Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2016shares | |
Document and Entity Information | |
Entity Registrant Name | SELECT MEDICAL HOLDINGS CORP |
Entity Central Index Key | 1,320,414 |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2016 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 131,472,188 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 78,420 | $ 14,435 |
Accounts receivable, net of allowance for doubtful accounts of $61,133 and $56,664 at 2015 and 2016, respectively | 613,790 | 603,558 |
Current deferred tax asset | 43,955 | 28,688 |
Prepaid income taxes | 16,694 | |
Other current assets | 88,862 | 85,779 |
Total Current Assets | 825,027 | 749,154 |
Property and equipment, net | 889,171 | 864,124 |
Goodwill | 2,638,286 | 2,314,624 |
Other identifiable intangibles, net | 343,928 | 318,675 |
Other assets | 141,937 | 142,101 |
Total Assets | 4,838,349 | 4,388,678 |
Current Liabilities: | ||
Bank overdrafts | 26,477 | 28,615 |
Current portion of long-term debt and notes payable | 10,511 | 225,166 |
Accounts payable | 118,420 | 137,409 |
Accrued payroll | 135,552 | 120,989 |
Accrued vacation | 81,074 | 73,977 |
Accrued interest | 16,927 | 9,401 |
Accrued other | 134,085 | 133,728 |
Income taxes payable | 12,314 | |
Total Current Liabilities | 535,360 | 729,285 |
Long-term debt, net of current portion | 2,707,311 | 2,160,730 |
Non-current deferred tax liability | 201,538 | 218,705 |
Other non-current liabilities | 131,699 | 133,220 |
Total Liabilities | 3,575,908 | 3,241,940 |
Commitments and contingencies (Note 11) | ||
Redeemable non-controlling interests | 245,784 | 238,221 |
Stockholders' Equity: | ||
Common stock | 131 | 131 |
Capital in excess of par | 432,951 | 424,506 |
Retained earnings (accumulated deficit) | 522,995 | 434,616 |
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 956,077 | 859,253 |
Non-controlling interest | 60,580 | 49,264 |
Total Equity | 1,016,657 | 908,517 |
Total Liabilities and Equity | 4,838,349 | 4,388,678 |
Select | ||
Current Assets: | ||
Cash and cash equivalents | 78,420 | 14,435 |
Accounts receivable, net of allowance for doubtful accounts of $61,133 and $56,664 at 2015 and 2016, respectively | 613,790 | 603,558 |
Current deferred tax asset | 43,955 | 28,688 |
Prepaid income taxes | 16,694 | |
Other current assets | 88,862 | 85,779 |
Total Current Assets | 825,027 | 749,154 |
Property and equipment, net | 889,171 | 864,124 |
Goodwill | 2,638,286 | 2,314,624 |
Other identifiable intangibles, net | 343,928 | 318,675 |
Other assets | 141,937 | 142,101 |
Total Assets | 4,838,349 | 4,388,678 |
Current Liabilities: | ||
Bank overdrafts | 26,477 | 28,615 |
Current portion of long-term debt and notes payable | 10,511 | 225,166 |
Accounts payable | 118,420 | 137,409 |
Accrued payroll | 135,552 | 120,989 |
Accrued vacation | 81,074 | 73,977 |
Accrued interest | 16,927 | 9,401 |
Accrued other | 134,085 | 133,728 |
Income taxes payable | 12,314 | |
Total Current Liabilities | 535,360 | 729,285 |
Long-term debt, net of current portion | 2,707,311 | 2,160,730 |
Non-current deferred tax liability | 201,538 | 218,705 |
Other non-current liabilities | 131,699 | 133,220 |
Total Liabilities | 3,575,908 | 3,241,940 |
Commitments and contingencies (Note 11) | ||
Redeemable non-controlling interests | 245,784 | 238,221 |
Stockholders' Equity: | ||
Common stock | 0 | 0 |
Capital in excess of par | 913,058 | 904,375 |
Retained earnings (accumulated deficit) | 43,019 | (45,122) |
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 956,077 | 859,253 |
Non-controlling interest | 60,580 | 49,264 |
Total Equity | 1,016,657 | 908,517 |
Total Liabilities and Equity | $ 4,838,349 | $ 4,388,678 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 56,664 | $ 61,133 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 700,000,000 | 700,000,000 |
Common stock, shares issued | 131,472,188 | 131,282,798 |
Common stock, shares outstanding | 131,472,188 | 131,282,798 |
Select | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 56,664 | $ 61,133 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued | 100 | 100 |
Common stock, shares outstanding | 100 | 100 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($)$ / sharesshares | |
Net operating revenues | $ 1,682,408 |
Costs and expenses: | |
Cost of services | 1,408,264 |
General and administrative | 45,716 |
Bad debt expense | 24,956 |
Depreciation and amortization | 39,196 |
Total costs and expenses | 1,518,132 |
Income from operations | 164,276 |
Other income and expense: | |
Equity in earnings of unconsolidated subsidiaries | 6,440 |
Interest expense | (46,676) |
Income before income taxes | 124,040 |
Income tax expense | 46,701 |
Net income | 77,339 |
Less: Net income attributable to non-controlling interests | 5,336 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | $ 72,003 |
Basic (in dollars per share) | $ / shares | $ 0.55 |
Diluted (in dollars per share) | $ / shares | 0.55 |
Dividends paid per share | $ / shares | $ 0.10 |
Weighted average shares outstanding: | |
Weighted average shares - basic | shares | 127,620 |
Weighted average shares - diluted | shares | 127,944 |
Select | |
Net operating revenues | $ 1,682,408 |
Costs and expenses: | |
Cost of services | 1,408,264 |
General and administrative | 45,716 |
Bad debt expense | 24,956 |
Depreciation and amortization | 39,196 |
Total costs and expenses | 1,518,132 |
Income from operations | 164,276 |
Other income and expense: | |
Equity in earnings of unconsolidated subsidiaries | 6,440 |
Interest expense | (46,676) |
Income before income taxes | 124,040 |
Income tax expense | 46,701 |
Net income | 77,339 |
Less: Net income attributable to non-controlling interests | 5,336 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | $ 72,003 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Changes in Equity and Income - 6 months ended Jun. 30, 2016 - USD ($) shares in Thousands, $ in Thousands | Comprehensive IncomeSelect | Comprehensive Income | Common StockSelect | Common Stock | Capital in Excess of ParSelect | Capital in Excess of Par | Retained Earnings (Accumulated Deficit)Select | Retained Earnings (Accumulated Deficit) | Non-controlling InterestsSelect | Non-controlling Interests | Select | Total |
Balance at Dec. 31, 2015 | $ 0 | $ 131 | $ 904,375 | $ 424,506 | $ (45,122) | $ 434,616 | $ 49,264 | $ 49,264 | $ 908,517 | $ 908,517 | ||
Balance (in shares) at Dec. 31, 2015 | 0 | 131,283 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | $ 90,774 | $ 90,774 | 88,768 | 88,768 | 2,006 | 2,006 | 90,774 | 90,774 | ||||
Net income - attributable to redeemable non-controlling interests | 10,023 | 10,023 | ||||||||||
Total comprehensive income | $ 100,797 | $ 100,797 | ||||||||||
Additional investment by Holdings | 657 | 657 | ||||||||||
Dividends declared and paid to Holdings | (506) | (506) | ||||||||||
Contribution related to restricted stock awards and stock option issuances by Holdings | 7,790 | 7,790 | ||||||||||
Issuance and vesting of restricted stock | $ 0 | 7,786 | 7,786 | |||||||||
Issuance and vesting of restricted stock (in shares) | 149 | |||||||||||
Tax benefit from stock based awards | 269 | 269 | 269 | 269 | ||||||||
Repurchase of common shares | $ 0 | (238) | (268) | (506) | ||||||||
Repurchase of common shares (in shares) | (38) | |||||||||||
Stock option expense | 4 | 4 | ||||||||||
Exercise of stock options | $ 0 | 657 | 657 | |||||||||
Exercise of stock options (in shares) | 78 | |||||||||||
Non-controlling interests acquired in business combination | 2,514 | 2,514 | 2,514 | 2,514 | ||||||||
Distributions to non-controlling interests | (3,505) | (3,505) | (3,505) | (3,505) | ||||||||
Issuance of non-controlling interests | 9,831 | 9,831 | 9,831 | 9,831 | ||||||||
Purchase of redeemable non-controlling interests | 320 | 320 | 320 | 320 | ||||||||
Other | (33) | (33) | (441) | (441) | 470 | 470 | (4) | (4) | ||||
Balance at Jun. 30, 2016 | $ 0 | $ 131 | $ 913,058 | $ 432,951 | $ 43,019 | $ 522,995 | $ 60,580 | $ 60,580 | $ 1,016,657 | $ 1,016,657 | ||
Balance (in shares) at Jun. 30, 2016 | 0 | 131,472 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Operating activities | ||
Net income | $ 100,797 | $ 77,339 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 12,039 | 52 |
Depreciation and amortization | 70,722 | 39,196 |
Amortization of leasehold interests | 295 | |
Provision for bad debts | 33,914 | 24,956 |
Equity in earnings of unconsolidated subsidiaries | (9,198) | (6,440) |
Loss on early retirement of debt | 773 | |
Loss on disposal of assets | 55 | 251 |
Gain on sale of assets and business | (43,461) | |
Impairment of equity investment | 5,339 | |
Stock compensation expense | 8,174 | 5,794 |
Amortization of debt discount, premium and issuance costs | 7,077 | 4,027 |
Deferred income taxes | (13,286) | (4,428) |
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | ||
Accounts receivable | (44,096) | (89,265) |
Other current assets | 11,011 | (8,038) |
Other assets | 4,213 | 3,568 |
Accounts payable | (15,852) | 8,925 |
Accrued expenses | 20,632 | 707 |
Income taxes | 28,821 | 18,416 |
Net cash provided by operating activities | 177,969 | 75,060 |
Investing activities | ||
Purchases of property and equipment | (80,258) | (68,912) |
Proceeds from sale of assets and business | 71,366 | |
Investment in businesses | (1,590) | (855) |
Acquisition of businesses, net of cash acquired | (421,519) | (1,047,997) |
Net cash used in investing activities | (432,001) | (1,117,764) |
Financing activities | ||
Borrowings on revolving facilities | 320,000 | 660,000 |
Payments on revolving facilities | (380,000) | (400,000) |
Net proceeds from Select term loans | 600,127 | |
Net proceeds from Concentra term loans | 623,575 | |
Payments on term loans | (229,649) | (26,884) |
Borrowings of other debt | 22,082 | 9,590 |
Principle payments on other debt | (9,926) | (8,320) |
Dividends paid to common stockholders | (13,129) | |
Repurchase of common stock | (506) | |
Proceeds from issuance of common stock | 657 | 1,325 |
Proceeds from issuance of non-controlling interests | 3,103 | 217,065 |
Proceeds from (repayments of) bank overdrafts | (2,138) | 5,590 |
Tax benefit from stock based awards | 269 | 11 |
Purchase of non-controlling interests | (1,294) | |
Distributions to non-controlling interests | (4,708) | (4,282) |
Net cash provided by financing activities | 318,017 | 1,064,541 |
Net increase in cash and cash equivalents | 63,985 | 21,837 |
Cash and cash equivalents at beginning of period | 14,435 | 3,354 |
Cash and cash equivalents at end of period | 78,420 | 25,191 |
Supplemental Cash Flow Information | ||
Cash paid for interest | 69,315 | 39,932 |
Cash paid for taxes | 35,518 | 32,702 |
Select | ||
Operating activities | ||
Net income | 100,797 | 77,339 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 12,039 | 52 |
Depreciation and amortization | 70,722 | 39,196 |
Amortization of leasehold interests | 295 | |
Provision for bad debts | 33,914 | 24,956 |
Equity in earnings of unconsolidated subsidiaries | (9,198) | (6,440) |
Loss on early retirement of debt | 773 | |
Loss on disposal of assets | 55 | 251 |
Gain on sale of assets and business | (43,461) | |
Impairment of equity investment | 5,339 | |
Stock compensation expense | 8,174 | 5,794 |
Amortization of debt discount, premium and issuance costs | 7,077 | 4,027 |
Deferred income taxes | (13,286) | (4,428) |
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | ||
Accounts receivable | (44,096) | (89,265) |
Other current assets | 11,011 | (8,038) |
Other assets | 4,213 | 3,568 |
Accounts payable | (15,852) | 8,925 |
Accrued expenses | 20,632 | 707 |
Income taxes | 28,821 | 18,416 |
Net cash provided by operating activities | 177,969 | 75,060 |
Investing activities | ||
Purchases of property and equipment | (80,258) | (68,912) |
Proceeds from sale of assets and business | 71,366 | |
Investment in businesses | (1,590) | (855) |
Acquisition of businesses, net of cash acquired | (421,519) | (1,047,997) |
Net cash used in investing activities | (432,001) | (1,117,764) |
Financing activities | ||
Borrowings on revolving facilities | 320,000 | 660,000 |
Payments on revolving facilities | (380,000) | (400,000) |
Net proceeds from Select term loans | 600,127 | |
Net proceeds from Concentra term loans | 623,575 | |
Payments on term loans | (229,649) | (26,884) |
Borrowings of other debt | 22,082 | 9,590 |
Principle payments on other debt | (9,926) | (8,320) |
Dividends paid to Holdings | (506) | (13,129) |
Equity investment by Holdings | 657 | 1,325 |
Proceeds from issuance of non-controlling interests | 3,103 | 217,065 |
Proceeds from (repayments of) bank overdrafts | (2,138) | 5,590 |
Tax benefit from stock based awards | 269 | 11 |
Purchase of non-controlling interests | (1,294) | |
Distributions to non-controlling interests | (4,708) | (4,282) |
Net cash provided by financing activities | 318,017 | 1,064,541 |
Net increase in cash and cash equivalents | 63,985 | 21,837 |
Cash and cash equivalents at beginning of period | 14,435 | 3,354 |
Cash and cash equivalents at end of period | 78,420 | 25,191 |
Supplemental Cash Flow Information | ||
Cash paid for interest | 69,315 | 39,932 |
Cash paid for taxes | $ 35,518 | $ 32,702 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Basis of Presentation | |
Basis of Presentation | 1. Basis of Presentation The unaudited condensed consolidated financial statements of Select Medical Holdings Corporation (“Holdings”) and Select Medical Corporation (“Select”) as of June 30, 2016, and for the three and six month periods ended June 30, 2015 and 2016, have been prepared in accordance with generally accepted accounting principles (“GAAP”). In the opinion of management, such information contains all adjustments, which are normal and recurring in nature, necessary for a fair statement of the financial position, results of operations and cash flow for such periods. All significant intercompany transactions and balances have been eliminated. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2016. Holdings and Select and their subsidiaries are collectively referred to as the “Company.” The condensed consolidated financial statements of Holdings include the accounts of its wholly owned subsidiary, Select. Holdings conducts substantially all of its business through Select and its subsidiaries. Certain information and disclosures normally included in the notes to consolidated financial statements have been condensed or omitted consistent with the rules and regulations of the Securities and Exchange Commission (the “SEC”), although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2015 contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2016. |
Accounting Policies
Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies | |
Accounting Policies | 2. Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation-Stock Compensation , which simplifies various aspects of accounting for share-based payments to employees. The areas for simplification involve several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The standard will be effective for fiscal years beginning after December 15, 2016. The Company is currently evaluating the standard to determine the impact it will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases . This ASU includes a lessee accounting model that recognizes two types of leases; finance and operating. This ASU requires that a lessee recognize on the balance sheet assets and liabilities for all leases with lease terms of more than twelve months. Lessees will need to recognize almost all leases on the balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained the dual model, requiring leases to be classified as either operating or finance. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as finance or operating lease. For short-term leases of twelve months or less, lessees are permitted to make an accounting election by class of underlying asset not to recognize right-of-use assets or lease liabilities. If the alternative is elected, lease expense would be recognized generally on the straight-line basis over the respective lease term. The amendments in ASU 2016-02 will take effect for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted as of the beginning of an interim or annual reporting period. A modified retrospective approach is required for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company is evaluating the adoption methodology and the impact of this update on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes , which changes the presentation of deferred income taxes. The intent is to simplify the presentation of deferred income taxes through the requirement that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The revised guidance is effective for annual fiscal periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the standard. In May 2014, March 2016, and April 2016 the FASB issued ASU 2014-09, Revenue from Contracts with Customers , ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations , ASU 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing , and ASU 2016-12, Revenue from Contracts with Customers, Narrow Scope Improvements and Practical Expedients , respectively, which supersede most of the current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. The original standards were effective for fiscal years beginning after December 15, 2016; however, in July 2015, the FASB approved a one-year deferral of these standards, with a new effective date for fiscal years beginning after December 15, 2017. The standards require the selection of a modified retrospective or cumulative effect transition method for retrospective application. The Company is currently evaluating the standards to determine the impact they will have on its consolidated financial statements. Recently Adopted Accounting Pronouncements In April and August 2015, the FASB issued ASU 2015-03 and ASU 2015-15, each titled Interest- Imputation of Interest , to simplify the presentation of debt issuance costs. The standard requires debt issuance costs be presented in the balance sheet as a direct deduction from the carrying value of the debt liability. The FASB clarified that debt issuance costs related to line-of-credit arrangements can be presented as an asset and amortized over the term of the arrangement. The Company adopted the standard at the beginning of the first quarter of 2016. The balance sheet as of December 31, 2015 was retrospectively conformed to reflect the adoption of the standard and approximately $38.0 million of unamortized debt issuance costs are now classified as a direct reduction of debt, rather than a component of other assets. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2016 | |
Acquisitions | |
Acquisitions | 3. Acquisitions Physiotherapy Acquisition On March 4, 2016, Select acquired 100% of the issued and outstanding equity securities of Physiotherapy Associates Holdings, Inc. (“Physiotherapy”) for $408.7 million, which is subject to a post closing purchase price adjustment, net of $12.3 million of cash acquired. Select financed the acquisition using a combination of cash on hand and proceeds from an incremental term loan facility under the Select credit facilities, as defined below (see note 7 for more details). During the six months ended June 30, 2016, $3.2 million of Physiotherapy acquisition costs were recognized in general and administrative expense. Physiotherapy is a national provider of outpatient physical rehabilitation care offering a wide range of services, including general orthopedics, spinal care and neurological rehabilitation, as well as orthotics and prosthetics services. The Physiotherapy acquisition is being accounted for under the provisions of Accounting Standards Codification (“ASC”) 805, Business Combinations. The Company has prepared a preliminary allocation of the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The Company is in the process of completing its assessment of fair values for identifiable tangible and intangible assets, and liabilities assumed; therefore, the values set forth below are subject to adjustment during the measurement period for such activities as estimating useful lives of long-lived assets and finite lived intangibles and completing assessment of fair values by obtaining appraisals. The amount of these potential adjustments could be significant. The Company expects to complete its purchase price allocation activities by December 31, 2016. The following table summarizes the preliminary allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed, in accordance with the acquisition method of accounting (in thousands): Cash and cash equivalents $ Identifiable tangible assets, excluding cash and cash equivalents Identifiable intangible assets Goodwill Total assets Total liabilities Acquired non-controlling interests Net assets acquired Less: Cash and cash equivalents acquired ) Net cash paid $ Goodwill of $319.2 million has been preliminarily recognized in the transaction, representing the excess of the purchase price over the value of the tangible and intangible assets acquired and liabilities assumed. The factors considered in determining the goodwill that resulted from the Physiotherapy purchase price included Physiotherapy’s future earnings potential and the value of the assembled workforce. The goodwill has been allocated to the outpatient rehabilitation segment and is not deductible for tax purposes. However, prior to its acquisition by the Company, Physiotherapy completed certain acquisitions that resulted in goodwill with an estimated value of $8.8 million that is deductible for tax purposes, which the Company will deduct through 2030. Due to the integrated nature of our operations, it is not practicable to separately identify net revenue and earnings of Physiotherapy on a stand-alone basis. Concentra Acquisition On June 1, 2015, MJ Acquisition Corporation, a joint venture that Select created with Welsh, Carson, Anderson & Stowe XII, L.P., consummated the acquisition of Concentra, Inc. (“Concentra”), the indirect operating subsidiary of Concentra Group Holdings, LLC, and its subsidiaries. Pursuant to the terms of the stock purchase agreement, dated as of March 22, 2015, by and among MJ Acquisition Corporation, Concentra and Humana Inc., MJ Acquisition Corporation acquired 100% of the issued and outstanding equity securities of Concentra from Humana, Inc. for $1,047.2 million, net of $3.8 million of cash acquired. During the year ended December 31, 2015, the Company finalized the purchase price allocation to identifiable intangible assets, fixed assets, non-controlling interests, and certain pre-acquisition contingencies. During the quarter ended June 30, 2016, the Company completed the accounting for certain deferred tax matters. The following table summarizes the allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed, in accordance with the acquisition method of accounting (in thousands): Cash and cash equivalents $ Identifiable tangible assets, excluding cash and cash equivalents Identifiable intangible assets Goodwill Total assets Total liabilities Acquired non-controlling interests Net assets acquired Less: Cash and cash equivalents acquired ) Net cash paid $ Goodwill of $651.2 million was recognized in the transaction, representing the excess of the purchase price over the value of the tangible and intangible assets acquired and liabilities assumed. The factors considered in determining the goodwill that resulted from the Concentra purchase price included Concentra’s future earnings potential and the value of Concentra’s assembled workforce. The goodwill is allocated to the Concentra segment and is not deductible for tax purposes. However, prior to its acquisition by MJ Acquisition Corporation, Concentra completed certain acquisitions that resulted in goodwill with an estimated value of $23.9 million that is deductible for tax purposes, which the Company will deduct through 2025. For the three months ended June 30, 2016, Concentra contributed net revenue of $254.9 million and net income of approximately $4.7 million, which are reflected in the Company’s consolidated statements of operations. For the six months ended June 30, 2016, Concentra contributed net revenue of $505.7 million and net income of approximately $7.0 million, which are reflected in the Company’s consolidated statements of operations. Pro Forma Results The following pro forma unaudited results of operations have been prepared assuming the acquisitions of Concentra and Physiotherapy occurred January 1, 2014 and 2015, respectively. These results are not necessarily indicative of results of future operations nor of the results that would have actually occurred had the acquisitions been consummated on the aforementioned dates. The three months ended June 30, 2016, includes both Concentra and Physiotherapy for the entire period and there are no pro forma adjustments; therefore, no pro forma information is presented for the period. For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2015 2016 (in thousands, except per share amounts) Net revenue $ $ $ Net income attributable to Holdings Income per common share: Basic $ $ $ Diluted $ $ $ The pro forma financial information is based on the preliminary allocation of the purchase price of the Physiotherapy acquisition, and therefore subject to adjustment upon finalizing the purchase price allocation, as described above, during the measurement period. The net income tax impact was calculated at a statutory rate, as if Concentra and Physiotherapy had been subsidiaries of the Company as of January 1, 2014 and 2015, respectively. Pro forma results for the six months ended June 30, 2015 were adjusted to include $3.2 million of Physiotherapy acquisition costs and exclude $4.7 million of Concentra acquisition costs. Pro forma results for the six months ended June 30, 2016 were adjusted to exclude approximately $3.2 million of Physiotherapy acquisition costs. Other Acquisitions In addition to the acquisition of Physiotherapy, during the six months ended June 30, 2016, the Company acquired interests in several businesses. The Company provided total consideration of $49.7 million, consisting of cash amounting to $12.5 million (net of cash acquired), minority interest issued of $9.8 million, and liabilities assumed of $1.3 million, for identifiable tangible net assets consisting principally of accounts receivable and property and equipment with an aggregate fair value of $11.0 million. Based on the preliminary purchase price allocations, these acquisitions resulted in recognition of goodwill of $14.6 million in the specialty hospital segment, $0.5 million in the outpatient rehabilitation segment and $3.5 million in the Concentra segment. |
Sale of Businesses
Sale of Businesses | 6 Months Ended |
Jun. 30, 2016 | |
Sale of Businesses | |
Sale of Businesses | 4. Sale of Businesses The Company recognized a non-operating gain of $43.4 million for the six months ended June 30, 2016. The Company sold its contract therapy businesses for $65.0 million, resulting in a non-operating gain of $33.9 million. The Company also transferred five specialty hospitals in an exchange transaction and sold nine outpatient rehabilitation clinics, which resulted in non-operating gains of $7.8 million and $1.7 million, respectively. |
Impairment of Equity Investment
Impairment of Equity Investment | 6 Months Ended |
Jun. 30, 2016 | |
Impairment of Equity Investment | |
Impairment of Equity Investment | 5. Impairment of Equity Investment During the six months ended June 30, 2016, the Company recognized an impairment loss of $5.3 million on one of its equity investments. The loss, which was triggered by a planned sale of the investee by the controlling interest, is reflected as part of non-operating gain on the Company’s consolidated statements of operations. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2016 | |
Intangible Assets | |
Intangible Assets | 6. Intangible Assets The net carrying value of the Company’s goodwill and identifiable intangible assets consist of the following: December 31, 2015 June 30, 2016 (in thousands) Goodwill $ $ Identifiable intangibles—Indefinite lived assets: Trademarks Certificates of need Accreditations Identifiable intangibles—Finite lived assets: Customer relationships Favorable leasehold interests Non-compete agreements — Total identifiable intangibles $ $ The Company’s customer relationships and non-compete agreement assets amortize over their estimated useful lives. Amortization expense for the Company’s customer relationships and non-compete agreements was $4.3 million and $1.1 million for the three months ended June 30, 2016 and 2015, respectively. Amortization expense was $8.1 million and $1.2 million for the six months ended June 30, 2016 and 2015, respectively. Estimated amortization expense of the Company’s customer relationships and non-compete agreements for each of the five succeeding years is $16.4 million. In addition, the Company has recognized unfavorable leasehold interests which are recorded as liabilities. The net carrying value of unfavorable leasehold interests was $4.3 million and $3.0 million as of June 30, 2016 and December 31, 2015, respectively. The Company’s favorable leasehold assets and unfavorable leasehold liabilities are amortized to rent expense over the remaining term of their respective leases to reflect a market rent per period based upon the market conditions present at the acquisition date. The net effect of this amortization increased rent expense by $0.2 million for the three months ended June 30, 2016 and $0.3 million for the six months ended June 30, 2016. The Company’s accreditations and trademarks have renewal terms. The costs to renew these intangibles are expensed as incurred. At June 30, 2016, the accreditations and trademarks have a weighted average time until next renewal of 1.5 years and 3.1 years, respectively. The changes in the carrying amount of goodwill for the Company’s reportable segments for the six months ended June 30, 2016 are as follows: Specialty Hospitals Outpatient Rehabilitation Concentra Total (in thousands) Balance as of December 31, 2015 $ $ $ $ Acquired Measurement period adjustment — ) ) Disposed ) ) — ) Balance as of June 30, 2016 $ $ $ $ See Note 3 for details of the goodwill acquired during the period. |
Indebtedness
Indebtedness | 6 Months Ended |
Jun. 30, 2016 | |
Indebtedness | |
Indebtedness | 7. Indebtedness For purposes of this indebtedness footnote, references to Select exclude Concentra, because the Concentra credit facilities are non-recourse to Holdings and Select. The components of long-term debt and notes payable are shown in the following tables: December 31, 2015 June 30, 2016 (in thousands) Select 6.375% senior notes(1) $ $ Select credit facilities: Select revolving facility Select term loans(2) Other—Select Total Select debt Less: Select current maturities Select long-term debt maturities $ $ Concentra credit facilities: Concentra revolving facility $ $ — Concentra term loans(3) Other—Concentra Total Concentra debt Less: Concentra current maturities Concentra long-term debt maturities $ $ Total current maturities $ $ Total long-term debt maturities Total debt $ $ (1) Includes unamortized premium of $1.2 million and $1.1 million at December 31, 2015 and June 30, 2016, respectively. Includes unamortized debt issuance costs of $10.4 million and $9.4 million at December 31, 2015 and June 30, 2016, respectively. (2) Includes unamortized discounts of $2.8 million and $13.8 million at December 31, 2015 and June 30, 2016, respectively. Includes unamortized debt issuance costs of $7.4 million and $16.0 million at December 31, 2015 and June 30, 2016, respectively. (3) Includes unamortized discounts of $2.9 million and $2.7 million at December 31, 2015 and June 30, 2016, respectively. Includes unamortized debt issuance costs of $20.2 million and $18.7 million at December 31, 2015 and June 30, 2016, respectively. Maturities of Long-Term Debt and Notes Payable Maturities of the Company’s long-term debt for the period from July 1, 2016 through December 31, 2016 and the years after 2016 are approximately as follows: Select Concentra Total (in thousands) July 1, 2016 — December 31, 2016 $ $ $ 2017 2018 2019 2020 2021 and beyond Total principal Unamortized discounts and premiums ) ) ) Unamortized debt issuance costs ) ) ) Total $ $ $ Excess Cash Flow Payment On March 2, 2016, Select made a principal prepayment of $10.2 million associated with its term loans (the “Select term loans”) in accordance with the provision in the Select credit facilities that requires mandatory prepayments of term loans as a result of annual excess cash flow as defined in the Select credit facilities. Select Credit Facilities On March 4, 2016, Select entered into an Additional Credit Extension Amendment (the “Additional Credit Extension Amendment”) to Select’s senior secured credit facility with JPMorgan Chase Bank, N.A., as administrative agent, collateral agent and lender, and the additional lenders named therein (the “Select credit facilities”). The Additional Credit Extension Amendment (i) provides for the lenders named therein to make available an aggregate of $625.0 million of Series F Tranche B Term Loans, (ii) extends the financial covenants through March 3, 2021, (iii) adds a 1.00% prepayment premium for prepayments made with new term loans on or prior to March 4, 2017 if such new term loans have a lower yield than the Series F Tranche B Term Loans, and (iv) makes certain other technical amendments to the Select credit facilities. The Series F Tranche B Term Loans will bear interest at a rate per annum equal to the Adjusted LIBO Rate (as defined in the Select credit facilities, subject to an Adjusted LIBO Rate floor of 1.00%) plus 5.00% for Eurodollar Loans or the Alternate Base Rate (as defined in the Select credit facilities) plus 4.00% for Alternate Base Rate Loans (as defined in the Select credit facilities). Select is required to make principal payments on the Series F Tranche B Term Loans in quarterly installments on the last day of each of March, June, September and December, beginning June 30, 2016, in amounts equal to 0.25% of the aggregate principal amount of the Series F Tranche B Term Loans outstanding as of the date of the Additional Credit Extension Amendment. The balance of the Series F Tranche B Term Loans will be payable on March 3, 2021. Except as specifically set forth in the Additional Credit Extension Amendment, the terms and conditions of the Series F Tranche B Term Loans are identical to the terms of the outstanding Series E Term B Loans under the Select credit facilities and the other loan documents to which Select is party. Select used the proceeds of the Series F Tranche B Term Loans to (i) refinance in full the Series D Tranche B Term Loans due December 20, 2016, (ii) consummate the acquisition of Physiotherapy, and (iii) pay fees and expenses incurred in connection with the acquisition of Physiotherapy, the refinancing, and the Additional Credit Extension Amendment. As a result of the Additional Credit Extension Amendment relating to the Series F Tranche B Term Loans, the interest rate payable on the Series E Tranche B Term Loans was increased from Adjusted LIBO plus 4.00% (subject to an Adjusted LIBO rate floor of 1.00%), or Alternative Base Rate plus 3.00%, to Adjusted LIBO plus 5.00% (subject to an Adjusted LIBO rate floor of 1.00%), or Alternative Base Rate plus 4.00%. During the six months ended June 30, 2016, the Company recognized a loss on early retirement of debt of $0.8 million relating to the repayment of the Series D Tranche B Term Loans under the Select credit facilities. |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value | |
Fair Value | 8. Fair Value Financial instruments include cash and cash equivalents, notes payable and long-term debt. The carrying amount of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments. December 31, 2015 June 30, 2016 Face Value Carrying Value Fair Value Face Value Carrying Value Fair Value (in thousands) Select 6.375% senior notes(1) $ $ $ $ $ $ Select credit facilities(2) Concentra credit facilities(3) (1) The carrying value includes unamortized premium of $1.2 million and $1.1 million at December 31, 2015 and June 30, 2016, respectively. Includes unamortized debt issuance costs of $10.4 million and $9.4 million at December 31, 2015 and June 30, 2016, respectively. (2) The carrying value includes unamortized discounts of $2.8 million and $13.8 million at December 31, 2015 and June 30, 2016, respectively. Includes unamortized debt issuance costs of $7.4 million and $16.0 million at December 31, 2015 and June 30, 2016, respectively. (3) The carrying value includes unamortized discounts of $2.9 million and $2.7 million at December 31, 2015 and June 30, 2016, respectively. Includes unamortized debt issuance costs of $20.2 million and $18.7 million at December 31, 2015 and June 30, 2016, respectively. The fair value of the Select credit facilities and the Concentra credit facilities was based on quoted market prices for this debt in the syndicated loan market. The fair value of Select’s 6.375% senior notes debt was based on quoted market prices. The Company considers the inputs in the valuation process to be Level 2 in the fair value hierarchy. Level 2 in the fair value hierarchy is defined as inputs that are observable for the asset or liability, either directly or indirectly, which includes quoted prices for identical assets or liabilities in markets that are not active. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2016 | |
Segment Information | |
Segment Information | 9. Segment Information The Company’s reportable segments consist of: (i) specialty hospitals, (ii) outpatient rehabilitation, and (iii) Concentra. Other activities include the Company’s corporate services and certain other non-consolidating joint ventures and minority investments in other healthcare related businesses. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance of the segments based on Adjusted EBITDA. Adjusted EBITDA is defined as earnings excluding interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, Concentra acquisition costs, Physiotherapy acquisition costs, non-operating gain (loss), and equity in earnings (losses) of unconsolidated subsidiaries. The following tables summarize selected financial data for the Company’s reportable segments. The segment results of Holdings are identical to those of Select. Three Months Ended June 30, 2015 Specialty Hospitals Outpatient Rehabilitation Concentra(1) Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures Three Months Ended June 30, 2016 Specialty Hospitals Outpatient Rehabilitation Concentra Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures Six Months Ended June 30, 2015 Specialty Hospitals Outpatient Rehabilitation Concentra(1) Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures Six Months Ended June 30, 2016 Specialty Hospitals Outpatient Rehabilitation(2) Concentra Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures A reconciliation of Adjusted EBITDA to income before income taxes is as follows: Three Months Ended June 30, 2015 Specialty Hospitals Outpatient Rehabilitation Concentra(1) Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — — ) Concentra acquisition costs — — ) — Income (loss) from operations $ $ $ $ ) $ Equity in earnings of unconsolidated subsidiaries Interest expense ) Income before income taxes $ Three Months Ended June 30, 2016 Specialty Hospitals Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — ) ) Income (loss) from operations $ $ $ $ ) $ Equity in earnings of unconsolidated subsidiaries Non-operating gain Interest expense ) Income before income taxes $ Six Months Ended June 30, 2015 Specialty Hospitals Outpatient Rehabilitation Concentra(1) Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — — ) Concentra acquisition costs — — ) — Income (loss) from operations $ $ $ $ ) $ Equity in earnings of unconsolidated subsidiaries Interest expense ) Income before income taxes $ Six Months Ended June 30, 2016 Specialty Hospitals Outpatient Rehabilitation(2) Concentra Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — ) ) Physiotherapy acquisition costs — — — ) Income (loss) from operations $ $ $ $ ) $ Loss on early retirement of debt ) Equity in earnings of unconsolidated subsidiaries Non-operating gain Interest expense ) Income before income taxes $ (1) The selected financial data for the Company’s Concentra segment for the periods presented begins as of June 1, 2015, which is the date the Concentra acquisition was consummated. (2) The outpatient rehabilitation segment includes the operating results of contract therapy businesses through March 31, 2016 and Physiotherapy beginning March 4, 2016. |
Income per Common Share
Income per Common Share | 6 Months Ended |
Jun. 30, 2016 | |
Income per Common Share | |
Income per Common Share | 10. Income per Common Share Holdings applies the two-class method for calculating and presenting income per common share. The two-class method is an earnings allocation formula that determines earnings per share for each class of stock participation rights in undistributed earnings. The following table sets forth for the periods indicated the calculation of income per common share in Holdings’ consolidated statements of operations and the differences between basic weighted average shares outstanding and diluted weighted average shares outstanding used to compute basic and diluted income per common share, respectively: For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2016 2015 2016 (in thousands, except per share amounts) Numerator: Net income attributable to Select Medical Holdings Corporation $ $ $ $ Less: Earnings allocated to unvested restricted stockholders Net income available to common stockholders $ $ $ $ Denominator: Weighted average shares — basic Effect of dilutive securities: Stock options Weighted average shares — diluted Basic income per common share $ $ $ $ Diluted income per common share $ $ $ $ |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 11. Commitments and Contingencies Litigation The Company is a party to various legal actions, proceedings and claims (some of which are not insured), and regulatory and other governmental audits and investigations in the ordinary course of its business. The Company cannot predict the ultimate outcome of pending litigation, proceedings and regulatory and other governmental audits and investigations. These matters could potentially subject the Company to sanctions, damages, recoupments, fines and other penalties. The Department of Justice, Centers for Medicare and Medicaid Services (“CMS”) or other federal and state enforcement and regulatory agencies may conduct additional investigations related to the Company’s businesses in the future that may, either individually or in the aggregate, have a material adverse effect on the Company’s business, financial position, results of operations and liquidity. To address claims arising out of the Company’s operations, the Company maintains professional malpractice liability insurance and general liability insurance, subject to self-insured retention of $2.0 million per medical incident for professional liability claims and $2.0 million per occurrence for general liability claims. The Company also maintains umbrella liability insurance covering claims which, due to their nature or amount, are not covered by or not fully covered by the Company’s other insurance policies. These insurance policies also do not generally cover punitive damages and are subject to various deductibles and policy limits. Significant legal actions, as well as the cost and possible lack of available insurance, could subject the Company to substantial uninsured liabilities. In the Company’s opinion, the outcome of these actions, individually or in the aggregate, will not have a material adverse effect on its financial position, results of operations, or cash flows. Healthcare providers are subject to lawsuits under the qui tam provisions of the federal False Claims Act. Qui tam lawsuits typically remain under seal (hence, usually unknown to the defendant) for some time while the government decides whether or not to intervene on behalf of a private qui tam plaintiff (known as a relator) and take the lead in the litigation. These lawsuits can involve significant monetary damages and penalties and award bounties to private plaintiffs who successfully bring the suits. The Company is and has been a defendant in these cases in the past, and may be named as a defendant in similar cases from time to time in the future. On October 19, 2015, the plaintiff-relators filed a Second Amended Complaint in United States of America, ex rel. Tracy Conroy, Pamela Schenk and Lisa Wilson v. Select Medical Corporation, Select Specialty Hospital—Evansville, LLC (‘‘SSH-Evansville’’), Select Employment Services, Inc., and Dr. Richard Sloan. The case is a civil action filed in the United States District Court for the Southern District of Indiana by private plaintiff-relators on behalf of the United States under the federal False Claims Act. The plaintiff-relators are the former CEO and two former case managers at SSH-Evansville, and the defendants currently include the Company, SSH-Evansville, a subsidiary of the Company serving as common paymaster for its employees, and a physician who practices at SSH-Evansville. The plaintiff-relators allege that SSH-Evansville discharged patients too early or held patients too long, improperly discharged patients to and readmitted them from short stay hospitals, up-coded diagnoses at admission, and admitted patients for whom long-term acute care was not medically necessary. They also allege that the defendants engaged in retaliation in violation of federal and state law. The Second Amended Complaint replaces a prior complaint that was filed under seal on September 28, 2012 and served on the Company on February 15, 2013, after a federal magistrate judge unsealed it on January 8, 2013. All deadlines in the case had been stayed after the seal was lifted in order to allow the government time to complete its investigation and to decide whether or not to intervene. On June 19, 2015, the U.S. Department of Justice notified the court of its decision not to intervene in the case, and the court thereafter approved a case management plan imposing certain deadlines. The defendants filed a Motion to Dismiss the Second Amended Complaint in December 2015. The Company intends to vigorously defend this action, but at this time the Company is unable to predict the timing and outcome of this matter. On July 13, 2015, the federal District Court for the Eastern District of Tennessee unsealed a qui tam Complaint in Armes v. Garman, et al, No. 3:14-cv-00172-TAV-CCS, which named as defendants Select, Select Specialty Hospital—Knoxville, Inc. (‘‘SSH-Knoxville’’), Select Specialty Hospital—North Knoxville, Inc. and ten current or former employees of these facilities. The Complaint was unsealed after the United States and the State of Tennessee notified the court on July 13, 2015 that each had decided not to intervene in the case. The Complaint is a civil action that was filed under seal on April 29, 2014 by a respiratory therapist formerly employed at SSH-Knoxville. The Complaint alleges violations of the federal False Claims Act and the Tennessee Medicaid False Claims Act based on extending patient stays to increase reimbursement and to increase average length of stay; artificially prolonging the lives of patients to increase Medicare reimbursements and decrease inspections; admitting patients who do not require medically necessary care; performing unnecessary procedures and services; and delaying performance of procedures to increase billing. The Complaint was served on some of the defendants during October 2015. The defendants filed a Motion to Dismiss such Complaint in November 2015, and the court approved such Motion and dismissed the lawsuit in June 2016. In July 2016, the plaintiff filed a Notice of Appeal to the United States Court of Appeals for the Sixth Circuit. The Company intends to vigorously defend this action if the relators pursue it, but at this time the Company is unable to predict the timing and outcome of this matter. Construction Commitments At June 30, 2016, the Company had outstanding commitments under construction contracts related to new construction, improvements and renovations at the Company’s long term acute care properties, inpatient rehabilitation facilities, and Concentra centers totaling approximately $9.4 million |
Financial Information for Subsi
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes | 6 Months Ended |
Jun. 30, 2016 | |
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes | |
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes | 12. Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select’s 6.375% Senior Notes Select’s 6.375% senior notes are fully and unconditionally guaranteed, except for customary limitations, on a senior basis by all of Select’s wholly owned subsidiaries (the ‘‘Subsidiary Guarantors’’) which is defined as a subsidiary where Select or a subsidiary of Select holds all of the outstanding ownership interests. Certain of Select’s subsidiaries did not guarantee the 6.375% senior notes (the ‘‘Non-Guarantor Subsidiaries,’’ including Group Holdings and its subsidiaries, which were designated as Non-Guarantor subsidiaries by Select’s board of directors at the closing of the Concentra acquisition, the ‘‘Non-Guarantor Concentra’’). Select conducts a significant portion of its business through its subsidiaries. Presented below is condensed consolidating financial information for Select, the Subsidiary Guarantors, the Non-Guarantor Subsidiaries, and Non-Guarantor Concentra at December 31, 2015 and June 30, 2016 and for the three and six months ended June 30, 2015 and 2016. The equity method has been used by Select with respect to investments in subsidiaries. The equity method has been used by Subsidiary Guarantors with respect to investments in Non-Guarantor Subsidiaries. Separate financial statements for Subsidiary Guarantors are not presented. Certain reclassifications have been made to prior reported amounts in order to conform to the current year guarantor structure. Select Medical Corporation Condensed Consolidating Balance Sheet June 30, 2016 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation (in thousands) Assets Current Assets: Cash and cash equivalents $ $ $ $ $ — $ Accounts receivable, net — — Current deferred tax asset — Intercompany receivables — — )(a) — Other current assets — Total Current Assets ) Property and equipment, net — Investment in affiliates — — )(b) (c) — Goodwill — — — Other identifiable intangibles, net — — — Non-current deferred tax asset — — — )(d) — Other assets — Total Assets $ $ $ $ $ ) $ Liabilities and Equity Current Liabilities: Bank overdrafts $ $ — $ — $ — $ — $ Current portion of long-term debt and notes payable — Accounts payable — Intercompany payables — — )(a) — Accrued payroll — Accrued vacation — Accrued interest — Accrued other — Income taxes payable — — — Total Current Liabilities ) Long-term debt, net of current portion — Non-current deferred tax liability — )(d) Other non-current liabilities — Total Liabilities ) Redeemable non-controlling interests — — — Stockholder’s Equity: Common stock — — — — Capital in excess of par — — — — Retained earnings (accumulated deficit) ) )(c) Subsidiary investment — )(b) — Total Select Medical Corporation Stockholder’s Equity ) Non-controlling interest — — — Total Equity ) Total Liabilities and Equity $ $ $ $ $ ) $ (a) Elimination of intercompany. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclass of non-current deferred tax asset to report net non-current deferred tax liability in consolidation. Select Medical Corporation Condensed Consolidating Statement of Operations For the Three Months Ended June 30, 2016 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative — — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) ) — Other income and expense: Intercompany interest and royalty fees ) ) — — — Intercompany management fees ) ) — — — Equity in earnings of unconsolidated subsidiaries — — — Non-operating gain — — — Interest expense ) ) ) ) — ) Income (loss) from operations before income taxes ) — Income tax expense (benefit) ) — Equity in earnings of subsidiaries — — )(a) — Net income ) Less: Net income attributable to non-controlling interests — — — Net income attributable to Select Medical Corporation $ $ $ $ $ ) $ (a) Elimination of equity in earnings of subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Operations For the Six Months Ended June 30, 2016 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative ) — — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) ) — Other income and expense: Intercompany interest and royalty fees ) ) — — — Intercompany management fees ) ) — — — Equity in earnings of unconsolidated subsidiaries — — — Loss on early retirement of debt ) — — — — ) Non-operating gain (loss) ) — — — Interest expense ) ) ) ) — ) Income from operations before income taxes — Income tax expense — Equity in earnings of subsidiaries — — )(a) — Net income ) Less: Net income attributable to non-controlling interests — — — Net income attributable to Select Medical Corporation $ $ $ $ $ ) $ (a) Elimination of equity in earnings of subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Cash Flows For the Six Months Ended June 30, 2016 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation (in thousands) Operating activities Net income $ $ $ $ $ )(a) $ Adjustments to reconcile net income to net cash provided by (used in) operating activities: Distributions from unconsolidated subsidiaries — — — Depreciation and amortization — Amortization of leasehold interests — — — Provision for bad debts — — Equity in earnings of unconsolidated subsidiaries — ) ) — — ) Loss on early retirement of debt — — — — Loss from disposal of assets — — Gain on sale of businesses ) ) — — — ) Impairment of equity investment — — — — Stock compensation expense — — — Amortization of debt discount, premium and issuance costs — — Deferred income taxes — — ) — ) Changes in operating assets and liabilities, net of effects from acquisition of businesses: Equity in earnings of subsidiaries ) ) — — (a) — Accounts receivable — ) ) ) — ) Other current assets ) ) — Other assets ) ) ) — Accounts payable ) ) ) — ) Accrued expenses ) ) — Income taxes — — — Net cash provided by (used in) operating activities ) — Investing activities Purchases of property and equipment ) ) ) ) — ) Proceeds from sale of assets and business — — Investment in businesses — ) — — — ) Acquisition of businesses, net of cash acquired ) ) ) ) — ) Net cash used in investing activities ) ) ) ) — ) Financing activities Borrowings on revolving facilities — — — — Payments on revolving facilities ) — — ) — ) Net proceeds from Select term loans — — — — Payments on term loans ) — — ) — ) Borrowings of other debt — — Principal payments on other debt ) ) ) ) — ) Dividends paid to Holdings ) — — — — ) Equity investment by Holdings — — — — Proceeds from issuance of non-controlling interest — — — — Repayments of bank overdrafts ) — — — — ) Intercompany ) — — — Tax benefit from stock based awards — — — — Purchase of non-controlling interests — ) — — — ) Distributions to non-controlling interests — — ) ) — ) Net cash provided by (used in) financing activities ) ) — Net increase in cash and cash equivalents — Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ $ $ $ $ — $ (a) Elimination of equity in earnings of consolidated subsidiaries. Select Medical Corporation Condensed Consolidating Balance Sheet December 31, 2015 Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation ( in thousands) Assets Current Assets: Cash and cash equivalents $ $ $ $ $ — $ Accounts receivable, net — — Current deferred tax asset — Intercompany receivables — — )(a) — Prepaid income taxes — — — Other current assets — Total Current Assets ) Property and equipment, net — Investment in affiliates — — )(b) (c) — Goodwill — — — Other identifiable intangibles, net — — — Non-current deferred tax asset — — — )(d) — Other assets — Total Assets ) $ Liabilities and Equity Current Liabilities: Bank overdrafts $ $ — $ — $ — $ — $ Current portion of long-term debt and notes payable — Accounts payable — Intercompany payables — — )(a) — Accrued payroll — Accrued vacation — Accrued interest — — Accrued other — Total Current Liabilities ) Long-term debt, net of current portion — Non-current deferred tax liability — )(d) Other non-current liabilities — Total Liabilities ) Redeemable non-controlling interests — — Stockholder’s Equity: Common stock — — — — Capital in excess of par — — — — Retained earnings (accumulated deficit) ) ) ) )(c) ) Subsidiary investment — )(b) — Total Select Medical Corporation Stockholder’s Equity ) Non-controlling interest — — — Total Equity ) Total Liabilities and Equity $ $ $ $ $ ) $ (a) Elimination of intercompany. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclass of non-current deferred tax asset to report net non-current deferred tax liability in consolidation. Select Medical Corporation Condensed Consolidating Statement of Operations For the Three Months Ended June 30, 2015 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative ) — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) — Other income and expense: Intercompany interest and royalty fees ) — — — Intercompany management fees ) ) — — — Equity in earnings of unconsolidated subsidiaries — — — Interest expense ) ) ) ) — ) Income (loss) from operations before income taxes ) ) — Income tax expense (benefit) ) ) ) — Equity in earnings of subsidiaries — — ) (a) — Net income (loss) ) ) Less: Net income attributable to non-controlling interests — — Net income (loss) attributable to Select Medical Corporation $ $ $ $ ) $ ) $ (a) Elimination of equity in earnings of subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Operations For the Six Months Ended June 30, 2015 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative ) — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) — Other income and expense: Intercompany interest and royalty fees ) — — — Intercompany management fees ) ) — — — Equity in earnings of unconsolidated subsidiaries — — — Interest expense ) ) ) ) — ) Income (loss) from operations before income taxes ) ) — Income tax expense (benefit) ) ) ) — Equity in earnings of subsidiaries — — ) (a) — Net income (loss) ) ) Less: Net income attributable to non-controlling interests — — Net income (loss) attributable to Select Medical Corporation $ $ $ $ ) $ ) $ (a) Elimination of equity in earnings of subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Cash Flows For the Six Months Ended June 30, 2015 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation (in thousands) Operating activities Net income (loss) $ $ $ $ ) $ )(a) $ Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Distributions from unconsolidated subsidiaries — — — — Depreciation and amortization — Provision for bad debts — — Equity in earnings of unconsolidated subsidiaires — ) ) — — ) Loss on disposal of assets — — — — Stock compensation expense — — — — Amortization of debt discount, premium and issuance costs — — — Deferred income taxes ) — — — — ) Changes in operating assets and liabilities, net of effects from acquisition of businesses: Equity in earnings of subsidiaries ) ) — — (a) — Accounts receivable — ) ) — ) Other current assets ) ) — ) Other assets ) — — Accounts payable ) ) — Accrued expenses ) — — Income taxes — — ) — Net cash provided by (used in) operating activities ) — Investing activities Purchases of property and equipment ) ) ) ) — ) Investment in businesses — ) — — — ) Acquisition of businesses, net of cash acquired — — ) ) — ) Net cash used in investing activities ) ) ) ) — ) Financing activities Borrowings on revolving facilities — — — Payments on revolving facilities ) — — ) — ) Net proceeds from Concentra term loans — — — — Payments on term loans ) — — — — ) Borrowings of other debt — — Principal payments on other debt ) ) ) ) — ) Dividends paid to Holdings ) — — — — ) Equity investment by Holdings — — — — Proceeds from issuance of non-controlling interests — — — — Proceeds from bank overdrafts — — — — Tax benefit from stock based awards — — — — Intercompany ) ) — — Distributions to non-controlling interests — — ) — — ) Net cash provided by (used in) financing activities ) — Net increase (decrease) in cash and cash equivalents ) — Cash and cash equivalents at beginning of period — — Cash and cash equivalents at end of period $ $ $ $ $ — $ (a) Elimination of equity in earnings of consolidated subsidiaries. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation-Stock Compensation , which simplifies various aspects of accounting for share-based payments to employees. The areas for simplification involve several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The standard will be effective for fiscal years beginning after December 15, 2016. The Company is currently evaluating the standard to determine the impact it will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases . This ASU includes a lessee accounting model that recognizes two types of leases; finance and operating. This ASU requires that a lessee recognize on the balance sheet assets and liabilities for all leases with lease terms of more than twelve months. Lessees will need to recognize almost all leases on the balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained the dual model, requiring leases to be classified as either operating or finance. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as finance or operating lease. For short-term leases of twelve months or less, lessees are permitted to make an accounting election by class of underlying asset not to recognize right-of-use assets or lease liabilities. If the alternative is elected, lease expense would be recognized generally on the straight-line basis over the respective lease term. The amendments in ASU 2016-02 will take effect for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted as of the beginning of an interim or annual reporting period. A modified retrospective approach is required for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company is evaluating the adoption methodology and the impact of this update on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes , which changes the presentation of deferred income taxes. The intent is to simplify the presentation of deferred income taxes through the requirement that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The revised guidance is effective for annual fiscal periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the standard. In May 2014, March 2016, and April 2016 the FASB issued ASU 2014-09, Revenue from Contracts with Customers , ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Considerations , ASU 2016-10, Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing , and ASU 2016-12, Revenue from Contracts with Customers, Narrow Scope Improvements and Practical Expedients , respectively, which supersede most of the current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. The original standards were effective for fiscal years beginning after December 15, 2016; however, in July 2015, the FASB approved a one-year deferral of these standards, with a new effective date for fiscal years beginning after December 15, 2017. The standards require the selection of a modified retrospective or cumulative effect transition method for retrospective application. The Company is currently evaluating the standards to determine the impact they will have on its consolidated financial statements. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In April and August 2015, the FASB issued ASU 2015-03 and ASU 2015-15, each titled Interest- Imputation of Interest , to simplify the presentation of debt issuance costs. The standard requires debt issuance costs be presented in the balance sheet as a direct deduction from the carrying value of the debt liability. The FASB clarified that debt issuance costs related to line-of-credit arrangements can be presented as an asset and amortized over the term of the arrangement. The Company adopted the standard at the beginning of the first quarter of 2016. The balance sheet as of December 31, 2015 was retrospectively conformed to reflect the adoption of the standard and approximately $38.0 million of unamortized debt issuance costs are now classified as a direct reduction of debt, rather than a component of other assets. |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Acquisitions | |
Schedule of pro forma unaudited results of operations | For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2015 2016 (in thousands, except per share amounts) Net revenue $ $ $ Net income attributable to Holdings Income per common share: Basic $ $ $ Diluted $ $ $ |
Physiotherapy | |
Acquisitions | |
Schedule of allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed | The following table summarizes the preliminary allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed, in accordance with the acquisition method of accounting (in thousands): Cash and cash equivalents $ Identifiable tangible assets, excluding cash and cash equivalents Identifiable intangible assets Goodwill Total assets Total liabilities Acquired non-controlling interests Net assets acquired Less: Cash and cash equivalents acquired ) Net cash paid $ |
Concentra Inc | |
Acquisitions | |
Schedule of allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed | The following table summarizes the allocation of the purchase price to the fair value of identifiable assets acquired and liabilities assumed, in accordance with the acquisition method of accounting (in thousands): Cash and cash equivalents $ Identifiable tangible assets, excluding cash and cash equivalents Identifiable intangible assets Goodwill Total assets Total liabilities Acquired non-controlling interests Net assets acquired Less: Cash and cash equivalents acquired ) Net cash paid $ |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Intangible Assets | |
Schedule of net carrying value of the Company's goodwill and identifiable intangible assets | December 31, 2015 June 30, 2016 (in thousands) Goodwill $ $ Identifiable intangibles—Indefinite lived assets: Trademarks Certificates of need Accreditations Identifiable intangibles—Finite lived assets: Customer relationships Favorable leasehold interests Non-compete agreements — Total identifiable intangibles $ $ |
Schedule of changes in the carrying amount of goodwill for the Company's reportable segments | Specialty Hospitals Outpatient Rehabilitation Concentra Total (in thousands) Balance as of December 31, 2015 $ $ $ $ Acquired Measurement period adjustment — ) ) Disposed ) ) — ) Balance as of June 30, 2016 $ $ $ $ |
Indebtedness (Tables)
Indebtedness (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Indebtedness | |
Schedule of components of long-term debt and notes payable | December 31, 2015 June 30, 2016 (in thousands) Select 6.375% senior notes(1) $ $ Select credit facilities: Select revolving facility Select term loans(2) Other—Select Total Select debt Less: Select current maturities Select long-term debt maturities $ $ Concentra credit facilities: Concentra revolving facility $ $ — Concentra term loans(3) Other—Concentra Total Concentra debt Less: Concentra current maturities Concentra long-term debt maturities $ $ Total current maturities $ $ Total long-term debt maturities Total debt $ $ (1) Includes unamortized premium of $1.2 million and $1.1 million at December 31, 2015 and June 30, 2016, respectively. Includes unamortized debt issuance costs of $10.4 million and $9.4 million at December 31, 2015 and June 30, 2016, respectively. (2) Includes unamortized discounts of $2.8 million and $13.8 million at December 31, 2015 and June 30, 2016, respectively. Includes unamortized debt issuance costs of $7.4 million and $16.0 million at December 31, 2015 and June 30, 2016, respectively. (3) Includes unamortized discounts of $2.9 million and $2.7 million at December 31, 2015 and June 30, 2016, respectively. Includes unamortized debt issuance costs of $20.2 million and $18.7 million at December 31, 2015 and June 30, 2016, respectively. |
Schedule of maturities of the Company's long-term debt | Select Concentra Total (in thousands) July 1, 2016 — December 31, 2016 $ $ $ 2017 2018 2019 2020 2021 and beyond Total principal Unamortized discounts and premiums ) ) ) Unamortized debt issuance costs ) ) ) Total $ $ $ |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value | |
Schedule of carrying amounts and estimated fair values of financial instruments | December 31, 2015 June 30, 2016 Face Value Carrying Value Fair Value Face Value Carrying Value Fair Value (in thousands) Select 6.375% senior notes(1) $ $ $ $ $ $ Select credit facilities(2) Concentra credit facilities(3) (1) The carrying value includes unamortized premium of $1.2 million and $1.1 million at December 31, 2015 and June 30, 2016, respectively. Includes unamortized debt issuance costs of $10.4 million and $9.4 million at December 31, 2015 and June 30, 2016, respectively. (2) The carrying value includes unamortized discounts of $2.8 million and $13.8 million at December 31, 2015 and June 30, 2016, respectively. Includes unamortized debt issuance costs of $7.4 million and $16.0 million at December 31, 2015 and June 30, 2016, respectively. (3) The carrying value includes unamortized discounts of $2.9 million and $2.7 million at December 31, 2015 and June 30, 2016, respectively. Includes unamortized debt issuance costs of $20.2 million and $18.7 million at December 31, 2015 and June 30, 2016, respectively. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Information | |
Schedule of selected financial data for the Company's reportable segments | Three Months Ended June 30, 2015 Specialty Hospitals Outpatient Rehabilitation Concentra(1) Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures Three Months Ended June 30, 2016 Specialty Hospitals Outpatient Rehabilitation Concentra Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures Six Months Ended June 30, 2015 Specialty Hospitals Outpatient Rehabilitation Concentra(1) Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures Six Months Ended June 30, 2016 Specialty Hospitals Outpatient Rehabilitation(2) Concentra Other Total (in thousands) Net operating revenues $ $ $ $ $ Adjusted EBITDA ) Total assets Capital expenditures |
Schedule of reconciliation of Adjusted EBITDA to income before income taxes | Three Months Ended June 30, 2015 Specialty Hospitals Outpatient Rehabilitation Concentra(1) Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — — ) Concentra acquisition costs — — ) — Income (loss) from operations $ $ $ $ ) $ Equity in earnings of unconsolidated subsidiaries Interest expense ) Income before income taxes $ Three Months Ended June 30, 2016 Specialty Hospitals Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — ) ) Income (loss) from operations $ $ $ $ ) $ Equity in earnings of unconsolidated subsidiaries Non-operating gain Interest expense ) Income before income taxes $ Six Months Ended June 30, 2015 Specialty Hospitals Outpatient Rehabilitation Concentra(1) Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — — ) Concentra acquisition costs — — ) — Income (loss) from operations $ $ $ $ ) $ Equity in earnings of unconsolidated subsidiaries Interest expense ) Income before income taxes $ Six Months Ended June 30, 2016 Specialty Hospitals Outpatient Rehabilitation(2) Concentra Other Total (in thousands) Adjusted EBITDA $ $ $ $ ) Depreciation and amortization ) ) ) ) Stock compensation expense — — ) ) Physiotherapy acquisition costs — — — ) Income (loss) from operations $ $ $ $ ) $ Loss on early retirement of debt ) Equity in earnings of unconsolidated subsidiaries Non-operating gain Interest expense ) Income before income taxes $ (1) The selected financial data for the Company’s Concentra segment for the periods presented begins as of June 1, 2015, which is the date the Concentra acquisition was consummated. (2) The outpatient rehabilitation segment includes the operating results of contract therapy businesses through March 31, 2016 and Physiotherapy beginning March 4, 2016. |
Income per Common Share (Tables
Income per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Income per Common Share | |
Schedule of computation of basic and diluted income per common share | For the Three Months Ended June 30, For the Six Months Ended June 30, 2015 2016 2015 2016 (in thousands, except per share amounts) Numerator: Net income attributable to Select Medical Holdings Corporation $ $ $ $ Less: Earnings allocated to unvested restricted stockholders Net income available to common stockholders $ $ $ $ Denominator: Weighted average shares — basic Effect of dilutive securities: Stock options Weighted average shares — diluted Basic income per common share $ $ $ $ Diluted income per common share $ $ $ $ |
Financial Information for Sub26
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes (Tables) - Select | 6 Months Ended |
Jun. 30, 2016 | |
Schedule of Consolidating Balance Sheet | Condensed Consolidating Balance Sheet June 30, 2016 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation (in thousands) Assets Current Assets: Cash and cash equivalents $ $ $ $ $ — $ Accounts receivable, net — — Current deferred tax asset — Intercompany receivables — — )(a) — Other current assets — Total Current Assets ) Property and equipment, net — Investment in affiliates — — )(b) (c) — Goodwill — — — Other identifiable intangibles, net — — — Non-current deferred tax asset — — — )(d) — Other assets — Total Assets $ $ $ $ $ ) $ Liabilities and Equity Current Liabilities: Bank overdrafts $ $ — $ — $ — $ — $ Current portion of long-term debt and notes payable — Accounts payable — Intercompany payables — — )(a) — Accrued payroll — Accrued vacation — Accrued interest — Accrued other — Income taxes payable — — — Total Current Liabilities ) Long-term debt, net of current portion — Non-current deferred tax liability — )(d) Other non-current liabilities — Total Liabilities ) Redeemable non-controlling interests — — — Stockholder’s Equity: Common stock — — — — Capital in excess of par — — — — Retained earnings (accumulated deficit) ) )(c) Subsidiary investment — )(b) — Total Select Medical Corporation Stockholder’s Equity ) Non-controlling interest — — — Total Equity ) Total Liabilities and Equity $ $ $ $ $ ) $ (a) Elimination of intercompany. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclass of non-current deferred tax asset to report net non-current deferred tax liability in consolidation. Condensed Consolidating Balance Sheet December 31, 2015 Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation ( in thousands) Assets Current Assets: Cash and cash equivalents $ $ $ $ $ — $ Accounts receivable, net — — Current deferred tax asset — Intercompany receivables — — )(a) — Prepaid income taxes — — — Other current assets — Total Current Assets ) Property and equipment, net — Investment in affiliates — — )(b) (c) — Goodwill — — — Other identifiable intangibles, net — — — Non-current deferred tax asset — — — )(d) — Other assets — Total Assets ) $ Liabilities and Equity Current Liabilities: Bank overdrafts $ $ — $ — $ — $ — $ Current portion of long-term debt and notes payable — Accounts payable — Intercompany payables — — )(a) — Accrued payroll — Accrued vacation — Accrued interest — — Accrued other — Total Current Liabilities ) Long-term debt, net of current portion — Non-current deferred tax liability — )(d) Other non-current liabilities — Total Liabilities ) Redeemable non-controlling interests — — Stockholder’s Equity: Common stock — — — — Capital in excess of par — — — — Retained earnings (accumulated deficit) ) ) ) )(c) ) Subsidiary investment — )(b) — Total Select Medical Corporation Stockholder’s Equity ) Non-controlling interest — — — Total Equity ) Total Liabilities and Equity $ $ $ $ $ ) $ (a) Elimination of intercompany. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclass of non-current deferred tax asset to report net non-current deferred tax liability in consolidation. |
Schedule of Consolidating Statement of Operations | Condensed Consolidating Statement of Operations For the Three Months Ended June 30, 2016 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative — — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) ) — Other income and expense: Intercompany interest and royalty fees ) ) — — — Intercompany management fees ) ) — — — Equity in earnings of unconsolidated subsidiaries — — — Non-operating gain — — — Interest expense ) ) ) ) — ) Income (loss) from operations before income taxes ) — Income tax expense (benefit) ) — Equity in earnings of subsidiaries — — )(a) — Net income ) Less: Net income attributable to non-controlling interests — — — Net income attributable to Select Medical Corporation $ $ $ $ $ ) $ (a) Elimination of equity in earnings of subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Operations For the Six Months Ended June 30, 2016 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative ) — — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) ) — Other income and expense: Intercompany interest and royalty fees ) ) — — — Intercompany management fees ) ) — — — Equity in earnings of unconsolidated subsidiaries — — — Loss on early retirement of debt ) — — — — ) Non-operating gain (loss) ) — — — Interest expense ) ) ) ) — ) Income from operations before income taxes — Income tax expense — Equity in earnings of subsidiaries — — )(a) — Net income ) Less: Net income attributable to non-controlling interests — — — Net income attributable to Select Medical Corporation $ $ $ $ $ ) $ (a) Elimination of equity in earnings of subsidiaries. Condensed Consolidating Statement of Operations For the Three Months Ended June 30, 2015 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative ) — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) — Other income and expense: Intercompany interest and royalty fees ) — — — Intercompany management fees ) ) — — — Equity in earnings of unconsolidated subsidiaries — — — Interest expense ) ) ) ) — ) Income (loss) from operations before income taxes ) ) — Income tax expense (benefit) ) ) ) — Equity in earnings of subsidiaries — — ) (a) — Net income (loss) ) ) Less: Net income attributable to non-controlling interests — — Net income (loss) attributable to Select Medical Corporation $ $ $ $ ) $ ) $ (a) Elimination of equity in earnings of subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Operations For the Six Months Ended June 30, 2015 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation (in thousands) Net operating revenues $ $ $ $ $ — $ Costs and expenses: Cost of services — General and administrative ) — — Bad debt expense — — Depreciation and amortization — Total costs and expenses — Income (loss) from operations ) — Other income and expense: Intercompany interest and royalty fees ) — — — Intercompany management fees ) ) — — — Equity in earnings of unconsolidated subsidiaries — — — Interest expense ) ) ) ) — ) Income (loss) from operations before income taxes ) ) — Income tax expense (benefit) ) ) ) — Equity in earnings of subsidiaries — — ) (a) — Net income (loss) ) ) Less: Net income attributable to non-controlling interests — — Net income (loss) attributable to Select Medical Corporation $ $ $ $ ) $ ) $ (a) Elimination of equity in earnings of subsidiaries. |
Schedule of Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows For the Six Months Ended June 30, 2016 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation (in thousands) Operating activities Net income $ $ $ $ $ )(a) $ Adjustments to reconcile net income to net cash provided by (used in) operating activities: Distributions from unconsolidated subsidiaries — — — Depreciation and amortization — Amortization of leasehold interests — — — Provision for bad debts — — Equity in earnings of unconsolidated subsidiaries — ) ) — — ) Loss on early retirement of debt — — — — Loss from disposal of assets — — Gain on sale of businesses ) ) — — — ) Impairment of equity investment — — — — Stock compensation expense — — — Amortization of debt discount, premium and issuance costs — — Deferred income taxes — — ) — ) Changes in operating assets and liabilities, net of effects from acquisition of businesses: Equity in earnings of subsidiaries ) ) — — (a) — Accounts receivable — ) ) ) — ) Other current assets ) ) — Other assets ) ) ) — Accounts payable ) ) ) — ) Accrued expenses ) ) — Income taxes — — — Net cash provided by (used in) operating activities ) — Investing activities Purchases of property and equipment ) ) ) ) — ) Proceeds from sale of assets and business — — Investment in businesses — ) — — — ) Acquisition of businesses, net of cash acquired ) ) ) ) — ) Net cash used in investing activities ) ) ) ) — ) Financing activities Borrowings on revolving facilities — — — — Payments on revolving facilities ) — — ) — ) Net proceeds from Select term loans — — — — Payments on term loans ) — — ) — ) Borrowings of other debt — — Principal payments on other debt ) ) ) ) — ) Dividends paid to Holdings ) — — — — ) Equity investment by Holdings — — — — Proceeds from issuance of non-controlling interest — — — — Repayments of bank overdrafts ) — — — — ) Intercompany ) — — — Tax benefit from stock based awards — — — — Purchase of non-controlling interests — ) — — — ) Distributions to non-controlling interests — — ) ) — ) Net cash provided by (used in) financing activities ) ) — Net increase in cash and cash equivalents — Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ $ $ $ $ — $ (a) Elimination of equity in earnings of consolidated subsidiaries. Condensed Consolidating Statement of Cash Flows For the Six Months Ended June 30, 2015 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Eliminations Consolidated Select Medical Corporation (in thousands) Operating activities Net income (loss) $ $ $ $ ) $ )(a) $ Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Distributions from unconsolidated subsidiaries — — — — Depreciation and amortization — Provision for bad debts — — Equity in earnings of unconsolidated subsidiaires — ) ) — — ) Loss on disposal of assets — — — — Stock compensation expense — — — — Amortization of debt discount, premium and issuance costs — — — Deferred income taxes ) — — — — ) Changes in operating assets and liabilities, net of effects from acquisition of businesses: Equity in earnings of subsidiaries ) ) — — (a) — Accounts receivable — ) ) — ) Other current assets ) ) — ) Other assets ) — — Accounts payable ) ) — Accrued expenses ) — — Income taxes — — ) — Net cash provided by (used in) operating activities ) — Investing activities Purchases of property and equipment ) ) ) ) — ) Investment in businesses — ) — — — ) Acquisition of businesses, net of cash acquired — — ) ) — ) Net cash used in investing activities ) ) ) ) — ) Financing activities Borrowings on revolving facilities — — — Payments on revolving facilities ) — — ) — ) Net proceeds from Concentra term loans — — — — Payments on term loans ) — — — — ) Borrowings of other debt — — Principal payments on other debt ) ) ) ) — ) Dividends paid to Holdings ) — — — — ) Equity investment by Holdings — — — — Proceeds from issuance of non-controlling interests — — — — Proceeds from bank overdrafts — — — — Tax benefit from stock based awards — — — — Intercompany ) ) — — Distributions to non-controlling interests — — ) — — ) Net cash provided by (used in) financing activities ) — Net increase (decrease) in cash and cash equivalents ) — Cash and cash equivalents at beginning of period — — Cash and cash equivalents at end of period $ $ $ $ $ — $ (a) Elimination of equity in earnings of consolidated subsidiaries. |
Accounting Policies (Details)
Accounting Policies (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Recently Adopted Accounting Pronouncements | ||
Unamortized debt issuance costs | $ 44,117 | |
Debt liability | $ 2,717,822 | $ 2,385,896 |
Adoption Of ASU 2015-03 and ASU 2015-15 | Adjustment for recently adopted accounting pronouncements | ||
Recently Adopted Accounting Pronouncements | ||
Unamortized debt issuance costs | (38,000) | |
Debt liability | (38,000) | |
Select | Adoption Of ASU 2015-03 and ASU 2015-15 | Adjustment for recently adopted accounting pronouncements | ||
Recently Adopted Accounting Pronouncements | ||
Unamortized debt issuance costs | (38,000) | |
Debt liability | $ (38,000) |
Acquisitions - Physiotherapy Ac
Acquisitions - Physiotherapy Acquisition (Details) - USD ($) $ in Thousands | Mar. 04, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Mar. 03, 2016 | Dec. 31, 2015 |
Fair value of identifiable assets acquired and liabilities assumed: | |||||
Goodwill | $ 2,638,286 | $ 2,314,624 | |||
Net cash paid | 421,519 | $ 1,047,997 | |||
Physiotherapy | |||||
Acquisitions | |||||
Voting equity interests acquired | 100.00% | ||||
Acquisition costs | $ 3,200 | ||||
Fair value of identifiable assets acquired and liabilities assumed: | |||||
Cash and cash equivalents | $ 12,340 | ||||
Identifiable tangible assets, excluding cash and cash equivalents | 93,426 | ||||
Identifiable intangible assets | 33,495 | ||||
Goodwill | 319,203 | ||||
Total assets | 458,464 | ||||
Total liabilities | 34,956 | ||||
Acquired non-controlling interests | 2,514 | ||||
Net assets acquired | 420,994 | ||||
Net cash paid | $ 408,654 | ||||
Estimated value of goodwill, deductible for tax purposes | $ 8,800 |
Acquisitions - Concentra Acquis
Acquisitions - Concentra Acquisition (Details) - USD ($) $ in Thousands | Jun. 01, 2015 | Jun. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 |
Fair value of identifiable assets acquired and liabilities assumed: | |||||
Goodwill | $ 2,638,286 | $ 2,638,286 | $ 2,314,624 | ||
Net cash paid | 421,519 | $ 1,047,997 | |||
Concentra Inc | |||||
Fair value of identifiable assets acquired and liabilities assumed: | |||||
Contributed net revenue | 254,900 | 505,700 | |||
Contributed net income | $ 4,700 | $ 7,000 | |||
Concentra Inc | Humana | MJ Acquisition Corporation | |||||
Acquisitions | |||||
Voting equity interests acquired | 100.00% | ||||
Fair value of identifiable assets acquired and liabilities assumed: | |||||
Cash and cash equivalents | $ 3,772 | ||||
Identifiable tangible assets, excluding cash and cash equivalents | 406,926 | ||||
Identifiable intangible assets | 254,990 | ||||
Goodwill | 651,152 | ||||
Total assets | 1,316,840 | ||||
Total liabilities | 248,797 | ||||
Acquired non-controlling interests | 17,084 | ||||
Net assets acquired | 1,050,959 | ||||
Net cash paid | 1,047,187 | ||||
Estimated value of goodwill, deductible for tax purposes | $ 23,900 |
Acquisitions - Intangible Asset
Acquisitions - Intangible Assets, Proforma Results and Other Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 04, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 |
Acquisitions | |||||
Net cash paid | $ 421,519 | $ 1,047,997 | |||
Goodwill | 2,638,286 | $ 2,314,624 | |||
Pro Forma | |||||
Pro forma results of operations | |||||
Net revenue | $ 1,135,268 | 2,239,491 | 2,250,274 | ||
Net income attributable to Select | $ 38,671 | $ 85,820 | $ 64,069 | ||
Income per common share: | |||||
Basic (in dollars per share) | $ 0.29 | $ 0.64 | $ 0.49 | ||
Diluted (in dollars per share) | $ 0.29 | $ 0.64 | $ 0.49 | ||
Specialty Hospitals | |||||
Acquisitions | |||||
Goodwill | $ 1,361,346 | 1,357,379 | |||
Outpatient Rehabilitation | |||||
Acquisitions | |||||
Goodwill | 617,920 | 306,595 | |||
Concentra | |||||
Acquisitions | |||||
Goodwill | 659,020 | $ 650,650 | |||
Physiotherapy | |||||
Acquisitions | |||||
Net cash paid | $ 408,654 | ||||
Non-controlling interests | 2,514 | ||||
Liabilities assumed | 34,956 | ||||
Fair value of assets acquired, principally accounts receivable and property and equipment | 458,464 | ||||
Goodwill | $ 319,203 | ||||
Income per common share: | |||||
Acquisition costs included (excluded) from proforma results | 3,200 | ||||
Physiotherapy | Pro Forma | |||||
Income per common share: | |||||
Acquisition costs included (excluded) from proforma results | (3,200) | $ 3,200 | |||
Concentra Inc | |||||
Income per common share: | |||||
Acquisition costs included (excluded) from proforma results | $ (4,700) | ||||
Other Acquisitions | |||||
Acquisitions | |||||
Total consideration (net of cash acquired) | 49,700 | ||||
Net cash paid | 12,500 | ||||
Non-controlling interests | 9,800 | ||||
Liabilities assumed | 1,300 | ||||
Fair value of assets acquired, principally accounts receivable and property and equipment | 11,000 | ||||
Other Acquisitions | Specialty Hospitals | |||||
Acquisitions | |||||
Goodwill | 14,600 | ||||
Other Acquisitions | Outpatient Rehabilitation | |||||
Acquisitions | |||||
Goodwill | 500 | ||||
Other Acquisitions | Concentra | |||||
Acquisitions | |||||
Goodwill | $ 3,500 |
Sale of Businesses (Details)
Sale of Businesses (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016item | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | |
Sale of Businesses | |||
Gain on disposal | $ 43.4 | ||
Contract Therapy | Disposed by Sale | |||
Sale of Businesses | |||
Gain on disposal | 33.9 | ||
Total consideration from sale of businesses | $ 65 | ||
Specialty Hospitals | Disposed by Sale | |||
Sale of Businesses | |||
Gain on disposal | 7.8 | ||
Number of Businesses Sold | item | 5 | ||
Outpatient Rehabilitation | Disposed by Sale | |||
Sale of Businesses | |||
Gain on disposal | $ 1.7 | ||
Number of Businesses Sold | item | 9 |
Impairment of Equity Investme32
Impairment of Equity Investment (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Impairment of Equity Investment | |
Impairment of equity investment | $ 5,339 |
Intangible Assets - Carrying Va
Intangible Assets - Carrying Value and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Intangible Assets, (including Goodwill) | |||||
Goodwill | $ 2,638,286 | $ 2,638,286 | $ 2,314,624 | ||
Total identifiable intangibles | 2,982,214 | 2,982,214 | 2,633,299 | ||
Estimated amortization expense | |||||
Carrying value of unfavorable leasehold interests | 4,300 | 4,300 | 3,000 | ||
Increased rent expense | 200 | 300 | |||
Customer relationships | |||||
Intangible Assets, (including Goodwill) | |||||
Total identifiable intangibles - Finite lived assets | 125,765 | 125,765 | 132,751 | ||
Favorable leasehold interests | |||||
Intangible Assets, (including Goodwill) | |||||
Total identifiable intangibles - Finite lived assets | 11,699 | 11,699 | 8,248 | ||
Non-compete agreements | |||||
Intangible Assets, (including Goodwill) | |||||
Total identifiable intangibles - Finite lived assets | 24,754 | 24,754 | |||
Customer relationship and non-compete agreements | |||||
Amortized intangible assets: | |||||
Amortization expense | 4,300 | $ 1,100 | 8,100 | $ 1,200 | |
Estimated amortization expense | |||||
2,016 | 16,400 | 16,400 | |||
2,017 | 16,400 | 16,400 | |||
2,018 | 16,400 | 16,400 | |||
2,019 | 16,400 | 16,400 | |||
2,020 | 16,400 | 16,400 | |||
Trademarks | |||||
Intangible Assets, (including Goodwill) | |||||
Total identifiable intangibles - Indefinite lived assets | 166,419 | $ 166,419 | 162,609 | ||
Weighted average time until next renewal | 3 years 1 month 6 days | ||||
Certificates of need | |||||
Intangible Assets, (including Goodwill) | |||||
Total identifiable intangibles - Indefinite lived assets | 13,156 | $ 13,156 | 13,022 | ||
Accreditations | |||||
Intangible Assets, (including Goodwill) | |||||
Total identifiable intangibles - Indefinite lived assets | $ 2,135 | $ 2,135 | $ 2,045 | ||
Weighted average time until next renewal | 1 year 6 months |
Intangible Assets - Changes in
Intangible Assets - Changes in the Carrying Amount of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Goodwill | |
Balance at the beginning of the period | $ 2,314,624 |
Acquired | 375,953 |
Measurement period adjustment | (33,265) |
Disposed | (19,026) |
Balance at the end of the period | 2,638,286 |
Specialty Hospitals | |
Goodwill | |
Balance at the beginning of the period | 1,357,379 |
Acquired | 14,600 |
Disposed | (10,633) |
Balance at the end of the period | 1,361,346 |
Outpatient Rehabilitation | |
Goodwill | |
Balance at the beginning of the period | 306,595 |
Acquired | 357,808 |
Measurement period adjustment | (38,090) |
Disposed | (8,393) |
Balance at the end of the period | 617,920 |
Concentra | |
Goodwill | |
Balance at the beginning of the period | 650,650 |
Acquired | 3,545 |
Measurement period adjustment | 4,825 |
Balance at the end of the period | $ 659,020 |
Indebtedness - Components of Lo
Indebtedness - Components of Long-term Debt and Loss on extinguishment of debt (Details) - USD ($) $ in Thousands | Mar. 04, 2016 | Mar. 03, 2016 | Mar. 02, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Long-term debt and notes payable | |||||
Total debt | $ 2,717,822 | $ 2,385,896 | |||
Less: current maturities | 10,511 | 225,166 | |||
Long-term debt, net of current portion | 2,707,311 | 2,160,730 | |||
Unamortized debt issuance costs | 44,117 | ||||
Loss on early retirement of debt | 773 | ||||
Concentra | |||||
Long-term debt and notes payable | |||||
Total debt | 630,856 | 634,971 | |||
Less: current maturities | 3,733 | 2,261 | |||
Long-term debt, net of current portion | 627,123 | 632,710 | |||
Unamortized debt issuance costs | 18,710 | ||||
Concentra | Credit facility | |||||
Long-term debt and notes payable | |||||
Unamortized discounts | 2,700 | 2,900 | |||
Unamortized debt issuance costs | 18,700 | 20,200 | |||
Aggregate principal amount | 645,500 | 652,750 | |||
Concentra | Revolving credit facility | |||||
Long-term debt and notes payable | |||||
Total debt | 5,000 | ||||
Concentra | Term loans | |||||
Long-term debt and notes payable | |||||
Total debt | 624,113 | 624,659 | |||
Unamortized discounts | 2,700 | 2,900 | |||
Unamortized debt issuance costs | 18,700 | 20,200 | |||
Concentra | Other | |||||
Long-term debt and notes payable | |||||
Total debt | 6,743 | 5,312 | |||
Select Excluding Concentra | |||||
Long-term debt and notes payable | |||||
Total debt | 2,086,966 | 1,750,925 | |||
Less: current maturities | 6,778 | 222,905 | |||
Long-term debt, net of current portion | 2,080,188 | 1,528,020 | |||
Unamortized debt issuance costs | 25,407 | ||||
Select Excluding Concentra | Revolving credit facility | |||||
Long-term debt and notes payable | |||||
Total debt | 240,000 | 295,000 | |||
Select Excluding Concentra | Term loans | |||||
Long-term debt and notes payable | |||||
Total debt | 1,121,105 | 743,071 | |||
Unamortized discounts | 13,800 | 2,800 | |||
Unamortized debt issuance costs | $ 16,000 | $ 7,400 | |||
Select Excluding Concentra | 6.375% senior notes | |||||
Long-term debt and notes payable | |||||
Interest rate of debt (as a percent) | 6.375% | 6.375% | |||
Total debt | $ 701,703 | $ 700,867 | |||
Unamortized premiums | 1,100 | 1,200 | |||
Unamortized debt issuance costs | 9,400 | 10,400 | |||
Select Excluding Concentra | Other | |||||
Long-term debt and notes payable | |||||
Total debt | 24,158 | 11,987 | |||
Select | |||||
Long-term debt and notes payable | |||||
Less: current maturities | 10,511 | 225,166 | |||
Long-term debt, net of current portion | 2,707,311 | 2,160,730 | |||
Loss on early retirement of debt | 773 | ||||
Select | Credit facility | |||||
Long-term debt and notes payable | |||||
Unamortized discounts | 13,800 | 2,800 | |||
Unamortized debt issuance costs | 16,000 | 7,400 | |||
Aggregate principal amount | $ 1,390,877 | $ 1,048,277 | |||
Select | Term loans | |||||
Long-term debt and notes payable | |||||
Principal prepayments from excess cash flow | $ 10,200 | ||||
Select | 6.375% senior notes | |||||
Long-term debt and notes payable | |||||
Interest rate of debt (as a percent) | 6.375% | 6.375% | |||
Unamortized premiums | $ 1,100 | $ 1,200 | |||
Unamortized debt issuance costs | 9,400 | 10,400 | |||
Aggregate principal amount | 710,000 | $ 710,000 | |||
Select | Series F Term Loan | Additional Credit Extension Amendment | |||||
Long-term debt and notes payable | |||||
Aggregate principal amount | $ 625,000 | ||||
Frequency of installment payments | quarterly | ||||
Principal payments, quarterly installments (as a percent) | 0.25% | ||||
Select | Series F Term Loan | Additional Credit Extension Amendment | Adjusted LIBO rate floor | |||||
Long-term debt and notes payable | |||||
Interest rate of debt (as a percent) | 1.00% | ||||
Select | Series F Term Loan | Additional Credit Extension Amendment | Adjusted LIBO | |||||
Long-term debt and notes payable | |||||
Variable rate basis | Adjusted LIBO | ||||
Interest rate margin (as a percent) | 5.00% | ||||
Select | Series F Term Loan | Additional Credit Extension Amendment | Alternate base rate | |||||
Long-term debt and notes payable | |||||
Variable rate basis | Alternate Base Rate | ||||
Interest rate margin (as a percent) | 4.00% | ||||
Select | Series F Term Loan | Prior to March 4, 2017 | Additional Credit Extension Amendment | |||||
Long-term debt and notes payable | |||||
Prepayment premium (as a percent) | 1.00% | ||||
Select | Series E Term Loan | Adjusted LIBO rate floor | |||||
Long-term debt and notes payable | |||||
Interest rate of debt (as a percent) | 1.00% | ||||
Select | Series E Term Loan | Adjusted LIBO | |||||
Long-term debt and notes payable | |||||
Variable rate basis | Adjusted LIBO | ||||
Interest rate margin (as a percent) | 4.00% | ||||
Select | Series E Term Loan | Alternate base rate | |||||
Long-term debt and notes payable | |||||
Variable rate basis | Alternative Base Rate | ||||
Interest rate margin (as a percent) | 3.00% | ||||
Select | Series E Term Loan | Additional Credit Extension Amendment | Adjusted LIBO rate floor | |||||
Long-term debt and notes payable | |||||
Interest rate of debt (as a percent) | 1.00% | ||||
Select | Series E Term Loan | Additional Credit Extension Amendment | Adjusted LIBO | |||||
Long-term debt and notes payable | |||||
Variable rate basis | Adjusted LIBO | ||||
Interest rate margin (as a percent) | 5.00% | ||||
Select | Series E Term Loan | Additional Credit Extension Amendment | Alternate base rate | |||||
Long-term debt and notes payable | |||||
Variable rate basis | Alternative Base Rate | ||||
Interest rate margin (as a percent) | 4.00% | ||||
Select | Series D Term Loan | |||||
Long-term debt and notes payable | |||||
Loss on early retirement of debt | $ 800 |
Indebtedness - Maturities of Lo
Indebtedness - Maturities of Long-term Debt and Notes Payable (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Maturities of Long-Term Debt and Notes Payable | |
July 1, 2016 - December 31, 2016 | $ 12,439 |
2,017 | 21,128 |
2,018 | 775,825 |
2,019 | 22,685 |
2,020 | 10,924 |
2021 and beyond | 1,934,278 |
Total principal | 2,777,279 |
Unamortized discounts and premiums | (15,340) |
Unamortized debt issuance costs | (44,117) |
Total | 2,717,822 |
Concentra | |
Maturities of Long-Term Debt and Notes Payable | |
July 1, 2016 - December 31, 2016 | 3,559 |
2,017 | 5,871 |
2,018 | 4,597 |
2,019 | 4,615 |
2,020 | 4,636 |
2021 and beyond | 628,965 |
Total principal | 652,243 |
Unamortized discounts and premiums | (2,677) |
Unamortized debt issuance costs | (18,710) |
Total | 630,856 |
Select Excluding Concentra | |
Maturities of Long-Term Debt and Notes Payable | |
July 1, 2016 - December 31, 2016 | 8,880 |
2,017 | 15,257 |
2,018 | 771,228 |
2,019 | 18,070 |
2,020 | 6,288 |
2021 and beyond | 1,305,313 |
Total principal | 2,125,036 |
Unamortized discounts and premiums | (12,663) |
Unamortized debt issuance costs | (25,407) |
Total | $ 2,086,966 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Fair Value | ||
Unamortized debt issuance costs | $ 44,117 | |
Concentra | ||
Fair Value | ||
Unamortized debt issuance costs | 18,710 | |
Credit facility | Select | ||
Fair Value | ||
Face Value | 1,390,877 | $ 1,048,277 |
Carrying value | 1,361,105 | 1,038,071 |
Fair value | 1,376,415 | 1,023,616 |
Unamortized discounts | 13,800 | 2,800 |
Unamortized debt issuance costs | 16,000 | 7,400 |
Credit facility | Concentra | ||
Fair Value | ||
Face Value | 645,500 | 652,750 |
Carrying value | 624,113 | 629,659 |
Fair value | 638,159 | 645,392 |
Unamortized discounts | 2,700 | 2,900 |
Unamortized debt issuance costs | $ 18,700 | $ 20,200 |
6.375% senior notes | Select | ||
Fair Value | ||
Interest rate of debt (as a percent) | 6.375% | 6.375% |
Face Value | $ 710,000 | $ 710,000 |
Carrying value | 701,703 | 700,867 |
Fair value | 674,926 | 623,948 |
Unamortized premium | 1,100 | 1,200 |
Unamortized debt issuance costs | $ 9,400 | $ 10,400 |
Segment Information - Selected
Segment Information - Selected Financial Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Summary of selected financial data | |||||
Net operating revenues | $ 1,097,631 | $ 887,065 | $ 2,185,961 | $ 1,682,408 | |
Adjusted EBITDA | 141,457 | 114,897 | 270,072 | 213,837 | |
Total assets | 4,838,349 | 4,341,335 | 4,838,349 | 4,341,335 | $ 4,388,678 |
Capital expenditures | 33,490 | 41,064 | 80,258 | 68,912 | |
Operating Segments | Specialty Hospitals | |||||
Summary of selected financial data | |||||
Net operating revenues | 585,816 | 592,336 | 1,184,770 | 1,191,117 | |
Adjusted EBITDA | 82,739 | 91,447 | 169,495 | 187,919 | |
Total assets | 2,448,390 | 2,372,723 | 2,448,390 | 2,372,723 | |
Capital expenditures | 21,313 | 31,042 | 54,988 | 53,835 | |
Operating Segments | Outpatient Rehabilitation | |||||
Summary of selected financial data | |||||
Net operating revenues | 256,928 | 207,795 | 495,010 | 404,238 | |
Adjusted EBITDA | 38,132 | 28,722 | 67,011 | 50,855 | |
Total assets | 984,140 | 538,586 | 984,140 | 538,586 | |
Capital expenditures | 3,825 | 3,103 | 8,798 | 7,025 | |
Operating Segments | Concentra | |||||
Summary of selected financial data | |||||
Net operating revenues | 254,868 | 86,829 | 505,745 | 86,829 | |
Adjusted EBITDA | 43,039 | 11,199 | 77,192 | 11,199 | |
Total assets | 1,333,293 | 1,320,941 | 1,333,293 | 1,320,941 | |
Capital expenditures | 4,716 | 3,854 | 7,927 | 3,854 | |
Other | |||||
Summary of selected financial data | |||||
Net operating revenues | 19 | 105 | 436 | 224 | |
Adjusted EBITDA | (22,453) | (16,471) | (43,626) | (36,136) | |
Total assets | 72,526 | 109,085 | 72,526 | 109,085 | |
Capital expenditures | $ 3,636 | $ 3,065 | $ 8,545 | $ 4,198 |
Segment Information - Reconcili
Segment Information - Reconciliation of Adjusted EBITDA to Income Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment information | ||||
Adjusted EBITDA | $ 141,457 | $ 114,897 | $ 270,072 | $ 213,837 |
Depreciation and amortization | (36,205) | (21,848) | (70,722) | (39,196) |
Income from operations | 101,054 | 85,011 | 187,940 | 164,276 |
Loss on early retirement of debt | (773) | |||
Equity in earnings of unconsolidated subsidiaries | 4,546 | 3,848 | 9,198 | 6,440 |
Non-operating gain | 13,035 | 38,122 | ||
Interest expense | (44,332) | (25,288) | (83,180) | (46,676) |
Income before income taxes | 74,303 | 63,571 | 151,307 | 124,040 |
Concentra Inc | ||||
Segment information | ||||
Acquisition costs | (4,700) | |||
Physiotherapy | ||||
Segment information | ||||
Acquisition costs | 3,200 | |||
Operating Segments | Specialty Hospitals | ||||
Segment information | ||||
Adjusted EBITDA | 82,739 | 91,447 | 169,495 | 187,919 |
Depreciation and amortization | (13,812) | (13,404) | (27,705) | (26,627) |
Income from operations | 68,927 | 78,043 | 141,790 | 161,292 |
Operating Segments | Outpatient Rehabilitation | ||||
Segment information | ||||
Adjusted EBITDA | 38,132 | 28,722 | 67,011 | 50,855 |
Depreciation and amortization | (6,202) | (3,177) | (10,238) | (6,317) |
Income from operations | 31,930 | 25,545 | 56,773 | 44,538 |
Operating Segments | Concentra | ||||
Segment information | ||||
Adjusted EBITDA | 43,039 | 11,199 | 77,192 | 11,199 |
Depreciation and amortization | (14,916) | (4,194) | (30,292) | (4,194) |
Stock compensation expense | (192) | (384) | ||
Income from operations | 27,931 | 2,290 | 46,516 | 2,290 |
Operating Segments | Concentra | Concentra Inc | ||||
Segment information | ||||
Acquisition costs | 4,715 | 4,715 | ||
Other | ||||
Segment information | ||||
Adjusted EBITDA | (22,453) | (16,471) | (43,626) | (36,136) |
Depreciation and amortization | (1,275) | (1,073) | (2,487) | (2,058) |
Stock compensation expense | (4,006) | (3,323) | (7,790) | (5,650) |
Income from operations | $ (27,734) | $ (20,867) | (57,139) | $ (43,844) |
Other | Physiotherapy | ||||
Segment information | ||||
Acquisition costs | $ 3,236 |
Income per Common Share (Detail
Income per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Numerator: | ||||
Net income attributable to Select Medical Holdings Corporation | $ 33,935 | $ 36,940 | $ 88,768 | $ 72,003 |
Less: Earnings allocated to unvested restricted stockholders | 972 | 1,011 | 2,552 | 1,984 |
Net income available to common stockholders | $ 32,963 | $ 35,929 | $ 86,216 | $ 70,019 |
Denominator: | ||||
Weighted average shares - basic | 127,626 | 127,674 | 127,563 | 127,620 |
Effect of dilutive securities: Stock options (in shares) | 194 | 335 | 146 | 324 |
Weighted average shares - diluted | 127,820 | 128,009 | 127,709 | 127,944 |
Income per common share | ||||
Basic income per common share (in dollars per share) | $ 0.26 | $ 0.28 | $ 0.68 | $ 0.55 |
Diluted income per common share (in dollars per share) | $ 0.26 | $ 0.28 | $ 0.68 | $ 0.55 |
Commitments and Contingencies -
Commitments and Contingencies - Litigation (Details) $ in Millions | Oct. 19, 2015item | Jul. 13, 2015item | Jun. 30, 2016USD ($) |
Select, SSH-Knoxville, and SSH-North Knoxville | |||
Commitments and Contingencies | |||
Number of current or former employees named as defendants | item | 10 | ||
Professional liability claims | |||
Commitments and Contingencies | |||
Self insurance retention per occurrence | $ | $ 2 | ||
General liability claims | |||
Commitments and Contingencies | |||
Self insurance retention per occurrence | $ | $ 2 | ||
Amended complaint | SSH-Evansville | |||
Commitments and Contingencies | |||
Number of case managers identified as plaintiff | item | 2 |
Commitments and Contingencies42
Commitments and Contingencies - Construction Commitments (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Construction Commitments | |
Construction Commitments | |
Construction contract commitments | $ 9.4 |
Financial Information for Sub43
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes (Details) | Jun. 30, 2016 | Dec. 31, 2015 |
6.375% senior notes | Select | ||
Financial information for subsidiary guarantors and non-guarantor subsidiaries under select's 6.375% senior notes | ||
Interest rate of debt (as a percent) | 6.375% | 6.375% |
Financial Information for Sub44
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Current Assets: | ||||
Cash and cash equivalents | $ 78,420 | $ 14,435 | $ 25,191 | $ 3,354 |
Accounts receivable, net | 613,790 | 603,558 | ||
Current deferred tax asset | 43,955 | 28,688 | ||
Prepaid income taxes | 16,694 | |||
Other current assets | 88,862 | 85,779 | ||
Total Current Assets | 825,027 | 749,154 | ||
Property and equipment, net | 889,171 | 864,124 | ||
Goodwill | 2,638,286 | 2,314,624 | ||
Other identifiable intangibles, net | 343,928 | 318,675 | ||
Other assets | 141,937 | 142,101 | ||
Total Assets | 4,838,349 | 4,388,678 | 4,341,335 | |
Current Liabilities: | ||||
Bank overdrafts | 26,477 | 28,615 | ||
Current portion of long-term debt and notes payable | 10,511 | 225,166 | ||
Accounts payable | 118,420 | 137,409 | ||
Accrued payroll | 135,552 | 120,989 | ||
Accrued vacation | 81,074 | 73,977 | ||
Accrued interest | 16,927 | 9,401 | ||
Accrued other | 134,085 | 133,728 | ||
Income taxes payable | 12,314 | |||
Total Current Liabilities | 535,360 | 729,285 | ||
Long-term debt, net of current portion | 2,707,311 | 2,160,730 | ||
Non-current deferred tax liability | 201,538 | 218,705 | ||
Other non-current liabilities | 131,699 | 133,220 | ||
Total Liabilities | 3,575,908 | 3,241,940 | ||
Redeemable non-controlling interests | 245,784 | 238,221 | ||
Stockholder's Equity: | ||||
Common stock | 131 | 131 | ||
Capital in excess of par | 432,951 | 424,506 | ||
Retained earnings (accumulated deficit) | 522,995 | 434,616 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 956,077 | 859,253 | ||
Non-controlling interest | 60,580 | 49,264 | ||
Total Equity | 1,016,657 | 908,517 | ||
Total Liabilities and Equity | 4,838,349 | 4,388,678 | ||
Select | ||||
Current Assets: | ||||
Cash and cash equivalents | 78,420 | 14,435 | 25,191 | 3,354 |
Accounts receivable, net | 613,790 | 603,558 | ||
Current deferred tax asset | 43,955 | 28,688 | ||
Prepaid income taxes | 16,694 | |||
Other current assets | 88,862 | 85,779 | ||
Total Current Assets | 825,027 | 749,154 | ||
Property and equipment, net | 889,171 | 864,124 | ||
Goodwill | 2,638,286 | 2,314,624 | ||
Other identifiable intangibles, net | 343,928 | 318,675 | ||
Other assets | 141,937 | 142,101 | ||
Total Assets | 4,838,349 | 4,388,678 | ||
Current Liabilities: | ||||
Bank overdrafts | 26,477 | 28,615 | ||
Current portion of long-term debt and notes payable | 10,511 | 225,166 | ||
Accounts payable | 118,420 | 137,409 | ||
Accrued payroll | 135,552 | 120,989 | ||
Accrued vacation | 81,074 | 73,977 | ||
Accrued interest | 16,927 | 9,401 | ||
Accrued other | 134,085 | 133,728 | ||
Income taxes payable | 12,314 | |||
Total Current Liabilities | 535,360 | 729,285 | ||
Long-term debt, net of current portion | 2,707,311 | 2,160,730 | ||
Non-current deferred tax liability | 201,538 | 218,705 | ||
Other non-current liabilities | 131,699 | 133,220 | ||
Total Liabilities | 3,575,908 | 3,241,940 | ||
Redeemable non-controlling interests | 245,784 | 238,221 | ||
Stockholder's Equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par | 913,058 | 904,375 | ||
Retained earnings (accumulated deficit) | 43,019 | (45,122) | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 956,077 | 859,253 | ||
Non-controlling interest | 60,580 | 49,264 | ||
Total Equity | 1,016,657 | 908,517 | ||
Total Liabilities and Equity | 4,838,349 | 4,388,678 | ||
Select | Reportable legal entities | Select (Parent Company Only) | ||||
Current Assets: | ||||
Cash and cash equivalents | 4,071 | 4,070 | 3,071 | 70 |
Current deferred tax asset | 9,106 | 11,556 | ||
Prepaid income taxes | 7,979 | |||
Other current assets | 13,459 | 10,521 | ||
Total Current Assets | 26,636 | 34,126 | ||
Property and equipment, net | 44,793 | 38,872 | ||
Investment in affiliates | 4,547,761 | 4,111,682 | ||
Non-current deferred tax asset | 15,175 | 12,297 | ||
Other assets | 8,110 | 3,842 | ||
Total Assets | 4,642,475 | 4,200,819 | ||
Current Liabilities: | ||||
Bank overdrafts | 26,477 | 28,615 | ||
Current portion of long-term debt and notes payable | 6,112 | 221,769 | ||
Accounts payable | 8,204 | 10,445 | ||
Intercompany payables | 2,065,057 | 1,974,229 | ||
Accrued payroll | 8,569 | 22,970 | ||
Accrued vacation | 3,352 | 6,406 | ||
Accrued interest | 13,933 | 6,315 | ||
Accrued other | 39,267 | 38,883 | ||
Income taxes payable | 1,040 | |||
Total Current Liabilities | 2,172,011 | 2,309,632 | ||
Long-term debt, net of current portion | 1,467,920 | 984,744 | ||
Other non-current liabilities | 46,467 | 47,190 | ||
Total Liabilities | 3,686,398 | 3,341,566 | ||
Stockholder's Equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par | 913,058 | 904,375 | ||
Retained earnings (accumulated deficit) | 43,019 | (45,122) | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 956,077 | 859,253 | ||
Total Equity | 956,077 | 859,253 | ||
Total Liabilities and Equity | 4,642,475 | 4,200,819 | ||
Select | Reportable legal entities | Subsidiary Guarantors | ||||
Current Assets: | ||||
Cash and cash equivalents | 8,111 | 3,706 | 2,942 | 2,454 |
Accounts receivable, net | 420,863 | 419,554 | ||
Current deferred tax asset | 21,379 | 6,733 | ||
Intercompany receivables | 2,065,057 | 1,974,229 | ||
Other current assets | 41,891 | 34,887 | ||
Total Current Assets | 2,557,301 | 2,439,109 | ||
Property and equipment, net | 582,067 | 548,820 | ||
Investment in affiliates | 66,319 | 66,015 | ||
Goodwill | 1,979,267 | 1,663,974 | ||
Other identifiable intangibles, net | 105,280 | 72,776 | ||
Other assets | 112,864 | 108,524 | ||
Total Assets | 5,403,098 | 4,899,218 | ||
Current Liabilities: | ||||
Current portion of long-term debt and notes payable | 508 | 197 | ||
Accounts payable | 79,941 | 101,156 | ||
Intercompany payables | 162,585 | 127,373 | ||
Accrued payroll | 79,177 | 66,908 | ||
Accrued vacation | 49,989 | 50,254 | ||
Accrued interest | 2 | 3 | ||
Accrued other | 55,732 | 42,939 | ||
Total Current Liabilities | 427,934 | 388,830 | ||
Long-term debt, net of current portion | 491,355 | 452,417 | ||
Non-current deferred tax liability | 106,571 | 114,394 | ||
Other non-current liabilities | 49,000 | 41,904 | ||
Total Liabilities | 1,074,860 | 997,545 | ||
Redeemable non-controlling interests | 870 | |||
Stockholder's Equity: | ||||
Retained earnings (accumulated deficit) | 1,250,956 | 1,189,688 | ||
Subsidiary investment | 3,077,282 | 2,711,115 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 4,328,238 | 3,900,803 | ||
Total Equity | 4,328,238 | 3,900,803 | ||
Total Liabilities and Equity | 5,403,098 | 4,899,218 | ||
Select | Reportable legal entities | Non-Guarantor Subsidiaries | ||||
Current Assets: | ||||
Cash and cash equivalents | 5,374 | 625 | 390 | $ 830 |
Accounts receivable, net | 74,638 | 68,332 | ||
Current deferred tax asset | 4,432 | 4,761 | ||
Intercompany receivables | 162,585 | 127,373 | ||
Other current assets | 6,691 | 5,731 | ||
Total Current Assets | 253,720 | 206,822 | ||
Property and equipment, net | 61,493 | 61,126 | ||
Other assets | 1,167 | 659 | ||
Total Assets | 316,380 | 268,607 | ||
Current Liabilities: | ||||
Current portion of long-term debt and notes payable | 158 | 939 | ||
Accounts payable | 13,815 | 16,997 | ||
Accrued payroll | 8,358 | 3,916 | ||
Accrued vacation | 15,191 | 9,363 | ||
Accrued interest | 7 | |||
Accrued other | 9,109 | 9,866 | ||
Total Current Liabilities | 46,638 | 41,081 | ||
Long-term debt, net of current portion | 120,914 | 90,860 | ||
Non-current deferred tax liability | 8,969 | 9,239 | ||
Other non-current liabilities | 4,391 | 4,798 | ||
Total Liabilities | 180,912 | 145,978 | ||
Redeemable non-controlling interests | 11,328 | 11,224 | ||
Stockholder's Equity: | ||||
Retained earnings (accumulated deficit) | (16,937) | (8,932) | ||
Subsidiary investment | 84,009 | 74,011 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 67,072 | 65,079 | ||
Non-controlling interest | 57,068 | 46,326 | ||
Total Equity | 124,140 | 111,405 | ||
Total Liabilities and Equity | 316,380 | 268,607 | ||
Select | Reportable legal entities | Non-Guarantor Concentra | ||||
Current Assets: | ||||
Cash and cash equivalents | 60,864 | 6,034 | $ 18,788 | |
Accounts receivable, net | 118,289 | 115,672 | ||
Current deferred tax asset | 9,038 | 5,638 | ||
Prepaid income taxes | 8,715 | |||
Other current assets | 26,821 | 34,640 | ||
Total Current Assets | 215,012 | 170,699 | ||
Property and equipment, net | 200,818 | 215,306 | ||
Goodwill | 659,019 | 650,650 | ||
Other identifiable intangibles, net | 238,648 | 245,899 | ||
Other assets | 19,796 | 29,076 | ||
Total Assets | 1,333,293 | 1,311,630 | ||
Current Liabilities: | ||||
Current portion of long-term debt and notes payable | 3,733 | 2,261 | ||
Accounts payable | 16,460 | 8,811 | ||
Accrued payroll | 39,448 | 27,195 | ||
Accrued vacation | 12,542 | 7,954 | ||
Accrued interest | 2,985 | 3,083 | ||
Accrued other | 29,977 | 42,040 | ||
Income taxes payable | 11,274 | |||
Total Current Liabilities | 116,419 | 91,344 | ||
Long-term debt, net of current portion | 627,122 | 632,709 | ||
Non-current deferred tax liability | 101,173 | 107,369 | ||
Other non-current liabilities | 31,841 | 39,328 | ||
Total Liabilities | 876,555 | 870,750 | ||
Redeemable non-controlling interests | 234,456 | 226,127 | ||
Stockholder's Equity: | ||||
Retained earnings (accumulated deficit) | 835 | (6,120) | ||
Subsidiary investment | 217,935 | 217,935 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 218,770 | 211,815 | ||
Non-controlling interest | 3,512 | 2,938 | ||
Total Equity | 222,282 | 214,753 | ||
Total Liabilities and Equity | 1,333,293 | 1,311,630 | ||
Select | Eliminations | ||||
Current Assets: | ||||
Intercompany receivables | (2,227,642) | (2,101,602) | ||
Total Current Assets | (2,227,642) | (2,101,602) | ||
Investment in affiliates | (4,614,080) | (4,177,697) | ||
Non-current deferred tax asset | (15,175) | (12,297) | ||
Total Assets | (6,856,897) | (6,291,596) | ||
Current Liabilities: | ||||
Intercompany payables | (2,227,642) | (2,101,602) | ||
Total Current Liabilities | (2,227,642) | (2,101,602) | ||
Non-current deferred tax liability | (15,175) | (12,297) | ||
Total Liabilities | (2,242,817) | (2,113,899) | ||
Stockholder's Equity: | ||||
Retained earnings (accumulated deficit) | (1,234,854) | (1,174,636) | ||
Subsidiary investment | (3,379,226) | (3,003,061) | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | (4,614,080) | (4,177,697) | ||
Total Equity | (4,614,080) | (4,177,697) | ||
Total Liabilities and Equity | $ (6,856,897) | $ (6,291,596) |
Financial Information for Sub45
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes - Condensed Consolidating Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Condensed Consolidating Statement of Operations | ||||
Net operating revenues | $ 1,097,631 | $ 887,065 | $ 2,185,961 | $ 1,682,408 |
Costs and expenses: | ||||
Cost of services | 916,985 | 743,879 | 1,839,247 | 1,408,264 |
General and administrative | 25,870 | 24,041 | 54,138 | 45,716 |
Bad debt expense | 17,517 | 12,286 | 33,914 | 24,956 |
Depreciation and amortization | 36,205 | 21,848 | 70,722 | 39,196 |
Total costs and expenses | 996,577 | 802,054 | 1,998,021 | 1,518,132 |
Income from operations | 101,054 | 85,011 | 187,940 | 164,276 |
Other income and expense: | ||||
Equity in earnings of unconsolidated subsidiaries | 4,546 | 3,848 | 9,198 | 6,440 |
Non-operating gain (loss) | 13,035 | 38,122 | ||
Loss on early retirement of debt | (773) | |||
Interest expense | (44,332) | (25,288) | (83,180) | (46,676) |
Income before income taxes | 74,303 | 63,571 | 151,307 | 124,040 |
Income tax expense (benefit) | 33,450 | 23,517 | 50,510 | 46,701 |
Net income | 40,853 | 40,054 | 100,797 | 77,339 |
Less: Net income attributable to non-controlling interests | 6,918 | 3,114 | 12,029 | 5,336 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 33,935 | 36,940 | 88,768 | 72,003 |
Select | ||||
Condensed Consolidating Statement of Operations | ||||
Net operating revenues | 1,097,631 | 887,065 | 2,185,961 | 1,682,408 |
Costs and expenses: | ||||
Cost of services | 916,985 | 743,879 | 1,839,247 | 1,408,264 |
General and administrative | 25,870 | 24,041 | 54,138 | 45,716 |
Bad debt expense | 17,517 | 12,286 | 33,914 | 24,956 |
Depreciation and amortization | 36,205 | 21,848 | 70,722 | 39,196 |
Total costs and expenses | 996,577 | 802,054 | 1,998,021 | 1,518,132 |
Income from operations | 101,054 | 85,011 | 187,940 | 164,276 |
Other income and expense: | ||||
Equity in earnings of unconsolidated subsidiaries | 4,546 | 3,848 | 9,198 | 6,440 |
Non-operating gain (loss) | 13,035 | 38,122 | ||
Loss on early retirement of debt | (773) | |||
Interest expense | (44,332) | (25,288) | (83,180) | (46,676) |
Income before income taxes | 74,303 | 63,571 | 151,307 | 124,040 |
Income tax expense (benefit) | 33,450 | 23,517 | 50,510 | 46,701 |
Net income | 40,853 | 40,054 | 100,797 | 77,339 |
Less: Net income attributable to non-controlling interests | 6,918 | 3,114 | 12,029 | 5,336 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 33,935 | 36,940 | 88,768 | 72,003 |
Select | Reportable legal entities | Select (Parent Company Only) | ||||
Condensed Consolidating Statement of Operations | ||||
Net operating revenues | 20 | 105 | 437 | 224 |
Costs and expenses: | ||||
Cost of services | 606 | 574 | 950 | 1,010 |
General and administrative | 25,844 | 19,467 | 54,231 | 41,218 |
Depreciation and amortization | 1,276 | 1,073 | 2,487 | 2,058 |
Total costs and expenses | 27,726 | 21,114 | 57,668 | 44,286 |
Income from operations | (27,706) | (21,009) | (57,231) | (44,062) |
Other income and expense: | ||||
Intercompany interest and royalty fees | (1,532) | (311) | (2,590) | (597) |
Intercompany management fees | 38,783 | (2,167) | 94,139 | 39,287 |
Non-operating gain (loss) | 10,463 | 40,895 | ||
Loss on early retirement of debt | (773) | |||
Interest expense | (25,544) | (14,280) | (45,890) | (28,181) |
Income before income taxes | (5,536) | (37,767) | 28,550 | (33,553) |
Income tax expense (benefit) | (473) | (13,338) | 8,139 | (11,936) |
Equity in earnings of subsidiaries | 38,998 | 61,369 | 68,357 | 93,620 |
Net income | 33,935 | 36,940 | 88,768 | 72,003 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 33,935 | 36,940 | 88,768 | 72,003 |
Select | Reportable legal entities | Subsidiary Guarantors | ||||
Condensed Consolidating Statement of Operations | ||||
Net operating revenues | 720,404 | 676,146 | 1,431,918 | 1,350,245 |
Costs and expenses: | ||||
Cost of services | 571,001 | 564,390 | 1,149,011 | 1,125,696 |
General and administrative | 26 | (141) | (93) | (217) |
Bad debt expense | 10,265 | 9,252 | 20,963 | 18,735 |
Depreciation and amortization | 17,184 | 13,908 | 32,381 | 27,682 |
Total costs and expenses | 598,476 | 587,409 | 1,202,262 | 1,171,896 |
Income from operations | 121,928 | 88,737 | 229,656 | 178,349 |
Other income and expense: | ||||
Intercompany interest and royalty fees | (50,979) | 306 | (49,946) | 586 |
Intercompany management fees | (32,280) | 8,418 | (81,804) | (26,866) |
Equity in earnings of unconsolidated subsidiaries | 4,519 | 3,828 | 9,146 | 6,399 |
Non-operating gain (loss) | 2,572 | (2,773) | ||
Interest expense | (6,685) | (6,083) | (13,319) | (12,086) |
Income before income taxes | 39,075 | 95,206 | 90,960 | 146,382 |
Income tax expense (benefit) | 26,370 | 38,574 | 31,985 | 60,620 |
Equity in earnings of subsidiaries | 21,526 | 5,159 | 2,294 | 8,310 |
Net income | 34,231 | 61,791 | 61,269 | 94,072 |
Less: Net income attributable to non-controlling interests | 13 | 31 | ||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 34,231 | 61,778 | 61,269 | 94,041 |
Select | Reportable legal entities | Non-Guarantor Subsidiaries | ||||
Condensed Consolidating Statement of Operations | ||||
Net operating revenues | 122,339 | 123,985 | 247,861 | 245,110 |
Costs and expenses: | ||||
Cost of services | 138,496 | 104,163 | 269,202 | 206,806 |
Bad debt expense | 2,113 | 2,156 | 4,098 | 5,343 |
Depreciation and amortization | 2,829 | 2,673 | 5,562 | 5,262 |
Total costs and expenses | 143,438 | 108,992 | 278,862 | 217,411 |
Income from operations | (21,099) | 14,993 | (31,001) | 27,699 |
Other income and expense: | ||||
Intercompany interest and royalty fees | 52,511 | 5 | 52,536 | 11 |
Intercompany management fees | (6,503) | (6,251) | (12,335) | (12,421) |
Equity in earnings of unconsolidated subsidiaries | 27 | 20 | 52 | 41 |
Interest expense | (1,851) | (1,556) | (3,490) | (3,040) |
Income before income taxes | 23,085 | 7,211 | 5,762 | 12,290 |
Income tax expense (benefit) | 672 | (1,024) | 607 | (1,288) |
Net income | 22,413 | 8,235 | 5,155 | 13,578 |
Less: Net income attributable to non-controlling interests | 842 | 3,077 | 2,728 | 5,281 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 21,571 | 5,158 | 2,427 | 8,297 |
Select | Reportable legal entities | Non-Guarantor Concentra | ||||
Condensed Consolidating Statement of Operations | ||||
Net operating revenues | 254,868 | 86,829 | 505,745 | 86,829 |
Costs and expenses: | ||||
Cost of services | 206,882 | 74,752 | 420,084 | 74,752 |
General and administrative | 4,715 | 4,715 | ||
Bad debt expense | 5,139 | 878 | 8,853 | 878 |
Depreciation and amortization | 14,916 | 4,194 | 30,292 | 4,194 |
Total costs and expenses | 226,937 | 84,539 | 459,229 | 84,539 |
Income from operations | 27,931 | 2,290 | 46,516 | 2,290 |
Other income and expense: | ||||
Interest expense | (10,252) | (3,369) | (20,481) | (3,369) |
Income before income taxes | 17,679 | (1,079) | 26,035 | (1,079) |
Income tax expense (benefit) | 6,881 | (695) | 9,779 | (695) |
Net income | 10,798 | (384) | 16,256 | (384) |
Less: Net income attributable to non-controlling interests | 6,076 | 24 | 9,301 | 24 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 4,722 | (408) | 6,955 | (408) |
Select | Eliminations | ||||
Other income and expense: | ||||
Equity in earnings of subsidiaries | (60,524) | (66,528) | (70,651) | (101,930) |
Net income | (60,524) | (66,528) | (70,651) | (101,930) |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | $ (60,524) | $ (66,528) | $ (70,651) | $ (101,930) |
Financial Information for Sub46
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Operating activities | ||||
Net income (loss) | $ 40,853 | $ 40,054 | $ 100,797 | $ 77,339 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Distributions from unconsolidated subsidiaries | 12,039 | 52 | ||
Depreciation and amortization | 36,205 | 21,848 | 70,722 | 39,196 |
Amortization of leasehold interests | 295 | |||
Provision for bad debts | 17,517 | 12,286 | 33,914 | 24,956 |
Equity in earnings of unconsolidated subsidiaries | (4,546) | (3,848) | (9,198) | (6,440) |
Loss on early retirement of debt | 773 | |||
Loss on disposal of assets | 55 | 251 | ||
Gain on sale of assets and business | (43,461) | |||
Impairment of equity investment | 5,339 | |||
Stock compensation expense | 8,174 | 5,794 | ||
Amortization of debt discount, premium and issuance costs | 7,077 | 4,027 | ||
Deferred income taxes | (13,286) | (4,428) | ||
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | ||||
Accounts receivable | (44,096) | (89,265) | ||
Other current assets | 11,011 | (8,038) | ||
Other assets | 4,213 | 3,568 | ||
Accounts payable | (15,852) | 8,925 | ||
Accrued expenses | 20,632 | 707 | ||
Income taxes | 28,821 | 18,416 | ||
Net cash provided by operating activities | 177,969 | 75,060 | ||
Investing activities | ||||
Purchases of property and equipment | (33,490) | (41,064) | (80,258) | (68,912) |
Proceeds from sale of assets and business | 71,366 | |||
Investment in businesses | (1,590) | (855) | ||
Acquisition of businesses, net of cash acquired | (421,519) | (1,047,997) | ||
Net cash used in investing activities | (432,001) | (1,117,764) | ||
Financing activities | ||||
Borrowings on revolving facilities | 320,000 | 660,000 | ||
Payments on revolving facilities | (380,000) | (400,000) | ||
Net proceeds from Select term loans | 600,127 | |||
Net proceeds from Concentra term loans | 623,575 | |||
Payments on term loans | (229,649) | (26,884) | ||
Borrowings of other debt | 22,082 | 9,590 | ||
Principle payments on other debt | (9,926) | (8,320) | ||
Proceeds from issuance of non-controlling interests | 3,103 | 217,065 | ||
Proceeds from (repayments of) bank overdrafts | (2,138) | 5,590 | ||
Tax benefit from stock based awards | 269 | 11 | ||
Purchase of non-controlling interests | (1,294) | |||
Distributions to non-controlling interests | (4,708) | (4,282) | ||
Net cash provided by financing activities | 318,017 | 1,064,541 | ||
Net increase in cash and cash equivalents | 63,985 | 21,837 | ||
Cash and cash equivalents at beginning of period | 14,435 | 3,354 | ||
Cash and cash equivalents at end of period | 78,420 | 25,191 | 78,420 | 25,191 |
Select | ||||
Operating activities | ||||
Net income (loss) | 40,853 | 40,054 | 100,797 | 77,339 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Distributions from unconsolidated subsidiaries | 12,039 | 52 | ||
Depreciation and amortization | 36,205 | 21,848 | 70,722 | 39,196 |
Amortization of leasehold interests | 295 | |||
Provision for bad debts | 17,517 | 12,286 | 33,914 | 24,956 |
Equity in earnings of unconsolidated subsidiaries | (4,546) | (3,848) | (9,198) | (6,440) |
Loss on early retirement of debt | 773 | |||
Loss on disposal of assets | 55 | 251 | ||
Gain on sale of assets and business | (43,461) | |||
Impairment of equity investment | 5,339 | |||
Stock compensation expense | 8,174 | 5,794 | ||
Amortization of debt discount, premium and issuance costs | 7,077 | 4,027 | ||
Deferred income taxes | (13,286) | (4,428) | ||
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | ||||
Accounts receivable | (44,096) | (89,265) | ||
Other current assets | 11,011 | (8,038) | ||
Other assets | 4,213 | 3,568 | ||
Accounts payable | (15,852) | 8,925 | ||
Accrued expenses | 20,632 | 707 | ||
Income taxes | 28,821 | 18,416 | ||
Net cash provided by operating activities | 177,969 | 75,060 | ||
Investing activities | ||||
Purchases of property and equipment | (80,258) | (68,912) | ||
Proceeds from sale of assets and business | 71,366 | |||
Investment in businesses | (1,590) | (855) | ||
Acquisition of businesses, net of cash acquired | (421,519) | (1,047,997) | ||
Net cash used in investing activities | (432,001) | (1,117,764) | ||
Financing activities | ||||
Borrowings on revolving facilities | 320,000 | 660,000 | ||
Payments on revolving facilities | (380,000) | (400,000) | ||
Net proceeds from Select term loans | 600,127 | |||
Net proceeds from Concentra term loans | 623,575 | |||
Payments on term loans | (229,649) | (26,884) | ||
Borrowings of other debt | 22,082 | 9,590 | ||
Principle payments on other debt | (9,926) | (8,320) | ||
Dividends paid to Holdings | (506) | (13,129) | ||
Equity investment by Holdings | 657 | 1,325 | ||
Proceeds from issuance of non-controlling interests | 3,103 | 217,065 | ||
Proceeds from (repayments of) bank overdrafts | (2,138) | 5,590 | ||
Tax benefit from stock based awards | 269 | 11 | ||
Purchase of non-controlling interests | (1,294) | |||
Distributions to non-controlling interests | (4,708) | (4,282) | ||
Net cash provided by financing activities | 318,017 | 1,064,541 | ||
Net increase in cash and cash equivalents | 63,985 | 21,837 | ||
Cash and cash equivalents at beginning of period | 14,435 | 3,354 | ||
Cash and cash equivalents at end of period | 78,420 | 25,191 | 78,420 | 25,191 |
Select | Reportable legal entities | Select (Parent Company Only) | ||||
Operating activities | ||||
Net income (loss) | 33,935 | 36,940 | 88,768 | 72,003 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 1,276 | 1,073 | 2,487 | 2,058 |
Loss on early retirement of debt | 773 | |||
Gain on sale of assets and business | (40,895) | |||
Stock compensation expense | 7,790 | 5,794 | ||
Amortization of debt discount, premium and issuance costs | 5,371 | 3,717 | ||
Deferred income taxes | 997 | (4,428) | ||
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | ||||
Equity in earnings of subsidiaries | (38,998) | (61,369) | (68,357) | (93,620) |
Other current assets | (2,938) | (4,916) | ||
Other assets | (4,268) | 3,453 | ||
Accounts payable | (2,241) | (846) | ||
Accrued expenses | (10,175) | (4,099) | ||
Income taxes | 8,832 | 19,111 | ||
Net cash provided by operating activities | (13,856) | (1,773) | ||
Investing activities | ||||
Purchases of property and equipment | (8,545) | (4,525) | ||
Proceeds from sale of assets and business | 63,418 | |||
Acquisition of businesses, net of cash acquired | (408,654) | |||
Net cash used in investing activities | (353,781) | (4,525) | ||
Financing activities | ||||
Borrowings on revolving facilities | 320,000 | 650,000 | ||
Payments on revolving facilities | (375,000) | (390,000) | ||
Net proceeds from Select term loans | 600,127 | |||
Payments on term loans | (227,399) | (26,884) | ||
Borrowings of other debt | 9,765 | 6,486 | ||
Principle payments on other debt | (7,278) | (6,591) | ||
Dividends paid to Holdings | (506) | (13,129) | ||
Equity investment by Holdings | 657 | 1,325 | ||
Proceeds from (repayments of) bank overdrafts | (2,138) | 5,590 | ||
Tax benefit from stock based awards | 269 | 11 | ||
Intercompany | 49,141 | (217,509) | ||
Net cash provided by financing activities | 367,638 | 9,299 | ||
Net increase in cash and cash equivalents | 1 | 3,001 | ||
Cash and cash equivalents at beginning of period | 4,070 | 70 | ||
Cash and cash equivalents at end of period | 4,071 | 3,071 | 4,071 | 3,071 |
Select | Reportable legal entities | Subsidiary Guarantors | ||||
Operating activities | ||||
Net income (loss) | 34,231 | 61,791 | 61,269 | 94,072 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Distributions from unconsolidated subsidiaries | 12,000 | |||
Depreciation and amortization | 17,184 | 13,908 | 32,381 | 27,682 |
Amortization of leasehold interests | 34 | |||
Provision for bad debts | 10,265 | 9,252 | 20,963 | 18,735 |
Equity in earnings of unconsolidated subsidiaries | (4,519) | (3,828) | (9,146) | (6,399) |
Loss on disposal of assets | 37 | 251 | ||
Gain on sale of assets and business | (2,566) | |||
Impairment of equity investment | 5,339 | |||
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | ||||
Equity in earnings of subsidiaries | (21,526) | (5,159) | (2,294) | (8,310) |
Accounts receivable | (22,202) | (73,409) | ||
Other current assets | 7,029 | 1,416 | ||
Other assets | (291) | (96) | ||
Accounts payable | (17,885) | 7,731 | ||
Accrued expenses | 24,534 | 2,899 | ||
Net cash provided by operating activities | 109,202 | 64,572 | ||
Investing activities | ||||
Purchases of property and equipment | (41,851) | (56,763) | ||
Proceeds from sale of assets and business | 7,942 | |||
Investment in businesses | (1,590) | (855) | ||
Acquisition of businesses, net of cash acquired | (605) | |||
Net cash used in investing activities | (36,104) | (57,618) | ||
Financing activities | ||||
Principle payments on other debt | (385) | (1,296) | ||
Intercompany | (67,014) | (5,170) | ||
Purchase of non-controlling interests | (1,294) | |||
Net cash provided by financing activities | (68,693) | (6,466) | ||
Net increase in cash and cash equivalents | 4,405 | 488 | ||
Cash and cash equivalents at beginning of period | 3,706 | 2,454 | ||
Cash and cash equivalents at end of period | 8,111 | 2,942 | 8,111 | 2,942 |
Select | Reportable legal entities | Non-Guarantor Subsidiaries | ||||
Operating activities | ||||
Net income (loss) | 22,413 | 8,235 | 5,155 | 13,578 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Distributions from unconsolidated subsidiaries | 39 | 52 | ||
Depreciation and amortization | 2,829 | 2,673 | 5,562 | 5,262 |
Provision for bad debts | 2,113 | 2,156 | 4,098 | 5,343 |
Equity in earnings of unconsolidated subsidiaries | (27) | (20) | (52) | (41) |
Loss on disposal of assets | 12 | |||
Amortization of debt discount, premium and issuance costs | 2 | |||
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | ||||
Accounts receivable | (10,405) | (19,744) | ||
Other current assets | (960) | 1,481 | ||
Other assets | (508) | 211 | ||
Accounts payable | (3,181) | (2,198) | ||
Accrued expenses | 9,113 | 1,907 | ||
Net cash provided by operating activities | 8,875 | 5,851 | ||
Investing activities | ||||
Purchases of property and equipment | (21,935) | (3,770) | ||
Proceeds from sale of assets and business | 6 | |||
Acquisition of businesses, net of cash acquired | (8,395) | (2,686) | ||
Net cash used in investing activities | (30,324) | (6,456) | ||
Financing activities | ||||
Borrowings of other debt | 9,500 | 96 | ||
Principle payments on other debt | (876) | (393) | ||
Proceeds from issuance of non-controlling interests | 3,103 | |||
Intercompany | 17,873 | 4,744 | ||
Distributions to non-controlling interests | (3,402) | (4,282) | ||
Net cash provided by financing activities | 26,198 | 165 | ||
Net increase in cash and cash equivalents | 4,749 | (440) | ||
Cash and cash equivalents at beginning of period | 625 | 830 | ||
Cash and cash equivalents at end of period | 5,374 | 390 | 5,374 | 390 |
Select | Reportable legal entities | Non-Guarantor Concentra | ||||
Operating activities | ||||
Net income (loss) | 10,798 | (384) | 16,256 | (384) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 14,916 | 4,194 | 30,292 | 4,194 |
Amortization of leasehold interests | 261 | |||
Provision for bad debts | 5,139 | 878 | 8,853 | 878 |
Loss on disposal of assets | 6 | |||
Stock compensation expense | 384 | |||
Amortization of debt discount, premium and issuance costs | 1,704 | 310 | ||
Deferred income taxes | (14,283) | |||
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | ||||
Accounts receivable | (11,489) | 3,888 | ||
Other current assets | 7,880 | (6,019) | ||
Other assets | 9,280 | |||
Accounts payable | 7,455 | 4,238 | ||
Accrued expenses | (2,840) | |||
Income taxes | 19,989 | (695) | ||
Net cash provided by operating activities | 73,748 | 6,410 | ||
Investing activities | ||||
Purchases of property and equipment | (7,927) | (3,854) | ||
Acquisition of businesses, net of cash acquired | (3,865) | (1,045,311) | ||
Net cash used in investing activities | (11,792) | (1,049,165) | ||
Financing activities | ||||
Borrowings on revolving facilities | 10,000 | |||
Payments on revolving facilities | (5,000) | (10,000) | ||
Net proceeds from Concentra term loans | 623,575 | |||
Payments on term loans | (2,250) | |||
Borrowings of other debt | 2,817 | 3,008 | ||
Principle payments on other debt | (1,387) | (40) | ||
Proceeds from issuance of non-controlling interests | 217,065 | |||
Intercompany | 217,935 | |||
Distributions to non-controlling interests | (1,306) | |||
Net cash provided by financing activities | (7,126) | 1,061,543 | ||
Net increase in cash and cash equivalents | 54,830 | 18,788 | ||
Cash and cash equivalents at beginning of period | 6,034 | |||
Cash and cash equivalents at end of period | 60,864 | 18,788 | 60,864 | 18,788 |
Select | Eliminations | ||||
Operating activities | ||||
Net income (loss) | (60,524) | (66,528) | (70,651) | (101,930) |
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | ||||
Equity in earnings of subsidiaries | $ 60,524 | $ 66,528 | $ 70,651 | $ 101,930 |