Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-34465 | |
Entity Registrant Name | SELECT MEDICAL HOLDINGS CORP | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-1764048 | |
Entity Address, Address Line One | 4714 Gettysburg Road | |
Entity Address, Address Line Two | P.O. Box 2034 | |
Entity Address, City or Town | Mechanicsburg | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 17055 | |
City Area Code | 717 | |
Local Phone Number | 972-1100 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | SEM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 135,620,857 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001320414 | |
Select Medical Corporation | ||
Document Information [Line Items] | ||
Entity File Number | 001-31441 | |
Entity Registrant Name | SELECT MEDICAL CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 23-2872718 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 124,036 | $ 175,178 |
Accounts receivable | 791,769 | 706,676 |
Prepaid income taxes | 12,318 | 20,539 |
Other current assets | 99,942 | 90,131 |
Total Current Assets | 1,028,065 | 992,524 |
Operating lease right-of-use assets | 971,385 | |
Property and equipment, net | 1,008,555 | 979,810 |
Goodwill | 3,385,394 | 3,320,726 |
Identifiable intangible assets, net | 419,335 | 437,693 |
Other assets | 294,206 | 233,512 |
Total Assets | 7,106,940 | 5,964,265 |
Current Liabilities: | ||
Overdrafts | 27,259 | 25,083 |
Current operating lease liabilities | 202,484 | |
Current portion of long-term debt and notes payable | 9,012 | 43,865 |
Accounts payable | 138,015 | 146,693 |
Accrued payroll | 147,397 | 172,386 |
Accrued vacation | 122,277 | 110,660 |
Accrued interest | 10,234 | 12,137 |
Accrued other | 184,247 | 190,691 |
Income taxes payable | 11,767 | 3,671 |
Total Current Liabilities | 852,692 | 705,186 |
Non-current operating lease liabilities | 813,903 | |
Long-term debt, net of current portion | 3,349,702 | 3,249,516 |
Non-current deferred tax liability | 147,716 | 153,895 |
Other non-current liabilities | 102,555 | 158,940 |
Total Liabilities | 5,266,568 | 4,267,537 |
Commitments and contingencies (Note 13) | ||
Redeemable non-controlling interests | 844,422 | 780,488 |
Stockholders’ Equity: | ||
Common stock | 135 | 135 |
Capital in excess of par | 492,569 | 482,556 |
Retained earnings (accumulated deficit) | 353,305 | 320,351 |
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 846,009 | 803,042 |
Non-controlling interests | 149,941 | 113,198 |
Total Equity | 995,950 | 916,240 |
Total Liabilities and Equity | 7,106,940 | 5,964,265 |
Select Medical Corporation | ||
Current Assets: | ||
Cash and cash equivalents | 124,036 | 175,178 |
Accounts receivable | 791,769 | 706,676 |
Prepaid income taxes | 12,318 | 20,539 |
Other current assets | 99,942 | 90,131 |
Total Current Assets | 1,028,065 | 992,524 |
Operating lease right-of-use assets | 971,385 | |
Property and equipment, net | 1,008,555 | 979,810 |
Goodwill | 3,385,394 | 3,320,726 |
Identifiable intangible assets, net | 419,335 | 437,693 |
Other assets | 294,206 | 233,512 |
Total Assets | 7,106,940 | 5,964,265 |
Current Liabilities: | ||
Overdrafts | 27,259 | 25,083 |
Current operating lease liabilities | 202,484 | |
Current portion of long-term debt and notes payable | 9,012 | 43,865 |
Accounts payable | 138,015 | 146,693 |
Accrued payroll | 147,397 | 172,386 |
Accrued vacation | 122,277 | 110,660 |
Accrued interest | 10,234 | 12,137 |
Accrued other | 184,247 | 190,691 |
Income taxes payable | 11,767 | 3,671 |
Total Current Liabilities | 852,692 | 705,186 |
Non-current operating lease liabilities | 813,903 | |
Long-term debt, net of current portion | 3,349,702 | 3,249,516 |
Non-current deferred tax liability | 147,716 | 153,895 |
Other non-current liabilities | 102,555 | 158,940 |
Total Liabilities | 5,266,568 | 4,267,537 |
Commitments and contingencies (Note 13) | ||
Redeemable non-controlling interests | 844,422 | 780,488 |
Stockholders’ Equity: | ||
Common stock | 0 | 0 |
Capital in excess of par | 988,333 | 970,156 |
Retained earnings (accumulated deficit) | (142,324) | (167,114) |
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 846,009 | 803,042 |
Non-controlling interests | 149,941 | 113,198 |
Total Equity | 995,950 | 916,240 |
Total Liabilities and Equity | $ 7,106,940 | $ 5,964,265 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, shares issued (in shares) | 134,563,999 | 135,265,864 |
Common stock, shares outstanding (in shares) | 134,563,999 | 135,265,864 |
Select Medical Corporation | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 100 | 100 |
Common stock, shares outstanding (in shares) | 100 | 100 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net operating revenues | $ 1,361,364 | $ 1,296,210 | $ 2,685,995 | $ 2,549,174 | ||
Costs and expenses: | ||||||
Cost of services, exclusive of depreciation and amortization | 1,150,150 | 1,094,731 | 2,282,242 | 2,160,544 | ||
General and administrative | 31,339 | 29,194 | 60,016 | 60,976 | ||
Depreciation and amortization | 54,993 | 51,724 | 107,131 | 98,495 | ||
Total costs and expenses | 1,236,482 | 1,175,649 | 2,449,389 | 2,320,015 | ||
Income from operations | 124,882 | 120,561 | 236,606 | 229,159 | ||
Other income and expense: | ||||||
Loss on early retirement of debt | 0 | (10,255) | ||||
Equity in earnings of unconsolidated subsidiaries | 7,394 | 4,785 | 11,760 | 9,482 | ||
Non-operating gain | 0 | 6,478 | 6,532 | 6,877 | ||
Interest expense | (51,464) | (50,159) | (102,275) | (97,322) | ||
Income (loss) before income taxes | 80,812 | 81,665 | 152,623 | 137,941 | ||
Income tax expense | 20,826 | 21,106 | 39,293 | 33,400 | ||
Net income | 59,986 | 60,559 | 113,330 | 104,541 | ||
Less: Net income attributable to non-controlling interests | 15,170 | 14,048 | 27,680 | 24,291 | ||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | $ 44,816 | $ 40,834 | $ 46,511 | $ 33,739 | $ 85,650 | $ 80,250 |
Earnings per common share (Note 12): | ||||||
Basic (in dollars per share) | $ 0.33 | $ 0.35 | $ 0.63 | $ 0.60 | ||
Diluted (in dollars per share) | $ 0.33 | $ 0.35 | $ 0.63 | $ 0.60 | ||
Select Medical Corporation | ||||||
Net operating revenues | $ 1,361,364 | $ 1,296,210 | $ 2,685,995 | $ 2,549,174 | ||
Costs and expenses: | ||||||
Cost of services, exclusive of depreciation and amortization | 1,150,150 | 1,094,731 | 2,282,242 | 2,160,544 | ||
General and administrative | 31,339 | 29,194 | 60,016 | 60,976 | ||
Depreciation and amortization | 54,993 | 51,724 | 107,131 | 98,495 | ||
Total costs and expenses | 1,236,482 | 1,175,649 | 2,449,389 | 2,320,015 | ||
Income from operations | 124,882 | 120,561 | 236,606 | 229,159 | ||
Other income and expense: | ||||||
Loss on early retirement of debt | 0 | (10,255) | ||||
Equity in earnings of unconsolidated subsidiaries | 7,394 | 4,785 | 11,760 | 9,482 | ||
Non-operating gain | 0 | 6,478 | 6,532 | 6,877 | ||
Interest expense | (51,464) | (50,159) | (102,275) | (97,322) | ||
Income (loss) before income taxes | 80,812 | 81,665 | 152,623 | 137,941 | ||
Income tax expense | 20,826 | 21,106 | 39,293 | 33,400 | ||
Net income | 59,986 | 60,559 | 113,330 | 104,541 | ||
Less: Net income attributable to non-controlling interests | 15,170 | 14,048 | 27,680 | 24,291 | ||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | $ 44,816 | $ 40,834 | $ 46,511 | $ 33,739 | $ 85,650 | $ 80,250 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Equity and Income (unaudited) - USD ($) $ in Thousands | Total | Select Medical Corporation | Common Stock | Common StockSelect Medical Corporation | Capital in Excess of Par | Capital in Excess of ParSelect Medical Corporation | Retained Earnings (Accumulated Deficit) | Retained Earnings (Accumulated Deficit)Select Medical Corporation | Total Stockholders’ Equity | Total Stockholders’ EquitySelect Medical Corporation | Non-controlling Interests | Non-controlling InterestsSelect Medical Corporation |
Balance (in shares) at Dec. 31, 2017 | 134,115,000 | 0 | ||||||||||
Balance at Dec. 31, 2017 | $ 932,604 | $ 932,604 | $ 134 | $ 0 | $ 463,499 | $ 947,370 | $ 359,735 | $ (124,002) | $ 823,368 | $ 823,368 | $ 109,236 | $ 109,236 |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | 33,739 | 33,739 | 33,739 | 33,739 | 33,739 | 33,739 | ||||||
Net income attributable to non-controlling interests | 4,500 | 4,500 | 4,500 | 4,500 | ||||||||
Issuance of restricted stock (in shares) | 4,000 | |||||||||||
Issuance of restricted stock | 0 | $ 0 | 0 | |||||||||
Forfeitures of unvested restricted stock (in shares) | (88,000) | |||||||||||
Forfeitures of unvested restricted stock | 0 | $ 0 | 0 | |||||||||
Vesting of restricted stock | 4,717 | 4,717 | 4,717 | |||||||||
Repurchase of common shares (in shares) | (7,000) | |||||||||||
Repurchase of common shares | (122) | $ 0 | (69) | (53) | (122) | |||||||
Exercise of stock options (in shares) | 80,000 | |||||||||||
Exercise of stock options | 738 | $ 0 | 738 | 738 | ||||||||
Additional investment by Holdings | 738 | 738 | 738 | |||||||||
Dividends declared and paid to Holdings | (122) | (122) | (122) | |||||||||
Contribution related to restricted stock award issuances by Holdings | 4,717 | 4,717 | 4,717 | |||||||||
Issuance and exchange of non-controlling interests | 74,341 | 74,341 | 74,341 | 74,341 | 74,341 | 74,341 | ||||||
Distributions to and purchases of non-controlling interests | (84,327) | (84,327) | (83,233) | (83,233) | (83,233) | (83,233) | (1,094) | (1,094) | ||||
Redemption adjustment on non-controlling interests | (1,051) | (1,051) | (1,051) | (1,051) | (1,051) | (1,051) | ||||||
Other | 138 | 138 | 103 | 103 | 103 | 103 | 35 | 35 | ||||
Balance (in shares) at Mar. 31, 2018 | 134,104,000 | 0 | ||||||||||
Balance at Mar. 31, 2018 | 965,277 | 965,277 | $ 134 | $ 0 | 468,885 | 952,825 | 383,581 | (100,225) | 852,600 | 852,600 | 112,677 | 112,677 |
Balance (in shares) at Dec. 31, 2017 | 134,115,000 | 0 | ||||||||||
Balance at Dec. 31, 2017 | 932,604 | 932,604 | $ 134 | $ 0 | 463,499 | 947,370 | 359,735 | (124,002) | 823,368 | 823,368 | 109,236 | 109,236 |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | 80,250 | 80,250 | ||||||||||
Balance (in shares) at Jun. 30, 2018 | 134,327,000 | 0 | ||||||||||
Balance at Jun. 30, 2018 | 1,011,927 | 1,011,927 | $ 134 | $ 0 | 474,812 | 959,173 | 420,525 | (63,702) | 895,471 | 895,471 | 116,456 | 116,456 |
Balance (in shares) at Mar. 31, 2018 | 134,104,000 | 0 | ||||||||||
Balance at Mar. 31, 2018 | 965,277 | 965,277 | $ 134 | $ 0 | 468,885 | 952,825 | 383,581 | (100,225) | 852,600 | 852,600 | 112,677 | 112,677 |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | 46,511 | 46,511 | 46,511 | 46,511 | 46,511 | 46,511 | ||||||
Net income attributable to non-controlling interests | 3,139 | 3,139 | 3,139 | 3,139 | ||||||||
Issuance of restricted stock (in shares) | 170,000 | |||||||||||
Issuance of restricted stock | 0 | $ 0 | 0 | |||||||||
Vesting of restricted stock | 4,845 | 4,845 | 4,845 | |||||||||
Repurchase of common shares (in shares) | (42,000) | |||||||||||
Repurchase of common shares | (767) | $ 0 | (421) | (346) | (767) | |||||||
Exercise of stock options (in shares) | 95,000 | |||||||||||
Exercise of stock options | 882 | $ 0 | 882 | 882 | ||||||||
Issuance of non-controlling interests | 3,474 | 3,474 | 1,553 | 1,553 | 1,553 | 1,553 | 1,921 | 1,921 | ||||
Additional investment by Holdings | 882 | 882 | 882 | |||||||||
Dividends declared and paid to Holdings | (767) | (767) | (767) | |||||||||
Contribution related to restricted stock award issuances by Holdings | 4,845 | 4,845 | 4,845 | |||||||||
Distributions to and purchases of non-controlling interests | (3,274) | (3,274) | (932) | (932) | (384) | (384) | (1,316) | (1,316) | (1,958) | (1,958) | ||
Redemption adjustment on non-controlling interests | (8,500) | (8,500) | (8,500) | (8,500) | (8,500) | (8,500) | ||||||
Other | 340 | 340 | (337) | (337) | (337) | (337) | 677 | 677 | ||||
Balance (in shares) at Jun. 30, 2018 | 134,327,000 | 0 | ||||||||||
Balance at Jun. 30, 2018 | $ 1,011,927 | $ 1,011,927 | $ 134 | $ 0 | 474,812 | 959,173 | 420,525 | (63,702) | 895,471 | 895,471 | 116,456 | 116,456 |
Balance (in shares) at Dec. 31, 2018 | 135,265,864 | 100 | 135,266,000 | 0 | ||||||||
Balance at Dec. 31, 2018 | $ 916,240 | $ 916,240 | $ 135 | $ 0 | 482,556 | 970,156 | 320,351 | (167,114) | 803,042 | 803,042 | 113,198 | 113,198 |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | 40,834 | 40,834 | 40,834 | 40,834 | 40,834 | 40,834 | ||||||
Net income attributable to non-controlling interests | 4,810 | 4,810 | 4,810 | 4,810 | ||||||||
Issuance of restricted stock (in shares) | 21,000 | |||||||||||
Issuance of restricted stock | 0 | $ 0 | 0 | |||||||||
Forfeitures of unvested restricted stock (in shares) | (24,000) | |||||||||||
Forfeitures of unvested restricted stock | 0 | $ 0 | 0 | |||||||||
Vesting of restricted stock | 5,488 | 5,488 | 5,488 | |||||||||
Issuance of non-controlling interests | 6,837 | 6,837 | 6,837 | 6,837 | ||||||||
Contribution related to restricted stock award issuances by Holdings | 5,488 | 5,488 | 5,488 | |||||||||
Distributions to and purchases of non-controlling interests | (2,480) | (2,480) | 259 | 259 | 259 | 259 | (2,739) | (2,739) | ||||
Redemption adjustment on non-controlling interests | (47,470) | (47,470) | (47,470) | (47,470) | (47,470) | (47,470) | ||||||
Other | 291 | 291 | (122) | (122) | (122) | (122) | 413 | 413 | ||||
Balance (in shares) at Mar. 31, 2019 | 135,263,000 | 0 | ||||||||||
Balance at Mar. 31, 2019 | $ 924,550 | $ 924,550 | $ 135 | $ 0 | 488,303 | 975,903 | 313,593 | (173,872) | 802,031 | 802,031 | 122,519 | 122,519 |
Balance (in shares) at Dec. 31, 2018 | 135,265,864 | 100 | 135,266,000 | 0 | ||||||||
Balance at Dec. 31, 2018 | $ 916,240 | $ 916,240 | $ 135 | $ 0 | 482,556 | 970,156 | 320,351 | (167,114) | 803,042 | 803,042 | 113,198 | 113,198 |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | $ 85,650 | $ 85,650 | ||||||||||
Balance (in shares) at Jun. 30, 2019 | 134,563,999 | 100 | 134,564,000 | 0 | ||||||||
Balance at Jun. 30, 2019 | $ 995,950 | $ 995,950 | $ 135 | $ 0 | 492,569 | 988,333 | 353,305 | (142,324) | 846,009 | 846,009 | 149,941 | 149,941 |
Balance (in shares) at Mar. 31, 2019 | 135,263,000 | 0 | ||||||||||
Balance at Mar. 31, 2019 | 924,550 | 924,550 | $ 135 | $ 0 | 488,303 | 975,903 | 313,593 | (173,872) | 802,031 | 802,031 | 122,519 | 122,519 |
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Net income | 44,816 | 44,816 | 44,816 | 44,816 | 44,816 | 44,816 | ||||||
Net income attributable to non-controlling interests | 3,663 | 3,663 | 0 | 0 | 3,663 | 3,663 | ||||||
Issuance of restricted stock (in shares) | 187,000 | |||||||||||
Issuance of restricted stock | 0 | $ 0 | 0 | 0 | ||||||||
Vesting of restricted stock | 5,591 | 5,591 | 5,591 | |||||||||
Repurchase of common shares (in shares) | (936,000) | |||||||||||
Repurchase of common shares | (13,620) | $ 0 | (8,164) | (5,456) | (13,620) | |||||||
Exercise of stock options (in shares) | 50,000 | |||||||||||
Exercise of stock options | 459 | $ 0 | 459 | 459 | ||||||||
Issuance of non-controlling interests | 31,127 | 31,127 | 6,366 | 6,366 | 6,366 | 6,366 | 24,761 | 24,761 | ||||
Additional investment by Holdings | 459 | 459 | 459 | |||||||||
Dividends declared and paid to Holdings | (13,620) | (13,620) | (13,620) | |||||||||
Contribution related to restricted stock award issuances by Holdings | 5,591 | 5,591 | 5,591 | |||||||||
Distributions to and purchases of non-controlling interests | (1,416) | (1,416) | 14 | 14 | 14 | 14 | (1,430) | (1,430) | ||||
Redemption adjustment on non-controlling interests | 270 | 270 | 270 | 270 | 270 | 270 | ||||||
Other | $ 510 | $ 510 | 82 | 82 | 82 | 82 | 428 | 428 | ||||
Balance (in shares) at Jun. 30, 2019 | 134,563,999 | 100 | 134,564,000 | 0 | ||||||||
Balance at Jun. 30, 2019 | $ 995,950 | $ 995,950 | $ 135 | $ 0 | $ 492,569 | $ 988,333 | $ 353,305 | $ (142,324) | $ 846,009 | $ 846,009 | $ 149,941 | $ 149,941 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities | ||
Net income | $ 113,330 | $ 104,541 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 11,148 | 7,830 |
Depreciation and amortization | 107,131 | 98,495 |
Provision for bad debts | 1,958 | 102 |
Equity in earnings of unconsolidated subsidiaries | (11,760) | (9,482) |
Loss on extinguishment of debt | 0 | 484 |
Gain on sale of assets and businesses | (6,354) | (6,980) |
Stock compensation expense | 12,613 | 10,911 |
Amortization of debt discount, premium and issuance costs | 6,326 | 6,486 |
Deferred income taxes | (6,290) | (1,691) |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | (85,873) | (5,774) |
Other current assets | (9,236) | (3,011) |
Other assets | (939) | 6,684 |
Accounts payable | 2,670 | (5,462) |
Accrued expenses | (18,156) | 1,207 |
Income taxes | 16,346 | 12,610 |
Net cash provided by operating activities | 132,914 | 216,950 |
Investing activities | ||
Business combinations, net of cash acquired | (86,062) | (517,704) |
Purchases of property and equipment | (89,285) | (81,648) |
Investment in businesses | (52,257) | (3,291) |
Proceeds from sale of assets and businesses | 125 | 6,672 |
Net cash used in investing activities | (227,479) | (595,971) |
Financing activities | ||
Borrowings on revolving facilities | 635,000 | 265,000 |
Payments on revolving facilities | (460,000) | (345,000) |
Proceeds from term loans | 0 | 779,904 |
Payments on term loans | (132,685) | (5,750) |
Revolving facility debt issuance costs | 0 | (1,333) |
Borrowings of other debt | 14,230 | 19,928 |
Principal payments on other debt | (12,680) | (11,521) |
Repurchase of common stock | (13,620) | (889) |
Dividends paid to Holdings | 0 | 0 |
Proceeds from exercise of stock options | 459 | 1,620 |
Equity investment by Holdings | 0 | 0 |
Increase (decrease) in overdrafts | 2,176 | (6,171) |
Proceeds from issuance of non-controlling interests | 18,288 | 2,926 |
Distributions to and purchases of non-controlling interests | (7,745) | (301,213) |
Net cash provided by (used in) financing activities | 43,423 | 397,501 |
Net increase (decrease) in cash and cash equivalents | (51,142) | 18,480 |
Cash and cash equivalents at beginning of period | 175,178 | 122,549 |
Cash and cash equivalents at end of period | 124,036 | 141,029 |
Supplemental Information | ||
Cash paid for interest | 97,909 | 97,338 |
Cash paid for taxes | 29,241 | 22,480 |
Non-cash equity exchange for acquisition of U.S. HealthWorks | 0 | 238,000 |
Select Medical Corporation | ||
Operating activities | ||
Net income | 113,330 | 104,541 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 11,148 | 7,830 |
Depreciation and amortization | 107,131 | 98,495 |
Provision for bad debts | 1,958 | 102 |
Equity in earnings of unconsolidated subsidiaries | (11,760) | (9,482) |
Loss on extinguishment of debt | 0 | 484 |
Gain on sale of assets and businesses | (6,354) | (6,980) |
Stock compensation expense | 12,613 | 10,911 |
Amortization of debt discount, premium and issuance costs | 6,326 | 6,486 |
Deferred income taxes | (6,290) | (1,691) |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | (85,873) | (5,774) |
Other current assets | (9,236) | (3,011) |
Other assets | (939) | 6,684 |
Accounts payable | 2,670 | (5,462) |
Accrued expenses | (18,156) | 1,207 |
Income taxes | 16,346 | 12,610 |
Net cash provided by operating activities | 132,914 | 216,950 |
Investing activities | ||
Business combinations, net of cash acquired | (86,062) | (517,704) |
Purchases of property and equipment | (89,285) | (81,648) |
Investment in businesses | (52,257) | (3,291) |
Proceeds from sale of assets and businesses | 125 | 6,672 |
Net cash used in investing activities | (227,479) | (595,971) |
Financing activities | ||
Borrowings on revolving facilities | 635,000 | 265,000 |
Payments on revolving facilities | (460,000) | (345,000) |
Proceeds from term loans | 0 | 779,904 |
Payments on term loans | (132,685) | (5,750) |
Revolving facility debt issuance costs | 0 | (1,333) |
Borrowings of other debt | 14,230 | 19,928 |
Principal payments on other debt | (12,680) | (11,521) |
Repurchase of common stock | 0 | 0 |
Dividends paid to Holdings | (13,620) | (889) |
Proceeds from exercise of stock options | 0 | 0 |
Equity investment by Holdings | 459 | 1,620 |
Increase (decrease) in overdrafts | 2,176 | (6,171) |
Proceeds from issuance of non-controlling interests | 18,288 | 2,926 |
Distributions to and purchases of non-controlling interests | (7,745) | (301,213) |
Net cash provided by (used in) financing activities | 43,423 | 397,501 |
Net increase (decrease) in cash and cash equivalents | (51,142) | 18,480 |
Cash and cash equivalents at beginning of period | 175,178 | 122,549 |
Cash and cash equivalents at end of period | 124,036 | 141,029 |
Supplemental Information | ||
Cash paid for interest | 97,909 | 97,338 |
Cash paid for taxes | 29,241 | 22,480 |
Non-cash equity exchange for acquisition of U.S. HealthWorks | $ 0 | $ 238,000 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements of Select Medical Holdings Corporation (“Holdings”) include the accounts of its wholly owned subsidiary, Select Medical Corporation (“Select”). Holdings conducts substantially all of its business through Select and its subsidiaries. Holdings and Select and its subsidiaries are collectively referred to as the “Company.” The unaudited condensed consolidated financial statements of the Company as of June 30, 2019 , and for the three and six month periods ended June 30, 2018 and 2019 , have been prepared pursuant to the rules and regulations of the Securities Exchange Commission (the “SEC”) for interim reporting and accounting principles generally accepted in the United States of America (“GAAP”). Accordingly, certain information and disclosures required by GAAP, which are normally included in the notes to consolidated financial statements, have been condensed or omitted pursuant to those rules and regulations, although the Company believes the disclosure is adequate to make the information presented not misleading. In the opinion of management, such information contains all adjustments, which are normal and recurring in nature, necessary for a fair statement of the financial position, results of operations and cash flow for such periods. All significant intercompany transactions and balances have been eliminated. The results of operations for the three and six months ended June 30, 2019 , are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2019 . These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2018 , contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 21, 2019. |
Accounting Policies
Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingencies, at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Credit Risk Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash balances and trade receivables. The Company’s excess cash is held with large financial institutions. The Company grants unsecured credit to its patients, most of whom reside in the service area of the Company’s facilities and are insured under third-party payor agreements. The Company’s general policy is to verify insurance coverage prior to the date of admission for patients admitted to the Company’s critical illness recovery hospitals and rehabilitation hospitals. Within the Company’s outpatient rehabilitation clinics, the Company verifies insurance coverage prior to the patient’s visit. Within the Company’s Concentra centers, the Company verifies insurance coverage or receives authorization from the patient’s employer prior to the patient’s visit. 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. Approximately 16% of the Company’s accounts receivable is from Medicare at both December 31, 2018 , and June 30, 2019 . Leases The Company evaluates whether a contract is or contains a lease at the inception of the contract. Upon lease commencement, the date on which a lessor makes the underlying asset available to the Company for use, the Company classifies the lease as either an operating or finance lease. Most of the Company’s facility and equipment leases are classified as operating leases. Balance Sheet For both operating and finance leases, the Company recognizes a right-of-use asset and lease liability at lease commencement. A right-of-use asset represents the Company’s right to use an underlying asset for the lease term while the lease liability represents an obligation to make lease payments arising from a lease which are measured on a discounted basis. The Company elected the short-term lease exemption for its equipment leases; accordingly, equipment leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Lease liabilities are measured at the present value of the remaining, fixed lease payments at lease commencement. The Company primarily uses its incremental borrowing rate, based on the information available at lease commencement, in determining the present value of its remaining lease payments. The Company’s leases may also specify extension or termination clauses. These options are factored into the measurement of the lease liability when it is reasonably certain that the Company will exercise the option. Right-of-use assets are measured at an amount equal to the initial lease liability, plus any prepaid lease payments (less any incentives received, such as reimbursement for leasehold improvements) and initial direct costs, at the lease commencement date. The Company has elected to account for lease and non-lease components, such as common area maintenance, as a single lease component for its facility leases. As a result, the fixed payments that would otherwise be allocated to the non-lease components will be accounted for as lease payments and are included in the measurement of the Company’s right-of-use asset and lease liability. Statement of Operations For the Company’s operating leases, rent expense, a component of cost of services and general and administrative expenses on the consolidated statements of operations, is recognized on a straight-line basis over the lease term. The straight-line rent expense is reflective of the interest expense on the lease liability using the effective interest method and the amortization of the right-of-use asset. The Company may enter into arrangements to sublease portions of its facilities and the Company typically retains the obligation to the lessor under these arrangements. The Company’s subleases are classified as operating leases; accordingly, the Company continues to account for the original leases as it did prior to commencement of the sublease. Sublease income, a component of cost of services on the consolidated statements of operations, is recognized on a straight-line basis, as a reduction to rent expense, over the term of the sublease. For the Company’s finance leases, interest expense on the lease liability is recognized using the effective interest method. Amortization expense related to the right-of-use asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. The Company elected the short-term lease exemption for its equipment leases. For these leases, the Company recognizes lease payments on a straight-line basis over the lease term and variable lease payments are expensed as incurred. These expenses are included as components of cost of services on the consolidated statements of operations. The Company makes payments related to changes in indexes or rates after the lease commencement date. Additionally, the Company makes payments, which are not fixed at lease commencement, for property taxes, insurance, and common area maintenance related to its facility leases. These variable lease payments, which are expensed as incurred, are included as a component of cost of services and general and administrative expenses on the consolidated statements of operations. Recent Accounting Pronouncements Financial Instruments In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments . The current standard delays the recognition of a credit loss on a financial asset until the loss is probable of occurring. The new standard removes the requirement that a credit loss be probable of occurring for it to be recognized and requires entities to use historical experience, current conditions, and reasonable and supportable forecasts to estimate their future expected credit losses. The Company’s accounts receivable derived from contracts with customers will be subject to ASU 2016-13. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance must be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the earliest comparative period in the financial statements. Given the very high rate of collectability of the Company’s accounts receivable derived from contracts with customers, the Company believes that the impact of ASU 2016-13 is unlikely to be material. The Company’s implementation efforts are focused on the accounting processes, risk assessments, and control objectives associated with accounting for its financial instruments under the new standard. Recently Adopted Accounting Pronouncements Leases The Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases using a modified retrospective approach as of January 1, 2019, for leases which existed on that date. Prior comparative periods were not adjusted and continue to be reported in accordance with ASC Topic 840, Leases . The Company elected the package of practical expedients, which permitted the Company not to reassess under ASC Topic 842 the Company’s prior conclusions about lease identification, lease classification, and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to the Company. The adoption of the standard resulted in the recognition of operating lease right-of-use assets of $1,015.0 million and operating lease liabilities of $1,057.0 million |
Redeemable Non-Controlling Inte
Redeemable Non-Controlling Interests | 6 Months Ended |
Jun. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Redeemable Non-Controlling Interests | Redeemable Non-Controlling Interests The ownership interests held by outside parties in subsidiaries, limited liability companies, and limited partnerships controlled by the Company are classified as non-controlling interests. Some of the Company’s non-controlling ownership interests consist of outside parties that have certain redemption rights that, if exercised, require the Company to purchase the parties’ ownership interests. These interests are classified and reported as redeemable non-controlling interests and have been adjusted to their approximate redemption values. The changes in redeemable non-controlling interests, which are the same for Holdings and Select, are as follows (in thousands): Balance as of December 31, 2017 $ 640,818 Net income attributable to redeemable non-controlling interests 5,743 Issuance and exchange of redeemable non-controlling interests 163,659 Distributions to and purchases of redeemable non-controlling interests (203,972 ) Redemption adjustment on redeemable non-controlling interests 1,051 Other 175 Balance as of March 31, 2018 $ 607,474 Net income attributable to redeemable non-controlling interests 10,909 Distributions to and purchases of redeemable non-controlling interests (11,112 ) Redemption adjustment on redeemable non-controlling interests 8,500 Other 461 Balance as of June 30, 2018 $ 616,232 Balance as of December 31, 2018 $ 780,488 Net income attributable to redeemable non-controlling interests 7,700 Distributions to and purchases of redeemable non-controlling interests (2,771 ) Redemption adjustment on redeemable non-controlling interests 47,470 Other 354 Balance as of March 31, 2019 $ 833,241 Net income attributable to redeemable non-controlling interests 11,507 Distributions to and purchases of redeemable non-controlling interests (395 ) Redemption adjustment on redeemable non-controlling interests (270 ) Other 339 Balance as of June 30, 2019 $ 844,422 |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions U.S. HealthWorks Acquisition On February 1, 2018, Concentra Inc. (“Concentra”) acquired all of the issued and outstanding shares of stock of U.S. HealthWorks, Inc. (“U.S. HealthWorks”), an occupational medicine and urgent care service provider, from Dignity Health Holding Corporation (“DHHC”). Concentra acquired U.S. HealthWorks for $753.6 million . DHHC, a subsidiary of Dignity Health, was issued a 20.0% equity interest in Concentra Group Holdings Parent, LLC (“Concentra Group Holdings Parent”) which was valued at $238.0 million . The remainder of the purchase price was paid in cash. Select retained a majority voting interest in Concentra Group Holdings Parent following the closing of the transaction. For the U.S. HealthWorks acquisition, the Company allocated the purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values in accordance with the provisions of ASC Topic 805, Business Combinations . During the year ended December 31, 2018, the Company finalized the purchase accounting related to this acquisition. The following table reconciles the fair values of identifiable net assets and goodwill to the consideration given for the acquired business (in thousands): Accounts receivable $ 68,934 Other current assets 10,810 Property and equipment 69,712 Identifiable intangible assets 140,406 Other assets 25,435 Goodwill 540,067 Total assets 855,364 Accounts payable and other current liabilities 49,925 Deferred income taxes and other long-term liabilities 51,851 Total liabilities 101,776 Consideration given $ 753,588 For the three months ended June 30, 2018 , U.S. HealthWorks contributed net operating revenues of $139.4 million which is reflected in the Company’s consolidated statement of operations. For the period February 1, 2018 through June 30, 2018 , U.S. HealthWorks contributed net operating revenues of $229.4 million which is reflected in the Company’s consolidated statement of operations for the six months ended June 30, 2018 . Due to the integrated nature of the Company’s operations, the Company believes that it is not practicable to separately identify earnings of U.S. HealthWorks on a stand-alone basis. Pro Forma Results The following pro forma unaudited results of operations have been prepared assuming the acquisition of U.S. HealthWorks occurred on January 1, 2017. These results are not necessarily indicative of the results of future operations nor of the results that would have occurred had the acquisition been consummated on the aforementioned date. For the three and six months ended June 30, 2019 , the Company’s results of operations include U.S. HealthWorks for the entire period and no pro forma adjustments were made. Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 (in thousands) Net operating revenues $ 1,296,210 $ 2,596,755 Net income attributable to the Company 48,563 82,365 The Company’s pro forma results were adjusted to recognize U.S. HealthWorks acquisition costs as of January 1, 2017. Accordingly, for the six months ended June 30, 2018 , pro forma results were adjusted to exclude $2.9 million of U.S. HealthWorks acquisition costs. |
Sale of Businesses
Sale of Businesses | 6 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of Businesses | Sale of Businesses During the six months ended June 30, 2019 , the Company recognized a non-operating gain of $6.5 million which resulted from the sale of 22 wholly-owned outpatient rehabilitation clinics to a non-consolidating subsidiary. During the six months ended June 30, 2018 , the Company recognized a non-operating gain of $6.9 million . The non-operating gain resulted principally from the sale of 26 |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities Concentra does not own many of its medical practices, as certain states prohibit the “corporate practice of medicine,” which restricts business corporations from practicing medicine through the direct employment of physicians or from exercising control over medical decisions by physicians. In these states, Concentra typically enters into long-term management agreements with professional corporations or associations that are owned by licensed physicians, which, in turn, employ or contract with physicians who provide professional medical services in its occupational health centers. The management agreements have terms that provide for Concentra to conduct, supervise, and manage the day-to-day non-medical operations of the occupational health centers and provide all management and administrative services. Concentra receives a management fee for these services, which is based, in part, on the performance of the professional corporation or association. Additionally, the outstanding voting equity interests of the professional corporations or associations are typically owned by licensed physicians appointed at Concentra’s discretion. Concentra has the ability to direct the transfer of ownership of the professional corporation or association to a new licensed physician at any time. The total assets of Concentra’s variable interest entities, which are comprised principally of accounts receivable, were $166.2 million and $193.2 million at December 31, 2018 , and June 30, 2019 , respectively. The total liabilities of Concentra’s variable interest entities, which are comprised principally of accounts payable, accrued expenses, and obligations payable for services received under the aforementioned management agreements, were $164.4 million and $191.6 million at December 31, 2018 , and June 30, 2019 , respectively. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company has operating and finance leases for its facilities and certain equipment. The Company leases its corporate office space from related parties. The Company’s critical illness recovery hospitals and rehabilitation hospitals generally have lease terms of 10 years with two , five year renewal options. These renewal options vary for hospitals which operate as a hospital within a hospital, or “HIH.” The Company’s outpatient rehabilitation clinics generally have lease terms of five years with two , three to five year renewal options. The Company’s Concentra centers generally have lease terms of 10 years with two , five year renewal options. For the three and six months ended June 30, 2019 , the Company’s total lease cost was as follows (in thousands): Three Months Ended June 30, 2019 Unrelated Parties Related Parties Total Operating lease cost $ 67,718 $ 1,342 $ 69,060 Finance lease cost: Amortization of right-of-use assets 90 — 90 Interest on lease liabilities 199 — 199 Short-term lease cost 592 — 592 Variable lease cost 8,755 85 8,840 Sublease income (2,442 ) — (2,442 ) Total lease cost $ 74,912 $ 1,427 $ 76,339 Six Months Ended June 30, 2019 Unrelated Parties Related Parties Total Operating lease cost $ 134,554 $ 2,684 $ 137,238 Finance lease cost: Amortization of right-of-use assets 126 — 126 Interest on lease liabilities 296 — 296 Short-term lease cost 1,184 — 1,184 Variable lease cost 20,591 241 20,832 Sublease income (4,930 ) — (4,930 ) Total lease cost $ 151,821 $ 2,925 $ 154,746 For the six months ended June 30, 2019 , supplemental cash flow information related to leases was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 136,300 Operating cash flows for finance leases 274 Financing cash flows for finance leases 142 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (1) $ 1,123,793 Finance leases 9,102 _______________________________________________________________________________ (1) Includes the right-of-use assets obtained in exchange for lease liabilities of $1,057.0 million which were recognized upon adoption of ASC Topic 842 at January 1, 2019. As of June 30, 2019 , supplemental balance sheet information related to leases was as follows (in thousands): Operating Leases Unrelated Parties Related Parties Total Operating lease right-of-use assets $ 951,993 $ 19,392 $ 971,385 Current operating lease liabilities $ 197,660 $ 4,824 $ 202,484 Non-current operating lease liabilities 796,240 17,663 813,903 Total operating lease liabilities $ 993,900 $ 22,487 $ 1,016,387 Finance Leases Unrelated Parties Related Parties Total Property and equipment, net $ 5,099 $ — $ 5,099 Current portion of long-term debt and notes payable $ 204 $ — $ 204 Long-term debt, net of current portion 13,185 — 13,185 Total finance lease liabilities $ 13,389 $ — $ 13,389 As of June 30, 2019 , the weighted average remaining lease terms and discount rates were as follows: Weighted average remaining lease term (in years): Operating leases 8.1 Finance leases 34.8 Weighted average discount rate: Operating leases 5.9 % Finance leases 7.4 % As of June 30, 2019 , maturities of lease liabilities were approximately as follows (in thousands): Operating Leases Finance Leases Total 2019 (remainder of year) $ 132,470 $ 588 $ 133,058 2020 238,479 1,182 239,661 2021 200,677 1,193 201,870 2022 159,238 1,203 160,441 2023 118,365 1,214 119,579 Thereafter 516,615 31,630 548,245 Total undiscounted cash flows 1,365,844 37,010 1,402,854 Less: Imputed interest 349,457 23,621 373,078 Total discounted lease liabilities $ 1,016,387 $ 13,389 $ 1,029,776 As disclosed in the Company’s 2018 Annual Report on Form 10-K, the Company’s undiscounted future minimum lease obligations on long-term, non-cancelable operating leases with related and unrelated parties were approximately as follows as of December 31, 2018 (in thousands): Total 2019 $ 267,846 2020 231,711 2021 193,155 2022 150,155 2023 107,759 Thereafter 484,038 $ 1,434,664 |
Leases | Leases The Company has operating and finance leases for its facilities and certain equipment. The Company leases its corporate office space from related parties. The Company’s critical illness recovery hospitals and rehabilitation hospitals generally have lease terms of 10 years with two , five year renewal options. These renewal options vary for hospitals which operate as a hospital within a hospital, or “HIH.” The Company’s outpatient rehabilitation clinics generally have lease terms of five years with two , three to five year renewal options. The Company’s Concentra centers generally have lease terms of 10 years with two , five year renewal options. For the three and six months ended June 30, 2019 , the Company’s total lease cost was as follows (in thousands): Three Months Ended June 30, 2019 Unrelated Parties Related Parties Total Operating lease cost $ 67,718 $ 1,342 $ 69,060 Finance lease cost: Amortization of right-of-use assets 90 — 90 Interest on lease liabilities 199 — 199 Short-term lease cost 592 — 592 Variable lease cost 8,755 85 8,840 Sublease income (2,442 ) — (2,442 ) Total lease cost $ 74,912 $ 1,427 $ 76,339 Six Months Ended June 30, 2019 Unrelated Parties Related Parties Total Operating lease cost $ 134,554 $ 2,684 $ 137,238 Finance lease cost: Amortization of right-of-use assets 126 — 126 Interest on lease liabilities 296 — 296 Short-term lease cost 1,184 — 1,184 Variable lease cost 20,591 241 20,832 Sublease income (4,930 ) — (4,930 ) Total lease cost $ 151,821 $ 2,925 $ 154,746 For the six months ended June 30, 2019 , supplemental cash flow information related to leases was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 136,300 Operating cash flows for finance leases 274 Financing cash flows for finance leases 142 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (1) $ 1,123,793 Finance leases 9,102 _______________________________________________________________________________ (1) Includes the right-of-use assets obtained in exchange for lease liabilities of $1,057.0 million which were recognized upon adoption of ASC Topic 842 at January 1, 2019. As of June 30, 2019 , supplemental balance sheet information related to leases was as follows (in thousands): Operating Leases Unrelated Parties Related Parties Total Operating lease right-of-use assets $ 951,993 $ 19,392 $ 971,385 Current operating lease liabilities $ 197,660 $ 4,824 $ 202,484 Non-current operating lease liabilities 796,240 17,663 813,903 Total operating lease liabilities $ 993,900 $ 22,487 $ 1,016,387 Finance Leases Unrelated Parties Related Parties Total Property and equipment, net $ 5,099 $ — $ 5,099 Current portion of long-term debt and notes payable $ 204 $ — $ 204 Long-term debt, net of current portion 13,185 — 13,185 Total finance lease liabilities $ 13,389 $ — $ 13,389 As of June 30, 2019 , the weighted average remaining lease terms and discount rates were as follows: Weighted average remaining lease term (in years): Operating leases 8.1 Finance leases 34.8 Weighted average discount rate: Operating leases 5.9 % Finance leases 7.4 % As of June 30, 2019 , maturities of lease liabilities were approximately as follows (in thousands): Operating Leases Finance Leases Total 2019 (remainder of year) $ 132,470 $ 588 $ 133,058 2020 238,479 1,182 239,661 2021 200,677 1,193 201,870 2022 159,238 1,203 160,441 2023 118,365 1,214 119,579 Thereafter 516,615 31,630 548,245 Total undiscounted cash flows 1,365,844 37,010 1,402,854 Less: Imputed interest 349,457 23,621 373,078 Total discounted lease liabilities $ 1,016,387 $ 13,389 $ 1,029,776 As disclosed in the Company’s 2018 Annual Report on Form 10-K, the Company’s undiscounted future minimum lease obligations on long-term, non-cancelable operating leases with related and unrelated parties were approximately as follows as of December 31, 2018 (in thousands): Total 2019 $ 267,846 2020 231,711 2021 193,155 2022 150,155 2023 107,759 Thereafter 484,038 $ 1,434,664 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Goodwill The following table shows changes in the carrying amounts of goodwill by reporting unit for the six months ended June 30, 2019 : Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Total (in thousands) Balance as of December 31, 2018 $ 1,045,220 $ 416,646 $ 642,422 $ 1,216,438 $ 3,320,726 Acquired 30,028 14,254 7,712 18,298 70,292 Sold — — (5,624 ) — (5,624 ) Balance as of June 30, 2019 $ 1,075,248 $ 430,900 $ 644,510 $ 1,234,736 $ 3,385,394 Identifiable Intangible Assets The following table provides the gross carrying amounts, accumulated amortization, and net carrying amounts for the Company’s identifiable intangible assets: December 31, 2018 June 30, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in thousands) Indefinite-lived intangible assets: Trademarks $ 166,698 $ — $ 166,698 $ 166,698 $ — $ 166,698 Certificates of need 19,174 — 19,174 17,080 — 17,080 Accreditations 1,857 — 1,857 1,857 — 1,857 Finite-lived intangible assets: Trademarks 5,000 (4,583 ) 417 5,000 (5,000 ) — Customer relationships 280,710 (61,900 ) 218,810 284,440 (74,516 ) 209,924 Favorable leasehold interests (1) 13,553 (6,064 ) 7,489 — — — Non-compete agreements 29,400 (6,152 ) 23,248 31,197 (7,421 ) 23,776 Total identifiable intangible assets $ 516,392 $ (78,699 ) $ 437,693 $ 506,272 $ (86,937 ) $ 419,335 _______________________________________________________________________________ (1) Favorable leasehold interests are a component of the operating lease right-of-use assets upon adoption of ASC Topic 842, Leases . The Company’s accreditations and indefinite-lived trademarks have renewal terms and the costs to renew these intangible assets are expensed as incurred. At June 30, 2019 , the accreditations and indefinite-lived trademarks have a weighted average time until next renewal of 1.5 years and 7.7 years , respectively. The Company’s finite-lived intangible assets amortize over their estimated useful lives. Amortization expense was $7.8 million and $8.9 million for the three months ended June 30, 2018 and 2019 , respectively. Amortization expense was $14.2 million and $16.0 million for the six months ended June 30, 2018 and 2019 |
Long-Term Debt and Notes Payabl
Long-Term Debt and Notes Payable | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Notes Payable | Long-Term Debt and Notes Payable For purposes of this indebtedness footnote, references to Select exclude Concentra because the Concentra credit facilities are non-recourse to Holdings and Select. As of June 30, 2019 , the Company’s long-term debt and notes payable were as follows (in thousands): Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value Select: 6.375% senior notes $ 710,000 $ 436 $ (3,689 ) $ 706,747 $ 710,852 Credit facilities: Revolving facility 195,000 — — 195,000 179,400 Term loan 1,031,068 (8,879 ) (8,458 ) 1,013,731 1,027,201 Other debt, including finance leases 74,864 — (444 ) 74,420 74,420 Total Select debt 2,010,932 (8,443 ) (12,591 ) 1,989,898 1,991,873 Concentra: Credit facilities: Term loans 1,380,297 (2,354 ) (15,648 ) 1,362,295 1,380,158 Other debt, including finance leases 6,521 — — 6,521 6,521 Total Concentra debt 1,386,818 (2,354 ) (15,648 ) 1,368,816 1,386,679 Total debt $ 3,397,750 $ (10,797 ) $ (28,239 ) $ 3,358,714 $ 3,378,552 Principal maturities of the Company’s long-term debt and notes payable were approximately as follows (in thousands): 2019 2020 2021 2022 2023 Thereafter Total Select: 6.375% senior notes $ — $ — $ 710,000 $ — $ — $ — $ 710,000 Credit facilities: Revolving facility — — — 195,000 — — 195,000 Term loan — — — — — 1,031,068 1,031,068 Other debt, including finance leases 5,595 3,003 1,814 23,036 38 41,378 74,864 Total Select debt 5,595 3,003 711,814 218,036 38 1,072,446 2,010,932 Concentra: Credit facilities: Term loans — — — 1,140,298 239,999 — 1,380,297 Other debt, including finance leases 807 1,194 330 358 363 3,469 6,521 Total Concentra debt 807 1,194 330 1,140,656 240,362 3,469 1,386,818 Total debt $ 6,402 $ 4,197 $ 712,144 $ 1,358,692 $ 240,400 $ 1,075,915 $ 3,397,750 As of December 31, 2018 , the Company’s long-term debt and notes payable were as follows (in thousands): Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value Select: 6.375% senior notes $ 710,000 $ 550 $ (4,642 ) $ 705,908 $ 706,450 Credit facilities: Revolving facility 20,000 — — 20,000 18,400 Term loan 1,129,875 (9,690 ) (9,321 ) 1,110,864 1,076,206 Other 56,415 — (484 ) 55,931 55,931 Total Select debt 1,916,290 (9,140 ) (14,447 ) 1,892,703 1,856,987 Concentra: Credit facilities: Term loans 1,414,175 (2,765 ) (18,648 ) 1,392,762 1,357,802 Other debt, including finance leases 7,916 — — 7,916 7,916 Total Concentra debt 1,422,091 (2,765 ) (18,648 ) 1,400,678 1,365,718 Total debt $ 3,338,381 $ (11,905 ) $ (33,095 ) $ 3,293,381 $ 3,222,705 Amendment to Concentra First Lien Credit Agreement On April 8, 2019, Concentra entered into Amendment No. 5 to the Concentra first lien credit agreement. Amendment No. 5 extended the maturity date of the Concentra revolving credit facility from June 1, 2020 to June 1, 2021 and increased the aggregate commitments available under the Concentra revolving credit facility from $75.0 million to $100.0 million . Excess Cash Flow Payment In February 2019, Select made a principal prepayment of approximately $98.8 million associated with its term loans in accordance with the provision in the Select credit facilities that requires mandatory prepayments of term loans as a result of annual excess cash flow, as defined in the Select credit facilities. The principal prepayment was applied against future payments sequentially; as a result, no further loan amortization payments will be required on the Select term loan until maturity on March 6, 2025. In February 2019, Concentra made a principal prepayment of approximately $33.9 million associated with its term loans in accordance with the provision in the Concentra credit facilities that requires mandatory prepayments of term loans as a result of annual excess cash flow, as defined in the Concentra credit facilities. The principal prepayment was applied against future payments sequentially; as a result, no further loan amortization payments will be required on the terms loans outstanding under the Concentra first lien credit agreement until maturity on June 1, 2022. Fair Value The Company considers the inputs in the valuation process to be Level 2 in the fair value hierarchy for Select’s 6.375% senior notes and for its credit facilities. 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. The fair values of the Select credit facilities and the Concentra credit facilities were based on quoted market prices for this debt in the syndicated loan market. The fair value of Select’s 6.375% senior notes was based on quoted market prices. The carrying amount of other debt, principally short-term notes payable, approximates fair value. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company’s reportable segments include the critical illness recovery hospital segment, rehabilitation hospital segment, outpatient rehabilitation segment, and Concentra segment. Other activities include the Company’s corporate shared services, certain investments, and employee leasing services with non-consolidating subsidiaries. During the three months ended June 30, 2019 , the Company began reporting the net operating revenues and expenses associated with employee leasing services provided to its non-consolidating subsidiaries as part of the Company’s other activities. Previously, these services were reflected in the financial results of the Company’s reportable segments. Under these employee leasing arrangements, actual labor costs are passed through to the Company’s non-consolidating subsidiaries, resulting in the Company’s recognition of net operating revenues equal to the actual labor costs incurred. The Company evaluates performance of the segments based on Adjusted EBITDA. Adjusted EBITDA is defined as earnings excluding interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, acquisition costs associated with U.S. HealthWorks, non-operating gain (loss), and equity in earnings (losses) of unconsolidated subsidiaries. The Company has provided additional information regarding its reportable segments, such as total assets, which contributes to the understanding of the Company and provides useful information to the users of the consolidated financial statements. The following tables summarize selected financial data for the Company’s reportable segments. Prior year results presented herein have been changed to conform to the current presentation. The segment results of Holdings are identical to those of Select. Three Months Ended June 30, Six Months Ended June 30, 2018 2019 2018 2019 (in thousands) Net operating revenues: Critical illness recovery hospital $ 442,452 $ 461,143 $ 907,128 $ 918,677 Rehabilitation hospital 144,779 160,374 288,087 314,932 Outpatient rehabilitation 253,914 261,891 498,145 508,796 Concentra 412,823 413,451 768,939 809,772 Other 42,242 64,505 86,875 133,818 Total Company $ 1,296,210 $ 1,361,364 $ 2,549,174 $ 2,685,995 Adjusted EBITDA: Critical illness recovery hospital $ 60,725 $ 64,138 $ 133,697 $ 137,136 Rehabilitation hospital 28,195 29,968 54,971 55,765 Outpatient rehabilitation 41,947 42,584 72,472 71,575 Concentra 72,568 76,087 130,365 142,345 Other (25,207 ) (26,544 ) (50,045 ) (50,471 ) Total Company $ 178,228 $ 186,233 $ 341,460 $ 356,350 Total assets: Critical illness recovery hospital $ 1,828,038 $ 2,119,574 $ 1,828,038 $ 2,119,574 Rehabilitation hospital 867,175 1,107,852 867,175 1,107,852 Outpatient rehabilitation 979,678 1,265,487 979,678 1,265,487 Concentra 2,174,931 2,447,387 2,174,931 2,447,387 Other 114,978 166,640 114,978 166,640 Total Company $ 5,964,800 $ 7,106,940 $ 5,964,800 $ 7,106,940 Purchases of property and equipment: Critical illness recovery hospital $ 12,849 $ 14,488 $ 23,321 $ 24,648 Rehabilitation hospital 8,080 5,356 20,997 18,539 Outpatient rehabilitation 8,018 6,705 15,356 15,745 Concentra 10,121 12,240 16,742 27,938 Other 2,963 1,423 5,232 2,415 Total Company $ 42,031 $ 40,212 $ 81,648 $ 89,285 A reconciliation of Adjusted EBITDA to income before income taxes is as follows: Three Months Ended June 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 60,725 $ 28,195 $ 41,947 $ 72,568 $ (25,207 ) Depreciation and amortization (11,952 ) (6,015 ) (6,704 ) (24,697 ) (2,356 ) Stock compensation expense — — — (1,138 ) (4,846 ) U.S. HealthWorks acquisition costs — — — 41 — Income (loss) from operations $ 48,773 $ 22,180 $ 35,243 $ 46,774 $ (32,409 ) $ 120,561 Equity in earnings of unconsolidated subsidiaries 4,785 Non-operating gain 6,478 Interest expense (50,159 ) Income before income taxes $ 81,665 Three Months Ended June 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 64,138 $ 29,968 $ 42,584 $ 76,087 $ (26,544 ) Depreciation and amortization (14,495 ) (6,696 ) (6,991 ) (24,479 ) (2,332 ) Stock compensation expense — — — (767 ) (5,591 ) Income (loss) from operations $ 49,643 $ 23,272 $ 35,593 $ 50,841 $ (34,467 ) $ 124,882 Equity in earnings of unconsolidated subsidiaries 7,394 Interest expense (51,464 ) Income before income taxes $ 80,812 Six Months Ended June 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 133,697 $ 54,971 $ 72,472 $ 130,365 $ (50,045 ) Depreciation and amortization (23,010 ) (11,737 ) (13,341 ) (45,844 ) (4,563 ) Stock compensation expense — — — (1,349 ) (9,562 ) U.S. HealthWorks acquisition costs — — — (2,895 ) — Income (loss) from operations $ 110,687 $ 43,234 $ 59,131 $ 80,277 $ (64,170 ) $ 229,159 Loss on early retirement of debt (10,255 ) Equity in earnings of unconsolidated subsidiaries 9,482 Non-operating gain 6,877 Interest expense (97,322 ) Income before income taxes $ 137,941 Six Months Ended June 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 137,136 $ 55,765 $ 71,575 $ 142,345 $ (50,471 ) Depreciation and amortization (25,946 ) (13,098 ) (14,023 ) (49,383 ) (4,681 ) Stock compensation expense — — — (1,534 ) (11,079 ) Income (loss) from operations $ 111,190 $ 42,667 $ 57,552 $ 91,428 $ (66,231 ) $ 236,606 Equity in earnings of unconsolidated subsidiaries 11,760 Non-operating gain 6,532 Interest expense (102,275 ) Income before income taxes $ 152,623 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Net operating revenues consist primarily of patient service revenues generated from services provided to patients and other revenues for services provided to healthcare institutions under contractual arrangements. The following tables disaggregate the Company’s net operating revenues for the three and six months ended June 30, 2018 and 2019 : Three Months Ended June 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 225,857 $ 73,054 $ 41,475 $ 517 $ — $ 340,903 Non-Medicare 213,083 62,387 194,611 409,922 — 880,003 Total patient services revenues 438,940 135,441 236,086 410,439 — 1,220,906 Other revenues (1) 3,512 9,338 17,828 2,384 42,242 75,304 Total net operating revenues $ 442,452 $ 144,779 $ 253,914 $ 412,823 $ 42,242 $ 1,296,210 Three Months Ended June 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 223,688 $ 77,260 $ 43,869 $ 474 $ — $ 345,291 Non-Medicare 234,616 73,972 198,241 410,277 — 917,106 Total patient services revenues 458,304 151,232 242,110 410,751 — 1,262,397 Other revenues 2,839 9,142 19,781 2,700 64,505 98,967 Total net operating revenues $ 461,143 $ 160,374 $ 261,891 $ 413,451 $ 64,505 $ 1,361,364 Six Months Ended June 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 466,849 $ 145,895 $ 79,665 $ 1,145 $ — $ 693,554 Non-Medicare 433,089 124,289 383,511 763,174 — 1,704,063 Total patient services revenues 899,938 270,184 463,176 764,319 — 2,397,617 Other revenues (1) 7,190 17,903 34,969 4,620 86,875 151,557 Total net operating revenues $ 907,128 $ 288,087 $ 498,145 $ 768,939 $ 86,875 $ 2,549,174 Six Months Ended June 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 461,857 $ 151,839 $ 84,147 $ 1,029 $ — $ 698,872 Non-Medicare 451,575 144,614 386,155 803,513 — 1,785,857 Total patient services revenues 913,432 296,453 470,302 804,542 — 2,484,729 Other revenues 5,245 18,479 38,494 5,230 133,818 201,266 Total net operating revenues $ 918,677 $ 314,932 $ 508,796 $ 809,772 $ 133,818 $ 2,685,995 _______________________________________________________________________________ (1) For the three and six months ended June 30, 2018 , the financial results of the Company’s reportable segments have been changed to remove the net operating revenues associated with employee leasing services provided to the Company’s non-consolidating subsidiaries. These results are now reported as part of the Company’s other activities. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The Company’s capital structure includes common stock and unvested restricted stock awards. To compute earnings per share (“EPS”), the Company applies the two-class method because the Company’s unvested restricted stock awards are participating securities which are entitled to participate equally with the Company’s common stock in undistributed earnings. Application of the Company’s two-class method is as follows: (i) Net income attributable to the Company is reduced by the amount of dividends declared and by the contractual amount of dividends that must be paid for the current period for each class of stock. There were no dividends declared or contractual dividends paid for the three and six months ended June 30, 2018 and 2019 . (ii) The remaining undistributed net income of the Company is then equally allocated to its common stock and unvested restricted stock awards, as if all of the earnings for the period had been distributed. The total net income allocated to each security is determined by adding both distributed and undistributed net income for the period. (i) The net income allocated to each security is then divided by the weighted average number of outstanding shares for the period to determine the EPS for each security considered in the two-class method. The following table sets forth the net income attributable to the Company, its common shares outstanding, and its participating securities outstanding. Basic EPS Diluted EPS Three Months Ended June 30, Three Months Ended June 30, 2018 2019 2018 2019 (in thousands) Net income $ 60,559 $ 59,986 $ 60,559 $ 59,986 Less: net income attributable to non-controlling interests 14,048 15,170 14,048 15,170 Net income attributable to the Company 46,511 44,816 46,511 44,816 Less: net income attributable to participating securities 1,517 1,484 1,517 1,484 Net income attributable to common shares $ 44,994 $ 43,332 $ 44,994 $ 43,332 Basic EPS Diluted EPS Six Months Ended June 30, Six Months Ended June 30, 2018 2019 2018 2019 (in thousands) Net income $ 104,541 $ 113,330 $ 104,541 $ 113,330 Less: net income attributable to non-controlling interests 24,291 27,680 24,291 27,680 Net income attributable to the Company 80,250 85,650 80,250 85,650 Less: net income attributable to participating securities 2,630 2,827 2,628 2,826 Net income attributable to common shares $ 77,620 $ 82,823 $ 77,622 $ 82,824 The following tables set forth the computation of EPS under the two-class method: Three Months Ended June 30, 2018 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 44,994 129,830 $ 0.35 $ 44,994 129,924 $ 0.35 Participating securities 1,517 4,379 $ 0.35 1,517 4,379 $ 0.35 Total Company $ 46,511 $ 46,511 Three Months Ended June 30, 2019 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 43,332 130,525 $ 0.33 $ 43,332 130,562 $ 0.33 Participating securities 1,484 4,471 $ 0.33 1,484 4,471 $ 0.33 Total Company $ 44,816 $ 44,816 Six Months Ended June 30, 2018 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 77,620 129,761 $ 0.60 $ 77,622 129,871 $ 0.60 Participating securities 2,630 4,397 $ 0.60 2,628 4,397 $ 0.60 Total Company $ 80,250 $ 80,250 Six Months Ended June 30, 2019 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 82,823 130,672 $ 0.63 $ 82,824 130,711 $ 0.63 Participating securities 2,827 4,460 $ 0.63 2,826 4,460 $ 0.63 Total Company $ 85,650 $ 85,650 _______________________________________________________________________________ (1) Represents the weighted average share count outstanding during the period. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation The Company is a party to various legal actions, proceedings, and claims (some of which are not insured), and regulatory and other governmental audits and investigations in the ordinary course of its business. The Company cannot predict the ultimate outcome of pending litigation, proceedings, and regulatory and other governmental audits and investigations. These matters could potentially subject the Company to sanctions, damages, recoupments, fines, and other penalties. The Department of Justice, Centers for Medicare & Medicaid Services (“CMS”), or other federal and state enforcement and regulatory agencies may conduct additional investigations related to the Company’s businesses in the future that may, either individually or in the aggregate, have a material adverse effect on the Company’s business, financial position, results of operations, and liquidity. To address claims arising out of the Company’s operations, the Company maintains professional malpractice liability insurance and general liability insurance coverages through a number of different programs that are dependent upon such factors as the state where the Company is operating and whether the operations are wholly owned or are operated through a joint venture. For the Company’s wholly owned operations, the Company currently maintains insurance coverages under a combination of policies with a total annual aggregate limit of up to $40.0 million . The Company’s insurance for the professional liability coverage is written on a “claims-made” basis, and its commercial general liability coverage is maintained on an “occurrence” basis. These coverages apply after a self-insured retention limit is exceeded. For the Company’s joint venture operations, the Company has numerous programs that are designed to respond to the risks of the specific joint venture. The annual aggregate limit under these programs ranges from $5.0 million to $20.0 million . The policies are generally written on a “claims-made” basis. Each of these programs has either a deductible or self-insured retention limit. The Company reviews its insurance program annually and may make adjustments to the amount of insurance coverage and self-insured retentions in future years. 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. Evansville Litigation. On October 19, 2015, the plaintiff‑relators filed a Second Amended Complaint in United States of America, ex rel. Tracy Conroy, Pamela Schenk and Lisa Wilson v. Select Medical Corporation, Select Specialty Hospital-Evansville, LLC (“SSH‑Evansville”), Select Employment Services, Inc., and Dr. Richard Sloan. The case is a civil action filed in the United States District Court for the Southern District of Indiana by private plaintiff‑relators on behalf of the United States under the federal False Claims Act. The plaintiff‑relators are the former CEO and two former case managers at SSH‑Evansville, and the defendants currently include the Company, SSH‑Evansville, a subsidiary of the Company serving as common paymaster for its employees, and a physician who practices at SSH‑Evansville. The plaintiff‑relators allege that SSH‑Evansville discharged patients too early or held patients too long, improperly discharged patients to and readmitted them from short stay hospitals, up‑coded diagnoses at admission, and admitted patients for whom long‑term acute care was not medically necessary. They also allege that the defendants engaged in retaliation in violation of federal and state law. The Second Amended Complaint replaced a prior complaint that was filed under seal on September 28, 2012 and served on the Company on February 15, 2013, after a federal magistrate judge unsealed it on January 8, 2013. All deadlines in the case had been stayed after the seal was lifted in order to allow the government time to complete its investigation and to decide whether or not to intervene. On June 19, 2015, the United States Department of Justice notified the District Court of its decision not to intervene in the case. In December 2015, the defendants filed a Motion to Dismiss the Second Amended Complaint on multiple grounds, including that the action is disallowed by the False Claims Act’s public disclosure bar, which disqualifies qui tam actions that are based on fraud already publicly disclosed through enumerated sources, unless the relator is an original source, and that the plaintiff‑relators did not plead their claims with sufficient particularity, as required by the Federal Rules of Civil Procedure. Thereafter, the United States filed a notice asserting a veto of the defendants’ use of the public disclosure bar for claims arising from conduct from and after March 23, 2010, which was based on certain statutory changes to the public disclosure bar language included in the Affordable Care Act. On September 30, 2016, the District Court partially granted and partially denied the defendants’ Motion to Dismiss. It ruled that the plaintiff‑relators alleged substantially the same conduct as had been publicly disclosed and that the plaintiff relators are not original sources, so that the public disclosure bar requires dismissal of all non‑retaliation claims arising from conduct before March 23, 2010. The District Court also ruled that the statutory changes to the public disclosure bar gave the United States the power to veto its applicability to claims arising from conduct on and after March 23, 2010, and therefore did not dismiss those claims based on the public disclosure bar. However, the District Court ruled that the plaintiff‑relators did not plead certain of their claims relating to interrupted stay manipulation and premature discharging of patients with the requisite particularity, and dismissed those claims. The District Court declined to dismiss the plaintiff relators’ claims arising from conduct from and after March 23, 2010 relating to delayed discharging of patients and up-coding and the plaintiff relators’ retaliation claims. The plaintiff-relators then proposed a case management plan seeking nationwide discovery involving all of the Company’s LTCHs for the period from March 23, 2010 through the present and allowing discovery that would facilitate the use of statistical sampling to prove liability, which the defendants opposed. In April 2018, a U.S. magistrate judge ruled that plaintiff‑relators’ discovery will be limited to only SSH-Evansville for the period from March 23, 2010 through September 30, 2016, and that the plaintiff‑relators will be required to prove the fraud that they allege on a claim-by-claim basis, rather than using statistical sampling. The plaintiff-relators appealed this decision to the district judge who, in March 2019, affirmed the decision of the magistrate judge regarding the geographic and temporal scope of the case, but ruled that the question of statistical sampling is not ripe for review. The Company intends to vigorously defend this action, but at this time the Company is unable to predict the timing and outcome of this matter. Wilmington Litigation. On January 19, 2017, the United States District Court for the District of Delaware unsealed a qui tam Complaint in United States of America and State of Delaware ex rel. Theresa Kelly v. Select Specialty Hospital-Wilmington, Inc. (“SSH‑Wilmington”), Select Specialty Hospitals, Inc., Select Employment Services, Inc., Select Medical Corporation, and Crystal Cheek, No. 16‑347‑LPS. The Complaint was initially filed under seal in May 2016 by a former chief nursing officer at SSH‑Wilmington and was unsealed after the United States filed a Notice of Election to Decline Intervention in January 2017. The corporate defendants were served in March 2017. In the complaint, the plaintiff‑relator alleges that the Select defendants and an individual defendant, who is a former health information manager at SSH‑Wilmington, violated the False Claims Act and the Delaware False Claims and Reporting Act based on allegedly falsifying medical practitioner signatures on medical records and failing to properly examine the credentials of medical practitioners at SSH‑Wilmington. In response to the Select defendants’ motion to dismiss the Complaint, in May 2017 the plaintiff-relator filed an Amended Complaint asserting the same causes of action. The Select defendants filed a Motion to Dismiss the Amended Complaint based on numerous grounds, including that the Amended Complaint did not plead any alleged fraud with sufficient particularity, failed to plead that the alleged fraud was material to the government’s payment decision, failed to plead sufficient facts to establish that the Select defendants knowingly submitted false claims or records, and failed to allege any reverse false claim. In March 2018, the District Court dismissed the plaintiff‑relator’s claims related to the alleged failure to properly examine medical practitioners’ credentials, her reverse false claims allegations, and her claim that defendants violated the Delaware False Claims and Reporting Act. It denied the defendants’ motion to dismiss claims that the allegedly falsified medical practitioner signatures violated the False Claims Act. Separately, the District Court dismissed the individual defendant due to plaintiff-relator’s failure to timely serve the amended complaint upon her. In March 2017, the plaintiff-relator initiated a second action by filing a Complaint in the Superior Court of the State of Delaware in Theresa Kelly v. Select Medical Corporation, Select Employment Services, Inc., and SSH‑Wilmington, C.A. No. N17C-03-293 CLS. The Delaware Complaint alleges that the defendants retaliated against her in violation of the Delaware Whistleblowers’ Protection Act for reporting the same alleged violations that are the subject of the federal Amended Complaint. The defendants filed a motion to dismiss, or alternatively to stay, the Delaware Complaint based on the pending federal Amended Complaint and the failure to allege facts to support a violation of the Delaware Whistleblowers’ Protection Act. In January 2018, the Court stayed the Delaware Complaint pending the outcome of the federal case. The Company intends to vigorously defend these actions, but at this time the Company is unable to predict the timing and outcome of this matter. Contract Therapy Subpoena. On May 18, 2017, the Company received a subpoena from the U.S. Attorney’s Office for the District of New Jersey seeking various documents principally relating to the Company’s contract therapy division, which contracted to furnish rehabilitation therapy services to residents of skilled nursing facilities (“SNFs”) and other providers. The Company operated its contract therapy division through a subsidiary until March 31, 2016, when the Company sold the stock of the subsidiary. The subpoena seeks documents that appear to be aimed at assessing whether therapy services were furnished and billed in compliance with Medicare SNF billing requirements, including whether therapy services were coded at inappropriate levels and whether excessive or unnecessary therapy was furnished to justify coding at higher paying levels. The Company does not know whether the subpoena has been issued in connection with a qui tam lawsuit or in connection with possible civil, criminal or administrative proceedings by the government. The Company is producing documents in response to the subpoena and intends to fully cooperate with this investigation. At this time, the Company is unable to predict the timing and outcome of this matter. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Issuance and Sale of Senior Notes On August 1, 2019, Select issued and sold $550.0 million aggregate principal amount of senior notes due August 15, 2026. Select intends to use a portion of the net proceeds of the senior notes, together with a portion of the proceeds from the incremental term loan borrowings under the Select credit facilities (as described below), to redeem in full Select’s $710 million 6.375% senior notes due 2021, to repay in full the outstanding borrowings under Select’s revolving credit facility, and pay related fees and expenses associated with the financing. Interest on the senior notes accrues at the rate of 6.250% per annum and is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on February 15, 2020. The senior notes are Select’s senior unsecured obligations which are subordinated to all of Select’s existing and future secured indebtedness, including the Select credit facilities. The senior notes rank equally in right of payment with all of Select’s other existing and future senior unsecured indebtedness and senior in right of payment to all of Select’s existing and future subordinated indebtedness. The senior notes are unconditionally guaranteed on a joint and several basis by each of 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 senior notes prior to August 15, 2022 by paying a “make-whole” premium. Select may redeem some or all of the senior notes on or after August 15, 2022 at specified redemption prices. In addition, prior to August 15, 2022, Select may redeem up to 40% of the principal amount of the senior notes with the net proceeds of certain equity offerings at a price of 106.250% plus accrued and unpaid interest, if any. Select is obligated to offer to repurchase the senior 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 terms of the senior notes contains covenants that, among other things, limit Select’s ability and the ability of certain of Select’s 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. These covenants are subject to a number of exceptions, limitations and qualifications. Amendment to Select Credit Facilities On August 1, 2019, Select entered into Amendment No. 3 to the Select credit agreement dated March 6, 2017. Among other things, the amendment (i) provided for an additional $500.0 million in term loans that, along with the existing Select term loan, have a maturity date of March 6, 2025, (ii) extended the maturity date of Select’s revolving credit facility from March 6, 2022 to March 6, 2024, and (iii) increased the total net leverage ratio permitted under the Select credit agreement. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure Text Block Supplement [Abstract] | |
Condensed Consolidating Financial Information | Condensed Consolidating Financial Information Select’s 6.375% senior notes are fully and unconditionally and jointly and severally guaranteed, except for customary limitations, on a senior basis by all of Select’s wholly owned subsidiaries (the “Subsidiary Guarantors”). The Subsidiary Guarantors are defined as subsidiaries 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” and Concentra Group Holdings Parent and its subsidiaries, “Non-Guarantor Concentra”). Select conducts a significant portion of its business through its subsidiaries. Presented below is condensed consolidating financial information for Select, the Subsidiary Guarantors, the Non-Guarantor Subsidiaries, and Non-Guarantor Concentra. 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. Select Medical Corporation Condensed Consolidating Balance Sheet June 30, 2019 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) ASSETS Current Assets: Cash and cash equivalents $ 78 $ 7,576 $ 3,256 $ 113,126 $ — $ 124,036 Accounts receivable — 445,484 129,946 216,339 — 791,769 Intercompany receivables — 1,702,313 147,990 — (1,850,303 ) (a) — Prepaid income taxes 142 5,936 8 6,838 (606 ) (f) 12,318 Other current assets 29,306 32,072 9,923 28,641 — 99,942 Total Current Assets 29,526 2,193,381 291,123 364,944 (1,850,909 ) 1,028,065 Operating lease right-of-use assets 33,568 441,710 513,796 307,623 (325,312 ) (a) 971,385 Property and equipment, net 28,578 658,686 114,256 207,035 — 1,008,555 Investment in affiliates 4,543,196 175,551 — — (4,718,747 ) (b)(c) — Goodwill — 2,150,658 — 1,234,736 — 3,385,394 Identifiable intangible assets, net 3 98,033 4,676 316,623 — 419,335 Other assets 34,285 236,642 16,524 16,426 (9,671 ) (e) 294,206 Total Assets $ 4,669,156 $ 5,954,661 $ 940,375 $ 2,447,387 $ (6,904,639 ) $ 7,106,940 LIABILITIES AND EQUITY Current Liabilities: Overdrafts $ 27,259 $ — $ — $ — $ — $ 27,259 Current operating lease liabilities 6,419 102,709 39,896 67,155 (13,695 ) (a) 202,484 Current portion of long-term debt and notes payable 6,376 524 192 1,920 — 9,012 Accounts payable 14,227 80,569 22,931 20,288 — 138,015 Intercompany payables 1,702,313 147,990 — — (1,850,303 ) (a) — Accrued payroll 7,498 95,373 4,579 39,947 — 147,397 Accrued vacation 5,086 67,198 15,767 34,226 — 122,277 Accrued interest 5,282 35 6 4,911 — 10,234 Accrued other 63,952 64,262 14,735 41,298 — 184,247 Income taxes payable 8,333 3,082 47 911 (606 ) (f) 11,767 Total Current Liabilities 1,846,745 561,742 98,153 210,656 (1,864,604 ) 852,692 Non-current operating lease liabilities 30,244 363,883 455,165 251,521 (286,910 ) (a) 813,903 Long-term debt, net of current portion 1,918,283 9,473 55,050 1,366,896 — 3,349,702 Non-current deferred tax liability — 100,310 1,359 55,718 (9,671 ) (e) 147,716 Other non-current liabilities 27,875 63,035 3,235 33,117 (24,707 ) (a) 102,555 Total Liabilities 3,823,147 1,098,443 612,962 1,917,908 (2,185,892 ) 5,266,568 Redeemable non-controlling interests — — — 17,432 826,990 (d) 844,422 Stockholders’ Equity: Common stock 0 — — — — 0 Capital in excess of par 988,333 — — — — 988,333 Retained earnings (accumulated deficit) (142,324 ) 1,613,283 (24,651 ) 45,806 (1,634,438 ) (c)(d) (142,324 ) Subsidiary investment — 3,242,935 352,064 460,757 (4,055,756 ) (b)(d) — Total Select Medical Corporation Stockholders’ Equity 846,009 4,856,218 327,413 506,563 (5,690,194 ) 846,009 Non-controlling interests — — — 5,484 144,457 (d) 149,941 Total Equity 846,009 4,856,218 327,413 512,047 (5,545,737 ) 995,950 Total Liabilities and Equity $ 4,669,156 $ 5,954,661 $ 940,375 $ 2,447,387 $ (6,904,639 ) $ 7,106,940 _______________________________________________________________________________ (a) Elimination of intercompany balances. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclassification of equity attributable to non-controlling interests. (e) Reclassification to report net non-current deferred tax liability in consolidation. (f) Reclassification to report prepaid income taxes and income taxes payable by tax jurisdiction in consolidation. Select Medical Corporation Condensed Consolidating Statement of Operations For the Three Months Ended June 30, 2019 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Net operating revenues $ — $ 734,359 $ 213,554 $ 413,451 $ — $ 1,361,364 Costs and expenses: Cost of services, exclusive of depreciation and amortization 796 629,118 182,105 338,131 — 1,150,150 General and administrative 31,865 (526 ) — — — 31,339 Depreciation and amortization 2,213 22,866 5,435 24,479 — 54,993 Total costs and expenses 34,874 651,458 187,540 362,610 — 1,236,482 Income (loss) from operations (34,874 ) 82,901 26,014 50,841 — 124,882 Other income and expense: Intercompany interest and royalty fees 4,705 (2,128 ) (2,204 ) (373 ) — — Intercompany management fees 57,738 (42,503 ) (15,235 ) — — — Equity in earnings of unconsolidated subsidiaries — 7,370 24 — — 7,394 Interest income (expense) (29,109 ) 8 (219 ) (22,144 ) — (51,464 ) Income (loss) before income taxes (1,540 ) 45,648 8,380 28,324 — 80,812 Income tax expense 1,140 13,021 138 6,527 — 20,826 Equity in earnings of consolidated subsidiaries 47,496 4,687 — — (52,183 ) (a) — Net income 44,816 37,314 8,242 21,797 (52,183 ) 59,986 Less: Net income attributable to non-controlling interests — — 3,555 11,615 — 15,170 Net income attributable to Select Medical Corporation $ 44,816 $ 37,314 $ 4,687 $ 10,182 $ (52,183 ) $ 44,816 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Operations For the Six Months Ended June 30, 2019 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Net operating revenues $ — $ 1,454,189 $ 422,034 $ 809,772 $ — $ 2,685,995 Costs and expenses: Cost of services, exclusive of depreciation and amortization 1,535 1,253,593 358,153 668,961 — 2,282,242 General and administrative 60,562 (546 ) — — — 60,016 Depreciation and amortization 4,444 43,400 9,904 49,383 — 107,131 Total costs and expenses 66,541 1,296,447 368,057 718,344 — 2,449,389 Income (loss) from operations (66,541 ) 157,742 53,977 91,428 — 236,606 Other income and expense: Intercompany interest and royalty fees 8,813 (3,230 ) (4,847 ) (736 ) — — Intercompany management fees 119,210 (91,273 ) (27,937 ) — — — Equity in earnings of unconsolidated subsidiaries — 11,713 47 — — 11,760 Non-operating gain — 6,532 — — — 6,532 Interest income (expense) (57,309 ) 128 (440 ) (44,654 ) — (102,275 ) Income before income taxes 4,173 81,612 20,800 46,038 — 152,623 Income tax expense 1,197 27,246 545 10,305 — 39,293 Equity in earnings of consolidated subsidiaries 82,674 11,898 — — (94,572 ) (a) — Net income 85,650 66,264 20,255 35,733 (94,572 ) 113,330 Less: Net income attributable to non-controlling interests — — 8,357 19,323 — 27,680 Net income attributable to Select Medical Corporation $ 85,650 $ 66,264 $ 11,898 $ 16,410 $ (94,572 ) $ 85,650 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Cash Flows For the Six Months Ended June 30, 2019 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Operating activities Net income $ 85,650 $ 66,264 $ 20,255 $ 35,733 $ (94,572 ) (a) $ 113,330 Adjustments to reconcile net income to net cash provided by operating activities: Distributions from unconsolidated subsidiaries — 11,140 8 — — 11,148 Depreciation and amortization 4,444 43,400 9,904 49,383 — 107,131 Provision for bad debts — 28 1,735 195 — 1,958 Equity in earnings of unconsolidated subsidiaries — (11,713 ) (47 ) — — (11,760 ) Equity in earnings of consolidated subsidiaries (82,674 ) (11,898 ) — — 94,572 (a) — Loss (gain) on sale of assets and businesses 300 (6,617 ) (37 ) — — (6,354 ) Stock compensation expense 11,079 — — 1,534 — 12,613 Amortization of debt discount, premium and issuance costs 3,226 — — 3,100 — 6,326 Deferred income taxes (2,338 ) (401 ) 366 (3,917 ) — (6,290 ) Changes in operating assets and liabilities, net of effects of business combinations: Accounts receivable — (47,838 ) (12,998 ) (25,037 ) — (85,873 ) Other current assets (10,868 ) 558 2,624 (1,550 ) — (9,236 ) Other assets (167 ) (1,019 ) (3,152 ) 3,734 (335 ) (b) (939 ) Accounts payable (46 ) 4,192 2,491 (3,967 ) — 2,670 Accrued expenses (8,649 ) 9,546 (773 ) (18,615 ) 335 (b) (18,156 ) Income taxes 18,425 491 (151 ) (2,419 ) — 16,346 Net cash provided by operating activities 18,382 56,133 20,225 38,174 — 132,914 Investing activities Business combinations, net of cash acquired — (61,861 ) (3,974 ) (20,227 ) — (86,062 ) Purchases of property and equipment (2,415 ) (36,648 ) (22,284 ) (27,938 ) — (89,285 ) Investment in businesses — (52,057 ) (200 ) — — (52,257 ) Proceeds from sale of assets and businesses — 88 37 — — 125 Net cash used in investing activities (2,415 ) (150,478 ) (26,421 ) (48,165 ) — (227,479 ) Financing activities Borrowings on revolving facilities 635,000 — — — — 635,000 Payments on revolving facilities (460,000 ) — — — — (460,000 ) Payments on term loans (98,807 ) — — (33,878 ) — (132,685 ) Borrowings of other debt 5,613 — 8,617 — — 14,230 Principal payments on other debt (6,103 ) (245 ) (3,818 ) (2,514 ) — (12,680 ) Dividends paid to Holdings (13,620 ) — — — — (13,620 ) Equity investment by Holdings 459 — — — — 459 Intercompany (80,684 ) 94,742 (14,058 ) — — — Increase in overdrafts 2,176 — — — — 2,176 Proceeds from issuance of non-controlling interests — — 18,288 — — 18,288 Distributions to and purchases of non-controlling interests — (150 ) (3,988 ) (3,607 ) — (7,745 ) Net cash provided by (used in) financing activities (15,966 ) 94,347 5,041 (39,999 ) — 43,423 Net increase (decrease) in cash and cash equivalents 1 2 (1,155 ) (49,990 ) — (51,142 ) Cash and cash equivalents at beginning of period 77 7,574 4,411 163,116 — 175,178 Cash and cash equivalents at end of period $ 78 $ 7,576 $ 3,256 $ 113,126 $ — $ 124,036 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. (b) Elimination of intercompany balances. Select Medical Corporation Condensed Consolidating Balance Sheet December 31, 2018 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) ASSETS Current Assets: Cash and cash equivalents $ 77 $ 7,574 $ 4,411 $ 163,116 $ — $ 175,178 Accounts receivable — 397,674 118,683 190,319 — 706,676 Intercompany receivables — 1,787,184 83,230 — (1,870,414 ) (a) — Prepaid income taxes 10,205 5,711 — 4,623 — 20,539 Other current assets 17,866 31,181 14,048 27,036 — 90,131 Total Current Assets 28,148 2,229,324 220,372 385,094 (1,870,414 ) 992,524 Property and equipment, net 30,103 625,947 103,006 220,754 — 979,810 Investment in affiliates 4,497,167 127,036 — — (4,624,203 ) (b)(c) — Goodwill — 2,104,288 — 1,216,438 — 3,320,726 Identifiable intangible assets, net 3 102,120 5,020 330,550 — 437,693 Other assets 37,281 145,467 33,417 26,032 (8,685 ) (e) 233,512 Total Assets $ 4,592,702 $ 5,334,182 $ 361,815 $ 2,178,868 $ (6,503,302 ) $ 5,964,265 LIABILITIES AND EQUITY Current Liabilities: Overdrafts $ 25,083 $ — $ — $ — $ — $ 25,083 Current portion of long-term debt and notes payable 4,363 248 2,001 37,253 — 43,865 Accounts payable 14,033 84,343 20,956 27,361 — 146,693 Intercompany payables 1,787,184 83,230 — — (1,870,414 ) (a) — Accrued payroll 15,533 99,803 5,936 51,114 — 172,386 Accrued vacation 4,613 60,989 13,942 31,116 — 110,660 Accrued interest 5,996 22 3 6,116 — 12,137 Accrued other 60,056 61,226 17,098 52,311 — 190,691 Income taxes payable — 2,366 190 1,115 — 3,671 Total Current Liabilities 1,916,861 392,227 60,126 206,386 (1,870,414 ) 705,186 Long-term debt, net of current portion 1,837,241 448 48,402 1,363,425 — 3,249,516 Non-current deferred tax liability — 101,214 994 60,372 (8,685 ) (e) 153,895 Other non-current liabilities 35,558 59,901 9,194 54,287 — 158,940 Total Liabilities 3,789,660 553,790 118,716 1,684,470 (1,879,099 ) 4,267,537 Redeemable non-controlling interests — — — 18,525 761,963 (d) 780,488 Stockholders’ Equity: Common stock 0 — — — — 0 Capital in excess of par 970,156 — — — — 970,156 Retained earnings (accumulated deficit) (167,114 ) 1,547,018 (29,553 ) 12,355 (1,529,820 ) (c)(d) (167,114 ) Subsidiary investment — 3,233,374 272,652 457,974 (3,964,000 ) (b)(d) — Total Select Medical Corporation Stockholders’ Equity 803,042 4,780,392 243,099 470,329 (5,493,820 ) 803,042 Non-controlling interests — — — 5,544 107,654 (d) 113,198 Total Equity 803,042 4,780,392 243,099 475,873 (5,386,166 ) 916,240 Total Liabilities and Equity $ 4,592,702 $ 5,334,182 $ 361,815 $ 2,178,868 $ (6,503,302 ) $ 5,964,265 _______________________________________________________________________________ (a) Elimination of intercompany balances. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclassification of equity attributable to non-controlling interests. (e) Reclassification to report net non-current deferred tax liability in consolidation. Select Medical Corporation Condensed Consolidating Statement of Operations For the Three Months Ended June 30, 2018 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Net operating revenues $ (17 ) $ 690,766 $ 192,638 $ 412,823 $ — $ 1,296,210 Costs and expenses: Cost of services, exclusive of depreciation and amortization 799 589,707 162,832 341,393 — 1,094,731 General and administrative 29,208 27 — (41 ) — 29,194 Depreciation and amortization 2,355 20,535 4,137 24,697 — 51,724 Total costs and expenses 32,362 610,269 166,969 366,049 — 1,175,649 Income (loss) from operations (32,379 ) 80,497 25,669 46,774 — 120,561 Other income and expense: Intercompany interest and royalty fees 7,553 (3,629 ) (3,609 ) (315 ) — — Intercompany management fees 55,416 (43,931 ) (11,485 ) — — — Equity in earnings of unconsolidated subsidiaries — 4,776 9 — — 4,785 Non-operating gain 1,654 4,824 — — — 6,478 Interest income (expense) (29,412 ) 188 (186 ) (20,749 ) — (50,159 ) Income before income taxes 2,832 42,725 10,398 25,710 — 81,665 Income tax expense 831 14,254 145 5,876 — 21,106 Equity in earnings of consolidated subsidiaries 44,510 6,840 — — (51,350 ) (a) — Net income 46,511 35,311 10,253 19,834 (51,350 ) 60,559 Less: Net income attributable to non-controlling interests — 12 3,413 10,623 — 14,048 Net income attributable to Select Medical Corporation $ 46,511 $ 35,299 $ 6,840 $ 9,211 $ (51,350 ) $ 46,511 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Operations For the Six Months Ended June 30, 2018 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Net operating revenues $ — $ 1,397,178 $ 383,057 $ 768,939 $ — $ 2,549,174 Costs and expenses: Cost of services, exclusive of depreciation and amortization 1,525 1,197,733 321,363 639,923 — 2,160,544 General and administrative 58,015 66 — 2,895 — 60,976 Depreciation and amortization 4,562 39,982 8,107 45,844 — 98,495 Total costs and expenses 64,102 1,237,781 329,470 688,662 — 2,320,015 Income (loss) from operations (64,102 ) 159,397 53,587 80,277 — 229,159 Other income and expense: Intercompany interest and royalty fees 15,672 (7,924 ) (7,240 ) (508 ) — — Intercompany management fees 116,148 (93,471 ) (22,677 ) — — — Loss on early retirement of debt (2,229 ) — — (8,026 ) — (10,255 ) Equity in earnings of unconsolidated subsidiaries — 9,460 22 — — 9,482 Non-operating gain 1,654 5,223 — — — 6,877 Interest income (expense) (60,483 ) 121 (337 ) (36,623 ) — (97,322 ) Income before income taxes 6,660 72,806 23,355 35,120 — 137,941 Income tax expense 1,345 26,189 238 5,628 — 33,400 Equity in earnings of consolidated subsidiaries 74,935 15,123 — — (90,058 ) (a) — Net income 80,250 61,740 23,117 29,492 (90,058 ) 104,541 Less: Net income attributable to non-controlling interests — 97 7,994 16,200 — 24,291 Net income attributable to Select Medical Corporation $ 80,250 $ 61,643 $ 15,123 $ 13,292 $ (90,058 ) $ 80,250 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Cash Flows For the Six Months Ended June 30, 2018 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Operating activities Net income $ 80,250 $ 61,740 $ 23,117 $ 29,492 $ (90,058 ) (a) $ 104,541 Adjustments to reconcile net income to net cash provided by operating activities: Distributions from unconsolidated subsidiaries — 7,800 30 — — 7,830 Depreciation and amortization 4,562 39,982 8,107 45,844 — 98,495 Provision for bad debts — 41 — 61 — 102 Equity in earnings of unconsolidated subsidiaries — (9,460 ) (22 ) — — (9,482 ) Equity in earnings of consolidated subsidiaries (74,935 ) (15,123 ) — — 90,058 (a) — Loss on extinguishment of debt 115 — — 369 — 484 Gain on sale of assets and businesses (1,642 ) (5,338 ) — — — (6,980 ) Stock compensation expense 9,562 — — 1,349 — 10,911 Amortization of debt discount, premium and issuance costs 3,553 — — 2,933 — 6,486 Deferred income taxes 664 1,056 40 (3,451 ) — (1,691 ) Changes in operating assets and liabilities, net of effects of business combinations: Accounts receivable — 9,838 (6,857 ) (8,755 ) — (5,774 ) Other current assets (876 ) 1,927 2,956 (7,018 ) — (3,011 ) Other assets 945 (9,261 ) 1,110 13,890 — 6,684 Accounts payable (1,470 ) (7,516 ) 1,864 1,660 — (5,462 ) Accrued expenses (15,020 ) 14,589 4,914 (3,276 ) — 1,207 Income taxes 14,757 4,401 1 (6,549 ) — 12,610 Net cash provided by operating activities 20,465 94,676 35,260 66,549 — 216,950 Investing activities Business combinations, net of cash acquired — (2,666 ) (22 ) (515,016 ) — (517,704 ) Purchases of property and equipment (5,232 ) (44,865 ) (14,809 ) (16,742 ) — (81,648 ) Investment in businesses — (3,286 ) — (5 ) — (3,291 ) Proceeds from sale of assets and businesses 1,655 5,017 — — — 6,672 Net cash used in investing activities (3,577 ) (45,800 ) (14,831 ) (531,763 ) — (595,971 ) Financing activities Borrowings on revolving facilities 265,000 — — — — 265,000 Payments on revolving facilities (345,000 ) — — — — (345,000 ) Proceeds from term loans (financing costs) (11 ) — — 779,915 — 779,904 Payments on term loans (5,750 ) — — — — (5,750 ) Revolving facility debt issuance costs (837 ) — — (496 ) — (1,333 ) Borrowings of other debt 5,549 — 9,820 4,559 — 19,928 Principal payments on other debt (5,987 ) (261 ) (2,400 ) (2,873 ) — (11,521 ) Dividends paid to Holdings (889 ) — — — — (889 ) Equity investment by Holdings 1,620 — — — — 1,620 Intercompany 90,589 (45,661 ) (27,290 ) (17,638 ) — — Decrease in overdrafts (6,171 ) — — — — (6,171 ) Proceeds from issuance of non-controlling interests — — 957 1,969 — 2,926 Distributions to non-controlling interests — (1,450 ) (1,681 ) (298,082 ) — (301,213 ) Net cash provided by (used in) financing activities (1,887 ) (47,372 ) (20,594 ) 467,354 — 397,501 Net increase (decrease) in cash and cash equivalents 15,001 1,504 (165 ) 2,140 — 18,480 Cash and cash equivalents at beginning of period 73 4,856 4,561 113,059 — 122,549 Cash and cash equivalents at end of period $ 15,074 $ 6,360 $ 4,396 $ 115,199 $ — $ 141,029 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingencies, at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Credit Risk Concentrations | Credit Risk Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash balances and trade receivables. The Company’s excess cash is held with large financial institutions. The Company grants unsecured credit to its patients, most of whom reside in the service area of the Company’s facilities and are insured under third-party payor agreements. The Company’s general policy is to verify insurance coverage prior to the date of admission for patients admitted to the Company’s critical illness recovery hospitals and rehabilitation hospitals. Within the Company’s outpatient rehabilitation clinics, the Company verifies insurance coverage prior to the patient’s visit. Within the Company’s Concentra centers, the Company verifies insurance coverage or receives authorization from the patient’s employer prior to the patient’s visit. 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. Approximately 16% of the Company’s accounts receivable is from Medicare at both December 31, 2018 , and June 30, 2019 |
Leases | Leases The Company evaluates whether a contract is or contains a lease at the inception of the contract. Upon lease commencement, the date on which a lessor makes the underlying asset available to the Company for use, the Company classifies the lease as either an operating or finance lease. Most of the Company’s facility and equipment leases are classified as operating leases. Balance Sheet For both operating and finance leases, the Company recognizes a right-of-use asset and lease liability at lease commencement. A right-of-use asset represents the Company’s right to use an underlying asset for the lease term while the lease liability represents an obligation to make lease payments arising from a lease which are measured on a discounted basis. The Company elected the short-term lease exemption for its equipment leases; accordingly, equipment leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. Lease liabilities are measured at the present value of the remaining, fixed lease payments at lease commencement. The Company primarily uses its incremental borrowing rate, based on the information available at lease commencement, in determining the present value of its remaining lease payments. The Company’s leases may also specify extension or termination clauses. These options are factored into the measurement of the lease liability when it is reasonably certain that the Company will exercise the option. Right-of-use assets are measured at an amount equal to the initial lease liability, plus any prepaid lease payments (less any incentives received, such as reimbursement for leasehold improvements) and initial direct costs, at the lease commencement date. The Company has elected to account for lease and non-lease components, such as common area maintenance, as a single lease component for its facility leases. As a result, the fixed payments that would otherwise be allocated to the non-lease components will be accounted for as lease payments and are included in the measurement of the Company’s right-of-use asset and lease liability. Statement of Operations For the Company’s operating leases, rent expense, a component of cost of services and general and administrative expenses on the consolidated statements of operations, is recognized on a straight-line basis over the lease term. The straight-line rent expense is reflective of the interest expense on the lease liability using the effective interest method and the amortization of the right-of-use asset. The Company may enter into arrangements to sublease portions of its facilities and the Company typically retains the obligation to the lessor under these arrangements. The Company’s subleases are classified as operating leases; accordingly, the Company continues to account for the original leases as it did prior to commencement of the sublease. Sublease income, a component of cost of services on the consolidated statements of operations, is recognized on a straight-line basis, as a reduction to rent expense, over the term of the sublease. For the Company’s finance leases, interest expense on the lease liability is recognized using the effective interest method. Amortization expense related to the right-of-use asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. The Company elected the short-term lease exemption for its equipment leases. For these leases, the Company recognizes lease payments on a straight-line basis over the lease term and variable lease payments are expensed as incurred. These expenses are included as components of cost of services on the consolidated statements of operations. The Company makes payments related to changes in indexes or rates after the lease commencement date. Additionally, the Company makes payments, which are not fixed at lease commencement, for property taxes, insurance, and common area maintenance related to its facility leases. These variable lease payments, which are expensed as incurred, are included as a component of cost of services and general and administrative expenses on the consolidated statements of operations. |
Recent and Recently Adopted Accounting Pronouncements | Recent Accounting Pronouncements Financial Instruments In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments . The current standard delays the recognition of a credit loss on a financial asset until the loss is probable of occurring. The new standard removes the requirement that a credit loss be probable of occurring for it to be recognized and requires entities to use historical experience, current conditions, and reasonable and supportable forecasts to estimate their future expected credit losses. The Company’s accounts receivable derived from contracts with customers will be subject to ASU 2016-13. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance must be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the earliest comparative period in the financial statements. Given the very high rate of collectability of the Company’s accounts receivable derived from contracts with customers, the Company believes that the impact of ASU 2016-13 is unlikely to be material. The Company’s implementation efforts are focused on the accounting processes, risk assessments, and control objectives associated with accounting for its financial instruments under the new standard. Recently Adopted Accounting Pronouncements Leases The Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases using a modified retrospective approach as of January 1, 2019, for leases which existed on that date. Prior comparative periods were not adjusted and continue to be reported in accordance with ASC Topic 840, Leases . The Company elected the package of practical expedients, which permitted the Company not to reassess under ASC Topic 842 the Company’s prior conclusions about lease identification, lease classification, and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to the Company. The adoption of the standard resulted in the recognition of operating lease right-of-use assets of $1,015.0 million and operating lease liabilities of $1,057.0 million at January 1, 2019. The difference between the operating lease right-of-use assets and operating lease liabilities resulted from the reclassification of prepaid rent, deferred rent, unamortized lease incentives, and acquired favorable and unfavorable leasehold interests upon adoption. The Company did not recognize a cumulative-effect adjustment to retained earnings upon adoption. |
Redeemable Non-Controlling Interests | Redeemable Non-Controlling Interests The ownership interests held by outside parties in subsidiaries, limited liability companies, and limited partnerships controlled by the Company are classified as non-controlling interests. Some of the Company’s non-controlling ownership interests consist of outside parties that have certain redemption rights that, if exercised, require the Company to purchase the parties’ ownership interests. These interests are classified and reported as redeemable non-controlling interests and have been adjusted to their approximate redemption values. |
Variable Interest Entities | Variable Interest Entities Concentra does not own many of its medical practices, as certain states prohibit the “corporate practice of medicine,” which restricts business corporations from practicing medicine through the direct employment of physicians or from exercising control over medical decisions by physicians. In these states, Concentra typically enters into long-term management agreements with professional corporations or associations that are owned by licensed physicians, which, in turn, employ or contract with physicians who provide professional medical services in its occupational health centers. The management agreements have terms that provide for Concentra to conduct, supervise, and manage the day-to-day non-medical operations of the occupational health centers and provide all management and administrative services. Concentra receives a management fee for these services, which is based, in part, on the performance of the professional corporation or association. Additionally, the outstanding voting equity interests of the professional corporations or associations are typically owned by licensed physicians appointed at Concentra’s discretion. Concentra has the ability to direct the transfer of ownership of the professional corporation or association to a new licensed physician at any time. |
Redeemable Non-Controlling In_2
Redeemable Non-Controlling Interests (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Schedule of redeemable non-controlling interests | The changes in redeemable non-controlling interests, which are the same for Holdings and Select, are as follows (in thousands): Balance as of December 31, 2017 $ 640,818 Net income attributable to redeemable non-controlling interests 5,743 Issuance and exchange of redeemable non-controlling interests 163,659 Distributions to and purchases of redeemable non-controlling interests (203,972 ) Redemption adjustment on redeemable non-controlling interests 1,051 Other 175 Balance as of March 31, 2018 $ 607,474 Net income attributable to redeemable non-controlling interests 10,909 Distributions to and purchases of redeemable non-controlling interests (11,112 ) Redemption adjustment on redeemable non-controlling interests 8,500 Other 461 Balance as of June 30, 2018 $ 616,232 Balance as of December 31, 2018 $ 780,488 Net income attributable to redeemable non-controlling interests 7,700 Distributions to and purchases of redeemable non-controlling interests (2,771 ) Redemption adjustment on redeemable non-controlling interests 47,470 Other 354 Balance as of March 31, 2019 $ 833,241 Net income attributable to redeemable non-controlling interests 11,507 Distributions to and purchases of redeemable non-controlling interests (395 ) Redemption adjustment on redeemable non-controlling interests (270 ) Other 339 Balance as of June 30, 2019 $ 844,422 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of reconciliation of fair value of identifiable net assets and goodwill to the consideration given for the acquired business | The following table reconciles the fair values of identifiable net assets and goodwill to the consideration given for the acquired business (in thousands): Accounts receivable $ 68,934 Other current assets 10,810 Property and equipment 69,712 Identifiable intangible assets 140,406 Other assets 25,435 Goodwill 540,067 Total assets 855,364 Accounts payable and other current liabilities 49,925 Deferred income taxes and other long-term liabilities 51,851 Total liabilities 101,776 Consideration given $ 753,588 |
Schedule of pro forma unaudited results of operations | The following pro forma unaudited results of operations have been prepared assuming the acquisition of U.S. HealthWorks occurred on January 1, 2017. These results are not necessarily indicative of the results of future operations nor of the results that would have occurred had the acquisition been consummated on the aforementioned date. For the three and six months ended June 30, 2019 , the Company’s results of operations include U.S. HealthWorks for the entire period and no pro forma adjustments were made. Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 (in thousands) Net operating revenues $ 1,296,210 $ 2,596,755 Net income attributable to the Company 48,563 82,365 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Lease Cost | As of June 30, 2019 , the weighted average remaining lease terms and discount rates were as follows: Weighted average remaining lease term (in years): Operating leases 8.1 Finance leases 34.8 Weighted average discount rate: Operating leases 5.9 % Finance leases 7.4 % For the three and six months ended June 30, 2019 , the Company’s total lease cost was as follows (in thousands): Three Months Ended June 30, 2019 Unrelated Parties Related Parties Total Operating lease cost $ 67,718 $ 1,342 $ 69,060 Finance lease cost: Amortization of right-of-use assets 90 — 90 Interest on lease liabilities 199 — 199 Short-term lease cost 592 — 592 Variable lease cost 8,755 85 8,840 Sublease income (2,442 ) — (2,442 ) Total lease cost $ 74,912 $ 1,427 $ 76,339 Six Months Ended June 30, 2019 Unrelated Parties Related Parties Total Operating lease cost $ 134,554 $ 2,684 $ 137,238 Finance lease cost: Amortization of right-of-use assets 126 — 126 Interest on lease liabilities 296 — 296 Short-term lease cost 1,184 — 1,184 Variable lease cost 20,591 241 20,832 Sublease income (4,930 ) — (4,930 ) Total lease cost $ 151,821 $ 2,925 $ 154,746 |
Supplemental Cash Flow Information | For the six months ended June 30, 2019 , supplemental cash flow information related to leases was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 136,300 Operating cash flows for finance leases 274 Financing cash flows for finance leases 142 Right-of-use assets obtained in exchange for lease liabilities: Operating leases (1) $ 1,123,793 Finance leases 9,102 _______________________________________________________________________________ (1) Includes the right-of-use assets obtained in exchange for lease liabilities of $1,057.0 million which were recognized upon adoption of ASC Topic 842 at January 1, 2019. |
Supplemental Balance Sheet Information | As of June 30, 2019 , supplemental balance sheet information related to leases was as follows (in thousands): Operating Leases Unrelated Parties Related Parties Total Operating lease right-of-use assets $ 951,993 $ 19,392 $ 971,385 Current operating lease liabilities $ 197,660 $ 4,824 $ 202,484 Non-current operating lease liabilities 796,240 17,663 813,903 Total operating lease liabilities $ 993,900 $ 22,487 $ 1,016,387 Finance Leases Unrelated Parties Related Parties Total Property and equipment, net $ 5,099 $ — $ 5,099 Current portion of long-term debt and notes payable $ 204 $ — $ 204 Long-term debt, net of current portion 13,185 — 13,185 Total finance lease liabilities $ 13,389 $ — $ 13,389 |
Maturities of Finance Lease Liabilities | As of June 30, 2019 , maturities of lease liabilities were approximately as follows (in thousands): Operating Leases Finance Leases Total 2019 (remainder of year) $ 132,470 $ 588 $ 133,058 2020 238,479 1,182 239,661 2021 200,677 1,193 201,870 2022 159,238 1,203 160,441 2023 118,365 1,214 119,579 Thereafter 516,615 31,630 548,245 Total undiscounted cash flows 1,365,844 37,010 1,402,854 Less: Imputed interest 349,457 23,621 373,078 Total discounted lease liabilities $ 1,016,387 $ 13,389 $ 1,029,776 |
Maturities of Operating Lease Liabilities | As of June 30, 2019 , maturities of lease liabilities were approximately as follows (in thousands): Operating Leases Finance Leases Total 2019 (remainder of year) $ 132,470 $ 588 $ 133,058 2020 238,479 1,182 239,661 2021 200,677 1,193 201,870 2022 159,238 1,203 160,441 2023 118,365 1,214 119,579 Thereafter 516,615 31,630 548,245 Total undiscounted cash flows 1,365,844 37,010 1,402,854 Less: Imputed interest 349,457 23,621 373,078 Total discounted lease liabilities $ 1,016,387 $ 13,389 $ 1,029,776 |
Maturities of Operating Lease Liabilities | As disclosed in the Company’s 2018 Annual Report on Form 10-K, the Company’s undiscounted future minimum lease obligations on long-term, non-cancelable operating leases with related and unrelated parties were approximately as follows as of December 31, 2018 (in thousands): Total 2019 $ 267,846 2020 231,711 2021 193,155 2022 150,155 2023 107,759 Thereafter 484,038 $ 1,434,664 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill | The following table shows changes in the carrying amounts of goodwill by reporting unit for the six months ended June 30, 2019 : Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Total (in thousands) Balance as of December 31, 2018 $ 1,045,220 $ 416,646 $ 642,422 $ 1,216,438 $ 3,320,726 Acquired 30,028 14,254 7,712 18,298 70,292 Sold — — (5,624 ) — (5,624 ) Balance as of June 30, 2019 $ 1,075,248 $ 430,900 $ 644,510 $ 1,234,736 $ 3,385,394 |
Schedule of carrying value and amortization of identifiable intangible assets | The following table provides the gross carrying amounts, accumulated amortization, and net carrying amounts for the Company’s identifiable intangible assets: December 31, 2018 June 30, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in thousands) Indefinite-lived intangible assets: Trademarks $ 166,698 $ — $ 166,698 $ 166,698 $ — $ 166,698 Certificates of need 19,174 — 19,174 17,080 — 17,080 Accreditations 1,857 — 1,857 1,857 — 1,857 Finite-lived intangible assets: Trademarks 5,000 (4,583 ) 417 5,000 (5,000 ) — Customer relationships 280,710 (61,900 ) 218,810 284,440 (74,516 ) 209,924 Favorable leasehold interests (1) 13,553 (6,064 ) 7,489 — — — Non-compete agreements 29,400 (6,152 ) 23,248 31,197 (7,421 ) 23,776 Total identifiable intangible assets $ 516,392 $ (78,699 ) $ 437,693 $ 506,272 $ (86,937 ) $ 419,335 _______________________________________________________________________________ (1) Favorable leasehold interests are a component of the operating lease right-of-use assets upon adoption of ASC Topic 842, Leases . |
Long-Term Debt and Notes Paya_2
Long-Term Debt and Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Company's long-term debt and notes payable | As of December 31, 2018 , the Company’s long-term debt and notes payable were as follows (in thousands): Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value Select: 6.375% senior notes $ 710,000 $ 550 $ (4,642 ) $ 705,908 $ 706,450 Credit facilities: Revolving facility 20,000 — — 20,000 18,400 Term loan 1,129,875 (9,690 ) (9,321 ) 1,110,864 1,076,206 Other 56,415 — (484 ) 55,931 55,931 Total Select debt 1,916,290 (9,140 ) (14,447 ) 1,892,703 1,856,987 Concentra: Credit facilities: Term loans 1,414,175 (2,765 ) (18,648 ) 1,392,762 1,357,802 Other debt, including finance leases 7,916 — — 7,916 7,916 Total Concentra debt 1,422,091 (2,765 ) (18,648 ) 1,400,678 1,365,718 Total debt $ 3,338,381 $ (11,905 ) $ (33,095 ) $ 3,293,381 $ 3,222,705 As of June 30, 2019 , the Company’s long-term debt and notes payable were as follows (in thousands): Principal Outstanding Unamortized Premium (Discount) Unamortized Issuance Costs Carrying Value Fair Value Select: 6.375% senior notes $ 710,000 $ 436 $ (3,689 ) $ 706,747 $ 710,852 Credit facilities: Revolving facility 195,000 — — 195,000 179,400 Term loan 1,031,068 (8,879 ) (8,458 ) 1,013,731 1,027,201 Other debt, including finance leases 74,864 — (444 ) 74,420 74,420 Total Select debt 2,010,932 (8,443 ) (12,591 ) 1,989,898 1,991,873 Concentra: Credit facilities: Term loans 1,380,297 (2,354 ) (15,648 ) 1,362,295 1,380,158 Other debt, including finance leases 6,521 — — 6,521 6,521 Total Concentra debt 1,386,818 (2,354 ) (15,648 ) 1,368,816 1,386,679 Total debt $ 3,397,750 $ (10,797 ) $ (28,239 ) $ 3,358,714 $ 3,378,552 |
Schedule of principal maturities of the Company's long-term debt and notes payable | Principal maturities of the Company’s long-term debt and notes payable were approximately as follows (in thousands): 2019 2020 2021 2022 2023 Thereafter Total Select: 6.375% senior notes $ — $ — $ 710,000 $ — $ — $ — $ 710,000 Credit facilities: Revolving facility — — — 195,000 — — 195,000 Term loan — — — — — 1,031,068 1,031,068 Other debt, including finance leases 5,595 3,003 1,814 23,036 38 41,378 74,864 Total Select debt 5,595 3,003 711,814 218,036 38 1,072,446 2,010,932 Concentra: Credit facilities: Term loans — — — 1,140,298 239,999 — 1,380,297 Other debt, including finance leases 807 1,194 330 358 363 3,469 6,521 Total Concentra debt 807 1,194 330 1,140,656 240,362 3,469 1,386,818 Total debt $ 6,402 $ 4,197 $ 712,144 $ 1,358,692 $ 240,400 $ 1,075,915 $ 3,397,750 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of selected financial data for the Company's reportable segments | The following tables summarize selected financial data for the Company’s reportable segments. Prior year results presented herein have been changed to conform to the current presentation. The segment results of Holdings are identical to those of Select. Three Months Ended June 30, Six Months Ended June 30, 2018 2019 2018 2019 (in thousands) Net operating revenues: Critical illness recovery hospital $ 442,452 $ 461,143 $ 907,128 $ 918,677 Rehabilitation hospital 144,779 160,374 288,087 314,932 Outpatient rehabilitation 253,914 261,891 498,145 508,796 Concentra 412,823 413,451 768,939 809,772 Other 42,242 64,505 86,875 133,818 Total Company $ 1,296,210 $ 1,361,364 $ 2,549,174 $ 2,685,995 Adjusted EBITDA: Critical illness recovery hospital $ 60,725 $ 64,138 $ 133,697 $ 137,136 Rehabilitation hospital 28,195 29,968 54,971 55,765 Outpatient rehabilitation 41,947 42,584 72,472 71,575 Concentra 72,568 76,087 130,365 142,345 Other (25,207 ) (26,544 ) (50,045 ) (50,471 ) Total Company $ 178,228 $ 186,233 $ 341,460 $ 356,350 Total assets: Critical illness recovery hospital $ 1,828,038 $ 2,119,574 $ 1,828,038 $ 2,119,574 Rehabilitation hospital 867,175 1,107,852 867,175 1,107,852 Outpatient rehabilitation 979,678 1,265,487 979,678 1,265,487 Concentra 2,174,931 2,447,387 2,174,931 2,447,387 Other 114,978 166,640 114,978 166,640 Total Company $ 5,964,800 $ 7,106,940 $ 5,964,800 $ 7,106,940 Purchases of property and equipment: Critical illness recovery hospital $ 12,849 $ 14,488 $ 23,321 $ 24,648 Rehabilitation hospital 8,080 5,356 20,997 18,539 Outpatient rehabilitation 8,018 6,705 15,356 15,745 Concentra 10,121 12,240 16,742 27,938 Other 2,963 1,423 5,232 2,415 Total Company $ 42,031 $ 40,212 $ 81,648 $ 89,285 |
Schedule of reconciliation of Adjusted EBITDA to income before income taxes | A reconciliation of Adjusted EBITDA to income before income taxes is as follows: Three Months Ended June 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 60,725 $ 28,195 $ 41,947 $ 72,568 $ (25,207 ) Depreciation and amortization (11,952 ) (6,015 ) (6,704 ) (24,697 ) (2,356 ) Stock compensation expense — — — (1,138 ) (4,846 ) U.S. HealthWorks acquisition costs — — — 41 — Income (loss) from operations $ 48,773 $ 22,180 $ 35,243 $ 46,774 $ (32,409 ) $ 120,561 Equity in earnings of unconsolidated subsidiaries 4,785 Non-operating gain 6,478 Interest expense (50,159 ) Income before income taxes $ 81,665 Three Months Ended June 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 64,138 $ 29,968 $ 42,584 $ 76,087 $ (26,544 ) Depreciation and amortization (14,495 ) (6,696 ) (6,991 ) (24,479 ) (2,332 ) Stock compensation expense — — — (767 ) (5,591 ) Income (loss) from operations $ 49,643 $ 23,272 $ 35,593 $ 50,841 $ (34,467 ) $ 124,882 Equity in earnings of unconsolidated subsidiaries 7,394 Interest expense (51,464 ) Income before income taxes $ 80,812 Six Months Ended June 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 133,697 $ 54,971 $ 72,472 $ 130,365 $ (50,045 ) Depreciation and amortization (23,010 ) (11,737 ) (13,341 ) (45,844 ) (4,563 ) Stock compensation expense — — — (1,349 ) (9,562 ) U.S. HealthWorks acquisition costs — — — (2,895 ) — Income (loss) from operations $ 110,687 $ 43,234 $ 59,131 $ 80,277 $ (64,170 ) $ 229,159 Loss on early retirement of debt (10,255 ) Equity in earnings of unconsolidated subsidiaries 9,482 Non-operating gain 6,877 Interest expense (97,322 ) Income before income taxes $ 137,941 Six Months Ended June 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Adjusted EBITDA $ 137,136 $ 55,765 $ 71,575 $ 142,345 $ (50,471 ) Depreciation and amortization (25,946 ) (13,098 ) (14,023 ) (49,383 ) (4,681 ) Stock compensation expense — — — (1,534 ) (11,079 ) Income (loss) from operations $ 111,190 $ 42,667 $ 57,552 $ 91,428 $ (66,231 ) $ 236,606 Equity in earnings of unconsolidated subsidiaries 11,760 Non-operating gain 6,532 Interest expense (102,275 ) Income before income taxes $ 152,623 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of net operating revenues by operating segment | The following tables disaggregate the Company’s net operating revenues for the three and six months ended June 30, 2018 and 2019 : Three Months Ended June 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 225,857 $ 73,054 $ 41,475 $ 517 $ — $ 340,903 Non-Medicare 213,083 62,387 194,611 409,922 — 880,003 Total patient services revenues 438,940 135,441 236,086 410,439 — 1,220,906 Other revenues (1) 3,512 9,338 17,828 2,384 42,242 75,304 Total net operating revenues $ 442,452 $ 144,779 $ 253,914 $ 412,823 $ 42,242 $ 1,296,210 Three Months Ended June 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 223,688 $ 77,260 $ 43,869 $ 474 $ — $ 345,291 Non-Medicare 234,616 73,972 198,241 410,277 — 917,106 Total patient services revenues 458,304 151,232 242,110 410,751 — 1,262,397 Other revenues 2,839 9,142 19,781 2,700 64,505 98,967 Total net operating revenues $ 461,143 $ 160,374 $ 261,891 $ 413,451 $ 64,505 $ 1,361,364 Six Months Ended June 30, 2018 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 466,849 $ 145,895 $ 79,665 $ 1,145 $ — $ 693,554 Non-Medicare 433,089 124,289 383,511 763,174 — 1,704,063 Total patient services revenues 899,938 270,184 463,176 764,319 — 2,397,617 Other revenues (1) 7,190 17,903 34,969 4,620 86,875 151,557 Total net operating revenues $ 907,128 $ 288,087 $ 498,145 $ 768,939 $ 86,875 $ 2,549,174 Six Months Ended June 30, 2019 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Rehabilitation Concentra Other Total (in thousands) Patient service revenues: Medicare $ 461,857 $ 151,839 $ 84,147 $ 1,029 $ — $ 698,872 Non-Medicare 451,575 144,614 386,155 803,513 — 1,785,857 Total patient services revenues 913,432 296,453 470,302 804,542 — 2,484,729 Other revenues 5,245 18,479 38,494 5,230 133,818 201,266 Total net operating revenues $ 918,677 $ 314,932 $ 508,796 $ 809,772 $ 133,818 $ 2,685,995 _______________________________________________________________________________ (1) For the three and six months ended June 30, 2018 , the financial results of the Company’s reportable segments have been changed to remove the net operating revenues associated with employee leasing services provided to the Company’s non-consolidating subsidiaries. These results are now reported as part of the Company’s other activities. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per share | The following table sets forth the net income attributable to the Company, its common shares outstanding, and its participating securities outstanding. Basic EPS Diluted EPS Three Months Ended June 30, Three Months Ended June 30, 2018 2019 2018 2019 (in thousands) Net income $ 60,559 $ 59,986 $ 60,559 $ 59,986 Less: net income attributable to non-controlling interests 14,048 15,170 14,048 15,170 Net income attributable to the Company 46,511 44,816 46,511 44,816 Less: net income attributable to participating securities 1,517 1,484 1,517 1,484 Net income attributable to common shares $ 44,994 $ 43,332 $ 44,994 $ 43,332 Basic EPS Diluted EPS Six Months Ended June 30, Six Months Ended June 30, 2018 2019 2018 2019 (in thousands) Net income $ 104,541 $ 113,330 $ 104,541 $ 113,330 Less: net income attributable to non-controlling interests 24,291 27,680 24,291 27,680 Net income attributable to the Company 80,250 85,650 80,250 85,650 Less: net income attributable to participating securities 2,630 2,827 2,628 2,826 Net income attributable to common shares $ 77,620 $ 82,823 $ 77,622 $ 82,824 The following tables set forth the computation of EPS under the two-class method: Three Months Ended June 30, 2018 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 44,994 129,830 $ 0.35 $ 44,994 129,924 $ 0.35 Participating securities 1,517 4,379 $ 0.35 1,517 4,379 $ 0.35 Total Company $ 46,511 $ 46,511 Three Months Ended June 30, 2019 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 43,332 130,525 $ 0.33 $ 43,332 130,562 $ 0.33 Participating securities 1,484 4,471 $ 0.33 1,484 4,471 $ 0.33 Total Company $ 44,816 $ 44,816 Six Months Ended June 30, 2018 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 77,620 129,761 $ 0.60 $ 77,622 129,871 $ 0.60 Participating securities 2,630 4,397 $ 0.60 2,628 4,397 $ 0.60 Total Company $ 80,250 $ 80,250 Six Months Ended June 30, 2019 Net Income Allocation Shares (1) Basic EPS Net Income Allocation Shares (1) Diluted EPS (in thousands, except for per share amounts) Common shares $ 82,823 130,672 $ 0.63 $ 82,824 130,711 $ 0.63 Participating securities 2,827 4,460 $ 0.63 2,826 4,460 $ 0.63 Total Company $ 85,650 $ 85,650 _______________________________________________________________________________ (1) Represents the weighted average share count outstanding during the period. |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Condensed Financial Statements, Captions [Line Items] | |
Schedule of Condensed Consolidating Balance Sheet | Select Medical Corporation Condensed Consolidating Balance Sheet June 30, 2019 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) ASSETS Current Assets: Cash and cash equivalents $ 78 $ 7,576 $ 3,256 $ 113,126 $ — $ 124,036 Accounts receivable — 445,484 129,946 216,339 — 791,769 Intercompany receivables — 1,702,313 147,990 — (1,850,303 ) (a) — Prepaid income taxes 142 5,936 8 6,838 (606 ) (f) 12,318 Other current assets 29,306 32,072 9,923 28,641 — 99,942 Total Current Assets 29,526 2,193,381 291,123 364,944 (1,850,909 ) 1,028,065 Operating lease right-of-use assets 33,568 441,710 513,796 307,623 (325,312 ) (a) 971,385 Property and equipment, net 28,578 658,686 114,256 207,035 — 1,008,555 Investment in affiliates 4,543,196 175,551 — — (4,718,747 ) (b)(c) — Goodwill — 2,150,658 — 1,234,736 — 3,385,394 Identifiable intangible assets, net 3 98,033 4,676 316,623 — 419,335 Other assets 34,285 236,642 16,524 16,426 (9,671 ) (e) 294,206 Total Assets $ 4,669,156 $ 5,954,661 $ 940,375 $ 2,447,387 $ (6,904,639 ) $ 7,106,940 LIABILITIES AND EQUITY Current Liabilities: Overdrafts $ 27,259 $ — $ — $ — $ — $ 27,259 Current operating lease liabilities 6,419 102,709 39,896 67,155 (13,695 ) (a) 202,484 Current portion of long-term debt and notes payable 6,376 524 192 1,920 — 9,012 Accounts payable 14,227 80,569 22,931 20,288 — 138,015 Intercompany payables 1,702,313 147,990 — — (1,850,303 ) (a) — Accrued payroll 7,498 95,373 4,579 39,947 — 147,397 Accrued vacation 5,086 67,198 15,767 34,226 — 122,277 Accrued interest 5,282 35 6 4,911 — 10,234 Accrued other 63,952 64,262 14,735 41,298 — 184,247 Income taxes payable 8,333 3,082 47 911 (606 ) (f) 11,767 Total Current Liabilities 1,846,745 561,742 98,153 210,656 (1,864,604 ) 852,692 Non-current operating lease liabilities 30,244 363,883 455,165 251,521 (286,910 ) (a) 813,903 Long-term debt, net of current portion 1,918,283 9,473 55,050 1,366,896 — 3,349,702 Non-current deferred tax liability — 100,310 1,359 55,718 (9,671 ) (e) 147,716 Other non-current liabilities 27,875 63,035 3,235 33,117 (24,707 ) (a) 102,555 Total Liabilities 3,823,147 1,098,443 612,962 1,917,908 (2,185,892 ) 5,266,568 Redeemable non-controlling interests — — — 17,432 826,990 (d) 844,422 Stockholders’ Equity: Common stock 0 — — — — 0 Capital in excess of par 988,333 — — — — 988,333 Retained earnings (accumulated deficit) (142,324 ) 1,613,283 (24,651 ) 45,806 (1,634,438 ) (c)(d) (142,324 ) Subsidiary investment — 3,242,935 352,064 460,757 (4,055,756 ) (b)(d) — Total Select Medical Corporation Stockholders’ Equity 846,009 4,856,218 327,413 506,563 (5,690,194 ) 846,009 Non-controlling interests — — — 5,484 144,457 (d) 149,941 Total Equity 846,009 4,856,218 327,413 512,047 (5,545,737 ) 995,950 Total Liabilities and Equity $ 4,669,156 $ 5,954,661 $ 940,375 $ 2,447,387 $ (6,904,639 ) $ 7,106,940 _______________________________________________________________________________ (a) Elimination of intercompany balances. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclassification of equity attributable to non-controlling interests. (e) Reclassification to report net non-current deferred tax liability in consolidation. (f) Reclassification to report prepaid income taxes and income taxes payable by tax jurisdiction in consolidation. Select Medical Corporation Condensed Consolidating Balance Sheet December 31, 2018 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) ASSETS Current Assets: Cash and cash equivalents $ 77 $ 7,574 $ 4,411 $ 163,116 $ — $ 175,178 Accounts receivable — 397,674 118,683 190,319 — 706,676 Intercompany receivables — 1,787,184 83,230 — (1,870,414 ) (a) — Prepaid income taxes 10,205 5,711 — 4,623 — 20,539 Other current assets 17,866 31,181 14,048 27,036 — 90,131 Total Current Assets 28,148 2,229,324 220,372 385,094 (1,870,414 ) 992,524 Property and equipment, net 30,103 625,947 103,006 220,754 — 979,810 Investment in affiliates 4,497,167 127,036 — — (4,624,203 ) (b)(c) — Goodwill — 2,104,288 — 1,216,438 — 3,320,726 Identifiable intangible assets, net 3 102,120 5,020 330,550 — 437,693 Other assets 37,281 145,467 33,417 26,032 (8,685 ) (e) 233,512 Total Assets $ 4,592,702 $ 5,334,182 $ 361,815 $ 2,178,868 $ (6,503,302 ) $ 5,964,265 LIABILITIES AND EQUITY Current Liabilities: Overdrafts $ 25,083 $ — $ — $ — $ — $ 25,083 Current portion of long-term debt and notes payable 4,363 248 2,001 37,253 — 43,865 Accounts payable 14,033 84,343 20,956 27,361 — 146,693 Intercompany payables 1,787,184 83,230 — — (1,870,414 ) (a) — Accrued payroll 15,533 99,803 5,936 51,114 — 172,386 Accrued vacation 4,613 60,989 13,942 31,116 — 110,660 Accrued interest 5,996 22 3 6,116 — 12,137 Accrued other 60,056 61,226 17,098 52,311 — 190,691 Income taxes payable — 2,366 190 1,115 — 3,671 Total Current Liabilities 1,916,861 392,227 60,126 206,386 (1,870,414 ) 705,186 Long-term debt, net of current portion 1,837,241 448 48,402 1,363,425 — 3,249,516 Non-current deferred tax liability — 101,214 994 60,372 (8,685 ) (e) 153,895 Other non-current liabilities 35,558 59,901 9,194 54,287 — 158,940 Total Liabilities 3,789,660 553,790 118,716 1,684,470 (1,879,099 ) 4,267,537 Redeemable non-controlling interests — — — 18,525 761,963 (d) 780,488 Stockholders’ Equity: Common stock 0 — — — — 0 Capital in excess of par 970,156 — — — — 970,156 Retained earnings (accumulated deficit) (167,114 ) 1,547,018 (29,553 ) 12,355 (1,529,820 ) (c)(d) (167,114 ) Subsidiary investment — 3,233,374 272,652 457,974 (3,964,000 ) (b)(d) — Total Select Medical Corporation Stockholders’ Equity 803,042 4,780,392 243,099 470,329 (5,493,820 ) 803,042 Non-controlling interests — — — 5,544 107,654 (d) 113,198 Total Equity 803,042 4,780,392 243,099 475,873 (5,386,166 ) 916,240 Total Liabilities and Equity $ 4,592,702 $ 5,334,182 $ 361,815 $ 2,178,868 $ (6,503,302 ) $ 5,964,265 _______________________________________________________________________________ (a) Elimination of intercompany balances. (b) Elimination of investments in consolidated subsidiaries. (c) Elimination of investments in consolidated subsidiaries’ earnings. (d) Reclassification of equity attributable to non-controlling interests. (e) Reclassification to report net non-current deferred tax liability in consolidation. |
Schedule of Condensed Consolidating Statement of Operations | Select Medical Corporation Condensed Consolidating Statement of Operations For the Three Months Ended June 30, 2018 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Net operating revenues $ (17 ) $ 690,766 $ 192,638 $ 412,823 $ — $ 1,296,210 Costs and expenses: Cost of services, exclusive of depreciation and amortization 799 589,707 162,832 341,393 — 1,094,731 General and administrative 29,208 27 — (41 ) — 29,194 Depreciation and amortization 2,355 20,535 4,137 24,697 — 51,724 Total costs and expenses 32,362 610,269 166,969 366,049 — 1,175,649 Income (loss) from operations (32,379 ) 80,497 25,669 46,774 — 120,561 Other income and expense: Intercompany interest and royalty fees 7,553 (3,629 ) (3,609 ) (315 ) — — Intercompany management fees 55,416 (43,931 ) (11,485 ) — — — Equity in earnings of unconsolidated subsidiaries — 4,776 9 — — 4,785 Non-operating gain 1,654 4,824 — — — 6,478 Interest income (expense) (29,412 ) 188 (186 ) (20,749 ) — (50,159 ) Income before income taxes 2,832 42,725 10,398 25,710 — 81,665 Income tax expense 831 14,254 145 5,876 — 21,106 Equity in earnings of consolidated subsidiaries 44,510 6,840 — — (51,350 ) (a) — Net income 46,511 35,311 10,253 19,834 (51,350 ) 60,559 Less: Net income attributable to non-controlling interests — 12 3,413 10,623 — 14,048 Net income attributable to Select Medical Corporation $ 46,511 $ 35,299 $ 6,840 $ 9,211 $ (51,350 ) $ 46,511 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Operations For the Six Months Ended June 30, 2018 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Net operating revenues $ — $ 1,397,178 $ 383,057 $ 768,939 $ — $ 2,549,174 Costs and expenses: Cost of services, exclusive of depreciation and amortization 1,525 1,197,733 321,363 639,923 — 2,160,544 General and administrative 58,015 66 — 2,895 — 60,976 Depreciation and amortization 4,562 39,982 8,107 45,844 — 98,495 Total costs and expenses 64,102 1,237,781 329,470 688,662 — 2,320,015 Income (loss) from operations (64,102 ) 159,397 53,587 80,277 — 229,159 Other income and expense: Intercompany interest and royalty fees 15,672 (7,924 ) (7,240 ) (508 ) — — Intercompany management fees 116,148 (93,471 ) (22,677 ) — — — Loss on early retirement of debt (2,229 ) — — (8,026 ) — (10,255 ) Equity in earnings of unconsolidated subsidiaries — 9,460 22 — — 9,482 Non-operating gain 1,654 5,223 — — — 6,877 Interest income (expense) (60,483 ) 121 (337 ) (36,623 ) — (97,322 ) Income before income taxes 6,660 72,806 23,355 35,120 — 137,941 Income tax expense 1,345 26,189 238 5,628 — 33,400 Equity in earnings of consolidated subsidiaries 74,935 15,123 — — (90,058 ) (a) — Net income 80,250 61,740 23,117 29,492 (90,058 ) 104,541 Less: Net income attributable to non-controlling interests — 97 7,994 16,200 — 24,291 Net income attributable to Select Medical Corporation $ 80,250 $ 61,643 $ 15,123 $ 13,292 $ (90,058 ) $ 80,250 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Operations For the Three Months Ended June 30, 2019 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Net operating revenues $ — $ 734,359 $ 213,554 $ 413,451 $ — $ 1,361,364 Costs and expenses: Cost of services, exclusive of depreciation and amortization 796 629,118 182,105 338,131 — 1,150,150 General and administrative 31,865 (526 ) — — — 31,339 Depreciation and amortization 2,213 22,866 5,435 24,479 — 54,993 Total costs and expenses 34,874 651,458 187,540 362,610 — 1,236,482 Income (loss) from operations (34,874 ) 82,901 26,014 50,841 — 124,882 Other income and expense: Intercompany interest and royalty fees 4,705 (2,128 ) (2,204 ) (373 ) — — Intercompany management fees 57,738 (42,503 ) (15,235 ) — — — Equity in earnings of unconsolidated subsidiaries — 7,370 24 — — 7,394 Interest income (expense) (29,109 ) 8 (219 ) (22,144 ) — (51,464 ) Income (loss) before income taxes (1,540 ) 45,648 8,380 28,324 — 80,812 Income tax expense 1,140 13,021 138 6,527 — 20,826 Equity in earnings of consolidated subsidiaries 47,496 4,687 — — (52,183 ) (a) — Net income 44,816 37,314 8,242 21,797 (52,183 ) 59,986 Less: Net income attributable to non-controlling interests — — 3,555 11,615 — 15,170 Net income attributable to Select Medical Corporation $ 44,816 $ 37,314 $ 4,687 $ 10,182 $ (52,183 ) $ 44,816 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. Select Medical Corporation Condensed Consolidating Statement of Operations For the Six Months Ended June 30, 2019 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Net operating revenues $ — $ 1,454,189 $ 422,034 $ 809,772 $ — $ 2,685,995 Costs and expenses: Cost of services, exclusive of depreciation and amortization 1,535 1,253,593 358,153 668,961 — 2,282,242 General and administrative 60,562 (546 ) — — — 60,016 Depreciation and amortization 4,444 43,400 9,904 49,383 — 107,131 Total costs and expenses 66,541 1,296,447 368,057 718,344 — 2,449,389 Income (loss) from operations (66,541 ) 157,742 53,977 91,428 — 236,606 Other income and expense: Intercompany interest and royalty fees 8,813 (3,230 ) (4,847 ) (736 ) — — Intercompany management fees 119,210 (91,273 ) (27,937 ) — — — Equity in earnings of unconsolidated subsidiaries — 11,713 47 — — 11,760 Non-operating gain — 6,532 — — — 6,532 Interest income (expense) (57,309 ) 128 (440 ) (44,654 ) — (102,275 ) Income before income taxes 4,173 81,612 20,800 46,038 — 152,623 Income tax expense 1,197 27,246 545 10,305 — 39,293 Equity in earnings of consolidated subsidiaries 82,674 11,898 — — (94,572 ) (a) — Net income 85,650 66,264 20,255 35,733 (94,572 ) 113,330 Less: Net income attributable to non-controlling interests — — 8,357 19,323 — 27,680 Net income attributable to Select Medical Corporation $ 85,650 $ 66,264 $ 11,898 $ 16,410 $ (94,572 ) $ 85,650 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. |
Schedule of Condensed Consolidating Statement of Cash Flows | Select Medical Corporation Condensed Consolidating Statement of Cash Flows For the Six Months Ended June 30, 2019 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Operating activities Net income $ 85,650 $ 66,264 $ 20,255 $ 35,733 $ (94,572 ) (a) $ 113,330 Adjustments to reconcile net income to net cash provided by operating activities: Distributions from unconsolidated subsidiaries — 11,140 8 — — 11,148 Depreciation and amortization 4,444 43,400 9,904 49,383 — 107,131 Provision for bad debts — 28 1,735 195 — 1,958 Equity in earnings of unconsolidated subsidiaries — (11,713 ) (47 ) — — (11,760 ) Equity in earnings of consolidated subsidiaries (82,674 ) (11,898 ) — — 94,572 (a) — Loss (gain) on sale of assets and businesses 300 (6,617 ) (37 ) — — (6,354 ) Stock compensation expense 11,079 — — 1,534 — 12,613 Amortization of debt discount, premium and issuance costs 3,226 — — 3,100 — 6,326 Deferred income taxes (2,338 ) (401 ) 366 (3,917 ) — (6,290 ) Changes in operating assets and liabilities, net of effects of business combinations: Accounts receivable — (47,838 ) (12,998 ) (25,037 ) — (85,873 ) Other current assets (10,868 ) 558 2,624 (1,550 ) — (9,236 ) Other assets (167 ) (1,019 ) (3,152 ) 3,734 (335 ) (b) (939 ) Accounts payable (46 ) 4,192 2,491 (3,967 ) — 2,670 Accrued expenses (8,649 ) 9,546 (773 ) (18,615 ) 335 (b) (18,156 ) Income taxes 18,425 491 (151 ) (2,419 ) — 16,346 Net cash provided by operating activities 18,382 56,133 20,225 38,174 — 132,914 Investing activities Business combinations, net of cash acquired — (61,861 ) (3,974 ) (20,227 ) — (86,062 ) Purchases of property and equipment (2,415 ) (36,648 ) (22,284 ) (27,938 ) — (89,285 ) Investment in businesses — (52,057 ) (200 ) — — (52,257 ) Proceeds from sale of assets and businesses — 88 37 — — 125 Net cash used in investing activities (2,415 ) (150,478 ) (26,421 ) (48,165 ) — (227,479 ) Financing activities Borrowings on revolving facilities 635,000 — — — — 635,000 Payments on revolving facilities (460,000 ) — — — — (460,000 ) Payments on term loans (98,807 ) — — (33,878 ) — (132,685 ) Borrowings of other debt 5,613 — 8,617 — — 14,230 Principal payments on other debt (6,103 ) (245 ) (3,818 ) (2,514 ) — (12,680 ) Dividends paid to Holdings (13,620 ) — — — — (13,620 ) Equity investment by Holdings 459 — — — — 459 Intercompany (80,684 ) 94,742 (14,058 ) — — — Increase in overdrafts 2,176 — — — — 2,176 Proceeds from issuance of non-controlling interests — — 18,288 — — 18,288 Distributions to and purchases of non-controlling interests — (150 ) (3,988 ) (3,607 ) — (7,745 ) Net cash provided by (used in) financing activities (15,966 ) 94,347 5,041 (39,999 ) — 43,423 Net increase (decrease) in cash and cash equivalents 1 2 (1,155 ) (49,990 ) — (51,142 ) Cash and cash equivalents at beginning of period 77 7,574 4,411 163,116 — 175,178 Cash and cash equivalents at end of period $ 78 $ 7,576 $ 3,256 $ 113,126 $ — $ 124,036 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. (b) Elimination of intercompany balances. Select Medical Corporation Condensed Consolidating Statement of Cash Flows For the Six Months Ended June 30, 2018 (unaudited) Select (Parent Company Only) Subsidiary Guarantors Non-Guarantor Subsidiaries Non-Guarantor Concentra Consolidating and Eliminating Adjustments Consolidated Select Medical Corporation (in thousands) Operating activities Net income $ 80,250 $ 61,740 $ 23,117 $ 29,492 $ (90,058 ) (a) $ 104,541 Adjustments to reconcile net income to net cash provided by operating activities: Distributions from unconsolidated subsidiaries — 7,800 30 — — 7,830 Depreciation and amortization 4,562 39,982 8,107 45,844 — 98,495 Provision for bad debts — 41 — 61 — 102 Equity in earnings of unconsolidated subsidiaries — (9,460 ) (22 ) — — (9,482 ) Equity in earnings of consolidated subsidiaries (74,935 ) (15,123 ) — — 90,058 (a) — Loss on extinguishment of debt 115 — — 369 — 484 Gain on sale of assets and businesses (1,642 ) (5,338 ) — — — (6,980 ) Stock compensation expense 9,562 — — 1,349 — 10,911 Amortization of debt discount, premium and issuance costs 3,553 — — 2,933 — 6,486 Deferred income taxes 664 1,056 40 (3,451 ) — (1,691 ) Changes in operating assets and liabilities, net of effects of business combinations: Accounts receivable — 9,838 (6,857 ) (8,755 ) — (5,774 ) Other current assets (876 ) 1,927 2,956 (7,018 ) — (3,011 ) Other assets 945 (9,261 ) 1,110 13,890 — 6,684 Accounts payable (1,470 ) (7,516 ) 1,864 1,660 — (5,462 ) Accrued expenses (15,020 ) 14,589 4,914 (3,276 ) — 1,207 Income taxes 14,757 4,401 1 (6,549 ) — 12,610 Net cash provided by operating activities 20,465 94,676 35,260 66,549 — 216,950 Investing activities Business combinations, net of cash acquired — (2,666 ) (22 ) (515,016 ) — (517,704 ) Purchases of property and equipment (5,232 ) (44,865 ) (14,809 ) (16,742 ) — (81,648 ) Investment in businesses — (3,286 ) — (5 ) — (3,291 ) Proceeds from sale of assets and businesses 1,655 5,017 — — — 6,672 Net cash used in investing activities (3,577 ) (45,800 ) (14,831 ) (531,763 ) — (595,971 ) Financing activities Borrowings on revolving facilities 265,000 — — — — 265,000 Payments on revolving facilities (345,000 ) — — — — (345,000 ) Proceeds from term loans (financing costs) (11 ) — — 779,915 — 779,904 Payments on term loans (5,750 ) — — — — (5,750 ) Revolving facility debt issuance costs (837 ) — — (496 ) — (1,333 ) Borrowings of other debt 5,549 — 9,820 4,559 — 19,928 Principal payments on other debt (5,987 ) (261 ) (2,400 ) (2,873 ) — (11,521 ) Dividends paid to Holdings (889 ) — — — — (889 ) Equity investment by Holdings 1,620 — — — — 1,620 Intercompany 90,589 (45,661 ) (27,290 ) (17,638 ) — — Decrease in overdrafts (6,171 ) — — — — (6,171 ) Proceeds from issuance of non-controlling interests — — 957 1,969 — 2,926 Distributions to non-controlling interests — (1,450 ) (1,681 ) (298,082 ) — (301,213 ) Net cash provided by (used in) financing activities (1,887 ) (47,372 ) (20,594 ) 467,354 — 397,501 Net increase (decrease) in cash and cash equivalents 15,001 1,504 (165 ) 2,140 — 18,480 Cash and cash equivalents at beginning of period 73 4,856 4,561 113,059 — 122,549 Cash and cash equivalents at end of period $ 15,074 $ 6,360 $ 4,396 $ 115,199 $ — $ 141,029 _______________________________________________________________________________ (a) Elimination of equity in earnings of consolidated subsidiaries. |
Accounting Policies (Details)
Accounting Policies (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 971,385 | ||
Operating lease liability | $ 1,016,387 | ||
Third-Party Payor Risk | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Percentage of concentration risk | 16.00% | 16.00% | |
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 1,015,000 | ||
Operating lease liability | $ 1,057,000 |
Redeemable Non-Controlling In_3
Redeemable Non-Controlling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Balance, beginning | $ 833,241 | $ 780,488 | $ 607,474 | $ 640,818 |
Net income attributable to redeemable non-controlling interests | 11,507 | 7,700 | 10,909 | 5,743 |
Issuance and exchange of redeemable non-controlling interests | 163,659 | |||
Distributions to and purchases of redeemable non-controlling interests | (395) | (2,771) | (11,112) | (203,972) |
Redemption adjustment on redeemable non-controlling interests | (270) | 47,470 | 8,500 | 1,051 |
Other | 339 | 354 | 461 | 175 |
Balance, ending | $ 844,422 | $ 833,241 | $ 616,232 | $ 607,474 |
Acquisitions - U.S. HealthWorks
Acquisitions - U.S. HealthWorks Acquisition (Details) - USD ($) $ in Thousands | Feb. 01, 2018 | Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | Dec. 31, 2018 |
Acquisitions | |||||
Non-cash equity exchange for acquisition of U.S. HealthWorks | $ 238,000 | $ 238,000 | $ 0 | ||
Consideration given for the acquired business | |||||
Goodwill | $ 3,385,394 | $ 3,320,726 | |||
U.S. HealthWorks | |||||
Acquisitions | |||||
Total consideration (net of cash acquired) | $ 753,600 | ||||
Net revenues of acquiree | $ 139,400 | $ 229,400 | |||
Consideration given for the acquired business | |||||
Accounts receivable | 68,934 | ||||
Other current assets | 10,810 | ||||
Property and equipment | 69,712 | ||||
Identifiable intangible assets | 140,406 | ||||
Other assets | 25,435 | ||||
Goodwill | 540,067 | ||||
Total assets | 855,364 | ||||
Accounts payable and other current liabilities | 49,925 | ||||
Deferred income taxes and other long-term liabilities | 51,851 | ||||
Total liabilities | 101,776 | ||||
Consideration given | $ 753,588 | ||||
Concentra Group Holdings Parent, LLC | U.S. HealthWorks | |||||
Acquisitions | |||||
Equity interest issued (percent) | 20.00% | ||||
Non-cash equity exchange for acquisition of U.S. HealthWorks | $ 238,000 |
Acquisitions - Pro Forma Result
Acquisitions - Pro Forma Results (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Pro forma results of operations | ||
Net operating revenues | $ 1,296,210 | $ 2,596,755 |
Net income attributable to the Company | $ 48,563 | 82,365 |
U.S. HealthWorks | ||
Acquisition costs | ||
U.S. HealthWorks acquisition costs | $ (2,900) |
Sale of Businesses (Details)
Sale of Businesses (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2019USD ($)clinic | Jun. 30, 2018USD ($)clinic | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gain on disposal | $ | $ 6.5 | $ 6.9 |
Outpatient Rehabilitation | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of outpatient rehabilitation clinics sold | clinic | 22 | 26 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Variable interest entity, assets | $ 193.2 | $ 166.2 |
Variable interest entity, liabilities | $ 191.6 | $ 164.4 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 6 Months Ended |
Jun. 30, 2019renewal_option | |
Critical Illness Recovery Hospital | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Number of renewal options | 2 |
Lease renewal option term | 5 years |
Rehabilitation Hospital | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Number of renewal options | 2 |
Lease renewal option term | 5 years |
Outpatient Rehabilitation | |
Lessee, Lease, Description [Line Items] | |
Lease term | 5 years |
Number of renewal options | 2 |
Outpatient Rehabilitation | Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease renewal option term | 3 years |
Outpatient Rehabilitation | Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease renewal option term | 5 years |
Concentra | |
Lessee, Lease, Description [Line Items] | |
Lease term | 10 years |
Number of renewal options | 2 |
Lease renewal option term | 5 years |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 69,060 | $ 137,238 |
Finance lease cost: | ||
Amortization of right-of-use assets | 90 | 126 |
Interest on lease liabilities | 199 | 296 |
Short-term lease cost | 592 | 1,184 |
Variable lease cost | 8,840 | 20,832 |
Sublease income | (2,442) | (4,930) |
Total lease cost | 76,339 | 154,746 |
Unrelated Parties | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 67,718 | 134,554 |
Finance lease cost: | ||
Amortization of right-of-use assets | 90 | 126 |
Interest on lease liabilities | 199 | 296 |
Short-term lease cost | 592 | 1,184 |
Variable lease cost | 8,755 | 20,591 |
Sublease income | (2,442) | (4,930) |
Total lease cost | 74,912 | 151,821 |
Related Parties | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 1,342 | 2,684 |
Finance lease cost: | ||
Amortization of right-of-use assets | 0 | 0 |
Interest on lease liabilities | 0 | 0 |
Short-term lease cost | 0 | 0 |
Variable lease cost | 85 | 241 |
Sublease income | 0 | 0 |
Total lease cost | $ 1,427 | $ 2,925 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jun. 30, 2019 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows for operating leases | $ 136,300 | |
Operating cash flows for finance leases | 274 | |
Financing cash flows for finance leases | 142 | |
Right-of-use assets obtained in exchange for lease liabilities: | ||
Operating leases | 1,123,793 | |
Finance leases | $ 9,102 | |
Accounting Standards Update 2016-02 | ||
Right-of-use assets obtained in exchange for lease liabilities: | ||
Operating leases | $ 1,057,000 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
Operating lease right-of-use assets | $ 971,385 |
Current operating lease liabilities | 202,484 |
Non-current operating lease liabilities | 813,903 |
Total operating lease liabilities | 1,016,387 |
Finance Leases | |
Property and equipment, net | 5,099 |
Current portion of long-term debt and notes payable | 204 |
Long-term debt, net of current portion | 13,185 |
Total finance lease liabilities | 13,389 |
Unrelated Parties | |
Operating Leases | |
Operating lease right-of-use assets | 951,993 |
Current operating lease liabilities | 197,660 |
Non-current operating lease liabilities | 796,240 |
Total operating lease liabilities | 993,900 |
Finance Leases | |
Property and equipment, net | 5,099 |
Current portion of long-term debt and notes payable | 204 |
Long-term debt, net of current portion | 13,185 |
Total finance lease liabilities | 13,389 |
Related Parties | |
Operating Leases | |
Operating lease right-of-use assets | 19,392 |
Current operating lease liabilities | 4,824 |
Non-current operating lease liabilities | 17,663 |
Total operating lease liabilities | 22,487 |
Finance Leases | |
Property and equipment, net | 0 |
Current portion of long-term debt and notes payable | 0 |
Long-term debt, net of current portion | 0 |
Total finance lease liabilities | $ 0 |
Leases - Weighted Average Lease
Leases - Weighted Average Lease Terms and Discount Rates (Details) | Jun. 30, 2019 |
Weighted average remaining lease term (in years): | |
Operating leases | 8 years 1 month 6 days |
Finance leases | 34 years 9 months 18 days |
Weighted average discount rate: | |
Operating leases | 5.90% |
Finance leases | 7.40% |
Leases - Maturities of Operatin
Leases - Maturities of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Operating Leases | ||
2019 (remainder of year) | $ 132,470 | |
2020 | 238,479 | |
2021 | 200,677 | |
2022 | 159,238 | |
2023 | 118,365 | |
Thereafter | 516,615 | |
Total undiscounted cash flows | 1,365,844 | |
Less: Imputed interest | 349,457 | |
Total operating lease liabilities | 1,016,387 | |
Finance Leases | ||
2019 (remainder of year) | 588 | |
2020 | 1,182 | |
2021 | 1,193 | |
2022 | 1,203 | |
2023 | 1,214 | |
Thereafter | 31,630 | |
Total undiscounted cash flows | 37,010 | |
Less: Imputed interest | 23,621 | |
Total finance lease liabilities | 13,389 | |
Total | ||
2019 (remainder of year) | 133,058 | |
2020 | 239,661 | |
2021 | 201,870 | |
2022 | 160,441 | |
2023 | 119,579 | |
Thereafter | 548,245 | |
Total undiscounted cash flows | 1,402,854 | |
Less: Imputed interest | 373,078 | |
Total operating lease liabilities | $ 1,029,776 | |
Operating Leases | ||
2019 | $ 267,846 | |
2020 | 231,711 | |
2021 | 193,155 | |
2022 | 150,155 | |
2023 | 107,759 | |
Thereafter | 484,038 | |
Total | $ 1,434,664 |
Intangible Assets - Carrying Am
Intangible Assets - Carrying Amount of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Goodwill | |
December 31, 2018 | $ 3,320,726 |
Acquired | 70,292 |
Sold | (5,624) |
June 30, 2019 | 3,385,394 |
Critical Illness Recovery Hospital | |
Goodwill | |
December 31, 2018 | 1,045,220 |
Acquired | 30,028 |
Sold | 0 |
June 30, 2019 | 1,075,248 |
Rehabilitation Hospital | |
Goodwill | |
December 31, 2018 | 416,646 |
Acquired | 14,254 |
Sold | 0 |
June 30, 2019 | 430,900 |
Outpatient Rehabilitation | |
Goodwill | |
December 31, 2018 | 642,422 |
Acquired | 7,712 |
Sold | (5,624) |
June 30, 2019 | 644,510 |
Concentra | |
Goodwill | |
December 31, 2018 | 1,216,438 |
Acquired | 18,298 |
Sold | 0 |
June 30, 2019 | $ 1,234,736 |
Intangible Assets - Carrying Va
Intangible Assets - Carrying Value and Amortization of Identifiable Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Total identifiable intangible assets, gross carrying amount | $ 506,272 | $ 506,272 | $ 516,392 | ||
Finite-lived intangible assets, accumulated amortization | (86,937) | (86,937) | (78,699) | ||
Total identifiable intangible assets, net carrying amount | 419,335 | 419,335 | 437,693 | ||
Amortized intangible assets: | |||||
Amortization expense | 8,900 | $ 7,800 | 16,000 | $ 14,200 | |
Trademarks | |||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Finite-lived intangible assets, gross carrying amount | 5,000 | 5,000 | 5,000 | ||
Finite-lived intangible assets, accumulated amortization | (5,000) | (5,000) | (4,583) | ||
Finite-lived intangible assets, net carrying amount | 0 | 0 | 417 | ||
Customer relationships | |||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Finite-lived intangible assets, gross carrying amount | 284,440 | 284,440 | 280,710 | ||
Finite-lived intangible assets, accumulated amortization | (74,516) | (74,516) | (61,900) | ||
Finite-lived intangible assets, net carrying amount | 209,924 | 209,924 | 218,810 | ||
Favorable leasehold interests | |||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Finite-lived intangible assets, gross carrying amount | 0 | 0 | 13,553 | ||
Finite-lived intangible assets, accumulated amortization | 0 | 0 | (6,064) | ||
Finite-lived intangible assets, net carrying amount | 0 | 0 | 7,489 | ||
Non-compete agreements | |||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Finite-lived intangible assets, gross carrying amount | 31,197 | 31,197 | 29,400 | ||
Finite-lived intangible assets, accumulated amortization | (7,421) | (7,421) | (6,152) | ||
Finite-lived intangible assets, net carrying amount | 23,776 | 23,776 | 23,248 | ||
Trademarks | |||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Indefinite-lived intangible assets, carrying amount | 166,698 | $ 166,698 | 166,698 | ||
Amortized intangible assets: | |||||
Weighted average time until next renewal | 7 years 8 months 12 days | ||||
Certificates of need | |||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Indefinite-lived intangible assets, carrying amount | 17,080 | $ 17,080 | 19,174 | ||
Accreditations | |||||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Indefinite-lived intangible assets, carrying amount | $ 1,857 | $ 1,857 | $ 1,857 | ||
Amortized intangible assets: | |||||
Weighted average time until next renewal | 1 year 6 months |
Long-Term Debt and Notes Paya_3
Long-Term Debt and Notes Payable - Components of Long-Term Debt And Notes Payable (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Principal Outstanding | $ 3,397,750 | $ 3,338,381 |
Unamortized Premium (Discount) | (10,797) | (11,905) |
Unamortized Issuance Costs | (28,239) | (33,095) |
Carrying Value | 3,358,714 | 3,293,381 |
Fair Value | 3,378,552 | 3,222,705 |
Select Medical Corporation | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 2,010,932 | 1,916,290 |
Unamortized Premium (Discount) | (8,443) | (9,140) |
Unamortized Issuance Costs | (12,591) | (14,447) |
Carrying Value | 1,989,898 | 1,892,703 |
Fair Value | $ 1,991,873 | 1,856,987 |
Select Medical Corporation | Senior notes | 6.375% Senior Notes Due June 2021 | ||
Debt Instrument [Line Items] | ||
Interest rate of debt (as a percent) | 6.375% | |
Principal Outstanding | $ 710,000 | 710,000 |
Unamortized Premium (Discount) | 436 | 550 |
Unamortized Issuance Costs | (3,689) | (4,642) |
Carrying Value | 706,747 | 705,908 |
Fair Value | 710,852 | 706,450 |
Select Medical Corporation | Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 74,864 | 56,415 |
Unamortized Premium (Discount) | 0 | 0 |
Unamortized Issuance Costs | (444) | (484) |
Carrying Value | 74,420 | 55,931 |
Fair Value | 74,420 | 55,931 |
Select Medical Corporation | Revolving facility | Credit facilities | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 195,000 | 20,000 |
Unamortized Premium (Discount) | 0 | 0 |
Unamortized Issuance Costs | 0 | 0 |
Carrying Value | 195,000 | 20,000 |
Fair Value | 179,400 | 18,400 |
Select Medical Corporation | Term loans | Credit facilities | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 1,031,068 | 1,129,875 |
Unamortized Premium (Discount) | (8,879) | (9,690) |
Unamortized Issuance Costs | (8,458) | (9,321) |
Carrying Value | 1,013,731 | 1,110,864 |
Fair Value | 1,027,201 | 1,076,206 |
Concentra Inc | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 1,386,818 | 1,422,091 |
Unamortized Premium (Discount) | (2,354) | (2,765) |
Unamortized Issuance Costs | (15,648) | (18,648) |
Carrying Value | 1,368,816 | 1,400,678 |
Fair Value | 1,386,679 | 1,365,718 |
Concentra Inc | Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 6,521 | 7,916 |
Unamortized Premium (Discount) | 0 | 0 |
Unamortized Issuance Costs | 0 | 0 |
Carrying Value | 6,521 | 7,916 |
Fair Value | 6,521 | 7,916 |
Concentra Inc | Term loans | Credit facilities | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 1,380,297 | 1,414,175 |
Unamortized Premium (Discount) | (2,354) | (2,765) |
Unamortized Issuance Costs | (15,648) | (18,648) |
Carrying Value | 1,362,295 | 1,392,762 |
Fair Value | $ 1,380,158 | $ 1,357,802 |
Long-Term Debt and Notes Paya_4
Long-Term Debt and Notes Payable - Principal Maturities Of Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
2019 | $ 6,402 | |
2020 | 4,197 | |
2021 | 712,144 | |
2022 | 1,358,692 | |
2023 | 240,400 | |
Thereafter | 1,075,915 | |
Total | 3,397,750 | $ 3,338,381 |
Select Medical Corporation | ||
Debt Instrument [Line Items] | ||
2019 | 5,595 | |
2020 | 3,003 | |
2021 | 711,814 | |
2022 | 218,036 | |
2023 | 38 | |
Thereafter | 1,072,446 | |
Total | $ 2,010,932 | 1,916,290 |
Select Medical Corporation | Senior notes | 6.375% Senior Notes Due June 2021 | ||
Debt Instrument [Line Items] | ||
Interest rate of debt (as a percent) | 6.375% | |
2019 | $ 0 | |
2020 | 0 | |
2021 | 710,000 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 0 | |
Total | 710,000 | 710,000 |
Select Medical Corporation | Credit facilities | Revolving facility | ||
Debt Instrument [Line Items] | ||
2019 | 0 | |
2020 | 0 | |
2021 | 0 | |
2022 | 195,000 | |
2023 | 0 | |
Thereafter | 0 | |
Total | 195,000 | 20,000 |
Select Medical Corporation | Credit facilities | Term loans | ||
Debt Instrument [Line Items] | ||
2019 | 0 | |
2020 | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 1,031,068 | |
Total | 1,031,068 | 1,129,875 |
Select Medical Corporation | Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
2019 | 5,595 | |
2020 | 3,003 | |
2021 | 1,814 | |
2022 | 23,036 | |
2023 | 38 | |
Thereafter | 41,378 | |
Total | 74,864 | 56,415 |
Concentra Inc | ||
Debt Instrument [Line Items] | ||
2019 | 807 | |
2020 | 1,194 | |
2021 | 330 | |
2022 | 1,140,656 | |
2023 | 240,362 | |
Thereafter | 3,469 | |
Total | 1,386,818 | 1,422,091 |
Concentra Inc | Credit facilities | Term loans | ||
Debt Instrument [Line Items] | ||
2019 | 0 | |
2020 | 0 | |
2021 | 0 | |
2022 | 1,140,298 | |
2023 | 239,999 | |
Thereafter | 0 | |
Total | 1,380,297 | 1,414,175 |
Concentra Inc | Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
2019 | 807 | |
2020 | 1,194 | |
2021 | 330 | |
2022 | 358 | |
2023 | 363 | |
Thereafter | 3,469 | |
Total | $ 6,521 | $ 7,916 |
Long-Term Debt and Notes Paya_5
Long-Term Debt and Notes Payable - Amendment to Concentra First Lien Credit Agreement (Details) - Concentra Inc - Credit facilities | Apr. 08, 2019USD ($) |
First Lien Credit Agreement Maturing June 1, 2020 | |
Debt Instrument [Line Items] | |
Aggregate commitments available | $ 75,000,000 |
First Lien Credit Agreement Maturing June 1, 2021 | |
Debt Instrument [Line Items] | |
Aggregate commitments available | $ 100,000,000 |
Long-Term Debt and Notes Paya_6
Long-Term Debt and Notes Payable - Excess Cash Flow Payment (Details) - Credit facilities - Term loans $ in Millions | 1 Months Ended |
Feb. 28, 2019USD ($) | |
Select Medical Corporation | 2017 Select Credit Facilities | |
Line of Credit Facility [Line Items] | |
Principal prepayment | $ 98.8 |
Concentra Inc | |
Line of Credit Facility [Line Items] | |
Principal prepayment | $ 33.9 |
Long-Term Debt and Notes Paya_7
Long-Term Debt and Notes Payable - Fair Value (Details) | Jun. 30, 2019 |
Select Medical Corporation | Senior notes | 6.375% Senior Notes Due June 2021 | |
Debt Instrument [Line Items] | |
Interest rate of debt (as a percent) | 6.375% |
Segment Information - Selected
Segment Information - Selected Financial Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Segment information | |||||
Net operating revenues | $ 1,361,364 | $ 1,296,210 | $ 2,685,995 | $ 2,549,174 | |
Adjusted EBITDA | 186,233 | 178,228 | 356,350 | 341,460 | |
Total assets | 7,106,940 | 5,964,800 | 7,106,940 | 5,964,800 | $ 5,964,265 |
Purchases of property and equipment, net | 40,212 | 42,031 | 89,285 | 81,648 | |
Critical Illness Recovery Hospital | |||||
Segment information | |||||
Net operating revenues | 461,143 | 442,452 | 918,677 | 907,128 | |
Rehabilitation Hospital | |||||
Segment information | |||||
Net operating revenues | 160,374 | 144,779 | 314,932 | 288,087 | |
Outpatient Rehabilitation | |||||
Segment information | |||||
Net operating revenues | 261,891 | 253,914 | 508,796 | 498,145 | |
Concentra | |||||
Segment information | |||||
Net operating revenues | 413,451 | 412,823 | 809,772 | 768,939 | |
Operating Segments | Critical Illness Recovery Hospital | |||||
Segment information | |||||
Net operating revenues | 461,143 | 442,452 | 918,677 | 907,128 | |
Adjusted EBITDA | 64,138 | 60,725 | 137,136 | 133,697 | |
Total assets | 2,119,574 | 1,828,038 | 2,119,574 | 1,828,038 | |
Purchases of property and equipment, net | 14,488 | 12,849 | 24,648 | 23,321 | |
Operating Segments | Rehabilitation Hospital | |||||
Segment information | |||||
Net operating revenues | 160,374 | 144,779 | 314,932 | 288,087 | |
Adjusted EBITDA | 29,968 | 28,195 | 55,765 | 54,971 | |
Total assets | 1,107,852 | 867,175 | 1,107,852 | 867,175 | |
Purchases of property and equipment, net | 5,356 | 8,080 | 18,539 | 20,997 | |
Operating Segments | Outpatient Rehabilitation | |||||
Segment information | |||||
Net operating revenues | 261,891 | 253,914 | 508,796 | 498,145 | |
Adjusted EBITDA | 42,584 | 41,947 | 71,575 | 72,472 | |
Total assets | 1,265,487 | 979,678 | 1,265,487 | 979,678 | |
Purchases of property and equipment, net | 6,705 | 8,018 | 15,745 | 15,356 | |
Operating Segments | Concentra | |||||
Segment information | |||||
Net operating revenues | 413,451 | 412,823 | 809,772 | 768,939 | |
Adjusted EBITDA | 76,087 | 72,568 | 142,345 | 130,365 | |
Total assets | 2,447,387 | 2,174,931 | 2,447,387 | 2,174,931 | |
Purchases of property and equipment, net | 12,240 | 10,121 | 27,938 | 16,742 | |
Other | |||||
Segment information | |||||
Net operating revenues | 64,505 | 42,242 | 133,818 | 86,875 | |
Adjusted EBITDA | (26,544) | (25,207) | (50,471) | (50,045) | |
Total assets | 166,640 | 114,978 | 166,640 | 114,978 | |
Purchases of property and equipment, net | $ 1,423 | $ 2,963 | $ 2,415 | $ 5,232 |
Segment Information - Reconcili
Segment Information - Reconciliation of Adjusted EBITDA to Income Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment information | ||||
Adjusted EBITDA | $ 186,233 | $ 178,228 | $ 356,350 | $ 341,460 |
Depreciation and amortization | (54,993) | (51,724) | (107,131) | (98,495) |
Income from operations | 124,882 | 120,561 | 236,606 | 229,159 |
Loss on early retirement of debt | 0 | (10,255) | ||
Equity in earnings of unconsolidated subsidiaries | 7,394 | 4,785 | 11,760 | 9,482 |
Non-operating gain | 0 | 6,478 | 6,532 | 6,877 |
Interest expense | (51,464) | (50,159) | (102,275) | (97,322) |
Income (loss) before income taxes | 80,812 | 81,665 | 152,623 | 137,941 |
Operating Segments | Critical Illness Recovery Hospital | ||||
Segment information | ||||
Adjusted EBITDA | 64,138 | 60,725 | 137,136 | 133,697 |
Depreciation and amortization | (14,495) | (11,952) | (25,946) | (23,010) |
Stock compensation expense | 0 | 0 | 0 | 0 |
U.S. HealthWorks acquisition costs | 0 | 0 | ||
Income from operations | 49,643 | 48,773 | 111,190 | 110,687 |
Operating Segments | Rehabilitation Hospital | ||||
Segment information | ||||
Adjusted EBITDA | 29,968 | 28,195 | 55,765 | 54,971 |
Depreciation and amortization | (6,696) | (6,015) | (13,098) | (11,737) |
Stock compensation expense | 0 | 0 | 0 | 0 |
U.S. HealthWorks acquisition costs | 0 | 0 | ||
Income from operations | 23,272 | 22,180 | 42,667 | 43,234 |
Operating Segments | Outpatient Rehabilitation | ||||
Segment information | ||||
Adjusted EBITDA | 42,584 | 41,947 | 71,575 | 72,472 |
Depreciation and amortization | (6,991) | (6,704) | (14,023) | (13,341) |
Stock compensation expense | 0 | 0 | 0 | 0 |
U.S. HealthWorks acquisition costs | 0 | 0 | ||
Income from operations | 35,593 | 35,243 | 57,552 | 59,131 |
Operating Segments | Concentra | ||||
Segment information | ||||
Adjusted EBITDA | 76,087 | 72,568 | 142,345 | 130,365 |
Depreciation and amortization | (24,479) | (24,697) | (49,383) | (45,844) |
Stock compensation expense | (767) | (1,138) | (1,534) | (1,349) |
U.S. HealthWorks acquisition costs | 41 | (2,895) | ||
Income from operations | 50,841 | 46,774 | 91,428 | 80,277 |
Other | ||||
Segment information | ||||
Adjusted EBITDA | (26,544) | (25,207) | (50,471) | (50,045) |
Depreciation and amortization | (2,332) | (2,356) | (4,681) | (4,563) |
Stock compensation expense | (5,591) | (4,846) | (11,079) | (9,562) |
U.S. HealthWorks acquisition costs | 0 | 0 | ||
Income from operations | $ (34,467) | $ (32,409) | $ (66,231) | $ (64,170) |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | $ 1,361,364 | $ 1,296,210 | $ 2,685,995 | $ 2,549,174 |
Patient services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 1,262,397 | 1,220,906 | 2,484,729 | 2,397,617 |
Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 345,291 | 340,903 | 698,872 | 693,554 |
Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 917,106 | 880,003 | 1,785,857 | 1,704,063 |
Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 98,967 | 75,304 | 201,266 | 151,557 |
Critical Illness Recovery Hospital | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 461,143 | 442,452 | 918,677 | 907,128 |
Critical Illness Recovery Hospital | Patient services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 458,304 | 438,940 | 913,432 | 899,938 |
Critical Illness Recovery Hospital | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 223,688 | 225,857 | 461,857 | 466,849 |
Critical Illness Recovery Hospital | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 234,616 | 213,083 | 451,575 | 433,089 |
Critical Illness Recovery Hospital | Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 2,839 | 3,512 | 5,245 | 7,190 |
Rehabilitation Hospital | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 160,374 | 144,779 | 314,932 | 288,087 |
Rehabilitation Hospital | Patient services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 151,232 | 135,441 | 296,453 | 270,184 |
Rehabilitation Hospital | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 77,260 | 73,054 | 151,839 | 145,895 |
Rehabilitation Hospital | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 73,972 | 62,387 | 144,614 | 124,289 |
Rehabilitation Hospital | Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 9,142 | 9,338 | 18,479 | 17,903 |
Outpatient Rehabilitation | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 261,891 | 253,914 | 508,796 | 498,145 |
Outpatient Rehabilitation | Patient services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 242,110 | 236,086 | 470,302 | 463,176 |
Outpatient Rehabilitation | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 43,869 | 41,475 | 84,147 | 79,665 |
Outpatient Rehabilitation | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 198,241 | 194,611 | 386,155 | 383,511 |
Outpatient Rehabilitation | Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 19,781 | 17,828 | 38,494 | 34,969 |
Concentra | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 413,451 | 412,823 | 809,772 | 768,939 |
Concentra | Patient services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 410,751 | 410,439 | 804,542 | 764,319 |
Concentra | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 474 | 517 | 1,029 | 1,145 |
Concentra | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 410,277 | 409,922 | 803,513 | 763,174 |
Concentra | Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 2,700 | 2,384 | 5,230 | 4,620 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 64,505 | 42,242 | 133,818 | 86,875 |
Other | Patient services revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 0 | 0 | 0 | 0 |
Other | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 0 | 0 | 0 | 0 |
Other | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | 0 | 0 | 0 | 0 |
Other | Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net operating revenues | $ 64,505 | $ 42,242 | $ 133,818 | $ 86,875 |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Dividends declared and contractual dividends paid, basic (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
Dividends declared and contractual dividends paid, diluted (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
Earnings per Share - Net Income
Earnings per Share - Net Income Attributable to the Company, Common Shares Outstanding, and Participating Securities Outstanding (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||||
Net income | $ 59,986 | $ 60,559 | $ 113,330 | $ 104,541 | ||
Less: Net income attributable to non-controlling interests | 15,170 | 14,048 | 27,680 | 24,291 | ||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 44,816 | $ 40,834 | 46,511 | $ 33,739 | 85,650 | 80,250 |
Basic EPS | ||||||
Less: net income attributable to participating securities | 1,484 | 1,517 | 2,827 | 2,630 | ||
Net income attributable to common shares | 43,332 | 44,994 | 82,823 | 77,620 | ||
Diluted EPS | ||||||
Less: net income attributable to participating securities | 1,484 | 1,517 | 2,826 | 2,628 | ||
Net income attributable to common shares | $ 43,332 | $ 44,994 | $ 82,824 | $ 77,622 |
Earnings per Share - Computatio
Earnings per Share - Computation of EPS Under the Two-Class Method (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net Income Allocation, Basic [Abstract] | ||||||
Net income allocated to common shares | $ 43,332 | $ 44,994 | $ 82,823 | $ 77,620 | ||
Net income allocated to participating securities | 1,484 | 1,517 | 2,827 | 2,630 | ||
Net Income Allocation, Diluted [Abstract] | ||||||
Net income attributable to common shares | 43,332 | 44,994 | 82,824 | 77,622 | ||
Net income allocated to participating securities | 1,484 | 1,517 | 2,826 | 2,628 | ||
Net income attributable to the Company | $ 44,816 | $ 40,834 | $ 46,511 | $ 33,739 | $ 85,650 | $ 80,250 |
Weighted average common shares outstanding, basic (in shares) | 130,525 | 129,830 | 130,672 | 129,761 | ||
Weighted average common shares outstanding, diluted (in shares) | 130,562 | 129,924 | 130,711 | 129,871 | ||
Weighted average participating securities outstanding (in shares) | 4,471 | 4,379 | 4,460 | 4,397 | ||
Basic EPS | ||||||
Basic EPS (in dollars per share) | $ 0.33 | $ 0.35 | $ 0.63 | $ 0.60 | ||
Diluted EPS | ||||||
Diluted EPS (in dollars per share) | $ 0.33 | $ 0.35 | $ 0.63 | $ 0.60 |
Commitments and Contingencies -
Commitments and Contingencies - Litigation (Details) $ in Millions | Oct. 19, 2015case_manager | Jun. 30, 2019USD ($) |
Amended complaint | SSH-Evansville | ||
Commitments and Contingencies | ||
Number of case managers identified as plaintiff | case_manager | 2 | |
Professional liability claims | Maximum | ||
Commitments and Contingencies | ||
Total annual aggregate limit of insurance coverage | $ 40 | |
Professional liability claims | Maximum | Joint Venture Operations | ||
Commitments and Contingencies | ||
Total annual aggregate limit of insurance coverage | 20 | |
Professional liability claims | Minimum | Joint Venture Operations | ||
Commitments and Contingencies | ||
Total annual aggregate limit of insurance coverage | $ 5 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Aug. 01, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | |||
Outstanding borrowings | $ 3,397,750,000 | $ 3,338,381,000 | |
Select Medical Corporation | |||
Subsequent Event [Line Items] | |||
Outstanding borrowings | 2,010,932,000 | 1,916,290,000 | |
6.25% Senior Notes Due August 15, 2026 | Select Medical Corporation | Senior notes | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Aggregate principal amount issued | $ 550,000,000 | ||
Interest rate of debt (as a percent) | 6.25% | ||
Maximum percentage of the senior notes that may be redeemed with the net proceeds of certain equity offerings | 40.00% | ||
Redemption price | 106.25% | ||
Percentage of principal amount at which notes may be required to be repurchased in event of change of control by the entity | 101.00% | ||
6.375% Senior Notes Due June 2021 | Select Medical Corporation | Senior notes | |||
Subsequent Event [Line Items] | |||
Outstanding borrowings | $ 710,000,000 | 710,000,000 | |
Interest rate of debt (as a percent) | 6.375% | ||
6.375% Senior Notes Due June 2021 | Select Medical Corporation | Senior notes | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Outstanding borrowings | $ 710,000,000 | ||
Interest rate of debt (as a percent) | 6.375% | ||
Term loans | Select Medical Corporation | Credit facilities | |||
Subsequent Event [Line Items] | |||
Outstanding borrowings | $ 1,031,068,000 | $ 1,129,875,000 | |
Term loans | 2017 Select Credit Facilities | Select Medical Corporation | Credit facilities | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Additional borrowings | $ 500,000,000 |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Information - Narrative (Details) | Jun. 30, 2019 |
Senior notes | Subsidiary Guarantors | |
Debt Instrument [Line Items] | |
Interest rate of debt (as a percent) | 6.375% |
Condensed Consolidating Finan_4
Condensed Consolidating Financial Information - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||||||
Cash and cash equivalents | $ 124,036 | $ 175,178 | ||||
Accounts receivable | 791,769 | 706,676 | ||||
Prepaid income taxes | 12,318 | 20,539 | ||||
Other current assets | 99,942 | 90,131 | ||||
Total Current Assets | 1,028,065 | 992,524 | ||||
Operating lease right-of-use assets | 971,385 | |||||
Property and equipment, net | 1,008,555 | 979,810 | ||||
Goodwill | 3,385,394 | 3,320,726 | ||||
Identifiable intangible assets, net | 419,335 | 437,693 | ||||
Other assets | 294,206 | 233,512 | ||||
Total Assets | 7,106,940 | 5,964,265 | $ 5,964,800 | |||
Current Liabilities: | ||||||
Overdrafts | 27,259 | 25,083 | ||||
Current operating lease liabilities | 202,484 | |||||
Current portion of long-term debt and notes payable | 9,012 | 43,865 | ||||
Accounts payable | 138,015 | 146,693 | ||||
Accrued payroll | 147,397 | 172,386 | ||||
Accrued vacation | 122,277 | 110,660 | ||||
Accrued interest | 10,234 | 12,137 | ||||
Accrued other | 184,247 | 190,691 | ||||
Income taxes payable | 11,767 | 3,671 | ||||
Total Current Liabilities | 852,692 | 705,186 | ||||
Non-current operating lease liabilities | 813,903 | |||||
Long-term debt, net of current portion | 3,349,702 | 3,249,516 | ||||
Non-current deferred tax liability | 147,716 | 153,895 | ||||
Other non-current liabilities | 102,555 | 158,940 | ||||
Total Liabilities | 5,266,568 | 4,267,537 | ||||
Redeemable non-controlling interests | 844,422 | $ 833,241 | 780,488 | 616,232 | $ 607,474 | $ 640,818 |
Stockholders’ Equity: | ||||||
Common stock | 135 | 135 | ||||
Capital in excess of par | 492,569 | 482,556 | ||||
Retained earnings (accumulated deficit) | 353,305 | 320,351 | ||||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 846,009 | 803,042 | ||||
Non-controlling interests | 149,941 | 113,198 | ||||
Total Equity | 995,950 | 924,550 | 916,240 | 1,011,927 | 965,277 | 932,604 |
Total Liabilities and Equity | 7,106,940 | 5,964,265 | ||||
Consolidating and Eliminating Adjustments | ||||||
Current Assets: | ||||||
Cash and cash equivalents | 0 | 0 | ||||
Accounts receivable | 0 | 0 | ||||
Intercompany receivables | (1,850,303) | (1,870,414) | ||||
Prepaid income taxes | (606) | 0 | ||||
Other current assets | 0 | 0 | ||||
Total Current Assets | (1,850,909) | (1,870,414) | ||||
Operating lease right-of-use assets | (325,312) | |||||
Property and equipment, net | 0 | 0 | ||||
Investment in affiliates | (4,718,747) | (4,624,203) | ||||
Goodwill | 0 | 0 | ||||
Identifiable intangible assets, net | 0 | 0 | ||||
Other assets | (9,671) | (8,685) | ||||
Total Assets | (6,904,639) | (6,503,302) | ||||
Current Liabilities: | ||||||
Overdrafts | 0 | 0 | ||||
Current operating lease liabilities | (13,695) | |||||
Current portion of long-term debt and notes payable | 0 | 0 | ||||
Accounts payable | 0 | 0 | ||||
Intercompany payables | (1,850,303) | (1,870,414) | ||||
Accrued payroll | 0 | 0 | ||||
Accrued vacation | 0 | 0 | ||||
Accrued interest | 0 | 0 | ||||
Accrued other | 0 | 0 | ||||
Income taxes payable | (606) | 0 | ||||
Total Current Liabilities | (1,864,604) | (1,870,414) | ||||
Non-current operating lease liabilities | (286,910) | |||||
Long-term debt, net of current portion | 0 | 0 | ||||
Non-current deferred tax liability | (9,671) | (8,685) | ||||
Other non-current liabilities | (24,707) | 0 | ||||
Total Liabilities | (2,185,892) | (1,879,099) | ||||
Redeemable non-controlling interests | 826,990 | 761,963 | ||||
Stockholders’ Equity: | ||||||
Common stock | 0 | 0 | ||||
Capital in excess of par | 0 | 0 | ||||
Retained earnings (accumulated deficit) | (1,634,438) | (1,529,820) | ||||
Subsidiary investment | (4,055,756) | (3,964,000) | ||||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | (5,690,194) | (5,493,820) | ||||
Non-controlling interests | 144,457 | 107,654 | ||||
Total Equity | (5,545,737) | (5,386,166) | ||||
Total Liabilities and Equity | (6,904,639) | (6,503,302) | ||||
Select (Parent Company Only) | Reportable Legal Entities | ||||||
Current Assets: | ||||||
Cash and cash equivalents | 78 | 77 | ||||
Accounts receivable | 0 | 0 | ||||
Intercompany receivables | 0 | 0 | ||||
Prepaid income taxes | 142 | 10,205 | ||||
Other current assets | 29,306 | 17,866 | ||||
Total Current Assets | 29,526 | 28,148 | ||||
Operating lease right-of-use assets | 33,568 | |||||
Property and equipment, net | 28,578 | 30,103 | ||||
Investment in affiliates | 4,543,196 | 4,497,167 | ||||
Goodwill | 0 | 0 | ||||
Identifiable intangible assets, net | 3 | 3 | ||||
Other assets | 34,285 | 37,281 | ||||
Total Assets | 4,669,156 | 4,592,702 | ||||
Current Liabilities: | ||||||
Overdrafts | 27,259 | 25,083 | ||||
Current operating lease liabilities | 6,419 | |||||
Current portion of long-term debt and notes payable | 6,376 | 4,363 | ||||
Accounts payable | 14,227 | 14,033 | ||||
Intercompany payables | 1,702,313 | 1,787,184 | ||||
Accrued payroll | 7,498 | 15,533 | ||||
Accrued vacation | 5,086 | 4,613 | ||||
Accrued interest | 5,282 | 5,996 | ||||
Accrued other | 63,952 | 60,056 | ||||
Income taxes payable | 8,333 | 0 | ||||
Total Current Liabilities | 1,846,745 | 1,916,861 | ||||
Non-current operating lease liabilities | 30,244 | |||||
Long-term debt, net of current portion | 1,918,283 | 1,837,241 | ||||
Non-current deferred tax liability | 0 | 0 | ||||
Other non-current liabilities | 27,875 | 35,558 | ||||
Total Liabilities | 3,823,147 | 3,789,660 | ||||
Redeemable non-controlling interests | 0 | 0 | ||||
Stockholders’ Equity: | ||||||
Common stock | 0 | 0 | ||||
Capital in excess of par | 988,333 | 970,156 | ||||
Retained earnings (accumulated deficit) | (142,324) | (167,114) | ||||
Subsidiary investment | 0 | 0 | ||||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 846,009 | 803,042 | ||||
Non-controlling interests | 0 | 0 | ||||
Total Equity | 846,009 | 803,042 | ||||
Total Liabilities and Equity | 4,669,156 | 4,592,702 | ||||
Subsidiary Guarantors | Reportable Legal Entities | ||||||
Current Assets: | ||||||
Cash and cash equivalents | 7,576 | 7,574 | ||||
Accounts receivable | 445,484 | 397,674 | ||||
Intercompany receivables | 1,702,313 | 1,787,184 | ||||
Prepaid income taxes | 5,936 | 5,711 | ||||
Other current assets | 32,072 | 31,181 | ||||
Total Current Assets | 2,193,381 | 2,229,324 | ||||
Operating lease right-of-use assets | 441,710 | |||||
Property and equipment, net | 658,686 | 625,947 | ||||
Investment in affiliates | 175,551 | 127,036 | ||||
Goodwill | 2,150,658 | 2,104,288 | ||||
Identifiable intangible assets, net | 98,033 | 102,120 | ||||
Other assets | 236,642 | 145,467 | ||||
Total Assets | 5,954,661 | 5,334,182 | ||||
Current Liabilities: | ||||||
Overdrafts | 0 | 0 | ||||
Current operating lease liabilities | 102,709 | |||||
Current portion of long-term debt and notes payable | 524 | 248 | ||||
Accounts payable | 80,569 | 84,343 | ||||
Intercompany payables | 147,990 | 83,230 | ||||
Accrued payroll | 95,373 | 99,803 | ||||
Accrued vacation | 67,198 | 60,989 | ||||
Accrued interest | 35 | 22 | ||||
Accrued other | 64,262 | 61,226 | ||||
Income taxes payable | 3,082 | 2,366 | ||||
Total Current Liabilities | 561,742 | 392,227 | ||||
Non-current operating lease liabilities | 363,883 | |||||
Long-term debt, net of current portion | 9,473 | 448 | ||||
Non-current deferred tax liability | 100,310 | 101,214 | ||||
Other non-current liabilities | 63,035 | 59,901 | ||||
Total Liabilities | 1,098,443 | 553,790 | ||||
Redeemable non-controlling interests | 0 | 0 | ||||
Stockholders’ Equity: | ||||||
Common stock | 0 | 0 | ||||
Capital in excess of par | 0 | 0 | ||||
Retained earnings (accumulated deficit) | 1,613,283 | 1,547,018 | ||||
Subsidiary investment | 3,242,935 | 3,233,374 | ||||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 4,856,218 | 4,780,392 | ||||
Non-controlling interests | 0 | 0 | ||||
Total Equity | 4,856,218 | 4,780,392 | ||||
Total Liabilities and Equity | 5,954,661 | 5,334,182 | ||||
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||||
Current Assets: | ||||||
Cash and cash equivalents | 3,256 | 4,411 | ||||
Accounts receivable | 129,946 | 118,683 | ||||
Intercompany receivables | 147,990 | 83,230 | ||||
Prepaid income taxes | 8 | 0 | ||||
Other current assets | 9,923 | 14,048 | ||||
Total Current Assets | 291,123 | 220,372 | ||||
Operating lease right-of-use assets | 513,796 | |||||
Property and equipment, net | 114,256 | 103,006 | ||||
Investment in affiliates | 0 | 0 | ||||
Goodwill | 0 | 0 | ||||
Identifiable intangible assets, net | 4,676 | 5,020 | ||||
Other assets | 16,524 | 33,417 | ||||
Total Assets | 940,375 | 361,815 | ||||
Current Liabilities: | ||||||
Overdrafts | 0 | 0 | ||||
Current operating lease liabilities | 39,896 | |||||
Current portion of long-term debt and notes payable | 192 | 2,001 | ||||
Accounts payable | 22,931 | 20,956 | ||||
Intercompany payables | 0 | 0 | ||||
Accrued payroll | 4,579 | 5,936 | ||||
Accrued vacation | 15,767 | 13,942 | ||||
Accrued interest | 6 | 3 | ||||
Accrued other | 14,735 | 17,098 | ||||
Income taxes payable | 47 | 190 | ||||
Total Current Liabilities | 98,153 | 60,126 | ||||
Non-current operating lease liabilities | 455,165 | |||||
Long-term debt, net of current portion | 55,050 | 48,402 | ||||
Non-current deferred tax liability | 1,359 | 994 | ||||
Other non-current liabilities | 3,235 | 9,194 | ||||
Total Liabilities | 612,962 | 118,716 | ||||
Redeemable non-controlling interests | 0 | 0 | ||||
Stockholders’ Equity: | ||||||
Common stock | 0 | 0 | ||||
Capital in excess of par | 0 | 0 | ||||
Retained earnings (accumulated deficit) | (24,651) | (29,553) | ||||
Subsidiary investment | 352,064 | 272,652 | ||||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 327,413 | 243,099 | ||||
Non-controlling interests | 0 | 0 | ||||
Total Equity | 327,413 | 243,099 | ||||
Total Liabilities and Equity | 940,375 | 361,815 | ||||
Select Medical Corporation | ||||||
Current Assets: | ||||||
Cash and cash equivalents | 124,036 | 175,178 | ||||
Accounts receivable | 791,769 | 706,676 | ||||
Intercompany receivables | 0 | 0 | ||||
Prepaid income taxes | 12,318 | 20,539 | ||||
Other current assets | 99,942 | 90,131 | ||||
Total Current Assets | 1,028,065 | 992,524 | ||||
Operating lease right-of-use assets | 971,385 | |||||
Property and equipment, net | 1,008,555 | 979,810 | ||||
Investment in affiliates | 0 | 0 | ||||
Goodwill | 3,385,394 | 3,320,726 | ||||
Identifiable intangible assets, net | 419,335 | 437,693 | ||||
Other assets | 294,206 | 233,512 | ||||
Total Assets | 7,106,940 | 5,964,265 | ||||
Current Liabilities: | ||||||
Overdrafts | 27,259 | 25,083 | ||||
Current operating lease liabilities | 202,484 | |||||
Current portion of long-term debt and notes payable | 9,012 | 43,865 | ||||
Accounts payable | 138,015 | 146,693 | ||||
Intercompany payables | 0 | 0 | ||||
Accrued payroll | 147,397 | 172,386 | ||||
Accrued vacation | 122,277 | 110,660 | ||||
Accrued interest | 10,234 | 12,137 | ||||
Accrued other | 184,247 | 190,691 | ||||
Income taxes payable | 11,767 | 3,671 | ||||
Total Current Liabilities | 852,692 | 705,186 | ||||
Non-current operating lease liabilities | 813,903 | |||||
Long-term debt, net of current portion | 3,349,702 | 3,249,516 | ||||
Non-current deferred tax liability | 147,716 | 153,895 | ||||
Other non-current liabilities | 102,555 | 158,940 | ||||
Total Liabilities | 5,266,568 | 4,267,537 | ||||
Redeemable non-controlling interests | 844,422 | 780,488 | ||||
Stockholders’ Equity: | ||||||
Common stock | 0 | 0 | ||||
Capital in excess of par | 988,333 | 970,156 | ||||
Retained earnings (accumulated deficit) | (142,324) | (167,114) | ||||
Subsidiary investment | 0 | 0 | ||||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 846,009 | 803,042 | ||||
Non-controlling interests | 149,941 | 113,198 | ||||
Total Equity | 995,950 | $ 924,550 | 916,240 | $ 1,011,927 | $ 965,277 | $ 932,604 |
Total Liabilities and Equity | 7,106,940 | 5,964,265 | ||||
Concentra Group Holdings Parent, LLC | Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||||
Current Assets: | ||||||
Cash and cash equivalents | 113,126 | 163,116 | ||||
Accounts receivable | 216,339 | 190,319 | ||||
Intercompany receivables | 0 | 0 | ||||
Prepaid income taxes | 6,838 | 4,623 | ||||
Other current assets | 28,641 | 27,036 | ||||
Total Current Assets | 364,944 | 385,094 | ||||
Operating lease right-of-use assets | 307,623 | |||||
Property and equipment, net | 207,035 | 220,754 | ||||
Investment in affiliates | 0 | 0 | ||||
Goodwill | 1,234,736 | 1,216,438 | ||||
Identifiable intangible assets, net | 316,623 | 330,550 | ||||
Other assets | 16,426 | 26,032 | ||||
Total Assets | 2,447,387 | 2,178,868 | ||||
Current Liabilities: | ||||||
Overdrafts | 0 | 0 | ||||
Current operating lease liabilities | 67,155 | |||||
Current portion of long-term debt and notes payable | 1,920 | 37,253 | ||||
Accounts payable | 20,288 | 27,361 | ||||
Intercompany payables | 0 | 0 | ||||
Accrued payroll | 39,947 | 51,114 | ||||
Accrued vacation | 34,226 | 31,116 | ||||
Accrued interest | 4,911 | 6,116 | ||||
Accrued other | 41,298 | 52,311 | ||||
Income taxes payable | 911 | 1,115 | ||||
Total Current Liabilities | 210,656 | 206,386 | ||||
Non-current operating lease liabilities | 251,521 | |||||
Long-term debt, net of current portion | 1,366,896 | 1,363,425 | ||||
Non-current deferred tax liability | 55,718 | 60,372 | ||||
Other non-current liabilities | 33,117 | 54,287 | ||||
Total Liabilities | 1,917,908 | 1,684,470 | ||||
Redeemable non-controlling interests | 17,432 | 18,525 | ||||
Stockholders’ Equity: | ||||||
Common stock | 0 | 0 | ||||
Capital in excess of par | 0 | 0 | ||||
Retained earnings (accumulated deficit) | 45,806 | 12,355 | ||||
Subsidiary investment | 460,757 | 457,974 | ||||
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity | 506,563 | 470,329 | ||||
Non-controlling interests | 5,484 | 5,544 | ||||
Total Equity | 512,047 | 475,873 | ||||
Total Liabilities and Equity | $ 2,447,387 | $ 2,178,868 |
Condensed Consolidating Finan_5
Condensed Consolidating Financial Information - Condensed Consolidating Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Condensed Financial Statements, Captions [Line Items] | ||||||
Net operating revenues | $ 1,361,364 | $ 1,296,210 | $ 2,685,995 | $ 2,549,174 | ||
Costs and expenses: | ||||||
Cost of services, exclusive of depreciation and amortization | 1,150,150 | 1,094,731 | 2,282,242 | 2,160,544 | ||
General and administrative | 31,339 | 29,194 | 60,016 | 60,976 | ||
Depreciation and amortization | 54,993 | 51,724 | 107,131 | 98,495 | ||
Total costs and expenses | 1,236,482 | 1,175,649 | 2,449,389 | 2,320,015 | ||
Income from operations | 124,882 | 120,561 | 236,606 | 229,159 | ||
Other income and expense: | ||||||
Loss on early retirement of debt | 0 | (10,255) | ||||
Equity in earnings of unconsolidated subsidiaries | 7,394 | 4,785 | 11,760 | 9,482 | ||
Non-operating gain | 0 | 6,478 | 6,532 | 6,877 | ||
Interest income (expense) | (51,464) | (50,159) | (102,275) | (97,322) | ||
Income (loss) before income taxes | 80,812 | 81,665 | 152,623 | 137,941 | ||
Income tax expense | 20,826 | 21,106 | 39,293 | 33,400 | ||
Net income | 59,986 | 60,559 | 113,330 | 104,541 | ||
Less: Net income attributable to non-controlling interests | 15,170 | 14,048 | 27,680 | 24,291 | ||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 44,816 | $ 40,834 | 46,511 | $ 33,739 | 85,650 | 80,250 |
Consolidating and Eliminating Adjustments | ||||||
Condensed Financial Statements, Captions [Line Items] | ||||||
Net operating revenues | 0 | 0 | 0 | 0 | ||
Costs and expenses: | ||||||
Cost of services, exclusive of depreciation and amortization | 0 | 0 | 0 | 0 | ||
General and administrative | 0 | 0 | 0 | 0 | ||
Depreciation and amortization | 0 | 0 | 0 | 0 | ||
Total costs and expenses | 0 | 0 | 0 | 0 | ||
Income from operations | 0 | 0 | 0 | 0 | ||
Other income and expense: | ||||||
Intercompany interest and royalty fees | 0 | 0 | 0 | 0 | ||
Intercompany management fees | 0 | 0 | 0 | 0 | ||
Loss on early retirement of debt | 0 | |||||
Equity in earnings of unconsolidated subsidiaries | 0 | 0 | 0 | 0 | ||
Non-operating gain | 0 | 0 | 0 | |||
Interest income (expense) | 0 | 0 | 0 | 0 | ||
Income (loss) before income taxes | 0 | 0 | 0 | 0 | ||
Income tax expense | 0 | 0 | 0 | 0 | ||
Equity in earnings of consolidated subsidiaries | (52,183) | (51,350) | (94,572) | (90,058) | ||
Net income | (52,183) | (51,350) | (94,572) | (90,058) | ||
Less: Net income attributable to non-controlling interests | 0 | 0 | 0 | 0 | ||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | (52,183) | (51,350) | (94,572) | (90,058) | ||
Select (Parent Company Only) | Reportable Legal Entities | ||||||
Condensed Financial Statements, Captions [Line Items] | ||||||
Net operating revenues | 0 | (17) | 0 | 0 | ||
Costs and expenses: | ||||||
Cost of services, exclusive of depreciation and amortization | 796 | 799 | 1,535 | 1,525 | ||
General and administrative | 31,865 | 29,208 | 60,562 | 58,015 | ||
Depreciation and amortization | 2,213 | 2,355 | 4,444 | 4,562 | ||
Total costs and expenses | 34,874 | 32,362 | 66,541 | 64,102 | ||
Income from operations | (34,874) | (32,379) | (66,541) | (64,102) | ||
Other income and expense: | ||||||
Intercompany interest and royalty fees | 4,705 | 7,553 | 8,813 | 15,672 | ||
Intercompany management fees | 57,738 | 55,416 | 119,210 | 116,148 | ||
Loss on early retirement of debt | (2,229) | |||||
Equity in earnings of unconsolidated subsidiaries | 0 | 0 | 0 | 0 | ||
Non-operating gain | 1,654 | 0 | 1,654 | |||
Interest income (expense) | (29,109) | (29,412) | (57,309) | (60,483) | ||
Income (loss) before income taxes | (1,540) | 2,832 | 4,173 | 6,660 | ||
Income tax expense | 1,140 | 831 | 1,197 | 1,345 | ||
Equity in earnings of consolidated subsidiaries | 47,496 | 44,510 | 82,674 | 74,935 | ||
Net income | 44,816 | 46,511 | 85,650 | 80,250 | ||
Less: Net income attributable to non-controlling interests | 0 | 0 | 0 | 0 | ||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 44,816 | 46,511 | 85,650 | 80,250 | ||
Subsidiary Guarantors | Reportable Legal Entities | ||||||
Condensed Financial Statements, Captions [Line Items] | ||||||
Net operating revenues | 734,359 | 690,766 | 1,454,189 | 1,397,178 | ||
Costs and expenses: | ||||||
Cost of services, exclusive of depreciation and amortization | 629,118 | 589,707 | 1,253,593 | 1,197,733 | ||
General and administrative | (526) | 27 | (546) | 66 | ||
Depreciation and amortization | 22,866 | 20,535 | 43,400 | 39,982 | ||
Total costs and expenses | 651,458 | 610,269 | 1,296,447 | 1,237,781 | ||
Income from operations | 82,901 | 80,497 | 157,742 | 159,397 | ||
Other income and expense: | ||||||
Intercompany interest and royalty fees | (2,128) | (3,629) | (3,230) | (7,924) | ||
Intercompany management fees | (42,503) | (43,931) | (91,273) | (93,471) | ||
Loss on early retirement of debt | 0 | |||||
Equity in earnings of unconsolidated subsidiaries | 7,370 | 4,776 | 11,713 | 9,460 | ||
Non-operating gain | 4,824 | 6,532 | 5,223 | |||
Interest income (expense) | 8 | 188 | 128 | 121 | ||
Income (loss) before income taxes | 45,648 | 42,725 | 81,612 | 72,806 | ||
Income tax expense | 13,021 | 14,254 | 27,246 | 26,189 | ||
Equity in earnings of consolidated subsidiaries | 4,687 | 6,840 | 11,898 | 15,123 | ||
Net income | 37,314 | 35,311 | 66,264 | 61,740 | ||
Less: Net income attributable to non-controlling interests | 0 | 12 | 0 | 97 | ||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 37,314 | 35,299 | 66,264 | 61,643 | ||
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||||
Condensed Financial Statements, Captions [Line Items] | ||||||
Net operating revenues | 213,554 | 192,638 | 422,034 | 383,057 | ||
Costs and expenses: | ||||||
Cost of services, exclusive of depreciation and amortization | 182,105 | 162,832 | 358,153 | 321,363 | ||
General and administrative | 0 | 0 | 0 | 0 | ||
Depreciation and amortization | 5,435 | 4,137 | 9,904 | 8,107 | ||
Total costs and expenses | 187,540 | 166,969 | 368,057 | 329,470 | ||
Income from operations | 26,014 | 25,669 | 53,977 | 53,587 | ||
Other income and expense: | ||||||
Intercompany interest and royalty fees | (2,204) | (3,609) | (4,847) | (7,240) | ||
Intercompany management fees | (15,235) | (11,485) | (27,937) | (22,677) | ||
Loss on early retirement of debt | 0 | |||||
Equity in earnings of unconsolidated subsidiaries | 24 | 9 | 47 | 22 | ||
Non-operating gain | 0 | 0 | 0 | |||
Interest income (expense) | (219) | (186) | (440) | (337) | ||
Income (loss) before income taxes | 8,380 | 10,398 | 20,800 | 23,355 | ||
Income tax expense | 138 | 145 | 545 | 238 | ||
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 | 0 | ||
Net income | 8,242 | 10,253 | 20,255 | 23,117 | ||
Less: Net income attributable to non-controlling interests | 3,555 | 3,413 | 8,357 | 7,994 | ||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 4,687 | 6,840 | 11,898 | 15,123 | ||
Select Medical Corporation | ||||||
Condensed Financial Statements, Captions [Line Items] | ||||||
Net operating revenues | 1,361,364 | 1,296,210 | 2,685,995 | 2,549,174 | ||
Costs and expenses: | ||||||
Cost of services, exclusive of depreciation and amortization | 1,150,150 | 1,094,731 | 2,282,242 | 2,160,544 | ||
General and administrative | 31,339 | 29,194 | 60,016 | 60,976 | ||
Depreciation and amortization | 54,993 | 51,724 | 107,131 | 98,495 | ||
Total costs and expenses | 1,236,482 | 1,175,649 | 2,449,389 | 2,320,015 | ||
Income from operations | 124,882 | 120,561 | 236,606 | 229,159 | ||
Other income and expense: | ||||||
Intercompany interest and royalty fees | 0 | 0 | 0 | 0 | ||
Intercompany management fees | 0 | 0 | 0 | 0 | ||
Loss on early retirement of debt | 0 | (10,255) | ||||
Equity in earnings of unconsolidated subsidiaries | 7,394 | 4,785 | 11,760 | 9,482 | ||
Non-operating gain | 0 | 6,478 | 6,532 | 6,877 | ||
Interest income (expense) | (51,464) | (50,159) | (102,275) | (97,322) | ||
Income (loss) before income taxes | 80,812 | 81,665 | 152,623 | 137,941 | ||
Income tax expense | 20,826 | 21,106 | 39,293 | 33,400 | ||
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 | 0 | ||
Net income | 59,986 | 60,559 | 113,330 | 104,541 | ||
Less: Net income attributable to non-controlling interests | 15,170 | 14,048 | 27,680 | 24,291 | ||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | 44,816 | $ 40,834 | 46,511 | $ 33,739 | 85,650 | 80,250 |
Concentra Group Holdings Parent, LLC | Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||||
Condensed Financial Statements, Captions [Line Items] | ||||||
Net operating revenues | 413,451 | 412,823 | 809,772 | 768,939 | ||
Costs and expenses: | ||||||
Cost of services, exclusive of depreciation and amortization | 338,131 | 341,393 | 668,961 | 639,923 | ||
General and administrative | 0 | (41) | 0 | 2,895 | ||
Depreciation and amortization | 24,479 | 24,697 | 49,383 | 45,844 | ||
Total costs and expenses | 362,610 | 366,049 | 718,344 | 688,662 | ||
Income from operations | 50,841 | 46,774 | 91,428 | 80,277 | ||
Other income and expense: | ||||||
Intercompany interest and royalty fees | (373) | (315) | (736) | (508) | ||
Intercompany management fees | 0 | 0 | 0 | 0 | ||
Loss on early retirement of debt | (8,026) | |||||
Equity in earnings of unconsolidated subsidiaries | 0 | 0 | 0 | 0 | ||
Non-operating gain | 0 | 0 | 0 | |||
Interest income (expense) | (22,144) | (20,749) | (44,654) | (36,623) | ||
Income (loss) before income taxes | 28,324 | 25,710 | 46,038 | 35,120 | ||
Income tax expense | 6,527 | 5,876 | 10,305 | 5,628 | ||
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 | 0 | ||
Net income | 21,797 | 19,834 | 35,733 | 29,492 | ||
Less: Net income attributable to non-controlling interests | 11,615 | 10,623 | 19,323 | 16,200 | ||
Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation | $ 10,182 | $ 9,211 | $ 16,410 | $ 13,292 |
Condensed Consolidating Finan_6
Condensed Consolidating Financial Information - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities | ||||
Net income | $ 59,986 | $ 60,559 | $ 113,330 | $ 104,541 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Distributions from unconsolidated subsidiaries | 11,148 | 7,830 | ||
Depreciation and amortization | 54,993 | 51,724 | 107,131 | 98,495 |
Provision for bad debts | 1,958 | 102 | ||
Equity in earnings of unconsolidated subsidiaries | (7,394) | (4,785) | (11,760) | (9,482) |
Loss on extinguishment of debt | 0 | 484 | ||
Gain on sale of assets and businesses | (6,354) | (6,980) | ||
Stock compensation expense | 12,613 | 10,911 | ||
Amortization of debt discount, premium and issuance costs | 6,326 | 6,486 | ||
Deferred income taxes | (6,290) | (1,691) | ||
Changes in operating assets and liabilities, net of effects of business combinations: | ||||
Accounts receivable | (85,873) | (5,774) | ||
Other current assets | (9,236) | (3,011) | ||
Other assets | (939) | 6,684 | ||
Accounts payable | 2,670 | (5,462) | ||
Accrued expenses | (18,156) | 1,207 | ||
Income taxes | 16,346 | 12,610 | ||
Net cash provided by operating activities | 132,914 | 216,950 | ||
Investing activities | ||||
Business combinations, net of cash acquired | (86,062) | (517,704) | ||
Purchases of property and equipment | (40,212) | (42,031) | (89,285) | (81,648) |
Investment in businesses | (52,257) | (3,291) | ||
Proceeds from sale of assets and businesses | 125 | 6,672 | ||
Net cash used in investing activities | (227,479) | (595,971) | ||
Financing activities | ||||
Borrowings on revolving facilities | 635,000 | 265,000 | ||
Payments on revolving facilities | (460,000) | (345,000) | ||
Proceeds from term loans (financing costs) | 0 | 779,904 | ||
Payments on term loans | (132,685) | (5,750) | ||
Revolving facility debt issuance costs | 0 | (1,333) | ||
Borrowings of other debt | 14,230 | 19,928 | ||
Principal payments on other debt | (12,680) | (11,521) | ||
Dividends paid to Holdings | 0 | 0 | ||
Equity investment by Holdings | 0 | 0 | ||
Increase (decrease) in overdrafts | 2,176 | (6,171) | ||
Proceeds from issuance of non-controlling interests | 18,288 | 2,926 | ||
Distributions to and purchases of non-controlling interests | (7,745) | (301,213) | ||
Net cash provided by (used in) financing activities | 43,423 | 397,501 | ||
Net increase (decrease) in cash and cash equivalents | (51,142) | 18,480 | ||
Cash and cash equivalents at beginning of period | 175,178 | 122,549 | ||
Cash and cash equivalents at end of period | 124,036 | 141,029 | 124,036 | 141,029 |
Consolidating and Eliminating Adjustments | ||||
Operating activities | ||||
Net income | (52,183) | (51,350) | (94,572) | (90,058) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Distributions from unconsolidated subsidiaries | 0 | 0 | ||
Depreciation and amortization | 0 | 0 | 0 | 0 |
Provision for bad debts | 0 | 0 | ||
Equity in earnings of unconsolidated subsidiaries | 0 | 0 | 0 | 0 |
Equity in earnings of consolidated subsidiaries | 52,183 | 51,350 | 94,572 | 90,058 |
Loss on extinguishment of debt | 0 | |||
Gain on sale of assets and businesses | 0 | 0 | ||
Stock compensation expense | 0 | 0 | ||
Amortization of debt discount, premium and issuance costs | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Changes in operating assets and liabilities, net of effects of business combinations: | ||||
Accounts receivable | 0 | 0 | ||
Other current assets | 0 | 0 | ||
Other assets | (335) | 0 | ||
Accounts payable | 0 | 0 | ||
Accrued expenses | 335 | 0 | ||
Income taxes | 0 | 0 | ||
Net cash provided by operating activities | 0 | 0 | ||
Investing activities | ||||
Business combinations, net of cash acquired | 0 | 0 | ||
Purchases of property and equipment | 0 | 0 | ||
Investment in businesses | 0 | 0 | ||
Proceeds from sale of assets and businesses | 0 | 0 | ||
Net cash used in investing activities | 0 | 0 | ||
Financing activities | ||||
Borrowings on revolving facilities | 0 | 0 | ||
Payments on revolving facilities | 0 | 0 | ||
Proceeds from term loans (financing costs) | 0 | |||
Payments on term loans | 0 | 0 | ||
Revolving facility debt issuance costs | 0 | |||
Borrowings of other debt | 0 | 0 | ||
Principal payments on other debt | 0 | 0 | ||
Dividends paid to Holdings | 0 | 0 | ||
Equity investment by Holdings | 0 | 0 | ||
Intercompany | 0 | 0 | ||
Increase (decrease) in overdrafts | 0 | 0 | ||
Proceeds from issuance of non-controlling interests | 0 | 0 | ||
Distributions to and purchases of non-controlling interests | 0 | 0 | ||
Net cash provided by (used in) financing activities | 0 | 0 | ||
Net increase (decrease) in cash and cash equivalents | 0 | 0 | ||
Cash and cash equivalents at beginning of period | 0 | 0 | ||
Cash and cash equivalents at end of period | 0 | 0 | 0 | 0 |
Select (Parent Company Only) | Reportable Legal Entities | ||||
Operating activities | ||||
Net income | 44,816 | 46,511 | 85,650 | 80,250 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Distributions from unconsolidated subsidiaries | 0 | 0 | ||
Depreciation and amortization | 2,213 | 2,355 | 4,444 | 4,562 |
Provision for bad debts | 0 | 0 | ||
Equity in earnings of unconsolidated subsidiaries | 0 | 0 | 0 | 0 |
Equity in earnings of consolidated subsidiaries | (47,496) | (44,510) | (82,674) | (74,935) |
Loss on extinguishment of debt | 115 | |||
Gain on sale of assets and businesses | 300 | (1,642) | ||
Stock compensation expense | 11,079 | 9,562 | ||
Amortization of debt discount, premium and issuance costs | 3,226 | 3,553 | ||
Deferred income taxes | (2,338) | 664 | ||
Changes in operating assets and liabilities, net of effects of business combinations: | ||||
Accounts receivable | 0 | 0 | ||
Other current assets | (10,868) | (876) | ||
Other assets | (167) | 945 | ||
Accounts payable | (46) | (1,470) | ||
Accrued expenses | (8,649) | (15,020) | ||
Income taxes | 18,425 | 14,757 | ||
Net cash provided by operating activities | 18,382 | 20,465 | ||
Investing activities | ||||
Business combinations, net of cash acquired | 0 | 0 | ||
Purchases of property and equipment | (2,415) | (5,232) | ||
Investment in businesses | 0 | 0 | ||
Proceeds from sale of assets and businesses | 0 | 1,655 | ||
Net cash used in investing activities | (2,415) | (3,577) | ||
Financing activities | ||||
Borrowings on revolving facilities | 635,000 | 265,000 | ||
Payments on revolving facilities | (460,000) | (345,000) | ||
Proceeds from term loans (financing costs) | (11) | |||
Payments on term loans | (98,807) | (5,750) | ||
Revolving facility debt issuance costs | (837) | |||
Borrowings of other debt | 5,613 | 5,549 | ||
Principal payments on other debt | (6,103) | (5,987) | ||
Dividends paid to Holdings | (13,620) | (889) | ||
Equity investment by Holdings | 459 | 1,620 | ||
Intercompany | (80,684) | 90,589 | ||
Increase (decrease) in overdrafts | 2,176 | (6,171) | ||
Proceeds from issuance of non-controlling interests | 0 | 0 | ||
Distributions to and purchases of non-controlling interests | 0 | 0 | ||
Net cash provided by (used in) financing activities | (15,966) | (1,887) | ||
Net increase (decrease) in cash and cash equivalents | 1 | 15,001 | ||
Cash and cash equivalents at beginning of period | 77 | 73 | ||
Cash and cash equivalents at end of period | 78 | 15,074 | 78 | 15,074 |
Subsidiary Guarantors | Reportable Legal Entities | ||||
Operating activities | ||||
Net income | 37,314 | 35,311 | 66,264 | 61,740 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Distributions from unconsolidated subsidiaries | 11,140 | 7,800 | ||
Depreciation and amortization | 22,866 | 20,535 | 43,400 | 39,982 |
Provision for bad debts | 28 | 41 | ||
Equity in earnings of unconsolidated subsidiaries | (7,370) | (4,776) | (11,713) | (9,460) |
Equity in earnings of consolidated subsidiaries | (4,687) | (6,840) | (11,898) | (15,123) |
Loss on extinguishment of debt | 0 | |||
Gain on sale of assets and businesses | (6,617) | (5,338) | ||
Stock compensation expense | 0 | 0 | ||
Amortization of debt discount, premium and issuance costs | 0 | 0 | ||
Deferred income taxes | (401) | 1,056 | ||
Changes in operating assets and liabilities, net of effects of business combinations: | ||||
Accounts receivable | (47,838) | 9,838 | ||
Other current assets | 558 | 1,927 | ||
Other assets | (1,019) | (9,261) | ||
Accounts payable | 4,192 | (7,516) | ||
Accrued expenses | 9,546 | 14,589 | ||
Income taxes | 491 | 4,401 | ||
Net cash provided by operating activities | 56,133 | 94,676 | ||
Investing activities | ||||
Business combinations, net of cash acquired | (61,861) | (2,666) | ||
Purchases of property and equipment | (36,648) | (44,865) | ||
Investment in businesses | (52,057) | (3,286) | ||
Proceeds from sale of assets and businesses | 88 | 5,017 | ||
Net cash used in investing activities | (150,478) | (45,800) | ||
Financing activities | ||||
Borrowings on revolving facilities | 0 | 0 | ||
Payments on revolving facilities | 0 | 0 | ||
Proceeds from term loans (financing costs) | 0 | |||
Payments on term loans | 0 | 0 | ||
Revolving facility debt issuance costs | 0 | |||
Borrowings of other debt | 0 | 0 | ||
Principal payments on other debt | (245) | (261) | ||
Dividends paid to Holdings | 0 | 0 | ||
Equity investment by Holdings | 0 | 0 | ||
Intercompany | 94,742 | (45,661) | ||
Increase (decrease) in overdrafts | 0 | 0 | ||
Proceeds from issuance of non-controlling interests | 0 | 0 | ||
Distributions to and purchases of non-controlling interests | (150) | (1,450) | ||
Net cash provided by (used in) financing activities | 94,347 | (47,372) | ||
Net increase (decrease) in cash and cash equivalents | 2 | 1,504 | ||
Cash and cash equivalents at beginning of period | 7,574 | 4,856 | ||
Cash and cash equivalents at end of period | 7,576 | 6,360 | 7,576 | 6,360 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Operating activities | ||||
Net income | 8,242 | 10,253 | 20,255 | 23,117 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Distributions from unconsolidated subsidiaries | 8 | 30 | ||
Depreciation and amortization | 5,435 | 4,137 | 9,904 | 8,107 |
Provision for bad debts | 1,735 | 0 | ||
Equity in earnings of unconsolidated subsidiaries | (24) | (9) | (47) | (22) |
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 | 0 |
Loss on extinguishment of debt | 0 | |||
Gain on sale of assets and businesses | (37) | 0 | ||
Stock compensation expense | 0 | 0 | ||
Amortization of debt discount, premium and issuance costs | 0 | 0 | ||
Deferred income taxes | 366 | 40 | ||
Changes in operating assets and liabilities, net of effects of business combinations: | ||||
Accounts receivable | (12,998) | (6,857) | ||
Other current assets | 2,624 | 2,956 | ||
Other assets | (3,152) | 1,110 | ||
Accounts payable | 2,491 | 1,864 | ||
Accrued expenses | (773) | 4,914 | ||
Income taxes | (151) | 1 | ||
Net cash provided by operating activities | 20,225 | 35,260 | ||
Investing activities | ||||
Business combinations, net of cash acquired | (3,974) | (22) | ||
Purchases of property and equipment | (22,284) | (14,809) | ||
Investment in businesses | (200) | 0 | ||
Proceeds from sale of assets and businesses | 37 | 0 | ||
Net cash used in investing activities | (26,421) | (14,831) | ||
Financing activities | ||||
Borrowings on revolving facilities | 0 | 0 | ||
Payments on revolving facilities | 0 | 0 | ||
Proceeds from term loans (financing costs) | 0 | |||
Payments on term loans | 0 | 0 | ||
Revolving facility debt issuance costs | 0 | |||
Borrowings of other debt | 8,617 | 9,820 | ||
Principal payments on other debt | (3,818) | (2,400) | ||
Dividends paid to Holdings | 0 | 0 | ||
Equity investment by Holdings | 0 | 0 | ||
Intercompany | (14,058) | (27,290) | ||
Increase (decrease) in overdrafts | 0 | 0 | ||
Proceeds from issuance of non-controlling interests | 18,288 | 957 | ||
Distributions to and purchases of non-controlling interests | (3,988) | (1,681) | ||
Net cash provided by (used in) financing activities | 5,041 | (20,594) | ||
Net increase (decrease) in cash and cash equivalents | (1,155) | (165) | ||
Cash and cash equivalents at beginning of period | 4,411 | 4,561 | ||
Cash and cash equivalents at end of period | 3,256 | 4,396 | 3,256 | 4,396 |
Select Medical Corporation | ||||
Operating activities | ||||
Net income | 59,986 | 60,559 | 113,330 | 104,541 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Distributions from unconsolidated subsidiaries | 11,148 | 7,830 | ||
Depreciation and amortization | 54,993 | 51,724 | 107,131 | 98,495 |
Provision for bad debts | 1,958 | 102 | ||
Equity in earnings of unconsolidated subsidiaries | (7,394) | (4,785) | (11,760) | (9,482) |
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 | 0 |
Loss on extinguishment of debt | 0 | 484 | ||
Gain on sale of assets and businesses | (6,354) | (6,980) | ||
Stock compensation expense | 12,613 | 10,911 | ||
Amortization of debt discount, premium and issuance costs | 6,326 | 6,486 | ||
Deferred income taxes | (6,290) | (1,691) | ||
Changes in operating assets and liabilities, net of effects of business combinations: | ||||
Accounts receivable | (85,873) | (5,774) | ||
Other current assets | (9,236) | (3,011) | ||
Other assets | (939) | 6,684 | ||
Accounts payable | 2,670 | (5,462) | ||
Accrued expenses | (18,156) | 1,207 | ||
Income taxes | 16,346 | 12,610 | ||
Net cash provided by operating activities | 132,914 | 216,950 | ||
Investing activities | ||||
Business combinations, net of cash acquired | (86,062) | (517,704) | ||
Purchases of property and equipment | (89,285) | (81,648) | ||
Investment in businesses | (52,257) | (3,291) | ||
Proceeds from sale of assets and businesses | 125 | 6,672 | ||
Net cash used in investing activities | (227,479) | (595,971) | ||
Financing activities | ||||
Borrowings on revolving facilities | 635,000 | 265,000 | ||
Payments on revolving facilities | (460,000) | (345,000) | ||
Proceeds from term loans (financing costs) | 0 | 779,904 | ||
Payments on term loans | (132,685) | (5,750) | ||
Revolving facility debt issuance costs | 0 | (1,333) | ||
Borrowings of other debt | 14,230 | 19,928 | ||
Principal payments on other debt | (12,680) | (11,521) | ||
Dividends paid to Holdings | (13,620) | (889) | ||
Equity investment by Holdings | 459 | 1,620 | ||
Intercompany | 0 | 0 | ||
Increase (decrease) in overdrafts | 2,176 | (6,171) | ||
Proceeds from issuance of non-controlling interests | 18,288 | 2,926 | ||
Distributions to and purchases of non-controlling interests | (7,745) | (301,213) | ||
Net cash provided by (used in) financing activities | 43,423 | 397,501 | ||
Net increase (decrease) in cash and cash equivalents | (51,142) | 18,480 | ||
Cash and cash equivalents at beginning of period | 175,178 | 122,549 | ||
Cash and cash equivalents at end of period | 124,036 | 141,029 | 124,036 | 141,029 |
Concentra Group Holdings Parent, LLC | Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Operating activities | ||||
Net income | 21,797 | 19,834 | 35,733 | 29,492 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Distributions from unconsolidated subsidiaries | 0 | 0 | ||
Depreciation and amortization | 24,479 | 24,697 | 49,383 | 45,844 |
Provision for bad debts | 195 | 61 | ||
Equity in earnings of unconsolidated subsidiaries | 0 | 0 | 0 | 0 |
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 | 0 |
Loss on extinguishment of debt | 369 | |||
Gain on sale of assets and businesses | 0 | 0 | ||
Stock compensation expense | 1,534 | 1,349 | ||
Amortization of debt discount, premium and issuance costs | 3,100 | 2,933 | ||
Deferred income taxes | (3,917) | (3,451) | ||
Changes in operating assets and liabilities, net of effects of business combinations: | ||||
Accounts receivable | (25,037) | (8,755) | ||
Other current assets | (1,550) | (7,018) | ||
Other assets | 3,734 | 13,890 | ||
Accounts payable | (3,967) | 1,660 | ||
Accrued expenses | (18,615) | (3,276) | ||
Income taxes | (2,419) | (6,549) | ||
Net cash provided by operating activities | 38,174 | 66,549 | ||
Investing activities | ||||
Business combinations, net of cash acquired | (20,227) | (515,016) | ||
Purchases of property and equipment | (27,938) | (16,742) | ||
Investment in businesses | 0 | (5) | ||
Proceeds from sale of assets and businesses | 0 | 0 | ||
Net cash used in investing activities | (48,165) | (531,763) | ||
Financing activities | ||||
Borrowings on revolving facilities | 0 | 0 | ||
Payments on revolving facilities | 0 | 0 | ||
Proceeds from term loans (financing costs) | 779,915 | |||
Payments on term loans | (33,878) | 0 | ||
Revolving facility debt issuance costs | (496) | |||
Borrowings of other debt | 0 | 4,559 | ||
Principal payments on other debt | (2,514) | (2,873) | ||
Dividends paid to Holdings | 0 | 0 | ||
Equity investment by Holdings | 0 | 0 | ||
Intercompany | 0 | (17,638) | ||
Increase (decrease) in overdrafts | 0 | 0 | ||
Proceeds from issuance of non-controlling interests | 0 | 1,969 | ||
Distributions to and purchases of non-controlling interests | (3,607) | (298,082) | ||
Net cash provided by (used in) financing activities | (39,999) | 467,354 | ||
Net increase (decrease) in cash and cash equivalents | (49,990) | 2,140 | ||
Cash and cash equivalents at beginning of period | 163,116 | 113,059 | ||
Cash and cash equivalents at end of period | $ 113,126 | $ 115,199 | $ 113,126 | $ 115,199 |