Segment Information

12 Months Ended

Dec. 31, 2019

17. Segment Information

The Company operates in one line of business, which is operating acute inpatient psychiatric facilities, specialty treatment facilities, residential treatment centers and facilities providing outpatient behavioral healthcare services. As management reviews the operating results of its U.S. Facilities and its U.K. Facilities separately to assess performance and make decisions, the Company’s operating segments include its U.S. Facilities and U.K. Facilities. At December 31, 2019, the U.S. Facilities included 224 behavioral healthcare facilities with approximately 9,500 beds in 40 states and Puerto Rico, and the U.K. Facilities included 361 behavioral healthcare facilities with approximately 8,700 beds in the U.K.

The following tables set forth the financial information by operating segment, including a reconciliation of Segment EBITDA to income before income taxes (in thousands):

	Year Ended December 31,
	2019			2018			2017
Revenue:
U.S. Facilities	$	2,008,381		$	1,904,695		$	1,809,844
U.K. Facilities		1,099,081			1,107,747			1,026,472
Corporate and Other		—			—			—
	$	3,107,462		$	3,012,442		$	2,836,316
Segment EBITDA (1) :
U.S. Facilities	$	503,358		$	488,207		$	475,260
U.K. Facilities		166,693			185,755			198,566
Corporate and Other		(84,168	)		(80,386	)		(69,467	)
	$	585,883		$	593,576		$	604,359

	Year Ended December 31,
	2019			2018			2017
Segment EBITDA(1)	$	585,883		$	593,576		$	604,359
Plus (less):
Equity-based compensation expense		(17,307	)		(22,001	)		(23,467	)
Debt extinguishment costs		—			(1,815	)		(810	)
Legal settlements expense		—			(22,076	)		—
Loss on impairment		(54,386	)		(337,889	)		—
Transaction-related expenses		(27,064	)		(34,507	)		(24,267	)
Interest expense, net		(187,094	)		(185,410	)		(176,007	)
Depreciation and amortization		(164,044	)		(158,832	)		(143,010	)
Income (loss) before income taxes	$	135,988		$	(168,954	)	$	236,798

	U.S. Facilities		U.K. Facilities			Corporate and Other		Consolidated
Goodwill:
Balance at January 1, 2018
Goodwill	$	2,042,592	$	708,582		$	—	$	2,751,174
Accumulated impairment loss		—		—			—		—
Net goodwill at January 1, 2018		2,042,592		708,582			—		2,751,174
Loss on impairment		—		(325,875	)		—		(325,875	)
Increase from contribution of redeemable noncontrolling interests		2,245		—			—		2,245
Foreign currency translation loss		—		(31,894	)		—		(31,894	)
Prior year purchase price adjustments		—		762			—		762
Balance at December 31, 2018
Goodwill		2,044,837		677,450			—		2,722,287
Accumulated impairment loss		—		(325,875	)		—		(325,875	)
Net goodwill at December 31, 2018		2,044,837		351,575			—		2,396,412
Increase from contribution of redeemable noncontrolling interests		3,300		—			—		3,300
Increase from 2019 acquisitions		36,967		—			—		36,967
Foreign currency translation gain		—		12,452			—		12,452
Balance at December 31, 2019
Goodwill		2,085,104		689,902			—		2,775,006
Accumulated impairment loss		—		(325,875	)		—		(325,875	)
Net goodwill at December 31, 2019	$	2,085,104	$	364,027		$	—	$	2,449,131

	December 31,
	2019		2018
Assets (2) :
U.S. Facilities	$	4,037,968	$	3,779,040
U.K. Facilities		2,610,357		2,175,809
Corporate and Other		230,817		217,655
	$	6,879,142	$	6,172,504

(1)

Segment EBITDA is defined as income before provision for income taxes, equity-based compensation expense, debt extinguishment costs, legal settlements expense, loss on impairment, transaction-related expenses, interest expense and depreciation and amortization. The Company uses Segment EBITDA as an analytical indicator to measure the performance of the Company’s segments and to develop strategic objectives and operating plans for those segments. Segment EBITDA is commonly used as an analytical indicator within the health care industry, and also serves as a measure of leverage capacity and debt service ability. Segment EBITDA should not be considered as a measure of financial performance under GAAP, and the items excluded from Segment EBITDA are significant components in understanding and assessing financial performance. Because Segment EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, Segment EBITDA, as presented, may not be comparable to other similarly titled measures of other companies.

(2)

Assets include property and equipment for the U.S. Facilities of $1.4 billion, U.K. Facilities of $1.7 billion and corporate and other of $50.9 million at December 31, 2019. Assets include property and equipment for the U.S. Facilities of $1.4 billion, U.K. Facilities of $1.7 billion and corporate and other of $44.9 million at December 31, 2018.