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Three Months Ended March 31, | |||||
2017 | 2016 | ||||
Medicare | 75.2 | % | 75.4 | % | |
Medicare Advantage | 8.8 | % | 7.8 | % | |
Managed care | 9.9 | % | 9.5 | % | |
Medicaid | 2.6 | % | 3.4 | % | |
Other third-party payors | 1.2 | % | 1.4 | % | |
Workers’ compensation | 0.8 | % | 0.9 | % | |
Patients | 0.5 | % | 0.5 | % | |
Other income | 1.0 | % | 1.1 | % | |
Total | 100.0 | % | 100.0 | % |
Three Months Ended March 31, | |||||
2017 | 2016 | ||||
Medicare | 73.3 | % | 73.8 | % | |
Medicare Advantage | 8.5 | % | 7.6 | % | |
Managed care | 11.2 | % | 11.0 | % | |
Medicaid | 2.8 | % | 3.0 | % | |
Other third-party payors | 1.5 | % | 1.6 | % | |
Workers’ compensation | 0.9 | % | 1.1 | % | |
Patients | 0.6 | % | 0.6 | % | |
Other income | 1.2 | % | 1.3 | % | |
Total | 100.0 | % | 100.0 | % |
Three Months Ended March 31, | |||||
2017 | 2016 | ||||
Medicare | 84.1 | % | 83.5 | % | |
Medicare Advantage | 10.3 | % | 8.7 | % | |
Managed care | 4.0 | % | 2.7 | % | |
Medicaid | 1.4 | % | 4.9 | % | |
Patients | 0.1 | % | 0.1 | % | |
Other income | 0.1 | % | 0.1 | % | |
Total | 100.0 | % | 100.0 | % |
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• | In February 2017, we acquired the assets of Celtic Healthcare of Maryland, Inc. (“Celtic”), a home health provider with locations in Owings Mill, Maryland and Rockville, Maryland. |
• | In February 2017, we also acquired the assets of two home health locations from Community Health Services, Inc. (“Community”), located in Owensboro, Kentucky and Elizabethtown, Kentucky. |
Identifiable intangible asset: | |||
Noncompete agreements (useful lives of 5 years) | $ | 0.1 | |
Trade name (useful life of 1 year) | 0.1 | ||
Certificates of need (useful lives of 10 years) | 0.7 | ||
Licenses (useful lives of 10 years) | 0.4 | ||
Goodwill | 4.2 | ||
Total assets acquired | $ | 5.5 |
Three Months Ended March 31, | |||
2017 | |||
Fair value of assets acquired | $ | 1.3 | |
Goodwill | 4.2 | ||
Net cash paid for acquisitions | $ | 5.5 |
Net Operating Revenues | Net Income Attributable to HealthSouth | ||||||
Acquired entities only: Actual from acquisition date to March 31, 2017 | $ | 0.4 | $ | 0.1 | |||
Combined entity: Supplemental pro forma from 01/01/2017-03/31/2017 | 975.2 | 66.8 | |||||
Combined entity: Supplemental pro forma from 01/01/2016-03/31/2016 | 910.8 | 57.9 |
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March 31, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1.6 | $ | 1.6 | |||
Accounts receivable, net of allowance for doubtful accounts | 31.1 | 30.8 | |||||
Other current assets | 4.2 | 5.8 | |||||
Total current assets | 36.9 | 38.2 | |||||
Property and equipment, net | 141.2 | 140.0 | |||||
Goodwill | 73.5 | 73.5 | |||||
Intangible assets, net | 9.0 | 9.6 | |||||
Other long-term assets | 0.9 | 1.0 | |||||
Total assets | $ | 261.5 | $ | 262.3 | |||
Liabilities | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 1.6 | $ | 1.5 | |||
Accounts payable | 5.9 | 6.8 | |||||
Accrued expenses and other current liabilities | 12.5 | 12.2 | |||||
Total current liabilities | 20.0 | 20.5 | |||||
Long-term debt, net of current portion | 29.6 | 29.8 | |||||
Total liabilities | $ | 49.6 | $ | 50.3 |
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Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net operating revenues | $ | 10.8 | $ | 11.2 | |||
Operating expenses | (6.3 | ) | (6.2 | ) | |||
Income from continuing operations, net of tax | 4.4 | 5.0 | |||||
Net income | 4.4 | 5.0 |
|
March 31, 2017 | December 31, 2016 | ||||||
Credit Agreement— | |||||||
Advances under revolving credit facility | $ | 85.0 | $ | 152.0 | |||
Term loan facilities | 415.7 | 421.2 | |||||
Bonds payable— | |||||||
5.125% Senior Notes due 2023 | 295.4 | 295.3 | |||||
5.75% Senior Notes due 2024 | 1,193.4 | 1,193.2 | |||||
5.75% Senior Notes due 2025 | 344.0 | 343.9 | |||||
2.00% Convertible Senior Subordinated Notes due 2043 | 278.2 | 275.7 | |||||
Other notes payable | 63.1 | 55.8 | |||||
Capital lease obligations | 278.6 | 279.3 | |||||
2,953.4 | 3,016.4 | ||||||
Less: Current portion | (37.9 | ) | (37.1 | ) | |||
Long-term debt, net of current portion | $ | 2,915.5 | $ | 2,979.3 |
Face Amount | Net Amount | ||||||
April 1 through December 31, 2017 | $ | 28.4 | $ | 28.4 | |||
2018 | 38.6 | 38.6 | |||||
2019 | 39.7 | 39.7 | |||||
2020 | 769.3 | 726.3 | |||||
2021 | 10.8 | 10.8 | |||||
2022 | 24.9 | 24.9 | |||||
Thereafter | 2,101.9 | 2,084.7 | |||||
Total | $ | 3,013.6 | $ | 2,953.4 |
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Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Balance at beginning of period | $ | 138.3 | $ | 121.1 | |||
Net income attributable to noncontrolling interests | 3.1 | 3.9 | |||||
Distributions declared | (1.9 | ) | (2.1 | ) | |||
Change in fair value | 13.9 | (26.7 | ) | ||||
Balance at end of period | $ | 153.4 | $ | 96.2 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net income attributable to nonredeemable noncontrolling interests | $ | 14.5 | $ | 14.8 | |||
Net income attributable to redeemable noncontrolling interests | 3.1 | 3.9 | |||||
Net income attributable to noncontrolling interests | $ | 17.6 | $ | 18.7 |
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Fair Value Measurements at Reporting Date Using | |||||||||||||||||
As of March 31, 2017 | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Valuation Technique (1) | ||||||||||||
Other current assets: | |||||||||||||||||
Current portion of restricted marketable securities | $ | 17.5 | $ | — | $ | 17.5 | $ | — | M | ||||||||
Other long-term assets: | |||||||||||||||||
Restricted marketable securities | 36.8 | — | 36.8 | — | M | ||||||||||||
Redeemable noncontrolling interests | 153.4 | — | — | 153.4 | I | ||||||||||||
As of December 31, 2016 | |||||||||||||||||
Other current assets: | |||||||||||||||||
Current portion of restricted marketable securities | $ | 24.2 | $ | — | $ | 24.2 | $ | — | M | ||||||||
Other long-term assets: | |||||||||||||||||
Restricted marketable securities | 33.5 | — | 33.5 | — | M | ||||||||||||
Redeemable noncontrolling interests | 138.3 | — | — | 138.3 | I |
• | Restricted marketable securities - The fair values of our available-for-sale restricted marketable securities are determined based on quoted market prices in active markets or quoted prices, dealer quotations, or alternative pricing sources supported by observable inputs in markets that are not considered to be active. |
• | Redeemable noncontrolling interests - The fair value of the Redeemable noncontrolling interest related to our home health segment is determined using the product of a twelve-month specified performance measure and a specified median market price multiple based on a basket of public health companies. To determine the fair value of the Redeemable noncontrolling interests in our joint venture hospitals, we use the applicable hospitals’ projected operating results and cash flows discounted using a rate that reflects market participant assumptions for the applicable facilities. The projected operating results use management’s best estimates of economic and market conditions over the forecasted periods including assumptions for pricing and volume, operating expenses, and capital expenditures. See also Note 6, Redeemable Noncontrolling Interests. |
As of March 31, 2017 | As of December 31, 2016 | ||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
Long-term debt: | |||||||||||||||
Advances under revolving credit facility | $ | 85.0 | $ | 85.0 | $ | 152.0 | $ | 152.0 | |||||||
Term loan facilities | 415.7 | 416.9 | 421.2 | 422.5 | |||||||||||
5.125% Senior Notes due 2023 | 295.4 | 301.5 | 295.3 | 297.8 | |||||||||||
5.75% Senior Notes due 2024 | 1,193.4 | 1,206.0 | 1,193.2 | 1,216.6 | |||||||||||
5.75% Senior Notes due 2025 | 344.0 | 349.6 | 343.9 | 349.6 | |||||||||||
2.00% Convertible Senior Subordinated Notes due 2043 | 278.2 | 390.8 | 275.7 | 382.6 | |||||||||||
Other notes payable | 63.1 | 63.1 | 55.8 | 55.8 | |||||||||||
Financial commitments: | |||||||||||||||
Letters of credit | — | 36.4 | — | 33.3 |
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Gross Unrecognized Income Tax Benefits | |||
Balance at December 31, 2016 | $ | 2.8 | |
Gross amount of decreases in unrecognized tax benefits related to prior periods | (0.4 | ) | |
Decreases in unrecognized tax benefits relating to settlements with taxing authorities | (2.1 | ) | |
Balance at March 31, 2017 | $ | 0.3 |
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Segment Reporting |
• | Inpatient Rehabilitation - Our national network of inpatient rehabilitation hospitals stretches across 30 states and Puerto Rico, with a concentration of hospitals in the eastern half of the United States and Texas. As of March 31, 2017, we operate 123 inpatient rehabilitation hospitals, including one hospital that operates as a joint venture which we account for using the equity method of accounting. In addition, we manage five inpatient rehabilitation units through management contracts. We provide specialized rehabilitative treatment on both an inpatient and outpatient basis. Our inpatient rehabilitation hospitals provide a higher level of rehabilitative care to patients who are recovering from conditions such as stroke and other neurological disorders, cardiac and pulmonary conditions, brain and spinal cord injuries, complex orthopedic conditions, and amputations. |
• | Home Health and Hospice - As of March 31, 2017, we provide home health and hospice services in 228 locations across 25 states. Two of these home health locations operate as joint ventures which we account for using the equity method of accounting. Our home health services include a comprehensive range of Medicare-certified home nursing services to adult patients in need of care. These services include, among others, skilled nursing, physical, occupational, and speech therapy, medical social work, and home health aide services. Our hospice services primarily include in-home services to terminally ill patients and their families to address patients’ physical needs, including pain control and symptom management, and to provide emotional and spiritual support. |
Inpatient Rehabilitation | Home Health and Hospice | ||||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net operating revenues | $ | 792.5 | $ | 749.2 | $ | 182.3 | $ | 160.6 | |||||||
Less: Provision for doubtful accounts | (14.7 | ) | (15.6 | ) | (1.7 | ) | (0.9 | ) | |||||||
Net operating revenues less provision for doubtful accounts | 777.8 | 733.6 | 180.6 | 159.7 | |||||||||||
Operating expenses: | |||||||||||||||
Inpatient rehabilitation: | |||||||||||||||
Salaries and benefits | 398.2 | 369.9 | — | — | |||||||||||
Other operating expenses | 111.8 | 104.8 | — | — | |||||||||||
Supplies | 33.7 | 32.4 | — | — | |||||||||||
Occupancy costs | 15.1 | 15.6 | — | — | |||||||||||
Home health and hospice: | |||||||||||||||
Cost of services sold (excluding depreciation and amortization) | — | — | 89.0 | 78.4 | |||||||||||
Support and overhead costs | — | — | 66.8 | 57.0 | |||||||||||
558.8 | 522.7 | 155.8 | 135.4 | ||||||||||||
Other income | (1.0 | ) | (0.6 | ) | — | — | |||||||||
Equity in net income of nonconsolidated affiliates | (1.9 | ) | (2.2 | ) | (0.2 | ) | (0.2 | ) | |||||||
Noncontrolling interests | 16.5 | 16.8 | 1.1 | 1.9 | |||||||||||
Segment Adjusted EBITDA | $ | 205.4 | $ | 196.9 | $ | 23.9 | $ | 22.6 | |||||||
Capital expenditures | $ | 43.1 | $ | 38.7 | $ | 1.7 | $ | 0.4 |
Inpatient Rehabilitation | Home Health and Hospice | HealthSouth Consolidated | |||||||||
As of March 31, 2017 | |||||||||||
Total assets | $ | 3,651.7 | $ | 1,122.5 | $ | 4,703.8 | |||||
Investments in and advances to nonconsolidated affiliates | 10.3 | 2.6 | 12.9 | ||||||||
As of December 31, 2016 | |||||||||||
Total assets | $ | 3,629.6 | $ | 1,123.7 | $ | 4,681.9 | |||||
Investments in and advances to nonconsolidated affiliates | 10.6 | 2.4 | 13.0 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Total segment Adjusted EBITDA | $ | 229.3 | $ | 219.5 | |||
General and administrative expenses | (36.5 | ) | (31.9 | ) | |||
Depreciation and amortization | (45.2 | ) | (42.4 | ) | |||
Gain (loss) on disposal or impairment of assets | 0.5 | (0.2 | ) | ||||
Professional fees - accounting, tax, and legal | — | (0.2 | ) | ||||
Loss on early extinguishment of debt | — | (2.4 | ) | ||||
Interest expense and amortization of debt discounts and fees | (41.3 | ) | (44.6 | ) | |||
Net income attributable to noncontrolling interests | 17.6 | 18.7 | |||||
Income from continuing operations before income tax expense | $ | 124.4 | $ | 116.5 |
March 31, 2017 | December 31, 2016 | ||||||
Total assets for reportable segments | $ | 4,774.2 | $ | 4,753.3 | |||
Reclassification of deferred income tax liabilities to net deferred income tax assets | (70.4 | ) | (71.4 | ) | |||
Total consolidated assets | $ | 4,703.8 | $ | 4,681.9 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Inpatient rehabilitation: | |||||||
Inpatient | $ | 766.2 | $ | 719.4 | |||
Outpatient and other | 26.3 | 29.8 | |||||
Total inpatient rehabilitation | 792.5 | 749.2 | |||||
Home health and hospice: | |||||||
Home health | 165.3 | 150.9 | |||||
Hospice | 17.0 | 9.7 | |||||
Total home health and hospice | 182.3 | 160.6 | |||||
Total net operating revenues | $ | 974.8 | $ | 909.8 |
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Three Months Ended March 31, 2017 | |||||||||||||||||||
HealthSouth Corporation | Guarantor Subsidiaries | Nonguarantor Subsidiaries | Eliminating Entries | HealthSouth Consolidated | |||||||||||||||
(In Millions) | |||||||||||||||||||
Net operating revenues | $ | 5.3 | $ | 576.2 | $ | 424.5 | $ | (31.2 | ) | $ | 974.8 | ||||||||
Less: Provision for doubtful accounts | — | (10.8 | ) | (5.6 | ) | — | (16.4 | ) | |||||||||||
Net operating revenues less provision for doubtful accounts | 5.3 | 565.4 | 418.9 | (31.2 | ) | 958.4 | |||||||||||||
Operating expenses: | |||||||||||||||||||
Salaries and benefits | 11.2 | 272.3 | 251.9 | (5.3 | ) | 530.1 | |||||||||||||
Other operating expenses | 8.2 | 77.7 | 55.1 | (11.9 | ) | 129.1 | |||||||||||||
Occupancy costs | 0.5 | 23.3 | 8.1 | (14.0 | ) | 17.9 | |||||||||||||
Supplies | — | 23.7 | 13.3 | — | 37.0 | ||||||||||||||
General and administrative expenses | 31.6 | — | 4.9 | — | 36.5 | ||||||||||||||
Depreciation and amortization | 2.4 | 26.6 | 16.2 | — | 45.2 | ||||||||||||||
Total operating expenses | 53.9 | 423.6 | 349.5 | (31.2 | ) | 795.8 | |||||||||||||
Interest expense and amortization of debt discounts and fees | 35.2 | 5.4 | 5.8 | (5.1 | ) | 41.3 | |||||||||||||
Other income | (5.4 | ) | (0.1 | ) | (0.6 | ) | 5.1 | (1.0 | ) | ||||||||||
Equity in net income of nonconsolidated affiliates | — | (1.9 | ) | (0.2 | ) | — | (2.1 | ) | |||||||||||
Equity in net income of consolidated affiliates | (86.3 | ) | (9.5 | ) | — | 95.8 | — | ||||||||||||
Management fees | (35.9 | ) | 27.4 | 8.5 | — | — | |||||||||||||
Income from continuing operations before income tax (benefit) expense | 43.8 | 120.5 | 55.9 | (95.8 | ) | 124.4 | |||||||||||||
Provision for income tax (benefit) expense | (23.3 | ) | 48.1 | 14.9 | — | 39.7 | |||||||||||||
Income from continuing operations | 67.1 | 72.4 | 41.0 | (95.8 | ) | 84.7 | |||||||||||||
Loss from discontinued operations, net of tax | (0.3 | ) | — | — | — | (0.3 | ) | ||||||||||||
Net income | 66.8 | 72.4 | 41.0 | (95.8 | ) | 84.4 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | (17.6 | ) | — | (17.6 | ) | ||||||||||||
Net income attributable to HealthSouth | $ | 66.8 | $ | 72.4 | $ | 23.4 | $ | (95.8 | ) | $ | 66.8 | ||||||||
Comprehensive income | $ | 67.1 | $ | 72.4 | $ | 41.0 | $ | (95.8 | ) | $ | 84.7 | ||||||||
Comprehensive income attributable to HealthSouth | $ | 67.1 | $ | 72.4 | $ | 23.4 | $ | (95.8 | ) | $ | 67.1 |
Three Months Ended March 31, 2016 | |||||||||||||||||||
HealthSouth Corporation | Guarantor Subsidiaries | Nonguarantor Subsidiaries | Eliminating Entries | HealthSouth Consolidated | |||||||||||||||
(In Millions) | |||||||||||||||||||
Net operating revenues | $ | 4.9 | $ | 550.7 | $ | 383.2 | $ | (29.0 | ) | $ | 909.8 | ||||||||
Less: Provision for doubtful accounts | — | (11.9 | ) | (4.6 | ) | — | (16.5 | ) | |||||||||||
Net operating revenues less provision for doubtful accounts | 4.9 | 538.8 | 378.6 | (29.0 | ) | 893.3 | |||||||||||||
Operating expenses: | |||||||||||||||||||
Salaries and benefits | 11.3 | 255.0 | 224.4 | (4.6 | ) | 486.1 | |||||||||||||
Other operating expenses | 5.4 | 77.1 | 47.8 | (11.1 | ) | 119.2 | |||||||||||||
Occupancy costs | 0.9 | 23.0 | 7.4 | (13.3 | ) | 18.0 | |||||||||||||
Supplies | — | 23.2 | 11.8 | — | 35.0 | ||||||||||||||
General and administrative expenses | 33.2 | — | (1.3 | ) | — | 31.9 | |||||||||||||
Depreciation and amortization | 2.4 | 25.7 | 14.3 | — | 42.4 | ||||||||||||||
Professional fees—accounting, tax, and legal | 0.2 | — | — | — | 0.2 | ||||||||||||||
Total operating expenses | 53.4 | 404.0 | 304.4 | (29.0 | ) | 732.8 | |||||||||||||
Loss on early extinguishment of debt | 2.4 | — | — | — | 2.4 | ||||||||||||||
Interest expense and amortization of debt discounts and fees | 38.9 | 5.2 | 5.3 | (4.8 | ) | 44.6 | |||||||||||||
Other income | (4.7 | ) | (0.1 | ) | (0.6 | ) | 4.8 | (0.6 | ) | ||||||||||
Equity in net income of nonconsolidated affiliates | — | (2.1 | ) | (0.3 | ) | — | (2.4 | ) | |||||||||||
Equity in net income of consolidated affiliates | (86.2 | ) | (8.2 | ) | — | 94.4 | — | ||||||||||||
Management fees | (34.2 | ) | 26.2 | 8.0 | — | — | |||||||||||||
Income from continuing operations before income tax (benefit) expense | 35.3 | 113.8 | 61.8 | (94.4 | ) | 116.5 | |||||||||||||
Provision for income tax (benefit) expense | (22.8 | ) | 45.4 | 17.1 | — | 39.7 | |||||||||||||
Income from continuing operations | 58.1 | 68.4 | 44.7 | (94.4 | ) | 76.8 | |||||||||||||
Loss from discontinued operations, net of tax | (0.1 | ) | — | — | — | (0.1 | ) | ||||||||||||
Net income | 58.0 | 68.4 | 44.7 | (94.4 | ) | 76.7 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | (18.7 | ) | — | (18.7 | ) | ||||||||||||
Net income attributable to HealthSouth | $ | 58.0 | $ | 68.4 | $ | 26.0 | $ | (94.4 | ) | $ | 58.0 | ||||||||
Comprehensive income | $ | 58.1 | $ | 68.4 | $ | 44.7 | $ | (94.4 | ) | $ | 76.8 | ||||||||
Comprehensive income attributable to HealthSouth | $ | 58.1 | $ | 68.4 | $ | 26.0 | $ | (94.4 | ) | $ | 58.1 |
As of March 31, 2017 | |||||||||||||||||||
HealthSouth Corporation | Guarantor Subsidiaries | Nonguarantor Subsidiaries | Eliminating Entries | HealthSouth Consolidated | |||||||||||||||
(In Millions) | |||||||||||||||||||
Assets | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 42.4 | $ | 2.6 | $ | 16.2 | $ | — | $ | 61.2 | |||||||||
Accounts receivable, net | — | 277.7 | 160.3 | — | 438.0 | ||||||||||||||
Other current assets | 97.2 | 24.0 | 146.5 | (84.6 | ) | 183.1 | |||||||||||||
Total current assets | 139.6 | 304.3 | 323.0 | (84.6 | ) | 682.3 | |||||||||||||
Property and equipment, net | 49.8 | 974.7 | 381.6 | — | 1,406.1 | ||||||||||||||
Goodwill | — | 860.6 | 1,070.8 | — | 1,931.4 | ||||||||||||||
Intangible assets, net | 10.9 | 114.3 | 279.2 | — | 404.4 | ||||||||||||||
Deferred income tax assets | 50.3 | 57.7 | — | (72.7 | ) | 35.3 | |||||||||||||
Other long-term assets | 47.5 | 115.1 | 81.7 | — | 244.3 | ||||||||||||||
Intercompany notes receivable | 521.8 | — | — | (521.8 | ) | — | |||||||||||||
Intercompany receivable and investments in consolidated affiliates | 2,859.9 | 208.8 | — | (3,068.7 | ) | — | |||||||||||||
Total assets | $ | 3,679.8 | $ | 2,635.5 | $ | 2,136.3 | $ | (3,747.8 | ) | $ | 4,703.8 | ||||||||
Liabilities and Shareholders’ Equity | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Current portion of long-term debt | $ | 40.0 | $ | 6.8 | $ | 8.6 | $ | (17.5 | ) | $ | 37.9 | ||||||||
Accounts payable | 7.1 | 37.2 | 24.6 | — | 68.9 | ||||||||||||||
Accrued expenses and other current liabilities | 198.8 | 79.0 | 169.8 | (67.1 | ) | 380.5 | |||||||||||||
Total current liabilities | 245.9 | 123.0 | 203.0 | (84.6 | ) | 487.3 | |||||||||||||
Long-term debt, net of current portion | 2,617.7 | 248.0 | 49.8 | — | 2,915.5 | ||||||||||||||
Intercompany notes payable | — | — | 521.8 | (521.8 | ) | — | |||||||||||||
Other long-term liabilities | 36.5 | 15.8 | 188.6 | (72.4 | ) | 168.5 | |||||||||||||
Intercompany payable | — | — | 148.2 | (148.2 | ) | — | |||||||||||||
2,900.1 | 386.8 | 1,111.4 | (827.0 | ) | 3,571.3 | ||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Redeemable noncontrolling interests | — | — | 153.4 | — | 153.4 | ||||||||||||||
Shareholders’ equity: | |||||||||||||||||||
HealthSouth shareholders’ equity | 779.7 | 2,248.7 | 672.1 | (2,920.8 | ) | 779.7 | |||||||||||||
Noncontrolling interests | — | — | 199.4 | — | 199.4 | ||||||||||||||
Total shareholders’ equity | 779.7 | 2,248.7 | 871.5 | (2,920.8 | ) | 979.1 | |||||||||||||
Total liabilities and shareholders’ equity | $ | 3,679.8 | $ | 2,635.5 | $ | 2,136.3 | $ | (3,747.8 | ) | $ | 4,703.8 |
As of December 31, 2016 | |||||||||||||||||||
HealthSouth Corporation | Guarantor Subsidiaries | Nonguarantor Subsidiaries | Eliminating Entries | HealthSouth Consolidated | |||||||||||||||
(In Millions) | |||||||||||||||||||
Assets | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 20.6 | $ | 1.6 | $ | 18.3 | $ | — | $ | 40.5 | |||||||||
Accounts receivable, net | — | 276.5 | 167.3 | — | 443.8 | ||||||||||||||
Other current assets | 49.9 | 24.2 | 114.7 | (18.6 | ) | 170.2 | |||||||||||||
Total current assets | 70.5 | 302.3 | 300.3 | (18.6 | ) | 654.5 | |||||||||||||
Property and equipment, net | 41.6 | 987.3 | 362.9 | — | 1,391.8 | ||||||||||||||
Goodwill | — | 860.6 | 1,066.6 | — | 1,927.2 | ||||||||||||||
Intangible assets, net | 12.0 | 115.6 | 283.7 | — | 411.3 | ||||||||||||||
Deferred income tax assets | 90.9 | 57.6 | — | (72.7 | ) | 75.8 | |||||||||||||
Other long-term assets | 49.0 | 95.1 | 77.2 | — | 221.3 | ||||||||||||||
Intercompany notes receivable | 528.8 | — | — | (528.8 | ) | — | |||||||||||||
Intercompany receivable and investments in consolidated affiliates | 2,855.5 | 96.3 | — | (2,951.8 | ) | — | |||||||||||||
Total assets | $ | 3,648.3 | $ | 2,514.8 | $ | 2,090.7 | $ | (3,571.9 | ) | $ | 4,681.9 | ||||||||
Liabilities and Shareholders’ Equity | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Current portion of long-term debt | $ | 40.0 | $ | 6.4 | $ | 8.2 | $ | (17.5 | ) | $ | 37.1 | ||||||||
Accounts payable | 7.0 | 37.4 | 23.9 | — | 68.3 | ||||||||||||||
Accrued expenses and other current liabilities | 150.7 | 82.3 | 138.3 | (1.1 | ) | 370.2 | |||||||||||||
Total current liabilities | 197.7 | 126.1 | 170.4 | (18.6 | ) | 475.6 | |||||||||||||
Long-term debt, net of current portion | 2,679.2 | 248.9 | 51.2 | — | 2,979.3 | ||||||||||||||
Intercompany notes payable | — | — | 528.8 | (528.8 | ) | — | |||||||||||||
Other long-term liabilities | 35.5 | 15.2 | 181.6 | (72.3 | ) | 160.0 | |||||||||||||
Intercompany payable | — | — | 168.2 | (168.2 | ) | — | |||||||||||||
2,912.4 | 390.2 | 1,100.2 | (787.9 | ) | 3,614.9 | ||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Redeemable noncontrolling interests | — | — | 138.3 | — | 138.3 | ||||||||||||||
Shareholders’ equity: | |||||||||||||||||||
HealthSouth shareholders’ equity | 735.9 | 2,124.6 | 659.4 | (2,784.0 | ) | 735.9 | |||||||||||||
Noncontrolling interests | — | — | 192.8 | — | 192.8 | ||||||||||||||
Total shareholders’ equity | 735.9 | 2,124.6 | 852.2 | (2,784.0 | ) | 928.7 | |||||||||||||
Total liabilities and shareholders’ equity | $ | 3,648.3 | $ | 2,514.8 | $ | 2,090.7 | $ | (3,571.9 | ) | $ | 4,681.9 |
Three Months Ended March 31, 2017 | |||||||||||||||||||
HealthSouth Corporation | Guarantor Subsidiaries | Nonguarantor Subsidiaries | Eliminating Entries | HealthSouth Consolidated | |||||||||||||||
(In Millions) | |||||||||||||||||||
Net cash provided by operating activities | $ | 45.1 | $ | 74.0 | $ | 61.7 | $ | — | $ | 180.8 | |||||||||
Cash flows from investing activities: | |||||||||||||||||||
Purchases of property and equipment | (5.2 | ) | (13.1 | ) | (22.9 | ) | — | (41.2 | ) | ||||||||||
Additions to capitalized software costs | (3.0 | ) | (0.2 | ) | (0.4 | ) | — | (3.6 | ) | ||||||||||
Acquisitions of businesses, net of cash acquired | (10.9 | ) | — | (5.5 | ) | — | (16.4 | ) | |||||||||||
Net change in restricted cash | — | — | (4.7 | ) | — | (4.7 | ) | ||||||||||||
Proceeds from repayment of intercompany note receivable | 7.0 | — | — | (7.0 | ) | — | |||||||||||||
Other, net | (0.8 | ) | 9.0 | 3.9 | — | 12.1 | |||||||||||||
Net cash used in investing activities | (12.9 | ) | (4.3 | ) | (29.6 | ) | (7.0 | ) | (53.8 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||||||||
Principal payments on debt, including pre-payments | (5.6 | ) | — | (0.8 | ) | — | (6.4 | ) | |||||||||||
Principal payments on intercompany note payable | — | — | (7.0 | ) | 7.0 | — | |||||||||||||
Borrowings on revolving credit facility | 55.0 | — | — | — | 55.0 | ||||||||||||||
Payments on revolving credit facility | (122.0 | ) | — | — | — | (122.0 | ) | ||||||||||||
Repurchases of common stock, including fees and expenses | (18.1 | ) | — | — | — | (18.1 | ) | ||||||||||||
Dividends paid on common stock | (22.2 | ) | — | — | — | (22.2 | ) | ||||||||||||
Proceeds from exercising stock warrants | 26.6 | — | — | — | 26.6 | ||||||||||||||
Distributions paid to noncontrolling interests of consolidated affiliates | — | — | (11.5 | ) | — | (11.5 | ) | ||||||||||||
Taxes paid on behalf of employees for shares withheld | (6.6 | ) | — | (0.3 | ) | — | (6.9 | ) | |||||||||||
Other, net | 0.2 | (1.6 | ) | 0.6 | — | (0.8 | ) | ||||||||||||
Change in intercompany advances | 82.3 | (67.1 | ) | (15.2 | ) | — | — | ||||||||||||
Net cash used in financing activities | (10.4 | ) | (68.7 | ) | (34.2 | ) | 7.0 | (106.3 | ) | ||||||||||
Increase (decrease) in cash and cash equivalents | 21.8 | 1.0 | (2.1 | ) | — | 20.7 | |||||||||||||
Cash and cash equivalents at beginning of period | 20.6 | 1.6 | 18.3 | — | 40.5 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 42.4 | $ | 2.6 | $ | 16.2 | $ | — | $ | 61.2 |
Three Months Ended March 31, 2016 | |||||||||||||||||||
HealthSouth Corporation | Guarantor Subsidiaries | Nonguarantor Subsidiaries | Eliminating Entries | HealthSouth Consolidated | |||||||||||||||
(In Millions) | |||||||||||||||||||
Net cash provided by operating activities | $ | 18.8 | $ | 90.9 | $ | 59.9 | $ | — | $ | 169.6 | |||||||||
Cash flows from investing activities: | |||||||||||||||||||
Purchases of property and equipment | (3.2 | ) | (14.3 | ) | (13.9 | ) | — | (31.4 | ) | ||||||||||
Additions to capitalized software costs | (7.7 | ) | — | — | — | (7.7 | ) | ||||||||||||
Net change in restricted cash | — | — | (3.2 | ) | — | (3.2 | ) | ||||||||||||
Proceeds from repayment of intercompany notes receivable | 5.0 | — | — | (5.0 | ) | — | |||||||||||||
Other, net | — | (0.3 | ) | 3.1 | — | 2.8 | |||||||||||||
Net cash used in investing activities | (5.9 | ) | (14.6 | ) | (14.0 | ) | (5.0 | ) | (39.5 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||||||||
Principal payments on debt, including pre-payments | (55.6 | ) | (0.4 | ) | (0.3 | ) | — | (56.3 | ) | ||||||||||
Principal payments on intercompany note payable | — | — | (5.0 | ) | 5.0 | — | |||||||||||||
Borrowings on revolving credit facility | 60.0 | — | — | — | 60.0 | ||||||||||||||
Payments on revolving credit facility | (60.0 | ) | — | — | — | (60.0 | ) | ||||||||||||
Repurchases of common stock, including fees and expenses | (12.9 | ) | — | — | — | (12.9 | ) | ||||||||||||
Dividends paid on common stock | (21.3 | ) | — | — | — | (21.3 | ) | ||||||||||||
Distributions paid to noncontrolling interests of consolidated affiliates | — | — | (15.6 | ) | — | (15.6 | ) | ||||||||||||
Taxes paid on behalf of employees for shares withheld | (9.9 | ) | — | — | — | (9.9 | ) | ||||||||||||
Other, net | 1.9 | (1.4 | ) | (3.0 | ) | — | (2.5 | ) | |||||||||||
Change in intercompany advances | 91.5 | (72.9 | ) | (18.6 | ) | — | — | ||||||||||||
Net cash used in financing activities | (6.3 | ) | (74.7 | ) | (42.5 | ) | 5.0 | (118.5 | ) | ||||||||||
Increase in cash and cash equivalents | 6.6 | 1.6 | 3.4 | — | 11.6 | ||||||||||||||
Cash and cash equivalents at beginning of period | 41.2 | 1.2 | 19.2 | — | 61.6 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 47.8 | $ | 2.8 | $ | 22.6 | $ | — | $ | 73.2 |
|
|
Three Months Ended March 31, | |||||
2017 | 2016 | ||||
Medicare | 75.2 | % | 75.4 | % | |
Medicare Advantage | 8.8 | % | 7.8 | % | |
Managed care | 9.9 | % | 9.5 | % | |
Medicaid | 2.6 | % | 3.4 | % | |
Other third-party payors | 1.2 | % | 1.4 | % | |
Workers’ compensation | 0.8 | % | 0.9 | % | |
Patients | 0.5 | % | 0.5 | % | |
Other income | 1.0 | % | 1.1 | % | |
Total | 100.0 | % | 100.0 | % |
Three Months Ended March 31, | |||||
2017 | 2016 | ||||
Medicare | 73.3 | % | 73.8 | % | |
Medicare Advantage | 8.5 | % | 7.6 | % | |
Managed care | 11.2 | % | 11.0 | % | |
Medicaid | 2.8 | % | 3.0 | % | |
Other third-party payors | 1.5 | % | 1.6 | % | |
Workers’ compensation | 0.9 | % | 1.1 | % | |
Patients | 0.6 | % | 0.6 | % | |
Other income | 1.2 | % | 1.3 | % | |
Total | 100.0 | % | 100.0 | % |
Three Months Ended March 31, | |||||
2017 | 2016 | ||||
Medicare | 84.1 | % | 83.5 | % | |
Medicare Advantage | 10.3 | % | 8.7 | % | |
Managed care | 4.0 | % | 2.7 | % | |
Medicaid | 1.4 | % | 4.9 | % | |
Patients | 0.1 | % | 0.1 | % | |
Other income | 0.1 | % | 0.1 | % | |
Total | 100.0 | % | 100.0 | % |
|
Identifiable intangible asset: | |||
Noncompete agreements (useful lives of 5 years) | $ | 0.1 | |
Trade name (useful life of 1 year) | 0.1 | ||
Certificates of need (useful lives of 10 years) | 0.7 | ||
Licenses (useful lives of 10 years) | 0.4 | ||
Goodwill | 4.2 | ||
Total assets acquired | $ | 5.5 |
Three Months Ended March 31, | |||
2017 | |||
Fair value of assets acquired | $ | 1.3 | |
Goodwill | 4.2 | ||
Net cash paid for acquisitions | $ | 5.5 |
Net Operating Revenues | Net Income Attributable to HealthSouth | ||||||
Acquired entities only: Actual from acquisition date to March 31, 2017 | $ | 0.4 | $ | 0.1 | |||
Combined entity: Supplemental pro forma from 01/01/2017-03/31/2017 | 975.2 | 66.8 | |||||
Combined entity: Supplemental pro forma from 01/01/2016-03/31/2016 | 910.8 | 57.9 |
|
March 31, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1.6 | $ | 1.6 | |||
Accounts receivable, net of allowance for doubtful accounts | 31.1 | 30.8 | |||||
Other current assets | 4.2 | 5.8 | |||||
Total current assets | 36.9 | 38.2 | |||||
Property and equipment, net | 141.2 | 140.0 | |||||
Goodwill | 73.5 | 73.5 | |||||
Intangible assets, net | 9.0 | 9.6 | |||||
Other long-term assets | 0.9 | 1.0 | |||||
Total assets | $ | 261.5 | $ | 262.3 | |||
Liabilities | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 1.6 | $ | 1.5 | |||
Accounts payable | 5.9 | 6.8 | |||||
Accrued expenses and other current liabilities | 12.5 | 12.2 | |||||
Total current liabilities | 20.0 | 20.5 | |||||
Long-term debt, net of current portion | 29.6 | 29.8 | |||||
Total liabilities | $ | 49.6 | $ | 50.3 |
|
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net operating revenues | $ | 10.8 | $ | 11.2 | |||
Operating expenses | (6.3 | ) | (6.2 | ) | |||
Income from continuing operations, net of tax | 4.4 | 5.0 | |||||
Net income | 4.4 | 5.0 |
|
March 31, 2017 | December 31, 2016 | ||||||
Credit Agreement— | |||||||
Advances under revolving credit facility | $ | 85.0 | $ | 152.0 | |||
Term loan facilities | 415.7 | 421.2 | |||||
Bonds payable— | |||||||
5.125% Senior Notes due 2023 | 295.4 | 295.3 | |||||
5.75% Senior Notes due 2024 | 1,193.4 | 1,193.2 | |||||
5.75% Senior Notes due 2025 | 344.0 | 343.9 | |||||
2.00% Convertible Senior Subordinated Notes due 2043 | 278.2 | 275.7 | |||||
Other notes payable | 63.1 | 55.8 | |||||
Capital lease obligations | 278.6 | 279.3 | |||||
2,953.4 | 3,016.4 | ||||||
Less: Current portion | (37.9 | ) | (37.1 | ) | |||
Long-term debt, net of current portion | $ | 2,915.5 | $ | 2,979.3 |
Face Amount | Net Amount | ||||||
April 1 through December 31, 2017 | $ | 28.4 | $ | 28.4 | |||
2018 | 38.6 | 38.6 | |||||
2019 | 39.7 | 39.7 | |||||
2020 | 769.3 | 726.3 | |||||
2021 | 10.8 | 10.8 | |||||
2022 | 24.9 | 24.9 | |||||
Thereafter | 2,101.9 | 2,084.7 | |||||
Total | $ | 3,013.6 | $ | 2,953.4 |
|
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Balance at beginning of period | $ | 138.3 | $ | 121.1 | |||
Net income attributable to noncontrolling interests | 3.1 | 3.9 | |||||
Distributions declared | (1.9 | ) | (2.1 | ) | |||
Change in fair value | 13.9 | (26.7 | ) | ||||
Balance at end of period | $ | 153.4 | $ | 96.2 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net income attributable to nonredeemable noncontrolling interests | $ | 14.5 | $ | 14.8 | |||
Net income attributable to redeemable noncontrolling interests | 3.1 | 3.9 | |||||
Net income attributable to noncontrolling interests | $ | 17.6 | $ | 18.7 |
|
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
As of March 31, 2017 | Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Valuation Technique (1) | ||||||||||||
Other current assets: | |||||||||||||||||
Current portion of restricted marketable securities | $ | 17.5 | $ | — | $ | 17.5 | $ | — | M | ||||||||
Other long-term assets: | |||||||||||||||||
Restricted marketable securities | 36.8 | — | 36.8 | — | M | ||||||||||||
Redeemable noncontrolling interests | 153.4 | — | — | 153.4 | I | ||||||||||||
As of December 31, 2016 | |||||||||||||||||
Other current assets: | |||||||||||||||||
Current portion of restricted marketable securities | $ | 24.2 | $ | — | $ | 24.2 | $ | — | M | ||||||||
Other long-term assets: | |||||||||||||||||
Restricted marketable securities | 33.5 | — | 33.5 | — | M | ||||||||||||
Redeemable noncontrolling interests | 138.3 | — | — | 138.3 | I |
As of March 31, 2017 | As of December 31, 2016 | ||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||
Long-term debt: | |||||||||||||||
Advances under revolving credit facility | $ | 85.0 | $ | 85.0 | $ | 152.0 | $ | 152.0 | |||||||
Term loan facilities | 415.7 | 416.9 | 421.2 | 422.5 | |||||||||||
5.125% Senior Notes due 2023 | 295.4 | 301.5 | 295.3 | 297.8 | |||||||||||
5.75% Senior Notes due 2024 | 1,193.4 | 1,206.0 | 1,193.2 | 1,216.6 | |||||||||||
5.75% Senior Notes due 2025 | 344.0 | 349.6 | 343.9 | 349.6 | |||||||||||
2.00% Convertible Senior Subordinated Notes due 2043 | 278.2 | 390.8 | 275.7 | 382.6 | |||||||||||
Other notes payable | 63.1 | 63.1 | 55.8 | 55.8 | |||||||||||
Financial commitments: | |||||||||||||||
Letters of credit | — | 36.4 | — | 33.3 |
|
Gross Unrecognized Income Tax Benefits | |||
Balance at December 31, 2016 | $ | 2.8 | |
Gross amount of decreases in unrecognized tax benefits related to prior periods | (0.4 | ) | |
Decreases in unrecognized tax benefits relating to settlements with taxing authorities | (2.1 | ) | |
Balance at March 31, 2017 | $ | 0.3 |
|
Inpatient Rehabilitation | Home Health and Hospice | ||||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net operating revenues | $ | 792.5 | $ | 749.2 | $ | 182.3 | $ | 160.6 | |||||||
Less: Provision for doubtful accounts | (14.7 | ) | (15.6 | ) | (1.7 | ) | (0.9 | ) | |||||||
Net operating revenues less provision for doubtful accounts | 777.8 | 733.6 | 180.6 | 159.7 | |||||||||||
Operating expenses: | |||||||||||||||
Inpatient rehabilitation: | |||||||||||||||
Salaries and benefits | 398.2 | 369.9 | — | — | |||||||||||
Other operating expenses | 111.8 | 104.8 | — | — | |||||||||||
Supplies | 33.7 | 32.4 | — | — | |||||||||||
Occupancy costs | 15.1 | 15.6 | — | — | |||||||||||
Home health and hospice: | |||||||||||||||
Cost of services sold (excluding depreciation and amortization) | — | — | 89.0 | 78.4 | |||||||||||
Support and overhead costs | — | — | 66.8 | 57.0 | |||||||||||
558.8 | 522.7 | 155.8 | 135.4 | ||||||||||||
Other income | (1.0 | ) | (0.6 | ) | — | — | |||||||||
Equity in net income of nonconsolidated affiliates | (1.9 | ) | (2.2 | ) | (0.2 | ) | (0.2 | ) | |||||||
Noncontrolling interests | 16.5 | 16.8 | 1.1 | 1.9 | |||||||||||
Segment Adjusted EBITDA | $ | 205.4 | $ | 196.9 | $ | 23.9 | $ | 22.6 | |||||||
Capital expenditures | $ | 43.1 | $ | 38.7 | $ | 1.7 | $ | 0.4 |
March 31, 2017 | December 31, 2016 | ||||||
Total assets for reportable segments | $ | 4,774.2 | $ | 4,753.3 | |||
Reclassification of deferred income tax liabilities to net deferred income tax assets | (70.4 | ) | (71.4 | ) | |||
Total consolidated assets | $ | 4,703.8 | $ | 4,681.9 |
Inpatient Rehabilitation | Home Health and Hospice | HealthSouth Consolidated | |||||||||
As of March 31, 2017 | |||||||||||
Total assets | $ | 3,651.7 | $ | 1,122.5 | $ | 4,703.8 | |||||
Investments in and advances to nonconsolidated affiliates | 10.3 | 2.6 | 12.9 | ||||||||
As of December 31, 2016 | |||||||||||
Total assets | $ | 3,629.6 | $ | 1,123.7 | $ | 4,681.9 | |||||
Investments in and advances to nonconsolidated affiliates | 10.6 | 2.4 | 13.0 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Total segment Adjusted EBITDA | $ | 229.3 | $ | 219.5 | |||
General and administrative expenses | (36.5 | ) | (31.9 | ) | |||
Depreciation and amortization | (45.2 | ) | (42.4 | ) | |||
Gain (loss) on disposal or impairment of assets | 0.5 | (0.2 | ) | ||||
Professional fees - accounting, tax, and legal | — | (0.2 | ) | ||||
Loss on early extinguishment of debt | — | (2.4 | ) | ||||
Interest expense and amortization of debt discounts and fees | (41.3 | ) | (44.6 | ) | |||
Net income attributable to noncontrolling interests | 17.6 | 18.7 | |||||
Income from continuing operations before income tax expense | $ | 124.4 | $ | 116.5 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Inpatient rehabilitation: | |||||||
Inpatient | $ | 766.2 | $ | 719.4 | |||
Outpatient and other | 26.3 | 29.8 | |||||
Total inpatient rehabilitation | 792.5 | 749.2 | |||||
Home health and hospice: | |||||||
Home health | 165.3 | 150.9 | |||||
Hospice | 17.0 | 9.7 | |||||
Total home health and hospice | 182.3 | 160.6 | |||||
Total net operating revenues | $ | 974.8 | $ | 909.8 |
|
Three Months Ended March 31, 2017 | |||||||||||||||||||
HealthSouth Corporation | Guarantor Subsidiaries | Nonguarantor Subsidiaries | Eliminating Entries | HealthSouth Consolidated | |||||||||||||||
(In Millions) | |||||||||||||||||||
Net operating revenues | $ | 5.3 | $ | 576.2 | $ | 424.5 | $ | (31.2 | ) | $ | 974.8 | ||||||||
Less: Provision for doubtful accounts | — | (10.8 | ) | (5.6 | ) | — | (16.4 | ) | |||||||||||
Net operating revenues less provision for doubtful accounts | 5.3 | 565.4 | 418.9 | (31.2 | ) | 958.4 | |||||||||||||
Operating expenses: | |||||||||||||||||||
Salaries and benefits | 11.2 | 272.3 | 251.9 | (5.3 | ) | 530.1 | |||||||||||||
Other operating expenses | 8.2 | 77.7 | 55.1 | (11.9 | ) | 129.1 | |||||||||||||
Occupancy costs | 0.5 | 23.3 | 8.1 | (14.0 | ) | 17.9 | |||||||||||||
Supplies | — | 23.7 | 13.3 | — | 37.0 | ||||||||||||||
General and administrative expenses | 31.6 | — | 4.9 | — | 36.5 | ||||||||||||||
Depreciation and amortization | 2.4 | 26.6 | 16.2 | — | 45.2 | ||||||||||||||
Total operating expenses | 53.9 | 423.6 | 349.5 | (31.2 | ) | 795.8 | |||||||||||||
Interest expense and amortization of debt discounts and fees | 35.2 | 5.4 | 5.8 | (5.1 | ) | 41.3 | |||||||||||||
Other income | (5.4 | ) | (0.1 | ) | (0.6 | ) | 5.1 | (1.0 | ) | ||||||||||
Equity in net income of nonconsolidated affiliates | — | (1.9 | ) | (0.2 | ) | — | (2.1 | ) | |||||||||||
Equity in net income of consolidated affiliates | (86.3 | ) | (9.5 | ) | — | 95.8 | — | ||||||||||||
Management fees | (35.9 | ) | 27.4 | 8.5 | — | — | |||||||||||||
Income from continuing operations before income tax (benefit) expense | 43.8 | 120.5 | 55.9 | (95.8 | ) | 124.4 | |||||||||||||
Provision for income tax (benefit) expense | (23.3 | ) | 48.1 | 14.9 | — | 39.7 | |||||||||||||
Income from continuing operations | 67.1 | 72.4 | 41.0 | (95.8 | ) | 84.7 | |||||||||||||
Loss from discontinued operations, net of tax | (0.3 | ) | — | — | — | (0.3 | ) | ||||||||||||
Net income | 66.8 | 72.4 | 41.0 | (95.8 | ) | 84.4 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | (17.6 | ) | — | (17.6 | ) | ||||||||||||
Net income attributable to HealthSouth | $ | 66.8 | $ | 72.4 | $ | 23.4 | $ | (95.8 | ) | $ | 66.8 | ||||||||
Comprehensive income | $ | 67.1 | $ | 72.4 | $ | 41.0 | $ | (95.8 | ) | $ | 84.7 | ||||||||
Comprehensive income attributable to HealthSouth | $ | 67.1 | $ | 72.4 | $ | 23.4 | $ | (95.8 | ) | $ | 67.1 |
Three Months Ended March 31, 2016 | |||||||||||||||||||
HealthSouth Corporation | Guarantor Subsidiaries | Nonguarantor Subsidiaries | Eliminating Entries | HealthSouth Consolidated | |||||||||||||||
(In Millions) | |||||||||||||||||||
Net operating revenues | $ | 4.9 | $ | 550.7 | $ | 383.2 | $ | (29.0 | ) | $ | 909.8 | ||||||||
Less: Provision for doubtful accounts | — | (11.9 | ) | (4.6 | ) | — | (16.5 | ) | |||||||||||
Net operating revenues less provision for doubtful accounts | 4.9 | 538.8 | 378.6 | (29.0 | ) | 893.3 | |||||||||||||
Operating expenses: | |||||||||||||||||||
Salaries and benefits | 11.3 | 255.0 | 224.4 | (4.6 | ) | 486.1 | |||||||||||||
Other operating expenses | 5.4 | 77.1 | 47.8 | (11.1 | ) | 119.2 | |||||||||||||
Occupancy costs | 0.9 | 23.0 | 7.4 | (13.3 | ) | 18.0 | |||||||||||||
Supplies | — | 23.2 | 11.8 | — | 35.0 | ||||||||||||||
General and administrative expenses | 33.2 | — | (1.3 | ) | — | 31.9 | |||||||||||||
Depreciation and amortization | 2.4 | 25.7 | 14.3 | — | 42.4 | ||||||||||||||
Professional fees—accounting, tax, and legal | 0.2 | — | — | — | 0.2 | ||||||||||||||
Total operating expenses | 53.4 | 404.0 | 304.4 | (29.0 | ) | 732.8 | |||||||||||||
Loss on early extinguishment of debt | 2.4 | — | — | — | 2.4 | ||||||||||||||
Interest expense and amortization of debt discounts and fees | 38.9 | 5.2 | 5.3 | (4.8 | ) | 44.6 | |||||||||||||
Other income | (4.7 | ) | (0.1 | ) | (0.6 | ) | 4.8 | (0.6 | ) | ||||||||||
Equity in net income of nonconsolidated affiliates | — | (2.1 | ) | (0.3 | ) | — | (2.4 | ) | |||||||||||
Equity in net income of consolidated affiliates | (86.2 | ) | (8.2 | ) | — | 94.4 | — | ||||||||||||
Management fees | (34.2 | ) | 26.2 | 8.0 | — | — | |||||||||||||
Income from continuing operations before income tax (benefit) expense | 35.3 | 113.8 | 61.8 | (94.4 | ) | 116.5 | |||||||||||||
Provision for income tax (benefit) expense | (22.8 | ) | 45.4 | 17.1 | — | 39.7 | |||||||||||||
Income from continuing operations | 58.1 | 68.4 | 44.7 | (94.4 | ) | 76.8 | |||||||||||||
Loss from discontinued operations, net of tax | (0.1 | ) | — | — | — | (0.1 | ) | ||||||||||||
Net income | 58.0 | 68.4 | 44.7 | (94.4 | ) | 76.7 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | (18.7 | ) | — | (18.7 | ) | ||||||||||||
Net income attributable to HealthSouth | $ | 58.0 | $ | 68.4 | $ | 26.0 | $ | (94.4 | ) | $ | 58.0 | ||||||||
Comprehensive income | $ | 58.1 | $ | 68.4 | $ | 44.7 | $ | (94.4 | ) | $ | 76.8 | ||||||||
Comprehensive income attributable to HealthSouth | $ | 58.1 | $ | 68.4 | $ | 26.0 | $ | (94.4 | ) | $ | 58.1 |
As of March 31, 2017 | |||||||||||||||||||
HealthSouth Corporation | Guarantor Subsidiaries | Nonguarantor Subsidiaries | Eliminating Entries | HealthSouth Consolidated | |||||||||||||||
(In Millions) | |||||||||||||||||||
Assets | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 42.4 | $ | 2.6 | $ | 16.2 | $ | — | $ | 61.2 | |||||||||
Accounts receivable, net | — | 277.7 | 160.3 | — | 438.0 | ||||||||||||||
Other current assets | 97.2 | 24.0 | 146.5 | (84.6 | ) | 183.1 | |||||||||||||
Total current assets | 139.6 | 304.3 | 323.0 | (84.6 | ) | 682.3 | |||||||||||||
Property and equipment, net | 49.8 | 974.7 | 381.6 | — | 1,406.1 | ||||||||||||||
Goodwill | — | 860.6 | 1,070.8 | — | 1,931.4 | ||||||||||||||
Intangible assets, net | 10.9 | 114.3 | 279.2 | — | 404.4 | ||||||||||||||
Deferred income tax assets | 50.3 | 57.7 | — | (72.7 | ) | 35.3 | |||||||||||||
Other long-term assets | 47.5 | 115.1 | 81.7 | — | 244.3 | ||||||||||||||
Intercompany notes receivable | 521.8 | — | — | (521.8 | ) | — | |||||||||||||
Intercompany receivable and investments in consolidated affiliates | 2,859.9 | 208.8 | — | (3,068.7 | ) | — | |||||||||||||
Total assets | $ | 3,679.8 | $ | 2,635.5 | $ | 2,136.3 | $ | (3,747.8 | ) | $ | 4,703.8 | ||||||||
Liabilities and Shareholders’ Equity | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Current portion of long-term debt | $ | 40.0 | $ | 6.8 | $ | 8.6 | $ | (17.5 | ) | $ | 37.9 | ||||||||
Accounts payable | 7.1 | 37.2 | 24.6 | — | 68.9 | ||||||||||||||
Accrued expenses and other current liabilities | 198.8 | 79.0 | 169.8 | (67.1 | ) | 380.5 | |||||||||||||
Total current liabilities | 245.9 | 123.0 | 203.0 | (84.6 | ) | 487.3 | |||||||||||||
Long-term debt, net of current portion | 2,617.7 | 248.0 | 49.8 | — | 2,915.5 | ||||||||||||||
Intercompany notes payable | — | — | 521.8 | (521.8 | ) | — | |||||||||||||
Other long-term liabilities | 36.5 | 15.8 | 188.6 | (72.4 | ) | 168.5 | |||||||||||||
Intercompany payable | — | — | 148.2 | (148.2 | ) | — | |||||||||||||
2,900.1 | 386.8 | 1,111.4 | (827.0 | ) | 3,571.3 | ||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Redeemable noncontrolling interests | — | — | 153.4 | — | 153.4 | ||||||||||||||
Shareholders’ equity: | |||||||||||||||||||
HealthSouth shareholders’ equity | 779.7 | 2,248.7 | 672.1 | (2,920.8 | ) | 779.7 | |||||||||||||
Noncontrolling interests | — | — | 199.4 | — | 199.4 | ||||||||||||||
Total shareholders’ equity | 779.7 | 2,248.7 | 871.5 | (2,920.8 | ) | 979.1 | |||||||||||||
Total liabilities and shareholders’ equity | $ | 3,679.8 | $ | 2,635.5 | $ | 2,136.3 | $ | (3,747.8 | ) | $ | 4,703.8 |
As of December 31, 2016 | |||||||||||||||||||
HealthSouth Corporation | Guarantor Subsidiaries | Nonguarantor Subsidiaries | Eliminating Entries | HealthSouth Consolidated | |||||||||||||||
(In Millions) | |||||||||||||||||||
Assets | |||||||||||||||||||
Current assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 20.6 | $ | 1.6 | $ | 18.3 | $ | — | $ | 40.5 | |||||||||
Accounts receivable, net | — | 276.5 | 167.3 | — | 443.8 | ||||||||||||||
Other current assets | 49.9 | 24.2 | 114.7 | (18.6 | ) | 170.2 | |||||||||||||
Total current assets | 70.5 | 302.3 | 300.3 | (18.6 | ) | 654.5 | |||||||||||||
Property and equipment, net | 41.6 | 987.3 | 362.9 | — | 1,391.8 | ||||||||||||||
Goodwill | — | 860.6 | 1,066.6 | — | 1,927.2 | ||||||||||||||
Intangible assets, net | 12.0 | 115.6 | 283.7 | — | 411.3 | ||||||||||||||
Deferred income tax assets | 90.9 | 57.6 | — | (72.7 | ) | 75.8 | |||||||||||||
Other long-term assets | 49.0 | 95.1 | 77.2 | — | 221.3 | ||||||||||||||
Intercompany notes receivable | 528.8 | — | — | (528.8 | ) | — | |||||||||||||
Intercompany receivable and investments in consolidated affiliates | 2,855.5 | 96.3 | — | (2,951.8 | ) | — | |||||||||||||
Total assets | $ | 3,648.3 | $ | 2,514.8 | $ | 2,090.7 | $ | (3,571.9 | ) | $ | 4,681.9 | ||||||||
Liabilities and Shareholders’ Equity | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Current portion of long-term debt | $ | 40.0 | $ | 6.4 | $ | 8.2 | $ | (17.5 | ) | $ | 37.1 | ||||||||
Accounts payable | 7.0 | 37.4 | 23.9 | — | 68.3 | ||||||||||||||
Accrued expenses and other current liabilities | 150.7 | 82.3 | 138.3 | (1.1 | ) | 370.2 | |||||||||||||
Total current liabilities | 197.7 | 126.1 | 170.4 | (18.6 | ) | 475.6 | |||||||||||||
Long-term debt, net of current portion | 2,679.2 | 248.9 | 51.2 | — | 2,979.3 | ||||||||||||||
Intercompany notes payable | — | — | 528.8 | (528.8 | ) | — | |||||||||||||
Other long-term liabilities | 35.5 | 15.2 | 181.6 | (72.3 | ) | 160.0 | |||||||||||||
Intercompany payable | — | — | 168.2 | (168.2 | ) | — | |||||||||||||
2,912.4 | 390.2 | 1,100.2 | (787.9 | ) | 3,614.9 | ||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Redeemable noncontrolling interests | — | — | 138.3 | — | 138.3 | ||||||||||||||
Shareholders’ equity: | |||||||||||||||||||
HealthSouth shareholders’ equity | 735.9 | 2,124.6 | 659.4 | (2,784.0 | ) | 735.9 | |||||||||||||
Noncontrolling interests | — | — | 192.8 | — | 192.8 | ||||||||||||||
Total shareholders’ equity | 735.9 | 2,124.6 | 852.2 | (2,784.0 | ) | 928.7 | |||||||||||||
Total liabilities and shareholders’ equity | $ | 3,648.3 | $ | 2,514.8 | $ | 2,090.7 | $ | (3,571.9 | ) | $ | 4,681.9 |
Three Months Ended March 31, 2017 | |||||||||||||||||||
HealthSouth Corporation | Guarantor Subsidiaries | Nonguarantor Subsidiaries | Eliminating Entries | HealthSouth Consolidated | |||||||||||||||
(In Millions) | |||||||||||||||||||
Net cash provided by operating activities | $ | 45.1 | $ | 74.0 | $ | 61.7 | $ | — | $ | 180.8 | |||||||||
Cash flows from investing activities: | |||||||||||||||||||
Purchases of property and equipment | (5.2 | ) | (13.1 | ) | (22.9 | ) | — | (41.2 | ) | ||||||||||
Additions to capitalized software costs | (3.0 | ) | (0.2 | ) | (0.4 | ) | — | (3.6 | ) | ||||||||||
Acquisitions of businesses, net of cash acquired | (10.9 | ) | — | (5.5 | ) | — | (16.4 | ) | |||||||||||
Net change in restricted cash | — | — | (4.7 | ) | — | (4.7 | ) | ||||||||||||
Proceeds from repayment of intercompany note receivable | 7.0 | — | — | (7.0 | ) | — | |||||||||||||
Other, net | (0.8 | ) | 9.0 | 3.9 | — | 12.1 | |||||||||||||
Net cash used in investing activities | (12.9 | ) | (4.3 | ) | (29.6 | ) | (7.0 | ) | (53.8 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||||||||
Principal payments on debt, including pre-payments | (5.6 | ) | — | (0.8 | ) | — | (6.4 | ) | |||||||||||
Principal payments on intercompany note payable | — | — | (7.0 | ) | 7.0 | — | |||||||||||||
Borrowings on revolving credit facility | 55.0 | — | — | — | 55.0 | ||||||||||||||
Payments on revolving credit facility | (122.0 | ) | — | — | — | (122.0 | ) | ||||||||||||
Repurchases of common stock, including fees and expenses | (18.1 | ) | — | — | — | (18.1 | ) | ||||||||||||
Dividends paid on common stock | (22.2 | ) | — | — | — | (22.2 | ) | ||||||||||||
Proceeds from exercising stock warrants | 26.6 | — | — | — | 26.6 | ||||||||||||||
Distributions paid to noncontrolling interests of consolidated affiliates | — | — | (11.5 | ) | — | (11.5 | ) | ||||||||||||
Taxes paid on behalf of employees for shares withheld | (6.6 | ) | — | (0.3 | ) | — | (6.9 | ) | |||||||||||
Other, net | 0.2 | (1.6 | ) | 0.6 | — | (0.8 | ) | ||||||||||||
Change in intercompany advances | 82.3 | (67.1 | ) | (15.2 | ) | — | — | ||||||||||||
Net cash used in financing activities | (10.4 | ) | (68.7 | ) | (34.2 | ) | 7.0 | (106.3 | ) | ||||||||||
Increase (decrease) in cash and cash equivalents | 21.8 | 1.0 | (2.1 | ) | — | 20.7 | |||||||||||||
Cash and cash equivalents at beginning of period | 20.6 | 1.6 | 18.3 | — | 40.5 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 42.4 | $ | 2.6 | $ | 16.2 | $ | — | $ | 61.2 |
Three Months Ended March 31, 2016 | |||||||||||||||||||
HealthSouth Corporation | Guarantor Subsidiaries | Nonguarantor Subsidiaries | Eliminating Entries | HealthSouth Consolidated | |||||||||||||||
(In Millions) | |||||||||||||||||||
Net cash provided by operating activities | $ | 18.8 | $ | 90.9 | $ | 59.9 | $ | — | $ | 169.6 | |||||||||
Cash flows from investing activities: | |||||||||||||||||||
Purchases of property and equipment | (3.2 | ) | (14.3 | ) | (13.9 | ) | — | (31.4 | ) | ||||||||||
Additions to capitalized software costs | (7.7 | ) | — | — | — | (7.7 | ) | ||||||||||||
Net change in restricted cash | — | — | (3.2 | ) | — | (3.2 | ) | ||||||||||||
Proceeds from repayment of intercompany notes receivable | 5.0 | — | — | (5.0 | ) | — | |||||||||||||
Other, net | — | (0.3 | ) | 3.1 | — | 2.8 | |||||||||||||
Net cash used in investing activities | (5.9 | ) | (14.6 | ) | (14.0 | ) | (5.0 | ) | (39.5 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||||||||
Principal payments on debt, including pre-payments | (55.6 | ) | (0.4 | ) | (0.3 | ) | — | (56.3 | ) | ||||||||||
Principal payments on intercompany note payable | — | — | (5.0 | ) | 5.0 | — | |||||||||||||
Borrowings on revolving credit facility | 60.0 | — | — | — | 60.0 | ||||||||||||||
Payments on revolving credit facility | (60.0 | ) | — | — | — | (60.0 | ) | ||||||||||||
Repurchases of common stock, including fees and expenses | (12.9 | ) | — | — | — | (12.9 | ) | ||||||||||||
Dividends paid on common stock | (21.3 | ) | — | — | — | (21.3 | ) | ||||||||||||
Distributions paid to noncontrolling interests of consolidated affiliates | — | — | (15.6 | ) | — | (15.6 | ) | ||||||||||||
Taxes paid on behalf of employees for shares withheld | (9.9 | ) | — | — | — | (9.9 | ) | ||||||||||||
Other, net | 1.9 | (1.4 | ) | (3.0 | ) | — | (2.5 | ) | |||||||||||
Change in intercompany advances | 91.5 | (72.9 | ) | (18.6 | ) | — | — | ||||||||||||
Net cash used in financing activities | (6.3 | ) | (74.7 | ) | (42.5 | ) | 5.0 | (118.5 | ) | ||||||||||
Increase in cash and cash equivalents | 6.6 | 1.6 | 3.4 | — | 11.6 | ||||||||||||||
Cash and cash equivalents at beginning of period | 41.2 | 1.2 | 19.2 | — | 61.6 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 47.8 | $ | 2.8 | $ | 22.6 | $ | — | $ | 73.2 |
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