[November 08, 2017] |
|
Quorum Health Corporation Announces Third Quarter 2017 Operating Results
Quorum Health Corporation (NYSE: QHC) (the "Company") today announced
its operating and financial results for the three and nine months ended
September 30, 2017.
Net operating revenues for the three months ended September 30, 2017
decreased $44.6 million to $499.3 million, compared to $543.9 million
for the same period in 2016. Net operating revenues for the quarter
decreased $32.5 million from the two hospitals divested in December 2016
and the four hospitals divested in the first nine months of 2017, and
decreased $11.5 million resulting from the Company's inability to accrue
in the 2017 period for the California Hospital Quality Assurance Fee
("HQAF") program revenues for the 2017-2019 program period pending
approval by Centers for Medicare & Medicaid Services ("CMS"). Excluding
these amounts, net operating revenues decreased $0.6 million for the
three months ended September 30, 2017 compared to the same period in
2016. Net loss attributable to Quorum Health Corporation for the three
months ended September 30, 2017 was $(29.2) million, or $(1.03) per
share, compared to $(7.0) million, or $(0.24) per share, for the same
period in 2016. The net loss for the three months ended September 30,
2017 was impacted by an $8.8 million decrease, net of provider taxes,
related to the California HQAF program and $5.3 million of impairment
charges 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 September 30, 2017 reflect a 0.2%
decrease in admissions and a 0.5% increase in adjusted admissions
compared to the same period in 2016. Excluding the six divested
hospitals and the eight hospitals intended for divestiture as of
September 30, 2017, admissions and adjusted admissions increased 1.3%
and 3.2%, respectively, for these same periods.
Adjusted EBITDA for the three months ended September 30, 2017 was $32.3
million, compared to $46.7 million for the same period in 2016. Adjusted
EBITDA was negatively impacted by the Company's inability to accrue for
the California HQAF program in the 2017 period, as stated above.
Adjusted EBITDA for the three months ended September 30, 2016 included
$8.8 million related to this program. The divested hospitals negatively
impacted EBITDA by $4.7 million and $7.0 million for the three months
ended September 30, 2017 and 2016, respectively. As a result, Adjusted
EBITDA, Adjusted for Divestitures, was $36.9 million and $53.8 million
for the three months ended September 30, 2017 and 2016, respectively.
Net operating revenues for the nine months ended September 30, 2017
decreased $66.1 million to $1,557.1 million, compared to $1,623.2
million for the same period in 2016. Net operating revenues decreased
$63.6 million related to the two hospitals divested in December 2016 and
the four hospitals divested in the first nine months of 2017, and
decreased $33.9 million due to the inability to accrue revenues related
to the California HQAF program. Excluding these amounts, net operating
revenues increased $31.4 million for the nine months ended September 30,
2017 compared to the same period in 2016, primarily due to favorable
volume and payor rate variances. Net loss attributable to Quorum Health
Corporation for the nine months ended September 30, 2017 was $(87.4)
million, or $(3.11) per share, compared to $(257.0) million, or $(9.05)
per share, for the same period in 2016. The 2017 period included
impairment charges of $21.5 million related to hospitals held for sale
or identified for potential divestiture and a net gain of $5.1 million
on the sale of hospitals. The 2016 period included $250.4 million of
impairment charges, $5.4 million of transaction costs related to the
Spin-off and $25.7 million in revenues, net of provider taxes, related
to the California HQAF program. On a same-facility basis, the Company's
operating results for the nine months ended September 30, 2017 reflect a
0.9% decrease in admissions and a 0.2% increase in adjusted admissions
compared to the same period in 2016. Excluding divested hospitals and
hospitals intended for divestiture, admissions and adjusted admissions
increased 0.7% and 2.0%, respectively, for these same periods.
Adjusted EBITDA for the nine months ended September 30, 2017 was $92.8
million, compared to $132.2 million for the same period in 2016.
Adjusted EBITDA was negatively impacted by the Company's inability to
accrue for the California HQAF program in the 2017 period, as stated
above. Adjusted EBITDA for the nine months ended September 30, 2016
included $25.7 million related to the California HQAF program. The
divested hospitals negatively impacted EBITDA by $13.6 million and $18.5
million for the nine months ended September 30, 2017 and 2016,
respectively. As a result, Adjusted EBITDA, Adjusted for Divestitures,
was $106.4 million and $150.7 million for the nine months ended
September 30, 2017 and 2016, respectively.
The Company had combined proceeds from these six divestitures of $43.1
million, of which $40.4 million was utilized to pay down the Company's
term loan under its credit facility. In addition, in October 2017, the
Company received $30.9 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 secured debt.
On October 31, 2017, the Company completed the divestiture of L.V.
Stabler Memorial Hospital, located in Greenville, Alabama, and received
proceeds of $2.8 million. The Company paid down an additional $18.2
million of secured debt in October and November of 2017.
Commenting on the results, Thomas D. Miller, President and Chief
Executive Officer of Quorum Health Corporation, said, "We continue our
efforts to improve our core operations as we restructure our hospital
portfolio. As we execute our strategy to divest underperforming
hospitals, we have completed six transactions through the third quarter
with another already completed in the fourth quarter. We expect more
divestiture completions in 2018 as we remain dedicated to reducing our
debt, managing our costs and increasing our profitability."
Financial Outlook
The Company's updated financial outlook for the year ending December 31,
2017 is discussed below. These projections update selected guidance
issued on August 9, 2017 and 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 2017 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, 2017 to range from $2.055 billion to $2.065 billion. The Company
expects Adjusted EBITDA for the year ending December 31, 2017 to range
from $140 million to $150 million and Adjusted EBITDA, Adjusted for
Divestitures through December 31, 2017 to range from $160 million to
$170 million. The guidance for Adjusted EBITDA gives effect to: (i) the
approval of the California Department of Health Care Services' HQAF
Program by CMS, which we estimate to be approved in the fourth quarter
of 2017 at approximately $22 million, approximately $13 million less
than 2016, (ii) the reduction of approximately $7 million in electronic
health records incentives earned in 2017 compared to the 2016 amounts,
(iii) the inclusion of approximately $11 million to $13 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, 2017 includes the same assumptions above, in addition to excluding
the negative EBITDA of hospitals divested and expected to be divested
through December 31, 2017, including the completed divestiture of L.V.
Stabler Memorial Hospital on October 31, 2017.
A reconciliation of the Company's projected 2017 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 adjustments
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 September 30, 2017, the Company owned or leased 32
hospitals in rural and mid-sized markets located across 15 states and
licensed for 3,051 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 Thursday,
November 9, 2017, at 10:00 a.m. Central time, 11:00 a.m. Eastern, to
review operating and financial results for the three and nine months
ended September 30, 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 September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
% of
|
|
|
|
|
|
% of
|
|
|
|
$ Amount
|
|
|
Revenues
|
|
|
$ Amount
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues, net of contractual allowances and discounts (a)
|
|
|
$
|
557,847
|
|
|
|
|
|
|
$
|
612,551
|
|
|
|
|
Provision for bad debts
|
|
|
|
58,545
|
|
|
|
|
|
|
|
68,612
|
|
|
|
|
Net operating revenues
|
|
|
|
499,302
|
|
|
|
100.0
|
%
|
|
|
|
543,939
|
|
|
|
100.0
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits(b)
|
|
|
|
251,780
|
|
|
|
50.4
|
%
|
|
|
|
266,812
|
|
|
|
49.1
|
%
|
Supplies
|
|
|
|
58,657
|
|
|
|
11.7
|
%
|
|
|
|
64,013
|
|
|
|
11.8
|
%
|
Other operating expenses (a)
|
|
|
|
145,357
|
|
|
|
29.2
|
%
|
|
|
|
154,878
|
|
|
|
28.3
|
%
|
Depreciation and amortization
|
|
|
|
20,735
|
|
|
|
4.2
|
%
|
|
|
|
28,234
|
|
|
|
5.2
|
%
|
Rent
|
|
|
|
12,377
|
|
|
|
2.5
|
%
|
|
|
|
12,823
|
|
|
|
2.4
|
%
|
Electronic health records incentives earned
|
|
|
|
(287
|
)
|
|
|
(0.1
|
)%
|
|
|
|
(1,336
|
)
|
|
|
(0.2
|
)%
|
Legal, professional and settlement costs
|
|
|
|
2,050
|
|
|
|
0.4
|
%
|
|
|
|
488
|
|
|
|
0.1
|
%
|
Impairment of long-lived assets and goodwill
|
|
|
|
5,261
|
|
|
|
1.1
|
%
|
|
|
|
-
|
|
|
|
-
|
%
|
Loss (gain) on sale of hospitals, net
|
|
|
|
79
|
|
|
|
-
|
%
|
|
|
|
-
|
|
|
|
-
|
%
|
Transaction costs related to the Spin-off
|
|
|
|
173
|
|
|
|
-
|
%
|
|
|
|
532
|
|
|
|
0.1
|
%
|
Total operating costs and expenses
|
|
|
|
496,182
|
|
|
|
99.4
|
%
|
|
|
|
526,444
|
|
|
|
96.8
|
%
|
Income (loss) from operations
|
|
|
|
3,120
|
|
|
|
0.6
|
%
|
|
|
|
17,495
|
|
|
|
3.2
|
%
|
Interest expense, net
|
|
|
|
32,216
|
|
|
|
6.4
|
%
|
|
|
|
28,028
|
|
|
|
5.1
|
%
|
Income (loss) before income taxes
|
|
|
|
(29,096
|
)
|
|
|
(5.8
|
)%
|
|
|
|
(10,533
|
)
|
|
|
(1.9
|
)%
|
Provision for (benefit from) income taxes
|
|
|
|
(542
|
)
|
|
|
(0.1
|
)%
|
|
|
|
(4,081
|
)
|
|
|
(0.7
|
)%
|
Net income (loss) (c)
|
|
|
|
(28,554
|
)
|
|
|
(5.7
|
)%
|
|
|
|
(6,452
|
)
|
|
|
(1.2
|
)%
|
Less: Net income (loss) attributable to noncontrolling interests
|
|
|
|
637
|
|
|
|
0.1
|
%
|
|
|
|
507
|
|
|
|
0.1
|
%
|
Net income (loss) attributable to Quorum Health Corporation
|
|
|
$
|
(29,191
|
)
|
|
|
(5.8
|
)%
|
|
|
$
|
(6,959
|
)
|
|
|
(1.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to Quorum Health Corporation
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (d)
|
|
|
$
|
(1.03
|
)
|
|
|
|
|
|
$
|
(0.24
|
)
|
|
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (e)
|
|
|
|
28,245,833
|
|
|
|
|
|
|
|
28,413,532
|
|
|
|
|
|
|
QUORUM HEALTH CORPORATION
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF
INCOME (LOSS)
(In Thousands, Except Earnings per Share and Shares)
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
% of
|
|
|
|
|
|
% of
|
|
|
|
$ Amount
|
|
|
Revenues
|
|
|
$ Amount
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues, net of contractual allowances and discounts (a)
|
|
|
$
|
1,731,007
|
|
|
|
|
|
|
$
|
1,825,198
|
|
|
|
|
Provision for bad debts
|
|
|
|
173,919
|
|
|
|
|
|
|
|
201,971
|
|
|
|
|
Net operating revenues
|
|
|
|
1,557,088
|
|
|
|
100.0
|
%
|
|
|
|
1,623,227
|
|
|
|
100.0
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits(b)
|
|
|
|
781,691
|
|
|
|
50.2
|
%
|
|
|
|
788,560
|
|
|
|
48.6
|
%
|
Supplies
|
|
|
|
186,591
|
|
|
|
12.0
|
%
|
|
|
|
191,810
|
|
|
|
11.8
|
%
|
Other operating expenses (a)
|
|
|
|
466,394
|
|
|
|
29.9
|
%
|
|
|
|
482,526
|
|
|
|
29.8
|
%
|
Depreciation and amortization
|
|
|
|
63,441
|
|
|
|
4.1
|
%
|
|
|
|
90,854
|
|
|
|
5.6
|
%
|
Rent
|
|
|
|
36,631
|
|
|
|
2.4
|
%
|
|
|
|
37,917
|
|
|
|
2.3
|
%
|
Electronic health records incentives earned
|
|
|
|
(4,516
|
)
|
|
|
(0.3
|
)%
|
|
|
|
(9,791
|
)
|
|
|
(0.6
|
)%
|
Legal, professional and settlement costs
|
|
|
|
6,519
|
|
|
|
0.4
|
%
|
|
|
|
6,176
|
|
|
|
0.4
|
%
|
Impairment of long-lived assets and goodwill
|
|
|
|
21,461
|
|
|
|
1.4
|
%
|
|
|
|
250,400
|
|
|
|
15.4
|
%
|
Loss (gain) on sale of hospitals, net
|
|
|
|
(5,112
|
)
|
|
|
(0.3
|
)%
|
|
|
|
-
|
|
|
|
-
|
%
|
Transaction costs related to the Spin-off
|
|
|
|
204
|
|
|
|
-
|
%
|
|
|
|
5,444
|
|
|
|
0.3
|
%
|
Total operating costs and expenses
|
|
|
|
1,553,304
|
|
|
|
99.8
|
%
|
|
|
|
1,843,896
|
|
|
|
113.6
|
%
|
Income (loss) from operations
|
|
|
|
3,784
|
|
|
|
0.2
|
%
|
|
|
|
(220,669
|
)
|
|
|
(13.6
|
)%
|
Interest expense, net
|
|
|
|
90,204
|
|
|
|
5.8
|
%
|
|
|
|
84,756
|
|
|
|
5.2
|
%
|
Income (loss) before income taxes
|
|
|
|
(86,420
|
)
|
|
|
(5.6
|
)%
|
|
|
|
(305,425
|
)
|
|
|
(18.8
|
)%
|
Provision for (benefit from) income taxes
|
|
|
|
(86
|
)
|
|
|
(0.1
|
)%
|
|
|
|
(50,320
|
)
|
|
|
(3.1
|
)%
|
Net income (loss) (c)
|
|
|
|
(86,334
|
)
|
|
|
(5.5
|
)%
|
|
|
|
(255,105
|
)
|
|
|
(15.7
|
)%
|
Less: Net income (loss) attributable to noncontrolling interests
|
|
|
|
1,048
|
|
|
|
0.1
|
%
|
|
|
|
1,917
|
|
|
|
0.1
|
%
|
Net income (loss) attributable to Quorum Health Corporation
|
|
|
$
|
(87,382
|
)
|
|
|
(5.6
|
)%
|
|
|
$
|
(257,022
|
)
|
|
|
(15.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to Quorum Health Corporation
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (d)
|
|
|
$
|
(3.11
|
)
|
|
|
|
|
|
$
|
(9.05
|
)
|
|
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (e)
|
|
|
|
28,068,085
|
|
|
|
|
|
|
|
28,412,552
|
|
|
|
|
|
|
QUORUM HEALTH CORPORATION
UNAUDITED CONSOLIDATED AND COMBINED SELECTED OPERATING DATA
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
Variance
|
|
|
% Variance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated and combined:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of licensed beds at end of period (f)
|
|
|
3,051
|
|
|
3,578
|
|
|
(527
|
)
|
|
|
(14.7
|
)%
|
Admissions (g)
|
|
|
21,646
|
|
|
23,503
|
|
|
(1,857
|
)
|
|
|
(7.9
|
)%
|
Adjusted admissions (h)
|
|
|
54,350
|
|
|
59,333
|
|
|
(4,983
|
)
|
|
|
(8.4
|
)%
|
Emergency room visits (i)
|
|
|
163,986
|
|
|
184,166
|
|
|
(20,180
|
)
|
|
|
(11.0
|
)%
|
Medicare case mix index (j)
|
|
|
1.43
|
|
|
1.37
|
|
|
0.06
|
|
|
|
4.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-facility: (k)
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of licensed beds at end of period (f)
|
|
|
3,051
|
|
|
3,051
|
|
|
-
|
|
|
|
-
|
%
|
Admissions (g)
|
|
|
21,155
|
|
|
21,195
|
|
|
(40
|
)
|
|
|
(0.2
|
)%
|
Adjusted admissions (h)
|
|
|
52,755
|
|
|
52,471
|
|
|
284
|
|
|
|
0.5
|
%
|
Emergency room visits (i)
|
|
|
158,337
|
|
|
162,608
|
|
|
(4,271
|
)
|
|
|
(2.6
|
)%
|
Medicare case mix index (j)
|
|
|
1.43
|
|
|
1.38
|
|
|
0.05
|
|
|
|
3.6
|
%
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
Variance
|
|
|
% Variance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated and combined:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of licensed beds at end of period (f)
|
|
|
3,051
|
|
|
3,578
|
|
|
(527
|
)
|
|
|
(14.7
|
)%
|
Admissions (g)
|
|
|
67,572
|
|
|
72,113
|
|
|
(4,541
|
)
|
|
|
(6.3
|
)%
|
Adjusted admissions (h)
|
|
|
166,841
|
|
|
178,062
|
|
|
(11,221
|
)
|
|
|
(6.3
|
)%
|
Emergency room visits (i)
|
|
|
504,500
|
|
|
551,401
|
|
|
(46,901
|
)
|
|
|
(8.5
|
)%
|
Medicare case mix index (j)
|
|
|
1.42
|
|
|
1.37
|
|
|
0.05
|
|
|
|
3.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-facility: (k)
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of licensed beds at end of period (f)
|
|
|
3,051
|
|
|
3,051
|
|
|
-
|
|
|
|
-
|
%
|
Admissions (g)
|
|
|
64,347
|
|
|
64,906
|
|
|
(559
|
)
|
|
|
(0.9
|
)%
|
Adjusted admissions (h)
|
|
|
157,440
|
|
|
157,171
|
|
|
269
|
|
|
|
0.2
|
%
|
Emergency room visits (i)
|
|
|
475,062
|
|
|
487,286
|
|
|
(12,224
|
)
|
|
|
(2.5
|
)%
|
Medicare case mix index (j)
|
|
|
1.42
|
|
|
1.38
|
|
|
0.04
|
|
|
|
2.9
|
%
|
|
|
QUORUM HEALTH CORPORATION
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS
(In Thousands, Except Par Value per Share and Shares)
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
15,736
|
|
|
|
$
|
25,455
|
|
Patient accounts receivable, net of allowance for doubtful accounts
of $337,141 and $360,796 at September 30, 2017 and December 31,
2016, respectively
|
|
|
|
393,559
|
|
|
|
|
380,685
|
|
Inventories
|
|
|
|
55,125
|
|
|
|
|
58,124
|
|
Prepaid expenses
|
|
|
|
24,393
|
|
|
|
|
23,028
|
|
Due from third-party payors
|
|
|
|
98,778
|
|
|
|
|
116,235
|
|
Current assets of hospitals held for sale
|
|
|
|
9,202
|
|
|
|
|
1,502
|
|
Other current assets
|
|
|
|
40,920
|
|
|
|
|
57,942
|
|
Total current assets
|
|
|
|
637,713
|
|
|
|
|
662,971
|
|
Property and equipment, at cost
|
|
|
|
1,419,827
|
|
|
|
|
1,519,975
|
|
Less: Accumulated depreciation and amortization
|
|
|
|
(717,754
|
)
|
|
|
|
(786,075
|
)
|
Total property and equipment, net
|
|
|
|
702,073
|
|
|
|
|
733,900
|
|
Goodwill
|
|
|
|
409,229
|
|
|
|
|
416,833
|
|
Intangible assets, net
|
|
|
|
70,993
|
|
|
|
|
84,982
|
|
Long-term assets of hospitals held for sale
|
|
|
|
12,782
|
|
|
|
|
6,851
|
|
Other long-term assets
|
|
|
|
105,405
|
|
|
|
|
88,833
|
|
Total assets
|
|
|
$
|
1,938,195
|
|
|
|
$
|
1,994,370
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Current maturities of long-term debt
|
|
|
$
|
1,887
|
|
|
|
$
|
5,683
|
|
Accounts payable
|
|
|
|
157,102
|
|
|
|
|
169,684
|
|
Accrued liabilities:
|
|
|
|
|
|
|
Accrued salaries and benefits
|
|
|
|
81,300
|
|
|
|
|
98,803
|
|
Accrued interest
|
|
|
|
27,350
|
|
|
|
|
19,915
|
|
Due to third-party payors
|
|
|
|
37,311
|
|
|
|
|
42,537
|
|
Current liabilities of hospitals held for sale
|
|
|
|
2,767
|
|
|
|
|
492
|
|
Other current liabilities
|
|
|
|
39,447
|
|
|
|
|
53,268
|
|
Total current liabilities
|
|
|
|
347,164
|
|
|
|
|
390,382
|
|
Long-term debt
|
|
|
|
1,276,874
|
|
|
|
|
1,241,142
|
|
Deferred income tax liabilities, net
|
|
|
|
31,087
|
|
|
|
|
31,474
|
|
Other long-term liabilities
|
|
|
|
145,559
|
|
|
|
|
108,996
|
|
Total liabilities
|
|
|
|
1,800,684
|
|
|
|
|
1,771,994
|
|
Redeemable noncontrolling interests
|
|
|
|
1,578
|
|
|
|
|
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; 30,249,502 shares issued and outstanding at September
30, 2017, and 29,482,050 shares issued and outstanding at December
31, 2016
|
|
|
|
3
|
|
|
|
|
3
|
|
Additional paid-in capital
|
|
|
|
546,609
|
|
|
|
|
537,911
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
(2,395
|
)
|
|
|
|
(2,760
|
)
|
Accumulated deficit
|
|
|
|
(421,408
|
)
|
|
|
|
(334,026
|
)
|
Total Quorum Health Corporation stockholders' equity
|
|
|
|
122,809
|
|
|
|
|
201,128
|
|
Nonredeemable noncontrolling interests
|
|
|
|
13,124
|
|
|
|
|
14,441
|
|
Total equity
|
|
|
|
135,933
|
|
|
|
|
215,569
|
|
Total liabilities and equity
|
|
|
$
|
1,938,195
|
|
|
|
$
|
1,994,370
|
|
|
|
QUORUM HEALTH CORPORATION
UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF
CASH FLOWS
(In Thousands)
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(28,554
|
)
|
|
|
$
|
(6,452
|
)
|
|
|
$
|
(86,334
|
)
|
|
|
$
|
(255,105
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
20,735
|
|
|
|
|
28,234
|
|
|
|
|
63,441
|
|
|
|
|
90,854
|
|
Non-cash interest expense, net
|
|
|
|
1,793
|
|
|
|
|
1,257
|
|
|
|
|
3,223
|
|
|
|
|
1,986
|
|
Provision for (benefit from) deferred income taxes
|
|
|
|
(642
|
)
|
|
|
|
(4,081
|
)
|
|
|
|
(387
|
)
|
|
|
|
(51,532
|
)
|
Stock-based compensation expense
|
|
|
|
2,374
|
|
|
|
|
2,781
|
|
|
|
|
7,702
|
|
|
|
|
4,678
|
|
Impairment of long-lived assets and goodwill
|
|
|
|
5,261
|
|
|
|
|
-
|
|
|
|
|
21,461
|
|
|
|
|
250,400
|
|
Loss (gain) on sale of hospitals, net
|
|
|
|
79
|
|
|
|
|
-
|
|
|
|
|
(5,112
|
)
|
|
|
|
-
|
|
Changes in reserves for self-insurance claims, net of payments
|
|
|
|
4,999
|
|
|
|
|
11,208
|
|
|
|
|
16,253
|
|
|
|
|
28,099
|
|
Changes in reserves for legal, professional and settlement costs,
net of payments
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(3,651
|
)
|
|
|
|
4,642
|
|
Other non-cash expense (income), net
|
|
|
|
233
|
|
|
|
|
54
|
|
|
|
|
238
|
|
|
|
|
(533
|
)
|
Changes in operating assets and liabilities, net of acquisitions and
divestitures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Patient accounts receivable, net
|
|
|
|
9,156
|
|
|
|
|
(9,586
|
)
|
|
|
|
(21,193
|
)
|
|
|
|
(16,797
|
)
|
Due from and due to third-party payors, net
|
|
|
|
(3,176
|
)
|
|
|
|
(7,528
|
)
|
|
|
|
12,231
|
|
|
|
|
(2,173
|
)
|
Inventories, prepaid expenses and other current assets
|
|
|
|
9,756
|
|
|
|
|
(14,689
|
)
|
|
|
|
2,024
|
|
|
|
|
(12,412
|
)
|
Accounts payable and accrued liabilities
|
|
|
|
(12,002
|
)
|
|
|
|
(2,505
|
)
|
|
|
|
(10,710
|
)
|
|
|
|
26,624
|
|
Long-term assets and liabilities, net
|
|
|
|
(268
|
)
|
|
|
|
880
|
|
|
|
|
1,603
|
|
|
|
|
(7,965
|
)
|
Net cash provided by (used in) operating activities
|
|
|
|
9,744
|
|
|
|
|
(427
|
)
|
|
|
|
789
|
|
|
|
|
60,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures for property and equipment
|
|
|
|
(11,525
|
)
|
|
|
|
(23,241
|
)
|
|
|
|
(50,667
|
)
|
|
|
|
(56,448
|
)
|
Capital expenditures for software
|
|
|
|
(3,005
|
)
|
|
|
|
(1,454
|
)
|
|
|
|
(6,174
|
)
|
|
|
|
(5,258
|
)
|
Acquisitions, net of cash acquired
|
|
|
|
(33
|
)
|
|
|
|
(26
|
)
|
|
|
|
(1,920
|
)
|
|
|
|
(26
|
)
|
Proceeds from the sale of hospitals
|
|
|
|
9,084
|
|
|
|
|
-
|
|
|
|
|
29,240
|
|
|
|
|
-
|
|
Other investing activities
|
|
|
|
-
|
|
|
|
|
(346
|
)
|
|
|
|
-
|
|
|
|
|
1,056
|
|
Net cash provided by (used in) investing activities
|
|
|
|
(5,479
|
)
|
|
|
|
(25,067
|
)
|
|
|
|
(29,521
|
)
|
|
|
|
(60,676
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings (repayments) of revolving credit facilities, net
|
|
|
|
(5,000
|
)
|
|
|
|
-
|
|
|
|
|
45,000
|
|
|
|
|
-
|
|
Borrowings of long-term debt
|
|
|
|
175
|
|
|
|
|
36
|
|
|
|
|
247
|
|
|
|
|
1,255,556
|
|
Repayments of long-term debt
|
|
|
|
(4,670
|
)
|
|
|
|
(3,165
|
)
|
|
|
|
(16,517
|
)
|
|
|
|
(7,442
|
)
|
Increase (decrease) in Due to Parent, net
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
25,183
|
|
Payments of debt issuance costs
|
|
|
|
(181
|
)
|
|
|
|
(1,136
|
)
|
|
|
|
(3,119
|
)
|
|
|
|
(29,139
|
)
|
Cash paid to Parent related to the Spin-off
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(1,217,336
|
)
|
Cancellation of restricted stock awards for payroll tax withholdings
on vested shares
|
|
|
|
(14
|
)
|
|
|
|
(39
|
)
|
|
|
|
(1,503
|
)
|
|
|
|
(12
|
)
|
Cash distributions to noncontrolling investors
|
|
|
|
-
|
|
|
|
|
(181
|
)
|
|
|
|
(3,851
|
)
|
|
|
|
(2,828
|
)
|
Purchases of shares from noncontrolling investors
|
|
|
|
(1,244
|
)
|
|
|
|
(88
|
)
|
|
|
|
(1,244
|
)
|
|
|
|
(100
|
)
|
Net cash provided by (used in) financing activities
|
|
|
|
(10,934
|
)
|
|
|
|
(4,573
|
)
|
|
|
|
19,013
|
|
|
|
|
23,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
|
(6,669
|
)
|
|
|
|
(30,067
|
)
|
|
|
|
(9,719
|
)
|
|
|
|
23,972
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
22,405
|
|
|
|
|
55,145
|
|
|
|
|
25,455
|
|
|
|
|
1,106
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
15,736
|
|
|
|
$
|
25,078
|
|
|
|
$
|
15,736
|
|
|
|
$
|
25,078
|
|
|
|
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 September 30, 2016. The
Company recognized $33.9 million of net operating revenues less $8.2
million of provider taxes for the nine months ended September 30,
2016. There were no comparative amounts recorded in the 2017
periods, as discussed below.
|
|
|
|
|
|
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 has not yet issued approvals, including waiver of certain
healthcare-tax related rules, for Phase V of the program. Consistent
with the first four phases of the HQAF program, the Company does not
recognize any revenues under the new program until CMS completes the
approval process. HQAF funding levels are based in part on Medi-Cal
utilization. As a result, changes in coverage of individuals under
the Medi-Cal program could affect the revenues and cash flows
related to the Company's California hospitals under future phases of
the HQAF program. Accordingly, the Company is unable to predict the
ultimate amount of revenues and cash flows its California hospitals
may receive from or the timing of CMS' approval of the extended HQAF
program, including its impact on the Company's 2017 net operating
results. The Company has included an estimated amount in its 2017
projections based on currently available and historical information.
|
|
|
|
(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 and transaction costs related to
the Spin-off. 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 consolidated 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 December 2016 and in
the first nine months of 2017. The Company has presented Adjusted
EBITDA and Adjusted EBITDA, Adjusted for 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 and Adjusted EBITDA, Adjusted for 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 and Adjusted EBITDA, Adjusted for 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 and Adjusted EBITDA, Adjusted for Divestitures may
not be comparable to similarly titled measures reported by other
companies.
|
|
|
|
|
|
The following table reconciles Adjusted EBITDA and Adjusted
EBITDA, Adjusted for 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 September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(28,554
|
)
|
|
|
$
|
(6,452
|
)
|
|
|
$
|
(86,334
|
)
|
|
|
$
|
(255,105
|
)
|
Interest expense, net
|
|
|
|
32,216
|
|
|
|
|
28,028
|
|
|
|
|
90,204
|
|
|
|
|
84,756
|
|
Provision for (benefit from) income taxes
|
|
|
|
(542
|
)
|
|
|
|
(4,081
|
)
|
|
|
|
(86
|
)
|
|
|
|
(50,320
|
)
|
Depreciation and amortization
|
|
|
|
20,735
|
|
|
|
|
28,234
|
|
|
|
|
63,441
|
|
|
|
|
90,854
|
|
EBITDA
|
|
|
|
23,855
|
|
|
|
|
45,729
|
|
|
|
|
67,225
|
|
|
|
|
(129,815
|
)
|
Legal, professional and settlement costs
|
|
|
|
2,050
|
|
|
|
|
488
|
|
|
|
|
6,519
|
|
|
|
|
6,176
|
|
Impairment of long-lived assets and goodwill
|
|
|
|
5,261
|
|
|
|
|
-
|
|
|
|
|
21,461
|
|
|
|
|
250,400
|
|
Loss (gain) on sale of hospitals, net
|
|
|
|
79
|
|
|
|
|
-
|
|
|
|
|
(5,112
|
)
|
|
|
|
-
|
|
Transaction costs related to the Spin-off
|
|
|
|
173
|
|
|
|
|
532
|
|
|
|
|
204
|
|
|
|
|
5,444
|
|
Post-spin headcount reductions
|
|
|
|
850
|
|
|
|
|
-
|
|
|
|
|
2,543
|
|
|
|
|
-
|
|
Adjusted EBITDA
|
|
|
|
32,268
|
|
|
|
|
46,749
|
|
|
|
|
92,840
|
|
|
|
|
132,205
|
|
Negative EBITDA of divested hospitals
|
|
|
|
4,670
|
|
|
|
|
7,023
|
|
|
|
|
13,563
|
|
|
|
|
18,468
|
|
Adjusted EBITDA, Adjusted for Divestitures
|
|
|
$
|
36,938
|
|
|
|
$
|
53,772
|
|
|
|
$
|
106,403
|
|
|
|
$
|
150,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
(per share - basic and diluted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to Quorum Health Corporation
stockholders, as reported
|
|
|
$
|
(1.03
|
)
|
|
|
$
|
(0.24
|
)
|
|
|
$
|
(3.11
|
)
|
|
|
$
|
(9.05
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal, professional and settlement costs
|
|
|
|
0.07
|
|
|
|
|
0.01
|
|
|
|
|
0.23
|
|
|
|
|
0.18
|
|
Impairment of long-lived assets and goodwill
|
|
|
|
0.18
|
|
|
|
|
-
|
|
|
|
|
0.76
|
|
|
|
|
7.36
|
|
Loss (gain) on sale of hospitals, net
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Transaction costs related to the Spin-off
|
|
|
|
0.01
|
|
|
|
|
0.01
|
|
|
|
|
0.01
|
|
|
|
|
0.16
|
|
Post-spin headcount reductions
|
|
|
|
0.03
|
|
|
|
|
-
|
|
|
|
|
0.09
|
|
|
|
|
-
|
|
Net operating losses of divested hospitals
|
|
|
|
0.16
|
|
|
|
|
0.15
|
|
|
|
|
0.48
|
|
|
|
|
0.54
|
|
Earnings (loss) per share attributable to Quorum Health Corporation
stockholders, excluding adjustments
|
|
|
$
|
(0.58
|
)
|
|
|
$
|
(0.07
|
)
|
|
|
$
|
(1.54
|
)
|
|
|
$
|
(0.81
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
and nine months ended September 30, 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 is 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 inpatients 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 and Sunbury Community
Hospital which were sold on December 1, 2016, December 31, 2016,
March 31, 2017, June 30, 2017, September 30, 2017 and September 30,
2017, respectively.
|
|
|
|
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 ability to achieve operating and financial targets and to control
the costs of providing services if patient volumes are lower than
expected;
-
the impact of significant changes to the Affordable Care Act, its
implementation or its interpretation, efforts to repeal the Affordable
Care Act, as well as changes in other federal, state or local laws or
regulations affecting the healthcare industry;
-
the success and long-term viability of healthcare insurance exchanges,
which may be impacted by whether a sufficient number of payors
participate, the availability of cost-sharing subsidies and actions
taken by the current administration and Congress affecting the
Affordable Care Act;
-
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 extent to which regulatory and economic changes occur in Illinois,
where a material portion of the Company's revenues are concentrated;
-
demographic changes;
-
the failure to comply with governmental regulations;
-
the impact of certain outsourcing functions, and the ability of
Community Health Systems, Inc., as provider of the Company's billing
and collection services pursuant to the transition services
agreements, to timely and appropriately bill and collect;
-
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;
-
the ability, where appropriate, to enter into, maintain and comply
with provider arrangements with payors and the terms of these
arrangements, which may be further impacted by the increasing
consolidation of health insurers and managed care companies;
-
changes in reimbursement rates paid by federal or state healthcare
programs, including Medicare and Medicaid, or commercial payors, and
the timeliness of reimbursement payments;
-
the timing of any approval by CMS of Phase V of the California HQAF
Program, the recognition of any revenues from the California program,
and the timing and amount of any related cash flows, as well as the
potential for retroactive adjustments for prior year payments;
-
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 effects related to the continued implementation of the
sequestration spending reductions and the potential for future deficit
reduction legislation;
-
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 in states that have not
expanded Medicaid and difficulties in collecting payments for which
patients are responsible, including co-pays and deductibles;
-
the efforts of healthcare insurers, providers 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 Company's ongoing ability to demonstrate meaningful use of
certified electronic health records technology and recognize income
for the related Medicare or Medicaid incentive payments, to the extent
such payments have not expired;
-
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;
-
liabilities and other claims asserted against the Company, including
self-insured malpractice claims;
-
competition;
-
the ability to attract and retain, at reasonable employment costs,
qualified personnel, key management, physicians, nurses and other
healthcare workers;
-
changes in medical or other technology;
-
changes in U.S. generally accepted accounting principles, including
the impact of adopting newly issued accounting standards;
-
the availability and terms of capital to fund acquisitions,
replacement facilities or other capital expenditures;
-
the ability to successfully make acquisitions or complete divestitures
and the timing thereof, the ability to complete any such acquisitions
or divestitures on desired terms or at all, and the ability to realize
the intended benefits from any such acquisitions or divestitures;
-
the impact of seasonal or severe weather conditions or earthquakes;
-
the ability to obtain adequate levels of professional and general
liability and workers' compensation liability insurance;
-
the effects related to outbreaks of infectious diseases;
-
the impact of cyber-attacks or security breaches;
-
the ability to manage effectively the Company's arrangements with
third-party vendors for key non-clinical business functions and
services;
-
the ability to maintain certain accreditations at the Company's
existing facilities and any future facilities the Company may acquire;
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/20171108006638/en/
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