Note 5 - Non-operating Income

3 Months Ended

Mar. 31, 2020

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.

	Three Months Ended March 31
(in thousands)	2020		2019
Equity in earnings of unconsolidated investments	$	2,811	$	2,321
Dividends and net realized gains and losses on sales of securities		2,022		1,931
Interest income		1,606		1,749
Gain on acquisition of equity method investment		1,707		-
Total non-operating income	$	8,146	$	6,001

Gain on Acquisition of Equity Method Investment

Effective February 27, 2020, the Company expanded its controlled operations through an acquisition of the remaining ownership interest of a 166-bed skilled nursing facility in Knoxville, Tennessee. We previously held a 25% 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 $1,707,000. The gain was recorded in "Non-operating income" in the interim condensed consolidated statement of operations.  Additionally, the excess of the fair value over the amounts assigned to the assets and liabilities of the investee resulted in recording goodwill in the amount of $346,000 on the acquisition date.