Note 6 - Non-operating Income

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Other Nonoperating Income and Expense [Text Block]

Note 6 – Non–Operating Income

Non–operating income includes equity in earnings of unconsolidated investments, dividends and other realized gains and losses on sales of marketable securities, and interest income.

	Three Months Ended September 30				Nine Months Ended September 30
(in thousands)	2020		2019		2020		2019
Equity in earnings of unconsolidated investments	$	3,019	$	2,747	$	8,448	$	7,548
Dividends and net realized gains on sales of securities		2,084		2,049		5,997		5,911
Interest income		1,375		1,867		4,426		5,502
Gains on acquisitions of equity method investments		-		-		1,707		1,975
Total non-operating income	$	6,478	$	6,663	$	20,578	$	20,936

Caris HealthCare, L.P. ("Caris")

Our most significant equity method investment is a 75.1% non–controlling ownership interest in Caris, a business that specializes in hospice care services. The carrying value of our investment is $35,035,000 and $36,673,000 at September 30, 2020 and December 31, 2019, respectively. The carrying amounts are included in investments in unconsolidated companies in the consolidated balance sheets. Summarized financial information of Caris for the nine months ended September 30, 2020 and 2019 is provided below (in thousands):

	Nine Months Ended September 30
	2020		2019
Net revenue	$	48,690	$	45,554
Expenses		37,753		35,410
Net income	$	10,937	$	10,144

Gains on Acquisitions of Equity Method Investments

Effective February 27, 2020, the Company expanded its controlled operations through an acquisition of the remaining ownership interest of a 166-bed skilled nursing facility in Knoxville, Tennessee. We previously held a 25% noncontrolling interest in the facility and accounted for the investment as an equity method investment. The operating results of the business have been included in the accompanying interim condensed consolidated financial statements since the remaining ownership interest acquisition date.

Upon acquiring the remaining ownership interest, the Company recorded and increased its previously held equity interest up to fair value as of the acquisition date. This remeasurement of our equity interest at fair value resulted in a gain of $1,707,000. The gain was recorded in "Non-operating income" in the interim condensed consolidated statements of operations.  Additionally, the excess of the fair value over the amounts assigned to the assets and liabilities of the investee resulted in recording goodwill in the amount of $346,000 on the acquisition date.

Effective June 1, 2019, the Company expanded its controlled operations through an acquisition of the remaining ownership interest of a 60-bed memory care facility in St. Peters, Missouri. We previously held a noncontrolling interest in the facility and accounted for the investment as an equity method investment. The operating results of the business have been included in the accompanying interim condensed consolidated financial statements since the remaining ownership interest acquisition date.

Upon acquiring the remaining ownership interest, the Company recorded and increased its previously held equity interest up to fair value as of the acquisition date. This remeasurement of our equity interest at fair value resulted in a gain of $1,975,000 during the second quarter of 2019. The gain was recorded in "Non-operating income" in the interim condensed consolidated statements of operations.