Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 08, 2017 | |
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 | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Class A Common Stock | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 77,236,610 | |
Class B Common Stock | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 15,495,019 | |
Class C Common Stock | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 61,800,511 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 51,793 | $ 51,408 |
Restricted cash and investments in marketable securities | 43,550 | 43,555 |
Accounts receivable, net of allowances for doubtful accounts of $222,913 and $218,383 at March 31, 2017 and December 31, 2016, respectively | 808,669 | 832,109 |
Prepaid expenses | 63,594 | 64,218 |
Other current assets | 58,879 | 63,641 |
Assets held for sale, current | 4,064 | 4,056 |
Total current assets | 1,030,549 | 1,058,987 |
Property and equipment, net of accumulated depreciation of $821,274 and $807,776 at March 31, 2017 and December 31, 2016, respectively | 3,709,242 | 3,765,393 |
Restricted cash and investments in marketable securities | 114,270 | 112,471 |
Other long-term assets | 136,764 | 137,602 |
Deferred income taxes | 6,274 | 6,107 |
Identifiable intangible assets, net of accumulated amortization of $97,929 and $91,155 at March 31, 2017 and December 31, 2016, respectively | 168,793 | 175,566 |
Goodwill | 439,912 | 440,712 |
Assets held for sale, noncurrent | 82,705 | 82,363 |
Total assets | 5,688,509 | 5,779,201 |
Current liabilities: | ||
Current installments of long-term debt | 36,062 | 24,594 |
Capital lease obligation | 1,926 | 1,886 |
Financing obligations | 1,660 | 1,613 |
Accounts payable | 254,891 | 258,616 |
Accrued expenses | 166,465 | 215,457 |
Accrued compensation | 189,477 | 181,841 |
Self-insurance reserves | 172,565 | 172,565 |
Current portion of liabilities held for sale | 997 | 988 |
Total current liabilities | 824,043 | 857,560 |
Long-term liabilities: | ||
Long-term debt | 1,110,826 | 1,146,550 |
Capital lease obligations | 985,169 | 997,340 |
Financing obligations | 2,889,324 | 2,867,534 |
Deferred income taxes | 23,465 | 22,354 |
Self-insurance reserves | 452,434 | 445,559 |
Liabilities held for sale | 68,805 | 69,057 |
Other long-term liabilities | 145,966 | 103,435 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Additional paid-in-capital | 297,618 | 305,358 |
Accumulated deficit | (846,376) | (795,615) |
Accumulated other comprehensive income (loss) | (215) | (221) |
Total stockholders’ deficit before noncontrolling interests | (548,818) | (490,323) |
Noncontrolling interests | (262,705) | (239,865) |
Total stockholders' deficit | (811,523) | (730,188) |
Total liabilities and stockholders’ deficit | 5,688,509 | 5,779,201 |
Class A Common Stock | ||
Stockholders’ equity: | ||
Common stock | 77 | 75 |
Class B Common Stock | ||
Stockholders’ equity: | ||
Common stock | 16 | 16 |
Class C Common Stock | ||
Stockholders’ equity: | ||
Common stock | $ 62 | $ 64 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Allowance for doubtful accounts | $ 222,913 | $ 218,383 |
Other assets: | ||
Accumulated depreciation on property and equipment | 821,274 | 807,776 |
Accumulated amortization on intangible assets | $ 97,929 | $ 91,155 |
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) | 76,836,541 | 75,187,388 |
Common stock, shares, outstanding (in shares) | 76,836,541 | 75,187,388 |
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) | 15,495,019 | 15,495,019 |
Common stock, shares, outstanding (in shares) | 15,495,019 | 15,495,019 |
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) | 62,200,511 | 63,849,380 |
Common stock, shares, outstanding (in shares) | 62,200,511 | 63,849,380 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||
Net revenues | $ 1,389,132 | $ 1,472,218 |
Salaries, wages and benefits | 824,494 | 867,717 |
Other operating expenses | 342,257 | 361,097 |
General and administrative costs | 45,122 | 48,427 |
Provision for losses on accounts receivable | 23,528 | 26,493 |
Lease expense | 36,100 | 37,316 |
Depreciation and amortization expense | 64,369 | 61,765 |
Interest expense | 124,754 | 135,181 |
Investment income | (1,109) | (481) |
Other loss | 9,034 | 12 |
Transaction costs | 3,025 | 1,754 |
Skilled Healthcare and other loss contingency expense | 1,626 | |
Equity in net income of unconsolidated affiliates | (134) | (763) |
Loss before income tax expense | (82,308) | (67,926) |
Income tax expense | 1,284 | 3,064 |
Loss from continuing operations | (83,592) | (70,990) |
Loss from discontinued operations, net of taxes | (21) | (38) |
Net loss | (83,613) | (71,028) |
Less net loss attributable to noncontrolling interests | 32,852 | 27,989 |
Net loss attributable to Genesis Healthcare, Inc | $ (50,761) | $ (43,039) |
Basic and diluted: | ||
Weighted-average shares outstanding for basic and diluted net loss per share | 91,880 | 89,198 |
Basic and diluted net loss per common share: | ||
Loss from continuing operations attributable to Genesis Healthcare, Inc. | $ (0.55) | $ (0.48) |
Loss from discontinued operations, net of taxes | 0 | 0 |
Net loss attributable to Genesis Healthcare, Inc. | $ (0.55) | $ (0.48) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Net loss | $ (83,613) | $ (71,028) |
Net unrealized loss on marketable securities, net of tax | 21 | 844 |
Comprehensive loss | (83,592) | (70,184) |
Less: comprehensive loss attributable to noncontrolling interests | 32,837 | 27,635 |
Comprehensive loss attributable to Genesis Healthcare, Inc. | $ (50,755) | $ (42,549) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows from Operating Activities | ||
Net loss | $ (83,613) | $ (71,028) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Non-cash interest and leasing arrangements, net | 16,387 | 24,989 |
Other non-cash charges, net | 9,034 | 12 |
Share based compensation | 2,286 | 1,590 |
Depreciation and amortization | 64,369 | 61,765 |
Provision for losses on accounts receivable | 23,528 | 26,493 |
Equity in net income of unconsolidated affiliates | (134) | (763) |
Provision (benefit) for deferred taxes | 933 | 4,415 |
Changes in assets and liabilities: | ||
Accounts receivable | (4,723) | (60,866) |
Accounts payable and other accrued expenses and other | 16,563 | 37,839 |
Net cash provided by operating activities | 44,630 | 24,446 |
Cash Flows from Investing Activities | ||
Capital expenditures | (19,245) | (26,243) |
Purchases of marketable securities | (8,039) | (13,922) |
Proceeds on maturity or sale of marketable securities | 7,921 | 13,465 |
Net change in restricted cash and equivalents | (1,643) | 8,578 |
Sale of investment in joint venture | 242 | 1,010 |
Sales of assets | 76,373 | |
Other, net | (537) | (1,144) |
Net cash used in investing activities | (21,301) | 58,117 |
Cash Flows from Financing Activities | ||
Borrowings under revolving credit facility | 176,000 | 224,000 |
Repayments under revolving credit facility | (200,000) | (254,000) |
Proceeds from issuance of long-term debt | 67,872 | |
Proceeds from tenant improvement draws under lease arrangements | 5,180 | 499 |
Repayment of long-term debt | (4,094) | (127,717) |
Debt issuance costs | (2,316) | |
Distributions to noncontrolling interests and stockholders | (30) | (240) |
Net cash used in financing activities | (22,944) | (91,902) |
Net increase (decrease) in cash and cash equivalents | 385 | (9,339) |
Beginning of period | 51,408 | 61,543 |
End of period | 51,793 | 52,204 |
Supplemental disclosure of cash flow information | ||
Interest paid | 107,373 | 111,456 |
Net taxes refunded | (1,803) | (14,180) |
Non-cash investing and financing activities: | ||
Capital leases reduced | (14,909) | |
Financing obligations incurred | $ 8,733 | $ 3,861 |
General Information
General Information | 3 Months Ended |
Mar. 31, 2017 | |
General Information | |
Description of Business | (1) General Informatio Company History Genesis Healthcare, Inc., a Delaware corporation, was incorporated in October 2005 under the name of SHG Holding Solutions, Inc., and subsequently changed its name to Skilled Healthcare Group, Inc. (Skilled). On February 2, 2015, Skilled combined its businesses and operations (the Combination) with FC-GEN Operations Investment, LLC, a Delaware limited liability company (FC-GEN), pursuant to a Purchase and Contribution Agreement dated August 18, 2014. In connection with the Combination, Skilled changed its name to Genesis Healthcare, Inc. Effective December 1, 2012, FC-GEN completed the acquisition of Sun Healthcare Group, Inc. (Sun Healthcare) and its subsidiaries. Description of Business Genesis Healthcare, Inc. is a healthcare services company that through its subsidiaries (collectively, the Company or Genesis) 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. At March 31, 2017, the Company provides inpatient services through 493 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 86% 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 11% 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 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 March 31, 2017. 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, 2016 filed with the U.S. Securities and Exchange Commission (the SEC) on Form 10-K on March 6, 2017. Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (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 Company adopted ASU 2016-09 effective January 1, 2017. Its adoption had no material impact on the Company’s consolidated financial condition and results of operations. Recently Issued Accounting Pronouncements In May 2014, 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. In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (ASU 2016-20), which serves to narrow aspects of the guidance issued in ASU 2014-09. The adoption of ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2017. There are two allowed adoption methods, (1) the full retrospective method, or (2) the modified retrospective method. The full retrospective method requires recognition of the cumulative effect of applying the new standard at the earliest period presented. The modified retrospective method requires recognition of the cumulative effect of applying the new standard at the date of initial application. The Company will adopt ASU 2014-09 effective January 1, 2018 using the modified retrospective method. The Company’s evaluation of the impact of ASU 2014-09 has been ongoing since its original issuance and continues to progress in 2017. The Company is not yet in a position to conclude on the total effect these standards 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 requires equity investments be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values; eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value; and requires separate presentation of financial assets and financial liabilities by measurement category. The new guidance is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted under certain circumstances. The Company does not expect the adoption of ASU 2016-01 to have a material impact 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 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 adoption of ASU 2016-15 is not expected to have a material impact on the Company’s consolidated statements of cash flows. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (230): Restricted Cash (ASU 2016-18), which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The adoption of ASU 2016-18 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted, including adoption in an interim period. The adoption of ASU 2016-18 is not expected to have a material impact on the Company’s consolidated statements of cash flows. In January 2017, the FASB issued ASU No. 2017-01, Business Combination (805): Clarifying the Definition of a Business (ASU 2017-01), which provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The adoption of ASU 2017-01 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted in certain circumstances. The Company is still evaluating the effect, if any, ASU 2017-01 will have on the Company’s consolidated financial condition and results of operations. The Company does not expect the adoption of ASU 2017-01 to have a material impact on its consolidated financial condition and results of operations. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (350): Simplifying the Test for Goodwill Impairment (ASU 2017-04), which serves to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. ASU 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The adoption of ASU 2017-04 is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company anticipates early adopting ASU 2017-04 when it performs its annual goodwill impairment test at September 30, 2017, and for any interim goodwill measurements that may be required in accordance with Accounting Standards Codification 350 – Intangibles – Goodwill and Other. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial condition and results of operations. |
Certain Significant Risks and U
Certain Significant Risks and Uncertainties | 3 Months Ended |
Mar. 31, 2017 | |
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 78% 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 months ended March 31, 2017 and 2016. Three months ended March 31, 2017 2016 Medicare 24 % 26 % Medicaid 54 % 53 % Insurance 12 % 11 % Private and other 10 % 10 % Total 100 % 100 % 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, 2016, which was filed with the SEC on March 6, 2017 and in the Company’s Quarterly Reports on Form 10-Q. |
Significant Transactions and Ev
Significant Transactions and Events | 3 Months Ended |
Mar. 31, 2017 | |
Significant Transactions and Events | |
Significant Transactions and Events | (3) Significant Transactions and Events Skilled Nursing Facility Divestitures The Company divested six skilled nursing facilities in the three months ended March 31, 2017. Four skilled nursing facilities located in Massachusetts were subject to a master lease agreement and were divested on March 14, 2017. These facilities, along with two other facilities that were divested previously and subleased to a third-party operator, were sold and terminated from the master lease resulting in an annual rent credit of $1.2 million. The master lease termination resulted in a capital lease net asset and obligation write-down of $14.9 million. The four skilled nursing facilities had annual revenue of $26.7 million and pre-tax net income of $1.2 million. The Company recognized a loss of $1.4 million, which is included in other loss on the consolidated statements of operations. Two skilled nursing facilities located in Georgia were divested on February 1, 2017 at the expiration of their respective lease terms. The two skilled nursing facilities had annual revenue of $10.6 million and pre-tax net loss of $0.4 million. The Company recognized a loss of $0.5 million, which is included in other loss on the consolidated statements of operations. The Company divested 19 skilled nursing facilities on April 1, 2017. See Note 14 – “Subsequent Events. ” |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Loss Per Share | |
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 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 net loss plus the effect of assumed conversions (if applicable) by the weighted-average number of outstanding common shares after giving effect to all potential dilutive common shares. A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per common share follows (in thousands, except per share data): Three months ended March 31, 2017 2016 Numerator: Loss from continuing operations $ (83,592) $ (70,990) Less: Net loss attributable to noncontrolling interests (32,852) (27,989) Loss from continuing operations attributable to Genesis Healthcare, Inc. $ (50,740) $ (43,001) Loss from discontinued operations, net of taxes (21) (38) Net loss attributable to Genesis Healthcare, Inc. $ (50,761) $ (43,039) Denominator: Weighted-average shares outstanding for basic and diluted net loss per share 91,880 89,198 Basic and diluted net loss per common share: Loss from continuing operations attributable to Genesis Healthcare, Inc. $ (0.55) $ (0.48) Loss from discontinued operations, net of taxes (0.00) (0.00) Net loss attributable to Genesis Healthcare, Inc. $ (0.55) $ (0.48) The following were excluded from net loss attributable to Genesis Healthcare, Inc. and the weighted-average diluted shares computation for the three months ended March 31, 2017 and 2016, as their inclusion would have been anti-dilutive (in thousands): Three months ended March 31, 2017 2016 Net loss Net loss attributable to attributable to Genesis Anti-dilutive Genesis Anti-dilutive Healthcare, Inc. shares Healthcare, Inc. shares Exchange of restricted stock units of noncontrolling interests $ (34,215) 62,835 $ (24,002) 64,461 Employee and director unvested restricted stock units — 1,550 — — Convertible note (109) 3,000 — — The combined impact of the assumed conversion to common stock and related tax implications attributable to the noncontrolling interest, the grants under the 2015 Omnibus Equity Incentive Plan, and the convertible note are anti-dilutive to EPS because the Company is in a net loss position for the three months ended March 31, 2017 and 2016. As of March 31, 2017, there were 62,200,511 units attributable to the noncontrolling interests outstanding. In addition to the outstanding units attributable to the noncontrolling interests, the conversion of all of those units will result in the issuance of an incremental 10,830 shares of Class A common stock. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 2016 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage (in thousands, except percentages) Revenues: Inpatient services: Skilled nursing facilities $ 1,169,925 84.2 % $ 1,208,433 82.0 % $ (38,508) (3.2) % Assisted/Senior living facilities 23,952 1.7 % 30,919 2.1 % (6,967) (22.5) % Administration of third party facilities 2,433 0.2 % 3,079 0.2 % (646) (21.0) % Elimination of administrative services (384) — % (375) — % (9) 2.4 % Inpatient services, net 1,195,926 86.1 % 1,242,056 84.3 % (46,130) (3.7) % Rehabilitation therapy services: Total therapy services 256,217 18.4 % 285,112 19.4 % (28,895) (10.1) % Elimination intersegment rehabilitation therapy services (100,530) (7.2) % (106,432) (7.2) % 5,902 (5.5) % Third party rehabilitation therapy services 155,687 11.2 % 178,680 12.2 % (22,993) (12.9) % Other services: Total other services 46,046 3.3 % 56,626 3.8 % (10,580) (18.7) % Elimination intersegment other services (8,527) (0.6) % (5,144) (0.3) % (3,383) 65.8 % Third party other services 37,519 2.7 % 51,482 3.5 % (13,963) (27.1) % Net revenues $ 1,389,132 100.0 % $ 1,472,218 100.0 % $ (83,086) (5.6) % A summary of the Company’s unaudited condensed consolidated statement of operations follows: Three months ended March 31, 2017 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated (In thousands) Net revenues $ 1,196,310 $ 256,217 $ 45,796 $ 250 $ (109,441) $ 1,389,132 Salaries, wages and benefits 581,423 212,752 30,319 — — 824,494 Other operating expenses 418,601 18,350 14,747 — (109,441) 342,257 General and administrative costs — — — 45,122 — 45,122 Provision for losses on accounts receivable 20,243 2,987 334 (36) — 23,528 Lease expense 35,317 7 295 481 — 36,100 Depreciation and amortization expense 55,980 3,747 167 4,475 — 64,369 Interest expense 103,317 14 9 21,414 — 124,754 Investment income — — — (1,109) — (1,109) Other loss — — — 9,034 — 9,034 Transaction costs — — — 3,025 — 3,025 Equity in net (income) loss of unconsolidated affiliates — — — (568) 434 (134) (Loss) income before income tax benefit (18,571) 18,360 (75) (81,588) (434) (82,308) Income tax expense — — — 1,284 — 1,284 (Loss) income from continuing operations $ (18,571) $ 18,360 $ (75) $ (82,872) $ (434) $ (83,592) Three months ended March 31, 2016 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated (In thousands) Net revenues $ 1,242,431 $ 285,112 $ 56,524 $ 102 $ (111,951) $ 1,472,218 Salaries, wages and benefits 588,902 240,436 38,379 — — 867,717 Other operating expenses 438,699 20,341 14,008 — (111,951) 361,097 General and administrative costs — — — 48,427 — 48,427 Provision for losses on accounts receivable 23,345 2,648 546 (46) — 26,493 Lease expense 36,296 24 530 466 — 37,316 Depreciation and amortization expense 53,839 3,120 314 4,492 — 61,765 Interest expense 108,989 14 16 26,162 — 135,181 Investment income — — — (481) — (481) Other loss — — — 12 — 12 Transaction costs — — — 1,754 — 1,754 Skilled Healthcare and other loss contingency expense — — — 1,626 — 1,626 Equity in net (income) loss of unconsolidated affiliates — — — (1,112) 349 (763) (Loss) income before income tax expense (7,639) 18,529 2,731 (81,198) (349) (67,926) Income tax expense — — — 3,064 — 3,064 (Loss) income from continuing operations $ (7,639) $ 18,529 $ 2,731 $ (84,262) $ (349) $ (70,990) The following table presents the segment assets as of March 31, 2017 compared to December 31, 2016 (in thousands): March 31, 2017 December 31, 2016 Inpatient services $ 5,096,529 $ 5,194,811 Rehabilitation services 462,178 454,723 Other services 67,755 67,348 Corporate and eliminations 62,047 62,319 Total assets $ 5,688,509 $ 5,779,201 The following table presents segment goodwill as of March 31, 2017 compared to December 31, 2016 (in thousands): March 31, 2017 December 31, 2016 Inpatient services $ 354,270 $ 355,070 Rehabilitation services 73,814 73,814 Other services 11,828 11,828 Total goodwill $ 439,912 $ 440,712 With the divestiture of six of the Company’s skilled nursing facilities in the three months ended March 31, 2017, the Company derecognized goodwill of $0.8 million in its inpatient segment. See Note 3 – “ Significant Transactions and Events – Skilled Nursing Facility Divestitures .” |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | (6) Property and Equipment Property and equipment consisted of the following as of March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 December 31, 2016 Land, buildings and improvements $ 670,671 $ 673,092 Capital lease land, buildings and improvements 762,803 818,273 Financing obligation land, buildings and improvements 2,587,751 2,584,178 Equipment, furniture and fixtures 451,320 447,767 Construction in progress 57,971 49,859 Gross property and equipment 4,530,516 4,573,169 Less: accumulated depreciation (821,274) (807,776) Net property and equipment $ 3,709,242 $ 3,765,393 In the three months ended March 31, 2017, the Company amended one of its master lease agreements resulting in the net capital lease asset write-down of $14.9 million. See Note 3 – “ Significant Transactions and Events – Skilled Nursing Facility Divestitures.” The write-down consisted of $55.6 million of gross capital lease asset included in the line description “Capital lease land, buildings and improvements” offset by $40.7 million of accumulated depreciation. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Long-Term Debt Abstract | |
Long-Term Debt | (7) Long-Term Debt Long-term debt at March 31, 2017 and December 31, 2016 consisted of the following (in thousands): March 31, 2017 December 31, 2016 Revolving credit facilities, net of debt issuance costs of $8,473 at March 31, 2017 and $9,220 at December 31, 2016 $ 360,377 $ 383,630 Term loan agreement, net of debt issuance costs of $3,590 at March 31, 2017 and $3,859 at December 31, 2016 116,300 116,174 Real estate bridge loans, net of debt issuance costs of $4,158 at March 31, 2017 and $4,400 at December 31, 2016 313,792 313,549 HUD insured loans, net of debt issuance costs of $4,753 at March 31, 2017 and $4,773 at December 31, 2016 240,534 241,570 Notes payable, net of convertible debt discount of $941 at March 31, 2017 and $990 at December 31, 2016 73,879 73,829 Mortgages and other secured debt (recourse) 13,059 13,235 Mortgages and other secured debt (non-recourse), net of debt issuance costs of $120 at March 31, 2017 and $131 at December 31, 2016 28,947 29,157 1,146,888 1,171,144 Less: Current installments of long-term debt (36,062) (24,594) Long-term debt $ 1,110,826 $ 1,146,550 Revolving Credit Facilities The Company’s revolving credit facilities, as amended, (the Revolving Credit Facilities) consist of a senior secured, asset-based revolving credit facility of up to $550 million under four separate tranches: Tranche A-1, Tranche A-2, FILO Tranche and HUD Tranche. The Revolving Credit Facilities mature on February 2, 2020. 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 four tranches, and in regards to LIBOR loans (i) for Tranche A-1 ranges from 3.00% to 3.50%; (ii) for Tranche A-2 ranges from 3.00% to 3.50%; (iii) for FILO Tranche is 6.00%, and (iv) for HUD Tranche ranges from 2.50% to 3.00%. The applicable margin is based on the level of commitments for all four tranches, and in regards to base rate loans (i) for Tranche A-1 ranges from 2.00% to 2.50%; (ii) for Tranche A-2 ranges from 2.00% to 2.50%; (iii) for FILO Tranche is 5.00%; and (iv) for HUD Tranche ranges from 1.50% to 2.00%. 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. The Revolving Credit Facilities contain financial, affirmative and negative covenants, and events of default that are substantially identical to those of the 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 gradually over the course of the loan to 4.0 to 1.0 beginning in 2020. Borrowings and interest rates under the four tranches were as follows at March 31, 2017: Weighted Average Revolving Credit Facilities Commitment Borrowings Interest FILO tranche $ 18,750 $ 18,750 7.65 % Tranche A-1 440,000 278,000 4.75 % Tranche A-2 50,000 41,300 4.44 % HUD tranche 35,000 30,800 4.36 % $ 543,750 $ 368,850 4.83 % As of March 31, 2017, the Company had a total borrowing base capacity of $501.5 million with outstanding borrowings under the Revolving Credit Facilities of $368.9 million and $59.8 million of drawn letters of credit securing insurance and lease obligations, leaving the Company with approximately $72.8 million of available borrowing capacity under the Revolving Credit Facilities. Term Loan Agreement The Company and certain of its affiliates, including FC-GEN Operations Investment, LLC (the Borrower) are party to a four-year term loan agreement (the Term Loan Agreement) with an affiliate of Welltower Inc. (Welltower) and an affiliate of Omega Healthcare Investors, Inc. (Omega). The Term Loan Agreement provides for term loans (the 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. The Term Loan Agreement has a maturity date of July 29, 2020. Borrowings under the 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. As of March 31, 2017, the Term Loans had an outstanding principal balance of $119.9 million. The 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 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. The 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 gradually over the course of the loan to 4.0 to 1.0 beginning in 2020. Real Estate Bridge Loans The Company is party to four separate bridge loan agreements with Welltower (Welltower Bridge Loans). The Welltower Bridge Loans have an effective date of October 1, 2016 and are the result of the combination of two real estate bridge loans executed in 2015 upon the Company’s separate acquisitions of the real property of 87 skilled nursing and assisted living facilities. The Welltower Bridge Loans are 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 Welltower Bridge Loans. Each Welltower Bridge Loan has a maturity date of January 1, 2022 and a 10.0% interest rate that increases annually by 0.25% beginning January 1, 2018. The Welltower Bridge Loans are secured by a mortgage lien on the real property of the 45 facilities and a second lien on certain receivables of the operators of 27 of the facilities. The Welltower Bridge Loans have an outstanding principal balance of $317.0 million at March 31, 2017. One of the Welltower Bridge Loans includes the debt associated with three skilled nursing facilities that have been reclassified as assets held for sale in the consolidated balance sheets at March 31, 2017 and December 31, 2016. This Welltower Bridge Loan has a principal balance of $9.0 million. See Note 13 – “Assets Held for Sale.” On April 1, 2016, the Company acquired one skilled nursing facility and entered into a $9.9 million real estate bridge loan (the Other Real Estate Bridge Loan). 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 Loan bore interest of 5.00% at March 31, 2017. The Other 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 pay down the outstanding principal balance of the Other Real Estate Bridge Loan. The Other Real Estate Bridge Loan has an outstanding principal balance of $9.9 million at March 31, 2017. HUD Insured Loans As of March 31, 2017 the Company has 39 skilled nursing facility loans insured by the U.S. Department of Housing and Urban Development (HUD) with a combined aggregate principal balance of $308.4 million, which includes a $13.9 million debt premium on 10 skilled nursing facility loans established in purchase accounting in connection with the Combination. Of the 39 HUD insured skilled nursing facilities, 13 have been reclassified as assets held for sale in the consolidated balance sheets at March 31, 2017 and December 31, 2016. These 13 skilled nursing facilities have an aggregate principal balance of $63.1 million. See Note 13 – “Assets Held for Sale.” The HUD insured loans have an original amortization term of 30 to 35 years and an average remaining term of 31 years with fixed interest rates ranging from 3.0% to 4.6% and a weighted average interest rate of 3.5%. 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 March 31, 2017, the Company has total escrow reserve funds of $22.0 million with the loan servicer that are reported within prepaid expenses. Notes Payable In connection with Welltower’s sale of 64 skilled nursing facilities to Second Spring Healthcare Investments (Second Spring) on November 1, 2016, the Company issued a note totaling $51.2 million to Welltower. The note accrues cash interest at 3% and paid-in-kind interest at 7%. Cash interest is paid and paid-in-kind interest accretes the principal amount semi-annually every May 1 and November 1. The note matures on October 30, 2020. The note has an outstanding accreted balance of $51.2 million at March 31, 2017. In connection with Welltower’s sale of 28 skilled nursing facilities to Cindat Best Years Welltower JV LLC (CBYW) on December 23, 2016, the Company issued two notes totaling $23.7 million to Welltower. The first note has an initial principal balance of $11.7 million and accrues cash interest at 3% and paid-in-kind interest at 7%. Cash interest is paid and paid-in-kind interest accretes the principal amount semi-annually every June 15 and December 15. The note matures on December 15, 2021. The note has an outstanding accreted principal balance of $11.7 million at March 31, 2017. The second note has an initial principal balance of $12.0 million and accrues cash interest at 3% and paid-in-kind interest at 3%. Cash interest is paid and paid-in-kind interest accretes the principal amount semi-annually every June 15 and December 15. From the second anniversary up to the day before the note matures, CBYW can convert all or any portion of the note into fully paid shares of common stock at the conversion rate of 3,000,000 shares of common stock per the full accreted principal amount of the note. The note matures on December 15, 2021. The note has an outstanding accreted principal balance of $12.0 million at March 31, 2017. 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 2.7% to 6.0% at March 31, 2017, 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 4.4%, at March 31, 2017. 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. The aggregate principal balance of these loans includes a $1.7 million debt premium on one debt instrument. The Company’s consolidated current installment of long-term debt increased $11.5 million due to the reclassification of a non-recourse loan of $11.5 million, which has a maturity date of March 27, 2018. Debt Covenants The Revolving Credit Facilities, the Term Loan Agreement and the Welltower Bridge Loans (collectively, the Credit Facilities) each contain a number of financial, affirmative and negative covenants, including a maximum leverage ratio, a minimum interest coverage ratio, a minimum fixed charge coverage ratio, a springing minimum fixed charge coverage ratio tied to minimum liquidity and maximum capital expenditures. At March 31, 2017, the Company is in compliance with all covenants contained in the Credit Facilities with the exception of the maximum leverage covenant. Effective May 5, 2017, the Company entered into amended agreements with respect to the Revolving Credit Facilities, the Term Loan Agreement and the Welltower Bridge Loans. With respect to the Term Loan Agreement and the Welltower Bridge Loans, these amendments provided waivers for the breach at March 31, 2017 of the maximum leverage covenant. With respect to the Revolving Credit Facilities, the maximum leverage covenant was amended effective March 31, 2017 resulting in the Company’s compliance with that covenant. The amendments to the Credit Facilities also amended all the prospective financial covenant levels effective May 5, 2017. The most restrictive financial covenant, as amended, is the maximum leverage covenant ratio which requires the Company to maintain a leverage ratio, as defined therein, of no more than 7.25 to 1.0 through December 31, 2017 and stepping down gradually over the course of the loans to 6.5 to 1.0 beginning in 2020. 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. Although the Company is in compliance and projects to be in compliance with its material debt covenants through June 30, 2018, at a minimum, the ongoing uncertainty related to the impact of healthcare reform initiatives may have an adverse impact on the Company’s ability to remain in compliance with its covenants. Such uncertainty includes changes in reimbursement patterns, patient admission patterns, bundled payment arrangements, as well as potential changes to the Affordable Care Act currently being considered in Congress, among others. There can be no assurance that the confluence of these and other factors will not impede the Company’s ability to meet its debt covenants in the future. Management has considered these factors and has devised certain strategies that would be implemented to address the ramifications of these uncertainties. Such strategies include, but are not limited to, cost containment measures and possible divestitures of less profitable facilities. The maturity of total debt of $1,225.4 million, including debt classified as assets held for sale and excluding debt issuance costs and other non-cash debt discounts and premiums, at March 31, 2017 is as follows (in thousands): Twelve months ended March 31, 2018 $ 37,797 2019 17,326 2020 369,912 2021 175,089 2022 347,661 Thereafter 277,607 Total debt maturity $ 1,225,392 |
Leases and Lease Commitments
Leases and Lease Commitments | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 are as follows (in thousands): Twelve months ended March 31, Capital Leases Operating Leases 2018 $ 89,021 $ 140,380 2019 90,982 137,534 2020 93,841 135,249 2021 93,707 134,602 2022 95,736 124,998 Thereafter 3,012,633 296,225 Total future minimum lease payments 3,475,920 $ 968,988 Less amount representing interest (2,488,825) Capital lease obligation 987,095 Less current portion (1,926) Long-term capital lease obligation $ 985,169 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 March 31, 2017, with a weighted average interest rate of 10.0%, and mature at dates ranging from 2017 to 2047. Deferred Lease Balances At March 31, 2017 and December 31, 2016, the Company had $41.1 million and $43.0 million, respectively, of favorable leases net of accumulated amortization, included in identifiable intangible assets, and $27.4 million and $28.8 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 March 31, 2017 and December 31, 2016, the Company had $32.0 million and $31.6 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. The Company has master lease agreements with Welltower, Sabra Health Care REIT, Inc. (Sabra) and Omega (collectively, the Master Lease Agreements). The Master Lease Agreements each contain a number of financial, affirmative and negative covenants, including a maximum leverage ratio, a minimum fixed charge coverage ratio, and minimum liquidity. At March 31, 2017, the Company is in compliance with all covenants contained in these agreements with the exception of the maximum leverage covenant, which is contained only in the master lease agreement with Welltower (the Welltower Master Lease). Effective May 5, 2017, the Company entered into amended agreements with respect to the Master Lease Agreements. Welltower provided a waiver for the breach at March 31, 2017 of the maximum leverage covenant. The amendments to the Master Lease Agreements also amended all the prospective financial covenant levels effective May 5, 2017. The most restrictive financial covenant, as amended, is the maximum leverage covenant ratio contained in the Welltower Master Lease, which requires the Company to maintain a leverage ratio, as defined therein, of no more than 7.25 to 1.0 through December 31, 2017 and stepping down gradually over the course of the lease to 6.5 to 1.0 beginning in 2020. At March 31, 2017, the Company did not meet certain financial covenants contained in three leases related to 26 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 March 31, 2017 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. Although the Company is in compliance and projects to be in compliance with its material lease covenants through June 30, 2018, at a minimum, the ongoing uncertainty related to the impact of healthcare reform initiatives may have an adverse impact on the Company’s ability to remain in compliance with its covenants. Such uncertainty includes changes in reimbursement patterns, patient admission patterns, bundled payment arrangements, as well as potential changes to the Affordable Care Act currently being considered in Congress, among others. There can be no assurance that the confluence of these and other factors will not impede the Company’s ability to meet its lease covenants in the future. Management has considered these factors and has devised certain strategies that would be implemented to address the ramifications of these uncertainties. Such strategies include, but are not limited to, cost containment measures and possible divestitures of less profitable facilities . |
Financing Obligation
Financing Obligation | 3 Months Ended |
Mar. 31, 2017 | |
Financing Obligation | |
Financing Obligation | (9) Financing obligations represent the present value of minimum lease payments under such lease arrangements and bear imputed interest at rates ranging from 1.2% to 27.8% at March 31, 2017, with a weighted average interest rate of 10.6%, and mature at dates ranging from 2021 to 2043. Future minimum payments for the next five years and thereafter under leases classified as financing obligations at March 31, 2017 are as follows (in thousands): Twelve months ended March 31, 2018 $ 271,872 2019 277,604 2020 283,939 2021 290,681 2022 293,648 Thereafter 8,059,503 Total future minimum lease payments 9,477,247 Less amount representing interest (6,586,263) Financing obligations $ 2,890,984 Less current portion (1,660) Long-term financing obligations $ 2,889,324 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (10) Income Taxes The Company effectively owns 59.7% of FC-GEN, an entity treated 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 59.7% ownership of FC-GEN. For the three months ended March 31, 2017, the Company recorded income tax expense of $1.3 million from continuing operations, representing an effective tax rate of (1.6)%, compared to income tax expense of $3.1 million from continuing operations, representing an effective tax rate of (4.5)%, for the same period in 2016. The change in the effective tax rate for the three months ended March 31, 2017, is attributable to a one-time adjustment to the Company’s deferred tax liability that was recorded in the three months ended March 31, 2016 reporting period. In addition, during the three months ended September 30, 2016 reporting period, the Company released a $28.2 million FASB Interpretation No. 48 (FIN 48) reserve due to the expiration of the statute of limitations regarding Sun Healthcare’s utilization of its net operating loss carryforward to offset built-in-gain pursuant to Internal Revenue Code (IRC) Section 382, significantly reducing the quarterly accrual of interest and penalty under FIN 48. On December 31, 2016, 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 March 31, 2017, 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 2017, 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. The Company provides rehabilitation therapy services within the People’s Republic of China and Hong Kong. At March 31, 2017, 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 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 would increase and its purchase price would 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 were exchanges of 1,648,869 Class A units during the three months ended March 31, 2017 and no exchanges for the same period in 2016. The exchanges during the three months ended March 31, 2017 resulted in a $10.9 million IRC Section 754 tax basis step-up in the tax deductible goodwill of FC-GEN. 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 | 3 Months Ended |
Mar. 31, 2017 | |
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 $8.9 million and $8.9 million as of March 31, 2017 and December 31, 2016, respectively. The reserves for general and professional liability are recorded on an undiscounted basis. For the three months ended March 31, 2017 and 2016, the provision for general and professional liability risk totaled $34.5 million and $34.9 million, respectively. The reserves for general and professional liability were $397.7 million and $392.1 million as of March 31, 2017 and December 31, 2016, respectively. For the three months ended March 31, 2017 and 2016, the provision for workers’ compensation risk totaled $17.2 million and $18.1 million, respectively. The reserves for workers’ compensation risks were $227.3 million and $226.0 million as of March 31, 2017 and December 31, 2016, 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. This accrual for incurred but not yet reported claims was $19.9 million and $19.6 million as of March 31, 2017 and December 31, 2016, respectively. 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 Settlement Amount has been recorded as a liability in the consolidated balance sheets at March 31, 2017 and December 31, 2016. 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 second quarter of 2017, 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 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 | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value of Financial Instruments | |
Fair Value Measurements | (12) The Company’s financial instruments consist primarily of cash and cash equivalents, restricted cash and investments in marketable securities, accounts receivable, accounts payable and current and long-term debt. The Company’s financial instruments, other than its 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 present the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016, 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 March 31, Identical Assets Observable Inputs Inputs Assets: 2017 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 51,793 $ 51,793 $ — $ — Restricted cash and equivalents 13,675 13,675 — — Restricted investments in marketable securities 144,145 144,145 — — Total $ 209,613 $ 209,613 $ — $ — 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: 2016 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 51,408 $ 51,408 $ — $ — Restricted cash and equivalents 12,052 12,052 — — Restricted investments in marketable securities 143,974 143,974 — — Total $ 207,434 $ 207,434 $ — $ — The Company places its cash and cash 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: March 31, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value Revolving credit facilities $ 360,377 $ 360,377 $ 383,630 $ 383,630 Term loan agreement 116,300 116,300 116,174 116,174 Real estate bridge loans 313,792 313,792 313,549 313,549 HUD insured loans 240,534 226,944 241,570 226,983 Notes payable 73,879 73,879 73,829 73,829 Mortgages and other secured debt (recourse) 13,059 13,059 13,235 13,235 Mortgages and other secured debt (non-recourse) 28,947 28,947 29,157 29,157 $ 1,146,888 $ 1,133,298 $ 1,171,144 $ 1,156,557 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 Three months ended March 31, 2017 March 31, 2017 Assets: Property and equipment, net $ 3,709,242 $ — Goodwill 439,912 — Intangible assets 168,793 — Impairment Charges - Carrying Value Three months ended December 31, 2016 March 31, 2016 Assets: Property and equipment, net $ 3,765,393 $ — Goodwill 440,712 — Intangible assets 175,566 — 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. |
Assets Held for Sale
Assets Held for Sale | 3 Months Ended |
Mar. 31, 2017 | |
Assets Held for Sale and Discontinued Operations | |
Assets Held for Sale and Discontinued Operations | (13) Assets Held For Sale In the normal course of business, the Company continually evaluates the performance of its operating units, with an emphasis on selling or closing underperforming or non-strategic assets. These assets are evaluated to determine whether they qualify as assets held for sale or discontinued operations. The assets and liabilities of a disposal group classified as held for sale shall be presented separately in the asset and liability sections, respectively, of the statement of financial position in the period in which they are identified only. Assets held for sale that qualify as discontinued operations are removed from the results of continuing operations. The results of operations in the current and prior year periods, along with any cost to exit such businesses in the year of discontinuation, are classified as discontinued operations in the consolidated statements of operations. The Company has identified a disposal group in the inpatient segment of 16 owned skilled nursing facilities that qualified as assets held for sale. 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 segment in these states. The disposal group does not meet the criteria as a discontinued operation. Closing occurred on April 1, 2017. See Note 14 – “ Subsequent Events. ” The following table sets forth the major classes of assets and liabilities included as part of the disposal group (in thousands): March 31, 2017 Current assets: Prepaid expenses $ 4,064 Long-term assets: Property and equipment, net of accumulated depreciation of $10,792 76,772 Goodwill 5,933 Total assets $ 86,769 Current liabilities: Current installments of long-term debt $ 997 Long-term liabilities: Long-term debt 68,805 Total liabilities $ 69,802 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events | |
Subsequent Events | (14) Subsequent Events On April 1, 2017, the Company completed the sale of 18 skilled nursing facilities (16 owned and 2 leased) in the states of Kansas, Missouri, Nebraska and Iowa. The 18 skilled nursing facilities had annual revenue of $110.1 million, pre-tax net loss of $10.7 million and total assets of $91.6 million. Sale proceeds of approximately $80 million, net of transaction costs, were used principally to repay the indebtedness of the skilled nursing facilities. A loss was recognized in the three months ending March 31, 2017, totaling $7.2 million, which is included in other loss on the consolidated statements of operations. See Note 13 – “ Assets Held For Sale. ” On April 1, 2017, the Company completed the sale of one skilled nursing facility located in Tennessee on April 1, 2017 that was subject to a master lease agreement. The skilled nursing facility had annual revenue of $7.4 million and pre-tax net income of $0.5 million. A loss was recognized in the three months ending March 31, 2017, totaling $0.3 million, which is included in other loss on the consolidated statements of operations. In April 2017, the Company entered into a strategic dining and nutrition partnership to further leverage its national platforms, process expertise and technology. The relationship, which is expected to be accretive to the Company, will provide additional liquidity, cost efficiency and enhanced operational performance. |
General Information - 10Q (Poli
General Information - 10Q (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
General Information | |
Company History | Company History Genesis Healthcare, Inc., a Delaware corporation, was incorporated in October 2005 under the name of SHG Holding Solutions, Inc., and subsequently changed its name to Skilled Healthcare Group, Inc. (Skilled). On February 2, 2015, Skilled combined its businesses and operations (the Combination) with FC-GEN Operations Investment, LLC, a Delaware limited liability company (FC-GEN), pursuant to a Purchase and Contribution Agreement dated August 18, 2014. In connection with the Combination, Skilled changed its name to Genesis Healthcare, Inc. Effective December 1, 2012, FC-GEN completed the acquisition of Sun Healthcare Group, Inc. (Sun Healthcare) and its subsidiaries. |
Description of Business | Description of Business Genesis Healthcare, Inc. is a healthcare services company that through its subsidiaries (collectively, the Company or Genesis) 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. At March 31, 2017, the Company provides inpatient services through 493 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 86% 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 11% 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 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 March 31, 2017. 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, 2016 filed with the U.S. Securities and Exchange Commission (the SEC) on Form 10-K on March 6, 2017. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (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 Company adopted ASU 2016-09 effective January 1, 2017. Its adoption had no material impact on the Company’s consolidated financial condition and results of operations. Recently Issued Accounting Pronouncements In May 2014, 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. In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (ASU 2016-20), which serves to narrow aspects of the guidance issued in ASU 2014-09. The adoption of ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2017. There are two allowed adoption methods, (1) the full retrospective method, or (2) the modified retrospective method. The full retrospective method requires recognition of the cumulative effect of applying the new standard at the earliest period presented. The modified retrospective method requires recognition of the cumulative effect of applying the new standard at the date of initial application. The Company will adopt ASU 2014-09 effective January 1, 2018 using the modified retrospective method. The Company’s evaluation of the impact of ASU 2014-09 has been ongoing since its original issuance and continues to progress in 2017. The Company is not yet in a position to conclude on the total effect these standards 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 requires equity investments be measured at fair value with changes in fair value recognized in net income; simplifies the impairment assessment of equity investments without readily determinable fair values; eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value; and requires separate presentation of financial assets and financial liabilities by measurement category. The new guidance is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted under certain circumstances. The Company does not expect the adoption of ASU 2016-01 to have a material impact 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 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 adoption of ASU 2016-15 is not expected to have a material impact on the Company’s consolidated statements of cash flows. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (230): Restricted Cash (ASU 2016-18), which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The adoption of ASU 2016-18 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted, including adoption in an interim period. The adoption of ASU 2016-18 is not expected to have a material impact on the Company’s consolidated statements of cash flows. In January 2017, the FASB issued ASU No. 2017-01, Business Combination (805): Clarifying the Definition of a Business (ASU 2017-01), which provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The adoption of ASU 2017-01 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted in certain circumstances. The Company is still evaluating the effect, if any, ASU 2017-01 will have on the Company’s consolidated financial condition and results of operations. The Company does not expect the adoption of ASU 2017-01 to have a material impact on its consolidated financial condition and results of operations. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (350): Simplifying the Test for Goodwill Impairment (ASU 2017-04), which serves to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. ASU 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The adoption of ASU 2017-04 is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company anticipates early adopting ASU 2017-04 when it performs its annual goodwill impairment test at September 30, 2017, and for any interim goodwill measurements that may be required in accordance with Accounting Standards Codification 350 – Intangibles – Goodwill and Other. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial condition and results of operations. |
Certain Significant Risks and22
Certain Significant Risks and Uncertainties (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Certain Significant Risks and Uncertainties | |
Schedule of Revenue by Source | Three months ended March 31, 2017 2016 Medicare 24 % 26 % Medicaid 54 % 53 % Insurance 12 % 11 % Private and other 10 % 10 % Total 100 % 100 % |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 2016 Numerator: Loss from continuing operations $ (83,592) $ (70,990) Less: Net loss attributable to noncontrolling interests (32,852) (27,989) Loss from continuing operations attributable to Genesis Healthcare, Inc. $ (50,740) $ (43,001) Loss from discontinued operations, net of taxes (21) (38) Net loss attributable to Genesis Healthcare, Inc. $ (50,761) $ (43,039) Denominator: Weighted-average shares outstanding for basic and diluted net loss per share 91,880 89,198 Basic and diluted net loss per common share: Loss from continuing operations attributable to Genesis Healthcare, Inc. $ (0.55) $ (0.48) Loss from discontinued operations, net of taxes (0.00) (0.00) Net loss attributable to Genesis Healthcare, Inc. $ (0.55) $ (0.48) |
Schedule of Anti-dilutive Securities (in thousands) | Three months ended March 31, 2017 2016 Net loss Net loss attributable to attributable to Genesis Anti-dilutive Genesis Anti-dilutive Healthcare, Inc. shares Healthcare, Inc. shares Exchange of restricted stock units of noncontrolling interests $ (34,215) 62,835 $ (24,002) 64,461 Employee and director unvested restricted stock units — 1,550 — — Convertible note (109) 3,000 — — |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Information | |
Summary of Segmented Revenues | Three months ended March 31, 2017 2016 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage (in thousands, except percentages) Revenues: Inpatient services: Skilled nursing facilities $ 1,169,925 84.2 % $ 1,208,433 82.0 % $ (38,508) (3.2) % Assisted/Senior living facilities 23,952 1.7 % 30,919 2.1 % (6,967) (22.5) % Administration of third party facilities 2,433 0.2 % 3,079 0.2 % (646) (21.0) % Elimination of administrative services (384) — % (375) — % (9) 2.4 % Inpatient services, net 1,195,926 86.1 % 1,242,056 84.3 % (46,130) (3.7) % Rehabilitation therapy services: Total therapy services 256,217 18.4 % 285,112 19.4 % (28,895) (10.1) % Elimination intersegment rehabilitation therapy services (100,530) (7.2) % (106,432) (7.2) % 5,902 (5.5) % Third party rehabilitation therapy services 155,687 11.2 % 178,680 12.2 % (22,993) (12.9) % Other services: Total other services 46,046 3.3 % 56,626 3.8 % (10,580) (18.7) % Elimination intersegment other services (8,527) (0.6) % (5,144) (0.3) % (3,383) 65.8 % Third party other services 37,519 2.7 % 51,482 3.5 % (13,963) (27.1) % Net revenues $ 1,389,132 100.0 % $ 1,472,218 100.0 % $ (83,086) (5.6) % |
Summaries of Condensed Consolidated Statements of Operations, Total Assets and Goodwill | Three months ended March 31, 2017 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated (In thousands) Net revenues $ 1,196,310 $ 256,217 $ 45,796 $ 250 $ (109,441) $ 1,389,132 Salaries, wages and benefits 581,423 212,752 30,319 — — 824,494 Other operating expenses 418,601 18,350 14,747 — (109,441) 342,257 General and administrative costs — — — 45,122 — 45,122 Provision for losses on accounts receivable 20,243 2,987 334 (36) — 23,528 Lease expense 35,317 7 295 481 — 36,100 Depreciation and amortization expense 55,980 3,747 167 4,475 — 64,369 Interest expense 103,317 14 9 21,414 — 124,754 Investment income — — — (1,109) — (1,109) Other loss — — — 9,034 — 9,034 Transaction costs — — — 3,025 — 3,025 Equity in net (income) loss of unconsolidated affiliates — — — (568) 434 (134) (Loss) income before income tax benefit (18,571) 18,360 (75) (81,588) (434) (82,308) Income tax expense — — — 1,284 — 1,284 (Loss) income from continuing operations $ (18,571) $ 18,360 $ (75) $ (82,872) $ (434) $ (83,592) Three months ended March 31, 2016 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated (In thousands) Net revenues $ 1,242,431 $ 285,112 $ 56,524 $ 102 $ (111,951) $ 1,472,218 Salaries, wages and benefits 588,902 240,436 38,379 — — 867,717 Other operating expenses 438,699 20,341 14,008 — (111,951) 361,097 General and administrative costs — — — 48,427 — 48,427 Provision for losses on accounts receivable 23,345 2,648 546 (46) — 26,493 Lease expense 36,296 24 530 466 — 37,316 Depreciation and amortization expense 53,839 3,120 314 4,492 — 61,765 Interest expense 108,989 14 16 26,162 — 135,181 Investment income — — — (481) — (481) Other loss — — — 12 — 12 Transaction costs — — — 1,754 — 1,754 Skilled Healthcare and other loss contingency expense — — — 1,626 — 1,626 Equity in net (income) loss of unconsolidated affiliates — — — (1,112) 349 (763) (Loss) income before income tax expense (7,639) 18,529 2,731 (81,198) (349) (67,926) Income tax expense — — — 3,064 — 3,064 (Loss) income from continuing operations $ (7,639) $ 18,529 $ 2,731 $ (84,262) $ (349) $ (70,990) The following table presents the segment assets as of March 31, 2017 compared to December 31, 2016 (in thousands): March 31, 2017 December 31, 2016 Inpatient services $ 5,096,529 $ 5,194,811 Rehabilitation services 462,178 454,723 Other services 67,755 67,348 Corporate and eliminations 62,047 62,319 Total assets $ 5,688,509 $ 5,779,201 The following table presents segment goodwill as of March 31, 2017 compared to December 31, 2016 (in thousands): March 31, 2017 December 31, 2016 Inpatient services $ 354,270 $ 355,070 Rehabilitation services 73,814 73,814 Other services 11,828 11,828 Total goodwill $ 439,912 $ 440,712 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment (in thousands) | March 31, 2017 December 31, 2016 Land, buildings and improvements $ 670,671 $ 673,092 Capital lease land, buildings and improvements 762,803 818,273 Financing obligation land, buildings and improvements 2,587,751 2,584,178 Equipment, furniture and fixtures 451,320 447,767 Construction in progress 57,971 49,859 Gross property and equipment 4,530,516 4,573,169 Less: accumulated depreciation (821,274) (807,776) Net property and equipment $ 3,709,242 $ 3,765,393 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Long-Term Debt Abstract | |
Schedule of Long-term Debt (in thousands) | March 31, 2017 December 31, 2016 Revolving credit facilities, net of debt issuance costs of $8,473 at March 31, 2017 and $9,220 at December 31, 2016 $ 360,377 $ 383,630 Term loan agreement, net of debt issuance costs of $3,590 at March 31, 2017 and $3,859 at December 31, 2016 116,300 116,174 Real estate bridge loans, net of debt issuance costs of $4,158 at March 31, 2017 and $4,400 at December 31, 2016 313,792 313,549 HUD insured loans, net of debt issuance costs of $4,753 at March 31, 2017 and $4,773 at December 31, 2016 240,534 241,570 Notes payable, net of convertible debt discount of $941 at March 31, 2017 and $990 at December 31, 2016 73,879 73,829 Mortgages and other secured debt (recourse) 13,059 13,235 Mortgages and other secured debt (non-recourse), net of debt issuance costs of $120 at March 31, 2017 and $131 at December 31, 2016 28,947 29,157 1,146,888 1,171,144 Less: Current installments of long-term debt (36,062) (24,594) Long-term debt $ 1,110,826 $ 1,146,550 |
Schedule of Borrowings and Interest Rates (dollars in thousands) | Weighted Average Revolving Credit Facilities Commitment Borrowings Interest FILO tranche $ 18,750 $ 18,750 7.65 % Tranche A-1 440,000 278,000 4.75 % Tranche A-2 50,000 41,300 4.44 % HUD tranche 35,000 30,800 4.36 % $ 543,750 $ 368,850 4.83 % |
Schedule of Maturity of Total Debt (in thousands) | Twelve months ended March 31, 2018 $ 37,797 2019 17,326 2020 369,912 2021 175,089 2022 347,661 Thereafter 277,607 Total debt maturity $ 1,225,392 |
Leases and Lease Commitments (T
Leases and Lease Commitments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Leases and Lease Commitments | |
Schedule of Future Minimum Capital and Operating Lease Payments (in thousands) | Twelve months ended March 31, Capital Leases Operating Leases 2018 $ 89,021 $ 140,380 2019 90,982 137,534 2020 93,841 135,249 2021 93,707 134,602 2022 95,736 124,998 Thereafter 3,012,633 296,225 Total future minimum lease payments 3,475,920 $ 968,988 Less amount representing interest (2,488,825) Capital lease obligation 987,095 Less current portion (1,926) Long-term capital lease obligation $ 985,169 |
Financing Obligation (Tables)
Financing Obligation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Financing Obligation | |
Schedule of Future Minimum Financing Lease Payments (in thousands) | Twelve months ended March 31, 2018 $ 271,872 2019 277,604 2020 283,939 2021 290,681 2022 293,648 Thereafter 8,059,503 Total future minimum lease payments 9,477,247 Less amount representing interest (6,586,263) Financing obligations $ 2,890,984 Less current portion (1,660) Long-term financing obligations $ 2,889,324 |
Fair Value of Financial Instr29
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value of Financial Instruments | |
Schedule of Fair Value of Assets Measured on a Recurring Basis (in thousands) | The tables below present the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016, 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 March 31, Identical Assets Observable Inputs Inputs Assets: 2017 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 51,793 $ 51,793 $ — $ — Restricted cash and equivalents 13,675 13,675 — — Restricted investments in marketable securities 144,145 144,145 — — Total $ 209,613 $ 209,613 $ — $ — 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: 2016 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 51,408 $ 51,408 $ — $ — Restricted cash and equivalents 12,052 12,052 — — Restricted investments in marketable securities 143,974 143,974 — — Total $ 207,434 $ 207,434 $ — $ — |
Schedule of Carrying Amounts and Estimated Fair Values of Long-term Debt Instruments | March 31, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value Revolving credit facilities $ 360,377 $ 360,377 $ 383,630 $ 383,630 Term loan agreement 116,300 116,300 116,174 116,174 Real estate bridge loans 313,792 313,792 313,549 313,549 HUD insured loans 240,534 226,944 241,570 226,983 Notes payable 73,879 73,879 73,829 73,829 Mortgages and other secured debt (recourse) 13,059 13,059 13,235 13,235 Mortgages and other secured debt (non-recourse) 28,947 28,947 29,157 29,157 $ 1,146,888 $ 1,133,298 $ 1,171,144 $ 1,156,557 |
Schedule of Hierarchy of Nonfinancial Assets Measured at Fair Value on a Nonrecurring Basis (in thousands) | Impairment Charges - Carrying Value Three months ended March 31, 2017 March 31, 2017 Assets: Property and equipment, net $ 3,709,242 $ — Goodwill 439,912 — Intangible assets 168,793 — Impairment Charges - Carrying Value Three months ended December 31, 2016 March 31, 2016 Assets: Property and equipment, net $ 3,765,393 $ — Goodwill 440,712 — Intangible assets 175,566 — |
Assets Held for Sale (Tables)
Assets Held for Sale (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Assets Held for Sale and Discontinued Operations | |
Summary of Balance Sheet and Income Statement Information for Disposal Group and Discontinued Operations | March 31, 2017 Current assets: Prepaid expenses $ 4,064 Long-term assets: Property and equipment, net of accumulated depreciation of $10,792 76,772 Goodwill 5,933 Total assets $ 86,769 Current liabilities: Current installments of long-term debt $ 997 Long-term liabilities: Long-term debt 68,805 Total liabilities $ 69,802 |
General Information (Details)
General Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017statefacility | Mar. 31, 2016 | Jan. 01, 2017USD ($) | |
Facility Count | |||
Concentration risk (as a percent) | 100.00% | 100.00% | |
ASU 2016-09 | |||
Recently Adopted Accounting Pronouncements | |||
Amount of impact on financial condition and results of operations due to adoption of new accounting pronouncement | $ | $ 0 | ||
Inpatient Services | |||
Facility Count | |||
Number of skilled nursing, assisted/senior living and behavioral health centers through which inpatient services are provided | facility | 493 | ||
Number of states with facilities | state | 34 | ||
Inpatient Services | Revenue | Product Concentration Risk | |||
Facility Count | |||
Concentration risk (as a percent) | 86.00% | ||
Rehabilitation therapy service | Revenue | Product Concentration Risk | |||
Facility Count | |||
Concentration risk (as a percent) | 11.00% |
Certain Significant Risks and32
Certain Significant Risks and Uncertainties (Details) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Concentration Risk | ||
Concentration risk (as a percent) | 100.00% | 100.00% |
Medicare | ||
Concentration Risk | ||
Concentration risk (as a percent) | 24.00% | 26.00% |
Medicaid | ||
Concentration Risk | ||
Concentration risk (as a percent) | 54.00% | 53.00% |
Insurance | ||
Concentration Risk | ||
Concentration risk (as a percent) | 12.00% | 11.00% |
Private and Other | ||
Concentration Risk | ||
Concentration risk (as a percent) | 10.00% | 10.00% |
Government contracts | Revenue | Medicare and Medicaid | Inpatient Services | ||
Concentration Risk | ||
Concentration risk (as a percent) | 78.00% |
Significant Transactions and 33
Significant Transactions and Events (Details) $ in Thousands | Apr. 01, 2017facility | Mar. 14, 2017USD ($)item | Feb. 01, 2017USD ($)item | Nov. 01, 2016item | Mar. 31, 2017USD ($)item | Mar. 31, 2016USD ($) |
Skilled Nursing Facility Divestitures | ||||||
Number of facilities divested | item | 6 | |||||
Number Of Facilities Sold | item | 64 | |||||
Write-down | $ 14,900 | |||||
Annual revenue | 1,389,132 | $ 1,472,218 | ||||
Pre-tax net income (loss) | $ (82,308) | $ (67,926) | ||||
Disposed by sale | Skilled Nursing Facilities [Member] | ||||||
Skilled Nursing Facility Divestitures | ||||||
Number of facilities divested | facility | 19 | |||||
Number Of Facilities Sold | item | 2 | |||||
Georgia | Disposed by sale | Skilled Nursing Facilities [Member] | ||||||
Skilled Nursing Facility Divestitures | ||||||
Number of facilities divested | item | 2 | |||||
Annual revenue | $ 10,600 | |||||
Pre-tax net income (loss) | (400) | |||||
Massachusetts | Disposed by sale | Skilled Nursing Facilities [Member] | ||||||
Skilled Nursing Facility Divestitures | ||||||
Number of facilities divested | item | 4 | |||||
Write-down | $ 14,900 | |||||
Annual rent credit | (1,200) | |||||
Annual revenue | 26,700 | |||||
Pre-tax net income (loss) | 1,200 | |||||
Other loss | Georgia | Disposed by sale | Skilled Nursing Facilities [Member] | ||||||
Skilled Nursing Facility Divestitures | ||||||
Loss recognized on sale of lease | $ (500) | |||||
Other loss | Massachusetts | Disposed by sale | Skilled Nursing Facilities [Member] | ||||||
Skilled Nursing Facility Divestitures | ||||||
Loss recognized on sale of lease | $ (1,400) |
Loss Per Share - Calculation of
Loss Per Share - Calculation of Basic (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($)class$ / sharesshares | Mar. 31, 2016USD ($)$ / 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 | $ (83,592) | $ (70,990) |
Less: Net loss attributable to noncontrolling interests | (32,852) | (27,989) |
Loss from continuing operations attributable to Genesis Healthcare, Inc. | (50,740) | (43,001) |
Loss from discontinued operations, net of taxes | (21) | (38) |
Net loss attributable to Genesis Healthcare, Inc | $ (50,761) | $ (43,039) |
Basic and diluted net loss per common share: | ||
Weighted-average shares outstanding for basic and diluted net loss per share | shares | 91,880 | 89,198 |
Loss from continuing operations attributable to Genesis Healthcare, Inc. | $ / shares | $ (0.55) | $ (0.48) |
Loss from discontinued operations, net of taxes | $ / shares | 0 | 0 |
Net loss attributable to Genesis Healthcare, Inc. | $ / shares | $ (0.55) | $ (0.48) |
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 |
Loss Per Share - Calculation 35
Loss Per Share - Calculation of diluted (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator: | ||
Loss from continuing operations | $ (83,592) | $ (70,990) |
Less: Net (loss) income attributable to noncontrolling interests | (32,852) | (27,989) |
Loss from continuing operations attributable to Genesis Healthcare, Inc. | (50,740) | (43,001) |
Income (loss) from discontinued operations, net of taxes | (21) | (38) |
Net loss attributable to Genesis Healthcare, Inc | $ (50,761) | $ (43,039) |
Loss Per Share - Antidilutive S
Loss Per Share - Antidilutive Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Restricted Stock Units (RSUs) | Noncontrolling interests | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net loss attributable to Genesis Healthcare, Inc. | $ (34,215) | $ (24,002) |
Antidilutive shares | 62,835,000 | 64,461,000 |
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 | 10,830 | |
Class C Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of units attributed to the noncontrolling interests outstanding | 62,200,511 | |
Employee And Non-employee Director | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 1,550,000 | |
Employee And Non-employee Director | Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net loss attributable to Genesis Healthcare, Inc. | $ (109) | |
Antidilutive shares | 3,000,000 |
Segment Information - Segment R
Segment Information - Segment Reporting (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($)segment | Mar. 31, 2016USD ($) | |
Segment Reporting Information | ||
Number of Reportable Segments | segment | 3 | |
Net revenues | $ 1,389,132 | $ 1,472,218 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Increase (Decrease) in Net Revenue From Prior Period | $ (83,086) | |
Salaries, wages and benefits | 824,494 | $ 867,717 |
Other operating expenses | 342,257 | 361,097 |
General and administrative costs | 45,122 | 48,427 |
Provision for losses on accounts receivable | 23,528 | 26,493 |
Lease expense | 36,100 | 37,316 |
Depreciation and amortization expense | 64,369 | 61,765 |
Interest expense | 124,754 | 135,181 |
Investment income | (1,109) | (481) |
Other loss | 9,034 | 12 |
Transaction costs | 3,025 | 1,754 |
Skilled Healthcare and other loss contingency expense | 1,626 | |
Equity in net income of unconsolidated affiliates | (134) | (763) |
(Loss) income before income tax benefit | (82,308) | (67,926) |
Income tax expense | 1,284 | 3,064 |
(Loss) income from continuing operations | $ (83,592) | $ (70,990) |
Product Concentration Risk | Sales Revenue, Net [Member] | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 100.00% | 100.00% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (5.60%) | |
Inpatient Services | ||
Segment Reporting Information | ||
Net revenues | $ 1,195,926 | $ 1,242,056 |
Increase (Decrease) in Net Revenue From Prior Period | $ (46,130) | |
Inpatient Services | Product Concentration Risk | Sales Revenue, Net [Member] | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 86.10% | 84.30% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (3.70%) | |
Inpatient Services | Skilled Nursing Facilities | ||
Segment Reporting Information | ||
Net revenues | $ 1,169,925 | $ 1,208,433 |
Increase (Decrease) in Net Revenue From Prior Period | $ (38,508) | |
Inpatient Services | Skilled Nursing Facilities | Product Concentration Risk | Sales Revenue, Net [Member] | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 84.20% | 82.00% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (3.20%) | |
Inpatient Services | Assisted Senior Living Facilities | ||
Segment Reporting Information | ||
Net revenues | $ 23,952 | $ 30,919 |
Increase (Decrease) in Net Revenue From Prior Period | $ (6,967) | |
Inpatient Services | Assisted Senior Living Facilities | Product Concentration Risk | Sales Revenue, Net [Member] | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 1.70% | 2.10% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (22.50%) | |
Inpatient Services | Administration of third party facilities | ||
Segment Reporting Information | ||
Net revenues | $ 2,433 | $ 3,079 |
Increase (Decrease) in Net Revenue From Prior Period | $ (646) | |
Inpatient Services | Administration of third party facilities | Product Concentration Risk | Sales Revenue, Net [Member] | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 0.20% | 0.20% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (21.00%) | |
Rehabilitation therapy service | ||
Segment Reporting Information | ||
Net revenues | $ 155,687 | $ 178,680 |
Increase (Decrease) in Net Revenue From Prior Period | $ (22,993) | |
Rehabilitation therapy service | Product Concentration Risk | Sales Revenue, Net [Member] | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 11.20% | 12.20% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (12.90%) | |
Rehabilitation therapy service | Therapy Services | ||
Segment Reporting Information | ||
Net revenues | $ 256,217 | $ 285,112 |
Increase (Decrease) in Net Revenue From Prior Period | $ (28,895) | |
Rehabilitation therapy service | Therapy Services | Product Concentration Risk | Sales Revenue, Net [Member] | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 18.40% | 19.40% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (10.10%) | |
Other Services | ||
Segment Reporting Information | ||
Net revenues | $ 37,519 | $ 51,482 |
Increase (Decrease) in Net Revenue From Prior Period | $ (13,963) | |
Other Services | Product Concentration Risk | Sales Revenue, Net [Member] | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 2.70% | 3.50% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (27.10%) | |
Other Services | Other Services | ||
Segment Reporting Information | ||
Net revenues | $ 46,046 | $ 56,626 |
Increase (Decrease) in Net Revenue From Prior Period | $ (10,580) | |
Other Services | Other Services | Product Concentration Risk | Sales Revenue, Net [Member] | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | 3.30% | 3.80% |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (18.70%) | |
Operating Segments | Inpatient Services | ||
Segment Reporting Information | ||
Net revenues | $ 1,196,310 | $ 1,242,431 |
Salaries, wages and benefits | 581,423 | 588,902 |
Other operating expenses | 418,601 | 438,699 |
Provision for losses on accounts receivable | 20,243 | 23,345 |
Lease expense | 35,317 | 36,296 |
Depreciation and amortization expense | 55,980 | 53,839 |
Interest expense | 103,317 | 108,989 |
(Loss) income before income tax benefit | (18,571) | (7,639) |
(Loss) income from continuing operations | (18,571) | (7,639) |
Operating Segments | Rehabilitation therapy service | ||
Segment Reporting Information | ||
Net revenues | 256,217 | 285,112 |
Salaries, wages and benefits | 212,752 | 240,436 |
Other operating expenses | 18,350 | 20,341 |
Provision for losses on accounts receivable | 2,987 | 2,648 |
Lease expense | 7 | 24 |
Depreciation and amortization expense | 3,747 | 3,120 |
Interest expense | 14 | 14 |
(Loss) income before income tax benefit | 18,360 | 18,529 |
(Loss) income from continuing operations | 18,360 | 18,529 |
Operating Segments | Other Services | ||
Segment Reporting Information | ||
Net revenues | 45,796 | 56,524 |
Salaries, wages and benefits | 30,319 | 38,379 |
Other operating expenses | 14,747 | 14,008 |
Provision for losses on accounts receivable | 334 | 546 |
Lease expense | 295 | 530 |
Depreciation and amortization expense | 167 | 314 |
Interest expense | 9 | 16 |
(Loss) income before income tax benefit | (75) | 2,731 |
(Loss) income from continuing operations | (75) | 2,731 |
Corporate, Non-Segment | ||
Segment Reporting Information | ||
Net revenues | 250 | 102 |
General and administrative costs | 45,122 | 48,427 |
Provision for losses on accounts receivable | (36) | (46) |
Lease expense | 481 | 466 |
Depreciation and amortization expense | 4,475 | 4,492 |
Interest expense | 21,414 | 26,162 |
Investment income | (1,109) | (481) |
Other loss | 9,034 | 12 |
Transaction costs | 3,025 | 1,754 |
Skilled Healthcare and other loss contingency expense | 1,626 | |
Equity in net income of unconsolidated affiliates | (568) | (1,112) |
(Loss) income before income tax benefit | (81,588) | (81,198) |
Income tax expense | 1,284 | 3,064 |
(Loss) income from continuing operations | (82,872) | (84,262) |
Elimination | ||
Segment Reporting Information | ||
Net revenues | (109,441) | (111,951) |
Other operating expenses | (109,441) | (111,951) |
Equity in net income of unconsolidated affiliates | 434 | 349 |
(Loss) income before income tax benefit | (434) | (349) |
(Loss) income from continuing operations | (434) | (349) |
Elimination | Inpatient Services | ||
Segment Reporting Information | ||
Net revenues | (384) | (375) |
Increase (Decrease) in Net Revenue From Prior Period | $ (9) | |
Elimination | Inpatient Services | Product Concentration Risk | Sales Revenue, Net [Member] | ||
Segment Reporting Information | ||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 2.40% | |
Elimination | Rehabilitation therapy service | ||
Segment Reporting Information | ||
Net revenues | $ (100,530) | $ (106,432) |
Increase (Decrease) in Net Revenue From Prior Period | $ 5,902 | |
Elimination | Rehabilitation therapy service | Product Concentration Risk | Sales Revenue, Net [Member] | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | (7.20%) | (7.20%) |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (5.50%) | |
Elimination | Other Services | ||
Segment Reporting Information | ||
Net revenues | $ (8,527) | $ (5,144) |
Increase (Decrease) in Net Revenue From Prior Period | $ (3,383) | |
Elimination | Other Services | Product Concentration Risk | Sales Revenue, Net [Member] | ||
Segment Reporting Information | ||
Concentration Risk, Percentage | (0.60%) | (0.30%) |
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 65.80% |
Segment Information - Assets by
Segment Information - Assets by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | $ 5,688,509 | $ 5,779,201 |
Goodwill included in total assets | 439,912 | 440,712 |
Hospice And Home Health Operations | ||
Segment Reporting, Asset Reconciling Item | ||
Derecognized goodwill | 800 | |
Corporate and Eliminations | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 62,047 | 62,319 |
Inpatient Services | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 5,096,529 | 5,194,811 |
Goodwill included in total assets | 354,270 | 355,070 |
Rehabilitation therapy service | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 462,178 | 454,723 |
Goodwill included in total assets | 73,814 | 73,814 |
Other Services | ||
Segment Reporting, Asset Reconciling Item | ||
Segment total assets | 67,755 | 67,348 |
Goodwill included in total assets | $ 11,828 | $ 11,828 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 4,530,516 | $ 4,573,169 |
Less accumulated depreciation | (821,274) | (807,776) |
Net property and equipment | 3,709,242 | 3,765,393 |
Capital Lease, Asset Write-down | 14,900 | |
Gross capital lease asset | 55,600 | |
Accumulated depreciation | 40,700 | |
Land, Buildings and Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 670,671 | 673,092 |
Capital lease land, buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 762,803 | 818,273 |
Financing obligation land, buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 2,587,751 | 2,584,178 |
Equipment, furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 451,320 | 447,767 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 57,971 | $ 49,859 |
Long-Term Debt - (Details)
Long-Term Debt - (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Long-term debt | ||
Total long-term debt | $ 1,146,888 | $ 1,171,144 |
Current installments of long-term debt | (36,062) | (24,594) |
Long-term debt | 1,110,826 | 1,146,550 |
New term loan agreement | ||
Long-term debt | ||
Total long-term debt | 116,300 | 116,174 |
Debt issuance costs | 4,158 | 4,400 |
Real estate bridge loan | ||
Long-term debt | ||
Total long-term debt | 313,792 | 313,549 |
Debt issuance costs | 4,753 | 4,773 |
HUD insured loans | ||
Long-term debt | ||
Total long-term debt | 240,534 | 241,570 |
Debt issuance costs | 941 | 990 |
Welltower Notes | ||
Long-term debt | ||
Total long-term debt | 73,879 | 73,829 |
Mortgages and other secured debt (recourse) | ||
Long-term debt | ||
Total long-term debt | 13,059 | 13,235 |
Mortgages and other secured debt (non-recourse) | ||
Long-term debt | ||
Total long-term debt | 28,947 | 29,157 |
Debt issuance costs | 120 | 131 |
Revolving Credit Facility | ||
Long-term debt | ||
Total long-term debt | 360,377 | 383,630 |
Original issue discount | 8,473 | 9,220 |
Debt issuance costs | $ 3,590 | $ 3,859 |
Long-Term Debt - Revolving Cred
Long-Term Debt - Revolving Credit Facilities (Details) $ in Thousands | Jul. 29, 2016 | Mar. 31, 2017USD ($)item | Dec. 31, 2020 | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term debt | |||||
Revolving credit facility | $ 368,850 | ||||
Total borrowing base capacity | $ 543,750 | ||||
Weighted Average Interest Rate | 4.83% | ||||
Forecast | Minimum | |||||
Long-term debt | |||||
Leverage ratio | 6.50% | ||||
Forecast | Maximum | |||||
Long-term debt | |||||
Leverage ratio | 7.25% | ||||
Tranche A-1 | |||||
Long-term debt | |||||
Revolving credit facility | $ 278,000 | ||||
Total borrowing base capacity | $ 440,000 | ||||
Weighted Average Interest Rate | 4.75% | ||||
Tranche A-1 | LIBOR | Minimum | |||||
Long-term debt | |||||
Basis spread on variable rate | 3.00% | ||||
Tranche A-1 | LIBOR | Maximum | |||||
Long-term debt | |||||
Basis spread on variable rate | 3.50% | ||||
Tranche A-2 | |||||
Long-term debt | |||||
Revolving credit facility | $ 41,300 | ||||
Total borrowing base capacity | $ 50,000 | ||||
Weighted Average Interest Rate | 4.44% | ||||
Tranche A-2 | LIBOR | Minimum | |||||
Long-term debt | |||||
Basis spread on variable rate | 3.00% | ||||
Tranche A-2 | LIBOR | Maximum | |||||
Long-term debt | |||||
Basis spread on variable rate | 3.50% | ||||
FILO Tranche | |||||
Long-term debt | |||||
Revolving credit facility | $ 18,750 | ||||
Total borrowing base capacity | $ 18,750 | ||||
Weighted Average Interest Rate | 7.65% | ||||
FILO Tranche | LIBOR | |||||
Long-term debt | |||||
Basis spread on variable rate | 6.00% | ||||
HUD Tranche | |||||
Long-term debt | |||||
Revolving credit facility | $ 30,800 | ||||
Total borrowing base capacity | $ 35,000 | ||||
Weighted Average Interest Rate | 4.36% | ||||
HUD Tranche | LIBOR | Minimum | |||||
Long-term debt | |||||
Basis spread on variable rate | 1.50% | 2.50% | |||
HUD Tranche | LIBOR | Maximum | |||||
Long-term debt | |||||
Basis spread on variable rate | 2.00% | 3.00% | |||
Revolving Credit Facility | |||||
Long-term debt | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 550,000 | ||||
Debt Instrument Number of Tranches | item | 4 | ||||
Revolving credit facility | $ 368,900 | ||||
Total borrowing base capacity | 501,500 | ||||
Outstanding Letters of Credit | 59,800 | ||||
Available borrowing capacity under the revolving credit facilities | $ 72,800 | ||||
Revolving Credit Facility | Minimum | |||||
Long-term debt | |||||
Commitment fee rate (as percentage) | 0.375% | ||||
Revolving Credit Facility | Maximum | |||||
Long-term debt | |||||
Commitment fee rate (as percentage) | 0.50% | ||||
Revolving Credit Facility | Federal Funds | |||||
Long-term debt | |||||
Basis spread on variable rate | 3.00% | ||||
Revolving Credit Facility Amendment | Maximum | |||||
Long-term debt | |||||
Leverage ratio | 6.00% | 6.00% | |||
Revolving Credit Facility Amendment | Forecast | |||||
Long-term debt | |||||
Leverage ratio | 4.00% | ||||
Revolving Credit Facility Amendment | Tranche A-1 | Base Rate | Minimum | |||||
Long-term debt | |||||
Basis spread on variable rate | 2.00% | ||||
Revolving Credit Facility Amendment | Tranche A-1 | Base Rate | Maximum | |||||
Long-term debt | |||||
Basis spread on variable rate | 2.50% | ||||
Revolving Credit Facility Amendment | Tranche A-2 | Base Rate | Minimum | |||||
Long-term debt | |||||
Basis spread on variable rate | 2.00% | ||||
Revolving Credit Facility Amendment | Tranche A-2 | Base Rate | Maximum | |||||
Long-term debt | |||||
Basis spread on variable rate | 2.50% | ||||
Revolving Credit Facility Amendment | FILO Tranche | Base Rate | |||||
Long-term debt | |||||
Basis spread on variable rate | 5.00% |
Long-Term Debt - Term Loan Faci
Long-Term Debt - Term Loan Facility and New Term Loan Agreement (Details) $ in Millions | Jul. 29, 2016USD ($)item | Mar. 31, 2017USD ($) | Dec. 31, 2020 | Dec. 31, 2017 |
Minimum | Forecast | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Leverage ratio | 6.50% | |||
Maximum | Forecast | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Leverage ratio | 7.25% | |||
New Term Loan Facility | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Outstanding principal balance under term loan facility | $ 119.9 | |||
Number of maintenance covenants | item | 4 | |||
New Term Loan Facility | Forecast | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Leverage ratio | 4.00% | |||
New Term Loan Facility | Maximum | ||||
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 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 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 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 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% |
Long-Term Debt - Real Estate Br
Long-Term Debt - Real Estate Bridge Loans (Details) $ in Millions | Jan. 01, 2018 | Oct. 01, 2016item | Apr. 01, 2016USD ($)facility | May 23, 2016 | Mar. 31, 2017USD ($)loanitem | Mar. 31, 2016item | Dec. 31, 2015facility | Dec. 31, 2016USD ($) |
Long-term debt | ||||||||
Number of facilities acquired | facility | 1 | |||||||
Welltower Bridge Loans | ||||||||
Long-term debt | ||||||||
Number of facilities pledged | 45 | |||||||
Principal balance outstanding | $ | $ 9 | $ 317 | ||||||
Number of facilities acquired | facility | 87 | |||||||
Number of separate bridge loan agreements | 4 | |||||||
Fixed interest rate | 10.00% | |||||||
Annual rate of increase to fixed interest rate | 0.25% | |||||||
Number of facilities whose operators have receivables secured under second lien | 27 | |||||||
Number of bridge loans associated with facilities held for sale | loan | 1 | |||||||
Number of facilities classified as held for sale | 3 | |||||||
Other Real Estate Bridge Loans | ||||||||
Long-term debt | ||||||||
Aggregate principal amount | $ | $ 9.9 | |||||||
Term of debt | 3 years | |||||||
Basis spread on variable rate | 4.00% | |||||||
Effective interest rate | 5.00% | |||||||
Principal balance outstanding | $ | $ 9.9 |
Long-Term Debt - HUD Insured Lo
Long-Term Debt - HUD Insured Loans (Details) $ in Millions | Mar. 31, 2017USD ($)facility | Mar. 31, 2017USD ($)facility | Dec. 31, 2016facility |
Long-term debt | |||
Weighted Average Interest Rate | 4.83% | 4.83% | |
HUD insured loans | |||
Long-term debt | |||
Debt instrument average remaining term (in years) | 31 years | ||
Weighted Average Interest Rate | 3.50% | 3.50% | |
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 | |||
Long-term debt | |||
Term of debt | 30 years | ||
Fixed interest rate | 3.00% | 3.00% | |
HUD insured loans | Maximum | |||
Long-term debt | |||
Term of debt | 35 years | ||
Fixed interest rate | 4.60% | 4.60% | |
Prepaid Expenses and Other Current Assets [Member] | HUD insured loans | |||
Long-term debt | |||
Escrow reserve funds | $ 22 | $ 22 | |
Skilled Nursing Facilities | HUD insured loans | |||
Long-term debt | |||
Number of debt instruments insured by HUD | facility | 39 | ||
Number of debt instruments with a debt premium | facility | 10 | ||
Number of facilities classified as held for sale | facility | 13 | 13 | 13 |
Principal balance outstanding | $ 308.4 | $ 308.4 | |
Debt premium | 13.9 | 13.9 | |
Skilled Nursing Facilities | Disposal Group, Held-for-sale, Not Discontinued Operations | HUD insured loans | |||
Long-term debt | |||
Principal balance outstanding | $ 63.1 | $ 63.1 |
Long-Term Debt - Notes Payable
Long-Term Debt - Notes Payable (Details) $ in Millions | Dec. 23, 2016USD ($)loanitem | Nov. 01, 2016USD ($)item | Mar. 31, 2017USD ($) |
Long-term debt | |||
Number Of Facilities Sold | item | 64 | ||
Welltower Inc | |||
Long-term debt | |||
Number Of Facilities Sold | item | 28 | ||
Note Payable Due October 30, 2020 | Welltower Inc | |||
Long-term debt | |||
Cash interest rate | 3.00% | ||
Paid-in-kind interest rate | 7.00% | ||
Principal balance outstanding | $ 51.2 | $ 51.2 | |
Welltower Notes Due December 2021 [Member] | |||
Long-term debt | |||
Number of notes issued | loan | 2 | ||
Debt Instrument, Face Amount | $ 23.7 | ||
Note Payable Due December 15 2021 | |||
Long-term debt | |||
Cash interest rate | 3.00% | ||
Paid-in-kind interest rate | 7.00% | ||
Debt Instrument, Face Amount | $ 11.7 | ||
Principal balance outstanding | 11.7 | ||
Convertible Note Payable Due December 15 2021 | |||
Long-term debt | |||
Cash interest rate | 3.00% | ||
Paid-in-kind interest rate | 3.00% | ||
Debt Instrument, Face Amount | $ 12 | ||
Principal balance outstanding | $ 12 | ||
Number of shares into which the debt instrument may be converted | item | 3,000,000 |
Long-Term Debt - Other (Details
Long-Term Debt - Other (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($)loan | |
Long-term debt | |
Weighted Average Interest Rate | 4.83% |
Mortgages and other secured debt (non-recourse) | |
Long-term debt | |
Weighted Average Interest Rate | 4.40% |
Debt premium available to offset non-recourse loans | $ 1.7 |
Number of debt instruments with a debt premium | loan | 1 |
Increase in current debt due to reclassification of non-recourse loan | $ 11.5 |
Long-term debt reclassified to current | $ 11.5 |
Minimum | Mortgages and other secured debt (recourse) | |
Long-term debt | |
Effective interest rate | 2.70% |
Minimum | Mortgages and other secured debt (non-recourse) | |
Long-term debt | |
Effective interest rate | 2.50% |
Maximum | Mortgages and other secured debt (recourse) | |
Long-term debt | |
Effective interest rate | 6.00% |
Maximum | Mortgages and other secured debt (non-recourse) | |
Long-term debt | |
Effective interest rate | 22.20% |
Long-Term Debt - Debt Covenants
Long-Term Debt - Debt Covenants (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2017 | Mar. 31, 2017 | |
Twelve months ended March 31, | |||
2,017 | $ 37,797 | ||
2,018 | 17,326 | ||
2,019 | 369,912 | ||
2,020 | 175,089 | ||
2,021 | 347,661 | ||
Thereafter | 277,607 | ||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||
Total long-term debt | $ 1,225,392 | ||
Forecast | Minimum | |||
Long-term debt | |||
Leverage ratio | 6.50% | ||
Forecast | Maximum | |||
Long-term debt | |||
Leverage ratio | 7.25% |
Lease and Lease Commitments - F
Lease and Lease Commitments - Future Minimum Capital and Operating Lease Payments - 10Q (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Capital Leases, Future Minimum Payments Due, Rolling Maturity | ||
2,017 | $ 89,021 | |
2,018 | 90,982 | |
2,019 | 93,841 | |
2,020 | 93,707 | |
2,021 | 95,736 | |
Thereafter | 3,012,633 | |
Total future minimum lease payments | 3,475,920 | |
Less amount representing interest | (2,488,825) | |
Capital lease obligation | 987,095 | |
Less current portion | (1,926) | $ (1,886) |
Capital lease obligations | 985,169 | $ 997,340 |
Operating Leases, Future Minimum Payments Due, Rolling Maturity | ||
2,017 | 140,380 | |
2,018 | 137,534 | |
2,019 | 135,249 | |
2,020 | 134,602 | |
2,021 | 124,998 | |
Thereafter | 296,225 | |
Total future minimum lease payments | $ 968,988 |
Lease and Lease Commitments - C
Lease and Lease Commitments - Capital Lease Rates and Deferred Balances (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017USD ($)leasefacility | Dec. 31, 2020 | Dec. 31, 2017 | Dec. 31, 2016USD ($) | |
Weighted average interest rate | 10.00% | |||
Number of leases with unmet financial covenants | lease | 3 | |||
Number of facilities under leases with unmet financial covenants | facility | 26 | |||
Identifiable Intangible Assets [Member] | ||||
Net favorable leases | $ 41.1 | $ 43 | ||
Other Noncurrent Liabilities [Member] | ||||
Net unfavorable leases | 27.4 | 28.8 | ||
Deferred straight-line rent balances included in other long-term liabilities | $ 32 | $ 31.6 | ||
Maximum | ||||
Capital lease imputed interest rate (as a percent) | 12.80% | |||
Maximum | Forecast | ||||
Leverage ratio | 7.25% | |||
Minimum | ||||
Capital lease imputed interest rate (as a percent) | 3.50% | |||
Minimum | Forecast | ||||
Leverage ratio | 6.50% | |||
Welltower Master Lease [Member] | Maximum | Forecast | ||||
Leverage ratio | 7.25% | |||
Welltower Master Lease [Member] | Minimum | Forecast | ||||
Leverage ratio | 6.50% |
Financing Obligation (Details)
Financing Obligation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Present Value of Future Minimum Lease Payments, Sale Leaseback Transactions, Rolling Maturity | ||
2,017 | $ 271,872 | |
2,018 | 277,604 | |
2,019 | 283,939 | |
2,020 | 290,681 | |
2,021 | 293,648 | |
Thereafter | 8,059,503 | |
Total future minimum lease payments | 9,477,247 | |
Less amount representing interest | (6,586,263) | |
Financing obligation | 2,890,984 | |
Less current portion | (1,660) | $ (1,613) |
Long-term financing obligation | $ 2,889,324 | $ 2,867,534 |
Weighted average interest rate | 10.60% | |
Minimum | ||
Sale Leaseback Transaction [Line Items] | ||
Financing obligation, imputed interest rate (as a percent) | 1.20% | |
Maximum | ||
Sale Leaseback Transaction [Line Items] | ||
Financing obligation, imputed interest rate (as a percent) | 27.80% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Sep. 30, 2016 | Mar. 31, 2016 | |
Income tax expense | $ 1,284 | $ 3,064 | |
Effective tax rate | (1.60%) | (4.50%) | |
Release of FIN48 reserve | $ 28,200 | ||
Net operating loss carryforwards | $ 0 | ||
Goodwill Tax Deductible Amount Tax Basis Step Up | $ 10,900 | ||
FC-GEN Operations Investment, LLC | |||
Percentage of voting interests acquired | 59.70% | ||
Tax receivable agreement, potential payment as percentage of cash savings | 90.00% | ||
Class A Common Stock | |||
Conversion Of Common Units Number Converted | 1,648,869 | 0 |
Commitments and Contingencies -
Commitments and Contingencies - Self Insurance Risks (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
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 | $ 8.9 | $ 8.9 | |
Provision for general and professional liability | 34.5 | $ 34.9 | |
Reserve for general and professional liability | 397.7 | 392.1 | |
Provision for workers' compensation | 17.2 | $ 18.1 | |
Reserve for workers' compensation risks | 227.3 | 226 | |
Health insurance reserve | $ 19.9 | $ 19.6 |
Commitments and Contingencies53
Commitments and Contingencies - Litigation (Details) $ in Millions | Aug. 06, 2014plaintiff | Jul. 31, 2016item | Mar. 31, 2017USD ($)item | Dec. 31, 2016USD ($) |
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 | 4 | |||
Litigation settlement amount | $ | $ 52.7 | $ 52.7 | ||
Loss contingency settlement term | 5 years | |||
SunDance Part B Therapy Matter | ||||
Loss Contingencies | ||||
Number of subsidiary agencies outside of Georgia that are part of the Qui Tam proceeding | 0 |
Fair Value of Financial Instr54
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Revolving credit facility | $ 368,850 | |
Carrying value | 1,146,888 | $ 1,171,144 |
New term loan agreement | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Carrying value | 116,300 | 116,174 |
Skilled Real Estate Bridge Loan | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Carrying value | 313,792 | 313,549 |
HUD insured loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Carrying value | 240,534 | 241,570 |
Welltower Notes | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Carrying value | 73,879 | 73,829 |
Mortgages and other secured debt (recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Carrying value | 13,059 | 13,235 |
Mortgages and other secured debt (non-recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Carrying value | 28,947 | 29,157 |
Revolving Credit Facility | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Revolving credit facility | 368,900 | |
Carrying value | 360,377 | 383,630 |
Original issue discount | 8,473 | 9,220 |
Level 2 | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 1,133,298 | 1,156,557 |
Level 2 | New term loan agreement | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 116,300 | 116,174 |
Level 2 | Skilled Real Estate Bridge Loan | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 313,792 | 313,549 |
Level 2 | HUD insured loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 226,944 | 226,983 |
Level 2 | Welltower Notes | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 73,879 | 73,829 |
Level 2 | Mortgages and other secured debt (recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 13,059 | 13,235 |
Level 2 | Mortgages and other secured debt (non-recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 28,947 | 29,157 |
Level 2 | Revolving Credit Facility | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 360,377 | 383,630 |
Fair Value, Measurements, Recurring | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash and equivalents | 51,793 | 51,408 |
Restricted cash and equivalents | 13,675 | 12,052 |
Restricted investments in marketable securities | 144,145 | 143,974 |
Assets, Fair Value Disclosure, Total | 209,613 | 207,434 |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash and equivalents | 51,793 | 51,408 |
Restricted cash and equivalents | 13,675 | 12,052 |
Restricted investments in marketable securities | 144,145 | 143,974 |
Assets, Fair Value Disclosure, Total | 209,613 | 207,434 |
Fair Value, Measurements, Nonrecurring [Member] | Level 3 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Property and equipment, net | 3,709,242 | 3,765,393 |
Goodwill | 439,912 | 440,712 |
Intangible assets | $ 168,793 | $ 175,566 |
Assets Held for Sale (Details)
Assets Held for Sale (Details) $ in Thousands | Nov. 01, 2016item | Mar. 31, 2017USD ($)facility |
Number of facilities sold | item | 64 | |
Inpatient Services | Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Number of facilities classified as held for sale | facility | 16 | |
Assets and Liabilities of Disposal Group | ||
Prepaid expenses | $ 4,064 | |
Property and equipment, net of accumulated depreciation of $10,792 | 76,772 | |
Accumulated depreciation | 10,792 | |
Goodwill | 5,933 | |
Total Assets | 86,769 | |
Current installments of long-term debt | 997 | |
Long-term debt | 68,805 | |
Total Liabilities | $ 69,802 | |
Inpatient Services | Kansas Missouri Nebraska and Iowa | Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Number of facilities sold | facility | 18 | |
Number of owned facilities | facility | 16 | |
Number of facilities under lease | facility | 2 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | Apr. 01, 2017USD ($)facility | Mar. 14, 2017item | Nov. 01, 2016item | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) |
Subsequent Event [Line Items] | |||||
Number Of Facilities Sold | item | 64 | ||||
Annual revenue | $ 1,389,132 | $ 1,472,218 | |||
Pre-tax net income (loss) | (82,308) | $ (67,926) | |||
Skilled Nursing Facilities [Member] | Disposed by sale | |||||
Subsequent Event [Line Items] | |||||
Number Of Facilities Sold | item | 2 | ||||
Skilled Nursing Facilities [Member] | Disposed by sale | Kansas Missouri Nebraska And Iowa | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Number Of Facilities Sold | facility | 18 | ||||
Number of owned facilities | facility | 16 | ||||
Number of facilities under lease | facility | 2 | ||||
Annual revenue | $ 110,100 | ||||
Pre-tax net income (loss) | (10,700) | ||||
Total assets | 91,600 | ||||
Cash proceeds | $ 80,000 | ||||
Skilled Nursing Facilities [Member] | Disposed by sale | Tennessee | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Number Of Facilities Sold | facility | 1 | ||||
Annual revenue | $ 7,400 | ||||
Pre-tax net income (loss) | $ 500 | ||||
Other loss | Skilled Nursing Facilities [Member] | Disposed by sale | Kansas Missouri Nebraska And Iowa | |||||
Subsequent Event [Line Items] | |||||
Loss recognized | (7,200) | ||||
Other loss | Skilled Nursing Facilities [Member] | Disposed by sale | Tennessee | |||||
Subsequent Event [Line Items] | |||||
Loss recognized on sale of lease | $ (300) |