Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
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 $0.001 per share | |
Trading Symbol | SEM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 127,143,417 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001320414 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 101,167 | $ 97,906 |
Accounts receivable | 964,680 | 941,312 |
Prepaid income taxes | 16,513 | 31,868 |
Current portion of interest rate cap contract | 83,938 | 74,857 |
Other current assets | 138,186 | 125,370 |
Total Current Assets | 1,304,484 | 1,271,313 |
Operating lease right-of-use assets | 1,182,839 | 1,169,740 |
Property and equipment, net | 1,004,430 | 1,001,440 |
Goodwill | 3,486,050 | 3,484,200 |
Identifiable intangible assets, net | 346,733 | 351,662 |
Interest rate cap contract, net of current portion | 18,396 | 45,200 |
Other assets | 358,937 | 341,738 |
Total Assets | 7,701,869 | 7,665,293 |
Current Liabilities: | ||
Overdrafts | 31,494 | 31,961 |
Current operating lease liabilities | 241,517 | 236,784 |
Current portion of long-term debt and notes payable | 57,205 | 44,351 |
Accounts payable | 186,787 | 186,729 |
Accrued payroll | 191,061 | 209,789 |
Accrued vacation | 159,168 | 150,695 |
Accrued interest | 29,514 | 29,837 |
Accrued other | 283,257 | 264,525 |
Income taxes payable | 8,209 | 480 |
Total Current Liabilities | 1,188,212 | 1,155,151 |
Non-current operating lease liabilities | 1,021,314 | 1,008,394 |
Long-term debt, net of current portion | 3,695,341 | 3,835,211 |
Non-current deferred tax liability | 155,925 | 169,793 |
Other non-current liabilities | 105,123 | 106,137 |
Total Liabilities | 6,165,915 | 6,274,686 |
Commitments and contingencies (Note 13) | ||
Redeemable non-controlling interests | 34,375 | 34,043 |
Stockholders’ Equity: | ||
Common stock, $0.001 par value, 700,000,000 shares authorized, 127,173,871 and 127,387,869 shares issued and outstanding at 2022 and 2023, respectively | 127 | 127 |
Capital in excess of par | 473,942 | 452,183 |
Retained earnings | 696,922 | 581,010 |
Accumulated other comprehensive income | 75,047 | 88,602 |
Total Stockholders’ Equity | 1,246,038 | 1,121,922 |
Non-controlling interests | 255,541 | 234,642 |
Total Equity | 1,501,579 | 1,356,564 |
Total Liabilities and Equity | $ 7,701,869 | $ 7,665,293 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
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) | 127,387,869 | 127,173,871 |
Common stock, shares outstanding (in shares) | 127,387,869 | 127,173,871 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 1,674,528 | $ 1,584,741 | $ 3,339,508 | $ 3,184,288 |
Costs and expenses: | ||||
Cost of services, exclusive of depreciation and amortization | 1,423,603 | 1,390,550 | 2,842,422 | 2,797,560 |
General and administrative | 42,508 | 37,268 | 84,787 | 74,781 |
Depreciation and amortization | 49,939 | 51,081 | 102,364 | 102,120 |
Total costs and expenses | 1,516,050 | 1,478,899 | 3,029,573 | 2,974,461 |
Other operating income | 726 | 15,125 | 726 | 15,125 |
Income from operations | 159,204 | 120,967 | 310,661 | 224,952 |
Other income and expense: | ||||
Equity in earnings of unconsolidated subsidiaries | 10,501 | 6,167 | 19,057 | 11,564 |
Interest expense | (48,997) | (41,052) | (97,568) | (76,566) |
Income before income taxes | 120,708 | 86,082 | 232,150 | 159,950 |
Income tax expense | 28,848 | 19,820 | 55,033 | 37,762 |
Net income | 91,860 | 66,262 | 177,117 | 122,188 |
Less: Net income attributable to non-controlling interests | 13,623 | 11,055 | 28,075 | 17,864 |
Net income attributable to Select Medical Holdings Corporation | $ 78,237 | $ 55,207 | $ 149,042 | $ 104,324 |
Earnings per common share (Note 12): | ||||
Basic (in dollars per share) | $ 0.61 | $ 0.43 | $ 1.17 | $ 0.79 |
Diluted (in dollars per share) | $ 0.61 | $ 0.43 | $ 1.17 | $ 0.79 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 91,860 | $ 66,262 | $ 177,117 | $ 122,188 |
Other comprehensive income (loss), net of tax: | ||||
Gain on interest rate cap contract | 17,527 | 11,833 | 14,831 | 51,647 |
Reclassification adjustment for losses (gains) included in net income | (15,134) | (6) | (28,386) | 33 |
Net change, net of tax benefit (expense) of $(3,942), $(777), $(17,227), and $4,398 | 2,393 | 11,827 | (13,555) | 51,680 |
Comprehensive income | 94,253 | 78,089 | 163,562 | 173,868 |
Less: Comprehensive income attributable to non-controlling interests | 13,623 | 11,055 | 28,075 | 17,864 |
Comprehensive income attributable to Select Medical Holdings Corporation | $ 80,630 | $ 67,034 | $ 135,487 | $ 156,004 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax benefit (expense) on components of other comprehensive income | $ (777) | $ (3,942) | $ 4,398 | $ (17,227) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Equity and Income (unaudited) - USD ($) $ in Thousands | Total | Total Stockholders’ Equity | Common Stock | Capital in Excess of Par | Retained Earnings | Accumulated Other Comprehensive Income | Non-controlling Interests |
Beginning balance (in shares) at Dec. 31, 2021 | 133,884,000 | ||||||
Beginning balance at Dec. 31, 2021 | $ 1,325,902 | $ 1,109,981 | $ 134 | $ 504,314 | $ 593,251 | $ 12,282 | $ 215,921 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income attributable to Select Medical Holdings Corporation | 49,117 | 49,117 | 49,117 | ||||
Net income attributable to non-controlling interests | 4,891 | 0 | 4,891 | ||||
Cash dividends declared for common stockholders ($0.125 per share) | (16,691) | (16,691) | (16,691) | ||||
Issuance of restricted stock (in shares) | 13,000 | ||||||
Issuance of restricted stock | 0 | 0 | $ 0 | 0 | |||
Vesting of restricted stock | 8,288 | 8,288 | 8,288 | ||||
Repurchase of common shares (in shares) | (2,128,000) | ||||||
Repurchase of common shares | (51,676) | (51,676) | $ (2) | (23,459) | (28,215) | ||
Issuance of non-controlling interests | 5,229 | 651 | 651 | 4,578 | |||
Non-controlling interests acquired in business combination, measurement period adjustment | 12,463 | 0 | 12,463 | ||||
Distributions to and purchases of non-controlling interests | (9,097) | 0 | (9,097) | ||||
Redemption value adjustment on non-controlling interests | (1,381) | (1,381) | (1,381) | ||||
Other comprehensive income (loss) | 39,853 | 39,853 | 39,853 | ||||
Other | (2) | (2) | (2) | ||||
Ending balance (in shares) at Mar. 31, 2022 | 131,769,000 | ||||||
Ending balance at Mar. 31, 2022 | 1,366,896 | 1,138,140 | $ 132 | 489,794 | 596,079 | 52,135 | 228,756 |
Beginning balance (in shares) at Dec. 31, 2021 | 133,884,000 | ||||||
Beginning balance at Dec. 31, 2021 | 1,325,902 | 1,109,981 | $ 134 | 504,314 | 593,251 | 12,282 | 215,921 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income attributable to Select Medical Holdings Corporation | 104,324 | ||||||
Ending balance (in shares) at Jun. 30, 2022 | 126,491,000 | ||||||
Ending balance at Jun. 30, 2022 | 1,303,701 | 1,071,413 | $ 126 | 441,769 | 565,556 | 63,962 | 232,288 |
Beginning balance (in shares) at Mar. 31, 2022 | 131,769,000 | ||||||
Beginning balance at Mar. 31, 2022 | 1,366,896 | 1,138,140 | $ 132 | 489,794 | 596,079 | 52,135 | 228,756 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income attributable to Select Medical Holdings Corporation | 55,207 | 55,207 | 55,207 | ||||
Net income attributable to non-controlling interests | 9,155 | 0 | 9,155 | ||||
Cash dividends declared for common stockholders ($0.125 per share) | (16,108) | (16,108) | (16,108) | ||||
Issuance of restricted stock (in shares) | 211,000 | ||||||
Issuance of restricted stock | 0 | 0 | $ 0 | 0 | |||
Forfeitures of unvested restricted stock (in shares) | (6,000) | ||||||
Forfeitures of unvested restricted stock | 3 | 3 | $ 0 | 0 | 3 | ||
Vesting of restricted stock | 8,406 | 8,406 | 8,406 | ||||
Repurchase of common shares (in shares) | (5,483,000) | ||||||
Repurchase of common shares | (126,947) | (126,947) | $ (6) | (56,965) | (69,976) | ||
Issuance of non-controlling interests | 1,725 | 0 | 0 | 1,725 | |||
Distributions to and purchases of non-controlling interests | (6,814) | 534 | 534 | (7,348) | |||
Redemption value adjustment on non-controlling interests | 355 | 355 | 355 | ||||
Other comprehensive income (loss) | 11,827 | 11,827 | 11,827 | ||||
Other | (4) | (4) | (4) | 0 | |||
Ending balance (in shares) at Jun. 30, 2022 | 126,491,000 | ||||||
Ending balance at Jun. 30, 2022 | $ 1,303,701 | 1,071,413 | $ 126 | 441,769 | 565,556 | 63,962 | 232,288 |
Beginning balance (in shares) at Dec. 31, 2022 | 127,173,871 | 127,173,000 | |||||
Beginning balance at Dec. 31, 2022 | $ 1,356,564 | 1,121,922 | $ 127 | 452,183 | 581,010 | 88,602 | 234,642 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income attributable to Select Medical Holdings Corporation | 70,805 | 70,805 | 70,805 | ||||
Net income attributable to non-controlling interests | 12,811 | 0 | 12,811 | ||||
Cash dividends declared for common stockholders ($0.125 per share) | (15,897) | (15,897) | (15,897) | ||||
Issuance of restricted stock (in shares) | 3,000 | ||||||
Issuance of restricted stock | 0 | 0 | $ 0 | 0 | |||
Vesting of restricted stock | 10,003 | 10,003 | 10,003 | ||||
Issuance of non-controlling interests | 2,731 | 0 | 2,731 | ||||
Non-controlling interests acquired in business combination, measurement period adjustment | 3,877 | 0 | 3,877 | ||||
Distributions to and purchases of non-controlling interests | (6,069) | 0 | (6,069) | ||||
Redemption value adjustment on non-controlling interests | (436) | (436) | (436) | ||||
Other comprehensive income (loss) | (15,948) | (15,948) | (15,948) | ||||
Other | 0 | 0 | (1) | 1 | |||
Ending balance (in shares) at Mar. 31, 2023 | 127,176,000 | ||||||
Ending balance at Mar. 31, 2023 | $ 1,418,441 | 1,170,449 | $ 127 | 462,185 | 635,483 | 72,654 | 247,992 |
Beginning balance (in shares) at Dec. 31, 2022 | 127,173,871 | 127,173,000 | |||||
Beginning balance at Dec. 31, 2022 | $ 1,356,564 | 1,121,922 | $ 127 | 452,183 | 581,010 | 88,602 | 234,642 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income attributable to Select Medical Holdings Corporation | $ 149,042 | ||||||
Ending balance (in shares) at Jun. 30, 2023 | 127,387,869 | 127,388,000 | |||||
Ending balance at Jun. 30, 2023 | $ 1,501,579 | 1,246,038 | $ 127 | 473,942 | 696,922 | 75,047 | 255,541 |
Beginning balance (in shares) at Mar. 31, 2023 | 127,176,000 | ||||||
Beginning balance at Mar. 31, 2023 | 1,418,441 | 1,170,449 | $ 127 | 462,185 | 635,483 | 72,654 | 247,992 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income attributable to Select Medical Holdings Corporation | 78,237 | 78,237 | 78,237 | ||||
Net income attributable to non-controlling interests | 11,539 | 0 | 11,539 | ||||
Cash dividends declared for common stockholders ($0.125 per share) | (15,924) | (15,924) | (15,924) | ||||
Issuance of restricted stock (in shares) | 261,000 | ||||||
Issuance of restricted stock | 0 | 0 | $ 0 | 0 | |||
Vesting of restricted stock | 10,326 | 10,326 | 10,326 | ||||
Repurchase of common shares (in shares) | (49,000) | ||||||
Repurchase of common shares | (1,506) | (1,506) | $ 0 | (634) | (872) | ||
Issuance of non-controlling interests | 12,081 | 1,870 | 1,870 | 10,211 | |||
Distributions to and purchases of non-controlling interests | (14,006) | 195 | 195 | (14,201) | |||
Redemption value adjustment on non-controlling interests | (2) | (2) | (2) | ||||
Other comprehensive income (loss) | $ 2,393 | 2,393 | 2,393 | ||||
Ending balance (in shares) at Jun. 30, 2023 | 127,387,869 | 127,388,000 | |||||
Ending balance at Jun. 30, 2023 | $ 1,501,579 | $ 1,246,038 | $ 127 | $ 473,942 | $ 696,922 | $ 75,047 | $ 255,541 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Equity and Income (unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividend declared (in dollars per share) | $ 0.125 | $ 0.125 | $ 0.125 | $ 0.125 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Operating activities | ||
Net income | $ 177,117 | $ 122,188 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Distributions from unconsolidated subsidiaries | 8,841 | 11,140 |
Depreciation and amortization | 102,364 | 102,120 |
Provision for expected credit losses | 761 | 111 |
Equity in earnings of unconsolidated subsidiaries | (19,057) | (11,564) |
Gain on sale or disposal of assets | (23) | (1,476) |
Stock compensation expense | 20,508 | 17,769 |
Amortization of debt discount, premium and issuance costs | 1,174 | 1,123 |
Deferred income taxes | (10,876) | (1,965) |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | (23,135) | (32,431) |
Other current assets | (5,997) | (2,128) |
Other assets | 5,472 | 1,275 |
Accounts payable | 7,096 | 4,879 |
Accrued expenses | 22,033 | 44,296 |
Government advances | 0 | (77,319) |
Net cash provided by operating activities | 286,278 | 178,018 |
Investing activities | ||
Business combinations, net of cash acquired | (7,732) | (19,241) |
Purchases of property, equipment, and other assets | (118,399) | (93,177) |
Investment in businesses | (9,800) | (6,990) |
Proceeds from sale of assets | 56 | 5,314 |
Net cash used in investing activities | (135,875) | (114,094) |
Financing activities | ||
Borrowings on revolving facilities | 435,000 | 565,000 |
Payments on revolving facilities | (535,000) | (375,000) |
Borrowings of other debt | 22,298 | 17,494 |
Principal payments on other debt | (26,373) | (16,874) |
Dividends paid to common stockholders | (31,821) | (32,799) |
Repurchase of common stock | (1,506) | (178,623) |
Decrease in overdrafts | (467) | (11,055) |
Proceeds from issuance of non-controlling interests | 14,812 | 6,955 |
Distributions to and purchases of non-controlling interests | (24,085) | (18,663) |
Net cash used in financing activities | (147,142) | (43,565) |
Net increase in cash and cash equivalents | 3,261 | 20,359 |
Cash and cash equivalents at beginning of period | 97,906 | 74,310 |
Cash and cash equivalents at end of period | 101,167 | 94,669 |
Supplemental information | ||
Cash paid for interest, excluding amounts received of $103 and $38,284 under the interest rate cap contract | 133,581 | 74,217 |
Cash paid for taxes | $ 42,755 | $ 16,423 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Cash Flows (unaudited) (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Cash Flows [Abstract] | ||
Interest received under interest rate cash flow hedge | $ 38,284 | $ 103 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
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, Select, and Select’s subsidiaries are collectively referred to as the “Company.” The unaudited condensed consolidated financial statements of the Company as of June 30, 2023, and for the three and six month periods ended June 30, 2022 and 2023, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim reporting and the 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 the 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, 2023, are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2023. 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, 2022, contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 23, 2023. |
Accounting Policies
Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Recent Accounting Guidance Not Yet Adopted In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-01, Leases (Topic 842): Common Control Arrangements , which requires companies to amortize leasehold improvements associated with related party leases under common control over the useful life of the leasehold improvement to the common control group. The ASU is effective for annual reporting periods beginning on or after December 15, 2023; however, early adoption is permitted. The ASU can either be applied prospectively or retrospectively. The Company is currently evaluating this ASU, but does not expect it to have a material impact on its consolidated financial statements upon adoption. The Company plans to adopt the ASU using the prospective method as of January 1, 2024. Recently Adopted Accounting Guidance Reference Rate Reform In December 2022, FASB issued ASU 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848 , which extended the relief provided under Topic 848 to contract modifications made and hedging relationships entered into on or before December 31, 2024. The FASB had previously issued ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting in March 2020, which provided temporary relief from some of the existing accounting rules governing contract modifications when the modification is related to the replacement of the London Interbank Offered Rate (“LIBOR”) or other reference rates discontinued as a result of reference rate reform. For eligible contract modifications, the update generally allows an entity to account for and present modifications as an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. That is, the modified contract is accounted for as a continuation of the existing contract. For cash flow hedging relationships affected by reference rate reform, Topic 848 provides expedients that allow an entity to (i) change the reference rate of either the forecasted transaction or hedging instrument without requiring dedesignation of the hedging relationship; (ii) assert that changes to the hedged forecasted transaction will not impact whether it remains probable of occurring; and (iii) for the purposes of assessing hedge effectiveness, assume that the reference rate will not be replaced for the remainder of the hedging relationship if both the hedged forecasted transaction and hedging instrument are expected to be impacted by reference rate reform. In March 2021, the Financial Conduct Authority announced June 30, 2023 as the intended cessation date of the one-, three-, six-, and 12-month tenors of USD LIBOR. Provisions within the credit agreement provide the Company with the ability to agree with JPMorgan Chase Bank, N.A., as administrative agent to the lenders, to replace LIBOR with a different reference rate in the event that LIBOR ceases to exist. On May 31, 2023, the Company replaced LIBOR with the forward looking Secured Overnight Financing Rate (“Adjusted Term SOFR”) within the credit agreement. On May 31, 2023, the Company also modified the cash flow hedge’s contractual terms to replace LIBOR with SOFR. The amendment to the credit agreement is described further in Note 7 -Long-term Debt and Notes Payable. The Company’s cash flow hedge is described further in Note 8 – Interest Rate Cap. These updates have not had a material impact on the Company's consolidated financial statements. 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, liabilities, revenues, and expenses. Actual results could differ from those estimates. |
Credit Risk Concentrations
Credit Risk Concentrations | 6 Months Ended |
Jun. 30, 2023 | |
Credit Loss [Abstract] | |
Credit Risk Concentrations | Credit Risk Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash balances and accounts receivable. 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. Because of the diversity in the Company’s non-governmental third-party payor base, as well as their geographic dispersion, accounts receivable due from the Medicare program represent the Company’s only significant concentration of credit risk. Approximately 19% of the Company’s accounts receivable is due from Medicare at both December 31, 2022 and June 30, 2023. |
Redeemable Non-Controlling Inte
Redeemable Non-Controlling Interests | 6 Months Ended |
Jun. 30, 2023 | |
Noncontrolling Interest [Abstract] | |
Redeemable Non-Controlling Interests | Redeemable Non-Controlling Interests The ownership interests held by outside parties in subsidiaries, which include 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, after the attribution of net income or loss. The changes in redeemable non-controlling interests are as follows: Six Months Ended June 30, 2022 2023 (in thousands) Balance as of January 1 $ 39,033 $ 34,043 Net income attributable to redeemable non-controlling interests 1,918 1,641 Distributions to redeemable non-controlling interests (1,198) (1,900) Redemption value adjustment on redeemable non-controlling interests 1,381 436 Other 536 179 Balance as of March 31 $ 41,670 $ 34,399 Net income attributable to redeemable non-controlling interests 1,900 2,084 Distributions to and purchases of redeemable non-controlling interests (1,553) (2,110) Redemption value adjustment on redeemable non-controlling interests (355) 2 Other 535 — Balance as of June 30 $ 42,197 $ 34,375 |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities Certain states prohibit the “corporate practice of medicine,” which restricts the Company from owning medical practices which directly employ physicians or therapists and from exercising control over medical decisions by physicians and therapists. In these states, the Company enters into long-term management agreements with medical practices that are owned by licensed physicians or therapists, which, in turn, employ or contract with physicians or therapists who provide professional medical services. The management agreements provide for the Company to direct the transfer of ownership of the medical practices. Based on the provisions of the management agreements, the medical practices are variable interest entities for which the Company is the primary beneficiary. As of December 31, 2022, and June 30, 2023, the total assets of the Company’s variable interest entities were $232.1 million and $263.6 million, respectively, and are principally comprised of accounts receivable. As of December 31, 2022, and June 30, 2023, the total liabilities of the Company’s variable interest entities were $78.8 million and $84.1 million, respectively, and are principally comprised of accounts payable and accrued expenses. These variable interest entities have obligations payable for services received under their management agreements with the Company of $158.3 million and $186.7 million as of December 31, 2022, and June 30, 2023, respectively. These intercompany balances are eliminated in consolidation. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company has operating and finance leases for its facilities. The Company leases its corporate office space from related parties. The Company’s total lease cost is as follows: Three Months Ended June 30, 2022 Three Months Ended June 30, 2023 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total (in thousands) Operating lease cost $ 73,969 $ 1,809 $ 75,778 $ 76,892 $ 1,833 $ 78,725 Finance lease cost: Amortization of right-of-use assets 377 — 377 404 — 404 Interest on lease liabilities 336 — 336 387 — 387 Short-term lease cost 15 — 15 — — — Variable lease cost 14,407 141 14,548 16,532 — 16,532 Sublease income (1,940) — (1,940) (1,716) — (1,716) Total lease cost $ 87,164 $ 1,950 $ 89,114 $ 92,499 $ 1,833 $ 94,332 Six Months Ended June 30, 2022 Six Months Ended June 30, 2023 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total (in thousands) Operating lease cost $ 147,931 $ 3,618 $ 151,549 $ 153,524 $ 3,667 $ 157,191 Finance lease cost: Amortization of right-of-use assets 724 — 724 798 — 798 Interest on lease liabilities 676 — 676 707 — 707 Short-term lease cost 50 — 50 — — — Variable lease cost 28,062 180 28,242 32,293 84 32,377 Sublease income (3,906) — (3,906) (3,394) — (3,394) Total lease cost $ 173,537 $ 3,798 $ 177,335 $ 183,928 $ 3,751 $ 187,679 |
Leases | Leases The Company has operating and finance leases for its facilities. The Company leases its corporate office space from related parties. The Company’s total lease cost is as follows: Three Months Ended June 30, 2022 Three Months Ended June 30, 2023 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total (in thousands) Operating lease cost $ 73,969 $ 1,809 $ 75,778 $ 76,892 $ 1,833 $ 78,725 Finance lease cost: Amortization of right-of-use assets 377 — 377 404 — 404 Interest on lease liabilities 336 — 336 387 — 387 Short-term lease cost 15 — 15 — — — Variable lease cost 14,407 141 14,548 16,532 — 16,532 Sublease income (1,940) — (1,940) (1,716) — (1,716) Total lease cost $ 87,164 $ 1,950 $ 89,114 $ 92,499 $ 1,833 $ 94,332 Six Months Ended June 30, 2022 Six Months Ended June 30, 2023 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total (in thousands) Operating lease cost $ 147,931 $ 3,618 $ 151,549 $ 153,524 $ 3,667 $ 157,191 Finance lease cost: Amortization of right-of-use assets 724 — 724 798 — 798 Interest on lease liabilities 676 — 676 707 — 707 Short-term lease cost 50 — 50 — — — Variable lease cost 28,062 180 28,242 32,293 84 32,377 Sublease income (3,906) — (3,906) (3,394) — (3,394) Total lease cost $ 173,537 $ 3,798 $ 177,335 $ 183,928 $ 3,751 $ 187,679 |
Long-Term Debt and Notes Payabl
Long-Term Debt and Notes Payable | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Notes Payable | Long-Term Debt and Notes Payable As of June 30, 2023, the Company’s long-term debt and notes payable are as follows: Principal Unamortized Premium (Discount) Unamortized Carrying Value Fair Value (in thousands) 6.250% senior notes $ 1,225,000 $ 18,562 $ (9,456) $ 1,234,106 $ 1,204,175 Credit facilities: Revolving facility 345,000 — — 345,000 343,706 Term loan 2,103,437 (3,379) (3,684) 2,096,374 2,098,178 Other debt, including finance leases 77,164 — (98) 77,066 77,066 Total debt $ 3,750,601 $ 15,183 $ (13,238) $ 3,752,546 $ 3,723,125 Principal maturities of the Company’s long-term debt and notes payable are approximately as follows: 2023 2024 2025 2026 2027 Thereafter Total (in thousands) 6.250% senior notes $ — $ — $ — $ 1,225,000 $ — $ — $ 1,225,000 Credit facilities: Revolving facility — 31,846 313,154 — — — 345,000 Term loan 4,757 11,150 2,087,530 — — — 2,103,437 Other debt, including finance leases 11,738 51,046 1,408 1,309 823 10,840 77,164 Total debt $ 16,495 $ 94,042 $ 2,402,092 $ 1,226,309 $ 823 $ 10,840 $ 3,750,601 As of December 31, 2022, the Company’s long-term debt and notes payable are as follows: Principal Unamortized Premium (Discount) Unamortized Carrying Value Fair Value (in thousands) 6.250% senior notes $ 1,225,000 $ 21,555 $ (10,948) $ 1,235,607 $ 1,163,689 Credit facilities: Revolving facility 445,000 — — 445,000 443,331 Term loan 2,103,437 (4,376) (4,771) 2,094,290 2,056,110 Other debt, including finance leases 104,800 — (135) 104,665 104,665 Total debt $ 3,878,237 $ 17,179 $ (15,854) $ 3,879,562 $ 3,767,795 Select Credit Facilities On May 31, 2023, Select entered into Amendment No. 7 to the Select credit agreement. Amendment No. 7 replaced the interest rate based on LIBOR and LIBOR-based mechanics applicable to borrowings under the Select credit agreement with an interest rate based on Adjusted Term SOFR (as defined in the credit agreement). The Adjusted Term SOFR Rate includes a credit spread adjustment of 0.10%. On July 31, 2023, the Company entered into Amendment No. 8 to the Select credit agreement. Amendment No. 8 provides for a new tranche of refinancing term loan in an aggregate principal amount of $2,103.0 million to replace the existing term loans and a $710.0 million new revolving credit facility to replace the existing revolving credit facility. The refinancing term loan and the extended revolving credit facility will mature on March 6, 2027, with an early springing maturity 90 days prior to the senior notes maturity, triggered if more than $300.0 million of senior notes remain outstanding on May 15, 2026. The refinancing term loan has an interest rate of Term SOFR (without the 0.10% credit spread adjustment) plus 3.00% and the refinancing revolving credit facility has an interest rate of Adjusted Term SOFR plus 2.50%, in each case, subject to a leverage-based pricing grid. |
Interest Rate Cap
Interest Rate Cap | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Cap | Interest Rate Cap The Company is subject to market risk exposure arising from changes in interest rates on its term loan. The term loan bears interest at a variable rate that is indexed to a benchmark which changed from LIBOR to SOFR on May 31, 2023. The Company’s objective in using an interest rate derivative is to mitigate its exposure to increases in interest rates. The interest rate cap limits the Company’s exposure to increases in the variable interest rate to 1.0% on $2.0 billion of principal outstanding under the term loan, as the interest rate cap provides for payments from the counterparty when interest rates rise above 1.0%. The interest rate cap has a $2.0 billion notional amount and is effective through September 30, 2024. The Company will pay a monthly premium for the interest rate cap over the term of the agreement. The annual premium is equal to 0.0916% of the notional amount, or approximately $1.8 million. The interest rate cap has been designated as a cash flow hedge and is highly effective at offsetting the changes in cash outflows when the variable interest rate exceeds 1.0%. Changes in the fair value of the interest rate cap, net of tax, are recognized in other comprehensive income and are reclassified out of accumulated other comprehensive income and into interest expense when the hedged interest obligations affect earnings. The following table outlines the changes in accumulated other comprehensive income (loss), net of tax, during the periods presented: Six Months Ended June 30, 2022 2023 (in thousands) Balance as of January 1 $ 12,282 $ 88,602 Gain (loss) on interest rate cap cash flow hedge 39,814 (2,696) Amounts reclassified from accumulated other comprehensive income 39 (13,252) Balance as of March 31 $ 52,135 $ 72,654 Gain on interest rate cap cash flow hedge 11,833 17,527 Amounts reclassified from accumulated other comprehensive income (6) (15,134) Balance as of June 30 $ 63,962 $ 75,047 The effects on net income of amounts reclassified from accumulated other comprehensive income are as follows: Three Months Ended June 30, Six Months Ended June 30, Statement of Operations 2022 2023 2022 2023 (in thousands) Gains (losses) included in interest expense $ 8 $ 20,045 $ (43) $ 37,597 Income tax benefit (expense) (2) (4,911) 10 (9,211) Amounts reclassified from accumulated other comprehensive income $ 6 $ 15,134 $ (33) $ 28,386 The Company expects that approximately $82.1 million of estimated pre-tax gains will be reclassified from accumulated other comprehensive income into interest expense within the next twelve months. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial instruments which are measured at fair value, or for which a fair value is disclosed, are classified in the fair value hierarchy, as outlined below, on the basis of the observability of the inputs used in the fair value measurement: • Level 1 – inputs are based upon quoted prices for identical instruments in active markets. • Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data. • Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the instrument. The Company’s interest rate cap contract is recorded at its fair value in the condensed consolidated balance sheets on a recurring basis. The fair value of the interest rate cap contract is based upon a model-derived valuation using observable market inputs, such as interest rates and interest rate volatility, and the strike price. Financial Instrument Balance Sheet Classification Level December 31, 2022 June 30, 2023 Asset: (in thousands) Interest rate cap contract, current portion Current portion of interest rate cap contract Level 2 $ 74,857 $ 83,938 Interest rate cap contract, non-current portion Interest rate cap contract, net of current portion Level 2 45,200 18,396 The Company does not measure its indebtedness at fair value in its condensed consolidated balance sheets. The fair value of the credit facilities is based on quoted market prices for this debt in the syndicated loan market. The fair value of the senior notes is based on quoted market prices. The carrying value of the Company’s other debt, as disclosed in Note 7 – Long-Term Debt and Notes Payable, approximates fair value. December 31, 2022 June 30, 2023 Financial Instrument Level Carrying Value Fair Value Carrying Value Fair Value (in thousands) 6.250% senior notes Level 2 $ 1,235,607 $ 1,163,689 $ 1,234,106 $ 1,204,175 Credit facilities: Revolving facility Level 2 445,000 443,331 345,000 343,706 Term loan Level 2 2,094,290 2,056,110 2,096,374 2,098,178 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company’s reportable segments consist of 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. The Company evaluates the performance of its 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, gain (loss) on sale of businesses, 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. Three Months Ended June 30, Six Months Ended June 30, 2022 2023 2022 2023 (in thousands) Revenue: Critical illness recovery hospital $ 545,908 $ 575,091 $ 1,147,663 $ 1,169,017 Rehabilitation hospital 228,887 240,856 449,521 472,318 Outpatient rehabilitation 287,258 302,972 559,198 598,875 Concentra 441,357 467,079 864,780 923,377 Other 81,331 88,530 163,126 175,921 Total Company $ 1,584,741 $ 1,674,528 $ 3,184,288 $ 3,339,508 Adjusted EBITDA: Critical illness recovery hospital $ 20,019 $ 65,496 $ 55,986 $ 142,269 Rehabilitation hospital 49,845 54,689 92,224 101,905 Outpatient rehabilitation 33,601 32,850 60,197 63,049 Concentra 92,607 100,391 182,076 194,139 Other (1) (15,078) (33,957) (45,642) (67,830) Total Company $ 180,994 $ 219,469 $ 344,841 $ 433,532 Total assets: Critical illness recovery hospital $ 2,387,516 $ 2,492,370 $ 2,387,516 $ 2,492,370 Rehabilitation hospital 1,194,739 1,209,737 1,194,739 1,209,737 Outpatient rehabilitation 1,360,600 1,399,782 1,360,600 1,399,782 Concentra 2,301,296 2,314,328 2,301,296 2,314,328 Other 307,507 285,652 307,507 285,652 Total Company $ 7,551,658 $ 7,701,869 $ 7,551,658 $ 7,701,869 Purchases of property, equipment, and other assets: Critical illness recovery hospital $ 19,528 $ 31,363 $ 39,097 $ 55,021 Rehabilitation hospital 4,821 1,903 11,095 10,485 Outpatient rehabilitation 9,314 10,476 18,728 20,408 Concentra 8,716 15,846 18,956 30,246 Other 3,953 (74) 5,301 2,239 Total Company $ 46,332 $ 59,514 $ 93,177 $ 118,399 _______________________________________________________________________________ (1) For the three and six months ended June 30, 2022, Adjusted EBITDA included other operating income of $15.1 million. The other operating income is related to the recognition of payments received under the Provider Relief Fund for health care related expenses and loss of revenue attributable to COVID-19. A reconciliation of Adjusted EBITDA to income before income taxes is as follows: Three Months Ended June 30, 2022 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ 20,019 $ 49,845 $ 33,601 $ 92,607 $ (15,078) Depreciation and amortization (14,603) (7,175) (8,130) (18,730) (2,443) Stock compensation expense — — — (536) (8,410) Income (loss) from operations $ 5,416 $ 42,670 $ 25,471 $ 73,341 $ (25,931) $ 120,967 Equity in earnings of unconsolidated subsidiaries 6,167 Interest expense (41,052) Income before income taxes $ 86,082 Three Months Ended June 30, 2023 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ 65,496 $ 54,689 $ 32,850 $ 100,391 $ (33,957) Depreciation and amortization (13,886) (6,887) (8,779) (18,283) (2,104) Stock compensation expense — — — — (10,326) Income (loss) from operations $ 51,610 $ 47,802 $ 24,071 $ 82,108 $ (46,387) $ 159,204 Equity in earnings of unconsolidated subsidiaries 10,501 Interest expense (48,997) Income before income taxes $ 120,708 Six Months Ended June 30, 2022 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ 55,986 $ 92,224 $ 60,197 $ 182,076 $ (45,642) Depreciation and amortization (29,221) (13,977) (16,159) (37,542) (5,221) Stock compensation expense — — — (1,071) (16,698) Income (loss) from operations $ 26,765 $ 78,247 $ 44,038 $ 143,463 $ (67,561) $ 224,952 Equity in earnings of unconsolidated subsidiaries 11,564 Interest expense (76,566) Income before income taxes $ 159,950 Six Months Ended June 30, 2023 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ 142,269 $ 101,905 $ 63,049 $ 194,139 $ (67,830) Depreciation and amortization (30,523) (13,775) (17,236) (36,593) (4,237) Stock compensation expense — — — (178) (20,329) Income (loss) from operations $ 111,746 $ 88,130 $ 45,813 $ 157,368 $ (92,396) $ 310,661 Equity in earnings of unconsolidated subsidiaries 19,057 Interest expense (97,568) Income before income taxes $ 232,150 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The following tables disaggregate the Company’s revenue for the three and six months ended June 30, 2022 and 2023: Three Months Ended June 30, 2022 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Patient service revenue: Medicare $ 213,680 $ 105,030 $ 44,433 $ 195 $ — $ 363,338 Non-Medicare 329,118 113,001 224,957 439,779 — 1,106,855 Total patient services revenues 542,798 218,031 269,390 439,974 — 1,470,193 Other revenue 3,110 10,856 17,868 1,383 81,331 114,548 Total revenue $ 545,908 $ 228,887 $ 287,258 $ 441,357 $ 81,331 $ 1,584,741 Three Months Ended June 30, 2023 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Patient service revenue: Medicare $ 207,743 $ 113,450 $ 46,647 $ 250 $ — $ 368,090 Non-Medicare 366,498 115,436 236,246 465,367 — 1,183,547 Total patient services revenues 574,241 228,886 282,893 465,617 — 1,551,637 Other revenue 850 11,970 20,079 1,462 88,530 122,891 Total revenue $ 575,091 $ 240,856 $ 302,972 $ 467,079 $ 88,530 $ 1,674,528 Six Months Ended June 30, 2022 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Patient service revenue: Medicare $ 432,667 $ 208,051 $ 86,337 $ 372 $ — $ 727,427 Non-Medicare 710,104 220,143 439,070 861,825 — 2,231,142 Total patient services revenues 1,142,771 428,194 525,407 862,197 — 2,958,569 Other revenue 4,892 21,327 33,791 2,583 163,126 225,719 Total revenue $ 1,147,663 $ 449,521 $ 559,198 $ 864,780 $ 163,126 $ 3,184,288 Six Months Ended June 30, 2023 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Patient service revenue: Medicare $ 437,126 $ 223,505 $ 92,448 $ 493 $ — $ 753,572 Non-Medicare 729,803 225,361 468,231 919,965 — 2,343,360 Total patient services revenues 1,166,929 448,866 560,679 920,458 — 3,096,932 Other revenue 2,088 23,452 38,196 2,919 175,921 242,576 Total revenue $ 1,169,017 $ 472,318 $ 598,875 $ 923,377 $ 175,921 $ 3,339,508 |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2023 | |
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 contractual dividends paid for the three and six months ended June 30, 2022 and 2023. (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. (iii) 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 and Diluted EPS Three Months Ended June 30, Six Months Ended June 30, 2022 2023 2022 2023 (in thousands) Net income $ 66,262 $ 91,860 $ 122,188 $ 177,117 Less: net income attributable to non-controlling interests 11,055 13,623 17,864 28,075 Net income attributable to the Company 55,207 78,237 104,324 149,042 Less: Distributed and undistributed income attributable to participating securities 1,920 2,877 3,558 5,449 Distributed and undistributed income attributable to common shares $ 53,287 $ 75,360 $ 100,766 $ 143,593 The following tables set forth the computation of EPS under the two-class method: Three Months Ended June 30, 2022 2023 Net Income Allocation Shares (1) Basic and Diluted EPS Net Income Allocation Shares (1) Basic and Diluted EPS (in thousands, except for per share amounts) Common shares $ 53,287 124,897 $ 0.43 $ 75,360 122,634 $ 0.61 Participating securities 1,920 4,500 $ 0.43 2,877 4,681 $ 0.61 Total Company $ 55,207 $ 78,237 Six Months Ended June 30, 2022 2023 Net Income Allocation Shares (1) Basic and Diluted EPS Net Income Allocation Shares (1) Basic and Diluted EPS (in thousands, except for per share amounts) Common shares $ 100,766 126,942 $ 0.79 $ 143,593 122,594 $ 1.17 Participating securities 3,558 4,482 $ 0.79 5,449 4,652 $ 1.17 Total Company $ 104,324 $ 149,042 _______________________________________________________________________________ (1) Represents the weighted average share count outstanding during the period. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
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 hospital and outpatient clinic operations, the Company currently maintains insurance coverages under a combination of policies with a total annual aggregate limit of up to $37.0 million for professional malpractice liability insurance and $40.0 million for general liability insurance. For the Company’s Concentra center operations, the Company currently maintains insurance coverages under a combination of policies with a total annual aggregate limit of up to $19.0 million for professional malpractice liability insurance and $19.0 million for general liability insurance. 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 designed a separate insurance program that responds to the risks of specific joint ventures. Most of the Company’s joint ventures are insured under a master program with an annual aggregate limit of up to $80.0 million, subject to a sublimit aggregate ranging from $23.0 million to $33.0 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 also maintains additional types of liability insurance covering claims, that due to their nature or amount, are not covered by or not fully covered by the Company’s professional and general liability insurance policies. These insurance policies also do not generally cover punitive damages and are subject to various deductibles and policy limits. The Company reviews its insurance program annually and may make adjustments to the amount of insurance coverage and self-insured retentions in future years. 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. Oklahoma City Subpoena. On August 24, 2020, the Company and Select Specialty Hospital – Oklahoma City, Inc. (“SSH–Oklahoma City”) received Civil Investigative Demands (“CIDs”) from the U.S. Attorney’s Office for the Western District of Oklahoma seeking responses to interrogatories and the production of various documents principally relating to the documentation, billing and reviews of medical services furnished to patients at SSH-Oklahoma City. The Company understands that the investigation arose from a qui tam lawsuit alleging billing fraud related to charges for respiratory therapy services at SSH-Oklahoma City and Select Specialty Hospital - Wichita, Inc. The Company has produced documents in response to the CIDs and is fully cooperating with this investigation. At this time, the Company is unable to predict the timing and outcome of this matter. Physical Therapy Billing. On October 7, 2021, the Company received a letter from a Trial Attorney at the U.S. Department of Justice, Civil Division, Commercial Litigation Branch, Fraud Section (“DOJ”) stating that the DOJ, in conjunction with the U.S. Department of Health and Human Services (“HHS”), is investigating the Company in connection with potential violations of the False Claims Act, 31 U.S.C. § 3729, et seq . The letter specified that the investigation relates to the Company’s billing for physical therapy services, and indicated that the DOJ would be requesting certain records from the Company. In 2021, the DOJ requested, and the Company furnished, records relating to six of the Company’s outpatient therapy clinics in Florida. In 2022, the DOJ requested certain data relating to all of the Company’s outpatient therapy clinics nationwide, and sought information about the Company’s ability to produce additional data relating to the physical therapy services furnished by the Company’s outpatient therapy clinics and Concentra. The Company has produced data and other documents requested by the DOJ and is fully cooperating on 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, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On August 2, 2023, the Company’s Board of Directors declared a cash dividend of $0.125 per share. The dividend will be payable on or about September 1, 2023, to stockholders of record as of the close of business on August 15, 2023. On July 31, 2023, the Company entered into Amendment No. 8 to the Select credit agreement. Amendment No. 8 provides for a new tranche of refinancing term loan in an aggregate principal amount of $2,103.0 million to replace the existing term loans and a $710.0 million new revolving credit facility to replace the existing revolving credit facility. The refinancing term loan and the extended revolving credit facility will mature on March 6, 2027, with an early springing maturity 90 days prior to the senior notes maturity, triggered if more than $300.0 million of senior notes remain outstanding on May 15, 2026. The refinancing term loan has an interest rate of Term SOFR (without the 0.10% credit spread adjustment) plus 3.00% and the refinancing revolving credit facility has an interest rate of Adjusted Term SOFR plus 2.50%, in each case, subject to a leverage-based pricing grid. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||||
Net income attributable to Select Medical Holdings Corporation | $ 78,237 | $ 70,805 | $ 55,207 | $ 49,117 | $ 149,042 | $ 104,324 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Accounting Policies (Policies)
Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Recent Accounting Guidance Not Yet Adopted and Recently Adopted Accounting Guidance | Recent Accounting Guidance Not Yet Adopted In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-01, Leases (Topic 842): Common Control Arrangements , which requires companies to amortize leasehold improvements associated with related party leases under common control over the useful life of the leasehold improvement to the common control group. The ASU is effective for annual reporting periods beginning on or after December 15, 2023; however, early adoption is permitted. The ASU can either be applied prospectively or retrospectively. The Company is currently evaluating this ASU, but does not expect it to have a material impact on its consolidated financial statements upon adoption. The Company plans to adopt the ASU using the prospective method as of January 1, 2024. Recently Adopted Accounting Guidance Reference Rate Reform In December 2022, FASB issued ASU 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848 , which extended the relief provided under Topic 848 to contract modifications made and hedging relationships entered into on or before December 31, 2024. The FASB had previously issued ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting in March 2020, which provided temporary relief from some of the existing accounting rules governing contract modifications when the modification is related to the replacement of the London Interbank Offered Rate (“LIBOR”) or other reference rates discontinued as a result of reference rate reform. For eligible contract modifications, the update generally allows an entity to account for and present modifications as an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. That is, the modified contract is accounted for as a continuation of the existing contract. For cash flow hedging relationships affected by reference rate reform, Topic 848 provides expedients that allow an entity to (i) change the reference rate of either the forecasted transaction or hedging instrument without requiring dedesignation of the hedging relationship; (ii) assert that changes to the hedged forecasted transaction will not impact whether it remains probable of occurring; and (iii) for the purposes of assessing hedge effectiveness, assume that the reference rate will not be replaced for the remainder of the hedging relationship if both the hedged forecasted transaction and hedging instrument are expected to be impacted by reference rate reform. In March 2021, the Financial Conduct Authority announced June 30, 2023 as the intended cessation date of the one-, three-, six-, and 12-month tenors of USD LIBOR. Provisions within the credit agreement provide the Company with the ability to agree with JPMorgan Chase Bank, N.A., as administrative agent to the lenders, to replace LIBOR with a different reference rate in the event that LIBOR ceases to exist. On May 31, 2023, the Company replaced LIBOR with the forward looking Secured Overnight Financing Rate (“Adjusted Term SOFR”) within the credit agreement. On May 31, 2023, the Company also modified the cash flow hedge’s contractual terms to replace LIBOR with SOFR. The amendment to the credit agreement is described further in Note 7 -Long-term Debt and Notes Payable. The Company’s cash flow hedge is described further in Note 8 – Interest Rate Cap. These updates have not had a material impact on the Company's consolidated financial statements. |
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, liabilities, revenues, and expenses. Actual results could differ from those estimates. |
Credit Risk Concentrations | Credit Risk ConcentrationsFinancial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash balances and accounts receivable. 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.Because of the diversity in the Company’s non-governmental third-party payor base, as well as their geographic dispersion, accounts receivable due from the Medicare program represent the Company’s only significant concentration of credit risk. |
Redeemable Non-Controlling Interests | Redeemable Non-Controlling InterestsThe ownership interests held by outside parties in subsidiaries, which include 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, after the attribution of net income or loss. |
Variable Interest Entities | Variable Interest EntitiesCertain states prohibit the “corporate practice of medicine,” which restricts the Company from owning medical practices which directly employ physicians or therapists and from exercising control over medical decisions by physicians and therapists. In these states, the Company enters into long-term management agreements with medical practices that are owned by licensed physicians or therapists, which, in turn, employ or contract with physicians or therapists who provide professional medical services. The management agreements provide for the Company to direct the transfer of ownership of the medical practices. Based on the provisions of the management agreements, the medical practices are variable interest entities for which the Company is the primary beneficiary. |
Redeemable Non-Controlling In_2
Redeemable Non-Controlling Interests (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Noncontrolling Interest [Abstract] | |
Schedule of redeemable non-controlling interests | The changes in redeemable non-controlling interests are as follows: Six Months Ended June 30, 2022 2023 (in thousands) Balance as of January 1 $ 39,033 $ 34,043 Net income attributable to redeemable non-controlling interests 1,918 1,641 Distributions to redeemable non-controlling interests (1,198) (1,900) Redemption value adjustment on redeemable non-controlling interests 1,381 436 Other 536 179 Balance as of March 31 $ 41,670 $ 34,399 Net income attributable to redeemable non-controlling interests 1,900 2,084 Distributions to and purchases of redeemable non-controlling interests (1,553) (2,110) Redemption value adjustment on redeemable non-controlling interests (355) 2 Other 535 — Balance as of June 30 $ 42,197 $ 34,375 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Schedule of lease cost | The Company’s total lease cost is as follows: Three Months Ended June 30, 2022 Three Months Ended June 30, 2023 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total (in thousands) Operating lease cost $ 73,969 $ 1,809 $ 75,778 $ 76,892 $ 1,833 $ 78,725 Finance lease cost: Amortization of right-of-use assets 377 — 377 404 — 404 Interest on lease liabilities 336 — 336 387 — 387 Short-term lease cost 15 — 15 — — — Variable lease cost 14,407 141 14,548 16,532 — 16,532 Sublease income (1,940) — (1,940) (1,716) — (1,716) Total lease cost $ 87,164 $ 1,950 $ 89,114 $ 92,499 $ 1,833 $ 94,332 Six Months Ended June 30, 2022 Six Months Ended June 30, 2023 Unrelated Parties Related Parties Total Unrelated Parties Related Parties Total (in thousands) Operating lease cost $ 147,931 $ 3,618 $ 151,549 $ 153,524 $ 3,667 $ 157,191 Finance lease cost: Amortization of right-of-use assets 724 — 724 798 — 798 Interest on lease liabilities 676 — 676 707 — 707 Short-term lease cost 50 — 50 — — — Variable lease cost 28,062 180 28,242 32,293 84 32,377 Sublease income (3,906) — (3,906) (3,394) — (3,394) Total lease cost $ 173,537 $ 3,798 $ 177,335 $ 183,928 $ 3,751 $ 187,679 |
Long-Term Debt and Notes Paya_2
Long-Term Debt and Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt and notes payable | As of June 30, 2023, the Company’s long-term debt and notes payable are as follows: Principal Unamortized Premium (Discount) Unamortized Carrying Value Fair Value (in thousands) 6.250% senior notes $ 1,225,000 $ 18,562 $ (9,456) $ 1,234,106 $ 1,204,175 Credit facilities: Revolving facility 345,000 — — 345,000 343,706 Term loan 2,103,437 (3,379) (3,684) 2,096,374 2,098,178 Other debt, including finance leases 77,164 — (98) 77,066 77,066 Total debt $ 3,750,601 $ 15,183 $ (13,238) $ 3,752,546 $ 3,723,125 As of December 31, 2022, the Company’s long-term debt and notes payable are as follows: Principal Unamortized Premium (Discount) Unamortized Carrying Value Fair Value (in thousands) 6.250% senior notes $ 1,225,000 $ 21,555 $ (10,948) $ 1,235,607 $ 1,163,689 Credit facilities: Revolving facility 445,000 — — 445,000 443,331 Term loan 2,103,437 (4,376) (4,771) 2,094,290 2,056,110 Other debt, including finance leases 104,800 — (135) 104,665 104,665 Total debt $ 3,878,237 $ 17,179 $ (15,854) $ 3,879,562 $ 3,767,795 |
Schedule of principal maturities of long-term debt and notes payable | Principal maturities of the Company’s long-term debt and notes payable are approximately as follows: 2023 2024 2025 2026 2027 Thereafter Total (in thousands) 6.250% senior notes $ — $ — $ — $ 1,225,000 $ — $ — $ 1,225,000 Credit facilities: Revolving facility — 31,846 313,154 — — — 345,000 Term loan 4,757 11,150 2,087,530 — — — 2,103,437 Other debt, including finance leases 11,738 51,046 1,408 1,309 823 10,840 77,164 Total debt $ 16,495 $ 94,042 $ 2,402,092 $ 1,226,309 $ 823 $ 10,840 $ 3,750,601 |
Interest Rate Cap (Tables)
Interest Rate Cap (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The following table outlines the changes in accumulated other comprehensive income (loss), net of tax, during the periods presented: Six Months Ended June 30, 2022 2023 (in thousands) Balance as of January 1 $ 12,282 $ 88,602 Gain (loss) on interest rate cap cash flow hedge 39,814 (2,696) Amounts reclassified from accumulated other comprehensive income 39 (13,252) Balance as of March 31 $ 52,135 $ 72,654 Gain on interest rate cap cash flow hedge 11,833 17,527 Amounts reclassified from accumulated other comprehensive income (6) (15,134) Balance as of June 30 $ 63,962 $ 75,047 |
Schedule of reclassification out of accumulated other comprehensive income | The effects on net income of amounts reclassified from accumulated other comprehensive income are as follows: Three Months Ended June 30, Six Months Ended June 30, Statement of Operations 2022 2023 2022 2023 (in thousands) Gains (losses) included in interest expense $ 8 $ 20,045 $ (43) $ 37,597 Income tax benefit (expense) (2) (4,911) 10 (9,211) Amounts reclassified from accumulated other comprehensive income $ 6 $ 15,134 $ (33) $ 28,386 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of interest rate cap | Financial Instrument Balance Sheet Classification Level December 31, 2022 June 30, 2023 Asset: (in thousands) Interest rate cap contract, current portion Current portion of interest rate cap contract Level 2 $ 74,857 $ 83,938 Interest rate cap contract, non-current portion Interest rate cap contract, net of current portion Level 2 45,200 18,396 |
Schedule of long-term debt | December 31, 2022 June 30, 2023 Financial Instrument Level Carrying Value Fair Value Carrying Value Fair Value (in thousands) 6.250% senior notes Level 2 $ 1,235,607 $ 1,163,689 $ 1,234,106 $ 1,204,175 Credit facilities: Revolving facility Level 2 445,000 443,331 345,000 343,706 Term loan Level 2 2,094,290 2,056,110 2,096,374 2,098,178 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of selected financial data for reportable segments | The following tables summarize selected financial data for the Company’s reportable segments. Three Months Ended June 30, Six Months Ended June 30, 2022 2023 2022 2023 (in thousands) Revenue: Critical illness recovery hospital $ 545,908 $ 575,091 $ 1,147,663 $ 1,169,017 Rehabilitation hospital 228,887 240,856 449,521 472,318 Outpatient rehabilitation 287,258 302,972 559,198 598,875 Concentra 441,357 467,079 864,780 923,377 Other 81,331 88,530 163,126 175,921 Total Company $ 1,584,741 $ 1,674,528 $ 3,184,288 $ 3,339,508 Adjusted EBITDA: Critical illness recovery hospital $ 20,019 $ 65,496 $ 55,986 $ 142,269 Rehabilitation hospital 49,845 54,689 92,224 101,905 Outpatient rehabilitation 33,601 32,850 60,197 63,049 Concentra 92,607 100,391 182,076 194,139 Other (1) (15,078) (33,957) (45,642) (67,830) Total Company $ 180,994 $ 219,469 $ 344,841 $ 433,532 Total assets: Critical illness recovery hospital $ 2,387,516 $ 2,492,370 $ 2,387,516 $ 2,492,370 Rehabilitation hospital 1,194,739 1,209,737 1,194,739 1,209,737 Outpatient rehabilitation 1,360,600 1,399,782 1,360,600 1,399,782 Concentra 2,301,296 2,314,328 2,301,296 2,314,328 Other 307,507 285,652 307,507 285,652 Total Company $ 7,551,658 $ 7,701,869 $ 7,551,658 $ 7,701,869 Purchases of property, equipment, and other assets: Critical illness recovery hospital $ 19,528 $ 31,363 $ 39,097 $ 55,021 Rehabilitation hospital 4,821 1,903 11,095 10,485 Outpatient rehabilitation 9,314 10,476 18,728 20,408 Concentra 8,716 15,846 18,956 30,246 Other 3,953 (74) 5,301 2,239 Total Company $ 46,332 $ 59,514 $ 93,177 $ 118,399 _______________________________________________________________________________ (1) For the three and six months ended June 30, 2022, Adjusted EBITDA included other operating income of $15.1 million. The other operating income is related to the recognition of payments received under the Provider Relief Fund for health care related expenses and loss of revenue attributable to COVID-19. |
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, 2022 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ 20,019 $ 49,845 $ 33,601 $ 92,607 $ (15,078) Depreciation and amortization (14,603) (7,175) (8,130) (18,730) (2,443) Stock compensation expense — — — (536) (8,410) Income (loss) from operations $ 5,416 $ 42,670 $ 25,471 $ 73,341 $ (25,931) $ 120,967 Equity in earnings of unconsolidated subsidiaries 6,167 Interest expense (41,052) Income before income taxes $ 86,082 Three Months Ended June 30, 2023 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ 65,496 $ 54,689 $ 32,850 $ 100,391 $ (33,957) Depreciation and amortization (13,886) (6,887) (8,779) (18,283) (2,104) Stock compensation expense — — — — (10,326) Income (loss) from operations $ 51,610 $ 47,802 $ 24,071 $ 82,108 $ (46,387) $ 159,204 Equity in earnings of unconsolidated subsidiaries 10,501 Interest expense (48,997) Income before income taxes $ 120,708 Six Months Ended June 30, 2022 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ 55,986 $ 92,224 $ 60,197 $ 182,076 $ (45,642) Depreciation and amortization (29,221) (13,977) (16,159) (37,542) (5,221) Stock compensation expense — — — (1,071) (16,698) Income (loss) from operations $ 26,765 $ 78,247 $ 44,038 $ 143,463 $ (67,561) $ 224,952 Equity in earnings of unconsolidated subsidiaries 11,564 Interest expense (76,566) Income before income taxes $ 159,950 Six Months Ended June 30, 2023 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Adjusted EBITDA $ 142,269 $ 101,905 $ 63,049 $ 194,139 $ (67,830) Depreciation and amortization (30,523) (13,775) (17,236) (36,593) (4,237) Stock compensation expense — — — (178) (20,329) Income (loss) from operations $ 111,746 $ 88,130 $ 45,813 $ 157,368 $ (92,396) $ 310,661 Equity in earnings of unconsolidated subsidiaries 19,057 Interest expense (97,568) Income before income taxes $ 232,150 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | The following tables disaggregate the Company’s revenue for the three and six months ended June 30, 2022 and 2023: Three Months Ended June 30, 2022 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Patient service revenue: Medicare $ 213,680 $ 105,030 $ 44,433 $ 195 $ — $ 363,338 Non-Medicare 329,118 113,001 224,957 439,779 — 1,106,855 Total patient services revenues 542,798 218,031 269,390 439,974 — 1,470,193 Other revenue 3,110 10,856 17,868 1,383 81,331 114,548 Total revenue $ 545,908 $ 228,887 $ 287,258 $ 441,357 $ 81,331 $ 1,584,741 Three Months Ended June 30, 2023 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Patient service revenue: Medicare $ 207,743 $ 113,450 $ 46,647 $ 250 $ — $ 368,090 Non-Medicare 366,498 115,436 236,246 465,367 — 1,183,547 Total patient services revenues 574,241 228,886 282,893 465,617 — 1,551,637 Other revenue 850 11,970 20,079 1,462 88,530 122,891 Total revenue $ 575,091 $ 240,856 $ 302,972 $ 467,079 $ 88,530 $ 1,674,528 Six Months Ended June 30, 2022 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Patient service revenue: Medicare $ 432,667 $ 208,051 $ 86,337 $ 372 $ — $ 727,427 Non-Medicare 710,104 220,143 439,070 861,825 — 2,231,142 Total patient services revenues 1,142,771 428,194 525,407 862,197 — 2,958,569 Other revenue 4,892 21,327 33,791 2,583 163,126 225,719 Total revenue $ 1,147,663 $ 449,521 $ 559,198 $ 864,780 $ 163,126 $ 3,184,288 Six Months Ended June 30, 2023 Critical Illness Recovery Hospital Rehabilitation Hospital Outpatient Concentra Other Total (in thousands) Patient service revenue: Medicare $ 437,126 $ 223,505 $ 92,448 $ 493 $ — $ 753,572 Non-Medicare 729,803 225,361 468,231 919,965 — 2,343,360 Total patient services revenues 1,166,929 448,866 560,679 920,458 — 3,096,932 Other revenue 2,088 23,452 38,196 2,919 175,921 242,576 Total revenue $ 1,169,017 $ 472,318 $ 598,875 $ 923,377 $ 175,921 $ 3,339,508 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 and Diluted EPS Three Months Ended June 30, Six Months Ended June 30, 2022 2023 2022 2023 (in thousands) Net income $ 66,262 $ 91,860 $ 122,188 $ 177,117 Less: net income attributable to non-controlling interests 11,055 13,623 17,864 28,075 Net income attributable to the Company 55,207 78,237 104,324 149,042 Less: Distributed and undistributed income attributable to participating securities 1,920 2,877 3,558 5,449 Distributed and undistributed income attributable to common shares $ 53,287 $ 75,360 $ 100,766 $ 143,593 The following tables set forth the computation of EPS under the two-class method: Three Months Ended June 30, 2022 2023 Net Income Allocation Shares (1) Basic and Diluted EPS Net Income Allocation Shares (1) Basic and Diluted EPS (in thousands, except for per share amounts) Common shares $ 53,287 124,897 $ 0.43 $ 75,360 122,634 $ 0.61 Participating securities 1,920 4,500 $ 0.43 2,877 4,681 $ 0.61 Total Company $ 55,207 $ 78,237 Six Months Ended June 30, 2022 2023 Net Income Allocation Shares (1) Basic and Diluted EPS Net Income Allocation Shares (1) Basic and Diluted EPS (in thousands, except for per share amounts) Common shares $ 100,766 126,942 $ 0.79 $ 143,593 122,594 $ 1.17 Participating securities 3,558 4,482 $ 0.79 5,449 4,652 $ 1.17 Total Company $ 104,324 $ 149,042 _______________________________________________________________________________ (1) Represents the weighted average share count outstanding during the period. |
Credit Risk Concentrations (Det
Credit Risk Concentrations (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Medicare Receivable | Credit Concentration Risk | Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Percentage of concentration risk | 19% | 19% |
Redeemable Non-Controlling In_3
Redeemable Non-Controlling Interests - Schedule of Redeemable Non-Controlling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Balance, beginning | $ 34,399 | $ 34,043 | $ 41,670 | $ 39,033 |
Net income attributable to redeemable non-controlling interests | 2,084 | 1,641 | 1,900 | 1,918 |
Distributions to and purchases of redeemable non-controlling interests | (2,110) | (1,900) | (1,553) | (1,198) |
Redemption value adjustment on redeemable non-controlling interests | 2 | 436 | (355) | 1,381 |
Other | 0 | 179 | 535 | 536 |
Balance, ending | $ 34,375 | $ 34,399 | $ 42,197 | $ 41,670 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Variable Interest Entity [Line Items] | |||
Assets | $ 7,701,869 | $ 7,665,293 | $ 7,551,658 |
Liabilities | 6,165,915 | 6,274,686 | |
Variable Interest Entity, Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Assets | 263,600 | 232,100 | |
Liabilities | 84,100 | 78,800 | |
Variable Interest Entity, Primary Beneficiary | Related Party | |||
Variable Interest Entity [Line Items] | |||
Obligations payable | $ 186,700 | $ 158,300 |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating lease cost | ||||
Unrelated Parties | $ 76,892 | $ 73,969 | $ 153,524 | $ 147,931 |
Related Parties | 1,833 | 1,809 | 3,667 | 3,618 |
Total | 78,725 | 75,778 | 157,191 | 151,549 |
Amortization of right-of-use assets | ||||
Unrelated Parties | 404 | 377 | 798 | 724 |
Related Parties | 0 | 0 | 0 | 0 |
Total | 404 | 377 | 798 | 724 |
Interest on lease liabilities | ||||
Unrelated Parties | 387 | 336 | 707 | 676 |
Related Parties | 0 | 0 | 0 | 0 |
Total | 387 | 336 | 707 | 676 |
Short-term lease cost | ||||
Unrelated Parties | 0 | 15 | 0 | 50 |
Related Parties | 0 | 0 | 0 | 0 |
Total | 0 | 15 | 0 | 50 |
Variable lease cost | ||||
Unrelated Parties | 16,532 | 14,407 | 32,293 | 28,062 |
Related Parties | 0 | 141 | 84 | 180 |
Total | 16,532 | 14,548 | 32,377 | 28,242 |
Sublease income | ||||
Unrelated Parties | (1,716) | (1,940) | (3,394) | (3,906) |
Related Parties | 0 | 0 | 0 | 0 |
Total | (1,716) | (1,940) | (3,394) | (3,906) |
Total lease cost | ||||
Unrelated Parties | 92,499 | 87,164 | 183,928 | 173,537 |
Related Parties | 1,833 | 1,950 | 3,751 | 3,798 |
Total | $ 94,332 | $ 89,114 | $ 187,679 | $ 177,335 |
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, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Principal Outstanding | $ 3,750,601 | $ 3,878,237 |
Unamortized Premium (Discount) | 15,183 | 17,179 |
Unamortized Issuance Costs | (13,238) | (15,854) |
Carrying Value | 3,752,546 | 3,879,562 |
Fair Value | $ 3,723,125 | $ 3,767,795 |
Senior notes | 6.250% senior notes | ||
Debt Instrument [Line Items] | ||
Interest rate of debt (as a percent) | 6.25% | 6.25% |
Principal Outstanding | $ 1,225,000 | $ 1,225,000 |
Unamortized Premium (Discount) | 18,562 | 21,555 |
Unamortized Issuance Costs | (9,456) | (10,948) |
Carrying Value | 1,234,106 | 1,235,607 |
Fair Value | 1,204,175 | 1,163,689 |
Term loan | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 2,103,437 | 2,103,437 |
Unamortized Premium (Discount) | (3,379) | (4,376) |
Unamortized Issuance Costs | (3,684) | (4,771) |
Carrying Value | 2,096,374 | 2,094,290 |
Fair Value | 2,098,178 | 2,056,110 |
Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 77,164 | 104,800 |
Unamortized Premium (Discount) | 0 | 0 |
Unamortized Issuance Costs | (98) | (135) |
Carrying Value | 77,066 | 104,665 |
Fair Value | 77,066 | 104,665 |
Revolving facility | Revolving facility | ||
Debt Instrument [Line Items] | ||
Principal Outstanding | 345,000 | 445,000 |
Unamortized Premium (Discount) | 0 | 0 |
Unamortized Issuance Costs | 0 | 0 |
Carrying Value | 345,000 | 445,000 |
Fair Value | $ 343,706 | $ 443,331 |
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, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
2023 | $ 16,495 | |
2024 | 94,042 | |
2025 | 2,402,092 | |
2026 | 1,226,309 | |
2027 | 823 | |
Thereafter | 10,840 | |
Total | $ 3,750,601 | $ 3,878,237 |
Senior notes | 6.250% senior notes | ||
Debt Instrument [Line Items] | ||
Interest rate of debt (as a percent) | 6.25% | 6.25% |
2023 | $ 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 1,225,000 | |
2027 | 0 | |
Thereafter | 0 | |
Total | 1,225,000 | $ 1,225,000 |
Revolving facility | Revolving facility | ||
Debt Instrument [Line Items] | ||
2023 | 0 | |
2024 | 31,846 | |
2025 | 313,154 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 0 | |
Total | 345,000 | 445,000 |
Term loan | ||
Debt Instrument [Line Items] | ||
2023 | 4,757 | |
2024 | 11,150 | |
2025 | 2,087,530 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 0 | |
Total | 2,103,437 | 2,103,437 |
Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
2023 | 11,738 | |
2024 | 51,046 | |
2025 | 1,408 | |
2026 | 1,309 | |
2027 | 823 | |
Thereafter | 10,840 | |
Total | $ 77,164 | $ 104,800 |
Long-Term Debt and Notes Paya_5
Long-Term Debt and Notes Payable - Narrative (Details) - USD ($) $ in Millions | Jul. 31, 2023 | May 31, 2023 |
Amendment No. 8 To Select Credit Agreement | Subsequent Event | ||
Line of Credit Facility [Line Items] | ||
Spring maturity period (in days) | 90 days | |
Principal outstanding | $ 300 | |
Revolving facility | Revolving facility | Amendment No. 8 To Select Credit Agreement | Subsequent Event | ||
Line of Credit Facility [Line Items] | ||
Aggregate principal amount | $ 710 | |
Revolving facility | Revolving facility | Amendment No. 8 To Select Credit Agreement | Adjusted Term SOFR | Subsequent Event | ||
Line of Credit Facility [Line Items] | ||
Credit spread adjustment | 2.50% | |
Revolving facility | Select Medical Corporation | Amendment No. 7 To Select Credit Agreement | Adjusted Term SOFR | ||
Line of Credit Facility [Line Items] | ||
Credit spread adjustment | 0.10% | |
Term loan | Amendment No. 8 To Select Credit Agreement | Subsequent Event | ||
Line of Credit Facility [Line Items] | ||
Aggregate principal amount | $ 2,103 | |
Term loan | Amendment No. 8 To Select Credit Agreement | Adjusted Term SOFR | Subsequent Event | ||
Line of Credit Facility [Line Items] | ||
Credit spread adjustment | 0.10% | |
Term loan | Amendment No. 8 To Select Credit Agreement | Term Secured Overnight Financing Rate | Subsequent Event | ||
Line of Credit Facility [Line Items] | ||
Credit spread adjustment | 3% |
Interest Rate Cap - Narrative (
Interest Rate Cap - Narrative (Details) - Interest Rate Cap $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Derivative [Line Items] | |
Derivative cap interest rate (as a percent) | 1% |
Notional amount | $ 2,000 |
Annual premium (in percent) | 0.000916 |
Annual premium amount | $ 1.8 |
Estimated pre-tax gain expected to be reclassified in the next twelve months | $ 82.1 |
Interest Rate Cap - Schedule of
Interest Rate Cap - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,418,441 | $ 1,356,564 | $ 1,366,896 | $ 1,325,902 |
Ending balance | 1,501,579 | 1,418,441 | 1,303,701 | 1,366,896 |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Interest Rate Cap | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | 72,654 | 88,602 | 52,135 | 12,282 |
Gain (loss) on interest rate cap cash flow hedge | 17,527 | (2,696) | 11,833 | 39,814 |
Amounts reclassified from accumulated other comprehensive income | (15,134) | (13,252) | (6) | 39 |
Ending balance | $ 75,047 | $ 72,654 | $ 63,962 | $ 52,135 |
Interest Rate Cap - Schedule _2
Interest Rate Cap - Schedule of Reclassification out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Gains (losses) included in interest expense | $ (48,997) | $ (41,052) | $ (97,568) | $ (76,566) | ||
Income tax benefit (expense) | (28,848) | (19,820) | (55,033) | (37,762) | ||
Amounts reclassified from accumulated other comprehensive income | 78,237 | $ 70,805 | 55,207 | $ 49,117 | 149,042 | 104,324 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Interest Rate Cap | ||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||
Gains (losses) included in interest expense | 20,045 | 8 | 37,597 | (43) | ||
Income tax benefit (expense) | (4,911) | (2) | (9,211) | 10 | ||
Amounts reclassified from accumulated other comprehensive income | $ 15,134 | $ 6 | $ 28,386 | $ (33) |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Interest Rate Cap (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate cap contract, current portion | $ 83,938 | $ 74,857 |
Interest rate cap contract, non-current portion | 18,396 | 45,200 |
Interest Rate Cap | Fair Value, Inputs, Level 2 | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate cap contract, current portion | 83,938 | 74,857 |
Interest rate cap contract, non-current portion | $ 18,396 | $ 45,200 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 3,723,125 | $ 3,767,795 |
Senior notes | 6.250% senior notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate of debt (as a percent) | 6.25% | 6.25% |
Carrying Value | $ 1,234,106 | $ 1,235,607 |
Fair Value | 1,204,175 | 1,163,689 |
Senior notes | Fair Value, Inputs, Level 2 | 6.250% senior notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 1,234,106 | 1,235,607 |
Fair Value | 1,204,175 | 1,163,689 |
Revolving facility | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 345,000 | 445,000 |
Fair Value | 343,706 | 443,331 |
Term loan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 2,096,374 | 2,094,290 |
Fair Value | 2,098,178 | 2,056,110 |
Term loan | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 2,096,374 | 2,094,290 |
Fair Value | $ 2,098,178 | $ 2,056,110 |
Segment Information - Selected
Segment Information - Selected Financial Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||||
Revenue | $ 1,674,528 | $ 1,584,741 | $ 3,339,508 | $ 3,184,288 | |
Adjusted EBITDA | 219,469 | 180,994 | 433,532 | 344,841 | |
Total assets | 7,701,869 | 7,551,658 | 7,701,869 | 7,551,658 | $ 7,665,293 |
Purchases of property, equipment, and other assets | 59,514 | 46,332 | 118,399 | 93,177 | |
Operating Segments | Critical Illness Recovery Hospital | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 575,091 | 545,908 | 1,169,017 | 1,147,663 | |
Adjusted EBITDA | 65,496 | 20,019 | 142,269 | 55,986 | |
Total assets | 2,492,370 | 2,387,516 | 2,492,370 | 2,387,516 | |
Purchases of property, equipment, and other assets | 31,363 | 19,528 | 55,021 | 39,097 | |
Operating Segments | Rehabilitation Hospital | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 240,856 | 228,887 | 472,318 | 449,521 | |
Adjusted EBITDA | 54,689 | 49,845 | 101,905 | 92,224 | |
Total assets | 1,209,737 | 1,194,739 | 1,209,737 | 1,194,739 | |
Purchases of property, equipment, and other assets | 1,903 | 4,821 | 10,485 | 11,095 | |
Operating Segments | Outpatient Rehabilitation | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 302,972 | 287,258 | 598,875 | 559,198 | |
Adjusted EBITDA | 32,850 | 33,601 | 63,049 | 60,197 | |
Total assets | 1,399,782 | 1,360,600 | 1,399,782 | 1,360,600 | |
Purchases of property, equipment, and other assets | 10,476 | 9,314 | 20,408 | 18,728 | |
Operating Segments | Concentra | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 467,079 | 441,357 | 923,377 | 864,780 | |
Adjusted EBITDA | 100,391 | 92,607 | 194,139 | 182,076 | |
Total assets | 2,314,328 | 2,301,296 | 2,314,328 | 2,301,296 | |
Purchases of property, equipment, and other assets | 15,846 | 8,716 | 30,246 | 18,956 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 88,530 | 81,331 | 175,921 | 163,126 | |
Adjusted EBITDA | (33,957) | (15,078) | (67,830) | (45,642) | |
Total assets | 285,652 | 307,507 | 285,652 | 307,507 | |
Purchases of property, equipment, and other assets | $ (74) | 3,953 | $ 2,239 | 5,301 | |
Government assistance recognized in earnings, CARES Act | $ 15,100 | $ 15,100 |
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, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | $ 219,469 | $ 180,994 | $ 433,532 | $ 344,841 |
Depreciation and amortization | (49,939) | (51,081) | (102,364) | (102,120) |
Income from operations | 159,204 | 120,967 | 310,661 | 224,952 |
Equity in earnings of unconsolidated subsidiaries | 10,501 | 6,167 | 19,057 | 11,564 |
Interest expense | (48,997) | (41,052) | (97,568) | (76,566) |
Income before income taxes | 120,708 | 86,082 | 232,150 | 159,950 |
Operating Segments | Critical Illness Recovery Hospital | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | 65,496 | 20,019 | 142,269 | 55,986 |
Depreciation and amortization | (13,886) | (14,603) | (30,523) | (29,221) |
Stock compensation expense | 0 | 0 | 0 | 0 |
Income from operations | 51,610 | 5,416 | 111,746 | 26,765 |
Operating Segments | Rehabilitation Hospital | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | 54,689 | 49,845 | 101,905 | 92,224 |
Depreciation and amortization | (6,887) | (7,175) | (13,775) | (13,977) |
Stock compensation expense | 0 | 0 | 0 | 0 |
Income from operations | 47,802 | 42,670 | 88,130 | 78,247 |
Operating Segments | Outpatient Rehabilitation | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | 32,850 | 33,601 | 63,049 | 60,197 |
Depreciation and amortization | (8,779) | (8,130) | (17,236) | (16,159) |
Stock compensation expense | 0 | 0 | 0 | 0 |
Income from operations | 24,071 | 25,471 | 45,813 | 44,038 |
Operating Segments | Concentra | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | 100,391 | 92,607 | 194,139 | 182,076 |
Depreciation and amortization | (18,283) | (18,730) | (36,593) | (37,542) |
Stock compensation expense | 0 | (536) | (178) | (1,071) |
Income from operations | 82,108 | 73,341 | 157,368 | 143,463 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | (33,957) | (15,078) | (67,830) | (45,642) |
Depreciation and amortization | (2,104) | (2,443) | (4,237) | (5,221) |
Stock compensation expense | (10,326) | (8,410) | (20,329) | (16,698) |
Income from operations | $ (46,387) | $ (25,931) | $ (92,396) | $ (67,561) |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 1,674,528 | $ 1,584,741 | $ 3,339,508 | $ 3,184,288 |
Total patient services revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,551,637 | 1,470,193 | 3,096,932 | 2,958,569 |
Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 368,090 | 363,338 | 753,572 | 727,427 |
Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,183,547 | 1,106,855 | 2,343,360 | 2,231,142 |
Other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 122,891 | 114,548 | 242,576 | 225,719 |
Operating Segments | Critical Illness Recovery Hospital | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 575,091 | 545,908 | 1,169,017 | 1,147,663 |
Operating Segments | Critical Illness Recovery Hospital | Total patient services revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 574,241 | 542,798 | 1,166,929 | 1,142,771 |
Operating Segments | Critical Illness Recovery Hospital | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 207,743 | 213,680 | 437,126 | 432,667 |
Operating Segments | Critical Illness Recovery Hospital | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 366,498 | 329,118 | 729,803 | 710,104 |
Operating Segments | Critical Illness Recovery Hospital | Other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 850 | 3,110 | 2,088 | 4,892 |
Operating Segments | Rehabilitation Hospital | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 240,856 | 228,887 | 472,318 | 449,521 |
Operating Segments | Rehabilitation Hospital | Total patient services revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 228,886 | 218,031 | 448,866 | 428,194 |
Operating Segments | Rehabilitation Hospital | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 113,450 | 105,030 | 223,505 | 208,051 |
Operating Segments | Rehabilitation Hospital | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 115,436 | 113,001 | 225,361 | 220,143 |
Operating Segments | Rehabilitation Hospital | Other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 11,970 | 10,856 | 23,452 | 21,327 |
Operating Segments | Outpatient Rehabilitation | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 302,972 | 287,258 | 598,875 | 559,198 |
Operating Segments | Outpatient Rehabilitation | Total patient services revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 282,893 | 269,390 | 560,679 | 525,407 |
Operating Segments | Outpatient Rehabilitation | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 46,647 | 44,433 | 92,448 | 86,337 |
Operating Segments | Outpatient Rehabilitation | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 236,246 | 224,957 | 468,231 | 439,070 |
Operating Segments | Outpatient Rehabilitation | Other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 20,079 | 17,868 | 38,196 | 33,791 |
Operating Segments | Concentra | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 467,079 | 441,357 | 923,377 | 864,780 |
Operating Segments | Concentra | Total patient services revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 465,617 | 439,974 | 920,458 | 862,197 |
Operating Segments | Concentra | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 250 | 195 | 493 | 372 |
Operating Segments | Concentra | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 465,367 | 439,779 | 919,965 | 861,825 |
Operating Segments | Concentra | Other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,462 | 1,383 | 2,919 | 2,583 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 88,530 | 81,331 | 175,921 | 163,126 |
Other | Total patient services revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Other | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Other | Non-Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Other | Other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 88,530 | $ 81,331 | $ 175,921 | $ 163,126 |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Contractual dividends paid | $ 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, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share [Abstract] | ||||||
Net income | $ 91,860 | $ 66,262 | $ 177,117 | $ 122,188 | ||
Less: Net income attributable to non-controlling interests | 13,623 | 11,055 | 28,075 | 17,864 | ||
Net income attributable to Select Medical Holdings Corporation | 78,237 | $ 70,805 | 55,207 | $ 49,117 | 149,042 | 104,324 |
Basic EPS | ||||||
Less: Distributed and undistributed income attributable to participating securities - Basic EPS | 2,877 | 1,920 | 5,449 | 3,558 | ||
Distributed and undistributed income attributable to common shares | 75,360 | 53,287 | 143,593 | 100,766 | ||
Diluted EPS | ||||||
Less: Distributed and undistributed income attributable to participating securities - Diluted EPS | 2,877 | 1,920 | 5,449 | 3,558 | ||
Distributed and undistributed income attributable to common shares | $ 75,360 | $ 53,287 | $ 143,593 | $ 100,766 |
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, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Net Income Allocation | ||||||
Net income allocated to common shares - basic | $ 75,360 | $ 53,287 | $ 143,593 | $ 100,766 | ||
Participating securities - basic | 2,877 | 1,920 | 5,449 | 3,558 | ||
Net income allocated to common shares - diluted | 75,360 | 53,287 | 143,593 | 100,766 | ||
Participating securities - diluted | 2,877 | 1,920 | 5,449 | 3,558 | ||
Net income attributable to Select Medical Holdings Corporation | $ 78,237 | $ 70,805 | $ 55,207 | $ 49,117 | $ 149,042 | $ 104,324 |
Weighted average common shares outstanding, basic (in shares) | 122,634 | 124,897 | 122,594 | 126,942 | ||
Weighted average common shares outstanding, diluted (in shares) | 122,634 | 124,897 | 122,594 | 126,942 | ||
Weighted average participating securities outstanding (in shares) | 4,681 | 4,500 | 4,652 | 4,482 | ||
Basic EPS | ||||||
Basic EPS (in dollars per share) | $ 0.61 | $ 0.43 | $ 1.17 | $ 0.79 | ||
Diluted EPS | ||||||
Diluted EPS (in dollars per share) | $ 0.61 | $ 0.43 | $ 1.17 | $ 0.79 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Professional liability claims | Critical Illness Recovery Hospitals, Rehabilitation Hospitals And Outpatient Rehabilitiation | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | $ 37 |
Professional liability claims | Concentra | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | 19 |
Professional liability claims | Joint Venture Operations | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | 80 |
Professional liability claims | Joint Venture Operations | Minimum | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | 23 |
Professional liability claims | Joint Venture Operations | Maximum | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | 33 |
General Liability | Critical Illness Recovery Hospitals, Rehabilitation Hospitals And Outpatient Rehabilitiation | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | 40 |
General Liability | Concentra | |
Commitments and Contingencies | |
Total annual aggregate limit of insurance coverage | $ 19 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) $ / shares in Units, $ in Millions | Jul. 31, 2023 | Aug. 02, 2023 |
Subsequent Event [Line Items] | ||
Cash dividend declared (in dollars per share) | $ 0.125 | |
Amendment No. 8 To Select Credit Agreement | ||
Subsequent Event [Line Items] | ||
Spring maturity period (in days) | 90 days | |
Principal outstanding | $ 300 | |
Amendment No. 8 To Select Credit Agreement | Term loan | ||
Subsequent Event [Line Items] | ||
Aggregate principal amount | $ 2,103 | |
Amendment No. 8 To Select Credit Agreement | Term loan | Adjusted Term SOFR | ||
Subsequent Event [Line Items] | ||
Credit spread adjustment | 0.10% | |
Amendment No. 8 To Select Credit Agreement | Term loan | Term Secured Overnight Financing Rate | ||
Subsequent Event [Line Items] | ||
Credit spread adjustment | 3% | |
Revolving facility | Amendment No. 8 To Select Credit Agreement | Revolving facility | ||
Subsequent Event [Line Items] | ||
Aggregate principal amount | $ 710 | |
Revolving facility | Amendment No. 8 To Select Credit Agreement | Revolving facility | Adjusted Term SOFR | ||
Subsequent Event [Line Items] | ||
Credit spread adjustment | 2.50% |