Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 15, 2018 | Jun. 30, 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-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 80.8 | ||
Class A Common Stock | |||
Document and Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 97,224,842 | ||
Class B Common Stock | |||
Document and Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 744,396 | ||
Class C Common Stock | |||
Document and Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 61,477,303 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 54,525 | $ 51,408 |
Restricted cash and investments in marketable securities | 37,128 | 43,555 |
Accounts receivable, net of allowances for doubtful accounts of $313,357 and $218,383 at December 31, 2017 and December 31, 2016, respectively | 724,138 | 832,109 |
Prepaid expenses | 74,368 | 64,218 |
Other current assets | 49,748 | 63,641 |
Assets held for sale, current | 4,056 | |
Total current assets | 939,907 | 1,058,987 |
Property and equipment, net of accumulated depreciation of $939,155 and $807,776 at December 31, 2017 and December 31, 2016, respectively | 3,413,599 | 3,765,393 |
Restricted cash and investments in marketable securities | 93,101 | 112,471 |
Other long-term assets | 109,060 | 137,602 |
Deferred income taxes | 3,580 | 6,107 |
Identifiable intangible assets, net of accumulated amortization of $88,336 and $91,155 at December 31, 2017 and December 31, 2016, respectively | 142,976 | 175,566 |
Goodwill | 85,642 | 440,712 |
Assets held for sale, noncurrent | 82,363 | |
Total assets | 4,787,865 | 5,779,201 |
Current liabilities: | ||
Current installments of long-term debt | 26,962 | 24,594 |
Capital lease obligation | 2,511 | 1,886 |
Financing obligations | 1,878 | 1,613 |
Accounts payable | 285,637 | 258,616 |
Accrued expenses | 233,856 | 215,457 |
Accrued compensation | 167,368 | 181,841 |
Self-insurance reserves | 180,982 | 172,565 |
Current portion of liabilities held for sale | 988 | |
Total current liabilities | 899,194 | 857,560 |
Long-term liabilities: | ||
Long-term debt | 1,050,337 | 1,146,550 |
Capital lease obligations | 1,025,355 | 997,340 |
Financing obligations | 2,929,483 | 2,867,534 |
Deferred income taxes | 7,584 | 22,354 |
Self-insurance reserves | 436,560 | 445,559 |
Liabilities held for sale | 69,057 | |
Other long-term liabilities | 119,484 | 103,435 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Additional paid-in-capital | 290,573 | 305,358 |
Accumulated deficit | (1,374,597) | (795,615) |
Accumulated other comprehensive loss | (362) | (221) |
Total stockholders’ deficit before noncontrolling interests | (1,084,227) | (490,323) |
Noncontrolling interests | (595,905) | (239,865) |
Total stockholders' deficit | (1,680,132) | (730,188) |
Total liabilities and stockholders’ deficit | 4,787,865 | 5,779,201 |
Class A Common Stock | ||
Stockholders’ equity: | ||
Common stock | 97 | 75 |
Class B Common Stock | ||
Stockholders’ equity: | ||
Common stock | 1 | 16 |
Class C Common Stock | ||
Stockholders’ equity: | ||
Common stock | $ 61 | $ 64 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Allowance for doubtful accounts | $ 313,357 | $ 218,383 |
Other assets: | ||
Accumulated depreciation on property and equipment | 939,155 | 807,776 |
Accumulated amortization on intangible assets | $ 88,336 | $ 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) | 97,100,738 | 75,187,388 |
Common stock, shares, outstanding (in shares) | 97,100,738 | 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) | 744,396 | 15,495,019 |
Common stock, shares, outstanding (in shares) | 744,396 | 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) | 61,561,393 | 63,849,380 |
Common stock, shares, outstanding (in shares) | 61,561,393 | 63,849,380 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||
Net revenues | $ 1,327,880 | $ 1,315,452 | $ 1,341,276 | $ 1,389,132 | $ 1,402,860 | $ 1,418,994 | $ 1,438,358 | $ 1,472,218 | $ 5,373,740 | $ 5,732,430 | $ 5,619,224 |
Salaries, wages and benefits | 3,036,868 | 3,369,713 | 3,289,820 | ||||||||
Other operating expenses | 1,484,394 | 1,413,639 | 1,358,983 | ||||||||
General and administrative costs | 170,029 | 186,062 | 175,889 | ||||||||
Provision for losses on accounts receivable | 96,409 | 107,815 | 100,521 | ||||||||
Lease expense | 147,525 | 146,244 | 150,276 | ||||||||
Depreciation and amortization expense | 255,786 | 254,459 | 237,617 | ||||||||
Interest expense | 499,382 | 528,544 | 507,809 | ||||||||
(Gain) loss on early extinguishment of debt | (6,566) | 16,290 | 130 | ||||||||
Investment income | (5,328) | (3,018) | (1,677) | ||||||||
Other loss (income) | 8,473 | (207,070) | (1,400) | ||||||||
Transaction costs | 14,325 | 7,928 | 96,374 | ||||||||
Customer receivership and other related charges | 55,000 | 36,000 | 90,864 | ||||||||
Long-lived asset impairments | 28,000 | 163,000 | 35,000 | 191,375 | 32,110 | 26,768 | |||||
Goodwill and identifiable intangible asset impairments | 360,000 | 360,046 | 3,321 | 1,778 | |||||||
Skilled Healthcare and other loss contingency expense | 15,192 | 31,500 | |||||||||
Equity in net income of unconsolidated affiliates | (243) | (3,286) | (2,139) | ||||||||
Loss before income tax (benefit) expense | (969,599) | (135,513) | (353,025) | ||||||||
Income tax (benefit) expense | (10,427) | (17,435) | 172,524 | ||||||||
Loss from continuing operations | (89,279) | (373,822) | (65,109) | (50,740) | 22,429 | (20,434) | (23,034) | (43,001) | (959,172) | (118,078) | (525,549) |
(Loss) income from discontinued operations, net of taxes | 38 | (2) | (47) | (21) | 28 | (24) | 61 | (38) | (32) | 27 | (1,219) |
Net loss | (959,204) | (118,051) | (526,768) | ||||||||
Less net loss attributable to noncontrolling interests | 380,222 | 54,038 | 100,573 | ||||||||
Net loss attributable to Genesis Healthcare, Inc. | $ (89,241) | $ (373,824) | $ (65,156) | $ (50,761) | $ 22,457 | $ (20,458) | $ (22,973) | $ (43,039) | $ (578,982) | $ (64,013) | $ (426,195) |
Basic: | |||||||||||
Weighted Average Number of Shares Outstanding, Basic | 90,636 | 90,226 | 89,421 | 89,198 | 94,217 | 89,873 | 85,755 | ||||
Net loss per common share: | |||||||||||
Loss from continuing operations attributable to Genesis Healthcare, Inc | $ (6.15) | $ (0.71) | $ (4.96) | ||||||||
(Loss) income from discontinued operations, net of taxes | 0 | 0 | (0.01) | ||||||||
Net loss attributable to Genesis Healthcare, Inc. | $ 0.25 | $ (0.23) | $ (0.26) | $ (0.48) | $ (6.15) | $ (0.71) | $ (4.97) | ||||
Diluted: | |||||||||||
Weighted Average Number of Shares Outstanding, Diluted | 92,337 | 90,226 | 89,421 | 89,198 | 94,217 | 152,532 | 85,755 | ||||
Net loss per common share. | |||||||||||
Loss from continuing operations attributable to Genesis Healthcare, Inc. | $ (6.15) | $ (0.82) | $ (4.96) | ||||||||
Loss (income) from discontinued operations, net of taxes | 0 | 0 | (0.01) | ||||||||
Net loss attributable to Genesis Healthcare, Inc. | $ 0.24 | $ (0.23) | $ (0.26) | $ (0.48) | $ (6.15) | $ (0.82) | $ (4.97) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Net loss | $ (959,204) | $ (118,051) | $ (526,768) |
Net unrealized loss on marketable securities, net of tax | (209) | (5) | (891) |
Comprehensive loss | (959,413) | (118,056) | (527,659) |
Less: comprehensive loss attributable to noncontrolling interests | 380,290 | 54,040 | 100,885 |
Comprehensive loss attributable to Genesis Healthcare, Inc. | $ (579,123) | $ (64,016) | $ (426,774) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Common StockClass A Common Stock | Common StockClass B Common Stock | Common StockClass C Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss) income | Stockholders' deficit | Noncontrolling interests | Total |
Balance, beginning of period at Dec. 31, 2014 | $ 50 | $ 143,492 | $ (603,254) | $ 515 | $ (459,197) | $ 1,707 | $ (457,490) | ||
Balance, beginning of period (in shares) at Dec. 31, 2014 | 49,865 | ||||||||
Increase (decrease) in stockholders' deficit | |||||||||
Combination share conversion | $ 24 | $ 16 | $ 64 | 130,530 | 297,847 | (154) | 428,327 | (80,186) | 348,141 |
Combination share conversion (in shares) | 23,723 | 15,512 | 64,449 | ||||||
Comprehensive (loss) income: | |||||||||
Net loss | (426,195) | (426,195) | (100,573) | (526,768) | |||||
Net unrealized loss on marketable securities, net of tax | (579) | (579) | (312) | (891) | |||||
Share-based compensation | 28,472 | 28,472 | 28,472 | ||||||
Issuance of common stock | 24 | 24 | 24 | ||||||
Issuance of common stock, shares | 6 | ||||||||
Acquisition of noncontrolling interest | (7,159) | (7,159) | 7,159 | ||||||
Distributions to noncontrolling interests | (10,875) | (10,875) | |||||||
Balance, end of period at Dec. 31, 2015 | $ 74 | $ 16 | $ 64 | 295,359 | (731,602) | (218) | (436,307) | (183,080) | (619,387) |
Balance, end of period (in shares) at Dec. 31, 2015 | 73,594 | 15,512 | 64,449 | ||||||
Comprehensive (loss) income: | |||||||||
Net loss | (64,013) | (64,013) | (54,038) | (118,051) | |||||
Net unrealized loss on marketable securities, net of tax | (3) | (3) | (2) | (5) | |||||
Share-based compensation | 7,015 | 7,015 | 7,015 | ||||||
Issuance of common stock | $ 1 | 1,994 | 1,995 | 1,995 | |||||
Issuance of common stock, shares | 976 | ||||||||
Conversion of common stock among classes (in shares) | 617 | (17) | (600) | ||||||
Distributions to noncontrolling interests | (2,745) | (2,745) | |||||||
Issuance of convertible debt | 990 | 990 | 990 | ||||||
Balance, end of period at Dec. 31, 2016 | $ 75 | $ 16 | $ 64 | 305,358 | (795,615) | (221) | (490,323) | (239,865) | (730,188) |
Balance, end of period (in shares) at Dec. 31, 2016 | 75,187 | 15,495 | 63,849 | ||||||
Comprehensive (loss) income: | |||||||||
Net loss | (578,982) | (578,982) | (380,222) | (959,204) | |||||
Net unrealized loss on marketable securities, net of tax | (141) | (141) | (68) | (209) | |||||
Share-based compensation | 9,621 | 9,621 | 9,621 | ||||||
Issuance of common stock | $ 2 | (30) | (28) | (28) | |||||
Issuance of common stock, shares | 1,874 | ||||||||
Conversion of common stock among classes | $ 17 | $ (15) | $ (3) | (27,163) | (27,164) | 27,164 | |||
Conversion of common stock among classes (in shares) | 17,040 | (14,751) | (2,288) | ||||||
Distributions to noncontrolling interests | (2,914) | (2,914) | |||||||
Conversion of convertible debt | $ 3 | 2,787 | 2,790 | 2,790 | |||||
Conversion of convertible debt (in shares) | 3,000 | ||||||||
Balance, end of period at Dec. 31, 2017 | $ 97 | $ 1 | $ 61 | $ 290,573 | $ (1,374,597) | $ (362) | $ (1,084,227) | $ (595,905) | $ (1,680,132) |
Balance, end of period (in shares) at Dec. 31, 2017 | 97,101 | 744 | 61,561 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net loss | $ (959,204) | $ (118,051) | $ (526,768) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Non-cash interest and leasing arrangements, net | 77,974 | 90,227 | 93,800 |
Other non-cash charges and (gains), net | 8,473 | (202,070) | (1,063) |
Share based compensation | 9,621 | 8,414 | 28,472 |
Depreciation and amortization | 255,786 | 254,459 | 237,763 |
Provision for losses on accounts receivable | 96,409 | 107,815 | 100,521 |
Equity in net income of unconsolidated affiliates | (243) | (3,286) | (2,139) |
Provision for deferred taxes | (12,128) | 7,142 | 164,750 |
Customer receivership and other related charges | 90,864 | ||
Long-lived asset impairments | 191,375 | 32,110 | 26,768 |
Goodwill and identifiable intangible asset impairments | 360,046 | 3,321 | 1,778 |
(Gain) loss on early extinguishment of debt | (6,566) | 13,174 | 130 |
Changes in assets and liabilities: | |||
Accounts receivable | (86,256) | (170,126) | (144,624) |
Accounts payable and other accrued expenses and other | 94,304 | 45,232 | 29,230 |
Net cash provided by operating activities | 120,455 | 68,361 | 8,618 |
Cash Flows from Investing Activities | |||
Capital expenditures | (64,106) | (93,118) | (85,723) |
Purchases of marketable securities | (48,595) | (52,554) | (83,916) |
Proceeds on maturity or sale of marketable securities | 69,800 | 72,767 | 41,314 |
Net change in restricted cash and equivalents | 6,154 | 22,183 | 10,269 |
Sale of investment in joint venture | 242 | 6,460 | 26,358 |
Purchases of inpatient assets, net of cash acquired | (108,299) | (167,272) | |
Sales of assets | 90,583 | 150,675 | 3,738 |
Restricted deposits | 364 | (13,473) | |
Investments in joint venture | (100) | (536) | (392) |
Other, net | 1,149 | 3,107 | 2,140 |
Net cash provided by (used in) investing activities | 55,491 | (12,788) | (253,484) |
Cash flows from financing activities: | |||
Borrowings under revolving credit facilities | 599,000 | 817,000 | 864,500 |
Repayments under revolving credit facilities | (678,650) | (787,150) | (756,000) |
Proceeds from issuance of long-term debt | 37,810 | 416,161 | 495,201 |
Proceeds from tenant improvement draws under lease arrangements | 6,084 | 5,651 | 2,920 |
Repayment of long-term debt | (128,307) | (500,101) | (357,716) |
Debt issuance costs | (5,852) | (14,524) | (19,193) |
Distributions to noncontrolling interests and stockholders | (2,914) | (2,745) | (10,851) |
Net cash (used in) provided by financing activities | (172,829) | (65,708) | 218,861 |
Net increase (decrease) in cash and cash equivalents | 3,117 | (10,135) | (26,005) |
Cash and cash equivalents: | |||
Beginning of period | 51,408 | 61,543 | 87,548 |
End of period | 54,525 | 51,408 | 61,543 |
Supplemental cash flow information: | |||
Interest paid | 435,510 | 445,959 | 416,163 |
Net taxes (refunded) paid | (861) | (10,270) | 20,893 |
Non-cash investing and financing activities: | |||
Capital leases obligations incurred | 5,350 | 56,766 | |
Capital lease obligations reduced | (70,997) | ||
Financing obligations reduced | (257,101) | ||
Financing obligations | $ 24,046 | 83,989 | |
Assumption of long-term debt, net of reclass | 4,772 | $ 436,887 | |
Financing obligation assets | $ (40,876) |
General Information
General Information | 12 Months Ended |
Dec. 31, 2017 | |
General Information | |
Description of Business | (1) Description of Business Genesis Healthcare, Inc. is a healthcare services company that through its subsidiaries (collectively, the Company) owns and operates skilled nursing facilities, assisted/senior living facilities and a rehabilitation therapy business. The Company has an administrative service company that provides a full complement of administrative and consultative services that allows its affiliated operators and third-party operators with whom the Company contracts to better focus on delivery of healthcare services. The Company provides inpatient services through 470 skilled nursing, assisted/senior living and behavioral health centers located in 30 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 December 31, 2017. Certain prior year amounts have been reclassified to conform to current period presentation, the effect of which was not material. Impairment charges associated with favorable leases were included in the line item “Long-lived asset impairments” for the years ended December 31, 2016 and 2015. These impairments have been reclassified to the line item “Goodwill and identifiable intangible asset impairments” in the current period presentation. See Note 19 – " Asset Impairment Charges - Identifiable Intangible Assets with a Definite Useful Life – Favorable Leases .” Financial Condition and Liquidity Considerations Current Status The accompanying consolidated financial statements have been prepared on the basis the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In evaluating the Company’s ability to continue as a going concern, management considered the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern for 12 months following the date the Company’s financial statements were issued (March 16, 2018). Management considered the recent results of operations as well as the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s conditional and unconditional obligations due before March 16, 2019. The Company’s results of operations have been negatively impacted by the persistent pressure of healthcare reforms enacted in recent years. This challenging operating environment has been most acute in the Company’s inpatient segment, but also has had a detrimental effect on the Company’s rehabilitation therapy segment and its customers. In recent years, the Company has implemented a number of cost mitigation strategies to offset the negative financial implications of this challenging operating environment. These strategies have been successful in recent years, however, the negative impact of continued reductions in skilled patient admissions, shortening lengths of stay, escalating wage inflation and professional liability losses, combined with the increased cost of capital through escalating lease payments accelerated in the third quarter of 2017. These factors caused the Company to be unable to comply with certain financial covenants at September 30, 2017 under the Revolving Credit Facilities, the Term Loans, the Welltower Bridge Loans and the Master Lease Agreements and other agreements. The Company received waivers from the parties to the Term Loans, the Welltower Bridge Loans and the Master Lease Agreements at September 30, 2017. The Company since secured with its counterparties to the Revolving Credit Facilities a 90-day forbearance agreement through late March 2018. See Note 10 – “ Long-Term Debt, ” and Note 11 – “ Leases and Lease Commitments ” for definitions and descriptions of the Company’s debt instruments and lease agreements. Subsequent to December 31, 2017, the Company entered into a number of agreements, amendments and new financing facilities. See Note 24 – “ Subsequent Events – Restructuring Transactions .” In total, these agreements and amendments are estimated to reduce the Company’s annual cash fixed charges by approximately $62 million beginning in 2018. The new financing agreements are estimated to provide $70 million of additional cash and borrowing availability, increasing the Company’s liquidity and financial flexibility. In connection with the Restructuring Transactions, the Company entered into the New ABL Credit Facilities agreement, replacing its prior Revolving Credit Facilities and eliminating its forbearance agreement. Also in connection with the Restructuring Transactions, the Company amended the financial covenants in all of its material loan agreements and all but two of its material master leases. Financial covenants beginning in 2018 were amended to account for changes in the Company’s capital structure as a result of the Restructuring Transactions and to account for the current business climate. The Company received waivers from the counterparties to two of its material master leases, for which agreements to amend financial covenants were not attained, with respect to compliance with financial covenants from December 31, 2017 through at least March 31, 2019. Based on all conditions and events that are known and reasonably knowable as of the date the Company’s financial statements were issued, the substantial doubt about the Company’s ability to continue as a going concern that was previously disclosed in the Company’s Form 10-Q filed on November 8, 2017, for the period ended September 30, 2017, has been alleviated. Risk and Uncertainties Should the Company fail to comply with its debt and 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 debt and 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 debt and lease covenants through March 31, 2019, 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 and lease covenants in the future. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (2) Estimates and Assumptions The consolidated financial statements have been prepared in conformity with U.S. GAAP, which requires management to consolidate company financial information and make informed estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The most significant estimates in the Company’s consolidated financial statements relate to allowance for doubtful accounts, self-insured liability risks, income taxes, impairment of long-lived assets and goodwill, and other contingencies. Actual results could differ from those estimates. Net Revenues and Accounts Receivable Revenues and accounts receivable are recorded on an accrual basis as services are performed at their estimated net realizable value. The Company derives a majority of its revenues from funds under federal Medicare and state Medicaid assistance programs, the continuation of which is dependent upon governmental policies and is subject to audit risk and potential recoupment. The Company also receives payments through reimbursement from Medicaid and Medicare programs and directly from individual residents (private pay), third-party insurers and long-term care facilities. The Company assesses collectibility on all accounts prior to providing services. The Company records revenues for inpatient services and the related receivables in the accounting records at the Company’s established billing rates in the period the related services are rendered. The provision for contractual adjustments, which represents the difference between the established billing rates and predetermined reimbursement rates, is deducted from gross revenues to determine net revenues. Retroactive adjustments that are likely to result from future examinations by third party payors are accrued on an estimated basis in the period the related services are rendered and adjusted as necessary in future periods based upon new information or final settlements. The Company records revenues for rehabilitation therapy services and other ancillary services and the related receivables at the time services or products are provided or delivered to the customer. Upon delivery of services or products, the Company has no additional performance obligation to the customer. Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term investments with original maturities of three months or less when purchased and therefore, approximate fair value. The Company’s available cash is held in accounts at commercial banking institutions. The Company currently has bank deposits with commercial banking institutions that exceed Federal Deposit Insurance Corporation insurance limits. Restricted Cash and Investments in Marketable Securities Restricted cash includes cash and money market funds principally held by the Company’s wholly owned captive insurance subsidiary, which are substantially restricted to securing outstanding claims losses. The restricted cash and investments in marketable securities balances at December 31, 2017 and 2016 were $130.2 million and $156.0 million, respectively. Restricted investments in marketable securities, comprised principally of fixed interest rate securities, are considered to be available-for-sale and accordingly are reported at fair value with unrealized gains and losses, net of related tax effects, included within accumulated other comprehensive loss, a separate component of stockholders’ deficit. Fair values for fixed interest rate securities are based on quoted market prices. A decline in the market value of any security below cost that is deemed other-than-temporary is charged to income, resulting in the establishment of a new cost basis for the security. Realized gains and losses for securities classified as available-for-sale are derived using the specific identification method for determining the cost of securities sold. Allowance for Doubtful Accounts The Company evaluates the adequacy of its allowance for doubtful accounts by estimating allowance requirement percentages for each accounts receivable aging category for each type of payor. The Company has developed estimated allowance requirement percentages by utilizing historical collection trends and its understanding of the nature and collectibility of receivables in the various aging categories and the various lines of the Company’s business. The allowance percentages are developed by payor type as the accounts receivable from each payor type have unique characteristics. The allowance for doubtful accounts also considers accounts specifically identified as uncollectible. Accounts receivable that the Company’s management specifically estimates to be uncollectible, based upon the age of the receivables, the results of collection efforts, or other circumstances, are reserved in the allowance for doubtful accounts until written-off. Property and Equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation expense is calculated using the straight-line method over the estimated useful lives of the depreciable assets, which generally range from 20-35 years for buildings, building improvements and land improvements, and 3-15 years for equipment, furniture and fixtures. Depreciation expense on leasehold improvements and assets held under capital leases is calculated using the straight-line method over the lesser of the lease term or the estimated useful life of the asset. Expenditures for maintenance and repairs necessary to maintain property and equipment in efficient operating condition are expensed as incurred. Costs of additions and improvements are capitalized. Total depreciation expense for the years ended December 31, 2017, 2016 and 2015 was $238.2 million, $234.7 million, and $218.8 million, respectively. Goodwill and Identifiable Intangible Assets Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. See Note 9 – “ Goodwill and Identifiable Intangible Assets .” Definite-lived intangible assets consist of management contracts, customer relationships and favorable leases. These assets are amortized in accordance with the authoritative guidance for intangible assets using the straight-line method over their estimated useful lives. Indefinite-lived intangible assets primarily consist of trade names. Impairment of Long-Lived Assets, Goodwill and Identifiable Intangible Assets The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset to the future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized to the extent the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or the fair value, less costs to sell. The Company’s goodwill and identifiable intangible assets are reviewed for impairment by measuring the fair value of each reporting unit to determine whether the fair value exceeds the carrying value based upon the market capitalization including a control premium and a discounted cash flow analysis. Determining fair value requires the exercise of significant judgment, including judgment about appropriate discount rates, perpetual growth rates, the amount and timing of expected future cash flows, as well as relevant comparable company earnings multiples for the market-based approach. The cash flows employed in the discounted cash flow analyses are based on the Company’s internal projection model for 2017 and, for years beyond 2017, the growth rates used are an estimate of the future growth in the industry in which the Company participates. The discount rates used in the discounted cash flow analyses are intended to reflect the risks inherent in the future cash flows of the reporting unit and are based on an estimated cost of capital, which was determined based on the Company’s estimated cost of capital relative to its capital structure. In addition, the market-based approach utilizes comparable company public trading values, research analyst estimates and, where available, values observed in private market transactions. The Company performs its annual goodwill and identifiable intangible assets impairment assessment for its reporting units as of September 30 of each year or more frequently if adverse events or changes in circumstances indicate that the asset may be impaired. See Note 19 – “ Asset Impairment Charges .” Self-Insurance Reserves The Company provides for self-insurance reserves for both general and professional liability and workers’ compensation claims based on estimates of the ultimate costs for both reported claims and claims incurred but not reported. Estimated losses from asserted and incurred but not reported claims are accrued based on the Company’s estimates of the ultimate costs of the claims, which include costs associated with litigating or settling claims, and the relationship of past reported incidents to eventual claims payments. All relevant information, including the Company’s own historical experience, the nature and extent of existing asserted claims and reported incidents, and independent actuarial analyses of this information is used in estimating the expected amount of claims. The reserves for loss for workers’ compensation risks are discounted based on actuarial estimates of claim payment patterns whereas the reserves for general and professional liability are recorded on an undiscounted basis. The Company also considers amounts that may be recovered from excess insurance carriers in estimating the ultimate net liability for such risks. See Note 21 – “ Commitments and Contingencies – Loss Reserves For Certain Self-Insured Programs – General and Professional Liability and Workers’ Compensation .” Income Taxes The Company’s effective tax rate is based on pretax income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which it operates. The Company accounts for income taxes in accordance with applicable guidance on accounting for income taxes, which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between book and tax bases on recorded assets and liabilities. Accounting guidance also requires that deferred tax assets be reduced by a valuation allowance, when it is more likely than not that a tax benefit will not be realized. The recognition and measurement of a tax position is based on management’s best judgment given the facts, circumstances and information available at the reporting date. The Company evaluates tax positions to determine whether the benefits of tax positions are more likely than not of being sustained upon audit based on the technical merits of the tax position. For tax positions that are more likely than not of being sustained upon audit, the Company recognizes the largest amount of the benefit that is greater than 50% likely of being realized upon ultimate settlement in the financial statements. For tax positions that are not more likely than not of being sustained upon audit, the Company does not recognize any portion of the benefit in the financial statements. If the more likely than not threshold is not met in the period for which a tax position is taken, the Company may subsequently recognize the benefit of that tax position if the tax matter is effectively settled, the statute of limitations expires, or if the more likely than not threshold is met in a subsequent period. The Company evaluates, on a quarterly basis, its ability to realize deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization are its forecast of pre-tax earnings, its forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. To the extent the Company prevails in matters for which reserves have been established, or are required to pay amounts in excess of its reserves, its effective tax rate in a given financial statement period could be materially affected. An unfavorable tax settlement would require use of cash and result in an increase in the effective tax rate in the year of resolution. A favorable tax settlement would be recognized as a reduction in the Company’s effective tax rate in the year of resolution. The Company records accrued interest and penalties associated with uncertain tax positions as income tax expense in the consolidated statement of operations. Leases Leasing transactions are a material part of the Company’s business. The following discussion summarizes various aspects of the Company’s accounting for leasing transactions and the related balances. Capital Leases Lease arrangements are capitalized when such leases convey substantially all the risks and benefits incidental to ownership. Capital leases are amortized over either the lease term or the life of the related assets, depending upon available purchase options and lease renewal features. Amortization related to capital lease assets is included in the consolidated statements of operations within depreciation and amortization expense. See Note 11 – “ Lease and Lease Commitments .” Operating Leases For operating leases, minimum lease payments, including minimum scheduled rent increases, are recognized as lease expense on a straight-line basis over the applicable lease terms and any periods during which the Company has use of the property but is not charged rent by a landlord. A majority of the Company’s leases, provide for rent escalations and renewal options. When the Company purchases businesses that have lease agreements accounted for as operating leases, it recognizes the fair value of the lease arrangements as either favorable or unfavorable and records these amounts as other identifiable intangible assets or other long-term liabilities, respectively. Favorable and unfavorable leases are amortized to lease expense on a straight-line basis over the remaining term of the leases. See Note 11 – “ Lease and Lease Commitments .” Sale/Leaseback Financing Obligation Prior to recognition as a sale, or profit/loss thereon, sale/leaseback transactions are evaluated to determine if their terms transfer all of the risks and rewards of ownership as demonstrated by the absence of any other continuing involvement by the seller-lessee. A sale/leaseback transaction that does not qualify for sale/leaseback accounting because of any form of continuing involvement by the seller-lessee is accounted for as a financing transaction. Under the financing method: (1) the assets and accumulated depreciation remain on the consolidated balance sheet and continue to be depreciated over the remaining useful lives; (2) no gain is recognized; and (3) proceeds received by the Company from these transactions are recorded as a financing obligation. See Note 12 – “ Financing Obligations .” Earnings (Loss) Per Common Share Earnings (loss) per common share are based upon the weighted average number of common shares outstanding during the respective periods. The Company follows the provisions of the authoritative guidance for determining whether instruments granted in share-based payment transactions are participating securities for purposes of calculating earnings per common share. See Note 5 – “ Loss Per Share .” Stock-Based Compensation The Company recognizes compensation expense related to stock-based compensation awards in accordance with the related authoritative guidance. See Note 14 – “ Stock-Based Compensation .” 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. 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 adopted ASU 2017-04 when it performed its annual goodwill impairment test at September 30, 2017 . The adoption of ASU 2017-04 eliminated Step 2 of the goodwill impairment test. See Note 19 – “Asset Impairment Charges.” Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which serves to supersede most existing revenue recognition guidance, including guidance specific to the healthcare industry. The FASB later issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations , in March 2016, ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing , in April 2016, ASU 2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients, in May 2016, and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers , in December 2016, all of which further clarified aspects of Topic 606. The standard provides a principles-based framework for recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and requires enhanced disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the requirements of this standard effective January 1, 2018 using the modified retrospective method applied to those contracts which were not completed as of that date. The cumulative effect on the opening balance of retained earnings as a result of adopting the standard is not material. The new standard will impact amounts presented in certain categories on its consolidated statements of operations, as upon adoption, the majority of amounts currently classified as bad debt expense will be reflected as implicit price concessions, and therefore an adjustment to net revenues. Other than as described above, the standard will not have a material impact on its consolidated financial position, results of operations and cash flows. However, there will be expanded disclosures required. 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 statements. 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 financial statements. 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 financial statements. 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 does not expect the adoption of ASU 2017-01 to have a material impact on its consolidated financial condition and results of operations. |
Certain Significant Risks and U
Certain Significant Risks and Uncertainties | 12 Months Ended |
Dec. 31, 2017 | |
Certain Significant Risks and Uncertainties | |
Certain Significant Risks and Uncertainties | (3) Revenue Sources The Company receives revenues from Medicare, Medicaid, private insurance, self-pay residents, other third-party payors and long-term care facilities that utilize its rehabilitation therapy and other services. The Company’s inpatient services segment derives approximately 79% of its revenue from Medicare and various state Medicaid programs. The following table depicts the Company’s inpatient services segment revenue by source for the years ended December 31, 2017, 2016 and 2015. Year ended December 31, 2017 2016 2015 Medicare 23 % 24 % 26 % Medicaid 56 % 55 % 53 % Insurance 12 % 11 % 11 % Private and other 9 % 10 % 10 % Total 100 % 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 .” Concentration of Credit Risk The Company is exposed to the credit risk of its third-party customers, many of whom are in similar lines of business as the Company and are exposed to the same systemic industry risks of operations as the Company, resulting in a concentration of risk. These include organizations that utilize the Company’s rehabilitation services, staffing services and physician service offerings, engaged in similar business activities or having economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in regulatory and systemic industry conditions. Management assesses its exposure to loss on accounts at the customer level. The greatest concentration of risk exists in the Company’s rehabilitation services business where it has over 200 distinct customers, many being chain operators with more than one location. The four largest customers of the Company’s rehabilitation services business comprise $109.9 million, approximately 68%, of the gross outstanding contract receivables in the rehabilitation services business at December 31, 2017. One customer, which is a related party of the Company, comprises $87.0 million, approximately 54%, of the gross outstanding contract receivables in the rehabilitation services business at December 31, 2017. In December 2017, the Company recognized a $55.0 million charge, reducing the net receivable of this customer to $32.0 million. This charge is included in the separately classified line item “Customer receivership and other related charges” in the consolidated statements of operations. See Note 16 – “Related Party Transactions.” Any further adverse events impacting the solvency of several of these large customers resulting in their insolvency or other economic distress would have a material impact on the Company. In July 2017, a significant customer of the Company’s rehabilitation therapy services business filed for receivership. This customer operated 65 nursing facilities in six states at the time of the filing. The Company recorded a non-cash impairment charge to customer receivership and other related charges of $35.6 million in the year ended December 31, 2017. In the years ended December 31, 2017, 2016 and 2015, the Company recognized revenues of $32.2 million, $39.1 million and $21.2 million, respectively, for the customer in receivership. In the years ended December 31, 2017, 2016 and 2015, the Company recognized income from continuing operations of $4.6 million, $6.1 million and $3.5 million, respectively, for the customer in receivership. In September 2017, another customer operating only a single skilled nursing facility filed for receivership resulting in a non-cash charge to customer receivership and other related charges of $0.3 million in the year ended December 31, 2017. |
Significant Transactions and Ev
Significant Transactions and Events | 12 Months Ended |
Dec. 31, 2017 | |
Significant Transactions and Events | |
Significant Transactions and Events | (4) The Combination with Skilled On August 18, 2014, Skilled Healthcare Group, Inc., a Delaware corporation (Skilled) entered into a Purchase and Contribution Agreement with FC-GEN Operations Investment, LLC (FC-GEN) pursuant to which the businesses and operations of FC-GEN and Skilled were combined (the Combination). On February 2, 2015, the Combination was completed. Upon completion of the Combination, the Company began operating under the name Genesis Healthcare, Inc. and the Class A common stock of the combined company continues to trade on the NYSE under the symbol “GEN.” Upon the closing of the Combination, the former owners of FC-GEN held 74.25% of the economic interests in the combined entity and the former stockholders of Skilled held the remaining 25.75% of the economic interests in the combined entity post-transaction, in each case on a fully-diluted, as-exchanged and as-converted basis. Under applicable accounting standards, FC-GEN was the accounting acquirer in the Combination, which was treated as a reverse acquisition. The acquisition method has been applied to the accounts of Skilled based on Skilled’s stock price (level 1 valuation technique – quoted prices in active markets for identical assets or liabilities) as of the acquisition date. The consideration has been allocated to the legacy Skilled business that was acquired on the acquisition date with the excess consideration over the fair value of the net assets acquired recognized as goodwill. As of the effective date of the Combination, FC-GEN’s assets and liabilities remained at their historical costs. Because FC-GEN’s pre-transaction owners held an approximately 58% direct controlling interest in Skilled and a 74.25% economic and voting interest in the combined company, FC-GEN is considered to be the acquirer of Skilled for accounting purposes. Following the closing of the Combination, the combined results of Skilled and FC-GEN are consolidated with approximately 42% direct noncontrolling economic interest shown as noncontrolling interest in the financial statements of the combined entity. The direct noncontrolling economic interest is in the form of Class C common stock of FC-GEN that are exchangeable on a 1 to 1 basis to public shares of the Company. The direct noncontrolling economic interest will continue to decrease as Class C common stock of FC-GEN are exchanged for public shares of the Company. Since the Combination, there have been conversions of 2.9 million Class C common stock, resulting in a dilution of the direct non-controlling interest to 38.6%. Consideration Price Allocation The total Skilled consideration price of $348.1 million was allocated to Skilled’s net tangible and identifiable intangible assets based upon the estimated fair values at February 2, 2015. The excess of the consideration price over the estimated fair value of the net tangible and identifiable intangible assets was recorded as goodwill. The allocation of the consideration price to property and equipment, identifiable intangible assets and deferred income taxes was based upon valuation data and estimates. The aggregate goodwill arising from the Combination is based upon the expected future cash flows of the Skilled operations. Goodwill recognized from the Combination is the result of (i) the expected savings to be realized from achieving certain economies of scale and (ii) anticipated long-term improvements in Skilled’s core businesses. The Company has estimated $79.8 million of pre-existing Skilled goodwill that is deductible for income tax purposes related to the Combination. For the year ended December 31, 2015, the Company incurred transaction costs of $89.2 million, consisting of approximately $31.6 million of accounting, investment banking, legal and other costs associated with the transaction, management incentive compensation charges of $54.6 million, and a $3.0 million transaction advisory fee paid to an affiliate of the Company’s sponsors. The Company also incurred $17.8 million of deferred financing fees associated with the debt financing of the Combination. The consideration price and related allocation are summarized as follows (in thousands): Accounts receivable $ 114,032 Deferred income taxes and other current assets 39,586 Property, plant and equipment 488,528 Weighted Average Life Identifiable intangible assets: (Years) Management contracts 30,900 3.5 Customer relationships 13,400 Favorable lease contracts 18,110 12.8 Trade names 3,400 Indefinite Total identifiable intangible assets 65,810 Deferred income taxes and other assets 76,461 Accounts payable and other current liabilities (121,479) Long-term debt, including amounts due within one year (428,453) Unfavorable lease contracts (11,480) Deferred income taxes and other long-term liabilities (141,914) Total identifiable net assets 81,091 Goodwill 267,050 Net assets $ 348,141 Pro forma information The acquired business contributed net revenues of $832.0 million and net loss of $10.5 million to the Company for the period from February 1, 2015 to December 31, 2015. The unaudited pro forma net effect of the Combination assuming the acquisition occurred as of January 1, 2015 is as follows (in thousands, except per share amounts): Year ended December 31, 2015 Revenues $ 5,690,512 Loss attributable to Genesis Healthcare, Inc. (315,329) Loss per common share: Basic $ (3.54) Diluted $ (3.54) The unaudited pro forma financial data have been derived by combining the historical financial results of the Company and the operations acquired in the Combination for the period presented. The results of operations include transaction and financing costs totaling $89.2 million incurred by both the Company and Skilled in connection with the Combination. These costs have been eliminated from the results of operations for the year ended December 31, 2015 for purposes of the pro forma financial presentation. Acquisition from Revera On June 15, 2015, the Company announced that it had signed an asset purchase agreement with Revera Assisted Living, Inc., a leading owner, operator and investor in the senior living sector, to acquire 24 of its skilled nursing facilities along with its contract rehabilitation business for $240 million. The agreement provided for the acquisition of the real estate and operations of 20 of the skilled nursing facilities and the addition of the facilities to an existing master lease agreement with Welltower Inc. (Welltower), a publicly traded real estate investment trust, to operate the other four additional skilled nursing facilities. On December 1, 2015, the Company acquired 19 of the 24 skilled nursing facilities and entered into management agreements to manage the remaining five facilities. The purchase price on December 1, 2015 for the 15 owned and four leased facilities was $206.0 million. The purchase price for the 15 owned facilities was primarily financed through a bridge loan with Welltower of $134.1 million and the Company paid $20.5 million in cash. See Note 10 – “ Long-Term Debt – Real Estate Bridge Loans .” The master lease agreement with Welltower was amended to include the four leased facilities resulting in a financing obligation of $54.3 million. On September 1, 2016, the Company acquired the five remaining skilled nursing facilities from Revera for a purchase price of $39.4 million. During the period from December 1, 2015 through August 31, 2016, the Company managed the operations of these facilities. The acquisition was financed through a real estate bridge loan for $37.0 million. See Note 10 – “ Long-Term Debt – Real Estate Bridge Loans.” Sale of Kansas ALFs On January 1, 2016, the Company sold 18 Kansas assisted/senior living facilities acquired in the Combination for $67.0 million. Of the proceeds received, $54.2 million were used to pay down partially the real estate bridge loans. See Note 10 – “ Long-Term Debt – Real Estate Bridge Loans.” Sale of Hospice and Home Health In March 2016, the Company signed an agreement with FC Compassus LLC, a nationwide network of community-based hospice and palliative care programs, to sell its hospice and home health operations for $84 million. Effective May 1, 2016, the Company completed the sale and received $72 million in cash and a $12 million note. The sale resulted in a gain of $43.4 million and a derecognition of goodwill and identifiable intangible assets of $30.8 million. The cash proceeds were used to pay down partially debt. Through the asset purchase agreement, the Company retained certain liabilities. See Note 21 – “ Commitments and Contingencies – Legal Proceedings - Creekside Hospice Litigation .” Certain members of the Company’s board of directors indirectly beneficially hold ownership interests in FC Compassus LLC totaling less than 10% in the aggregate. Department of Housing and Urban Development (HUD) Insured Loans During the years ended December 31, 2017 and 2016, the Company closed on the HUD insured financing of four skilled nursing facilities for $27.8 million and 28 skilled nursing facilities for $205.3 million, respectively. The total proceeds from the financings were used to pay down partially the real estate bridge loans. See Note 10 – “ Long-Term Debt – Real Estate Bridge Loans.” Divestiture of Non-Strategic Facilities and Investments On October 18, 2016, the Company completed the divesture of nine underperforming leased assisted living facilities in the states of Pennsylvania, Delaware and West Virginia. The nine facilities had annual revenue of $22.5 million and $3.3 million of pre-tax net loss. The divestiture resulted in a recognized gain of $19.8 million resulting from the write-off of the facilities’ financing obligation balance partially offset by the retirement of the asset subject to financing obligation. On December 15, 2016, the Company completed the divestiture of a previously closed leased skilled nursing facility in the state of Maryland. The divestiture resulted in a recognized gain of $1.9 million resulting from the write-off of the facility’s financing obligation balance. On December 22, 2016, the Company received an escrow release of $5.0 million associated with a pending sale of five skilled nursing facilities located in California the Company owns and leases to a third party operator. The sale failed to be completed by the closing date dictated in the sale agreement and the funds held in escrow were released to the Company. The Company recorded the $5.0 million as a gain. On December 31, 2016, the Company sold its 50% joint venture interest in a pharmacy company for $5.4 million. The Company wrote off its joint venture investment of $1.5 million and recorded a gain on sale of $3.9 million. On February 1, 2017, the Company divested two skilled nursing facilities located in Georgia 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 $0.7 million. On March 14, 2017, the Company completed the divestiture of four skilled nursing facilities located in Massachusetts and were subject to a master lease agreement. 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. On April 1, 2017, the Company divested a skilled nursing facility located in Tennessee. The skilled nursing facility was subject to a master lease agreement and had annual revenue of $7.4 million and pre-tax net income of $0.5 million. The Company recognized a loss of $0.8 million. On April 1, 2017, the Company divested of 18 skilled nursing facilities (16 owned and 2 leased) located in 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. The Company recognized a loss of $6.5 million. The 16 owned skilled nursing facilities qualified and were presented as assets held for sale at December 31, 2016. One of the leased skilled nursing facilities was subleased to a new operator resulting in a loss associated with a cease to use asset of $4.1 million. On June 1, 2017, the Company divested of one skilled nursing facility located in North Carolina. The skilled nursing facility was subject to a master lease agreement and had annual revenue of $6.4 million and pre-tax net loss of $1.0 million. The Company recognized a loss of $0.5 million. On July 10, 2017, the Company divested of one skilled nursing facility located in Colorado. The skilled nursing facility was subject to a master lease agreement and had annual revenue of $5.7 million and pre-tax net loss of $2.2 million. The Company recognized a loss of $0.5 million. On September 28, 2017, the Company closed one skilled nursing facility located in California. The skilled nursing facility remains subject to a master lease agreement and had annual revenue of $6.9 million and pre-tax net loss of $1.6 million. The Company recognized a loss of $0.1 million. On October 1, 2017, the Company divested two skilled nursing facilities located in Georgia. The two skilled nursing facilities were subject to a master lease agreement and had annual revenue of $15.5 million and pre-tax net loss of $3.0 million. The Company recognized a loss of $1.8 million. On December 22, 2017, the Company completed the divestiture of five skilled nursing facilities located in California. The Company owned the real and personal property of these five skilled nursing facilities, but leased the skilled nursing facilities to a third party operator. These five skilled facilities had annual rental income of $4.0 million and pre-tax net income of $2.7 million. The Company recognized a gain of $0.2 million. The Company presents gains and losses in its consolidated statements of operations as other loss (income). See Note 18 – “ Other Loss (Income) .” Master Leases Welltower - Second Spring On November 1, 2016, Welltower sold the real estate of 64 facilities to Second Spring Healthcare Investments (Second Spring), a joint venture formed by affiliates of Lindsay Goldberg LLC, a private investment firm, and affiliates of Omega Healthcare Investors, Inc. (Omega). The Company will continue to operate the facilities pursuant to its new lease with affiliates of Second Spring effective November 1, 2016 and there will be no change in the operations of these facilities. The 64 facilities had been included in the Company’s master lease with Welltower and were historically subject to 3.4% annual escalators, which were scheduled to decrease to 2.9% annual escalators effective April 1, 2017. Under the new lease with Second Spring, initial annual rent for the 64 properties is reduced approximately 5% to $103.9 million and annual escalators will decrease to 1.0% after year 1, 1.5% after year 2, and 2.0% thereafter. The more favorable lease terms are expected to reduce the Company’s cumulative rent obligations through January 2032 by $297 million. As part of the transaction, the Company issued a note totaling $51.2 million to Welltower, with a maturity date of October 30, 2020. See Note 10 – “Long-Term Debt – Notes Payable .” Welltower - Cindat Best Years Welltower JV LLC (CBYW) On December 23, 2016, Welltower sold the real estate of 28 additional facilities to CBYW, a joint venture among Welltower, Cindat Capital Management Ltd., and Union Life Insurance Co., Ltd. The Company will continue to operate the facilities pursuant to its new lease with affiliates of CBYW effective December 23, 2016 and there will be no change in the operations of these facilities. The 28 facilities were included in the Company’s master lease with Welltower and had been subject to 3.4% annual escalators, which were scheduled to decrease to 2.9% annual escalators effective April 1, 2017. Under the new lease, the 28 properties’ initial annual rent is reduced by approximately 5% to $54.5 million and the annual escalators are decreased to 2.0%. The more favorable lease terms are expected to reduce the Company’s cumulative rent obligations by $143.0 million through January 2032. As part of the transaction, the Company issued 2 five-year notes totaling $23.7 million to Welltower. The first note is a non-convertible note for $11.7 million and has a maturity date of December 15, 2021. The second note was a convertible note for $12.0 million and had a maturity date of December 15, 2021, but was converted into 3.0 million shares of common stock on November 13, 2017 and cancelled. The Company recorded a gain on early extinguishment of debt of $8.9 million. See Note 10 – “Long-Term Debt – Notes Payable .” The new master leases from these two Welltower transactions resulted in a reduction in financing obligation of $208.9 million, a step-down in capital lease asset and obligation of $21.4 million, establishment of notes payable of $74.8 million and a gain on leased facilities sold to new landlord and operating under new lease agreements of $134.1 million, which is included in other loss (income) on the consolidated statements of operations for the year ended December 31, 2016. See Note 18 – “ Other Loss (Income) .” Omega On December 22, 2017, the Company amended its master lease agreement with Omega. The Company received $10.0 million, which has been recorded as a capital lease obligation and is to be repaid over the term of the master lease at an initial annual rate of 9%. In addition, the master lease term was extended four years and the Company issued Omega a stock warrant to purchase 900,000 shares of Company stock at an exercise price of $1.00 per share, exercisable beginning August 1, 2018 and ending December 31, 2022. The master lease amendment resulted in a capital lease asset and obligation gross up of $20.3 million. Sabra Master Leases In December 2017, Sabra Health Care REIT, Inc. (Sabra) completed the sale of 20 of the Company’s leased assets in Kentucky, Ohio and Indiana. The Company continues to operate these facilities with a new landlord subject to a market based master lease. As a result of the sale, the Company recognized a $7.7 million gain on the write off of deferred lease balances related to these facilities. In addition, the Company has entered into a definitive agreement with Sabra resulting in permanent and unconditional annual cash rent savings of $19 million effective January 1, 2018. Sabra continues to pursue and the Company continues to support Sabra’s previously announced sale of the Company’s leased assets. At the closing of such sales, the Company expects to enter into lease agreements with new landlords for a majority of the assets currently leased with Sabra. Dining and Nutrition Partnership In April 2017, the Company entered into a strategic dining and nutrition partnership to further leverage its national platforms, process expertise and technology. The Company believes the relationship provides additional liquidity, cost efficiency and enhanced operational performance. |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Loss Per Share | |
Loss Per Share | (5) 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 each of the other two classes, representing the voting interests of the noncontrolling interest of the legacy FC-GEN owners. See Note 4 – “ Significant Transactions and Events – The Combination with Skilled .” Class C common stock is a participating security; however, it shares in a de minimis economic interest and is therefore excluded from the denominator of the basic earnings (loss) per share (EPS) calculation. Basic EPS was computed by dividing net loss by the weighted-average number of outstanding common shares for the period. Diluted EPS is computed by dividing loss plus the effect of assumed conversions (if applicable) by the weighted-average number of outstanding shares after giving effect to all potential dilutive common stock. A reconciliation of the numerator and denominator used in the calculation of basic net loss per common share follows (in thousands, except per share data): Year ended December 31, 2017 2016 2015 Numerator: Loss from continuing operations $ (959,172) $ (118,078) $ (525,549) Less: Net loss attributable to noncontrolling interests (380,222) (54,038) (100,573) Loss from continuing operations attributable to Genesis Healthcare, Inc. $ (578,950) $ (64,040) $ (424,976) (Loss) income from discontinued operations, net of taxes (32) 27 (1,219) Net loss attributable to Genesis Healthcare, Inc. $ (578,982) $ (64,013) $ (426,195) Denominator: Weighted-average shares outstanding for basic net loss per share 94,217 89,873 85,755 Basic net loss per common share: Loss from continuing operations attributable to Genesis Healthcare, Inc. $ (6.15) $ (0.71) $ (4.96) (Loss) income from discontinued operations, net of taxes (0.00) 0.00 (0.01) Net loss attributable to Genesis Healthcare, Inc. $ (6.15) $ (0.71) $ (4.97) A reconciliation of the numerator and denominator used in the calculation of diluted net loss per common share follows (in thousands, except per share data): Year ended December 31, 2017 2016 2015 Numerator: Loss from continuing operations $ (959,172) $ (118,078) $ (525,549) Less: Net (loss) income attributable to noncontrolling interests (380,222) (54,038) (100,573) Loss from continuing operations attributable to Genesis Healthcare, Inc. $ (578,950) $ (64,040) $ (424,976) (Loss) income from discontinued operations, net of taxes (32) 27 (1,219) Net loss attributable to Genesis Healthcare, Inc. $ (578,982) $ (64,013) $ (426,195) Plus: Exchange of restricted stock units of noncontrolling interests — (61,258) — Net loss available to common stockholders after assumed conversions $ (578,982) $ (125,271) $ (426,195) Denominator: Weighted-average shares outstanding for diluted net loss per share 94,217 89,873 85,755 Effect of dilutive shares: Exchange of restricted stock units of noncontrolling interests — 64,340 — Employee and director unvested restricted stock units — (1,681) — Dilutive potential common shares — 62,659 — Adjusted weighted-average common shares outstanding, diluted 94,217 152,532 85,755 Diluted net loss per common share: Loss from continuing operations attributable to Genesis Healthcare, Inc. $ (6.15) $ (0.82) $ (4.96) (Loss) income from discontinued operations, net of taxes (0.00) 0.00 (0.01) Net loss attributable to Genesis Healthcare, Inc. $ (6.15) $ (0.82) $ (4.97) The following were excluded from net loss attributable to Genesis Healthcare, Inc. and the weighted-average diluted shares computation for the years ended December 31, 2017 and 2016, as their inclusion would have been anti-dilutive (in thousands): Year ended December 31, 2017 2016 2015 Net loss Net loss Net loss attributable to attributable to attributable to Genesis Anti-dilutive Genesis Anti-dilutive Genesis Antidilutive Healthcare, Inc. shares Healthcare, Inc. shares Healthcare, Inc. shares Exchange of restricted stock units of noncontrolling interests $ (375,883) 61,973 $ — — $ (54,761) 58,810 Employee and director unvested restricted stock units — 887 — 1,715 — 124 Convertible note — — 11 74 — — Stock Warrants — 25 — — — — The combined impact of the assumed conversion to common stock and the related tax implications attributable to the noncontrolling interest and the grants under the 2015 Omnibus Equity Incentive Plan, as amended (the 2015 Plan), are anti-dilutive to EPS because the Company is in a net loss position for the years ended December 31, 2017 and 2015. See Note 14 – “ Stock-Based Compensation.” As of December 31, 2017, there were 61,561,393 units attributed to the noncontrolling interests outstanding. See Note 4 – “ Significant Transactions and Events – The Combination with Skilled .” In addition to the outstanding units attributed to the noncontrolling interests, the conversion of all of those units will result in the issuance of an incremental 10,719 shares of Class A common stock In the year ended December 31, 2016, the Company issued a debt instrument which is convertible into 3,000,000 shares of Class A common stock. During the year ended December 31, 2017, this debt instrument was exchanged for 3,000,000 shares of the Company’s Class A common stock. See Note 10 – “ Long-Term Debt – Notes Payable.” In the year ended December 31, 2017, the Company issued a warrant to purchase 900,000 shares of its Class A common stock at an exercise price of $1.00 per share, exercisable beginning August 1, 2018 and ending December 30, 2022. Because the Company is in a net loss position for the year ended December 31, 2017, the impact of the assumed conversion of the warrants to common stock and the related tax implications are anti-dilutive to EPS. See Note 4 – “ Significant Transactions and Events – Master Leases – Omega.” |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information | |
Segment Information | (6) 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 (in thousands, except percentages): Year ended December 31, 2017 2016 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage Revenues: Inpatient services: Skilled nursing facilities $ 4,522,738 84.1 % $ 4,783,117 83.4 % $ (260,379) (5.4) % Assisted/Senior living facilities 96,109 1.8 % 115,956 2.0 % (19,847) (17.1) % Administration of third party facilities 8,991 0.2 % 10,969 0.2 % (1,978) (18.0) % Elimination of administrative services (1,536) — % (1,406) — % (130) 9.2 % Inpatient services, net 4,626,302 86.1 % 4,908,636 85.6 % (282,334) (5.8) % Rehabilitation therapy services: Total therapy services 983,370 18.3 % 1,070,314 18.7 % (86,944) (8.1) % Elimination intersegment rehabilitation therapy services (379,764) (7.1) % (408,687) (7.1) % 28,923 (7.1) % Third party rehabilitation therapy services 603,606 11.2 % 661,627 11.6 % (58,021) (8.8) % Other services: Total other services 178,573 3.3 % 185,521 3.2 % (6,948) (3.7) % Elimination intersegment other services (34,741) (0.6) % (23,354) (0.4) % (11,387) 48.8 % Third party other services 143,832 2.7 % 162,167 2.8 % (18,335) (11.3) % Net revenues $ 5,373,740 100.0 % $ 5,732,430 100.0 % $ (358,690) (6.3) % Year ended December 31, 2016 2015 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage Revenues: Inpatient services: Skilled nursing facilities $ 4,783,117 83.4 % $ 4,597,671 81.7 % $ 185,446 4.0 % Assisted/Senior living facilities 115,956 2.0 % 143,321 2.6 % (27,365) (19.1) % Administration of third party facilities 10,969 0.2 % 9,488 0.2 % 1,481 15.6 % Elimination of administrative services (1,406) — % (1,800) — % 394 (21.9) % Inpatient services, net 4,908,636 85.6 % 4,748,680 84.5 % 159,956 3.4 % Rehabilitation therapy services: Total therapy services 1,070,314 18.7 % 1,099,130 19.6 % (28,816) (2.6) % Elimination intersegment rehabilitation therapy services (408,687) (7.1) % (429,828) (7.6) % 21,141 (4.9) % Third party rehabilitation therapy services 661,627 11.6 % 669,302 11.9 % (7,675) (1.1) % Other services: Total other services 185,521 3.2 % 240,350 4.3 % (54,829) (22.8) % Elimination intersegment other services (23,354) (0.4) % (39,108) (0.7) % 15,754 (40.3) % Third party other services 162,167 2.8 % 201,242 3.6 % (39,075) (19.4) % Net revenues $ 5,732,430 100.0 % $ 5,619,224 100.0 % $ 113,206 2.0 % A summary of the Company’s condensed consolidated statement of operations follows (in thousands): Year ended December 31, 2017 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 4,627,838 $ 983,370 $ 178,073 $ 500 $ (416,041) $ 5,373,740 Salaries, wages and benefits 2,098,249 823,668 114,951 — — 3,036,868 Other operating expenses 1,765,752 74,683 59,999 — (416,040) 1,484,394 General and administrative costs — — — 170,029 — 170,029 Provision for losses on accounts receivable 84,349 13,232 1,139 (2,311) — 96,409 Lease expense 144,554 — 1,211 1,760 — 147,525 Depreciation and amortization expense 223,443 14,711 675 16,957 — 255,786 Interest expense 415,162 56 37 84,127 — 499,382 Gain on early extinguishment of debt — — — (6,566) — (6,566) Investment income — — — (5,328) — (5,328) Other loss (income) 7,802 732 180 (241) — 8,473 Transaction costs — — — 14,325 — 14,325 Customer receivership and other related charges — 90,864 — — — 90,864 Long-lived asset impairments 189,494 1,881 — — — 191,375 Goodwill and identifiable intangible asset impairments 360,046 — — — — 360,046 Equity in net (income) loss of unconsolidated affiliates — — — (2,183) 1,940 (243) (Loss) income before income tax benefit (661,013) (36,457) (119) (270,069) (1,941) (969,599) Income tax benefit — — — (10,427) — (10,427) (Loss) income from continuing operations $ (661,013) $ (36,457) $ (119) $ (259,642) $ (1,941) $ (959,172) Year ended December 31, 2016 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 4,910,042 $ 1,070,314 $ 184,775 $ 746 $ (433,447) $ 5,732,430 Salaries, wages and benefits 2,342,362 901,578 125,773 — — 3,369,713 Other operating expenses 1,720,199 79,056 47,831 — (433,447) 1,413,639 General and administrative costs — — — 186,062 — 186,062 Provision for losses on accounts receivable 89,838 16,905 1,260 (188) — 107,815 Lease expense 142,717 89 1,490 1,948 — 146,244 Depreciation and amortization expense 223,007 12,288 970 18,194 — 254,459 Interest expense 434,938 57 39 93,510 — 528,544 Loss on early extinguishment of debt — — — 16,290 — 16,290 Investment income — — — (3,018) — (3,018) Other (income) loss (204,977) (1,112) (43,231) 42,250 — (207,070) Transaction costs — — — 7,928 — 7,928 Long-lived asset impairments 32,110 — — — — 32,110 Goodwill and identifiable intangible asset impairments 3,321 — — — — 3,321 Skilled Healthcare and other loss contingency expense — — — 15,192 — 15,192 Equity in net (income) loss of unconsolidated affiliates — — — (5,452) 2,166 (3,286) Income (loss) before income tax benefit 126,527 61,453 50,643 (371,970) (2,166) (135,513) Income tax benefit — — — (17,435) — (17,435) Income (loss) from continuing operations $ 126,527 $ 61,453 $ 50,643 $ (354,535) $ (2,166) $ (118,078) Year ended December 31, 2015 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 4,750,480 $ 1,099,130 $ 238,585 $ 1,765 $ (470,736) $ 5,619,224 Salaries, wages and benefits 2,248,197 898,226 143,397 — — 3,289,820 Other operating expenses 1,684,487 74,210 70,770 — (470,484) 1,358,983 General and administrative costs — — — 175,889 — 175,889 Provision for losses on accounts receivable 80,998 17,604 2,704 (785) — 100,521 Lease expense 146,329 106 2,316 1,779 (254) 150,276 Depreciation and amortization expense 206,026 12,931 1,227 17,433 — 237,617 Interest expense 423,393 31 40 84,635 (290) 507,809 Loss on early extinguishment of debt — — — 130 — 130 Investment (income) loss — — — (1,967) 290 (1,677) Other loss (income) 1,165 — — (2,565) — (1,400) Transaction costs — — — 96,374 — 96,374 Long-lived asset impairments 26,768 — — — — 26,768 Goodwill and identifiable intangible asset impairments 1,778 — — — — 1,778 Skilled Healthcare and other loss contingency expense — — — 31,500 — 31,500 Equity in net (income) loss of unconsolidated affiliates — — — (3,931) 1,792 (2,139) (Loss) income before income tax expense (68,661) 96,022 18,131 (396,727) (1,790) (353,025) Income tax expense — — — 172,524 — 172,524 (Loss) income from continuing operations $ (68,661) $ 96,022 $ 18,131 $ (569,251) $ (1,790) $ (525,549) The following table presents the segment assets as of December 31, 2017 compared to December 31, 2016 (in thousands): December 31, 2017 December 31, 2016 Inpatient services $ 4,303,370 $ 5,194,811 Rehabilitation therapy services 351,711 454,723 Other services 50,127 67,348 Corporate and eliminations 82,657 62,319 Total assets $ 4,787,865 $ 5,779,201 The following table presents segment goodwill as of December 31, 2017 compared to December 31, 2016 (in thousands): December 31, 2017 December 31, 2016 Inpatient services $ — $ 355,070 Rehabilitation therapy services 73,814 73,814 Other services 11,828 11,828 Total goodwill $ 85,642 $ 440,712 With the sale of the Company’s hospice and home health operations effective May 1, 2016, the Company derecognized goodwill of $27.4 million. See Note 4 – “ Significant Transactions and Events – Sale of Hospice and Home Health .” The Company conducted its annual goodwill impairment analysis as of September 30, 2017, resulting in an impairment charge of $351.5 million in the inpatient services segment. See Note 19 – “ Asset Impairment Charges – Goodwill. ” The divestiture of nine of the Company’s skilled nursing facilities and planned divestitures of seven other skilled nursing facilities resulted in a derecognition of goodwill during the year ended December 31, 2017, of $3.6 million in its inpatient services segment. See Note 4 – “ Significant Transactions and Events – Divestiture of Non-Strategic Facilities and Investments .” |
Restricted Cash and Investments
Restricted Cash and Investments in Marketable Securities | 12 Months Ended |
Dec. 31, 2017 | |
Restricted Cash and Investments in Marketable Securities [Abstract] | |
Restricted Cash and Investments in Marketable Securities | (7) The current portion of restricted cash and investments in marketable securities principally represents an estimate of the level of outstanding self-insured losses the Company expects to pay in the succeeding year through its wholly owned captive insurance company. See Note 21 – “ Commitments and Contingencies – Loss Reserves For Certain Self-Insured Programs .” Restricted cash and investments in marketable securities at December 31, 2017 consist of the following (in thousands): Unrealized losses Amortized Unrealized Less than Greater than cost gains 12 months 12 months Fair value Restricted cash and equivalents: Cash $ 4,103 $ — $ — $ — $ 4,103 Money market funds 10 — — — 10 Restricted investments in marketable securities: Mortgage/government backed securities 7,956 — — (108) 7,848 Corporate bonds 52,528 26 (106) (123) 52,325 Government bonds 65,842 509 (86) (322) 65,943 $ 130,439 $ 535 $ (192) $ (553) 130,229 Less: Current portion of restricted investments (37,128) Long-term restricted investments $ 93,101 Restricted cash and investments in marketable securities at December 31, 2016 consist of the following (in thousands): Unrealized losses Amortized Unrealized Less than Greater than cost gains 12 months 12 months Fair value Restricted cash and equivalents: Cash $ 11,515 $ — $ — $ — $ 11,515 Money market funds 537 — — — 537 Restricted investments in marketable securities: Mortgage/government backed securities 16,947 9 (16) (96) 16,844 Corporate bonds 65,563 68 (43) (283) 65,305 Government bonds 61,399 699 (60) (213) 61,825 $ 155,961 $ 776 $ (119) $ (592) 156,026 Less: Current portion of restricted investments (43,555) Long-term restricted investments $ 112,471 Maturities of restricted investments yielded proceeds of $43.8 million, $38.6 million and $26.2 million for the years ended December 31, 2017, 2016 and 2015, respectively. Sales of investments yielded proceeds of $26.0 million, $34.1 million and $15.1 million for the years ended December 31, 2017, 2016 and 2015, respectively. Associated gross realized gain and (loss) for the year ended December 31, 2017 were $0.5 million and $(0.7) million, respectively. Associated gross realized gain and (loss) for the year ended December 31, 2016 were $0.5 million and $(0.9) million, respectively. Associated gross realized gain and (loss) for the year ended December 31, 2015 were $0.1 million and $(0.8) million, respectively. The majority of the Company’s investments are investment grade government and corporate debt securities that have maturities of five years or less, and the Company has both the ability and intent to hold the investments until maturity. Restricted investments in marketable securities held at December 31, 2017 mature as follows (in thousands): Amortized Fair cost value Due in one year or less $ 48,462 $ 48,673 Due after 1 year through 5 years 75,014 74,567 Due after 5 years through 10 years — — Due after 10 years 2,850 2,876 $ 126,326 $ 126,116 Actual maturities may differ from stated maturities because borrowers may have the right to call or prepay certain obligations and may exercise that right with or without prepayment penalties. The Company has issued letters of credit totaling $114.3 million at December 31, 2017 to its third party administrators and the Company’s excess insurance carriers. Restricted cash of $1.6 million and restricted investments with an amortized cost of $125.2 million and a market value of $125.0 million are pledged as security for these letters of credit as of December 31, 2017. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | (8) Property and equipment consisted of the following as of December 31, 2017 and 2016 (in thousands): December 31, 2017 December 31, 2016 Land, buildings and improvements $ 591,022 $ 673,092 Capital lease land, buildings and improvements 752,657 818,273 Financing obligation land, buildings and improvements 2,525,551 2,584,178 Equipment, furniture and fixtures 453,230 447,767 Construction in progress 30,294 49,859 Gross property and equipment 4,352,754 4,573,169 Less: accumulated depreciation (939,155) (807,776) Net property and equipment $ 3,413,599 $ 3,765,393 For the years ended December 31, 2017 and 2016, the Company recognized long-lived impairment charges of $191.4 million and $32.1 million, respectively. See Note 19 – “ Asset Impairment Charges – Long-Lived Assets with a Definite Useful Life.” In the year ended December 31, 2017, the Company had multiple amendments to one of its master lease agreements. The first amendment resulted in a net capital lease asset write-down of $14.9 million. See Note 4 – “ Significant Transactions and Events – Divestiture of Non-Strategic Facilities and Investments.” 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. The second amendment resulted in a capital lease asset write-up of $20.3 million. See Note 4 – “ Significant Transactions and Events – Master Leases.” |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Identifiable Intangible Assets | (9) The changes in the carrying value of goodwill are as follows (in thousands): Inpatient Rehabilitation Therapy Services Other Services Consolidated Balance at January 1, 2016 $ 357,649 $ 73,098 $ 39,272 $ 470,019 Acquisition from Revera 3,354 — — 3,354 Other additions — 716 — 716 Goodwill associated with assets held for sale (5,933) — — (5,933) Sale of hospice and home health — — (27,444) (27,444) Balance at December 31, 2016 Goodwill 355,070 73,814 11,828 440,712 Accumulated impairment losses — — — — $ 355,070 $ 73,814 $ 11,828 $ 440,712 Goodwill associated with divestitures (3,600) — — (3,600) Balance at December 31, 2017 Goodwill 351,470 73,814 11,828 437,112 Accumulated impairment losses (351,470) — — (351,470) $ — $ 73,814 $ 11,828 $ 85,642 Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. For the year ended December 31, 2017, the Company recognized goodwill impairment charges of $351.5 million in its inpatient segment. See Note 19 – “ Asset Impairment Charges - Goodwill .” Identifiable intangible assets consist of the following at December 31, 2017 and 2016 (in thousands): December 31, 2017 Weighted Average Remaining Life (Years) Customer relationship assets, net of accumulated amortization of $55,285 $ 57,548 8 Favorable leases, net of accumulated amortization of $33,051 34,872 10 Trade names 50,556 Indefinite Identifiable intangible assets $ 142,976 December 31, 2016 Weighted Average Remaining Life (Years) Customer relationship assets, net of accumulated amortization of $43,862 $ 67,348 9 Management contracts, net of accumulated amortization of $17,872 14,651 2 Favorable leases, net of accumulated amortization of $29,421 43,011 10 Trade names 50,556 Indefinite Identifiable intangible assets $ 175,566 Acquisition-related identified intangible assets consist of customer relationship assets, management contracts, favorable lease contracts and trade names. Customer relationship assets exist in the Company’s rehabilitation services, respiratory services, management services and medical staffing businesses. These assets are amortized on a straight-line basis over the expected period of benefit. Management contracts are derived through the organization of facilities under an upper payment limit supplemental payment program in Texas that provides supplemental Medicaid payments with federal matching funds for skilled nursing facilities that are affiliated with county-owned hospital districts. Under this program, the Company acts as the manager of the facilities and shares in these supplemental payments with the county hospitals. These assets are amortized on a straight-line basis over the management contract life. Favorable lease contracts represent the estimated value of future cash outflows of operating lease contracts compared to lease rates that could be negotiated in an arms-length transaction at the time of measurement. Favorable lease contracts are amortized on a straight-line basis over the lease terms. The Company’s trade names have value, in particular in the rehabilitation business which markets its services to other providers of skilled nursing and assisted/senior living services. The trade name asset has an indefinite life and is measured no less than annually or if indicators of potential impairment become apparent. Amortization expense related to customer relationship assets, which is included in depreciation and amortization expense, for the years ended December 31, 2017, 2016 and 2015 was $10.3 million, $10.3 million and $10.3 million, respectively. Amortization expense related to management contracts, which is included in depreciation and amortization expense, for the years ended December 31, 2017, 2016 and 2015 was $6.8 million, $9.0 million and $8.1 million, respectively. Amortization expense related to favorable leases, which is included in lease expense, for the years ended December 31, 2017, 2016 and 2015 was $6.9 million, $8.1 million and $8.4 million, respectively. Based upon amounts recorded at December 31, 2017, total estimated amortization expense of identifiable intangible assets will be $16.7 million in 2018, $16.5 million in 2019, $11.1 million in 2020, $10.3 million in 2021, and $6.8 million in 2022 and $31.0 million, thereafter. Asset impairment charges for year ended December 31, 2017, totaled $8.5 million. The Company recorded a $7.3 million impairment of its management contract assets related to the expiration of and lack of a sustained, state sponsored replacement program for the Texas Minimum Payment Amount Program (MPAP). The impairment is included in goodwill and identifiable intangible asset impairments on the consolidated statements of operations. See Note 19 – “ Asset Impairment Charges - Identifiable Intangible Assets with a Definite Useful Life – Management Contracts .” The remaining $1.2 million pertains to the impairment on favorable lease assets associated with the underperforming properties. The impairment is included in goodwill and identifiable intangible asset impairments on the consolidated statements of operations. See Note 19 – “ Asset Impairment Charges – Identifiable Intangible Assets with a Definite Useful Life – Favorable Leases .” For the years ended December 31, 2016 and 2015, the Company recorded asset impairment charges on favorable lease assets associated with the write-down of underperforming properties of $3.3 million and $1.8 million, respectively. See Note 19 – “ Asset Impairment Charges – Long-Lived Assets with a Definite Useful Life .” |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Long-Term Debt Abstract | |
Long-Term Debt | (10) Long-term debt at December 31, 2017 and 2016 consisted of the following (in thousands): December 31, 2017 December 31, 2016 Revolving credit facilities, net of debt issuance costs of $10,109 and $9,220 at December 31, 2017 and December 31, 2016, respectively $ 303,091 $ 383,630 Term loan agreement, net of debt issuance costs of $3,020 and $3,859 at December 31, 2017 and December 31, 2016, respectively 120,706 116,174 Real estate bridge loans, net of debt issuance costs of $3,486 and $4,400 at December 31, 2017 and December 31, 2016, respectively 281,039 313,549 HUD insured loans, net of debt issuance costs of $5,590 and $4,773 at December 31, 2017 and December 31, 2016, respectively 263,827 241,570 Notes payable, net of convertible debt discount of $0 and $990 at December 31, 2017 and December 31, 2016, respectively 68,122 73,829 Mortgages and other secured debt (recourse) 12,536 13,235 Mortgages and other secured debt (non-recourse), net of debt issuance costs of $99 and $131 at December 31, 2017 and December 31, 2016, respectively 27,978 29,157 1,077,299 1,171,144 Less: Current installments of long-term debt (26,962) (24,594) Long-term debt $ 1,050,337 $ 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 $525 million under two separate tranches: Tranche A-1 and HUD Tranche. On December 21, 2017, a third tranche, Tranche A-2, was eliminated from the Revolving Credit Facilities resulting in no overall reduction in combined commitment availability. 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 both tranches, and in regards to LIBOR loans (i) for Tranche A-1 ranges from 3.00% to 3.50%; and (ii) for HUD Tranche ranges from 3.00% to 3.50%. The applicable margin is based on the level of commitments for both tranches, and in regards to base rate loans (i) for Tranche A-1 ranges from 2.00% to 2.50%, and (ii) for HUD Tranche ranges from 2.00% to 2.50%. 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 7.25 to 1.0 through December 31, 2017 and stepping down gradually over the course of the loan to 6.5 to 1.0 beginning in 2020. Borrowings and interest rates under the two tranches were as follows at December 31, 2017: Weighted Average Revolving Credit Facilities Commitment Borrowings Interest Tranche A-1 $ 485,000 $ 292,800 5.34 % HUD tranche 40,000 20,400 4.82 % $ 525,000 $ 313,200 5.31 % As of December 31, 2017, the Company had a total borrowing base capacity of $438.7 million with outstanding borrowings under the Revolving Credit Facilities of $313.2 million and had $54.8 million of drawn letters of credit securing insurance and lease obligations, leaving the Company with approximately $70.7 million of available borrowing capacity under the Revolving Credit Facilities. The Revolving Credit Facilities were refinanced and satisfied in full on March 6, 2018. See Note 24 – “ Subsequent Events – Restructuring Transactions – New Asset Based Lending 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. 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 LIBOR 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 LIBOR 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 LIBOR or ABR rate loans, up to 2.0% of the interest may be paid either in cash or paid-in-kind. The applicable interest rate on this loan was 14.6% as of December 31, 2017, with 2.0% of the interest to be paid-in-kind. Beginning November 1, 2017 and ending February 15, 2018, all monthly payments of interest and principal due on the Term Loans will not be due and payable currently but will accrue and be added to the principal balance. As of December 31, 2017, the Term Loans had an outstanding principal balance of $123.7 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 7.25 to 1.0 through December 31, 2017 and stepping down over the course of the loan to 6.5 to 1.0 beginning in 2020. The Term Loan Agreement was amended on March 6, 2018. See Note 24 – “ Subsequent Events – Restructuring Transactions – Term Loan Agreement.” Real Estate Bridge Loans The Company is party to four separate real estate 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 senior/assisted living facilities. 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. At December 31, 2017, the Welltower Bridge Loans are secured by a mortgage lien on the real property of the 33 remaining facilities subject to the loans and a second lien on certain receivables of the operators of 19 of the facilities. Beginning November 1, 2017 and ending February 15, 2018, all monthly payments of interest due on the Welltower Bridge Loans will not be due and payable currently but will accrue and be added to the principal balance. The Welltower Bridge Loans have an outstanding principal balance of $274.6 million at December 31, 2017. One of the Welltower Bridge Loans includes the debt associated with three skilled nursing facilities that were reclassified as assets held for sale in the consolidated balance sheets at December 31, 2016. This Welltower Bridge Loan had a principal balance of $9.0 million and was fully retired on April 1, 2017 with the sale of these three skilled nursing facilities. See Note 20 – “Assets Held for Sale and Discontinued Operations.” During the year ended December 31, 2017, the Welltower Bridge Loans were paid down $49.6 million, $20.0 million for the sale of eight skilled nursing facilities and $29.6 million for the refinancing of bridge loan debt of four skilled nursing facilities with HUD insured loans. During the year ended December 31, 2016, the Welltower Bridge Loans were paid down $214.0 million, $56.0 million for the sale of 19 skilled and senior/assisted living facilities and $158.0 million for the refinancing of bridge loan debt of 23 skilled nursing facilities with HUD insured loans. The Welltower Bridge Loans were amended on February 21, 2018. See Note 24 – “ Subsequent Events – Restructuring Transactions – Welltower Bridge Loans Amendment.” On April 1, 2016, the Company acquired one skilled nursing facility and entered into a $9.9 million real estate bridge loan (Other Real Estate Bridge Loan.) The Other Real Estate Bridge Loan 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 approximately 5.56% at December 31, 2017 and 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 facility 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 December 31, 2017. In the year ended December 31, 2016, one real estate bridge loan for $44 million was retired with the refinancing of five skilled nursing facilities with HUD insured loans. See Note 4 – “ Significant Transactions and Events - HUD Insured Loans.” HUD Insured Loans As of December 31, 2017, the Company has 30 skilled nursing facility loans insured by HUD. The HUD insured loans have a combined aggregate principal balance of $269.4 million, which includes a $13.6 million debt premium established in purchase accounting in connection with the Combination. The Company assumed 11 of these HUD loans in 2015 acquisitions, including the Combination. The HUD insured loans have an original amortization term of 30 to 35 years. Beginning in 2016, the Company began refinancing efforts converting debt subject to real estate bridge loans to HUD insured loans. During the years ended December 31, 2017 and 2016, four skilled nursing facilities and 28 skilled nursing facilities were financed with HUD insured loans for $27.8 million and $205.3 million, respectively. See Note 4 – “ Significant Transactions and Events - HUD Insured Loans.” The HUD insured loans have an average remaining term of 30 years with fixed interest rates ranging from 3.0% to 4.2% 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. 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 December 31, 2017, the Company has total escrow reserve funds of $19.9 million with the loan servicer that are reported within prepaid expenses. The HUD loans of 13 skilled nursing facilities were reclassified as assets held for sale in the consolidated balance sheets at December 31, 2016. These 13 skilled nursing facilities had an aggregate principal balance of $63.4 million and were sold on April 1, 2017. See Note 20 – “Assets Held for Sale and Discontinued Operations.” Notes Payable In connection with Welltower’s sale of 64 skilled nursing facilities to 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 balance of $55.5 million at December 31, 2017. In connection with Welltower’s sale of 28 skilled nursing facilities to 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 $12.7 million at December 31, 2017. The second note had an initial principal balance of $12.0 million and accrued cash interest at 3% and paid-in-kind interest at 3%. Cash interest was paid and paid-in-kind interest accreted the principal amount semi-annually every June 15 and December 15. The second note was converted into 3.0 million shares of common stock on November 13, 2017 and cancelled. The Company recorded a gain on early extinguishment of debt of $8.9 million. See Note 4 – “ Significant Transactions and Events – Master Leases.” Beginning November 1, 2017 and ending February 15, 2018, all monthly payments of interest and principal due on the Notes Payable will not be due and payable currently but will accrue and be added to the principal balance. 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 3.1% to 6.0% at December 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% at December 31, 2017, with maturity dates ranging from 2018 to 2034. Loans are labeled “ non-recourse” because neither the Company nor any of its wholly owned subsidiaries is obligated to perform under the respective loan agreements. Debt Covenants The 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, and maximum capital expenditures. At December 31, 2017, the Company was in compliance with its financial covenants contained in the Credit Facilities. The Company’s ability to maintain compliance with its debt covenants depends in part on management’s ability to increase revenue and control costs. Should the Company fail to comply with its debt covenants at a future measurement date, it would, 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 would have an even more significant impact on the Company’s financial position. The maturity of total debt of $1.1 billion, excluding debt issuance costs and other non-cash debt discounts and premiums, at December 31, 2017 is as follows (in thousands): Twelve months ended December 31, 2018 $ 27,717 2019 18,282 2020 497,810 2021 18,916 2022 281,104 Thereafter 240,564 Total debt maturity $ 1,084,393 The impact of the Restructuring Transactions are not reflected in the maturity of debt presented as of December 31, 2017. See Note 24 – “ Subsequent Events – Restructuring Transactions.” |
Leases and Lease Commitments
Leases and Lease Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Leases and Lease Commitments | |
Leases and Lease Commitments | (11) The Company leases certain facilities under capital and operating leases. Future minimum payments for the next five years and thereafter under such leases at December 31, 2017 are as follows (in thousands): Twelve months ended December 31, Capital Leases Operating Leases 2018 $ 91,660 $ 121,886 2019 94,419 118,714 2020 93,909 118,703 2021 96,070 113,156 2022 98,302 89,368 Thereafter 3,446,959 248,212 Total future minimum lease payments 3,921,319 $ 810,039 Less amount representing interest (2,893,453) Capital lease obligation 1,027,866 Less current portion (2,511) Long-term capital lease obligation $ 1,025,355 The impact of the Restructuring Transactions are not reflected in the future minimum payments presented as of December 31, 2017. See Note 24 – “ Subsequent Events – Restructuring Transactions.” 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 a weighted average imputed interest rates of 10.0% at December 31, 2017, and mature at dates ranging from 2026 to 2051. Deferred Lease Balances At December 31, 2017 and 2016, the Company had $34.9 million and $43.0 million, respectively, of favorable leases net of accumulated amortization, included in identifiable intangible assets, and $15.5 million and $28.8 million, respectively, of unfavorable leases net of accumulated amortization included in other long-term liabilities on the consolidated balance sheets. Favorable and unfavorable lease assets and liabilities, respectively, arise through the acquisition of leases in place which 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 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 December 31, 2017 and 2016, the Company had $28.7 million and $31.6 million, respectively, of deferred straight-line rent balances included in other long-term liabilities on the consolidated balance sheets. 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 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 December 31, 2017, the Company is in compliance with the financial covenants contained in the Master Lease Agreements. The Company has a master lease agreement with Second Spring involving 64 of its facilities. The Company did not meet a financial covenant contained in this master lease agreement at December 31, 2017. The Company received a waiver for this covenant through December 31, 2017 and an agreement to waive this covenant under certain conditions through March 31, 2019. The Company has a master lease agreement with CBYW involving 28 of its facilities. The Company did not meet certain financial covenants contained in this master lease agreement at December 31, 2017. The Company received a waiver for these covenant breaches through October 24, 2019. At December 31, 2017, the Company did not meet certain financial covenants contained in four leases related to 33 of its facilities. These leases were not included in the Restructuring Transactions. See Note 24 – “ Subsequent Events – Restructuring Transactions .” 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 December 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 would, 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 would have an even more significant impact on the Company’s financial position. |
Financing Obligation
Financing Obligation | 12 Months Ended |
Dec. 31, 2017 | |
Financing Obligation | |
Financing Obligation | (12) Financing obligations represent the present value of minimum lease payments under such lease arrangements and bear a weighted average imputed interest rate of 10.6% at December 31, 2017, 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 December 31, 2017 are as follows (in thousands): Twelve months ended December 31, 2018 $ 277,492 2019 283,715 2020 290,463 2021 295,822 2022 294,900 Thereafter 7,884,986 Total future minimum lease payments 9,327,378 Less amount representing interest (6,396,017) Financing obligations $ 2,931,361 Less current portion (1,878) Long-term financing obligations $ 2,929,483 The impact of the Restructuring Transactions are not reflected in the future minimum payments presented as of December 31, 2017. See Note 24 – “ Subsequent Events – Restructuring Transactions.” The Company entered into two new master lease agreements in the fourth quarter of 2016, which resulted in a reduction in financing obligation of $208.9 million. See Note 4 – “ Significant Transactions and Events – Master Leases.” |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | (13) The total number of shares of all classes of stock that the Company shall have authority to issue is 1,200,000,000 consisting of: · 1,000,000,000 shares of Class A common stock, par value $0.001 per share, of which 97,100,738 shares and 75,187,388 shares were issued at December 31, 2017 and 2016, respectively; · 20,000,000 shares of Class B common stock, par value $0.001 per share, of which 744,396 shares and 15,495,019 shares were issued at December 31, 2017 and 2016, respectively; · 150,000,000 shares of Class C common stock, par value $0.001 per share, of which 61,561,393 shares and 63,849,380 shares were issued at December 31, 2017 and 2016, respectively; and · 30,000,000 shares of Preferred Stock, par value $0.001 per share, of which 0 shares were issued at December 31, 2017 and 2016, respectively. Capital Transactions with Stockholders and Noncontrolling Interests During the years ended December 31, 2017, 2016 and 2015, the Company distributed $0.4 million, $0.2 million and $7.0 million, respectively, to the stockholders and noncontrolling interests. These distributions represent tax payments made by the Company on the behalf of FC-GEN members. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | (14) The Company provides stock-based compensation to attract and retain employees while also aligning employees’ interests with the interests of its shareholders. The 2015 Plan, which is shareholder-approved, permits the grant of various cash-based and equity-based awards to selected employees, directors, independent contractors and consultants of the Company. The 2015 Plan permits the grant of up to 24.4 million shares of Class A common stock, subject to certain adjustments and limitations. Stock-based compensation expense is comprised of restricted stock units, which are based on estimated fair value, made to certain employees and directors. For the years ended December 31, 2016 and 2015, the Company estimated forfeiture rates at grant date based on historical experience and adjusted in subsequent periods for differences in actual forfeitures from those estimates. For the year ended December 31, 2017, the Company accounts for forfeitures when they occur. Restricted Stock Units The Company grants restricted stock units under the 2015 Plan. Each unit represents an obligation to deliver to the holder one share of the Company’s Class A common stock upon vesting. Certain of these units are subject to time-based vesting criteria (Time-based) and generally vest in equal installments over three years on the anniversary of the grant date. The fair value of such units is measured at the market price of the Company’s stock on the date of the grant. Other restricted stock units are subject to both time-based and market-based vesting criteria (Time and Market-based). Such units generally vest on the third anniversary of the grant date, but only if and to the extent that the Company’s share price meets specified target prices. The fair value of such units is measured using the Monte-Carlo simulation model, which incorporates into the fair value determination the possibility that the target share prices may not be met. Stock-based compensation related to these units is recognized regardless of whether the market-based vesting condition is satisfied, provided that the requisite service has been provided. The Company’s Monte-Carlo fair value assumptions are as follows: December 31, 2017 December 31, 2016 December 31, 2015 Expected term, in years Risk-free interest rate Volatility 45% - 55% Dividends N/A N/A N/A A summary of the Company’s non-vested restricted stock units, which includes units subject to Time-based vesting criteria and units subject to both Time and Market-based vesting criteria, as of and for the year ended December 31, 2017 is shown below (number of units in thousands): Number of Units Weighted-Average Grant Date Fair Value Time-based Time and Market-based Time-based Time and Market-based Non-vested balance at January 1, 2017 4,619 3,706 $ 3.25 $ 1.84 Granted 2,281 1,563 1.70 1.12 Vested (2,018) — 3.43 — Forfeited (198) (287) 3.42 2.11 Non-vested balance at December 31, 2017 4,684 4,982 $ 2.41 $ 1.60 For the years ended December 31, 2016 and 2015, the weighted-average grant date fair value of Time-based units granted was $1.67 and $6.01, respectively. For the years ended December 31, 2016 and 2015, the weighted-average grant date fair value of Time and Market-based units granted was $0.81 and $3.34, respectively. As of December 31, 2017, there was approximately $14.6 million of unrecognized stock-based compensation expense related to unvested stock-based compensation, which is expected to be recognized over a weighted average term of 1.2 years. During the years ended December 31, 2017, 2016 and 2015, the fair value of stock-based compensation that vested was $3.4 million, $2.2 million and less than $0.1 million, respectively. At December 31, 2017, 12.7 million shares of the Company’s Class A common stock are available for delivery under the 2015 Plan. Stock-based compensation expense related to restricted stock units included in general and administrative costs was $9.6 million, $8.4 million and $4.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. The income tax benefit for stock-based compensation expense was $3.1 million, $2.2 million, and $0 for the years ended December 31, 2017, 2016 and 2015, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (15) The Company’s provision (benefit) for income taxes was based upon management’s estimate of taxable income or loss for each respective accounting period. The Company recognizes an asset or liability for the deferred tax consequences of temporary differences between the tax bases of assets including net operating loss and credit carryforwards and liabilities and the amounts reported in the financial statements. These temporary differences would result in taxable or deductible amounts in future years when the reported amounts of the assets are recovered or liabilities are settled. On February 2, 2015, Skilled, along with its subsidiary healthcare companies (the Skilled Companies) and FC-GEN, along with its subsidiary companies (the Genesis HealthCare Companies) completed the Combination pursuant to which the businesses of the Skilled Companies and the Genesis HealthCare Companies were combined and now operate under the name Genesis Healthcare, Inc. The Internal Revenue Code (IRC) imposes limitations on a corporation’s ability to utilize federal tax attributes (such as net unrealized built-in-deductions), including federal income tax credits, in the event of an “ownership change.” States may impose similar limitations. In general terms, an ownership change may result from transactions increasing the ownership of certain shareholders in the stock of a corporation by more than 50 percentage points over a three year period. The Combination generated such an ownership change. The Skilled Companies were treated as being purchased for accounting and tax purposes. As a result of the Combination, the tax bases of its assets and attributes such as net operating losses and tax credit carryforwards were carried over and subject to the provisions of IRC Sec. 382. Following the Combination and as of December 31, 2017, the Company now effectively owns 61.4% of FC-GEN, an entity taxed as a partnership for U.S. income tax purposes. This is the Company’s only source of taxable income. The taxable income of the partnership is subject to the income allocation rules of IRC Sec. 704. Management believes the mechanics of IRC Sec. 704 will cause a greater portion of the temporary tax deductions to be allocated to the Company. This allocation will reduce the Company’s taxable income. Income Tax (Benefit) Provision Total income tax (benefit) expense was as follows (in thousands): Year ended December 31, 2017 2016 2015 Continuing operations $ (10,427) $ (17,435) $ 172,524 Discontinued operations 48 8 (885) Stockholder's deficit (67) (82) (212) Total $ (10,446) $ (17,509) $ 171,427 The components of the provision for income taxes on income (loss) from continuing operations for the periods presented were as follows (in thousands): Year ended December 31, 2017 2016 2015 Current: Federal $ 1,592 $ (22,473) $ 5,151 State 157 (2,096) 1,738 1,749 (24,569) 6,889 Deferred: Federal (12,304) 5,785 134,151 State 128 1,349 31,484 (12,176) 7,134 165,635 Total $ (10,427) $ (17,435) $ 172,524 At December 31, 2017, the current income taxes were primarily generated on the taxable income of the Company’s Bermuda captive insurance company. At December 31, 2016, the current income taxes benefit was primarily generated from the release of a FASB Interpretation No. 48 (FIN 48) reserve the Company acquired in the acquisition of Sun Healthcare Group, Inc. The FIN 48 reserve was released due to the lapse of statute of limitations. At December 31, 2015, the current income taxes were primarily generated on the taxable income of the Company’s Bermuda captive insurance company. Beginning with the fourth quarter of 2014, the Company initiated rehabilitation therapy services within the People’s Republic of China. In the quarter ended March 31, 2016, the Company expanded rehabilitation therapy services within Hong Kong. At December 31, 2016 and 2015, these business operations remain in their respective startup stage. During the year ended December, 31, 2017, these foreign operations generated both U.S. federal and foreign taxable losses. The deferred tax assets generated by the foreign operations are fully valued at December 31, 2017. 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. In assessing the requirement for, and amount of, a valuation allowance in accordance with the more likely than not standard for all periods, the Company gives appropriate consideration to all positive and negative evidence related to the realization of the deferred tax assets. The assessment considers the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods and the Company’s experience with operating loss and tax credit expirations. A history of cumulative losses is a significant piece of negative evidence used in the assessment. At December 31, 2017 and 2016, the Company has established a valuation allowance in the amount of $264.1 million and $280.6 million, respectively. The valuation allowance in 2017 and 2016 has been established due to management’s assessment that the Company will not realize its deferred tax assets. Therefore, management recorded a full valuation allowance against the majority of its net deferred tax assets in the amount of $264.1 million and $280.6 million, respectively, except for the discounted unpaid loss reserve deferred tax asset of the Company’s captive insurance company. The carrying value of the Company’s deferred tax assets and liabilities at December 31, 2017, is less than the values at December 31, 2016, due to the reduction of the U.S. federal corporate income tax rate down from 35% to 21% as a result of the U.S. Tax Cuts and Jobs Act enacted on December 22, 2017, which reduced the income tax rate imposed upon corporations from 35% to 21%. The Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (SAB 118) on December 23, 2017. SAB 118 provides a one-year measurement period from a registrant’s reporting period that includes the U.S. Tax Act’s enactment date to allow the registrant sufficient time to obtain, prepare and analyze information to complete the accounting required under ASC 740. In addition to the aforementioned impacts to the Company's consolidated financial statements as of December 31, 2017, the U.S. Tax Cuts and Jobs Act could have other impacts on the Company in the future. The Company's federal net operating losses that have been incurred prior to December 31, 2017 will continue to have a 20-year carryforward limitation applied and will need to be evaluated for recoverability in the future as such. For net operating losses created after December 31, 2017, the net operating losses will have an indefinite life, but usage will be limited to 80% of taxable income in any given year. The Company has estimated the impact of the U.S. Tax Cuts and Jobs Act on state income taxes reflected in its income tax benefit for the year ended December 31, 2017. Reasonable estimates for the Company’s state and local provision were made based on the Company's analysis of tax reform. These provisional amounts may be adjusted in future periods during 2018 when additional information is obtained. Additional information that may affect the Company's provisional amounts would include further clarification and guidance on how the Internal Revenue Service will implement tax reform and further clarification and guidance on how state taxing authorities will implement tax reform and the related effect on our state and local income tax returns, state and local net operating losses and corresponding valuation allowances. Total income tax (benefit) expense for the periods presented differed from the amounts computed by applying the federal income tax rate of 35% to income (loss) before income taxes as illustrated below (in thousands): Year ended December 31, 2017 2016 2015 Computed “expected” benefit $ (339,359) $ (47,430) $ (123,560) (Reduction) increase in income taxes resulting from: State and local income taxes, net of federal tax benefit 149 (2,096) 1,738 Adjustment to income taxes for income not subject to corporate income tax — — 34,196 Income tax credits (2,840) (3,695) (2,469) Goodwill impairment write-off 53,688 — — Non-controlling interest 138,331 20,012 39,843 Adjustment to deferred taxes, including credits and valuation allowance 139,324 41,172 225,259 FIN 48 (81) (26,355) 760 Other, net 361 957 (3,243) Total income tax (benefit) expense $ (10,427) $ (17,435) $ 172,524 The Company’s effective income tax rate was 1.1% in 2017, 12.9% in 2016, and (48.9)% in 2015. The change in the effective income tax rate from 2016 to 2017 was largely due to the reduction in the carrying value of the Company’s deferred tax asset and deferred tax liability caused by the U.S. Tax Cuts and Jobs Act enacted on December 22, 2017, which reduced the income tax rate imposed upon corporations from 35% to 21%. The reduction in the income tax rate resulted in a $108.3 million reduction to the Company's deferred tax assets. The change in the effective income tax rate from 2015 to 2016 was largely due to the release of a FIN 48 reserve in 2016 and the establishment of a full valuation allowance in 2015 of $221.9 million. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are presented below (in thousands): 2017 2016 Deferred tax assets: Investment in partnership 156,049 160,610 Net operating loss carryforwards 80,615 93,696 Discounted unpaid loss reserve 3,147 6,107 Other intangible 3,542 1,191 General business credits 24,325 25,066 Total deferred tax assets 267,678 286,670 Valuation allowance (264,098) (280,563) Deferred tax assets, net of valuation allowance 3,580 6,107 Deferred tax liabilities: Long-lived assets: intangible property (7,584) (22,354) Total deferred tax liabilities (7,584) (22,354) Net deferred tax liabilities (4,004) (16,247) Uncertain Tax Positions The Company follows the provisions of the authoritative guidance for accounting for uncertainty in income taxes which clarifies the accounting for uncertain income tax issues recognized in an entity’s financial statements. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in an income tax return. The Company, excluding its corporate groups, is only subject to state and local income tax in certain jurisdictions. The Company’s corporate groups are subject to federal, state and local income taxes. The Company is also subject to income based taxes in Hong Kong and China. However, since these operations began in year 2014, they have historically generated current taxable losses. Significant judgment is required in evaluating its uncertain tax positions and determining its provision for income taxes. Under U.S. GAAP, the Company utilizes a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company is subject to various federal and state income tax audits in the ordinary course of business. Such audits could result in increased tax payments, interest and penalties. While the Company believes its tax positions are appropriate, it cannot assure that the various authorities engaged in the examination of its income tax returns will not challenge the Company’s positions. The Company believes it has adequately reserved for its uncertain tax positions, though no assurance can be given that the final tax outcome of these matters will not be different. The Company adjusts these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the expiration of the statute of limitations. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as the related net interest. A reconciliation of unrecognized tax benefits follows (in thousands): Balance, December 31, 2014 $ 24,233 Additions recorded in purchase accounting 59 Balance, December 31, 2015 $ 24,292 Reductions due to lapses of applicable statute of limitations (24,213) Balance, December 31, 2016 $ 79 Additions based upon tax positions related to the current year 36 Balance, December 31, 2017 $ 115 The Company’s unrecognized tax benefits reserve for uncertain tax positions primarily relates to certain tax exposure items acquired as a result of the Sun Merger, the most significant item is an IRC 382 realized built-in-gain resulting in utilization of the net operating loss carryforward. The liability related to the Sun Merger reserve was accounted for as part of the purchase price and was not charged to income tax expense. In the third quarter of 2016, the Company was able to release this FIN 48 reserve as the statute of limitations upon the return the position was initially recognized expired. All of the gross unrecognized tax benefits would affect the effective tax rate if recognized. Unrecognized tax benefits are adjusted in the period in which new information about a tax position becomes available or the final outcome differs from the amount recorded. Unrecognized tax benefits are not expected to change significantly over the next twelve months. The Company recognizes potential accrued interest related to unrecognized tax benefits in income tax expense. Penalties, if incurred, would also be recognized as a component of income tax expense. The amount of accrued interest related to unrecognized tax benefits as of December 31, 2017, 2016, and 2015 was less than $0.1 million, $0.1 million, and $0.4 million, respectively. Generally, the Company has open tax years for state purposes subject to tax audit on average of between three years to six years. The Company’s U.S. income tax returns from 2011 are open and could be subject to examination. Exchange Rights and Tax Receivable Agreement Following the Combination, the owners of FC-GEN have the right to exchange their membership units in FC-GEN , along with an equivalent number of Class C shares, for shares of Class A common stock of the Company or cash, at the Company’s option.. As a result of such exchanges, the Company’s membership interest in FC-GEN will increase and its purchase price will be reflected in its share of the tax basis of FC-GEN’s tangible and intangible assets. Any resulting increases in tax basis are likely to increase tax depreciation and amortization deductions and, therefore, reduce the amount of income tax the Company would otherwise be required to pay in the future. Any such increase would also decrease gain (or increase loss) on future dispositions of the affected assets. There were exchanges of 2,287,987 FC-GEN units and Class C shares during the twelve months ended December 31, 2017 equating to 2,288,381 Class A shares. The exchanges during the twelve months ended December 31, 2017 resulted in a $14.9 million IRC Section 754 tax basis step-up in the tax deductible goodwill of FC-GEN. There were exchanges of 600,000 FC-GEN units and Class C shares during the twelve months ended December 31, 2016 equating to 600,102 Class A shares. The exchanges during the twelve months ended December 31, 2016 resulted in a $3.1 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. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Disclosures | (16) The Company provides rehabilitation services to certain facilities owned and operated by a customer, in which certain members of the Company’s board of directors beneficially own an ownership interest. These services resulted in net revenue of $142.2 million, $155.4 million and $161.4 million in the years ended December 31, 2017, 2016, and 2015, respectively. The services resulted in gross accounts receivable balances of $87.0 million and $83.9 million at December 31, 2017 and 2016, respectively. The Company recorded a reserve in the fourth quarter of 2017 in the amount of $55.0 million, reducing the net receivable of this customer to $32.0 million. The charge is included in customer receivership and other related charges on the consolidated statements of operations. The Company deemed this reserve prudent giving the delays in collection on account of this related party customer. The reserve represents the judgment of management, and does not indicate a forgiveness of any amount of the outstanding accounts receivable owed by this related party customer. The Company is monitoring the financial condition of this customer and will adjust the reserve levels accordingly as new information about their outlook is available. On February 2, 2015 in connection with the Combination, a related party of certain of the Company’s board of directors received a transaction advisory fee of $3.0 million and all administrative services monthly fees were discontinued. The Company maintained an approximately 5.4% interest in FC PAC Holdings, LLC (FC PAC), an unconsolidated joint venture. Certain members of the Company’s board of directors indirectly beneficially hold ownership interests in FC PAC totaling less than 10% in the aggregate. On March 31, 2015, the Company sold its investment in FC PAC for $26.4 million. The Company recognized a gain on sale of $8.4 million recorded as other income on the consolidated statements of operations. The Company contracts with subsidiaries of FC PAC to provide hospice and diagnostic services in the normal course of business. Effective May 1, 2016, the Company completed the sale of its hospice and home health operations to FC Compassus LLC for $72 million in cash and a $12 million note. Certain members of the Company’s board of directors indirectly beneficially hold ownership interests in FC Compassus LLC totaling less than 10% in the aggregate. See Note 4 – “ Significant Transactions and Events – Sale of Hospice and Home Health.” The combined note and accrued interest balance of $15.6 million remains outstanding at December 31, 2017. On May 1, 2016, the Company entered into preferred provider and affiliation agreements with FC Compassus LLC. Fees for these services amounted to $11.8 million, $12.2 million and $12.0 million in the years ended December 31, 2017, 2016 and 2015, respectively. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Defined Contribution Plan | (17) The Company sponsors a defined contribution plan covering substantially all employees who meet certain eligibility requirements. The Company did not match employee contributions for the defined contribution plan in 201 7 and 2016. |
Other Income
Other Income | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Other Income | (18) In the years ended December 31, 2017, 2016 and 2015, the Company completed multiple transactions, including the divestitures of numerous owned assets and the termination and refinancing of certain facilities subject to lease agreements. See Note 4 - “ Significant Transactions and Events .” These transactions resulted in a net loss (gain) recorded as other loss (income) in the consolidated statements of operations. The following table summarizes those net losses (gains) (in thousands): Year ended December 31, 2017 2016 2015 Gain on sale of hospice and home health $ — $ (43,420) $ — Gain on sale of investment in joint venture — (3,910) (8,359) Gain on escrow receipt associated with terminated sale agreement — (5,000) — Loss (gain) on sale of other owned assets, net 6,932 (220) 5,895 Gain on leased facilities sold to new landlord and operating under new lease agreements (8,466) (134,090) — Loss (gain) on divested facilities terminated from lease agreements 5,799 (20,430) 1,064 Loss on closure of facility subject to lease agreements 146 — — Loss on a cease to use asset associated with a facility sublease 4,062 — — Total other loss (income) $ 8,473 $ (207,070) $ (1,400) |
Asset Impairment Charges
Asset Impairment Charges | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Asset Impairment Charges | ( 19) Long-Lived Assets with a Definite Useful Life In each quarter, the Company’s long-lived assets with a definite useful life were tested for impairment at the lowest levels for which there are identifiable cash flows. The Company estimated the future net undiscounted cash flows expected to be generated from the use of the long-lived assets and then compared the estimated undiscounted cash flows to the carrying amount of the long-lived assets. The cash flow period was based on the remaining useful lives of the primary asset in each long-lived asset group, principally a building in the inpatient segment and customer relationship assets in the rehabilitation therapy services segment. During the years ended December 31, 2017, 2016 and 2015, the Company recognized impairment charges in the inpatient segment totaling $191.4 m illion , $32.1 million and $26.8 million, respectively. Identifiable Intangible Assets with a Definite Useful Life Management Contracts The management contract asset was derived through the organization of facilities under an upper payment limit supplemental payment program in Texas that provided supplemental Medicaid payments with federal matching funds for skilled nursing facilities that were affiliated with county-owned hospital districts. Under this program, the Company acted as the manager of the facilities and shared in the supplemental payments with the county hospitals. With the expiration of the program, the remaining unamortized asset associated with the management contract was written off. During the year ended December 31, 2017, the Company recognized $7.3 million in impairment charges on identifiable intangible assets associated with management contracts. This charge is presented in goodwill and identifiable intangible asset impairments on the consolidated statements of operations. Favorable Leases Favorable lease contracts represent the estimated value of future cash outflows of operating lease contracts compared to lease rates that could be negotiated in an arms-length transaction at the time of measurement. Favorable lease contracts are amortized on a straight-line basis over the lease terms. These favorable lease contracts are measured for impairment using estimated future net undiscounted cash flows expected to be generated from the use of the leased assets compared to the carrying amount of the favorable lease. The cash flow period was based on the remaining useful lives of the asset, which for favorable lease assets is the lease term. During the years ended December 31, 2017, 2016 and 2015, the Company recognized impairment charges on its favorable lease intangible assets with a definite useful life of $1.2 million, $3.3 million and $1.8 million, respectively. This charge is presented in goodwill and identifiable intangible asset impairments on the consolidated statements of operations. Goodwill Adverse changes in the operating environment and related key assumptions used to determine the fair value of the Company’s reporting units and indefinite-lived intangible assets may result in future impairment charges for a portion or all of these assets. Specifically, if the rate of growth of government and commercial revenues earned by the Company’s reporting units were to be less than projected or if healthcare reforms were to negatively impact the Company’s business, an impairment charge of a portion or all of these assets may be required. An impairment charge could have a material adverse effect on the Company’s business, financial position and results of operations, but would not be expected to have an impact on the Company’s cash flows or liquidity. The Company performed its annual goodwill impairment test as of September 30, 2017, 2016 and 2015. The Company conducts the test at the reporting unit level that management has determined aligns with the Company’s segment reporting. See Note 6 – “Segment Information” for a breakdown of the Company’s goodwill by segment . The Company measures the fair value of each reporting unit to determine whether the fair value exceeds the carrying value based upon the market capitalization including a control premium and a discounted cash flow analysis. Determining fair value requires the exercise of significant judgment, including judgment about appropriate discount rates, perpetual growth rates, the amount and timing of expected future cash flows, as well as relevant comparable company earnings multiples for the market-based approach. The cash flows employed in the discounted cash flow analyses are based on the Company’s internal projection model for 2017 and, for years beyond 2017 the growth rates used are an estimate of the future growth in the industry in which the Company participates. The discount rates used in the discounted cash flow analyses are intended to reflect the risks inherent in the future cash flows of the reporting unit and are based on an estimated cost of capital, which was determined based on the Company’s estimated cost of capital relative to its capital structure. In addition, the market-based approach utilizes comparable company public trading values, research analyst estimates and, where available, values observed in private market transactions. The Company performed a quantitative test for impairment of goodwill to assess the impact of changes in the regulatory and reimbursement environment. The Company compares the carrying amount of each of the reporting units to the fair value of each of the reporting units. If the carrying amount of each of its reporting units exceeds its fair value, an impairment of the goodwill is required. If not, no further testing is needed. The analysis indicated that the reporting unit carrying value exceeded the fair value of our inpatient reporting unit and accordingly an impairment was necessary. An impairment of $351.5 million, which represents the entire balance of goodwill associated with the inpatient reporting unit, was recorded during the year ended December 31, 2017. This charge was presented in goodwill and identifiable intangible impairments on the consolidated statements of operations. With respect to the Company’s rehabilitation therapy services and other services segments, the total fair value exceeds the carrying value, so no impairment charge is required. Although these segments have encountered similar challenging operating environments that have so acutely impacted the Company’s inpatient segment, those challenges have not negatively impacted the operating results of these segments to the level where an impairment charge is warranted. During the years ended December 31, 2016 and 2015, the goodwill impairment test determined that no impairment was necessary. |
Assets Held for Sale
Assets Held for Sale | 12 Months Ended |
Dec. 31, 2017 | |
Assets Held for Sale and Discontinued Operations | |
Assets Held for Sale and Discontinued Operations | (20) 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. In the fourth quarter of 2016, the Company identified a disposal group 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 closed on April 1, 2017 and marked an exit from the inpatient business in these states. The disposal group did not meet the criteria as a discontinued operation. The following table sets forth the major classes of assets and liabilities included as part of the disposal group (in thousands): December 31, 2016 Current assets: Prepaid expenses $ 4,056 Long-term assets: Property and equipment, net of accumulated depreciation of $10,792 76,430 Goodwill 5,933 Total assets $ 86,419 Current liabilities: Current installments of long-term debt $ 988 Long-term liabilities: Long-term debt 69,057 Total liabilities $ 70,045 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (21) 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 12 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 1.48%. 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 $6.7 million and $8.9 million as of December 31, 2017 and 2016, respectively. The reserves for general and professional liability are recorded on an undiscounted basis. The provision for general and professional liability risks totaled $134.0 million, $137.5 million and $151.1 million for the years ended December 31, 2017, 2016 and 2015, respectively. The reserves for general and professional liability were $442.9 million and $392.1 million as of December 31, 2017 and 2016, respectively. The provision for loss for workers’ compensation risks totaled $54.1 million, $60.7 million and $60.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. The reserves for workers’ compensation risks were $174.6 million and $226.0 million as of December 31, 2017 and 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 $17.5 million and $19.6 million as of December 31, 2017 and 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. Settlement Agreement On June 9, 2017, the Company and the U.S. Department of Justice (the DOJ) entered into a settlement agreement 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 order to resolve the allegations underlying the Successor Matters and to avoid the uncertainty and expense of litigation. The settlement agreement calls for payment of a collective settlement amount of $52.7 million (the Settlement Amount), including separate Medicaid repayment agreements with each affected state Medicaid program. The Settlement Amount has been recorded fully in accrued expenses in the consolidated balance sheets at December 31, 2016. The Company will remit the Settlement Amount over a period of five (5) years. The remaining outstanding Settlement Amount at December 31, 2017 is $47.4 million, of which $10.0 million is recorded in accrued expenses and $37.4 million is recorded in other long-term liabilities. Creekside Hospice Litigation On August 2, 2013, the United States Attorney for the District of Nevada and the Civil Division of the DOJ informed Skilled that its Civil Division was investigating Skilled, as well as its then subsidiary, Creekside Hospice II, LLC, for possible violations of federal and state healthcare fraud and abuse laws and regulations (the Creekside Hospice Litigation). Those laws could have included the federal False Claims Act (FCA) and the Nevada False Claims Act (NFCA). The FCA provides for civil and administrative fines and penalties, plus treble damages. The NFCA provides for similar fines and penalties, including treble damages. Violations of those federal or state laws could also subject the Company and/or its subsidiaries to exclusion from participation in the Medicare and Medicaid programs. On or about August 6, 2014, in relation to the investigation the DOJ filed a notice of intervention in two pending qui tam proceedings filed by private party relators under the FCA and the NFCA and advised that it intended to take over the actions. The DOJ filed its complaint in intervention on November 25, 2014, against Creekside, Skilled Healthcare Group, Inc., and Skilled Healthcare, LLC, asserting, among other things, that certain claims for hospice services provided by Creekside in the time period 2010 to 2013 (prior to the Combination) did not meet Medicare requirements for reimbursement and were in violation of the civil False Claims Act. Therapy Matters Investigation In February 2015, representatives of the DOJ informed the Company that they were investigating the provision of therapy services at certain Skilled facilities from 2005 through 2013 (prior to the Combination) and may pursue legal action against the Company and certain of its subsidiaries including Hallmark Rehabilitation GP, LLC for alleged violations of the federal and state healthcare fraud and abuse laws and regulations related to such services (the Therapy Matters Investigation). Those laws could have included the FCA and similar state laws. Staffing Matters Investigation In February 2015, representatives of the DOJ informed the Company that it intended to pursue legal action against the Company and certain of its subsidiaries related to staffing and certain quality of care allegations at certain Skilled facilities that occurred prior to the Combination, related to the issues adjudicated against the Company and those subsidiaries in a previously disclosed class action lawsuit that Skilled settled in 2010 (the Staffing Matters Investigation). Those laws could have included the FCA and similar state laws. SunDance Part B Therapy Matter A subsidiary of Sun Healthcare, SunDance Rehabilitation Corp. (SunDance), operates an outpatient agency licensed to provide Medicare Part B therapy services at assisted/senior living facilities in Georgia and is a party to a qui tam proceeding that was filed by a private party relator under the FCA. No SunDance agencies outside of Georgia are part of the qui tam proceeding. The Civil Division of the United States Attorney's Office for the District of Georgia has filed a notice of intervention in this matter in March 2016 and asserts that certain SunDance claims for therapy services did not meet Medicare requirements for reimbursement. Conditional Asset Retirement Obligations Certain of the Company’s leased and owned real estate assets contain asbestos. The asbestos is believed to be appropriately contained in accordance with environmental regulations. If these properties were demolished or subject to renovation activities that disturb the asbestos, certain environmental regulations are in place, which specify the manner in which the asbestos must be handled and disposed. At December 31, 2017 and 2016, the Company has a liability for the asset retirement obligation associated primarily with the cost of asbestos removal aggregating approximately $9.8 million and $9.9 million, respectively, which is included in other long-term liabilities. The liability for each facility will be accreted to its settlement value, which is estimated to approximate $20.9 million through the estimated settlement dates extending from 2018 through 2042. Due to the time over which these obligations could be settled and the judgment used to determine the liability, the ultimate obligation may differ from the estimate. Upon settlement, any difference between actual cost and the estimate is recognized as a gain or loss in that period. Annual accretion of the liability and depreciation expense is recorded each year for the impacted assets until the obligation year is reached, either by sale of the property, demolition or some other future event such as a government action. Employment Agreements The Company has employment agreements and arrangements with its executive officers and certain members of management. The agreements generally continue until terminated by the executive or management, and provide for severance payments under certain circumstances. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value of Financial Instruments | |
Fair Value Measurements | (22) 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 measured at fair value on a recurring basis as of December 31, 2017 and 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 December 31, Identical Assets Observable Inputs Inputs Assets: 2017 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 54,525 $ 54,525 $ — $ — Restricted cash and equivalents 4,113 4,113 — — Restricted investments in marketable securities: Mortgage/government backed securities 7,848 7,848 — — Corporate bonds 52,325 52,325 — — Government bonds 65,943 65,943 — — Total $ 184,754 $ 184,754 $ — $ — 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: Mortgage/government backed securities 16,844 16,844 — — Corporate bonds 65,305 65,305 — — Government bonds 61,825 61,825 — — 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, net of debt issuance costs and other non-cash debt discounts and premiums, of the Company’s primary long-term debt instruments: December 31, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value Revolving credit facilities $ 303,091 $ 303,091 $ 383,630 $ 383,630 Term loan agreement 120,706 120,706 116,174 116,174 Real estate bridge loans 281,039 281,039 313,549 313,549 HUD insured loans 263,827 250,768 241,570 226,983 Notes payable 68,122 68,122 73,829 73,829 Mortgages and other secured debt (recourse) 12,536 12,536 13,235 13,235 Mortgages and other secured debt (non-recourse) 27,978 27,978 29,157 29,157 $ 1,077,299 $ 1,064,240 $ 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 Year ended December 31, 2017 December 31, 2017 Assets: Property and equipment, net $ 3,413,599 $ 191,375 Goodwill 85,642 351,470 Intangible assets, net 142,976 8,576 Impairment Charges - Carrying Value Year ended December 31, 2016 December 31, 2016 Assets: Property and equipment, net $ 3,765,393 $ 32,110 Goodwill 440,712 — Intangible assets, net 175,566 3,321 The fair value allocation related to the Company’s acquisitions and the fair value of tangible and intangible assets related to the Company’s impairment analysis are 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 impact 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. |
Quarterly Financial Information
Quarterly Financial Information | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | (23) The following table summarizes unaudited quarterly financial data for the years ended December 31, 2017 and 2016 (in thousands, except per share data): Quarter ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 Net revenues $ 1,389,132 $ 1,341,276 $ 1,315,452 $ 1,327,880 Net loss attributable to Genesis Healthcare, Inc.: Loss from continuing operations attributable to Genesis Healthcare, Inc. $ (50,740) $ (65,109) (1) $ (373,822) (2) $ (89,279) (3) (Loss) income from discontinued operations, net of taxes (21) (47) (2) 38 Net loss attributable to Genesis Healthcare, Inc. $ (50,761) $ (65,156) $ (373,824) $ (89,241) Loss per common share: Basic and diluted: Net loss attributable to Genesis Healthcare, Inc. (0.55) (0.70) (3.94) (0.92) Shares used in computing loss per common share 91,880 93,273 94,940 96,715 Quarter ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 Net revenues $ 1,472,218 $ 1,438,358 $ 1,418,994 $ 1,402,860 Net (loss) income attributable to Genesis Healthcare, Inc.: (Loss) income from continuing operations attributable to Genesis Healthcare, Inc. $ (43,001) $ (23,034) $ (20,434) $ 22,429 (4) (Loss) income from discontinued operations, net of taxes (38) 61 (24) 28 Net (loss) income attributable to Genesis Healthcare, Inc. $ (43,039) $ (22,973) $ (20,458) $ 22,457 Net (loss) income per common share attributable to Genesis Healthcare, Inc.: Basic (0.48) (0.26) (0.23) 0.25 Diluted (0.48) (0.26) (0.23) 0.24 Weighted-average shares used in computing (loss) income per common share: Basic 89,198 89,421 90,226 90,636 Diluted 89,198 89,421 90,226 92,337 1) The quarter ended June 30, 2017 includes approximately $36 million of customer receivership and other related charges. 2) The quarter ended September 30, 2017 includes approximately $360 million of goodwill and identifiable intangible asset impairments and approximately $163 million of long-lived asset impairments. 3) The quarter ended December 31, 2017 includes approximately $28 million of long-lived asset impairments and approximately $55 million of customer receivership and other related charges. 4) The quarter ended December 31, 2016 includes gains of approximately $160 million associated with the sales of owned assets, divestitures of leased facilities and other lease transactions offset by approximately $35 million associated with long-lived asset impairments. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events. | |
Subsequent Events | (24) Restructuring Transactions Overview Subsequent to December 31, 2017, the Company entered into a number of agreements, amendments and new financing facilities further described below in an effort to strengthen significantly its capital structure. In total, the Restructuring Transactions are estimated to reduce the Company’s annual cash fixed charges by approximately $62 million beginning in 2018 and are estimated to provide $70 million of additional cash and borrowing availability, increasing the Company’s liquidity and financial flexibility. In connection with the Restructuring Transactions, the Company entered into a new asset based lending facility agreement, replacing its prior Revolving Credit Facilities. Also in connection with the Restructuring Transactions, the Company amended the financial covenants in all of its material loan agreements and all but two of its material master leases. Financial covenants beginning in 2018 were amended to account for changes in the Company’s capital structure as a result of the Restructuring Transactions and to account for the current business climate. The Company received waivers from the counterparties to two of its material master leases with respect to compliance with financial covenants from December 31, 2017 through at least March 31, 2019. The Restructuring Transactions have no impact on the consolidated financial statements as of December 31, 2017. The Company is currently assessing the impact the Restructuring Transactions will have on its 2018 consolidated financial statements. New Asset Based Lending Facilities On March 6, 2018, the Company entered into a new asset based lending facility agreement with MidCap Financial Trust (MidCap). The agreement provides for a $555 million asset based lending facility comprised of (a) a $325 million first lien term loan facility, (b) a $200 million first lien revolving credit facility and (c) a $30 million delayed draw term loan facility (collectively, the New ABL Credit Facilities). The New ABL Credit Facilities have a five year term and proceeds were used to replace and repay in full the Company’s existing $525 million Revolving Credit Facilities scheduled to mature on February 2, 2020. Borrowings under the term loan and revolving credit facility components of the New ABL Credit Facilities bear interest at a 90-day LIBOR rate (subject to a floor of 0.5%) plus an applicable margin of 6%. Borrowings under the delayed draw component bear interest at a 90-day LIBOR rate (subject to a floor of 1%) plus an applicable margin of 11%. Borrowing levels under the term loan and revolving credit facility components of the New ABL Credit Facilities are limited to a borrowing base that is computed based upon the level of eligible accounts receivable. The New ABL Credit Facilities contain representations and warranties, affirmative covenants, negative covenants, financial covenants and events of default and security interests that are customarily required for similar financings. Term Loan Amendment On March 6, 2018, the Company entered into an amendment to the Term Loan with affiliates of Welltower and Omega (the Term Loan Amendment) pursuant to which the Company borrowed an additional $40 million to be used for certain debt repayment and general corporate purposes (the 2018 Term Loan). The 2018 Term Loan will mature July 29, 2020 and bears interest at a rate equal to 10.0% per annum, with up to 5% per annum to be paid in kind. The Term Loan Amendment also changes the interest rate applicable to the initial loans funded on July 29, 2016 to be equal to 14% per annum, with up to 9% per annum to be paid in kind. Among other things, the Term Loan Amendment eliminates any principal amortization payments on any of the loans prior to maturity and modifies the financial covenants beginning in 2018. Welltower Master Lease Amendment On February 21, 2018, the Company entered into a definitive agreement with Welltower to amend the Welltower Master Lease (the Welltower Master Lease Amendment). The Welltower Master Lease Amendment reduces the Company’s annual base rent payment by $35 million effective retroactively as of January 1, 2018, reduces the annual rent escalator from approximately 2.9% to 2.5% on April 1, 2018 and further reduces the annual rent escalator to 2.0% beginning January 1, 2019. In addition, the Welltower Master Lease Amendment extends the initial term of the master lease by five years to January 31, 2037 and extends the renewal term of the master lease by five years to December 31, 2048. The Welltower Master Lease Amendment also provides a potential upward rent reset, conditioned upon achievement of certain upside operating metrics, effective January 1, 2023. If triggered, the incremental rent from the rent reset is capped at $35 million. Omnibus Agreement On February 21, 2018, the Company entered into an Omnibus Agreement with Welltower and Omega, pursuant to which Welltower and Omega committed to provide up to $40 million in new term loans and amend the Term Loan Agreement to, among other things, accommodate a refinancing of the Company’s existing asset based credit facility, in each case subject to certain conditions, including the completion of a restructuring of certain of the Company’s other material debt and lease obligations. See Term Loan Amendment above. The Omnibus Agreement also provides that upon satisfying certain conditions, including raising new capital that is used to pay down certain indebtedness owed to Welltower and Omega, (a) $50 million of outstanding indebtedness owed to Welltower will be written off and (b) the Company may request conversion of not more than $50 million of the outstanding balance of the Company’s Welltower Bridge Loans into equity. If the proposed equity conversion would result in any adverse REIT qualification, status or compliance consequences to Welltower, then the debt that would otherwise be converted to equity shall instead be converted into a loan incurring paid in kind interest at 2% per annum compounded quarterly, with a term of ten years commencing on the date the applicable conditions precedent to the equity conversion have been satisfied. Moreover, the Company agreed to support Welltower in connection with the sale of certain of Welltower’s interests in facilities covered by the Welltower Master Lease, including negotiating and entering into definitive new master lease agreements with third party buyers. In connection with the Omnibus Agreement, the Company agreed to issue Welltower a warrant (the Welltower Warrant) to purchase 900,000 shares of the Company’s Class A Common Stock (subject to anti-dilution provisions), par value $0.001 per share, at an exercise price equal to $1.33 per share, which was the closing price of the Company’s Class A Common Stock on March 6, 2018. Issuance of the Welltower Warrant is subject to the satisfaction of certain conditions, including, among others, (i) complete repayment or conversion to equity or forgiveness of the Company’s Welltower Bridge Loans, (ii) consummation of the sale of certain assets such that the Company’s rent obligations pursuant to the Welltower Master Lease is less than $15 million, and (iii) full repayment of any remaining amounts owed by the Company to Omega. The Welltower Warrant may be exercised at any time during the period commencing six months from the date of issuance and ending five years from the date of issuance. Additionally on March 6, 2018, the Company issued Omega a warrant (the Omega Warrant) to purchase 600,000 shares of the Company’s Class A Common Stock (subject to anti-dilution provisions), par value $0.001 per share, at an exercise price equal to $1.33 per share, which was the closing price of the Company’s Class A Common Stock on March 6, 2018. The Omega Warrant may be exercised at any time during the period commencing six months from the date of issuance and ending five years from the date of issuance. Welltower Bridge Loans Amendment On February 21, 2018, the Company entered into an amendment to the Welltower Bridge Loans (the Bridge Loan Amendments). The Bridge Loan Amendments adjust the annual interest rate beginning February 15, 2018 to 12%, of which 7% will be paid in cash and 5% will be paid in kind. Previously, these loans carried a 10.25% cash pay interest rate that increased by 0.25% annually on January 1. In connection with the Bridge Loan Amendments, the Company agreed to make commercially reasonable efforts to secure commitments by April 1, 2018 to repay no less than $105 million of the Welltower Bridge Loan obligations. In the event the Company is unsuccessful securing such commitments or otherwise reducing the outstanding obligation of the Welltower Bridge Loans, the cash pay component of the interest rate will be increased by approximately $2 million annually. |
Schedule II - Valuation Account
Schedule II - Valuation Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation Accounts | GENESIS HEALTHCARE, INC. AND SUBSIDIARIES SCHEDULE II—VALUATION AND QUALIFYING ACCOUNT FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015 Balance at beginning of the Charged to cost Deductions or Balance at end of period and expenses (1) Other payments the period Allowance for loss on accounts receivable Year ended December 31, 2015 $ 133,529 $ 86,224 $ — $ (30,014) $ 189,739 Year ended December 31, 2016 189,739 93,311 (1,655) (63,012) 218,383 Year ended December 31, 2017 218,383 182,947 (2) — (87,974) 313,357 (1) Amounts per year differ from the provision for losses on accounts receivable due to managed care coinsurance reserves and other adjustments which are included in the provision for loss on accounts receivable but not in the allowance for loss on accounts receivable. (2) Amount includes customer receivership and other related charges which is not included in the provision for loss on accounts receivable, but is in the allowance for loss on accounts receivable. |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Estimates and Assumptions | Estimates and Assumptions The consolidated financial statements have been prepared in conformity with U.S. GAAP, which requires management to consolidate company financial information and make informed estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The most significant estimates in the Company’s consolidated financial statements relate to allowance for doubtful accounts, self-insured liability risks, income taxes, impairment of long-lived assets and goodwill, and other contingencies. Actual results could differ from those estimates. |
Net Revenues and Accounts Receivable | Net Revenues and Accounts Receivable Revenues and accounts receivable are recorded on an accrual basis as services are performed at their estimated net realizable value. The Company derives a majority of its revenues from funds under federal Medicare and state Medicaid assistance programs, the continuation of which is dependent upon governmental policies and is subject to audit risk and potential recoupment. The Company also receives payments through reimbursement from Medicaid and Medicare programs and directly from individual residents (private pay), third-party insurers and long-term care facilities. The Company assesses collectibility on all accounts prior to providing services. The Company records revenues for inpatient services and the related receivables in the accounting records at the Company’s established billing rates in the period the related services are rendered. The provision for contractual adjustments, which represents the difference between the established billing rates and predetermined reimbursement rates, is deducted from gross revenues to determine net revenues. Retroactive adjustments that are likely to result from future examinations by third party payors are accrued on an estimated basis in the period the related services are rendered and adjusted as necessary in future periods based upon new information or final settlements. The Company records revenues for rehabilitation therapy services and other ancillary services and the related receivables at the time services or products are provided or delivered to the customer. Upon delivery of services or products, the Company has no additional performance obligation to the customer. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term investments with original maturities of three months or less when purchased and therefore, approximate fair value. The Company’s available cash is held in accounts at commercial banking institutions. The Company currently has bank deposits with commercial banking institutions that exceed Federal Deposit Insurance Corporation insurance limits. |
Restricted Cash and Investments in Marketable Securities | Restricted Cash and Investments in Marketable Securities Restricted cash includes cash and money market funds principally held by the Company’s wholly owned captive insurance subsidiary, which are substantially restricted to securing outstanding claims losses. The restricted cash and investments in marketable securities balances at December 31, 2017 and 2016 were $130.2 million and $156.0 million, respectively. Restricted investments in marketable securities, comprised principally of fixed interest rate securities, are considered to be available-for-sale and accordingly are reported at fair value with unrealized gains and losses, net of related tax effects, included within accumulated other comprehensive loss, a separate component of stockholders’ deficit. Fair values for fixed interest rate securities are based on quoted market prices. A decline in the market value of any security below cost that is deemed other-than-temporary is charged to income, resulting in the establishment of a new cost basis for the security. Realized gains and losses for securities classified as available-for-sale are derived using the specific identification method for determining the cost of securities sold. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company evaluates the adequacy of its allowance for doubtful accounts by estimating allowance requirement percentages for each accounts receivable aging category for each type of payor. The Company has developed estimated allowance requirement percentages by utilizing historical collection trends and its understanding of the nature and collectibility of receivables in the various aging categories and the various lines of the Company’s business. The allowance percentages are developed by payor type as the accounts receivable from each payor type have unique characteristics. The allowance for doubtful accounts also considers accounts specifically identified as uncollectible. Accounts receivable that the Company’s management specifically estimates to be uncollectible, based upon the age of the receivables, the results of collection efforts, or other circumstances, are reserved in the allowance for doubtful accounts until written-off. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation expense is calculated using the straight-line method over the estimated useful lives of the depreciable assets, which generally range from 20-35 years for buildings, building improvements and land improvements, and 3-15 years for equipment, furniture and fixtures. Depreciation expense on leasehold improvements and assets held under capital leases is calculated using the straight-line method over the lesser of the lease term or the estimated useful life of the asset. Expenditures for maintenance and repairs necessary to maintain property and equipment in efficient operating condition are expensed as incurred. Costs of additions and improvements are capitalized. Total depreciation expense for the years ended December 31, 2017, 2016 and 2015 was $238.2 million, $234.7 million, and $218.8 million, respectively. |
Goodwill and Identifiable Intangible Assets | Goodwill and Identifiable Intangible Assets Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. See Note 9 – “ Goodwill and Identifiable Intangible Assets .” Definite-lived intangible assets consist of management contracts, customer relationships and favorable leases. These assets are amortized in accordance with the authoritative guidance for intangible assets using the straight-line method over their estimated useful lives. Indefinite-lived intangible assets primarily consist of trade names. |
Impairment of Long-Lived Assets, Goodwill and Identifiable Intangible Assets | Impairment of Long-Lived Assets, Goodwill and Identifiable Intangible Assets The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset to the future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized to the extent the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or the fair value, less costs to sell. The Company’s goodwill and identifiable intangible assets are reviewed for impairment by measuring the fair value of each reporting unit to determine whether the fair value exceeds the carrying value based upon the market capitalization including a control premium and a discounted cash flow analysis. Determining fair value requires the exercise of significant judgment, including judgment about appropriate discount rates, perpetual growth rates, the amount and timing of expected future cash flows, as well as relevant comparable company earnings multiples for the market-based approach. The cash flows employed in the discounted cash flow analyses are based on the Company’s internal projection model for 2017 and, for years beyond 2017, the growth rates used are an estimate of the future growth in the industry in which the Company participates. The discount rates used in the discounted cash flow analyses are intended to reflect the risks inherent in the future cash flows of the reporting unit and are based on an estimated cost of capital, which was determined based on the Company’s estimated cost of capital relative to its capital structure. In addition, the market-based approach utilizes comparable company public trading values, research analyst estimates and, where available, values observed in private market transactions. The Company performs its annual goodwill and identifiable intangible assets impairment assessment for its reporting units as of September 30 of each year or more frequently if adverse events or changes in circumstances indicate that the asset may be impaired. See Note 19 – “ Asset Impairment Charges .” |
Self-Insurance Reserves | Self-Insurance Reserves The Company provides for self-insurance reserves for both general and professional liability and workers’ compensation claims based on estimates of the ultimate costs for both reported claims and claims incurred but not reported. Estimated losses from asserted and incurred but not reported claims are accrued based on the Company’s estimates of the ultimate costs of the claims, which include costs associated with litigating or settling claims, and the relationship of past reported incidents to eventual claims payments. All relevant information, including the Company’s own historical experience, the nature and extent of existing asserted claims and reported incidents, and independent actuarial analyses of this information is used in estimating the expected amount of claims. The reserves for loss for workers’ compensation risks are discounted based on actuarial estimates of claim payment patterns whereas the reserves for general and professional liability are recorded on an undiscounted basis. The Company also considers amounts that may be recovered from excess insurance carriers in estimating the ultimate net liability for such risks. See Note 21 – “ Commitments and Contingencies – Loss Reserves For Certain Self-Insured Programs – General and Professional Liability and Workers’ Compensation .” |
Income Taxes | Income Taxes The Company’s effective tax rate is based on pretax income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which it operates. The Company accounts for income taxes in accordance with applicable guidance on accounting for income taxes, which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between book and tax bases on recorded assets and liabilities. Accounting guidance also requires that deferred tax assets be reduced by a valuation allowance, when it is more likely than not that a tax benefit will not be realized. The recognition and measurement of a tax position is based on management’s best judgment given the facts, circumstances and information available at the reporting date. The Company evaluates tax positions to determine whether the benefits of tax positions are more likely than not of being sustained upon audit based on the technical merits of the tax position. For tax positions that are more likely than not of being sustained upon audit, the Company recognizes the largest amount of the benefit that is greater than 50% likely of being realized upon ultimate settlement in the financial statements. For tax positions that are not more likely than not of being sustained upon audit, the Company does not recognize any portion of the benefit in the financial statements. If the more likely than not threshold is not met in the period for which a tax position is taken, the Company may subsequently recognize the benefit of that tax position if the tax matter is effectively settled, the statute of limitations expires, or if the more likely than not threshold is met in a subsequent period. The Company evaluates, on a quarterly basis, its ability to realize deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization are its forecast of pre-tax earnings, its forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. To the extent the Company prevails in matters for which reserves have been established, or are required to pay amounts in excess of its reserves, its effective tax rate in a given financial statement period could be materially affected. An unfavorable tax settlement would require use of cash and result in an increase in the effective tax rate in the year of resolution. A favorable tax settlement would be recognized as a reduction in the Company’s effective tax rate in the year of resolution. The Company records accrued interest and penalties associated with uncertain tax positions as income tax expense in the consolidated statement of operations. |
Leases | Leases Leasing transactions are a material part of the Company’s business. The following discussion summarizes various aspects of the Company’s accounting for leasing transactions and the related balances. Capital Leases Lease arrangements are capitalized when such leases convey substantially all the risks and benefits incidental to ownership. Capital leases are amortized over either the lease term or the life of the related assets, depending upon available purchase options and lease renewal features. Amortization related to capital lease assets is included in the consolidated statements of operations within depreciation and amortization expense. See Note 11 – “ Lease and Lease Commitments .” Operating Leases For operating leases, minimum lease payments, including minimum scheduled rent increases, are recognized as lease expense on a straight-line basis over the applicable lease terms and any periods during which the Company has use of the property but is not charged rent by a landlord. A majority of the Company’s leases, provide for rent escalations and renewal options. When the Company purchases businesses that have lease agreements accounted for as operating leases, it recognizes the fair value of the lease arrangements as either favorable or unfavorable and records these amounts as other identifiable intangible assets or other long-term liabilities, respectively. Favorable and unfavorable leases are amortized to lease expense on a straight-line basis over the remaining term of the leases. See Note 11 – “ Lease and Lease Commitments .” Sale/Leaseback Financing Obligation Prior to recognition as a sale, or profit/loss thereon, sale/leaseback transactions are evaluated to determine if their terms transfer all of the risks and rewards of ownership as demonstrated by the absence of any other continuing involvement by the seller-lessee. A sale/leaseback transaction that does not qualify for sale/leaseback accounting because of any form of continuing involvement by the seller-lessee is accounted for as a financing transaction. Under the financing method: (1) the assets and accumulated depreciation remain on the consolidated balance sheet and continue to be depreciated over the remaining useful lives; (2) no gain is recognized; and (3) proceeds received by the Company from these transactions are recorded as a financing obligation. See Note 12 – “ Financing Obligations .” |
Earnings (Loss) Per Common Share | Earnings (Loss) Per Common Share Earnings (loss) per common share are based upon the weighted average number of common shares outstanding during the respective periods. The Company follows the provisions of the authoritative guidance for determining whether instruments granted in share-based payment transactions are participating securities for purposes of calculating earnings per common share. See Note 5 – “ Loss Per Share .” |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes compensation expense related to stock-based compensation awards in accordance with the related authoritative guidance. See Note 14 – “ Stock-Based Compensation .” |
Recent Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which serves to supersede most existing revenue recognition guidance, including guidance specific to the healthcare industry. The FASB later issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations , in March 2016, ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing , in April 2016, ASU 2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients, in May 2016, and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers , in December 2016, all of which further clarified aspects of Topic 606. The standard provides a principles-based framework for recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and requires enhanced disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the requirements of this standard effective January 1, 2018 using the modified retrospective method applied to those contracts which were not completed as of that date. The cumulative effect on the opening balance of retained earnings as a result of adopting the standard is not material. The new standard will impact amounts presented in certain categories on its consolidated statements of operations, as upon adoption, the majority of amounts currently classified as bad debt expense will be reflected as implicit price concessions, and therefore an adjustment to net revenues. Other than as described above, the standard will not have a material impact on its consolidated financial position, results of operations and cash flows. However, there will be expanded disclosures required. 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 statements. 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 financial statements. 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 financial statements. 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 does not expect the adoption of ASU 2017-01 to have a material impact on its consolidated financial condition and results of operations. |
Certain Significant Risks and34
Certain Significant Risks and Uncertainties (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Certain Significant Risks and Uncertainties | |
Schedule of Revenue by Source | Year ended December 31, 2017 2016 2015 Medicare 23 % 24 % 26 % Medicaid 56 % 55 % 53 % Insurance 12 % 11 % 11 % Private and other 9 % 10 % 10 % Total 100 % 100 % 100 % |
Significant Transactions and 35
Significant Transactions and Events (Tables) - FC-GEN Operations Investment, LLC | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Consideration Price and Related Allocation (in thousands) | Accounts receivable $ 114,032 Deferred income taxes and other current assets 39,586 Property, plant and equipment 488,528 Weighted Average Life Identifiable intangible assets: (Years) Management contracts 30,900 3.5 Customer relationships 13,400 Favorable lease contracts 18,110 12.8 Trade names 3,400 Indefinite Total identifiable intangible assets 65,810 Deferred income taxes and other assets 76,461 Accounts payable and other current liabilities (121,479) Long-term debt, including amounts due within one year (428,453) Unfavorable lease contracts (11,480) Deferred income taxes and other long-term liabilities (141,914) Total identifiable net assets 81,091 Goodwill 267,050 Net assets $ 348,141 |
Unaudited Pro Forma Net Effect of the Combination (in thousands, except per share amounts) | Year ended December 31, 2015 Revenues $ 5,690,512 Loss attributable to Genesis Healthcare, Inc. (315,329) Loss per common share: Basic $ (3.54) Diluted $ (3.54) |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Loss Per Share | |
Schedule of reconciliation of the numerator and denominator used in the calculation of basic net loss per common share | Year ended December 31, 2017 2016 2015 Numerator: Loss from continuing operations $ (959,172) $ (118,078) $ (525,549) Less: Net loss attributable to noncontrolling interests (380,222) (54,038) (100,573) Loss from continuing operations attributable to Genesis Healthcare, Inc. $ (578,950) $ (64,040) $ (424,976) (Loss) income from discontinued operations, net of taxes (32) 27 (1,219) Net loss attributable to Genesis Healthcare, Inc. $ (578,982) $ (64,013) $ (426,195) Denominator: Weighted-average shares outstanding for basic net loss per share 94,217 89,873 85,755 Basic net loss per common share: Loss from continuing operations attributable to Genesis Healthcare, Inc. $ (6.15) $ (0.71) $ (4.96) (Loss) income from discontinued operations, net of taxes (0.00) 0.00 (0.01) Net loss attributable to Genesis Healthcare, Inc. $ (6.15) $ (0.71) $ (4.97) |
Schedule of reconciliation of the numerator and denominator used in the calculation of diluted net loss per common share | Year ended December 31, 2017 2016 2015 Numerator: Loss from continuing operations $ (959,172) $ (118,078) $ (525,549) Less: Net (loss) income attributable to noncontrolling interests (380,222) (54,038) (100,573) Loss from continuing operations attributable to Genesis Healthcare, Inc. $ (578,950) $ (64,040) $ (424,976) (Loss) income from discontinued operations, net of taxes (32) 27 (1,219) Net loss attributable to Genesis Healthcare, Inc. $ (578,982) $ (64,013) $ (426,195) Plus: Exchange of restricted stock units of noncontrolling interests — (61,258) — Net loss available to common stockholders after assumed conversions $ (578,982) $ (125,271) $ (426,195) Denominator: Weighted-average shares outstanding for diluted net loss per share 94,217 89,873 85,755 Effect of dilutive shares: Exchange of restricted stock units of noncontrolling interests — 64,340 — Employee and director unvested restricted stock units — (1,681) — Dilutive potential common shares — 62,659 — Adjusted weighted-average common shares outstanding, diluted 94,217 152,532 85,755 Diluted net loss per common share: Loss from continuing operations attributable to Genesis Healthcare, Inc. $ (6.15) $ (0.82) $ (4.96) (Loss) income from discontinued operations, net of taxes (0.00) 0.00 (0.01) Net loss attributable to Genesis Healthcare, Inc. $ (6.15) $ (0.82) $ (4.97) |
Schedule of Anti-dilutive Securities (in thousands) | Year ended December 31, 2017 2016 2015 Net loss Net loss Net loss attributable to attributable to attributable to Genesis Anti-dilutive Genesis Anti-dilutive Genesis Antidilutive Healthcare, Inc. shares Healthcare, Inc. shares Healthcare, Inc. shares Exchange of restricted stock units of noncontrolling interests $ (375,883) 61,973 $ — — $ (54,761) 58,810 Employee and director unvested restricted stock units — 887 — 1,715 — 124 Convertible note — — 11 74 — — Stock Warrants — 25 — — — — |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information | |
Summary of Segmented Revenues | Year ended December 31, 2017 2016 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage Revenues: Inpatient services: Skilled nursing facilities $ 4,522,738 84.1 % $ 4,783,117 83.4 % $ (260,379) (5.4) % Assisted/Senior living facilities 96,109 1.8 % 115,956 2.0 % (19,847) (17.1) % Administration of third party facilities 8,991 0.2 % 10,969 0.2 % (1,978) (18.0) % Elimination of administrative services (1,536) — % (1,406) — % (130) 9.2 % Inpatient services, net 4,626,302 86.1 % 4,908,636 85.6 % (282,334) (5.8) % Rehabilitation therapy services: Total therapy services 983,370 18.3 % 1,070,314 18.7 % (86,944) (8.1) % Elimination intersegment rehabilitation therapy services (379,764) (7.1) % (408,687) (7.1) % 28,923 (7.1) % Third party rehabilitation therapy services 603,606 11.2 % 661,627 11.6 % (58,021) (8.8) % Other services: Total other services 178,573 3.3 % 185,521 3.2 % (6,948) (3.7) % Elimination intersegment other services (34,741) (0.6) % (23,354) (0.4) % (11,387) 48.8 % Third party other services 143,832 2.7 % 162,167 2.8 % (18,335) (11.3) % Net revenues $ 5,373,740 100.0 % $ 5,732,430 100.0 % $ (358,690) (6.3) % Year ended December 31, 2016 2015 Increase / (Decrease) Revenue Revenue Revenue Revenue Dollars Percentage Dollars Percentage Dollars Percentage Revenues: Inpatient services: Skilled nursing facilities $ 4,783,117 83.4 % $ 4,597,671 81.7 % $ 185,446 4.0 % Assisted/Senior living facilities 115,956 2.0 % 143,321 2.6 % (27,365) (19.1) % Administration of third party facilities 10,969 0.2 % 9,488 0.2 % 1,481 15.6 % Elimination of administrative services (1,406) — % (1,800) — % 394 (21.9) % Inpatient services, net 4,908,636 85.6 % 4,748,680 84.5 % 159,956 3.4 % Rehabilitation therapy services: Total therapy services 1,070,314 18.7 % 1,099,130 19.6 % (28,816) (2.6) % Elimination intersegment rehabilitation therapy services (408,687) (7.1) % (429,828) (7.6) % 21,141 (4.9) % Third party rehabilitation therapy services 661,627 11.6 % 669,302 11.9 % (7,675) (1.1) % Other services: Total other services 185,521 3.2 % 240,350 4.3 % (54,829) (22.8) % Elimination intersegment other services (23,354) (0.4) % (39,108) (0.7) % 15,754 (40.3) % Third party other services 162,167 2.8 % 201,242 3.6 % (39,075) (19.4) % Net revenues $ 5,732,430 100.0 % $ 5,619,224 100.0 % $ 113,206 2.0 % |
Summaries of Condensed Consolidated Statements of Operations, Total Assets and Goodwill | Year ended December 31, 2017 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 4,627,838 $ 983,370 $ 178,073 $ 500 $ (416,041) $ 5,373,740 Salaries, wages and benefits 2,098,249 823,668 114,951 — — 3,036,868 Other operating expenses 1,765,752 74,683 59,999 — (416,040) 1,484,394 General and administrative costs — — — 170,029 — 170,029 Provision for losses on accounts receivable 84,349 13,232 1,139 (2,311) — 96,409 Lease expense 144,554 — 1,211 1,760 — 147,525 Depreciation and amortization expense 223,443 14,711 675 16,957 — 255,786 Interest expense 415,162 56 37 84,127 — 499,382 Gain on early extinguishment of debt — — — (6,566) — (6,566) Investment income — — — (5,328) — (5,328) Other loss (income) 7,802 732 180 (241) — 8,473 Transaction costs — — — 14,325 — 14,325 Customer receivership and other related charges — 90,864 — — — 90,864 Long-lived asset impairments 189,494 1,881 — — — 191,375 Goodwill and identifiable intangible asset impairments 360,046 — — — — 360,046 Equity in net (income) loss of unconsolidated affiliates — — — (2,183) 1,940 (243) (Loss) income before income tax benefit (661,013) (36,457) (119) (270,069) (1,941) (969,599) Income tax benefit — — — (10,427) — (10,427) (Loss) income from continuing operations $ (661,013) $ (36,457) $ (119) $ (259,642) $ (1,941) $ (959,172) Year ended December 31, 2016 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 4,910,042 $ 1,070,314 $ 184,775 $ 746 $ (433,447) $ 5,732,430 Salaries, wages and benefits 2,342,362 901,578 125,773 — — 3,369,713 Other operating expenses 1,720,199 79,056 47,831 — (433,447) 1,413,639 General and administrative costs — — — 186,062 — 186,062 Provision for losses on accounts receivable 89,838 16,905 1,260 (188) — 107,815 Lease expense 142,717 89 1,490 1,948 — 146,244 Depreciation and amortization expense 223,007 12,288 970 18,194 — 254,459 Interest expense 434,938 57 39 93,510 — 528,544 Loss on early extinguishment of debt — — — 16,290 — 16,290 Investment income — — — (3,018) — (3,018) Other (income) loss (204,977) (1,112) (43,231) 42,250 — (207,070) Transaction costs — — — 7,928 — 7,928 Long-lived asset impairments 32,110 — — — — 32,110 Goodwill and identifiable intangible asset impairments 3,321 — — — — 3,321 Skilled Healthcare and other loss contingency expense — — — 15,192 — 15,192 Equity in net (income) loss of unconsolidated affiliates — — — (5,452) 2,166 (3,286) Income (loss) before income tax benefit 126,527 61,453 50,643 (371,970) (2,166) (135,513) Income tax benefit — — — (17,435) — (17,435) Income (loss) from continuing operations $ 126,527 $ 61,453 $ 50,643 $ (354,535) $ (2,166) $ (118,078) Year ended December 31, 2015 Rehabilitation Inpatient Therapy Other Services Services Services Corporate Eliminations Consolidated Net revenues $ 4,750,480 $ 1,099,130 $ 238,585 $ 1,765 $ (470,736) $ 5,619,224 Salaries, wages and benefits 2,248,197 898,226 143,397 — — 3,289,820 Other operating expenses 1,684,487 74,210 70,770 — (470,484) 1,358,983 General and administrative costs — — — 175,889 — 175,889 Provision for losses on accounts receivable 80,998 17,604 2,704 (785) — 100,521 Lease expense 146,329 106 2,316 1,779 (254) 150,276 Depreciation and amortization expense 206,026 12,931 1,227 17,433 — 237,617 Interest expense 423,393 31 40 84,635 (290) 507,809 Loss on early extinguishment of debt — — — 130 — 130 Investment (income) loss — — — (1,967) 290 (1,677) Other loss (income) 1,165 — — (2,565) — (1,400) Transaction costs — — — 96,374 — 96,374 Long-lived asset impairments 26,768 — — — — 26,768 Goodwill and identifiable intangible asset impairments 1,778 — — — — 1,778 Skilled Healthcare and other loss contingency expense — — — 31,500 — 31,500 Equity in net (income) loss of unconsolidated affiliates — — — (3,931) 1,792 (2,139) (Loss) income before income tax expense (68,661) 96,022 18,131 (396,727) (1,790) (353,025) Income tax expense — — — 172,524 — 172,524 (Loss) income from continuing operations $ (68,661) $ 96,022 $ 18,131 $ (569,251) $ (1,790) $ (525,549) The following table presents the segment assets as of December 31, 2017 compared to December 31, 2016 (in thousands): December 31, 2017 December 31, 2016 Inpatient services $ 4,303,370 $ 5,194,811 Rehabilitation therapy services 351,711 454,723 Other services 50,127 67,348 Corporate and eliminations 82,657 62,319 Total assets $ 4,787,865 $ 5,779,201 The following table presents segment goodwill as of December 31, 2017 compared to December 31, 2016 (in thousands): December 31, 2017 December 31, 2016 Inpatient services $ — $ 355,070 Rehabilitation therapy services 73,814 73,814 Other services 11,828 11,828 Total goodwill $ 85,642 $ 440,712 |
Restricted Cash and Investmen38
Restricted Cash and Investments in Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restricted Cash and Investments in Marketable Securities [Abstract] | |
Schedule of Restricted Cash and Investments in Marketable Securities | Restricted cash and investments in marketable securities at December 31, 2017 consist of the following (in thousands): Unrealized losses Amortized Unrealized Less than Greater than cost gains 12 months 12 months Fair value Restricted cash and equivalents: Cash $ 4,103 $ — $ — $ — $ 4,103 Money market funds 10 — — — 10 Restricted investments in marketable securities: Mortgage/government backed securities 7,956 — — (108) 7,848 Corporate bonds 52,528 26 (106) (123) 52,325 Government bonds 65,842 509 (86) (322) 65,943 $ 130,439 $ 535 $ (192) $ (553) 130,229 Less: Current portion of restricted investments (37,128) Long-term restricted investments $ 93,101 Restricted cash and investments in marketable securities at December 31, 2016 consist of the following (in thousands): Unrealized losses Amortized Unrealized Less than Greater than cost gains 12 months 12 months Fair value Restricted cash and equivalents: Cash $ 11,515 $ — $ — $ — $ 11,515 Money market funds 537 — — — 537 Restricted investments in marketable securities: Mortgage/government backed securities 16,947 9 (16) (96) 16,844 Corporate bonds 65,563 68 (43) (283) 65,305 Government bonds 61,399 699 (60) (213) 61,825 $ 155,961 $ 776 $ (119) $ (592) 156,026 Less: Current portion of restricted investments (43,555) Long-term restricted investments $ 112,471 |
Schedule of Maturities of Restricted Investments in Marketable Securities | Amortized Fair cost value Due in one year or less $ 48,462 $ 48,673 Due after 1 year through 5 years 75,014 74,567 Due after 5 years through 10 years — — Due after 10 years 2,850 2,876 $ 126,326 $ 126,116 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment (in thousands) | December 31, 2017 December 31, 2016 Land, buildings and improvements $ 591,022 $ 673,092 Capital lease land, buildings and improvements 752,657 818,273 Financing obligation land, buildings and improvements 2,525,551 2,584,178 Equipment, furniture and fixtures 453,230 447,767 Construction in progress 30,294 49,859 Gross property and equipment 4,352,754 4,573,169 Less: accumulated depreciation (939,155) (807,776) Net property and equipment $ 3,413,599 $ 3,765,393 |
Goodwill and Identifiable Int40
Goodwill and Identifiable Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Value of Goodwill (in thousands) | Inpatient Rehabilitation Therapy Services Other Services Consolidated Balance at January 1, 2016 $ 357,649 $ 73,098 $ 39,272 $ 470,019 Acquisition from Revera 3,354 — — 3,354 Other additions — 716 — 716 Goodwill associated with assets held for sale (5,933) — — (5,933) Sale of hospice and home health — — (27,444) (27,444) Balance at December 31, 2016 Goodwill 355,070 73,814 11,828 440,712 Accumulated impairment losses — — — — $ 355,070 $ 73,814 $ 11,828 $ 440,712 Goodwill associated with divestitures (3,600) — — (3,600) Balance at December 31, 2017 Goodwill 351,470 73,814 11,828 437,112 Accumulated impairment losses (351,470) — — (351,470) $ — $ 73,814 $ 11,828 $ 85,642 |
Schedule of identifiable intangible assets (in thousands) | December 31, 2017 Weighted Average Remaining Life (Years) Customer relationship assets, net of accumulated amortization of $55,285 $ 57,548 8 Favorable leases, net of accumulated amortization of $33,051 34,872 10 Trade names 50,556 Indefinite Identifiable intangible assets $ 142,976 December 31, 2016 Weighted Average Remaining Life (Years) Customer relationship assets, net of accumulated amortization of $43,862 $ 67,348 9 Management contracts, net of accumulated amortization of $17,872 14,651 2 Favorable leases, net of accumulated amortization of $29,421 43,011 10 Trade names 50,556 Indefinite Identifiable intangible assets $ 175,566 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Long-Term Debt Abstract | |
Schedule of Long-term Debt (in thousands) | December 31, 2017 December 31, 2016 Revolving credit facilities, net of debt issuance costs of $10,109 and $9,220 at December 31, 2017 and December 31, 2016, respectively $ 303,091 $ 383,630 Term loan agreement, net of debt issuance costs of $3,020 and $3,859 at December 31, 2017 and December 31, 2016, respectively 120,706 116,174 Real estate bridge loans, net of debt issuance costs of $3,486 and $4,400 at December 31, 2017 and December 31, 2016, respectively 281,039 313,549 HUD insured loans, net of debt issuance costs of $5,590 and $4,773 at December 31, 2017 and December 31, 2016, respectively 263,827 241,570 Notes payable, net of convertible debt discount of $0 and $990 at December 31, 2017 and December 31, 2016, respectively 68,122 73,829 Mortgages and other secured debt (recourse) 12,536 13,235 Mortgages and other secured debt (non-recourse), net of debt issuance costs of $99 and $131 at December 31, 2017 and December 31, 2016, respectively 27,978 29,157 1,077,299 1,171,144 Less: Current installments of long-term debt (26,962) (24,594) Long-term debt $ 1,050,337 $ 1,146,550 |
Schedule of Borrowings and Interest Rates (dollars in thousands) | Weighted Average Revolving Credit Facilities Commitment Borrowings Interest Tranche A-1 $ 485,000 $ 292,800 5.34 % HUD tranche 40,000 20,400 4.82 % $ 525,000 $ 313,200 5.31 % |
Schedule of Maturity of Total Debt (in thousands) | Twelve months ended December 31, 2018 $ 27,717 2019 18,282 2020 497,810 2021 18,916 2022 281,104 Thereafter 240,564 Total debt maturity $ 1,084,393 |
Leases and Lease Commitments (T
Leases and Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases and Lease Commitments | |
Schedule of Future Minimum Capital and Operating Lease Payments (in thousands) | Twelve months ended December 31, Capital Leases Operating Leases 2018 $ 91,660 $ 121,886 2019 94,419 118,714 2020 93,909 118,703 2021 96,070 113,156 2022 98,302 89,368 Thereafter 3,446,959 248,212 Total future minimum lease payments 3,921,319 $ 810,039 Less amount representing interest (2,893,453) Capital lease obligation 1,027,866 Less current portion (2,511) Long-term capital lease obligation $ 1,025,355 |
Financing Obligation (Tables)
Financing Obligation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Financing Obligation | |
Schedule of Future Minimum Financing Lease Payments (in thousands) | Twelve months ended December 31, 2018 $ 277,492 2019 283,715 2020 290,463 2021 295,822 2022 294,900 Thereafter 7,884,986 Total future minimum lease payments 9,327,378 Less amount representing interest (6,396,017) Financing obligations $ 2,931,361 Less current portion (1,878) Long-term financing obligations $ 2,929,483 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of PSU valuation assumptions | The Company’s Monte-Carlo fair value assumptions are as follows: December 31, 2017 December 31, 2016 December 31, 2015 Expected term, in years Risk-free interest rate Volatility 45% - 55% Dividends N/A N/A N/A |
Schedule of Nonvested Share Activity | Number of Units Weighted-Average Grant Date Fair Value Time-based Time and Market-based Time-based Time and Market-based Non-vested balance at January 1, 2017 4,619 3,706 $ 3.25 $ 1.84 Granted 2,281 1,563 1.70 1.12 Vested (2,018) — 3.43 — Forfeited (198) (287) 3.42 2.11 Non-vested balance at December 31, 2017 4,684 4,982 $ 2.41 $ 1.60 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of total income tax (benefit) expense by income category | Year ended December 31, 2017 2016 2015 Continuing operations $ (10,427) $ (17,435) $ 172,524 Discontinued operations 48 8 (885) Stockholder's deficit (67) (82) (212) Total $ (10,446) $ (17,509) $ 171,427 |
Schedule of Components of Income Tax Expense (Benefit) | Year ended December 31, 2017 2016 2015 Current: Federal $ 1,592 $ (22,473) $ 5,151 State 157 (2,096) 1,738 1,749 (24,569) 6,889 Deferred: Federal (12,304) 5,785 134,151 State 128 1,349 31,484 (12,176) 7,134 165,635 Total $ (10,427) $ (17,435) $ 172,524 |
Schedule of Effective Income Tax Rate Reconciliation | Year ended December 31, 2017 2016 2015 Computed “expected” benefit $ (339,359) $ (47,430) $ (123,560) (Reduction) increase in income taxes resulting from: State and local income taxes, net of federal tax benefit 149 (2,096) 1,738 Adjustment to income taxes for income not subject to corporate income tax — — 34,196 Income tax credits (2,840) (3,695) (2,469) Goodwill impairment write-off 53,688 — — Non-controlling interest 138,331 20,012 39,843 Adjustment to deferred taxes, including credits and valuation allowance 139,324 41,172 225,259 FIN 48 (81) (26,355) 760 Other, net 361 957 (3,243) Total income tax (benefit) expense $ (10,427) $ (17,435) $ 172,524 |
Schedule of Deferred Tax Assets and Liabilities | 2017 2016 Deferred tax assets: Investment in partnership 156,049 160,610 Net operating loss carryforwards 80,615 93,696 Discounted unpaid loss reserve 3,147 6,107 Other intangible 3,542 1,191 General business credits 24,325 25,066 Total deferred tax assets 267,678 286,670 Valuation allowance (264,098) (280,563) Deferred tax assets, net of valuation allowance 3,580 6,107 Deferred tax liabilities: Long-lived assets: intangible property (7,584) (22,354) Total deferred tax liabilities (7,584) (22,354) Net deferred tax liabilities (4,004) (16,247) |
Schedule of Unrecognized Tax Benefits Roll Forward | Balance, December 31, 2014 $ 24,233 Additions recorded in purchase accounting 59 Balance, December 31, 2015 $ 24,292 Reductions due to lapses of applicable statute of limitations (24,213) Balance, December 31, 2016 $ 79 Additions based upon tax positions related to the current year 36 Balance, December 31, 2017 $ 115 |
Other Income (Tables)
Other Income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Summary of Net Gains Recorded In Other Income | Year ended December 31, 2017 2016 2015 Gain on sale of hospice and home health $ — $ (43,420) $ — Gain on sale of investment in joint venture — (3,910) (8,359) Gain on escrow receipt associated with terminated sale agreement — (5,000) — Loss (gain) on sale of other owned assets, net 6,932 (220) 5,895 Gain on leased facilities sold to new landlord and operating under new lease agreements (8,466) (134,090) — Loss (gain) on divested facilities terminated from lease agreements 5,799 (20,430) 1,064 Loss on closure of facility subject to lease agreements 146 — — Loss on a cease to use asset associated with a facility sublease 4,062 — — Total other loss (income) $ 8,473 $ (207,070) $ (1,400) |
Assets Held for Sale and Discon
Assets Held for Sale and Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | |
Summary of Balance Sheet and Income Statement Information for Disposal Group and Discontinued Operations | December 31, 2016 Current assets: Prepaid expenses $ 4,056 Long-term assets: Property and equipment, net of accumulated depreciation of $10,792 76,430 Goodwill 5,933 Total assets $ 86,419 Current liabilities: Current installments of long-term debt $ 988 Long-term liabilities: Long-term debt 69,057 Total liabilities $ 70,045 |
Fair Value of Financial Instr48
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value of Financial Instruments | |
Schedule of Fair Value of Assets Measured on a Recurring Basis (in thousands) | Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs Assets: 2017 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 54,525 $ 54,525 $ — $ — Restricted cash and equivalents 4,113 4,113 — — Restricted investments in marketable securities: Mortgage/government backed securities 7,848 7,848 — — Corporate bonds 52,325 52,325 — — Government bonds 65,943 65,943 — — Total $ 184,754 $ 184,754 $ — $ — 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: Mortgage/government backed securities 16,844 16,844 — — Corporate bonds 65,305 65,305 — — Government bonds 61,825 61,825 — — Total $ 207,434 $ 207,434 $ — $ — |
Schedule of Carrying Amounts and Estimated Fair Values of Long-term Debt Instruments | December 31, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value Revolving credit facilities $ 303,091 $ 303,091 $ 383,630 $ 383,630 Term loan agreement 120,706 120,706 116,174 116,174 Real estate bridge loans 281,039 281,039 313,549 313,549 HUD insured loans 263,827 250,768 241,570 226,983 Notes payable 68,122 68,122 73,829 73,829 Mortgages and other secured debt (recourse) 12,536 12,536 13,235 13,235 Mortgages and other secured debt (non-recourse) 27,978 27,978 29,157 29,157 $ 1,077,299 $ 1,064,240 $ 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 Year ended December 31, 2017 December 31, 2017 Assets: Property and equipment, net $ 3,413,599 $ 191,375 Goodwill 85,642 351,470 Intangible assets, net 142,976 8,576 Impairment Charges - Carrying Value Year ended December 31, 2016 December 31, 2016 Assets: Property and equipment, net $ 3,765,393 $ 32,110 Goodwill 440,712 — Intangible assets, net 175,566 3,321 |
Quarterly Financial Informati49
Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Quarter ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 Net revenues $ 1,389,132 $ 1,341,276 $ 1,315,452 $ 1,327,880 Net loss attributable to Genesis Healthcare, Inc.: Loss from continuing operations attributable to Genesis Healthcare, Inc. $ (50,740) $ (65,109) (1) $ (373,822) (2) $ (89,279) (3) (Loss) income from discontinued operations, net of taxes (21) (47) (2) 38 Net loss attributable to Genesis Healthcare, Inc. $ (50,761) $ (65,156) $ (373,824) $ (89,241) Loss per common share: Basic and diluted: Net loss attributable to Genesis Healthcare, Inc. (0.55) (0.70) (3.94) (0.92) Shares used in computing loss per common share 91,880 93,273 94,940 96,715 Quarter ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 Net revenues $ 1,472,218 $ 1,438,358 $ 1,418,994 $ 1,402,860 Net (loss) income attributable to Genesis Healthcare, Inc.: (Loss) income from continuing operations attributable to Genesis Healthcare, Inc. $ (43,001) $ (23,034) $ (20,434) $ 22,429 (4) (Loss) income from discontinued operations, net of taxes (38) 61 (24) 28 Net (loss) income attributable to Genesis Healthcare, Inc. $ (43,039) $ (22,973) $ (20,458) $ 22,457 Net (loss) income per common share attributable to Genesis Healthcare, Inc.: Basic (0.48) (0.26) (0.23) 0.25 Diluted (0.48) (0.26) (0.23) 0.24 Weighted-average shares used in computing (loss) income per common share: Basic 89,198 89,421 90,226 90,636 Diluted 89,198 89,421 90,226 92,337 1) The quarter ended June 30, 2017 includes approximately $36 million of customer receivership and other related charges. 2) The quarter ended September 30, 2017 includes approximately $360 million of goodwill and identifiable intangible asset impairments and approximately $163 million of long-lived asset impairments. 3) The quarter ended December 31, 2017 includes approximately $28 million of long-lived asset impairments and approximately $55 million of customer receivership and other related charges. 4) The quarter ended December 31, 2016 includes gains of approximately $160 million associated with the sales of owned assets, divestitures of leased facilities and other lease transactions offset by approximately $35 million associated with long-lived asset impairments. |
General Information (Details)
General Information (Details) $ in Millions | Jan. 01, 2018USD ($)leaseitem | Dec. 31, 2017statefacility | Dec. 31, 2016 | Dec. 31, 2015 |
Going concern | ||||
Term Of Forbearance Agreement | 90 days | |||
Subsequent Events | ||||
Going concern | ||||
Estimated reduction to annual cash fixed charges | $ 62 | |||
Estimated additional cash and borrowing availability | $ 70 | |||
Number of material master leases that did not amend financial covenants | lease | 2 | |||
Number of counterparties issuing compliance waivers | item | 2 | |||
Revenue | ||||
Concentration risk | ||||
Concentration risk (as a percent) | 100.00% | 100.00% | 100.00% | |
Rehabilitation therapy service | Revenue | ||||
Concentration risk | ||||
Concentration risk (as a percent) | 11.20% | 11.60% | 11.90% | |
Rehabilitation therapy service | Revenue | Product Concentration Risk | ||||
Concentration risk | ||||
Concentration risk (as a percent) | 11.00% | |||
Inpatient Services | ||||
Facility Count | ||||
Number of skilled nursing, assisted/senior living and behavioral health centers through which inpatient services are provided | facility | 470 | |||
Number of states with facilities | state | 30 | |||
Inpatient Services | Revenue | ||||
Concentration risk | ||||
Concentration risk (as a percent) | 86.10% | 85.60% | 84.50% | |
Inpatient Services | Revenue | Product Concentration Risk | ||||
Concentration risk | ||||
Concentration risk (as a percent) | 86.00% |
Summary of Significant Accoun51
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment | |||
Depreciation expense | $ 238.2 | $ 234.7 | $ 218.8 |
Restricted Cash and Investments in Marketable Securities | |||
Restricted cash and investments in marketable securities | $ 130.2 | $ 156 | |
Buildings and improvements | Minimum | |||
Property, Plant and Equipment | |||
Property and equipment, useful life | 20 years | ||
Buildings and improvements | Maximum | |||
Property, Plant and Equipment | |||
Property and equipment, useful life | 35 years | ||
Land Improvements [Member] | Minimum | |||
Property, Plant and Equipment | |||
Property and equipment, useful life | 20 years | ||
Land Improvements [Member] | Maximum | |||
Property, Plant and Equipment | |||
Property and equipment, useful life | 35 years | ||
Equipment [Member] | Minimum | |||
Property, Plant and Equipment | |||
Property and equipment, useful life | 3 years | ||
Equipment [Member] | Maximum | |||
Property, Plant and Equipment | |||
Property and equipment, useful life | 15 years | ||
Furniture and Fixtures [Member] | Minimum | |||
Property, Plant and Equipment | |||
Property and equipment, useful life | 3 years | ||
Furniture and Fixtures [Member] | Maximum | |||
Property, Plant and Equipment | |||
Property and equipment, useful life | 15 years |
Certain Significant Risks and52
Certain Significant Risks and Uncertainties - Revenue Sources (Details) - Revenue | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue Sources | |||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% |
Inpatient Services | |||
Revenue Sources | |||
Concentration Risk, Percentage | 86.10% | 85.60% | 84.50% |
Government contracts | Inpatient Services | |||
Revenue Sources | |||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% |
Government contracts | Medicare and Medicaid | Inpatient Services | |||
Revenue Sources | |||
Concentration Risk, Percentage | 79.00% | ||
Government contracts | Medicare | Inpatient Services | |||
Revenue Sources | |||
Concentration Risk, Percentage | 23.00% | 24.00% | 26.00% |
Government contracts | Medicaid | Inpatient Services | |||
Revenue Sources | |||
Concentration Risk, Percentage | 56.00% | 55.00% | 53.00% |
Government contracts | Insurance | Inpatient Services | |||
Revenue Sources | |||
Concentration Risk, Percentage | 12.00% | 11.00% | 11.00% |
Government contracts | Private and Other | Inpatient Services | |||
Revenue Sources | |||
Concentration Risk, Percentage | 9.00% | 10.00% | 10.00% |
Certain Significant Risks and53
Certain Significant Risks and Uncertainties - Concentration of Credit Risk (Detais) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017USD ($) | Jul. 31, 2017statefacility | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)customer | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Concentration Risk | |||||||||||||
Customer receivership and other related charges | $ 55,000 | $ 36,000 | $ 90,864 | ||||||||||
Net revenues | 1,327,880 | $ 1,315,452 | 1,341,276 | $ 1,389,132 | $ 1,402,860 | $ 1,418,994 | $ 1,438,358 | $ 1,472,218 | 5,373,740 | $ 5,732,430 | $ 5,619,224 | ||
(Loss) income from continuing operations | (89,279) | $ (373,822) | $ (65,109) | $ (50,740) | $ 22,429 | $ (20,434) | $ (23,034) | $ (43,001) | (959,172) | (118,078) | (525,549) | ||
Rehabilitation therapy service | |||||||||||||
Concentration Risk | |||||||||||||
Net revenues | 603,606 | 661,627 | 669,302 | ||||||||||
Related Party Customer | Accounts Receivable | Rehabilitation Services | |||||||||||||
Concentration Risk | |||||||||||||
Customer receivership and other related charges | 55,000 | ||||||||||||
Customer In Receivership | Rehabilitation therapy service | |||||||||||||
Concentration Risk | |||||||||||||
Customer receivership and other related charges | 35,600 | ||||||||||||
Number of nursing facilities operated by a customer | facility | 65 | ||||||||||||
Number of states in which customer operated skilled nursing facilities at time of receivership filing | state | 6 | ||||||||||||
Net revenues | 32,200 | 39,100 | 21,200 | ||||||||||
(Loss) income from continuing operations | 4,600 | $ 6,100 | $ 3,500 | ||||||||||
Customer two in receivership | Rehabilitation therapy service | |||||||||||||
Concentration Risk | |||||||||||||
Customer receivership and other related charges | $ 300 | ||||||||||||
Credit Concentration Risk [Member] | Accounts Receivable | Minimum | Rehabilitation Services | |||||||||||||
Concentration Risk | |||||||||||||
Number of distinct customers | customer | 200 | ||||||||||||
Credit Concentration Risk [Member] | Group Of Largest Customers | Accounts Receivable | Rehabilitation Services | |||||||||||||
Concentration Risk | |||||||||||||
Concentration risk (as a percent) | 68.00% | ||||||||||||
Number of largest customers representing approximately 68% of the outstanding contract receivables | customer | 4 | ||||||||||||
Gross contract receivables | $ 109,900 | 109,900 | $ 109,900 | ||||||||||
Credit Concentration Risk [Member] | Related Party Customer | Accounts Receivable | Rehabilitation Services | |||||||||||||
Concentration Risk | |||||||||||||
Concentration risk (as a percent) | 54.00% | ||||||||||||
Number of customers representing approximately 54% of the outstanding contract receivables | customer | 1 | ||||||||||||
Contract receivables, net | 32,000 | 32,000 | $ 32,000 | ||||||||||
Gross contract receivables | 87,000 | $ 87,000 | $ 87,000 | ||||||||||
Customer receivership and other related charges | $ 55,000 |
Significant Transactions and 54
Significant Transactions and Events - Combination with Skilled (Details) shares in Millions | Aug. 17, 2014 | Dec. 31, 2017 | Dec. 31, 2017shares | Dec. 31, 2016 | Feb. 02, 2015 |
Business Acquisition [Line Items] | |||||
Ownership interest in combined entity (as a percent) | 50.00% | ||||
FC-GEN Operations Investment, LLC | |||||
Business Acquisition [Line Items] | |||||
Ownership interest in combined entity (as a percent) | 61.40% | 61.40% | |||
FC-GEN Operations Investment, LLC | Former Owners of FC-GEN and Skilled Healthcare | |||||
Business Acquisition [Line Items] | |||||
Noncontrolling interest held after transaction (as a percent) | 38.60% | 38.60% | 42.00% | ||
Conversion ratio | 1 | ||||
Number of Class C common stock converted to public shares | 2.9 | ||||
FC-GEN Operations Investment, LLC | Former owners of FC-GEN | |||||
Business Acquisition [Line Items] | |||||
Ownership interest in combined entity (as a percent) | 74.25% | ||||
Direct controlling interest held pre-transaction (as a percent) | 58.00% | ||||
FC-GEN Operations Investment, LLC | Former shareholders of Skilled Healthcare Group, Inc. | |||||
Business Acquisition [Line Items] | |||||
Ownership interest in combined entity (as a percent) | 25.75% |
Significant Transactions and 55
Significant Transactions and Events - Consideration Price Allocation (Details) - USD ($) $ in Thousands | Feb. 02, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Consideration Price Allocation | ||||
Debt issuance costs | $ 5,852 | $ 14,524 | $ 19,193 | |
Goodwill | $ 85,642 | $ 440,712 | ||
FC-GEN Operations Investment, LLC | ||||
Consideration Price Allocation | ||||
Goodwill, tax deductible portion | $ 79,800 | |||
Transaction costs in acquisition | 89,200 | |||
Debt issuance costs | 17,800 | |||
Accounts receivable | 114,032 | |||
Deferred income taxes and other current assets | 39,586 | |||
Property, plant and equipment | 488,528 | |||
Total identifiable intangible assets | 65,810 | |||
Deferred income taxes and other assets | 76,461 | |||
Accounts payable and other current liabilities | (121,479) | |||
Long-term debt, including amounts due within one year | (428,453) | |||
Unfavorable lease contracts | (11,480) | |||
Deferred income taxes and other long-term liabilities | (141,914) | |||
Total identifiable net assets | 81,091 | |||
Goodwill | 267,050 | |||
Net assets | 348,141 | |||
FC-GEN Operations Investment, LLC | Accounting, investment banking, legal and other costs | ||||
Consideration Price Allocation | ||||
Transaction costs in acquisition | 31,600 | |||
FC-GEN Operations Investment, LLC | Management Incentive Compensation Charges | ||||
Consideration Price Allocation | ||||
Transaction costs in acquisition | 54,600 | |||
FC-GEN Operations Investment, LLC | Transaction Advisory Fee | ||||
Consideration Price Allocation | ||||
Transaction costs in acquisition | $ 3,000 | |||
FC-GEN Operations Investment, LLC | Trade names | ||||
Consideration Price Allocation | ||||
Indefinite lived intangible assets | 3,400 | |||
FC-GEN Operations Investment, LLC | Management contracts | ||||
Consideration Price Allocation | ||||
Finite lived intangible assets | $ 30,900 | |||
Weighted average life (in years) | 3 years 6 months | |||
FC-GEN Operations Investment, LLC | Customer relationships, net | ||||
Consideration Price Allocation | ||||
Finite lived intangible assets | $ 13,400 | |||
Weighted average life (in years) | 10 years | |||
FC-GEN Operations Investment, LLC | Favorable lease contracts, net | ||||
Consideration Price Allocation | ||||
Finite lived intangible assets | $ 18,110 | |||
Weighted average life (in years) | 12 years 9 months 18 days |
Significant Transactions and 56
Significant Transactions and Events - Pro Forma information (Details) - FC-GEN Operations Investment, LLC - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | 35 Months Ended |
Dec. 31, 2015 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||
Transaction costs in acquisition | $ 89,200 | |
Pro Forma Information | ||
Revenue of acquiree | $ 832,000 | |
Net loss of acquiree | $ 10,500 | |
Revenues | 5,690,512 | |
Loss attributable to Genesis Healthcare, Inc. | $ (315,329) | |
Net loss per share, Basic | $ (3.54) | |
Net loss per share, Diluted | $ (3.54) |
Significant Transactions and 57
Significant Transactions and Events - Acquisition from Revera (Details) $ in Thousands | Dec. 22, 2016facility | Sep. 01, 2016USD ($)facility | Dec. 01, 2015USD ($)facility | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)facility | Jun. 15, 2015USD ($)facility |
Acquisition from Revera | |||||||
Number of facilities acquired | 87 | ||||||
Number of facilities under lease | 28 | ||||||
Amount paid in cash | $ | $ 64,106 | $ 93,118 | $ 85,723 | ||||
Revera Acquisition | |||||||
Acquisition from Revera | |||||||
Number of facilities under asset purchase agreement | 24 | ||||||
Asset purchase agreement amount | $ | $ 240,000 | ||||||
Number of Acquired Facilities to be Operated By the Entity | 5 | 20 | |||||
Number of Acquired Facilities to Be Operated By Another Entity | 4 | ||||||
Number of facilities acquired | 5 | 19 | |||||
Number of owned facilities | 15 | ||||||
Number of facilities under lease | 4 | ||||||
Purchase price of owned and leased facilities | $ | $ 39,400 | $ 206,000 | |||||
Amount financed with bridge loan | $ | $ 37,000 | 134,100 | |||||
Amount paid in cash | $ | 20,500 | ||||||
Financing obligation including acquired leased facilities | $ | $ 54,300 |
Significant Transactions and 58
Significant Transactions and Events - Sale of ALFs and Hospice operations (Details) $ in Thousands | May 01, 2016USD ($) | Jan. 01, 2016USD ($)facility | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Skilled Nursing Facility Divestitures | ||||||
Sale price of facilities sold | $ 90,583 | $ 150,675 | $ 3,738 | |||
Partial pay down on loans | 128,307 | 500,101 | $ 357,716 | |||
Gain on sale | $ 134,100 | |||||
Disposed by sale | Kansas Assisted Senior Living Facilities | ||||||
Skilled Nursing Facility Divestitures | ||||||
Number of facilities sold | facility | 18 | |||||
Sale price of facilities sold | $ 67,000 | |||||
Partial pay down on loans | $ 54,200 | |||||
Disposed by sale | Hospice And Home Health Operations | ||||||
Skilled Nursing Facility Divestitures | ||||||
Sales Price Per Agreement | $ 84,000 | |||||
Cash proceeds | $ 72,000 | |||||
Noncash consideration received in disposal | 12,000 | |||||
Gain on sale | 43,400 | $ 43,420 | ||||
Derecognition of goodwill and identifiable intangible assets | $ 30,800 |
Significant Transactions and 59
Significant Transactions and Events - HUD Financings (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)facility | Dec. 31, 2016USD ($)facility | Dec. 31, 2015USD ($) | |
HUD Financings | |||
Proceeds from Issuance of Long-term Debt | $ 37,810 | $ 416,161 | $ 495,201 |
HUD insured loans | |||
HUD Financings | |||
Number of facilities financed by HUD | facility | 4 | 28 | |
Proceeds from Issuance of Long-term Debt | $ 27,800 | $ 205,300 |
Significant Transactions and 60
Significant Transactions and Events - Divestitures (Details) $ in Thousands | Dec. 22, 2017USD ($)facility | Oct. 01, 2017USD ($)facility | Sep. 28, 2017USD ($)facility | Jul. 10, 2017USD ($)facility | Jun. 01, 2017USD ($)facility | Apr. 01, 2017USD ($)facility | Mar. 14, 2017USD ($)facility | Feb. 01, 2017USD ($)facility | Dec. 31, 2016USD ($)facility | Dec. 22, 2016USD ($)facility | Dec. 15, 2016USD ($) | Oct. 18, 2016USD ($)facility | Dec. 31, 2016facility | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)facility | Dec. 31, 2015USD ($) |
Skilled Nursing Facility Divestitures | ||||||||||||||||
Other Nonoperating Income (Expense) | $ (8,473) | $ 207,070 | $ 1,400 | |||||||||||||
(Gain) loss recognized in disposal group | $ 134,100 | |||||||||||||||
Number of facilities under lease | facility | 28 | |||||||||||||||
Nonstrategic Facilities And Investments | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Gain (Loss) on Contract Termination | $ 5,000 | |||||||||||||||
Disposed by sale | Nonstrategic Facilities And Investments | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Number Of Facilities Sold | facility | 18 | |||||||||||||||
Proceeds from sale of joint venture | $ 5,400 | |||||||||||||||
Equity Method Investment, Amount Sold | $ 1,500 | |||||||||||||||
Number of owned facilities | facility | 16 | |||||||||||||||
Number of facilities under lease | facility | 2 | |||||||||||||||
Pennsylvania, Delaware and West Virginia | Disposed by sale | Assisted Senior Living Facilities | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Number of facilities divested or closed | facility | 9 | |||||||||||||||
Pennsylvania, Delaware and West Virginia | Disposed by sale | Nonstrategic Facilities And Investments | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Annual revenue | $ 22,500 | |||||||||||||||
Pretax net income ( loss) | (3,300) | |||||||||||||||
(Gain) loss recognized in disposal group | $ 19,800 | |||||||||||||||
Kansas, Missouri, Nebraska And Iowa | Disposed by sale | Skilled Nursing Facilities | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Number of facilities divested or closed | facility | 18 | |||||||||||||||
Annual revenue | $ 110,100 | |||||||||||||||
Pretax net income ( loss) | (10,700) | |||||||||||||||
Number of facilities presented as assets held for sale | facility | 16 | 16 | 16 | |||||||||||||
Total assets | 91,600 | |||||||||||||||
Loss associated with a cease use asset | $ 4,100 | |||||||||||||||
Number of facilities subleased | facility | 1 | |||||||||||||||
Cash proceeds | $ 80,000 | |||||||||||||||
Maryland | Disposed by sale | Nonstrategic Facilities And Investments | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
(Gain) loss recognized in disposal group | $ 1,900 | |||||||||||||||
California | Skilled Nursing Facilities | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Number of facilities divested or closed | facility | 5 | 1 | ||||||||||||||
Annual revenue | $ 4,000 | $ 6,900 | ||||||||||||||
Pretax net income ( loss) | (2,700) | (1,600) | ||||||||||||||
(Gain) loss recognized in disposal group | $ 200 | $ (100) | ||||||||||||||
California | Nonstrategic Facilities And Investments | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Gain (Loss) on Contract Termination | $ 5,000 | |||||||||||||||
California | Disposed by sale | Skilled Nursing Facilities | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Number of facilities under pending sale agreement | facility | 5 | |||||||||||||||
Georgia | Skilled Nursing Facilities | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Number of facilities divested or closed | facility | 2 | |||||||||||||||
Annual revenue | $ 15,500 | |||||||||||||||
Pretax net income ( loss) | (3,000) | |||||||||||||||
(Gain) loss recognized in disposal group | $ (1,800) | |||||||||||||||
Georgia | Disposed by sale | Skilled Nursing Facilities | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Number of facilities divested or closed | facility | 2 | |||||||||||||||
Annual revenue | $ 10,600 | |||||||||||||||
Pretax net income ( loss) | (400) | |||||||||||||||
(Gain) loss recognized in disposal group | $ (700) | |||||||||||||||
Massachusetts | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Annual rent credit | $ 1,200 | |||||||||||||||
Massachusetts | Disposed by sale | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Number Of Facilities Sold | facility | 2 | |||||||||||||||
Amount of capital lease net asset and obligation write-down | $ 14,900 | |||||||||||||||
Massachusetts | Disposed by sale | Skilled Nursing Facilities | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Number of facilities divested or closed | facility | 4 | |||||||||||||||
Annual revenue | $ 26,700 | |||||||||||||||
Pretax net income ( loss) | 1,200 | |||||||||||||||
(Gain) loss recognized in disposal group | $ (1,400) | |||||||||||||||
Tennessee | Disposed by sale | Skilled Nursing Facilities | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Annual revenue | 7,400 | |||||||||||||||
Pretax net income ( loss) | 500 | |||||||||||||||
(Gain) loss recognized in disposal group | (800) | |||||||||||||||
North Carolina | Disposed by sale | Skilled Nursing Facilities | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Number of facilities divested or closed | facility | 1 | |||||||||||||||
Annual revenue | $ 6,400 | |||||||||||||||
Pretax net income ( loss) | (1,000) | |||||||||||||||
(Gain) loss recognized in disposal group | $ (500) | |||||||||||||||
Colorado | Disposed by sale | Skilled Nursing Facilities | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
Number of facilities divested or closed | facility | 1 | |||||||||||||||
Annual revenue | $ 5,700 | |||||||||||||||
Pretax net income ( loss) | (2,200) | |||||||||||||||
(Gain) loss recognized in disposal group | $ (500) | |||||||||||||||
Other loss | Kansas, Missouri, Nebraska And Iowa | Disposed by sale | Skilled Nursing Facilities | ||||||||||||||||
Skilled Nursing Facility Divestitures | ||||||||||||||||
(Gain) loss recognized in disposal group | $ 6,500 |
Significant Transactions and 61
Significant Transactions and Events - Master Lease (Details) $ / shares in Units, $ in Thousands | Dec. 22, 2017USD ($)$ / sharesshares | Nov. 23, 2017USD ($)shares | Dec. 23, 2016USD ($)facilityloan | Dec. 22, 2016facility | Nov. 01, 2016USD ($)facility | Oct. 31, 2016 | Dec. 31, 2017USD ($)facility$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Master Leases | ||||||||||
Number of facilities under lease | facility | 28 | |||||||||
Percentage of Annual Escalators | 3.40% | 3.40% | ||||||||
Percent Of Annual Escalators After Decrease | 2.9 | 2.9 | ||||||||
Reduction in financing obligations | $ 208,900 | |||||||||
Step-down in capital lease asset and obligation | 21,400 | |||||||||
Establishment of notes payable | $ 74,800 | 74,800 | ||||||||
Gain on early extinguishment of debt | 6,566 | $ (16,290) | $ (130) | |||||||
(Gain) loss recognized in disposal group | $ 134,100 | |||||||||
Warrant to purchase | shares | 900,000 | 900,000 | ||||||||
Exercise price of warrant | $ / shares | $ 1 | $ 1 | ||||||||
Welltower Notes Due December 2021 | ||||||||||
Master Leases | ||||||||||
Number of notes issued | loan | (2) | |||||||||
Debt Instrument, Term | 5 years | |||||||||
Debt Instrument, Face Amount | $ 23,700 | |||||||||
Non-convertible note payable due December 15, 2021 | ||||||||||
Master Leases | ||||||||||
Debt Instrument, Face Amount | 11,700 | |||||||||
Convertible note payable due December 15, 2021 | ||||||||||
Master Leases | ||||||||||
Debt Instrument, Face Amount | $ 12,000 | |||||||||
Number of shares exchanged for debt | shares | 3,000,000 | |||||||||
Gain on early extinguishment of debt | $ 8,900 | |||||||||
Welltower - Second Spring | ||||||||||
Master Leases | ||||||||||
Number of facilities under lease | facility | 64 | |||||||||
Percentage of Decrease in Initial Annual Rent | 5.00% | |||||||||
Capital Leases, Rent Expense | $ 103,900 | |||||||||
Percentage Of Annual Escalators In Year Three | 1.5 | |||||||||
Percentage Of Annual Escalators In Year Two | 1 | |||||||||
Percentage Of Annual Escalators Thereafter | 2 | |||||||||
Reduction Of Cumulative Rent Obligations Through January 2032 | $ 297,000 | |||||||||
Welltower - Second Spring | Note payable due October 30, 2020 | ||||||||||
Master Leases | ||||||||||
Notes issued | $ 51,200 | |||||||||
Welltower - CBYW | ||||||||||
Master Leases | ||||||||||
Percentage of Annual Escalators | 2.00% | |||||||||
Percentage of Decrease in Initial Annual Rent | 5.00% | |||||||||
Capital Leases, Rent Expense | $ 54,500 | |||||||||
Reduction Of Cumulative Rent Obligations Through January 2032 | $ 143,000 | |||||||||
Number Of Facilities Under New Master Lease Agreement | facility | 28 | |||||||||
Omega | ||||||||||
Master Leases | ||||||||||
Capital Lease Obligations | $ 10,000 | |||||||||
Capital lease annual interest rate | 9 | |||||||||
Capital lease assets and obligation | $ 20,300 | |||||||||
Warrant to purchase | shares | 900,000 | |||||||||
Extend term | 4 years | |||||||||
Exercise price of warrant | $ / shares | $ 1 | |||||||||
Sabra Master Leases | ||||||||||
Master Leases | ||||||||||
Number of facilities sold | facility | 20 | |||||||||
Gain on write-off of deferred lease balances | $ 7,700 | |||||||||
Permanent and unconditional annual cash rent savings | $ 19,000 | |||||||||
Welltower Inc | ||||||||||
Master Leases | ||||||||||
Number of facilities sold | facility | 28 | 64 |
Loss Per Share - Calculation of
Loss Per Share - Calculation of Basic (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Jun. 30, 2016USD ($)$ / sharesshares | Mar. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2017USD ($)class$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | |
Income Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Number of classes of common stock | class | 3 | ||||||||||
Numerator: | |||||||||||
Loss from continuing operations | $ (89,279) | $ (373,822) | $ (65,109) | $ (50,740) | $ 22,429 | $ (20,434) | $ (23,034) | $ (43,001) | $ (959,172) | $ (118,078) | $ (525,549) |
Less: Net loss attributable to noncontrolling interests | (380,222) | (54,038) | (100,573) | ||||||||
Loss from continuing operations attributable to Genesis Healthcare, Inc. | (578,950) | (64,040) | (424,976) | ||||||||
(Loss) income from discontinued operations, net of taxes | (32) | 27 | (1,219) | ||||||||
Net loss attributable to Genesis Healthcare, Inc | $ (578,982) | $ (64,013) | $ (426,195) | ||||||||
Denominator: | |||||||||||
Weighted-average shares outstanding for net loss per share | shares | 90,636 | 90,226 | 89,421 | 89,198 | 94,217 | 89,873 | 85,755 | ||||
Basic and diluted net loss per common share: | |||||||||||
Loss from continuing operations attributable to Genesis Healthcare, Inc | $ / shares | $ (6.15) | $ (0.71) | $ (4.96) | ||||||||
(Loss) income from discontinued operations, net of taxes | $ / shares | 0 | 0 | (0.01) | ||||||||
Net loss attributable to Genesis Healthcare, Inc. | $ / shares | $ 0.25 | $ (0.23) | $ (0.26) | $ (0.48) | $ (6.15) | $ (0.71) | $ (4.97) | ||||
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 63
Loss Per Share - Calculation of diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | |||||||||||
Loss from continuing operations | $ (89,279) | $ (373,822) | $ (65,109) | $ (50,740) | $ 22,429 | $ (20,434) | $ (23,034) | $ (43,001) | $ (959,172) | $ (118,078) | $ (525,549) |
Less: Net (loss) income attributable to noncontrolling interests | (380,222) | (54,038) | (100,573) | ||||||||
Loss from continuing operations attributable to Genesis Healthcare, Inc. | (578,950) | (64,040) | (424,976) | ||||||||
Income (loss) from discontinued operations, net of taxes | (32) | 27 | (1,219) | ||||||||
Net loss attributable to Genesis Healthcare, Inc | (578,982) | (64,013) | (426,195) | ||||||||
Plus: Exchange of restricted stock units of noncontrolling interests | (61,258) | ||||||||||
Net loss available to common stockholders after assumed conversions | $ (578,982) | $ (125,271) | $ (426,195) | ||||||||
Basic and diluted net loss per common share: | |||||||||||
Weighted-average shares outstanding for net loss per share | 90,636 | 90,226 | 89,421 | 89,198 | 94,217 | 89,873 | 85,755 | ||||
Effect of dilutive shares: | |||||||||||
Exchange of restricted stock units of noncontrolling interests | 64,340 | ||||||||||
Employee and director unvested restricted stock units | (1,681) | ||||||||||
Dilutive potential common shares | 62,659 | ||||||||||
Adjusted weighted-average common shares outstanding, diluted | 92,337 | 90,226 | 89,421 | 89,198 | 94,217 | 152,532 | 85,755 | ||||
Diluted net loss per common share: | |||||||||||
Loss from continuing operations attributable to Genesis Healthcare, Inc. | $ (6.15) | $ (0.82) | $ (4.96) | ||||||||
Loss (income) from discontinued operations, net of taxes | 0 | 0 | (0.01) | ||||||||
Net loss attributable to Genesis Healthcare, Inc. | $ 0.24 | $ (0.23) | $ (0.26) | $ (0.48) | $ (6.15) | $ (0.82) | $ (4.97) |
Loss Per Share - Antidilutive S
Loss Per Share - Antidilutive Securities (Details) $ / shares in Units, $ in Thousands, item in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)itemshares | Dec. 31, 2015USD ($)shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net loss attributable to Genesis Healthcare, Inc. | $ | $ (61,258) | ||
Warrant to purchase | 900,000 | ||
Exercise price of warrant | $ / shares | $ 1 | ||
Convertible notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net loss attributable to Genesis Healthcare, Inc. | $ | $ 11 | ||
Antidilutive shares | 74,000 | ||
Stock Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive shares | 25,000 | ||
Restricted Stock Units (RSUs) | Noncontrolling interests | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net loss attributable to Genesis Healthcare, Inc. | $ | $ (375,883) | $ (54,761) | |
Antidilutive shares | 61,973,000 | 58,810,000 | |
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 | 10,719 | ||
Number of shares into which the debt instrument may be converted | item | 3 | ||
Class A Common Stock | Convertible notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of shares exchanged for debt | 3,000,000 | ||
Class C Common Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of units attributed to the noncontrolling interests outstanding | 61,561,393 | ||
Employee And Non-employee Director | Restricted Stock Units (RSUs) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive shares | 887,000 | 1,715,000 | 124,000 |
Segment Information - Segment R
Segment Information - Segment Reporting (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting Information | |||||||||||
Number of Reportable Segments | segment | 3 | ||||||||||
Net revenues | $ 1,327,880 | $ 1,315,452 | $ 1,341,276 | $ 1,389,132 | $ 1,402,860 | $ 1,418,994 | $ 1,438,358 | $ 1,472,218 | $ 5,373,740 | $ 5,732,430 | $ 5,619,224 |
Increase (Decrease) in Net Revenue From Prior Period | $ (358,690) | $ 113,206 | |||||||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (6.30%) | 2.00% | |||||||||
Salaries, wages and benefits | $ 3,036,868 | $ 3,369,713 | 3,289,820 | ||||||||
Other operating expenses | 1,484,394 | 1,413,639 | 1,358,983 | ||||||||
General and administrative costs | 170,029 | 186,062 | 175,889 | ||||||||
Provision for losses on accounts receivable | 96,409 | 107,815 | 100,521 | ||||||||
Lease expense | 147,525 | 146,244 | 150,276 | ||||||||
Depreciation and amortization expense | 255,786 | 254,459 | 237,617 | ||||||||
Interest expense | 499,382 | 528,544 | 507,809 | ||||||||
(Gain) loss on early extinguishment of debt | (6,566) | 16,290 | 130 | ||||||||
Investment income | (5,328) | (3,018) | (1,677) | ||||||||
Other loss (income) | 8,473 | (207,070) | (1,400) | ||||||||
Transaction costs | 14,325 | 7,928 | 96,374 | ||||||||
Customer receivership and other related charges | 55,000 | 36,000 | 90,864 | ||||||||
Long-lived asset impairments | 28,000 | 163,000 | 35,000 | 191,375 | 32,110 | 26,768 | |||||
Goodwill and identifiable intangible asset impairments | 360,000 | 360,046 | 3,321 | 1,778 | |||||||
Skilled Healthcare and other loss contingency expense | 15,192 | 31,500 | |||||||||
Equity in net (income) loss of unconsolidated affiliates | (243) | (3,286) | (2,139) | ||||||||
(Loss) income before income tax benefit | (969,599) | (135,513) | (353,025) | ||||||||
Income tax (benefit) expense | (10,427) | (17,435) | 172,524 | ||||||||
(Loss) income from continuing operations | $ (89,279) | $ (373,822) | $ (65,109) | $ (50,740) | $ 22,429 | $ (20,434) | $ (23,034) | $ (43,001) | $ (959,172) | $ (118,078) | $ (525,549) |
Revenue | |||||||||||
Segment Reporting Information | |||||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | ||||||||
Inpatient Services | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | $ 4,626,302 | $ 4,908,636 | $ 4,748,680 | ||||||||
Increase (Decrease) in Net Revenue From Prior Period | $ (282,334) | $ 159,956 | |||||||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (5.80%) | 3.40% | |||||||||
Inpatient Services | Revenue | |||||||||||
Segment Reporting Information | |||||||||||
Concentration Risk, Percentage | 86.10% | 85.60% | 84.50% | ||||||||
Inpatient Services | Product Concentration Risk | Revenue | |||||||||||
Segment Reporting Information | |||||||||||
Concentration Risk, Percentage | 86.00% | ||||||||||
Inpatient Services | Skilled Nursing Facilities | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | $ 4,522,738 | $ 4,783,117 | $ 4,597,671 | ||||||||
Increase (Decrease) in Net Revenue From Prior Period | $ (260,379) | $ 185,446 | |||||||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (5.40%) | 4.00% | |||||||||
Inpatient Services | Skilled Nursing Facilities | Revenue | |||||||||||
Segment Reporting Information | |||||||||||
Concentration Risk, Percentage | 84.10% | 83.40% | 81.70% | ||||||||
Inpatient Services | Assisted Senior Living Facilities | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | $ 96,109 | $ 115,956 | $ 143,321 | ||||||||
Increase (Decrease) in Net Revenue From Prior Period | $ (19,847) | $ (27,365) | |||||||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (17.10%) | (19.10%) | |||||||||
Inpatient Services | Assisted Senior Living Facilities | Revenue | |||||||||||
Segment Reporting Information | |||||||||||
Concentration Risk, Percentage | 1.80% | 2.00% | 2.60% | ||||||||
Inpatient Services | Administration of third party facilities | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | $ 8,991 | $ 10,969 | $ 9,488 | ||||||||
Increase (Decrease) in Net Revenue From Prior Period | $ (1,978) | $ 1,481 | |||||||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (18.00%) | 15.60% | |||||||||
Inpatient Services | Administration of third party facilities | Revenue | |||||||||||
Segment Reporting Information | |||||||||||
Concentration Risk, Percentage | 0.20% | 0.20% | 0.20% | ||||||||
Rehabilitation therapy service | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | $ 603,606 | $ 661,627 | $ 669,302 | ||||||||
Increase (Decrease) in Net Revenue From Prior Period | $ (58,021) | $ (7,675) | |||||||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (8.80%) | (1.10%) | |||||||||
Rehabilitation therapy service | Revenue | |||||||||||
Segment Reporting Information | |||||||||||
Concentration Risk, Percentage | 11.20% | 11.60% | 11.90% | ||||||||
Rehabilitation therapy service | Product Concentration Risk | Revenue | |||||||||||
Segment Reporting Information | |||||||||||
Concentration Risk, Percentage | 11.00% | ||||||||||
Rehabilitation therapy service | Therapy Services | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | $ 983,370 | $ 1,070,314 | $ 1,099,130 | ||||||||
Increase (Decrease) in Net Revenue From Prior Period | $ (86,944) | $ (28,816) | |||||||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (8.10%) | (2.60%) | |||||||||
Rehabilitation therapy service | Therapy Services | Revenue | |||||||||||
Segment Reporting Information | |||||||||||
Concentration Risk, Percentage | 18.30% | 18.70% | 19.60% | ||||||||
Other Services | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | $ 143,832 | $ 162,167 | $ 201,242 | ||||||||
Increase (Decrease) in Net Revenue From Prior Period | $ (18,335) | $ (39,075) | |||||||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (11.30%) | (19.40%) | |||||||||
Other Services | Revenue | |||||||||||
Segment Reporting Information | |||||||||||
Concentration Risk, Percentage | 2.70% | 2.80% | 3.60% | ||||||||
Other Services | Other Services | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | $ 178,573 | $ 185,521 | $ 240,350 | ||||||||
Increase (Decrease) in Net Revenue From Prior Period | $ (6,948) | $ (54,829) | |||||||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (3.70%) | (22.80%) | |||||||||
Other Services | Other Services | Revenue | |||||||||||
Segment Reporting Information | |||||||||||
Concentration Risk, Percentage | 3.30% | 3.20% | 4.30% | ||||||||
Operating Segments | Inpatient Services | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | $ 4,627,838 | $ 4,910,042 | $ 4,750,480 | ||||||||
Salaries, wages and benefits | 2,098,249 | 2,342,362 | 2,248,197 | ||||||||
Other operating expenses | 1,765,752 | 1,720,199 | 1,684,487 | ||||||||
Provision for losses on accounts receivable | 84,349 | 89,838 | 80,998 | ||||||||
Lease expense | 144,554 | 142,717 | 146,329 | ||||||||
Depreciation and amortization expense | 223,443 | 223,007 | 206,026 | ||||||||
Interest expense | 415,162 | 434,938 | 423,393 | ||||||||
Other loss (income) | 7,802 | (204,977) | 1,165 | ||||||||
Long-lived asset impairments | 189,494 | 32,110 | 26,768 | ||||||||
Goodwill and identifiable intangible asset impairments | 360,046 | 3,321 | 1,778 | ||||||||
(Loss) income before income tax benefit | (661,013) | 126,527 | (68,661) | ||||||||
(Loss) income from continuing operations | (661,013) | 126,527 | (68,661) | ||||||||
Operating Segments | Rehabilitation therapy service | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | 983,370 | 1,070,314 | 1,099,130 | ||||||||
Salaries, wages and benefits | 823,668 | 901,578 | 898,226 | ||||||||
Other operating expenses | 74,683 | 79,056 | 74,210 | ||||||||
Provision for losses on accounts receivable | 13,232 | 16,905 | 17,604 | ||||||||
Lease expense | 89 | 106 | |||||||||
Depreciation and amortization expense | 14,711 | 12,288 | 12,931 | ||||||||
Interest expense | 56 | 57 | 31 | ||||||||
Other loss (income) | 732 | (1,112) | |||||||||
Customer receivership and other related charges | 90,864 | ||||||||||
Long-lived asset impairments | 1,881 | ||||||||||
(Loss) income before income tax benefit | (36,457) | 61,453 | 96,022 | ||||||||
(Loss) income from continuing operations | (36,457) | 61,453 | 96,022 | ||||||||
Operating Segments | Other Services | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | 178,073 | 184,775 | 238,585 | ||||||||
Salaries, wages and benefits | 114,951 | 125,773 | 143,397 | ||||||||
Other operating expenses | 59,999 | 47,831 | 70,770 | ||||||||
Provision for losses on accounts receivable | 1,139 | 1,260 | 2,704 | ||||||||
Lease expense | 1,211 | 1,490 | 2,316 | ||||||||
Depreciation and amortization expense | 675 | 970 | 1,227 | ||||||||
Interest expense | 37 | 39 | 40 | ||||||||
Other loss (income) | 180 | (43,231) | |||||||||
(Loss) income before income tax benefit | (119) | 50,643 | 18,131 | ||||||||
(Loss) income from continuing operations | (119) | 50,643 | 18,131 | ||||||||
Corporate, Non-Segment | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | 500 | 746 | 1,765 | ||||||||
General and administrative costs | 170,029 | 186,062 | 175,889 | ||||||||
Provision for losses on accounts receivable | (2,311) | (188) | (785) | ||||||||
Lease expense | 1,760 | 1,948 | 1,779 | ||||||||
Depreciation and amortization expense | 16,957 | 18,194 | 17,433 | ||||||||
Interest expense | 84,127 | 93,510 | 84,635 | ||||||||
(Gain) loss on early extinguishment of debt | (6,566) | 16,290 | 130 | ||||||||
Investment income | (5,328) | (3,018) | (1,967) | ||||||||
Other loss (income) | (241) | 42,250 | (2,565) | ||||||||
Transaction costs | 14,325 | 7,928 | 96,374 | ||||||||
Skilled Healthcare and other loss contingency expense | 15,192 | 31,500 | |||||||||
Equity in net (income) loss of unconsolidated affiliates | (2,183) | (5,452) | (3,931) | ||||||||
(Loss) income before income tax benefit | (270,069) | (371,970) | (396,727) | ||||||||
Income tax (benefit) expense | (10,427) | (17,435) | 172,524 | ||||||||
(Loss) income from continuing operations | (259,642) | (354,535) | (569,251) | ||||||||
Elimination | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | (416,041) | (433,447) | (470,736) | ||||||||
Other operating expenses | (416,040) | (433,447) | (470,484) | ||||||||
Lease expense | (254) | ||||||||||
Interest expense | (290) | ||||||||||
Investment income | 290 | ||||||||||
Equity in net (income) loss of unconsolidated affiliates | 1,940 | 2,166 | 1,792 | ||||||||
(Loss) income before income tax benefit | (1,941) | (2,166) | (1,790) | ||||||||
(Loss) income from continuing operations | (1,941) | (2,166) | (1,790) | ||||||||
Elimination | Inpatient Services | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | (1,536) | (1,406) | (1,800) | ||||||||
Increase (Decrease) in Net Revenue From Prior Period | $ (130) | $ 394 | |||||||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 9.20% | (21.90%) | |||||||||
Elimination | Rehabilitation therapy service | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | $ (379,764) | $ (408,687) | $ (429,828) | ||||||||
Increase (Decrease) in Net Revenue From Prior Period | $ 28,923 | $ 21,141 | |||||||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | (7.10%) | (4.90%) | |||||||||
Elimination | Rehabilitation therapy service | Revenue | |||||||||||
Segment Reporting Information | |||||||||||
Concentration Risk, Percentage | (7.10%) | (7.10%) | (7.60%) | ||||||||
Elimination | Other Services | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | $ (34,741) | $ (23,354) | $ (39,108) | ||||||||
Increase (Decrease) in Net Revenue From Prior Period | $ (11,387) | $ 15,754 | |||||||||
Increase (Decrease) in Net Revenue as Percent of Prior Period Revenue | 48.80% | (40.30%) | |||||||||
Elimination | Other Services | Revenue | |||||||||||
Segment Reporting Information | |||||||||||
Concentration Risk, Percentage | (0.60%) | (0.40%) | (0.70%) |
Segment Information - Assets an
Segment Information - Assets and Goodwill by Segment (Details) $ in Thousands | May 01, 2016USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)facility | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Segment Reporting, Asset Reconciling Item | |||||
Segment total assets | $ 4,787,865 | $ 5,779,201 | |||
Segment goodwill | 85,642 | 440,712 | |||
Derecognized goodwill | 27,444 | ||||
Goodwill impairment associated with inpatient segment | 0 | $ 0 | |||
Corporate and Eliminations | |||||
Segment Reporting, Asset Reconciling Item | |||||
Segment total assets | 82,657 | 62,319 | |||
Inpatient Services | |||||
Segment Reporting, Asset Reconciling Item | |||||
Segment total assets | 4,303,370 | 5,194,811 | |||
Segment goodwill | 355,070 | ||||
Derecognized goodwill | 3,600 | ||||
Goodwill impairment associated with inpatient segment | $ 351,500 | $ 351,500 | |||
Number Of Facilities Sold | facility | 9 | ||||
Number of facilities planned for divestitures | facility | 7 | ||||
Rehabilitation therapy service | |||||
Segment Reporting, Asset Reconciling Item | |||||
Segment total assets | $ 351,711 | 454,723 | |||
Segment goodwill | 73,814 | 73,814 | |||
Other Services | |||||
Segment Reporting, Asset Reconciling Item | |||||
Segment total assets | 50,127 | 67,348 | |||
Segment goodwill | $ 11,828 | 11,828 | |||
Derecognized goodwill | $ 27,444 | ||||
Hospice And Home Health Operations | Disposed by sale | |||||
Segment Reporting, Asset Reconciling Item | |||||
Derecognized goodwill | $ 27,400 |
Restricted Cash and Investmen67
Restricted Cash and Investments in Marketable Securities - Components (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 130,439 | $ 155,961 |
Unrealized gains | 535 | 776 |
Unrealized losses, less than 12 months | (192) | (119) |
Unrealized losses, greater than 12 months | (553) | (592) |
Fair value | 130,229 | 156,026 |
Less: Current portion of restricted investments | 37,128 | 43,555 |
Long-term restricted investments | 93,101 | 112,471 |
Mortgage/Government Backed Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 7,956 | 16,947 |
Unrealized gains | 9 | |
Unrealized losses, less than 12 months | (16) | |
Unrealized losses, greater than 12 months | (108) | (96) |
Fair value | 7,848 | 16,844 |
Corporate Bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 52,528 | 65,563 |
Unrealized gains | 26 | 68 |
Unrealized losses, less than 12 months | (106) | (43) |
Unrealized losses, greater than 12 months | (123) | (283) |
Fair value | 52,325 | 65,305 |
Government Bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 65,842 | 61,399 |
Unrealized gains | 509 | 699 |
Unrealized losses, less than 12 months | (86) | (60) |
Unrealized losses, greater than 12 months | (322) | (213) |
Fair value | 65,943 | 61,825 |
Cash [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 4,103 | 11,515 |
Fair value | 4,103 | 11,515 |
Money Market Funds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 10 | 537 |
Fair value | $ 10 | $ 537 |
Restricted Cash and Investmen68
Restricted Cash and Investments in Marketable Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Proceeds from maturities of restricted investments | $ 43,800 | $ 38,600 | $ 26,200 |
Proceeds from sales of investments | 26,000 | 34,100 | 15,100 |
Gross realized gain | 500 | 500 | 100 |
Gross realized loss | (700) | $ (900) | $ (800) |
Letters of credit issued | 313,200 | ||
Restricted cash pledged as security | 1,600 | ||
Restricted investments pledged as security, amortized cost | 125,200 | ||
Market value of restricted investments pledged as security | 125,000 | ||
Letter of Credit | |||
Letters of credit issued | $ 114,300 |
Restricted Cash and Investmen69
Restricted Cash and Investments in Marketable Securities - Maturities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Restricted Cash and Investments in Marketable Securities [Abstract] | |
Maturity term of investment grade government and corporate debt securities | 5 years |
Restricted investments amortized cost maturity | |
Amortized cost, Due in one year or less | $ 48,462 |
Amortized cost, Due after 1 year through 5 years | 75,014 |
Amortized cost, Due after 10 years | 2,850 |
Total amortized cost | 126,326 |
Restricted investments fair value maturity | |
Fair value, Due in one year or less | 48,673 |
Fair value, Due after 1 year through 5 years | 74,567 |
Fair value, Due after 10 years | 2,876 |
Total fair value | $ 126,116 |
Property and Equipment (Details
Property and Equipment (Details) $ in Thousands | Dec. 22, 2016facility | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | $ 4,352,754 | $ 4,573,169 | |
Less accumulated depreciation | (939,155) | (807,776) | |
Net property and equipment | 3,413,599 | 3,765,393 | |
Tangible Asset Impairment Charges | 191,400 | 32,100 | |
Lease amendments | |||
Net capital lease asset write-down | 14,900 | ||
Amount of capital lease write-up | 20,300 | ||
Assets held for sale | |||
Number Of Facilities Under Lease | facility | 28 | ||
Land, Buildings and Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 591,022 | 673,092 | |
Capital lease land, buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 752,657 | 818,273 | |
Lease amendments | |||
Gross capital lease asset write-down | 55,600 | ||
Accumulated depreciation offset to capital lease asset write-down | 40,700 | ||
Financing obligation land, buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 2,525,551 | 2,584,178 | |
Equipment, furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 453,230 | 447,767 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | $ 30,294 | $ 49,859 |
Goodwill and Identifiable Int71
Goodwill and Identifiable Intangible Assets - Changes in carrying value of goodwill (Details) - USD ($) $ in Thousands | May 01, 2016 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill [Line Items] | |||||
Balance at beginning of period | $ 440,712 | $ 470,019 | |||
Inpatient acquisition from Revera | 3,354 | ||||
Goodwill associated with assets held for sale | (5,933) | ||||
Other goodwill additions | 716 | ||||
Sale of hospice and home health | (27,444) | ||||
Goodwill disposal associated with divestitures | (3,600) | ||||
Goodwill impairment associated with inpatient segment | 0 | $ 0 | |||
Balance at end of period | 437,112 | 440,712 | 470,019 | ||
Accumulated impairment losses | (351,470) | ||||
Goodwill, net | 85,642 | 440,712 | |||
Goodwill impairment associated with inpatient segment | 0 | 0 | |||
Inpatient Services | |||||
Goodwill [Line Items] | |||||
Balance at beginning of period | 355,070 | 357,649 | |||
Inpatient acquisition from Revera | 3,354 | ||||
Goodwill associated with assets held for sale | (5,933) | ||||
Sale of hospice and home health | (3,600) | ||||
Goodwill disposal associated with divestitures | (3,600) | ||||
Goodwill impairment associated with inpatient segment | $ (351,500) | (351,500) | |||
Balance at end of period | 351,470 | 355,070 | 357,649 | ||
Accumulated impairment losses | (351,470) | ||||
Goodwill, net | 355,070 | ||||
Goodwill impairment associated with inpatient segment | $ 351,500 | 351,500 | |||
Rehabilitation therapy service | |||||
Goodwill [Line Items] | |||||
Balance at beginning of period | 73,814 | 73,098 | |||
Other goodwill additions | 716 | ||||
Balance at end of period | 73,814 | 73,814 | 73,098 | ||
Goodwill, net | 73,814 | 73,814 | |||
Other Services | |||||
Goodwill [Line Items] | |||||
Balance at beginning of period | 11,828 | 39,272 | |||
Sale of hospice and home health | (27,444) | ||||
Balance at end of period | 11,828 | 11,828 | $ 39,272 | ||
Goodwill, net | $ 11,828 | $ 11,828 | |||
Disposed by sale | Hospice And Home Health Operations | |||||
Goodwill [Line Items] | |||||
Sale of hospice and home health | $ (27,400) |
Goodwill and Identifiable Int72
Goodwill and Identifiable Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets | $ 142,976 | $ 175,566 |
Accumulated amortization on intangible assets | 88,336 | 91,155 |
Trade names | ||
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Trade names | 50,556 | 50,556 |
Customer relationships, net | ||
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | 57,548 | 67,348 |
Accumulated amortization on intangible assets | $ 55,285 | $ 43,862 |
Weighted Average Remaining Life | 8 years | 9 years |
Management contracts | ||
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 14,651 | |
Accumulated amortization on intangible assets | $ 17,872 | |
Weighted Average Remaining Life | 2 years | |
Favorable lease contracts, net | ||
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 34,872 | $ 43,011 |
Accumulated amortization on intangible assets | $ 33,051 | $ 29,421 |
Weighted Average Remaining Life | 10 years | 10 years |
Goodwill and Identifiable Int73
Goodwill and Identifiable Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | |||
2,018 | $ 16.7 | ||
2,019 | 16.5 | ||
2,020 | 11.1 | ||
2,021 | 10.3 | ||
2,022 | 6.8 | ||
Thereafter | 31 | ||
Impairment of identifiable intangible assets | 8.5 | ||
Customer relationships, net | |||
Finite-Lived Intangible Assets | |||
Amortization expense | 10.3 | $ 10.3 | $ 10.3 |
Management contracts | |||
Finite-Lived Intangible Assets | |||
Amortization expense | 6.8 | 9 | 8.1 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | |||
Impairment of identifiable intangible assets | 7.3 | ||
Favorable lease contracts, net | |||
Finite-Lived Intangible Assets | |||
Amortization expense | 6.9 | 8.1 | 8.4 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | |||
Impairment of identifiable intangible assets | $ 1.2 | $ 3.3 | $ 1.8 |
Long-Term Debt - (Details)
Long-Term Debt - (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term debt | ||
Total long-term debt | $ 1,077,299 | $ 1,171,144 |
Current installments of long-term debt | (26,962) | (24,594) |
Long-term debt | 1,050,337 | 1,146,550 |
New term loan agreement | ||
Long-term debt | ||
Total long-term debt | 120,706 | 116,174 |
Debt issuance costs | 3,020 | 3,859 |
Real estate bridge loan | ||
Long-term debt | ||
Total long-term debt | 281,039 | 313,549 |
Debt issuance costs | 3,486 | 4,400 |
HUD insured loans | ||
Long-term debt | ||
Total long-term debt | 263,827 | 241,570 |
Debt issuance costs | 5,590 | 4,773 |
Welltower Notes | ||
Long-term debt | ||
Total long-term debt | 68,122 | 73,829 |
Original issue discount | 0 | 990 |
Mortgages and other secured debt (recourse) | ||
Long-term debt | ||
Total long-term debt | 12,536 | 13,235 |
Mortgages and other secured debt (non-recourse) | ||
Long-term debt | ||
Total long-term debt | 27,978 | 29,157 |
Debt issuance costs | 99 | 131 |
Revolving Credit Facility | ||
Long-term debt | ||
Total long-term debt | 303,091 | 383,630 |
Debt issuance costs | $ 10,109 | $ 9,220 |
Long-Term Debt - Revolving Cred
Long-Term Debt - Revolving Credit Facilities (Details) $ in Thousands | Jan. 01, 2020 | Jul. 29, 2016 | Feb. 02, 2015 | Mar. 31, 2017 | Dec. 31, 2017USD ($)item |
Long-term debt | |||||
Revolving credit facility | $ 313,200 | ||||
Total borrowing base capacity | $ 525,000 | ||||
Weighted Average Interest Rate | 5.31% | ||||
Tranche A-1 | |||||
Long-term debt | |||||
Revolving credit facility | $ 292,800 | ||||
Total borrowing base capacity | $ 485,000 | ||||
Weighted Average Interest Rate | 5.34% | ||||
HUD Tranche | |||||
Long-term debt | |||||
Revolving credit facility | $ 20,400 | ||||
Total borrowing base capacity | $ 40,000 | ||||
Weighted Average Interest Rate | 4.82% | ||||
Revolving Credit Facility | |||||
Long-term debt | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 525,000 | ||||
Debt Instrument Number of Tranches | item | 2 | ||||
Amount of reduction in combined commitment availability | $ 0 | ||||
Revolving credit facility | 313,200 | ||||
Outstanding Letters of Credit | 54,800 | ||||
Available borrowing capacity under the revolving credit facilities | $ 70,700 | ||||
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 | |||||
Applicable margin | 3.00% | ||||
Revolving Credit Facility | Tranche A-1 | LIBOR | Minimum | |||||
Long-term debt | |||||
Applicable margin | 3.00% | ||||
Revolving Credit Facility | Tranche A-1 | LIBOR | Maximum | |||||
Long-term debt | |||||
Applicable margin | 3.50% | ||||
Revolving Credit Facility | HUD Tranche | Base Rate | Minimum | |||||
Long-term debt | |||||
Applicable margin | 2.00% | ||||
Revolving Credit Facility | HUD Tranche | Base Rate | Maximum | |||||
Long-term debt | |||||
Applicable margin | 2.50% | ||||
Revolving Credit Facility | HUD Tranche | LIBOR | Minimum | |||||
Long-term debt | |||||
Applicable margin | 3.00% | ||||
Revolving Credit Facility | HUD Tranche | LIBOR | Maximum | |||||
Long-term debt | |||||
Applicable margin | 3.50% | ||||
Revolving Credit Facility Amendment | |||||
Long-term debt | |||||
Total borrowing base capacity | $ 438,700 | ||||
Revolving Credit Facility Amendment | Maximum | |||||
Long-term debt | |||||
Leverage ratio | 7.25% | ||||
Revolving Credit Facility Amendment | Forecast | Minimum | |||||
Long-term debt | |||||
Leverage ratio | 6.50% | ||||
Revolving Credit Facility Amendment | Tranche A-1 | Base Rate | Minimum | |||||
Long-term debt | |||||
Applicable margin | 2.00% | ||||
Revolving Credit Facility Amendment | Tranche A-1 | Base Rate | Maximum | |||||
Long-term debt | |||||
Applicable margin | 2.50% |
Long-Term Debt - Term Loan Agre
Long-Term Debt - Term Loan Agreement (Details) $ in Millions | Jan. 01, 2020 | Jul. 29, 2016USD ($) | Mar. 31, 2017 | Dec. 31, 2017USD ($)item |
Term Loan Facility | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Number of maintenance covenants | item | 4 | |||
New Term Loan Facility | Minimum | Forecast | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Leverage ratio | 6.50% | |||
New Term Loan Facility | Maximum | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Leverage ratio | 7.25% | |||
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 | |||
Effective interest rate | 14.60% | |||
Paid-in-kind interest rate | 2.00% | |||
Aggregate principal amount | $ | $ 120 | $ 123.7 | ||
Debt Instrument Annual Amortization Rate In Years One, Two and Three As Percent | 2.50% | |||
Annual amortization in year 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 | LIBOR | ||||
Term Loan Facility and New Term Loan Agreement | ||||
Applicable margin | 13.00% | |||
Debt Instrument Variable Interest Rate Floor | 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 | ||||
Applicable margin | 12.00% | |||
Debt Instrument Variable Interest Rate Floor | 2.00% |
Long-Term Debt - Real Estate Br
Long-Term Debt - Real Estate Bridge Loans (Details) $ in Millions | Apr. 01, 2017USD ($)facility | Oct. 01, 2016facilityloan | Sep. 01, 2016facility | Apr. 01, 2016USD ($)facility | Dec. 01, 2015facility | Dec. 31, 2017USD ($)facility | Dec. 31, 2016USD ($)facilityloanitem | Dec. 31, 2015facilityloan |
Long-term debt | ||||||||
Number of facilities acquired | 87 | |||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||||
Long-term debt | ||||||||
Number Of Facilities Sold | 3 | |||||||
Number of facilities classified as held for sale | 16 | |||||||
Welltower Bridge Loans | ||||||||
Long-term debt | ||||||||
Number of separate bridge loan agreements | loan | 4 | |||||||
Number of loans combined | loan | 2 | |||||||
Repayments of Debt | $ | $ 49.6 | $ 214 | ||||||
Number Of Facilities Sold | 8 | 19 | ||||||
Number of facilities refinanced with HUD insured loans | 4 | 23 | ||||||
Fixed interest rate | 10.00% | |||||||
Annual rate of increase to fixed interest rate | 0.25% | |||||||
Number of facilities pledged | 33 | |||||||
Number of facilities whose operators have receivables secured under second lien | 19 | |||||||
Number of fully retired loan agreements | loan | 1 | |||||||
Principal balance outstanding | $ | $ 274.6 | |||||||
Welltower Bridge Loans | Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||||
Long-term debt | ||||||||
Number of bridge loans classified as held-for-sale | item | 1 | |||||||
Number of facilities classified as held for sale | 3 | |||||||
Aggregate principal amount | $ | $ 9 | |||||||
Other Real Estate Bridge Loans | ||||||||
Long-term debt | ||||||||
Number of Skilled Facilities Acquired | 1 | |||||||
Effective interest rate | 5.56% | |||||||
Principal balance outstanding | $ | $ 9.9 | |||||||
Aggregate principal amount | $ | $ 9.9 | |||||||
Term of debt | 3 years | |||||||
Other Real Estate Bridge Loans | LIBOR | ||||||||
Long-term debt | ||||||||
Applicable margin | 4.00% | |||||||
Revera Acquisition | ||||||||
Long-term debt | ||||||||
Number of facilities acquired | 5 | 19 | ||||||
Sale of eight skilled nursing facilities | Welltower Bridge Loans | ||||||||
Long-term debt | ||||||||
Repayments of Debt | $ | 20 | |||||||
Refinancing of bridge loan debt of four skilled nursing facilities with HUD loans | Welltower Bridge Loans | ||||||||
Long-term debt | ||||||||
Repayments of Debt | $ | $ 29.6 | |||||||
Sale of 19 skilled and senior assisted living facilities | Welltower Bridge Loans | ||||||||
Long-term debt | ||||||||
Repayments of Debt | $ | 56 | |||||||
Refinancing of bridge loan debt of 23 skilled nursing facilities with HUD loans | Welltower Bridge Loans | ||||||||
Long-term debt | ||||||||
Repayments of Debt | $ | $ 158 | |||||||
Bridge loan retired with refinancing five skilled nursing facilities with HUD loans | ||||||||
Long-term debt | ||||||||
Number of facilities refinanced with HUD insured loans | 5 | |||||||
Bridge loan retired with refinancing five skilled nursing facilities with HUD loans | Welltower Bridge Loans | ||||||||
Long-term debt | ||||||||
Repayments of Debt | $ | $ 44 |
Long-Term Debt - HUD Insured Lo
Long-Term Debt - HUD Insured Loans (Details) $ in Thousands | Apr. 01, 2017facility | Feb. 02, 2015 | Dec. 31, 2017USD ($)facilityloan | Dec. 31, 2016USD ($)facility | Dec. 31, 2015USD ($)loan |
Long-term debt | |||||
Proceeds from issuance of long-term debt | $ 37,810 | $ 416,161 | $ 495,201 | ||
Weighted Average Interest Rate | 5.31% | ||||
HUD insured loans | |||||
Long-term debt | |||||
Number of debt instruments insured by HUD | loan | 30 | ||||
Number of loans assumed in acquisitions | loan | 11 | ||||
Principal balance outstanding | $ 269,400 | ||||
Proceeds from issuance of long-term debt | 27,800 | $ 205,300 | |||
Debt premium | $ 13,600 | ||||
Number of facilities financed by HUD | facility | 4 | 28 | |||
Debt instrument average remaining term (in years) | 30 years | ||||
Weighted Average Interest Rate | 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% | ||||
HUD insured loans | Maximum | |||||
Long-term debt | |||||
Term of debt | 35 years | ||||
Fixed interest rate | 4.20% | ||||
Prepaid Expenses and Other Current Assets [Member] | HUD insured loans | |||||
Long-term debt | |||||
Escrow reserve funds | $ 19,900 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Long-term debt | |||||
Number Of Facilities Sold | facility | 3 | ||||
Number Of Facilities Classified As Held For Sale | facility | 16 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | HUD insured loans | |||||
Long-term debt | |||||
Principal balance outstanding | $ 63,400 | ||||
Skilled Nursing Facilities | HUD insured loans | |||||
Long-term debt | |||||
Number Of Facilities Classified As Held For Sale | facility | 13 | ||||
Number of facilities financed by HUD | facility | 4 | 28 |
Long-Term Debt - Notes Payable
Long-Term Debt - Notes Payable (Details) $ in Millions | Dec. 23, 2016USD ($)facilityloan | Nov. 01, 2016facility | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Welltower Inc | ||||
Long-term debt | ||||
Number Of Facilities Sold | facility | 28 | 64 | ||
Welltower Notes | ||||
Long-term debt | ||||
Principal balance outstanding | $ 55.5 | |||
Cash interest rate | 3.00% | |||
Paid-in-kind interest rate | 7.00% | |||
Welltower Notes Due December 2021 | ||||
Long-term debt | ||||
Number of notes issued | loan | (2) | |||
Debt Instrument, Face Amount | $ 23.7 | |||
Note Payable Due December 15 2021 | ||||
Long-term debt | ||||
Principal balance outstanding | $ 12.7 | |||
Cash interest rate | 3.00% | |||
Paid-in-kind interest rate | 7.00% | |||
Debt Instrument, Face Amount | $ 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 |
Long-Term Debt - Other (Details
Long-Term Debt - Other (Details) | Dec. 31, 2017 |
Long-term debt | |
Weighted Average Interest Rate | 5.31% |
Minimum | Mortgages and other secured debt (recourse) | |
Long-term debt | |
Effective interest rate | 3.10% |
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, 2017 | Dec. 31, 2016 | |
Long-Term Debt Abstract | ||
Term of forbearance agreement | 90 days | |
Current installments of long-term debt | $ 26,962 | $ 24,594 |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2,018 | 27,717 | |
2,019 | 18,282 | |
2,020 | 497,810 | |
2,021 | 18,916 | |
2,022 | 281,104 | |
Thereafter | 240,564 | |
Total long-term debt | $ 1,084,393 |
Lease and Lease Commitments - F
Lease and Lease Commitments - Future minimum payment tables (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2,018 | $ 91,660 | |
2,019 | 94,419 | |
2,020 | 93,909 | |
2,021 | 96,070 | |
2,022 | 98,302 | |
Thereafter | 3,446,959 | |
Total future minimum lease payments | 3,921,319 | |
Less amount representing interest | (2,893,453) | |
Capital lease obligation | 1,027,866 | |
Less current portion | (2,511) | $ (1,886) |
Capital lease obligations | 1,025,355 | $ 997,340 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2,018 | 121,886 | |
2,019 | 118,714 | |
2,020 | 118,703 | |
2,021 | 113,156 | |
2,022 | 89,368 | |
Thereafter | 248,212 | |
Total future minimum lease payments | $ 810,039 |
Lease and Lease Commitments - C
Lease and Lease Commitments - Capital Lease Rates and Deferred Balances (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)leasefacility | Dec. 31, 2016USD ($) | |
Capital lease imputed interest rate (as a percent) | 10.00% | |
Number of leases with unmet financial covenants | lease | 4 | |
Number of facilities under leases with unmet financial covenants | facility | 33 | |
Identifiable Intangible Assets [Member] | ||
Net favorable leases | $ 34.9 | $ 43 |
Other long-term liabilities | ||
Net unfavorable leases | 15.5 | 28.8 |
Deferred straight-line rent balances included in other long-term liabilities | $ 28.7 | $ 31.6 |
Financing Obligation (Details)
Financing Obligation (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)lease | |
Financing Obligation | ||
Financing obligation, imputed interest rate (as a percent) | 10.60% | |
Present Value of Future Minimum Lease Payments, Sale Leaseback Transactions, Rolling Maturity | ||
Total future minimum lease payments | $ 9,327,378 | |
Less amount representing interest | (6,396,017) | |
Financing obligation | 2,931,361 | |
Less current portion | (1,878) | $ (1,613) |
Long-term financing obligation | 2,929,483 | $ 2,867,534 |
Reduction in financing obligations | 208,900 | |
Number of new master lease agreement | lease | 2 | |
Present Value of Future Minimum Lease Payments, Sale Leaseback Transactions, Fiscal Year Maturity | ||
2,018 | 277,492 | |
2,019 | 283,715 | |
2,020 | 290,463 | |
2,021 | 295,822 | |
2,022 | 294,900 | |
Thereafter | $ 7,884,986 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Class of Stock | |||
Maximum number of shares from all classes combined, authorized | 1,200,000,000 | ||
Preferred stock, authorized (in shares) | 30,000,000 | 30,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Preferred stock, issued (in shares) | 0 | 0 | |
Distributions to stockholders and NCI | $ 0.4 | $ 0.2 | $ 7 |
Class A Common Stock | |||
Class of Stock | |||
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Common stock, issued (in shares) | 97,100,738 | 75,187,388 | |
Class B Common Stock | |||
Class of Stock | |||
Common stock, authorized (in shares) | 20,000,000 | 20,000,000 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Common stock, issued (in shares) | 744,396 | 15,495,019 | |
Class C Common Stock | |||
Class of Stock | |||
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Common stock, issued (in shares) | 61,561,393 | 63,849,380 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Monte-Carlo fair value assumptions | |||
Expected term (in years) | 1 year 2 months 12 days | 1 year 7 months 6 days | 1 year 2 months 12 days |
Risk-free interest rate (as a percent) | 1.50% | 1.00% | 1.00% |
Volatility (as a percent) | 65.00% | 60.00% | |
Volatility, minimum (as a percent) | 45.00% | ||
Volatility, maximum (as a percent) | 55.00% | ||
2015 Plan | Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Shares authorized (in shares) | 24,400,000 | ||
Restricted Stock Units (RSUs) | 2015 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Award vesting period | 3 years | ||
Restricted Stock Units (RSUs) | 2015 Plan | Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Number of common stock shares per RSU or PSU vested | 1 |
Stock-Based Compensation - Nonv
Stock-Based Compensation - Nonvested Units Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted-Average Grant Date Fair Value | |||
Unrecognized compensation costs | $ 14.6 | ||
Weighted average term expected to recognize stock-based compensation expense not yet recognized | 1 year 2 months 12 days | ||
Fair value of shares vested | $ 3.4 | $ 2.2 | |
Maximum | |||
Weighted-Average Grant Date Fair Value | |||
Fair value of shares vested | $ 0.1 | ||
Restricted Stock Units (RSUs) | |||
Weighted-Average Grant Date Fair Value | |||
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | 3.1 | 2.2 | 0 |
Restricted Stock Units (RSUs) | General and Administrative Expense | |||
Weighted-Average Grant Date Fair Value | |||
Compensation expense | $ 9.6 | $ 8.4 | $ 4.7 |
Restricted Stock Units (RSUs) | Time-based | |||
Number of Units | |||
Non-vested beginning balance | 4,619 | ||
Granted | 2,281 | ||
Vested | (2,018) | ||
Forfeited | (198) | ||
Non-vested ending balance | 4,684 | 4,619 | |
Weighted-Average Grant Date Fair Value | |||
Non-vested beginning balance | $ 3.25 | ||
Granted | 1.70 | $ 1.67 | $ 6.01 |
Vested | 3.43 | ||
Forfeited | 3.42 | ||
Non-vested ending balance | $ 2.41 | $ 3.25 | |
Restricted Stock Units (RSUs) | Time and Market-based | |||
Number of Units | |||
Non-vested beginning balance | 3,706 | ||
Granted | 1,563 | ||
Forfeited | (287) | ||
Non-vested ending balance | 4,982 | 3,706 | |
Weighted-Average Grant Date Fair Value | |||
Non-vested beginning balance | $ 1.84 | ||
Granted | 1.12 | $ 0.81 | $ 3.34 |
Forfeited | 2.11 | ||
Non-vested ending balance | $ 1.60 | $ 1.84 | |
Class A Common Stock | 2015 Plan | |||
Weighted-Average Grant Date Fair Value | |||
Shares available for grant (in shares) | 12,700 |
Income Taxes - Total Tax Provis
Income Taxes - Total Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity Method Investment, Ownership Percentage | 50.00% | ||
Total income tax (benefit) expense | |||
Continuing operations | $ (10,427) | $ (17,435) | $ 172,524 |
Discontinued operations | 48 | 8 | (885) |
Members' equity | (67) | (82) | (212) |
Total | $ (10,446) | $ (17,509) | $ 171,427 |
FC-GEN Operations Investment, LLC | |||
Equity Method Investment, Ownership Percentage | 61.40% |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of provision for income taxes | |||
Current: Federal | $ 1,592 | $ (22,473) | $ 5,151 |
Current: State | 157 | (2,096) | 1,738 |
Total current | 1,749 | (24,569) | 6,889 |
Deferred: Federal | (12,304) | 5,785 | 134,151 |
Deferred: State | 128 | 1,349 | 31,484 |
Total deferred | (12,176) | 7,134 | 165,635 |
Income tax (benefit) expense | $ (10,427) | $ (17,435) | $ 172,524 |
Income Taxes - Tax Cuts And Job
Income Taxes - Tax Cuts And Jobs Act (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 22, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Valuation allowance | |||||
Valuation allowance | $ (264,098) | $ (280,563) | |||
Tax Cuts and Jobs Act | |||||
Federal statutory income tax rate | 35.00% | 35.00% | 35.00% | 35.00% | |
Federal | |||||
Tax Cuts and Jobs Act | |||||
Period that NOLs that occurred prior to December 31, 2017 may be carried forward | 20 years | ||||
Maximum usage limit in any given year for NOLs occurring after December 31, 2017 | 80.00% | ||||
Forecast | |||||
Tax Cuts and Jobs Act | |||||
Federal statutory income tax rate | 21.00% |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense (Details) - USD ($) $ in Thousands | Dec. 22, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||||
Federal statutory income tax rate | 35.00% | 35.00% | 35.00% | 35.00% |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation | ||||
Computed "expected" benefit | $ (339,359) | $ (47,430) | $ (123,560) | |
State and local income taxes, net of federal tax benefit | 149 | (2,096) | 1,738 | |
Adjustment to income taxes for income not subject to corporate tax | 34,196 | |||
Income tax credits | (2,840) | (3,695) | (2,469) | |
Goodwill impairment write-off | (53,688) | |||
Non-controlling interest | 138,331 | 20,012 | 39,843 | |
Adjustment to deferred taxes, including credits and valuation allowance | 139,324 | 41,172 | 225,259 | |
FIN 48 | (81) | (26,355) | 760 | |
Other, net | 361 | 957 | (3,243) | |
Income tax (benefit) expense | $ (10,427) | $ (17,435) | $ 172,524 | |
Effective tax rate | 1.10% | 12.90% | (48.90%) | |
Effect of Tax Cuts and Jobs Act of 2017 Accounting Incomplete Provisional [Abstract] | ||||
Effect of Tax Cuts and Jobs Act on deferred tax assets | $ (108,300) | |||
Establishment of full valuation allowance | $ 221,900 |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components of Deferred Tax Assets and Liabilities | |||
Change in valuation allowance | $ 221,900 | ||
Deferred income tax assets: | |||
Investment in partnerships | $ 156,049 | $ 160,610 | |
Net operating loss carryforwards | 80,615 | 93,696 | |
Discounted unpaid loss reserve | 3,147 | 6,107 | |
Other intangible | 3,542 | 1,191 | |
General business credits | 24,325 | 25,066 | |
Total deferred tax assets | 267,678 | 286,670 | |
Valuation allowance | (264,098) | (280,563) | |
Deferred tax assets, net of valuation allowance | 3,580 | 6,107 | |
Deferred income tax liabilities: | |||
Long-lived assets: intangible property | (7,584) | (22,354) | |
Total deferred tax liabilities | (7,584) | (22,354) | |
Net deferred tax liabilities | $ (4,004) | $ (16,247) |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | |||
Balance at December 31, | $ 79 | $ 24,292 | $ 24,233 |
Additions recorded in purchase accounting | 59 | ||
Reductions due to lapses of applicable statute of limitations | (24,213) | ||
Additions based upon tax positions related to the current year | 36 | ||
Balance at December 31, | $ 115 | 79 | 24,292 |
Accrued interest related to unrecognized tax benefits | 100 | $ 400 | |
Tax savings payable, as a percent | 90.00% | ||
Tax basis step-up in deductible goodwill of FC-GEN. | $ 14,900 | $ 3,100 | |
Maximum | |||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | |||
Accrued interest related to unrecognized tax benefits | $ 100 | ||
State | Minimum | |||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | |||
Number of Open Tax Years | 3 years | ||
State | Maximum | |||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | |||
Number of Open Tax Years | 6 years |
Income Taxes - Exchange Rights
Income Taxes - Exchange Rights and Tax Receivable Agreement (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill Tax Deductible Amount Tax Basis Step Up | $ 14.9 | $ 3.1 |
Tax Savings Payable to Former Owners, as a Percent | 90.00% | |
F C Gen Units And Class C Shares | ||
Number of membership units and Class C shares exchanged for Class A shares | 2,287,987 | 600,000 |
Class A Common Stock | ||
Number of Class A shares issued in exchange for membership units and Class C shares | 2,288,381 | 600,102 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | May 01, 2016USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)facility | Mar. 31, 2017 | Feb. 02, 2015USD ($) |
Related Party Transaction | |||||||||
Ownership interest | 50.00% | ||||||||
Proceeds from sale of joint venture interest | $ 242 | $ 6,460 | $ 26,358 | ||||||
Number of facilities acquired | facility | 87 | ||||||||
Customer receivership and other related charges | $ 55,000 | $ 36,000 | 90,864 | ||||||
Related party transaction advisory fee | $ 3,000 | ||||||||
Disposed by sale | Hospice And Home Health Operations | |||||||||
Related Party Transaction | |||||||||
Cash proceeds | $ 72,000 | ||||||||
Noncash consideration received in disposal | $ 12,000 | ||||||||
Short-term Debt | 15,600 | 15,600 | |||||||
Rehabilitation Services | |||||||||
Related Party Transaction | |||||||||
Net revenue from related party | 142,200 | 155,400 | $ 161,400 | ||||||
Gross accounts receivable from related party | 87,000 | 87,000 | 83,900 | ||||||
FC PAC | |||||||||
Related Party Transaction | |||||||||
Ownership interest | 5.40% | ||||||||
Proceeds from sale of joint venture interest | $ 26,400 | ||||||||
Gain on sale of joint venture | $ 8,400 | ||||||||
FC PAC | Hospice And Diagnostic Services | |||||||||
Related Party Transaction | |||||||||
Amount of services in period | $ 11,800 | $ 12,200 | $ 12,000 | ||||||
Non-employee Director | Disposed by sale | Hospice And Home Health Operations | |||||||||
Related Party Transaction | |||||||||
Aggregate ownership interest in counterparty indirectly held by certain board members, as a percent | 10.00% | ||||||||
Related Party Customer | Accounts Receivable | Rehabilitation Services | |||||||||
Related Party Transaction | |||||||||
Net accounts receivable from related party | 32,000 | ||||||||
Customer receivership and other related charges | $ 55,000 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | ||
Defined contribution plan, employer discretionary contribution amount | $ 0 | $ 0 |
Other Income (Details)
Other Income (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | May 01, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
(Gain) loss recognized in disposal group | $ (134,100) | ||||
Gain on sale of other owned assets, net | 6,932 | $ (220) | $ 5,895 | ||
Total other income | 8,473 | (207,070) | (1,400) | ||
Nonstrategic Facilities And Investments | |||||
Gain on escrow receipt associated with terminated sale agreement | (5,000) | ||||
Facilities Divested And Terminated From Lease Agreements | |||||
(Gain) loss recognized in disposal group | 5,799 | (20,430) | 1,064 | ||
Facilities Closed Subject To Lease Agreements | |||||
(Gain) loss recognized in disposal group | 146 | ||||
Disposed by sale | Hospice And Home Health Operations | |||||
(Gain) loss recognized in disposal group | $ (43,400) | (43,420) | |||
Disposed by sale | Nonstrategic Facilities And Investments | |||||
Gain on sale of investment in joint venture | $ (3,900) | (3,910) | $ (8,359) | ||
Disposed by sale | Leased Facilities Under New Lease Agreements | |||||
Gain on leased facilities sold to new landlord and operating under new lease agreements | (8,466) | $ (134,090) | |||
Disposed by sale | Facilities Divested And Terminated From Lease Agreements | |||||
(Gain) loss recognized in disposal group | $ 4,062 |
Asset Impairment Charges (Detai
Asset Impairment Charges (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Asset Impairment Charges | ||||
Impairment of Intangible Assets, Finite-lived | $ 8,500 | |||
Impairment charges on its favorable lease intangible assets with a definite useful life | 1,200 | $ 3,300 | $ 1,800 | |
Goodwill impairment associated with inpatient segment | 0 | 0 | ||
Inpatient Services | ||||
Asset Impairment Charges | ||||
Impairment of Long-Lived Assets Held-for-use | 191,400 | $ 32,100 | $ 26,800 | |
Goodwill impairment associated with inpatient segment | $ 351,500 | 351,500 | ||
Management contracts | ||||
Asset Impairment Charges | ||||
Impairment of Intangible Assets, Finite-lived | $ 7,300 |
Assets Held for Sale (Details)
Assets Held for Sale (Details) $ in Thousands | Apr. 01, 2017facility | Dec. 22, 2016facility | Dec. 31, 2016USD ($)facility |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of facilities under lease | facility | 28 | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of facilities sold | facility | 3 | ||
Number of facilities classified as held for sale | facility | 16 | ||
Assets and Liabilities of Disposal Group | |||
Prepaid expenses | $ 4,056 | ||
Property and equipment, net of accumulated depreciation of $10,792 | 76,430 | ||
Accumulated depreciation | 10,792 | ||
Goodwill | 5,933 | ||
Total Assets | 86,419 | ||
Current installments of long-term debt | 988 | ||
Long-term debt | 69,057 | ||
Total Liabilities | $ 70,045 | ||
Nonstrategic Facilities And Investments | Disposed by sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of facilities sold | facility | 18 | ||
Number of owned facilities | facility | 16 | ||
Number of facilities under lease | facility | 2 |
Commitments and Contingencies -
Commitments and Contingencies - Self Insurance Risks (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Workers' compensation approximate discount rate (as a percentage) | 1.00% | ||
Workers' Compensation discount rate (as a percentage) | 1.48% | ||
Potential effect of discounting on Workers Compensation reserve | $ 6.7 | $ 8.9 | |
Provision for general and professional liability | 134 | 137.5 | $ 151.1 |
Reserve for general and professional liability | 442.9 | 392.1 | |
Provision for workers' compensation | 54.1 | 60.7 | $ 60.7 |
Reserve for workers' compensation risks | 174.6 | 226 | |
Health insurance reserve | $ 17.5 | $ 19.6 |
Commitments and Contingencie101
Commitments and Contingencies - Litigation (Details) $ in Millions | Aug. 06, 2014item | Jul. 31, 2016item | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) |
Loss Contingencies | ||||
Number of matters under agreement in principle | item | 4 | |||
Accrued expenses | ||||
Loss Contingencies | ||||
Litigation settlement amount | $ 52.7 | |||
Environmental Remediation at Leased Sites [Member] | ||||
Loss Contingencies | ||||
Estimated settlement value | $ 20.9 | |||
Environmental Remediation at Leased Sites [Member] | Other long-term liabilities | ||||
Loss Contingencies | ||||
Asset Retirement Obligation | $ 9.8 | $ 9.9 | ||
Creekside Hospice Investigation | ||||
Loss Contingencies | ||||
Number of Qui Tam proceedings | item | 2 | |||
Creekside Hospice Therapy Matters Investigation Staffing Matters Investigation And Sundance Part B Therapy Matter (Member) | ||||
Loss Contingencies | ||||
Loss contingency settlement term | 5 years | |||
Accrued contingent liability | $ 47.4 | |||
Creekside Hospice Therapy Matters Investigation Staffing Matters Investigation And Sundance Part B Therapy Matter (Member) | Other long-term liabilities | ||||
Loss Contingencies | ||||
Accrued contingent liability | 37.4 | |||
Creekside Hospice Therapy Matters Investigation Staffing Matters Investigation And Sundance Part B Therapy Matter (Member) | Accrued expenses | ||||
Loss Contingencies | ||||
Accrued contingent liability | $ 10 | |||
SunDance Part B Therapy Matter | ||||
Loss Contingencies | ||||
Number of subsidiary agencies outside of Georgia that are part of the Qui Tam proceeding | item | 0 |
Fair Value of Financial Inst102
Fair Value of Financial Instruments - Recurring measures (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets, Fair Value Disclosure [Abstract] | ||
Cash and equivalents | $ 54,525 | $ 51,408 |
Restricted cash and equivalents | 4,113 | 12,052 |
Assets, Fair Value Disclosure, Total | 184,754 | 207,434 |
Mortgage/Government Backed Securities | ||
Assets, Fair Value Disclosure [Abstract] | ||
Restricted investments in marketable securities | 7,848 | 16,844 |
Corporate Bond Securities [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Restricted investments in marketable securities | 52,325 | 65,305 |
Government Bonds | ||
Assets, Fair Value Disclosure [Abstract] | ||
Restricted investments in marketable securities | 65,943 | 61,825 |
Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash and equivalents | 54,525 | 51,408 |
Restricted cash and equivalents | 4,113 | 12,052 |
Assets, Fair Value Disclosure, Total | 184,754 | 207,434 |
Level 1 | Mortgage/Government Backed Securities | ||
Assets, Fair Value Disclosure [Abstract] | ||
Restricted investments in marketable securities | 7,848 | 16,844 |
Level 1 | Corporate Bond Securities [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Restricted investments in marketable securities | 52,325 | 65,305 |
Level 1 | Government Bonds | ||
Assets, Fair Value Disclosure [Abstract] | ||
Restricted investments in marketable securities | $ 65,943 | $ 61,825 |
Fair Value of Financial Inst103
Fair Value of Financial Instruments - Debt Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Carrying value | $ 1,077,299 | $ 1,171,144 |
New term loan agreement | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Carrying value | 120,706 | 116,174 |
Skilled Real Estate Bridge Loan | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Carrying value | 281,039 | 313,549 |
HUD insured loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Carrying value | 263,827 | 241,570 |
Welltower Notes | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Carrying value | 68,122 | 73,829 |
Mortgages and other secured debt (recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Carrying value | 12,536 | 13,235 |
Mortgages and other secured debt (non-recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Carrying value | 27,978 | 29,157 |
Revolving Credit Facility | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Carrying value | 303,091 | 383,630 |
Level 2 | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 1,064,240 | 1,156,557 |
Level 2 | New term loan agreement | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 120,706 | 116,174 |
Level 2 | Skilled Real Estate Bridge Loan | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 281,039 | 313,549 |
Level 2 | HUD insured loans | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 250,768 | 226,983 |
Level 2 | Welltower Notes | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 68,122 | 73,829 |
Level 2 | Mortgages and other secured debt (recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 12,536 | 13,235 |
Level 2 | Mortgages and other secured debt (non-recourse) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | 27,978 | 29,157 |
Level 2 | Revolving Credit Facility | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Fair Value | $ 303,091 | $ 383,630 |
Fair Value of Financial Inst104
Fair Value of Financial Instruments - Nonrecurring measures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Non-recurring Fair Value Measures | |||
Property and equipment, Impairment Charges | $ 191,400 | $ 32,100 | |
Goodwill, Impairment Loss | 0 | $ 0 | |
Fair Value, Measurements, Nonrecurring [Member] | |||
Non-recurring Fair Value Measures | |||
Property and equipment, net | 3,413,599 | 3,765,393 | |
Property and equipment, Impairment Charges | 191,375 | 32,110 | |
Goodwill | 85,642 | 440,712 | |
Goodwill, Impairment Loss | 351,470 | ||
Intangible assets | 142,976 | 175,566 | |
Intangible assets, Impairment Loss | $ 8,576 | $ 3,321 |
Quarterly Financial Informat105
Quarterly Financial Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net revenues | $ 1,327,880 | $ 1,315,452 | $ 1,341,276 | $ 1,389,132 | $ 1,402,860 | $ 1,418,994 | $ 1,438,358 | $ 1,472,218 | $ 5,373,740 | $ 5,732,430 | $ 5,619,224 |
Loss from continuing operations attributable to Genesis Healthcare, Inc. | (89,279) | (373,822) | (65,109) | (50,740) | 22,429 | (20,434) | (23,034) | (43,001) | (959,172) | (118,078) | (525,549) |
(Loss) income from discontinued operations, net of taxes | 38 | (2) | (47) | (21) | 28 | (24) | 61 | (38) | (32) | 27 | (1,219) |
Net loss attributable to Genesis Healthcare, Inc | $ (89,241) | $ (373,824) | $ (65,156) | $ (50,761) | $ 22,457 | $ (20,458) | $ (22,973) | $ (43,039) | $ (578,982) | $ (64,013) | $ (426,195) |
Basic and diluted net loss per common share: | |||||||||||
Net loss attributable to Genesis Healthcare, Inc. | $ (0.92) | $ (3.94) | $ (0.70) | $ (0.55) | |||||||
Shares used in computing loss per common share | 96,715 | 94,940 | 93,273 | 91,880 | |||||||
Net (loss) income per common share attributable to Genesis Healthcare, Inc. | |||||||||||
Basic | $ 0.25 | $ (0.23) | $ (0.26) | $ (0.48) | $ (6.15) | $ (0.71) | $ (4.97) | ||||
Diluted | $ 0.24 | $ (0.23) | $ (0.26) | $ (0.48) | $ (6.15) | $ (0.82) | $ (4.97) | ||||
Earnings Per Share, Diluted, Other Disclosures [Abstract] | |||||||||||
Basic | 90,636 | 90,226 | 89,421 | 89,198 | 94,217 | 89,873 | 85,755 | ||||
Diluted | 92,337 | 90,226 | 89,421 | 89,198 | 94,217 | 152,532 | 85,755 | ||||
Gain on sales of owned assets, divestitures of leased facilities and other lease transactions | $ 160,000 | ||||||||||
Change in valuation allowance | $ 221,900 | ||||||||||
Impairment Of Goodwill And Intangible Assets | $ 360,000 | $ 360,046 | $ 3,321 | 1,778 | |||||||
Customer receivership and other related charges | $ 55,000 | $ 36,000 | 90,864 | ||||||||
Long-lived asset impairments | $ 28,000 | $ 163,000 | $ 35,000 | $ 191,375 | $ 32,110 | $ 26,768 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Millions | Jan. 01, 2019 | Apr. 01, 2018USD ($) | Mar. 06, 2018USD ($) | Feb. 21, 2018USD ($)$ / sharesshares | Jan. 01, 2018USD ($)leaseitem | Dec. 22, 2016 | Oct. 31, 2016 | Dec. 31, 2017$ / shares | Feb. 15, 2018 | Dec. 31, 2016$ / shares | Oct. 01, 2016 |
Restructuring plans activity | |||||||||||
Percentage of Annual Escalators | 3.40% | 3.40% | |||||||||
Exercise price of warrant | $ / shares | $ 1 | ||||||||||
Subsequent Events | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Estimated reduction to annual cash fixed charges | $ 62 | ||||||||||
Estimated additional cash and borrowing availability | $ 70 | ||||||||||
Number of material master leases that did not amend financial covenants | lease | 2 | ||||||||||
Number of counterparties issuing compliance waivers | item | 2 | ||||||||||
Subsequent Events | Welltower Master Lease Amendment | |||||||||||
Restructuring plans activity | |||||||||||
Amount of reduction to annual base rent payment | $ 35 | ||||||||||
Percentage of Annual Escalators | 2.00% | 2.50% | 2.90% | ||||||||
Period of extension of initial term of master lease | 5 years | ||||||||||
Period of extension of the renewal term of the master lease | 5 years | ||||||||||
Incremental rent reset cap | $ 35 | ||||||||||
Welltower Warrant | Subsequent Events | Omnibus Agreement | |||||||||||
Restructuring plans activity | |||||||||||
Exercise price of warrant | $ / shares | $ 1.33 | ||||||||||
Period from date of issuance that warrant may be exercised | 5 years | ||||||||||
Omega Warrant | Subsequent Events | Omnibus Agreement | |||||||||||
Restructuring plans activity | |||||||||||
Exercise price of warrant | $ / shares | $ 1.33 | ||||||||||
New ABL Credit Facilities | Subsequent Events | New Asset Based Lending Facilities | |||||||||||
Restructuring plans activity | |||||||||||
Face amount of debt | $ 555 | ||||||||||
Term of debt | 5 years | ||||||||||
Term Loan And Revolving Credit Facility | 90-Day LIBOR | Subsequent Events | New Asset Based Lending Facilities | |||||||||||
Restructuring plans activity | |||||||||||
Floor rate (as a percent) | 0.50% | ||||||||||
Applicable margin | 6.00% | ||||||||||
First Lien Term Loan Facility | Subsequent Events | New Asset Based Lending Facilities | |||||||||||
Restructuring plans activity | |||||||||||
Face amount of debt | $ 325 | ||||||||||
First Lien Revolving Credit Facility | Subsequent Events | New Asset Based Lending Facilities | |||||||||||
Restructuring plans activity | |||||||||||
Face amount of debt | 200 | ||||||||||
Delayed Draw Term Loan Facility | Subsequent Events | New Asset Based Lending Facilities | |||||||||||
Restructuring plans activity | |||||||||||
Face amount of debt | $ 30 | ||||||||||
Delayed Draw Term Loan Facility | 90-Day LIBOR | Subsequent Events | New Asset Based Lending Facilities | |||||||||||
Restructuring plans activity | |||||||||||
Floor rate (as a percent) | 1.00% | ||||||||||
Applicable margin | 11.00% | ||||||||||
Term Loan 2018 Amendment | Subsequent Events | Term Loan Amendment | |||||||||||
Restructuring plans activity | |||||||||||
Face amount of debt | $ 40 | ||||||||||
Fixed interest rate | 10.00% | ||||||||||
Term Loan Facility | Subsequent Events | Term Loan Amendment | |||||||||||
Restructuring plans activity | |||||||||||
Fixed interest rate | 14.00% | ||||||||||
Welltower Bridge Loans | |||||||||||
Restructuring plans activity | |||||||||||
Fixed interest rate | 10.00% | ||||||||||
Cash interest rate | 10.25% | ||||||||||
Annual increase to cash pay interest rate | 0.25% | ||||||||||
Welltower Bridge Loans | Subsequent Events | Welltower Bridge Loans Amendment | |||||||||||
Restructuring plans activity | |||||||||||
Fixed interest rate | 12.00% | ||||||||||
Paid-in-kind interest rate | 5.00% | ||||||||||
Cash interest rate | 7.00% | ||||||||||
Annual increase to cash pay component of interest if repayment efforts are unsuccessful | $ 2 | ||||||||||
Minimum | Welltower Warrant | Subsequent Events | Omnibus Agreement | |||||||||||
Restructuring plans activity | |||||||||||
Period from date of issuance that warrant may be exercised | 6 months | ||||||||||
Minimum | Omega Warrant | Subsequent Events | Omnibus Agreement | |||||||||||
Restructuring plans activity | |||||||||||
Period from date of issuance that warrant may be exercised | 6 months | ||||||||||
Minimum | Welltower Bridge Loans | Subsequent Events | Welltower Bridge Loans Amendment | |||||||||||
Restructuring plans activity | |||||||||||
Amount that must be repaid by date certain to maintain the decreased cash pay interest rate | $ 105 | ||||||||||
Maximum | Omega Warrant | Subsequent Events | Omnibus Agreement | |||||||||||
Restructuring plans activity | |||||||||||
Period from date of issuance that warrant may be exercised | 5 years | ||||||||||
Maximum | Term Loan 2018 Amendment | Subsequent Events | Term Loan Amendment | |||||||||||
Restructuring plans activity | |||||||||||
Paid-in-kind interest rate | 5.00% | ||||||||||
Maximum | Term Loan Facility | Subsequent Events | Term Loan Amendment | |||||||||||
Restructuring plans activity | |||||||||||
Paid-in-kind interest rate | 9.00% | ||||||||||
Revolving Credit Facility | New ABL Credit Facilities | Subsequent Events | New Asset Based Lending Facilities | |||||||||||
Restructuring plans activity | |||||||||||
Repayment in full of existing facility | $ 525 | ||||||||||
Welltower Master Lease | Subsequent Events | Omnibus Agreement | |||||||||||
Restructuring plans activity | |||||||||||
Amount of rent obligation under amended lease after sale of certain assets | $ 15 | ||||||||||
Welltower Inc | Subsequent Events | Omnibus Agreement | |||||||||||
Restructuring plans activity | |||||||||||
Term of debt | 10 years | ||||||||||
Paid-in-kind interest rate | 2.00% | ||||||||||
Amount of debt to be written off upon satisfying certain conditions | $ 50 | ||||||||||
Welltower Inc | Maximum | Subsequent Events | Omnibus Agreement | |||||||||||
Restructuring plans activity | |||||||||||
Amount of outstanding real estate bridge loans that may be converted into equity upon satisfying certain conditions | $ 50 | ||||||||||
Class A Common Stock | |||||||||||
Restructuring plans activity | |||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||||||||
Class A Common Stock | Welltower Warrant | Subsequent Events | Omnibus Agreement | |||||||||||
Restructuring plans activity | |||||||||||
Number of shares per warrant | shares | 900,000 | ||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | ||||||||||
Class A Common Stock | Omega Warrant | Subsequent Events | Omnibus Agreement | |||||||||||
Restructuring plans activity | |||||||||||
Number of shares per warrant | shares | 600,000 |
Schedule II - Valuation Acco107
Schedule II - Valuation Accounts (Details) - Accounts receivable allowances - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in Valuation Allowances and Reserves | |||
Balance at beginning of period | $ 218,383 | $ 189,739 | $ 133,529 |
Charged to cost and expenses | 182,947 | 93,311 | 86,224 |
Other | (1,655) | ||
Deductions or payments | (87,974) | (63,012) | (30,014) |
Balance at end of period | $ 313,357 | $ 218,383 | $ 189,739 |