Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 09, 2017 | |
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 | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 48,769,296 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 199,701 | |
Accounts receivable, less allowance for doubtful accounts of $2,045 and $29,872, respectively | 271,140 | |
Inventories | 44,523 | |
Prepaid expenses and other current assets | 53,724 | |
Acquisition escrow deposit | 4,571 | |
Total current assets | 573,659 | |
Property and equipment, net | 388,697 | |
Intangible assets, net | 56,507 | |
Goodwill | 3,270,309 | |
Investments in and advances to affiliates | 64,427 | |
Restricted invested assets | 315 | |
Long-term deferred tax assets | 209,207 | |
Long-term acquisition escrow deposit | 19,600 | |
Other long-term assets | 19,133 | |
Total assets | 4,601,854 | |
Current liabilities: | ||
Accounts payable | 73,251 | |
Accrued payroll and benefits | 42,439 | |
Acquisition escrow liability | 4,571 | |
Other current liabilities | 106,279 | |
Current maturities of long-term debt | 48,472 | |
Total current liabilities | 275,012 | |
Long-term debt, less current maturities | 2,144,862 | |
Long-term tax receivable agreement liability | 68,148 | |
Long-term acquisition escrow liability | 19,600 | |
Other long-term liabilities | 116,799 | |
Non-controlling interests—redeemable | 271,416 | |
Redeemable preferred stock - Series A, 310,000 shares authorized, issued and outstanding, redemption value of $326,882 at September 30, 2017; no shares were authorized issued or outstanding at December 31, 2016. | 326,882 | |
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 20,000,000 shares authorized, no shares issued or outstanding | 0 | |
Common stock, $0.01 par value, 300,000,000 shares authorized, 48,769,296 shares issued and outstanding at September 30, 2017; 48,488,616 shares issued and outstanding at December 31, 2016 | 488 | |
Additional paid-in capital | 704,054 | |
Retained deficit | (9,140) | |
Total Surgery Partners, Inc. stockholders' equity | 695,402 | |
Non-controlling interests—non-redeemable | 683,733 | |
Total stockholders' equity | 1,379,135 | |
Total liabilities and stockholders' equity | 4,601,854 | |
Predecessor | ||
Current assets: | ||
Cash and cash equivalents | $ 69,699 | |
Accounts receivable, less allowance for doubtful accounts of $2,045 and $29,872, respectively | 220,594 | |
Inventories | 28,777 | |
Prepaid expenses and other current assets | 32,014 | |
Acquisition escrow deposit | 10,871 | |
Total current assets | 361,955 | |
Property and equipment, net | 204,253 | |
Intangible assets, net | 48,023 | |
Goodwill | 1,555,204 | |
Investments in and advances to affiliates | 34,980 | |
Restricted invested assets | 315 | |
Long-term deferred tax assets | 83,793 | |
Long-term acquisition escrow deposit | 0 | |
Other long-term assets | 16,435 | |
Total assets | 2,304,958 | |
Current liabilities: | ||
Accounts payable | 49,766 | |
Accrued payroll and benefits | 29,273 | |
Acquisition escrow liability | 10,871 | |
Other current liabilities | 68,993 | |
Current maturities of long-term debt | 27,822 | |
Total current liabilities | 186,725 | |
Long-term debt, less current maturities | 1,414,421 | |
Long-term tax receivable agreement liability | 122,351 | |
Long-term acquisition escrow liability | 0 | |
Other long-term liabilities | 76,266 | |
Non-controlling interests—redeemable | 180,521 | |
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 20,000,000 shares authorized, no shares issued or outstanding | 0 | |
Common stock, $0.01 par value, 300,000,000 shares authorized, 48,769,296 shares issued and outstanding at September 30, 2017; 48,488,616 shares issued and outstanding at December 31, 2016 | 485 | |
Additional paid-in capital | 320,543 | |
Retained deficit | (311,351) | |
Total Surgery Partners, Inc. stockholders' equity | 9,677 | |
Non-controlling interests—non-redeemable | 314,997 | |
Total stockholders' equity | 324,674 | |
Total liabilities and stockholders' equity | 2,304,958 | |
Redeemable Preferred Stock | ||
Current liabilities: | ||
Redeemable preferred stock - Series A, 310,000 shares authorized, issued and outstanding, redemption value of $326,882 at September 30, 2017; no shares were authorized issued or outstanding at December 31, 2016. | $ 326,882 | |
Redeemable Preferred Stock | Predecessor | ||
Current liabilities: | ||
Redeemable preferred stock - Series A, 310,000 shares authorized, issued and outstanding, redemption value of $326,882 at September 30, 2017; no shares were authorized issued or outstanding at December 31, 2016. | $ 0 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Allowance for doubtful accounts | $ 3,690 | |
Redeemable preferred stock, redemption value | $ 326,882 | |
Preferred stock, par value (in USD per share) | $ 0.01 | |
Preferred stock, shares authorized (shares) | 20,000,000 | |
Preferred stock, shares issued (shares) | 0 | |
Preferred stock, shares outstanding (shares) | 0 | |
Common stock, par value (in USD per share) | $ 0.01 | |
Common stock, shares authorized (shares) | 300,000,000 | |
Common stock, shares issued (shares) | 48,769,296 | |
Common stock, shares outstanding (shares) | 48,769,296 | |
Predecessor | ||
Allowance for doubtful accounts | $ 29,872 | |
Preferred stock, par value (in USD per share) | $ 0.01 | |
Preferred stock, shares authorized (shares) | 20,000,000 | |
Preferred stock, shares issued (shares) | 0 | |
Preferred stock, shares outstanding (shares) | 0 | |
Common stock, par value (in USD per share) | $ 0.01 | |
Common stock, shares authorized (shares) | 300,000,000 | |
Common stock, shares issued (shares) | 48,488,616 | |
Common stock, shares outstanding (shares) | 48,488,616 | |
Redeemable Preferred Stock | ||
Redeemable preferred stock, shares authorized (shares) | 310,000 | |
Redeemable preferred stock, shares issued (shares) | 310,000 | |
Redeemable preferred stock, shares outstanding (shares) | 310,000 | |
Redeemable Preferred Stock | Predecessor | ||
Redeemable preferred stock, shares authorized (shares) | 0 | |
Redeemable preferred stock, shares issued (shares) | 0 | |
Redeemable preferred stock, shares outstanding (shares) | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Aug. 31, 2017 | Sep. 30, 2016 | Aug. 31, 2017 | Sep. 30, 2016 | ||
Revenues | $ 132,258 | |||||
Operating expenses: | ||||||
Salaries and benefits | 41,784 | |||||
Supplies | 35,028 | |||||
Professional and medical fees | 11,254 | |||||
Lease expense | 6,858 | |||||
Other operating expenses | 8,000 | |||||
Cost of revenues | 102,924 | |||||
General and administrative expenses | [1] | 7,777 | ||||
Depreciation and amortization | 3,330 | |||||
Provision for doubtful accounts | 3,690 | |||||
Income from equity investments | (712) | |||||
Loss on disposal or impairment of long-lived assets, net | 333 | |||||
Merger transaction and integration costs | 2,983 | $ 1,900 | $ 5,600 | $ 6,400 | ||
Loss on debt refinancing | 0 | |||||
Gain on litigation settlement | 0 | |||||
Gain on acquisition escrow release | 0 | |||||
Electronic health records incentive expense (income) | 7 | |||||
Other (income) expense | 0 | |||||
Total operating expenses | 120,332 | |||||
Operating income (loss) | 11,926 | |||||
Gain on amendment to tax receivable agreement | 1,098 | |||||
Tax receivable agreement expense | 0 | |||||
Interest expense, net | (15,883) | |||||
(Loss) income before income taxes | (2,859) | |||||
Income tax (benefit) expense | (211) | |||||
Net (loss) income | (2,648) | |||||
Less: Net income attributable to non-controlling interests | (6,492) | |||||
Net loss attributable to Surgery Partners, Inc. | $ (9,140) | |||||
Net loss per share attributable to common stockholders | ||||||
Basic (in USD per share) | [2] | $ (0.57) | ||||
Diluted (in USD per share) | [2],[3] | $ (0.57) | ||||
Weighted average common shares outstanding | ||||||
Basic (shares) | 48,314,746 | |||||
Diluted (shares) | [3] | 48,314,746 | ||||
Contingent acquisition expense | $ 605 | |||||
Predecessor | ||||||
Revenues | $ 174,079 | 282,682 | 748,615 | 839,437 | ||
Operating expenses: | ||||||
Salaries and benefits | 61,240 | 85,724 | 241,149 | 266,401 | ||
Supplies | 48,078 | 65,907 | 193,322 | 196,484 | ||
Professional and medical fees | 14,229 | 20,856 | 57,931 | 60,813 | ||
Lease expense | 9,203 | 13,204 | 36,503 | 38,712 | ||
Other operating expenses | 11,022 | 15,703 | 43,267 | 44,539 | ||
Cost of revenues | 143,772 | 201,394 | 572,172 | 606,949 | ||
General and administrative expenses | [1] | 12,601 | 14,985 | 46,797 | 42,205 | |
Depreciation and amortization | 7,599 | 9,713 | 30,124 | 28,984 | ||
Provision for doubtful accounts | 4,834 | 8,514 | 16,297 | 15,931 | ||
Income from equity investments | (896) | (1,167) | (3,148) | (3,007) | ||
Loss on disposal or impairment of long-lived assets, net | 114 | 572 | 1,715 | 1,697 | ||
Merger transaction and integration costs | 2,343 | 1,864 | 5,584 | 6,361 | ||
Loss on debt refinancing | 18,211 | 3,595 | 18,211 | 11,876 | ||
Gain on litigation settlement | 0 | 0 | (3,794) | 0 | ||
Gain on acquisition escrow release | (1,000) | 0 | (1,000) | 0 | ||
Electronic health records incentive expense (income) | (3) | 364 | (305) | 269 | ||
Other (income) expense | 0 | 0 | (2) | 97 | ||
Total operating expenses | 187,575 | 239,834 | 682,651 | 711,362 | ||
Operating income (loss) | (13,496) | 42,848 | 65,964 | 128,075 | ||
Gain on amendment to tax receivable agreement | 15,294 | 0 | 15,294 | 0 | ||
Tax receivable agreement expense | 0 | (3,733) | 0 | (3,733) | ||
Interest expense, net | (18,147) | (26,475) | (68,929) | (74,863) | ||
(Loss) income before income taxes | (16,349) | 12,640 | 12,329 | 49,479 | ||
Income tax (benefit) expense | (20,718) | (1,694) | (18,089) | 2,496 | ||
Net (loss) income | 4,369 | 14,334 | 30,418 | 46,983 | ||
Less: Net income attributable to non-controlling interests | (8,813) | (16,672) | (42,087) | (54,392) | ||
Net loss attributable to Surgery Partners, Inc. | $ (4,444) | $ (2,338) | $ (11,669) | $ (7,409) | ||
Net loss per share attributable to common stockholders | ||||||
Basic (in USD per share) | [2] | $ (0.09) | $ (0.05) | $ (0.24) | $ (0.15) | |
Diluted (in USD per share) | [2],[3] | $ (0.09) | $ (0.05) | $ (0.24) | $ (0.15) | |
Weighted average common shares outstanding | ||||||
Basic (shares) | 48,146,611 | 48,019,652 | 48,121,404 | 48,018,706 | ||
Diluted (shares) | [3] | 48,146,611 | 48,019,652 | 48,121,404 | 48,018,706 | |
Contingent acquisition expense | $ 1,210 | $ 1,530 | $ 5,057 | $ 3,060 | ||
[1] | Includes contingent acquisition compensation expense of $605,000 for the one month ended September 30, 2017 (Successor), $1.2 million and $5.1 million for the two and eight months ended August 31, 2017 (Predecessor), respectively, and $1.5 million and $3.1 million for the three and nine months ended September 30, 2016, respectively. | |||||
[2] | Includes the impact of amounts allocated to participating securities. See Note 6. "Earnings Per Share" for the calculation of net loss per share attributable to common stockholders. | |||||
[3] | The impact of potentially dilutive securities for all periods presented was not considered because the effect would be anti-dilutive in those periods. |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Aug. 31, 2017 | Sep. 30, 2016 | Aug. 31, 2017 | Sep. 30, 2016 | |
Net (loss) income | $ (2,648) | ||||
Other comprehensive income | 0 | ||||
Comprehensive (loss) income | (2,648) | ||||
Less: Comprehensive income attributable to non-controlling interests | (6,492) | ||||
Comprehensive loss attributable to Surgery Partners, Inc. | $ (9,140) | ||||
Predecessor | |||||
Net (loss) income | $ 4,369 | $ 14,334 | $ 30,418 | $ 46,983 | |
Other comprehensive income | 0 | 0 | 0 | 0 | |
Comprehensive (loss) income | 4,369 | 14,334 | 30,418 | 46,983 | |
Less: Comprehensive income attributable to non-controlling interests | (8,813) | (16,672) | (42,087) | (54,392) | |
Comprehensive loss attributable to Surgery Partners, Inc. | $ (4,444) | $ (2,338) | $ (11,669) | $ (7,409) |
Condensed Consolidated Stateme6
Condensed 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) (Predecessor) at Dec. 31, 2016 | 48,488,616 | 48,488,616 | |||
Beginning Balance, stockholders' equity (Predecessor) at Dec. 31, 2016 | $ 324,674 | $ 485 | $ 320,543 | $ (311,351) | $ 314,997 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | Predecessor | 20,803 | (11,669) | 32,472 | ||
Issuance of restricted stock, net of forfeitures (shares) | Predecessor | 355,607 | ||||
Issuance of restricted and unrestricted shares | Predecessor | 0 | $ 3 | (3) | ||
Equity-based compensation | Predecessor | 3,697 | 3,697 | |||
Cancellation of restricted shares (in shares) | Predecessor | (33,908) | ||||
Cancellation of restricted shares | Predecessor | (790) | (790) | |||
Acquisition of NSH | Predecessor | 172,645 | 172,645 | |||
Acquisition and disposal of shares of non-controlling interests, net | Predecessor | (2,146) | 3,483 | (5,629) | ||
Distributions to non-controlling interests—non-redeemable holders | Predecessor | (38,875) | (38,875) | |||
Ending Balance, stockholders' equity (shares) (Predecessor) at Aug. 31, 2017 | 48,810,315 | ||||
Ending Balance, stockholders' equity (shares) at Aug. 31, 2017 | 48,810,315 | ||||
Ending Balance, stockholders' equity (Predecessor) at Aug. 31, 2017 | 480,008 | $ 488 | 326,930 | (323,020) | 475,610 |
Ending Balance, stockholders' equity at Aug. 31, 2017 | 1,405,086 | $ 488 | 720,118 | 0 | 684,480 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net (loss) income | (3,702) | (9,140) | 5,438 | ||
Equity-based compensation | 1,683 | 1,683 | |||
Cancellation of restricted shares (in shares) | (41,019) | ||||
Preferred dividends | (2,633) | (2,633) | |||
Mark to redemption adjustment | (15,566) | (15,566) | |||
Acquisition and disposal of shares of non-controlling interests, net | (19) | 452 | (471) | ||
Distributions to non-controlling interests—non-redeemable holders | $ (5,714) | (5,714) | |||
Ending Balance, stockholders' equity (shares) at Sep. 30, 2017 | 48,769,296 | 48,769,296 | |||
Ending Balance, stockholders' equity at Sep. 30, 2017 | $ 1,379,135 | $ 488 | $ 704,054 | $ (9,140) | $ 683,733 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Aug. 31, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (2,648) | ||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 3,330 | ||
Amortization of debt issuance costs, discounts and premium | (103) | ||
Amortization of unfavorable lease liability | (27) | ||
Equity-based compensation | 1,683 | ||
Loss on disposal or impairment of long-lived assets, net | 333 | ||
Loss on debt refinancing | 0 | ||
Gain on amendment to tax receivable agreement | (1,098) | ||
Tax receivable agreement expense | 0 | ||
Deferred income taxes | (465) | ||
Provision for doubtful accounts | 3,690 | ||
(Income) loss from equity investments, net of distributions received | (203) | ||
Changes in operating assets and liabilities, net of acquisitions and divestitures: | |||
Accounts receivable | (2,795) | ||
Other operating assets and liabilities | (2,919) | ||
Net cash (used in) provided by operating activities | (1,222) | ||
Cash flows from investing activities: | |||
Purchases of property and equipment, net | (1,840) | ||
Payments for acquisitions, net of cash acquired | (1,163) | ||
Proceeds from divestitures | 0 | ||
Net cash used in investing activities | (3,003) | ||
Cash flows from financing activities: | |||
Principal payments on long-term debt | (3,609) | ||
Borrowings of long-term debt | 0 | ||
Payments of debt issuance costs | (4) | ||
Penalty on prepayment of debt | 0 | ||
Proceeds from preferred stock issuance | 0 | ||
Payments of stock issuance costs | 0 | ||
Distributions to non-controlling interest holders | (6,444) | ||
Receipts (payments) related to ownership transactions with non-controlling interest holders | 30 | ||
Financing lease obligation | (253) | ||
Other financing activities | 0 | ||
Net cash (used in) provided by financing activities | (10,280) | ||
Net (decrease) increase in cash and cash equivalents | (14,505) | ||
Cash and cash equivalents at beginning of period | 214,206 | ||
Cash and cash equivalents at end of period | 199,701 | $ 214,206 | |
Predecessor | |||
Cash flows from operating activities: | |||
Net (loss) income | 30,418 | $ 46,983 | |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 30,124 | 28,984 | |
Amortization of debt issuance costs, discounts and premium | 5,091 | 5,295 | |
Amortization of unfavorable lease liability | (217) | (323) | |
Equity-based compensation | 3,697 | 1,326 | |
Loss on disposal or impairment of long-lived assets, net | 1,715 | 1,697 | |
Loss on debt refinancing | 18,211 | 11,876 | |
Gain on amendment to tax receivable agreement | (15,294) | 0 | |
Tax receivable agreement expense | 0 | 3,733 | |
Deferred income taxes | (18,703) | 1,903 | |
Provision for doubtful accounts | 16,297 | 15,931 | |
(Income) loss from equity investments, net of distributions received | 489 | (138) | |
Changes in operating assets and liabilities, net of acquisitions and divestitures: | |||
Accounts receivable | 8,837 | (38,480) | |
Other operating assets and liabilities | (12,947) | 14,076 | |
Net cash (used in) provided by operating activities | 67,718 | 92,863 | |
Cash flows from investing activities: | |||
Purchases of property and equipment, net | (18,773) | (28,377) | |
Payments for acquisitions, net of cash acquired | (725,853) | (126,018) | |
Proceeds from divestitures | 70 | 0 | |
Net cash used in investing activities | (744,556) | (154,395) | |
Cash flows from financing activities: | |||
Principal payments on long-term debt | (1,164,237) | (453,957) | |
Borrowings of long-term debt | 1,805,966 | 580,945 | |
Payments of debt issuance costs | (58,591) | (14,296) | |
Penalty on prepayment of debt | 0 | (4,900) | |
Proceeds from preferred stock issuance | 310,000 | 0 | |
Payments of stock issuance costs | (18,347) | 0 | |
Distributions to non-controlling interest holders | (50,343) | (49,443) | |
Receipts (payments) related to ownership transactions with non-controlling interest holders | (1,518) | 1,105 | |
Financing lease obligation | (796) | (646) | |
Other financing activities | (789) | ||
Net cash (used in) provided by financing activities | 821,345 | 58,808 | |
Net (decrease) increase in cash and cash equivalents | 144,507 | (2,724) | |
Cash and cash equivalents at beginning of period | $ 214,206 | 69,699 | 57,933 |
Cash and cash equivalents at end of period | $ 214,206 | $ 55,209 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Surgery Partners, Inc. , a Delaware corporation (together with its subsidiaries, the “Company”), was formed on 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 indirect owner of the equity interests of Surgery Center Holdings, Inc. and has 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. 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 August 31, 2017, the Company completed its acquisition of NSH Holdco, Inc. (“NSH”). Pursuant to the terms of the Agreement and Plan of Merger, dated as of May 9, 2017, by and among the Company, SP Merger Sub, Inc., a wholly owned subsidiary of the Company, NSH, and IPC / NSH, L.P. (solely in its capacity as sellers’ representative), as amended by that certain Letter Amendment, dated as of July 7, 2017 (as amended, the “NSH Merger Agreement”), SP Merger Sub, Inc. merged with and into NSH with NSH continuing as the surviving corporation and a wholly owned subsidiary of Surgery Center Holdings, Inc. (the “NSH Merger”). Also on August 31, 2017, (i) the Company completed the sale and issuance of 310,000 shares of the Company's preferred stock, par value $0.01 per share, designated as 10.00% Series A Convertible Perpetual Participating Preferred Stock (the “Series A Preferred Stock”) to BCPE Seminole Holdings LP (“Bain”), an affiliate of Bain Capital Private Equity, at a purchase price of $1,000 per share in cash (the “Preferred Private Placement”) pursuant to the Securities Purchase Agreement, dated as of May 9, 2017, by and between the Company and Bain (the “Preferred Stock Purchase Agreement”), and (ii) Bain completed its purchase of 26,455,651 shares (the “Purchased Shares”) of the Company's common stock, par value $0.01 per share (the “Common Stock”) from H.I.G. Surgery Centers, LLC (“H.I.G.”) at a purchase price of $19.00 per share in cash (the “Private Sale”) pursuant to the Stock Purchase Agreement, dated as of May 9, 2017, by and among the Company, Bain, H.I.G. and H.I.G. Bayside Debt & LBO Fund II L.P. (for the purposes stated therein) (the “Common Stock Purchase Agreement” and together with the NSH Merger Agreement, the Preferred Stock Purchase Agreement and the other agreements and documents executed in connection therewith, including the TRA (as defined in Note 2. “Significant Accounting Policies - Income Taxes and Tax Receivable Agreement”), the “Transaction Agreements”). As of August 31, 2017, the Purchased Shares represented approximately 54.2% of the Company’s outstanding Common Stock. As a result of the Preferred Private Placement and the Private Sale, Bain became the controlling stockholder of the Company, holding Series A Preferred Stock and Common Stock that collectively represent approximately 65.7% of the voting power of all classes of capital stock of the Company as of August 31, 2017, and H.I.G. and its affiliated investment funds no longer own any capital stock of the Company. In connection with the change of control effected by the Preferred Private Placement and the Private Sale, the Company elected to apply “pushdown” accounting by applying the guidance in Accounting Standards Codification Topic ("ASC") 805, Business Combinations , including the recognition of the Company’s assets and liabilities at fair value as of August 31, 2017, and similarly recognizing goodwill calculated based on the terms of the transaction and the fair value of the new basis of net assets of the Company. Accordingly, the condensed consolidated financial statements of the Company for periods before and after August 31, 2017 reflect different bases of accounting, and the financial positions and results of operations of those periods are not comparable. Throughout the Company's condensed consolidated financial statements and the accompanying notes herein, periods prior to the change of control are identified as "Predecessor" and periods after the change of control are identified as "Successor." As of September 30, 2017 ( Successor ), the Company owned and operated a national network of surgical facilities and ancillary services in 32 states. The surgical facilities, which include ambulatory surgery centers ("ASCs") and surgical hospitals, primarily provide non-emergency surgical procedures across many specialties, including, among others, gastroenterology (" GI"), general surgery, ophthalmology, orthopedics 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 September 30, 2017 ( Successor ), the Company owned or operated a portfolio of 124 surgical facilities, comprised of 104 ASCs and 20 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 85 of the surgical facilities and consolidated 109 of these facilities for financial reporting purposes. In addition, the Company owned or operated a network of 60 physician practices. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Principles of Consolidation The condensed 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. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation of the Company's financial position and results of operations have been included. The Company’s fiscal year ends on December 31 and interim results are not necessarily indicative of results for a full year or any other interim period. The condensed consolidated balance sheet at December 31, 2016 ( Predecessor ) has been derived from the audited financial statements as of that date. The information contained in these condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended December 31, 2016 ( Predecessor ). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. 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 condensed 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 condensed consolidated statements of operations; changes in ownership interests in which the Company retains a controlling interest 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 condensed consolidated statements of cash flows. The condensed 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 partnership and limited liability company through which the Company owns and operates its surgical facilities is governed by a partnership or operating agreement, respectively. In certain circumstances, the applicable partnership or operating agreements for the Company's surgical facilities provide that the facilities will purchase all of the physician limited partners’ or physician minority members’, as applicable, ownership if certain adverse regulatory events occur, such as it becoming illegal for the physician(s) 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 condensed consolidated balance sheets. A summary of activity related to the non-controlling interests—redeemable follows (in thousands): Predecessor Balance at December 31, 2016 $ 180,521 Net income attributable to non-controlling interests—redeemable 9,615 Acquisition and disposal of shares of non-controlling interests, net—redeemable (3,323 ) Distributions to non-controlling interest—redeemable holders (11,468 ) Acquisition of NSH 153,320 Balance at August 31, 2017 $ 328,665 Successor Balance at September 1, 2017 $ 271,001 Net income attributable to non-controlling interests—redeemable 1,054 Acquisition and disposal of shares of non-controlling interests, net—redeemable 91 Distributions to non-controlling interest—redeemable holders (730 ) Balance at September 30, 2017 $ 271,416 Variable Interest Entities The condensed consolidated financial statements include the accounts of variable interest entities in which the Company is the primary beneficiary under the provisions of ASC 810, Consolidation . As of September 30, 2017 ( Successor ), the variable interest entities include five surgical facilities, three anesthesia practices and three physician practices. At December 31, 2016 ( Predecessor ), the variable interest entities included five surgical facilities, three anesthesia practices and two physician practices. The change is due to a physician practice acquired during the three months ended June 30, 2017 ( Predecessor ). The Company has the power to direct the activities that most significantly impact a variable interest entity's economic performance. Additionally, the Company would absorb the majority of the expected losses from any of these entities should such expected losses occur. As of September 30, 2017 ( Successor ) and December 31, 2016 ( Predecessor ), the condensed consolidated balance sheets of the Company included total assets of $90.1 million and $99.5 million , respectively, and total liabilities of $8.0 million and $10.7 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 condensed consolidated balance sheets was $64.4 million and $35.0 million as of September 30, 2017 ( Successor ) and December 31, 2016 ( Predecessor ), respectively. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed 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. 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 condensed 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): Successor Predecessor September 30, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value 2014 Revolver Loan $ — $ — $ 85,000 $ 85,000 2014 First Lien Credit Agreement, net of debt issuance costs and discount $ — $ — $ 911,784 $ 917,528 2017 Senior Secured Credit Facilities: Revolver $ — $ — $ — $ — Term Loan $ 1,283,626 $ 1,267,581 $ — $ — Senior Unsecured Notes due 2021 (1) $ 409,821 $ 429,288 $ 387,942 $ 412,189 Senior Unsecured Notes due 2025 $ 370,000 $ 346,413 $ — $ — (1) The carrying amount in the Predecessor period is net of unamortized debt issuance costs and discount, which were eliminated with the application of pushdown accounting. The fair values of the 2014 First Lien Credit Agreement, Term Loan, 2021 Unsecured Notes and the 2025 Unsecured Notes (in each case, as defined in Note 4. "Long-Term Debt") were based on a Level 2 computation using quoted prices for identical liabilities in inactive markets at September 30, 2017 ( Successor ) and December 31, 2016 ( Predecessor ), as applicable. The carrying amounts related to the Company's other long-term debt obligations, including the 2014 Revolver Loan and the Revolver (in each case, as defined in Note 4. "Long-Term Debt"), approximate their fair values. The Company maintains a supplemental executive retirement savings plan (the "SERP") for certain 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 September 30, 2017 ( Successor ) and December 31, 2016 ( Predecessor ), the fair value of the assets in the SERP were $1.8 million and $1.7 million , respectively, and were included in other long-term assets in the condensed consolidated balance sheets. The Company had a liability related to the SERP of $1.8 million and $1.7 million as of September 30, 2017 ( Successor ) and December 31, 2016 ( Predecessor ), respectively, which was included in other long-term liabilities in the condensed 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: Successor Predecessor Predecessor September 1 to September 30, July 1 to August 31, Three Months Ended September 30, January 1 to August 31, Nine Months Ended September 30, 2017 2017 2016 2017 2016 Patient service revenues: Surgical facilities revenues 94.0 % 95.5 % 90.4 % 91.4 % 90.6 % Ancillary services revenues 4.2 % 2.7 % 8.0 % 7.0 % 7.5 % 98.2 % 98.2 % 98.4 % 98.4 % 98.1 % Other service revenues: Optical services revenues 0.7 % 1.1 % 1.1 % 1.0 % 1.2 % Other 1.1 % 0.7 % 0.5 % 0.6 % 0.7 % 1.8 % 1.8 % 1.6 % 1.6 % 1.9 % Total revenues 100.0 % 100.0 % 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 two and eight months ended August 31, 2017 ( Predecessor ), 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 $630,000 , $1.1 million , respectively. There were no adjustments as a result of changes in estimates to third-party settlements related to prior years for the one month ended September 30, 2017 ( Successor ). 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): Successor Predecessor September 1 to September 30, July 1 to August 31, Three Months Ended September 30, 2017 2017 2016 Amount % Amount % Amount % Patient service revenues: Private insurance $ 72,930 56.2 % $ 80,166 46.9 % $ 140,637 50.6 % Government 46,162 35.5 % 73,734 43.1 % 111,929 40.2 % Self-pay 3,861 3.0 % 4,119 2.4 % 5,389 1.9 % Other (1) 6,883 5.3 % 12,909 7.6 % 20,240 7.3 % Total patient service revenues $ 129,836 100.0 % $ 170,928 100.0 % $ 278,195 100.0 % Other service revenues: Optical service revenues $ 888 $ 1,905 $ 3,203 Other revenues 1,534 1,246 1,284 Total net revenues $ 132,258 $ 174,079 $ 282,682 Successor Predecessor September 1 to September 30, January 1 to August 31, Nine Months Ended September 30, 2017 2017 2016 Amount % Amount % Amount % Patient service revenues: Private insurance $ 72,930 56.2 % $ 360,092 48.9 % $ 418,798 50.9 % Government 46,162 35.5 % 308,993 42.0 % 331,041 40.2 % Self-pay 3,861 3.0 % 15,949 2.2 % 13,814 1.7 % Other (1) 6,883 5.3 % 51,374 6.9 % 59,313 7.2 % Total patient service revenues $ 129,836 100.0 % $ 736,408 100.0 % $ 822,966 100.0 % Other service revenues: Optical service revenues $ 888 $ 7,629 $ 10,222 Other revenues 1,534 4,578 6,249 Total net revenues $ 132,258 $ 748,615 $ 839,437 (1) Other is comprised of anesthesia service agreements, auto liability, letters of protection and other payor types. 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. 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. 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. Subsequent to the Preferred Private Placement, the Company, as part of a review of operations undertaken to create a solid foundation to support the Company's long-term growth objectives, incurred a non-recurring adjustment to revenue of $15.6 million , which was attributable to an increase in reserves for certain accounts receivable during the two months ended August 31, 2017 ( Predecessor ). The increase in reserves resulted from certain known events and actions during the two months ended August 31, 2017 ( Predecessor ) related to select payors primarily in the Company’s ancillary services segment. Upon consideration of such additional information, related receivables were determined to have a low likelihood of collection. The majority of this adjustment related to receivables with balances from the first quarter of 2016 and prior. The Company believes it has accounted for all necessary reserve adjustments at this time. 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 September 30, 2017 ( Successor ), the Company had a net third-party Medicaid settlements liability of $1.4 million compared to a net third-party Medicaid settlements receivable of $454,000 at December 31, 2016 ( Predecessor ). 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 considered 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. 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 condensed consolidated balance sheets. Such receivables were $8.4 million and $7.0 million at September 30, 2017 ( Successor ) and December 31, 2016 ( Predecessor ), 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): Successor Predecessor September 30, December 31, Prepaid expenses $ 18,418 $ 11,158 Receivables - optical product purchasing organization 8,369 7,042 Insurance recoveries 2,837 2,476 Tax refund receivable 8,618 — Other current assets 15,482 11,338 Total $ 53,724 $ 32,014 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. A summary of property and equipment follows (in thousands): Successor Predecessor September 30, December 31, Land $ 20,880 $ 8,082 Buildings and improvements 181,237 118,172 Furniture and equipment 14,242 14,670 Computer and software 21,708 29,902 Medical equipment 140,198 117,418 Construction in progress 13,161 2,396 Property and equipment, at cost 391,426 290,640 Less: Accumulated depreciation (2,729 ) (86,387 ) Property and equipment, net $ 388,697 $ 204,253 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. The carrying values of assets under capital lease were $19.2 million and $15.4 million as of September 30, 2017 ( Successor ) and December 31, 2016 ( Predecessor ), respectively, net of accumulated depreciation of $0.7 million and $11.6 million , respectively. Intangible Assets 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 condensed 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 condensed consolidated statements of operations over the service lives of the agreements, typically ranging from two to five years for non-compete agreements and 15 years for the management rights agreements. Customer relationships are amortized into depreciation and amortization expense in the condensed consolidated statements of operations over the estimated lives of the relationships, ranging from three to ten years . A summary of the activity related to intangible assets for the period from January 1, 2017 to August 31, 2017 ( Predecessor ) and the period from September 1, 2017 to September 30, 2017 ( Successor ) follows (in thousands): Physician Income Guarantees Management Rights Non-Compete Agreements Certificates of Need Customer Relationships Other Total Intangible Assets Predecessor Balance at December 31, 2016 $ 813 $ 21,290 $ 16,457 $ 3,780 $ 3,704 $ 1,979 $ 48,023 Additions 445 26,900 92 745 — 130 28,312 Recruitment expense (380 ) — — — — — (380 ) Amortization — (1,154 ) (3,715 ) — (733 ) (438 ) (6,040 ) Balance at August 31, 2017 $ 878 $ 47,036 $ 12,834 $ 4,525 $ 2,971 $ 1,671 $ 69,915 Physician Income Guarantees Management Rights Non-Compete Agreements Certificates of Need Customer Relationships Other Total Intangible Assets Successor Balance at September 1, 2017 $ 878 $ 41,600 $ 8,024 $ 5,078 $ — $ 1,170 $ 56,750 Additions — — 41 25 — — 66 Recruitment expense (38 ) — — — — — (38 ) Amortization — (138 ) (84 ) — — (49 ) (271 ) Balance at September 30, 2017 $ 840 $ 41,462 $ 7,981 $ 5,103 $ — $ 1,121 $ 56,507 Goodwill Goodwill represents the fair value of the consideration provided in an acquisition over the fair value of net assets acquired and is not amortized. Additions to goodwill include amounts resulting from new business combinations and incremental ownership purchases in the Company's subsidiaries. A summary of activity related to goodwill for the period from January 1, 2017 to August 31, 2017 ( Predecessor ) and the period from September 1, 2017 to September 30, 2017 ( Successor ) follows (in thousands): Predecessor Balance at December 31, 2016 $ 1,555,204 Acquisitions 858,323 Divestitures (175 ) Purchase price adjustments 1,220 Balance at August 31, 2017 $ 2,414,572 Successor Balance at September 1, 2017 $ 3,269,225 Acquisitions 1,214 Divestitures — Purchase price adjustments (130 ) Balance at September 30, 2017 $ 3,270,309 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 in accordance with Accounting Standards Codification (ASC) 350, Intangibles- Goodwill and Other . 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. The Company tests its goodwill and intangible assets for impairment at least annually, or more frequently if certain indicators arise. Restricted Invested Assets Restricted invested assets of $315,000 as of both September 30, 2017 ( Successor ) and December 31, 2016 ( Predecessor ) 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): Successor Predecessor September 30, December 31, Notes receivable $ 2,853 $ 716 Deposits 2,794 4,196 Assets of SERP 1,804 1,725 Debt issuance costs — 1,488 Insurance recoverable 6,835 6,835 Other 4,847 1,475 Total $ 19,133 $ 16,435 Other Current Liabilities A summary of other current liabilities follows (in thousands): Successor Predecessor September 30, December 31, Interest payable $ 23,777 $ 19,206 Current taxes payable 6,731 2,622 Insurance liabilities 10,287 6,625 Amounts due to patients and payors 15,087 12,221 Tax receivable agreement liability 837 999 Contingent acquisition compensation liability 7,866 4,589 Contingent proceeds payable 8,618 — Other accrued expenses 33,076 22,731 Total $ 106,279 $ 68,993 Other Long-Term Liabilities A summary of other long-term liabilities follows (in thousands): Successor Predecessor September 30, December 31, Facility lease obligations $ 90,052 $ 52,653 Medical malpractice liability 13,453 10,453 Liability of SERP 1,804 1,725 Unfavorable lease liability 7,893 1,671 Other long-term liabilities 3,597 9,764 Total $ 116,799 $ 76,266 At four of the Company's surgical facilities, the Company has facility lease obligations payable to the lessor of each facility. Payments are allocated to principal adjustments of the lease obligations and interest expense. The current portions of the lease obligations were $1.5 million and $1.3 million at September 30, 2017 ( Successor ) and December 31, 2016 ( Predecessor ), respectively, and were included in other current liabilities in the condensed consolidated balance sheets. The long-term portions of the lease obligations, included in the table above, were $90.1 million and $52.7 million at September 30, 2017 ( Successor ) and December 31, 2016 ( Predecessor ), respectively. The increase is due to facility lease obligations assumed with the NSH Merger. 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 condensed 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 condensed consolidated balance sheets. 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. 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. In connection with the Reorganization, the Company’s board of directors and stockholders adopted the Surgery Partners, Inc. 2015 Omnibus Incentive Plan from which the Company’s future equity-based awards will be granted. 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. The reserves are estimated using individual case-basis valuations and actuarial analysis. Reserves for professional, general and workers' compensation claim liab |
Acquisitions and Developments
Acquisitions and Developments | 9 Months Ended |
Sep. 30, 2017 | |
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. Any goodwill recognized is determined as the excess of the fair value of the consideration conveyed plus the fair value of any non-controlling interests in the acquisition over the fair value of the net assets acquired. Acquisitions in which the Company is able to exert significant influence but does not have control are accounted for using the equity method. Acquired assets and assumed liabilities typically 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. Fair value attributable to non-controlling interests is 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 is 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 is based on Level 3 computations using key inputs such as the Company's internally-prepared financial projections. Fair values assigned to acquired working capital are based on carrying amounts reported by the acquiree at the date of acquisition, which approximate their fair values. 2017 Transactions Acquisition of NSH On August 31, 2017, the Company completed its acquisition of NSH through the NSH Merger, pursuant to the NSH Merger Agreement (as defined in Note 1. "Organization") for total cash consideration of $711.7 million , net of cash acquired, including $19.6 million funded to an escrow account. The NSH Merger added to the Company's portfolio 22 owned or operated surgical facilities, including 7 ASCs and 15 surgical hospitals, as well as complementary ancillary services. The proceeds from the Preferred Private Placement (as defined in Note 1. "Organization"), the 2025 Unsecured Notes and the 2017 Senior Secured Credit Facilities (in each case, as defined in Note 4. "Long-Term Debt") were used to fund the acquisition. Fees associated with the acquisition of NSH, which includes fees incurred related to the Company's preferred equity issuances and debt financings, was approximately $82.6 million during the two and eight months ended August 31, 2017 ( Predecessor ). Approximately $45.5 million was capitalized as deferred financing costs and discount, $18.3 million was capitalized as deferred equity issuance costs, $2.4 million was expensed as merger transaction and integration costs, and $16.4 million was recorded as loss on debt refinancing costs. All capitalized costs were subsequently written off as a result of the application of pushdown accounting, further discussed below. The total consideration related to the acquisition of NSH was allocated to the assets acquired and liabilities assumed based upon their respective fair values. The aggregate amounts preliminarily recognized as of the acquisition date for each major class of assets and liabilities are as follows (in thousands): Cash consideration $ 762,850 Fair value of non-controlling interests 325,965 Aggregate fair value of acquisition 1,088,815 Net assets acquired: Cash and cash equivalents 51,159 Accounts receivable 76,101 Inventories 14,986 Prepaid expenses and other current assets 18,007 Property and equipment 174,374 Intangible assets 27,741 Goodwill 845,185 Investments in and advances to affiliates 29,737 Long-term deferred tax assets 28,182 Acquisition escrow deposit 19,600 Other long-term assets 5,309 Accounts payable (29,652 ) Accrued payroll and benefits (27,313 ) Other current liabilities (18,355 ) Current maturities of long-term debt (16,416 ) Long-term debt, less current maturities (42,770 ) Acquisition escrow liability (19,600 ) Other long-term liabilities (47,460 ) Total fair value of net assets acquired 1,088,815 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. 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 intangible assets recognized. The preliminary estimated fair value assigned to goodwill is primarily attributable to synergies expected to arise as a result of the NSH Merger by enhancing the growth profile and diversity of the Company across the healthcare continuum. The entire amount of goodwill acquired in connection with the NSH Merger was allocated to the Company's surgical facility services operating segment. The total amount of the goodwill related to the NSH Merger that will be deductible for tax purposes is $153.5 million . The amounts of revenues and earnings of NSH for the one month ended September 30, 2017 ( Successor ) was $34.0 million and $3.4 million , respectively, and are included in revenues and net loss attributable to Surgery Partners, Inc., respectively, in the condensed consolidated statement of operations. The following pro forma combined summary of operations of the Company gives effect to using historical information of the operations of NSH as if the acquisition transaction had occurred as of January 1, 2016 (in thousands): Successor Predecessor Predecessor September 1 to September 30, July 1 to August 31, Three Months Ended September 30, January 1 to August 31, Nine Months Ended September 30, 2017 2017 2016 2017 2016 Net revenues $ 132,258 $ 267,013 $ 415,764 $ 1,122,326 $ 1,235,472 Net (loss) income (763 ) 13,331 28,304 63,269 82,275 Less: Net income attributable to non-controlling interests (6,492 ) (13,184 ) (25,207 ) (65,122 ) (78,356 ) Net (loss) income attributable to Surgery Partners, Inc. $ (7,255 ) $ 147 $ 3,097 $ (1,853 ) $ 3,919 These pro forma amounts exclude transaction related costs of $3.0 million and the gain on amendment to the TRA of $1.1 million for the one month ended September 30, 2017 ( Successor ), transaction related costs of $11.3 million , loss on debt refinancing of $18.2 million and the gain on amendment to the TRA of $15.3 million for the two months ended August 31, 2017 ( Predecessor ), transaction related costs of $5.7 million , loss on debt refinancing of $18.2 million and the gain on amendment to the TRA of $15.3 million for the eight months ended August 31, 2017 ( Predecessor ). The prior year pro forma amounts exclude the loss on debt refinancing of $3.6 million and $11.9 million for the three and nine months ended September 30, 2016 (Predecessor), respectively. Change of Control - Pushdown Accounting On August 31, 2017, H.I.G. sold the Purchased Shares (as defined in Note 1. "Organization") beneficially owned by H.I.G. to Bain at a purchase price per share of $19.00 for an aggregate purchase price of $502.7 million in cash pursuant to the Common Stock Purchase Agreement (as defined in Note 1. "Organization"). As of August 31, 2017, prior to giving effect to the Preferred Private Placement (as defined in Note 1. "Organization"), the Purchased Shares represented approximately 54.2% of the Company's outstanding Common Stock. As a result of the Private Sale and the Preferred Private Placement, Bain holds Series A Preferred Stock and Common Stock that collectively represented approximately 65.7% of the voting power of all classes of capital stock of the Company as of August 31, 2017, and H.I.G. and its affiliated investment funds no longer own any capital stock of the Company. Fees associated with the change of control include fees incurred related to the Preferred Private Placement. Refer to Note 6. "Redeemable Preferred Stock", for the amount and accounting treatment of these costs. In connection with the change of control, the Company elected to apply “pushdown” accounting by applying the guidance in Accounting Standards Codification Topic ("ASC") 805, Business Combinations . In accordance with ASC 805, all identifiable assets and liabilities of the Company were measured at and adjusted to fair value as of August 31, 2017, and similarly goodwill was recognized based on the terms of the transaction and the fair value of the new basis of the net assets of the Company. The aggregate amounts preliminarily recognized in connection with the application of pushdown accounting for each major class of assets and liabilities as of August 31, 2017 are as follows (in thousands): Equity attributable to Surgery Partners, Inc. 720,606 Redeemable preferred stock 310,000 Fair value of non-controlling interests 955,481 Aggregate fair value 1,986,087 Net assets: Cash and cash equivalents 214,206 Accounts receivable 257,373 Inventories 44,310 Prepaid expenses and other current assets 54,248 Acquisition escrow deposit 4,570 Property and equipment 386,086 Intangible assets 56,750 Goodwill 3,269,225 Investments in and advances to affiliates 64,243 Restricted invested assets 315 Long-term deferred tax asset 208,935 Long-term acquisition escrow deposit 19,600 Other long-term assets 19,427 Accounts payable (64,921 ) Accrued payroll and benefits (52,995 ) Acquisition escrow liability (4,570 ) Other current liabilities (83,317 ) Current maturities of long-term debt (49,942 ) Long-term debt, less current maturities (2,142,375 ) Long-term tax receivable agreement liability (78,498 ) Long-term acquisition escrow liability (19,600 ) Other long-term liabilities (116,983 ) Total fair value of net assets 1,986,087 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. 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 intangible assets recognized. Goodwill recognized in connection with the application of pushdown accounting was allocated to each reportable segment as follows: $3.084 billion to surgical facilities services, $152.1 million to ancillary services and $32.8 million to optical services. The total amount of the goodwill related to the application of pushdown accounting that will be deductible for tax purposes is $360.5 million . Other 2017 Acquisitions During the eight months ended August 31, 2017 ( Predecessor ), the Company completed acquisitions in existing markets of three physician practices for a combined cash purchase price of $14.2 million . In connection with these acquisitions the Company preliminarily recognized net assets of $1.1 million and goodwill of $13.1 million . The acquisitions were funded through cash from operations and proceeds from the 2014 Revolver Loan (as defined in Note 4. "Long-Term Debt"). During the one month ended September 30, 2017 ( Successor ), the Company completed acquisitions in existing markets of one physician practice and the assets of an endoscopy practice for a combined cash purchase price of $1.2 million . In connection with these acquisitions the Company preliminarily recognized net assets of $101,000 and goodwill of $1.2 million . The acquisitions were funded through cash from operations. The results of operations of the physician practices acquired are included in the Company’s results of operations beginning on the date of acquisition. 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. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt A summary of long-term debt follows (in thousands): Successor Predecessor September 30, December 31, 2014 Revolver Loan $ — $ 85,000 2014 First Lien Credit Agreement — 932,000 2017 Senior Secured Credit Facilities: Revolver — — Term Loan 1,283,626 — Senior Unsecured Notes due 2021 409,821 400,000 Senior Unsecured Notes due 2025 370,000 — Subordinated Notes — 1,000 Notes payable and secured loans 113,547 42,521 Capital lease obligations 16,340 13,996 Less: unamortized debt issuance costs and discount — (32,274 ) Total debt 2,193,334 1,442,243 Less: Current maturities 48,472 27,822 Total long-term debt $ 2,144,862 $ 1,414,421 2014 Revolver Loan & 2014 First Lien Credit Agreement On August 31, 2017 ( Predecessor ), the Company prepaid in full the outstanding principal of the 2014 Revolver Loan, a revolving credit facility entered into on November 3, 2014, and the 2014 First Lien Credit Agreement, a senior secured obligation of Surgery Center Holdings, Inc. entered into on November 3, 2014, with the proceeds from the 2017 Senior Secured Credit Facilities (as defined below). The total prepayment amount was $1.030 billion , which included $1.027 billion of outstanding principal and $3.0 million of accrued and unpaid interest, other fees and expenses. In connection with the prepayment, the Company recorded a loss on debt refinancing of $18.2 million for each of the two and eight month periods ending August 31, 2017 (Predecessor). The loss includes the partial write-off of unamortized debt issuance costs and discount related to the 2014 Revolver Loan and 2014 First Lien Credit Agreement and a portion of costs incurred with the 2017 Senior Secured Credit Facilities. 2014 Second Lien Credit Agreement On March 31, 2016, the Company prepaid in full the outstanding principal of the 2014 Second Lien Credit Agreement, plus accrued and unpaid interest, with the proceeds of the issuance of the 2021 Unsecured Notes, defined below. In connection with the prepayment, the Company recorded a loss on debt refinancing of $8.3 million , for the nine months ended September 30, 2016 ( Predecessor ). 2017 Senior Secured Credit Facilities On August 31, 2017 ( Predecessor ), SP Holdco I, Inc. and Surgery Center Holdings, Inc., each a wholly-owned subsidiary of the Company, entered into a credit agreement (the “Credit Agreement”) providing for a $1.290 billion senior secured term loan (the “Term Loan”) and a $75.0 million revolving credit facility (the “Revolver” and, together with the Term Loan, the “2017 Senior Secured Credit Facilities”). The Term Loan was fully drawn on August 31, 2017 ( Predecessor ) and the proceeds thereof were used to finance the consideration paid in the NSH Merger, to repay amounts outstanding under the Company’s then-existing 2014 First Lien Credit Agreement and 2014 Revolver Loan and amounts outstanding under the existing senior secured credit facilities of NSH, and to pay fees and expenses in connection with the foregoing and transactions related to the Transaction Agreements. The Revolver may be utilized for working capital, capital expenditures and general corporate purposes. Subject to certain conditions and requirements set forth in the Credit Agreement, the Company may request one or more additional incremental term loan facilities or one or more increases in the commitments under the Revolver. As of September 30, 2017 ( Successor ), the Company's availability on the Revolver was $71.9 million (including outstanding letters of credit of $3.1 million ) . The Term Loan will mature on August 31, 2024 (or, if at least 50.0% of the 2021 Unsecured Notes (as defined below) shall have not either been repaid or refinanced with permitted indebtedness having a maturity date not earlier than six months after the maturity date of the Term Loan by no later than October 15, 2020, then October 15, 2020). The Revolver will mature on August 31, 2022 (or, if at least 50.0% of the 2021 Notes have not either been repaid or refinanced with permitted indebtedness having a maturity date not earlier than six months after the maturity date of the Term Loan by no later than October 15, 2020, then October 15, 2020). Interest on the 2017 Senior Secured Credit Facilities shall bear interest at a rate per annum equal to (x) LIBOR plus a margin ranging from 3.00% to 3.25% per annum, depending on the Company's first lien net leverage ratio or (y) an alternate base rate (which will be the highest of (i) the prime rate, (ii) 0.5% per annum above the federal funds effective rate and (iii) one-month LIBOR plus 1.00% per annum (solely with respect to the Term Loan, the alternate base rate shall not be less than 2.00% per annum)) plus a margin ranging from 2.00% to 2.25% per annum. In addition, the Company is required to pay a commitment fee of 0.50% per annum in respect of unused commitments under the Revolver. The Term Loan amortizes in equal quarterly installments of 0.25% of the aggregate original principal amount of the Term Loan (such amortization payments will commence on or around the last business day of the fiscal quarter ending December 31, 2017). The Term Loan is subject to mandatory prepayments based on excess cash flow for the applicable fiscal year that will depend on the first lien net leverage ratio as of the last day of the applicable fiscal year, as well as upon the occurrence of certain other events, as described in the Credit Agreement. There were no excess cash flow payments required as of September 30, 2017 ( Successor ). With respect to the Revolver, the Company is required to comply with a maximum consolidated total net leverage ratio of 9.50 :1.00, which covenant will be tested quarterly on a trailing four quarter basis only if, as of the last day of the applicable fiscal quarter the Revolver is drawn in an aggregate amount greater than 35% of the total commitments under the Revolver. Such financial maintenance covenant is subject to an equity cure. The Credit Agreement includes customary negative covenants restricting or limiting the ability of the Company and its restricted subsidiaries, to, among other things, sell assets, alter its business, engage in mergers, acquisitions and other business combinations, declare dividends or redeem or repurchase equity interests, incur additional indebtedness or guarantees, make loans and investments, incur liens, enter into transactions with affiliates, prepay certain junior debt, and modify or waive certain material agreements and organizational documents, in each case, subject to customary and other agreed upon exceptions. The Credit Agreement also contains customary affirmative covenants and events of default. As of September 30, 2017 ( Successor ), the Company was in compliance with the covenants contained in the Credit Agreement. The 2017 Senior Secured Credit Facilities are guaranteed, on a joint and several basis, by SP Holdco I, Inc. and each of Surgery Center Holdings, Inc.'s current and future wholly-owned domestic restricted subsidiaries (subject to certain exceptions) (the “Subsidiary Guarantors”) and are secured by a first priority security interest in substantially all of Surgery Center Holdings, Inc.'s, SP Holdco I, Inc.'s and the Subsidiary Guarantors’ assets (subject to certain exceptions). In connection with the Term Loan and Revolver, the Company recorded debt issuance costs and discount of $18.8 million and $9.4 million , respectively, in the Predecessor period, which were eliminated with the application of pushdown accounting. Senior Unsecured Notes due 2021 Effective March 31, 2016 ( Predecessor ), Surgery Center Holdings, Inc., issued $400.0 million in gross proceeds of senior unsecured notes due April 15, 2021 (the "2021 Unsecured Notes"). The 2021 Unsecured Notes bear interest at the rate of 8.875% per year, payable semi-annually on April 15 and October 15 of each year. The 2021 Unsecured Notes are a senior unsecured obligation of Surgery Center Holdings, Inc. and are guaranteed on a senior unsecured basis by each of Surgery Center Holdings, Inc.'s existing and future domestic wholly owned restricted subsidiaries that guarantees the 2017 Senior Secured Credit Facilities (subject to certain exceptions). The Company may redeem up to 35% of the aggregate principal amount of the 2021 Unsecured Notes, at any time before April 15, 2018, with the net cash proceeds of certain equity offerings at a redemption price equal to 108.875% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the date of redemption, provided that at least 50% of the aggregate principal amount of the 2021 Unsecured Notes remain outstanding immediately after the occurrence of such redemption and such redemption occurs within 180 days of the date of the closing of any such qualified equity offering. The Company may redeem the 2021 Unsecured Notes, in whole or in part, at any time prior to April 15, 2018 at a price equal to 100.000% of the principal amount to be redeemed plus an applicable make-whole premium, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Company may redeem the 2021 Unsecured Notes, in whole or in part, at any time on or after April 15, 2018, at the redemption prices set forth below (expressed as a percentage of the principal amount to be redeemed), plus accrued and unpaid interest, if any, to the date of redemption: April 15, 2018 to April 14, 2019 106.656 % April 15, 2019 to April 14, 2020 104.438 % April 15, 2020 and thereafter 100.000 % If Surgery Center Holdings, Inc., experiences a change in control under certain circumstances, it must offer to purchase the notes at a purchase price equal to 101.000% of the principal amount, plus accrued and unpaid interest to, but excluding, the date of repurchase. The change of control as discussed in Note 1. "Organization", did not trigger repurchase. The 2021 Unsecured Notes contain customary affirmative and negative covenants, which among other things, limit the Company’s ability to incur additional debt, pay dividends, create or assume liens, effect transactions with its affiliates, guarantee payment of certain debt securities, sell assets, merge, consolidate, enter into acquisitions and effect sale and leaseback transactions. In connection with the offering of the 2021 Unsecured Notes, the Company recorded debt issuance costs of $8.4 million in the Predecessor period, which were eliminated with the application of pushdown accounting. Senior Unsecured Notes due 2025 Effective June 30, 2017 ( Predecessor ), SP Finco, LLC, a wholly owned subsidiary of Surgery Center Holdings, Inc., issued $370.0 million in gross proceeds of senior unsecured notes due July 1, 2025 (the "2025 Unsecured Notes"), which gross proceeds were deposited in an escrow account (the “Escrow Account”) established at Wilmington Trust, National Association (in such capacity, the “Escrow Agent”) in the name of the trustee under the indenture governing the 2025 Unsecured Notes (the “2025 Unsecured Notes Indenture”) on behalf of the holders of the 2025 Unsecured Notes. The 2025 Unsecured Notes bear interest at the rate of 6.750% per year, payable semi-annually on January 1 and July 1 of each year, commencing on January 1, 2018. In connection with the closing of the NSH Merger and the release of the proceeds from the Escrow Account, both of which occurred on August 31, 2017 ( Predecessor ), SP Finco, LLC merged with and into Surgery Center Holdings, Inc., with Surgery Center Holdings, Inc. surviving such merger and assuming, by operation of law, the rights and obligations of SP Finco, LLC under the 2025 Unsecured Notes and the indenture governing such notes. As of such time, the 2025 Unsecured Notes became guaranteed on a senior unsecured basis by each of Surgery Center Holdings, Inc.’s domestic wholly owned restricted subsidiaries that guarantees Surgery Center Holdings, Inc.’s senior secured credit facilities (subject to certain exceptions). The Company may redeem up to 40% of the aggregate principal amount of the 2025 Unsecured Notes at any time prior to July 1, 2020, with the net cash proceeds of certain equity issuances at a redemption price equal to 106.750% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the date of redemption, provided that at least 50% of the aggregate principal amount of the 2025 Unsecured Notes remain outstanding immediately after the occurrence of such redemption and such redemption occurs within 180 days of the date of the closing of the applicable equity offering. The Company may redeem the 2025 Unsecured Notes, in whole or in part, at any time prior to July 1, 2020, at a price equal to 100.000% of the principal amount to be redeemed plus the applicable premium, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Company may redeem the 2025 Unsecured Notes, in whole or in part, at any time on or after July 1, 2020, at the redemption prices set forth below (expressed as a percentage of the principal amount to be redeemed), plus accrued and unpaid interest, if any, to, but excluding, the date of redemption: July 1, 2020 to June 30, 2021 103.375 % July 1, 2021 to June 30, 2022 101.688 % July 1, 2022 and thereafter 100.000 % If Surgery Center Holdings, Inc. experiences a change in control under certain circumstances, it must offer to purchase the 2025 Unsecured Notes at a purchase price equal to 101.000% of the principal amount, plus accrued and unpaid interest to, but excluding, the date of repurchase. The 2025 Unsecured Notes contain customary affirmative and negative covenants, which, among other things, limit the Company’s ability to incur additional debt, pay dividends, create or assume liens, effect transactions with its affiliates, guarantee payment of certain debt securities, sell assets, merge, consolidate, enter into acquisitions and effect sale and leaseback transactions. In connection with the offering of the 2025 Unsecured Notes, the Company recorded debt issuance costs of $17.3 million in the Predecessor period, which were eliminated with the application of pushdown accounting. Subordinated Notes On August 3, 2017 the Company redeemed in whole a subordinated debt facility of $1.0 million with a maturity date of August 4, 2017 and an interest rate of 17.00% per annum, at a price equal 100% of the $1.0 million principal amount redeemed, plus accrued and unpaid interest. 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 September 30, 2017 ( Successor ), the Company was in compliance with its covenants contained in the credit agreements. The Company and its subsidiaries had notes payable to financial institutions of $113.5 million and $42.5 million as of September 30, 2017 ( Successor ) and December 31, 2016 ( Predecessor ), respectively. The Company and its subsidiaries also provide a corporate guarantee of certain indebtedness of the Company’s subsidiaries. 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 $19.2 million and $15.4 million as of September 30, 2017 ( Successor ) and December 31, 2016 ( Predecessor ), respectively. |
Redeemable Preferred Stock
Redeemable Preferred Stock | 9 Months Ended |
Sep. 30, 2017 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Preferred Stock | Redeemable Preferred Stock On August 31, 2017, the Company issued 310,000 shares of Series A Preferred Stock to Bain at a purchase price of $1,000 per share for an aggregate purchase price of $310.0 million . The net proceeds from the Preferred Private Placement (as defined in Note 1. "Organization") were used to finance a portion of the NSH Merger. The accrued value of the Series A Preferred Stock is convertible into shares of Common Stock at a price per share of Common Stock equal to $19.00 , subject to certain adjustments as provided in the Certificate of Designations, Preferences, Rights and Limitations of the 10.00% Series A Convertible Perpetual Participating Preferred Stock of Surgery Partners, Inc. (the “Series A Certificate of Designation”), at any time at the option of the holder. In addition, the Company may require the conversion of all, but not less than all, of the Series A Preferred Stock pursuant to the terms and conditions of the Series A Certificate of Designation, after the second anniversary of the date of issuance, if the volume weighted average closing price of the Common Stock for any twenty out of thirty consecutive trading days prior to such date, equals or exceeds $42.00 per share. The Company cannot redeem the Series A Preferred Stock prior to the fifth anniversary of its issuance and thereafter, may redeem all, but not less than all, of the Series A Preferred Stock for cash pursuant to and subject to the terms and conditions of the Series A Certificate of Designation. The holders of Series A Preferred Stock may cause the Company to redeem the Series A Preferred Stock upon the occurrence of certain change of control transactions of the Company or the Common Stock ceasing to be listed or quoted on a trading market. The Company adjusts the carrying amount of the Series A Preferred Stock to equal the redemption value at the end of each reporting period as if it were also the redemption date. Changes in the redemption value are recognized immediately as they occur. The Series A Preferred Stock ranks senior to the Common Stock and any other capital stock of the Company with respect to dividends, redemption and any other rights upon the liquidation, dissolution or winding up of the Company, and the holders thereof are entitled to vote with the holders of Common Stock, together as a single class, on all matters submitted to a vote of the Company’s stockholders. In addition to participating in any dividends that may be declared with respect to the Common Stock on an as-converted basis, each share of Series A Preferred Stock accrues dividends daily at a dividend rate of 10.00% , compounding quarterly, and in any given quarter, subject to certain conditions, the Board of Directors of the Company may declare a cash dividend in an amount up to 50% of the amount of the dividend that has accrued and accumulated during such quarter through the end of such quarter, and the amount of any quarterly dividend paid in cash shall not compound on the applicable date and shall not be included in the accrued value of the Series A Preferred Stock. In the event of the Company’s liquidation, dissolution or winding-up (whether voluntary of involuntary), holders of Series A Preferred Stock will be entitled to receive out of the assets of the Company available for distribution to shareholders, after satisfaction of any liabilities and obligations to creditors of the Company, with respect to each Series A Preferred Share, an amount equal to the greater of (i) $1,000.00 per share, plus dividends compounded to date, plus dividends accrued but not yet compounded and (ii) the amount that a holder of one share of Common Stock would receive, assuming the Series A Preferred Stock had converted into shares of Common Stock. In connection with the issuance of Series A Preferred Stock in the Preferred Private Placement, the Company incurred issuance costs of $18.3 million in the Predecessor period, which were eliminated with the application of pushdown accounting. A summary of activity related to the redeemable preferred stock for the period from September 1, 2017 to September 30, 2017 (Successor) follows (in thousands): Successor Balance at September 1, 2017 $ 310,000 Dividends accrued 2,633 Cash dividends declared (1,316 ) Mark to redemption adjustment 15,566 Balance at September 30, 2017 $ 326,882 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
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. Beginning in the Successor period, in connection with the issuance of the Series A Preferred Stock, the Company began computing basic and diluted earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation method that determines earnings per share for common shares and participating securities according to their participation rights in dividends and undistributed earnings. Refer to Note 5. "Redeemable Preferred Stock", for further disclosure of the terms and conditions, including the participation rights, of the Series A Preferred Stock. A reconciliation of the numerator and denominator of basic and diluted earnings per share for the period from January 1, 2017 to August 31, 2017 (Predecessor) and the period from September 1, 2017 to September 30, 2017 (Successor) follows (in thousands except share and per share amounts): Successor Predecessor Predecessor September 1 to September 30, July 1 to August 31, Three Months Ended September 30, January 1 to August 31, Nine Months Ended September 30, 2017 2017 2016 2017 2016 Numerator: Net loss attributable to Surgery Partners, Inc. $ (9,140 ) $ (4,444 ) $ (2,338 ) $ (11,669 ) $ (7,409 ) Less: amounts allocated to participating securities (1) 2,633 — — — — Less: mark to redemption adjustment 15,566 — — — — Net loss attributable to common stockholders $ (27,339 ) $ (4,444 ) $ (2,338 ) $ (11,669 ) $ (7,409 ) Denominator: Weighted average shares outstanding- basic 48,314,746 48,146,611 48,019,652 48,121,404 48,018,706 Effect of dilutive securities (2) — — — — — Weighted average shares outstanding- diluted 48,314,746 48,146,611 48,019,652 48,121,404 48,018,706 Loss per share: Basic $ (0.57 ) $ (0.09 ) $ (0.05 ) $ (0.24 ) $ (0.15 ) Diluted (2) $ (0.57 ) $ (0.09 ) $ (0.05 ) $ (0.24 ) $ (0.15 ) Dilutive securities outstanding not included in the computation of (loss) earnings per share as their effect is antidilutive: Stock options — — 586 — 345 Restricted shares 112,529 34,506 369,545 105,944 337,915 Convertible preferred stock — N/A N/A N/A N/A (1) Amounts allocated to participating securities includes dividends accrued during the Successor period for the Series A Preferred Stock. The Series A Preferred Stock does not participate in undistributed losses. There were no participating securities during the Predecessor periods. (2) The impact of potentially dilutive securities for all periods presented was not considered because the effect would be anti-dilutive in each period. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 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 position, results of operations or liquidity. 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 position, results of operations or liquidity. In addition, on October 23, 2017, the Company received a civil investigative demand (“CID”) from the federal government under the False Claims Act (“FCA”) for documents and information dating back to January 1, 2010 relating to the medical necessity of certain drug tests conducted by the Company’s physicians and submitted to laboratories owned and operated by the Company. The Company intends to respond to the CID and cooperate with the U.S. Attorney’s Office in connection with the FCA investigation. 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 36 business entities in various Florida locations which operate freestanding ASCs and provided anesthesia and pain management services (“the 2009 Acquisition”). 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 remains outstanding due to ongoing litigation as a result of a civil claim. The Company has made indemnification claims against the seller exceeding the amount of the contingent consideration liability, which the Company has a contractual right of offset against. Based on a court order in December 2016, the Company removed the contingent consideration liability on its consolidated balance sheets at December 31, 2016 ( Predecessor ). On April 20, 2017, a settlement was reached between the two parties resulting in the Company receiving $3.9 million of which $2.7 million was paid from the escrow funds set up at the time of purchase and $1.2 million was paid by the seller. During the second quarter ( Predecessor ) the Company recorded a gain on litigation settlement of $3.8 million for the settlement amount, net of legal costs. In connection with an acquisition during the three months ended June 30, 2016, pursuant to the applicable purchase agreement, the Company must pay consideration to the prior owners of the applicable facility should the requirements for continuing employment agreed to in the purchase agreement be met. As of September 30, 2017 ( Successor ), the Company estimates it may have to pay $15.7 million in future contingent acquisition compensation expense over the remaining performance periods. The contingent acquisition compensation expense is recognized as a component of general and administrative expense in the condensed consolidated statements of operations and was $1.2 million and $5.1 million for the two and eight months ended August 31, 2017 ( Predecessor ), respectively and $605,000 for the one month ended September 30, 2017 ( Successor ). For the prior year, contingent acquisition compensation expense was $1.5 million and $3.1 million for the three and nine months ended September 30 2016, respectively. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2017 | |
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. "All other" primarily consists of the Company's corporate general and administrative functions. Adjusted EBITDA is the primary profit/loss metric reviewed by the CODM in making key business decisions and on allocation of resources. The segment disclosures below provide a reconciliation from Adjusted EBITDA to income before income taxes, its most directly comparable GAAP financial measure, in the reported condensed consolidated financial information. The following tables present financial information for each reportable segment (in thousands): Successor Predecessor Predecessor September 1 to September 30, July 1 to August 31, Three Months Ended September 30, January 1 to August 31, Nine Months Ended September 30, 2017 2017 2016 2017 2016 Revenues: Surgical facility services $ 125,595 $ 167,765 $ 256,795 $ 688,725 $ 766,248 Ancillary services 5,775 4,409 22,684 52,261 62,967 Optical services 888 1,905 3,203 7,629 10,222 Total revenues $ 132,258 $ 174,079 $ 282,682 $ 748,615 $ 839,437 Successor Predecessor Predecessor September 1 to September 30, July 1 to August 31, Three Months Ended September 30, January 1 to August 31, Nine Months Ended September 30, 2017 2017 2016 2017 2016 Adjusted EBITDA: Surgical facility services $ 20,947 $ 27,726 $ 53,347 $ 125,912 $ 153,318 Ancillary services (1,265 ) (10,737 ) 2,573 (6,526 ) 9,141 Optical services 193 555 1,276 2,214 3,004 All other (5,033 ) (9,142 ) (12,448 ) (36,036 ) (36,258 ) Total Adjusted EBITDA (1) 14,842 8,402 44,748 85,564 129,205 Net income attributable to non-controlling interests 6,492 8,813 16,672 42,087 54,392 Depreciation and amortization (3,330 ) (7,599 ) (9,713 ) (30,124 ) (28,984 ) Interest expense, net (15,883 ) (18,147 ) (26,475 ) (68,929 ) (74,863 ) Non-cash stock compensation expense (1,683 ) (1,628 ) (691 ) (3,697 ) (1,326 ) Contingent acquisition compensation expense (605 ) (1,210 ) (1,530 ) (5,057 ) (3,060 ) Merger transaction, integration and practice acquisition costs (2) (3,457 ) (2,949 ) (2,471 ) (7,677 ) (8,579 ) Gain on litigation settlement — — — 3,794 — Gain on acquisition escrow release — 1,000 — 1,000 — Loss on disposal or impairment of long-lived assets, net (333 ) (114 ) (572 ) (1,715 ) (1,697 ) Gain on amendment to tax receivable agreement 1,098 15,294 — 15,294 — Tax receivable agreement expense — — (3,733 ) — (3,733 ) Loss on debt refinancing — (18,211 ) (3,595 ) (18,211 ) (11,876 ) (Loss) income before income taxes $ (2,859 ) $ (16,349 ) $ 12,640 $ 12,329 $ 49,479 (1) The above table reconciles Adjusted EBITDA to income before income taxes as reflected in the unaudited condensed consolidated statements of operations. When the Company uses the term “Adjusted EBITDA,” it is referring to income before income taxes minus (a) net income attributable to non-controlling interests plus (b) depreciation and amortization, (c) interest expense, net, (d) non-cash stock compensation expense, (e) contingent acquisition compensation expense, (f) merger transaction, integration and practice acquisition costs, minus (g) gain on litigation settlement, (h) gain on acquisition escrow release, plus (i) loss on disposal or impairment of long-lived assets, net, minus (j) gain on amendment to tax receivable agreement, plus (k) tax receivable agreement expense and (l) loss on debt refinancing. The Company uses Adjusted EBITDA as a measure of financial performance. Adjusted EBITDA is a key measure used by the Company’s management to assess operating performance, make business decisions and allocate resources. Non-controlling interests represent the interests of third parties, such as physicians, and in some cases, healthcare systems that own an interest in surgical facilities that the Company consolidates for financial reporting purposes. The Company believes that it is helpful to investors to present Adjusted EBITDA as defined above because it excludes the portion of net income attributable to these third-party interests and clarifies for investors the Company's portion of Adjusted EBITDA generated by its surgical facilities and other operations. Adjusted EBITDA is not a measurement of financial performance under GAAP, and should not be considered in isolation or as a substitute for net income, operating income or any other measure calculated in accordance with generally accepted accounting principles. The items excluded from Adjusted EBITDA are significant components in understanding and evaluating the Company's financial performance. The Company believes such adjustments are appropriate, as the magnitude and frequency of such items can vary significantly and are not related to the assessment of normal operating performance. The Company's calculation of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. (2) This amount includes merger transaction and integration costs of $3.0 million for the one month ended September 30, 2017 ( Successor ), $2.3 million and $5.6 million for the two and eight months ended August 31, 2017 ( Predecessor ) , respectively, and $1.9 million and $6.4 million for the three and nine months ended September 30, 2016 , respectively. This amount includes practice acquisition costs of $474,000 for the one month ended September 30, 2017 ( Successor ), $606,000 and $2.1 million for the two and eight months ended August 31, 2017 ( Predecessor ) , respectively, and $607,000 and $2.2 million for the three and nine months ended September 30, 2016 , respectively. Successor Predecessor September 30, December 31, Assets: Surgical facility services $ 3,969,584 $ 1,914,842 Ancillary services 183,288 184,002 Optical services 43,451 22,478 Total 4,196,323 2,121,322 All other 405,531 183,636 Total assets $ 4,601,854 $ 2,304,958 Successor Predecessor September 1 to September 30, January 1 to August 31, Nine Months Ended September 30, 2017 2017 2016 Supplemental Information: Cash purchases of property and equipment, net: Surgical facility services $ 1,613 $ 14,582 $ 21,151 Ancillary services 2 1,875 3,450 Optical services 23 73 323 Total $ 1,638 $ 16,530 $ 24,924 All other 202 2,243 3,453 Total cash purchases of property and equipment, net $ 1,840 $ 18,773 $ 28,377 |
Significant Accounting Polici16
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed 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. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation of the Company's financial position and results of operations have been included. The Company’s fiscal year ends on December 31 and interim results are not necessarily indicative of results for a full year or any other interim period. The condensed consolidated balance sheet at December 31, 2016 ( Predecessor ) has been derived from the audited financial statements as of that date. The information contained in these condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended December 31, 2016 ( Predecessor ). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
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 condensed 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 condensed consolidated statements of operations; changes in ownership interests in which the Company retains a controlling interest 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 condensed consolidated statements of cash flows. The condensed 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. |
Variable Interest Entities | Variable Interest Entities The condensed consolidated financial statements include the accounts of variable interest entities in which the Company is the primary beneficiary under the provisions of ASC 810, Consolidation . As of September 30, 2017 ( Successor ), the variable interest entities include five surgical facilities, three anesthesia practices and three physician practices. At December 31, 2016 ( Predecessor ), the variable interest entities included five surgical facilities, three anesthesia practices and two physician practices. The change is due to a physician practice acquired during the three months ended June 30, 2017 ( Predecessor ). The Company has the power to direct the activities that most significantly impact a variable interest entity's economic performance. Additionally, the Company would absorb the majority of the expected losses from any of these entities should such expected losses occur. |
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. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed 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. |
Fair Value of Financial Instruments | 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 condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, restricted invested assets and accounts payable approximate their fair values. The fair values of the 2014 First Lien Credit Agreement, Term Loan, 2021 Unsecured Notes and the 2025 Unsecured Notes (in each case, as defined in Note 4. "Long-Term Debt") were based on a Level 2 computation using quoted prices for identical liabilities in inactive markets at September 30, 2017 ( Successor ) and December 31, 2016 ( Predecessor ), as applicable. The carrying amounts related to the Company's other long-term debt obligations, including the 2014 Revolver Loan and the Revolver (in each case, as defined in Note 4. "Long-Term Debt"), approximate their fair values. The Company maintains a supplemental executive retirement savings plan (the "SERP") for certain 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. |
Revenues | 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. 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. 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. 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. 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 | 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 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 September 30, 2017 ( Successor ), the Company had a net third-party Medicaid settlements liability of $1.4 million compared to a net third-party Medicaid settlements receivable of $454,000 at December 31, 2016 ( Predecessor ). 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 considered 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. 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 condensed consolidated balance sheets. |
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 Goodwill represents the fair value of the consideration provided in an acquisition over the fair value of net assets acquired and is not amortized. Additions to goodwill include amounts resulting from new business combinations and incremental ownership purchases in the Company's subsidiaries. Intangible Assets 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 condensed 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 condensed consolidated statements of operations over the service lives of the agreements, typically ranging from two to five years for non-compete agreements and 15 years for the management rights agreements. Customer relationships are amortized into depreciation and amortization expense in the condensed 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 in accordance with Accounting Standards Codification (ASC) 350, Intangibles- Goodwill and Other . 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. The Company tests its goodwill and intangible assets for impairment at least annually, or more frequently if certain indicators arise. |
Operating Leases | 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 condensed 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 condensed consolidated balance sheets. |
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. 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. In connection with the Reorganization, the Company’s board of directors and stockholders adopted the Surgery Partners, Inc. 2015 Omnibus Incentive Plan from which the Company’s future equity-based awards will be granted. |
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. The reserves are estimated 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 condensed consolidated balance sheets. |
Income Taxes and Tax Receivable Agreement | Income Taxes and Tax Receivable Agreement 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 ("NOL") 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 and certain of its subsidiaries file a consolidated federal income tax return. The partnerships, limited liability companies, and certain non-consolidated physician practice corporations also 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, 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 income tax examinations for years prior to 2014 or state income tax examinations for years prior to 2012. |
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 ," along with subsequent amendments, updates and an extension of the effective date (collectively the “New Revenue Standard”), which outlines a single comprehensive model for recognizing revenue and supersedes most existing revenue recognition guidance, including guidance specific to the healthcare industry. This five-step process will require significant management judgment in addition to changing the way many companies recognize revenue in their financial statements. Additionally, and among other provisions, the New Revenue Standard requires expanded quantitative and qualitative disclosures, including disclosure about the nature, amount, timing and uncertainty of revenue. The provisions of the New Revenue Standard are effective for annual periods beginning after December 15, 2017, including interim periods within those years by applying either the full retrospective method or the modified retrospective approach upon adoption. The Company will adopt this ASU on January 1, 2018. The Company currently plans to adopt using the modified retrospective method, including providing all requisite disclosures under such method. In preparation for the adoption of the New Revenue Standard, the Company continues to evaluate and refine its estimates of the anticipated impacts the New Revenue Standard will have on its revenue recognition policies, procedures, financial position, results of operations, cash flows, financial disclosures and control framework. Specifically, the Company is continuing to evaluate its accounting policies and internal controls under the New Revenue Standard, as well as analyzing all of the potential effects of the New Revenue Standard, particularly with respect to non-patient service revenue sources. Upon further evaluation, the Company anticipates that the majority of its provision for doubtful accounts will continue to be recognized as an operating expense rather than as a direct reduction to revenues, given the Company’s practice of assessing a patient’s ability to pay prior to or on the date of providing healthcare services. In February 2016, the FASB issued ASU 2016-02, “ Leases, ” which will require, among other items, lessees to recognize most leases as assets and liabilities on the balance sheet. Qualitative and quantitative disclosures will be enhanced to better understand the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company believes the primary effect of adopting the new standard will be to record right-of-use assets and obligations for current operating leases. In March 2016, the FASB issued ASU 2016-07, “ Investments- Equity Method and Joint Ventures, ” which allows investments that now meet equity method treatment that were previously accounted for under a different method to apply the equity method prospectively from the date the investment qualifies for equity method treatment. ASU 2016-07 is effective prospectively for fiscal years beginning after December 15, 2016, including interim periods within those years. Early adoption is permitted. The Company adopted this ASU on January 1, 2017. The adoption of this ASU did not have a material impact on the Company's condensed consolidated financial position, results of operations, cash flows and financial disclosures. In August 2016, the FASB issued ASU 2016-15, “ Classification of Certain Cash Receipts and Cash Payments, ” which clarifies the classification of certain cash receipts and cash payments on the statement of cash flows. ASU 2016-15 is effective retrospectively for fiscal years beginning after December 15, 2017, including interim periods within those years. Early adoption is permitted. The Company is currently evaluating the impact this new guidance may have on the condensed consolidated cash flows. In October 2016, the FASB issued ASU 2016-17, “ Interests Held through Related Parties That Are under Common Control ,” which modifies existing guidance with respect to how a decision maker that holds an indirect interest in a VIE through a common control party determines whether it is the primary beneficiary of the VIE as part of the analysis of whether the VIE would need to be consolidated. Under the ASU, a decision maker would need to consider only its proportionate indirect interest in the VIE held through a common control party. Previous guidance had required the decision maker to treat the common control party’s interest in the VIE as if the decision maker held the interest itself. As a result of the ASU, in certain cases, previous consolidation conclusions may change. ASU 2016-17 is effective prospectively for fiscal years beginning after December 15, 2016, including interim periods within those years. The Company adopted this ASU on January 1, 2017. The adoption of this ASU did not have a material impact on the Company's condensed consolidated financial position, results of operations, cash flows and financial disclosures. In November 2016, the FASB issued ASU 2016-18, “ Statement of Cash Flows: Restricted Cash, ” w hich will require the reconciliation of restricted cash in the statement of cash flows. ASU 2016-18 is effective retrospectively for fiscal years beginning after December 15, 2017, including interim periods within those years. Early adoption is permitted. The adoption of this ASU will not have a material impact on the Company's condensed consolidated cash flows. In January 2017, the FASB issued ASU 2017-01, “ Business Combinations – Clarifying the Definition of a Business ,” which narrows the definition of a business when evaluating whether transactions should be accounted for as asset acquisitions or business combinations. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those years. Early adoption is permitted. The adoption of this ASU will not have a material impact on the Company's condensed consolidated financial position, results of operations and cash flows. In January 2017, the FASB issued ASU 2017-04, “ Simplifying the Test for Goodwill Impairment ,” which eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on the current Step 1). ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, including interim periods within those years. Early adoption is permitted for annual and interim periods after January 1, 2017. The Company early adopted this ASU on January 1, 2017. The adoption of ASU 2017-04 only impacts the Company's financial statements in situations where an impairment of a reporting unit’s assets is determined. |
Business Combinations | 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. Any goodwill recognized is determined as the excess of the fair value of the consideration conveyed plus the fair value of any non-controlling interests in the acquisition over the fair value of the net assets acquired. Acquisitions in which the Company is able to exert significant influence but does not have control are accounted for using the equity method. Acquired assets and assumed liabilities typically 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. Fair value attributable to non-controlling interests is 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 is 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 is based on Level 3 computations using key inputs such as the Company's internally-prepared financial projections. Fair values assigned to acquired working capital are based on carrying amounts reported by the acquiree at the date of acquisition, which approximate their fair values. |
Significant Accounting Polici17
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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): Predecessor Balance at December 31, 2016 $ 180,521 Net income attributable to non-controlling interests—redeemable 9,615 Acquisition and disposal of shares of non-controlling interests, net—redeemable (3,323 ) Distributions to non-controlling interest—redeemable holders (11,468 ) Acquisition of NSH 153,320 Balance at August 31, 2017 $ 328,665 Successor Balance at September 1, 2017 $ 271,001 Net income attributable to non-controlling interests—redeemable 1,054 Acquisition and disposal of shares of non-controlling interests, net—redeemable 91 Distributions to non-controlling interest—redeemable holders (730 ) Balance at September 30, 2017 $ 271,416 |
Schedule of Carrying Amounts and Fair Values of Debt | A summary of the carrying amounts and fair values of the Company's long-term debt follows (in thousands): Successor Predecessor September 30, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value 2014 Revolver Loan $ — $ — $ 85,000 $ 85,000 2014 First Lien Credit Agreement, net of debt issuance costs and discount $ — $ — $ 911,784 $ 917,528 2017 Senior Secured Credit Facilities: Revolver $ — $ — $ — $ — Term Loan $ 1,283,626 $ 1,267,581 $ — $ — Senior Unsecured Notes due 2021 (1) $ 409,821 $ 429,288 $ 387,942 $ 412,189 Senior Unsecured Notes due 2025 $ 370,000 $ 346,413 $ — $ — (1) The carrying amount in the Predecessor period is net of unamortized debt issuance costs and discount, which were eliminated with the application of pushdown accounting. |
Schedule of Revenues by Service Type | A summary of revenues by service type as a percentage of total revenues follows: Successor Predecessor Predecessor September 1 to September 30, July 1 to August 31, Three Months Ended September 30, January 1 to August 31, Nine Months Ended September 30, 2017 2017 2016 2017 2016 Patient service revenues: Surgical facilities revenues 94.0 % 95.5 % 90.4 % 91.4 % 90.6 % Ancillary services revenues 4.2 % 2.7 % 8.0 % 7.0 % 7.5 % 98.2 % 98.2 % 98.4 % 98.4 % 98.1 % Other service revenues: Optical services revenues 0.7 % 1.1 % 1.1 % 1.0 % 1.2 % Other 1.1 % 0.7 % 0.5 % 0.6 % 0.7 % 1.8 % 1.8 % 1.6 % 1.6 % 1.9 % Total revenues 100.0 % 100.0 % 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): Successor Predecessor September 1 to September 30, July 1 to August 31, Three Months Ended September 30, 2017 2017 2016 Amount % Amount % Amount % Patient service revenues: Private insurance $ 72,930 56.2 % $ 80,166 46.9 % $ 140,637 50.6 % Government 46,162 35.5 % 73,734 43.1 % 111,929 40.2 % Self-pay 3,861 3.0 % 4,119 2.4 % 5,389 1.9 % Other (1) 6,883 5.3 % 12,909 7.6 % 20,240 7.3 % Total patient service revenues $ 129,836 100.0 % $ 170,928 100.0 % $ 278,195 100.0 % Other service revenues: Optical service revenues $ 888 $ 1,905 $ 3,203 Other revenues 1,534 1,246 1,284 Total net revenues $ 132,258 $ 174,079 $ 282,682 Successor Predecessor September 1 to September 30, January 1 to August 31, Nine Months Ended September 30, 2017 2017 2016 Amount % Amount % Amount % Patient service revenues: Private insurance $ 72,930 56.2 % $ 360,092 48.9 % $ 418,798 50.9 % Government 46,162 35.5 % 308,993 42.0 % 331,041 40.2 % Self-pay 3,861 3.0 % 15,949 2.2 % 13,814 1.7 % Other (1) 6,883 5.3 % 51,374 6.9 % 59,313 7.2 % Total patient service revenues $ 129,836 100.0 % $ 736,408 100.0 % $ 822,966 100.0 % Other service revenues: Optical service revenues $ 888 $ 7,629 $ 10,222 Other revenues 1,534 4,578 6,249 Total net revenues $ 132,258 $ 748,615 $ 839,437 (1) Other is comprised of anesthesia service agreements, auto liability, letters of protection and other payor types. |
Schedule of Prepaid Expenses and Other Current Assets | A summary of prepaid expenses and other current assets follows (in thousands): Successor Predecessor September 30, December 31, Prepaid expenses $ 18,418 $ 11,158 Receivables - optical product purchasing organization 8,369 7,042 Insurance recoveries 2,837 2,476 Tax refund receivable 8,618 — Other current assets 15,482 11,338 Total $ 53,724 $ 32,014 |
Schedule of Property and Equipment | A summary of property and equipment follows (in thousands): Successor Predecessor September 30, December 31, Land $ 20,880 $ 8,082 Buildings and improvements 181,237 118,172 Furniture and equipment 14,242 14,670 Computer and software 21,708 29,902 Medical equipment 140,198 117,418 Construction in progress 13,161 2,396 Property and equipment, at cost 391,426 290,640 Less: Accumulated depreciation (2,729 ) (86,387 ) Property and equipment, net $ 388,697 $ 204,253 |
Schedule of Finite-Lived Intangible Assets | A summary of the activity related to intangible assets for the period from January 1, 2017 to August 31, 2017 ( Predecessor ) and the period from September 1, 2017 to September 30, 2017 ( Successor ) follows (in thousands): Physician Income Guarantees Management Rights Non-Compete Agreements Certificates of Need Customer Relationships Other Total Intangible Assets Predecessor Balance at December 31, 2016 $ 813 $ 21,290 $ 16,457 $ 3,780 $ 3,704 $ 1,979 $ 48,023 Additions 445 26,900 92 745 — 130 28,312 Recruitment expense (380 ) — — — — — (380 ) Amortization — (1,154 ) (3,715 ) — (733 ) (438 ) (6,040 ) Balance at August 31, 2017 $ 878 $ 47,036 $ 12,834 $ 4,525 $ 2,971 $ 1,671 $ 69,915 Physician Income Guarantees Management Rights Non-Compete Agreements Certificates of Need Customer Relationships Other Total Intangible Assets Successor Balance at September 1, 2017 $ 878 $ 41,600 $ 8,024 $ 5,078 $ — $ 1,170 $ 56,750 Additions — — 41 25 — — 66 Recruitment expense (38 ) — — — — — (38 ) Amortization — (138 ) (84 ) — — (49 ) (271 ) Balance at September 30, 2017 $ 840 $ 41,462 $ 7,981 $ 5,103 $ — $ 1,121 $ 56,507 |
Schedule of Indefinite-Lived Intangible Assets | A summary of the activity related to intangible assets for the period from January 1, 2017 to August 31, 2017 ( Predecessor ) and the period from September 1, 2017 to September 30, 2017 ( Successor ) follows (in thousands): Physician Income Guarantees Management Rights Non-Compete Agreements Certificates of Need Customer Relationships Other Total Intangible Assets Predecessor Balance at December 31, 2016 $ 813 $ 21,290 $ 16,457 $ 3,780 $ 3,704 $ 1,979 $ 48,023 Additions 445 26,900 92 745 — 130 28,312 Recruitment expense (380 ) — — — — — (380 ) Amortization — (1,154 ) (3,715 ) — (733 ) (438 ) (6,040 ) Balance at August 31, 2017 $ 878 $ 47,036 $ 12,834 $ 4,525 $ 2,971 $ 1,671 $ 69,915 Physician Income Guarantees Management Rights Non-Compete Agreements Certificates of Need Customer Relationships Other Total Intangible Assets Successor Balance at September 1, 2017 $ 878 $ 41,600 $ 8,024 $ 5,078 $ — $ 1,170 $ 56,750 Additions — — 41 25 — — 66 Recruitment expense (38 ) — — — — — (38 ) Amortization — (138 ) (84 ) — — (49 ) (271 ) Balance at September 30, 2017 $ 840 $ 41,462 $ 7,981 $ 5,103 $ — $ 1,121 $ 56,507 |
Schedule of Rollforward of Goodwill | A summary of activity related to goodwill for the period from January 1, 2017 to August 31, 2017 ( Predecessor ) and the period from September 1, 2017 to September 30, 2017 ( Successor ) follows (in thousands): Predecessor Balance at December 31, 2016 $ 1,555,204 Acquisitions 858,323 Divestitures (175 ) Purchase price adjustments 1,220 Balance at August 31, 2017 $ 2,414,572 Successor Balance at September 1, 2017 $ 3,269,225 Acquisitions 1,214 Divestitures — Purchase price adjustments (130 ) Balance at September 30, 2017 $ 3,270,309 |
Schedule of Other Long-Term Assets | A summary of other long-term assets follows (in thousands): Successor Predecessor September 30, December 31, Notes receivable $ 2,853 $ 716 Deposits 2,794 4,196 Assets of SERP 1,804 1,725 Debt issuance costs — 1,488 Insurance recoverable 6,835 6,835 Other 4,847 1,475 Total $ 19,133 $ 16,435 |
Schedule of Other Current Liabilities | A summary of other current liabilities follows (in thousands): Successor Predecessor September 30, December 31, Interest payable $ 23,777 $ 19,206 Current taxes payable 6,731 2,622 Insurance liabilities 10,287 6,625 Amounts due to patients and payors 15,087 12,221 Tax receivable agreement liability 837 999 Contingent acquisition compensation liability 7,866 4,589 Contingent proceeds payable 8,618 — Other accrued expenses 33,076 22,731 Total $ 106,279 $ 68,993 |
Schedule of Other Long-Term Liabilities | A summary of other long-term liabilities follows (in thousands): Successor Predecessor September 30, December 31, Facility lease obligations $ 90,052 $ 52,653 Medical malpractice liability 13,453 10,453 Liability of SERP 1,804 1,725 Unfavorable lease liability 7,893 1,671 Other long-term liabilities 3,597 9,764 Total $ 116,799 $ 76,266 |
Acquisitions and Developments (
Acquisitions and Developments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The aggregate amounts preliminarily recognized in connection with the application of pushdown accounting for each major class of assets and liabilities as of August 31, 2017 are as follows (in thousands): Equity attributable to Surgery Partners, Inc. 720,606 Redeemable preferred stock 310,000 Fair value of non-controlling interests 955,481 Aggregate fair value 1,986,087 Net assets: Cash and cash equivalents 214,206 Accounts receivable 257,373 Inventories 44,310 Prepaid expenses and other current assets 54,248 Acquisition escrow deposit 4,570 Property and equipment 386,086 Intangible assets 56,750 Goodwill 3,269,225 Investments in and advances to affiliates 64,243 Restricted invested assets 315 Long-term deferred tax asset 208,935 Long-term acquisition escrow deposit 19,600 Other long-term assets 19,427 Accounts payable (64,921 ) Accrued payroll and benefits (52,995 ) Acquisition escrow liability (4,570 ) Other current liabilities (83,317 ) Current maturities of long-term debt (49,942 ) Long-term debt, less current maturities (2,142,375 ) Long-term tax receivable agreement liability (78,498 ) Long-term acquisition escrow liability (19,600 ) Other long-term liabilities (116,983 ) Total fair value of net assets 1,986,087 The aggregate amounts preliminarily recognized as of the acquisition date for each major class of assets and liabilities are as follows (in thousands): Cash consideration $ 762,850 Fair value of non-controlling interests 325,965 Aggregate fair value of acquisition 1,088,815 Net assets acquired: Cash and cash equivalents 51,159 Accounts receivable 76,101 Inventories 14,986 Prepaid expenses and other current assets 18,007 Property and equipment 174,374 Intangible assets 27,741 Goodwill 845,185 Investments in and advances to affiliates 29,737 Long-term deferred tax assets 28,182 Acquisition escrow deposit 19,600 Other long-term assets 5,309 Accounts payable (29,652 ) Accrued payroll and benefits (27,313 ) Other current liabilities (18,355 ) Current maturities of long-term debt (16,416 ) Long-term debt, less current maturities (42,770 ) Acquisition escrow liability (19,600 ) Other long-term liabilities (47,460 ) Total fair value of net assets acquired 1,088,815 |
Summary of Pro Forma Information | The following pro forma combined summary of operations of the Company gives effect to using historical information of the operations of NSH as if the acquisition transaction had occurred as of January 1, 2016 (in thousands): Successor Predecessor Predecessor September 1 to September 30, July 1 to August 31, Three Months Ended September 30, January 1 to August 31, Nine Months Ended September 30, 2017 2017 2016 2017 2016 Net revenues $ 132,258 $ 267,013 $ 415,764 $ 1,122,326 $ 1,235,472 Net (loss) income (763 ) 13,331 28,304 63,269 82,275 Less: Net income attributable to non-controlling interests (6,492 ) (13,184 ) (25,207 ) (65,122 ) (78,356 ) Net (loss) income attributable to Surgery Partners, Inc. $ (7,255 ) $ 147 $ 3,097 $ (1,853 ) $ 3,919 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of long-term debt | A summary of long-term debt follows (in thousands): Successor Predecessor September 30, December 31, 2014 Revolver Loan $ — $ 85,000 2014 First Lien Credit Agreement — 932,000 2017 Senior Secured Credit Facilities: Revolver — — Term Loan 1,283,626 — Senior Unsecured Notes due 2021 409,821 400,000 Senior Unsecured Notes due 2025 370,000 — Subordinated Notes — 1,000 Notes payable and secured loans 113,547 42,521 Capital lease obligations 16,340 13,996 Less: unamortized debt issuance costs and discount — (32,274 ) Total debt 2,193,334 1,442,243 Less: Current maturities 48,472 27,822 Total long-term debt $ 2,144,862 $ 1,414,421 |
Debt redemption percentages | The Company may redeem the 2025 Unsecured Notes, in whole or in part, at any time on or after July 1, 2020, at the redemption prices set forth below (expressed as a percentage of the principal amount to be redeemed), plus accrued and unpaid interest, if any, to, but excluding, the date of redemption: July 1, 2020 to June 30, 2021 103.375 % July 1, 2021 to June 30, 2022 101.688 % July 1, 2022 and thereafter 100.000 % The Company may redeem the 2021 Unsecured Notes, in whole or in part, at any time on or after April 15, 2018, at the redemption prices set forth below (expressed as a percentage of the principal amount to be redeemed), plus accrued and unpaid interest, if any, to the date of redemption: April 15, 2018 to April 14, 2019 106.656 % April 15, 2019 to April 14, 2020 104.438 % April 15, 2020 and thereafter 100.000 % |
Redeemable Preferred Stock (Tab
Redeemable Preferred Stock (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Temporary Equity Disclosure [Abstract] | |
Activity Related to Redeemable Preferred Stock | A summary of activity related to the redeemable preferred stock for the period from September 1, 2017 to September 30, 2017 (Successor) follows (in thousands): Successor Balance at September 1, 2017 $ 310,000 Dividends accrued 2,633 Cash dividends declared (1,316 ) Mark to redemption adjustment 15,566 Balance at September 30, 2017 $ 326,882 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | reconciliation of the numerator and denominator of basic and diluted earnings per share for the period from January 1, 2017 to August 31, 2017 (Predecessor) and the period from September 1, 2017 to September 30, 2017 (Successor) follows (in thousands except share and per share amounts): Successor Predecessor Predecessor September 1 to September 30, July 1 to August 31, Three Months Ended September 30, January 1 to August 31, Nine Months Ended September 30, 2017 2017 2016 2017 2016 Numerator: Net loss attributable to Surgery Partners, Inc. $ (9,140 ) $ (4,444 ) $ (2,338 ) $ (11,669 ) $ (7,409 ) Less: amounts allocated to participating securities (1) 2,633 — — — — Less: mark to redemption adjustment 15,566 — — — — Net loss attributable to common stockholders $ (27,339 ) $ (4,444 ) $ (2,338 ) $ (11,669 ) $ (7,409 ) Denominator: Weighted average shares outstanding- basic 48,314,746 48,146,611 48,019,652 48,121,404 48,018,706 Effect of dilutive securities (2) — — — — — Weighted average shares outstanding- diluted 48,314,746 48,146,611 48,019,652 48,121,404 48,018,706 Loss per share: Basic $ (0.57 ) $ (0.09 ) $ (0.05 ) $ (0.24 ) $ (0.15 ) Diluted (2) $ (0.57 ) $ (0.09 ) $ (0.05 ) $ (0.24 ) $ (0.15 ) Dilutive securities outstanding not included in the computation of (loss) earnings per share as their effect is antidilutive: Stock options — — 586 — 345 Restricted shares 112,529 34,506 369,545 105,944 337,915 Convertible preferred stock — N/A N/A N/A N/A (1) Amounts allocated to participating securities includes dividends accrued during the Successor period for the Series A Preferred Stock. The Series A Preferred Stock does not participate in undistributed losses. There were no participating securities during the Predecessor periods. (2) The impact of potentially dilutive securities for all periods presented was not considered because the effect would be anti-dilutive in each period. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | The following tables present financial information for each reportable segment (in thousands): Successor Predecessor Predecessor September 1 to September 30, July 1 to August 31, Three Months Ended September 30, January 1 to August 31, Nine Months Ended September 30, 2017 2017 2016 2017 2016 Revenues: Surgical facility services $ 125,595 $ 167,765 $ 256,795 $ 688,725 $ 766,248 Ancillary services 5,775 4,409 22,684 52,261 62,967 Optical services 888 1,905 3,203 7,629 10,222 Total revenues $ 132,258 $ 174,079 $ 282,682 $ 748,615 $ 839,437 |
Schedule of Segment Operating Income | Successor Predecessor Predecessor September 1 to September 30, July 1 to August 31, Three Months Ended September 30, January 1 to August 31, Nine Months Ended September 30, 2017 2017 2016 2017 2016 Adjusted EBITDA: Surgical facility services $ 20,947 $ 27,726 $ 53,347 $ 125,912 $ 153,318 Ancillary services (1,265 ) (10,737 ) 2,573 (6,526 ) 9,141 Optical services 193 555 1,276 2,214 3,004 All other (5,033 ) (9,142 ) (12,448 ) (36,036 ) (36,258 ) Total Adjusted EBITDA (1) 14,842 8,402 44,748 85,564 129,205 Net income attributable to non-controlling interests 6,492 8,813 16,672 42,087 54,392 Depreciation and amortization (3,330 ) (7,599 ) (9,713 ) (30,124 ) (28,984 ) Interest expense, net (15,883 ) (18,147 ) (26,475 ) (68,929 ) (74,863 ) Non-cash stock compensation expense (1,683 ) (1,628 ) (691 ) (3,697 ) (1,326 ) Contingent acquisition compensation expense (605 ) (1,210 ) (1,530 ) (5,057 ) (3,060 ) Merger transaction, integration and practice acquisition costs (2) (3,457 ) (2,949 ) (2,471 ) (7,677 ) (8,579 ) Gain on litigation settlement — — — 3,794 — Gain on acquisition escrow release — 1,000 — 1,000 — Loss on disposal or impairment of long-lived assets, net (333 ) (114 ) (572 ) (1,715 ) (1,697 ) Gain on amendment to tax receivable agreement 1,098 15,294 — 15,294 — Tax receivable agreement expense — — (3,733 ) — (3,733 ) Loss on debt refinancing — (18,211 ) (3,595 ) (18,211 ) (11,876 ) (Loss) income before income taxes $ (2,859 ) $ (16,349 ) $ 12,640 $ 12,329 $ 49,479 (1) The above table reconciles Adjusted EBITDA to income before income taxes as reflected in the unaudited condensed consolidated statements of operations. When the Company uses the term “Adjusted EBITDA,” it is referring to income before income taxes minus (a) net income attributable to non-controlling interests plus (b) depreciation and amortization, (c) interest expense, net, (d) non-cash stock compensation expense, (e) contingent acquisition compensation expense, (f) merger transaction, integration and practice acquisition costs, minus (g) gain on litigation settlement, (h) gain on acquisition escrow release, plus (i) loss on disposal or impairment of long-lived assets, net, minus (j) gain on amendment to tax receivable agreement, plus (k) tax receivable agreement expense and (l) loss on debt refinancing. The Company uses Adjusted EBITDA as a measure of financial performance. Adjusted EBITDA is a key measure used by the Company’s management to assess operating performance, make business decisions and allocate resources. Non-controlling interests represent the interests of third parties, such as physicians, and in some cases, healthcare systems that own an interest in surgical facilities that the Company consolidates for financial reporting purposes. The Company believes that it is helpful to investors to present Adjusted EBITDA as defined above because it excludes the portion of net income attributable to these third-party interests and clarifies for investors the Company's portion of Adjusted EBITDA generated by its surgical facilities and other operations. Adjusted EBITDA is not a measurement of financial performance under GAAP, and should not be considered in isolation or as a substitute for net income, operating income or any other measure calculated in accordance with generally accepted accounting principles. The items excluded from Adjusted EBITDA are significant components in understanding and evaluating the Company's financial performance. The Company believes such adjustments are appropriate, as the magnitude and frequency of such items can vary significantly and are not related to the assessment of normal operating performance. The Company's calculation of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. (2) This amount includes merger transaction and integration costs of $3.0 million for the one month ended September 30, 2017 ( Successor ), $2.3 million and $5.6 million for the two and eight months ended August 31, 2017 ( Predecessor ) , respectively, and $1.9 million and $6.4 million for the three and nine months ended September 30, 2016 , respectively. This amount includes practice acquisition costs of $474,000 for the one month ended September 30, 2017 ( Successor ), $606,000 and $2.1 million for the two and eight months ended August 31, 2017 ( Predecessor ) , respectively, and $607,000 and $2.2 million for the three and nine months ended September 30, 2016 , |
Reconciliation of Assets from Segment to Consolidated | Successor Predecessor September 30, December 31, Assets: Surgical facility services $ 3,969,584 $ 1,914,842 Ancillary services 183,288 184,002 Optical services 43,451 22,478 Total 4,196,323 2,121,322 All other 405,531 183,636 Total assets $ 4,601,854 $ 2,304,958 |
Schedule of Other Segment Reporting Information | Successor Predecessor September 1 to September 30, January 1 to August 31, Nine Months Ended September 30, 2017 2017 2016 Supplemental Information: Cash purchases of property and equipment, net: Surgical facility services $ 1,613 $ 14,582 $ 21,151 Ancillary services 2 1,875 3,450 Optical services 23 73 323 Total $ 1,638 $ 16,530 $ 24,924 All other 202 2,243 3,453 Total cash purchases of property and equipment, net $ 1,840 $ 18,773 $ 28,377 |
Organization (Details)
Organization (Details) | Aug. 31, 2017$ / sharesshares | Oct. 01, 2015$ / sharesshares | Sep. 30, 2017surgical_facilitystate$ / sharesshares | May 09, 2017$ / shares | Sep. 30, 2015shares |
Product Information [Line Items] | |||||
Common stock, shares issued (shares) | shares | 48,769,296 | ||||
Preferred stock, par value (in USD per share) | $ 0.01 | ||||
Common stock, par value (in USD per share) | $ 0.01 | ||||
Number of States in which entity operates | state | 32 | ||||
Number of surgical facilities owned | surgical_facility | 124 | ||||
Number of surgical facilities owned, majority interest | surgical_facility | 85 | ||||
Number of surgical facilities owned, consolidated | surgical_facility | 109 | ||||
Facilities, Ambulatory Surgery Centers | |||||
Product Information [Line Items] | |||||
Number of surgical facilities owned | surgical_facility | 104 | ||||
Facilities, Surgical Hospitals | |||||
Product Information [Line Items] | |||||
Number of surgical facilities owned | surgical_facility | 20 | ||||
Facilities, Physician Clinics | |||||
Product Information [Line Items] | |||||
Number of surgical facilities owned | surgical_facility | 60 | ||||
IPO | |||||
Product Information [Line Items] | |||||
Stock issued during period (shares) | shares | 14,285,000 | ||||
Share price (in USD per share) | $ 19 | ||||
Surgery Center Holdings, LLC | |||||
Product Information [Line Items] | |||||
Common stock, shares issued (shares) | shares | 33,871,990 | ||||
BCPE Seminole Holdings LP | Majority Shareholder | |||||
Product Information [Line Items] | |||||
Stock expected to be sold by investor (in shares) | shares | 26,455,651 | ||||
Common stock, par value (in USD per share) | $ 0.01 | ||||
Stock expected to be sold by investor, price per share (in USD per share) | $ 19 | ||||
Voting interests acquired | 65.70% | ||||
BCPE Seminole Holdings LP | Common Stock | Majority Shareholder | |||||
Product Information [Line Items] | |||||
Voting interests acquired | 54.20% | ||||
BCPE Seminole Holdings LP | Preferred Class A | Preferred Stock | |||||
Product Information [Line Items] | |||||
Stock issued during period (shares) | shares | 310,000 | ||||
Preferred stock, par value (in USD per share) | $ 0.01 | ||||
Preferred stock dividend rate | 10.00% | ||||
Purchase price per share (in USD per share) | $ 1,000 |
Significant Accounting Polici24
Significant Accounting Policies - Schedule of Non-Controlling Interests - Redeemable (Details) - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended |
Sep. 30, 2017 | Aug. 31, 2017 | |
Non-Controlling Interests - Redeemable [Roll Forward] | ||
Beginning balance | $ 271,001 | |
Net income attributable to non-controlling interests—redeemable | 1,054 | |
Acquisition and disposal of shares of non-controlling interests, net—redeemable | 91 | |
Distributions to non-controlling interest—redeemable holders | (730) | |
Ending balance | 271,416 | $ 271,001 |
Predecessor | ||
Non-Controlling Interests - Redeemable [Roll Forward] | ||
Beginning balance | $ 328,665 | 180,521 |
Net income attributable to non-controlling interests—redeemable | 9,615 | |
Acquisition and disposal of shares of non-controlling interests, net—redeemable | (3,323) | |
Distributions to non-controlling interest—redeemable holders | (11,468) | |
Acquisition of NSH | 153,320 | |
Ending balance | $ 328,665 |
Significant Accounting Polici25
Significant Accounting Policies - Variable Interest Entities (Details) $ in Millions | Sep. 30, 2017USD ($)Anesthesia_Practice | Sep. 30, 2017USD ($)surgical_facility | Sep. 30, 2017USD ($)Practice | Jun. 30, 2017Practice | Dec. 31, 2016USD ($)Anesthesia_Practice | Dec. 31, 2016USD ($)surgical_facility | Dec. 31, 2016USD ($)Practice |
Variable Interest Entity [Line Items] | |||||||
Number of facilities included in VIE | 3 | 5 | 3 | ||||
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure | |||||||
Variable Interest Entity [Line Items] | |||||||
Total assets related to VIE | $ 90.1 | $ 90.1 | $ 90.1 | ||||
Total liabilities related to VIE | $ 8 | $ 8 | $ 8 | ||||
Predecessor | |||||||
Variable Interest Entity [Line Items] | |||||||
Number of facilities included in VIE | 3 | 5 | 2 | ||||
Number of physician practices acquired | Practice | 1 | ||||||
Predecessor | Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure | |||||||
Variable Interest Entity [Line Items] | |||||||
Total assets related to VIE | $ 99.5 | $ 99.5 | $ 99.5 | ||||
Total liabilities related to VIE | $ 10.7 | $ 10.7 | $ 10.7 |
Significant Accounting Polici26
Significant Accounting Policies - Equity Method Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Equity Method Investments [Line Items] | ||
Investments in and advances to affiliates | $ 64,427 | |
Predecessor | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments in and advances to affiliates | $ 34,980 |
Significant Accounting Polici27
Significant Accounting Policies - Schedule of Carrying Amount and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
2017 Senior Secured Credit Facility - Term Loan | Carrying Amount | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 1,283,626 | |
2017 Senior Secured Credit Facility - Term Loan | Fair Value | Senior Notes | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 1,267,581 | |
Senior Unsecured Notes Due 2021 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 409,821 | |
Senior Unsecured Notes Due 2021 | Carrying Amount | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 409,821 | |
Senior Unsecured Notes Due 2021 | Fair Value | Senior Notes | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 429,288 | |
Senior Unsecured Notes Due 2025 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 370,000 | |
Senior Unsecured Notes Due 2025 | Carrying Amount | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 370,000 | |
Senior Unsecured Notes Due 2025 | Fair Value | Senior Notes | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 346,413 | |
Revolving Credit Facility | Line of Credit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | |
Revolving Credit Facility | 2014 Revolver Loan | Carrying Amount | Line of Credit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | |
Revolving Credit Facility | 2014 Revolver Loan | Fair Value | Line of Credit | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | |
Revolving Credit Facility | 2014 First Lien Credit Agreement | Carrying Amount | Line of Credit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | |
Revolving Credit Facility | 2014 First Lien Credit Agreement | Fair Value | Line of Credit | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | |
Revolving Credit Facility | 2017 Senior Secured Credit Facility - Revolver | Carrying Amount | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | |
Revolving Credit Facility | 2017 Senior Secured Credit Facility - Revolver | Fair Value | Senior Notes | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 0 | |
Predecessor | 2017 Senior Secured Credit Facility - Term Loan | Carrying Amount | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 0 | |
Predecessor | 2017 Senior Secured Credit Facility - Term Loan | Fair Value | Senior Notes | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | |
Predecessor | Senior Unsecured Notes Due 2021 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 400,000 | |
Predecessor | Senior Unsecured Notes Due 2021 | Carrying Amount | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 387,942 | |
Predecessor | Senior Unsecured Notes Due 2021 | Fair Value | Senior Notes | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 412,189 | |
Predecessor | Senior Unsecured Notes Due 2025 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | |
Predecessor | Senior Unsecured Notes Due 2025 | Carrying Amount | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | |
Predecessor | Senior Unsecured Notes Due 2025 | Fair Value | Senior Notes | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | |
Predecessor | Revolving Credit Facility | Line of Credit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 85,000 | |
Predecessor | Revolving Credit Facility | 2014 Revolver Loan | Carrying Amount | Line of Credit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 85,000 | |
Predecessor | Revolving Credit Facility | 2014 Revolver Loan | Fair Value | Line of Credit | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 85,000 | |
Predecessor | Revolving Credit Facility | 2014 First Lien Credit Agreement | Carrying Amount | Line of Credit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 911,784 | |
Predecessor | Revolving Credit Facility | 2014 First Lien Credit Agreement | Fair Value | Line of Credit | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 917,528 | |
Predecessor | Revolving Credit Facility | 2017 Senior Secured Credit Facility - Revolver | Carrying Amount | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 0 | |
Predecessor | Revolving Credit Facility | 2017 Senior Secured Credit Facility - Revolver | Fair Value | Senior Notes | Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 0 |
Significant Accounting Polici28
Significant Accounting Policies - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets of SERP | $ 1,804 | |
Liability of SERP | 1,804 | |
Fair Value, Inputs, Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets of SERP | 1,800 | |
Liability of SERP | $ 1,800 | |
Predecessor | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets of SERP | $ 1,725 | |
Liability of SERP | 1,725 | |
Predecessor | Fair Value, Inputs, Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets of SERP | 1,700 | |
Liability of SERP | $ 1,700 |
Significant Accounting Polici29
Significant Accounting Policies - Schedule of Revenues by Service Type (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Aug. 31, 2017 | Sep. 30, 2016 | Aug. 31, 2017 | Sep. 30, 2016 | |
Revenue from External Customer [Line Items] | |||||
Increase of revenue as result of changes in estimates to third-party settlements related to prior years | $ 0 | ||||
Revenue Source | Revenue | |||||
Revenue from External Customer [Line Items] | |||||
Service revenues as a percentage of total revenues | 100.00% | ||||
Revenue Source | Revenue | Healthcare Organization, Patient Service | |||||
Revenue from External Customer [Line Items] | |||||
Service revenues as a percentage of total revenues | 98.20% | ||||
Revenue Source | Revenue | Surgical Facility Services | |||||
Revenue from External Customer [Line Items] | |||||
Service revenues as a percentage of total revenues | 94.00% | ||||
Revenue Source | Revenue | Ancillary Services | |||||
Revenue from External Customer [Line Items] | |||||
Service revenues as a percentage of total revenues | 4.20% | ||||
Revenue Source | Revenue | Healthcare Organization, Other Service | |||||
Revenue from External Customer [Line Items] | |||||
Service revenues as a percentage of total revenues | 1.80% | ||||
Revenue Source | Revenue | Optical Services | |||||
Revenue from External Customer [Line Items] | |||||
Service revenues as a percentage of total revenues | 0.70% | ||||
Revenue Source | Revenue | Other | |||||
Revenue from External Customer [Line Items] | |||||
Service revenues as a percentage of total revenues | 1.10% | ||||
Predecessor | |||||
Revenue from External Customer [Line Items] | |||||
Increase of revenue as result of changes in estimates to third-party settlements related to prior years | $ 630,000 | $ 1,100,000 | |||
Predecessor | Revenue Source | Revenue | |||||
Revenue from External Customer [Line Items] | |||||
Service revenues as a percentage of total revenues | 100.00% | 100.00% | 100.00% | 100.00% | |
Predecessor | Revenue Source | Revenue | Healthcare Organization, Patient Service | |||||
Revenue from External Customer [Line Items] | |||||
Service revenues as a percentage of total revenues | 98.20% | 98.40% | 98.40% | 98.10% | |
Predecessor | Revenue Source | Revenue | Surgical Facility Services | |||||
Revenue from External Customer [Line Items] | |||||
Service revenues as a percentage of total revenues | 95.50% | 90.40% | 91.40% | 90.60% | |
Predecessor | Revenue Source | Revenue | Ancillary Services | |||||
Revenue from External Customer [Line Items] | |||||
Service revenues as a percentage of total revenues | 2.70% | 8.00% | 7.00% | 7.50% | |
Predecessor | Revenue Source | Revenue | Healthcare Organization, Other Service | |||||
Revenue from External Customer [Line Items] | |||||
Service revenues as a percentage of total revenues | 1.80% | 1.60% | 1.60% | 1.90% | |
Predecessor | Revenue Source | Revenue | Optical Services | |||||
Revenue from External Customer [Line Items] | |||||
Service revenues as a percentage of total revenues | 1.10% | 1.10% | 1.00% | 1.20% | |
Predecessor | Revenue Source | Revenue | Other | |||||
Revenue from External Customer [Line Items] | |||||
Service revenues as a percentage of total revenues | 0.70% | 0.50% | 0.60% | 0.70% |
Significant Accounting Polici30
Significant Accounting Policies - Schedule of Revenues by Sources (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Aug. 31, 2017 | Sep. 30, 2016 | Aug. 31, 2017 | Sep. 30, 2016 | |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Total net revenues | $ 132,258 | ||||
Healthcare Organization, Patient Service | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Patient service revenues | $ 129,836 | ||||
Healthcare Organization, Patient Service | Customer | Revenue | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Service revenues as a percentage of total revenues | 100.00% | ||||
Healthcare Organization, Patient Service | Private insurance | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Patient service revenues | $ 72,930 | ||||
Healthcare Organization, Patient Service | Private insurance | Customer | Revenue | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Service revenues as a percentage of total revenues | 56.20% | ||||
Healthcare Organization, Patient Service | Government | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Patient service revenues | $ 46,162 | ||||
Healthcare Organization, Patient Service | Government | Customer | Revenue | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Service revenues as a percentage of total revenues | 35.50% | ||||
Healthcare Organization, Patient Service | Self-pay | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Patient service revenues | $ 3,861 | ||||
Healthcare Organization, Patient Service | Self-pay | Customer | Revenue | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Service revenues as a percentage of total revenues | 3.00% | ||||
Healthcare Organization, Patient Service | Other | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Patient service revenues | $ 6,883 | ||||
Healthcare Organization, Patient Service | Other | Customer | Revenue | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Service revenues as a percentage of total revenues | 5.30% | ||||
Optical Services | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Other service revenues | $ 888 | ||||
Other | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Other service revenues | $ 1,534 | ||||
Predecessor | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Total net revenues | $ 174,079 | $ 282,682 | $ 748,615 | $ 839,437 | |
Increase in accounts receivable reserves | 15,600 | ||||
Predecessor | Healthcare Organization, Patient Service | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Patient service revenues | $ 170,928 | $ 278,195 | $ 736,408 | $ 822,966 | |
Predecessor | Healthcare Organization, Patient Service | Customer | Revenue | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Service revenues as a percentage of total revenues | 100.00% | 100.00% | 100.00% | 100.00% | |
Predecessor | Healthcare Organization, Patient Service | Private insurance | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Patient service revenues | $ 80,166 | $ 140,637 | $ 360,092 | $ 418,798 | |
Predecessor | Healthcare Organization, Patient Service | Private insurance | Customer | Revenue | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Service revenues as a percentage of total revenues | 46.90% | 50.60% | 48.90% | 50.90% | |
Predecessor | Healthcare Organization, Patient Service | Government | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Patient service revenues | $ 73,734 | $ 111,929 | $ 308,993 | $ 331,041 | |
Predecessor | Healthcare Organization, Patient Service | Government | Customer | Revenue | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Service revenues as a percentage of total revenues | 43.10% | 40.20% | 42.00% | 40.20% | |
Predecessor | Healthcare Organization, Patient Service | Self-pay | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Patient service revenues | $ 4,119 | $ 5,389 | $ 15,949 | $ 13,814 | |
Predecessor | Healthcare Organization, Patient Service | Self-pay | Customer | Revenue | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Service revenues as a percentage of total revenues | 2.40% | 1.90% | 2.20% | 1.70% | |
Predecessor | Healthcare Organization, Patient Service | Other | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Patient service revenues | $ 12,909 | $ 20,240 | $ 51,374 | $ 59,313 | |
Predecessor | Healthcare Organization, Patient Service | Other | Customer | Revenue | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Service revenues as a percentage of total revenues | 7.60% | 7.30% | 6.90% | 7.20% | |
Predecessor | Optical Services | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Other service revenues | $ 1,905 | $ 3,203 | $ 7,629 | $ 10,222 | |
Predecessor | Other | |||||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |||||
Other service revenues | $ 1,246 | $ 1,284 | $ 4,578 | $ 6,249 |
Significant Accounting Polici31
Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Third-Party Medicaid settlement liability | $ 1,400 | |
Optical products receivable | $ 8,369 | |
Predecessor | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Third-Party Medicaid settlement receivable | $ 454 | |
Optical products receivable | $ 7,042 |
Significant Accounting Polici32
Significant Accounting Policies - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule Of Prepaid Expenses And Other Current Assets [Line Items] | ||
Prepaid expenses | $ 18,418 | |
Receivables - optical product purchasing organization | 8,369 | |
Insurance recoveries | 2,837 | |
Tax refund receivable | 8,618 | |
Other current assets | 15,482 | |
Total | $ 53,724 | |
Predecessor | ||
Schedule Of Prepaid Expenses And Other Current Assets [Line Items] | ||
Prepaid expenses | $ 11,158 | |
Receivables - optical product purchasing organization | 7,042 | |
Insurance recoveries | 2,476 | |
Tax refund receivable | 0 | |
Other current assets | 11,338 | |
Total | $ 32,014 |
Significant Accounting Polici33
Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Schedule of Property, Plant and Equipment | ||
Property and equipment, gross | $ 391,426 | |
Less: accumulated depreciation | (2,729) | |
Property and equipment, net | 388,697 | |
Carrying value of assets under capital lease | 19,200 | |
Accumulated depreciation of assets under capital lease | (700) | |
Land | ||
Schedule of Property, Plant and Equipment | ||
Property and equipment, gross | 20,880 | |
Buildings and improvements | ||
Schedule of Property, Plant and Equipment | ||
Property and equipment, gross | 181,237 | |
Furniture and equipment | ||
Schedule of Property, Plant and Equipment | ||
Property and equipment, gross | $ 14,242 | |
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 | |
Computer and software | ||
Schedule of Property, Plant and Equipment | ||
Property and equipment, gross | $ 21,708 | |
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 | |
Medical equipment | ||
Schedule of Property, Plant and Equipment | ||
Property and equipment, gross | $ 140,198 | |
Construction in progress | ||
Schedule of Property, Plant and Equipment | ||
Property and equipment, gross | $ 13,161 | |
Predecessor | ||
Schedule of Property, Plant and Equipment | ||
Property and equipment, gross | $ 290,640 | |
Less: accumulated depreciation | (86,387) | |
Property and equipment, net | 204,253 | |
Carrying value of assets under capital lease | 15,400 | |
Accumulated depreciation of assets under capital lease | (11,600) | |
Predecessor | Land | ||
Schedule of Property, Plant and Equipment | ||
Property and equipment, gross | 8,082 | |
Predecessor | Buildings and improvements | ||
Schedule of Property, Plant and Equipment | ||
Property and equipment, gross | 118,172 | |
Predecessor | Furniture and equipment | ||
Schedule of Property, Plant and Equipment | ||
Property and equipment, gross | 14,670 | |
Predecessor | Computer and software | ||
Schedule of Property, Plant and Equipment | ||
Property and equipment, gross | 29,902 | |
Predecessor | Medical equipment | ||
Schedule of Property, Plant and Equipment | ||
Property and equipment, gross | 117,418 | |
Predecessor | Construction in progress | ||
Schedule of Property, Plant and Equipment | ||
Property and equipment, gross | $ 2,396 |
Significant Accounting Polici34
Significant Accounting Policies - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Aug. 31, 2017 | Sep. 30, 2017 | |
Intangible Assets [Roll Forward] | |||
Beginning balance | $ 56,750 | ||
Additions | 66 | ||
Recruitment expense | (38) | ||
Amortization | (271) | ||
Ending balance | 56,507 | $ 56,750 | $ 56,507 |
Certificates of Need | |||
Intangible Assets [Roll Forward] | |||
Beginning balance | 5,078 | ||
Additions | 25 | ||
Ending balance | 5,103 | 5,078 | 5,103 |
Physician Income Guarantees | |||
Intangible Assets [Roll Forward] | |||
Beginning balance | 878 | ||
Additions | 0 | ||
Recruitment expense | (38) | ||
Ending balance | 840 | 878 | $ 840 |
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 | ||
Management Rights | |||
Intangible Assets [Line Items] | |||
Intangible asset useful life | 15 years | ||
Intangible Assets [Roll Forward] | |||
Beginning balance | 41,600 | ||
Additions | 0 | ||
Amortization | (138) | ||
Ending balance | 41,462 | 41,600 | $ 41,462 |
Non-Compete Agreements | |||
Intangible Assets [Roll Forward] | |||
Beginning balance | 8,024 | ||
Additions | 41 | ||
Amortization | (84) | ||
Ending balance | 7,981 | 8,024 | $ 7,981 |
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 | 5 years | ||
Customer Relationships | |||
Intangible Assets [Roll Forward] | |||
Beginning balance | 0 | ||
Additions | 0 | ||
Amortization | 0 | ||
Ending balance | 0 | 0 | $ 0 |
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 | ||
Other | |||
Intangible Assets [Roll Forward] | |||
Beginning balance | 1,170 | ||
Additions | 0 | ||
Amortization | (49) | ||
Ending balance | 1,121 | 1,170 | $ 1,121 |
Predecessor | |||
Intangible Assets [Roll Forward] | |||
Beginning balance | 69,915 | 48,023 | 48,023 |
Additions | 28,312 | ||
Recruitment expense | (380) | ||
Amortization | (6,040) | ||
Ending balance | 69,915 | ||
Predecessor | Certificates of Need | |||
Intangible Assets [Roll Forward] | |||
Beginning balance | 4,525 | 3,780 | 3,780 |
Additions | 745 | ||
Ending balance | 4,525 | ||
Predecessor | Physician Income Guarantees | |||
Intangible Assets [Roll Forward] | |||
Beginning balance | 878 | 813 | 813 |
Additions | 445 | ||
Recruitment expense | (380) | ||
Ending balance | 878 | ||
Predecessor | Management Rights | |||
Intangible Assets [Roll Forward] | |||
Beginning balance | 47,036 | 21,290 | 21,290 |
Additions | 26,900 | ||
Amortization | (1,154) | ||
Ending balance | 47,036 | ||
Predecessor | Non-Compete Agreements | |||
Intangible Assets [Roll Forward] | |||
Beginning balance | 12,834 | 16,457 | 16,457 |
Additions | 92 | ||
Amortization | (3,715) | ||
Ending balance | 12,834 | ||
Predecessor | Customer Relationships | |||
Intangible Assets [Roll Forward] | |||
Beginning balance | 2,971 | 3,704 | 3,704 |
Amortization | (733) | ||
Ending balance | 2,971 | ||
Predecessor | Other | |||
Intangible Assets [Roll Forward] | |||
Beginning balance | $ 1,671 | 1,979 | $ 1,979 |
Additions | 130 | ||
Amortization | (438) | ||
Ending balance | $ 1,671 |
Significant Accounting Polici35
Significant Accounting Policies - Schedule of Rollforward of Goodwill (Details) - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended |
Sep. 30, 2017 | Aug. 31, 2017 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | $ 3,269,225 | |
Acquisitions | 1,214 | |
Divestitures | 0 | |
Purchase price adjustments | (130) | |
Goodwill, end of period | 3,270,309 | $ 3,269,225 |
Predecessor | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | $ 2,414,572 | 1,555,204 |
Acquisitions | 858,323 | |
Divestitures | (175) | |
Purchase price adjustments | 1,220 | |
Goodwill, end of period | $ 2,414,572 |
Significant Accounting Polici36
Significant Accounting Policies - Restricted Invested Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted invested assets | $ 315 | |
Chesterfield, Missouri facility | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted invested assets | $ 315 | |
Predecessor | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted invested assets | $ 315 | |
Predecessor | Chesterfield, Missouri facility | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted invested assets | $ 315 |
Significant Accounting Polici37
Significant Accounting Policies - Schedule of Other Long-Term Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Other Assets, Noncurrent [Line Items] | ||
Notes receivable | $ 2,853 | |
Deposits | 2,794 | |
Assets of SERP | 1,804 | |
Debt issuance costs | 0 | |
Insurance recoverable | 6,835 | |
Other | 4,847 | |
Total | $ 19,133 | |
Predecessor | ||
Other Assets, Noncurrent [Line Items] | ||
Notes receivable | $ 716 | |
Deposits | 4,196 | |
Assets of SERP | 1,725 | |
Debt issuance costs | 1,488 | |
Insurance recoverable | 6,835 | |
Other | 1,475 | |
Total | $ 16,435 |
Significant Accounting Polici38
Significant Accounting Policies - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Other Liabilities, Current [Line Items] | ||
Interest payable | $ 23,777 | |
Current taxes payable | 6,731 | |
Insurance liabilities | 10,287 | |
Amounts due to patients and payors | 15,087 | |
Tax receivable agreement liability | 837 | |
Contingent acquisition compensation liability | 7,866 | |
Contingent proceeds payable | 8,618 | |
Other accrued expenses | 33,076 | |
Total | $ 106,279 | |
Predecessor | ||
Other Liabilities, Current [Line Items] | ||
Interest payable | $ 19,206 | |
Current taxes payable | 2,622 | |
Insurance liabilities | 6,625 | |
Amounts due to patients and payors | 12,221 | |
Tax receivable agreement liability | 999 | |
Contingent acquisition compensation liability | 4,589 | |
Contingent proceeds payable | 0 | |
Other accrued expenses | 22,731 | |
Total | $ 68,993 |
Significant Accounting Polici39
Significant Accounting Policies - Schedule of Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Capital Leased Assets [Line Items] | ||
Facility lease obligations | $ 90,052 | |
Medical malpractice liability | 13,453 | |
Liability of SERP | 1,804 | |
Unfavorable lease liability | 7,893 | |
Other long-term liabilities | 3,597 | |
Total | 116,799 | |
Capital lease obligations | 16,340 | |
Idaho Falls, Idaho, Surgical Hospital | ||
Capital Leased Assets [Line Items] | ||
Current portion of lease obligation | 1,500 | |
Capital lease obligations | $ 90,100 | |
Predecessor | ||
Capital Leased Assets [Line Items] | ||
Facility lease obligations | $ 52,653 | |
Medical malpractice liability | 10,453 | |
Liability of SERP | 1,725 | |
Unfavorable lease liability | 1,671 | |
Other long-term liabilities | 9,764 | |
Total | 76,266 | |
Capital lease obligations | 13,996 | |
Predecessor | Idaho Falls, Idaho, Surgical Hospital | ||
Capital Leased Assets [Line Items] | ||
Current portion of lease obligation | 1,300 | |
Capital lease obligations | $ 52,700 |
Significant Accounting Polici40
Significant Accounting Policies - Professional, General and Workers' Compensation Insurance (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Professional, general and workers' compensation insurance reserve | $ 16.6 | |
Estimated insurance recoveries | $ 9.1 | |
Predecessor | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Professional, general and workers' compensation insurance reserve | $ 13.8 | |
Estimated insurance recoveries | $ 9.3 |
Significant Accounting Polici41
Significant Accounting Policies - Income Taxes and Tax Receivable Agreement (Details) - USD ($) $ in Millions | Sep. 08, 2017 | Sep. 30, 2017 | Aug. 31, 2017 | Aug. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2015 |
Income Tax Contingency [Line Items] | ||||||
Gain on amendment of TRA | $ 1.1 | |||||
Effective tax rate | 38.00% | |||||
Long-term tax receivable agreement liability | 120.5 | $ 120.5 | ||||
Former Chief Executive Officer | ||||||
Income Tax Contingency [Line Items] | ||||||
Interest in future payments assigned | 50.00% | |||||
Payments to related parties | $ 5.1 | |||||
Employees | ||||||
Income Tax Contingency [Line Items] | ||||||
Payments to related parties | $ 4.8 | |||||
Interest in future cash payments purchased | 100.00% | |||||
Predecessor | ||||||
Income Tax Contingency [Line Items] | ||||||
Reduction in carrying value of TRA | $ 43.9 | $ 43.9 | ||||
Gain on amendment of TRA | 15.3 | 15.3 | ||||
Long-term tax receivable agreement liability | $ 123.4 | |||||
Predecessor | Pushdown Accounting | ||||||
Income Tax Contingency [Line Items] | ||||||
Reduction to goodwill | $ 28.6 | $ 28.6 | ||||
Materially More Restrictive | LIBOR | ||||||
Income Tax Contingency [Line Items] | ||||||
Interest accrued on payment under Tax Receivable Agreement, basis spread on variable rate | 5.00% | |||||
Not Materially More Restrictive | LIBOR | ||||||
Income Tax Contingency [Line Items] | ||||||
Interest accrued on payment under Tax Receivable Agreement, basis spread on variable rate | 3.00% |
Acquisitions and Developments -
Acquisitions and Developments - Additional Information (Details) $ / shares in Units, $ in Thousands | Aug. 31, 2017USD ($)Anesthesia_Practice$ / shares | Aug. 31, 2017USD ($)surgical_facility$ / shares | Aug. 31, 2017USD ($)$ / shares | Aug. 31, 2017USD ($)surgical_hospital$ / shares | Sep. 30, 2017USD ($)Practice | Aug. 31, 2017USD ($)$ / shares | Sep. 30, 2017USD ($) | Jun. 30, 2017Practice | Sep. 30, 2016USD ($) | Aug. 31, 2017USD ($)Practice$ / shares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | ||||||||||||
Payments for acquisitions, net of cash acquired | $ 1,163 | |||||||||||
Merger transaction and integration costs | 2,983 | $ 2,300 | $ 1,900 | $ 5,600 | $ 6,400 | |||||||
Merger and integration costs | 3,457 | 2,400 | ||||||||||
Loss on debt refinancing costs | 16,400 | |||||||||||
Net loss attributable to Surgery Partners, Inc. | (9,140) | |||||||||||
Gain on amendment of TRA | 1,100 | |||||||||||
Loss on debt refinancing | 0 | |||||||||||
Goodwill | $ 3,269,225 | $ 3,269,225 | $ 3,269,225 | $ 3,269,225 | 3,270,309 | $ 3,269,225 | 3,270,309 | 3,269,225 | ||||
HIG | Bain Capital | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill expected to be deductible for tax | $ 360,500 | $ 360,500 | $ 360,500 | $ 360,500 | $ 360,500 | $ 360,500 | ||||||
Purchase price of acquisition (in USD per share) | $ / shares | $ 19 | $ 19 | $ 19 | $ 19 | $ 19 | $ 19 | ||||||
Cash consideration | $ 502,700 | |||||||||||
Equity interest prior to acquisition | 54.20% | 54.20% | 54.20% | 54.20% | 54.20% | 54.20% | ||||||
Equity interest subsequent to acquisition | 65.70% | 65.70% | 65.70% | 65.70% | 65.70% | 65.70% | ||||||
Goodwill | $ 3,269,225 | $ 3,269,225 | $ 3,269,225 | $ 3,269,225 | $ 3,269,225 | $ 3,269,225 | ||||||
Business acquisition total purchase price | 1,986,087 | |||||||||||
HIG | Bain Capital | Surgical Facility Services | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | 3,084,000 | 3,084,000 | 3,084,000 | 3,084,000 | 3,084,000 | 3,084,000 | ||||||
HIG | Bain Capital | Ancillary Services | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | 152,100 | 152,100 | 152,100 | 152,100 | 152,100 | 152,100 | ||||||
HIG | Bain Capital | Optical Services | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | 32,800 | 32,800 | 32,800 | 32,800 | 32,800 | 32,800 | ||||||
NSH | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Revenues | 34,000 | |||||||||||
Net loss attributable to Surgery Partners, Inc. | 3,400 | |||||||||||
Transaction costs | 3,000 | |||||||||||
Gain on amendment of TRA | $ 1,100 | |||||||||||
2017 Physician Practice Acquisitions | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Number of businesses acquired | Practice | 1 | |||||||||||
Endoscopy Practice Acquisitions, 2017 | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Number of businesses acquired | Practice | 1 | |||||||||||
Physician And Endoscopy Practice Acquisitions, 2017 | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | $ 1,200 | 1,200 | ||||||||||
Net assets acquired | 101 | 101 | ||||||||||
Business acquisition total purchase price | 1,200 | |||||||||||
Predecessor | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Payments for acquisitions, net of cash acquired | 725,853 | 126,018 | ||||||||||
Merger transaction and integration costs | 2,343 | 1,864 | 5,584 | 6,361 | ||||||||
Merger and integration costs | 2,949 | 2,471 | 7,677 | 8,579 | ||||||||
Net loss attributable to Surgery Partners, Inc. | (4,444) | (2,338) | (11,669) | (7,409) | ||||||||
Gain on amendment of TRA | 15,300 | 15,300 | ||||||||||
Loss on debt refinancing | 18,211 | 3,595 | 18,211 | 11,876 | ||||||||
Goodwill | 2,414,572 | 2,414,572 | 2,414,572 | 2,414,572 | 2,414,572 | 2,414,572 | $ 1,555,204 | |||||
Number of businesses acquired in existing market | Practice | 1 | |||||||||||
Predecessor | NSH | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Payments for acquisitions, net of cash acquired | 711,700 | |||||||||||
Funded to escrow | $ 19,600 | $ 19,600 | 19,600 | $ 19,600 | 19,600 | 19,600 | ||||||
Number of businesses acquired | 7 | 22 | 15 | |||||||||
Merger transaction and integration costs | 82,600 | 82,600 | ||||||||||
Deferred financing costs | $ 45,500 | $ 45,500 | 45,500 | $ 45,500 | 45,500 | 45,500 | ||||||
Deferred equity issuance costs | (18,300) | (18,300) | (18,300) | (18,300) | (18,300) | (18,300) | ||||||
Merger and integration costs | 2,400 | |||||||||||
Loss on debt refinancing costs | 16,400 | |||||||||||
Goodwill expected to be deductible for tax | $ 153,500 | $ 153,500 | ||||||||||
Transaction costs | 11,300 | 5,700 | ||||||||||
Gain on amendment of TRA | 15,300 | 15,300 | ||||||||||
Loss on debt refinancing | 18,200 | $ 3,600 | 18,200 | $ 11,900 | ||||||||
Cash consideration | 762,850 | |||||||||||
Goodwill | 845,185 | 845,185 | 845,185 | 845,185 | 845,185 | 845,185 | ||||||
Predecessor | 2017 Physician Practice Acquisitions | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash consideration | 14,200 | |||||||||||
Goodwill | 13,100 | 13,100 | 13,100 | 13,100 | 13,100 | $ 13,100 | ||||||
Number of businesses acquired in existing market | Practice | 3 | |||||||||||
Net assets acquired | $ 1,100 | $ 1,100 | $ 1,100 | $ 1,100 | $ 1,100 | $ 1,100 |
Acquisitions and Developments43
Acquisitions and Developments - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Aug. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Net assets acquired: | |||
Goodwill | $ 3,269,225 | $ 3,270,309 | |
Bain Capital | HIG | |||
Business Acquisition [Line Items] | |||
Cash consideration | 502,700 | ||
Equity attributable to Surgery Partners, Inc. | 720,606 | ||
Redeemable preferred stock | 310,000 | ||
Fair value of non-controlling interests | 955,481 | ||
Aggregate fair value | 1,986,087 | ||
Net assets acquired: | |||
Cash and cash equivalents | 214,206 | ||
Accounts receivable | 257,373 | ||
Inventories | 44,310 | ||
Prepaid expenses and other current assets | 54,248 | ||
Acquisition escrow deposit | 4,570 | ||
Property and equipment | 386,086 | ||
Intangible assets | 56,750 | ||
Goodwill | 3,269,225 | ||
Investments in and advances to affiliates | 64,243 | ||
Restricted invested assets | 315 | ||
Long-term deferred tax assets | 208,935 | ||
Long-term acquisition escrow deposit | 19,600 | ||
Other long-term assets | 19,427 | ||
Accounts payable | (64,921) | ||
Accrued payroll and benefits | (52,995) | ||
Acquisition escrow liability | (4,570) | ||
Other current liabilities | (83,317) | ||
Current maturities of long-term debt | (49,942) | ||
Long-term debt, less current maturities | (2,142,375) | ||
Long-term tax receivable agreement liability | (78,498) | ||
Long-term acquisition escrow liability | (19,600) | ||
Other long-term liabilities | (116,983) | ||
Total fair value of net assets acquired | 1,986,087 | ||
Predecessor | |||
Net assets acquired: | |||
Goodwill | 2,414,572 | $ 1,555,204 | |
Predecessor | NSH | |||
Business Acquisition [Line Items] | |||
Cash consideration | 762,850 | ||
Fair value of non-controlling interests | 325,965 | ||
Aggregate fair value of acquisition | 1,088,815 | ||
Net assets acquired: | |||
Cash and cash equivalents | 51,159 | ||
Accounts receivable | 76,101 | ||
Inventories | 14,986 | ||
Prepaid expenses and other current assets | 18,007 | ||
Property and equipment | 174,374 | ||
Intangible assets | 27,741 | ||
Goodwill | 845,185 | ||
Investments in and advances to affiliates | 29,737 | ||
Long-term deferred tax assets | 28,182 | ||
Long-term acquisition escrow deposit | 19,600 | ||
Other long-term assets | 5,309 | ||
Accounts payable | (29,652) | ||
Accrued payroll and benefits | (27,313) | ||
Other current liabilities | (18,355) | ||
Current maturities of long-term debt | (16,416) | ||
Long-term debt, less current maturities | (42,770) | ||
Long-term acquisition escrow liability | (19,600) | ||
Other long-term liabilities | (47,460) | ||
Total fair value of net assets acquired | $ 1,088,815 |
Acquisitions and Developments44
Acquisitions and Developments - Proforma Information (Details) - NSH - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Aug. 31, 2017 | Sep. 30, 2016 | Aug. 31, 2017 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | |||||
Net revenues | $ 132,258 | ||||
Net (loss) income | (763) | ||||
Less: Net income attributable to non-controlling interests | (6,492) | ||||
Net (loss) income attributable to Surgery Partners, Inc. | $ (7,255) | ||||
Predecessor | |||||
Business Acquisition [Line Items] | |||||
Net revenues | $ 267,013 | $ 415,764 | $ 1,122,326 | $ 1,235,472 | |
Net (loss) income | 13,331 | 28,304 | 63,269 | 82,275 | |
Less: Net income attributable to non-controlling interests | (13,184) | (25,207) | (65,122) | (78,356) | |
Net (loss) income attributable to Surgery Partners, Inc. | $ 147 | $ 3,097 | $ (1,853) | $ 3,919 |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Aug. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Capital lease obligations | $ 16,340 | ||
Less: unamortized debt issuance costs and discount | 0 | ||
Debt and capital lease obligations | 2,193,334 | ||
Less: Current maturities | 48,472 | ||
Total long-term debt | 2,144,862 | ||
Line of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | ||
Line of Credit | 2014 First Lien Credit Agreement | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | ||
Secured Debt | 2017 Senior Secured Credit Facility - Term Loan | |||
Debt Instrument [Line Items] | |||
Long-term debt | 1,283,626 | ||
Secured Debt | Revolving Credit Facility | 2017 Senior Secured Credit Facility - Revolver | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | ||
Senior Notes | Senior Unsecured Notes Due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 409,821 | ||
Senior Notes | Senior Unsecured Notes Due 2025 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 370,000 | ||
Subordinated Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | ||
Notes payable and secured loans | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 113,547 | ||
Predecessor | |||
Debt Instrument [Line Items] | |||
Capital lease obligations | $ 13,996 | ||
Less: unamortized debt issuance costs and discount | (32,274) | ||
Debt and capital lease obligations | 1,442,243 | ||
Less: Current maturities | 27,822 | ||
Total long-term debt | 1,414,421 | ||
Predecessor | Line of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | 85,000 | ||
Predecessor | Line of Credit | 2014 First Lien Credit Agreement | |||
Debt Instrument [Line Items] | |||
Long-term debt | 932,000 | ||
Predecessor | Secured Debt | 2017 Senior Secured Credit Facility - Term Loan | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | ||
Less: unamortized debt issuance costs and discount | $ (18,800) | ||
Predecessor | Secured Debt | Revolving Credit Facility | 2017 Senior Secured Credit Facility - Revolver | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | ||
Less: unamortized debt issuance costs and discount | $ (9,400) | ||
Predecessor | Senior Notes | Senior Unsecured Notes Due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 400,000 | ||
Predecessor | Senior Notes | Senior Unsecured Notes Due 2025 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | ||
Predecessor | Subordinated Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | 1,000 | ||
Predecessor | Notes payable and secured loans | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 42,521 |
Long-Term Debt - 2014 Revolver
Long-Term Debt - 2014 Revolver Loan & 2014 First Lien Credit Agreement (Details) | Aug. 31, 2017USD ($) | Aug. 31, 2017USD ($) | Aug. 31, 2017USD ($) |
Debt Instrument [Line Items] | |||
Loss on debt refinancing costs | $ 16,400,000 | ||
2014 Revolver and First Lien Credit Agreement Loans | Predecessor | Revolving Credit Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Total prepayment amount | $ 1,030,000,000 | ||
Principal amount of debt redeemed | 1,026,800,000 | $ 1,026,800,000 | 1,026,800,000 |
Accrued and unpaid interest | $ 3,000,000 | ||
Loss on debt refinancing costs | $ 18,200,000 | $ 18,200,000 |
Long-Term Debt - 2014 Second Li
Long-Term Debt - 2014 Second Lien Credit Agreement (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2017 | Aug. 31, 2017 | Sep. 30, 2016 | Aug. 31, 2017 | Sep. 30, 2016 |
Debt Instrument [Line Items] | ||||||
Loss on debt refinancing | $ 0 | |||||
Predecessor | ||||||
Debt Instrument [Line Items] | ||||||
Loss on debt refinancing | $ 18,211 | $ 3,595 | $ 18,211 | $ 11,876 | ||
Predecessor | 2014 Second Lien Credit Agreement | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Loss on debt refinancing | $ 8,300 |
Long-Term Debt - 2017 Senior Se
Long-Term Debt - 2017 Senior Secured Credit Facilities (Details) - USD ($) $ in Thousands | Aug. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Debt issuance costs and discount | $ 0 | ||
Predecessor | |||
Debt Instrument [Line Items] | |||
Debt issuance costs and discount | $ 32,274 | ||
Line of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt remaining borrowing capacity | 71,900 | ||
Line of Credit | Letter of Credit | |||
Debt Instrument [Line Items] | |||
Debt remaining borrowing capacity | $ 3,100 | ||
2017 Senior Secured Credit Facility - Term Loan | Secured Debt | |||
Debt Instrument [Line Items] | |||
Debt repayment threshold | 50.00% | ||
Quarterly maturity installments | 0.25% | ||
2017 Senior Secured Credit Facility - Term Loan | Secured Debt | Predecessor | |||
Debt Instrument [Line Items] | |||
Debt, face amount | $ 1,290,000 | ||
Debt issuance costs and discount | $ 18,800 | ||
2017 Senior Secured Credit Facility - Revolver | Secured Debt | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt repayment threshold | 50.00% | ||
Unused commitment fee | 0.50% | ||
Net leverage ratio | 9.50 | ||
Total commitment threshold | 35.00% | ||
2017 Senior Secured Credit Facility - Revolver | Secured Debt | Predecessor | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt, face amount | $ 75,000 | ||
Debt issuance costs and discount | $ 9,400 | ||
2017 Senior Secured Credit Facilities | Secured Debt | Federal Funds Effective Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 0.50% | ||
2017 Senior Secured Credit Facilities | Secured Debt | One Month LIBOR | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 1.00% | ||
2017 Senior Secured Credit Facilities | Secured Debt | Base Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 2.00% | ||
2017 Senior Secured Credit Facilities | Secured Debt | Minimum | LIBOR | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 3.00% | ||
2017 Senior Secured Credit Facilities | Secured Debt | Minimum | Base Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument, margin in addition to base rate | 2.00% | ||
2017 Senior Secured Credit Facilities | Secured Debt | Maximum | LIBOR | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 3.25% | ||
2017 Senior Secured Credit Facilities | Secured Debt | Maximum | Base Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument, margin in addition to base rate | 2.25% |
Long-Term Debt - Senior Unsecur
Long-Term Debt - Senior Unsecured Notes Due 2021 (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2017 | Aug. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | |
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 0 | |||
Senior Notes | Senior Unsecured Notes Due 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, stated rate | 8.875% | |||
Senior Notes | Senior Unsecured Notes Due 2021 | Redemption Period One | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, redeemable percentage of aggregate principal | 35.00% | |||
Redemption price, percentage of principal, proceeds from equity offerings | 108.875% | |||
Required remaining principal balance, after redemption | 50.00% | |||
Debt redemption, required period after closing of equity offering | 180 days | |||
Redemption price, percentage of principal | 100.00% | |||
Senior Notes | Senior Unsecured Notes Due 2021 | April 15, 2018 to April 14, 2019 | ||||
Debt Instrument [Line Items] | ||||
Redemption price, percentage of principal | 106.656% | |||
Senior Notes | Senior Unsecured Notes Due 2021 | April 15, 2019 to April 14, 2020 | ||||
Debt Instrument [Line Items] | ||||
Redemption price, percentage of principal | 104.438% | |||
Senior Notes | Senior Unsecured Notes Due 2021 | April 15, 2020 and thereafter | ||||
Debt Instrument [Line Items] | ||||
Redemption price, percentage of principal | 100.00% | |||
Senior Notes | Senior Unsecured Notes Due 2021 | Change in control | ||||
Debt Instrument [Line Items] | ||||
Redemption price, percentage of principal | 101.00% | |||
Predecessor | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 1,488,000 | |||
Predecessor | Senior Notes | Senior Unsecured Notes Due 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt, face amount | $ 400,000,000 | |||
Debt issuance costs | $ 8,400,000 |
Long-Term Debt - Senior Unsec50
Long-Term Debt - Senior Unsecured Notes Due 2025 (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2017 | Aug. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 0 | |||
Senior Notes | Senior Unsecured Notes Due 2025 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, stated rate | 6.75% | |||
Senior Notes | Senior Unsecured Notes Due 2025 | Redemption Period One | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, redeemable percentage of aggregate principal | 40.00% | |||
Redemption price, percentage of principal, proceeds from equity offerings | 106.75% | |||
Required remaining principal balance, after redemption | 50.00% | |||
Debt redemption, required period after closing of equity offering | 180 days | |||
Redemption price, percentage of principal | 100.00% | |||
Senior Notes | Senior Unsecured Notes Due 2025 | July 1, 2020 to June 30, 2021 | ||||
Debt Instrument [Line Items] | ||||
Redemption price, percentage of principal | 103.375% | |||
Senior Notes | Senior Unsecured Notes Due 2025 | July 1, 2021 to June 30, 2022 | ||||
Debt Instrument [Line Items] | ||||
Redemption price, percentage of principal | 101.688% | |||
Senior Notes | Senior Unsecured Notes Due 2025 | July 1, 2022 and thereafter | ||||
Debt Instrument [Line Items] | ||||
Redemption price, percentage of principal | 100.00% | |||
Senior Notes | Senior Unsecured Notes Due 2025 | Change in control | ||||
Debt Instrument [Line Items] | ||||
Redemption price, percentage of principal | 101.00% | |||
Predecessor | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ 1,488,000 | |||
Predecessor | Senior Notes | Senior Unsecured Notes Due 2025 | ||||
Debt Instrument [Line Items] | ||||
Debt, face amount | $ 370,000,000 | |||
Debt issuance costs | $ 17,300,000 |
Long-Term Debt - Additional (De
Long-Term Debt - Additional (Details) - USD ($) | Aug. 03, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Capital leased assets | $ 19,200,000 | ||
Subordinated Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt, carrying value | 0 | ||
Notes payable and secured loans | |||
Debt Instrument [Line Items] | |||
Long-term debt, carrying value | $ 113,547,000 | ||
Predecessor | |||
Debt Instrument [Line Items] | |||
Capital leased assets | $ 15,400,000 | ||
Predecessor | Subordinated Notes | |||
Debt Instrument [Line Items] | |||
Principal amount of debt redeemed | $ 1,000,000 | ||
Debt instrument, stated rate | 17.00% | ||
Redemption price, percentage of principal | 100.00% | ||
Long-term debt, carrying value | 1,000,000 | ||
Predecessor | Notes payable and secured loans | |||
Debt Instrument [Line Items] | |||
Long-term debt, carrying value | $ 42,521,000 |
Redeemable Preferred Stock (Det
Redeemable Preferred Stock (Details) $ / shares in Units, $ in Thousands | Aug. 31, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2017USD ($)trading_days$ / shares |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
September 1, 2017 | $ 310,000 | ||
Dividends accrued | 2,633 | ||
Cash dividends declared | (1,316) | ||
Mark to redemption adjustment | 15,566 | ||
September 30, 2017 | $ 310,000 | $ 326,882 | $ 326,882 |
Series A Preferred Stock | |||
Temporary Equity [Line Items] | |||
Preferred stock dividend rate | 10.00% | ||
Trading days | trading_days | 20 | ||
Consecutive trading days | trading_days | 30 | ||
Threshold share price (in USD per share) | $ / shares | $ 42 | ||
Maximum cash dividend declarable | 50.00% | ||
Redemption price (in USD per share) | $ / shares | $ 1,000 | $ 1,000 | |
Series A Preferred Stock | Common Stock | |||
Temporary Equity [Line Items] | |||
Share price (in USD per share) | $ / shares | $ 19 | $ 19 | |
Predecessor | NSH | |||
Temporary Equity [Line Items] | |||
Deferred equity issuance costs | $ (18,300) | ||
Majority Shareholder | Series A Preferred Stock | |||
Temporary Equity [Line Items] | |||
Stock issued during period (shares) | shares | 310,000 | ||
Purchase price per share (in USD per share) | $ / shares | $ 1,000 | ||
Proceeds from issuance of preferred shares | $ 310,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Aug. 31, 2017 | Sep. 30, 2016 | Aug. 31, 2017 | Sep. 30, 2016 | ||
Numerator: | ||||||
Net loss attributable to Surgery Partners, Inc. | $ (9,140) | |||||
Less: amounts allocated to participating securities | 2,633 | |||||
Less: mark to redemption adjustment | 15,566 | |||||
Net loss attributable to common stockholders | $ (27,339) | |||||
Denominator: | ||||||
Weighted average shares outstanding- basic (shares) | 48,314,746 | |||||
Effect of dilutive securities (shares) | 0 | |||||
Weighted average shares outstanding- diluted (shares) | [1] | 48,314,746 | ||||
Loss per share: | ||||||
Basic (in USD per share) | [2] | $ (0.57) | ||||
Diluted (in USD per share) | [1],[2] | $ (0.57) | ||||
Stock options | ||||||
Loss per share: | ||||||
Antidilutive securities excluded from computation of (loss) earnings per share (shares) | 0 | |||||
Restricted shares | ||||||
Loss per share: | ||||||
Antidilutive securities excluded from computation of (loss) earnings per share (shares) | 112,529 | |||||
Convertible preferred stock | ||||||
Loss per share: | ||||||
Antidilutive securities excluded from computation of (loss) earnings per share (shares) | 0 | |||||
Predecessor | ||||||
Numerator: | ||||||
Net loss attributable to Surgery Partners, Inc. | $ (4,444) | $ (2,338) | $ (11,669) | $ (7,409) | ||
Less: amounts allocated to participating securities | 0 | 0 | 0 | 0 | ||
Less: mark to redemption adjustment | 0 | 0 | 0 | 0 | ||
Net loss attributable to common stockholders | $ (4,444) | $ (2,338) | $ (11,669) | $ (7,409) | ||
Denominator: | ||||||
Weighted average shares outstanding- basic (shares) | 48,146,611 | 48,019,652 | 48,121,404 | 48,018,706 | ||
Effect of dilutive securities (shares) | 0 | 0 | 0 | 0 | ||
Weighted average shares outstanding- diluted (shares) | [1] | 48,146,611 | 48,019,652 | 48,121,404 | 48,018,706 | |
Loss per share: | ||||||
Basic (in USD per share) | [2] | $ (0.09) | $ (0.05) | $ (0.24) | $ (0.15) | |
Diluted (in USD per share) | [1],[2] | $ (0.09) | $ (0.05) | $ (0.24) | $ (0.15) | |
Predecessor | Stock options | ||||||
Loss per share: | ||||||
Antidilutive securities excluded from computation of (loss) earnings per share (shares) | 0 | 586 | 0 | 345 | ||
Predecessor | Restricted shares | ||||||
Loss per share: | ||||||
Antidilutive securities excluded from computation of (loss) earnings per share (shares) | 34,506 | 369,545 | 105,944 | 337,915 | ||
[1] | The impact of potentially dilutive securities for all periods presented was not considered because the effect would be anti-dilutive in those periods. | |||||
[2] | Includes the impact of amounts allocated to participating securities. See Note 6. "Earnings Per Share" for the calculation of net loss per share attributable to common stockholders. |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Apr. 20, 2017USD ($) | Dec. 24, 2009USD ($)Entity | Sep. 30, 2017USD ($) | Aug. 31, 2017USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Aug. 31, 2017USD ($) | Sep. 30, 2016USD ($) |
Guarantor Obligations [Line Items] | ||||||||
Total settlement amount | $ 0 | |||||||
Q2 Period Ended, 2016 Acquisition | ||||||||
Guarantor Obligations [Line Items] | ||||||||
Contingent consideration, liability | 15,700,000 | |||||||
Q2 Period Ended, 2016 Acquisition | General and Administrative Expense | ||||||||
Guarantor Obligations [Line Items] | ||||||||
Contingent acquisition compensation expense | $ 605,000 | |||||||
Predecessor | ||||||||
Guarantor Obligations [Line Items] | ||||||||
Total settlement amount | $ 0 | $ 0 | $ 3,794,000 | $ 0 | ||||
Predecessor | Purchase Agreement | ||||||||
Guarantor Obligations [Line Items] | ||||||||
Number of business entities acquired | Entity | 36 | |||||||
Maximum potential contingent consideration | $ 10,000,000 | |||||||
Total settlement amount | $ 3,900,000 | $ 3,800,000 | ||||||
Amount of settlement paid from escrow | 2,700,000 | |||||||
Amount of settlement paid by seller | $ 1,200,000 | |||||||
Predecessor | Q2 Period Ended, 2016 Acquisition | General and Administrative Expense | ||||||||
Guarantor Obligations [Line Items] | ||||||||
Contingent acquisition compensation expense | $ 1,200,000 | $ 1,500,000 | $ 5,100,000 | $ 3,100,000 |
Segment Reporting - Revenues by
Segment Reporting - Revenues by Reportable Segment (Details) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Sep. 30, 2017USD ($) | Aug. 31, 2017USD ($) | Sep. 30, 2016USD ($) | Aug. 31, 2017USD ($) | Sep. 30, 2017segment | Sep. 30, 2016USD ($) | |
Segment Reporting Information [Line Items] | ||||||
Number of operating segments | segment | 3 | |||||
Revenues | $ 132,258 | |||||
Surgical Facility Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 125,595 | |||||
Ancillary Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 5,775 | |||||
Optical Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | $ 888 | |||||
Predecessor | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | $ 174,079 | $ 282,682 | $ 748,615 | $ 839,437 | ||
Predecessor | Surgical Facility Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 167,765 | 256,795 | 688,725 | 766,248 | ||
Predecessor | Ancillary Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 4,409 | 22,684 | 52,261 | 62,967 | ||
Predecessor | Optical Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | $ 1,905 | $ 3,203 | $ 7,629 | $ 10,222 |
Segment Reporting - Segment Ope
Segment Reporting - Segment Operating Income (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Aug. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Aug. 31, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||||
Total segment adjusted EBITDA | $ 14,842 | |||||
All other | (5,033) | |||||
Net income attributable to non-controlling interests | 6,492 | |||||
Depreciation and amortization | (3,330) | |||||
Interest expense, net | (15,883) | |||||
Non-cash stock compensation expense | (1,683) | |||||
Contingent acquisition compensation expense | (605) | |||||
Merger transaction, integration and practice acquisition costs | (3,457) | $ (2,400) | ||||
Gain on litigation settlement | 0 | |||||
Gain on acquisition escrow release | 0 | |||||
Loss on disposal or impairment of long-lived assets, net | (333) | |||||
Gain on amendment to tax receivable agreement | 1,098 | |||||
Tax receivable agreement expense | 0 | |||||
Loss on debt refinancing | 0 | |||||
(Loss) income before income taxes | (2,859) | |||||
Merger transaction and integration costs | 2,983 | $ 2,300 | $ 1,900 | 5,600 | $ 6,400 | |
Practice acquisition costs | 474 | $ 606 | 607 | 2,100 | 2,200 | |
Operating Segments | Surgical Facility Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Total segment adjusted EBITDA | 20,947 | |||||
Operating Segments | Ancillary Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Total segment adjusted EBITDA | (1,265) | |||||
Operating Segments | Optical Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Total segment adjusted EBITDA | $ 193 | |||||
Predecessor | ||||||
Segment Reporting Information [Line Items] | ||||||
Total segment adjusted EBITDA | 8,402 | 44,748 | 85,564 | 129,205 | ||
All other | (9,142) | (12,448) | (36,036) | (36,258) | ||
Net income attributable to non-controlling interests | 8,813 | 16,672 | 42,087 | 54,392 | ||
Depreciation and amortization | (7,599) | (9,713) | (30,124) | (28,984) | ||
Interest expense, net | (18,147) | (26,475) | (68,929) | (74,863) | ||
Non-cash stock compensation expense | (1,628) | (691) | (3,697) | (1,326) | ||
Contingent acquisition compensation expense | (1,210) | (1,530) | (5,057) | (3,060) | ||
Merger transaction, integration and practice acquisition costs | (2,949) | (2,471) | (7,677) | (8,579) | ||
Gain on litigation settlement | 0 | 0 | 3,794 | 0 | ||
Gain on acquisition escrow release | 1,000 | 0 | 1,000 | 0 | ||
Loss on disposal or impairment of long-lived assets, net | (114) | (572) | (1,715) | (1,697) | ||
Gain on amendment to tax receivable agreement | 15,294 | 0 | 15,294 | 0 | ||
Tax receivable agreement expense | 0 | (3,733) | 0 | (3,733) | ||
Loss on debt refinancing | (18,211) | (3,595) | (18,211) | (11,876) | ||
(Loss) income before income taxes | (16,349) | 12,640 | 12,329 | 49,479 | ||
Merger transaction and integration costs | 2,343 | 1,864 | 5,584 | 6,361 | ||
Predecessor | Operating Segments | Surgical Facility Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Total segment adjusted EBITDA | 27,726 | 53,347 | 125,912 | 153,318 | ||
Predecessor | Operating Segments | Ancillary Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Total segment adjusted EBITDA | (10,737) | 2,573 | (6,526) | 9,141 | ||
Predecessor | Operating Segments | Optical Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Total segment adjusted EBITDA | $ 555 | $ 1,276 | $ 2,214 | $ 3,004 |
Segment Reporting - Assets by O
Segment Reporting - Assets by Operating Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | ||
Assets | $ 4,601,854 | |
Predecessor | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 2,304,958 | |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | 4,196,323 | |
Operating Segments | Surgical Facility Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 3,969,584 | |
Operating Segments | Ancillary Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 183,288 | |
Operating Segments | Optical Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 43,451 | |
Operating Segments | Predecessor | ||
Segment Reporting Information [Line Items] | ||
Assets | 2,121,322 | |
Operating Segments | Predecessor | Surgical Facility Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,914,842 | |
Operating Segments | Predecessor | Ancillary Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 184,002 | |
Operating Segments | Predecessor | Optical Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 22,478 | |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 405,531 | |
Corporate, Non-Segment | Predecessor | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 183,636 |
Segment Reporting - Cash Purcha
Segment Reporting - Cash Purchases of Property and Equipment (Details) - USD ($) $ in Thousands | 1 Months Ended | 8 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Aug. 31, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | $ 1,840 | ||
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | 1,638 | ||
Operating Segments | Surgical Facility Services | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | 1,613 | ||
Operating Segments | Ancillary Services | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | 2 | ||
Operating Segments | Optical Services | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | 23 | ||
Corporate, Non-Segment | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | $ 202 | ||
Predecessor | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | $ 18,773 | $ 28,377 | |
Predecessor | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | 16,530 | 24,924 | |
Predecessor | Operating Segments | Surgical Facility Services | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | 14,582 | 21,151 | |
Predecessor | Operating Segments | Ancillary Services | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | 1,875 | 3,450 | |
Predecessor | Operating Segments | Optical Services | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | 73 | 323 | |
Predecessor | Corporate, Non-Segment | |||
Segment Reporting Information [Line Items] | |||
Purchases of property and equipment, net | $ 2,243 | $ 3,453 |