Operations Overview - As of June 30, 2024, the company operates or manages 65 skilled nursing facilities with a total of 8,421 licensed beds, 24 assisted living facilities with 1,365 units, and 34 homecare agencies[110]. - The overall census in owned and leased skilled nursing facilities for the three months ending June 30, 2024, was 89.0%, up from 87.9% for the same period a year ago[112]. - The overall census in owned and leased skilled nursing facilities for the six months ending June 30, 2024, was 88.7%, compared to 87.7% for the same period a year ago[112]. - The company has 62% of its skilled nursing facilities rated 4 and 5 stars, compared to 36% for the industry average[115]. - The company purchased the White Oak portfolio, which includes six skilled nursing facilities and totals 1,928 licensed beds[117]. Financial Performance - The Company reported net patient revenues of $245,385 thousand for inpatient services and $34,533 thousand for homecare and hospice for the three months ended June 30, 2024, totaling $279,918 thousand[131]. - Total costs and expenses for the Company were $278,138 thousand for the three months ended June 30, 2024, resulting in income from operations of $22,520 thousand[131]. - For the six months ended June 30, 2024, the Company reported net patient revenues of $497,638 thousand for inpatient services and $68,103 thousand for homecare and hospice, totaling $565,741 thousand[133]. - The Company’s total costs and expenses for the six months ended June 30, 2024, were $559,685 thousand, leading to income from operations of $38,149 thousand[133]. - The Company’s non-operating income for the three months ended June 30, 2024, was $4,956 thousand, contributing to income before income taxes of $36,600 thousand[131]. - For the three months ended June 30, 2024, GAAP net income attributable to the company was $26,844,000, a 64.5% increase from $16,281,000 in the same period of 2023[139]. - Adjusted net income for the quarter ended June 30, 2024 was $15,612,000, compared to $13,658,000 for the same period in 2023, reflecting a 14.3% increase[139]. - For the six months ended June 30, 2024, GAAP net income attributable to the company was $53,057,000, compared to $28,004,000 for the same period in 2023, representing an increase of 89.4%[149]. - Net patient revenues for the six months ended June 30, 2024 increased by $38,129,000, or 7.2%, compared to the same period last year[151]. Revenue Sources and Changes - The company recorded $2,585,000 in net patient revenues from supplemental Medicaid payments for the three months ended June 30, 2024[124]. - New operations contributed an increase of $9,803,000 in net patient revenues for the six months ended June 30, 2024, compared to the same period in the prior year[152]. - The company exited operations of two skilled nursing facilities and one memory care facility, resulting in a decrease of $10,869,000 in net patient revenues for the six months ended June 30, 2024[154]. - Other revenues decreased by $1,885,000, or 7.7%, compared to the same period last year[154]. Cost Management - Total costs and expenses increased by $31,529,000, or 6.0%, to $559,685,000 for the six months ended June 30, 2024, compared to $528,156,000 in the prior year[154]. - Total costs and expenses for the three months ended June 30, 2024 increased by $9,533,000, or 3.5%, to $278,138,000 from $268,605,000[145]. - Salaries, wages, and benefits as a percentage of net operating revenues decreased to 59.9% from 62.0% for the three months ended June 30, 2023[145]. - Salaries, wages, and benefits as a percentage of net operating revenues decreased to 60.8% for the six months ended June 30, 2024, from 62.1% in the prior year[155]. - Agency staffing expense decreased approximately 54% for the six months ended June 30, 2024, compared to the same period in 2023[155]. Medicare and Medicaid Impact - The average Medicare per diem rate for skilled nursing facilities increased by 5.0% for the first six months of 2024 compared to the same period in 2023[122]. - The fiscal year 2024 Medicare payment rates for skilled nursing facilities will see a net increase of 4.0%, approximately $1.4 billion, compared to 2023 levels[119]. - The state of Tennessee's individual nursing facility increases are estimated to result in an additional revenue of approximately $11 million annually for fiscal year 2025[122]. - In fiscal year 2025, CMS projects a decrease of 1.7% or $280 million in payments to home health agencies compared to the previous year[127]. - For fiscal year 2024, CMS issued a hospice payment rate increase of 3.1%, amounting to $780 million, effective October 1, 2023[127]. - For fiscal year 2025, CMS announced a hospice payment rate increase of 2.9%, totaling $790 million, effective October 1, 2024[128]. Cash Flow and Liquidity - Net cash provided by operating activities was $60,307,000 for the six months ended June 30, 2024, compared to $53,178,000 in the same period last year[161]. - Cash, cash equivalents, and restricted cash at the end of the period increased by 60.9% to $165,605,000 from $102,905,000[160]. - The company expects to meet short-term liquidity requirements primarily from cash flows from operating activities and a new $200 million credit facility effective August 1, 2024[164]. Marketable Securities - The fair value of marketable equity securities was approximately $154,883,000 as of June 30, 2024, with net unrealized gains of $107.1 million[170]. - As of June 30, 2024, the fair value of the company's marketable equity securities is approximately $154.9 million[170]. - The investment in NHI comprises approximately $110.4 million, or 71.3%, of the total fair value of the equity securities portfolio[170]. - A hypothetical 10% change in quoted market prices would result in a related increase or decrease in the fair value of equity investments of approximately $15.5 million[170]. - The company's equity securities had net unrealized gains of $107.1 million as of June 30, 2024[170]. - Of the $107.1 million in unrealized gains, $85.7 million is related to the investment in NHI[170]. Non-GAAP Financial Measures - The Company emphasizes the importance of non-GAAP financial measures to provide a clearer assessment of ongoing operations and performance consistency across periods[135]. - The Company believes that excluding unrealized gains or losses on marketable equity securities and other specific items in non-GAAP measures helps investors assess operations more accurately[136].

Financial Performance - Net operating revenues for Q1 2024 totaled $297,176,000, an increase of 10.2% compared to $269,563,000 in Q1 2023[1] - GAAP net income attributable to NHC was $26,213,000 for Q1 2024, up from $11,723,000 in Q1 2023, representing a growth of 123.3%[2] - Adjusted net income for Q1 2024 was $15,048,000, a 24.7% increase from $12,071,000 in Q1 2023[2] - GAAP diluted earnings per share rose to $1.69 in Q1 2024 from $0.76 in Q1 2023, while adjusted diluted earnings per share increased to $0.97 from $0.79[2] Operational Metrics - Total skilled nursing patient days increased to 585,851 in Q1 2024 from 576,406 in Q1 2023[9] - Average skilled nursing per diem increased to $343.48 in Q1 2024 from $315.81 in Q1 2023[9] - NHC operates 65 skilled nursing facilities with 8,421 beds and 24 assisted living communities with 1,365 units[4] Assets and Cash Position - Cash, cash equivalents, and marketable securities totaled $217,506,000 as of March 31, 2024, down from $223,620,000 at the end of 2023[8] - Total assets increased to $1,319,640,000 as of March 31, 2024, from $1,310,796,000 at the end of 2023[8] Dividends - The company declared dividends of $0.59 per common share for Q1 2024, compared to $0.57 in Q1 2023[8]

Operations Overview - As of March 31, 2024, the company operates 65 skilled nursing facilities with a total of 8,421 licensed beds, 24 assisted living facilities with 1,365 units, and 35 homecare agencies[127]. - The overall occupancy rate in owned and leased skilled nursing facilities for the three months ending March 31, 2024, was 88.5%, an increase from 87.4% for the same period a year ago[131]. - The company has 40 skilled nursing facilities rated 4 and 5 stars, representing 62% of its total facilities, compared to the industry average of 36%[135]. - The average census at owned and leased skilled nursing facilities increased to 88.5% from 87.4% year-over-year[167]. - The average census at skilled nursing facilities increased to 87.4% from 82.7% year-over-year, with a 3.3% increase in composite skilled nursing facility per diem[182]. Financial Performance - For the first three months of 2024, net operating revenues increased by 10.2% to $297,176,000 compared to $269,563,000 for the same period in 2023[165]. - Net patient revenues rose by $27,816,000, or 10.8%, to $285,823,000 compared to $258,007,000 in the prior year[166]. - Total costs and expenses increased by $21,996,000, or 8.5%, to $281,547,000 from $259,551,000[171]. - Salaries, wages, and benefits as a percentage of net operating revenues decreased to 61.6% from 62.3% year-over-year[172]. - GAAP net income attributable to the company was $26,213,000 for Q1 2024, compared to $11,723,000 in Q1 2023[165]. - Non-GAAP net income for Q1 2024 was $15,048,000, up from $12,071,000 in Q1 2023[165]. - The effective income tax rate for the three months ended March 31, 2024, was 26.5%, resulting in an income tax provision of $9,462,000[177]. - For the quarter ended March 31, 2023, GAAP net income attributable to the company was $11,723,000, a decrease from $15,318,000 in the same period in 2022[180]. - Adjusted net income for the quarter was $12,071,000, down from $14,081,000 year-over-year, primarily due to a decrease of $10,620,000 in government stimulus income[180]. Revenue Sources - The average Medicare per diem rate for skilled nursing facilities increased by 4.7% in the first three months of 2024 compared to the same period in 2023[142]. - For the first three months of 2024, the average Medicaid per diem increased by 12.0% compared to the same period in 2023[148]. - The company estimates an annual revenue increase of approximately $15 million from Tennessee's Medicaid facility increases, $9 million from South Carolina, and $5 million from Missouri for fiscal year 2024[144][145][146]. - The fiscal year 2024 Medicare payment rates for skilled nursing facilities include a net increase of 4.0%, equating to approximately $1.4 billion in additional payments compared to 2023 levels[140]. - The composite skilled nursing facility per diem increased by 8.8%, with Medicare per diem rates up 4.7% and Medicaid rates up 12.0%[167]. Cash Flow and Investments - Cash provided by operating activities was $9,646,000, a decrease of 30.4% from $13,857,000 in the same period last year[196]. - Cash used in investing activities totaled $2,415,000, compared to $1,427,000 for the same period in the previous year[199]. - Cash used in financing activities was $12,067,000, a slight decrease from $12,619,000 year-over-year, with dividend payments totaling $9,051,000[200]. - As of March 31, 2024, the fair value of the company's marketable equity securities is approximately $152.7 million[211]. - The investment in NHI comprises approximately $102.5 million, or 67.1%, of the total fair value of the equity securities portfolio[211]. - A hypothetical 10% change in quoted market prices would result in a related increase or decrease in the fair value of equity investments of approximately $15.3 million[211]. - The company's equity securities had net unrealized gains of $98.0 million as of March 31, 2024[211]. - Of the $98.0 million in unrealized gains, $77.7 million is related to the investment in NHI[211]. Risk Management - The company does not currently use any derivative instruments to hedge interest rate exposure[209]. - Credit risk is managed by diversifying the fixed maturity portfolio to avoid concentrations in any single industry group or issuer[210]. - The company has not used derivative instruments for trading purposes, and future use would require approvals from the Investment Committee[209]. - A hypothetical 1% change in interest rates would have minimal impact on future earnings and cash flows related to cash instruments[208]. - The company's cash and cash equivalents consist of highly liquid investments with a maturity of less than three months when purchased[208]. Expansion and Acquisitions - The company is expanding its senior care operations, including new agencies and acquisitions, such as a 66-bed skilled nursing facility acquired in Nashville, TN, in May 2023[137]. Liabilities - The accrued professional liability and workers' compensation reserves totaled $108.237 million as of March 31, 2024[138].

Financial Performance - Net patient revenues for the year ended December 31, 2023, were $956,077,000, an increase from $900,231,000 in 2022[193]. - For the year ended December 31, 2023, net income attributable to National HealthCare Corporation was $66,798,000, a significant increase from $22,445,000 in 2022[198]. - Net patient revenues totaled $1,087,614,000, reflecting a $58,529,000 increase, or 5.7%, compared to the prior year[207]. - Same-facility net operating revenues increased by 11.3% when excluding government stimulus income and operations ceased in September 2022[205]. - The Company reported income before income taxes of $88,738,000 for the year ended December 31, 2023, compared to $27,231,000 in 2022[193]. - GAAP net income attributable to the company for 2022 was $22,445,000, a significant decrease from $138,590,000 in 2021, largely due to a $95.2 million gain from the Caris acquisition in 2021[221]. - Net patient revenues totaled $1,029,085,000 for 2022, reflecting a 6.6% increase compared to the prior year, with supplemental Medicaid payments contributing $19,442,000 in 2022[222]. - Comprehensive income attributable to National HealthCare Corporation for 2023 was $69,726, compared to $11,308 in 2022, reflecting a substantial increase[276]. - Earnings per share (EPS) for 2023 were $4.36 (basic), compared to $1.46 in 2022, representing a growth of 198.6%[273]. - Net income for 2023 was $65,288,000, a significant increase from $19,977,000 in 2022, reflecting a growth of approximately 226%[285]. Revenue Sources - The Company recorded government stimulus income from the Provider Relief Funds of $63,360,000, $11,457,000, and $0 for the years ended December 31, 2021, 2022, and 2023, respectively[180]. - Supplemental Medicaid payments contributed $20,214,000 to net patient revenues in 2023, slightly down from $20,482,000 in 2021[339]. - Medicare accounted for 34% of net patient revenues in 2023, down from 37% in 2022, while Medicaid increased to 30% from 28%[345]. - Other revenues totaled $53,930,000 in 2023, an increase from $45,196,000 in 2022[355]. - Rental income for 2023 was $23,926,000, a slight increase from $23,451,000 in 2022[356]. - Management fees from other healthcare centers amounted to $13,344,000 in 2023, up from $11,828,000 in 2022[361]. Operational Metrics - The overall occupancy rate in owned and leased skilled nursing facilities increased to 87.9% in 2023 from 83.8% in 2022 and 80.6% in 2021[183]. - The Company operates or manages 68 skilled nursing facilities with 8,732 licensed beds, 26 assisted living facilities with 1,501 units, and 35 homecare agencies across 8 states as of December 31, 2023[178]. - The Company has 40 skilled nursing facilities rated 4 or 5 stars, representing 59% of its total facilities, compared to an industry average of 36%[186]. - New operations contributed an increase of $25,821,000 in net patient revenues for the year ended December 31, 2023[209]. - The average census in owned and leased skilled nursing facilities rose to 83.8% in 2022 from 80.6% in 2021, with Medicare and managed care per diem rates increasing by 2.3% and 6.0%, respectively[223]. Costs and Expenses - Total costs and expenses for the year ended December 31, 2023, were $1,084,410,000, compared to $1,053,842,000 in 2022[193]. - Salaries, wages, and benefits increased by $26,175,000, or 3.8%, totaling $712,344,000, while the percentage of net operating revenues decreased to 62.4% from 63.2%[213]. - Total costs and expenses rose by $30,568,000, or 2.9%, to $1,084,410,000 in 2023[212]. - General and administrative costs for the year ended December 31, 2023, were $21,412,000, compared to $20,651,000 in 2022 and $20,160,000 in 2021[304]. Cash Flow and Liquidity - Cash provided by operating activities for the year ended December 31, 2023 was $111,216,000, a substantial increase from $8,742,000 in 2022[237]. - The company expects to meet its short-term liquidity requirements primarily from cash flows from operating activities, with current cash on hand of $107,076,000 and unrestricted marketable securities of $116,544,000[241]. - Total cash, cash equivalents, restricted cash, and restricted cash equivalents at the end of 2023 amounted to $125,968,000, up from $74,865,000 in 2022, representing a 68% increase[285]. - The company’s total cash and cash equivalents increased by $51,103,000 in 2023, compared to a decrease of $44,878,000 in 2022[285]. Investments and Marketable Securities - The fair value of the company's marketable equity securities is approximately $137,896,000, with an investment in NHI comprising about $91,071,000, or 66.0%, of the total[262]. - The company has net unrealized gains of $83,586,000 in its equity securities, with approximately $66,337,000 related to the investment in NHI[262]. - The company recorded unrealized gains of $14,944,000 from marketable equity securities for the year ended December 31, 2023[218]. - The company reported unrealized losses on marketable equity securities of $14,944,000 in 2023, contrasting with unrealized gains of $15,806,000 in 2022[285]. Liabilities and Reserves - The accrued professional liability and workers' compensation reserves totaled $103,259,000 as of December 31, 2023, compared to $102,469,000 in 2022[189]. - As of December 31, 2023, the accrued risk reserves totaled $103,259,000, which includes professional liability claims reserves for unpaid reported claims and estimates for incurred but unreported claims[270]. - Total liabilities for 2023 were $400,316, slightly up from $397,936 in 2022, indicating a marginal increase of 0.4%[281]. Accounting and Compliance - The company recognizes revenue as performance obligations are completed, with net patient revenues derived from various healthcare services[249]. - Medicare and Medicaid program revenues are subject to audit and retroactive adjustment, impacting the estimated transaction price for providing patient care[252]. - The company has not adopted any new accounting standards during 2023[247].

Operations and Facilities - As of September 30, 2023, the company operates or manages 68 skilled nursing facilities with a total of 8,732 licensed beds, 26 assisted living facilities with 1,501 units, and 35 homecare agencies[135]. - The overall census in owned and leased skilled nursing facilities for the three months ending September 30, 2023, was 88.1%, up from 83.7% for the same period a year ago[143]. - The company has 39 skilled nursing facilities rated 4 and 5 stars, representing 57% of its total skilled nursing facilities, compared to 36% in the industry[147]. - The company has undertaken various development activities, including the acquisition of a 66-bed skilled nursing facility in Nashville, TN, in May 2023[149]. Financial Performance - The company reported a total net operating revenue of $288.485 million for the three months ended September 30, 2023, compared to $270.843 million for the same period in 2022, reflecting a year-over-year increase of approximately 6.5%[169]. - For the three months ended September 30, 2023, net operating revenues increased by 6.5% compared to the same period in 2022, primarily driven by occupancy increases in skilled nursing facilities and higher per diem rates from government payors[178]. - For the nine months ended September 30, 2023, net patient revenues reached $804.617 million, up from $776.661 million in the same period of 2022, indicating a growth of approximately 3.7%[170]. - The company’s non-GAAP net income for the three months ended September 30, 2023, was $13.250 million, compared to $7.783 million for the same period in 2022, representing an increase of approximately 70.3%[174]. - GAAP net income attributable to NHC for the quarter was $10,388,000, a significant improvement from a net loss of $2,429,000 in the same quarter of 2022[179]. - GAAP net income attributable to NHC for the nine months was $38,392,000, compared to $16,092,000 for the same period in 2022[193]. Revenue Sources - Inpatient services generated net patient revenues of $243.865 million, while homecare and hospice services contributed $33.140 million for the three months ended September 30, 2023, totaling $277.005 million in net patient revenues[169]. - The company recorded $0 of government stimulus income from the Provider Relief Funds for the three months ended September 30, 2023, compared to $10,940,000 for the same period in 2022[141]. - The company has recorded $4,232,000 in net patient revenues for supplemental Medicaid payments for the three months ended September 30, 2023, compared to $4,773,000 for the same period in 2022[142]. Costs and Expenses - Total costs and expenses for the three months ended September 30, 2023, were $275.460 million, resulting in an income from operations of $13.025 million[169]. - Total costs and expenses for the nine months ended September 30, 2023, increased by $5,277,000, or 0.7%, to $803,616,000[198]. - Salaries, wages, and benefits increased by $9,466,000, or 5.5%, to $182,664,000, but as a percentage of net operating revenues, it decreased to 63.3% from 63.9%[186]. Cash Flow and Liquidity - Cash provided by operating activities for the nine months ended September 30, 2023, was $85,483,000, a significant increase from cash used in operating activities of $3,192,000 in the same period last year, representing a change of 2,778.0%[207]. - Cash used in investing activities totaled $7,382,000 for the nine months ended September 30, 2023, compared to $8,810,000 for the same period in 2022, reflecting a decrease of 16.2%[209]. - Cash used in financing activities was $32,711,000 for the nine months ended September 30, 2023, down from $35,541,000 in the same period last year, a reduction of 8.0%[210]. - Cash, cash equivalents, restricted cash, and restricted cash equivalents at the end of the period increased to $120,255,000, up 66.6% from $72,200,000 at the end of the same period last year[206]. - The company expects to meet its short-term liquidity requirements primarily from cash flows from operating activities, with current cash on hand of $100,308,000 and marketable securities of $110,186,000[211]. Regulatory and Payment Updates - The fiscal year 2024 rule equates to a net increase of 4.0%, or approximately $1.4 billion, in Medicare Part A payments to skilled nursing facilities compared to 2023 levels[153]. - Effective July 1, 2023, the state of Tennessee implemented specific individual nursing facility increases, estimated to result in approximately $15,000,000 annually, or $3,750,000 per quarter[156]. - The average Medicaid per diem increased by 7.9% for the first nine months of 2023 compared to the same period in 2022[160]. - The company anticipates a decrease in Medicare payments to home health agencies by 2.2% or $375 million for fiscal year 2024, relative to the prior year[163]. - The hospice payment update for fiscal year 2024 includes a rate increase of 3.1%, or $780 million, effective October 1, 2023[165]. - The statutory aggregate cap amount for hospice payments for FY2024 is set at $33,494, up from $32,487 in FY2023[165]. Investments and Marketable Securities - The fair value of marketable equity securities was approximately $125,820,000 as of September 30, 2023, with an investment in NHI comprising about $83,700,000, or 66.5% of the total fair value[220]. - At September 30, 2023, the company had available-for-sale marketable debt securities amounting to $126,911,000, allowing flexibility in responding to interest rate fluctuations[216]. - The company reported net unrealized gains of $71,600,000 in its equity securities, with $59,000,000 related to its investment in NHI[220]. - The company does not currently use derivative instruments to hedge interest rate exposure, and any future use would require approval from the Investment Committee of the Board of Directors[218].

Operations Overview - As of June 30, 2023, the company operates 68 skilled nursing facilities with a total of 8,732 licensed beds, 23 assisted living facilities with 1,181 units, and 35 homecare agencies[133]. - The overall occupancy rate in owned and leased skilled nursing facilities for the three months ending June 30, 2023, was 87.9%, up from 84.0% in the same period a year ago[141]. - The company has expanded its operations with new agencies and facilities, including a 135-unit assisted living facility in Vero Beach, FL, placed in service in July 2023[147]. - The company has 39 skilled nursing facilities rated 4 and 5 stars, representing 57% of its total skilled nursing facilities, compared to 37% in the industry[145]. Financial Performance - Total net operating revenues and grant income for the three months ended June 30, 2023, amounted to $282.58 million, up from $271.36 million in the same period of 2022, representing an increase of approximately 4.1%[166]. - Income from operations for the three months ended June 30, 2023, was $13.98 million, compared to $4.55 million in the same period of 2022, reflecting a significant increase of approximately 207%[166]. - For the six months ended June 30, 2023, net patient revenues reached $527.61 million, up from $516.41 million in the same period of 2022, marking an increase of about 2.2%[168]. - Non-GAAP net income for the three months ended June 30, 2023, was $13.66 million, compared to $7.17 million in the same period of 2022, indicating a growth of approximately 91%[172]. - The company reported GAAP diluted earnings per share of $1.06 for the three months ended June 30, 2023, compared to $0.21 in the same period of 2022, representing an increase of about 404%[172]. - GAAP net income attributable to NHC for the quarter was $16,281,000, a significant increase from $3,203,000 in the same quarter of 2022[177]. - For the six months ended June 30, 2023, GAAP net income attributable to NHC was $28,004,000, compared to $18,521,000 for the same period in 2022[191]. Revenue Sources - Supplemental Medicaid payments contributed $6,247,000 in net patient revenues for the three months ended June 30, 2023, compared to $5,001,000 for the same period in 2022[140]. - Inpatient services generated net patient revenues of $236.76 million for the three months ended June 30, 2023, an increase from $227.80 million in the same period of 2022, reflecting a growth of approximately 0.4%[166]. - Homecare and hospice services reported net patient revenues of $32.85 million for the three months ended June 30, 2023, compared to $32.28 million in the same period of 2022, indicating a growth of about 1.6%[166]. - Net patient revenues increased by $9,528,000, or 3.7%, compared to the same period last year[178]. - New operations contributed an increase of $5,890,000 in net patient revenues for the quarter, while the transfer of operations from seven facilities resulted in a decrease of $17,684,000[180]. Cost Management - The company's total costs and expenses for the three months ended June 30, 2023, were $268.61 million, compared to $266.81 million in the same period of 2022, showing a slight increase of about 0.7%[166]. - Total costs and expenses for the quarter increased by $1,797,000, or 0.7%, to $268,605,000[183]. - Salaries, wages, and benefits as a percentage of net operating revenues decreased to 62.0% from 64.5% year-over-year, despite a slight increase in total salaries[184]. - Total costs and expenses for the six months decreased by $3,418,000, or 0.6%, to $528,156,000[197]. Cash Flow and Liquidity - Cash provided by operating activities for the six months ended June 30, 2023, was $53,178,000, a significant increase from cash used in operating activities of $1,215,000 in the same period last year, representing a change of $54,393,000 or 4,476.8%[207]. - Cash used in investing activities totaled $2,247,000 for the six months ended June 30, 2023, compared to $8,163,000 for the same period in 2022, indicating a decrease of $5,916,000 or 72.5%[209]. - Cash used in financing activities was $22,891,000 for the six months ended June 30, 2023, compared to $18,797,000 in the same period last year, reflecting an increase of $4,094,000 or 21.8%[210]. - At June 30, 2023, the company had cash on hand of $78,492,000 and marketable equity and debt securities valued at $114,952,000, with a borrowing capacity of $50 million available on its credit facility[211]. - Cash flows from operating activities are expected to meet both short-term and long-term liquidity requirements, alongside current cash and marketable securities[211][212]. Market and Regulatory Environment - The statutory aggregate cap amount for Medicare hospice payments for FY2024 is set at $33,494, an increase from $32,487 in FY2023[163]. - CMS projects a decrease of 2.2% or $375 million in payments to home health agencies for FY2024, reflecting a 3.0% market basket update reduced by a 0.3% productivity adjustment[161]. Investments and Valuation - The fair value of marketable equity securities was approximately $128,939,000 as of June 30, 2023, with an investment in NHI comprising about $85.5 million or 66.3% of the total fair value[220]. - The company reported net unrealized gains of $74.7 million in its equity securities, with $60.7 million related to the investment in NHI[220]. - A hypothetical 10% change in quoted market prices would result in an increase or decrease in the fair value of equity investments of approximately $12.9 million[220]. - The company does not currently use derivative instruments to hedge interest rate exposure, and any future use would require approval from the Investment Committee of the Board of Directors[218].

Operations and Facilities - As of March 31, 2023, the company operates 68 skilled nursing facilities with a total of 8,732 licensed beds, 23 assisted living facilities with 1,181 units, and 34 homecare agencies[127]. - The company operates in 8 states, primarily in the southeastern United States, and is focused on expanding its senior care operations[127]. - The company has 40 skilled nursing facilities rated 4 and 5 stars, representing 59% of its total skilled nursing facilities, compared to 37% in the industry[137]. Financial Performance - For the three months ended March 31, 2023, net operating revenues and grant income decreased by 3.4% to $269,563,000 compared to $278,983,000 for the same period in 2022, primarily due to a reduction in government stimulus income of $10,620,000[164]. - GAAP net income attributable to the company for Q1 2023 was $11,723,000, down from $15,318,000 in Q1 2022, while adjusted net income decreased to $12,071,000 from $14,081,000[165]. - Net patient revenues increased by $1,670,000, or 0.7%, compared to the same period last year, with an average census at skilled nursing facilities rising to 87.4% from 82.7%[166][167]. - Total costs and expenses decreased by $5,215,000, or 2.0%, to $259,551,000 in Q1 2023 from $264,766,000 in Q1 2022[172]. - Non-operating income increased by $1,124,000 compared to the same period last year[176]. - The income tax provision for Q1 2023 was $4,436,000, reflecting an effective income tax rate of 28.2%[177]. Revenue Sources - The company recorded $0 and $10,620,000 of government stimulus income from the Provider Relief Funds for the three months ended March 31, 2023, and 2022, respectively[131]. - The average Medicare per diem rate for skilled nursing facilities increased by 2.1% in the first three months of 2023 compared to the same period in 2022[144]. - The company estimates an increase in revenue of approximately $3,200,000 annually from specific individual nursing facility increases in Tennessee for fiscal year 2023[145]. - The proposed rule for fiscal year 2024 indicates a net increase of 3.7%, or approximately $1.2 billion, in Medicare Part A payments to skilled nursing facilities compared to 2023 levels[143]. - The company has recorded $4,883,000 in net patient revenues for supplemental Medicaid payments for the three months ended March 31, 2023[132]. Staffing and Labor - The company faced workforce and labor shortages, leading to increased wage pressure and a 34% decrease in agency nurse staffing expenses compared to the previous year[173]. - Salaries, wages, and benefits decreased by $2,870,000, or 1.7%, to $167,824,000, with salaries as a percentage of net operating revenues increasing to 62.3% from 61.2%[173]. - Salaries, wages, and benefits rose by $21,535,000, or 14.4%, totaling $170,694,000, with agency nurse staffing expenses increasing by $12,435,000[186]. Marketable Securities and Investments - At March 31, 2023, the fair value of marketable equity securities was approximately $124,210,000, with net unrealized gains of $70.0 million[206]. - The investment in NHI comprises approximately $84.1 million, or 67.7% of the total fair value of the equity securities portfolio[206]. - A hypothetical 10% change in quoted market prices would result in a related increase or decrease in the fair value of equity investments of approximately $12.4 million[206]. - The company's equity securities had net unrealized gains of $70.0 million as of March 31, 2023[206]. - Of the $70.0 million in unrealized gains, $59.4 million is related to the investment in NHI[206]. Cash Flow and Liquidity - Cash provided by operating activities was $13,857,000, a significant improvement from cash used in operating activities of $27,457,000 in the same period last year[193]. - The company expects to meet its short-term liquidity requirements primarily from cash flows from operating activities, with current cash on hand of $46,144,000[197]. Changes in Patient Revenue - The transfer of operations for seven skilled nursing facilities resulted in a decrease of $16,603,000 in net patient revenues for Q1 2023 compared to the same quarter last year[168]. - Net patient revenues increased by $39,482,000, or 18.2%, compared to the same period last year[181]. - The average census at owned and leased skilled nursing facilities was 82.7%, up from 76.8% in the same quarter a year ago[182].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to _____________ Commission File No. 001-13489 (Exact name of registrant as specified in its Corporate Charter) Delaware 52-205747 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-13489 (Exact name of registrant as specified in its Charter) Delaware 52-2057472 (State or other jurisdiction of (I.R ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-13489 (Exact name of registrant as specified in its Charter) Delaware 52-2057472 (State or other jurisdiction of (I.R.S. E ...