[March 15, 2018] |
|
Quorum Health Corporation Announces Fourth Quarter and Year End 2017 Operating Results and Issues 2018 Guidance
Quorum Health Corporation (NYSE: QHC) (the "Company") today announced
its operating and financial results for the three months and year ended
December 31, 2017.
Net operating revenues for the three months ended December 31, 2017
decreased $0.2 million to $515.1 million, compared to $515.3 million for
the same period in 2016. Net operating revenues for the quarter
decreased $44.8 million from the two hospitals divested in 2016 and the
five hospitals divested in 2017 (collectively, "the divested
hospitals"), which was partially offset by a benefit of $29.9 million of
revenues from the California Hospital Quality Assurance Fee ("HQAF")
program as the program approval process for Centers for Medicare &
Medicaid Services ("CMS") for the 2017-2019 period was completed in the
fourth quarter of 2017, of which $22.5 million related to the first
three quarters of 2017. Excluding the divested hospitals and the
California HQAF revenues of $22.5 million related to the first three
quarters of 2017, net operating revenues increased $22.1 million in the
three months ended December 31, 2017 compared to the same period in
2016, primarily due to favorable volume and payor rate variances. Net
loss for the three months ended December 31, 2017 was $(26.0) million
compared to $(90.1) million for the same period in 2016. Net loss
attributable to Quorum Health Corporation for the three months ended
December 31, 2017 was $(26.8) million, or $(0.95) per share, compared to
$(90.7) million, or $(3.19) per share, for the same period in 2016. The
net loss for the three months ended December 31, 2017 was impacted by
$25.8 million of impairment related to certain hospitals intended for
divestiture. On a same-facility basis, as defined in footnote (k), the
Company's operating results for the three months ended December 31, 2017
reflect a 0.4% increase in admissions and a 0.6% increase in adjusted
admissions compared to the same period in 2016.
As of December 31, 2017, the Company recorded a change in estimate of
$21.0 million to reduce the net realizable value of its patient accounts
receivable. During the fourth quarter of 2017, the Company analyzed
self-pay patient accounts receivable at a more comprehensive and
disaggregated level and refined its estimate of the collectability of
the portion of self-pay accounts receivable related to insured patients,
primarily co-payments and deductibles. The Company's analysis also
included an evaluation of patient accounts receivable retained in the
divestitures of six of the Company's seven divested hospitals. This
adjustment negatively impacted the provision for bad debts in the net
operating revenues components of the statement of income for both the
three months and year ended December 31, 2017.
Adjusted EBITDA for the three months ended December 31, 2017 was $49.0
million, compared to $30.7 million for the same period in 2016. Adjusted
EBITDA was positively impacted by the Company's ability to accrue for
the California HQAF program in the 2017 period, as stated above. The
divested hospitals negatively impacted EBITDA by $5.1 million and $13.1
million for the three months ended December 31, 2017 and 2016,
respectively. As a result, Adjusted EBITDA, Adjusted for Divestitures,
was $54.1 million and $43.9 million for the three months ended December
31, 2017 and 2016, respectively.
Net operating revenues for the year ended December 31, 2017 decreased
$66.3 million to $2,072.2 million, compared to $2,138.5 million for the
same period in 2016. Net operating revenues decreased $108.8 million
related to the divested hospitals and decreased $15.4 million related to
the California HQAF program. Excluding the divested hospitals and the
California HQAF, net operating revenues increased $57.9 million for the
year ended December 31, 2017 compared to the same period in 2016,
primarily due to favorable volume and payor rate variances. Net loss for
the year ended December 31, 2017 was $(112.4) million compared to
$(345.2) million for the same period in 2016. Net loss attributable to
Quorum Health Corporation for the year ended December 31, 2017 was
$(114.2) million, or $(4.06) per share, compared to $(347.7) million, or
$(12.24) per share, for the same period in 2016. The 2017 period
included impairment of $47.3 million related to hospitals held for sale
or identified for potential divestiture and a net gain of $5.2 million
on the sale of hospitals. The 2016 period included $291.9 million of
impairment, $5.5 million of transaction costs related to the spin-off
from Community Health Systems, Inc. in April 2016 (the "Spin-off") and a
net loss of $2.1 million on the sale of hospitals. On a same-facility
basis, the Company's operating results for the year ended December 31,
2017 reflect a 0.5% decrease in admissions and a 0.4% increase in
adjusted admissions compared to the same period in 2016.
Adjusted EBITDA for the year ended December 31, 2017 was $141.8 million,
compared to $162.9 million for the same period in 2016. The divested
hospitals negatively impacted EBITDA by $20.6 million and $33.1 million
for the years ended December 31, 2017 and 2016, respectively. As a
result, Adjusted EBITDA, Adjusted for Divestitures was $162.5 million
and $196.0 million for the years ended December 31, 2017 and 2016,
respectively.
As of December 31, 2017, the Company had combined net proceeds from
seven hospital divestitures of $45.9 million, of which $44.4 million was
utilized to pay down the Company's term loan under its Senior Credit
Facility. In addition, in October 2017, the Company received
approximately $31 million from the State of California related to the
2015-2016 HQAF Program, a portion of which was utilized to pay down
additional principal on the Company's term loan. On March 14, 2018, the
Company executed an agreement with its lenders pursuant to its Senior
Credit Facility to amend the calculation of the Secured Net Leverage
Ratio beginning July 1, 2017 through maturity, among other provisions.
Commenting on the results, Thomas D. Miller, President and Chief
Executive Officer of Quorum Health Corporation, said, "With eight
divestiture transactions completed as of today and more expected in
2018, we are executing on our strategy to pay down debt in alignment
with our key strategic goals. We're seeing volume improvements in core
hospitals, primarily as a result of physician recruiting efforts in
specialty areas. We also continue to strongly focus on quality and
safety and are very proud of the accomplishments of our physicians and
nurses in their efforts to improve safety and quality in their community
hospitals."
Financial Outlook
Set forth below is selected information concerning the Company's
financial outlook for the year ending December 31, 2018. These
projections are based on the Company's historical operating performance,
current economic, demographic and regulatory trends and other
assumptions that the Company believes are reasonable at this time. The
2018 guidance should be considered in conjunction with the assumptions
included herein. See "Forward-Looking Statements" below for a list of
factors that could affect the future results of the Company or the
healthcare industry generally.
The Company expects net operating revenues for the year ending December
31, 2018 to range from $1.925 billion to $1.975 billion. The Company
expects Adjusted EBITDA for the year ending December 31, 2018 to range
from $145 million to $165 million and Adjusted EBITDA, Adjusted for
Divestitures to range from $160 million to $180 million. The guidance
for Adjusted EBITDA gives effect to: (i) approximately $23 million of
California HQAF revenues, net of provider taxes, (ii) the reduction of
approximately $3 million in electronic health records incentives earned
in 2018 compared to 2017, (iii) the inclusion of approximately $10
million to $12 million of non-cash stock-based compensation and other
non-cash benefits expense and approximately $20 million to $25 million
of non-cash insurance expense, and (iv) no estimate for the effects of
any changes to the Affordable Care Act, its interpretation or its
implementation. The guidance for Adjusted EBITDA, Adjusted for
Divestitures through December 31, 2018 includes the same assumptions
above, in addition to excluding the negative (positive) EBITDA of
hospitals divested and expected to be divested through December 31, 2018.
A reconciliation of the Company's projected 2018 Adjusted EBITDA, and
Adjusted EBITDA, Adjusted for Divestitures, each a forward-looking
non-GAAP financial measure, to net income (loss), the most directly
comparable U.S. GAAP financial measure, is omitted from this press
release because the Company is unable to provide such reconciliation
without unreasonable effort. This inability results from the inherent
difficulty in forecasting generally and in quantifying certain projected
amounts that are necessary for such reconciliation. In particular,
sufficient information is not available to calculate certain items
required for such reconciliation without unreasonable effort, including
interest expense, provision for (benefit from) income taxes and other
adjustments that would be necessary to prepare a forward-looking
statement of net income (loss) in accordance with U.S. GAAP. For the
same reasons, the Company is unable to address the probable significance
of the unavailable information.
About Quorum Health Corporation
The principal business of Quorum Health Corporation is to provide
hospital and outpatient healthcare services in its markets across the
United States. As of December 31, 2017, the Company owned or leased 31
hospitals in rural and mid-sized markets located across 15 states and
licensed for 2,979 beds. Through Quorum Health Resources LLC, a
wholly-owned subsidiary, the Company provides hospital management
advisory and healthcare consulting services to non-affiliated hospitals
across the country. Over 95% of the Company's net operating revenues are
attributable to its hospital operations business.
The Company's headquarters are located in Brentwood, Tennessee, a suburb
south of Nashville. Shares in Quorum Health Corporation are traded on
the NYSE under the symbol "QHC." More information about the Company can
be found on its website at www.quorumhealth.com.
Quorum Health Corporation will hold a conference call on Friday, March
16, 2018, at 10:00 a.m. Central time, 11:00 a.m. Eastern, to review
operating and financial results for the three and twelve months ended
December 31, 2017. Investors will have the opportunity to listen to a
live internet broadcast of the conference call by clicking on the
Investor Relations link of the Company's website at www.quorumhealth.com.
To listen to the live call, please go to the website at least 15 minutes
early to register, download and install any necessary audio software.
For those who cannot listen to the live broadcast, a replay will be
available shortly after the call and will continue to be available for
approximately 30 days. Copies of this press release and the Company's
Current Report on Form 8-K (including this press release) are available
on the Company's website at www.quorumhealth.com.
|
QUORUM HEALTH CORPORATION
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF
INCOME (LOSS)
(In Thousands, Except Earnings per Share and Shares)
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
% of
|
|
|
|
|
|
% of
|
|
|
|
Amount
|
|
|
Revenues
|
|
|
Amount
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues, net of contractual allowances and discounts (a)
|
|
|
$
|
596,648
|
|
|
|
|
|
|
$
|
593,855
|
|
|
|
|
Provision for bad debts
|
|
|
|
81,566
|
|
|
|
|
|
|
|
78,615
|
|
|
|
|
Net operating revenues
|
|
|
|
515,082
|
|
|
|
100.0
|
%
|
|
|
|
515,240
|
|
|
|
100.0
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits (b)
|
|
|
|
253,106
|
|
|
|
49.1
|
%
|
|
|
|
268,559
|
|
|
|
52.1
|
%
|
Supplies
|
|
|
|
63,932
|
|
|
|
12.4
|
%
|
|
|
|
66,829
|
|
|
|
13.0
|
%
|
Other operating expenses (a)
|
|
|
|
156,669
|
|
|
|
30.5
|
%
|
|
|
|
163,276
|
|
|
|
31.8
|
%
|
Depreciation and amortization
|
|
|
|
18,714
|
|
|
|
3.6
|
%
|
|
|
|
26,434
|
|
|
|
5.1
|
%
|
Rent
|
|
|
|
13,599
|
|
|
|
2.6
|
%
|
|
|
|
11,966
|
|
|
|
2.3
|
%
|
Electronic health records incentives earned
|
|
|
|
(229
|
)
|
|
|
-
|
%
|
|
|
|
(1,691
|
)
|
|
|
(0.3
|
)%
|
Legal, professional and settlement costs
|
|
|
|
(518
|
)
|
|
|
(0.1
|
)%
|
|
|
|
1,166
|
|
|
|
0.2
|
%
|
Impairment of long-lived assets and goodwill
|
|
|
|
25,820
|
|
|
|
5.0
|
%
|
|
|
|
41,470
|
|
|
|
8.0
|
%
|
Loss (gain) on sale of hospitals, net
|
|
|
|
(131
|
)
|
|
|
-
|
%
|
|
|
|
2,150
|
|
|
|
0.4
|
%
|
Transaction costs related to the Spin-off
|
|
|
|
49
|
|
|
|
-
|
%
|
|
|
|
44
|
|
|
|
-
|
%
|
Total operating costs and expenses
|
|
|
|
531,011
|
|
|
|
103.1
|
%
|
|
|
|
580,203
|
|
|
|
112.6
|
%
|
Income (loss) from operations
|
|
|
|
(15,929
|
)
|
|
|
(3.1
|
)%
|
|
|
|
(64,963
|
)
|
|
|
(12.6
|
)%
|
Interest expense, net
|
|
|
|
31,873
|
|
|
|
6.2
|
%
|
|
|
|
28,684
|
|
|
|
5.6
|
%
|
Income (loss) before income taxes
|
|
|
|
(47,802
|
)
|
|
|
(9.3
|
)%
|
|
|
|
(93,647
|
)
|
|
|
(18.2
|
)%
|
Provision for (benefit from) income taxes
|
|
|
|
(21,779
|
)
|
|
|
(4.2
|
)%
|
|
|
|
(3,555
|
)
|
|
|
(0.7
|
)%
|
Net income (loss) (c)
|
|
|
|
(26,023
|
)
|
|
|
(5.1
|
)%
|
|
|
|
(90,092
|
)
|
|
|
(17.5
|
)%
|
Less: Net income (loss) attributable to noncontrolling interests
|
|
|
|
785
|
|
|
|
0.1
|
%
|
|
|
|
574
|
|
|
|
0.1
|
%
|
Net income (loss) attributable to Quorum Health Corporation
|
|
|
$
|
(26,808
|
)
|
|
|
(5.2
|
)%
|
|
|
$
|
(90,666
|
)
|
|
|
(17.6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to Quorum Health Corporation
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (d)
|
|
|
$
|
(0.95
|
)
|
|
|
|
|
|
$
|
(3.19
|
)
|
|
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (e)
|
|
|
|
28,248,527
|
|
|
|
|
|
|
|
28,416,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUORUM HEALTH CORPORATION
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF
INCOME (LOSS)
(In Thousands, Except Earnings per Share and Shares)
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
% of
|
|
|
|
|
|
% of
|
|
|
|
Amount
|
|
|
Revenues
|
|
|
Amount
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues, net of contractual allowances and discounts (a)
|
|
|
$
|
2,327,655
|
|
|
|
|
|
|
$
|
2,419,053
|
|
|
|
|
Provision for bad debts
|
|
|
|
255,485
|
|
|
|
|
|
|
|
280,586
|
|
|
|
|
Net operating revenues
|
|
|
|
2,072,170
|
|
|
|
100.0
|
%
|
|
|
|
2,138,467
|
|
|
|
100.0
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits (b)
|
|
|
|
1,034,797
|
|
|
|
49.9
|
%
|
|
|
|
1,057,119
|
|
|
|
49.4
|
%
|
Supplies
|
|
|
|
250,523
|
|
|
|
12.1
|
%
|
|
|
|
258,639
|
|
|
|
12.1
|
%
|
Other operating expenses (a)
|
|
|
|
623,063
|
|
|
|
30.1
|
%
|
|
|
|
645,802
|
|
|
|
30.3
|
%
|
Depreciation and amortization
|
|
|
|
82,155
|
|
|
|
4.0
|
%
|
|
|
|
117,288
|
|
|
|
5.5
|
%
|
Rent
|
|
|
|
50,230
|
|
|
|
2.4
|
%
|
|
|
|
49,883
|
|
|
|
2.3
|
%
|
Electronic health records incentives earned
|
|
|
|
(4,745
|
)
|
|
|
(0.2
|
)%
|
|
|
|
(11,482
|
)
|
|
|
(0.5
|
)%
|
Legal, professional and settlement costs
|
|
|
|
6,001
|
|
|
|
0.3
|
%
|
|
|
|
7,342
|
|
|
|
0.3
|
%
|
Impairment of long-lived assets and goodwill
|
|
|
|
47,281
|
|
|
|
2.3
|
%
|
|
|
|
291,870
|
|
|
|
13.6
|
%
|
Loss (gain) on sale of hospitals, net
|
|
|
|
(5,243
|
)
|
|
|
(0.3
|
)%
|
|
|
|
2,150
|
|
|
|
0.1
|
%
|
Transaction costs related to the Spin-off
|
|
|
|
253
|
|
|
|
-
|
%
|
|
|
|
5,488
|
|
|
|
0.3
|
%
|
Total operating costs and expenses
|
|
|
|
2,084,315
|
|
|
|
100.6
|
%
|
|
|
|
2,424,099
|
|
|
|
113.4
|
%
|
Income (loss) from operations
|
|
|
|
(12,145
|
)
|
|
|
(0.6
|
)%
|
|
|
|
(285,632
|
)
|
|
|
(13.4
|
)%
|
Interest expense, net
|
|
|
|
122,077
|
|
|
|
5.9
|
%
|
|
|
|
113,440
|
|
|
|
5.3
|
%
|
Income (loss) before income taxes
|
|
|
|
(134,222
|
)
|
|
|
(6.5
|
)%
|
|
|
|
(399,072
|
)
|
|
|
(18.7
|
)%
|
Provision for (benefit from) income taxes
|
|
|
|
(21,865
|
)
|
|
|
(1.1
|
)%
|
|
|
|
(53,875
|
)
|
|
|
(2.6
|
)%
|
Net income (loss) (c)
|
|
|
|
(112,357
|
)
|
|
|
(5.4
|
)%
|
|
|
|
(345,197
|
)
|
|
|
(16.1
|
)%
|
Less: Net income (loss) attributable to noncontrolling interests
|
|
|
|
1,833
|
|
|
|
0.1
|
%
|
|
|
|
2,491
|
|
|
|
0.2
|
%
|
Net income (loss) attributable to Quorum Health Corporation (b)
|
|
|
$
|
(114,190
|
)
|
|
|
(5.5
|
)%
|
|
|
$
|
(347,688
|
)
|
|
|
(16.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to Quorum Health Corporation
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (d)
|
|
|
$
|
(4.06
|
)
|
|
|
|
|
|
$
|
(12.24
|
)
|
|
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (e)
|
|
|
|
28,113,566
|
|
|
|
|
|
|
|
28,413,247
|
|
|
|
|
|
|
QUORUM HEALTH CORPORATION
UNAUDITED CONSOLIDATED AND COMBINED SELECTED OPERATING DATA
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
$ Variance
|
|
|
% Variance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated and combined:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of licensed beds at end of period (f)
|
|
|
2,979
|
|
|
3,459
|
|
|
(480
|
)
|
|
|
(13.9
|
)%
|
Admissions (g)
|
|
|
20,932
|
|
|
23,200
|
|
|
(2,268
|
)
|
|
|
(9.8
|
)%
|
Adjusted admissions (h)
|
|
|
50,788
|
|
|
57,202
|
|
|
(6,414
|
)
|
|
|
(11.2
|
)%
|
Emergency room visits (i)
|
|
|
155,746
|
|
|
174,754
|
|
|
(19,008
|
)
|
|
|
(10.9
|
)%
|
Medicare case mix (j)
|
|
|
1.45
|
|
|
1.41
|
|
|
0.04
|
|
|
|
2.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-facility: (k)
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of licensed beds at end of period (f)
|
|
|
2,979
|
|
|
2,979
|
|
|
-
|
|
|
|
-
|
%
|
Admissions (g)
|
|
|
20,864
|
|
|
20,788
|
|
|
76
|
|
|
|
0.4
|
%
|
Adjusted admissions (h)
|
|
|
50,583
|
|
|
50,290
|
|
|
293
|
|
|
|
0.6
|
%
|
Emergency room visits (i)
|
|
|
154,874
|
|
|
152,620
|
|
|
2,254
|
|
|
|
1.5
|
%
|
Medicare case mix (j)
|
|
|
1.45
|
|
|
1.39
|
|
|
0.06
|
|
|
|
4.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
$ Variance
|
|
|
% Variance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated and combined:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of licensed beds at end of period (f)
|
|
|
2,979
|
|
|
3,459
|
|
|
(480
|
)
|
|
|
(13.9
|
)%
|
Admissions (g)
|
|
|
88,504
|
|
|
95,313
|
|
|
(6,809
|
)
|
|
|
(7.1
|
)%
|
Adjusted admissions (h)
|
|
|
217,583
|
|
|
235,263
|
|
|
(17,680
|
)
|
|
|
(7.5
|
)%
|
Emergency room visits (i)
|
|
|
660,246
|
|
|
726,155
|
|
|
(65,909
|
)
|
|
|
(9.1
|
)%
|
Medicare case mix (j)
|
|
|
1.43
|
|
|
1.38
|
|
|
0.05
|
|
|
|
3.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-facility: (k)
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of licensed beds at end of period (f)
|
|
|
2,979
|
|
|
2,979
|
|
|
-
|
|
|
|
-
|
%
|
Admissions (g)
|
|
|
84,459
|
|
|
84,905
|
|
|
(446
|
)
|
|
|
(0.5
|
)%
|
Adjusted admissions (h)
|
|
|
205,905
|
|
|
205,110
|
|
|
795
|
|
|
|
0.4
|
%
|
Emergency room visits (i)
|
|
|
622,049
|
|
|
631,346
|
|
|
(9,297
|
)
|
|
|
(1.5
|
)%
|
Medicare case mix (j)
|
|
|
1.43
|
|
|
1.39
|
|
|
0.04
|
|
|
|
2.9
|
%
|
|
|
QUORUM HEALTH CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Par Value per Share and Shares)
|
|
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
5,617
|
|
|
|
$
|
25,455
|
|
Patient accounts receivable, net of allowance for doubtful accounts
of $352,509 and $360,796 at December 31, 2017 and 2016, respectively
|
|
|
|
343,145
|
|
|
|
|
380,685
|
|
Inventories
|
|
|
|
53,459
|
|
|
|
|
58,124
|
|
Prepaid expenses
|
|
|
|
21,167
|
|
|
|
|
23,028
|
|
Due from third-party payors
|
|
|
|
97,202
|
|
|
|
|
116,235
|
|
Current assets of hospitals held for sale
|
|
|
|
8,112
|
|
|
|
|
1,502
|
|
Other current assets
|
|
|
|
47,440
|
|
|
|
|
57,942
|
|
Total current assets
|
|
|
|
576,142
|
|
|
|
|
662,971
|
|
Property and equipment, at cost
|
|
|
|
1,405,184
|
|
|
|
|
1,519,975
|
|
Less: Accumulated depreciation and amortization
|
|
|
|
(729,905
|
)
|
|
|
|
(786,075
|
)
|
Total property and equipment, net
|
|
|
|
675,279
|
|
|
|
|
733,900
|
|
Goodwill
|
|
|
|
409,229
|
|
|
|
|
416,833
|
|
Intangible assets, net
|
|
|
|
64,850
|
|
|
|
|
84,982
|
|
Long-term assets of hospitals held for sale
|
|
|
|
7,734
|
|
|
|
|
6,851
|
|
Other long-term assets
|
|
|
|
95,607
|
|
|
|
|
88,833
|
|
Total assets
|
|
|
$
|
1,828,841
|
|
|
|
$
|
1,994,370
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Current maturities of long-term debt
|
|
|
$
|
1,855
|
|
|
|
$
|
5,683
|
|
Accounts payable
|
|
|
|
171,250
|
|
|
|
|
169,684
|
|
Accrued liabilities:
|
|
|
|
|
|
|
Accrued salaries and benefits
|
|
|
|
77,803
|
|
|
|
|
98,803
|
|
Accrued interest
|
|
|
|
10,466
|
|
|
|
|
19,915
|
|
Due to third-party payors
|
|
|
|
47,705
|
|
|
|
|
42,537
|
|
Current liabilities of hospitals held for sale
|
|
|
|
2,577
|
|
|
|
|
492
|
|
Other current liabilities
|
|
|
|
43,687
|
|
|
|
|
53,268
|
|
Total current liabilities
|
|
|
|
355,343
|
|
|
|
|
390,382
|
|
Long-term debt
|
|
|
|
1,212,035
|
|
|
|
|
1,241,142
|
|
Deferred income tax liabilities, net
|
|
|
|
7,774
|
|
|
|
|
31,474
|
|
Other long-term liabilities
|
|
|
|
137,954
|
|
|
|
|
108,996
|
|
Total liabilities
|
|
|
|
1,713,106
|
|
|
|
|
1,771,994
|
|
Redeemable noncontrolling interests
|
|
|
|
2,325
|
|
|
|
|
6,807
|
|
Equity:
|
|
|
|
|
|
|
Quorum Health Corporation stockholders' equity:
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value per share; 100,000,000 shares
authorized; none issued
|
|
|
|
-
|
|
|
|
|
-
|
|
Common stock, $0.0001 par value per share; 300,000,000 shares
authorized; 30,294,895 shares issued and outstanding at December 31,
2017 and 29,482,050 shares issued and outstanding at December 31,
2016
|
|
|
|
3
|
|
|
|
|
3
|
|
Additional paid-in capital
|
|
|
|
549,610
|
|
|
|
|
537,911
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
(1,956
|
)
|
|
|
|
(2,760
|
)
|
Accumulated deficit
|
|
|
|
(448,216
|
)
|
|
|
|
(334,026
|
)
|
Total Quorum Health Corporation stockholders' equity
|
|
|
|
99,441
|
|
|
|
|
201,128
|
|
Nonredeemable noncontrolling interests
|
|
|
|
13,969
|
|
|
|
|
14,441
|
|
Total equity
|
|
|
|
113,410
|
|
|
|
|
215,569
|
|
Total liabilities and equity
|
|
|
$
|
1,828,841
|
|
|
|
$
|
1,994,370
|
|
|
|
QUORUM HEALTH CORPORATION
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF
CASH FLOWS
(In Thousands)
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(112,357
|
)
|
|
|
$
|
(345,197
|
)
|
|
|
$
|
4,735
|
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
82,155
|
|
|
|
|
117,288
|
|
|
|
|
128,001
|
|
Non-cash interest expense
|
|
|
|
5,770
|
|
|
|
|
2,496
|
|
|
|
|
-
|
|
Provision for (benefit from) deferred income taxes
|
|
|
|
(22,137
|
)
|
|
|
|
(56,339
|
)
|
|
|
|
2,542
|
|
Stock-based compensation expense
|
|
|
|
9,952
|
|
|
|
|
7,441
|
|
|
|
|
-
|
|
Impairment of long-lived assets and goodwill
|
|
|
|
47,281
|
|
|
|
|
291,870
|
|
|
|
|
13,000
|
|
Loss (gain) on sale of hospitals, net
|
|
|
|
(5,243
|
)
|
|
|
|
2,150
|
|
|
|
|
-
|
|
Changes in reserves for self-insurance claims, net of payments
|
|
|
|
22,519
|
|
|
|
|
27,994
|
|
|
|
|
-
|
|
Changes in reserves for legal, professional and settlement costs,
net of payments
|
|
|
|
(3,651
|
)
|
|
|
|
3,651
|
|
|
|
|
-
|
|
Other non-cash expense (income), net
|
|
|
|
190
|
|
|
|
|
(575
|
)
|
|
|
|
380
|
|
Changes in operating assets and liabilities, net of acquisitions and
divestitures:
|
|
|
|
|
|
|
|
|
|
Patient accounts receivable, net
|
|
|
|
29,091
|
|
|
|
|
10,205
|
|
|
|
|
(16,639
|
)
|
Due from and due to third-party payors, net
|
|
|
|
24,201
|
|
|
|
|
7,005
|
|
|
|
|
(18,198
|
)
|
Inventories, prepaid expenses and other current assets
|
|
|
|
673
|
|
|
|
|
1,457
|
|
|
|
|
8,000
|
|
Accounts payable and accrued liabilities
|
|
|
|
(14,743
|
)
|
|
|
|
20,760
|
|
|
|
|
(78,944
|
)
|
Long-term assets and liabilities, net
|
|
|
|
3,269
|
|
|
|
|
(9,120
|
)
|
|
|
|
12
|
|
Net cash provided by (used in) operating activities
|
|
|
|
66,970
|
|
|
|
|
81,086
|
|
|
|
|
42,889
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Capital expenditures for property and equipment
|
|
|
|
(61,530
|
)
|
|
|
|
(79,920
|
)
|
|
|
|
(59,455
|
)
|
Capital expenditures for software
|
|
|
|
(6,898
|
)
|
|
|
|
(7,269
|
)
|
|
|
|
(8,845
|
)
|
Acquisitions, net of cash acquired
|
|
|
|
(1,920
|
)
|
|
|
|
(785
|
)
|
|
|
|
(8,019
|
)
|
Proceeds from the sale of hospitals
|
|
|
|
32,081
|
|
|
|
|
13,746
|
|
|
|
|
-
|
|
Proceeds from asset sales
|
|
|
|
-
|
|
|
|
|
1,082
|
|
|
|
|
3,114
|
|
Other investing activities
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(5,387
|
)
|
Net cash provided by (used in) investing activities
|
|
|
|
(38,267
|
)
|
|
|
|
(73,146
|
)
|
|
|
|
(78,592
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Borrowings under revolving credit facilities
|
|
|
|
508,000
|
|
|
|
|
50,000
|
|
|
|
|
-
|
|
Repayments under revolving credit facilities
|
|
|
|
(508,000
|
)
|
|
|
|
(50,000
|
)
|
|
|
|
-
|
|
Borrowings of long-term debt
|
|
|
|
376
|
|
|
|
|
1,256,281
|
|
|
|
|
372
|
|
Repayments of long-term debt
|
|
|
|
(39,195
|
)
|
|
|
|
(15,222
|
)
|
|
|
|
(1,563
|
)
|
Increase in Due to Parent, net
|
|
|
|
-
|
|
|
|
|
24,796
|
|
|
|
|
262,775
|
|
Increase (decrease) in receivables facility, net
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(224,774
|
)
|
Payments of debt issuance costs
|
|
|
|
(3,119
|
)
|
|
|
|
(29,146
|
)
|
|
|
|
-
|
|
Cash paid to Parent related to the Spin-off
|
|
|
|
-
|
|
|
|
|
(1,217,336
|
)
|
|
|
|
-
|
|
Cancellation of restricted stock awards for payroll tax withholdings
on vested shares
|
|
|
|
(1,508
|
)
|
|
|
|
(13
|
)
|
|
|
|
-
|
|
Cash distributions to noncontrolling investors
|
|
|
|
(3,851
|
)
|
|
|
|
(2,850
|
)
|
|
|
|
(1,623
|
)
|
Purchases of shares from noncontrolling investors
|
|
|
|
(1,244
|
)
|
|
|
|
(101
|
)
|
|
|
|
(937
|
)
|
Net cash provided by (used in) financing activities
|
|
|
|
(48,541
|
)
|
|
|
|
16,409
|
|
|
|
|
34,250
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
|
(19,838
|
)
|
|
|
|
24,349
|
|
|
|
|
(1,453
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
|
25,455
|
|
|
|
|
1,106
|
|
|
|
|
2,559
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
5,617
|
|
|
|
$
|
25,455
|
|
|
|
$
|
1,106
|
|
|
|
FOOTNOTES TO UNAUDITED FINANCIAL STATEMENTS AND SELECTED
OPERATING DATA
|
|
(a)
|
|
The California Department of Health Care Services implemented the
HQAF program, imposing a fee on certain general and acute care
California hospitals. Revenues generated from these fees provide
funding for the non-federal supplemental payments to California
hospitals that serve California's Medicaid ("Medi-Cal") and
uninsured patients. Under Phase IV of the program, covering the
period January 2014 through December 2016, the Company recognized
$11.5 million of net operating revenues less $2.7 million of
provider taxes for the three months ended December 31, 2016. The
Company recognized $45.4 million of net operating revenues less
$11.0 million of provider taxes for the year ended December 31, 2016.
|
|
|
|
|
|
In November 2016, California voters approved a state constitutional
amendment measure that extends indefinitely the statute that imposes
fees on California hospitals seeking federal matching funds.
However, Phase IV of the program expired on December 31, 2016, and
CMS approval was received in December 2017. Consistent with the
first four phases of the HQAF program, the Company did not recognize
any revenues under the new program until CMS completed the approval
process. The Company recognized $29.9 million of net operating
revenues less $7.9 million of provider taxes for the three months
and year ended December 31, 2017. Of this amount, $22.5 million of
net operating revenues less $5.9 million of provider taxes related
to the first three quarters of 2017 and $7.5 million of net
operating revenues less $2.0 million of provider taxes related to
the three months ended December 31, 2017.
|
|
|
|
(b)
|
|
Salaries and benefits were impacted by a net decrease in
discretionary employee benefits as the Company continues to
implement cost savings plans.
|
|
|
|
(c)
|
|
EBITDA is a non-GAAP financial measure that consists of net income
(loss) before interest, income taxes, depreciation and amortization.
Adjusted EBITDA, also a non-GAAP financial measure, is EBITDA
adjusted to add back the effect of certain legal, professional and
settlement costs, impairment of long-lived assets and goodwill, net
loss (gain) on sale of hospitals, transaction costs related to the
Spin-off, post-spin headcount reductions and change in estimate
related to the collectability of patient accounts receivable. The
Company uses Adjusted EBITDA as a measure of financial performance.
Adjusted EBITDA is a key measure used by the Company's management to
assess the operating performance of its hospital operations business
and to make decisions on the allocation of resources. Additionally,
management utilizes Adjusted EBITDA in assessing the Company's
results of operations and in comparing the Company's results of
operations between periods. Adjusted EBITDA, Adjusted for
Divestitures, also a non-GAAP financial measure, is further
retrospectively adjusted to exclude the effect of EBITDA of
hospitals divested in 2016 and 2017. Adjusted EBITDA, Adjusted for
Potential Divestitures, also a non-GAAP financial measure, is
further retrospectively adjusted to exclude the effect of EBITDA of
seven hospitals that management has identified for potential
divestiture over the next twelve to twenty four month period as of
December 31, 2017. The Company continually evaluates other hospitals
for potential divestiture, which could result in changes to the
hospitals included in this group in future periods. The Company has
presented Adjusted EBITDA and Adjusted EBITDA, Adjusted for
Divestitures and Adjusted EBITDA, Adjusted for Potential
Divestitures in this press release because it believes these
measures provide investors and other users of the Company's
financial statements with additional information about how the
Company's management assesses its results of operations.
|
|
|
|
|
|
Adjusted EBITDA, Adjusted EBITDA, Adjusted for Divestitures and
Adjusted EBITDA, Adjusted for Potential Divestitures are not
measurements of financial performance under U.S. GAAP. These
calculations should not be considered in isolation or as a
substitute for net income, operating income or any other measure
calculated in accordance with U.S. GAAP. The items excluded from
Adjusted EBITDA, Adjusted EBITDA, Adjusted for Divestitures and
Adjusted EBITDA, Adjusted for Potential Divestitures are significant
components in understanding and evaluating the Company's financial
performance. The Company believes such adjustments are appropriate,
as the magnitude and frequency of such items can vary significantly
and are not related to the assessment of normal operating
performance. Additionally, the Company's calculation of Adjusted
EBITDA, Adjusted EBITDA, Adjusted for Divestitures and Adjusted
EBITDA, Adjusted for Potential Divestitures may not be comparable to
similarly titled measures reported by other companies.
|
|
|
|
FOOTNOTES TO UNAUDITED FINANCIAL STATEMENTS AND SELECTED
OPERATING DATA
|
(Continued)
|
|
|
|
The following table reconciles Adjusted EBITDA, Adjusted EBITDA,
Adjusted for Divestitures and Adjusted EBITDA, Adjusted for
Potential Divestitures, each as defined above, to net income (loss),
the most directly comparable U.S. GAAP financial measure, as derived
directly from the Company's consolidated and combined financial
statements for the respective periods (in thousands):
|
|
|
|
Three Months Ended December 31,
|
|
|
Year Ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(26,023
|
)
|
|
|
$
|
(90,092
|
)
|
|
|
$
|
(112,357
|
)
|
|
|
$
|
(345,197
|
)
|
Interest expense, net
|
|
|
|
31,873
|
|
|
|
|
28,684
|
|
|
|
|
122,077
|
|
|
|
|
113,440
|
|
Provision for (benefit from) income taxes
|
|
|
|
(21,779
|
)
|
|
|
|
(3,555
|
)
|
|
|
|
(21,865
|
)
|
|
|
|
(53,875
|
)
|
Depreciation and amortization
|
|
|
|
18,714
|
|
|
|
|
26,434
|
|
|
|
|
82,155
|
|
|
|
|
117,288
|
|
EBITDA
|
|
|
|
2,785
|
|
|
|
|
(38,529
|
)
|
|
|
|
70,010
|
|
|
|
|
(168,344
|
)
|
Legal, professional and settlement costs
|
|
|
|
(518
|
)
|
|
|
|
1,166
|
|
|
|
|
6,001
|
|
|
|
|
7,342
|
|
Impairment of long-lived assets and goodwill
|
|
|
|
25,820
|
|
|
|
|
41,470
|
|
|
|
|
47,281
|
|
|
|
|
291,870
|
|
Loss (gain) on sale of hospitals, net
|
|
|
|
(131
|
)
|
|
|
|
2,150
|
|
|
|
|
(5,243
|
)
|
|
|
|
2,150
|
|
Transaction costs related to the Spin-off
|
|
|
|
49
|
|
|
|
|
44
|
|
|
|
|
253
|
|
|
|
|
5,488
|
|
Post-spin headcount reductions
|
|
|
|
-
|
|
|
|
|
1,617
|
|
|
|
|
2,543
|
|
|
|
|
1,617
|
|
Change in estimate related to collectability of patient accounts
receivable (l)
|
|
|
|
21,000
|
|
|
|
|
22,799
|
|
|
|
|
21,000
|
|
|
|
|
22,799
|
|
Adjusted EBITDA
|
|
|
|
49,005
|
|
|
|
|
30,717
|
|
|
|
|
141,845
|
|
|
|
|
162,922
|
|
Negative EBITDA of divested hospitals
|
|
|
|
5,144
|
|
|
|
|
13,140
|
|
|
|
|
20,637
|
|
|
|
|
33,107
|
|
Adjusted EBITDA, Adjusted for Divestitures
|
|
|
|
54,149
|
|
|
|
|
43,857
|
|
|
|
|
162,482
|
|
|
|
|
196,029
|
|
Negative (Positive) EBITDA of potential divestitures
|
|
|
|
3,114
|
|
|
|
|
2,102
|
|
|
|
|
8,337
|
|
|
|
|
(8,232
|
)
|
Adjusted EBITDA, Adjusted for Potential Divestitures
|
|
|
$
|
57,263
|
|
|
|
$
|
45,959
|
|
|
|
$
|
170,819
|
|
|
|
$
|
187,797
|
|
|
|
|
(d)
|
|
The following table reconciles net income (loss) attributable to
Quorum Health Corporation, as reported and on a per share basis,
with the adjustments described herein:
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Year Ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
(per share - basic and diluted)
|
|
|
(per share - basic and diluted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to Quorum Health Corporation
stockholders, as reported
|
|
|
$
|
(0.95
|
)
|
|
|
$
|
(3.19
|
)
|
|
|
$
|
(4.06
|
)
|
|
|
$
|
(12.24
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal, professional and settlement costs
|
|
|
|
(0.01
|
)
|
|
|
|
0.04
|
|
|
|
|
0.18
|
|
|
|
|
0.22
|
|
Impairment of long-lived assets and goodwill
|
|
|
|
0.50
|
|
|
|
|
1.40
|
|
|
|
|
1.41
|
|
|
|
|
8.89
|
|
Loss (gain) on sale of hospitals, net
|
|
|
|
-
|
|
|
|
|
0.07
|
|
|
|
|
(0.16
|
)
|
|
|
|
0.07
|
|
Transaction costs related to the Spin-off
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
0.01
|
|
|
|
|
0.17
|
|
Post-spin headcount reductions
|
|
|
|
-
|
|
|
|
|
0.05
|
|
|
|
|
0.08
|
|
|
|
|
0.05
|
|
Change in estimate related to collectability of patient accounts
receivable
|
|
|
|
0.40
|
|
|
|
|
0.77
|
|
|
|
|
0.63
|
|
|
|
|
0.69
|
|
Net operating losses of divested hospitals
|
|
|
|
0.10
|
|
|
|
|
0.44
|
|
|
|
|
0.61
|
|
|
|
|
1.01
|
|
Earnings (loss) per share attributable to Quorum Health Corporation
stockholders, excluding adjustments
|
|
|
$
|
0.04
|
|
|
|
$
|
(0.42
|
)
|
|
|
$
|
(1.30
|
)
|
|
|
$
|
(1.14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOOTNOTES TO UNAUDITED FINANCIAL STATEMENTS AND SELECTED
OPERATING DATA
(Continued)
|
|
(e)
|
|
For comparative purposes, the Company used 28,412,054 shares as the
number of weighted-average shares to calculate basic and diluted
earnings per share for periods prior to the Spin-off. This number
represents the number of shares issued on the Spin-off date. Due to
the net loss attributable to Quorum Health Corporation in the three
months and year ended December 31, 2017, no incremental shares are
included in diluted earnings per share for these periods because the
effect of the incremental shares would be anti-dilutive. No
incremental shares were considered for any periods prior to the
Spin-off.
|
|
|
|
(f)
|
|
Licensed beds are the number of beds for which the appropriate state
agency licenses a hospital, regardless of whether the beds are
actually available for patient use.
|
|
|
|
(g)
|
|
Admissions represent the number of patients admitted for inpatient
services.
|
|
|
|
(h)
|
|
Adjusted admissions are computed by multiplying admissions by gross
patient revenues and then dividing that number by gross inpatient
revenues.
|
|
|
|
(i)
|
|
Emergency room visits represent the number of patients registered
and treated in the Company's emergency rooms.
|
|
|
|
(j)
|
|
Medicare case mix index is a relative value assigned to a
diagnosis-related group of patients that is used in determining the
allocation of resources necessary to treat the patients in that
group. Medicare case mix index is calculated as the average case mix
index for all Medicare admissions during the period.
|
|
|
|
(k)
|
|
Same-facility financial and operating data excludes hospitals that
were sold prior to and as of the end of the current reporting
period. Same-facility operating results have been adjusted to
exclude the operating results of Sandhills Regional Medical Center,
Barrow Regional Medical Center, Cherokee Medical Center, Trinity
Hospital of Augusta, Lock Haven Hospital, Sunbury Community Hospital
and L.V. Stabler Memorial Hospital, which were sold on December 1,
2016, December 31, 2016, March 31, 2017, June 30, 2017, September
30, 2017, September 30, 2017 and October 31, 2017, respectively.
|
|
|
|
(l)
|
|
As of December 31, 2017, the Company recorded a change in estimate
of $21.0 million to reduce the net realizable value of its patient
accounts receivable. During the fourth quarter of 2017, the Company
analyzed its self-pay patient accounts receivable at a more
comprehensive and disaggregated level and refined its estimate of
the collectability of the portion of self-pay accounts receivable
related to insured patients, primarily co-pays and deductibles. The
Company's analysis also included an evaluation of patient accounts
receivable retained in the divestitures of six of the Company's
seven divested hospitals. This adjustment negatively impacted the
provision for bad debts in the net operating revenues component of
the statements of income for both the three months and year ended
December 31, 2017.
|
|
|
|
|
|
As of December 31, 2016, the Company recorded a change in estimate
of $22.8 million to reduce the net realizable value of its patient
accounts receivable. This adjustment negatively impacted both
contractual allowances and the provision for bad debts in the net
operating revenues component of the statements of income for both
the three months and year ended December 31, 2016. The portion of
this change in estimate that impacted contractual allowances was
$11.4 million and related to increasing delays associated with
collections on Illinois Medicaid accounts receivable. The remainder
of the change in estimate, also $11.4 million, impacted the
provision for bad debts and related to an assessment of the
collectability of managed care and commercial accounts receivable
aged greater than one year based on a review of historical cash
collections for these accounts.
|
|
|
|
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
Section 21E of the Securities Exchange Act of 1934, as amended, and the
Private Securities Litigation Reform Act of 1995 that involve risk and
uncertainties. All statements in this press release other than
statements of historical fact, including statements regarding
projections, expected operating results, and other events that depend
upon or refer to future events or conditions or that include words such
as "expects," "anticipates," "intends," "plans," "believes,"
"estimates," "thinks," and similar expressions, are forward-looking
statements. Although the Company believes that these forward-looking
statements are based on reasonable assumptions, these assumptions are
inherently subject to significant economic and competitive uncertainties
and contingencies, which are difficult or impossible to predict
accurately and may be beyond the control of the Company. Accordingly,
the Company cannot give any assurance that its expectations will in fact
occur and cautions that actual results may differ materially from those
in the forward-looking statements. A number of factors could affect the
future results of the Company or the healthcare industry generally and
could cause the Company's expected results to differ materially from
those expressed in this press release.
These factors include, but are not limited to, the following:
-
general economic and business conditions, both nationally and in the
regions in which the Company operates;
-
risks associated with the Company's substantial indebtedness, leverage
and debt service obligations, including its ability to comply with its
debt covenants, including its senior credit facility, as amended;
-
the Company's ability to successfully make acquisitions or complete
divestitures and the timing thereof, its ability to complete any such
acquisitions or divestitures on desired terms or at all, and its
ability to realize the intended benefits from any such acquisitions or
divestitures;
-
changes in reimbursement methodologies and rates paid by federal or
state healthcare programs, including Medicare and Medicaid, or
commercial payors, and the timeliness of reimbursement payments,
including delays in certain states in which the Company operates;
-
the extent to which regulatory and economic changes occur in Illinois,
where a material portion of the Company's revenues are concentrated;
-
demographic changes;
-
the impact of changes made to the Affordable Care Act, the potential
for repeal or additional changes to the Affordable Care Act, its
implementation or its interpretation, as well as changes in other
federal, state or local laws or regulations affecting the healthcare
industry;
-
increases in the amount and risk of collectability of patient accounts
receivable, including lower collectability levels which may result
from, among other things, self-pay growth and difficulties in
collecting payments for which patients are responsible, including
co-pays and deductibles;
-
competition;
-
changes in medical or other technology;
-
any potential impairments in the carrying values of long-lived assets
and goodwill or the shortening of the useful lives of long-lived
assets;
-
the impact of certain outsourcing functions, and the ability of CHS,
as provider of the Company's billing and collection services pursuant
to the transition services agreements, to timely and appropriately
bill and collect;
-
the Company's ability to manage effectively its arrangements with
third-party vendors for key non-clinical business functions and
services;
-
the ability to achieve operating and financial targets and to control
the costs of providing services if patient volumes are lower than
expected;
-
the effects related to outbreaks of infectious diseases;
-
the Company's ability to attract and retain, at reasonable employment
costs, qualified personnel, key management, physicians, nurses and
other healthcare workers;
-
increases in wages as a result of inflation or competition for highly
technical positions and rising medical supply and drug costs due to
market pressure from pharmaceutical companies and new product releases;
-
the impact of seasonal or severe weather conditions or earthquakes;
-
the Company's ongoing ability to demonstrate meaningful use of
certified EHR technology and recognize income for the related Medicare
or Medicaid incentive payments, to the extent such payments have not
expired;
-
the efforts of healthcare insurers, providers, large employer groups
and others to contain healthcare costs, including the trend toward
treatment of patients in less acute or specialty healthcare settings
and the increased emphasis on value-based purchasing;
-
the failure to comply with governmental regulations;
-
the Company's ability, where appropriate, to enter into, maintain and
comply with provider arrangements with payors and the terms of these
arrangements, which may be impacted by the increasing consolidation of
health insurers and managed care companies and vertical integration
efforts involving payors and healthcare providers;
-
the potential adverse impact of known and unknown government
investigations, internal investigations, audits, and federal and state
false claims act litigation and other legal proceedings, including the
shareholder and creditor litigations against the Company and certain
of its officers and threats of litigation, as well as the significant
costs and attention from management required to address such matters;
-
liabilities and other claims asserted against the Company, including
self-insured malpractice claims;
-
the impact of cyber-attacks or security breaches;
-
the Company's ability to utilize its income tax loss carryforwards and
risks associated with the Tax Cuts and Jobs Act of 2017;
-
the Company's ability to maintain certain accreditations at its
existing facilities and any future facilities it may acquire;
-
the success and long-term viability of healthcare insurance exchanges
and potential changes to the beneficiary enrollment process;
-
the extent to which states support or implement changes to Medicaid
programs, utilize healthcare insurance exchanges or alter the
provision of healthcare to state residents through regulation or
otherwise;
-
the timing and amount of cash flows related to the California HQAF
Program, as well as the potential for retroactive adjustments for
prior year payments;
-
the effects related to the continued implementation of the
sequestration spending reductions and the potential for future deficit
reduction legislation;
-
changes in U.S. generally accepted accounting principles, including
the impacts of adopting newly issued accounting standards;
-
the availability and terms of capital to fund acquisitions,
replacement facilities or other capital expenditures;
-
the Company's ability to obtain adequate levels of professional and
general liability and workers' compensation liability insurance; and
-
the other risk factors set forth in the Company's other public filings
with the Securities and Exchange Commission.
Although the Company believes that these forward-looking statements are
based on reasonable assumptions, these assumptions are inherently
subject to significant regulatory, economic and competitive
uncertainties and contingencies, which are difficult or impossible to
predict accurately and may be beyond its control. Accordingly, the
Company cannot give any assurance that its expectations will in fact
occur and cautions that actual results may differ materially from those
in the forward-looking statements. Given these uncertainties,
prospective investors are cautioned not to place undue reliance on these
forward-looking statements. These forward-looking statements are made as
of the date of this filing. The Company undertakes no obligation to
revise or update any forward-looking statements, or to make any other
forward-looking statements, whether as a result of new information,
future events or otherwise.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180315006430/en/
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