Note 5 - Non-operating Income

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Other Nonoperating Income and Expense [Text Block]

Note 5 – Non–Operating Income

Non–operating income includes equity in earnings of unconsolidated investments, dividends and other realized gains and losses on sales of marketable securities, and interest income.

Our most significant equity method investment is a 75.1% non–controlling ownership interest in Caris HealthCare L.P. (“Caris”), a business that specializes in hospice care services. For the nine months ended September 30, 2018, Caris recorded expenses of $8,364,000 for the settlement of their Qui Tam legal matter, all of which were incurred during the first two quarters of the year.

	Three Months Ended September 30				Nine Months Ended September 30
(in thousands)	2019		2018		2019		2018
Equity in earnings (losses) of unconsolidated investments	$	2,747	$	2,724	$	7,548	$	(1,860	)
Dividends and net realized gains on sales of securities		2,049		1,777		5,911		5,374
Interest income		1,867		1,916		5,502		5,492
Gain on acquisition of equity method investment		-		2,050		1,975		2,050
Total non-operating income	$	6,663	$	8,467	$	20,936	$	11,056

Gain on Acquisition of Equity Method Investments

Effective June 1, 2019, the Company expanded its controlled operations through an acquisition of the remaining ownership interest of a 60-bed memory care facility in St. Peters, Missouri. We previously held a noncontrolling interest in the facility and accounted for the investment as an equity method investment. The operating results of the business have been included in the accompanying interim condensed consolidated financial statements since the remaining ownership interest acquisition date.

Upon acquiring the remaining ownership interest, the Company recorded and increased its previously held equity interest up to fair value as of the acquisition date. This remeasurement of our equity interest at fair value resulted in a gain of $1,975,000 during the second quarter of 2019. The gain was recorded in "Non-operating income" in the interim condensed consolidated statement of operations.

In July 2018, the Company expanded its operations through an acquisition of additional ownership resulting in a controlling financial interest of a 14-bed geriatric psychiatric hospital in Osage Beach, Missouri.  We previously held a noncontrolling interest and accounted for the hospital as an equity method investment.  Upon acquiring a controlling financial interest, the Company fair valued its previously held equity interest as of the acquisition date.  This remeasurement of our equity interest at fair value resulted in a gain of $2,050,000 during the third quarter of 2018.