Genesis HealthCare (Genesis, or the Company) (NYSE:GEN), one of the
largest post-acute care providers in the United States, today
announced operating results for the fourth quarter and fiscal year
ended December 31, 2016.
Fourth Quarter 2016 and Fiscal Year End
2016 Results
- US GAAP revenue in the fourth quarter of 2016 was $1.40 billion
compared to $1.44 billion in the prior year quarter; US GAAP
revenue in the year ended 2016 was $5.73 billion compared to $5.62
billion in the year ended 2015;
- US GAAP net income attributable to Genesis HealthCare in the
fourth quarter of 2016 was $22.5 million compared to US GAAP net
loss of $265.5 million in the fourth quarter of 2015; US GAAP net
loss attributable to Genesis HealthCare in the year ended 2016 was
$64.0 million compared to US GAAP net loss of $426.2 million in the
year ended 2015;
- Adjusted EBITDAR in the fourth quarter of 2016 was $156.6
million compared to $161.0 million in the prior year quarter;
Adjusted EBITDAR in the year ended 2016 was $696.5 million compared
to $725.6 million in the year ended 2015;
- Adjusted EBITDA in the fourth quarter of 2016 was $33.2 million
compared to $39.7 million in the prior year quarter; Adjusted
EBITDA in the year ended 2016 was $197.5 million compared to $243.9
million in the year ended 2015.
During the third quarter earnings cycle, the
Company reaffirmed its full year guidance range. This guidance
assumed continued moderation of census pressures and a stable
operating environment. However, during the fourth quarter,
and particularly in November and December, the Company experienced
lower than expected admissions resulting in a 40 basis point drop
in fourth quarter 2016 occupancy as compared to the seasonally soft
third quarter of 2016. Lower occupancy across the skilled
nursing sector nationwide also negatively impacted the performance
of the Company’s rehabilitation therapy segment. During the
fourth quarter, Genesis also experienced a $2 per patient day
reduction in its overall weighted average inpatient revenue,
largely driven by reduced funding in the state of Texas.
Overall Medicaid reimbursement rate growth is not keeping pace with
growth in labor costs, particularly in midwest and western states,
resulting in margin compression.
“Our fourth quarter results underscore the
continued challenges for post-acute service providers, including
higher patient costs and persistent skilled census pressures,”
noted George V. Hager, Jr., Chief Executive Officer of Genesis.
“While we are disappointed with the fourth quarter, we closed the
year having accomplished many of our strategic objectives. Over the
past year, we completed the divestiture of non-strategic ancillary
businesses and 31 facilities, entered into new leases to improve
our overall capital structure and extended debt maturities while
making great strides with our innovative value-based
initiatives.”
“As we look forward to 2017, we remain focused
on our transformation plan, which includes continued development of
our value-based initiatives, the divestiture of non-strategic
assets and maintaining strong financial discipline,” continued
Hager. “Already in 2017, we have executed a plan to reduce
overhead and operating costs by approximately $50 million to
counter external business pressures we expect will persist
throughout 2017. Over our history, we have demonstrated an
ability to navigate through challenging times, and emerge even
stronger. We are confident our near term decisions will
position us to capitalize on the favorable demographics and longer
term supply – demand dynamics that should be experienced by quality
providers, like Genesis, focused on outcomes and cost.”
Business Development and
DivestituresGenesis continually evaluates the performance
of its operating units with an emphasis on divesting
underperforming assets or assets in non-strategic markets. In
2016, Genesis completed the divestiture of 31 facilities, as well
as its hospice and home care businesses. The Company plans to
focus its efforts and resources on those locations and services
with greater geographic density, strong hospital partnerships and
the greatest growth potential.
In November 2016, Genesis announced its intention to exit eight
Midwestern states to take place in two phases:
Phase I: The sale or divestiture of 18 owned facilities in the
states of Kansas, Missouri, Nebraska and Iowa. This
transaction is moving forward as planned and is expected to close
by the end of the first quarter or early second quarter of 2017.
The 18 facilities have annual revenue of $110.2 million, $(3.1)
million Adjusted EBITDA and $11.5 million of pre-tax net loss. The
proceeds from the sale will be used to, pay down debt, among other
things.
Phase II: To sell facility operations in Kentucky, Indiana, Ohio
and Montana. The sale of operations in Montana is proceeding as
planned. The 5 facilities in Montana have annual revenue of
$35.8 million, $(1.4) million Adjusted EBITDA and $(2.7) million of
pre-tax net loss. Genesis has decided NOT to sell the operations of
its centers in Indiana, Ohio and Kentucky. The business operating
and regulatory outlook has improved since the Company made its
initial announcement. We believe expected changes in the
legislative and reimbursement environment have created a more
favorable outlook for providers in these three states.
In 2017, Genesis expects to divest 31 underperforming assets or
assets in non-strategic markets, including the previously mentioned
divestiture of facilities in Nebraska, Kansas, Iowa, Missouri and
Montana.
Financing ActivitiesIn December 2016, Genesis
completed the restructuring of its real estate bridge loans payable
to Welltower Inc. pursuant to which it split the two existing
bridge loans into four separate loans. Upon completion of the
restructuring, the Company and Welltower are now parties to the
four separate loans, which have an aggregate principal amount equal
to $317.0, the same outstanding aggregate principal amount of the
prior loans. Each of the revised loans is deemed effective as
of October 1, 2016 with an interest rate of 10.0% per year through
January 1, 2018. The interest rate for each loan will escalate by
25 basis points on January 1 of each year until the loans mature on
January 1, 2022.
During 2016, Genesis closed on 28 HUD guaranteed mortgages
totaling $205.4 million that, together with $56.1 million of asset
sale proceeds, were used to pay down partially $258.6 million of
the aforementioned real estate bridge loans. Genesis expects
to refinance an additional $60.0 million of such loans with lower
cost and longer maturity HUD guaranteed mortgages or other
permanent financing in 2017.
New Master LeasesDuring the fourth quarter of 2016, Genesis
entered into new leases with Second Spring Healthcare Investments
for 64 skilled nursing facilities and an additional 28 facilities
with a joint venture between Welltower, Cindat Capital Management
Ltd., and Union Life Insurance Co., Ltd. All 92 facilities were
previously leased from Welltower Inc. Genesis continues to operate
the facilities pursuant to its new leases which result in annual
rent reductions and reduced lease escalators. In total, the
first-year rent, including the impact of escalators, will be $10.5
million lower than the rent Genesis would have incurred under the
former leases. As part of the transactions, Genesis issued
notes totaling $74.8 million to Welltower.
In summary, the Company’s financing activities in 2016
successfully extended all significant long-term debt maturities to
2020 and its lease restructuring activities reduced 2017 weighted
average lease escalators from approximately 3.0% to 1.8%.
Laying a Strong Foundation for the Future
Genesis continues to make material progress in repositioning the
Company for success in the new world of value-based care.
Genesis is establishing a ‘best-in-class’ track record with
hospitals and payers by getting ahead of the curve on improving
patient outcomes, reducing lengths of stays and lowering costs.
Genesis’ unique capabilities in the areas of in-home rehabilitation
therapy, physician services and care transitions provide Genesis
with a competitive advantage that we believe cannot be matched by
other operators.
Bundled PaymentsGenesis’ Model 3 Bundled Payment Care Initiative
program continues to perform to expectations generating positive
results. In 2016, Genesis recognized $10 million of favorable
estimated settlements and has gained valuable experience through
its participation in the program. Genesis expects its actions to
reduce costs and improve outcomes in its 32 participating centers
will yield year-over-year settlement growth in 2017.
Medicare Shared Savings Program (MSSP)Effective January 1, 2016,
Genesis HealthCare ACO began participating in the MSSP through its
Genesis Physician Services (GPS) division. GPS providers make more
than half a million visits annually to both short- and long-stay
patients, helping them improve overall healthcare quality and
reduce unnecessary hospital readmissions. During 2016, the Company
managed approximately 15,000 Medicare fee for service beneficiaries
with annualized Medicare spend of more than $800 million.
During 2016, the MSSP required the Company to save at least 3% of
the total Medicare spend under management in order to share in up
to 50 percent of the savings with the Centers for Medicare &
Medicaid Services (CMS). Genesis will not receive final
reconciliations until mid-2017.
Vitality to YouGenesis continues to make progress with its
unique Vitality to You service offering that extends Genesis
Rehabilitation’s therapy services into the community. Vitality to
You revenue increased 132% year-over-year and is expected to
increase 116% in 2017 versus 2016.
CollaborationAt the end of January 2017, Genesis announced its
new groundbreaking clinical relationship with Kindred Healthcare.
As two of the largest providers of post-acute care in the nation,
Genesis and Kindred formed a strategic clinical collaboration to
improve quality, outcomes and care transitions across the
post-acute continuum.
“While the collaboration is still in its infancy, our
relationship with Kindred is indicative of the types of
relationships we are building with providers along the healthcare
continuum," noted Hager. "We are thrilled to collaborate with
Kindred to establish best-in-class practices under the new world of
value-based care.”
2017 Guidance
The Company’s presentation of 2017 guidance provided below
differs from its presentation in periods prior to 2017 in
compliance with comments from the U.S. Securities and Exchange
Commission regarding the use and disclosure of certain non-GAAP
measures.
Accordingly, for 2017 and all prospective reporting periods,
EBITDAR and Adjusted EBITDAR will no longer be referenced by the
Company as non-GAAP performance measures. The Company will
continue to report and compute Adjusted EBITDAR consistently with
prior reporting periods, but the utility of Adjusted EBITDAR will
be limited to that of a valuation measure.
Also, for 2017 and all prospective reporting periods, the
definition of Adjusted EBITDA will only reflect a deduction for
GAAP lease expense. Historically, the Company also deducted
other cash lease payments made pursuant to capital leases and
financing obligations. The additional cash lease payments
made pursuant to capital leases and financing obligations will,
however, be provided in its reported information for reference.
The Company’s full year 2017 guidance range, reflective of the
reporting conventions noted above, is outlined in the table
below.
|
|
|
|
|
|
|
|
|
|
|
|
2017 Guidance |
($ in millions) |
|
Low |
|
Mid |
|
High |
GAAP
Performance Measures and Key Data: |
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
5,400.0 |
|
|
$ |
5,500.0 |
|
|
$ |
5,600.0 |
|
Rent
expense |
|
|
133.0 |
|
|
|
135.0 |
|
|
|
137.0 |
|
Net loss
attributed to GHC, Inc. |
|
|
(85.0 |
) |
|
|
(79.0 |
) |
|
|
(74.0 |
) |
Non-GAAP
Performance Measures and Key Data: |
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
503.0 |
|
|
$ |
519.0 |
|
|
$ |
535.0 |
|
Adjusted
EBITDA |
|
|
542.0 |
|
|
|
558.0 |
|
|
|
573.0 |
|
Additional rent not included in GAAP rent* |
|
|
354.0 |
|
|
|
354.0 |
|
|
|
354.0 |
|
Non-GAAP
Valuation Measures: |
|
|
|
|
|
|
|
|
|
Adjusted
EBITDAR |
|
$ |
675.0 |
|
|
$ |
692.0 |
|
|
$ |
710.0 |
|
|
|
|
|
|
|
|
|
|
|
*-
includes approximately $12 million of rent that will lapse between
2020 and 2021 |
|
|
|
|
|
|
|
|
|
The Company’s 2017 earnings guidance is based upon, among other
things, the following assumptions:
- Divestiture of the previously mentioned skilled nursing
facilities during 2017, with a majority occurring in the first six
months of the year;
- A full year of reduced Medicaid funding in Texas negatively
impacting year over year EBITDA by $13.0 million;
- No weighted average Medicaid rate growth, in all other states
outside Texas;
- $10 million of net favorable gain share recognized from the
MSSP. This estimate is based off internal observations of
utilization and cost data, and will not be reconciled by CMS until
July 2017; and
- $50 million of overhead and net operating cost reductions.
The GAAP and non-GAAP measures provided above exclude any
unusual items that may occur, or additional portfolio or
restructuring actions, not previously disclosed by the
Company. In addition, the non-GAAP measures exclude the types
of adjustments outlined in the Company’s disclosure of Adjustments
to EBITDAR and EBITDA, referenced herein.
The Company is not able to provide forward-looking quantitative
GAAP to non-GAAP reconciliation for the 2017 earning guidance
because we do not know the unplanned or unique events that may
occur.
Conference Call
Genesis HealthCare will hold a conference call at
8:30 a.m. Eastern Time on Thursday, February 23, 2017 to discuss
financial results for the fourth quarter and fiscal year ended
2016. Investors can access the conference call by calling
(855) 849-2198 or live via a listen-only webcast through the
Genesis website at http://www.genesishcc.com/investor-relations/,
where a replay of the call will also be posted for one year.
2017 RBC Capital Markets Global Healthcare
Conference
Genesis also announced today that George V. Hager,
Jr., Chief Executive Officer, and Tom DiVittorio, Chief Financial
Officer, are scheduled to conduct a “fireside chat” at the 2017 RBC
Capital Markets Global Healthcare Conference on Thursday, February
23, 2017 at 11:00 a.m. Eastern Time. A live webcast and
replay will also be available on the Company’s website at
www.genesishcc.com/investor-relations.
About Genesis HealthCare
Genesis HealthCare (NYSE:GEN) is a holding company
with subsidiaries that, on a combined basis, comprise one of the
nation's largest post-acute care providers with approximately 500
skilled nursing centers and assisted/senior living communities in
34 states nationwide. Genesis subsidiaries also supply
rehabilitation and respiratory therapy to approximately 1,700
healthcare providers in 45 states, the District of Columbia and
China. References made in this release to "Genesis," "the
Company," "we," "us" and "our" refer to Genesis HealthCare and each
of its wholly-owned companies. Visit our website at
www.genesishcc.com.
Forward-Looking StatementsThis release includes “forward-looking
statements” within the meaning of the federal securities laws,
including the Private Securities Litigation Reform Act of 1995. You
can identify these statements by the fact that they do not relate
strictly to historical or current facts. These statements contain
words such as “may,” “will,” “project,” “might,” “expect,”
“believe,” “anticipate,” “intend,” “could,” “would,” “estimate,”
“continue,” “pursue,” “plans,” or “prospect,” or the negative or
other variations thereof or comparable terminology. They include,
but are not limited to, statements about Genesis’ expectations and
beliefs regarding its future financial performance, anticipated
cost management, anticipated business development, anticipated
financing activities and anticipated demographic and supply-demand
trends facing the industry. These forward-looking statements are
based on current expectations and projections about future events,
including the assumptions stated in this release, and there can be
no assurance that they will be achieved or occur, in whole or in
part, in the timeframes anticipated by the Company or at all.
Investors are cautioned that forward-looking statements are not
guarantees of future performance or results and involve risks and
uncertainties that cannot be predicted or quantified and,
consequently, the actual performance of Genesis may differ
materially from that expressed or implied by such forward-looking
statements.
These risks and uncertainties include, but are not limited to,
the following:
- reductions and/or delays in Medicare or Medicaid reimbursement
rates, or changes in the rules governing the Medicare or Medicaid
programs could have a material adverse effect on our revenues,
financial condition and results of operations;
- reforms to the U.S. healthcare system that have imposed new
requirements on us and uncertainties regarding potential material
changes to such reforms;
- revenue we receive from Medicare and Medicaid being subject to
potential retroactive reduction;
- our success being dependent upon retaining key executives and
personnel;
- it can be difficult to attract and retain qualified nurses,
therapists, healthcare professionals and other key personnel,
which, along with a growing number of minimum wage and compensation
related regulations, can increase our costs related to these
employees;
- recently enacted changes in Medicare reimbursements for
physician and non-physician services could impact reimbursement for
medical professionals. Moreover, payment annual caps that limit the
amounts that can be paid for outpatient therapy services rendered
to any Medicare beneficiary may negatively affect our results of
operations;
- we are subject to extensive and complex laws and government
regulations. If we are not operating in compliance with these laws
and regulations or if these laws and regulations change, we could
be required to make significant expenditures or change our
operations in order to bring our facilities and operations into
compliance;
- our physician services operations are subject to corporate
practice of Medicare laws and regulations. Our failure to comply
with these laws and regulations could have a material adverse
effect on our business and operations;
- we face inspections, reviews, audits and investigations under
federal and state government programs, such as the Department of
Justice. These investigations and audits could result in adverse
findings that may negatively affect our business, including our
results of operations, liquidity, financial condition, and
reputation;
- significant legal actions, which are commonplace in our
industry, could subject us to increased operating costs, which
could materially and adversely affect our results of operations,
liquidity, financial condition, and reputation;
- insurance coverages, including professional liability coverage,
may become increasingly expensive and difficult to obtain for
health care companies, and our self-insurance may expose us to
significant losses;
- failure to maintain effective internal control over financial
reporting could have an adverse effect on our ability to report on
our financial results on a timely and accurate basis;
- we may be unable to reduce costs to offset decreases in our
patient census levels or other expenses timely and completely;
- completed and future acquisitions may consume significant
resources, may be unsuccessful and could expose us to unforeseen
liabilities and integration risks;
- we lease a significant number of our facilities and may
experience risks relating to lease termination, lease expense
escalators, lease extensions, special charges and leases that are
not economically efficient in the current business
environment;
- our substantial indebtedness, scheduled maturities and
disruptions in the financial markets could affect our ability to
obtain financing or to extend or refinance debt as it matures,
which could negatively impact our results of operations, liquidity,
financial condition and the market price of our common stock;
- our potential issuance of debt securities that are convertible
into our common stock could result in dilution of common
stockholders’ percentage ownership of our company, if such debt
securities are converted to common stock;
- we are subject to numerous covenants and requirements under our
various credit and leasing agreements and a breach of any such
covenants or requirements could, unless timely and effectively
remediated, lead to default and potential cross default under such
agreements;
- the holders of a majority of the voting power of Genesis’
common stock have entered into an extended voting agreement, and
the voting group’s interests may conflict with the interests of
other stockholders;
- some of our directors are significant stockholders or
representatives of significant stockholders, which may present
issues regarding diversion of corporate opportunities and other
potential conflicts; and
- we are a “controlled company” within the meaning of NYSE rules
and, as a result, qualify for and rely on exemptions from certain
corporate governance requirements.
The Company’s Annual Report on Form 10-K for the year ended
December 31, 2015, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K, and other filings with the U.S. Securities and
Exchange Commission, including the Company’s Annual Report on Form
10-K for the year ended December 31, 2016 when it is filed, discuss
the foregoing risks as well as other important risks and
uncertainties of which investors should be aware. Any
forward-looking statements contained herein are made only as of the
date of this release. Genesis disclaims any obligation to update
its forward-looking statements or any of the information contained
in this release. Investors are cautioned not to place undue
reliance on these forward-looking statements.
GENESIS HEALTHCARE, INC. |
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(UNAUDITED) |
|
(IN THOUSANDS, EXCEPT PER SHARE
DATA) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December
31, |
|
Twelve months ended December
31, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
|
Net
revenues |
$ |
1,402,860 |
|
|
$ |
1,440,721 |
|
|
$ |
5,732,430 |
|
|
$ |
5,619,224 |
|
|
Salaries,
wages and benefits |
834,889 |
|
|
|
844,527 |
|
|
|
3,369,713 |
|
|
|
3,289,820 |
|
|
Other
operating expenses |
|
351,553 |
|
|
|
365,264 |
|
|
|
1,413,639 |
|
|
|
1,358,983 |
|
|
General and
administrative costs |
46,062 |
|
|
|
44,987 |
|
|
|
186,062 |
|
|
|
175,889 |
|
|
Provision
for losses on accounts receivable |
26,039 |
|
|
|
31,666 |
|
|
|
107,815 |
|
|
|
100,521 |
|
|
Lease
expense |
|
36,448 |
|
|
|
37,243 |
|
|
|
146,244 |
|
|
|
150,276 |
|
|
Depreciation and amortization expense |
63,637 |
|
|
|
61,574 |
|
|
|
254,459 |
|
|
|
237,617 |
|
|
Interest
expense |
|
127,691 |
|
|
|
131,573 |
|
|
|
528,544 |
|
|
|
507,809 |
|
|
Loss on
extinguishment of debt |
460 |
|
|
|
— |
|
|
|
16,290 |
|
|
|
130 |
|
|
Investment
income |
|
(945 |
) |
|
|
(477 |
) |
|
|
(3,018 |
) |
|
|
(1,677 |
) |
|
Other
(income) loss |
|
(158,986 |
) |
|
|
6,121 |
|
|
|
(207,070 |
) |
|
|
(1,400 |
) |
|
Transaction
costs |
|
(1,875 |
) |
|
|
4,358 |
|
|
|
7,928 |
|
|
|
96,374 |
|
|
Long-lived
asset impairments |
35,431.00 |
|
|
|
28,546 |
|
|
|
35,431 |
|
|
|
28,546 |
|
|
Skilled
Healthcare and other loss contingency expense |
— |
|
|
|
— |
|
|
|
15,192 |
|
|
|
31,500 |
|
|
Equity in
net income of unconsolidated affiliates |
|
(1,133 |
) |
|
|
(986 |
) |
|
|
(3,286 |
) |
|
|
(2,139 |
) |
|
Income
(loss) before income tax expense (benefit) |
43,589 |
|
|
|
(113,675 |
) |
|
|
(135,513 |
) |
|
|
(353,025 |
) |
|
Income tax
expense (benefit) |
|
2,303 |
|
|
|
199,317 |
|
|
|
(17,435 |
) |
|
|
172,524 |
|
|
Income
(loss) from continuing operations |
41,286 |
|
|
|
(312,992 |
) |
|
|
(118,078 |
) |
|
|
(525,549 |
) |
|
Income
(loss) from discontinued operations, net of taxes |
|
28 |
|
|
|
352 |
|
|
|
27 |
|
|
|
(1,219 |
) |
|
Net income
(loss) |
|
41,314 |
|
|
|
(312,640 |
) |
|
|
(118,051 |
) |
|
|
(526,768 |
) |
|
Less net
(income) loss attributable to noncontrolling interests |
|
(18,857 |
) |
|
|
47,149 |
|
|
|
54,038 |
|
|
|
100,573 |
|
|
Net income
(loss) attributable to Genesis Healthcare, Inc. |
$ |
22,457 |
|
|
$ |
(265,491 |
) |
|
$ |
(64,013 |
) |
|
$ |
(426,195 |
) |
|
GENESIS HEALTHCARE, INC. |
SELECTED BALANCE SHEET DATA |
(UNAUDITED) |
(IN THOUSANDS) |
|
|
|
December 31, |
|
December 31, |
|
|
|
2016 |
|
2015 |
|
Assets: |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and
equivalents |
|
$ |
51,408 |
|
|
$ |
61,543 |
|
|
Accounts
receivable, net of allowances for doubtful accounts |
|
|
832,109 |
|
|
|
789,387 |
|
|
Other
current assets |
|
|
175,470 |
|
|
|
160,563 |
|
|
Total
current assets |
|
|
1,058,987 |
|
|
|
1,011,493 |
|
|
Property and equipment,
net of accumulated depreciation |
|
|
3,765,393 |
|
|
|
4,085,247 |
|
|
Identifiable intangible
assets, net of accumulated amortization |
|
|
175,566 |
|
|
|
209,967 |
|
|
Goodwill |
|
|
440,712 |
|
|
|
470,019 |
|
|
Other long-term
assets |
|
|
338,543 |
|
|
|
283,223 |
|
|
Total
assets |
|
$ |
5,779,201 |
|
|
$ |
6,059,949 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Deficit: |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts
payable and accrued expenses |
|
$ |
474,073 |
|
|
$ |
431,542 |
|
|
Accrued
compensation |
|
|
181,841 |
|
|
|
185,054 |
|
|
Other
current liabilities |
|
|
201,646 |
|
|
|
182,069 |
|
|
Total
current liabilities |
|
|
857,560 |
|
|
|
798,665 |
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
1,146,550 |
|
|
|
1,186,159 |
|
|
Capital lease
obligations |
|
|
997,340 |
|
|
|
1,053,816 |
|
|
Financing
obligations |
|
|
2,867,534 |
|
|
|
3,064,077 |
|
|
Other long-term
liabilities |
|
|
640,405 |
|
|
|
576,619 |
|
|
Stockholders'
deficit |
|
|
(730,188 |
) |
|
|
(619,387 |
) |
|
Total
liabilities and stockholders' deficit |
|
$ |
5,779,201 |
|
|
$ |
6,059,949 |
|
|
|
|
|
|
|
|
|
|
GENESIS HEALTHCARE, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(UNAUDITED) |
(IN THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
Net cash
provided by operating activities (1) |
|
$ |
68,361 |
|
|
$ |
8,618 |
|
|
Net cash
(used in) investing activities |
|
|
(12,788 |
) |
|
|
(253,484 |
) |
|
Net cash
(used in) provided by financing activities |
|
|
(65,708 |
) |
|
|
218,861 |
|
|
Net
decrease in cash and equivalents |
|
|
(10,135 |
) |
|
|
(26,005 |
) |
|
Beginning
of period |
|
|
61,543 |
|
|
|
87,548 |
|
|
End of
period |
|
$ |
51,408 |
|
|
$ |
61,543 |
|
|
_________________________(1) - Net cash provided by operating
activities in the twelve months ended December 31, 2016 and 2015
includes approximately $8 million and $71 million, respectively, of
cash payments for transaction-related costs.
GENESIS HEALTHCARE, INC. |
KEY FINANCIAL PERFORMANCE
INDICATORS |
(UNAUDITED) |
|
|
|
Three months ended December
31, |
|
Twelve months ended December
31, |
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
(In thousands) |
|
Financial
Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues |
|
$ |
1,402,860 |
|
$ |
1,440,721 |
|
|
$ |
5,732,430 |
|
|
$ |
5,619,224 |
|
|
EBITDAR |
|
|
271,365 |
|
|
116,715 |
|
|
|
793,734 |
|
|
|
542,677 |
|
|
EBITDA |
|
|
234,917 |
|
|
79,472 |
|
|
|
647,490 |
|
|
|
392,401 |
|
|
Adjusted
EBITDAR |
|
|
156,648 |
|
|
161,031 |
|
|
|
696,489 |
|
|
|
725,588 |
|
|
Adjusted
EBITDA |
|
|
33,196 |
|
|
39,682 |
|
|
|
197,460 |
|
|
|
243,870 |
|
|
Net
income (loss) attributable to Genesis Healthcare, Inc. |
|
|
22,457 |
|
|
(265,491 |
) |
|
|
(64,013 |
) |
|
|
(426,195 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INPATIENT
SEGMENT*: |
|
Three months ended December
31, |
|
Twelve months ended December
31, |
|
|
|
2016 |
|
2015 |
|
2016 |
|
|
2015 |
|
Occupancy
Statistics - Inpatient |
|
|
|
|
|
|
|
|
|
|
|
|
|
Available
licensed beds in service at end of period |
|
|
57,947 |
|
|
|
58,841 |
|
|
|
57,947 |
|
|
|
58,841 |
|
|
Available
operating beds in service at end of period |
|
|
56,009 |
|
|
|
57,325 |
|
|
|
56,009 |
|
|
|
57,325 |
|
|
Available
patient days based on licensed beds |
|
|
5,212,571 |
|
|
|
5,121,285 |
|
|
|
21,059,222 |
|
|
|
20,216,691 |
|
|
Available
patient days based on operating beds |
|
|
5,048,008 |
|
|
|
5,010,717 |
|
|
|
20,451,912 |
|
|
|
19,663,712 |
|
|
Actual
patient days |
|
|
4,298,375 |
|
|
|
4,310,058 |
|
|
|
17,500,812 |
|
|
|
17,061,645 |
|
|
Occupancy
percentage - licensed beds |
|
|
82.5 |
% |
|
|
84.2 |
% |
|
|
83.1 |
% |
|
|
84.4 |
% |
|
Occupancy
percentage - operating beds |
|
|
85.1 |
% |
|
|
86.0 |
% |
|
|
85.6 |
% |
|
|
86.8 |
% |
|
Skilled
mix |
|
|
19.3 |
% |
|
|
20.3 |
% |
|
|
20.1 |
% |
|
|
21.4 |
% |
|
Average
daily census |
|
|
46,721 |
|
|
|
46,848 |
|
|
|
47,816 |
|
|
|
46,744 |
|
|
Revenue
per patient day (skilled nursing facilities) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare
Part A |
|
$ |
531 |
|
|
$ |
510 |
|
|
$ |
517 |
|
|
$ |
504 |
|
|
Medicare
total (including Part B) |
|
|
576 |
|
|
|
553 |
|
|
|
559 |
|
|
|
543 |
|
|
Insurance |
|
|
455 |
|
|
|
447 |
|
|
|
454 |
|
|
|
448 |
|
|
Private
and other |
|
|
306 |
|
|
|
295 |
|
|
|
306 |
|
|
|
295 |
|
|
Medicaid |
|
|
215 |
|
|
|
217 |
|
|
|
218 |
|
|
|
216 |
|
|
Medicaid
(net of provider taxes) |
|
|
196 |
|
|
|
196 |
|
|
|
198 |
|
|
|
195 |
|
|
Weighted
average (net of provider taxes) |
|
$ |
268 |
|
|
$ |
268 |
|
|
$ |
271 |
|
|
$ |
270 |
|
|
Patient days by
payor (skilled nursing facilities) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare |
|
|
502,728 |
|
|
|
522,488 |
|
|
|
2,119,955 |
|
|
|
2,214,184 |
|
|
Insurance |
|
|
304,089 |
|
|
|
289,540 |
|
|
|
1,225,608 |
|
|
|
1,172,776 |
|
|
Total
skilled mix days |
|
|
806,817 |
|
|
|
812,028 |
|
|
|
3,345,563 |
|
|
|
3,386,960 |
|
|
Private
and other |
|
|
301,470 |
|
|
|
297,293 |
|
|
|
1,205,421 |
|
|
|
1,160,070 |
|
|
Medicaid |
|
|
3,074,368 |
|
|
|
2,880,344 |
|
|
|
12,105,905 |
|
|
|
11,272,487 |
|
|
Total
Days |
|
|
4,182,655 |
|
|
|
3,989,665 |
|
|
|
16,656,889 |
|
|
|
15,819,517 |
|
|
Patient days as
a percentage of total patient days (skilled nursing
facilities) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare |
|
|
12.0 |
% |
|
|
13.1 |
% |
|
|
12.7 |
% |
|
|
14.0 |
% |
|
Insurance |
|
|
7.3 |
% |
|
|
7.2 |
% |
|
|
7.4 |
% |
|
|
7.4 |
% |
|
Skilled
mix |
|
|
19.3 |
% |
|
|
20.3 |
% |
|
|
20.1 |
% |
|
|
21.4 |
% |
|
Private
and other |
|
|
7.2 |
% |
|
|
7.5 |
% |
|
|
7.2 |
% |
|
|
7.3 |
% |
|
Medicaid |
|
|
73.5 |
% |
|
|
72.2 |
% |
|
|
72.7 |
% |
|
|
71.3 |
% |
|
Total |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
Facilities at
end of period |
|
|
|
|
|
|
|
|
|
|
|
|
|
Skilled nursing
facilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased |
|
|
374 |
|
|
|
381 |
|
|
|
374 |
|
|
|
381 |
|
|
Owned |
|
|
60 |
|
|
|
49 |
|
|
|
60 |
|
|
|
49 |
|
|
Joint
Venture |
|
|
5 |
|
|
|
5 |
|
|
|
5 |
|
|
|
5 |
|
|
Managed
** |
|
|
34 |
|
|
|
40 |
|
|
|
34 |
|
|
|
40 |
|
|
Total skilled nursing facilities |
|
|
473 |
|
|
|
475 |
|
|
|
473 |
|
|
|
475 |
|
|
Total licensed beds |
|
|
57,809 |
|
|
|
58,046 |
|
|
|
57,809 |
|
|
|
58,046 |
|
|
Assisted living
facilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased |
|
|
19 |
|
|
|
30 |
|
|
|
19 |
|
|
|
30 |
|
|
Owned |
|
|
4 |
|
|
|
22 |
|
|
|
4 |
|
|
|
22 |
|
|
Joint
Venture |
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
Managed |
|
|
2 |
|
|
|
3 |
|
|
|
2 |
|
|
|
3 |
|
|
Total assisted living facilities |
|
|
26 |
|
|
|
56 |
|
|
|
26 |
|
|
|
56 |
|
|
Total licensed beds |
|
|
2,182 |
|
|
|
3,985 |
|
|
|
2,182 |
|
|
|
3,985 |
|
|
Total facilities |
|
|
499 |
|
|
|
531 |
|
|
|
499 |
|
|
|
531 |
|
|
Total Jointly Owned and
Managed– (Unconsolidated) |
|
|
15 |
|
|
|
22 |
|
|
|
15 |
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REHABILITATION
THERAPY SEGMENT***: |
|
Three months ended December
31, |
|
Twelve months ended December
31, |
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
Revenue mix %: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated |
|
|
38 |
% |
|
|
37 |
% |
|
|
37 |
% |
|
|
38 |
% |
|
Non-affiliated |
|
|
62 |
% |
|
|
63 |
% |
|
|
63 |
% |
|
|
62 |
% |
|
Sites of service (at
end of period) |
|
|
1,548 |
|
|
|
1,670 |
|
|
|
1,548 |
|
|
|
1,670 |
|
|
Revenue per site |
|
$ |
152,077 |
|
|
$ |
165,622 |
|
|
$ |
643,460 |
|
|
$ |
672,296 |
|
|
Therapist efficiency
% |
|
|
67 |
% |
|
|
68 |
% |
|
|
68 |
% |
|
|
69 |
% |
|
*Inpatient Segment Key Financial Performance
Indicators for the twelve months ended December 31, 2015 include
Skilled Healthcare beginning February 1, 2015.
** In 2015 and 2016, includes 20 facilities located in Texas for
which the real estate is owned by Genesis.
*** Excludes respiratory therapy services.
Reasons for Non-GAAP Financial
Disclosure
The following discussion includes references to EBITDAR,
Adjusted EBITDAR, EBITDA and Adjusted EBITDA, which are non-GAAP
financial measures (collectively, Non-GAAP Financial Measures). For
purposes of SEC Regulation G, a non-GAAP financial measure is a
numerical measure of a registrant’s historical or future financial
performance, financial position and cash flows that excludes
amounts, or is subject to adjustments that have the effect of
excluding amounts, that are included in the most directly
comparable financial measure calculated and presented in accordance
with GAAP in the statement of operations, balance sheet or
statement of cash flows (or equivalent statements) of the
registrant; or includes amounts, or is subject to adjustments that
have the effect of including amounts, that are excluded from the
most directly comparable financial measure so calculated and
presented. In this regard, GAAP refers to generally accepted
accounting principles in the United States. Pursuant to the
requirements of Regulation G, we have provided reconciliations of
the Non-GAAP Financial Measures to the most directly comparable
GAAP financial measures.
We believe the presentation of Non-GAAP Financial Measures
provides useful information to investors regarding our results of
operations because these financial measures are useful for
trending, analyzing and benchmarking the performance and value of
our business. By excluding certain expenses and other items that
may not be indicative of our core business operating results,
these Non-GAAP Financial Measures:
- allow investors to evaluate our performance from management’s
perspective, resulting in greater transparency with respect to
supplemental information used by us in our financial and
operational decision making;
- facilitate comparisons with prior periods and reflect the
principal basis on which management monitors financial
performance;
- facilitate comparisons with the performance of others in the
post-acute industry;
- provide better transparency as to the relationship each
reporting period between our cash basis lease expense and the level
of operating earnings available to fund lease expense;
and
- allow investors to view our financial performance and condition
in the same manner as our significant landlords and lenders require
us to report financial information to them in connection with
determining our compliance with financial covenants.
We use Non-GAAP Financial Measures primarily as performance
measures and believe that the GAAP financial measure most directly
comparable to them is net income (loss) attributed to Genesis
Healthcare, Inc. We use Non-GAAP Financial Measures to assess the
value of our business and the performance of our operating
businesses, as well as the employees responsible for operating such
businesses. Non-GAAP Financial Measures are useful in this regard
because they do not include such costs as interest expense, income
taxes and depreciation and amortization expense which may vary from
business unit to business unit depending upon such factors as the
method used to finance the original purchase of the business unit
or the tax law in the state in which a business unit operates. By
excluding such factors when measuring financial performance, many
of which are outside of the control of the employees responsible
for operating our business units, we are better able to evaluate
value and the operating performance of the business unit and the
employees responsible for business unit performance. Consequently,
we use these Non-GAAP Financial Measures to determine the extent to
which our employees have met performance goals, and therefore the
extent to which they may or may not be eligible for incentive
compensation awards.
We also use Non-GAAP Financial Measures in our annual budget
process. We believe these Non-GAAP Financial Measures facilitate
internal comparisons to historical operating performance of prior
periods and external comparisons to competitors’ historical
operating performance. The presentation of these Non-GAAP Financial
Measures is consistent with our past practice and we believe these
measures further enable investors and analysts to compare current
non-GAAP measures with non-GAAP measures presented in prior
periods.
Although we use Non-GAAP Financial Measures as financial
measures to assess value and the performance of our business, the
use of these Non-GAAP Financial Measures is limited because they do
not consider certain material costs necessary to operate the
business. These costs include our lease expense (only in the
case of EBITDAR and Adjusted EBITDAR), the cost to service debt,
the depreciation and amortization associated with our long-lived
assets, losses (gains) on extinguishment of debt, transaction
costs, long-lived asset impairment charges, federal and state
income tax expenses, the operating results of our discontinued
businesses and the income or loss attributed to non-controlling
interests. Because Non-GAAP Financial Measures do not
consider these important elements of our cost structure, a user of
our financial information who relies on Non-GAAP Financial Measures
as the only measures of our performance could draw an incomplete or
misleading conclusion regarding our financial performance.
Consequently, a user of our financial information should consider
net income (loss) attributed to Genesis Healthcare, Inc. as an
important measure of its financial performance because it provides
the most complete measure of our performance.
Other companies may define Non-GAAP Financial Measures
differently and, as a result, our Non-GAAP Financial Measures may
not be directly comparable to those of other companies.
Non-GAAP Financial Measures do not represent net income (loss), as
defined by GAAP. Non-GAAP Financial Measures should be considered
in addition to, not a substitute for, or superior to, GAAP
Financial Measures.
We use the following Non-GAAP Financial Measures that we believe
are useful to investors as key valuation and operating performance
measures:
EBITDAR and EBITDA
We use EBITDAR as one measure in determining the
value of prospective acquisitions or divestitures. EBITDAR is
also a commonly used measure to estimate the enterprise value of
businesses in the healthcare industry. In addition, covenants in
our lease agreements use EBITDAR as a measure of financial
compliance.
We believe EBITDA is useful to an investor in
evaluating our operating performance because it helps investors
evaluate and compare the results of our operations from period to
period by removing the impact of our capital structure (interest
and lease expense) and our asset base (depreciation and
amortization expense) from our operating results. EBITDA is a
commonly used measure to estimate the enterprise value of
businesses in the healthcare industry. In addition, covenants
in our debt agreements use EBITDA as a measure of financial
compliance.
Adjustments to EBITDAR and
EBITDA
We adjust EBITDAR and EBITDA when analyzing the
value of our business and evaluating our performance, respectively,
because we believe that the exclusion of certain additional items
described below provides useful supplemental information to
investors regarding, in the case of EBITDAR, the value of our
business, and, in the case of EBITDA, our ongoing operating
performance. We believe that the presentation of Adjusted
EBITDAR and Adjusted EBITDA, when combined with GAAP net income
(loss) attributable to Genesis Healthcare, Inc., EBITDAR and
EBITDA, is beneficial to an investor’s complete understanding of
the value of our business and our operating performance,
respectively. In addition, such adjustments are substantially
similar to the adjustments to EBITDAR and EBITDA provided for in
the financial covenant calculations contained in our lease and debt
agreements.
We adjust EBITDAR and EBITDA for the following
items:
- Loss on extinguishment of debt. We recognize losses on
the extinguishment of debt when we refinance our debt prior to its
original term, requiring us to write-off any unamortized deferred
financing fees. We exclude the effect of losses or gains
recorded on the early extinguishment of debt because we believe
these gains and losses do not accurately reflect the value or
underlying performance of our operating businesses.
- Other income (loss). We primarily use this income
statement caption to capture gains and losses on the sale or
disposition of assets. We exclude the effect of such gains
and losses because we believe they do not accurately reflect the
value or underlying performance of our operating
businesses.
- Transaction costs. In connection with our acquisition and
disposition transactions, we incur costs consisting of investment
banking, legal, transaction-based compensation and other
professional service costs. We exclude acquisition and
disposition related transaction costs expensed during the period
because we believe these costs do not reflect the value or
underlying performance of our operating businesses.
- Severance and restructuring. We exclude severance costs
from planned reduction in force initiatives associated with
restructuring activities intended to adjust our cost structure in
response to changes in the business environment. We believe
these costs do not reflect the value or underlying performance of
our operating businesses. We do not exclude severance costs
that are not associated with such restructuring
activities.
- Long-lived asset impairment charges. We exclude non-cash
long-lived asset impairment charges because we believe including
them does not reflect the value or ongoing operating performance of
our operating businesses. Additionally, such impairment
charges represent accelerated depreciation expense, and
depreciation expense is excluded from EBITDA.
- Losses of newly acquired, constructed or divested
businesses. The acquisition and construction of new
businesses is an element of our growth strategy. Many of the
businesses we acquire have a history of operating losses and
continue to generate operating losses in the months that follow our
acquisition. Newly constructed or developed businesses also
generate losses while in their start-up phase. We view these
losses as both temporary and an expected component of our long-term
investment in the new venture. We adjust these losses when
computing Adjusted EBITDAR and Adjusted EBITDA in order to better
analyze the value or performance of our mature ongoing
business. The activities of such businesses are adjusted when
computing Adjusted EBITDAR and Adjusted EBITDA until such time as a
new business generates positive Adjusted EBITDA. The
operating performance of new businesses is no longer adjusted when
computing Adjusted EBITDAR and Adjusted EBITDA beginning in the
period in which a new business generates positive Adjusted EBITDA
and all periods thereafter. The divestiture of
underperforming or non-strategic facilities is also an element of
our business strategy. We eliminate the results of divested
facilities beginning in the quarter in which they become
divested. We view the losses associated with the wind-down of
such divested facilities as not indicative of the value or
performance of our ongoing operating business.
- Stock-based compensation. We exclude stock-based
compensation expense because it does not result in an outlay of
cash and such non-cash expenses do not reflect the value or
underlying operating performance of our operating
businesses.
- Other Items. From time to time we incur costs or realize
gains that we do not believe reflect the underlying performance of
our operating businesses. In the current reporting period, we
incurred the following expenses that we believe are non-recurring
in nature and do not reflect the value or ongoing operating
performance of the Company or our operating businesses.
(1) Skilled Healthcare and other loss contingency expense – We
exclude the estimated settlement cost and any adjustments thereto
regarding the four legal matters inherited by Genesis in the
Skilled and Sun Transactions and disclosed in the commitments and
contingencies footnote to our consolidated financial statements
describing our material legal proceedings. In the year ended
December 31, 2016, we increased our estimated loss contingency
expense by $15.2 million, respectively, related to these
matters. In the year ended December 31, 2015, we recorded
$31.5 million, related to these matters. We believe these
costs are non-recurring in nature as they will no longer be
recognized following the final settlement of these matters.
We do not exclude the estimated settlement costs associated with
all other legal and regulatory matters arising in the normal course
of business. Also, we do not believe the excluded costs
reflect the value or underlying performance of our operating
businesses.
(2) Regulatory defense and related costs – We exclude the
costs of investigating and defending the matters associated with
the Skilled Healthcare and other loss contingency expense as noted
in footnote (1). We believe these costs are non-recurring in
nature as they will no longer be recognized following the final
settlement of these matters. Also, we do not believe the excluded
costs reflect the value or underlying performance of our
business.
(3) Other non-recurring costs – In the twelve months ended
December 31, 2016, we excluded $0.8 million of costs incurred in
connection with a settlement of disputed costs related to
previously reported periods and a regulatory audit associated with
acquired businesses and related to pre-acquisition periods.
In the twelve months ended December 31, 2015, we incurred a
self-insured program adjustment of $10.5 million for the
actuarially developed GLPL and workers’ compensation claims related
to policy periods 2014 and prior. We do not believe the
excluded costs are recurring or reflect the value or underlying
performance of our business.
Adjustments to EBITDA
- Conversion to cash basis operating leases. Our leases are
classified as either operating leases, capital leases or financing
obligations pursuant to applicable guidance under U.S. GAAP.
We view the primary provisions and economics of these leases,
regardless of their accounting treatment, as being nearly
identical. Virtually all of our leases are structured with
triple net terms, have fixed annual rent escalators and have
long-term initial maturities with renewal options.
Accordingly, in connection with our evaluation of the financial
performance of our business, we reclassify all of our leases to
operating lease treatment and reflect lease expense on a cash
basis. This approach allows us to better understand the
relationship in each reporting period of our operating performance,
as measured by EBITDAR and Adjusted EBITDAR, to the cash basis
obligations to our landlords in that reporting period, regardless
of the lease accounting treatment. This presentation and
approach is also consistent with the financial reporting and
covenant compliance requirements contained in all of our major
lease and loan agreements.
- Rent related to newly acquired, constructed or divested
businesses. Consistent with our treatment of excluding the
EBITDAR of newly acquired, constructed or divested businesses, we
exclude the rent expense associated with such businesses.
While such businesses are in their start-up or wind-down phase, we
do not believe including such lease expense reflects the ongoing
operating performance of our operating businesses.
GENESIS HEALTHCARE, INC. |
RECONCILIATION OF NET LOSS ATTRIBUTABLE TO
GENESIS HEALTHCARE, INC. TO EBITDA, |
EBITDAR, ADJUSTED EBITDA AND ADJUSTED
EBITDAR |
(UNAUDITED) |
(IN THOUSANDS) |
|
|
|
Three months ended December
31, |
|
|
Twelve months ended December
31, |
|
|
|
2016 |
|
2015 |
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Genesis Healthcare, Inc. |
|
$ |
22,457 |
|
|
$ |
(265,491 |
) |
|
|
$ |
(64,013 |
) |
|
$ |
(426,195 |
) |
|
(Income)
loss from discontinued operations, net of taxes |
|
|
(28 |
) |
|
|
(352 |
) |
|
|
|
(27 |
) |
|
|
1,219 |
|
|
Net
income (loss) attributable to noncontrolling interests |
|
|
18,857 |
|
|
|
(47,149 |
) |
|
|
|
(54,038 |
) |
|
|
(100,573 |
) |
|
Depreciation and amortization expense |
|
|
63,637 |
|
|
|
61,574 |
|
|
|
|
254,459 |
|
|
|
237,617 |
|
|
Interest
expense |
|
|
127,691 |
|
|
|
131,573 |
|
|
|
|
528,544 |
|
|
|
507,809 |
|
|
Income
tax expense (benefit) |
|
|
2,303 |
|
|
|
199,317 |
|
|
|
|
(17,435 |
) |
|
|
172,524 |
|
|
EBITDA |
|
$ |
234,917 |
|
|
$ |
79,472 |
|
|
|
$ |
647,490 |
|
|
$ |
392,401 |
|
|
Lease
expense |
|
|
36,448 |
|
|
|
37,243 |
|
|
|
|
146,244 |
|
|
|
150,276 |
|
|
EBITDAR |
|
$ |
271,365 |
|
|
$ |
116,715 |
|
|
|
$ |
793,734 |
|
|
$ |
542,677 |
|
|
Adjustments to EBITDAR: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of debt |
|
|
460 |
|
|
|
- |
|
|
|
|
16,290 |
|
|
|
130 |
|
|
Other
(income) loss |
|
|
(155,076 |
) |
|
|
6,121 |
|
|
|
|
(203,160 |
) |
|
|
(1,400 |
) |
|
Transaction costs |
|
|
(1,875 |
) |
|
|
4,358 |
|
|
|
|
7,928 |
|
|
|
96,374 |
|
|
Long-lived asset impairments |
|
|
35,431 |
|
|
|
28,546 |
|
|
|
|
35,431 |
|
|
|
28,546 |
|
|
Severance
and restructuring |
|
|
10 |
|
|
|
364 |
|
|
|
|
7,999 |
|
|
|
3,485 |
|
|
Losses of
newly acquired, constructed, or divested businesses |
|
|
3,321 |
|
|
|
415 |
|
|
|
|
10,442 |
|
|
|
4,030 |
|
|
Stock-based compensation |
|
|
1,664 |
|
|
|
2,275 |
|
|
|
|
8,423 |
|
|
|
4,754 |
|
|
Skilled
Healthcare and other loss contingency expense (1) |
|
|
- |
|
|
|
- |
|
|
|
|
15,192 |
|
|
|
31,500 |
|
|
Regulatory defense and related costs (2) |
|
|
1,348 |
|
|
|
2,237 |
|
|
|
|
3,449 |
|
|
|
4,992 |
|
|
Other
non-recurring costs (3) |
|
|
- |
|
|
|
- |
|
|
|
|
761 |
|
|
|
10,500 |
|
|
Adjusted EBITDAR |
|
$ |
156,648 |
|
|
$ |
161,031 |
|
|
|
$ |
696,489 |
|
|
$ |
725,588 |
|
|
Less: GAAP lease expense |
|
|
(36,448 |
) |
|
|
(37,243 |
) |
|
|
|
(146,244 |
) |
|
|
(150,276 |
) |
|
Less: Conversion to cash basis operating leases |
|
|
(87,584 |
) |
|
|
(86,464 |
) |
|
|
|
(357,685 |
) |
|
|
(341,030 |
) |
|
Plus: Rent related to losses of newly acquired, constructed,
ordivested businesses |
|
|
580 |
|
|
|
2,358 |
|
|
|
|
4,900 |
|
|
|
9,588 |
|
|
Adjusted EBITDA |
|
$ |
33,196 |
|
|
$ |
39,682 |
|
|
|
$ |
197,460 |
|
|
$ |
243,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Genesis HealthCare Contact:
Investor Relations
610-925-2000
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