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Segment Information
 3 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]  
Segment Information
Segment Information
The Company’s reportable segments include the critical illness recovery hospital segment, rehabilitation hospital segment, outpatient rehabilitation segment, and Concentra segment. Other activities include the Company’s corporate shared services, certain investments, and employee leasing services with non-consolidating subsidiaries.
The Company evaluates performance of the segments based on Adjusted EBITDA. Adjusted EBITDA is defined as earnings excluding interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, gain (loss) on sale of businesses, and equity in earnings (losses) of unconsolidated subsidiaries. The Company has provided additional information regarding its reportable segments, such as total assets, which contributes to the understanding of the Company and provides useful information to the users of the consolidated financial statements.
The following tables summarize selected financial data for the Company’s reportable segments. Prior year results presented herein have been changed to conform to the current presentation.
 
 
Three Months Ended March 31,
 
 
2019
 
2020
 
(in thousands)
Net operating revenues:(1)
 
 

 
 

Critical illness recovery hospital
 
$
457,534

 
$
500,521

Rehabilitation hospital
 
154,558

 
182,019

Outpatient rehabilitation
 
246,905

 
255,249

Concentra
 
396,321

 
398,535

Other
 
69,313

 
78,308

Total Company
 
$
1,324,631

 
$
1,414,632

Adjusted EBITDA:
 
 

 
 

Critical illness recovery hospital
 
$
72,998

 
$
88,570

Rehabilitation hospital
 
25,797

 
38,569

Outpatient rehabilitation
 
28,991

 
27,122

Concentra
 
66,258

 
61,466

Other
 
(23,927
)
 
(28,394
)
Total Company
 
$
170,117

 
$
187,333

Total assets:
 
 

 
 

Critical illness recovery hospital
 
$
2,062,659

 
$
2,148,779

Rehabilitation hospital
 
1,089,391

 
1,127,267

Outpatient rehabilitation
 
1,250,015

 
1,285,449

Concentra
 
2,464,317

 
2,354,169

Other
 
155,110

 
199,903

Total Company
 
$
7,021,492

 
$
7,115,567

Purchases of property and equipment:
 
 

 
 

Critical illness recovery hospital
 
$
10,160

 
$
8,965

Rehabilitation hospital
 
13,183

 
3,325

Outpatient rehabilitation
 
9,040

 
8,384

Concentra
 
15,698

 
15,586

Other
 
992

 
2,948

Total Company
 
$
49,073

 
$
39,208


_______________________________________________________________________________
(1)
Prior to the quarter ended June 30, 2019, the financial results of employee leasing services provided to non-consolidating subsidiaries were included with the Company’s reportable segments. These results are now reported as part of the Company’s other activities. Net operating revenues have been conformed to the current presentation for the three months ended March 31, 2019.




A reconciliation of Adjusted EBITDA to income before income taxes is as follows:
 
Three Months Ended March 31, 2019
 
Critical Illness Recovery Hospital
 
Rehabilitation Hospital
 
Outpatient
Rehabilitation
 
Concentra
 
Other
 
Total
 
(in thousands)
Adjusted EBITDA
$
72,998

 
$
25,797

 
$
28,991

 
$
66,258

 
$
(23,927
)
 
 

Depreciation and amortization
(11,451
)
 
(6,402
)
 
(7,032
)
 
(24,904
)
 
(2,349
)
 
 

Stock compensation expense
—

 
—

 
—

 
(767
)
 
(5,488
)
 
 

Income (loss) from operations
$
61,547

 
$
19,395

 
$
21,959

 
$
40,587

 
$
(31,764
)
 
$
111,724

Equity in earnings of unconsolidated subsidiaries
 

 
 
 
 

 
 

 
 

 
4,366

Gain on sale of businesses
 
 
 
 
 
 
 
 
 
 
6,532

Interest expense
 

 
 
 
 

 
 

 
 

 
(50,811
)
Income before income taxes
 

 
 
 
 

 
 

 
 

 
$
71,811

 
Three Months Ended March 31, 2020
 
Critical Illness Recovery Hospital
 
Rehabilitation Hospital
 
Outpatient
Rehabilitation
 
Concentra
 
Other
 
Total
 
(in thousands)
Adjusted EBITDA
$
88,570

 
$
38,569

 
$
27,122

 
$
61,466

 
$
(28,394
)
 
 

Depreciation and amortization
(12,336
)
 
(6,887
)
 
(7,218
)
 
(22,887
)
 
(2,424
)
 
 

Stock compensation expense
—

 
—

 
—

 
(767
)
 
(6,136
)
 
 

Income (loss) from operations
$
76,234

 
$
31,682

 
$
19,904

 
$
37,812

 
$
(36,954
)
 
$
128,678

Equity in earnings of unconsolidated subsidiaries
 

 
 
 
 

 
 

 
 

 
2,588

Gain on sale of businesses
 

 
 
 
 

 
 

 
 

 
7,201

Interest expense
 

 
 
 
 

 
 

 
 

 
(46,107
)
Income before income taxes
 

 
 
 
 

 
 

 
 

 
$
92,360