Discontinued Operations

9 Months Ended

Mar. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 3. – Discontinued Operations

All of the businesses discussed in the note below are reported as discontinued operations and the condensed consolidated financial statements for all prior periods have been adjusted to reflect this presentation.

Results for all of the businesses included in discontinued operations are presented in the following table:

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2017			2016			2017			2016
Net Revenues:
Chestatee Hospital	$	—		$	3,771		$	2,369		$	11,357
Other Sold Hospitals		(68	)		17			(288	)		148
	$	(68	)	$	3,788		$	2,081		$	11,505
Earnings (Loss) before income taxes:
Chestatee Hospital	$	(104	)	$	(322	)	$	83		$	(1,432	)
Other Sold Hospitals		(69	)		(85	)		(304	)		(219	)
Life sciences and engineering		(37	)		(36	)		(112	)		(107	)
Gain on sale of Chestatee Hospital		0			0			7,270			0
Earnings (Loss) before income taxes		(210	)		(443	)		6,937			(1,758	)
Income tax expense (benefit)		(75	)		0			2,650			0
Earnings (Loss) from discontinued operations	$	(135	)	$	(443	)	$	4,287		$	(1,758	)

Chestatee Hospital—On August 19, 2016, Southern Health Corporation of Dahlonega, Inc., (“Chestatee”), a wholly owned subsidiary of the Company, sold substantially all of the assets and certain liabilities of Chestatee Regional Hospital in Dahlonega, Georgia through an asset purchase agreement for $15,000 subject to adjustment for the book value of certain assets and certain liabilities assumed at the sale date. The pre-tax gain on sale of $7,270 is subject to adjustment for various purchase price adjustments. Chestatee retained certain liabilities, including for employee related liabilities and certain Medicare and Medicaid liabilities, relating to the period it owned and operated the hospital. A portion of the net proceeds were used for the repayment of debt. The assets sold and liabilities assumed are shown as assets held for sale in our consolidated balances as of June 30, 2016.

Other Sold Hospitals – Subsidiaries of the Company have sold substantially all of the assets of three hospitals (“Other Sold Hospitals”) during the period July 2, 2012 to December 31, 2014. The loss before income taxes of the Other Sold Hospitals results primarily from negative prior year Medicare and Medicaid cost report settlements.

Life Sciences and Engineering Segment – SunLink retained a defined benefit retirement plan which covered substantially all of the employees of this segment when the segment was sold in fiscal 1998. Effective February 28, 1997, the plan was amended to freeze participant benefits and close the plan to new participants. Pension expense and related tax benefit or expense is reflected in the results of operations for this segment for the three and nine months ended March 31, 2017 and 2016.

The components of pension expense for the three and nine months ended March 31, 2017 and 2016, respectively, were as follows:

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2017			2016			2017			2016
Interest Cost	$	13		$	16		$	39		$	48
Expected return on assets		(8	)		(8	)		(24	)		(24	)
Amortization of prior service cost		32			28			97			83
Net pension expense	$	37		$	36		$	112		$	107

SunLink contributed $105 to the plan in the nine months ended March 31, 2017 and expects to contribute an additional $35 during the last quarter of the fiscal year ending June 30, 2017.