View Filing Data

$ (1.39)

Weighted average common shares outstanding

$ (1.39)

Basic (in shares)

48,319,193

Diluted (in shares)

48,319,193

Contingent acquisition compensation expense

$ 1,900

Professional and medical fees

Revenues

$ 748,615

$ 1,145,438

$ 959,891

Operating expenses:

Salaries and benefits

241,149

357,175

261,685

Supplies

193,322

269,239

242,083

57,931

81,185

66,583

Lease expense

36,503

52,147

44,848

Other operating expenses

43,267

61,450

54,127

Cost of revenues

572,172

821,196

669,326

General and administrative expenses

^[1]

46,797

60,246

55,992

Depreciation and amortization

30,124

39,551

34,545

Provision for doubtful accounts

16,297

24,212

23,578

Income from equity investments

(3,148)

(4,764)

(3,777)

Loss (gain) on disposal or impairment of long-lived assets, net

1,715

2,355

(2,097)

Merger transaction and integration costs

5,584

8,738

17,920

Loss on debt refinancing

18,211

11,876

16,102

Gain on litigation settlements

(3,794)

(14,101)

Gain on acquisition escrow release

(1,000)

Termination of management agreement and IPO costs

5,834

Electronic health records incentive expense (income)

(305)

(408)

(1,761)

Other (income) expense

(2)

(525)

Total operating expenses

682,651

948,956

815,137

Operating income

65,964

196,482

144,754

Gain on amendment to tax receivable agreement

15,294

Tax receivable agreement benefit (expense)

(3,733)

(119,911)

Interest expense, net

(68,929)

(100,571)

(100,980)

Income (loss) before income taxes

12,329

92,178

(76,137)

Income tax expense (benefit)

(18,089)

7,095

(148,982)

Net (loss) income

30,418

85,083

72,845

Less: Net income attributable to non-controlling interests

(42,087)

(75,630)

(71,416)

Net (loss) income attributable to Surgery Partners, Inc.

(11,669)

9,453

1,429

Less: Amounts attributable to participating securities

^[2]

Net (loss) income attributable to common stockholders

$ (11,669)

$ 9,453

$ 1,429

Net (loss) income per share attributable to common stockholders

$ (0.24)

$ 0.20

$ 0.04

Weighted average common shares outstanding

$ (0.24)

$ 0.20

$ 0.04

Basic (in shares)

48,121,404

48,018,944

36,066,233

Diluted (in shares)

48,121,404

48,190,738

^[3]

37,464,387

^[3]

Contingent acquisition compensation expense

$ 5,100

[1]	Includes contingent acquisition compensation expense of $1.9 million for the four months ended December 31, 2017 (Successor), and $5.1 million for both the eight months ended August 31, 2017 (Predecessor), and the year ended December 31, 2016 (Predecessor).
[2]	Includes accrued dividends and undistributed earnings allocated to participating securities and the mark to redemption adjustment for the Series A Preferred Stock. There were no participating securities during the Predecessor periods. See Note 10. "Earnings Per Share" for further discussion.
[3]	The impact of potentially dilutive securities for four months ended December 31, 2017 and the eight months ended August 31, 2017 were not considered because the effect would be anti-dilutive in those periods.

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	4 Months Ended	8 Months Ended	12 Months Ended
	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Net (loss) income	$ (1,682)
Other comprehensive income	0
Comprehensive (loss) income	(1,682)
Less: Comprehensive income attributable to non-controlling interests	(39,634)
Comprehensive (loss) income attributable to Surgery Partners, Inc.	$ (41,316)
Predecessor
Net (loss) income		$ 30,418	$ 85,083	$ 72,845
Other comprehensive income		0	0	0
Comprehensive (loss) income		30,418	85,083	72,845
Less: Comprehensive income attributable to non-controlling interests		(42,087)	(75,630)	(71,416)
Comprehensive (loss) income attributable to Surgery Partners, Inc.		$ (11,669)	$ 9,453	$ 1,429

Consolidated Statements of Stockholders' Equity (Deficit) - USD ($)
$ in Thousands

Total

Common Stock

Additional Paid-in Capital

Retained Deficit

Non-Controlling Interests— Non-Redeemable

Beginning Balance, stockholders' equity (in shares) (Predecessor) at Dec. 31, 2014

^[1]

1,000

Beginning Balance, stockholders' equity (Predecessor) at Dec. 31, 2014

$ 29,536

$ 0

^[1]

$ 58,151

$ (322,233)

$ 293,618

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net (loss) income | Predecessor

55,229

1,429

53,800

Equity-based compensation | Predecessor

7,502

Acquisition and disposal of shares of non-controlling interests, net | Predecessor

3,486

(835)

4,321

Distributions to non-controlling interests—non-redeemable holders | Predecessor

(49,784)

Initial public offering (in shares) | Predecessor

^[1]

14,285,000

Initial public offering | Predecessor

250,979

$ 143

^[1]

250,836

Effect of Reorganization (in shares) | Predecessor

^[1],[2]

33,870,990

Effect of Reorganization | Predecessor

^[2]

339

$ 339

^[1]

Other | Predecessor

640

Ending Balance, stockholders' equity (in shares) (Predecessor) at Dec. 31, 2015

^[1]

48,156,990

Ending Balance, stockholders' equity (Predecessor) at Dec. 31, 2015

297,927

$ 482

^[1]

316,294

(320,804)

301,955

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net (loss) income | Predecessor

67,060

9,453

57,607

Issuance of restricted and unrestricted shares (in shares) | Predecessor

^[1]

331,626

Issuance of restricted and unrestricted shares | Predecessor

$ 3

^[1]

(3)

Equity-based compensation | Predecessor

2,021

Acquisition and disposal of shares of non-controlling interests, net | Predecessor

6,284

2,231

4,053

Distributions to non-controlling interests—non-redeemable holders | Predecessor

$ (48,618)

(48,618)

Ending Balance, stockholders' equity (in shares) (Predecessor) at Dec. 31, 2016

48,488,616

^[1]

Ending Balance, stockholders' equity (Predecessor) at Dec. 31, 2016

$ 324,674

$ 485

^[1]

320,543

(311,351)

314,997

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net (loss) income | Predecessor

20,803

(11,669)

32,472

Issuance of restricted and unrestricted shares (in shares) | Predecessor

^[1]

355,607

Issuance of restricted and unrestricted shares | Predecessor

$ 3

^[1]

(3)

Equity-based compensation | Predecessor

3,697

Cancellation of restricted shares (in shares) | Predecessor

^[1]

(33,908)

Cancellation of restricted shares | Predecessor

(790)

Acquisition of NSH | Predecessor

172,645

Acquisition and disposal of shares of non-controlling interests, net | Predecessor

(2,146)

3,483

(5,629)

Distributions to non-controlling interests—non-redeemable holders | Predecessor

(38,875)

Ending Balance, stockholders' equity (in shares) (Predecessor) at Aug. 31, 2017

^[1]

48,810,315

Ending Balance, stockholders' equity (in shares) at Aug. 31, 2017

^[1]

48,810,315

Ending Balance, stockholders' equity (Predecessor) at Aug. 31, 2017

480,008

$ 488

^[1]

326,930

(323,020)

475,610

Ending Balance, stockholders' equity at Aug. 31, 2017

1,405,086

$ 488

^[1]

720,118

684,480

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net (loss) income

(14,613)

(41,316)

26,703

Issuance of restricted and unrestricted shares (in shares)

^[1]

112,107

Issuance of restricted and unrestricted shares

$ 1

^[1]

(1)

Equity-based compensation

1,887

Cancellation of restricted shares (in shares)

^[1]

(54,622)

Cancellation of restricted shares

(585)

Preferred dividends

(10,481)

Mark to redemption adjustment

(15,566)

Reallocation in application of pushdown accounting

(21,248)

Acquisition and disposal of shares of non-controlling interests, net

19,401

2,195

17,206

Distributions to non-controlling interests—non-redeemable holders

(25,262)

Repurchase of shares (in shares)

^[1]

(180,664)

Repurchase of shares

$ (2,009)

$ (2)

^[1]

(2,007)

Ending Balance, stockholders' equity (in shares) at Dec. 31, 2017

48,687,136

^[1]

Ending Balance, stockholders' equity at Dec. 31, 2017

$ 1,336,610

$ 487

^[1]

$ 695,560

$ (41,316)

$ 681,879

[1]	As described in Note 1 herein, the common stock of the Company is that of Surgery Partners, Inc. as of December 31, 2017, 2016 and 2015 and that of Surgery Center Holdings, Inc. as of December 31, 2014.
[2]	As a result of the Reorganization that occurred on September 30, 2015 (as further described in Note 1), Surgery Center Holdings, Inc, became an indirect wholly owned subsidiary of Surgery Partners, Inc. and the common stock of Surgery Center Holdings, Inc. is eliminated in consolidation.

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	4 Months Ended	8 Months Ended	12 Months Ended
	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net (loss) income	$ (1,682)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	21,804
Amortization of debt issuance costs, discounts and premium	(559)
Amortization of unfavorable lease liability	(221)
Equity-based compensation	1,887
Loss (gain) on disposal or impairment of long-lived assets, net	5
Gain on legal settlements	(8,740)
Loss on debt refinancing	0
Gain on amendment to tax receivable agreement	(1,098)
Tax receivable agreement (benefit) expense	(25,329)
Deferred income taxes	71,031
Interest on contingent consideration obligation	0
Provision for doubtful accounts	12,455
Income from equity investments, net of distributions received	678
Changes in operating assets and liabilities, net of acquisitions and divestitures:
Accounts receivable	(31,500)
Other operating assets and liabilities	14,494
Net cash provided by operating activities	53,225
Cash flows from investing activities:
Purchases of property and equipment, net	(10,827)
Payments for acquisitions, net of cash acquired	(29,249)
Proceeds from divestitures	1,183
Net cash used in investing activities	(38,893)
Cash flows from financing activities:
Proceeds from initial public offering, net of offering costs	0
Principal payments on long-term debt	(18,629)
Borrowings of long-term debt	409
Payments of debt issuance costs	(4)
Penalty on prepayment of debt	0
Payment of premium of debt extinguishment	0
Proceeds from preferred stock issuance	0
Payments of stock issuance costs	0
Payments of preferred dividends	(1,316)
Distributions to non-controlling interest holders	(33,490)
Proceeds from (payments related to) ownership transactions with non-controlling interest holders	998
Repurchase of shares	(2,009)
Financing lease obligations	1,007
Other financing activities	(590)
Net cash (used in) provided by financing activities	(53,624)
Net (decrease) increase in cash and cash equivalents	(39,292)
Cash and cash equivalents at beginning of period	214,206
Cash and cash equivalents at end of period	174,914	$ 214,206
Supplemental cash flow information:
Interest paid, net of interest income received	40,872
Cash paid for income taxes	485
Non-cash purchases of property and equipment under capital leases and financing activities	14,872
Predecessor
Cash flows from operating activities:
Net (loss) income		30,418	$ 85,083	$ 72,845
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		30,124	39,551	34,545
Amortization of debt issuance costs, discounts and premium		5,091	7,199	6,263
Amortization of unfavorable lease liability		(217)	(431)	(431)
Equity-based compensation		3,697	2,021	7,502
Loss (gain) on disposal or impairment of long-lived assets, net		1,715	2,355	(2,097)
Gain on legal settlements		0	(14,101)	0
Loss on debt refinancing		18,211	11,876	16,102
Gain on amendment to tax receivable agreement		(15,294)	0	0
Tax receivable agreement (benefit) expense		0	3,733	119,911
Deferred income taxes		(18,703)	6,882	(149,891)
Interest on contingent consideration obligation		0	1,124	1,041
Provision for doubtful accounts		16,297	24,212	23,578
Income from equity investments, net of distributions received		489	(846)	(543)
Changes in operating assets and liabilities, net of acquisitions and divestitures:
Accounts receivable		8,837	(60,622)	(48,783)
Other operating assets and liabilities		(12,947)	17,203	4,439
Net cash provided by operating activities		67,718	125,239	84,481
Cash flows from investing activities:
Purchases of property and equipment, net		(18,773)	(39,109)	(33,439)
Payments for acquisitions, net of cash acquired		(725,853)	(146,405)	(112,596)
Proceeds from divestitures		70	765	11,193
Net cash used in investing activities		(744,556)	(184,749)	(134,842)
Cash flows from financing activities:
Proceeds from initial public offering, net of offering costs		0	0	250,979
Principal payments on long-term debt		(1,164,237)	(473,437)	(328,329)
Borrowings of long-term debt		1,805,966	650,707	196,366
Payments of debt issuance costs		(58,591)	(14,296)	0
Penalty on prepayment of debt		0	(4,900)	0
Payment of premium of debt extinguishment		0	0	(7,305)
Proceeds from preferred stock issuance		310,000	0	0
Payments of stock issuance costs		(18,347)	0	0
Payments of preferred dividends		0	0	0
Distributions to non-controlling interest holders		(50,343)	(65,778)	(69,720)
Proceeds from (payments related to) ownership transactions with non-controlling interest holders		(1,518)	(20,096)	(12,175)
Repurchase of shares		0	0	0
Financing lease obligations		(796)	(924)	3,558
Other financing activities		(789)	0
Net cash (used in) provided by financing activities		821,345	71,276	33,374
Net (decrease) increase in cash and cash equivalents		144,507	11,766	(16,987)
Cash and cash equivalents at beginning of period	$ 214,206	69,699	57,933	74,920
Cash and cash equivalents at end of period		214,206	69,699	57,933
Supplemental cash flow information:
Interest paid, net of interest income received		68,646	79,262	96,799
Cash paid for income taxes		598	661	1,093
Non-cash purchases of property and equipment under capital leases and financing activities		$ 8,469	$ 9,226	$ 5,443

Organization	12 Months Ended
Organization	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization Surgery Partners, Inc., a Delaware corporation (together with its subsidiaries, the “Company”), was formed April 2, 2015, as a holding company for the purpose of facilitating an initial public offering (the “IPO”) of shares of common stock. Prior to September 30, 2015, the Company conducted business through Surgery Center Holdings, Inc. and its subsidiaries. Surgery Center Holdings, LLC was and is the sole indirect owner of the equity interests of Surgery Center Holdings, Inc. and had no other material assets. On September 30, 2015, Surgery Partners, Inc. became the direct parent and sole member of Surgery Center Holdings, LLC (the "Reorganization"). In the Reorganization, all of the equity interests held by the pre-IPO Owners of Surgery Center Holdings, LLC were contributed to Surgery Partners, Inc. in exchange for 33,871,990 shares of common stock of Surgery Partners, Inc. and certain rights to additional payments under a tax receivable agreement. After giving effect to the Reorganization, Surgery Partners, Inc. is a holding company, and its sole material asset is an equity interest in Surgery Center Holdings, LLC. The Company's consolidated financial statements for periods prior to the Reorganization represent the historical operating results and financial position of Surgery Center Holdings, Inc. and certain of its subsidiaries. On October 1, 2015, the Company completed its IPO of 14,285,000 shares of common stock at an offering price of $19.00 per share. On October 6, 2015, the Company received net proceeds from the sale of common stock in this offering of $255.8 million, after deducting underwriting discounts and other fees of $15.6 million. These net proceeds were used to repay a portion of the borrowings outstanding under the 2014 Second Lien and to pay fees associated with this offering. The Company also incurred an additional $4.8 million in costs directly related to the IPO. On August 31, 2017, the Company completed its acquisition of NSH Holdco, Inc. (“NSH”). Pursuant to the terms of the Agreement and Plan of Merger, dated as of May 9, 2017, by and among the Company, SP Merger Sub, Inc., a wholly owned subsidiary of the Company, NSH, and IPC / NSH, L.P. (solely in its capacity as sellers’ representative), as amended by that certain Letter Amendment, dated as of July 7, 2017 (as amended, the “NSH Merger Agreement”), SP Merger Sub, Inc. merged with and into NSH with NSH continuing as the surviving corporation and a wholly owned subsidiary of Surgery Center Holdings, Inc. (the “NSH Merger”). Also on August 31, 2017, (i) the Company completed the sale and issuance of 310,000 shares of the Company's preferred stock, par value $0.01 per share, designated as 10.00% Series A Convertible Perpetual Participating Preferred Stock (the “Series A Preferred Stock”) to BCPE Seminole Holdings LP (“Bain”), a fund advised by an affiliate of Bain Capital Private Equity, at a purchase price of $1,000 per share in cash (the “Preferred Private Placement”) pursuant to the Securities Purchase Agreement, dated as of May 9, 2017, by and between the Company and Bain (the “Preferred Stock Purchase Agreement”), and (ii) Bain completed its purchase of 26,455,651 shares (the “Purchased Shares”) of the Company's common stock, par value $0.01 per share (the “Common Stock”) from H.I.G. Surgery Centers, LLC (“H.I.G.”) at a purchase price of $19.00 per share in cash (the “Private Sale”) pursuant to the Stock Purchase Agreement, dated as of May 9, 2017, by and among the Company, Bain, H.I.G. and H.I.G. Bayside Debt & LBO Fund II L.P. (for the purposes stated therein) (the “Common Stock Purchase Agreement” and together with the NSH Merger Agreement, the Preferred Stock Purchase Agreement and the other agreements and documents executed in connection therewith, including the TRA (as defined in Note 2. “Significant Accounting Policies - Income Taxes and Tax Receivable Agreement”), the “Transaction Agreements”). As of August 31, 2017, the Purchased Shares represented approximately 54.2% of the Company’s outstanding Common Stock. As a result of the Preferred Private Placement and the Private Sale, Bain became the controlling stockholder of the Company, holding Series A Preferred Stock and Common Stock that collectively represent approximately 65.7% of the voting power of all classes of capital stock of the Company as of August 31, 2017, and H.I.G. and its affiliated investment funds no longer own any capital stock of the Company. In connection with the change of control effected by the Preferred Private Placement and the Private Sale, the Company elected to apply “pushdown” accounting by applying the guidance in Accounting Standards Codification Topic ("ASC") 805, Business Combinations, including the recognition of the Company’s assets and liabilities at fair value as of August 31, 2017, and similarly recognizing goodwill calculated based on the terms of the transaction and the fair value of the new basis of net assets of the Company. Accordingly, the consolidated financial statements of the Company for periods before and after August 31, 2017 reflect different bases of accounting, and the financial positions and results of operations of those periods are not comparable. Throughout the Company's consolidated financial statements and the accompanying notes herein, periods prior to the change of control are identified as "Predecessor" and periods after the change of control are identified as "Successor." As of December 31, 2017 (Successor), the Company owned and operated a national network of surgical facilities and ancillary services in 32 states. The surgical facilities, which include ambulatory surgery centers ("ASCs") and surgical hospitals, primarily provide non-emergency surgical procedures across many specialties, including, among others, gastroenterology ("GI"), general surgery, ophthalmology, orthopedics and pain management. The Company's surgical hospitals provide services such as diagnostic imaging, laboratory, obstetrics, oncology, pharmacy, physical therapy and wound care. Ancillary services are comprised of a diagnostic laboratory, multi-specialty physician practices, urgent care facilities, anesthesia services and optical services. As of December 31, 2017 (Successor), the Company owned or operated a portfolio of 124 surgical facilities, comprised of 106 ASCs and 18 surgical hospitals. The Company owns these facilities in partnership with physicians and, in some cases, healthcare systems in the markets and communities it serves. The Company owned a majority interest in 84 of the surgical facilities and consolidated 108 of these facilities for financial reporting purposes.

Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, as well as interests in partnerships and limited liability companies controlled by the Company through its ownership of a majority voting interest or other rights granted to the Company by contract to manage and control the affiliate's business. All significant intercompany balances and transactions are eliminated in consolidation.

Non-Controlling Interests

The physician limited partners and physician minority members of the entities that the Company controls are responsible for the supervision and delivery of medical services. The governance rights of limited partners and minority members are restricted to those that protect their financial interests. Under certain partnership and operating agreements governing these partnerships and limited liability companies, the Company could be removed as the sole general partner or managing member for certain events such as material breach of the partnership or operating agreement, gross negligence or bankruptcy. These protective rights do not preclude consolidation of the respective partnerships and limited liability companies.

Ownership interests in consolidated subsidiaries held by parties other than the Company are identified and generally presented in the consolidated financial statements within the equity section but separate from the Company's equity. However, in instances in which certain redemption features that are not solely within the control of the Company are present, classification of non-controlling interests outside of permanent equity is required. Consolidated net income attributable to the Company and to the non-controlling interests are identified and presented on the consolidated statements of operations; changes in ownership interests in which the Company retains a controlling interest are accounted for as equity transactions assuming the Company continues to consolidate related entities. Certain transactions with non-controlling interests are classified within financing activities in the consolidated statements of cash flows.

The consolidated financial statements of the Company include all assets, liabilities, revenues and expenses of surgical facilities in which the Company has sufficient ownership and rights to allow the Company to consolidate the surgical facilities. Similar to its investments in non-consolidated affiliates, the Company regularly engages in the purchase and sale of ownership interests with respect to its consolidated subsidiaries that do not result in a change of control.

Non-Controlling Interests — Redeemable. Each partnership and limited liability company through which the Company owns and operates its surgical facilities is governed by a partnership or operating agreement, respectively. In certain circumstances, the applicable partnership or operating agreements for the Company's surgical facilities provide that the facilities will purchase all of the physician limited partners’ or physician minority members', as applicable, ownership if certain adverse regulatory events occur, such as it becoming illegal for the physician(s) to own an interest in a surgical facility, refer patients to a surgical facility or receive cash distributions from a surgical facility. The non-controlling interests — redeemable are reported outside of stockholders' equity in the consolidated balance sheets.

A summary of activity related to the non-controlling interests—redeemable follows (in thousands):



Predecessor
Balance at December 31, 2015	$	183,439
Net income attributable to non-controlling interests—redeemable	18,023
Acquisition and disposal of shares of non-controlling interests, net—redeemable	(3,781		)
Distributions to non-controlling interest —redeemable holders	(17,160		)
Balance at December 31, 2016	180,521
Net income attributable to non-controlling interests—redeemable	9,615
Acquisition and disposal of shares of non-controlling interests, net—redeemable	(3,323		)
Distributions to non-controlling interest —redeemable holders	(11,468		)
Acquisition of NSH	153,320
Balance at August 31, 2017	$	328,665



Successor
Balance at September 1, 2017	$	271,001
Net income attributable to non-controlling interests—redeemable	12,931
Acquisition and disposal of shares of non-controlling interests, net—redeemable	819
Distributions to non-controlling interest —redeemable holders	(8,228		)
Reallocation in application of pushdown accounting	21,248
Purchase price adjustments	1,545
Balance at December 31, 2017	$	299,316

Variable Interest Entities

The consolidated financial statements include the accounts of variable interest entities ("VIE") in which the Company is the primary beneficiary under the provisions of ASC 810, Consolidation. At December 31, 2017 (Successor), the variable interest entities include five surgical facilities, three anesthesia practices and three physician practices. At December 31, 2016 (Predecessor), the variable interest entities included five surgical facilities, three anesthesia practices and two physician practice. The change is due to a physician practice acquired during the eight months ended August 31, 2017 (Predecessor). The Company has the power to direct the activities that most significantly impact a variable interest entity's economic performance. Additionally, the Company would absorb the majority of the expected losses from any of these entities should such expected losses occur.

The total assets (excluding goodwill and intangible assets, net) of the consolidated VIEs included in the accompanying consolidated balance sheets as of December 31, 2017 (Successor) and 2016 (Predecessor), were $13.1 million and $24.8 million, respectively, and the total liabilities of the consolidated VIEs were $5.8 million and $10.7 million, respectively. There are no assets that are restricted to use as of December 31, 2017 (Successor).

Equity Method Investments

The Company has non-consolidating investments in surgical facilities and management companies that own or manage surgical facilities. These investments are accounted for using the equity method of accounting. The total amount of these investments included in investments in and advances to affiliates in the consolidated balance sheets was $74.3 million and $35.0 million as of December 31, 2017 (Successor) and December 31, 2016 (Predecessor), respectively.

Use of Estimates

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and footnotes. Examples include, but are not limited to, estimates of accounts receivable allowances, professional and general liabilities and the estimate of deferred tax assets or liabilities. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All adjustments are of a normal, recurring nature. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to the comparative periods' financial statements to conform to the current year presentation.

Fair Value of Financial Instruments

The fair value of a financial instrument is the amount at which the instrument could be exchanged in an orderly transaction between market participants to sell the asset or transfer the liability. The Company uses fair value measurements based on quoted prices in active markets for identical assets or liabilities (Level 1), inputs other than quoted prices in active markets that are either directly or indirectly observable (Level 2), or unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions (Level 3), depending on the nature of the item being valued.

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, restricted invested assets and accounts payable approximate their fair values.

A summary of the carrying amounts and fair values of the Company's long-term debt follows (in thousands):



	Successor				Predecessor
	December 31, 2017				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value

2014 Revolver Loan	$	—	$	—	$	85,000	$	85,000
2014 First Lien Credit Agreement, net of debt issuance costs and discount	$	—	$	—	$	911,784	$	917,528
2017 Senior Secured Credit Facilities:
Revolver	$	—	$	—	$	—	$	—
Term Loan	$	1,280,532	$	1,267,189	$	—	$	—
Senior Unsecured Notes due 2021 ⁽¹⁾	$	409,235	$	422,535	$	387,942	$	412,189
Senior Unsecured Notes due 2025	$	370,000	$	346,413	$	—	$	—

⁽¹⁾ The carrying amount in the Predecessor period is net of unamortized debt issuance costs and discount, which were eliminated with the application of pushdown accounting.

The fair values of the 2014 First Lien Credit Agreement, Term Loan, 2021 Unsecured Notes and the 2025 Unsecured Notes (in each case, as defined in Note 7. "Long-Term Debt") were based on Level 2 inputs using quoted prices for identical liabilities in inactive markets at December 31, 2017 (Successor) and 2016 (Predecessor), as applicable. The carrying amounts related to the Company's other long-term debt obligations, including the 2014 Revolver Loan and the Revolver (in each case, as defined in Note 7. "Long-Term Debt"), approximate their fair values.

The Company maintains a supplemental executive retirement savings plan (the "SERP") for certain executive officers. The SERP is a non-qualified deferred compensation plan for eligible executive officers and other key employees of the Company that allows participants to defer portions of their compensation. The fair value of the SERP asset and liability was based on a quoted market price, or a Level 1 computation. As of December 31, 2017 (Successor) and 2016 (Predecessor), the fair value of the assets in the SERP were $1.9 million and $1.7 million, respectively, and were included in other long-term assets in the consolidated balance sheets. The Company had a liability related to the SERP of $1.9 million and $1.7 million as of December 31, 2017 (Successor) and 2016 (Predecessor), respectively, which was included in other long-term liabilities in the consolidated balance sheets.

Revenues

The Company recognizes revenues in the period in which the services are performed. Patient service revenues and receivables from third-party payors are recorded net of estimated contractual adjustments and allowances, which the Company estimates based on the historical trend of its cash collections and contractual write-offs, accounts receivable agings, established fee schedules, contracts with payors and procedure statistics.

A summary of revenues by service type as a percentage of total revenues follows:



	Successor		Predecessor
	September 1 to December 31,		January 1 to August 31,		Year Ended December 31,
	2017		2017		2016		2015
Patient service revenues:
Surgical facilities revenues	94.3	%	91.4	%	90.3	%	91.6	%
Ancillary services revenues	4.2	%	7.0	%	7.9	%	6.4	%
	98.5	%	98.4	%	98.2	%	98.0	%
Other service revenues:
Optical services revenues	0.6	%	1.0	%	1.1	%	1.5	%
Other	0.9	%	0.6	%	0.7	%	0.5	%
	1.5	%	1.6	%	1.8	%	2.0	%
Total revenues	100.0	%	100.0	%	100.0	%	100.0	%

Patient service revenues. The fee charged for healthcare procedures performed in surgical facilities varies depending on the type of service provided, but usually includes all charges for usage of an operating room, a recovery room, special equipment, medical supplies, nursing staff and medications. The fee does not normally include professional fees charged by the patient’s surgeon, anesthesiologist or other attending physician, which are billed directly by such physicians to the patient or third-party payor. However, in several surgical facilities, the Company charges for anesthesia services. Ancillary service revenues include fees for patient visits to the Company's physician practices, pharmacy services and diagnostic tests ordered by physicians. Patient service revenues are recognized on the date of service, net of estimated contractual adjustments and discounts from third-party payors, including Medicare and Medicaid. Changes in estimated contractual adjustments and discounts are recorded in the period of change. There were no adjustments as a result of changes in estimates to third-party settlements related to prior years for the four months ended December 31, 2017 (Successor). During the eight months ended August 31, 2017 (Predecessor), the Company recognized an increase to patient service revenues as a result of changes in estimates to third-party settlements related to prior years of approximately $1.1 million. During the years ended December 31, 2016 and 2015, the Company recognized an increase to patient service revenues of $6.8 million and $2.3 million, respectively, as a result of changes in estimates to third-party settlements related to prior years.

The following table sets forth patient service revenues by type of payor and as a percentage of total patient service revenues for the Company's consolidated surgical facilities (dollars in thousands):



	Successor				Predecessor
	September 1 to December 31,				January 1 to August 31,				Year Ended December 31,
	2017				2017				2016				2015
	Amount		%		Amount		%		Amount		%		Amount		%
Patient service revenues:
Private insurance	$	347,801	59.6	%	$	360,092	48.9	%	$	579,662	51.5	%	$	516,739	55.0	%
Government	196,926		33.7	%	308,993		42.0	%	448,953		39.9	%	359,471		38.2	%
Self-pay	15,233		2.6	%	15,949		2.2	%	19,817		1.8	%	16,190		1.7	%
Other ⁽¹⁾	23,843		4.1	%	51,374		6.9	%	76,172		6.8	%	48,311		5.1	%
Total patient service revenues	$	583,803	100.0	%	$	736,408	100.0	%	$	1,124,604	100.0	%	$	940,711	100.0	%
Other service revenues:
Optical service revenues	$	3,486			$	7,629			$	12,505			$	14,572
Other revenues	5,315				4,578				8,329				4,608
Total net revenues	$	592,604			$	748,615			$	1,145,438			$	959,891

(1) Other is comprised of anesthesia service agreements, auto liability, letters of protection and other payor types.

Other service revenues. Optical service revenues consist of product sales from the Company's optical laboratories as well as handling charges billed to the members of the Company's optical products purchasing organization. The Company's optical products purchasing organization negotiates volume buying discounts with optical products manufacturers. The buying discounts and any handling charges billed to the members of the buying group represent the revenue recognized for financial reporting purposes. Revenue is recognized as orders are shipped to members. The Company bases its estimates for sales returns and discounts on historical experience and has not experienced significant fluctuations between estimated and actual return activity and discounts given. The Company's optical laboratories manufacture and distribute corrective lenses and eyeglasses to ophthalmologists and optometrists. Revenue is recognized when product is shipped, net of allowance for discounts.

Other revenues include management and administrative service fees derived from the non-consolidated facilities that the Company accounts for under the equity method, management of surgical facilities in which it does not own an interest, and management services provided to physician practices for which the Company is not required to provide capital or additional assets. The fees derived from these management arrangements are based on a predetermined percentage of the revenues of each facility or practice and are recognized in the period in which services are rendered.

Subsequent to the Preferred Private Placement, the Company, as part of a review of operations undertaken to create a solid foundation to support the Company's long-term growth objectives, incurred a non-recurring adjustment to revenue of $15.6 million, which was attributable to an increase in reserves for certain accounts receivable during the eight months ended August 31, 2017 (Predecessor). The increase in reserves resulted from certain known events and actions during the eight months ended August 31, 2017 (Predecessor) related to select payors primarily in the Company’s ancillary services segment. Upon consideration of such additional information, related receivables were determined to have a low likelihood of collection. The majority of this adjustment related to receivables with balances from the first quarter of 2016 and prior. The Company believes it has accounted for all necessary reserve adjustments at this time.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash and cash equivalent balances at high credit quality financial institutions.

Accounts Receivable and Allowances for Contractual Adjustments and Doubtful Accounts

Accounts receivable are recorded net of contractual adjustments and allowances for doubtful accounts to reflect accounts receivable at net realizable value. Accounts receivable consists of receivables from federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies, employers and patients. Management recognizes that revenues and receivables from government agencies are significant to the Company's operations, but it does not believe that there is significant credit risk associated with these government agencies. Concentration of credit risk with respect to other payors is limited because of the large number of such payors. As of December 31, 2017, the Company had a net third-party Medicaid settlements liability of $1.0 million compared to a third-party Medicaid settlements receivable of $0.5 million at December 31, 2016.

The Company recognizes that final reimbursement of accounts receivable is subject to final approval by each third-party payor. However, because the Company has contracts with its third-party payors and also verifies insurance coverage of the patient before medical services are rendered, the amounts that are pending approval from third-party payors are not considered significant. The Company's policy is to collect co-payments and deductibles prior to providing medical services. It is also the Company's policy to verify a patient’s insurance 72 hours prior to the patient’s procedure. Patient services of the Company are primarily non-emergency, which allows the surgical facilities to control the procedures for which third-party reimbursement is sought and obtained. The Company does not require collateral from self-pay patients.

The Company analyzes accounts receivable at each of its facilities to ensure the proper aged category and collection assessment. At a consolidated level, the Company's policy is to review accounts receivable aging, by facility, to determine the appropriate allowance for doubtful accounts. Patient account balances are reviewed for delinquency based on contractual terms. This review is supported by an analysis of the actual revenues, contractual adjustments and cash collections received. An account balance is written off only after the Company has pursued collection with legal or collection agency assistance or otherwise has deemed an account to be uncollectible.

A summary of the changes in the allowance for doubtful accounts receivable follows (in thousands):



	Balance at Beginning of Period		Provision for Doubtful Accounts		Accounts Written off, Net of Recoveries			Balance at End of Period
Predecessor
Year ended December 31, 2015	$	5,329	$	23,578	$	(10,585	)	$	18,322
Year ended December 31, 2016	18,322		24,212		(12,662		)	29,872
Eight months ended August 31, 2017	29,872		16,297		(14,096		)	32,073



Successor
Four months ended December 31, 2017	—		12,455		(10,429		)	2,026

The Company records an estimate for doubtful accounts based on the aging category and historical collection experience of each product sales or other business included in other service revenues, as discussed in the note above.

The receivables related to the Company's optical products purchasing organization are recognized separately from patient accounts receivable, as discussed above, and are included in other current assets in the consolidated balance sheets. Such receivables were $7.6 million and $7.0 million at December 31, 2017 (Successor) and 2016 (Predecessor), respectively.

Inventories

Inventories, which consist primarily of medical and drug supplies, are stated at the lower of cost or market value. Cost is determined using the first-in, first-out method.

Prepaid Expenses and Other Current Assets

A summary of prepaid expenses and other current assets follows (in thousands):



	Successor		Predecessor
	December 31, 2017		December 31, 2016

Prepaid expenses	$	16,835	$	11,158
Receivables - optical product purchasing organization	7,563		7,042
Acquisition escrow deposit	3,809		10,871
Insurance recoveries	2,828		2,476
Other	24,302		11,338
Total	$	55,337	$	42,885

Property and Equipment

Property and equipment are stated at cost or, if obtained through acquisition, at fair value determined on the date of acquisition. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets, generally 20 to 40 years for buildings and building improvements, three to five years for computers and software and five to seven years for furniture and equipment. Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease term or the estimated useful life of the assets. Routine maintenance and repairs are expensed as incurred, while expenditures that increase capacities or extend useful lives are capitalized.

The Company also leases certain facilities and equipment under capital leases. Assets held under capital leases are stated at the present value of minimum lease payments at the inception of the related lease. Such assets are amortized on a straight-line basis over the lesser of the lease term or the remaining useful life of the leased asset. The Company's property and equipment, as well as assets held under capital leases are further described in Note 5.

Goodwill and Intangible Assets

Goodwill represents the fair value of the consideration provided in an acquisition over the fair value of net assets acquired and is not amortized. The Company has indefinite-lived intangible assets related to the certificates of need held in jurisdictions where certain of its surgical facilities are located and Medicare licenses. The Company also has finite-lived intangible assets related to physician guarantee agreements, non-compete agreements, management agreements and customer relationships. Physician income guarantees are amortized into salaries and benefits costs in the consolidated statements of operations over the commitment period of the contract, generally three to four years. Non-compete agreements and management rights agreements are amortized into depreciation and amortization expense in the consolidated statements of operations over the service lives of the agreements, typically ranging from two to five years for non-compete agreements and 15 years for the management rights agreements. Customer relationships are amortized into depreciation and amortization expense in the consolidated statements of operations over the estimated lives of the relationships, ranging from three to ten years. The Company's goodwill and intangible assets are further described in Note 6.

Impairment of Long-Lived Assets, Goodwill and Intangible Assets

The Company evaluates the carrying value of long-lived assets when impairment indicators are present or when circumstances indicate that impairment may exist. The Company performs an impairment test by preparing an expected undiscounted cash flow projection. If the projection indicates that the recorded amount of the long-lived asset is not expected to be recovered, the carrying value is reduced to estimated fair value. The cash flow projection and fair value represents management’s best estimate, using appropriate and customary assumptions, projections and methodologies, at the date of evaluation. No impairment losses on long-lived assets were recognized during the four months ended December 31, 2017 (Successor), the eight months ended August 31, 2017 (Predecessor), and the years ended December 31, 2016 and 2015 (Predecessor).

The Company tests its goodwill and indefinite-lived intangible assets for impairment at least annually, as of October 1, or more frequently if certain indicators arise. The Company tests for goodwill impairment at the reporting unit level, which is defined as one level below an operating segment. The Company has determined that it has five reporting units, which include the following: 1) Surgical Facilities 2) Ancillary Services, 3) Midwest Labs, 4) The Alliance, including Optical Synergies and 5) Family Vision Care. The Company compares the carrying value of the net assets of the reporting unit to the estimated fair value of the reporting unit. If the carrying value exceeds the estimated fair value, an impairment indicator exists and an estimate of the possible impairment loss is calculated. The fair value of the reporting units are estimated using a discounted cash flows approach and are corroborated using a market-based approach. The fair value calculation includes multiple assumptions and estimates, including the projected cash flows and discount rates applied.

In connection with the implementation of pushdown accounting, the Company performed its goodwill impairment test as of August 31, 2017 (Predecessor), then re-evaluated for impairment at October 1, 2017 (Successor). Both evaluations resulted in no impairment. There were also no impairment charges recorded during the years ended December 31, 2016 and 2015 (Predecessor).

Restricted Invested Assets

Restricted invested assets of $0.3 million as of both December 31, 2017 (Successor) and 2016 (Predecessor) were related to a requirement under the operating lease agreement at the Company's Chesterfield, Missouri facility. In accordance with the provisions of the lease agreement, the Company has a deposit with the landlord that shall be held as security for performance under the Company's covenants and obligations within the agreement through January 2024.

Other Long-Term Assets

A summary of other long-term assets follows (in thousands):



	Successor		Predecessor
	December 31, 2017		December 31, 2016

Acquisition escrow deposit	$	19,600	$	—
Insurance recoveries	10,018		6,835
Notes receivable	2,263		716
Deposits	3,151		4,196
Other	13,318		4,688
Total	$	48,350	$	16,435

Other Current Liabilities

A summary of other current liabilities follows (in thousands):



	Successor		Predecessor
	December 31, 2017		December 31, 2016

Interest payable	$	20,537	$	19,206
Amounts due to patients and payors	18,096		12,221
Insurance liabilities	9,873		6,625
Current taxes payable	4,912		2,622
Acquisition escrow liability	3,809		10,871
Accrued expenses and other	52,717		28,319
Total	$	109,944	$	79,864

Other Long-Term Liabilities

A summary of other long-term liabilities follows (in thousands):



	Successor		Predecessor
	December 31, 2017		December 31, 2016

Facility lease obligations	$	121,627	$	52,653
Acquisition escrow liability	19,600		—
Medical malpractice liability	16,450		10,453
Unfavorable lease liability	11,889		1,671
Other	9,123		11,489
Total	$	178,689	$	76,266

At four of the Company's surgical facilities, the Company has facility lease obligations payable to the lessor of each facility. Payments are allocated to principal adjustments of the lease obligations and interest expense. The current portions of the lease obligations were $6.3 million and $1.3 million at December 31, 2017 (Successor) and 2016 (Predecessor), respectively, and were included in other current liabilities in the consolidated balance sheets. The long-term portions of the lease obligations, included in the table above, were $121.6 million and $52.7 million at December 31, 2017 (Successor) and 2016 (Predecessor), respectively. The increase is primarily due to two facility lease obligations assumed with the NSH Merger and the revaluation of the obligations with the application of pushdown accounting.

Equity-Based Compensation

Transactions in which the Company receives employee and non-employee services in exchange for the Company’s equity instruments or liabilities that are based on the fair value of the Company’s equity securities or may be settled by the issuance of these securities are accounted for using a fair value method. Prior to the Reorganization, on the grant date, the Company employed a market approach to estimate the fair value of equity-based awards based on various considerations and assumptions, including implied earnings multiples and other metrics of relevant market participants, the Company’s operating results and forecasted cash flows and the Company’s capital structure. Such estimates require the input of highly subjective, complex assumptions. However, such assumptions are no longer required to determine fair value of shares of the Company’s common stock as its underlying shares began trading publicly during the fourth quarter of 2015. The Company applies the Black-Scholes-Merton method of valuation in determining share-based compensation expense for option awards.

The Company’s policy is to recognize compensation expense using the straight line method over the relevant vesting period for units that vest based on time. Prior to the Reorganization, employees held membership units in Surgery Center Holdings, LLC, and the associated expense was referred to as unit-based compensation; following the Reorganization, such expense is referred to as equity-based compensation. The Company's equity-based compensation is described further in Note 12.

Professional, General and Workers' Compensation Insurance

The Company maintains general liability and professional liability insurance in excess of self-insured retentions through third party commercial insurance carriers in amounts that management believes is sufficient for the Company's operations, although, potentially, some claims may exceed the scope of coverage in effect. The professional and general insurance coverage is on a claims-made basis. Workers' compensation insurance is on an occurrence basis.

The Company expenses the costs under the self-insured retention exposure for general and professional liability and workers compensation claims which relate to (i) claims made during the policy period, which are offset by insurance recoveries and (ii) an estimate of claims incurred but not yet reported that are expected to be reported after the policy period expires. Reserves and provisions are based upon actuarially determined estimates using individual case-basis valuations and actuarial analysis. Reserves for professional, general and workers' compensation claim liabilities are determined with no regard for expected insurance recoveries and are presented gross on the consolidated balance sheets. Total professional, general and workers' compensation claim liabilities as of December 31, 2017 and 2016 are $21.0 million and $13.8 million, respectively. The balance includes expected insurance recoveries of $12.8 million and $9.3 million as of December 31, 2017 and 2016, respectively. The increase is primarily due to the acquisition of NSH.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers," along with subsequent amendments, updates and an extension of the effective date (collectively the “New Revenue Standard”), which outlines a single comprehensive model for recognizing revenue and supersedes most existing revenue recognition guidance, including guidance specific to the healthcare industry. This five-step process will require significant management judgment in addition to changing the way many companies recognize revenue in their financial statements. Additionally, and among other provisions, the New Revenue Standard requires expanded quantitative and qualitative disclosures, including disclosure about the nature, amount, timing and uncertainty of revenue. The provisions of the New Revenue Standard are effective for annual periods beginning after December 15, 2017, including interim periods within those years by applying either the full retrospective method or the modified retrospective approach upon adoption. The Company will adopt this ASU on January 1, 2018. The Company plans to adopt using the modified retrospective method, including providing all requisite disclosures under such method. The Company expects that the majority of its provision for doubtful accounts will continue to be recognized as an operating expense rather than as a direct reduction to revenues, given the Company’s practice of assessing a patient’s ability to pay prior to or on the date of providing healthcare services. The Company does not believe the adoption will have a significant impact on our recognition of net revenues for any period. The Company is still evaluating the impact that the adoption will have on its related disclosures.

In February 2016, the FASB issued ASU 2016-02, “Leases,” which will require, among other items, lessees to recognize most leases as assets and liabilities on the balance sheet. Qualitative and quantitative disclosures will be enhanced to better understand the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company believes the primary effect of adopting the new standard will be to record right-of-use assets and obligations for current operating leases.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations – Clarifying the Definition of a Business,” which narrows the definition of a business when evaluating whether transactions should be accounted for as asset acquisition or business combination. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those years. The adoption of this ASU will not have a material impact on the Company's condensed consolidated financial position, results of operations and cash flows.

Acquisitions and Developments

12 Months Ended

Dec. 31, 2017

Business Combinations [Abstract]

Acquisitions and Developments

The Company accounts for its business combinations in accordance with the fundamental requirements of the acquisition method of accounting and under the premise that an acquirer can be identified for each business combination. The acquirer is the entity that obtains control of one or more businesses in the business combination and the acquisition date is the date the acquirer achieves control. The assets acquired, liabilities assumed and any non-controlling interests in the acquired business at the acquisition date are recognized at their fair values as of that date, and the direct costs incurred in connection with the business combination are recorded and expensed separately from the business combination. Any goodwill recognized is determined as the excess of the fair value of the consideration conveyed plus the fair value of any non-controlling interests in the acquisition over the fair value of the net assets acquired. Acquisitions in which the Company is able to exert significant influence but does not have control are accounted for using the equity method.

Acquired assets and assumed liabilities typically include, but are not limited to, fixed assets, intangible assets and professional liabilities. The valuations are based on appraisal reports, discounted cash flow analyses, actuarial analyses or other appropriate valuation techniques to determine the fair value of the assets acquired or liabilities assumed. Fair value attributable to non-controlling interests is based on a Level 3 computation using significant inputs that are not observable in the market. Key inputs used to determine the fair value include financial multiples used in the purchase of non-controlling interests, primarily from acquisitions of surgical facilities. Such multiples, based on earnings, are used as a benchmark for the discount to be applied for the lack of control or marketability. Fair value attributable to the property and equipment acquired is based on Level 3 computations using key inputs such as cost trend data and comparable asset sales. Fair value attributable to the intangible assets acquired is based on Level 3 computations using key inputs such as the Company's internally-prepared financial projections. Fair values assigned to acquired working capital are based on carrying amounts reported by the acquiree at the date of acquisition, which approximate their fair values.

2017 Transactions

Acquisition of NSH

On August 31, 2017, the Company completed its acquisition of NSH through the NSH Merger, pursuant to the NSH Merger Agreement (as defined in Note 1. "Organization") for total cash consideration of $711.7 million, net of cash acquired, including $19.6 million funded to an escrow account. The NSH Merger added to the Company's portfolio 22 owned or operated surgical facilities, including 7 ASCs and 15 surgical hospitals, as well as complementary ancillary services. The proceeds from the Preferred Private Placement (as defined in Note 1. "Organization"), the 2025 Unsecured Notes and the 2017 Senior Secured Credit Facilities (in each case, as defined in Note 7. "Long-Term Debt") were used to fund the acquisition.

Fees associated with the acquisition of NSH, which includes fees incurred related to the Company's preferred equity issuances and debt financings, was approximately $82.6 million during the eight months ended August 31, 2017 (Predecessor). Approximately $45.5 million was capitalized as deferred financing costs and discount, $18.3 million was capitalized as deferred equity issuance costs, $2.4 million was expensed as merger transaction and integration costs, and $16.4 million was recorded as loss on debt refinancing costs. All capitalized costs were subsequently written off as a result of the application of pushdown accounting, further discussed below.

The total consideration related to the acquisition of NSH was allocated to the assets acquired and liabilities assumed based upon their respective acquisition date fair values. The aggregate amounts preliminarily recognized for each major class of assets and liabilities, including post acquisition date adjustments, are as follows (in thousands):



Cash consideration	$	762,850
Fair value of non-controlling interests	325,965
Aggregate fair value of acquisition	1,088,815
Net assets acquired:
Cash and cash equivalents	51,159
Accounts receivable	71,901
Inventories	14,986
Prepaid expenses and other current assets	18,397
Property and equipment	174,499
Intangible assets	27,746
Goodwill	870,241
Investments in and advances to affiliates	29,737
Long-term deferred tax assets	17,279
Other long-term assets	27,229
Accounts payable	(29,652		)
Accrued payroll and benefits	(28,755		)
Other current liabilities	(21,287		)
Current maturities of long-term debt	(16,416		)
Long-term debt, less current maturities	(42,770		)
Other long-term liabilities	(75,479		)
Total fair value of net assets acquired	$	1,088,815

During the four months ended December 31, 2017, factors became known to the Company as part of its evaluation of the assets and liabilities existing at the date of acquisition. this resulted in a net increase to goodwill of $25.1 million and corresponding changes to certain classes of assets and liabilities from the preliminary allocation recorded at August 31, 2017, that are reflected in the table above. The Company is still in the process of evaluating all major classes of assets acquired and liabilities assumed. As such, the fair values assigned are subject to change as new facts and circumstances emerge that were present at the date of acquisition.

A majority of the deferred income taxes recognized as a component of the Company's purchase price allocation is a result of the difference between the book and tax basis of the intangible assets recognized.

The preliminary estimated fair value assigned to goodwill is primarily attributable to synergies expected to arise as a result of the NSH Merger by enhancing the growth profile and diversity of the Company across the healthcare continuum. The entire amount of goodwill acquired in connection with the NSH Merger was allocated to the Company's surgical facility services operating segment. The total amount of the goodwill related to the NSH Merger that will be deductible for tax purposes is $153.5 million.

The amounts of revenues and earnings of NSH for the four months ended December 31, 2017 (Successor) was $205.2 million and $20.4 million, respectively, and are included in revenues and net loss attributable to Surgery Partners, Inc., respectively, in the consolidated statement of operations.

The following unaudited pro forma combined summary of operations of the Company gives effect to using historical information of the operations of NSH as if the acquisition transaction had occurred as of January 1, 2016 (in thousands):



	Successor			Predecessor
	September 1 to December 31,			January 1 to August 31,			Year Ended December 31,
	2017			2017			2016

Net revenues	$	592,604		$	1,122,326		$	1,679,254

Net income	4,477			63,269			132,699
Less: Net income attributable to non-controlling interests	(39,634		)	(65,122		)	(112,123		)
Net (loss) income attributable to Surgery Partners, Inc.	$	(35,157	)	$	(1,853	)	$	20,576

These pro forma amounts exclude transaction related costs of $7.3 million and the gain on amendment to the TRA of $1.1 million for the four months ended December 31, 2017 (Successor), transaction related costs of $11.3 million, loss on debt refinancing of $18.2 million and the gain on amendment to the TRA of $15.3 million for the eight months ended August 31, 2017 (Predecessor). The prior year pro forma amounts exclude the loss on debt refinancing of $11.9 million for the year ended December 31, 2016 (Predecessor). Certain other adjustments, including those related to conforming accounting policies, have not been reflected in the supplemental pro forma operating results as estimating such impacts would be impracticable.

Change of Control - Pushdown Accounting

On August 31, 2017, H.I.G. sold the Purchased Shares (as defined in Note 1. "Organization") beneficially owned by H.I.G. to Bain at a purchase price per share of $19.00 for an aggregate purchase price of $502.7 million in cash pursuant to the Common Stock Purchase Agreement (as defined in Note 1. "Organization"). As of August 31, 2017 (Predecessor), prior to giving effect to the Preferred Private Placement (as defined in Note 1. "Organization"), the Purchased Shares represented approximately 54.2% of the Company's outstanding Common Stock. As a result of the Private Sale and the Preferred Private Placement, Bain holds Series A Preferred Stock and Common Stock that collectively represented approximately 65.7% of the voting power of all classes of capital stock of the Company as of August 31, 2017 (Predecessor), and H.I.G. and its affiliated investment funds no longer own any capital stock of the Company.

Fees associated with the change of control include fees incurred related to the Preferred Private Placement. Refer to Note 9. "Redeemable Preferred Stock", for the amount and accounting treatment of these costs.

In connection with the change of control, the Company elected to apply “pushdown” accounting by applying the guidance in ASC 805, Business Combinations. In accordance with ASC 805, all identifiable assets and liabilities of the Company were measured at and adjusted to fair value as of August 31, 2017, and similarly goodwill was recognized based on the terms of the transaction and the fair value of the new basis of the net assets of the Company.

The aggregate amounts preliminarily recognized in connection with the application of pushdown accounting for each major class of assets and liabilities as of August 31, 2017, including subsequent adjustments, are as follows (in thousands):



Equity attributable to Surgery Partners, Inc.	$	720,606
Redeemable preferred stock	310,000
Fair value of non-controlling interests	957,027
Aggregate fair value	1,987,633
Net assets:
Cash and cash equivalents	214,206
Accounts receivable	253,173
Inventories	44,310
Prepaid expenses and other current assets	61,475
Property and equipment	380,085
Intangible assets	60,104
Goodwill	3,299,911
Investments in and advances to affiliates	74,722
Restricted invested assets	315
Long-term deferred tax asset	204,408
Other long-term assets	49,681
Accounts payable	(64,921		)
Accrued payroll and benefits	(54,437		)
Other current liabilities	(94,740		)
Current maturities of long-term debt	(49,942		)
Long-term debt, less current maturities	(2,142,375		)
Long-term tax receivable agreement liability	(78,498		)
Other long-term liabilities	(169,844		)
Total fair value of net assets	$	1,987,633

During the four months ended December 31, 2017, factors became known to the Company as part of its evaluation of the assets and liabilities existing at August 31, 2017, resulting in a net increase to goodwill of $30.7 million and corresponding changes to certain classes of assets and liabilities from the preliminary allocation recorded, that are reflected in the table above. The majority of the increase to goodwill for pushdown accounting relates to the acquisition of NSH discussed above. The Company is still in the process of evaluating all major classes of assets and liabilities. As such, the fair values assigned are subject to change as new facts and circumstances emerge that were present at August 31, 2017.

Goodwill recognized in connection with the application of pushdown accounting was allocated to each reportable segment as follows: $3.116 billion to surgical facilities services, $151.9 million to ancillary services and $32.5 million to optical services. The total amount of the goodwill related to the application of pushdown accounting that will be deductible for tax purposes is $360.5 million.

Other 2017 Acquisitions

During the eight months ended August 31, 2017 (Predecessor), the Company completed acquisitions in existing markets of three physician practices for a combined cash purchase price of $14.2 million. The acquisitions were funded through cash from operations and proceeds from the 2014 Revolver Loan (as defined in Note 7. "Long-Term Debt").

During the four months ended December 31, 2017 (Successor), the Company acquired a controlling interest in one surgical facility and one physician practice in existing markets for a combined cash purchase price of $29.4 million. The acquisitions were funded through cash from operations.

The total consideration related to the other 2017 acquisitions was allocated to the assets acquired and liabilities assumed based upon their respective acquisition date fair values. The aggregate amounts preliminarily recognized for each major class of assets and liabilities assumed in the other acquisitions completed during 2017, including post acquisition date adjustments, are as follows (in thousands):



	Successor			Predecessor
	September 1 to December 31,			January 1 to August 31,
	2017			2017

Cash consideration	$	29,448		$	14,163
Fair value of non-controlling interests	21,893			105
Aggregate fair value of acquisitions	51,341			14,268
Net assets acquired:
Current Assets	2,285			866
Property and equipment	248			696
Intangible assets	41			634
Goodwill	49,317			12,545
Current liabilities	(550		)	(287		)
Long-term debt	—			(186		)
Total fair value of net assets acquired	$	51,341		$	14,268

The results of operations of the acquisitions are included in the Company’s results of operations beginning on the date of acquisition. The fair values assigned to certain assets and liabilities assumed by the Company have been estimated on a preliminary basis and are subject to change as new facts and circumstances emerge that were present at the date of acquisition.

2016 Transactions

During the year ended December 31, 2016, the Company acquired a controlling interest in two surgical facilities and two anesthesia practices in new markets and a surgical facility in an existing market which was merged into an existing facility and an anesthesia practice in an existing market for an aggregate purchase price of $36.5 million. The Company additionally completed acquisitions in existing markets of an urgent care facility, nine physician practices and two integrated physician practices which includes three ASCs, a lab and a pharmacy for a combined purchase price of $114.7 million, including $16.6 million of contingent acquisition consideration. In addition, the Company purchased an additional 7.04% interest in its hospital in Idaho Falls, Idaho for $20.3 million. The transactions were funded through cash from operations and proceeds from the 2014 First Lien Credit Agreement and 2014 Revolver Loan (in each case, as defined in Note 7. "Long-Term Debt").

The aggregate acquisition date fair value recognized for each major class of assets and liabilities assumed in the acquisitions completed during the year ended December 31, 2016, including post acquisition date adjustments, are as follows (in thousands):



Cash consideration	$	135,061
Fair value of non-controlling interests	27,164
Aggregate fair value of acquisitions	162,225
Net assets acquired:
Current assets	11,383
Property and equipment	3,921
Intangible assets	4,475
Goodwill	148,181
Other long-term assets	56
Current liabilities	(5,422		)
Long-term liabilities	(369		)
Total fair value of net assets acquired	$	162,225

During 2017, no significant changes were made to the acquisition date purchase price allocation of assets and liabilities related to individual acquisitions completed in 2016. Approximately $120.0 million of goodwill related to the 2016 acquisitions was deductible for tax purposes.

2015 Transactions

Surgical Facility Acquisitions

During the year ended December 31, 2015, the Company acquired a controlling interest in two surgical facilities located in new markets and three surgical facilities, four anesthesia practices and an urgent care facility in existing markets for an aggregate purchase price of $84.2 million. The Company consolidates these facilities for financial reporting purposes. These transactions were funded with a combination of cash from operations, facility ownership, and proceeds from the refinancing of the Company's credit facilities in connection with the Symbion acquisition.

Ancillary Services

During the year ended December 31, 2015, through its recruiting efforts and capital-efficient acquisitions, the Company completed 13 in-market physician practice transactions through an aggregate investment of $40.4 million. These transactions added a total of 17 physicians to the Company’s physician network and were funded with a combination of cash from operations and revolver proceeds.

Divestitures	12 Months Ended
Divestitures	Dec. 31, 2017
Discontinued Operations and Disposal Groups [Abstract]
Divestitures	Divestitures 2017 Transactions During the four months ended December 31, 2017 (Successor), the Company sold its interest in one surgical facility for $1.3 million, resulting in a pre-tax gain of approximately $0.8 million. During the eight months ended August 31, 2017 (Predecessor), the Company sold its interest in one surgical facility. The proceeds and pre-tax gain for the sale were not significant. 2016 Transactions During the year ended December 31, 2016, the Company sold its interest in one surgical facility for $0.8 million, resulting in a pre-tax gain of approximately $0.8 million. 2015 Transactions During the year ended December 31, 2015, the Company sold its interest in three surgical facilities and received aggregate proceeds of $10.9 million, resulting in a pre-tax gain of approximately $2.9 million.

Property and Equipment

12 Months Ended

Dec. 31, 2017

Property, Plant and Equipment [Abstract]

Property and Equipment

A summary of property and equipment follows (in thousands):



	Successor			Predecessor
	December 31, 2017			December 31, 2016

Land	$	19,561		$	8,082
Buildings and improvements	188,571			118,172
Furniture and equipment	20,813			14,670
Computer and software	28,578			29,902
Medical equipment	138,112			117,418
Construction in progress	22,581			2,396
Property and equipment, at cost	418,216			290,640
Less: Accumulated depreciation	(19,680		)	(86,387		)
Property and equipment, net	$	398,536		$	204,253

Depreciation expense was $20.0 million for the four months ended December 31, 2017 (Successor) and $24.1 million for the eight months ended August 31, 2017 (Predecessor). For the years ended December 31, 2016 (Predecessor) and 2015 (Predecessor), depreciation expense was $30.0 million and $25.5 million, respectively. Amortization expense related to assets under capital leases is included in depreciation expense.The carrying values of assets under capital lease were $16.2 million and $15.4 million as of December 31, 2017 (Successor) and 2016 (Predecessor), respectively, net of accumulated depreciation of $5.8 million and $11.6 million, respectively.

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

A summary of the changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 follows (in thousands):



Predecessor
Balance at December 31, 2015	$	1,407,927
Acquisitions	147,895
Divestitures	(552		)
Purchase price adjustments	(66		)
Balance at December 31, 2016	$	1,555,204
Acquisitions	858,323
Divestitures	(175		)
Purchase price adjustments	1,220
Balance at August 31, 2017	$	2,414,572



Successor
Balance at September 1, 2017	$	3,269,225
Acquisitions	49,317
Divestitures	(1,957		)
Purchase price adjustments	30,253
Balance at December 31, 2017	$	3,346,838

Additions to goodwill include new acquisitions and incremental ownership acquired in the Company's subsidiaries. A summary of the Company's acquisitions for the years ended December 31, 2017 and 2016 is included in Note 3, Acquisitions and Developments.

A summary of the components of intangible assets follows (in thousands):



	Successor							Predecessor
	December 31, 2017							December 31, 2016
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net

Finite-lived intangible assets:
Management rights agreements	$	42,600	$	(1,058	)	$	41,542	$	24,751	$	(3,461	)	$	21,290
Non-compete agreements	4,874		(715		)	4,159		24,673		(8,216		)	16,457
Physician income guarantees	878		(227		)	651		1,901		(1,088		)	813
Other	—		—			—		8,815		(3,374		)	5,441
Total finite-lived intangible assets	48,352		(2,000		)	46,352		60,140		(16,139		)	44,001
Indefinite-lived intangible assets:
Management rights agreements	5,900		—			5,900		—		—			—
Certificates of need	5,548		—			5,548		3,780		—			3,780
Medicare licenses	1,108		—			1,108		242		—			242
Total intangible assets	$	60,908	$	(2,000	)	$	58,908	$	64,162	$	(16,139	)	$	48,023

A summary of the aggregate activity related to intangible assets for the years ended December 31, 2017 and 2016 follows (in thousands):



Predecessor
Balance at December 31, 2015	$	53,568
Additions	4,754
Disposals	(135		)
Recruitment expense	(609		)
Amortization	(9,555		)
Balance at December 31, 2016	$	48,023
Additions	28,312
Recruitment expense	(380		)
Amortization	(6,040		)
Balance at August 31, 2017	$	69,915



Successor
Balance at September 1, 2017	$	56,750
Additions	474
Disposals	(140		)
Purchase price adjustments	3,873
Recruitment expense	(227		)
Amortization	(1,822		)
Balance at December 31, 2017	$	58,908

Additions during the eight months ended August 31, 2017 (Predecessor) includes $27.8 million from new acquisitions, primarily the acquisition of NSH. Approximately $26.9 million was assigned to management rights agreements and $0.1 million was assigned to non-compete agreements, with estimated weighted average amortization periods of 23 years and 3 years, respectively. Approximately $0.7 million was assigned to certificates of need and $0.1 million was assigned to Medicare licenses. Refer to Note 3. "Acquisitions and Developments" for a summary of acquisition activity.

Purchase price adjustments during the four months ended December 31, 2017 (Successor) includes net adjustments to preliminary amounts assigned as part of the acquisition of NSH, the application of pushdown accounting and other 2017 acquisitions. The adjustments included increases of $6.9 million to management rights agreements and $0.2 million to certificates of need, offset by a decrease of $3.2 million to non-compete agreements. Refer to Note 3. "Acquisitions and Developments" for a summary of acquisition activity.

Amortization expense for intangible assets was $1.8 million for the four months ended December 31, 2017 (Successor) and $6.0 million for the eight months ended August 31, 2017 (Predecessor). For the years ended December 31, 2016 (Predecessor) and 2015 (Predecessor), amortization expense for intangible assets was $9.6 million and $9.1 million, respectively.

Total estimated amortization expense for the next five years and thereafter related to intangible assets follows (in thousands):



2018	$	4,966
2019	4,576
2020	4,172
2021	3,730
2022	2,874
Thereafter	26,034
Total	$	46,352

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Long-Term Debt

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Long-Term Debt

A summary of long-term debt follows (in thousands):



	Successor		Predecessor
	December 31, 2017		December 31, 2016

2014 Revolver Loan	$	—	$	85,000
2014 First Lien Credit Agreement	—		932,000
2017 Senior Secured Credit Facilities:
Revolver	—		—
Term Loan ⁽¹⁾	1,280,532		—
Senior Unsecured Notes due 2021 ⁽²⁾	409,235		400,000
Senior Unsecured Notes due 2025	370,000		—
Subordinated Notes	—		1,000
Notes payable and secured loans	101,921		42,521
Capital lease obligations	27,594		13,996
Less: unamortized debt issuance costs and original issue discount	—		(32,274		)
Total debt	2,189,282		1,442,243
Less: Current maturities	58,726		27,822
Total long-term debt	$	2,130,556	$	1,414,421

⁽¹⁾ Includes unamortized fair value discount of $6.2 million as of December 31, 2017. See further discussion below.

⁽²⁾ Includes unamortized fair value premium of $9.2 million as of December 31, 2017. See further discussion below.

2014 Revolver Loan & 2014 First Lien Credit Agreement

On August 31, 2017 (Predecessor), the Company prepaid in full the outstanding principal of the 2014 Revolver Loan, a revolving credit facility entered into on November 3, 2014, and the 2014 First Lien Credit Agreement, a senior secured obligation of Surgery Center Holdings, Inc. entered into on November 3, 2014, with the proceeds from the 2017 Senior Secured Credit Facilities (as defined below). The total prepayment amount was $1.030 billion, which included $1.027 billion of outstanding principal and $3.0 million of accrued and unpaid interest, other fees and expenses. In connection with the prepayment, the Company recorded a debt extinguishment loss of $18.2 million, included in the loss on debt refinancing in the consolidated statement of operations for the eight months ending August 31, 2017 (Predecessor). The loss includes the partial write-off of unamortized debt issuance costs and discount related to the 2014 Revolver Loan and 2014 First Lien Credit Agreement and a portion of costs incurred with the 2017 Senior Secured Credit Facilities.

In September 2016, in connection with an amendment to the 2014 First Lien Credit Agreement, the Company recorded a loss on debt refinancing of $3.6 million, included in the accompanying consolidated statement of operations for the year ended December 31, 2016 (Predecessor).

2014 Second Lien Credit Agreement

The 2014 Second Lien Credit Agreement, entered into on November 3, 2014, was a senior secured obligation of Surgery Center Holdings, Inc.

In October 2015, the Company partially prepaid the outstanding principal of the 2014 Second Lien Credit Agreement. In connection with the partial prepayment, the Company recorded a debt extinguishment loss of $16.1 million, included in the loss on debt refinancing in the accompanying consolidated statement of operations for the year ended December 31, 2015 (Predecessor).

In March 2016, the Company prepaid in full the remaining outstanding principal of the 2014 Second Lien Credit Agreement, plus accrued and unpaid interest, with the proceeds of the issuance of the 2021 Unsecured Notes, defined below. In connection with the prepayment, the Company recorded a debt extinguishment loss of $8.3 million, included in the loss on debt refinancing in the accompanying consolidated statement of operations for the year ended December 31, 2016 (Predecessor).

2017 Senior Secured Credit Facilities

On August 31, 2017 (Predecessor), SP Holdco I, Inc. and Surgery Center Holdings, Inc., each a wholly-owned subsidiary of the Company, entered into a credit agreement (the “Credit Agreement”) providing for a $1.290 billion senior secured term loan (the “Term Loan”) and a $75.0 million revolving credit facility (the “Revolver” and, together with the Term Loan, the “2017 Senior Secured Credit Facilities”).

The Term Loan was fully drawn on August 31, 2017 (Predecessor) and the proceeds thereof were used to finance the consideration paid in the NSH Merger, to repay amounts outstanding under the Company’s then-existing 2014 First Lien Credit Agreement and 2014 Revolver Loan and amounts outstanding under the existing senior secured credit facilities of NSH, and to pay fees and expenses in connection with the foregoing and transactions related to the Transaction Agreements. The Revolver may be utilized for working capital, capital expenditures and general corporate purposes. Subject to certain conditions and requirements set forth in the Credit Agreement, the Company may request one or more additional incremental term loan facilities or one or more increases in the commitments under the Revolver. As of December 31, 2017 (Successor), the Company's availability on the Revolver was $71.9 million (including outstanding letters of credit of $3.1 million).

The Term Loan will mature on August 31, 2024 (or, if at least 50.0% of the 2021 Unsecured Notes (as defined below) shall have not either been repaid or refinanced with permitted indebtedness having a maturity date not earlier than six months after the maturity date of the Term Loan by no later than October 15, 2020, then October 15, 2020). The Revolver will mature on August 31, 2022 (or, if at least 50.0% of the 2021 Notes have not either been repaid or refinanced with permitted indebtedness having a maturity date not earlier than six months after the maturity date of the Term Loan by no later than October 15, 2020, then October 15, 2020).

The 2017 Senior Secured Credit Facilities bear interest at a rate per annum equal to (x) LIBOR plus a margin ranging from 3.00% to 3.25% per annum, depending on the Company's first lien net leverage ratio or (y) an alternate base rate (which will be the highest of (i) the prime rate, (ii) 0.5% per annum above the federal funds effective rate and (iii) one-month LIBOR plus 1.00% per annum (solely with respect to the Term Loan, the alternate base rate shall not be less than 2.00% per annum)) plus a margin ranging from 2.00% to 2.25% per annum. In addition, the Company is required to pay a commitment fee of 0.50% per annum in respect of unused commitments under the Revolver.

The Term Loan amortizes in equal quarterly installments of 0.25% of the aggregate original principal amount of the Term Loan (such amortization payments commenced in December 2017). The Term Loan is subject to mandatory prepayments based on excess cash flow for the applicable fiscal year that will depend on the first lien net leverage ratio as of the last day of the applicable fiscal year, as well as upon the occurrence of certain other events, as described in the Credit Agreement. There were no excess cash flow payments required as of December 31, 2017 (Successor).

With respect to the Revolver, the Company is required to comply with a maximum consolidated total net leverage ratio of 9.50:1.00, which covenant will be tested quarterly on a trailing four quarter basis only if, as of the last day of the applicable fiscal quarter the Revolver is drawn in an aggregate amount greater than 35% of the total commitments under the Revolver. Such financial maintenance covenant is subject to an equity cure. The Credit Agreement includes customary negative covenants restricting or limiting the ability of the Company and its restricted subsidiaries, to, among other things, sell assets, alter its business, engage in mergers, acquisitions and other business combinations, declare dividends or redeem or repurchase equity interests, incur additional indebtedness or guarantees, make loans and investments, incur liens, enter into transactions with affiliates, prepay certain junior debt, and modify or waive certain material agreements and organizational documents, in each case, subject to customary and other agreed upon exceptions. The Credit Agreement also contains customary affirmative covenants and events of default. As of December 31, 2017 (Successor), the Company was in compliance with the covenants contained in the Credit Agreement.

The 2017 Senior Secured Credit Facilities are guaranteed, on a joint and several basis, by SP Holdco I, Inc. and each of Surgery Center Holdings, Inc.'s current and future wholly-owned domestic restricted subsidiaries (subject to certain exceptions) (the “Subsidiary Guarantors”) and are secured by a first priority security interest in substantially all of Surgery Center Holdings, Inc.'s, SP Holdco I, Inc.'s and the Subsidiary Guarantors’ assets (subject to certain exceptions).

In connection with the Term Loan and Revolver, the Company recorded debt issuance costs and discount of $18.8 million and $9.4 million, respectively, in the Predecessor period, which were eliminated with the application of pushdown accounting.

In connection with the application of pushdown accounting, the Company remeasured and recorded the Term Loan at fair value using a measurement date of August 31, 2017. The fair value was based on a Level 2 computation using quoted prices for identical liabilities in inactive markets. As a result, the Company recorded a fair value discount of $6.5 million as of the measurement date, which is reported in the consolidated balance sheets as a direct deduction from the face amount the Term Loan. The Company amortizes the fair value discount to interest expense over the life of the Term Loan.

Senior Unsecured Notes due 2021

Effective March 31, 2016 (Predecessor), Surgery Center Holdings, Inc., issued $400.0 million in gross proceeds of senior unsecured notes due April 15, 2021 (the "2021 Unsecured Notes"). The 2021 Unsecured Notes bear interest at the rate of 8.875% per year, payable semi-annually on April 15 and October 15 of each year. The 2021 Unsecured Notes are a senior unsecured obligation of Surgery Center Holdings, Inc. and are guaranteed on a senior unsecured basis by each of Surgery Center Holdings, Inc.'s existing and future domestic wholly owned restricted subsidiaries that guarantees the 2017 Senior Secured Credit Facilities (subject to certain exceptions).

The Company may redeem up to 35% of the aggregate principal amount of the 2021 Unsecured Notes, at any time before April 15, 2018, with the net cash proceeds of certain equity offerings at a redemption price equal to 108.875% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the date of redemption, provided that at least 50% of the aggregate principal amount of the 2021 Unsecured Notes remain outstanding immediately after the occurrence of such redemption and such redemption occurs within 180 days of the date of the closing of any such qualified equity offering.

The Company may redeem the 2021 Unsecured Notes, in whole or in part, at any time prior to April 15, 2018 at a price equal to 100.000% of the principal amount to be redeemed plus an applicable make-whole premium, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Company may redeem the 2021 Unsecured Notes, in whole or in part, at any time on or after April 15, 2018, at the redemption prices set forth below (expressed as a percentage of the principal amount to be redeemed), plus accrued and unpaid interest, if any, to the date of redemption:



April 15, 2018 to April 14, 2019	106.656	%
April 15, 2019 to April 14, 2020	104.438	%
April 15, 2020 and thereafter	100.000	%

If Surgery Center Holdings, Inc., experiences a change in control under certain circumstances, it must offer to purchase the notes at a purchase price equal to 101.000% of the principal amount, plus accrued and unpaid interest to, but excluding, the date of repurchase. The change of control as discussed in Note 1. "Organization", did not trigger repurchase.

The 2021 Unsecured Notes contain customary affirmative and negative covenants, which among other things, limit the Company’s ability to incur additional debt, pay dividends, create or assume liens, effect transactions with its affiliates, guarantee payment of certain debt securities, sell assets, merge, consolidate, enter into acquisitions and effect sale and leaseback transactions.

In connection with the offering of the 2021 Unsecured Notes, the Company recorded debt issuance costs of $8.4 million in the Predecessor period, which were eliminated with the application of pushdown accounting.

In connection with the application of pushdown accounting, the Company remeasured and recorded the 2021 Unsecured Notes at fair value using a measurement date of August 31, 2017. The fair value was based on a Level 2 computation using quoted prices for identical liabilities in inactive markets. As a result, the Company recorded a fair value premium of $10.0 million as of the measurement date, which is reported in the consolidated balance sheets as a direct addition to the face amount the notes. The Company amortizes the fair value premium to interest expense over the life of the 2021 Unsecured Notes.

Senior Unsecured Notes due 2025

Effective June 30, 2017 (Predecessor), SP Finco, LLC, a wholly owned subsidiary of Surgery Center Holdings, Inc., issued $370.0 million in gross proceeds of senior unsecured notes due July 1, 2025 (the "2025 Unsecured Notes"), which gross proceeds were deposited in an escrow account (the “Escrow Account”) established at Wilmington Trust, National Association (in such capacity, the “Escrow Agent”) in the name of the trustee under the indenture governing the 2025 Unsecured Notes (the “2025 Unsecured Notes Indenture”) on behalf of the holders of the 2025 Unsecured Notes. The 2025 Unsecured Notes bear interest at the rate of 6.750% per year, payable semi-annually on January 1 and July 1 of each year, commencing on January 1, 2018.

In connection with the closing of the NSH Merger and the release of the proceeds from the Escrow Account, both of which occurred on August 31, 2017 (Predecessor), SP Finco, LLC merged with and into Surgery Center Holdings, Inc., with Surgery Center Holdings, Inc. surviving such merger and assuming, by operation of law, the rights and obligations of SP Finco, LLC under the 2025 Unsecured Notes and the indenture governing such notes. As of such time, the 2025 Unsecured Notes became guaranteed on a senior unsecured basis by each of Surgery Center Holdings, Inc.’s domestic wholly owned restricted subsidiaries that guarantees Surgery Center Holdings, Inc.’s senior secured credit facilities (subject to certain exceptions).

The Company may redeem up to 40% of the aggregate principal amount of the 2025 Unsecured Notes at any time prior to July 1, 2020, with the net cash proceeds of certain equity issuances at a redemption price equal to 106.750% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the date of redemption, provided that at least 50% of the aggregate principal amount of the 2025 Unsecured Notes remain outstanding immediately after the occurrence of such redemption and such redemption occurs within 180 days of the date of the closing of the applicable equity offering.

The Company may redeem the 2025 Unsecured Notes, in whole or in part, at any time prior to July 1, 2020, at a price equal to 100.000% of the principal amount to be redeemed plus the applicable premium, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Company may redeem the 2025 Unsecured Notes, in whole or in part, at any time on or after July 1, 2020, at the redemption prices set forth below (expressed as a percentage of the principal amount to be redeemed), plus accrued and unpaid interest, if any, to, but excluding, the date of redemption:



July 1, 2020 to June 30, 2021	103.375	%
July 1, 2021 to June 30, 2022	101.688	%
July 1, 2022 and thereafter	100.000	%

If Surgery Center Holdings, Inc. experiences a change in control under certain circumstances, it must offer to purchase the 2025 Unsecured Notes at a purchase price equal to 101.000% of the principal amount, plus accrued and unpaid interest to, but excluding, the date of repurchase.

The 2025 Unsecured Notes contain customary affirmative and negative covenants, which, among other things, limit the Company’s ability to incur additional debt, pay dividends, create or assume liens, effect transactions with its affiliates, guarantee payment of certain debt securities, sell assets, merge, consolidate, enter into acquisitions and effect sale and leaseback transactions.

In connection with the offering of the 2025 Unsecured Notes, the Company recorded debt issuance costs of $17.3 million in the Predecessor period, which were eliminated with the application of pushdown accounting.

Subordinated Notes

On August 3, 2017 the Company redeemed in whole a subordinated debt facility of $1.0 million with a maturity date of August 4, 2017 and an interest rate of 17.00% per annum, at a price equal 100% of the $1.0 million principal amount redeemed, plus accrued and unpaid interest.

Notes Payable and Secured Loans

Certain of the Company’s subsidiaries have outstanding bank indebtedness, which is collateralized by the real estate and equipment owned by the surgical facilities to which the loans were made. The various bank indebtedness agreements contain covenants to maintain certain financial ratios and also restrict encumbrance of assets, creation of indebtedness, investing activities and payment of distributions. At December 31, 2017 (Successor), the Company was in compliance with its covenants contained in the credit agreements. The Company and its subsidiaries had notes payable to financial institutions of $101.9 million and $42.5 million as of December 31, 2017 (Successor) and 2016 (Predecessor), respectively. The increase is primarily due to the acquisition of NSH.

Capital Lease Obligations

The Company is liable to various vendors for several property and equipment leases classified as capital leases. The carrying value of the leased assets was $16.2 million and $15.4 million as of December 31, 2017 (Successor) and 2016 (Predecessor), respectively.

Maturities

A summary of maturities for the Company's long-term debt, excluding unamortized fair value discount and premium discussed above, for the next five years and thereafter as of December 31, 2017 follows (in thousands):



2018	$	58,726
2019	36,857
2020	1,277,253
2021	411,748
2022	8,110
Thereafter	393,597
Total debt	$	2,186,291

Leases

12 Months Ended

Dec. 31, 2017

Leases [Abstract]

Leases

The Company leases office space and equipment for its surgical facilities, including surgical facilities under development. The lease agreements generally require the lessee, or the Company, to pay all maintenance, property taxes, utilities and insurance costs. The Company accounts for operating lease obligations and sublease income on a straight-line basis. Lease obligations paid in advance are recorded as prepaid rent and included in prepaid expenses and other current assets on the consolidated balance sheets. The difference between actual lease payments and straight-line lease expense over the initial lease term, excluding optional renewal periods, is recorded as deferred rent and included in other current liabilities and other long-term liabilities on the consolidated balance sheets.

Future minimum lease payments for non-cancellable operating and capital leases for the next five years and thereafter at December 31, 2017 follows (in thousands):



	Operating Leases		Capital Leases

2018	$	67,513	$	9,100
2019	67,136		7,404
2020	62,735		5,020
2021	56,558		3,505
2022	52,582		1,986
Thereafter	258,192		6,299
Total minimum payments	$	564,716	33,314
Less: imputed interest			(5,720		)
Capital lease obligations			$	27,594

The Company has various non-cancellable sub-lease arrangements. The total future minimum rentals to be received under these arrangements as of December 31, 2017 is $4.2 million.

Rental expense for operating leases was $27.8 million for the four months ended December 31, 2017 (Successor) and $39.2 million for the eight months ended August 31, 2017 (Predecessor). For the years ended December 31, 2016 (Predecessor) and 2015 (Predecessor), rental expense for operating leases was $47.3 million and $40.1 million, respectively. Included in these amounts, the Company incurred lease expense under operating lease agreements with physician investors who are related parties of $7.5 million for the four months ended December 31, 2017 (Successor), $9.8 million for the eight months ended August 31, 2017 (Predecessor), $14.4 million and $12.9 million for years ended December 31, 2016 and 2015, respectively.

Redeemable Preferred Stock

12 Months Ended

Dec. 31, 2017

Temporary Equity Disclosure [Abstract]

Redeemable Preferred Stock

On August 31, 2017, the Company issued 310,000 shares of Series A Preferred Stock to Bain at a purchase price of $1,000 per share for an aggregate purchase price of $310.0 million. The net proceeds from the Preferred Private Placement (as defined in Note 1. "Organization") were used to finance a portion of the NSH Merger.

The accrued value of the Series A Preferred Stock is convertible into shares of Common Stock at a price per share of Common Stock equal to $19.00, subject to certain adjustments as provided in the Certificate of Designations, Preferences, Rights and Limitations of the 10.00% Series A Convertible Perpetual Participating Preferred Stock of Surgery Partners, Inc. (the “Series A Certificate of Designation”), at any time at the option of the holder. In addition, the Company may require the conversion of all, but not less than all, of the Series A Preferred Stock pursuant to the terms and conditions of the Series A Certificate of Designation, after the second anniversary of the date of issuance, if the volume weighted average closing price of the Common Stock for any 20 out of 30 consecutive trading days prior to such date, equals or exceeds $42.00 per share.

The Company cannot redeem the Series A Preferred Stock prior to the fifth anniversary of its issuance and thereafter, may redeem all, but not less than all, of the Series A Preferred Stock for cash pursuant to and subject to the terms and conditions of the Series A Certificate of Designation. The holders of Series A Preferred Stock may cause the Company to redeem the Series A Preferred Stock upon the occurrence of certain change of control transactions of the Company or the Common Stock ceasing to be listed or quoted on a trading market. The Company adjusts the carrying amount of the Series A Preferred Stock to equal the redemption value at the end of each reporting period as if it were also the redemption date. Changes in the redemption value are recognized immediately as they occur.

The Series A Preferred Stock ranks senior to the Common Stock and any other capital stock of the Company with respect to dividends, redemption and any other rights upon the liquidation, dissolution or winding up of the Company, and the holders thereof are entitled to vote with the holders of Common Stock, together as a single class, on all matters submitted to a vote of the Company’s stockholders. In addition to participating in any dividends that may be declared with respect to the Common Stock on an as-converted basis, each share of Series A Preferred Stock accrues dividends daily at a dividend rate of 10.00%, compounding quarterly, and in any given quarter, subject to certain conditions, the Board of Directors of the Company may declare a cash dividend in an amount up to 50% of the amount of the dividend that has accrued and accumulated during such quarter through the end of such quarter, and the amount of any quarterly dividend paid in cash shall not compound on the applicable date and shall not be included in the accrued value of the Series A Preferred Stock. In the event of the Company’s liquidation, dissolution or winding-up (whether voluntary of involuntary), holders of Series A Preferred Stock will be entitled to receive out of the assets of the Company available for distribution to shareholders, after satisfaction of any liabilities and obligations to creditors of the Company, with respect to each Series A Preferred Share, an amount equal to the greater of (i) $1,000.00 per share, plus dividends compounded to date, plus dividends accrued but not yet compounded and (ii) the amount that a holder of one share of Common Stock would receive, assuming the Series A Preferred Stock had converted into shares of Common Stock.

In connection with the issuance of Series A Preferred Stock in the Preferred Private Placement, the Company incurred issuance costs of $18.3 million in the Predecessor period, which were eliminated with the application of pushdown accounting.

A summary of activity related to the redeemable preferred stock for the period from September 1, 2017 to December 31, 2017 (Successor) follows (in thousands):



Successor
Balance at September 1, 2017	$	310,000
Dividends accrued	10,481
Cash dividends declared	(5,241		)
Mark to redemption adjustment	15,566
Balance at December 31, 2017	$	330,806

Cash dividends declared but unpaid at December 31, 2017 were $3.9 million, and were included in other current liabilities in the consolidated balance sheet. The aggregate and per share amounts of unpaid cumulative preferred dividends as of December 31, 2017 were $9.2 million and $29.56, respectively.

Earnings Per Share

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Earnings Per Share

Basic and diluted earnings per share are calculated in accordance with ASC 260, Earnings Per Share, based on the weighted-average number of shares outstanding in each period and dilutive stock options, unvested shares and warrants, to the extent such securities exist and have a dilutive effect on earnings per share. Beginning in the Successor period, in connection with the issuance of the Series A Preferred Stock, the Company began computing basic and diluted earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation method that determines earnings per share for common shares and participating securities according to their participation rights in dividends and undistributed earnings. Refer to Note 9. "Redeemable Preferred Stock", for further disclosure of the terms and conditions, including the participation rights, of the Series A Preferred Stock.

A reconciliation of the numerator and denominator of basic and diluted earnings per share follows (in thousands except share and per share amounts):



	Successor			Predecessor
	September 1 to December 31,			January 1 to August 31,			Year Ended December 31,
	2017			2017			2016		2015

Numerator:
Net (loss) income attributable to Surgery Partners, Inc.	$	(41,316	)	$	(11,669	)	$	9,453	$	1,429
Less: amounts allocated to participating securities⁽¹⁾	10,481			—			—		—
Less: mark to redemption adjustment	15,566			—			—		—
Net (loss) income attributable to common stockholders	$	(67,363	)	$	(11,669	)	$	9,453	$	1,429

Denominator:
Weighted average shares outstanding- basic	48,319,193			48,121,404			48,018,944		36,066,233
Effect of dilutive securities ⁽²⁾	—			—			171,794		1,398,154
Weighted average shares outstanding- diluted	48,319,193			48,121,404			48,190,738		37,464,387

Earnings (loss) per share:
Basic	$	(1.39	)	$	(0.24	)	$	0.20	$	0.04
Diluted ⁽²⁾	$	(1.39	)	$	(0.24	)	$	0.20	$	0.04

Securities outstanding not included in the computation of diluted (loss) earnings per share as their effect is antidilutive:
Stock options	—			—			—		—
Restricted shares	62,850			105,944			—		—
Convertible preferred stock	—			N/A			N/A		N/A

⁽¹⁾ Amounts allocated to participating securities includes dividends accrued during the Successor period for the Series A Preferred Stock. The Series A Preferred Stock does not participate in undistributed losses. There were no participating securities during the Predecessor periods.

⁽²⁾The impact of potentially dilutive securities for the four months ended December 31, 2017 (Successor) and the eight months ended August 31, 2017 (Predecessor), were not considered because the effect would be anti-dilutive in each of those periods.

Share Repurchase Transactions

On December 15, 2017, the Board of Directors authorized a share repurchase program of up to $50.0 million of the Company's issued and outstanding common stock from time to time. The timing and size of repurchases will be determined based on market conditions and other factors. The authorization does not obligate the repurchase any shares and the Company may repurchase shares of common stock at any time without prior notice. The share repurchases will be made in accordance with applicable securities laws in open market or privately negotiated transactions. The authorization does not have a specified expiration date, and the share repurchase program may be suspended, recommenced or discontinued at any time or from time to time without prior notice.

During December 2017, the Company repurchased 180,664 shares of its common stock stock at an average price of $11.12 per share through market purchases. At December 31, 2017, the Company had $48.0 million of repurchase authorization available under the December 2017 authorization.

During the first quarter of 2018, through the date of this report, the Company repurchased 156,818 shares of its common stock stock at an average price of $12.64 per share through market purchases. At March 15, 2018, the Company had $46.0 million of repurchase authorization available under the December 2017 authorization.

Income Taxes and Tax Receivable Agreement

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes and Tax Receivable Agreement

Income Taxes

The Company uses the asset and liability method to account for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If a net operating loss ("NOL") carryforward exists, the Company makes a determination as to whether that NOL carryforward will be utilized in the future. A valuation allowance is established for certain net operating loss carryforwards when their recoverability is deemed to be uncertain. The carrying value of the net deferred tax assets assumes that the Company will be able to generate sufficient future taxable income in certain tax jurisdictions, based on estimates and assumptions. If these estimates and related assumptions change in the future, the Company may be required to adjust its deferred tax valuation allowances.

The Company, or one or more of its subsidiaries, files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal income tax examinations for years prior to 2014 or state income tax examinations for years prior to 2013.

The Company and certain of its subsidiaries file a consolidated federal income tax return. The partnerships, limited liability companies, and certain non-consolidated physician practice corporations also file separate income tax returns. The Company's allocable portion of each partnership's and limited liability company's income or loss is included in taxable income of the Company. The remaining income or loss of each partnership and limited liability company is allocated to the other owners.

The Company made income tax payments of $0.5 million and $0.6 million for the four months ended December 31, 2017 (Successor) and eight months ended August 31, 2017 (Predecessor), respectively. Income tax payments were $0.7 million and $1.1 million for the years ended December 31, 2016 and 2015, respectively.

Income tax expense (benefit) is comprised of the following (in thousands):



	Successor			Predecessor
	September 1 to December 31,			January 1 to August 31,			Year Ended December 31,
	2017			2017			2016			2015

Current:
Federal	$	(111	)	$	—		$	(31	)	$	—
State	990			614			244			909
Deferred:
Federal	77,472			(17,288		)	7,326			(132,311		)
State	(6,712		)	(1,415		)	(444		)	(17,580		)
Total income tax expense (benefit)	$	71,639		$	(18,089	)	$	7,095		$	(148,982	)

A reconciliation of the provision for income taxes as reported in the consolidated statements of operations and the amount of income tax expense (benefit) computed by multiplying consolidated income (loss) in each year by the U.S. federal statutory rate of 35% follows (in thousands):



	Successor			Predecessor
	September 1 to December 31,			January 1 to August 31,			Year Ended December 31,
	2017			2017			2016			2015

Tax expense (benefit) at U.S.federal statutory rate	$	24,485		$	4,315		$	32,263		$	(26,648	)
State income tax, net of U.S. federal tax benefit	1,685			(456		)	(86		)	1,059
Change in valuation allowance	529			1,324			354			(137,721		)
Net income attributable to non-controlling interests	(13,872		)	(14,731		)	(26,470		)	(24,996		)
Changes in measurement of uncertain tax positions	(191		)	20			(262		)	(10		)
Stock option compensation	306			37			(200		)	—
Differences related to divested facilities	(429		)	(1,708		)	—			—
Nondeductible transaction costs	2,058			(977		)	—			3,442
Tax return reconciling differences	—			(316		)	1,635			(1,574		)
Change in effective tax rate	64,343			(825		)	—			(2,143		)
TRA liability	(7,404		)	(4,782		)	(327		)	39,428
Other	129			10			188			181
Total income tax expense (benefit)	$	71,639		$	(18,089	)	$	7,095		$	(148,982	)

The components of temporary differences and the approximate tax effects that give rise to the Company’s net deferred tax asset are as follows (in thousands):



	Successor			Predecessor
	December 31, 2017			December 31, 2016

Deferred tax assets:
Medical malpractice liability	$	3,236		$	4,194
Accrued vacation and incentive compensation	2,125			1,112
Net operating loss carryforwards	137,794			158,796
Allowance for bad debts	2,545			8,343
Capital loss carryforwards	3,024			2,785
Deferred rent	—			1,371
Depreciation on property and equipment	—			530
Deferred financing costs	17,004			—
TRA liability	1,042			4,542
Other deferred assets	4,961			4,879
Total gross deferred tax assets	171,731			186,552
Less: Valuation allowance	(11,032		)	(7,358		)
Total deferred tax assets	160,699			179,194
Deferred tax liabilities:
Deferred financing costs	—			(8,797		)
Depreciation on property and equipment	(12,098		)	—
Amortization of intangible assets	(12,441		)	(15,241		)
Basis differences of partnerships and joint ventures	(2,399		)	(68,160		)
Deferred rent	(717		)	—
Other deferred liabilities	(725		)	(3,203		)
Total deferred tax liabilities	(28,380		)	(95,401		)
Net deferred tax assets	$	132,319		$	83,793

The Company had federal net operating loss carryforwards of $507.4 million as of December 31, 2017, which expire between 2025 and 2037 and state net operating loss carryforwards of $619.6 million as of December 31, 2017, which expire between 2018 and 2037. The Company had capital loss carryforwards of $12.6 million as of December 31, 2017, which expire between 2018 and 2022. The Company had federal and state credit carryforwards of $1.1 million as of December 31, 2017. The federal credits do not expire, and the state credits expire between 2018 and 2029.

The Company has recorded a valuation allowance against deferred tax assets at December 31, 2017 and 2016 totaling $11.0 million and $7.4 million, respectively, which represents an increase of $3.6 million. The valuation allowance continues to be provided for certain deferred tax assets for which the Company believes it is more likely than not that the tax benefits will not be realized, which are primarily certain state net operating losses and capital loss carryforwards.

Included in the increase in the valuation allowance for the year ended December 31, 2017 was an increase of approximately $0.4 million that was recorded to additional-paid-in-capital as the result of the tax effect of the disposals of shares of non-controlling interests. Also included in the increase in the valuation allowance was an increase of approximately $0.3 million that was recorded to goodwill related to certain deferred tax assets acquired during the year. Approximately $1.8 million of the valuation allowance as of December 31, 2017 is recorded against deferred tax assets that, if subsequently recognized, will be credited directly to contributed capital.

A reconciliation of the beginning and ending liability for gross unrecognized tax benefits for the years ended December 31, 2017 and 2016 is as follows (in thousands):



	Successor			Predecessor
	December 31, 2017			December 31, 2016

Unrecognized tax benefits at beginning of year	$	1,061		$	1,403
Additions for acquired positions	36			—
Additions for tax positions of prior years	—			60
Reductions for tax positions of prior year	(407		)	(398		)
Settlements	—			(4		)
Unrecognized tax benefits at end of year	$	690		$	1,061

The Company recognizes interest and penalties related to uncertain tax positions in its provision for income taxes in the consolidated statements of operations. For the years ended December 31, 2017 and 2016, the Company had approximately $0.1 million and $0.2 million, respectively, of accrued interest and penalties related to uncertain tax positions. The total amount of accrued liabilities related to uncertain tax positions that would affect the Company's effective tax rate, if recognized, is $0.2 million and $0.3 million as of December 31, 2017 and 2016, respectively. The reserves are included in long-term taxes payable and long-term deferred tax assets in the consolidated balance sheet as of December 31, 2017.

The Tax Cuts and Jobs Act was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21%, allows for 100% expensing of certain capital expenditures, and will limit interest expense deductions beginning in 2018. As of December 31, 2017, the Company has not completed its accounting for the tax effects of enactment of the Act; however, in certain cases, as described below, the Company has made a reasonable estimate of the effects on existing deferred tax balances. In other cases, the Company has not been able to make a reasonable estimate and continues to account for those items based on existing accounting under ASC 740, and the provisions of the tax laws that were in effect immediately prior to enactment. In all cases, the Company will continue to make and refine its calculations as additional analysis is completed. In addition, estimates may also be affected as the Company gains a more thorough understanding of the tax law.

The Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, the Company is still analyzing certain aspects of the Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The most significant component of the uncertainty relates to the state tax impact of the federal changes and how the states will or will not adopt federal changes. The effect on the Company will primarily be related to its state net operating losses and related valuation allowances. The provisional amount recorded related to the remeasurement of the deferred tax balance was $64.0 million, which is included as a component of income tax expense.

The Company has not made sufficient progress on the analysis of the 100% expensing that may be claimed at certain partnership entities in their 2017 income tax returns for applicable capital expenditures, and the effects that would have on the Company's deferred tax assets and liabilities. The temporary differences related to these amounts would adjust the Company's deferred tax assets and liabilities related to partnership differences and net operating losses, but would likely have an immaterial net effect on the overall deferred tax asset recorded in the financial statements.

Tax Receivable Agreement

On May 9, 2017, the Company and H.I.G., in its capacity as the stockholders representative, entered into an agreement to amend that certain Income Tax Receivable Agreement, dated September 30, 2015 (as amended, the “TRA”), by and between the Company, H.I.G. (in its capacity as the stockholders representative) and the other parties referred to therein, which amendment became effective on August 31, 2017. The TRA was initially entered into in connection with the reorganization undertaken to facilitate the Company’s initial public offering. Pursuant to the amendment to the TRA, the Company agreed to make payments to H.I.G. in its capacity as the stockholders representative pursuant to a fixed payment schedule. The amounts payable under the TRA are calculated as the product of (i) an annual base amount and (ii) the maximum corporate federal income tax rate for the applicable year plus three percent. The amounts payable under the TRA are related to the Company’s projected realized tax savings over the next six years and are not dependent on the Company’s actual tax savings over such period. The calculation of amounts payable pursuant to the TRA is thus dependent on the maximum corporate federal income tax rate. To the extent that the Company is unable to make payments under the TRA and such inability is a result of the terms of credit agreements and other debt documents that are materially more restrictive than those existing as of September 30, 2015, such payments will be deferred and will accrue interest at a rate of LIBOR plus 500 basis points until paid. If the terms of such credit agreements and other debt documents cause the Company to be unable to make payments under the TRA and such terms are not materially more restrictive than those existing as of September 30, 2015, such payments will be deferred and will accrue interest at a rate of LIBOR plus 300 basis points until paid.

As a result of the amendment to the TRA, the Company was required to value the liability under the TRA by discounting the fixed payment schedule using the Company’s incremental borrowing rate. During the eight months ended August 31, 2017 (Predecessor), the Company recognized a reduction in the carrying value of the liability under the TRA of $43.9 million, with $15.3 million of the reduction recorded to a gain on amendment of TRA and $28.6 million recorded as a reduction to the goodwill recorded in connection with the application of pushdown accounting related to the change of control (discussed in Note 1. "Organization").

As a result of the reduction in the corporate tax rate from the Tax Cuts and Jobs Act discussed above, the Company remeasured the value of the liability under the TRA pursuant to the calculation terms as described above. During the four months ended December 31, 2017 (Predecessor), the Company recognized a reduction in the carrying value of the liability under the TRA of $25.3 million, included as a tax receivable agreement benefit in the consolidated statement of operations. Assuming the Company's tax rate is 24%, calculated as the maximum corporate federal tax rate plus three percent, throughout the remaining term of the TRA, the Company estimates the total remaining amounts payable under the TRA as of December 31, 2017 will be approximately $65.1 million. The carrying value of the liability under the TRA, reflecting the discount as discussed above, was $44.3 million as of December 31, 2017.

Prior to the remeasurement at the lower corporate tax rate, but subsequent to the effectiveness of the amendment discussed above, the Company estimated that the total amounts payable under the TRA would be approximately $120.5 million. Prior to the effectiveness of the amendment to the TRA, the amounts payable under the TRA varied depending upon a number of factors, including the amount, character and timing of the taxable income of Surgery Partners, Inc. The Company estimated the total amounts payable would be approximately $123.4 million, if the tax benefits of related deferred tax assets were ultimately realized. The amounts payable were recognized during 2015 in conjunction with the release of the Company's valuation allowance recorded against the deferred tax assets.

On September 8, 2017 (Successor), in connection with the resignation of the Company's former Chief Executive Officer, Michael Doyle, Mr. Doyle entered into a TRA Waiver and Assignment Agreement (the “CEO TRA Assignment Agreement”) with the Company, pursuant to which the Company accepted the assignment of 50% of Mr. Doyle’s (and his affiliates’) interest in future payments to which such parties were entitled pursuant to the TRA, in exchange for an upfront payment of approximately $5.1 million, in the aggregate, as set forth in the CEO TRA Assignment Agreement. On September 15, 2017 (Successor), certain of the Company’s employees entered into TRA Waiver and Assignment Agreements with the Company (collectively, the “Employee TRA Assignment Agreements” and together with the CEO TRA Assignment Agreement, the “TRA Assignment Agreements”), pursuant to which the Company made upfront payments of approximately $4.8 million in the aggregate, in exchange for the assignment of 100% of each such employee’s interest in future payments to which such employee was entitled pursuant to the TRA. During the four months ended December 31, 2017 (Successor), the Company recognized an aggregate gain of $1.1 million as a result of the TRA Assignment Agreements.

Equity-Based Compensation

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity-Based Compensation

Prior to the Reorganization, the Surgery Center Holdings, LLC’s ("Holdings LLC") Amended and Restated Limited Liability Company Agreement, dated December 24, 2009, provided, from time to time, as approved by the Holdings LLC's Board, for the issuance of a subordinate class of the Holdings LLC's nonvoting membership units to certain key persons, as defined, of the Company or its subsidiaries.

In April 2013, the Company modified the terms of the 2010 awards to allow for additional vesting in 2013 of its share-based awards with time-vesting conditions. In November 2014, the Holdings LLC issued to certain executives of Symbion who became employees of the Company following the Company’s acquisition of Symbion an additional 1,300,000 unvested B-Units, which are subject to vesting conditions to occur through November 2019.

Prior to the Reorganization, in the event of employee termination, the B-Units were subject to a 90-day repurchase option. Upon termination, all unvested B-Units were effectively forfeited. If the employee was terminated for cause, as defined, or resigned prior to the expiration of certain tenure periods specified in such employee’s agreement, the repurchase price for each vested B-Unit was zero, and was deemed automatically repurchased by the Company. The repurchase price for vested B-Units, should the Company elect to exercise the repurchase option, was at fair market value, as defined. If the Company did not exercise the repurchase option, the employee owned the vested B-Units pursuant to the Holdings LLC's LLC Agreement, which included restrictions on transfer, among other provisions. The fair value of each Holdings LLC issued B-Unit was estimated on the date of grant.

In September 2015, the Company adopted the Surgery Partners, Inc. 2015 Omnibus Incentive Plan ("2015 Omnibus Incentive Plan") from which all equity-based awards will be granted. Under this plan, the Company can grant stock options, SARs, restricted stock, unrestricted stock, stock units, performance awards, cash awards and other awards convertible into or otherwise based on shares of its common stock. As of December 31, 2017, 4,815,700 shares were authorized to be granted under the 2015 Omnibus Incentive Plan and 3,716,809 were available for future equity grants.

Restricted Share-Based Awards

During the four months ended December 31, 2017 (Successor) and the eight months ended August 31, 2017 (Predecessor), the Company granted 112,107 and 251,904 restricted stock awards, respectively, to certain officers, employees and non-employee directors in accordance with the 2015 Omnibus Incentive Plan. The Company granted 384,629 and 569,114 restricted stock awards during the years ended December 31, 2016 (Predecessor) and 2015 (Predecessor), respectively. Vesting and payment of these restricted stock awards are generally subject to continuing service of the employee or non-employee director over the ratable vesting periods beginning one year from the date of grant to three or five years after the date of grant. The fair values of these restricted stock units were determined based on the closing price of the Company’s common stock on the trading date immediately prior to the grant date.

During the eight months ended August 31, 2017 (Predecessor) and the year ended December 31, 2016 (Predecessor) the Company granted 232,242 and 292,147 performance-based restricted stock units, respectively, subject to the achievement of a combination of performance conditions. There were no grants during the four months ended December 31, 2017 (Successor) and the year ended December 31, 2015 (Predecessor). In addition to the achievement of the performance conditions, these performance-based restricted stock units are generally subject to the continuing service of the employee over the ratable vesting period from the earned date continuing for two years. The performance condition for the targeted performance-based restricted stock units granted during the eight months ended August 31, 2017 (Predecessor) is based on the Company’s achievement of annually established targets for adjusted earnings per share for 2017. For these restricted stock units, the number of shares payable at the end of the performance periods ranges from 0% to 150% of the targeted units based on the Company’s actual performance and/or market conditions results as compared to the targets. The performance condition for the targeted performance-based restricted stock units granted during the year ended December 31, 2016 (Predecessor) is based on the Company’s actual adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”). These stock units are not considered outstanding until earned. During the eight months ended August 31, 2017 (Predecessor), 136,550 of the restricted stock units granted were deemed to have been earned. No additional units granted were deemed to have been earned during the four months ended December 31, 2017 (Successor).

Additionally, during the four months ended December 31, 2017 (Successor), the Company granted 215,823 leverage performance restricted stock units subject to the achievement of a combination of market conditions. There were no grants during the eight months ended August 31, 2017 (Predecessor) or the years ended December 31, 2016 (Predecessor) and 2015 (Predecessor). In addition to the achievement of the market conditions, these leverage performance units are generally subject to the continuing service of the employee over the ratable vesting period from the performance period end date continuing for three years. The market condition for the leverage performance restricted stock units granted during the four months ended December 31, 2017 (Successor) is based on the Company’s three-year annualized total shareholder return relative to the companies making up the S&P Composite 1500 Health Care Index as of the grant date. These stock units are not considered outstanding until earned. During the four months ended December 31, 2017 (Successor), none of the leverage performance restricted stock units granted were deemed to have been earned.

For these restricted stock units, the number of shares payable at the end of the vesting periods ranges from 0% to 500% of the targeted units based on the Company’s actual performance and/or market conditions results as compared to the targets. The fair values of these restricted stock units were determined based on a combination, where applicable, of the closing price of the Company’s common stock on the trading date immediately prior to the grant date for units subject to performance conditions, or at its Monte-Carlo simulation value for units subject to market conditions. The Company recognizes compensation expense for the portion of the targeted performance-based restricted stock units subject to market conditions even if the condition is never satisfied. However, if the performance conditions are not met for the portion of the targeted performance-based restricted stock units subject to such performance conditions, no compensation expense will be recognized, and any previously recognized compensation expense will be reversed. Forfeitures are recognized as incurred.

Restricted Share-Based Activity

All units and per unit amounts in these consolidated financial statements and notes to the consolidated financial statements reflect the Reorganization that occurred in September 2015 (see Note 1). A summary of non-vested restricted share-based activity for the years ended December 31, 2017, 2016, and 2015 follows:



	Unvested Shares		Weighted Average Grant Date Fair Value
Predecessor
Outstanding at January 1, 2015	1,242,065		$	1.96
Granted/Earned	569,114		6.31
Vested	(1,643,525	)	3.79
Outstanding at December 31, 2015	167,654		$	2.53
Granted/Earned	384,629		15.09
Forfeited/Canceled	(53,003	)	11.85
Vested	(37,038	)	6.31
Outstanding at December 31, 2016	462,242		$	3.72
Granted/Earned	388,454		18.40
Forfeited/Canceled	(67,771	)	18.01
Vested	(169,881	)	10.29
Outstanding at August 31, 2017	613,044		$	16.02



Successor
Outstanding at September 1, 2017	613,044		$	16.02
Granted/Earned	112,107		11.15
Forfeited/Canceled	(54,622	)	10.94
Vested	(96,073	)	17.03
Outstanding at December 31, 2017	574,456		$	15.95

Stock Options

The Company did not grant any stock options during the year ended December 31, 2017. During the years ended December 31, 2016 and 2015, the Company granted options to purchase shares of the Company’s common stock to certain directors in accordance the 2015 Omnibus Incentive Plan. Options to purchase shares are granted with an exercise price equal to the fair market value of the Company’s common stock on the day of grant, based on the closing price of the Company’s common stock on the trading date immediately prior to the grant date, and become ratably exercisable beginning one year from the date of grant to three years after the date of grant. Forfeitures are recognized as incurred.

Option Valuation

In applying the Black-Scholes-Merton option pricing model, the Company used the following assumptions:


▪	Risk-free interest rate. The risk-free interest rate is used as a component of the fair value of stock options to take into account the time value of money. For the risk-free interest rate, the Company uses the implied yield on United States Treasury zero-coupon issues with a remaining term equal to the expected life, in years, of the options granted.

▪

Expected volatility. Volatility, for the purpose of share-based compensation, is a measurement of the amount that a share price has fluctuated. Expected volatility involves reviewing historical volatility and determining what, if any, change the share price will have in the future. The Company used historical stock price information of certain peer group companies for a period of time equal to the expected option life period to determine estimated volatility.


▪	Expected life, in years. A clear distinction is made between the expected life of an option and the contractual term of the option. The expected life of an option is considered the amount of time, in years, that an option is expected to be outstanding before it is exercised. Whereas, the contractual term of the stock option is the term an option is valid before it expires.


▪	Expected dividend yield. Since issuing dividends will affect the fair value of a stock option, GAAP requires companies to estimate future dividend yields or payments. The Company has not historically issued dividends and does not intend to issue dividends in the future. As a result, the Company does not apply a dividend yield component to its valuation.

The following table sets forth the assumptions used by the Company to estimate the fair value of options granted in 2016 and 2015 under the 2015 Omnibus Incentive Plan:



Expected volatility		29% - 43%
Risk-free interest rate		0.54% - 1.36%
Expected dividends		—
Average expected term (years)		2.56
Fair value of stock options granted		$2.64 - $5.74

The estimated fair value of options is amortized to expense on a straight-line basis over the options’ vesting period.

Stock Option Activity

A summary of stock option activity for the years ended December 31, 2017, 2016, and 2015 follows:



	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)
Predecessor
Outstanding at January 1, 2015	—
Granted	8,488		$	20.03	3.0
Exercised	—
Forfeited	—
Outstanding at December 31, 2015	8,488		$	20.03	3.0
Granted	7,779		17.99		1.6
Exercised	—
Forfeited	—
Outstanding at December 31, 2016	16,267		$	19.05	1.8
Granted	—
Exercised	(3,580	)	15.36
Forfeited	—
Outstanding at August 31, 2017	12,687		$	20.10	1.5



Successor
Outstanding at September 1, 2017	12,687		$	20.10	1.5
Granted	—
Exercised	—
Forfeited	—
Outstanding at December 31, 2017⁽¹⁾	12,687		$	20.10	1.2

⁽¹⁾ Of the outstanding options, 7,058 were exercisable as of December 31, 2017 (Successor).

Other information pertaining to equity-based compensation

At December 31, 2017 (Successor), unrecognized compensation cost related to unvested shares was approximately $6.6 million. Unrecognized compensation cost will be expensed annually based on the number of shares that vest during the year.

The Company records equity-based compensation expense to recognize the fair value of the restricted shares that vest and stock options granted. During the four months ended December 31, 2017 (Successor) and the eight months ended August 31, 2017 (Predecessor), the Company recorded equity-based compensation expense of $1.9 million and $3.7 million, respectively. The Company recorded equity-based compensation expense of $2.0 million and $7.5 million during the years ended December 31, 2016 (Predecessor) and 2015 (Predecessor), respectively. In connection with the IPO, 1,632,626 restricted shares immediately vested which resulted in accelerated vesting of $6.2 million which is included within the $7.5 million of equity-based compensation expense for the year ended December 31, 2015 (Predecessor).

Employee Benefit Plans	12 Months Ended
Employee Benefit Plans	Dec. 31, 2017
Retirement Benefits [Abstract]
Employee Benefit Plans	Employee Benefit Plans Surgery Partners 401(k) Plan The Surgery Partners 401(k) Plan is a defined contribution plan whereby certain employees who have completed at least one month of service, including at least one hour of service during that period of time, are eligible to participate. Employees may enroll in the plan immediately upon completion of the minimum service requirement. The Surgery Partners 401(k) Plan allows eligible employees to make contributions of varying percentages or flat dollar amounts of their annual compensation, up to the maximum allowable amounts by the Internal Revenue Service ("IRS"). Eligible employees may or may not receive a match by the Company of their contributions. Employer contributions vest incrementally over a period of five years. The Company's contributions were $2.3 million for the four months ended December 31, 2017 (Successor), $2.8 million for the eight months ended August 31, 2017 (Predecessor). For the years ended December 31, 2016 and 2015, contributions were $5.1 million and $2.2 million, respectively. Supplemental Executive Retirement Savings Plan In connection with the Symbion acquisition, the Company acquired and continues to maintain a supplemental executive retirement savings plan (the "SERP") for certain former Symbion executives. The SERP provides supplemental retirement savings alternatives to eligible officers and key employees of the Company by allowing participants to defer portions of their compensation. Under the SERP, eligible employees may enroll in the plan before December 31 to be entered in the plan the following year. Eligible employees may defer into the SERP up to 25% of their normal period payroll and up to 50% of their annual bonus. If the enrolled employee contributes a minimum of 2% of his or her base salary into the SERP, the Company will contribute 2% of the enrolled employee’s base salary to the plan and has the option of contributing additional amounts. Periodically, the enrolled employee’s deferred amounts are transferred to a plan administrator. The plan administrator maintains separate non-qualified accounts for each enrolled employee to track deferred amounts. On May 1 of each year, the Company is required to make its contribution to each enrolled employee’s account. See Note 2. "Significant Accounting Policies" for information about the fair value of the assets and liabilities in the SERP.

Related Party Transactions	12 Months Ended
Related Party Transactions	Dec. 31, 2017
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions On December 24, 2009, the Company and Bayside Capital, Inc. (or "Bayside"), an affiliate of H.I.G. Capital, LLC (or "H.I.G."), entered into a Management and Investment Advisory Services Agreement ("Management Agreement") pursuant to which the Company received certain management, consulting and financial advisory services. The Management Agreement was terminated upon completion of the IPO in 2015. Prior to termination, fees related to the Management Agreement of $3.0 million were included as general and administrative expense in the accompanying consolidated statements of operations for the year ended December 31, 2015. As a result of the IPO, the Company further paid Bayside a transaction fee pursuant to the Management Agreement of $5.4 million during the year ended December 31, 2015.

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Professional, General and Workers' Compensation Liability Risks The Company is subject to claims and legal actions in the ordinary course of business, including claims relating to patient treatment, employment practices and personal injuries. To cover these claims, the Company maintains general liability and professional liability insurance in excess of self-insured retentions through third party commercial insurance carriers in amounts that management believes is sufficient for the Company's operations, although, potentially, some claims may exceed the scope of coverage in effect. The professional and general insurance coverage is on a claims-made basis. Workers' compensation insurance is on an occurrence basis. Plaintiffs in these matters may request punitive or other damages that may not be covered by insurance. The Company is not aware of any such proceedings that would have a material adverse effect on the Company's business, financial position, results of operations or liquidity. Laws and Regulations Laws and regulations governing the Company's business, including those relating to the Medicare and Medicaid programs, are complex and subject to interpretation. These laws and regulations govern every aspect of how the Company's surgical facilities conduct their operations, from licensing requirements to how and whether the Company's facilities may receive payments pursuant to the Medicare and Medicaid programs. Compliance with such laws and regulations can be subject to future government agency review and interpretation as well as legislative changes to such laws. Noncompliance with such laws and regulations may subject the Company to significant regulatory action including fines, penalties, and exclusion from the Medicare, Medicaid and other federal healthcare programs. From time to time, governmental regulatory agencies will conduct inquiries of the Company's practices, including, but not limited to, the Company's compliance with federal and state fraud and abuse laws, billing practices and relationships with physicians. It is the Company's current practice and future intent to cooperate fully with such inquiries. The Company is not aware of any such inquiry that would have a material adverse effect on the Company's business, financial position, results of operations or liquidity. In addition, on October 23, 2017, the Company received a civil investigative demand (“CID”) from the federal government under the False Claims Act (“FCA”) for documents and information dating back to January 1, 2010 relating to the medical necessity of certain drug tests conducted by the Company’s physicians and submitted to laboratories owned and operated by the Company. The Company intends to respond to the CID and cooperate with the U.S. Attorney’s Office in connection with the FCA investigation. Acquired Facilities The Company, through its wholly-owned subsidiaries or controlled partnerships and limited liability companies, has acquired and will continue to acquire surgical facilities with prior operating histories. Such facilities may have unknown or contingent liabilities, including liabilities for failure to comply with healthcare laws and regulations, such as billing and reimbursement, fraud and abuse and similar anti-referral laws. Although the Company attempts to assure that no such liabilities exist, obtain indemnification from prospective sellers covering such matters and institute policies designed to conform centers to its standards following completion of acquisitions, there can be no assurance that the Company will not become liable for past activities that may later be asserted to be improper by private plaintiffs or government agencies. There can be no assurance that any such matter will be covered by indemnification or, if covered, that the liability sustained will not exceed contractual limits or the financial capacity of the indemnifying party. The Company cannot predict whether federal or state statutory or regulatory provisions will be enacted that would prohibit or otherwise regulate relationships which the Company has established or may establish with other healthcare providers or have materially adverse effects on its business or revenues arising from such future actions. Management believes, however, that it will be able to adjust the Company's operations so as to be in compliance with any statutory or regulatory provision as may be applicable. Potential Physician Investor Liability A majority of the physician investors in the partnerships and limited liability companies which operate the Company's surgical facilities carry general and professional liability insurance on a claims-made basis. Each partnership or limited liability company may, however, be liable for damages to persons or property arising from occurrences at the surgical facilities. Although the various physician investors and other surgeons generally are required to obtain general and professional liability insurance with tail coverage that extends beyond the period of any claims-made policies, such individuals may not be able to obtain coverage in amounts sufficient to cover all potential liability. Since most insurance policies contain exclusions, the physician investors will not be insured against all possible occurrences. In the event of an uninsured or underinsured loss, the value of an investment in the partnership interests or limited liability company membership units and the amount of distributions could be adversely affected. Contingent Consideration Pursuant to a purchase agreement dated December 24, 2009 (“the Purchase Agreement”), the Company acquired controlling interests in 36 business entities in various Florida locations which operate freestanding ASCs and provided anesthesia and pain management services (“the 2009 Acquisition”). The Purchase Agreement provided for maximum potential contingent consideration of up to $10.0 million based on operating results subsequent to the acquisition for the period from January 1, 2010 to December 31, 2010. Pursuant to the Purchase Agreement, the contingent consideration was payable as principal under a Subordinated Promissory Note, the form of which was delivered concurrent with the Purchase Agreement. In December 2010, the Company filed an indemnification claim against the Seller alleging breaches of and inaccuracies in representations and warranties included in the Purchase Agreement. On June 10, 2013, the court issued a judgment in favor of the Company regarding its indemnification claim and its claim regarding the overstatement of accounts receivable by the seller. Following the judgment, an appeal was filed by the seller and a cross-appeal was filed by the Company. In December 2016, the appeals court found in favor of the Company as well as dismissing the arguments raised by the seller in its appeal as without merit. The parties subsequently agreed to mediate the dispute, which was scheduled to begin in 2017. Based on a court order in December 2016, the Company removed the contingent consideration liability on its consolidated balance sheets. For the year ended December 31, 2016 (Predecessor) the Company recorded a gain on litigation settlement of $14.1 million related to this matter. On April 20, 2017, a settlement was reached between the two parties resulting in the Company receiving $3.9 million of which $2.7 million was paid from the escrow funds set up by the seller at the time of purchase and $1.2 million was paid by the seller. During the second quarter of 2017 (Predecessor) the Company recorded a gain on litigation settlement of $3.8 million for the settlement amount, net of legal costs. In connection with an acquisition during the three months ended June 30, 2016, the applicable purchase agreement provided for potential contingent consideration of up to $16.6 million to be paid to the prior owners of the applicable facility should the requirements for continuing employment agreed to in the purchase agreement be met. In accordance with ASC 805, Business Combinations, contingent consideration with a continuing employment provision is recognized ratably over the defined performance period as compensation expense. In the fourth quarter of 2017, the Company reached a settlement for a dispute with the prior owners, providing relief to the Company of any unpaid current and future liability related to the contingent consideration. Based on the settlement, the Company removed its accrued contingent consideration liability, which was included in other current liabilities in the consolidated balance sheets and recorded a gain on litigation settlement of $8.7 million during the four months ended December 31, 2017 (Successor). As disclosed in the footnotes to the consolidated statement of operations, the Company recognized contingent acquisition compensation expense of $1.9 million for the four months ended December 31, 2017 (Successor) and $5.1 million for both the eight months ended August 31, 2017 (Predecessor) and the year ended December 31, 2016 (Predecessor). Subsequent to December 31, 2017, the Company estimates contingent acquisition compensation expense of $1.5 million for the year ended December 31, 2018 related to other acquisitions completed in 2016.

Segment Reporting

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Segment Reporting

A public company is required to report annual and interim financial and descriptive information about its reportable operating segments. Operating segments, as defined, are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or "CODM," in deciding how to allocate resources and in assessing performance.

The Company operates in three major lines of business that are also the Company's reportable operating segments - the operation of surgical facilities, the operation of optical services and the operation of ancillary services. "All other" primarily consists of the Company's corporate general and administrative functions. Prior to 2017, the all other component was disaggregated and presented below the reportable operating segments in the Adjusted EBITDA reconciliation table. The Company has conformed the prior periods to align to the current year presentation. These changes had no effect on the Company’s reportable operating segments, which are presented consistent with prior periods.

Adjusted EBITDA is the primary profit/loss metric reviewed by the CODM in making key business decisions and on allocation of resources. The segment disclosures below provide a reconciliation from Adjusted EBITDA to income before income taxes, its most directly comparable GAAP financial measure, in the reported consolidated financial information.

The following tables present financial information for each reportable segment (in thousands):



	Successor		Predecessor
	September 1 to December 31,		January 1 to August 31,		Year Ended December 31,
	2017		2017		2016		2015
Revenues:
Surgical facility services	$	564,458	$	688,725	$	1,042,097	$	884,144
Ancillary services	24,660		52,261		90,836		61,175
Optical services	3,486		7,629		12,505		14,572
Total revenues	$	592,604	$	748,615	$	1,145,438	$	959,891



	Successor			Predecessor
	September 1 to December 31,			January 1 to August 31,			Year Ended December 31,
	2017			2017			2016			2015
Adjusted EBITDA:
Surgical facility services	$	103,760		$	125,912		$	214,218		$	180,113
Ancillary services	(2,255		)	(6,526		)	12,685			18,715
Optical services	736			2,214			3,308			3,905
All other	(23,504		)	(36,036		)	(50,948		)	(44,680		)
Total Adjusted EBITDA ⁽¹⁾	78,737			85,564			179,263			158,053

Net income attributable to non-controlling interests	39,634			42,087			75,630			71,416
Depreciation and amortization	(21,804		)	(30,124		)	(39,551		)	(34,545		)
Interest expense, net	(48,740		)	(68,929		)	(100,571		)	(100,980		)
Non-cash stock compensation expense	(1,887		)	(3,697		)	(2,021		)	(7,502		)
Contingent acquisition compensation expense	(1,982		)	(5,057		)	(5,092		)	—
Termination of management agreement and IPO costs	—			—			—			(5,834		)
Management fee ⁽²⁾	—			—			—			(2,250		)
Merger transaction, integration and practice acquisition costs ⁽³⁾	(9,330		)	(7,677		)	(11,617		)	(20,579		)
Gain on litigation settlement	8,740			3,794			14,101			—
Gain on acquisition escrow release	167			1,000			—			—
Gain (loss) on disposal or impairment of long-lived assets, net	(5		)	(1,715		)	(2,355		)	2,097
Gain on amendment to tax receivable agreement	1,098			15,294			—			—
Tax receivable agreement benefit (expense)	25,329			—			(3,733		)	(119,911		)
Loss on debt refinancing	—			(18,211		)	(11,876		)	(16,102		)
Income (loss) before income taxes	$	69,957		$	12,329		$	92,178		$	(76,137	)

⁽¹⁾The above table reconciles Adjusted EBITDA to income before income taxes as reflected in the consolidated statements of operations.

When the Company uses the term “Adjusted EBITDA,” it is referring to income before income taxes minus (a) net income attributable to non-controlling interests plus (b) depreciation and amortization, (c) interest expense, net, (d) non-cash stock compensation expense, (e) contingent acquisition compensation expense, (f) termination of management agreement and IPO costs, (g) management fee, (h) merger transaction, integration and practice acquisition costs, minus (i) gain on litigation settlement, (j) gain on acquisition escrow release, (plus)/minus (k) (loss)/gain on disposal or impairment of long-lived assets, net, minus (l) gain on amendment to tax receivable agreement, (plus)/minus (m) tax receivable agreement (expense)/gain and plus (n) loss on debt refinancing. The Company uses Adjusted EBITDA as a measure of financial performance. Adjusted EBITDA is a key measure used by the Company’s management to assess operating performance, make business decisions and allocate resources. Non-controlling interests represent the interests of third parties, such as physicians, and in some cases, healthcare systems that own an interest in surgical facilities that the Company consolidates for financial reporting purposes. The Company believes that it is helpful to investors to present Adjusted EBITDA as defined above because it excludes the portion of net income attributable to these third-party interests and clarifies for investors the Company's portion of Adjusted EBITDA generated by its surgical facilities and other operations.

Adjusted EBITDA is not a measurement of financial performance under GAAP, and should not be considered in isolation or as a substitute for net income, operating income or any other measure calculated in accordance with generally accepted accounting principles. The items excluded from Adjusted EBITDA are significant components in understanding and evaluating the Company's financial performance. The Company believes such adjustments are appropriate, as the magnitude and frequency of such items can vary significantly and are not related to the assessment of normal operating performance. The Company's calculation of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

⁽²⁾ Fee payable pursuant the Management and Investment Advisory Services Agreement between the Company and Bayside, which was terminated in connection with the Company's IPO.

⁽³⁾ This amount includes merger transaction and integration costs of $7.5 million for the four months ended December 31, 2017 (Successor), $5.6 million for the eight months ended August 31, 2017 (Predecessor), and $8.7 million and $17.9 million for the years ended December 31, 2016 (Predecessor) and 2015 (Predecessor), respectively.

This amount includes practice acquisition costs of $1.8 million for the four months ended December 31, 2017 (Successor), $2.1 million for the eight months ended August 31, 2017 (Predecessor), and $2.9 million and $2.7 million for the years ended December 31, 2016 (Predecessor) and 2015 (Predecessor, respectively.



	Successor		Predecessor
	December 31, 2017		December 31, 2016
Assets:
Surgical facility services	$	4,072,521	$	1,914,842
Ancillary services	104,274		184,002
Optical services	48,309		22,478
All other	397,669		183,636
Total assets	$	4,622,773	$	2,304,958

In connection with the application of pushdown accounting the Company reevaluated the relative fair value of its operating segments using a measurement date of October 1, 2017. As a result of its evaluation, the Company reallocated goodwill as of the measurement date to each reportable segment as follows: $3.158 billion to surgical facilities services, $74.3 million to ancillary services and $38.4 million to optical services.



	Successor		Predecessor
	September 1 to December 31,		January 1 to August 31,		Year Ended December 31,
	2017		2017		2016		2015
Cash purchases of property and equipment, net:
Surgical facility services	$	9,334	$	14,582	$	29,157	$	26,723
Ancillary services	191		1,875		5,388		1,051
Optical services	83		73		351		128
All other	1,219		2,243		4,213		5,537
Total cash purchases of property and equipment, net	$	10,827	$	18,773	$	39,109	$	33,439

Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information (Unaudited)

The following tables include a summary of certain information related to the Company's quarterly consolidated results of operations for each of the four quarters in the years ended December 31, 2017 and 2016. The timing of acquisitions and divestitures completed during the years presented affects the comparability of the quarterly financial information. The following should be read in conjunction with the audited consolidated financial statements included herein. The amounts are as follows (in thousands except per share amounts):



	2017
	Predecessor									Successor
	Q1			Q2			Q3⁽¹⁾			Q3⁽¹⁾			Q4

Revenues	$	286,183		$	288,353		$	174,079		$	132,258		$	460,346
Cost of revenues	$	211,948		$	216,452		$	143,772		$	102,924		$	338,704
Net income (loss)	$	14,422		$	11,627		$	4,369		$	(2,648	)	$	966
Net income attributable to non-controlling interests	$	(17,176	)	$	(16,098	)	$	(8,813	)	$	(6,492	)	$	(33,142	)
Net loss attributable to Surgery Partners, Inc.	$	(2,754	)	$	(4,471	)	$	(4,444	)	$	(9,140	)	$	(32,176	)
Basic net loss per share attributable to common stockholders ⁽²⁾	$	(0.06	)	$	(0.09	)	$	(0.09	)	$	(0.57	)	$	(0.83	)
Diluted net loss per share attributable to common stockholders ⁽²⁾	$	(0.06	)	$	(0.09	)	$	(0.09	)	$	(0.57	)	$	(0.83	)

⁽¹⁾The Predecessor period for Q3 includes the two months ended August 31, 2017. The Successor period for Q3 includes the one month ended September 30, 2017.

⁽²⁾ Beginning in the Successor period, per share amounts include the impact of amounts allocated to participating securities. Refer to Note 10. "Earnings Per Share" for further discussion.



	2016
	Predecessor
	Q1			Q2			Q3			Q4

Revenues	$	267,074		$	289,681		$	282,682		$	306,001
Cost of revenues	$	196,703		$	208,852		$	201,394		$	214,247
Net income	$	10,357		$	22,293		$	14,334		$	38,100
Net income attributable to non-controlling interests	$	(17,547	)	$	(20,173	)	$	(16,672	)	$	(21,238	)
Net (loss) income attributable to Surgery Partners, Inc.	$	(7,190	)	$	2,120		$	(2,338	)	$	16,862
Basic net (loss) income per share attributable to common stockholders	$	(0.15	)	$	0.04		$	(0.05	)	$	0.35
Diluted net (loss) income per share attributable to common stockholders	$	(0.15	)	$	0.04		$	(0.05	)	$	0.35

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2017
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On March 1, 2018, the Company acquired a controlling interest of a surgical facility in Omaha, Nebraska, for $21.9 million. The acquisition was funded through cash from operations. As of the date of this filing, the Company has not completed its preliminary estimation of the fair values assigned to the assets acquired and liabilities assumed.

Significant Accounting Policies (Policies)	12 Months Ended
Significant Accounting Policies (Policies)	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, as well as interests in partnerships and limited liability companies controlled by the Company through its ownership of a majority voting interest or other rights granted to the Company by contract to manage and control the affiliate's business. All significant intercompany balances and transactions are eliminated in consolidation.
Non-Controlling Interests	Non-Controlling Interests The physician limited partners and physician minority members of the entities that the Company controls are responsible for the supervision and delivery of medical services. The governance rights of limited partners and minority members are restricted to those that protect their financial interests. Under certain partnership and operating agreements governing these partnerships and limited liability companies, the Company could be removed as the sole general partner or managing member for certain events such as material breach of the partnership or operating agreement, gross negligence or bankruptcy. These protective rights do not preclude consolidation of the respective partnerships and limited liability companies. Ownership interests in consolidated subsidiaries held by parties other than the Company are identified and generally presented in the consolidated financial statements within the equity section but separate from the Company's equity. However, in instances in which certain redemption features that are not solely within the control of the Company are present, classification of non-controlling interests outside of permanent equity is required. Consolidated net income attributable to the Company and to the non-controlling interests are identified and presented on the consolidated statements of operations; changes in ownership interests in which the Company retains a controlling interest are accounted for as equity transactions assuming the Company continues to consolidate related entities. Certain transactions with non-controlling interests are classified within financing activities in the consolidated statements of cash flows. The consolidated financial statements of the Company include all assets, liabilities, revenues and expenses of surgical facilities in which the Company has sufficient ownership and rights to allow the Company to consolidate the surgical facilities. Similar to its investments in non-consolidated affiliates, the Company regularly engages in the purchase and sale of ownership interests with respect to its consolidated subsidiaries that do not result in a change of control. Non-Controlling Interests — Redeemable. Each partnership and limited liability company through which the Company owns and operates its surgical facilities is governed by a partnership or operating agreement, respectively. In certain circumstances, the applicable partnership or operating agreements for the Company's surgical facilities provide that the facilities will purchase all of the physician limited partners’ or physician minority members', as applicable, ownership if certain adverse regulatory events occur, such as it becoming illegal for the physician(s) to own an interest in a surgical facility, refer patients to a surgical facility or receive cash distributions from a surgical facility. The non-controlling interests — redeemable are reported outside of stockholders' equity in the consolidated balance sheets.
Variable Interest Entities	Variable Interest Entities The consolidated financial statements include the accounts of variable interest entities ("VIE") in which the Company is the primary beneficiary under the provisions of ASC 810, Consolidation. At December 31, 2017 (Successor), the variable interest entities include five surgical facilities, three anesthesia practices and three physician practices. At December 31, 2016 (Predecessor), the variable interest entities included five surgical facilities, three anesthesia practices and two physician practice. The change is due to a physician practice acquired during the eight months ended August 31, 2017 (Predecessor). The Company has the power to direct the activities that most significantly impact a variable interest entity's economic performance. Additionally, the Company would absorb the majority of the expected losses from any of these entities should such expected losses occur.
Equity Method Investments	Equity Method Investments The Company has non-consolidating investments in surgical facilities and management companies that own or manage surgical facilities. These investments are accounted for using the equity method of accounting.
Use of Estimates	Use of Estimates The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and footnotes. Examples include, but are not limited to, estimates of accounts receivable allowances, professional and general liabilities and the estimate of deferred tax assets or liabilities. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All adjustments are of a normal, recurring nature. Actual results could differ from those estimates.
Reclassifications	Reclassifications Certain reclassifications have been made to the comparative periods' financial statements to conform to the current year presentation.
Fair Value of Financial Instruments	were based on Level 2 inputs using quoted prices for identical liabilities in inactive markets at December 31, 2017 (Successor) and 2016 (Predecessor), as applicable. The carrying amounts related to the Company's other long-term debt obligations, including the 2014 Revolver Loan and the Revolver (in each case, as defined in Note 7. "Long-Term Debt"), approximate their fair values. The Company maintains a supplemental executive retirement savings plan (the "SERP") for certain executive officers. The SERP is a non-qualified deferred compensation plan for eligible executive officers and other key employees of the Company that allows participants to defer portions of their compensation. The fair value of the SERP asset and liability was based on a quoted market price, or a Level 1 computation Fair Value of Financial Instruments The fair value of a financial instrument is the amount at which the instrument could be exchanged in an orderly transaction between market participants to sell the asset or transfer the liability. The Company uses fair value measurements based on quoted prices in active markets for identical assets or liabilities (Level 1), inputs other than quoted prices in active markets that are either directly or indirectly observable (Level 2), or unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions (Level 3), depending on the nature of the item being valued. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, restricted invested assets and accounts payable approximate their fair values.
Revenues	Revenues The Company recognizes revenues in the period in which the services are performed. Patient service revenues and receivables from third-party payors are recorded net of estimated contractual adjustments and allowances, which the Company estimates based on the historical trend of its cash collections and contractual write-offs, accounts receivable agings, established fee schedules, contracts with payors and procedure statistics. Other service revenues. Optical service revenues consist of product sales from the Company's optical laboratories as well as handling charges billed to the members of the Company's optical products purchasing organization. The Company's optical products purchasing organization negotiates volume buying discounts with optical products manufacturers. The buying discounts and any handling charges billed to the members of the buying group represent the revenue recognized for financial reporting purposes. Revenue is recognized as orders are shipped to members. The Company bases its estimates for sales returns and discounts on historical experience and has not experienced significant fluctuations between estimated and actual return activity and discounts given. The Company's optical laboratories manufacture and distribute corrective lenses and eyeglasses to ophthalmologists and optometrists. Revenue is recognized when product is shipped, net of allowance for discounts. Other revenues include management and administrative service fees derived from the non-consolidated facilities that the Company accounts for under the equity method, management of surgical facilities in which it does not own an interest, and management services provided to physician practices for which the Company is not required to provide capital or additional assets. The fees derived from these management arrangements are based on a predetermined percentage of the revenues of each facility or practice and are recognized in the period in which services are rendered. Patient service revenues. The fee charged for healthcare procedures performed in surgical facilities varies depending on the type of service provided, but usually includes all charges for usage of an operating room, a recovery room, special equipment, medical supplies, nursing staff and medications. The fee does not normally include professional fees charged by the patient’s surgeon, anesthesiologist or other attending physician, which are billed directly by such physicians to the patient or third-party payor. However, in several surgical facilities, the Company charges for anesthesia services. Ancillary service revenues include fees for patient visits to the Company's physician practices, pharmacy services and diagnostic tests ordered by physicians. Patient service revenues are recognized on the date of service, net of estimated contractual adjustments and discounts from third-party payors, including Medicare and Medicaid. Changes in estimated contractual adjustments and discounts are recorded in the period of change.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains its cash and cash equivalent balances at high credit quality financial institutions.
Accounts Receivable and Allowances for Contractual Adjustments and Doubtful Accounts	The Company records an estimate for doubtful accounts based on the aging category and historical collection experience of each product sales or other business included in other service revenues, as discussed in the note above. The receivables related to the Company's optical products purchasing organization are recognized separately from patient accounts receivable, as discussed above, and are included in other current assets in the consolidated balance sheets. Accounts Receivable and Allowances for Contractual Adjustments and Doubtful Accounts Accounts receivable are recorded net of contractual adjustments and allowances for doubtful accounts to reflect accounts receivable at net realizable value. Accounts receivable consists of receivables from federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies, employers and patients. Management recognizes that revenues and receivables from government agencies are significant to the Company's operations, but it does not believe that there is significant credit risk associated with these government agencies. Concentration of credit risk with respect to other payors is limited because of the large number of such payors. As of December 31, 2017, the Company had a net third-party Medicaid settlements liability of $1.0 million compared to a third-party Medicaid settlements receivable of $0.5 million at December 31, 2016. The Company recognizes that final reimbursement of accounts receivable is subject to final approval by each third-party payor. However, because the Company has contracts with its third-party payors and also verifies insurance coverage of the patient before medical services are rendered, the amounts that are pending approval from third-party payors are not considered significant. The Company's policy is to collect co-payments and deductibles prior to providing medical services. It is also the Company's policy to verify a patient’s insurance 72 hours prior to the patient’s procedure. Patient services of the Company are primarily non-emergency, which allows the surgical facilities to control the procedures for which third-party reimbursement is sought and obtained. The Company does not require collateral from self-pay patients. The Company analyzes accounts receivable at each of its facilities to ensure the proper aged category and collection assessment. At a consolidated level, the Company's policy is to review accounts receivable aging, by facility, to determine the appropriate allowance for doubtful accounts. Patient account balances are reviewed for delinquency based on contractual terms. This review is supported by an analysis of the actual revenues, contractual adjustments and cash collections received. An account balance is written off only after the Company has pursued collection with legal or collection agency assistance or otherwise has deemed an account to be uncollectible.
Inventories	Inventories Inventories, which consist primarily of medical and drug supplies, are stated at the lower of cost or market value. Cost is determined using the first-in, first-out method.
Property and Equipment	Property and Equipment Property and equipment are stated at cost or, if obtained through acquisition, at fair value determined on the date of acquisition. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets, generally 20 to 40 years for buildings and building improvements, three to five years for computers and software and five to seven years for furniture and equipment. Leasehold improvements are depreciated on a straight-line basis over the shorter of the lease term or the estimated useful life of the assets. Routine maintenance and repairs are expensed as incurred, while expenditures that increase capacities or extend useful lives are capitalized. The Company also leases certain facilities and equipment under capital leases. Assets held under capital leases are stated at the present value of minimum lease payments at the inception of the related lease. Such assets are amortized on a straight-line basis over the lesser of the lease term or the remaining useful life of the leased asset.
Goodwill and Intangible Assets	Goodwill and Intangible Assets Goodwill represents the fair value of the consideration provided in an acquisition over the fair value of net assets acquired and is not amortized. The Company has indefinite-lived intangible assets related to the certificates of need held in jurisdictions where certain of its surgical facilities are located and Medicare licenses. The Company also has finite-lived intangible assets related to physician guarantee agreements, non-compete agreements, management agreements and customer relationships. Physician income guarantees are amortized into salaries and benefits costs in the consolidated statements of operations over the commitment period of the contract, generally three to four years. Non-compete agreements and management rights agreements are amortized into depreciation and amortization expense in the consolidated statements of operations over the service lives of the agreements, typically ranging from two to five years for non-compete agreements and 15 years for the management rights agreements. Customer relationships are amortized into depreciation and amortization expense in the consolidated statements of operations over the estimated lives of the relationships, ranging from three to ten years.
Impairment of Long-Lived Assets, Goodwill and Intangible Assets	Impairment of Long-Lived Assets, Goodwill and Intangible Assets The Company evaluates the carrying value of long-lived assets when impairment indicators are present or when circumstances indicate that impairment may exist. The Company performs an impairment test by preparing an expected undiscounted cash flow projection. If the projection indicates that the recorded amount of the long-lived asset is not expected to be recovered, the carrying value is reduced to estimated fair value. The cash flow projection and fair value represents management’s best estimate, using appropriate and customary assumptions, projections and methodologies, at the date of evaluation. No impairment losses on long-lived assets were recognized during the four months ended December 31, 2017 (Successor), the eight months ended August 31, 2017 (Predecessor), and the years ended December 31, 2016 and 2015 (Predecessor). The Company tests its goodwill and indefinite-lived intangible assets for impairment at least annually, as of October 1, or more frequently if certain indicators arise. The Company tests for goodwill impairment at the reporting unit level, which is defined as one level below an operating segment. The Company has determined that it has five reporting units, which include the following: 1) Surgical Facilities 2) Ancillary Services, 3) Midwest Labs, 4) The Alliance, including Optical Synergies and 5) Family Vision Care. The Company compares the carrying value of the net assets of the reporting unit to the estimated fair value of the reporting unit. If the carrying value exceeds the estimated fair value, an impairment indicator exists and an estimate of the possible impairment loss is calculated. The fair value of the reporting units are estimated using a discounted cash flows approach and are corroborated using a market-based approach. The fair value calculation includes multiple assumptions and estimates, including the projected cash flows and discount rates applied.
Equity-Based Compensation	Equity-Based Compensation Transactions in which the Company receives employee and non-employee services in exchange for the Company’s equity instruments or liabilities that are based on the fair value of the Company’s equity securities or may be settled by the issuance of these securities are accounted for using a fair value method. Prior to the Reorganization, on the grant date, the Company employed a market approach to estimate the fair value of equity-based awards based on various considerations and assumptions, including implied earnings multiples and other metrics of relevant market participants, the Company’s operating results and forecasted cash flows and the Company’s capital structure. Such estimates require the input of highly subjective, complex assumptions. However, such assumptions are no longer required to determine fair value of shares of the Company’s common stock as its underlying shares began trading publicly during the fourth quarter of 2015. The Company applies the Black-Scholes-Merton method of valuation in determining share-based compensation expense for option awards. The Company’s policy is to recognize compensation expense using the straight line method over the relevant vesting period for units that vest based on time. Prior to the Reorganization, employees held membership units in Surgery Center Holdings, LLC, and the associated expense was referred to as unit-based compensation; following the Reorganization, such expense is referred to as equity-based compensation. The Company's equity-based compensation is described further in Note 12.
Professional, General and Workers' Compensation Insurance	Professional, General and Workers' Compensation Insurance The Company maintains general liability and professional liability insurance in excess of self-insured retentions through third party commercial insurance carriers in amounts that management believes is sufficient for the Company's operations, although, potentially, some claims may exceed the scope of coverage in effect. The professional and general insurance coverage is on a claims-made basis. Workers' compensation insurance is on an occurrence basis. The Company expenses the costs under the self-insured retention exposure for general and professional liability and workers compensation claims which relate to (i) claims made during the policy period, which are offset by insurance recoveries and (ii) an estimate of claims incurred but not yet reported that are expected to be reported after the policy period expires. Reserves and provisions are based upon actuarially determined estimates using individual case-basis valuations and actuarial analysis. Reserves for professional, general and workers' compensation claim liabilities are determined with no regard for expected insurance recoveries and are presented gross on the consolidated balance sheets.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers," along with subsequent amendments, updates and an extension of the effective date (collectively the “New Revenue Standard”), which outlines a single comprehensive model for recognizing revenue and supersedes most existing revenue recognition guidance, including guidance specific to the healthcare industry. This five-step process will require significant management judgment in addition to changing the way many companies recognize revenue in their financial statements. Additionally, and among other provisions, the New Revenue Standard requires expanded quantitative and qualitative disclosures, including disclosure about the nature, amount, timing and uncertainty of revenue. The provisions of the New Revenue Standard are effective for annual periods beginning after December 15, 2017, including interim periods within those years by applying either the full retrospective method or the modified retrospective approach upon adoption. The Company will adopt this ASU on January 1, 2018. The Company plans to adopt using the modified retrospective method, including providing all requisite disclosures under such method. The Company expects that the majority of its provision for doubtful accounts will continue to be recognized as an operating expense rather than as a direct reduction to revenues, given the Company’s practice of assessing a patient’s ability to pay prior to or on the date of providing healthcare services. The Company does not believe the adoption will have a significant impact on our recognition of net revenues for any period. The Company is still evaluating the impact that the adoption will have on its related disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases,” which will require, among other items, lessees to recognize most leases as assets and liabilities on the balance sheet. Qualitative and quantitative disclosures will be enhanced to better understand the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company believes the primary effect of adopting the new standard will be to record right-of-use assets and obligations for current operating leases. In January 2017, the FASB issued ASU 2017-01, “Business Combinations – Clarifying the Definition of a Business,” which narrows the definition of a business when evaluating whether transactions should be accounted for as asset acquisition or business combination. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those years. The adoption of this ASU will not have a material impact on the Company's condensed consolidated financial position, results of operations and cash flows.
Business Combinations	The Company accounts for its business combinations in accordance with the fundamental requirements of the acquisition method of accounting and under the premise that an acquirer can be identified for each business combination. The acquirer is the entity that obtains control of one or more businesses in the business combination and the acquisition date is the date the acquirer achieves control. The assets acquired, liabilities assumed and any non-controlling interests in the acquired business at the acquisition date are recognized at their fair values as of that date, and the direct costs incurred in connection with the business combination are recorded and expensed separately from the business combination. Any goodwill recognized is determined as the excess of the fair value of the consideration conveyed plus the fair value of any non-controlling interests in the acquisition over the fair value of the net assets acquired. Acquisitions in which the Company is able to exert significant influence but does not have control are accounted for using the equity method. Acquired assets and assumed liabilities typically include, but are not limited to, fixed assets, intangible assets and professional liabilities. The valuations are based on appraisal reports, discounted cash flow analyses, actuarial analyses or other appropriate valuation techniques to determine the fair value of the assets acquired or liabilities assumed. Fair value attributable to non-controlling interests is based on a Level 3 computation using significant inputs that are not observable in the market. Key inputs used to determine the fair value include financial multiples used in the purchase of non-controlling interests, primarily from acquisitions of surgical facilities. Such multiples, based on earnings, are used as a benchmark for the discount to be applied for the lack of control or marketability. Fair value attributable to the property and equipment acquired is based on Level 3 computations using key inputs such as cost trend data and comparable asset sales. Fair value attributable to the intangible assets acquired is based on Level 3 computations using key inputs such as the Company's internally-prepared financial projections. Fair values assigned to acquired working capital are based on carrying amounts reported by the acquiree at the date of acquisition, which approximate their fair values.

Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Rollforward of Non-Controlling Interests - Redeemable

A summary of activity related to the non-controlling interests—redeemable follows (in thousands):



Predecessor
Balance at December 31, 2015	$	183,439
Net income attributable to non-controlling interests—redeemable	18,023
Acquisition and disposal of shares of non-controlling interests, net—redeemable	(3,781		)
Distributions to non-controlling interest —redeemable holders	(17,160		)
Balance at December 31, 2016	180,521
Net income attributable to non-controlling interests—redeemable	9,615
Acquisition and disposal of shares of non-controlling interests, net—redeemable	(3,323		)
Distributions to non-controlling interest —redeemable holders	(11,468		)
Acquisition of NSH	153,320
Balance at August 31, 2017	$	328,665



Successor
Balance at September 1, 2017	$	271,001
Net income attributable to non-controlling interests—redeemable	12,931
Acquisition and disposal of shares of non-controlling interests, net—redeemable	819
Distributions to non-controlling interest —redeemable holders	(8,228		)
Reallocation in application of pushdown accounting	21,248
Purchase price adjustments	1,545
Balance at December 31, 2017	$	299,316

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

A summary of the carrying amounts and fair values of the Company's long-term debt follows (in thousands):



	Successor				Predecessor
	December 31, 2017				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value

2014 Revolver Loan	$	—	$	—	$	85,000	$	85,000
2014 First Lien Credit Agreement, net of debt issuance costs and discount	$	—	$	—	$	911,784	$	917,528
2017 Senior Secured Credit Facilities:
Revolver	$	—	$	—	$	—	$	—
Term Loan	$	1,280,532	$	1,267,189	$	—	$	—
Senior Unsecured Notes due 2021 ⁽¹⁾	$	409,235	$	422,535	$	387,942	$	412,189
Senior Unsecured Notes due 2025	$	370,000	$	346,413	$	—	$	—

⁽¹⁾ The carrying amount in the Predecessor period is net of unamortized debt issuance costs and discount, which were eliminated with the application of pushdown accounting.

Schedule of Revenues by Service Type

A summary of revenues by service type as a percentage of total revenues follows:



	Successor		Predecessor
	September 1 to December 31,		January 1 to August 31,		Year Ended December 31,
	2017		2017		2016		2015
Patient service revenues:
Surgical facilities revenues	94.3	%	91.4	%	90.3	%	91.6	%
Ancillary services revenues	4.2	%	7.0	%	7.9	%	6.4	%
	98.5	%	98.4	%	98.2	%	98.0	%
Other service revenues:
Optical services revenues	0.6	%	1.0	%	1.1	%	1.5	%
Other	0.9	%	0.6	%	0.7	%	0.5	%
	1.5	%	1.6	%	1.8	%	2.0	%
Total revenues	100.0	%	100.0	%	100.0	%	100.0	%

Schedule of Revenue Sources for Patient Service Revenues



	Successor				Predecessor
	September 1 to December 31,				January 1 to August 31,				Year Ended December 31,
	2017				2017				2016				2015
	Amount		%		Amount		%		Amount		%		Amount		%
Patient service revenues:
Private insurance	$	347,801	59.6	%	$	360,092	48.9	%	$	579,662	51.5	%	$	516,739	55.0	%
Government	196,926		33.7	%	308,993		42.0	%	448,953		39.9	%	359,471		38.2	%
Self-pay	15,233		2.6	%	15,949		2.2	%	19,817		1.8	%	16,190		1.7	%
Other ⁽¹⁾	23,843		4.1	%	51,374		6.9	%	76,172		6.8	%	48,311		5.1	%
Total patient service revenues	$	583,803	100.0	%	$	736,408	100.0	%	$	1,124,604	100.0	%	$	940,711	100.0	%
Other service revenues:
Optical service revenues	$	3,486			$	7,629			$	12,505			$	14,572
Other revenues	5,315				4,578				8,329				4,608
Total net revenues	$	592,604			$	748,615			$	1,145,438			$	959,891

(1) Other is comprised of anesthesia service agreements, auto liability, letters of protection and other payor types.

Schedules of Accounts Receivable

A summary of the changes in the allowance for doubtful accounts receivable follows (in thousands):



	Balance at Beginning of Period		Provision for Doubtful Accounts		Accounts Written off, Net of Recoveries			Balance at End of Period
Predecessor
Year ended December 31, 2015	$	5,329	$	23,578	$	(10,585	)	$	18,322
Year ended December 31, 2016	18,322		24,212		(12,662		)	29,872
Eight months ended August 31, 2017	29,872		16,297		(14,096		)	32,073



Successor
Four months ended December 31, 2017	—		12,455		(10,429		)	2,026

Schedule of Prepaid Expenses and Other Current Assets

A summary of prepaid expenses and other current assets follows (in thousands):



	Successor		Predecessor
	December 31, 2017		December 31, 2016

Prepaid expenses	$	16,835	$	11,158
Receivables - optical product purchasing organization	7,563		7,042
Acquisition escrow deposit	3,809		10,871
Insurance recoveries	2,828		2,476
Other	24,302		11,338
Total	$	55,337	$	42,885

Schedule of Other Long-Term Assets

A summary of other long-term assets follows (in thousands):



	Successor		Predecessor
	December 31, 2017		December 31, 2016

Acquisition escrow deposit	$	19,600	$	—
Insurance recoveries	10,018		6,835
Notes receivable	2,263		716
Deposits	3,151		4,196
Other	13,318		4,688
Total	$	48,350	$	16,435

Schedule of Other Current Liabilities

A summary of other current liabilities follows (in thousands):



	Successor		Predecessor
	December 31, 2017		December 31, 2016

Interest payable	$	20,537	$	19,206
Amounts due to patients and payors	18,096		12,221
Insurance liabilities	9,873		6,625
Current taxes payable	4,912		2,622
Acquisition escrow liability	3,809		10,871
Accrued expenses and other	52,717		28,319
Total	$	109,944	$	79,864

Schedule of Other Long-Term Liabilities

A summary of other long-term liabilities follows (in thousands):



	Successor		Predecessor
	December 31, 2017		December 31, 2016

Facility lease obligations	$	121,627	$	52,653
Acquisition escrow liability	19,600		—
Medical malpractice liability	16,450		10,453
Unfavorable lease liability	11,889		1,671
Other	9,123		11,489
Total	$	178,689	$	76,266

Acquisitions and Developments (Tables)

12 Months Ended

Dec. 31, 2017

Business Combinations [Abstract]

Schedule of recognized identified assets acquired and liabilities assumed

The aggregate amounts preliminarily recognized for each major class of assets and liabilities assumed in the other acquisitions completed during 2017, including post acquisition date adjustments, are as follows (in thousands):



	Successor			Predecessor
	September 1 to December 31,			January 1 to August 31,
	2017			2017

Cash consideration	$	29,448		$	14,163
Fair value of non-controlling interests	21,893			105
Aggregate fair value of acquisitions	51,341			14,268
Net assets acquired:
Current Assets	2,285			866
Property and equipment	248			696
Intangible assets	41			634
Goodwill	49,317			12,545
Current liabilities	(550		)	(287		)
Long-term debt	—			(186		)
Total fair value of net assets acquired	$	51,341		$	14,268

The aggregate amounts preliminarily recognized for each major class of assets and liabilities, including post acquisition date adjustments, are as follows (in thousands):



Cash consideration	$	762,850
Fair value of non-controlling interests	325,965
Aggregate fair value of acquisition	1,088,815
Net assets acquired:
Cash and cash equivalents	51,159
Accounts receivable	71,901
Inventories	14,986
Prepaid expenses and other current assets	18,397
Property and equipment	174,499
Intangible assets	27,746
Goodwill	870,241
Investments in and advances to affiliates	29,737
Long-term deferred tax assets	17,279
Other long-term assets	27,229
Accounts payable	(29,652		)
Accrued payroll and benefits	(28,755		)
Other current liabilities	(21,287		)
Current maturities of long-term debt	(16,416		)
Long-term debt, less current maturities	(42,770		)
Other long-term liabilities	(75,479		)
Total fair value of net assets acquired	$	1,088,815



Cash consideration	$	135,061
Fair value of non-controlling interests	27,164
Aggregate fair value of acquisitions	162,225
Net assets acquired:
Current assets	11,383
Property and equipment	3,921
Intangible assets	4,475
Goodwill	148,181
Other long-term assets	56
Current liabilities	(5,422		)
Long-term liabilities	(369		)
Total fair value of net assets acquired	$	162,225



Equity attributable to Surgery Partners, Inc.	$	720,606
Redeemable preferred stock	310,000
Fair value of non-controlling interests	957,027
Aggregate fair value	1,987,633
Net assets:
Cash and cash equivalents	214,206
Accounts receivable	253,173
Inventories	44,310
Prepaid expenses and other current assets	61,475
Property and equipment	380,085
Intangible assets	60,104
Goodwill	3,299,911
Investments in and advances to affiliates	74,722
Restricted invested assets	315
Long-term deferred tax asset	204,408
Other long-term assets	49,681
Accounts payable	(64,921		)
Accrued payroll and benefits	(54,437		)
Other current liabilities	(94,740		)
Current maturities of long-term debt	(49,942		)
Long-term debt, less current maturities	(2,142,375		)
Long-term tax receivable agreement liability	(78,498		)
Other long-term liabilities	(169,844		)
Total fair value of net assets	$	1,987,633

Schedule of unaudited consolidated pro forma results



	Successor			Predecessor
	September 1 to December 31,			January 1 to August 31,			Year Ended December 31,
	2017			2017			2016

Net revenues	$	592,604		$	1,122,326		$	1,679,254

Net income	4,477			63,269			132,699
Less: Net income attributable to non-controlling interests	(39,634		)	(65,122		)	(112,123		)
Net (loss) income attributable to Surgery Partners, Inc.	$	(35,157	)	$	(1,853	)	$	20,576

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2017

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

A summary of property and equipment follows (in thousands):



	Successor			Predecessor
	December 31, 2017			December 31, 2016

Land	$	19,561		$	8,082
Buildings and improvements	188,571			118,172
Furniture and equipment	20,813			14,670
Computer and software	28,578			29,902
Medical equipment	138,112			117,418
Construction in progress	22,581			2,396
Property and equipment, at cost	418,216			290,640
Less: Accumulated depreciation	(19,680		)	(86,387		)
Property and equipment, net	$	398,536		$	204,253

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of activity related to goodwill

A summary of the changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 follows (in thousands):



Predecessor
Balance at December 31, 2015	$	1,407,927
Acquisitions	147,895
Divestitures	(552		)
Purchase price adjustments	(66		)
Balance at December 31, 2016	$	1,555,204
Acquisitions	858,323
Divestitures	(175		)
Purchase price adjustments	1,220
Balance at August 31, 2017	$	2,414,572



Successor
Balance at September 1, 2017	$	3,269,225
Acquisitions	49,317
Divestitures	(1,957		)
Purchase price adjustments	30,253
Balance at December 31, 2017	$	3,346,838

Summary of components of intangible assets

A summary of the components of intangible assets follows (in thousands):



	Successor							Predecessor
	December 31, 2017							December 31, 2016
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net

Finite-lived intangible assets:
Management rights agreements	$	42,600	$	(1,058	)	$	41,542	$	24,751	$	(3,461	)	$	21,290
Non-compete agreements	4,874		(715		)	4,159		24,673		(8,216		)	16,457
Physician income guarantees	878		(227		)	651		1,901		(1,088		)	813
Other	—		—			—		8,815		(3,374		)	5,441
Total finite-lived intangible assets	48,352		(2,000		)	46,352		60,140		(16,139		)	44,001
Indefinite-lived intangible assets:
Management rights agreements	5,900		—			5,900		—		—			—
Certificates of need	5,548		—			5,548		3,780		—			3,780
Medicare licenses	1,108		—			1,108		242		—			242
Total intangible assets	$	60,908	$	(2,000	)	$	58,908	$	64,162	$	(16,139	)	$	48,023

A summary of the aggregate activity related to intangible assets for the years ended December 31, 2017 and 2016 follows (in thousands):



Predecessor
Balance at December 31, 2015	$	53,568
Additions	4,754
Disposals	(135		)
Recruitment expense	(609		)
Amortization	(9,555		)
Balance at December 31, 2016	$	48,023
Additions	28,312
Recruitment expense	(380		)
Amortization	(6,040		)
Balance at August 31, 2017	$	69,915



Successor
Balance at September 1, 2017	$	56,750
Additions	474
Disposals	(140		)
Purchase price adjustments	3,873
Recruitment expense	(227		)
Amortization	(1,822		)
Balance at December 31, 2017	$	58,908

Summary of components and activity related to intangible assets

A summary of the components of intangible assets follows (in thousands):



	Successor							Predecessor
	December 31, 2017							December 31, 2016
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net

Finite-lived intangible assets:
Management rights agreements	$	42,600	$	(1,058	)	$	41,542	$	24,751	$	(3,461	)	$	21,290
Non-compete agreements	4,874		(715		)	4,159		24,673		(8,216		)	16,457
Physician income guarantees	878		(227		)	651		1,901		(1,088		)	813
Other	—		—			—		8,815		(3,374		)	5,441
Total finite-lived intangible assets	48,352		(2,000		)	46,352		60,140		(16,139		)	44,001
Indefinite-lived intangible assets:
Management rights agreements	5,900		—			5,900		—		—			—
Certificates of need	5,548		—			5,548		3,780		—			3,780
Medicare licenses	1,108		—			1,108		242		—			242
Total intangible assets	$	60,908	$	(2,000	)	$	58,908	$	64,162	$	(16,139	)	$	48,023

A summary of the aggregate activity related to intangible assets for the years ended December 31, 2017 and 2016 follows (in thousands):



Predecessor
Balance at December 31, 2015	$	53,568
Additions	4,754
Disposals	(135		)
Recruitment expense	(609		)
Amortization	(9,555		)
Balance at December 31, 2016	$	48,023
Additions	28,312
Recruitment expense	(380		)
Amortization	(6,040		)
Balance at August 31, 2017	$	69,915



Successor
Balance at September 1, 2017	$	56,750
Additions	474
Disposals	(140		)
Purchase price adjustments	3,873
Recruitment expense	(227		)
Amortization	(1,822		)
Balance at December 31, 2017	$	58,908

Summary of scheduled amortization

Total estimated amortization expense for the next five years and thereafter related to intangible assets follows (in thousands):



2018	$	4,966
2019	4,576
2020	4,172
2021	3,730
2022	2,874
Thereafter	26,034
Total	$	46,352

Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Schedule of long-term debt

A summary of long-term debt follows (in thousands):



	Successor		Predecessor
	December 31, 2017		December 31, 2016

2014 Revolver Loan	$	—	$	85,000
2014 First Lien Credit Agreement	—		932,000
2017 Senior Secured Credit Facilities:
Revolver	—		—
Term Loan ⁽¹⁾	1,280,532		—
Senior Unsecured Notes due 2021 ⁽²⁾	409,235		400,000
Senior Unsecured Notes due 2025	370,000		—
Subordinated Notes	—		1,000
Notes payable and secured loans	101,921		42,521
Capital lease obligations	27,594		13,996
Less: unamortized debt issuance costs and original issue discount	—		(32,274		)
Total debt	2,189,282		1,442,243
Less: Current maturities	58,726		27,822
Total long-term debt	$	2,130,556	$	1,414,421

⁽¹⁾ Includes unamortized fair value discount of $6.2 million as of December 31, 2017. See further discussion below.

⁽²⁾ Includes unamortized fair value premium of $9.2 million as of December 31, 2017. See further discussion below.

Debt redemption percentages

The Company may redeem the 2025 Unsecured Notes, in whole or in part, at any time on or after July 1, 2020, at the redemption prices set forth below (expressed as a percentage of the principal amount to be redeemed), plus accrued and unpaid interest, if any, to, but excluding, the date of redemption:



July 1, 2020 to June 30, 2021	103.375	%
July 1, 2021 to June 30, 2022	101.688	%
July 1, 2022 and thereafter	100.000	%



April 15, 2018 to April 14, 2019	106.656	%
April 15, 2019 to April 14, 2020	104.438	%
April 15, 2020 and thereafter	100.000	%

Summary of scheduled maturities of debt



2018	$	58,726
2019	36,857
2020	1,277,253
2021	411,748
2022	8,110
Thereafter	393,597
Total debt	$	2,186,291

Leases (Tables)

12 Months Ended

Dec. 31, 2017

Leases [Abstract]

Future minimum operating lease payments

Future minimum lease payments for non-cancellable operating and capital leases for the next five years and thereafter at December 31, 2017 follows (in thousands):



	Operating Leases		Capital Leases

2018	$	67,513	$	9,100
2019	67,136		7,404
2020	62,735		5,020
2021	56,558		3,505
2022	52,582		1,986
Thereafter	258,192		6,299
Total minimum payments	$	564,716	33,314
Less: imputed interest			(5,720		)
Capital lease obligations			$	27,594

Future minimum capital lease payments

Future minimum lease payments for non-cancellable operating and capital leases for the next five years and thereafter at December 31, 2017 follows (in thousands):



	Operating Leases		Capital Leases

2018	$	67,513	$	9,100
2019	67,136		7,404
2020	62,735		5,020
2021	56,558		3,505
2022	52,582		1,986
Thereafter	258,192		6,299
Total minimum payments	$	564,716	33,314
Less: imputed interest			(5,720		)
Capital lease obligations			$	27,594

Redeemable Preferred Stock (Tables)

12 Months Ended

Dec. 31, 2017

Temporary Equity Disclosure [Abstract]

A summary of activity related to the redeemable preferred stock for the period from September 1, 2017 to December 31, 2017 (Successor) follows (in thousands):



Successor
Balance at September 1, 2017	$	310,000
Dividends accrued	10,481
Cash dividends declared	(5,241		)
Mark to redemption adjustment	15,566
Balance at December 31, 2017	$	330,806

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Reconciliation of numerator and denominator of basic and diluted EPS

A reconciliation of the numerator and denominator of basic and diluted earnings per share follows (in thousands except share and per share amounts):



	Successor			Predecessor
	September 1 to December 31,			January 1 to August 31,			Year Ended December 31,
	2017			2017			2016		2015

Numerator:
Net (loss) income attributable to Surgery Partners, Inc.	$	(41,316	)	$	(11,669	)	$	9,453	$	1,429
Less: amounts allocated to participating securities⁽¹⁾	10,481			—			—		—
Less: mark to redemption adjustment	15,566			—			—		—
Net (loss) income attributable to common stockholders	$	(67,363	)	$	(11,669	)	$	9,453	$	1,429

Denominator:
Weighted average shares outstanding- basic	48,319,193			48,121,404			48,018,944		36,066,233
Effect of dilutive securities ⁽²⁾	—			—			171,794		1,398,154
Weighted average shares outstanding- diluted	48,319,193			48,121,404			48,190,738		37,464,387

Earnings (loss) per share:
Basic	$	(1.39	)	$	(0.24	)	$	0.20	$	0.04
Diluted ⁽²⁾	$	(1.39	)	$	(0.24	)	$	0.20	$	0.04

Securities outstanding not included in the computation of diluted (loss) earnings per share as their effect is antidilutive:
Stock options	—			—			—		—
Restricted shares	62,850			105,944			—		—
Convertible preferred stock	—			N/A			N/A		N/A

Income Taxes and Tax Receivable Agreement (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of Income Tax Expense (Benefit)

Income tax expense (benefit) is comprised of the following (in thousands):



	Successor			Predecessor
	September 1 to December 31,			January 1 to August 31,			Year Ended December 31,
	2017			2017			2016			2015

Current:
Federal	$	(111	)	$	—		$	(31	)	$	—
State	990			614			244			909
Deferred:
Federal	77,472			(17,288		)	7,326			(132,311		)
State	(6,712		)	(1,415		)	(444		)	(17,580		)
Total income tax expense (benefit)	$	71,639		$	(18,089	)	$	7,095		$	(148,982	)

Schedule of Effective Income Tax Rate Reconciliation



	Successor			Predecessor
	September 1 to December 31,			January 1 to August 31,			Year Ended December 31,
	2017			2017			2016			2015

Tax expense (benefit) at U.S.federal statutory rate	$	24,485		$	4,315		$	32,263		$	(26,648	)
State income tax, net of U.S. federal tax benefit	1,685			(456		)	(86		)	1,059
Change in valuation allowance	529			1,324			354			(137,721		)
Net income attributable to non-controlling interests	(13,872		)	(14,731		)	(26,470		)	(24,996		)
Changes in measurement of uncertain tax positions	(191		)	20			(262		)	(10		)
Stock option compensation	306			37			(200		)	—
Differences related to divested facilities	(429		)	(1,708		)	—			—
Nondeductible transaction costs	2,058			(977		)	—			3,442
Tax return reconciling differences	—			(316		)	1,635			(1,574		)
Change in effective tax rate	64,343			(825		)	—			(2,143		)
TRA liability	(7,404		)	(4,782		)	(327		)	39,428
Other	129			10			188			181
Total income tax expense (benefit)	$	71,639		$	(18,089	)	$	7,095		$	(148,982	)

Schedule of Deferred Tax Assets and Liabilities

The components of temporary differences and the approximate tax effects that give rise to the Company’s net deferred tax asset are as follows (in thousands):



	Successor			Predecessor
	December 31, 2017			December 31, 2016

Deferred tax assets:
Medical malpractice liability	$	3,236		$	4,194
Accrued vacation and incentive compensation	2,125			1,112
Net operating loss carryforwards	137,794			158,796
Allowance for bad debts	2,545			8,343
Capital loss carryforwards	3,024			2,785
Deferred rent	—			1,371
Depreciation on property and equipment	—			530
Deferred financing costs	17,004			—
TRA liability	1,042			4,542
Other deferred assets	4,961			4,879
Total gross deferred tax assets	171,731			186,552
Less: Valuation allowance	(11,032		)	(7,358		)
Total deferred tax assets	160,699			179,194
Deferred tax liabilities:
Deferred financing costs	—			(8,797		)
Depreciation on property and equipment	(12,098		)	—
Amortization of intangible assets	(12,441		)	(15,241		)
Basis differences of partnerships and joint ventures	(2,399		)	(68,160		)
Deferred rent	(717		)	—
Other deferred liabilities	(725		)	(3,203		)
Total deferred tax liabilities	(28,380		)	(95,401		)
Net deferred tax assets	$	132,319		$	83,793

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending liability for gross unrecognized tax benefits for the years ended December 31, 2017 and 2016 is as follows (in thousands):



	Successor			Predecessor
	December 31, 2017			December 31, 2016

Unrecognized tax benefits at beginning of year	$	1,061		$	1,403
Additions for acquired positions	36			—
Additions for tax positions of prior years	—			60
Reductions for tax positions of prior year	(407		)	(398		)
Settlements	—			(4		)
Unrecognized tax benefits at end of year	$	690		$	1,061

Equity-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Restricted Stock Activity

A summary of non-vested restricted share-based activity for the years ended December 31, 2017, 2016, and 2015 follows:



	Unvested Shares		Weighted Average Grant Date Fair Value
Predecessor
Outstanding at January 1, 2015	1,242,065		$	1.96
Granted/Earned	569,114		6.31
Vested	(1,643,525	)	3.79
Outstanding at December 31, 2015	167,654		$	2.53
Granted/Earned	384,629		15.09
Forfeited/Canceled	(53,003	)	11.85
Vested	(37,038	)	6.31
Outstanding at December 31, 2016	462,242		$	3.72
Granted/Earned	388,454		18.40
Forfeited/Canceled	(67,771	)	18.01
Vested	(169,881	)	10.29
Outstanding at August 31, 2017	613,044		$	16.02



Successor
Outstanding at September 1, 2017	613,044		$	16.02
Granted/Earned	112,107		11.15
Forfeited/Canceled	(54,622	)	10.94
Vested	(96,073	)	17.03
Outstanding at December 31, 2017	574,456		$	15.95

Schedule of Stock Options, Valuation Assumptions

The following table sets forth the assumptions used by the Company to estimate the fair value of options granted in 2016 and 2015 under the 2015 Omnibus Incentive Plan:



Expected volatility		29% - 43%
Risk-free interest rate		0.54% - 1.36%
Expected dividends		—
Average expected term (years)		2.56
Fair value of stock options granted		$2.64 - $5.74

Schedule of Stock Options Activity

A summary of stock option activity for the years ended December 31, 2017, 2016, and 2015 follows:



	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)
Predecessor
Outstanding at January 1, 2015	—
Granted	8,488		$	20.03	3.0
Exercised	—
Forfeited	—
Outstanding at December 31, 2015	8,488		$	20.03	3.0
Granted	7,779		17.99		1.6
Exercised	—
Forfeited	—
Outstanding at December 31, 2016	16,267		$	19.05	1.8
Granted	—
Exercised	(3,580	)	15.36
Forfeited	—
Outstanding at August 31, 2017	12,687		$	20.10	1.5



Successor
Outstanding at September 1, 2017	12,687		$	20.10	1.5
Granted	—
Exercised	—
Forfeited	—
Outstanding at December 31, 2017⁽¹⁾	12,687		$	20.10	1.2

⁽¹⁾ Of the outstanding options, 7,058 were exercisable as of December 31, 2017 (Successor).

Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Schedule of Revenues by Reportable Segment

The following tables present financial information for each reportable segment (in thousands):



	Successor		Predecessor
	September 1 to December 31,		January 1 to August 31,		Year Ended December 31,
	2017		2017		2016		2015
Revenues:
Surgical facility services	$	564,458	$	688,725	$	1,042,097	$	884,144
Ancillary services	24,660		52,261		90,836		61,175
Optical services	3,486		7,629		12,505		14,572
Total revenues	$	592,604	$	748,615	$	1,145,438	$	959,891

Schedule of Segment Operating Income



	Successor			Predecessor
	September 1 to December 31,			January 1 to August 31,			Year Ended December 31,
	2017			2017			2016			2015
Adjusted EBITDA:
Surgical facility services	$	103,760		$	125,912		$	214,218		$	180,113
Ancillary services	(2,255		)	(6,526		)	12,685			18,715
Optical services	736			2,214			3,308			3,905
All other	(23,504		)	(36,036		)	(50,948		)	(44,680		)
Total Adjusted EBITDA ⁽¹⁾	78,737			85,564			179,263			158,053

Net income attributable to non-controlling interests	39,634			42,087			75,630			71,416
Depreciation and amortization	(21,804		)	(30,124		)	(39,551		)	(34,545		)
Interest expense, net	(48,740		)	(68,929		)	(100,571		)	(100,980		)
Non-cash stock compensation expense	(1,887		)	(3,697		)	(2,021		)	(7,502		)
Contingent acquisition compensation expense	(1,982		)	(5,057		)	(5,092		)	—
Termination of management agreement and IPO costs	—			—			—			(5,834		)
Management fee ⁽²⁾	—			—			—			(2,250		)
Merger transaction, integration and practice acquisition costs ⁽³⁾	(9,330		)	(7,677		)	(11,617		)	(20,579		)
Gain on litigation settlement	8,740			3,794			14,101			—
Gain on acquisition escrow release	167			1,000			—			—
Gain (loss) on disposal or impairment of long-lived assets, net	(5		)	(1,715		)	(2,355		)	2,097
Gain on amendment to tax receivable agreement	1,098			15,294			—			—
Tax receivable agreement benefit (expense)	25,329			—			(3,733		)	(119,911		)
Loss on debt refinancing	—			(18,211		)	(11,876		)	(16,102		)
Income (loss) before income taxes	$	69,957		$	12,329		$	92,178		$	(76,137	)

⁽¹⁾The above table reconciles Adjusted EBITDA to income before income taxes as reflected in the consolidated statements of operations.

⁽²⁾ Fee payable pursuant the Management and Investment Advisory Services Agreement between the Company and Bayside, which was terminated in connection with the Company's IPO.

Reconciliation of Assets from Segment to Consolidated



	Successor		Predecessor
	December 31, 2017		December 31, 2016
Assets:
Surgical facility services	$	4,072,521	$	1,914,842
Ancillary services	104,274		184,002
Optical services	48,309		22,478
All other	397,669		183,636
Total assets	$	4,622,773	$	2,304,958

Schedule of Depreciation/Amortization and Cash Purchases of PPE



	Successor		Predecessor
	September 1 to December 31,		January 1 to August 31,		Year Ended December 31,
	2017		2017		2016		2015
Cash purchases of property and equipment, net:
Surgical facility services	$	9,334	$	14,582	$	29,157	$	26,723
Ancillary services	191		1,875		5,388		1,051
Optical services	83		73		351		128
All other	1,219		2,243		4,213		5,537
Total cash purchases of property and equipment, net	$	10,827	$	18,773	$	39,109	$	33,439

Quarterly Financial Information (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

The amounts are as follows (in thousands except per share amounts):



	2017
	Predecessor									Successor
	Q1			Q2			Q3⁽¹⁾			Q3⁽¹⁾			Q4

Revenues	$	286,183		$	288,353		$	174,079		$	132,258		$	460,346
Cost of revenues	$	211,948		$	216,452		$	143,772		$	102,924		$	338,704
Net income (loss)	$	14,422		$	11,627		$	4,369		$	(2,648	)	$	966
Net income attributable to non-controlling interests	$	(17,176	)	$	(16,098	)	$	(8,813	)	$	(6,492	)	$	(33,142	)
Net loss attributable to Surgery Partners, Inc.	$	(2,754	)	$	(4,471	)	$	(4,444	)	$	(9,140	)	$	(32,176	)
Basic net loss per share attributable to common stockholders ⁽²⁾	$	(0.06	)	$	(0.09	)	$	(0.09	)	$	(0.57	)	$	(0.83	)
Diluted net loss per share attributable to common stockholders ⁽²⁾	$	(0.06	)	$	(0.09	)	$	(0.09	)	$	(0.57	)	$	(0.83	)

⁽¹⁾The Predecessor period for Q3 includes the two months ended August 31, 2017. The Successor period for Q3 includes the one month ended September 30, 2017.

⁽²⁾ Beginning in the Successor period, per share amounts include the impact of amounts allocated to participating securities. Refer to Note 10. "Earnings Per Share" for further discussion.



	2016
	Predecessor
	Q1			Q2			Q3			Q4

Revenues	$	267,074		$	289,681		$	282,682		$	306,001
Cost of revenues	$	196,703		$	208,852		$	201,394		$	214,247
Net income	$	10,357		$	22,293		$	14,334		$	38,100
Net income attributable to non-controlling interests	$	(17,547	)	$	(20,173	)	$	(16,672	)	$	(21,238	)
Net (loss) income attributable to Surgery Partners, Inc.	$	(7,190	)	$	2,120		$	(2,338	)	$	16,862
Basic net (loss) income per share attributable to common stockholders	$	(0.15	)	$	0.04		$	(0.05	)	$	0.35
Diluted net (loss) income per share attributable to common stockholders	$	(0.15	)	$	0.04		$	(0.05	)	$	0.35

Organization (Details)
$ / shares in Units, $ in Thousands

4 Months Ended

8 Months Ended

12 Months Ended

Aug. 31, 2017

$ / shares

Oct. 06, 2015

USD ($)

Oct. 01, 2015

$ / shares

Dec. 31, 2017

USD ($)

surgical_facility

state

$ / shares

Aug. 31, 2017

USD ($)

$ / shares

Dec. 31, 2016

USD ($)

$ / shares

Dec. 31, 2015

USD ($)

May 09, 2017

$ / shares

Sep. 30, 2015

Common stock, shares issued (in shares) | shares

48,687,136

Proceeds from initial public offering, net of offering costs | $

$ 0

Preferred stock, par value (USD per share)

$ 0.01

Common stock, par value (USD per share)

$ 0.01

Number of States in which entity operates | state

Number of surgical facilities owned | surgical_facility

124

Number of surgical facilities owned, majority interest | surgical_facility

Number of surgical facilities owned, consolidated | surgical_facility

108

Facilities, Ambulatory Surgery Centers

Number of surgical facilities owned | surgical_facility

106

Facilities, Surgical Hospitals

Number of surgical facilities owned | surgical_facility

Common stock, shares issued (in shares) | shares

48,488,616

Proceeds from initial public offering, net of offering costs | $

$ 0

$ 250,979

Preferred stock, par value (USD per share)

$ 0.01

Common stock, par value (USD per share)

$ 0.01

Predecessor | Common Stock

^[1]

14,285,000

Predecessor | IPO

Fair value of stock options granted (in USD per share)

14,285,000

$ 19.00

Proceeds from initial public offering, net of offering costs | $

$ 255,800

Predecessor | IPO, Underwriting Fees

Predecessor | IPO, Directly Related Costs

Issuance Costs | $

15,600

Predecessor | Surgery Center Holdings, LLC

Issuance Costs | $

$ 4,800

Common stock, shares issued (in shares) | shares

33,871,990

Predecessor | BCPE Seminole Holdings LP | Majority Shareholder

Shares expected to be sold by investor (in shares) | shares

26,455,651

Common stock, par value (USD per share)

$ 0.01

Stock expected to be sold by investor (USD per share)

$ 19.00

Percentage of voting interest acquired

65.70%

Predecessor | BCPE Seminole Holdings LP | Majority Shareholder | Common Stock

Percentage of voting interest acquired

54.20%

Predecessor | BCPE Seminole Holdings LP | Preferred Class A | Preferred Stock

Preferred stock, par value (USD per share)

310,000

$ 0.01

Preferred stock dividend

10.00%

Purchase price (USD per share)

$ 1,000

[1]	As described in Note 1 herein, the common stock of the Company is that of Surgery Partners, Inc. as of December 31, 2017, 2016 and 2015 and that of Surgery Center Holdings, Inc. as of December 31, 2014.

Significant Accounting Policies - Schedule of Non-Controlling Interests - Redeemable (Details) - USD ($) $ in Thousands	4 Months Ended	8 Months Ended	12 Months Ended
	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016
Non-Controlling Interests - Redeemable [Roll Forward]
Non-controlling interest, beginning balance	$ 271,001
Net income attributable to non-controlling interests—redeemable	12,931
Acquisition and disposal of shares of non-controlling interests, net—redeemable	819
Distributions to non-controlling interest —redeemable holders	(8,228)
Reallocation in application of pushdown accounting	21,248
Purchase price adjustments	1,545
Non-controlling interest, ending balance	299,316	$ 271,001
Predecessor
Non-Controlling Interests - Redeemable [Roll Forward]
Non-controlling interest, beginning balance	$ 328,665	180,521	$ 183,439
Net income attributable to non-controlling interests—redeemable		9,615	18,023
Acquisition and disposal of shares of non-controlling interests, net—redeemable		(3,323)	(3,781)
Distributions to non-controlling interest —redeemable holders		(11,468)	(17,160)
Acquisition of NSH		153,320
Non-controlling interest, ending balance		$ 328,665	$ 180,521

Significant Accounting Policies - Variable Interest Entities (Details) $ in Millions				8 Months Ended	12 Months Ended
	Dec. 31, 2017 USD ($) Anesthesia_Practice	Dec. 31, 2017 USD ($) surgical_facility	Dec. 31, 2017 USD ($) Practice	Aug. 31, 2017 Practice	Dec. 31, 2016 USD ($) Anesthesia_Practice	Dec. 31, 2016 USD ($) surgical_facility	Dec. 31, 2016 USD ($) Practice
Variable Interest Entity [Line Items]
Number of facilities included in VIE	3	5	3
Predecessor
Variable Interest Entity [Line Items]
Number of facilities included in VIE					3	5	2
Number of business entities acquired \| Practice				1
Variable Interest Entity Primary Beneficiary
Variable Interest Entity [Line Items]
Total assets related to VIE	$ 13.1	$ 13.1	$ 13.1
Total liabilities related to VIE	$ 5.8	$ 5.8	$ 5.8
Variable Interest Entity Primary Beneficiary \| Predecessor
Variable Interest Entity [Line Items]
Total assets related to VIE					$ 24.8	$ 24.8	$ 24.8
Total liabilities related to VIE					$ 10.7	$ 10.7	$ 10.7

Significant Accounting Policies - Equity Method Investments (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Investments in and advances to affiliates	$ 74,282

Significant Accounting Policies - Fair Value of Financial Instruments (Details) - Fair Value, Inputs, Level 1 - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Deposits	$ 1.9
Liability of SERP	$ 1.9
Predecessor
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Deposits		$ 1.7
Liability of SERP		$ 1.7

Significant Accounting Policies - Schedule of Revenues by Service Type (Details) - Revenue Source - Revenue	4 Months Ended	8 Months Ended	12 Months Ended
	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenue from External Customer [Line Items]
Revenue by service type as a percentage of total revenues	100.00%
Healthcare Organization, Patient Service
Revenue from External Customer [Line Items]
Revenue by service type as a percentage of total revenues	98.50%
Surgical facility services
Revenue from External Customer [Line Items]
Revenue by service type as a percentage of total revenues	94.30%
Ancillary services
Revenue from External Customer [Line Items]
Revenue by service type as a percentage of total revenues	4.20%
Healthcare Organization, Other Service
Revenue from External Customer [Line Items]
Revenue by service type as a percentage of total revenues	1.50%
Optical services
Revenue from External Customer [Line Items]
Revenue by service type as a percentage of total revenues	0.60%
Other
Revenue from External Customer [Line Items]
Revenue by service type as a percentage of total revenues	0.90%
Predecessor
Revenue from External Customer [Line Items]
Revenue by service type as a percentage of total revenues		100.00%	100.00%	100.00%
Predecessor \| Healthcare Organization, Patient Service
Revenue from External Customer [Line Items]
Revenue by service type as a percentage of total revenues		98.40%	98.20%	98.00%
Predecessor \| Surgical facility services
Revenue from External Customer [Line Items]
Revenue by service type as a percentage of total revenues		91.40%	90.30%	91.60%
Predecessor \| Ancillary services
Revenue from External Customer [Line Items]
Revenue by service type as a percentage of total revenues		7.00%	7.90%	6.40%
Predecessor \| Healthcare Organization, Other Service
Revenue from External Customer [Line Items]
Revenue by service type as a percentage of total revenues		1.60%	1.80%	2.00%
Predecessor \| Optical services
Revenue from External Customer [Line Items]
Revenue by service type as a percentage of total revenues		1.00%	1.10%	1.50%
Predecessor \| Other
Revenue from External Customer [Line Items]
Revenue by service type as a percentage of total revenues		0.60%	0.70%	0.50%

Significant Accounting Policies - Schedule of Revenues by Sources (Details) - USD ($)	1 Months Ended	2 Months Ended	3 Months Ended							4 Months Ended	8 Months Ended	12 Months Ended
	Sep. 30, 2017	Aug. 31, 2017	Dec. 31, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Increase of revenue as result of changes in estimates to third-party settlements										$ 0
Total net revenues	$ 132,258,000		$ 460,346,000							592,604,000
Healthcare Organization, Patient Service
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Patient service revenues										$ 583,803,000
Healthcare Organization, Patient Service \| Customer \| Revenue
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Revenue by service type as a percentage of total revenues										100.00%
Optical services
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Other service revenues										$ 3,486,000
Other
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Other service revenues										5,315,000
Private insurance \| Healthcare Organization, Patient Service
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Patient service revenues										$ 347,801,000
Private insurance \| Healthcare Organization, Patient Service \| Customer \| Revenue
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Revenue by service type as a percentage of total revenues										59.60%
Government \| Healthcare Organization, Patient Service
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Patient service revenues										$ 196,926,000
Government \| Healthcare Organization, Patient Service \| Customer \| Revenue
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Revenue by service type as a percentage of total revenues										33.70%
Self-pay \| Healthcare Organization, Patient Service
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Patient service revenues										$ 15,233,000
Self-pay \| Healthcare Organization, Patient Service \| Customer \| Revenue
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Revenue by service type as a percentage of total revenues										2.60%
Other \| Healthcare Organization, Patient Service
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Patient service revenues										$ 23,843,000
Other \| Healthcare Organization, Patient Service \| Customer \| Revenue
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Revenue by service type as a percentage of total revenues										4.10%
Predecessor
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Increase of revenue as result of changes in estimates to third-party settlements											$ 1,100,000	$ 6,800,000	$ 2,300,000
Total net revenues		$ 174,079,000		$ 288,353,000	$ 286,183,000	$ 306,001,000	$ 282,682,000	$ 289,681,000	$ 267,074,000		748,615,000	1,145,438,000	959,891,000
Increase in reserves for accounts receivable											15,600,000
Predecessor \| Healthcare Organization, Patient Service
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Patient service revenues											$ 736,408,000	$ 1,124,604,000	$ 940,711,000
Predecessor \| Healthcare Organization, Patient Service \| Customer \| Revenue
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Revenue by service type as a percentage of total revenues											100.00%	100.00%	100.00%
Predecessor \| Optical services
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Other service revenues											$ 7,629,000	$ 12,505,000	$ 14,572,000
Predecessor \| Other
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Other service revenues											4,578,000	8,329,000	4,608,000
Predecessor \| Private insurance \| Healthcare Organization, Patient Service
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Patient service revenues											$ 360,092,000	$ 579,662,000	$ 516,739,000
Predecessor \| Private insurance \| Healthcare Organization, Patient Service \| Customer \| Revenue
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Revenue by service type as a percentage of total revenues											48.90%	51.50%	55.00%
Predecessor \| Government \| Healthcare Organization, Patient Service
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Patient service revenues											$ 308,993,000	$ 448,953,000	$ 359,471,000
Predecessor \| Government \| Healthcare Organization, Patient Service \| Customer \| Revenue
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Revenue by service type as a percentage of total revenues											42.00%	39.90%	38.20%
Predecessor \| Self-pay \| Healthcare Organization, Patient Service
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Patient service revenues											$ 15,949,000	$ 19,817,000	$ 16,190,000
Predecessor \| Self-pay \| Healthcare Organization, Patient Service \| Customer \| Revenue
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Revenue by service type as a percentage of total revenues											2.20%	1.80%	1.70%
Predecessor \| Other \| Healthcare Organization, Patient Service
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Patient service revenues											$ 51,374,000	$ 76,172,000	$ 48,311,000
Predecessor \| Other \| Healthcare Organization, Patient Service \| Customer \| Revenue
Health Care Organization, Receivable and Revenue Disclosures [Line Items]
Revenue by service type as a percentage of total revenues											6.90%	6.80%	5.10%

Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Thousands	4 Months Ended	8 Months Ended	12 Months Ended
	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Third-Party Medicaid settlements liability	$ 1,000
Allowance for Doubtful Accounts Receivable [Roll Forward]
Allowance for doubtful accounts, beginning balance	0
Provision for doubtful accounts	12,455
Accounts written off, net of recoveries	(10,429)
Allowance for doubtful accounts, ending balance	2,026	$ 0
Optical products receivable	7,563
Predecessor
Accounts, Notes, Loans and Financing Receivable [Line Items]
Third-Party Medicaid settlements receivable			$ 500
Allowance for Doubtful Accounts Receivable [Roll Forward]
Allowance for doubtful accounts, beginning balance	$ 32,073	29,872	18,322	$ 5,329
Provision for doubtful accounts		16,297	24,212	23,578
Accounts written off, net of recoveries		(14,096)	(12,662)	(10,585)
Allowance for doubtful accounts, ending balance		$ 32,073	29,872	$ 18,322
Optical products receivable			$ 7,042

Significant Accounting Policies - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Schedule Of Prepaid Expenses And Other Current Assets [Line Items]
Prepaid expenses	$ 16,835
Receivables - optical product purchasing organization	7,563
Acquisition escrow deposit	3,809
Insurance recoveries	2,828
Other	24,302
Total	$ 55,337
Predecessor
Schedule Of Prepaid Expenses And Other Current Assets [Line Items]
Prepaid expenses		$ 11,158
Receivables - optical product purchasing organization		7,042
Acquisition escrow deposit		10,871
Insurance recoveries		2,476
Other		11,338
Total		$ 42,885

Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2017
Buildings and improvements \| Minimum
Property, Plant and Equipment [Line Items]
Property, and equipment useful life	20 years
Buildings and improvements \| Maximum
Property, Plant and Equipment [Line Items]
Property, and equipment useful life	40 years
Computer and software \| Minimum
Property, Plant and Equipment [Line Items]
Property, and equipment useful life	3 years
Computer and software \| Maximum
Property, Plant and Equipment [Line Items]
Property, and equipment useful life	5 years
Furniture and equipment \| Minimum
Property, Plant and Equipment [Line Items]
Property, and equipment useful life	5 years
Furniture and equipment \| Maximum
Property, Plant and Equipment [Line Items]
Property, and equipment useful life	7 years

Significant Accounting Policies - Goodwill and Intangible Assets (Details) - USD ($)		12 Months Ended
	Oct. 01, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Intangible Assets [Line Items]
Goodwill impairment	$ 0
Physician Income Guarantees \| Minimum
Intangible Assets [Line Items]
Intangible asset useful life		3 years
Physician Income Guarantees \| Maximum
Intangible Assets [Line Items]
Intangible asset useful life		4 years
Non-Compete Agreements \| Minimum
Intangible Assets [Line Items]
Intangible asset useful life		2 years
Non-Compete Agreements \| Maximum
Intangible Assets [Line Items]
Intangible asset useful life		5 years
Management Rights
Intangible Assets [Line Items]
Intangible asset useful life		15 years
Customer Relationships \| Minimum
Intangible Assets [Line Items]
Intangible asset useful life		3 years
Customer Relationships \| Maximum
Intangible Assets [Line Items]
Intangible asset useful life		10 years
Predecessor
Intangible Assets [Line Items]
Goodwill impairment			$ 0	$ 0

Significant Accounting Policies - Restricted Invested Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted invested assets	$ 315
Chesterfield, Missouri facility
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted invested assets	300
Predecessor
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted invested assets		$ 315
Predecessor \| Chesterfield, Missouri facility
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted invested assets	$ 300

Significant Accounting Policies - Schedule of Other Long-Term Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Other Assets, Noncurrent [Line Items]
Acquisition escrow deposit	$ 19,600
Insurance recoveries	10,018
Notes receivable	2,263
Deposits	3,151
Other	13,318
Total	$ 48,350
Predecessor
Other Assets, Noncurrent [Line Items]
Acquisition escrow deposit		$ 0
Insurance recoveries		6,835
Notes receivable		716
Deposits		4,196
Other		4,688
Total		$ 16,435

Significant Accounting Policies - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Other Liabilities, Current [Line Items]
Interest payable	$ 20,537
Amounts due to patients and payors	18,096
Insurance liabilities	9,873
Current taxes payable	4,912
Acquisition escrow liability	3,809
Accrued expenses and other	52,717
Total	$ 109,944
Predecessor
Other Liabilities, Current [Line Items]
Interest payable		$ 19,206
Amounts due to patients and payors		12,221
Insurance liabilities		6,625
Current taxes payable		2,622
Acquisition escrow liability		10,871
Accrued expenses and other		28,319
Total		$ 79,864

Significant Accounting Policies - Schedule of Other Long-Term Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Capital Leased Assets [Line Items]
Facility lease obligations	$ 121,627
Acquisition escrow liability	19,600
Medical malpractice liability	16,450
Unfavorable lease liability	11,889
Other	9,123
Total	178,689
Capital lease obligations	27,594
Surgical Facilities
Capital Leased Assets [Line Items]
Current portion of lease obligation	6,300
Capital lease obligations	$ 121,600
Predecessor
Capital Leased Assets [Line Items]
Facility lease obligations		$ 52,653
Acquisition escrow liability		0
Medical malpractice liability		10,453
Unfavorable lease liability		1,671
Other		11,489
Total		76,266
Capital lease obligations		13,996
Predecessor \| Surgical Facilities
Capital Leased Assets [Line Items]
Current portion of lease obligation		1,300
Capital lease obligations		$ 52,700

Significant Accounting Policies - Professional, General and Workers' Compensation Insurance (Details) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016
Liability for Claims and Claims Adjustment Expense [Line Items]
Professional, general and workers' compensation insurance reserve	$ 21.0
Estimated insurance recoveries	$ 12.8
Predecessor
Liability for Claims and Claims Adjustment Expense [Line Items]
Professional, general and workers' compensation insurance reserve		$ 13.8
Estimated insurance recoveries		$ 9.3

Acquisitions and Developments - 2017 Transactions Narrative (Details) $ / shares in Units, $ in Thousands					1 Months Ended	2 Months Ended	3 Months Ended							4 Months Ended	8 Months Ended	12 Months Ended
	Aug. 31, 2017 USD ($) Anesthesia_Practice $ / shares	Aug. 31, 2017 USD ($) surgical_facility $ / shares	Aug. 31, 2017 USD ($) $ / shares	Aug. 31, 2017 USD ($) surgical_hospital $ / shares	Sep. 30, 2017 USD ($)	Aug. 31, 2017 USD ($) $ / shares	Dec. 31, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2017 USD ($) surgical_facility Practice	Aug. 31, 2017 USD ($) Practice $ / shares	Dec. 31, 2017 USD ($) surgical_facility	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($) Anesthesia_Practice	Dec. 31, 2015 USD ($) surgical_facility	Dec. 31, 2015 USD ($)
Business Acquisition [Line Items]
Cash consideration														$ 29,249
Merger transaction and integration costs														7,470
Merger transaction, integration and practice acquisition costs														9,330
Net (loss) income attributable to Surgery Partners, Inc.					$ (9,140)		$ (32,176)							(41,316)
Gain on amendment to TRA														1,100
Loss on debt refinancing														0
Purchase price adjustments														30,253
Goodwill	$ 3,269,225	$ 3,269,225	$ 3,269,225	$ 3,269,225		$ 3,269,225	3,346,838							3,346,838	$ 3,269,225	$ 3,346,838
BCPE Seminole Holdings LP \| H.I.G Bayside Debt & LBO Fund II L.P.
Business Acquisition [Line Items]
Goodwill, expected tax deductible amount	$ 360,500	$ 360,500	$ 360,500	$ 360,500		$ 360,500									$ 360,500
Purchase price per share (USD per share) \| $ / shares	$ 19.00	$ 19.00	$ 19.00	$ 19.00		$ 19.00									$ 19.00
Cash consideration			$ 502,700
Equity interest in acquiree	54.20%	54.20%	54.20%	54.20%		54.20%									54.20%
Total interest in acquiree	65.70%	65.70%	65.70%	65.70%		65.70%									65.70%
Purchase price adjustments														30,700
Goodwill	$ 3,299,911	$ 3,299,911	$ 3,299,911	$ 3,299,911		$ 3,299,911									$ 3,299,911
Surgical facility services \| BCPE Seminole Holdings LP \| H.I.G Bayside Debt & LBO Fund II L.P.
Business Acquisition [Line Items]
Goodwill	3,116,000	3,116,000	3,116,000	3,116,000		3,116,000									3,116,000
Ancillary services \| BCPE Seminole Holdings LP \| H.I.G Bayside Debt & LBO Fund II L.P.
Business Acquisition [Line Items]
Goodwill	151,900	151,900	151,900	151,900		151,900									151,900
Optical services \| BCPE Seminole Holdings LP \| H.I.G Bayside Debt & LBO Fund II L.P.
Business Acquisition [Line Items]
Goodwill	32,500	32,500	32,500	32,500		32,500									32,500
NSH
Business Acquisition [Line Items]
Net increase in goodwill														25,100
Proforma revenue since date of acquisition														205,200
Net (loss) income attributable to Surgery Partners, Inc.														20,400
Transaction related costs														7,300
Gain on amendment to TRA														$ 1,100
2017 Physician Practice Acquisitions
Business Acquisition [Line Items]
Number of business entities acquired \| Practice														1
Acquisitions
Business Acquisition [Line Items]
Cash consideration														$ 29,448
Goodwill							49,317							$ 49,317		$ 49,317
Surgical Facility Acquisitions
Business Acquisition [Line Items]
Number of business entities acquired \| surgical_facility														1
Number of businesses acquired in existing market																1		4	3
Predecessor
Business Acquisition [Line Items]
Cash consideration															$ 725,853		$ 146,405			$ 112,596
Number of business entities acquired \| Practice															1
Merger transaction and integration costs															$ 5,584		8,738			17,920
Merger transaction, integration and practice acquisition costs															7,677		11,617			20,579
Net (loss) income attributable to Surgery Partners, Inc.						(4,444)		$ (4,471)	$ (2,754)	$ 16,862	$ (2,338)	$ 2,120	$ (7,190)		(11,669)		9,453			1,429
Gain on amendment to TRA															15,300
Loss on debt refinancing															18,211		11,876			16,102
Purchase price adjustments															1,220		(66)
Goodwill	2,414,572	2,414,572	2,414,572	2,414,572		2,414,572				1,555,204					2,414,572		1,555,204	$ 1,407,927	$ 1,407,927	$ 1,407,927
Predecessor \| NSH
Business Acquisition [Line Items]
Cash consideration			711,700
Escrow account	$ 19,600	$ 19,600	19,600	$ 19,600		19,600									19,600
Number of business entities acquired	7	22		15
Merger transaction and integration costs						82,600
Deferred loan costs	$ 45,500	$ 45,500	45,500	$ 45,500		45,500									45,500
Issuance cost capitalized	18,300	18,300	18,300	18,300		18,300									18,300
Merger transaction, integration and practice acquisition costs						2,400
Loss on debt extinguishment						16,400
Goodwill, expected tax deductible amount							$ 153,500							$ 153,500		$ 153,500
Transaction related costs															11,300
Gain on amendment to TRA															15,300
Loss on debt refinancing															18,200		11,900
Cash consideration			762,850
Goodwill	870,241	870,241	870,241	870,241		870,241									$ 870,241
Predecessor \| 2017 Physician Practice Acquisitions
Business Acquisition [Line Items]
Number of businesses acquired in existing market \| Practice															3
Predecessor \| Acquisitions
Business Acquisition [Line Items]
Goodwill, expected tax deductible amount										120,000							120,000
Cash consideration															$ 14,163		135,061
Goodwill	$ 12,545	$ 12,545	$ 12,545	$ 12,545		$ 12,545				$ 148,181					$ 12,545		$ 148,181

Acquisitions and Developments - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands		4 Months Ended	8 Months Ended	12 Months Ended
	Aug. 31, 2017	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Net assets acquired:
Goodwill	$ 3,269,225	$ 3,346,838	$ 3,269,225
Acquisitions
Business Acquisition [Line Items]
Cash consideration		29,448
Fair value of non-controlling interests		21,893
Aggregate fair value of acquisition		51,341
Net assets acquired:
Current assets		2,285
Property and equipment		248
Intangible assets		41
Goodwill		49,317
Current liabilities		(550)
Long-term debt, less current maturities		0
Total fair value of net assets acquired		51,341
Predecessor
Net assets acquired:
Goodwill	2,414,572		2,414,572	$ 1,555,204	$ 1,407,927
Predecessor \| NSH
Business Acquisition [Line Items]
Cash consideration	762,850
Fair value of non-controlling interests	325,965		325,965
Aggregate fair value of acquisition	1,088,815		1,088,815
Net assets acquired:
Cash and cash equivalents	51,159		51,159
Accounts receivable	71,901		71,901
Inventories	14,986		14,986
Prepaid expenses and other current assets	18,397		18,397
Property and equipment	174,499		174,499
Intangible assets	27,746		27,746
Goodwill	870,241		870,241
Investments in and advances to affiliates	29,737		29,737
Long-term deferred tax assets	17,279		17,279
Other long-term assets	27,229		27,229
Accounts payable	(29,652)		(29,652)
Accrued payroll and benefits	(28,755)		(28,755)
Other current liabilities	(21,287)		(21,287)
Current maturities of long-term debt	(16,416)		(16,416)
Long-term debt, less current maturities	(42,770)		(42,770)
Other long-term liabilities	(75,479)		(75,479)
Total fair value of net assets acquired	1,088,815		1,088,815
Predecessor \| Acquisitions
Business Acquisition [Line Items]
Cash consideration			14,163	135,061
Fair value of non-controlling interests	105		105	27,164
Aggregate fair value of acquisition	14,268		14,268	162,225
Net assets acquired:
Current assets	866		866	11,383
Property and equipment	696		696	3,921
Intangible assets	634		634	4,475
Goodwill	12,545		12,545	148,181
Other long-term assets				56
Current liabilities	(287)		(287)	(5,422)
Long-term debt, less current maturities	(186)		(186)
Long-term liabilities				(369)
Total fair value of net assets acquired	14,268		14,268	$ 162,225
H.I.G Bayside Debt & LBO Fund II L.P. \| BCPE Seminole Holdings LP
Business Acquisition [Line Items]
Cash consideration	502,700
Equity attributable to Surgery Partners, Inc.	720,606
Redeemable preferred stock	310,000
Fair value of non-controlling interests	957,027		957,027
Aggregate fair value of acquisition		$ 1,987,633
Net assets acquired:
Cash and cash equivalents	214,206		214,206
Accounts receivable	253,173		253,173
Inventories	44,310		44,310
Prepaid expenses and other current assets	61,475		61,475
Property and equipment	380,085		380,085
Intangible assets	60,104		60,104
Goodwill	3,299,911		3,299,911
Investments in and advances to affiliates	74,722		74,722
Restricted invested assets	315		315
Long-term deferred tax assets	204,408		204,408
Other long-term assets	49,681		49,681
Accounts payable	(64,921)		(64,921)
Accrued payroll and benefits	(54,437)		(54,437)
Other current liabilities	(94,740)		(94,740)
Current maturities of long-term debt	(49,942)		(49,942)
Long-term debt, less current maturities	(2,142,375)		(2,142,375)
Long-term tax receivable agreement liability	(78,498)		(78,498)
Other long-term liabilities	(169,844)		(169,844)
Total fair value of net assets acquired	$ 1,987,633		$ 1,987,633

Acquisitions and Developments - Pro Forma Results (Details) - NSH - USD ($) $ in Thousands	4 Months Ended	8 Months Ended	12 Months Ended
	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Net revenues	$ 592,604
Net income	4,477
Less: Net income attributable to non-controlling interests	(39,634)
Net income	$ (35,157)
Predecessor
Business Acquisition [Line Items]
Net revenues		$ 1,122,326	$ 1,679,254
Net income		63,269	132,699
Less: Net income attributable to non-controlling interests		(65,122)	(112,123)
Net income		$ (1,853)	$ 20,576

Acquisitions and Developments - 2016 Transactions Narrative (Details) $ in Millions	12 Months Ended
	Dec. 31, 2017 Anesthesia_Practice surgical_facility urgent_care_facility	Dec. 31, 2016 USD ($) Anesthesia_Practice surgical_facility Practice	Dec. 31, 2015 Anesthesia_Practice	Dec. 31, 2015 surgical_facility	Dec. 31, 2015 USD ($)
Surgical Facility Acquisitions
Business Acquisition [Line Items]
Number of businesses acquired in new market \| surgical_facility				2
Aggregate purchase price					$ 84.2
Number of businesses acquired in existing market	1		4	3
Anesthesia Practice
Business Acquisition [Line Items]
Number of businesses acquired in existing market \| Anesthesia_Practice	1
Urgent Care Facility
Business Acquisition [Line Items]
Number of businesses acquired in existing market \| urgent_care_facility	1
Ancillary Services Acquisition
Business Acquisition [Line Items]
Aggregate purchase price					$ 40.4
Predecessor \| Idaho Falls, Idaho, Surgical Hospital
Business Acquisition [Line Items]
Amount of additional interest purchased, percentage		7.04%
Amount of additional interest purchased, value		$ 20.3
Predecessor \| Surgical Facility Acquisitions
Business Acquisition [Line Items]
Number of businesses acquired in new market \| surgical_facility		2
Predecessor \| Anesthesia Practice
Business Acquisition [Line Items]
Number of businesses acquired in new market \| Anesthesia_Practice		2
Aggregate purchase price		$ 36.5
Predecessor \| Physician Practice
Business Acquisition [Line Items]
Number of businesses acquired in existing market \| Practice		9
Predecessor \| Integrated Physician Practice
Business Acquisition [Line Items]
Number of businesses acquired in existing market \| Practice		2
Predecessor \| Ancillary Services Acquisition
Business Acquisition [Line Items]
Aggregate purchase price		$ 114.7
Fair value of contingent consideration liability		16.6
Predecessor \| Acquisitions
Business Acquisition [Line Items]
Goodwill, expected tax deductible amount		$ 120.0

Acquisitions and Developments - 2015 Transactions Narrative (Details) $ in Millions	4 Months Ended	12 Months Ended
	Dec. 31, 2017 surgical_facility	Dec. 31, 2017 surgical_facility	Dec. 31, 2015 Anesthesia_Practice	Dec. 31, 2015 surgical_facility	Dec. 31, 2015 Practice	Dec. 31, 2015 USD ($)	Dec. 31, 2015 Physician
Business Acquisition [Line Items]
Number of physician practice transactions \| Physician							17
Surgical Facility Acquisitions
Business Acquisition [Line Items]
Number of businesses acquired in new market \| surgical_facility				2
Number of businesses acquired in existing market		1	4	3
Aggregate purchase price \| $						$ 84.2
Number of business entities acquired \| surgical_facility	1
Ancillary Services Acquisition
Business Acquisition [Line Items]
Aggregate purchase price \| $						$ 40.4
Number of business entities acquired \| Practice					13

Divestitures (Details) $ in Millions	4 Months Ended	12 Months Ended
Divestitures (Details) $ in Millions	Dec. 31, 2017 USD ($) surgical_facility	Dec. 31, 2016 USD ($) surgical_facility	Dec. 31, 2015 USD ($) surgical_facility
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Transaction value of business disposition	$ 1.3
Gain (loss) on disposition of business	$ 0.8
Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of surgical facilities sold \| surgical_facility	1	1	3
Transaction value of business disposition		$ 0.8	$ 10.9
Gain (loss) on disposition of business		$ 0.8	$ 2.9

Property and Equipment (Details) - USD ($) $ in Thousands	4 Months Ended	8 Months Ended	12 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	$ 418,216		$ 290,640
Less: Accumulated depreciation	(19,680)		(86,387)
Property and equipment, net	398,536		204,253
Depreciation	20,000
Carrying value of assets under capital lease	16,200
Accumulated depreciation of assets under capital lease	5,800
Land
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	19,561		8,082
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	188,571		118,172
Furniture and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	20,813		14,670
Computer and software
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	28,578		29,902
Medical equipment
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	138,112		117,418
Construction in progress
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	$ 22,581		2,396
Predecessor
Property, Plant and Equipment [Line Items]
Property and equipment, net			204,253
Depreciation		$ 24,100	30,000	$ 25,500
Carrying value of assets under capital lease			15,400
Accumulated depreciation of assets under capital lease			$ 11,600

Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands	4 Months Ended	8 Months Ended	12 Months Ended
	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016
Goodwill [Roll Forward]
Goodwill, beginning of period	$ 3,269,225
Acquisitions	49,317
Divestitures	(1,957)
Purchase price adjustments	30,253
Goodwill, end of period	3,346,838	$ 3,269,225
Predecessor
Goodwill [Roll Forward]
Goodwill, beginning of period	$ 2,414,572	1,555,204	$ 1,407,927
Acquisitions		858,323	147,895
Divestitures		(175)	(552)
Purchase price adjustments		1,220	(66)
Goodwill, end of period		$ 2,414,572	$ 1,555,204

Goodwill and Intangible Assets - Summary of Components of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount	$ 48,352
Finite-lived intangible assets, accumulated amortization	(2,000)
Total	46,352
Total intangible assets, gross	60,908
Total intangible assets, net	58,908	$ 56,750
Management Rights
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	5,900
Certificates of Need
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	5,548
Medicare licenses
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	1,108
Management Rights
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount	42,600
Finite-lived intangible assets, accumulated amortization	(1,058)
Total	41,542
Non-Compete Agreements
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount	4,874
Finite-lived intangible assets, accumulated amortization	(715)
Total	4,159
Physician income guarantees
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount	878
Finite-lived intangible assets, accumulated amortization	(227)
Total	651
Other
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount	0
Finite-lived intangible assets, accumulated amortization	0
Total	$ 0
Predecessor
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount			$ 60,140
Finite-lived intangible assets, accumulated amortization			(16,139)
Total			44,001
Total intangible assets, gross			64,162
Total intangible assets, net		$ 69,915	48,023	$ 53,568
Predecessor \| Certificates of Need
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets			3,780
Predecessor \| Medicare licenses
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets			242
Predecessor \| Management Rights
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount			24,751
Finite-lived intangible assets, accumulated amortization			(3,461)
Total			21,290
Predecessor \| Non-Compete Agreements
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount			24,673
Finite-lived intangible assets, accumulated amortization			(8,216)
Total			16,457
Predecessor \| Physician income guarantees
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount			1,901
Finite-lived intangible assets, accumulated amortization			(1,088)
Total			813
Predecessor \| Other
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross carrying amount			8,815
Finite-lived intangible assets, accumulated amortization			(3,374)
Total			$ 5,441

Goodwill and Intangible Assets - Summary of Activity of Intangible Assets (Details) - USD ($) $ in Thousands	4 Months Ended	8 Months Ended	12 Months Ended
	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Finite-lived assets:
Intangible assets, beginning balance	$ 56,750
Additions	474
Disposals	(140)
Purchase price adjustments	3,873
Recruitment expense	(227)
Amortization	(1,822)
Intangible assets, ending balance	58,908	$ 56,750
Predecessor
Finite-lived assets:
Intangible assets, beginning balance	69,915	48,023	$ 53,568
Additions		28,312	4,754
Disposals			(135)
Recruitment expense		(380)	(609)
Amortization		(6,040)	(9,555)	$ (9,100)
Intangible assets, ending balance		69,915	$ 48,023	$ 53,568
NSH
Finite-lived assets:
Additions		27,800
Certificates of Need
Finite-lived assets:
Purchase price adjustments	200
Certificates of Need \| NSH
Finite-lived assets:
Additions		700
Medicare licenses \| NSH
Finite-lived assets:
Additions		100
Management Rights
Finite-lived assets:
Purchase price adjustments	6,900
Management Rights \| NSH
Finite-lived assets:
Additions		$ 26,900
Weighted average amortization period		23 years
Non-Compete Agreements
Finite-lived assets:
Purchase price adjustments	$ (3,200)
Non-Compete Agreements \| NSH
Finite-lived assets:
Additions		$ 100
Weighted average amortization period		3 years

Goodwill and Intangible Assets - Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands	4 Months Ended	8 Months Ended	12 Months Ended
	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 1,822
2018	4,966
2019	4,576
2020	4,172
2021	3,730
2022	2,874
Thereafter	26,034
Total	$ 46,352
Predecessor
Finite-Lived Intangible Assets [Line Items]
Amortization expense		$ 6,040	$ 9,555	$ 9,100
Total			$ 44,001

Long-Term Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Long-term debt	$ 2,186,291
Capital lease obligations	27,594
Less: unamortized debt issuance costs and original issue discount	0
Total debt	2,189,282
Less: Current maturities	58,726
Total long-term debt	2,130,556
Line of Credit \| Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt	0
Line of Credit \| 2014 First Lien Credit Agreement
Debt Instrument [Line Items]
Long-term debt	0
Subordinated Notes
Debt Instrument [Line Items]
Long-term debt	0
Notes payable and secured loans
Debt Instrument [Line Items]
Long-term debt	101,921
Predecessor
Debt Instrument [Line Items]
Capital lease obligations			$ 13,996
Less: unamortized debt issuance costs and original issue discount			(32,274)
Total debt			1,442,243
Less: Current maturities			27,822
Total long-term debt			1,414,421
Predecessor \| Line of Credit \| Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt			85,000
Predecessor \| Line of Credit \| 2014 First Lien Credit Agreement
Debt Instrument [Line Items]
Long-term debt			932,000
Predecessor \| Subordinated Notes
Debt Instrument [Line Items]
Long-term debt			1,000
Predecessor \| Notes payable and secured loans
Debt Instrument [Line Items]
Long-term debt			42,521
2017 Revolver Loan, Maturing 2022 \| Secured Debt \| Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt	0
2017 Revolver Loan, Maturing 2022 \| Predecessor \| Secured Debt \| Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt			0
Unamortized fair value discount		$ (9,400)
2017 Term Loan, Maturing 2024 \| Secured Debt
Debt Instrument [Line Items]
Long-term debt	1,280,532
2017 Term Loan, Maturing 2024 \| Predecessor \| Secured Debt
Debt Instrument [Line Items]
Long-term debt			0
Senior Unsecured Notes Due 2021 \| Senior Notes
Debt Instrument [Line Items]
Long-term debt	409,235
Unamortized fair value discount	(6,200)
Unamortized (discount) premium	9,200
Senior Unsecured Notes Due 2021 \| Predecessor \| Senior Notes
Debt Instrument [Line Items]
Long-term debt			400,000
Unamortized (discount) premium		$ 10,000
Senior Unsecured Notes Due 2025 \| Senior Notes
Debt Instrument [Line Items]
Long-term debt	$ 370,000
Senior Unsecured Notes Due 2025 \| Predecessor \| Senior Notes
Debt Instrument [Line Items]
Long-term debt			$ 0

Long-Term Debt - 2014 Revolver Loan & 2014 First Lien Credit Agreement (Details) - USD ($)			1 Months Ended		4 Months Ended	8 Months Ended	12 Months Ended
	Aug. 31, 2017	Mar. 31, 2016	Sep. 30, 2016	Oct. 31, 2015	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Loss on debt refinancing					$ 0
Predecessor
Debt Instrument [Line Items]
Loss on debt refinancing						$ 18,211,000	$ 11,876,000	$ 16,102,000
Predecessor \| Line of Credit \| 2017 Senior Secured Credit Facilities
Debt Instrument [Line Items]
Loss on debt refinancing		$ 8,300,000	$ 3,600,000	$ 16,100,000
2014 Revolver And First Lien Credit Agreement Loans \| Predecessor \| Line of Credit \| Revolving Credit Facility
Debt Instrument [Line Items]
Debt prepayment amount	$ 1,030,000,000
Repurchased outstanding principal	1,027,000,000.000					1,027,000,000.000
Accrued interest paid	$ 3,000,000
Loss on debt extinguishment						$ 18,200,000

Long-Term Debt - 2014 Second Lien Credit Agreement (Details) - USD ($) $ in Thousands		1 Months Ended		4 Months Ended	8 Months Ended	12 Months Ended
	Mar. 31, 2016	Sep. 30, 2016	Oct. 31, 2015	Dec. 31, 2017	Aug. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Loss on debt refinancing				$ 0
Predecessor
Debt Instrument [Line Items]
Loss on debt refinancing					$ 18,211	$ 11,876	$ 16,102
Predecessor \| 2017 Senior Secured Credit Facilities \| Line of Credit
Debt Instrument [Line Items]
Loss on debt refinancing	$ 8,300	$ 3,600	$ 16,100

Long-Term Debt - 2017 Senior Secured Credit Facilities (Details) - USD ($) $ in Millions		12 Months Ended
	Aug. 31, 2017	Dec. 31, 2017
Revolving Credit Facility \| Line of Credit
Debt Instrument [Line Items]
Outstanding balance on debt		$ 71.9
Letter of Credit \| Line of Credit
Debt Instrument [Line Items]
Outstanding balance on debt		$ 3.1
2017 Term Loan, Maturing 2024 \| Secured Debt
Debt Instrument [Line Items]
Repayment threshold	50.00%
Quarterly installment of original principal		0.25%
2017 Term Loan, Maturing 2024 \| Predecessor \| Secured Debt
Debt Instrument [Line Items]
Original balance of debt	$ 1,290.0
Debt issuance costs	18.8
2017 Term Loan, Maturing 2024 \| Predecessor \| Fair Value, Inputs, Level 2 \| Secured Debt
Debt Instrument [Line Items]
Debt discount	$ 6.5
2017 Revolver Loan, Maturing 2022 \| Revolving Credit Facility \| Secured Debt
Debt Instrument [Line Items]
Repayment threshold	50.00%
Commitment fee		0.50%
Net leverage ratio		9.50
Commitment threshold		35.00%
2017 Revolver Loan, Maturing 2022 \| Predecessor \| Revolving Credit Facility \| Secured Debt
Debt Instrument [Line Items]
Original balance of debt	$ 75.0
Debt discount	$ 9.4
Federal Funds Effective Swap Rate \| 2017 Senior Secured Credit Facility \| Secured Debt
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		0.50%
One Month LIBOR \| 2017 Senior Secured Credit Facility \| Secured Debt
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		1.00%
Base Rate \| 2017 Senior Secured Credit Facility \| Secured Debt
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		2.00%
Minimum \| LIBOR \| 2017 Senior Secured Credit Facility \| Secured Debt
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		3.00%
Minimum \| Base Rate \| 2017 Senior Secured Credit Facility \| Secured Debt
Debt Instrument [Line Items]
Debt instrument, margin in addition to base rate		2.00%
Maximum \| LIBOR \| 2017 Senior Secured Credit Facility \| Secured Debt
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		3.25%
Maximum \| Base Rate \| 2017 Senior Secured Credit Facility \| Secured Debt
Debt Instrument [Line Items]
Debt instrument, margin in addition to base rate		2.25%

Long-Term Debt - Senior Unsecured Notes due 2021 (Details) - Senior Notes - Senior Unsecured Notes Due 2021 - USD ($)	12 Months Ended
	Dec. 31, 2017	Aug. 31, 2017	Mar. 31, 2016
Debt Instrument [Line Items]
Debt instrument, stated rate	8.875%
Unamortized premium	$ 9,200,000
Redemption Period One
Debt Instrument [Line Items]
Amount of principal available to be redeemed, percentage	35.00%
Cash proceeds of principal amount, percentage	108.875%
Minimum principal remaining, percentage	50.00%
Period after equity offering	180 days
Redemption price, percentage	100.00%
Redemption Period Two
Debt Instrument [Line Items]
Redemption price, percentage	106.656%
Redemption Period Three
Debt Instrument [Line Items]
Redemption price, percentage	104.438%
Redemption Period Four
Debt Instrument [Line Items]
Redemption price, percentage	100.00%
Redemption Period Five
Debt Instrument [Line Items]
Redemption price, percentage	101.00%
Predecessor
Debt Instrument [Line Items]
Original balance of debt			$ 400,000,000.0
Debt issuance costs		$ 8,400,000
Unamortized premium		$ 10,000,000

Long-Term Debt - Senior Unsecured Notes due 2025 (Details) - Senior Notes - Senior Unsecured Notes Due 2025 - USD ($)	12 Months Ended
	Dec. 31, 2017	Aug. 31, 2017	Jun. 30, 2017
Debt Instrument [Line Items]
Debt instrument, stated rate	6.75%
Redemption Period One
Debt Instrument [Line Items]
Amount of principal available to be redeemed, percentage	40.00%
Cash proceeds of principal amount, percentage	106.75%
Minimum principal remaining, percentage	50.00%
Period after equity offering	180 days
Redemption price, percentage	100.00%
Redemption Period Two
Debt Instrument [Line Items]
Redemption price, percentage	103.375%
Redemption Period Three
Debt Instrument [Line Items]
Redemption price, percentage	101.688%
Redemption Period Four
Debt Instrument [Line Items]
Redemption price, percentage	100.00%
Redemption Period Five
Debt Instrument [Line Items]
Redemption price, percentage	101.00%
Predecessor
Debt Instrument [Line Items]
Original balance of debt			$ 370,000,000.0
Debt issuance costs		$ 17,300,000

Long-Term Debt - Subordinated Notes, Notes Payable, Secured Loans, and Capital Lease Obligations (Details) - USD ($)	Aug. 03, 2017	Dec. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Long-term debt		$ 2,186,291,000
Capital leased assets		16,200,000
Subordinated Notes
Debt Instrument [Line Items]
Long-term debt		0
Notes payable and secured loans
Debt Instrument [Line Items]
Long-term debt		$ 101,921,000
Predecessor
Debt Instrument [Line Items]
Capital leased assets			$ 15,400,000
Predecessor \| Subordinated Notes
Debt Instrument [Line Items]
Repurchased outstanding principal	$ 1,000,000.0
Debt instrument, stated rate	17.00%
Redemption price, percentage	100.00%
Long-term debt			1,000,000
Predecessor \| Notes payable and secured loans
Debt Instrument [Line Items]
Long-term debt			$ 42,521,000

Long-Term Debt - Summary of Scheduled Maturities of Debt Obligations (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Debt Disclosure [Abstract]
2018	$ 58,726
2019	36,857
2020	1,277,253
2021	411,748
2022	8,110
Thereafter	393,597
Total debt	$ 2,186,291

Leases (Details) - USD ($) $ in Thousands	8 Months Ended	12 Months Ended
Leases (Details) - USD ($) $ in Thousands	Aug. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating Leases
2018		$ 67,513
2019		67,136
2020		62,735
2021		56,558
2022		52,582
Thereafter		258,192
Total minimum payments		564,716
Capital Leases
2018		9,100
2019		7,404
2020		5,020
2021		3,505
2022		1,986
Thereafter		6,299
Total minimum payments		33,314
Less: imputed interest		(5,720)
Capital lease obligations		27,594
Total future minimum rental payments to be received		4,200
Operating Leased Assets [Line Items]
Operating leases expense		27,800
Operating lease agreements, with physician investors
Operating Leased Assets [Line Items]
Operating leases expense		$ 7,500
Predecessor
Operating Leased Assets [Line Items]
Operating leases expense	$ 39,200		$ 47,300	$ 40,100
Predecessor \| Operating lease agreements, with physician investors
Operating Leased Assets [Line Items]
Operating leases expense	$ 9,800		$ 14,400	$ 12,900

Redeemable Preferred Stock (Details)
$ / shares in Units, $ in Thousands

4 Months Ended

12 Months Ended

Aug. 31, 2017

USD ($)

$ / shares

Dec. 31, 2017

USD ($)

$ / shares

Dec. 31, 2017

USD ($)

trading_days

$ / shares

Dec. 31, 2015

USD ($)

Dividends declared but unpaid

$ 3,900

Cumulative preferred dividends

$ 9,200

Cumulative preferred dividends (in USD per share) | $ / shares

$ 29.56

Increase (Decrease) in Temporary Equity [Roll Forward]

September 1, 2017

310,000

Dividends accrued

10,481

Cash dividends declared

(5,241)

Mark to redemption adjustment

15,566

December 31, 2017

$ 310,000

$ 330,806

Series A Preferred Stock

Preferred stock dividend rate

10.00%

Trading days | trading_days

Consecutive trading days | trading_days

Threshold share price (in USD per share) | $ / shares

$ 42.00

Maximum cash dividend declarable

50.00%

Redemption price (in USD per share) | $ / shares

$ 1,000.00

Series A Preferred Stock | Common Stock

Share price (in USD per share) | $ / shares

$ 19.00

Predecessor | Common Stock

Initial public offering

$ 250,979

^[1]

14,285,000

Initial public offering

^[1]

$ 143

Predecessor | NSH

Deferred equity issuance costs

$ 18,300

Majority Shareholder | Series A Preferred Stock

Purchase price per share (in USD per share) | $ / shares

310,000

$ 1,000

Initial public offering

$ 310,000

[1]	As described in Note 1 herein, the common stock of the Company is that of Surgery Partners, Inc. as of December 31, 2017, 2016 and 2015 and that of Surgery Center Holdings, Inc. as of December 31, 2014.

Earnings Per Share (Details) - USD ($)

1 Months Ended

2 Months Ended

3 Months Ended

4 Months Ended

8 Months Ended

12 Months Ended

Dec. 31, 2017

Sep. 30, 2017

Aug. 31, 2017

Mar. 16, 2018

Dec. 31, 2017

Jun. 30, 2017

Mar. 31, 2017

Dec. 31, 2016

Sep. 30, 2016

Jun. 30, 2016

Mar. 31, 2016

Dec. 31, 2017

Aug. 31, 2017

Dec. 31, 2016

Dec. 31, 2015

Mar. 15, 2018

Dec. 15, 2017

Numerator:

Net (loss) income attributable to Surgery Partners, Inc.

$ (9,140,000)

$ (32,176,000)

$ (41,316,000)

Less: amounts allocated to participating securities

10,481,000

Less: mark to redemption adjustment

15,566,000

Net (loss) income attributable to common stockholders

$ (67,363,000)

Denominator:

Weighted average shares outstanding- basic (in shares)

48,319,193

Effect of dilutive securities (in shares)

Weighted average shares outstanding- diluted (in shares)

48,319,193

$ (0.57)

$ (0.83)

$ (1.39)

Stock repurchase program, authorized amount

$ (0.57)

$ (0.83)

$ (1.39)

$ 50,000,000

Shares repurchased

180,664

Shares repurchased, average price per share (in dollars per share)

$ 11.12

Stock repurchase program, remaining authorized repurchase amount

$ 48,000,000

Stock options

Antidilutive securities excluded from computation of earnings per share (in shares)

Restricted shares

Antidilutive securities excluded from computation of earnings per share (in shares)

62,850

Convertible preferred stock

Antidilutive securities excluded from computation of earnings per share (in shares)

Net (loss) income attributable to Surgery Partners, Inc.

Numerator:

$ (4,444,000)

$ (4,471,000)

$ (2,754,000)

$ 16,862,000

$ (2,338,000)

$ 2,120,000

$ (7,190,000)

$ (11,669,000)

$ 9,453,000

$ 1,429,000

Less: amounts allocated to participating securities

Less: mark to redemption adjustment

Net (loss) income attributable to common stockholders

$ (11,669,000)

$ 9,453,000

$ 1,429,000

Denominator:

Weighted average shares outstanding- basic (in shares)

48,121,404

48,018,944

36,066,233

Effect of dilutive securities (in shares)

171,794

1,398,154

Weighted average shares outstanding- diluted (in shares)

48,121,404

48,190,738

^[1]

37,464,387

^[1]

$ (0.09)

$ (0.06)

$ 0.35

$ (0.05)

$ 0.04

$ (0.15)

$ (0.24)

$ 0.20

$ 0.04

Predecessor | Stock options

$ (0.09)

$ (0.06)

$ 0.35

$ (0.05)

$ 0.04

$ (0.15)

$ (0.24)

$ 0.20

$ 0.04

Antidilutive securities excluded from computation of earnings per share (in shares)

Predecessor | Restricted shares

Antidilutive securities excluded from computation of earnings per share (in shares)

105,944

Subsequent Event