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BUSINESS SEGMENTS | 6 Months Ended
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Jun. 30, 2024
Segment Reporting [Abstract] |
BUSINESS SEGMENTS | BUSINESS SEGMENTS The Company has two reportable segments: (1) skilled services, which includes the operation of skilled nursing facilities and rehabilitation therapy services and (2) Standard Bearer, which is comprised of selected real estate properties owned by Standard Bearer and leased to skilled nursing and senior living operators. As of June 30, 2024, the skilled services segment includes 272 skilled nursing and 29 campus operations that provide both skilled nursing and rehabilitative care services and senior living services. The Company's Standard Bearer segment consists of 115 owned real estate properties. The Company also reports an “All Other” category that includes results from its senior living operations, which includes 11 stand-alone senior living operations and the senior living operations at 29 campus operations that provide both skilled nursing and rehabilitative care services and senior living services. In addition, the "All Other" category includes mobile diagnostics, medical transportation, other real estate and other ancillary operations. Services included in the “All Other” category are insignificant individually, and therefore do not constitute a reportable segment. The Company’s reportable segments are significant operating segments that offer differentiated services. The Company's CODM reviews financial information for each operating segment to evaluate performance and allocate capital resources. This structure reflects its current operational and financial management and provides the best structure to maximize the quality of care and investment strategy provided, while maintaining financial discipline. The Company's CODM does not review assets by segment in his resource allocation and therefore assets by segment are not disclosed below. Intercompany revenue is eliminated in consolidation, along with corresponding intercompany expenses. Segment income and loss is defined as profit or loss from operations before provision for income taxes, excluding gain or loss from sale of real estate, real estate insurance recoveries and impairment of long-lived assets. Included in segment income for Standard Bearer is expense for intercompany services provided by the Service Center as described in Note 6, Standard Bearer, as it is part of the CODM financial information. The following tables set forth financial information for the segments:
|  | Three Months Ended June 30, 2024
|  | Skilled Services |  | Standard Bearer |  | All Other(1) |  | Intercompany Elimination |  | Total
Service revenue(2) |  | $ | 991,285 |  |  | $ | — |  |  | $ | 44,340 |  |  | $ | (5,051) |  |  | $ | 1,030,574 |
Rental revenue(3) |  | — |  |  | 23,354 |  |  | 2,999 |  |  | (20,642) |  |  | 5,711 |
TOTAL REVENUE |  | $ | 991,285 |  |  | $ | 23,354 |  |  | $ | 47,339 |  |  | $ | (25,693) |  |  | $ | 1,036,285 |
Segment income (loss) |  | 122,185 |  |  | 7,360 |  |  | (37,481) |  |  | — |  |  | 92,064 |
Income before provision for income taxes |  |  |  |  |  |  |  |  |  | $ | 92,064 |
Depreciation and amortization |  | 10,911 |  |  | 7,166 |  |  | 2,411 |  |  | — |  |  | 20,488 |
Interest expense(4) |  | $ | — |  |  | $ | 6,699 |  |  | $ | 339 |  |  | $ | (4,998) |  |  | $ | 2,040 |
(1) All Other primarily includes all ancillary operations, stand-alone senior living operations and the Service Center. (2) Intercompany service revenue represents service revenue generated by ancillary operations provided to the Company's independent subsidiaries and management service revenue generated by the Service Center with Standard Bearer. Intercompany service revenue is eliminated in consolidation along with corresponding intercompany cost of service. (3) All Other rental revenue includes rental revenue associated with the Company's subleases to third parties of $1,089 for the three months ended June 30, 2024. Intercompany rental revenue represents rental income generated by both Standard Bearer and other real estate properties with the Company's independent subsidiaries. Intercompany rental revenue is eliminated in consolidation along with corresponding intercompany rent expense. (4) Included in interest expense in Standard Bearer is interest expense incurred from intercompany debt arrangements between Standard Bearer and The Ensign Group, Inc. Intercompany interest expense is eliminated in the "Intercompany Elimination" column.
|  | Three Months Ended June 30, 2023
|  | Skilled Services |  | Standard Bearer |  | All Other (1) |  | Intercompany Elimination |  | Total
Service revenue(2) |  | $ | 884,200 |  |  | $ | — |  |  | $ | 35,535 |  |  | $ | (3,634) |  |  | $ | 916,101 |
Rental revenue(3) |  | — |  |  | 19,914 |  |  | 2,819 |  |  | (17,489) |  |  | 5,244 |
TOTAL REVENUE |  | $ | 884,200 |  |  | $ | 19,914 |  |  | $ | 38,354 |  |  | $ | (21,123) |  |  | $ | 921,345 |
Segment income (loss) |  | 117,008 |  |  | 7,133 |  |  | (42,988) |  |  | — |  |  | 81,153 |
Loss on insurance recoveries from real estate |  |  |  |  |  |  |  |  |  | $ | (100) |
Income before provision for income taxes |  |  |  |  |  |  |  |  |  | $ | 81,053 |
Depreciation and amortization |  | 9,417 |  |  | 6,133 |  |  | 2,046 |  |  | — |  |  | 17,596 |
Interest expense(4) |  | $ | — |  |  | $ | 4,575 |  |  | $ | 304 |  |  | $ | (2,856) |  |  | $ | 2,023 |
(1) All Other primarily includes all ancillary operations, stand-alone senior living operations and the Service Center. (2) Intercompany service revenue represents service revenue generated by ancillary operations provided to the Company's affiliated wholly owned healthcare facilities and management service revenue generated by the Service Center with Standard Bearer. Intercompany service revenue is eliminated in consolidation along with corresponding intercompany cost of service. (3) All Other rental revenue includes rental revenue associated with the Company's subleases to third parties of $1,063 for the three months ended June 30, 2023. Intercompany rental revenue represents rental income generated by both Standard Bearer and other real estate properties with the Company's independent subsidiaries. Intercompany rental revenue is eliminated in consolidation along with corresponding intercompany rent expense. (4) Included in interest expense in Standard Bearer is interest expense incurred from intercompany debt arrangements between Standard Bearer and The Ensign Group, Inc. Intercompany interest expense is eliminated in the "Intercompany Elimination" column.
|  | Six Months Ended June 30, 2024
|  | Skilled Services |  | Standard Bearer |  | All Other (1) |  | Intercompany Elimination |  | Total
Service revenue(2) |  | $ | 1,960,887 |  |  | $ | — |  |  | $ | 83,966 |  |  | $ | (9,794) |  |  | $ | 2,035,059 |
Rental revenue(3) |  | — |  |  | 45,555 |  |  | 5,945 |  |  | (40,102) |  |  | 11,398 |
TOTAL REVENUE |  | $ | 1,960,887 |  |  | $ | 45,555 |  |  | $ | 89,911 |  |  | $ | (49,896) |  |  | $ | 2,046,457 |
Segment income (loss) |  | 248,994 |  |  | 14,618 |  |  | (80,101) |  |  | — |  |  | 183,511 |
Impairment of long-lived assets |  |  |  |  |  |  |  |  |  | (1,849) |
Income before provision for income taxes |  |  |  |  |  |  |  |  |  | $ | 181,662 |
Depreciation and amortization |  | 21,447 |  |  | 13,995 |  |  | 4,703 |  |  | — |  |  | 40,145 |
Interest expense(4) |  | $ | — |  |  | $ | 12,676 |  |  | $ | 611 |  |  | $ | (9,283) |  |  | $ | 4,004 |
(1) All Other primarily includes all ancillary operations, stand-alone senior living operations and the Service Center. (2) Intercompany service revenue represents service revenue generated by ancillary operations provided to the Company's independent subsidiaries and management service revenue generated by the Service Center with Standard Bearer. Intercompany service revenue is eliminated in consolidation along with corresponding intercompany cost of service. (3) All Other rental revenue includes rental revenue associated with the Company's subleases to third parties of $2,169 for the six months ended June 30, 2024. Intercompany rental revenue represents rental income generated by both Standard Bearer and other real estate properties with the Company's independent subsidiaries. Intercompany rental revenue is eliminated in consolidation along with corresponding intercompany rent expense. (4) Included in interest expense in Standard Bearer is interest expense incurred from intercompany debt arrangements between Standard Bearer and The Ensign Group, Inc. Intercompany interest expense is eliminated in the "Intercompany Elimination" column.
|  | Six Months Ended June 30, 2023
|  | Skilled Services |  | Standard Bearer |  | All Other (1) |  | Intercompany Elimination |  | Total
Service revenue(2) |  | $ | 1,735,123 |  |  | $ | — |  |  | $ | 70,068 |  |  | $ | (7,172) |  |  | $ | 1,798,019 |
Rental revenue(3) |  | — |  |  | 39,631 |  |  | 5,382 |  |  | (34,846) |  |  | 10,167 |
TOTAL REVENUE |  | $ | 1,735,123 |  |  | $ | 39,631 |  |  | $ | 75,450 |  |  | $ | (42,018) |  |  | $ | 1,808,186 |
Segment income (loss) |  | 230,353 |  |  | 14,352 |  |  | (85,170) |  |  | — |  |  | 159,535 |
Loss on insurance recoveries from real estate |  |  |  |  |  |  |  |  |  | (100) |
Income before provision for income taxes |  |  |  |  |  |  |  |  |  | $ | 159,435 |
Depreciation and amortization |  | 18,481 |  |  | 12,099 |  |  | 4,128 |  |  | — |  |  | 34,708 |
Interest expense(4) |  | $ | — |  |  | $ | 9,144 |  |  | $ | 615 |  |  | $ | (5,700) |  |  | $ | 4,059 |
(1) All Other primarily includes all ancillary operations, stand-alone senior living operations and the Service Center. (2) Intercompany service revenue represents service revenue generated by ancillary operations provided to the Company's affiliated wholly owned healthcare facilities and management service revenue generated by the Service Center with Standard Bearer. Intercompany service revenue is eliminated in consolidation along with corresponding intercompany cost of service. (3) All Other rental revenue includes rental revenue associated with the Company's subleases to third parties of $1,771 for the six months ended June 30, 2023. Intercompany rental revenue represents rental income generated by both Standard Bearer and other real estate properties with the Company's independent subsidiaries. Intercompany rental revenue is eliminated in consolidation along with corresponding intercompany rent expense. (4) Included in interest expense in Standard Bearer is interest expense incurred from intercompany debt arrangements between Standard Bearer and The Ensign Group, Inc. Intercompany interest expense is eliminated in the "Intercompany Elimination" column. Service revenue by major payor source were as follows:
|  | Three Months Ended June 30, 2024
|  | Skilled Services |  |  |  |  |  | All Other (3) |  | Total Service Revenue |  | Revenue %
Medicaid(1) |  | $ | 403,127 |  |  |  |  |  |  | $ | 8,633 |  |  | $ | 411,760 |  |  | 40.0 | %
Medicare |  | 258,869 |  |  |  |  |  |  | — |  |  | 258,869 |  |  | 25.1 |
Medicaid-skilled |  | 62,969 |  |  |  |  |  |  | — |  |  | 62,969 |  |  | 6.1 |
Subtotal |  | 724,965 |  |  |  |  |  |  | 8,633 |  |  | 733,598 |  |  | 71.2 |
Managed care |  | 191,022 |  |  |  |  |  |  | — |  |  | 191,022 |  |  | 18.5 |
Private and other(2) |  | 75,298 |  |  |  |  |  |  | 30,656 |  |  | 105,954 |  |  | 10.3 |
TOTAL SERVICE REVENUE |  | $ | 991,285 |  |  |  |  |  |  | $ | 39,289 |  |  | $ | 1,030,574 |  |  | 100.0 | %
(1) Medicaid payor includes revenue generated from senior living operations. (2) Private and other also includes revenue from senior living operations and all revenue generated in other ancillary services. (3) All Other incorporates intercompany eliminations.
|  | Three Months Ended June 30, 2023
|  | Skilled Services |  |  |  |  |  | All Other (3) |  | Total Service Revenue |  | Revenue %
Medicaid(1) |  | $ | 352,380 |  |  |  |  |  |  | $ | 7,401 |  |  | $ | 359,781 |  |  | 39.3 | %
Medicare |  | 248,081 |  |  |  |  |  |  | — |  |  | 248,081 |  |  | 27.1 |
Medicaid-skilled |  | 62,015 |  |  |  |  |  |  | — |  |  | 62,015 |  |  | 6.7 |
Subtotal |  | 662,476 |  |  |  |  |  |  | 7,401 |  |  | 669,877 |  |  | 73.1 |
Managed care |  | 161,101 |  |  |  |  |  |  | — |  |  | 161,101 |  |  | 17.6 |
Private and other(2) |  | 60,623 |  |  |  |  |  |  | 24,500 |  |  | 85,123 |  |  | 9.3 |
TOTAL SERVICE REVENUE |  | $ | 884,200 |  |  |  |  |  |  | $ | 31,901 |  |  | $ | 916,101 |  |  | 100.0 | %
(1) Medicaid payor includes revenue generated from senior living operations and revenue related to state relief funding. (2) Private and other also includes revenue from senior living operations and all revenue generated in other ancillary services. (3) All Other incorporates intercompany eliminations.
|  | Six Months Ended June 30, 2024
|  | Skilled Services |  |  |  |  |  | All Other (3) |  |  |  | Total Service Revenue |  | Revenue %
Medicaid(1) |  | $ | 785,245 |  |  |  |  |  |  | $ | 16,678 |  |  |  |  | $ | 801,923 |  |  | 39.4 | %
Medicare |  | 524,452 |  |  |  |  |  |  | — |  |  |  |  | 524,452 |  |  | 25.8 |
Medicaid-skilled |  | 126,278 |  |  |  |  |  |  | — |  |  |  |  | 126,278 |  |  | 6.2 |
Subtotal |  | 1,435,975 |  |  |  |  |  |  | 16,678 |  |  |  |  | 1,452,653 |  |  | 71.4 |
Managed care |  | 379,126 |  |  |  |  |  |  | — |  |  |  |  | 379,126 |  |  | 18.6 |
Private and other(2) |  | 145,786 |  |  |  |  |  |  | 57,494 |  |  |  |  | 203,280 |  |  | 10.0 |
TOTAL SERVICE REVENUE |  | $ | 1,960,887 |  |  |  |  |  |  | $ | 74,172 |  |  |  |  | $ | 2,035,059 |  |  | 100.0 | %
(1) Medicaid payor includes revenue generated from senior living operations. (2) Private and other payors also includes revenue from senior living operations and all revenue generated in other ancillary services. (3) All Other incorporates intercompany eliminations.
|  | Six Months Ended June 30, 2023
|  | Skilled Services |  |  |  |  |  | All Other (3) |  |  |  | Total Service Revenue |  | Revenue %
Medicaid(1) |  | $ | 685,825 |  |  |  |  |  |  | $ | 14,220 |  |  |  |  | $ | 700,045 |  |  | 38.9 | %
Medicare |  | 495,804 |  |  |  |  |  |  | — |  |  |  |  | 495,804 |  |  | 27.6 |
Medicaid-skilled |  | 119,942 |  |  |  |  |  |  | — |  |  |  |  | 119,942 |  |  | 6.7 |
Subtotal |  | 1,301,571 |  |  |  |  |  |  | 14,220 |  |  |  |  | 1,315,791 |  |  | 73.2 |
Managed care |  | 317,764 |  |  |  |  |  |  | — |  |  |  |  | 317,764 |  |  | 17.7 |
Private and other(2) |  | 115,788 |  |  |  |  |  |  | 48,676 |  |  |  |  | 164,464 |  |  | 9.1 |
TOTAL SERVICE REVENUE |  | $ | 1,735,123 |  |  |  |  |  |  | $ | 62,896 |  |  |  |  | $ | 1,798,019 |  |  | 100.0 | %
(1) Medicaid payor includes revenue generated from senior living operations and revenue related to state relief funding. (2) Private and other payors also includes revenue from senior living operations and all revenue generated in other ancillary services. (3) All Other incorporates intercompany eliminations.

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