Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 01, 2016 | |
Document Information [Line Items] | ||
Entity Registrant Name | NATIONAL HEALTHCARE CORP | |
Entity Central Index Key | 1,047,335 | |
Trading Symbol | nhc | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 15,149,339 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Interim Condensed Consolidated
Interim Condensed Consolidated Statements of Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
Net patient revenues | $ 218,647,000 | $ 215,351,000 | $ 653,240,000 | $ 641,845,000 |
Other revenues | 12,634,000 | 10,035,000 | 35,397,000 | 30,850,000 |
Net operating revenues | 231,281,000 | 225,386,000 | 688,637,000 | 672,695,000 |
Cost and Expenses: | ||||
Salaries, wages and benefits | 140,403,000 | 135,136,000 | 405,491,000 | 392,766,000 |
Other operating | 58,956,000 | 56,616,000 | 177,571,000 | 173,830,000 |
Facility rent | 10,314,000 | 10,006,000 | 30,960,000 | 29,972,000 |
Depreciation and amortization | 9,998,000 | 9,273,000 | 28,847,000 | 27,442,000 |
Interest | 1,020,000 | 594,000 | 2,913,000 | 1,782,000 |
Total costs and expenses | 220,691,000 | 211,625,000 | 645,782,000 | 625,792,000 |
Income Before Non–Operating Income | 10,590,000 | 13,761,000 | 42,855,000 | 46,903,000 |
Non–Operating Income | 5,091,000 | 4,550,000 | 14,789,000 | 12,902,000 |
Income Before Income Taxes | 15,681,000 | 18,311,000 | 57,644,000 | 59,805,000 |
Income Tax Provision | (4,571,000) | (5,744,000) | (20,969,000) | (21,638,000) |
Net Income | 11,110,000 | 12,567,000 | 36,675,000 | 38,167,000 |
Dividends to Preferred Stockholders | (2,152,000) | (6,487,000) | ||
Net Income Available to Common Stockholders | $ 11,110,000 | $ 10,415,000 | $ 36,675,000 | $ 31,680,000 |
Earnings Per Common Share: | ||||
Basic (in dollars per share) | $ 0.73 | $ 0.75 | $ 2.42 | $ 2.30 |
Diluted (in dollars per share) | $ 0.73 | $ 0.72 | $ 2.41 | $ 2.21 |
Basic (in shares) | 15,198,696 | 13,801,245 | 15,128,728 | 13,778,705 |
Diluted (in shares) | 15,222,648 | 14,422,660 | 15,216,838 | 14,365,251 |
Dividends declared to common stockholders per share (in dollars per share) | $ 0.45 | $ 0.40 | $ 1.30 | $ 1.14 |
Interim Condensed Consolidated3
Interim Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net income | $ 11,110 | $ 12,567 | $ 36,675 | $ 38,167 |
Other Comprehensive Income (Loss): | ||||
Unrealized gains (losses) on investments in marketable securities | 5,458 | (6,724) | 36,085 | (21,809) |
Reclassification adjustment for realized gains on sale of securities | (264) | (28) | (804) | (449) |
Income tax (expense) benefit related to items of other comprehensive income | (2,028) | 2,657 | (13,582) | 8,670 |
Other comprehensive income (loss), net of tax | 3,166 | (4,095) | 21,699 | (13,588) |
Comprehensive Income | $ 14,276 | $ 8,472 | $ 58,374 | $ 24,579 |
Interim Condensed Consolidated4
Interim Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 19,212 | $ 38,208 |
Restricted cash and cash equivalents | 14,996 | 8,793 |
Marketable securities | 147,017 | 116,168 |
Restricted marketable securities | 12,571 | 18,276 |
Accounts receivable, less allowance for doubtful accounts of $8,059 and $5,583, respectively | 76,654 | 84,095 |
Inventories | 7,446 | 7,568 |
Prepaid expenses and other assets | 2,875 | 2,171 |
Notes receivable, current portion | 2,253 | 460 |
Federal income tax receivable | 4,206 | 3,203 |
Total current assets | 287,230 | 278,942 |
Property and Equipment: | ||
Property and equipment, at cost | 921,496 | 875,287 |
Accumulated depreciation and amortization | (363,831) | (339,241) |
Net property and equipment | 557,665 | 536,046 |
Other Assets: | ||
Restricted cash and cash equivalents | 2,162 | 2,313 |
Restricted marketable securities | 166,315 | 151,590 |
Deposits and other assets | 8,170 | 8,451 |
Goodwill | 17,600 | 17,600 |
Notes receivable, less current portion | 12,639 | 12,704 |
Investments in limited liability companies | 36,574 | 37,683 |
Total other assets | 243,460 | 230,341 |
Total assets | 1,088,355 | 1,045,329 |
Current Liabilities: | ||
Trade accounts payable | 17,359 | 20,128 |
Capital lease obligations, current portion | 3,429 | 3,279 |
Accrued payroll | 50,579 | 65,338 |
Amounts due to third party payors | 19,007 | 16,654 |
Accrued risk reserves, current portion | 27,567 | 27,069 |
Other current liabilities | 18,044 | 12,192 |
Dividends payable | 6,817 | 5,996 |
Total current liabilities | 142,802 | 150,656 |
Long–term debt | 120,000 | 120,000 |
Long-term capital lease obligations, capital leases | 27,638 | 30,228 |
Accrued risk reserves, less current portion | 70,042 | 71,439 |
Refundable entrance fees | 9,669 | 9,865 |
Obligation to provide future services | 3,440 | 3,440 |
Deferred income taxes | 23,587 | 9,096 |
Other noncurrent liabilities | 16,210 | 16,294 |
Deferred revenue | 4,152 | 3,315 |
Stockholders’ Equity: | ||
Common stock, $.01 par value; 30,000,000 shares authorized; 15,149,239 and 15,000,616 shares, respectively, issued and outstanding | 152 | 150 |
Capital in excess of par value | 210,710 | 209,469 |
Retained earnings | 384,890 | 368,013 |
Accumulated other comprehensive income | 75,063 | 53,364 |
Total stockholders’ equity | 670,815 | 630,996 |
Total liabilities and stockholders’ equity | $ 1,088,355 | $ 1,045,329 |
Interim Condensed Consolidated5
Interim Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Allowance for doubtful accounts | $ 8,059 | $ 5,583 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 15,149,239 | 15,000,616 |
Common stock, shares outstanding (in shares) | 15,149,239 | 15,000,616 |
Interim Condensed Consolidated6
Interim Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash Flows From Operating Activities: | ||
Net income | $ 36,675 | $ 38,167 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 28,847 | 27,442 |
Provision for doubtful accounts receivable | 5,774 | 5,474 |
Equity in earnings of unconsolidated investments | (4,926) | (3,924) |
Distributions from unconsolidated investments | 7,163 | 6,488 |
Gains on sale of restricted marketable securities | (804) | (449) |
Deferred income taxes | 909 | (4,795) |
Stock–based compensation | 502 | 1,557 |
Changes in operating assets and liabilities, net of the effect of acquisitions: | ||
Restricted Cash and Cash Equivalents | (15,507) | (8,897) |
Accounts receivable | 1,667 | (8,485) |
Income tax receivable | (1,003) | 4,114 |
Inventories | 122 | (439) |
Prepaid expenses and other assets | (704) | (228) |
Trade accounts payable | (2,769) | 230 |
Accrued payroll | (14,759) | (575) |
Amounts due to third party payors | 2,353 | 3,480 |
Other current liabilities and accrued risk reserves | 4,981 | 2,674 |
Other noncurrent liabilities | (84) | 726 |
Deferred revenue | 837 | 770 |
Net cash provided by operating activities | 49,274 | 63,330 |
Cash Flows From Investing Activities: | ||
Additions to property and equipment | (50,466) | (38,953) |
Investments in unconsolidated limited liability companies | (1,282) | (373) |
Investments in notes receivable | (2,419) | (5,477) |
Collections of notes receivable | 845 | 333 |
Change in restricted cash and cash equivalents | 9,455 | 7,423 |
Purchase of restricted marketable securities | (34,747) | (49,993) |
Sale of restricted marketable securities | 30,963 | 39,601 |
Net cash used in investing activities | (47,651) | (47,439) |
Cash Flows From Financing Activities: | ||
Tax (expense) benefit from stock–based compensation | (1,134) | 585 |
Principal payments under capital lease obligations | (2,440) | (2,299) |
Dividends paid to preferred stockholders | (6,502) | |
Dividends paid to common stockholders | (18,977) | (15,367) |
Issuance of common shares | 10,070 | 8,231 |
Repurchase of common shares | (8,195) | |
Entrance fee deposits | (196) | (11) |
Change in deposits | 253 | 486 |
Net cash used in financing activities | (20,619) | (14,877) |
Net (Decrease) Increase in Cash and Cash Equivalents | (18,996) | 1,014 |
Cash and Cash Equivalents, Beginning of Period | 38,208 | 69,767 |
Cash and Cash Equivalents, End of Period | $ 19,212 | $ 70,781 |
Interim Condensed Consolidated7
Interim Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balance, shares (in shares) at Dec. 31, 2014 | 10,836,659 | 14,110,859 | ||||
Balance at Dec. 31, 2014 | $ 170,494 | $ 140 | $ 154,965 | $ 343,941 | $ 64,608 | $ 734,148 |
Net income | 38,167 | 38,167 | ||||
Other comprehensive loss | (13,588) | (13,588) | ||||
Stock–based compensation | 1,557 | 1,557 | ||||
Tax benefit (expense) from exercise of stock options | 585 | 585 | ||||
Shares sold – options exercised, shares (in shares) | 176,184 | |||||
Shares sold – options exercised | $ 3 | 8,228 | 8,231 | |||
Shares issued in conversion of preferred stock to common stock (in shares) | (74,967) | 18,142 | ||||
Shares issued in conversion of preferred stock to common stock | $ (1,189) | 1,189 | ||||
Dividends declared to preferred stockholders ($0.60 per share) | (6,487) | (6,487) | ||||
Dividends declared to common stockholders ($1.14 per share) | (16,256) | (16,256) | ||||
Balance, shares (in shares) at Sep. 30, 2015 | 10,761,692 | 14,305,185 | ||||
Balance at Sep. 30, 2015 | $ 169,305 | $ 143 | 166,524 | 359,365 | 51,020 | 746,357 |
Other comprehensive income (loss) | (13,588) | (13,588) | ||||
Balance, shares (in shares) at Dec. 31, 2014 | 10,836,659 | 14,110,859 | ||||
Balance at Dec. 31, 2014 | $ 170,494 | $ 140 | 154,965 | 343,941 | 64,608 | $ 734,148 |
Shares sold – options exercised, shares (in shares) | 389,498 | |||||
Balance, shares (in shares) at Dec. 31, 2015 | 15,000,616 | |||||
Balance at Dec. 31, 2015 | $ 150 | 209,469 | 368,013 | 53,364 | $ 630,996 | |
Net income | 36,675 | 36,675 | ||||
Other comprehensive loss | 21,699 | 21,699 | ||||
Stock–based compensation | 502 | 502 | ||||
Tax benefit (expense) from exercise of stock options | (1,134) | $ (1,134) | ||||
Shares sold – options exercised, shares (in shares) | 278,623 | 480,275 | ||||
Shares sold – options exercised | $ 3 | 10,067 | $ 10,070 | |||
Dividends declared to preferred stockholders ($0.60 per share) | ||||||
Dividends declared to common stockholders ($1.14 per share) | (19,798) | (19,798) | ||||
Balance, shares (in shares) at Sep. 30, 2016 | 15,149,239 | |||||
Balance at Sep. 30, 2016 | $ 152 | 210,710 | $ 384,890 | 75,063 | 670,815 | |
Other comprehensive income (loss) | $ 21,699 | 21,699 | ||||
Stock Repurchased and Retired During Period, Shares | (130,000) | |||||
Stock Repurchased and Retired During Period, Value | $ (1) | $ (8,194) | $ (8,195) |
Interim Condensed Consolidated8
Interim Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Preferred Stock [Member] | ||
Dividends declared to preferred stockholders per share (in dollars per share) | $ 0.60 | |
Common Stock [Member] | ||
Dividends declared to common stockholders per share (in dollars per share) | $ 1.30 | 1.14 |
Dividends declared to common stockholders per share (in dollars per share) | $ 1.30 | $ 1.14 |
Note 1 - Description of Busines
Note 1 - Description of Business | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 1 – Description of Business National HealthCare Corporation (“NHC” or the “Company”) is a leading provider of senior health care services. As of September 30, 2016, we operate or manage, through certain affiliates, 74 long-term care centers with a total of 9,398 licensed beds, 21 assisted living facilities, five independent living facilities, and 36 homecare programs. We operate specialized care units within certain of our healthcare centers such as Alzheimer's disease care units and sub-acute nursing units. We also have a non-controlling ownership interest in a hospice care business that services NHC owned health care centers and others. In addition, we provide insurance services, management and accounting services, and we lease properties to operators of skilled nursing centers. We operate in 10 states and are located primarily in the southeastern United States. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Significant Accounting Policies [Text Block] | Note 2 – Summary of Significant Accounting Policies The listing below is not intended to be a comprehensive list of all of our significant accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by generally accepted accounting principles, with limited need for management’s judgment in their application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. See our audited December 31, 2015 consolidated financial statements and notes thereto which contain accounting policies and other disclosures required by generally accepted accounting principles. Our audited December 31, 2015 consolidated financial statements are available at our web site: www.nhccare.com Basis of Presentation The unaudited interim condensed consolidated financial statements to which these notes are attached include all normal, recurring adjustments which are necessary to fairly present the financial position, results of operations and cash flows of NHC. All significant intercompany transactions and balances have been eliminated in consolidation. We assume that users of these interim financial statements have read or have access to the audited December 31, 2015 consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations and that the adequacy of additional disclosure needed for a fair presentation, except in regard to material contingencies, may be determined in that context. Accordingly, footnotes and other disclosures which would substantially duplicate the disclosure contained in our most recent annual report to stockholders have been omitted. This interim financial information is not necessarily indicative of the results that may be expected for a full year for a variety of reasons. Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us 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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and could cause our reported net income to vary significantly from period to period. Recently Adopted Accounting Guidance In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-17, “Income Taxes” which requires that deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet. Prior to the issuance of the standard, deferred tax liabilities and assets were required to be separately classified into a current amount and a noncurrent amount in the balance sheet. The new accounting guidance represents a change in accounting principle and the standard is required to be adopted in annual periods beginning after December 15, 2016. Early adoption is permitted and the Company elected to early adopt this guidance as of December 31, 2015. In April 2015, the FASB issued ASU 2015-03, "Imputation of Interest (Sub-Topic 835.30): Simplifying the Presentation of Debt Issuance Costs". ASU 2015-03 requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU 2015-15 clarifying the application of this guidance to line of credit arrangements. The amendments in the ASUs are effective retrospectively for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. This guidance did not have a material impact on our consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02 “Amendments to the Consolidation Analysis”. This update is in response to stakeholders that have expressed concerns that current generally accepted accounting principles (“GAAP”) might require a reporting entity to consolidate another legal entity in situations in which the reporting entity’s contractual rights do not give it the ability to act primarily on its own behalf, the reporting entity does not hold a majority of the legal entity’s voting rights, or the reporting entity is not exposed to a majority of the legal entity’s economic benefits or obligations. Thus, the update modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities. It eliminates the presumption that a general partner should consolidate a limited partnership, for limited partnerships and similar legal entities that qualify as voting interest entities; a limited partner with a controlling financial interest should consolidate a limited partnership. A controlling financial interest may be achieved through holding a limited partner interest that provides substantive kick-out rights. Finally, it requires consideration of the effects of fee arrangements and related parties on the primary beneficiary determination. The amendments in this update are effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. This guidance did not have a material impact on our consolidated financial statements. Recent Accounting Guidance Not Yet Adopted In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 simplifies the accounting for share-based payment award transactions including: income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the requirements of ASU 2016-09 and have not yet determined its impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." The objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods and is to be applied utilizing a modified retrospective approach. We anticipate this standard will have a material impact on our consolidated financial statements. Additionally, we are currently evaluating the impact this standard will have on our policies and procedures and internal control framework. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825)”. ASU No. 2016-01 revises the classification and measurement of investments in certain equity investments and the presentation of certain fair value changes for certain financial liabilities measured at fair value. ASU No. 2016-01 requires the change in fair value of many equity investments to be recognized in net income. ASU No. 2016-01 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. Adopting ASU No. 2016-01 may result in a cumulative effect adjustment to the Company’s retained earnings as of the beginning of the year of adoption. We are currently evaluating the potential effects of adopting the provisions of ASU No. 2016-01. In May 2014, the FASB issued ASU No. 2014-09 “Revenue from Contracts with Customers”. This update is the result of a collaborative effort by the FASB and the International Accounting Standards Board to simplify revenue recognition guidance, remove inconsistencies in the application of revenue recognition, and to improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. The FASB is amending the Accounting Standards Codification and creating a new Topic 606, “Revenue from Contracts with Customers”. The core principle of the 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. For a public entity, the amendments in this update are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the impact of this guidance on our consolidated financial statements and control framework. Revenue Recognition – Third Party Payors Approximately 65% of our net patient revenues are derived from Medicare, Medicaid, and other government programs. Amounts earned under these programs are subject to review by the Medicare and Medicaid intermediaries or their agents. In our opinion, adequate provision has been made for any adjustments that may result from these reviews. Any differences between our original estimates of reimbursements and subsequent revisions are reflected in operations in the period in which the revisions are made often due to final determination or the period of payment no longer being subject to audit or review. We have recorded liabilities of approximately $19,007,000 and $16,654,000 as of September 30, 2016 and December 31, 2015, respectively, for various Medicare and Medicaid current and prior year cost reports and claims reviews. Revenue Recognition – Private P ay For private pay patients in skilled nursing or assisted living facilities, we bill room and board in advance with payment being due in the month the services are performed. Charges for ancillary, pharmacy, therapy and other services to private patients are billed in the month following the performance of services; however, all billings are recognized as revenue when the services are performed. Revenue Recognition – Subordination of Fees and Uncert ain Collections We provide management services to certain senior care facilities and to others we provide accounting and financial services. We generally charge 6% to 7% of net operating revenues for our management services and a predetermined fixed rate per bed for the accounting and financial services. Our policy is to recognize revenues associated with both management services and accounting and financial services on an accrual basis as the services are provided. However, under the terms of our management contracts, payments for our management services are subject to subordination to other expenditures of the long–term care center being managed. Furthermore, for certain of the third parties with whom we have contracted to provide services and which we have determined that collection is not reasonably assured; our policy is to recognize income only in the period in which the amounts are realized. We may receive payment for the unpaid and unrecognized management fees in whole or in part in the future only if cash flows from the operating and investing activities of the centers or proceeds from the sale of the centers are sufficient to pay the fees. There can be no assurance that such future cash flows will occur. The realization of such previously unrecognized revenue could cause our reported net income to vary significantly from period to period. We agree to subordinate our fees to the other expenses of a managed center because we believe we know how to improve the quality of patient services and finances of a senior healthcare center. We believe subordinating our fees demonstrates to the owner and employees of the managed center how confident we are of the impact we can have in making the center operations successful. We may continue to provide services to certain managed centers despite not being fully paid currently so that we may be able to collect unpaid fees in the future from improved operating results and because the incremental savings from discontinuing services to a center may be small compared to the potential benefit. Also, we may benefit from providing other ancillary services to the managed center. Other Operating Expenses Other operating expenses include the costs of care and services that we provide to the residents of our facilities and the costs of maintaining our facilities. Our primary patient care costs include drugs, medical supplies, purchased professional services, food, and professional liability insurance and licensing fees. The primary facility costs include utilities and property insurance. General and Administrative Costs With the Company being a healthcare provider, the majority of our expenses are "cost of revenue" items. Costs that could be classified as "general and administrative" by the Company would include its corporate office costs, which were $22,624,000 and $23,356,000 for the nine months ended September 30, 2016 and 2015, respectively. Property and Equipment Property and equipment are recorded at cost. Depreciation is provided by the straight-line method over the expected useful lives of the assets estimated as follows: buildings and improvements, 20-40 years and equipment and furniture, 3-15 years. Leasehold improvements are amortized over periods that do not exceed the non-cancelable respective lease terms using the straight-line method. Capital leases are recorded at the lower of fair market value or the present value of future minimum lease payments. Capital leases are amortized in accordance with the provision codified within Accounting Standards Codification (“ASC”) Subtopic 840-30, Leases – Capital Leases Accrued Risk Reserves We are self– insured for risks related to health insurance and have wholly–owned limited purpose insurance companies that insure risks related to workers’ compensation and general and professional liability insurance claims. The accrued risk reserves include a liability for reported claims and estimates for incurred but unreported claims. Our policy is to engage an external, independent actuary to assist in estimating our exposure for claims obligations (for both asserted and unasserted claims). We reassess our accrued risk reserves on a quarterly basis. Professional liability remains an area of particular concern to us. The long term care industry has seen an increase in personal injury/wrongful death claims based on alleged negligence by skilled nursing facilities and their employees in providing care to residents. As of September 30 2016, we and/or our managed centers are defendants in 35 such claims inclusive of years 2005 through September 30, 2016. It remains possible that those pending matters plus potential unasserted claims could exceed our reserves, which could have a material adverse effect on our consolidated financial position, results of operations and cash flows. It is also possible that future events could cause us to make significant adjustments or revisions to these reserve estimates and cause our reported net income to vary significantly from period to period. We are principally self-insured for incidents occurring in all centers owned or leased by us. The coverages include both primary policies and excess policies. In all years, settlements, if any, in excess of available insurance policy limits and our own reserves would be expensed by us. Continuing Care Contracts and Refundable Entrance Fee We have one continuing care retirement center (“CCRC”) within our operations. Residents at this retirement center may enter into continuing care contracts with us. The contracts provide that 10% of the resident entry fee becomes non-refundable upon occupancy, and the remaining refundable portion of the entry fee is calculated using the lessor of the price at which the apartment is re-assigned or 90% of the original entry fee, plus 40% of any appreciation if the apartment exceeds the original resident’s entry fee. In each case, we amortize the non-refundable part of these fees into revenue over the actuarially determined remaining life of the resident, which is the expected period of occupancy by the resident. We pay the refundable portion of our entry fees to residents when they relocate from our community and the apartment is re-occupied. Refundable entrance fees are classified as non-current liabilities and non-refundable entrance fees are classified as deferred revenue in the Company's consolidated balance sheets. The balances of refundable entrance fees as of September 30, 2016 and December 31, 2015 were $9,669,000 and $9,865,000, respectively. Obligation to Provide Future Services W e annually estimate the present value of the cost of future services and the use of facilities to be provided to the current CCRC residents and compare that amount with the balance of non-refundable deferred revenue from entrance fees received. If the present value of the cost of future services exceeds the related anticipated revenues, a liability is recorded (obligation to provide future services) with a corresponding charge to income. As of September 30, 2016 and December 31, 2015, we have recorded a future service obligation in the amount of $3,440,000. Other Noncurrent Liabilities Other noncurrent liabilities include reserves primarily related to various uncertain income tax positions. D eferred Revenue Deferred revenue includes the deferred gain on the sale of assets to National Health Corporation (“National”), the non-refundable portion (10%) of CCRC entrance fees being amortized over the remaining life expectancies of the residents, and premiums received within our workers’ compensation and professional liability companies that are not yet earned. Variable Interest Entities We have equity interests in unconsolidated limited liability companies that operate various post-acute and senior healthcare businesses. We analyze our investments in these limited liability companies to determine if the company is considered a VIE and would require consolidation. To the extent that we own interests in a VIE and we (i) are the sole entity that has the power to direct the activities of the VIE and (ii) have the obligation or rights to absorb the VIE's losses or receive its benefits, then we would be determined to be the primary beneficiary and would consolidate the VIE. To the extent we own interests in a VIE, then at each reporting period, we re-assess our conclusions as to which, if any, party within the VIE is considered the primary beneficiary. The Company's maximum exposure to losses in its investments in unconsolidated VIEs cannot be quantified and may or may not be limited to its investment in the unconsolidated VIE. The investments in unconsolidated VIEs are classified as “investments in limited liability companies” in the consolidated balance sheets. |
Note 3 - Other Revenues
Note 3 - Other Revenues | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Other Revenues [Text Block] | N ote 3 – Other Revenues Other revenues are outlined in the table below. Revenues from management and accounting services include management and accounting fees provided to managed healthcare facilities and other health care centers. Revenues from rental income include health care real estate properties owned by us and leased to third party operators. Revenues from insurance services include premiums for workers’ compensation and professional liability insurance policies that our wholly–owned limited purpose insurance subsidiaries have written for certain health care centers to which we provide management or accounting services. "Other" revenues include miscellaneous health care related earnings. Other revenues include the following: Three Months Ended September 30 Nine Months Ended September 30 (in thousands) 2016 2015 2016 2015 Rental Income $ 5,434 $ 4,807 $ 16,439 $ 14,385 Management and accounting services fees 5,061 3,384 12,316 10,420 Insurance services 1,729 1,674 5,468 5,281 Other 410 170 1,174 764 $ 12,634 $ 10,035 $ 35,397 $ 30,850 Management Fees from National We manage five skilled nursing facilities owned by National. For the three months and nine months ended September 30, 2016, we recognized management fees and interest on management fees of $939,000 and $2,834,000 from these centers, respectively. For the three months and nine months ended September 30, 2015, we recognized management fees and interest on management fees of $885,000 and $2,709,000, respectively, from these centers. Because the amount collectable cannot be reasonably determined when the management services are provided, and because we cannot estimate the timing or amount of expected future collections, the unpaid fees from the five centers owned by National will be recognized as revenues only when the collectability of these fees can be reasonably assured. Under the terms of our management agreement with National, the payment of these fees to us may be subordinated to other expenditures of the five long–term care centers. We continue to manage these centers so that we may be able to collect our fees in the future and because the incremental savings from discontinuing services to a center may be small compared to the potential benefit. We may receive payment for the unrecognized management fees in whole or in part in the future only if cash flows from the operating and investing activities of the five centers or the proceeds from the sale of the centers are sufficient to pay the fees. There can be no assurance that such future improved cash flows will occur. Insurance Services For workers’ compensation insurance services, the premium revenues reflected in the interim condensed consolidated statements of income for the three and nine months ended September 30, 2016 were $1,064,000 and $3,447,000, respectively. For the three months and nine months ended September 30, 2015, the workers' compensation premium revenues reflected in the interim condensed consolidated statements of income were $977,000 and $3,190,000. Associated losses and expenses are reflected in the interim condensed consolidated statements of income as "Salaries, wages and benefits." For professional liability insurance services, the premium revenues reflected in the interim condensed consolidated statements of income for the three months and nine months ended September 30, 2016 were $665,000 and $2,021,000, respectively. For the three months and nine months ended September 30, 2015, the professional liability insurance premium revenues reflected in the interim condensed consolidated statements of income were $697,000 and $2,091,000. Associated losses and expenses including those for self–insurance are included in the interim condensed consolidated statements of income as "Other operating costs and expenses". |
Note 4 - Non-operating Income
Note 4 - Non-operating Income | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Other Nonoperating Income and Expense [Text Block] | Note 4 – Non–Operating Income Non–operating income is outlined in the table below. Non–operating income includes equity in earnings of unconsolidated investments, dividends and other realized gains and losses on marketable securities, and interest income. Our most significant equity method investment is a 75.1% non–controlling ownership interest in Caris HealthCare L.P. (“Caris”), a business that specializes in hospice care services. Three Months Ended September 30 Nine Months Ended September 30 (in thousands) 2016 2015 2016 2015 Equity in earnings of unconsolidated investments $ 1,806 $ 1,538 $ 4,926 $ 3,924 Dividends and other net realized gains and losses on sales of securities 1,892 1,588 5,654 5,093 Interest income 1,393 1,424 4,209 3,885 $ 5,091 $ 4,550 $ 14,789 $ 12,902 |
Note 5 - Long-term Leases
Note 5 - Long-term Leases | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Leases of Lessee Disclosure [Text Block] | Note 5 – Long-Term Leases Capital Leases Fixed assets recorded under the capital leases, which are included in property and equipment in the interim condensed consolidated balance sheets, are as follows: September 30, 2016 December 31, 2015 (in thousands) Buildings and personal property $ 39,032 $ 39,032 Accumulated amortization (10,139 ) (7,196 ) $ 28,893 $ 31,836 Operating Leases At September 30, 2016, NHC leases from National Health Investors, Inc. (“NHI”) the real property of 35 skilled nursing facilities, seven assisted living facilities and three independent living facilities under two separate lease agreements. Base rent expense under both lease agreements totals $34,200,000 annually with rent thereafter escalating by 4% of the increase in facility revenue over the base year. Total facility rent expense to NHI was $9,480,000 and $9,178,000 for the three months ended September 30, 2016 and 2015, respectively. Total facility rent expense to NHI was $28,440,000 and $27,533,000 for the nine months ended September 30, 2016 and 2015, respectively. Minimum Lease Payments The approximate future minimum lease payments required under all leases that have remaining non-cancelable lease terms at September 30, 2016 are as follows: Operating Leases Capital Leases (in thousands) 2017 $ 34,200 $ 5,200 2018 34,200 5,200 2019 34,200 5,200 2020 34,200 5,200 2021 34,200 5,200 Thereafter 185,300 12,567 Total minimum lease payments $ 356,300 $ 38,567 Less: Amounts representing interest (7,500 ) Present value of minimum lease payments 31,067 Less: Current portion (3,429 ) Long-term capital lease obligations $ 27,638 |
Note 6 - Earnings Per Share
Note 6 - Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | Note 6 – Earnings per Share Basic net income per share is computed based on the weighted average number of common shares outstanding for each period presented. Diluted net income per share reflects the potential dilution that would have occurred if securities to issue common stock were exercised, converted, or resulted in the issuance of common stock that would have then shared in our earnings. The following table summarizes the earnings and the weighted average number of common shares used in the calculation of basic and diluted earnings per share. Three Months Ended September 30 Nine Months Ended September 30 (in thousands, except for share and per share amounts) 2016 2015 2016 2015 Basic: Weighted average common shares outstanding 15,198,696 13,801,245 15,128,728 13,778,705 Net income $ 11,110 $ 12,567 $ 36,675 $ 38,167 Dividends to preferred stockholders – (2,152 ) – (6,487 ) Net income available to common stockholders $ 11,110 $ 10,415 $ 36,675 $ 31,680 Earnings per common share, basic $ 0.73 $ 0.75 $ 2.42 $ 2.30 Diluted: Weighted average common shares outstanding 15,198,696 13,801,245 15,128,728 13,778,705 Dilutive effect of stock options 23,952 150,395 23,588 154,113 Dilutive effect of restricted stock – – – 1,577 Dilutive effect of contingent issuable stock – 471,020 64,522 430,856 Assumed average common shares outstanding 15,222,648 14,422,660 15,216,838 14,365,251 Net income available to common stockholders $ 11,110 $ 10,415 $ 36,675 $ 31,680 Earnings per common share, diluted $ 0.73 $ 0.72 $ 2.41 $ 2.21 In the above table, options to purchase 11,592 shares of our common stock have been excluded for the quarter ended and nine months ended September 30, 2015 due to their anti–dilutive impact. |
Note 7 - Investments in Marketa
Note 7 - Investments in Marketable Securities | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | Note 7 – Inve stments in Marketable Securities Our investments in marketable securities are classified as available for sale securities. Realized gains and losses from securities sales are recognized in results of operations upon disposition of the securities using the specific identification method on a trade date basis. Refer to Note 8 for a description of the Company's methodology for determining the fair value of marketable securities. Marketable securities and restricted marketable securities consist of the following: September 30, 2016 December 31, 2015 (in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Investments available for sale: Marketable equity securities $ 30,176 $ 147,017 $ 30,176 $ 116,168 Restricted investments available for sale: Corporate debt securities 65,938 67,826 71,960 71,143 Commercial mortgage–backed securities 53,531 53,913 61,645 60,910 U.S. Treasury securities 26,816 27,188 21,123 21,033 State and municipal securities 29,478 29,959 16,446 16,780 $ 205,939 $ 325,903 $ 201,350 $ 286,034 Included in the available for sale marketable equity securities are the following (in thousands, except share amounts) : September 30, 2016 December 31, 2015 Shares Cost Fair Value Shares Cost Fair Value NHI Common Stock 1,630,642 $ 24,734 $ 127,973 1,630,642 $ 24,734 $ 99,257 The amortized cost and estimated fair value of debt securities classified as available for sale, by contractual maturity, are as follows: September 30, 2016 December 31, 2015 (in thousands) Cost Fair Value Cost Fair Value Maturities: Within 1 year $ 18,530 $ 18,581 $ 23,291 $ 23,273 1 to 5 years 81,710 82,810 74,747 74,671 6 to 10 years 73,505 75,474 71,442 70,223 Over 10 years 2,018 2,021 1,694 1,699 $ 175,763 $ 178,886 $ 171,174 $ 169,866 Gross unrealized gains related to available for sale securities are $120,218,000 and $86,921,000 as of September 30, 2016 and December 31, 2015, respectively. Gross unrealized losses related to available for sale securities are $254,000 and $2,237,000 as of September 30, 2016 and December 31, 2015, respectively. For the marketable securities in gross unrealized loss positions, (a) it is more likely than not that the Company will not be required to sell the investment securities before recovery of the unrealized losses, and (b) the Company expects that the contractual principal and interest will be received on the investment securities. As a result, the Company recognized no other-than-temporary impairment during the nine months ended September 30, 2016 or for the year ended December 31, 2015. Proceeds from the sale of securities during the nine months ended September 30, 2016 and 2015 were $30,963,000 and $39,601,000, respectively. Investment gains of $804,000 and $449,000 were realized on these sales during the nine months ended September 30, 2016 and 2015, respectively. |
Note 8 - Fair Value Measurement
Note 8 - Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | Note 8 – Fair Value Measurements The accounting standard for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. This accounting standard establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Valuation of Marketable Securities The Company determines fair value for marketable securities with Level 1 inputs through quoted market prices. The Company determines fair value for marketable securities with Level 2 inputs through broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. Our Level 2 marketable securities have been initially valued at the transaction price and subsequently valued, at the end of each month, typically utilizing third party pricing services or other market observable data. The pricing services utilize industry standard valuation models, including both income and market based approaches and observable market inputs to determine value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, and other industry and economic events. We validated the prices provided by our broker by reviewing their pricing methods, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming that the relevant markets are active. After completing our validation procedures, we did not adjust or override any fair value measurements provided by our broker as of September 30, 2016. We did not have any transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy during the nine months ended September 30, 2016. Other The carrying amounts of cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their short–term nature. The estimated fair value of notes receivable approximates the carrying value based principally on their underlying interest rates and terms, maturities, collateral and credit status of the receivables. Our long–term debt approximates fair value due to variable interest rates, but fair value is also determined using Level 2 inputs through alternative pricing sources. At September 30, 2016, there were no material differences between the carrying amounts and fair values of NHC’s financial instruments. The following table summarizes fair value measurements by level at September 30, 2016 and December 31, 2015 for assets and liabilities measured at fair value on a recurring basis (in thousands) Fair Value Measurements Using September 30, 2016 Fair Value Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents $ 19,212 $ 19,212 $ – $ – Restricted cash and cash equivalents 17,158 17,158 – – Marketable equity securities 147,017 147,017 – – Corporate debt securities 67,826 34,538 33,288 – Mortgage–backed securities 53,913 – 53,913 – U.S. Treasury securities 27,188 27,188 – – State and municipal securities 29,959 – 29,959 – Total financial assets $ 362,273 $ 245,113 $ 117,160 $ – Fair Value Measurements Using December 31, 2015 Fair Value Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents $ 38,208 $ 38,208 $ – $ – Restricted cash and cash equivalents 11,106 11,106 – – Marketable equity securities 116,168 116,168 – – Corporate debt securities 71,143 32,683 38,460 – Mortgage-backed securities 60,910 – 60,910 – U.S. Treasury securities 21,033 21,033 – – State and municipal securities 16,780 – 16,780 – Total financial assets $ 335,348 $ 219,198 $ 116,150 $ – |
Note 9 - Long-term Debt
Note 9 - Long-term Debt | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | Note 9 – Long – Term Debt Long–term debt consists of the following: Weighted Average Interest Rate Maturities September 30, 2016 December 31, 2015 Variable (dollars in thousands) Revolving Credit Facility, interest payable monthly 1.9% 2020 $ 110,000 $ 110,000 Unsecured term note payable to National, interest payable quarterly, principal payable at maturity 3.0% 2018 10,000 10,000 120,000 120,000 Less current portion – – $ 120,000 $ 120,000 $175,000,000 Credit Facility The Credit Agreement contains customary representations and financial covenants, including covenants that restrict, among other things, asset dispositions, mergers and acquisitions, dividends, restricted payments, debt, liens, investments and affiliate transactions. The Credit Agreement contains customary events of default. |
Note 10 - Stock Repurchase Prog
Note 10 - Stock Repurchase Program | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Treasury Stock [Text Block] | Note 1 0 - Stock Repurchase Program In May 2015, the Board of Directors authorized two new stock repurchase programs, one that allowed for the repurchase of up to $25 million of its common stock and one that allowed for the repurchase of up to $25 million of its preferred stock. As of November 2015, all of the Company’s preferred stock was redeemed. Therefore, no future repurchases of the preferred stock will be performed. On August 5, 2016, the Company repurchased 130,000 shares of its common stock for a total cost of $8,195,000. The shares were funded from cash on hand and were cancelled and returned to the status of authorized but unissued. This repurchase plan expired on August 31, 2016. |
Note 11 - Stock-based Compensat
Note 11 - Stock-based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Note 11 – Stock–Based Compensation NHC recognizes stock–based compensation expense for all stock options and restricted stock granted over the requisite service period using the fair value for these grants as estimated at the date of grant either using the Black–Scholes pricing model for stock options or the quoted market price for restricted stock. The 2005 and 2010 Stock–Based Compensation Plans The Compensation Committee of the Board of Directors (“the Committee”) has the authority to select the participants to be granted options; to designate whether the option granted is an incentive stock option (“ISO”), a non–qualified option, or a stock appreciation right; to establish the number of shares of common stock that may be issued upon exercise of the option; to establish the vesting provision for any award; and to establish the term any award may be outstanding. The exercise price of any ISO’s granted will not be less than the fair market value of the shares of common stock on the date granted and the term of an ISO may not be any more than ten years. The exercise price of any non–qualified options granted will not be less than the fair market value of the shares of common stock on the date granted unless so determined by the Committee. In May 2005, our stockholders approved the 2005 Stock Option, Employee Stock Purchase, Physician Stock Purchase and Stock Appreciation Rights Plan (“the 2005 Plan”) pursuant to which 1,200,000 shares of our common stock were available to grant as stock–based payments to key employees, directors, and non–employee consultants. The shares granted during the nine months ended September 30, 2016 consisted of 45,000 shares to the Directors of the Company. At September 30, 2016, 131,276 shares were available for future grants under the 2005 Plan. In May 2010, our stockholders approved the 2010 Omnibus Equity Incentive Plan (“the 2010 Plan”) pursuant to which 1,200,000 shares of our common stock were available to grant as stock–based payments to key employees, directors, and non–employee consultants. In May 2015, our stockholders voted to amend the 2010 Plan to increase the number of shares of our common stock authorized under the Plan from the original 1,200,000 shares to 2,575,000 shares. The shares granted during the nine months ended September 30, 2016 consisted of 11,774 shares through the Employee Stock Purchase Plan. At September 30, 2016, 1,750,760 shares were available for future grants under the amended 2010 Plan. Compensation expense is recognized only for the awards that ultimately vest. Stock–based compensation totaled $9,000 and $425,000 for the three months ended September 30, 2016 and 2015, respectively. Stock–based compensation totaled $502,000 and $1,557,000 for the nine months ended September 30, 2016 and 2015, respectively. Stock–based compensation is included in “Salaries, wages and benefits” in the interim condensed consolidated statements of income. Stock Options The following table summarizes the significant assumptions used to value the options granted for the nine months ended September 30, 2016 and for the year ended December 31, 2015. 2016 2015 Risk–free interest rate 0.9 % 0.7 % Expected volatility 15.8 % 16.5 % Expected life, in years 2.2 2.2 Expected dividend yield 3.1 % 2.7 % The following table summarizes our outstanding stock options for the nine months ended September 30, 2016 and for the year ended December 31, 2015. Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value Options outstanding at January 1, 2015 954,678 $ 46.92 $ – Options granted 56,210 61.47 – Options exercised (389,498 ) 47.06 – Options outstanding at December 31, 2015 621,390 48.15 – Options granted 56,774 62.53 – Options exercised (480,275 ) 46.81 – Options forfeited (656 ) 46.69 – Options outstanding at September 30, 2016 197,233 $ 55.55 $ 2,062,000 Options exercisable at September 30, 2016 185,459 $ 55.15 $ 2,010,000 Options Outstanding September 30, 2016 Exercise Prices Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years 97,500 $44.80 - $52.93 $ 48.95 1.7 99,733 $61.25 - $62.78 61.98 3.7 197,233 $ 55.55 2.7 |
Note 12 - Income Taxes
Note 12 - Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | Note 12 – Income Taxes The income tax provision for the three months ended September 30, 2016 is $4,571,000 (an effective income tax rate of 29.1%). The income tax provision and effective tax rate for the three months ended September 30, 2016 were favorably impacted by statute of limitation expirations resulting in a benefit to the provision of $1,306,000 or 8.3% of income before taxes for the quarter. The income tax provision for the three months ended September 30, 2015 was $5,744,000 (an effective income tax rate of 31.4%). The income tax provision and effective tax rate for the three months ended September 30, 2015 were favorably impacted by statute of limitation expirations resulting in a benefit to the provision of $1,715,000 or 9.4% of income before taxes for the quarter. The income tax provision for the nine months ended September 30, 2016 is $20,969,000 (an effective income tax rate of 36.4%). The income tax provision and effective tax rate for the nine months ended September 30, 2016 were favorably impacted by the statute of limitation expirations resulting in a benefit to the provision of $1,306,000 or 2.3% of income before taxes in 2016. The income tax provision for the nine months ended September 30, 2015 was $21,638,000 (an effective income tax rate of 36.2%). The income tax provision and effective tax rate for the nine months ended September 30, 2015 were favorably impacted by statute of limitation expirations resulting in a benefit to the provision of $1,715,000 or 2.9% of income before taxes in 2015. Interest and penalties expense related to U.S. federal and state income tax returns are included within income tax expense. The Company is no longer subject to U.S. federal and state examinations by tax authorities for years before 2012 (with certain state exceptions). Currently, the 2012 U.S. federal return is under examination. |
Note 13 - Contingencies and Com
Note 13 - Contingencies and Commitments | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | Note 13 – Contingencies and Commitments Accrued Risk Reserves We are self– insured for risks related to health insurance and have wholly–owned limited purpose insurance companies that insure risks related to workers’ compensation and general and professional liability insurance claims both for our owned or leased entities and certain of the entities to which we provide management or accounting services. The liability we have recognized for reported claims and estimates for incurred but unreported claims totals $97,609,000 and $98,508,000 at September 30, 2016 and December 31, 2015, respectively. The liability is included in accrued risk reserves in the interim condensed consolidated balance sheets and is subject to adjustment for actual claims incurred. It is possible that these claims plus unasserted claims could exceed our insurance coverages and our reserves, which could have a material adverse effect on our consolidated financial position, results of operations and cash flows. As a result of the terms of our insurance policies and our use of wholly–owned limited purpose insurance companies, we have retained significant insurance risk with respect to workers’ compensation and general and professional liability. We consider the professional services of independent actuaries to assist us in estimating our exposures for claims obligations (for both asserted and unasserted claims) related to deductibles and exposures in excess of coverage limits, and we maintain reserves for these obligations. Such estimates are based on many variables including historical and statistical information and other factors. Workers ’ Compensation For workers’ compensation, we utilize a wholly–owned Tennessee domiciled property/casualty insurance company to write coverage for NHC affiliates and for third–party customers. Policies are written for a duration of twelve months and cover only risks related to workers’ compensation losses. All customers are companies which operate in the senior care industry. Business is written on a direct basis. Direct business coverage is written for statutory limits and the insurance company’s losses in excess of $1,000,000 per claim are covered by reinsurance. General and Professional Liability Lawsuits and Insurance The senior care industry has experienced increases in both the number of personal injury/wrongful death claims and in the severity of awards based upon alleged negligence by nursing facilities and their employees in providing care to residents. As of September 30, 2016, we and/or our managed centers are currently defendants in 35 such claims. In 2002, due to the unavailability and/or prohibitive cost of third–party professional liability insurance coverage, we established and capitalized a wholly–owned licensed liability insurance company incorporated in the Cayman Islands, for the purpose of managing our losses related to these risks. Thus, since 2002, insurance coverage for incidents occurring at all NHC owned providers, and most providers managed by us, is provided through this wholly–owned insurance company. Insurance coverage for all years includes both primary policies and excess policies. Beginning in 2003, both primary and excess coverage is provided through our wholly–owned insurance company. The primary coverage is in the amount of $1.0 million per incident, $3.0 million per location with an annual primary policy aggregate limit that is adjusted on an annual basis. The excess coverage is $7.5 million annual excess in the aggregate applicable to years 2005–2007, $9.0 million annual excess in the aggregate for years 2008–2010, $4.0 million excess per occurrence for 2011–2013 and $9.0 million excess per occurrence for 2014-2016. Beginning in 2008 and continuing through September 30, 2016, additional insurance is purchased through third party providers that serve to supplement the coverage provided through our wholly–owned captive insurance company. Civil Investigative Demand On December 19, 2013, the Company was served with a civil investigative demand (“CID”) from the U.S. Department of Justice and the Office of the U.S. Attorney for the Eastern District of Tennessee (“DOJ Investigation”) requesting the production of documents and interrogatory responses regarding the billing for and medical necessity of certain rehabilitative therapy services. Based upon our review, the CID appears to relate to services provided at our facilities based in Knoxville, Tennessee. On October 7, 2014, the Company received a subpoena from the Office of Inspector General of the United Department of Health and Human Services (“OIG Subpoena”) related to the current DOJ Investigation. The OIG Subpoena requests certain financial and organizational documents from the Company and certain of its subsidiaries and SNFs and medical records from certain of the Company’s Tennessee-based SNFs. The Company is cooperating fully with these requests. We are unable to evaluate the outcome of this investigation at this time. It is possible that this investigation could lead to a claim that could have a material adverse effect on our consolidated financial position, results of operations and cash flows. Caris HealthCare, L.P. Investigation On December 9, 2014, Caris Healthcare, L.P., a business that specializes in hospice care services in Company-owned health care centers and in other settings, received notice from the U.S. Attorney’s Office for the Eastern District of Tennessee and the Attorney Generals’ Offices for the State of Tennessee and State of Virginia that those government entities were conducting an investigation regarding patient eligibility for hospice services provided by Caris precipitated by a qui tam A qui tam United States of America, State of Tennessee, and State of Virginia ex rel. Barbara Hinkle v. Caris Healthcare, L.P. On June 16, 2016, the State of Tennessee and the State of Virginia declined to intervene in the qui tam qui tam Caris denies the allegations in the United States' complaint and intends to defend itself vigorously. Given the early stage of this action, we are unable to assess the probable outcome or potential liability, if any, arising from this action. It is possible that this claim could have a material adverse effect on our consolidated financial position, results of operations and cash flows. South Carolina Medicaid Audits The South Carolina Office of State Auditor (“State Auditor”) conducted Medicaid cost report audits for eleven of the Company’s South Carolina skilled nursing facilities. The State Auditor has issued audit findings for the fiscal years ending September 30, 2013 and September 30, 2014. During 2015, the Company paid the South Carolina Department of Health and Human Services $6.8 million due to the State Auditor findings. The Company has filed administrative appeals with the South Carolina Department of Health and Human Services to recoup these funds and this process is continuing within the legal system. At September 30, 2016, there are no amounts recorded in our interim condensed consolidated balance sheets pertaining to the potential recoupment of these funds. Financing Commitments Effective January 1, 2016 and in conjunction with the signed rental agreement for eleven of our healthcare properties, we entered into a short-term line of credit arrangement with a third party operator. The maximum commitment under the line of credit is $10,000,000 and the maturity date is December 30, 2016, or earlier with 30 days written notice. At September 30, 2016, the third party operator had an outstanding balance on the line of credit of $2,168,000. This amount is classified in the current portion of notes receivable in the interim condensed consolidated balance sheets. In conjunction with our management contract with National, we have entered into a line of credit arrangement whereby we may have amounts due from National from time to time. The maximum loan commitment under the line of credit is $2,000,000. At September 30, 2016, National did not have an outstanding balance on the line of credit. Governmental Regulations Laws and regulations governing the Medicare, Medicaid and other federal healthcare programs are complex and subject to interpretation. Management believes that it is in compliance with all applicable laws and regulations in all material respects. However, compliance with such laws and regulations can be subject to future government review and interpretation as well as significant regulatory action including fines, penalties, and exclusions from the Medicare, Medicaid and other federal healthcare programs. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The unaudited interim condensed consolidated financial statements to which these notes are attached include all normal, recurring adjustments which are necessary to fairly present the financial position, results of operations and cash flows of NHC. All significant intercompany transactions and balances have been eliminated in consolidation. We assume that users of these interim financial statements have read or have access to the audited December 31, 2015 consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations and that the adequacy of additional disclosure needed for a fair presentation, except in regard to material contingencies, may be determined in that context. Accordingly, footnotes and other disclosures which would substantially duplicate the disclosure contained in our most recent annual report to stockholders have been omitted. This interim financial information is not necessarily indicative of the results that may be expected for a full year for a variety of reasons. |
Use of Estimates, Policy [Policy Text Block] | Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us 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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and could cause our reported net income to vary significantly from period to period. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Adopted Accounting Guidance In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-17, “Income Taxes” which requires that deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet. Prior to the issuance of the standard, deferred tax liabilities and assets were required to be separately classified into a current amount and a noncurrent amount in the balance sheet. The new accounting guidance represents a change in accounting principle and the standard is required to be adopted in annual periods beginning after December 15, 2016. Early adoption is permitted and the Company elected to early adopt this guidance as of December 31, 2015. In April 2015, the FASB issued ASU 2015-03, "Imputation of Interest (Sub-Topic 835.30): Simplifying the Presentation of Debt Issuance Costs". ASU 2015-03 requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU 2015-15 clarifying the application of this guidance to line of credit arrangements. The amendments in the ASUs are effective retrospectively for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. This guidance did not have a material impact on our consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02 “Amendments to the Consolidation Analysis”. This update is in response to stakeholders that have expressed concerns that current generally accepted accounting principles (“GAAP”) might require a reporting entity to consolidate another legal entity in situations in which the reporting entity’s contractual rights do not give it the ability to act primarily on its own behalf, the reporting entity does not hold a majority of the legal entity’s voting rights, or the reporting entity is not exposed to a majority of the legal entity’s economic benefits or obligations. Thus, the update modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities. It eliminates the presumption that a general partner should consolidate a limited partnership, for limited partnerships and similar legal entities that qualify as voting interest entities; a limited partner with a controlling financial interest should consolidate a limited partnership. A controlling financial interest may be achieved through holding a limited partner interest that provides substantive kick-out rights. Finally, it requires consideration of the effects of fee arrangements and related parties on the primary beneficiary determination. The amendments in this update are effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. This guidance did not have a material impact on our consolidated financial statements. Recent Accounting Guidance Not Yet Adopted In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 simplifies the accounting for share-based payment award transactions including: income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the requirements of ASU 2016-09 and have not yet determined its impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." The objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods and is to be applied utilizing a modified retrospective approach. We anticipate this standard will have a material impact on our consolidated financial statements. Additionally, we are currently evaluating the impact this standard will have on our policies and procedures and internal control framework. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825)”. ASU No. 2016-01 revises the classification and measurement of investments in certain equity investments and the presentation of certain fair value changes for certain financial liabilities measured at fair value. ASU No. 2016-01 requires the change in fair value of many equity investments to be recognized in net income. ASU No. 2016-01 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. Adopting ASU No. 2016-01 may result in a cumulative effect adjustment to the Company’s retained earnings as of the beginning of the year of adoption. We are currently evaluating the potential effects of adopting the provisions of ASU No. 2016-01. In May 2014, the FASB issued ASU No. 2014-09 “Revenue from Contracts with Customers”. This update is the result of a collaborative effort by the FASB and the International Accounting Standards Board to simplify revenue recognition guidance, remove inconsistencies in the application of revenue recognition, and to improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. The FASB is amending the Accounting Standards Codification and creating a new Topic 606, “Revenue from Contracts with Customers”. The core principle of the 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. For a public entity, the amendments in this update are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the impact of this guidance on our consolidated financial statements and control framework. |
Contractual Adjustments and Third Party Settlements, Policy [Policy Text Block] | Revenue Recognition – Third Party Payors Approximately 65% of our net patient revenues are derived from Medicare, Medicaid, and other government programs. Amounts earned under these programs are subject to review by the Medicare and Medicaid intermediaries or their agents. In our opinion, adequate provision has been made for any adjustments that may result from these reviews. Any differences between our original estimates of reimbursements and subsequent revisions are reflected in operations in the period in which the revisions are made often due to final determination or the period of payment no longer being subject to audit or review. We have recorded liabilities of approximately $19,007,000 and $16,654,000 as of September 30, 2016 and December 31, 2015, respectively, for various Medicare and Medicaid current and prior year cost reports and claims reviews. |
Revenue Recognition for Alternative Revenue Programs, Policy [Policy Text Block] | Revenue Recognition – Private P ay For private pay patients in skilled nursing or assisted living facilities, we bill room and board in advance with payment being due in the month the services are performed. Charges for ancillary, pharmacy, therapy and other services to private patients are billed in the month following the performance of services; however, all billings are recognized as revenue when the services are performed. |
Premiums Receivable, Allowance for Doubtful Accounts, Estimation Methodology, Policy [Policy Text Block] | Revenue Recognition – Subordination of Fees and Uncert ain Collections We provide management services to certain senior care facilities and to others we provide accounting and financial services. We generally charge 6% to 7% of net operating revenues for our management services and a predetermined fixed rate per bed for the accounting and financial services. Our policy is to recognize revenues associated with both management services and accounting and financial services on an accrual basis as the services are provided. However, under the terms of our management contracts, payments for our management services are subject to subordination to other expenditures of the long–term care center being managed. Furthermore, for certain of the third parties with whom we have contracted to provide services and which we have determined that collection is not reasonably assured; our policy is to recognize income only in the period in which the amounts are realized. We may receive payment for the unpaid and unrecognized management fees in whole or in part in the future only if cash flows from the operating and investing activities of the centers or proceeds from the sale of the centers are sufficient to pay the fees. There can be no assurance that such future cash flows will occur. The realization of such previously unrecognized revenue could cause our reported net income to vary significantly from period to period. We agree to subordinate our fees to the other expenses of a managed center because we believe we know how to improve the quality of patient services and finances of a senior healthcare center. We believe subordinating our fees demonstrates to the owner and employees of the managed center how confident we are of the impact we can have in making the center operations successful. We may continue to provide services to certain managed centers despite not being fully paid currently so that we may be able to collect unpaid fees in the future from improved operating results and because the incremental savings from discontinuing services to a center may be small compared to the potential benefit. Also, we may benefit from providing other ancillary services to the managed center. |
Other Operating Expenses Policy [Policy Text Block] | Other Operating Expenses Other operating expenses include the costs of care and services that we provide to the residents of our facilities and the costs of maintaining our facilities. Our primary patient care costs include drugs, medical supplies, purchased professional services, food, and professional liability insurance and licensing fees. The primary facility costs include utilities and property insurance. |
Selling, General and Administrative Expenses, Policy [Policy Text Block] | General and Administrative Costs With the Company being a healthcare provider, the majority of our expenses are "cost of revenue" items. Costs that could be classified as "general and administrative" by the Company would include its corporate office costs, which were $22,624,000 and $23,356,000 for the nine months ended September 30, 2016 and 2015, respectively. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are recorded at cost. Depreciation is provided by the straight-line method over the expected useful lives of the assets estimated as follows: buildings and improvements, 20-40 years and equipment and furniture, 3-15 years. Leasehold improvements are amortized over periods that do not exceed the non-cancelable respective lease terms using the straight-line method. Capital leases are recorded at the lower of fair market value or the present value of future minimum lease payments. Capital leases are amortized in accordance with the provision codified within Accounting Standards Codification (“ASC”) Subtopic 840-30, Leases – Capital Leases |
Liability Reserve Estimate, Policy [Policy Text Block] | Accrued Risk Reserves We are self– insured for risks related to health insurance and have wholly–owned limited purpose insurance companies that insure risks related to workers’ compensation and general and professional liability insurance claims. The accrued risk reserves include a liability for reported claims and estimates for incurred but unreported claims. Our policy is to engage an external, independent actuary to assist in estimating our exposure for claims obligations (for both asserted and unasserted claims). We reassess our accrued risk reserves on a quarterly basis. Professional liability remains an area of particular concern to us. The long term care industry has seen an increase in personal injury/wrongful death claims based on alleged negligence by skilled nursing facilities and their employees in providing care to residents. As of September 30 2016, we and/or our managed centers are defendants in 35 such claims inclusive of years 2005 through September 30, 2016. It remains possible that those pending matters plus potential unasserted claims could exceed our reserves, which could have a material adverse effect on our consolidated financial position, results of operations and cash flows. It is also possible that future events could cause us to make significant adjustments or revisions to these reserve estimates and cause our reported net income to vary significantly from period to period. We are principally self-insured for incidents occurring in all centers owned or leased by us. The coverages include both primary policies and excess policies. In all years, settlements, if any, in excess of available insurance policy limits and our own reserves would be expensed by us. |
Continuing Care Retirement Communities, Advance Fees, Policy [Policy Text Block] | Continuing Care Contracts and Refundable Entrance Fee We have one continuing care retirement center (“CCRC”) within our operations. Residents at this retirement center may enter into continuing care contracts with us. The contracts provide that 10% of the resident entry fee becomes non-refundable upon occupancy, and the remaining refundable portion of the entry fee is calculated using the lessor of the price at which the apartment is re-assigned or 90% of the original entry fee, plus 40% of any appreciation if the apartment exceeds the original resident’s entry fee. In each case, we amortize the non-refundable part of these fees into revenue over the actuarially determined remaining life of the resident, which is the expected period of occupancy by the resident. We pay the refundable portion of our entry fees to residents when they relocate from our community and the apartment is re-occupied. Refundable entrance fees are classified as non-current liabilities and non-refundable entrance fees are classified as deferred revenue in the Company's consolidated balance sheets. The balances of refundable entrance fees as of September 30, 2016 and December 31, 2015 were $9,669,000 and $9,865,000, respectively. Obligation to Provide Future Services W e annually estimate the present value of the cost of future services and the use of facilities to be provided to the current CCRC residents and compare that amount with the balance of non-refundable deferred revenue from entrance fees received. If the present value of the cost of future services exceeds the related anticipated revenues, a liability is recorded (obligation to provide future services) with a corresponding charge to income. As of September 30, 2016 and December 31, 2015, we have recorded a future service obligation in the amount of $3,440,000. |
Other Noncurrent Liabilities [Policy Text Block] | Other Noncurrent Liabilities Other noncurrent liabilities include reserves primarily related to various uncertain income tax positions. |
Revenue Recognition, Deferred Revenue [Policy Text Block] | D eferred Revenue Deferred revenue includes the deferred gain on the sale of assets to National Health Corporation (“National”), the non-refundable portion (10%) of CCRC entrance fees being amortized over the remaining life expectancies of the residents, and premiums received within our workers’ compensation and professional liability companies that are not yet earned. |
Consolidation, Variable Interest Entity, Policy [Policy Text Block] | Variable Interest Entities We have equity interests in unconsolidated limited liability companies that operate various post-acute and senior healthcare businesses. We analyze our investments in these limited liability companies to determine if the company is considered a VIE and would require consolidation. To the extent that we own interests in a VIE and we (i) are the sole entity that has the power to direct the activities of the VIE and (ii) have the obligation or rights to absorb the VIE's losses or receive its benefits, then we would be determined to be the primary beneficiary and would consolidate the VIE. To the extent we own interests in a VIE, then at each reporting period, we re-assess our conclusions as to which, if any, party within the VIE is considered the primary beneficiary. The Company's maximum exposure to losses in its investments in unconsolidated VIEs cannot be quantified and may or may not be limited to its investment in the unconsolidated VIE. The investments in unconsolidated VIEs are classified as “investments in limited liability companies” in the consolidated balance sheets. |
Note 3 - Other Revenues (Tables
Note 3 - Other Revenues (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Other Revenues [Table Text Block] | Three Months Ended September 30 Nine Months Ended September 30 (in thousands) 2016 2015 2016 2015 Rental Income $ 5,434 $ 4,807 $ 16,439 $ 14,385 Management and accounting services fees 5,061 3,384 12,316 10,420 Insurance services 1,729 1,674 5,468 5,281 Other 410 170 1,174 764 $ 12,634 $ 10,035 $ 35,397 $ 30,850 |
Note 4 - Non-operating Income (
Note 4 - Non-operating Income (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Other Nonoperating Income, by Component [Table Text Block] | Three Months Ended September 30 Nine Months Ended September 30 (in thousands) 2016 2015 2016 2015 Equity in earnings of unconsolidated investments $ 1,806 $ 1,538 $ 4,926 $ 3,924 Dividends and other net realized gains and losses on sales of securities 1,892 1,588 5,654 5,093 Interest income 1,393 1,424 4,209 3,885 $ 5,091 $ 4,550 $ 14,789 $ 12,902 |
Note 5 - Long-term Leases (Tabl
Note 5 - Long-term Leases (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Capital Leased Assets [Table Text Block] | September 30, 2016 December 31, 2015 (in thousands) Buildings and personal property $ 39,032 $ 39,032 Accumulated amortization (10,139 ) (7,196 ) $ 28,893 $ 31,836 |
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] | Operating Leases Capital Leases (in thousands) 2017 $ 34,200 $ 5,200 2018 34,200 5,200 2019 34,200 5,200 2020 34,200 5,200 2021 34,200 5,200 Thereafter 185,300 12,567 Total minimum lease payments $ 356,300 $ 38,567 Less: Amounts representing interest (7,500 ) Present value of minimum lease payments 31,067 Less: Current portion (3,429 ) Long-term capital lease obligations $ 27,638 |
Note 6 - Earnings Per Share (Ta
Note 6 - Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended September 30 Nine Months Ended September 30 (in thousands, except for share and per share amounts) 2016 2015 2016 2015 Basic: Weighted average common shares outstanding 15,198,696 13,801,245 15,128,728 13,778,705 Net income $ 11,110 $ 12,567 $ 36,675 $ 38,167 Dividends to preferred stockholders – (2,152 ) – (6,487 ) Net income available to common stockholders $ 11,110 $ 10,415 $ 36,675 $ 31,680 Earnings per common share, basic $ 0.73 $ 0.75 $ 2.42 $ 2.30 Diluted: Weighted average common shares outstanding 15,198,696 13,801,245 15,128,728 13,778,705 Dilutive effect of stock options 23,952 150,395 23,588 154,113 Dilutive effect of restricted stock – – – 1,577 Dilutive effect of contingent issuable stock – 471,020 64,522 430,856 Assumed average common shares outstanding 15,222,648 14,422,660 15,216,838 14,365,251 Net income available to common stockholders $ 11,110 $ 10,415 $ 36,675 $ 31,680 Earnings per common share, diluted $ 0.73 $ 0.72 $ 2.41 $ 2.21 |
Note 7 - Investments in Marke27
Note 7 - Investments in Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Available-for-sale Securities [Table Text Block] | September 30, 2016 December 31, 2015 (in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Investments available for sale: Marketable equity securities $ 30,176 $ 147,017 $ 30,176 $ 116,168 Restricted investments available for sale: Corporate debt securities 65,938 67,826 71,960 71,143 Commercial mortgage–backed securities 53,531 53,913 61,645 60,910 U.S. Treasury securities 26,816 27,188 21,123 21,033 State and municipal securities 29,478 29,959 16,446 16,780 $ 205,939 $ 325,903 $ 201,350 $ 286,034 |
Schedule of Available-for-sale Securities Reconciliation [Table Text Block] | September 30, 2016 December 31, 2015 Shares Cost Fair Value Shares Cost Fair Value NHI Common Stock 1,630,642 $ 24,734 $ 127,973 1,630,642 $ 24,734 $ 99,257 |
Investments Classified by Contractual Maturity Date [Table Text Block] | September 30, 2016 December 31, 2015 (in thousands) Cost Fair Value Cost Fair Value Maturities: Within 1 year $ 18,530 $ 18,581 $ 23,291 $ 23,273 1 to 5 years 81,710 82,810 74,747 74,671 6 to 10 years 73,505 75,474 71,442 70,223 Over 10 years 2,018 2,021 1,694 1,699 $ 175,763 $ 178,886 $ 171,174 $ 169,866 |
Note 8 - Fair Value Measureme28
Note 8 - Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | Fair Value Measurements Using September 30, 2016 Fair Value Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents $ 19,212 $ 19,212 $ – $ – Restricted cash and cash equivalents 17,158 17,158 – – Marketable equity securities 147,017 147,017 – – Corporate debt securities 67,826 34,538 33,288 – Mortgage–backed securities 53,913 – 53,913 – U.S. Treasury securities 27,188 27,188 – – State and municipal securities 29,959 – 29,959 – Total financial assets $ 362,273 $ 245,113 $ 117,160 $ – Fair Value Measurements Using December 31, 2015 Fair Value Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents $ 38,208 $ 38,208 $ – $ – Restricted cash and cash equivalents 11,106 11,106 – – Marketable equity securities 116,168 116,168 – – Corporate debt securities 71,143 32,683 38,460 – Mortgage-backed securities 60,910 – 60,910 – U.S. Treasury securities 21,033 21,033 – – State and municipal securities 16,780 – 16,780 – Total financial assets $ 335,348 $ 219,198 $ 116,150 $ – |
Note 9 - Long-term Debt (Tables
Note 9 - Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Debt [Table Text Block] | Weighted Average Interest Rate Maturities September 30, 2016 December 31, 2015 Variable (dollars in thousands) Revolving Credit Facility, interest payable monthly 1.9% 2020 $ 110,000 $ 110,000 Unsecured term note payable to National, interest payable quarterly, principal payable at maturity 3.0% 2018 10,000 10,000 120,000 120,000 Less current portion – – $ 120,000 $ 120,000 |
Note 11 - Stock-based Compens30
Note 11 - Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | 2016 2015 Risk–free interest rate 0.9 % 0.7 % Expected volatility 15.8 % 16.5 % Expected life, in years 2.2 2.2 Expected dividend yield 3.1 % 2.7 % |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Number of Shares Weighted Average Exercise Price Aggregate Intrinsic Value Options outstanding at January 1, 2015 954,678 $ 46.92 $ – Options granted 56,210 61.47 – Options exercised (389,498 ) 47.06 – Options outstanding at December 31, 2015 621,390 48.15 – Options granted 56,774 62.53 – Options exercised (480,275 ) 46.81 – Options forfeited (656 ) 46.69 – Options outstanding at September 30, 2016 197,233 $ 55.55 $ 2,062,000 Options exercisable at September 30, 2016 185,459 $ 55.15 $ 2,010,000 |
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | Options Outstanding September 30, 2016 Exercise Prices Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years 97,500 $44.80 - $52.93 $ 48.95 1.7 99,733 $61.25 - $62.78 61.98 3.7 197,233 $ 55.55 2.7 |
Note 1 - Description of Busin31
Note 1 - Description of Business (Details Textual) | Sep. 30, 2016 |
Number of Skilled Nursing Centers | 74 |
Number of Beds | 9,398 |
Number of Assisted Living Facilities | 21 |
Number of Independent Living Facilities | 5 |
Number of Homecare Programs | 36 |
Number of States in which Entity Operates | 10 |
Note 2 - Summary of Significa32
Note 2 - Summary of Significant Accounting Policies (Details Textual) | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Percent of Revenues Derived from Medicare, Medicaid and Other Government Programs [Member] | |||
Concentration Risk, Percentage | 65.00% | ||
Medicare and Medicaid [Member] | |||
Allowance for Doubtful Accounts Receivable | $ 19,007,000 | $ 16,654,000 | |
Minimum [Member] | Building and Building Improvements [Member] | |||
Property, Plant and Equipment, Useful Life | 20 years | ||
Minimum [Member] | Equipment and Furniture [Member] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Minimum [Member] | |||
Management Services Fees | 6.00% | ||
Maximum [Member] | Building and Building Improvements [Member] | |||
Property, Plant and Equipment, Useful Life | 40 years | ||
Maximum [Member] | Equipment and Furniture [Member] | |||
Property, Plant and Equipment, Useful Life | 15 years | ||
Maximum [Member] | |||
Management Services Fees | 7.00% | ||
Corporate Office Costs [Member] | |||
General and Administrative Expense | $ 22,624,000 | $ 23,356,000 | |
Appreciation [Member] | |||
Malpractice Loss Contingency, Number of Claims | 35 | ||
Appreciation of Apartment Over Original Residents Entry Fee Percentage | 40.00% | ||
Refundable Advance Fees [Member] | |||
Nonrefundable Resident Entry Fee Percentage | 10.00% | ||
Customer Refundable Fees | $ 9,669,000 | 9,865,000 | |
Original Entry Fee [Member] | |||
Refundable Resident Entry Fee Percentage | 90.00% | ||
Continuing Care Retirement Communities Advance Fees, Obligation for Future Services, Amount | $ 3,440,000 | $ 3,440,000 | |
Malpractice Loss Contingency, Number of Claims | 35 |
Note 3 - Other Revenues (Detail
Note 3 - Other Revenues (Details Textual) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | |
National [Member] | ||||
Number of Skilled Nursing Centers | 5 | 5 | ||
Management Fees Revenue | $ 939,000 | $ 885,000 | $ 2,834,000 | $ 2,709,000 |
Workers Compensation Premium Revenue [Member] | ||||
Health Care Organization, Premium Revenue | 1,064,000 | 977,000 | 3,447,000 | 3,190,000 |
Professional Liability Insurance [Member] | ||||
Health Care Organization, Premium Revenue | $ 665,000 | $ 697,000 | $ 2,021,000 | $ 2,091,000 |
Number of Skilled Nursing Centers | 74 | 74 |
Note 3 - Other Revenues - Summa
Note 3 - Other Revenues - Summary of Other Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Rental Income [Member] | ||||
Other Revenues | $ 5,434 | $ 4,807 | $ 16,439 | $ 14,385 |
Management and Accounting Services Fees [Member] | ||||
Other Revenues | 5,061 | 3,384 | 12,316 | 10,420 |
Insurance Services [Member] | ||||
Other Revenues | 1,729 | 1,674 | 5,468 | 5,281 |
Other Income [Member] | ||||
Other Revenues | 410 | 170 | 1,174 | 764 |
Other Revenues | $ 12,634 | $ 10,035 | $ 35,397 | $ 30,850 |
Note 4 - Non-operating Income35
Note 4 - Non-operating Income (Details Textual) | Sep. 30, 2016 |
Caris [Member] | |
Equity Method Investment, Ownership Percentage | 75.10% |
Note 4 - Non-operating Income -
Note 4 - Non-operating Income - Schedule of Non-operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Equity in earnings of unconsolidated investments | $ 1,806 | $ 1,538 | $ 4,926 | $ 3,924 |
Dividends and other net realized gains and losses on sales of securities | 1,892 | 1,588 | 5,654 | 5,093 |
Interest income | 1,393 | 1,424 | 4,209 | 3,885 |
Other non-operating income | $ 5,091 | $ 4,550 | $ 14,789 | $ 12,902 |
Note 5 - Long-term Leases (Deta
Note 5 - Long-term Leases (Details Textual) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | |
Two Leases with NHI [Member] | ||||
Number of Skilled Nursing Centers Leased from NHI | 35 | 35 | ||
Number of Assisted Living Centers Leased from NHI | 7 | 7 | ||
Number of Independent Living Centers Leased from NHI | 3 | 3 | ||
Number of Lease Agreements with NHI | 2 | 2 | ||
Operating Leases, Rent Expense, Minimum Rentals | $ 34,200,000 | |||
Operating Lease Additional Percentage Rent Percentage | 4.00% | |||
Operating Leases, Rent Expense | $ 9,480,000 | $ 9,178,000 | $ 28,440,000 | $ 27,533,000 |
Operating Leases, Rent Expense | $ 10,314,000 | $ 10,006,000 | $ 30,960,000 | $ 29,972,000 |
Note 5 - Long-term Leases - Fix
Note 5 - Long-term Leases - Fixed Assets Recorded Under Capital Leases (Details) - Buildings and Personal Property [Member] - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Buildings and personal property | $ 39,032 | $ 39,032 |
Accumulated amortization | (10,139) | (7,196) |
Total capital leases | $ 28,893 | $ 31,836 |
Note 5 - Long-term Leases - Fut
Note 5 - Long-term Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
2017, operating leases | $ 34,200 | |
2017, capital leases | 5,200 | |
2018, operating leases | 34,200 | |
2018, capital leases | 5,200 | |
2019, operating leases | 34,200 | |
2019, capital leases | 5,200 | |
2020, operating leases | 34,200 | |
2020, capital leases | 5,200 | |
2021, operating leases | 34,200 | |
2021, capital leases | 5,200 | |
Thereafter, operating leases | 185,300 | |
Thereafter, capital leases | 12,567 | |
Total minimum lease payments, operating leases | 356,300 | |
Total minimum lease payments, capital leases | 38,567 | |
Less: Amounts representing interest, capital leases | (7,500) | |
Present value of minimum lease payments, capital leases | 31,067 | |
Less: Current portion, capital leases | (3,429) | $ (3,279) |
Long-term capital lease obligations, capital leases | $ 27,638 | $ 30,228 |
Note 6 - Earnings Per Share (De
Note 6 - Earnings Per Share (Details Textual) - shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 11,592 | 11,592 |
Note 6 - Earnings Per Share - S
Note 6 - Earnings Per Share - Summary of Earnings and Weighted Average Number of Common Shares Used in Calculation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Employee Stock Option [Member] | ||||
Dilutive effect of options (in shares) | 23,952 | 150,395 | 23,588 | 154,113 |
Restricted Stock [Member] | ||||
Dilutive effect of options (in shares) | 1,577 | |||
Weighted average common shares outstanding (in shares) | 15,198,696 | 13,801,245 | 15,128,728 | 13,778,705 |
Net income | $ 11,110 | $ 12,567 | $ 36,675 | $ 38,167 |
Dividends to preferred stockholders | (2,152) | (6,487) | ||
Net income available to common stockholders | $ 11,110 | $ 10,415 | $ 36,675 | $ 31,680 |
Earnings per common share, basic (in dollars per share) | $ 0.73 | $ 0.75 | $ 2.42 | $ 2.30 |
Dilutive effect of contingent issuable stock (in shares) | 471,020 | 64,522 | 430,856 | |
Assumed average common shares outstanding (in shares) | 15,222,648 | 14,422,660 | 15,216,838 | 14,365,251 |
Earnings per common share, diluted (in dollars per share) | $ 0.73 | $ 0.72 | $ 2.41 | $ 2.21 |
Note 7 - Investments in Marke42
Note 7 - Investments in Marketable Securities (Details Textual) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities | $ 0 | $ 0 | |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 120,218,000 | 86,921,000 | |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 254,000 | $ 2,237,000 | |
Proceeds from Sale and Maturity of Marketable Securities | 30,963,000 | $ 39,601,000 | |
Realized Investment Gains (Losses) | $ 804,000 | $ 449,000 |
Note 7 - Investments in Marke43
Note 7 - Investments in Marketable Securities - Marketable Securities and Restricted Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Equity Securities [Member] | ||
Unrestricted investments available for sale, amortized cost | $ 30,176 | $ 30,176 |
Unrestricted investments available for sale, fair value | 147,017 | 116,168 |
Corporate Debt Securities [Member] | ||
Restricted investments available for sale, amortized cost | 65,938 | 71,960 |
Restricted investments available for sale, fair value | 67,826 | 71,143 |
Commercial Mortgage Backed Securities [Member] | ||
Restricted investments available for sale, amortized cost | 53,531 | 61,645 |
Restricted investments available for sale, fair value | 53,913 | 60,910 |
US Government Corporations and Agencies Securities [Member] | ||
Restricted investments available for sale, amortized cost | 26,816 | 21,123 |
Restricted investments available for sale, fair value | 27,188 | 21,033 |
US States and Political Subdivisions Debt Securities [Member] | ||
Restricted investments available for sale, amortized cost | 29,478 | 16,446 |
Restricted investments available for sale, fair value | 29,959 | 16,780 |
Restricted investments available for sale, amortized cost | 175,763 | 171,174 |
Investments available for sale, amortized cost | 205,939 | 201,350 |
Available-for-sale securities | $ 325,903 | $ 286,034 |
Note 7 - Investments in Marke44
Note 7 - Investments in Marketable Securities - Available for Sale Marketable Equity Securities (Details) - NHI Common Stock [Member] - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
NHI Common Stock, Shares (in shares) | 1,630,642 | 1,630,642 |
NHI Common Stock, Cost | $ 24,734 | $ 24,734 |
NHI Common Stock, Fair Value | $ 127,973 | $ 99,257 |
Note 7 - Amortized Cost and Est
Note 7 - Amortized Cost and Estimated Fair Value of Debt Securities as Available for Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Cost Value | $ 18,530 | $ 23,291 |
Fair Value | 18,581 | 23,273 |
Cost Value | 81,710 | 74,747 |
Fair Value | 82,810 | 74,671 |
Cost Value | 73,505 | 71,442 |
Fair Value | 75,474 | 70,223 |
Cost Value | 2,018 | 1,694 |
Fair Value | 2,021 | 1,699 |
Cost Value | 175,763 | 171,174 |
Fair Value | $ 178,886 | $ 169,866 |
Note 8 - Fair Value Measureme46
Note 8 - Fair Value Measurements - Summary of Fair Value Measurements by Level (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member] | ||
Available-for-sale securities | $ 147,017 | $ 116,168 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Corporate Debt Securities [Member] | ||
Available-for-sale securities | 34,538 | 32,683 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Commercial Mortgage Backed Securities [Member] | ||
Available-for-sale securities | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | US Treasury Securities [Member] | ||
Available-for-sale securities | 27,188 | 21,033 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | US States and Political Subdivisions Debt Securities [Member] | ||
Available-for-sale securities | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Cash and cash equivalents | 19,212 | 38,208 |
Restricted cash and cash equivalents | 17,158 | 11,106 |
Total financial assets | 245,113 | 219,198 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Equity Securities [Member] | ||
Available-for-sale securities | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member] | ||
Available-for-sale securities | 33,288 | 38,460 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Commercial Mortgage Backed Securities [Member] | ||
Available-for-sale securities | 53,913 | 60,910 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | US Treasury Securities [Member] | ||
Available-for-sale securities | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | US States and Political Subdivisions Debt Securities [Member] | ||
Available-for-sale securities | 29,959 | 16,780 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Cash and cash equivalents | ||
Restricted cash and cash equivalents | ||
Total financial assets | 117,160 | 116,150 |
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member] | ||
Available-for-sale securities | 147,017 | 116,168 |
Fair Value, Measurements, Recurring [Member] | Corporate Debt Securities [Member] | ||
Available-for-sale securities | 67,826 | 71,143 |
Fair Value, Measurements, Recurring [Member] | Commercial Mortgage Backed Securities [Member] | ||
Available-for-sale securities | 53,913 | 60,910 |
Fair Value, Measurements, Recurring [Member] | US Treasury Securities [Member] | ||
Available-for-sale securities | 27,188 | 21,033 |
Fair Value, Measurements, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | ||
Available-for-sale securities | 29,959 | 16,780 |
Fair Value, Measurements, Recurring [Member] | ||
Cash and cash equivalents | 19,212 | 38,208 |
Restricted cash and cash equivalents | 17,158 | 11,106 |
Total financial assets | 362,273 | 335,348 |
Available-for-sale securities | $ 325,903 | $ 286,034 |
Note 9 - Long-term Debt (Detail
Note 9 - Long-term Debt (Details Textual) - Bank of America [Member] - USD ($) $ in Millions | Oct. 07, 2015 | Oct. 22, 2014 |
London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.40% | |
Debt Instrument, Basis Spread on Base Rate | 1.00% | |
Base Rate [Member] | ||
Debt Instrument, Basis Spread on Variable Rate | 0.40% | |
Federal Funds Effective Swap Rate [Member] | ||
Debt Instrument, Basis Spread on Base Rate | 0.50% | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 175 | $ 75 |
Note 9 - Long-term Debt - Sched
Note 9 - Long-term Debt - Schedule of Debt (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Revolving Credit Facility [Member] | ||
Long-term debt, interest rate | 1.90% | |
Long-term debt maturity | 2,020 | |
Long-term debt | $ 110 | $ 110 |
Unsecured Term Note Payable [Member] | ||
Long-term debt, interest rate | 3.00% | |
Long-term debt maturity | 2,018 | |
Long-term debt | $ 10 | 10 |
Long-term debt | 120 | 120 |
Long-term debt, noncurrent | $ 120 | $ 120 |
Note 10 - Stock Repurchase Pr49
Note 10 - Stock Repurchase Program (Details Textual) | Aug. 05, 2016USD ($)shares | Sep. 30, 2016shares | Sep. 30, 2016USD ($)shares | Aug. 31, 2016USD ($) | May 07, 2015USD ($) |
Common Stock [Member] | |||||
Stock Repurchased and Retired During Period, Shares | shares | 130,000 | 0 | (130,000) | ||
Stock Repurchase Program, Authorized Amount | $ 25,000,000 | $ 25,000,000 | |||
Stock Repurchased and Retired During Period, Value | $ 8,195,000 | $ (1,000) | |||
Preferred Stock [Member] | |||||
Stock Repurchase Program, Authorized Amount | $ 25,000,000 | ||||
Stock Repurchase Program Number of Plans | 2 | ||||
Stock Repurchased and Retired During Period, Value | $ (8,195,000) |
Note 11 - Stock-based Compens50
Note 11 - Stock-based Compensation (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | May 31, 2010 | May 30, 2010 | May 31, 2005 | |
Incentive Stock Option [Member] | Maximum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |||||||
2005 Plan [Member] | Director [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 45,000 | |||||||
2005 Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,200,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 131,276 | 131,276 | ||||||
2010 Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,200,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,750,760 | 1,750,760 | 1,200,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 11,774 | |||||||
Employee Stock Purchase Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,575,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 56,774 | 56,210 | ||||||
Allocated Share-based Compensation Expense | $ 9,000 | $ 425,000 | $ 502,000 | $ 1,557,000 |
Note 11 - Stock-based Compens51
Note 11 - Stock-based Compensation - Summary of Assumptions Used to Value Options Granted (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Risk–free interest rate | 0.90% | 0.70% |
Expected volatility | 15.80% | 16.50% |
Expected life, in years | 2 years 73 days | 2 years 73 days |
Expected dividend yield | 3.10% | 2.70% |
Note 11 - Stock-based Compens52
Note 11 - Stock-based Compensation - Summary of Outstanding Stock Options (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Options outstanding, shares (in shares) | 621,390 | 954,678 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 48.15 | $ 46.92 |
Number of Shares - Options Granted (in shares) | 56,774 | 56,210 |
Weighted Average Exercise Price - Options Granted (in dollars per share) | $ 62.53 | $ 61.47 |
Number of Shares - Options Exercised (in shares) | (480,275) | (389,498) |
Weighted Average Exercise Price - Options Exercised (in dollars per share) | $ 46.81 | $ 47.06 |
Options outstanding, shares (in shares) | 197,233 | 621,390 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 55.55 | $ 48.15 |
Number of Shares - Options Forfeited (in shares) | (656) | |
Weighted Average Exercise Price - Options Forfeited (in dollars per share) | $ 46.69 | |
Options outstanding, aggregate intrinsic value | $ 2,062,000 | |
Options exercisable at March 31, 2015, shares (in shares) | 185,459 | |
Options exercisable at March 31, 2015, weighted average exercise price (in dollars per share) | $ 55.15 | |
Options exercisable at March 31, 2015, aggregate intrinsic value | $ 2,010,000 |
Note 11 - Stock-based Compens53
Note 11 - Stock-based Compensation - Options Outstanding (Details) | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Exercise Price Range 1 [Member] | |
Options outstanding (in shares) | shares | 97,500 |
Exercise prices, lower range limit (in dollars per share) | $ 44.80 |
Exercise prices, upper range limit (in dollars per share) | 52.93 |
Weighted average exercise price (in dollars per share) | $ 48.95 |
Weighted average remaining contractual life in years | 1 year 255 days |
Exercise Price Range 2 [Member] | |
Options outstanding (in shares) | shares | 99,733 |
Exercise prices, lower range limit (in dollars per share) | $ 61.25 |
Exercise prices, upper range limit (in dollars per share) | 62.78 |
Weighted average exercise price (in dollars per share) | $ 61.98 |
Weighted average remaining contractual life in years | 3 years 255 days |
Options outstanding (in shares) | shares | 197,233 |
Weighted average exercise price (in dollars per share) | $ 55.55 |
Weighted average remaining contractual life in years | 2 years 255 days |
Note 12 - Income Taxes (Details
Note 12 - Income Taxes (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earliest Tax Year [Member] | ||||
Open Tax Year | 2,012 | |||
Income Tax Expense (Benefit) | $ 4,571,000 | $ 5,744,000 | $ 20,969,000 | $ 21,638,000 |
Effective Income Tax Rate Reconciliation, Percent | 29.10% | 31.40% | 36.40% | 36.20% |
Effective Income Tax Rate Reconciliation, Benefit Resulting from Expiration of Applicable Statute Limitations, Amount | $ 1,306,000 | $ 1,715,000 | $ 1,306,000 | $ 1,715,000 |
Effective Income Tax Rate Reconciliation, Benefit Resulting from Expiration of Applicable Statute Limitations, Percent | 8.30% | 9.40% | 2.30% | 2.90% |
Note 13 - Contingencies and C55
Note 13 - Contingencies and Commitments (Details Textual) | 9 Months Ended | 12 Months Ended | 24 Months Ended | 36 Months Ended | ||
Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2010USD ($) | Dec. 31, 2007USD ($) | |
South Carolina Department of Health and Human Services [Member] | ||||||
Loss Contingency, Receivable | $ 0 | |||||
Payments for Legal Settlements | $ 6,800,000 | |||||
Long-term Line of Credit [Member] | National [Member] | National Health Care [Member] | ||||||
Long-term Line of Credit | 0 | |||||
Line of Credit Facility, Maximum Borrowing Capacity | 2,000,000 | |||||
Short-term Line of Credit [Member] | Third Party Operator [Member] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 10,000,000 | |||||
Written Notice, Number of Days | 30 days | |||||
Short-term Debt | $ 2,168,000 | |||||
Coverage Amount Per Incident [Member] | ||||||
Primary Insurance Coverage Amount Per Incident | 1,000,000 | |||||
Primary Insurance Coverage, Amount Per Location | $ 3,000,000 | |||||
Caris [Member] | ||||||
Equity Method Investment, Ownership Percentage | 75.10% | |||||
Self Insurance Reserve | $ 97,609,000 | $ 98,508,000 | $ 98,508,000 | |||
Direct Business Coverage Statutory Limits | $ 1,000,000 | |||||
Malpractice Loss Contingency, Number of Claims | 35 | |||||
Annual Excess Coverage | $ 9,000,000 | $ 4,000,000 | $ 9,000,000 | $ 7,500,000 | ||
Number of Nursing Facilities under Medicaid Cost Report Audits | 11 |