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Segment Information
 9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Segment Information

19.

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 our U.S. Facilities and U.K. Facilities. At September 30, 2020, the U.S. Facilities segment included 229 behavioral healthcare facilities with approximately 9,800 beds in 40 states and Puerto Rico, and the U.K. Facilities segment included 353 behavioral healthcare facilities with approximately 8,500 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):

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   U.S. Facilities

 

$

547,961

 

 

$

509,383

 

 

$

1,548,653

 

 

$

1,507,156

 

   U.K. Facilities

 

 

285,343

 

 

 

267,868

 

 

 

817,772

 

 

 

820,074

 

   Corporate and Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

$

833,304

 

 

$

777,251

 

 

$

2,366,425

 

 

$

2,327,230

 

Segment EBITDA (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   U.S. Facilities

 

$

138,401

 

 

$

127,087

 

 

$

393,356

 

 

$

381,491

 

   U.K. Facilities

 

 

43,388

 

 

 

40,726

 

 

 

111,195

 

 

 

126,617

 

   Corporate and Other

 

 

(22,384

)

 

 

(21,175

)

 

 

(67,876

)

 

 

(66,581

)

 

 

$

159,405

 

 

$

146,638

 

 

$

436,675

 

 

$

441,527

 

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Segment EBITDA (1)

 

$

159,405

 

 

$

146,638

 

 

$

436,675

 

 

$

441,527

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity-based compensation expense

 

 

(5,471

)

 

 

(4,039

)

 

 

(16,258

)

 

 

(14,322

)

Transaction-related expenses

 

 

(8,503

)

 

 

(5,775

)

 

 

(17,293

)

 

 

(15,308

)

Loss on impairment

 

 

(20,239

)

 

 

—

 

 

 

(20,239

)

 

 

—

 

Debt extinguishment costs

 

 

—

 

 

 

—

 

 

 

(3,271

)

 

 

—

 

Interest expense, net

 

 

(37,553

)

 

 

(46,644

)

 

 

(119,064

)

 

 

(143,384

)

Depreciation and amortization

 

 

(42,912

)

 

 

(40,620

)

 

 

(126,037

)

 

 

(122,277

)

Income before income taxes

 

$

44,727

 

 

$

49,560

 

 

$

134,513

 

 

$

146,236

 

 

 

 

U.S. Facilities

 

 

U.K. Facilities

 

 

Corporate

and Other

 

 

Consolidated

 

Goodwill:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

$

2,085,104

 

 

$

689,902

 

 

$

—

 

 

$

2,775,006

 

Accumulated impairment loss

 

 

—

 

 

 

(325,875

)

 

 

—

 

 

 

(325,875

)

Net goodwill at January 1, 2020

 

 

2,085,104

 

 

 

364,027

 

 

 

—

 

 

 

2,449,131

 

Increase from contribution of redeemable

      noncontrolling interests

 

 

20,300

 

 

 

—

 

 

 

—

 

 

 

20,300

 

Prior period purchase price adjustments

 

 

(40

)

 

 

—

 

 

 

—

 

 

 

(40

)

Foreign currency translation loss

 

 

—

 

 

 

(8,669

)

 

 

—

 

 

 

(8,669

)

Balance at September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

2,105,364

 

 

 

681,233

 

 

 

—

 

 

 

2,786,597

 

Accumulated impairment loss

 

 

—

 

 

 

(325,875

)

 

 

—

 

 

 

(325,875

)

Net goodwill at September 30, 2020

 

$

2,105,364

 

 

$

355,358

 

 

$

—

 

 

$

2,460,722

 

 

 

 

September 30,

2020

 

 

December 31,

2019

 

Assets (2):

 

 

 

 

 

 

 

 

U.S. Facilities

 

$

4,166,001

 

 

$

4,037,968

 

U.K. Facilities

 

 

2,521,294

 

 

 

2,610,357

 

Corporate and Other

 

 

417,850

 

 

 

230,817

 

 

 

$

7,105,145

 

 

$

6,879,142

 

 

(1)

Segment EBITDA is defined as income before provision for income taxes, equity-based compensation expense, loss on impairment, debt extinguishment costs, 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 $1.5 billion, U.K. Facilities of $1.7 billion and corporate and other of $51.3 million at September 30, 2020. 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.