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What changed in NATIONAL HEALTHCARE CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of NATIONAL HEALTHCARE CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+195 added−189 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-16)

Top changes in NATIONAL HEALTHCARE CORP's 2024 10-K

195 paragraphs added · 189 removed · 146 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

44 edited+18 added−9 removed73 unchanged
Biggest changeLouis, MO June 2022 Hospice New Agency 1 agency Cedar Bluff, VA March 2023 Skilled Nursing Acquisition 66 beds Nashville, TN May 2023 Homecare New Agency 1 agency Tallahassee, FL May 2023 Assisted Living Facility New Operations 135 units Vero Beach, FL July 2023 Assisted Living Facility New Operations 95 units Merritt Island, FL July 2023 Assisted Living Facility New Operations 100 units Stuart, FL July 2023 Business Segments The Company has two reportable operating segments: (1) inpatient services, which includes the operation of skilled nursing facilities, assisted and independent living facilities, and behavioral health hospitals and (2) homecare and hospice services.
Biggest changeLouis, MO June 2022 Hospice New Agency 1 agency Cedar Bluff, VA March 2023 Skilled Nursing Acquisition 66 beds Nashville, TN May 2023 Homecare New Agency 1 agency Tallahassee, FL May 2023 Assisted Living Facility New Operations 135 units Vero Beach, FL July 2023 Assisted Living Facility New Operations 95 units Merritt Island, FL July 2023 Assisted Living Facility New Operations 100 units Stuart, FL July 2023 Hospice New Agency 1 agency Morristown, TN April 2024 Hospice New Agency 1 agency Lawrenceburg, TN July 2024 Hospice New Agency 1 agency Wytheville, VA August 2024 Hospice New Agency 1 agency Clinton, TN October 2024 On August 1, 2024, the Company purchased the White Oak portfolio, including its long-term care pharmacy.
We believe that by providing and emphasizing rehabilitative, as well as patient-centered healthcare services, we can broaden our patient base and to differentiate our operations from competing operations. As we continue to expand into all areas of senior health care, we monitor proposed or existing competing operations.
We believe that by providing and emphasizing rehabilitative, as well as patient-centered healthcare services, we can broaden our patient base and differentiate our operations from competing operations. As we continue to expand into all areas of senior health care, we monitor proposed or existing competing operations.
It also uses a sixth non-case mix component to cover utilization of skilled nursing facility (“SNF”) resources that do not vary depending on resident characteristics. 7 Table of Contents In July 2023, CMS released its final rule outlining fiscal year 2024 Medicare payment rates and policy changes for skilled nursing facilities, which began on October 1, 2023.
It also uses a sixth non-case mix component to cover utilization of skilled nursing facility (“SNF”) resources that do not vary depending on resident characteristics. 7 Table of Contents In July 2024, CMS released its final rule outlining fiscal year 2025 Medicare payment rates and policy changes for skilled nursing facilities, which began on October 1, 2024.
Our licensed therapists provide physical, speech, respiratory and occupational therapy for patients recovering from strokes, heart attacks, orthopedic conditions, neurological illnesses, or other illnesses, injuries, or disabilities. We maintained a rehabilitation staff of over 1,200 highly trained, professional therapists in 2023. Most of our rehabilitative services are for patients in our owned, leased and managed skilled nursing facilities.
Our licensed therapists provide physical, speech, respiratory and occupational therapy for patients recovering from strokes, heart attacks, orthopedic conditions, neurological illnesses, or other illnesses, injuries, or disabilities. We maintained a rehabilitation staff of over 1,200 highly trained, professional therapists in 2024. Most of our rehabilitative services are for patients in our owned, leased and managed skilled nursing facilities.
The I-SNP receives a per member, per month premium from Medicare which covers the members same health care benefits as original Medicare, as well as additional benefits including preventive screenings and routine vision coverage. At December 31, 2023, the I-SNP operated in the states of Tennessee, Missouri, and South Carolina with approximately 1,200 members enrolled in the plan. Other Revenues.
The I-SNP receives a per member, per month premium from Medicare which covers the members same health care benefits as original Medicare, as well as additional benefits including preventive screenings and routine vision coverage. At December 31, 2024, the I-SNP operated in the states of Tennessee, Missouri, and South Carolina with approximately 1,200 members enrolled in the plan. Other Revenues.
Some states use, or have applied to use, waivers granted by CMS to implement expansion, impose different eligibility or enrollment restrictions, or otherwise implement programs that vary from federal standards. Effective July 1, 2023 and for the fiscal year 2024, the state of Tennessee implemented specific individual nursing facility increases.
Some states use, or have applied to use, waivers granted by CMS to implement expansion, impose different eligibility or enrollment restrictions, or otherwise implement programs that vary from federal standards. Effective July 1, 2024 and for the fiscal year 2025, the state of Tennessee implemented specific individual nursing facility increases.
Also, to foster a stronger sense of ownership, we offer an Employee Stock Purchase Plan where partners may purchase company stock through payroll deduction. 9 Table of Contents We face competition in employing and retaining nurses, technicians, aides, and other high-quality professional and non–professional employees.
Also, to foster a stronger sense of ownership, we offer an Employee Stock Purchase Plan where partners may purchase company stock through payroll deductions. 9 Table of Contents We face competition in employing and retaining nurses, technicians, aides, and other high-quality professional and non–professional employees.
In addition, our facilities provide licensed therapy services, quality nutrition services, social services, activities, and housekeeping and laundry services. Revenues from the 60 facilities we own or lease are reported as net patient revenues in our financial statements. Management fee income is recorded as other revenues from the eight facilities that we manage.
In addition, our facilities provide licensed therapy services, quality nutrition services, social services, activities, and housekeeping and laundry services. Revenues from the 72 facilities we own or lease are reported as net patient revenues in our financial statements. Management fee income is recorded as other revenues from the eight facilities that we manage.
We also own the real estate of 10 healthcare properties and lease these properties to third party operators. We operate in 8 states and our operations are primarily located in the Southeastern and Midwestern parts of the United States.
We also own the real estate of 10 healthcare properties and lease these properties to third party operators. We operate in 9 states and our operations are primarily located in the Southeastern and Midwestern parts of the United States.
However, we also provide services to 41 additional health care providers. Our rates for these services are competitive with other market rates. ● Medical Specialty Units.
However, we also provide services to 50 additional health care providers. Our rates for these services are competitive with other market rates. ● Medical Specialty Units.
A second wholly owned insurance subsidiary is licensed in the Cayman Islands and provides general and professional liability coverage in substantially all of NHC’s owned, leased and managed healthcare facilities. ● Rental Income. The healthcare properties currently owned and leased to third party operators include nine skilled nursing facilities and one assisted living communities. Government Stimulus Income.
A second wholly owned insurance subsidiary is licensed in the Cayman Islands and provides general and professional liability coverage in substantially all of NHC’s owned, leased and managed healthcare facilities. ● Rental Income. The healthcare properties currently owned and leased to third party operators include nine skilled nursing facilities and one assisted living community. Government Grant Income.
All hospice care and services offered to patients and their families must follow an individualized written plan of care that meets the patient’s needs. ● Pharmacy Operations. At December 31, 2023, we operated four regional pharmacy locations (two locations in Tennessee and one location each in South Carolina and Missouri).
All hospice care and services offered to patients and their families must follow an individualized written plan of care that meets the patient’s needs. ● Pharmacy Operations. At December 31, 2024, we operated five regional pharmacy locations (two locations each in Tennessee and South Carolina and one location in Missouri).
We believe reporting occupancy based on operational beds is consistent with industry practice and provides a more meaningful measure of performance. Year Ended December 31, 2023 2022 2021 Overall census 87.9% 83.8% 80.6% ● Rehabilitative Services.
We believe reporting occupancy based on operational beds is consistent with industry practice and provides a more meaningful measure of performance. Year Ended December 31, 2024 2023 2022 Overall census 88.6% 87.9% 83.8% ● Rehabilitative Services.
The following table sets forth sources of net patient revenues for the periods indicated: Year Ended December 31, Source 2023 2022 2021 Medicare 34% 37% 36% Managed Care 10% 10% 11% Medicaid 30% 28% 29% Private Pay and Other 26% 25% 24% Total 100% 100% 100% We attempt to attract an increased percentage of Medicare and private pay patients by providing rehabilitative and other post–acute care services.
The following table sets forth sources of net patient revenues for the periods indicated: Year Ended December 31, Source 2024 2023 2022 Medicare 33% 34% 37% Managed Care 10% 10% 10% Medicaid 29% 30% 28% Private Pay and Other 28% 26% 25% Total 100% 100% 100% We attempt to attract an increased percentage of Medicare and private pay patients by providing rehabilitative and other post–acute care services.
As of December 31, 2023, we perform management services for eleven healthcare facilities and accounting and financial services for 16 healthcare facilities. ● Insurance Services. NHC owns a Tennessee domiciled insurance company that provides workers’ compensation coverage to substantially all of NHC's owned, leased and managed healthcare facilities.
As of December 31, 2024, we perform management services for eleven healthcare facilities and accounting and financial services for 15 healthcare facilities. ● Insurance Services. NHC owns a Tennessee domiciled insurance company that provides workers’ compensation coverage to substantially all of NHC's owned, leased and managed healthcare facilities.
The services we provide include a comprehensive range of health care services. In fiscal 2023, 95.3% of our net operating revenues were derived from such health care services. Highlights of health care services activities during 2023 were as follows: ● Skilled Nursing Facilities.
The services we provide include a comprehensive range of health care services. In fiscal 2024, 95.7% of our net operating revenues were derived from such health care services. Highlights of health care services activities during 2024 were as follows: ● Skilled Nursing Facilities.
The FY2024 hospice payment update also includes an update to the statutory aggregate cap amount, which limits the overall payments per patient that are made annually. The cap amount for FY2024 is $33,494. 8 Table of Contents Medicaid Legislation and Regulations Skilled Nursing Facilities State Medicaid plans subject to budget constraints are of particular concern to us.
The FY2025 hospice payment update also includes an update to the statutory aggregate cap amount, which limits the overall payments per patient that are made annually. The cap amount for FY2025 is $34,465. 8 Table of Contents Medicaid Legislation and Regulations Skilled Nursing Facilities State Medicaid plans subject to budget constraints are of particular concern to us.
We also conduct an "Administrator in Training" course, which is 24 months in duration, for the professional training of skilled nursing facility administrators. Presently, we have six (four male and two female) full–time individuals in this program. All six of our regional vice presidents and 52 of our 68 health care center administrators are graduates of this program.
We also conduct an "Administrator in Training" course, which is 24 months in duration, for the professional training of skilled nursing facility administrators. Presently, we have six (two male and four female) full–time individuals in this program. Six of our seven regional vice presidents and 59 of our 80 health care center administrators are graduates of this program.
We generate non–operating income from equity in earnings of unconsolidated investments, dividends and realized gains and losses on marketable securities, interest income, and other miscellaneous non–operating income. 4 Table of Contents Quality of Patient Care CMS introduced the Five-Star Quality Rating System to help consumers, their families and caregivers compare skilled nursing facilities more easily.
We generate non–operating income from equity in earnings of unconsolidated investments, dividends and realized gains and losses on marketable securities, interest income, and other miscellaneous non–operating income. 4 Table of Contents Quality of Patient Care The Centers for Medicare and Medicaid Services (“CMS”) introduced the Five-Star Quality Rating System to help consumers, their families and caregivers compare skilled nursing facilities more easily.
For the years ended December 31, 2023, 2022 and 2021, we have recorded $20,214,000, $19,442,000 and $20,482,000, respectively, due to these supplemental Medicaid payments. We have recorded these payments in net patient revenues in our consolidated statements of operations.
For the years ended December 31, 2024, 2023 and 2022, we have recorded $12,749,000, $20,214,000 and $19,442,000, respectively, due to these supplemental Medicaid payments. We have recorded these payments in net patient revenues in our consolidated statements of operations.
We generate revenues from management, accounting and financial services to third party operators of healthcare facilities, from insurance services to our managed healthcare facilities, and from rental income. In fiscal 2023, 4.7% of our net operating revenues were derived from such sources. The significant sources of our other revenues are described as follows: ● Management, Accounting and Financial Services.
We generate revenues from management, accounting and financial services to third party operators of healthcare facilities, from insurance services to our managed healthcare facilities, and from rental income. In fiscal 2024, 3.5% of our net operating revenues were derived from such sources. The significant sources of our other revenues are described as follows: ● Management, Accounting and Financial Services.
Our development goal is to link our skilled nursing facilities with our senior living communities, home health and hospice operations, and behavioral health hospitals; therefore, obtaining a competitive advantage for our operations. Human Capital Employees As of December 31, 2023, we had 13,123 full-time and part-time employees (“partners”) through our Administrative Services Contractor (National Health Corporation).
Our goal is to link our skilled nursing facilities with our senior living communities, home health operations, hospice operations, and behavioral health hospitals; therefore, obtaining a competitive advantage for our operations. Human Capital Employees As of December 31, 2024, we had 14,962 full-time and part-time employees (“partners”), mainly through our Administrative Services Contractor (National Health Corporation).
We perform resident assessments to determine what services are desired or required and our qualified staff encourages residents to participate in a range of activities. In 2023, the rate of occupancy was 78.5% compared to 71.6% in 2022.
We perform resident assessments to determine what services are desired or required and our qualified staff encourages residents to participate in a range of activities. In 2024, the rate of occupancy was 81.1% compared to 78.5% in 2023.
We provide hospice care through Caris Healthcare, L.P. (“Caris”), a wholly owned subsidiary of NHC. Caris specializes in providing hospice and palliative care to over 1,268 patients per day in 30 locations in Georgia, Missouri, South Carolina, Tennessee, and Virginia.
We provide hospice care through Caris Healthcare (“Caris”), a wholly owned subsidiary of NHC. Caris specializes in providing hospice and palliative care to over 1,514 patients per day in 33 locations in Georgia, Missouri, South Carolina, Tennessee, and Virginia.
In July 2023, CMS released its final rule outlining fiscal year 2024 Medicare payment rates. CMS issued a rate increase of 3.1%, or $780 million, effective October 1, 2023. This increase is the result of a 3.3% market basket increase reduced by a 0.2% productivity adjustment.
In July 2024, CMS released its final rule outlining fiscal year 2025 Medicare payment rates. CMS issued a rate increase of 2.9%, or $790 million, effective October 1, 2024. This increase is the result of a 3.4% market basket increase reduced by a 0.5% productivity adjustment.
Under the Medicare reimbursement payment system, we receive a prospectively determined amount per patient per 30-day period of care. Under our managed care contracts, we may receive a period of care payment or be paid by a per-visit payment model. In 2023, we served an average census of 3,321 patients and provided 309,929 visits. ● Hospice Agencies .
Under the Medicare reimbursement payment system, we receive a prospectively determined amount per patient per 30-day period of care. Under our managed care contracts, we may receive a period of care payment or be paid by a per-visit payment model. In 2024, we served an average census of 3,409 patients and provided 311,520 visits. ● Hospice Agencies .
The tables below summarize NHC's overall performance in these Five-Star ratings versus the skilled nursing industry as of December 31, 2023: NHC Ratings Industry Ratings Total number of skilled nursing facilities, end of period 68 Number of 4 and 5-star rated skilled nursing facilities 40 Percentage of 4 and 5-star rated skilled nursing facilities 59% 36% Average rating for all skilled nursing facilities, end of period 3.6 2.9 Development and Growth We are undertaking to expand our post–acute and senior health care operations while protecting our existing operations and markets.
The tables below summarize NHC's overall performance in these Five-Star ratings versus the skilled nursing industry as of December 31, 2024: NHC Ratings Industry Ratings Total number of skilled nursing facilities, end of period 80 Number of 4 and 5-star rated skilled nursing facilities 46 Percentage of 4 and 5-star rated skilled nursing facilities 57% 35% Average rating for all skilled nursing facilities, end of period 3.6 2.8 Development and Growth We are undertaking to expand our post–acute and senior health care operations while protecting our existing operations and markets.
These units are rented by the month; thus, these facilities offer an expansion of our continuum of care. We believe these independent living units offer a positive marketing aspect to all our senior care offerings and services. In 2023 and 2022, the rate of occupancy was 89.0%.
These units are rented by the month; thus, these facilities offer an expansion of our continuum of care. We believe these independent living units offer a positive marketing aspect to all our senior care offerings and services. In 2024, the rate of occupancy was 93.2% compared to 89.0% in 2023. ● Behavioral Health Hospitals.
We estimate the resulting increase in revenue for the 2024 fiscal year will be approximately $5,000,000 annually, or $1,250,000 per quarter. We have also received from many of the states in which we operate a supplemental Medicaid payment to help mitigate the inflationary labor and medical supplies costs resulting from the pandemic.
Upon CMS' approval, we estimate the resulting increase in revenue for the 2025 fiscal year will be approximately $6,600,000 annually, or $1,650,000 per quarter. We have also received from many of the states in which we operate a supplemental Medicaid payment to help mitigate the inflationary labor and healthcare workforce crisis.
Type of Operation Description Size Location Placed in Service Hospice Acquisition 28 agencies Various June 2021 Homecare New Agency 1 agency Anderson, SC January 2022 Hospice New Agency 1 agency Tullahoma, TN March 2022 Behavioral Health Hospital New Facility 64 beds Knoxville, TN April 2022 Behavioral Health Hospital New Facility 16 beds St.
The following table lists our recent construction and purchase activities. Type of Operation Description Size Location Placed in Service Homecare New Agency 1 agency Anderson, SC January 2022 Hospice New Agency 1 agency Tullahoma, TN March 2022 Behavioral Health Hospital New Facility 64 beds Knoxville, TN April 2022 Behavioral Health Hospital New Facility 16 beds St.
There are no limits to the number of periods of care a beneficiary who remains eligible for the home health benefit can receive. While payment for each 30-day period of care is adjusted to reflect the beneficiary’s health condition and needs, a special outlier provision exists to ensure appropriate payment for those beneficiaries that have the most expensive care needs.
While payment for each 30-day period of care is adjusted to reflect the beneficiary’s health condition and needs, a special outlier provision exists to ensure appropriate payment for those beneficiaries that have the most expensive care needs. The payment under the Medicare program is also adjusted for certain variables.
The payment under the Medicare program is also adjusted for certain variables. In November 2023, CMS released its final rule outlining fiscal year 2024 Medicare payment rates. CMS projects payments to home health agencies in fiscal year 2024 will increase in aggregate by 0.8%, or $140 million.
In November 2024, CMS released its final rule outlining fiscal year 2025 Medicare payment rates. CMS projects payments to home health agencies in fiscal year 2025 will increase by 0.5% or $85 million, relative to the prior year.
Although payment rates vary among these sources, market forces and costs largely determine these rates. Private paying patients, private insurance carriers and the Veterans Administration generally pay based on the center's charges or specifically negotiated contracts. We contract with managed care organizations ("MCO's") and insurance carriers for the provision of healthcare services by our owned, leased and managed healthcare facilities.
Private pay, managed care, and other payment sources include commercial insurance, individual patient funds, managed care plans and the Veterans Administration. Although payment rates vary among these sources, market forces and costs largely determine these rates. Private paying patients, private insurance carriers and the Veterans Administration generally pay based on the center's charges or specifically negotiated contracts.
Description of the Business The following table summarizes our operations by ownership status as of December 31, 2023: Owned Leased Managed Total Skilled Nursing Facilities Number of facilities 28 32 8 68 Percentage of total 41.2% 47.0% 11.8% 100.0% Licensed beds 3,526 4,227 979 8,732 Percentage of total 40.4% 48.4% 11.2% 100.0% Assisted Living Facilities Number of facilities 17 7 2 26 Percentage of total 65.4% 26.9% 7.7% 100.0% Units 1,293 174 34 1,501 Percentage of total 86.1% 11.6% 2.3% 100.0% Independent Living Facilities Number of facilities 1 3 1 5 Percentage of total 20.0% 60.0% 20.0% 100.0% Retirement apartments 93 245 137 475 Percentage of total 19.6% 51.6% 28.8% 100.0% Behavioral Health Hospitals Number of facilities 3 – – 3 Percentage of total 100.0% – – 100.0% Licensed beds 96 – – 96 Percentage of total 100.0% – – 100.0% Homecare Agencies 35 – – 35 Hospice Agencies 30 – – 30 2 Table of Contents Net Patient Revenues.
Description of the Business The following table summarizes our operations by ownership status as of December 31, 2024: Owned Leased Managed Total Skilled Nursing Facilities Number of facilities 43 29 8 80 Percentage of total 53.7% 36.3% 10.0% 100.0% Licensed beds 5,503 3,859 979 10,341 Percentage of total 53.2% 37.3% 9.5% 100.0% Assisted Living Facilities Number of facilities 19 5 2 26 Percentage of total 73.1% 19.2% 7.7% 100.0% Units 1,309 70 34 1,413 Percentage of total 92.6% 5.0% 2.4% 100.0% Independent Living Facilities Number of facilities 5 3 1 9 Percentage of total 55.6% 33.3% 11.1% 100.0% Retirement apartments 396 245 136 777 Percentage of total 51.0% 31.5% 17.5% 100.0% Behavioral Health Hospitals Number of facilities 3 – – 3 Percentage of total 100.0% – – 100.0% Licensed beds 102 – – 102 Percentage of total 100.0% – – 100.0% Homecare Agencies 34 – – 34 Hospice Agencies 33 – – 33 2 Table of Contents Net Patient Revenues.
Through recycling programs, we are working to reduce the amount of waste sent to landfills. Our electronic waste is recycled through a zero-landfill recycling company.
We are committed to adhering to applicable federal, state and local environmental regulations. Our goal is to minimize environmental risks to our patients and in the communities which we operate. Through recycling programs, we are working to reduce the amount of waste sent to landfills. Our electronic waste is recycled through a zero-landfill recycling company.
Homecares Medicare is uniform nationwide and reimburses homecare agencies under a Patient-Driven Groupings Model (“PDGM”). Under PDGM, Medicare provides homecare agencies with payments for each 30-day period of care provided to beneficiaries. If a beneficiary is still eligible for care after the end of the first 30-day payment period, a second 30-day payment period can begin.
CMS also finalized its proposal to adopt a data validation process for the SNF QRP beginning the same year. Homecares Medicare is uniform nationwide and reimburses homecare agencies under a Patient-Driven Groupings Model (“PDGM”). Under PDGM, Medicare provides homecare agencies with payments for each 30-day period of care provided to beneficiaries.
The fiscal year 2024 rule equates to a net increase of 4.0%, or approximately $1.4 billion, in Medicare Part A payments to SNFs in fiscal year 2024 compared to 2023 levels.
The fiscal year 2025 rule equates to a net 4.2% increase in Medicare Part A payments to SNFs in fiscal year 2025 compared to 2024 levels. The rule includes a market basket increase of 3.0%, an increase of 1.7% to the market basket forecast error adjustment, and a negative 0.5% productivity adjustment.
We estimate the resulting increase in revenue for the 2024 fiscal year will be approximately $9,000,000 annually, or $2,250,000 per quarter. Effective July 1, 2023 and for the fiscal year 2024, the state of Missouri implemented specific individual nursing facility increases.
These non-recurring rate increases will result in an additional increase in revenue for the 2025 fiscal year of approximately $8,200,000 annually, or $2,050,000 per quarter. Effective July 1, 2024 and for the fiscal year 2025, the state of Missouri has proposed specific individual nursing facility increases, subject to approval from CMS.
Government Regulation General Health care is an area of extensive regulatory oversight and frequent regulatory change. The federal government and the states in which we operate regulate various aspects of our business. These regulatory bodies, among other things, require us annually to license our skilled nursing facilities and other health care businesses.
We contract with managed care organizations ("MCO's") and insurance carriers for the provision of healthcare services by our owned, leased and managed healthcare facilities. Government Regulation General Health care is an area of extensive regulatory oversight and frequent regulatory change. The federal government and the states in which we operate regulate various aspects of our business.
We estimate the resulting increase in revenue for the 2024 fiscal year will be approximately $15,000,000 annually, or $3,750,000 per quarter. Effective October 1, 2023 and for the fiscal year 2024, the state of South Carolina implemented specific individual nursing facility increases.
We estimate the resulting increase in revenue for the 2025 fiscal year will be approximately $11,000,000 annually, or $2,750,000 per quarter. Additionally, the state of Tennessee implemented non-recurring rate increases for fiscal year 2025 for continued stabilization payments and Medicaid rate rebasing.
Seniors who enter skilled nursing facilities as private pay patients can become eligible for Medicaid once they have substantially depleted their assets. Medicaid is generally the largest source of funding for most skilled nursing facilities. Private pay, managed care, and other payment sources include commercial insurance, individual patient funds, managed care plans and the Veterans Administration.
Seniors who enter skilled nursing facilities as private pay patients can become eligible for Medicaid once they have substantially depleted their assets. Medicaid typically covers patients that require standard room and board services and provides reimbursement rates that are generally lower than rates earned from other sources.
We are focusing on being more energy efficient and reducing our water use and wastewater discharges while continuing to provide a healthy environment for our patients, partners and visitors. We are committed to adhering to applicable federal, state and local environmental regulations. Our goal is to minimize environmental risks to our patients and in the communities which we operate.
We are focusing on being more energy efficient and reducing our water use and wastewater discharges while continuing to provide a healthy environment for our patients, partners and visitors. We have partnered with a company to study and identify areas on our properties that would benefit from lighting upgrades as part of our efforts to reduce energy consumption.
The CARES Act appropriated $178 billion to the Public Health and Social Services Emergency Fund, which is referred to as the Provider Relief Fund ("PRF"). The Company recorded $0, $11,457,000 and $63,360,000 of government stimulus income from the PRF for the years ended December 31, 2023, 2022, and 2021, respectively. Non – Operating Income.
The Company recorded $9,445,000 of government grant income related to the ERC credit for the year ended December 31, 2024. The Company recorded $11,457,000 of government grant income from the Provider Relief Fund for the year ended December 31, 2022. Non – Operating Income.
We received government stimulus funds as part of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES ACT"). The CARES Act provided $2.2 trillion of economy-wide financial stimulus in the form of financial aid to individuals, businesses, nonprofits, states and municipalities.
We received government grant funds as part of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES ACT"). The Employee Retention Credit (“ERC”) was established by the CARES Act and intended to help businesses retain their workforce and avoid layoffs during the pandemic.
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We have one independent living facility which is a "continuing care community", where the resident pays a substantial entrance fee and a monthly maintenance fee. The resident then receives a full range of services, including skilled nursing and home health, without additional charge. ● Behavioral Health Hospitals.
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The ERC provided a per employee credit to eligible businesses based on a percentage of qualified wages and health insurance benefits paid to employees. The qualified wages and health insurance benefits paid by the Company were related to the second, third, and fourth quarters of 2020. All conditions related to the ERC were met during 2024.
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In July 2022, CMS launched its enhanced Five-Star Quality Rating System which integrates weekend staffing rates for nurses and information on annual turnover among nurses and administrators.
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The White Oak portfolio consists of 15 skilled nursing facilities, two assisted living facilities, and four independent living facilities. The White Oak operations have 1,928 licensed skilled nursing beds, 48 assisted living units, and 302 independent living units in the states of South Carolina and North Carolina.
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The following table lists our recent construction and purchase activities.
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Business Segments The Company has two reportable operating segments: (1) inpatient services, which includes the operation of skilled nursing facilities, assisted and independent living facilities, and behavioral health hospitals and (2) homecare and hospice services.
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The states in which we operate primarily use a cost–based reimbursement system. Under cost–based reimbursement systems, the skilled nursing facility is reimbursed for the reasonable direct and indirect allowable costs it incurred in a base year in providing routine resident care services as defined by the program.
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Medicaid may supplement Medicare benefits for the disabled and for persons aged 65 and older meeting financial eligibility requirements. Medicaid reimbursement formulas are established by each state with the approval of the federal government in accordance with federal guidelines.
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The rule includes a 3.0% market basket rate increase, a 3.6% market basket forecast error adjustment, less a 0.2% productivity adjustment, as well as a negative 2.3%, or approximately $789 million, decrease in 2024 SNF Payment Prospective Systems rates as a result of the second phase of the Patient Driven Payment Model parity adjustment recalibration.
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Medicaid reimbursement varies from state to state and is based upon a number of different systems. The states in which we operate primarily use a cost–based reimbursement system. Rates are subject to a state's annual budgetary requirements and funding, statutory and regulatory changes and interpretations and rulings by individual state agencies and state plan amendments approved by CMS.
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The Coronavirus Aid, Relief and Economic Security Act (the “CARES” Act) and other subsequent Congressional actions temporarily suspended Medicare sequestration beginning May 1, 2020 through March 31, 2022. The Medicare sequestration policy reduces fee-for-service Medicare payments by 2 percent.
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These regulatory bodies, among other things, require us annually to license our skilled nursing facilities and other health care businesses.
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Effective April 1, 2022, sequestration was reinstated but only 1% was reduced from Medicare payments from April 1, 2022 through June 30, 2022. Beginning July 1, 2022, sequestration was increased back to the 2% reduction of Medicare payments for the remainder of 2022. The CARES Act extended the sequestration policy through 2030 in exchange for the temporary suspension.
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This final rule also changes CMS’ enforcement policies to impose more equitable and consistent civil monetary penalties ("CMPs") for health and safety violations as part of the agency’s ongoing work to increase the safety and care provided in America’s nursing homes.
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The increase is the result of a 3.3% market basket update, reduced by a 0.3% productivity adjustment. The increase is offset by a behavioral adjustment that will cut payments by a net 2.6%. The behavioral adjustment was designed to achieve budget-neutral implementation of the PDPM.
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CMS revised the regulation to expand the type of CMPs that can be imposed to allow for more per instance and per day CMPs to be imposed, as appropriate. The final rule also finalized updates to the SNF Quality Reporting Program ("QRP") to better account for adverse social conditions that negatively impact individuals’ health or healthcare.
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Finally, CMS also adjusted the fixed-dollar loss ratio for outlier payments, which will increase payments by 0.4%. Hospice Medicare payment rates are calculated as daily rates for each of four levels of care we deliver.
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If a beneficiary is still eligible for care after the end of the first 30-day payment period, a second 30-day payment period can begin. There are no limits to the number of periods of care a beneficiary who remains eligible for the home health benefit can receive.
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This increase reflects a 2.7% home health payment update, reduced by a 1.8% decrease that reflects the permanent behavior adjustment and an estimated 0.4% decrease that reflects the updated fixed-dollar loss ratio for outlier payments.
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As required by the Bipartisan Budget Act of 2018, this rule proposes a permanent prospective adjustment to the CY2025 home health payment rate to account for the impact of implementing the PDGM.
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This adjustment accounts for differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures due to the CY2020 implementation of PDGM and the change to a 30-day unit of payment. Hospice Medicare payment rates are calculated as daily rates for each of four levels of care we deliver.
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Centers for Medicare and Medicaid Services Minimum Staffing Standards On April 22, 2024, the Centers for Medicare and Medicaid Services (“CMS”) issued the Minimum Staffing Standards for Long-Term Care (“LTC”) Facilities and Medicaid Institutional Payment Transparency Reporting final rule.
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Included in this final rule are new comprehensive minimum nurse staffing requirements, which aim to significantly reduce the risk of residents receiving unsafe and low-quality care within LTC facilities.
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CMS is finalizing a total nurse staffing standard of 3.48 hours per resident day (“HPRD”), which must include at least 0.55 HPRD of direct registered nurse (“RN”) care and 2.45 HPRD of direct nurse aide care.
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Facilities may use any combination of nurse staff (RN, licensed practical nurse and licensed vocational nurse, or nurse aide) to account for the additional 0.48 HPRD needed to comply with the total nurse staffing standard.
Added
CMS is also finalizing enhanced facility assessment requirements and a requirement to have an RN onsite 24 hours a day, seven days a week (“24/7”), to provide skilled nursing care. The 24/7 RN onsite can be the Director of Nursing; however, they must be available to provide direct resident care.
Added
This final rule provides a staggered implementation timeframe of the minimum nurse staffing standards and a 24/7 RN requirement based on geographic location, as well as possible exemptions for qualifying facilities for some parts of these requirements based on workforce unavailability and other factors.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

17 edited+9 added−12 removed167 unchanged
Biggest changeMedicare and many commercial third-party payors are implementing ACO models, in which groups of providers share in the benefit and risk of providing care to an assigned group of individuals at a lower cost. In addition, CMS is implementing programs to bundle acute care and post-acute care reimbursement to hold providers accountable for costs across a broader continuum of care.
Biggest changeOther initiatives aimed at improving the cost of care include alternative payment models, such as ACOs and bundled payment arrangements. Medicare and many commercial third-party payors are implementing ACO models, in which groups of providers share in the benefit and risk of providing care to an assigned group of individuals at a lower cost.
Furthermore, many states prohibit business corporations from providing or holding themselves out as a provider of medical care. 15 Table of Contents In addition, the Stark Law broadly defines the scope of prohibited physician referrals under federal health care programs to providers with which they have ownership or other financial arrangements.
Furthermore, many states prohibit business corporations from providing or holding themselves out as a provider of medical care. In addition, the Stark Law broadly defines the scope of prohibited physician referrals under federal health care programs to providers with which they have ownership or other financial arrangements.
Under the model, home health agencies will receive increases or decreases to their Medicare fee-for-service payments of up to 5%, based on performance against specific quality measures relative to the performance of other providers. Data collected in each performance year will impact Medicare payments two years later.
Under the model, home health agencies will receive increases or decreases to their Medicare fee-for-service payments of up to 5%, based on performance against specific quality measures relative to the performance of other providers. Data collected in each performance year will impact Medicare payments two years later. Calendar year 2023 was the first performance year under the expanded HHVBP Model.
COVID-19 and other pandemics, epidemics, or outbreaks of a contagious illness, and similar events, may cause harm to us, our partners (employees), our patients, our vendors and supply chain partners, and financial institutions, which could have a material adverse effect on our results of operations, financial condition and cash flows.
Pandemics, epidemics, or outbreaks of contagious illnesses and similar events may cause harm to us, our partners (employees), our patents, our vendors and supply chain partners, and financial institutions, which could have a material adverse effect on our results of operations, financial condition and cash flows.
Upkeep of healthcare properties is capital intensive, requiring us to continually direct financial resources to the maintenance and enhancement of our physical plant and equipment. As of December 31, 2023, we leased or owned 60 skilled nursing facilities, 24 assisted living facilities, 3 behavioral health hospitals, and four independent living facilities.
Upkeep of healthcare properties is capital intensive, requiring us to continually direct financial resources to the maintenance and enhancement of our physical plant and equipment. As of December 31, 2024, we leased or owned 72 skilled nursing facilities, 24 assisted living facilities, three behavioral health hospitals, and eight independent living facilities.
The staffing level required to receive a 5-star rating in the CMS Nursing Home Five Star Quality Rating System is determined based on analysis of the relationship between staffing levels and measures of nursing home quality. CMS places a strong emphasis on registered nurse (“RN”) staffing.
The staffing level required to receive a 5-star rating in the CMS Nursing Home Five Star Quality Rating System is determined based on analysis of the relationship between staffing levels and measures of nursing home quality.
Some of the factors are beyond our control and a change in any such factor could affect our ability to pay or maintain dividends. The failure to pay or maintain dividends could adversely affect our stock price. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Some of the factors are beyond our control and a change in any such factor could affect our ability to pay or maintain dividends. The failure to pay or maintain dividends could adversely affect our stock price.
We and our subsidiaries may be able to incur substantial indebtedness in the future. If debt is added, the related risks that we now face could intensify. Risks Related to Government Regulation We conduct business in a heavily regulated industry, and changes in, or violations of regulations may result in increased costs or sanctions that reduce our revenue and profitability.
If additional debt is added, the related risks that we now face could intensify. 15 Table of Contents Risks Related to Government Regulation We conduct business in a heavily regulated industry, and changes in, or violations of regulations may result in increased costs or sanctions that reduce our revenue and profitability.
Our ability to contract with payors depends on our quality of service and reputation, as well as other factors of which we may have little or no control, such as state appropriations and changes in provider eligibility requirements. We are permitted to incur substantially more debt, which could further exacerbate the risks described above.
Our ability to contract with payors depends on our quality of service and reputation, as well as other factors of which we may have little or no control, such as state appropriations and changes in provider eligibility requirements.
For example, the Budget Control Act of 2011 requires automatic spending reductions to reduce the federal deficit, imposing Medicare spending reductions of up to 2% per fiscal year, with a uniform percentage across all Medicare programs. CMS began imposing a 2% reduction on Medicare claims in 2013, and these reductions have been extended through 2030.
For example, the Budget Control Act of 2011 requires automatic spending reductions to reduce the federal deficit, imposing Medicare spending reductions of up to 2% per fiscal year, with a uniform percentage across all Medicare programs.
Our business may be impacted by healthcare reform efforts. In recent years, the U.S. Congress and certain state legislatures have considered and passed a large number of laws intended to result in significant changes to the healthcare industry, including the ACA.
Congress and certain state legislatures have considered and passed a large number of laws intended to result in significant changes to the healthcare industry, including the ACA.
In October 2021, the CMS Innovation Center released an outline of its strategy for the next decade, noting the need to accelerate the movement to value-based care and drive broader system transformation.
In addition, CMS is implementing programs to bundle acute care and post-acute care reimbursement to hold providers accountable for costs across a broader continuum of care. In October 2021, the CMS Innovation Center released an outline of its strategy for the next decade, noting the need to accelerate the movement to value-based care and drive broader system transformation.
The full 2% reduction took effect July 1, 2022. 11 Table of Contents Net revenue realizable under third–party payor agreements can change after examination and retroactive adjustment by payors during the claims settlement processes or as a result of post–payment audits.
CMS began imposing a 2% reduction on Medicare claims in 2013, and these reductions have been extended through 2030. 11 Table of Contents Net revenue realizable under third–party payor agreements can change after examination and retroactive adjustment by payors during the claims settlement processes or as a result of post–payment audits.
Changes by Congress or government agencies could eliminate or alter provisions beneficial to us, while leaving in place provisions reducing our reimbursement or otherwise negatively impacting our business. There is also uncertainty regarding whether, when and what other health reform measures will be adopted, and the impact of such efforts on providers as well as other healthcare industry participants.
There is also uncertainty regarding whether, when and what other health reform measures will be adopted, and the impact of such efforts on providers as well as other healthcare industry participants.
Any of these developments, individually or in aggregate, could materially impact our business and our financial results and condition. We depend on reimbursement from Medicare, Medicaid and other third – party payors, and reimbursement rates from such payors may be reduced. We derive a substantial portion of our revenue from third–party payors, including the Medicare and Medicaid programs.
Risks Relating to Our Operations We depend on reimbursement from Medicare, Medicaid and other third – party payors, and reimbursement rates from such payors may be reduced. We derive a substantial portion of our revenue from third–party payors, including the Medicare and Medicaid programs. Third–party payor programs are highly regulated and are subject to frequent and substantial changes.
Accordingly, our future performance is substantially dependent upon the continued services of our senior management team. The loss of the services of any of these persons could have a material adverse effect upon us. Disasters and similar events, which may increase as a result of climate change, may seriously harm our business.
Accordingly, our future performance is substantially dependent upon the continued services of our senior management team. The loss of the services of any of these persons could have a material adverse effect upon us. Federal minimum staffing mandates may adversely affect our labor costs, ability to maintain desired levels of patient census and profitability.
Aggressive anti–fraud actions have had and could have an adverse effect on our financial position, results of operations and cash flows.
Aggressive anti–fraud actions have had and could have an adverse effect on our financial position, results of operations and cash flows. See Item 1, "Business – Government Regulation". 16 Table of Contents Our business may be impacted by healthcare reform efforts. In recent years, the U.S.
Removed
Risks Relating to Our Operations COVID-19 and other pandemics, epidemics, or outbreaks of a contagious illness may adversely affect our operating results, cash flows and financial condition. The COVID-19 pandemic had a negative impact on our business and results of operations.
Added
CMS continues to increase its quality measure thresholds, which is regularly increased every six months, making it more difficult to achieve upward and five-star ratings. CMS increased its quality measure thresholds in 2022, making it more difficult for facilities to obtain or maintain four-and-five-star ratings. CMS places a strong emphasis on registered nurse (“RN”) staffing.
Removed
The further spread of COVID-19, and the measures taken by federal and state governments and local health authorities intended to limit the spread of the virus, could impact the resources required to carry out our business as usual and may have a material adverse effect on our results of operations, financial condition and cash flows.
Added
In April 2024, CMS issued the Staffing Rule, establishing minimum staffing standards for SNFs. The Staffing Rule contains three primary staffing requirements which are phased in over the next several years.
Removed
The extent to which the COVID-19 pandemic will impact our business and our financial results will depend on future developments, which are highly uncertain and cannot be predicted.
Added
Due to pending legislation in both the House of Representatives and the Senate, industry litigation filed to dispute the Staffing Rule's validity and enforceability, as well as the long phase-in of the requirements, the exact effects of the Staffing Rule cannot be determined. Future developments may significantly alter or even halt the implementation of the Staffing Rule.
Removed
Such developments may include the ongoing geographic spread of the virus, the timing, availability and effectiveness of medical treatments and vaccines (including additional doses of vaccines), the impact of any mutations of the virus, and the type, duration and efficacy of actions that may be taken by various governmental authorities to contain the virus or treat its impact, among others.
Added
However, we expect that the Staffing Rule in its current form will have adverse financial consequences upon our business. Disasters and similar events, which may increase as a result of climate change, may seriously harm our business.
Removed
Third–party payor programs are highly regulated and are subject to frequent and substantial changes.
Added
During 2024, we expanded our operations with the acquisition of the White Oak Senior Living portfolio. This growth has placed and will continue to place significant demands on our management resources. Our ability to manage our growth effectively and to successfully integrate this acquisition into our existing business will require us to expand our operation, financial and management information systems.
Removed
The CARES Act and related legislation temporarily suspended this 2% reduction through March 31, 2022, and reduced the sequestration adjustment from 2% to 1% from April 1 through June 30, 2022.
Added
The effects related to any potential future pandemic, epidemic, or infectious disease outbreak could adversely impact our business and future results of operations and financial condition.
Removed
Calendar year 2023 is the first performance year under the expanded HHVBP Model that will affect payments. Other initiatives aimed at improving the cost of care include alternative payment models, such as ACOs and bundled payment arrangements.
Added
Any such crisis could diminish public trust in healthcare providers, particularly those that are treating or have treated patients affected by contagious diseases. Patient volumes may decline or volumes of uninsured patients may increase, depending on the economic circumstances surrounding the pandemic, epidemic or outbreak.
Removed
See Item 1, "Business – Government Regulation". 16 Table of Contents We face uncertainty related to the COVID-19 public health emergency's ("PHE") expiration and wind-down, which could have a material adverse affect on our business, financial condition, results of operations and cash flows.
Added
We are permitted to incur substantially more debt, which could further exacerbate the risks described above. We and our subsidiaries may be able to incur substantial indebtedness in the future.
Removed
The extent to which the COVID-19 PHE's termination will affect our operations will depend on future developments, which are highly uncertain and cannot be predicted.
Added
It is possible that there may be continued changes to the ACA, its implementation or its interpretation. Changes by Congress or government agencies could eliminate or alter provisions beneficial to us, while leaving in place provisions reducing our reimbursement or otherwise negatively impacting our business.
Removed
There remains uncertainty as to what changes will be made to the Health and Human Service’s emergency response requirements for our skilled nursing facilities and senior living facilities in order to better respond to the issues experienced during the COVID-19 PHE.
Removed
To the extent COVID-19 is endemic in nature, we may face continued challenges from ongoing infection control and emergency preparedness requirements made part of state laws or regulations. Additionally, the long-term effects of the COVID-19 pandemic may include long-term decline in demand for care in skilled nursing facilities and senior living facilities.
Removed
Although the current presidential administration has indicated that it generally intends to protect and strengthen the ACA, it is possible that there may be continued changes to the ACA, its implementation or its interpretation.

Item 2. Properties

Properties — owned and leased real estate

10 edited+0 added−1 removed0 unchanged
Biggest changePeters Leased 130 Springfield Springfield Rehabilitation and Health Care Center Leased 146 West Plains NHC HealthCare, West Plains Owned 114 South Carolina Anderson NHC HealthCare, Anderson Leased (1) 290 Bluffton NHC HealthCare, Bluffton Owned 120 Charleston NHC HealthCare, Charleston Owned 132 Clinton NHC HealthCare, Clinton Owned 131 Columbia NHC HealthCare, Parklane Owned 180 Greenwood NHC HealthCare, Greenwood Leased (1) 152 Greenville NHC HealthCare, Greenville Owned 176 Laurens NHC HealthCare, Laurens Leased (1) 176 Lexington NHC HealthCare, Lexington Owned 170 Mauldin NHC HealthCare, Mauldin Owned 180 Murrells Inlet NHC HealthCare, Garden City Owned 148 North Augusta NHC HealthCare, North Augusta Owned 192 Sumter NHC HealthCare, Sumter Managed 138 Tennessee Athens NHC HealthCare, Athens Leased (1) 86 Chattanooga NHC HealthCare, Chattanooga Leased (1) 200 Columbia NHC HealthCare, Columbia Owned 106 Columbia NHC-Maury Regional Transitional Care Center Owned 112 Cookeville NHC HealthCare, Cookeville Managed 104 Dickson NHC HealthCare, Dickson Leased (1) 191 Dunlap NHC HealthCare, Sequatchie Leased (1) 110 Farragut NHC HealthCare, Farragut Owned 106 Franklin NHC Place, Cool Springs Owned 180 Franklin NHC HealthCare, Franklin Leased (1) 80 Gallatin NHC Place, Sumner Owned 92 Hendersonville NHC HealthCare, Hendersonville Leased (1) 122 Johnson City NHC HealthCare, Johnson City Leased (1) 167 Kingsport NHC HealthCare, Kingsport Owned 90 Knoxville NHC HealthCare, Fort Sanders Owned 166 Knoxville Holston Health & Rehabilitation Center Owned 94 Knoxville NHC HealthCare, Knoxville Owned 127 Lawrenceburg NHC HealthCare, Lawrenceburg Managed 96 Lawrenceburg NHC HealthCare, Scott Leased (1) 60 Lewisburg NHC HealthCare, Lewisburg Leased (1) 100 Lewisburg NHC HealthCare, Oakwood Leased (1) 60 McMinnville NHC HealthCare, McMinnville Leased (1) 115 Milan NHC HealthCare, Milan Leased (1) 117 Murfreesboro AdamsPlace Owned 90 Murfreesboro NHC HealthCare, Murfreesboro Managed 181 Nashville Lakeshore, Heartland Owned 66 Nashville Lakeshore, The Meadows Managed 113 Nashville The Health Center of Richland Place Managed 107 Nashville NHC Place at The Trace Owned 90 Nashville West Meade Place Managed 120 Oak Ridge NHC HealthCare, Oak Ridge Managed 120 Pulaski NHC HealthCare, Pulaski Leased (1) 102 Smithville NHC HealthCare, Smithville Leased (1) 114 Somerville NHC HealthCare, Somerville Leased (1) 72 Sparta NHC HealthCare, Sparta Leased (1) 96 Springfield NHC HealthCare, Springfield Owned 107 Tullahoma NHC HealthCare, Tullahoma Owned 90 Virginia Bristol NHC HealthCare, Bristol Leased (1) 120 22 Table of Contents Behavioral Health Hospitals State City Center Name Affiliation Licensed Beds Missouri Maryland Heights Maryland Heights Center for Behavioral Health Owned 16 Osage Beach Osage Beach Center for Cognitive Disorders Owned 16 Tennessee Knoxville Knoxville Center for Behavioral Medicine Owned (2) 64 Assisted Living Units State City Center Name Affiliation Units Alabama Anniston NHC Place/Anniston Owned 67 Kentucky Glasgow NHC HealthCare, Glasgow Leased (1) 12 Florida Merritt Island Sodalis Senior Living Merritt Island Owned 95 Stuart Sodalis Senior Living Stuart Owned 96 Vero Beach Sodalis Senior Living Vero Beach Owned 129 Missouri St.
Biggest changeLouis NHC HealthCare, Maryland Heights Leased (1) 220 Springfield Springfield Rehabilitation and Health Care Center Owned 146 West Plains NHC HealthCare, West Plains Owned 114 North Carolina Burlington White Oak of Burlington Owned 160 Charlotte White Oak of Charlotte Owned 180 Kings Mountain White Oak of Kings Mountain Owned 154 Shelby White Oak of Shelby Owned 160 Tryon White Oak of Tryon Owned 70 Waxhaw White Oak of Waxhaw Leased 100 South Carolina Anderson NHC HealthCare, Anderson Leased (1) 290 Bluffton NHC HealthCare, Bluffton Owned 120 Charleston NHC HealthCare, Charleston Owned 132 Clinton NHC HealthCare, Clinton Owned 131 Columbia NHC HealthCare, Parklane Owned 180 Columbia White Oak of Columbia Owned 120 Greenwood NHC HealthCare, Greenwood Leased (1) 152 Greenville NHC HealthCare, Greenville Owned 176 Lancaster White Oak of Lancaster Owned 132 Laurens NHC HealthCare, Laurens Leased (1) 176 Lexington NHC HealthCare, Lexington Owned 170 Mauldin NHC HealthCare, Mauldin Owned 180 Murrells Inlet NHC HealthCare, Garden City Owned 148 Newberry White Oak of Newberry Owned 146 North Augusta NHC HealthCare, North Augusta Owned 192 North Charleston White Oak of Charleston Owned 176 Rock Hill White Oak of Rock Hill Owned 141 Spartanburg White Oak of North Grove Owned 132 Spartanburg White Oak of Spartanburg Owned 60 Spartanburg White Oak Estates Owned 88 Sumter NHC HealthCare, Sumter Managed 138 York White Oak of York Owned 109 Tennessee Athens NHC HealthCare, Athens Leased (1) 86 Chattanooga NHC HealthCare, Chattanooga Leased (1) 200 Columbia NHC HealthCare, Columbia Owned 106 Columbia NHC-Maury Regional Transitional Care Center Owned 112 Cookeville NHC HealthCare, Cookeville Managed 104 Dickson NHC HealthCare, Dickson Leased (1) 191 Dunlap NHC HealthCare, Sequatchie Leased (1) 110 Farragut NHC HealthCare, Farragut Owned 106 Franklin NHC Place, Cool Springs Owned 180 Franklin NHC HealthCare, Franklin Leased (1) 80 Gallatin NHC Place, Sumner Owned 92 Hendersonville NHC HealthCare, Hendersonville Leased (1) 122 Johnson City NHC HealthCare, Johnson City Leased (1) 167 Kingsport NHC HealthCare, Kingsport Owned 90 Knoxville NHC HealthCare, Fort Sanders Owned 160 Knoxville Holston Health & Rehabilitation Center Owned 94 Knoxville NHC HealthCare, Knoxville Owned 127 Lawrenceburg NHC HealthCare, Lawrenceburg Managed 96 Lawrenceburg NHC HealthCare, Scott Leased (1) 60 Lewisburg NHC HealthCare, Lewisburg Leased (1) 100 Lewisburg NHC HealthCare, Oakwood Leased (1) 60 McMinnville NHC HealthCare, McMinnville Leased (1) 115 Milan NHC HealthCare, Milan Leased (1) 117 Murfreesboro AdamsPlace Owned 90 Murfreesboro NHC HealthCare, Murfreesboro Managed 181 Nashville Lakeshore, Heartland Owned 66 Nashville Lakeshore, The Meadows Managed 113 Nashville The Health Center of Richland Place Managed 107 Nashville NHC Place at The Trace Owned 90 Nashville West Meade Place Managed 120 Oak Ridge NHC HealthCare, Oak Ridge Managed 120 Pulaski NHC HealthCare, Pulaski Leased (1) 102 Smithville NHC HealthCare, Smithville Leased (1) 114 Somerville NHC HealthCare, Somerville Leased (1) 72 Sparta NHC HealthCare, Sparta Leased (1) 96 Springfield NHC HealthCare, Springfield Owned 107 Tullahoma NHC HealthCare, Tullahoma Owned 99 Virginia Bristol NHC HealthCare, Bristol Leased (1) 120 22 Table of Contents Behavioral Health Hospitals State City Center Name Affiliation Licensed Beds Missouri Maryland Heights Maryland Heights Center for Behavioral Health Owned 20 Osage Beach Osage Beach Center for Cognitive Disorders Owned 18 Tennessee Knoxville Knoxville Center for Behavioral Medicine Owned (2) 64 Assisted Living Units State City Center Name Affiliation Units Alabama Anniston NHC Place/Anniston Owned 67 Kentucky Glasgow NHC HealthCare, Glasgow Leased (1) 12 Florida Merritt Island Sodalis Senior Living Merritt Island Owned 85 Stuart Sodalis Senior Living Stuart Owned 84 Vero Beach Sodalis Senior Living Vero Beach Owned 119 Missouri St.
Louis South Carolina Anderson Caris Healthcare – Anderson Bluffton Caris Healthcare – Bluffton Charleston Caris Healthcare – Charleston Columbia Caris Healthcare – Columbia Greenville Caris Healthcare – Greenville Greenwood Caris Healthcare – Greenwood Myrtle Beach Caris Healthcare – Myrtle Beach Sumter Caris Healthcare – Sumter Tennessee Athens Caris Healthcare – Athens Chattanooga Caris Healthcare – Chattanooga Columbia Caris Healthcare – Columbia Cookeville Caris Healthcare – Cookeville Crossville Caris Healthcare – Crossville Dickson Caris Healthcare – Dickson Greeneville Caris Healthcare – Greeneville Johnson City Caris Healthcare – Johnson City Knoxville Caris Healthcare – Knoxville Lenoir City Caris Healthcare – Lenoir City Milan Caris Healthcare – Milan Murfreesboro Caris Healthcare – Murfreesboro Nashville Caris Healthcare – Nashville Sevierville Caris Healthcare – Sevierville Somerville Caris Healthcare – Somerville Springfield Caris Healthcare – Springfield Tullahoma Caris Healthcare – Tullahoma Virginia Big Stone Gap Caris Healthcare – Big Stone Gap Bristol Caris Healthcare – Bristol Cedar Bluff Caris Healthcare – Cedar Bluff Healthcare Facilities Leased to Others The following table includes certain information regarding healthcare facilities which are owned by us and leased to others: Name of Facility Location No. of Beds Skilled Nursing Facilities Solaris HealthCare North Naples Naples, FL 60 Solaris HealthCare Coconut Creek Coconut Creek, FL 120 Solaris HealthCare Daytona Daytona Beach, FL 73 Solaris HealthCare Imperial Naples, FL 113 Solaris HealthCare Windermere Orlando, FL 120 Solaris HealthCare Charlotte Harbor Port Charlotte, FL 180 The Health Center at Standifer Place Chattanooga, TN 444 Solaris HealthCare Lake City Lake City, FL 120 Solaris HealthCare Pensacola Pensacola, FL 180 Assisted Living No. of Units Standifer Place Assisted Living Chattanooga, TN 74 (1)Leased from NHI (2) Knoxville Center for Behavioral Medicine is owned by separate limited liability companies.
Louis South Carolina Anderson Caris Healthcare – Anderson Charleston Caris Healthcare – Charleston Columbia Caris Healthcare – Columbia Greenville Caris Healthcare – Greenville Greenwood Caris Healthcare – Greenwood Myrtle Beach Caris Healthcare – Myrtle Beach Sumter Caris Healthcare – Sumter Tennessee Athens Caris Healthcare – Athens Chattanooga Caris Healthcare – Chattanooga Columbia Caris Healthcare – Columbia Cookeville Caris Healthcare – Cookeville Clinton Caris Healthcare – Clinton Crossville Caris Healthcare – Crossville Dickson Caris Healthcare – Dickson Greeneville Caris Healthcare – Greeneville Johnson City Caris Healthcare – Johnson City Knoxville Caris Healthcare – Knoxville Lawrenceburg Caris Healthcare - Lawrenceburg Lenoir City Caris Healthcare – Lenoir City Milan Caris Healthcare – Milan Morristown Caris Healthcare - Morristown Murfreesboro Caris Healthcare – Murfreesboro Nashville Caris Healthcare – Nashville Sevierville Caris Healthcare – Sevierville Somerville Caris Healthcare – Somerville Springfield Caris Healthcare – Springfield Tullahoma Caris Healthcare – Tullahoma Virginia Big Stone Gap Caris Healthcare – Big Stone Gap Bristol Caris Healthcare – Bristol Cedar Bluff Caris Healthcare – Cedar Bluff Wytheville Caris Healthcare - Wytheville Healthcare Facilities Leased to Others The following table includes certain information regarding healthcare facilities which are owned by us and leased to others: Name of Facility Location No. of Beds Skilled Nursing Facilities Solaris HealthCare North Naples Naples, FL 60 Solaris HealthCare Coconut Creek Coconut Creek, FL 120 Solaris HealthCare Daytona Daytona Beach, FL 73 Solaris HealthCare Imperial Naples, FL 113 Solaris HealthCare Windermere Orlando, FL 120 Solaris HealthCare Charlotte Harbor Port Charlotte, FL 180 The Health Center at Standifer Place Chattanooga, TN 444 Solaris HealthCare Lake City Lake City, FL 120 Solaris HealthCare Pensacola Pensacola, FL 180 Assisted Living No. of Units Standifer Place Assisted Living Chattanooga, TN 74 (1)Leased from NHI (2) Knoxville Center for Behavioral Medicine is owned by separate limited liability companies.
Managed 137 Homecare Agencies State City Homecare Agencies Florida Chipley NHC HomeCare of Chipley Crawfordville NHC HomeCare of Crawfordville Merritt Island NHC HomeCare of Merritt Island Panama City NHC HomeCare of Panama City Port St. Joe NHC HomeCare of Port St.
Managed 136 Homecare Agencies State City Homecare Agencies Florida Chipley NHC HomeCare of Chipley Crawfordville NHC HomeCare of Crawfordville Merritt Island NHC HomeCare of Merritt Island Panama City NHC HomeCare of Panama City Port St. Joe NHC HomeCare of Port St.
Peters Memory Care Owned 60 South Carolina Bluffton The Palmettos of Bluffton Owned 78 Charleston The Palmettos of Charleston Owned 60 Columbia The Palmettos of Parklane Owned 75 Greenville The Palmettos of Mauldin Owned 45 Murrells Inlet The Palmettos of Garden City Owned 80 Tennessee Dickson NHC HealthCare, Dickson Leased (1) 20 Farragut NHC Place, Farragut Owned 84 Farragut NHC Place, Cavette Hill Owned 60 Franklin NHC Place, Cool Springs Owned 89 Gallatin NHC Place, Sumner Owned 80 Murfreesboro AdamsPlace Owned 106 Nashville Lakeshore Heartland Owned 9 Nashville Lakeshore, The Meadows Managed 10 Nashville Richland Place Managed 24 Nashville The Place at the Trace Owned 80 Smithville NHC HealthCare, Smithville Leased(1) 6 Somerville NHC HealthCare, Somerville Leased(1) 6 23 Table of Contents Retirement Apartments State City Retirement Apartments Affiliation Units Missouri St.
Peters Memory Care Owned 60 North Carolina Tryon Benson Hall Assisted Living Owned 18 South Carolina Bluffton The Palmettos of Bluffton Owned 78 Charleston The Palmettos of Charleston Owned 60 Columbia The Palmettos of Parklane Owned 75 Greenville The Palmettos of Mauldin Owned 45 Murrells Inlet The Palmettos of Garden City Owned 80 Spartanburg White Oak Estates Assisted Living Owned 30 Tennessee Dickson NHC HealthCare, Dickson Leased (1) 20 Farragut NHC Place, Farragut Owned 84 Farragut NHC Place, Cavette Hill Owned 60 Franklin NHC Place, Cool Springs Owned 89 Gallatin NHC Place, Sumner Owned 80 Murfreesboro AdamsPlace Owned 106 Nashville Lakeshore Heartland Owned 9 Nashville Lakeshore, The Meadows Managed 10 Nashville Richland Place Managed 24 Nashville The Place at the Trace Owned 80 Smithville NHC HealthCare, Smithville Leased (1) 6 Somerville NHC HealthCare, Somerville Leased (1) 6 23 Table of Contents Retirement Apartments State City Retirement Apartments Affiliation Units Missouri St.
PROPERTIES Skilled Nursing Facilities State City Center Name Affiliation Licensed Beds Alabama Anniston NHC HealthCare, Anniston Leased (1) 151 Moulton NHC HealthCare, Moulton Leased (1) 136 Georgia Fort Oglethorpe NHC HealthCare, Fort Oglethorpe Owned 135 Rossville NHC HealthCare, Rossville Owned 112 Kentucky Glasgow NHC HealthCare, Glasgow Leased (1) 194 Missouri Desloge NHC HealthCare, Desloge Leased (1) 120 Independence The Villages of Jackson Creek Leased 120 Independence The Villages of Jackson Creek Memory Care Leased 70 Joplin NHC HealthCare, Joplin Leased (1) 126 Kennett NHC HealthCare, Kennett Leased (1) 170 Macon Macon Health Care Center Owned 120 Osage Beach Osage Beach Rehabilitation and Health Care Center Owned 94 St.
PROPERTIES Skilled Nursing Facilities State City Center Name Affiliation Licensed Beds Alabama Anniston NHC HealthCare, Anniston Leased (1) 151 Moulton NHC HealthCare, Moulton Leased (1) 136 Georgia Fort Oglethorpe NHC HealthCare, Fort Oglethorpe Owned 135 Rossville NHC HealthCare, Rossville Owned 112 Kentucky Glasgow NHC HealthCare, Glasgow Leased (1) 194 Missouri Desloge NHC HealthCare, Desloge Leased (1) 120 Joplin NHC HealthCare, Joplin Leased (1) 124 Kennett NHC HealthCare, Kennett Leased (1) 170 Macon Macon Health Care Center Owned 120 Osage Beach Osage Beach Rehabilitation and Health Care Center Owned 94 St.
Charles Lake St. Charles Retirement Center Leased (1) 26 Independence The Villages of Jackson Creek Leased 52 St. Peters Villages of St. Peters Leased 52 St. Peters Villages of St.
Charles Lake St. Charles Retirement Center Leased (1) 26 St. Peters Villages of St.
Joe Quincy NHC HomeCare of Quincy Tallahassee NHC HomeCare of Tallahassee Vero Beach NHC HomeCare of Vero Beach South Carolina Aiken NHC HomeCare of Aiken Anderson NHC HomeCare of Anderson Greenville NHC HomeCare of Greenville Greenwood NHC HomeCare of Greenwood Laurens NHC HomeCare of Laurens Murrells Inlet NHC HomeCare of Murrells Inlet Summerville NHC HomeCare of Low Country West Columbia NHC HomeCare of Midlands Tennessee Athens NHC HomeCare of Athens Chattanooga NHC HomeCare of Chattanooga Columbia NHC HomeCare of Columbia Cookeville NHC HomeCare of Cookeville Dickson NHC HomeCare of Dickson Franklin NHC HomeCare of Franklin Hendersonville NHC HomeCare of Hendersonville Johnson City NHC HomeCare of Johnson City Knoxville NHC HomeCare of Knoxville Lawrenceburg NHC HomeCare of Lawrenceburg Lewisburg NHC HomeCare of Lewisburg McMinnville NHC HomeCare of McMinnville Milan NHC HomeCare of Milan Murfreesboro NHC HomeCare of Murfreesboro Nashville Ascension at Home St.
Joe Quincy NHC HomeCare of Quincy Tallahassee NHC HomeCare of Tallahassee Vero Beach NHC HomeCare of Vero Beach South Carolina Aiken NHC HomeCare of Aiken Anderson NHC HomeCare of Anderson Greenville NHC HomeCare of Greenville Greenwood NHC HomeCare of Greenwood Laurens NHC HomeCare of Laurens Murrells Inlet NHC HomeCare of Murrells Inlet Summerville NHC HomeCare of Low Country West Columbia NHC HomeCare of Midlands Tennessee Athens NHC HomeCare of Athens Chattanooga NHC HomeCare of Chattanooga Columbia NHC HomeCare of Columbia Cookeville NHC HomeCare of Cookeville Dickson NHC HomeCare of Dickson Franklin NHC HomeCare of Franklin Hendersonville NHC HomeCare of Hendersonville Johnson City NHC HomeCare of Johnson City Knoxville NHC HomeCare of Knoxville Lawrenceburg NHC HomeCare of Lawrenceburg Lewisburg NHC HomeCare of Lewisburg McMinnville NHC HomeCare of McMinnville Milan NHC HomeCare of Milan Murfreesboro NHC HomeCare of Murfreesboro Pulaski NHC HomeCare of Pulaski Somerville NHC HomeCare of Somerville Sparta NHC HomeCare of Sparta Springfield NHC HomeCare of Springfield 24 Table of Contents Hospice Agencies State City Hospice Agencies Georgia Rossville Caris Healthcare – Rossville Missouri St.
Charles Lake St. Charles Retirement Apts. Leased (1) 152 Tennessee Chattanooga Parkwood Retirement Apartments Leased (1) 30 Johnson City Colonial Hill Retirement Apartments Leased (1) 63 Murfreesboro AdamsPlace Owned 93 Nashville Richland Place Retirement Apts.
Leased (1) 152 North Carolina Burlington Oak Creek Apartments Owned 54 Charlotte Sharon Village Apartments Owned 34 Tryon White Oak Village Apartments Owned 101 South Carolina Spartanburg White Oak Estates Apartments Owned 114 Tennessee Chattanooga Parkwood Retirement Apartments Leased (1) 30 Johnson City Colonial Hill Retirement Apartments Leased (1) 63 Murfreesboro AdamsPlace Owned 93 Nashville Richland Place Retirement Apts.
Charles NHC HealthCare, St. Charles Leased (1) 120 St. Louis NHC HealthCare, Maryland Heights Leased (1) 220 St. Peters Villages of St.
Charles NHC HealthCare, St. Charles Leased (1) 120 St.
The Company owns 65% of the operations entity and owns 89% of the real estate entity. (3)Ascension at Home St. Thomas is owned by a separate limited liability company. The Company owns 50% of the limited liability company. 25 Table of Contents
The Company owns 65% of the operations entity and owns 89% of the real estate entity. 25 Table of Contents
Removed
Thomas (3) Pulaski NHC HomeCare of Pulaski Somerville NHC HomeCare of Somerville Sparta NHC HomeCare of Sparta Springfield NHC HomeCare of Springfield 24 Table of Contents Hospice Agencies State City Hospice Agencies Georgia Rossville Caris Healthcare – Rossville Missouri St. Louis Caris Healthcare – St.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Plaintiffs have 90 days from the entry of the dismissal Order to file a Petition for a Writ of Certiorari with the United States Supreme Court requesting a review; otherwise, the Order affirming dismissal issued by the Eleventh Circuit will be final.
Biggest changeThe time period for the Plaintiffs to file a Petition for a Writ of Certiorari with the United States Supreme Court has expired making the Order affirming dismissal issued by the Eleventh Circuit final. Civil Investigative Demand On or about May 21, 2024, Caris Healthcare, L.P. (“Caris”) received a Civil Investigative Demand (“CID”) from the U.S.
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Attorney’s Office for the Eastern District of Tennessee. The CID requests the production of certain medical records for patients at Caris’ Nashville office and other documents related to the billing for hospice services for the period of January 1, 2019, through the date of the CID.
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The Company is cooperating with respect to the requests and remains in the process of responding to the CID. Indemnities From time to time, the Company enters into certain types of contracts that contingently require it to indemnify parties against third-party claims.
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These contracts primarily include (i) certain real estate leases, under which the Company may be required to indemnify property owners or prior facility operators for post-transfer liabilities and other claims arising from the Company’s use of the applicable premises, (ii) operations transfer agreements, in which the Company agrees to indemnify past operators of facilities against certain liabilities arising from the transfer of the operation and/or the operation thereof after the transfer to the Company or its subsidiary, (iii) certain lending agreements, under which the Company may be required to indemnify the lender against various claims and liabilities, (iv) certain agreements by and between the Company and/or its subsidiaries or affiliates, and (v) certain agreements with the Company officers, directors and others, under which the Company may be required to indemnify such persons for liabilities arising out of the nature of their relationship to the Company and/or its subsidiaries and affiliates.
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The terms of such obligations vary by contract and, in most instances, do not expressly state or include a specific or maximum dollar amount. Generally, amounts under these contracts cannot be reasonably estimated until a specific claim is asserted.
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Consequently, because no specific indemnity claims have been asserted, no liabilities have been recorded for these obligations on the consolidated balance sheets for any of the periods presented.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeEquity Compensation Plans The following table sets forth information regarding our equity compensation plans: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders 588,534 $ 61.30 1,751,461 Equity compensation plans not approved by security holders – – – Total 588,534 $ 61.30 1,751,461 27 Table of Contents The following graph and chart compare the cumulative total stockholder return for the period from January 1, 2019 through December 31, 2023 on an investment of $100 in (i) NHC’s common stock, (ii) the Standard & Poor’s 500 Stock Index ("S&P 500 Index") and (iii) the Standard & Poor’s Health Care Index ("S&P Health Care Index").
Biggest changeEquity Compensation Plans The following table sets forth information regarding our equity compensation plans: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders 631,242 $ 74.73 1,503,127 Equity compensation plans not approved by security holders – – – Total 631,242 $ 74.73 1,503,127 27 Table of Contents The following graph and chart compare the cumulative total stockholder return for the period from January 1, 2020 through December 31, 2024 on an investment of $100 in (i) NHC’s common stock, (ii) the Standard & Poor’s 500 Stock Index ("S&P 500 Index") and (iii) the Standard & Poor’s Health Care Index ("S&P Health Care Index").
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed and traded on the NYSE-American exchange under the symbol “NHC.” On December 31, 2023, NHC had approximately 13,250 stockholders, comprised of approximately 1,950 stockholders of record and an additional 11,300 stockholders indicated by security position listings.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed and traded on the NYSE-American exchange under the symbol “NHC.” On December 31, 2024, NHC had approximately 19,080 stockholders, comprised of approximately 1,880 stockholders of record and an additional 17,200 stockholders indicated by security position listings.
Stock Repurchase Programs In 2023, the Company purchased 44,349 shares of its common stock for a total cost of $2,482,000. The shares were funded from cash on hand and were cancelled and returned to the status of authorized but unissued.
Stock Repurchase Programs In 2024, the Company purchased 133,151 shares of its common stock for a total cost of $13,502,000. The shares were funded from cash on hand and were cancelled and returned to the status of authorized but unissued.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe CODM does not review assets by segment in his resource allocation and therefore, assets by segment are not disclosed below. 30 Table of Contents The following tables set forth the Company’s consolidated statements of operations by business segment (in thousands ): Year Ended December 31, 2023 Inpatient Services Homecare and Hospice All Other Total Revenues: Net patient revenues $ 956,077 $ 131,537 $ – $ 1,087,614 Other revenues 1,141 – 52,789 53,930 Net operating revenues 957,218 131,537 52,789 1,141,544 Costs and Expenses: Salaries, wages and benefits 589,279 80,610 42,455 712,344 Other operating 254,559 23,529 10,095 288,183 Facility rent 33,787 2,172 5,566 41,525 Depreciation and amortization 38,172 786 3,076 42,034 Interest 324 – – 324 Total costs and expenses 916,121 107,097 61,192 1,084,410 Income (loss) before non-operating income 41,097 24,440 (8,043 ) 57,134 Non-operating income – – 16,660 16,660 Unrealized gains on marketable equity securities – – 14,944 14,944 Income before income taxes $ 41,097 $ 24,440 $ 23,201 $ 88,738 Year Ended December 31, 2022 Inpatient Services Homecare and Hospice All Other Total Revenues: Net patient revenues $ 900,231 $ 128,854 $ – $ 1,029,085 Other revenues 136 – 45,060 45,196 Government stimulus income 11,457 – – 11,457 Net operating revenues and grant income 911,824 128,854 45,060 1,085,738 Costs and Expenses: Salaries, wages and benefits 580,707 77,688 27,774 686,169 Other operating 251,355 26,319 11,698 289,372 Facility rent 32,956 2,327 5,694 40,977 Depreciation and amortization 36,522 691 3,276 40,489 Interest 563 – – 563 Recovery of assets – – (3,728 ) (3,728 ) Total costs and expenses 902,103 107,025 44,714 1,053,842 Income before non-operating income 9,721 21,829 346 31,896 Non-operating income – – 11,141 11,141 Unrealized losses on marketable equity securities – – (15,806 ) (15,806 ) Income (loss) before income taxes $ 9,721 $ 21,829 $ (4,319 ) $ 27,231 31 Table of Contents Year Ended December 31, 2021 Inpatient Services Homecare and Hospice All Other Total Revenues: Net patient revenues $ 868,687 $ 96,855 $ – $ 965,542 Other revenues 386 – 45,014 45,400 Government stimulus income 63,360 – – 63,360 Net operating revenues and grant income 932,433 96,855 45,014 1,074,302 Costs and Expenses: Salaries, wages and benefits 557,604 59,226 49,233 666,063 Other operating 238,354 16,053 12,347 266,754 Facility rent 32,819 2,064 5,935 40,818 Depreciation and amortization 36,890 443 3,339 40,672 Interest 845 – – 845 Impairment of assets 4,497 – 3,728 8,225 Total costs and expenses 871,009 77,786 74,582 1,023,377 Income (loss) before non-operating income 61,424 19,069 (29,568 ) 50,925 Non-operating income – – 17,774 17,774 Gain on acquisition of equity method investment – – 95,202 95,202 Unrealized losses on marketable equity securities – – (13,863 ) (13,863 ) Income before income taxes $ 61,424 $ 19,069 $ 69,545 $ 150,038 Non-GAAP Financial Presentation The Company is providing certain non-GAAP financial measures as the Company believes that these figures are helpful in allowing investors to more accurately assess the ongoing nature of the Company’s operations and measure the Company’s performance more consistently across periods.
Biggest changeThe CODM does not review assets by segment in his resource allocation and therefore, assets by segment are not disclosed below. 31 Table of Contents The following tables set forth the Company’s consolidated statements of operations by business segment (in thousands ): Year Ended December 31, 2024 Inpatient Services Homecare and Hospice All Other Total Revenues: Net patient revenues $ 1,111,300 $ 140,459 $ – $ 1,251,759 Other revenues 1,315 – 44,863 46,178 Government grant income – – 9,445 9,445 Net operating revenues and grant income 1,112,615 140,459 54,308 1,307,382 Costs and Expenses: Salaries, wages and benefits 668,029 85,712 57,189 810,930 Other operating 280,867 25,927 14,596 321,390 Facility rent 33,787 2,295 7,100 43,182 Depreciation and amortization 37,988 737 3,260 41,985 Interest 4,135 – – 4,135 Total costs and expenses 1,024,806 114,671 82,145 1,221,622 Income (loss) before non-operating income 87,809 25,788 (27,837 ) 85,760 Non-operating income – – 19,690 19,690 Unrealized gains on marketable equity securities – – 30,958 30,958 Income before income taxes $ 87,809 $ 25,788 $ 22,811 $ 136,408 Year Ended December 31, 2023 Inpatient Services Homecare and Hospice All Other Total Revenues: Net patient revenues $ 956,077 $ 131,537 $ – $ 1,087,614 Other revenues 1,141 – 52,789 53,930 Net operating revenues 957,218 131,537 52,789 1,141,544 Costs and Expenses: Salaries, wages and benefits 589,279 80,610 42,455 712,344 Other operating 254,559 23,529 10,095 288,183 Facility rent 32,542 2,172 6,811 41,525 Depreciation and amortization 38,172 786 3,076 42,034 Interest 324 – – 324 Total costs and expenses 914,876 107,097 62,437 1,084,410 Income (loss) before non-operating income 42,342 24,440 (9,648 ) 57,134 Non-operating income – – 16,660 16,660 Unrealized gains on marketable equity securities – – 14,944 14,944 Income before income taxes $ 42,342 $ 24,440 $ 21,956 $ 88,738 32 Table of Contents Year Ended December 31, 2022 Inpatient Services Homecare and Hospice All Other Total Revenues: Net patient revenues $ 900,231 $ 128,854 $ – $ 1,029,085 Other revenues 136 – 45,060 45,196 Government grant income 11,457 – – 11,457 Net operating revenues and grant income 911,824 128,854 45,060 1,085,738 Costs and Expenses: Salaries, wages and benefits 580,707 77,688 27,774 686,169 Other operating 251,355 26,319 11,698 289,372 Facility rent 32,526 2,327 6,124 40,977 Depreciation and amortization 36,522 691 3,276 40,489 Interest 563 – – 563 Recovery of assets – – (3,728 ) (3,728 ) Total costs and expenses 901,673 107,025 45,144 1,053,842 Income before non-operating income 10,151 21,829 (84 ) 31,896 Non-operating income – – 11,141 11,141 Unrealized losses on marketable equity securities – – (15,806 ) (15,806 ) Income (loss) before income taxes $ 10,151 $ 21,829 $ (4,749 ) $ 27,231 Non-GAAP Financial Presentation The Company is providing certain non-GAAP financial measures as the Company believes that these figures are helpful in allowing investors to more accurately assess the ongoing nature of the Company’s operations and measure the Company’s performance more consistently across periods.
Any differences between our original estimates of reimbursements and subsequent revisions are reflected in operations in the period in which the revisions are made often due to final determination or the period of payment no longer being subject to audit or review. 39 Table of Contents Accrued Risk Reserves We are self–insured for risks related to workers’ compensation and general and professional liability insurance.
Any differences between our original estimates of reimbursements and subsequent revisions are reflected in operations in the period in which the revisions are made often due to final determination or the period of payment no longer being subject to audit or review. 41 Table of Contents Accrued Risk Reserves We are self–insured for risks related to workers’ compensation and general and professional liability insurance.
Credit losses are recorded as bad debt expense, which is included as a component of other operating expenses consolidated statements of operations Revenue Recognition – Third Party Payors Medicare and Medicaid program revenues, as well as certain Managed Care program revenues, are subject to audit and retroactive adjustment by government representatives or their agents.
Credit losses are recorded as bad debt expense, which is included as a component of other operating expenses in the consolidated statements of operations Revenue Recognition – Third Party Payors Medicare and Medicaid program revenues, as well as certain Managed Care program revenues, are subject to audit and retroactive adjustment by government representatives or their agents.
For the years ended December 31, 2023 and 2022, respectively, we recorded $0 and $11,457,000 in government stimulus income related to funds received from the CARES Act Provider Relief Fund. Total costs and expenses Total costs and expenses for 2023 increased $30,568,000, or 2.9%, to $1,084,410,000 from $1,053,842,000 in 2022.
For the years ended December 31, 2023 and 2022, respectively, we recorded $0 and $11,457,000 in government grant income related to funds received from the CARES Act Provider Relief Fund. Total costs and expenses Total costs and expenses for 2023 increased $30,568,000, or 2.9%, to $1,084,410,000 from $1,053,842,000 in 2022.
Our primary uses of cash include salaries, wages and other operating costs of our healthcare operations, the cost of additions to and acquisitions of real property, facility rent expenses, and dividend distributions. These sources and uses of cash are reflected in our interim condensed consolidated statements of cash flows and are discussed in further detail below.
Our primary uses of cash include salaries, wages and other operating costs of our healthcare operations, the cost of additions to and acquisitions of real property, facility rent expenses, and dividend distributions. These sources and uses of cash are reflected in our consolidated statements of cash flows and are discussed in further detail below.
Guarantees At December 31, 2023, we have no agreements to guarantee the debt obligations of other parties. We have no outstanding letters of credit. We may or may not in the future elect to use financial derivative instruments to hedge interest rate exposure in the future. At December 31, 2023, we did not participate in any such financial instruments.
Guarantees At December 31, 2024, we have no agreements to guarantee the debt obligations of other parties. We have no outstanding letters of credit. We may or may not in the future elect to use financial derivative instruments to hedge interest rate exposure in the future. At December 31, 2024, we did not participate in any such financial instruments.
New operations, which include one skilled nursing facility acquired May 1, 2023, three assisted living facilities that we began operating on July 1, 2023, two behavioral health hospitals, two hospice agencies and two homecare agencies, have attributed to an increase of $25,821,000 in net patient revenues for the year ended December 31, 2023 compared to the same period last year.
New operations, which include one skilled nursing facility acquired May 1, 2023, three assisted living facilities that we began operating on July 1, 2023, two behavioral health hospitals, two hospice agencies and two homecare agencies, have attributed to an increase of $25,821,000 in net patient revenues for the year ended December 31, 2023 compared to the prior year.
New operations, which include one skilled nursing facility acquired May 1, 2023, three assisted living facilities that we began operating on July 1, 2023, two behavioral health hospitals, two hospice agencies and two homecare agencies, have attributed to an increase in salaries, wages, and benefits of $13,565,000 for the year ended December 31, 2023 compared to the same period last year.
New operations, which include one skilled nursing facility acquired May 1, 2023, three assisted living facilities that we began operating on July 1, 2023, two behavioral health hospitals, two hospice agencies and two homecare agencies, have attributed to an increase in salaries, wages, and benefits of $13,565,000 for the year ended December 31, 2023 compared to the prior year.
In 2023, we contributed land to a newly-formed limited liability company resulting in an equity interest in the new entity. The fair value of the land contributed to the entity was $8,000,000 and the related cost basis in the land was $1,770,000, which resulted in a gain of $6,230,000.
In December 2023, we contributed land to a newly-formed limited liability company resulting in an equity interest in the new joint venture. The fair value of the land contributed to the entity was $8,000,000 and the related cost basis in the land was $1,770,000, which resulted in a gain of $6,230,000.
Management has undertaken a number of steps in order to best position our current and future operations. This includes working internally to examine and improve systems to be most responsive to referral sources and payors, as well as find creative initiatives to retain and attract qualified healthcare professionals.
Management has undertaken a number of steps in order to best position our current and future health care facilities. This includes working internally to examine and improve systems to be most responsive to referral sources and payors, as well as find creative initiatives to retain and attract qualified healthcare professionals.
In September 2022, the Company transferred the operations of seven skilled nursing facilities located in Massachusetts and New Hampshire, which resulted in salaries, wages, and benefits decreasing $31,920,000 for the year ended December 31, 2023 compared to the same period last year.
In September 2022, the Company transferred the operations of seven skilled nursing facilities located in Massachusetts and New Hampshire, which resulted in salaries, wages, and benefits decreasing $31,920,000 for the year ended December 31, 2023 compared to the prior year.
Excluding the unrealized gains and losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income was $54,934,000 for the year ended December 31, 2023 compared to $37,323,000 for the same period a year ago.
Excluding the unrealized gains and losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income was $54,934,000 for the year ended December 31, 2023 compared to $37,323,000 in the prior year.
Percentage of Net Operating Revenues Year Ended December 31, 2023 2022 2021 Revenues: Net patient revenues 95.3 % 94.8 % 89.9 % Other revenues 4.7 4.2 4.2 Government stimulus income – 1.0 5.9 Net operating revenues and grant income 100.0 100.0 100.0 Costs and Expenses: Salaries, wages and benefits 62.4 63.2 62.0 Other operating 25.2 26.6 24.8 Facility rent 3.6 3.8 3.8 Depreciation and amortization 3.7 3.7 3.8 Interest 0.1 0.1 0.1 Impairment (recovery) of assets – (0.3 ) 0.8 Total costs and expenses 95.0 97.1 95.3 Income from operations 5.0 2.9 4.7 Non–operating income 1.5 1.0 1.7 Gain on acquisition of equity method investment – – 8.8 Unrealized gains (losses) on marketable equity securities 1.3 (1.4 ) (1.3 ) Income before income taxes 7.8 2.5 13.9 Income tax provision (2.1 ) (0.7 ) (1.0 ) Net income 5.7 1.8 12.9 Net loss attributable to noncontrolling interest 0.2 0.3 0.0 Net income attributable to common stockholders of NHC 5.9 % 2.1 % 12.9 % 33 Table of Contents The following table sets forth the increase or (decrease) in certain items from the consolidated statements of operations as compared to the prior period (dollars in thousands) .
Percentage of Net Operating Revenues Year Ended December 31, 2024 2023 2022 Revenues: Net patient revenues 95.8 % 95.3 % 94.8 % Other revenues 3.5 4.7 4.2 Government grant income 0.7 – 1.0 Net operating revenues and grant income 100.0 100.0 100.0 Costs and Expenses: Salaries, wages and benefits 62.0 62.4 63.2 Other operating 24.6 25.2 26.6 Facility rent 3.3 3.6 3.8 Depreciation and amortization 3.2 3.7 3.7 Interest 0.3 0.1 0.1 Impairment (recovery) of assets – – (0.3 ) Total costs and expenses 93.4 95.0 97.1 Income from operations 6.6 5.0 2.9 Non–operating income 1.4 1.5 1.0 Unrealized gains (losses) on marketable equity securities 2.4 1.3 (1.4 ) Income before income taxes 10.4 7.8 2.5 Income tax provision (2.6 ) (2.1 ) (0.7 ) Net income 7.8 5.7 1.8 Net income (loss) attributable to noncontrolling interest 0.0 0.2 0.3 Net income attributable to common stockholders of NHC 7.8 % 5.9 % 2.1 % 34 Table of Contents The following table sets forth the increase or (decrease) in certain items from the consolidated statements of operations as compared to the prior period (dollars in thousands) .
The ten new operations listed above attributed to an increase in other operating expenses of $9,082,000 for the year ended December 31, 2023 compared to the same period last year.
The ten new operations listed above attributed to an increase in other operating expenses of $9,082,000 for the year ended December 31, 2023 compared to the prior year.
The tables below summarize NHC's overall performance in these Five-Star ratings versus the skilled nursing industry as of December 31, 2023: NHC Ratings Industry Ratings Total number of skilled nursing facilities, end of period 68 Number of 4 and 5-star rated skilled nursing facilities 40 Percentage of 4 and 5-star rated skilled nursing facilities 59% 36% Average rating for all skilled nursing facilities, end of period 3.6 2.9 Development and Growth We are undertaking to expand our post–acute and senior health care operations while protecting our existing operations and markets.
The tables below summarize NHC's overall performance in these Five-Star ratings versus the skilled nursing industry as of December 31, 2024: NHC Ratings Industry Ratings Total number of skilled nursing facilities, end of period 80 Number of 4 and 5-star rated skilled nursing facilities 46 Percentage of 4 and 5-star rated skilled nursing facilities 57% 35% Average rating for all skilled nursing facilities, end of period 3.6 2.8 Development and Growth We are undertaking to expand our post–acute and senior health care operations while protecting our existing operations and markets.
Excluding the government stimulus income and the seven skilled nursing facilities in Massachusetts and New Hampshire in which we ceased operations in September 2022, same-facility net operating revenues increased 11.3% as compared to the same period a year ago.
Excluding the government grant income and the seven skilled nursing facilities in Massachusetts and New Hampshire in which we ceased operations in September 2022, same-facility net operating revenues increased 11.3% in 2023 as compared to the prior year.
For the year ended December 31, 2023 our agency nurse staffing expenses decreased $30,682,000, or approximately 44.5%, compared to the same period a year ago.
For the year ended December 31, 2023 our agency nurse staffing expenses decreased $30,682,000, or approximately 44.5%, compared to the prior year.
Income taxes The income tax provision for 2022 is $7,254,000 (an effective income tax rate of 26.6%). 36 Table of Contents Liquidity, Capital Resources and Financial Condition Sources and Uses of Funds Our primary sources of cash include revenues from the operations of our healthcare operations, management and accounting services, rental income, and investment income.
Income taxes The income tax provision for 2023 is $23,450,000 (an effective income tax rate of 26.4%). 38 Table of Contents Liquidity, Capital Resources and Financial Condition Sources and Uses of Funds Our primary sources of cash include revenues from the operations of our healthcare operations, management and accounting services, rental income, and investment income.
We recorded unrealized losses in the amount of $15,806,000 for the decrease in fair value of our marketable equity securities portfolio for the year ended December 31, 2022. The marketable equity securities portfolio consists mainly of publicly-traded healthcare REIT’s and other blue-chip public companies held within our insurance companies.
We recorded unrealized gains in the amount of $14,944,000 for the increase in fair value of our marketable equity securities portfolio for the year ended December 31, 2023. The marketable equity securities portfolio consists mainly of publicly-traded healthcare REIT’s and other blue-chip public companies held within our insurance companies.
The composite skilled nursing facility per diem increased 6.7% in 2023 compared to 2022. Medicare and managed care per diem rates increased 3.3% and 5.9%, respectively, in 2023 compared to 2022. Medicaid and private pay per diem rates increased 9.4% and 5.5%, respectively, in 2023 compared to 2022.
Medicare and managed care per diem rates increased 3.3% and 5.9%, respectively, in 2023 compared to 2022. Medicaid and private pay per diem rates increased 9.4% and 5.5%, respectively, in 2023 compared to 2022.
Our ability to obtain long-term debt to meet our long–term contractual obligations and to finance our operating requirements, growth and development plans will depend upon our future performance, which will be affected by business, economic, financial and other factors, including potential changes in state and federal government payment rates for health care, customer demand, success of our marketing efforts, pressures from competitors, and the state of the economy, including the state of financial and credit markets, as well as many unforeseen factors. 38 Table of Contents Contingencies See Note 17 to the consolidated financial statements for additional information on pending litigation and other contingencies.
Our future performance will be affected by business, economic, financial and other factors, including potential changes in state and federal government payment rates for health care, customer demand, success of our marketing efforts, pressures from competitors, and the state of the economy, including the state of financial and credit markets, as well as many unforeseen factors. 40 Table of Contents Contingencies See Note 17 to the consolidated financial statements for additional information on pending litigation and other contingencies.
Long – term liquidity We expect to meet our long–term liquidity requirements primarily from our cash flows from operating activities, our current cash on hand of $107,076,000, our unrestricted marketable equity and debt securities of $116,544,000, and our borrowing capacity on the $50 million credit facility.
Long – term liquidity We expect to meet our long–term liquidity requirements primarily from our cash flows from operating activities, our current cash on hand of $76,121,000, our unrestricted marketable equity securities of $140,064,000, and our borrowing capacity on the $50 million available line of credit.
Other income Non–operating income increased by $5,519,000, or 49.5% to $16,660,000 compared to the prior year, as further detailed in Note 5 to our consolidated financial statements. We recorded unrealized gains in the amount of $14,944,000 for the increase in fair value of our marketable equity securities portfolio for the year ended December 31, 2023.
Other income Non–operating income increased by $3,030,000, or 18.2% to $19,690,000 compared to the prior year, as further detailed in Note 5 to our consolidated financial statements. We recorded unrealized gains in the amount of $30,958,000 for the increase in fair value of our marketable equity securities portfolio for the year ended December 31, 2024.
The following is a summary of our sources and uses of cash flows (dollars in thousands) : Year Ended One Year Change Year Ended One Year Change 12/31/23 12/31/22 $ % 12/31/22 12/31/21 $ % Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period $ 74,865 $ 119,743 $ (44,878 ) (37.5 ) $ 119,743 $ 158,502 $ (38,759 ) (24.5 ) Cash provided by operating activities 111,216 8,742 102,474 1,172.2 8,742 62,394 (53,652 ) (86.0 ) Cash used in investing activities (17,568 ) (5,978 ) (11,590 ) (193.9 ) (5,978 ) (65,889 ) 59,911 90.9 Cash used in financing activities (42,545 ) (47,642 ) 5,097 10.7 (47,642 ) (35,264 ) (12,378 ) (35.1 ) Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period $ 125,968 $ 74,865 $ 51,103 68.3 $ 74,865 $ 119,743 $ (44,878 ) (37.5 ) 37 Table of Contents Operating Activities Net cash provided by operating activities for the year ended December 31, 2023 was $111,216,000 as compared to $8,742,000 and $62,394,000 for the years ended December 31, 2022 and 2021, respectively.
The following is a summary of our sources and uses of cash flows (dollars in thousands) : Year Ended One Year Change Year Ended One Year Change 12/31/24 12/31/23 $ % 12/31/23 12/31/22 $ % Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period $ 125,968 $ 74,865 $ 51,103 68.3 % $ 74,865 $ 119,743 $ (44,878 ) (37.5 )% Cash provided by operating activities 107,303 111,216 (3,913 ) (3.5 ) 111,216 8,742 102,474 1,172.2 Cash used in investing activities (236,693 ) (17,568 ) (219,125 ) (1,247.3 ) (17,568 ) (5,978 ) (11,590 ) (193.9 ) Cash provided by / (used in) financing activities 100,344 (42,545 ) 142,889 335.9 (42,545 ) (47,642 ) 5,097 10.7 Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period $ 96,922 $ 125,968 $ (29,046 ) (23.1 )% $ 125,968 $ 74,865 $ 51,103 68.3 % 39 Table of Contents Operating Activities Net cash provided by operating activities for the year ended December 31, 2024 was $107,303,000 as compared to $111,216,000 and $8,742,000 for the years ended December 31, 2023 and 2022, respectively.
The transfer of the operations of the seven skilled nursing facilities located in Massachusetts and New Hampshire, as noted above, resulted in other operating expenses decreasing $15,025,000 for the year ended December 31, 2023 compared to the prior year.
The transfer of the operations of the seven skilled nursing facilities located in Massachusetts and New Hampshire, as noted above, resulted in other operating expenses decreasing $15,025,000 for the year ended December 31, 2023 compared to the prior year. Facility rent expense increased $548,000, or 1.3%, to $41,525,000. Depreciation and amortization increased 3.8% to $42,034,000.
For the year ended December 31, 2021, included are facilities that began operations from 2019 to 2021, which is two behavioral health hospitals and one memory care facility. 32 Table of Contents The table below provides reconciliations of GAAP to non-GAAP items ( dollars in thousands, except per share data ): Year Ended December 31, 2023 2022 2021 Net income attributable to National HealthCare Corporation $ 66,798 $ 22,445 $ 138,590 Non-GAAP adjustments: Unrealized (gains) losses on marketable equity securities (14,944 ) 15,806 13,863 Gain on sale of property and equipment (6,230 ) – – Gain on acquisition of equity method investment – – (95,202 ) Stock-based compensation expense 2,782 2,612 2,620 Operating results for newly-opened operations not at full capacity 2,359 5,416 922 Impairment (recovery) of assets – (3,728 ) 8,225 Income tax expense (benefit) on non-GAAP adjustments 4,169 (5,228 ) (6,373 ) Non-GAAP Net Income $ 54,934 $ 37,323 $ 62,645 GAAP diluted earnings per share $ 4.34 $ 1.45 $ 8.99 Non-GAAP adjustments: Unrealized (gains) losses on marketable equity securities (0.72 ) 0.76 0.67 Gain on sale of property and equipment (0.30 ) – – Gain on acquisition of equity method investment – – (6.16 ) Stock-based compensation expense 0.13 0.13 0.13 Operating results for newly-opened operations not at full capacity 0.10 0.26 0.04 Impairment (recovery) of assets – (0.18 ) 0.39 Non-GAAP diluted earnings per share $ 3.55 $ 2.42 $ 4.06 Results of Operations The following table and discussion set forth items from the consolidated statements of operations as a percentage of net operating revenues and grant income for the years ended December 31, 2023, 2022 and 2021.
For the year ended December 31, 2022, included are two behavioral health hospitals, one hospice agency, and one homecare agency. 33 Table of Contents The table below provides reconciliations of GAAP to non-GAAP items ( dollars in thousands, except per share data ): Year Ended December 31, 2024 2023 2022 Net income attributable to National HealthCare Corporation $ 101,927 $ 66,798 $ 22,445 Non-GAAP adjustments: Unrealized (gains) losses on marketable equity securities (30,958 ) (14,944 ) 15,806 Stock-based compensation expense 4,160 2,782 2,612 Operating results for newly-opened operations not at full capacity 130 2,359 5,416 Acquisition-related expenses 3,266 – – Employee retention credit (9,445 ) – – Gain on sale of unconsolidated company (1,024 ) – – Gain on sale of property and equipment – (6,230 ) – Impairment (recovery) of assets – – (3,728 ) Income tax expense (benefit) on non-GAAP adjustments 8,806 4,169 (5,228 ) Non-GAAP Net Income $ 76,862 $ 54,934 $ 37,323 GAAP diluted earnings per share $ 6.53 $ 4.34 $ 1.45 Non-GAAP adjustments: Unrealized (gains) losses on marketable equity securities (1.47 ) (0.72 ) 0.76 Stock-based compensation expense 0.20 0.13 0.13 Operating results for newly-opened operations not at full capacity 0.01 0.10 0.26 Acquisition-related expenses 0.16 – – Employee retention credit (0.45 ) – – Gain on sale of unconsolidated company (0.05 ) – – Gain on sale of property and equipment – (0.30 ) – Impairment (recovery) of assets – – (0.18 ) Non-GAAP diluted earnings per share $ 4.93 $ 3.55 $ 2.42 Results of Operations The following table and discussion set forth items from the consolidated statements of operations as a percentage of net operating revenues and grant income for the years ended December 31, 2024, 2023 and 2022.
The overall average census in owned and leased skilled nursing facilities for 2022 was 83.8% compared to 80.6% in 2021. The composite skilled nursing facility per diem increased 2.3% in 2022 compared to 2021. Medicare and managed care per diem rates increased 2.3% and 6.0%, respectively, in 2022 compared to 2021.
The overall average census in owned and leased skilled nursing facilities for 2024 was 88.6% compared to 87.9% in 2023. The composite skilled nursing facility per diem increased 6.8% in 2024 compared to 2023. Medicare and managed care per diem rates increased 5.0% and 0.7%, respectively, in 2024 compared to 2023.
In addition, we provide management services, accounting and financial services, and insurance services to third party operators of healthcare properties. We also own the real estate of 10 healthcare properties and lease these properties to third party operators.
In addition, we provide management services, accounting and financial services, and insurance services to third party operators of healthcare properties.
The overall census (based on operational beds) in owned and leased skilled nursing facilities for 2023 was 87.9% compared to 83.8% in 2022 and 80.6% in 2021. The pandemic caused an increased strain on America's healthcare workforce, which has created the challenge of maintaining desirable patient census levels.
The overall census (based on operational beds) in owned and leased skilled nursing facilities for 2024 was 88.6% compared to 87.9% in 2023 and 83.8% in 2022. Due to America’s healthcare labor shortage, the challenge of maintaining desirable patient census levels has been amplified.
Type of Operation Description Size Location Placed in Service Hospice Acquisition 28 agencies Various June 2021 Homecare New Agency 1 agency Anderson, SC January 2022 Hospice New Agency 1 agency Tullahoma, TN March 2022 Behavioral Health Hospital New Facility 64 beds Knoxville, TN April 2022 Behavioral Health Hospital New Facility 16 beds St.
The following table lists our recent construction and purchase activities. Type of Operation Description Size Location Placed in Service Homecare New Agency 1 agency Anderson, SC January 2022 Hospice New Agency 1 agency Tullahoma, TN March 2022 Behavioral Health Hospital New Facility 64 beds Knoxville, TN April 2022 Behavioral Health Hospital New Facility 16 beds St.
Segment Reporting The Company has two reportable operating segments: (1) inpatient services, which includes the operation of skilled nursing facilities, assisted and independent living facilities, and behavioral health hospitals; and (2) homecare and hospice services.
Our experience is that achieving goals in these patient care areas improves both patient and employee satisfaction. Segment Reporting The Company has two reportable operating segments: (1) inpatient services, which includes the operation of skilled nursing facilities, assisted and independent living facilities, and behavioral health hospitals; and (2) homecare and hospice services.
At December 31, 2023, we operate or manage 68 skilled nursing facilities with 8,732 1icensed beds, 26 assisted living facilities with 1,501 units, five independent living facilities, three behavioral health hospitals, 35 homecare agencies, and 30 hospice agencies located in 8 states.
At December 31, 2024, we operate or manage 80 skilled nursing facilities with 10,341 1icensed beds, 26 assisted living facilities with 1,413 units, nine independent living facilities, three behavioral health hospitals, 34 homecare agencies, and 33 hospice agencies located in 9 states.
Included in the adjustments for non-cash items are depreciation expense, equity in earnings of unconsolidated investments, unrealized losses on our marketable equity securities, recovery of assets, deferred taxes, and stock compensation.
In 2023, there was cash provided by working capital in the amount of $17,396,000. Included in the adjustments for non-cash items are depreciation expense, equity in earnings of unconsolidated investments, unrealized losses on our marketable equity securities, gain on the sale of an unconsolidated company, deferred taxes, and stock compensation.
The operating results for the start-up operations not at full capacity include the following: for the year ended December 31, 2023, included are operations that began from 2021 to 2023, which is two behavioral health hospitals, two homecare agencies, and two hospice agencies.
The operating results for newly opened facilities or agencies not at full capacity include newly constructed healthcare facilities or agencies that are still considered in the start-up phase, which include two hospice agencies for the year ended December 31, 2024. For the year ended December 31, 2023, included are two behavioral health hospitals, two homecare agencies, and two hospice agencies.
Additionally, NHC is in various stages of partnerships with hospital systems, payors, and other post–acute alliances to better position ourselves so we are an active participant in the delivery of post-acute healthcare services. Quality of Patient Care CMS introduced the Five-Star Quality Rating System to help consumers, their families and caregivers compare skilled nursing facilities more easily.
Additionally, NHC is in various stages of partnerships with hospital systems, payors, and other post–acute alliances to better position ourselves so we are an active participant in the delivery of post-acute healthcare services.
We have set aside restricted cash and restricted marketable securities to fund our professional liability and workers’ compensation reserves. As to exposure for professional liability claims, we have developed performance measures to bring focus to the patient care issues most likely to produce professional liability exposure, including in–house acquired pressure ulcers, significant weight loss and numbers of falls.
As to exposure for professional liability claims, we have developed performance measures to bring focus to the patient care issues most likely to produce professional liability exposure, including in–house acquired pressure ulcers, significant weight loss and numbers of falls. These programs for certification, which we regularly modify and improve, have produced measurable improvements in reducing these incidents.
Specifically, the Company believes the presentation of non-GAAP financial information should exclude the following items: the unrealized gains or losses on our marketable equity securities, operating results for start-up healthcare operations not at full capacity, any gains on the acquisition of equity method investments, gains on the sale of property and equipment, stock-based compensation expense, and impairments or recoveries of long-lived assets and notes receivable.
Specifically, the Company believes the presentation of non-GAAP financial information that excludes the unrealized gains or losses on our marketable equity securities, stock-based compensation expense, operating results for start-up healthcare operations not at full capacity, acquisition related expenses, the recognition of the employee retention credit, gains on sales of unconsolidated companies, gains on the sale of property and equipment, and impairments or recoveries of long-lived assets is helpful in allowing investors to assess the Company’s operations more accurately.
Period to Period Increase (Decrease) 2023 vs. 2022 2022 vs. 2021 Amount Percent Amount Percent Revenues: Net patient revenues $ 58,529 5.7 % $ 63,543 6.6 % Other revenues 8,734 19.3 (204 ) (0.4 ) Government stimulus income (11,457 ) (100.0 ) (51,903 ) (81.9 ) Net operating revenues and grant income 55,806 5.1 11,436 1.1 Costs and Expenses: Salaries, wages and benefits 26,175 3.8 20,106 3.0 Other operating (1,189 ) (0.4 ) 22,618 8.5 Facility rent 548 1.3 159 0.4 Depreciation and amortization 1,545 3.8 (183 ) (0.4 ) Interest (239 ) (42.5 ) (282 ) (33.4 ) Impairment (recovery) of assets 3,728 100.0 (11,953 ) (145.3 ) Total costs and expenses 30,568 2.9 30,465 3.0 Income from operations 25,238 79.1 (19,029 ) (37.4 ) Non–operating income 5,519 49.5 (6,633 ) (37.3 ) Gain on acquisition of equity method investment – – (95,202 ) (100.0 ) Unrealized gains (losses) on marketable equity securities 30,750 194.5 (1,943 ) (14.0 ) Income before income taxes 61,507 225.9 (122,807 ) (81.9 ) Income tax provision (16,196 ) (223.3 ) 3,697 33.8 Net income 45,311 226.8 (119,110 ) (85.6 ) Net (income) loss attributable to noncontrolling interest (958 ) (38.8 ) 2,965 596.6 Net income attributable to common stockholders of NHC $ 44,353 197.6 % $ (116,145 ) (83.8 )% 2023 Compared to 2022 Results for the year ended December 31, 2023 compared to 2022 include a 5.1% increase in net operating revenues and grant income.
Period to Period Increase (Decrease) 2024 vs. 2023 2023 vs. 2022 Amount Percent Amount Percent Revenues: Net patient revenues $ 164,145 15.1 % $ 58,529 5.7 % Other revenues (7,752 ) (14.4 ) 8,734 19.3 Government grant income 9,445 100.0 (11,457 ) (100.0 ) Net operating revenues and grant income 165,838 14.5 55,806 5.1 Costs and Expenses: Salaries, wages and benefits 98,586 13.8 26,175 3.8 Other operating 33,207 11.5 (1,189 ) (0.4 ) Facility rent 1,657 4.0 548 1.3 Depreciation and amortization (49 ) (0.1 ) 1,545 3.8 Interest 3,811 1,176.2 (239 ) (42.5 ) Impairment (recovery) of assets – – 3,728 100.0 Total costs and expenses 137,212 12.7 30,568 2.9 Income from operations 28,626 50.1 25,238 79.1 Non–operating income 3,030 18.2 5,519 49.5 Unrealized gains (losses) on marketable equity securities 16,014 107.2 30,750 194.5 Income before income taxes 47,670 53.7 61,507 225.9 Income tax provision (10,872 ) (46.4 ) (16,196 ) (223.3 ) Net income 36,798 56.4 45,311 226.8 Net (income) loss attributable to noncontrolling interest (1,669 ) (110.5 ) (958 ) (38.8 ) Net income attributable to common stockholders of NHC $ 35,129 52.6 % $ 44,353 197.6 % 2024 Compared to 2023 Net operating revenues and grant income for the year ended December 31, 2024 totaled $1,307,382,000 compared to $1,141,544,000 for the year ended December 31, 2023, an increase of 14.5%.
Other operating expenses increased $22,618,000, or 8.5%, to $289,372,000 for the year ended December 31, 2022 compared to $266,754,000 for the prior year. Other operating expenses as a percentage of net operating revenues and grant income was 26.7% and 24.8% for the years ended December 31, 2022 and 2021, respectively.
Other operating expenses increased $33,207,000, or 11.5%, to $321,390,000 for the year ended December 31, 2024 compared to $288,183,000 for the prior year. Other operating expenses as a percentage of net operating revenues and grant income was 24.6% and 25.2% for the years ended December 31, 2024 and 2023, respectively.
In September 2022, the Company transferred the operations of seven skilled nursing facilities located in Massachusetts and New Hampshire, which resulted in net patient revenues decreasing $48,820,000 for the year ended December 31, 2023 compared to the same period last year. 34 Table of Contents Other revenues in 2023 were $53,930,000, an increase of $8,734,000, or 19.3%, as further detailed in Note 4 to our consolidated financial statements.
In September 2022, the Company transferred the operations of seven skilled nursing facilities located in Massachusetts and New Hampshire, which resulted in net patient revenues decreasing $48,820,000 for the year ended December 31, 2023 compared to the prior year.
For the year ended December 31, 2023, GAAP net income attributable to NHC was $66,798,000 compared to net income of $22,445,000 for the same period in 2022.
The net operating revenues increase was primarily driven by the continued occupancy increase in our skilled nursing facilities and increases in skilled nursing per diems from some of our governmental payors. For the year ended December 31, 2023, GAAP net income attributable to NHC was $66,798,000 compared to net income of $22,445,000 for the same period in 2022.
Included in net patient revenues for the years ended December 31, 2023 and 2022, respectively, is $20,214,000 and $19,442,000 of supplemental Medicaid payments that were received to help mitigate the inflationary labor and medical supplies costs caused by the pandemic. The overall average census in owned and leased skilled nursing facilities for 2023 was 87.9% compared to 83.8% in 2022.
Included in net patient revenues for the years ended December 31, 2023 and 2022, respectively, is $20,214,000 and $19,442,000 of supplemental Medicaid payments that were received to help mitigate the inflationary labor and medical supplies costs caused by the pandemic. 37 Table of Contents Other revenues in 2023 were $53,930,000, an increase of $8,734,000, or 19.3%, as further detailed in Note 4 to our consolidated financial statements.
Income taxes The income tax provision for 2023 is $23,450,000 (an effective income tax rate of 26.4%). 2022 Compared to 2021 Results for the year ended December 31, 2022 compared to 2021 include a 1.1% increase in net operating revenues and grant income.
Income taxes The income tax provision for 2024 is $34,322,000 (an effective income tax rate of 25.2%). 36 Table of Contents 2023 Compared to 2022 Net operating revenues and grant income for the year ended December 31, 2023 totaled $1,141,544,000 compared to $1,085,738,000 for the year ended December 31, 2022, an increase of 5.1%.
Excluding the gain on the Caris acquisition, as well as the unrealized losses in our marketable equity securities portfolio and the other non-GAAP adjustments, non-GAAP net income for the year ended December 31, 2022 was $37,323,000 compared to $62,645,000 for the year ended December 31, 2021.
Excluding the unrealized gains and losses in our marketable equity securities portfolio and other non-GAAP adjustments, adjusted net income was $76,862,000 for the year ended December 31, 2024 compared to $54,934,000 for the same period a year ago.
Cash provided by operating activities consisted of net income of $65,288,000 and adjustments for non–cash items of $33,625,000. There was cash provided by working capital in the amount of $17,396,000 for the year ended December 31, 2023 compared to cash used for working capital needs in the amount of $73,697,000 in 2022.
Cash provided by operating activities consisted of net income of $102,086,000 and adjustments for non–cash items of $32,027,000. There was cash used for working capital needs in the amount of $25,717,000 for the year ended December 31, 2024, which was primarily driven by the White Oak acquisition.
In addition to cash flows from operations, we have current cash on hand of $107,076,000 and unrestricted marketable equity and debt securities of $116,544,000. We also have unencumbered real estate, as well the borrowing capacity on our $50 million credit facility, that can be used to meet our contractual obligations and growth and development plans in the next twelve months.
In addition to cash flows from operations, we have current cash on hand of $76,121,000 and unrestricted marketable equity securities of $140,064,000. We also have unencumbered real estate and the borrowing capacity on our $50 million available line of credit.
We incurred increased expenses from our professional liability actuarial report in the fourth quarter of 2022 compared to the prior year of $3,284,000. We also continue to face inflationary pressures in certain categories within other operating expenses as well, such as food/dietary supplies and drugs/pharmaceutical supplies. Facility rent expense increased $159,000, or 0.4%, to $40,977,000.
The exiting of these operations resulted in other operating expenses decreasing $7,101,000 for the year ended December 31, 2024 compared to the prior year. We continue to face inflationary pressures in certain categories within other operating expenses as well, such as food/dietary supplies and drugs/pharmaceutical supplies. Facility rent expense increased $1,657,000, or 4.0%, to $43,182,000.
Net operating revenues and grant income Net patient revenues totaled $1,087,614,000 an increase of $58,529,000, or 5.7%, compared to the prior year.
Net operating revenues and grant income Net patient revenues totaled $1,087,614,000 in 2023, an increase of $58,529,000, or 5.7%, compared to the prior year. The overall average census in owned and leased skilled nursing facilities for 2023 was 87.9% compared to 83.8% in 2022. The composite skilled nursing facility per diem increased 6.7% in 2023 compared to 2022.
Salaries, wages, and benefits increased $20,106,000, or 3.0%, to $686,169,000 from $666,063,000. Salaries, wages, and benefits as a percentage of net operating revenues and grant income was 63.2% compared to 62.0% for the years ended December 31, 2022 and 2021, respectively.
Salaries, wages, and benefits as a percentage of net operating revenues and grant income was 62.0% compared to 62.4% for the years ended December 31, 2024 and 2023, respectively. The White Oak operations attributed to an increase of $63,223,000 in salaries, wages, and benefits for the year ended December 31, 2024 compared to the prior year.
We also have substantial value in our unencumbered real estate assets which could potentially be used as collateral in future borrowing opportunities. At December 31, 2023, we do not have any long-term debt.
We also have substantial value in our unencumbered real estate assets, which could potentially be used as collateral in future borrowing opportunities. Our ability to obtain long-term debt to meet our long–term contractual obligations and to finance our operating requirements, growth and development plans will depend upon our future performance.
The Five-Star Quality Rating System gives each skilled nursing operation a rating ranging between one and five stars in various categories (five stars being the best). The Company has always strived for patient-centered care and quality outcomes as precursors to outstanding financial performance.
Quality of Patient Care The Centers for Medicare and Medicaid Services (“CMS”) introduced the Five-Star Quality Rating System to help consumers, their families and caregivers compare skilled nursing facilities more easily. The Five-Star Quality Rating System gives each skilled nursing operation a rating ranging between one and five stars in various categories (five stars being the best).
We repurchased common shares outstanding in the amount of $2,482,000, $9,903,000, and $836,000 for the years ended December 31, 2023, 2022, and 2021, respectively. Short – term liquidity We expect to meet our short–term liquidity requirements primarily from our cash flows from operating activities.
Principal payments made under finance lease obligations was $860,000, $4,985,000, and $4,695,000 for the years ended December 31, 2024, 2023, and 2022, respectively. The finance lease obligations terminated during the first quarter of 2024. Short – term liquidity We expect to meet our short–term liquidity requirements primarily from our cash flows from operating activities.
Louis, MO June 2022 Hospice New Agency 1 agency Cedar Bluff, VA March 2023 Skilled Nursing Acquisition 66 beds Nashville, TN May 2023 Homecare New Agency 1 agency Tallahassee, FL May 2023 Assisted Living Facility New Operations 135 units Vero Beach, FL July 2023 Assisted Living Facility New Operations 95 units Merritt Island, FL July 2023 Assisted Living Facility New Operations 100 units Stuart, FL July 2023 Accrued Risk Reserves Our accrued professional liability and workers’ compensation reserves totaled $103,259,000 and $102,469,000 at December 31, 2023 and 2022, respectively, and are a primary area of management focus.
Louis, MO June 2022 Hospice New Agency 1 agency Cedar Bluff, VA March 2023 Skilled Nursing Acquisition 66 beds Nashville, TN May 2023 Homecare New Agency 1 agency Tallahassee, FL May 2023 Assisted Living Facility New Operations 135 units Vero Beach, FL July 2023 Assisted Living Facility New Operations 95 units Merritt Island, FL July 2023 Assisted Living Facility New Operations 100 units Stuart, FL July 2023 Hospice New Agency 1 agency Morristown, TN April 2024 Hospice New Agency 1 agency Lawrenceburg, TN July 2024 Hospice New Agency 1 agency Wytheville, VA August 2024 Hospice New Agency 1 agency Clinton, TN October 2024 30 Table of Contents On August 1, 2024, the Company purchased the White Oak portfolio, including its long-term care pharmacy.
Investing Activities Net cash used in investing activities totaled $17,568,000 for the year ended December 31, 2023, as compared to $5,978,000 and $65,889,000 for the years ended December 31, 2022 and 2021, respectively. Cash used for property and equipment additions was $27,901,000, $30,200,000, and $39,399,000 for the years ended December 31, 2023, 2022 and 2021, respectively.
Investing Activities Net cash used in investing activities totaled $236,693,000 for the year ended December 31, 2024, as compared to $17,568,000 and $5,978,000 for the years ended December 31, 2023 and 2022, respectively. On August, 1, 2024, the acquisition of White Oak resulted in cash used of $215,896,000, as described in Note 2 to our consolidated financial statements.
Financing Activities Net cash used in financing activities totaled $42,545,000, $47,642,000, and $35,264,000 for the years ended December 31, 2023, 2022, and 2021, respectively. Principal payments made under finance lease obligations was $4,985,000, $4,695,000, and $4,423,000 for the years ended December 31, 2023, 2022, and 2021, respectively.
Financing Activities Net cash provided by financing activities totaled $100,344,000 for the year ended December 31, 2024. Net cash used in financing activities totaled $42,545,000 and $47,642,000 for the years ended December 31, 2023 and 2022, respectively. The funding for the White Oak acquisition was provided by the Company’s cash on hand and borrowings of $150,000,000.
Dividends paid to common stockholders was $35,560,000, $34,604,000, and $32,030,000 for the years ended December 31, 2023, 2022 and 2021, respectively. Proceeds from the issuance of common stock totaled $313,000, $2,114,000, and $3,441,000 for 2023, 2022 and 2021, respectively.
Proceeds from the issuance of common stock totaled $14,268,000, $313,000, and $2,114,000 for 2024, 2023 and 2022, respectively. We repurchased common shares outstanding in the amount of $13,502,000, $2,482,000, and $9,903,000 for the years ended December 31, 2024, 2023, and 2022, respectively.
Depreciation and amortization decreased 0.4% to $40,489,000. Interest expense decreased $282,000 to $563,000 in 2022 from $845,000 in 2021. At December 31, 2022, we have no outstanding long-term debt. During 2022, we had a note receivable recovery of $3,728,000.
Depreciation and amortization decreased 0.1% to $41,985,000. Interest expense increased $3,811,000 to $4,135,000 in 2024 from $324,000 in 2023. At December 31, 2024, we have outstanding long-term debt of $137,000,000 due to the White Oak acquisition. In 2023, we didn't have any outstanding long-term debt.
Proceeds from the sale of marketable securities, net of purchases, resulted in cash proceeds of $17,895,000 and $16,168,000 in 2023 and 2022, respectively. For the year ended December 31, 2022, the Company collected notes receivable of $3,879,000 and received proceeds from the sale of property and equipment of $4,175,000.
In January 2024, the Company sold its 50% joint venture ownership interest in a homecare agency resulting in proceeds from the sale of $2,100,000. Proceeds from the sale of marketable securities, net of purchases, resulted in cash proceeds of $16,913,000, $17,895,000, and $16,168,000 in 2024, 2023, and 2022, respectively.
Medicaid and private pay per diem rates increased 3.0% and 4.7%, respectively, in 2022 compared to 2021. In June 2021, the Company acquired the remaining ownership interest in Caris, which resulted in net patient revenues increasing $31,566,000 for the year ended December 31, 2022 compared to the prior year.
Medicaid and private pay per diem rates increased 8.6% and 12.3%, respectively, in 2024 compared to 2023. White Oak, with five months of operations since the acquisition date, attributed to an increase of $96,052,000 in net patient revenues for the year ended December 31, 2024 compared to 2023.
Other income Non–operating income decreased by $6,633,000, or 37.3% to $11,141,000 compared to the prior year, as further detailed in Note 5 to our consolidated financial statements. The decrease in our non-operating income is due to the June 2021 acquisition of Caris.
Interest expense decreased $239,000 to $324,000 in 2023 from $563,000 in 2022. At December 31, 2023, we have no outstanding long-term debt. Other income Non–operating income increased by $5,519,000, or 49.5% to $16,660,000 compared to the prior year, as further detailed in Note 5 to our consolidated financial statements.
For the year ended December 31, 2022, GAAP net income attributable to NHC was $22,445,000 compared to net income of $138,590,000 for the same period in 2021. The large decrease in our reported GAAP net income for 2022 was primarily due to the $95.2 million gain recorded in 2021 from the acquisition of Caris.
The net operating revenues increase was primarily driven by the August 1, 2024 acquisition of White Oak Manor ("White Oak"). For the year ended December 31, 2024, GAAP net income attributable to NHC was $101,927,000 compared to net income of $66,798,000 for the same period in 2023.
For the year ended December 31, 2022, our agency nurse staffing expenses were $68,875,000 compared to $36,391,000 for the 2021 year. In September 2022, the Company transferred the operations of seven skilled nursing facilities located in Massachusetts and New Hampshire resulting in salaries, wages, and benefits decreasing $18,053,000 for the year ended December 31, 2022 compared to the prior year.
On March 1, 2024, the Company exited the lease and transferred the operations of two skilled nursing facilities (included assisted living units) and one memory care facility located in Missouri. The exiting of these operations resulted in salaries, wages, and benefits decreasing $20,169,000 for the year ended December 31, 2024 compared to the prior year.
The Company’s assessment of whether the terms and conditions for amounts received have been met for income recognition and the Company’s related income calculation considered all frequently asked questions and other interpretive guidance issued to date by HHS. 29 Table of Contents Executive Summary Earnings To monitor our earnings, we have developed budgets and management reports to monitor labor, census, and the composition of revenues.
We also own the real estate of 10 healthcare properties and lease these properties to third party operators. 29 Table of Contents Executive Summary Earnings To monitor our earnings, we have developed budgets and management reports to monitor labor, census, and the composition of revenues.
In September 2022, the Company transferred the operations of seven skilled nursing facilities located in Massachusetts and New Hampshire resulting in net patient revenues decreasing $18,732,000 for the year ended December 31, 2022 compared to the prior year. 35 Table of Contents Other revenues in 2022 were $45,196,000, a decrease of $204,000, or 0.4%, as further detailed in Note 4 to our consolidated financial statements.
Also included in net patient revenues for the years ended December 31, 2024 and 2023, respectively, is $12,749,000 and $20,214,000 of supplemental Medicaid payments that were received to help mitigate the healthcare workforce crisis and the inflationary labor market. 35 Table of Contents Other revenues in 2024 were $46,178,000, a decrease of $7,752,000, or 14.4%, as further detailed in Note 4 to our consolidated financial statements.
Our Caris acquisition in June 2021 increased salaries, wages, and benefits $19,040,000 for the year ended December 31, 2022 compared to 2021. We continue to face workforce and labor shortages within all of our operations, which increases wage pressure in regards to retaining and attracting qualified healthcare partners (employees).
We continue to face workforce and labor shortages within all of our operations. The labor and workforce shortages have resulted in us contracting with agency nurse staffing companies. For the year ended December 31, 2024 our agency nurse staffing expenses decreased $19,962,000, or approximately 66.2%, compared to the same period a year ago.
Removed
Legislation and Government Stimulus Due to COVID-19 The U.S. government enacted several laws beginning in March 2020 designed to help the nation respond to the COVID-19 pandemic. The new laws impacted healthcare providers in a variety of ways, but the largest legislation from a monetary relief perspective was the CARES Act.
Added
The Company has always strived for patient-centered care and quality outcomes as precursors to outstanding financial performance.
Removed
Through the CARES Act, as well as the PPPCHE, the federal government allocated $178 billion to the Public Health and Social Services Emergency Fund, which is referred to as the Provider Relief Fund.
Added
The White Oak portfolio consists of 15 skilled nursing facilities, two assisted living facilities, and four independent living facilities. The White Oak operations have 1,928 licensed skilled nursing beds, 48 assisted living units, and 302 independent living units in the states of South Carolina and North Carolina.
Removed
The Provider Relief Fund is administered through grants and other mechanisms to skilled nursing providers, home health providers, hospitals, and other Medicare and Medicaid enrolled providers to cover unreimbursed health care related expenses or lost revenue attributable to the public health emergency resulting from COVID-19.
Added
Accrued Risk Reserves Our accrued professional liability and workers’ compensation reserves totaled $103,616,000 and $103,259,000 at December 31, 2024 and 2023, respectively, and are a primary area of management focus. We have set aside restricted cash and restricted marketable securities to fund our professional liability and workers’ compensation reserves.
Removed
The Provider Relief Fund grants come with terms and condition certifications in which all providers are required to submit documents to ensure the funds are used for healthcare-related expenses or lost revenue attributable to COVID-19.
Added
The increase in non-GAAP earnings for the year ended December 31, 2024 compared to 2023 was primarily due to the skilled nursing per diem increases from some of our government payors, the continued reduction of nurse agency staffing expense within our operations, and the White Oak operations being accretive to earnings.
Removed
The Company recorded $0, $11,457,000 and $63,360,000 of government stimulus income from the Provider Relief Funds for the years ended December 31, 2023, 2022 and 2021, respectively. The grant income was determined on a systemic basis in line with the recognition of specific expenses and lost revenues for which the grants are intended to compensate.
Added
On August 1, 2024, the Company purchased the White Oak portfolio, including its long-term care pharmacy. The White Oak portfolio consists of 15 skilled nursing facilities, two assisted living facilities, and four independent living facilities.
Removed
In July 2022, CMS launched its enhanced Five-Star Quality Rating System which integrates weekend staffing rates for nurses and information on annual turnover among nurses and administrators.
Added
The White Oak operations have 1,928 licensed skilled nursing beds, 48 assisted living units, and 302 independent living units in the states of South Carolina and North Carolina. Net operating revenues and grant income Net patient revenues totaled $1,251,759,000 in 2024, an increase of $164,145,000, or 15.1%, compared to 2023.
Removed
The following table lists our recent construction and purchase activities.
Added
On March 1, 2024, the Company exited a lease and transferred the operations of two skilled nursing facilities (included assisted living units) and one memory care facility located in Missouri. The exiting of these operations resulted in net patient revenues decreasing $26,929,000 for the year ended December 31, 2024 compared to the prior year.
Removed
These programs for certification, which we regularly modify and improve, have produced measurable improvements in reducing these incidents. Our experience is that achieving goals in these patient care areas improves both patient and employee satisfaction.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt December 31, 2023, the credit quality ratings for our fixed income portfolio consisted of the following investment and non-investment grades (as a percent of fair value): 7% AAA rated, 42% AA rated, 38% A rated, 12% BBB rated, and 1% BB rated.
Biggest changeAt December 31, 2024, the credit quality ratings for our fixed income portfolio consisted of the following investment and non-investment grades (as a percent of fair value): 6% AAA rated, 42% AA rated, 33% A rated, 18% BBB rated, and 1% BB rated.
Additionally, the fair values of interest rate sensitive instruments may be affected by the creditworthiness of the issuer, prepayment options, the liquidity of the instrument and other general market conditions. At December 31, 2023, we have available for sale marketable debt securities in the amount of $127,727,000.
Additionally, the fair values of interest rate sensitive instruments may be affected by the creditworthiness of the issuer, prepayment options, the liquidity of the instrument and other general market conditions. At December 31, 2024, we have available for sale marketable debt securities in the amount of $119,804,000.
Equity Price and Concentration Risk Our marketable equity securities are recorded at their fair market value based on quoted market prices. Thus, there is exposure to equity price risk, which is the potential change in fair value due to a change in quoted market prices. At December 31, 2023, the fair value of our marketable equity securities is approximately $137,896,000.
Equity Price and Concentration Risk Our marketable equity securities are recorded at their fair market value based on quoted market prices. Thus, there is exposure to equity price risk, which is the potential change in fair value due to a change in quoted market prices. At December 31, 2024, the fair value of our marketable equity securities is approximately $163,254,000.
Our investment in NHI comprises approximately $91,071,000, or 66.0%, of the total fair value of our marketable equity securities. We manage our exposure to NHI by closely monitoring the financial condition, performance, and outlook of the company.
Our investment in NHI comprises approximately $113,003,000, or 69.0%, of the total fair value of our marketable equity securities. We manage our exposure to NHI by closely monitoring the financial condition, performance, and outlook of the company.
Of the total unrealized gains in our marketable equity securities, approximately $66,337,000 is related to our investment in NHI. 40 Table of Contents
Of the total unrealized gains in our marketable equity securities, approximately $88,269,000 is related to our investment in NHI. 42 Table of Contents
Hypothetically, a 10% change in quoted market prices would result in a related increase or decrease in the fair value of our equity investments of approximately $13,790,000. At December 31, 2023, our equity securities had net unrealized gains of $83,586,000.
Hypothetically, a 10% change in quoted market prices would result in a related increase or decrease in the fair value of our equity investments of approximately $16,325,000. At December 31, 2024, our equity securities had net unrealized gains of $114,545,000.
Added
Our Credit Facility exposes us to variability in interest payments due to changes in Secured Overnight Financing Rate ("SOFR") interest rates. We manage our exposure to this interest rate risk by monitoring available financing alternatives. Our credit agreement requires principal and interest payments to be paid through maturity, pursuant to the amortization schedule.

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