Segment Information

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company’s reportable segments consist of 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 the performance of its 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.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2023		2022		2023
	(in thousands)
Revenue:
Critical illness recovery hospital	$	545,908	$	575,091	$	1,147,663	$	1,169,017
Rehabilitation hospital	228,887		240,856		449,521		472,318
Outpatient rehabilitation	287,258		302,972		559,198		598,875
Concentra	441,357		467,079		864,780		923,377
Other	81,331		88,530		163,126		175,921
Total Company	$	1,584,741	$	1,674,528	$	3,184,288	$	3,339,508
Adjusted EBITDA:
Critical illness recovery hospital	$	20,019	$	65,496	$	55,986	$	142,269
Rehabilitation hospital	49,845		54,689		92,224		101,905
Outpatient rehabilitation	33,601		32,850		60,197		63,049
Concentra	92,607		100,391		182,076		194,139
Other(1)	(15,078)		(33,957)		(45,642)		(67,830)
Total Company	$	180,994	$	219,469	$	344,841	$	433,532
Total assets:
Critical illness recovery hospital	$	2,387,516	$	2,492,370	$	2,387,516	$	2,492,370
Rehabilitation hospital	1,194,739		1,209,737		1,194,739		1,209,737
Outpatient rehabilitation	1,360,600		1,399,782		1,360,600		1,399,782
Concentra	2,301,296		2,314,328		2,301,296		2,314,328
Other	307,507		285,652		307,507		285,652
Total Company	$	7,551,658	$	7,701,869	$	7,551,658	$	7,701,869
Purchases of property, equipment, and other assets:
Critical illness recovery hospital	$	19,528	$	31,363	$	39,097	$	55,021
Rehabilitation hospital	4,821		1,903		11,095		10,485
Outpatient rehabilitation	9,314		10,476		18,728		20,408
Concentra	8,716		15,846		18,956		30,246
Other	3,953		(74)		5,301		2,239
Total Company	$	46,332	$	59,514	$	93,177	$	118,399

_______________________________________________________________________________

(1)    For the three and six months ended June 30, 2022, Adjusted EBITDA included other operating income of $15.1 million. The other operating income is related to the recognition of payments received under the Provider Relief Fund for health care related expenses and loss of revenue attributable to COVID-19.

A reconciliation of Adjusted EBITDA to income before income taxes is as follows:

	Three Months Ended June 30, 2022
	Critical Illness Recovery Hospital		Rehabilitation Hospital		Outpatient Rehabilitation		Concentra		Other		Total
	(in thousands)
Adjusted EBITDA	$	20,019	$	49,845	$	33,601	$	92,607	$	(15,078)
Depreciation and amortization	(14,603)		(7,175)		(8,130)		(18,730)		(2,443)
Stock compensation expense	—		—		—		(536)		(8,410)
Income (loss) from operations	$	5,416	$	42,670	$	25,471	$	73,341	$	(25,931)	$	120,967
Equity in earnings of unconsolidated subsidiaries											6,167
Interest expense											(41,052)
Income before income taxes											$	86,082

	Three Months Ended June 30, 2023
	Critical Illness Recovery Hospital		Rehabilitation Hospital		Outpatient Rehabilitation		Concentra		Other		Total
	(in thousands)
Adjusted EBITDA	$	65,496	$	54,689	$	32,850	$	100,391	$	(33,957)
Depreciation and amortization	(13,886)		(6,887)		(8,779)		(18,283)		(2,104)
Stock compensation expense	—		—		—		—		(10,326)
Income (loss) from operations	$	51,610	$	47,802	$	24,071	$	82,108	$	(46,387)	$	159,204
Equity in earnings of unconsolidated subsidiaries											10,501
Interest expense											(48,997)
Income before income taxes											$	120,708

	Six Months Ended June 30, 2022
	Critical Illness Recovery Hospital		Rehabilitation Hospital		Outpatient Rehabilitation		Concentra		Other		Total
	(in thousands)
Adjusted EBITDA	$	55,986	$	92,224	$	60,197	$	182,076	$	(45,642)
Depreciation and amortization	(29,221)		(13,977)		(16,159)		(37,542)		(5,221)
Stock compensation expense	—		—		—		(1,071)		(16,698)
Income (loss) from operations	$	26,765	$	78,247	$	44,038	$	143,463	$	(67,561)	$	224,952
Equity in earnings of unconsolidated subsidiaries											11,564
Interest expense											(76,566)
Income before income taxes											$	159,950

	Six Months Ended June 30, 2023
	Critical Illness Recovery Hospital		Rehabilitation Hospital		Outpatient Rehabilitation		Concentra		Other		Total
	(in thousands)
Adjusted EBITDA	$	142,269	$	101,905	$	63,049	$	194,139	$	(67,830)
Depreciation and amortization	(30,523)		(13,775)		(17,236)		(36,593)		(4,237)
Stock compensation expense	—		—		—		(178)		(20,329)
Income (loss) from operations	$	111,746	$	88,130	$	45,813	$	157,368	$	(92,396)	$	310,661
Equity in earnings of unconsolidated subsidiaries											19,057
Interest expense											(97,568)
Income before income taxes											$	232,150