Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 03, 2016 | |
Document and Entity Information [Line Items] | ||
Entity Registrant Name | Genesis Healthcare, Inc. | |
Entity Central Index Key | 1,351,051 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Class A Common Stock | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 74,970,770 | |
Class B Common Stock | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 15,511,603 | |
Class C Common Stock | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 64,049,380 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 53,840 | $ 61,543 |
Restricted cash and investments in marketable securities | 41,252 | 52,917 |
Accounts receivable, net of allowances for doubtful accounts of $219,149 and $189,739 at September 30, 2016 and December 31, 2015, respectively | 826,221 | 789,387 |
Prepaid expenses | 63,873 | 58,622 |
Other current assets | 63,480 | 49,024 |
Total current assets | 1,048,666 | 1,011,493 |
Property and equipment, net of accumulated depreciation of $781,414 and $638,768 at September 30, 2016 and December 31, 2015, respectively | 3,944,620 | 4,085,247 |
Restricted cash and investments in marketable securities | 122,753 | 145,210 |
Other long-term assets | 134,935 | 130,869 |
Deferred income taxes | 5,721 | 7,144 |
Identifiable intangible assets, net of accumulated amortization of $87,033 and $66,570 at September 30, 2016 and December 31, 2015, respectively | 185,779 | 209,967 |
Goodwill | 444,113 | 470,019 |
Total assets | 5,886,587 | 6,059,949 |
Current liabilities: | ||
Current installments of long-term debt | 30,758 | 12,477 |
Capital lease obligation | 1,852 | 1,842 |
Financing obligations | 1,566 | 989 |
Accounts payable | 223,961 | 233,801 |
Accrued expenses | 205,096 | 197,741 |
Accrued compensation | 185,916 | 185,054 |
Self-insurance reserves | 162,149 | 166,761 |
Total current liabilities | 811,298 | 798,665 |
Long-term liabilities: | ||
Long-term debt | 1,155,456 | 1,186,159 |
Capital lease obligations | 1,013,611 | 1,053,816 |
Financing obligations | 3,104,537 | 3,064,077 |
Deferred income taxes | 19,397 | 14,939 |
Self-insurance reserves | 448,749 | 428,569 |
Other long-term liabilities | 105,070 | 133,111 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Additional paid-in-capital | 302,747 | 295,359 |
Accumulated deficit | (818,072) | (731,602) |
Accumulated other comprehensive income (loss) | 81 | (218) |
Total stockholders’ deficit before noncontrolling interests | (515,090) | (436,307) |
Noncontrolling interests | (256,441) | (183,080) |
Total stockholders' deficit | (771,531) | (619,387) |
Total liabilities and stockholders’ deficit | 5,886,587 | 6,059,949 |
Class A Common Stock | ||
Stockholders’ equity: | ||
Common stock | 74 | 74 |
Class B Common Stock | ||
Stockholders’ equity: | ||
Common stock | 16 | 16 |
Class C Common Stock | ||
Stockholders’ equity: | ||
Common stock | $ 64 | $ 64 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Allowance for doubtful accounts | $ 219,149 | $ 189,739 |
Other assets: | ||
Accumulated depreciation on property and equipment | 781,414 | 638,768 |
Accumulated amortization on intangible assets | $ 87,033 | $ 66,570 |
Class A Common Stock | ||
Stockholders’ equity: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, issued (in shares) | 74,679,822 | 73,593,732 |
Common stock, shares, outstanding (in shares) | 74,679,822 | 73,593,732 |
Class B Common Stock | ||
Stockholders’ equity: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, issued (in shares) | 15,511,603 | 15,511,603 |
Common stock, shares, outstanding (in shares) | 15,511,603 | 15,511,603 |
Class C Common Stock | ||
Stockholders’ equity: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued (in shares) | 64,249,380 | 64,449,380 |
Common stock, shares, outstanding (in shares) | 64,249,380 | 64,449,380 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||
Net revenues | $ 1,418,994 | $ 1,416,027 | $ 4,329,570 | $ 4,178,503 |
Salaries, wages and benefits | 834,414 | 833,635 | 2,534,824 | 2,445,294 |
Other operating expenses | 350,828 | 332,919 | 1,062,086 | 993,719 |
General and administrative costs | 46,545 | 45,889 | 139,999 | 130,902 |
Provision for losses on accounts receivable | 25,602 | 23,346 | 81,776 | 68,855 |
Lease expense | 35,512 | 37,655 | 109,796 | 113,033 |
Depreciation and amortization expense | 61,104 | 62,505 | 190,822 | 176,043 |
Interest expense | 131,812 | 128,538 | 400,853 | 376,236 |
Loss (gain) on early extinguishment of debt | 15,363 | (3,104) | 15,830 | 130 |
Investment income | (934) | (353) | (2,073) | (1,200) |
Other (income) loss | (5,173) | 38 | (48,084) | (7,522) |
Transaction costs | 3,057 | 3,306 | 9,804 | 92,016 |
Skilled Healthcare and other loss contingency expense | 30,000 | 15,192 | 31,500 | |
Equity in net income of unconsolidated affiliates | (893) | (640) | (2,153) | (1,153) |
Loss before income tax benefit | (78,243) | (77,707) | (179,102) | (239,350) |
Income tax benefit | (25,888) | (16,726) | (19,738) | (26,793) |
Loss from continuing operations | (52,355) | (60,981) | (159,364) | (212,557) |
(Loss) income from discontinued operations, net of taxes | (24) | 39 | (1) | (1,571) |
Net loss | (52,379) | (60,942) | (159,365) | (214,128) |
Less net loss attributable to noncontrolling interests | 31,921 | 31,990 | 72,895 | 53,424 |
Net loss attributable to Genesis Healthcare, Inc | $ (20,458) | $ (28,952) | $ (86,470) | $ (160,704) |
Basic and diluted | ||||
Weighted-average shares outstanding for basic and diluted loss from continuing operations per share | 90,226 | 89,213 | 89,617 | 84,615 |
Loss from continuing operations attributable to Genesis Healthcare, Inc. | $ (0.23) | $ (0.32) | $ (0.96) | $ (1.88) |
(Loss) income from discontinued operations, net of taxes | 0 | 0 | 0 | (0.02) |
Net loss attributable to Genesis Healthcare, Inc. | $ (0.23) | $ (0.32) | $ (0.96) | $ (1.90) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net loss | $ (52,379) | $ (60,942) | $ (159,365) | $ (214,128) |
Net unrealized (loss) gain on marketable securities, net of tax | (298) | 15 | 730 | 48 |
Comprehensive loss | (52,677) | (60,927) | (158,635) | (214,080) |
Less: comprehensive loss attributable to noncontrolling interests | 31,921 | 31,984 | 72,464 | 53,342 |
Comprehensive loss attributable to Genesis Healthcare, Inc. | $ (20,756) | $ (28,943) | $ (86,171) | $ (160,738) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash Flows from Operating Activities | ||
Net loss | $ (159,365) | $ (214,128) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Non-cash interest and leasing arrangements, net | 70,228 | 69,525 |
Other non-cash charges and gains, net | (48,084) | (7,346) |
Share based compensation | 6,759 | 27,852 |
Depreciation and amortization | 190,822 | 176,187 |
Provision for losses on accounts receivable | 81,776 | 68,829 |
Equity in net income of unconsolidated affiliates | (2,153) | (1,153) |
Benefit for deferred taxes | (21,957) | (36,714) |
Loss (gain) on early extinguishment of debt | 12,714 | (3,104) |
Changes in assets and liabilities: | ||
Accounts receivable | (136,383) | (102,226) |
Accounts payable and other accrued expenses and other | 40,945 | 17,329 |
Net cash provided by (used in) operating activities | 35,302 | (4,949) |
Cash Flows from Investing Activities | ||
Capital expenditures | (70,790) | (65,493) |
Purchases of marketable securities | (38,845) | (27,519) |
Proceeds on maturity or sale of marketable securities | 53,014 | 19,703 |
Net change in restricted cash and equivalents | 20,984 | (12,303) |
Sale of investment in joint venture | 1,010 | 26,358 |
Purchases of inpatient assets, net of cash acquired | (108,299) | (11,598) |
Sales of assets | 149,398 | 1,263 |
Restricted deposits | (8,096) | |
Investments in joint venture | (536) | |
Other, net | 3,122 | 1,656 |
Net cash provided by (used in) investing activities | 962 | (67,933) |
Cash Flows from Financing Activities | ||
Borrowings under revolving credit facility | 662,000 | 589,500 |
Repayments under revolving credit facility | (611,000) | (529,000) |
Proceeds from issuance of long-term debt | 354,137 | 361,101 |
Proceeds from tenant improvement draws under lease arrangements | 1,157 | 2,033 |
Repayment of long-term debt | (436,923) | (351,420) |
Debt issuance costs | (12,441) | (17,776) |
Distributions to noncontrolling interests and stockholders | (897) | (9,433) |
Net cash (used in) provided by financing activities | (43,967) | 45,005 |
Net decrease in cash and cash equivalents | (7,703) | (27,877) |
Beginning of period | 61,543 | 87,548 |
End of period | 53,840 | 59,671 |
Supplemental disclosure of cash flow information | ||
Interest paid | 333,509 | 308,029 |
Net taxes (refunded) paid | (9,777) | 18,983 |
Non-cash financing activities: | ||
Capital leases | 56,766 | |
Capital lease | (49,622) | |
Financing obligations | $ 28,933 | 27,500 |
Assumptions of long-term debt | $ 436,887 |
General Information
General Information | 9 Months Ended |
Sep. 30, 2016 | |
General Information | |
Description of Business | (1) General Informatio Description of Business Genesis Healthcare, Inc. is a healthcare services company that through its subsidiaries (collectively, the Company) owns and operates skilled nursing facilities, assisted/senior living facilities and a rehabilitation therapy business. The Company has an administrative services company that provides a full complement of administrative and consultative services that allows its affiliated operators and third-party operators with whom the Company contracts to better focus on delivery of healthcare services. The Company provides inpatient services through 507 skilled nursing, assisted/senior living and behavioral health centers located in 34 states. Revenues of the Company’s owned, leased and otherwise consolidated centers constitute approximately 85% of its revenues. The Company provides a range of rehabilitation therapy services, including speech pathology, physical therapy, occupational therapy and respiratory therapy. These services are provided by rehabilitation therapists and assistants employed or contracted at substantially all of the centers operated by the Company, as well as by contract to healthcare facilities operated by others. After the elimination of intercompany revenues, the rehabilitation therapy services business constitutes approximately 12% of the Company’s revenues. The Company provides an array of other specialty medical services, including management services, physician services, staffing services, and other healthcare related services, which comprise the balance of the Company’s revenues. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). In the opinion of management, the consolidated financial statements include all necessary adjustments for a fair presentation of the financial position and results of operations for the periods presented. The consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation. The Company presents noncontrolling interests within the stockholders’ deficit section of its consolidated balance sheets. The Company presents the amount of net loss attributable to Genesis Healthcare, Inc. and net loss (income) attributable to noncontrolling interests in its consolidated statements of operations. The consolidated financial statements include the accounts of all entities controlled by the Company through its ownership of a majority voting interest and the accounts of any variable interest entities (VIEs) where the Company is subject to a majority of the risk of loss from the VIE's activities, or entitled to receive a majority of the entity's residual returns, or both. The Company assesses the requirements related to the consolidation of VIEs, including a qualitative assessment of power and economics that considers which entity has the power to direct the activities that “most significantly impact” the VIE's economic performance and has the obligation to absorb losses of, or the right to receive benefits that could be potentially significant to, the VIE. The Company's composition of variable interest entities was not material at September 30, 2016. The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q of Regulation S-X and do not include all of the disclosures normally required by U.S. GAAP or those normally required in annual reports on Form 10-K. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2015 filed with the U.S. Securities and Exchange Commission (the SEC) on Form 10-K on March 14, 2016. Certain prior year amounts have been reclassified to conform to current period presentation, the effect of which was not material. Upon adoption of new accounting guidance, debt issuance costs have been presented as a direct deduction from long-term debt rather than as an other long-term asset in all periods presented. The Company’s financial position at September 30, 2016 includes the impact of certain significant transactions and events, as disclosed within Note 3 – “ Significant Transactions and Events .” Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the FASB) issued ASU No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which changes the requirements for recognizing revenue when entities enter into contracts with customers. Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. It also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The adoption of ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2017 and early adoption is not permitted. The Company is still evaluating the effect, if any, ASU 2014-09 will have on the Company’s consolidated financial condition and results of operations. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern (ASU 2014-15), requiring management to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern and to provide disclosures in certain circumstances. ASU 2014-15 is effective for annual and interim periods ending after December 31, 2016. The Company is still evaluating the effect, if any, ASU 2014-15 will have on its consolidated financial condition and results of operations. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01), which is intended to improve the recognition and measurement of financial instruments. The new guidance is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted under certain circumstances. The Company is still evaluating the effect, if any, ASU 2016-01 will have on its consolidated financial condition and results of operations. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02), which amended authoritative guidance on accounting for leases. The new provisions require that a lessee of operating leases recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The lease liability will be equal to the present value of lease payments, with the right-of-use asset based upon the lease liability. The classification criteria for distinguishing between finance (or capital) leases and operating leases are substantially similar to the previous lease guidance, but with no explicit bright lines. As such, operating leases will result in straight-line rent expense similar to current practice. For short term leases (term of 12 months or less), a lessee is permitted to make an accounting election not to recognize lease assets and lease liabilities, which would generally result in lease expense being recognized on a straight-line basis over the lease term. The guidance is effective for annual and interim periods beginning after December 15, 2018, and will require application of the new guidance at the beginning of the earliest comparable period presented. Early adoption is permitted. ASU 2016-02 must be adopted using a modified retrospective transition. The adoption of ASU 2016-02 is expected to have a material impact on the Company’s financial position. The Company is still evaluating the impact on its results of operations and does not expect the adoption of this standard to have an impact on liquidity. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09), which is intended to improve the accounting for employee share-based payments and affect all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The new guidance is effective for annual and interim periods beginning after December 15, 2016, with early adoption permitted. The Company is still evaluating the effect, if any, ASU 2016-09 will have on its consolidated financial condition and results of operations. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15), which addresses how certain cash receipts and cash payments should be presented and classified in the statement of cash flows. The new guidance is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The Company is still evaluating the effect, if any, that ASU 2016-15 will have on its consolidated statements of cash flows. |
Certain Significant Risks and U
Certain Significant Risks and Uncertainties | 9 Months Ended |
Sep. 30, 2016 | |
Certain Significant Risks and Uncertainties | |
Certain Significant Risks and Uncertainties | (2) Certain Significant Risks and Uncertainties Revenue Sources The Company receives revenues from Medicare, Medicaid, private insurance, self-pay residents, other third-party payors and long-term care facilities that utilize its rehabilitation therapy and other services. The Company’s inpatient services segment derives approximately 79% of its revenue from Medicare and various state Medicaid programs. The following table depicts the Company’s inpatient services segment revenue by source for the three and nine months ended September 30, 2016 and 2015. Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Medicare % % % % Medicaid % % % % Insurance % % % % Private and other % % % % Total % % % % The sources and amounts of the Company’s revenues are determined by a number of factors, including licensed bed capacity and occupancy rates of inpatient facilities, the mix of patients and the rates of reimbursement among payors. Likewise, payment for ancillary medical services, including services provided by the Company’s rehabilitation therapy services business, varies based upon the type of payor and payment methodologies. Changes in the case mix of the patients as well as payor mix among Medicare, Medicaid and private pay can significantly affect the Company’s profitability. It is not possible to quantify fully the effect of legislative changes, the interpretation or administration of such legislation or other governmental initiatives on the Company’s business and the business of the customers served by the Company’s rehabilitation therapy business. The potential impact of reforms to the United States healthcare system, including potential material changes to the delivery of healthcare services and the reimbursement paid for such services by the government or other third party payors, is uncertain at this time. Also, initiatives among managed care payors, conveners and referring acute care hospital systems to reduce lengths of stay and avoidable hospital admissions and to divert referrals to home health or other community-based care settings could have an adverse impact on the Company’s business. Accordingly, there can be no assurance that the impact of any future healthcare legislation, regulation or actions by participants in the health care continuum will not adversely affect the Company’s business. There can be no assurance that payments under governmental and private third-party payor programs will be timely, will remain at levels similar to present levels or will, in the future, be sufficient to cover the costs allocable to patients eligible for reimbursement pursuant to such programs. The Company’s financial condition and results of operations are and will continue to be affected by the reimbursement process, which in the healthcare industry is complex and can involve lengthy delays between the time that revenue is recognized and the time that reimbursement amounts are settled. Laws and regulations governing the Medicare and Medicaid programs, and the Company’s business generally, are complex and are often subject to a number of ambiguities in their application and interpretation. The Company believes that it is in substantial compliance with all applicable laws and regulations. However, from time to time the Company and its affiliates are subject to pending or threatened lawsuits and investigations involving allegations of potential wrongdoing, some of which may be material or involve significant costs to resolve and/or defend, or may lead to other adverse effects on the Company and its affiliates including, but not limited to, fines, penalties and exclusion from participation in the Medicare and/or Medicaid programs. The Company’s business is subject to a number of other known and unknown risks and uncertainties, which are discussed in Item 1A (Risk Factors) of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, which was filed with the SEC on March 14, 2016 and in the Company’s Quarterly Reports on Form 10-Q. |
Significant Transactions and Ev
Significant Transactions and Events | 9 Months Ended |
Sep. 30, 2016 | |
Significant Transactions and Events | |
Significant Transactions and Events | (3) Significant Transactions and Events The Combination with Skilled On August 18, 2014, Skilled Healthcare Group, Inc., a Delaware corporation (Skilled), entered into a Purchase and Contribution Agreement with FC-GEN Operations Investment, LLC (FC-GEN) pursuant to which the businesses and operations of FC-GEN and Skilled were combined (the Combination). On February 2, 2015, the Combination was completed. Pro forma information The acquired business contributed net revenues of $608.0 million and net loss of $17.9 million to the Company for the period from February 1, 2015 to September 30, 2015. The unaudited pro forma net effect of the Combination assuming the acquisition occurred as of January 1, 2015 is as follows (in thousands, except per share amounts): Pro forma nine months ended September 30, 2015 Revenues $ Loss attributable to Genesis Healthcare, Inc. Loss per common share: Basic $ Diluted $ The unaudited pro forma financial data have been derived by combining the historical financial results of the Company and the operations acquired in the Combination for the periods presented. The unaudited results of operations include transaction and financing costs totaling $88.8 million incurred by both the Company and Skilled in connection with the Combination. These costs have been eliminated from the results of operations for the nine months ended September 30, 2015 for purposes of the pro forma financial presentation. Sale of Kansas ALFs On January 1, 2016, the Company sold 18 Kansas assisted/senior living facilities acquired in the Combination for $67.0 million. Of the proceeds received, $54.2 million were used to pay down partially the Real Estate Bridge Loans. See Note 7 – “ Long-Term Debt – Real Estate Bridge Loans.” Sale of Hospice and Home Health In March 2016, the Company signed an agreement with FC Compassus LLC, a nationwide network of community-based hospice and palliative care programs, to sell its hospice and home health operations for $84 million. Effective May 1, 2016, the Company completed the sale and received $72 million in cash and a $12 million short-term note. The sale resulted in a gain of $44.0 million and a derecognition of goodwill and identifiable intangible assets of $30.8 million. The cash proceeds were used to pay down partially the Company’s Term Loan Facility. See Note 7 – “ Long-Term Debt – Term Loan Facility.” Through the asset purchase agreement, the Company retained certain liabilities. See Note 11 – “ Commitments and Contingencies – Legal Proceedings - Creekside Hospice Litigation .” Certain members of the Company’s board of directors indirectly beneficially hold ownership interests in FC Compassus LLC totaling less than 10% in the aggregate. HUD Insured Loans During the three and nine months ended September 30, 2016, the Company closed on the HUD insured financings of three and 21 skilled nursing facilities for $14.2 million and $143.2 million, respectively. The total proceeds from the financings were used to pay down partially the Real Estate Bridge Loans. See Note 7 – “ Long-Term Debt – Real Estate Bridge Loans.” Acquisition from Revera On September 1, 2016, the Company acquired five skilled nursing facilities from Revera Assisted Living, Inc. (Revera) for a purchase price of $39.4 million. The Company had previously acquired the real property of 15 of Revera’s skilled nursing facilities on December 1, 2015 and entered into leases for four additional skilled nursing facilities while awaiting change of ownership approval for the remaining five skilled nursing facilities located in the State of Vermont. During the period from December 1, 2015 through August 31, 2016, the Company managed the operations of the remaining five skilled nursing facilities in the State of Vermont. The acquisition was financed through a real estate bridge loan for $37.0 million. See Note 7 – “ Long-Term Debt – Real Estate Bridge Loans.” |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings (Loss) Per Share | |
Earnings (Loss) Per Share | (4) The Company has three classes of common stock. Classes A and B are identical in economic and voting interests. Class C has a 1:1 voting ratio with the other two classes, representing the voting interests of the approximate 42% noncontrolling interest of the legacy FC-GEN owners. Class C common stock is a participating security; however, it shares in a de minimis economic interest and is therefore excluded from the denominator of the basic earnings (loss) per share (EPS) calculation. Basic EPS was computed by dividing net loss by the weighted-average number of outstanding common shares for the period. Diluted EPS is computed by dividing loss plus the effect of assumed conversions (if applicable) by the weighted-average number of outstanding shares after giving effect to all potential dilutive common stock, including options, warrants, common stock subject to repurchase and convertible preferred stock, if any. The computations of basic and diluted EPS are consistent with any potentially dilutive adjustments to the numerator or denominator being anti-dilutive and therefore excluded from the dilutive calculation. A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per common share follows (in thousands, except per share data): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Numerator: Loss from continuing operations $ $ $ $ Less: Net loss attributable to noncontrolling interests Loss from continuing operations attributable to Genesis Healthcare, Inc. $ $ $ $ (Loss) income from discontinued operations, net of taxes Net loss attributable to Genesis Healthcare, Inc. $ $ $ $ Denominator: Weighted average shares outstanding for basic and diluted net loss per share Basic and diluted net loss per common share: Loss from continuing operations attributable to Genesis Healthcare, Inc. $ $ $ $ (Loss) income from discontinued operations, net of taxes Net loss attributable to Genesis Healthcare, Inc. $ $ $ $ The following were excluded from net loss attributable to Genesis Healthcare, Inc. and the weighted-average diluted shares computation for the three and nine months ended September 30, 2016 and 2015, as their inclusion would have been anti-dilutive (in thousands): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Net loss Net loss Net loss Net loss attributable to attributable to attributable to attributable to Genesis Antidilutive Genesis Antidilutive Genesis Antidilutive Genesis Antidilutive Healthcare, Inc. shares Healthcare, Inc. shares Healthcare, Inc. shares Healthcare, Inc. shares Exchange of restricted stock units of noncontrolling interests $ $ $ $ Employee and director unvested restricted stock units — — — — — — Because the Company is in a net loss position for the three and nine months ended September 30, 2016, the combined impact of the assumed conversion of the approximate 42% noncontrolling interest to common stock and the related tax implications are anti-dilutive to EPS. As of September 30, 2016, there were 64,249,380 units attributed to the noncontrolling interests outstanding. In addition to the outstanding units attributed to the noncontrolling interests, the conversion of all of those units will result in the issuance of an incremental 11,187 shares of Class A common stock. In the nine months ended September 30, 2016, 984,849 shares vested and 849,233 were issued with respect to the June 3, 2015 grant. On June 8, 2016, 4,339,932 restricted stock awards were granted to employees and 360,000 restricted stock awards to non-employee directors. On August 5, 2016, an additional 503,834 restricted stock awards were granted to employees. Because the Company is in a net loss position for the three and nine months ended September 30, 2016, the combined impact of the grants under the 2015 Omnibus Equity Incentive Plan to common stock and the related tax implications are anti-dilutive to EPS. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Information | |
Segment Information | (5) Segment Information The Company has three reportable operating segments: (i) inpatient services; (ii) rehabilitation therapy services; and (iii) other services. For additional information on these reportable segments see Note 1 – “General Information – Description of Business.” A summary of the Company’s segmented revenues follows: Three months ended September 30, 2016 2015 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage (in thousands, except percentages) Revenues: Inpatient services: Skilled nursing facilities $ % $ % $ % Assisted/Senior living facilities % % % Administration of third party facilities % % % Elimination of administrative services — % — % % Inpatient services, net % % % Rehabilitation therapy services: Total therapy services % % % Elimination intersegment rehabilitation therapy services % % % Third party rehabilitation therapy services % % % Other services: Total other services % % % Elimination intersegment other services % % % Third party other services % % % Net revenues $ % $ % $ % Nine months ended September 30, 2016 2015 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage (in thousands, except percentages) Revenues: Inpatient services: Skilled nursing facilities $ % $ % $ % Assisted/Senior living facilities % % % Administration of third party facilities % % % Elimination of administrative services — % — % % Inpatient services, net % % % Rehabilitation therapy services: Total therapy services % % % Elimination intersegment rehabilitation therapy services % % % Third party rehabilitation therapy services % % % Other services: Total other services % % % Elimination intersegment other services % % % Third party other services % % % Net revenues $ % $ % $ % A summary of the Company’s unaudited condensed consolidated statement of operations follows: Three months ended September 30, 2016 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated (In thousands) Net revenues $ $ $ $ $ $ Salaries, wages and benefits — — Other operating expenses — General and administrative costs — — — — Provision for losses on accounts receivable — Lease expense — Depreciation and amortization expense — Interest expense — Loss on extinguishment of debt — — — — Investment income — — — — Other income — — — — Transaction costs — — — — Skilled Healthcare and other loss contingency expense — — — — — — Equity in net (income) loss of unconsolidated affiliates — — — (Loss) income before income tax benefit Income tax benefit — — — — (Loss) income from continuing operations $ $ $ $ $ $ Three months ended September 30, 2015 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated (In thousands) Net revenues $ $ $ $ $ $ Salaries, wages and benefits — — Other operating expenses — General and administrative costs — — — — Provision for losses on accounts receivable — Lease expense — Depreciation and amortization expense — Interest expense Gain on extinguishment of debt — — — — Investment (income) loss — — — Other loss — — — — Transaction costs — — — — Skilled Healthcare and other loss contingency expense — — — — Equity in net (income) loss of unconsolidated affiliates — — — (Loss) income before income tax benefit Income tax benefit — — — — (Loss) income from continuing operations $ $ $ $ $ $ Nine months ended September 30, 2016 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated (In thousands) Net revenues $ $ $ $ $ $ Salaries, wages and benefits — — Other operating expenses — General and administrative costs — — — — Provision for losses on accounts receivable — Lease expense — Depreciation and amortization expense — Interest expense — Loss on extinguishment of debt — — — — Investment income — — — — Other income — — — — Transaction costs — — — — Skilled Healthcare and other loss contingency expense — — — — Equity in net (income) loss of unconsolidated affiliates — — — (Loss) income before income tax benefit Income tax benefit — — — — (Loss) income from continuing operations $ $ $ $ $ $ Nine months ended September 30, 2015 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated (In thousands) Net revenues $ $ $ $ $ $ Salaries, wages and benefits — — Other operating expenses — General and administrative costs — — — — Provision for losses on accounts receivable — Lease expense — Depreciation and amortization expense — Interest expense Loss on extinguishment of debt — — — — Investment (income) loss — — — Other income — — — — Transaction costs — — — — Skilled Healthcare and other loss contingency expense — — — — Equity in net (income) loss of unconsolidated affiliates — — — (Loss) income before income tax benefit Income tax benefit — — — — (Loss) income from continuing operations $ $ $ $ $ $ The following table presents the segment assets as of September 30, 2016 compared to December 31, 2015 (in thousands): September 30, 2016 December 31, 2015 Inpatient services $ $ Rehabilitation services Other services Corporate and eliminations Total assets $ $ The following table presents segment goodwill as of September 30, 2016 compared to December 31, 2015 (in thousands): September 30, 2016 December 31, 2015 Inpatient services $ $ Rehabilitation services Other services Total goodwill $ $ With the sale of the Company’s hospice and home health operations effective May 1, 2016, the Company derecognized goodwill of $27.4 million. See Note 3 – “ Significant Transactions and Events – Sale of Hospice and Home Health .” |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | (6) Property and Equipment Property and equipment consisted of the following as of September 30, 2016 and December 31, 2015 (in thousands): September 30, 2016 December 31, 2015 Land, buildings and improvements $ $ Capital lease land, buildings and improvements Financing obligation land, buildings and improvements Equipment, furniture and fixtures Construction in progress Gross property and equipment Less: accumulated depreciation Net property and equipment $ $ |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2016 | |
Long-Term Debt Abstract | |
Long-Term Debt | (7) Long-Term Debt Long-term debt at September 30, 2016 and December 31, 2015 consisted of the following (in thousands): September 30, December 31, 2016 2015 Revolving credit facilities, net of debt issuance costs of $10,205 at September 30, 2016 and $10,254 at December 31, 2015 $ $ Term loan facility, net of original issue discount of $7,475 and net of debt issuance costs of $10,129 at December 31, 2015 — New term loans, net of debt issuance costs of $3,696 at September 30, 2016 — Real estate bridge loans, net of debt issuance costs of $5,106 at September 30, 2016 and $9,567 at December 31, 2015 HUD insured loans, net of debt issuance costs of $6,288 at September 30, 2016 and $1,395 at December 31, 2015 Mortgages and other secured debt (recourse) Mortgages and other secured debt (non-recourse), net of debt issuance costs of $143 at September 30, 2016 and $176 at December 31, 2015 Less: Current installments of long-term debt Long-term debt $ $ Revolving Credit Facilities The Company’s revolving credit facilities (the Revolving Credit Facilities) consist of a senior secured, asset-based revolving credit facility of up to $550 million under three separate tranches: Tranche A-1, Tranche A-2 and FILO Tranche. Interest accrues at a per annum rate equal to either (x) a base rate (calculated as the highest of the (i) prime rate, (ii) the federal funds rate plus 3.00%, or (iii) LIBOR plus the excess of the applicable margin between LIBOR loans and base rate loans) plus an applicable margin or (y) LIBOR plus an applicable margin. The applicable margin is based on the level of commitments for all three tranches, and in regards to LIBOR loans (i) for Tranche A-1 ranges from 3.25% to 2.75%; (ii) for Tranche A-2 ranges from 3.00% to 2.50%; and (iii) for FILO Tranche is 5.00%. The Revolving Credit Facilities mature on February 2, 2020, provided that if the Skilled Real Estate Bridge Loan (defined below) or the Revera Real Estate Bridge Loan (defined below) is not refinanced with longer term debt or their terms not extended prior to their extension option maturities of February 23, 2018 and February 27, 2019, respectively, the Revolving Credit Facilities will mature 90 days prior to such maturity date, as applicable (November 25, 2017 and November 29, 2018, respectively). Borrowing levels under the Revolving Credit Facilities are limited to a borrowing base that is computed based upon the level of the Company’s eligible accounts receivable, as defined therein. In addition to paying interest on the outstanding principal borrowed under the Revolving Credit Facilities, the Company is required to pay a commitment fee to the lenders for any unutilized commitments. The commitment fee rate ranges from 0.375% per annum to 0.50% depending upon the level of unused commitment. Borrowings and interest rates under the three tranches were as follows at September 30, 2016: Weighted Average Revolving credit facility Borrowings Interest FILO tranche $ % Tranche A-1 % Tranche A-2 % $ % As of September 30, 2016, the Company had a total borrowing base capacity of $533.3 million with outstanding borrowings under the Revolving Credit Facilities of $414.0 million and $67.0 million of drawn letters of credit securing insurance and lease obligations, leaving the Company with approximately $52.3 million of available borrowing capacity under the Revolving Credit Facilities. On July 29, 2016, the Company entered into an amendment (the ABL Amendment) to its Revolving Credit Facilities. Among other things, the ABL Amendment (i) modifies financial covenants effective June 30, 2016 to provide additional flexibility to the Company; (ii) permits the Company to enter into certain other transactions; and (iii) increases the interest rate margin applicable to the revolving loans under the ABL Credit Agreement (the New Applicable Margin). The New Applicable Margin for LIBOR loans increased (i) for Tranche A-1 loans, from a range of 2.75% to 3.25% to a range of 3.00% to 3.50%, (ii) for Tranche A-2 loans, from a range of 2.50% to 3.00% to a range of 3.00% to 3.50% and (iii) for FILO Tranche, from 5.00% to 6.00%. The New Applicable Margin for Base Rate (calculated as the highest of the (i) prime rate, (ii) the federal funds rate plus 3.00%, or (iii) LIBOR plus the excess of the applicable margin between LIBOR loans and base rate loans) loans increased (i) for Tranche A-1 loans, from a range of 1.75% to 2.25% to a range of 2.00% to 2.50%, (ii) for Tranche A-2 loans, from a range of 1.50% to 2.00% to a range of 2.00% to 2.50% and (iii) for FILO Tranche, from 4.00% to 5.00%. The amended Revolving Credit Facilities contain financial, affirmative and negative covenants, and events of default effective as of June 30, 2016 that are substantially identical to those of the New Term Loan Agreement (as defined below), but also contain a minimum liquidity covenant and a springing minimum fixed charge coverage covenant tied to the minimum liquidity requirement. The most restrictive financial covenant is the maximum leverage ratio which requires the Company to maintain a leverage ratio, as defined, of no more than 6.0 to 1.0 through March of 2017 and stepping down over the course of the loan to 4.0 to 1.0 beginning in 2020. Term Loan Facility and New Term Loan Agreement The five-year term loan facility (Term Loan Facility) was secured by a first priority lien on the membership interests in the Company and on substantially all of the Company’s and its subsidiaries’ assets other than collateral held on a first priority basis by the Revolving Credit Facilities lender. Borrowings under the Term Loan Facility bore interest at a rate per annum equal to the applicable margin plus, at the Company’s option, either (x) LIBOR or (y) a base rate determined by reference to the highest of (i) the lender defined prime rate, (ii) the federal funds rate effective plus one half of one percent and (iii) LIBOR described in subclause (x) plus 1.0%. LIBOR based loans were subject to an interest rate floor of 1.5% and base rate loans were subject to a floor of 2.5%. The Term Loan Facility was set to mature on the earliest of (i) December 4, 2017 and (ii) 90 days prior to the maturity of the Skilled Real Estate Bridge Loan, including extensions. On July 29, 2016, the Company paid the outstanding balance of $153.4 million under the Term Loan Facility. In addition, the Company paid an early termination fee of approximately $3.1 million. The Term Loan Facility and all guarantees and liens related thereto were terminated upon such payments. On July 29, 2016, the Company and certain of its affiliates, including FC-GEN Operations Investment, LLC (the Borrower) entered into a four-year term loan agreement (the New Term Loan Agreement) with an affiliate of Welltower Inc. (Welltower) and an affiliate of Omega Healthcare Investors, Inc. (Omega). The New Term Loan Agreement provides for term loans (the New Term Loans) in the aggregate principal amount of $120.0 million, with scheduled annual amortization of 2.5% of the initial principal balance in years one, two and three, and 5.0% in year four. Borrowings under the New Term Loan Agreement bear interest at a rate equal to a base rate (subject to a floor of 1.00%) or an ABR rate (subject to a floor of 2.0%), plus in each case a specified applicable margin. The initial applicable margin for base rate loans is 13.0% per annum and the initial applicable margin for ABR rate loans is 12.0% per annum. At the Company’s election, with respect to either base rate or ABR rate loans, up to 2.0% of the interest may be paid either in cash or paid-in-kind. The proceeds of the New Term Loan, along with cash on hand, were used to repay all outstanding term loans and other obligations under the Term Loan Facility. As of September 30, 2016, the New Term Loans had an outstanding principal balance of $120.2 million. The New Term Loan Agreement is secured by a first priority lien on the equity interests of the subsidiaries of the Company and the Borrower as well as certain other assets of the Company, the Borrower and their subsidiaries, subject to certain exceptions. The New Term Loan Agreement is also secured by a junior lien on the assets that secure the Revolving Credit Facilities, as amended, on a first priority basis. Welltower and Omega, or their respective affiliates, are each currently landlords under certain master lease agreements to which the Company and/or its affiliates are tenants. In addition, Welltower currently provides funding, pursuant to two bridge loans, to certain affiliates of the Company. The Company also issued a note to Welltower as part of the November 1, 2016 transaction, in which Welltower sold the real estate of 64 facilities that the Company leased from Welltower. The Company will continue to operate these facilities under a new master lease agreement. See Note 14 – “Subsequent Events – New Master Leases.” The New Term Loan Agreement contains financial, affirmative and negative covenants, and events of default that are customary for debt securities of this type. Financial covenants include four maintenance covenants which require the Company to maintain a maximum leverage ratio, a minimum interest coverage ratio, a minimum fixed charge coverage ratio and maximum capital expenditures. The most restrictive financial covenant is the maximum leverage ratio which requires the Company to maintain a leverage ratio, as defined therein, of no more than 6.0 to 1.0 through March of 2017 and stepping down over the course of the loan to 4.0 to 1.0 beginning in 2020. Real Estate Bridge Loans In connection with the Combination on February 2, 2015, the Company entered into a $360.0 million real estate bridge loan (the Skilled Real Estate Bridge Loan), which is secured by a mortgage lien on the real property of 67 facilities and a second lien on certain receivables of the operators of such facilities. The Skilled Real Estate Bridge Loan is subject to a 24-month term with two extension options of 90 days each followed by one extension option of 180 days. The loan accrues interest at a rate equal to LIBOR, plus 6.75%, plus an additional margin that ranges up to 7.50% based on the aggregate number of days the Skilled Real Estate Bridge Loan is outstanding. The interest rate is also subject to a LIBOR interest rate floor of 0.5%. The Skilled Real Estate Bridge Loan bore interest of 12.78% at September 30, 2016. The Skilled Real Estate Bridge Loan is subject to payments of interest only during the term with a balloon payment due at maturity, provided, that to the extent the subsidiaries receive any net proceeds from the sale and/or refinance of the underlying facilities such net proceeds are required to be used to repay the outstanding principal balance of the Skilled Real Estate Bridge Loan. The proceeds of the Skilled Real Estate Bridge Loan were used to repay Skilled’s first lien senior secured term loan, repay Skilled’s mortgage loans and asset based revolving credit facility with MidCap Financial with excess proceeds used to fund direct costs of the Combination with the Company. The Skilled Real Estate Bridge Loan has an outstanding principal balance of $160.7 million at September 30, 2016. In connection with the acquisition of the real property of 15 skilled nursing facilities on December 1, 2015 from Revera, the Company entered into a $134.1 million real estate bridge loan (the Revera Real Estate Bridge Loan and, together with the Skilled Real Estate Bridge Loan, the Welltower Real Estate Bridge Loans), which is secured by a mortgage lien on the real property of 15 facilities. On September 1, 2016, the Company acquired another five skilled nursing facilities from Revera drawing on the remaining available commitment of the Revera Real Estate Bridge Loan of $37.0 million. The Revera Real Estate Bridge Loan is subject to a 24-month term, reset effective September 1, 2016, with two extension options of 90 days each and accrues interest at a rate equal to LIBOR, plus 6.75%, plus an additional margin that ranges up to 7.00% based on the aggregate number of days the Revera Real Estate Bridge Loan is outstanding, plus 0.25% multiplied by the result of dividing the number of percentage points by which the loan-to-value ratio, defined as the ratio, expressed as a percentage, of (i) the outstanding principal balance to (ii) the total appraised value of the facilities as of the closing date, exceeds 75% by five. The interest rate is also subject to a LIBOR interest rate floor of 0.5%. The Revera Real Estate Bridge Loan bore interest of 9.53% at September 30, 2016. The Revera Real Estate Bridge Loan is subject to payments of interest only during the term with a balloon payment due at maturity, provided, that to the extent the subsidiaries receive any net proceeds from the sale and/or refinance of the underlying facilities such net proceeds are required to be used to repay the outstanding principal balance of the Revera Real Estate Bridge Loan. The proceeds of the Revera Real Estate Bridge Loan were used to finance the acquisition of the real property of 20 Revera facilities. The Revera Real Estate Bridge Loan has an outstanding principal balance of $171.1 million at September 30, 2016. On April 1, 2016, the Company acquired one skilled nursing facility and entered into a $9.9 million real estate bridge loan. On May 23, 2016, the Company acquired the real property of five skilled nursing facilities it operated under a leasing arrangement and entered into a $44.0 million real estate bridge loan (collectively, the Other Real Estate Bridge Loans). Each of the Other Real Estate Bridge Loans has a term of three years and accrues interest at a rate equal to LIBOR plus a margin of 4.00%. The Other Real Estate Bridge Loans bore interest of 4.53% at September 30, 2016. The Other Real Estate Bridge Loans are subject to payments primarily of interest only, with some principal payments in the second and third years, during the term with a balloon payment due at maturity, provided, that to the extent the subsidiaries receive any net proceeds from the sale and/or refinance of the underlying facilities such net proceeds are required to be used to pay down the outstanding principal balance of the Other Real Estate Bridge Loans. The Other Real Estate Bridge Loans have an outstanding principal balance of $53.9 million at September 30, 2016. HUD Insured Loans As of September 30, 2016, the Company has 32 skilled nursing facility loans insured by the U.S. Department of Housing and Urban Development (HUD). The HUD insured loans have an original amortization term of 30 to 35 years. As of September 30, 2016 the Company has HUD insured loans with a combined aggregate principal balance of $248.8 million, which includes a $14.2 million debt premium on 10 skilled nursing facility loans established in purchase accounting in connection with the Combination. These loans have an average remaining term of 32 years with fixed interest rates ranging from 3.1% to 4.6% and a weighted average interest rate of 3.7%. Depending on the mortgage agreement, prepayments are generally allowed only after 12 months from the inception of the mortgage. Prepayments are subject to a penalty of 10% of the remaining principal balances in the first year and the prepayment penalty decreases each subsequent year by 1% until no penalty is required thereafter. Any further HUD insured loans will require additional HUD approval. All HUD insured loans are non-recourse loans to the Company. All loans are subject to HUD regulatory agreements that require escrow reserve funds to be deposited with the loan servicer for mortgage insurance premiums, property taxes, insurance and for capital replacement expenditures. As of September 30, 2016, the Company has total escrow reserve funds of $16.3 million with the loan servicer that are reported within prepaid expenses. Other Debt Mortgages and other secured debt (recourse). The Company carries mortgage loans and notes payable on certain of its corporate office buildings and other acquired assets. The loans are secured by the underlying real property and have fixed or variable rates of interest ranging from 2.3% to 6.0% at September 30, 2016, with maturity dates ranging from 2018 to 2020. Mortgages and other secured debt (non-recourse). Loans are carried by certain of the Company’s consolidated joint ventures. The loans consist principally of revenue bonds and secured bank loans. Loans are secured by the underlying real and personal property of individual facilities and have fixed or variable rates of interest ranging from 2.5% to 22.2% with a weighted average interest rate of 4.2%, at September 30, 2016. Maturity dates range from 2018 to 2034. Loans are labeled “ non-recourse” because neither the Company nor any of its wholly owned subsidiaries is obligated to perform under the respective loan agreements. Debt Covenants The Revolving Credit Facilities, the New Term Loan Agreement and the Welltower Real Estate Bridge Loans (collectively, the Credit Facilities) each contain a number of restrictive covenants that, among other things, impose operating and financial restrictions on the Company and its subsidiaries. The Credit Facilities also require the Company to meet defined financial covenants, including interest coverage ratio, a maximum consolidated net leverage ratio and a minimum consolidated fixed charge coverage ratio, all as defined in the applicable agreements. The Credit Facilities also contain other customary covenants and events of default and cross default. As of September 30, 2016, the Company is in compliance with all covenants contained in the Credit Facilities. The Company’s ability to maintain compliance with its debt covenants depends in part on management’s ability to increase revenue and control costs. Should the Company fail to comply with its debt covenants at a future measurement date, it could, absent necessary and timely waivers and/or amendments, be in default under certain of its existing credit agreements. To the extent any cross-default provisions may apply, the default could have an even more significant impact on the Company’s financial position. As of September 30, 2016, considering the combination of scheduled debt maturities or accelerated maturity features in other debt agreements, the Company has $386.2 million in debt obligations due in the next two years. The liquidity and financial condition of the Company will be adversely impacted in the event these obligations cannot be extended or refinanced prior to their scheduled or accelerated maturity dates. The maturity of total debt of $1,186.2 million at September 30, 2016 is as follows (in thousands): Twelve months ended September 30, 2017 $ 2018 2019 2020 2021 Thereafter Total debt maturity $ |
Leases and Lease Commitments
Leases and Lease Commitments | 9 Months Ended |
Sep. 30, 2016 | |
Leases and Lease Commitments | |
Leases and Lease Commitments | (8) Leases and Lease Commitments The Company leases certain facilities under capital and operating leases. Future minimum payments for the next five years and thereafter under such leases at September 30, 2016 are as follows (in thousands): Twelve months ended September 30, Capital Leases Operating Leases 2017 $ $ 2018 2019 2020 2021 Thereafter Total future minimum lease payments $ Less amount representing interest Capital lease obligation Less current portion Long-term capital lease obligation $ Capital Lease Obligations The capital lease obligations represent the present value of minimum lease payments under such capital lease and cease use arrangements and bear imputed interest at rates ranging from 3.5% to 12.8% at September 30, 2016, and mature at dates ranging from 2016 to 2047. Deferred Lease Balances At September 30, 2016 and December 31, 2015, the Company had $48.4 million and $54.7 million, respectively, of favorable leases net of accumulated amortization, included in identifiable intangible assets, and $30.3 million and $35.5 million, respectively, of unfavorable leases net of accumulated amortization included in other long-term liabilities on the consolidated balance sheet. Favorable and unfavorable lease assets and liabilities arise through the acquisition of operating leases in place that requires those contracts be recorded at their then fair value. The fair value of a lease is determined through a comparison of the actual rental rate with rental rates prevalent for similar assets in similar markets. A favorable lease asset to the Company represents a rental stream that is below market, and conversely an unfavorable lease is one with its cost above market rates. These assets and liabilities amortize as lease expense over the remaining term of the respective leases on a straight-line basis. At September 30, 2016 and December 31, 2015, the Company had $30.5 million and $27.3 million, respectively, of deferred straight-line rent balances included in other long-term liabilities on the consolidated balance sheet. Lease Covenants Certain lease agreements contain a number of restrictive covenants that, among other things, and subject to certain exceptions, impose operating and financial restrictions on the Company and its subsidiaries. These leases also require the Company to meet defined financial covenants, including a minimum level of consolidated liquidity, a maximum consolidated net leverage ratio and a minimum consolidated fixed charge coverage. On July 29, 2016, the Company entered into amendments to its master lease agreements with Welltower, Sabra Health Care REIT, Inc. (Sabra) and Omega (collectively, the Master Lease Amendments). Among other things, the Master Lease Amendments modified financial covenants effective as of June 30, 2016 to provide the Company with additional flexibility. The Master Lease Amendments each contain a number of financial, affirmative and negative covenants. As of September 30, 2016, the Company is in compliance with all covenants contained in the Master Lease Amendments. At September 30, 2016, the Company did not meet certain financial covenants contained in four leases related to 30 of its facilities. The Company is and expects to continue to be current in the timely payment of its obligations under such leases. These leases do not have cross default provisions, nor do they trigger cross default provisions in any of the Company’s other loan or lease agreements. The Company will continue to work with the related credit parties to amend such leases and the related financial covenants. The Company does not believe the breach of such financial covenants at September 30, 2016 will have a material adverse impact on it. The Company has been afforded certain cure rights to such defaults by posting collateral in the form of additional letters of credit or security deposit. The Company’s ability to maintain compliance with its lease covenants depends in part on management’s ability to increase revenue and control costs. Due to continuing changes in the healthcare industry, as well as the uncertainty with respect to changing referral patterns, patient mix, and reimbursement rates, it is possible that future operating performance may not generate sufficient operating results to maintain compliance with its quarterly lease covenant compliance requirements. Should the Company fail to comply with its lease covenants at a future measurement date, it could, absent necessary and timely waivers and/or amendments, be in default under certain of its existing lease agreements. To the extent any cross-default provisions may apply, the default could have an even more significant impact on the Company’s financial position. |
Financing Obligation
Financing Obligation | 9 Months Ended |
Sep. 30, 2016 | |
Financing Obligation | |
Financing Obligation | (9) Future minimum payments for the next five years and thereafter under leases classified as financing obligations at September 30, 2016 are as follows (in thousands): Twelve months ended September 30, 2017 $ 2018 2019 2020 2021 Thereafter Total future minimum lease payments Less amount representing interest Financing obligations $ Less current portion Long-term financing obligations $ |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (10) Income Taxes The Company effectively owns 58% of FC-GEN, an entity taxed as a partnership for U.S. income tax purposes. This is the Company’s only source of taxable income. FC-GEN is subject to income taxes in several U.S. state and local jurisdictions. The income taxes assessed by these jurisdictions are included in the Company’s tax provision, but at its 58% ownership of FC-GEN. For the three months ended September 30, 2016, the Company recorded an income tax benefit of $25.9 million from continuing operations, representing an effective tax rate of 33.1%, compared to an income tax benefit of $16.7 million from continuing operations, representing an effective tax rate of 21.5%, for the same period in 2015. For the nine months ended September 30, 2016, the Company recorded an income tax benefit of $19.7 million from continuing operations, representing an effective tax rate of 11.0%, compared to an income tax benefit of $26.8 million from continuing operations, representing an effective tax rate of 11.2%, for the same period in 2015. The increase in the effective tax rate for the three months ended September 30, 2016, is attributable to a $28.2 million release of a FIN48 reserve for the expiration of the statute of limitations regarding the Sun IRC 382 realized built-in-gain net operating loss carryforward. There is also a full valuation allowance against the Company’s deferred tax assets, excluding the reversal of deferred tax liabilities related to indefinite-lived assets, and the Company’s deferred tax asset on its Bermuda captive insurance company’s discounted unpaid loss reserve. On December 31, 2015, in assessing the requirement for, and amount of, a valuation allowance in accordance with the more likely than not standard, management determined that the Company would not realize its deferred tax assets and established a valuation allowance against the deferred tax assets. As of September 30, 2016, management has determined that the valuation allowance is still necessary. The Company’s Bermuda captive insurance company is expected to generate positive U.S. federal taxable income in 2016, with no net operating loss to offset its taxable income. The captive also does not have any tax credits to offset its U.S. federal income tax. Beginning with the fourth quarter of 2014, the Company initiated rehabilitation therapy services within the People’s Republic of China. In the quarter ended March 31, 2016, the Company initiated rehabilitation therapy services within Hong Kong. At September 30, 2016, these business operations remain in their respective startup stage. Management does not anticipate these operations will generate taxable income in the near term. The operations currently do not have a material effect on the Company’s effective tax rate. Exchange Rights and Tax Receivable Agreement Following the Combination, the owners of FC-GEN will have the right to exchange their membership interests in FC-GEN for shares of Class A Common Stock of the Company or cash, at the Company’s option. As a result of such exchanges, the Company’s membership interest in FC-GEN will increase and its purchase price will be reflected in its share of the tax basis of FC-GEN’s tangible and intangible assets. Any resulting increases in tax basis are likely to increase tax depreciation and amortization deductions and, therefore, reduce the amount of income tax the Company would otherwise be required to pay in the future. Any such increase would also decrease gain (or increase loss) on future dispositions of the affected assets. There have been 200,034 exchanges in the three and nine months ended September 30, 2016. Concurrent with the Combination, the Company entered into a tax receivable agreement (TRA) with the owners of FC-GEN. The agreement provides for the payment by the Company to the owners of FC-GEN of 90% of the cash savings, if any, in U.S. federal, state and local income tax that the Company actually realizes as a result of (i) the increases in tax basis attributable to the owners of FC-GEN and (ii) tax benefits related to imputed interest deemed to be paid by the Company as a result of the TRA. Under the TRA, the benefits deemed realized by the Company as a result of the increase in tax basis attributable to the owners of FC-GEN generally will be computed by comparing the actual income tax liability of the Company to the amount of such taxes that the Company would have been required to pay had there been no such increase in tax basis. Estimating the amount of payments that may be made under the TRA is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors. The actual increase in tax basis and deductions, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, including: · the timing of exchanges—for instance, the increase in any tax deductions will vary depending on the fair value of the depreciable or amortizable assets of FC-GEN and its subsidiaries at the time of each exchange, which fair value may fluctuate over time; · the price of shares of Company Class A Common Stock at the time of the exchange—the increase in any tax deductions, and the tax basis increase in other assets of FC-GEN and its subsidiaries is directly proportional to the price of shares of Company Class A Common Stock at the time of the exchange; · the amount and timing of the Company’s income—the Company is required to pay 90% of the deemed benefits as and when deemed realized. If FC-GEN does not have taxable income, the Company is generally not required (absent a change of control or circumstances requiring an early termination payment) to make payments under the TRA for that taxable year because no benefit will have been actually realized. However, any tax benefits that do not result in realized benefits in a given tax year likely will generate tax attributes that may be utilized to generate benefits in previous or future tax years. The utilization of such tax attributes will result in payments under the TRA; and · future tax rates of jurisdictions in which the Company has tax liability. The TRA also provides that upon certain mergers, asset sales, other forms of business combinations or other changes of control, FC-GEN (or its successor’s) obligations under the TRA would be based on certain assumptions defined in the TRA. As a result of these assumptions, FC-GEN could be required to make payments under the TRA that are greater or less than the specified percentage of the actual benefits realized by the Company that are subject to the TRA. In addition, if FC-GEN elects to terminate the TRA early, it would be required to make an early termination payment, which upfront payment may be made significantly in advance of the anticipated future tax benefits. Payments generally are due under the TRA within a specified period of time following the filing of FC-GEN’s U.S. federal and state income tax return for the taxable year with respect to which the payment obligation arises. Payments under the TRA generally will be based on the tax reporting positions that FC-GEN will determine. Although FC-GEN does not expect the Internal Revenue Service (IRS) to challenge the Company’s tax reporting positions, FC-GEN will not be reimbursed for any overpayments previously made under the TRA, but any overpayments will reduce future payments. As a result, in certain circumstances, payments could be made under the TRA in excess of the benefits that FC-GEN actually realizes in respect of the tax attributes subject to the TRA. The term of the TRA generally will continue until all applicable tax benefits have been utilized or expired, unless the Company exercises its right to terminate the TRA and make an early termination payment. In certain circumstances (such as certain changes in control, the election of the Company to exercise its right to terminate the agreement and make an early termination payment or an IRS challenge to a tax basis increase) it is possible that cash payments under the TRA may exceed actual cash savings. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (11) Loss Reserves For Certain Self-Insured Programs General and Professional Liability and Workers’ Compensation The Company self-insures for certain insurable risks, including general and professional liabilities and workers’ compensation liabilities through the use of self-insurance or retrospective and self-funded insurance policies and other hybrid policies, which vary among states in which the Company operates, including wholly owned captive insurance subsidiaries, to provide for potential liabilities for general and professional liability claims and workers’ compensation claims. Policies are typically written for a duration of twelve months and are measured on a “claims made” basis. Regarding workers’ compensation, the Company self-insures to its deductible and purchases statutorily required insurance coverage in excess of its deductible. There is a risk that amounts funded by the Company’s self-insurance programs may not be sufficient to respond to all claims asserted under those programs. Insurance reserves represent estimates of future claims payments. This liability includes an estimate of the development of reported losses and losses incurred but not reported. Provisions for changes in insurance reserves are made in the period of the related coverage. The Company also considers amounts that may be recovered from excess insurance carriers in estimating the ultimate net liability for such risks. The Company’s management employs its judgment and periodic independent actuarial analysis in determining the adequacy of certain self-insured workers’ compensation and general and professional liability obligations recorded as liabilities in the Company’s financial statements. The Company evaluates the adequacy of its self-insurance reserves on a semi-annual basis or more often when it is aware of changes to its incurred loss patterns that could impact the accuracy of those reserves. The methods of making such estimates and establishing the resulting reserves are reviewed periodically and are based on historical paid claims information and nationwide nursing home trends. The foundation for most of these methods is the Company’s actual historical reported and/or paid loss data. Any adjustments resulting therefrom are reflected in current earnings. Claims are paid over varying periods, and future payments may be different than the estimated reserves. The Company utilizes third-party administrators (TPAs) to process claims and to provide it with the data utilized in its assessments of reserve adequacy. The TPAs are under the oversight of the Company’s in-house risk management and legal functions. These functions ensure that the claims are properly administered so that the historical data is reliable for estimation purposes. Case reserves, which are approved by the Company’s legal and risk management departments, are determined based on an estimate of the ultimate settlement and/or ultimate loss exposure of individual claims. The reserves for loss for workers’ compensation risks are discounted based on actuarial estimates of claim payment patterns using a discount rate of approximately 1% for each policy period presented. The discount rate for the current policy year is 0.96%. The discount rates are based upon the risk-free rate for the appropriate duration for the respective policy year. The removal of discounting would have resulted in an increased reserve for workers’ compensation risks of $8.4 million and $8.6 million as of September 30, 2016 and December 31, 2015, respectively. The reserves for general and professional liability are recorded on an undiscounted basis. For the three months ended September 30, 2016 and 2015, the provision for general and professional liability risk totaled $34.1 million and $28.6 million, respectively. For the nine months ended September 30, 2016 and 2015, the provision for general and professional liability risk totaled $104.3 million and $100.2 million, respectively. The reserves for general and professional liability were $391.2 million and $371.6 million as of September 30, 2016 and December 31, 2015, respectively. For the three months ended September 30, 2016 and 2015, the provision for workers’ compensation risk totaled $20.2 million and $18.8 million, respectively. For the nine months ended September 30, 2016 and 2015, the provision for workers’ compensation risk totaled $42.2 million and $50.6 million, respectively. The reserves for workers’ compensation risks were $219.7 million and $223.7 million as of September 30, 2016 and December 31, 2015, respectively. Health Insurance The Company offers employees an option to participate in self-insured health plans. Health insurance claims are paid as they are submitted to the plans’ administrators. The Company maintains an accrual for claims that have been incurred but not yet reported to the plans’ administrators and therefore have not yet been paid. The liability for the self-insured health plan is recorded in accrued compensation in the consolidated balance sheets. Although management believes that the amounts provided in the Company’s consolidated financial statements are adequate and reasonable, there can be no assurances that the ultimate liability for such self-insured risks will not exceed management’s estimates. Legal Proceedings The Company and certain of its subsidiaries are involved in various litigation and regulatory investigations arising in the ordinary course of business. While there can be no assurance, based on the Company’s evaluation of information currently available, with the exception of the specific matters noted below, management does not believe the results of such litigation and regulatory investigations would have a material adverse effect on the results of operations, financial position or cash flows of the Company. However, the Company’s assessment of materiality may be affected by limited information (particularly in the early stages of government investigations). Accordingly, the Company’s assessment of materiality may change in the future based upon availability of discovery and further developments in the proceedings at issue. The results of legal proceedings are inherently uncertain, and material adverse outcomes are possible. From time to time the Company may enter into confidential discussions regarding the potential settlement of pending investigations or litigation. There are a variety of factors that influence the Company’s decisions to settle and the amount it may choose to pay, including the strength of the Company’s case, developments in the investigation or litigation, the behavior of other interested parties, the demand on management time and the possible distraction of the Company’s employees associated with the case and/or the possibility that the Company may be subject to an injunction or other equitable remedy. The settlement of any pending investigation, litigation or other proceedings could require the Company to make substantial settlement payments and result in its incurring substantial costs. Agreement in Principle on Financial Terms of a Settlement In July 2016, the Company and the U.S. Department of Justice (the DOJ) reached an agreement in principle on the financial terms of a settlement regarding four matters arising out of the activities of Skilled or Sun Healthcare prior to their operations becoming part of the Company’s operations (collectively, the Successor Matters). The four matters are: the Creekside Hospice Litigation, the Therapy Matters Investigation, the Staffing Matters Investigation and the SunDance Part B Therapy Matter (each as defined below). The Company has agreed to the settlement in principle in order to resolve the allegations underlying the Successor Matters and to avoid the uncertainty and expense of litigation. Based on the agreement in principle and in anticipation of the execution of final agreements and payment of a settlement amount of $52.7 million (the Settlement Amount), the Company recorded an additional loss contingency expense in the amount of $13.6 million in the second quarter of 2016, to increase its previously estimated and recorded liability. The Company expects to remit the Settlement Amount to the government over a period of five (5) years, once the agreement has been fully documented. The agreement in principle is subject to negotiation, completion and execution of appropriate implementing agreements, including a settlement agreement or agreements, which are expected to be finalized in the fourth quarter of 2016, and the final approval of the respective parties. There can be no assurance that the Company will enter into a final settlement agreement with the DOJ. At this time, management believes that the ultimate outcome of the Successor Matters will not have a material adverse effect on the Company’s consolidated financial condition, results of operations and cash flows. Creekside Hospice Litigation On August 2, 2013, the United States Attorney for the District of Nevada and the Civil Division of the DOJ informed Skilled that its Civil Division was investigating Skilled, as well as its then subsidiary, Creekside Hospice II, LLC, for possible violations of federal and state healthcare fraud and abuse laws and regulations (the Creekside Hospice Litigation). Those laws could have included the federal False Claims Act (FCA) and the Nevada False Claims Act (NFCA). The FCA provides for civil and administrative fines and penalties, plus treble damages. The NFCA provides for similar fines and penalties, including treble damages. Violations of those federal or state laws could also subject the Company and/or its subsidiaries to exclusion from participation in the Medicare and Medicaid programs. On or about August 6, 2014, in relation to the investigation the DOJ filed a notice of intervention in two pending qui tam proceedings filed by private party relators under the FCA and the NFCA and advised that it intended to take over the actions. The DOJ filed its complaint in intervention on November 25, 2014, against Creekside, Skilled Healthcare Group, Inc., and Skilled Healthcare, LLC, asserting, among other things, that certain claims for hospice services provided by Creekside in the time period 2010 to 2013 (prior to the Combination) did not meet Medicare requirements for reimbursement and were in violation of the civil False Claims Act. Therapy Matters Investigation In February 2015, representatives of the DOJ informed the Company that they were investigating the provision of therapy services at certain Skilled facilities from 2005 through 2013 (prior to the Combination) and may pursue legal action against the Company and certain of its subsidiaries including Hallmark Rehabilitation GP, LLC for alleged violations of the federal and state healthcare fraud and abuse laws and regulations related to such services (the Therapy Matters Investigation). Those laws could have included the FCA and similar state laws. Staffing Matters Investigation In February 2015, representatives of the DOJ informed the Company that it intended to pursue legal action against the Company and certain of its subsidiaries related to staffing and certain quality of care allegations at certain Skilled facilities that occurred prior to the Combination, related to the issues adjudicated against the Company and those subsidiaries in a previously disclosed class action lawsuit that Skilled settled in 2010 (the Staffing Matters Investigation). Those laws could have included the FCA and similar state laws. SunDance Part B Therapy Matter A subsidiary of Sun Healthcare, SunDance Rehabilitation Corp. (SunDance), operates an outpatient agency licensed to provide Medicare Part B therapy services at assisted/senior living facilities in Georgia and is a party to a qui tam proceeding that was filed by a private party relator under the FCA. No SunDance agencies outside of Georgia are part of the qui tam proceeding. The Civil Division of the United States Attorney's Office for the District of Georgia has filed a notice of intervention in this matter in March 2016 and asserts that certain SunDance claims for therapy services did not meet Medicare requirements for reimbursement. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value of Financial Instruments | |
Fair Value Measurements | (12) The Company’s financial instruments consist primarily of cash and equivalents, restricted cash, trade accounts receivable, investments in marketable securities, accounts payable and short and long-term debt. The Company’s financial instruments, other than its trade accounts receivable and accounts payable, are spread across a number of large financial institutions whose credit ratings the Company monitors and believes do not currently carry a material risk of non-performance. Certain of the Company’s financial instruments contain an off-balance-sheet risk. Recurring Fair Value Measures Fair value is defined as an exit price (i.e., the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as shown below. An instrument’s classification within the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 — Inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability. Level 3 — Inputs that are unobservable for the asset or liability based on the Company’s own assumptions (about the assumptions market participants would use in pricing the asset or liability). The tables below presents the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable September 30, Identical Assets Observable Inputs Inputs Assets: 2016 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ $ $ — $ — Restricted cash and equivalents — — Restricted investments in marketable securities — — Total $ $ $ — $ — Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs Assets: 2015 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ $ $ — $ — Restricted cash and equivalents — — Restricted investments in marketable securities — — Total $ $ $ — $ — The Company places its cash and equivalents and restricted investments in marketable securities in quality financial instruments and limits the amount invested in any one institution or in any one type of instrument. The Company has not experienced any significant losses on such investments. Debt Instruments The table below shows the carrying amounts and estimated fair values of the Company’s primary long-term debt instruments: September 30, 2016 December 31, 2015 Carrying Value Fair Value Carrying Value Fair Value Revolving credit facilities $ $ $ $ Term loan facility — — New term loans — — Real estate bridge loans HUD insured loans Mortgages and other secured debt (recourse) Mortgages and other secured debt (non-recourse) $ $ $ $ The fair value of debt is based upon market prices or is computed using discounted cash flow analysis, based on the Company’s estimated borrowing rate at the end of each fiscal period presented. The Company believes that the inputs to the pricing models qualify as Level 2 measurements. Non-Recurring Fair Value Measures The Company recently applied the fair value measurement principles to certain of its non-recurring nonfinancial assets in connection with an impairment test . The following table presents the Company’s hierarchy for nonfinancial assets measured at fair value on a non-recurring basis (in thousands): Impairment Charges - Carrying Value Nine months ended September 30, 2016 September 30, 2016 Assets: Property and equipment, net $ $ — Goodwill — Intangible assets — Impairment Charges - Carrying Value Nine months ended December 31, 2015 September 30, 2015 Assets: Property and equipment, net $ $ — Goodwill — Intangible assets — The fair value of tangible and intangible assets is determined using a discounted cash flow approach, which is a significant unobservable input (Level 3). The Company estimates the fair value using the income approach (which is a discounted cash flow technique). These valuation methods required management to make various assumptions, including, but not limited to, future profitability, cash flows and discount rates. The Company’s estimates are based upon historical trends, management’s knowledge and experience and overall economic factors, including projections of future earnings potential. Developing discounted future cash flows in applying the income approach requires the Company to evaluate its intermediate to longer-term strategies, including, but not limited to, estimates of revenue growth, operating margins, capital requirements, inflation and working capital management. The development of appropriate rates to discount the estimated future cash flows requires the selection of risk premiums, which can materially affect the present value of future cash flows. The Company estimated the fair value of acquired tangible and intangible assets using discounted cash flow techniques that included an estimate of future cash flows, consistent with overall cash flow projections used to determine the purchase price paid to acquire the business, discounted at a rate of return that reflects the relative risk of the cash flows. The Company believes the estimates and assumptions used in the valuation methods are reasonable. |
Asset Impairment Charges
Asset Impairment Charges | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Asset Impairment Charges | (13) Asset Impairment Charges Long-Lived Assets with a Definite Useful Life The Company’s long-lived assets with a definite useful life were tested for impairment at the lowest levels for which there are identifiable cash flows. The Company estimated the future net undiscounted cash flows expected to be generated from the use of the long-lived assets and then compared the estimated undiscounted cash flows to the carrying amount of the long-lived assets. The cash flow period was based on the remaining useful lives of the primary asset in each long-lived asset group, principally a building in the inpatient segment and customer relationship assets in the rehabilitation therapy services segment. For the three and nine months ended Septemeber 30, 2016, the Company recognized no impairment charges on its long-lived assets with a definite useful life. Goodwill Adverse changes in the operating environment and related key assumptions used to determine the fair value of the Company’s reporting units and indefinite-lived intangible assets may result in future impairment charges for a portion or all of these assets. Specifically, if the rate of growth of government and commercial revenues earned by the Company’s reporting units were to be less than projected or if healthcare reforms were to negatively impact the Company’s business, an impairment charge of a portion or all of these assets may be required. An impairment charge could have a material adverse effect on the Company’s business, financial position and results of operations but would not be expected to have an impact on the Company’s cash flows or liquidity. The Company performed its annual goodwill impairment test as of September 30, 2016 and 2015. Although the assessment is still in process, the Company believes that the fair value of the reporting unit exceeded the carrying value based upon the market capitalization including a control premium and a discounted cash flow analysis. Determining fair value requires the exercise of significant judgment, including judgment about appropriate discount rates, perpetual growth rates, the amount and timing of expected future cash flows, as well as relevant comparable company earnings multiples for the market-based approach. The cash flows employed in the discounted cash flow analyses are based on the Company’s internal business model for 2016 and, for years beyond 2016 the growth rates used are an estimate of the future growth in the industry in which the Company participates. The discount rates used in the discounted cash flow analyses are intended to reflect the risks inherent in the future cash flows of the reporting unit and are based on an estimated cost of capital, which was determined based on the Company’s estimated cost of capital relative to its capital structure. In addition, the market-based approach utilizes comparable company public trading values, research analyst estimates and, where available, values observed in private market transactions. The Company performed a quantitative test for impairment of goodwill to assess the impact of changes in the regulatory and reimbursement environment. The quantitative analysis is a two-step process as follows: · Step one, the Company compares the carrying amount of each of the reporting units to the fair value of each of the reporting units. If the carrying amount of each of its reporting units exceeds its fair value, the Company must perform the second step of the process. If not, no further testing is needed. · Step two, the Company allocates the fair value of each of the reporting units to all assets and liabilities as if each of the reporting units had been acquired in a business combination at the date of the impairment test. The Company would then compare the implied fair value of each of the reporting units’ goodwill to its carrying amount. If the carrying amount of the goodwill exceeds its implied fair value, it recognizes an impairment loss in an amount equal to that excess. Step one of the analysis indicated that the reporting unit fair value exceeded the book value and accordingly did not require the Company to perform the second step in the analysis. As a result, the Company determined that no impairment was necessary. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events | |
Subsequent Events | (14) Subsequent Events New Master Leases The Company recently announced it entered into a lease with a new landlord for 64 skilled nursing facilities previously leased from Welltower. On November 1, 2016, Welltower sold the real estate of the 64 facilities to Second Spring Healthcare Investments (Second Spring), a joint venture formed by affiliates of Lindsay Goldberg LLC, a private investment firm, and affiliates of Omega. The Company will continue to operate the facilities pursuant to its new lease with affiliates of Second Spring effective November 1, 2016 and there will be no change in the operations of these facilities. The 64 facilities had been included in the Company’s master lease with Welltower and were historically subject to 3.4% annual escalators, which were scheduled to decrease to 2.9% annual escalators effective April 1, 2017. Under the new lease with Second Spring, initial annual rent for the 64 properties is reduced approximately 5% to $103.9 million and annual escalators will decrease to 1.0% after year 1, 1.5% after year 2, and 2.0% thereafter. The more favorable lease terms are expected to reduce the Company’s cumulative rent obligations through January 2032 by $297 million. As part of the transaction, the Company issued a note totaling $51.2 million to Welltower, maturing in October 2020. Divestiture of Non-Strategic Facilities On October 18, 2016, the Company completed the divesture of nine underperforming leased assisted living facilities in the states of Pennsylvania, Delaware and West Virginia. The nine facilities had annual revenue of $22.5 million and $2.8 million of pre-tax net loss. On October 23, 2016, the Company entered into a purchase and sale agreement to sell 18 facilities (16 owned and 2 leased) in the states of Kansas, Missouri, Nebraska and Iowa. The transaction will mark an exit from the inpatient business in these states. Closing is subject to licensure and other regulatory approvals. The 18 facilities have annual revenue of $110.1 million, pre-tax net loss of $10.7 million and total assets of $80 million which approximates the outstanding indebtedness. Sale proceeds of approximately $80 million, net of transaction costs, will principally be used to repay the indebtedness. |
General Information (Policies)
General Information (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
General Information | |
Description of Business | Description of Business Genesis Healthcare, Inc. is a healthcare services company that through its subsidiaries (collectively, the Company) owns and operates skilled nursing facilities, assisted/senior living facilities and a rehabilitation therapy business. The Company has an administrative services company that provides a full complement of administrative and consultative services that allows its affiliated operators and third-party operators with whom the Company contracts to better focus on delivery of healthcare services. The Company provides inpatient services through 507 skilled nursing, assisted/senior living and behavioral health centers located in 34 states. Revenues of the Company’s owned, leased and otherwise consolidated centers constitute approximately 85% of its revenues. The Company provides a range of rehabilitation therapy services, including speech pathology, physical therapy, occupational therapy and respiratory therapy. These services are provided by rehabilitation therapists and assistants employed or contracted at substantially all of the centers operated by the Company, as well as by contract to healthcare facilities operated by others. After the elimination of intercompany revenues, the rehabilitation therapy services business constitutes approximately 12% of the Company’s revenues. The Company provides an array of other specialty medical services, including management services, physician services, staffing services, and other healthcare related services, which comprise the balance of the Company’s revenues. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). In the opinion of management, the consolidated financial statements include all necessary adjustments for a fair presentation of the financial position and results of operations for the periods presented. The consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation. The Company presents noncontrolling interests within the stockholders’ deficit section of its consolidated balance sheets. The Company presents the amount of net loss attributable to Genesis Healthcare, Inc. and net loss (income) attributable to noncontrolling interests in its consolidated statements of operations. The consolidated financial statements include the accounts of all entities controlled by the Company through its ownership of a majority voting interest and the accounts of any variable interest entities (VIEs) where the Company is subject to a majority of the risk of loss from the VIE's activities, or entitled to receive a majority of the entity's residual returns, or both. The Company assesses the requirements related to the consolidation of VIEs, including a qualitative assessment of power and economics that considers which entity has the power to direct the activities that “most significantly impact” the VIE's economic performance and has the obligation to absorb losses of, or the right to receive benefits that could be potentially significant to, the VIE. The Company's composition of variable interest entities was not material at September 30, 2016. The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q of Regulation S-X and do not include all of the disclosures normally required by U.S. GAAP or those normally required in annual reports on Form 10-K. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2015 filed with the U.S. Securities and Exchange Commission (the SEC) on Form 10-K on March 14, 2016. Certain prior year amounts have been reclassified to conform to current period presentation, the effect of which was not material. Upon adoption of new accounting guidance, debt issuance costs have been presented as a direct deduction from long-term debt rather than as an other long-term asset in all periods presented. The Company’s financial position at September 30, 2016 includes the impact of certain significant transactions and events, as disclosed within Note 3 – “ Significant Transactions and Events .” |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the FASB) issued ASU No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which changes the requirements for recognizing revenue when entities enter into contracts with customers. Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. It also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The adoption of ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2017 and early adoption is not permitted. The Company is still evaluating the effect, if any, ASU 2014-09 will have on the Company’s consolidated financial condition and results of operations. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern (ASU 2014-15), requiring management to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern and to provide disclosures in certain circumstances. ASU 2014-15 is effective for annual and interim periods ending after December 31, 2016. The Company is still evaluating the effect, if any, ASU 2014-15 will have on its consolidated financial condition and results of operations. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01), which is intended to improve the recognition and measurement of financial instruments. The new guidance is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted under certain circumstances. The Company is still evaluating the effect, if any, ASU 2016-01 will have on its consolidated financial condition and results of operations. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02), which amended authoritative guidance on accounting for leases. The new provisions require that a lessee of operating leases recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The lease liability will be equal to the present value of lease payments, with the right-of-use asset based upon the lease liability. The classification criteria for distinguishing between finance (or capital) leases and operating leases are substantially similar to the previous lease guidance, but with no explicit bright lines. As such, operating leases will result in straight-line rent expense similar to current practice. For short term leases (term of 12 months or less), a lessee is permitted to make an accounting election not to recognize lease assets and lease liabilities, which would generally result in lease expense being recognized on a straight-line basis over the lease term. The guidance is effective for annual and interim periods beginning after December 15, 2018, and will require application of the new guidance at the beginning of the earliest comparable period presented. Early adoption is permitted. ASU 2016-02 must be adopted using a modified retrospective transition. The adoption of ASU 2016-02 is expected to have a material impact on the Company’s financial position. The Company is still evaluating the impact on its results of operations and does not expect the adoption of this standard to have an impact on liquidity. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09), which is intended to improve the accounting for employee share-based payments and affect all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The new guidance is effective for annual and interim periods beginning after December 15, 2016, with early adoption permitted. The Company is still evaluating the effect, if any, ASU 2016-09 will have on its consolidated financial condition and results of operations. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15), which addresses how certain cash receipts and cash payments should be presented and classified in the statement of cash flows. The new guidance is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The Company is still evaluating the effect, if any, that ASU 2016-15 will have on its consolidated statements of cash flows. |
Certain Significant Risks and22
Certain Significant Risks and Uncertainties (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Certain Significant Risks and Uncertainties | |
Schedule of Revenue by Source | Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Medicare % % % % Medicaid % % % % Insurance % % % % Private and other % % % % Total % % % % |
Significant Transactions and 23
Significant Transactions and Events (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Significant Transactions and Events | |
Unaudited Pro Forma Net Effect of the Combination (in thousands, except per share amounts) | Pro forma nine months ended September 30, 2015 Revenues $ Loss attributable to Genesis Healthcare, Inc. Loss per common share: Basic $ Diluted $ |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings (Loss) Per Share | |
Reconciliation of the Numerator and Denominator Used in the Calculation of Net Income per Share (in thousands, except per share data) | Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Numerator: Loss from continuing operations $ $ $ $ Less: Net loss attributable to noncontrolling interests Loss from continuing operations attributable to Genesis Healthcare, Inc. $ $ $ $ (Loss) income from discontinued operations, net of taxes Net loss attributable to Genesis Healthcare, Inc. $ $ $ $ Denominator: Weighted average shares outstanding for basic and diluted net loss per share Basic and diluted net loss per common share: Loss from continuing operations attributable to Genesis Healthcare, Inc. $ $ $ $ (Loss) income from discontinued operations, net of taxes Net loss attributable to Genesis Healthcare, Inc. $ $ $ $ |
Schedule of Anti-dilutive Securities (in thousands) | Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Net loss Net loss Net loss Net loss attributable to attributable to attributable to attributable to Genesis Antidilutive Genesis Antidilutive Genesis Antidilutive Genesis Antidilutive Healthcare, Inc. shares Healthcare, Inc. shares Healthcare, Inc. shares Healthcare, Inc. shares Exchange of restricted stock units of noncontrolling interests $ $ $ $ Employee and director unvested restricted stock units — — — — — — |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Information | |
Summary of Segmented Revenues | Three months ended September 30, 2016 2015 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage (in thousands, except percentages) Revenues: Inpatient services: Skilled nursing facilities $ % $ % $ % Assisted/Senior living facilities % % % Administration of third party facilities % % % Elimination of administrative services — % — % % Inpatient services, net % % % Rehabilitation therapy services: Total therapy services % % % Elimination intersegment rehabilitation therapy services % % % Third party rehabilitation therapy services % % % Other services: Total other services % % % Elimination intersegment other services % % % Third party other services % % % Net revenues $ % $ % $ % Nine months ended September 30, 2016 2015 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage (in thousands, except percentages) Revenues: Inpatient services: Skilled nursing facilities $ % $ % $ % Assisted/Senior living facilities % % % Administration of third party facilities % % % Elimination of administrative services — % — % % Inpatient services, net % % % Rehabilitation therapy services: Total therapy services % % % Elimination intersegment rehabilitation therapy services % % % Third party rehabilitation therapy services % % % Other services: Total other services % % % Elimination intersegment other services % % % Third party other services % % % Net revenues $ % $ % $ % |
Summaries of Condensed Consolidated Statements of Operations, Total Assets and Goodwill | Three months ended September 30, 2016 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated (In thousands) Net revenues $ $ $ $ $ $ Salaries, wages and benefits — — Other operating expenses — General and administrative costs — — — — Provision for losses on accounts receivable — Lease expense — Depreciation and amortization expense — Interest expense — Loss on extinguishment of debt — — — — Investment income — — — — Other income — — — — Transaction costs — — — — Skilled Healthcare and other loss contingency expense — — — — — — Equity in net (income) loss of unconsolidated affiliates — — — (Loss) income before income tax benefit Income tax benefit — — — — (Loss) income from continuing operations $ $ $ $ $ $ Three months ended September 30, 2015 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated (In thousands) Net revenues $ $ $ $ $ $ Salaries, wages and benefits — — Other operating expenses — General and administrative costs — — — — Provision for losses on accounts receivable — Lease expense — Depreciation and amortization expense — Interest expense Gain on extinguishment of debt — — — — Investment (income) loss — — — Other loss — — — — Transaction costs — — — — Skilled Healthcare and other loss contingency expense — — — — Equity in net (income) loss of unconsolidated affiliates — — — (Loss) income before income tax benefit Income tax benefit — — — — (Loss) income from continuing operations $ $ $ $ $ $ Nine months ended September 30, 2016 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated (In thousands) Net revenues $ $ $ $ $ $ Salaries, wages and benefits — — Other operating expenses — General and administrative costs — — — — Provision for losses on accounts receivable — Lease expense — Depreciation and amortization expense — Interest expense — Loss on extinguishment of debt — — — — Investment income — — — — Other income — — — — Transaction costs — — — — Skilled Healthcare and other loss contingency expense — — — — Equity in net (income) loss of unconsolidated affiliates — — — (Loss) income before income tax benefit Income tax benefit — — — — (Loss) income from continuing operations $ $ $ $ $ $ Nine months ended September 30, 2015 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated (In thousands) Net revenues $ $ $ $ $ $ Salaries, wages and benefits — — Other operating expenses — General and administrative costs — — — — Provision for losses on accounts receivable — Lease expense — Depreciation and amortization expense — Interest expense Loss on extinguishment of debt — — — — Investment (income) loss — — — Other income — — — — Transaction costs — — — — Skilled Healthcare and other loss contingency expense — — — — Equity in net (income) loss of unconsolidated affiliates — — — (Loss) income before income tax benefit Income tax benefit — — — — (Loss) income from continuing operations $ $ $ $ $ $ The following table presents the segment assets as of September 30, 2016 compared to December 31, 2015 (in thousands): September 30, 2016 December 31, 2015 Inpatient services $ $ Rehabilitation services Other services Corporate and eliminations Total assets $ $ The following table presents segment goodwill as of September 30, 2016 compared to December 31, 2015 (in thousands): September 30, 2016 December 31, 2015 Inpatient services $ $ Rehabilitation services Other services Total goodwill $ $ |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment (in thousands) | September 30, 2016 December 31, 2015 Land, buildings and improvements $ $ Capital lease land, buildings and improvements Financing obligation land, buildings and improvements Equipment, furniture and fixtures Construction in progress Gross property and equipment Less: accumulated depreciation Net property and equipment $ $ |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Long-Term Debt Abstract | |
Schedule of Long-term Debt (in thousands) | September 30, December 31, 2016 2015 Revolving credit facilities, net of debt issuance costs of $10,205 at September 30, 2016 and $10,254 at December 31, 2015 $ $ Term loan facility, net of original issue discount of $7,475 and net of debt issuance costs of $10,129 at December 31, 2015 — New term loans, net of debt issuance costs of $3,696 at September 30, 2016 — Real estate bridge loans, net of debt issuance costs of $5,106 at September 30, 2016 and $9,567 at December 31, 2015 HUD insured loans, net of debt issuance costs of $6,288 at September 30, 2016 and $1,395 at December 31, 2015 Mortgages and other secured debt (recourse) Mortgages and other secured debt (non-recourse), net of debt issuance costs of $143 at September 30, 2016 and $176 at December 31, 2015 Less: Current installments of long-term debt Long-term debt $ $ |
Schedule of Borrowings and Interest Rates (dollars in thousands) | Weighted Average Revolving credit facility Borrowings Interest FILO tranche $ % Tranche A-1 % Tranche A-2 % $ % |
Schedule of Maturity of Total Debt (in thousands) | Twelve months ended September 30, 2017 $ 2018 2019 2020 2021 Thereafter Total debt maturity $ |
Leases and Lease Commitments (T
Leases and Lease Commitments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Leases and Lease Commitments | |
Schedule of Future Minimum Capital and Operating Lease Payments (in thousands) | Twelve months ended September 30, Capital Leases Operating Leases 2017 $ $ 2018 2019 2020 2021 Thereafter Total future minimum lease payments $ Less amount representing interest Capital lease obligation Less current portion Long-term capital lease obligation $ |
Financing Obligation (Tables)
Financing Obligation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Financing Obligation | |
Schedule of Future Minimum Financing Lease Payments (in thousands) | Twelve months ended September 30, 2017 $ 2018 2019 2020 2021 Thereafter Total future minimum lease payments Less amount representing interest Financing obligations $ Less current portion Long-term financing obligations $ |
Fair Value of Financial Instr30
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value of Financial Instruments | |
Schedule of Fair Value of Assets Measured on a Recurring Basis (in thousands) | Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable September 30, Identical Assets Observable Inputs Inputs Assets: 2016 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ $ $ — $ — Restricted cash and equivalents — — Restricted investments in marketable securities — — Total $ $ $ — $ — Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs Assets: 2015 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ $ $ — $ — Restricted cash and equivalents — — Restricted investments in marketable securities — — Total $ $ $ — $ — |
Schedule of Carrying Amounts and Estimated Fair Values of Long-term Debt Instruments | September 30, 2016 December 31, 2015 Carrying Value Fair Value Carrying Value Fair Value Revolving credit facilities $ $ $ $ Term loan facility — — New term loans — — Real estate bridge loans HUD insured loans Mortgages and other secured debt (recourse) Mortgages and other secured debt (non-recourse) $ $ $ $ |
Schedule of Hierarchy of Nonfinancial Assets Measured at Fair Value on a Nonrecurring Basis (in thousands) | Impairment Charges - Carrying Value Nine months ended September 30, 2016 September 30, 2016 Assets: Property and equipment, net $ $ — Goodwill — Intangible assets — Impairment Charges - Carrying Value Nine months ended December 31, 2015 September 30, 2015 Assets: Property and equipment, net $ $ — Goodwill — Intangible assets — |
General Information (Details)
General Information (Details) | 9 Months Ended |
Sep. 30, 2016statefacility | |
Inpatient Services | |
Facility Count | |
Number of skilled nursing, assisted/senior living and behavioral health centers through which inpatient services are provided | facility | 507 |
Number of states with facilities | state | 34 |
Inpatient Services | Revenue | Product Concentration Risk | |
Facility Count | |
Concentration risk (as a percent) | 85.00% |
Rehabilitation Therapy Services | Revenue | Product Concentration Risk | |
Facility Count | |
Concentration risk (as a percent) | 12.00% |
Certain Significant Risks and32
Certain Significant Risks and Uncertainties (Details) - Government contracts - Revenue - Inpatient Services | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Concentration Risk | ||||
Concentration risk (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% |
Medicare and Medicaid | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 79.00% | |||
Medicare | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 24.00% | 26.00% | 25.00% | 26.00% |
Medicaid | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 55.00% | 53.00% | 54.00% | 53.00% |
Insurance | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 11.00% | 11.00% | 11.00% | 11.00% |
Private and Other | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 10.00% | 10.00% | 10.00% | 10.00% |
Significant Transactions and 33
Significant Transactions and Events (Details) $ / shares in Units, $ in Thousands | Sep. 01, 2016USD ($)item | May 23, 2016facility | May 01, 2016USD ($) | Apr. 01, 2016facility | Jan. 01, 2016USD ($)facility | Dec. 01, 2015facilityitem | Mar. 31, 2016USD ($) | Sep. 30, 2016USD ($)facility | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)facility | Aug. 31, 2016USD ($)item | Sep. 30, 2015USD ($)$ / shares |
Pro Forma Information | ||||||||||||
Revenues | $ 4,249,791 | |||||||||||
Loss attributable to Genesis Healthcare, Inc. | $ (57,813) | |||||||||||
Net loss per share, Basic | $ / shares | $ (0.65) | |||||||||||
Net loss per share, Diluted | $ / shares | $ (0.66) | |||||||||||
Sale of facilities | ||||||||||||
Proceeds from Sale of Productive Assets | $ 149,398 | $ 1,263 | ||||||||||
Partial pay down on loans | 436,923 | 351,420 | ||||||||||
HUD Insured Loans | ||||||||||||
Proceeds from Issuance of Long-term Debt | $ 354,137 | $ 361,101 | ||||||||||
Acquisition from Revera | ||||||||||||
Number of facilities acquired | facility | 5 | 1 | ||||||||||
HUD insured loans | ||||||||||||
HUD Insured Loans | ||||||||||||
Number of facilities financed by HUD | facility | 3 | 21 | ||||||||||
Proceeds from Issuance of Long-term Debt | $ 14,200 | $ 143,200 | ||||||||||
Skilled Real Estate Bridge Loan | ||||||||||||
Sale of facilities | ||||||||||||
Partial pay down on loans | $ 54,200 | |||||||||||
Assisted Senior Living Facilities | Kansas | ||||||||||||
Sale of facilities | ||||||||||||
Number of facilities sold | facility | 18 | |||||||||||
Proceeds from Sale of Productive Assets | $ 67,000 | |||||||||||
Compassus | ||||||||||||
Sale of facilities | ||||||||||||
Aggregate ownership interest in counterparty indirectly held by certain board members, as a percent | 10.00% | |||||||||||
Compassus | Hospice And Home Health Operations | ||||||||||||
Sale of facilities | ||||||||||||
Proceeds from Sale of Productive Assets | $ 72,000 | |||||||||||
Sales price per agreement | $ 84,000 | |||||||||||
Short term note receivable | 12,000 | |||||||||||
Gain (Loss) on Disposition of Business | 44,000 | |||||||||||
Derecognition of goodwill and identifiable intangible assets | $ 30,800 | |||||||||||
The Combination | ||||||||||||
Pro Forma Information | ||||||||||||
Revenue of acquiree | $ 608,000 | |||||||||||
Net loss of acquiree | $ 17,900 | |||||||||||
Transaction costs in acquisition | $ 88,800 | $ 88,800 | ||||||||||
Revera Acquisition | ||||||||||||
Acquisition from Revera | ||||||||||||
Nursing facilities acquired | item | 5 | |||||||||||
Purchase Price | $ 39,400 | |||||||||||
Number of facilities acquired | facility | 15 | |||||||||||
Revera Acquisition | Skilled Real Estate Bridge Loan | ||||||||||||
Acquisition from Revera | ||||||||||||
Loan | $ 37,000 | |||||||||||
Revera Acquisition | State of Vermont | ||||||||||||
Acquisition from Revera | ||||||||||||
Nursing facilities acquired | item | 5 | |||||||||||
Number of facilities under lease | facility | 4 | |||||||||||
Additional nursing facilities | facility | 5 | |||||||||||
Number of facilities managed by Company while waiting for change of ownership approval | item | 5 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2016USD ($)class$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | |
Income Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Number of classes of common stock | class | 3 | |||
Numerator: | ||||
Loss from continuing operations | $ (52,355) | $ (60,981) | $ (159,364) | $ (212,557) |
Less: Net loss attributable to noncontrolling interests | (31,921) | (31,990) | (72,895) | (53,424) |
Loss from continuing operations attributable to Genesis Healthcare, Inc. | (20,434) | (28,991) | (86,469) | (159,133) |
(Loss) income from discontinued operations, net of taxes | (24) | 39 | (1) | (1,571) |
Net loss attributable to Genesis Healthcare, Inc | $ (20,458) | $ (28,952) | $ (86,470) | $ (160,704) |
Denominator: | ||||
Weighted-average shares outstanding for basic and diluted loss from continuing operations per share | shares | 90,226 | 89,213 | 89,617 | 84,615 |
Loss from continuing operations attributable to Genesis Healthcare, Inc. | $ / shares | $ (0.23) | $ (0.32) | $ (0.96) | $ (1.88) |
(Loss) income from discontinued operations, net of taxes | $ / shares | 0 | 0 | 0 | (0.02) |
Net loss attributable to Genesis Healthcare, Inc. | $ / shares | $ (0.23) | $ (0.32) | $ (0.96) | $ (1.90) |
Class C Common Stock | ||||
Income Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Voting ratio | 1 | |||
Number of classes of stock that share voting ratio | class | 2 | |||
Noncontrolling interests | Class C Common Stock | ||||
Income Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Convertible noncontrolling interest (as a percent) | 42.00% |
Earnings (Loss) Per Share - Ant
Earnings (Loss) Per Share - Antidilutive Securities (Details) - USD ($) $ in Thousands | Aug. 05, 2016 | Jun. 08, 2016 | Jun. 03, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Noncontrolling interests | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Number of units attributed to the noncontrolling interests outstanding | 64,249,380 | ||||||
Restricted Stock Units (RSUs) | Noncontrolling interests | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Net loss attributable to Genesis Healthcare, Inc. | $ (26,959) | $ (20,639) | $ (58,465) | $ (31,945) | |||
Antidilutive shares | 64,391,000 | 64,461,000 | 64,437,000 | 56,906,000 | |||
Class A Common Stock | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Incremental Class A stock attributable to conversion of noncontrolling interest | 11,187 | ||||||
Employee And Non-employee Director | Restricted Stock Units (RSUs) | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Antidilutive shares | 323,000 | 149,000 | |||||
Restricted Stock Units (RSUs) | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Shares vested | 984,849 | ||||||
Shares issued | 849,233 | ||||||
Restricted Stock Units (RSUs) | Non-employee Director | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Granted (in units) | 360,000 | ||||||
Restricted Stock Units (RSUs) | Employee | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Granted (in units) | 503,834 | 4,339,932 |
Segment Information - Segment R
Segment Information - Segment Reporting (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($) | |
Segment Reporting Information | ||||
Number of Reportable Segments | segment | 3 | |||
Net revenues | $ 1,418,994 | $ 1,416,027 | $ 4,329,570 | $ 4,178,503 |
Increase (Decrease) in Net Revenue From Prior Period | 2,967 | 151,067 | ||
Salaries, wages and benefits | 834,414 | 833,635 | 2,534,824 | 2,445,294 |
Other operating expenses | 350,828 | 332,919 | 1,062,086 | 993,719 |
General and administrative costs | 46,545 | 45,889 | 139,999 | 130,902 |
Provision for losses on accounts receivable | 25,602 | 23,346 | 81,776 | 68,855 |
Lease expense | 35,512 | 37,655 | 109,796 | 113,033 |
Depreciation and amortization expense | 61,104 | 62,505 | 190,822 | 176,043 |
Interest expense | 131,812 | 128,538 | 400,853 | 376,236 |
Loss (gain) on early extinguishment of debt | 15,363 | (3,104) | 15,830 | 130 |
Investment income | (934) | (353) | (2,073) | (1,200) |
Other (income) loss | (5,173) | 38 | (48,084) | (7,522) |
Transaction costs | 3,057 | 3,306 | 9,804 | 92,016 |
Skilled Healthcare and other loss contingency expense | 30,000 | 15,192 | 31,500 | |
Equity in net income of unconsolidated affiliates | (893) | (640) | (2,153) | (1,153) |
(Loss) income before income tax benefit | (78,243) | (77,707) | (179,102) | (239,350) |
Income tax benefit | (25,888) | (16,726) | (19,738) | (26,793) |
(Loss) income from continuing operations | $ (52,355) | $ (60,981) | $ (159,364) | $ (212,557) |
Product Concentration Risk | Sales Revenue, Net [Member] | ||||
Segment Reporting Information | ||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 0.20% | 3.60% | ||
Inpatient Services | ||||
Segment Reporting Information | ||||
Net revenues | $ 1,224,240 | $ 1,193,562 | $ 3,693,561 | $ 3,537,564 |
Increase (Decrease) in Net Revenue From Prior Period | $ 30,678 | $ 155,997 | ||
Inpatient Services | Product Concentration Risk | Sales Revenue, Net [Member] | ||||
Segment Reporting Information | ||||
Concentration Risk, Percentage | 86.30% | 84.30% | 85.20% | 84.60% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 2.60% | 4.40% | ||
Inpatient Services | Skilled Nursing Facilities | ||||
Segment Reporting Information | ||||
Net revenues | $ 1,192,498 | $ 1,155,123 | $ 3,595,258 | $ 3,424,788 |
Increase (Decrease) in Net Revenue From Prior Period | $ 37,375 | $ 170,470 | ||
Inpatient Services | Skilled Nursing Facilities | Product Concentration Risk | Sales Revenue, Net [Member] | ||||
Segment Reporting Information | ||||
Concentration Risk, Percentage | 84.00% | 81.50% | 82.90% | 81.90% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 3.20% | 5.00% | ||
Inpatient Services | Assisted Senior Living Facilities | ||||
Segment Reporting Information | ||||
Net revenues | $ 29,423 | $ 36,635 | $ 90,772 | $ 106,497 |
Increase (Decrease) in Net Revenue From Prior Period | $ (7,212) | $ (15,725) | ||
Inpatient Services | Assisted Senior Living Facilities | Product Concentration Risk | Sales Revenue, Net [Member] | ||||
Segment Reporting Information | ||||
Concentration Risk, Percentage | 2.10% | 2.60% | 2.10% | 2.50% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (19.70%) | (14.80%) | ||
Inpatient Services | Administration of third party facilities | ||||
Segment Reporting Information | ||||
Net revenues | $ 2,659 | $ 2,225 | $ 8,608 | $ 7,724 |
Increase (Decrease) in Net Revenue From Prior Period | $ 434 | $ 884 | ||
Inpatient Services | Administration of third party facilities | Product Concentration Risk | Sales Revenue, Net [Member] | ||||
Segment Reporting Information | ||||
Concentration Risk, Percentage | 0.20% | 0.20% | 0.20% | 0.20% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 19.50% | 11.40% | ||
Rehabilitation Therapy Services | ||||
Segment Reporting Information | ||||
Net revenues | $ 160,387 | $ 174,039 | $ 510,644 | $ 495,315 |
Increase (Decrease) in Net Revenue From Prior Period | $ (13,652) | $ 15,329 | ||
Rehabilitation Therapy Services | Product Concentration Risk | Sales Revenue, Net [Member] | ||||
Segment Reporting Information | ||||
Concentration Risk, Percentage | 11.30% | 12.30% | 11.90% | 11.90% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (7.80%) | 3.10% | ||
Rehabilitation Therapy Services | Therapy Services | ||||
Segment Reporting Information | ||||
Net revenues | $ 261,543 | $ 281,151 | $ 821,704 | $ 818,335 |
Increase (Decrease) in Net Revenue From Prior Period | $ (19,608) | $ 3,369 | ||
Rehabilitation Therapy Services | Therapy Services | Product Concentration Risk | Sales Revenue, Net [Member] | ||||
Segment Reporting Information | ||||
Concentration Risk, Percentage | 18.40% | 19.90% | 19.10% | 19.60% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (7.00%) | 0.40% | ||
Other Services | ||||
Segment Reporting Information | ||||
Net revenues | $ 34,367 | $ 48,426 | $ 125,365 | $ 145,624 |
Increase (Decrease) in Net Revenue From Prior Period | $ (14,059) | $ (20,259) | ||
Other Services | Product Concentration Risk | Sales Revenue, Net [Member] | ||||
Segment Reporting Information | ||||
Concentration Risk, Percentage | 2.40% | 3.40% | 2.90% | 3.50% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (29.00%) | (13.90%) | ||
Other Services | Other Services | ||||
Segment Reporting Information | ||||
Net revenues | $ 40,376 | $ 58,804 | $ 142,336 | $ 172,759 |
Increase (Decrease) in Net Revenue From Prior Period | $ (18,428) | $ (30,423) | ||
Other Services | Other Services | Product Concentration Risk | Sales Revenue, Net [Member] | ||||
Segment Reporting Information | ||||
Concentration Risk, Percentage | 2.80% | 4.10% | 3.30% | 4.10% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (31.30%) | (17.60%) | ||
Operating Segments | Inpatient Services | ||||
Segment Reporting Information | ||||
Net revenues | $ 1,224,580 | $ 1,193,983 | $ 3,694,638 | $ 3,539,009 |
Salaries, wages and benefits | 586,654 | 568,888 | 1,748,232 | 1,674,262 |
Other operating expenses | 428,820 | 413,055 | 1,296,069 | 1,240,551 |
Provision for losses on accounts receivable | 21,088 | 18,514 | 68,757 | 54,858 |
Lease expense | 34,745 | 36,577 | 107,047 | 109,843 |
Depreciation and amortization expense | 53,313 | 53,384 | 167,208 | 152,641 |
Interest expense | 109,339 | 106,433 | 328,385 | 315,902 |
(Loss) income before income tax benefit | (9,379) | (2,868) | (21,060) | (9,048) |
(Loss) income from continuing operations | (9,379) | (2,868) | (21,060) | (9,048) |
Operating Segments | Rehabilitation Therapy Services | ||||
Segment Reporting Information | ||||
Net revenues | 261,543 | 281,151 | 821,704 | 818,335 |
Salaries, wages and benefits | 219,864 | 229,021 | 689,833 | 664,600 |
Other operating expenses | 18,903 | 19,513 | 58,927 | 54,507 |
Provision for losses on accounts receivable | 4,722 | 5,120 | 12,165 | 13,053 |
Lease expense | 24 | 28 | 71 | 83 |
Depreciation and amortization expense | 2,943 | 3,904 | 9,137 | 9,803 |
Interest expense | 14 | 14 | 43 | 16 |
(Loss) income before income tax benefit | 15,073 | 23,551 | 51,528 | 76,273 |
(Loss) income from continuing operations | 15,073 | 23,551 | 51,528 | 76,273 |
Operating Segments | Other Services | ||||
Segment Reporting Information | ||||
Net revenues | 40,226 | 58,501 | 141,970 | 171,175 |
Salaries, wages and benefits | 27,896 | 35,726 | 96,759 | 106,432 |
Other operating expenses | 10,610 | 18,261 | 36,198 | 50,260 |
Provision for losses on accounts receivable | (161) | 341 | 993 | 1,659 |
Lease expense | 269 | 589 | 1,209 | 1,795 |
Depreciation and amortization expense | 163 | 349 | 805 | 909 |
Interest expense | 10 | 11 | 30 | 31 |
(Loss) income before income tax benefit | 1,439 | 3,224 | 5,976 | 10,089 |
(Loss) income from continuing operations | 1,439 | 3,224 | 5,976 | 10,089 |
Corporate, Non-Segment | ||||
Segment Reporting Information | ||||
Net revenues | 150 | 303 | 366 | 1,584 |
General and administrative costs | 46,545 | 45,889 | 139,999 | 130,902 |
Provision for losses on accounts receivable | (47) | (629) | (139) | (715) |
Lease expense | 474 | 461 | 1,469 | 1,312 |
Depreciation and amortization expense | 4,685 | 4,868 | 13,672 | 12,690 |
Interest expense | 22,449 | 22,123 | 72,395 | 60,577 |
Loss (gain) on early extinguishment of debt | 15,363 | (3,104) | 15,830 | 130 |
Investment income | (934) | (396) | (2,073) | (1,490) |
Other (income) loss | (5,173) | 38 | (48,084) | (7,522) |
Transaction costs | 3,057 | 3,306 | 9,804 | 92,016 |
Skilled Healthcare and other loss contingency expense | 30,000 | 15,192 | 31,500 | |
Equity in net income of unconsolidated affiliates | (1,608) | (1,071) | (3,894) | (2,528) |
(Loss) income before income tax benefit | (84,661) | (101,182) | (213,805) | (315,288) |
Income tax benefit | (25,888) | (16,726) | (19,738) | (26,793) |
(Loss) income from continuing operations | (58,773) | (84,456) | (194,067) | (288,495) |
Elimination | ||||
Segment Reporting Information | ||||
Net revenues | (107,505) | (117,911) | (329,108) | (351,600) |
Other operating expenses | (107,505) | (117,910) | (329,108) | (351,599) |
Interest expense | (43) | (290) | ||
Investment income | 43 | 290 | ||
Equity in net income of unconsolidated affiliates | 715 | 431 | 1,741 | 1,375 |
(Loss) income before income tax benefit | (715) | (432) | (1,741) | (1,376) |
(Loss) income from continuing operations | (715) | (432) | (1,741) | (1,376) |
Elimination | Inpatient Services | ||||
Segment Reporting Information | ||||
Net revenues | (340) | (421) | (1,077) | (1,445) |
Increase (Decrease) in Net Revenue From Prior Period | $ 81 | $ 368 | ||
Elimination | Inpatient Services | Product Concentration Risk | Sales Revenue, Net [Member] | ||||
Segment Reporting Information | ||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (19.20%) | (25.50%) | ||
Elimination | Rehabilitation Therapy Services | ||||
Segment Reporting Information | ||||
Net revenues | $ (101,156) | $ (107,112) | $ (311,060) | $ (323,020) |
Increase (Decrease) in Net Revenue From Prior Period | $ 5,956 | $ 11,960 | ||
Elimination | Rehabilitation Therapy Services | Product Concentration Risk | Sales Revenue, Net [Member] | ||||
Segment Reporting Information | ||||
Concentration Risk, Percentage | (7.10%) | (7.60%) | (7.20%) | (7.70%) |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (5.60%) | (3.70%) | ||
Elimination | Other Services | ||||
Segment Reporting Information | ||||
Net revenues | $ (6,009) | $ (10,378) | $ (16,971) | $ (27,135) |
Increase (Decrease) in Net Revenue From Prior Period | $ 4,369 | $ 10,164 | ||
Elimination | Other Services | Product Concentration Risk | Sales Revenue, Net [Member] | ||||
Segment Reporting Information | ||||
Concentration Risk, Percentage | (0.40%) | (0.70%) | (0.40%) | (0.60%) |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (42.10%) | (37.50%) |
Segment Information - Assets by
Segment Information - Assets by Segment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | $ 5,886,587 | $ 6,059,949 |
Goodwill included in total assets | 444,113 | 470,019 |
Hospice And Home Health Operations | ||
Segment Reporting, Asset Reconciling Item | ||
Derecognized goodwill | 27,400 | |
Corporate and Eliminations | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 57,190 | 87,687 |
Inpatient Services | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 5,306,047 | 5,437,518 |
Goodwill included in total assets | 358,471 | 357,649 |
Rehabilitation Therapy Services | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 456,032 | 442,969 |
Goodwill included in total assets | 73,814 | 73,098 |
Other Services | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 67,318 | 91,775 |
Goodwill included in total assets | $ 11,828 | $ 39,272 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Land and land improvements | $ 748,119 | $ 714,766 |
Capital lease land, buildings and improvements | 842,899 | 903,977 |
Financing obligation land, buildings and improvements | 2,643,997 | 2,644,307 |
Equipment, furniture and fixtures | 450,689 | 436,300 |
Construction in progress | 40,330 | 24,665 |
Gross property and equipment | 4,726,034 | 4,724,015 |
Less accumulated depreciation | (781,414) | (638,768) |
Net property and equipment | $ 3,944,620 | $ 4,085,247 |
Long-Term Debt - (Details)
Long-Term Debt - (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Real Estate Bridge Loans | ||
Total long-term debt | $ 1,186,214 | $ 1,198,636 |
Current installments of long-term debt | (30,758) | (12,477) |
Long-term debt | 1,155,456 | 1,186,159 |
Term loans | ||
Real Estate Bridge Loans | ||
Total long-term debt | 210,842 | |
Original issue discount | 7,475 | |
Amortization of debt issuance costs | 10,129 | |
Real estate bridge loans | ||
Real Estate Bridge Loans | ||
Total long-term debt | 380,587 | 484,533 |
Amortization of debt issuance costs | 5,106 | 9,567 |
HUD insured loans | ||
Real Estate Bridge Loans | ||
Total long-term debt | 242,474 | 106,250 |
Amortization of debt issuance costs | 6,288 | 1,395 |
Mortgages and other secured debt (recourse) | ||
Real Estate Bridge Loans | ||
Total long-term debt | 13,412 | 13,934 |
Mortgages and other secured debt (non-recourse) | ||
Real Estate Bridge Loans | ||
Total long-term debt | 29,466 | 30,331 |
Amortization of debt issuance costs | 143 | 176 |
New Term Loans | ||
Real Estate Bridge Loans | ||
Total long-term debt | 116,480 | |
Long-term debt | 116,480 | |
Amortization of debt issuance costs | 3,696 | |
Revolving Credit Facilities | ||
Real Estate Bridge Loans | ||
Total long-term debt | 403,795 | 352,746 |
Amortization of debt issuance costs | $ 10,205 | $ 10,254 |
Long-Term Debt - Revolving Cred
Long-Term Debt - Revolving Credit Facilities (Details) $ in Thousands | Jul. 29, 2016 | Mar. 31, 2017 | Sep. 30, 2016USD ($)item | Dec. 31, 2020 |
Real Estate Bridge Loans | ||||
Revolving credit facility | $ 414,000 | |||
Total borrowing base capacity | $ 533,300 | |||
Weighted Average Interest Rate | 5.01% | |||
Tranche A-1 | ||||
Real Estate Bridge Loans | ||||
Revolving credit facility | $ 339,000 | |||
Weighted Average Interest Rate | 5.04% | |||
Tranche A-1 | LIBOR | Minimum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 3.25% | |||
Tranche A-1 | LIBOR | Maximum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 2.75% | |||
Tranche A-2 | ||||
Real Estate Bridge Loans | ||||
Revolving credit facility | $ 50,000 | |||
Weighted Average Interest Rate | 4.02% | |||
Tranche A-2 | LIBOR | Minimum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 3.00% | |||
Tranche A-2 | LIBOR | Maximum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 2.50% | |||
FILO Tranche | ||||
Real Estate Bridge Loans | ||||
Revolving credit facility | $ 25,000 | |||
Weighted Average Interest Rate | 6.65% | |||
FILO Tranche | LIBOR | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 5.00% | |||
Revolving Credit Facilities | ||||
Real Estate Bridge Loans | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 550,000 | |||
Debt Instrument Number of Tranches | item | 3 | |||
Debt instrument maturity period if not refinanced | 90 days | |||
Revolving credit facility | $ 414,000 | |||
Outstanding Letters of Credit | 67,000 | |||
Available borrowing capacity under the revolving credit facilities | $ 52,300 | |||
Revolving Credit Facilities | Minimum | ||||
Real Estate Bridge Loans | ||||
Commitment fee rate (as percentage) | 0.375% | |||
Revolving Credit Facilities | Maximum | ||||
Real Estate Bridge Loans | ||||
Commitment fee rate (as percentage) | 0.50% | |||
Revolving Credit Facilities | Federal Funds | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 3.00% | |||
Revolving Credit Facilities | Tranche A-1 | Base Rate | Minimum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 1.75% | |||
Revolving Credit Facilities | Tranche A-1 | Base Rate | Maximum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 2.25% | |||
Revolving Credit Facilities | Tranche A-1 | LIBOR | Minimum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 2.75% | |||
Revolving Credit Facilities | Tranche A-1 | LIBOR | Maximum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 3.25% | |||
Revolving Credit Facilities | Tranche A-2 | Base Rate | Minimum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 1.50% | |||
Revolving Credit Facilities | Tranche A-2 | Base Rate | Maximum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 2.00% | |||
Revolving Credit Facilities | Tranche A-2 | LIBOR | Minimum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 2.50% | |||
Revolving Credit Facilities | Tranche A-2 | LIBOR | Maximum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 3.00% | |||
Revolving Credit Facilities | FILO Tranche | Base Rate | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 4.00% | |||
Revolving Credit Facilities | FILO Tranche | LIBOR | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 5.00% | |||
Revolving Credit Facility Amendment | Forecast | Minimum | ||||
Real Estate Bridge Loans | ||||
Leverage ratio | 4.00% | |||
Revolving Credit Facility Amendment | Forecast | Maximum | ||||
Real Estate Bridge Loans | ||||
Leverage ratio | 6.00% | |||
Revolving Credit Facility Amendment | Federal Funds | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 3.00% | |||
Revolving Credit Facility Amendment | Tranche A-1 | Base Rate | Minimum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 2.00% | |||
Revolving Credit Facility Amendment | Tranche A-1 | Base Rate | Maximum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 2.50% | |||
Revolving Credit Facility Amendment | Tranche A-1 | LIBOR | Minimum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 3.00% | |||
Revolving Credit Facility Amendment | Tranche A-1 | LIBOR | Maximum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 3.50% | |||
Revolving Credit Facility Amendment | Tranche A-2 | Base Rate | Minimum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 2.00% | |||
Revolving Credit Facility Amendment | Tranche A-2 | Base Rate | Maximum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 2.50% | |||
Revolving Credit Facility Amendment | Tranche A-2 | LIBOR | Minimum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 3.00% | |||
Revolving Credit Facility Amendment | Tranche A-2 | LIBOR | Maximum | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 3.50% | |||
Revolving Credit Facility Amendment | FILO Tranche | Base Rate | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 5.00% | |||
Revolving Credit Facility Amendment | FILO Tranche | LIBOR | ||||
Real Estate Bridge Loans | ||||
Basis spread on variable rate | 6.00% |
Long-Term Debt - Term Loan Faci
Long-Term Debt - Term Loan Facility and New Term Loan Agreement (Details) $ in Millions | Nov. 01, 2016facility | Jul. 29, 2016USD ($)loanitem | Mar. 31, 2017 | Sep. 30, 2016USD ($) | Dec. 31, 2020 |
Term Loan Facility and New Term Loan Agreement | |||||
Term of debt | 2 years | ||||
Term Loan Facility | Term loans | |||||
Term Loan Facility and New Term Loan Agreement | |||||
Term of debt | 5 years | ||||
Period prior to Skilled Real Estate Bridge Loan maturity the Term Loan Facility could mature | 90 days | ||||
Amount of outstanding balance under Term Loan Facility paid | $ 153.4 | ||||
Early termination fee | $ 3.1 | ||||
Term Loan Facility | Base Rate | Term loans | |||||
Term Loan Facility and New Term Loan Agreement | |||||
Debt Instrument Variable Interest Rate Floor | 2.50% | ||||
Floor rate (as a percent) | 2.50% | ||||
Term Loan Facility | LIBOR | Term loans | |||||
Term Loan Facility and New Term Loan Agreement | |||||
Basis spread on variable rate | 1.00% | ||||
Debt Instrument Variable Interest Rate Floor | 1.50% | ||||
Floor rate (as a percent) | 1.50% | ||||
Term Loan Facility | Federal Funds | Term loans | |||||
Term Loan Facility and New Term Loan Agreement | |||||
Basis spread on variable rate | 0.50% | ||||
New Term Loan Facility | Term loans | |||||
Term Loan Facility and New Term Loan Agreement | |||||
Outstanding principal balance under term loan facility | $ 120.2 | ||||
Number of maintenance covenants | item | 4 | ||||
New Term Loan Facility | Minimum | Forecast | Term loans | |||||
Term Loan Facility and New Term Loan Agreement | |||||
Leverage ratio | 4.00% | ||||
New Term Loan Facility | Maximum | Forecast | Term loans | |||||
Term Loan Facility and New Term Loan Agreement | |||||
Leverage ratio | 6.00% | ||||
Affiliate Of Welltower Inc And Affiliate Of Omega Healthcare Investors Inc | New Term Loan Facility | Term loans | |||||
Term Loan Facility and New Term Loan Agreement | |||||
Term of debt | 4 years | ||||
Aggregate principal amount | $ 120 | ||||
Debt Instrument Annual Amortization Rate In Years One, Two and Three As Percent | 2.50% | ||||
Annual amortization in years four, percent | 5.00% | ||||
Affiliate Of Welltower Inc And Affiliate Of Omega Healthcare Investors Inc | New Term Loan Facility | Maximum | Term loans | |||||
Term Loan Facility and New Term Loan Agreement | |||||
Interest paid in cash or paid-in-kind (as a percent) | 2.00% | ||||
Affiliate Of Welltower Inc And Affiliate Of Omega Healthcare Investors Inc | New Term Loan Facility | Base Rate | Term loans | |||||
Term Loan Facility and New Term Loan Agreement | |||||
Basis spread on variable rate | 13.00% | ||||
Debt Instrument Variable Interest Rate Floor | 1.00% | ||||
Floor rate (as a percent) | 1.00% | ||||
Affiliate Of Welltower Inc And Affiliate Of Omega Healthcare Investors Inc | New Term Loan Facility | Available Bit Rate | Term loans | |||||
Term Loan Facility and New Term Loan Agreement | |||||
Basis spread on variable rate | 12.00% | ||||
Debt Instrument Variable Interest Rate Floor | 2.00% | ||||
Floor rate (as a percent) | 2.00% | ||||
Welltower Inc | |||||
Term Loan Facility and New Term Loan Agreement | |||||
Number of bridge loans funded | loan | 2 | ||||
Welltower Inc | Subsequent Event | |||||
Term Loan Facility and New Term Loan Agreement | |||||
Number of facilities sold by related party | facility | 64 |
Long-Term Debt - Real Estate Br
Long-Term Debt - Real Estate Bridge Loans (Details) $ in Millions | Sep. 01, 2016USD ($)item | May 23, 2016USD ($)facility | Apr. 01, 2016USD ($)facility | Dec. 01, 2015USD ($)facility | Feb. 02, 2015USD ($)facilityitem | Sep. 30, 2016USD ($)facilityitem | May 31, 2016 | Sep. 30, 2016USD ($) | Aug. 31, 2016USD ($) |
Real Estate Bridge Loans | |||||||||
Term of debt | 2 years | ||||||||
Number of facilities acquired | facility | 5 | 1 | |||||||
Skilled Real Estate Bridge Loan | Real estate bridge loans | |||||||||
Real Estate Bridge Loans | |||||||||
Aggregate principal amount | $ 360 | ||||||||
Number of facilities pledged | facility | 67 | ||||||||
Term of debt | 24 months | ||||||||
Effective interest rate | 12.78% | 12.78% | |||||||
Principal balance outstanding | $ 160.7 | $ 160.7 | |||||||
Skilled Real Estate Bridge Loan | LIBOR | Real estate bridge loans | |||||||||
Real Estate Bridge Loans | |||||||||
Basis spread on variable rate | 6.75% | ||||||||
Debt Instrument Variable Interest Rate Floor | 0.50% | ||||||||
Floor rate (as a percent) | 0.50% | ||||||||
Skilled Real Estate Bridge Loan | LIBOR | Maximum | Real estate bridge loans | |||||||||
Real Estate Bridge Loans | |||||||||
Debt instrument additional margin based on days outstanding | 7.50% | ||||||||
Revera Real Estate Bridge Loan | Real estate bridge loans | |||||||||
Real Estate Bridge Loans | |||||||||
Term of debt | 24 months | ||||||||
Debt Instrument Threshold for Ratio | 75.00% | ||||||||
Debt Instrument Additive to Threshold for Ratio | 5.00% | ||||||||
Effective interest rate | 9.53% | 9.53% | |||||||
Principal balance outstanding | $ 171.1 | $ 171.1 | |||||||
Revera Real Estate Bridge Loan | LIBOR | Real estate bridge loans | |||||||||
Real Estate Bridge Loans | |||||||||
Debt instrument additional margin based on ratio | 0.25% | ||||||||
Basis spread on variable rate | 6.75% | ||||||||
Debt Instrument Variable Interest Rate Floor | 0.50% | ||||||||
Floor rate (as a percent) | 0.50% | ||||||||
Revera Real Estate Bridge Loan | LIBOR | Maximum | Real estate bridge loans | |||||||||
Real Estate Bridge Loans | |||||||||
Debt instrument additional margin based on days outstanding | 7.00% | ||||||||
Other Real Estate Bridge Loans | Real estate bridge loans | |||||||||
Real Estate Bridge Loans | |||||||||
Aggregate principal amount | $ 44 | $ 9.9 | |||||||
Term of debt | 3 years | ||||||||
Basis spread on variable rate | 4.00% | ||||||||
Effective interest rate | 4.53% | 4.53% | |||||||
Principal balance outstanding | $ 53.9 | $ 53.9 | |||||||
Revera Acquisition | |||||||||
Real Estate Bridge Loans | |||||||||
Nursing facilities acquired | item | 5 | ||||||||
Number of facilities acquired | facility | 15 | ||||||||
Revera Acquisition | Skilled Real Estate Bridge Loan | |||||||||
Real Estate Bridge Loans | |||||||||
Loan | $ 37 | ||||||||
Revera Acquisition | Revera Real Estate Bridge Loan | |||||||||
Real Estate Bridge Loans | |||||||||
Loan | $ 37 | ||||||||
Revera Acquisition | Revera Real Estate Bridge Loan | Real estate bridge loans | |||||||||
Real Estate Bridge Loans | |||||||||
Aggregate principal amount | $ 134.1 | ||||||||
Number of facilities pledged | facility | 15 | ||||||||
Number of facilities acquired | facility | 20 | ||||||||
Extension option one | Skilled Real Estate Bridge Loan | Real estate bridge loans | |||||||||
Real Estate Bridge Loans | |||||||||
Debt instrument number of term extensions | item | 2 | ||||||||
Debt instrument term extension period (in days) | 90 days | ||||||||
Extension option one | Revera Real Estate Bridge Loan | Real estate bridge loans | |||||||||
Real Estate Bridge Loans | |||||||||
Debt instrument number of term extensions | item | 2 | ||||||||
Debt instrument term extension period (in days) | 90 days | ||||||||
Extension Option Two [Member] | Skilled Real Estate Bridge Loan | Real estate bridge loans | |||||||||
Real Estate Bridge Loans | |||||||||
Debt instrument number of term extensions | item | 1 | ||||||||
Debt instrument term extension period (in days) | 180 days |
Long-Term Debt - HUD Insured Lo
Long-Term Debt - HUD Insured Loans (Details) $ in Millions | Feb. 02, 2015 | Sep. 30, 2016USD ($)loanfacility |
Real Estate Bridge Loans | ||
Term of debt | 2 years | |
Weighted Average Interest Rate | 5.01% | |
HUD insured loans | ||
Real Estate Bridge Loans | ||
Number of debt instruments insured by HUD | loan | 32 | |
Number of facilities pledged | facility | 10 | |
Principal balance outstanding | $ 248.8 | |
Debt premium | $ 14.2 | |
Debt instrument average remaining term (in years) | 32 years | |
Weighted Average Interest Rate | 3.70% | |
Debt instrument period in which prepayment is not allowed (in months) | 12 months | |
Prepayment penalty (as a percentage) | 10.00% | |
Decrease in prepayment penalty (as a percentage) | 1.00% | |
HUD insured loans | Minimum | ||
Real Estate Bridge Loans | ||
Term of debt | 30 years | |
Fixed interest rate | 3.10% | |
HUD insured loans | Maximum | ||
Real Estate Bridge Loans | ||
Term of debt | 35 years | |
Fixed interest rate | 4.60% | |
Prepaid Expenses and Other Current Assets [Member] | HUD insured loans | ||
Real Estate Bridge Loans | ||
Escrow reserve funds | $ 16.3 |
Long-Term Debt - Other (Details
Long-Term Debt - Other (Details) | Sep. 30, 2016 |
Real Estate Bridge Loans | |
Weighted Average Interest Rate | 5.01% |
Mortgages and other secured debt (non-recourse) | |
Real Estate Bridge Loans | |
Weighted Average Interest Rate | 4.20% |
Minimum | Mortgages and other secured debt (recourse) | |
Real Estate Bridge Loans | |
Effective interest rate | 2.30% |
Minimum | Mortgages and other secured debt (non-recourse) | |
Real Estate Bridge Loans | |
Effective interest rate | 2.50% |
Maximum | Mortgages and other secured debt (recourse) | |
Real Estate Bridge Loans | |
Effective interest rate | 6.00% |
Maximum | Mortgages and other secured debt (non-recourse) | |
Real Estate Bridge Loans | |
Effective interest rate | 22.20% |
Long-Term Debt - Debt Covenants
Long-Term Debt - Debt Covenants (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Long-Term Debt Abstract | ||
Debt obligations due in two years | $ 386,200 | |
Debt Instrument, Term | 2 years | |
Twelve months ended March 31, | ||
2,017 | $ 30,758 | |
2,018 | 355,429 | |
2,019 | 58,144 | |
2,020 | 502,599 | |
2,021 | 5,778 | |
Thereafter | 233,506 | |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
Total long-term debt | $ 1,186,214 | $ 1,198,636 |
Lease and Lease Commitments - F
Lease and Lease Commitments - Future Minimum Capital and Operating Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Capital Leases, Future Minimum Payments Due, Rolling Maturity | ||
2,017 | $ 93,236 | |
2,018 | 90,466 | |
2,019 | 92,445 | |
2,020 | 94,742 | |
2,021 | 96,895 | |
Thereafter | 3,213,393 | |
Total future minimum lease payments | 3,681,177 | |
Less amount representing interest | (2,665,714) | |
Capital lease obligation | 1,015,463 | |
Less current portion | (1,852) | $ (1,842) |
Capital lease obligations | 1,013,611 | $ 1,053,816 |
Operating Leases, Future Minimum Payments Due, Rolling Maturity | ||
2,017 | 137,412 | |
2,018 | 136,294 | |
2,019 | 133,335 | |
2,020 | 133,523 | |
2,021 | 128,347 | |
Thereafter | 323,583 | |
Total future minimum lease payments | $ 992,494 |
Lease and Lease Commitments - C
Lease and Lease Commitments - Capital Lease Rates and Deferred Balances (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2016USD ($)leasefacility | Dec. 31, 2015USD ($) | |
Number Of Leases Containing Unmet Financial Covenants | lease | 4 | |
Number of facilities under leases with unmet financial covenants | facility | 30 | |
Identifiable Intangible Assets [Member] | ||
Net favorable leases | $ 48.4 | $ 54.7 |
Other Noncurrent Liabilities [Member] | ||
Net unfavorable leases | 30.3 | 35.5 |
Deferred straight-line rent balances included in other long-term liabilities | $ 30.5 | $ 27.3 |
Maximum | ||
Capital lease imputed interest rate (as a percent) | 12.80% | |
Minimum | ||
Capital lease imputed interest rate (as a percent) | 3.50% |
Financing Obligation (Details)
Financing Obligation (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Present Value of Future Minimum Lease Payments, Sale Leaseback Transactions, Rolling Maturity | ||
2,017 | $ 280,656 | |
2,018 | 288,684 | |
2,019 | 296,946 | |
2,020 | 305,444 | |
2,021 | 314,173 | |
Thereafter | 9,644,782 | |
Total future minimum lease payments | 11,130,685 | |
Less amount representing interest | (8,024,582) | |
Financing obligation | 3,106,103 | |
Less current portion | (1,566) | $ (989) |
Long-term financing obligation | $ 3,104,537 | $ 3,064,077 |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)item | Sep. 30, 2015USD ($) | |
Income tax benefit | $ 25,888 | $ 16,726 | $ 19,738 | $ 26,793 |
Effective tax rate | 33.10% | 21.50% | 11.00% | 11.20% |
Release of FIN48 reserve | $ 28,200 | |||
Number of exchanges of membership interests for common stock or cash | item | 200,034 | 200,034 | ||
Net operating loss carryforwards | $ 0 | $ 0 | ||
The Combination | ||||
Percentage of voting interests acquired | 58.00% | 58.00% | ||
Tax receivable agreement, potential payment as percentage of cash savings | 90.00% |
Commitments and Contingencies -
Commitments and Contingencies - Self Insurance Risks (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Workers' compensation approximate discount rate (as a percentage) | 1.00% | ||||
Workers' Compensation discount rate (as a percentage) | 0.96% | ||||
Potential effect of discounting on Workers Compensation reserve | $ 8.4 | $ 8.4 | $ 8.6 | ||
Provision for general and professional liability | 34.1 | $ 28.6 | 104.3 | $ 100.2 | |
Reserve for general and professional liability | 391.2 | 391.2 | 371.6 | ||
Provision for workers' compensation | 20.2 | $ 18.8 | 42.2 | $ 50.6 | |
Reserve for workers' compensation risks | $ 219.7 | $ 219.7 | $ 223.7 |
Commitments and Contingencies51
Commitments and Contingencies - Litigation (Details) $ in Millions | Aug. 06, 2014plaintiff | Jul. 31, 2016item | Sep. 30, 2016USD ($) | Sep. 30, 2016item |
Creekside Hospice Investigation | ||||
Loss Contingencies | ||||
Number of Qui Tam proceedings | plaintiff | 2 | |||
Creekside Hospice Therapy Matters Investigation Staffing Matters Investigation And Sundance Part B Therapy Matter (Member) | ||||
Loss Contingencies | ||||
Number of matters under agreement in principle | item | 4 | |||
Litigation settlement amount | $ | $ 52.7 | |||
Loss contingency | $ | $ 13.6 | |||
Loss contingency settlement terms | 5 years | |||
SunDance Part B Therapy Matter | ||||
Loss Contingencies | ||||
Number of subsidiary agencies outside of Georgia that are part of the Qui Tam proceeding | item | 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Assets, Fair Value Disclosure [Abstract] | |||||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 | $ 0 | |
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Revolving credit facility | 414,000 | 414,000 | |||
Carrying value | 1,186,214 | 1,186,214 | $ 1,198,636 | ||
Term Loan Facility | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Carrying value | 210,842 | ||||
New Term Loans | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Carrying value | 116,480 | 116,480 | |||
Skilled Real Estate Bridge Loan | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Carrying value | 380,587 | 380,587 | 484,533 | ||
HUD insured loans | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Carrying value | 242,474 | 242,474 | 106,250 | ||
Mortgages and other secured debt (recourse) | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Carrying value | 13,412 | 13,412 | 13,934 | ||
Mortgages and other secured debt (non-recourse) | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Carrying value | 29,466 | 29,466 | 30,331 | ||
Revolving Credit Facilities | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Revolving credit facility | 414,000 | 414,000 | |||
Carrying value | 403,795 | 403,795 | 352,746 | ||
Level 2 | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Fair Value | 1,183,378 | 1,183,378 | 1,198,065 | ||
Level 2 | Term Loan Facility | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Fair Value | 210,271 | ||||
Level 2 | New Term Loans | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Fair Value | 116,480 | 116,480 | |||
Level 2 | Skilled Real Estate Bridge Loan | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Fair Value | 380,587 | 380,587 | 484,533 | ||
Level 2 | HUD insured loans | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Fair Value | 239,638 | 239,638 | 106,250 | ||
Level 2 | Mortgages and other secured debt (recourse) | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Fair Value | 13,412 | 13,412 | 13,934 | ||
Level 2 | Mortgages and other secured debt (non-recourse) | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Fair Value | 29,466 | 29,466 | 30,331 | ||
Level 2 | Revolving Credit Facilities | |||||
Financial Liabilities Fair Value Disclosure [Abstract] | |||||
Fair Value | 403,795 | 403,795 | 352,746 | ||
Fair Value, Measurements, Recurring | |||||
Assets, Fair Value Disclosure [Abstract] | |||||
Cash and equivalents | 53,840 | 53,840 | 61,543 | ||
Restricted cash and equivalents | 12,714 | 12,714 | 34,370 | ||
Restricted investments in marketable securities | 151,291 | 151,291 | 163,757 | ||
Assets, Fair Value Disclosure, Total | 217,845 | 217,845 | 259,670 | ||
Fair Value, Measurements, Recurring | Level 1 | |||||
Assets, Fair Value Disclosure [Abstract] | |||||
Cash and equivalents | 53,840 | 53,840 | 61,543 | ||
Restricted cash and equivalents | 12,714 | 12,714 | 34,370 | ||
Restricted investments in marketable securities | 151,291 | 151,291 | 163,757 | ||
Assets, Fair Value Disclosure, Total | 217,845 | 217,845 | 259,670 | ||
Fair Value, Measurements, Nonrecurring [Member] | Level 3 | |||||
Assets, Fair Value Disclosure [Abstract] | |||||
Property and equipment, net | 3,944,620 | 3,944,620 | 4,085,247 | ||
Goodwill | 444,113 | 444,113 | 470,019 | ||
Intangible assets | $ 185,779 | $ 185,779 | $ 209,967 |
Asset Impairment Charges (Detai
Asset Impairment Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 | $ 0 |
Inpatient Services | ||||
Impairment of Long-Lived Assets Held-for-use | 0 | 0 | ||
Rehabilitation Therapy Services | ||||
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 | $ 0 |
Subsequent Events - New Master
Subsequent Events - New Master Leases (Details) $ in Millions | Nov. 01, 2016USD ($)facility | Sep. 30, 2016facility |
Subsequent Event [Line Items] | ||
Number of skilled nursing facilities under new lease agreement | facility | 64 | |
Welltower Inc | ||
Subsequent Event [Line Items] | ||
Annual Escalators (as a percent) | 3.40% | |
Annual escalators after decrease (as a percent) | 2.9 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Expected reduction to cumulative rent obligations through 2032 | $ | $ 297 | |
Subsequent Event | Welltower Inc | ||
Subsequent Event [Line Items] | ||
Number of facilities sold by related party | facility | 64 | |
Notes issued | $ | $ 51.2 | |
Second Spring | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Decrease in initial annual rent (as a percent) | 5.00% | |
Annual rent | $ | $ 103.9 | |
Annual escalator 2017 | 1 | |
Annual escalator 2018 | 1.5 | |
Annual escalator thereafter | 2 | |
Second Spring | Subsequent Event | Welltower Inc | ||
Subsequent Event [Line Items] | ||
Number of facilities sold by related party | facility | 64 |
Subsequent Events - Divestiture
Subsequent Events - Divestiture of Non-Strategic Facilities (Details) - Subsequent Event $ in Millions | Oct. 23, 2016USD ($)facility | Oct. 18, 2016USD ($)facility |
Pennsylvania Delaware And West Virginia | ||
Subsequent Events | ||
Underperforming leased assisted living facilities divested | facility | 9 | |
Annual revenue | $ 22.5 | |
Pre-tax net loss | $ 2.8 | |
Kansas Missouri Nebraska And Iowa | Disposed by sale | Purchase and sale agreement | ||
Subsequent Events | ||
Number Of Facilities Sold | facility | 18 | |
Number of owned facilities | facility | 16 | |
Number of leased facilities | facility | 2 | |
Annual revenue | $ 110.1 | |
Pre-tax net loss | 10.7 | |
Total assets | 80 | |
Sale proceeds | $ 80 |