Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 10, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Surgery Partners, Inc. | ||
Entity Central Index Key | 1,638,833 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 48,156,990 | ||
Entity Well-known seasoned issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Current assets: | |||
Cash and cash equivalents | $ 57,933 | $ 74,920 | |
Accounts receivable, less allowance for doubtful accounts of $18,322 and $5,329, respectively | 177,757 | 144,960 | |
Inventories | 25,591 | 23,692 | |
Prepaid expenses and other current assets | 34,620 | 24,005 | |
Acquisition escrow deposit | 13,984 | 0 | |
Indemnification receivable due from seller | 1,072 | 1,072 | |
Total current assets | 310,957 | 268,649 | |
Property and equipment, net | 184,550 | 175,006 | |
Intangible assets, net | 53,568 | 54,888 | |
Goodwill | 1,407,927 | 1,298,753 | |
Investments in and advances to affiliates | 34,103 | 33,441 | |
Restricted invested assets | 316 | 316 | |
Long-term deferred tax assets | 94,105 | 0 | |
Acquisition escrow deposit | 8,408 | 16,232 | |
Debt issuance costs | 4,246 | 5,630 | |
Other long-term assets | 8,504 | 5,879 | |
Total assets | 2,106,684 | 1,858,794 | |
Current liabilities: | |||
Accounts payable | 45,341 | 43,063 | |
Accrued payroll and benefits | 26,307 | 22,370 | |
Acquisition escrow liability | 13,984 | 0 | |
Other current liabilities | 68,410 | 53,870 | |
Current maturities of long-term debt | 27,272 | 22,088 | |
Total current liabilities | 181,314 | 141,391 | |
Long-term debt, less current maturities | 1,230,328 | 1,339,266 | |
Long-term tax receivable agreement liability | 119,655 | 0 | |
Long-term deferred tax liabilities | 0 | 49,170 | |
Acquisition escrow liability | 8,408 | 16,232 | |
Other long-term liabilities | 85,613 | 90,610 | |
Non-controlling interests—redeemable | 183,439 | 192,589 | |
Stockholders' equity: | |||
Preferred stock, $0.01 par value, 20,000,000 shares authorized, no shares issued at December 31, 2015; no shares authorized, issued or outstanding at December 31, 2014 (1) | [1] | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 shares authorized, 48,156,990 shares issued and outstanding at December 31, 2015; 1,000 shares authorized, issued and outstanding at December 31, 2014 (1) | [1] | 482 | 0 |
Additional paid-in capital | 316,294 | 58,151 | |
Retained deficit | (320,804) | (322,233) | |
Total Surgery Partners, Inc. stockholders' deficit | (4,028) | (264,082) | |
Non-controlling interests—non-redeemable | 301,955 | 293,618 | |
Total stockholders' equity | 297,927 | 29,536 | |
Total liabilities and stockholders' equity | $ 2,106,684 | $ 1,858,794 | |
[1] | As described in Note 1 herein, the authorized, issued and outstanding shares of the Company are those of Surgery Partners, Inc. as of December 31, 2015, and those of Surgery Center Holdings, Inc. as of December 31, 2014. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 18,322 | $ 5,329 |
Preferred stock, par value (USD per share) | $ 0.01 | $ 0 |
Preferred stock, shares authorized (shares) | 20,000,000 | 0 |
Preferred stock, shares issued (shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 300,000,000 | 1,000 |
Common stock, shares issued (in shares) | 48,156,990 | 1,000 |
Common stock, shares outstanding (shares) | 48,156,990 | 1,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Income Statement [Abstract] | ||||||
Revenues | $ 959,891 | $ 403,289 | $ 284,599 | |||
Operating expenses: | ||||||
Salaries and benefits | 261,685 | 101,976 | 70,923 | |||
Supplies | 242,083 | 94,224 | 63,726 | |||
Professional and medical fees | 66,583 | 18,028 | 7,372 | |||
Lease expense | 44,848 | 19,389 | 14,048 | |||
Other operating expenses | 54,127 | 20,561 | 13,775 | |||
Cost of revenues | 669,326 | 254,178 | 169,844 | |||
General and administrative expenses | 55,992 | 31,452 | 26,339 | |||
Depreciation and amortization | 34,545 | 15,061 | 11,663 | |||
Provision for doubtful accounts | 23,578 | 9,509 | 5,885 | |||
Income from equity investments | (3,777) | (1,264) | 0 | |||
(Gain) loss on disposal or impairment of long-lived assets, net | (2,097) | 1,804 | 2,482 | |||
Loss on debt extinguishment | 16,102 | 23,414 | 9,863 | |||
Merger transaction and integration costs | 17,920 | 21,690 | 0 | |||
Termination of management agreement and IPO costs | 5,834 | 0 | 0 | |||
Electronic health records incentive income | (1,761) | (3,356) | 0 | |||
Other (income) expenses | (525) | (6) | 297 | |||
Total operating expenses | 815,137 | 352,482 | 226,373 | |||
Operating income | 144,754 | 50,807 | 58,226 | |||
Tax receivable agreement expense | (119,911) | 0 | 0 | |||
Interest expense, net | (100,980) | (62,101) | (32,929) | |||
(Loss) income before income taxes | (76,137) | (11,294) | 25,297 | |||
Income tax (benefit) expense | (148,982) | 15,758 | 7,570 | |||
Net income (loss) | 72,845 | (27,052) | 17,727 | |||
Less: Net income attributable to non-controlling interests | (71,416) | (38,845) | (26,789) | |||
Net income (loss) attributable to Surgery Partners, Inc. | $ 1,429 | $ (65,897) | $ (9,062) | |||
Net income (loss) per share attributable to common stockholders | ||||||
Basic (in USD per share) | $ 0.04 | $ (2.04) | $ (0.28) | |||
Diluted (in USD per share) | [1] | $ 0.04 | $ (2.04) | $ (0.28) | ||
Weighted average common shares outstanding | ||||||
Basic (in shares) | [2] | 36,066,233 | 32,295,364 | 31,815,520 | ||
Diluted (in shares) | 37,464,387 | 32,295,364 | [1],[2] | 31,815,520 | [1],[2] | |
[1] | The impact of potentially dilutive securities for the years ended December 31, 2014 and 2013 was not considered because the effect would be anti-dilutive in each of those periods. | |||||
[2] | Effect of the Reorganization, as defined in Note 1, has been retrospectively applied to all periods presented. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 72,845 | $ (27,052) | $ 17,727 |
Other comprehensive income | 0 | 0 | 0 |
Comprehensive income (loss) | 72,845 | (27,052) | 17,727 |
Less: Comprehensive income attributable to non-controlling interests | (71,416) | (38,845) | (26,789) |
Comprehensive income (loss) attributable to Surgery Partners, Inc. | $ 1,429 | $ (65,897) | $ (9,062) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Deficit | Non-Controlling Interests— Non-Redeemable | ||
Beginning Balance, stockholders' equity (shares) at Dec. 31, 2012 | [1] | 1,000 | |||||
Beginning Balance, stockholders' equity at Dec. 31, 2012 | $ 124,105 | $ 0 | [1] | $ 59,061 | $ (23,261) | $ 88,305 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | 17,727 | (9,062) | 26,789 | ||||
Equity-based compensation | 455 | 455 | |||||
Acquisition and disposal of shares of non-controlling interests, net | (396) | 203 | (599) | ||||
Distributions to owners | (131,013) | (131,013) | |||||
Distributions to non-controlling interest—non-redeemable holders | (25,253) | (25,253) | |||||
Ending Balance, stockholders' equity (shares) at Dec. 31, 2013 | [1] | 1,000 | |||||
Ending Balance, stockholders' equity at Dec. 31, 2013 | (14,375) | $ 0 | [1] | 59,719 | (163,336) | 89,242 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | (31,131) | (65,897) | 34,766 | ||||
Equity-based compensation | 942 | 942 | |||||
Acquisition and disposal of shares of non-controlling interests, net | 202,657 | 633 | 202,024 | ||||
Distributions to owners | (93,000) | (93,000) | |||||
Distributions to non-controlling interest—non-redeemable holders | (32,414) | (32,414) | |||||
Repurchase of units | $ (3,143) | (3,143) | |||||
Ending Balance, stockholders' equity (shares) at Dec. 31, 2014 | 1,000 | 1,000 | [1] | ||||
Ending Balance, stockholders' equity at Dec. 31, 2014 | $ 29,536 | $ 0 | [1] | 58,151 | (322,233) | 293,618 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | 55,229 | 1,429 | 53,800 | ||||
Equity-based compensation | 7,500 | 7,502 | |||||
Acquisition and disposal of shares of non-controlling interests, net | 3,486 | (835) | 4,321 | ||||
Distributions to non-controlling interest—non-redeemable holders | (49,784) | (49,784) | |||||
Initial public offering (in shares) | 14,285,000 | ||||||
Initial public offering | 250,979 | $ 143 | 250,836 | ||||
Effect of Reorganization (shares) | [1],[2] | 33,870,990 | |||||
Effect of Reorganization | [2] | 339 | $ 339 | ||||
Other | $ 640 | 640 | |||||
Ending Balance, stockholders' equity (shares) at Dec. 31, 2015 | 48,156,990 | 48,156,990 | [1] | ||||
Ending Balance, stockholders' equity at Dec. 31, 2015 | $ 297,927 | $ 482 | [1] | $ 316,294 | $ (320,804) | $ 301,955 | |
[1] | As described in Note 1 herein, the common stock of the Company is that of Surgery Partners, Inc. as of December 31, 2015 and that of Surgery Center Holdings, Inc. as of December 31, 2014 and 2013. | ||||||
[2] | As a result of the Reorganization that occurred on September 30, 2015 (as further described in Note 1), Surgery Center Holdings, Inc, became an indirect wholly owned subsidiary of Surgery Partners, Inc. and the common stock of Surgery Center Holdings, Inc. is eliminated in consolidation. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 72,845 | $ (27,052) | $ 17,727 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 34,545 | 15,061 | 11,663 |
Amortization of debt issuance costs and discounts | 6,263 | 3,746 | 2,430 |
Goodwill impairment | 0 | 0 | 581 |
Amortization of unfavorable lease liability | (431) | (72) | 0 |
Equity-based compensation | 7,502 | 942 | 455 |
(Gain) loss on disposal or impairment of long-lived assets, net | (2,097) | 1,804 | 2,482 |
Loss on debt extinguishment | 16,102 | 23,414 | 9,863 |
Tax receivable agreement expense | 119,911 | 0 | 0 |
Deferred income taxes | (149,891) | 14,089 | 7,136 |
Interest on contingent consideration obligation | 1,041 | 964 | 892 |
Provision for doubtful accounts | 23,578 | 9,509 | 5,885 |
Income from equity investments, net of distributions received | (543) | (713) | 0 |
Changes in operating assets and liabilities, net of acquisitions and divestitures: | |||
Accounts receivable | (48,783) | (20,161) | (9,722) |
Other operating assets and liabilities | 4,439 | 418 | (314) |
Net cash provided by operating activities | 84,481 | 21,949 | 49,078 |
Cash flows from investing activities: | |||
Purchases of property and equipment, net | (33,439) | (7,736) | (4,150) |
Payments for acquisitions, net of cash acquired | (112,596) | (263,280) | (486) |
Proceeds from divestitures | 11,193 | 0 | 1,014 |
Net cash used in investing activities | (134,842) | (271,016) | (3,622) |
Cash flows from financing activities: | |||
Proceeds from initial public offering, net of offering costs | 250,979 | 0 | 0 |
Principal payments on long-term debt | (328,329) | (1,009,874) | (339,908) |
Borrowings of long-term debt | 196,366 | 1,477,288 | 462,983 |
Payments of debt issuance costs | 0 | (7,496) | (4,974) |
Penalty on prepayment of debt | (7,305) | 0 | 0 |
Payment of premium of debt extinguishment | 0 | (17,840) | 0 |
Distributions to non-controlling interest holders | (69,720) | (35,182) | (25,253) |
Distribution to owners | 0 | (93,000) | (131,013) |
Payments related to ownership transactions with consolidated affiliates | (12,175) | 278 | 503 |
Repurchase of units | 0 | (3,143) | 0 |
Financing lease obligation | 3,558 | (70) | 0 |
Net cash provided by (used in) financing activities | 33,374 | 310,961 | (37,662) |
Net (decrease) increase in cash and cash equivalents | (16,987) | 61,894 | 7,794 |
Cash and cash equivalents at beginning of period | 74,920 | 13,026 | 5,232 |
Cash and cash equivalents at end of period | 57,933 | 74,920 | 13,026 |
Non-cash transactions: | |||
Notes payable issued in connection with an acquisition | 7,430 | 0 | 0 |
Interest paid, net of interest income received | 5,443 | 3,252 | 1,054 |
Cash payments: | |||
Interest paid, net of interest income received | 96,799 | 50,377 | 31,101 |
Cash paid for income taxes | $ 1,093 | $ 676 | $ 538 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Surgery Partners, Inc. , a Delaware corporation (together with its subsidiaries, the “Company”), was formed April 2, 2015, as a holding company for the purpose of facilitating an initial public offering (the “IPO”) of shares of common stock. Prior to September 30, 2015, the Company conducted business through Surgery Center Holdings, Inc. and its subsidiaries. Surgery Center Holdings, LLC was and is the sole direct owner of the equity interests of Surgery Center Holdings, Inc. and had no other material assets. On September 30, 2015, Surgery Partners, Inc. became the direct parent and sole member of Surgery Center Holdings, LLC (the "Reorganization"). In the Reorganization, all of the equity interests held by the pre-IPO Owners of Surgery Center Holdings, LLC were contributed to Surgery Partners, Inc. in exchange for 33,871,990 shares of common stock of Surgery Partners, Inc. and certain rights to additional payments under a tax receivable agreement. After giving effect to the Reorganization, Surgery Partners, Inc. is a holding company, and its sole material asset is an equity interest in Surgery Center Holdings, LLC. The Company's consolidated financial statements for periods prior to the Reorganization represent the historical operating results and financial position of Surgery Center Holdings, Inc. and certain of its subsidiaries. On October 1, 2015 , the Company completed its IPO of 14,285,000 shares of common stock at an offering price of $19.00 per share. On October 6, 2015 , the Company received net proceeds from the sale of common stock in this offering of $255.8 million , after deducting underwriting discounts and other fees of $15.6 million . These net proceeds were used to repay a portion of the borrowings outstanding under the 2014 Second Lien and to pay fees associated with this offering. The Company also incurred an additional $4.8 million in costs directly related to the IPO. On November 3, 2014 , the Company completed the acquisition of Symbion Holdings Corp. ("Symbion") ("the Merger"), which added 55 surgical facilities, including 49 ambulatory surgery centers ("ASCs") and six surgical hospitals, to its network of existing facilities. The Company acquired Symbion for a purchase price of $792.0 million pursuant to the terms of an Agreement and Plan of Merger dated as of June 13, 2014 . The Symbion acquisition was financed through the issuance of approximately $1.4 billion under the Company's Term Loans and Revolving Facility. As of December 31, 2015 , the Company owned and operated a national network of surgical facilities and ancillary services in 29 states. The surgical facilities, which include ASCs and surgical hospitals, primarily provide non-emergency surgical procedures across many specialties, including, among others, otolaryngology ("ENT"), gastroenterology (" GI"), general surgery, ophthalmology, orthopedics, cardiology and pain management. The Company's surgical hospitals provide services such as diagnostic imaging, laboratory, obstetrics, oncology, pharmacy, physical therapy and wound care. Ancillary services are comprised of a diagnostic laboratory, multi-specialty physician practices, urgent care facilities, anesthesia services, optical services and specialty pharmacy services. As of December 31, 2015 , the Company owned or operated a portfolio of 101 surgical facilities, comprised of 96 ASCs and five surgical hospitals. The Company owns these facilities in partnership with physicians and, in some cases, healthcare systems in the markets and communities it serves. The Company owned a majority interest in 72 of the surgical facilities and consolidated 90 of these facilities for financial reporting purposes. In addition, the Company owned or operated a network of 46 physician practices. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, as well as interests in partnerships and limited liability companies controlled by the Company through its ownership of a majority voting interest or other rights granted to the Company by contract to manage and control the affiliate's business. All significant intercompany balances and transactions are eliminated in consolidation. Non-Controlling Interests The physician limited partners and physician minority members of the entities that the Company controls are responsible for the supervision and delivery of medical services. The governance rights of limited partners and minority members are restricted to those that protect their financial interests. Under certain partnership and operating agreements governing these partnerships and limited liability companies, the Company could be removed as the sole general partner or managing member for certain events such as material breach of the partnership or operating agreement, gross negligence or bankruptcy. These protective rights do not preclude consolidation of the respective partnerships and limited liability companies. Ownership interests in consolidated subsidiaries held by parties other than the Company are identified and generally presented in the consolidated financial statements within the equity section but separate from the Company's equity. However, in instances in which certain redemption features that are not solely within the control of the Company are present, classification of non-controlling interests outside of permanent equity is required. Consolidated net income attributable to the Company and to the non-controlling interests are identified and presented on the consolidated statements of operations; changes in ownership interests are accounted for as equity transactions assuming the Company continues to consolidate related entities. Certain transactions with non-controlling interests are classified within financing activities in the consolidated statements of cash flows. The consolidated financial statements of the Company include all assets, liabilities, revenues and expenses of surgical facilities in which the Company has sufficient ownership and rights to allow the Company to consolidate the surgical facilities. Similar to its investments in non-consolidated affiliates, the Company regularly engages in the purchase and sale of ownership interests with respect to its consolidated subsidiaries that do not result in a change of control. Non-Controlling Interests — Redeemable. Each of the partnerships and limited liability companies through which the Company owns and operates its surgical facilities is governed by a partnership or operating agreement. In certain circumstances, the partnership and operating agreements for the Company's surgical facilities provide that the facilities will purchase all of the physicians’ ownership if certain adverse regulatory events occur, such as it becoming illegal for the physicians to own an interest in a surgical facility, refer patients to a surgical facility or receive cash distributions from a surgical facility. The non-controlling interests - redeemable are reported outside of stockholders' equity in the consolidated balance sheets. A summary of activity related to the non-controlling interests—redeemable follows (in thousands): Balance at December 31, 2013 $ — Net income attributable to non-controlling interests—redeemable 4,079 Acquisition and disposal of shares of non-controlling interests, net—redeemable 191,278 Distributions to non-controlling interest —redeemable holders (2,768 ) Balance at December 31, 2014 192,589 Net income attributable to non-controlling interests—redeemable 17,616 Acquisition and disposal of shares of non-controlling interests, net—redeemable (6,830 ) Distributions to non-controlling interest —redeemable holders (19,936 ) Balance at December 31, 2015 $ 183,439 Variable Interest Entities The consolidated financial statements include the accounts of variable interest entities in which the Company is the primary beneficiary under the provisions of Accounting Standards Codification ("ASC") Topic 810, Consolidation . At December 31, 2015 , the variable interest entities include five surgical facilities, three anesthesia practices and one physician practice. At December 31, 2014 , the variable interest entities included an additional surgical facility which was disposed of during the three months ended March 31, 2015 and an additional anesthesia practice which no longer met variable interest entity classification in July 2015. There were an additional four acquisitions at December 31, 2015 . The Company has the power to direct the activities that most significantly impact the variable interest entity's economic performance. Additionally, the Company would absorb the majority of the expected losses of these entities should they occur. As of December 31, 2015 and December 31, 2014 , the consolidated balance sheets of the Company included total assets of $104.2 million and $24.7 million , respectively, and total liabilities of $13.2 million and $1.7 million , respectively, related to the Company's variable interest entities. Equity Method Investments The Company has non-consolidating investments in surgical facilities and management companies that own or manage surgical facilities. These investments are accounted for using the equity method of accounting. The total amount of these investments included in investments in and advances to affiliates in the consolidated balance sheets was $34.1 million and $33.4 million as of December 31, 2015 and December 31, 2014 , respectively. Use of Estimates The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and footnotes. Examples include, but are not limited to, estimates of accounts receivable allowances, professional and general liabilities and the estimate of deferred tax assets or liabilities. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All adjustments are of a normal, recurring nature. Actual results could differ from those estimates. Reclassifications Certain reclassifications have been made to the comparative periods' financial statements to conform to the current year presentation. The reclassifications primarily related to the presentation of certain expenses within costs of revenue and had no impact on the Company's consolidated financial position, results of operations or cash flows. Fair Value of Financial Instruments The fair value of a financial instrument is the amount at which the instrument could be exchanged in an orderly transaction between market participants to sell the asset or transfer the liability. The Company uses fair value measurements based on quoted prices in active markets for identical assets or liabilities (Level 1), inputs other than quoted prices in active markets that are either directly or indirectly observable (Level 2), or unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions (Level 3), depending on the nature of the item being valued. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, restricted invested assets and accounts payable approximate their fair values. A summary of the carrying amounts and fair values of the Company's long-term debt follows (in thousands): Carrying Amount Fair Value December 31, December 31, December 31, December 31, 2014 First Lien Credit Agreement, net of debt issuance and discount of $20,223 and $23,818 at December 31, 2015 and 2014, respectively $ 841,078 $ 846,183 $ 828,816 $ 820,798 2014 Second Lien Credit Agreement, net of debt issuance and discount of $8,159 and $18,184 at December 31, 2015 and 2014, respectively $ 238,341 $ 471,816 $ 225,382 $ 452,943 The fair values of the 2014 First Lien Credit Agreement and 2014 Second Lien Credit Agreement, as defined in Note 5 on Long-Term Debt, were based on a Level 2 computation using quoted prices for identical liabilities in inactive markets at December 31, 2015 and 2014 , as applicable. The carrying amounts related to the Company's other long-term debt obligations approximate their fair values. The Company maintains a supplemental executive retirement savings plan (the "SERP") for certain former Symbion executive officers. The SERP is a non-qualified deferred compensation plan for eligible executive officers and other key employees of the Company that allows participants to defer portions of their compensation. The fair value of the SERP asset and liability was based on a quoted market price, or a Level 1 computation. As of December 31, 2015 and 2014 , the fair value of the assets in the SERP were $1.6 million and $1.4 million , respectively, and were included in other long-term assets in the consolidated balance sheets. The Company had a liability related to the SERP of $1.6 million and $1.4 million as of December 31, 2015 and 2014 , respectively, which was included in other long-term liabilities in the consolidated balance sheets. Revenues The Company recognizes revenues in the period in which the services are performed. Patient service revenues and receivables from third-party payors are recorded net of estimated contractual adjustments and allowances, which the Company estimates based on the historical trend of its cash collections and contractual write-offs, accounts receivable agings, established fee schedules, contracts with payors and procedure statistics. A summary of revenues by service type as a percentage of total revenues follows: Year Ended December 31, 2015 2014 2013 Patient service revenues: Surgical facilities revenues 91.6 % 83.9 % 78.9 % Ancillary services revenues 6.4 % 12.3 % 15.5 % 98.0 % 96.2 % 94.4 % Other service revenues: Optical services revenues 1.5 % 3.5 % 5.6 % Other 0.5 % 0.3 % — % 2.0 % 3.8 % 5.6 % Total revenues 100.0 % 100.0 % 100.0 % Patient service revenues. The fee charged for healthcare procedures performed in surgical facilities varies depending on the type of service provided, but usually includes all charges for usage of an operating room, a recovery room, special equipment, medical supplies, nursing staff and medications. The fee does not normally include professional fees charged by the patient’s surgeon, anesthesiologist or other attending physician, which are billed directly by such physicians to the patient or third-party payor. However, in several surgical facilities, the Company charges for anesthesia services. Ancillary service revenues include fees for patient visits to the Company's physician practices, pharmacy services and diagnostic tests ordered by physicians. Patient service revenues are recognized on the date of service, net of estimated contractual adjustments and discounts from third-party payors, including Medicare and Medicaid. Changes in estimated contractual adjustments and discounts are recorded in the period of change. During the year ended December 31, 2015 , the Company recognized an increase to patient service revenues as a result of changes in estimates to third-party settlements related to prior years of approximately $2.3 million compared to a reduction to patient service revenues of $104,000 during the year ended December 31, 2014 . These adjustments were related to two of the Company's surgical hospitals that were acquired in connection with the acquisition of Symbion on November 3, 2014 . The following table sets forth patient service revenues by type of payor and as a percentage of total patient service revenues for the Company's consolidated surgical facilities (dollars in thousands): Year Ended December 31, 2015 2014 2013 Amount % Amount % Amount % Patient service revenues: Private insurance $ 516,739 55.0 % $ 202,172 52.1 % $ 162,888 60.6 % Government 359,471 38.2 % 134,041 34.5 % 75,125 28.0 % Self-pay 16,190 1.7 % 13,645 3.5 % 7,587 2.8 % Other 48,311 5.1 % 38,215 9.9 % 23,081 8.6 % Total patient service revenues $ 940,711 100.0 % $ 388,073 100.0 % $ 268,681 100.0 % Other service revenues: Optical service revenues $ 14,572 $ 14,193 $ 15,918 Other revenues 4,608 1,023 — Total net revenues $ 959,891 $ 403,289 $ 284,599 Other service revenues. Optical service revenues consist of product sales from the Company's optical laboratories as well as handling charges billed to the members of the Company's optical products purchasing organization and sales from the Company's marketing products and services business. The Company's optical products purchasing organization negotiates volume buying discounts with optical products manufacturers. The buying discounts and any handling charges billed to the members of the buying group represent the revenue recognized for financial reporting purposes. Revenue is recognized as orders are shipped to members. The Company bases its estimates for sales returns and discounts on historical experience and has not experienced significant fluctuations between estimated and actual return activity and discounts given. The Company's optical laboratories manufacture and distribute corrective lenses and eyeglasses to ophthalmologists and optometrists. Revenue is recognized when product is shipped, net of allowance for discounts. The Company's marketing products and services businesses recognize revenue when product is shipped or services are rendered. Other revenues include management and administrative service fees derived from the non-consolidated facilities that the Company accounts for under the equity method, management of surgical facilities in which it does not own an interest, and management services provided to physician practices for which the Company is not required to provide capital or additional assets. The fees derived from these management arrangements are based on a predetermined percentage of the revenues of each facility or practice and are recognized in the period in which services are rendered. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash and cash equivalent balances at high credit quality financial institutions. Accounts Receivable and Allowances for Contractual Adjustments and Doubtful Accounts Accounts receivable are recorded net of contractual adjustments and allowances for doubtful accounts to reflect accounts receivable at net realizable value. Accounts receivable consists of receivables from federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies, employers and patients. Management recognizes that revenues and receivables from government agencies are significant to the Company's operations, but it does not believe that there is significant credit risk associated with these government agencies. Concentration of credit risk with respect to other payors is limited because of the large number of such payors. As of December 31, 2015 and 2014 , the Company had third-party Medicaid settlements of $5.2 million and $11.7 million , respectively, in other current liabilities in the consolidated balance sheets. The Company recognizes that final reimbursement of accounts receivable is subject to final approval by each third-party payor. However, because the Company has contracts with its third-party payors and also verifies insurance coverage of the patient before medical services are rendered, the amounts that are pending approval from third-party payors are not significant. The Company's policy is to collect co-payments and deductibles prior to providing medical services. It is also the Company's policy to verify a patient’s insurance 72 hours prior to the patient’s procedure. Patient services of the Company are primarily non-emergency, which allows the surgical facilities to control the procedures for which third-party reimbursement is sought and obtained. The Company does not require collateral from self-pay patients. The Company analyzes accounts receivable at each of its facilities to ensure the proper aged category and collection assessment. At a consolidated level, the Company's policy is to review accounts receivable aging, by facility, to determine the appropriate allowance for doubtful accounts. Patient account balances are reviewed for delinquency based on contractual terms. This review is supported by an analysis of the actual revenues, contractual adjustments and cash collections received. An account balance is written off only after the Company has pursued collection with legal or collection agency assistance or otherwise has deemed an account to be uncollectible. A summary of the changes in the allowance for doubtful accounts receivable follows (in thousands): Balance at December 31, 2012 $ 3,234 Provision for doubtful accounts 5,885 Accounts written off, net of recoveries (4,091 ) Balance at December 31, 2013 5,028 Provision for doubtful accounts 9,509 Accounts written off, net of recoveries (9,208 ) Balance at December 31, 2014 5,329 Provision for doubtful accounts 23,578 Accounts written off, net of recoveries (10,585 ) Balance at December 31, 2015 $ 18,322 The Company records an estimate for doubtful accounts based on the aging category and historical collection experience of each product sales or other business included in other service revenues, as discussed in the note above. The receivables related to the Company's optical products purchasing organization are recognized separately from patient accounts receivable, as discussed above, and are included in other current assets in the consolidated balance sheets. Such receivables were $8.4 million and $7.6 million at December 31, 2015 and 2014 , respectively. Inventories Inventories, which consist primarily of medical and drug supplies, are stated at the lower of cost or market value. Cost is determined using the first-in, first-out method. Prepaid Expenses and Other Current Assets A summary of prepaid expenses and other current assets follows (in thousands): December 31, 2015 2014 Prepaid expenses $ 7,409 $ 7,050 Receivables - optical product purchasing organization 8,434 7,556 Acquisition escrow receivable 8,000 — Other current assets 10,777 9,399 Total $ 34,620 $ 24,005 Property and Equipment Property and equipment are stated at cost or, if obtained through acquisition, at fair value determined on the date of acquisition. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets, generally three to five years for computers and software and five to seven years for furniture and equipment. Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease term or the estimated useful life of the assets. Routine maintenance and repairs are expensed as incurred, while expenditures that increase capacities or extend useful lives are capitalized. The Company also leases certain facilities and equipment under capital leases. Assets held under capital leases are stated at the present value of minimum lease payments at the inception of the related lease. Such assets are depreciated on a straight-line basis over the lesser of the lease term or the remaining useful life of the leased asset. Goodwill and Intangible Assets Goodwill represents the fair value of the consideration provided in an acquisition over the fair value of net assets acquired and is not amortized. The Company has indefinite-lived intangible assets related to the certificates of need held in jurisdictions where certain of its surgical facilities are located. The Company also has finite-lived intangible assets related to physician guarantee agreements, non-compete agreements, management agreements and customer relationships. Physician income guarantees are amortized into salaries and benefits costs in the consolidated statements of operations over the commitment period of the contract, generally three to four years . Non-compete agreements and management rights agreements are amortized into depreciation and amortization expense in the consolidated statements of operations over the service lives of the agreements, ranging from two years to 20 years for non-compete agreements and 15 years for the management rights agreements. Customer relationships are amortized into depreciation and amortization expense in the consolidated statements of operations over the estimated lives of the relationships, ranging from three to ten years . Impairment of Long-Lived Assets, Goodwill and Intangible Assets The Company evaluates the carrying value of long-lived assets when impairment indicators are present or when circumstances indicate that impairment may exist. The Company performs an impairment test by preparing an expected undiscounted cash flow projection. If the projection indicates that the recorded amount of the long-lived asset is not expected to be recovered, the carrying value is reduced to estimated fair value. The cash flow projection and fair value represents management’s best estimate, using appropriate and customary assumptions, projections and methodologies, at the date of evaluation. No impairment losses on long-lived assets were recognized during the years ended December 31, 2015 , 2014 and 2013 . The Company tests its goodwill and indefinite-lived intangible assets for impairment annually, as of October 1 , or more frequently if certain indicators arise. The Company performs its annual goodwill impairment assessment by developing a fair value estimate of the business enterprise as of October 1, 2015 using a discounted cash flows approach and comparing the fair value to the carrying value of the net assets of the individual reporting units as of October 1, or additionally if impairment indicators are present. The results of the Company's fair value estimate are then corroborated using a market-based approach. The result of the Company's annual goodwill impairment test at October 1, 2015 indicated no impairment. During the year ended December 31, 2013 , the Company recorded an impairment charge of $581,000 related to its Patient Education Concepts reporting unit, which was the entire goodwill balance of this reporting unit. The impairment charge is included in the consolidated statement of operations as of December 31, 2013 as a component of other (income) expense. There was no impairment charges recorded during the year ended December 31, 2014 . During the quarter ended December 31, 2015 , the Company voluntarily changed its annual goodwill and indefinite-lived intangible assets impairment testing date from December 31 to October 1 of each year. The change in the goodwill and indefinite-lived intangible assets impairment testing date better aligns the impairment testing procedures with the timing of the Company’s annual strategic planning and forecasting process, which is a significant input to the testing, and provides additional time for the completion of the annual analysis prior to the completion of the Company’s annual reporting period. Accordingly, the Company considers this accounting principle change to be preferable. The Company is unable to objectively determine, without the use of hindsight, the projected cash flows and related valuation estimates that would have been used in earlier periods. Therefore, the Company prospectively applied the change in the annual goodwill impairment and indefinite-lived intangible assets testing date beginning October 1, 2015 as retrospective application to prior periods is deemed impracticable. This change in testing date did not delay, accelerate, or avoid a goodwill impairment charge. Restricted Invested Assets Restricted invested assets of $316,000 at December 31, 2015 and 2014 were related to a requirement under the operating lease agreement at the Company's Chesterfield, Missouri facility. In accordance with the provisions of the lease agreement, the Company has a deposit with the landlord that shall be held as security for performance under the Company's covenants and obligations within the agreement through January 2024 . Other Long-Term Assets A summary of other long-term assets follows (in thousands): December 31, 2015 2014 Notes receivable $ 212 $ 182 Deposits 2,475 2,196 Assets of SERP 1,606 1,402 Other 4,211 2,099 Total $ 8,504 $ 5,879 Other Current Liabilities A summary of other current liabilities follows (in thousands): December 31, 2015 2014 Interest payable $ 5,410 $ 7,027 Current taxes payable 1,977 3,189 Insurance liabilities 5,476 5,552 Third-party settlements 5,222 11,708 Acquisition consideration payable 16,768 — Amounts due to patients and payors 11,424 9,476 Other accrued expenses 22,133 16,918 Total $ 68,410 $ 53,870 Other Long-Term Liabilities A summary of other long-term liabilities follows (in thousands): December 31, 2015 2014 Facility lease obligations $ 53,927 $ 50,749 Medical malpractice liability 6,339 4,253 Liability of SERP 1,608 1,415 Contingent consideration obligation 14,049 13,009 Acquisition consideration payable — 16,768 Unfavorable lease liability 1,996 2,427 Other long-term liabilities 7,694 1,989 Total $ 85,613 $ 90,610 The Company has facility lease obligations in connection with the surgical hospital located in Idaho Falls, Idaho and with a radiation oncology building at this facility. The obligation is payable to the lessor of this facility for the land, building and improvements. The current portion of the lease obligation was $797,000 and $568,000 at December 31, 2015 and 2014 , respectively, and was included in other current liabilities in the consolidated balance sheets. The total of the facility lease obligations related to the surgical hospital and radiation oncology building in Idaho Falls, Idaho was $50.8 million and $51.3 million at December 31, 2015 and 2014 , respectively. In August 2015, the Company sold real estate in Ocala, Florida for $4.2 million and subsequently leased the real estate from the new owner. As this transaction did not qualify for sale leaseback treatment under ASC 840, Leases , the Company recorded a financing lease obligation of $4.2 million . The obligation is payable to the lessor of this facility for the building. The current portion of the liability was $169,000 included in other current liabilities and $3.9 million included in other long-term liabilities at December 31, 2015 . Equity-Based Compensation Transactions in which the Company receives employee and non-employee services in exchange for the Company’s equity instruments or liabilities that are based on the fair value of the Company’s equity securities or may be settled by the issuance of these securities are accounted for using a fair value method. Prior to the Reorganization, on the grant date, the Company employed a market approach to estimate the fair value of equity-based awards based on various considerations and assumptions, including implied earnings multiples and other metrics of relevant market participants, the Company’s operating results and forecasted cash flows and the Company’s capital structure. Such estimates require the input of highly subjective, complex assumptions. However, such assumptions are no longer required to determine fair value of shares of the Company’s common stock as its underlying shares began trading publicly during the fourth quarter of 2015. The Company applies the Black-Scholes-Merton method of valuation in determining share-based compensation expense for option awards. The Company’s policy is to recognize compensation expense using the straight line method over the relevant vesting period for units that vest based on time. Prior to the Reorganization, employees held membership units in Surgery Center Holdings, LLC, and the associated expense was referred to as unit-based compensation; following the Reorganization, such expense is referred to as equity-based compensation. Earnings Per Share Basic and diluted earnings per share are calculated in accordance with ASC 260, Earnings Per Share , based on the weighted-average number of shares outstanding in each period and dilutive stock options, unvested shares and warrants, to the extent such securities exist and have a dilutive effect on earnings per share. Professional, General and Workers' Compensation Insurance The Company maintains general liability and professional liability insurance in excess of self-insured retentions through third party commercial insurance carriers in amounts that management believes is sufficient for the Company's operations, although, potentially, some claims may exceed the scope of coverage in effect. The professional and general insurance coverage is on a claims-made basis. Workers' compensation insurance is on an occurrence basis. The Company expenses the costs under the self-insured retention exposure for general and professional liability and workers compensation claims which relate to (i) claims made during the policy period, which are offset by insurance recoveries and (ii) an estimate of claims incurred but not yet reported that are expected to be reported after the policy period expires. Reserves and provisions are based upon actuarially determined estimates using individual case-basis valuations and actuarial analysis. Reserves for professional, general and workers' compensation claim liabilities are determined with no regard for expected insurance recoveries and are presented gross on the consolidated balance sheets. Total professional, general and workers' compensation claim liabilities as of December 31, 2015 and 2014 are $9.5 million and $7.4 million , respectively. The balance includes expected insurance recoveries of $6.3 million and $5.0 million as of December 31, 2015 and 2014 , respectively. Electronic Health Record Incentives The American Recovery and Reinvestment Act of 2009 provides for Medicare and Medicaid incentive payments beginning in calendar year 2011 for eligible hospitals and professionals that implement and achieve meaningful use of certified Electronic Health Records ("EHR") technology. Several of the Company's surgical hospitals, which were acquired in connection with the acquisition of Symbion, have implemented plans to comply with the EHR meaningful use requirements of the Health Information Technology for Economic and Clinical Health Act ("HITECH") in time to qualify for the maximum available incentive payments. Compliance with the meaningful use requirements has and will continue to result in significant costs including business process changes, professional services focused on successfully designing and implementing the Company's EHR solutions, along with costs associated with the hardware and software components of the project. The Company currently estimates that total costs incurred to comply will be recovered through the total EHR incentive payments over the projected life cycle of this initiative. The Company incurs both capital expenditures and operating expenses in connection with the implementation of its various EHR initiatives. The amount and timing of these expenditures do not directly correlate with the timing of the Company's cash receipts or recognition of the EHR incentives as other income. The Company expects to receive incentive payments and recognize corresponding revenue upon the completion of the EHR meaningful use requirements. The Company recorded incentive income of $1.8 million and $3.4 million during the years ended December 31, 2015 and 2014 , respectively. Income Taxes The Company uses the asset and liability method to account for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If a net operating loss carryforward exists, the Company makes a determination as to whether that net operatin |
Acquisitions and Developments
Acquisitions and Developments | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisitions and Developments | Acquisitions and Developments The Company accounts for its business combinations in accordance with the fundamental requirements of the acquisition method of accounting and under the premise that an acquirer can be identified for each business combination. The acquirer is the entity that obtains control of one or more businesses in the business combination and the acquisition date is the date the acquirer achieves control. The assets acquired, liabilities assumed and any non-controlling interests in the acquired business at the acquisition date are recognized at their fair values as of that date, and the direct costs incurred in connection with the business combination are recorded and expensed separately from the business combination. Acquisitions in which the Company is able to exert significant influence but does not have control are accounted for using the equity method. 2015 Transactions Surgical Facility Acquisitions During the year ended December 31, 2015 , the Company acquired a controlling interest in two surgical facilities located in new markets and three surgical facilities, four anesthesia practices and an urgent care facility in existing markets for an aggregate purchase price of $84.2 million . The Company consolidates these facilities for financial reporting purposes. These transactions were funded with a combination of cash from operations, facility ownership, and proceeds from the refinancing of the Company's credit facilities in connection with the Symbion acquisition. Ancillary Services During the year ended December 31, 2015 , through its recruiting efforts and capital-efficient acquisitions, the Company completed thirteen in-market physician practice transactions through an aggregate investment of $40.4 million . These transactions added a total of 17 physicians to the Company’s physician network and were funded with a combination of cash from operations and revolver proceeds. The aggregate amounts preliminarily recognized as of the acquisition date for each major class of assets and liabilities assumed in the acquisitions closed during the year ended December 31, 2015 as follows: Cash consideration $ 122,470 Fair value of non-controlling interests 13,842 Aggregate fair value of acquisitions 136,312 Net assets acquired: Cash and cash equivalents 1,350 Accounts receivable 8,448 Other current assets 9,650 Property and equipment 3,293 Intangible assets 7,539 Long-term assets 40 Accounts payable and other current assets (5,391 ) Current maturities of long-term debt (226 ) Long-term deferred tax liability (1,836 ) Long-term debt (367 ) Net assets acquired 22,500 Excess of fair value over identifiable net assets acquired $ 113,812 The fair values assigned to certain assets and liabilities assumed by the Company have been estimated on a preliminary basis and are subject to change as new facts and circumstances emerge that were present at the date of acquisition. Acquisition of Symbion On June 13, 2014 , the Company, through its wholly-owned subsidiary, SCH Acquisition Corp. (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Symbion Holdings Corporation ("Symbion"). Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Symbion, with Symbion being the surviving corporation in the merger (the “Merger”). At the closing of the Merger, each share of common stock of Symbion, other than those held by Symbion or by the Company, Merger Sub or their subsidiaries and other than those shares with respect to which appraisal rights are properly exercised in accordance with the General Corporation Law of the State of Delaware, were converted into the right to receive a cash payment per share equal to (x) $792.0 million , subject to certain adjustments for Symbion’s cash, debt, transaction expenses, working capital and other items at closing, plus the aggregate exercise price of all vested options, minus certain escrowed amounts relating to post-closing purchase price adjustment and indemnity obligations, divided by (y) the number of shares outstanding on a fully-diluted basis assuming full exercise of vested options and exercise of rights to receive shares upon the exchange of the 8.00% Senior PIK Exchangeable Notes due 2017 issued by Symbion (the “Merger Consideration”). In addition, each outstanding option to purchase shares of Symbion’s common stock were cancelled, and the holders of vested options were paid an amount equal to the excess, if any, of the Merger Consideration over the per-share exercise price of such vested options. The Company obtained financing commitments for the transactions contemplated by the Merger Agreement, the aggregate proceeds of which were sufficient for the Company to pay the aggregate Merger Consideration and all related fees and expenses. The Company completed the Merger effective November 3, 2014 . At closing, the Company paid approximately $300.1 million in cash, including $16.2 million funded to an escrow account, and assumed approximately $472.4 million of outstanding indebtedness of Symbion, plus related accrued and unpaid interest. During the three months ended June 30, 2015, $2.1 million of the escrow account was distributed based on a working capital settlement reducing the total amount funded on the escrow account to $14.0 million as of December 31, 2015 . The Company received $1.2 million of the escrow disbursement reducing the cash consideration to $298.9 million and adjusted the purchase price allocation to goodwill. The Company will fund an additional $16.8 million to the escrow account by May 3, 2016. The $30.8 million remaining escrow balance is payable to Symbion on May 3, 2016 , pending the resolution of any adjustments and the settlement of any other indemnities. The acquisition of Symbion enhances the growth profile of the Company by expanding its network of surgical facilities in attractive markets throughout the United States. The Merger was financed through the issuance of $1.4 billion of Senior Secured Credit Facilities ("Facilities"), which includes an $870.0 million first lien term loan due November 3, 2020 , a $490.0 million second lien term loan due November 3, 2021 and an $80.0 million revolving credit facility. Fees associated with the Merger, which includes fees incurred related to the Company's debt financings, were approximately $93.3 million . Approximately $5.3 million was capitalized as deferred financing costs, $21.7 million related to legal and other transaction fees which were expensed as transaction costs, $42.9 million was recorded as a reduction of the carrying value of the Facilities and $23.4 million was recorded as debt extinguishment costs during the year ended December 31, 2014 . Acquired assets and assumed liabilities include, but are not limited to, fixed assets, intangible assets and professional liabilities. The valuations are based on appraisal reports, discounted cash flow analyses, actuarial analyses or other appropriate valuation techniques to determine the fair value of the assets acquired or liabilities assumed. A majority of the deferred income taxes recognized as a component of the Company's purchase price allocation is a result of the difference between the book and tax basis of the amortizable intangible assets recognized. The purchase price amount has been allocated to the related assets acquired and liabilities assumed based upon their respective fair values as follows: Cash consideration $ 298,857 Acquisition consideration payable 16,768 Fair value of non-controlling interests 395,663 Fair value of Symbion 711,288 Net assets acquired: Cash 40,374 Accounts receivable, net 79,830 Inventories 18,389 Prepaid expenses and other current assets 9,876 Property and equipment 153,179 Investments in and advances to affiliates 32,728 Intangible assets 31,534 Restricted invested assets 316 Other long-term assets 6,239 Accounts payable (20,419 ) Accrued payroll and benefits (14,600 ) Other current liabilities (47,229 ) Current maturities of long-term debt (83,805 ) Long-term debt, less current maturities (376,395 ) Long-term deferred tax liabilities (19,853 ) Other long-term liabilities (60,500 ) Net assets acquired (250,336 ) Excess of fair value over identifiable net assets acquired $ 961,624 The entire amount of goodwill acquired in connection with the Merger was allocated to the Company's surgical facility services operating segment. The total amount of the goodwill related to the acquisition of Symbion that will be deductible for tax purposes is $142.5 million . Fair value attributable to non-controlling interests was based on a Level 3 computation using significant inputs that are not observable in the market. Key inputs used to determine the fair value include financial multiples used in the purchase of non-controlling interests, primarily from acquisitions of surgical facilities. Such multiples, based on earnings, are used as a benchmark for the discount to be applied for the lack of control or marketability. Fair value attributable to the property and equipment acquired was based on Level 3 computations using key inputs such as cost trend data and comparable asset sales. Fair value attributable to the intangible assets acquired was based on Level 3 computations using key inputs such as the Company's internally-prepared financial projections. Fair values assigned to acquired working capital were based on carrying amounts reported by Symbion at the date of acquisition, which approximate their fair values. The unaudited consolidated pro forma results for year ended ended December 31, 2014 , assuming the Symbion acquisition had been consummated on January 1, 2013, are as follows (in thousands): Year Ended December 31, 2014 2013 Net revenues $ 873,683 $ 820,186 Net income 31,557 42,714 Less: net income attributable to non-controlling interests (68,973 ) (64,396 ) Net loss attributable to Surgery Partners, Inc. $ (37,416 ) $ (21,682 ) These pro forma amounts for the year ended December 31, 2014 , exclude expenses related to the Merger transaction of $21.7 million and the loss on debt extinguishment of $23.4 million . In addition, the year ended December 31, 2013 excludes $9.9 million of expense related to loss on debt extinguishment. Other 2014 Transactions Throughout 2014 , the Company acquired three physician practices for an aggregate purchase price of $1.6 million . These transactions were funded with cash from continuing operations. 2013 Transactions During 2013 , the Company acquired 100% ownership interests in both a specialty pharmacy and a physician practice. The aggregate purchase price of these transactions was approximately $417,000 . |
Divestitures
Divestitures | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestitures | Divestitures 2015 Transactions During the year ended December 31, 2015 , the Company sold its interest in three surgical facilities and received aggregate proceeds of $10.9 million resulting in a pre-tax gain of approximately $2.9 million in the consolidated statements of operations. 2013 Transactions During the year ended December 31, 2013 , the Company disposed of two surgical facilities and a physician practice and received aggregate proceeds of $1.0 million resulting in a pre-tax loss of approximately $2.6 million in the consolidated statements of operations. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment A summary of property and equipment follows (in thousands): December 31, 2015 2014 Land $ 6,790 $ 6,790 Buildings and improvements 104,971 100,574 Furniture and equipment 14,520 13,662 Computer and software 24,597 20,622 Medical equipment 96,291 86,132 Construction in progress 7,619 2,923 Property and equipment, at cost 254,788 230,703 Less: Accumulated depreciation (70,238 ) (55,697 ) Property and equipment, net $ 184,550 $ 175,006 The carrying values of assets under capital lease were $12.3 million and $13.3 million as of December 31, 2015 and 2014 , respectively, which included accumulated depreciation of $10.5 million and $6.8 million , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets A summary of activity related to goodwill for the year ended December 31, 2015 follows (in thousands): Balance at December 31, 2013 $ 339,521 Acquisitions 959,232 Divestitures — Purchase price adjustments — Balance at December 31, 2014 $ 1,298,753 Acquisitions 113,812 Divestitures (8,399 ) Purchase price adjustments 3,761 Balance at December 31, 2015 $ 1,407,927 Additions to goodwill include new business combination acquisitions and incremental ownership acquired in the Company's subsidiaries. A summary of the Company's acquisitions for the years ended December 31, 2015 and 2014 is included in Note 3, Acquisitions and Developments. The Company tests its goodwill and indefinite-lived intangible assets for impairment annually, as of October 1 , or more frequently if certain indicators arise. The Company reviews goodwill at the reporting unit level, which is defined as one level below an operating segment. The Company has determined that it has six reporting units, which include the following: 1) Surgical Facilities 2) Ancillary Services, 3) Midwest Labs, 4) The Alliance, including Optical Synergies, 5) Family Vision Care and 6) Patient Education Concepts, the Company's marketing products and services business. When reviewing goodwill, the Company compares the carrying value of the net assets of the reporting unit to the estimated fair value of the reporting unit. If the carrying value exceeds the net present value of the estimated discounted future cash flows, an impairment indicator exists and an estimate of the possible impairment loss is calculated. The fair value calculation includes multiple assumptions and estimates, including the projected cash flows and discount rates applied. The Company performed its annual goodwill impairment assessment by developing a fair value estimate of the business enterprise as of October 1, 2015 using a discounted cash flows approach. The results of the Company's fair value estimate were corroborated using a market-based approach. The result of the Company's annual goodwill impairment test at October 1, 2015 indicated no impairment. During the year ended December 31, 2013 , the Company recorded an impairment charge of $581,000 related to its Patient Education Concepts reporting unit, which was the entire goodwill balance of this reporting unit. The impairment charge is included in the consolidated statement of operations as of December 31, 2013 as a component of other (income) expense. There was no impairment charges recorded during the years ended December 31, 2015 and 2014 . A summary of the activity related to intangible assets as of December 31, 2015 follows (in thousands): Physician Income Guarantees Management Rights Non-Compete Agreements Certificates of Need Customer Relationships Other Total Intangible Assets Balance at December 31, 2013 $ — $ 377 $ 16,123 $ — $ 7,665 $ 2,811 $ 26,976 Additions 1,081 24,700 3,500 3,711 — 242 33,234 Recruitment expense (108 ) — — — — — (108 ) Amortization — (320 ) (3,033 ) — (1,391 ) (470 ) (5,214 ) Balance at December 31, 2014 $ 973 $ 24,757 $ 16,590 $ 3,711 $ 6,274 $ 2,583 $ 54,888 Additions 1,052 — 7,532 — — — 8,584 Recruitment expense (813 ) — — — — — (813 ) Amortization — (1,731 ) (5,551 ) — (1,338 ) (471 ) (9,091 ) Balance at December 31, 2015 $ 1,212 $ 23,026 $ 18,571 $ 3,711 $ 4,936 $ 2,112 $ 53,568 During the years ended December 31, 2015 , 2014 and 2013 , the Company had amortization expense of $9.1 million , $5.2 million and $4.9 million , respectively. A summary of the scheduled amortization related to the Company's finite-lived intangible assets as of December 31, 2015 follows (in thousands): Amortization of Finite-Lived Intangible Assets 2016 $ 9,707 2017 8,220 2018 6,316 2019 5,764 2020 2,616 Thereafter 16,992 Total $ 49,615 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt A summary of long-term debt follows (in thousands): December 31, 2015 2014 2014 Revolver Loan $ 125,250 $ — 2014 First Lien Credit Agreement, dated November 3, 2014, maturing November 3, 2020, net of debt issuance and discount of $20,223 and $23,818 at December 31, 2015 and 2014, respectively 841,078 846,183 2014 Second Lien Credit Agreement, dated November 3, 2014, maturing November 3, 2021, net of debt issuance and discount of $8,159 and $18,184 at December 31, 2015 and 2014, respectively 238,341 471,816 Subordinated Notes 1,000 1,000 Notes payable and secured loans 40,615 31,600 Capital lease obligations 11,316 10,755 Total debt 1,257,600 1,361,354 Less: Current maturities 27,272 22,088 Total long-term debt $ 1,230,328 $ 1,339,266 The acquisition of Symbion on November 3, 2014 and payoff of the senior debt was financed through new $1.440 billion Senior Secured Credit Facilities (the "Facilities") consisting of the following: • $80.0 million revolving credit facility ( "2014 Revolver Loan") • $870.0 million 1st lien term loan facility ("2014 First Lien Credit Agreement") • $490.0 million 2nd lien term loan facility ("2014 Second Lien Credit Agreement") On November 3, 2014 , in connection with the consummation of the Symbion acquisition, the Company assumed and paid down approximately $440.0 million of outstanding indebtedness of Symbion, including accrued interest. Simultaneously, the Company paid off all of the debt outstanding under its then-existing credit agreements ("Credit Facilities") and revolver loan. 2014 Revolver Loan The 2014 Revolver Loan (“Revolver”) will be used for working capital, acquisitions and development activities and general corporate purposes in an aggregate principal amount at any time outstanding not to exceed $80.0 million and matures on November 3, 2019 . On October 7, 2015 , the Company entered into an amendment to the 2014 First Lien Credit Agreement to increase certain lenders’ commitments under the Revolver from $80.0 million to an aggregate of $150.0 million . The Company has the option of classifying borrowings under the Revolver as either Alternate Base Rate ("ABR") loans or Eurodollar ("ED") loans. The interest base rate on an ABR loan is equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.50% and (c) the adjusted LIBO Rate for a Eurodollar Borrowing with a one-month interest period plus 1.00% . In addition to the base rate, the Company is required to pay a 3.25% margin for ABR loans. The interest base rate on an ED loan is equal to (x) the LIBO Rate for such Eurodollar borrowing in effect for such Interest Period divided by (y) One minus the Statutory Reserves (if any) for such Eurodollar Borrowing for such interest period. In addition to the base rate, the Company is required to pay a 4.25% margin for ED loans. The Company paid $2.3 million in connection with obtaining the Revolver and recorded this amount as debt issuance costs, which is presented, net of accumulated amortization of approximately $530,000 and $76,000 , in the accompanying consolidated balance sheets as of December 31, 2015 and 2014 , respectively. The Company must also pay quarterly commitment fees of 0.50% per annum of the average daily unused amount of the Revolver. As of December 31, 2015 , the Company's availability on the Revolver was $21.6 million . The credit agreement that governs the Revolver contains various covenants that include limitations on the Company's indebtedness, liens, acquisitions and investments. It additionally includes the requirement that the Company maintain a net leverage ratio within a specified range. At December 31, 2015 , the Company was in compliance with the covenants contained in the credit agreement. 2014 First Lien Credit Agreement The 2014 First Lien Credit Agreement (“2014 First Lien”) is a senior secured obligation of Surgery Center Holdings, Inc. and is guaranteed on a senior secured basis by the Company and certain of its subsidiaries. The 2014 First Lien matures on November 3, 2020 . The Company has the option of classifying the 2014 First Lien as either an ABR loan or an ED loan. The interest base rate on an ABR loan is equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.50% , and (c) the Adjusted LIBO Rate for a Eurodollar Borrowing with a one-month interest period plus 1.00% ; provided that the base rate shall not be less than 2.00% per annum. In addition to the base rate, the Company is required to pay a 3.25% margin for ABR loans. The interest base rate on an ED loan is equal to (x) the LIBO Rate for such Eurodollar borrowing in effect for such Interest Period divided by (y) One minus the Statutory Reserves (if any) for such Eurodollar Borrowing for such interest period; provided that the rate shall not be less than 1.00% per annum. In addition to the base rate, the Company is required to pay a 4.25% margin for ED loans. In 2015 , the Company classified the 2014 First Lien as an ED loan with an interest rate of 5.25% ( 1.00% base rate plus a 4.25% margin). Accrued interest is payable in arrears on a quarterly basis. Within five business days after the earlier of (i) 90 days after the end of each fiscal year or (ii) the date on which financial statements have been delivered, the Company is required to make mandatory prepayments in amounts calculated in accordance with the excess cash flow provisions of the 2014 First Lien Credit Agreement. There were no excess cash flow payments required as of December 31, 2015 . In 2014 , the Company recorded $4.4 million and $20.0 million as a reduction of the carrying value of the 2014 First Lien as original issue discount and amounts paid to lender for debt related issuance costs, respectively, which are accreted to interest expense over the term of the loan. During the year ended December 31, 2015 , approximately $3.6 million was accreted to interest expense. The Company also paid $1.9 million in connection with obtaining the 2014 First Lien and recorded this amount as debt issuance costs, which is presented as an asset, net of accumulated amortization of approximately $306,000 and $41,000 , in the accompanying consolidated balance sheets as of December 31, 2015 and 2014 , respectively. The credit agreement that governs the 2014 First Lien contains various covenants that include limitations on the Company's indebtedness, liens, acquisitions and investments. It additionally includes the requirement that the Company maintain a net leverage ratio within a specified range. At December 31, 2015 , the Company was in compliance with the covenants contained in the credit agreement. The 2014 First Lien is collateralized by substantially all of the assets of the Company. 2014 Second Lien Credit Agreement The 2014 Second Lien Credit Agreement (“2014 Second Lien”) is a senior secured obligation of Surgery Center Holdings, Inc. and is guaranteed on a senior secured basis by the Company and certain of its subsidiaries. The 2014 Second Lien matures on November 3, 2021 . The Company has the option of classifying the 2014 Second Lien as either an ABR loan or an ED loan. The interest base rate on an ABR loan is equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.50% and (c) the Adjusted LIBO Rate for a Eurodollar Borrowing with a one-month interest period plus 1.00% ; provided that the base rate shall not be less than 2.00% per annum. In addition to the base rate, the Company is required to pay a 6.50% margin for ABR loans. The interest base rate on an ED loan is equal to (x) the LIBO Rate for such Eurodollar Borrowing in effect for such interest period divided by (y) One minus the Statutory Reserves (if any) for such Eurodollar Borrowing for such interest period; provided that the base rate shall not be less than 1.00% per annum. In addition to the base rate, the Company is required to pay a 7.50% margin for ED loans. During 2015 , the Company classified the 2014 Second Lien as an ED loan with an interest rate of 8.50% ( 1.00% base rate plus a 7.50% margin). Accrued interest is payable in arrears on a quarterly basis. The Company is required to pay the remaining principal balance upon maturity of the 2014 Second Lien on November 3, 2021 . The Company has the right at any time to prepay any borrowings, in whole or in part, provided that each partial prepayment shall be in an amount that is an integral multiple of $0.5 million and not less than $1.0 million . Within five business days after the earlier of (i) 90 days after the end of each fiscal year or (ii) the date on which financial statements have been delivered, the Company is required to make mandatory prepayments in amounts calculated in accordance with the excess cash flow provisions of the 2014 Second Lien. There were no excess cash flow payments required as of December 31, 2015 . The Company recorded $4.9 million and $13.6 million as a reduction of the carrying value of the 2014 Second Lien as original issue discount and amounts paid to lender for debt related issuance costs, respectively, which are accreted to interest expense over the term of the loan. During the year ended December 31, 2015 , approximately $1.7 million was accreted to interest expense. The Company also paid $1.1 million in connection with obtaining the 2014 Second Lien and recorded this amount as debt issuance costs, which is presented as an asset, net of accumulated amortization of approximately $57,000 and $14,000 , in the accompanying consolidated balance sheets as of December 31, 2015 and 2014 , respectively. On October 6, 2015, the Company prepaid $243.5 million in principal, net of the write-off of discounts and issuance costs totaling $8.3 million , and $65,000 of accrued interest on the 2014 Second Lien. Further, the Company incurred a prepayment penalty of 3% of the aggregate principal amount or $7.3 million . The write-off of the discounts, issuance costs and the prepayment penalty as well as certain other costs are presented as a loss on debt extinguishment of $16.1 million in the accompanying consolidated statement of operations as of December 31, 2015 . The credit agreement that governs the 2014 Second Lien contains various covenants that include limitations on the Company's indebtedness, liens, acquisitions and investments. It additionally includes the requirement that the Company maintain a maximum net leverage ratio. At December 31, 2015 , the Company was in compliance with the covenants contained in the credit agreement. The 2014 Second Lien is collateralized by substantially all of the assets of the Company. Other Debt Transactions On April 11, 2013, the Company raised $465 million in Senior Secured Credit Facilities (“Credit Facilities”) to refinance a portion of its then existing debt and to return capital to its shareholders (“2013 Debt Refinancing”). These Credit Facilities were used to pay off the $233.7 million outstanding balance of the original $240.0 million term loan (“Term A Loan”), plus accrued interest and fees, and $52.8 million of the outstanding balance of the subordinated debt facility (“Subordinated Notes A”), plus accrued interest and fees. On the date of closing, the Company had no outstanding balance on the original $30.0 million Revolving Loan (“Revolving Loan”). As a result of these transactions, the Term A Loan and Revolving Loan were terminated. The Subordinated Notes A were amended with the outstanding principal balance reduced to $1.0 million . On January 27, 2014 , the Company obtained $90.0 million in additional borrowings on the Credit Facilities to return capital to shareholders. The Company recorded $1.4 million and $2.9 million as a reduction of the carrying value of the additional borrowings as original issue discount and amounts paid to lender for debt related issuance costs, respectively, which are accreted to interest expense over the term of the loan. During the year ended December 31, 2014 , approximately $380,000 was accreted to interest expense. The $90.0 million in additional borrowings, including the related debt issuance costs, were included in the extinguishment of debt that was financed with the proceeds of the Facilities obtained in connection with the acquisition of Symbion on November 3, 2014 . Subordinated Notes Effective April 11, 2013 , the Company amended and reduced the size of its subordinated debt facility ("Subordinated Notes") to $1.0 million from $53.8 million . The prepayment premium of $1.6 million that the Company paid in connection with decreasing the size of the subordinated debt facility and the unamortized balance of debt issuance costs related to Subordinated Notes A of $1.1 million were recorded as loss on the extinguishment of debt in the accompanying consolidated statements of operations for the year ended December 31, 2013. Through a separate transaction in April 2013, H.I.G. Surgery Centers, LLC, an affiliate of the Company, purchased the Subordinated Notes from an independent third party. At December 31, 2015 and 2014 , the debt is payable to H.I.G. Surgery Centers, LLC. and mature on August 4, 2017 . The outstanding balance of the Subordinated Notes A bore interest of 15.00% per annum through December 31, 2013, of which 12.00% per annum was payable quarterly in cash. The Company had the option to elect that the remaining 3.00% per annum be added to the unpaid principal amount as payment-in-kind ("PIK") or to pay the additional interest in cash. Beginning October 1, 2012, the Company elected to begin paying the additional 3.00% interest in cash on a quarterly basis. Effective January 1, 2014 , the Subordinated Notes bear interest of 17.00% per annum. Term Loan A During 2011, the Company entered into a $240.0 million Term Loan A related to the acquisition of NovaMed. The Term Loan A was effective May 4, 2011, and was terminated on April 11, 2013 in connection with the 2013 Debt Transactions discussed above. The Company was required to pay quarterly principal payments of $600,000 on the last business day of each March, June, September and December during which the Term Loan A was outstanding. The Company had the option of classifying the Term Loan A as either an ABR loan or an ED loan. During 2013 (until termination of the Term Loan A), the Company classified the Term Loan A as an ED loan with an interest rate of 6.50% . The Company recorded $1.2 million as a reduction of the carrying value of the Term Loan A as original issue discount which was accreted to interest expense over the term of the loan. During 2013, approximately $58,000 was accreted to interest expense. The Company also paid $8.7 million in connection with obtaining the Term Loan A and amortized approximately $417,000 of these costs during the year ended December 31, 2013. 2011 Revolving Loan In 2011, the Company secured a 5 -year, $20.0 million Revolving Loan (“2011 Revolving Loan”) to be used for working capital and general corporate purposes. The 2011 Revolving Loan was terminated on April 11, 2013 in connection with the 2013 Debt Refinancing. The Company recorded $100,000 as a reduction of the carrying value of the 2011 Revolving Loan as original issue discount, which was accreted to interest expense over the term of the loan. The Company also paid $681,000 in connection with obtaining the Revolving Loan and amortized $37,800 of these costs during the years ended December 31, 2013, respectively. The Company also paid quarterly commitment fees of 0.50% per annum on the average daily unused amount of the 2011 Revolving Loan. Notes Payable and Secured Loans Certain of the Company’s subsidiaries have outstanding bank indebtedness, which is collateralized by the real estate and equipment owned by the surgical facilities to which the loans were made. The various bank indebtedness agreements contain covenants to maintain certain financial ratios and also restrict encumbrance of assets, creation of indebtedness, investing activities and payment of distributions. At December 31, 2015 , the Company was in compliance with its covenants contained in the credit agreement. The Company and its subsidiaries had notes payable to financial institutions of $40.6 million and $31.6 million as of December 31, 2015 and 2014 , respectively. Letters of Credit As of December 31, 2014 , the Company had two outstanding letters of credit at its optical purchasing group of $200,000 and $730,000 . In May 2015 , the Company increased one of these letters of credit from $200,000 to $500,000 . The Company had two outstanding letters of credit issued to the landlords for two of its surgical facilities in Orlando, Florida in the amount of $100,000 and in Lubbock, Texas for $1.0 million . In addition, the Company had one outstanding letter of credit related to the Symbion, Inc. workers compensation self-insured plan for $835,000 . Capital Lease Obligations The Company is liable to various vendors for several equipment leases classified as capital leases. The carrying value of the leased assets was $12.3 million and $13.3 million as of December 31, 2015 and 2014 , respectively. Maturities A summary of the scheduled maturities of our debt obligations as of December 31, 2015 follows (in thousands): Capital Lease Obligations Other Long-Term Debt Total 2016 $ 4,170 $ 23,102 $ 27,272 2017 3,162 27,920 31,082 2018 2,246 12,433 14,679 2019 1,340 136,080 137,420 2020 351 827,146 827,497 Thereafter 47 247,985 248,032 Total debt $ 11,316 $ 1,274,666 $ 1,285,982 |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Leases of Lessor Disclosure | Operating Leases The Company leases office space and equipment for its surgical facilities, including surgical facilities under development. The lease agreements generally require the lessee, or the Company, to pay all maintenance, property taxes, utilities and insurance costs. The Company accounts for operating lease obligations and sublease income on a straight-line basis. Contingent obligations of the Company, as defined by each lease agreement, are recognized when specific contractual measures have been met, typically the result of an increase in the Consumer Price Index. Lease obligations paid in advance are recorded as prepaid rent and included in prepaid expenses and other current assets on the consolidated balance sheets. The difference between actual lease payments and straight-line lease expense over the initial lease term, excluding optional renewal periods, is recorded as deferred rent and included in other current liabilities and other long-term liabilities on the consolidated balance sheets. As part of the Merger, the Company ceased use of four of their operating leases and accrued a liability of $4.6 million , net of discounting and sublease income, during the three months ended June 30, 2015 . The Company expensed this through merger transaction and integration costs, as the leases related to offices shut down in connection with the Merger. The future minimum lease payments under non-cancellable operating leases, net of sub-lease income, follows (in thousands): 2016 $ 36,443 2017 33,019 2018 29,721 2019 25,677 2020 21,401 Thereafter 110,131 Total minimum operating lease payments $ 256,392 Total operating lease expense was $40.1 million , $18.8 million and $13.5 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Included in these amounts, the Company incurred lease expense of $12.9 million , $6.9 million and $5.8 million for years ended December 31, 2015 , 2014 and 2013 , respectively, under operating lease agreements with physician investors who are related parties. The Company has various sub-lease arrangements and the future minimum lease payments to be received under these non-cancellable arrangements are as follows (in thousands): 2016 $ 1,043 2017 1,101 2018 1,137 2019 658 2020 468 Thereafter 2,231 Total non-cancellable sub-lease income $ 6,638 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following is a reconciliation of the numerator and denominator of basic and diluted earnings per share for the years ended December 31, 2015 , 2014 and 2013 (in thousands except share and per share amounts): Year Ended December 31, 2015 2014 2013 Numerator: Net income (loss) attributable to Surgery Partners, Inc. $ 1,429 $ (65,897 ) $ (9,062 ) Denominator: Weighted average shares outstanding- basic (1) 36,066,233 32,295,364 31,815,520 Effect of dilutive securities (2) 1,398,154 — — Weighted average shares outstanding- diluted 37,464,387 32,295,364 31,815,520 Earnings (loss) per share: Basic earnings (loss) per share $ 0.04 $ (2.04 ) $ (0.28 ) Diluted earnings (loss) per share (2) $ 0.04 $ (2.04 ) $ (0.28 ) (1) Effect of the Reorganization has been retrospectively applied to all periods presented. (2) The impact of potentially dilutive securities for the years ended December 31, 2014 and 2013 was not considered because the effect would be anti-dilutive in each of those periods. |
Income Taxes and Tax Receivable
Income Taxes and Tax Receivable Agreement | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes and Tax Receivable Agreement | Income Taxes and Tax Receivable Agreement As part of the Reorganization that was effective September 30, 2015, the Company entered into a Tax Receivable Agreement (“TRA”) under which generally the Company will be required to pay to its stockholders as of immediately prior to the IPO 85% of the cash savings, if any, in U.S. federal, state or local tax that the Company actually realizes (or is deemed to realize in certain circumstances) as a result of (i) certain tax attributes, including NOLs, capital losses, charitable deductions, alternative minimum tax credit carryforwards and federal and state tax credits of Surgery Partners, Inc. and its affiliates relating to taxable years ending on or before the date of the Reorganization (calculated by assuming the taxable year of the relevant entity closes on the date of the Reorganization) that are or become available to the Company and its wholly-owned subsidiaries as a result of the Reorganization, and (ii) tax benefits attributable to payments made under the TRA, together with interest accrued at a rate of LIBOR plus 300 basis points from the date the applicable tax return is due (without extension) until paid. The Company expects the payments it will be required to make under the TRA will be substantial. The amounts payable under the TRA will vary depending upon a number of factors, including the amount, character and timing of the taxable income of Surgery Partners, Inc. in the future. The Company estimates the total amounts payable to be approximately $119.7 million , if the tax benefits of related deferred tax assets are ultimately realized. The amounts payable were recognized during the quarter ended December 31, 2015 in conjunction with the release of the Company's valuation allowance recorded against the deferred tax assets. The Company and its subsidiaries file a consolidated federal income tax return. The partnerships, limited liability companies, and certain non-consolidated physician practice corporations file separate income tax returns. The Company's allocable portion of each partnership's and limited liability company's income or loss is included in taxable income of the Company. The remaining income or loss of each partnership and limited liability company is allocated to the other owners. The Company made income tax payments of $1.1 million and $676,000 for the periods ended December 31, 2015 and 2014, respectively. Income tax (benefit) expense is comprised of the following (in thousands): Year Ended December 31, 2015 2014 2013 Current: Federal $ — $ — $ — State 909 1,669 469 Deferred: Federal (132,311 ) 13,235 6,353 State (17,580 ) 854 748 Total income tax (benefit) expense $ (148,982 ) $ 15,758 $ 7,570 A reconciliation of the provision for income taxes as reported in the consolidated statements of operations and the amount of income tax (benefit) expense computed by multiplying consolidated income (loss) in each year by the U.S. federal statutory rate of 35% follows (in thousands): Year Ended December 31, 2015 2014 2013 Tax (benefit) expense at U.S.federal statutory rate $ (26,648 ) $ (3,840 ) $ 8,601 State income tax, net of U.S. federal tax benefit 1,059 1,402 408 Change in valuation allowance (137,721 ) 29,336 4,067 Expiration of carryforwards and stock option forfeitures — 1,286 2,524 Net income attributable to non-controlling interests (24,996 ) (13,207 ) (9,108 ) Changes in measurement of uncertain tax positions (10 ) 589 — Nondeductible transaction costs 3,442 4,230 — Tax return reconciling differences (1,574 ) (4,419 ) 836 Change in effective tax rate (2,143 ) TRA liability 39,428 Other 181 381 242 Total income tax (benefit) expense $ (148,982 ) $ 15,758 $ 7,570 The components of temporary differences and the approximate tax effects that give rise to the Company’s net deferred tax asset are as follows (in thousands): December 31, 2015 2014 Deferred tax assets: Medical malpractice liability $ 869 $ 526 Accrued vacation and incentive compensation 2,212 2,079 Net operating loss carryforwards 146,663 123,709 Allowance for bad debts 1,846 980 Basis differences of partnerships and joint ventures — 16,131 SERP liability 685 527 Capital loss carryforwards 2,052 3,513 Stock option compensation 367 362 Deferred rent 2,288 — Deferred financing costs 3,083 4,386 Audit and tax fee accruals 242 760 FIN 48 liabilities 244 440 TRA liability 2,750 — Other deferred assets 1,748 1,597 Total gross deferred tax assets 165,049 155,010 Less: Valuation allowance (6,949 ) (142,909 ) Total deferred tax assets 158,100 12,101 Deferred tax liabilities: Depreciation on property and equipment (806 ) (1,050 ) Amortization of intangible assets (16,083 ) (16,159 ) Basis differences of partnerships and joint ventures (46,494 ) (43,195 ) Deferred rent — (515 ) Other deferred liabilities (612 ) (466 ) Total deferred tax liabilities (63,995 ) (61,385 ) Net deferred tax assets (liabilities) $ 94,105 $ (49,284 ) As of December 31, 2015 and 2014 , the Company had net current deferred tax assets (liabilities) of zero and $(114,000) , respectively, and net long-term deferred tax assets (liabilities) of $94.1 million and $(49.2) million , respectively. The Company had federal net operating loss carryforwards of $360.3 million as of December 31, 2015 , which expire between 2025 and 2035 and state net operating loss carryforwards of $495.9 million as of December 31, 2015 , which expire between 2016 and 2035 . The Company had capital loss carryforwards of $5.5 million as of December 31, 2015 , which expire between 2016 and 2019 . The Company had federal and state credit carryforwards of $632,000 as of December 31, 2015 . The federal credits do not expire, and the state credits expire between 2017 and 2028 . As a result of the successful IPO, reduction in interest expense, and continued growth and successful integration and synergies achieved from the Symbion acquisition, the Company released substantially all of the valuation allowance that was recorded against its deferred tax assets. Based on the Company's analysis of these and other items, it was determined that it is more likely than not that substantially all of the deferred tax assets will be realized. Therefore, the Company reduced its valuation allowance by approximately $136.0 million . The Company has recorded a valuation allowance against its deferred tax assets at December 31, 2015 and 2014 totaling $6.9 million and $142.9 million , respectively. The valuation allowance continues to be provided for certain deferred tax assets for which the Company believes it is more likely than not that the tax benefits will not be realized, which are primarily certain state net operating losses and capital loss carryforwards. Included in the decrease in the valuation allowance for the year ended December 31, 2015 was an increase of approximately $1.5 million that was recorded to additional-paid-in-capital as the result of the tax effect of the disposals of shares of noncontrolling interests. Finally, approximately $2.1 million of the valuation allowance as of December 31, 2015 is recorded against deferred tax assets that, if subsequently recognized, will be credited directly to contributed capital. A reconciliation of the beginning and ending liability for gross unrecognized tax benefits for the years ended December 31, 2015 and 2014 is as follows (in thousands): Year Ended December 31, 2015 2014 Unrecognized tax benefits at beginning of year $ 2,755 $ — Additions for tax positions acquired from Symbion — 1,766 Additions based on tax provisions related to the current year — 66 Additions for tax positions of prior years 136 923 Reductions for tax positions of prior year (996 ) Settlements (492 ) Unrecognized tax benefits at end of year $ 1,403 $ 2,755 The Company recognizes interest and penalties related to uncertain tax positions in its provision for income taxes in the consolidated statements of operations. For the years ended December 31, 2015 and 2014 , the Company had approximately $ 322,000 and $ 357,000 , respectively, of accrued interest and penalties related to uncertain tax positions. The total amount of accrued liabilities related to uncertain tax positions that would affect the Company's effective tax rate, if recognized, is $548,000 as of December 31, 2015 . The reserves are included in long-term taxes payable and long-term deferred tax assets in the consolidated balance sheet as of December 31, 2015 . In February 2015 , the Company settled the IRS audit of the Company's federal income tax returns for the years ended December 31, 2010 and 2011 . In March 2015 , the Company settled the IRS audit of the Company's federal income tax returns for the year ended December 31, 2012 . The Company's U.S. federal income tax returns for tax years 2012 and beyond remain subject to examination. The Company's state income tax returns for tax years 2011 and beyond remain subject to examination. |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation Prior to the Reorganization, the Surgery Center Holdings, LLC’s ("Holdings LLC") Amended and Restated Limited Liability Company Agreement, dated December 24, 2009, provided, from time to time, as approved by the Holdings LLC's Board, for the issuance of a subordinate class of the Holdings LLC's nonvoting membership units to certain key persons, as defined, of the Company or its subsidiaries. In April 2013, the Company modified the terms of the 2010 awards to allow for additional vesting in 2013 of its share-based awards with time-vesting conditions. In November 2014, the Holdings LLC issued to certain executives of Symbion, Inc. who became employees of the Company following the Company’s acquisition of Symbion an additional 1,300,000 unvested B-Units, which are subject to vesting conditions to occur through November 2019. Prior to the Reorganization, in the event of employee termination, the B-Units were subject to a 90-day repurchase option. Upon termination, all unvested B-Units were effectively forfeited. If the employee was terminated for cause, as defined, or resigned prior to the expiration of certain tenure periods specified in such employee’s agreement, the repurchase price for each vested B-Unit was zero, and was deemed automatically repurchased by the Company. The repurchase price for vested B-Units, should the Company elect to exercise the repurchase option, was at fair market value, as defined. If the Company did not exercise the repurchase option, the employee owned the vested B-Units pursuant to the Holdings LLC's LLC Agreement, which included restrictions on transfer, among other provisions. The fair value of each Holdings LLC issued B-Unit was estimated on the date of grant. In September 2015, the Company adopted the Surgery Partners, Inc. 2015 Omnibus Incentive Plan ("2015 Omnibus Incentive Plan") from which all equity-based awards will be granted. Under this plan, the Company can grant stock options, SARs, restricted stock, unrestricted stock, stock units, performance awards, cash awards and other awards convertible into or otherwise based on shares of its common stock. As of December 31, 2015 , 4,815,700 shares were authorized to be granted under the 2015 Omnibus Incentive Plan and 4,807,212 were available for future equity grants. Equity Valuation In applying the Black-Scholes-Merton option pricing model, the Company used the following assumptions: ▪ Risk-free interest rate . The risk-free interest rate is used as a component of the fair value of stock options to take into account the time value of money. For the risk-free interest rate, the Company uses the implied yield on United States Treasury zero-coupon issues with a remaining term equal to the expected life, in years, of the options granted. ▪ Expected volatility . Volatility, for the purpose of share-based compensation, is a measurement of the amount that a share price has fluctuated. Expected volatility involves reviewing historical volatility and determining what, if any, change the share price will have in the future. The Company used historical stock price information of certain peer group companies for a period of time equal to the expected option life period to determine estimated volatility. ▪ Expected life, in years . A clear distinction is made between the expected life of an option and the contractual term of the option. The expected life of an option is considered the amount of time, in years, that an option is expected to be outstanding before it is exercised. Whereas, the contractual term of the stock option is the term an option is valid before it expires. ▪ Expected dividend yield . Since issuing dividends will affect the fair value of a stock option, GAAP requires companies to estimate future dividend yields or payments. The Company has not historically issued dividends and does not intend to issue dividends in the future. As a result, the Company does not apply a dividend yield component to its valuation. The following table sets forth the assumptions used by the Company to estimate the fair value of options granted under the 2015 Omnibus Incentive Plan: Expected volatility 29% - 38% Risk-free interest rate 0.90% - 1.36% Expected dividends — Average expected term (years) 3.00 Fair value of stock options granted $ 4.83 The estimated fair value of options is amortized to expense on a straight-line basis over the options’ vesting period. Stock Option Activity A summary of stock option activity during the year ended December 31, 2015 is as follows: Units Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Outstanding at December 31, 2014 — Granted 8,488 $ 20.03 3.0 Exercised — Forfeited — Outstanding at December 31, 2015 (1) 8,488 $ 20.03 3.0 (1) Of the outstanding options, none were exercisable as of December 31, 2015 . Restricted Share Activity All units and per unit amounts in these consolidated financial statements and notes to the consolidated financial statements reflect the Reorganization that occurred in September 2015 (see Note 1). A summary of Holdings LLC issued restricted stock activity for the years ended December 31, 2015 , 2014 , and 2013 follows: Total Shares Vested Shares Unvested Shares Weighted-Average Grant Fair Value Outstanding at January 1, 2013 3,234,664 1,245,510 1,989,154 $0.81 Granted — — — — Forfeited/Terminated — — — — Purchased — — — — Vested — 543,270 (543,270 ) 0.83 Outstanding at December 31, 2013 3,234,664 1,788,780 1,445,884 $0.81 Granted 583,404 — 583,404 6.44 Forfeited/Terminated (127,582 ) — (127,582 ) 1.27 Purchased (803,336 ) (803,336 ) — 3.64 Vested — 659,641 (659,641 ) 1.43 Outstanding at December 31, 2014 2,887,150 1,645,085 1,242,065 $1.96 Granted 569,114 — 569,114 6.31 Forfeited/Terminated — — — — Purchased (11,742 ) (11,742 ) — 6.31 Vested — 1,643,525 (1,643,525 ) 3.79 Outstanding at December 31, 2015 3,444,522 3,276,868 167,654 $2.53 At December 31, 2015 , unrecognized compensation cost related to unvested shares was approximately $ 1.1 million . Unrecognized compensation cost will be expensed annually based on the number of shares that vest during the year. In 2015 , 2014 , and 2013 , the Company terminated zero , 128,000 and zero unvested shares, respectively, related to the termination of employment of executives. The Company recorded compensation expense of $7.5 million , $942,000 , and $455,000 to recognize the fair value of the restricted shares that vested and stock options granted through December 31, 2015 , 2014 , and 2013 , respectively. In connection with the IPO, 1,632,626 restricted shares immediately vested which resulted in accelerated vesting of $6.2 million which is included within the $7.5 million of equity-based compensation expense for the year ended December 31, 2015 . |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Surgery Partners 401(k) Plan The Surgery Partners 401(k) Plan is a defined contribution plan whereby certain employees who have completed at least one month of service, including at least one hour of service during that period of time, are eligible to participate. Employees may enroll in the plan immediately upon completion of the minimum service requirement. The Surgery Partners 401(k) Plan allows eligible employees to make contributions of varying percentages or flat dollar amounts of their annual compensation, up to the maximum allowable amounts by the Internal Revenue Service ("IRS"). Eligible employees may or may not receive a match by the Company of their contributions. Employee salary deferrals exceeding six percent of annual compensation are ineligible for a Company matching contribution. Employer contributions vest 20% after one year of service and continue vesting at 20% per year until fully vested. Symbion, Inc. 401(k) Plan In connection with the Symbion acquisition, the Company acquired and continues to maintain the Symbion, Inc. 401(k) Plan on behalf of certain former employees of Symbion. The Symbion, Inc. 401(k) Plan is a defined contribution plan whereby employees who have completed six months of service and are age 21 or older are eligible to participate. Employees may enroll in the plan on either January 1 or July 1 of each year. The 401(k) Plan allows eligible employees to make contributions of varying percentages of their annual compensation, up to the maximum allowable amounts by the IRS. Eligible employees may or may not receive a match by the Company of their contributions. The Company match varies depending on location and is determined prior to the start of each plan year. Generally, employer contributions vest 20% after two years of service and continue vesting at 20% per year until fully vested. The Company's matching contribution expense for both the Surgery Partners 401(k) Plan and the Symbion, Inc. 401(k) Plan for the years ended December 31, 2015 , 2014 and 2013 was $2.2 million , $754,000 and $516,000 , respectively. Supplemental Executive Retirement Savings Plan In connection with the Symbion acquisition, the Company acquired and continues to maintain a supplemental executive retirement savings plan (the "SERP") for certain former Symbion executives. The SERP provides supplemental retirement savings alternatives to eligible officers and key employees of the Company by allowing participants to defer portions of their compensation. Under the SERP, eligible employees may enroll in the plan before December 31 to be entered in the plan the following year. Eligible employees may defer into the SERP up to 25% of their normal period payroll and up to 50% of their annual bonus. If the enrolled employee contributes a minimum of 2% of his or her base salary into the SERP, the Company will contribute 2% of the enrolled employee’s base salary to the plan and has the option of contributing additional amounts. Periodically, the enrolled employee’s deferred amounts are transferred to a plan administrator. The plan administrator maintains separate non-qualified accounts for each enrolled employee to track deferred amounts. On May 1 of each year, the Company is required to make its contribution to each enrolled employee’s account. See Note 2 on Significant Accounting Policies for information about the fair value of the assets and liabilities in the SERP. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions On December 24, 2009 , the Company and Bayside Capital, Inc. (or "Bayside"), an affiliate of H.I.G. Capital, LLC (or "H.I.G."), entered into a Management and Investment Advisory Services Agreement ("Management Agreement") pursuant to which the Company will receive certain management, consulting and financial advisory services. Effective May 4, 2011, the Management Agreement was amended pursuant to the NovaMed merger and the management fee was increased to $2.0 million annually. The Company recognized $2.0 million for the year ended December 31, 2013 related to the Management Agreement. Effective November 3, 2014 , the Management Agreement was amended pursuant to the Symbion acquisition and the management fee was increased to $3.0 million annually. Fees related to the Management Agreement for the years ended December 31, 2015 , 2014 and 2013 are recognized as general and administrative expense in the accompanying consolidated statements of operations. Additionally, the Company incurred additional advisory fees related to refinancing transactions of $17.6 million and $2.7 million for the years ended December 31, 2014 and 2013 respectively. During the year ended December 31, 2015 , Bayside was paid a transaction fee pursuant to the Management Agreement of $5.4 million as a result of the IPO and the Management Agreement was terminated upon the completion of the IPO. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease and Debt Guarantees of Non-Consolidated Facilities As of December 31, 2015 and 2014 , the Company had guaranteed approximately $160,000 and $539,000 , respectively, of operating lease payments for certain non-consolidated surgical facilities that were acquired in connection with the Symbion transaction. These operating leases typically have ten -year terms, with optional renewal periods. Professional, General and Workers' Compensation Liability Risks The Company is subject to claims and legal actions in the ordinary course of business, including claims relating to patient treatment, employment practices and personal injuries. To cover these claims, the Company maintains general liability and professional liability insurance in excess of self-insured retentions through third party commercial insurance carriers in amounts that management believes is sufficient for the Company's operations, although, potentially, some claims may exceed the scope of coverage in effect. The professional and general insurance coverage is on a claims-made basis. Workers' compensation insurance is on an occurrence basis. Plaintiffs in these matters may request punitive or other damages that may not be covered by insurance. The Company is not aware of any such proceedings that would have a material adverse effect on the Company's business, financial condition or results of operations. Laws and Regulations Laws and regulations governing the Company's business, including those relating to the Medicare and Medicaid programs, are complex and subject to interpretation. These laws and regulations govern every aspect of how the Company's surgical facilities conduct their operations, from licensing requirements to how and whether the Company's facilities may receive payments pursuant to the Medicare and Medicaid programs. Compliance with such laws and regulations can be subject to future government agency review and interpretation as well as legislative changes to such laws. Noncompliance with such laws and regulations may subject the Company to significant regulatory action including fines, penalties, and exclusion from the Medicare, Medicaid and other federal healthcare programs. From time to time, governmental regulatory agencies will conduct inquiries of the Company's practices, including, but not limited to, the Company's compliance with federal and state fraud and abuse laws, billing practices and relationships with physicians. It is the Company's current practice and future intent to cooperate fully with such inquiries. The Company is not aware of any such inquiry that would have a material adverse effect on the Company's business, financial condition, or results of operations. Acquired Facilities The Company, through its wholly-owned subsidiaries or controlled partnerships and limited liability companies, has acquired and will continue to acquire surgical facilities with prior operating histories. Such facilities may have unknown or contingent liabilities, including liabilities for failure to comply with healthcare laws and regulations, such as billing and reimbursement, fraud and abuse and similar anti-referral laws. Although the Company attempts to assure that no such liabilities exist, obtain indemnification from prospective sellers covering such matters and institute policies designed to conform centers to its standards following completion of acquisitions, there can be no assurance that the Company will not become liable for past activities that may later be asserted to be improper by private plaintiffs or government agencies. There can be no assurance that any such matter will be covered by indemnification or, if covered, that the liability sustained will not exceed contractual limits or the financial capacity of the indemnifying party. The Company cannot predict whether federal or state statutory or regulatory provisions will be enacted that would prohibit or otherwise regulate relationships which the Company has established or may establish with other healthcare providers or have materially adverse effects on its business or revenues arising from such future actions. Management believes, however, that it will be able to adjust the Company's operations so as to be in compliance with any statutory or regulatory provision as may be applicable. Potential Physician Investor Liability A majority of the physician investors in the partnerships and limited liability companies which operate the Company's surgical facilities carry general and professional liability insurance on a claims-made basis. Each partnership or limited liability company may, however, be liable for damages to persons or property arising from occurrences at the surgical facilities. Although the various physician investors and other surgeons generally are required to obtain general and professional liability insurance with tail coverage that extends beyond the period of any claims-made policies, such individuals may not be able to obtain coverage in amounts sufficient to cover all potential liability. Since most insurance policies contain exclusions, the physician investors will not be insured against all possible occurrences. In the event of an uninsured or underinsured loss, the value of an investment in the partnership interests or limited liability company membership units and the amount of distributions could be adversely affected. Contingent Consideration Pursuant to a purchase agreement dated December 24, 2009 (“the Purchase Agreement”), the Company acquired controlling interests in thirty-six business entities in various Florida locations which operate freestanding ASCs and provided anesthesia and pain management services (“the 2009 Acquisition”). Non-controlling interests in the ASCs were owned by certain physicians that remained partners/members in the ASCs and other operating entities. The Purchase Agreement provided for maximum potential contingent consideration of up to $10.0 million based on operating results subsequent to the acquisition for the period from January 1, 2010 to December 31, 2010 . Pursuant to the Purchase Agreement, the contingent consideration is payable as principal under a Subordinated Promissory Note, the form of which was delivered concurrent with the Purchase Agreement. The balance is still outstanding due to ongoing litigation as a result of the civil claim discussed in detail below. The Subordinated Promissory Note bears interest at 8% and during the years ended December 31, 2015 and 2014 , the Company recorded approximately $1.0 million of interest expense related to the note. As discussed below, the Company has made indemnification claims against the Seller exceeding the amount of the contingent consideration liability. The Company has a contractual right of offset against the contingent consideration. The fair value of the contingent consideration liability, including accrued interest, as of December 31, 2015 and 2014 was $14.0 million and $ 13.0 million , respectively. In conjunction with the 2009 Acquisition, an escrow account in the amount of $2.9 million was created to cover any contingencies. With the formation of this escrow account, the Company was indemnified against certain indemnification obligations. In 2010 , $589,000 was paid to the Company in settlement of the acquisition price adjustment noted above. In December 2010 , the Company filed an indemnification claim against the Seller alleging breaches of and inaccuracies in representations and warranties included in the Purchase Agreement. Pursuant to the Purchase Agreement, the escrow agent has not paid the remaining escrow funds due to the unresolved claim associated with this acquisition. Pursuant to the terms of the Purchase Agreement, in December 2010 , the Company filed a claim for indemnification from the Seller for reimbursement of amounts to be repaid to payors for overpayment amounts received by the Seller prior to the date of acquisition, including other losses sustained, and submitted a withdrawal notice to the escrow agent in the amount of approximately $4.4 million . The indemnification claim asserts, among other allegations, that certain operating entities acquired from the Seller improperly recorded payments received from certain payors as income and that one acquired entity used improper billing, coding and collection practices for dates of service prior to acquisition date. The Seller submitted an objection to this claim and filed a civil claim requesting the court to dismiss the Company’s claim and release funds out of escrow. The Company has included in the accompanying consolidated balance sheets a net indemnification receivable due from Seller of $1.1 million as of December 31, 2015 and 2014 pursuant to the terms of the Purchase Agreement. The amount due to the payors of approximately $1.8 million is included in accrued expenses in the accompanying consolidated balance sheets as of December 31, 2015 and 2014 . Subsequent to the acquisition date, the Company determined the acquired accounts receivable were not properly recorded at the net realizable value of the asset. The Company determined the fair value assigned in the initial acquisition accounting resulted in accounts receivable being recorded at an amount which was approximately $14.0 million in excess of the fair value. On June 10, 2013 , the court issued a judgment in favor of the Company regarding its indemnification claim and its claim regarding the overstatement of accounts receivable. Specifically, the court ruled that the Company is entitled to recover approximately $454,000 for the indemnification claims which represents the amount of the original claim less the application of deductibles. The court also ruled that the Company is entitled to receive approximately $10.8 million for the overstated net accounts receivable. The Purchase Agreement provides for any award of damages to the Company to be offset first by the money in the escrow account and then by an offset to the contingent consideration. Therefore, the court ordered that the funds in the escrow account be paid to the Company and the balance of approximately $8.3 million be offset against the $10.0 million contingent consideration. To date, no final judgment has been made regarding the award of attorneys’ fees and interest. Following the judgment noted above, an appeal was filed by the Seller and the outcome of the appeal is still pending. The funds from the escrow account have not been released to the Company and the Company has retained the contingent consideration liability on its consolidated balance sheets at December 31, 2015 and 2014 . |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting A public company is required to report annual and interim financial and descriptive information about its reportable operating segments. Operating segments, as defined, are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or "CODM," in deciding how to allocate resources and in assessing performance. The Company operates in three major lines of business that are also the Company's reportable operating segments - the operation of surgical facilities, the operation of optical services and the operation of ancillary services, which includes physician practices, a diagnostic laboratory and a specialty pharmacy. During the three months ended June 30, 2015 , the Company made changes to its internal reports issued to and reviewed by the CODM. The primary effect of these changes was to remove the allocation of general and administrative expense and assets to the reportable operating segments. The Company has revised the segment disclosures below to present corporate overhead and corporate assets as a reconciling item back to the reported consolidated financial information. The following tables present financial information for each reportable segment (in thousands): Year Ended December 31, 2015 2014 2013 Net Revenues: Surgical facility services $ 884,144 $ 339,309 $ 224,578 Ancillary services 61,175 49,787 44,103 Optical services 14,572 14,193 15,918 Total revenues $ 959,891 $ 403,289 $ 284,599 Year Ended December 31, 2015 2014 2013 Segment Operating Income: Surgical facility services $ 224,098 $ 112,237 $ 77,905 Ancillary services 15,666 16,389 16,909 Optical services 2,283 2,238 3,032 Total $ 242,047 $ 130,864 $ 97,846 General and administrative $ (59,534 ) $ (33,149 ) $ (27,275 ) Gain (loss) on disposal or impairment of long-lived assets, net 2,097 (1,804 ) (2,482 ) Loss on debt extinguishment (16,102 ) (23,414 ) (9,863 ) Merger transaction and integration costs (17,920 ) (21,690 ) — Termination of management agreement and IPO costs (5,834 ) — $ — Total operating income $ 144,754 $ 50,807 $ 58,226 Year Ended December 31, 2015 2014 2013 Supplemental Information: Depreciation and amortization: Surgical facility services $ 27,447 $ 9,911 $ 7,405 Ancillary services 1,934 1,812 1,460 Optical services 1,622 1,641 1,862 Total $ 31,003 $ 13,364 $ 10,727 General and administrative $ 3,542 $ 1,697 $ 936 Total depreciation and amortization $ 34,545 $ 15,061 $ 11,663 December 31, 2015 2014 Assets: Surgical facility services $ 1,762,396 $ 1,638,874 Ancillary services 118,198 70,370 Optical services 25,537 25,876 Total 1,906,131 1,735,120 General and administrative $ 200,553 $ 123,674 Total assets $ 2,106,684 $ 1,858,794 Year Ended December 31, 2015 2014 2013 Supplemental Information: Cash purchases of property and equipment, net: Surgical facility services $ 26,723 $ 5,158 $ 2,301 Ancillary services 1,051 1,034 562 Optical services 128 335 161 Total $ 27,902 $ 6,527 $ 3,024 General and administrative $ 5,537 $ 1,209 $ 1,126 Total cash purchases of property and equipment, net $ 33,439 $ 7,736 $ 4,150 |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) The following tables include a summary of certain information related to the Company's quarterly consolidated results of operations for each of the four quarters in the years ended December 31, 2015 and 2014. The amounts are as follows (in thousands and unaudited): Fiscal Quarter 1Q15 2Q15 3Q15 4Q15 Revenues 224,143 232,827 239,599 263,322 Cost of revenues 155,773 161,558 168,821 183,174 Net income 10,488 12,479 13,784 36,094 Net income attributable to non-controlling interests (17,250 ) (17,905 ) (16,906 ) (19,355 ) Net income (loss) attributable to Surgery Partners, Inc. (6,762 ) (5,426 ) (3,122 ) 16,739 Basic net loss per share of common stock (0.21 ) (0.17 ) (0.10 ) 0.35 Diluted net loss per share common stock (0.21 ) (0.17 ) (0.10 ) 0.35 Fiscal Quarter 1Q14 2Q14 3Q14 4Q14 Revenues 70,480 76,815 76,303 179,691 Cost of revenues 43,050 45,164 45,377 120,587 Net income (loss) 2,258 7,025 430 (36,765 ) Net income attributable to non-controlling interests (6,377 ) (7,631 ) (7,338 ) (17,499 ) Net income (loss) attributable to Surgery Partners, Inc. (4,119 ) (606 ) (6,908 ) (54,264 ) Basic net loss per share of common stock (0.13 ) (0.02 ) (0.22 ) (1.69 ) Diluted net loss per share common stock (0.13 ) (0.02 ) (0.22 ) (1.69 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events A portion of the purchase price related to an acquisition in December 2015 was placed in escrow upon satisfaction of a contingency. The contingency was settled in February 2016 and as a result, the Company received $8.0 million . The $8.0 million is recorded on the accompanying balance sheet as of December 31, 2015 within prepaid expenses and other current assets and the purchase price allocation was adjusted to reflect this change. Effective February 1, 2016, the Company acquired an ASC in Colorado Springs, Colorado for a purchase price of $3.9 million which was funded from proceeds from the Revolver. The operations of the ASC were merged into an existing in-market ASC. |
Significant Accounting Polici25
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, as well as interests in partnerships and limited liability companies controlled by the Company through its ownership of a majority voting interest or other rights granted to the Company by contract to manage and control the affiliate's business. All significant intercompany balances and transactions are eliminated in consolidation. |
Non-Controlling Interests | Non-Controlling Interests The physician limited partners and physician minority members of the entities that the Company controls are responsible for the supervision and delivery of medical services. The governance rights of limited partners and minority members are restricted to those that protect their financial interests. Under certain partnership and operating agreements governing these partnerships and limited liability companies, the Company could be removed as the sole general partner or managing member for certain events such as material breach of the partnership or operating agreement, gross negligence or bankruptcy. These protective rights do not preclude consolidation of the respective partnerships and limited liability companies. Ownership interests in consolidated subsidiaries held by parties other than the Company are identified and generally presented in the consolidated financial statements within the equity section but separate from the Company's equity. However, in instances in which certain redemption features that are not solely within the control of the Company are present, classification of non-controlling interests outside of permanent equity is required. Consolidated net income attributable to the Company and to the non-controlling interests are identified and presented on the consolidated statements of operations; changes in ownership interests are accounted for as equity transactions assuming the Company continues to consolidate related entities. Certain transactions with non-controlling interests are classified within financing activities in the consolidated statements of cash flows. The consolidated financial statements of the Company include all assets, liabilities, revenues and expenses of surgical facilities in which the Company has sufficient ownership and rights to allow the Company to consolidate the surgical facilities. Similar to its investments in non-consolidated affiliates, the Company regularly engages in the purchase and sale of ownership interests with respect to its consolidated subsidiaries that do not result in a change of control. Non-Controlling Interests — Redeemable. Each of the partnerships and limited liability companies through which the Company owns and operates its surgical facilities is governed by a partnership or operating agreement. In certain circumstances, the partnership and operating agreements for the Company's surgical facilities provide that the facilities will purchase all of the physicians’ ownership if certain adverse regulatory events occur, such as it becoming illegal for the physicians to own an interest in a surgical facility, refer patients to a surgical facility or receive cash distributions from a surgical facility. The non-controlling interests - redeemable are reported outside of stockholders' equity in the consolidated balance sheets. |
Variable Interest Entities | Variable Interest Entities The consolidated financial statements include the accounts of variable interest entities in which the Company is the primary beneficiary under the provisions of Accounting Standards Codification ("ASC") Topic 810, Consolidation . At December 31, 2015 , the variable interest entities include five surgical facilities, three anesthesia practices and one physician practice. At December 31, 2014 , the variable interest entities included an additional surgical facility which was disposed of during the three months ended March 31, 2015 and an additional anesthesia practice which no longer met variable interest entity classification in July 2015. There were an additional four acquisitions at December 31, 2015 . The Company has the power to direct the activities that most significantly impact the variable interest entity's economic performance. Additionally, the Company would absorb the majority of the expected losses of these entities should they occur. As of December 31, 2015 and December 31, 2014 , the consolidated balance sheets of the Company included total assets of $104.2 million and $24.7 million , respectively, and total liabilities of $13.2 million and $1.7 million , respectively, related to the Company's variable interest entities. |
Equity Method Investments | Equity Method Investments The Company has non-consolidating investments in surgical facilities and management companies that own or manage surgical facilities. These investments are accounted for using the equity method of accounting. The total amount of these investments included in investments in and advances to affiliates in the consolidated balance sheets was $34.1 million and $33.4 million as of December 31, 2015 and December 31, 2014 , respectively. |
Use of Estimates | Use of Estimates The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and footnotes. Examples include, but are not limited to, estimates of accounts receivable allowances, professional and general liabilities and the estimate of deferred tax assets or liabilities. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All adjustments are of a normal, recurring nature. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to the comparative periods' financial statements to conform to the current year presentation. The reclassifications primarily related to the presentation of certain expenses within costs of revenue and had no impact on the Company's consolidated financial position, results of operations or cash flows. |
Fair Value of Financial Instruments | The fair values of the 2014 First Lien Credit Agreement and 2014 Second Lien Credit Agreement, as defined in Note 5 on Long-Term Debt, were based on a Level 2 computation using quoted prices for identical liabilities in inactive markets at December 31, 2015 and 2014 , as applicable. The carrying amounts related to the Company's other long-term debt obligations approximate their fair values. The Company maintains a supplemental executive retirement savings plan (the "SERP") for certain former Symbion executive officers. The SERP is a non-qualified deferred compensation plan for eligible executive officers and other key employees of the Company that allows participants to defer portions of their compensation. The fair value of the SERP asset and liability was based on a quoted market price, or a Level 1 computation. As of December 31, 2015 and 2014 , the fair value of the assets in the SERP were $1.6 million and $1.4 million , respectively, and were included in other long-term assets in the consolidated balance sheets. The Company had a liability related to the SERP of $1.6 million and $1.4 million as of December 31, 2015 and 2014 , respectively, which was included in other long-term liabilities in the consolidated balance sheets. Fair Value of Financial Instruments The fair value of a financial instrument is the amount at which the instrument could be exchanged in an orderly transaction between market participants to sell the asset or transfer the liability. The Company uses fair value measurements based on quoted prices in active markets for identical assets or liabilities (Level 1), inputs other than quoted prices in active markets that are either directly or indirectly observable (Level 2), or unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions (Level 3), depending on the nature of the item being valued. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, restricted invested assets and accounts payable approximate their fair values. |
Revenue Recognition | Revenues The Company recognizes revenues in the period in which the services are performed. Patient service revenues and receivables from third-party payors are recorded net of estimated contractual adjustments and allowances, which the Company estimates based on the historical trend of its cash collections and contractual write-offs, accounts receivable agings, established fee schedules, contracts with payors and procedure statistics. Other service revenues. Optical service revenues consist of product sales from the Company's optical laboratories as well as handling charges billed to the members of the Company's optical products purchasing organization and sales from the Company's marketing products and services business. The Company's optical products purchasing organization negotiates volume buying discounts with optical products manufacturers. The buying discounts and any handling charges billed to the members of the buying group represent the revenue recognized for financial reporting purposes. Revenue is recognized as orders are shipped to members. The Company bases its estimates for sales returns and discounts on historical experience and has not experienced significant fluctuations between estimated and actual return activity and discounts given. The Company's optical laboratories manufacture and distribute corrective lenses and eyeglasses to ophthalmologists and optometrists. Revenue is recognized when product is shipped, net of allowance for discounts. The Company's marketing products and services businesses recognize revenue when product is shipped or services are rendered. Other revenues include management and administrative service fees derived from the non-consolidated facilities that the Company accounts for under the equity method, management of surgical facilities in which it does not own an interest, and management services provided to physician practices for which the Company is not required to provide capital or additional assets. The fees derived from these management arrangements are based on a predetermined percentage of the revenues of each facility or practice and are recognized in the period in which services are rendered. Patient service revenues. The fee charged for healthcare procedures performed in surgical facilities varies depending on the type of service provided, but usually includes all charges for usage of an operating room, a recovery room, special equipment, medical supplies, nursing staff and medications. The fee does not normally include professional fees charged by the patient’s surgeon, anesthesiologist or other attending physician, which are billed directly by such physicians to the patient or third-party payor. However, in several surgical facilities, the Company charges for anesthesia services. Ancillary service revenues include fees for patient visits to the Company's physician practices, pharmacy services and diagnostic tests ordered by physicians. Patient service revenues are recognized on the date of service, net of estimated contractual adjustments and discounts from third-party payors, including Medicare and Medicaid. Changes in estimated contractual adjustments and discounts are recorded in the period of change. During the year ended December 31, 2015 , the Company recognized an increase to patient service revenues as a result of changes in estimates to third-party settlements related to prior years of approximately $2.3 million compared to a reduction to patient service revenues of $104,000 during the year ended December 31, 2014 . These adjustments were related to two of the Company's surgical hospitals that were acquired in connection with the acquisition of Symbion on November 3, 2014 . |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash and cash equivalent balances at high credit quality financial institutions. |
Accounts Receivable and Allowances for Contractual Adjustments and Doubtful Accounts | The Company records an estimate for doubtful accounts based on the aging category and historical collection experience of each product sales or other business included in other service revenues, as discussed in the note above. The receivables related to the Company's optical products purchasing organization are recognized separately from patient accounts receivable, as discussed above, and are included in other current assets in the consolidated balance sheets. Such receivables were $8.4 million and $7.6 million at December 31, 2015 and 2014 , respectively. Accounts Receivable and Allowances for Contractual Adjustments and Doubtful Accounts Accounts receivable are recorded net of contractual adjustments and allowances for doubtful accounts to reflect accounts receivable at net realizable value. Accounts receivable consists of receivables from federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies, employers and patients. Management recognizes that revenues and receivables from government agencies are significant to the Company's operations, but it does not believe that there is significant credit risk associated with these government agencies. Concentration of credit risk with respect to other payors is limited because of the large number of such payors. As of December 31, 2015 and 2014 , the Company had third-party Medicaid settlements of $5.2 million and $11.7 million , respectively, in other current liabilities in the consolidated balance sheets. The Company recognizes that final reimbursement of accounts receivable is subject to final approval by each third-party payor. However, because the Company has contracts with its third-party payors and also verifies insurance coverage of the patient before medical services are rendered, the amounts that are pending approval from third-party payors are not significant. The Company's policy is to collect co-payments and deductibles prior to providing medical services. It is also the Company's policy to verify a patient’s insurance 72 hours prior to the patient’s procedure. Patient services of the Company are primarily non-emergency, which allows the surgical facilities to control the procedures for which third-party reimbursement is sought and obtained. The Company does not require collateral from self-pay patients. The Company analyzes accounts receivable at each of its facilities to ensure the proper aged category and collection assessment. At a consolidated level, the Company's policy is to review accounts receivable aging, by facility, to determine the appropriate allowance for doubtful accounts. Patient account balances are reviewed for delinquency based on contractual terms. This review is supported by an analysis of the actual revenues, contractual adjustments and cash collections received. An account balance is written off only after the Company has pursued collection with legal or collection agency assistance or otherwise has deemed an account to be uncollectible. |
Inventories | Inventories Inventories, which consist primarily of medical and drug supplies, are stated at the lower of cost or market value. Cost is determined using the first-in, first-out method. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost or, if obtained through acquisition, at fair value determined on the date of acquisition. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets, generally three to five years for computers and software and five to seven years for furniture and equipment. Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease term or the estimated useful life of the assets. Routine maintenance and repairs are expensed as incurred, while expenditures that increase capacities or extend useful lives are capitalized. The Company also leases certain facilities and equipment under capital leases. Assets held under capital leases are stated at the present value of minimum lease payments at the inception of the related lease. Such assets are depreciated on a straight-line basis over the lesser of the lease term or the remaining useful life of the leased asset. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the fair value of the consideration provided in an acquisition over the fair value of net assets acquired and is not amortized. The Company has indefinite-lived intangible assets related to the certificates of need held in jurisdictions where certain of its surgical facilities are located. The Company also has finite-lived intangible assets related to physician guarantee agreements, non-compete agreements, management agreements and customer relationships. Physician income guarantees are amortized into salaries and benefits costs in the consolidated statements of operations over the commitment period of the contract, generally three to four years . Non-compete agreements and management rights agreements are amortized into depreciation and amortization expense in the consolidated statements of operations over the service lives of the agreements, ranging from two years to 20 years for non-compete agreements and 15 years for the management rights agreements. Customer relationships are amortized into depreciation and amortization expense in the consolidated statements of operations over the estimated lives of the relationships, ranging from three to ten years . |
Impairment of Long-Lived Assets, Goodwill and Intangible Assets | Impairment of Long-Lived Assets, Goodwill and Intangible Assets The Company evaluates the carrying value of long-lived assets when impairment indicators are present or when circumstances indicate that impairment may exist. The Company performs an impairment test by preparing an expected undiscounted cash flow projection. If the projection indicates that the recorded amount of the long-lived asset is not expected to be recovered, the carrying value is reduced to estimated fair value. The cash flow projection and fair value represents management’s best estimate, using appropriate and customary assumptions, projections and methodologies, at the date of evaluation. No impairment losses on long-lived assets were recognized during the years ended December 31, 2015 , 2014 and 2013 . The Company tests its goodwill and indefinite-lived intangible assets for impairment annually, as of October 1 , or more frequently if certain indicators arise. The Company performs its annual goodwill impairment assessment by developing a fair value estimate of the business enterprise as of October 1, 2015 using a discounted cash flows approach and comparing the fair value to the carrying value of the net assets of the individual reporting units as of October 1, or additionally if impairment indicators are present. The results of the Company's fair value estimate are then corroborated using a market-based approach. The result of the Company's annual goodwill impairment test at October 1, 2015 indicated no impairment. During the year ended December 31, 2013 , the Company recorded an impairment charge of $581,000 related to its Patient Education Concepts reporting unit, which was the entire goodwill balance of this reporting unit. The impairment charge is included in the consolidated statement of operations as of December 31, 2013 as a component of other (income) expense. There was no impairment charges recorded during the year ended December 31, 2014 . During the quarter ended December 31, 2015 , the Company voluntarily changed its annual goodwill and indefinite-lived intangible assets impairment testing date from December 31 to October 1 of each year. The change in the goodwill and indefinite-lived intangible assets impairment testing date better aligns the impairment testing procedures with the timing of the Company’s annual strategic planning and forecasting process, which is a significant input to the testing, and provides additional time for the completion of the annual analysis prior to the completion of the Company’s annual reporting period. Accordingly, the Company considers this accounting principle change to be preferable. The Company is unable to objectively determine, without the use of hindsight, the projected cash flows and related valuation estimates that would have been used in earlier periods. Therefore, the Company prospectively applied the change in the annual goodwill impairment and indefinite-lived intangible assets testing date beginning October 1, 2015 as retrospective application to prior periods is deemed impracticable. This change in testing date did not delay, accelerate, or avoid a goodwill impairment charge. |
Equity-Based Compensation | Equity-Based Compensation Transactions in which the Company receives employee and non-employee services in exchange for the Company’s equity instruments or liabilities that are based on the fair value of the Company’s equity securities or may be settled by the issuance of these securities are accounted for using a fair value method. Prior to the Reorganization, on the grant date, the Company employed a market approach to estimate the fair value of equity-based awards based on various considerations and assumptions, including implied earnings multiples and other metrics of relevant market participants, the Company’s operating results and forecasted cash flows and the Company’s capital structure. Such estimates require the input of highly subjective, complex assumptions. However, such assumptions are no longer required to determine fair value of shares of the Company’s common stock as its underlying shares began trading publicly during the fourth quarter of 2015. The Company applies the Black-Scholes-Merton method of valuation in determining share-based compensation expense for option awards. The Company’s policy is to recognize compensation expense using the straight line method over the relevant vesting period for units that vest based on time. Prior to the Reorganization, employees held membership units in Surgery Center Holdings, LLC, and the associated expense was referred to as unit-based compensation; following the Reorganization, such expense is referred to as equity-based compensation. |
Earnings Per Share | Earnings Per Share Basic and diluted earnings per share are calculated in accordance with ASC 260, Earnings Per Share , based on the weighted-average number of shares outstanding in each period and dilutive stock options, unvested shares and warrants, to the extent such securities exist and have a dilutive effect on earnings per share. |
Professional, General and Workers' Compensation Insurance | Professional, General and Workers' Compensation Insurance The Company maintains general liability and professional liability insurance in excess of self-insured retentions through third party commercial insurance carriers in amounts that management believes is sufficient for the Company's operations, although, potentially, some claims may exceed the scope of coverage in effect. The professional and general insurance coverage is on a claims-made basis. Workers' compensation insurance is on an occurrence basis. The Company expenses the costs under the self-insured retention exposure for general and professional liability and workers compensation claims which relate to (i) claims made during the policy period, which are offset by insurance recoveries and (ii) an estimate of claims incurred but not yet reported that are expected to be reported after the policy period expires. Reserves and provisions are based upon actuarially determined estimates using individual case-basis valuations and actuarial analysis. Reserves for professional, general and workers' compensation claim liabilities are determined with no regard for expected insurance recoveries and are presented gross on the consolidated balance sheets. Total professional, general and workers' compensation claim liabilities as of December 31, 2015 and 2014 are $9.5 million and $7.4 million , respectively. The balance includes expected insurance recoveries of $6.3 million and $5.0 million as of December 31, 2015 and 2014 , respectively. |
Electronic Health Record Incentives | Electronic Health Record Incentives The American Recovery and Reinvestment Act of 2009 provides for Medicare and Medicaid incentive payments beginning in calendar year 2011 for eligible hospitals and professionals that implement and achieve meaningful use of certified Electronic Health Records ("EHR") technology. Several of the Company's surgical hospitals, which were acquired in connection with the acquisition of Symbion, have implemented plans to comply with the EHR meaningful use requirements of the Health Information Technology for Economic and Clinical Health Act ("HITECH") in time to qualify for the maximum available incentive payments. Compliance with the meaningful use requirements has and will continue to result in significant costs including business process changes, professional services focused on successfully designing and implementing the Company's EHR solutions, along with costs associated with the hardware and software components of the project. The Company currently estimates that total costs incurred to comply will be recovered through the total EHR incentive payments over the projected life cycle of this initiative. The Company incurs both capital expenditures and operating expenses in connection with the implementation of its various EHR initiatives. The amount and timing of these expenditures do not directly correlate with the timing of the Company's cash receipts or recognition of the EHR incentives as other income. The Company expects to receive incentive payments and recognize corresponding revenue upon the completion of the EHR meaningful use requirements. |
Income Taxes | Income Taxes The Company uses the asset and liability method to account for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If a net operating loss carryforward exists, the Company makes a determination as to whether that net operating loss carryforward will be utilized in the future. A valuation allowance is established for certain net operating loss carryforwards when their recoverability is deemed to be uncertain. The carrying value of the net deferred tax assets assumes that the Company will be able to generate sufficient future taxable income in certain tax jurisdictions, based on estimates and assumptions. If these estimates and related assumptions change in the future, the Company may be required to adjust its deferred tax valuation allowances. The Company, or one or more of its subsidiaries, files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal or state income tax examinations for years prior to 2010. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, " Revenue from Contracts with Customers ," which outlines a single comprehensive model for recognizing revenue and supersedes most existing revenue recognition guidance, including guidance specific to the healthcare industry. This ASU provides companies the option of applying a full or modified retrospective approach upon adoption. This ASU was originally set to be effective for fiscal years beginning after December 15, 2016, and early adoption was not permitted. In July 2015, the FASB deferred the effective date for the standard to be effective for fiscal years beginning after December 15, 2017. The FASB will now permit companies to early adopt within one year of the new effective date. The Company will adopt this ASU on January 1, 2018 and is currently evaluating its plan for adoption and the impact on the Company's revenue recognition policies, procedures and the resulting impact on the Company's consolidated financial position, results of operations and cash flows. In February 2015, the FASB issued ASU 2015-02, “ Consolidation: Amendments to the Consolidation Analysis ,” which amends the current consolidation guidance, including introducing a separate consolidation analysis specific to limited partnerships and other similar entities. Under this analysis, limited partnerships and other similar entities will be considered a variable-interest entity unless the limited partners hold substantive kick-out rights or participating rights. The provisions of ASU 2015-02 are effective for annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company does not anticipate that the adoption of ASU 2015-02 will have a material impact on its financial position, results of operations, cash flows and financial disclosures. In April 2015, the FASB issued ASU 2015-03, “ Simplifying the Presentation of Debt Issuance Costs ," which simplifies the presentation of debt issuance costs by requiring debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted, and the new guidance should be applied retrospectively. The Company plans to adopt this ASU on January 1, 2016, and does not anticipate that such adoption will have a material effect on its consolidated financial position, results of operations, or cash flows. In August 2015, the FASB issued ASU 2015-15, " Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements" which clarifies the SEC staff’s position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements given the lack of guidance on this topic in ASU 2015-03. The SEC staff has announced that it would “not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement.” The Company plans to adopt this ASU on January 1, 2016, and does not anticipate that such adoption will have a material effect on its consolidated financial position, results of operations, or cash flows. In September 2015, the FASB issued ASU 2015-16, “ Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments ” which eliminates the requirement for an acquirer to retrospectively adjust its financial statements for changes to provisional amounts that are identified during the measurement-period following the consummation of a business combination. Instead, ASU 2015-16 requires these types of adjustments to be made during the reporting period in which they are identified and would require additional disclosure or separate presentation of the portion of the adjustment that would have been recorded in the previously reported periods as if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective prospectively for fiscal years beginning after December 15, 2015, including interim periods within those years. The Company does not anticipate that the adoption of ASU 2015-16 will have a material impact on its financial position, results of operations, cash flows and financial disclosures. In November 2015, the FASB issued ASU 2015-17, “ Balance Sheet Classification of Deferred Taxes ”, which simplifies the presentation of deferred income taxes. This ASU requires that deferred tax assets and liabilities be classified as long-term in the statement of financial position. The Company early adopted ASU 2015-17 effective December 31, 2015 on a prospective basis. Adoption of this ASU resulted in a reclassification of the Company's net current deferred tax asset to a net long-term deferred tax asset in its consolidated balance sheet as of December 31, 2015. No prior periods were retrospectively adjusted. |
Significant Accounting Polici26
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Rollforward of Non-Controlling Interests - Redeemable | A summary of activity related to the non-controlling interests—redeemable follows (in thousands): Balance at December 31, 2013 $ — Net income attributable to non-controlling interests—redeemable 4,079 Acquisition and disposal of shares of non-controlling interests, net—redeemable 191,278 Distributions to non-controlling interest —redeemable holders (2,768 ) Balance at December 31, 2014 192,589 Net income attributable to non-controlling interests—redeemable 17,616 Acquisition and disposal of shares of non-controlling interests, net—redeemable (6,830 ) Distributions to non-controlling interest —redeemable holders (19,936 ) Balance at December 31, 2015 $ 183,439 |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | A summary of the carrying amounts and fair values of the Company's long-term debt follows (in thousands): Carrying Amount Fair Value December 31, December 31, December 31, December 31, 2014 First Lien Credit Agreement, net of debt issuance and discount of $20,223 and $23,818 at December 31, 2015 and 2014, respectively $ 841,078 $ 846,183 $ 828,816 $ 820,798 2014 Second Lien Credit Agreement, net of debt issuance and discount of $8,159 and $18,184 at December 31, 2015 and 2014, respectively $ 238,341 $ 471,816 $ 225,382 $ 452,943 |
Schedule of Revenues by Type, HealthCare Organization | A summary of revenues by service type as a percentage of total revenues follows: Year Ended December 31, 2015 2014 2013 Patient service revenues: Surgical facilities revenues 91.6 % 83.9 % 78.9 % Ancillary services revenues 6.4 % 12.3 % 15.5 % 98.0 % 96.2 % 94.4 % Other service revenues: Optical services revenues 1.5 % 3.5 % 5.6 % Other 0.5 % 0.3 % — % 2.0 % 3.8 % 5.6 % Total revenues 100.0 % 100.0 % 100.0 % |
Schedule of Revenue Sources for Patient Service Revenues | The following table sets forth patient service revenues by type of payor and as a percentage of total patient service revenues for the Company's consolidated surgical facilities (dollars in thousands): Year Ended December 31, 2015 2014 2013 Amount % Amount % Amount % Patient service revenues: Private insurance $ 516,739 55.0 % $ 202,172 52.1 % $ 162,888 60.6 % Government 359,471 38.2 % 134,041 34.5 % 75,125 28.0 % Self-pay 16,190 1.7 % 13,645 3.5 % 7,587 2.8 % Other 48,311 5.1 % 38,215 9.9 % 23,081 8.6 % Total patient service revenues $ 940,711 100.0 % $ 388,073 100.0 % $ 268,681 100.0 % Other service revenues: Optical service revenues $ 14,572 $ 14,193 $ 15,918 Other revenues 4,608 1,023 — Total net revenues $ 959,891 $ 403,289 $ 284,599 |
Schedules of Accounts Receivable | A summary of the changes in the allowance for doubtful accounts receivable follows (in thousands): Balance at December 31, 2012 $ 3,234 Provision for doubtful accounts 5,885 Accounts written off, net of recoveries (4,091 ) Balance at December 31, 2013 5,028 Provision for doubtful accounts 9,509 Accounts written off, net of recoveries (9,208 ) Balance at December 31, 2014 5,329 Provision for doubtful accounts 23,578 Accounts written off, net of recoveries (10,585 ) Balance at December 31, 2015 $ 18,322 |
Schedule of Prepaid Expenses and Other Current Assets | A summary of prepaid expenses and other current assets follows (in thousands): December 31, 2015 2014 Prepaid expenses $ 7,409 $ 7,050 Receivables - optical product purchasing organization 8,434 7,556 Acquisition escrow receivable 8,000 — Other current assets 10,777 9,399 Total $ 34,620 $ 24,005 |
Schedule of Other Long-Term Assets | A summary of other long-term assets follows (in thousands): December 31, 2015 2014 Notes receivable $ 212 $ 182 Deposits 2,475 2,196 Assets of SERP 1,606 1,402 Other 4,211 2,099 Total $ 8,504 $ 5,879 |
Schedule of Other Current Liabilities | A summary of other current liabilities follows (in thousands): December 31, 2015 2014 Interest payable $ 5,410 $ 7,027 Current taxes payable 1,977 3,189 Insurance liabilities 5,476 5,552 Third-party settlements 5,222 11,708 Acquisition consideration payable 16,768 — Amounts due to patients and payors 11,424 9,476 Other accrued expenses 22,133 16,918 Total $ 68,410 $ 53,870 |
Schedule of Other Long-Term Liabilities | A summary of other long-term liabilities follows (in thousands): December 31, 2015 2014 Facility lease obligations $ 53,927 $ 50,749 Medical malpractice liability 6,339 4,253 Liability of SERP 1,608 1,415 Contingent consideration obligation 14,049 13,009 Acquisition consideration payable — 16,768 Unfavorable lease liability 1,996 2,427 Other long-term liabilities 7,694 1,989 Total $ 85,613 $ 90,610 |
Acquisitions and Developments (
Acquisitions and Developments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Schedule of recognized identified assets acquired and liabilities assumed | The purchase price amount has been allocated to the related assets acquired and liabilities assumed based upon their respective fair values as follows: Cash consideration $ 298,857 Acquisition consideration payable 16,768 Fair value of non-controlling interests 395,663 Fair value of Symbion 711,288 Net assets acquired: Cash 40,374 Accounts receivable, net 79,830 Inventories 18,389 Prepaid expenses and other current assets 9,876 Property and equipment 153,179 Investments in and advances to affiliates 32,728 Intangible assets 31,534 Restricted invested assets 316 Other long-term assets 6,239 Accounts payable (20,419 ) Accrued payroll and benefits (14,600 ) Other current liabilities (47,229 ) Current maturities of long-term debt (83,805 ) Long-term debt, less current maturities (376,395 ) Long-term deferred tax liabilities (19,853 ) Other long-term liabilities (60,500 ) Net assets acquired (250,336 ) Excess of fair value over identifiable net assets acquired $ 961,624 The aggregate amounts preliminarily recognized as of the acquisition date for each major class of assets and liabilities assumed in the acquisitions closed during the year ended December 31, 2015 as follows: Cash consideration $ 122,470 Fair value of non-controlling interests 13,842 Aggregate fair value of acquisitions 136,312 Net assets acquired: Cash and cash equivalents 1,350 Accounts receivable 8,448 Other current assets 9,650 Property and equipment 3,293 Intangible assets 7,539 Long-term assets 40 Accounts payable and other current assets (5,391 ) Current maturities of long-term debt (226 ) Long-term deferred tax liability (1,836 ) Long-term debt (367 ) Net assets acquired 22,500 Excess of fair value over identifiable net assets acquired $ 113,812 |
Business acquisition, pro forma information | The unaudited consolidated pro forma results for year ended ended December 31, 2014 , assuming the Symbion acquisition had been consummated on January 1, 2013, are as follows (in thousands): Year Ended December 31, 2014 2013 Net revenues $ 873,683 $ 820,186 Net income 31,557 42,714 Less: net income attributable to non-controlling interests (68,973 ) (64,396 ) Net loss attributable to Surgery Partners, Inc. $ (37,416 ) $ (21,682 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | A summary of property and equipment follows (in thousands): December 31, 2015 2014 Land $ 6,790 $ 6,790 Buildings and improvements 104,971 100,574 Furniture and equipment 14,520 13,662 Computer and software 24,597 20,622 Medical equipment 96,291 86,132 Construction in progress 7,619 2,923 Property and equipment, at cost 254,788 230,703 Less: Accumulated depreciation (70,238 ) (55,697 ) Property and equipment, net $ 184,550 $ 175,006 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | A summary of activity related to goodwill for the year ended December 31, 2015 follows (in thousands): Balance at December 31, 2013 $ 339,521 Acquisitions 959,232 Divestitures — Purchase price adjustments — Balance at December 31, 2014 $ 1,298,753 Acquisitions 113,812 Divestitures (8,399 ) Purchase price adjustments 3,761 Balance at December 31, 2015 $ 1,407,927 |
Schedule of Intangible Assets, Excluding Goodwill | A summary of the activity related to intangible assets as of December 31, 2015 follows (in thousands): Physician Income Guarantees Management Rights Non-Compete Agreements Certificates of Need Customer Relationships Other Total Intangible Assets Balance at December 31, 2013 $ — $ 377 $ 16,123 $ — $ 7,665 $ 2,811 $ 26,976 Additions 1,081 24,700 3,500 3,711 — 242 33,234 Recruitment expense (108 ) — — — — — (108 ) Amortization — (320 ) (3,033 ) — (1,391 ) (470 ) (5,214 ) Balance at December 31, 2014 $ 973 $ 24,757 $ 16,590 $ 3,711 $ 6,274 $ 2,583 $ 54,888 Additions 1,052 — 7,532 — — — 8,584 Recruitment expense (813 ) — — — — — (813 ) Amortization — (1,731 ) (5,551 ) — (1,338 ) (471 ) (9,091 ) Balance at December 31, 2015 $ 1,212 $ 23,026 $ 18,571 $ 3,711 $ 4,936 $ 2,112 $ 53,568 |
Finite-lived Intangible Assets Amortization Schedule | A summary of the scheduled amortization related to the Company's finite-lived intangible assets as of December 31, 2015 follows (in thousands): Amortization of Finite-Lived Intangible Assets 2016 $ 9,707 2017 8,220 2018 6,316 2019 5,764 2020 2,616 Thereafter 16,992 Total $ 49,615 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | A summary of long-term debt follows (in thousands): December 31, 2015 2014 2014 Revolver Loan $ 125,250 $ — 2014 First Lien Credit Agreement, dated November 3, 2014, maturing November 3, 2020, net of debt issuance and discount of $20,223 and $23,818 at December 31, 2015 and 2014, respectively 841,078 846,183 2014 Second Lien Credit Agreement, dated November 3, 2014, maturing November 3, 2021, net of debt issuance and discount of $8,159 and $18,184 at December 31, 2015 and 2014, respectively 238,341 471,816 Subordinated Notes 1,000 1,000 Notes payable and secured loans 40,615 31,600 Capital lease obligations 11,316 10,755 Total debt 1,257,600 1,361,354 Less: Current maturities 27,272 22,088 Total long-term debt $ 1,230,328 $ 1,339,266 |
Schedule of Maturities of Long-term Debt | A summary of the scheduled maturities of our debt obligations as of December 31, 2015 follows (in thousands): Capital Lease Obligations Other Long-Term Debt Total 2016 $ 4,170 $ 23,102 $ 27,272 2017 3,162 27,920 31,082 2018 2,246 12,433 14,679 2019 1,340 136,080 137,420 2020 351 827,146 827,497 Thereafter 47 247,985 248,032 Total debt $ 11,316 $ 1,274,666 $ 1,285,982 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Future Minimum Operating Lease Payments | The future minimum lease payments under non-cancellable operating leases, net of sub-lease income, follows (in thousands): 2016 $ 36,443 2017 33,019 2018 29,721 2019 25,677 2020 21,401 Thereafter 110,131 Total minimum operating lease payments $ 256,392 |
Future Minimum Sub-Lease Payments Received | The Company has various sub-lease arrangements and the future minimum lease payments to be received under these non-cancellable arrangements are as follows (in thousands): 2016 $ 1,043 2017 1,101 2018 1,137 2019 658 2020 468 Thereafter 2,231 Total non-cancellable sub-lease income $ 6,638 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a reconciliation of the numerator and denominator of basic and diluted earnings per share for the years ended December 31, 2015 , 2014 and 2013 (in thousands except share and per share amounts): Year Ended December 31, 2015 2014 2013 Numerator: Net income (loss) attributable to Surgery Partners, Inc. $ 1,429 $ (65,897 ) $ (9,062 ) Denominator: Weighted average shares outstanding- basic (1) 36,066,233 32,295,364 31,815,520 Effect of dilutive securities (2) 1,398,154 — — Weighted average shares outstanding- diluted 37,464,387 32,295,364 31,815,520 Earnings (loss) per share: Basic earnings (loss) per share $ 0.04 $ (2.04 ) $ (0.28 ) Diluted earnings (loss) per share (2) $ 0.04 $ (2.04 ) $ (0.28 ) (1) Effect of the Reorganization has been retrospectively applied to all periods presented. (2) The impact of potentially dilutive securities for the years ended December 31, 2014 and 2013 was not considered because the effect would be anti-dilutive in each of those periods. |
Income Taxes and Tax Receivab33
Income Taxes and Tax Receivable Agreement (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense (Benefit) | Income tax (benefit) expense is comprised of the following (in thousands): Year Ended December 31, 2015 2014 2013 Current: Federal $ — $ — $ — State 909 1,669 469 Deferred: Federal (132,311 ) 13,235 6,353 State (17,580 ) 854 748 Total income tax (benefit) expense $ (148,982 ) $ 15,758 $ 7,570 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the provision for income taxes as reported in the consolidated statements of operations and the amount of income tax (benefit) expense computed by multiplying consolidated income (loss) in each year by the U.S. federal statutory rate of 35% follows (in thousands): Year Ended December 31, 2015 2014 2013 Tax (benefit) expense at U.S.federal statutory rate $ (26,648 ) $ (3,840 ) $ 8,601 State income tax, net of U.S. federal tax benefit 1,059 1,402 408 Change in valuation allowance (137,721 ) 29,336 4,067 Expiration of carryforwards and stock option forfeitures — 1,286 2,524 Net income attributable to non-controlling interests (24,996 ) (13,207 ) (9,108 ) Changes in measurement of uncertain tax positions (10 ) 589 — Nondeductible transaction costs 3,442 4,230 — Tax return reconciling differences (1,574 ) (4,419 ) 836 Change in effective tax rate (2,143 ) TRA liability 39,428 Other 181 381 242 Total income tax (benefit) expense $ (148,982 ) $ 15,758 $ 7,570 |
Schedule of Deferred Tax Assets and Liabilities | The components of temporary differences and the approximate tax effects that give rise to the Company’s net deferred tax asset are as follows (in thousands): December 31, 2015 2014 Deferred tax assets: Medical malpractice liability $ 869 $ 526 Accrued vacation and incentive compensation 2,212 2,079 Net operating loss carryforwards 146,663 123,709 Allowance for bad debts 1,846 980 Basis differences of partnerships and joint ventures — 16,131 SERP liability 685 527 Capital loss carryforwards 2,052 3,513 Stock option compensation 367 362 Deferred rent 2,288 — Deferred financing costs 3,083 4,386 Audit and tax fee accruals 242 760 FIN 48 liabilities 244 440 TRA liability 2,750 — Other deferred assets 1,748 1,597 Total gross deferred tax assets 165,049 155,010 Less: Valuation allowance (6,949 ) (142,909 ) Total deferred tax assets 158,100 12,101 Deferred tax liabilities: Depreciation on property and equipment (806 ) (1,050 ) Amortization of intangible assets (16,083 ) (16,159 ) Basis differences of partnerships and joint ventures (46,494 ) (43,195 ) Deferred rent — (515 ) Other deferred liabilities (612 ) (466 ) Total deferred tax liabilities (63,995 ) (61,385 ) Net deferred tax assets (liabilities) $ 94,105 $ (49,284 ) |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending liability for gross unrecognized tax benefits for the years ended December 31, 2015 and 2014 is as follows (in thousands): Year Ended December 31, 2015 2014 Unrecognized tax benefits at beginning of year $ 2,755 $ — Additions for tax positions acquired from Symbion — 1,766 Additions based on tax provisions related to the current year — 66 Additions for tax positions of prior years 136 923 Reductions for tax positions of prior year (996 ) Settlements (492 ) Unrecognized tax benefits at end of year $ 1,403 $ 2,755 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Options, Valuation Assumptions | The following table sets forth the assumptions used by the Company to estimate the fair value of options granted under the 2015 Omnibus Incentive Plan: Expected volatility 29% - 38% Risk-free interest rate 0.90% - 1.36% Expected dividends — Average expected term (years) 3.00 Fair value of stock options granted $ 4.83 |
Schedule of Stock Options Activity | A summary of stock option activity during the year ended December 31, 2015 is as follows: Units Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Outstanding at December 31, 2014 — Granted 8,488 $ 20.03 3.0 Exercised — Forfeited — Outstanding at December 31, 2015 (1) 8,488 $ 20.03 3.0 (1) Of the outstanding options, none were exercisable as of December 31, 2015 . |
Schedule of Restricted Stock Activity | A summary of Holdings LLC issued restricted stock activity for the years ended December 31, 2015 , 2014 , and 2013 follows: Total Shares Vested Shares Unvested Shares Weighted-Average Grant Fair Value Outstanding at January 1, 2013 3,234,664 1,245,510 1,989,154 $0.81 Granted — — — — Forfeited/Terminated — — — — Purchased — — — — Vested — 543,270 (543,270 ) 0.83 Outstanding at December 31, 2013 3,234,664 1,788,780 1,445,884 $0.81 Granted 583,404 — 583,404 6.44 Forfeited/Terminated (127,582 ) — (127,582 ) 1.27 Purchased (803,336 ) (803,336 ) — 3.64 Vested — 659,641 (659,641 ) 1.43 Outstanding at December 31, 2014 2,887,150 1,645,085 1,242,065 $1.96 Granted 569,114 — 569,114 6.31 Forfeited/Terminated — — — — Purchased (11,742 ) (11,742 ) — 6.31 Vested — 1,643,525 (1,643,525 ) 3.79 Outstanding at December 31, 2015 3,444,522 3,276,868 167,654 $2.53 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | The following tables present financial information for each reportable segment (in thousands): Year Ended December 31, 2015 2014 2013 Net Revenues: Surgical facility services $ 884,144 $ 339,309 $ 224,578 Ancillary services 61,175 49,787 44,103 Optical services 14,572 14,193 15,918 Total revenues $ 959,891 $ 403,289 $ 284,599 |
Reconciliation of Operating Income from Segments to Consolidated | Year Ended December 31, 2015 2014 2013 Segment Operating Income: Surgical facility services $ 224,098 $ 112,237 $ 77,905 Ancillary services 15,666 16,389 16,909 Optical services 2,283 2,238 3,032 Total $ 242,047 $ 130,864 $ 97,846 General and administrative $ (59,534 ) $ (33,149 ) $ (27,275 ) Gain (loss) on disposal or impairment of long-lived assets, net 2,097 (1,804 ) (2,482 ) Loss on debt extinguishment (16,102 ) (23,414 ) (9,863 ) Merger transaction and integration costs (17,920 ) (21,690 ) — Termination of management agreement and IPO costs (5,834 ) — $ — Total operating income $ 144,754 $ 50,807 $ 58,226 |
Reconciliation of Assets from Segment to Consolidated | December 31, 2015 2014 Assets: Surgical facility services $ 1,762,396 $ 1,638,874 Ancillary services 118,198 70,370 Optical services 25,537 25,876 Total 1,906,131 1,735,120 General and administrative $ 200,553 $ 123,674 Total assets $ 2,106,684 $ 1,858,794 |
Schedule of Other Segment Reporting Information | Year Ended December 31, 2015 2014 2013 Supplemental Information: Depreciation and amortization: Surgical facility services $ 27,447 $ 9,911 $ 7,405 Ancillary services 1,934 1,812 1,460 Optical services 1,622 1,641 1,862 Total $ 31,003 $ 13,364 $ 10,727 General and administrative $ 3,542 $ 1,697 $ 936 Total depreciation and amortization $ 34,545 $ 15,061 $ 11,663 Year Ended December 31, 2015 2014 2013 Supplemental Information: Cash purchases of property and equipment, net: Surgical facility services $ 26,723 $ 5,158 $ 2,301 Ancillary services 1,051 1,034 562 Optical services 128 335 161 Total $ 27,902 $ 6,527 $ 3,024 General and administrative $ 5,537 $ 1,209 $ 1,126 Total cash purchases of property and equipment, net $ 33,439 $ 7,736 $ 4,150 |
Quarterly Financial Informati36
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The amounts are as follows (in thousands and unaudited): Fiscal Quarter 1Q15 2Q15 3Q15 4Q15 Revenues 224,143 232,827 239,599 263,322 Cost of revenues 155,773 161,558 168,821 183,174 Net income 10,488 12,479 13,784 36,094 Net income attributable to non-controlling interests (17,250 ) (17,905 ) (16,906 ) (19,355 ) Net income (loss) attributable to Surgery Partners, Inc. (6,762 ) (5,426 ) (3,122 ) 16,739 Basic net loss per share of common stock (0.21 ) (0.17 ) (0.10 ) 0.35 Diluted net loss per share common stock (0.21 ) (0.17 ) (0.10 ) 0.35 Fiscal Quarter 1Q14 2Q14 3Q14 4Q14 Revenues 70,480 76,815 76,303 179,691 Cost of revenues 43,050 45,164 45,377 120,587 Net income (loss) 2,258 7,025 430 (36,765 ) Net income attributable to non-controlling interests (6,377 ) (7,631 ) (7,338 ) (17,499 ) Net income (loss) attributable to Surgery Partners, Inc. (4,119 ) (606 ) (6,908 ) (54,264 ) Basic net loss per share of common stock (0.13 ) (0.02 ) (0.22 ) (1.69 ) Diluted net loss per share common stock (0.13 ) (0.02 ) (0.22 ) (1.69 ) |
Organization (Details)
Organization (Details) $ / shares in Units, $ in Thousands | Oct. 06, 2015USD ($) | Oct. 01, 2015$ / sharesshares | Nov. 03, 2014USD ($)surgical_facility | Jun. 13, 2014USD ($) | Dec. 31, 2015USD ($)Entitysurgical_facilitystateshares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($) | Sep. 30, 2015shares | Jan. 27, 2014USD ($) | Apr. 11, 2013USD ($) |
Product Information [Line Items] | ||||||||||
Common stock, shares issued (in shares) | shares | 48,156,990 | 1,000 | ||||||||
Proceeds from initial public offering, net of offering costs | $ | $ 250,979 | $ 0 | $ 0 | |||||||
Number of business entities acquired | Entity | 4 | |||||||||
Number of States in which entity operates | state | 29 | |||||||||
Number of surgical facilities owned | 101 | |||||||||
Number of surgical facilities owned, majority interest | 72 | |||||||||
Number of surgical facilities owned, consolidated | 90 | |||||||||
Facilities, Ambulatory Surgery Centers | ||||||||||
Product Information [Line Items] | ||||||||||
Number of surgical facilities owned | 96 | |||||||||
Facilities, Surgical Hospitals | ||||||||||
Product Information [Line Items] | ||||||||||
Number of surgical facilities owned | 5 | |||||||||
Facilities, Physician Clinics | ||||||||||
Product Information [Line Items] | ||||||||||
Number of surgical facilities owned | 46 | |||||||||
Surgery Center Holdings, LLC | ||||||||||
Product Information [Line Items] | ||||||||||
Common stock, shares issued (in shares) | shares | 33,871,990 | |||||||||
Symbion Holdings Corporation | ||||||||||
Product Information [Line Items] | ||||||||||
Number of business entities acquired | 55 | |||||||||
Business acquisition total purchase price | $ | $ 298,857 | $ 792,000 | ||||||||
Symbion Holdings Corporation | Facilities, Ambulatory Surgery Centers | ||||||||||
Product Information [Line Items] | ||||||||||
Number of business entities acquired | 49 | |||||||||
Symbion Holdings Corporation | Facilities, Surgical Hospitals | ||||||||||
Product Information [Line Items] | ||||||||||
Number of business entities acquired | 6 | |||||||||
Line of Credit | ||||||||||
Product Information [Line Items] | ||||||||||
Debt maximum borrowing capacity | $ | $ 1,400,000 | $ 90,000 | $ 465,000 | |||||||
IPO | ||||||||||
Product Information [Line Items] | ||||||||||
Stock Issued During Period (in shares) | shares | 14,285,000 | |||||||||
Fair value of stock options granted | $ / shares | $ 19 | |||||||||
Proceeds from initial public offering, net of offering costs | $ | $ 255,800 | |||||||||
IPO, Underwriting Fees | ||||||||||
Product Information [Line Items] | ||||||||||
Issuance Costs | $ | 15,600 | |||||||||
IPO, Directly Related Costs | ||||||||||
Product Information [Line Items] | ||||||||||
Issuance Costs | $ | $ 4,800 |
Significant Accounting Polici38
Significant Accounting Policies - Schedule of Non-Controlling Interests - Redeemable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Non-Controlling Interests - Redeemable [Roll Forward] | ||
Non-controlling interest, beginning balance | $ 192,589 | $ 0 |
Net income attributable to non-controlling interests—redeemable | 17,616 | 4,079 |
Acquisition and disposal of shares of non-controlling interests, net—redeemable | (6,830) | 191,278 |
Distributions to non-controlling interest —redeemable holders | (19,936) | (2,768) |
Non-controlling interest, ending balance | $ 183,439 | $ 192,589 |
Significant Accounting Polici39
Significant Accounting Policies - Variable Interest Entities (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2015USD ($)Entity | Dec. 31, 2015USD ($)Anesthesia_Practice | Dec. 31, 2015USD ($)surgical_facility | Dec. 31, 2015USD ($)Practice | Dec. 31, 2014USD ($) | |
Variable Interest Entity [Line Items] | |||||
Number of business entities acquired | Entity | 4 | ||||
Variable Interest Entity Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Number of facilities included in VIE | 3 | 5 | 1 | ||
Total assets related to VIE | $ 104.2 | $ 104.2 | $ 104.2 | $ 104.2 | $ 24.7 |
Total liabilities related to VIE | $ 13.2 | $ 13.2 | $ 13.2 | $ 13.2 | $ 1.7 |
Significant Accounting Polici40
Significant Accounting Policies - Equity Method Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Investments in and advances to affiliates | $ 34,103 | $ 33,441 |
Significant Accounting Polici41
Significant Accounting Policies - Schedule of Carrying Amount and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | $ 1,285,982 | |
Line of Credit | 2014 First Lien Credit Agreement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 841,078 | $ 846,183 |
Debt issuance and discount | 20,223 | 23,818 |
Line of Credit | 2014 First Lien Credit Agreement | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 841,078 | 846,183 |
Line of Credit | 2014 First Lien Credit Agreement | Fair Value | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 828,816 | 820,798 |
Line of Credit | 2014 Second Lien Credit Agreement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 238,341 | 471,816 |
Debt issuance and discount | 8,159 | 18,184 |
Line of Credit | 2014 Second Lien Credit Agreement | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | 238,341 | 471,816 |
Line of Credit | 2014 Second Lien Credit Agreement | Fair Value | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total debt | $ 225,382 | $ 452,943 |
Significant Accounting Polici42
Significant Accounting Policies - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets of SERP | $ 1,606 | $ 1,402 |
Liability of SERP | 1,608 | 1,415 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets of SERP | 1,600 | 1,400 |
Liability of SERP | $ 1,600 | $ 1,400 |
Significant Accounting Polici43
Significant Accounting Policies - Schedule of Revenues by Type, Healthcare Organization (Details) - Revenue Source - Revenue | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue from External Customer [Line Items] | |||
Revenue by service type as a percentage of total revenues | 100.00% | 100.00% | 100.00% |
Healthcare Organization, Patient Service | |||
Revenue from External Customer [Line Items] | |||
Revenue by service type as a percentage of total revenues | 98.00% | 96.20% | 94.40% |
Surgical Facility Services | |||
Revenue from External Customer [Line Items] | |||
Revenue by service type as a percentage of total revenues | 91.60% | 83.90% | 78.90% |
Ancillary Services | |||
Revenue from External Customer [Line Items] | |||
Revenue by service type as a percentage of total revenues | 6.40% | 12.30% | 15.50% |
Healthcare Organization, Other Service | |||
Revenue from External Customer [Line Items] | |||
Revenue by service type as a percentage of total revenues | 2.00% | 3.80% | 5.60% |
Optical Services | |||
Revenue from External Customer [Line Items] | |||
Revenue by service type as a percentage of total revenues | 1.50% | 3.50% | 5.60% |
Other | |||
Revenue from External Customer [Line Items] | |||
Revenue by service type as a percentage of total revenues | 0.50% | 0.30% | 0.00% |
Significant Accounting Polici44
Significant Accounting Policies - Schedule of Revenues by Sources (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)surgical_facility | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||||||||
Increase of revenue as result of changes in estimates to third-party settlements | $ 2,300 | ||||||||||
Decrease of revenue as result of changes in estimates to third-party settlements | $ 104 | ||||||||||
Number of surgical facilities related to revenue adjustment | surgical_facility | 2 | ||||||||||
Total net revenues | $ 263,322 | $ 239,599 | $ 232,827 | $ 224,143 | $ 179,691 | $ 76,303 | $ 76,815 | $ 70,480 | $ 959,891 | 403,289 | $ 284,599 |
Healthcare Organization, Patient Service | |||||||||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||||||||
Patient service revenues | $ 940,711 | $ 388,073 | $ 268,681 | ||||||||
Healthcare Organization, Patient Service | Customer | Revenue | |||||||||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||||||||
Revenue by service type as a percentage of total revenues | 100.00% | 100.00% | 100.00% | ||||||||
Optical Services | |||||||||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||||||||
Other service revenues | $ 14,572 | $ 14,193 | $ 15,918 | ||||||||
Other | |||||||||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||||||||
Other service revenues | 4,608 | 1,023 | 0 | ||||||||
Private insurance | Healthcare Organization, Patient Service | |||||||||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||||||||
Patient service revenues | $ 516,739 | $ 202,172 | $ 162,888 | ||||||||
Private insurance | Healthcare Organization, Patient Service | Customer | Revenue | |||||||||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||||||||
Revenue by service type as a percentage of total revenues | 55.00% | 52.10% | 60.60% | ||||||||
Government | Healthcare Organization, Patient Service | |||||||||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||||||||
Patient service revenues | $ 359,471 | $ 134,041 | $ 75,125 | ||||||||
Government | Healthcare Organization, Patient Service | Customer | Revenue | |||||||||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||||||||
Revenue by service type as a percentage of total revenues | 38.20% | 34.50% | 28.00% | ||||||||
Self-pay | Healthcare Organization, Patient Service | |||||||||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||||||||
Patient service revenues | $ 16,190 | $ 13,645 | $ 7,587 | ||||||||
Self-pay | Healthcare Organization, Patient Service | Customer | Revenue | |||||||||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||||||||
Revenue by service type as a percentage of total revenues | 1.70% | 3.50% | 2.80% | ||||||||
Other | Healthcare Organization, Patient Service | |||||||||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||||||||
Patient service revenues | $ 48,311 | $ 38,215 | $ 23,081 | ||||||||
Other | Healthcare Organization, Patient Service | Customer | Revenue | |||||||||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||||||||
Revenue by service type as a percentage of total revenues | 5.10% | 9.90% | 8.60% |
Significant Accounting Polici45
Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Third-Party Medicaid settlements | $ 5,222 | $ 11,708 | |
Optical products receivable | 8,434 | 7,556 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Allowance for doubtful accounts, beginning balance | 5,329 | 5,028 | $ 3,234 |
Provision for doubtful accounts | 23,578 | 9,509 | 5,885 |
Accounts written off, net of recoveries | (10,585) | (9,208) | (4,091) |
Allowance for doubtful accounts, ending balance | $ 18,322 | $ 5,329 | $ 5,028 |
Significant Accounting Polici46
Significant Accounting Policies - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 7,409 | $ 7,050 |
Receivables - optical product purchasing organization | 8,434 | 7,556 |
Acquisition escrow receivable | 8,000 | 0 |
Other current assets | 10,777 | 9,399 |
Total | $ 34,620 | $ 24,005 |
Significant Accounting Polici47
Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Computer and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, and equipment useful life | 3 years |
Computer and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, and equipment useful life | 5 years |
Furniture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, and equipment useful life | 5 years |
Furniture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, and equipment useful life | 7 years |
Significant Accounting Polici48
Significant Accounting Policies - Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Intangible Assets [Line Items] | |||
Goodwill impairment | $ 0 | $ 0 | $ 581 |
Physician Income Guarantees | Minimum | |||
Intangible Assets [Line Items] | |||
Intangible asset useful life | 3 years | ||
Physician Income Guarantees | Maximum | |||
Intangible Assets [Line Items] | |||
Intangible asset useful life | 4 years | ||
Non-Compete Agreements | Minimum | |||
Intangible Assets [Line Items] | |||
Intangible asset useful life | 2 years | ||
Non-Compete Agreements | Maximum | |||
Intangible Assets [Line Items] | |||
Intangible asset useful life | 20 years | ||
Management Rights | |||
Intangible Assets [Line Items] | |||
Intangible asset useful life | 15 years | ||
Customer Relationships | Minimum | |||
Intangible Assets [Line Items] | |||
Intangible asset useful life | 3 years | ||
Customer Relationships | Maximum | |||
Intangible Assets [Line Items] | |||
Intangible asset useful life | 10 years |
Significant Accounting Polici49
Significant Accounting Policies - Restricted Invested Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted invested assets | $ 316 | $ 316 |
Chesterfield, Missouri facility | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted invested assets | $ 316 | $ 316 |
Significant Accounting Polici50
Significant Accounting Policies - Schedule of Other Long-Term Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Notes receivable | $ 212 | $ 182 |
Deposits | 2,475 | 2,196 |
Assets of SERP | 1,606 | 1,402 |
Other | 4,211 | 2,099 |
Total | $ 8,504 | $ 5,879 |
Significant Accounting Polici51
Significant Accounting Policies - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Other Liabilities, Current [Abstract] | ||
Interest payable | $ 5,410 | $ 7,027 |
Current taxes payable | 1,977 | 3,189 |
Insurance liabilities | 5,476 | 5,552 |
Third-party settlements | 5,222 | 11,708 |
Acquisition consideration payable | 16,768 | 0 |
Amounts due to patients and payors | 11,424 | 9,476 |
Other accrued expenses | 22,133 | 16,918 |
Total | $ 68,410 | $ 53,870 |
Significant Accounting Polici52
Significant Accounting Policies - Schedule of Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Aug. 31, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Facility lease obligations | $ 53,927 | $ 50,749 | |
Medical malpractice liability | 6,339 | 4,253 | |
Liability of SERP | 1,608 | 1,415 | |
Contingent consideration obligation | 14,049 | 13,009 | |
Acquisition consideration payable | 0 | 16,768 | |
Unfavorable lease liability | 1,996 | 2,427 | |
Other long-term liabilities | 7,694 | 1,989 | |
Total | 85,613 | 90,610 | |
Capital Leased Assets [Line Items] | |||
Capital lease obligations | 11,316 | 10,755 | |
Idaho Falls, Idaho, Surgical Hospital | |||
Capital Leased Assets [Line Items] | |||
Current portion of lease obligation | 797 | 568 | |
Capital lease obligations | 50,800 | $ 51,300 | |
Ocala, Florida | |||
Capital Leased Assets [Line Items] | |||
Current portion of lease obligation | 169 | ||
Capital lease obligations | 4,200 | ||
Transaction value of business disposition | $ 4,200 | ||
Non-current portion of lease obligation | $ 3,900 |
Significant Accounting Polici53
Significant Accounting Policies - Professional, General and Workers' Compensation Insurance (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Professional, general and workers' compensation insurance reserve | $ 9.5 | $ 7.4 |
Estimated insurance recoveries | $ 6.3 | $ 5 |
Significant Accounting Polici54
Significant Accounting Policies - Electronic Health Record Incentives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Electronic health records incentive income | $ (1,761) | $ (3,356) | $ 0 |
Acquisitions and Developments -
Acquisitions and Developments - 2015 Transactions (Details) - 12 months ended Dec. 31, 2015 $ in Millions | Entity | Anesthesia_Practice | surgical_facility | Practice | Physician | USD ($) | urgent_care_facility |
Business Acquisition [Line Items] | |||||||
Number of business entities acquired | Entity | 4 | ||||||
Number of physicians added to network | Physician | 17 | ||||||
Surgical Facility Acquisitions | |||||||
Business Acquisition [Line Items] | |||||||
Number of businesses acquired in new market | surgical_facility | 2 | ||||||
Number of businesses acquired in existing market | 4 | 3 | 1 | ||||
Business acquisition total purchase price | $ 84.2 | ||||||
Ancillary Services Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Business acquisition total purchase price | $ 40.4 | ||||||
Number of business entities acquired | Practice | 13 |
Acquisitions and Developments56
Acquisitions and Developments -Purchase Price Allocation (Details) - USD ($) $ in Thousands | Nov. 03, 2014 | Jun. 13, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Net assets acquired: | |||||
Excess of fair value over identifiable net assets acquired | $ 1,407,927 | $ 1,298,753 | $ 339,521 | ||
2015 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Cash consideration | 122,470 | ||||
Fair value of non-controlling interests | 13,842 | ||||
Aggregate fair value of acquisitions | 136,312 | ||||
Net assets acquired: | |||||
Cash and cash equivalents | 1,350 | ||||
Accounts receivable, net | 8,448 | ||||
Prepaid expenses and other current assets | 9,650 | ||||
Property and equipment | 3,293 | ||||
Intangible assets | 7,539 | ||||
Other long-term assets | 40 | ||||
Accounts payable | (5,391) | ||||
Current maturities of long-term debt | (226) | ||||
Long-term deferred tax liabilities | (1,836) | ||||
Long-term debt, less current maturities | (367) | ||||
Net assets acquired | 22,500 | ||||
Excess of fair value over identifiable net assets acquired | $ 113,812 | ||||
Symbion Holdings Corporation | |||||
Business Acquisition [Line Items] | |||||
Cash consideration | $ 298,857 | $ 792,000 | |||
Acquisition consideration payable | 16,768 | ||||
Fair value of non-controlling interests | 395,663 | ||||
Aggregate fair value of acquisitions | 711,288 | ||||
Net assets acquired: | |||||
Cash and cash equivalents | 40,374 | ||||
Accounts receivable, net | 79,830 | ||||
Inventories | 18,389 | ||||
Prepaid expenses and other current assets | 9,876 | ||||
Property and equipment | 153,179 | ||||
Investments in and advances to affiliates | 32,728 | ||||
Intangible assets | 31,534 | ||||
Restricted invested assets | 316 | ||||
Other long-term assets | 6,239 | ||||
Accounts payable | (20,419) | ||||
Accrued payroll and benefits | (14,600) | ||||
Other current liabilities | (47,229) | ||||
Current maturities of long-term debt | (83,805) | ||||
Long-term deferred tax liabilities | (19,853) | ||||
Long-term debt, less current maturities | (376,395) | ||||
Other long-term liabilities | (60,500) | ||||
Net assets acquired | (250,336) | ||||
Excess of fair value over identifiable net assets acquired | $ 961,624 |
Acquisitions and Developments57
Acquisitions and Developments - Acquisition of Symbion Narrative (Details) - USD ($) $ in Thousands | Nov. 03, 2014 | Jun. 13, 2014 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Oct. 07, 2015 | Jan. 27, 2014 | Apr. 11, 2013 |
Business Acquisition [Line Items] | |||||||||
Capitalized deferred financing costs | $ 4,246 | $ 5,630 | |||||||
Merger transaction and integration costs | 17,920 | 21,690 | $ 0 | ||||||
Loss on debt extinguishment | 16,102 | 23,414 | $ 9,863 | ||||||
Symbion Holdings Corporation | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration | $ 298,857 | $ 792,000 | |||||||
Aggregate fair value of acquisitions | 300,100 | ||||||||
Acquisition escrow deposit funded | 16,200 | ||||||||
Debt assumed for acquiree | 472,400 | ||||||||
Escrow amount distributed | $ 2,100 | ||||||||
Expected additional escrow account | 16,800 | ||||||||
Acquisition escrow deposit balance | 14,000 | ||||||||
Escrow disbursement received | 1,200 | ||||||||
Escrow amount payable | 30,800 | ||||||||
Acquisition related costs | 93,300 | ||||||||
Capitalized deferred financing costs | 5,300 | ||||||||
Business acquisition transaction costs | 21,700 | ||||||||
Debt instrument unamortized discount | 42,900 | ||||||||
Debt extinguishment costs | 23,400 | ||||||||
Goodwill, expected tax deductible amount | 142,500 | ||||||||
Payment in Kind (PIK) Note | Symbion Holdings Corporation | |||||||||
Business Acquisition [Line Items] | |||||||||
Debt instrument, stated rate | 8.00% | ||||||||
Line of Credit | |||||||||
Business Acquisition [Line Items] | |||||||||
Debt maximum borrowing capacity | 1,400,000 | $ 90,000 | $ 465,000 | ||||||
2014 First Lien Credit Agreement | Line of Credit | |||||||||
Business Acquisition [Line Items] | |||||||||
Debt maximum borrowing capacity | 870,000 | ||||||||
Debt instrument unamortized discount | 20,223 | 23,818 | |||||||
2014 Second Lien Credit Agreement | Line of Credit | |||||||||
Business Acquisition [Line Items] | |||||||||
Debt maximum borrowing capacity | 490,000 | ||||||||
Debt instrument unamortized discount | $ 8,159 | $ 18,184 | |||||||
2014 Revolver Loan | Line of Credit | |||||||||
Business Acquisition [Line Items] | |||||||||
Debt maximum borrowing capacity | $ 80,000 | $ 150,000 |
Acquisitions and Developments58
Acquisitions and Developments - Pro Forma Results (Details) - Symbion Holdings Corporation - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisition, Pro Forma Information [Abstract] | ||
Net revenues | $ 873,683 | $ 820,186 |
Net income | 31,557 | 42,714 |
Noncontrolling Interest | ||
Business Acquisition, Pro Forma Information [Abstract] | ||
Net income | 68,973 | 64,396 |
Parent | ||
Business Acquisition, Pro Forma Information [Abstract] | ||
Net income | $ (37,416) | $ (21,682) |
Acquisitions and Developments59
Acquisitions and Developments - Other Acquisitions (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015Entity | Dec. 31, 2014USD ($)Practice | Dec. 31, 2013USD ($) | |
Business Acquisition [Line Items] | |||
Number of business entities acquired | Entity | 4 | ||
Physician Practice | |||
Business Acquisition [Line Items] | |||
Number of business entities acquired | Practice | 3 | ||
Business acquisition total purchase price | $ 1,600 | ||
Specialty Pharmacy and Physician Practice | |||
Business Acquisition [Line Items] | |||
Business acquisition total purchase price | $ 417 | ||
Percentage of ownership interest acquired | 100.00% |
Divestitures (Details)
Divestitures (Details) - Disposed of by Sale $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($)surgical_facility | Dec. 31, 2013USD ($)surgical_facility | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of surgical facilities sold | surgical_facility | 3 | 2 |
Transaction value of business disposition | $ 10.9 | $ 1 |
Gain (loss) on disposition of business | $ 2.9 | $ (2.6) |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 254,788 | $ 230,703 |
Accumulated depreciation | (70,238) | (55,697) |
Property and equipment, net | 184,550 | 175,006 |
Carrying value of assets under capital lease | 12,300 | 13,300 |
Accumulated depreciation of assets under capital lease | 10,500 | 6,800 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 6,790 | 6,790 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 104,971 | 100,574 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 14,520 | 13,662 |
Computer and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 24,597 | 20,622 |
Medical equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 96,291 | 86,132 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 7,619 | $ 2,923 |
Goodwill and Intangible Asset62
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | $ 1,298,753 | $ 339,521 |
Acquisitions | 113,812 | 959,232 |
Divestitures | (8,399) | 0 |
Purchase price adjustments | 3,761 | 0 |
Goodwill, end of period | $ 1,407,927 | $ 1,298,753 |
Goodwill and Intangible Asset63
Goodwill and Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-lived assets: | |||
Intangible assets, beginning balance | $ 54,888 | $ 26,976 | |
Additions | 8,584 | 33,234 | |
Recruitment expense | (813) | (108) | |
Amortization | (9,091) | (5,214) | $ (4,900) |
Intangible assets, ending balance | 53,568 | 54,888 | 26,976 |
Physician Income Guarantees | |||
Finite-lived assets: | |||
Intangible assets, beginning balance | 973 | 0 | |
Additions | 1,052 | 1,081 | |
Recruitment expense | (813) | (108) | |
Amortization | 0 | 0 | |
Intangible assets, ending balance | 1,212 | 973 | 0 |
Management Rights | |||
Finite-lived assets: | |||
Intangible assets, beginning balance | 24,757 | 377 | |
Additions | 0 | 24,700 | |
Recruitment expense | 0 | 0 | |
Amortization | (1,731) | (320) | |
Intangible assets, ending balance | 23,026 | 24,757 | 377 |
Non-Compete Agreements | |||
Finite-lived assets: | |||
Intangible assets, beginning balance | 16,590 | 16,123 | |
Additions | 7,532 | 3,500 | |
Recruitment expense | 0 | 0 | |
Amortization | (5,551) | (3,033) | |
Intangible assets, ending balance | 18,571 | 16,590 | 16,123 |
Certificates of Need | |||
Finite-lived assets: | |||
Intangible assets, beginning balance | 3,711 | 0 | |
Additions | 0 | 3,711 | |
Recruitment expense | 0 | 0 | |
Amortization | 0 | 0 | |
Intangible assets, ending balance | 3,711 | 3,711 | 0 |
Customer Relationships | |||
Finite-lived assets: | |||
Intangible assets, beginning balance | 6,274 | 7,665 | |
Additions | 0 | 0 | |
Recruitment expense | 0 | 0 | |
Amortization | (1,338) | (1,391) | |
Intangible assets, ending balance | 4,936 | 6,274 | 7,665 |
Other | |||
Finite-lived assets: | |||
Intangible assets, beginning balance | 2,583 | 2,811 | |
Additions | 0 | 242 | |
Recruitment expense | 0 | 0 | |
Amortization | (471) | (470) | |
Intangible assets, ending balance | $ 2,112 | $ 2,583 | $ 2,811 |
Goodwill and Intangible Asset64
Goodwill and Intangible Assets - Future Amortization of Intangible Assets (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,016 | $ 9,707 |
2,017 | 8,220 |
2,018 | 6,316 |
2,019 | 5,764 |
2,020 | 2,616 |
Thereafter | 16,992 |
Total | $ 49,615 |
Goodwill and Intangible Asset65
Goodwill and Intangible Assets - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)reporting_unit | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Number of reporting units | reporting_unit | 6 | ||
Goodwill impairment | $ | $ 0 | $ 0 | $ 581 |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long-Term Debt (Details) - USD ($) | Nov. 03, 2014 | Dec. 31, 2015 | Oct. 07, 2015 | Dec. 31, 2014 | Jan. 27, 2014 | Apr. 11, 2013 | Apr. 10, 2013 |
Debt Instrument [Line Items] | |||||||
Total debt | $ 1,285,982,000 | ||||||
Capital lease obligations | 11,316,000 | $ 10,755,000 | |||||
Debt and capital lease obligations | 1,257,600,000 | 1,361,354,000 | |||||
Less: Current maturities | 27,272,000 | 22,088,000 | |||||
Total long-term debt | 1,230,328,000 | 1,339,266,000 | |||||
Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt maximum borrowing capacity | $ 1,400,000,000 | $ 90,000,000 | $ 465,000,000 | ||||
Subordinated Notes | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | 1,000,000 | 1,000,000 | |||||
Debt maximum borrowing capacity | $ 1,000,000 | $ 53,800,000 | |||||
Notes payable and secured loans | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | 40,615,000 | 31,600,000 | |||||
2014 Revolver Loan | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | 125,250,000 | 0 | |||||
Debt maximum borrowing capacity | 80,000,000 | $ 150,000,000 | |||||
2014 First Lien Credit Agreement | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | 841,078,000 | 846,183,000 | |||||
Debt issuance and discount | 20,223,000 | 23,818,000 | |||||
Debt maximum borrowing capacity | 870,000,000 | ||||||
2014 Second Lien Credit Agreement | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | 238,341,000 | 471,816,000 | |||||
Debt issuance and discount | $ 8,159,000 | $ 18,184,000 | |||||
Debt maximum borrowing capacity | 490,000,000 | ||||||
Symbion Holdings Corporation | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance and discount | 42,900,000 | ||||||
Repayments of debt | $ 440,000,000 |
Long-Term Debt - 2014 Revolver
Long-Term Debt - 2014 Revolver Loan (Details) - USD ($) $ in Thousands | Nov. 03, 2014 | Jan. 27, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Oct. 07, 2015 | Apr. 11, 2013 |
Debt Instrument [Line Items] | |||||||
Payments of debt issuance costs | $ 0 | $ 7,496 | $ 4,974 | ||||
Quarterly commitment fee percentage | 0.50% | ||||||
Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt maximum borrowing capacity | $ 1,400,000 | $ 90,000 | $ 465,000 | ||||
Payments of debt issuance costs | $ 2,900 | ||||||
2014 Revolver Loan | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt maximum borrowing capacity | 80,000 | $ 150,000 | |||||
Payments of debt issuance costs | 2,300 | ||||||
Accumulated amortization of deferred financing costs | $ 530 | 76 | |||||
Debt remaining borrowing capacity | $ 21,600 | ||||||
2014 Revolver Loan | Alternate Base Rate Loan | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, margin in addition to base rate | 3.25% | ||||||
2014 Revolver Loan | Alternate Base Rate Loan | Line of Credit | Federal Funds Effective Rate | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 0.50% | ||||||
2014 Revolver Loan | Alternate Base Rate Loan | Line of Credit | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 1.00% | ||||||
2014 Revolver Loan | Eurodollar Loan | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, margin in addition to base rate | 4.25% | ||||||
2014 First Lien Credit Agreement | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt maximum borrowing capacity | 870,000 | ||||||
Payments of debt issuance costs | 20,000 | $ 1,900 | |||||
Accumulated amortization of deferred financing costs | $ 306 | 41 | |||||
2014 First Lien Credit Agreement | Alternate Base Rate Loan | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, margin in addition to base rate | 3.25% | ||||||
2014 First Lien Credit Agreement | Alternate Base Rate Loan | Line of Credit | Federal Funds Effective Rate | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 0.50% | ||||||
2014 First Lien Credit Agreement | Alternate Base Rate Loan | Line of Credit | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 1.00% | ||||||
2014 First Lien Credit Agreement | Eurodollar Loan | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, margin in addition to base rate | 4.25% | ||||||
2014 Second Lien Credit Agreement | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt maximum borrowing capacity | 490,000 | ||||||
Payments of debt issuance costs | $ 13,600 | $ 1,100 | |||||
Accumulated amortization of deferred financing costs | $ 57 | $ 14 | |||||
2014 Second Lien Credit Agreement | Alternate Base Rate Loan | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, margin in addition to base rate | 6.50% | ||||||
2014 Second Lien Credit Agreement | Alternate Base Rate Loan | Line of Credit | Federal Funds Effective Rate | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 0.50% | ||||||
2014 Second Lien Credit Agreement | Alternate Base Rate Loan | Line of Credit | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 1.00% | ||||||
2014 Second Lien Credit Agreement | Eurodollar Loan | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, margin in addition to base rate | 7.50% |
Long-Term Debt - 2014 First Lie
Long-Term Debt - 2014 First Lien Credit Agreement (Details) - USD ($) $ in Thousands | Nov. 03, 2014 | Jan. 27, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Debt Instrument [Line Items] | |||||
Payments of debt issuance costs | $ 0 | $ 7,496 | $ 4,974 | ||
Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, threshold business days in certain condition to make mandatory interest payment | 5 days | ||||
Debt Instrument, number of days after each fiscal year in certain condition to make mandatory interest payment | 90 days | ||||
Debt issuance and discount | $ 1,400 | ||||
Payments of debt issuance costs | $ 2,900 | ||||
Debt interest expense | 380 | ||||
2014 First Lien Credit Agreement | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, threshold business days in certain condition to make mandatory interest payment | 5 days | ||||
Debt Instrument, number of days after each fiscal year in certain condition to make mandatory interest payment | 90 days | ||||
Debt issuance and discount | $ 4,400 | ||||
Payments of debt issuance costs | $ 20,000 | $ 1,900 | |||
Debt interest expense | 3,600 | ||||
Accumulated amortization of deferred financing costs | $ 306 | $ 41 | |||
2014 First Lien Credit Agreement | Alternate Base Rate Loan | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maximum base rate condition | 2.00% | ||||
2014 First Lien Credit Agreement | Alternate Base Rate Loan | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, margin in addition to base rate | 3.25% | ||||
2014 First Lien Credit Agreement | Alternate Base Rate Loan | Line of Credit | Federal Funds Effective Rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 0.50% | ||||
2014 First Lien Credit Agreement | Alternate Base Rate Loan | Line of Credit | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.00% | ||||
2014 First Lien Credit Agreement | Eurodollar Loan | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maximum base rate condition | 1.00% | ||||
2014 First Lien Credit Agreement | Eurodollar Loan | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maximum base rate condition | 1.00% | ||||
Debt instrument, margin in addition to base rate | 4.25% | ||||
Debt instrument, effective interest rate | 5.25% |
Long-Term Debt - 2014 Second Li
Long-Term Debt - 2014 Second Lien Credit Agreement (Details) - USD ($) $ in Thousands | Oct. 06, 2015 | Nov. 03, 2014 | Jan. 27, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 11, 2013 |
Debt Instrument [Line Items] | |||||||
Payments of debt issuance costs | $ 0 | $ 7,496 | $ 4,974 | ||||
Debt Instrument, Prepayment Penalty Amount | 7,305 | 0 | 0 | ||||
Loss on debt extinguishment | (16,102) | (23,414) | $ (9,863) | ||||
Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, period prepayment integral amount | 500 | ||||||
Debt instrument, minimum required periodic payment | $ 1,000 | ||||||
Debt maximum borrowing capacity | $ 1,400,000 | $ 90,000 | $ 465,000 | ||||
Debt instrument, threshold business days in certain condition to make mandatory interest payment | 5 days | ||||||
Debt Instrument, number of days after each fiscal year in certain condition to make mandatory interest payment | 90 days | ||||||
Debt issuance and discount | 1,400 | ||||||
Payments of debt issuance costs | $ 2,900 | ||||||
Debt interest expense | 380 | ||||||
2014 Second Lien Credit Agreement | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt maximum borrowing capacity | 490,000 | ||||||
Debt issuance and discount | 4,900 | ||||||
Payments of debt issuance costs | $ 13,600 | $ 1,100 | |||||
Debt interest expense | 1,700 | ||||||
Accumulated amortization of deferred financing costs | $ 57 | $ 14 | |||||
Debt instrument, prepayment of principle | $ 243,500 | ||||||
Repayment of Debt Instrument, Write-Off Discounts and Issuance Costs | 8,300 | ||||||
Repayment of Debt Instrument, Accrued Interest Paid | $ 65 | ||||||
Debt Instrument, Prepayment Penalty as Percentage of Aggregate Principal | 3.00% | ||||||
Debt Instrument, Prepayment Penalty Amount | $ 7,300 | ||||||
2014 Second Lien Credit Agreement | Alternate Base Rate Loan | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, maximum base rate condition | 2.00% | ||||||
Debt instrument, margin in addition to base rate | 6.50% | ||||||
2014 Second Lien Credit Agreement | Alternate Base Rate Loan | Line of Credit | Federal Funds Effective Rate | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 0.50% | ||||||
2014 Second Lien Credit Agreement | Alternate Base Rate Loan | Line of Credit | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 1.00% | ||||||
2014 Second Lien Credit Agreement | Eurodollar Loan | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, maximum base rate condition | 1.00% | ||||||
Debt instrument, effective interest rate | 8.50% | ||||||
Debt instrument, margin in addition to base rate | 7.50% |
Long-Term Debt - Summary of L70
Long-Term Debt - Summary of Long-term Debt Obligations (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Condensed Balance Sheet Statements, Captions [Line Items] | |
2,016 | $ 27,272 |
2,017 | 31,082 |
2,018 | 14,679 |
2,019 | 137,420 |
2,020 | 827,497 |
Thereafter | 248,032 |
Total debt | 1,285,982 |
Capital Lease Obligations | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
2,016 | 4,170 |
2,017 | 3,162 |
2,018 | 2,246 |
2,019 | 1,340 |
2,020 | 351 |
Thereafter | 47 |
Total debt | 11,316 |
Other Long-Term Debt | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
2,016 | 23,102 |
2,017 | 27,920 |
2,018 | 12,433 |
2,019 | 136,080 |
2,020 | 827,146 |
Thereafter | 247,985 |
Total debt | $ 1,274,666 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | Jan. 27, 2014USD ($) | Oct. 01, 2012 | Dec. 31, 2015USD ($)surgical_facilityPracticeLetters_of_Credit | Dec. 31, 2014USD ($)Letters_of_Credit | Dec. 31, 2013USD ($) | Dec. 31, 2011USD ($) | Oct. 07, 2015USD ($) | May. 31, 2015USD ($) | Nov. 03, 2014USD ($) | Jan. 01, 2014 | Apr. 11, 2013USD ($) | Apr. 10, 2013USD ($) |
Debt Instrument [Line Items] | ||||||||||||
Long-term debt, carrying value | $ 1,285,982,000 | |||||||||||
Payments of debt issuance costs | $ 0 | $ 7,496,000 | $ 4,974,000 | |||||||||
Quarterly commitment fee percentage | 0.50% | |||||||||||
Number of surgical facilities owned | surgical_facility | 101 | |||||||||||
Capital leased assets | $ 12,300,000 | 13,300,000 | ||||||||||
Surgical Facility Services | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of surgical facilities owned | Practice | 2 | |||||||||||
Term Loan A | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term debt, carrying value | $ 233,700,000 | |||||||||||
Original balance of debt | $ 240,000,000 | |||||||||||
Payments of debt issuance costs | 1,200,000 | 8,700,000 | ||||||||||
Debt interest expense | $ 58,000 | |||||||||||
Debt instrument, stated rate | 6.50% | |||||||||||
Quarterly principal payments | 600,000 | |||||||||||
Accumulated amortization of deferred financing costs | $ 417,000 | |||||||||||
2011 Revolving Loan | Revolving credit facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt maximum borrowing capacity | 20,000,000 | |||||||||||
Long-term debt, carrying value | 0 | |||||||||||
Original balance of debt | 30,000,000 | |||||||||||
Payments of debt issuance costs | 681,000 | $ 100,000 | ||||||||||
Accumulated amortization of deferred financing costs | $ 37,800 | |||||||||||
Term of loan | 5 years | |||||||||||
Quarterly commitment fee percentage | 0.50% | |||||||||||
Line of Credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt maximum borrowing capacity | $ 90,000,000 | $ 1,400,000,000 | 465,000,000 | |||||||||
Debt issuance and discount | 1,400,000 | |||||||||||
Payments of debt issuance costs | $ 2,900,000 | |||||||||||
Debt interest expense | $ 380,000 | |||||||||||
Line of Credit | Optical Services | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of line of credit facility | Letters_of_Credit | 2 | |||||||||||
Line of Credit | Surgical Facility Services | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of line of credit facility | Letters_of_Credit | 2 | |||||||||||
Line of Credit | Surgical Facility Services | Orlando, Florida | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt maximum borrowing capacity | $ 100,000 | |||||||||||
Line of Credit | Surgical Facility Services | Lubbock, Texas | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt maximum borrowing capacity | 1,000,000 | |||||||||||
Line of Credit | Revolving credit facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt maximum borrowing capacity | $ 150,000,000 | $ 80,000,000 | ||||||||||
Long-term debt, carrying value | 125,250,000 | $ 0 | ||||||||||
Payments of debt issuance costs | 2,300,000 | |||||||||||
Accumulated amortization of deferred financing costs | 530,000 | 76,000 | ||||||||||
Line of Credit | Letter of Credit One | Optical Services | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt maximum borrowing capacity | 200,000 | $ 500,000 | ||||||||||
Line of Credit | Letter of Credit Two | Optical Services | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt maximum borrowing capacity | 730,000 | |||||||||||
Line of Credit | Letter of Credit Related to Workers Compensation Self-insured Plan | Surgical Facility Services | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt maximum borrowing capacity | $ 835,000 | |||||||||||
Number of line of credit facility | Letters_of_Credit | 1 | |||||||||||
Subordinated Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt maximum borrowing capacity | 1,000,000 | $ 53,800,000 | ||||||||||
Long-term debt, carrying value | $ 1,000,000 | 1,000,000 | ||||||||||
Prepayment premium | 1,600,000 | |||||||||||
Unamortized debt issuance costs | 1,100,000 | |||||||||||
Debt instrument, stated rate | 17.00% | |||||||||||
Subordinated Notes | Subordinated Notes A | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term debt, carrying value | 1,000,000 | $ 52,800,000 | ||||||||||
Debt instrument, stated rate | 15.00% | |||||||||||
Quarterly interest payment in cash | 3.00% | 12.00% | ||||||||||
Percent of interest that can be added to unpaid principal as payment-in-kind or paid in cash | 3.00% | |||||||||||
Notes payable and secured loans | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long-term debt, carrying value | $ 40,615,000 | $ 31,600,000 |
Operating Leases (Details)
Operating Leases (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2015USD ($)Lease | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Operating Leased Assets [Line Items] | ||||
Number of operating leases terminated | Lease | 4 | |||
Liability accrued from terminating lease contracts | $ 4,600 | |||
Operating leases expense | $ 40,100 | $ 18,800 | $ 13,500 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
2,016 | 36,443 | |||
2,017 | 33,019 | |||
2,018 | 29,721 | |||
2,019 | 25,677 | |||
2,020 | 21,401 | |||
Thereafter | 110,131 | |||
Total minimum operating lease payments | 256,392 | |||
Operating Leases, Rent Expense, Net [Abstract] | ||||
2,016 | 1,043 | |||
2,017 | 1,101 | |||
2,018 | 1,137 | |||
2,019 | 658 | |||
2,020 | 468 | |||
Thereafter | 2,231 | |||
Total non-cancellable sub-lease income | 6,638 | |||
Operating lease agreements, with physician investors | ||||
Operating Leased Assets [Line Items] | ||||
Operating leases expense | $ 12,900 | $ 6,900 | $ 5,800 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||
Numerator: | |||||||||||||||
Net income (loss) attributable to Surgery Partners, Inc. | $ 16,739 | $ (3,122) | $ (5,426) | $ (6,762) | $ (54,264) | $ (6,908) | $ (606) | $ (4,119) | $ 1,429 | $ (65,897) | $ (9,062) | ||||
Denominator: | |||||||||||||||
Weighted average shares outstanding- basic | [1] | 36,066,233 | 32,295,364 | 31,815,520 | |||||||||||
Effect of dilutive securities | 1,398,154 | 0 | 0 | ||||||||||||
Weighted average shares outstanding- diluted | 37,464,387 | 32,295,364 | [1],[2] | 31,815,520 | [1],[2] | ||||||||||
Earnings (loss) per share: | |||||||||||||||
Basic (in USD per share) | $ 0.35 | $ (0.10) | $ (0.17) | $ (0.21) | $ (1.69) | $ (0.22) | $ (0.02) | $ (0.13) | $ 0.04 | $ (2.04) | $ (0.28) | ||||
Diluted (in USD per share) | $ 0.35 | $ (0.10) | $ (0.17) | $ (0.21) | $ (1.69) | $ (0.22) | $ (0.02) | $ (0.13) | $ 0.04 | [2] | $ (2.04) | [2] | $ (0.28) | [2] | |
[1] | Effect of the Reorganization, as defined in Note 1, has been retrospectively applied to all periods presented. | ||||||||||||||
[2] | The impact of potentially dilutive securities for the years ended December 31, 2014 and 2013 was not considered because the effect would be anti-dilutive in each of those periods. |
Income Taxes and Tax Receivab74
Income Taxes and Tax Receivable Agreement - Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 909 | 1,669 | 469 |
Deferred: | |||
Federal | (132,311) | 13,235 | 6,353 |
State | (17,580) | 854 | 748 |
Total income tax (benefit) expense | $ (148,982) | $ 15,758 | $ 7,570 |
Income Taxes and Tax Receivab75
Income Taxes and Tax Receivable Agreement - Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Tax (benefit) expense at U.S.federal statutory rate | $ (26,648) | $ (3,840) | $ 8,601 |
State income tax, net of U.S. federal tax benefit | 1,059 | 1,402 | 408 |
Change in valuation allowance | (137,721) | 29,336 | 4,067 |
Expiration of carryforwards and stock option forfeitures | 0 | 1,286 | 2,524 |
Net income attributable to non-controlling interests | (24,996) | (13,207) | (9,108) |
Changes in measurement of uncertain tax positions | (10) | 589 | 0 |
Nondeductible transaction costs | 3,442 | 4,230 | 0 |
Tax return reconciling differences | (1,574) | (4,419) | 836 |
Change in effective tax rate | (2,143) | ||
TRA liability | 39,428 | ||
Other | 181 | 381 | 242 |
Total income tax (benefit) expense | $ (148,982) | $ 15,758 | $ 7,570 |
Income Taxes and Tax Receivab76
Income Taxes and Tax Receivable Agreement - Approx. Tax Effects of Temporary Differences, Deferred Tax Asset and Liability (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Medical malpractice liability | $ 869 | $ 526 |
Accrued vacation and incentive compensation | 2,212 | 2,079 |
Net operating loss carryforwards | 146,663 | 123,709 |
Allowance for bad debts | 1,846 | 980 |
Basis differences of partnerships and joint ventures | 0 | 16,131 |
SERP liability | 685 | 527 |
Capital loss carryforwards | 2,052 | 3,513 |
Stock option compensation | 367 | 362 |
Deferred rent | 2,288 | 0 |
Deferred financing costs | 3,083 | 4,386 |
Audit and tax fee accruals | 242 | 760 |
FIN 48 liabilities | 244 | 440 |
TRA liability | 2,750 | 0 |
Other deferred assets | 1,748 | 1,597 |
Total gross deferred tax assets | 165,049 | 155,010 |
Less: Valuation allowance | (6,949) | (142,909) |
Total deferred tax assets | 158,100 | 12,101 |
Deferred tax liabilities: | ||
Depreciation on property and equipment | (806) | (1,050) |
Amortization of intangible assets | (16,083) | (16,159) |
Basis differences of partnerships and joint ventures | (46,494) | (43,195) |
Deferred rent | 0 | (515) |
Other deferred liabilities | (612) | (466) |
Total deferred tax liabilities | (63,995) | (61,385) |
Net deferred tax assets | $ 94,105 | |
Net deferred tax liabilities | $ (49,284) |
Income Taxes and Tax Receivab77
Income Taxes and Tax Receivable Agreement - Schedule of Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits at beginning of year | $ 2,755 | $ 0 |
Additions for tax positions acquired from Symbion | 0 | 1,766 |
Additions based on tax provisions related to the current year | 0 | 66 |
Additions for tax positions of prior years | 136 | 923 |
Reductions for tax positions of prior year | (996) | |
Settlements | (492) | |
Unrecognized tax benefits at end of year | $ 1,403 | $ 2,755 |
Income Taxes and Tax Receivab78
Income Taxes and Tax Receivable Agreement - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | |
Income Tax Contingency [Line Items] | ||||
Percentage of tax attributes required to pay shareholders prior to IPO | 85.00% | |||
Long-term tax receivable agreement liability | $ 119,655,000 | $ 0 | ||
Cash paid for income taxes | $ 1,093,000 | 676,000 | $ 538,000 | |
U.S. federal statutory rate | 35.00% | |||
Net current deferred tax asset | $ 0 | |||
Net current deferred tax liability | (114,000) | |||
Net deferred tax assets, noncurrent | 94,105,000 | |||
Net deferred tax liabilities, noncurrent | 0 | (49,170,000) | ||
Decrease in valuation allowance | 136,000,000 | |||
Valuation allowance | 6,949,000 | 142,909,000 | ||
Valuation allowance that if recognized, would credit directly to contributed capital | 2,100,000 | |||
Accrued interest and penalties related to uncertain tax positions | 322,000 | $ 357,000 | ||
Uncertain tax positions that would impact effective tax rate | 548,000 | |||
Capital Loss Carryforward | ||||
Income Tax Contingency [Line Items] | ||||
Capital loss carryforwards | 5,500,000 | |||
Credit Carryforward | ||||
Income Tax Contingency [Line Items] | ||||
Capital loss carryforwards | 632,000 | |||
Federal Tax Authority | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards | 360,300,000 | |||
State Tax Authority | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards | 495,900,000 | |||
Additional Paid-in Capital | ||||
Income Tax Contingency [Line Items] | ||||
Additional-paid-in-capital increase, due to tax effect of disposals of shares of noncontrolling interests | $ 1,500,000 | |||
LIBOR | ||||
Income Tax Contingency [Line Items] | ||||
Basis rate at which interest accrues | 300.00% |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 1,100 | |||
Equity-based compensation | $ 7,500 | $ 942 | $ 455 | |
2015 Omnibus Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares authorized under plan | 4,815,700 | |||
Shares available for future grant | 4,807,212 | |||
Restricted Share | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of additional instruments issued | 569,114 | 583,404 | 0 | |
Numbers of shares terminated | 0 | (127,582) | 0 | |
Accelerated vesting, shares | 1,632,626 | |||
Accelerated vesting, cost | $ 6,200 | |||
Symbion, Inc | B Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of additional instruments issued | 1,300,000 |
Equity-Based Compensation - Fai
Equity-Based Compensation - Fair Value Assumptions (Details) - Stock Option | 12 Months Ended |
Dec. 31, 2015$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |
Expected dividends | 0.00% |
Average expected term | 3 years |
Fair value of stock options granted | $ 4.83 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |
Expected volatility | 29.00% |
Risk-free interest rate | 0.90% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |
Expected volatility | 38.00% |
Risk-free interest rate | 1.36% |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Options Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Units | ||
Outstanding, beginning of period (in shares) | 0 | |
Granted (in shares) | 8,488 | |
Exercised (in shares) | 0 | |
Forfeited (in shares) | 0 | |
Outstanding, end of period (in shares) | 8,488 | 0 |
Weighted Average Exercise Price | ||
Granted (in dollars per share) | $ 20.03 | |
Outstanding, end of period (in dollars per share) | $ 20.03 | |
Weighted Average Remaining Contractual Term | 3 years | 3 years |
Outstanding options, exercisable (in shares) | 0 |
Equity-Based Compensation - S82
Equity-Based Compensation - Summary of Restricted Share Activity (Details) - Restricted Share - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Total Shares | |||
Outstanding, beginning of the period (in shares) | 2,887,150 | 3,234,664 | 3,234,664 |
Granted (in shares) | 569,114 | 583,404 | 0 |
Forfeited/Terminated (in shares) | 0 | (127,582) | 0 |
Purchased (in shares) | (11,742) | (803,336) | 0 |
Outstanding, end of the period (in shares) | 3,444,522 | 2,887,150 | 3,234,664 |
Vested Shares | |||
Outstanding, beginning of the period (in shares) | 3,276,868 | 1,645,085 | 1,788,780 |
Purchased (in shares) | (11,742) | (803,336) | 0 |
Vested (in shares) | 1,643,525 | 659,641 | 543,270 |
Outstanding, end of the period (in shares) | 1,645,085 | 1,788,780 | 1,245,510 |
Unvested Shares | |||
Outstanding, beginning of the period (in shares) | 1,242,065 | 1,445,884 | 1,989,154 |
Granted (in shares) | 569,114 | 583,404 | 0 |
Forfeited/Terminated (in shares) | 0 | (127,582) | 0 |
Vested (in shares) | (1,643,525) | (659,641) | (543,270) |
Outstanding, end of the period (in shares) | 167,654 | 1,242,065 | 1,445,884 |
Weighted-Average Grant Fair Value | |||
Outstanding, beginning of the period (in dollars per share) | $ 1.96 | $ 0.81 | $ 0.81 |
Granted (in dollars per share) | 6.31 | 6.44 | 0 |
Forfeited/Terminated (in dollars per share) | 0 | 1.27 | 0 |
Purchased (in dollars per share) | 6.31 | 3.64 | 0 |
Vested (in dollars per share) | 3.79 | 1.43 | 0.83 |
Outstanding, end of the period (in dollars per share) | $ 2.53 | $ 1.96 | $ 0.81 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Matching contribution expense | $ 2,200 | $ 754 | $ 516 |
Surgery Partners 401k Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contribution annual vesting percentage | 20.00% | ||
Percent of base pay employee may contribute to receive employer match | 6.00% | ||
Symbion Inc 401k Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contribution annual vesting percentage | 20.00% | ||
Supplemental Executive Retirement Savings Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percent of payroll employee may defer | 25.00% | ||
Percent of bonus employee may defer | 50.00% | ||
Percent of base pay employee may contribute to receive employer match | 2.00% | ||
Employer matching contribution percentage of employee base salary | 2.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 03, 2014 | May. 04, 2011 | |
Related Party Transaction [Line Items] | |||||
Advisory fees | $ 66,583 | $ 18,028 | $ 7,372 | ||
Bayside Capital, Inc. | Management and Investment Advisory Services Agreement | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Annual management fee per agreement with related party | $ 3,000 | $ 2,000 | |||
Advisory fees | $ 17,600 | 2,700 | |||
Termination of management agreement and IPO costs | $ 5,400 | $ 2,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Dec. 24, 2009USD ($)Entity | Dec. 31, 2010USD ($) | Dec. 31, 2015USD ($)Entity | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2010USD ($) | Jan. 01, 2014 | Jun. 10, 2013USD ($) | Aug. 04, 2011 |
Guarantor Obligations [Line Items] | |||||||||
Number of business entities acquired | Entity | 4 | ||||||||
Interest expense | $ (100,980) | $ (62,101) | $ (32,929) | ||||||
Indemnification receivable due from seller | 1,072 | 1,072 | |||||||
Business combination, accounts receivable recorded in excess of fair value | $ 14,000 | ||||||||
Amount entitle to receive for overstated net accounts receivable | 10,800 | ||||||||
2009 Acquisition | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Number of business entities acquired | Entity | 36 | ||||||||
Amount awarded to settle acquisition price adjustment | $ 589 | ||||||||
Maximum potential contingent consideration | $ 10,000 | ||||||||
Fair value of contingent consideration liability | 14,000 | 13,000 | |||||||
Escrow account | $ 2,900 | ||||||||
Amount of withdrawal notice to escrow deposit | $ 4,400 | ||||||||
Indemnification amount due to payor | 1,800 | 1,800 | |||||||
Amount entitle to recover for the indemnification claims | 454 | ||||||||
Amount offsetting contingent consideration | $ 8,300 | ||||||||
Subordinated Notes | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Promissory Note stated interest rate | 17.00% | ||||||||
Subordinated Notes | Promissory Notes | 2009 Acquisition | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Promissory Note stated interest rate | 8.00% | ||||||||
Interest expense | (1,000) | ||||||||
Operating Leases | Financial Guarantee | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Guaranteed operating lease payments | $ 160 | $ 539 | |||||||
Operating lease term | 10 years | 10 years |
Segment Reporting - Revenues by
Segment Reporting - Revenues by Reportable Segment (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of operating segments | segment | 3 | ||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 263,322 | $ 239,599 | $ 232,827 | $ 224,143 | $ 179,691 | $ 76,303 | $ 76,815 | $ 70,480 | $ 959,891 | $ 403,289 | $ 284,599 |
Surgical Facility Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 884,144 | 339,309 | 224,578 | ||||||||
Ancillary Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 61,175 | 49,787 | 44,103 | ||||||||
Optical Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 14,572 | $ 14,193 | $ 15,918 |
Segment Reporting - Segment Ope
Segment Reporting - Segment Operating Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||
General and administrative expenses | $ (55,992) | $ (31,452) | $ (26,339) |
Gain (loss) on disposal or impairment of long-lived assets, net | 2,097 | (1,804) | (2,482) |
Loss on debt extinguishment | (16,102) | (23,414) | (9,863) |
Merger transaction and integration costs | (17,920) | (21,690) | 0 |
Termination of management agreement and IPO costs | (5,834) | 0 | 0 |
Total operating income | 144,754 | 50,807 | 58,226 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Segment operating income | 242,047 | 130,864 | 97,846 |
Operating Segments | Surgical Facility Services | |||
Segment Reporting Information [Line Items] | |||
Segment operating income | 224,098 | 112,237 | 77,905 |
Operating Segments | Ancillary Services | |||
Segment Reporting Information [Line Items] | |||
Segment operating income | 15,666 | 16,389 | 16,909 |
Operating Segments | Optical Services | |||
Segment Reporting Information [Line Items] | |||
Segment operating income | 2,283 | 2,238 | 3,032 |
Corporate, Non-Segment | |||
Segment Reporting Information [Line Items] | |||
General and administrative expenses | $ (59,534) | $ (33,149) | $ (27,275) |
Segment Reporting - Supplementa
Segment Reporting - Supplemental Information by Reportable Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 34,545 | $ 15,061 | $ 11,663 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 31,003 | 13,364 | 10,727 |
Operating Segments | Surgical Facility Services | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 27,447 | 9,911 | 7,405 |
Operating Segments | Ancillary Services | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 1,934 | 1,812 | 1,460 |
Operating Segments | Optical Services | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 1,622 | 1,641 | 1,862 |
Corporate, Non-Segment | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 3,542 | $ 1,697 | $ 936 |
Segment Reporting - Assets by O
Segment Reporting - Assets by Operating Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Segment Reporting Information [Line Items] | ||
Assets | $ 2,106,684 | $ 1,858,794 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,906,131 | 1,735,120 |
Operating Segments | Surgical Facility Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,762,396 | 1,638,874 |
Operating Segments | Ancillary Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 118,198 | 70,370 |
Operating Segments | Optical Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 25,537 | 25,876 |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 200,553 | $ 123,674 |
Segment Reporting - Cash Purcha
Segment Reporting - Cash Purchases of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | $ 33,439 | $ 7,736 | $ 4,150 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | 27,902 | 6,527 | 3,024 |
Operating Segments | Surgical Facility Services | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | 26,723 | 5,158 | 2,301 |
Operating Segments | Ancillary Services | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | 1,051 | 1,034 | 562 |
Operating Segments | Optical Services | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | 128 | 335 | 161 |
Corporate, Non-Segment | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | $ 5,537 | $ 1,209 | $ 1,126 |
Quarterly Financial Informati91
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||
Revenues | $ 263,322 | $ 239,599 | $ 232,827 | $ 224,143 | $ 179,691 | $ 76,303 | $ 76,815 | $ 70,480 | $ 959,891 | $ 403,289 | $ 284,599 | |||
Cost of revenues | 183,174 | 168,821 | 161,558 | 155,773 | 120,587 | 45,377 | 45,164 | 43,050 | 669,326 | 254,178 | 169,844 | |||
Net income (loss) | 36,094 | 13,784 | 12,479 | 10,488 | (36,765) | 430 | 7,025 | 2,258 | 72,845 | (27,052) | 17,727 | |||
Net income attributable to non-controlling interests | (19,355) | (16,906) | (17,905) | (17,250) | (17,499) | (7,338) | (7,631) | (6,377) | (71,416) | (38,845) | (26,789) | |||
Net income (loss) attributable to Surgery Partners, Inc. | $ 16,739 | $ (3,122) | $ (5,426) | $ (6,762) | $ (54,264) | $ (6,908) | $ (606) | $ (4,119) | $ 1,429 | $ (65,897) | $ (9,062) | |||
Basic net income (loss) per share (in USD per share) | $ 0.35 | $ (0.10) | $ (0.17) | $ (0.21) | $ (1.69) | $ (0.22) | $ (0.02) | $ (0.13) | $ 0.04 | $ (2.04) | $ (0.28) | |||
Diluted net income (loss) per share (in USD per share) | $ 0.35 | $ (0.10) | $ (0.17) | $ (0.21) | $ (1.69) | $ (0.22) | $ (0.02) | $ (0.13) | $ 0.04 | [1] | $ (2.04) | [1] | $ (0.28) | [1] |
[1] | The impact of potentially dilutive securities for the years ended December 31, 2014 and 2013 was not considered because the effect would be anti-dilutive in each of those periods. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Feb. 01, 2016 | Feb. 29, 2016 | Dec. 31, 2015 |
Prepaid Expenses and Other Current Assets | |||
Subsequent Event [Line Items] | |||
Contingency consideration, asset | $ 8 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Contingency settled | $ 8 | ||
Business acquisition total purchase price | $ 3.9 |