Skilled Nursing Facilities Subject to US Department of Housing and Urban Development Financing | |||||||
Long-term debt | |||||||
Number of Facilities Sold | 9 | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | One U.S. Department of Housing and Urban Development Insured Skilled Nursing Facility in California | |||||||
Long-term debt | |||||||
Number of Facilities Sold | 1 | ||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | |||||||
Long-term debt | |||||||
Number of facilities classified as held for sale | 1 | ||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | One U.S. Department of Housing and Urban Development Insured Skilled Nursing Facility in California | |||||||
Long-term debt | |||||||
Number of facilities classified as held for sale | 1 | ||||||
HUD insured loans | |||||||
Long-term debt | |||||||
Principal balance outstanding | $ | $ 54,400 | $ 54,400 | $ 140,600 | ||||
Debt instrument average remaining term (in years) | 28 years 2 months 12 days | ||||||
Weighted Average Interest | 3.30% | 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 | $ | $ 85,000 | ||||||
HUD insured loans | Minimum | |||||||
Long-term debt | |||||||
Term of debt | 30 years | ||||||
Fixed interest rate | 3.00% | 3.00% | |||||
HUD insured loans | Maximum | |||||||
Long-term debt | |||||||
Term of debt | 35 years | ||||||
Fixed interest rate | 3.50% | 3.50% | |||||
HUD insured loans | Subsequent Events | |||||||
Long-term debt | |||||||
Debt instrument retired | $ | $ 8,100 | ||||||
HUD insured loans | Skilled Nursing Facilities | |||||||
Long-term debt | |||||||
Number of debt instruments insured by HUD | 7 | ||||||
HUD insured loans | Prepaid Expenses and Other Current Assets | |||||||
Long-term debt | |||||||
Escrow reserve funds | $ | $ 4,600 | $ 4,600 | |||||
HUD insured loans | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||||
Long-term debt | |||||||
Principal balance outstanding | $ | $ 19,300 | $ 19,300 | |||||
Number of facilities financed by HUD | 2 | ||||||
VERMONT | HUD insured loans | Subsequent Events | |||||||
Long-term debt | |||||||
Number of Facilities Sold | 2 |
Long-Term Debt - Notes Payable
Long-Term Debt - Notes Payable (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Nov. 30, 2019 | Oct. 31, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 23, 2016 | Nov. 01, 2016 | |
Long-term debt | ||||||
Repayments of debt | $ 27.1 | $ 39.8 | ||||
Note payable | ||||||
Long-term debt | ||||||
Notes Issued | $ 15 | |||||
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 | 15.1 | 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% | |||||
Principal balance outstanding | 21.1 | |||||
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 | $ 66.5 | $ 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. 30, 2020USD ($)facility | Jul. 02, 2020USD ($) | Sep. 12, 2019 | Sep. 30, 2020USD ($)loan | Sep. 30, 2020USD ($)facilityloan | Dec. 31, 2019USD ($) | Jan. 10, 2020USD ($) |
Long-term debt | |||||||
Weighted Average Interest | 6.50% | 6.50% | 6.50% | ||||
Repayments of debt | $ 27.1 | $ 39.8 | |||||
Mortgages and other secured debt (recourse) | |||||||
Long-term debt | |||||||
Weighted Average Interest | 0.60% | 0.60% | 0.60% | ||||
Mortgages and other secured debt (non-recourse) | |||||||
Long-term debt | |||||||
Weighted Average Interest | 4.20% | 4.20% | 4.20% | ||||
Aggregate outstanding principal balance | $ 22.8 | $ 22.8 | $ 22.8 | 23.8 | |||
Term Loan | |||||||
Long-term debt | |||||||
Floor rate | 1.50% | 1.50% | 1.50% | ||||
Applicable margin rate (as a percent) | 4.75% | ||||||
HUD insured loans | |||||||
Long-term debt | |||||||
Weighted Average Interest | 3.30% | 3.30% | 3.30% | ||||
Principal balance outstanding | $ 54.4 | $ 54.4 | $ 54.4 | 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 | $ 142.1 | $ 142.1 | ||||
Applicable margin rate (as a percent) | 3.50% | ||||||
Number of debt instruments insured by HUD | loan | 2 | ||||||
Repayments of debt | $ 24.6 | ||||||
Term of debt | 25 years | ||||||
Principal balance outstanding | 78.8 | 78.8 | $ 78.8 | 103.4 | |||
Number of collateralized facilities | facility | 10 | ||||||
Next Partnership | Mezzanine loan | |||||||
Long-term debt | |||||||
Aggregate principal amount | $ 27 | $ 27 | $ 27 | ||||
Fixed interest rate | 11.50% | 11.50% | 11.50% | ||||
Principal balance outstanding | $ 27 | $ 27 | $ 27 | 27 | |||
Next Partnership | HUD insured loans | |||||||
Long-term debt | |||||||
Number of debt instruments insured by HUD | loan | 2 | ||||||
Number of facilities included | facility | 5 | ||||||
Principal balance outstanding | $ 67.3 | $ 67.3 | $ 67.3 | 41.7 | |||
Vantage Point Partnership | |||||||
Long-term debt | |||||||
Variable interest entity, ownership interest (as a percent) | 30.00% | 30.00% | |||||
Ownership interest percentage | 19.00% | 19.00% | 19.00% | ||||
Aggregate outstanding principal balance | $ 7.3 | ||||||
Vantage Point Partnership | Term Loan | |||||||
Long-term debt | |||||||
Aggregate principal amount | $ 240.9 | $ 240.9 | $ 240.9 | ||||
Floor rate | 1.75% | 1.75% | 1.75% | ||||
Applicable margin rate (as a percent) | 3.75% | ||||||
Term of debt | 25 years | ||||||
Principal balance outstanding | $ 240.9 | $ 240.9 | $ 240.9 | $ 233.6 | |||
Number of collateralized facilities | facility | 19 | ||||||
Vantage Point Partnership | Promissory note | |||||||
Long-term debt | |||||||
Aggregate principal amount | $ 76.8 | $ 76.8 | $ 76.8 | ||||
Fixed interest rate | 14.00% | 14.00% | 14.00% | ||||
Principal balance outstanding | $ 76.8 | $ 76.8 | $ 76.8 | ||||
Cascade Partnership | |||||||
Long-term debt | |||||||
Variable interest entity, ownership interest (as a percent) | 49.00% | ||||||
Aggregate outstanding principal balance | $ 190.3 | ||||||
Cascade Partnership | Term Loan | |||||||
Long-term debt | |||||||
Aggregate principal amount | 183.5 | $ 183.5 | 183.5 | ||||
Interest rate (as a percentage) | 6.00% | ||||||
Term of debt | 25 years | ||||||
Principal balance outstanding | $ 183.5 | $ 183.5 | 183.5 | ||||
Number of collateralized facilities | facility | 9 | ||||||
Cascade Partnership | Note payable | |||||||
Long-term debt | |||||||
Aggregate principal amount | $ 10 | $ 10 | $ 10 | ||||
Fixed interest rate | 10.00% | 10.00% | 10.00% | ||||
Cash interest rate | 5.00% | 5.00% | 5.00% | ||||
Paid in kind interest rate | 5.00% | 5.00% | 5.00% | ||||
Principal balance outstanding | $ 10 | $ 10 | $ 10 | ||||
Minimum | HUD insured loans | |||||||
Long-term debt | |||||||
Term of debt | 30 years | ||||||
Fixed interest rate | 3.00% | 3.00% | 3.00% | ||||
Minimum | Next Partnership | HUD insured loans | |||||||
Long-term debt | |||||||
Fixed interest rate | 2.79% | 2.79% | 2.79% | ||||
Maximum | HUD insured loans | |||||||
Long-term debt | |||||||
Term of debt | 35 years | ||||||
Fixed interest rate | 3.50% | 3.50% | 3.50% | ||||
Maximum | Next Partnership | HUD insured loans | |||||||
Long-term debt | |||||||
Fixed interest rate | 3.15% | 3.15% | 3.15% |
Long-Term Debt - Debt Covenants
Long-Term Debt - Debt Covenants (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Twelve months ended December 31, | |
2021 | $ 10,691 |
2022 | 883,975 |
2023 | 213,090 |
2024 | 22,296 |
2025 | 10,085 |
Thereafter | 420,212 |
Total long-term debt | $ 1,560,349 |
Income Taxes - Noncontrolling I
Income Taxes - Noncontrolling Interest (Details) | Sep. 30, 2020 |
FC-GEN Operations Investment, LLC | |
Noncontrolling Interest [Line Items] | |
Noncontrolling interest by Company (as a percent) | 67.10% |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||||
Income tax expense (benefit) | $ 176 | $ (569) | $ (1,060) | $ (680) |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||||
Effective tax rate (as a percent) | (0.20%) | (1.00%) | 1.30% | (2.80%) |
Income Taxes - Current Income T
Income Taxes - Current Income Tax Expense (Benefits) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | |
Current income tax expense (benefit) | $ (2.9) |
Income Taxes - Exchange Rights
Income Taxes - Exchange Rights and Tax Receivable Agreement (Details) - FC-GEN Operations Investment, LLC - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Noncontrolling Interest [Line Items] | ||
Tax basis step-up in deductible goodwill of FC-GEN. | $ 6.6 | $ 14.3 |
Tax receivable agreement, potential payment as percentage of cash savings | 90.00% |
Related Party Transactions - Be
Related Party Transactions - Beneficial Owners - Customers (Details) - Beneficial Owner $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($)customer | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)customer | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | |||||
Number of customers owned and operated | customer | 2 | 2 | |||
Related Party Customer One | |||||
Related Party Transaction [Line Items] | |||||
Net revenue from related party | $ 24.2 | $ 29.1 | $ 75.5 | $ 88.9 | |
Net accounts receivable from related party | 31 | 31 | $ 28.9 | ||
Notes receivable from related party | 56.3 | 56.3 | |||
Reserves posted against note receivable | 55 | ||||
Related Party Customer Two | |||||
Related Party Transaction [Line Items] | |||||
Net revenue from related party | 1.4 | $ 1.7 | 4 | $ 5.2 | |
Notes receivable from related party | $ 1.4 | $ 1.4 | $ 1.4 |
Related Party Transactions - Bo
Related Party Transactions - Board of Directors (Details) - Director - Next Landlord Entities $ in Millions | Sep. 30, 2020 | Jun. 01, 2018USD ($)companyfacility |
Related Party Transaction [Line Items] | ||
Number of centers | facility | 12 | |
Number of separate limited liability companies | company | 12 | |
Initial annualized lease rent paid | $ | $ 13 | |
Ownership interest percentage | 4.00% |
Related Party Transactions - _2
Related Party Transactions - Beneficial Owners - Master Lease (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($)facility | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)facility | Sep. 30, 2019USD ($) | |
Related Party Transaction | ||||
Options to renew | true | |||
Lease cost | $ 100,098 | $ 122,728 | $ 323,532 | $ 403,441 |
Beneficial Owner | Welltower Inc | ||||
Related Party Transaction | ||||
Operating lease renewal term | 11 years | 11 years | ||
Options to renew | true | |||
Annual rent escalators | 2.00% | 2.00% | ||
Lease cost | $ 17,600 | 17,900 | $ 53,000 | 56,000 |
Number of facilities under lease and purchase option | facility | 42 | 42 | ||
Interest paid | $ 5,600 | $ 5,500 | $ 16,700 | $ 16,200 |
Related Party Transactions - Eq
Related Party Transactions - Equity Method Investment (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020USD ($)facility | Sep. 30, 2020USD ($)facility | Feb. 01, 2020 | |
NewGen Partnership | |||
Related Party Transaction | |||
Ownership interest (as a percent) | 50.00% | 50.00% | 50.00% |
NewGen Partnership | Twenty-three Facilities in California, Washington and Nevada | |||
Related Party Transaction | |||
Number of facilities transitioned operational responsibility | facility | 23 | ||
Equity Method Investee | NewGen Partnership | |||
Related Party Transaction | |||
Financing provided | $ | $ 9 | ||
Number of facilities subleased to related party | facility | 6 | 6 | |
Net revenue from related party | $ | $ 7.3 | $ 17.5 |
Other Income - Tabular Disclosu
Other Income - Tabular Disclosure (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other Income | ||||
Gain on sale of owned assets | $ (6,242) | $ (63,645) | $ (104,037) | $ (90,992) |
Loss recognized for exit costs associated with divestiture of operations | 652 | 6,725 | 10,961 | 14,647 |
Gain on lease termination or modification | (37,917) | (74,891) | (79,363) | (95,796) |
Gain on landlord consideration credit | 10,000 | 10,000 | ||
Total other (income) loss | $ (53,507) | $ (131,811) | $ (182,439) | $ (172,141) |
Other Income - Owned Facilities
Other Income - Owned Facilities (Details) - facility | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Divestitures | ||||
Number of facilities sold | 1 | 10 | 14 | 15 |
Other Income - Leased Facilitie
Other Income - Leased Facilities (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($)leasefacility | Sep. 30, 2019USD ($)leasefacility | Sep. 30, 2020USD ($)leasefacility | Sep. 30, 2019USD ($)facilitylease | |
Lessee, Lease, Description [Line Items] | ||||
Number of facilities divested | facility | 1 | 22 | 44 | 41 |
Number of divested leases terminated | lease | 24 | |||
Number of leases terminated | lease | 12 | 12 | ||
Gain on lease termination or modification | $ 37,917 | $ 74,891 | $ 79,363 | $ 95,796 |
Gain on lease termination | 18,200 | 18,200 | ||
Gain on lease modification | $ 19,700 | 19,700 | ||
Gain on divested leases terminated | $ 30,700 | |||
Number of leasehold rights sold | lease | 13 | |||
Gain on sale of leasehold rights | $ 10,700 | |||
Welltower Inc., Omega Healthcare Investors, Inc., Second Spring Healthcare Investments, and Certain Other Landlords | ||||
Lessee, Lease, Description [Line Items] | ||||
Number of leases terminated | lease | 27 | 53 | ||
Gain on lease termination and remeasurement | $ 74,900 | $ 95,800 |
Other Income - Variable Interes
Other Income - Variable Interest Entity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Other Income | ||
Gain on landlord consideration credit | $ 10,000 | $ 10,000 |
Asset Impairment Charges (Detai
Asset Impairment Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Asset Impairment Charges | ||||
Impairment of long-lived assets held-for-use and intangible assets, finite-lived | $ 72.4 | $ 16 | $ 159.2 | $ 16.9 |
Assets Held for Sale - General
Assets Held for Sale - General Information (Details) - Disposal Group, Held-for-sale, Not Discontinued Operations $ in Millions | Sep. 30, 2020USD ($)facility | Dec. 31, 2019facility |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of facilities classified as held for sale | 1 | |
Two Skilled Nursing Facilities, One in California and One in Nevada | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of facilities classified as held for sale | 2 | |
Consideration | $ | $ 20.9 | |
One U.S. Department of Housing and Urban Development Insured Skilled Nursing Facility in California | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of facilities classified as held for sale | 1 |
Assets Held for Sale - Tabular
Assets Held for Sale - Tabular Disclosure (Details) - Disposal Group, Held-for-sale, Not Discontinued Operations - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets and Liabilities of Disposal Group | ||
Prepaid expenses | $ 1,171 | |
Property and equipment, net of accumulated depreciation of $3,015 and $2,201 at September 30, 2020 and December 31, 2019, respectively | $ 11,554 | 16,306 |
Accumulated depreciation | 3,015 | 2,201 |
Total Assets | 11,554 | 17,477 |
Current portion of long-term debt | 400 | 368 |
Long-term debt | 18,373 | 19,789 |
Total Liabilities | $ 18,773 | $ 20,157 |
Commitments and Contingencies -
Commitments and Contingencies - Workers' Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Commitments and Contingencies | |||||
Workers' Compensation discount rate (as a percentage) | 1.60% | ||||
Potential effect of discounting on Workers Compensation reserve | $ 9.3 | $ 9.3 | $ 12 | ||
Provision for general and professional liability | 21.3 | $ 16.1 | 56.4 | $ 42.9 | |
Reserve for general and professional liability | 382.3 | 382.3 | 392.8 | ||
Provision for workers' compensation | 17.2 | $ 14 | 54.8 | $ 42.7 | |
Reserve for workers' compensation risks | 173.4 | 173.4 | 160.5 | ||
Health insurance reserve | $ 13.1 | $ 13.1 | $ 15.1 |
Commitments and Contingencies_2
Commitments and Contingencies - Lease Guarantees (Details) - NewGen Partnership $ in Millions | Sep. 30, 2020USD ($)facility | Feb. 01, 2020facility |
Schedule of Equity Method Investments [Line Items] | ||
Leasehold rights transferred, lease guarantee agreements, executed, number of facilities | facility | 6 | 6 |
Leasehold rights transferred, lease guarantee agreements, executed, undiscounted cash rent obligations | $ | $ 86.3 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Recurring Measures (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets, Fair Value Disclosure [Abstract] | ||
Cash and cash equivalents | $ 200,995 | $ 12,097 |
Restricted cash and equivalents | 96,543 | 113,709 |
Restricted investments in marketable securities | 137,841 | 136,942 |
Assets, Fair Value Disclosure, Total | 435,379 | 262,748 |
Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash and cash equivalents | 200,995 | 12,097 |
Restricted cash and equivalents | 96,543 | 113,709 |
Restricted investments in marketable securities | 43,648 | 45,903 |
Assets, Fair Value Disclosure, Total | 341,186 | 171,709 |
Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Restricted investments in marketable securities | 94,193 | 91,039 |
Assets, Fair Value Disclosure, Total | $ 94,193 | $ 91,039 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Debt Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | $ 1,554,391 | $ 1,613,420 |
Asset based lending facilities | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 278,425 | 412,346 |
Term Loan | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 207,215 | 196,714 |
Real estate loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 228,713 | 265,700 |
HUD insured loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 34,252 | 117,117 |
Welltower Notes | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 102,646 | 116,952 |
Mortgages and other secured debt (recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 6,142 | 6,369 |
Mortgages and other secured debt (non-recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Principal balance outstanding, net | 696,998 | 498,222 |
Level 2 | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 1,554,391 | 1,613,420 |
Level 2 | Asset based lending facilities | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 278,425 | 412,346 |
Level 2 | Term Loan | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 207,215 | 196,714 |
Level 2 | Real estate loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 228,713 | 265,700 |
Level 2 | HUD insured loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 34,252 | 117,117 |
Level 2 | Welltower Notes | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 102,646 | 116,952 |
Level 2 | Mortgages and other secured debt (recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 6,142 | 6,369 |
Level 2 | Mortgages and other secured debt (non-recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | $ 696,998 | $ 498,222 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Nonrecurring Measures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Non-recurring Fair Value Measures | ||||
Finance lease right-of-use assets, net | $ 28,635 | $ 28,635 | $ 37,097 | |
Finance lease right-of-use assets, net, Impairment charges | 72,400 | 152,100 | ||
Operating lease right-of-use assets | 1,817,603 | 1,817,603 | 2,399,505 | |
Fair Value, Measurements, Nonrecurring | ||||
Non-recurring Fair Value Measures | ||||
Property and equipment, net | 1,018,939 | 1,018,939 | 962,105 | |
Property and equipment, Impairment Charges | 7,100 | $ 10,696 | ||
Finance lease right-of-use assets, net | 28,635 | 28,635 | 37,097 | |
Finance lease right-of-use assets, net, Impairment charges | 6,000 | |||
Operating lease right-of-use assets | 1,817,603 | 1,817,603 | 2,399,505 | |
Operating lease right-of-use assets, Impairment Charges | 146,100 | $ 6,241 | ||
Intangible assets, net | 83,530 | 83,530 | 87,446 | |
Goodwill | $ 85,642 | $ 85,642 | $ 85,642 |
Subsequent Events - Strategic P
Subsequent Events - Strategic Partnerships - Equity Method Investments (Details) - NewGen Partnership $ in Millions | Oct. 01, 2020USD ($)facility | Sep. 30, 2020 | Feb. 01, 2020 |
Subsequent Events | |||
Ownership interest (as a percent) | 50.00% | 50.00% | |
Subsequent Events | One Leased Facility in Washington | |||
Subsequent Events | |||
Number of facilities transitioned operational responsibility | facility | 1 | ||
Facilities transitioned operational responsibility, annual revenues | $ 12.3 | ||
Facilities transitioned operational responsibility, pre-tax gain (loss) | $ 0.2 |
Subsequent Events - Divestiture
Subsequent Events - Divestiture of Non-Strategic Facilities - Owned Facilities (Details) $ in Millions | Oct. 30, 2020USD ($)facility | Jul. 06, 2020USD ($) | Jul. 02, 2020USD ($) | Apr. 01, 2020USD ($) | Feb. 26, 2020USD ($) | Feb. 01, 2020USD ($) | Sep. 30, 2020facility | Sep. 30, 2019facility | Sep. 30, 2020facility | Sep. 30, 2019facility |
HUD insured loans | Secured Debt | ||||||||||
Subsequent Events | ||||||||||
Repayments of loans | $ 10.5 | $ 15.2 | $ 20.5 | $ 29.1 | ||||||
Mid Cap Real Estate Loans | ||||||||||
Subsequent Events | ||||||||||
Repayments of loans | $ 5.5 | |||||||||
Mid Cap Real Estate Loans | Secured Debt | ||||||||||
Subsequent Events | ||||||||||
Repayments of loans | $ 7.5 | |||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||||
Subsequent Events | ||||||||||
Number of facilities sold | facility | 1 | 10 | 14 | 15 | ||||||
Subsequent Events | HUD insured loans | Secured Debt | ||||||||||
Subsequent Events | ||||||||||
Repayments of loans | $ 8.1 | |||||||||
Subsequent Events | Mid Cap Real Estate Loans | Secured Debt | ||||||||||
Subsequent Events | ||||||||||
Repayments of loans | $ 14.3 | |||||||||
Subsequent Events | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Five Facilities in Vermont | ||||||||||
Subsequent Events | ||||||||||
Number of facilities sold | facility | 5 | |||||||||
Consideration | $ 46.6 | |||||||||
Annual revenues | 47.4 | |||||||||
Pre-tax net income (loss) | $ (2.7) |
Subsequent Events - Divestitu_2
Subsequent Events - Divestiture of Non-Strategic Facilities - Leased Facilities (Details) $ in Millions | Nov. 01, 2020USD ($)facility | Oct. 15, 2020USD ($)facility | Sep. 30, 2020facility | Sep. 30, 2019facility | Sep. 30, 2020facility | Sep. 30, 2019facility |
Subsequent Events | ||||||
Number of facilities divested | facility | 1 | 22 | 44 | 41 | ||
Subsequent Events | Two Skilled Nursing Facilities in Connecticut | ||||||
Subsequent Events | ||||||
Number of facilities divested | facility | 2 | |||||
Annual revenues generated | $ 18.9 | |||||
Annual pre-tax income (loss) generated | 0.1 | |||||
Annual rent credit | $ 0 | |||||
Subsequent Events | One Skilled Nursing Facility in Rhode Island | ||||||
Subsequent Events | ||||||
Number of facilities divested | facility | 1 | |||||
Annual revenues generated | $ 12.3 | |||||
Annual pre-tax income (loss) generated | 0.1 | |||||
Annual rent credit | $ 0.3 |