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Discontinued Operations | 12 Months Ended
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Dec. 31, 2019
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations |
8. | Discontinued Operations:
In November 2018, the Company announced the initiation of a process to divest its management services organization, which operated as MedData, to allow the Company to focus on its core physician services business. On October 10, 2019, the Company entered into a securities purchase agreement with an affiliate of Frazier Healthcare Partners to divest MedData , and the transaction closed on October 31, 2019. Pursuant to the terms and conditions of the agreement, at the closing of the transaction, the Company received a cash payment of $ 249.7 million, net of certain net working capital and similar adjustments, as well as contingent economic consideration in an indirect holding company of the buyer, the value of which is contingent on both short and long-term performance of MedData and the maximum amount payable in respect of which is $ 50.0 million. The operating results of the management services service line were reported as discontinued operations in the Company’s Consolidated Statements of Income for the year ended December 31, 2019 with prior periods recast to conform with the current period presentation. The initial classification of the management services service line to assets held for sale during the three months ended March 31, 2019 impacted the net book value of the assets and liabilities expected to be transferred upon sale. The initial determination of the estimated fair value of the management services service line was 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. During the three months ended December 31, 2019, the preliminary net proceeds for the management services service line were determined to be $242.5 million, net of cash sold and certain working capital adjustments, resulting in a preliminary loss on sale of $ 29.1 million. Upon completion of the valuation of the contingent economic consideration and the working capital true-up, final net proceeds will be determined, and the Company will adjust the loss on sale 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 December 31, 2018 (in thousands):
|  | December 31, 2018 |
Assets |  |  |  |
Cash and cash equivalents |  | $ | 11,254 |
Accounts receivable, net |  |  | 38,118 |
Prepaid expenses and other assets |  |  | 2,505 |
Property and equipment, net |  |  | 42,603 |
Goodwill |  |  | 321,556 |
Intangible assets, net |  |  | 275,148 |
|  | $ | 691,184 |
Liabilities |  |  |  |
Accounts payable, accrued expenses and other liabilities |  | $ | 23,770 |
Deferred income taxes |  |  | 35,659 |
|  | $ | 59,429 |
Income from discontinued operations, net of income taxes, as reported in the Company’s Consolidated Statements of Income for the years ended December 31, 2019, 2018 and 2017 includes net revenue of $172.7 million, $220.9 million and $230.7 million, respectively. Operating income, excluding transaction related costs, for the years ended December 31, 2019, 2018 and 2017 was $20.1 million, $14.0 million and $25.2 million , respectively .

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- 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
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