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Discontinued Operations | 12 Months Ended
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Dec. 31, 2020
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations |
9. | Discontinued Operations:
Divestiture of the Radiology Services Medical Group On September 9, 2020, the Company entered into a securities purchase agreement with Radiology Partners, Inc. to divest the Company’s radiology services medical group, and the transaction closed on December 15, 2020. The purchase consideration was comprised of a cash payment of $885 million paid at closing, subject to certain cash, minimum net working capital, indebtedness and other adjustments. The Company received approximately $865 million at closing and used the proceeds of the transaction to redeem its $750 million in outstanding principal amount of 5.25% senior notes due 2023 (the “2023 Notes”) on January 7, 2021. The operating results of the radiology services medical group service line were reported as a component of discontinued operations, net of income taxes, in the Company’s Consolidated Statements of Income for the years ended December 31, 2020, 2019 and 2018. The initial classification of the radiology services medical group to assets held for sale during the third quarter of 2020 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 radiology services medical group was determined using the purchase price in the purchase agreement along with estimated broker, accounting, legal and other selling expenses. The Company deemed the carrying amount of other assets within the medical group, specifically accounts receivable and property and equipment, to represent fair value and therefore recorded a non-cash charge of $ 43.0 million against goodwill, which represented the difference between the estimated fair value of the radiology services medical group 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 $ 4.0 million deferred tax asset that increased the fair value of the medical group. An incremental non-cash charge was then required to reduce the radiology services medical group’s net assets to its previously determined fair value. Accordingly, the Company recorded the incremental non-cash charge of $ 4.0 million for a total non-cash charge of $ 47.0 million, reducing the goodwill balance of the radiology services medical group. Upon completion of the divestiture, the Company recorded an additional loss on disposal of $36.4 million based on estimated closing date net assets sold and final net proceeds. A closing working capital true up is expected to occur during the first quarter of 2021, and the Company will adjust the loss on sale as necessary at that time. Loss from discontinued operations, net of income taxes, for the radiology services medical group for the years ended December 31, 2020 and December 31, 2019 was $63.8 million and $72.8 million, respectively. Income from discontinued operations, net of income taxes, for the radiology services medical group for the year ended December 31, 2018 was $37.4 million. Net revenue for the radiology services medical group for the years ended December 31, 2020, 2019 and 2018 was $451.4 million, $489.4 million and $444.0 million, respectively. Operating loss for the radiology services medical group for the year ended December 31, 2020 was $73.6 million, including a non-cash goodwill impairment charge of $47.0 million and a preliminary loss on sale of $36.4 million. Operating loss for the radiology services medical group for the year ended December 31, 2019 was $75.3 million, including a non-cash goodwill impairment charge of $117.9 million. Operating income for the radiology services medical group for the year ended December 31, 2018 was $48.4 million. Divestiture of the Anesthesiology Services Medical GroupOn May 6, 2020, the Company entered into a securities purchase agreement with an affiliate of North American Partners in Anesthesia (“NAPA”) to divest the Company’s anesthesiology services medical group, and the transaction closed on May 6, 2020. Pursuant to the terms and conditions of the agreement, at the closing of the transaction, the Company received a cash payment of $50.0 million, subject to certain customary adjustments, as well as a contingent economic interest in NAPA with a value ranging from $0 to $250 million based upon the multiple of invested capital returned to NAPA’s owners upon exit of the investment. In addition, the Company retained the accounts receivable of the anesthesiology services medical group, which net of various other working capital items, approximated $110.0 million at March 31, 2020. The operating results of the anesthesiology services medical group service line were reported as a component of discontinued operations, net of income taxes, in the Company’s Consolidated Statements of Income for the years ended December 31, 2020, 2019 and 2018. A single anesthesiology practice was not included in the divestiture of the anesthesiology services medical group and continues to operate as an affiliate of the Company. Its results of operations are not material. The total loss on sale of the anesthesiology services medical group recorded during the year ended December 31, 2020 was $663.7 million. Upon completion of a valuation for the contingent economic interest, which is expected to be completed in the first quarter of 2021, the Company will adjust the loss on sale as necessary. In addition, as a result of the sale, the Company currently estimates that it will generate an approximately $1.71 billion capital loss carryforward that will expire in 2025. Based on management’s determination that it is more likely than not that the tax benefits related to this loss carryforward will not be realized, the Company has provided an approximately $430.0 million valuation allowance against this deferred tax asset as of December 31, 2020. Loss from discontinued operations, net of income taxes, for the anesthesiology services medical group for the years ended December 31, 2020 and December 31, 2019 was $717.2 million and $1.12 billion, respectively. Income from discontinued operations, net of income taxes, for the anesthesiology services medical group for the year ended December 31, 2018 was $ 99.7 million. Net revenue for the anesthesiology services medical group for the years ended December 31, 2020, 2019 and 2018 was $ 379.4 million, $ 1.25 billion and $ 1.29 billion, respectively. Operating loss for the anesthesiology services medical group for the year ended December 31, 2020 was $ 716.3 million, including the loss on sale of $ 663.7 million. Operating loss for the anesthesiology services medical group for the year ended December 31, 2019 was $ 1.23 billion, including a non-cash goodwill impairment charge of $ 1.33 billion. Operating income for the anesthesiology services medical group for the year ended December 31, 2018 was $ 135.0 million. Divestiture of MedData In October 2019, the Company divested its management services organization, referred to as MedData. Loss from discontinued operations, net of tax, for MedData was $347.6 million for the year ended December 31, 2019, reflecting the loss on sale recorded during the year ended December 31, 2019, as compared to income from discontinued operations, net of tax, of $10.0 million for 2018. During the year ended December 31, 2020, the Company recorded a net incremental loss on the sale of MedData of $5.8 million, primarily for the finalization of certain transaction related expenses, a working capital true-up and incremental reserves related to indemnification matters, partially offset by the completion of its preliminary valuation for the contingent economic consideration.

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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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