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Segment Reporting | 6 Months Ended
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Jun. 30, 2023
Segment Reporting [Abstract] |
Segment Reporting | Segment Reporting: Our internal financial reporting and management structure is focused on the major types of services provided by the Company. We manage our operations using two operating segments that are also our reportable segments: (1) home health and (2) hospice. These reportable operating segments are consistent with information used by our Chief Executive Officer, who is our chief operating decision maker, to assess performance and allocate resources. The following is a brief description of our reportable segments: •Home Health - Our home health operations represent the nation’s fourth largest provider of Medicare-certified skilled home health services, measured by 2020 Medicare revenues. As of June 30, 2023, we operated 255 home health locations in 34 states, with a concentration in the southern half of the United States. We are the sole owner of 244 of these locations. We retain 50.0% to 81.0% ownership in the remaining 11 jointly owned locations. Our home health services include a comprehensive range of Medicare-certified home nursing services to adult patients in need of care. These services include, among others, skilled nursing, physical, occupational, and speech therapy, medical social work, and home health aide services. See Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Form 10-K for a definition of episodic and non-episodic revenue. •Hospice - Our hospice operations represent the nation’s twelfth largest provider of Medicare-certified hospice services, measured by 2020 Medicare revenues. As of June 30, 2023, we operated 108 hospice locations in 23 states, with a concentration in the southern half of the United States. We are the sole owner of 104 of these locations. We retain 50.0% to 90.0% ownership in the remaining four jointly owned locations. Our hospice services include in-home services to terminally ill patients and their families to address patients’ physical needs, including pain control and symptom management, and to provide emotional and spiritual support. The accounting policies of our reportable segments are the same as those described in Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Form 10-K. All revenues for our services are generated through external customers. See Note 1, Summary of Significant Accounting Policies—Net Service Revenue, for the disaggregation of our revenues. No corporate overhead is allocated to either of our reportable segments. Our Chief Executive Officer evaluates the performance of our segments and allocates resources to them based on adjusted earnings before interest, taxes, depreciation, and amortization (“Segment Adjusted EBITDA”). Segment assets are not reviewed by our Chief Executive Officer and therefore are not disclosed below. Selected financial information for our reportable segments is as follows (in millions):
| Home Health |  | Hospice
| Three Months Ended June 30, |  | Three Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Net service revenue | $ | 213.8 |  |  | $ | 220.2 |  |  | $ | 48.5 |  |  | $ | 47.8 |
Cost of service, excluding depreciation and amortization | 111.4 |  |  | 108.8 |  |  | 24.1 |  |  | 21.5 |
General and administrative expenses | 59.4 |  |  | 57.8 |  |  | 16.1 |  |  | 15.5 |
Other income | (0.1) |  |  | — |  |  | — |  |  | — |
Noncontrolling interests | 0.3 |  |  | 0.6 |  |  | — |  |  | 0.1 |
Segment Adjusted EBITDA | $ | 42.8 |  |  | $ | 53.0 |  |  | $ | 8.3 |  |  | $ | 10.7 |
| Home Health |  | Hospice
| Six Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Net service revenue | $ | 429.7 |  |  | $ | 445.1 |  |  | $ | 97.7 |  |  | $ | 97.2 |
Cost of service, excluding depreciation and amortization | 219.5 |  |  | 216.8 |  |  | 48.6 |  |  | 43.2 |
General and administrative expenses | 122.3 |  |  | 116.5 |  |  | 32.4 |  |  | 30.4 |
Other income | (0.1) |  |  | — |  |  | — |  |  | — |
Noncontrolling interests | 0.8 |  |  | 1.1 |  |  | — |  |  | 0.2 |
Segment Adjusted EBITDA | $ | 87.2 |  |  | $ | 110.7 |  |  | $ | 16.7 |  |  | $ | 23.4 |
Segment reconciliations (in millions):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Total Segment Adjusted EBITDA | $ | 51.1 |  |  | $ | 63.7 |  |  | $ | 103.9 |  |  | $ | 134.1 |
Non-segment general and administrative expenses | (29.7) |  |  | (27.7) |  |  | (59.5) |  |  | (53.5) |
Depreciation and amortization | (7.7) |  |  | (8.2) |  |  | (15.5) |  |  | (16.7) |
Impairment of goodwill | (85.8) |  |  | — |  |  | (85.8) |  |  | — |
Interest expense and amortization of debt discounts and fees | (10.3) |  |  | (0.1) |  |  | (19.8) |  |  | (0.1) |
Net income attributable to noncontrolling interests | 0.3 |  |  | 0.7 |  |  | 0.8 |  |  | 1.3 |
Stock-based compensation expense | (2.6) |  |  | (1.2) |  |  | (4.1) |  |  | (2.5) |
(Loss) income before income taxes and noncontrolling interests | $ | (84.7) |  |  | $ | 27.2 |  |  | $ | (80.0) |  |  | $ | 62.6 |
Additional detail regarding the revenues of our operating segments by service line follows (in millions):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Home Health: |  |  |  |  |  |  |
Episodic | $ | 165.5 |  |  | $ | 186.3 |  |  | $ | 335.7 |  |  | $ | 378.0 |
Non-episodic | 45.7 |  |  | 31.2 |  |  | 88.6 |  |  | 61.6 |
Other | 2.6 |  |  | 2.7 |  |  | 5.4 |  |  | 5.5 |
Total home health | 213.8 |  |  | 220.2 |  |  | 429.7 |  |  | 445.1 |
Hospice | 48.5 |  |  | 47.8 |  |  | 97.7 |  |  | 97.2 |
Total net service revenue | $ | 262.3 |  |  | $ | 268.0 |  |  | $ | 527.4 |  |  | $ | 542.3 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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