SEC Filings

10-Q
ENVISION HEALTHCARE CORP filed this Form 10-Q on 08/08/2017
Entire Document
 
Item 1. Financial Statements - (continued)

(15) Segment Reporting

Prior to the classification of the medical transportation business into discontinued operations, the Company operated in three major lines of business, physician services, medical transportation and ambulatory services, which had been identified as its operating and reportable segments. Subsequent to the discontinued operations classification, the Company has aligned financial results into two operating and reportable segments: physician services and ambulatory services. The physician services segment includes the Company’s hospital-based and non-hospital-based physician services business. The ambulatory services segment includes the Company’s ambulatory surgery business, which acquires, develops, owns and operates ASCs and surgical hospitals in partnership with physicians and health systems.

The Company’s financial information by segment is prepared on an internal management reporting basis and includes allocations of corporate expenses. This financial information is used by the chief operating decision maker to allocate resources and assess the performance of the segments. The Company’s segments have been defined based on the separate financial information that is regularly produced and reviewed by the Company’s chief operating decision maker which is its Chief Executive Officer.

The following table presents financial information for each reportable segment (in millions):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Net Revenue:
 
 
 
 
 
 
 
Physician Services(1)
$
1,628.5

 
$
438.7

 
$
3,191.2

 
$
856.3

Ambulatory Services
318.5

 
319.8

 
634.4

 
626.9

Total
$
1,947.0

 
$
758.5

 
$
3,825.6

 
$
1,483.2

 
 
 
 
 
 
 
 
Adjusted EBITDA:
 
 
 
 
 
 
 
Physician Services(1) (2)
$
193.3

 
$
87.5

 
$
343.4

 
$
154.0

Ambulatory Services(2)
60.5

 
61.7

 
120.7

 
115.3

Total
$
253.8

 
$
149.2

 
$
464.1

 
$
269.3

 
 
 
 
 
 
 
 
Adjusted EBITDA:
$
253.8

 
$
149.2

 
$
464.1

 
$
269.3

Net earnings attributable to noncontrolling interests
51.6

 
57.1

 
105.7

 
110.9

Interest expense, net
(56.1
)
 
(31.9
)
 
(108.5
)
 
(62.7
)
Depreciation and amortization
(71.6
)
 
(30.1
)
 
(142.9
)
 
(59.1
)
Share-based compensation
(10.7
)
 
(7.9
)
 
(25.3
)
 
(15.1
)
Transaction and integration costs
(27.4
)
 
(5.1
)
 
(48.9
)
 
(6.5
)
Impairment charges

 

 
(0.3
)
 

Net gain on disposals and deconsolidations, net of noncontrolling interests

 
2.6

 
0.3

 
2.6

Net change in fair value of contingent consideration

 
2.6

 

 
2.6

Earnings before income taxes
$
139.6

 
$
136.5

 
$
244.2

 
$
242.0

 
 
 
 
 
 
 
 
Acquisition and Capital Expenditures:
 
 
 
 
 
 
 
Physician Services (1)
$
402.9

 
$
265.0

 
$
468.9

 
$
275.3

Ambulatory Services
23.3

 
35.0

 
51.1

 
43.4

Total
$
426.2

 
$
300.0

 
$
520.0

 
$
318.7

 
(1)
On December 1, 2016, the Company completed the Merger. Accordingly, historical amounts from EHH for periods prior to that date are not included.
(2)
For the three and six months ended June 30, 2017 and on a before tax basis, approximately $15.1 million and $29.6 million, respectively, of general corporate expenses, including allocations for corporate salaries and stock based compensation, general and administrative costs and depreciation, were removed from the medical transportation business and reallocated to the Company's remaining segments. This removal of corporate expenses resulted in a reduction of Adjusted EBITDA in the physician services and ambulatory services segments of $6.5 million and $2.0 million, respectively, and $13.4 million and $4.0 million, respectively, for the three and six months ended June 30, 2017.


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