XML 22 R12.htm IDEA: XBRL DOCUMENT
v3.19.2

Assets Held for Sale and Discontinued Operations | 6 Months Ended
--- | ---
Jun. 30, 2019
Discontinued Operations and Disposal Groups [Abstract] |
Disposal Groups, Including Discontinued Operations, Disclosure |
6. | Assets Held for Sale and Discontinued Operations:
On November 1, 2018, the Company announced the initiation of a process to potentially divest of its management services service line to allow the Company to focus on its core physician services business. The Company determined that the criterion to classify the management services service line as assets held for sale within the Company’s Consolidated Balance Sheets were met at March 31, 2019 and continue to be met at June 30, 2019. Accordingly, the assets and liabilities of that service line were classified as current assets and liabilities held for sale at June 30, 2019 as the Company expects to divest of the management services organization within twelve months of March 31, 2019, although there is no assurance that any such divestiture will occur. In addition, in accordance with accounting guidance for discontinued operations, the expected divestiture of the management services service line was deemed to represent a fundamental strategic shift that will have a major effect on the Company’s operations, and accordingly, the operating results of the service line were reported as discontinued operations in the Company’s Consolidated Statements of Income for the three and six months ended June 30, 2019 with prior periods recast to conform with the current period presentation. The classification to assets held for sale impacted the net book value of the assets and liabilities expected to be transferred upon sale. The estimated fair value of the management services service line was initially determined at March 31, 2019 based on an estimated market value along with estimated broker, accounting, legal and other costs to sell. The Company deemed the carrying amount of other assets within the service line, specifically accounts receivable and property and equipment, to represent fair value and therefore recorded a non-cash charge during the first quarter of 2019 of $285.0 million against goodwill, which represented the difference between the estimated fair value of the management services service line and the carrying amount of the net assets held for sale. Recognition of the charge against goodwill resulted in a tax benefit which generated an additional $36.6 million deferred tax asset that increased the fair value of the service line. An incremental non-cash charge is then required to reduce the service line to its previously determined fair value. Accordingly, the Company recorded the incremental non-cash charge of $ 36.6 million for a total non-cash charge of $321.6 million during the three months ended March 31, 2019, reducing the goodwill balance of the management services service line to zero. During the three months ended June 30, 2019, an incremental non-cash charge of $ 50.0 million was recorded based on new information obtained during the quarter with respect to the estimated market value of the management services service line. This non-cash charge was recorded against amortizing intangible assets. Recognition of the incremental non-cash charge resulted in a tax benefit which generated an additional $16.4 million deferred tax asset that increased the fair value of the service line. An incremental non-cash charge is then required to reduce the service line to its previously determined fair value. Accordingly, the Company recorded the incremental non-cash charge of $ 16.4 million for a total non-cash charge of $66.4 million during the three months ended June 30, 2019. Upon completion of a divestiture, the Company could record an additional gain or loss on disposal at the time final net proceeds are determined. In addition, if a change in any facts and circumstances supporting the fair value of the management services service line occur prior to a divestiture, an additional gain or loss would be recorded at that time. The following table is a reconciliation of the major classes of assets and liabilities classified as assets and liabilities held for sale in the accompanying Consolidated Balance Sheets representing the management services service line as of June 30, 2019 and December 31, 2018 (in thousands):
|  | June 30, 2019 |  |  | December 31, 2018 |
Assets |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 11,614 |  |  | $ | 11,254 |
Accounts receivable, net |  |  | 39,787 |  |  |  | 38,118 |
Prepaid expenses and other assets |  |  | 2,310 |  |  |  | 2,505 |
Property and equipment, net |  |  | 47,573 |  |  |  | 42,603 |
Deferred income taxes |  |  | 15,569 |  |  |  |  |
Operating lease right-of-use asset |  |  | 4,883 |  |  |  | — |
Goodwill |  |  | — |  |  |  | 321,556 |
Intangible assets, net |  |  | 204,023 |  |  |  | 275,148 |
|  | $ | 325,759 |  |  | $ | 691,184 |
Liabilities |  |  |  |  |  |  |  |
Accounts payable, accrued expenses and other liabilities |  | $ | 21,390 |  |  | $ | 23,770 |
Lease liabilities |  |  | 6,892 |  |  |  | — |
Deferred income taxes |  |  | — |  |  |  | 35,659 |
|  | $ | 28,282 |  |  | $ | 59,429 |
The following table summarizes the results of discontinued operations for the three and six months ended June 30, 2019 and 2018 (in thousands):
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Net revenue |  | $ | 53,141 |  |  | $ | 58,242 |  |  | $ | 104,363 |  |  | $ | 114,331 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of service salaries and benefits |  |  | 26,667 |  |  |  | 27,930 |  |  |  | 52,595 |  |  |  | 55,806 |
Cost of service supplies and other operating expenses |  |  | 6,370 |  |  |  | 6,225 |  |  |  | 11,937 |  |  |  | 12,194 |
General and administrative expenses |  |  | 11,421 |  |  |  | 11,562 |  |  |  | 22,444 |  |  |  | 22,788 |
Depreciation and amortization |  |  | — |  |  |  | 6,237 |  |  |  | 7,262 |  |  |  | 12,486 |
Transaction costs |  |  | 300 |  |  |  | — |  |  |  | 1,400 |  |  |  | — |
Loss on classification as held for sale |  |  | 66,446 |  |  |  | — |  |  |  | 388,002 |  |  |  | — |
Total operating expenses |  |  | 111,204 |  |  |  | 51,954 |  |  |  | 483,640 |  |  |  | 103,274 |
(Loss) income from operations |  |  | (58,063 | ) |  |  | 6,288 |  |  |  | (379,277 | ) |  |  | 11,057 |
Non-operating expenses, net |  |  | (17 | ) |  |  | (11 | ) |  |  | (33 | ) |  |  | (19 | )
(Loss) income before income taxes |  |  | (58,080 | ) |  |  | 6,277 |  |  |  | (379,310 | ) |  |  | 11,038 |
Income tax benefit (provision) |  |  | 14,319 |  |  |  | (1,640 | ) |  |  | 51,024 |  |  |  | (2,979 | )
Net (loss) income |  | $ | (43,761 | ) |  | $ | 4,637 |  |  | $ | (328,286 | ) |  | $ | 8,059 |

X
- References No definition available. + Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration