Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 01, 2015 | Jun. 30, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | SELECT MEDICAL HOLDINGS CORP | ||
Entity Central Index Key | 1320414 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $1,311,848,710 | ||
Entity Common Stock, Shares Outstanding | 131,228,508 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Cash and cash equivalents | $3,354 | $4,319 |
Accounts receivable, net of allowance for doubtful accounts of $40,815 and $46,425 in 2013 and 2014, respectively | 444,269 | 391,319 |
Current deferred tax asset | 15,991 | 17,624 |
Prepaid income taxes | 17,888 | |
Other current assets | 46,142 | 41,140 |
Total Current Assets | 527,644 | 454,402 |
Property and equipment, net | 542,310 | 509,102 |
Goodwill | 1,642,083 | 1,642,633 |
Other identifiable intangibles | 72,519 | 71,907 |
Other assets | 140,253 | 139,578 |
Total Assets | 2,924,809 | 2,817,622 |
Current Liabilities: | ||
Bank overdrafts | 21,746 | 12,506 |
Current portion of long-term debt and notes payable | 10,874 | 17,565 |
Accounts payable | 108,532 | 88,285 |
Accrued payroll | 97,090 | 90,011 |
Accrued vacation | 63,132 | 59,730 |
Accrued interest | 10,674 | 12,297 |
Accrued other | 82,376 | 90,508 |
Income taxes payable | 622 | |
Total Current Liabilities | 394,424 | 371,524 |
Long-term debt, net of current portion | 1,542,102 | 1,427,710 |
Non-current deferred tax liability | 109,203 | 96,287 |
Other non-current liabilities | 92,855 | 91,875 |
Total Liabilities | 2,138,584 | 1,987,396 |
Commitments and contingencies (Note 14) | ||
Redeemable non-controlling interests | 10,985 | 11,584 |
Stockholders' Equity: | ||
Common stock | 131 | 140 |
Capital in excess of par | 413,706 | 474,729 |
Retained earnings (accumulated deficit) | 325,678 | 311,365 |
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 739,515 | 786,234 |
Non-controlling interest | 35,725 | 32,408 |
Total Equity | 775,240 | 818,642 |
Total Liabilities and Equity | 2,924,809 | 2,817,622 |
Select | ||
Current Assets: | ||
Cash and cash equivalents | 3,354 | 4,319 |
Accounts receivable, net of allowance for doubtful accounts of $40,815 and $46,425 in 2013 and 2014, respectively | 444,269 | 391,319 |
Current deferred tax asset | 15,991 | 17,624 |
Prepaid income taxes | 17,888 | |
Other current assets | 46,142 | 41,140 |
Total Current Assets | 527,644 | 454,402 |
Property and equipment, net | 542,310 | 509,102 |
Goodwill | 1,642,083 | 1,642,633 |
Other identifiable intangibles | 72,519 | 71,907 |
Other assets | 140,253 | 139,578 |
Total Assets | 2,924,809 | 2,817,622 |
Current Liabilities: | ||
Bank overdrafts | 21,746 | 12,506 |
Current portion of long-term debt and notes payable | 10,874 | 17,565 |
Accounts payable | 108,532 | 88,285 |
Accrued payroll | 97,090 | 90,011 |
Accrued vacation | 63,132 | 59,730 |
Accrued interest | 10,674 | 12,297 |
Accrued other | 82,376 | 90,508 |
Income taxes payable | 622 | |
Total Current Liabilities | 394,424 | 371,524 |
Long-term debt, net of current portion | 1,542,102 | 1,427,710 |
Non-current deferred tax liability | 109,203 | 96,287 |
Other non-current liabilities | 92,855 | 91,875 |
Total Liabilities | 2,138,584 | 1,987,396 |
Commitments and contingencies (Note 14) | ||
Redeemable non-controlling interests | 10,985 | 11,584 |
Stockholders' Equity: | ||
Common stock | 0 | 0 |
Capital in excess of par | 885,407 | 869,576 |
Retained earnings (accumulated deficit) | -145,892 | -83,342 |
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 739,515 | 786,234 |
Non-controlling interest | 35,725 | 32,408 |
Total Equity | 775,240 | 818,642 |
Total Liabilities and Equity | $2,924,809 | $2,817,622 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $46,425 | $40,815 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 700,000,000 | 700,000,000 |
Common stock, shares issued | 131,233,308 | 140,260,968 |
Common stock, shares outstanding | 131,233,308 | 140,260,968 |
Select | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $46,425 | $40,815 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares issued | 100 | 100 |
Common stock, shares outstanding | 100 | 100 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net operating revenues | $3,065,017 | $2,975,648 | $2,948,969 |
Costs and expenses: | |||
Cost of services | 2,582,340 | 2,495,476 | 2,443,550 |
General and administrative | 85,247 | 76,921 | 66,194 |
Bad debt expense | 44,600 | 37,423 | 39,055 |
Depreciation and amortization | 68,354 | 64,392 | 63,311 |
Total costs and expenses | 2,780,541 | 2,674,212 | 2,612,110 |
Income from operations | 284,476 | 301,436 | 336,859 |
Other income and expense: | |||
Loss on early retirement of debt | -2,277 | -18,747 | -6,064 |
Equity in earnings of unconsolidated subsidiaries | 7,044 | 2,476 | 7,705 |
Interest expense | -85,446 | -87,364 | -94,950 |
Income before income taxes | 203,797 | 197,801 | 243,550 |
Income tax expense | 75,622 | 74,792 | 89,657 |
Net income | 128,175 | 123,009 | 153,893 |
Less: Net income attributable to non-controlling interests | 7,548 | 8,619 | 5,663 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 120,627 | 114,390 | 148,230 |
Income per common share: | |||
Basic | $0.91 | $0.82 | $1.05 |
Diluted | $0.91 | $0.82 | $1.05 |
Dividends per share | $0.40 | $0.30 | $1.50 |
Weighted Average Shares Outstanding | |||
Weighted average shares - basic | 129,026 | 136,879 | 138,767 |
Weighted average shares - diluted | 129,465 | 137,047 | 139,042 |
Select | |||
Net operating revenues | 3,065,017 | 2,975,648 | 2,948,969 |
Costs and expenses: | |||
Cost of services | 2,582,340 | 2,495,476 | 2,443,550 |
General and administrative | 85,247 | 76,921 | 66,194 |
Bad debt expense | 44,600 | 37,423 | 39,055 |
Depreciation and amortization | 68,354 | 64,392 | 63,311 |
Total costs and expenses | 2,780,541 | 2,674,212 | 2,612,110 |
Income from operations | 284,476 | 301,436 | 336,859 |
Other income and expense: | |||
Loss on early retirement of debt | -2,277 | -17,788 | -6,064 |
Equity in earnings of unconsolidated subsidiaries | 7,044 | 2,476 | 7,705 |
Interest expense | -85,446 | -84,954 | -83,759 |
Income before income taxes | 203,797 | 201,170 | 254,741 |
Income tax expense | 75,622 | 75,971 | 93,574 |
Net income | 128,175 | 125,199 | 161,167 |
Less: Net income attributable to non-controlling interests | 7,548 | 8,619 | 5,663 |
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | $120,627 | $116,580 | $155,504 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Equity and Income (USD $) | Comprehensive Income | Comprehensive Income | Common Stock | Common Stock | Capital in Excess of Par | Capital in Excess of Par | Retained Earnings (Accumulated Deficit) | Retained Earnings (Accumulated Deficit) | Non-controlling Interests | Non-controlling Interests | Select | Total |
In Thousands, except Share data, unless otherwise specified | Select | Select | Select | Select | Select | |||||||
Balance at Dec. 31, 2011 | $0 | $145 | $848,844 | $493,828 | $134,602 | $325,706 | $26,659 | $26,659 | $1,010,105 | $846,338 | ||
Balance (in shares) at Dec. 31, 2011 | 0 | 145,268,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | 159,222 | 151,948 | 155,504 | 148,230 | 3,718 | 3,718 | 159,222 | 151,948 | ||||
Net income - attributable to redeemable non-controlling interests | 1,945 | 1,945 | ||||||||||
Total comprehensive income | 161,167 | 153,893 | ||||||||||
Dividends declared and paid | -268,479 | -210,888 | -268,479 | -210,888 | ||||||||
Issuance and vesting of restricted stock | 4,472 | 4,472 | ||||||||||
Issuance and vesting of restricted stock (in shares) | 746,000 | 761,500 | ||||||||||
Repurchase of common shares | -5 | -27,208 | -19,689 | -46,902 | ||||||||
Repurchase of common shares (in shares) | -5,726,000 | |||||||||||
Stock option expense | 1,205 | 1,205 | ||||||||||
Exercise of stock options | 1 | 1,816 | 1,817 | |||||||||
Exercise of stock options (in shares) | 301,000 | 301,208 | ||||||||||
Federal tax benefit of losses contributed by Holdings | 3,917 | 3,917 | ||||||||||
Additional investment by Holdings | 1,817 | 1,817 | ||||||||||
Contribution related to restricted stock awards and stock option issuances by Holdings | 5,677 | 5,677 | ||||||||||
Distributions to non-controlling interests | -1,884 | -1,884 | -1,884 | -1,884 | ||||||||
Purchase of non-controlling interests | -416 | -416 | -63 | -63 | -479 | -479 | ||||||
Other | -149 | -149 | -149 | -149 | ||||||||
Balance at Dec. 31, 2012 | 0 | 141 | 859,839 | 473,697 | 21,478 | 243,210 | 28,430 | 28,430 | 909,747 | 745,478 | ||
Balance (in shares) at Dec. 31, 2012 | 0 | 140,589,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | 122,136 | 119,946 | 116,580 | 114,390 | 5,556 | 5,556 | 122,136 | 119,946 | ||||
Net income - attributable to redeemable non-controlling interests | 3,063 | 3,063 | ||||||||||
Total comprehensive income | 125,199 | 123,009 | ||||||||||
Dividends declared and paid | -226,621 | -41,961 | -226,621 | -41,961 | ||||||||
Issuance and vesting of restricted stock | 6,220 | 6,220 | ||||||||||
Issuance and vesting of restricted stock (in shares) | 953,000 | 952,500 | ||||||||||
Repurchase of common shares | -1 | -7,524 | -4,256 | -11,781 | ||||||||
Repurchase of common shares (in shares) | -1,447,000 | |||||||||||
Stock option expense | 811 | 811 | ||||||||||
Exercise of stock options | 1,525 | 1,525 | ||||||||||
Exercise of stock options (in shares) | 166,000 | 166,600 | ||||||||||
Federal tax benefit of losses contributed by Holdings | 1,179 | 1,179 | ||||||||||
Net change in dividends payable to Holdings | 5,239 | 5,239 | ||||||||||
Additional investment by Holdings | 1,525 | 1,525 | ||||||||||
Contribution related to restricted stock awards and stock option issuances by Holdings | 7,033 | 7,033 | ||||||||||
Distributions to non-controlling interests | -1,839 | -1,839 | -1,839 | -1,839 | ||||||||
Purchase of non-controlling interests | 261 | 261 | 261 | 261 | ||||||||
Other | -18 | -18 | -18 | -18 | ||||||||
Balance at Dec. 31, 2013 | 0 | 140 | 869,576 | 474,729 | -83,342 | 311,365 | 32,408 | 32,408 | 818,642 | 818,642 | ||
Balance (in shares) at Dec. 31, 2013 | 0 | 140,261,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | 126,765 | 126,765 | 120,627 | 120,627 | 6,138 | 6,138 | 126,765 | 126,765 | ||||
Net income - attributable to redeemable non-controlling interests | 1,410 | 1,410 | ||||||||||
Total comprehensive income | 128,175 | 128,175 | ||||||||||
Dividends declared and paid | -184,100 | -53,366 | -184,100 | -53,366 | ||||||||
Issuance and vesting of restricted stock | 2 | 12,078 | 12,080 | |||||||||
Issuance and vesting of restricted stock (in shares) | 1,586,000 | 1,585,775 | ||||||||||
Tax benefit from stock based awards | 3,119 | 3,119 | 3,119 | 3,119 | ||||||||
Repurchase of common shares | -12 | -76,851 | -53,871 | -130,734 | ||||||||
Repurchase of common shares (in shares) | -11,589,000 | |||||||||||
Stock option expense | 698 | 698 | ||||||||||
Exercise of stock options | 1 | 7,354 | 7,355 | |||||||||
Exercise of stock options (in shares) | 975,000 | 974,969 | ||||||||||
Additional investment by Holdings | 7,355 | 7,355 | ||||||||||
Contribution related to restricted stock awards and stock option issuances by Holdings | 12,778 | 12,778 | ||||||||||
Distributions to non-controlling interests | -2,893 | -2,893 | -2,893 | -2,893 | ||||||||
Issuance of non-controlling interest | 1,693 | 1,693 | 1,693 | 1,693 | ||||||||
Purchase of non-controlling interests | -7,421 | -7,421 | -1,360 | -1,360 | -8,781 | -8,781 | ||||||
Other | 923 | 923 | -261 | -261 | 662 | 662 | ||||||
Balance at Dec. 31, 2014 | $0 | $131 | $885,407 | $413,706 | ($145,892) | $325,678 | $35,725 | $35,725 | $775,240 | $775,240 | ||
Balance (in shares) at Dec. 31, 2014 | 0 | 131,233,000 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities | |||
Net income | $128,175 | $123,009 | $153,893 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Distributions from unconsolidated subsidiaries | 11,954 | ||
Depreciation and amortization | 68,354 | 64,392 | 63,311 |
Provision for bad debts | 44,600 | 37,423 | 39,055 |
Equity in earnings of unconsolidated subsidiaries | -7,044 | -2,476 | -7,705 |
Loss on early retirement of debt | 2,277 | 18,747 | 6,064 |
Gain from sale of assets | -1,048 | -581 | -5,906 |
Non-cash stock compensation expense | 11,186 | 7,033 | 5,677 |
Amortization of debt discount, premium and issuance costs | 7,553 | 8,433 | 7,566 |
Deferred income taxes | 14,311 | 7,032 | 7,909 |
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | |||
Accounts receivable | -97,802 | -67,145 | 15,158 |
Other current assets | -1,729 | -8,167 | -1,607 |
Other assets | -103 | -3,484 | 5,862 |
Accounts payable | 5,997 | -1,283 | -6,117 |
Accrued expenses | -16,039 | 9,590 | 15,522 |
Net cash provided by operating activities | 170,642 | 192,523 | 298,682 |
Investing activities | |||
Purchases of property and equipment | -95,246 | -73,660 | -68,185 |
Investment in businesses | -4,634 | -34,893 | -14,689 |
Acquisition of businesses, net of cash acquired | -1,211 | -1,665 | -6,043 |
Proceeds from sale of assets | 2,912 | 16,511 | |
Net cash used in investing activities | -101,091 | -107,306 | -72,406 |
Financing activities | |||
Borrowings on revolving credit facility | 910,000 | 690,000 | 495,000 |
Payments on revolving credit facility | -870,000 | -800,000 | -405,000 |
Borrowings on credit facility term loans, net of discount | 298,500 | 266,750 | |
Payments on credit facility term loans | -33,994 | -596,720 | -9,875 |
Issuance of 6.375% senior notes, includes premium | 111,650 | 600,000 | |
Repurchase of senior floating rate notes | -167,300 | ||
Repurchase of 7 5/8% senior subordinated notes | -70,000 | -278,495 | |
Borrowings of other debt | 9,076 | 15,310 | 8,281 |
Principal payments on other debt | -14,673 | -10,834 | -10,295 |
Debt issuance costs | -4,434 | -18,914 | -6,527 |
Proceeds from (repayment of) bank overdrafts | 9,240 | -5,330 | 1,227 |
Purchase of non-controlling interests | -9,961 | ||
Proceeds from issuance of non-controlling interests | 185 | ||
Dividends paid to common stockholders | -53,366 | -41,961 | -210,888 |
Tax benefit from stock based awards | 3,119 | ||
Repurchase of common stock | -130,734 | -11,781 | -46,902 |
Proceeds from issuance of common stock | 7,355 | 1,525 | 1,817 |
Distributions to non-controlling interests | -3,979 | -3,537 | -3,268 |
Net cash used in financing activities | -70,516 | -121,042 | -198,175 |
Net increase (decrease) in cash and cash equivalents | -965 | -35,825 | 28,101 |
Cash and cash equivalents at beginning of period | 4,319 | 40,144 | 12,043 |
Cash and cash equivalents at end of period | 3,354 | 4,319 | 40,144 |
Supplemental Cash Flow Information | |||
Cash paid for interest | 78,812 | 89,061 | 80,722 |
Cash paid for taxes | 77,771 | 64,963 | 77,614 |
Select | |||
Operating activities | |||
Net income | 128,175 | 125,199 | 161,167 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Distributions from unconsolidated subsidiaries | 11,954 | ||
Depreciation and amortization | 68,354 | 64,392 | 63,311 |
Provision for bad debts | 44,600 | 37,423 | 39,055 |
Equity in earnings of unconsolidated subsidiaries | -7,044 | -2,476 | -7,705 |
Loss on early retirement of debt | 2,277 | 17,788 | 6,064 |
Gain from sale of assets | -1,048 | -581 | -5,906 |
Non-cash stock compensation expense | 11,186 | 7,033 | 5,677 |
Amortization of debt discount, premium and issuance costs | 7,553 | 8,344 | 7,190 |
Deferred income taxes | 14,311 | 7,032 | 7,909 |
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | |||
Accounts receivable | -97,802 | -67,145 | 15,158 |
Other current assets | -1,729 | -8,167 | -1,607 |
Other assets | -103 | -3,484 | 5,877 |
Accounts payable | 5,997 | -1,283 | -6,117 |
Accrued expenses | -16,039 | 14,027 | 19,298 |
Net cash provided by operating activities | 170,642 | 198,102 | 309,371 |
Investing activities | |||
Purchases of property and equipment | -95,246 | -73,660 | -68,185 |
Investment in businesses | -4,634 | -34,893 | -14,689 |
Acquisition of businesses, net of cash acquired | -1,211 | -1,665 | -6,043 |
Proceeds from sale of assets | 2,912 | 16,511 | |
Net cash used in investing activities | -101,091 | -107,306 | -72,406 |
Financing activities | |||
Borrowings on revolving credit facility | 910,000 | 690,000 | 495,000 |
Payments on revolving credit facility | -870,000 | -800,000 | -405,000 |
Borrowings on credit facility term loans, net of discount | 298,500 | 266,750 | |
Payments on credit facility term loans | -33,994 | -596,720 | -9,875 |
Issuance of 6.375% senior notes, includes premium | 111,650 | 600,000 | |
Repurchase of 7 5/8% senior subordinated notes | -70,000 | -278,495 | |
Borrowings of other debt | 9,076 | 15,310 | 8,281 |
Principal payments on other debt | -14,673 | -10,834 | -10,295 |
Debt issuance costs | -4,434 | -18,914 | -6,527 |
Proceeds from (repayment of) bank overdrafts | 9,240 | -5,330 | 1,227 |
Purchase of non-controlling interests | -9,961 | ||
Proceeds from issuance of non-controlling interests | 185 | ||
Equity investment by Holdings | 7,355 | 1,525 | 1,817 |
Dividends paid to common stockholders | -184,100 | -226,621 | -268,479 |
Tax benefit from stock based awards | 3,119 | ||
Distributions to non-controlling interests | -3,979 | -3,537 | -3,268 |
Net cash used in financing activities | -70,516 | -126,621 | -208,864 |
Net increase (decrease) in cash and cash equivalents | -965 | -35,825 | 28,101 |
Cash and cash equivalents at beginning of period | 4,319 | 40,144 | 12,043 |
Cash and cash equivalents at end of period | 3,354 | 4,319 | 40,144 |
Supplemental Cash Flow Information | |||
Cash paid for interest | 78,812 | 83,482 | 70,047 |
Cash paid for taxes | $77,771 | $64,963 | $77,614 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
6.375% senior notes | |||
Long-term debt and notes payable | |||
Interest rate of debt (as a percent) | 6.38% | 6.38% | |
7 5/8% senior subordinated notes | |||
Long-term debt and notes payable | |||
Interest rate of debt (as a percent) | 7.63% | 7.63% |
Organization_and_Significant_A
Organization and Significant Accounting Policies | 12 Months Ended | ||
Dec. 31, 2014 | |||
Organization and Significant Accounting Policies | |||
Organization and Significant Accounting Policies | 1. Organization and Significant Accounting Policies | ||
Business Description | |||
Select Medical Corporation ("Select") was formed in December 1996 and commenced operations during February 1997 upon the completion of its first acquisition. Select Medical Holdings Corporation ("Holdings") was formed in October 2004 for the purpose of affecting a leveraged buyout of Select, which was a publicly traded entity. On February 24, 2005, Select merged with a subsidiary of Holdings, which resulted in Select becoming a wholly-owned subsidiary of Holdings (the "Merger"). On September 30, 2009 Holdings completed its initial public offering of common stock. Generally accepted accounting principles ("GAAP") require that any amounts recorded or incurred (such as goodwill and compensation expense) by the parent as a result of the Merger or for the benefit of the subsidiary be "pushed down" and recorded in Select's consolidated financial statements. Holdings and Select and their subsidiaries are collectively referred to as the "Company." The consolidated financial statements of Holdings include the accounts of its wholly-owned subsidiary Select. Holdings conducts substantially all of its business through Select and its subsidiaries. | |||
The Company provides long term acute care hospital services and inpatient acute rehabilitative hospital care through its specialty hospital segment and provides physical, occupational and speech rehabilitation services through its outpatient rehabilitation segment. The Company's specialty hospital segment consists of hospitals designed to serve the needs of long term stay acute patients and hospitals designed to serve patients that require intensive medical rehabilitation care. Patients are typically admitted to the Company's specialty hospitals from general acute care hospitals. These patients have specialized needs, and serious and often complex medical conditions such as respiratory failure, neuromuscular disorders, traumatic brain and spinal cord injuries, strokes, non-healing wounds, cardiac disorders, renal disorders and cancer. The Company's outpatient rehabilitation segment consists of clinics and contract services that provide physical, occupational and speech rehabilitation services. The Company's outpatient rehabilitation patients are typically diagnosed with musculoskeletal impairments that restrict their ability to perform normal activities of daily living. The Company operated 122, 123 and 129 specialty hospitals at December 31, 2012, 2013 and 2014, respectively. At December 31, 2012, 2013 and 2014, the Company operated 979, 1,006, and 1,023 outpatient clinics, respectively. At December 31, 2014, the Company had facilities in 41 states and the District of Columbia. | |||
Principles of Consolidation | |||
The consolidated financial statements include the accounts of the Company, its majority owned subsidiaries, limited liability companies and limited partnerships the Company and its subsidiaries control through ownership of general and limited partnership or membership interests. All significant intercompany balances and transactions are eliminated in consolidation. | |||
Use of Estimates | |||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. | |||
Cash and Cash Equivalents | |||
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents are stated at cost which approximates market value. | |||
Accounts Receivable and Allowance for Doubtful Accounts | |||
The Company reports accounts receivable at estimated net realizable values. Substantially all of the Company's accounts receivable are related to providing healthcare services to patients whose costs are primarily paid by federal and state governmental authorities, managed care health plans, commercial insurance companies and workers' compensation programs. Collection of these accounts receivable is the Company's primary source of cash and is critical to its operating performance. The Company's primary collection risks relate to non-governmental payors who insure these patients and deductibles, co-payments and amounts owed by the patient. Deductibles, co-payments and amounts owed by the patient are an immaterial portion of the Company's net accounts receivable balance and accounted for approximately 0.3% and 0.2% of the net accounts receivable balance before doubtful accounts at December 31, 2013 and 2014, respectively. The Company's general policy is to verify insurance coverage prior to the date of admission for a patient admitted to the Company's hospitals or in the case of the Company's outpatient rehabilitation clinics, the Company verifies insurance coverage prior to their first therapy visit. The Company's estimate for the allowance for doubtful accounts is calculated by providing a reserve allowance based upon the age of an account balance. Generally the Company has reserved as uncollectible all governmental accounts over 365 days and non-governmental accounts over 180 days from discharge. This method is monitored based on historical cash collections experience. Collections are impacted by the effectiveness of the Company's collection efforts with non-governmental payors and regulatory or administrative disruptions with the fiscal intermediaries that pay the Company's governmental receivables. Uncollected accounts are written off the balance sheet when they are turned over to an outside collection agency, or when management determines that the balance is uncollectible, whichever occurs first. | |||
Property and Equipment | |||
Property and equipment are stated at cost net of accumulated depreciation. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets or the term of the lease, as appropriate. The general range of useful lives is as follows: | |||
Leasehold improvements | 5 – 15 years | ||
Furniture and equipment | 3 – 20 years | ||
Buildings | 40 years | ||
Building Improvements | 5 – 25 years | ||
Land Improvements | 2 – 25 years | ||
The Company reviews the realizability of long-lived assets whenever events or circumstances occur which indicate recorded costs may not be recoverable. Gains or losses related to the retirement or disposal of property and equipment are reported as a component of income from operations. | |||
Concentration of Credit Risk | |||
Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash balances and trade receivables. The Company invests its excess cash with large financial institutions. The Company grants unsecured credit to its patients, most of who reside in the service area of the Company's facilities and are insured under third-party payor agreements. Because of the geographic diversity of the Company's facilities and non-governmental third-party payors, Medicare represents the Company's only significant concentration of credit risk. | |||
Income Taxes | |||
Deferred tax assets and liabilities are recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. As part of the process of preparing its consolidated financial statements, the Company estimates income taxes based on its actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for book and tax purposes. The Company also recognizes as deferred tax assets the future tax benefits from net operating loss carry forwards. The Company evaluates the realizability of these deferred tax assets by assessing their valuation allowances and by adjusting the amount of such allowances, if necessary. Among the factors used to assess the likelihood of realization are projections of future taxable income streams, the expected timing of the reversals of existing temporary differences, and the impact of tax planning strategies that could be implemented to avoid the potential loss of future tax benefits. | |||
Reserves for uncertain tax positions are established for exposure items related to various federal and state tax matters. Income tax reserves are recorded when an exposure is identified and when, in the opinion of management, it is more likely than not that a tax position will not be sustained and the amount of the liability can be estimated. | |||
Intangible Assets | |||
Goodwill and certain other indefinite-lived intangible assets are not amortized, but instead are subject to periodic impairment evaluations. In performing the quantitative periodic impairment tests, the fair value of the reporting unit is compared to its carrying value, including goodwill and other intangible assets. If the carrying value exceeds the fair value, an impairment condition exists, which results in an impairment loss equal to the excess carrying value. | |||
To determine the fair value of its reporting units, the Company uses a discounted cash flow approach. Included in this analysis are assumptions regarding revenue growth rate, future Adjusted EBITDA margin estimates, future general and administrative expense rates and the industry's weighted average cost of capital and industry specific market comparable Adjusted EBITDA multiples. The Company also must estimate residual values at the end of the forecast period and future capital expenditure requirements. Each of these assumptions requires the Company to use its knowledge of (1) its industry, (2) its recent transactions, and (3) reasonable performance expectations for its operations. If any one of the above assumptions changes or fails to materialize, the resulting decline in the Company's estimated fair value could result in a material impairment charge to the goodwill associated with any one of the reporting units. | |||
Impairment tests are required to be conducted at least annually, or when events or conditions occur that might suggest a possible impairment. These events or conditions include, but are not limited to, a significant adverse change in the business environment, regulatory environment or legal factors; a current period operating or cash flow loss combined with a history of such losses or a projection of continuing losses; or a sale or disposition of a significant portion of a reporting unit. The occurrence of one of these events or conditions could significantly impact an impairment assessment, necessitating an impairment charge. For purposes of goodwill impairment assessment, the Company has defined its reporting units as specialty hospitals, outpatient rehabilitation clinics and contract therapy with goodwill having been allocated among reporting units based on the relative fair value of those divisions when the Merger occurred in 2005 and based on subsequent acquisitions and dispositions. The Company's most recent impairment assessment was completed during the fourth quarter of 2014 utilizing financial information as of October 1, 2014 and indicated that there was no impairment with respect to goodwill or other recorded intangible assets. | |||
Identifiable assets and liabilities acquired in connection with business combinations accounted for under the purchase method are recorded at their respective fair values. Deferred income taxes have been recorded to the extent of differences between the fair value and the tax basis of the assets acquired and liabilities assumed. Company management has allocated the intangible assets between identifiable intangibles and goodwill. At December 31, 2014, intangible assets other than goodwill consist of the values assigned to trademarks, certificates of need and accreditations. Management believes that the estimated useful lives established are reasonable based on the economic factors applicable to each of the intangible assets. | |||
The approximate useful life of each class of intangible assets is as follows: | |||
Trademarks | Indefinite | ||
Certificates of need | Indefinite | ||
Accreditations | Indefinite | ||
The Company reviews the realizability of intangible assets whenever events or circumstances occur which indicate recorded amounts may not be recoverable. | |||
If the expected future cash flows (undiscounted) are less than the carrying amount of such assets, the Company recognizes an impairment loss for the difference between the carrying amount of the assets and their estimated fair value. | |||
Deferred Financing Costs | |||
The Company has incurred debt issuance costs related to indebtedness which are recognized as other assets in the consolidated balance sheet. Debt issuance costs are subsequently amortized and recognized as interest expense using the effective interest method over the term of the related indebtedness. Whenever indebtedness is modified from its original terms an evaluation is made whether an accounting modification or accounting extinguishment has occurred in order to determine the accounting treatment for debt issuance costs related to the debt modification. | |||
Due to Third-Party Payors | |||
Due to third-party payors represents the difference between amounts received under interim payment plans from Medicare and Medicaid for services rendered and amounts estimated to be reimbursed by those third-party payors upon settlement of cost reports. | |||
Insurance Risk Programs | |||
Under a number of the Company's insurance programs, which include the Company's employee health insurance program, its workers' compensation and professional malpractice liability insurance programs, the Company is liable for a portion of its losses. In these situations the Company accrues for its losses under an occurrence-based approach whereby the Company estimates the losses that will be incurred in a respective accounting period and accrues that estimated liability using actuarial methods. These programs are monitored quarterly and estimates are revised as necessary to take into account additional information. Provisions for losses for professional liability risks retained by the Company at December 31, 2013 and 2014 have been discounted at 3%. At December 31, 2013 and 2014, respectively, the Company had recorded a liability of $103.4 million and $101.9 million related to these programs. If the Company did not discount the provisions for losses for professional liability risks, the aggregate liability for all of the insurance risk programs would be approximately $106.8 million and $105.5 million at December 31, 2013 and 2014, respectively. | |||
Equity Method Investments | |||
Investments in equity method investees are accounted for using the equity method based upon the level of ownership and/or the Company's ability to exercise significant influence over the operating and financial policies of the investee. Investments of this nature are recorded at original cost and adjusted periodically to recognize the Company's proportionate share of the investees' net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceeds its carrying amount, the investment balance is reduced to zero. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company's share of that net income exceeds the share of the net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. The Company evaluates its investments in companies accounted for using the equity method for impairment when there is evidence or indicators that a decrease in value may be other than temporary. The Company's Other Assets are primarily composed of equity method investments as of December 31, 2013 and 2014. The Company's equity method investments consist principally of non-consolidating interests in inpatient and outpatient rehabilitation businesses. These rehabilitation businesses include a 49.0% non-consolidating interest in BIR, JV, LLP; a 49.0% non-consolidating interest in OHRH, LLC, a 49.0% non-consolidating interest in GlobalRehab — Scottsdale, LLC, a 50.0% non-consolidating interest in Rehabilitation Institute of Denton, LLC, and a 49.0% non-consolidating interest in ES Rehabilitation, LLC as of December 31, 2013 and 2014. The Company's equity method investments had equity in earnings of unconsolidated subsidiaries of $7.7 million, $2.5 million and $7.0 million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||
Non-Controlling Interests | |||
The interests held by other parties in subsidiaries, limited liability companies and limited partnerships owned and controlled by the Company are generally reported as a component of stockholders' equity. Some of those minority ownership interests consist of outside owners that have certain "put rights," that are currently exercisable, and that, if exercised, require the Company to purchase the minority member's interest. These redeemable non-controlling interests that are currently redeemable or considered probable of becoming redeemable have been adjusted to their approximate redemption values and are reported outside of the stockholders' equity section. As of December 31, 2013 and 2014, the Company believes the redemption values of the non-controlling ownership interests approximates the fair value of those interests classified as redeemable non-controlling interests. The redeemable non-controlling interests' balances reported on our consolidated balance sheets were $11.6 million and $11.0 million as of December 31, 2013 and 2014, respectively. The non-controlling interests' balances reported in the stockholders' equity section of our consolidated balance sheets were $32.4 million and $35.7 million as of December 31, 2013 and 2014, respectively. | |||
Net income attributable to non-controlling interests was $5.7 million, $8.6 million and $7.5 million for the years ended December 31, 2012, 2013, and 2014, respectively. Non-controlling interests reported in the consolidated statement of operations and comprehensive income reflect the respective interests in the income or loss of the subsidiaries, attributable to the other parties, the effect of which is removed from the Company's consolidated statement of operations and comprehensive income. | |||
Revenue Recognition | |||
Net operating revenues consists primarily of patient service revenues and revenues generated from therapy services provided to healthcare institutions under contractual arrangements and are recognized as services are rendered. | |||
Patient service revenue is reported net of provisions for contractual allowances from third-party payors and patients. The Company has agreements with third-party payors that provide for payments to the Company at amounts different from its established billing rates. The differences between the estimated program reimbursement rates and the standard billing rates are accounted for as contractual adjustments, which are deducted from gross revenues to arrive at net operating revenues. Payment arrangements include prospectively determined rates per discharge, reimbursed costs, discounted charges, per diem and per visit payments. Retroactive adjustments are accrued on an estimated basis in the period the related services are rendered and adjusted in future periods as final settlements are determined. Accounts receivable resulting from such payment arrangements are recorded net of contractual allowances. | |||
A significant portion of the Company's net operating revenues are generated directly from the Medicare program. Net operating revenues generated directly from the Medicare program represented approximately 47%, 46% and 45% of the Company's net operating revenues for the years ended December 31, 2012, 2013 and 2014, respectively. Approximately 32% of the Company's accounts receivable (after allowances for contractual adjustments but before doubtful accounts) at both December 31, 2013 and 2014, are from Medicare. As a provider of services to the Medicare program, the Company is subject to extensive regulations. The inability of any of the Company's specialty hospitals or clinics to comply with regulations can result in significant changes in that specialty hospital's or clinic's net operating revenues generated from the Medicare program. | |||
Revenues generated under contractual arrangements are comprised primarily of billings for services rendered to nursing homes, hospitals, schools and other third parties. | |||
Stock Based Compensation | |||
The Company measures the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognizes the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements comprise both stock options and restricted share plans. Employee stock options are valued using the Black-Scholes option valuation method which uses assumptions that relate to the expected volatility of the Company's common stock, the expected dividend yield of the Company's stock, the expected life of the options and the risk free interest rate. Such compensation amounts are amortized over the respective vesting periods or periods of service of the option grant. The Company values restricted stock grants by using the closing market price of its stock on the date of grant. | |||
Recent Accounting Pronouncements | |||
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, which supersedes most of the current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. This guidance is effective for the Company in the first quarter of 2017 and early application is not permitted. Entities must adopt the new guidance using one of two retrospective application methods. The Company is currently evaluating the standard to determine the impact of its adoption on the consolidated financial statements. | |||
In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies the related disclosure requirements. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that represents a strategic shift that has, or will have, a major effect on an entity's operations and financial results. The revised guidance is effective for annual fiscal periods beginning after December 15, 2014. Early adoption is permitted and the Company intends to prospectively adopt ASU No. 2014-08, as applicable. | |||
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2014 | |
Acquisitions | |
Acquisitions | 2. Acquisitions |
The Company acquired interests in several businesses, consisting principally of inpatient and outpatient rehabilitation businesses, during each of the years ended December 31, 2012, 2013 and 2014. | |
For the year ended December 31, 2012 the Company gave total consideration of $10.5 million, including cash of $6.0 million (net of cash acquired) and non-controlling interests, for net assets consisting principally of accounts receivable, and property and equipment with an aggregate fair value of $1.3 million and recognized goodwill of $9.2 million. | |
For the year ended December 31, 2013 the Company gave total consideration of $5.6 million, including cash of $1.7 million (net of cash acquired) and non-controlling interests, for net assets consisting principally of accounts receivable, and property and equipment with an aggregate fair value of $3.5 million and recognized goodwill of $2.1 million. | |
For the year ended December 31, 2014 the Company gave total consideration of $3.2 million, including cash of $1.1 million (net of cash acquired) and non-controlling interests, for net assets consisting principally of accounts receivable, and property and equipment with an aggregate fair value of $1.3 million and recognized goodwill of $1.9 million. | |
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property and Equipment | ||||||||
Property and Equipment | 3. Property and Equipment | |||||||
Property and equipment consists of the following: | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
(in thousands) | ||||||||
Land | $ | 68,492 | $ | 71,635 | ||||
Leasehold improvements | 146,117 | 155,648 | ||||||
Buildings | 368,968 | 396,228 | ||||||
Furniture and equipment | 256,079 | 272,919 | ||||||
Construction-in-progress | 26,639 | 41,230 | ||||||
| | | | | | | | |
866,295 | 937,660 | |||||||
Less: accumulated depreciation | 357,193 | 395,350 | ||||||
| | | | | | | | |
Total property and equipment | $ | 509,102 | $ | 542,310 | ||||
| | | | | | | | |
| | | | | | | | |
Depreciation expense was $62.5 million, $63.9 million and $67.9 million for the years ended December 31, 2012, 2013 and 2014, respectively. | ||||||||
Intangible_Assets
Intangible Assets | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Intangible Assets | |||||||||||
Intangible Assets | 4. Intangible Assets | ||||||||||
The gross carrying amounts of the Company's indefinite-lived intangible assets consist of the following: | |||||||||||
December 31, | |||||||||||
2013 | 2014 | ||||||||||
(in thousands) | |||||||||||
Goodwill | $ | 1,642,633 | $ | 1,642,083 | |||||||
Trademarks | 57,709 | 57,709 | |||||||||
Certificates of need | 12,115 | 12,727 | |||||||||
Accreditations | 2,083 | 2,083 | |||||||||
| | | | | | | | ||||
Total | $ | 1,714,540 | $ | 1,714,602 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
The Company's accreditations and trademarks have renewal terms. The costs to renew these intangibles are expensed as incurred. At December 31, 2014, the accreditations and trademarks have a weighted average time until next renewal of 1.5 years and 5.5 years, respectively. | |||||||||||
The changes in the carrying amount of goodwill for the Company's reportable segments for the years ended December 31, 2013 and 2014 are as follows: | |||||||||||
Specialty | Outpatient | Total | |||||||||
Hospitals | Rehabilitation | ||||||||||
(in thousands) | |||||||||||
Balance as of January 1, 2013 | $ | 1,333,220 | $ | 307,314 | $ | 1,640,534 | |||||
Goodwill acquired during year | 1,395 | 837 | 2,232 | ||||||||
Purchase accounting adjustment | — | (133 | ) | (133 | ) | ||||||
| | | | | | | | | | | |
Balance as of December 31, 2013 | $ | 1,334,615 | $ | 308,018 | $ | 1,642,633 | |||||
Goodwill acquired during year | 855 | 1,011 | 1,866 | ||||||||
Goodwill allocated to contributed business | — | (2,406 | ) | (2,406 | ) | ||||||
Purchase accounting adjustment | (10 | ) | — | (10 | ) | ||||||
| | | | | | | | | | | |
Balance as of December 31, 2014 | $ | 1,335,460 | $ | 306,623 | $ | 1,642,083 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
LongTerm_Debt_and_Notes_Payabl
Long-Term Debt and Notes Payable | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Long-Term Debt and Notes Payable | ||||||||
Long Term Debt and Notes Payable | 5. Long-Term Debt and Notes Payable | |||||||
The components of long-term debt and notes payable are shown in the following tables: | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
(in thousands) | ||||||||
6.375% senior notes(1) | $ | 600,000 | $ | 711,465 | ||||
Senior secured credit facilities: | ||||||||
Revolving loan | 20,000 | 60,000 | ||||||
Term loans(2) | 807,815 | 775,996 | ||||||
Other | 17,460 | 5,515 | ||||||
| | | | | | | | |
Total debt | 1,445,275 | 1,552,976 | ||||||
Less: current maturities | 17,565 | 10,874 | ||||||
| | | | | | | | |
Total long-term debt | $ | 1,427,710 | $ | 1,542,102 | ||||
| | | | | | | | |
| | | | | | | | |
-1 | Includes unamortized premium of $1.5 million at December 31, 2014. | |||||||
-2 | Includes unamortized discounts of $6.3 million and $4.2 million at December 31, 2013 and 2014, respectively. | |||||||
Senior Secured Credit Facilities | ||||||||
On June 1, 2011, Select entered into its existing senior secured credit agreement that provided for $1.15 billion in senior secured credit facilities. The following discussion summarizes amendments and significant transactions affecting its senior secured credit facilities. | ||||||||
On August 13, 2012, Select entered into an additional credit extension amendment to its senior secured credit facilities providing for a $275.0 million series A term loan at the same interest rate and with the same term as the original term loan. | ||||||||
On February 20, 2013, Select entered into a credit extension amendment to its senior secured credit facilities providing for a $300.0 million series B term loan. Select used the borrowings under the series B term loan to redeem all of its outstanding 75/8% senior subordinated notes due 2015 on March 22, 2013, to finance Holdings' redemption of all of its senior floating rate notes due 2015 on March 22, 2013 and to repay a portion of the balance outstanding under Select's revolving credit facility. | ||||||||
On May 28, 2013, Select issued and sold $600.0 million aggregate principal amount of 6.375% senior notes due June 1, 2021. Select used the proceeds of the 6.375% senior notes to pay a portion of the amounts then outstanding on the original term loan and the series A term loan and to pay related fees and expenses. | ||||||||
On June 3, 2013, Select amended its existing senior secured credit facilities in order to, among other things: | ||||||||
• | extend the maturity date on $293.3 million of its $300.0 million revolving credit facility from June 1, 2016 to March 1, 2018; | |||||||
• | convert the remaining original term loan and series A term loan to a new series C term loan, and lower the interest rate payable on the series C term loan from Adjusted LIBO plus 3.75%, or Alternate Base Rate plus 2.75%, to Adjusted LIBO plus 3.00%, or Alternate Base Rate plus 2.00%, and amend the provision of the series C term loan from providing that Adjusted LIBO will at no time be less than 1.75% to providing that Adjusted LIBO will at no time be less than 1.00%; | |||||||
• | lower the interest rate payable on the series B term loan from Adjusted LIBO plus 3.75%, or Alternate Base Rate plus 2.75%, to Adjusted LIBO plus 3.25%, or Alternate Base Rate plus 2.25%; | |||||||
• | amend the restrictive covenants governing the senior secured credit facilities in order to allow for unlimited restricted payments so long as there is no event of default under the senior secured credit facilities and the total pro forma ratio of total indebtedness to Consolidated EBITDA (as defined in the senior secured credit facilities) is less than or equal to 2.75 to 1.00; and | |||||||
• | amend the definition of "Available Amount" in a manner the effect of which was to increase the amount available for investments, restricted payments and payment of specified indebtedness. | |||||||
On March 4, 2014, Select made a principal prepayment of $34.0 million associated with its term loans in accordance with the provision in its senior secured credit facilities that requires mandatory prepayments of term loans resulting from excess cash flow as defined in the senior secured credit facilities. | ||||||||
On March 4, 2014, Select amended its senior secured credit facilities in order to, among other things: | ||||||||
• | convert the remaining series B term loan to a new series D term loan, and lower the interest rate payable on the series D term loan from Adjusted LIBO plus 3.25%, or Alternate Base Rate plus 2.25%, to Adjusted LIBO plus 2.75%, or Alternate Base Rate plus 1.75%; | |||||||
• | set the maturity date of the series D term loan at December 20, 2016; | |||||||
• | convert the remaining series C term loan to a new series E term loan, and lower the interest rate payable on the series E term loan from Adjusted LIBO plus 3.00% (subject to an Adjusted LIBO rate floor of 1.00%), or Alternate Base Rate plus 2.00%, to Adjusted LIBO plus 2.75% (subject to an Adjusted LIBO rate floor of 1.00%), or Alternate Base Rate plus 1.75%; | |||||||
• | set the maturity date of the series E term loan at June 1, 2018; | |||||||
• | beginning with the quarter ending March 31, 2014, increase the quarterly compliance threshold set forth in the leverage ratio financial maintenance covenant to a level of 5.00 to 1.00 from 4.50 to 1.00; | |||||||
• | provide for a prepayment premium of 1.00% if the senior secured credit facilities are amended at any time prior to March 4, 2015 in the case of the series E term loans and such amendment reduces the yield applicable to such loans; and | |||||||
• | amend the definition of "Available Amount" in a manner the effect of which was to increase the amount available for investments, restricted payments and the payment of specified indebtedness. | |||||||
On October 23, 2014, Select entered into two additional credit extension amendments, one of which extended the maturity date on $6.75 million in aggregate principal of revolving commitments from June 1, 2016 to March 1, 2018, the second of which added $50.0 million in incremental revolving commitments that mature on March 1, 2018. | ||||||||
At December 31, 2014, Select's senior secured credit facilities provide for senior secured financing consisting of: | ||||||||
• | a $350.0 million, revolving credit facility which matures on March 1, 2018, including a $75.0 million sublimit for the issuance of standby letters of credit and a $25.0 million sublimit for swingline loans; | |||||||
• | a $284.6 million series D term loan, maturing on December 20, 2016; and | |||||||
• | a $495.6 million series E term loan, maturing on June 1, 2018. | |||||||
The term loans amortize quarterly in the amount of 0.25% of the aggregate principal amount, subject to mandatory prepayment provisions. | ||||||||
All borrowings under Select's senior secured credit facilities are subject to the satisfaction of required conditions, including the absence of a default at the time of and after giving effect to such borrowing and the accuracy of the representations and warranties of the borrowers. | ||||||||
The interest rates per annum applicable to borrowings under Select's senior secured credit facilities are, at its option, equal to either an Alternate Base Rate or an Adjusted LIBO rate for a one, two, three or six month interest period, or a nine or twelve month period if available, in each case, plus an applicable margin percentage. The Alternate Base Rate is the greatest of (1) JPMorgan Chase Bank, N.A.'s prime rate, (2) one-half of 1% over the weighted average of rates on overnight Federal funds as published by the Federal Reserve Bank of New York and (3) the Adjusted LIBO rate from time to time for an interest period of one month, plus 1.00%. The Adjusted LIBO rate is, with respect to any interest period, the London interbank offered rate for such interest period, adjusted for any applicable statutory reserve requirements. | ||||||||
Borrowings under the series D term loan bear interest at a rate equal to Adjusted LIBO plus 2.75%, or Alternate Base Rate plus 1.75%. Borrowings under the series E term loan bear interest at a rate equal to Adjusted LIBO plus 2.75%, or Alternate Base Rate plus 1.75%. The Adjusted LIBO for the series E term loan will at no time be less than 1.00%. | ||||||||
Borrowings under the revolving credit facility bear interest at a rate equal to Adjusted LIBO plus a percentage ranging from 2.75% to 3.75%, or Alternate Base Rate plus a percentage ranging from 1.75% to 2.75%, in each case based on Select's ratio of total indebtedness to Consolidated EBITDA (as defined in the senior secured credit facilities). | ||||||||
On the last day of each calendar quarter Select is required to pay each lender a commitment fee in respect of any unused commitments under the revolving credit facility, which is currently 0.50% per annum subject to adjustment based upon the ratio of Select's total indebtedness to Consolidated EBITDA (as defined in the senior secured credit facilities). | ||||||||
Subject to exceptions, Select's senior secured credit facilities require mandatory prepayments of term loans in amounts equal to: | ||||||||
• | 50% (as may be reduced based on Select's ratio of total indebtedness to Consolidated EBITDA (as defined in the senior secured credit facilities)) of Select's annual excess cash flow; | |||||||
• | 100% of the net cash proceeds from non-ordinary course asset sales or other dispositions, or as a result of a casualty or condemnation event, subject to reinvestment rights and certain other exceptions; and | |||||||
• | 100% of the net cash proceeds from certain incurrences of debt. | |||||||
Select's senior secured credit facilities are guaranteed by Holdings, Select and substantially all of its current wholly-owned subsidiaries, and will be guaranteed by substantially all of Select's future subsidiaries and secured by substantially all of Select's existing and future property and assets and by a pledge of its capital stock and the capital stock of its subsidiaries. | ||||||||
Select's senior secured credit facilities require that it comply on a quarterly basis with certain financial covenants, including a maximum leverage ratio test. | ||||||||
In addition, Select's senior secured credit facilities include negative covenants, subject to significant exceptions, restricting or limiting its ability and the ability of Holdings and Select's restricted subsidiaries, to, among other things: | ||||||||
• | incur, assume, permit to exist or guarantee additional debt and issue or sell or permit any subsidiary to issue or sell preferred stock; | |||||||
• | amend, modify or waiver any rights under the certificate of indebtedness, credit agreements, certificate of incorporation, bylaws or other organizational documents which would be materially adverse to the creditors; | |||||||
• | pay dividends or other distributions on, redeem, repurchase, retire or cancel capital stock; | |||||||
• | purchase or acquire any debt or equity securities of, make any loans or advances to, guarantee any obligation of, or make any other investment in, any other company; | |||||||
• | incur or permit to exist certain liens on property or assets owned or accrued or assign or sell any income or revenues with respect to such property or assets; | |||||||
• | sell or otherwise transfer property or assets to, purchase or otherwise receive property or assets from, or otherwise enter into transactions with affiliates; | |||||||
• | merge, consolidate or amalgamate with another company or permit any subsidiary to merge, consolidate or amalgamate with another company; | |||||||
• | sell, transfer, lease or otherwise dispose of assets, including any equity interests; | |||||||
• | repay, redeem, repurchase, retire or cancel any subordinated debt; | |||||||
• | incur capital expenditures; | |||||||
• | engage to any material extent in any business other than business of the type currently conducted by Select or reasonably related businesses; and | |||||||
• | incur obligations that restrict the ability of its subsidiaries to incur or permit to exist any liens on Select's property or assets or to make dividends or other payments to Select. | |||||||
Select's senior secured credit facilities also contain certain representations and warranties, affirmative covenants and events of default. The events of default include payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy, certain events under ERISA, material judgments, actual or asserted failure of any guaranty or security document supporting Select's senior secured credit facilities to be in full force and effect and any change of control. If such an event of default occurs, the lenders under Select's senior secured credit facilities will be entitled to take various actions, including the acceleration of amounts due under the senior secured credit facilities and all actions permitted to be taken by a secured creditor. | ||||||||
At December 31, 2014, Select had outstanding borrowings of $780.2 million (excluding unamortized original issue discounts of $4.2 million) under the term loans and borrowings of $60.0 million (excluding letters of credit) under the revolving loan portion of the senior secured credit facilities. Select had $249.7 million of availability under its revolving credit facility (after giving effect to $40.3 million of outstanding letters of credit) at December 31, 2014. | ||||||||
The applicable margin percentage for borrowings under Select's revolving loan is subject to change based upon the ratio of Select's leverage ratio (as defined in the senior secured credit facility). The applicable interest rate for revolving loans as of December 31, 2014 was (1) Alternate Base plus 2.75% for alternate base rate loans and (2) LIBO plus 3.75% for adjusted LIBO rate loans. | ||||||||
Select's senior secured credit facility requires it to maintain certain leverage ratios (as defined in the senior secured credit facility). For the four consecutive fiscal quarters ended December 31, 2014, Select was required to maintain its leverage ratio (its ratio of total indebtedness to consolidated EBITDA) at less than 5.00 to 1.00. Select's leverage ratio was 4.18 to 1.00 as of December 31, 2014. | ||||||||
Senior Notes | ||||||||
On March 11, 2014, Select issued and sold $110.0 million aggregate principal amount of additional 6.375% senior notes due June 1, 2021 (the "Additional Notes"), at 101.50% of the aggregate principal amount resulting in gross proceeds of $111.7 million. The notes were issued as additional notes under the indenture pursuant to which it previously issued $600.0 million of 6.375% senior notes due June 1, 2021 (the "Existing Notes" and, together with the Additional Notes, the "Notes"). The Additional Notes are treated as a single series with the Existing Notes and have the same terms as those of the Existing Notes. | ||||||||
Interest on the Notes accrues at the rate of 6.375% per annum and is payable semi-annually in cash in arrears on June 1 and December 1 of each year. The Notes are Select's senior unsecured obligations and rank equally in right of payment with all of its other existing and future senior unsecured indebtedness and senior in right of payment to all of its existing and future subordinated indebtedness. The Notes are fully and unconditionally guaranteed by all of Select's wholly owned subsidiaries. The Notes are guaranteed, jointly and severally, by Select's direct or indirect existing and future domestic restricted subsidiaries other than certain non-guarantor subsidiaries. | ||||||||
Select may redeem some or all of the Notes prior to June 1, 2016 by paying a "make-whole" premium. Select may redeem some or all of the Notes on or after June 1, 2016 at specified redemption prices. In addition, prior to June 1, 2016, Select may redeem up to 35% of the Notes with the net proceeds of certain equity offerings at a price of 106.375% plus accrued and unpaid interest, if any. Select is obligated to offer to repurchase the Notes at a price of 101% of their principal amount plus accrued and unpaid interest, if any, as a result of certain change of control events. These restrictions and prohibitions are subject to certain qualifications and exceptions. | ||||||||
The indenture relating to the Notes contains covenants that, among other things, limit Select's ability and the ability of certain of its subsidiaries to (i) grant liens on its assets, (ii) make dividend payments, other distributions or other restricted payments, (iii) incur restrictions on the ability of Select's restricted subsidiaries to pay dividends or make other payments, (iv) enter into sale and leaseback transactions, (v) merge, consolidate, transfer or dispose of substantially all of their assets, (vi) incur additional indebtedness, (vii) make investments, (viii) sell assets, including capital stock of subsidiaries, (ix) use the proceeds from sales of assets, including capital stock of restricted subsidiaries, and (x) enter into transactions with affiliates. In addition, the Indenture requires, among other things, Select to provide financial and current reports to holders of the Notes or file such reports electronically with the SEC. These covenants are subject to a number of exceptions, limitations and qualifications set forth in the Indenture. | ||||||||
Maturities of Long-Term Debt and Notes Payable | ||||||||
Maturities of the Company's long-term debt for the years after 2014 are approximately as follows and are presented including the discounts on the senior secured credit facility term loans and premium on the senior notes (in thousands): | ||||||||
2015 | $ | 10,874 | ||||||
2016 | 287,037 | |||||||
2017 | 4,289 | |||||||
2018 | 540,227 | |||||||
2019 | 228 | |||||||
2020 and beyond | 710,321 | |||||||
Loss on Early Retirement of Debt | ||||||||
During the year ended December 31, 2012, the Company repurchased and retired an aggregate of $275.0 million principal amount of Select's outstanding 75/8% senior subordinated notes. A loss on early retirement of debt of $6.1 million was recognized by Holdings and Select for the year ended December 31, 2012, which included the write-off of unamortized debt issuance costs and call premiums. | ||||||||
During the year ended December 31, 2013, Select entered into a credit extension amendment on February 20, 2013, the proceeds of which were used to redeem all of its outstanding 75/8% senior subordinated notes, to finance Holdings' redemption of all of its 10% senior floating rate, and to repay a portion of the balance outstanding under Select's revolving credit facility. Additionally, on May 28, 2013, Select issued and sold $600.0 million aggregate principal amount of its 6.375% senior notes due 2021, the proceeds of which were used to pay a portion of the senior secured credit facility term loans then outstanding and to pay related fees and expenses. A loss on early retirement of debt of $18.7 million and $17.8 million for Holdings and Select, respectively, was recognized for the year ended December 31, 2013, which included the write-off of unamortized debt issuance costs. | ||||||||
During the year ended December 31, 2014, Select amended its term loans under its senior secured credit facilities and recognized a loss $2.3 million for unamortized debt issuance costs, unamortized original issue discount, and certain fees incurred related to term loan modifications. | ||||||||
Stockholders_Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2014 | |
Stockholders' Equity | |
Stockholders' Equity | 6. Stockholders' Equity |
Common Stock | |
Holdings' board of directors has authorized a common stock repurchase program to repurchase up to $500.0 million worth of shares of its common stock. The program will remain in effect until December 31, 2016, unless extended or earlier terminated by the board of directors. Stock repurchases under this program may be made in the open market or through privately negotiated transactions, and at times and in such amounts as Holdings deems appropriate. Holdings is funding this program with cash on hand and borrowings under its revolving credit facility. For the years ended December 31, 2012, 2013 and 2014, respectively, Holdings repurchased 5,725,782 shares at a cost of $46.8 million, 1,115,691 shares at a cost of $10.0 million and 11,285,714 shares at a cost of $127.5 million which includes transaction costs. During the year ended December 31, 2014, the shares were repurchased from Welsh, Carson, Anderson & Stowe IX, L.P. and WCAS Capital Partners IV, L.P. pursuant to stock purchase agreements dated February 26, 2014 and May 5, 2014. Two of the Company's directors are affiliated with these entities. The common stock repurchase program has available capacity of $198.9 million as of December 31, 2014. | |
Holdings granted 761,500 shares, 952,500 shares and 1,585,775 shares of restricted stock for the years ended December 31, 2012, 2013 and 2014, respectively and issued 301,208 shares, 166,600 shares and 974,969 shares of common stock related to the exercise of stock options and for the years ended December 31, 2012, 2013 and 2014, respectively. Also, 15,860 shares, 331,697 shares and 302,690 shares of stock were forfeited for the years ended December 31, 2012, 2013 and 2014, respectively. | |
Stock_Option_and_Restricted_St
Stock Option and Restricted Stock Plans | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Stock Option and Restricted Stock Plans | |||||||||||||||||
Stock Option and Restricted Stock Plans | 7. Stock Option and Restricted Stock Plans | ||||||||||||||||
On February 25, 2005, Holdings adopted the Select Medical Holdings Corporation 2005 Equity Incentive Plan. On May 13, 2011, the Select Medical Holdings Corporation 2005 Equity Incentive Plan was frozen and Holdings adopted the 2011 Select Medical Holdings Corporation 2011 Equity Incentive Plan. The Select Medical Holdings Corporation 2005 Equity Incentive Plan and the Select Medical Holdings Corporation 2011 Equity Incentive Plan are referred to as the "Plans." The Plans provide for grants of restricted stock and stock options of Holdings. On November 8, 2005 the board of directors of Holdings adopted a director equity incentive plan ("Director Plan") and on August 12, 2009, the board of directors and stockholders of Holdings approved an amendment and restatement of the Director Plan. This amendment authorized Holdings to issue under the Director Plan options to purchase up to 75,000 shares of its common stock and restricted stock awards covering up to 150,000 shares of its common stock. | |||||||||||||||||
The options under the Plans and Director Plan generally vest over five years and have an option term not to exceed ten years. The fair value of the options granted was estimated using the Black-Scholes option pricing model. There were no options granted under the Plans or Director Plan during the years ended December 31, 2013 and 2014. | |||||||||||||||||
Stock option transactions and other information related to the Plans are as follows: | |||||||||||||||||
Price Per Share | Shares | Weighted | |||||||||||||||
Average | |||||||||||||||||
Exercise Price | |||||||||||||||||
(share amounts in thousands) | |||||||||||||||||
Balance, January 1, 2013 | $ | 3.33 – 10.00 | 2,423 | $ | 8.4 | ||||||||||||
Granted | — | — | — | ||||||||||||||
Exercised | 7.14 – 10.00 | (167 | ) | 9.15 | |||||||||||||
Canceled | 8.33 – 10.00 | (316 | ) | 9.13 | |||||||||||||
| | | | | | | | | | | |||||||
Balance, December 31, 2013 | $ | 3.33 – 10.00 | 1,940 | $ | 8.22 | ||||||||||||
Granted | — | — | — | ||||||||||||||
Exercised | 3.33 – 10.00 | (960 | ) | 7.55 | |||||||||||||
Canceled | 8.33 – 10.00 | (81 | ) | 9.12 | |||||||||||||
| | | | | | | | | | | |||||||
Balance, December 31, 2014 | $ | 6.94 – 10.00 | 899 | $ | 8.85 | ||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Additional information with respect to the outstanding options as of December 31, 2014 for the Plans is as follows: | |||||||||||||||||
Exercise Price | Number | Weighted Average | Number | ||||||||||||||
Outstanding | Remaining | Exercisable | |||||||||||||||
Contractual Life | |||||||||||||||||
(share amounts in thousands) | |||||||||||||||||
$ | 6.00 – 7.00 | 6 | 5.61 | 3 | |||||||||||||
7.01 – 8.00 | 43 | 6.23 | 11 | ||||||||||||||
8.01 – 9.00 | 290 | 2.19 | 288 | ||||||||||||||
9.01 – 10.00 | 560 | 4.81 | 560 | ||||||||||||||
The weighted average remaining contractual term for all outstanding options under the Plans is 4.04 years and the weighted average remaining contractual term of exercisable options is 3.95 years. | |||||||||||||||||
The total intrinsic value of options exercised under the Plans for the years ended December 31, 2012, 2013, and 2014 was $1.1 million, $0.2 million and $5.9 million respectively. The aggregate intrinsic value of options outstanding and options exercisable under the Plans at December 31, 2014 was $5.0 million and $4.7 million, respectively. | |||||||||||||||||
Transactions and other information related to the Director Plan are as follows: | |||||||||||||||||
Price Per Share | Shares | Weighted Average | |||||||||||||||
Exercise Price | |||||||||||||||||
(share amounts in thousands) | |||||||||||||||||
Balance, January 1, 2013 | $ | 3.33 – 10.00 | 42 | $ | 8.69 | ||||||||||||
Granted | — | — | — | ||||||||||||||
Exercised | — | — | — | ||||||||||||||
| | | | | | | | | | | |||||||
Balance, December 31, 2013 | $ | 3.33 – 10.00 | 42 | $ | 8.69 | ||||||||||||
Granted | — | — | — | ||||||||||||||
Exercised | $ | 3.33 – 10.00 | (15 | ) | 7 | ||||||||||||
| | | | | | | | | | | |||||||
Balance, December 31, 2014 | $ | 8.33 – 10.00 | 27 | $ | 9.63 | ||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Additional information with respect to the outstanding options as of December 31, 2014 for the Director Plan is as follows: | |||||||||||||||||
Exercise Price | Number | Weighted | Number | ||||||||||||||
Outstanding | Average | Exercisable | |||||||||||||||
Remaining | |||||||||||||||||
Contractual Life | |||||||||||||||||
(share amounts in thousands) | |||||||||||||||||
$ | 8.00 – 9.00 | 6 | 2.24 | 6 | |||||||||||||
9.01 – 10.00 | 21 | 4.12 | 21 | ||||||||||||||
The weighted average remaining contractual term for all outstanding and exercisable options under the Director Plan is 3.70 years. | |||||||||||||||||
The aggregate intrinsic value of options outstanding and options exercisable under the Director Plan at December 31, 2014 was $128,800. | |||||||||||||||||
The following is a summary of restricted stock issuances from January 1, 2012 through December 31, 2014: | |||||||||||||||||
Number of Shares Issued | Fair Value of Common Stock | ||||||||||||||||
(share amounts in thousands) | |||||||||||||||||
March 26, 2012 | 65 | 8.33 | |||||||||||||||
May 2, 2012 | 129 | 8.67 | |||||||||||||||
August 7, 2012 | 38 | 11.84 | |||||||||||||||
October 30, 2012 | 530 | 10.75 | |||||||||||||||
January 2, 2013 | 5 | 9.90 | |||||||||||||||
February 20, 2013 | 35 | 8.80 | |||||||||||||||
May 1, 2013 | 115 | 8.06 | |||||||||||||||
August 7, 2013 | 38 | 8.89 | |||||||||||||||
October 30, 2013 | 760 | 8.50 | |||||||||||||||
February 19, 2014 | 193 | 11.16 | |||||||||||||||
April 30, 2014 | 158 | 13.96 | |||||||||||||||
August 6, 2014 | 1,010 | 15.75 | |||||||||||||||
October 29, 2014 | 225 | 12.97 | |||||||||||||||
Stock compensation expense for each of the next five years, based on restricted stock awards granted as of December 31, 2014, is estimated to be as follows: | |||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||
(in thousands) | |||||||||||||||||
Stock compensation expense | $ | 12,781 | $ | 9,438 | $ | 4,859 | $ | 905 | $ | 56 | |||||||
The Company recognized the following stock compensation expense related to restricted stock and stock option awards: | |||||||||||||||||
For the Year Ended | |||||||||||||||||
December 31, | |||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||
(in thousands) | |||||||||||||||||
Stock compensation expense: | |||||||||||||||||
Included in general and administrative | $ | 3,538 | $ | 5,276 | $ | 9,027 | |||||||||||
Included in cost of services | 2,139 | 1,757 | 2,015 | ||||||||||||||
| | | | | | | | | | | |||||||
Total | $ | 5,677 | $ | 7,033 | $ | 11,042 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Income Taxes | ||||||||||||||||||||
Income Taxes | 8. Income Taxes | |||||||||||||||||||
Significant components of the Company's tax provision for the years ended December 31, 2012, 2013, and 2014 are as follows: | ||||||||||||||||||||
Holdings | Select | |||||||||||||||||||
For the Year Ended | For the Year Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2012 | 2013 | 2014 | 2012 | 2013 | 2014 | |||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||
Current: | ||||||||||||||||||||
Federal | $ | 70,159 | $ | 55,847 | $ | 52,063 | $ | 74,076 | $ | 57,026 | $ | 52,063 | ||||||||
State and local | 11,589 | 11,913 | 9,248 | 11,589 | 11,913 | 9,248 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total current | 81,748 | 67,760 | 61,311 | 85,665 | 68,939 | 61,311 | ||||||||||||||
Deferred | 7,909 | 7,032 | 14,311 | 7,909 | 7,032 | 14,311 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total income tax provision | $ | 89,657 | $ | 74,792 | $ | 75,622 | $ | 93,574 | $ | 75,971 | $ | 75,622 | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
The differences between the expected income tax provision and income taxes computed at the federal statutory rate of 35% were as follows: | ||||||||||||||||||||
Holdings | Select | |||||||||||||||||||
For the Year Ended | For the Year Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2012 | 2013 | 2014 | 2012 | 2013 | 2014 | |||||||||||||||
Expected federal tax rate | 35 | % | 35 | % | 35 | % | 35 | % | 35 | % | 35 | % | ||||||||
State and local taxes, net of federal benefit | 4.2 | 4.6 | 4.2 | 4 | 4.5 | 4.2 | ||||||||||||||
Other permanent differences | 0.6 | 1.1 | 0.8 | 0.6 | 1.1 | 0.8 | ||||||||||||||
Valuation allowance | (0.6 | ) | (0.7 | ) | (0.4 | ) | (0.6 | ) | (0.6 | ) | (0.4 | ) | ||||||||
Uncertain tax positions | (0.5 | ) | (0.6 | ) | (0.3 | ) | (0.5 | ) | (0.6 | ) | (0.3 | ) | ||||||||
IRS audit settlements | (0.6 | ) | — | (0.4 | ) | (0.5 | ) | — | (0.4 | ) | ||||||||||
Non-controlling interest | (0.9 | ) | (1.7 | ) | (1.5 | ) | (0.9 | ) | (1.7 | ) | (1.5 | ) | ||||||||
Other | (0.4 | ) | 0.1 | (0.3 | ) | (0.4 | ) | 0.1 | (0.3 | ) | ||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | 36.8 | % | 37.8 | % | 37.1 | % | 36.7 | % | 37.8 | % | 37.1 | % | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
During 2009, the Company settled with the Internal Revenue Service a refund of previously paid federal income taxes that resulted from the acceleration of tax amortization in years prior to the Merger. Tax reserves were released in 2012 and 2014 due to abatement of penalties and interest related to this settlement. | ||||||||||||||||||||
A summary of deferred tax assets and liabilities for Holdings and Select is as follows: | ||||||||||||||||||||
December 31, 2013 | December 31, 2014 | |||||||||||||||||||
Total | Current | Non-Current | Total | Current | Non-Current | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Deferred tax assets | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 1,484 | $ | 1,484 | $ | — | $ | 701 | $ | 701 | $ | — | ||||||||
Compensation and benefit related accruals | 45,147 | 35,706 | 9,441 | 49,373 | 38,722 | 10,651 | ||||||||||||||
Professional malpractice liability insurance | 20,333 | 6,382 | 13,951 | 17,934 | 4,732 | 13,202 | ||||||||||||||
Restructuring reserve | 441 | 441 | — | 333 | 333 | — | ||||||||||||||
Deferred revenue | — | — | — | (829 | ) | (829 | ) | — | ||||||||||||
Net operating loss carryforwards | 22,686 | 422 | 22,264 | 21,555 | 436 | 21,119 | ||||||||||||||
Other | 630 | 630 | — | 552 | 552 | — | ||||||||||||||
Stock options | 4,392 | — | 4,392 | 5,336 | — | 5,336 | ||||||||||||||
Equity investments | — | — | — | 3,475 | — | 3,475 | ||||||||||||||
Uncertain tax positions | 2,107 | — | 2,107 | 1,632 | — | 1,632 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total deferred tax assets | 97,220 | 45,065 | 52,155 | 100,062 | 44,647 | 55,415 | ||||||||||||||
Deferred tax liabilities | ||||||||||||||||||||
Deferred income | (31,832 | ) | (24,897 | ) | (6,935 | ) | (31,190 | ) | (25,651 | ) | (5,539 | ) | ||||||||
Investment in unconsolidated affiliates | (2,620 | ) | (230 | ) | (2,390 | ) | (3,659 | ) | — | (3,659 | ) | |||||||||
Other | — | — | — | (1,587 | ) | (1,093 | ) | (494 | ) | |||||||||||
Depreciation and amortization | (130,884 | ) | — | (130,884 | ) | (147,197 | ) | — | (147,197 | ) | ||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total deferred tax liabilities | (165,336 | ) | (25,127 | ) | (140,209 | ) | (183,633 | ) | (26,744 | ) | (156,889 | ) | ||||||||
Net deferred taxes before valuation allowance | (68,116 | ) | 19,938 | (88,054 | ) | (83,571 | ) | 17,903 | (101,474 | ) | ||||||||||
Valuation allowance | (10,547 | ) | (2,314 | ) | (8,233 | ) | (9,641 | ) | (1,912 | ) | (7,729 | ) | ||||||||
| | | | | | | | | | | | | | | | | | | | |
Net deferred taxes | $ | (78,663 | ) | $ | 17,624 | $ | (96,287 | ) | $ | (93,212 | ) | $ | 15,991 | $ | (109,203 | ) | ||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
The valuation allowance as of December 31, 2014 is primarily attributable to the uncertainty regarding the realization of state net operating losses and other net deferred tax assets of loss entities. The state net deferred tax assets have a full valuation allowance recorded for entities that have a cumulative history of pre-tax losses (current year in addition to the two prior years). The net deferred tax liabilities at December 31, 2013 and 2014 of approximately $78.7 million and $93.2 million, respectively, consist of items which have been recognized for tax reporting purposes, but which will increase tax on returns to be filed in the future, and include the use of net operating loss carryforwards. The Company has performed the required assessment of positive and negative evidence regarding the realization of the net deferred tax assets. This assessment included a review of legal entities with three years of cumulative losses, estimates of projected future taxable income, generation of income from the turning of existing deferred tax liabilities and the impact of tax planning strategies that management would and could implement in order to keep deferred tax assets from expiring unused. Although realization is not assured, based on the Company's assessment, it has concluded that it is more likely than not that such assets, net of the determined valuation allowance, will be realized. | ||||||||||||||||||||
The total state net operating losses are approximately $491.3 million. State net operating loss carry forwards expire and are subject to valuation allowances as follows: | ||||||||||||||||||||
State Net | Gross Valuation | |||||||||||||||||||
Operating Losses | Allowance | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||
2015 | $ | 7,487 | $ | 7,178 | ||||||||||||||||
2016 | 10,958 | 9,527 | ||||||||||||||||||
2017 | 12,648 | 11,257 | ||||||||||||||||||
2018 | 7,240 | 5,493 | ||||||||||||||||||
Thereafter through 2034 | 453,004 | 348,580 | ||||||||||||||||||
Reserves for Uncertain Tax Positions: | ||||||||||||||||||||
The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. Significant judgment is required in evaluating the Company's tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when it is believed that certain positions might be challenged despite the Company's belief that its tax return positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of a tax audit. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. | ||||||||||||||||||||
The reconciliation of the Company's unrecognized tax benefits is as follows (in thousands): | ||||||||||||||||||||
Gross tax contingencies — January 1, 2012 | $ | 15,656 | ||||||||||||||||||
Reductions for tax positions taken in prior periods due primarily to statute expiration | (2,516 | ) | ||||||||||||||||||
Additions for existing tax positions taken | 750 | |||||||||||||||||||
| | | | | ||||||||||||||||
Gross tax contingencies — December 31, 2012 | 13,890 | |||||||||||||||||||
Reductions for tax positions taken in prior periods due primarily to statute expiration | (2,299 | ) | ||||||||||||||||||
Additions for existing tax positions taken | 435 | |||||||||||||||||||
| | | | | ||||||||||||||||
Gross tax contingencies — December 31, 2013 | 12,026 | |||||||||||||||||||
Reductions for tax positions taken in prior periods due primarily to statute expiration | (1,632 | ) | ||||||||||||||||||
Additions for existing tax positions taken | 273 | |||||||||||||||||||
| | | | | ||||||||||||||||
Gross tax contingencies — December 31, 2014 | $ | 10,667 | ||||||||||||||||||
| | | | | ||||||||||||||||
| | | | | ||||||||||||||||
As of December 31, 2013 and 2014, the Company had $12.0 million and $10.7 million of unrecognized tax benefits, respectively, all of which, if fully recognized, would affect the Company's effective income tax rate. | ||||||||||||||||||||
As of December 31, 2014, approximately $3.3 million of gross unrecognized tax benefits including interest will be eligible for release in the next 12 months due to the expiration of statutes of limitations. The Company's policy is to include interest related to income taxes in income tax expense. As of December 31, 2013 and December 31, 2014, the Company has accrued interest related to income taxes of $1.6 million and $1.9 million, net of federal income taxes, respectively. Interest recognized for each of the years ended December 31, 2012, 2013 and 2014 was $0.5 million, net of federal income tax benefits. | ||||||||||||||||||||
The federal statute of limitations remains open for tax years 2011 through 2014. The Company is currently under examination by the Internal Revenue Service (the "IRS") for the 2011 and 2012 tax years. | ||||||||||||||||||||
State jurisdictions generally have statutes of limitations for tax returns ranging from three to five years. The state impact of any federal income tax changes remains subject to examination for a period of up to one year after formal notification to the states. Currently, the Company has one state income tax return under examination. | ||||||||||||||||||||
Retirement_Savings_Plan
Retirement Savings Plan | 12 Months Ended |
Dec. 31, 2014 | |
Retirement Savings Plan | |
Retirement Savings Plan | 9. Retirement Savings Plan |
The Company sponsors a defined contribution retirement savings plan for substantially all of its employees. Employees who are not classified as HCE's (highly compensated employees) may contribute up to 30% of their salary; HCE's may contribute up to 7% of their salary. The Plan provides a discretionary company match which is determined annually. Currently, the Company matches 25% of the first 6% of compensation employees contribute to the plan. The employees vest in the employer contributions over a three-year period beginning on the employee's hire date. The expense incurred by the Company related to this plan was $8.2 million, $8.7 million and $9.3 million during the years ended December 31, 2012, 2013 and 2014, respectively. | |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Segment Information | |||||||||||||||||
Segment Information | 10. Segment Information | ||||||||||||||||
The Company's reportable segments consist of (i) specialty hospitals and (ii) outpatient rehabilitation. Other activities include the Company's corporate services and certain other non-consolidating joint ventures and minority investments in other healthcare related businesses. The outpatient rehabilitation reportable segment has two operating segments: outpatient rehabilitation clinics and contract therapy. These operating segments are aggregated for reporting purposes as they have common economic characteristics and provide a similar service to a similar patient base. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance of the segments based on Adjusted EBITDA. Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, equity in earnings (losses) of unconsolidated subsidiaries and other income (expense). | |||||||||||||||||
The following tables summarize selected financial data for the Company's reportable segments. The segment results of Holdings are identical to those of Select with the exception of total assets. | |||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
Specialty | Outpatient | Other | Total | ||||||||||||||
Hospitals | Rehabilitation | ||||||||||||||||
(in thousands) | |||||||||||||||||
Net revenue | $ | 2,197,529 | $ | 751,317 | $ | 123 | $ | 2,948,969 | |||||||||
Adjusted EBITDA | 381,354 | 87,024 | (62,531 | ) | 405,847 | ||||||||||||
Total assets(1): | |||||||||||||||||
Select | 2,143,906 | 491,920 | 124,487 | 2,760,313 | |||||||||||||
Holdings | 2,143,906 | 491,920 | 125,535 | 2,761,361 | |||||||||||||
Capital expenditures | 50,005 | 13,209 | 4,971 | 68,185 | |||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Specialty | Outpatient | Other | Total | ||||||||||||||
Hospitals | Rehabilitation | ||||||||||||||||
(in thousands) | |||||||||||||||||
Net revenue | $ | 2,198,121 | $ | 777,177 | $ | 350 | $ | 2,975,648 | |||||||||
Adjusted EBITDA | 353,843 | 90,313 | (71,295 | ) | 372,861 | ||||||||||||
Total assets(1): | |||||||||||||||||
Select | 2,205,921 | 512,539 | 99,162 | 2,817,622 | |||||||||||||
Holdings | 2,205,921 | 512,539 | 99,162 | 2,817,622 | |||||||||||||
Capital expenditures | 56,523 | 14,113 | 3,024 | 73,660 | |||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Specialty | Outpatient | Other | Total | ||||||||||||||
Hospitals | Rehabilitation | ||||||||||||||||
(in thousands) | |||||||||||||||||
Net revenue | $ | 2,244,899 | $ | 819,397 | $ | 721 | $ | 3,065,017 | |||||||||
Adjusted EBITDA | 341,787 | 97,584 | (75,499 | ) | 363,872 | ||||||||||||
Total assets(1): | |||||||||||||||||
Select | 2,279,665 | 532,685 | 112,459 | 2,924,809 | |||||||||||||
Holdings | 2,279,665 | 532,685 | 112,459 | 2,924,809 | |||||||||||||
Capital expenditures | 77,742 | 12,506 | 4,998 | 95,246 | |||||||||||||
-1 | The specialty hospital segment includes $2.7 million in real estate assets held for sale on December 31, 2012, 2013 and 2014. | ||||||||||||||||
A reconciliation of Adjusted EBITDA to income before income taxes is as follows: | |||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
Specialty | Outpatient | Other | |||||||||||||||
Hospitals | Rehabilitation | ||||||||||||||||
(in thousands) | |||||||||||||||||
Adjusted EBITDA | $ | 381,354 | $ | 87,024 | $ | (62,531 | ) | ||||||||||
Depreciation and amortization | (46,836 | ) | (13,208 | ) | (3,267 | ) | |||||||||||
Stock compensation expense | — | — | (5,677 | ) | |||||||||||||
| | | | | | | | | | | | | | | | | |
Holdings | Select | ||||||||||||||||
Income (loss) from operations | $ | 334,518 | $ | 73,816 | $ | (71,475 | ) | $ | 336,859 | $ | 336,859 | ||||||
Loss on early retirement of debt | (6,064 | ) | (6,064 | ) | |||||||||||||
Equity in earnings of unconsolidated subsidiaries | 7,705 | 7,705 | |||||||||||||||
Interest expense | (94,950 | ) | (83,759 | ) | |||||||||||||
| | | | | | | | | | | | | | | | | |
Income before income taxes | $ | 243,550 | $ | 254,741 | |||||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Year Ended December 31, 2013 | |||||||||||||||||
Specialty | Outpatient | Other | |||||||||||||||
Hospitals | Rehabilitation | ||||||||||||||||
(in thousands) | |||||||||||||||||
Adjusted EBITDA | $ | 353,843 | $ | 90,313 | $ | (71,295 | ) | ||||||||||
Depreciation and amortization | (48,621 | ) | (12,024 | ) | (3,747 | ) | |||||||||||
Stock compensation expense | — | — | (7,033 | ) | |||||||||||||
| | | | | | | | | | | | | | | | | |
Holdings | Select | ||||||||||||||||
Income (loss) from operations | $ | 305,222 | $ | 78,289 | $ | (82,075 | ) | $ | 301,436 | $ | 301,436 | ||||||
Loss on early retirement of debt | (18,747 | ) | (17,788 | ) | |||||||||||||
Equity in earnings of unconsolidated subsidiaries | 2,476 | 2,476 | |||||||||||||||
Interest expense | (87,364 | ) | (84,954 | ) | |||||||||||||
| | | | | | | | | | | | | | | | | |
Income before income taxes | $ | 197,801 | $ | 201,170 | |||||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Year Ended December 31, 2014 | |||||||||||||||||
Specialty | Outpatient | Other | |||||||||||||||
Hospitals | Rehabilitation | ||||||||||||||||
(in thousands) | |||||||||||||||||
Adjusted EBITDA | $ | 341,787 | $ | 97,584 | $ | (75,499 | ) | ||||||||||
Depreciation and amortization | (51,786 | ) | (12,845 | ) | (3,723 | ) | |||||||||||
Stock compensation expense | — | — | (11,042 | ) | |||||||||||||
| | | | | | | | | | | | | | | | | |
Holdings | Select | ||||||||||||||||
Income (loss) from operations | $ | 290,001 | $ | 84,739 | $ | (90,264 | ) | $ | 284,476 | $ | 284,476 | ||||||
Loss on early retirement of debt | (2,277 | ) | (2,277 | ) | |||||||||||||
Equity in earnings of unconsolidated subsidiaries | 7,044 | 7,044 | |||||||||||||||
Interest expense | (85,446 | ) | (85,446 | ) | |||||||||||||
| | | | | | | | | | | | | | | | | |
Income before income taxes | $ | 203,797 | $ | 203,797 | |||||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Income_per_Share
Income per Share | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income per Share | |||||||||||
Income per Share | 11. Income per Share | ||||||||||
The Company applies the two-class method for calculating and presenting income per common share. The two-class method is an earnings allocation formula that determines earnings per share for each class of stock participation rights in undistributed earnings. Under the two class method: | |||||||||||
(a) | Net income attributable to Select Medical Holdings Corporation is reduced by any contractual amount of dividends in the current period for each class of stock. There were no contractual dividends for the years ended December 31, 2012, 2013 and 2014. | ||||||||||
(b) | The remaining income is allocated to common stock and unvested restricted stock to the extent that each security may share in income, as if all of the earnings for the period had been distributed. The total income allocated to each security is determined by adding together the amount allocated for dividends in (a) above and the amount allocated for participation features. | ||||||||||
(c) | The income allocated to common stock is then divided by the weighted average number of outstanding shares to which the earnings are allocated to determine the income per share for common stock. | ||||||||||
In applying the two-class method, the Company determined that undistributed earnings should be allocated equally on a per share basis between the common stock and unvested restricted stock due to the equal participation rights of the common stock and unvested restricted stock (i.e., the voting conversion rights). | |||||||||||
The following table sets forth for the periods indicated the calculation of income per share in the Company's Consolidated Statement of Operations and the differences between basic weighted average shares outstanding and diluted weighted average shares outstanding used to compute basic and diluted earnings per share, respectively: | |||||||||||
For the Year Ended | |||||||||||
December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
(in thousands, except per | |||||||||||
share amounts) | |||||||||||
Numerator: | |||||||||||
Net income attributable to Select Medical Holdings Corporation | $ | 148,230 | $ | 114,390 | $ | 120,627 | |||||
Less: Earnings allocated to unvested restricted stockholders | 2,514 | 2,450 | 3,337 | ||||||||
| | | | | | | | | | | |
Net income available to common stockholders | $ | 145,716 | $ | 111,940 | $ | 117,290 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Denominator: | |||||||||||
Weighted average shares — basic | 138,767 | 136,879 | 129,026 | ||||||||
Effect of dilutive securities: | |||||||||||
Stock options | 275 | 168 | 439 | ||||||||
| | | | | | | | | | | |
Weighted average shares — diluted | 139,042 | 137,047 | 129,465 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Basic income per common share: | $ | 1.05 | $ | 0.82 | $ | 0.91 | |||||
Diluted income per common share: | $ | 1.05 | $ | 0.82 | $ | 0.91 | |||||
The following amounts are shown here for informational and comparative purposes only since their inclusion would be anti-dilutive: | |||||||||||
For the Year Ended | |||||||||||
December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
(in thousands) | |||||||||||
Stock options | 1,654 | 1,474 | 6 | ||||||||
Fair_Value
Fair Value | 12 Months Ended |
Dec. 31, 2014 | |
Fair Value | |
Fair Value | 12. Fair Value |
Financial instruments include cash and cash equivalents, notes payable and long-term debt. The carrying amount of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments. | |
The carrying value of Select's senior secured credit facilities was $827.8 million and $836.0 million at December 31, 2013 and 2014, respectively. The fair value of Select's senior secured credit facilities was $834.7 million and $816.6 million at December 31, 2013 and 2014, respectively. The fair value of Select's senior secured credit facilities was based on quoted market prices for this debt in the syndicated loan market. | |
The carrying value of Select's 6.375% senior notes was $600.0 million and $711.5 million at December 31, 2013 and 2014, respectively. The fair value of Select's 6.375% senior notes was $586.5 million and $722.4 million at December 31, 2013 and 2014, respectively. The fair value of this debt was based on quoted market prices. | |
The Company considers the inputs in the valuation process of its senior secured credit facilities and 6.375% senior notes to be Level 2 in the fair value hierarchy. Level 2 in the fair value hierarchy is defined as inputs that are observable for the asset or liability, either directly or indirectly which includes quoted prices for identical assets or liabilities in markets that are not active. | |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Related Party Transactions | |||||||||||
Related Party Transactions | 13. Related Party Transactions | ||||||||||
The Company rents its corporate office space from related parties affiliated through common ownership or management. The Company made payments for office rent, leasehold improvements and miscellaneous expenses aggregating $4.0 million, $4.2 million and $4.4 million for the years ended December 31, 2012, 2013 and 2014, respectively, to the affiliated companies. | |||||||||||
As of December 31, 2014, future rental commitments under outstanding agreements with the affiliated companies are approximately as follows (in thousands): | |||||||||||
2015 | $ | 4,128 | |||||||||
2016 | 4,174 | ||||||||||
2017 | 4,221 | ||||||||||
2018 | 4,318 | ||||||||||
2019 | 4,421 | ||||||||||
Thereafter | 13,912 | ||||||||||
| | | | | |||||||
$ | 35,174 | ||||||||||
| | | | | |||||||
| | | | | |||||||
During the year ended December 31, 2014, common shares were repurchased from Welsh, Carson, Anderson & Stowe IX, L.P. and WCAS Capital Partners IV, L.P. pursuant to stock purchase agreements dated February 26, 2014 and May 5, 2014. Two of the Company's directors are affiliated with these entities (Note 6). | |||||||||||
The Company provides contracted services, principally employee leasing services and charges management fees to related parties affiliated through its equity investments. Net operating revenues generated from the provision of contracted services and management fees to related parties through equity investments are as follows: | |||||||||||
For the Year Ended | |||||||||||
December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
(in thousands) | |||||||||||
BIR JV, LLP | $ | 92,205 | $ | 96,465 | $ | 101,385 | |||||
Rehabilitation Institute of Denton, LLC | 8,133 | 7,163 | 8,337 | ||||||||
OHRH, LLC | — | 2,069 | 8,280 | ||||||||
Global Rehab — Scottsdale, LLC. | — | 4,129 | 10,747 | ||||||||
Other | 140 | 310 | 518 | ||||||||
| | | | | | | | | | | |
Total | $ | 100,478 | $ | 110,136 | $ | 129,267 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies. | |||||
Commitments and Contingencies | 14. Commitments and Contingencies | ||||
Leases | |||||
The Company leases facilities and equipment from unrelated parties under operating leases. Minimum future lease obligations on long-term non-cancelable operating leases in effect at December 31, 2014 are approximately as follows (in thousands): | |||||
2015 | $ | 132,644 | |||
2016 | 110,719 | ||||
2017 | 90,385 | ||||
2018 | 70,601 | ||||
2019 | 53,380 | ||||
Thereafter | 333,329 | ||||
| | | | | |
$ | 791,058 | ||||
| | | | | |
| | | | | |
Total rent expense for operating leases, including cancelable leases, for the years ended December 31, 2012, 2013 and 2014 was $168.3 million, $164.6 million and $169.1 million, respectively. | |||||
Property rent expense to unrelated parties for the years ended December 31, 2012, 2013 and 2014 was $118.1 million, $119.5 million and $124.4 million, respectively. | |||||
Construction Commitments | |||||
At December 31, 2014, the Company had outstanding commitments under construction contracts related to new construction, improvements and renovations at the Company's long term acute care properties and inpatient rehabilitation facilities totaling approximately $58.9 million. | |||||
Other | |||||
A subsidiary of the Company has entered into a naming, promotional and sponsorship agreement with an NFL team for the team's headquarters complex that requires a payment of $3.0 million in 2015. Each successive annual payment increases by 2.3% through 2025. The naming, promotional and sponsorship agreement is in effect until 2025. | |||||
Litigation | |||||
The Company is a party to various legal actions, proceedings and claims (some of which are not insured), and regulatory and other governmental audits and investigations in the ordinary course of its business. The Company cannot predict the ultimate outcome of pending litigation, proceedings and regulatory and other governmental audits and investigations. These matters could potentially subject the Company to sanctions, damages, recoupments, fines and other penalties. The Department of Justice, Centers for Medicare & Medicaid Services ("CMS") or other federal and state enforcement and regulatory agencies may conduct additional investigations related to the Company's businesses in the future that may, either individually or in the aggregate, have a material adverse effect on the Company's business, financial position, results of operations and liquidity. | |||||
To address claims arising out of the operations of the Company's specialty hospitals and outpatient rehabilitation facilities, the Company maintains professional malpractice liability insurance and general liability insurance, subject to self-insured retention of $2.0 million per medical incident for professional liability claims and $2.0 million per occurrence for general liability claims. The Company also maintains umbrella liability insurance covering claims which, due to their nature or amount, are not covered by or not fully covered by the Company's other insurance policies. These insurance policies also do not generally cover punitive damages and are subject to various deductibles and policy limits. Significant legal actions, as well as the cost and possible lack of available insurance, could subject the Company to substantial uninsured liabilities. In the Company's opinion, the outcome of these actions, individually or in the aggregate, will not have a material adverse effect on its financial position, results of operations, or cash flows. | |||||
Healthcare providers are subject to lawsuits under the qui tam provisions of the federal False Claims Act. Qui tam lawsuits typically remain under seal (hence, usually unknown to the defendant) for some time while the government decides whether or not to intervene on behalf of a private qui tam plaintiff (known as a relator) and take the lead in the litigation. These lawsuits can involve significant monetary damages and penalties and award bounties to private plaintiffs who successfully bring the suits. The Company is and has been a defendant in these cases in the past, and may be named as a defendant in similar cases from time to time in the future. | |||||
On January 8, 2013, a federal magistrate judge unsealed an Amended Complaint in United States of America and the State of Indiana, ex rel. Doe I, Doe II and Doe III v. Select Medical Corporation, Select Specialty Hospital-Evansville, Evansville Physician Investment Corporation, Dr. Richard Sloan and Dr. Jeffrey Selby. The Amended Complaint, which was served on the Company on February 15, 2013, is a civil action filed under seal on September 28, 2012 in the United States District Court for the Southern District of Indiana by private plaintiff-relators on behalf of the United States and the State of Indiana under the federal False Claims Act and Indiana False Claims and Whistleblower Protection Act. Although the Amended Complaint identified the relators by fictitious pseudonyms, on March 28, 2013, the relators filed a Notice identifying themselves as the former CEO at the Company's long term acute care hospital in Evansville, Indiana ("SSH-Evansville") and two former case managers at SSH-Evansville. The named defendants include the Company, SSH-Evansville, and two physicians who have practiced at SSH-Evansville. On March 26, 2013, the defendants, relators and the United States filed a joint motion seeking a stay of the proceedings, in which the United States notified the court that its investigation has not been completed and therefore it is not yet able to decide whether or not to intervene, and on March 29, 2013, the magistrate judge granted the motion and stayed all deadlines in the case for 90 days. The court has subsequently granted additional motions filed by the United States to continue the stay, and the current stay extends through March 16, 2015. | |||||
As previously disclosed, the Company and SSH-Evansville produced documents in response to various government subpoenas and demands relating to SSH-Evansville. In September 2014, representatives of the United States Attorney's Office for the Southern District of Indiana and the Department of Justice informed the Company that, while the United States has not yet decided whether to intervene in the case, its investigation is continuing concerning the allegation that SSH-Evansville admitted patients for whom long-term acute care was not medically necessary. The Company intends to fully cooperate with this governmental investigation and is involved in ongoing discussions with the government regarding this matter. At this time, the Company is unable to predict the timing and outcome of this matter. | |||||
Supplemental_Disclosures_of_Ca
Supplemental Disclosures of Cash Flow Information | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Supplemental Disclosures of Cash Flow Information | |||||||||||
Supplemental Disclosures of Cash Flow Information | 15. Supplemental Disclosures of Cash Flow Information | ||||||||||
Non-cash investing and financing activities are comprised of the following for the years ended December 31, 2012, 2013 and 2014: | |||||||||||
Holdings | |||||||||||
For the Year Ended | |||||||||||
December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
(in thousands) | |||||||||||
Notes issued with acquisitions | $ | 1,844 | $ | 3,283 | $ | 327 | |||||
Liabilities assumed with acquisitions | 107 | 885 | 122 | ||||||||
Contingent consideration related to acquisitions | 1,500 | 100 | — | ||||||||
Accrual for property, plant and equipment | — | — | 14,230 | ||||||||
Notes issued to acquire non-consolidating interest | — | 3,399 | — | ||||||||
Select | |||||||||||
For the Year Ended | |||||||||||
December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
(in thousands) | |||||||||||
Dividends declared to Holdings by Select(1) | $ | (5,240 | ) | $ | — | $ | — | ||||
Notes issued with acquisitions | 1,844 | 3,283 | 327 | ||||||||
Liabilities assumed with acquisitions | 107 | 885 | 122 | ||||||||
Contingent consideration related to acquisitions | 1,500 | 100 | — | ||||||||
Accrual for property, plant and equipment | — | — | 14,230 | ||||||||
Notes issued to acquire non-consolidating interest | — | 3,399 | — | ||||||||
-1 | Recorded in accrued other liabilities on the consolidated balance sheet of Select. | ||||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events | |
Subsequent Events | 16. Subsequent Events |
On February 18, 2015, Select Medical's board of directors declared a cash dividend of $0.10 per share. The dividend will be payable on or about March 11, 2015 to stockholders of record as of the close of business on March 4, 2015. | |
Financial_Information_for_Subs
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes | |||||||||||||||||
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes | 17. Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes | ||||||||||||||||
Select's 6.375% senior notes are fully and unconditionally guaranteed, except for customary limitations, on a senior basis by all of Select's wholly-owned subsidiaries (the "Subsidiary Guarantors") which is defined as a subsidiary where Select or a subsidiary of Select holds all of the outstanding ownership interests. Certain of Select's subsidiaries did not guarantee the 6.375% senior notes (the "Non-Guarantor Subsidiaries"). | |||||||||||||||||
Select conducts a significant portion of its business through its subsidiaries. Presented below is consolidating financial information for Select, the Subsidiary Guarantors and the Non-Guarantor Subsidiaries at December 31, 2013 and 2014 and for the years ended December 31, 2012, 2013 and 2014. | |||||||||||||||||
The equity method has been used by Select with respect to investments in subsidiaries. The equity method has been used by Subsidiary Guarantors with respect to investments in Non-Guarantor Subsidiaries. Separate financial statements for Subsidiary Guarantors are not presented. | |||||||||||||||||
During the year ended December 31, 2014, the Company purchased the remaining outstanding non-controlling interest in a specialty hospital business changing the entity from a non-guarantor subsidiary to a guarantor subsidiary. The years ended December 31, 2013 and 2012 and as of December 31, 2013 have been retrospectively revised based on the guarantor structure that existed at December 31, 2014. | |||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Balance Sheet | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Assets | |||||||||||||||||
Current Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 70 | $ | 2,454 | $ | 830 | $ | — | $ | 3,354 | |||||||
Accounts receivable, net | — | 376,780 | 67,489 | — | 444,269 | ||||||||||||
Current deferred tax asset | 10,186 | 2,458 | 3,347 | — | 15,991 | ||||||||||||
Prepaid income taxes | 17,888 | — | — | — | 17,888 | ||||||||||||
Intercompany receivables | — | 1,698,600 | 121,447 | -1,820,047 | (a) | — | |||||||||||
Other current assets | 7,860 | 32,919 | 5,363 | — | 46,142 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Current Assets | 36,004 | 2,113,211 | 198,476 | (1,820,047 | ) | 527,644 | |||||||||||
Property and equipment, net | 17,521 | 468,138 | 56,651 | 542,310 | |||||||||||||
— | |||||||||||||||||
Investment in affiliates | 3,725,915 | 82,514 | — | -3,808,429 | (b)(c) | — | |||||||||||
Goodwill | — | 1,642,083 | — | — | 1,642,083 | ||||||||||||
Non-current deferred tax asset | 11,230 | — | — | -11,230 | (d) | — | |||||||||||
Other identifiable intangibles | — | 72,519 | — | — | 72,519 | ||||||||||||
Other assets | 32,463 | 106,843 | 947 | — | 140,253 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Assets | $ | 3,823,133 | $ | 4,485,308 | $ | 256,074 | $ | (5,639,706 | ) | $ | 2,924,809 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Liabilities and Equity | |||||||||||||||||
Current Liabilities: | |||||||||||||||||
Bank overdrafts | $ | 21,746 | $ | — | $ | — | $ | — | $ | 21,746 | |||||||
Current portion of long-term debt and notes payable | 8,496 | 1,844 | 534 | — | 10,874 | ||||||||||||
Accounts payable | 9,885 | 84,304 | 14,343 | — | 108,532 | ||||||||||||
Intercompany payables | 1,820,047 | — | — | -1,820,047 | (a) | — | |||||||||||
Accrued payroll | 17,410 | 79,435 | 245 | — | 97,090 | ||||||||||||
Accrued vacation | 5,070 | 49,315 | 8,747 | — | 63,132 | ||||||||||||
Accrued interest | 10,596 | 78 | — | — | 10,674 | ||||||||||||
Accrued other | 39,801 | 34,107 | 8,468 | — | 82,376 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Current Liabilities | 1,933,051 | 249,083 | 32,337 | (1,820,047 | ) | 394,424 | |||||||||||
Long-term debt, net of current portion | 1,098,151 | 364,794 | 79,157 | 1,542,102 | |||||||||||||
— | |||||||||||||||||
Non-current deferred tax liability | — | 112,013 | 8,420 | -11,230 | (d) | 109,203 | |||||||||||
Other non-current liabilities | 52,416 | 35,576 | 4,863 | — | 92,855 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Liabilities | 3,083,618 | 761,466 | 124,777 | (1,831,277 | ) | 2,138,584 | |||||||||||
Redeemable non-controlling interests | 10,985 | 10,985 | |||||||||||||||
— | — | — | |||||||||||||||
Stockholder's Equity: | |||||||||||||||||
Common stock | 0 | — | — | — | 0 | ||||||||||||
Capital in excess of par | 885,407 | — | — | — | 885,407 | ||||||||||||
Retained earnings (accumulated deficit) | (145,892 | ) | 1,048,455 | 8,366 | -1,056,821 | (c) | (145,892 | ) | |||||||||
Subsidiary investment | — | 2,675,387 | 76,221 | -2,751,608 | (b) | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Total Select Medical Corporation Stockholder's Equity | 739,515 | 3,723,842 | 84,587 | (3,808,429 | ) | 739,515 | |||||||||||
Non-controlling interests | — | — | 35,725 | — | 35,725 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Equity | 739,515 | 3,723,842 | 120,312 | (3,808,429 | ) | 775,240 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total Liabilities and Equity | $ | 3,823,133 | $ | 4,485,308 | $ | 256,074 | $ | (5,639,706 | ) | $ | 2,924,809 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Elimination of intercompany. | ||||||||||||||||
(b) | Elimination of investments in consolidated subsidiaries. | ||||||||||||||||
(c) | Elimination of investments in consolidated subsidiaries' earnings. | ||||||||||||||||
(d) | Reclass of non-current deferred tax asset to report net non-current deferred tax liability in consolidation. | ||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Statement of Operations | |||||||||||||||||
For the Year Ended December 31, 2014 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Net operating revenues | $ | 721 | $ | 2,634,480 | $ | 429,816 | $ | — | $ | 3,065,017 | |||||||
| | | | | | | | | | | | | | | | | |
Costs and expenses: | |||||||||||||||||
Cost of services | 2,015 | 2,209,724 | 370,601 | — | 2,582,340 | ||||||||||||
General and administrative | 86,311 | (1,064 | ) | — | — | 85,247 | |||||||||||
Bad debt expense | — | 38,052 | 6,548 | — | 44,600 | ||||||||||||
Depreciation and amortization | 3,723 | 54,876 | 9,755 | — | 68,354 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total costs and expenses | 92,049 | 2,301,588 | 386,904 | — | 2,780,541 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Income (loss) from operations | (91,328 | ) | 332,892 | 42,912 | — | 284,476 | |||||||||||
Other income and expense: | |||||||||||||||||
Intercompany interest and royalty fees | (1,142 | ) | 1,131 | 11 | — | — | |||||||||||
Intercompany management fees | 142,273 | (120,528 | ) | (21,745 | ) | — | — | ||||||||||
Equity in earnings of unconsolidated subsidiaries | — | 6,958 | 86 | — | 7,044 | ||||||||||||
Loss on early retirement of debt | (2,277 | ) | — | — | — | (2,277 | ) | ||||||||||
Interest expense | (57,651 | ) | (23,367 | ) | (4,428 | ) | — | (85,446 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Income (loss) from operations before income taxes | (10,125 | ) | 197,086 | 16,836 | — | 203,797 | |||||||||||
Income tax expense (benefit) | (4,333 | 78,748 | 1,207 | 75,622 | |||||||||||||
) | — | ||||||||||||||||
Equity in earnings of subsidiaries | 126,419 | 8,995 | — | -135,414 | (a) | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Net income | 120,627 | 127,333 | 15,629 | (135,414 | ) | 128,175 | |||||||||||
Less: Net income attributable to non-controlling interests | — | 623 | 6,925 | — | 7,548 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Net income attributable to Select Medical Corporation | $ | 120,627 | $ | 126,710 | $ | 8,704 | $ | (135,414 | ) | $ | 120,627 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Elimination of equity in earnings of consolidated subsidiaries. | ||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Statement of Cash Flows | |||||||||||||||||
For the Year Ended December 31, 2014 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Operating activities | |||||||||||||||||
Net income | $ | 120,627 | $ | 127,333 | $ | 15,629 | $ | (135,414 | )(a) | $ | 128,175 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Distributions from unconsolidated subsidiaries | — | 11,889 | 65 | — | 11,954 | ||||||||||||
Depreciation and amortization | 3,723 | 54,876 | 9,755 | — | 68,354 | ||||||||||||
Provision for bad debts | — | 38,052 | 6,548 | — | 44,600 | ||||||||||||
Equity in earnings of unconsolidated subsidiaries | — | (6,958 | ) | (86 | ) | — | (7,044 | ) | |||||||||
Loss on early retirement of debt | 2,277 | — | — | — | 2,277 | ||||||||||||
Loss (gain) from disposal or sale of assets | — | (1,168 | ) | 120 | — | (1,048 | ) | ||||||||||
Non-cash stock compensation expense | 11,186 | — | — | — | 11,186 | ||||||||||||
Amortization of debt discount, premium and issuance costs | 7,553 | — | — | — | 7,553 | ||||||||||||
Deferred income taxes | 14,311 | — | — | — | 14,311 | ||||||||||||
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | |||||||||||||||||
Equity in earnings of subsidiaries | (126,419 | ) | (8,995 | ) | — | 135,414 | (a) | — | |||||||||
Accounts receivable | — | (80,394 | ) | (17,408 | ) | — | (97,802 | ) | |||||||||
Other current assets | 1,885 | (4,004 | ) | 390 | — | (1,729 | ) | ||||||||||
Other assets | 2,811 | (2,566 | ) | (348 | ) | — | (103 | ) | |||||||||
Accounts payable | 3,136 | 2,440 | 421 | — | 5,997 | ||||||||||||
Accrued expenses | (6,353 | ) | (9,407 | ) | (279 | ) | — | (16,039 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Net cash provided by operating activities | 34,737 | 121,098 | 14,807 | — | 170,642 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Investing activities | |||||||||||||||||
Purchases of property and equipment | (4,674 | ) | (79,600 | ) | (10,972 | ) | — | (95,246 | ) | ||||||||
Investment in businesses | — | (4,634 | ) | — | — | (4,634 | ) | ||||||||||
Acquisition of businesses, net of cash acquired | — | (397 | ) | (814 | ) | — | (1,211 | ) | |||||||||
| | | | | | | | | | | | | | | | | |
Net cash used in investing activities | (4,674 | ) | (84,631 | ) | (11,786 | ) | — | (101,091 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Financing activities | |||||||||||||||||
Borrowings on revolving credit facility | 910,000 | — | — | — | 910,000 | ||||||||||||
Payments on revolving credit facility | (870,000 | ) | — | — | — | (870,000 | ) | ||||||||||
Payments on credit facility term loans | (33,994 | ) | — | — | — | (33,994 | ) | ||||||||||
Issuance of 6.375% senior notes, includes premium | 111,650 | — | — | — | 111,650 | ||||||||||||
Borrowings of other debt | 8,151 | — | 925 | — | 9,076 | ||||||||||||
Principal payments on other debt | (9,213 | ) | (2,058 | ) | (3,402 | ) | — | (14,673 | ) | ||||||||
Debt issuance costs | (4,434 | ) | — | — | — | (4,434 | ) | ||||||||||
Proceeds from bank overdrafts | 9,240 | — | — | — | 9,240 | ||||||||||||
Purchase of non-controlling interests | — | (9,961 | ) | — | — | (9,961 | ) | ||||||||||
Equity investment by Holdings | 7,355 | — | — | — | 7,355 | ||||||||||||
Dividends paid to Holdings | (184,100 | ) | — | — | — | (184,100 | ) | ||||||||||
Intercompany | 22,162 | (25,092 | ) | 2,930 | — | — | |||||||||||
Tax benefit from stock based awards | 3,119 | — | — | — | 3,119 | ||||||||||||
Proceeds from issuance of non-controlling interests | — | — | 185 | — | 185 | ||||||||||||
Distributions to non-controlling interests | — | — | (3,979 | ) | — | (3,979 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
Net cash used in financing activities | (30,064 | ) | (37,111 | ) | (3,341 | ) | — | (70,516 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Net decrease in cash and cash equivalents | (1 | ) | (644 | ) | (320 | ) | — | (965 | ) | ||||||||
Cash and cash equivalents at beginning of period | 71 | 3,098 | 1,150 | — | 4,319 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Cash and cash equivalents at end of period | $ | 70 | $ | 2,454 | $ | 830 | $ | — | $ | 3,354 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Elimination of equity in earnings of consolidated subsidiaries. | ||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Balance Sheet | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Assets | |||||||||||||||||
Current Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 71 | $ | 3,098 | $ | 1,150 | $ | — | $ | 4,319 | |||||||
Accounts receivable, net | — | 339,694 | 52,275 | -650 | (a) | 391,319 | |||||||||||
Current deferred tax asset | 7,965 | 5,221 | 4,438 | — | 17,624 | ||||||||||||
Intercompany receivables | — | 1,083,280 | 102,735 | (1,186,015 | )(b) | — | |||||||||||
Other current assets | 9,745 | 27,448 | 3,947 | — | 41,140 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Current Assets | 17,781 | 1,458,741 | 164,545 | (1,186,665 | ) | 454,402 | |||||||||||
Property and equipment, net | 15,624 | 438,057 | 55,421 | — | 509,102 | ||||||||||||
Investment in affiliates | 3,060,832 | 79,376 | — | (3,140,208 | )(c)(d) | — | |||||||||||
Goodwill | — | 1,642,633 | — | — | 1,642,633 | ||||||||||||
Non-current deferred tax asset | 7,662 | — | — | (7,662 | )(e) | — | |||||||||||
Other identifiable intangibles | — | 71,907 | — | — | 71,907 | ||||||||||||
Other assets | 35,274 | 103,687 | 617 | — | 139,578 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Assets | $ | 3,137,173 | $ | 3,794,401 | $ | 220,583 | $ | (4,334,535 | ) | $ | 2,817,622 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Liabilities and Equity | |||||||||||||||||
Current Liabilities: | |||||||||||||||||
Bank overdrafts | $ | 12,506 | $ | — | $ | — | $ | — | $ | 12,506 | |||||||
Current portion of long-term debt and notes payable | 9,107 | 7,344 | 1,114 | — | 17,565 | ||||||||||||
Accounts payable | 6,749 | 69,534 | 12,002 | — | 88,285 | ||||||||||||
Intercompany payables | 1,186,015 | — | — | -1,186,015 | (b) | — | |||||||||||
Accrued payroll | 1,167 | 88,599 | 245 | — | 90,011 | ||||||||||||
Accrued vacation | 4,619 | 47,682 | 7,429 | — | 59,730 | ||||||||||||
Accrued interest | 11,076 | 1,221 | — | — | 12,297 | ||||||||||||
Accrued other | 59,249 | 25,144 | 6,765 | (650 | )(a) | 90,508 | |||||||||||
Income taxes payable | 622 | — | — | — | 622 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Current Liabilities | 1,291,110 | 239,524 | 27,555 | (1,186,665 | ) | 371,524 | |||||||||||
Long-term debt, net of current portion | 1,006,201 | 365,460 | 56,049 | — | 1,427,710 | ||||||||||||
Non-current deferred tax liability | — | 96,488 | 7,461 | -7,662 | (e) | 96,287 | |||||||||||
Other non-current liabilities | 53,628 | 33,163 | 5,084 | — | 91,875 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Liabilities | 2,350,939 | 734,635 | 96,149 | (1,194,327 | ) | 1,987,396 | |||||||||||
Redeemable non-controlling interests | — | — | 11,584 | — | 11,584 | ||||||||||||
Stockholder's Equity: | |||||||||||||||||
Common stock | 0 | — | — | — | 0 | ||||||||||||
Capital in excess of par | 869,576 | — | — | — | 869,576 | ||||||||||||
Retained earnings | (83,342 | ) | 921,745 | 17,750 | -939,495 | (d) | (83,342 | ) | |||||||||
Subsidiary investment | — | 2,136,723 | 63,990 | -2,200,713 | (c) | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Total Select Medical Corporation Stockholder's Equity | 786,234 | 3,058,468 | 81,740 | (3,140,208 | ) | 786,234 | |||||||||||
Non-controlling interests | — | 1,298 | 31,110 | — | 32,408 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Equity | 786,234 | 3,059,766 | 112,850 | (3,140,208 | ) | 818,642 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total Liabilities and Equity | $ | 3,137,173 | $ | 3,794,401 | $ | 220,583 | $ | (4,334,535 | ) | $ | 2,817,622 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Reclass portion of due to third party payor to accounts receivable net in consolidation. | ||||||||||||||||
(b) | Elimination of intercompany. | ||||||||||||||||
(c) | Elimination of investments in consolidated subsidiaries. | ||||||||||||||||
(d) | Elimination of investments in consolidated subsidiaries' earnings. | ||||||||||||||||
(e) | Reclass of non-current deferred tax assset to report net non-current deferred tax liability in consolidation. | ||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Statement of Operations | |||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Net operating revenues | $ | 350 | $ | 2,576,906 | $ | 398,392 | $ | — | $ | 2,975,648 | |||||||
| | | | | | | | | | | | | | | | | |
Costs and expenses: | |||||||||||||||||
Cost of services | 1,757 | 2,155,370 | 338,349 | — | 2,495,476 | ||||||||||||
General and administrative | 76,709 | 212 | — | — | 76,921 | ||||||||||||
Bad debt expense | — | 31,173 | 6,250 | — | 37,423 | ||||||||||||
Depreciation and amortization | 3,746 | 51,825 | 8,821 | — | 64,392 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total costs and expenses | 82,212 | 2,238,580 | 353,420 | — | 2,674,212 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Income (loss) from operations | (81,862 | ) | 338,326 | 44,972 | — | 301,436 | |||||||||||
Other income and expense: | |||||||||||||||||
Intercompany interest and royalty fees | (1,326 | ) | 836 | 490 | — | — | |||||||||||
Intercompany management fees | 144,447 | (125,357 | ) | (19,090 | ) | — | — | ||||||||||
Equity in earnings of unconsolidated subsidiaries | — | 2,384 | 92 | — | 2,476 | ||||||||||||
Loss on early retirement of debt | (17,788 | ) | — | — | — | (17,788 | ) | ||||||||||
Interest expense | (58,100 | ) | (22,916 | ) | (3,938 | ) | — | (84,954 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Income (loss) from operations before income taxes | (14,629 | ) | 193,273 | 22,526 | — | 201,170 | |||||||||||
Income tax expense (benefit) | (1,238 | ) | 76,837 | 372 | — | 75,971 | |||||||||||
Equity in earnings of subsidiaries | 129,971 | 14,561 | — | (144,532 | )(a) | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Net income | 116,580 | 130,997 | 22,154 | (144,532 | ) | 125,199 | |||||||||||
Less: Net income attributable to non-controlling interests | — | 995 | 7,624 | — | 8,619 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Net income attributable to Select Medical Corporation | $ | 116,580 | $ | 130,002 | $ | 14,530 | $ | (144,532 | ) | $ | 116,580 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Elimination of equity in earnings of subsidiaries. | ||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Statement of Cash Flows | |||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Operating activities | |||||||||||||||||
Net income | $ | 116,580 | $ | 130,997 | $ | 22,154 | $ | (144,532 | )(a) | $ | 125,199 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 3,746 | 51,825 | 8,821 | — | 64,392 | ||||||||||||
Provision for bad debts | — | 31,173 | 6,250 | — | 37,423 | ||||||||||||
Equity in earnings of unconsolidated subsidiaires | — | (2,384 | ) | (92 | ) | — | (2,476 | ) | |||||||||
Loss on early retirement of debt | 17,788 | — | — | — | 17,788 | ||||||||||||
Gain from disposal or sale of assets | — | (463 | ) | (118 | ) | — | (581 | ) | |||||||||
Non-cash stock compensation expense | 7,033 | — | — | — | 7,033 | ||||||||||||
Amortization of debt discount and issuance costs | 8,344 | — | — | — | 8,344 | ||||||||||||
Deferred income taxes | 7,032 | — | — | — | 7,032 | ||||||||||||
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | |||||||||||||||||
Equity in earnings of subsidiaries | (129,971 | ) | (14,561 | ) | — | 144,532 | (a) | — | |||||||||
Accounts receivable | — | (60,460 | ) | (6,685 | ) | — | (67,145 | ) | |||||||||
Other current assets | (4,145 | ) | (5,849 | ) | 1,827 | — | (8,167 | ) | |||||||||
Other assets | (6,594 | ) | 3,026 | 84 | — | (3,484 | ) | ||||||||||
Accounts payable | 2,075 | (3,746 | ) | 388 | — | (1,283 | ) | ||||||||||
Accrued expenses | (4,929 | ) | 23,910 | (4,954 | ) | — | 14,027 | ||||||||||
| | | | | | | | | | | | | | | | | |
Net cash provided by operating activities | 16,959 | 153,468 | 27,675 | — | 198,102 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Investing activities | |||||||||||||||||
Purchases of property and equipment | (3,024 | ) | (60,532 | ) | (10,104 | ) | — | (73,660 | ) | ||||||||
Investment in businesses | — | (34,893 | ) | — | — | (34,893 | ) | ||||||||||
Acquisition of businesses, net of cash acquired | — | (1,665 | ) | — | — | (1,665 | ) | ||||||||||
Proceeds from sale of assets | — | 2,456 | 456 | — | 2,912 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Net cash used in investing activities | (3,024 | ) | (94,634 | ) | (9,648 | ) | — | (107,306 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Financing activities | |||||||||||||||||
Borrowings on revolving credit facility | 690,000 | — | — | — | 690,000 | ||||||||||||
Payments on revolving credit facility | (800,000 | ) | — | — | — | (800,000 | ) | ||||||||||
Borrowings on credit facility term loans, net of discount | 298,500 | — | — | — | 298,500 | ||||||||||||
Payments on credit facility term loans | (596,720 | ) | — | — | — | (596,720 | ) | ||||||||||
Issuance of 6.375% senior notes | 600,000 | — | — | — | 600,000 | ||||||||||||
Repurchase of 75/8% senior subordinated notes | (70,000 | ) | — | — | — | (70,000 | ) | ||||||||||
Borrowings of other debt | 8,923 | 5,303 | 1,084 | — | 15,310 | ||||||||||||
Principal payments on other debt | (7,752 | ) | (873 | ) | (2,209 | ) | — | (10,834 | ) | ||||||||
Debt issuance costs | (18,914 | ) | — | — | — | (18,914 | ) | ||||||||||
Repayments of bank overdrafts | (5,330 | ) | — | — | — | (5,330 | ) | ||||||||||
Equity investment by Holdings | 1,525 | — | — | — | 1,525 | ||||||||||||
Dividends paid to Holdings | (226,621 | ) | — | — | — | (226,621 | ) | ||||||||||
Intercompany | 77,455 | (63,900 | ) | (13,555 | ) | — | — | ||||||||||
Distributions to non-controlling interests | — | — | (3,537 | ) | — | (3,537 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
Net cash used in financing activities | (48,934 | ) | (59,470 | ) | (18,217 | ) | — | (126,621 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Net decrease in cash and cash equivalents | (34,999 | ) | (636 | ) | (190 | ) | — | (35,825 | ) | ||||||||
Cash and cash equivalents at beginning of period | 35,070 | 3,734 | 1,340 | 40,144 | |||||||||||||
— | |||||||||||||||||
| | | | | | | | | | | | | | | | | |
Cash and cash equivalents at end of period | $ | 71 | $ | 3,098 | $ | 1,150 | $ | — | $ | 4,319 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Elimination of equity in earnings of consolidated subsidiaries. | ||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Statement of Operations | |||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Net operating revenues | $ | 123 | $ | 2,572,301 | $ | 376,545 | $ | — | $ | 2,948,969 | |||||||
| | | | | | | | | | | | | | | | | |
Costs and expenses: | |||||||||||||||||
Cost of services | 2,139 | 2,118,614 | 322,797 | — | 2,443,550 | ||||||||||||
General and administrative | 67,402 | (1,208 | ) | — | — | 66,194 | |||||||||||
Bad debt expense | — | 33,851 | 5,204 | — | 39,055 | ||||||||||||
Depreciation and amortization | 3,267 | 51,436 | 8,608 | — | 63,311 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total costs and expenses | 72,808 | 2,202,693 | 336,609 | — | 2,612,110 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Income (loss) from operations | (72,685 | ) | 369,608 | 39,936 | — | 336,859 | |||||||||||
Other income and expense: | |||||||||||||||||
Intercompany interest and royalty fees | (2,532 | ) | 2,502 | 30 | — | — | |||||||||||
Intercompany management fees | 120,276 | (102,599 | ) | (17,677 | ) | — | — | ||||||||||
Loss on early retirement of debt | (6,064 | ) | — | — | — | (6,064 | ) | ||||||||||
Equity in earnings of unconsolidated subsidiaries | — | 7,637 | 68 | — | 7,705 | ||||||||||||
Interest expense | (54,167 | ) | (25,488 | ) | (4,104 | ) | — | (83,759 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Income (loss) from operations before income taxes | (15,172 | ) | 251,660 | 18,253 | — | 254,741 | |||||||||||
Income tax expense (benefit) | (8,206 | 101,867 | (87 | 93,574 | |||||||||||||
) | ) | — | |||||||||||||||
Equity in earnings of subsidiaries | 162,470 | 14,409 | — | (176,879 | )(a) | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Net income | 155,504 | 164,202 | 18,340 | (176,879 | ) | 161,167 | |||||||||||
Less: Net income attributable to non-controlling interests | 630 | 5,033 | 5,663 | ||||||||||||||
— | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | |
Net income attributable to Select Medical Corporation | $ | 155,504 | $ | 163,572 | $ | 13,307 | $ | (176,879 | ) | $ | 155,504 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Elimination of equity in earnings of subsidiaries. | ||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Statement of Cash Flows | |||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Operating activities | |||||||||||||||||
Net income | $ | 155,504 | $ | 164,202 | $ | 18,340 | $ | (176,879 | )(a) | $ | 161,167 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 3,267 | 51,436 | 8,608 | — | 63,311 | ||||||||||||
Provision for bad debts | — | 33,851 | 5,204 | — | 39,055 | ||||||||||||
Equity in earnings of unconsolidated subsidiaires | — | (7,637 | ) | (68 | ) | — | (7,705 | ) | |||||||||
Loss on early retirement of debt | 6,064 | — | — | — | 6,064 | ||||||||||||
Loss (gain) from disposal or sale of assets | — | (6,002 | ) | 96 | — | (5,906 | ) | ||||||||||
Non-cash stock compensation expense | 5,677 | — | — | — | 5,677 | ||||||||||||
Amortization of debt discount and issuance costs | 7,190 | — | — | — | 7,190 | ||||||||||||
Deferred income taxes | 7,909 | — | — | — | 7,909 | ||||||||||||
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | |||||||||||||||||
Equity in earnings of subsidiaries | (162,470 | ) | (14,409 | ) | — | 176,879 | (a) | — | |||||||||
Accounts receivable | — | 29,102 | (13,944 | ) | — | 15,158 | |||||||||||
Other current assets | 740 | 9 | (2,356 | ) | — | (1,607 | ) | ||||||||||
Other assets | 2,448 | 3,268 | 161 | — | 5,877 | ||||||||||||
Accounts payable | (2,679 | ) | (4,189 | ) | 751 | — | (6,117 | ) | |||||||||
Accrued expenses | 25,350 | (19,861 | ) | 13,809 | — | 19,298 | |||||||||||
| | | | | | | | | | | | | | | | | |
Net cash provided by operating activities | 49,000 | 229,770 | 30,601 | — | 309,371 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Investing activities | |||||||||||||||||
Purchases of property and equipment | (5,150 | ) | (49,160 | ) | (13,875 | ) | — | (68,185 | ) | ||||||||
Proceeds from sale of assets | — | 16,511 | — | — | 16,511 | ||||||||||||
Investment in businesses, net of distributions | — | (14,689 | ) | — | — | (14,689 | ) | ||||||||||
Acquisition of businesses, net of cash acquired | — | (6,043 | ) | — | — | (6,043 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
Net cash used in investing activities | (5,150 | ) | (53,381 | ) | (13,875 | ) | — | (72,406 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Financing activities | |||||||||||||||||
Borrowings on revolving credit facility | 495,000 | — | — | — | 495,000 | ||||||||||||
Payments on revolving credit facility | (405,000 | ) | — | — | — | (405,000 | ) | ||||||||||
Borrowings on credit facility term loans, net of discount | 266,750 | — | — | — | 266,750 | ||||||||||||
Payments on credit facility term loans | (9,875 | ) | — | — | — | (9,875 | ) | ||||||||||
Repurchase of 75/8% senior subordinated notes | (278,495 | ) | — | — | — | (278,495 | ) | ||||||||||
Borrowings of other debt | 8,003 | — | 278 | — | 8,281 | ||||||||||||
Principal payments on other debt | (8,049 | ) | (433 | ) | (1,813 | ) | — | (10,295 | ) | ||||||||
Debt issuance costs | (6,527 | ) | — | — | — | (6,527 | ) | ||||||||||
Dividends paid to Holdings | (268,479 | ) | — | — | — | (268,479 | ) | ||||||||||
Equity investment by Holdings | 1,817 | — | — | — | 1,817 | ||||||||||||
Proceeds from bank overdrafts | 1,227 | — | — | — | 1,227 | ||||||||||||
Intercompany | 183,421 | (172,222 | ) | (11,199 | ) | — | — | ||||||||||
Distributions to non-controlling interests | — | — | (3,268 | ) | — | (3,268 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
Net cash used in financing activities | (20,207 | ) | (172,655 | ) | (16,002 | ) | — | (208,864 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Net increase in cash and cash equivalents | 23,643 | 3,734 | 724 | — | 28,101 | ||||||||||||
Cash and cash equivalents at beginning of period | 11,427 | 616 | 12,043 | ||||||||||||||
— | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | |
Cash and cash equivalents at end of period | $ | 35,070 | $ | 3,734 | $ | 1,340 | $ | — | $ | 40,144 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Elimination of equity in earnings of consolidated subsidiaries. | ||||||||||||||||
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Selected Quarterly Financial Data (Unaudited) | ||||||||||||||
Selected Quarterly Financial Data (Unaudited) | 18. Selected Quarterly Financial Data (Unaudited) | |||||||||||||
The table below sets forth selected unaudited financial data for each quarter of the last two years. | ||||||||||||||
Holdings | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
(in thousands, except per share amounts) | ||||||||||||||
Year ended December 31, 2013 | ||||||||||||||
Net operating revenues | $ | 749,955 | $ | 756,673 | $ | 722,845 | $ | 746,175 | ||||||
Income from operations | 82,530 | 88,263 | 62,399 | 68,244 | ||||||||||
Net income attributable to Select Medical Holdings Corporation | $ | 34,418 | $ | 27,780 | $ | 23,272 | $ | 28,920 | ||||||
Income per common share: | ||||||||||||||
Basic | $ | 0.25 | $ | 0.20 | $ | 0.17 | $ | 0.21 | ||||||
Diluted | $ | 0.24 | $ | 0.20 | $ | 0.17 | $ | 0.21 | ||||||
Select | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
(in thousands) | ||||||||||||||
Year ended December 31, 2013 | ||||||||||||||
Net operating revenues | $ | 749,955 | $ | 756,673 | $ | 722,845 | $ | 746,175 | ||||||
Income from operations | 82,530 | 88,263 | 62,399 | 68,244 | ||||||||||
Net income attributable to Select Medical Corporation | $ | 36,608 | $ | 27,780 | $ | 23,272 | $ | 28,920 | ||||||
Holdings | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
(in thousands, except per share amounts) | ||||||||||||||
Year ended December 31, 2014 | ||||||||||||||
Net operating revenues | $ | 762,578 | $ | 772,762 | $ | 758,069 | $ | 771,608 | ||||||
Income from operations | 78,444 | 82,193 | 66,017 | 57,822 | ||||||||||
Net income attributable to Select Medical Holdings Corporation | $ | 33,044 | $ | 35,341 | $ | 26,530 | $ | 25,712 | ||||||
Income per common share: | ||||||||||||||
Basic | $ | 0.24 | $ | 0.27 | $ | 0.20 | $ | 0.20 | ||||||
Diluted | $ | 0.24 | $ | 0.27 | $ | 0.20 | $ | 0.20 | ||||||
Select | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
(in thousands) | ||||||||||||||
Year ended December 31, 2014 | ||||||||||||||
Net operating revenues | $ | 762,578 | $ | 772,762 | $ | 758,069 | $ | 771,608 | ||||||
Income from operations | 78,444 | 82,193 | 66,017 | 57,822 | ||||||||||
Net income attributable to Select Medical Corporation | $ | 33,044 | $ | 35,341 | $ | 26,530 | $ | 25,712 | ||||||
Schedule_II_Valuation_and_Qual
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Schedule II - Valuation and Qualifying Accounts | ||||||||||||||
Schedule II - Valuation and Qualifying Accounts | ||||||||||||||
Schedule II — Valuation and Qualifying Accounts | ||||||||||||||
Description | Balance at | Charged to | Deductions(A) | Balance at | ||||||||||
Beginning | Cost and | End of Year | ||||||||||||
of Year | Expenses | |||||||||||||
Allowance for Doubtful Accounts | ||||||||||||||
Year ended December 31, 2014 | $ | 40,815 | $ | 44,600 | $ | (38,990 | ) | $ | 46,425 | |||||
Year ended December 31, 2013 | $ | 41,854 | $ | 37,423 | $ | (38,462 | ) | $ | 40,815 | |||||
Year ended December 31, 2012 | $ | 47,469 | $ | 39,055 | $ | (44,670 | ) | $ | 41,854 | |||||
Income Tax Valuation Allowance | ||||||||||||||
Year ended December 31, 2014 | $ | 10,547 | $ | (906 | ) | $ | — | $ | 9,641 | |||||
Year ended December 31, 2013 | $ | 13,341 | $ | (2,794 | ) | $ | — | $ | 10,547 | |||||
Year ended December 31, 2012 | $ | 15,733 | $ | (2,392 | ) | $ | — | $ | 13,341 | |||||
(A) | Allowance for doubtful accounts deductions represent write-offs against the reserve for 2012, 2013 and 2014. | |||||||||||||
Organization_and_Significant_A1
Organization and Significant Accounting Policies (Policies) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Organization and Significant Accounting Policies | |||
Principles of Consolidation | Principles of Consolidation | ||
The consolidated financial statements include the accounts of the Company, its majority owned subsidiaries, limited liability companies and limited partnerships the Company and its subsidiaries control through ownership of general and limited partnership or membership interests. All significant intercompany balances and transactions are eliminated in consolidation. | |||
Use of Estimates | Use of Estimates | ||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. | |||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents are stated at cost which approximates market value. | |||
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts | ||
The Company reports accounts receivable at estimated net realizable values. Substantially all of the Company's accounts receivable are related to providing healthcare services to patients whose costs are primarily paid by federal and state governmental authorities, managed care health plans, commercial insurance companies and workers' compensation programs. Collection of these accounts receivable is the Company's primary source of cash and is critical to its operating performance. The Company's primary collection risks relate to non-governmental payors who insure these patients and deductibles, co-payments and amounts owed by the patient. Deductibles, co-payments and amounts owed by the patient are an immaterial portion of the Company's net accounts receivable balance and accounted for approximately 0.3% and 0.2% of the net accounts receivable balance before doubtful accounts at December 31, 2013 and 2014, respectively. The Company's general policy is to verify insurance coverage prior to the date of admission for a patient admitted to the Company's hospitals or in the case of the Company's outpatient rehabilitation clinics, the Company verifies insurance coverage prior to their first therapy visit. The Company's estimate for the allowance for doubtful accounts is calculated by providing a reserve allowance based upon the age of an account balance. Generally the Company has reserved as uncollectible all governmental accounts over 365 days and non-governmental accounts over 180 days from discharge. This method is monitored based on historical cash collections experience. Collections are impacted by the effectiveness of the Company's collection efforts with non-governmental payors and regulatory or administrative disruptions with the fiscal intermediaries that pay the Company's governmental receivables. Uncollected accounts are written off the balance sheet when they are turned over to an outside collection agency, or when management determines that the balance is uncollectible, whichever occurs first. | |||
Property and Equipment | Property and Equipment | ||
Property and equipment are stated at cost net of accumulated depreciation. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets or the term of the lease, as appropriate. The general range of useful lives is as follows: | |||
Leasehold improvements | 5 – 15 years | ||
Furniture and equipment | 3 – 20 years | ||
Buildings | 40 years | ||
Building Improvements | 5 – 25 years | ||
Land Improvements | 2 – 25 years | ||
The Company reviews the realizability of long-lived assets whenever events or circumstances occur which indicate recorded costs may not be recoverable. Gains or losses related to the retirement or disposal of property and equipment are reported as a component of income from operations. | |||
Concentration of Credit Risk | Concentration of Credit Risk | ||
Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash balances and trade receivables. The Company invests its excess cash with large financial institutions. The Company grants unsecured credit to its patients, most of who reside in the service area of the Company's facilities and are insured under third-party payor agreements. Because of the geographic diversity of the Company's facilities and non-governmental third-party payors, Medicare represents the Company's only significant concentration of credit risk. | |||
Income Taxes | Income Taxes | ||
Deferred tax assets and liabilities are recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. As part of the process of preparing its consolidated financial statements, the Company estimates income taxes based on its actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for book and tax purposes. The Company also recognizes as deferred tax assets the future tax benefits from net operating loss carry forwards. The Company evaluates the realizability of these deferred tax assets by assessing their valuation allowances and by adjusting the amount of such allowances, if necessary. Among the factors used to assess the likelihood of realization are projections of future taxable income streams, the expected timing of the reversals of existing temporary differences, and the impact of tax planning strategies that could be implemented to avoid the potential loss of future tax benefits. | |||
Reserves for uncertain tax positions are established for exposure items related to various federal and state tax matters. Income tax reserves are recorded when an exposure is identified and when, in the opinion of management, it is more likely than not that a tax position will not be sustained and the amount of the liability can be estimated. | |||
Intangible Assets | Intangible Assets | ||
Goodwill and certain other indefinite-lived intangible assets are not amortized, but instead are subject to periodic impairment evaluations. In performing the quantitative periodic impairment tests, the fair value of the reporting unit is compared to its carrying value, including goodwill and other intangible assets. If the carrying value exceeds the fair value, an impairment condition exists, which results in an impairment loss equal to the excess carrying value. | |||
To determine the fair value of its reporting units, the Company uses a discounted cash flow approach. Included in this analysis are assumptions regarding revenue growth rate, future Adjusted EBITDA margin estimates, future general and administrative expense rates and the industry's weighted average cost of capital and industry specific market comparable Adjusted EBITDA multiples. The Company also must estimate residual values at the end of the forecast period and future capital expenditure requirements. Each of these assumptions requires the Company to use its knowledge of (1) its industry, (2) its recent transactions, and (3) reasonable performance expectations for its operations. If any one of the above assumptions changes or fails to materialize, the resulting decline in the Company's estimated fair value could result in a material impairment charge to the goodwill associated with any one of the reporting units. | |||
Impairment tests are required to be conducted at least annually, or when events or conditions occur that might suggest a possible impairment. These events or conditions include, but are not limited to, a significant adverse change in the business environment, regulatory environment or legal factors; a current period operating or cash flow loss combined with a history of such losses or a projection of continuing losses; or a sale or disposition of a significant portion of a reporting unit. The occurrence of one of these events or conditions could significantly impact an impairment assessment, necessitating an impairment charge. For purposes of goodwill impairment assessment, the Company has defined its reporting units as specialty hospitals, outpatient rehabilitation clinics and contract therapy with goodwill having been allocated among reporting units based on the relative fair value of those divisions when the Merger occurred in 2005 and based on subsequent acquisitions and dispositions. The Company's most recent impairment assessment was completed during the fourth quarter of 2014 utilizing financial information as of October 1, 2014 and indicated that there was no impairment with respect to goodwill or other recorded intangible assets. | |||
Identifiable assets and liabilities acquired in connection with business combinations accounted for under the purchase method are recorded at their respective fair values. Deferred income taxes have been recorded to the extent of differences between the fair value and the tax basis of the assets acquired and liabilities assumed. Company management has allocated the intangible assets between identifiable intangibles and goodwill. At December 31, 2014, intangible assets other than goodwill consist of the values assigned to trademarks, certificates of need and accreditations. Management believes that the estimated useful lives established are reasonable based on the economic factors applicable to each of the intangible assets. | |||
The approximate useful life of each class of intangible assets is as follows: | |||
Trademarks | Indefinite | ||
Certificates of need | Indefinite | ||
Accreditations | Indefinite | ||
The Company reviews the realizability of intangible assets whenever events or circumstances occur which indicate recorded amounts may not be recoverable. | |||
If the expected future cash flows (undiscounted) are less than the carrying amount of such assets, the Company recognizes an impairment loss for the difference between the carrying amount of the assets and their estimated fair value. | |||
Deferred Financing Costs | Deferred Financing Costs | ||
The Company has incurred debt issuance costs related to indebtedness which are recognized as other assets in the consolidated balance sheet. Debt issuance costs are subsequently amortized and recognized as interest expense using the effective interest method over the term of the related indebtedness. Whenever indebtedness is modified from its original terms an evaluation is made whether an accounting modification or accounting extinguishment has occurred in order to determine the accounting treatment for debt issuance costs related to the debt modification. | |||
Due to Third-Party Payors | Due to Third-Party Payors | ||
Due to third-party payors represents the difference between amounts received under interim payment plans from Medicare and Medicaid for services rendered and amounts estimated to be reimbursed by those third-party payors upon settlement of cost reports. | |||
Insurance Risk Programs | Insurance Risk Programs | ||
Under a number of the Company's insurance programs, which include the Company's employee health insurance program, its workers' compensation and professional malpractice liability insurance programs, the Company is liable for a portion of its losses. In these situations the Company accrues for its losses under an occurrence-based approach whereby the Company estimates the losses that will be incurred in a respective accounting period and accrues that estimated liability using actuarial methods. These programs are monitored quarterly and estimates are revised as necessary to take into account additional information. Provisions for losses for professional liability risks retained by the Company at December 31, 2013 and 2014 have been discounted at 3%. At December 31, 2013 and 2014, respectively, the Company had recorded a liability of $103.4 million and $101.9 million related to these programs. If the Company did not discount the provisions for losses for professional liability risks, the aggregate liability for all of the insurance risk programs would be approximately $106.8 million and $105.5 million at December 31, 2013 and 2014, respectively. | |||
Equity Method Investments | Equity Method Investments | ||
Investments in equity method investees are accounted for using the equity method based upon the level of ownership and/or the Company's ability to exercise significant influence over the operating and financial policies of the investee. Investments of this nature are recorded at original cost and adjusted periodically to recognize the Company's proportionate share of the investees' net income or losses after the date of investment. When net losses from an investment accounted for under the equity method exceeds its carrying amount, the investment balance is reduced to zero. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company's share of that net income exceeds the share of the net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred. The Company evaluates its investments in companies accounted for using the equity method for impairment when there is evidence or indicators that a decrease in value may be other than temporary. The Company's Other Assets are primarily composed of equity method investments as of December 31, 2013 and 2014. The Company's equity method investments consist principally of non-consolidating interests in inpatient and outpatient rehabilitation businesses. These rehabilitation businesses include a 49.0% non-consolidating interest in BIR, JV, LLP; a 49.0% non-consolidating interest in OHRH, LLC, a 49.0% non-consolidating interest in GlobalRehab — Scottsdale, LLC, a 50.0% non-consolidating interest in Rehabilitation Institute of Denton, LLC, and a 49.0% non-consolidating interest in ES Rehabilitation, LLC as of December 31, 2013 and 2014. The Company's equity method investments had equity in earnings of unconsolidated subsidiaries of $7.7 million, $2.5 million and $7.0 million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||
Non-Controlling Interests | Non-Controlling Interests | ||
The interests held by other parties in subsidiaries, limited liability companies and limited partnerships owned and controlled by the Company are generally reported as a component of stockholders' equity. Some of those minority ownership interests consist of outside owners that have certain "put rights," that are currently exercisable, and that, if exercised, require the Company to purchase the minority member's interest. These redeemable non-controlling interests that are currently redeemable or considered probable of becoming redeemable have been adjusted to their approximate redemption values and are reported outside of the stockholders' equity section. As of December 31, 2013 and 2014, the Company believes the redemption values of the non-controlling ownership interests approximates the fair value of those interests classified as redeemable non-controlling interests. The redeemable non-controlling interests' balances reported on our consolidated balance sheets were $11.6 million and $11.0 million as of December 31, 2013 and 2014, respectively. The non-controlling interests' balances reported in the stockholders' equity section of our consolidated balance sheets were $32.4 million and $35.7 million as of December 31, 2013 and 2014, respectively. | |||
Net income attributable to non-controlling interests was $5.7 million, $8.6 million and $7.5 million for the years ended December 31, 2012, 2013, and 2014, respectively. Non-controlling interests reported in the consolidated statement of operations and comprehensive income reflect the respective interests in the income or loss of the subsidiaries, attributable to the other parties, the effect of which is removed from the Company's consolidated statement of operations and comprehensive income. | |||
Revenue Recognition | Revenue Recognition | ||
Net operating revenues consists primarily of patient service revenues and revenues generated from therapy services provided to healthcare institutions under contractual arrangements and are recognized as services are rendered. | |||
Patient service revenue is reported net of provisions for contractual allowances from third-party payors and patients. The Company has agreements with third-party payors that provide for payments to the Company at amounts different from its established billing rates. The differences between the estimated program reimbursement rates and the standard billing rates are accounted for as contractual adjustments, which are deducted from gross revenues to arrive at net operating revenues. Payment arrangements include prospectively determined rates per discharge, reimbursed costs, discounted charges, per diem and per visit payments. Retroactive adjustments are accrued on an estimated basis in the period the related services are rendered and adjusted in future periods as final settlements are determined. Accounts receivable resulting from such payment arrangements are recorded net of contractual allowances. | |||
A significant portion of the Company's net operating revenues are generated directly from the Medicare program. Net operating revenues generated directly from the Medicare program represented approximately 47%, 46% and 45% of the Company's net operating revenues for the years ended December 31, 2012, 2013 and 2014, respectively. Approximately 32% of the Company's accounts receivable (after allowances for contractual adjustments but before doubtful accounts) at both December 31, 2013 and 2014, are from Medicare. As a provider of services to the Medicare program, the Company is subject to extensive regulations. The inability of any of the Company's specialty hospitals or clinics to comply with regulations can result in significant changes in that specialty hospital's or clinic's net operating revenues generated from the Medicare program. | |||
Revenues generated under contractual arrangements are comprised primarily of billings for services rendered to nursing homes, hospitals, schools and other third parties. | |||
Stock Based Compensation | Stock Based Compensation | ||
The Company measures the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognizes the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements comprise both stock options and restricted share plans. Employee stock options are valued using the Black-Scholes option valuation method which uses assumptions that relate to the expected volatility of the Company's common stock, the expected dividend yield of the Company's stock, the expected life of the options and the risk free interest rate. Such compensation amounts are amortized over the respective vesting periods or periods of service of the option grant. The Company values restricted stock grants by using the closing market price of its stock on the date of grant. | |||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, which supersedes most of the current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. This guidance is effective for the Company in the first quarter of 2017 and early application is not permitted. Entities must adopt the new guidance using one of two retrospective application methods. The Company is currently evaluating the standard to determine the impact of its adoption on the consolidated financial statements. | |||
In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for determining which disposals can be presented as discontinued operations and modifies the related disclosure requirements. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that represents a strategic shift that has, or will have, a major effect on an entity's operations and financial results. The revised guidance is effective for annual fiscal periods beginning after December 15, 2014. Early adoption is permitted and the Company intends to prospectively adopt ASU No. 2014-08, as applicable. | |||
Organization_and_Significant_A2
Organization and Significant Accounting Policies (Tables) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Organization and Significant Accounting Policies | |||
Schedule of general range of useful lives of property and equipment | |||
Leasehold improvements | 5 – 15 years | ||
Furniture and equipment | 3 – 20 years | ||
Buildings | 40 years | ||
Building Improvements | 5 – 25 years | ||
Land Improvements | 2 – 25 years | ||
Schedule of approximate useful life of each class of intangible assets | |||
Trademarks | Indefinite | ||
Certificates of need | Indefinite | ||
Accreditations | Indefinite | ||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property and Equipment | ||||||||
Schedule of components of property and equipment | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
(in thousands) | ||||||||
Land | $ | 68,492 | $ | 71,635 | ||||
Leasehold improvements | 146,117 | 155,648 | ||||||
Buildings | 368,968 | 396,228 | ||||||
Furniture and equipment | 256,079 | 272,919 | ||||||
Construction-in-progress | 26,639 | 41,230 | ||||||
| | | | | | | | |
866,295 | 937,660 | |||||||
Less: accumulated depreciation | 357,193 | 395,350 | ||||||
| | | | | | | | |
Total property and equipment | $ | 509,102 | $ | 542,310 | ||||
| | | | | | | | |
| | | | | | | | |
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Intangible Assets | |||||||||||
Schedule of gross carrying amounts of the Company's indefinite-lived intangible assets | |||||||||||
December 31, | |||||||||||
2013 | 2014 | ||||||||||
(in thousands) | |||||||||||
Goodwill | $ | 1,642,633 | $ | 1,642,083 | |||||||
Trademarks | 57,709 | 57,709 | |||||||||
Certificates of need | 12,115 | 12,727 | |||||||||
Accreditations | 2,083 | 2,083 | |||||||||
| | | | | | | | ||||
Total | $ | 1,714,540 | $ | 1,714,602 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of changes in the carrying amount of goodwill for the Company's reportable segments | |||||||||||
Specialty | Outpatient | Total | |||||||||
Hospitals | Rehabilitation | ||||||||||
(in thousands) | |||||||||||
Balance as of January 1, 2013 | $ | 1,333,220 | $ | 307,314 | $ | 1,640,534 | |||||
Goodwill acquired during year | 1,395 | 837 | 2,232 | ||||||||
Purchase accounting adjustment | — | (133 | ) | (133 | ) | ||||||
| | | | | | | | | | | |
Balance as of December 31, 2013 | $ | 1,334,615 | $ | 308,018 | $ | 1,642,633 | |||||
Goodwill acquired during year | 855 | 1,011 | 1,866 | ||||||||
Goodwill allocated to contributed business | — | (2,406 | ) | (2,406 | ) | ||||||
Purchase accounting adjustment | (10 | ) | — | (10 | ) | ||||||
| | | | | | | | | | | |
Balance as of December 31, 2014 | $ | 1,335,460 | $ | 306,623 | $ | 1,642,083 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
LongTerm_Debt_and_Notes_Payabl1
Long-Term Debt and Notes Payable (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Long-Term Debt and Notes Payable | ||||||||
Schedule of components of long-term debt and notes payable | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
(in thousands) | ||||||||
6.375% senior notes(1) | $ | 600,000 | $ | 711,465 | ||||
Senior secured credit facilities: | ||||||||
Revolving loan | 20,000 | 60,000 | ||||||
Term loans(2) | 807,815 | 775,996 | ||||||
Other | 17,460 | 5,515 | ||||||
| | | | | | | | |
Total debt | 1,445,275 | 1,552,976 | ||||||
Less: current maturities | 17,565 | 10,874 | ||||||
| | | | | | | | |
Total long-term debt | $ | 1,427,710 | $ | 1,542,102 | ||||
| | | | | | | | |
| | | | | | | | |
-1 | Includes unamortized premium of $1.5 million at December 31, 2014. | |||||||
-2 | Includes unamortized discounts of $6.3 million and $4.2 million at December 31, 2013 and 2014, respectively. | |||||||
Schedule of maturities of the Company's long-term debt | Maturities of the Company's long-term debt for the years after 2014 are approximately as follows and are presented including the discounts on the senior secured credit facility term loans and premium on the senior notes (in thousands): | |||||||
2015 | $ | 10,874 | ||||||
2016 | 287,037 | |||||||
2017 | 4,289 | |||||||
2018 | 540,227 | |||||||
2019 | 228 | |||||||
2020 and beyond | 710,321 | |||||||
Stock_Option_and_Restricted_St1
Stock Option and Restricted Stock Plans (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Stock option and restricted stock plans | |||||||||||||||||
Summary of restricted stock issuances | The following is a summary of restricted stock issuances from January 1, 2012 through December 31, 2014: | ||||||||||||||||
Number of Shares Issued | Fair Value of Common Stock | ||||||||||||||||
(share amounts in thousands) | |||||||||||||||||
March 26, 2012 | 65 | 8.33 | |||||||||||||||
May 2, 2012 | 129 | 8.67 | |||||||||||||||
August 7, 2012 | 38 | 11.84 | |||||||||||||||
October 30, 2012 | 530 | 10.75 | |||||||||||||||
January 2, 2013 | 5 | 9.90 | |||||||||||||||
February 20, 2013 | 35 | 8.80 | |||||||||||||||
May 1, 2013 | 115 | 8.06 | |||||||||||||||
August 7, 2013 | 38 | 8.89 | |||||||||||||||
October 30, 2013 | 760 | 8.50 | |||||||||||||||
February 19, 2014 | 193 | 11.16 | |||||||||||||||
April 30, 2014 | 158 | 13.96 | |||||||||||||||
August 6, 2014 | 1,010 | 15.75 | |||||||||||||||
October 29, 2014 | 225 | 12.97 | |||||||||||||||
Schedule of stock compensation expense for each of the next five years | Stock compensation expense for each of the next five years, based on restricted stock awards granted as of December 31, 2014, is estimated to be as follows: | ||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||
(in thousands) | |||||||||||||||||
Stock compensation expense | $ | 12,781 | $ | 9,438 | $ | 4,859 | $ | 905 | $ | 56 | |||||||
Schedule of stock compensation expense recognized related to restricted stock and stock option awards | |||||||||||||||||
For the Year Ended | |||||||||||||||||
December 31, | |||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||
(in thousands) | |||||||||||||||||
Stock compensation expense: | |||||||||||||||||
Included in general and administrative | $ | 3,538 | $ | 5,276 | $ | 9,027 | |||||||||||
Included in cost of services | 2,139 | 1,757 | 2,015 | ||||||||||||||
| | | | | | | | | | | |||||||
Total | $ | 5,677 | $ | 7,033 | $ | 11,042 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Plans | |||||||||||||||||
Stock option and restricted stock plans | |||||||||||||||||
Schedule of stock option transactions and other information | |||||||||||||||||
Price Per Share | Shares | Weighted | |||||||||||||||
Average | |||||||||||||||||
Exercise Price | |||||||||||||||||
(share amounts in thousands) | |||||||||||||||||
Balance, January 1, 2013 | $ | 3.33 – 10.00 | 2,423 | $ | 8.4 | ||||||||||||
Granted | — | — | — | ||||||||||||||
Exercised | 7.14 – 10.00 | (167 | ) | 9.15 | |||||||||||||
Canceled | 8.33 – 10.00 | (316 | ) | 9.13 | |||||||||||||
| | | | | | | | | | | |||||||
Balance, December 31, 2013 | $ | 3.33 – 10.00 | 1,940 | $ | 8.22 | ||||||||||||
Granted | — | — | — | ||||||||||||||
Exercised | 3.33 – 10.00 | (960 | ) | 7.55 | |||||||||||||
Canceled | 8.33 – 10.00 | (81 | ) | 9.12 | |||||||||||||
| | | | | | | | | | | |||||||
Balance, December 31, 2014 | $ | 6.94 – 10.00 | 899 | $ | 8.85 | ||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Schedule of additional information with respect to the outstanding options | Additional information with respect to the outstanding options as of December 31, 2014 for the Plans is as follows: | ||||||||||||||||
Exercise Price | Number | Weighted Average | Number | ||||||||||||||
Outstanding | Remaining | Exercisable | |||||||||||||||
Contractual Life | |||||||||||||||||
(share amounts in thousands) | |||||||||||||||||
$ | 6.00 – 7.00 | 6 | 5.61 | 3 | |||||||||||||
7.01 – 8.00 | 43 | 6.23 | 11 | ||||||||||||||
8.01 – 9.00 | 290 | 2.19 | 288 | ||||||||||||||
9.01 – 10.00 | 560 | 4.81 | 560 | ||||||||||||||
Director Plan | |||||||||||||||||
Stock option and restricted stock plans | |||||||||||||||||
Schedule of stock option transactions and other information | |||||||||||||||||
Price Per Share | Shares | Weighted Average | |||||||||||||||
Exercise Price | |||||||||||||||||
(share amounts in thousands) | |||||||||||||||||
Balance, January 1, 2013 | $ | 3.33 – 10.00 | 42 | $ | 8.69 | ||||||||||||
Granted | — | — | — | ||||||||||||||
Exercised | — | — | — | ||||||||||||||
| | | | | | | | | | | |||||||
Balance, December 31, 2013 | $ | 3.33 – 10.00 | 42 | $ | 8.69 | ||||||||||||
Granted | — | — | — | ||||||||||||||
Exercised | $ | 3.33 – 10.00 | (15 | ) | 7 | ||||||||||||
| | | | | | | | | | | |||||||
Balance, December 31, 2014 | $ | 8.33 – 10.00 | 27 | $ | 9.63 | ||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Schedule of additional information with respect to the outstanding options | Additional information with respect to the outstanding options as of December 31, 2014 for the Director Plan is as follows: | ||||||||||||||||
Exercise Price | Number | Weighted | Number | ||||||||||||||
Outstanding | Average | Exercisable | |||||||||||||||
Remaining | |||||||||||||||||
Contractual Life | |||||||||||||||||
(share amounts in thousands) | |||||||||||||||||
$ | 8.00 – 9.00 | 6 | 2.24 | 6 | |||||||||||||
9.01 – 10.00 | 21 | 4.12 | 21 | ||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Income Taxes | ||||||||||||||||||||
Schedule of significant components of the Company's tax provision | ||||||||||||||||||||
Holdings | Select | |||||||||||||||||||
For the Year Ended | For the Year Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2012 | 2013 | 2014 | 2012 | 2013 | 2014 | |||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||
Current: | ||||||||||||||||||||
Federal | $ | 70,159 | $ | 55,847 | $ | 52,063 | $ | 74,076 | $ | 57,026 | $ | 52,063 | ||||||||
State and local | 11,589 | 11,913 | 9,248 | 11,589 | 11,913 | 9,248 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total current | 81,748 | 67,760 | 61,311 | 85,665 | 68,939 | 61,311 | ||||||||||||||
Deferred | 7,909 | 7,032 | 14,311 | 7,909 | 7,032 | 14,311 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total income tax provision | $ | 89,657 | $ | 74,792 | $ | 75,622 | $ | 93,574 | $ | 75,971 | $ | 75,622 | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Schedule of differences between the expected income tax provision and income taxes computed at the federal statutory rate | ||||||||||||||||||||
Holdings | Select | |||||||||||||||||||
For the Year Ended | For the Year Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2012 | 2013 | 2014 | 2012 | 2013 | 2014 | |||||||||||||||
Expected federal tax rate | 35 | % | 35 | % | 35 | % | 35 | % | 35 | % | 35 | % | ||||||||
State and local taxes, net of federal benefit | 4.2 | 4.6 | 4.2 | 4 | 4.5 | 4.2 | ||||||||||||||
Other permanent differences | 0.6 | 1.1 | 0.8 | 0.6 | 1.1 | 0.8 | ||||||||||||||
Valuation allowance | (0.6 | ) | (0.7 | ) | (0.4 | ) | (0.6 | ) | (0.6 | ) | (0.4 | ) | ||||||||
Uncertain tax positions | (0.5 | ) | (0.6 | ) | (0.3 | ) | (0.5 | ) | (0.6 | ) | (0.3 | ) | ||||||||
IRS audit settlements | (0.6 | ) | — | (0.4 | ) | (0.5 | ) | — | (0.4 | ) | ||||||||||
Non-controlling interest | (0.9 | ) | (1.7 | ) | (1.5 | ) | (0.9 | ) | (1.7 | ) | (1.5 | ) | ||||||||
Other | (0.4 | ) | 0.1 | (0.3 | ) | (0.4 | ) | 0.1 | (0.3 | ) | ||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | 36.8 | % | 37.8 | % | 37.1 | % | 36.7 | % | 37.8 | % | 37.1 | % | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Summary of deferred tax assets and liabilities for Holdings and Select | ||||||||||||||||||||
December 31, 2013 | December 31, 2014 | |||||||||||||||||||
Total | Current | Non-Current | Total | Current | Non-Current | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Deferred tax assets | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 1,484 | $ | 1,484 | $ | — | $ | 701 | $ | 701 | $ | — | ||||||||
Compensation and benefit related accruals | 45,147 | 35,706 | 9,441 | 49,373 | 38,722 | 10,651 | ||||||||||||||
Professional malpractice liability insurance | 20,333 | 6,382 | 13,951 | 17,934 | 4,732 | 13,202 | ||||||||||||||
Restructuring reserve | 441 | 441 | — | 333 | 333 | — | ||||||||||||||
Deferred revenue | — | — | — | (829 | ) | (829 | ) | — | ||||||||||||
Net operating loss carryforwards | 22,686 | 422 | 22,264 | 21,555 | 436 | 21,119 | ||||||||||||||
Other | 630 | 630 | — | 552 | 552 | — | ||||||||||||||
Stock options | 4,392 | — | 4,392 | 5,336 | — | 5,336 | ||||||||||||||
Equity investments | — | — | — | 3,475 | — | 3,475 | ||||||||||||||
Uncertain tax positions | 2,107 | — | 2,107 | 1,632 | — | 1,632 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total deferred tax assets | 97,220 | 45,065 | 52,155 | 100,062 | 44,647 | 55,415 | ||||||||||||||
Deferred tax liabilities | ||||||||||||||||||||
Deferred income | (31,832 | ) | (24,897 | ) | (6,935 | ) | (31,190 | ) | (25,651 | ) | (5,539 | ) | ||||||||
Investment in unconsolidated affiliates | (2,620 | ) | (230 | ) | (2,390 | ) | (3,659 | ) | — | (3,659 | ) | |||||||||
Other | — | — | — | (1,587 | ) | (1,093 | ) | (494 | ) | |||||||||||
Depreciation and amortization | (130,884 | ) | — | (130,884 | ) | (147,197 | ) | — | (147,197 | ) | ||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total deferred tax liabilities | (165,336 | ) | (25,127 | ) | (140,209 | ) | (183,633 | ) | (26,744 | ) | (156,889 | ) | ||||||||
Net deferred taxes before valuation allowance | (68,116 | ) | 19,938 | (88,054 | ) | (83,571 | ) | 17,903 | (101,474 | ) | ||||||||||
Valuation allowance | (10,547 | ) | (2,314 | ) | (8,233 | ) | (9,641 | ) | (1,912 | ) | (7,729 | ) | ||||||||
| | | | | | | | | | | | | | | | | | | | |
Net deferred taxes | $ | (78,663 | ) | $ | 17,624 | $ | (96,287 | ) | $ | (93,212 | ) | $ | 15,991 | $ | (109,203 | ) | ||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Schedule of state net operating loss carry forwards | ||||||||||||||||||||
State Net | Gross Valuation | |||||||||||||||||||
Operating Losses | Allowance | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||
2015 | $ | 7,487 | $ | 7,178 | ||||||||||||||||
2016 | 10,958 | 9,527 | ||||||||||||||||||
2017 | 12,648 | 11,257 | ||||||||||||||||||
2018 | 7,240 | 5,493 | ||||||||||||||||||
Thereafter through 2034 | 453,004 | 348,580 | ||||||||||||||||||
Schedule of reconciliation of the Company's unrecognized tax benefits | The reconciliation of the Company's unrecognized tax benefits is as follows (in thousands): | |||||||||||||||||||
Gross tax contingencies — January 1, 2012 | $ | 15,656 | ||||||||||||||||||
Reductions for tax positions taken in prior periods due primarily to statute expiration | (2,516 | ) | ||||||||||||||||||
Additions for existing tax positions taken | 750 | |||||||||||||||||||
| | | | | ||||||||||||||||
Gross tax contingencies — December 31, 2012 | 13,890 | |||||||||||||||||||
Reductions for tax positions taken in prior periods due primarily to statute expiration | (2,299 | ) | ||||||||||||||||||
Additions for existing tax positions taken | 435 | |||||||||||||||||||
| | | | | ||||||||||||||||
Gross tax contingencies — December 31, 2013 | 12,026 | |||||||||||||||||||
Reductions for tax positions taken in prior periods due primarily to statute expiration | (1,632 | ) | ||||||||||||||||||
Additions for existing tax positions taken | 273 | |||||||||||||||||||
| | | | | ||||||||||||||||
Gross tax contingencies — December 31, 2014 | $ | 10,667 | ||||||||||||||||||
| | | | | ||||||||||||||||
| | | | | ||||||||||||||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Segment Information | |||||||||||||||||
Schedule of selected financial data for the Company's reportable segments | |||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
Specialty | Outpatient | Other | Total | ||||||||||||||
Hospitals | Rehabilitation | ||||||||||||||||
(in thousands) | |||||||||||||||||
Net revenue | $ | 2,197,529 | $ | 751,317 | $ | 123 | $ | 2,948,969 | |||||||||
Adjusted EBITDA | 381,354 | 87,024 | (62,531 | ) | 405,847 | ||||||||||||
Total assets(1): | |||||||||||||||||
Select | 2,143,906 | 491,920 | 124,487 | 2,760,313 | |||||||||||||
Holdings | 2,143,906 | 491,920 | 125,535 | 2,761,361 | |||||||||||||
Capital expenditures | 50,005 | 13,209 | 4,971 | 68,185 | |||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Specialty | Outpatient | Other | Total | ||||||||||||||
Hospitals | Rehabilitation | ||||||||||||||||
(in thousands) | |||||||||||||||||
Net revenue | $ | 2,198,121 | $ | 777,177 | $ | 350 | $ | 2,975,648 | |||||||||
Adjusted EBITDA | 353,843 | 90,313 | (71,295 | ) | 372,861 | ||||||||||||
Total assets(1): | |||||||||||||||||
Select | 2,205,921 | 512,539 | 99,162 | 2,817,622 | |||||||||||||
Holdings | 2,205,921 | 512,539 | 99,162 | 2,817,622 | |||||||||||||
Capital expenditures | 56,523 | 14,113 | 3,024 | 73,660 | |||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Specialty | Outpatient | Other | Total | ||||||||||||||
Hospitals | Rehabilitation | ||||||||||||||||
(in thousands) | |||||||||||||||||
Net revenue | $ | 2,244,899 | $ | 819,397 | $ | 721 | $ | 3,065,017 | |||||||||
Adjusted EBITDA | 341,787 | 97,584 | (75,499 | ) | 363,872 | ||||||||||||
Total assets(1): | |||||||||||||||||
Select | 2,279,665 | 532,685 | 112,459 | 2,924,809 | |||||||||||||
Holdings | 2,279,665 | 532,685 | 112,459 | 2,924,809 | |||||||||||||
Capital expenditures | 77,742 | 12,506 | 4,998 | 95,246 | |||||||||||||
-1 | The specialty hospital segment includes $2.7 million in real estate assets held for sale on December 31, 2012, 2013 and 2014. | ||||||||||||||||
Schedule of reconciliation of Adjusted EBITDA to income before income taxes | |||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
Specialty | Outpatient | Other | |||||||||||||||
Hospitals | Rehabilitation | ||||||||||||||||
(in thousands) | |||||||||||||||||
Adjusted EBITDA | $ | 381,354 | $ | 87,024 | $ | (62,531 | ) | ||||||||||
Depreciation and amortization | (46,836 | ) | (13,208 | ) | (3,267 | ) | |||||||||||
Stock compensation expense | — | — | (5,677 | ) | |||||||||||||
| | | | | | | | | | | | | | | | | |
Holdings | Select | ||||||||||||||||
Income (loss) from operations | $ | 334,518 | $ | 73,816 | $ | (71,475 | ) | $ | 336,859 | $ | 336,859 | ||||||
Loss on early retirement of debt | (6,064 | ) | (6,064 | ) | |||||||||||||
Equity in earnings of unconsolidated subsidiaries | 7,705 | 7,705 | |||||||||||||||
Interest expense | (94,950 | ) | (83,759 | ) | |||||||||||||
| | | | | | | | | | | | | | | | | |
Income before income taxes | $ | 243,550 | $ | 254,741 | |||||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Year Ended December 31, 2013 | |||||||||||||||||
Specialty | Outpatient | Other | |||||||||||||||
Hospitals | Rehabilitation | ||||||||||||||||
(in thousands) | |||||||||||||||||
Adjusted EBITDA | $ | 353,843 | $ | 90,313 | $ | (71,295 | ) | ||||||||||
Depreciation and amortization | (48,621 | ) | (12,024 | ) | (3,747 | ) | |||||||||||
Stock compensation expense | — | — | (7,033 | ) | |||||||||||||
| | | | | | | | | | | | | | | | | |
Holdings | Select | ||||||||||||||||
Income (loss) from operations | $ | 305,222 | $ | 78,289 | $ | (82,075 | ) | $ | 301,436 | $ | 301,436 | ||||||
Loss on early retirement of debt | (18,747 | ) | (17,788 | ) | |||||||||||||
Equity in earnings of unconsolidated subsidiaries | 2,476 | 2,476 | |||||||||||||||
Interest expense | (87,364 | ) | (84,954 | ) | |||||||||||||
| | | | | | | | | | | | | | | | | |
Income before income taxes | $ | 197,801 | $ | 201,170 | |||||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Year Ended December 31, 2014 | |||||||||||||||||
Specialty | Outpatient | Other | |||||||||||||||
Hospitals | Rehabilitation | ||||||||||||||||
(in thousands) | |||||||||||||||||
Adjusted EBITDA | $ | 341,787 | $ | 97,584 | $ | (75,499 | ) | ||||||||||
Depreciation and amortization | (51,786 | ) | (12,845 | ) | (3,723 | ) | |||||||||||
Stock compensation expense | — | — | (11,042 | ) | |||||||||||||
| | | | | | | | | | | | | | | | | |
Holdings | Select | ||||||||||||||||
Income (loss) from operations | $ | 290,001 | $ | 84,739 | $ | (90,264 | ) | $ | 284,476 | $ | 284,476 | ||||||
Loss on early retirement of debt | (2,277 | ) | (2,277 | ) | |||||||||||||
Equity in earnings of unconsolidated subsidiaries | 7,044 | 7,044 | |||||||||||||||
Interest expense | (85,446 | ) | (85,446 | ) | |||||||||||||
| | | | | | | | | | | | | | | | | |
Income before income taxes | $ | 203,797 | $ | 203,797 | |||||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Income_per_Share_Tables
Income per Share (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income per Share | |||||||||||
Schedule of computation of basic and diluted income per common share | |||||||||||
For the Year Ended | |||||||||||
December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
(in thousands, except per | |||||||||||
share amounts) | |||||||||||
Numerator: | |||||||||||
Net income attributable to Select Medical Holdings Corporation | $ | 148,230 | $ | 114,390 | $ | 120,627 | |||||
Less: Earnings allocated to unvested restricted stockholders | 2,514 | 2,450 | 3,337 | ||||||||
| | | | | | | | | | | |
Net income available to common stockholders | $ | 145,716 | $ | 111,940 | $ | 117,290 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Denominator: | |||||||||||
Weighted average shares — basic | 138,767 | 136,879 | 129,026 | ||||||||
Effect of dilutive securities: | |||||||||||
Stock options | 275 | 168 | 439 | ||||||||
| | | | | | | | | | | |
Weighted average shares — diluted | 139,042 | 137,047 | 129,465 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Basic income per common share: | $ | 1.05 | $ | 0.82 | $ | 0.91 | |||||
Diluted income per common share: | $ | 1.05 | $ | 0.82 | $ | 0.91 | |||||
Schedule of anti-dilutive shares excluded from computation | |||||||||||
For the Year Ended | |||||||||||
December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
(in thousands) | |||||||||||
Stock options | 1,654 | 1,474 | 6 | ||||||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Related Party Transactions | |||||||||||
Schedule of future rental commitments under outstanding agreements with the affiliated companies | As of December 31, 2014, future rental commitments under outstanding agreements with the affiliated companies are approximately as follows (in thousands): | ||||||||||
2015 | $ | 4,128 | |||||||||
2016 | 4,174 | ||||||||||
2017 | 4,221 | ||||||||||
2018 | 4,318 | ||||||||||
2019 | 4,421 | ||||||||||
Thereafter | 13,912 | ||||||||||
| | | | | |||||||
$ | 35,174 | ||||||||||
| | | | | |||||||
| | | | | |||||||
Schedule of net operating revenues generated from the provision of contracted services and management fees to related parties | |||||||||||
For the Year Ended | |||||||||||
December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
(in thousands) | |||||||||||
BIR JV, LLP | $ | 92,205 | $ | 96,465 | $ | 101,385 | |||||
Rehabilitation Institute of Denton, LLC | 8,133 | 7,163 | 8,337 | ||||||||
OHRH, LLC | — | 2,069 | 8,280 | ||||||||
Global Rehab — Scottsdale, LLC. | — | 4,129 | 10,747 | ||||||||
Other | 140 | 310 | 518 | ||||||||
| | | | | | | | | | | |
Total | $ | 100,478 | $ | 110,136 | $ | 129,267 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies. | |||||
Schedule of minimum future lease obligations on long-term non-cancelable operating leases | Minimum future lease obligations on long-term non-cancelable operating leases in effect at December 31, 2014 are approximately as follows (in thousands): | ||||
2015 | $ | 132,644 | |||
2016 | 110,719 | ||||
2017 | 90,385 | ||||
2018 | 70,601 | ||||
2019 | 53,380 | ||||
Thereafter | 333,329 | ||||
| | | | | |
$ | 791,058 | ||||
| | | | | |
| | | | | |
Supplemental_Disclosures_of_Ca1
Supplemental Disclosures of Cash Flow Information (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Schedule of non-cash investing and financing activities | |||||||||||
Holdings | |||||||||||
For the Year Ended | |||||||||||
December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
(in thousands) | |||||||||||
Notes issued with acquisitions | $ | 1,844 | $ | 3,283 | $ | 327 | |||||
Liabilities assumed with acquisitions | 107 | 885 | 122 | ||||||||
Contingent consideration related to acquisitions | 1,500 | 100 | — | ||||||||
Accrual for property, plant and equipment | — | — | 14,230 | ||||||||
Notes issued to acquire non-consolidating interest | — | 3,399 | — | ||||||||
Select | |||||||||||
Schedule of non-cash investing and financing activities | |||||||||||
Select | |||||||||||
For the Year Ended | |||||||||||
December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
(in thousands) | |||||||||||
Dividends declared to Holdings by Select(1) | $ | (5,240 | ) | $ | — | $ | — | ||||
Notes issued with acquisitions | 1,844 | 3,283 | 327 | ||||||||
Liabilities assumed with acquisitions | 107 | 885 | 122 | ||||||||
Contingent consideration related to acquisitions | 1,500 | 100 | — | ||||||||
Accrual for property, plant and equipment | — | — | 14,230 | ||||||||
Notes issued to acquire non-consolidating interest | — | 3,399 | — | ||||||||
-1 | Recorded in accrued other liabilities on the consolidated balance sheet of Select. | ||||||||||
Financial_Information_for_Subs1
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes | |||||||||||||||||
Schedule of Consolidating Balance Sheet | |||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Balance Sheet | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Assets | |||||||||||||||||
Current Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 70 | $ | 2,454 | $ | 830 | $ | — | $ | 3,354 | |||||||
Accounts receivable, net | — | 376,780 | 67,489 | — | 444,269 | ||||||||||||
Current deferred tax asset | 10,186 | 2,458 | 3,347 | — | 15,991 | ||||||||||||
Prepaid income taxes | 17,888 | — | — | — | 17,888 | ||||||||||||
Intercompany receivables | — | 1,698,600 | 121,447 | -1,820,047 | (a) | — | |||||||||||
Other current assets | 7,860 | 32,919 | 5,363 | — | 46,142 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Current Assets | 36,004 | 2,113,211 | 198,476 | (1,820,047 | ) | 527,644 | |||||||||||
Property and equipment, net | 17,521 | 468,138 | 56,651 | 542,310 | |||||||||||||
— | |||||||||||||||||
Investment in affiliates | 3,725,915 | 82,514 | — | -3,808,429 | (b)(c) | — | |||||||||||
Goodwill | — | 1,642,083 | — | — | 1,642,083 | ||||||||||||
Non-current deferred tax asset | 11,230 | — | — | -11,230 | (d) | — | |||||||||||
Other identifiable intangibles | — | 72,519 | — | — | 72,519 | ||||||||||||
Other assets | 32,463 | 106,843 | 947 | — | 140,253 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Assets | $ | 3,823,133 | $ | 4,485,308 | $ | 256,074 | $ | (5,639,706 | ) | $ | 2,924,809 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Liabilities and Equity | |||||||||||||||||
Current Liabilities: | |||||||||||||||||
Bank overdrafts | $ | 21,746 | $ | — | $ | — | $ | — | $ | 21,746 | |||||||
Current portion of long-term debt and notes payable | 8,496 | 1,844 | 534 | — | 10,874 | ||||||||||||
Accounts payable | 9,885 | 84,304 | 14,343 | — | 108,532 | ||||||||||||
Intercompany payables | 1,820,047 | — | — | -1,820,047 | (a) | — | |||||||||||
Accrued payroll | 17,410 | 79,435 | 245 | — | 97,090 | ||||||||||||
Accrued vacation | 5,070 | 49,315 | 8,747 | — | 63,132 | ||||||||||||
Accrued interest | 10,596 | 78 | — | — | 10,674 | ||||||||||||
Accrued other | 39,801 | 34,107 | 8,468 | — | 82,376 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Current Liabilities | 1,933,051 | 249,083 | 32,337 | (1,820,047 | ) | 394,424 | |||||||||||
Long-term debt, net of current portion | 1,098,151 | 364,794 | 79,157 | 1,542,102 | |||||||||||||
— | |||||||||||||||||
Non-current deferred tax liability | — | 112,013 | 8,420 | -11,230 | (d) | 109,203 | |||||||||||
Other non-current liabilities | 52,416 | 35,576 | 4,863 | — | 92,855 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Liabilities | 3,083,618 | 761,466 | 124,777 | (1,831,277 | ) | 2,138,584 | |||||||||||
Redeemable non-controlling interests | 10,985 | 10,985 | |||||||||||||||
— | — | — | |||||||||||||||
Stockholder's Equity: | |||||||||||||||||
Common stock | 0 | — | — | — | 0 | ||||||||||||
Capital in excess of par | 885,407 | — | — | — | 885,407 | ||||||||||||
Retained earnings (accumulated deficit) | (145,892 | ) | 1,048,455 | 8,366 | -1,056,821 | (c) | (145,892 | ) | |||||||||
Subsidiary investment | — | 2,675,387 | 76,221 | -2,751,608 | (b) | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Total Select Medical Corporation Stockholder's Equity | 739,515 | 3,723,842 | 84,587 | (3,808,429 | ) | 739,515 | |||||||||||
Non-controlling interests | — | — | 35,725 | — | 35,725 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Equity | 739,515 | 3,723,842 | 120,312 | (3,808,429 | ) | 775,240 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total Liabilities and Equity | $ | 3,823,133 | $ | 4,485,308 | $ | 256,074 | $ | (5,639,706 | ) | $ | 2,924,809 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Elimination of intercompany. | ||||||||||||||||
(b) | Elimination of investments in consolidated subsidiaries. | ||||||||||||||||
(c) | Elimination of investments in consolidated subsidiaries' earnings. | ||||||||||||||||
(d) | Reclass of non-current deferred tax asset to report net non-current deferred tax liability in consolidation. | ||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Balance Sheet | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Assets | |||||||||||||||||
Current Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 71 | $ | 3,098 | $ | 1,150 | $ | — | $ | 4,319 | |||||||
Accounts receivable, net | — | 339,694 | 52,275 | -650 | (a) | 391,319 | |||||||||||
Current deferred tax asset | 7,965 | 5,221 | 4,438 | — | 17,624 | ||||||||||||
Intercompany receivables | — | 1,083,280 | 102,735 | (1,186,015 | )(b) | — | |||||||||||
Other current assets | 9,745 | 27,448 | 3,947 | — | 41,140 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Current Assets | 17,781 | 1,458,741 | 164,545 | (1,186,665 | ) | 454,402 | |||||||||||
Property and equipment, net | 15,624 | 438,057 | 55,421 | — | 509,102 | ||||||||||||
Investment in affiliates | 3,060,832 | 79,376 | — | (3,140,208 | )(c)(d) | — | |||||||||||
Goodwill | — | 1,642,633 | — | — | 1,642,633 | ||||||||||||
Non-current deferred tax asset | 7,662 | — | — | (7,662 | )(e) | — | |||||||||||
Other identifiable intangibles | — | 71,907 | — | — | 71,907 | ||||||||||||
Other assets | 35,274 | 103,687 | 617 | — | 139,578 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Assets | $ | 3,137,173 | $ | 3,794,401 | $ | 220,583 | $ | (4,334,535 | ) | $ | 2,817,622 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Liabilities and Equity | |||||||||||||||||
Current Liabilities: | |||||||||||||||||
Bank overdrafts | $ | 12,506 | $ | — | $ | — | $ | — | $ | 12,506 | |||||||
Current portion of long-term debt and notes payable | 9,107 | 7,344 | 1,114 | — | 17,565 | ||||||||||||
Accounts payable | 6,749 | 69,534 | 12,002 | — | 88,285 | ||||||||||||
Intercompany payables | 1,186,015 | — | — | -1,186,015 | (b) | — | |||||||||||
Accrued payroll | 1,167 | 88,599 | 245 | — | 90,011 | ||||||||||||
Accrued vacation | 4,619 | 47,682 | 7,429 | — | 59,730 | ||||||||||||
Accrued interest | 11,076 | 1,221 | — | — | 12,297 | ||||||||||||
Accrued other | 59,249 | 25,144 | 6,765 | (650 | )(a) | 90,508 | |||||||||||
Income taxes payable | 622 | — | — | — | 622 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Current Liabilities | 1,291,110 | 239,524 | 27,555 | (1,186,665 | ) | 371,524 | |||||||||||
Long-term debt, net of current portion | 1,006,201 | 365,460 | 56,049 | — | 1,427,710 | ||||||||||||
Non-current deferred tax liability | — | 96,488 | 7,461 | -7,662 | (e) | 96,287 | |||||||||||
Other non-current liabilities | 53,628 | 33,163 | 5,084 | — | 91,875 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Liabilities | 2,350,939 | 734,635 | 96,149 | (1,194,327 | ) | 1,987,396 | |||||||||||
Redeemable non-controlling interests | — | — | 11,584 | — | 11,584 | ||||||||||||
Stockholder's Equity: | |||||||||||||||||
Common stock | 0 | — | — | — | 0 | ||||||||||||
Capital in excess of par | 869,576 | — | — | — | 869,576 | ||||||||||||
Retained earnings | (83,342 | ) | 921,745 | 17,750 | -939,495 | (d) | (83,342 | ) | |||||||||
Subsidiary investment | — | 2,136,723 | 63,990 | -2,200,713 | (c) | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Total Select Medical Corporation Stockholder's Equity | 786,234 | 3,058,468 | 81,740 | (3,140,208 | ) | 786,234 | |||||||||||
Non-controlling interests | — | 1,298 | 31,110 | — | 32,408 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total Equity | 786,234 | 3,059,766 | 112,850 | (3,140,208 | ) | 818,642 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total Liabilities and Equity | $ | 3,137,173 | $ | 3,794,401 | $ | 220,583 | $ | (4,334,535 | ) | $ | 2,817,622 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Reclass portion of due to third party payor to accounts receivable net in consolidation. | ||||||||||||||||
(b) | Elimination of intercompany. | ||||||||||||||||
(c) | Elimination of investments in consolidated subsidiaries. | ||||||||||||||||
(d) | Elimination of investments in consolidated subsidiaries' earnings. | ||||||||||||||||
(e) | Reclass of non-current deferred tax assset to report net non-current deferred tax liability in consolidation. | ||||||||||||||||
Schedule of Consolidating Statement of Operations | Select Medical Corporation | ||||||||||||||||
Condensed Consolidating Statement of Operations | |||||||||||||||||
For the Year Ended December 31, 2014 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Net operating revenues | $ | 721 | $ | 2,634,480 | $ | 429,816 | $ | — | $ | 3,065,017 | |||||||
| | | | | | | | | | | | | | | | | |
Costs and expenses: | |||||||||||||||||
Cost of services | 2,015 | 2,209,724 | 370,601 | — | 2,582,340 | ||||||||||||
General and administrative | 86,311 | (1,064 | ) | — | — | 85,247 | |||||||||||
Bad debt expense | — | 38,052 | 6,548 | — | 44,600 | ||||||||||||
Depreciation and amortization | 3,723 | 54,876 | 9,755 | — | 68,354 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total costs and expenses | 92,049 | 2,301,588 | 386,904 | — | 2,780,541 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Income (loss) from operations | (91,328 | ) | 332,892 | 42,912 | — | 284,476 | |||||||||||
Other income and expense: | |||||||||||||||||
Intercompany interest and royalty fees | (1,142 | ) | 1,131 | 11 | — | — | |||||||||||
Intercompany management fees | 142,273 | (120,528 | ) | (21,745 | ) | — | — | ||||||||||
Equity in earnings of unconsolidated subsidiaries | — | 6,958 | 86 | — | 7,044 | ||||||||||||
Loss on early retirement of debt | (2,277 | ) | — | — | — | (2,277 | ) | ||||||||||
Interest expense | (57,651 | ) | (23,367 | ) | (4,428 | ) | — | (85,446 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Income (loss) from operations before income taxes | (10,125 | ) | 197,086 | 16,836 | — | 203,797 | |||||||||||
Income tax expense (benefit) | (4,333 | 78,748 | 1,207 | 75,622 | |||||||||||||
) | — | ||||||||||||||||
Equity in earnings of subsidiaries | 126,419 | 8,995 | — | -135,414 | (a) | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Net income | 120,627 | 127,333 | 15,629 | (135,414 | ) | 128,175 | |||||||||||
Less: Net income attributable to non-controlling interests | — | 623 | 6,925 | — | 7,548 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Net income attributable to Select Medical Corporation | $ | 120,627 | $ | 126,710 | $ | 8,704 | $ | (135,414 | ) | $ | 120,627 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Elimination of equity in earnings of consolidated subsidiaries. | ||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Statement of Operations | |||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Net operating revenues | $ | 350 | $ | 2,576,906 | $ | 398,392 | $ | — | $ | 2,975,648 | |||||||
| | | | | | | | | | | | | | | | | |
Costs and expenses: | |||||||||||||||||
Cost of services | 1,757 | 2,155,370 | 338,349 | — | 2,495,476 | ||||||||||||
General and administrative | 76,709 | 212 | — | — | 76,921 | ||||||||||||
Bad debt expense | — | 31,173 | 6,250 | — | 37,423 | ||||||||||||
Depreciation and amortization | 3,746 | 51,825 | 8,821 | — | 64,392 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total costs and expenses | 82,212 | 2,238,580 | 353,420 | — | 2,674,212 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Income (loss) from operations | (81,862 | ) | 338,326 | 44,972 | — | 301,436 | |||||||||||
Other income and expense: | |||||||||||||||||
Intercompany interest and royalty fees | (1,326 | ) | 836 | 490 | — | — | |||||||||||
Intercompany management fees | 144,447 | (125,357 | ) | (19,090 | ) | — | — | ||||||||||
Equity in earnings of unconsolidated subsidiaries | — | 2,384 | 92 | — | 2,476 | ||||||||||||
Loss on early retirement of debt | (17,788 | ) | — | — | — | (17,788 | ) | ||||||||||
Interest expense | (58,100 | ) | (22,916 | ) | (3,938 | ) | — | (84,954 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Income (loss) from operations before income taxes | (14,629 | ) | 193,273 | 22,526 | — | 201,170 | |||||||||||
Income tax expense (benefit) | (1,238 | ) | 76,837 | 372 | — | 75,971 | |||||||||||
Equity in earnings of subsidiaries | 129,971 | 14,561 | — | (144,532 | )(a) | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Net income | 116,580 | 130,997 | 22,154 | (144,532 | ) | 125,199 | |||||||||||
Less: Net income attributable to non-controlling interests | — | 995 | 7,624 | — | 8,619 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Net income attributable to Select Medical Corporation | $ | 116,580 | $ | 130,002 | $ | 14,530 | $ | (144,532 | ) | $ | 116,580 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Elimination of equity in earnings of subsidiaries. | ||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Statement of Operations | |||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Net operating revenues | $ | 123 | $ | 2,572,301 | $ | 376,545 | $ | — | $ | 2,948,969 | |||||||
| | | | | | | | | | | | | | | | | |
Costs and expenses: | |||||||||||||||||
Cost of services | 2,139 | 2,118,614 | 322,797 | — | 2,443,550 | ||||||||||||
General and administrative | 67,402 | (1,208 | ) | — | — | 66,194 | |||||||||||
Bad debt expense | — | 33,851 | 5,204 | — | 39,055 | ||||||||||||
Depreciation and amortization | 3,267 | 51,436 | 8,608 | — | 63,311 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total costs and expenses | 72,808 | 2,202,693 | 336,609 | — | 2,612,110 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Income (loss) from operations | (72,685 | ) | 369,608 | 39,936 | — | 336,859 | |||||||||||
Other income and expense: | |||||||||||||||||
Intercompany interest and royalty fees | (2,532 | ) | 2,502 | 30 | — | — | |||||||||||
Intercompany management fees | 120,276 | (102,599 | ) | (17,677 | ) | — | — | ||||||||||
Loss on early retirement of debt | (6,064 | ) | — | — | — | (6,064 | ) | ||||||||||
Equity in earnings of unconsolidated subsidiaries | — | 7,637 | 68 | — | 7,705 | ||||||||||||
Interest expense | (54,167 | ) | (25,488 | ) | (4,104 | ) | — | (83,759 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Income (loss) from operations before income taxes | (15,172 | ) | 251,660 | 18,253 | — | 254,741 | |||||||||||
Income tax expense (benefit) | (8,206 | 101,867 | (87 | 93,574 | |||||||||||||
) | ) | — | |||||||||||||||
Equity in earnings of subsidiaries | 162,470 | 14,409 | — | (176,879 | )(a) | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Net income | 155,504 | 164,202 | 18,340 | (176,879 | ) | 161,167 | |||||||||||
Less: Net income attributable to non-controlling interests | 630 | 5,033 | 5,663 | ||||||||||||||
— | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | |
Net income attributable to Select Medical Corporation | $ | 155,504 | $ | 163,572 | $ | 13,307 | $ | (176,879 | ) | $ | 155,504 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Elimination of equity in earnings of subsidiaries. | ||||||||||||||||
Schedule of Consolidating Statement of Cash Flows | |||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Statement of Cash Flows | |||||||||||||||||
For the Year Ended December 31, 2014 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Operating activities | |||||||||||||||||
Net income | $ | 120,627 | $ | 127,333 | $ | 15,629 | $ | (135,414 | )(a) | $ | 128,175 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Distributions from unconsolidated subsidiaries | — | 11,889 | 65 | — | 11,954 | ||||||||||||
Depreciation and amortization | 3,723 | 54,876 | 9,755 | — | 68,354 | ||||||||||||
Provision for bad debts | — | 38,052 | 6,548 | — | 44,600 | ||||||||||||
Equity in earnings of unconsolidated subsidiaries | — | (6,958 | ) | (86 | ) | — | (7,044 | ) | |||||||||
Loss on early retirement of debt | 2,277 | — | — | — | 2,277 | ||||||||||||
Loss (gain) from disposal or sale of assets | — | (1,168 | ) | 120 | — | (1,048 | ) | ||||||||||
Non-cash stock compensation expense | 11,186 | — | — | — | 11,186 | ||||||||||||
Amortization of debt discount, premium and issuance costs | 7,553 | — | — | — | 7,553 | ||||||||||||
Deferred income taxes | 14,311 | — | — | — | 14,311 | ||||||||||||
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | |||||||||||||||||
Equity in earnings of subsidiaries | (126,419 | ) | (8,995 | ) | — | 135,414 | (a) | — | |||||||||
Accounts receivable | — | (80,394 | ) | (17,408 | ) | — | (97,802 | ) | |||||||||
Other current assets | 1,885 | (4,004 | ) | 390 | — | (1,729 | ) | ||||||||||
Other assets | 2,811 | (2,566 | ) | (348 | ) | — | (103 | ) | |||||||||
Accounts payable | 3,136 | 2,440 | 421 | — | 5,997 | ||||||||||||
Accrued expenses | (6,353 | ) | (9,407 | ) | (279 | ) | — | (16,039 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Net cash provided by operating activities | 34,737 | 121,098 | 14,807 | — | 170,642 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Investing activities | |||||||||||||||||
Purchases of property and equipment | (4,674 | ) | (79,600 | ) | (10,972 | ) | — | (95,246 | ) | ||||||||
Investment in businesses | — | (4,634 | ) | — | — | (4,634 | ) | ||||||||||
Acquisition of businesses, net of cash acquired | — | (397 | ) | (814 | ) | — | (1,211 | ) | |||||||||
| | | | | | | | | | | | | | | | | |
Net cash used in investing activities | (4,674 | ) | (84,631 | ) | (11,786 | ) | — | (101,091 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Financing activities | |||||||||||||||||
Borrowings on revolving credit facility | 910,000 | — | — | — | 910,000 | ||||||||||||
Payments on revolving credit facility | (870,000 | ) | — | — | — | (870,000 | ) | ||||||||||
Payments on credit facility term loans | (33,994 | ) | — | — | — | (33,994 | ) | ||||||||||
Issuance of 6.375% senior notes, includes premium | 111,650 | — | — | — | 111,650 | ||||||||||||
Borrowings of other debt | 8,151 | — | 925 | — | 9,076 | ||||||||||||
Principal payments on other debt | (9,213 | ) | (2,058 | ) | (3,402 | ) | — | (14,673 | ) | ||||||||
Debt issuance costs | (4,434 | ) | — | — | — | (4,434 | ) | ||||||||||
Proceeds from bank overdrafts | 9,240 | — | — | — | 9,240 | ||||||||||||
Purchase of non-controlling interests | — | (9,961 | ) | — | — | (9,961 | ) | ||||||||||
Equity investment by Holdings | 7,355 | — | — | — | 7,355 | ||||||||||||
Dividends paid to Holdings | (184,100 | ) | — | — | — | (184,100 | ) | ||||||||||
Intercompany | 22,162 | (25,092 | ) | 2,930 | — | — | |||||||||||
Tax benefit from stock based awards | 3,119 | — | — | — | 3,119 | ||||||||||||
Proceeds from issuance of non-controlling interests | — | — | 185 | — | 185 | ||||||||||||
Distributions to non-controlling interests | — | — | (3,979 | ) | — | (3,979 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
Net cash used in financing activities | (30,064 | ) | (37,111 | ) | (3,341 | ) | — | (70,516 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Net decrease in cash and cash equivalents | (1 | ) | (644 | ) | (320 | ) | — | (965 | ) | ||||||||
Cash and cash equivalents at beginning of period | 71 | 3,098 | 1,150 | — | 4,319 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Cash and cash equivalents at end of period | $ | 70 | $ | 2,454 | $ | 830 | $ | — | $ | 3,354 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Elimination of equity in earnings of consolidated subsidiaries. | ||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Statement of Cash Flows | |||||||||||||||||
For the Year Ended December 31, 2013 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Operating activities | |||||||||||||||||
Net income | $ | 116,580 | $ | 130,997 | $ | 22,154 | $ | (144,532 | )(a) | $ | 125,199 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 3,746 | 51,825 | 8,821 | — | 64,392 | ||||||||||||
Provision for bad debts | — | 31,173 | 6,250 | — | 37,423 | ||||||||||||
Equity in earnings of unconsolidated subsidiaires | — | (2,384 | ) | (92 | ) | — | (2,476 | ) | |||||||||
Loss on early retirement of debt | 17,788 | — | — | — | 17,788 | ||||||||||||
Gain from disposal or sale of assets | — | (463 | ) | (118 | ) | — | (581 | ) | |||||||||
Non-cash stock compensation expense | 7,033 | — | — | — | 7,033 | ||||||||||||
Amortization of debt discount and issuance costs | 8,344 | — | — | — | 8,344 | ||||||||||||
Deferred income taxes | 7,032 | — | — | — | 7,032 | ||||||||||||
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | |||||||||||||||||
Equity in earnings of subsidiaries | (129,971 | ) | (14,561 | ) | — | 144,532 | (a) | — | |||||||||
Accounts receivable | — | (60,460 | ) | (6,685 | ) | — | (67,145 | ) | |||||||||
Other current assets | (4,145 | ) | (5,849 | ) | 1,827 | — | (8,167 | ) | |||||||||
Other assets | (6,594 | ) | 3,026 | 84 | — | (3,484 | ) | ||||||||||
Accounts payable | 2,075 | (3,746 | ) | 388 | — | (1,283 | ) | ||||||||||
Accrued expenses | (4,929 | ) | 23,910 | (4,954 | ) | — | 14,027 | ||||||||||
| | | | | | | | | | | | | | | | | |
Net cash provided by operating activities | 16,959 | 153,468 | 27,675 | — | 198,102 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Investing activities | |||||||||||||||||
Purchases of property and equipment | (3,024 | ) | (60,532 | ) | (10,104 | ) | — | (73,660 | ) | ||||||||
Investment in businesses | — | (34,893 | ) | — | — | (34,893 | ) | ||||||||||
Acquisition of businesses, net of cash acquired | — | (1,665 | ) | — | — | (1,665 | ) | ||||||||||
Proceeds from sale of assets | — | 2,456 | 456 | — | 2,912 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Net cash used in investing activities | (3,024 | ) | (94,634 | ) | (9,648 | ) | — | (107,306 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Financing activities | |||||||||||||||||
Borrowings on revolving credit facility | 690,000 | — | — | — | 690,000 | ||||||||||||
Payments on revolving credit facility | (800,000 | ) | — | — | — | (800,000 | ) | ||||||||||
Borrowings on credit facility term loans, net of discount | 298,500 | — | — | — | 298,500 | ||||||||||||
Payments on credit facility term loans | (596,720 | ) | — | — | — | (596,720 | ) | ||||||||||
Issuance of 6.375% senior notes | 600,000 | — | — | — | 600,000 | ||||||||||||
Repurchase of 75/8% senior subordinated notes | (70,000 | ) | — | — | — | (70,000 | ) | ||||||||||
Borrowings of other debt | 8,923 | 5,303 | 1,084 | — | 15,310 | ||||||||||||
Principal payments on other debt | (7,752 | ) | (873 | ) | (2,209 | ) | — | (10,834 | ) | ||||||||
Debt issuance costs | (18,914 | ) | — | — | — | (18,914 | ) | ||||||||||
Repayments of bank overdrafts | (5,330 | ) | — | — | — | (5,330 | ) | ||||||||||
Equity investment by Holdings | 1,525 | — | — | — | 1,525 | ||||||||||||
Dividends paid to Holdings | (226,621 | ) | — | — | — | (226,621 | ) | ||||||||||
Intercompany | 77,455 | (63,900 | ) | (13,555 | ) | — | — | ||||||||||
Distributions to non-controlling interests | — | — | (3,537 | ) | — | (3,537 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
Net cash used in financing activities | (48,934 | ) | (59,470 | ) | (18,217 | ) | — | (126,621 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Net decrease in cash and cash equivalents | (34,999 | ) | (636 | ) | (190 | ) | — | (35,825 | ) | ||||||||
Cash and cash equivalents at beginning of period | 35,070 | 3,734 | 1,340 | 40,144 | |||||||||||||
— | |||||||||||||||||
| | | | | | | | | | | | | | | | | |
Cash and cash equivalents at end of period | $ | 71 | $ | 3,098 | $ | 1,150 | $ | — | $ | 4,319 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Elimination of equity in earnings of consolidated subsidiaries. | ||||||||||||||||
Select Medical Corporation | |||||||||||||||||
Condensed Consolidating Statement of Cash Flows | |||||||||||||||||
For the Year Ended December 31, 2012 | |||||||||||||||||
Select Medical | Subsidiary | Non-Guarantor | Eliminations | Consolidated | |||||||||||||
Corporation (Parent | Guarantors | Subsidiaries | |||||||||||||||
Company Only) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Operating activities | |||||||||||||||||
Net income | $ | 155,504 | $ | 164,202 | $ | 18,340 | $ | (176,879 | )(a) | $ | 161,167 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 3,267 | 51,436 | 8,608 | — | 63,311 | ||||||||||||
Provision for bad debts | — | 33,851 | 5,204 | — | 39,055 | ||||||||||||
Equity in earnings of unconsolidated subsidiaires | — | (7,637 | ) | (68 | ) | — | (7,705 | ) | |||||||||
Loss on early retirement of debt | 6,064 | — | — | — | 6,064 | ||||||||||||
Loss (gain) from disposal or sale of assets | — | (6,002 | ) | 96 | — | (5,906 | ) | ||||||||||
Non-cash stock compensation expense | 5,677 | — | — | — | 5,677 | ||||||||||||
Amortization of debt discount and issuance costs | 7,190 | — | — | — | 7,190 | ||||||||||||
Deferred income taxes | 7,909 | — | — | — | 7,909 | ||||||||||||
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | |||||||||||||||||
Equity in earnings of subsidiaries | (162,470 | ) | (14,409 | ) | — | 176,879 | (a) | — | |||||||||
Accounts receivable | — | 29,102 | (13,944 | ) | — | 15,158 | |||||||||||
Other current assets | 740 | 9 | (2,356 | ) | — | (1,607 | ) | ||||||||||
Other assets | 2,448 | 3,268 | 161 | — | 5,877 | ||||||||||||
Accounts payable | (2,679 | ) | (4,189 | ) | 751 | — | (6,117 | ) | |||||||||
Accrued expenses | 25,350 | (19,861 | ) | 13,809 | — | 19,298 | |||||||||||
| | | | | | | | | | | | | | | | | |
Net cash provided by operating activities | 49,000 | 229,770 | 30,601 | — | 309,371 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Investing activities | |||||||||||||||||
Purchases of property and equipment | (5,150 | ) | (49,160 | ) | (13,875 | ) | — | (68,185 | ) | ||||||||
Proceeds from sale of assets | — | 16,511 | — | — | 16,511 | ||||||||||||
Investment in businesses, net of distributions | — | (14,689 | ) | — | — | (14,689 | ) | ||||||||||
Acquisition of businesses, net of cash acquired | — | (6,043 | ) | — | — | (6,043 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
Net cash used in investing activities | (5,150 | ) | (53,381 | ) | (13,875 | ) | — | (72,406 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Financing activities | |||||||||||||||||
Borrowings on revolving credit facility | 495,000 | — | — | — | 495,000 | ||||||||||||
Payments on revolving credit facility | (405,000 | ) | — | — | — | (405,000 | ) | ||||||||||
Borrowings on credit facility term loans, net of discount | 266,750 | — | — | — | 266,750 | ||||||||||||
Payments on credit facility term loans | (9,875 | ) | — | — | — | (9,875 | ) | ||||||||||
Repurchase of 75/8% senior subordinated notes | (278,495 | ) | — | — | — | (278,495 | ) | ||||||||||
Borrowings of other debt | 8,003 | — | 278 | — | 8,281 | ||||||||||||
Principal payments on other debt | (8,049 | ) | (433 | ) | (1,813 | ) | — | (10,295 | ) | ||||||||
Debt issuance costs | (6,527 | ) | — | — | — | (6,527 | ) | ||||||||||
Dividends paid to Holdings | (268,479 | ) | — | — | — | (268,479 | ) | ||||||||||
Equity investment by Holdings | 1,817 | — | — | — | 1,817 | ||||||||||||
Proceeds from bank overdrafts | 1,227 | — | — | — | 1,227 | ||||||||||||
Intercompany | 183,421 | (172,222 | ) | (11,199 | ) | — | — | ||||||||||
Distributions to non-controlling interests | — | — | (3,268 | ) | — | (3,268 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
Net cash used in financing activities | (20,207 | ) | (172,655 | ) | (16,002 | ) | — | (208,864 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Net increase in cash and cash equivalents | 23,643 | 3,734 | 724 | — | 28,101 | ||||||||||||
Cash and cash equivalents at beginning of period | 11,427 | 616 | 12,043 | ||||||||||||||
— | — | ||||||||||||||||
| | | | | | | | | | | | | | | | | |
Cash and cash equivalents at end of period | $ | 35,070 | $ | 3,734 | $ | 1,340 | $ | — | $ | 40,144 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) | Elimination of equity in earnings of consolidated subsidiaries. | ||||||||||||||||
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Quarterly Financial Information | ||||||||||||||
Schedule of selected unaudited quarterly financial data | ||||||||||||||
Holdings | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
(in thousands, except per share amounts) | ||||||||||||||
Year ended December 31, 2013 | ||||||||||||||
Net operating revenues | $ | 749,955 | $ | 756,673 | $ | 722,845 | $ | 746,175 | ||||||
Income from operations | 82,530 | 88,263 | 62,399 | 68,244 | ||||||||||
Net income attributable to Select Medical Holdings Corporation | $ | 34,418 | $ | 27,780 | $ | 23,272 | $ | 28,920 | ||||||
Income per common share: | ||||||||||||||
Basic | $ | 0.25 | $ | 0.20 | $ | 0.17 | $ | 0.21 | ||||||
Diluted | $ | 0.24 | $ | 0.20 | $ | 0.17 | $ | 0.21 | ||||||
Holdings | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
(in thousands, except per share amounts) | ||||||||||||||
Year ended December 31, 2014 | ||||||||||||||
Net operating revenues | $ | 762,578 | $ | 772,762 | $ | 758,069 | $ | 771,608 | ||||||
Income from operations | 78,444 | 82,193 | 66,017 | 57,822 | ||||||||||
Net income attributable to Select Medical Holdings Corporation | $ | 33,044 | $ | 35,341 | $ | 26,530 | $ | 25,712 | ||||||
Income per common share: | ||||||||||||||
Basic | $ | 0.24 | $ | 0.27 | $ | 0.20 | $ | 0.20 | ||||||
Diluted | $ | 0.24 | $ | 0.27 | $ | 0.20 | $ | 0.20 | ||||||
Select | ||||||||||||||
Quarterly Financial Information | ||||||||||||||
Schedule of selected unaudited quarterly financial data | ||||||||||||||
Select | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
(in thousands) | ||||||||||||||
Year ended December 31, 2013 | ||||||||||||||
Net operating revenues | $ | 749,955 | $ | 756,673 | $ | 722,845 | $ | 746,175 | ||||||
Income from operations | 82,530 | 88,263 | 62,399 | 68,244 | ||||||||||
Net income attributable to Select Medical Corporation | $ | 36,608 | $ | 27,780 | $ | 23,272 | $ | 28,920 | ||||||
Select | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
(in thousands) | ||||||||||||||
Year ended December 31, 2014 | ||||||||||||||
Net operating revenues | $ | 762,578 | $ | 772,762 | $ | 758,069 | $ | 771,608 | ||||||
Income from operations | 78,444 | 82,193 | 66,017 | 57,822 | ||||||||||
Net income attributable to Select Medical Corporation | $ | 33,044 | $ | 35,341 | $ | 26,530 | $ | 25,712 | ||||||
Organization_and_Significant_A3
Organization and Significant Accounting Policies (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
item | item | item | |
Business Description | |||
Number of specialty hospitals operated by the entity | 129 | 123 | 122 |
Number of outpatient clinics operated by the entity | 1,023 | 1,006 | 979 |
Number of states in which the entity had facilities | 41 | 41 | 41 |
Accounts Receivable and Allowance for Doubtful Accounts | |||
Deductibles, co-payments and self-insured amounts as a percentage of net accounts receivable balance before doubtful accounts | 0.20% | 0.30% | |
Minimum period from date of discharge that outstanding governmental accounts are reserved as uncollectible | 365 days | ||
Minimum period from date of discharge that outstanding non-governmental accounts are reserved as uncollectible | 180 days |
Organization_and_Significant_A4
Organization and Significant Accounting Policies (Details 2) | 12 Months Ended |
Dec. 31, 2014 | |
Leasehold improvements | Minimum | |
Property and equipment | |
Estimated useful lives | 5 years |
Leasehold improvements | Maximum | |
Property and equipment | |
Estimated useful lives | 15 years |
Furniture and equipment | Minimum | |
Property and equipment | |
Estimated useful lives | 3 years |
Furniture and equipment | Maximum | |
Property and equipment | |
Estimated useful lives | 20 years |
Buildings | |
Property and equipment | |
Estimated useful lives | 40 years |
Building Improvements | Minimum | |
Property and equipment | |
Estimated useful lives | 5 years |
Building Improvements | Maximum | |
Property and equipment | |
Estimated useful lives | 25 years |
Land Improvements | Minimum | |
Property and equipment | |
Estimated useful lives | 2 years |
Land Improvements | Maximum | |
Property and equipment | |
Estimated useful lives | 25 years |
Organization_and_Significant_A5
Organization and Significant Accounting Policies (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Intangible Assets | |||
Impairment to goodwill or other recorded intangible assets | $0 | ||
Insurance Risk Programs | |||
Insurance risk programs | |||
Discount rate for provisions for losses for professional liability (as a percent) | 3.00% | 3.00% | 3.00% |
Liability recorded after discounting | 101.9 | 101.9 | 103.4 |
Value of aggregate liability, if the entity did not discount the provisions for losses | $105.50 | $106.80 |
Organization_and_Significant_A6
Organization and Significant Accounting Policies (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Non-Controlling Interest | |||
Redeemable non-controlling interests | $10,985 | $11,584 | |
Non-controlling interest | 35,725 | 32,408 | |
Net income attributable to non-controlling interests | 7,548 | 8,619 | 5,663 |
Revenue recognition | |||
Equity in earnings of unconsolidated subsidiaries | $7,044 | $2,476 | $7,705 |
Net operating revenues | Customer concentration | Medicare program | |||
Revenue recognition | |||
Percentage of concentration risk | 45.00% | 46.00% | 47.00% |
Accounts receivable | Customer concentration | Medicare program | |||
Revenue recognition | |||
Percentage of concentration risk | 32.00% | 32.00% | |
BIR JV, LLP | |||
Revenue recognition | |||
Percentage of non-consolidating interest | 49.00% | ||
OHRH, LLC | |||
Revenue recognition | |||
Percentage of non-consolidating interest | 49.00% | ||
Global Rehab - Scottsdale, LLC | |||
Revenue recognition | |||
Percentage of non-consolidating interest | 49.00% | ||
Rehabilitation Institute of Denton, LLC | |||
Revenue recognition | |||
Percentage of non-consolidating interest | 50.00% | ||
ES Rehabilitation LLC | |||
Revenue recognition | |||
Percentage of non-consolidating interest | 49.00% |
Acquisitions_Details
Acquisitions (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cost of acquired entity | |||
Goodwill | $1,642,083,000 | $1,642,633,000 | $1,640,534,000 |
Inpatient And Outpatient Rehabilitation Businesses | |||
Cost of acquired entity | |||
Total consideration | 3,200,000 | 5,600,000 | 10,500,000 |
Cash paid (net of cash acquired) | 1,100,000 | 1,700,000 | 6,000,000 |
Fair value of assets acquired, principally accounts receivable and property and equipment | 1,300,000 | 3,500,000 | 1,300,000 |
Goodwill | $1,900,000 | $2,100,000 | $9,200,000 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property and equipment | |||
Property and equipment, gross | $937,660,000 | $866,295,000 | |
Less: accumulated depreciation | 395,350,000 | 357,193,000 | |
Total property and equipment | 542,310,000 | 509,102,000 | |
Depreciation expense | 67,900,000 | 63,900,000 | 62,500,000 |
Land | |||
Property and equipment | |||
Property and equipment, gross | 71,635,000 | 68,492,000 | |
Leasehold improvements | |||
Property and equipment | |||
Property and equipment, gross | 155,648,000 | 146,117,000 | |
Buildings | |||
Property and equipment | |||
Property and equipment, gross | 396,228,000 | 368,968,000 | |
Furniture and equipment | |||
Property and equipment | |||
Property and equipment, gross | 272,919,000 | 256,079,000 | |
Construction-in-progress | |||
Property and equipment | |||
Property and equipment, gross | $41,230,000 | $26,639,000 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Indefinite-lived intangible assets: | |||
Goodwill | $1,642,083 | $1,642,633 | $1,640,534 |
Total | 1,714,602 | 1,714,540 | |
Trademarks | |||
Indefinite-lived intangible assets: | |||
Intangible assets excluding goodwill | 57,709 | 57,709 | |
Weighted average time until next renewal | 5 years 6 months | ||
Certificates of need | |||
Indefinite-lived intangible assets: | |||
Intangible assets excluding goodwill | 12,727 | 12,115 | |
Accreditations | |||
Indefinite-lived intangible assets: | |||
Intangible assets excluding goodwill | $2,083 | $2,083 | |
Weighted average time until next renewal | 1 year 6 months |
Intangible_Assets_Details_2
Intangible Assets (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill | ||
Balance at the beginning of the period | $1,642,633 | $1,640,534 |
Goodwill acquired during year | 1,866 | 2,232 |
Goodwill allocated to contributed business | -2,406 | |
Purchase accounting adjustment | 10 | -133 |
Balance at the end of the period | 1,642,083 | 1,642,633 |
Specialty Hospitals | ||
Goodwill | ||
Balance at the beginning of the period | 1,334,615 | 1,333,220 |
Goodwill acquired during year | 855 | 1,395 |
Purchase accounting adjustment | 10 | |
Balance at the end of the period | 1,335,460 | 1,334,615 |
Outpatient Rehabilitation | ||
Goodwill | ||
Balance at the beginning of the period | 308,018 | 307,314 |
Goodwill acquired during year | 1,011 | 837 |
Goodwill allocated to contributed business | -2,406 | |
Purchase accounting adjustment | -133 | |
Balance at the end of the period | $306,623 | $308,018 |
LongTerm_Debt_and_Notes_Payabl2
Long-Term Debt and Notes Payable (Details) (USD $) | 12 Months Ended | 3 Months Ended | 0 Months Ended | |||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | 28-May-13 | Jun. 03, 2013 | Oct. 23, 2014 | Mar. 04, 2014 | Mar. 11, 2014 | Jun. 01, 2011 | Oct. 22, 2014 | Aug. 13, 2012 | Feb. 20, 2013 | Mar. 22, 2013 | |
item | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Total debt | $1,552,976,000 | $1,445,275,000 | ||||||||||||
Less: current maturities | 10,874,000 | 17,565,000 | ||||||||||||
Total long-term debt | 1,542,102,000 | 1,427,710,000 | ||||||||||||
Gross proceeds from issuance of additional notes | 111,650,000 | 600,000,000 | ||||||||||||
Maturities of Long-Term Debt and Notes Payable | ||||||||||||||
2015 | 10,874,000 | |||||||||||||
2016 | 287,037,000 | |||||||||||||
2017 | 4,289,000 | |||||||||||||
2018 | 540,227,000 | |||||||||||||
2019 | 228,000 | |||||||||||||
2020 and beyond | 710,321,000 | |||||||||||||
Loss recognized associated with refinancing activities | 2,277,000 | 18,747,000 | 6,064,000 | |||||||||||
Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Less: current maturities | 10,874,000 | 17,565,000 | ||||||||||||
Total long-term debt | 1,542,102,000 | 1,427,710,000 | ||||||||||||
Gross proceeds from issuance of additional notes | 111,650,000 | 600,000,000 | ||||||||||||
Maturities of Long-Term Debt and Notes Payable | ||||||||||||||
Loss recognized associated with refinancing activities | 2,277,000 | 17,788,000 | 6,064,000 | |||||||||||
Amended senior secured facilities | Leverage ratio equal to 5.00 to 1.00 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Leverage ratio of financial maintenance covenant | 5 | |||||||||||||
Amended senior secured facilities | Leverage ratio equal to 4.21 To 1.00 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Leverage ratio of financial maintenance covenant | 4.18 | |||||||||||||
Amended senior secured facilities | Maximum | Leverage ratio equal to 5.00 to 1.00 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Leverage ratio of financial maintenance covenant | 5 | |||||||||||||
6.375% senior notes | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Interest rate of debt (as a percent) | 6.38% | 6.38% | ||||||||||||
Total debt | 711,465,000 | 600,000,000 | ||||||||||||
Unamortized premiums | 1,500,000 | |||||||||||||
6.375% senior notes | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Interest rate of debt (as a percent) | 6.38% | 6.38% | 6.38% | |||||||||||
Total debt | 711,500,000 | 600,000,000 | ||||||||||||
Aggregate principal amount | 600,000,000 | |||||||||||||
Percentage of principal amount at which notes may be required to be repurchased in event of change of control by the entity | 101.00% | |||||||||||||
Gross proceeds from issuance of additional notes | 600,000,000 | |||||||||||||
6.375% senior notes | Select | Prior to June 1, 2016 | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Percentage of the principal amount representing the redemption price of notes which may be redeemed with proceeds from certain equity offerings | 106.38% | |||||||||||||
6.375% senior notes | Maximum | Select | Prior to June 1, 2016 | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Percentage of the principal amount of the debt instrument which the entity may redeem with the proceeds from certain equity offerings | 35.00% | |||||||||||||
Senior secured credit facility | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Maximum borrowing capacity | 1,150,000,000 | |||||||||||||
Senior secured credit facility | Leverage ratio equal to 4.50 to 1.00 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Leverage ratio of financial maintenance covenant | 4.5 | |||||||||||||
Senior secured credit facility | Adjusted LIBO | Adjusted one-month LIBO | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Adjusted LIBO | |||||||||||||
Interest rate margin (as a percent) | 1.00% | |||||||||||||
Senior secured credit facility | Alternate base rate | JP Morgan Chase Bank, N.A's Prime Rate | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | JPMorgan Chase Bank, N.A.'s Prime Rate | |||||||||||||
Senior secured credit facility | Alternate base rate | Federal Funds Effective Rate | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate as a portion of 1% over weighted average rate on overnight Federal Funds (as a percent) | 50.00% | |||||||||||||
Basis for variable rate (as a percent) | 1.00% | |||||||||||||
Senior secured credit facility | Maximum | Proforma ratio less than or equal to 2.75 to 1.00 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Pro forma ratio of total indebtedness to Consolidated EBITDA | 2.75 | |||||||||||||
Revolving loan | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Total debt | 60,000,000 | 20,000,000 | ||||||||||||
Revolving loan | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Total debt | 60,000,000 | |||||||||||||
Maximum borrowing capacity | 350,000,000 | |||||||||||||
Number of credit extension amendments | 2 | |||||||||||||
Availability under revolving loan facility | 249,700,000 | |||||||||||||
Revolving loan | Proforma ratio less than or equal to 2.75 to 1.00 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Commitment fee (as a percent) | 0.50% | |||||||||||||
Revolving loan | Adjusted LIBO | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Adjusted LIBO | |||||||||||||
Interest rate margin (as a percent) | 3.75% | |||||||||||||
Revolving loan | Adjusted LIBO | Proforma ratio less than or equal to 2.75 to 1.00 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Adjusted LIBO | |||||||||||||
Revolving loan | Alternate base rate | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Alternate Base Rate | |||||||||||||
Interest rate margin (as a percent) | 2.75% | |||||||||||||
Revolving loan | Alternate base rate | Proforma ratio less than or equal to 2.75 to 1.00 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Alternate Base Rate | |||||||||||||
Revolving loan | Maximum | Adjusted LIBO | Proforma ratio less than or equal to 2.75 to 1.00 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Interest rate margin (as a percent) | 3.75% | |||||||||||||
Revolving loan | Maximum | Alternate base rate | Proforma ratio less than or equal to 2.75 to 1.00 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Interest rate margin (as a percent) | 2.75% | |||||||||||||
Revolving loan | Minimum | Adjusted LIBO | Proforma ratio less than or equal to 2.75 to 1.00 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Interest rate margin (as a percent) | 2.75% | |||||||||||||
Revolving loan | Minimum | Alternate base rate | Proforma ratio less than or equal to 2.75 to 1.00 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Interest rate margin (as a percent) | 1.75% | |||||||||||||
Revolving credit facility that matures on March 1, 2018 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Maximum borrowing capacity | 293,300,000 | 50,000,000 | ||||||||||||
Extended maturity amount of revolving credit facility | 6,750,000 | |||||||||||||
Revolving credit facility that matures on June 1, 2016 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Extended maturity amount of revolving credit facility | 6,750,000 | |||||||||||||
Term loans | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Total debt | 775,996,000 | 807,815,000 | ||||||||||||
Unamortized discounts | 4,200,000 | 6,300,000 | ||||||||||||
Term loans | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Long-term Debt, Gross | 780,200,000 | |||||||||||||
Unamortized discounts | 4,200,000 | |||||||||||||
Principal prepayments from excess cash flow | 34,000,000 | |||||||||||||
Percentage of net cash proceeds received from non-ordinary course asset sales or other dispositions, or as a result of a casualty or condemnation to be used for prepayment of debt | 100.00% | |||||||||||||
Percentage of net proceeds received from the issuance of debt obligations other than certain permitted debt obligations to be used for prepayment of debt | 100.00% | |||||||||||||
Percentage of aggregate principal amount in which term loans amortize quarterly | 0.25% | |||||||||||||
Maturities of Long-Term Debt and Notes Payable | ||||||||||||||
Loss recognized associated with refinancing activities | 2,300,000 | |||||||||||||
Term loans | Proforma ratio less than or equal to 2.75 to 1.00 | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Percentage of excess cash flow to be used for prepayment of debt | 50.00% | |||||||||||||
Series A term loan | Adjusted LIBO | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Extended maturity amount of revolving credit facility | 275,000,000 | |||||||||||||
Variable rate basis | Adjusted LIBO | |||||||||||||
Interest rate margin (as a percent) | 3.75% | |||||||||||||
Series A term loan | Alternate base rate | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Alternate Base Rate | |||||||||||||
Interest rate margin (as a percent) | 2.75% | |||||||||||||
Series B Term Loan | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Extended maturity amount of revolving credit facility | 300,000,000 | |||||||||||||
Series B Term Loan | Adjusted LIBO | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Adjusted LIBO | Adjusted LIBO | ||||||||||||
Interest rate margin (as a percent) | 3.75% | 3.25% | ||||||||||||
Series B Term Loan | Alternate base rate | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Alternate Base Rate | Alternate Base Rate | ||||||||||||
Interest rate margin (as a percent) | 2.75% | 2.25% | ||||||||||||
Series B Term Loan | Amended senior secured facilities | Adjusted LIBO | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Adjusted LIBO | |||||||||||||
Interest rate margin (as a percent) | 3.25% | |||||||||||||
Series B Term Loan | Amended senior secured facilities | Alternate base rate | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Alternate Base Rate | |||||||||||||
Interest rate margin (as a percent) | 2.25% | |||||||||||||
Series D Term Loan | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Aggregate principal amount | 284,600,000 | |||||||||||||
Series D Term Loan | Amended senior secured facilities | Adjusted LIBO | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Adjusted LIBO | Adjusted LIBO | ||||||||||||
Interest rate margin (as a percent) | 2.75% | 2.75% | ||||||||||||
Series D Term Loan | Amended senior secured facilities | Alternate base rate | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Alternate Base Rate | Alternate Base Rate | ||||||||||||
Interest rate margin (as a percent) | 1.75% | 1.75% | ||||||||||||
Series C Term Loan | Adjusted LIBO | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Adjusted LIBO | |||||||||||||
Interest rate margin (as a percent) | 3.00% | |||||||||||||
Series C Term Loan | Alternate base rate | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Alternate Base Rate | |||||||||||||
Interest rate margin (as a percent) | 2.00% | |||||||||||||
Series C Term Loan | Adjusted LIBO rate floor | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Adjusted LIBO rate floor | |||||||||||||
Interest rate margin (as a percent) | 1.00% | |||||||||||||
Series C Term Loan | Minimum | Adjusted LIBO | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Interest rate margin (as a percent) | 1.75% | |||||||||||||
Series C Term Loan | Amended senior secured facilities | Adjusted LIBO | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Adjusted LIBO | |||||||||||||
Interest rate margin (as a percent) | 3.00% | |||||||||||||
Series C Term Loan | Amended senior secured facilities | Alternate base rate | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Alternate Base Rate | |||||||||||||
Interest rate margin (as a percent) | 2.00% | |||||||||||||
Series C Term Loan | Amended senior secured facilities | Minimum | Adjusted LIBO | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Interest rate margin (as a percent) | 1.00% | |||||||||||||
Series E Term Loan | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Aggregate principal amount | 495,600,000 | |||||||||||||
Series E Term Loan | Amended senior secured facilities | Select | Prior to March 4, 2015 | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Prepayment premium (as a percent) | 1.00% | |||||||||||||
Series E Term Loan | Amended senior secured facilities | Adjusted LIBO | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Adjusted LIBO | Adjusted LIBO | ||||||||||||
Interest rate margin (as a percent) | 2.75% | 2.75% | ||||||||||||
Series E Term Loan | Amended senior secured facilities | Alternate base rate | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Alternate Base Rate | Alternate Base Rate | ||||||||||||
Interest rate margin (as a percent) | 1.75% | 1.75% | ||||||||||||
Series E Term Loan | Amended senior secured facilities | Adjusted LIBO rate floor | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Variable rate basis | Adjusted LIBO | Adjusted LIBO rate floor | ||||||||||||
Interest rate margin (as a percent) | 1.00% | |||||||||||||
Series E Term Loan | Amended senior secured facilities | Minimum | Adjusted LIBO rate floor | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Interest rate margin (as a percent) | 1.00% | |||||||||||||
Other | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Total debt | 5,515,000 | 17,460,000 | ||||||||||||
Letters of credit | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Maximum borrowing capacity | 75,000,000 | |||||||||||||
Outstanding letters of credit | 40,300,000 | |||||||||||||
Swingline loans | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Aggregate principal amount | 25,000,000 | |||||||||||||
Additional Notes | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Interest rate of debt (as a percent) | 6.38% | |||||||||||||
Aggregate principal amount | 110,000,000 | |||||||||||||
Issue price (as a percent) | 101.50% | |||||||||||||
Gross proceeds from issuance of additional notes | 111,700,000 | |||||||||||||
7 5/8% senior subordinated notes | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Interest rate of debt (as a percent) | 7.63% | 7.63% | ||||||||||||
Maturities of Long-Term Debt and Notes Payable | ||||||||||||||
Loss recognized associated with refinancing activities | 6,100,000 | |||||||||||||
7 5/8% senior subordinated notes | Select | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Interest rate of debt (as a percent) | 7.63% | 7.63% | ||||||||||||
Maturities of Long-Term Debt and Notes Payable | ||||||||||||||
Loss recognized associated with refinancing activities | -6,100,000 | |||||||||||||
Principal amount of debt repurchased and retired | $275,000,000 | |||||||||||||
10% senior subordinated notes | ||||||||||||||
Long-term debt and notes payable | ||||||||||||||
Interest rate of debt (as a percent) | 10.00% |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
item | |||
Stockholders' Equity | |||
Maximum amount authorized to be repurchased under the common stock repurchase program | $500 | ||
Number of shares repurchased under the program | 11,285,714 | 1,115,691 | 5,725,782 |
Value of shares repurchased under the program | 127.5 | 10 | 46.8 |
Number of directors who are affiliated with other entities | 2 | ||
Repurchase program available capacity | $198.90 | ||
Shares of restricted stock granted | 1,585,775 | 952,500 | 761,500 |
Shares of common stock related to the exercise of stock options issued | 974,969 | 166,600 | 301,208 |
Shares of common stock forfeited | 302,690 | 331,697 | 15,860 |
Stock_Option_and_Restricted_St2
Stock Option and Restricted Stock Plans (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 12, 2009 | |
Shares | ||||
Exercised (in shares) | -974,969 | -166,600 | -301,208 | |
Options | ||||
Stock option and restricted stock plans | ||||
Vesting period | 5 years | |||
Expiration term | 10 years | |||
Shares | ||||
Granted (in shares) | 0 | 0 | ||
Plans | Options | ||||
Weighted Average Exercise Price | ||||
Balance at the beginning of the period (in dollars per share) | 8.22 | 8.4 | ||
Exercised (in dollars per share) | 7.55 | 9.15 | ||
Canceled (in dollars per share) | 9.12 | 9.13 | ||
Balance at the end of the period (in dollars per share) | 8.85 | 8.22 | ||
Shares | ||||
Balance at the beginning of the period (in shares) | 1,940,000 | 2,423,000 | ||
Exercised (in shares) | -960,000 | -167,000 | ||
Canceled (in shares) | -81,000 | -316,000 | ||
Balance at the end of the period (in shares) | 899,000 | 1,940,000 | ||
Plans | Options | Minimum | ||||
Weighted Average Exercise Price | ||||
Balance at the beginning of the period (in dollars per share) | 3.33 | 3.33 | ||
Exercised (in dollars per share) | 3.33 | 7.14 | ||
Canceled (in dollars per share) | 8.33 | 8.33 | ||
Balance at the end of the period (in dollars per share) | 6.94 | 3.33 | ||
Plans | Options | Maximum | ||||
Weighted Average Exercise Price | ||||
Balance at the beginning of the period (in dollars per share) | 10 | 10 | ||
Exercised (in dollars per share) | 10 | 10 | ||
Canceled (in dollars per share) | 10 | 10 | ||
Balance at the end of the period (in dollars per share) | 10 | 10 | ||
Director Plan | Options | ||||
Stock option and restricted stock plans | ||||
Number of shares authorized | 75,000 | |||
Weighted Average Exercise Price | ||||
Balance at the beginning of the period (in dollars per share) | 8.69 | |||
Exercised (in dollars per share) | 7 | |||
Balance at the end of the period (in dollars per share) | 9.63 | 8.69 | ||
Shares | ||||
Balance at the beginning of the period (in shares) | 42,000 | |||
Exercised (in shares) | -15,000 | |||
Balance at the end of the period (in shares) | 27,000 | 42,000 | ||
Director Plan | Options | Minimum | ||||
Weighted Average Exercise Price | ||||
Balance at the beginning of the period (in dollars per share) | 3.33 | |||
Exercised (in dollars per share) | 3.33 | |||
Balance at the end of the period (in dollars per share) | 8.33 | 3.33 | ||
Director Plan | Options | Maximum | ||||
Weighted Average Exercise Price | ||||
Balance at the beginning of the period (in dollars per share) | 10 | |||
Exercised (in dollars per share) | 10 | |||
Balance at the end of the period (in dollars per share) | 10 | 10 | ||
Director Plan | Restricted stock awards | ||||
Stock option and restricted stock plans | ||||
Number of shares authorized | 150,000 |
Stock_Option_and_Restricted_St3
Stock Option and Restricted Stock Plans (Details 2) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 |
$ 6.00 - 7.00 | Plans | |
Additional information with respect to the outstanding options | |
Exercise price, low end of range (in dollars per share) | $6 |
Exercise price, high end of range (in dollars per share) | $7 |
Number Outstanding (in shares) | 6 |
Weighted Average Remaining Contractual Life | 5 years 7 months 10 days |
Number Exercisable (in shares) | 3 |
$ 7.01 - 8.00 | Plans | |
Additional information with respect to the outstanding options | |
Exercise price, low end of range (in dollars per share) | $7.01 |
Exercise price, high end of range (in dollars per share) | $8 |
Number Outstanding (in shares) | 43 |
Weighted Average Remaining Contractual Life | 6 years 2 months 23 days |
Number Exercisable (in shares) | 11 |
$ 8.01 - 9.00 | Plans | |
Additional information with respect to the outstanding options | |
Exercise price, low end of range (in dollars per share) | $8.01 |
Exercise price, high end of range (in dollars per share) | $9 |
Number Outstanding (in shares) | 290 |
Weighted Average Remaining Contractual Life | 2 years 2 months 9 days |
Number Exercisable (in shares) | 288 |
$ 8.01 - 9.00 | Director Plan | |
Additional information with respect to the outstanding options | |
Exercise price, low end of range (in dollars per share) | $8 |
Exercise price, high end of range (in dollars per share) | $9 |
Number Outstanding (in shares) | 6 |
Weighted Average Remaining Contractual Life | 2 years 2 months 27 days |
Number Exercisable (in shares) | 6 |
$ 9.01 - 10.00 | Plans | |
Additional information with respect to the outstanding options | |
Exercise price, low end of range (in dollars per share) | $9.01 |
Exercise price, high end of range (in dollars per share) | $10 |
Number Outstanding (in shares) | 560 |
Weighted Average Remaining Contractual Life | 4 years 9 months 22 days |
Number Exercisable (in shares) | 560 |
$ 9.01 - 10.00 | Director Plan | |
Additional information with respect to the outstanding options | |
Exercise price, low end of range (in dollars per share) | $9.01 |
Exercise price, high end of range (in dollars per share) | $10 |
Number Outstanding (in shares) | 21 |
Weighted Average Remaining Contractual Life | 4 years 1 month 13 days |
Number Exercisable (in shares) | 21 |
Stock_Option_and_Restricted_St4
Stock Option and Restricted Stock Plans (Details 3) (USD $) | 12 Months Ended | 0 Months Ended | ||||||||||||||
Share data in Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 29, 2014 | Aug. 06, 2014 | Apr. 30, 2014 | Feb. 19, 2014 | Oct. 30, 2013 | Aug. 07, 2013 | 1-May-13 | Feb. 20, 2013 | Jan. 02, 2013 | Oct. 30, 2012 | Aug. 07, 2012 | 2-May-12 | Mar. 26, 2012 |
Options | Plans | ||||||||||||||||
Stock option and restricted stock plans | ||||||||||||||||
Weighted average remaining contractual term for all outstanding options | 4 years 15 days | |||||||||||||||
Weighted average remaining contractual term of exercisable options | 3 years 11 months 12 days | |||||||||||||||
Total intrinsic value of options exercised (in dollars) | $5,900,000 | $200,000 | $1,100,000 | |||||||||||||
Aggregate intrinsic value of options outstanding (in dollars) | 5,000,000 | |||||||||||||||
Aggregate intrinsic value of options exercisable (in dollars) | 4,700,000 | |||||||||||||||
Options | Director Plan | ||||||||||||||||
Stock option and restricted stock plans | ||||||||||||||||
Weighted average remaining contractual term for all outstanding options | 3 years 8 months 12 days | 3 years 8 months 12 days | ||||||||||||||
Weighted average remaining contractual term of exercisable options | 3 years 8 months 12 days | |||||||||||||||
Aggregate intrinsic value of options outstanding (in dollars) | 128,800 | |||||||||||||||
Aggregate intrinsic value of options exercisable (in dollars) | 128,800 | |||||||||||||||
Restricted stock awards | ||||||||||||||||
Stock option and restricted stock plans | ||||||||||||||||
Number of Shares Issued | 225 | 1,010 | 158 | 193 | 760 | 38 | 115 | 35 | 5 | 530 | 38 | 129 | 65 | |||
Fair Value of Common Stock (in dollars per share) | $12.97 | $15.75 | $13.96 | $11.16 | $8.50 | $8.89 | $8.06 | $8.80 | $9.90 | $10.75 | $11.84 | $8.67 | $8.33 | |||
Stock compensation expense for each of the next five years, based on restricted stock awards granted | ||||||||||||||||
2015 | 12,781,000 | |||||||||||||||
2016 | 9,438,000 | |||||||||||||||
2017 | 4,859,000 | |||||||||||||||
2018 | 905,000 | |||||||||||||||
2019 | $56,000 |
Stock_Option_and_Restricted_St5
Stock Option and Restricted Stock Plans (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock compensation expense: | |||
Total | $11,042 | $7,033 | $5,677 |
Included in general and administrative | |||
Stock compensation expense: | |||
Total | 9,027 | 5,276 | 3,538 |
Included in cost of services | |||
Stock compensation expense: | |||
Total | $2,015 | $1,757 | $2,139 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current: | |||
Federal | $52,063 | $55,847 | $70,159 |
State and local | 9,248 | 11,913 | 11,589 |
Total current | 61,311 | 67,760 | 81,748 |
Deferred | 14,311 | 7,032 | 7,909 |
Total income tax provision | 75,622 | 74,792 | 89,657 |
Differences between the expected income tax provision and income taxes computed at the federal statutory rate | |||
Expected federal tax rate (as a percent) | 35.00% | 35.00% | 35.00% |
State and local taxes, net of federal benefit (as a percent) | 4.20% | 4.60% | 4.20% |
Other permanent differences (as a percent) | 0.80% | 1.10% | 0.60% |
Valuation allowance (as a percent) | -0.40% | -0.70% | -0.60% |
Uncertain tax positions (as a percent) | -0.30% | -0.60% | -0.50% |
IRS audit settlements (as a percent) | -0.40% | -0.60% | |
Non-controlling interest (as a percent) | -1.50% | -1.70% | -0.90% |
Other (as a percent) | -0.30% | 0.10% | -0.40% |
Total (as a percent) | 37.10% | 37.80% | 36.80% |
Select | |||
Current: | |||
Federal | 52,063 | 57,026 | 74,076 |
State and local | 9,248 | 11,913 | 11,589 |
Total current | 61,311 | 68,939 | 85,665 |
Deferred | 14,311 | 7,032 | 7,909 |
Total income tax provision | $75,622 | $75,971 | $93,574 |
Differences between the expected income tax provision and income taxes computed at the federal statutory rate | |||
Expected federal tax rate (as a percent) | 35.00% | 35.00% | 35.00% |
State and local taxes, net of federal benefit (as a percent) | 4.20% | 4.50% | 4.00% |
Other permanent differences (as a percent) | 0.80% | 1.10% | 0.60% |
Valuation allowance (as a percent) | -0.40% | -0.60% | -0.60% |
Uncertain tax positions (as a percent) | -0.30% | -0.60% | -0.50% |
IRS audit settlements (as a percent) | -0.40% | -0.50% | |
Non-controlling interest (as a percent) | -1.50% | -1.70% | -0.90% |
Other (as a percent) | -0.30% | 0.10% | -0.40% |
Total (as a percent) | 37.10% | 37.80% | 36.70% |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets | ||
Allowance for doubtful accounts, Total | $701 | $1,484 |
Allowance for doubtful accounts, Current | 701 | 1,484 |
Compensation and benefit related accruals, Total | 49,373 | 45,147 |
Compensation and benefit related accruals, Current | 38,722 | 35,706 |
Compensation and benefit related accruals, Non-Current | 10,651 | 9,441 |
Professional malpractice liability insurance, Total | 17,934 | 20,333 |
Professional malpractice liability insurance, Current | 4,732 | 6,382 |
Professional malpractice liability insurance, Non-Current | 13,202 | 13,951 |
Restructuring reserve, Total | 333 | 441 |
Restructuring reserve, Current | 333 | 441 |
Deferred revenue, Total | -829 | |
Deferred revenue, Current | -829 | |
Net operating loss carryforwards, Total | 21,555 | 22,686 |
Net operating loss carryforwards, Current | 436 | 422 |
Net operating loss carryforwards, Non-Current | 21,119 | 22,264 |
Other, Total | 552 | 630 |
Other, Current | 552 | 630 |
Stock options, Total | 5,336 | 4,392 |
Stock options, Non-Current | 5,336 | 4,392 |
Equity investments, Total | 3,475 | |
Equity investments, Non-Current | 3,475 | |
Uncertain tax positions, Total | 1,632 | 2,107 |
Uncertain tax positions, Non-Current | 1,632 | 2,107 |
Total deferred tax assets, Total | 100,062 | 97,220 |
Total deferred tax assets, Current | 44,647 | 45,065 |
Total deferred tax assets, Non-Current | 55,415 | 52,155 |
Deferred tax liabilities | ||
Deferred income, Total | -31,190 | -31,832 |
Deferred income, Current | -25,651 | -24,897 |
Deferred income, Non-Current | -5,539 | -6,935 |
Investment in unconsolidated affiliates, Total | -3,659 | -2,620 |
Investment in unconsolidated affiliates, Current | -230 | |
Investment in unconsolidated affiliates, Non-Current | -3,659 | -2,390 |
Other, Total | -1,587 | |
Other, Current | -1,093 | |
Other, Non-Current | -494 | |
Depreciation and amortization, Total | -147,197 | -130,884 |
Depreciation and amortization, Non-Current | -147,197 | -130,884 |
Total deferred tax liabilities, Total | -183,633 | -165,336 |
Total deferred tax liabilities, Current | -26,744 | -25,127 |
Total deferred tax liabilities, Non-Current | -156,889 | -140,209 |
Net deferred taxes before valuation allowance, Total | -83,571 | -68,116 |
Net deferred taxes before valuation allowance, Current | 17,903 | 19,938 |
Net deferred taxes before valuation allowance, Non-Current | -101,474 | -88,054 |
Valuation allowance, Total | -9,641 | -10,547 |
Valuation allowance, Current | -1,912 | -2,314 |
Valuation allowance, Non-Current | -7,729 | -8,233 |
Net deferred taxes, Total | -93,212 | -78,663 |
Net deferred taxes, Current | 15,991 | 17,624 |
Net deferred taxes, Non-Current | ($109,203) | ($96,287) |
Additional information related to valuation allowance | ||
Period of review for assessment of deferred tax assets | 3 years |
Income_Taxes_Details_3
Income Taxes (Details 3) (State, USD $) | Dec. 31, 2014 |
State | |
Net operating loss carry forwards | |
Net operating losses | $491,300,000 |
State Net Operating Losses | |
2015 | 7,487,000 |
2016 | 10,958,000 |
2017 | 12,648,000 |
2018 | 7,240,000 |
Thereafter through 2034 | 453,004,000 |
Gross Valuation Allowance | |
2015 | 7,178,000 |
2016 | 9,527,000 |
2017 | 11,257,000 |
2018 | 5,493,000 |
Thereafter through 2034 | $348,580,000 |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Reconciliation of the Company's unrecognized tax benefits | |||
Gross tax contingencies at the beginning of the period | $12,026,000 | $13,890,000 | $15,656,000 |
Reductions for tax positions taken in prior periods due primarily to statute expiration | -1,632,000 | -2,299,000 | -2,516,000 |
Additions for existing tax positions taken | 273,000 | 435,000 | 750,000 |
Gross tax contingencies at the end of the period | 10,667,000 | 12,026,000 | 13,890,000 |
Unrecognized tax benefits, if fully recognized, would affect effective income tax rate | 10,700,000 | 12,000,000 | |
Amount of unrecognized tax benefits eligible for release in the next 12 months | 3,300,000 | ||
Accrued interest related to income taxes | 1,900,000 | 1,600,000 | |
Interest recognized | $500,000 | $500,000 | $500,000 |
Retirement_Savings_Plan_Detail
Retirement Savings Plan (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Retirement savings plan | |||
Matching contribution by the employer (as a percent) | 25.00% | ||
Matching contribution of the employees (as a percent) | 6.00% | ||
Vesting period | 3 years | ||
Expense incurred | $9.30 | $8.70 | $8.20 |
Employees who are not classified as HCE's | Maximum | |||
Retirement savings plan | |||
Contribution by employees (as a percent) | 30.00% | ||
HCE | Maximum | |||
Retirement savings plan | |||
Contribution by employees (as a percent) | 7.00% |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Summary of selected financial data | |||||||||||
Net revenue | $771,608,000 | $758,069,000 | $772,762,000 | $762,578,000 | $746,175,000 | $722,845,000 | $756,673,000 | $749,955,000 | $3,065,017,000 | $2,975,648,000 | $2,948,969,000 |
Adjusted EBITDA | 363,872,000 | 372,861,000 | 405,847,000 | ||||||||
Total assets | 2,924,809,000 | 2,817,622,000 | 2,924,809,000 | 2,817,622,000 | 2,761,361,000 | ||||||
Capital expenditures | 95,246,000 | 73,660,000 | 68,185,000 | ||||||||
Specialty Hospitals | |||||||||||
Summary of selected financial data | |||||||||||
Real estate assets held for sale | 2,700,000 | 2,700,000 | 2,700,000 | 2,700,000 | 2,700,000 | ||||||
Select | |||||||||||
Summary of selected financial data | |||||||||||
Net revenue | 771,608,000 | 758,069,000 | 772,762,000 | 762,578,000 | 746,175,000 | 722,845,000 | 756,673,000 | 749,955,000 | 3,065,017,000 | 2,975,648,000 | 2,948,969,000 |
Total assets | 2,924,809,000 | 2,817,622,000 | 2,924,809,000 | 2,817,622,000 | 2,760,313,000 | ||||||
Capital expenditures | 95,246,000 | 73,660,000 | 68,185,000 | ||||||||
Operating Segments | Specialty Hospitals | |||||||||||
Summary of selected financial data | |||||||||||
Net revenue | 2,244,899,000 | 2,198,121,000 | 2,197,529,000 | ||||||||
Adjusted EBITDA | 341,787,000 | 353,843,000 | 381,354,000 | ||||||||
Total assets | 2,279,665,000 | 2,205,921,000 | 2,279,665,000 | 2,205,921,000 | 2,143,906,000 | ||||||
Capital expenditures | 77,742,000 | 56,523,000 | 50,005,000 | ||||||||
Operating Segments | Outpatient Rehabilitation | |||||||||||
Segment information | |||||||||||
Number of operating segments | 2 | ||||||||||
Summary of selected financial data | |||||||||||
Net revenue | 819,397,000 | 777,177,000 | 751,317,000 | ||||||||
Adjusted EBITDA | 97,584,000 | 90,313,000 | 87,024,000 | ||||||||
Total assets | 532,685,000 | 512,539,000 | 532,685,000 | 512,539,000 | 491,920,000 | ||||||
Capital expenditures | 12,506,000 | 14,113,000 | 13,209,000 | ||||||||
Operating Segments | Select | Specialty Hospitals | |||||||||||
Summary of selected financial data | |||||||||||
Total assets | 2,279,665,000 | 2,205,921,000 | 2,279,665,000 | 2,205,921,000 | 2,143,906,000 | ||||||
Operating Segments | Select | Outpatient Rehabilitation | |||||||||||
Summary of selected financial data | |||||||||||
Total assets | 532,685,000 | 512,539,000 | 532,685,000 | 512,539,000 | 491,920,000 | ||||||
Other | |||||||||||
Summary of selected financial data | |||||||||||
Net revenue | 721,000 | 350,000 | 123,000 | ||||||||
Adjusted EBITDA | -75,499,000 | -71,295,000 | -62,531,000 | ||||||||
Total assets | 112,459,000 | 99,162,000 | 112,459,000 | 99,162,000 | 125,535,000 | ||||||
Capital expenditures | 4,998,000 | 3,024,000 | 4,971,000 | ||||||||
Other | Select | |||||||||||
Summary of selected financial data | |||||||||||
Total assets | $112,459,000 | $99,162,000 | $112,459,000 | $99,162,000 | $124,487,000 |
Segment_Information_Details_2
Segment Information (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment information | |||||||||||
Adjusted EBITDA | $363,872 | $372,861 | $405,847 | ||||||||
Depreciation and amortization | -68,354 | -64,392 | -63,311 | ||||||||
Stock compensation expense | -11,042 | -7,033 | -5,677 | ||||||||
Income from operations | 57,822 | 66,017 | 82,193 | 78,444 | 68,244 | 62,399 | 88,263 | 82,530 | 284,476 | 301,436 | 336,859 |
Loss on early retirement of debt | -2,277 | -18,747 | -6,064 | ||||||||
Equity in earnings of unconsolidated subsidiaries | 7,044 | 2,476 | 7,705 | ||||||||
Interest expense, net | -85,446 | -87,364 | -94,950 | ||||||||
Income before income taxes | 203,797 | 197,801 | 243,550 | ||||||||
Select | |||||||||||
Segment information | |||||||||||
Depreciation and amortization | -68,354 | -64,392 | -63,311 | ||||||||
Income from operations | 57,822 | 66,017 | 82,193 | 78,444 | 68,244 | 62,399 | 88,263 | 82,530 | 284,476 | 301,436 | 336,859 |
Loss on early retirement of debt | -2,277 | -17,788 | -6,064 | ||||||||
Equity in earnings of unconsolidated subsidiaries | 7,044 | 2,476 | 7,705 | ||||||||
Interest expense, net | -85,446 | -84,954 | -83,759 | ||||||||
Income before income taxes | 203,797 | 201,170 | 254,741 | ||||||||
Operating Segments | Specialty Hospitals | |||||||||||
Segment information | |||||||||||
Adjusted EBITDA | 341,787 | 353,843 | 381,354 | ||||||||
Depreciation and amortization | -51,786 | -48,621 | -46,836 | ||||||||
Income from operations | 290,001 | 305,222 | 334,518 | ||||||||
Operating Segments | Outpatient Rehabilitation | |||||||||||
Segment information | |||||||||||
Adjusted EBITDA | 97,584 | 90,313 | 87,024 | ||||||||
Depreciation and amortization | -12,845 | -12,024 | -13,208 | ||||||||
Income from operations | 84,739 | 78,289 | 73,816 | ||||||||
Other | |||||||||||
Segment information | |||||||||||
Adjusted EBITDA | -75,499 | -71,295 | -62,531 | ||||||||
Depreciation and amortization | -3,723 | -3,747 | -3,267 | ||||||||
Stock compensation expense | -11,042 | -7,033 | -5,677 | ||||||||
Income from operations | ($90,264) | ($82,075) | ($71,475) |
Income_per_Share_Details
Income per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator: | |||||||||||
Net income attributable to Select Medical Holdings Corporation | $25,712 | $26,530 | $35,341 | $33,044 | $28,920 | $23,272 | $27,780 | $34,418 | $120,627 | $114,390 | $148,230 |
Less: Earnings allocated to unvested restricted stockholders | 3,337 | 2,450 | 2,514 | ||||||||
Net income available to common stockholders | 117,290 | 111,940 | 145,716 | ||||||||
Denominator: | |||||||||||
Weighted average shares - basic | 129,026 | 136,879 | 138,767 | ||||||||
Effect of dilutive securities: Stock options (in shares) | 439 | 168 | 275 | ||||||||
Weighted average shares - diluted | 129,465 | 137,047 | 139,042 | ||||||||
Income per common share | |||||||||||
Contractual dividends | $0 | $0 | $0 | ||||||||
Basic income per common share (in dollars per share) | $0.20 | $0.20 | $0.27 | $0.24 | $0.21 | $0.17 | $0.20 | $0.25 | $0.91 | $0.82 | $1.05 |
Diluted income per common share (in dollars per share) | $0.20 | $0.20 | $0.27 | $0.24 | $0.21 | $0.17 | $0.20 | $0.24 | $0.91 | $0.82 | $1.05 |
Anti-dilutive securities excluded from computation of earnings per share | |||||||||||
Stock options (in shares) | 6 | 1,474 | 1,654 |
Fair_Value_Details
Fair Value (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | 28-May-13 |
Fair Value | |||
Carrying value | $1,552,976,000 | $1,445,275,000 | |
Senior secured credit facility | Select | |||
Fair Value | |||
Carrying value | 836,000,000 | 827,800,000 | |
Fair value | 816,600,000 | 834,700,000 | |
6.375% senior notes | |||
Fair Value | |||
Carrying value | 711,465,000 | 600,000,000 | |
Interest rate of debt (as a percent) | 6.38% | 6.38% | |
6.375% senior notes | Select | |||
Fair Value | |||
Carrying value | 711,500,000 | 600,000,000 | |
Fair value | $722,400,000 | $586,500,000 | |
Interest rate of debt (as a percent) | 6.38% | 6.38% | 6.38% |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Related party transactions | |||
Net operating revenues from contracted services and management fees to related parties | $129,267,000 | $110,136,000 | $100,478,000 |
Future rental commitments under outstanding agreements | |||
2015 | 132,644,000 | ||
2016 | 110,719,000 | ||
2017 | 90,385,000 | ||
2018 | 70,601,000 | ||
2019 | 53,380,000 | ||
Thereafter | 333,329,000 | ||
Total | 791,058,000 | ||
Affiliated companies | |||
Related party transactions | |||
Payments for office rent, leasehold improvements and miscellaneous expenses | 4,400,000 | 4,200,000 | 4,000,000 |
Future rental commitments under outstanding agreements | |||
2015 | 4,128,000 | ||
2016 | 4,174,000 | ||
2017 | 4,221,000 | ||
2018 | 4,318,000 | ||
2019 | 4,421,000 | ||
Thereafter | 13,912,000 | ||
Total | 35,174,000 | ||
BIR JV, LLP | |||
Related party transactions | |||
Net operating revenues from contracted services and management fees to related parties | 101,385,000 | 96,465,000 | 92,205,000 |
Rehabilitation Institute of Denton, LLC | |||
Related party transactions | |||
Net operating revenues from contracted services and management fees to related parties | 8,337,000 | 7,163,000 | 8,133,000 |
OHRH, LLC | |||
Related party transactions | |||
Net operating revenues from contracted services and management fees to related parties | 8,280,000 | 2,069,000 | |
Global Rehab - Scottsdale, LLC | |||
Related party transactions | |||
Net operating revenues from contracted services and management fees to related parties | 10,747,000 | 4,129,000 | |
Other | |||
Related party transactions | |||
Net operating revenues from contracted services and management fees to related parties | $518,000 | $310,000 | $140,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Future rental commitments under outstanding agreements | |||
2015 | $132,644,000 | ||
2016 | 110,719,000 | ||
2017 | 90,385,000 | ||
2018 | 70,601,000 | ||
2019 | 53,380,000 | ||
Thereafter | 333,329,000 | ||
Total | 791,058,000 | ||
Total rent expense for operating leases | 169,100,000 | 164,600,000 | 168,300,000 |
Property rent expense to unrelated parties | 124,400,000 | 119,500,000 | 118,100,000 |
Construction Commitments | |||
Outstanding commitments under construction contracts | $58,900,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (Naming, promotional and sponsorship agreement, Select, USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Naming, promotional and sponsorship agreement | Select | |
Commitments and Contingencies | |
Amount expected to be paid in next year | $3 |
Increase in successive annual payment (as a percent) | 0.023 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 3) (USD $) | 12 Months Ended | 0 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Mar. 29, 2013 | Jan. 08, 2013 |
item | |||
Professional liability claims | |||
Commitments and Contingencies | |||
Self insurance retention per occurrence | $2 | ||
General liability claims | |||
Commitments and Contingencies | |||
Self insurance retention per occurrence | $2 | ||
Amended complaint | SSH-Evansville | |||
Commitments and Contingencies | |||
Number of case managers identified as plaintiff | 2 | ||
Number of physicians named as defendants | 2 | ||
Number of days the deadlines have been stayed from the Magistrate judge | 90 days |
Supplemental_Disclosures_of_Ca2
Supplemental Disclosures of Cash Flow Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Notes issued with acquisitions | $327 | $3,283 | $1,844 |
Liabilities assumed with acquisitions | 122 | 885 | 107 |
Contingent consideration related to acquisitions | 100 | 1,500 | |
Accrual for property, plant and equipment | 14,230 | ||
Notes issued to acquire non-consolidating interest | 3,399 | ||
Select | |||
Dividends declared to Holdings | -5,240 | ||
Notes issued with acquisitions | 327 | 3,283 | 1,844 |
Liabilities assumed with acquisitions | 122 | 885 | 107 |
Contingent consideration related to acquisitions | 100 | 1,500 | |
Accrual for property, plant and equipment | 14,230 | ||
Notes issued to acquire non-consolidating interest | $3,399 |
Subsequent_Event_Details
Subsequent Event (Details) (Select, Subsequent Event, USD $) | 0 Months Ended |
Feb. 18, 2015 | |
Select | Subsequent Event | |
Subsequent Event | |
Cash dividend declared (in dollars per share) | $0.10 |
Financial_Information_for_Subs2
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes (Details) (6.375% senior notes) | Dec. 31, 2014 | Dec. 31, 2013 | 28-May-13 |
Financial information for subsidiary guarantors and non-guarantor subsidiaries under select's 6.375% senior notes | |||
Interest rate of debt (as a percent) | 6.38% | 6.38% | |
Select | |||
Financial information for subsidiary guarantors and non-guarantor subsidiaries under select's 6.375% senior notes | |||
Interest rate of debt (as a percent) | 6.38% | 6.38% | 6.38% |
Financial_Information_for_Subs3
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Current Assets: | ||||
Cash and cash equivalents | $3,354 | $4,319 | $40,144 | $12,043 |
Accounts receivable, net | 444,269 | 391,319 | ||
Current deferred tax asset | 15,991 | 17,624 | ||
Prepaid income taxes | 17,888 | |||
Other current assets | 46,142 | 41,140 | ||
Total Current Assets | 527,644 | 454,402 | ||
Property and equipment, net | 542,310 | 509,102 | ||
Goodwill | 1,642,083 | 1,642,633 | 1,640,534 | |
Non-current deferred tax asset | -109,203 | -96,287 | ||
Other identifiable intangibles | 72,519 | 71,907 | ||
Other assets | 140,253 | 139,578 | ||
Total Assets | 2,924,809 | 2,817,622 | 2,761,361 | |
Current Liabilities: | ||||
Bank overdrafts | 21,746 | 12,506 | ||
Current portion of long-term debt and notes payable | 10,874 | 17,565 | ||
Accounts payable | 108,532 | 88,285 | ||
Accrued payroll | 97,090 | 90,011 | ||
Accrued vacation | 63,132 | 59,730 | ||
Accrued interest | 10,674 | 12,297 | ||
Accrued other | 82,376 | 90,508 | ||
Income taxes payable | 622 | |||
Total Current Liabilities | 394,424 | 371,524 | ||
Long-term debt, net of current portion | 1,542,102 | 1,427,710 | ||
Non-current deferred tax liability | 109,203 | 96,287 | ||
Other non-current liabilities | 92,855 | 91,875 | ||
Total Liabilities | 2,138,584 | 1,987,396 | ||
Redeemable non-controlling interests | 10,985 | 11,584 | ||
Stockholder's Equity: | ||||
Common stock | 131 | 140 | ||
Capital in excess of par | 413,706 | 474,729 | ||
Retained earnings (accumulated deficit) | 325,678 | 311,365 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 739,515 | 786,234 | ||
Non-controlling interests | 35,725 | 32,408 | ||
Total Equity | 775,240 | 818,642 | 745,478 | 846,338 |
Total Liabilities and Equity | 2,924,809 | 2,817,622 | ||
Select | ||||
Current Assets: | ||||
Cash and cash equivalents | 3,354 | 4,319 | 40,144 | 12,043 |
Accounts receivable, net | 444,269 | 391,319 | ||
Current deferred tax asset | 15,991 | 17,624 | ||
Prepaid income taxes | 17,888 | |||
Other current assets | 46,142 | 41,140 | ||
Total Current Assets | 527,644 | 454,402 | ||
Property and equipment, net | 542,310 | 509,102 | ||
Goodwill | 1,642,083 | 1,642,633 | ||
Other identifiable intangibles | 72,519 | 71,907 | ||
Other assets | 140,253 | 139,578 | ||
Total Assets | 2,924,809 | 2,817,622 | 2,760,313 | |
Current Liabilities: | ||||
Bank overdrafts | 21,746 | 12,506 | ||
Current portion of long-term debt and notes payable | 10,874 | 17,565 | ||
Accounts payable | 108,532 | 88,285 | ||
Accrued payroll | 97,090 | 90,011 | ||
Accrued vacation | 63,132 | 59,730 | ||
Accrued interest | 10,674 | 12,297 | ||
Accrued other | 82,376 | 90,508 | ||
Income taxes payable | 622 | |||
Total Current Liabilities | 394,424 | 371,524 | ||
Long-term debt, net of current portion | 1,542,102 | 1,427,710 | ||
Non-current deferred tax liability | 109,203 | 96,287 | ||
Other non-current liabilities | 92,855 | 91,875 | ||
Total Liabilities | 2,138,584 | 1,987,396 | ||
Redeemable non-controlling interests | 10,985 | 11,584 | ||
Stockholder's Equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par | 885,407 | 869,576 | ||
Retained earnings (accumulated deficit) | -145,892 | -83,342 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 739,515 | 786,234 | ||
Non-controlling interests | 35,725 | 32,408 | ||
Total Equity | 775,240 | 818,642 | 909,747 | 1,010,105 |
Total Liabilities and Equity | 2,924,809 | 2,817,622 | ||
Select | Reportable legal entities | Select Medical Corporation (Parent Company Only) | ||||
Current Assets: | ||||
Cash and cash equivalents | 70 | 71 | 35,070 | 11,427 |
Current deferred tax asset | 10,186 | 7,965 | ||
Prepaid income taxes | 17,888 | |||
Other current assets | 7,860 | 9,745 | ||
Total Current Assets | 36,004 | 17,781 | ||
Property and equipment, net | 17,521 | 15,624 | ||
Investment in affiliates | 3,725,915 | 3,060,832 | ||
Non-current deferred tax asset | 11,230 | 7,662 | ||
Other assets | 32,463 | 35,274 | ||
Total Assets | 3,823,133 | 3,137,173 | ||
Current Liabilities: | ||||
Bank overdrafts | 21,746 | 12,506 | ||
Current portion of long-term debt and notes payable | 8,496 | 9,107 | ||
Accounts payable | 9,885 | 6,749 | ||
Intercompany payables | 1,820,047 | 1,186,015 | ||
Accrued payroll | 17,410 | 1,167 | ||
Accrued vacation | 5,070 | 4,619 | ||
Accrued interest | 10,596 | 11,076 | ||
Accrued other | 39,801 | 59,249 | ||
Income taxes payable | 622 | |||
Total Current Liabilities | 1,933,051 | 1,291,110 | ||
Long-term debt, net of current portion | 1,098,151 | 1,006,201 | ||
Other non-current liabilities | 52,416 | 53,628 | ||
Total Liabilities | 3,083,618 | 2,350,939 | ||
Stockholder's Equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par | 885,407 | 869,576 | ||
Retained earnings (accumulated deficit) | -145,892 | -83,342 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 739,515 | 786,234 | ||
Total Equity | 739,515 | 786,234 | ||
Total Liabilities and Equity | 3,823,133 | 3,137,173 | ||
Select | Reportable legal entities | Subsidiary Guarantors | ||||
Current Assets: | ||||
Cash and cash equivalents | 2,454 | 3,098 | 3,734 | |
Accounts receivable, net | 376,780 | 339,694 | ||
Current deferred tax asset | 2,458 | 5,221 | ||
Intercompany receivables | 1,698,600 | 1,083,280 | ||
Other current assets | 32,919 | 27,448 | ||
Total Current Assets | 2,113,211 | 1,458,741 | ||
Property and equipment, net | 468,138 | 438,057 | ||
Investment in affiliates | 82,514 | 79,376 | ||
Goodwill | 1,642,083 | 1,642,633 | ||
Other identifiable intangibles | 72,519 | 71,907 | ||
Other assets | 106,843 | 103,687 | ||
Total Assets | 4,485,308 | 3,794,401 | ||
Current Liabilities: | ||||
Current portion of long-term debt and notes payable | 1,844 | 7,344 | ||
Accounts payable | 84,304 | 69,534 | ||
Accrued payroll | 79,435 | 88,599 | ||
Accrued vacation | 49,315 | 47,682 | ||
Accrued interest | 78 | 1,221 | ||
Accrued other | 34,107 | 25,144 | ||
Total Current Liabilities | 249,083 | 239,524 | ||
Long-term debt, net of current portion | 364,794 | 365,460 | ||
Non-current deferred tax liability | 112,013 | 96,488 | ||
Other non-current liabilities | 35,576 | 33,163 | ||
Total Liabilities | 761,466 | 734,635 | ||
Stockholder's Equity: | ||||
Common stock | 0 | 0 | ||
Retained earnings (accumulated deficit) | 1,048,455 | 921,745 | ||
Subsidiary investment | 2,675,387 | 2,136,723 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 3,723,842 | 3,058,468 | ||
Non-controlling interests | 1,298 | |||
Total Equity | 3,723,842 | 3,059,766 | ||
Total Liabilities and Equity | 4,485,308 | 3,794,401 | ||
Select | Reportable legal entities | Non-Guarantor Subsidiaries | ||||
Current Assets: | ||||
Cash and cash equivalents | 830 | 1,150 | 1,340 | 616 |
Accounts receivable, net | 67,489 | 52,275 | ||
Current deferred tax asset | 3,347 | 4,438 | ||
Intercompany receivables | 121,447 | 102,735 | ||
Other current assets | 5,363 | 3,947 | ||
Total Current Assets | 198,476 | 164,545 | ||
Property and equipment, net | 56,651 | 55,421 | ||
Other assets | 947 | 617 | ||
Total Assets | 256,074 | 220,583 | ||
Current Liabilities: | ||||
Current portion of long-term debt and notes payable | 534 | 1,114 | ||
Accounts payable | 14,343 | 12,002 | ||
Accrued payroll | 245 | 245 | ||
Accrued vacation | 8,747 | 7,429 | ||
Accrued other | 8,468 | 6,765 | ||
Total Current Liabilities | 32,337 | 27,555 | ||
Long-term debt, net of current portion | 79,157 | 56,049 | ||
Non-current deferred tax liability | 8,420 | 7,461 | ||
Other non-current liabilities | 4,863 | 5,084 | ||
Total Liabilities | 124,777 | 96,149 | ||
Redeemable non-controlling interests | 10,985 | 11,584 | ||
Stockholder's Equity: | ||||
Common stock | 0 | 0 | ||
Retained earnings (accumulated deficit) | 8,366 | 17,750 | ||
Subsidiary investment | 76,221 | 63,990 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | 84,587 | 81,740 | ||
Non-controlling interests | 35,725 | 31,110 | ||
Total Equity | 120,312 | 112,850 | ||
Total Liabilities and Equity | 256,074 | 220,583 | ||
Select | Eliminations | ||||
Current Assets: | ||||
Accounts receivable, net | -650 | |||
Intercompany receivables | -1,820,047 | -1,186,015 | ||
Total Current Assets | -1,820,047 | -1,186,665 | ||
Investment in affiliates | -3,808,429 | -3,140,208 | ||
Non-current deferred tax asset | -11,230 | -7,662 | ||
Total Assets | -5,639,706 | -4,334,535 | ||
Current Liabilities: | ||||
Intercompany payables | -1,820,047 | -1,186,015 | ||
Accrued other | -650 | |||
Total Current Liabilities | -1,820,047 | -1,186,665 | ||
Non-current deferred tax liability | -11,230 | -7,662 | ||
Total Liabilities | -1,831,277 | -1,194,327 | ||
Stockholder's Equity: | ||||
Common stock | 0 | 0 | ||
Retained earnings (accumulated deficit) | -1,056,821 | -939,495 | ||
Subsidiary investment | -2,751,608 | -2,200,713 | ||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders' Equity | -3,808,429 | -3,140,208 | ||
Total Equity | -3,808,429 | -3,140,208 | ||
Total Liabilities and Equity | ($5,639,706) | ($4,334,535) |
Financial_Information_for_Subs4
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidating Statement of Operations | |||||||||||
Net operating revenues | $771,608 | $758,069 | $772,762 | $762,578 | $746,175 | $722,845 | $756,673 | $749,955 | $3,065,017 | $2,975,648 | $2,948,969 |
Costs and expenses: | |||||||||||
Cost of services | 2,582,340 | 2,495,476 | 2,443,550 | ||||||||
General and administrative | 85,247 | 76,921 | 66,194 | ||||||||
Bad debt expense | 44,600 | 37,423 | 39,055 | ||||||||
Depreciation and amortization | 68,354 | 64,392 | 63,311 | ||||||||
Total costs and expenses | 2,780,541 | 2,674,212 | 2,612,110 | ||||||||
Income from operations | 57,822 | 66,017 | 82,193 | 78,444 | 68,244 | 62,399 | 88,263 | 82,530 | 284,476 | 301,436 | 336,859 |
Other income and expense: | |||||||||||
Equity in earnings of unconsolidated subsidiaries | 7,044 | 2,476 | 7,705 | ||||||||
Loss on early retirement of debt | -2,277 | -18,747 | -6,064 | ||||||||
Interest expense | -85,446 | -87,364 | -94,950 | ||||||||
Income before income taxes | 203,797 | 197,801 | 243,550 | ||||||||
Income tax expense (benefit) | 75,622 | 74,792 | 89,657 | ||||||||
Net income | 128,175 | 123,009 | 153,893 | ||||||||
Less: Net income attributable to non-controlling interests | 7,548 | 8,619 | 5,663 | ||||||||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 25,712 | 26,530 | 35,341 | 33,044 | 28,920 | 23,272 | 27,780 | 34,418 | 120,627 | 114,390 | 148,230 |
Select | |||||||||||
Consolidating Statement of Operations | |||||||||||
Net operating revenues | 771,608 | 758,069 | 772,762 | 762,578 | 746,175 | 722,845 | 756,673 | 749,955 | 3,065,017 | 2,975,648 | 2,948,969 |
Costs and expenses: | |||||||||||
Cost of services | 2,582,340 | 2,495,476 | 2,443,550 | ||||||||
General and administrative | 85,247 | 76,921 | 66,194 | ||||||||
Bad debt expense | 44,600 | 37,423 | 39,055 | ||||||||
Depreciation and amortization | 68,354 | 64,392 | 63,311 | ||||||||
Total costs and expenses | 2,780,541 | 2,674,212 | 2,612,110 | ||||||||
Income from operations | 57,822 | 66,017 | 82,193 | 78,444 | 68,244 | 62,399 | 88,263 | 82,530 | 284,476 | 301,436 | 336,859 |
Other income and expense: | |||||||||||
Equity in earnings of unconsolidated subsidiaries | 7,044 | 2,476 | 7,705 | ||||||||
Loss on early retirement of debt | -2,277 | -17,788 | -6,064 | ||||||||
Interest expense | -85,446 | -84,954 | -83,759 | ||||||||
Income before income taxes | 203,797 | 201,170 | 254,741 | ||||||||
Income tax expense (benefit) | 75,622 | 75,971 | 93,574 | ||||||||
Net income | 128,175 | 125,199 | 161,167 | ||||||||
Less: Net income attributable to non-controlling interests | 7,548 | 8,619 | 5,663 | ||||||||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 25,712 | 26,530 | 35,341 | 33,044 | 28,920 | 23,272 | 27,780 | 36,608 | 120,627 | 116,580 | 155,504 |
Select | Reportable legal entities | Select Medical Corporation (Parent Company Only) | |||||||||||
Consolidating Statement of Operations | |||||||||||
Net operating revenues | 721 | 350 | 123 | ||||||||
Costs and expenses: | |||||||||||
Cost of services | 2,015 | 1,757 | 2,139 | ||||||||
General and administrative | 86,311 | 76,709 | 67,402 | ||||||||
Depreciation and amortization | 3,723 | 3,746 | 3,267 | ||||||||
Total costs and expenses | 92,049 | 82,212 | 72,808 | ||||||||
Income from operations | -91,328 | -81,862 | -72,685 | ||||||||
Other income and expense: | |||||||||||
Intercompany interest and royalty fees | -1,142 | -1,326 | -2,532 | ||||||||
Intercompany management fees | 142,273 | 144,447 | 120,276 | ||||||||
Loss on early retirement of debt | -2,277 | -17,788 | -6,064 | ||||||||
Interest expense | -57,651 | -58,100 | -54,167 | ||||||||
Income before income taxes | -10,125 | -14,629 | -15,172 | ||||||||
Income tax expense (benefit) | -4,333 | -1,238 | -8,206 | ||||||||
Equity in earnings of subsidiaries | 126,419 | 129,971 | 162,470 | ||||||||
Net income | 120,627 | 116,580 | 155,504 | ||||||||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 120,627 | 116,580 | 155,504 | ||||||||
Select | Reportable legal entities | Subsidiary Guarantors | |||||||||||
Consolidating Statement of Operations | |||||||||||
Net operating revenues | 2,634,480 | 2,576,906 | 2,572,301 | ||||||||
Costs and expenses: | |||||||||||
Cost of services | 2,209,724 | 2,155,370 | 2,118,614 | ||||||||
General and administrative | -1,064 | 212 | -1,208 | ||||||||
Bad debt expense | 38,052 | 31,173 | 33,851 | ||||||||
Depreciation and amortization | 54,876 | 51,825 | 51,436 | ||||||||
Total costs and expenses | 2,301,588 | 2,238,580 | 2,202,693 | ||||||||
Income from operations | 332,892 | 338,326 | 369,608 | ||||||||
Other income and expense: | |||||||||||
Intercompany interest and royalty fees | 1,131 | 836 | 2,502 | ||||||||
Intercompany management fees | -120,528 | -125,357 | -102,599 | ||||||||
Equity in earnings of unconsolidated subsidiaries | 6,958 | 2,384 | 7,637 | ||||||||
Interest expense | -23,367 | -22,916 | -25,488 | ||||||||
Income before income taxes | 197,086 | 193,273 | 251,660 | ||||||||
Income tax expense (benefit) | 78,748 | 76,837 | 101,867 | ||||||||
Equity in earnings of subsidiaries | 8,995 | 14,561 | 14,409 | ||||||||
Net income | 127,333 | 130,997 | 164,202 | ||||||||
Less: Net income attributable to non-controlling interests | 623 | 995 | 630 | ||||||||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 126,710 | 130,002 | 163,572 | ||||||||
Select | Reportable legal entities | Non-Guarantor Subsidiaries | |||||||||||
Consolidating Statement of Operations | |||||||||||
Net operating revenues | 429,816 | 398,392 | 376,545 | ||||||||
Costs and expenses: | |||||||||||
Cost of services | 370,601 | 338,349 | 322,797 | ||||||||
Bad debt expense | 6,548 | 6,250 | 5,204 | ||||||||
Depreciation and amortization | 9,755 | 8,821 | 8,608 | ||||||||
Total costs and expenses | 386,904 | 353,420 | 336,609 | ||||||||
Income from operations | 42,912 | 44,972 | 39,936 | ||||||||
Other income and expense: | |||||||||||
Intercompany interest and royalty fees | 11 | 490 | 30 | ||||||||
Intercompany management fees | -21,745 | -19,090 | -17,677 | ||||||||
Equity in earnings of unconsolidated subsidiaries | 86 | 92 | 68 | ||||||||
Interest expense | -4,428 | -3,938 | -4,104 | ||||||||
Income before income taxes | 16,836 | 22,526 | 18,253 | ||||||||
Income tax expense (benefit) | 1,207 | 372 | -87 | ||||||||
Net income | 15,629 | 22,154 | 18,340 | ||||||||
Less: Net income attributable to non-controlling interests | 6,925 | 7,624 | 5,033 | ||||||||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 8,704 | 14,530 | 13,307 | ||||||||
Select | Eliminations | |||||||||||
Other income and expense: | |||||||||||
Equity in earnings of subsidiaries | -135,414 | -144,532 | -176,879 | ||||||||
Net income | -135,414 | -144,532 | -176,879 | ||||||||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | ($135,414) | ($144,532) | ($176,879) |
Financial_Information_for_Subs5
Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select's 6.375% Senior Notes (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities | |||
Net income | $128,175 | $123,009 | $153,893 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Distributions from unconsolidated subsidiaries | 11,954 | ||
Depreciation and amortization | 68,354 | 64,392 | 63,311 |
Provision for bad debts | 44,600 | 37,423 | 39,055 |
Equity in earnings of unconsolidated subsidiaries | -7,044 | -2,476 | -7,705 |
Loss on early retirement of debt | 2,277 | 18,747 | 6,064 |
Loss (gain) from sale of assets and businesses | -1,048 | -581 | -5,906 |
Non-cash stock compensation expense | 11,186 | 7,033 | 5,677 |
Amortization of debt discount, premium and issuance costs | 7,553 | 8,433 | 7,566 |
Deferred income taxes | 14,311 | 7,032 | 7,909 |
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | |||
Accounts receivable | -97,802 | -67,145 | 15,158 |
Other current assets | -1,729 | -8,167 | -1,607 |
Other assets | -103 | -3,484 | 5,862 |
Accounts payable | 5,997 | -1,283 | -6,117 |
Accrued expenses | -16,039 | 9,590 | 15,522 |
Net cash provided by operating activities | 170,642 | 192,523 | 298,682 |
Investing activities | |||
Purchases of property and equipment | -95,246 | -73,660 | -68,185 |
Investment in business | -4,634 | -34,893 | -14,689 |
Acquisition of businesses, net of cash acquired | -1,211 | -1,665 | -6,043 |
Proceeds from sale of assets | 2,912 | 16,511 | |
Net cash used in investing activities | -101,091 | -107,306 | -72,406 |
Financing activities | |||
Borrowings on revolving credit facility | 910,000 | 690,000 | 495,000 |
Payments on revolving credit facility | -870,000 | -800,000 | -405,000 |
Borrowings on credit facility term loans, net of discount | 298,500 | 266,750 | |
Payments on credit facility term loans | -33,994 | -596,720 | -9,875 |
Repurchase of 7 5/8% senior subordinated notes, net of premiums | -70,000 | -278,495 | |
Borrowings of other debt | 9,076 | 15,310 | 8,281 |
Principal payments on other debt | -14,673 | -10,834 | -10,295 |
Debt issuance costs | -4,434 | -18,914 | -6,527 |
Proceeds from (repayment of) bank overdrafts | 9,240 | -5,330 | 1,227 |
Purchase of non-controlling interests | -9,961 | ||
Dividends paid to Holdings | -53,366 | -41,961 | -210,888 |
Tax benefit from stock based awards | 3,119 | ||
Proceeds from issuance of non-controlling interests | 185 | ||
Distributions to non-controlling interests | -3,979 | -3,537 | -3,268 |
Net cash used in financing activities | -70,516 | -121,042 | -198,175 |
Net increase (decrease) in cash and cash equivalents | -965 | -35,825 | 28,101 |
Cash and cash equivalents at beginning of period | 4,319 | 40,144 | 12,043 |
Cash and cash equivalents at end of period | 3,354 | 4,319 | 40,144 |
Select | |||
Operating activities | |||
Net income | 128,175 | 125,199 | 161,167 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Distributions from unconsolidated subsidiaries | 11,954 | ||
Depreciation and amortization | 68,354 | 64,392 | 63,311 |
Provision for bad debts | 44,600 | 37,423 | 39,055 |
Equity in earnings of unconsolidated subsidiaries | -7,044 | -2,476 | -7,705 |
Loss on early retirement of debt | 2,277 | 17,788 | 6,064 |
Loss (gain) from sale of assets and businesses | -1,048 | -581 | -5,906 |
Non-cash stock compensation expense | 11,186 | 7,033 | 5,677 |
Amortization of debt discount, premium and issuance costs | 7,553 | 8,344 | 7,190 |
Deferred income taxes | 14,311 | 7,032 | 7,909 |
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | |||
Accounts receivable | -97,802 | -67,145 | 15,158 |
Other current assets | -1,729 | -8,167 | -1,607 |
Other assets | -103 | -3,484 | 5,877 |
Accounts payable | 5,997 | -1,283 | -6,117 |
Accrued expenses | -16,039 | 14,027 | 19,298 |
Net cash provided by operating activities | 170,642 | 198,102 | 309,371 |
Investing activities | |||
Purchases of property and equipment | -95,246 | -73,660 | -68,185 |
Investment in business | -4,634 | -34,893 | -14,689 |
Acquisition of businesses, net of cash acquired | -1,211 | -1,665 | -6,043 |
Proceeds from sale of assets | 2,912 | 16,511 | |
Net cash used in investing activities | -101,091 | -107,306 | -72,406 |
Financing activities | |||
Borrowings on revolving credit facility | 910,000 | 690,000 | 495,000 |
Payments on revolving credit facility | -870,000 | -800,000 | -405,000 |
Borrowings on credit facility term loans, net of discount | 298,500 | 266,750 | |
Payments on credit facility term loans | -33,994 | -596,720 | -9,875 |
Issuance of 6.375% senior notes, includes premium | 111,650 | 600,000 | |
Repurchase of 7 5/8% senior subordinated notes, net of premiums | -70,000 | -278,495 | |
Borrowings of other debt | 9,076 | 15,310 | 8,281 |
Principal payments on other debt | -14,673 | -10,834 | -10,295 |
Debt issuance costs | -4,434 | -18,914 | -6,527 |
Proceeds from (repayment of) bank overdrafts | 9,240 | -5,330 | 1,227 |
Purchase of non-controlling interests | -9,961 | ||
Equity investment by Holdings | 7,355 | 1,525 | 1,817 |
Dividends paid to Holdings | -184,100 | -226,621 | -268,479 |
Tax benefit from stock based awards | 3,119 | ||
Proceeds from issuance of non-controlling interests | 185 | ||
Distributions to non-controlling interests | -3,979 | -3,537 | -3,268 |
Net cash used in financing activities | -70,516 | -126,621 | -208,864 |
Net increase (decrease) in cash and cash equivalents | -965 | -35,825 | 28,101 |
Cash and cash equivalents at beginning of period | 4,319 | 40,144 | 12,043 |
Cash and cash equivalents at end of period | 3,354 | 4,319 | 40,144 |
Select | Reportable legal entities | Select Medical Corporation (Parent Company Only) | |||
Operating activities | |||
Net income | 120,627 | 116,580 | 155,504 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 3,723 | 3,746 | 3,267 |
Loss on early retirement of debt | 2,277 | 17,788 | 6,064 |
Non-cash stock compensation expense | 11,186 | 7,033 | 5,677 |
Amortization of debt discount, premium and issuance costs | 7,553 | 8,344 | 7,190 |
Deferred income taxes | 14,311 | 7,032 | 7,909 |
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | |||
Equity in earnings of subsidiaries | -126,419 | -129,971 | -162,470 |
Other current assets | 1,885 | -4,145 | 740 |
Other assets | 2,811 | -6,594 | 2,448 |
Accounts payable | 3,136 | 2,075 | -2,679 |
Accrued expenses | -6,353 | -4,929 | 25,350 |
Net cash provided by operating activities | 34,737 | 16,959 | 49,000 |
Investing activities | |||
Purchases of property and equipment | -4,674 | -3,024 | -5,150 |
Net cash used in investing activities | -4,674 | -3,024 | -5,150 |
Financing activities | |||
Borrowings on revolving credit facility | 910,000 | 690,000 | 495,000 |
Payments on revolving credit facility | -870,000 | -800,000 | -405,000 |
Borrowings on credit facility term loans, net of discount | 298,500 | 266,750 | |
Payments on credit facility term loans | -33,994 | -596,720 | -9,875 |
Issuance of 6.375% senior notes, includes premium | 111,650 | 600,000 | |
Repurchase of 7 5/8% senior subordinated notes, net of premiums | -70,000 | -278,495 | |
Borrowings of other debt | 8,151 | 8,923 | 8,003 |
Principal payments on other debt | -9,213 | -7,752 | -8,049 |
Debt issuance costs | -4,434 | -18,914 | -6,527 |
Proceeds from (repayment of) bank overdrafts | 9,240 | -5,330 | 1,227 |
Equity investment by Holdings | 7,355 | 1,525 | 1,817 |
Dividends paid to Holdings | -184,100 | -226,621 | -268,479 |
Intercompany | 22,162 | 77,455 | 183,421 |
Tax benefit from stock based awards | 3,119 | ||
Net cash used in financing activities | -30,064 | -48,934 | -20,207 |
Net increase (decrease) in cash and cash equivalents | -1 | -34,999 | 23,643 |
Cash and cash equivalents at beginning of period | 71 | 35,070 | 11,427 |
Cash and cash equivalents at end of period | 70 | 71 | 35,070 |
Select | Reportable legal entities | Subsidiary Guarantors | |||
Operating activities | |||
Net income | 127,333 | 130,997 | 164,202 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Distributions from unconsolidated subsidiaries | 11,889 | ||
Depreciation and amortization | 54,876 | 51,825 | 51,436 |
Provision for bad debts | 38,052 | 31,173 | 33,851 |
Equity in earnings of unconsolidated subsidiaries | -6,958 | -2,384 | -7,637 |
Loss (gain) from sale of assets and businesses | -1,168 | -463 | -6,002 |
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | |||
Equity in earnings of subsidiaries | -8,995 | -14,561 | -14,409 |
Accounts receivable | -80,394 | -60,460 | 29,102 |
Other current assets | -4,004 | -5,849 | 9 |
Other assets | -2,566 | 3,026 | 3,268 |
Accounts payable | 2,440 | -3,746 | -4,189 |
Accrued expenses | -9,407 | 23,910 | -19,861 |
Net cash provided by operating activities | 121,098 | 153,468 | 229,770 |
Investing activities | |||
Purchases of property and equipment | -79,600 | -60,532 | -49,160 |
Investment in business | -4,634 | -34,893 | -14,689 |
Acquisition of businesses, net of cash acquired | -397 | -1,665 | -6,043 |
Proceeds from sale of assets | 2,456 | 16,511 | |
Net cash used in investing activities | -84,631 | -94,634 | -53,381 |
Financing activities | |||
Borrowings of other debt | 5,303 | ||
Principal payments on other debt | -2,058 | -873 | -433 |
Purchase of non-controlling interests | -9,961 | ||
Intercompany | -25,092 | -63,900 | -172,222 |
Net cash used in financing activities | -37,111 | -59,470 | -172,655 |
Net increase (decrease) in cash and cash equivalents | -644 | -636 | 3,734 |
Cash and cash equivalents at beginning of period | 3,098 | 3,734 | |
Cash and cash equivalents at end of period | 2,454 | 3,098 | 3,734 |
Select | Reportable legal entities | Non-Guarantor Subsidiaries | |||
Operating activities | |||
Net income | 15,629 | 22,154 | 18,340 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Distributions from unconsolidated subsidiaries | 65 | ||
Depreciation and amortization | 9,755 | 8,821 | 8,608 |
Provision for bad debts | 6,548 | 6,250 | 5,204 |
Equity in earnings of unconsolidated subsidiaries | -86 | -92 | -68 |
Loss (gain) from sale of assets and businesses | 120 | -118 | 96 |
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | |||
Accounts receivable | -17,408 | -6,685 | -13,944 |
Other current assets | 390 | 1,827 | -2,356 |
Other assets | -348 | 84 | 161 |
Accounts payable | 421 | 388 | 751 |
Accrued expenses | -279 | -4,954 | 13,809 |
Net cash provided by operating activities | 14,807 | 27,675 | 30,601 |
Investing activities | |||
Purchases of property and equipment | -10,972 | -10,104 | -13,875 |
Acquisition of businesses, net of cash acquired | -814 | ||
Proceeds from sale of assets | 456 | ||
Net cash used in investing activities | -11,786 | -9,648 | -13,875 |
Financing activities | |||
Borrowings of other debt | 925 | 1,084 | 278 |
Principal payments on other debt | -3,402 | -2,209 | -1,813 |
Intercompany | 2,930 | -13,555 | -11,199 |
Proceeds from issuance of non-controlling interests | 185 | ||
Distributions to non-controlling interests | -3,979 | -3,537 | -3,268 |
Net cash used in financing activities | -3,341 | -18,217 | -16,002 |
Net increase (decrease) in cash and cash equivalents | -320 | -190 | 724 |
Cash and cash equivalents at beginning of period | 1,150 | 1,340 | 616 |
Cash and cash equivalents at end of period | 830 | 1,150 | 1,340 |
Select | Eliminations | |||
Operating activities | |||
Net income | -135,414 | -144,532 | -176,879 |
Changes in operating assets and liabilities, net of effects from acquisition of businesses: | |||
Equity in earnings of subsidiaries | $135,414 | $144,532 | $176,879 |
Selected_Quarterly_Financial_D2
Selected Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Selected quarterly financial data (unaudited) | |||||||||||
Net operating revenues | $771,608 | $758,069 | $772,762 | $762,578 | $746,175 | $722,845 | $756,673 | $749,955 | $3,065,017 | $2,975,648 | $2,948,969 |
Income (loss) from operations | 57,822 | 66,017 | 82,193 | 78,444 | 68,244 | 62,399 | 88,263 | 82,530 | 284,476 | 301,436 | 336,859 |
Net income attributable to Select Medical Holdings Corporation | 25,712 | 26,530 | 35,341 | 33,044 | 28,920 | 23,272 | 27,780 | 34,418 | 120,627 | 114,390 | 148,230 |
Income per common share: | |||||||||||
Basic | $0.20 | $0.20 | $0.27 | $0.24 | $0.21 | $0.17 | $0.20 | $0.25 | $0.91 | $0.82 | $1.05 |
Diluted | $0.20 | $0.20 | $0.27 | $0.24 | $0.21 | $0.17 | $0.20 | $0.24 | $0.91 | $0.82 | $1.05 |
Select | |||||||||||
Selected quarterly financial data (unaudited) | |||||||||||
Net operating revenues | 771,608 | 758,069 | 772,762 | 762,578 | 746,175 | 722,845 | 756,673 | 749,955 | 3,065,017 | 2,975,648 | 2,948,969 |
Income (loss) from operations | 57,822 | 66,017 | 82,193 | 78,444 | 68,244 | 62,399 | 88,263 | 82,530 | 284,476 | 301,436 | 336,859 |
Net income attributable to Select Medical Holdings Corporation | $25,712 | $26,530 | $35,341 | $33,044 | $28,920 | $23,272 | $27,780 | $36,608 | $120,627 | $116,580 | $155,504 |
Schedule_II_Valuation_and_Qual1
Schedule II - Valuation and Qualifying Accounts (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for Doubtful Accounts | |||
Changes in valuation and qualifying accounts | |||
Balance at Beginning of Year | $40,815 | $41,854 | $47,469 |
Charged to Cost and Expenses | 44,600 | 37,423 | 39,055 |
Deductions | -38,990 | -38,462 | -44,670 |
Balance at End of Year | 46,425 | 40,815 | 41,854 |
Income Tax Valuation Allowance | |||
Changes in valuation and qualifying accounts | |||
Balance at Beginning of Year | 10,547 | 13,341 | 15,733 |
Charged to Cost and Expenses | -906 | -2,794 | -2,392 |
Balance at End of Year | $9,641 | $10,547 | $13,341 |