0001193125-18-236651.txt : 20180802 0001193125-18-236651.hdr.sgml : 20180802 20180802163055 ACCESSION NUMBER: 0001193125-18-236651 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 49 CONFORMED PERIOD OF REPORT: 20180630 FILED AS OF DATE: 20180802 DATE AS OF CHANGE: 20180802 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDNAX, INC. CENTRAL INDEX KEY: 0000893949 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOSPITALS [8060] IRS NUMBER: 263667538 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12111 FILM NUMBER: 18988804 BUSINESS ADDRESS: STREET 1: 1301 CONCORD TERRACE CITY: SUNRISE STATE: FL ZIP: 33323 BUSINESS PHONE: 9543840175 MAIL ADDRESS: STREET 1: 1301 CONCORD TERRACE CITY: SUNRISE STATE: FL ZIP: 33323 FORMER COMPANY: FORMER CONFORMED NAME: PEDIATRIX MEDICAL GROUP INC DATE OF NAME CHANGE: 19950801 10-Q 1 d558671d10q.htm FORM 10-Q Form 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-12111

 

 

MEDNAX, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Florida   26-3667538

(State or other jurisdiction of

Incorporation or organization)

 

(I.R.S. Employer

Identification No.)

1301 Concord Terrace

Sunrise, Florida

  33323
(Address of principal executive offices)   (Zip Code)

(954) 384-0175

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer   ☐  (Do not check if a smaller reporting company)    Smaller reporting company  
     Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

On July 27, 2018, the registrant had outstanding 93,466,848 shares of Common Stock, par value $.01 per share.

 

 

 


Table of Contents

MEDNAX, INC.

INDEX

 

         Page  
PART I - FINANCIAL INFORMATION   

Item 1.

  Financial Statements      3  
  Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017 (Unaudited)      3  
  Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)      4  
  Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2018 and 2017 (Unaudited)      5  
  Notes to Condensed Consolidated Financial Statements (Unaudited)      6  

Item 2.

  Management’s Discussion and Analysis of Financial Condition and Results of Operations      12  

Item 3.

  Quantitative and Qualitative Disclosures About Market Risk      20  

Item 4.

  Controls and Procedures      20  
PART II - OTHER INFORMATION   

Item 1.

  Legal Proceedings      21  

Item 1A.

  Risk Factors      21  

Item 2.

  Unregistered Sales of Equity Securities and Use of Proceeds      21  

Item 5.

  Other Information      22  

Item 6.

  Exhibits      23  
SIGNATURES      24  

 

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PART I - FINANCIAL INFORMATION

 

Item 1.

Financial Statements

MEDNAX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(Unaudited)

 

     June 30, 2018      December 31, 2017  
ASSETS      

Current assets:

     

Cash and cash equivalents

   $ 38,056      $ 60,200  

Restricted cash

     19,000        —    

Short-term investments

     9,902        10,292  

Accounts receivable, net

     527,997        503,999  

Prepaid expenses

     15,752        15,584  

Other current assets

     14,223        37,160  
  

 

 

    

 

 

 

Total current assets

     624,930        627,235  

Restricted cash

     1,000        20,000  

Investments

     90,186        80,682  

Property and equipment, net

     131,922        123,536  

Goodwill

     4,304,740        4,283,963  

Intangible assets, net

     614,226        639,928  

Other assets

     92,634        91,934  
  

 

 

    

 

 

 

Total assets

   $ 5,859,638      $ 5,867,278  
  

 

 

    

 

 

 
LIABILITIES AND SHAREHOLDERS’ EQUITY      

Current liabilities:

     

Accounts payable and accrued expenses

   $ 358,255      $ 438,017  

Current portion of long-term debt and capital lease obligations

     860        1,401  

Income taxes payable

     52,098        92,007  
  

 

 

    

 

 

 

Total current liabilities

     411,213        531,425  

Line of credit

     1,149,500        1,110,500  

Long-term debt and capital lease obligations, net

     741,612        740,923  

Long-term professional liabilities

     207,687        212,274  

Deferred income taxes

     126,505        147,797  

Other liabilities

     36,199        57,905  
  

 

 

    

 

 

 

Total liabilities

     2,672,716        2,800,824  
  

 

 

    

 

 

 

Commitments and contingencies

     

Shareholders’ equity:

     

Preferred stock; $.01 par value; 1,000 shares authorized; none issued

     —          —    

Common stock; $.01 par value; 200,000 shares authorized; 93,374 and 93,721 shares issued and outstanding, respectively

     934        937  

Additional paid-in capital

     1,032,573        1,017,328  

Retained earnings

     2,153,415        2,048,189  
  

 

 

    

 

 

 

Total shareholders’ equity

     3,186,922        3,066,454  
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 5,859,638      $ 5,867,278  
  

 

 

    

 

 

 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

 

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MEDNAX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(Unaudited)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2018     2017     2018     2017  

Net revenue

   $ 915,918     $ 842,944     $ 1,817,775     $ 1,678,541  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Practice salaries and benefits

     620,980       561,418       1,252,810       1,133,803  

Practice supplies and other operating expenses

     31,833       30,872       62,488       58,668  

General and administrative expenses

     107,908       103,015       216,684       206,780  

Depreciation and amortization

     26,518       25,735       52,681       51,349  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     787,239       721,040       1,584,663       1,450,600  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     128,679       121,904       233,112       227,941  

Investment and other income

     1,202       365       2,666       941  

Interest expense

     (21,604     (18,535     (41,539     (36,287

Equity in earnings of unconsolidated affiliates

     1,257       689       2,782       1,486  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating expenses

     (19,145     (17,481     (36,091     (33,860
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     109,534       104,423       197,021       194,081  

Income tax provision

     (30,122     (40,725     (54,181     (75,692
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 79,412     $ 63,698     $ 142,840     $ 118,389  
  

 

 

   

 

 

   

 

 

   

 

 

 

Per common and common equivalent share data:

        

Net income:

        

Basic

   $ 0.85     $ 0.69     $ 1.54     $ 1.28  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.85     $ 0.69     $ 1.53     $ 1.27  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares:

        

Basic

     92,987       92,181       92,922       92,270  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     93,529       92,812       93,516       92,977  
  

 

 

   

 

 

   

 

 

   

 

 

 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

 

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MEDNAX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

     Six Months Ended June 30,  
     2018     2017  

Cash flows from operating activities:

    

Net income

   $ 142,840     $ 118,389  

Adjustments to reconcile net income to net cash from operating activities:

    

Depreciation and amortization

     52,681       51,349  

Amortization of premiums, discounts and issuance costs

     2,212       2,740  

Stock-based compensation expense

     20,399       14,781  

Deferred income taxes

     (21,211     18,454  

Other

     (2,148     (3,407

Changes in assets and liabilities:

    

Accounts receivable

     (23,998     18,361  

Prepaid expenses and other current assets

     (1,178     (666

Other long term assets

     (317     (3,425

Accounts payable and accrued expenses

     (100,442     (87,862

Income taxes payable

     (39,909     (15,900

Payments of contingent consideration liabilities

     (65     (299

Long-term professional liabilities

     (5,863     1,016  

Other liabilities

     (1,397     2,282  
  

 

 

   

 

 

 

Net cash provided from operating activities

     21,604       115,813  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Acquisition payments, net of cash acquired

     (25,575     (113,746

Purchases of investments

     (15,884     (15,324

Proceeds from maturities of investments

     5,995       7,290  

Purchases of property and equipment

     (26,274     (21,909

Proceeds from sale of controlling interest in assets

     22,764       —    

Other

     —         3,868  
  

 

 

   

 

 

 

Net cash used in investing activities

     (38,974     (139,821
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Borrowings on credit agreement

     821,500       821,000  

Payments on credit agreement

     (782,500     (754,000

Payments of contingent consideration liabilities

     (367     (1,961

Payments on capital lease obligations

     (636     (998

Proceeds from issuance of common stock

     9,389       13,990  

Repurchases of common stock

     (52,160     (70,192

Contribution from noncontrolling interests

     —         894  
  

 

 

   

 

 

 

Net cash (used in) provided from financing activities

     (4,774     8,733  
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (22,144     (15,275

Cash, cash equivalents and restricted cash at beginning of period

     80,200       55,698  
  

 

 

   

 

 

 

Cash, cash equivalents and restricted cash at end of period

   $ 58,056     $ 40,423  
  

 

 

   

 

 

 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

 

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MEDNAX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(Unaudited)

 

1.

Basis of Presentation and New Accounting Pronouncements:

The accompanying unaudited Condensed Consolidated Financial Statements of the Company and the notes thereto presented in this Form 10-Q have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements, and do not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results of interim periods. The financial statements include all the accounts of MEDNAX, Inc. and its consolidated subsidiaries (collectively, “MDX”) together with the accounts of MDX’s affiliated business corporations or professional associations, professional corporations, limited liability companies and partnerships (the “affiliated professional contractors”). Certain subsidiaries of MDX have contractual management arrangements with its affiliated professional contractors, which are separate legal entities that provide physician services in certain states and Puerto Rico. The terms “MEDNAX” and the “Company” refer collectively to MEDNAX, Inc., its subsidiaries and the affiliated professional contractors.

The Company is a party to a joint venture in which it owns a 37.5% economic interest. In January 2018, the Company entered into an additional joint venture in which it owns a 49.0% economic interest. The Company accounts for these joint ventures under the equity method of accounting because the Company exercises significant influence over, but does not control, these entities. See Note 5 for more information regarding the January 2018 joint venture.

The consolidated results of operations for the interim periods presented are not necessarily indicative of the results to be experienced for the entire fiscal year. In addition, the accompanying unaudited Condensed Consolidated Financial Statements and the notes thereto should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in the Company’s most recent Annual Report on Form 10-K (the “Form 10-K”).

Recently Adopted Accounting Pronouncements

In May 2014, the accounting guidance related to revenue recognition was amended to outline a single, comprehensive model for accounting for revenue from contracts with customers. The core principle of the new accounting guidance is to require an entity to recognize as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods or services as it transfers control to its customers. The guidance became effective for the Company on January 1, 2018 and was adopted on a full retrospective basis. The primary change for healthcare providers under the new guidance is the requirement to report the allowance for uncollectibles associated with patient responsibility amounts as a reduction in net revenue as opposed to bad debt expense, a component of operating expenses. The Company has historically included the allowance for uncollectibles associated with patient responsibility amounts with its allowance for contractual adjustments as a reduction in net revenue as such amounts are not material. Accordingly, the adoption of this guidance did not have an impact on our Consolidated Financial Statements, other than increased financial statement disclosures. The guidance requires increased disclosures, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. See Note 4 for more information.

New Accounting Pronouncements

In February 2016, the accounting guidance related to leases was issued that will require an entity to recognize leased assets and the rights and obligations created by those leased assets on the balance sheet and to disclose key information about the entity’s leasing arrangements. This guidance will become effective for the Company on January 1, 2019, with early adoption permitted. The Company expects that the adoption of this guidance will have a material impact on its Consolidated Balance Sheets and related disclosures, resulting from the recognition of significant right of use assets and related liabilities primarily related to its operating lease arrangements for space in hospitals and certain other facilities for its business and medical offices. The Company has completed the review of its existing lease portfolio and is accumulating all of the necessary information required to properly account for leases under the new guidance. The Company has selected a software application, inclusive of a lease administration module and an accounting module, and has begun the implementation process. The Company is in the process of designing workflows, business processes and internal controls surrounding the lease accounting process in order to meet the reporting and disclosure requirements. The Company’s implementation and continued evaluation of this new guidance and its impacts are expected to continue through the third quarter of 2018.

 

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2.

Cash Equivalents and Investments:

As of June 30, 2018 and December 31, 2017, the Company’s cash equivalents consisted entirely of money market funds totaling $2.4 million and $9.2 million, respectively.

Investments consist of municipal debt securities, federal home loan securities and certificates of deposit. Investments with remaining maturities of less than one year are classified as short-term investments. Investments classified as long-term have maturities of one year to six years.

The Company intends and has the ability to hold its securities to maturity, and therefore carries such investments at amortized cost in accordance with the provisions of the accounting guidance for investments in debt and equity securities.

Investments held at June 30, 2018 and December 31, 2017 are summarized as follows (in thousands):

 

     June 30, 2018      December 31, 2017  
     Short-Term      Long-Term      Short-Term      Long-Term  

Municipal debt securities

   $ 8,432      $ 48,613      $ 8,312      $ 46,195  

Federal home loan securities

     —          36,393        1,000        30,322  

Certificates of deposit

     1,470        5,180        980        4,165  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 9,902      $ 90,186      $ 10,292      $ 80,682  
  

 

 

    

 

 

    

 

 

    

 

 

 

Contractual maturities of long-term investments are summarized as follows (in thousands):

 

     June 30, 2018      December 31, 2017  

Due after one year through five years

   $ 89,186      $ 78,561  

Due after five years through six years

     1,000        2,121  
  

 

 

    

 

 

 
   $ 90,186      $ 80,682  
  

 

 

    

 

 

 

 

3.

Fair Value Measurements:

In accordance with the accounting guidance for fair value measurements and disclosures, the Company carries its money market funds included in cash and cash equivalents at fair value. In accordance with the three-tier fair value hierarchy under this guidance, the Company determined the fair value using quoted market prices, a Level 1 input as defined under the accounting guidance for fair value measurements. At June 30, 2018 and December 31, 2017, the Company’s money market funds had a carrying amount of $2.4 million and $9.2 million, respectively.

The Company also carries the cash surrender value of life insurance related to its deferred compensation arrangements at fair value. The investments underlying the life insurance contracts consist primarily of exchange-traded equity securities and mutual funds with quoted prices in active markets. In accordance with the three-tier fair value hierarchy, the Company determined the fair value using the cash surrender value of the life insurance, a Level 2 input as defined under the accounting guidance for fair value measurements. At June 30, 2018 and December 31, 2017, the Company’s cash surrender value of life insurance had a carrying amount of $15.7 million and $15.6 million, respectively.

In addition, the Company carries its contingent consideration liabilities related to acquisitions at fair value. In accordance with the three-tier fair value hierarchy, the Company determined the fair value of its contingent consideration liabilities using the income approach with assumed discount rates and payment probabilities. The income approach uses Level 3, or unobservable inputs as defined under the accounting guidance for fair value measurements. At June 30, 2018 and December 31, 2017, the Company’s contingent consideration liabilities had a fair value of $30.7 million and $30.5 million, respectively.

The carrying amounts of cash equivalents, short-term investments, accounts receivable and accounts payable and accrued expenses approximate fair value due to the short maturities of the respective instruments. The carrying values of long-term investments, line of credit and capital lease obligations approximate fair value. If the Company’s investments were measured at fair value, they would be categorized as Level 2 in the fair value hierarchy. If the Company’s line of credit was measured at fair value, it would be categorized as Level 2 in the fair value hierarchy. The estimated fair value of the Company’s 5.25% senior unsecured notes due 2023 was $735.0 million and $763.1 million, at June 30, 2018 and December 31, 2017, respectively, and was estimated using trading prices on such dates as Level 2 inputs to estimate fair value.

 

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4.

Accounts Receivable and Net Revenue:

Accounts receivable, net consists of the following (in thousands):

 

     June 30, 2018      December 31, 2017  

Gross accounts receivable

   $ 1,918,787      $ 1,790,034  

Allowance for contractual adjustments and uncollectibles

     (1,390,790      (1,286,035
  

 

 

    

 

 

 
   $ 527,997      $ 503,999  
  

 

 

    

 

 

 

Patient service revenue is recognized at the time services are provided by the Company’s affiliated physicians. The Company’s performance obligations related to the delivery of services to patients are satisfied at the time of service. Accordingly, there are no performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period with respect to patient service revenue. Almost all of the Company’s patient service revenue is reimbursed by government-sponsored healthcare programs and third-party insurance payors. Payments for services rendered to the Company’s patients are generally less than billed charges. The Company monitors its revenue and receivables from these sources and records an estimated contractual allowance to properly account for the anticipated differences between billed and reimbursed amounts.

Accordingly, patient service revenue is presented net of an estimated provision for contractual adjustments and uncollectibles. The Company estimates allowances for contractual adjustments and uncollectibles on accounts receivable based upon historical experience and other factors, including days sales outstanding (“DSO”) for accounts receivable, evaluation of expected adjustments and delinquency rates, past adjustments and collection experience in relation to amounts billed, an aging of accounts receivable, current contract and reimbursement terms, changes in payor mix and other relevant information. Contractual adjustments result from the difference between the physician rates for services performed and the reimbursements by government-sponsored healthcare programs and third-party insurance payors for such services.

Collection of patient service revenue the Company expects to receive is normally a function of providing complete and correct billing information to the government-sponsored healthcare programs and third-party insurance payors within the various filing deadlines and typically occurs within 30 to 60 days of billing.

Some of the Company’s hospital agreements require hospitals to pay the Company administrative fees. Some agreements provide for fees if the hospital does not generate sufficient patient volume in order to guarantee that the Company receives a specified minimum revenue level. The Company also receives fees from hospitals for administrative services performed by its affiliated physicians providing medical director or other services at the hospital.

In addition, the Company generates revenue through its management services organization for services rendered under various coding and billing contracts. Contract terms are specific to each customer and may include a combination of a flat fee for coding of medical charts, a fixed fee per patient visit as well as a percentage of cash collections received by the providers. Revenue for flat and fixed fee arrangements is recognized in the month the coding occurs or the patient visit occurs. Revenue for percentage fees are recognized in the month that cash is collected for customers from payors.

The following table summarizes the Company’s net revenue by category (in thousands):

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2018      2017      2018      2017  

Net patient service revenue

   $ 763,667      $ 708,739      $ 1,520,040    $ 1,414,192

Hospital contract administrative fees

     95,534        75,604        186,773        147,869  

Management services and other

     56,717        58,601        110,962        116,480  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 915,918      $ 842,944      $ 1,817,775      $ 1,678,541  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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The approximate percentage of net patient service revenue by type of payor was as follows:

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2018     2017     2018     2017  

Contracted managed care

     70     71     70     71

Government

     25       24       25     24  

Other third-parties

     4       4       4       4  

Private-pay patients

     1       1       1       1  
  

 

 

   

 

 

   

 

 

   

 

 

 
     100     100     100     100
  

 

 

   

 

 

   

 

 

   

 

 

 

 

5.

Business Acquisitions, Joint Ventures and Goodwill:

During the six months ended June 30, 2018, the Company completed the acquisition of five physician group practices, including two radiology practices, one neonatology practice and two pediatric subspecialty practices. The acquisition-date fair value of the total consideration for the five acquisitions was $24.4 million. These acquisitions expanded the Company’s national network of physician practices. In connection with these acquisitions, the Company recorded goodwill of $15.5 million and other intangible assets consisting primarily of physician and hospital agreements of $8.9 million.

In addition, during the six months ended June 30, 2018, in connection with certain prior-period acquisitions, the Company paid $0.4 million for contingent consideration and $1.2 million for purchase consideration that had been held back pending satisfaction of certain conditions. All amounts except for the accretion recorded during 2018 were accrued as of December 31, 2017.

In connection with certain prior-period acquisitions, the Company also recorded a decrease in current assets of $1.2 million, a decrease in noncurrent assets of $1.5 million, an increase in current liabilities of $1.4 million and an increase in noncurrent liabilities of $1.2 million, with a corresponding net increase in goodwill of $5.3 million for measurement-period adjustments resulting from the finalization of acquisition accounting. The Company expects that $18.2 million of the goodwill recorded during the six months ended June 30, 2018 will be deductible for tax purposes.

In January 2018, the Company completed the sale of a controlling interest and the contribution of remaining assets to a joint venture related to the $46.0 million of assets held for sale at December 31, 2017. The Company accounts for its 49.0% economic interest in the joint venture as an equity method investment. The investment in this joint venture is included in other assets as presented in the Company’s Condensed Consolidated Balance Sheet.

The Company’s management services reporting unit has experienced lower operating results than previously forecasted primarily due to a slower rate of new customer bookings and an increase in customer termination activity. The Company continues to believe that the fair value of the reporting unit exceeds the carrying value, and accordingly the goodwill assigned to the management services reporting unit is not impaired Although the Company believes that the current assumptions and estimates used in its goodwill analysis are reasonable, supportable and appropriate, continued efforts to maintain or improve the performance of this business could be impacted by unfavorable or unforeseen changes which could impact the existing assumptions used in the impairment analysis. Various factors could reasonably be expected to unfavorably impact existing assumptions, primarily delays in new customer bookings and the related delay in revenue from new customers, increases in customer termination activity or increases in operating costs. Accordingly, there can be no assurance that the estimates and assumptions made for the purposes of the goodwill impairment analysis will prove to be accurate predictions of future performance. The carrying value of the Company’s management services reporting unit included goodwill of $321.6 million as of June 30, 2018. The Company will continue to closely monitor the performance of the management services reporting unit. If an impairment loss is required in a future period, it could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows and the trading price of the Company’s securities.

 

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6.

Accounts Payable and Accrued Expenses:

Accounts payable and accrued expenses consist of the following (in thousands):

 

     June 30, 2018      December 31, 2017  

Accounts payable

   $ 28,377      $ 34,632  

Accrued salaries and bonuses

     144,911        225,429  

Accrued payroll taxes and benefits

     71,379        75,672  

Accrued professional liabilities

     35,253        37,912  

Accrued contingent consideration

     26,783        6,259  

Accrued interest

     5,077        4,495  

Other accrued expenses

     46,475        53,618  
  

 

 

    

 

 

 
   $ 358,255      $ 438,017  
  

 

 

    

 

 

 

The net decrease in accrued salaries and bonuses of $80.5 million from December 31, 2017 to June 30, 2018 is primarily due to the payment of performance-based incentive compensation, principally to the Company’s physicians, partially offset by performance-based incentive compensation accrued during the six months ended June 30, 2018. A majority of the Company’s payments for performance-based incentive compensation is paid annually during the first quarter.

 

7.

Common and Common Equivalent Shares:

Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share is calculated by dividing net income by the weighted average number of common and potential common shares outstanding during the period. Potential common shares consist of outstanding restricted stock, deferred stock and stock options and is calculated using the treasury stock method.

The calculation of shares used in the basic and diluted net income per common share calculation for the three and six months ended June 30, 2018 and 2017 is as follows (in thousands):

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2018      2017      2018      2017  

Weighted average number of common shares outstanding

     92,987        92,181        92,922        92,270  

Weighted average number of dilutive common share equivalents

     542        631        594        707  
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average number of common and common equivalent shares outstanding

     93,529        92,812        93,516        92,977  
  

 

 

    

 

 

    

 

 

    

 

 

 

Antidilutive securities not included in the diluted net income per common share calculation

     392        8        197        5  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

8.

Stock Incentive Plans and Stock Purchase Plans:

The Company’s Amended and Restated 2008 Incentive Compensation Plan, as amended (the “Amended and Restated 2008 Incentive Plan”) provides for grants of stock options, stock appreciation rights, restricted stock, deferred stock, and other stock-related awards and performance awards that may be settled in cash, stock or other property.

Under the Amended and Restated 2008 Incentive Plan, options to purchase shares of common stock may be granted at a price not less than the fair market value of the shares on the date of grant. The options must be exercised within 10 years from the date of grant and generally become exercisable on a pro rata basis over a three-year period from the date of grant. The Company issues new shares of its common stock upon exercise of its stock options. Restricted stock awards generally vest over periods of three years upon the fulfillment of specified service-based conditions and in certain instances performance-based conditions. Deferred stock awards generally vest upon the satisfaction of specified performance-based conditions and service-based conditions. The Company recognizes compensation expense related to its restricted stock and deferred stock awards ratably over the corresponding vesting periods. During the six months ended June 30, 2018, the Company granted 597,550 shares of restricted stock to its employees and non-employee directors under the Amended and Restated 2008 Incentive Plan. At June 30, 2018, the Company had 2.3 million shares available for future grants and awards under its Amended and Restated 2008 Incentive Plan.

Under the Company’s 1996 Non-Qualified Employee Stock Purchase Plan, as amended (the “ESPP”), employees are permitted to purchase the Company’s common stock at 85% of market value on January 1st, April 1st, July 1st and October 1st of each year. Under the Company’s 2015 Non-Qualified Stock Purchase Plan (the “SPP”), certain eligible non-employee service providers are permitted to purchase the Company’s common stock at 90% of market value on January 1st, April 1st, July 1st and October 1st of each year.

 

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Each of the ESPP and the SPP provide for the issuance of an aggregate of 2.6 million shares of the Company’s common stock less the number of shares of common stock purchased under the other plan. The Company recognizes stock-based compensation expense for the discount received by participating employees and non-employee service providers. During the six months ended June 30, 2018, 182,888 shares in aggregate were issued under the ESPP and SPP. At June 30, 2018, the Company had approximately 1.8 million shares in aggregate reserved for issuance under the ESPP and SPP.

During the three and six months ended June 30, 2018 and 2017, the Company recognized stock-based compensation expense of $10.5 million and $20.4 million, and $7.3 million and $14.8 million, respectively.

 

9.

Common Stock Repurchase Program:

In July 2013, the Company’s Board of Directors authorized the repurchase of shares of the Company’s common stock up to an amount sufficient to offset the dilutive impact from the issuance of shares under the Company’s equity compensation programs. The share repurchase program allows the Company to make open market purchases from time-to-time based on general economic and market conditions and trading restrictions. The repurchase program also allows for the repurchase of shares of the Company’s common stock to offset the dilutive impact from the issuance of shares, if any, related to the Company’s acquisition program. During the six months ended June 30, 2018, the Company repurchased 1.2 million shares of its common stock for $52.2 million, inclusive of 54,909 shares withheld to satisfy minimum statutory withholding obligations of $2.5 million in connection with the vesting of restricted stock and stock option exercises during the three months ended June 30, 2018. The shares repurchased by the Company during the second quarter of 2018 completed the repurchases under the program with respect to issuances of shares under the Company’s equity compensation programs during 2018. The Company intends to utilize various methods to effect any future share repurchases, including, among others, open market purchases and accelerated share repurchase programs. The amount and timing of repurchases will depend upon several factors, including general economic and market conditions and trading restrictions.

 

10.

Commitments and Contingencies:

The Company expects that audits, inquiries and investigations from government authorities and agencies will occur in the ordinary course of business. Such audits, inquiries and investigations and their ultimate resolutions, individually or in the aggregate, could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows and the trading price of its securities. The Company has not included an accrual for these matters as of June 30, 2018 in its Condensed Consolidated Financial Statements, as the variables affecting any potential eventual liability depend on the currently unknown facts and circumstances that arise out of, and are specific to, any particular future audit, inquiry and investigation and cannot be reasonably estimated at this time.

In the ordinary course of business, the Company becomes involved in pending and threatened legal actions and proceedings, most of which involve claims of medical malpractice related to medical services provided by the Company’s affiliated physicians. The Company’s contracts with hospitals generally require the Company to indemnify them and their affiliates for losses resulting from the negligence of the Company’s affiliated physicians. The Company may also become subject to other lawsuits which could involve large claims and significant costs. The Company believes, based upon a review of pending actions and proceedings, that the outcome of such legal actions and proceedings will not have a material adverse effect on its business, financial condition, results of operations, cash flows and the trading price of its securities. The outcome of such actions and proceedings, however, cannot be predicted with certainty and an unfavorable resolution of one or more of them could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows and the trading price of its securities.

Although the Company currently maintains liability insurance coverage intended to cover professional liability and certain other claims, the Company cannot assure that its insurance coverage will be adequate to cover liabilities arising out of claims asserted against it in the future where the outcomes of such claims are unfavorable. With respect to professional liability risk, the Company generally self-insures a portion of this risk through its wholly owned captive insurance subsidiary. Liabilities in excess of the Company’s insurance coverage, including coverage for professional liability and certain other claims, could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows and the trading price of its securities.

 

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Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion highlights the principal factors that have affected our financial condition and results of operations, as well as our liquidity and capital resources, for the periods described. This discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the notes thereto included in this Quarterly Report. In addition, reference is made to our audited consolidated financial statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our most recent Annual Report on Form 10-K. As used in this Quarterly Report, the terms “MEDNAX”, the “Company”, “we”, “us” and “our” refer to the parent company, MEDNAX, Inc., a Florida corporation, and the consolidated subsidiaries through which its businesses are actually conducted (collectively, “MDX”), together with MDX’s affiliated business corporations or professional associations, professional corporations, limited liability companies and partnerships (“affiliated professional contractors”). Certain subsidiaries of MDX have contracts with our affiliated professional contractors, which are separate legal entities that provide physician services in certain states and Puerto Rico. The following discussion contains forward-looking statements. Please see the Company’s most recent Annual Report on Form 10-K, including Item 1A, Risk Factors, for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements. In addition, please see “Caution Concerning Forward-Looking Statements” below.

Overview

MEDNAX is a leading provider of physician services including newborn, anesthesia, maternal-fetal, radiology and teleradiology, pediatric cardiology and other pediatric subspecialty care. Our national network is comprised of affiliated physicians who provide clinical care in 39 states and Puerto Rico. Our affiliated physicians provide neonatal clinical care, primarily within hospital-based neonatal intensive care units, to babies born prematurely or with medical complications; anesthesia care to patients in connection with surgical and other procedures, as well as pain management; radiology services including diagnostic imaging and interventional radiology; and maternal-fetal and obstetrical medical care to expectant mothers experiencing complicated pregnancies primarily in areas where our affiliated neonatal physicians practice. Our network also includes other pediatric subspecialists, including those who provide pediatric intensive care, pediatric cardiology care, hospital-based pediatric care, pediatric surgical care, pediatric ear, nose and throat, pediatric ophthalmology and pediatric urology services. MEDNAX also provides teleradiology services in all 50 states, the District of Columbia and Puerto Rico through a network of affiliated radiologists. In addition to our national physician network, we provide services nationwide to healthcare facilities and physicians, including ours, through complementary businesses, consisting of a management services organization focusing on full-service revenue cycle management and a consulting services company.

2018 Acquisition Activity

During the six months ended June 30, 2018, we completed the acquisitions of five physician group practices, including two radiology practices, one neonatology practice and two pediatric subspecialty practices. Based on our experience, we expect that we can improve the results of all of our acquired physician practices through improved managed care contracting, improved collections, identification of growth initiatives, as well as, operating and cost savings based upon the significant infrastructure that we have developed. In addition, we believe that we bring a unique value proposition to radiology physician groups, in that we can provide not only practice support, but also teleradiology capabilities that can enhance a physician group’s efficiency, provide subspecialty access and help them grow and remain competitive. We believe that radiology physician group practice physicians can complement the staffing needs for our teleradiology services business during certain times, such as nights and weekends, when the group practice physicians are not providing services at their practices. Our results of operations for the three and six months ended June 30, 2018 include the results for these five acquisitions from their respective dates of acquisition and therefore are not comparable in some respects to our results of operations for prior periods.

Corporate and Operational Initiatives

We have developed a number of strategic initiatives across our organization, in both our corporate functions and our operational infrastructure, with a goal of generating improvements in our general and administrative expenses and improvements through operational plans. In our corporate departments, we are focused on best-in-class cost and service excellence in order to improve processes, use our resources more efficiently and utilize our scale more effectively in all areas of our operations. Within our operational infrastructure, we have developed specific operational plans within each of our service lines and affiliated physician practices, with specific milestones and regular reporting, with the goal of generating long-term operational improvements and fostering even greater collaboration across our national medical group. We are targeting annualized financial improvements related to these initiatives of $40 million within general and administrative expenses and $80 million in operational improvements by the end of 2019, although there is no assurance that these improvements will be obtained. We believe these strategic initiatives, together with our continued plans to invest in focused, targeted and strategic organic and acquisitive growth, position us well to deliver a differentiated value proposition to our stakeholders while continuing to provide the highest quality care for our patients.

 

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Common Stock Repurchase Program

In July 2013, our board of directors authorized the repurchase of shares of our common stock up to an amount sufficient to offset the dilutive impact from the issuance of shares under our equity compensation programs. The share repurchase program allows us to make open market purchases from time-to-time based on general economic and market conditions and trading restrictions. The repurchase program also allows for the repurchase of shares of our common stock to offset the dilutive impact from the issuance of shares, if any, related to our acquisition program. During the six months ended June 30, 2018, we repurchased 1.2 million shares of our common stock for $52.2 million, inclusive of 54,909 shares withheld to satisfy minimum statutory withholding obligations of $2.5 million in connection with the vesting of restricted stock and exercises of stock options during the three months ended June 30, 2018. The shares repurchased by us during the second quarter of 2018 completed the repurchases under the repurchase program with respect to issuances of shares under our equity compensation programs during 2018.

On August 2, 2018, we announced that our board of directors had authorized the repurchase of up to $500.0 million of shares of our common stock in addition to our existing share repurchase program. We intend to commence repurchases under this program in the near term.

We may utilize various methods to effect any future share repurchases, including, among others, open market purchases and accelerated share repurchase programs. The amount and timing of repurchases will depend upon several factors, including general economic and market conditions and trading restrictions.

General Economic Conditions and Other Factors

Our operations and performance depend significantly on economic conditions. During the three months ended June 30, 2018, the percentage of our patient service revenue being reimbursed under government-sponsored or funded healthcare programs (the “GHC Programs”), decreased as compared to the three months ended March 31, 2018 but increased as compared to the three months ended June 30, 2017. We could experience shifts toward GHC Programs and patient volumes could decline if economic conditions deteriorate or changes occur in population demographics within geographic locations in which we provide services. Payments received from GHC Programs are substantially less for equivalent services than payments received from commercial insurance payors. In addition, due to the rising costs of managed care premiums and patient responsibility amounts, we may experience lower net revenue resulting from increased bad debt due to patients’ inability to pay for certain services.

Healthcare Reform

The Patient Protection and Affordable Care Act (the “ACA”) contains a number of provisions that have affected us and, absent amendment or repeal, may continue to affect us over the next several years. These provisions include the establishment of health insurance exchanges to facilitate the purchase of qualified health plans, expanded Medicaid eligibility, subsidized insurance premiums and additional requirements and incentives for businesses to provide healthcare benefits. Other provisions have expanded the scope and reach of the Federal Civil False Claims Act (“FCA”) and other healthcare fraud and abuse laws. Moreover, we could be affected by potential changes to various aspects of the ACA, including subsidies, healthcare insurance marketplaces and Medicaid expansion.

The ACA remains subject to continuing legislative and administrative scrutiny, including efforts by the Republican-controlled Congress and the current Administration to amend or repeal a number of its provisions, as well as administrative actions delaying the effectiveness of key provisions. At the end of 2017, Congress repealed part of the ACA that required most individuals to purchase and maintain health insurance. If the ACA is repealed or further substantially modified, or if implementation of certain aspects of the ACA are diluted or delayed, such repeal, modification or delay may impact our business, financial condition, results of operations, cash flows and the trading price of our securities. We are unable to predict the impact of any repeal, modification or delay in the implementation of the ACA, including the repeal of the individual mandate, on us at this time.

In addition to the potential impacts to the ACA under the current Administration, there could be more sweeping changes to GHC Programs, such as a change in the structure of Medicaid by converting it into a block grant or instituting “per capita caps,” which could eliminate the guarantee that everyone who is eligible and applies for benefits would receive them and could potentially give states sweeping new authority to restrict eligibility, cut benefits and make it more difficult for people to enroll. Additionally, several states are considering and pursuing changes to their Medicaid programs, such as requiring recipients to engage in employment activities as a condition of eligibility for most adults, disenrolling recipients for failure to pay a premium, or adjusting premium amounts based on income.

As a result, we cannot predict with any assurance the ultimate effect of these laws and resulting changes to payments under GHC Programs, nor can we provide any assurance that they will not have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities. Further, any fiscal tightening impacting GHC Programs or changes to the structure of any GHC Programs could have a material adverse effect on our financial condition, results of operations, cash flows and the trading price of our securities.

 

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The Medicare Access and CHIP Reauthorization Act

Medicare pays for most physician services based upon a national service-specific fee schedule. In 2015, Congress enacted the Medicare Access and CHIP Reauthorization Act (“MACRA,”) which provides physicians 0.5% annual increases in reimbursement through 2019 as Medicare transitions to a payment system designed to reward physicians for the quality of care provided, rather than the quantity of procedures performed. MACRA will require physicians to choose to participate in one of two payment formulas, Merit-Based Incentive Payment System (“MIPS”) or Alternative Payment Models (“APMs”). Beginning in 2019, MIPS will allow eligible physicians to receive incentive payments based on the achievement of certain quality and cost metrics, among other measures, and be reduced for those who are underperforming against those same metrics and measures. As an alternative, physicians can choose to participate in an Advanced APM. Advanced APMs are exempt from the MIPS requirements, and physicians who are meaningful participants in APMs will receive bonus payments from Medicare pursuant to the law. We currently anticipate that our affiliated physicians will be eligible to receive bonus payments in 2019 through participation in the MIPS, although the amounts of such bonus payments are not expected to be material. We will continue to operationalize the provisions of MACRA and assess any further changes to the law or additional regulations enacted pursuant to the law.

We cannot predict the ultimate effect that these changes will have on us, nor can we provide any assurance that its provisions will not have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.

Medicaid Expansion

The ACA also allows states to expand their Medicaid programs through federal payments that fund most of the cost of increasing the Medicaid eligibility income limit from a state’s historic eligibility levels to 133% of the federal poverty level. To date, 32 states and the District of Columbia have expanded Medicaid eligibility to cover this additional low income patient population, and other states are considering expansion. All of the states in which we operate, however, already cover children in the first year of life and pregnant women if their household income is at or below 133% of the federal poverty level.

Medicare Sequestration

The Budget Control Act of 2011, as amended by the American Taxpayer Relief Act of 2012, required across-the-board cuts (“sequestrations”) to Medicare reimbursement rates. These annual reductions of 2%, on average, apply to mandatory and discretionary spending through 2025. Unless Congress takes action in the future to modify these sequestrations, Medicare reimbursements will be reduced by 2%, on average, annually. However, this reduction in Medicare reimbursement rates is not expected to have a material adverse effect on our business, financial condition, results of operations, cash flows or the trading price of our securities.

Non-GAAP Measures

In our analysis of our results of operations, we use certain non-GAAP financial measures. Earnings before interest, taxes and depreciation and amortization (“EBITDA”) consists of net income before interest expense, income tax provision and depreciation and amortization. Prior to the fourth quarter of 2017, the Company had included immaterial investment and other income and equity in earnings of unconsolidated affiliates as a component of the interest expense adjustment within EBITDA. Beginning with the fourth quarter of 2017, the Company began excluding these items such that the interest expense adjustment represents only interest expense and has conformed its historical EBITDA calculations with the current presentation. Adjusted earnings per common share (“Adjusted EPS”) consists of diluted net income per common and common equivalent share adjusted for amortization expense and stock-based compensation expense.

We believe these measures, in addition to income from operations, net income and diluted net income per common and common equivalent share, provide investors with useful supplemental information to compare and understand our underlying business trends and performance across reporting periods on a consistent basis. These measures should be considered a supplement to, and not a substitute for, financial performance measures determined in accordance with GAAP. In addition, since these non-GAAP measures are not determined in accordance with GAAP, they are susceptible to varying calculations and may not be comparable to other similarly titled measures of other companies.

For a reconciliation of each of EBITDA and Adjusted EPS to the most directly comparable GAAP measures for the three and six months ended June 30, 2018 and 2017, refer to the tables below (in thousands, except per share data). In addition, historical reconciliations of EBITDA and Adjusted EPS are available on our Internet website at www.mednax.com under the Investors tab. Our Internet website and the information contained therein or connected thereto are not incorporated into or deemed a part of this Form 10-Q.

 

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     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2018      2017      2018      2017  

Net income

   $ 79,412      $ 63,698      $ 142,840      $ 118,389  

Interest expense

     21,604        18,535        41,539        36,287  

Income tax provision

     30,122        40,725        54,181        75,692  

Depreciation and amortization

     26,518        25,735        52,681        51,349  
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

   $ 157,656      $ 148,693      $ 291,241      $ 281,717  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     Three Months Ended
June 30,
 
     2018      2017  

Weighted average diluted shares outstanding

     93,529        92,812  

Net income and diluted net income per share

   $ 79,412      $ 0.85      $ 63,698      $ 0.69  

Adjustments:

           

Amortization (net of tax of $4,822 and $6,800)

     12,713        0.14        10,636        0.11  

Stock-based compensation (net of tax of $2,894 and $2,826)

     7,630        0.08        4,420        0.05  
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted net income and diluted EPS

   $ 99,755      $ 1.07      $ 78,754      $ 0.85  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     Six Months Ended
June 30,
 
     2018      2017  

Weighted average diluted shares outstanding

     93,516        92,977  

Net income and diluted net income per share

   $ 142,840      $ 1.53      $ 118,389      $ 1.27  

Adjustments:

           

Amortization (net of tax of $9,586 and $13,644)

     25,273        0.27        21,340        0.23  

Stock-based compensation (net of tax of $5,609 and $5,764)

     14,790        0.16        9,017        0.10  
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted net income and diluted EPS

   $ 182,903      $ 1.96      $ 148,746      $ 1.60  
  

 

 

    

 

 

    

 

 

    

 

 

 

Results of Operations

Three Months Ended June 30, 2018 as Compared to Three Months Ended June 30, 2017

Our net revenue increased $73.0 million, or 8.7%, to $915.9 million for the three months ended June 30, 2018, as compared to $842.9 million for the same period in 2017. Of this $73.0 million increase, $46.7 million, or 5.5%, was attributable to revenue generated from acquisitions completed after March 31, 2017 and 26.3 million, or 3.2%, was attributable to an increase in same-unit net revenue. Same units are those units at which we provided services for the entire current period and the entire comparable period. The increase in same-unit net revenue was comprised of an increase of $15.5 million, or 1.9%, related to patient service volumes and a net increase of $10.8 million, or 1.3%, from net reimbursement-related factors. The increase in revenue of $15.5 million from patient service volumes was related to growth across all of our services. The net increase in revenue of $10.8 million related to net reimbursement-related factors was primarily due to modest improvements in managed care contracting and an increase in the administrative fees received from our hospital partners, partially offset by a decrease in revenue caused by an increase in the percentage of our patients enrolled in GHC Programs.    

Practice salaries and benefits increased $59.6 million, or 10.6%, to $621.0 million for the three months ended June 30, 2018, as compared to $561.4 million for the same period in 2017. This $59.6 million increase was primarily attributable to increased costs associated with physicians and other staff to support organic-growth initiatives, acquisition-related growth and growth at our existing units, of which $50.2 million was related to salaries and $9.4 million was related to benefits and incentive compensation. We anticipate that we will continue to experience a higher rate of growth in clinician compensation expense at our existing units over historic averages, which could adversely affect our business, financial condition, results of operations, cash flows and the trading price of our securities. We anticipate that practice salaries and benefits expense for the third and fourth quarters of 2018 will continue to include salaries and benefit costs for certain physicians who will remain employed through December 31, 2018 despite the non-renewal of an anesthesia services contract by one of our hospital partners effective July 1, 2018, under which they had previously provided services.

 

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Practice supplies and other operating expenses increased $0.9 million, or 3.1%, to $31.8 million for the three months ended June 30, 2018, as compared to $30.9 million for the same period in 2017. The increase was primarily attributable to practice supply, rent and other costs related to our acquisitions, partially offset by decreases at our existing units.

General and administrative expenses include all billing and collection functions and all other salaries, benefits, supplies and operating expenses not specifically related to the day-to-day operations of our physician practices and services, as well as those attributable to our non-physician service businesses. General and administrative expenses increased $4.9 million, or 4.8%, to $107.9 million for the three months ended June 30, 2018, as compared to $103.0 million for the same period in 2017. The increase of $4.9 million is attributable to the overall growth of the Company. Included within general and administrative expenses was an increase of $3.2 million of stock-based compensation expense primarily resulting from the change in timing of our annual equity grants from June to March in order to align the timing with other compensation related activities and a decrease of approximately $6.0 million in cost improvement as part of our corporate initiative. General and administrative expenses as a percentage of net revenue was 11.8% for the three months ended June 30, 2018, as compared to 12.2% for the same period in 2017.

Depreciation and amortization expense increased $0.8 million, or 3.0%, to $26.5 million for the three months ended June 30, 2018, as compared to $25.7 million for the same period in 2017. The increase was primarily attributable to the amortization of intangible assets related to acquisitions.

Income from operations increased $6.8 million, or 5.6%, to $128.7 million for the three months ended June 30, 2018, as compared to $121.9 million for the same period in 2017. Our operating margin was 14.1% for the three months ended June 30, 2018, as compared to 14.5% for the same period in 2017. The decrease of 41 basis points was primarily due to higher operating expense growth as compared to revenue growth.

Net non-operating expenses were $19.1 million for the three months ended June 30, 2018, as compared to $17.5 million for the same period in 2017. The net increase in non-operating expenses was primarily related to an increase in interest expense due to higher average interest rates on higher outstanding borrowings under our credit agreement (the “Credit Agreement”).

Our effective income tax rate was 27.5% and 39.0% for the three months ended June 30, 2018 and 2017, respectively. The decrease in our effective tax rate is primarily related to the reduction in the corporate tax rate enacted under the Tax Cuts and Jobs Act of 2017.    

Net income was $79.4 million for the three months ended June 30, 2018, as compared to $63.7 million for the same period in 2017. EBITDA was $157.7 million for the three months ended June 30, 2018, as compared to $148.7 million for the same period in 2017.

Diluted net income per common and common equivalent share was $0.85 on weighted average shares outstanding of 93.5 million for the three months ended June 30, 2018, as compared to $0.69 on weighted average shares outstanding of 92.8 million for the same period in 2017. Adjusted EPS was $1.07 for the three months ended June 30, 2018, as compared to $0.85 for the same period in 2017.

Six Months Ended June 30, 2018 as Compared to Six Months Ended June 30, 2017

Our net revenue increased $139.2 million, or 8.3%, to $1.82 billion for the six months ended June 30, 2018, as compared to $1.68 billion for the same period in 2017. Of this $139.2 million increase, $84.6 million, or 4.9%, was attributable to revenue generated from acquisitions completed after December 31, 2016 and $54.6 million, or 3.4%, was attributable to an increase in same-unit net revenue. Same units are those units at which we provided services for the entire current period and the entire comparable period. The increase in same-unit net revenue was comprised of a net increase of $28.7 million, or 1.8%, related to patient service volumes and an increase of $25.9 million, or 1.6%, from net reimbursement-related factors. The increase in revenue of $28.7 million from patient service volumes was related to growth across almost all of our services. The net increase in revenue of $25.9 million related to net reimbursement-related factors was primarily due to modest improvements in managed care contracting and an increase in the administrative fees received from our hospital partners, partially offset by a decrease in revenue caused by an increase in the percentage of our patients enrolled in GHC Programs.

Practice salaries and benefits increased $119.0 million, or 10.5%, to $1.25 billion for the six months ended June 30, 2018, as compared to $1.13 billion for the same period in 2017. This $119.0 million increase was primarily attributable to increased costs associated with physicians and other staff primarily to support organic-growth initiatives, acquisition-related growth and growth at our existing units, of which $96.9 million was related to salaries and $22.1 million was related to benefits and incentive compensation. We anticipate that we will continue to experience a higher rate of growth in compensation expense at our existing units over historic averages, which could adversely affect our business, financial condition, results of operations, cash flows and the trading price of our securities. We anticipate that practice salaries and benefits expense for the third and fourth quarters of 2018 will continue to include salaries and benefit costs for certain physicians who will remain employed through December 31, 2018 despite the non-renewal of an anesthesia services contract with one of our hospital partners effective July 1, 2018, under which they had previously provided services.

 

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Practice supplies and other operating expenses increased $3.8 million, or 6.5%, to $62.5 million for the six months ended June 30, 2018, as compared to $58.7 million for the same period in 2017. The increase was primarily attributable to practice supply, rent and other costs related to our acquisitions, partially offset by decrease at our existing units.

General and administrative expenses include all billing and collection functions and all other salaries, benefits, supplies and operating expenses not specifically related to the day-to-day operations of our physician practices and services, as well as those attributable to our non-physician service businesses. General and administrative expenses increased $9.9 million, or 4.8%, to $216.7 million for the six months ended June 30, 2018, as compared to $206.8 million for the same period in 2017. The net increase of $9.9 million is attributable to the overall growth of the Company, including growth from acquisitions. Included within general and administrative expenses was an increase of $5.4 million of stock-based compensation expense primarily resulting from the change in timing of our annual equity grants from June to March in order to align the timing with other compensation related activities and a decrease of $12.0 million in cost improvement as part of our corporate initiative. General and administrative expenses as a percentage of net revenue was 11.9% for the six months ended June 30, 2018, as compared to 12.3% for the same period in 2017.

Depreciation and amortization expense increased $1.4 million, or 2.6%, to $52.7 million for the six months ended June 30, 2018, as compared to $51.3 million for the same period in 2017. The increase was primarily attributable to the amortization of intangible assets related to acquisitions.

Income from operations increased $5.2 million, or 2.3%, to $233.1 million for the six months ended June 30, 2018, as compared to $227.9 million for the same period in 2017. Our operating margin was 12.8% for the six months ended June 30, 2018, as compared to 13.6% for the same period in 2017. The decrease of 76 basis points was due to higher operating expense growth as compared to revenue growth.

Net non-operating expenses were $36.1 million for the six months ended June 30, 2018, as compared to $33.9 million for the same period in 2018. The net increase in non-operating expenses was primarily related to an increase in interest expense due to higher average interest rates on higher outstanding borrowings under our Credit Agreement.

Our effective income tax rate was 27.5% and 39.0% for the six months ended June 30, 2018 and 2017, respectively. The decrease in our effective tax rate is primarily related to the reduction in the corporate tax rate enacted under the Tax Cuts and Jobs Act of 2017.    

Net income was $142.8 million for the six months ended June 30, 2018, as compared to $118.4 million for the same period in 2017. EBITDA was $291.2 million for the six months ended June 30, 2018, as compared to $281.7 million for the same period in 2017.

Diluted net income per common and common equivalent share was $1.53 on weighted average shares outstanding of 93.5 million for the six months ended June 30, 2018, as compared to $1.27 on weighted average shares outstanding of 93.0 million for the same period in 2017. Adjusted EPS was $1.96 for the six months ended June 30, 2018, as compared to $1.60 for the same period in 2017.

Liquidity and Capital Resources

As of June 30, 2018, we had $38.1 million of cash and cash equivalents on hand as compared to $60.2 million at December 31, 2017. Additionally, we had working capital of $213.7 million at June 30, 2018, an increase of $117.9 million from working capital of $95.8 million at December 31, 2017. This net increase in working capital is primarily due to year-to-date earnings and net borrowings on our Credit Agreement, partially offset by the use of funds for repurchases of our common stock and acquisitions.

Cash Flows

Cash provided by (used in) operating, investing and financing activities is summarized as follows (in thousands):

 

     Six Months Ended
June 30,
 
     2018      2017  

Operating activities

   $ 21,604      $ 115,813  

Investing activities

     (38,974      (139,821

Financing activities

     (4,774      8,733  

 

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Operating Activities

During the six months ended June 30, 2018, our net cash provided from operating activities was $21.6 million, compared to $115.8 million for the same period in 2017. The net decrease in cash provided of $94.2 million was primarily due to increases in accounts receivable, a decrease in cash flow from income taxes resulting from tax payments made in the first quarter of 2018 for 2017 taxes that were deferred by the Internal Revenue Service for companies impacted by the 2017 hurricanes, partially offset by an increase in cash flow related to higher earnings.

During the six months ended June 30, 2018, cash flow from accounts receivable decreased by $24.0 million, as compared to an increase of $18.4 million for the same period in 2017. The decrease in cash flow from accounts receivable for the six months ended June 30, 2018 was primarily due to increased ending accounts receivable balances at existing units resulting from higher same-unit revenue.

Days sales outstanding (“DSO”) is one of the key factors that we use to evaluate the condition of our accounts receivable and the related allowances for contractual adjustments and uncollectibles. DSO reflects the timeliness of cash collections on billed revenue and the level of reserves on outstanding accounts receivable. Our DSO was 52.5 days at June 30, 2018 as compared to 50.9 days at December 31, 2017. The increase in our DSO primarily related to the increases in our accounts receivable balances at existing units.

Investing Activities

During the six months ended June 30, 2018, our net cash used in investing activities of $39.0 million primarily included capital expenditures of $26.3 million, acquisition payments of $25.6 million and net purchases of $9.9 million related to the purchase and maturity of investments, partially offset by proceeds of $22.8 million related to the sale of the controlling interest in a group of assets to a third party.

Financing Activities

During the six months ended June 30, 2018, our net cash used in financing activities of $4.8 million consisted primarily of the repurchase of $52.2 million of our common stock, partially offset by net borrowings on our Credit Agreement of $39.0 million and proceeds of $9.4 million from the exercise of employee stock options and the issuance of common stock under our 1996 Non-Qualified Employee Stock Purchase Plan, as amended, and 2015 Non-Qualified Stock Purchase Plan.

Liquidity

Our Credit Agreement provides for a $2.0 billion unsecured revolving credit facility and includes a $37.5 million sub-facility for the issuance of letters of credit. The Credit Agreement matures on October 31, 2022 and is guaranteed by substantially all of our subsidiaries and affiliated professional contractors. At our option, borrowings under the Credit Agreement will bear interest at (i) the alternate base rate (defined as the higher of (a) the prime rate, (b) the Federal Funds Rate plus 1/2 of 1.00% and (c) LIBOR for an interest period of one month plus 1.00%) plus an applicable margin rate ranging from 0.125% to 0.750% based on our consolidated leverage ratio or (ii) the LIBOR rate plus an applicable margin rate ranging from 1.125% to 1.750% based on our consolidated leverage ratio. The Credit Agreement also calls for other customary fees and charges, including an unused commitment fee ranging from 0.150% to 0.300% of the unused lending commitments, based on our consolidated leverage ratio. The Credit Agreement contains customary covenants and restrictions, including covenants that require us to maintain a minimum interest charge ratio, not to exceed a specified consolidated leverage ratio and to comply with laws, and restrictions on the ability to pay dividends and make certain other distributions, as specified therein. Failure to comply with these covenants would constitute an event of default under the Credit Agreement, notwithstanding the ability of the company to meet its debt service obligations. The Credit Agreement also includes various customary remedies for the lenders following an event of default, including the acceleration of repayment of outstanding amounts under the Credit Agreement.

At June 30, 2018, we had an outstanding principal balance of $1.1 billion on our Credit Agreement. We also had outstanding letters of credit of $0.2 million which reduced the amount available on our Credit Agreement to $850.3 million at June 30, 2018.

At June 30, 2018, the outstanding principal balance on our 5.25% senior unsecured notes due 2023 (the “2023 Senior Notes”) was $750.0 million. Our obligations under the 2023 Senior Notes are guaranteed on an unsecured senior basis by the same subsidiaries and affiliated professional contractors that guarantee the Credit Agreement. Interest on the 2023 Senior Notes accrues at the rate of 5.25% per annum, or $39.4 million, and is payable semi-annually in arrears on June 1 and December 1.

The indenture under which the 2023 Senior Notes are issued, among other things, limits our ability to (1) incur liens and (2) enter into sale and lease-back transactions, and also limits our ability to merge or dispose of all or substantially all of our assets, in all cases, subject to a number of customary exceptions. Although we are not required to make mandatory redemption or sinking

 

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fund payments with respect to the 2023 Senior Notes, upon the occurrence of a change in control of MEDNAX, we may be required to repurchase the 2023 Senior Notes at a purchase price equal to 101% of the aggregate principal amount of the 2023 Senior Notes repurchased plus accrued and unpaid interest.

At June 30, 2018, we believe we were in compliance, in all material respects, with the financial covenants and other restrictions applicable to us under our Credit Agreement and the 2023 Senior Notes. We believe we will be in compliance with these covenants throughout 2018.

We maintain professional liability insurance policies with third-party insurers, subject to self-insured retention, exclusions and other restrictions. We self-insure our liabilities to pay self-insured retention amounts under our professional liability insurance coverage through a wholly owned captive insurance subsidiary. We record liabilities for self-insured amounts and claims incurred but not reported based on an actuarial valuation using historical loss information, claim emergence patterns and various actuarial assumptions. Our total liability related to professional liability risks at June 30, 2018 was $242.9 million, of which $35.3 million is classified as a current liability within accounts payable and accrued expenses in the Condensed Consolidated Balance Sheet. In addition, there is a corresponding insurance receivable of $16.7 million recorded as a component of other assets for certain professional liability claims that are covered by insurance policies.

On August 2, 2018, we announced that our board of directors had authorized the repurchase of up to $500.0 million of shares of our common stock in addition to our existing share repurchase program. We intend to utilize various methods to effect the additional share repurchases, which are expected to commence in the near term. The amount and timing of repurchases will depend upon several factors, including general economic and market conditions and trading restrictions.

We anticipate that funds generated from operations, together with our current cash on hand and funds available under our Credit Agreement, will be sufficient to finance our working capital requirements, fund anticipated acquisitions and capital expenditures, fund our share repurchase programs and meet our contractual obligations for at least the next 12 months from the date of issuance of this Form 10-Q.

Caution Concerning Forward-Looking Statements

Certain information included or incorporated by reference in this Quarterly Report may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. These statements are often characterized by terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions and are based on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statements in this Quarterly Report are made as of the date hereof, and we undertake no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in the Company’s most recent Annual Report on Form 10-K, including the section entitled “Risk Factors.”

 

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Item 3.

Quantitative and Qualitative Disclosures about Market Risk

We are subject to market risk primarily from exposure to changes in interest rates based on our financing, investing and cash management activities. We intend to manage interest rate risk through the use of a combination of fixed rate and variable rate debt. We borrow under our Credit Agreement at various interest rate options based on the Alternate Base Rate or LIBOR rate depending on certain financial ratios. At June 30, 2018, the outstanding principal balance on our Credit Agreement was $1.1 billion. Considering the total outstanding balance of $1.1 billion, a 1.0% change in interest rates would result in an impact to income before income taxes of approximately $11 million per year.

 

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to provide reasonable assurance that information required to be disclosed by the Company in reports it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report.

Changes in Internal Controls Over Financial Reporting

No changes in our internal control over financial reporting occurred during the quarter ended June 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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Table of Contents

PART II - OTHER INFORMATION

 

Item 1.

Legal Proceedings

We expect that audits, inquiries and investigations from government authorities and agencies will occur in the ordinary course of business. Such audits, inquiries and investigations and their ultimate resolutions, individually or in the aggregate, could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.

In the ordinary course of our business, we become involved in pending and threatened legal actions and proceedings, most of which involve claims of medical malpractice related to medical services provided by our affiliated physicians. Our contracts with hospitals generally require us to indemnify them and their affiliates for losses resulting from the negligence of our affiliated physicians and other clinicians. We may also become subject to other lawsuits that could involve large claims and significant defense costs. We believe, based upon a review of pending actions and proceedings, that the outcome of such legal actions and proceedings will not have a material adverse effect on our business, financial condition, results of operations, cash flows or the trading price of our securities. The outcome of such actions and proceedings, however, cannot be predicted with certainty and an unfavorable resolution of one or more of them could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.

Although we currently maintain liability insurance coverage intended to cover professional liability and certain other claims, we cannot assure that our insurance coverage will be adequate to cover liabilities arising out of claims asserted against us in the future where the outcomes of such claims are unfavorable to us. With respect to professional liability risk, we self-insure a significant portion of this risk through our wholly owned captive insurance subsidiary. Liabilities in excess of our insurance coverage, including coverage for professional liability and certain other claims, could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.

On July 10, 2018, a securities class action lawsuit was filed against our company and certain of our officers and a director in the U.S. District Court for the Southern District of Florida (Case No. 0:18-cv-61572-WPD) that purports to state a claim for alleged violations of Sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5 thereunder, based on statements made by the defendants primarily concerning our anesthesiology business. The complaint seeks unspecified damages, interest, attorneys’ fees and other costs. We believe this lawsuit to be without merit and intend to vigorously defend against it. The lawsuit is in the very early stages and, at this time, no assessment can be made as to its likely outcome or whether the outcome will be material to us.

 

Item 1A.

Risk Factors

There have been no material changes to the risk factors previously disclosed in the Company’s most recent Annual Report on Form 10-K.

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended June 30, 2018, the Company repurchased 1.2 million shares of its common stock for $52.2 million, inclusive of 54,909 shares withheld to satisfy minimum statutory withholding obligations of $2.5 million in connection with the vesting of restricted stock and stock option exercises during the three months ended June 30, 2018.

 

Period

   Total
Number of
Shares
Purchased
     Average
Price Paid
per Share
     Total Number of
Shares Purchased as
part of the
Repurchase Program
     Approximate Dollar
Value of Shares that
May Yet Be Purchased
Under the Repurchase
Programs
 

April 1 – April 30, 2018

     —        $ —          —          (a

May 1 – May 31, 2018

     —          —          —          (a

June 1 – June 30, 2018

     1,154,909      $ 45.16        1,100,000        (a
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     1,154,909      $ 45.16        1,100,000        (a

 

(a)

We have two active repurchase programs. Our July 2013 program allows us to repurchase shares of our common stock up to an amount sufficient to offset the dilutive impact from the issuance of shares under our equity compensation programs, which was estimated to be approximately 1.1 million shares for 2018. The shares repurchased by us during the second quarter of 2018 completed the repurchases under our repurchase program with respect to expected issuances of shares under our equity compensation programs during 2018. Our August 2018 repurchase program allows us to repurchase up to an additional $500.0 million of shares of our common stock.

The amount and timing of any future repurchases will depend upon several factors, including general economic and market conditions and trading restrictions.

 

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Item 5.

Other Information

On July 27, 2018, Ms. Vivian Lopez-Blanco informed the Company of her intent to retire as Chief Financial Officer and Treasurer of the Company. The Company intends to conduct a formal search to identify a successor to Ms. Lopez-Blanco. Ms. Lopez-Blanco will remain in her current role with the Company throughout the search process until the appointment of her successor, and for a transitional period thereafter.

 

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Table of Contents
Item 6.

Exhibits

 

Exhibit

No.

  

Description

31.1+    Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section  302 of the Sarbanes-Oxley Act of 2002.
31.2+    Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section  302 of the Sarbanes-Oxley Act of 2002.
32+    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS+    XBRL Instance Document.
101.SCH+    XBRL Taxonomy Extension Schema Document.
101.CAL+    XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF+    XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB+    XBRL Taxonomy Extension Label Linkbase Document.
101.PRE+    XBRL Taxonomy Extension Presentation Linkbase Document.

 

+

Filed herewith.

 

23


Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

    MEDNAX, INC.
Date: August 2, 2018     By:  

/s/ Roger J. Medel, M.D.

      Roger J. Medel, M.D.
      Chief Executive Officer
      (Principal Executive Officer)
Date: August 2, 2018     By:  

/s/ Vivian Lopez-Blanco

      Vivian Lopez-Blanco
      Chief Financial Officer and Treasurer
      (Principal Financial Officer)
Date: August 2, 2018     By:  

/s/ John C. Pepia

      John C. Pepia
      Chief Accounting Officer
      (Principal Accounting Officer)

 

24

EX-31.1 2 d558671dex311.htm EX-31.1 EX-31.1

Exhibit 31.1

CERTIFICATION

I, Roger J. Medel, M.D., certify that:

 

  1.

I have reviewed this quarterly report on Form 10-Q of MEDNAX, Inc.;

 

  2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

  3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

  4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 2, 2018

 

By:  

/s/ Roger J. Medel, M.D.

  Roger J. Medel, M.D.
  Chief Executive Officer
  (Principal Executive Officer)
EX-31.2 3 d558671dex312.htm EX-31.2 EX-31.2

Exhibit 31.2

CERTIFICATION

I, Vivian Lopez-Blanco, certify that:

 

  1.

I have reviewed this quarterly report on Form 10-Q of MEDNAX, Inc.;

 

  2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

  3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

  4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 2, 2018

 

By:  

/s/ Vivian Lopez-Blanco

  Vivian Lopez-Blanco
  Chief Financial Officer and Treasurer
  (Principal Financial Officer)
EX-32 4 d558671dex32.htm EX-32 EX-32

Exhibit 32

Certification Pursuant to 18 U.S.C Section 1350

(Adopted by Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report of MEDNAX, Inc. on Form 10-Q for the quarter ended June 30, 2018 (the “Report”), each of the undersigned hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that (i) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of MEDNAX, Inc.

A signed original of this written statement required by Section 906 has been provided to MEDNAX, Inc. and will be retained by MEDNAX, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

August 2, 2018

 

By:  

/s/ Roger J. Medel, M.D.

  Roger J. Medel, M.D.
  Chief Executive Officer
  (Principal Executive Officer)
By:  

/s/ Vivian Lopez-Blanco

  Vivian Lopez-Blanco
  Chief Financial Officer and Treasurer
  (Principal Financial Officer)
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font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr style="page-break-inside:avoid"> <td width="4%" valign="top" align="left"><b>6.</b></td> <td align="left" valign="top"> <p style="margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;" align="left"><b>Accounts Payable and Accrued Expenses:</b></p> </td> </tr> </table> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Accounts payable and accrued expenses consist of the following (in thousands):</p> <p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table cellspacing="0" cellpadding="0" width="76%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center"> <tr> <td width="68%"></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"> <b>June&#xA0;30,&#xA0;2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"> <b>December&#xA0;31,&#xA0;2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Accounts payable</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">28,377</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">34,632</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Accrued salaries and bonuses</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">144,911</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">225,429</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Accrued payroll taxes and benefits</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">71,379</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">75,672</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Accrued professional liabilities</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">35,253</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">37,912</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Accrued contingent consideration</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">26,783</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6,259</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Accrued interest</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5,077</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4,495</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Other accrued expenses</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">46,475</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">53,618</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">358,255</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">438,017</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <p style="margin-top:12pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The net decrease in accrued salaries and bonuses of $80.5&#xA0;million from December&#xA0;31, 2017 to June&#xA0;30, 2018 is primarily due to the payment of performance-based incentive compensation, principally to the Company&#x2019;s physicians, partially offset by performance-based incentive compensation accrued during the six months ended June&#xA0;30, 2018. A majority of the Company&#x2019;s payments for performance-based incentive compensation is paid annually during the first quarter.</p> </div> 20400000 197000 false 2212000 24400000 <div> <table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr style="page-break-inside:avoid"> <td width="4%" valign="top" align="left"><b>10.</b></td> <td align="left" valign="top"> <p style="margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;" align="left"><b>Commitments and Contingencies:</b></p> </td> </tr> </table> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company expects that audits, inquiries and investigations from government authorities and agencies will occur in the ordinary course of business. Such audits, inquiries and investigations and their ultimate resolutions, individually or in the aggregate, could have a material adverse effect on the Company&#x2019;s business, financial condition, results of operations, cash flows and the trading price of its securities. The Company has not included an accrual for these matters as of June&#xA0;30, 2018 in its Condensed Consolidated Financial Statements, as the variables affecting any potential eventual liability depend on the currently unknown facts and circumstances that arise out of, and are specific to, any particular future audit, inquiry and investigation and cannot be reasonably estimated at this time.</p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> In the ordinary course of business, the Company becomes involved in pending and threatened legal actions and proceedings, most of which involve claims of medical malpractice related to medical services provided by the Company&#x2019;s affiliated physicians. The Company&#x2019;s contracts with hospitals generally require the Company to indemnify them and their affiliates for losses resulting from the negligence of the Company&#x2019;s affiliated physicians. The Company may also become subject to other lawsuits which could involve large claims and significant costs. The Company believes, based upon a review of pending actions and proceedings, that the outcome of such legal actions and proceedings will not have a material adverse effect on its business, financial condition, results of operations, cash flows and the trading price of its securities. The outcome of such actions and proceedings, however, cannot be predicted with certainty and an unfavorable resolution of one or more of them could have a material adverse effect on the Company&#x2019;s business, financial condition, results of operations, cash flows and the trading price of its securities.</p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Although the Company currently maintains liability insurance coverage intended to cover professional liability and certain other claims, the Company cannot assure that its insurance coverage will be adequate to cover liabilities arising out of claims asserted against it in the future where the outcomes of such claims are unfavorable. With respect to professional liability risk, the Company generally self-insures a portion of this risk through its wholly owned captive insurance subsidiary. Liabilities in excess of the Company&#x2019;s insurance coverage, including coverage for professional liability and certain other claims, could have a material adverse effect on the Company&#x2019;s business, financial condition, results of operations, cash flows and the trading price of its securities.</p> </div> -22144000 --12-31 -21211000 52681000 <div> <table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr style="page-break-inside:avoid"> <td width="4%" valign="top" align="left"><b>8.</b></td> <td align="left" valign="top"> <p style="margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;" align="left"><b>Stock Incentive Plans and Stock Purchase Plans:</b></p> </td> </tr> </table> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company&#x2019;s Amended and Restated 2008 Incentive Compensation Plan, as amended (the &#x201C;Amended and Restated 2008 Incentive Plan&#x201D;) provides for grants of stock options, stock appreciation rights, restricted stock, deferred stock, and other stock-related awards and performance awards that may be settled in cash, stock or other property.</p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Under the Amended and Restated 2008 Incentive Plan, options to purchase shares of common stock may be granted at a price not less than the fair market value of the shares on the date of grant. The options must be exercised within 10 years from the date of grant and generally become exercisable on a pro rata basis over a three-year period from the date of grant. The Company issues new shares of its common stock upon exercise of its stock options. Restricted stock awards generally vest over periods of three years upon the fulfillment of specified service-based conditions and in certain instances performance-based conditions. Deferred stock awards generally vest upon the satisfaction of specified performance-based conditions and service-based conditions. The Company recognizes compensation expense related to its restricted stock and deferred stock awards ratably over the corresponding vesting periods. During the six months ended June&#xA0;30, 2018, the Company granted 597,550 shares of restricted stock to its employees and <font style="white-space:nowrap">non-employee</font> directors under the Amended and Restated 2008 Incentive Plan. At June&#xA0;30, 2018, the Company had 2.3&#xA0;million shares available for future grants and awards under its Amended and Restated 2008 Incentive Plan.</p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Under the Company&#x2019;s 1996 <font style="white-space:nowrap">Non-Qualified</font> Employee Stock Purchase Plan, as amended (the &#x201C;ESPP&#x201D;), employees are permitted to purchase the Company&#x2019;s common stock at 85% of market value on January 1st, April 1st, July 1st and October 1st of each year. Under the Company&#x2019;s 2015 <font style="white-space:nowrap">Non-Qualified</font> Stock Purchase Plan (the &#x201C;SPP&#x201D;), certain eligible <font style="white-space:nowrap">non-employee</font> service providers are permitted to purchase the Company&#x2019;s common stock at 90% of market value on January 1st, April 1st, July 1st and October 1st of each year.</p> <p style="font-size:1px;margin-top:6px;margin-bottom:0px"> &#xA0;</p> <p style="margin-top:0pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Each of the ESPP and the SPP provide for the issuance of an aggregate of 2.6&#xA0;million shares of the Company&#x2019;s common stock less the number of shares of common stock purchased under the other plan. The Company recognizes stock-based compensation expense for the discount received by participating employees and <font style="white-space:nowrap">non-employee</font> service providers. During the six months ended June&#xA0;30, 2018, 182,888 shares in aggregate were issued under the ESPP and SPP. At June&#xA0;30, 2018, the Company had approximately 1.8&#xA0;million shares in aggregate reserved for issuance under the ESPP and SPP.</p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> During the three and six months ended June&#xA0;30, 2018 and 2017, the Company recognized stock-based compensation expense of $10.5&#xA0;million and $20.4&#xA0;million, and $7.3&#xA0;million and $14.8&#xA0;million, respectively.</p> </div> Q2 2018 10-Q <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> The following table summarizes the Company&#x2019;s net revenue by category (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="60%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Three Months Ended</b><br /> <b>June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Six Months Ended</b><br /> <b>June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Net patient service revenue</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">763,667</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">708,739</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,520,040</td> <td valign="bottom" nowrap="nowrap"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,414,192</td> <td valign="bottom" nowrap="nowrap"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Hospital contract administrative fees</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">95,534</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">75,604</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">186,773</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">147,869</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Management services and other</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">56,717</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">58,601</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">110,962</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">116,480</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">915,918</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">842,944</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,817,775</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,678,541</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> <div> <table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr style="page-break-inside:avoid"> <td width="4%" valign="top" align="left"><b>7.</b></td> <td align="left" valign="top"> <p style="margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;" align="left"><b>Common and Common Equivalent Shares:</b></p> </td> </tr> </table> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share is calculated by dividing net income by the weighted average number of common and potential common shares outstanding during the period. Potential common shares consist of outstanding restricted stock, deferred stock and stock options and is calculated using the treasury stock method.</p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The calculation of shares used in the basic and diluted net income per common share calculation for the three and six months ended June&#xA0;30, 2018 and 2017 is as follows (in thousands):</p> <p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center"> <tr> <td width="72%"></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> <td></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"> <b>Three&#xA0;Months&#xA0;Ended</b><br /> <b>June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"><b>Six Months Ended</b><br /> <b>June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Weighted average number of common shares outstanding</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">92,987</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">92,181</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">92,922</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">92,270</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Weighted average number of dilutive common share equivalents</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">542</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">631</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">594</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">707</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Weighted average number of common and common equivalent shares outstanding</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">93,529</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">92,812</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">93,516</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">92,977</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Antidilutive securities not included in the diluted net income per common share calculation</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">392</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">8</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">197</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> 1.53 0000893949 MEDNAX, INC. <div> <table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr style="page-break-inside:avoid"> <td width="4%" valign="top" align="left"><b>3.</b></td> <td align="left" valign="top"> <p style="margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;" align="left"><b>Fair Value Measurements:</b></p> </td> </tr> </table> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> In accordance with the accounting guidance for fair value measurements and disclosures, the Company carries its money market funds included in cash and cash equivalents at fair value. In accordance with the three-tier fair value hierarchy under this guidance, the Company determined the fair value using quoted market prices, a Level&#xA0;1 input as defined under the accounting guidance for fair value measurements. At June&#xA0;30, 2018 and December&#xA0;31, 2017, the Company&#x2019;s money market funds had a carrying amount of $2.4&#xA0;million and $9.2&#xA0;million, respectively.</p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company also carries the cash surrender value of life insurance related to its deferred compensation arrangements at fair value. The investments underlying the life insurance contracts consist primarily of exchange-traded equity securities and mutual funds with quoted prices in active markets. In accordance with the three-tier fair value hierarchy, the Company determined the fair value using the cash surrender value of the life insurance, a Level&#xA0;2 input as defined under the accounting guidance for fair value measurements. At June&#xA0;30, 2018 and December&#xA0;31, 2017, the Company&#x2019;s cash surrender value of life insurance had a carrying amount of $15.7&#xA0;million and $15.6&#xA0;million, respectively.</p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> In addition, the Company carries its contingent consideration liabilities related to acquisitions at fair value. In accordance with the three-tier fair value hierarchy, the Company determined the fair value of its contingent consideration liabilities using the income approach with assumed discount rates and payment probabilities. The income approach uses Level&#xA0;3, or unobservable inputs as defined under the accounting guidance for fair value measurements. At June&#xA0;30, 2018 and December&#xA0;31, 2017, the Company&#x2019;s contingent consideration liabilities had a fair value of $30.7&#xA0;million and $30.5&#xA0;million, respectively.</p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The carrying amounts of cash equivalents, short-term investments, accounts receivable and accounts payable and accrued expenses approximate fair value due to the short maturities of the respective instruments. The carrying values of long-term investments, line of credit and capital lease obligations approximate fair value. If the Company&#x2019;s investments were measured at fair value, they would be categorized as Level&#xA0;2 in the fair value hierarchy. If the Company&#x2019;s line of credit was measured at fair value, it would be categorized as Level&#xA0;2 in the fair value hierarchy. The estimated fair value of the Company&#x2019;s 5.25% senior unsecured notes due 2023 was $735.0&#xA0;million and $763.1&#xA0;million, at June&#xA0;30, 2018 and December&#xA0;31, 2017, respectively, and was estimated using trading prices on such dates as Level&#xA0;2 inputs to estimate fair value.</p> </div> 2018-06-30 1.54 Large Accelerated Filer 216684000 197021000 2782000 54181000 -5863000 1178000 <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> Investments held at June&#xA0;30, 2018 and December&#xA0;31, 2017 are summarized as follows (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="61%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>June&#xA0;30, 2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>December&#xA0;31, 2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b><font style="WHITE-SPACE: nowrap">Short-Term</font></b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b><font style="WHITE-SPACE: nowrap">Long-Term</font></b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b><font style="WHITE-SPACE: nowrap">Short-Term</font></b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b><font style="WHITE-SPACE: nowrap">Long-Term</font></b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Municipal debt securities</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">8,432</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">48,613</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">8,312</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">46,195</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Federal home loan securities</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">36,393</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,000</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">30,322</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Certificates of deposit</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,470</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5,180</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">980</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4,165</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">9,902</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">90,186</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">10,292</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">80,682</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> -100442000 -39909000 317000 23998000 41539000 -1397000 594000 <div> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="PAGE-BREAK-INSIDE: avoid"> <td valign="top" width="4%" align="left"><b>2.</b></td> <td valign="top" align="left"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="left"><b>Cash Equivalents and Investments:</b></p> </td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> As of June&#xA0;30, 2018 and December&#xA0;31, 2017, the Company&#x2019;s cash equivalents consisted entirely of money market funds totaling $2.4&#xA0;million and $9.2&#xA0;million, respectively.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> Investments consist of municipal debt securities, federal home loan securities and certificates of deposit. Investments with remaining maturities of less than one year are classified as short-term investments. Investments classified as long-term have maturities of one year to six years.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> The Company intends and has the ability to hold its securities to maturity, and therefore carries such investments at amortized cost in accordance with the provisions of the accounting guidance for investments in debt and equity securities.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> Investments held at June&#xA0;30, 2018 and December&#xA0;31, 2017 are summarized as follows (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="61%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>June&#xA0;30, 2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>December&#xA0;31, 2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b><font style="WHITE-SPACE: nowrap">Short-Term</font></b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b><font style="WHITE-SPACE: nowrap">Long-Term</font></b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b><font style="WHITE-SPACE: nowrap">Short-Term</font></b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b><font style="WHITE-SPACE: nowrap">Long-Term</font></b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Municipal debt securities</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">8,432</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">48,613</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">8,312</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">46,195</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Federal home loan securities</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom" nowrap="nowrap" align="right"> &#x2014;&#xA0;&#xA0;</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">36,393</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,000</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">30,322</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Certificates of deposit</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,470</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5,180</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">980</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4,165</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">9,902</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">90,186</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">10,292</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">80,682</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> Contractual maturities of long-term investments are summarized as follows (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"> <tr> <td width="68%"></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>June&#xA0;30,&#xA0;2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>December&#xA0;31,&#xA0;2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Due after one year through five years</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">89,186</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">78,561</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Due after five years through six years</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,000</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">2,121</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">90,186</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">80,682</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> 2666000 <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> Contractual maturities of long-term investments are summarized as follows (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"> <tr> <td width="68%"></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>June&#xA0;30,&#xA0;2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>December&#xA0;31,&#xA0;2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Due after one year through five years</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">89,186</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">78,561</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Due after five years through six years</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1,000</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">2,121</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">90,186</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">80,682</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> <div> <p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"> <b>New Accounting Pronouncements</b></p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> In February 2016, the accounting guidance related to leases was issued that will require an entity to recognize leased assets and the rights and obligations created by those leased assets on the balance sheet and to disclose key information about the entity&#x2019;s leasing arrangements. This guidance will become effective for the Company on January&#xA0;1, 2019, with early adoption permitted. The Company expects that the adoption of this guidance will have a material impact on its Consolidated Balance Sheets and related disclosures, resulting from the recognition of significant right of use assets and related liabilities primarily related to its operating lease arrangements for space in hospitals and certain other facilities for its business and medical offices. The Company has completed the review of its existing lease portfolio and is accumulating all of the necessary information required to properly account for leases under the new guidance. The Company has selected a software application, inclusive of a lease administration module and an accounting module, and has begun the implementation process. The Company is in the process of designing workflows, business processes and internal controls surrounding the lease accounting process in order to meet the reporting and disclosure requirements. The Company&#x2019;s implementation and continued evaluation of this new guidance and its impacts are expected to continue through the third quarter of 2018.</p> </div> -36091000 <div> <table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr style="page-break-inside:avoid"> <td width="4%" valign="top" align="left"><b>1.</b></td> <td align="left" valign="top"> <p style="margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;" align="left"><b>Basis of Presentation and New Accounting Pronouncements:</b></p> </td> </tr> </table> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The accompanying unaudited Condensed Consolidated Financial Statements of the Company and the notes thereto presented in this <font style="white-space:nowrap">Form&#xA0;10-Q</font> have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (&#x201C;SEC&#x201D;) applicable to interim financial statements, and do not include all disclosures required by accounting principles generally accepted in the United States of America (&#x201C;GAAP&#x201D;) for complete financial statements. In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results of interim periods. The financial statements include all the accounts of MEDNAX, Inc. and its consolidated subsidiaries (collectively, &#x201C;MDX&#x201D;) together with the accounts of MDX&#x2019;s affiliated business corporations or professional associations, professional corporations, limited liability companies and partnerships (the &#x201C;affiliated professional contractors&#x201D;). Certain subsidiaries of MDX have contractual management arrangements with its affiliated professional contractors, which are separate legal entities that provide physician services in certain states and Puerto Rico. The terms &#x201C;MEDNAX&#x201D; and the &#x201C;Company&#x201D; refer collectively to MEDNAX, Inc., its subsidiaries and the affiliated professional contractors.</p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The Company is a party to a joint venture in which it owns a 37.5% economic interest. In January 2018, the Company entered into an additional joint venture in which it owns a 49.0% economic interest. The Company accounts for these joint ventures under the equity method of accounting because the Company exercises significant influence over, but does not control, these entities. See Note 5 for more information regarding the January 2018 joint venture.</p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The consolidated results of operations for the interim periods presented are not necessarily indicative of the results to be experienced for the entire fiscal year. In addition, the accompanying unaudited Condensed Consolidated Financial Statements and the notes thereto should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in the Company&#x2019;s most recent Annual Report on <font style="white-space:nowrap">Form&#xA0;10-K</font> (the &#x201C;Form <font style="white-space:nowrap">10-K&#x201D;).</font></p> <p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"> <b>Recently Adopted Accounting Pronouncements</b></p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> In May 2014, the accounting guidance related to revenue recognition was amended to outline a single, comprehensive model for accounting for revenue from contracts with customers. The core principle of the new accounting guidance is to require an entity to recognize as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods or services as it transfers control to its customers. The guidance became effective for the Company on January&#xA0;1, 2018 and was adopted on a full retrospective basis. The primary change for healthcare providers under the new guidance is the requirement to report the allowance for uncollectibles associated with patient responsibility amounts as a reduction in net revenue as opposed to bad debt expense, a component of operating expenses. The Company has historically included the allowance for uncollectibles associated with patient responsibility amounts with its allowance for contractual adjustments as a reduction in net revenue as such amounts are not material. Accordingly, the adoption of this guidance did not have an impact on our Consolidated Financial Statements, other than increased financial statement disclosures. The guidance requires increased disclosures, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. See Note 4 for more information.</p> <p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"> <b>New Accounting Pronouncements</b></p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> In February 2016, the accounting guidance related to leases was issued that will require an entity to recognize leased assets and the rights and obligations created by those leased assets on the balance sheet and to disclose key information about the entity&#x2019;s leasing arrangements. This guidance will become effective for the Company on January&#xA0;1, 2019, with early adoption permitted. The Company expects that the adoption of this guidance will have a material impact on its Consolidated Balance Sheets and related disclosures, resulting from the recognition of significant right of use assets and related liabilities primarily related to its operating lease arrangements for space in hospitals and certain other facilities for its business and medical offices. The Company has completed the review of its existing lease portfolio and is accumulating all of the necessary information required to properly account for leases under the new guidance. The Company has selected a software application, inclusive of a lease administration module and an accounting module, and has begun the implementation process. The Company is in the process of designing workflows, business processes and internal controls surrounding the lease accounting process in order to meet the reporting and disclosure requirements. The Company&#x2019;s implementation and continued evaluation of this new guidance and its impacts are expected to continue through the third quarter of 2018.</p> </div> -38974000 -4774000 21604000 2148000 1584663000 233112000 400000 15884000 26274000 52160000 25575000 367000 65000 9389000 5995000 821500000 22764000 782500000 142840000 636000 <div> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> Accounts payable and accrued expenses consist of the following (in thousands):</p> <p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table cellspacing="0" cellpadding="0" width="76%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center"> <tr> <td width="68%"></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"> <b>June&#xA0;30,&#xA0;2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"> <b>December&#xA0;31,&#xA0;2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Accounts payable</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">28,377</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">34,632</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Accrued salaries and bonuses</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">144,911</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">225,429</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Accrued payroll taxes and benefits</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">71,379</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">75,672</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Accrued professional liabilities</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">35,253</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">37,912</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Accrued contingent consideration</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">26,783</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">6,259</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Accrued interest</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5,077</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4,495</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Other accrued expenses</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">46,475</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">53,618</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">358,255</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">438,017</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> Accounts receivable, net consists of the following (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"> <tr> <td width="68%"></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>June&#xA0;30, 2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>December&#xA0;31,&#xA0;2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Gross accounts receivable</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,918,787</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,790,034</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Allowance for contractual adjustments and uncollectibles</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,390,790</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,286,035</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">527,997</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">503,999</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> 20399000 <div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt; TEXT-INDENT: 4%"> The approximate percentage of net patient service revenue by type of payor was as follows:</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="72%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"> <b>Three&#xA0;Months&#xA0;Ended</b><br /> <b>June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Six&#xA0;Months&#xA0;Ended</b><br /> <b>June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Contracted managed care</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">70</td> <td valign="bottom" nowrap="nowrap">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">71</td> <td valign="bottom" nowrap="nowrap">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">70</td> <td valign="bottom" nowrap="nowrap">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">71</td> <td valign="bottom" nowrap="nowrap">%&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Government</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">25</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">24</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">25</td> <td valign="bottom" nowrap="nowrap"></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">24</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Other third-parties</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">4</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> <font style="WHITE-SPACE: nowrap">Private-pay</font> patients</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">1</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">100</td> <td valign="bottom" nowrap="nowrap">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">100</td> <td valign="bottom" nowrap="nowrap">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">100</td> <td valign="bottom" nowrap="nowrap">%&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">100</td> <td valign="bottom" nowrap="nowrap">%&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> <div> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> The calculation of shares used in the basic and diluted net income per common share calculation for the three and six months ended June&#xA0;30, 2018 and 2017 is as follows (in thousands):</p> <p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt"> &#xA0;</p> <table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center"> <tr> <td width="72%"></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="2%"></td> <td></td> <td></td> <td></td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"> <b>Three&#xA0;Months&#xA0;Ended</b><br /> <b>June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"><b>Six Months Ended</b><br /> <b>June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Weighted average number of common shares outstanding</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">92,987</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">92,181</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">92,922</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">92,270</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Weighted average number of dilutive common share equivalents</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">542</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">631</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">594</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">707</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr bgcolor="#CCEEFF" style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Weighted average number of common and common equivalent shares outstanding</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">93,529</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">92,812</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">93,516</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">92,977</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt"> <td valign="top"> <p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"> Antidilutive securities not included in the diluted net income per common share calculation</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">392</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">8</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">197</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">5</td> <td nowrap="nowrap" valign="bottom">&#xA0;</td> </tr> <tr style="font-size:1px;"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td valign="bottom"> <p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> </div> MD 52200000 93516000 92922000 1200000 62488000 80500000 1252810000 5 2 2 1 <div> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="PAGE-BREAK-INSIDE: avoid"> <td valign="top" width="4%" align="left"><b>4.</b></td> <td valign="top" align="left"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="left"><b>Accounts Receivable and Net Revenue:</b></p> </td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> Accounts receivable, net consists of the following (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0"> <tr> <td width="68%"></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>June&#xA0;30, 2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>December&#xA0;31,&#xA0;2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Gross accounts receivable</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,918,787</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,790,034</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Allowance for contractual adjustments and uncollectibles</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,390,790</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">(1,286,035</td> <td valign="bottom" nowrap="nowrap">)&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">527,997</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">503,999</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 12pt; TEXT-INDENT: 4%"> Patient service revenue is recognized at the time services are provided by the Company&#x2019;s affiliated physicians. The Company&#x2019;s performance obligations related to the delivery of services to patients are satisfied at the time of service. Accordingly, there are no performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period with respect to patient service revenue. Almost all of the Company&#x2019;s patient service revenue is reimbursed by government-sponsored healthcare programs and third-party insurance payors. Payments for services rendered to the Company&#x2019;s patients are generally less than billed charges. The Company monitors its revenue and receivables from these sources and records an estimated contractual allowance to properly account for the anticipated differences between billed and reimbursed amounts.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> Accordingly, patient service revenue is presented net of an estimated provision for contractual adjustments and uncollectibles. The Company estimates allowances for contractual adjustments and uncollectibles on accounts receivable based upon historical experience and other factors, including days sales outstanding (&#x201C;DSO&#x201D;) for accounts receivable, evaluation of expected adjustments and delinquency rates, past adjustments and collection experience in relation to amounts billed, an aging of accounts receivable, current contract and reimbursement terms, changes in payor mix and other relevant information. Contractual adjustments result from the difference between the physician rates for services performed and the reimbursements by government-sponsored healthcare programs and third-party insurance payors for such services.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> Collection of patient service revenue the Company expects to receive is normally a function of providing complete and correct billing information to the government-sponsored healthcare programs and third-party insurance payors within the various filing deadlines and typically occurs within&#xA0;30&#xA0;to&#xA0;60&#xA0;days of billing.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> Some of the Company&#x2019;s hospital agreements require hospitals to pay the Company administrative fees. Some agreements provide for fees if the hospital does not generate sufficient patient volume in order to guarantee that the Company receives a specified minimum revenue level. The Company also receives fees from hospitals for administrative services performed by its affiliated physicians providing medical director or other services at the hospital.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> In addition, the Company generates revenue through its management services organization for services rendered under various coding and billing contracts. Contract terms are specific to each customer and may include a combination of a flat fee for coding of medical charts, a fixed fee per patient visit as well as a percentage of cash collections received by the providers. Revenue for flat and fixed fee arrangements is recognized in the month the coding occurs or the patient visit occurs. Revenue for percentage fees are recognized in the month that cash is collected for customers from payors.</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> The following table summarizes the Company&#x2019;s net revenue by category (in thousands):</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="60%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Three Months Ended</b><br /> <b>June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Six Months Ended</b><br /> <b>June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2017</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2018</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2017</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Net patient service revenue</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">763,667</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">708,739</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,520,040</td> <td valign="bottom" nowrap="nowrap"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,414,192</td> <td valign="bottom" nowrap="nowrap"></td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Hospital contract administrative fees</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">95,534</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">75,604</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">186,773</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">147,869</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF"> <td valign="top"> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em"> Management services and other</p> </td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">56,717</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">58,601</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">110,962</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">&#xA0;</td> <td valign="bottom" align="right">116,480</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> <tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="top"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">915,918</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">842,944</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,817,775</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,678,541</td> <td valign="bottom" nowrap="nowrap">&#xA0;</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td valign="bottom"> <p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt"> &#xA0;</p> </td> <td>&#xA0;</td> </tr> </table> <p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px"> &#xA0;</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt; TEXT-INDENT: 4%"> The approximate percentage of net patient service revenue by type of payor was as follows:</p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt"> &#xA0;</p> <table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="72%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; PAGE-BREAK-INSIDE: avoid"> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"> <b>Three&#xA0;Months&#xA0;Ended</b><br /> <b>June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> <td valign="bottom">&#xA0;</td> <td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Six&#xA0;Months&#xA0;Ended</b><br /> <b>June&#xA0;30,</b></td> <td valign="bottom">&#xA0;</td> </tr> <tr style="FONT-SIZE: 8pt; 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The share repurchase program allows the Company to make open market purchases from <font style="white-space:nowrap"><font style="white-space:nowrap">time-to-time</font></font> based on general economic and market conditions and trading restrictions. The repurchase program also allows for the repurchase of shares of the Company&#x2019;s common stock to offset the dilutive impact from the issuance of shares, if any, related to the Company&#x2019;s acquisition program. During the six months ended June&#xA0;30, 2018, the Company repurchased 1.2&#xA0;million shares of its common stock for $52.2&#xA0;million, inclusive of 54,909 shares withheld to satisfy minimum statutory withholding obligations of $2.5&#xA0;million in connection with the vesting of restricted stock and stock option exercises during the three months ended June&#xA0;30, 2018. The shares repurchased by the Company during the second quarter of 2018 completed the repurchases under the program with respect to issuances of shares under the Company&#x2019;s equity compensation programs during 2018. The Company intends to utilize various methods to effect any future share repurchases, including, among others, open market purchases and accelerated share repurchase programs. The amount and timing of repurchases will depend upon several factors, including general economic and market conditions and trading restrictions.</p> </div> <div> <p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"> <b>Recently Adopted Accounting Pronouncements</b></p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> In May 2014, the accounting guidance related to revenue recognition was amended to outline a single, comprehensive model for accounting for revenue from contracts with customers. The core principle of the new accounting guidance is to require an entity to recognize as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods or services as it transfers control to its customers. The guidance became effective for the Company on January&#xA0;1, 2018 and was adopted on a full retrospective basis. The primary change for healthcare providers under the new guidance is the requirement to report the allowance for uncollectibles associated with patient responsibility amounts as a reduction in net revenue as opposed to bad debt expense, a component of operating expenses. The Company has historically included the allowance for uncollectibles associated with patient responsibility amounts with its allowance for contractual adjustments as a reduction in net revenue as such amounts are not material. Accordingly, the adoption of this guidance did not have an impact on our Consolidated Financial Statements, other than increased financial statement disclosures. The guidance requires increased disclosures, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. See Note 4 for more information.</p> </div> <div> <table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%"> <tr style="page-break-inside:avoid"> <td width="4%" valign="top" align="left"><b>5.</b></td> <td align="left" valign="top"> <p style="margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman;" align="left"><b>Business Acquisitions, Joint Ventures and Goodwill:</b></p> </td> </tr> </table> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> During the six months ended June&#xA0;30, 2018, the Company completed the acquisition of five physician group practices, including two radiology practices, one neonatology practice and two pediatric subspecialty practices. The acquisition-date fair value of the total consideration for the five acquisitions was $24.4&#xA0;million. These acquisitions expanded the Company&#x2019;s national network of physician practices. In connection with these acquisitions, the Company recorded goodwill of $15.5&#xA0;million and other intangible assets consisting primarily of physician and hospital agreements of $8.9 million.</p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> In addition, during the six months ended June&#xA0;30, 2018, in connection with certain prior-period acquisitions, the Company paid $0.4&#xA0;million for contingent consideration and $1.2&#xA0;million for purchase consideration that had been held back pending satisfaction of certain conditions. All amounts except for the accretion recorded during 2018 were accrued as of December&#xA0;31, 2017.</p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> In connection with certain prior-period acquisitions, the Company also recorded a decrease in current assets of $1.2&#xA0;million, a decrease in noncurrent assets of $1.5&#xA0;million, an increase in current liabilities of $1.4&#xA0;million and an increase in noncurrent liabilities of $1.2&#xA0;million, with a corresponding net increase in goodwill of $5.3&#xA0;million for measurement-period adjustments resulting from the finalization of acquisition accounting. The Company expects that $18.2&#xA0;million of the goodwill recorded during the six months ended June&#xA0;30, 2018 will be deductible for tax purposes.</p> <p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"> In January 2018, the Company completed the sale of a controlling interest and the contribution of remaining assets to a joint venture related to the $46.0&#xA0;million of assets held for sale at December&#xA0;31, 2017. The Company accounts for its 49.0% economic interest in the joint venture as an equity method investment. 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The Company continues to believe that the fair value of the reporting unit exceeds the carrying value, and accordingly the goodwill assigned to the management services reporting unit is not impaired&#xA0;Although the Company believes that the current assumptions and estimates used in its goodwill analysis are reasonable, supportable and appropriate, continued efforts to maintain or improve the performance of this business could be impacted by unfavorable or unforeseen changes which could impact the existing assumptions used in the impairment analysis. Various factors could reasonably be expected to unfavorably impact existing assumptions, primarily delays in new customer bookings and the related delay in revenue from new customers, increases in customer termination activity or increases in operating costs. 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Document and Entity Information - shares
6 Months Ended
Jun. 30, 2018
Jul. 27, 2018
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Jun. 30, 2018  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q2  
Trading Symbol MD  
Entity Registrant Name MEDNAX, INC.  
Entity Central Index Key 0000893949  
Current Fiscal Year End Date --12-31  
Entity Filer Category Large Accelerated Filer  
Entity Common Stock, Shares Outstanding   93,466,848
XML 12 R2.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Current assets:    
Cash and cash equivalents $ 38,056 $ 60,200
Restricted cash 19,000  
Short-term investments 9,902 10,292
Accounts receivable, net 527,997 503,999
Prepaid expenses 15,752 15,584
Other current assets 14,223 37,160
Total current assets 624,930 627,235
Restricted cash 1,000 20,000
Investments 90,186 80,682
Property and equipment, net 131,922 123,536
Goodwill 4,304,740 4,283,963
Intangible assets, net 614,226 639,928
Other assets 92,634 91,934
Total assets 5,859,638 5,867,278
Current liabilities:    
Accounts payable and accrued expenses 358,255 438,017
Current portion of long-term debt and capital lease obligations 860 1,401
Income taxes payable 52,098 92,007
Total current liabilities 411,213 531,425
Line of credit 1,149,500 1,110,500
Long-term debt and capital lease obligations, net 741,612 740,923
Long-term professional liabilities 207,687 212,274
Deferred income taxes 126,505 147,797
Other liabilities 36,199 57,905
Total liabilities 2,672,716 2,800,824
Commitments and contingencies
Shareholders' equity:    
Preferred stock; $.01 par value; 1,000 shares authorized; none issued
Common stock; $.01 par value; 200,000 shares authorized; 93,374 and 93,721 shares issued and outstanding, respectively 934 937
Additional paid-in capital 1,032,573 1,017,328
Retained earnings 2,153,415 2,048,189
Total shareholders' equity 3,186,922 3,066,454
Total liabilities and shareholders' equity $ 5,859,638 $ 5,867,278
XML 13 R3.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Jun. 30, 2018
Dec. 31, 2017
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.01 $ 0.01
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, issued 0 0
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 93,374,000 93,721,000
Common stock, shares outstanding 93,374,000 93,721,000
XML 14 R4.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements of Income (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Operating expenses:        
Practice salaries and benefits $ 620,980 $ 561,418 $ 1,252,810 $ 1,133,803
Practice supplies and other operating expenses 31,833 30,872 62,488 58,668
General and administrative expenses 107,908 103,015 216,684 206,780
Depreciation and amortization 26,518 25,735 52,681 51,349
Total operating expenses 787,239 721,040 1,584,663 1,450,600
Income from operations 128,679 121,904 233,112 227,941
Investment and other income 1,202 365 2,666 941
Interest expense (21,604) (18,535) (41,539) (36,287)
Equity in earnings of unconsolidated affiliates 1,257 689 2,782 1,486
Total non-operating expenses (19,145) (17,481) (36,091) (33,860)
Income before income taxes 109,534 104,423 197,021 194,081
Income tax provision (30,122) (40,725) (54,181) (75,692)
Net income $ 79,412 $ 63,698 $ 142,840 $ 118,389
Net income:        
Earnings per share, Basic $ 0.85 $ 0.69 $ 1.54 $ 1.28
Earnings per share, Diluted $ 0.85 $ 0.69 $ 1.53 $ 1.27
Weighted average common shares:        
Basic 92,987 92,181 92,922 92,270
Diluted 93,529 92,812 93,516 92,977
Health Care        
Net revenue $ 915,918 $ 842,944 $ 1,817,775 $ 1,678,541
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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Cash flows from operating activities:    
Net income $ 142,840 $ 118,389
Adjustments to reconcile net income to net cash from operating activities:    
Depreciation and amortization 52,681 51,349
Amortization of premiums, discounts and issuance costs 2,212 2,740
Stock-based compensation expense 20,399 14,781
Deferred income taxes (21,211) 18,454
Other (2,148) (3,407)
Changes in assets and liabilities:    
Accounts receivable (23,998) 18,361
Prepaid expenses and other current assets (1,178) (666)
Other long term assets (317) (3,425)
Accounts payable and accrued expenses (100,442) (87,862)
Income taxes payable (39,909) (15,900)
Payments of contingent consideration liabilities (65) (299)
Long-term professional liabilities (5,863) 1,016
Other liabilities (1,397) 2,282
Net cash provided from operating activities 21,604 115,813
Cash flows from investing activities:    
Acquisition payments, net of cash acquired (25,575) (113,746)
Purchases of investments (15,884) (15,324)
Proceeds from maturities of investments 5,995 7,290
Purchases of property and equipment (26,274) (21,909)
Proceeds from sale of controlling interest in assets 22,764  
Other   3,868
Net cash used in investing activities (38,974) (139,821)
Cash flows from financing activities:    
Borrowings on credit agreement 821,500 821,000
Payments on credit agreement (782,500) (754,000)
Payments of contingent consideration liabilities (367) (1,961)
Payments on capital lease obligations (636) (998)
Proceeds from issuance of common stock 9,389 13,990
Repurchases of common stock (52,160) (70,192)
Contribution from noncontrolling interests   894
Net cash (used in) provided from financing activities (4,774) 8,733
Net decrease in cash and cash equivalents (22,144) (15,275)
Cash, cash equivalents and restricted cash at beginning of period 80,200 55,698
Cash, cash equivalents and restricted cash at end of period $ 58,056 $ 40,423
XML 16 R6.htm IDEA: XBRL DOCUMENT v3.10.0.1
Basis of Presentation and New Accounting Pronouncements
6 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
Basis of Presentation and New Accounting Pronouncements
1.

Basis of Presentation and New Accounting Pronouncements:

The accompanying unaudited Condensed Consolidated Financial Statements of the Company and the notes thereto presented in this Form 10-Q have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements, and do not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results of interim periods. The financial statements include all the accounts of MEDNAX, Inc. and its consolidated subsidiaries (collectively, “MDX”) together with the accounts of MDX’s affiliated business corporations or professional associations, professional corporations, limited liability companies and partnerships (the “affiliated professional contractors”). Certain subsidiaries of MDX have contractual management arrangements with its affiliated professional contractors, which are separate legal entities that provide physician services in certain states and Puerto Rico. The terms “MEDNAX” and the “Company” refer collectively to MEDNAX, Inc., its subsidiaries and the affiliated professional contractors.

The Company is a party to a joint venture in which it owns a 37.5% economic interest. In January 2018, the Company entered into an additional joint venture in which it owns a 49.0% economic interest. The Company accounts for these joint ventures under the equity method of accounting because the Company exercises significant influence over, but does not control, these entities. See Note 5 for more information regarding the January 2018 joint venture.

The consolidated results of operations for the interim periods presented are not necessarily indicative of the results to be experienced for the entire fiscal year. In addition, the accompanying unaudited Condensed Consolidated Financial Statements and the notes thereto should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in the Company’s most recent Annual Report on Form 10-K (the “Form 10-K”).

Recently Adopted Accounting Pronouncements

In May 2014, the accounting guidance related to revenue recognition was amended to outline a single, comprehensive model for accounting for revenue from contracts with customers. The core principle of the new accounting guidance is to require an entity to recognize as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods or services as it transfers control to its customers. The guidance became effective for the Company on January 1, 2018 and was adopted on a full retrospective basis. The primary change for healthcare providers under the new guidance is the requirement to report the allowance for uncollectibles associated with patient responsibility amounts as a reduction in net revenue as opposed to bad debt expense, a component of operating expenses. The Company has historically included the allowance for uncollectibles associated with patient responsibility amounts with its allowance for contractual adjustments as a reduction in net revenue as such amounts are not material. Accordingly, the adoption of this guidance did not have an impact on our Consolidated Financial Statements, other than increased financial statement disclosures. The guidance requires increased disclosures, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. See Note 4 for more information.

New Accounting Pronouncements

In February 2016, the accounting guidance related to leases was issued that will require an entity to recognize leased assets and the rights and obligations created by those leased assets on the balance sheet and to disclose key information about the entity’s leasing arrangements. This guidance will become effective for the Company on January 1, 2019, with early adoption permitted. The Company expects that the adoption of this guidance will have a material impact on its Consolidated Balance Sheets and related disclosures, resulting from the recognition of significant right of use assets and related liabilities primarily related to its operating lease arrangements for space in hospitals and certain other facilities for its business and medical offices. The Company has completed the review of its existing lease portfolio and is accumulating all of the necessary information required to properly account for leases under the new guidance. The Company has selected a software application, inclusive of a lease administration module and an accounting module, and has begun the implementation process. The Company is in the process of designing workflows, business processes and internal controls surrounding the lease accounting process in order to meet the reporting and disclosure requirements. The Company’s implementation and continued evaluation of this new guidance and its impacts are expected to continue through the third quarter of 2018.

XML 17 R7.htm IDEA: XBRL DOCUMENT v3.10.0.1
Cash Equivalents and Investments
6 Months Ended
Jun. 30, 2018
Investments, Debt and Equity Securities [Abstract]  
Cash Equivalents and Investments
2.

Cash Equivalents and Investments:

As of June 30, 2018 and December 31, 2017, the Company’s cash equivalents consisted entirely of money market funds totaling $2.4 million and $9.2 million, respectively.

Investments consist of municipal debt securities, federal home loan securities and certificates of deposit. Investments with remaining maturities of less than one year are classified as short-term investments. Investments classified as long-term have maturities of one year to six years.

The Company intends and has the ability to hold its securities to maturity, and therefore carries such investments at amortized cost in accordance with the provisions of the accounting guidance for investments in debt and equity securities.

Investments held at June 30, 2018 and December 31, 2017 are summarized as follows (in thousands):

 

     June 30, 2018      December 31, 2017  
     Short-Term      Long-Term      Short-Term      Long-Term  

Municipal debt securities

   $ 8,432      $ 48,613      $ 8,312      $ 46,195  

Federal home loan securities

     —          36,393        1,000        30,322  

Certificates of deposit

     1,470        5,180        980        4,165  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 9,902      $ 90,186      $ 10,292      $ 80,682  
  

 

 

    

 

 

    

 

 

    

 

 

 

Contractual maturities of long-term investments are summarized as follows (in thousands):

 

     June 30, 2018      December 31, 2017  

Due after one year through five years

   $ 89,186      $ 78,561  

Due after five years through six years

     1,000        2,121  
  

 

 

    

 

 

 
   $ 90,186      $ 80,682  
  

 

 

    

 

 

 
XML 18 R8.htm IDEA: XBRL DOCUMENT v3.10.0.1
Fair Value Measurements
6 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements
3.

Fair Value Measurements:

In accordance with the accounting guidance for fair value measurements and disclosures, the Company carries its money market funds included in cash and cash equivalents at fair value. In accordance with the three-tier fair value hierarchy under this guidance, the Company determined the fair value using quoted market prices, a Level 1 input as defined under the accounting guidance for fair value measurements. At June 30, 2018 and December 31, 2017, the Company’s money market funds had a carrying amount of $2.4 million and $9.2 million, respectively.

The Company also carries the cash surrender value of life insurance related to its deferred compensation arrangements at fair value. The investments underlying the life insurance contracts consist primarily of exchange-traded equity securities and mutual funds with quoted prices in active markets. In accordance with the three-tier fair value hierarchy, the Company determined the fair value using the cash surrender value of the life insurance, a Level 2 input as defined under the accounting guidance for fair value measurements. At June 30, 2018 and December 31, 2017, the Company’s cash surrender value of life insurance had a carrying amount of $15.7 million and $15.6 million, respectively.

In addition, the Company carries its contingent consideration liabilities related to acquisitions at fair value. In accordance with the three-tier fair value hierarchy, the Company determined the fair value of its contingent consideration liabilities using the income approach with assumed discount rates and payment probabilities. The income approach uses Level 3, or unobservable inputs as defined under the accounting guidance for fair value measurements. At June 30, 2018 and December 31, 2017, the Company’s contingent consideration liabilities had a fair value of $30.7 million and $30.5 million, respectively.

The carrying amounts of cash equivalents, short-term investments, accounts receivable and accounts payable and accrued expenses approximate fair value due to the short maturities of the respective instruments. The carrying values of long-term investments, line of credit and capital lease obligations approximate fair value. If the Company’s investments were measured at fair value, they would be categorized as Level 2 in the fair value hierarchy. If the Company’s line of credit was measured at fair value, it would be categorized as Level 2 in the fair value hierarchy. The estimated fair value of the Company’s 5.25% senior unsecured notes due 2023 was $735.0 million and $763.1 million, at June 30, 2018 and December 31, 2017, respectively, and was estimated using trading prices on such dates as Level 2 inputs to estimate fair value.

XML 19 R9.htm IDEA: XBRL DOCUMENT v3.10.0.1
Accounts Receivable and Net Revenue
6 Months Ended
Jun. 30, 2018
Text Block [Abstract]  
Accounts Receivable and Net Revenue
4.

Accounts Receivable and Net Revenue:

Accounts receivable, net consists of the following (in thousands):

 

     June 30, 2018      December 31, 2017  

Gross accounts receivable

   $ 1,918,787      $ 1,790,034  

Allowance for contractual adjustments and uncollectibles

     (1,390,790      (1,286,035
  

 

 

    

 

 

 
   $ 527,997      $ 503,999  
  

 

 

    

 

 

 

Patient service revenue is recognized at the time services are provided by the Company’s affiliated physicians. The Company’s performance obligations related to the delivery of services to patients are satisfied at the time of service. Accordingly, there are no performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period with respect to patient service revenue. Almost all of the Company’s patient service revenue is reimbursed by government-sponsored healthcare programs and third-party insurance payors. Payments for services rendered to the Company’s patients are generally less than billed charges. The Company monitors its revenue and receivables from these sources and records an estimated contractual allowance to properly account for the anticipated differences between billed and reimbursed amounts.

Accordingly, patient service revenue is presented net of an estimated provision for contractual adjustments and uncollectibles. The Company estimates allowances for contractual adjustments and uncollectibles on accounts receivable based upon historical experience and other factors, including days sales outstanding (“DSO”) for accounts receivable, evaluation of expected adjustments and delinquency rates, past adjustments and collection experience in relation to amounts billed, an aging of accounts receivable, current contract and reimbursement terms, changes in payor mix and other relevant information. Contractual adjustments result from the difference between the physician rates for services performed and the reimbursements by government-sponsored healthcare programs and third-party insurance payors for such services.

Collection of patient service revenue the Company expects to receive is normally a function of providing complete and correct billing information to the government-sponsored healthcare programs and third-party insurance payors within the various filing deadlines and typically occurs within 30 to 60 days of billing.

Some of the Company’s hospital agreements require hospitals to pay the Company administrative fees. Some agreements provide for fees if the hospital does not generate sufficient patient volume in order to guarantee that the Company receives a specified minimum revenue level. The Company also receives fees from hospitals for administrative services performed by its affiliated physicians providing medical director or other services at the hospital.

In addition, the Company generates revenue through its management services organization for services rendered under various coding and billing contracts. Contract terms are specific to each customer and may include a combination of a flat fee for coding of medical charts, a fixed fee per patient visit as well as a percentage of cash collections received by the providers. Revenue for flat and fixed fee arrangements is recognized in the month the coding occurs or the patient visit occurs. Revenue for percentage fees are recognized in the month that cash is collected for customers from payors.

The following table summarizes the Company’s net revenue by category (in thousands):

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2018      2017      2018      2017  

Net patient service revenue

   $ 763,667      $ 708,739      $ 1,520,040    $ 1,414,192

Hospital contract administrative fees

     95,534        75,604        186,773        147,869  

Management services and other

     56,717        58,601        110,962        116,480  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 915,918      $ 842,944      $ 1,817,775      $ 1,678,541  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

The approximate percentage of net patient service revenue by type of payor was as follows:

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2018     2017     2018     2017  

Contracted managed care

     70     71     70     71

Government

     25       24       25     24  

Other third-parties

     4       4       4       4  

Private-pay patients

     1       1       1       1  
  

 

 

   

 

 

   

 

 

   

 

 

 
     100     100     100     100
  

 

 

   

 

 

   

 

 

   

 

 

 
XML 20 R10.htm IDEA: XBRL DOCUMENT v3.10.0.1
Business Acquisitions, Joint Ventures and Goodwill
6 Months Ended
Jun. 30, 2018
Text Block [Abstract]  
Business Acquisitions, Joint Ventures and Goodwill
5.

Business Acquisitions, Joint Ventures and Goodwill:

During the six months ended June 30, 2018, the Company completed the acquisition of five physician group practices, including two radiology practices, one neonatology practice and two pediatric subspecialty practices. The acquisition-date fair value of the total consideration for the five acquisitions was $24.4 million. These acquisitions expanded the Company’s national network of physician practices. In connection with these acquisitions, the Company recorded goodwill of $15.5 million and other intangible assets consisting primarily of physician and hospital agreements of $8.9 million.

In addition, during the six months ended June 30, 2018, in connection with certain prior-period acquisitions, the Company paid $0.4 million for contingent consideration and $1.2 million for purchase consideration that had been held back pending satisfaction of certain conditions. All amounts except for the accretion recorded during 2018 were accrued as of December 31, 2017.

In connection with certain prior-period acquisitions, the Company also recorded a decrease in current assets of $1.2 million, a decrease in noncurrent assets of $1.5 million, an increase in current liabilities of $1.4 million and an increase in noncurrent liabilities of $1.2 million, with a corresponding net increase in goodwill of $5.3 million for measurement-period adjustments resulting from the finalization of acquisition accounting. The Company expects that $18.2 million of the goodwill recorded during the six months ended June 30, 2018 will be deductible for tax purposes.

In January 2018, the Company completed the sale of a controlling interest and the contribution of remaining assets to a joint venture related to the $46.0 million of assets held for sale at December 31, 2017. The Company accounts for its 49.0% economic interest in the joint venture as an equity method investment. The investment in this joint venture is included in other assets as presented in the Company’s Condensed Consolidated Balance Sheet.

The Company’s management services reporting unit has experienced lower operating results than previously forecasted primarily due to a slower rate of new customer bookings and an increase in customer termination activity. The Company continues to believe that the fair value of the reporting unit exceeds the carrying value, and accordingly the goodwill assigned to the management services reporting unit is not impaired Although the Company believes that the current assumptions and estimates used in its goodwill analysis are reasonable, supportable and appropriate, continued efforts to maintain or improve the performance of this business could be impacted by unfavorable or unforeseen changes which could impact the existing assumptions used in the impairment analysis. Various factors could reasonably be expected to unfavorably impact existing assumptions, primarily delays in new customer bookings and the related delay in revenue from new customers, increases in customer termination activity or increases in operating costs. Accordingly, there can be no assurance that the estimates and assumptions made for the purposes of the goodwill impairment analysis will prove to be accurate predictions of future performance. The carrying value of the Company’s management services reporting unit included goodwill of $321.6 million as of June 30, 2018. The Company will continue to closely monitor the performance of the management services reporting unit. If an impairment loss is required in a future period, it could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows and the trading price of the Company’s securities.

XML 21 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
Accounts Payable and Accrued Expenses
6 Months Ended
Jun. 30, 2018
Payables and Accruals [Abstract]  
Accounts Payable and Accrued Expenses
6.

Accounts Payable and Accrued Expenses:

Accounts payable and accrued expenses consist of the following (in thousands):

 

     June 30, 2018      December 31, 2017  

Accounts payable

   $ 28,377      $ 34,632  

Accrued salaries and bonuses

     144,911        225,429  

Accrued payroll taxes and benefits

     71,379        75,672  

Accrued professional liabilities

     35,253        37,912  

Accrued contingent consideration

     26,783        6,259  

Accrued interest

     5,077        4,495  

Other accrued expenses

     46,475        53,618  
  

 

 

    

 

 

 
   $ 358,255      $ 438,017  
  

 

 

    

 

 

 

The net decrease in accrued salaries and bonuses of $80.5 million from December 31, 2017 to June 30, 2018 is primarily due to the payment of performance-based incentive compensation, principally to the Company’s physicians, partially offset by performance-based incentive compensation accrued during the six months ended June 30, 2018. A majority of the Company’s payments for performance-based incentive compensation is paid annually during the first quarter.

XML 22 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
Common and Common Equivalent Shares
6 Months Ended
Jun. 30, 2018
Earnings Per Share [Abstract]  
Common and Common Equivalent Shares
7.

Common and Common Equivalent Shares:

Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share is calculated by dividing net income by the weighted average number of common and potential common shares outstanding during the period. Potential common shares consist of outstanding restricted stock, deferred stock and stock options and is calculated using the treasury stock method.

The calculation of shares used in the basic and diluted net income per common share calculation for the three and six months ended June 30, 2018 and 2017 is as follows (in thousands):

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2018      2017      2018      2017  

Weighted average number of common shares outstanding

     92,987        92,181        92,922        92,270  

Weighted average number of dilutive common share equivalents

     542        631        594        707  
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average number of common and common equivalent shares outstanding

     93,529        92,812        93,516        92,977  
  

 

 

    

 

 

    

 

 

    

 

 

 

Antidilutive securities not included in the diluted net income per common share calculation

     392        8        197        5  
  

 

 

    

 

 

    

 

 

    

 

 

 
XML 23 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stock Incentive Plans and Stock Purchase Plans
6 Months Ended
Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock Incentive Plans and Stock Purchase Plans
8.

Stock Incentive Plans and Stock Purchase Plans:

The Company’s Amended and Restated 2008 Incentive Compensation Plan, as amended (the “Amended and Restated 2008 Incentive Plan”) provides for grants of stock options, stock appreciation rights, restricted stock, deferred stock, and other stock-related awards and performance awards that may be settled in cash, stock or other property.

Under the Amended and Restated 2008 Incentive Plan, options to purchase shares of common stock may be granted at a price not less than the fair market value of the shares on the date of grant. The options must be exercised within 10 years from the date of grant and generally become exercisable on a pro rata basis over a three-year period from the date of grant. The Company issues new shares of its common stock upon exercise of its stock options. Restricted stock awards generally vest over periods of three years upon the fulfillment of specified service-based conditions and in certain instances performance-based conditions. Deferred stock awards generally vest upon the satisfaction of specified performance-based conditions and service-based conditions. The Company recognizes compensation expense related to its restricted stock and deferred stock awards ratably over the corresponding vesting periods. During the six months ended June 30, 2018, the Company granted 597,550 shares of restricted stock to its employees and non-employee directors under the Amended and Restated 2008 Incentive Plan. At June 30, 2018, the Company had 2.3 million shares available for future grants and awards under its Amended and Restated 2008 Incentive Plan.

Under the Company’s 1996 Non-Qualified Employee Stock Purchase Plan, as amended (the “ESPP”), employees are permitted to purchase the Company’s common stock at 85% of market value on January 1st, April 1st, July 1st and October 1st of each year. Under the Company’s 2015 Non-Qualified Stock Purchase Plan (the “SPP”), certain eligible non-employee service providers are permitted to purchase the Company’s common stock at 90% of market value on January 1st, April 1st, July 1st and October 1st of each year.

 

Each of the ESPP and the SPP provide for the issuance of an aggregate of 2.6 million shares of the Company’s common stock less the number of shares of common stock purchased under the other plan. The Company recognizes stock-based compensation expense for the discount received by participating employees and non-employee service providers. During the six months ended June 30, 2018, 182,888 shares in aggregate were issued under the ESPP and SPP. At June 30, 2018, the Company had approximately 1.8 million shares in aggregate reserved for issuance under the ESPP and SPP.

During the three and six months ended June 30, 2018 and 2017, the Company recognized stock-based compensation expense of $10.5 million and $20.4 million, and $7.3 million and $14.8 million, respectively.

XML 24 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
Common Stock Repurchase Program
6 Months Ended
Jun. 30, 2018
Text Block [Abstract]  
Common Stock Repurchase Program
9.

Common Stock Repurchase Program:

In July 2013, the Company’s Board of Directors authorized the repurchase of shares of the Company’s common stock up to an amount sufficient to offset the dilutive impact from the issuance of shares under the Company’s equity compensation programs. The share repurchase program allows the Company to make open market purchases from time-to-time based on general economic and market conditions and trading restrictions. The repurchase program also allows for the repurchase of shares of the Company’s common stock to offset the dilutive impact from the issuance of shares, if any, related to the Company’s acquisition program. During the six months ended June 30, 2018, the Company repurchased 1.2 million shares of its common stock for $52.2 million, inclusive of 54,909 shares withheld to satisfy minimum statutory withholding obligations of $2.5 million in connection with the vesting of restricted stock and stock option exercises during the three months ended June 30, 2018. The shares repurchased by the Company during the second quarter of 2018 completed the repurchases under the program with respect to issuances of shares under the Company’s equity compensation programs during 2018. The Company intends to utilize various methods to effect any future share repurchases, including, among others, open market purchases and accelerated share repurchase programs. The amount and timing of repurchases will depend upon several factors, including general economic and market conditions and trading restrictions.

XML 25 R15.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments and Contingencies
6 Months Ended
Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
10.

Commitments and Contingencies:

The Company expects that audits, inquiries and investigations from government authorities and agencies will occur in the ordinary course of business. Such audits, inquiries and investigations and their ultimate resolutions, individually or in the aggregate, could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows and the trading price of its securities. The Company has not included an accrual for these matters as of June 30, 2018 in its Condensed Consolidated Financial Statements, as the variables affecting any potential eventual liability depend on the currently unknown facts and circumstances that arise out of, and are specific to, any particular future audit, inquiry and investigation and cannot be reasonably estimated at this time.

In the ordinary course of business, the Company becomes involved in pending and threatened legal actions and proceedings, most of which involve claims of medical malpractice related to medical services provided by the Company’s affiliated physicians. The Company’s contracts with hospitals generally require the Company to indemnify them and their affiliates for losses resulting from the negligence of the Company’s affiliated physicians. The Company may also become subject to other lawsuits which could involve large claims and significant costs. The Company believes, based upon a review of pending actions and proceedings, that the outcome of such legal actions and proceedings will not have a material adverse effect on its business, financial condition, results of operations, cash flows and the trading price of its securities. The outcome of such actions and proceedings, however, cannot be predicted with certainty and an unfavorable resolution of one or more of them could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows and the trading price of its securities.

Although the Company currently maintains liability insurance coverage intended to cover professional liability and certain other claims, the Company cannot assure that its insurance coverage will be adequate to cover liabilities arising out of claims asserted against it in the future where the outcomes of such claims are unfavorable. With respect to professional liability risk, the Company generally self-insures a portion of this risk through its wholly owned captive insurance subsidiary. Liabilities in excess of the Company’s insurance coverage, including coverage for professional liability and certain other claims, could have a material adverse effect on the Company’s business, financial condition, results of operations, cash flows and the trading price of its securities.

XML 26 R16.htm IDEA: XBRL DOCUMENT v3.10.0.1
Basis of Presentation and New Accounting Pronouncements (Policies)
6 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In May 2014, the accounting guidance related to revenue recognition was amended to outline a single, comprehensive model for accounting for revenue from contracts with customers. The core principle of the new accounting guidance is to require an entity to recognize as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods or services as it transfers control to its customers. The guidance became effective for the Company on January 1, 2018 and was adopted on a full retrospective basis. The primary change for healthcare providers under the new guidance is the requirement to report the allowance for uncollectibles associated with patient responsibility amounts as a reduction in net revenue as opposed to bad debt expense, a component of operating expenses. The Company has historically included the allowance for uncollectibles associated with patient responsibility amounts with its allowance for contractual adjustments as a reduction in net revenue as such amounts are not material. Accordingly, the adoption of this guidance did not have an impact on our Consolidated Financial Statements, other than increased financial statement disclosures. The guidance requires increased disclosures, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. See Note 4 for more information.

New Accounting Pronouncements

New Accounting Pronouncements

In February 2016, the accounting guidance related to leases was issued that will require an entity to recognize leased assets and the rights and obligations created by those leased assets on the balance sheet and to disclose key information about the entity’s leasing arrangements. This guidance will become effective for the Company on January 1, 2019, with early adoption permitted. The Company expects that the adoption of this guidance will have a material impact on its Consolidated Balance Sheets and related disclosures, resulting from the recognition of significant right of use assets and related liabilities primarily related to its operating lease arrangements for space in hospitals and certain other facilities for its business and medical offices. The Company has completed the review of its existing lease portfolio and is accumulating all of the necessary information required to properly account for leases under the new guidance. The Company has selected a software application, inclusive of a lease administration module and an accounting module, and has begun the implementation process. The Company is in the process of designing workflows, business processes and internal controls surrounding the lease accounting process in order to meet the reporting and disclosure requirements. The Company’s implementation and continued evaluation of this new guidance and its impacts are expected to continue through the third quarter of 2018.

XML 27 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
Cash Equivalents and Investments (Tables)
6 Months Ended
Jun. 30, 2018
Investments, Debt and Equity Securities [Abstract]  
Schedule of Investments

Investments held at June 30, 2018 and December 31, 2017 are summarized as follows (in thousands):

 

     June 30, 2018      December 31, 2017  
     Short-Term      Long-Term      Short-Term      Long-Term  

Municipal debt securities

   $ 8,432      $ 48,613      $ 8,312      $ 46,195  

Federal home loan securities

     —          36,393        1,000        30,322  

Certificates of deposit

     1,470        5,180        980        4,165  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 9,902      $ 90,186      $ 10,292      $ 80,682  
  

 

 

    

 

 

    

 

 

    

 

 

 
Schedule of Contractual Maturities of Long-Term Investments

Contractual maturities of long-term investments are summarized as follows (in thousands):

 

     June 30, 2018      December 31, 2017  

Due after one year through five years

   $ 89,186      $ 78,561  

Due after five years through six years

     1,000        2,121  
  

 

 

    

 

 

 
   $ 90,186      $ 80,682  
  

 

 

    

 

 

 
XML 28 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1
Accounts Receivable and Net Revenue (Tables)
6 Months Ended
Jun. 30, 2018
Text Block [Abstract]  
Schedule of Accounts Receivable, Net

Accounts receivable, net consists of the following (in thousands):

 

     June 30, 2018      December 31, 2017  

Gross accounts receivable

   $ 1,918,787      $ 1,790,034  

Allowance for contractual adjustments and uncollectibles

     (1,390,790      (1,286,035
  

 

 

    

 

 

 
   $ 527,997      $ 503,999  
  

 

 

    

 

 

 
Schedule of Net Revenue

The following table summarizes the Company’s net revenue by category (in thousands):

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2018      2017      2018      2017  

Net patient service revenue

   $ 763,667      $ 708,739      $ 1,520,040    $ 1,414,192

Hospital contract administrative fees

     95,534        75,604        186,773        147,869  

Management services and other

     56,717        58,601        110,962        116,480  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 915,918      $ 842,944      $ 1,817,775      $ 1,678,541  
  

 

 

    

 

 

    

 

 

    

 

 

 
Schedule of Percentage of Net Patient Service Revenue

The approximate percentage of net patient service revenue by type of payor was as follows:

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2018     2017     2018     2017  

Contracted managed care

     70     71     70     71

Government

     25       24       25     24  

Other third-parties

     4       4       4       4  

Private-pay patients

     1       1       1       1  
  

 

 

   

 

 

   

 

 

   

 

 

 
     100     100     100     100
  

 

 

   

 

 

   

 

 

   

 

 

 
XML 29 R19.htm IDEA: XBRL DOCUMENT v3.10.0.1
Accounts Payable and Accrued Expenses (Tables)
6 Months Ended
Jun. 30, 2018
Payables and Accruals [Abstract]  
Schedule of Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following (in thousands):

 

     June 30, 2018      December 31, 2017  

Accounts payable

   $ 28,377      $ 34,632  

Accrued salaries and bonuses

     144,911        225,429  

Accrued payroll taxes and benefits

     71,379        75,672  

Accrued professional liabilities

     35,253        37,912  

Accrued contingent consideration

     26,783        6,259  

Accrued interest

     5,077        4,495  

Other accrued expenses

     46,475        53,618  
  

 

 

    

 

 

 
   $ 358,255      $ 438,017  
  

 

 

    

 

 

 
XML 30 R20.htm IDEA: XBRL DOCUMENT v3.10.0.1
Common and Common Equivalent Shares (Tables)
6 Months Ended
Jun. 30, 2018
Earnings Per Share [Abstract]  
Schedule of Calculation of Shares Used in Basic and Diluted Net Income Per Share

The calculation of shares used in the basic and diluted net income per common share calculation for the three and six months ended June 30, 2018 and 2017 is as follows (in thousands):

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2018      2017      2018      2017  

Weighted average number of common shares outstanding

     92,987        92,181        92,922        92,270  

Weighted average number of dilutive common share equivalents

     542        631        594        707  
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average number of common and common equivalent shares outstanding

     93,529        92,812        93,516        92,977  
  

 

 

    

 

 

    

 

 

    

 

 

 

Antidilutive securities not included in the diluted net income per common share calculation

     392        8        197        5  
  

 

 

    

 

 

    

 

 

    

 

 

 
XML 31 R21.htm IDEA: XBRL DOCUMENT v3.10.0.1
Basis of Presentation and New Accounting Pronouncements - Additional Information (Detail)
Jun. 30, 2018
Jan. 31, 2018
Basis Of Presentation [Line Items]    
Equity method ownership percentage in joint venture 49.00%  
Unnamed Corporate Joint Venture [Member]    
Basis Of Presentation [Line Items]    
Equity method ownership percentage in joint venture 37.50% 49.00%
XML 32 R22.htm IDEA: XBRL DOCUMENT v3.10.0.1
Cash Equivalents and Investments - Additional Information (Detail) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Cash Equivalents And Investments [Line Items]    
Cash equivalents $ 2.4 $ 9.2
Cash Equivalents [Member]    
Cash Equivalents And Investments [Line Items]    
Cash equivalents $ 2.4 $ 9.2
Maximum [Member]    
Cash Equivalents And Investments [Line Items]    
Long-term investments maturity period, in years 6 years  
Short-Term investments maturity period, in years 1 year  
Minimum [Member]    
Cash Equivalents And Investments [Line Items]    
Long-term investments maturity period, in years 1 year  
XML 33 R23.htm IDEA: XBRL DOCUMENT v3.10.0.1
Cash Equivalents and Investments - Schedule of Investments (Detail) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Schedule of Held-to-maturity Securities [Line Items]    
Short-Term $ 9,902 $ 10,292
Long-Term 90,186 80,682
Municipal Debt Securities [Member]    
Schedule of Held-to-maturity Securities [Line Items]    
Short-Term 8,432 8,312
Long-Term 48,613 46,195
Federal Home Loan Securities [Member]    
Schedule of Held-to-maturity Securities [Line Items]    
Short-Term   1,000
Long-Term 36,393 30,322
Certificates of Deposit [Member]    
Schedule of Held-to-maturity Securities [Line Items]    
Short-Term 1,470 980
Long-Term $ 5,180 $ 4,165
XML 34 R24.htm IDEA: XBRL DOCUMENT v3.10.0.1
Cash Equivalents and Investments - Schedule of Contractual Maturities of Long-Term Investments (Detail) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Investments, Debt and Equity Securities [Abstract]    
Due after one year through five years $ 89,186 $ 78,561
Due after five years through [six] years 1,000 2,121
Total $ 90,186 $ 80,682
XML 35 R25.htm IDEA: XBRL DOCUMENT v3.10.0.1
Fair Value Measurements - Additional Information (Detail) - USD ($)
$ in Millions
Jun. 30, 2018
Dec. 31, 2017
Fair Value Measurements Disclosure [Line Items]    
Money market funds carrying amount $ 2.4 $ 9.2
Carrying amount of cash surrender value of life insurance 15.7 15.6
Contingent consideration liabilities related to acquisitions 30.7 30.5
5.25% Senior Unsecured Notes Due 2023 [Member]    
Fair Value Measurements Disclosure [Line Items]    
Estimated fair value of notes $ 735.0 $ 763.1
Debt instrument interest rate 5.25%  
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.10.0.1
Accounts Receivable and Net Revenue - Schedule of Accounts Receivable, Net (Detail) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Receivables [Abstract]    
Gross accounts receivable $ 1,918,787 $ 1,790,034
Allowance for contractual adjustments and uncollectibles (1,390,790) (1,286,035)
Accounts receivable, net $ 527,997 $ 503,999
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.10.0.1
Accounts Receivable and Net Revenue - Schedule of Net Revenue (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Net patient service revenue        
Disaggregation of Revenue [Abstract]        
Net revenue $ 763,667 $ 708,739 $ 1,520,040 $ 1,414,192
Hospital contract administrative fees        
Disaggregation of Revenue [Abstract]        
Net revenue 95,534 75,604 186,773 147,869
Management services and other        
Disaggregation of Revenue [Abstract]        
Net revenue 56,717 58,601 110,962 116,480
Health Care        
Disaggregation of Revenue [Abstract]        
Net revenue $ 915,918 $ 842,944 $ 1,817,775 $ 1,678,541
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.10.0.1
Accounts Receivable and Net Revenue - Schedule of Net Patient Service Revenue by Type of Payor (Detail)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Health Care Organization, Receivable and Revenue Disclosures [Line Items]        
Percentage of net patient service revenue 100.00% 100.00% 100.00% 100.00%
Contracted Managed Care [Member]        
Health Care Organization, Receivable and Revenue Disclosures [Line Items]        
Percentage of net patient service revenue 70.00% 71.00% 70.00% 71.00%
Government [Member]        
Health Care Organization, Receivable and Revenue Disclosures [Line Items]        
Percentage of net patient service revenue 25.00% 24.00% 25.00% 24.00%
Other Third-Parties [Member]        
Health Care Organization, Receivable and Revenue Disclosures [Line Items]        
Percentage of net patient service revenue 4.00% 4.00% 4.00% 4.00%
Private-Pay Patients [Member]        
Health Care Organization, Receivable and Revenue Disclosures [Line Items]        
Percentage of net patient service revenue 1.00% 1.00% 1.00% 1.00%
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.10.0.1
Business Acquisitions, Joint Ventures and Goodwill - Additional Information (Detail)
$ in Thousands
6 Months Ended
Jun. 30, 2018
USD ($)
Company
Dec. 31, 2017
USD ($)
Business Acquisition [Line Items]    
Number of physician group practices acquired | Company 5  
Number of neonatology practices acquired | Company 1  
Number of other pediatric subspecialty practices acquired | Company 2  
Number of radiology practices acquired | Company 2  
Total business acquisition consideration $ 24,400  
Goodwill 4,304,740 $ 4,283,963
Contingent consideration payments related to prior-period acquisitions 400  
Purchase consideration payments related to prior-period acquisitions 1,200  
Assets held for sale $ 46,000  
Sale of equity method investments 49.00%  
Management Services Reporting Unit [Member]    
Business Acquisition [Line Items]    
Goodwill $ 321,600  
Physician Group [Member]    
Business Acquisition [Line Items]    
Goodwill 15,500  
Other intangible assets 8,900  
Prior-Period Acquisitions [Member]    
Business Acquisition [Line Items]    
Decrease in current assets 1,200  
Decrease in noncurrent assets 1,500  
Decrease in current liabilities 1,400  
Increase in noncurrent liabilities 1,200  
Net increase in goodwill resulting from finalization of tax acquisition accounting 5,300  
Goodwill deductible for tax purposes $ 18,200  
XML 40 R30.htm IDEA: XBRL DOCUMENT v3.10.0.1
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Detail) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Payables and Accruals [Abstract]    
Accounts payable $ 28,377 $ 34,632
Accrued salaries and bonuses 144,911 225,429
Accrued payroll taxes and benefits 71,379 75,672
Accrued professional liabilities 35,253 37,912
Accrued contingent consideration 26,783 6,259
Accrued interest 5,077 4,495
Other accrued expenses 46,475 53,618
Accounts payable and accrued expenses, total $ 358,255 $ 438,017
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.10.0.1
Accounts Payable and Accrued Expenses - Additional Information (Detail)
$ in Millions
6 Months Ended
Jun. 30, 2018
USD ($)
Payables and Accruals [Abstract]  
Net decrease in accrued salaries and bonuses $ 80.5
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.10.0.1
Common and Common Equivalent Shares - Schedule of Calculation of Shares Used in Basic and Diluted Net Income Per Share (Detail) - shares
shares in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Earnings Per Share [Abstract]        
Weighted average number of common shares outstanding 92,987 92,181 92,922 92,270
Weighted average number of dilutive common share equivalents 542 631 594 707
Weighted average number of common and common equivalent shares outstanding 93,529 92,812 93,516 92,977
Antidilutive securities not included in the diluted net income per common share calculation 392 8 197 5
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stock Incentive Plans and Stock Purchase Plans - Additional Information (Detail) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Common stock, aggregate shares authorized 200,000,000   200,000,000   200,000,000
Stock-based compensation expense $ 10.5 $ 7.3 $ 20.4 $ 14.8  
Stock Option [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting period     10 years    
Stock Option [Member] | Maximum [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Vesting period of options, maximum years     10 years    
Restricted Stock [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Award vesting period     3 years    
1996 Non-Qualified Employee Stock Purchase Plan [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of market value of common stock at which employees are permitted to purchase     85.00%    
2015 Non-Qualified Stock Purchase Plan [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Percentage of market value of common stock at which employees are permitted to purchase     90.00%    
Amended and Restated 2008 Plan [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Shares available for future grants and awards under Stock Incentive Plans 2,300,000   2,300,000    
Restricted stock granted     597,550    
1996 Non-Qualified Employee Stock Purchase Plan and 2015 Non-Qualified Stock Purchase Plan [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Aggregate number Shares issued under Stock Purchase Plans     182,888    
Common stock, aggregate shares authorized 2,600,000   2,600,000    
Common stock, reserved for issuance 1,800,000   1,800,000    
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.10.0.1
Common Stock Repurchase Program - Additional Information (Detail)
$ in Millions
6 Months Ended
Jun. 30, 2018
USD ($)
shares
Common Stock [Line Items]  
Common stock repurchased | $ $ 52.2
Common Stock [Member]  
Common Stock [Line Items]  
Repurchased common stock, shares | shares 1,200,000
Restricted Stock [Member]  
Common Stock [Line Items]  
Number of shares withheld to satisfy minimum statutory tax withholding obligations | shares 54,909
Amount withheld to satisfy minimum statutory tax withholding obligations | $ $ 2.5
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