Note 8 - Business Segments

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 8 – Business Segments

The Company has two reportable operating segments: (1) inpatient services, which includes the operation of skilled nursing facilities, assisted and independent living facilities, and our behavioral health hospital; and (2) homecare and hospice services. These reportable operating segments are consistent with information used by the Company’s Chief Executive Officer, as chief operating decision maker (“CODM”), to assess performance and allocate resources.

The Company also reports an “all other” category that includes revenues from rental income, management and accounting services fees, insurance services, and costs of the corporate office. For additional information on these reportable segments see Note 2 – Summary of Significant Accounting Policies.

The Company’s CODM evaluates performance and allocates capital resources to each segment based on an operating model that is designed to improve the quality of patient care and profitability of the Company while enhancing long-term shareholder value. The CODM does not review assets by segment in his resource allocation and therefore, assets by segment are not disclosed below.

The following table sets forth the Company’s unaudited interim condensed consolidated statements of operations by business segment (in thousands):

	Three Months Ended September 30, 2021
	Inpatient Services		Homecare and Hospice		All Other			Total
Revenues:
Net patient revenues	$	222,884	$	31,933	$	-		$	254,817
Other revenues		128		-		11,363			11,491
Government stimulus income		10,429		-		-			10,429
Net operating revenues and grant income		233,441		31,933		11,363			276,737
Costs and expenses:
Salaries, wages, and benefits		131,567		17,592		10,146			159,305
Other operating		74,506		6,797		2,736			84,039
Rent		8,169		594		1,441			10,204
Depreciation and amortization		9,300		118		811			10,229
Interest		198		-		-			198
Total costs and expenses		223,740		25,101		15,134			263,975
Income (loss) from operations		9,701		6,832		(3,771	)		12,762
Non-operating income		-		-		3,399			3,399
Unrealized losses on marketable equity securities		-		-		(23,797	)		(23,797	)
Income (loss) before income taxes	$	9,701	$	6,832	$	(24,169	)	$	(7,636	)

	Three Months Ended September 30, 2020
	Inpatient Services		Homecare		All Other			Total
Revenues and grant income:
Net patient revenues	$	214,211	$	13,172	$	-		$	227,383
Other revenues		84		-		11,027			11,111
Government stimulus income		12,132		-		-			12,132
Net operating revenues and grant income		226,427		13,172		11,027			250,626
Costs and expenses:
Salaries, wages, and benefits		132,245		8,210		11,109			151,564
Other operating		65,066		3,311		2,510			70,887
Rent		8,377		448		1,495			10,320
Depreciation and amortization		9,629		106		813			10,548
Interest		325		-		(40	)		285
Total costs and expenses		215,642		12,075		15,887			243,604
Income (loss) from operations		10,785		1,097		(4,860	)		7,022
Non-operating income		-		-		6,478			6,478
Unrealized losses on marketable equity securities		-		-		(241	)		(241	)
Income before income taxes	$	10,785	$	1,097	$	1,377		$	13,259

	Nine Months Ended September 30, 2021
	Inpatient Services		Homecare and Hospice		All Other			Total
Revenues and grant income:
Net patient revenues	$	644,986	$	63,662	$	-		$	708,648
Other revenues		324		-		33,592			33,916
Government stimulus income		48,304		-		-			48,304
Net operating revenues and grant income		693,614		63,662		33,592			790,868
Costs and expenses:
Salaries, wages, and benefits		388,949		36,483		35,807			461,239
Other operating		204,445		13,730		8,060			226,235
Rent		24,641		1,478		4,318			30,437
Depreciation and amortization		27,790		299		2,432			30,521
Interest		657		-		-			657
Total costs and expenses		646,482		51,990		50,617			749,089
Income (loss) from operations		47,132		11,672		(17,025	)		41,779
Non-operating income		-		-		15,245			15,245
Gain on acquisition of equity method investment		-		-		95,202			95,202
Unrealized losses on marketable equity securities		-		-		(23,227	)		(23,227	)
Income before income taxes	$	47,132	$	11,672	$	70,195		$	128,999

	Nine Months Ended September 30, 2020
	Inpatient Services		Homecare		All Other			Total
Revenues and grant income:
Net patient revenues	$	659,585	$	37,564	$	-		$	697,149
Other revenues		645		-		33,818			34,463
Government stimulus income		34,754		2,026		-			36,780
Net operating revenues and grant income		694,984		39,590		33,818			768,392
Costs and expenses:
Salaries, wages, and benefits		403,840		24,490		27,617			455,947
Other operating		194,170		11,471		7,775			213,416
Rent		25,134		1,351		4,487			30,972
Depreciation and amortization		28,826		266		2,439			31,531
Interest		1,073		-		77			1,150
Total costs and expenses		653,043		37,578		42,395			733,016
Income (loss) from operations		41,941		2,012		(8,577	)		35,376
Non-operating income		-		-		18,870			18,870
Gain on acquisition of equity method investment		-		-		1,708			1,708
Unrealized losses on marketable equity securities		-		-		(40,580	)		(40,580	)
Income (loss) before income taxes	$	41,941	$	2,012	$	(28,579	)	$	15,374